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2004 Centre Pointe - Subordination Agreement - CP Development. LLCRecording Requested BY First American Title Company Recording Requested By And When Recorded Mail To: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attention: Executive Director DOC a 2004-OS70142 12/09/2004 08:00A Fee:NC Page 1 of 13 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk & Recorder M S U PA6'E SIZE DA I PCOR NOCOR SMF MISC. 4NCHGXAM A I R L COPY I LONG I REFUND []Exempt From kewrding Fee Per Gov. Cone § 6103] SUBORDINATION AGREEMENT SG 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. THIS SUBORDINATION AGREEMENT ("Agreement") is entered into as of December q, 2004, 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 1" CENTENNIAL BANK ("Lender"). RECITALS A. Developer owns fee title to the real property described on Attachment No. "1" attached hereto and incorporated herein by reference (the "Property"). B. Agency and Developer have entered into that certain Disposition and Development Agreement dated December 18, 2003, and amended October 28, 2004 (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 (13 6) condominium/casita units; two (2) sit-down restaurants; a residential development containing thirteen (13) 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 (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 the Repurchase Option. Developer has EPH/GENESIS/ SUBORDINATION executed the Repurchase Option and that document was recorded in the official records of the County Recorder for the County of Riverside, California on the same herewith. D. 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 November 8, 2004 in the sum of Twenty -One Million, Six Hundred and Twenty -Eight Thousand Dollars ($21,628,000.00) (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"). E. 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. F. 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: 1. 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. 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 Repurchase Option 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 Agency 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 EPII/GENESIS/ 2 SUBORDINATION obligations are being and will be entered into which would not be made or entered into but for such reliance upon this subordination. 3. 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 Repurchase Option 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 Repurchase Option. 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. EPH/GENESIS/ 3 SUBORDINATION 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 Repurchase Option, 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. 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. EPWGENESIS/ 4 SUBORDINATION 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 78-495 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: 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: Ealy, 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 EPINGENESIS/ 5 SUBORDINATION If to Lender: 1 St 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 of 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. 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. f au R "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic r7>1 By: Executive Director EPH/GENESIS/ SUBORDINATION on APPROVED AS TO FORM RUTAN & TUCKER, LLP By: Agency Counsel "DEVELOPER" CP DEVELOPMENT LA A, LLC, a Californi lifted lia ' lity om an By: Its: tLA. Me-A119EW-- [Signatures Continued on Next Page] EPH/GENESIS/ SUBORDINATION "LENDER" 1 sT CE NNIAL BANK By: V n Its: By: 6aAj� Its: V- P [End of Signatures] [Remainder of Page Intentionally Left Blank] EPH/GENESIS/ SUBORDINATION STATE OF CALIFORNIA ) ss: COUNTY OF ) On� . � �ooL before me, a notary public, personally appeared —7,1c 6ar d ri�nT personally known to me (of prevcd to fHo ^" the >,""sof to be the person(s) whose name(s) is/.am subscribed to the within instrument and acknowledged to me that heAshefthcy executed the same in hisAkef4heir authorized capacity(ies), and that by his/herAiwir 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. [S Conx16"I f 1WA$ NOW;Zo - CWMW RhW*s county I* MyCgYm.E>�iresOCt2�, 2a1d STATE OF CALIFORNIA ) ) ss. COUNTY O � ) On o O o before me, a notary public, personally appeared 7;6 • ;: �..(or;; +„ mp nn tlx: haef p personally known to me �-� c to be the person(s) whose name(s) is/ar-e—subscribed to the within instrument and acknowledged to me that he/sheAhey- executed the same in his/h@4thQ4r authorized capacity(ies), and that by his/herkheir 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. [SEAL] Conwrrion # NiQi�!;1 No�aiy R�bNc • CaNbmio Wenido County Ibly Comm. E0w OCt 2& 2n8 EPH/GENESIS/ 9 SUBORDINATION STATE OF CALIFORNIA ) . ) ss. COUNTY OF 'y m/no) On � 6d before me, a notary public, personally appeared -_— 1016 1 ersonally known to me ed on tis e e to be the person(s) whose name(s) )(are subscribed to the within instrument and acknowledged to me that V/W/they executed the same in *er/their authorized capacity(ies), and that by h(sr/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 ublic [SEAL] ��. SANDRA M. PARMER 1. M Commission # 1374024 Z = ��' Notary Public - California Z San Bernardino County > My Comm. Expires Sep IQ 2006 EPH/GENESIS/ 10 SUBORDINATION ATTACHMENT NO. 1 LEGAL DESCRIPTION OF PROPERTY IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, THAT PORTION OF THE SOUTH HALF OF SECTION 19, TOWNSHIP 5 SOUTH, RANGE 7 EAST, S.B.M., MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT THE CENTER ONE -QUARTER CORNER OF SAID SECTION 19, ALSO BEING AND ANGLE POINT IN THE CENTERLINE OF MILES AVENUE AS SHOWN ON TRACT NO. 23971-15 ON FILE IN BOOK 213 AT PAGES 25 THROUGH 30, INCLUSIVE, OF MAPS, RIVERSIDE COUNTY RECORDS; THENCE SOUTH 00027138" EAST, A DISTANCE OF 75.00 FEET TO A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE AND THE TRUE POINT OF BEGINNING; THENCE NORTH 89033'22" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 960.27 FEET; THENCE NORTH 00026'40" WEST, A DISTANCE OF 20.00 FEET TO A LINE PARALLEL WITH AND 55.00 FEET SOUTHERLY OF SAID CENTERLINE OF MILES AVENUE; THENCE NORTH 89033'22" EAST ALONG LAST SAID PARALLEL LINE, A DISTANCE OF 80.00 FEET; THENCE SOUTH 00026'40" EAST, A DISTANCE OF 112.88 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 440.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41 °42'33 % AN ARC DISTANCE OF 320.30 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 44044132" EAST, A DISTANCE OF 90.06 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 80.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45027'41 % AN ARC DISTANCE OF 63.48 FEET; THENCE TANGENT TO SAID CURVE NORTH 89047'47" EAST, A DISTANCE OF 239.56 FEET TO A POINT ON THE EASTERLY LINE OF PARCEL "C" AS DESCRIBED IN DEED TO STAMKO DEVELOPMENT CO. RECORDED MAY 16, 1994 AS INSTRUMENT NO. 10897% O.R. EPH/GENESIS/ SUBORDINATION THENCE SOUTH 00012' 13" EAST ALONG SAID EASTERLY LINE, A DISTANCE. OF 790.73 FEET TO AN ANGLE POINT THEREIN; THENCE SOUTH 43056'42' WEST ALONG THE SOUTHEASTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 510.61 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 4565.17 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 42059'27 EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND THE SOUTHWESTERLY LINE OF SAID PARCEL "C" THROUGH A CENTRAL ANGLE OF 02057'46"5 AN ARC DISTANCE OF 236.07 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 00017'57" EAST ALONG AN EASTERLY LINE OF SAID PARCEL "C" A DISTANCE OF 11.03 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT A, BEING ON THE NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL AS SHOWN ON C.V.W.D. RIGHT-OF-WAY STATUS MAP DATED APRIL 4, 1968, DRAWING NO. 1758-10; THENCE CONTINUING SOUTH 00017'57" EAST ALONG LAST SAID EASTERLY LINE OF PARCEL "C", A DISTANCE OF 386.46 FEET; THENCE NORTH 48009'56" WEST ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL "C", A DISTANCE OF 22.00 FEET TO AN ANGLE POINT THEREIN; THENCE CONTINUING ALONG THE SOUTHWESTERLY LINE OF SAID PARCEL licit AND ITS NORTHWESTERLY PROLONGATION NORTH 64021'03" WEST, A DISTANCE OF 444.84 FEET TO AN ANGLE POINT IN THE SOUTHWESTERLY LINE OF PARCEL 2 AS DESCRIBED IN DEED TO THE LA QUINTA REDEVELOPMENT AGENCY RECORDED AUGUST 4, 1995 AS INSTRUMENT NO.255528, O.R. THENCE NORTH 58014'00" WEST ALONG SAID SOUTHWESTERLY LINE OF PARCEL 2, A DISTANCE OF 320.54 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 86011'26" EAST; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 11 005'41 ", AN ARC DISTANCE OF 401.22 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 75033102" EAST, A DISTANCE OF 4.22 FEET TO A POINT ON AFOREMENTIONED NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 17033123" EAST; THENCE SOUTHEASTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 00032'28", AN ARC DISTANCE OF 23.61 FEET TO A POINT HEREINAFTER EPH/GENESIS/ 2 SUBORDINATION REFERRED TO AS POINT B, SAID POINT ALSO BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 75053'46" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 07041'06 % AN ARC DISTANCE OF 280.60 FEET; THENCE NON -TANGENT TO SAID CURVE SOUTH 67006156" WEST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2072.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 68013' 18" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 02012'44", AN ARC DISTANCE OF 80.00 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 67006156" EAST, A DISTANCE OF 20.00 FEET TO A POINT ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2092.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 66001' 12" EAST; THENCE NORTHWESTERLY ALONG LAST SAID CURVE THROUGH A CENTRAL ANGLE OF 19058'08", AN ARC DISTANCE OF 729.11 FEET; THENCE NON -TANGENT TO SAID CURVE NORTH 00028137" WEST, A DISTANCE OF 153.41 FEET TO A POINT ON A LINE PARALLEL WITH AND 75.00 FEET SOUTHERLY OF THE AFOREMENTIONED CENTERLINE OF MILES AVENUE; THENCE NORTH 89031'23" EAST ALONG SAID PARALLEL LINE, A DISTANCE OF 487.01 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION LYING SOUTHWESTERLY OF SAID NORTHEASTERLY RIGHT-OF-WAY LINE OF THE COACHELLA VALLEY WATER DISTRICT FLOOD CHANNEL, SAID LINE BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT AFOREMENTIONED POINT A IN SAID NORTHEASTERLY RIGHT-OF- WAY LINE, SAID POINT BEING ON A NON -TANGENT CURVE, CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 2500.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 36057'27" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE AND SAID NORTHEASTERLY RIGHT-OF-WAY LINE THROUGH A CENTRAL ANGLE OF 18051'35", AN ARC DISTANCE OF 822.91 FEET TO AFOREMENTIONED POINT B. SUBJECT TO ALL RIGHTS -OF -WAY AND EASEMENTS OF RECORD. COMPRISING 42.47 ACRES (1,85000 SQUARE FEET), MORE OR LESS. EPWGENESIS/ 3 SUBORDINATION