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HomeMy WebLinkAboutA4740 - TAHQUITZ COURT APARTMENTS CORPORATE FUND FOR HOUSING AUTHORITY DOC # 2012-0166755 04/12/2012 10:38 AM Fees: $0.00 Page 1 of 22 Recorded in Official Records REQUESTED BY County W. Riverside RECORDING RE Q Larry W.Ward Assessor, County Clerk&Recorder FIRST AMERICAN TITLE INSURANCE COMPANY AND WHEN RECORDED MAIL TO: "This document was electronically submitted to the County of Riverside for recording" Receipted by:TVERBA City of Palm Springs P.O. BOX 2743 PALM SPRINGS,CA 92263 SUBORDINATION AGREEMENT 511524-LA2 RECORDING REQUESTED BY FIRST AMERICAN TITLE INSURANCE COMPANY AND WHEN RECORDED MAIL TO: City of Palm Springs P.O. BOX 2743 PALM SPRINGS,CA 92263 SUBORDINATION AGREEMENT 511524-LA2 Freddie Mac Loan Number: 948842776 Property Name: Tahquitz Court Apartments SUBORDINATION AGREEMENT (CME AND PORTFOLIO) GOVERNMENTAL ENTITY (Revised 11-11-2011) THIS SUBORDINATION AGREEMENT ("Agreement") is entered into as of this 10th day of April, 2012, by and between (i) BERKADIA COMMERCIAL MORTAGE LLC, a limited liability company organized and existing under the laws of the State of Delaware ("Senior Mortgagee"), and (ii) THE CITY OF PALM SPRINGS, a charter city duly organized and existing under the laws of the State of California, successor to The Community Redevelopment Agency of the City of Palm Springs, California("Subordinate Mortgagee"). RECITALS A. Tahquitz Associates, LP, a California limited partnership (`Borrower") is the owner of certain land located in Riverside County, California, described in Exhibit A hereto ("Land"). The Land is currently improved with a multifamily housing project ("Improvements"). B. The Senior Mortgagee is making a loan to the Borrower in the original principal amount of$ 5,670,000.00. The loan will be secured by a Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated April, 2012 ("Senior Mortgage") encumbering the Land and Improvements and personal and other property described in the Senior Mortgage and defined therein as "Mortgaged Property." C. The Subordinate Mortgagee has made a loan to the Borrower in the original principal amount of $590,000.00. The loan is secured by a Deed of Trust With Assignment of Rents, Security Agreement and Fixture Filing dated September 28, 1993 ("Subordinate Mortgage") encumbering the Land and Improvements. D. The Senior Mortgage is intended to be recorded in the land records of Riverside County, California ("Recording Office") of even date herewith and prior hereto. The Subordinate Mortgage is recorded in the Recording Office at Document Number 382201. E. The execution and delivery of this Agreement is a condition of Senior Mortgagee's making of the Senior Mortgage loan. AGREEMENT NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Subordination Agreement(CME and Portfolio)- Governmental Entity 1. Definitions. The following terms, when used in this Agreement (including, as appropriate, when used in the above recitals), will have the following meanings. (a) The terms "Condemnation," "Imposition Deposits," "Impositions," "Leases," "Rents," "Restoration" and "Transfer", as well as any term used in this Agreement and not otherwise defined in this Agreement, will have the meanings given to those terms in the Senior Mortgage. (b) "Bankruptcy Proceeding" means any bankruptcy, reorganization, insolvency, composition, restructuring, dissolution, liquidation, receivership, assignment for the benefit of creditors, or custodianship action or proceeding under any federal or state law with respect to the Borrower, any guarantor of any of the Senior Indebtedness, any of their respective properties, or any of their respective partners, members, officers, directors, or shareholders. (c) "Borrower" means all persons or entities identified as `Borrower" in the first Recital of this Agreement, together with their successors and assigns, and any other person or entity who acquires title to the Land and Improvements after the date of this Agreement; provided that the term "Borrower" will not include the Senior Mortgagee in the event that the Senior Mortgagee may acquire title to the Land and Improvements. (d) "Casualty" means the occurrence of damage to or loss of any of the Mortgaged Property by fire or other casualty. (e) "Enforcement Action" means any of the following actions taken by or at the direction of the Subordinate Mortgagee: the acceleration of all or any part of the Subordinate Indebtedness, the advertising of or commencement of any foreclosure or trustee's sale proceedings, the exercise of any power of sale, the acceptance of a deed or assignment in lieu of foreclosure or sale, the collecting of Rents, the obtaining of or seeking of the appointment of a receiver, the seeking of default interest, the taking of possession or control of any of the Mortgaged Property, the commencement of any suit or other legal, administrative, or arbitration proceeding based upon the Subordinate Note or any other of the Subordinate Loan Documents, the exercising of any banker's lien or rights of set-off or recoupment, or the exercise of any other remedy against the Borrower, any other parry liable for any of the Subordinate Indebtedness or obligated under any of the Subordinate Loan Documents, or the Mortgaged Property. (f) "Enforcement Action Notice" means a written notice from the Subordinate Mortgagee to the Senior Mortgagee, given following one or more Subordinate Mortgage Default(s) and the expiration of any notice or cure periods provided for such Subordinate Mortgage Default(s) in the Subordinate Loan Documents, setting forth in reasonable detail the Subordinate Mortgage Default(s) and the Enforcement Actions proposed to be taken by the Subordinate Mortgagee. (g) "Loss Proceeds" means all monies received or to be received under any insurance policy, from any condemning authority, or from any other source, as a result or any Condemnation or Casualty. (h) "Regulatory Agreement" means the Regulatory Agreement and Declaration of Covenants and Restrictions dated September 28, 1993 and recorded in the Recording Office as Document Number 382201. Subordination Agreement (CME and Portfolio)- Governmental Entity Page 2 (i) "Senior Indebtedness" means the "Indebtedness" as defined in the Senior Mortgage. (j) "Senior Loan Documents" means the "Loan Documents" as defined in the Senior Mortgage. (k) "Senior Mortgage Default" means any act, failure to act, event, condition, or occurrence which constitutes, or which with the giving of notice or the passage of time, or both, would constitute, an "Event of Default" as defined in the Senior Mortgage. (1) "Senior Mortgagee" means the "Lender" as defined in the Senior Mortgage. When any other person or entity becomes the legal holder of the Senior Note, such other person or entity automatically will become the Senior Mortgagee. (m) "Senior Note" means the promissory note or other evidence of the Senior Indebtedness referred to in the Senior Mortgage and any replacement thereof. (n) "Subordinate Indebtedness" means all sums evidenced or secured or guaranteed by, or otherwise due and payable to the Subordinate Mortgagee pursuant to, the Subordinate Loan Documents. (o) "Subordinate Loan Documents" means the Subordinate Mortgage, the Subordinate Note, any loan agreement, the Regulatory Agreement and all other documents at any time evidencing, securing, guaranteeing, or otherwise delivered in connection with the Subordinate Indebtedness, as the same may be amended from time to time. (p) "Subordinate Mortgage Default" means any act, failure to act, event, condition, or occurrence which allows (but for any contrary provision of this Agreement), or which with the giving of notice or the passage of time, or both, would allow (but for any contrary provision of this Agreement), the Subordinate Mortgagee to take an Enforcement Action. (q) "Subordinate Mortgagee" means the person or entity named as such in the first paragraph of this Agreement and any other person or entity who becomes the legal holder of the Subordinate Note after the date of this Agreement. (r) "Subordinate Note" means the promissory note or other evidence of the Subordinate Indebtedness referred to in the Subordinate Mortgage and any replacement thereof. 2. Subordination of Subordinate Indebtedness. (a) The Subordinate Indebtedness is and will at all times continue to be subject and subordinate in right of payment to the prior payment in full of the Senior Indebtedness. (b) Until the occurrence of a Senior Mortgage Default, the Subordinate Mortgagee will be entitled to retain for its own account all payments made on account of the principal of and interest on the Subordinate Indebtedness in accordance with the requirements of the Subordinate Loan Documents; provided no such payment is made more than 10 days in advance of the due date thereof. However, immediately upon the Subordinate Mortgagee's receipt of notice or actual knowledge of a Senior Mortgage Default, the Subordinate Mortgagee will not Subordination Agreement(CME and Portfolio) - Governmental Entity Page 3 accept any payments on account of the Subordinate Indebtedness, and the provisions of Section 2(c) of this Agreement will apply. The Subordinate Mortgagee acknowledges that a Subordinate Mortgage Default constitutes a Senior Mortgage Default. Accordingly, upon the occurrence of a Subordinate Mortgage Default, the Subordinate Mortgagee will be deemed to have actual knowledge of a Senior Mortgage Default. (c) If(i) the Subordinate Mortgagee receives any payment, property, or asset of any kind or in any form on account of the Subordinate Indebtedness (including, without limitation, any proceeds from any Enforcement Action) after a Senior Mortgage Default of which the Subordinate Mortgagee has actual knowledge (or is deemed to have actual knowledge as provided in 2(b) above) or has been given notice, or (ii) the Subordinate Mortgagee receives, voluntarily or involuntarily, by operation of law or otherwise, any payment, property, or asset in or in connection with any Bankruptcy Proceeding, such payment, property, or asset will be received and held in trust for the Senior Mortgagee. The Subordinate Mortgagee will promptly remit, in kind and properly endorsed as necessary, all such payments, properties, and assets to the Senior Mortgagee. The Senior Mortgagee will apply any payment, asset, or property so received from the Subordinate Mortgagee to the Senior Indebtedness in such order, amount (with respect to any asset or property other than immediately available funds), and manner as the Senior Mortgagee will determine in its sole and absolute discretion. (d) Without limiting the complete subordination of the Subordinate Indebtedness to the payment in full of the Senior Indebtedness, in any Bankruptcy Proceeding, upon any payment or distribution (whether in cash, property, securities, or otherwise) to creditors (i) the Senior Indebtedness will first be paid in full in cash before the Subordinate Mortgagee will be entitled to receive any payment or other distribution on account of or in respect of the Subordinate Indebtedness, and (ii) until all of the Senior Indebtedness is paid in full in cash, any payment or distribution to which the Subordinate Mortgagee would be entitled but for this Agreement (whether in cash, property, or other assets) will be made to the Senior Mortgagee. (e) The subordination of the Subordinate Indebtedness will continue in the event that any payment under the Senior Loan Documents (whether by or on behalf of the Borrower, as proceeds of security or enforcement of any right of set-off or otherwise) is for any reason repaid or returned to the Borrower or its insolvent estate, or avoided, set aside or required to be paid to the Borrower, a trustee, receiver or other similar party under any bankruptcy, insolvency, receivership or similar law. In such event, the Senior Indebtedness or part thereof originally intended to be satisfied will be deemed to be reinstated and outstanding to the extent of any repayment, return, or other action, as if such payment on account of the Senior Indebtedness had not been made. 3. Subordination of Subordinate Loan Documents. (a) Each of the Subordinate Loan Documents is, and will at all times remain, subject and subordinate in all respects to the liens, terms, covenants, conditions, operations, and effects of each of the Senior Loan Documents. (b) The subordination of the Subordinate Loan Documents and of the Subordinate Indebtedness will apply and continue notwithstanding (i) the actual date and time of execution, delivery, recording, filing or perfection of each of the Senior Loan Documents and of each of the Subordinate Loan Documents, and (ii) the Subordination Agreement(CME and Portfolio)- Governmental Entity Page 4 availability of any collateral to the Senior Mortgagee, including the availability of any collateral other than the Mortgaged Property. (c) By reason of, and without in any way limiting, the full subordination of the Subordinate Indebtedness and the Subordinate Loan Documents provided for in this Agreement, all rights and claims of the Subordinate Mortgagee under the Subordinate Loan Documents in or to the Mortgaged Property or any portion thereof, the proceeds thereof, the Leases thereof, the Rents, issues and profits therefrom, and the Loss Proceeds payable with respect thereto, are expressly subject and subordinate in all respects to the rights and claims of the Senior Mortgagee under the Senior Loan Documents in or to the Mortgaged Property or any portion thereof, the proceeds thereof, the Leases thereof, the Rents, issues and profits therefrom and the Loss Proceeds payable with respect thereto. (d) If the Subordinate Mortgagee, by indemnification, subrogation or otherwise, will acquire any lien, estate, right or other interest in any of the Mortgaged Property, that lien, estate, right or other interest will be fully subject and subordinate to the receipt by the Senior Mortgagee of payment in full of the Senior Indebtedness, and to the Senior Loan Documents, to the same extent as the Subordinate Indebtedness and the Subordinate Loan Documents are subordinate pursuant to this Agreement. 4. Additional Representations and Covenants. (a) The Subordinate Mortgagee represents and warrants each of the following: (i) The Subordinate Mortgagee is now the owner and holder of the Subordinate Loan Documents. (ii) The Subordinate Loan Documents are now in full force and effect. (iii) The Subordinate Loan Documents have not been modified or amended. (iv) No Subordinate Mortgage Default has occurred- (v) The current principal balance of the Subordinate Indebtedness is $236,000.00. (vi) No scheduled monthly payments under the Subordinate Note have been or will be prepaid. (vii) None of the rights of the Subordinate Mortgagee under any of the Subordinate Loan Documents are subject to the rights of any third parties, by way of subrogation, indemnification or otherwise. (b) Without the prior written consent of the Senior Mortgagee in each instance, the Subordinate Mortgagee will not do any of the following: (i) Amend, modify, waive, extend, renew or replace any provision of any of the Subordinate Loan Documents. (ii) Pledge, assign, transfer, convey, or sell any interest in the Subordinate Indebtedness or any of the Subordinate Loan Documents. Subordination Agreement(CME and Portfolio)- Governmental Entity Page 5 (iii) Accept any payment on account of the Subordinate Indebtedness other than a regularly scheduled payment of interest or principal and interest made not earlier than 10 days prior to the due date thereof, or as expressly authorized in Section 4(i). (iv) Take any action which has the effect of increasing the Subordinate Indebtedness. (v) Appear in, defend or bring any action to protect the Subordinate Mortgagee's interest in the Mortgaged Property. (vi) Take any action concerning environmental matters affecting the Mortgaged Property. (c) The Subordinate Mortgagee will deliver to the Senior Mortgagee a copy of each notice received or delivered by the Subordinate Mortgagee pursuant to the Subordinate Loan Documents or in connection with the Subordinate Indebtedness, simultaneously with the Subordinate Mortgagee's delivery or receipt of such notice. The Senior Mortgagee will deliver to the Subordinate Mortgagee in the manner required in Section 5(b) a copy of each notice of a Senior Mortgage Default delivered to the Borrower by the Senior Mortgagee. Neither giving nor failing to give a notice to the Senior Mortgagee or Subordinate Mortgagee pursuant to this Section 4(c) will affect the validity of any notice given by the Senior Mortgagee or Subordinate Mortgagee to the Borrower, as between the Borrower and such of the Senior Mortgagee or the Subordinate Mortgagee as provided the notice to the Borrower. (d) Without the prior written consent of the Senior Mortgagee in each instance, the Subordinate Mortgagee will not commence, or join with any other creditor in commencing, any Bankruptcy Proceeding. In the event of a Bankruptcy Proceeding, the Subordinate Mortgagee will not vote affirmatively in favor of any plan of reorganization or liquidation unless the Senior Mortgagee has also voted affirmatively in favor of such plan. In the event of any Bankruptcy Proceeding, the Subordinate Mortgagee will not contest the continued accrual of interest on the Senior Indebtedness, in accordance with and at the rates specified in the Senior Loan Documents, both for periods before and for periods after the commencement of such Bankruptcy Proceedings. (e) Whenever the Subordinate Loan Documents give the Subordinate Mortgagee approval or consent rights with respect to any matter, and a right of approval or consent with regard to the same or substantially the same matter is also granted to the Senior Mortgagee pursuant to the Senior Loan Documents or otherwise, the Senior Mortgagee's approval or consent or failure to approve or consent, as the case may be, will be binding on the Subordinate Mortgagee. None of the other provisions of this Section 4 are intended to be in any way in limitation of the provisions of this Section 4(e). (f) All requirements pertaining to insurance under the Subordinate Loan Documents (including requirements relating to amounts and types of coverages, deductibles and special endorsements) will be deemed satisfied if the Borrower complies with the insurance requirements under the Senior Loan Documents and of the Senior Mortgagee. All original policies of insurance required pursuant to the Senior Loan Documents will be held by the Senior Mortgagee. Nothing in this Section 4(f) will preclude the Subordinate Mortgagee from requiring that it be named as a mortgagee and loss payee, as its interest may appear, under all policies of Subordination Agreement(CME and Portfolio)- Governmental Entity Page 6 property damage insurance maintained by the Borrower with respect to the Mortgaged Property, provided such action does not affect the priority of payment of Loss Proceeds, or that the Subordinate Mortgagee be named as an additional insured under all policies of liability insurance maintained by the Borrower with respect to the Mortgaged Property. (g) In the event of a Condemnation or a Casualty, the following provisions will apply: (i) the rights of the Subordinate Mortgagee (under the Subordinate Loan Documents or otherwise) to participate in any proceeding or action relating to a Condemnation or a Casualty, or to participate or join in any settlement of, or to adjust, any claims resulting from a Condemnation or a Casualty, will be and remain subordinate in all respects to the Senior Mortgagee's rights under the Senior Loan Documents with respect thereto, and the Subordinate Mortgagee will be bound by any settlement or adjustment of a claim resulting from a Condemnation or a Casualty made by the Senior Mortgagee; (ii) all Loss Proceeds will be applied either to payment of the costs and expenses of Restoration or to payment on account of the Senior Indebtedness, as and in the manner determined by the Senior Mortgagee in its sole discretion; (iii) in the event the Senior Mortgagee applies or releases Loss Proceeds for the purposes of Restoration of the Mortgaged Property, the Subordinate Mortgagee will release for such purpose all of its right, title and interest, if any, in and to such Loss Proceeds. If the Senior Mortgagee holds Loss Proceeds, or monitors the disbursement thereof, the Subordinate Mortgagee will not do so. Nothing contained in this Agreement will be deemed to require the Senior Mortgagee to act for or on behalf of the Subordinate Mortgagee in connection with any Restoration or to hold or monitor any Loss Proceeds in trust for or otherwise on behalf of the Subordinate Mortgagee, and all or any Loss Proceeds may be commingled with any funds of the Senior Mortgagee; and (iv) if the Senior Mortgagee elects to apply Loss Proceeds to payment on account of the Senior Indebtedness, and if the application of such Loss Proceeds results in the payment in full of the entire Senior Indebtedness, any remaining Loss Proceeds held by the Senior Mortgagee will be paid to the Subordinate Mortgagee unless another party has asserted a claim to the remaining Loss Proceeds. (h) The Subordinate Mortgagee will enter into attornment and non-disturbance agreements with all tenants under commercial or retail Leases, if any, to whom the Senior Mortgagee has granted attornment and non-disturbance, on the same tetras and conditions given by the Senior Mortgagee. (i) Except as provided in this Section 4(i), and regardless of any contrary provision in the Subordinate Loan Documents, the Subordinate Mortgagee will not collect payments for the purpose of escrowing for any cost or expense related to the Mortgaged Property or for any portion of the Subordinate Indebtedness. However, if the Senior Mortgagee is not collecting escrow payments for one or more Impositions, the Subordinate Mortgagee may collect escrow payments for such Impositions; provided that all payments so collected by the Subordinate Subordination Agreement(CME and Portfolio) - Governmental Entity Page 7 Mortgagee will be held in trust by the Subordinate Mortgagee to be applied only to the payment of such Impositions. (j) Within 10 days after request by the Senior Mortgagee, the Subordinate Mortgagee will furnish the Senior Mortgagee with a statement, duly acknowledged and certified setting forth the then-current amount and terms of the Subordinate Indebtedness, confirming that there exists no default under the Subordinate Loan Documents (or describing any default that does exist), and certifying to such other information with respect to the Subordinate Indebtedness as the Senior Mortgagee may request. (k) The Senior Mortgagee may amend, waive, postpone, extend, renew, replace, reduce or otherwise modify any provisions of the Senior Loan Documents without the necessity of obtaining the consent of or providing notice to the Subordinate Mortgagee, and without affecting any of the provisions of this Agreement. Notwithstanding the forgoing, Senior Mortgagee may not modify any provision of the Senior Loan Documents that increases the Senior Indebtedness, except for increases in the Senior Indebtedness that result from advances made by the Senior Mortgagee to protect the security or lien priority of the Senior Mortgagee under the Senior Loan Documents or to cure defaults under the Subordinate Loan Documents. 5. Default Under Loan Documents. (a) For a period of 90 days following delivery to the Senior Mortgagee of an Enforcement Action Notice, the Senior Mortgagee will have the right to cure any Subordinate Mortgage Default, provided if such Subordinate Mortgage Default is a non-monetary default and is not capable of being cured within such 90-day period and the Senior Mortgagee has commenced and is diligently pursuing such cure to completion, the Senior Mortgagee will have such additional period of time as maybe required to cure such Subordinate Mortgage Default or until such time, if ever, as the Senior Mortgagee (i) discontinues its pursuit of any cure and/or (ii) delivers to the Subordinate Mortgagee the Senior Mortgagee's written consent to the Enforcement Action described in the Enforcement Action Notice. The Senior Mortgagee will not have any obligation whatsoever to cure any Subordinate Mortgage Default. The Senior Mortgagee will not be subrogated to the rights of the Subordinate Mortgagee under the Subordinate Loan Documents by reason of the Senior Mortgagee having cured any Subordinate Mortgage Default. However, the Subordinate Mortgagee acknowledges that all amounts advanced or expended by the Senior Mortgagee in accordance with the Senior Loan Documents or to cure a Subordinate Mortgage Default will be added to and become a part of the Senior Indebtedness under Section 12 of the Senior Mortgage and will be secured by the lien of, the Senior Mortgage. (b) The Senior Mortgagee will deliver to the Subordinate Mortgagee a copy of any notice sent by the Senior Mortgagee to the Borrower of a Senior Mortgage Default within 5 business days of sending such notice to the Borrower. Failure of the Senior Mortgagee to send notice to the Subordinate Mortgagee will not prevent the exercise of the Senior Mortgagee's rights and remedies under the Senior Loan Documents. The Subordinate Mortgagee will have the right, but not the obligation, to cure any monetary Senior Mortgage Default within 30 days following the date of such notice; provided, however, that the Senior Mortgagee will be entitled during such 30-day period to continue to pursue its remedies under the Senior Loan Documents. The Subordinate Mortgagee may have up to 90 days from the date of the notice to cure a non-monetary Senior Mortgage Default if, during such 90-day period, the Subordination Agreement(CME and Portfolio)- Governmental Entity Page 8 Subordinate Mortgagee keeps current all payments required by the Senior Loan Documents. In the event that such a non-monetary Senior Mortgage Default creates an unacceptable level of risk relative to the Mortgaged Property, or Senior Mortgagee's secured position relative to the Mortgaged Property, as determined by the Senior Mortgagee in its sole discretion, then the Senior Mortgagee may exercise during such 90-day period all available rights and remedies to protect and preserve the Mortgaged Property and the Rents, revenues and other proceeds from the Mortgaged Property. All amounts paid by the Subordinate Mortgagee to the Senior Mortgagee to cure a Senior Mortgage Default will be deemed to have been advanced by the Subordinate Mortgagee pursuant to, and will be secured by the lien of, the Subordinate Mortgage. Notwithstanding anything in this Section 5(b) to the contrary, the Subordinate Mortgagee's right to cure any Senior Mortgage Default will terminate immediately upon the occurrence of any Bankruptcy Proceeding. (c) In the event of a Subordinate Mortgage Default, the Subordinate Mortgagee will not commence any Enforcement Action until 90 days after the Subordinate Mortgagee has delivered to the Senior Mortgagee an Enforcement Action Notice with respect to such Enforcement Action, provided that during such 90-day period or such longer period as provided in Section 5(a), the Subordinate Mortgagee will be entitled to seek specific performance to enforce covenants and agreements of the Borrower relating to income, rent, or affordability restrictions contained in the Regulatory Agreement, subject to the Senior Mortgagee's right to cure a Subordinate Mortgage Default set forth in Section 5(a). The Subordinate Mortgagee may not commence any other Enforcement Action, including but not limited to any foreclosure action under the Subordinate Loan Documents, until the earlier of (i) the expiration of such 90-day period or such longer period as provided in Section 5(a) or (ii) the delivery by the Senior Mortgagee to the Subordinate Mortgagee of the Senior Mortgagee's written consent to such Enforcement Action by the Subordinate Mortgagee. The Subordinate Mortgagee acknowledges that the Senior Mortgagee may grant or refuse consent to the Subordinate Mortgagee's Enforcement Action in the Senior Mortgagee's sole and absolute discretion. At the expiration of such 90-day period or such longer period as provided in Section 5(a) and, subject to the Senior Mortgagee's right to cure set forth in Section 5(a), Subordinate Mortgagee may commence any Enforcement Action. Any Enforcement Action on the part of the Subordinate Mortgagee will be subject to the provisions of this Agreement. The Subordinate Mortgagee acknowledges that the provisions of this Section 5(c) are fair and reasonable under the circumstances, that the Subordinate Mortgagee has received a substantial benefit from the Senior Mortgagee having granted its consent to the Subordinate Mortgage, and that the Senior Mortgagee would not have granted such consent without the inclusion of these provisions in this Agreement. (d) The Senior Mortgagee may pursue all rights and remedies available to it under the Senior Loan Documents, at law, or in equity, regardless of any Enforcement Action Notice or Enforcement Action by the Subordinate Mortgagee. No action or failure to act on the part of the Senior Mortgagee in the event of a Subordinate Mortgage Default or commencement of an Enforcement Action will constitute a waiver on the part of the Senior Mortgagee of any provision of the Senior Loan Documents or this Agreement. (e) In the event that the Enforcement Action taken by the Subordinate Mortgagee is the appointment of a receiver for any of the Mortgaged Property, all of the Rents, issues, profits and proceeds collected by the receiver will be paid and applied by the receiver solely to and for the benefit of the Senior Mortgagee until the Senior Indebtedness will have been paid in full. Subordination Agreement(CME and Portfolio) - Governmental Entity Page 9 (f) The Subordinate Mortgagee hereby expressly consents to and authorizes the release by the Senior Mortgagee of all or any portion of the Mortgaged Property from the lien, operation, and effect of the Senior Loan Documents. The Subordinate Mortgagee hereby waives to the fullest extent permitted by law, all equitable or other rights it may have (i) in connection with the release of all or any portion of the Mortgaged Property, (ii) to require the separate sale of any portion of the Mortgaged Property, (iii) to require the Senior Mortgagee to exhaust its remedies against all or any portion of the Mortgaged Property or any combination of portions of the Mortgaged Property or any other collateral for the Senior Indebtedness, or (iv) to require the Senior Mortgagee to proceed against the Borrower, any other party that may be liable for any of the Senior Indebtedness (including any general partner of the Borrower if the Borrower is a partnership), all or any portion of the Mortgaged Property or combination of portions of the Mortgaged Property or any other collateral, before proceeding against all or such portions or combination of portions of the Mortgaged Property as the Senior Mortgagee determines. The Subordinate Mortgagee waives to the fullest extent permitted by law any and all benefits under California Civil Code Sections 2845, 2849 and 2850. The Subordinate Mortgagee hereby expressly consents to and authorizes, at the option of the Senior Mortgagee, the sale, either separately or together, of all or any portion of the Mortgaged Property. The Subordinate Mortgagee acknowledges that without notice to the Subordinate Mortgagee and without affecting any of the provisions of this Agreement, the Senior Mortgagee may (i) extend the time for or waive any payment or performance under the Senior Loan Documents; (ii) modify or amend in any respect any provision of the Senior Loan Documents; and (iii) modify, exchange, surrender, release and otherwise deal with any additional collateral for the Senior Indebtedness. (g) If any party other than the Borrower (including the Senior Mortgagee) acquires title to any of the Mortgaged Property pursuant to a foreclosure of, or trustee's sale or other exercise of any power of sale under, the Senior Mortgage conducted in accordance with applicable law, the lien, operation, and effect of the Subordinate Mortgage and other Subordinate Loan Documents automatically will terminate with respect to such Mortgaged Property. 6. Miscellaneous Provisions. (a) In the event of any conflict or inconsistency between the terms of the Subordinate Loan Documents and the terms of this Agreement, the terms of this Agreement will control. (b) This Agreement will be binding upon and will inure to the benefit of the respective legal successors and permitted assigns of the parties hereto. No other party will be entitled to any benefits hereunder, whether as a third-party beneficiary or otherwise. (c) This Agreement does not constitute an approval by the Senior Mortgagee of the terms of the Subordinate Loan Documents. (d) Each notice, request, demand, consent, approval or other communication (collectively, "notices," and singly, a "notice") which is required or permitted to be given pursuant to this Agreement will be in writing and will be deemed to have been duly and sufficiently given if(i) personally delivered with proof of delivery thereof(any notice so delivered will be deemed to have been received at the time so delivered), or (ii) sent by a national overnight courier service (such as FedEx) Subordination Agreement(CME and Portfolio)- Governmental Entity Page 10 designating earliest available delivery (any notice so delivered will be deemed to have been received on the next business day following receipt by the courier), or (iii) 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 will be deemed to have been received on the date of delivery as confirmed by the return receipt), addressed to the respective parties as follows: (i) Notices intended for the Senior Mortgagee will be addressed to: Berkadia Commercial Mortgage LLC 118 Welsh Road Horsham, Pennsylvania 19044 Attn: Servicing- Executive Vice President Telephone: (215) 328-3391 (ii) Notices intended for the Subordinate Mortgagee will be addressed to: The City of Palm Springs Box 2743 Palm Springs, California 92263 Attention: City Attorney Telephone: (760) 323-8299 Any party, by notice given pursuant to this Section, may 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 will only be effective upon receipt. Neither party will refuse or reject delivery of any notice given in accordance with this Section. (e) Nothing herein or in any of the Senior Loan Documents or Subordinate Loan Documents will be deemed to constitute the Senior Mortgagee as a joint venturer or partner of the Subordinate Mortgagee. (f) Upon notice from the Senior Mortgagee from time to time, the Subordinate Mortgagee will execute and deliver such additional instruments and documents, and will take such actions, as are required by the Senior Mortgagee in order to further evidence or effectuate the provisions and intent of this Agreement. (g) This Agreement will be governed by the laws of the State in which the Land is located. (h) If any one or more of the provisions contained in this Agreement, or any application thereof, will be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein, and any other application thereof, will not in any way be affected or impaired thereby. (i) The term of this Agreement will commence on the date hereof and will continue until the earliest to occur of the following events: (i) the payment of all of the Senior Indebtedness; provided that this Agreement will be reinstated in the event any payment on account of the Senior Indebtedness is avoided, set aside, rescinded or repaid by the Senior Mortgagee as described in Section 2(e) hereof, (ii) the payment of all of the Subordinate Indebtedness other than by reason of payments which the Subordinate Mortgagee is obligated to remit to the Senior Subordination Agreement(CME and Portfolio)- Governmental Entity Page 11 (ii) the payment of all of the Subordinate Indebtedness other than by reason of payments which the Subordinate Mortgagee is obligated to remit to the Senior Mortgagee pursuant to this Agreement, (iii) the acquisition by the Senior Mortgagee or by a third party purchaser, of title to the Mortgaged Property pursuant to a foreclosure of, deed in lieu of foreclosure, or trustee's sale or other exercise of a power of sale or similar disposition under, the Senior Mortgage; or (iv) without limiting the provisions of Section 5(d), the acquisition by the Subordinate Mortgagee, with the prior written consent of the Senior Mortgagee, of title to the Mortgaged Property subject to the Senior Mortgage pursuant to a foreclosure, or a deed in lieu of foreclosure, of(or the exercise of a power of sale under) the Subordinate Mortgage. (j) No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder will operate as a waiver thereof, nor will any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. (k) Each party hereto acknowledges that in the event any party fails to comply with its obligations hereunder, the other parties will have all rights available at law and in equity, including the right to obtain specific performance of the obligations of such defaulting party and injunctive relief. (1) Nothing in this Agreement is intended, nor will it be construed, to in any way limit the exercise by the Subordinate Mortgagee of its governmental powers (including but not limited to police, regulatory and taxing powers) with respect to the Borrower or the Mortgaged Property to the same extent as if it were not a party to this Agreement or the transactions contemplated hereby. (m) This Agreement may be amended, changed, modified, altered or terminated only by a written instrument or written instruments signed by the parties to this Agreement. (n) This Agreement may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument. [Signature and acknowledgment pages follow] Subordination Agreement(CME and Portfolio) - Governmental Entity Page 12 IN WITNESS WHEREOF,the parties have duly executed this Agreement as of the day and year first above written. SENIOR MORTGAGEE: BERKADIA COMMERCIAL MORTGAGE LLC, a Delaware limited liability company By: � Max W. Foore ( ,i Authorized Representative - ACKNOWLEDGMENT State of Virginia City of Richmond On 3 Jo( 5L before me, (l t ri A e �m J: a-r ert Name and Title of the O er) personally appeared Max W. Foore who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. "00't No 5- .2 MY � L �� t p C COMMISSION •g �`" Signature C � 1� 4-r (Seal) =c N0 3F42 s Nt.1/�. ^�vrM.+i-,�pJ.i,cN� .�-''rytilSl, /a�3j(ao13 '•a C���'• EP5L6Ci Subordination Agreement(CME and Portfolio)- Governmental Entity Page 13 SUBORDINATE MORTGAGEE: THE CITY OF PALM SPRINGS, a charter city APPROVED AS TO FORM duly organized and existing under the laws and j the Constitution of the State of California By "Kk� Title: Name: Title: ATTEST; City Clerk AC NOWLE GMENT `AffROV,ED BY CICCK ciL State of rib County of ( �a On before me \ (Insert Name and Title of the Officer) personally appeared who proved to me on the basis of satisfactory evidence to be the pers (s) whos names) is are subscribed to the within instrument and acknowledged to me at he/she/t ey executed the same in his/her/their authorized capacity(ies), and that by his er/their signat e(s) on the instrument the person(s), or the entity upon behalf of which the pers n(s) acted, execu d the instrument. I certify under PENALTY OF PER RY under the laws�f the State of California that the foregoing paragraph is true and corre. . i WITNESS my hand and official seall `\ i' Signature (Seal) E Subordination Agreement(CME and Portfolio)- Governmental Entity Page 14 ACKNOWLEDGMENT OF INSTRUMENT (Cal. Civil Code Section 1181) State of California ) County of Riverside ) ss City of Palm Springs) On April 9, 2012, before me, KATHLEEN D. HART, CHIEF DEPUTY CITY CLERK, CITY OF PALM SPRINGS, CALIFORNIA, personally appeared DAVID H. READY, who I personally know is .the CITY MANAGER of the CITY OF PALM SPRINGS, whose name is subscribed to the within instrument and that he executed the same in his official and authorized capacity on behalf of the City of Palm Springs, a California Charter City. 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 the official seal of the City of Palm Springs, California, this 9th day of April 2012: tpALMs 10 <4'y c V e� Signature: [/FOR Kathleen D. Hart, CMC Chief Deputy City Clerk CITY OF PALM SPRINGS, CALIFORNIA Title or Type of Document: �0cd Document Date: L� •io •12 Number of Pages: 14A CONSENT OF BORROWER The Borrower hereby acknowledges receipt of a copy of this Subordination Agreement, dated April 4, 2012, by and between Berkadia Commercial Mortgage LLC and The City of Palm Springs and consents to the agreement of the parties set forth herein. TAHQUITZ ASSOCIATES,LP, a California limited partnership By: LINC-Tahquitz LLC, a California limited liability company, its Managing General Partner By: LINC Housing Corporation, a California nonprofit public benefit corporation, its Sole Member and Manager By: aren N a hima Co-CO and O By: Tahquitz Associates, LLC, a California limited liability company, its Co-General Partner By: Dalton Hydro, LLC, a Vermont limited liability company, its Manager By: S. R. C. Corp., a Utah corporation, its Manager By: Stephen Harmsen President Date: April 4, 2012 Subordination Agreement(CME and Portfolio)- Governmental Entity Page 15 CONSENT OF BORROWER The Borrower hereby acknowledges receipt of a copy of this Subordination Agreement, dated April 10, 2012, by and between Berkadia Commercial Mortgage LLC and The City of Palm Springs and consents to the agreement of the parties set forth herein. TAHQUITZ ASSOCIATES,LP, a California limited partnership By: LINC-Tahquitz LLC, a California limited liability company,its Managing General Partner By. LINC Housing Corporation, a California nonprofit public benefit corporation, its Sole Member and Manager By: Karen N. Maeshima Co-COO and CFO By: Tahquitz Associates, LLC, a California limited liability company, its Co-General Partner By: Dalton Hydro, LLC, a Vermont limited liability company, its Manager By: S. R. C. Corp., a Utah corporation, its Manager By: -Stephen H sen / President Date: April 4, 2012 Subordination Agreement(CME and Portfolio)- Governmental Entity Page 15 ACKNOWLEDGMENT r State of �,J)aT Phi County off '-!'C'00de 5 OnPlOf 1Jti . %a before me, iummtJ L . � I�� lro ; ansert Name and Title of the Officer) personally appeared Karen N. Maeshima , who proved to me on the basis of satisfactory evidence to be the personO whose name�a is/we subscribed to the within instrument and acknowledged to me that 12e/she/They` executed the same in >is/her/4heit authorized capacity( and that by)ii§/her/their signatureJo on the instrument the personw, or the entity upon behalf of which the personW 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. TAMMY L. SMITH WITNESS m hand and official seal. Commission a 100o3ni y N�my Notary Public-California Los Angeles County lip Comm. Expires Jun 3,2012 - - - - - - - - - - - - - Signature �d1?i'12� i�, .� 2 (Seal) AC OWLED ENT State of County of On before me, // (Insert Name and Title of the Officer) personally appeared Stephen M. Hartttsen who proved to me on the basis of satisfactory evidence to be the personO whose ame(s) is/are subscribed to the within instrument and acknowledged to me th he/she/the executed the same in his/her/their authorized capacity(ies), and that by his/he their signatur s) on the instrument the person(s), or the entity upon behalf of which the person ) acted, execute the instrument. I certify under PENALTY OF PERJU under the laws o the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) Subordination Agreement(CME and Portfolio) - Governmental Entity Page 16 A NOWLEDGMENT State of County of On before me, Name and Ti e o the O cer personally appeared Karen N. Maes ' a who proved to me on the basis of satisfactory evidence to be /pe7rson(s) s)Zign osekex=ted s/are subscribed to the within instrument and acknowledged he/th the same in hisllter/their authorized capacity(ies), and thatathe instrument the person(s), or the entity upon behalf of which t exenstrument. I certify under PENALTY OF under the laws of th State of California that the foregoing paragraph is true and cWITNESS my hand and official Signature {� (Seal) i lj ACKNOWLEDGMENT State of �, County of .' u:d tirv4-' On before me, zrt c ame Title of the Officer) personally appeared Stephen M. Hatmsen who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. - - 1 r — — — — - —NOTARY PtSUC I J.DAVIS Signature ,�, f �� (Seal) I 'slaw I •4 OCTOti9t 4,1075 I I STATE OF t1TAM L- - - - - - - - - - Subordination Agreement(CME and Portfolio)- Governmental Entity Page 16 EXHIBIT A LEGAL DESCRIPTION LOT 15 IN SECTION 13, TOWNSHIP 4 SOUTH, RANGE 4 EAST, SAN BERNARDINO MERIDIAN, AS PER MAP OF PALM VALLEY COLONY LANDS, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, RECORDED IN BOOK 14, PAGE 652 OF MAPS, SAN DIEGO COUNTY RECORDS. EXCEPT THE PORTION LYING NORTH OF THE SOUTH LINE OF ENCHANTED HOMES UNIT NO. 1, RECORDED IN BOOK 34, PAGE 17 OF MAPS, RIVERSIDE COUNTY RECORDS. SAID PROPERTY IS SHOWN ON RECORD OF SURVEY ENTITLED "RECORD OF SURVEY OF A PORTION OF LOT 1 OF SECTION 13, TOWNSHIP 4 SOUTH, RANGE 4 EAST, SAN BERNARDINO MERIDIAN, AS SHOWN BY MAP OF PALM VALLEY COLONY LANDS, AS RECORDED IN BOOK 14, PAGE 652 OF MAPS, SAN DIEGO COUNTY RECORDS" ON FILE IN BOOK 33, PAGE 77, RECORDS OF SURVEY, RIVERSIDE COUNTY RECORDS. APN: 502-143-004-5 Subordination Agreement (CME and Portfolio)- Governmental Entity Page 17 Corporate Fund for Housing Tahquitz Court Apartments AGREEMENT #4740 HA R33, 7-23-03 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: CITIBANK(WEST), FSB 201-W, Lexington Dr.,2"d Floor Glendale,CA 91203 Attn: Cristina Ochoa Legal Dept. No. 15714 (SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY) SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN CERTAIN RESTRICTIONS ON THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS SUBORDINATION AGREEMENT ("AGREEMENT"), is dated as of this,Lday ofne 2003, by CORPORATE FUND FOR HOUSING,a California non-profit public benefit corporation,owner of the real property("Owner")described on the attached Exhibit A("Property"),and by this reference made a part hereof, and the HOUSING AUTHORITY OF THE CITY OF PALM SPRINGS, a housing authority of the State of California duly organized and existing under the laws thereof("Authority"). RECITALS: A. The Authority has issued and sold its $3,380,000 Housing Authority of the City of Palm Springs Multifamily Housing Mortgage Revenue Bonds(Tahquitz Court Apartments)(the"Bonds")pursuantto a trust indenture(the"Indenture")dated as of September 1, 1993 between the Authority and U.S.Bank,N.A., a national banking association (formerly known as Seattle-First National Bank) as trustee (the "Bond Trustee")for the holders of the Bonds,and proceeds of the Bonds have been loaned by the Authority to the Owner(the"Bond Loan")upon the terms and conditions of a Loan Agreement dated as of September 1,1993 by and among the Authority,the Bond Trustee and the Owner for the sole and exclusive purpose of financing a multifamily residential facility located on the Property. B. In addition,Owner,the Authority and the Bond Trustee entered into a Regulatory Agreement and Declaration of Restrictive Covenants dated as of September 1, 1993 ("Regulatory Agreement"), recorded September 30, 1993, as Instrument No. 382200 in the Official Records ("Official Records")of the County of Riverside, State of California. The Regulatory Agreement provides for certain terms, conditions, covenants and restrictions to be imposed upon Owner and the Property. C. With respect to the Bonds, Citibank (West), FSB, a federal savings bank, successor by merger to California Federal Bank, a federal savings bank, successor by merger to Glendale Federal Bank, Federal Savings Bank (formerly known as Glendale Federal Savings and Loan Association), successor by merger to Redlands Federal Bank, a federal savings bank ("Senior Lienholder") has issued a certain Irrevocable Direct Draw Letter of Credit dated as of September 1,1993 for the benefit of the Bond Trustee(the "Letter of Credit")pursuant to which Senior Lienholder has made certain advances to the Bond Trustee(a) with respect to amounts due under the Bond Loan and(b)to provide funds to purchase Bonds tendered under certain circumstances in accordance with the Indenture, and in consideration therefore, Owner and Senior Lienholder have entered into a Reimbursement Agreement dated as of September 1, 1993 (the C VOommanid and 5911ingolcradmInMy Dacum"nk,Comomlo)S"WN2aoc(Form I n 2003) 1 a Lo No. 02-8101198 "Reimbursement Agreement") to evidence Owner's obligation to reimburse Senior Lienholder for such advances. D. The obligations of the Owner underthe Reimbursement Agreement are secured by the Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing Financing Statement dated as of September 1, 1993 and recorded September 30, 1993 as Instrument No. 382202 in the Official Records encumbering the Property("Senior Deed of Trust"). E. Owner has executed,or is about to execute and deliver to Senior Lienholder a Modification and Extension Agreement ("Modification Agreement") of even date herewith with respect to the Reimbursement Agreement and Senior Deed of Trust. In addition, Owner has executed, or is about to execute, in favor of Senior Lienholder, a Promissory Note in the original principal amount of$3,200,000.00 evidencing Owner's obligation to reimburse Senior Lienholder for Letter of Credit draws and all interest accrued thereon("Senior Note"). The Modification Agreement modified the Senior Deed of Trust to provide that it secures the repayment in full of the Senior Note,togetherwith interestthereon as provided therein,and all modifications,extensions,renewals,and/or replacements thereof. The Modification Agreement,together with the Reimbursement Agreement,Senior Deed of Trust,Senior Note,and all other documents executed or delivered in connection therewith, are hereinafter referred to collectively as the "Senior Lienholder Documents". F. It is a condition precedent to modifying the Senior Lienholder loan,that the Senior Lienholder Documents and Senior Lienholder's right to payments under the Senior Lienholder Documents shall unconditionally be and remain at all times a lien or charge upon the Property, prior and superior to the Regulatory Agreement and any and all covenants, conditions, restrictions and agreements in favor of the Authority. G. Senior Lienholder is willing to modify the Senior Lienholder loan, provided the condition precedent described above is satisfied and that the Authority will specifically and unconditionally subordinate the Regulatory Agreement and any and all other covenants,conditions,restrictions and agreements in favor of the Authority to the liens and charges of the Senior Lienholder Documents and Senior Lienholder's right to payments under the Senior Lienholder Documents. H. It is to the mutual benefit of the parties hereto that Senior Lienholder modify the Senior Lienholder loan,and the Authority and Owner are willing to provide the subordination required by the condition precedent described above. NOW, THEREFORE, in consideration of mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, and in order to induce Senior Lienholder to modify the Senior Lienholder loan,it is hereby declared,understood and agreed as follows: (a) The Senior Lienholder Documents and any modification,extension or renewal thereof together with Senior Lienholder's right to payments under the Senior Lienholder Documents shall unconditionally be and remain at all times a lien or charge on the Property, prior and superior to the Regulatory Agreement and any and all other covenants, conditions, restrictions and agreements in favor of the Authority. All advances made by Senior Lienholder and any modification, extension or renewal agreed to by Senior Lienholder with respect to the Senior Lienholder loan, the Senior Lienholder Documents or any other documents and instruments governing,evidencing or securing the Senior Lienholder loan shall be secured by the lien or charge of the Senior Lienholder Documents, which lien shall at all times be prior and superior to the Regulatory Agreement and any and all other covenants, conditions, restrictions and agreements in favor of the Authority; (b) The Senior Lienholder would not modify the Senior Lienholder loan pursuant to the Modification Agreement without this Agreement; and GAU..mems"nd smih"sldhadmKMy doc(R.1.22 za"a) 2 Loan No. 02-8101198 (c) This Agreement shall be the whole and only agreement with regard to the subordination of the Regulatory Agreement and any and all other covenants,conditions,restrictions and agreements in favor of the Authority to the liens or charges of the Senior Lienholder Documents and the Senior Lienholder's right to payments under the Senior Lienholder Documents and shall supersede and cancel,but only insofar as would affect such priority,any prior agreements as to such subordination, including, but not limited to, those provisions, If any, contained in the Regulatory Agreement in favor of the Authority,which provide for the subordination of the rights, restrictions or agreements thereof to another deed or deeds of trust or to another mortgage or mortgages. The Authority declares, agrees and acknowledges that: (d) [Intentionally deletedl; (e) Senior Lienholder in making disbursements pursuantto any such agreement is under no obligation or duty to, nor has Senior Lienholder represented that it will see to the application of such proceeds by the person or persons to whom Senior Lienholder disburses such proceeds and any application or use of such proceeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whale or in part; (f) The Authority intentionally and unconditionally subordinates the Regulatory Agreement and intentionally and unconditionally subordinates any and all other rights,restrictions or agreements in favor of the Authority in favor of the lien or charge upon the Property of the Senior Lienholder Documents, The Authority understands that in reliance upon,and in consideration of,this Agreement, specific concessions are being and will be made by Senior Lienholder,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 Agreement; (g) The Authority acknowledges that no violation, default or event of default(or events which would become such with the giving of notice or passage of time or both)currently exist under the Regulatory Agreement; (h) The Authority agrees to notify Senior Lienholder within 30 days after the Authority has knowledge of a breach, default or event of default under the Regulatory Agreement. The Authority shall not,under any circumstances, incur any liability for any Failure to provide any notice, provided, however,the Authority shall correct any such failure to provide such notice required by this Section (h). It shall be the obligation of Senior Lienholder to provide and update its address for notice purposes hereunder and the Authority shall have no duty to verify the accuracy or completeness of such information.Unless the Authority is otherwise notified,notices to Senior Lienholder shall be sent to Citibank(West),FSB,201 W.Lexington Dr., Glendale,CA 91203,Attn:Commercial Real Estate, Re: Corporate Fund for Housing, Loan No. 02-8101198; (i) If an event of default occurs under the terms of any of the Senior Lienholder Documents, prior to exercising any remedies thereunder, Senior Lienholder shall give Subordinate Lienholder the same written notice given to Owner as required by Section 4.01 of the Senior Deed of Trust. Subordinate Lienholder shall have the right to cure defaults within the time periods provided for Owner in Section 4.01 of the Senior Deed of Trust. With respect to any right of cure provided herein, performance of a cure by Subordinate Lienholder shall have the same effect as would like performance by Owner. Senior Lienholder shall not, under any circumstances,incur any liability for any failure to provide any notice,provided,however, Senior Lienholder shall correct any such failure to provide such notice required by said Section 4.01 and to permit the cure of such default within the time periods set forth in Section 4.01 of the Senior Deed of Trust, commencing from the date of mailing or delivering of such corrected notice. It shall be the obligation of Subordinate Lienholder to provide and update its address for notice purposes hereunder and Senior Lienholder shall have no duty to verify the accuracy or completeness of such information. Unless Senior Lienholder is otherwise notified,notices to Subordinate Lienholder shall be sent to the Housing Authority of the City of Palm Springs, 3200 East Tahquitz Canyon Way, Palm Springs, CA 92262,Attn: City Manager; C.Mowm.nis and s.mngsamdminWYDacnMeA1s1CoWM1n\5uMM3 don(Fnn,.n2003) 3 Loan No. 02-8101198 Q) The undersigned hereby acknowledges and agrees that its agreement with Owner, and any terms and conditions thereof,whether express or implied,are solely between it and Owner and are of no concern to Senior Lienholder. Senior Lienholder is and will be,throughout the terms of its loan and modification, extension or renewal thereof, under no duty or obligation to assure compliance with the terms and conditions of any agreement between Owner and undersigned;norwill Senior Lienholder be under any obligation or duty to take any action because of any knowledge it has or may have regarding any breach by Owner. The undersigned further agrees, notwithstanding anything to the contrary in the law,equity or its agreement with Owner, that the subordination of its interest is not subject to compliance,substantial or otherwise,with any provision of such agreement with Owner, whether express or implied. The undersigned acknowledges that Senior Lienholder considers this acknowledgment and agreement to be a material condition for modifying its loan with Owner; and (k) This Agreement may be executed simultaneously in counterparts,each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [Remainder of this page left intentionally blank] c.mommams and s.umysmimJm(MMyOommamskcaryo Io)solwM2 doc(Form 1.22.2003) 4 Loan No. 02-8101198 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 OTHER PURPOSES THAN IMPROVEMENTS OF THE LAND. IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION AGREEMENT,THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT THERETO. AUTHORITY: ATTEST: HOUSING AUTHORITY OF THE CITY OF PALM SPRINGS S of the Authority Name: "t H46,41 4 S lif. K Title: S VIC Ed OWNER: CORPORATE FUND FOR HOUSING, a California non-profit public benefit corporation By: Name: Its: AGREEMENT IS NOT BE EXECUTED UNDER A POWER OF ATTORNEY ALL SIGNATURES MUST BE ACKNOWLEDGED C.10o�manls a0 Sdt.gpldllstlmllft (F.-1P.=3) 5 Loan No. 02-8101198 ACKNOWLEDGMENTS STATE OF CALIFORNIA ) COUNTY OF 'R%VerS )ss tAe- ) On this a5 day of Sep elrn h e r 2003 before me, kctlk R, Nt c.(7 o 1 S a Notary Public in and for said State,personally appeared-rho nm a 5 /I. pt v�ar r- ,personally known tome ( to be the personN whose name Is are subscribed to the within instrument and acknowledged to me thaiQie(sfre/they executed the same i hi hedtkair authorized capacity(ies),and that by is it signature( c the instrument the person(?),or the entity upon behalf of which the person(ss) acted, executed the instrument. WITNESS my hand and official seal. l gym;^?!• b JUDITH A.NICHOLS N ary Public u j/{ CCMM.#1261766 m Commission expires: tf Notery Publlc•Callromia Y RIVERSIDE COUNTY S BUY COMM,Exp.May 21,2004 STATE OF CALIFORNIA ) )ss COUNTY OF ) On this_day of 2003 before me, a Notary Public in and for said State,personally appeared 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/theirsignature(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 My Commission expires: C,00admonls and So�dRosmmadmimMy Don moMoTa,poratoWdWW4.doc(FmT1n2.03) 6 Loan No. 02-8101198 EXHIBIT"A" LEGAL DESCRIPTION The Property is located in the City of Palm Springs, County of Riverside,State of California and is described as follows: LOT 15 IN SECTION 13,TOWNSHIP 4 SOUTH, RANGE 4 EAST,SAN BERNARDINO MERIDIAN, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA,AS PER MAP OF PALM VALLEY COLONY LANDS, RECORDED IN BOOK 14 PAGE 652 OF MAPS, SAN DIEGO COUNTY RECORDS; EXCEPT THAT PORTION LYING NORTH OF THE SOUTH LINE OF ENCHANTED HOMES UNIT NO. 1, RECORDED IN BOOK 34 PAGE 17 OF MAPS, RIVERSIDE COUNTY RECORDS. SAID PROPERTY IS SHOWN ON RECORD OF SURVEY ENTITLED 'RECORD OF SURVEY OF A PORTION OF LOT 15 OF SECTION 13, TOWNSHIP 4 SOUTH, RANGE 4 EAST, SAN BERNARDINO MERIDIAN,AS SHOWN BY MAP OF PALM VALLEY COLONY LANDS AS RECORDED IN BOOK 14 PAGE 652 OF MAPS, SAN DIEGO COUNTY RECORDS' ON FILE IN BOOK 33 PAGE 77 OF RECORDS OF SURVEY, RIVERSIDE COUNTY RECORDS. GAVOWmams and seidn96l�ll,adminwvooWm.ai83doWomlAsubo 2 doc(Foam 1221003) 7 Loan No. 02-8101198