2011 LQ Seniors LP - Subordination AgrmtSUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") is entered into this 26th day of May, 2011,
by and among (i) PNC BANK, NATIONAL ASSOCIATION, a national banking association (the "Senior Lender"),
(ii) LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Subordinate Lender"),
and (iii) QUINTA SENIORS L.P. a California limited partnership (the "Borrower").
Recitals
A. The Senior Lender has made or is making a loan (the "First Mortgage Loan") to the Borrower in the
original principal amount of $1,350,000. The First Mortgage Loan is or will be secured by a first lien Multifamily
Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (the "First Mortgage") on a multifamily
housing project located in La Quinta, California (the "Property"). The Property is more fully described in Exhibit A
attached hereto. The Borrower's obligation to repay the First Mortgage Loan is evidenced by a Multifamily Note
dated May 26, 2011 (the "First Mortgage Note"), and is due in full on June 1, 2018.
B. Subordinate Lender has made a loan to the Borrower in the original principal amount of $2,112,847
(the "Subordinate Loan"). The Borrower has requested the Subordinate Lender to permit the Senior Lender place
the First Mortgage as a senior lien against the Property by subordinating the Subordinate Loan to the lien of the First
Mortgage Loan, which will be secured by, among other things, placing a first mortgage lien against the Property.
C. The Subordinate Lender has agreed (1) to permit the Senior Lender to make the First Mortgage Loan
and to place a first mortgage lien against the Property, and (2) to subordinate the Subordinate Loan to the lien of
First Mortgage Loan, subject to all of the conditions contained in this Agreement.
D. The Senior Lender intends to sell, transfer and deliver the First Mortgage Note and assign the First
Mortgage to Fannie Mae.
NOW, THEREFORE, in order to induce the Subordinate Lender to permit the Senior Lender to make the
First Mortgage Loan to the Borrower and to place a first mortgage lien against the Property, and in consideration
thereof, the Senior Lender, the Subordinate Lender and the Borrower agree as follows:
1. Definitions.
In addition to the terms defined in the Recitals to this Agreement, for purposes of this Agreement the
following terms have the respective meanings set forth below:
"Affiliate" means, when used with respect to a Person, any corporation, partnership, joint venture,
limited liability company, limited liability partnership, trust or individual controlled by, under common
control with, or which controls such Person (the term "control" for these purposes shall mean the ability,
Fannie Mae Subordination Agreement -- Form 4503 10/98 (Page 1)
Affordable Housing
whether by the ownership of shares or other equity interests, by contract or otherwise, to elect a majority of
the directors of a corporation, to make management decisions on behalf of, or independently to select the
managing partner of, a partnership, or otherwise to have the power independently to remove and then select
a majority of those individuals exercising managerial authority over an entity, and control shall be
conclusively presumed in the case of the ownership of 50% or more of the equity interests).
"Borrower" means the Person named as such in the first paragraph of this Agreement and any other
Person (other than the Senior Lender) who acquires title to the Property after the date of this Agreement.
"Business Day" means any day other than Saturday, Sunday or a day on which the Senior Lender is
not open for business.
"Default Notice" means: (a) a copy of the written notice from the Senior Lender to the Borrower
stating that a First Mortgage Loan Default has occurred under the First Mortgage Loan; or (b) a copy of the
written notice from the Subordinate Lender to the Borrower stating that a Subordinate Loan Default has
occurred under the Subordinate Loan. Each Default Notice shall specify the default upon which such
Default Notice is based.
"First Mortgage Loan Default" means the occurrence of an 'Event of Default" as that term is defined
in the First Mortgage Loan Documents.
"First Mortgage Loan Documents" means the First Mortgage Note and the First Mortgage.
"Person" means an individual, estate, trust, partnership, corporation, limited liability company,
limited liability partnership, governmental department or agency or any other entity which has the legal
capacity to own property.
"Regulatory Agreement" means the Affordability Agreement (Agency Regulatory Agreement)
encumbering the Property in connection with the Subordinate Loan, recorded in the official records of
Riverside County, California, on October 28, 1994 as instrument number 415017. The Regulatory
Agreement is not a Subordinate Loan Document, and is not being subordinated to the First Mortgage
pursuant to this Agreement.
"Senior Lender" means the Person named as such in the first paragraph on page 1 of this Agreement.
When Fannie Mae or any other Person becomes the legal holder of the First Mortgage Note, Fannie Mae or
such other Person shall automatically become the Senior Lender.
"Subordinate Lender" means the Person named as such in the first paragraph on page 1 of this
Agreement and any other Person who becomes the legal holder of the Subordinate Note after the date of this
Agreement.
Fannie Mae Subordination Agreement -- Form 4503 10/98 (Page 2)
Affordable Housing
"Subordinate Loan Default" means a default by the Borrower in performing or observing any of the
terms, covenants or conditions in the Subordinate Loan Documents to be performed or observed by it, which
continues beyond any applicable period provided in the Subordinate Loan Documents for curing the default.
"Subordinate Loan Documents" means the Subordinate Note and the Subordinate Mortgage.
"Subordinate Mortgage" means the deed of trust encumbering the Property as security for the
Subordinate Loan, recorded in the official records of Riverside County, California, on October 28, 1994 as
instrument number 415018.
"Subordinate Note" means the promissory note dated October 25, 1994, in favor of the Subordinate
Lender evidencing the Subordinate Loan.
2. Permission to Maintain Mortgage Lien Against Property.
The Senior Lender agrees, notwithstanding the prohibition against inferior liens on the Property contained in
the First Mortgage Loan Documents and subject to the provisions of this Agreement, to permit the Subordinate
Lender to maintain the Subordinate Mortgage as a junior lien against the Property (which is subordinate in all
respects to the lien of the First Mortgage) to secure the Borrower's obligation to repay the Subordinate Note and all
other obligations, indebtedness and liabilities of the Borrower to the Subordinate Lender under and in connection
with the Subordinate Loan. Such permission is subject to the condition that each of the representations and
warranties made by the Borrower and the Subordinate Lender in Section 3 is true and correct on the date of this
Agreement and on the date on which the proceeds of the First Mortgage Loan are disbursed to the Borrower. If any
of the representations and warranties made by the Borrower and the Subordinate Lender in Section 3 is not true and
correct on both of those dates, the provisions of the First Mortgage Loan Documents applicable to unpermitted liens
on the Property shall apply.
3. Borrower's and Subordinate Lender's Representations and Warranties.
The Borrower and the Subordinate Lender each makes the following representations and warranties to the
Senior Lender:
(a) Subordinate Note. The rights and remedies of the payee and each subsequent holder of the
Subordinate Note under the Subordinate Mortgage are subject to the restrictions and limitations set forth in
this Subordination Agreement. Each subsequent holder of the Subordinate Note shall be deemed, by virtue
of such holder's acquisition of the Subordinate Note, to have agreed to perform and observe all of the terms,
covenants and conditions to be performed or observed by the Subordinate Lender under the Subordination
Agreement.
(b) Relationship of Borrower to Subordinate Lender and Senior Lender. The Subordinate
Lender is not an Affiliate of the Borrower and is not in possession of any facts which would lead it to
Fannie Mae Subordination Agreement -- Form 4503 10/98 (Page 3)
Affordable Housing
believe that the Senior Lender is an Affiliate of the Borrower.
(c) Term. The term of the Subordinate Note ends June 15, 2029, which is after the maturity of
the First Mortgage Note.
(d) Subordinate Loan Documents. Borrower has delivered to Senior Lender an executed copy
of each of the Subordinate Loan Documents, certified to be true, correct and complete.
(e) First Mortgage Loan Documents. The executed First Mortgage Loan Documents are
substantially in the same forms as, when applicable, those submitted to, and approved by, Fannie Mae prior
to the date of this Agreement. Upon execution and delivery of the First Mortgage Loan Documents,
Borrower shall deliver to Subordinate Lender an executed copy of each of the First Mortgage Loan
Documents, certified to be true, correct and complete.
4. Terms of Subordination.
(a) Agreement to Subordinate. The Senior Lender and the Subordinate Lender agree that: (i)
the indebtedness evidenced by the Subordinate Loan Documents is and shall be subordinated in right of
payment, to the extent and in the manner provided in this Agreement to the prior payment in full of the
indebtedness evidenced by the First Mortgage Loan Documents, and (ii) the Subordinate Mortgage and the
other Subordinate Loan Documents are and shall be subject and subordinate in all respects to the liens,
terms, covenants and conditions of the First Mortgage and the other First Mortgage Loan Documents and to
all advances heretofore made or which may hereafter be made pursuant to the First Mortgage and the other
First Mortgage Loan Documents (including but not limited to, all sums advanced for the purposes of (1)
protecting or further securing the lien of the First Mortgage, curing defaults by the Borrower under the First
Mortgage Loan Documents or for any other purpose expressly permitted by the First Mortgage, or (2)
constructing, renovating, repairing, furnishing, fixturing or equipping the Property).
(b) Subordination of Subrogation Rights. The Subordinate Lender agrees that if, by reason of
its payment of real estate taxes or other monetary obligations of the Borrower, or by reason of its exercise of
any other right or remedy under the Subordinate Loan Documents, it acquires by right of subrogation or
otherwise a lien on the Property which (but for this subsection) would be senior to the lien of the First
Mortgage, then, in that event, such lien shall be subject and subordinate to the lien of the First Mortgage.
(c) Payments Before First Mortgage Loan Default. Until the Subordinate Lender receives a
Default Notice of a First Mortgage Loan Default from the Senior Lender, the Subordinate Lender shall be
entitled to retain for its own account all payments made under or pursuant to the Subordinate Loan
Documents.
(d) Payments After First Mortgage Loan Default. The Borrower agrees that, after it receives
notice (or otherwise acquires knowledge) of a First Mortgage Loan Default, it will not make any payments
Fannie Mae Subordination Agreement -- Form 4603 10/98 (Page 4)
Affordable Housing
under or pursuant to the Subordinate Loan Documents (including but not limited to principal, interest,
additional interest, late payment charges, default interest, attorney's fees, or any other sums secured by the
Subordinate Mortgage) without the Senior Lender's prior written consent. The Subordinate Lender agrees
that, after it receives a Default Notice from the Senior Lender with written instructions directing the
Subordinate Lender not to accept payments from the Borrower on account of the Subordinate Loan, it will
not accept any payments under or pursuant to the Subordinate Loan Documents (including but not limited to
principal, interest, additional interest, late payment charges, default interest, attorney's fees, or any other
sums secured by the Subordinate Mortgage) without the Senior Lender's prior written consent. If the
Subordinate Lender receives written notice from the Senior Lender that the First Mortgage Loan Default
which gave rise to the Subordinate Lender's obligation not to accept payments has been cured, waived, or
otherwise suspended by the Senior Lender, the restrictions on payment to the Subordinate Lender in this
Section 4 shall terminate, and the Senior Lender shall have no right to any subsequent payments made to the
Subordinate Lender by the Borrower prior to the Subordinate Lender's receipt of a new Default Notice from
the Senior Lender in accordance with the provisions of this Section 4(d).
(e) Remitting Subordinate Loan Payments to Senior Lender. If, after the Subordinate
Lender receives a Default Notice from the Senior Lender in accordance with subsection (d) above, the
Subordinate Lender receives any payments under the Subordinate Loan Documents, the Subordinate Lender
agrees that such payment or other distribution will be received and held in trust for the Senior Lender and
unless the Senior Lender otherwise notifies the Subordinate Lender in writing, will be promptly remitted, in
kind to the Senior Lender, properly endorsed to the Senior Lender, to be applied to the principal of, interest
on and other amounts due under the First Mortgage Loan Documents in accordance with the provisions of
the First Mortgage Loan Documents. By executing this Agreement, the Borrower specifically authorizes the
Subordinate Lender to endorse and remit any such payments to the Senior Lender, and specifically waives
any and all rights to have such payments returned to the Borrower or credited against the Subordinate Loan.
Borrower and Senior Lender acknowledge and agree that payments received by the Subordinate Lender,
and remitted to the Senior Lender under this Section 4, shall not be applied or otherwise credited against the
Subordinate Loan, nor shall the tender of such payment to the Senior Lender waive any Subordinate Loan
Default which may arise from the inability of the Subordinate Lender to retain such payment or apply such
payment to the Subordinate Loan.
(f) Agreement Not to Commence Bankruptcy Proceeding. The Subordinate Lender agrees
that during the term of this Agreement it will not commence, or join with any other creditor in commencing
any bankruptcy reorganization, arrangement, insolvency or liquidation proceedings with respect to the
Borrower, without the Senior Lender's prior written consent.
5. Default Under Subordinate Loan Documents.
(a) Notice of Default and Cure Rights. The Subordinate Lender shall deliver to the Senior
Lender a Default Notice within five Business Days in each case where the Subordinate Lender has given a
Default Notice to the Borrower. Failure of the Subordinate Lender to send a Default Notice to the Senior
Fannie Mae Subordination Agreement -- Form 4503 10/98 (Page 5)
Affordable Housing
Lender shall not prevent the exercise of the Subordinate Lender's rights and remedies under the Subordinate
Loan Documents, subject to the provisions of this Agreement. The Senior Lender shall have the right, but
not the obligation, to cure any Subordinate Loan Default within 60 days following the date of such notice;
provided, however that the Subordinate Lender shall be entitled, during such 60-day period, to continue to
pursue its rights and remedies under the Subordinate Loan Documents. All amounts paid by the Senior
Lender in accordance with the First Mortgage Loan Documents to cure a Subordinate Loan Default shall be
deemed to have been advanced by the Senior Lender pursuant to, and shall be secured by the lien of, the
First Mortgage.
(b) Subordinate Lender's Exercise of Remedies After Notice to Senior Lender. If a
Subordinate Loan Default occurs and is continuing, the Subordinate Lender agrees that, without the Senior
Lender's prior written consent, it will not commence foreclosure proceedings with respect to the Property
under the Subordinate Loan Documents or exercise any other rights or remedies it may have under the
Subordinate Loan Documents, including, but not limited to accelerating the Subordinate Loan, collecting
rents, appointing (or seeking the appointment of) a receiver or exercising any other rights or remedies
thereunder unless and until it has given the Senior Lender at least 60 days' prior written notice; during such
60 day period, however, the Subordinate Lender shall be entitled to exercise and enforce all other rights and
remedies available to the Subordinate Lender under the Subordinate Loan Documents and/or under
applicable laws, including without limitation, rights to enforce covenants and agreements of the Borrower
relating to income, rent, or affordability restrictions contained in the Regulatory Agreement.
(c) Cross Default. The Borrower and the Subordinate Lender agree that a Subordinate Loan
Default shall constitute a First Mortgage Loan Default under the First Mortgage Loan Documents and the
Senior Lender shall have the right to exercise all rights or remedies under the First Mortgage Loan
Documents in the same manner as in the case of any other First Mortgage Loan Default. If the Subordinate
Lender notifies the Senior Lender in writing that any Subordinate Loan Default of which the Senior Lender
has received a Default Notice has been cured or waived, as determined by the Subordinate Lender in its sole
discretion, then provided that Senior Lender has not conducted a sale of the Property pursuant to its rights
under the First Mortgage Loan Documents, any First Mortgage Loan Default under the First Mortgage Loan
Documents arising solely from such Subordinate Loan Default shall be deemed cured, and the First
Mortgage Loan shall be reinstated, provided, however, that the Senior Lender shall not be required to return
or otherwise credit for the benefit of the Borrower any default rate interest or other default related charges or
payments received by the Senior Lender during such First Mortgage Loan Default.
6. Default Under First Mortgage Loan Documents.
(a) Notice of Default and Cure Rights. The Senior Lender shall deliver to the Subordinate
Lender a Default Notice within five Business Days in each case where the Senior Lender has given a
Default Notice to the Borrower. Failure of the Senior Lender to send a Default Notice to the Subordinate
Lender shall not prevent the exercise of the Senior Lender's rights and remedies under the First Mortgage
Loan Documents, subject to the provisions of this Agreement. The Subordinate Lender shall have the right,
Fannie Mae Subordination Agreement -- Form 4503 10/98 (Page 6)
Affordable Housing
but not the obligation, to cure any such First Mortgage Loan Default within 60 days following the date of
such notice; provided, however, that the Senior Lender shall be entitled during such 60-day period to
continue to pursue its remedies under the First Mortgage Loan Documents. Subordinate Lender may have
up to 90 days from the date of the Default Notice to cure a non -monetary default if during such 90-day
period Subordinate Lender keeps current all payments required by the First Mortgage Loan Documents. In
the event that such a non -monetary default creates an unacceptable level of risk relative to the Property, or
Senior Lender's secured position relative to the Property, as determined by Senior Lender in its sole
discretion, then Senior Lender may exercise during such 90-day period all available rights and remedies to
protect and preserve the Property and the rents, revenues and other proceeds from the Property. All amounts
paid by the Subordinate Lender to the Senior Lender to cure a First Mortgage Loan Default shall be deemed
to have been advanced by the Subordinate Lender pursuant to, and shall be secured by the lien of, the
Subordinate Mortgage.
(b) Cross Default. The Subordinate Lender agrees that, notwithstanding any contrary provision
contained in the Subordinate Loan Documents, a First Mortgage Loan Default shall not constitute a default
under the Subordinate Loan Documents if no other default occurred under the Subordinate Loan Documents
until either (i) the Senior Lender has accelerated the maturity of the First Mortgage Loan, or (ii) the Senior
Lender has taken affirmative action to exercise its rights under the First Mortgage to collect rent, to appoint
(or seek the appointment of) a receiver or to foreclose on (or to exercise a power of sale contained in) the
First Mortgage. At any time after a First Mortgage Loan Default is determined to constitute a default under
the Subordinate Loan Documents, the Subordinate Lender shall be permitted to pursue its remedies for
default under the Subordinate Loan Documents, subject to the restrictions and limitations of this Agreement.
If at any time the Borrower cures any First Mortgage Loan Default to the satisfaction of the Senior Lender,
as evidenced by written notice from the Senior lender to the Subordinate Lender, any default under the
Subordinate Loan Documents arising from such First Mortgage Loan Default shall be deemed cured and the
Subordinate Loan shall be retroactively reinstated as if such First Mortgage Loan Default had never
occurred.
7. Conflict.
The Borrower, the Senior Lender and the Subordinate Lender each agrees that, in the event of any conflict
or inconsistency between the terms of the First Mortgage Loan Documents, the Subordinate Loan Documents and
the terms of this Agreement, the terms of this Agreement shall govern and control solely as to the following: (a) the
relative priority of the security interests of the Senior Lender and the Subordinate Lender in the Property; (b) the
timing of the exercise of remedies by the Senior Lender and the Subordinate Lender under the First Mortgage and
the Subordinate Mortgage, respectively; and (c) solely as between the Senior Lender and the Subordinate Lender,
the notice requirements, cure rights, and the other rights and obligations which the Senior Lender and the
Subordinate Lender have agreed to as expressly provided in this Agreement. Borrower acknowledges that the terms
and provisions of this Agreement shall not, and shall not be deemed to: extend Borrower's time to cure any First
Mortgage Loan Default or Subordinate Loan Default, as the case may be; give the Borrower the right to notice of
any First Mortgage Loan Default or Subordinate Loan Default, as the case may be other than that, if any, provided,
Fannie Mae Subordination Agreement -- Form 4503 10/98 (Page 7)
Affordable Housing
respectively under the First Mortgage Loan Documents or the Subordinate Loan Documents; or create any other
right or benefit for Borrower as against Senior Lender or Subordinate Lender.
8. Rights and Obligations of the Subordinate Lender Under the Subordinate Loan Documents
and of the Senior Lender under the First Mortgage Loan Documents.
Subject to each of the other terms of this Agreement, all of the following provisions shall supersede any
provisions of the Subordinate Loan Documents covering the same subject matter:
(a) Protection of Security Interest. The Subordinate Lender shall not, without the prior
written consent of the Senior Lender in each instance, take any action which has the effect of increasing the
indebtedness outstanding under, or secured by, the Subordinate Loan Documents, except that the
Subordinate Lender shall have the right to advance funds to cure First Mortgage Loan Defaults pursuant to
Section 6(a) above and advance funds pursuant to the Subordinate Mortgage for the purpose of paying real
estate taxes and insurance premiums, making necessary repairs to the Property and curing other defaults by
the Borrower under the Subordinate Loan Documents.
(b) Condemnation or Casualty. In the event of a taking or threatened taking by condemnation
or other exercise of eminent domain of all or a portion of the Property (collectively, a "Taking"); or the
occurrence of a fire or other casualty resulting in damage to all or a portion of the Property (collectively, a
"Casualty"), at any time or times when the First Mortgage remains a lien on the Property the following
provisions shall apply:
(1) The Subordinate Lender hereby agrees that its rights (under the Subordinate Loan
Documents or otherwise) to participate in any proceeding or action relating to a Taking and/or a
Casualty, or to participate or join in any settlement of, or to adjust, any claims resulting from a
Taking or a Casualty shall be and remain subordinate in all respects to the Senior Lender's rights
under the First Mortgage Loan Documents with respect thereto, and the Subordinate Lender shall be
bound by any settlement or adjustment of a claim resulting from a Taking or a Casualty made by the
Senior Lender; provided, however, this subsection and/or anything contained in this Agreement shall
not limit the rights of the Subordinate Lender to file any pleadings, documents, claims or notices
with the appropriate court with jurisdiction over the proposed Taking and/or Casualty; and
(2) all proceeds received or to be received on account of a Taking or a Casualty, or both,
shall be applied (either to payment of the costs and expenses of repair and restoration or to payment
of the First Mortgage Loan) in the manner determined by the Senior Lender in its sole discretion;
provided, however, that if the Senior Lender elects to apply such proceeds to payment of the
principal of, interest on and other amounts payable under the First Mortgage Loan, any proceeds
remaining after the satisfaction in full of the principal of, interest on and other amounts payable
under the First Mortgage Loan shall be paid to, and may be applied by, the Subordinate Lender in
accordance with the applicable provisions of the Subordinate Loan Documents, provided however,
Fannie Mae Subordination Agreement -- Form 4503 10/98 (Page 8)
Affordable Housing
the Senior Lender agrees to consult with the Subordinate Lender in determining the application of
Casualty proceeds, provided further however that in the event of any disagreement between the
Senior Lender and the Subordinate Lender over the application of Casualty proceeds, the decision of
the Senior Lender, in its sole discretion, shall prevail.
(c) No Modification of Subordinate Loan Documents. The Borrower and the Subordinate
Lender each agrees that, until the principal of, interest on and all other amounts payable under the First
Mortgage Loan Documents have been paid in full, it will not, without the prior written consent of the Senior
Lender in each instance, increase the amount of the Subordinate Loan, increase the required payments due
under the Subordinate Loan, decrease the term of the Subordinate Loan, increase the interest rate on the
Subordinate Loan, or otherwise amend the Subordinate Loan terms in a manner that creates an adverse
effect upon the Senior Lender under the First Mortgage Loan Documents. Any unauthorized amendment of
the Subordinate Loan Documents or assignment of the Subordinate Lender's interest in the Subordinate
Loan without the Senior Lender's consent shall be void ab initio and of no effect whatsoever.
9. Modification or Refinancing of First Mortgage Loan.
The Subordinate Lender consents to any agreement or arrangement in which the Senior Lender waives,
postpones, extends, reduces or modifies any provisions of the First Mortgage Loan Documents, including any
provision requiring the payment of money. Subordinate Lender further agrees that its agreement to subordinate
hereunder shall extend to any new mortgage debt which is for the purpose of refinancing all or any part of the First
Mortgage Loan (including reasonable and necessary costs associated with the closing and/or the refinancing); and
that all the terms and covenants of this Agreement shall inure to the benefit of any holder of any such refinanced
debt; and that all references to the First Mortgage Loan, the First Mortgage Note, the First Mortgage, the First
Mortgage Loan Documents and Senior Lender shall mean, respectively, the refinance loan, the refinance note, the
mortgage securing the refinance note, all documents evidencing securing or otherwise pertaining to the refinance
note and the holder of the refinance note.
10. Default by the Subordinate Lender or Senior Lender.
If the Subordinate Lender or Senior Lender defaults in performing or observing any of the terms, covenants
or conditions to be performed or observed by it under this Agreement, the other, non -defaulting lender shall have
the right to all available legal and equitable relief.
Fannie Mae Subordination Agreement -- Form 4503 10/98 (Page 9)
Affordable Housing
11. Notices. Each notice, request, demand, consent, approval or other communication (hereinafter
in this Section referred to collectively as "notices" and referred to singly as a "notice") which the Senior Lender or
the Subordinate Lender is required or permitted to give to the other party pursuant to this Agreement shall be in
writing and shall be deemed to have been duly and sufficiently given if: (a) personally delivered with proof of
delivery thereof (any notice so delivered shall be deemed to have been received at the time so delivered); or (b) sent
by Federal Express (or other similar national overnight courier) designating early morning delivery (any notice so
delivered shall be deemed to have been received on the next Business Day following receipt by the courier); or (c)
sent by United States registered or certified mail, return receipt requested, postage prepaid, at a post office regularly
maintained by the United States Postal Service (any notice so sent shall be deemed to have been received two days
after mailing in the United States), addressed to the respective parties as follows:
SENIOR LENDER:
PNC Bank, National Association
26901 Agoura Road, Suite 200
Calabasas Hills, CA 91301
Attn: Loan Servicing
With a copy to:
Fannie Mae
Attn: Multifamily Operations - Asset Management
Drawer AM
3900 Wisconsin Avenue, N.W.
Washington, DC 20016
SUBORDINATE LENDER:
La Quinta Redevelopment Agency
(if by hand delivery or overnight messenger):
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
(if by U.S. Mail):
P.O. Box 1504
La Quinta, CA 92247
Attn: Executive Director
FOOMMOMM
Fannie Mae Subordination Agreement -- Form 4503 10/98 (Page 10)
Affordable Housing
La Quinta Senior L.P.
110 Pine Avenue, Suite 500
Long Beach, CA 90802-4422
Attn: Project Manager
Either party may, by notice given pursuant to this Section, change the person or persons and/or address or addresses,
or designate an additional person or persons or an additional address or addresses for its notices, but notice of a
change of address shall only be effective upon receipt.
(i) General.
(i) Assignment/Successors. This Agreement shall be binding upon the Borrower, the Senior
Lender and the Subordinate Lender and shall inure to the benefit of the respective legal
successors and assigns of the Senior Lender and the Subordinate Lender.
(i) No Partnership or Joint Venture. The Senior Lender's permission for the placement of
the Subordinate Loan Documents does not constitute the Senior Lender as a joint venturer or
partner of the Subordinate Lender. Neither party hereto shall hold itself out as a partner,
agent or Affiliate of the other party hereto.
(i) Senior Lender's and Subordinate Lender's Consent. Wherever the Senior Lender's
consent or approval is required by any provision of this Agreement, such consent or approval
may be granted or denied by the Senior Lender in its sole and absolute discretion, unless
otherwise expressly provided in this Agreement. Wherever the Subordinate Lender's
consent or approval is required by any provision of this Agreement, such consent or approval
may be granted or denied by the Subordinate Lender in its sole and absolute discretion,
unless otherwise expressly provided in this Agreement.
(i) Further Assurances. The Subordinate Lender, the Senior Lender and the Borrower each
agree, at the Borrower's expense, to execute and deliver all additional instruments and/or
documents reasonably required by any other party to this Agreement in order to evidence
that the Subordinate Mortgage is subordinate to the lien, covenants and conditions of the
First Mortgage, or to further evidence the intent of this Agreement.
(i) Amendment. This Agreement shall not be amended except by written instrument signed by
all parties hereto.
(i) Governing Law. This Agreement shall be governed by the laws of the State in which the
Property is located.
Fannie Mae Subordination Agreement -- Form 4503 10/98 (Pagel 1)
Affordable Housing
(i) Severable Provisions. If any provision of this Agreement shall be invalid or unenforceable
to any extent, then the other provisions of this Agreement, shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.
(i) Term. The term of this Agreement shall commence on the date hereof and shall continue
until the earliest to occur of the following events: (i) the payment of all of the principal of,
interest on and other amounts payable under the First Mortgage Loan Documents; (ii) the
payment of all of the principal of, interest on and other amounts payable under the
Subordinate Loan Documents, other than by reason of payments which the Subordinate
Lender is obligated to remit to the Senior Lender pursuant to Section 4 hereof; (iii) the
acquisition by the Senior Lender of title to the Property pursuant to a foreclosure or a deed in
lieu of foreclosure of, or the exercise of a power of sale contained in, the First Mortgage; or
(iv) the acquisition by the Subordinate Lender of title to the Property pursuant to a fore-
closure or a deed in lieu of foreclosure of, or the exercise of a power of sale contained in, the
Subordinate Mortgage, but only if such acquisition of title does not violate any of the terms
of this Agreement.
(i) Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be considered an original for all purposes; provided, however, that all such counterparts shall
together constitute one and the same instrument.
[Remainder of this page intentionally left blank]
Fannie Mae Subordination Agreement -- Form 4503 10/98 (Page 12)
Affordable Housing
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written
above.
SENIOR LENDER:
PNC BANK, NATIONAL ASSOCIATION,
a national banking association
ma
Kelli A. Tyler
Its: Vice President
SUBORDINATE LENDER:
LA QUINTA REDEVELOPMENT AGENCY,
a r ba y, corporate an of i '
Date: 2011 By
Executive Director
c
Veronica J. Mor cino, CMC
Agency Secre ry
APPROVED AS TO FORM:
RUTAN& T CKER/)_ LLP
n
J ! / 1/1
LN
Jenson, Akenr,� Counsel
[signatures continue on following page]
qAt
Fannie Mae Subordination Agreement -- Form 4503 10/98 (Page 13)
Affordable Housing
LA QUINTA SENIORS L.P.,
a California limited partnership
By: LINC Housing Corporation
Its: General Partner
By:
Karen N. Maeshima
Its: VP/CFO
[Notary acknowledgements to be added]
[Legal Description to be added]
Fannie Mae Subordination Agreement -- Form 4503 10/98 (Page 14)
Affordable Housing
State of California
County of Riverside
On May 18, 2011, before me, SUSAN MAYSELS, Notary Public, personally
appeared THOMAS P. GENOVESE who proved to me on the basis of
satisfactory evidence to be the person whose name is subscribed to the
within instrument, and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the
instrument.
I certify under PENALTY OF PERJURY under the laws of the State of
California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal. SUSAN MAYSEILS
COMM, #t 844479 y�
NOTARY PUBLIC s CALIFORNIA�
RIVERSIDE COUNTY
comff salon E*es APR 13, 2013 i
Signature
(seal)
DOCUMENT:
Subordination Agreement among PNC Bank National Association,
La Quinta Redevelopment Agency and La Quinta Seniors LP.
Exhibit A
Legal Description
Real property in the City of La Quinta, County of Riverside, State of California,
described as follows:
LOT 1 OF TRACT NO.28019, IN THE CITY OF LA QUINTA, COUNTY OF
RIVERSIDE, STATE OF CALIFORNIA AS PER MAP RECORDED IN BOOK
252 PAGE (S) 85 TO 89 INCLUSIVE OF MAPS, IN THE OFFICE OF THE
COUNTY RECORDER 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 OR TO USE
AND OCCUPY ALL PARTS OF THE SITE 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 SITE OR OTHER LANDS, BUT WITHOUT,
HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF THE SITE
OR ANY PORTION THEREOF WITHIN FIVE HUNDRED (500) FEET OF
THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, OR
TO USE THE SITE IN SUCH A MANNER AS TO CREATE A
DISTURBANCE TO THE USE OR ENJOYMENT OF THE SITE.
AS RESERVED BY LA QUINTA REDEVELOPMENT AGENCY, A PUBLIC
BODY CORPORATE AND POLITIC, IN DEED RECORDED OCTOBER 28,
1994 AS INSTRUMENT NO. 94-415016 OFFICIAL RECORDS.
APN: 770-020-013-2 and 770-020-014-3
Fannie Mae Subordination Agreement -- Form 4503 10/98 (Page 15)
Affordable Housing