2005 Centre Pointe - Subordination Agreement - CP Development. LLCRecording Requested By And
When Recorded Mail To:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attention: Executive Director
DOC # 2005-0793715
09/26/2005 08:00A Fee:NC
Page 1 of 14
Recorded in Official Records
County of Riverside
Larry W. Ward
Assessor, County Clerk & Recorder
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EXAM
SUBORDINATION AGREEMENT
NOTICE; THIS SUBORDINATION AGREEMENT RESULTS I
INTEREST IN THE PROPERTY BECOMING SUBJECT T
O
THIS SUBORDINATION AGREEMENT ("Agreement") is entered into as of September
/J, 2005, by and among the LA QUINTA REDEVELOPMENT AGENCY, a public body,
corporate and politic ("Agency'), CP DEVELOPMENT LA QUINTA, LLC, a California limited
liability company ("Developer"), and 1st CENTENNIAL BANK ("Lender").
RECITALS
A. Developer owns fee title to the real property described on Attachment No. " '
attached hereto and incorporated herein by reference (the "Property").
Agency and Developer have entered into that certain Disposition and
Development Agreement dated December 18, 2003, and amended October 28, 2004, and
December 7, 2004 (as amended, the "DDA"), pursuant to which the Agency conveyed. the
Property to the Developer for purposes of constructing on the Property a mixed use development
consisting of a medical office/surgical facility; a development containing approximately twenty-
six (26) sanctuary villas; a mid -price suites hotel containing approximately one hundred thirty-
four (134) guest rooms; a resort -style condominium/casitas project containing approximately one
hundred thirty-six (136) condominium/casita units; two (2) sit-down restaurants; a residential
development containing thirteen (1.3) single-family homes; and a residential development
containing fifty-four (54) single-family homes; forty (40) of which shall be restricted for sale to
"Eligible Buyers" at an "Affordable Housing Cost" (as those terms are defined in the DDA)
(collectively, the "Project"). Certain components of the Project shall be constructed in multiple
phases (each, a "Phase of Development").
C. As a condition to the Agency's conveyance of the Property to Developer, the
DDA required that the Developer grant the Agency an option to repurchase the Property or
portions thereof ("Repurchase Option"), if Developer (i) fails to commence, continuously
proceed with, or complete construction of the Project or any particular Phase of Development
within certain specified time frames, or (ii) transfers the Property, or portion thereof, in violation.
of the terms of the DDA, all as further described in that certain Option Agreementexecuted by
882/015610-0061 639800.02 a09/08/05 4_
and between the Agency and the Developer on or about December 7, 2004, which Option
Agreement was recorded in the Official Records of the County Recorder for the County of
Riverside, California (the "Official Records' on December 9, 2004, as Instrument No. 2004-
0979138.
D. On or about December 7, 2004, Developer, Agency, and Lender entered into that
certain Subordination Agreement (the "Initial Subordination Agreement") pursuant to which
Agency subordinated the Repurchase Option to that certain deed of trust executed by Developer
in favor of Lender (the "Initial Lender Deed of Trust") to secure a promissory note dated
November 8, 2004 (the "Initial Note"), in the sum of Twenty -One Million, Six Hundred and
Twenty -Eight Thousand Dollars ($21,628,000.00) (the "Initial Loan") The Initial Subordination
Agreement was recorded in the Official Records on December 9, 2004, as Instrument No. 2004-
0979142. The Initial Deed of Trust was recorded in the Official Records on /'&A1 de1> as
Instrument No. vktic, K- 7 '7' /& `fi r
E. Developer has executed or is about to execute a deed of trust, in favor of Lender,
encumbering the Property to secure a promissory note dated September q�, 2005, in the sum of
Three Million One Hundred Seventy Thousand Dollars ($3,170,000.00) (the "Lender Loan");
payable with interest and upon the terms and conditions described in such note (respectively, the
"Lender Deed of Trust" and "Lender Note"). The Lender Loan will be used to pay down Three
Million Dollars ($3,000,000.00) of the Initial Loan, such that the outstanding principal balance
of the Initial Loan, after the paydown, will be Eighteen Million Six hundred Twenty -Eight y_�J
Thousand Dollars ($18,628,000.00). @ oi� r� C��✓ �G' j` `�/�7t h'4'``�'
F. The Lender is willing to make the Lender Loan provided the Lender Deed of
Trust is a lien or charge upon the Property prior and superior to the Repurchase Option and
provided that the Agency will specifically and unconditionally subordinate the Repurchase
Option to the lien.or charge of the Lender Deed of Trust.
G. It is for the mutual benefit of the Lender, the Agency and Developer that the
Lender make the Lender Loan to Developer. The Agency has agreed that the Lender Deed of
Trust shall, when recorded, constitute a lien or charge upon the Property which is
unconditionally prior and superior to the Repurchase Option, subject to the specific terms and
provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual benefits accruing to the Agency,
Lender and Developer, and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Lender to make the Lender Loan, it is hereby
declared, understood and agreed as follows:
Subordination by Agency
1.1 Subordination of Agency Deed of Trust to Lender Deed of Trust
The Lender Deed of Trust (and any renewals or extensions of, or advances, including
interest, thereunder) shall unconditionally be and remain at all times a lien or charge on the
Property, prior and superior to the Repurchase Option, together with all rights and privileges of
Agency thereunder, but subject to the terms and conditions of this Agreement.
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1.2 Covenant of Agency.
The Agency declares,. agrees and acknowledges that to Agency's actual knowledge,
without duty of inquiry or investigation, there is no breach, event of default or default existing
under the DDA or the Option Agreement or any circumstances, event, omission or failure of
condition which would constitute such a breach, default, or event of .default after notice or lapse
of time, or both.
2. Reliance by Lender and A eg ncy
The Lender would not make the Lender Loan and the Agency would not have agreed to
subordinate the Repurchase Option without this Agreement and each of the undersigned
understands that in reliance upon, and in consideration of, this subordination, specific loans and
advances are being and will be made and, as part and parcel thereof, specific monetary and other
obligations are being and will be entered into which would not be made or entered into but for
such reliance upon this subordination.
Rights of Agency
3.1 Default Under Lender Deed of Trust
In the event of a breach or default by Developer under the terms of the Lender Deed of
Trust, the party alleging such default shall provide the Agency with written notice of such breach
or default concurrently with providing such notice to Developer. Upon receipt of such notice of
breach or default, the parties hereto agree that Agency shall have each of the following rights so
long as the Option Agreement encumbers any portion of the Property or interest therein:
(a) To cure the noticed default at any time prior to the foreclosure of
the Lender Deed of Trust. In connection therewith, the Lender agrees that, upon written request
by Agency received by Lender at least five (5) days prior to the date set for foreclosure sale
under the Lender Deed of Trust, Lender shall postpone the foreclosure sale for thirty (30) days,
during which thirty (30) day period Agency shall have the right to cure the noticed default, and
that, in the event of a nonmonetary default which is susceptible to being cured only when the
Agency has obtained possession of the Property, the Agency shall have as long as necessary .(x)
to obtain possession of the Property by exercising the Repurchase Option and (y) to cure the
default, so long as the Agency does so with reasonable and continuous diligence.
(b) To negotiate with the Lender regarding the noticed default at any
time prior to the .foreclosure of the Lender Deed of Trust or other lien.
(c) To purchase the Property from Developer, subject to the Lender
Deed of Trust without the consent of the Developer. Upon written notice from Agency to
Lender exercising the Repurchase Option and received by Lender at least five (5) days prior to
the date set for foreclosure sale under the Lender Deed of Trust, Lender shall postpone the
foreclosure sale for the time reasonably necessary to allow Agency to complete the purchase of
the Property. The purchase price for the Property and escrow procedures shall be as set forth in
the Option Agreement.
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The Lender agrees that, in the absence of any default by the Developer under the Lender
Loan, the exercise of any of the rights set forth in this Section 3.1 by Agency shall not give rise
to any right on the part of the Lender to exercise any right to accelerate the amounts due under
the Lender Loan. Agency agrees that nothing in this section 3.1 shall prevent the Lender from
exercising its rights and remedies under the Lender Deed of Trust in the event of Developer's
default thereunder, provided however, that in that event, Agency shall have the right to cure
Developer's default in accordance with Section 3.1(a) above.
3.2 Exercise of Repurchase Option
The Lender hereby agrees that in the event that Agency exercises the Repurchase Option, said
action shall not give rise to any right on the part of the Lender to accelerate the amounts due on
the Lender Loan so long as Developer is not in default of its obligations under the Lender Loan.
In the event of such default at the time the Agency exercises the Repurchase Option, the Agency
shall have the right to cure Developer's default as provided in Section 3.1(a) above.
3.3 Disbursements
Lender, in making disbursements of the proceeds of said Loan, is under no obligation or
duty to, nor has Lender represented that it will, see to the application of such proceeds by the
person or persons to whom disbursements thereof are made and any application or use of such
proceeds for purposes other than those provided in the documents evidencing and securing such
Loan shall not defeat the subordination herein made in whole or in part.
3.4 Enforcement of Use Restrictions
Nothing set forth in this Agreement shall prevent the Agency from enforcing the terms of
the DDA or any -other agreement between Developer and Agency with respect to the Property.
4. Miscellaneous
4.1 Entire Agreement
This Agreement shall be the whole and only agreement with regard to the matters set
forth herein and shall supersede and cancel, but only insofar as would affect the priority between
the Lender Deed of Trust and the Option Agreement, any prior agreement as to such
subordination including, but not limited to, those provisions, if any, contained in the Repurchase
Option or the DDA which provide for the subordination of the lien or charge thereof to another
deed or deeds of trust or to another mortgage or mortgages, upon the Property.
4.2 Successors and Assigns
This Agreement shall inure to and bind the heirs, legatees, devisees, administrators,
executors, successors and assigns of the parties hereto.
4.3 California Law
This Agreement shall be construed according to the laws of the State of California.
8821015610-0061
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4.4 Severability
If any term, provision, condition or covenant of this Agreement or the application thereof
to any ' party or circumstances shall, to any extent, be held invalid or unenforceable, the
remainder of this instrument, or the application of such 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 thereby, and each term and provision of this Agreement shall
be valid and enforceable to the fullest extent permitted by law.
4.5 Notice
Any notice, demand, request, consent, approval or communication that any party desires
or is required to give to another party or any other person must be in writing and may be given
by personal delivery, by mailing the same by registered or certified mail, return receipt
requested, postage prepaid, or by a reputable same day or overnight delivery service that
provides a receipt showing date and time of delivery, to the party to whom the notice is directed
at the address of such party hereinafter set forth, or such other address and to such other persons
as the parties may hereafter designate. Any such notice shall be deemed given (i) upon receipt if
by personal delivery or by delivery service, or (ii) forty-eight (48) hours after deposit in the
United States mail, if sent by mail pursuant to the foregoing.
If to Agency: La Quinta Redevelopment Agency
78495 Calle Tampico
La Quinta, CA 92253
Attention: Executive Director
With copy to: Rutan & Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, CA 92626-1998
Attn: M. Katherine Jenson
If to Developer: CP Development La Quinta, LLC
77-900 Avenue of the States
Palm Desert, CA 92211
Attn: Richard Oliphant
With copy to: My, Hemphill & Blasdell, LLP
777 E. Tahquitz Canyon Way, Suite 328
Palm Springs, CA 92262
Attn: Emily Perri Hemphill
And Genesis Hotel Development LLC
76890 Sandpiper Drive
Indian Wells, CA 92210
Attn: Francis A. Wong
882/015610-0061 _
639800.02 a09108/05 -5 .
If to Lender: 1" Centennial Bank
101 East Redlands Boulevard, Suite 106
Redlands, California 92373
Attn: Clifford N. Schnoonover.
With copy to: King & Associates
140 Newport Center Drive, Suite 250
Newport Beach, California 92660-6977
Attn: Raymond King
4.6 Attorneys' Fees
In the event that any action, suit or other proceeding is brought to enforce the obligations
under this Agreement, the prevailing party shall be entitled to receive all of such party's costs
and expenses of suit, including attorneys' fees, expert witness fees, and all costs incurred in each
and every action, suit or other proceeding, including any and all appeals or petitions therefrom.
4.7 Counterparts
This Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which shall constitute one and the same document.
[End — Signature Page Follows]
9821015610-0061
639800,02 a09/08/05 -6-
IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of
the date first written above.
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY
INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER
PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY
INSTRUMENTS.
"AGENCY"
APPROVED AS TO FORM
RUTAN & TUCKER, LLP
By:
Agency ounsel
LA QUINTA REDEVELOPMENT AGENCY, a
publie-beady orporate and oli
(�
Ey:T
Executive Director
"DEVELOPER"
CP DEVELOPMENT LA QUINTA, LLC, a
California limited liability company
By: Oliphant Family Trust
Its: Member
SIGNED IN COUNTERPART
Richard R. Oliphant
Its: Trustee
By: Oliphant Enterprises
Its: Manager SIGNED IN COUNTERPART
M.
Richard R. Olphant
Its: President
882/015610-0061 _
639800.02 a09/08/05 _7
IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of
the date first written above.
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY
INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER
PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY
INSTRUMENTS.
"AGENCY"
LA QUINTA REDEVELOPMENT AGENCY, a
pub"y orporate and I'
By:
Executive Director
h
L_..,. I►
APPROVED AS TO FORM
RUTAN & TUCKER, LLP
y: e ��7z�z
Agency ounsel
"DEVELOPER"
CP DEVELOPMENT LA QUINTA, LLC, a
California limited liability company
By: Oliphant Family Trust
Its:. Member
By; �,
Richard R. Olip t
Its: Trustee
By: Oliphant Enterprises
Its: Manager
By:
Richard k Olphant
Its: President
892/01561OM61
639800.02 a09/0W5
"LENDER"
I'T CENTENNIAL BANK
By.
cor-ftioru m. 6cnoonover
tS: Sr Vivo President
By: a,,U --
arl�een tezen es
Its: Vice President
882/015610-0061
639800.02 a%1080
STATE OF CALIFORNIA }
COUNTY OF ,F1�_�'"-5
Ongoobefore me, a -notary public, personally appeared
%h s a personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose narne(s) is/we. subscribed to -the within
instrument and acknowledged to me that he/ska4hey executed the same in hisUAlwir'
authorized capacity(ies), and that by his/ir signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
r
STATE OF CALIFORNIA )
) ss.
COUNTY OF ��tt4/—'rn�
) _
On 15105_ before me, a notary public, personally appeared
(C - , personally known to me (or Pr
to be the person(s) whose names) istare 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 signatures) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS nay hand and official seal.
Notary Public
(SEAL]
c. awwoaw
CommhWn #1 1521142
"ao" Pubc RWerJftcouMN
MY COMM. EVM Oct 22, 200ar
8821015610.0061
639800.02 A0910=5
STATE OF CALIFORNIA )
• ) COUNTY OF ) ss.
On I /,3 o'tOo.S' before me, a notary public, personally appeared
%1 personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/aye subscribed to the within
instrument and acknowledged to me that he/she ltey executed the same in his/heir
authorized capacity(ies), and that by his/kef4keir signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
STATE OF CALIFORNIA
COUNTY OF
On
Not ublic
)
ss.
before me, a notary public
personally known to me (or proved
personally appeared
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.
WITNESS my hand and official seal.
Notary Public
[SEAL]
882/015610-0061
639800.02 a09/08/05
GOVERNMENT CODE SECTION 27361.7
I CERTIFY UNDER THE PENALTY OF PERJURY THAT THE NOTARY STAMP
ON THE DOCUMENT TO WHICH THIS STATEMENT IS ATTACHED READS AS
FOLLOWS:
NAME OF NOTARY: REGENIA HENSLEY
COMMISSION NO. 1521423
DATE COMMISSION EXPIRES: OCT 23, 2008
DATE OF EXECUTION: SEPTEMBER 23, 2005
PLACE OF EXECUTION: COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA
GEOFF TAYLOR
STATE OF CALIFORNIA )
ss.
COUNTY OF J/W)
On L • 9 . before me, a notary public, personally appeared
0J� j j -1 , personally known to me (or 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.
WITNESS my hand and official seal.
Notary ubli
r
[SEAL]
SANDRA M. PARMER
Commission # 1374024
Z ; -m Notary Public - California Zz
San Bernardino County
My Comm. Expires Sep 10, 2006
882/015610-0061
639800.02 a09/08/05
ATTACHMENT NO. 1
LEGAL DESCRIPTION OF PROPERTY
PARCELS 1, 3 AND 5 THROUGH 9, INCLUSIVE, OF PARCEL MAP NO.
31116, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE -,*AS PER
MAP RECORDED IN BOOK 212 OF PARCEL MAPS, PAGES 60 TO 66,
RECORDS OF SAID COUNTY.
EXCEPTING THEREFROM ALL OIL, GAS, HYDROCARBON
SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER
LYING MORE THAN FIVE HUNDRED (500) FEET BELOW THE SURFACE,
TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH, AND TO USE
AND OCCUPY ALL PARTS OF THE PROPERTY LYING MORE THAN
FIVE HUNDRED (500) FEET BELOW THE SURFACE THEREOF FOR ANY
AND ALL PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND
PRODUCTION OF OIL, GAS, HYDROCARBON SUBSTANCES OR
MINERALS FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT,
HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE
PROPERTY OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500)
FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES
WHATSOEVER, OR TO USE THE PROPERTY IN SUCH A MANNER AS TO
CREATE A DISTURBANCE TO THE USE OR ENJOYMENT OF THE
PROPERTY, AS RESERVED IN THE DEED FROM LA QUINTA
REDEVELOPMENT AGENCY, RECORDED DECEMBER 9, 2004 AS
INSTRUMENT NO. 04-979137 OFFICIAL RECORDS.
882/015610-0061
639800.02 a09/08/05