Catellus/Subordination Agree 98RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Loeb & Loeb LLP
1000 Wilshire Boulevard, Suite 1800
Los Angeles, CA 90017
Attn: Ronald Weinstein, Esq.
SUBORDINATION AGREEMENT
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 INSTRUMENT.
THIS SUBORDINATION AGREEMENT (this "Agreement") is made as of this 16th
day of November, 1998, by LA QUINTA REDEVELOPMENT AGENCY, a public
body corporate and politic ("Agency"), in favor of SANWA BANK CALIFORNIA, a
California corporation ("Lender").
RECITALS
A. Pursuant to the terms and provisions of that certain Affordable Housing
Agreement dated 10 —6, , 1998 (as at any time amended or
supplemented, the "Housing Agreement"), between Agency and Catellus
Residential Group, Inc., a California corporation, as assigned by Catellus
Residential Group, Inc. to Catellus Residential Communities, Inc., a California
corporation ("Developer"), Agency has agreed to provide financial assistance to
Developer (the "Agency Assistance"), for the acquisition and development of
certain real property more particularly described in Exhibit A attached hereto
(which real property, together with all improvements now or hereafter located
thereon is hereinafter referred to as the "Property"), upon which Property
Developer shall construct housing and apartment units for households of limited
incomes (the 'Project").
B. The Agency Assistance is to be evidenced by, among other documents, a
promissory note in the principal sum of up to Ten Million Three Hundred Fifty -
Two Thousand Five Hundred Twenty -Five Dollars ($10,352,525), executed by
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Developer in favor of Agency (as at any time amended or supplemented, the
"Subordinated Note"), and secured by a deed of trust encumbering the Property in
favor of Agency, as beneficiary (as at any time amended or supplemented, the
"Subordinated Deed of Trust"). Pursuant to the terms of the Housing Agreement,
Developer shall also enter into a Declaration of Conditions, Covenants and
Restrictions with Agency encumbering the Property (as at any time amended or
supplemented, the "CC&Rs"). The Housing Agreement, the Subordinated Deed of
Trust, the CC&Rs, the Subordinated Note and any and all other documents in
connection therewith, and any and all extensions, consolidations, modifications,
refundings, supplements, renewals and/or replacements of any of the foregoing,
are collectively referred to herein as the "Subordinated Documents."
C. To facilitate construction of the Project, Lender has agreed to make a loan (the
"Construction Loan") to Developer pursuant to the terms of a Construction Loan
Agreement dated November 16, 1998, between Lender and Developer (the
"Construction Loan Agreement"). The Construction Loan is to be evidenced by,
among other documents, a revolving promissory note in a principal sum not
exceeding Five Million Dollars ($5,000,000) at any one time up to the Aggregate
Disbursement Limitation (as defined in the Construction Loan Agreement), in
favor of Lender (as at any time amended or supplemented, the "Senior Note"), and
secured by a deed of trust encumbering the Property in favor of Lender, as
beneficiary (as at any time amended or supplemented, the "Senior Deed of Trust").
The Construction Loan Agreement, Senior Note, Senior Deed of Trust and all
other documents executed in connection with the Construction Loan are
collectively referred to herein as the "Senior Loan Documents."
D. As a condition to making the Construction Loan, Lender requires that the Senior
Deed of Trust be unconditionally and at all times remain a lien on the Property,
prior and superior to all the rights of Agency under the Subordinated Documents
with respect to the Property (collectively, the "Agency Subordinated Rights"), and
that Agency specifically and unconditionally subordinate the Subordinated Deed of
Trust to the lien of the Senior Deed of Trust.
E. Agency and Lender agree to the subordination in favor of Lender.
NOW THEREFORE, for valuable consideration, and to induce Lender to make the
Loan, Agency and Lender hereby agree for the benefit of Lender as follows:
1. SUBORDINATION. Lender and Agency hereby agree that:
1.1 The Senior Deed of Trust shall unconditionally be and at all times remain a
lien on the Property prior and superior to the Subordinated Deed of Trust and
the Agency Subordinated Rights; and
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1.2 This Agreement shall be the whole agreement and only agreement with
regard to the subordination of the Subordinated Deed of Trust and the
Agency Subordinated Rights to the lien of the Senior Deed of Trust and shall
supersede and cancel, but only insofar as would affect the priority between
the Senior Deed of Trust and the Subordinated Deed of Trust and Agency
Subordinated Rights, any prior agreements as to such subordination,
including, without limitation, those provisions, if any, contained in the
Subordinated Documents which provide for the subordination of any
Subordinated Document to a deed or deeds of trust or to a mortgage or
mortgages.
AND FURTHER, Agency individually declares, agrees and acknowledges for the
benefit of Lender, that:
1.3 Lender, in making disbursements pursuant to the Senior Note, the Senior
Deed of Trust or any loan agreements with respect to the Property, 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 Lender
disburses such proceeds, and any application or use of such proceeds for
purposes other than those provided for in such agreement or agreements or
the Subordinated Documents shall not defeat this subordination in whole or
in part; and
1.4 Agency intentionally and unconditionally waives, relinquishes and subordi-
nates all of Agency's right, title and interest in and to the Property to the lien
of the Senior Deed of Trust and understands that in reliance upon, and in
consideration of, this waiver, relinquishment and subordination, specific loans
and advances are being and will be made by Lender 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 said reliance upon this
waiver, relinquishment and subordination.
2. MISCELLANEOUS
2.1 Agency Notice of Default. Agency will notify Lender in writing
concurrently with any notice given to Developer of any default by Developer
under the Subordinated Documents, and Agency agrees that Lender has the
right (but not the obligation) to cure any breach or default specified in such
notice within fifteen (15) days from and after the expiration of the time
period provided in the Subordinated Documents for the cure thereof by
Developer; roR vided, however, that if such default cannot with diligence be
cured by Lender within such fifteen (15) day period, the commencement of
action by Lender within such fifteen (15) day period to remedy the same
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shall be deemed sufficient so long as Lender pursues such cure with
diligence.
2.2 Lender Notice of Default. Lender will notify Agency in writing concurrently
with any notice given to Developer of any default by Developer under the
Senior Loan Documents, and Lender agrees that Agency has the right (but
not the obligation) to cure any breach or default specified in such notice
within thirty (30) days from and after the expiration of the time period
provided in the Senior Loan Documents for the cure thereof by Developer.
2.3 Exceptions to Subordination. Notwithstanding anything to the contrary
contained in this Agreement, Lender, for itself and its successors and assigns,
covenants and agrees that upon succeeding to ownership of the Property:
(a) It shall not use the Property for a use which is not specified in
the Redevelopment Plan (as defined in the Housing Agreement
and as in effect as of the date of this Agreement); and
(b) It shall comply with the nondiscrimination covenants contained
in Section 4 of the CC&R's.
The foregoing covenants shall run with the land.
2.4 Waiver of Vendor's Lien. Agency, for itself and for all parties claiming
through or under Agency, hereby intentionally and unconditionally waives
any and all rights to a vendor's lien with respect to the Property related to or
arising from the Agency financing provided to Developer with respect to the
Property, including, without limitation, any and all benefits under California
Civil Code Section 3046.
2.5 Heirs, Successors, Assigns and Transferees. The covenants herein shall be
binding upon, and inure to the benefit of, the heirs, successors and assigns of
the parties hereto.
2.6 Notices. All notices or other communications required or permitted to be
given pursuant to the provisions hereof shall be deemed served upon delivery
or, if mailed, upon the first to occur of receipt or the expiration of three (3)
days after deposit in United States Postal Service, certified mail, postage
prepaid and addressed to the address of Agency appearing below:
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"AGENCY"
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, California 92253
"LENDER"
SANWA BANK CALIFORNIA
Attn: Real Estate Loan Administration
4041 MacArthur Boulevard, Suite 100
Newport Beach, California 92660
With copies to:
SANWA BANK CALIFORNIA
Attn: Jeffrey M. Bloom
4041 MacArthur Boulevard, Suite 100
Newport Beach, California 92660
LOEB & LOEB LLP
Attn: Ronald Weinstein, Esq.
1000 Wilshire Boulevard, Suite 1800
Los Angeles, California 90017
3. INCORPORATION. Exhibit A is attached hereto and incorporated herein by this
reference.
NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A
PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON
YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN, A
PORTION OF WHICH MAY BE EXPENDED FOR PURPOSES
OTHER THAN IMPROVEMENT OF THE LAND.
IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS
AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH
RESPECT HERETO.
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IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
day and year first written above.
"AGENCY"
LA QUINTA REDEVELOPMENT AGENCY, a
public body corporate and politic
By:
Name: Ron Perkins
Its: Chairman
(ALL SIGNATURES MUST BE ACKNOWLEDGED)
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DESCRIPTION OF PROPERTY
EXHIBIT A to Subordination Agreement, dated as of November 16, 1998, executed by
LA QUINTA REDEVELOPMENT AGENCY, a public body corporate and politic, as
"Agency", in favor of SANWA BANK CALIFORNIA, a California corporation, as
"Lender."
All that certain real property located in the County of Riverside, State of California,
described as follows:
ALL THAT PORTION OF THE SOUTHEAST QUARTER OF SECTION 29,
TOWNSHIP 5 SOUTH, RANGE 7 EAST, SAN BERNARDINO BASE AND
MERIDIAN, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF
CALIFORNIA, DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHEAST CORNER OF SAID SECTION 29; THENCE
NORTH 890 16' 18" WEST, A DISTANCE OF 330.44 FEET ALONG THE SOUTH
LINE OF SAID SECTION 29, ALSO BEING THE CENTERLINE OF AVENUE 48;
THENCE NORTH 000 43' 42" EAST, A DISTANCE OF 56.61 FEET TO A POINT IN
THE NORTH LINE OF SAID AVENUE 48, SAID POINT BEING THE POINT OF
BEGINNING; THENCE NORTH 89° 44' 57" WEST, A DISTANCE OF 193.08 FEET
ALONG THE NORTH LINE OF SAID AVENUE 48; THENCE NORTH 89' 16' 18"
WEST, A DISTANCE OF 1502.39 FEET TO A POINT OF CUSP WITH A CURVE
CONCAVE TO THE SOUTHEASTERLY HAVING A RADIUS OF 6380.00 AND TO
WHICH A RADIAL LINE BEARS NORTH 500 34' 26" WEST, SAID POINT BEING
THE INTERSECTION OF THE NORTH LINE OF SAID AVENUE 48 WITH THE
EAST LINE OF THE COACHELLA VALLEY WATER DISTRICT LA QUINTA
EVACUATION CHANNEL; THENCE, NORTHEASTERLY ALONG SAID CURVE
THROUGH A CENTRAL ANGLE OF 050 21' 52", AN ARC DISTANCE OF 597.34
FEET TO A POINT OF TANGENCY; THENCE NORTH 44° 47' 26" EAST, A
DISTANCE OF 125.02 FEET; THENCE NORTH 450 13' 50" WEST, A DISTANCE OF
10.05 FEET; THENCE NORTH 44° 47' 26" EAST, A DISTANCE OF 563.56 FEET;
THENCE SOUTH 450 12' 34" EAST, A DISTANCE OF 71.72 FEET; THENCE
SOUTH 050 05' 11" EAST, A DISTANCE OF 70.35 FEET TO THE BEGINNING OF
A NON -TANGENT CURVE CONCAVE SOUTHEASTERLY AND HAVING A
RADIUS OF 61.00 FEET, A RADIAL THROUGH SAID POINT BEARS NORTH 06°
23' 49" WEST; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A
CENTRAL ANGLE OF 380 48' 45", A ARC DISTANCE OF 41.32 FEET TO A POINT
IN A NON -TANGENT LINE; THENCE SOUTH 430 58' 19" EAST, A DISTANCE OF
27.01 FEET; THENCE SOUTH 45' 12' 34" EAST, A DISTANCE OF 141.00 FEET;
THENCE SOUTH 190 34' 55" EAST, A DISTANCE OF 100.54 FEET TO THE
BEGINNING OF A NON -TANGENT CURVE CONCAVE SOUTHERLY AND
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HAVING A RADIUS OF 220.00 FEET, A RADIAL THROUGH SAID POINT BEARS
NORTH 190 34' 55" WEST; THENCE EASTERLY ALONG SAID CURVE THROUGH
A CENTRAL ANGLE OF 200 18' 37", AN ARC DISTANCE OF 77.99 FEET TO A
POINT OF TANGENCY; THENCE SOUTH 89° 16' 18" EAST, A DISTANCE OF
523.12 FEET; THENCE SOUTH 00' 43' 42" WEST, A DISTANCE OF 487.00 FEET;
THENCE 890 16' 18" EAST, A DISTANCE OF 52.00 FEET; THENCE SOUTH 000 43'
42" WEST, A DISTANCE OF 125.39 FEET THE POINT OF BEGINNING.
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STATE OF CALIFORNIA )
SS.
COUNTY OF
On this day of /(Ii�yP_/rrbei' , 1998, before me, , � 3/e�
a Notary Public in and for the State, of California, personally appear r �,s
personally known to me ( ) to be the
person(s) whose nameW is/ore subscribed to the within instrument and acknowledged to
me that he/ske/they executed the same in his/he Nbeir authorized capacity(ies), and that
by his/l /tl,unr signatureW on the instrument the person((), or the entity upon behalf of
which the person(e) acted, executed the instrument.
WITNESS my hand and official seal
OFFICIAL SEAL
REGENIA HENSLEY
/ p COMM. #1107891
Signature
.: _ Notary Public - California b
L RIVERSIDE COUNTY
SPY My Commission Expires
Q J AUGUST 7, 2(`00
My commission expires
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