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HomeMy WebLinkAbout00445C - CVHC HOUSING COALITION COTTONWOOD CHUCKWALLA LOW INCOME HOUSING SUBORDINATION SUBDIVISION TRACT 29695 0 Coachella Vly Housing Coalitio Subordination Agr AGREEMENT #445C R1176, 5-15-02 Recording Requested By _ And When Recorded Return To: --- Local Initiatives Support Corporation 73 Third Avenue New York, New York 10017 Attention: Jenny Rodriguez LISC P.A. No. 41182-0017 SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN THE LIEN OF A DEED OF TRUST ON THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. T S SUBORDINATION AGREEMENT (this "Agreement"), is dated as of this —�7 day of �, 2002 by THE COACHELLA VALLEY HOUSING COALITION, a California nonprofit public benefit corporation ("Borrower"), "), and THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic ("Agency"), in favor of LOCAL INITIATIVES SUPPORT CORPORATION, a New York not-for-profit corporation ("LISC"); RECITALS: A. Borrower is the owner in fee simple of that certain real property described in Exhibit A attached hereto and incorporated (the "Land") which, together with the improvements Borrower intends to construct thereon (the "Improvements"), collectively, are referred to herein as the "Property". B. In furtherance of Borrower's charitable purposes and goals, Borrower intends to improve the Land with a subdivision of 9 single-family houses (each a "House " and collectively, the "Houses"). Borrower's development and sale of the Houses is sometimes referred to herein as the "Project". C. Agency has made a loan to Borrower(the "Agency Loan") evidenced by a promissory note dated September 1, 1999 in the principal amount of One Hundred Fourteen Thousand Five Hundred and No/100 Dollars ($114,500.00) (the"Agency Note") secured by that certain deed of trust dated September 1, 1999 made by Borrower for the benefit of the Agency and recorded on November 17, 1999 as Instrument No. 1999-507788 ("the "Agency Deed of Trust") in the official records of Riverside County, California ("Official Records"), The Agency Note, the Agency Deed of Trust and all other documents which evidence, guaranty, secure, or otherwise pertain to the Agency Loan, collectively constitute the "Agency Loan Documents. The term "Agency Obligations' shall mean all Obligations owing at any time by Borrower to Agency under the Agency Loan Documents, whether evidenced by one or more promissory notes or otherwise. D. Borrower desires that LISC make a construction loan (the "LISC Loan") to Borrower in the principal amount of Two Hundred Sixty-One Thousand and No/100 Dollars ($261,000.00) to pay a portion of the construction costs of the Project. The LISC Loan is being made under a constructs n loan agreement (the "LISC Loan Agreement") between LISC and Borrower dated as ofu7>�Lo /a , 2002. E. The LISC Loan is evidenced by a promissory note (the "LISC Note") made payable to LISC in the principal amount of the LISC Loan. The LISC Note is secured by a deed of trust (the "LISC Deed of Trust") encumbering the Property, being recorded concurrently herewith. The LISC Loan Agreement, the LISC Note, the LISC Deed of Trust,this Agreement, and all other documents which evidence, guaranty, secure, or otherwise pertain to the Loan, collectively constitute the "LISC Loan Documents." All capitalized terms used herein and not defined shall have the meanings set forth in the LISC Loan Agreement. F. It is a material condition to LISC's making the LISC Loan to Borrower that (i) the LISC Deed of Trust unconditionally be and remain at all times a lien, claim, and charge upon the Property unconditionally prior and superior to the lien, claim, and charge of the Agency Deed of Trust, and (1i) the Agency Loan and Agency Loan Documents shall, at all times and in all respects, be wholly subordinate and inferior in claim and right to the LISC Loan and LISC Loan Documents. H. It is to the mutual benefit of the parties that LISC make the LISC Loan to Borrower, and Borrower is willing that the LISC Deed of Trust constitute a lien, claim, and charge upon the Property unconditionally prior and superior to the lien, claim, and charge of the Agency Deed of Trust, and that the Agency Loan and Agency Loan Documents shall, at all times and in all respects, be wholly subordinate and inferior in claim and right to the LISC Loan and LISC Loan Documents. NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in order to induce LISC to make the Loan, the parties hereby agree as follows: AGREEMENT 1. The Agency Loan as evidenced and secured by the Agency Loan Documents is hereby subordinated and subject, in the manner and to the extent described below, to any and all payment or performance obligations owed by Borrower to LISC pursuant to the LISC Loan Documents (the "LISC Obligations"), so long as any LISC Obligations shall remain unpaid, in whole or in part, or LISC is committed or otherwise obligated to extend credit to Borrower under the LISC Loan Documents. 2. So long as any of the LISC Obligations remain unpaid, in whole or in part, or so long as LISC is committed or otherwise obligated to extend credit to Borrower pursuant to the LISC Loan Documents, Agency agrees that, except to the extent that payments of the Agency Obligations are permitted under Section 3 below, Agency shall not: (a) collect, or receive payment upon, by setoff or in any other manner, all or any portion of the Agency Obligations; (b) without LISC's prior written consent, enforce or apply any security, now or hereafter existing for the Agency Obligations; (c) without prior written notice to LISC, commence, prosecute or participate in any administrative, legal or equitable action against Borrower covering the Agency Obligations; (d)join in any petition for bankruptcy; (e) without LISC's prior written consent join in any assignment for the benefit of creditors, or creditors' agreement; (f) take, maintain or enforce any lien or security, which is senior to LISC's interest, in any property, real or personal, to secure the Agency Obligations; or (g) without LISC's prior or contemporaneous written consent, incur any obligation to, or receive any loans, advances, dividends, payments of any kind or gifts from, Borrower. 3. Notwithstanding the preceding section, so long as Borrower has made each and every payment of principal and interest due and owing to LISC, Borrower is not in default under any of Borrower's agreements with LISC and none of the following payments would cause such default, then Agency shall be entitled to receive payments with respect to the Agency Obligations in accordance with the terms of the Agency Loan Documents; provided, however that Agency shall not be entitled to receive a prepayment of all of the Agency Obligations whether such prepayment is made voluntarily by the Borrower or is a consequence of Agency's acceleration of the Agency Obligations following a default under the Agency Loan Documents. If LISC is not pursuing remedies available to LISC following a default by Borrower under the LISC Loan Documents within sixty (60) days after receipt of written notice from Agency to LISC, or such longer period as provided to Borrower to cure the applicable default(s) under the LISC Loan Documents, then Agency, notwithstanding the limitations set forth in Section 2 above, shall be entitled to receive payments with respect to the Agency Obligations in accordance with the terms of the Agency Loan Documents; provided, however that Agency shall not be entitled to receive a prepayment of all of the Agency Obligations whether such prepayment is made voluntarily by the Borrower or is a consequence of Agency's acceleration of the Agency Obligations following a default under the Agency Loan Documents. 4. Except as otherwise expressly agreed to herein, all of the LISC Obligations now or hereafter existing shall be first paid by Borrower before any payment shall be made by Borrower on the Agency Obligations. This priority of payment shall apply at all times until all of the LISC Obligations have been repaid in full. Notwithstanding anything in this Agreement to the contrary, in the event of any assignment by Borrower for the benefit of Borrower's creditors, any bankruptcy proceedings instituted by or against Borrower, the appointment of any receiver for Borrower or Borrower's business or assets, or any dissolution or other or other winding up of the affairs of Borrower or of Borrower's business, and in all such cases, the officers of Borrower and any assignee, trustee in bankruptcy, receiver or other person or persons in charge, respectively, are hereby directed to pay to LISC the full amount of the LISC Obligations before making any payments to Agency. 5. Following a default in Borrower's obligations under the LISC Note or Borrower's obligations under the LISC Deed of Trust, all amounts owing under the LISC Note shall be paid in full before Borrower pays any of the Agency Obligations. Agency shall take no steps directly or indirectly to use, or to cause any other person or entity to use, any state or federal law or regulation (including, without limitation, the Bankruptcy Code and Rules, or any plan of reorganization proposed or confirmed pursuant thereto) to circumvent the intent of the preceding sentence. 6. Except as otherwise expressly agreed herein, Agency agrees that LISC shall have absolute power and discretion, to deal in any manner with the LISC Obligations, including, interest, costs and expenses payable by Borrower to LISC, and any security and guaranties therefor including, but not limited to, release, surrender, extension, renewal, acceleration, compromise, or substitution. Agency hereby waives and agrees not to assert against LISC any rights which a guarantor or surety could exercise; but nothing in this Agreement shall constitute Agency a guarantor or surety. Agency hereby waives the right, if any, including, without limitation, any rights Agency may have under any applicable state law, to require that LISC I marshal, or otherwise proceed to dispose of or foreclose upon, collateral LISC may have in any manner or order. 7. If, at any time hereafter, LISC shall, in its own judgment, determine to discontinue the extension of credit to or on behalf of Borrower, LISC may do so. This Agreement, the obligations of Agency owing to LISC, and LISC's rights and privileges hereunder shall continue until payment in full of all of the LISC Obligations notwithstanding any action or non-action by LISC with respect to the LISC Obligations or with respect to any collateral therefor or any guaranties thereof. 8. In the event that Borrower shall commit a default under the Agency Loan Documents, Agency shall give written notice to LISC of such default concurrently with the delivery of a notice of default to Borrower. Any exercise or attempt to exercise Agency's rights under the Agency Loan Documents prior to expiration of the notice and cure period in Section 3 shall be void. 9. Agency further agrees that in case Agency should, contrary to Section 2 above, take or receive any additional 'security interest in, or additional lien by way of attachment, execution, or otherwise on any property, real or personal, or should take or join in any other measure or advantage contrary to this Agreement, at any time prior to the payment in full of all of the LISC Obligations except as otherwise permitted hereby, LISC shall be entitled to have the same vacated, dissolved and set aside by such proceedings at law, or otherwise, as LISC may deem proper, and this Agreement shall be and constitute full and sufficient grounds therefor and shall entitle LISC to become a party to any proceedings at law, or otherwise, initiated by LISC or by any other party, in or by which LISC may deem it proper to protect its interests hereunder. 10. Unless otherwise provided herein, the exercise and non-exercise of remedies under the LISC Loan Documents are solely at the election of LISC. If LISC agrees to exercise any of such remedies by reason of Borrower's default under the LISC Loan Documents, LISC is not obligated to pursue such remedies if Borrower's defaults have not been corrected or cured. 11. This Agreement is binding upon and inures to the benefit of the parties hereto, their successors and assigns, and including specifically LISC and its successors and assigns. 12. Notwithstanding anything to the contrary contained herein, any time periods within which Lender is required to act shall be extended by a period equal to the time Lender is prevented from exercising its remedies under the Deed of Trust pursuant to the automatic or any other stay provision or order or injunction issued or in force pursuant to the Federal Bankruptcy Code as now or hereafter in effect. 13. Agency represents and warrants that the Agency Loan Documents are in full force and effect, and except as specifically noted herein, have not been amended, and there is no breach, event of default or default existing under the Agency Loan Documents, or any 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. 14. Except as otherwise expressly agreed herein, if Agency shall receive any payments, security interest, or other rights in any property of Borrower in violation of this Agreement, such payment or property shall be received by Agency in trust for LISC and shall forthwith be delivered and transferred to LISC. 15. Agency represents and warrants that Agency has not previously subordinated the Agency Obligations for the benefit of any other party, and agrees that any such subordinations hereafter executed shall be expressly made subject and subordinate to the terms of this Agreement. Agency further warrants having established with Borrower adequate means of obtaining, on an ongoing basis, such information as Agency may require which may affect the ultimate satisfaction by Borrower of the Agency Obligations. LISC shall have no duty to provide any such information to Agency. 16, Agency intentionally and unconditionally waives, relinquishes and subordinates the liens or charges of the Agency Deed of Trust in favor of the lien or charge of the LISC Deed of Trust upon the Property, 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 and, in reliance thereon, 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. Subject to the terms of this Agreement, Agency unconditionally and absolutely subordinates its interest under the Agency Deed of Trust to all sums due or to become due under the LISC Note, including without limitation interest and all subsequent modifications, extensions and renewals of the LISC Note. 17. Until the LISC Obligations have been paid in full, the LISC Deed of Trust securing the LISC Note, and any renewals or extensions thereof, unconditionally shall be and remain at all times a lien or charge on the Property, prior and superior to the liens or charges of the Agency Deed of Trust. 18. Agency acknowledges that LISC would not make the LISC Loan without this Agreement. 19. Agency approves and consents to the provisions of the LISC Note and the LISC Deed of Trust, and all agreements, including but not limited to any construction loan or escrow agreements, between Borrower and LISC for the disbursement of the proceeds of the LISC Loan, provided that such disbursements are in accordance with the LISC Loan Documents. 20, LISC declares, agrees and acknowledges that: a. It shall give written notice to Agency, or its successor, concurrently with Borrower, of any event of default under the LISC Deed of Trust. Except for defaults, which are capable of being cured solely by the payment of money, Agency shall have the right to cure defaults under the LISC Deed of Trust, which are susceptible to being cured within the time period specified in the LISC Deed of Trust. b. LISC agrees that if, prior to foreclosure of the LISC Deed of Trust,Agency cures the event of default in a timely manner, then LISC will not exercise any right it may have to accelerate the LISC Note by reason of the event of default so cured by Agency or as a result of the transfer of title to the Property to Agency. This paragraph 24(b) shall not prohibit LISC from accelerating the indebtedness evidenced by the LISC Note by reason of a later uncured default. 21. LISC in making disbursements pursuant to any agreement between Borrower and LISC for the disbursement of the proceeds of the LISC Loan is under no obligation or duty to, nor has LISC represented that it will, see to the application of such proceeds by the person or persons to whom LISC 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 whole or in part. 22. LISC's rights and Agency's obligations under this Agreement shall in no way be impaired, altered or diminished and, except as otherwise provided in this Agreement, shall remain fully effective regardless of any act or omission by LISC that might otherwise directly or indirectly result, by operation of law or otherwise, in the discharge or release in whole or in part of Borrower, or the discharge, release, or impairment of any collateral now or hereafter held as security for any of the obligations under the LISC Note, the LISC Deed of Trust or any other related loan documents. 23. This Agreement and all rights and liabilities of the parties hereto shall be governed as to validity, interpretation, enforcement and effect by the laws of the State of California. 24. This Agreement shall be the whole and only agreement between the parties hereto with regard to the subordination of the lien or charge of the Agency Deed of Trust to the lien or charge of the LISC Deed of Trust, and shall supersede and cancel any prior agreements as to such, or any, subordination, including, but not limited to, those provisions, if any, contained in the Agency Deed of Trust, which provide for the subordination of the lien or charge thereof to a deed or deeds of trust or to a mortgage or mortgages to be executed thereafter. 25. This Agreement may be executed in two or more counterparts each of which shall be deemed an original and all of which taken together shall constitute but one and the same instrument. IN WITNESS WHEREOF, the undersigned have executed this Subordination Agreement as of the day and year first above written. BORROWER. THE COACHELLA VALLEY HOUSING COALITION, a California nonprofit public benefit corporation By: Name: Title; By: Name: Title: T [Signatures continue on following page] AGENCY: THE COMMUNITY REDEVELOPMENT AGENCY OF TH ITY OF PALM-SP GS Name: navi(i F_ RPnriy Title: Executive Director APPROVED AS TO FOR\M:/,/�d/By: �I( 1L\1— ATTEST BY: Name: Davi—dAI1 Wiim Title: eK&W ':City�Cler LISC: LOCAL INITIATIVES SUPPORT CORPORATION, a New York not-for-profit corporation By: l"3me: Title: [ALL SIGNATURES MUST BE ACKNOWLEDGED] CALIFORNIA ALL-PURPCO ACKNOWLEDGMENT c"'" - - - I; State of California County of Riverside 10 On /% - a before me, Elaine L. Wed ki nd, Notary Publi n Date Name and The of Officer(e.g.,°Jane Doe,Notary Public") personally appeared --_David H ;Ready & Pa r ri a A fPs Name(s)of Signers) ' Z personally known to me- QVidGIRIGGto be the personQs whose names is�®rsubscribed to the within instrument and acknowledged to me that he/she/ a executed the same in his/her hei uthorized capacity les , and that by his/her heir signatures on the instrument the person©, or the entity upon behalf of which the persono acted, fbco executed the instrument. I 1' WITNESS my hand and official seal. TARY PUC 0G98RLIC-CALIFCRNIA�IUFRS7DE COUAIrYfl "raNitL7. `G Iry "s''�-vy:, ,�.�"P.FEq.3,2003 elgpature of Notary Public J OPTIONAL Though the information below is not required bylaw, it may prove valuable to persons relying on the document and could prevent IIyy fraudulent removal and reattachment of this form to another document. Description of Attached Document I Title or Type of Document: I Document Date: Number of Pages: Signer(s) Other Than Named Above: I I Capacity(ies) Claimed by Signer(s) 'I Si ners Name:� g Signer's Name: I I ❑ Individual� ❑ Individual ❑ Corporate Officer ❑ Corporate Officer Title(s): Title(s): ❑ Partner—❑ Limited ❑ General ❑ Partner—❑ Limited ❑ General ❑ Attorney-in-Fact ❑ Attorney-in-Fact ❑ Trustee ❑ Trustees ❑ Guardian or Conservator ❑ Guardian or Conservator ❑ Other: Top of thumb here 1 ❑ Other: Top of thumb here Signer Is Representing: Signer Is Representing: I i I� ©1995 National Notary Association•8236 Remmet Ave.,PO.Box 7184•Canoga Park,CA 913099184 Prod.No.5907 neordec Call Toll-Free 1-800.876-6827 l AGENCY; THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS By: Name: Title: APPROVED AS TO FORM: By: Name: Title, LISC: LOCAL INITIATIVES SUPPORT CORPORATION, a New Yor ot-fps-p�f{t oolggt `1 Name: MARy JQ-ALLEN �— Title: [ALL SIGNATURES MUST BE ACKNOWLEDGED) i G'd 9G7'0N WtMOT z202'92'63S P STATE OF Calif ) ss. COUNTY OF Riverside ) On September 17 2002 before me, _ Rosa M. Alvarado Notary Publlo, personally appeared pedro S. Rodriguez perscihe#4p-known (or proved to me on the basis of satisfactory evidence) to be the persons) whose name(rt). . as !' subscribed to the within instrument and acknowledged to me that he executed the same In his authorized capaclty(ies), and that by his signatureM on the instrument the person(e), or the entity upon behalf of which the person(v) acted, executed the instrument, WITNESS m hand and official seal. "Cul M, AL4A3111 Y Camm.f 1349776 ' N NoTAAY KIIiUC•cAlIKOANIA N AlVlfll 1 C/Yn1Y cnmm,a pgnl K14.1i 1000 Notary public My Commission Expires aw>U STATE OF ) )ss. COUNTY OF ) On before me, Notary public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) _subscribed to the within instrument and acknowledged to r me that executed the same in authorized capaclty(ies), and that by signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the Instrument. WITNESS my hand and official seal. Notary Public My Commission Expires BS'd BBG'OW WU MOT 2002'92'd3S 4 ' CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT 1 State of California county of R'iyersidg I On -/9-e 2— before me, Blain L wedelSi�, Notary Ruhr i r� Dow Wm�and tide or OldO.t(a.tl. `Juw ha,llelary PUO>lon personally appeared ---ynyid 9- RPady A Pa♦ riri� A. SanAarH ___ _ __ ' N.m.(1)of Bipnx(a) k'personally known to me— to be the person($ whose nalns@ IsAasubscrlbed to the within Instrument and acknowledged to me that he/shel(laexecuted the same in his/her hel Uthorized cepaclty a ,and that by his/her el slgna ra(o on the Instrument the person®, fJ ELAIN� L,WSp�iIfND or the entity Upon behalf of which the persorM acted, OOM tageesa executed the instrument. - NOTARY PUELIGCn6jj 84 A ` R M.CXc COUNTY C WITNESS my hand and official seal. COMMA E;;0 PE9,3,2Dg3 J a � I r " &teM un O< I PV6 e OPVONAL Though the information below to not ioqulred by IaWI It may prove valuable to parsons reVng on the dowment and could prevint fraudulent removal and reahachment of this fart to another docurant. I I' Description of Attached Document Title or Type of Document; I ' bacument Date: Number of Pages; Signer(s) other Than Named Above: Capaclty(les) Claimed by Slgner(s) I I Signer's Name: Signer's Name: I I 0 Individual d Individual d Corporate officer b Corporate Officer Tltle(s): Tdle(s): CJ Partner—❑ Llmlted ❑ General LI Partner—❑ Limited ❑General d Attorney-in-Faot ❑ Attornay,ln-Fact U Trustee ❑ Trustee ❑ Guardian or Conservator d Guardian or Conservator ❑ Other: rop df Inbmb here d other, Tep of Ihumb he+e I Signer Is Representing; Signer Is Representing: I' I ' I' 01A9s Ndtfuhdl Nolery AmoaWm,02H FIVWM(Ave.,P.D.sou 719d,C000h Patk,CA 71309-719A Pmd.No.W? A~W Ta-rrw I-W"76UR7 TT'd 80"ON Wti47:OT Z00Z'92'd3S p STATE OF OCAN`� COUNTY OF p On� 1� Z before r+l� f f rl Notary Public, personally appeared personally known to me (or p ..,�j io me on thd basis of satisfactory evidence) to be the person(s) wh se names) _subscribed to the within instrument and acknowledged to me that executed the same In Ail authorized capacity(ies), and that by slgnatures) on the instrument the person(s), or the entity upon behalf of which the persons) acted, executed the instrument. WITNVZZk my hand and official seal. FficHAPO PINNM Not"Public, �,&aW �s 4) � ouelNled In New lbrk Cou tY Nota PUblik cwwWsalon Expire'Fib.25,2ob..3 My Commission Expires STATE OF ) ) ss' COUNTY OF ) On before me, Notary Publio, personally appeared _ ___ Personally known to me (or proved to me on the basis of satisfactory evidence) to be the persons) whose naine(s) i subscribed to the within Instrument and acknowledged to me that executed the same in authorized capaclty(ies), and that by signature(s) on the Instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal, Notary Public My Commission Expires ZT'd 867'014 WtiMOT 2M3'927'd35 EXHIBIT A LOTS 3 THROUGH 9 AND LETTERED LOT "A", ALL INCLUSIVE OF TRACT 29695, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 315, PAGES 6 THROUGH 8, INCLUSIVE OF MAPS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.