2012 Mega Dealer & Torre, Inc. - RDA Loan 11 & Storm Water Mgmt BMP 2012-001OWNER PARTICIPATION AGREEMENT
by and among
LA QUINTA REDEVELOPMENT AGENCY
a public body, corporate and politic
and
MEGA DEALER, LLC,
a California limited liability company
and
ROBERT N. LA TORRE, INC.,
a California corporation
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TABLE OF CONTENTS
Page
1. RECITALS INCORPORATED.......................................................................................
2
2. DEVELOPMENT
OF THE SITE....................................................................................2
2.1
Description of the Project.........................................................................:...........2
2.2
Project Entitlements..............................................................................................3
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; Source of Funds ....................... 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...........................................................................................................12
5.7 Applicable Law...................................................................................................12
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...............................................................
16
7.4
Successors and Assigns......................................................................................16
7.5
Subordination......................................................................................................16
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Page
8. INDEMNIFICATION OF AGENCY.............................................................................17
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
orLessee.............................................................................................................18
9.4
Relationship Between Agency, Developer, and Lessee.....................................18
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 ........... :..........................................................................................
19
9.12
Severability.........................................................................................................19
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
9.18
Representations and Warranties.........................................................................20
9.19
Assignment.........................................................................................................
21
9.20
Covenant to Not Cause Violation of Statutes Relating to Relocation of
VehicleDealerships............................................................................................21
9.21
Covenant to Not Cause Violation of Statutes Relating to Direct
Assistance by Agency.........................................................................................21
9.22
Nissan/Nissan NAI Consent...............................................................................
22
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OWNER PARTICIPATION AGREEMENT
This OWNER PARTICIPATION AGREEMENT (this "Agreement') dated as of
C , 2011 (the "Effective Date"), is made by and among the LA QUINTA
EVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), MEGA
DEALER, LLC, a California limited liability company (the "Developer"), and ROBERT N.
LA TORRE, INC., a California corporation (the "Lessee").
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 3.5 acre portion of
Project Area 2 located at 79-125 Highway 111 (also designated as Assessor Parcel No. 600-020-
018) (the "Site"), which is improved with the building and facilities currently operated as the
Torre Nissan automobile dealership (the "Dealership"). The Site is more particularly described
on Attachment 1, which is attached hereto and incorporated herein by this reference.
D. Developer owns fee title to the Site and improvements thereon, and leases the Site
and improvements thereon to Lessee pursuant to that certain Lease of Commercial Building Net,
Net, Net dated July 1, 2004 (the "Lease Agreement'). The Lessee operates the Dealership
pursuant to the Lease Agreement.
E. Subject to and as provided by this Agreement, the parties contemplate that
(i) Developer will rehabilitate and expand the Dealership (the "Project') as further set forth
herein, (ii) the Agency will provide financial assistance towards the costs incurred by Developer
to construct the Project, and (iii) the Developer and Lessee shall thereafter operate 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. Lessee is entering into this Agreement because it has an interest in the Site as
provided in the Lease Agreement, and is a party to this Agreement for the purpose of (i)
consenting to this Agreement, the Operating Covenant, the Deed of Trust and any other
documents or schedules attached to the Agreement that encumber the Site, (ii) agreeing to
subordinate the Lease Agreement to the Operating Covenant, as provided in Section 3.2.7 below,
(iii) cooperating with Developer as may be necessary and proper to effect the obligations of this
Agreement, including any covenants in the Operating Covenant and (iv) agreeing to operate the
Project consistent with this Agreement and the Operating Covenant
H. 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, the Developer, and the Lessee 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) remodel the Dealership to incorporate the new corporate image required by the
Nissan Retail Environmental Design Initiative ("NREDI") program requirements (hereinafter,
the "Nissan Requirements"), and (b) to expand the Dealership to accommodate a new line of
electric automobiles, including the display and servicing of such automobiles, and the servicing
of and new parts sales for heavy duty Nissan commercial vehicles, 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) the Nissan Requirements, (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. The Lessee 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 the Nissan Requirements, (2) prepared by an architect and development team
that is recognized by Nissan Motor Acceptance Corporation, a California corporation ("Nissan")
as having the expertise and ability to prepare and implement plans that meet the Nissan
Requirements, and (3) approved by Nissan as being compliant with the Nissan Requirements.
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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, any
conditional use permit, any General Plan or zone change, any amendment to The Centre at La
Quinta Specific Plan, any 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 the Nissan Requirements and Project
Entitlements, the Project Entitlements shall control.
2.3 Entitlement Process, Processing. Developer and Lessee acknowledge 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 and Lessee acknowledge and agree that in reviewing
and approving documents under this Section 2.3, the Agency is not acting on behalf of the City.
Further, Developer and Lessee understand 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, Lessee, 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, Developer, and Lessee agree to the modification or
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extension in a writing executed by all of the Developer, Lessee, and the Executive Director, (iii)
neither Developer nor Lessee is otherwise in default under this Agreement, and (iv) such
modification or extension does not increase the Agency's obligations or costs under this
Agreement.
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 and
Lessee, 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 and Lessee
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, Lessee or either of
their 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 Nissan Requirements. Developer shall carry
out the design and construction of the Project in conformity with the Nissan Requirements, 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
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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
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 first 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 requires 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
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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
Section 1720 of the Labor Code. Developer shall indemnify, protect, defend and hold harmless
Agency, City, and their respective officers, officials, members, employees, contractors,
representatives, 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 and Lessee 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
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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
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; Source of Funds. 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, ONE MILLION FIVE HUNDRED THOUSAND
DOLLARS ($1,500,000) (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 two (2) general
categories, in the following not to exceed amounts: (i) costs to prepare design and development
plans, in an amount not to exceed One Hundred Fifty Thousand Dollars ($150,000) (collectively,
the "Design Costs"); and (ii) costs to remodel, rehabilitate, and expand the existing facilities, in
an amount not to exceed One Million Three Hundred Fifty Thousand Dollars ($1,350,000)
(collectively, the "Rehabilitation 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 category shall not exceed twenty-five percent (25%)
of the original not to exceed amount for that 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 51 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 $1,500,000.
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The source of funds for the Agency Loan is taxable bond proceeds obtained by Agency
from the sale of tax allocation bonds, and Agency irrevocably pledges such sums in the amount
required to be paid to Developer hereunder to the full extent allowed by law, subject and
subordinate to any senior and prior pledges of such revenues to bondholders.
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 waived 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) exceptions to title approved, in writing, by the
Agency Executive Director, (b) that certain deed of trust in the original amount of $3,420,000 in
favor of Nissan, recorded in the Riverside County Official Records on June 30, 2004 as
Instrument No. 2004-0508929, (c) that certain deed of trust in the original amount of $4,585,000
in favor of Nissan, recorded in the Riverside County Official Records on March 30, 2007, as
Instrument No. 2007-0228822, and (d) that certain Financing Statement in favor of Nissan
executed in connection with the obligation secured by the deed of trust described in clause (b)
above, recorded in the Riverside County Official Records on June 30, 2004 as Instrument No.
2004-0508930, as amended by Instrument No. 2006-0695012 The (i) deeds of trust described in
clauses (b) and (c) above, (ii) the Financing Statement described in clause (d) above, (iii) other
documentation relating to the deeds of trust described in clauses (b) and (c) above (including
without limitation the promissory notes, and any "Loan Documents" as defined in said deeds of
trust) and (iv) any agreements between Developer (or any of its members) or Lessee (or any of
its shareholders) and Nissan North America, Inc. ("Nissan NAI") or Nissan that relate to the
provision of financing for the Project or which identify the Site as collateral for Developer's or
Lessee's obligations to Nissan or Nissan NAI are collectively termed the "Nissan Security
Documents."
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 and Lessee shall have provided evidence to Agency that
Developer and Lessee have 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 Nissan and Nissan NAI for the Project, including
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Developer's site plan and all construction plans and drawings, and to Developer and Lessee
entering into and recording in the chain of title to the Site the Operating Covenant.
3.2.7 The Lease Agreement shall be subordinated to the Operating Covenant by
having Lessee and Developer (as lessor) enter a subordination agreement and estoppel certificate
in a form and content acceptable to the Agency, which shall be recorded in Riverside County
Official Records.
3.2.8 Neither Developer nor Lessee shall be in breach of its obligations under
this Agreement, the Operating Covenant, any of the Nissan Security Documents, and/or any
franchise or other agreement between Developer (or any of its members) or Lessee (or any of its
shareholders) and Nissan NAI or Nissan that relate to the operation of the Dealership on the Site
(collectively, the "Nissan Agreements").
3.3 Disbursement of Agency 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
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 Loan. 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
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(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 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
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 and Lessee 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 in the Official Records of the County of Riverside within five (5) days after the
Effective Date. The Developer's and Lessee'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 Lessee 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.
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
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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 Nissan Security Documents or Nissan 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 parties 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.
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 in Section 7.1 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; any 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
or Lessee's defaults, but in no event shall Developer or Lessee 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 or Lessee 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 or Lessee, service of process on the Developer or Lessee shall be
made by personal service upon any officer or director of Developer or Lessee (as applicable),
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 any
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 any party in asserting
any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of
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any such rights or remedies, or deprive 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 any party of a breach of any of the covenants,
conditions or agreements under this Agreement to be performed by another 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.
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 and Lessee shall procure and maintain, at their 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 or Lessee (as applicable) 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 or Lessee (as applicable) 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 Project.
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(d) With respect to the improvements and any fixtures and furnishings
to be owned by Developer on the Site (with respect to the Developer's policy) or leased to
Lessee (with respect to the Lessee's policy), 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 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 Date, the Developer shall provide the Executive Director with Certificates of
Insurance or appropriate insurance binders evidencing the above insurance coverages and said
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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.
(c) The Executive Director, with the consent of the City's Risk
Manager, is hereby authorized to reduce or otherwise modify Developer's and/or Lessee'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 and Lessee agree 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 or Lessee 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 or Lessee is otherwise responsible.
6.2 Remedies for Defaults Re: Insurance. In addition to any other remedies the
Agency may have if Developer or Lessee 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 or Lessee'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 and/or Lessee, Developer and/or Lessee (as
applicable) 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 it existed prior to the casualty and Developer and/or Lessee (as applicable)
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 and/or Lessee (as applicable), 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 and Lessee 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 and Lessee. Accordingly,
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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, the Managing
Member of the Developer, the Lessee, or the equitable, beneficial and legal owner of Lessee
shall acquire any rights or powers under this Agreement, (ii) none of the Developer, the
Managing Member of the Developer, the Lessee; or the equitable, beneficial and legal owner of
Lessee, shall 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,
the Managing Member of the Developer, the Lessee, or the equitable, beneficial and legal owner
of Lessee, 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 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, the Managing Member of the
Developer, the Lessee, or the equitable, beneficial and legal owner of Lessee 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 an existing
mortgage; (ii) any refinancing or permanent financing of the existing 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, the Managing Member of the Developer, the
Lessee, or the equitable, beneficial and legal owner of Lessee not requiring the Agency's prior
approval, Developer and Lessee 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
or Lessee under this Agreement which remain unperformed as of such Transfer or which arise
from and after the date of Transfer.
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As used in this Agreement, a "Related Person or Entity" shall mean (a) a limited liability
company in which Mr. Jorge Velarde has a greater than fifty percent (50%) ownership and
management interest, or (b) a limited partnership in which Mr. Jorge Velarde is a general partner
with a greater than fifty percent (50%) ownership and management interest; provided, however,
that such Related Person or Entity shall demonstrate that such person or entity has been approved
in writing by Nissan and Nissan NAI 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
hereunder of the transferor/assignor, as applicable, 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 Nissan and Nissan NAI 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, Lessee, and the Agency
and their permitted successors and assigns. Whenever the term "Developer," "Lessee" 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 (i) the deeds of trust described in clauses (b) and
(c) of Section 3.2.1 above, and to all renewals, modifications, consolidations, replacements, and
extensions of said deeds of trust, 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, and
(ii) the Financing Statement described in clause (d) of Section 3.2.1 above. 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.
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8. INDEMNIFICATION OF AGENCY
The Developer and Lessee 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 or Lessee on the Site, or for any construction defects in any improvements
constructed by the Developer or Lessee 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 active negligence or willful misconduct of the Agency or City, subject
to any immunities which may apply to the Agency or 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) two (2) 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.: 760-777-1031
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 or Lessee: Mega Dealer, LLC
c/o TorrelNissan
79-125 Highway III
La Qumta, CA 92253
Phone No.:
No.: 760-777-8030
Mr. Jorge Velarde
With a copy to: Michael
c/o Ton.
79-125 Highway III
Phone No.: 760-777-8999
Facsimile No.: 760-777-8030
9.2 Enforced Delay; Extension of I
provisions of this Agreement, performance by E
Default, and all performance and other dates
where delays or Defaults are due to: war;
earthquakes; fires; casualties; acts of God; ac
restrictions; freight embargoes; lack of transl
litigation; unusually severe weather; inability to
of any contractor, subcontractor or supplier; a
failures to act of the City or Agency or any
Notwithstanding anything to the contrary in thi
cause shall be for the period of the enforced de
the commencement of the cause, if notice by 1
other party within ten (10) days of the comm
sentence of Section 2.4, times of performance
writing by the mutual agreement of the Agenc,
provision of this Agreement to the contrary, the
to complete the Project shall not constitute
Section 9.2.
9.3 Non-Liabilitv of Officials and Er
No member, official, director, officer, agent, or i
the Developer or Lessee, or any successor in int
any Default or breach by Agency or for any am1
Lessee or Developer's or Lessee's successors,
Agreement.
9.4 Relationship Between Agency
acknowledged that the relationship between th,
Lessee on the other, is not that of a partnership
and Lessee shall not be deemed or construed for
mes of Performance. In addition to specific
y party hereunder shall not be deemed to be in
pecified in this Agreement shall be extended,
insurrection; strikes; lockouts; riots; floods;
1 of the public enemy; epidemics; quarantine
rtation; governmental restrictions or priority;
-cure necessary labor, materials or tools; delays
is or omissions of the other party; or acts or
Cher public or governmental agency or entity.
Agreement, an extension of time for any such
ly and shall commence to run from the time of
e party claiming such extension is sent to the
ncement of the cause. Subject to the second
rider this Agreement may also be extended in
Developer, and Lessee. Notwithstanding any
ack of funding or difficulty obtaining financing
grounds of enforced delay pursuant to this
loyee of Agency shall be personally liable to
t of the Developer or Lessee, in the event of
which may become due to the Developer or
on any obligations under the terms of this
Developer, and Lessee. It is hereby
Agency on the one hand, and Developer and
joint venture and that the Agency, Developer,
ay purpose to be the agent of the other.
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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 Inte rag tion. 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 Cations. 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 by all parties.
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
party.
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.
882/015610-0057 -
2167420.1 a06/14111 -19-
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 parties 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 any 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, Developer, and Lessee 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, 9.20, and 9.21 which benefit, and are enforceable by, the City, there are no intended
third party beneficiaries to this Agreement.
9.18 Representations and Warranties.
9.18.1 Agency represents and warrants to Developer and Lessee that as of the
Effective Date of this Agreement, and subject to the disclosures set forth below in this
subsection: (i) Agency has all requisite right, power, legal capacity, and authority to enter into
and perform its obligations under this Agreement; (ii) any persons executing this Agreement on
behalf of Agency are authorized to do so; (iii) the execution of this Agreement by Agency does
not violate any provision of any other agreement to which Agency is a party; and (iv) except as
may be specifically set forth in this Agreement, no approvals or consents not heretofore obtained
by Agency are necessary in connection with the execution of this Agreement by Agency or with
the performance by Agency of its obligations hereunder. Agency hereby discloses to Developer
and Lessee that pursuant to draft legislation to implement a proposal made by the Governor of
the State of California on January 10, 2011, agreements entered into by redevelopment agencies
on and after January 1, 2011, may be subject to challenge for three years from the effective date
of the legislation, or approximately until June 30, 2014, should such legislation be adopted.
9.18.2 Developer represents and warrants to Agency that: (i) Developer has all
requisite right, power, legal capacity, and authority to enter into and perform its obligations
882/015610-0057
2167420.1 a06/14/11 -20-
under this Agreement; (ii) any persons executing this Agreement on behalf of Developer are
authorized to do so; (iii) the execution of this Agreement by Developer does not violate any
provision of any other agreement to which Developer is a party; (iv) except as may be
specifically set forth in this Agreement, no approvals or consents not heretofore obtained by
Developer are necessary in connection with the execution of this Agreement by Developer or
with the performance by Developer of its obligations hereunder; (v) nothing in the Lease
Agreement, any of the Nissan Agreements, any of the Nissan Security Documents, or any other
agreement(s) prohibit Developer or Lessee from fully performing their obligations under this
Agreement; and (vi) there are no known breaches, violations, or defaults by either Developer or
Lessee of any term of the Lease Agreement, or any event or occurrence which, with the passage
of time, would result in a breach, violation, or default by either Developer or Lessee.
9.18.3 Lessee represents and warrants to Agency that: (i) Lessee has all requisite
right, power, legal capacity, and authority to enter into and perform its obligations under this
Agreement; (ii) any persons executing this Agreement on behalf of Lessee are authorized to do
so; (iii) the execution of this Agreement by Lessee does not violate any provision of any other
agreement to which Lessee is a party; (iv) except as may be specifically set forth in this
Agreement, no approvals or consents not heretofore obtained by Lessee are necessary in
connection with the execution of this Agreement by Lessee or with the performance by Lessee of
its obligations hereunder; (v) nothing in the Lease Agreement, any of the Nissan Agreements,
any of the Nissan Security Documents, or any other agreement(s) prohibit Developer or Lessee
from fully performing their obligations under this Agreement; and (vi) there are no known
breaches, violations, or defaults by either Developer or Lessee of any term of the Lease
Agreement, or any event or occurrence which, with the passage of time, would result in a breach,
violation, or default by either Developer or Lessee.
9.19 Assignment. Notwithstanding anything to the contrary herein, in the event the
Agency is deactivated or dissolved during the term of this Agreement, the City shall have the
right, in its sole and absolute discretion, to declare itself to be the successor to the Agency of this
Agreement; provided, however, that nothing herein shall require the City to make such
declaration or to assume Agency's obligations under this Agreement.
9.20 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), neither Developer nor Lessee shall 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 and Lessee further agree 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 and/or Lessee.
9.21 Covenant to Not Cause Violation of Statutes Relating to Direct Assistance by
Agency. 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
882/01561M057
2167420.1 ao6/14/11 -21-
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.
9.22 Nissan/Nissan NAI Consent. Developer shall provide written evidence from
Nissan and Nissan NAI that Nissan and Nissan NAI have approved the Project, including the
recordation of the Agency Deed of Trust and the Operating Covenant.
[Remainder of Page Left Blank; Signatures on Following Page]
881/0156I0-0057
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IN WITNESS WHEREOF, Agency, Developer, and Lessee 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.
Date: G - l `i - , 2011
G - \ k-k - 2011
Date: d & - 1 tr , 2011
APPROVED AS TO FORM:
"Developer"
MEGA DEALER,
liability company
Its:
Jorge Vel
"Lessee"
ROBERT N. LA 7
E610)11 . a
!1'1/I
"Agency"
a California limited
, President
INC., a California
LA QUINTA REDEVELOPMENT
AGENCY, a public body, co orate and
poluiis / 4,7
tsy��vri�c7cy/� - �w��rriw�sl
Executive Director
882/0156 1 M057
2167420 1 a06/14/11 -23-
ATTACHMENT "1"
LEGAL DESCRIPTION OF SITE
PARCEL 2 OF PARCEL MAP 28525-1, AS SHOWN BY PARCEL MAP ON
FILE IN BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS
OF RIVERSIDE COUNTY, CALIFORNIA.
ASSESSOR'S PARCEL NUMBER 600-020-018.
882/015610-0057 ATTACHMENT 1
2167420.1 a06/14/11
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ATTACHMENT "2"
SCOPE OF DEVELOPMENT
The Project shall consist of Developer obtaining approval from Nissan and Nissan NAI to
upgrade and expand the existing Torre Nissan automobile dealership on the Site. The Project
shall include the following construction and related tasks:
a. Refurbish the facade and interior to incorporate the new Nissan corporate image
required by Nissan Motor Company's Nissan Retail Environmental Design Initiative program
design requests.
b. Add an additional, approximately) 1,377 square feet to the existing service and
parts areas to accommodate the display and servicing of a new line of electric automobiles (the
Nissan Leaf) and the servicing and new parts sales for heavy duty Nissan commercial vehicles.
216742 .1a 6/1 ATTACHMENT 2
2167420J a06/14/71
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 September 19-23, 2011.
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 September 26-
30, 2011.
5.
Developer to revise and resubmit (as
During the week of October 10-14, 2011.
necessary to address City comments)
Developer Applications.
6.
Re -review of Developer Applications by
During the week of October 17-21, 2011.
applicable City departments and preparation
of conditions of a proval.
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 week of October 17-21, 2011.
682/015610-0057 ATTACHMENT 3
2167420.1 a06/14/11 -1-
Item of Performance
Time for Completion
8.
Planning Commission hearing and
During the week of November 7-11, 2011.
consideration of Developer Applications.
9.
Developer's submission of application for
During the week of November 7-11, 2011.
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 week of November 14-
18, 2011.
11.
Developer to correct and resubmit (as
During the period of November 21-December 2,
necessary to address City comments) plans.
2011.
12.
Developer to submit to Agency proposed list
No later than November 14, 2011.
of Eligible Project Costs
13.
Review of Developer's proposed list of
Within 10 days after Agency's receipt.
Eli ible 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 Eli ible 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 week
issuance).
of December 5-December 9, 2011.
16.
Developer constructs Project.
During the period of December 5, 2011—April 5,
2012.
17.
Developer obtains certificate of occupancy for
During the week of April 5-9, 2012.
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,
882/015610-0057 ATTACHMENT 3
2167420.1 a06/14/11 -2- -
Agency shall use reasonable efforts to cause City to take such action in the time prescribed
herein.
882/015610A057 ATTACHMENT 3
2167420.1 a06/14/11 _3_
ATTACHMENT "4"
RELEASE OF CONSTRUCTION COVENANTS
[See Following Document]
882/015610-0057ATTACHMENT 4
2169420.1 a06/16/14/II
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
Mega Dealer, LLC
c/o Torre Nissan
79-125 Highway I I I
La Quinta, CA 92253
Attention: Mr. Jorge Velarde
[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
LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the
"Agency"), in favor of MEGA DEALER, LLC, a California limited liability company (the
"Developer"), as of the date set forth below.
RECITALS
A. The Agency and Developer have entered into that certain Owner Participation
Agreement (the "OPA") dated , 2011 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. 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 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 County. This
Release is conclusive determination of satisfactory completion of the construction and
development of the Project.
C. The Agency has conclusively determined that construction and development of
the Project has been satisfactorily completed.
NOW, THEREFORE, 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 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.
882/015610-0057
2167420.1 a06/14/11 _[
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"
MEGA DEALER, LLC, a California limited
liability company
Date: 2011 By:
Its:
"Agency"
LA QUINTA REDEVELOPMENT
AGENCY, a public body, corporate and
politic
Date: 2011
Lo
Executive Director
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Agency Counsel
882/015610-0057
2167420.1 a06/14/11 _Q_
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 (Seal)
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 (Seal)
882/015610-0057
2167420J a06114/II -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 2 OF PARCEL MAP 28525-1, AS SHOWN BY PARCEL MAP ON
FILE IN BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS
OF RIVERSIDE COUNTY, CALIFORNIA.
ASSESSOR'S PARCEL NUMBER 600-020-018.
882/015610-0057
2167420A a06/14/11 -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]
882/015610-0057 ATTACHMENT 5
2167420.1 a06/14/11
ATTACHMENT "6"
PROMISSORY NOTE
[See Following Document]
882/015610-0057 ATTACHMENT 6
2167420A a06/14/11
PROMISSORY NOTE SECURED BY DEED OF TRUST WITH
ASSIGNMENT OF RENTS AND RIDER ATTACHED HERETO
.r t, 14 12011 ("Note Date")
FOR VALUE RECEIVED, the undersigned, MEGA DEALER, LLC, a California limited
liability company, 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 ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000), 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 Borrower, Robert N. La
Torre, Inc., a California limited liability company ("La Torre") and Agency, dated on or about
June , 2011 ("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 79125 Highway 111, as
more particularly described in the legal description attached as Attachment 1 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 among Agency, Borrower, and La Torre 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 ONE MILLION FIVE HUNDRED
THOUSAND DOLLARS ($1,500,000) ("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.
2. Term of Note. Subject to the provisions of Paragraph 3 herein which
provide for acceleration of the then outstanding principal and accrued interest and immediate
882/015610-0057 -j-
2167420A a06/14/11
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, 2012-June 30, 2013 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 "Net 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 "Net Sales Taxes From the site" shall
mean "New Sales Taxes From the Site" (as defined below) less "Old Sales Taxes From the Site"
(as defined below). As used herein, "New 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 to California law in each Operating Year which are
actually received from the City from the State Board of Equalization. As used herein, "Old Sales
Taxes From the Site" means the amount of sales and use taxes that were generated from sales
occurring on the Site on which sales or use taxes are imposed pursuant to applicable to California
law in the July 1, 2011 to June 30, 2012 fiscal year.
(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) Net 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 Net 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 Net Sales Taxes From the Site to the City. Any adjustments
resulting from any interim or estimated determination of Net 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) Net 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). Net 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,
882/015610-0057 -2-
2167420A a06/14/11
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.
(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, 2011-June 30, 2012 fiscal
year. Borrower and Agency hereby acknowledge that the assessed value of the Site in the July 1,
2010-June 30, 2011 fiscal year was Three Million Two Hundred Sixty -Eight Thousand Five
Hundred Forty -Three Dollars ($3,268,543.
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 3 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.
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
882/015610A057 _3_
2167420.1 a06/14/II
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
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
882/015610-0057 -4-
2167420.1 a06/14/11
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: Mega Dealer, LLC
c/o Torre Nissan
79-125 Highway 111
La Quinta, CA 92253
Phone No.:
Facsimile No.: 760-777-8030
Attention: Mr. Jorge Velarde
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.
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.
882/015610-0057 _5_
2167420.1 a06/14/11
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-
2167420.1 a06/14/11
IN WITNESS WHEREOF, Borrower has executed this Note as of the Note Date.
Date: G' kA — 2011
"Borrower"
MEGA DEALER, C, a California limited
liability company \
Its:
Jorge Velarde, President
882/015610-0057 -7-
2167420.1 a06/14/11 _
ATTACHMENT "T'
DEED OF TRUST WITH ASSIGNMENT OF RENTS
AND RIDER ATTACHED HERETO
[See Following Document]
882/015610-0057 ATTACHMENT 7
2167420.1 a06/14/I1
Recording Requested by and
When recorded mail to:
DOC # 2011-0295863
07/05/2011 04:38P Fee:NC
Page 1 of 13
Recorded in Official Records
CountyofRiverside
Larry W. Ward
Assessor, County Clerk & Recorder
I IIIII IIIIIII III IIIII IIIIII IIIII IIIII III IIIII IIII IIII
EXEMPT FROM RECORDING FEE PER GOV. CODE SECTION 27383
DEED OF TRUST WITH ASSIGNMENT OF RENTS AND
RIDER ATTACHED HERETO M
NOTE: RIDER ATTACHED TO THIS DEED OF TRUST OG2
This DEED OF TRUST WITH 4SSIGNMENT OF RENTS AND RIDER ATTACHED
HERETO ("Deed of Trust"), is made IL+ , 2011, between MEGA DEALER, LLC,
a California limited liability company, herein called TRUSTOR, whose address 79-125 Highway
111, La Quinta, CA 92253, FIRST AMERICAN TITLE COMPANY, a California corporation,
herein called TRUSTEE, whose address is 10535 Foothill Blvd. #282, Rancho Cucamonga, CA
91730, and LA QUINTA REDEVELOPMENT AGENCY, 78-495 Calle Tampico, La Quinta,
CA 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 2 OF PARCEL MAP 28525-1, AS SHOWN BY PARCEL MAP ON
FILE IN BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS
OF RIVERSIDE COUNTY, CALIFORNIA.
ASSESSOR'S PARCEL NUMBER 600-020-018.
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 ONE MILLION
FIVE HUNDRED THOUSAND DOLLARS ($1,500,000) 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 its 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
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
882/015610-0057
2167420.1 a06/I4/II
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
Aline
3
130-31
Lake
437
110
Plumes
166
1307
Siski ou
506
762
Amador
133
438
Lassen
192
367
Riverside
3778
347
Solaro
1287
621
Butte
1330
513
Los Angeles
T-3878
874
Sacramento
5039
124
Sonoma
2067
427
Calaveras
185
338
Madera
911
136
San Benito
300
405
Stanislaus
1970
56
Colusa
323
391
Mann
1849
122
San Bernardino
6213
768
Sutter
655
585
Contra Costa
4684
1
Manposa
90
453
San Francisco
A-804
596
Tehama
457
183
Del Norte
101
549
Mendocino
667
99
San Joaquin
2855
283
Trinity
108
595
El Dorado
1704
1635
1 Merced
11660
1753
San Luis Obispo
1311
137
ITulare
12530
1108
Fresno
5052
1623
Modoc
1191
193
San Mateo
4778
175
Tuolumne
177
160
Glenn
469
76
Mono
69
302
Santa Barbara
2065
881
Venture
2607
237
Humboldt
801
83
Monterey
357
239
Santa Clara
6626
664
Yob
769
16
Imperial
1189
701
Na
704
742
Santa Cruz
1638
607
Yuba
398
693
In o
165
672
Nevada
363
94
Shasta
800
633
Kern
3756
690
Ora a
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
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DO NOT RECORD
The following is a copy of Subdivisions A and B of the fictitious Deed of Trust recorded in each county in California as stated in the
foregoing Deed of Trust and incorporated by reference in said Deed of Trust as being a part thereof as if set forth at length therein.
A. To protect the security of this Deed of Trust, Trustor agrees:
I To keep said property in good condition and repair, not to remove or demolish any building thereon; to complete or restore
promptly and in a good and workmanlike manner any building which may be constructed, damaged or destroyed thereon and to pay when due all
claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or
improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer or permit any act upon said property in violation
of law; to cultivate, irrigate, fertilize, fumigate, prune and do all other acts which from the character or use of said property may be reasonably
necessary, the specific enumerations herein not excluding the general.
2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to Beneficiary. The
amount collected under any fire or other insurance policy may be applied by Beneficiary upon any indebtedness secured hereby and in such order
as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Truster. Such
application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.
3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such
action or proceeding in which Beneficiary or Trustee may appear, and in any suit brought by Beneficiary to foreclose this Deed.
4) To pay: at least ten (10) days before delinquency all taxes and assessments affecting said property, including assessments
on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on said property or any part thereof, which appear to be
prior or superior hereto; all costs, fees and expenses of this Trust.
Should Truster fail to make any payment or to do any act as herein provided, then Beneficiary of Trustee, but without obligation so to
do and without notice to or demand upon Truster and without releasing Trustor from any obligation hereof, may: make or do the same is such
manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said
property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either appears to be prior
or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees.
5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest from the date of
expenditure at the amount allowed by law in effect at the date hereof, and to pay for any statement provided for by law in effect at the date hereof
regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the maximum allowed by law at the time when
said statement is demanded.
B. It is mutually agreed:
1) That any award in connection with any condemnation for public use of or injury to said property or any part thereof is
hereby assigned and shall be paid to Beneficiary who may apply or release such moneys received by him in the same manner and with the same
effect as above provided for disposition of proceeds of fire or other insurance.
2) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to
require prompt payment when due of all other sums so secured or to declare default for failure so to pay.
3) That at any time or from time to time, without liability therefor and without notice, upon written request of Beneficiary and
presentation of this Deed and said note for endorsement, and without affecting the personal liability of any person for payment of the
indebtedness secured hereby, Trustee may: reconvey any part of said property; consent to the making of any map or plat thereof, join in granting
any easement thereon, or join in any extension agreement or any agreement subordinating the lien or charge hereof.
4) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this
Deed and said note to Trustee for cancellation and retention or other disposition as Trustee in its sole discretion may choose and upon payment of
its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters or facts
shall be conclusive proof of the truthfulness thereof The Grantee in such reconveyance may be described as "the person or persons legally
entitled thereto." -
5) That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power and authority, during the
continuance of these Trusts, to collect the rents, issues and profits of said property, reserving unto Trustor the right, prior to any default by
Trustor in payment of any indebtedness secured hereby or in the performance of any agreement hereunder, to collect and retain such rents, issues
and profits as they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in person, by agent, or be
a receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured, enter upon and take
possession of said property or any part thereof, in his own name sue for or otherwise collect such rents, issues, and profits, including those past
due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees, upon any
882/015610-0057
2167420.1 a06/14/11
indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property, the
collecting of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice.
6) That upon default by Trustor in payment of my indebtedness secured hereby or in the performance of any agreement
hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default
and demand for sale and of written notice of default and of election to cause to be sold said property, which notice Trustee shall cause to be filed
for record. Beneficiary also shall deposit with Trustee this Deed, said note and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale
having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said
notice of sale, either as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder for cash in
lawful money of the United Slates, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public
announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed
by the preceding postponement Trustee shall deliver to such purchaser its deed conveying the property so sold, but without any covenant or
warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof Any person,
including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale,
Trustee shall apply the proceeds of sale to payment of. all sums expended under the terms hereof, not then repaid, with accrued interest at the
amount allowed by law in effect at the date hereof; all other sums then secured hereby; and the remainder, if any, to the person or persons legally
entitled thereto.
7) Beneficiary, or any successor in ownership of any indebtedness secured hereby, may from time to time, by instrument in
writing, substitute a successor or successors to any Trustee named herein or acting hereunder, which instrument, executed by the Beneficiary and
duly acknowledged and recorded in the office of the recorder of the county or counties where said property is situated shall be conclusive proof of
proper substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee predecessor, succeed to all its title,
estate, rights, powers and duties. Said instrument must contain the name of the original Trustor, Trustee and Beneficiary hereunder, the book and
page where this Deed is recorded and the time and address of the new Trustee.
8) That this Deed applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators,
executors, successors and assigns. The term Beneficiary shall mean the owner and holder, including pledgees, of the note secured hereby,
whether or not named as Beneficiary herein. In this Deed, whenever the context so requires, the masculine gender includes the feminine and/or
neuter, and the singular number includes the plural.
9) That Trustee accepts this Trust when this Deed, duly executed and acknowledged, is made a public record as provided by
law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which
Trustor, Beneficiary or Trustee shall be a party unless brought by Trustee.
882/015610-0057 -4-
2167420.1 a06/14/11
SEE RIDER ATTACHED TO THIS DEED OF TRUST
"Trustor"
MEGA DEALER, LLC, a California limited
liability company
Date: �,— \�-k— 2011
Jorge Velarde, President
882/015610-0057 -5-
2167420.1 a06/14/11
State of California )
County of R,tVM-'de. )
On Cku- a_ IL{ c3DU , before me, LDrt a - WbA.) D , Notary Public,
v I`(here insert name and title of the officer) -
personally appeared 5'Or q e- Ve.(tx.Yi9 C_
who proved to me on the basis of satisfactory evidence to be the person(srwhose namew is/are
subscribed to the within instrument, and acknowledged to me that he/sheAhey executed the same
in his/ken4heir authorized capacity(ieo, and that by his4ter/t1eir signatureo on the instrument the
person(A 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.
460-40004""Oha
LORIJ.LAFOND Mghol
Commission 0 1917186
Notary Public - California i
Riverside County
LOM Comm. Ex Ires Dec 16.2014
882/015610-0057 -6-
2167420.1 a06/14/11
INTENTIONALLY LEFT BLANK
-7-
RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS
This RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS ("Rider") is.
entered into this L/ f- 0"day of , 2011, by and between MEGA DEALER,
LLC, a California limited liability 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 and
Rider Attached Hereto, 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 among Trustor as
"Developer," Robert N. La Torre, Inc., a Califorri))a corporation ("La Torre") as "Lessee"), and
Beneficiary as "Agency" dated on or about dt mt, hk, IO11 , 2011 (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 One Million Five Hundred Thousand Dollars ($1,500,000), 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," La Tone as "Lessee," and Beneficiary as "Agency" (the "Operating Covenant")
which sets forth La Tone's obligations to ensure the continuous operation of the Tone Nissan
automobile dealership 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;
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.
882/015610-0057
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2. Obli atg ions. 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.
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,
8821015610-0057
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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 (a) that certain deed of trust in the original
amount of $3,420,000 in favor of Nissan Motor Acceptance Corporation ("Nissan"), recorded in
the Riverside County Official Records on June 30, 2004 as Instrument No. 2004-0508929, (b)
that certain deed of trust in the original amount of $4,585,000 in favor of Nissan, recorded in the
Riverside County Official Records on March 30, 2007, as Instrument No. 2007-0228822, and (c)
that certain Financing Statement in favor of Nissan executed in connection with the obligation
secured by the deed of trust described in clause (a) above, recorded in the Riverside County
Official Records on June 30, 2004 as Instrument No. 2004-0508930, as amended by Instrument
No. 2006-0695012, and to all renewals, modifications, consolidations, replacements, and
extensions of the deeds of trust described in clauses (a) and (b) above, 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
882/015610-0057
2167420.1 a06/14/11 _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
[signatures on next page]
882/015610-0057
2167420.1 a06/14/II
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"
MEGA DEALER, LLC, a California limited
liability company
Date: 2011 B XV
Its: '
882/015610-0057
2167420.1 a06/14111 -12-
State of California , )
County of R�VU5%C�e 1
On QlA.tIIL , oib l) before me, l-0(Z S • LAP-O0 0 Notary Public,
V (here in ert name and title of the officer)
personally appeared ao q e V e.10. 192
who proved to me on the basis of tisfactory evidence to be the person(.] whose name(s) is/see--
subscribed to the within instrument, and acknowledged to me that hehshe/they executed the same
in his/hexLtheir authorized capacity( -,and -and that by his/her/their signature($) on the instrument the
personal, or the entity upon behalf of which the persono 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.
LORIJ.LAFOND
Commission C 1917186
Notary Public - California
Riverside County
My Comm. Es Tres Doc 18 2014+
882/015610-0057
2167420.1 a06/14/11 -13-
RECORDING REQUESTED BY AND
When Recorded Mail to:
Office of the City Clerk
City of La Quinta
PO Box 1504
La Quinta, California 92253
uuu � �t-J� i—�u�an�sn4
07/05/2011 04:38P Fee:NC
Page 1 of 13
Recorded in Official Records
County of Riverside
Larry W. Ward
Assessor, County Clerk 8, Recorder
111111111111111111111111111 HE 11111111111111111111111111111
S R U PAGt I sect , u,v I MIST' I LUNG] RFD I COPY
M A L 465 426 PCOR NCOR SMF NCRG J�EX M
T: CTY UNI
This document is exempt from the payment of arecording
fee pursuant to Government Code Section 27383.
OPERATING COVENANT
THIS OPERATING COVENANT ("Operating Covenant") is made this 1 ' day of
, 2011 (the "Effective Date"), by and among the LA QUINTA
REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), MEGA
DEALER, LLC, a California limited liability company ("Mega Dealer"), and ROBERT N. LA
TORRE, INC., a California limited liability company ("Lessee") with reference to the
following:
A. The Agency, Mega Dealer, and Lessee have executed an Owner Participation
Agreement ("Agreement"), dated as of 4ttn.,L lif , 2011, 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"), Mega Dealer's construction thereon of the
"Project," as further defined in the Agreement, and Lessee's subsequent operation of the Project.
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. The Property is improved with the building and facilities currently operated as the
Torre Nissan automobile dealership (the "Dealership"). Mega Dealer owns fee title to the
Property and improvements thereon, and leases the Property and improvements thereon to
Lessee pursuant to that certain Lease of Commercial Building Net, Net, Net dated July 1, 2004
(the "Lease Agreement"). The Lessee operates the Dealership pursuant to the Lease Agreement.
C. Pursuant to the Agreement, Mega Dealer has agreed to construct the Project on
the Property, and Agency has agreed to provide the Mega Dealer with certain financial assistance
to reimburse Mega Dealer 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.
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.
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NOW, THEREFORE, Mega Dealer and Lessee hereby covenant, agree, and declare by
and for themselves and their 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. Mega Dealer covenants and agrees for itself, its
successors, assigns, and every successor in interest to Mega Dealer'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"), Mega Dealer shall commence,
diligently proceed with, and satisfactorily complete construction of the Project so as to entitle
Mega Dealer 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 (10') anniversary of the date of recording of the
Release of Construction Covenants for the Project (the "Operating Covenant Termination Date"),
Mega Dealer and Lessee, which are collectively, jointly and severally referred to hereinafter as
the "Developer" hereby covenant and agree 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
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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 I 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) Nissan Motor Acceptance Corporation, a California corporation
("Nissan"), ceases to exist; then this Operating Covenant shall automatically terminate.
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.
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.
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2167420.1 a06/14/11 _3_
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 the Nissan Retail Environmental Design
Initiative (NREDI) program requirements (the "Nissan Requirements").
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 thereafter to 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
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 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.
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(a) Nondiscrimination Covenants. Each of Developer and Lessee covenants
by and for itself and any successors in interest that there shall be no discrimination against or
segregation of, any person or group of persons on account of any basis listed in subdivision (a) or
(d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926,
12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section
12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the Property, nor shall the grantee or any person claiming under or through him or
her, establish or permit any practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or
vendees in the Property. The foregoing covenants shall run with the land.
Each of Developer and Lessee shall refrain from restricting the rental, sale or
lease of the Property on any of the bases listed above in this Section 4(a). All such deeds, leases
or contracts shall contain or be subject to substantially the following nondiscrimination or
nonsegregation clauses:
(i) 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 any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein
conveyed, nor shall the grantee or any person claiming under or through him or her, establish or
permit any 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
premises herein conveyed..The foregoing covenants shall run with the land."
(ii) 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 any basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code,
as those bases are defined in Sections 12926, 12926.1, subdivision
(m) and paragraph (1) of subdivision (p) of Section 12955, and
Section 12955.2 of the Government Code, 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."
(iii) In contracts: "There shall be no discrimination against or segregation of,
any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section
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2167420.1 a06/14/11 'S'
12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of
the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment
of the premises which are the subject of this Agreement, nor shall the grantee or any person
claiming under or through him or her, establish or permit any 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 premises herein conveyed. The
foregoing covenants shall run with the land."
The covenants established in this Section 4 shall, without regard to technical
classification and designation, be binding for the benefit and in favor of Agency and its
successors and assigns, and shall remain in effect in perpetuity.
(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
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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
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 into 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 parry 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
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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.
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
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and time of delivery, (iii) via facsimile, so long as the sender receives confirmation of successful
transmission from the sending machine, or (iv) two (2) 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 Personally or by Courier:
La Quints 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: Mega Dealer, LLC
c/o Torre Nissan
79-125 Highway 111
La Quinta, CA 9253
Phone No.:
Facsimile No.: 760-777-8030
Attention: Mr. Jorge Velarde
With a copy to:
Phone No.:
Facsimile No.:
Attention:
882/015610-0057 _
2167420.1 a06/14/11 _9
IN WITNESS WHEREOF, the parties hereto has executed this instrument the day and
year first hereinabove written.
Date: k�-k-- 2011
Date: ck— 2011
Date: 2011
APPROVED AS TO FORM:
"Mega Dealer"
MEGA DEALER, LLC, a California limited
liability company
"Lessee"
ROBERT LA TORRE, PVC., a California
corporation 1
By:
Its:
"Agency"
LA QUINTA REDEVELOPMENT
AGENCY, a public body, corporate nd
pol' 'c
By:� _
Executive Director
882/015610-0057
2167420.1 a06/14/11 -to-
State of California )
County of Kl'y "Ss at-
Onfin. I l before me, Loci5• C o b 0 b , Notary Public,
(here insert name and title of the officer)
personally appeared 13 V( -G E V EL -Y -)1r
who proved to me on the basis of satisfactory evidence to
be the oersond) whose name() is/ffi2-
subscribed to the within instrument, and acknowledged to me that he/skekhey executed the same
in his/kerAheir authorized capacity(8es) and that by his/kekheix signature(4 on the instrument the
person(, or the entity upon behalf of which the persono 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
(seal)
State of California )
County of ku� )
------------------
LORI J. LAFOND
Ok Commission s 1917186
Notary Public - California
Riverside County
My Comm. Ex Tres Dec 1B 2011+
On jW"e' 14, 2.0(I before me, SIASA4 MAYSCtS Notary Public,
(here insert name and title of the officer)
personally appeared �1 [oMAS p C761JOJE5'6
who proved to me on the basis of satisfactory evidence to be the person(*) whose name(fn is/W
subscribed to the within instrument, and acknowledged to me that heAdwAhW executed the same
in hiss authorized capacity(nov), and that by his/her/their signature('*) on the instrument the
person(b), or the entity upon behalf of which the person(o) 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.
882/015610-0057
2167420.1 a06/14/11 -I t-
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 2 OF PARCEL MAP 28525-1, AS SHOWN BY PARCEL MAP ON
FILE IN BOOK 193 PAGE(S) 85, 86 AND 87 OF PARCEL MAPS, RECORDS
-OF RIVERSIDE COUNTY, CALIFORNIA.
ASSESSOR'S PARCEL NUMBER 600-020-018.
882/015610-0057
2167420.1 a06/14/11 '�2'
EXHIBIT `B"
LEGAL DESCRIPTION OF BENEFITED PUBLIC PROPERTY
North La Quints Park
North East Corner of Westward Ho & Dune Palms
Adams Park
South West Corner of Adams Street & La Palma
Centre Pointe Dog Park
South East Corner of Seeley Drive & Miles Avenue
City Hall
South West Corner of Washington Street & Calle Tampico
City Library
78-275 Calle Tampico
Senior Center
78-450 Avenida La Fonda
Boys and Girls Club
North West Corner of Park Avenue & Avenue 50
Sports Complex
North West Corner Park Avenue & Avenue 50
YMCA
North West Corner of Park Avenue & Avenue 50
Seasons Park
Cloud View Way & Calle Las Ramblas
Fritz Burns Park
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 I I I
La Quinta Centre Drive, from Adams Street to Highway I I I
882/015610-0057
2167420A a06/14/11 -13-