2010 Garff Properties (Chevy) OPA (Owner Participation Agrmt) for DealershipOWNER PARTICIPATION AGREEMENT
by and between
LA QUINTA REDEVELOPMENT AGENCY
a public body, corporate and politic
W
GARFF PROPERTIES -LA QUINTA, LLC,
a Utah limited liability company
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TABLE OF CONTENTS
1. RECITALS INCORPORATED ...........
Page
....................................................................... 2
2. DEVELOPMENT OF THE SITE.....................................................................................2
2.1
Description of the Project.....................................................................................2
2.2
Project Entitlements..............................................................................................2
2.3
Entitlement Process; Processing...........................................................................3
2.4
Schedule of Performance......................................................................................
3
2.5
Cost of Construction.............................................................................................4
2.6
Rights of Access...................................................................................................4
2.7
Miscellaneous Rules and Regulations Applicable to Development of
theProject.............................................................................................................4
2.8
Release of Construction Covenants......................................................................6
3. AGENCY
LOAN..............................................................................................................7
3.1
Agency Loan for Rehabilitation Improvements...................................................7
3.2
Conditions Precedent to Agency Loan Obligation...............................................8
4. OPERATION OF THE PROJECT AND COVENANTS, CONDITIONS AND
RESTRICTIONS APPLICABLE TO THE SITE AFTER COMPLETION OF
CONSTRUCTION
OF THE PROJECT.........................................................................10
5. DEFAULTS AND REMEDIES.....................................................................................10
5.1
Default................................................................................................................10
5.2
Institution of Legal Actions; Remedies..............................................................11
5.3
Acceptance of Service of Process.......................................................................11
5.4
Rights and Remedies Are Cumulative................................................................11
5.5
Inaction Not a Waiver of Default........................................................................11
5.6
No Waiver...........................................................................................................11
5.7
Applicable Law...................................................................................................
I 1
6. INSURANCE REQUIREMENTS; REPAIR AND RESTORATION OF
PROJECT........................................................................................................................12
6.1
Insurance Requirements......................................................................................12
6.2
Remedies for Defaults Re: Insurance.................................................................14
6.3
Obligation to Repair and Restore Damage Due to Casualty Covered by
Insurance.............................................................................................................14
7. TRANSFER RESTRICTIONS.......................................................................................14
7.1
Prohibition...........................................................................................................14
7.2
Permitted Transfers.............................................................................................15
7.3
Agency Consideration of Proposed Transfer; Release of Transferor
Upon Permitted or Approved Transfer...............................................................15
7.4
Successors and Assigns.......................................................................................16
7.5
Subordination......................................................................................................16
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Pace
8. INDEMNIFICATION OF AGENCY.............................................................................16
9. GENERAL PROVISIONS.............................................................................................17
9.2
Enforced Delay; Extension of Times of Performance........................................18
9.3
Non -Liability of Officials and Employees of Agency to the Developer ............18
9.4
Relationship Between Agency and Developer...................................................19
9.5
Agency Approvals and Actions..........................................................................19
9.6
Counterparts........................................................................................................19
9.7
Integration...........................................................................................................19
9.8
Attorneys' Fees...................................................................................................19
9.9
Titles and Captions.............................................................................................19
9.10
Interpretation.......................................................................................................19
9.11
Modifications......................................................................................................20
9.12
Severability.........................................................................................................20
9.13
Computation of Time..........................................................................................20
9.14
Legal Advice.......................................................................................................20
9.15
Time of Essence..................................................................................................20
9.16
Conflicts of Interest.............................................................................................20
9.17
Third Party Beneficiaries....................................................................................20
9.19
Covenant to Not Cause Violation of Statutes Relating to Relocation of
VehicleDealerships............................................................................................21
9.20
Covenant to Not Cause Violation of Statutes Relating to Direct
Assistance by Agency.........................................................................................21
9.21
General Motors Consent.....................................................................................21
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OWNER PARTICIPATION AGREEMENT
his OWNER PARTICIPATION AGREEMENT (this "Agreement') dated as of
2010 (the "Effective Date"), is made by and between the
LA QUI A REDEVELOPMENT AGENCY, a public body, corporate and politic (the
"Agency"), and GARFF PROPERTIES -LA QUINTA, LLC, a Utah limited liability company
(the "Developer").
RECITALS
The following recitals are a substantive part of this Agreement:
A. On May 19, 1989, pursuant to Health & Safety Code sections 33330 et seq., the
City Council (the "City Council") of the City of La Quinta (the "City") adopted Ordinance
No. 139 approving the Redevelopment Plan (the "Plan") for Redevelopment Project Area 2
("Project Area 2").
B. The Agency is authorized and empowered by the Community Redevelopment
Law (Health and Safety Code Sections 33000, et seq. (the "CRL")), to enter into agreements for
the development of real property and otherwise to assist in the redevelopment of real property
within Project Area 2 in conformity with the Plan, to acquire real and personal property in
redevelopment project areas, to receive consideration for the provision by Agency of
redevelopment assistance, to make and execute contracts and other instruments necessary or
convenient to the exercise of its powers, and to incur indebtedness to finance or refinance
redevelopment projects.
C. In furtherance of the objectives of the CRL, Agency desires to encourage and
promote the rehabilitation and redevelopment of a certain approximately 3.58 acre portion of
Project Area 2 located at 79225 Highway 111 (also designated as Assessor Parcel No. 600-020-
014) (the "Site"), which is improved with the building and facilities previously operated as a Kia
automobile dealership. The Site has been vacant since November 2008, and is currently in a
state of disrepair.
D. Developer has recently acquired fee title to the Site and improvements thereon.
The Site is more particularly described on Attachment 1, which is attached hereto and
incorporated herein by this reference.
E. Subject to and as provided by this Agreement, the parties contemplate that
(i) Developer will rehabilitate the Site so that it may be operated with Chevrolet and Cadillac
motorcar automobile dealerships (the "Project') as further defined herein, and (ii) the Agency
will provide financial assistance towards the costs incurred by Developer to construct the Project.
F. The Community Development Department of the City prepared an Environmental
Impact Report (State Clearinghouse No. 97011055) (the "EIR") under Environmental
Assessment 97-337 for, among other approvals, Specific Plan No. 97-029 (The Centre at La
Quinta Specific Plan), which provided for the development of an 87 acre multi -phased mixed use
project consistent of an auto sale/service mall and retail complex. The City Council certified the
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EIR on July 15, 1997. No subsequent or supplemental EIR is required because the Project is
consistent with, and contemplated by, the EIR, and none of the events listed in Public Resources
Code Section 21166 have occurred.
G. This Agreement and the Developer's development of the Project are in the vital
and best interest of the City and the Agency and the health, safety, morals and welfare of its
residents, and in accord with the goals, objectives and public purposes and provisions of
applicable state and local laws and requirements under which the redevelopment of Project
Area 2 has been undertaken.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants and
conditions contained herein, the Agency and the Developer agree as follows:
1. RECITALS INCORPORATED.
The recitals are hereby incorporated by reference into this Agreement and are a material
part of this Agreement.
2. DEVELOPMENT OF THE SITE
2.1 Description of the Project. The Project shall consist of Developer's rehabilitation
of the Site to (a) refurbish, renovate, remodel, and expand the existing dealership facilities for
use as a Chevrolet automobile dealership, (b) construct (1) a new showroom, (2) not less than
nine (9) new service bays, and (3) sales offices for use as a Cadillac automobile dealership, and
(c) relocate the existing Chevrolet and Cadillac automobile dealerships from their current
locations in the City to the Site, all as further described in the Scope of Development attached
hereto and incorporated herein as Attachment 2 (the "Scope of Development"). Developer shall
construct the Project in strict compliance with (i) the terms and conditions of this Agreement,
(ii) the "Project Entitlements" (as that term is defined in Section 2.2 below), (iii) current factory
standards for General Motors, LLC, a Delaware limited liability company ("General Motors"),
automobile dealerships, as determined by the Dealer Development division of General Motors
("General Motors Standards"), (iv) all plans and permits approved by the City and/or Agency
with respect to the Project, and (v) the Schedule of Performance attached hereto and incorporated
herein as Attachment 3. Developer shall thereafter operate the Project as provided in Section 4
below. Developer shall ensure that all designs prepared for the Project shall be (1) in compliance
with General Motors Standards, (2) prepared by an architect and development team that is
recognized by General Motors as having the expertise and ability to prepare and implement plans
that meet General Motors Standards, and (3) approved by General Motors as being compliant
with General Motors Standards.
2.2 Project Entitlements. As a condition precedent to Developer's obligations to
construct the Project under this Agreement, Developer shall obtain from the City all entitlements
necessary for the Project as required in this Agreement, by applicable State law, by City code,
and all other applicable laws, including but not limited to a Site Development Permit (pursuant to
La Quinta Municipal Code sections 9.200 and 9.210.010), any conditional use permit, any
General Plan or zone change, any amendment to The Centre at La Quinta Specific Plan, any
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variance, any vacation of public rights of way, and any approvals or certifications as required by
the California Environmental Quality Act (California Public Resources Code § 21000 et seq.),
the approval of which is subject to the City's legislative discretion (all of the foregoing, the
"Project Entitlements"). Agency staff shall use reasonable efforts to assist the Developer in
coordinating the expeditious processing and consideration of all necessary permits, Project
Entitlements, and approvals. However, the execution of this Agreement does not constitute the
granting of or a commitment to obtain any required permits, Project Entitlements, or approvals
required by the City, nor does such execution obligate the City to incur any expense in assisting
the Developer in the acquisition of permits and Project Entitlements. In the event of a conflict
between General Motors Standards and Project Entitlements, the Project Entitlements shall
control.
2.3 Entitlement Process: Processing. Developer acknowledges that the requirements
set forth in this Article 2, including, without limitation the Developer's construction and
completion of the Project, are material considerations for the participation by the Agency in this
Agreement, and that but for such requirements, the Agency would not have entered into this
Agreement. Developer acknowledges and agrees that in reviewing and approving documents
under this Section 2.3, the Agency is not acting on behalf of the City. Further, Developer
understands that the City shall conduct its typical governmental functions and exercise of its
police powers in its capacity as the jurisdiction responsible for land use and building permit
approvals.
2.3.1 Submittal of Developer's Applications. The Developer shall submit
relevant development applications and supporting documentation, and all other applications
necessary to obtain the Project Entitlements (collectively, the "Developer's Applications").
These submittals shall be provided in the time period designated in the Schedule of Performance.
2.3.2 Defects in Plans. The City and Agency shall not be responsible to the
Developer or to third parties in any way for any defects in the Developer's Applications nor for
any structural or other defects in any work done according to the Developer's Applications, nor
shall the City or Agency be responsible for any delays caused by the review and approval
processes established by this Article 2 or the reviews conducted by the City in the Schedule of
Performance.
2.4 Schedule of Performance. The Developer shall submit or cause to be submitted
all Developer's Applications, shall commence and complete construction of the Project, and shall
satisfy all other obligations and conditions of this Agreement within the times established
therefor in the Schedule of Performance. The Agency's Executive Director is permitted to
modify or extend the Schedule of Performance without further authorization by the Agency
Board provided the following conditions are satisfied: (i) the modification does not extend any
completion time in the Schedule of Performance by more than a total of one hundred eighty
(180) days, (ii) the Executive Director and Developer agree to the modification or extension in a
writing executed by both Developer and the Executive Director, (iii) Developer is not otherwise
in default under this Agreement, and (iv) such modification or extension does not increase the
Agency's obligations or costs under this Agreement.
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2.5 Cost of Construction. Except as provided in Section 3.1 below, all of the cost of
planning, designing, developing and constructing the Project, site preparation and grading shall
be borne solely by the Developer.
2.6 Rights of Access. For purposes of assuring compliance with this Agreement,
representatives of the Agency shall have the right of access to the Site at normal construction
hours during the period of construction and upon reasonable prior notice to Developer, including
but not limited to, the inspection of the work being performed in the construction of the Project.
Agency shall indemnify, defend and hold Developer harmless from any loss, damage, injury,
accident, casualty, liability, claim, cost or expense (including, but not limited to, reasonable
attorneys' fees) of any kind or character to any person or property (collectively, "Claims")
arising from or related to the Agency's inspection of the Project as permitted by this Section 2.6.
Notwithstanding the prior sentence, the Agency shall not be liable for such Claims to the extent
and in the proportion that the same is ultimately determined to be attributable to the negligence
or misconduct of Developer or its agents, representatives, employees, directors, officers or
consultants. This section does not apply to, limit or otherwise restrict or impose conditions on
any inspection or entry right the City has pursuant to State law or the La Quinta Municipal Code.
2.7 Miscellaneous Rules and Regulations Applicable to Development of the Project.
2.7.1 Compliance With Laws and General Motors Standards. Developer shall
carry out the design and construction of the Project in conformity with General Motors
Standards, all applicable laws, including all applicable state labor standards, the City zoning and
development standards, building, plumbing, mechanical and electrical codes, and all other
provisions of the City of La Quinta Municipal Code, and all applicable disabled and handicapped
access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C.
Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section
11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq.
2.7.2 Nondiscrimination in Employment. Developer certifies and agrees that all
persons employed or applying for employment by it (including all contractors and subcontractors
used by Developer) in constructing the Project on the Site (collectively, the "Construction
Personnel") are and will be treated equally without regard to, or because of, race, color, religion,
ancestry, national origin, sex, age, pregnancy, childbirth or related medical condition, medical
condition (cancer related) or physical or mental disability, and in compliance with Title VII of
the Civil Rights Act of 1964, 42 U.S.C. Section 2000, et seq., the Federal Equal Pay Act of 1963,
29 U.S.C. Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C.
Section 621, et seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. Section 1324b,
et seq., 42 U.S.C. Section 1981, the California Fair Employment and Housing Act, Cal.
Government Code Section 12900, et seq., the California Equal Pay Law, Cal. Labor Code
Section 1197.5, Cal. Government Code Section 11135, the Americans with Disabilities Act, 42
U.S.C. Section 12101, et seq., and all other antidiscrimination laws and regulations of the United
States and the State of California as they now exist or may hereafter be amended. Subject to any
privacy rights of the affected individuals, upon the reasonable request by Agency, Developer
shall allow representatives of the Agency access to Construction Personnel records during
regular business hours to verify compliance with these provisions in connection with the Project
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and construction thereof. Any contract or agreement entered by Developer with Construction
Personnel shall specifically incorporate this section and shall include a provision providing
Agency access to the Construction Personnel's records referenced in the prior sentence.
2.7.3 Levies and Attachments on Site. As a condition precedent to the
Agency's obligation to issue a Release of Construction Covenants pursuant to Section 2.8 of this
Agreement, Developer shall remove or have removed any levy or attachment made on the Site or
any part thereof, or assure the satisfaction thereof within a reasonable time. Nothing herein shall
be deemed to prohibit Developer from contesting the validity or amount of any levy or
attachment nor to limit the remedies available to Developer with respect thereto.
2.7.4 Mechanics Liens and Stop Notices. As a condition precedent to the
Agency's obligation to issue a Release of Construction Covenants pursuant to Section 2.8 of this
Agreement or to make any disbursements of the Agency Loan as to a particular Disbursement
Milestones (defined in Section 3.1), Developer shall remove or have removed any mechanics
lien or stop notice made on the Site or any part thereof, or assure the satisfaction thereof as
provided herein. If a claim of a lien or stop notice is given or recorded affecting the Project,
Developer shall within thirty (30) days of such recording or service or within thirty (30) days of
the Agency's demand, whichever last occurs:
(a) pay and discharge the same; or
(b) affect the release thereof by recording and delivering to the
Agency a surety bond in sufficient form and amount; or
(c) provide the Agency with other assurance which the Agency deems,
in its reasonable discretion (including, without limit, Conditional Waiver and Release Upon
Progress Payment (Cal. Civ. Code Section 3252(d)(1) or Unconditional Waiver and Release
Upon Progress Payment (Cal. Civ. Code Section 3262(d)(1)) or Unconditional Waiver and
Release Upon Final Payment (Cal. Civ. Code Section 3262(d)(4)), to be satisfactory for the
payment of such lien or stop notice.
2.7.5 Prevailing Wages. The Developer acknowledges and agrees that the
provision of the "Agency Loan" (as that term is defined in Section 3.1 below) constitutes
financial assistance that will cause the Project to be a "public work" as defined in Labor Code
Section 1720(a) or (b) and thus require Developer to comply with California's prevailing wage
laws because the Project may be "paid for in whole or in part out of public funds," within the
meaning of Labor Code Section 1720(a) or (b). Nothing in this Agreement constitutes a
representation or warranty by the Agency that the construction of the Project is not subject to
Chapter 1 of Part 7 of the California Labor Code (connecting with section 1720), and all
applicable statutory regulatory provisions related thereto, and the Developer expressly waives
any right of reimbursement for any "increased costs" under California Labor Code Section 1781
or otherwise with respect to the Project or Site. Further, the Developer agrees that the Agency
has not previously affirmatively represented or guaranteed to Developer, or its contractor(s) for
the construction or development of the Project, in writing or otherwise, in a call for bids or
otherwise, that the work to be covered by this Agreement is not a "public work," as defined in
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Section 1720 of the Labor Code. Developer shall indemnify, protect, defend and hold harmless
Agency, City, and their respective officers, employees, contractors and agents, with counsel
reasonably acceptable to the Agency and City, from and against any and all loss, liability,
damage, claim, cost, expense and/or "increased costs" (including reasonable attorneys fees, court
and litigation costs, and fees of expert witnesses) which, in connection with the development, or
construction (as defined by applicable law) of the Project, including, without limitation, any and
all public works (as defined by applicable law), results or arises in any way from any of the
following: (1) the noncompliance by Developer with respect to any applicable local, state and/or
federal law, including, without limitation, any applicable federal and/or state labor laws
(including, without limitation, if applicable, the requirement to pay state prevailing wages); (2)
the implementation of Senate Bill 966 of 2003; (3) the implementation of Section 1781 of the
Labor Code, as the same may be amended from time to time, or any other similar law; and/or (4)
failure by Developer to provide any required disclosure or identification as required by Labor
Code Section 1781, as the same may be amended from time to time, or any other similar law. It
is agreed by the parties that, in connection with the development and construction (as defined by
applicable law) of the Project, Developer shall bear all risks of payment or non-payment of
prevailing wages under California law and/or the implementation of Senate Bill 966 and/or
Labor Code Section 1781, as the same may be amended from time to time, and/or any other
similar law. "Increased costs," as used in this Section 2.7.5, shall have the meaning ascribed to it
in Labor Code Section 1781, as the same may be amended from time to time.
2.7.6 Insurance. The Developer shall maintain insurance as provided by
Section 6 of this Agreement.
2.8 Release of Construction Covenants.
2.8.1 Promptly after completion of construction of the Project in conformity
with this Agreement, the Agency shall promptly deliver to the Developer a Release of
Construction Covenants, executed and acknowledged by the Agency substantially in the form
provided on Attachment 4, which is attached hereto and incorporated herein by this reference.
The Release of Construction Covenants shall be a conclusive determination of satisfactory
completion of the construction of the Project, and the Release of Construction Covenants shall so
state. Following the issuance of a Release of Construction Covenants, any party then owning or
thereafter purchasing, leasing or otherwise acquiring any interest in the Site shall not (because of
such ownership, purchase, lease or acquisition) incur any obligation or liability under this
Agreement with respect to development of the Site or construction of the Project; however, any
such party shall be subject to those continuing covenants described in Section 4 of this
Agreement.
2.8.2 If Agency refuses or fails to furnish a Release of Construction Covenants
in accordance with the preceding paragraph, and after written request from the Developer, the
Agency shall, within thirty (30) days after receipt of such written request therefor, provide the
Developer with a written statement of the reasons the Agency refused or failed to furnish the
Release of Construction Covenants. The statement shall also contain the Agency's opinion of
the actions the Developer must take or cause to be taken to obtain the Release of Construction
Covenants. The Release of Construction Covenants shall not constitute evidence of compliance
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with or satisfaction of any obligation of the Developer to any holder of any mortgage, or any
insurer of a mortgage securing money loaned to finance the Project, or any part thereof. The
Release of Construction Covenants is not a notice of completion as referred to in Section 3093 of
the California Civil Code.
3. AGENCY LOAN
3.1 Agency Loan for Rehabilitation Improvements. The Agency shall, subject to the
satisfaction of the conditions precedent identified in Section 3.2, loan to the Developer an
amount up to, but not exceeding, TWO MILLION THREE HUNDRED THOUSAND
DOLLARS ($2,300,000) (the "Agency Loan") for the sole and exclusive purpose of constructing
the Project on the Site. The Agency Loan shall only be used to reimburse Developer for costs
Developer incurs in planning, designing, and constructing the Project (collectively, "Eligible
Project Costs"). Eligible Project Costs shall be allocated into the following three (3) general
categories, in the following not to exceed amounts: (i) costs to prepare design and development
plans, in an amount not to exceed Four Hundred Fifty Thousand Dollars ($450,000)
(collectively, the "Design Costs"); (ii) costs to remodel and rehabilitate the existing facilities, in
an amount not to exceed One Million Two Hundred Thousand Dollars ($1,200,000)
(collectively, the "Rehabilitation Costs"); and (iii) costs to construct the new Cadillac automobile
showroom, in an amount not to exceed Six Hundred Fifty Thousand Dollars ($650,000) (the
"Cadillac Construction Costs"). As of the Effective Date, Developer does not have a detailed
breakdown of the tasks and costs associated with each such task for the foregoing categories.
Within the time set forth in the Schedule of Performance, Developer shall prepare, submit to
Agency's Executive Director, and obtain Agency's Executive Director's approval of, a detailed
list of Developer's proposed Eligible Project Costs for each of the foregoing categories with the
total amount for each such category not to exceed the amounts listed above. In the event
Agency's Executive Director disapproves or conditionally approves Developer's proposed list of
Eligible Project Costs, Developer shall promptly revise said list to address the issues and
concerns raised by the Agency's Executive Director. Upon the Agency Executive Director's
approval thereof, the parties shall insert the approved list of Eligible Project Costs into this
Agreement as Attachment 5, and thereafter such list shall be incorporated in and become a part
of this Agreement. The Agency's Executive Director shall have the authority to approve one or
more shifts of funding between the aforementioned categories, provided that (i) the cumulative
amount shifted into the Design Costs category shall not exceed fifteen percent (15%) of the
original not to exceed amount for that category, as listed above, and (ii) the cumulative amount
shifted into either the Rehabilitation Costs or the Cadillac Construction Costs categories shall not
exceed twenty-five percent (25%) of the original not to exceed amount for the applicable
category, as listed above. Until the Agency Executive Director approves said list, Developer
shall only be entitled to disbursements of the Agency Loan for Design Costs, in the not to exceed
amount listed above for Design Costs. If actual costs for which Developer is entitled to
reimbursement hereunder are less than the amounts set forth in Attachment 5, the Agency Loan
obligation shall be reduced by such difference; however, if actual costs for which Developer is
entitled to reimbursement exceed the estimates in Attachment 5, the Agency Loan obligation
shall nevertheless not exceed $2,300,000.
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3.2 Conditions Precedent to Agency Loan Obligation. Prior to and as a condition
precedent to the Agency's obligation to fund or disburse any portion of the Agency Loan, the
following conditions precedent, which are for the sole and exclusive benefit of the Agency, and
shall be completed to the satisfaction of, or valued by, the Agency.
3.2.1 Developer shall have executed, with signatures notarized, the "Operating
Covenant" (as that term is defined in Section 4 below) and the "Deed of Trust" (as that term is
defined in Section 3.4 below) and the Operating Covenant and Deed of Trust shall have been
recorded against the Site, subject only to (a) matters of record listed in the CLTA Owner's policy
of title insurance issued by Orange Coast Title Company on March 1, 2010, as its Order No. 140-
1129509-66, and (b) that certain Deed of Trust dated March 26, 2010, with Developer as
"Trustor" and Komerstone Guaranty Insurance Company as "Beneficiary," which Deed of Trust
was recorded on April 5, 2010 as Instrument No. 2010-0153994 in the Official Records of the
County of Riverside.
3.2.2 The Developer shall have executed the "Note" (as that term is defined in
Section 3.4 below), and shall have delivered the Note to Agency.
3.2.3 All Project Entitlements shall have been approved by all applicable
government or regulatory entities, and shall be final, and any applicable statute of limitations to
challenge such Project Entitlements shall have passed without the commencement of a challenge
(including a referendum) or, if a timely challenge has been made, such challenge shall be
resolved in a manner that is acceptable to the Agency.
3.2.4 The Developer shall have provided "Evidence of Financing" (as that term
is defined in Section 3.4.1 below) to Agency and Agency shall have approved the same.
3.2.5 Developer shall have provided evidence to Agency that Developer has
procured insurance as required by Section 6.1 hereof.
3.2.6 Developer shall have provided evidence to Agency's Executive Director
that Developer has obtained approval from General Motors for the Project, including
Developer's site plan and all construction plans and drawings.
3.2.7 Developer shall have provided to Agency's Executive Director copies of
Developer's franchise agreements and any other agreement(s) entered into with General Motors
with respect to the Developer's construction of the Project and subsequent operation of Cadillac
and Chevrolet automobile dealerships on the Site (collectively, the "General Motors
Agreements").
3.2.8 Developer shall not be in breach of its obligations under this Agreement,
the Operating Covenant, and/or any of the General Motors Agreements.
3.3 Disbursement of A14ency Loan. Agency shall disburse the Agency Loan to the
Developer in accordance with the provisions of this Section 3.3. All of Developer's requests for
disbursements for Eligible Project Costs shall be made to the Agency in writing and shall be
subject to Agency review and approval prior to disbursement. Each written request for
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disbursement of a portion of the Agency Loan shall include such evidence reasonably required
by the Agency to demonstrate that such Eligible Project Costs have been actually paid
(including, without limitation, invoices, purchase orders, cancelled checks and fully executed
and notarized lien releases, if applicable) and that Developer has satisfied all conditions for
disbursement. Agency shall have fifteen (15) days to review and verify the requested expenses
and documentation, and upon verification that the requested reimbursement is an allowable
Eligible Project Cost, Agency shall make disbursements to the Developer within fifteen (15)
days after receipt of such verification.
3.4 Repayment of Agency. Developer shall repay the Agency Loan in
accordance with the terms of a Promissory Note substantially in the form attached hereto and
incorporated herein as Attachment 6 (the "Note"). Developer's repayment of the Promissory
Note shall be secured by a Deed of Trust with Assignment of Rents and Rider Attached Hereto
substantially in the form attached hereto and incorporated herein as Attachment 7 (the "Deed of
Trust").
3.4.1 Evidence of Financing. Within the time set forth in the Schedule of
Performance and as a condition precedent to the Agency's obligation to disburse any portion of
the Agency Loan, Developer shall submit to the Agency evidence that Developer has obtained
sufficient equity capital and/or has obtained firm and binding commitments for construction
financing which together with equity financing is sufficient to pay for the construction of the
Project in accordance with this Agreement. Such evidence of financing shall include the
following: (a) a copy of a legally binding, firm and enforceable loan commitment(s) obtained by
Developer from one or more Institutional Lenders (defined below) for the mortgage loan or loans
for construction financing for the construction of the Project subject to such lenders' reasonable,
customary and normal conditions and terms, and/or (b) other documentation satisfactory to the
Agency as evidence of other sources of capital sufficient to demonstrate to the Agency that
Developer has adequate funds to cover the difference between the total cost of construction and
completion of the Project, less financing authorized by those loans set forth in (a) above
(collectively "Evidence of Financing"). The Agency shall approve or disapprove such Evidence
of Financing within ten (10) days after receipt of a complete submission. If not approved in
writing, then Developer's request shall be deemed to have been disapproved. If the Agency shall
disapprove or be deemed to disapprove any such Evidence of Financing, then, upon request of
the Developer the Agency shall, within ten (10) days, state the reasons for such disapproval. If
the Agency disapproves of the Evidence of Financing then the Developer shall promptly
endeavor to promptly obtain and submit to the Agency new Evidence of Financing.
As used herein, the term "Institutional Lender" shall mean any of the following
institutions having assets or deposits in the aggregate of not less than One Hundred Million
Dollars ($100,000,000): a California chartered bank; a bank created and operated under and
pursuant to the laws of the United States of America; an "incorporated admitted insurer" (as that
term is used in Section 1100.1 of the California Insurance Code); a "foreign (other state) bank"
(as that term is defined in Section 1700(1) of the California Financial Code); a federal savings
and loan association (Cal. Fin. Code Section 8600); a commercial finance lender (within the
meaning of Sections 2600 et seq. of the California Financial Code); a "foreign (other nation)
bank" provided it is licensed to maintain an office in California, is licensed or otherwise
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authorized by another state to maintain an agency or branch office in that state, or maintains a
federal agency or federal branch in any state (Section 1716 of the California Financial Code); a
bank holding company or a subsidiary of a bank holding company which is not a bank (Section
3707 of the California Financial Code); a trust company, savings and loan association, insurance
company, investment banker; college or university; pension or retirement fund or system, either
governmental or private, or any pension or retirement fund or system of which any of the
foregoing shall be trustee, provided the same be organized under the laws of the United States or
of any state thereof; and a Real Estate Investment Trust, as defined in Section 856 of the Internal
Revenue Code of 1986, as amended, provided such trust is listed on either the American Stock
Exchange or the New York Stock Exchange.
4. OPERATION OF THE PROJECT AND COVENANTS, CONDITIONS AND
RESTRICTIONS APPLICABLE TO THE SITE AFTER COMPLETION OF
CONSTRUCTION OF THE PROJECT
Concurrently with Developer's execution of this Agreement, Developer shall execute and
acknowledge an Operating Covenant substantially in the form attached hereto and incorporated
herein as Attachment 8 (the "Operating Covenant"). The Operating Covenant shall be recorded
within five (5) days after the Effective Date. The Developer's execution of the Operating
Covenant shall be a material component of this Agreement and a condition precedent to all of the
Agency's obligations in this Agreement. The Operating Covenant shall obligate the Developer
to construct the Project and shall obligate the Developer to operate the Project for a minimum
period of ten (10) years, commencing on the date the Agency issues a Release of Construction
Covenants for the Project.
5. DEFAULTS AND REMEDIES
5.1 Default. Subject to the extensions of time set forth in Section 9.2 of this
Agreement, failure by any party to perform any action or adhere to any covenant or
representation or warranty required by this Agreement, including in any of the attachments
hereto, within the time periods provided herein following notice and an opportunity to cure as
described in this Section 5.1, constitutes a "Default" under this Agreement. Additionally, a
default under the General Motors Agreements shall constitute a "Default" under this Agreement.
The breach or falsity of any representation or warranty by a party as set forth in this Agreement
also constitutes a "Default" under this Agreement following notice and an opportunity to cure as
described hereafter. A party claiming a Default shall give written notice of Default to the other
party specifying the Default complained of. Except as otherwise expressly provided in this
Agreement, the claimant shall not institute any proceeding against any other party, and the other
party shall not be in Default as to non -monetary Defaults if such party within thirty (30) days
from receipt of such notice promptly, with due diligence, commences to cure, correct or remedy
such failure or delay and thereafter completes such cure, correction or remedy with due
diligence. As to monetary Defaults, a cure period of ten (10) days upon written notice shall
apply.
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Notwithstanding anything to the contrary in this Agreement, no notice of Default shall be
necessary nor shall the Developer have a right to cure a Default resulting from a Transfer, as that
term is defined below, that has not been approved by the Agency.
5.2 Institution of Legal Actions; Remedies. In addition to any other rights or
remedies and subject to the restrictions otherwise set forth in this Agreement, either party may
institute an action at law or equity to seek specific performance of the terms of this Agreement,
or to cure, correct or remedy any Default, or to obtain any other remedy consistent with the
purpose of this Agreement. Agency shall also have the right to pursue damages for Developer's
defaults, but in no event shall Developer be entitled to damages of any kind from Agency,
including, without limitation, damages for economic loss, lost profits, or any other economic or
consequential damages of any kind. Such legal actions must be instituted in the Superior Court
of the County of Riverside, State of California, or in the Federal District Court in the Central
District of California.
5.3 Acceptance of Service of Process. In the event that any legal action is
commenced by the Developer against the Agency, service of process on the Agency shall be
made by personal service upon the Executive Director of the Agency in addition to such other
manner as may be provided by law. In the event that any legal action is commenced by the
Agency against the Developer, service of process on the Developer shall be made by personal
service upon any officer or director of Developer, whether made within or outside the State of
California, or in such other manner as may be provided by law.
5.4 Rights and Remedies Are Cumulative. Except as otherwise expressly stated in
this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either
party of one or more of such rights or remedies shall not preclude the exercise by it, at the same
or different times, of any other rights or remedies for the same Default or any other Default by
the other party.
5.5 Inaction Not a Waiver of Default. Any failures or delays by either party in
asserting any of its rights and remedies as to any Default shall not operate as a waiver of any
Default or of any such rights or remedies, or deprive either such party of its right to institute and
maintain any actions or proceedings which it may deem necessary to protect, assert or enforce
any such rights or remedies.
5.6 No Waiver. A waiver by either party of a breach of any of the covenants,
conditions or agreements under this Agreement to be performed by the other party shall not be
construed as a waiver of any succeeding breach of the same or other covenants, agreements,
restrictions or conditions of this Agreement.
5.7 Applicable Law. The internal laws of the State of California shall govern the
interpretation and enforcement of this Agreement, without regard to conflict of law principles.
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6. INSURANCE REQUIREMENTS• REPAIR AND RESTORATION OF PROJECT
6.1 Insurance Requirements.
6.1.1 Commencing on the Effective Date and continuing throughout the term of
the Operating Covenant, the Developer shall procure and maintain, at its sole cost and expense,
in a form and content satisfactory to the Agency's Executive Director, the following policies of
insurance:
(a) Commercial General Liability Insurance covering bodily injury,
property damage, personal injury and advertising injury written on a per -occurrence and not a
claims -made basis containing the following minimum limits: (i) general aggregate limit of Three
Million Dollars ($3,000,000.00); (ii) products -completed operations aggregate limit of Three
Million Dollars ($3,000,000.00); (iii) personal and advertising injury limit of One Million
Dollars ($1,000,000.00); and (iv) each occurrence limit of One Million Dollars ($1,000,000.00).
Said policy shall include the following coverages: (i) blanket contractual liability (specifically
covering the indemnification clause contained in Section 8 below); (ii) products and completed
operations; (iii) independent contractors; (iv) Owner's broad form property damage; (v)
severability of interest; (vi) cross liability; and (vii) property damage liability arising out of the
so-called "XCU" hazards (explosion, collapse and underground hazards). The policy shall not
have a deductible in excess of Ten Thousand Dollars ($10,000.00). The policy shall be endorsed
to have the general aggregate apply to this Project only.
(b) A policy of worker's compensation insurance in such amount as
will fully comply with the laws of the State of California and which shall indemnify, insure, and
provide legal defense for the Agency and the Developer against any loss, claim or damage
arising from any injuries or occupational diseases occurring to any worker employed by or any
persons retained by the Developer in the course of carrying out the work or services
contemplated in this Agreement, and Employers Liability Insurance in an amount not less than
One Million Dollars ($1,000,000) combined single limit for all damages arising from each
accident or occupational disease.
(c) A policy of comprehensive automobile liability insurance written
on a per -occurrence basis in an amount not less than Three Million Dollars ($3,000,000.00)
combined single limit with a deductible not in excess of Ten Thousand Dollars ($10,000.00)
covering all owned, non -owned, leased and hired vehicles used in connection with the Work.
(d) With respect to the improvements and any fixtures and furnishings
to be owned by Developer on the Site, insurance against fire, extended coverage, vandalism, and
malicious mischief, and such other additional perils, hazards, and risks as now are or may be
included in the standard "all risk" form in general use in Riverside County, California, with the
standard form fire insurance coverage in an amount equal to full actual replacement cost thereof,
as the same may change from time to time. The above insurance policy or policies shall include
coverage for earthquakes to the extent generally and commercially available at commercially
reasonable rates, if such insurance is generally obtained for automobile dealerships in the
counties of Los Angeles, Orange County, Riverside, and San Bernardino. Agency shall be a loss
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payee under such policy or policies and such insurance shall contain a replacement cost
endorsement.
6.1.2 Commencing on the Effective Date and continuing until the Agency issues
a Release of Construction Covenants for the Project, the Developer shall procure and maintain, at
its sole cost and expense, in a form and content satisfactory to the Agency's Executive Director,
Builder's Risk (course of construction) insurance coverage in an amount equal to the full cost of
the hard construction costs of the Project. Such insurance shall cover, at a minimum: all work,
materials, and equipment to be incorporated into the Project; the Project during construction; the
completed Project until such time as the City issues a final certificate of occupancy for the
Project, and storage and transportation risks. Such insurance shall protect/insure the interests of
Developer/owner and all of Developer's contractor(s), and subcontractors, as each of their
interests may appear. If such insurance includes an exclusion for "design error," such exclusion
shall only be for the object or portion which failed. Agency shall be a loss payee under such
policy or policies and such insurance shall contain a replacement cost endorsement
6.1.3 Developer shall cause any general contractor with whom it has contracted
for the performance of work on the Site to secure, prior to commencing any activities hereunder
and maintain insurance that satisfies all of the requirements of this Section 6.1.
6.1.4 The following additional requirements shall apply to all of the above
policies of insurance:
(a) All of the above policies of insurance shall be primary insurance
and, except the Worker's Compensation and Employer Liability insurance, shall name the
Agency, City and their respective officers, officials, members, employees, agents, and
representatives (collectively, "Agency and City and Agency and City Personnel") as additional
insureds on an ISO Form CG 20:10 (current version) or substantially similar form and not an
ISO Form CG 20:09. The insurer shall waive all rights of subrogation and contribution it may
have against Agency and City and Agency and City Personnel and their respective insurers. All
of said policies of insurance shall provide that said insurance may not be amended or cancelled
without providing thirty (30) days' prior written notice to the Agency. In the event any of said
policies of insurance are cancelled, the Developer shall, prior to the cancellation date, submit
new evidence of insurance in conformance with this Section to the Executive Director. Not later
than the Effective, the Developer shall provide the Executive Director with Certificates of
Insurance or appropriate insurance binders evidencing the above insurance coverages and said
Certificates of Insurance or binders shall be subject to the reasonable approval of the Executive
Director.
(b) The policies of insurance required by this Agreement shall be
satisfactory only if issued by companies of recognized good standing authorized to do business
in California, rated "A+" or better in the most recent edition of Best Rating Guide, The Key
Rating Guide or in the Federal Register, and only if they are of a financial category Class VII or
better, unless such requirements are waived by the Risk Manager of the City ("Risk Manager")
due to unique circumstances.
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(c) The Executive Director, with the consent of the City's Risk
Manager, is hereby authorized to reduce or otherwise modify Developer's insurance
requirements set forth herein in the event they collectively determine, in their sole and absolute
discretion, that such reduction or modification is consistent with reasonable commercial
practices.
6.1.5 The Developer agrees that the provisions of this Section shall not be
construed as limiting in any way the Agency's right to indemnification or the extent to which the
Developer may be held responsible for the payment of damages to any persons or property
resulting from the Developer's activities or the activities of any person or persons for which the
Developer is otherwise responsible.
6.2 Remedies for Defaults Re: Insurance. In addition to any other remedies the
Agency may have if Developer commits a Default hereunder by failing to provide or maintain
any insurance policies or policy endorsements to the extent and within the time herein required,
the Agency may at its sole option obtain such insurance and deduct the amount of the premium
for such insurance from any sums due to Developer by the Agency from the Agency Loan.
Exercise of such remedy, however, is an alternative to other remedies the Agency may have and
is not the exclusive remedy for Developer's failure to maintain insurance or secure appropriate
endorsements.
6.3 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance.
If the Project shall be totally or partially destroyed or rendered uninhabitable by fire or other
casualty required to be insured against by Developer, Developer shall promptly proceed to obtain
all available insurance proceeds and take all steps necessary to begin reconstruction and,
immediately upon receipt of insurance proceeds, to promptly and diligently commence the repair
or replacement of the Project to substantially the same condition as they existed prior to the
casualty and Developer shall complete or cause to be completed the same as soon as possible
thereafter so that the Project can be operated in accordance with this Agreement. The Agency
shall cooperate with Developer, at no expense to the Agency, in obtaining any governmental
permits required for the repair, replacement, or restoration.
7. TRANSFER RESTRICTIONS
7.1 Prohibition. The qualifications and identity of Developer are of particular
concern to the Agency. It is because of these qualifications and identity that the Agency has
entered into this Agreement with the Developer. Accordingly, commencing upon the Effective
Date and continuing throughout the term of the Operating Covenant: (i) no voluntary or
involuntary successor in interest of the Developer shall acquire any rights or powers under this
Agreement, (ii) the Developer shall not make any total or partial sale, transfer, conveyance,
assignment, subdivision, further encumbrance, refinancing, or lease of the whole or any part of
the Site or the Project thereon, (iii) no changes shall occur with respect to the ownership and/or
control of Developer or GL CCC, LLC, a Delaware limited liability company ("GL CCC"),
including, without limitation, stock transfers, sales of issuances, or transfers, sales or issuances of
membership or ownership interests, or statutory conversions (with each the actions in clauses in
clauses (i), (ii), and (iii) above referred to herein as a "Transfer"), without the prior written
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approval of the Agency, which approval shall not be unreasonably withheld or delayed. Any
purported Transfer, voluntarily or by operation of law, except with the prior written consent of
the Agency, shall be null and void and shall confer no rights whatsoever upon any purported
assignee or transferee.
7.2 Permitted Transfers. Notwithstanding any other provision of this Agreement to
the contrary, the Agency's approval of a Transfer shall not be required in connection with any of
the following:
(a) Any Transfer by the Developer or GL CCC to a "Related Person or
Entity" (as defined below).
(b) A Transfer consisting of the conveyance or dedication of any
portion of the Site to the City or other appropriate governmental agency, including public
utilities, where the granting of such easements permits or facilitates the development of the Site
and the Project.
(c) Any Transfer for (i) financing purposes to the holder of a
mortgage; (ii) any refinancing or permanent financing of the mortgage; (iii) any Transfer to any
person or entity pursuant to foreclosure or deed in lieu of foreclosure of any such mortgage
referred to in clauses (i) or (ii).
In the event of a Transfer by Developer not requiring the Agency's prior approval,
Developer nevertheless agrees that at least thirty (30) days prior to such Transfer, Developer
shall give written notice to the Agency of such Transfer. In the case of a Transfer pursuant to
subparagraph (a) above, Developer agrees that at least thirty (30) days prior to such Transfer it
shall provide satisfactory evidence that the transferee has assumed or upon the effective date of
transfer will assume in writing through an assignment and assumption agreement, in form
reasonably acceptable to the Agency, all of the obligations of the Developer under this
Agreement which remain unperformed as of such Transfer or which arise from and after the date
of Transfer.
As used in this Agreement, a "Related Person or Entity" shall mean an entity in which
Developer, or an entity in which Garff Enterprises, Inc., John Garff, or a majority of Garff
Enterprises, Inc.'s shareholders, own a greater than fifty percent (50%) ownership and
management interest, has a greater than fifty percent (50%) ownership and management interest;
provided, however, that in the event of a Transfer by GL CCC, such Related Person or Entity
shall demonstrate that such person or entity has been approved in writing by General Motors to
operate the Project thereon.
7.3 Agency Consideration of Proposed Transfer• Release of Transferor Upon
Permitted or Approved Transfer. If the Developer desires to cause a Transfer of any of its
interests in this Agreement or the Site and such Transfer requires the Agency's approval under
Section 7.1, Developer shall request in writing to the Agency that it consent to such Transfer,
which consent shall not be unreasonably delayed or withheld. A Transfer shall be conditioned
upon: (i) the proposed assignee expressly assuming, in writing, the unexecuted obligations
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hereunder of the transferor/assignor, as applicable, as to times following the effective date of the
assignment and (ii) the proposed assignee demonstrating to the reasonable satisfaction of the
Agency that such person or entity has adequate financial capacity to complete the development
and/or operation of the Project on the Site and that such person or entity has been approved in
writing by General Motors to operate the Project thereon.
Notwithstanding any other provision set forth in this Agreement to the contrary, upon the
effective date of a permitted or approved Transfer, and provided that the transferor/assignor shall
have delivered to the Agency an executed assignment and assumption agreement in form
reasonably acceptable to Agency legal counsel, the transferor/assignor shall be released from all
further liabilities and obligations hereunder and the Operating Covenant that have been so
transferred and assigned.
7.4 Successors and Assigns. All of the terms, covenants and conditions of this
Agreement shall run with the Site and be binding upon the Developer and the Agency and their
permitted successors and assigns. Whenever the term "Developer" or "Agency" is used in this
Agreement, such term shall include any other permitted successors and assigns.
7.5 Subordination. The Agency acknowledges and agrees that the Agency's Deed of
Trust is and shall be subject and subordinate to the Komerstone Deed of Trust and to all
renewals, modifications, consolidations, replacements, and extensions thereof, provided the
maximum cumulative principal amount of the loan secured by any such renewal, modification,
consolidation, replacement, or extension, when added to the outstanding principal balance due
under the Agency Note, shall not exceed ninety percent (90%) of the lender's appraised value of
the Site upon completion of the Project, which amount shall be verified in writing to Agency
Executive Director's reasonable satisfaction. In addition, notwithstanding anything in this
Agreement to the contrary, Agency agrees to subordinate the Agency's Deed of Trust to any
subsequent deed of trust recorded against the Site relating to any take-out or permanent financing
or refinancing thereof obtained by Developer, provided the maximum cumulative principal
amount of the loan secured by any such take-out or permanent financing, when added to the
outstanding principal balance due under the Agency Note, shall not exceed ninety percent (90%)
of the lender's appraised value of the Site.
8. INDEMNIFICATION OF AGENCY
The Developer shall indemnify, defend, and hold harmless the Agency and City and
Agency and City Personnel from and against any and all claims, liabilities, damages, and losses,
including without limitation reasonable attorneys' fees and litigation expenses, including court
courts and expert witness fees (collectively, "Claims"), due to the death or personal injury of any
person, or physical damage to any person's real or personal property, caused by the construction
of improvements by, or construction -related activities of, the Developer on the Site, or for any
construction defects in any improvements constructed by the Developer on the Site, or the
approval or operation of the Project on the Site; provided, however, that the foregoing
indemnification shall not apply to the extent such Claims are caused by the negligence or willful
misconduct of the Agency or City, subject to any immunities which may apply to the Agency or
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City with respect to such Claims. The foregoing indemnification provision shall survive the
termination of this Agreement.
9. GENERAL PROVISIONS
9.1 Notices. All notices under this Agreement shall be effective (i) upon personal
delivery, (ii) upon delivery by reputable overnight courier that provides a receipt with the date
and time of delivery, (iii) via facsimile, so long as the sender receives confirmation of successful
transmission from the sending machine, or (iv) three (3) business days after deposit in the United
States mail, registered or certified, postage fully prepaid, and addressed to the respective parties
as set forth below or as to such other address as the parties may from time to time designate in
writing:
To Agency: Notices Delivered by U.S. Mail:
La Quinta Redevelopment Agency
P.O. Box 1504
La Quinta, CA 92247
Phone No.: 760-777-7031
Facsimile No.: 760-777-7101
Attention: Executive Director
Notices Delivered Personallv or by Courier:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, California 92253
Phone No.: 760-777-7031
Facsimile No.: 760-777-7101
Attention: Executive Director
With a copy to: Rutan & Tucker, LLP
611 Anton, Suite 1400
Costa Mesa, CA 92626
Phone No.: 714-641-5100
Facsimile No.: 714-546-9035
Attention: M. Katherine Jenson, Esq.
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To Developer: Garff Properties -La Quinta, LLC
405 South Main Street, Suite 1200
Salt Lake City, UT 84111
Phone No.: 801-257-3402
Facsimile No.: 801-257-3460
Attention: John Garff
Garff Enterprises, Inc.
405 South Main Street, Suite 1100
Salt Lake City, UT 84111
Phone No.: 801-257-3412
Facsimile No.: 801-257-3400
Attention: Tony Kraatz
With a copy to: Garff Enterprises, Inc.
405 South Main Street, Suite 1200
Salt Lake City, UT 84111
Phone No.: 801-257-3468
Facsimile No.: 801-428-1968
Attention: Michael D. Creer, Esq.
9.2 Enforced Delay; Extension of Times of Performance. In addition to specific
provisions of this Agreement, performance by any party hereunder shall not be deemed to be in
Default, and all performance and other dates specified in this Agreement shall be extended,
where delays or Defaults are due to: war; insurrection; strikes; lockouts; riots; floods;
earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine
restrictions; freight embargoes; lack of transportation; governmental restrictions or priority;
litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays
of any contractor, subcontractor or supplier; acts or omissions of the other party; or acts or
failures to act of the City or Agency or any other public or governmental agency or entity.
Notwithstanding anything to the contrary in this Agreement, an extension of time for any such
cause shall be for the period of the enforced delay and shall commence to rum from the time of
the commencement of the cause, if notice by the party claiming such extension is sent to the
other party within ten (10) days of the commencement of the cause. Subject to the second
sentence of Section 2.4, times of performance under this Agreement may also be extended in
writing by the mutual agreement of the Agency and Developer. Notwithstanding any provision
of this Agreement to the contrary, the lack of funding or difficulty obtaining financing to
complete the Project shall not constitute grounds of enforced delay pursuant to this Section 9.2.
9.3 Non -Liability of Officials and Employees of Agency to the Developer.
No member, official, director, officer, agent, or employee of Agency shall be personally liable to
the Developer, or any successor in interest of the Developer, in the event of any Default or
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breach by Agency or for any amount which may become due to the Developer or Developer's
successors, or on any obligations under the terms of this Agreement.
9.4 Relationship Between Agency and Developer. It is hereby acknowledged that the
relationship between the Agency and Developer is not that of a partnership or joint venture and
that the Agency and the Developer shall not be deemed or construed for any purpose to be the
agent of the other.
9.5 Agency Approvals and Actions. The Agency shall maintain the authority to
implement this Agreement on behalf of the Agency through the Agency Executive Director
(or his or her duly authorized representative). The Agency Executive Director shall have the
authority to issue interpretations, waive provisions, and/or enter into certain amendments of this
Agreement on behalf of the Agency so long as such actions do not materially or substantially
change the uses or development permitted on the Site, or add to the costs incurred or to be
incurred by the Agency. All other material and/or substantive interpretations, waivers, or
amendments shall require the consideration, action and written consent of the Agency Board.
9.6 Counterparts. This Agreement may be signed in multiple counterparts which,
when signed by all parties, shall constitute a binding agreement.
9.7 Integration. This Agreement, including the Attachments hereto, contains the
entire understanding between the parties relating to the transaction contemplated by this
Agreement, notwithstanding any previous negotiations or agreements between the parties or their
predecessors in interest with respect to all or any part of the subject matter hereof. All prior or
contemporaneous agreements, understandings, representations and statements, oral or written,
are merged in this Agreement and shall be of no further force or effect. Each party is entering
this Agreement based solely upon the representations set forth herein and upon each party's own
independent investigation of any and all facts such party deems material.
9.8 Attorneys' Fees. In any action between the parties to interpret, enforce, reform,
modify, rescind, or otherwise in connection with any of the terms or provisions of this
Agreement, the prevailing party in the action shall be entitled to its reasonable costs and
expenses including, without limitation, litigation costs and reasonable attorneys' fees.
9.9 Titles and Captions. Titles and captions are for convenience of reference only and
do not define, describe or limit the scope or the intent of this Agreement or of any of its terms.
Reference to section numbers are to sections in this Agreement, unless expressly stated
otherwise.
9.10 Interpretation. As used in this Agreement, masculine, feminine or neuter gender
and the singular or plural number shall each be deemed to include the others where and when the
context so dictates. The word "including" shall be construed as if followed by the words
"without limitation." This Agreement shall be interpreted as though prepared jointly by both
parties.
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9.11 Modifications. Any alteration, change or modification of or to this Agreement, in
order to become effective, shall be made in writing and in each instance signed on behalf of each
ply.
9.12 Severability. If any term, provision, condition or covenant of this Agreement or
its application to any party or circumstances shall be held, to any extent, invalid or
unenforceable, the remainder of this Agreement, or the application of the term, provision,
condition or covenant to persons or circumstances other than those as to whom or which it is
held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the
fullest extent permitted by law and consistent with the mutual intent of the parties as expressed
herein.
9.13 Computation of Time. The time in which any act is to be done under this
Agreement is computed by excluding the first day, and including the last day, unless the last day
is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall
mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If
any act is to be done by a particular time during a day, that time shall be the applicable time of
day in the Pacific Time Zone.
9.14 Legal Advice. Each party represents and warrants to the other the following: it
has carefully read this Agreement, and in signing this Agreement, it does so with full knowledge
of any right which it may have; it has received independent legal advice from its legal counsel as
to the matters set forth in this Agreement, or has knowingly chosen not to consult legal counsel
as to the matters set forth in this Agreement; and, it has freely signed this Agreement without any
reliance upon any agreement, promise, statement or representation by or on behalf of the other
party, or its agents, employees, or attorneys, except as specifically set forth in this Agreement,
and without duress or coercion, whether economic or otherwise.
9.15 Time of Essence. Time is expressly made of the essence with respect to the
performance by the Agency and Developer of each and every obligation and condition of this
Agreement.
9.16 Conflicts of Interest. No member, official or employee of the Agency shall have
any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or
employee participate in any decision relating to the Agreement which affects his personal
interests or the interests of any corporation, partnership or association in which he is directly or
indirectly interested.
9.17 Third Party Beneficiaries. With the exception of the provisions in Sections 2.7.5,
6.1, 8, 9.19 and 9.20 which benefit, and are enforceable by, the City, there are no intended third
party beneficiaries to this Agreement.
9.18 Corporate Authority. The person(s) executing this Agreement on behalf of each
of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii)
they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so
executing this Agreement such party is formally bound to the provisions of this Agreement, and
182/015610-0057
1102564 05 .07/02/10 'Z�'
(iv) the entering into this Agreement does not violate any provision of any other agreement to
which such party is bound.
9.19 Covenant to Not Cause Violation of Statutes Relating to Relocation of Vehicle
Dealerships. From the Date of Agreement until the Operating Covenant Termination Date (as
defined in the Operating Covenant), Developer shall not take any action that would result in a
violation by the Agency and/or City of California Government Code Section 53084 or Health &
Safety Code Section 33426.7. Developer further agrees to indemnify, defend, and hold harmless
the Agency and City from and against any claims, proceedings, losses, costs, or expenses
incurred as a result of any such violation arising out of actions by Developer.
9.20 Covenant to Not Cause Violation of Statutes Relating to Direct Assistance by
Ate. Developer represents and warrants that it is using the Agency Loan for the sole and
exclusive purpose of causing the construction of the Project and for no other purpose and that the
Agency Loan shall not be used in a manner that would constitute a violation of Health & Safety
Code Section 33426.5. Developer further agrees to indemnify, defend, and hold harmless the
Agency and City from and against any claims, proceedings, losses, costs, or expenses incurred as
a result of any such violation arising out of actions by Developer.
9.21 General Motors Consent. Developer shall provide written evidence from General
Motors that General Motors has approved the Site for the operation of Chevrolet and Cadillac
franchises.
[Remainder of Page Left Blank; Signatures on Following Page]
882/015610-0057
1102564.05 a07/02/10 -21-
IN WITNESS WHEREOF, Agency and Developer each hereby represents that it has read
this Agreement, understands it, and hereby executes this Agreement to be effective as of the day
and year first written above.
"Developer"
GARFF PROPERTIES -LA QUINTA, LLC,
a Utah limited liability company
2010 By:
Its: a.�•
Date: — 12010
APPROVED AS TO FORM:
RUTAN & T CI R, LI P
gency Counsel
"Agency"
LA QUINTA REDEVELOPMENT
AGENCY, a public body, corpo ate and
PB
Executive Director
882/015610-0057
1102564 05 a07/02/10 -22-
ATTACHMENT "1"
LEGAL DESCRIPTION OF SITE
PARCEL 3 OF PARCEL MAP 28525-1, AS SHOWN BY MAP ON FILE IN
BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA.
ASSESSOR'S PARCEL NUMBER 600-020-014.
882/015610-0057
1102564,05 a07/02110 ATTACHMENT 1
ATTACHMENT "2"
SCOPE OF DEVELOPMENT
The Project shall consist of Developer obtaining approval from General Motors to move
and operate, and thereafter moving and operating, Chevrolet and Cadillac franchises on the Site.
The Project shall include the following construction and related tasks:
a. Increase the existing service facility on the Site from the current 12 service bays
to no less than 21 bays.
b. Increase the parts department in size from the current 1850 square feet to
approximately 3750 square feet.
C. Add an additional, approximatelyl500 square feet to the existing showroom,
which will then be used as the Chevrolet showroom.
d. Construct a separate, new exclusive Cadillac showroom containing approximately
3400 square feet.
e. Construct a separate, new service drive exclusive for Cadillac customers that
contains approximately 1200 square feet.
882/01561M057
1102564,05 a07/02/10 ATTACHMENT 2
ATTACHMENT "3"
SCHEDULE OF PERFORMANCE
Item of Performance
Time for Completion
1.
Developer's execution and acknowledgement
Concurrently with Developer's execution of
of the Operating Covenant.
Agreement.
2.
Agency recordation of the Operating
Within five (5) days after Effective Date.
Covenant.
3.
Developer's preparation and submission of
During the week of July 12-16, 2010.
Developer Applications, including a complete
application for a Site Development Permit
(SDPA), which shall include:
• Detailed Site Plans
• Revised Site Plans
• Lighting Plans (photometric)
• "Conceptual" Landscaping Plans
• Preliminary Grading Plans
• "Conceptual" Floor Plans
• "Conceptual" Elevations
4.
Review of Developer Applications by
Agency will use reasonable efforts to cause such
applicable City departments and provision of
review, and to obtain and provide to Developer
any comments to Developer.
any comments, during the week of July 19-23,
2010.
5.
Developer to revise and resubmit (as
During the week of July 30-August 3, 2010.
necessary to address City comments)
Developer Applications.
6.
Re -review of Developer Applications by
During the period of August 2-6, 2010.
applicable City departments and preparation
of conditions of approval.
7.
Architectural and Landscape Review
Agency will use reasonable efforts to cause such
Committee to review Developer Applications
review and comment, and shall use reasonable
and provide any comment; Agency prepares
efforts to cause City to prepare such report, during
staff report.
the period of August 2-6, 2010.
8.
Planning Commission hearing and
During the week of August 23-27, 2010.
consideration of Developer Applications.
9.
Developer's submission of application for
During the week of August 23-27, 2010.
building permits.
10.
Plan check review by applicable City
Agency will use reasonable efforts to cause such
departments and preparation of any
review, and to obtain and provide to Developer
corrections to Developer.
any corrections, during the period September I-
I
13, 2010.
ss2iou6io-oon ATTACHMENT 3
1102564,05 a07/02/10 "1-
Item of Performance
Time for Completion
11.
Developer to correct and resubmit (as
During the period September 13-27, 2010.
necessary to address City comments) plans.
12.
Developer to submit to Agency proposed list
No later than September 1, 2010.
of Eligible Project Costs
13.
Review of Developer's proposed list of
Within 10 days after Agency's receipt.
Eligible Project Costs by Agency
14.
Developer to revise and resubmit (if
Within 10 days after receipt of Agency comments.
necessary) and obtain Agency approval of list
of Eligible Project Costs
15.
Plan check re -review by applicable City
Agency will use reasonable efforts to cause such
departments; Developer obtains issuance of
re -review and the issuance of building permits (if
building permits (if Developer entitled to
Developer is entitled to issuance) during the
issuance).
period September 15-27, 2010.
16.
Developer performs demolition portion of
During the period of September 15—October 1,
Project.
2010.
17.
Developer constructs Project.
During the period of September 15, 2010—January
14, 2011.
18.
Developer obtains certificate of occupancy for
During the week of January 17-21, 2011.
Project.
This Schedule of Performance represents the parties' target dates. However, subject to Section
2.4 of the Agreement, this Schedule of Performance may be adjusted by the Agency Executive
Director so long as Developer moves the Project forward and obtains a certificate of occupancy
for the Project by no later than twelve (12) months from the Effective Date. This Schedule of
Performance does not include the time of performance for all obligations arising under the
Agreement; rather this schedule focuses only on the development schedule of the Project. The
parties are referred to the Agreement for the total description of the parties' obligations and times
for performance of matters not identified in this Schedule. The Developer understands that
obligations contained in the Agreement may be conditions precedent to the Agency's obligations
under this schedule.
Nothing herein shall be construed to limit the City's legislative authority, which City may
exercise, in City's sole and absolute discretion. In all cases where City action is required,
Agency shall use reasonable efforts to cause City to take such action in the time prescribed
herein.
1
82i015610-0057 ATTACHMENT 3
1102564 05 a07/02/10 -2-
ATTACHMENT "4"
RELEASE OF CONSTRUCTION COVENANTS
[See Following Document]
882/015610-0057
1102564 05 a07/02/10 ATTACHMENT 4
DOC p 2011-0497472
- uieeizau
Customer Co?Z Labe!
The ppaper to which is label is
affixed has not been Compared
with the recorded document
RECORDING REQUESTED BY AND Larry W Ward
Wl N RECORDED MAIL TO: Assessor'nCounty Riverside
GarffErftrprises, Inc.
405 South Main Street, Ste.1200
Salt Labe City, UT 84111
Attention: Mr. John Gaff
Rw Ace:fir aemx4acMdoamimtitcxmptSmarpgmmSof&==dinZfm
pwwjmd to oovaommt Code sedioe 27383.
RELEASE OF CONSTRUCTION COVENANTS
This RELEASE OF CONSTRUCTION COVENANTS (the "Release') is made by the
LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic. (the
"Agency"), in . favor of GARFF PROPERTIES -LA QUINTA, LLC, a Utah limited liability
company (the "Developer'), as of the date set forth below.
MEALS
A. The Agency and Developer have entered into that certain Owner Participation
Agreemcut (the "OPA") datedZillu a 2010 concerning the redevelopment of certain real
property situated in the City of La Olinta, California, as more fully described "in Exhibit "A"
attached hereto and made a part hereof (the "Site" 1.
B. As referenced in Section 2.8 of the OPA, the Agency is authorized and required to
furnish the Developer or its successors with a Release of Constriction Covenants upon
completion of constriction of the "Project" (as defined in the OPA}, which Release is required to
be in such form as to permit it to be recorded in the Recorder's office of Riverside County. This
Release is conclusive deteanination of satisfactory completion of the construction and //
development oftitei?roject+�terL wa.5 no prior- doWm2»i`✓CCc+Lrt'c(.
C. The Agency has conclusively determined that construction and development of
the Project has been satisfactorily completed
NOW, TBEREFORE, the Agency hereby certifies as follows:
1. The Project to be constructed by the Developer has been satisfactorily completed
in accordance with the provisions of said OPA.
2: This Release of Construction Covenants shall not constitute evidence of
compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage or
any insim of a mortgage, securing money loaned to finance the Project or, any part thereof
3. Ibis Release of Construction Covenants is the release of construction covenants
referred to in, and satisfies the tequitements of, Section 2.8 of the OPA for construction of the
Project .
1i0736a.Gf,e7AIQ11c ,.,/
4. This Release of Construction Covenants is not a Notice of Completion as referred
to in California Civil Code Section 3093.
5. Except as stated herein, nothing contained in this instrument shall modify in any
way any other provisions of the OPA or any other provisions any other documents executed .
pursuant to, the OPA, all of which shall remain enforceable according to their. terms of the
documents incorporated therein.
BY WITNESS WHEREOF, the Agency and the Developer have signed this Release of
Construction Covenants as of the respective dates set forth below.
"Developer"
"Agency"
LA QUINTA REDEVELOPMENT
AGENCY, a public boddyycoorpora and
By: /
Executive Director
MEMO
I/�iv%�
APPROVED AS TO FORM:
R & TU ER, UP
ge cy
Counsel
8MN156104057
1102561-05907N2Ro -2-
State of California ►
1
County of Riverside 1
On June 14, 2011, before me, SUSAN MAYSELS Notary Public, personally
appeared THOMAS P. GENOVESE who proved to me on the basis of
satisfactory evidence to be the person whose name is subscribed to the
within instrument, and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the
instrument.
I certify under PENALTY OF PERJURY under the laws of the State of
California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal. r""""",- S AN MAY8EL8
Colwmi. p18"479
i NOTARY PUBLIC • CALIFORNIA
x RIVERSIDE COUNTY
Signature CommissionEm iresAPR13,2M
(seal)
DOCUMENT:
RELEASE OF CONSTRUCTION COVENANTS by the RDA in favor of Garff
Properties -La Quinta, LLC pursuant to the Owner participation Agreement
dated July 13, 2010.
-3-
EXHIBIT "A"
LEGAL DESCRIPTION OF SITE
All that property located in the City of La Quinta, County of Riverside, State of
California, described as follows:
PARCEL 3 OF PARCEL MAP 28525-1, AS SHOWN BY MAP ON FILE IN
BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS OF.
RIVERSIDE COUNTY, CALIFORNIA.
ASSESSOR'S PARCEL NUMBER 600-020-014.
WA15610-0057 4-
110256E.05 s07102110
State of California
County of Riverside
On , before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
State of California
County of Riverside
On , before me,
(Seal)
(insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
(Seal)
882/015610-0057
1102564 05 a07/UM -3-
EXHIBIT "A"
LEGAL DESCRIPTION OF SITE
All that property located in the City of La Quinta, County of Riverside, State of
California, described as follows:
PARCEL 3 OF PARCEL MAP 28525-1, AS SHOWN BY MAP ON FILE IN
BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA.
ASSESSOR'S PARCEL NUMBER 600-020-014.
182/015610-0057
1102564.05 a07/02/10 _4_
ATTACHMENT "5"
LIST OF ELIGIBLE COSTS
[To be inserted pursuant to Section 3.1 after Developer submits to Agency's Executive Director
and Agency's Executive Director approves the same]
1821015610-0057 ATTACHMENT 5
1102564,05 a07/02/10
ATTACHMENT "6"
PROMISSORY NOTE
[See Following Document]
182/015610-0057 ATTACHMENT 6
1102564,05 a07/02/10
PROMISSORY NOTE SECURED BY DEED OF TRUST WITH
ASSIGNMENT OF RENTS AND RIDER ATTACHED.HERETO
2010 ("Note Date")
FOR VALUE RECEIVED, the undersigned, GARFF PROPERTIES -LA QUINTA, LLC,
hereinafter referred to as "Borrower," promises to pay to the LA QUINTA REDEVELOPMENT
AGENCY, a public body, corporate and politic, hereinafter referred to as "Agency," so much
principal as may be outstanding in accordance with the terms of this Note, not exceeding TWO
MILLION THREE HUNDRED THOUSAND DOLLARS ($2,300,000), plus accrued interest on
the unpaid principal, plus such other costs, charges, and fees which may be owing from time to
time, all subject to the terms, conditions, and provisions hereinafter set forth.
Reference is made to:
(i) The Redevelopment Plan for Project Area 2, which is incorporated herein by
reference as though fully set forth.
(ii) That certain Owner Participation Agreement by and between Borrower and
Agency, dated on or about July jam, 2010 ("OPA") which sets forth terms and conditions for
Borrower's redevelopment of a site within the Project Area and the City of La Quinta addressed
as 79225 Highway 111, as more particularly described in the legal description attached as
Attachment I to the OPA (the "Site"). The OPA is incorporated herein by reference as though
fully set forth herein.
(iii) That certain Operating Covenant in the form attached to the OPA as Attachment 8
to be executed by and between Agency and Borrower concurrently with the execution hereof and
recorded against the Site (the "Operating Covenant"). The Operating Covenant is incorporated
herein by this reference as though fully set forth herein.
(iv) That certain Deed of Trust With Assignment of Rents and Rider Attached Hereto
in the form attached to the OPA as Attachment 7 to be executed by Borrower concurrently with
the execution hereof and recorded against the Site (the "Deed of Trust"). The Deed of Trust is
incorporated herein by this reference as though fully set forth herein. The Deed of Trust will
secure Borrower's repayment of the "Agency Loan" (as defined in Section 1 below).
1. Principal Amount, Interest Amount. The principal amount of the
Agency's loan to Borrower (the "Agency Loan") is up to TWO MILLION THREE HUNDRED
THOUSAND DOLLARS ($2,300,000) ("Loan Amount"), which Agency shall disburse to
Borrower in accordance with the provisions of Section 3 of the OPA. Interest shall accrue on the
outstanding principal balance at the 1-year LIBOR Rate, adjusted annually, on each June 30 (or,
if June 30 is not a business day, on the first business day thereafter) during the tern hereof.
Interest shall accrue as set forth in Paragraph 4 in the event of a Borrower default.
882/015610-0057
1102564.05 a07/02/10
2. Term of Note. Subject to the provisions of Paragraph 4 herein which
provide for acceleration of the then outstanding principal and accrued interest and immediate
payment thereof in the event of a default by Borrower, the term of this Note shall commence on
the date hereof and continue until the date the Operating Covenant terminates.
3. Repayment. Within one hundred twenty (120) days after the end of each
of the ten (10) fiscal years commencing with the July 1, 2011-June 30, 2012 fiscal year, each of
which fiscal year shall be referred to herein as an "Operating Year," Agency shall forgive first
accrued interest, and then principal, on the Agency Loan, in an amount equal to the "Site Taxes"
(as that term is defined below) generated on the Site during the applicable Operating Year. In
addition, upon expiration or earlier termination of the Operating Covenant, the outstanding
balance owed on the Agency Loan shall be forgiven, and this Note shall be cancelled. As used
herein, the term "Site Taxes" shall mean the sum of (i) the "Sales Taxes From the Site," and (ii)
the "Net Property Tax Increment From the Site" (all as defined below).
a. As used herein, the term "Sales Taxes From the Site" means the
amount equal to the sales and use taxes that are generated from sales occurring on the Site on
which sales or use taxes are imposed pursuant to applicable California law in each Operating
Year which are actually received by the City from the State Board of Equalization. In
connection therewith:
(i) Borrower shall timely report, and shall cause its tenants (if
any) to report, all sales and use taxes from the Site to the State Board of Equalization in
accordance with the laws, rules, and regulations applicable to such reporting.
(ii) Sales Taxes from the Site shall be deemed to have been
paid by the State Board of Equalization to the City if and to the extent the State Board of
Equalization elects to offset the payment of any such Sales Taxes From the Site against any other
obligation of the City.
(iii) Borrower acknowledges that the State Board of
Equalization makes payments to the City based on both actual and anticipated sales and use tax
revenues and that the State Board of Equalization makes periodic reconciliations. The
determination of Sales Taxes from the Site for any annual, quarterly, or other period shall be
subject to the timing and reconciliation process related to the processing by the State Board of
Equalization of payments of such Sales Taxes From the Site to the City. Any adjustments
resulting from any interim or estimated determination of Sales Taxes From the Site for any
annual, quarterly, or other period shall be reconciled by the parties as soon as practicable without
inclusion of, or any obligation to pay, interest.
(iv) Sales Taxes From the Site shall be determined based on
actual amounts received by the City based only on the City's share of the State sales and use tax
applicable to the Site (which, as of the Effective Date, is 1% of the taxable amount). Sales Taxes
From the Site shall not include amounts paid to the City by the State Board of Equalization
derived from any sales tax overrides or special tax amounts received by the City, nor shall
include any administrative fees or charges imposed by the State Board of Equalization that
reduce the actual amounts of sales and use taxes received by the City.
182/015610-0057 -2-
1102564.05 a07/02/10
(v) Borrower shall, and shall cause its tenants (if any) to, keep
full and accurate books of account, records, and other pertinent data showing all gross income
earned upon the Site that is reportable for California sales and use tax purposes, including all
documents required to be maintained by the State of California for sales and use tax purposes.
(vi) Borrower shall furnish, and shall cause its tenants (if any)
to famish, to Agency true and correct photocopies of its quarterly California sales and use tax
returns at the time each is filed with the State of California, together with a copy of all checks or
wire transfers or other forms of transfer of funds sent for such payment of sales and use taxes.
b. As used herein, the term "Net Property Tax Increment From the
Site" shall mean "New Gross Property Tax Increment From the Site" (as defined below) less
"Old Gross Property Tax Increment From the Site" (as defined below). As used herein, New
Gross Property Tax Increment From the Site means the amount equal to the property tax
increment pursuant to Health and Safety Code Section 33670(b) that was allocated to, paid to
and received by the Agency by reason of Borrower's ownership of the Site in each Operating
Year. As used herein, "Old Gross Property Tax Increment From the Site" means the amount of
gross tax increment pursuant to Health and Safety Code Section 33670(b) attributable to the Site
that was allocated to, paid to and received by the Agency in the July 1, 2009-June 30, 2010 fiscal
year. Borrower and Agency hereby acknowledge that the assessed value of the Site in the July 1,
2009-June 30, 2010 fiscal year was Four Thousand Five Hundred Eighty -One Thousand Nine
Hundred Thirty -One Dollars ($4,581,931).
In connection therewith, Borrower covenants to pay, prior to delinquency, all real
property taxes and assessments that are levied on or against the Site.
C. Borrower shall have the right to prepay all or any portion of this
Note at any time without penalty.
3. Default; Acceleration; Cross -Default. In the event Borrower is in default
of any of the covenants, terms, or provisions of this Note, the Deed of Trust, the OPA, or the
Operating Covenant, and Borrower fails to timely cure such default under the terms of the
applicable agreement, it being understood and agreed by Borrower that a default of this Note, or
of the Deed of Trust, or of the OPA, or of the Operating Covenant, shall be a default of all of the
foregoing listed documents, then Borrower shall be in default of this Note and the Loan Amount
and all accrued interest thereon (less the amount of Site Taxes generated prior to such time) shall
become immediately due and payable. The rate of interest applicable to periods of default for
the defaults set forth in this Paragraph 4 shall be calculated at the lesser of ten percent (10%) per
annum or the maximum legal rate, and shall accrue as of the date such payment was originally
due.
882/015610-0057 -3-
1 1 02564.05 a07/02/10
4. Additional Terms.
a. All payments shall be first credited to accrued interest, next to
costs, charges, and fees which may be owing from time to time, and then to principal. All
payment shall be made in lawful money of the United States. Payments shall be made to Agency
at the address set forth in Paragraph 7 herein or at such other address as Agency or the holder of
this Note may direct pursuant to notice delivered to Borrower in accordance with Paragraph 7.
b. Borrower agrees to pay the following costs, expenses, and
reasonable attorney's fees paid or incurred by Agency, or adjudged by the court, in the collection
of amounts in default or other costs incurred as a result of a default by Borrower: (i) reasonable
costs of collections, costs and expenses and attorney's fees paid or incurred in connection with
the collection or enforcement of this Note, whether or not suit is filed, and (ii) costs of suit and
such sums as the court may adjudge as attorney's fees in any action to enforce payment of this
Note or any part of it if Agency prevails in such suit.
5. Nonassumability. This Note shall not be assumable without the prior,
express, written consent of Agency's Executive Director, which shall not be unreasonably
withheld or delayed.
6. Presentment, Etc. Notwithstanding any other provision herein to the
contrary, to the extent permitted by law Borrower hereby waives the following: (a) notice of
default or delinquency, (b) notice of acceleration, (c) notice of nonpayment, (d) notice of costs,
expenses and losses and interest thereon, (e) notice of interest on interest and late charges, (f)
diligence in taking any action to collect any sums owing under this Note or in proceeding against
any of the rights and presentment for payment, demand, protest, and notices of dishonor and/or
protest; (g) the benefits of all waivable exemptions; and (h) all defenses and pleas on the grounds
of any extension or extensions of the time of payment or of any due date under this Note, in
whole or in part, whether before or after maturity and with or without notice.
7. Notices. Any notices required by law or this Note shall be given either by
(i) personal service, (ii) delivery by reputable document delivery service such as Federal Express
that provides a receipt showing date and time of delivery, or (iii) mailing in the United States
mail, certified mail, postage prepaid, return receipt requested.
To Agency: Notices Delivered by U.S. Mail:
La Quinta Redevelopment Agency
P.O. Box 1504
La Quinta, CA 92247
Phone No.: 760-777-7031
Facsimile No.: 760-777-7101
Attention: Executive Director
882/015610-0057 -4-
1102564.05 a07/02/10
Notices Delivered Personally or by Courier:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, California 92253
Phone No.: 760-777-7031
Facsimile No.: 760-777-7101
Attention: Executive Director
With a copy to: Rutan & Tucker, LLP
611 Anton, Suite 1400
Costa Mesa, CA 92626
Phone No.: 714-641-5100
Facsimile No.: 714-546-9035
Attention: M. Katherine Jenson, Esq.
To Borrower: Garff Properties -La Quinta, LLC
405 South Main Street, Suite 1200
Salt Lake City, UT 84111
Phone No.: 801-257-3402
Facsimile No.: 801-257-3460
Attention: John Garff
and
Garff Enterprises, Inc.
405 South Main Street, Suite 1100
Salt Lake City, UT 84111
Phone No.: 801-257-3412
Facsimile No.: 801-257-3400
Attention: Tony Kraatz
With a copy to: Garff Enterprises, Inc.
405 South Main Street, Suite 1200
Salt Lake City, UT 84111
Phone No.: 801-257-3468
Facsimile No.: 801-428-1968
Attention: Michael D. Creer, Esq.
Notices personally delivered or delivered by document delivery service shall be deemed effective
upon receipt. Notices mailed shall be deemed effective on the second business day following
deposit in the United States mail. Either party may designate that notices be sent to other or
additional addresses by complying with the requirements of this section.
882/015610-0057
1102564.05 .07/02/10
8. Litigation. This Note shall be governed by and construed under the
internal laws of the State of California without regard to conflicts of law. The parties agree that
in any litigation between the parties arising out of this Note, the Superior Court of the State of
California in and for the County of Riverside shall have exclusive jurisdiction. The prevailing
party in any litigation between the parties arising out of or connected to this Note, in addition to
whatever other relief to which the prevailing parry is entitled, shall also be entitled to reasonable
attorney's fees, including fees and costs for discovery, and any fees and costs for appeal. In the
event of such legal action, service of process on Agency shall be made in such manner as
provided by law for service on a California public entity; service of process on Borrower shall be
made in such manner as may be provided for by law, and shall be valid whether made within or
without the State of California.
9. Waiver. No waiver of any breach, default, or failure of condition under
the terms of this Note, or the obligations secured hereby, shall be implied from any failure of
Agency to take, or any delay by the Agency in taking, action with respect to such breach, default,
or failure from any previous waiver or any similar or unrelated breach, default, or failure; and a
waiver of any term of this Note must be made in writing and shall be limited to the express
written terms of such waiver.
10. Time of Essence. Time is of the essence in this Note.
11. Severability. In the event that any term or provision of this Note is held to
be unenforceable, the remainder of this Note shall remain in full force and effect to the fullest
extent without inclusion of the unenforceable term or provision.
12. Interpretation. In the event of any conflict between this Note and the
OPA, this Note shall apply. The terms of this Note shall be construed in accordance with the
meaning of the language used and shall not be construed for or against either party by reason of
the authorship of this Note or any other rule of construction which might otherwise apply. The
paragraph headings are for purposes of convenience only, and shall not be construed to limit or
extend the meaning of this Note.
13. Security for Note. This Note shall be secured by the Deed of Trust.
14. Assiamnent. Agency, at its option, may assign its right to receive
payment under this Note without obtaining the consent of the Borrower or the holder or
beneficiary of the lien of any deed of trust or other security instrument, whether recorded or
unrecorded. Borrower shall not be permitted to assign or transfer this Note or any portion
thereof without the prior express written consent of the Agency Executive Director, which shall
not be unreasonably withheld or delayed.
[signatures on next page]
892/015610-0057 _6_
1102564.05 a07/02/10
IN WITNESS WHEREOF, Borrower has executed this Note as of the Note Date.
"Borrower"
GARFF PROPERTIES -LA QUINTA, LLC,
a Utah limited liability company
Date: ; J1 2-. 12010 By; �G
Its:
882/015610-0057
1102564.05 a07/02/10
ATTACHMENT "T'
DEED OF TRUST WITH ASSIGNMENT OF RENTS
AND RIDER ATTACHED HERETO
[See Following Document]
182/015610-0057 ATTACHMENT 7
1102564,05 .07/02/10
PLEASE COMPLETE THIS INFORMATION
RECORDING REQUESTED BY:
VERONICA J. MONTECINO, City Clerk
AND WHEN RECORDED MAIL TO:
CITY OF LA QUINTA
Attn: Veronica J. Montecino
P 0 Box 1504
La Quinta, CA 92247
DOC # 2010-0378794
08/12,12010 08:00R Fee:NC
Page 1 of t0
,Recorded in Official Records
County of Riverside
Larry W, Ward
Assessor, County Clerk & Recorder
111I11111111111111111111111111111111111111111111111111
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DEED OF TRUST WITH ASSIGNMENT OF RENTS AND
RIDER ATTACHED HERETO
Title of Document
THIS AREA FOR
RECORDERS
USE ONLY
THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION
(83.00 Additional Recording Fee Applies)
Recording Requested by and
When recorded mail to:
La Quinta Redevelopment Agency
P.O. Box 1504
La Quinta, CA 92247 Ak
Attn: Executive Director
SPACE ABOVE 1H1S LINE PVK KEC:VKUEK S UJE
EXEMPT FROM RECORDING FEE PER GOV. CODE SECTION 27383
DEED OF TRUST WITH ASSIGNMENT OF RENTS AND
RIDER ATTACHED HERETO
NOTE: RIDER ATTACHED TO THIS DEED OF TRUST
This DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED
HERETO ("Deed of Trust"), is made -::nJ 1 , 2010, between GARFF
PROPERTIES -LA QUINTA, LLC, a Utah limited li bility company, herein called TRUSTOR,
whose address is 405 South Main Street, Suite 1200, Salt Lake City, UT 84111,
First American Title Company , a California corporation, herein
called TRUSTEE, whose address is 10535 Foothill Blvd #282 Rancho Cucamonga CA, and
LA QUINTA REDEVELOPMENT AGENCY, 78-495 Calle Tampico, La Quinta, California
92253, a public body, corporate and politic, herein called BENEFICIARY.
WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, Trustor's fee
interest in that property in the City of La Quinta, County of Riverside, State of California,
described as:
PARCEL 3 OF PARCEL MAP 28525-1, AS SHOWN BY MAP ON FILE IN
BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA.
ASSESSOR'S PARCEL NUMBER 600-020-014.
together with the rents, issues and profits thereof, subject, however, to the right, power and
authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents,
issues and profits for the purpose of securing (1) payment of the sum of up to TWO MILLION
THREE HUNDRED THOUSAND DOLLARS ($2,300,000) with interest thereon according to
the terms of a promissory note or notes of even date herewith made by Trustor, payable to order
of Beneficiary, and extensions or renewals thereof; (2) the performance of each agreement of
Trustor incorporated by reference or contained herein; and (3) payment of additional sums and
interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when
evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust.
To protect the security of this Deed of Trust, and with respect to the Property above described,
Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be
882/015610-0057 -1-
1102564.05 OVUM
bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually
agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious
deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18,
1964, in the book and at the page of Official Records in the office of the county recorder of the
county where said property is located, noted below opposite the name of such county, namely:
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
COUNTY
BOOK IPAGE
COUNTY
BOOK I
PAGE
Alameda
1288
556
Kings
858
713
Placer
1028
379
Sierra
38
187
Alpine
3
130-
Lake
437
110
Plumas
166
1307
Siskiyou
506
762
31
Amador
133
438
Lassen
192
367
Riverside
3778
347
Solano
1287
621
Butte
1330
513
Los
T-
874
Sacramento
5039
124
Sonoma
2067
427
Angeles
3878
Calavems
185
338
Madera
911
136
San Benito
300
405
Stanislaus
1970
56
Colusa
323
391
Main
1849
122
San
6213
768
Sutter
655
585
Bernardino
Contra
4684
1
Mariposa
90
453
San
A-804
596
Tehama
457
183
Costa
Francisco
Del Norte
101
549
Mendocino
667
99
San
2855
283
Trinity
108
595
Joa uin
El Dorado
704
635
Merced
1660
753
San Luis
1311
137
Tulare
2530
108
Obispo
Fresno
5052
623
Modoc
191
93
San Mateo
4778
175
Tuolumne
177
160
Glenn
469
76
Mono
69
302
Santa
2065
881
Ventura
2607
237
Barbara
Humboldt
1 801
1 83
Monterey
357
239
Santa Clara
6626
664
Yolo
769
16
Imperial
1189
1 701
Napa
704
742
Santa Cruz
1638
607
Yuba
398
693
In o
165
672
Nevada
363
94
Shasta
800
633
Kern
3756
690
Orange
7182
18
San Diego
SERIES
5 Book
1964,
Page
149774
shall inure to and bind the parties hereto, with respect to the property above described. Said
agreements, terms and provisions contained in said subdivisions A and B (identical in all
counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated
herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length
herein, and Beneficiary may charge for a statement regarding the obligation secured hereby,
provided the charge therefor does not exceed the maximum allowed by law.
The undersigned Trustor, requests that a copy of any notice of default and any notice of sale
hereunder be mailed to him at his address hereinbefore set forth.
882/015610-0057 -2-
1102564.05 a07/02110
SEE RIDER ATTACHED TO THIS DEED OF TRUST
"Trustor"
GARFF PROPERTIES -LA QUINTA, LLC,
a Utah limited liability company
Date:
2010
By:-�
Its:
Qn•
882/015610-o657 -5-
1102564.05 a07/02/10
State of Utah )
County of��T2
On a , act) L ,before me, Ina I ouyTDi 5 Notary Public,
personally appeared J dnN G Gf R' j 1 �G U et fly r
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of Utah that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature JLe -%
(seal)
TINA BOURGEOIS
[NOTARY PUBUC • STATE OF UTAH
Z ; 3869 SOUTH 2100 WEST
WEST Canm. VALLEY Cm UT 84110
E . 10/OS/20)1
882/015610-0057 -6-
1102566.05.0/02/TO
RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS
This RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is
entered into this Jo"—1 day of 7YU , 2010, by and between GARFF PROPERTIES -
LA QUINTA, LLC, a Utah limited li ility company, herein "Trustor," herein "Trustee," and
LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein
"Beneficiary," the same parties to that certain form Deed of Trust With Assignment of Rents, of
even date hereto, to which this Rider is attached. This Rider is made a part of and is
incorporated into the form Deed of Trust. This Rider shall supersede any conflicting term or
provision of the form Deed of Trust to which it is attached.
Reference is made to:
a. The Owner Participation Agreement by and between Trustor as
"Developer" and Beneficiary as "Agency" dated on or about v 13 ,
2010 (the "OPA") which sets forth terms and conditions for Borrower's redevelopment of the
real property legally described in Exhibit "A" to this Deed of Trust ("Property");
b. The Promissory Note of even date herewith, in the Principal amount of up
to Two Million Three Hundred Thousand Dollars ($2,300,000), with Trustor as 'Borrower" and
Beneficiary as "Agency" or "Lender" ("Note"), which Notes is secured by this Deed of Trust.
The parties hereto agree:
C. The Operating Covenant of even date herewith with Trustor as
"Developer" and Beneficiary as "Agency" (the "Operating Covenant") which sets forth Trustor's
obligations to ensure the continuous operation of Cadillac and Chevrolet automobile dealerships
on the Property for a period of ten (10) years after completion of Trustor's redevelopment of the
Property.
1. Obligations Secured. Trustor makes this grant and assignment for the purpose of
securing the following obligations ("Secured Obligations"):
a. Payment to Beneficiary of all indebtedness at any time owing under the
terns of the Note;
Trust;
b. Payment and performance of all obligations of Trustor under this Deed of
C. Payment and performance of all obligations of Trustor under the OPA;
d. Payment and performance of all future advances and other obligations of
Trustor or any other person, firm, or entity with the approval of Trustor, may agree to pay and/or
perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when the
obligation is evidenced by a writing which recites that it is secured by this Deed of Trust; and
e. All modifications, extensions and renewals of any of the obligations
secured hereby, however evidenced.
882/01561M057 _
1102564 05 a07/02/10 -8
2. Obligations. The term "obligations" is used herein in its broadest and most
comprehensive sense and shall be deemed to include, without limitation, all interest and charges,
prepayment charges, late charges and fees at any time accruing or assessed on any of the Secured
Obligations.
3. Incorporation. All terms of the Secured Obligations are incorporated herein by
this reference. All persons who may have or acquire an interest in the Property shall be deemed
to have notice of the terms of the Secured Obligations and to have notice that, if provided
therein, the Note or the OPA may permit borrowing, repayment and re -borrowing.
4. Mortgagee -in -Possession. Neither the assignment of rents set forth in the Deed of
Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder shall be deemed
to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect
to the Property, unless Beneficiary, in person or by agent, assumes actual possession thereof.
Nor shall appointment of a receiver for the Property by any court at the request of Beneficiary or
by agreement with Truster, or the entering into possession of the Property by such receiver, be
deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with
respect to the Property.
5. No Cure. In the event Beneficiary collects and receives any rents under the Deed
of Trust upon any default hereof, such collection or receipt shall in no way constitute a curing of
the default.
6. Possession Upon Default. Upon the occurrence of a default, Beneficiary may, at
its option, without any action on its part being required and without in any way waiving such
default, take possession of the Property and have, hold, manage, lease and operate the same, on
such terms and for such period of time as Beneficiary may deem proper, and may collect and
receive all rents and profits, with full power to make, from time to time, all alterations,
renovations, repairs or replacements thereto as may seem proper to Beneficiary, and to apply
such rents and profits to the payment of (a) the cost of all such alterations, renovations, repairs
and replacements, and all costs and expenses incident to taking and retaining possession of the
Property, and the management and operation thereof, and keeping the same properly insured; (b)
all taxes, charges, claims, assessments, and any other liens which may be prior in lien or payment
of the Note, and premiums for insurance, with interest on all such items; and (c) the indebtedness
secured hereby, together with all costs and attorney's fees, in such order or priority as to any of
such items as Beneficiary in its sole discretion may determine, any statute, law, custom or use to
the contrary notwithstanding. Any amounts received by Beneficiary or its agents in the
performance of any acts prohibited by the terms of this assignment, including, but not limited to,
any amounts received in connection with any cancellation, modification or amendment of any
lease prohibited by the terns of this assignment and any rents and profits received by Trustor
after the occurrence of a default shall be held by Trustor as trustee for Beneficiary and all such
amounts shall be accounted for to Beneficiary and shall not be commingled with other funds of
the Trustor. Any person receiving any portion of such trust funds shall receive the same in trust
for Beneficiary as if such person had actual or constructive notice that such funds were
impressed with a trust in accordance therewith.
882/015610-0057 _
1102564.05 OVUM _9
7. Receiver. In addition to any and all other remedies of Beneficiary set forth under
this Deed of Trust or permitted at law or in equity, if a default shall have occurred, Beneficiary,
to the extent permitted by law and without regard to the value, adequacy or occupancy of the
security for the Note and other sums secured hereby, shall be entitled as a matter of right if it so
elects to the appointment of a receiver to enter upon and take possession of the Property and to
collect all rents and profits and apply the same as the court may direct, and such receiver may be
appointed by any court of competent jurisdiction by ex parte application and without notice,
notice of hearing being hereby expressly waived. The expenses, including receiver's fees,
attorneys' fees, costs and agent's compensation, incurred pursuant to the power herein contained
shall be secured by this Deed of Trust.
8. Subordination. The Beneficiary acknowledges and agrees that the this Deed of
Trust is and shall be subject and subordinate to the "Komerstone Deed of Trust" (as defined in
the OPA) and to all renewals, modifications, consolidations, replacements, and extensions
thereof, provided the maximum cumulative principal amount of the loan secured by any such
renewal, modification, consolidation, replacement, or extension, when added to the outstanding
principal balance due under the Note, shall not exceed ninety percent (90%) of the lender's
appraised value of the Property upon completion of the rehabilitation project required under the
OPA, which amount shall be verified in writing to Beneficiary's Executive Director's reasonable
satisfaction. In addition, notwithstanding anything herein to the contrary, Beneficiary agrees to
subordinate this Deed of Trust to any subsequent deed of trust recorded against the Property
relating to any take-out or permanent financing or refinancing thereof obtained by Trustor,
provided the maximum cumulative principal amount secured by any such take-out or permanent
financing, when added to the outstanding principal balance due under the Note, shall not exceed
ninety percent (90%) of the lender's appraised value of the Property.
9. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary
addressed to:
To Agency: Notices Delivered by U.S. Mail:
La Quinta Redevelopment Agency
P.O. Box 1504
La Quinta, CA 92247
Phone No.: 760-777-7031
Facsimile No.: 760-777-7101
Attention: Executive Director
Notices Delivered Personally or by Courier:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, California 92253
Phone No.: 760-777-7031
Facsimile No.: 760-777-7101
Attention: Executive Director
[signatures on next page]
8821015610-0057
2102564.05 a07/02110 -10-
IN WITNESS WHEREOF, Trustor has executed this Rider on the date of Trustor's
acknowledgment hereinbelow, to be effective for all purposes as of the day and year first set
forth above.
"Trustor"
GARFF PROPERTIES -LA QUINTA, LLC,
a Utah limited liability company
Date: -0 12010 By:
Its:
882/015610-0057
1102564 05 a07/O2/10 -L t-
State of Utah
County of -5-AW-1,c&k a )
On before me, 7 %Yl&, &Ltfcltoi s Notary Public,
personally appeared s)hr 1(• C,o.J'R-' %1a14c, o#- ,
who proved to me on the basis of satisfactory evidence to be the pe son(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of Utah that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature C �" 1,) "%"
(seal)
882/015610-0057
1102564.05 a07/02/10
TINA BOURGEOIS
NOTARY PUBLIC • STATE OF UTAH
3869 SOUTH 2100 WEST
/f M,ySCommE E pm10/05/201191
-12-
ATTACHMENT "8"
OPERATING COVENANT
[See Following Document]
882/015610-0057 ATTACHMENT 8
1102564,05 a07/02/10
PLEASE COMPLETE THIS INFORMATION
RECORDING REQUESTED BY:
VERONICA J. MONTECINO, City Clerk
AND WHEN RECORDED MAIL TO:
CITY OF LA QUINTA
Attn: Veronica J. Montecino
P O Box 1504
La Quinta, CA 92247
SPAL
DOC # 2010-0378795
08/12/2010 08:00p Fee:NC
Page 1 of 14
Recorded in Official Records
County of Riverside
Larry W. Ward
Assessor, County Clerk 8 Recorder
111111111111111111111111111111111111111 I 111111111111111
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OPERATING COVENANT
Title of Document
THIS AREA FOR
RECORDERS
USE ONLY
1020
THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION
(83.00 Additional Recording Fee Applies)
5
RECORDING REQUESTED BY AND
When Recorded Mail to:
La Quinta Redevelopment Agency
P.O. Box 1504 Calle Tampico
La Quinta, CA 92247
Attn: Executive Director
This document is exempt from the payment of a recording
fee pursuant to Government Code Section 27383.
OPERATING COVENANT
THIS OPERATING COVENANT ("Operating Covenant") is made this /34A day of
, 2010 (the "Effective Date"), by and between the LA QUINTA
LOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and
R&
GARFF PROPERTIES, LLC, a Utah limited liability company (the "Developer"), with
reference to the following:
A. The Agency and the Developer have executed an Owner Participation Agreement
("Agreement"), dated as of SuLti 13. , 2010, which provides, inter alia, for the
redevelopment of that certain real property located in the City of La Quinta, County of Riverside,
State of California, more fully described in Exhibit "A" attached hereto and incorporated herein
by this reference (the "Property"), and Developer's construction and operation thereon of the
"Project" as further defined in the Agreement. The Agreement is available for public inspection
and copying at the office of the City Clerk, La Quinta City Hall, 78-495 Calle Tampico, La
Quinta, CA 92253.
B. Developer owns fee title to the Property.
C. Pursuant to the Agreement, Developer has agreed to construct the Project on the
Property, and Agency has agreed to provide the Developer with certain financial assistance to
reimburse Developer for costs associated therewith.
D. The Agreement also provides for the recordation of this Operating Covenant
against the Property to memorialize certain covenants, conditions, and restrictions regarding the
use, maintenance, and operation of the Property by Developer and Developer's successors and
assigns.
E. The City of La Quinta has fee interests in parks, City Hall, public libraries, and in
various streets, sidewalks, and other property within the City (collectively, the "Benefited Public
Property"), and is responsible for planning of land uses within the City in such a manner as to
provide for the health, safety, and welfare of the residents of the City. The Benefited Public
Property is legally described in Exhibit "B" attached hereto and incorporated herein by .this
reference.
882/015610-0057
110256405 a07/02/10 -]_
e
NOW, THEREFORE, Developer hereby covenants, agrees, and declares by and for itself
and its successors and assigns that the Property shall be held, sold, conveyed, hypothecated,
encumbered, used, occupied, and improved subject to the following covenants, conditions, and
restrictions (sometimes collectively referred to hereinafter as the "Covenants"). These
Covenants shall run with the Property and shall be binding on all parties having or acquiring any
right, title, or interest in the Property or any part thereof and shall inure to the benefit of the
Agency and its successors and assigns regardless of whether the Agency holds any interest in
any real property benefited thereby.
1. Covenant Regarding Specific Uses.
(a) Construction of Project. Developer covenants and agrees for itself, its
successors, assigns, and every successor in interest to Developer's interest in the Property or any
part thereof, that within the times set forth in the Schedule of Performance attached to the
Agreement as Attachment 3 (the "Schedule of Performance"), Developer shall commence,
diligently proceed with, and satisfactorily complete construction of the Project so as to entitle
Developer to the Agency's issuance of a Release of Construction Covenants for the Project as
provided for in Section 2.8 of the Agreement. The foregoing covenant shall be deemed satisfied
and shall terminate upon the Agency's issuance of a Release of Construction Covenants.
(b) Operation of Project. For a term (the "Term") commencing upon the
Effective Date hereof and ending on the tenth (10a') anniversary of the date of recording of the
Release of Construction Covenants for the Project (the "Operating Covenant Termination Date"),
the Developer hereby covenants and agrees to devote the Property for the exclusive purpose and
use of development and operation of the Project and will comply with the other obligations
contained herein. Notwithstanding anything herein to the contrary, the nondiscrimination
covenants contained in subdivision (a) of Section 4 hereof shall run with the land in perpetuity
and shall not terminate on the Operating Covenant Termination Date. Except as provided below,
or with the prior written consent of the Agency for each instance, which consent may be granted
or withheld in the Agency's sole and absolute discretion, the failure of the Developer (or its
tenant) to operate any portion of the Project on the Property as required herein for thirty (30) or
more consecutive days shall, at the Agency's option, constitute a default hereunder; provided,
however, that the Developer shall for purposes of this Section 1 be deemed to be operating such
portion of the Project during any period that the Developer is prevented from operating such
portion due to (i) required or necessary rehabilitation of such portion of the Project (provided
that the period during which such portion of the Project is not operated as a result of the
rehabilitation shall in no event exceed thirty (30) days), unless the rehabilitation cannot
reasonably be completed within such thirty (30) day period, in which case the period may extend
as necessary for completion, provided such rehabilitation was commenced within the thirty (30)
period and is diligently pursued to completion or (ii) war; insurrection; strikes; lockouts; riots;
floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics;
quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or
priority; litigation; unusually severe weather; inability to secure necessary labor, materials or
tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other party; or
acts or failures to act of the City or Agency other public or governmental agency or entity.
Notwithstanding anything to the contrary herein, (a) an extension of time for any cause listed in
romanette (ii) above shall be for the period of the enforced delay and shall commence to run
882/015610-0057
1102564.05 a07102/10 -2-
from the time of the commencement of the cause, if notice by the Developer is sent to the other
party within ten (10) days of the commencement of the cause, and (b) Developer is not entitled
pursuant to this Section 1 to an extension of time to perform because of past, present, or future
difficulty in obtaining financing necessary to operate the Project because of economic or market
conditions.
Notwithstanding anything herein to the contrary, in the event that at any time after the
Effective Date hereof (1) General Motors, LLC, a Delaware limited liability company ("General
Motors"), ceases to exist, or (2) General Motors terminates the franchise agreement with respect
to either or both of the Chevrolet or Cadillac automobile dealerships required to be operated on
the Property pursuant to this Operating Covenant, through no fault of the Developer, then this
Operating Covenant shall automatically terminate; provided, however, that if General Motors
terminates only one of the two franchise agreements as described in clause (2) above, then this
Operating Covenant shall only terminate with respect to the automobile dealership covered by
such terminated franchise agreement.
2. Performance of Maintenance.
(a) Developer shall maintain the Project, the Property and all "improvements"
(as defined hereinafter) thereon in accordance with the Maintenance Standards, as hereinafter
defined. As used herein, the term "Improvements" shall mean and include, but not be limited to,
buildings, sidewalks, pedestrian lighting, landscaping, irrigation of landscaping, architectural
elements identifying the Property and any and all other improvements on the Property.
(b) To accomplish said maintenance, Developer shall either staff or contract
with and hire licensed and qualified personnel to perform the maintenance work, including the
provision of labor, equipment, materials, support facilities, and any and all other items necessary
to comply with the requirements of this Operating Covenant.
(c) The following standards ("Maintenance Standards") shall be complied
with by Developer and Developer's maintenance staff, contractors or subcontractors:
1. Landscape maintenance shall include, but not be limited to:
watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning;
trimming and shaping of trees and shrubs to maintain a healthy, natural appearance and safe road
conditions and visibility, and irrigation coverage; replacement, as needed, of all plant materials;
control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking
for support of trees.
2. Clean-up maintenance shall include, but not be limited to:
maintenance of all sidewalks, paths and other paved areas in clean and weed -free condition;
maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or
unsightly; removal of all trash, litter and other debris from improvements and landscaping prior
to mowing; clearance and cleaning of all areas maintained prior to the end of the day on which
the maintenance operations are performed to ensure that all cuttings, weeds, leaves and other
debris are properly disposed of by maintenance workers.
8821015610-0057
1102564.05 a07/02/10 -3-
3. All maintenance work shall conform to all applicable federal and
state Occupational Safety and Health Act standards and regulations for the performance of
maintenance.
4. Any and all chemicals, unhealthful substances, and pesticides used
in and during maintenance shall be applied in strict accordance with all governing regulations.
Precautionary measures shall be employed recognizing that all areas are open to public access.
5. The Project and Property shall be maintained in conformance and
in compliance with the approved Property construction and architectural plans and design
scheme, as the same may be amended from time to time with the approval of the City, and
reasonable commercial development maintenance standards for similar projects, including but
not limited to: painting and cleaning of all exterior surfaces and other exterior facades
comprising all private improvements and public improvements to the curbline.
6. The Project and Property shall be maintained as required by this
Section in good condition and in accordance with current factory standards of General Motors
for General Motors automobile dealerships, as determined by the Dealer Development Division
of General Motors factory standards (the "General Motors Standards").
3. Failure to Maintain Property.
In the event Developer does not maintain the Property in the manner set forth herein and
in accordance with the Maintenance Standards, Agency shall have the right to maintain such
private and/or public improvements, or to contract for the correction of such deficiencies, after
written notice to Developer. However, prior to taking any such action, Agency agrees to notify
Developer in writing if the condition of the Project or Property do not meet with the Maintenance
Standards and to specify the deficiencies and the actions required to be taken by Developer to
cure the deficiencies. Upon notification of any maintenance deficiency, Developer shall have
thirty (30) days within which to correct, remedy or cure the deficiency. If the written notification
states the problem is urgent relating to the public health and safety of the City, then Developer
shall have forty-eight (48) hours to rectify the problem.
In the event Developer fails to correct, remedy, or cure (or for deficiencies which cannot
reasonably be corrected, remedied, or cured within thirty (30) days has failed to commence
correcting, remedying or curing such maintenance deficiency and diligently pursue such
correction, remedy, or cure to completion) after notification and after the period of correction has
lapsed, then Agency shall have the right to maintain such improvements. Developer agrees to
pay Agency such charges and costs. Until so paid, the Agency shall have a lien on the Property
for the amount of such charges or costs, which lien shall be perfected by the recordation of a
"Notice of Claim of Lien" against the Property. Upon recordation of a Notice of a Claim of Lien
against the Property, such lien shall constitute a lien on the fee estate in and to the Property prior
and superior to all other monetary liens except: (i) all taxes, bonds, assessments, and other levies
which, by law, would be superior thereto; (ii) the lien or charge of any mortgage, deed of trust, or
other security interest then of record made in good faith and for value, it being understood that
the priority of any such lien for costs incurred to comply with this Agreement shall date from the
882/01561 M057
110256k05 a07/02/10 -4-
date of the recordation of the Notice of Claim of Lien. Developer shall be liable for any and all
attorneys' fees, and other legal costs or fees incurred in collecting said maintenance costs.
4. Compliance with Law. Developer shall comply with all local, state and federal
laws relating to the uses of or condition of the Property and the Project. The operation of the
Project shall be in compliance with the requirements of any entitlements issued by the City for
the Project, including, as applicable, a conditional use permit, site development permit, and
specific plan amendment.
(a) Nondiscrimination Covenants. Developer covenants by and for itself and
any successors in interest to all or any portion of the Property that there shall be no
discrimination against or segregation of any person or group of persons on account of race, color,
creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer,
use, occupancy,tenure or enjoyment of the Property, nor shall Developer itself or any person
claiming under or through it establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, subleases or vendees of the Property. The foregoing covenants shall run
with the land.
Developer shall refrain from restricting the rental, sale or lease of the Property any
portion thereof on the basis of race, color, religion, sex, marital status, ancestry or national origin
of any person. All such deeds, leases or contracts shall contain or be subject to substantially the
following nondiscrimination or nonsegregation clauses:
(1) In deeds: "The grantee herein covenants by and for himself or
herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or
through them, that there shall be no discrimination against or segregation of, any person or group
of persons on account of race, color, creed, religion, sex, marital status, national origin or
ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land
herein conveyed, nor shall the grantee or any person claiming under or through him or her,
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees in the land herein conveyed. The foregoing covenants shall run with the land."
(2) In leases: "The lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or
through him or her, and this lease is made and accepted upon and subject to the following
conditions:
"That there shall be no discrimination against or segregation of any person or group of
persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry
in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises
herein leased nor shall the lessee himself or herself, or any person claiming under or through him
or her, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased."
882/015610-0057
1102564 05 .07/02/10 -5-
(3) In contracts: "There shall be no discrimination against or
segregation of, any person, or group of persons on account of race, color, creed, religion, sex,
marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person
claiming under or through him or her, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees of the premises."
(b) No Violation of Statutes Relating to Relocation of Vehicle Dealerships. Until the
Operating Covenant Termination Date, Developer shall not take any action that would result in a
violation by the Agency and/or City of California Government Code Section 53084 or Health &
Safety Code Section 33426.7. Developer further agrees to indemnify, defend, and hold harmless
the Agency and City from and against any claims, proceedings, losses, costs, or expenses
incurred as a result of any such violation arising out of actions by Developer.
(c) No Violation of Statutes Relating to Direct Assistance by A eg ncy. Developer
represents and warrants that it is using the Agency financial assistance for the sole and exclusive
purpose of causing the construction of the Project on the Property and for no other purpose and
that the Agency's financial assistance shall not be used in a manner that would constitute a
violation of Health & Safety Code section 33426.5. Developer further agrees to indemnify,
defend, and hold harmless the Agency or City from and against any claims, proceedings, losses,
costs, or expenses incurred as a result of any such violation arising out of actions by Developer.
5. Sales and Use Tax Covenant. From the date this Operating Covenant is
recorded against the Property until the Operating Covenant Termination Date, Developer shall
designate the Property as the point of sale for sales tax purposes in all retail sales and lease
contracts for vehicles, parts, and equipment, and all other goods sold or leased on the Property,
whose sales and leases originate from the Property.
6. Covenant to Pay Taxes and Assessments. From the date this Operating
Covenant is recorded against the Property until the Operating Covenant Termination Date,
Developer shall pay or cause to be paid, prior to delinquency, all ad valorem real estate taxes,
special taxes, and assessments levied against the Property and any improvements thereon, subject
to Developer's right to contest any such tax or assessment in good faith. During such period
Developer shall remove or have removed any levy or attachment made on the Property or any
part thereof or assure the satisfaction thereof within a reasonable time and prior to a sale of the
Property.
7. Defaults.
(a) Failure or delay by either party to perform any term or provision of this
Operating Covenant constitutes a default under this Operating Covenant. A party claiming a
default shall give written notice of default to the other party, specifying the default complained
of and the actions required to correct such default.
(b) Unless otherwise provided by the Agreement, the claimant shall not
institute proceedings against the other party if the other party within thirty (30) days from receipt
182/015610-0057
1102564,05 a07/02/10 -6-
of such notice immediately, with due diligence, commences to cure, correct or remedy such
failure or delay and completes such cure, correction or remedy as soon as reasonably practicable
after receipt of such notice.
(c) This Operating Covenant and the Developer's obligations hereunder are
secured by a Deed of Trust With Assignment of Rents and Rider Attached Hereto ("Deed of
Trust"), which has been entered and recorded on approximately the same date as this Operating
Covenant.
S. Legal Actions.
(a) In addition to any other rights or remedies and subject to the notice and
cure provisions in Section 7 above, any party may institute legal action to seek specific
performance of the terms of this Operating Covenant, or to cure, correct or remedy any default,
or to obtain any other legal or equitable remedy consistent with the purpose of this Operating
Covenant. The Agency shall also have the right to pursue damages for Developer's defaults, but
in no event shall Developer be entitled to damages of any kind from Agency, including, without
limitation, damages for economic loss, lost profits, or any other economic or consequential
damages of any kind. Such legal actions must be instituted in the Superior Court of the County
of Riverside, State of California or in the Federal District Court in the Central District of
California. In the event of any litigation between the parties hereto, the prevailing party shall be
entitled to receive, in addition to the relief granted, its reasonable attorney's fees and costs and
such other costs incurred in investigating the action and prosecuting the same, including costs for
expert witnesses, costs on appeal, and for discovery.
(b) The internal laws of the State of California shall govern the interpretation
and enforcement of this Operating Covenant, without regard to conflict of laws.
(c) In the event that any legal action is commenced by the Developer against
the Agency, service of process on the Agency shall be made by personal service upon the
Executive Director of the Agency in addition to such other manner as may be provided by law.
(d) In the event that any legal action is commenced by the Agency against the
Developer, service of process on the Developer shall be made by personal service upon any
officer or director of Developer, whether made within or outside the State of California, or in
such other manner as may be provided by law.
(e) Except as otherwise expressly stated in this Operating Covenant, the rights
and remedies of the parties are cumulative, and the exercise by either parry of one or more of
such rights or remedies shall not preclude the exercise by it, at the same or different times, of any
other rights or remedies for the same default or any other default by the other party.
(f) Any failures or delays by either party in asserting any of its rights and
remedies as to any default shall not operate as a waiver of any default or of any such rights or
remedies, or deprive either such party of its right to institute and maintain any actions or
proceedings which it may deem necessary to protect, assert or enforce any such rights or
remedies.
882/015610-0057
1102564.05 .07/02/10 -7-
9. Effect of Violation of the Terms and Provisions of this Operating Covenant.
The covenants established in this Operating Covenant shall, without regard to technical
classification and designation, be binding for the benefit and in favor of the Agency and the City
of La Quinta ("City"), and each of their successors and assigns, as to those covenants which are
for their benefit. The covenants contained in this Operating Covenant shall remain in effect for
the periods of time specified therein. The Agency and City are deemed the beneficiary of the
terns and provisions of this Operating Covenant and of the covenants running with the land, for
and in their own rights and for the purposes of protecting the interests of the community and
other parties, public or private, in whose favor and for whose benefit this Operating Covenant
and the covenants running with the land have been provided. This Operating Covenant and the
covenants shall run in favor of the Agency and the City, without regard to whether the Agency or
City have been, remain or are an owner of any land or interest therein in the Property. The
Agency and City shall have the right, if the Operating Covenant or covenants are breached, to
exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other
proper proceedings to enforce the curing of such breaches to which they or any other
beneficiaries of this Operating Covenant and covenants may be entitled. Pursuant to applicable
law, including, but not limited to, Section 1462, 1465 and 1468 of the Civil Code of the State of
California, all provisions of this Covenant Agreement shall run with the land and be binding upon
and inure to the benefit of the Benefited Public Property and the Property and each and every
portion thereof or interest therein, and all parties having or acquiring any right, title, or interest in
the Property or any portion thereof, and their successors and assigns
10. Miscellaneous Provisions.
(a) If any provision of this Operating Covenant or portion thereof, or the
application to any person or circumstances, shall to any extent be held invalid, inoperative or
unenforceable, the remainder of this Operating Covenant, or the application of such provision or
portion thereof to any other persons or circumstances, shall not be affected thereby; it shall not
be deemed that any such invalid provision affects the consideration for this Operating Covenant;
and each provision of this Operating Covenant shall be valid and enforceable to the fullest extent
permitted by law.
(b) This Operating Covenant shall be construed in accordance with the
internal laws of the State of California without regard to conflict of law principles.
(c) This Operating Covenant shall be binding upon and inure to the benefit of
the successors and assigns of the Developer but any Transfer shall be subject to the requirements
and provisions of Section 7 of the Agreement. .
(d) The City of La Quints is a third party beneficiary of the terms of this
Operating Covenant, and shall have the right, but not the obligation, to enforce the terms hereof.
11. Notices. All notices under this Agreement shall be effective (i) upon personal
delivery, (ii) upon delivery by reputable overnight courier that provides a receipt with the date
and time of delivery, (iii) via facsimile, so long as the sender receives confirmation of successful
transmission from the sending machine, or (iv) three (3) business days after deposit in the United
" States mail, registered or certified, postage fully prepaid and addressed to the respective parties
882/01561M057
1102564.05 a07/02/10 -$-
as set forth below or as to such other address as the parties may from time to time designate in
writing:
To Agency: Notices Delivered by U.S. Mail:
La Quinta Redevelopment Agency
P.O. Box 1504
La Quinta, CA 92247
Phone No.: 760-777-7031
Facsimile No.: 760-777-7101
Attention: Executive Director
Notices Delivered Personallv or by Courier:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, California 92253
Phone No.: 760-777-7031
Facsimile No.: 760-777-7101
Attention: Executive Director
With a copy to: Rutan & Tucker, LLP
611 Anton, Suite 1400
Costa Mesa, CA 92626
Phone No.: 714-641-5100
Facsimile No.: 714-546-9035
Attention: M. Katherine Jenson, Esq.
To Developer: Garff Properties -La Quinta, LLC
405 South Main Street, Suite 1200
Salt Lake City, UT 84111
Phone No.: 801-257-3402
Facsimile No.: 801-257-3460
Attention: John Garff
and
Garff Enterprises, Inc.
405 South Main Street, Suite 1100
Salt Lake City, UT 84111
Phone No.: 801-257-3412
Facsimile No.: 801-257-3400
Attention: Tony Kraatz
With a copy to: Garff Enterprises, Inc.
405 South Main Street, Suite 1200
Salt Lake City, UT 84111
Phone No.: 801-257-3468
Facsimile No. 801-428-1968
Attention: Michael D. Creer, Esq.
882/015610-0057
1102564 05 a07/02/10 -9-
IN WITNESS WHEREOF, the parties hereto has executed this instrument the day and
year first hereinabove written.
"Developer"
GARFF PROPERTIES -LA QUINTA, LLC,
a Utah limited liability company
Date: �'�'�{
2010
By; —
�4= (-'
Its:
Date LG ... -/- - _, 2010
A'
:, , •, 7
rsgency,3vcreistyq/ .,
APPROVED AS TO;FORA
11 & Ti 7 LI B
Aten6y Counsel
"Agency"
LA QUINTA REDEVELOPMENT
AGENCY, a public body, corporate and
pol'
Executive Director
882/015610-0057
1102564.05 a07/02/10 -to-
State of Utah )
County of )
On L 1 961 D before me, � l V r% &Ut rcleoi S Notary Public,
personally appeared V Y� c f rT 1 %� AKA u Q r
who proved to me on the basis of satisfactory evidence to be the pe on(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of Utah that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature C l hcn-` "—
(seal)
r - •�•
TINA BOURGEOIS
NOTARY PueUC STATE OF UTAH
3869 SOUTH 2100 NEST
,•.
WEST YALLEY CITY, UT 84119
Ca M. Exp. 70/084111
State of California )
County ofi�uSen.o� )
On ry/13 2-1 before me, , NotaryPublic,
nn here in ert name and titleof the office
tsa
personally appearedomna ar l'.c.�C a ee_ ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
rNrtuB MAN
Signature Q" No '-1��
INVOMM caftwft
(seal) OCI 16, 201
882/015610-0057
1102564.05 a07/UM
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
All that property located in the City of La Quinta, County of Riverside, State of
California, described as follows:
PARCEL 3 OF PARCEL MAP 28525-1, AS SHOWN BY MAP ON FILE IN
BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA.
ASSESSOR'S PARCEL NUMBER 600-020-014.
882/015610-0057
1102564,05.07/02/10 -12-
EXHIBIT `B"
LEGAL DESCRIPTION OF BENEFITED PUBLIC PROPERTY
North La Quinta Park
Adams Park
Centre Pointe Dog Park
City Hall
City Library
Senior Center
Boys and Girls Club
Sports Complex
YMCA
Seasons Park
Fritz Burns Park
North East Corner of Westward Ho & Dune Palms
South West Corner of Adams Street & La Palma
South East Corner of Seeley Drive & Miles Avenue
South West Comer of Washington Street & Calle Tampico
78-275 Calle Tampico
78-450 Avenida La Fonda
North West Corner of Park Avenue & Avenue 50
North West Corner Park Avenue & Avenue 50
North West Corner of Park Avenue & Avenue 50
Cloud View Way & Calle Las Ramblas
South East Corner of Avenida Bermudas & Avenue 52
Highway 111, from Adams Street to Dune Palms Road
Dune Palms Road, from Avenue 48 to Highway I I I
Adams Street, from La Quinta Centre Drive to Highway 111
La Quints Centre Drive, from Adams Street to Highway 111
882/015610-0057
1102564.05 a07102/10 -13-
MOW- CERTIFICATE OF LIABILITY INSURANCE OP ID GA
-KENGAl
GATE7/09/10
07/09/10
PRODUCER
The Presidio Group, Inc.
5295 South 300 West #550
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION
ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE
HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR
ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
INSURERS AFFORDING COVERAGE
NAIC#
Salt Lake City UT 84107
Phone:801-924-1400 N'ax:801-924-1441
INSURED
INSURER A. N.w II.P.hir. imurme. C..
23841
INSURER BHAt'1 Unien Fir. in.. Co. FA
19445
Garff Properties LLC
405 South Main Street,
INsuRERc'.
INSURER D'.
Suite 1200
Salt Lake City UT 84111
INN LVER E'
COVER
— THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NQdEO ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING
ANY REOUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR
MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH
POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAMS
LTR
WRE
TYPE OF INSURANCE
POLICY NUMBER
DATE (MM(DDIYY)
DATE (MMIDORY)
LIMBS
GENERAL LIABILITY
EACH OCCURRENCE
$1,000,000
PREWSES(Ea occurwo)
$500,000
A
X COMMERCIAL GENERAL LIABILITY
4360724
06/15/10
07/01/11
MEO EXP (Any one Person)
$ 10 , 000
CLAMS MADE 7 OCCUR
PERSONAL B ADV INJURY
$1,000,000
87953 & 90533
ADDITIOUAL INSURED FORMS
WAIVER CG2404 10/9
61712 12/06
GENERAL AGGREGATE
12,000,000
GENT AGGREGATE LIMIT APPLIES PER:
PRODUCTS-COW/OP AGO
$2,000,000
POLICY PEa LOC
B
AUTOMOBILE
LIABILITY
ANY AUTO
COVERAGE PROVIDED IN
COMBINED SINGLE LIMIT
(Ea n6d.d)
$
BODILY INJURY
(Per DerSon)
$
ALL OWNED AUTOS
SCHEDULED AUTOS
GARAGE LIABILITY
06/15/10
07/01/11
BODILY INJURY
(Per eccldenU
$
HIRED AUTOS
NONOWNED AUTOS
PROPERTY DAMAGE
(Pa eccitlonN
$
GARAGE LIABILITY
AUTO ONLY - EA ACCIDENT
$
OTHER THAN EA ACC
'ALTO ONLY. AGG
$1,000,000
B
X
X ANY AUTO
MX GKLL
3976394
$1,000,000 LIMIT
06/15/10
06/15/10
07/01/11
07/01/11
s2,000,000
E%CESSIUMBRELLA LIABILITY
EACHOCCURRENCE
120,000,000
AGGREGATE
$20,000,000
B
X OCCUR CLAMS MADE
BE23573264
06/15/10
06/15/11
-
$
$
DEDUCTIBLE
hxRETENTION
$
$10,000
WORKERS COMPENSATION AND
X TORY LIMITS ER
EL. EACH ACCIDENT
$1,000,000
A
A
EMPLOYERS'LIABILITY
MY
OFFICCERIMEMBER EXCLLUOEO1 VTIVE
I(Yes. describe under
SPECIAL PROVISIONS belol
WC3566717 - CA ONLY
NCisenle -uE BUT CA
07/01/10
07/01/10
07/01/11
07/01/11
ELDIG(ilSE - EA EMPLOYEE
$1,000,000
EL. DISEASE -POLICY LIMIT
$1,000,000
OTHER
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES T EXCLUSIONS ADDED BY ENDORSEMENT / SPECIAL PROVISIONS
City of La Quints is shown as an additional insured for general liability
only as respects work be completed at Ken Gaff Chevrolet Cadillac of the
Deseret at 78611 Highway III La Quinta, CA 92235. Waiver of subrogation
applies for Garage liability per form shown above and workers compensation
per form QC040361 11/90 attached. Primary wording per form attached
....TATE HOLDER CANCELLATION
CER
CITYLAQ SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION
' DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN
NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT. BUT FAILURE TO DO SO SHALL
City Of La Quinta IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR
P 0 Box 1504
La Quinta CA 92247-1504 REPRESENTATIVES.
AUTHORIZED RVFNINI
n r-nRn nnoonR eTlnN NGRR
ACORD 25 (2001108) �'-'-
ACORD 25 (2001108) �'-'-
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ENDORSEMENT #
This endorsement, effective 12:01 A.M. 7.1.10 forms apart of Policy No.
4360724 issued to Garff Propertiesm, LLC by New Hampshire
Insurance Company
PRIMARY COVERAGE FOR ADDITIONAL INSUREDS
This endorsement modifies insurance provided under the following:
GARAGE COVERAGE FORM
SECTION V - GARAGE CONDITIONS, B - GENERAL CONDITIONS 5. - Other Insurance -
Primary and Excess Insurance Provisions, c. - is amended to read:
e. Except as provided in paragraphs a. and b. above, this Coverage Form provides
primary insurance for any covered "auto" you own and excess insurance for any
covered "auto" you don't own. This Coverage Form also provides primary
insurance for any additional insured covered hereunder as required by a contract
or agreement entered into with you prior to the date of any accident.
Contribution to a settlement will not be sought from any Additional Insured
covered hereunder as required by a contract or agreement.
AUTHORIZED REPRESENTATIVE
379 9 (3%05)
POLICY NUMBER:4360724 COMMERCIAL GENERAL LIABILITY
0 CG 24 04 10 93
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
WAIVER OF TRANSFER OF RIGHTS OF RECOVERY
AGAINST OTHERS TO US
0
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
SCHEDULE
Name of Person or Organization:
ANY PERSON OR ORGANIZATION REQUIRING A WAIVER OF TRANSFER OF RIGHTS OF
RECOVERY PURSUANT TO THE TERMS OF ANY CONTRACT OR AGREEMENT YOU ENTER
INTO WITH SUCH PERSON OR ORGANIZATION.
(If no entry appears above, information required to complete this endorsement will be shown in the
Declarations as applicable to this endorsement.)
The TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO US Condition lSection IV - COMMER-
CIAL GENERAL LIABILITY CONDITIONS) is amended by the addition of the following:
We waive any right of recovery we may have against the parson or organization shown in the
Schedule above because of payments we make for injury or damage arising out of your ongoing
operations or "your work" done under a contract with that person or organization and included in
the "products -completed operations hazard". This waiver applies only to the person or organization
shown in the Schedule above.
CO 24 04 10 93 Copyright, Insurance Services Office, Inc., 1992 ❑
INSURED COPY
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ENDORSEMENTrY
This endorsement, effective 12:01 A.M. 6/15/10 forms a part of Policy No. 3976394
issued to Garff Properties, LLC Group by National Union Fire Insurance Co. of PA
ADDITIONAL INSURED - WHERE REQUIRED UNDER CONTRACT OR AGREEMENT
(PROFESSIONAL SERVICES EXCLUSION)
This endorsement modifies insurance provided under the following:
GARAGE COVERAGE FORM
SECTION II - LIABILITY COVERAGE, A. - Coverage, 3. - Who Is An Insured, is
amended to add:
Any person or organization to whom you become obligated to include as an
additional insured under this policy, as a result of any contract or agreement
you enter into, excluding contracts or agreements for professional services,
which requires you to furnish insurance to that person or organization of the
type provided by this policy, but only with respect to liability covered by the
terms of this policy, arising out of the use of a covered "auto' you own, hire or
borrow. However, the insurance provided herein will not exceed the lesser of:
1. The coverage and/or limits of this policy, or
2. The coverage and/or limits required by said contract or agreement.
AUTHORIZED REPRESENTATIVE
87953 (3;05)
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ENDORSEMENT #
This endorsement, effective 12:01 A.M. 6/15110 forms a part of Policy No. 4360724
issued to Ken Garff Automotive Group by New Hampshire Insurance Co.
ADDITIONAL INSURED - WHERE REQUIRED UNDER CONTRACT OR AGREEMENT
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE FORM
SECTION II - WHO IS AN INSURED, is amended to include as an additional insured:
Any person or organization to whom you become obligated to include as an
additional insured under this policy, as a result of any contract or agreement you
enter into which requires you to furnish insurance to that person or organization of
the type provided by this policy, but only with respect to liability arising out of
your operations or premises owned by or rented to you. However, the insurance
provided will not exceed the lesser of:
• The coverage and/or limits of this policy, or
The coverage and/or limits required by said contract or agreement.
AUTHORIZED REPRESENTATIVE
61712 (12106)
BLANKET WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS
This endorsement changes the policy to which it is attached effective on the inception date of the policy unless a different
date is indicated below.
(The tdbWN "a=hing dame" neW be conpleled onty when this eKlorserrent is issW subsequent to preparation of N poky).
This endorsement, effective 12:01 AM 0TOV2010 forms a part of Policy No. WC 003-56-6777
issued to GarffProperties, LLC
By NEW HAMPSHIRE INSURANCE COMPANY
We have a right to recover our payments from anyone liable for an injury covered by this policy. We will not enforce
our right against any person or organization with whom you have a written contract that requires you to obtain this
agreement from us, as regards any work you perform for such person or organization.
The additional premium for this endorsement shall be 2 % of the total estimated workers compensation premium
for this policy.
WC 04 03 61 Countersigned by -`
(Ed. 11/90)
Authorized Representative
PROMISSORY NOTE SECURED BY DEED OF TRUST WITH
ASSIGNMENT OF RENTS AND RIDER ATTACHED.HERETO
2010 ("Note Date")
FOR VALUE RECEIVED, the undersigned, GARFF PROPERTIES -LA QUINTA, LLC,
hereinafter referred to as `Borrower," promises to pay to the LA QUINTA REDEVELOPMENT
AGENCY, a public body, corporate and politic, hereinafter referred to as "Agency," so much
principal as may be outstanding in accordance with the terms of this Note, not exceeding TWO
MILLION THREE HUNDRED THOUSAND DOLLARS ($2,300,000), plus accrued interest on
the unpaid principal, plus such other costs, charges, and fees which may be owing from time to
time, all subject to the terms, conditions, and provisions hereinafter set forth.
Reference is made to:
(i) The Redevelopment Plan for Project Area 2, which is incorporated herein by
reference as though fully set forth.
(ii) That certain Owner Participation Agreement by and between Borrower and
Agency, dated on or about July 2010 ("OPA") which sets forth terms and conditions for
Borrower's redevelopment of a site within the Project Area and the City of La Quinta addressed
as 79225 Highway 111, as more particularly described in the legal description attached as
Attachment I to the OPA (the "Site"). The OPA is incorporated herein by reference as though
fully set forth herein.
(iii) That certain Operating Covenant in the form attached to the OPA as Attachment 8
to be executed by and between Agency and Borrower concurrently with the execution hereof and
recorded against the Site (the "Operating Covenant"). The Operating Covenant is incorporated
herein by this reference as though fully set forth herein.
(iv) That certain Deed of Trust With Assignment of Rents and Rider Attached Hereto
in the form attached to the OPA as Attachment 7 to be executed by Borrower concurrently with
the execution hereof and recorded against the Site (the "Deed of Trust"). The Deed of Trust is
incorporated herein by this reference as though fully set forth herein. The Deed of Trust will
secure Borrower's repayment of the "Agency Loan" (as defined in Section I below).
1. Principal Amount; Interest Amount. The principal amount of the
Agency's loan to Borrower (the "Agency Loan") is up to TWO MILLION THREE HUNDRED
THOUSAND DOLLARS ($2,300,000) ("Loan Amount"), which Agency shall disburse to
Borrower in accordance with the provisions of Section 3 of the OPA. Interest shall accrue on the
outstanding principal balance at the 1-year LIBOR Rate, adjusted annually, on each June 30 (or,
if June 30 is not a business day, on the first business day thereafter) during the term hereof.
Interest shall accrue as set forth in Paragraph 4 in the event of a Borrower default.
882/015610-0057
1102564.05 a07/02/10
2. Term of Note. Subject to the provisions of Paragraph 4 herein which
provide for acceleration of the then outstanding principal and accrued interest and immediate
payment thereof in the event of a default by Borrower, the term of this Note shall commence on
the date hereof and continue until the date the Operating Covenant terminates.
3. Repayment. Within one hundred twenty (120) days after the end of each
of the ten (10) fiscal years commencing with the July 1, 2011-June 30, 2012 fiscal year, each of
which fiscal year shall be referred to herein as an "Operating Year," Agency shall forgive first
accrued interest, and then principal, on the Agency Loan, in an amount equal to the "Site Taxes"
(as that term is defined below) generated on the Site during the applicable Operating Year. In
addition, upon expiration or earlier termination of the Operating Covenant, the outstanding
balance owed on the Agency Loan shall be forgiven, and this Note shall be cancelled. As used
herein, the term "Site Taxes" shall mean the sum of (i) the "Sales Taxes From the Site," and (ii)
the "Net Property Tax Increment From the Site" (all as defined below).
a. As used herein, the term "Sales Taxes From the Site" means the
amount equal to the sales and use taxes that are generated from sales occurring on the Site on
which sales or use taxes are imposed pursuant to applicable California law in each Operating
Year which are actually received by the City from the State Board of Equalization. In
connection therewith:
(i) Borrower shall timely report, and shall cause its tenants (if
any) to report, all sales and use taxes from the Site to the State Board of Equalization in
accordance with the laws, rules, and regulations applicable to such reporting.
(ii) Sales Taxes from the Site shall be deemed to have been
paid by the State Board of Equalization to the City if and to the extent the State Board of
Equalization elects to offset the payment of any such Sales Taxes From the Site against any other
obligation of the City.
(iii) Borrower acknowledges that the State Board of
Equalization makes payments to the City based on both actual and anticipated sales and use tax
revenues and that the State Board of Equalization makes periodic reconciliations. The
determination of Sales Taxes from the Site for any annual, quarterly, or other period shall be
subject to the timing and reconciliation process related to the processing by the State Board of
Equalization of payments of such Sales Taxes From the Site to the City. Any adjustments
resulting from any interim or estimated determination of Sales Taxes From the Site for any
annual, quarterly, or other period shall be reconciled by the parties as soon as practicable without
inclusion of, or any obligation to pay, interest.
(iv) Sales Taxes From the Site shall be determined based on
actual amounts received by the City based only on the City's share of the State sales and use tax
applicable to the Site (which, as of the Effective Date, is 1% of the taxable amount). Sales Taxes
From the Site shall not include amounts paid to the City by the State Board of Equalization
derived from any sales tax overrides or special tax amounts received by the City, nor shall
include any administrative fees or charges imposed by the State Board of Equalization that
reduce the actual amounts of sales and use taxes received by the City.
882/015610-0057 -2-
1102564 05 a07/02/10
(v) Borrower shall, and shall cause its tenants (if any) to, keep
full and accurate books of account, records, and other pertinent data showing all gross income
earned upon the Site that is reportable for California sales and use tax purposes, including all
documents required to be maintained by the State of California for sales and use tax purposes.
(vi) Borrower shall furnish, and shall cause its tenants (if any)
to furnish, to Agency true and correct photocopies of its quarterly California sales and use tax
returns at the time each is filed with the State of California, together with a copy of all checks or
wire transfers or other forms of transfer of funds sent for such payment of sales and use taxes.
b. As used herein, the term "Net Property Tax Increment From the
Site" shall mean "New Gross Property Tax Increment From the Site" (as defined below) less
"Old Gross Property Tax Increment From the Site" (as defined below). As used herein, New
Gross Property Tax Increment From the Site means the amount equal to the property tax
increment pursuant to Health and Safety Code Section 33670(b) that was allocated to, paid to
and received by the Agency by reason of Borrower's ownership of the Site in each Operating
Year. As used herein, "Old Gross Property Tax Increment From the Site" means the amount of
gross tax increment pursuant to Health and Safety Code Section 33670(b) attributable to the Site
that was allocated to, paid to and received by the Agency in the July 1, 2009-June 30, 2010 fiscal
year. Borrower and Agency hereby acknowledge that the assessed value of the Site in the July 1,
2009-June 30, 2010 fiscal year was Four Thousand Five Hundred Eighty -One Thousand Nine
Hundred Thirty -One Dollars ($4,581,931).
In connection therewith, Borrower covenants to pay, prior to delinquency, all real
property taxes and assessments that are levied on or against the Site.
C. Borrower shall have the right to prepay all or any portion of this
Note at any time without penalty.
3. Default Acceleration; Cross -Default. In the event Borrower is in default
of any of the covenants, terms, or provisions of this Note, the Deed of Trust, the OPA, or the
Operating Covenant, and Borrower fails to timely cure such default under the terms of the
applicable agreement, it being understood and agreed by Borrower that a default of this Note, or
of the Deed of Trust, or of the OPA, or of the Operating Covenant, shall be a default of all of the
foregoing listed documents, then Borrower shall be in default of this Note and the Loan Amount
and all accrued interest thereon (less the amount of Site Taxes generated prior to such time) shall
become immediately due and payable. The rate of interest applicable to periods of default for
the defaults set forth in this Paragraph 4 shall be calculated at the lesser of ten percent (10%) per
annum or the maximum legal rate, and shall accrue as of the date such payment was originally
due.
882/015610-0057 -3-
1102564.05 a07/02/10
4. Additional Terms.
a. All payments shall be first credited to accrued interest, next to
costs, charges, and fees which may be owing from time to time, and then to principal. All
payment shall be made in lawful money of the United States. Payments shall be made to Agency
at the address set forth in Paragraph 7 herein or at such other address as Agency or the holder of
this Note may direct pursuant to notice delivered to Borrower in accordance with Paragraph 7.
b. Borrower agrees to pay the following costs, expenses, and
reasonable attorney's fees paid or incurred by Agency, or adjudged by the court, in the collection
of amounts in default or other costs incurred as a result of a default by Borrower: (i) reasonable
costs of collections, costs and expenses and attorney's fees paid or incurred in connection with
the collection or enforcement of this Note, whether or not suit is filed, and (ii) costs of suit and
such sums as the court may adjudge as attorney's fees in any action to enforce payment of this
Note or any part of it if Agency prevails in such suit.
5. Nonassumability. This Note shall not be assumable without the prior,
express, written consent of Agency's Executive Director, which shall not be unreasonably
withheld or delayed.
6. Presentment, Etc. Notwithstanding any other provision herein to the
contrary, to the extent permitted by law Borrower hereby waives the following: (a) notice of
default or delinquency, (b) notice of acceleration, (c) notice of nonpayment, (d) notice of costs,
expenses and losses and interest thereon, (e) notice of interest on interest and late charges, (f)
diligence in taking any action to collect any sums owing under this Note or in proceeding against
any of the rights and presentment for payment, demand, protest, and notices of dishonor and/or
protest; (g) the benefits of all waivable exemptions; and (h) all defenses and pleas on the grounds
of any extension or extensions of the time of payment or of any due date under this Note, in
whole or in part, whether before or after maturity and with or without notice.
7. Notices. Any notices required by law or this Note shall be given either by
(i) personal service, (ii) delivery by reputable document delivery service such as Federal Express
that provides a receipt showing date and time of delivery, or (iii) mailing in the United States
mail, certified mail, postage prepaid, return receipt requested.
To Agency: Notices Delivered by U.S. Mail:
La Quinta Redevelopment Agency
P.O. Box 1504
La Quinta, CA 92247
Phone No.: 760-777-7031
Facsimile No.: 760-777-7101
Attention: Executive Director
882/015610-0057 -4-
1102564 05 .07/02/10
Notices Delivered Personally or by Courier:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, California 92253
Phone No.: 760-777-7031
Facsimile No.: 760-777-7101
Attention: Executive Director
With a copy to: Rutan & Tucker, LLP
611 Anton, Suite 1400
Costa Mesa, CA 92626
Phone No.: 714-641-5100
Facsimile No.: 714-546-9035
Attention: M. Katherine Jenson, Esq.
To Borrower: Garff Properties -La Quinta, LLC
405 South Main Street, Suite 1200
Salt Lake City, UT 84111
Phone No.: 801-257-3402
Facsimile No.: 801-257-3460
Attention: John Garff
1
Garff Enterprises, Inc.
405 South Main Street, Suite 1100
Salt Lake City, UT 84111
Phone No.: 801-257-3412
Facsimile No.: 801-257-3400
Attention: Tony Kraatz
With a copy to: Garff Enterprises, Inc.
405 South Main Street, Suite 1200
Salt Lake City, UT 84111
Phone No.: 801-257-3468
Facsimile No.: 801-428-1968
Attention: Michael D. Creer, Esq.
Notices personally delivered or delivered by document delivery service shall be deemed effective
upon receipt. Notices mailed shall be deemed effective on the second business day following
deposit in the United States mail. Either party may designate that notices be sent to other or
additional addresses by complying with the requirements of this section.
882/015610-0057 _5-
1102564.05 .07/02/10
8. Litigation. This Note shall be governed by and construed under the
internal laws of the State of California without regard to conflicts of law. The parties agree that
in any litigation between the parties arising out of this Note, the Superior Court of the State of
California in and for the County of Riverside shall have exclusive jurisdiction. The prevailing
party in any litigation between the parties arising out of or connected to this Note, in addition to
whatever other relief to which the prevailing party is entitled, shall also be entitled to reasonable
attorney's fees, including fees and costs for discovery, and any fees and costs for appeal. In the
event of such legal action, service of process on Agency shall be made in such manner as
provided by law for service on a California public entity; service of process on Borrower shall be
made in such manner as may be provided for by law, and shall be valid whether made within or
without the State of California.
9. Waiver. No waiver of any breach, default, or failure of condition under
the terms of this Note, or the obligations secured hereby, shall be implied from any failure of
Agency to take, or any delay by the Agency in taking, action with respect to such breach, default,
or failure from any previous waiver or any similar or unrelated breach, default, or failure; and a
waiver of any term of this Note must be made in writing and shall be limited to the express
written terms of such waiver.
10. Time of Essence. Time is of the essence in this Note.
11. Severability. In the event that any term or provision of this Note is held to
be unenforceable, the remainder of this Note shall remain in full force and effect to the fullest
extent without inclusion of the unenforceable term or provision.
12. Interpretation. In the event of any conflict between this Note and the
OPA, this Note shall apply. The terms of this Note shall be construed in accordance with the
meaning of the language used and shall not be construed for or against either party by reason of
the authorship of this Note or any other rule of construction which might otherwise apply. The
paragraph headings are for purposes of convenience only, and shall not be construed to limit or
extend the meaning of this Note.
13. Security for Note. This Note shall be secured by the Deed of Trust.
14. Assignment. Agency, at its option, may assign its right to receive
payment under this Note without obtaining the consent of the Borrower or the holder or
beneficiary of the lien of any deed of trust or other security instrument, whether recorded or
unrecorded. Borrower shall not be permitted to assign or transfer this Note or any portion
thereof without the prior express written consent of the Agency Executive Director, which shall
not be unreasonably withheld or delayed.
[signatures on next page]
882/015610-0057 -6-
1102564 05 a07102/10
IN WITNESS WHEREOF, Borrower has executed this Note as of the Note Date.
"Borrower"
GARFF PROPERTIES -LA QUINTA, LLC,
a Utah limited liability company
Date: 3wla 2- 12010 By:
Its: oKc . �✓
882/015610-0057 -7-
1102564 05 .07/02/10
PLEASE COMPLETE THIS INFORMATION
RECORDING REQUESTED BY:
VERONICA J. MONTECINO, City Clerk
AND WHEN RECORDED MAIL TO:
CITY OF LA QUINTA
Attn: Veronica J. Montecino
P 0 Box 1504
La Quinta, CA 92247
DOC # 2010-0378795
08/12/2010 08:00R Fee:NC
Page 1 of 14
Recorded in Official Records
County of Riverside
Larry W. Ward
Assessor, County Clerk & Recorder
1/1111111 I111111111111111111III111111111
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OPERATING COVENANT
Title of Document
THIS AREA FOR
RECORDERS
USE ONLY
11
THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION
(83.00 Additional Recording Fee Applies)
RECORDING REQUESTED BY AND
When Recorded Mail to:
La Quinta Redevelopment Agency
P.O. Box 1504 Calle Tampico
La Quinta, CA 92247
Attn: Executive Director
This document is exempt from the payment of a recording
fee pursuant to Government Code Section 27383.
OPERATING COVENANT
THIS OPERATING COVENANT ("Operating Covenant") is made this 154A day of
2010 (the "Effective Date"), by and between the LA QUINTA
REDE ELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and
GARFF PROPERTIES, LLC, a Utah limited liability company (the "Developer"), with
reference to the following:
A. The Agency and the Developer have executed an Owner Participation Agreement
("Agreement"), dated as of 734�1 13. , 2010, which provides, inter alia, for the
redevelopment of that certain real p oertpy to teacdm the City of La Quinta, County of Riverside,
State of California, more fully described in Exhibit "A" attached hereto and incorporated herein
by this reference (the "Property"), and Developer's construction and operation thereon of the
"Project" as further defined in the Agreement. The Agreement is available for public inspection
and copying at the office of the City Clerk, La Quinta City Hall, 78-495 Calle Tampico, La
Quinta, CA 92253.
B. Developer owns fee title to the Property.
C. Pursuant to the Agreement, Developer has agreed to construct the Project on the
Property, and Agency has agreed to provide the Developer with certain financial assistance to
reimburse Developer for costs associated therewith.
D. The Agreement also provides for the recordation of this Operating Covenant
against the Property to memorialize certain covenants, conditions, and restrictions regarding the
use, maintenance, and operation of the Property by Developer and Developer's successors and
assigns.
E. The City of La Quinta has fee interests in parks, City Hall, public libraries, and in
various streets, sidewalks, and other property within the City (collectively, the "Benefited Public
Property"), and is responsible for planning of land uses within the City in such a manner as to
provide for the health, safety, and welfare of the residents of the City. The Benefited Public
Property is legally described in Exhibit `B" attached hereto and incorporated herein by this
reference.
882/015610-0057 _
1102564.05 .07/02/10 -�
NOW, THEREFORE, Developer hereby covenants, agrees, and declares by and for itself
and its successors and assigns that the Property shall be held, sold, conveyed, hypothecated,
encumbered, used, occupied, and improved subject to the following covenants, conditions, and
restrictions (sometimes collectively referred to hereinafter as the "Covenants"). These
Covenants shall run with the Property and shall be binding on all parties having or acquiring any
right, title, or interest in the Property or any part thereof and shall inure to the benefit of the
Agency and its successors and assigns regardless of whether the Agency holds any interest in
any real property benefited thereby.
1. Covenant Regarding Specific Uses.
(a) Construction of Project. Developer covenants and agrees for itself, its
successors, assigns, and every successor in interest to Developer's interest in the Property or any
part thereof, that within the times set forth in the Schedule of Performance attached to the
Agreement as Attachment 3 (the "Schedule of Performance"), Developer shall commence,
diligently proceed with, and satisfactorily complete construction of the Project so as to entitle
Developer to the Agency's issuance of a Release of Construction Covenants for the Project as
provided for in Section 2.8 of the Agreement. The foregoing covenant shall be deemed satisfied
and shall terminate upon the Agency's issuance of a Release of Construction Covenants.
(b) Operation of Project. For a term (the "Term") commencing upon the
Effective Date hereof and ending on the tenth (10a') anniversary of the date of recording of the
Release of Construction Covenants for the Project (the "Operating Covenant Termination Date"),
the Developer hereby covenants and agrees to devote the Property for the exclusive purpose and
use of development and operation of the Project and will comply with the other obligations
contained herein. Notwithstanding anything herein to the contrary, the nondiscrimination
covenants contained in subdivision (a) of Section 4 hereof shall run with the land in perpetuity
and shall not terminate on the Operating Covenant Termination Date. Except as provided below,
or with the prior written consent of the Agency for each instance, which consent may be granted
or withheld in the Agency's sole and absolute discretion, the failure of the Developer (or its
tenant) to operate any portion of the Project on the Property as required herein for thirty (30) or
more consecutive days shall, at the Agency's option, constitute a default hereunder; provided,
however, that the Developer shall for purposes of this Section 1 be deemed to be operating such
portion of the Project during any period that the Developer is prevented from operating such
portion due to (i) required or necessary rehabilitation of such portion of the Project (provided
that the period during which such portion of the Project is not operated as a result of the
rehabilitation shall in no event exceed thirty (30) days), unless the rehabilitation cannot
reasonably be completed within such thirty (30) day period, in which case the period may extend
as necessary for completion, provided such rehabilitation was commenced within the thirty (30)
period and is diligently pursued to completion or (ii) war; insurrection; strikes; lockouts; riots;
floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics;
quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or
priority; litigation; unusually severe weather; inability to secure necessary labor, materials or
tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other party; or
acts or failures to act of the City or Agency other public or governmental agency or entity.
Notwithstanding anything to the contrary herein, (a) an extension of time for any cause listed in
romanette (ii) above shall be for the period of the enforced delay and shall commence to run
882/015610-0057
1102564 05 a07/02/10 -2-
from the time of the commencement of the cause, if notice by the Developer is sent to the other
party within ten (10) days of the commencement of the cause, and (b) Developer is not entitled
pursuant to this Section 1 to an extension of time to perform because of past, present, or future
difficulty in obtaining financing necessary to operate the Project because of economic or market
conditions.
Notwithstanding anything herein to the contrary, in the event that at any time after the
Effective Date hereof (1) General Motors, LLC, a Delaware limited liability company ("General
Motors"), ceases to exist, or (2) General Motors terminates the franchise agreement with respect
to either or both of the Chevrolet or Cadillac automobile dealerships required to be operated on
the Property pursuant to this Operating Covenant, through no fault of the Developer, then this
Operating Covenant shall automatically terminate; provided, however, that if General Motors
terminates only one of the two franchise agreements as described in clause (2) above, then this
Operating Covenant shall only terminate with respect to the automobile dealership covered by
such terminated franchise agreement.
2. Performance of Maintenance.
(a) Developer shall maintain the Project, the Property and all "improvements"
(as defined hereinafter) thereon in accordance with the Maintenance Standards, as hereinafter
defined. As used herein, the term "Improvements" shall mean and include, but not be limited to,
buildings, sidewalks, pedestrian lighting, landscaping, irrigation of landscaping, architectural
elements identifying the Property and any and all other improvements on the Property.
(b) To accomplish said maintenance, Developer shall either staff or contract
with and hire licensed and qualified personnel to perform the maintenance work, including the
provision of labor, equipment, materials, support facilities, and any and all other items necessary
to comply with the requirements of this Operating Covenant.
(c) The following standards ("Maintenance Standards") shall be complied
with by Developer and Developer's maintenance staff, contractors or subcontractors:
1. Landscape maintenance shall include, but not be limited to:
watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning;
trimming and shaping of trees and shrubs to maintain a healthy, natural appearance and safe road
conditions and visibility, and irrigation coverage; replacement, as needed, of all plant materials;
control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking
for support of trees.
2. Clean-up maintenance shall include, but not be limited to:
maintenance of all sidewalks, paths and other paved areas in clean and weed -free condition;
maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or
unsightly; removal of all trash, litter and other debris from improvements and landscaping prior
to mowing; clearance and cleaning of all areas maintained prior to the end of the day on which
the maintenance operations are performed to ensure that all cuttings, weeds, leaves and other
debris are properly disposed of by maintenance workers.
882/015610-0057
1102564.05 .07/02/10 _3_
3. All maintenance work shall conform to all applicable federal and
state Occupational Safety and Health Act standards and regulations for the performance of
maintenance.
4. Any and all chemicals, unhealthful substances, and pesticides used
in and during maintenance shall be applied in strict accordance with all governing regulations.
Precautionary measures shall be employed recognizing that all areas are open to public access.
5. The Project and Property shall be maintained in conformance and
in compliance with the approved Property construction and architectural plans and design
scheme, as the same may be amended from time to time with the approval of the City, and
reasonable commercial development maintenance standards for similar projects, including but
not limited to: painting and cleaning of all exterior surfaces and other exterior facades
comprising all private improvements and public improvements to the curbline.
6. The Project and Property shall be maintained as required by this
Section in good condition and in accordance with current factory standards of General Motors
for General Motors automobile dealerships, as determined by the Dealer Development Division
of General Motors factory standards (the "General Motors Standards").
3. Failure to Maintain Property.
In the event Developer does not maintain the Property in the manner set forth herein and
in accordance with the Maintenance Standards, Agency shall have the right to maintain such
private and/or public improvements, or to contract for the correction of such deficiencies, after
written notice to Developer. However, prior to taking any such action, Agency agrees to notify
Developer in writing if the condition of the Project or Property do not meet with the Maintenance
Standards and to specify the deficiencies and the actions required to be taken by Developer to
cure the deficiencies. Upon notification of any maintenance deficiency, Developer shall have
thirty (30) days within which to correct, remedy or cure the deficiency. If the written notification
states the problem is urgent relating to the public health and safety of the City, then Developer
shall have forty-eight (48) hours to rectify the problem.
In the event Developer fails to correct, remedy, or cure (or for deficiencies which cannot
reasonably be corrected, remedied, or cured within thirty (30) days has failed to commence
correcting, remedying or curing such maintenance deficiency and diligently pursue such
correction, remedy, or cure to completion) after notification and after the period of correction has
lapsed, then Agency shall have the right to maintain such improvements. Developer agrees to
pay Agency such charges and costs. Until so paid, the Agency shall have a lien on the Property
for the amount of such charges or costs, which lien shall be perfected by the recordation of a
"Notice of Claim of Lien" against the Property. Upon recordation of a Notice of a Claim of Lien
against the Property, such lien shall constitute a lien on the fee estate in and to the Property prior
and superior to all other monetary liens except: (i) all taxes, bonds, assessments, and other levies
which, by law, would be superior thereto; (ii) the lien or charge of any mortgage, deed of trust, or
other security interest then of record made in good faith and for value, it being understood that
the priority of any such lien for costs incurred to comply with this Agreement shall date from the
882/015610-0057
1102564,05 .07/02/10 -4-
date of the recordation of the Notice of Claim of Lien. Developer shall be liable for any and all
attorneys' fees, and other legal costs or fees incurred in collecting said maintenance costs.
4. Compliance with Law. Developer shall comply with all local, state and federal
laws relating to the uses of or condition of the Property and the Project. The operation of the
Project shall be in compliance with the requirements of any entitlements issued by the City for
the Project, including, as applicable, a conditional use permit, site development permit, and
specific plan amendment.
(a) Nondiscrimination Covenants. Developer covenants by and for itself and
any successors in interest to all or any portion of the Property that there shall be no
discrimination against or segregation of any person or group of persons on account of race, color,
creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer,
use, occupancy,. tenure or enjoyment of the Property, nor shall Developer itself or any person
claiming under or through it establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, subleases or vendees of the Property. The foregoing covenants shall run
with the land.
Developer shall refrain from restricting the rental, sale or lease of the Property any
portion thereof on the basis of race, color, religion, sex, marital status, ancestry or national origin
of any person. All such deeds, leases or contracts shall contain or be subject to substantially the
following nondiscrimination or nonsegregation clauses:
(1) In deeds: "The grantee herein covenants by and for himself or
herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or
through them, that there shall be no discrimination against or segregation of, any person or group
of persons on account of race, color, creed, religion, sex, marital status, national origin or
ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land
herein conveyed, nor shall the grantee or any person claiming under or through him or her,
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees in the land herein conveyed. The foregoing covenants shall run with the land."
(2) In leases: "The lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or
through him or her, and this lease is made and accepted upon and subject to the following
conditions:
"That there shall be no discrimination against or segregation of any person or group of
persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry
in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises
herein leased nor shall the lessee himself or herself, or any person claiming under or through him
or her, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased."
882/015610-0057
1102564.05 .07/02/10 -5-
(3) In contracts: "There shall be no discrimination against or
segregation of, any person, or group of persons on account of race, color, creed, religion, sex,
marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person
claiming under or through him or her, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees of the premises."
(b) No Violation of Statutes Relating to Relocation of Vehicle Dealerships. Until the
Operating Covenant Termination Date, Developer shall not take any action that would result in a
violation by the Agency and/or City of California Government Code Section 53084 or Health &
Safety Code Section 33426.7. Developer further agrees to indemnify, defend, and hold harmless
the Agency and City from and against any claims, proceedings, losses, costs, or expenses
incurred as a result of any such violation arising out of actions by Developer.
(c) No Violation of Statutes Relating to Direct Assistance by Agency. Developer
represents and warrants that it is using the Agency financial assistance for the sole and exclusive
purpose of causing the construction of the Project on the Property and for no other purpose and
that the Agency's financial assistance shall not be used in a manner that would constitute a
violation of Health & Safety Code section 33426.5. Developer further agrees to indemnify,
defend, and hold harmless the Agency or City from and against any claims, proceedings, losses,
costs, or expenses incurred as a result of any such violation arising out of actions by Developer.
5. Sales and Use Tax Covenant. From the date this Operating Covenant is
recorded against the Property until the Operating Covenant Termination Date, Developer shall
designate the Property as the point of sale for sales tax purposes in all retail sales and lease
contracts for vehicles, parts, and equipment, and all other goods sold or leased on the Property,
whose sales and leases originate from the Property.
6. Covenant to Pay Taxes and Assessments. From the date this Operating
Covenant is recorded against the Property until the Operating Covenant Termination Date,
Developer shall pay or cause to be paid, prior to delinquency, all ad valorem real estate taxes,
special taxes, and assessments levied against the Property and any improvements thereon, subject
to Developer's right to contest any such tax or assessment in good faith. During such period
Developer shall remove or have removed any levy or attachment made on the Property or any
part thereof or assure the satisfaction thereof within a reasonable time and prior to a sale of the
Property.
7. Defaults.
(a) Failure or delay by either party to perform any term or provision of this
Operating Covenant constitutes a default under this Operating Covenant. A party claiming a
default shall give written notice of default to the other party, specifying the default complained
of and the actions required to correct such default.
(b) Unless otherwise provided by the Agreement, the claimant shall not
institute proceedings against the other party if the other party within thirty (30) days from receipt
882/015610-0057
1102564.05.07/02/10 -6-
of such notice immediately, with due diligence, commences to cure, correct or remedy such
failure or delay and completes such cure, correction or remedy as soon as reasonably practicable
after receipt of such notice.
(c) This Operating Covenant and the Developer's obligations hereunder are
secured by a Deed of Trust With Assignment of Rents and Rider Attached Hereto ("Deed of
Trust"), which has been entered and recorded on approximately the same date as this Operating
Covenant.
8. Legal Actions.
(a) In addition to any other rights or remedies and subject to the notice and
cure provisions in Section 7 above, any party may institute legal action to seek specific
performance of the terms of this Operating Covenant, or to cure, correct or remedy any default,
or to obtain any other legal or equitable remedy consistent with the purpose of this Operating
Covenant. The Agency shall also have the right to pursue damages for Developer's defaults, but
in no event shall Developer be entitled to damages of any kind from Agency, including, without
limitation, damages for economic loss, lost profits, or any other economic or consequential
damages of any kind. Such legal actions must be instituted in the Superior Court of the County
of Riverside, State of California or in the Federal District Court in the Central District of
California. In the event of any litigation between the parties hereto, the prevailing party shall be
entitled to receive, in addition to the relief granted, its reasonable attorney's fees and costs and
such other costs incurred in investigating the action and prosecuting the same, including costs for
expert witnesses, costs on appeal, and for discovery.
(b) The internal laws of the State of California shall govern the interpretation
and enforcement of this Operating Covenant, without regard to conflict of laws.
(c) In the event that any legal action is commenced by the Developer against
the Agency, service of process on the Agency shall be made by personal service upon the
Executive Director of the Agency in addition to such other manner as may be provided by law.
(d) In the event that any legal action is commenced by the Agency against the
Developer, service of process on the Developer shall be made by personal service upon any
officer or director of Developer, whether made within or outside the State of California, or in
such other manner as may be provided by law.
(e) Except as otherwise expressly stated in this Operating Covenant, the rights
and remedies of the parties are cumulative, and the exercise by either party of one or more of
such rights or remedies shall not preclude the exercise by it, at the same or different times, of any
other rights or remedies for the same default or any other default by the other party.
(f) Any failures or delays by either party in asserting any of its rights and
remedies as to any default shall not operate as a waiver of any default or of any such rights or
remedies, or deprive either such party of its right to institute and maintain any actions or
proceedings which it may deem necessary to protect, assert or enforce any such rights or
remedies.
882/015610-0051
1102564.05 a07/02/10 -�
9. Effect of Violation of the Terms and Provisions of this Operating Covenant.
The covenants established in this Operating Covenant shall, without regard to technical
classification and designation, be binding for the benefit and in favor of the Agency and the City
of La Quinta ("City"), and each of their successors and assigns, as to those covenants which are
for their benefit. The covenants contained in this Operating Covenant shall remain in effect for
the periods of time specified therein. The Agency and City are deemed the beneficiary of the
terms and provisions of this Operating Covenant and of the covenants running with the land, for
and in their own rights and for the purposes of protecting the interests of the community and
other parties, public or private, in whose favor and for whose benefit this Operating Covenant
and the covenants running with the land have been provided. This Operating Covenant and the
covenants shall run in favor of the Agency and the City, without regard to whether the Agency or
City have been, remain or are an owner of any land or interest therein in the Property. The
Agency and City shall have the right, if the Operating Covenant or covenants are breached, to
exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other
proper proceedings to enforce the curing of such breaches to which they or any other
beneficiaries of this Operating Covenant and covenants may be entitled. Pursuant to applicable
law, including, but not limited to, Section 1462, 1465 and 1468 of the Civil Code of the State of
California, all provisions of this Covenant Agreement shall run with the land and be binding upon
and inure to the benefit of the Benefited Public Property and the Property and each and every
portion thereof or interest therein, and all parties having or acquiring any right, title, or interest in
the Property or any portion thereof, and their successors and assigns
10. Miscellaneous Provisions.
(a) If any provision of this Operating Covenant or portion thereof, or the
application to any person or circumstances, shall to any extent be held invalid, inoperative or
unenforceable, the remainder of this Operating Covenant, or the application of such provision or
portion thereof to any other persons or circumstances, shall not be affected thereby; it shall not
be deemed that any such invalid provision affects the consideration for this Operating Covenant;
and each provision of this Operating Covenant shall be valid and enforceable to the fullest extent
permitted by law.
(b) This Operating Covenant shall be construed in accordance with the
internal laws of the State of California without regard to conflict of law principles.
(c) This Operating Covenant shall be binding upon and inure to the benefit of
the successors and assigns of the Developer but any Transfer shall be subject to the requirements
and provisions of Section 7 of the Agreement.
(d) The City of La Quinta is a third party beneficiary of the terms of this
Operating Covenant, and shall have the right, but not the obligation, to enforce the terms hereof.
11. Notices. All notices under this Agreement shall be effective (i) upon personal
delivery, (ii) upon delivery by reputable overnight courier that provides a receipt with the date
and time of delivery, (iii) via facsimile, so long as the sender receives confirmation of successful
transmission from the sending machine, or (iv) three (3) business days after deposit in the United
States mail, registered or certified, postage fully prepaid and addressed to the respective parties
882/015610-0057
1102564.05 a07/02/10 _8_
as set forth below or as to such other address as the parties may from time to time designate in
writing:
To Agency: Notices Delivered by U.S. Mail:
La Quinta Redevelopment Agency
P.O. Box 1504
La Quinta, CA 92247
Phone No.: 760-777-7031
Facsimile No.: 760-777-7101
Attention: Executive Director
Notices Delivered Personally or by Courier:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, California 92253
Phone No.: 760-777-7031
Facsimile No.: 760-777-7101
Attention: Executive Director
With a copy to: Rutan & Tucker, LLP
611 Anton, Suite 1400
Costa Mesa, CA 92626
Phone No.: 714-641-5100
Facsimile No.: 714-546-9035
Attention: M. Katherine Jenson, Esq.
To Developer: Garff Properties -La Quinta, LLC
405 South Main Street, Suite 1200
Salt Lake City, UT 84111
Phone No.: 801-257-3402
Facsimile No.: 801-257-3460
Attention: John Garff
and
Garff Enterprises, Inc.
405 South Main Street, Suite 1100
Salt Lake City, UT 84111
Phone No.: 801-257-3412
Facsimile No.: 801-257-3400
Attention: Tony Kraatz
With a copy to: Garff Enterprises, Inc.
405 South Main Street, Suite 1200
Salt Lake City, UT 84111
Phone No.: 801-257-3468
Facsimile No. 801-428-1968
Attention: Michael D. Creer, Esq.
882/015610-0057 _
1102564 05 OV02/10 -9
IN WITNESS WHEREOF, the parties hereto has executed this instrument the day and
year first hereinabove written.
Date: 1,, a 12010
"Developer"
GARFF PROPERTIES -LA QUINTA, LLC,
a Utah limited liability company
By: !�
Its: Q^w
"Agency"
LA QUINTA REDEVELOPMENT
AGENCY, a public body, corporate and
poli '
�^
Date liL 2010
Executive Director
Agency, -Secret f
APPROVED AS TQFORM:
R & Tl' LIB
114
Afene
y Counsel
8821015610-0057
1102564 05 a07/02/10 -� �-
State of Utah 1 )
County of Scc w -4!C
On JOI l7 before me, T I , BDk r�eol S Notary Public,
1. 1 1. n nn
personally appeared
/nf
who proved to me on the basis of satisfactory evidence to be the peWon(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
certify under PENALTY OF PERJURY under the laws of the State of Utah that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature C l
(seal) 92M
GEOfS pp y�� TAH, UT 8411910/OS/2011
State of California )
County ofi�uSb�o� )
On rl 3 2 o i o before me, Notary Public,
n here m ert name and titleof the office
personally appeared �,er. n t' eQ-"a1A-
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature 9Qi o
(seal)
MUM
CWM*Ibn
�Y N1bk
RWwube
E*:W-
CMMn. 6"Pk167,201
882/015610-0057
1102564,05 a07/02/10
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
All that property located in the City of La Quinta, County of Riverside, State of
California, described as follows:
PARCEL 3 OF PARCEL MAP 28525-1, AS SHOWN BY MAP ON FILE IN
BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA.
ASSESSOR'S PARCEL NUMBER 600-020-014.
882/015610-0057
1102564.05 a07/02/10 - Z-
EXHIBIT `B"
LEGAL DESCRIPTION OF BENEFITED PUBLIC PROPERTY
North La Quinta Park
Adams Park
Centre Pointe Dog Park
City Hall
City Library
Senior Center
Boys and Girls Club
Sports Complex
YMCA
Seasons Park
Fritz Burns Park
North East Corner of Westward Ho & Dune Palms
South West Corner of Adams Street & La Palma
South East Corner of Seeley Drive & Miles Avenue
South West Corner of Washington Street & Calle Tampico
78-275 Calle Tampico
78-450 Avenida La Fonda
North West Corner of Park Avenue & Avenue 50
North West Corner Park Avenue & Avenue 50
North West Corner of Park Avenue & Avenue 50
Cloud View Way & Calle Las Ramblas
South East Corner of Avenida Bermudas & Avenue 52
Highway 111, from Adams Street to Dune Palms Road
Dune Palms Road, from Avenue 48 to Highway I I I
Adams Street, from La Quinta Centre Drive to Highway 111
La Quinta Centre Drive, from Adams Street to Highway 111
1821015610-0057
1102564. 05.07/02/10 -13-
DOC # 2010-0378794
08/12/2010 08:00A Fee:NC
Page 1 of 10
PLEASE COMPLETE THIS INFORMATION Recorded in Official Records
RECORDING REQUESTED BY: County of Riverside
Larry W. Ward
VERONICA J. MONTECINO, City Clerk Assessor, County Clerk g Recorder
AND WHEN RECORDED MAIL TO: I IIIIII IIIIIII (III IIIIII IIIII IIII IIIIII III IIIII IIII IIII
CITY OF LA QUINTA
Attn: Veronica J. Montecino S R U I PAGE SIZE I DA MISC LONG RFD COPY
P O Box 1504 a I O
La Quinta, CA 92247 exam
M AL 466 1 426 PCOR NCOR SMF N H ?
(J�( Od) T. CTY UNI ��
SPACE ABOVE FOR RECORDER'S USE ONLY
DEED OF TRUST WITH ASSIGNMENT OF RENTS AND 030
RIDER ATTACHED HERETO
Title of Document
THIS AREA FOR
RECORDERS
USE ONLY
THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION
($3.00 Additional Recording Fee Applies)
Recording Requested by and
When recorded mail to:
La Quinta Redevelopment Agency
P.O. Box 1504
La Quinta, CA 92247
Attn: Executive Director
Or
SPACE ABOVE THIS LINE FOR RECORDER'S USE
EXEMPT FROM RECORDING FEE PER GOV. CODE SECTION 27383
DEED OF TRUST WITH ASSIGNMENT OF RENTS AND
RIDER ATTACHED HERETO
NOTE: RIDER ATTACHED TO THIS DEED OF TRUST
This DEED OF TRUST WITH ASSIGNMENT OF RENTS AND RIDER ATTACHED
HERETO ("Deed of Trust"), is made "SJ_y 2.-n , 2010, between GARFF
PROPERTIES -LA QUINTA, LLC, a Utah limited li bility company, herein called TRUSTOR,
whose address is 405 South Main Street, Suite 1200, Salt Lake City, UT 84111,
First American Title Company a California corporation, herein
called TRUSTEE, whose address is 10535 Foothill Blvd #282 Rancho Cucamonga CA, and
LA QUINTA REDEVELOPMENT AGENCY, 78-495 Calle Tampico, La Quinta, California
92253, a public body, corporate and politic, herein called BENEFICIARY.
WITNESSETH: That Truster grants to Trustee in trust, with power of sale, Trustor's fee
interest in that property in the City of La Quinta, County of Riverside, State of California,
described as:
PARCEL 3 OF PARCEL MAP 28525-1, AS SHOWN BY MAP ON FILE IN
BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA.
ASSESSOR'S PARCEL NUMBER 600-020-014.
together with the rents, issues and profits thereof, subject, however, to the right, power and
authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents,
issues and profits for the purpose of securing (1) payment of the sum of up to TWO MILLION
THREE HUNDRED THOUSAND DOLLARS ($2,300,000) with interest thereon according to
the terms of a promissory note or notes of even date herewith made by Trustor, payable to order
of Beneficiary, and extensions or renewals thereof; (2) the performance of each agreement of
Trustor incorporated by reference or contained herein; and (3) payment of additional sums and
interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when
evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust.
To protect the security of this Deed of Trust, and with respect to the Property above described,
Trustor expressly makes each and all of the agreements, and adopts and agrees to perform and be
882/015610-0057 -1-
1102564.05 OVUM
bound by each and all of the terms and provisions set forth in subdivision A, and it is mutually
agreed that each and all of the terms and provisions set forth in subdivision B of the fictitious
deed of trust recorded in Orange County August 17, 1964, and in all other counties August 18,
1964, in the book and at the page of Official Records in the office of the county recorder of the
county where said property is located, noted below opposite the name of such county, namely:
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
COUNTY
BOOK
PAGE
Alameda
1288
556
Kings
858
713
Placer
1028
379
Sierra
38
187
Alpine
3
130-
Lake
437
110
Plumas
166
1307
Siskiyou
506
762
31
Amador
133
438
Lassen
192
367
Riverside
3778
347
Solano
1287
621
Butte
1330
513
Los
T-
874
Sacramento
5039
124
Sonoma
2067
427
Angeles
3878
Calaveras
185
338
Madera
911
136
San Benito
300
405
Stanislaus
1970
56
Colusa
323
391
Mmin
1849
122
San
6213
768
Sutter
655
585
Bernardino
Contra
4684
1
Mariposa
90
453
San
A-804
596
Tehama
457
183
Costa
Francisco
Del Norte
101
549
Mendocino
667
99
San
2855
283
Trinity
108
595
Joaquin
El Dorado
704
635
Merced
1660
753
San Luis
1311
137
Tulare
108
Obispo
Fresno
5052
623
Modoc
191
93
San Mateo
4778
175
Tuolumne160
Glenn
469
76
Mono
69
302
Santa
2065
881
Ventura
237
Barbara
K398
Humboldt
801
83
Monterey357
239
Santa Clara
6626
664
Yolo
16
Imperial
1189
701
Napa
704
742
Santa Cruz
1638
607
Yuba
693
In o
165
672
Nevada
363
94
Shasta
800
633
Kern
3756
690
Orange
7182
18
San Diego
SERIES
5 Book
1964,
Page
149774
shall inure to and bind the parties hereto, with respect to the property above described. Said
agreements, terms and provisions contained in said subdivisions A and B (identical in all
counties, and printed on pages 3 and 4 hereof) are by the within reference thereto, incorporated
herein and made a part of this Deed of Trust for all purposes as fully as if set forth at length
herein, and Beneficiary may charge for a statement regarding the obligation secured hereby,
provided the charge therefor does not exceed the maximum allowed by law.
The undersigned Trustor, requests that a copy of any notice of default and any notice of sale
hereunder be mailed to him at his address hereinbefore set forth.
882/015610-0057 -2-
1102564 05 a07/02/10
SEE RIDER ATTACHED TO THIS DEED OF TRUST
"Trustor"
GARFF PROPERTIES -LA QUINTA, LLC,
a Utah limited liability company
Date:
2010
By:
Its:
ate•
882/015610-0657 -5-
1102564.05 .07/02/10
State of Utah )
County of 7tit
On �,AL1u a , aD )b , before me, 1 1V1rn ]L nuYd QOi 5 Notary Public,
personally appeared J dnh K G Gtf ' I MGLMR 610 r
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of Utah that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(seal)
i TINA BOURGEOIS
a NOTARY PUSUC • STATE OF UTAN
3869SOU1H 2100 WEST
�J WECV�Al1EY C1fl; /0054179
savor 5610-0057 _6_
1102564.05 e07/02/M
RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS
This RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is
entered into this � day of S�, 2010, by and between GARFF PROPERTIES -
LA QUINTA, LLC, a Utah limited li ility company, herein "Trustor," herein "Trustee," and
LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, herein
"Beneficiary," the same parties to that certain form Deed of Trust With Assignment of Rents, of
even date hereto, to which this Rider is attached. This Rider is made a part of and is
incorporated into the form Deed of Trust. This Rider shall supersede any conflicting term or
provision of the form Deed of Trust to which it is attached.
Reference is made to:
a. The Owner Participation Agreement by and between Trustor as
"Developer" and Beneficiary as "Agency" dated on or about -S-,J v l3 ,
2010 (the "OPA") which sets forth terms and conditions for Borrower's redevelopment of the
real property legally described in Exhibit "A" to this Deed of "Crust ("Property");
b. The Promissory Note of even date herewith, in the Principal amount of up
to Two Million Three Hundred Thousand Dollars ($2,300,000), with Trustor as 'Borrower" and
Beneficiary as "Agency" or "Lender" ("Note"), which Notes is secured by this Deed of Trust.
The parties hereto agree:
C. The Operating Covenant of even date herewith with Trustor as
"Developer" and Beneficiary as "Agency" (the "Operating Covenant") which sets forth Trustor's
obligations to ensure the continuous operation of Cadillac and Chevrolet automobile dealerships
on the Property for a period of ten (10) years after completion of Trustor's redevelopment of the
Property.
1. Obligations Secured. Trustor makes this grant and assignment for the purpose of
securing the following obligations ("Secured Obligations"):
a. Payment to Beneficiary of all indebtedness at any time owing under the
terms of the Note;
Trust;
Payment and performance of all obligations of Trustor under this Deed of
C. Payment and performance of all obligations of Trustor under the OPA;
d. Payment and performance of all future advances and other obligations of
Trustor or any other person, firm, or entity with the approval of Trustor, may agree to pay and/or
perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when the
obligation is evidenced by a writing which recites that it is secured by this Deed of Trust; and
C. All modifications, extensions and renewals of any of the obligations
secured hereby, however evidenced.
882/0156IM057
1102564.05 .07/02/10 -8-
2. Obligations. The term "obligations" is used herein in its broadest and most
comprehensive sense and shall be deemed to include, without limitation, all interest and charges,
prepayment charges, late charges and fees at any time accruing or assessed on any of the Secured
Obligations.
3. Incorporation. All terms of the Secured Obligations are incorporated herein by
this reference. All persons who may have or acquire an interest in the Property shall be deemed
to have notice of the terms of the Secured Obligations and to have notice that, if provided
therein, the Note or the OPA may permit borrowing, repayment and re -borrowing.
4. Mortgagee -in -Possession. Neither the assignment of rents set forth in the Deed of
Trust nor the exercise by Beneficiary of any of its rights or remedies hereunder shall be deemed
to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with respect
to the Property, unless Beneficiary, in person or by agent, assumes actual possession thereof.
Nor shall appointment of a receiver for the Property by any court at the request of Beneficiary or
by agreement with Trustor, or the entering into possession of the Property by such receiver, be
deemed to make Beneficiary a "mortgagee -in -possession" or otherwise liable in any manner with
respect to the Property.
5. No Cure. In the event Beneficiary collects and receives any rents under the Deed
of Trust upon any default hereof, such collection or receipt shall in no way constitute a curing of
the default.
6. Possession Upon Default. Upon the occurrence of a default, Beneficiary may, at
its option, without any action on its part being required and without in any way waiving such
default, take possession of the Property and have, hold, manage, lease and operate the same, on
such terms and for such period of time as Beneficiary may deem proper, and may collect and
receive all rents and profits, with full power to make, from time to time, all alterations,
renovations, repairs or replacements thereto as may seem proper to Beneficiary, and to apply
such rents and profits to the payment of (a) the cost of all such alterations, renovations, repairs
and replacements, and all costs and expenses incident to taking and retaining possession of the
Property, and the management and operation thereof, and keeping the same properly insured; (b)
all taxes, charges, claims, assessments, and any other liens which may be prior in lien or payment
of the Note, and premiums for insurance, with interest on all such items; and (c) the indebtedness
secured hereby, together with all costs and attorney's fees, in such order or priority as to any of
such items as Beneficiary in its sole discretion may determine, any statute, law, custom or use to
the contrary notwithstanding. Any amounts received by Beneficiary or its agents in the
performance of any acts prohibited by the terms of this assignment, including, but not limited to,
any amounts received in connection with any cancellation, modification or amendment of any
lease prohibited by the terms of this assignment and any rents and profits received by Trustor
after the occurrence of a default shall be held by Trustor as trustee for Beneficiary and all such
amounts shall be accounted for to Beneficiary and shall not be commingled with other funds of
the Trustor. Any person receiving any portion of such trust funds shall receive the same in trust
for Beneficiary as if such person had actual or constructive notice that such funds were
impressed with a trust in accordance therewith.
882/015610-0057
1102564,05 a07/02/10 -9-
7. Receiver. In addition to any and all other remedies of Beneficiary set forth under
this Deed of Trust or permitted at law or in equity, if a default shall have occurred, Beneficiary,
to the extent permitted by law and without regard to the value, adequacy or occupancy of the
security for the Note and other sums secured hereby, shall be entitled as a matter of right if it so
elects to the appointment of a receiver to enter upon and take possession of the Property and to
collect all rents and profits and apply the same as the court may direct, and such receiver may be
appointed by any court of competent jurisdiction by ex parte application and without notice,
notice of hearing being hereby expressly waived. The expenses, including receiver's fees,
attorneys' fees, costs and agent's compensation, incurred pursuant to the power herein contained
shall be secured by this Deed of Trust.
8. Subordination. The Beneficiary acknowledges and agrees that the this Deed of
Trust is and shall be subject and subordinate to the "Komerstone Deed of Trust" (as defined in
the OPA) and to all renewals, modifications, consolidations, replacements, and extensions
thereof, provided the maximum cumulative principal amount of the loan secured by any such
renewal, modification, consolidation, replacement, or extension, when added to the outstanding
principal balance due under the Note, shall not exceed ninety percent (90%) of the lender's
appraised value of the Property upon completion of the rehabilitation project required under the
OPA, which amount shall be verified in writing to Beneficiary's Executive Director's reasonable
satisfaction. In addition, notwithstanding anything herein to the contrary, Beneficiary agrees to
subordinate this Deed of Trust to any subsequent deed of trust recorded against the Property
relating to any take-out or permanent financing or refinancing thereof obtained by Trustor,
provided the maximum cumulative principal amount secured by any such take-out or permanent
financing, when added to the outstanding principal balance due under the Note, shall not exceed
ninety percent (90%) of the lender's appraised value of the Property.
9. Notice to Beneficiary. Notices to Beneficiary shall be sent to Beneficiary
addressed to:
To Agency: Notices Delivered by U.S. Mail:
La Quinta Redevelopment Agency
P.O. Box 1504
La Quinta, CA 92247
Phone No.: 760-777-7031
Facsimile No.: 760-777-7101
Attention: Executive Director
Notices Delivered Personally or by Courier:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, California 92253
Phone No.: 760-777-7031
Facsimile No.: 760-777-7101,
Attention: Executive Director
[signatures on next page]
882/015610-0057
1102564.05 .07/02/10 - t �-
IN WITNESS WHEREOF, Trustor has executed this Rider on the date of Trustor's
acknowledgment hereinbelow, to be effective for all purposes as of the day and year first set
forth above.
"Trustor"
GARFF PROPERTIES -LA QUINTA, LLC,
a Utah limited liability company
Date: 2010 By:
Its:
882/01561M057
1102564,05 a07/02/10 - L t-
State of Utah
County of se4w LAk P )
On �0 before me, tyle�' &(-trc e c> s Notary Public,
personally appeared GCICFP I10tHe, aQr
who proved to me on the basis of satisfactory evidence to be the pe son(s) whose name(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of Utah that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature C�ti"" 5 OL4^2f �
(seal)
TINA BOURGEOIS
•"' NOTARY PUBLIC • STATE OF UTAN
li TIN SOUTH 2100 WEST
WEST VALLEY CITY, UT 84119
My Comm. Exp. 1010512011
882/015610-0057
1102564 05 a07/02110 -12-
cz- 4�q89,57
A'Ten recorded, return to:
Zions First National Bank
2460 South 3720 West
West Valley City, UT 84119
Attn: Loan Servicing Group
0?- 6P13 97
DOC #1',2011-0032777
01/21/2011 0a:23R Fee:NC
Page t of 5
Recorded In Official Records
Comty of Riverside
Larry U. Ward
Assessor, County Clerk a Recorder
11111111111111111111111111111111111111111111111111 IN
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CTY
UNI
SUBORDINATION AGREEMENT
This Subordination Agreement is made and entered into this 30, day of'Dec , 20 10,
by La Quinta Redevelopment Agency ("Subordinator").
RECITALS:
WHEREAS, Garff Properties-I.a Quinta, LLC ("Borrower") has obtained or may obtain a
loan from Zions First National Bank ("Zions") in the principal amount of $3,120,000.00 (the
"Loan") to be secured by a Trust Deed covering certain real property (the "Property") located in the
City of La Quinta, County of Riverside, State of California, more particularly described as follows:
Parcel 3 of Parcel Map 28525-1, as shown by map on file in Book 193 Page(s) 85, 86 and 87
of Parcel Maps, Records of Riverside County, California.
Assessor's Parcel Number 600-020-014
The lien established by said Trust Deed is hereafter referred to as the "Senior Trust Deed";
WHEREAS, Subordinator has a security interest in the Property evidenced by that certain
Trust Deed executed and delivered by Garff Properties -La Quints, LLC, a Utah limited liability
company, as Trustor, to First American Title Company, as Trustee, and La Quinta Redevelopment
Agency, as Beneficiary, dated July 2, 2010 and recorded August 12, 2010 as Instrument No. 2010-
0378794 in the records of County of Riverside, State of California (the "Subordinate Trust Deed");
WHEREAS, as inducement to Zions to make the Loan to Borrower, Subordinator is willing
to subordinate its lien interest in the Property represented by the Subordinate Trust Deed to the
security interest of Zions, as represented by the Senior Trust Deed, on the terms and conditions set
forth herein.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Subordinator hereby declares as follows:
1. The lien interest created by the Subordinate Trust Deed, together with any and all
rights, interest, title, estate, or lien against or respecting the Property by virtue of the Subordinate
Trust Deed, shall be and is hereby declared subordinate, inferior, and junior in priority to the Senior
Trust Deed.
2. In the event of foreclosure or exercise of any power of sale as set forth in the Senior
Trust Deed, the priority as herein established shall be respected to the same extent and in the same
manner as if the Senior Trust Deed had been executed, delivered and recorded prior to the execution,
delivery and date of recordation of the Subordinate Trust Deed, as such dates relate to the priorities
between the Senior Trust Deed and Subordinate Trust Deed.
SUBORDINATOR: La Quinta RedevelopmentAgency
0
Title:
STATE OF CALIFORNIA
COUNTY OF
On the day of
executed the foregoing document in
, 20_, person ally`@ppeared before me
o being by me duly sworn did aclm �Iledge that he/she
capacity as \ of
NOTARY PUBLIC
My commission expires:
IN WITNESS WHEREOF, the parties hereto has executed this instrument the day and
year first hereinabove written.
Date: -Dec-ember ;Q 2010
Date: 210 2010
ATTEST:
Agency S cretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Agency Counsel
Date: 7),e _. L� 3 n 12010
"Developer"
GARFF PROPERTIES -LA QUINTA, LLC,
a Utah limited liability company
� Tt
"Agency"
LA QUINTA REDEVELOPMENT
AGENCY, a public body, corporate and
politic
By ,�Y✓/ .�/yam.
Executive Director
"Lender"
MONS FIRST NATIONAL BANK
IR
By: ' / t-�(T— IC-11H,
Its: 5. Y.F.
State of California )
County of i21&' 11a ap )
On i'a' 2A l %bib before me, Ca, Q Y Notary Public,
r�f nn ere 1 ert name end tle of the =)
personally appeared oid�wv.a�f Y o A4k—)
who proved to me on the basis of satisfactory evidence to be the person(s) whose narne(s) is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
PHYLLIS UNLEY
Signature Conminlon • 904aular t
Notary PoWk Cat
Iuaenka County
(seal)MIUM0011A4
i • 1
State of C ,,�r�m�a' ���� )
County of
On 9-4 ber•eyni xr before me, lyiu `Sour cte oiS Notary Public,
(here insert name and title o officer)
personally appeared J5C76% spar ��
who proved to me on the basis of satisfactory evidence to be the person(a) whose name() is/are
subscribed to the within instrument, and acknowledged to me that he/she/they executed the same
in his/her/theiri<authorized capacity(ies), and that by his/her/Ib�ure($) on the instrument the
personjlly, or the entity upon behalf of which the person(sj acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
�
Signature C��f^"` OUA94&"
(seal)
'' TINA BOURGEOIS
��a N073865 SOUTH 21 pp y�� �
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WEST VN.LEY CffY. Ur 8d119 MY Comm.E .10/05/2011
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RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
Garff Enterprises, Inc.
405 South Main Street, Ste. 1200
Salt Lake City, UT 84111
Attention: Mr. John Garff
Ygl o12. /�'4t
#q4 t WV4 .
[Space above for Recorder.]This document is exempt from the payment of a recording fee
pursuant to Government Code Section 27383.
RELEASE OF CONSTRUCTION COVENANTS
This RELEASE OF CONSTRUCTION COVENANTS (the "Release") is made by the
CITY OF LA QUINTA, as Successor Agency to the former La Quinta Redevelopment Agency
(the "Successor Agency"), in favor of GARFF PROPERTIES -LA QUINTA, LLC, a Utah
limited liability company (the "Developer"), as of the date set forth below.
RECITALS
A. The La Quinta Redevelopment Agency and Developer entered into that certain
Owner Participation Agreement (the "OPA") dated JULY 13 , 2010 concerning the
redevelopment of certain real property situated in the City of La Quinta, California, as more fully
described in Exhibit "A" attached hereto and made a part hereof (the "Site").
B. On June 28, 2011, the Governor signed Assembly Bill 26 ("ABxI 26") and
Assembly Bill 27 ("ABxl 27") from the 2011-12 First Extraordinary Session of the California
Legislature. ABxI 26 immediately suspended all redevelopment agency activities, except
continued performance of "enforceable obligations," and set forth a process to dissolve
redevelopment agencies and end redevelopment in California. ABxI 27 provideda "voluntary
alternative redevelopment program," which would have allowed redevelopment agencies to
remain in existence and continue redevelopment, if remittance payments were made to cover the
State of California's budget shortfall for fiscal year 2011-12 and were made in subsequent fiscal
years to cover State costs. A lawsuit was filed, challenging the constitutionality of both ABxl 26
and 27. The California Supreme Court upheld the constitutionality of ABxl 26, revising the
effective dates of certain provisions, and struck down as unconstitutional ABxI 27. (California
Redevelopment Assn, v. Matosantos (2011) 53 Cal.4th 231 ("CRA Case"). ABxI 26 is chapter 5,
Statutes 2011, First Extraordinary Session, which added Part 1.8 (suspension provisions) and
Part 1.85 (dissolution provisions) of Division 24 of the Health and Safety Code. Under the CRA
Case, all redevelopment agencies dissolved February 1, 2012. Pursuant to Health and Safety
Code section 341710), added by Part 1.85 of Division 24, and City Council Resolution No.
2012-02, the City of La Quinta is the "Successor Agency" to the former Agency.
C. As referenced in Section 2.8 of the OPA, the Successor Agency is authorized and
required to furnish the Developer or its successors with a Release of Construction Covenants
upon completion of construction of the "Project" (as defined in the OPA), which Release is
required to be in such form as to permit it to be recorded in the Recorder's office of Riverside
882/015610-0057
3068885.2 a03/05/12
County. This Release is conclusive determination of satisfactory completion of the construction
and development of the Project.
D. The Successor Agency has conclusively determined that construction and
development of the Project has been satisfactorily completed.
NOW, THEREFORE, the Successor Agency hereby certifies as follows:
1. The Project to be constructed by the Developer has been satisfactorily completed
in accordance with the provisions of said OPA.
2. This Release of Construction Covenants shall not constitute evidence of
compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage or
any insurer of a mortgage, securing money loaned to finance the Project or any part thereof.
3. This Release of Construction Covenants is the release of construction covenants
referred to in, and satisfies the requirements of, Section 2.8 of the OPA for construction of the
Project.
4. This Release of Construction Covenants is not a Notice of Completion as referred
to in California Civil Code Section 3093.
5. Except as stated herein, nothing contained in this instrument shall modify in any
way any other provisions of the OPA or any other provisions any other documents executed
pursuant to the OPA, all of which shall remain enforceable according to their terms of the
documents incorporated therein.
BY WITNESS WHEREOF, the Agency and the Developer have signed this Release of
Construction Covenants as of the respective dates set forth below.
Date: M rn ro l ] (o 12012
Date: OVA& 2 2012
ATTEST:
1
Susan Maysels, Inter City Clerk
"Developer"
GARFF PROPERTIES -LA QUINTA, LLC,
a Utah limited liability company
By: --
Its:
JoNrJ c. GA RF
"Successor Agency"
CITY OF LA QUINTA, as Successor Agency
to the La rQ�uinta Redevelopment Agency
By: �, k '
Mark Weiss
Interim City Manager
882/015610-0057 _
3068885.2 a03/05/12 -2
APPROVED AS TO FORM:
RUTAN & TUCKER, LL
C 1 to he Succt Agency
882/015610-0057
3069885.2 a03/05/12 -3-
State of California
County of Riverside
On A c-H $1 2017^ before me, 5(A5A,N !vtAVSELS
(insert name and Title of the officer)
Notary Public, personally appeared MA W, K 44 r, I '
who proved to me on the basis of satisfactory evidence to be the person(e) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/shelthey executed the same
in his/her#heir authorized capacity(i4w), and that by his/h OffietiT signature(e) on the instrument
the person(s), or the entity upon behalf of which the person(&) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature O V
State ofG4weraj'ft (Aiah
County of4 wer44e Sa)V LAI:,.e
laws of the
SUg/lN.MAYSELS
:_:: , COMM. #t 844479 k
NOTARY PUBLIC • C NIF ORNIA
x RIVERSIDE COUNTY
�N C�APR 13, 2D13 +
(Seal)
On before me, Inc. T�orgec-k i
(in ert name and title of tS fficer)
Notary Public, personally appeared t��nln � Gc f 1�
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature JWA 3 (Seal)
INA BOURGE IS
NOTMFUSIM-STATE OF,MWCanm EXP.1W05/2Commssion O 64901016KTAM
892/015610-0057
30688852 a03/05/12 -4-
EXHIBIT "A"
LEGAL DESCRIPTION OF SITE
All that property located in the City of La Quinta, County of Riverside, State of
California, described as follows:
PARCEL 3 OF PARCEL MAP 28525-1, AS SHOWN BY MAP ON FILE IN
BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA.
ASSESSOR'S PARCEL NUMBER 600-020-014.
882/015610-0057 _
3068885.2 a03/05/12 -5