HomeMy WebLinkAboutLoan Recognition Agmt (Summit-Properties) Recorcling Requested By;
AJter Recording Return to:
KEYBANK NAT[ONAL ASSOCIATION
Home Builder Group
Mailcode: CA-01-02-0302
18101 Von Karman Avenue, Suite 1 100
Irvine,CA 92612
Attn: Anita R. DeGraw
LOAN RECOGNITION AGREEMENT
7'his Loan Recognition Abreement ("Agreement"), dated for reference purposes as of June_,
2007, is among SUMMIT-MONTEREY PROPERTIES, LLC, a California limited liability company,
("Developer"); KEYBANK NATIONAL ASSOCIATION, a national banking association, its successors
and assigns, individually as a lender and as administrative agent for each of the lending institutions that
executed the Loan Agreements, as defined below, as a lender, and their permitted successors and assigns
(collectively, `Zender");and the CITY OF PALM DESERT,a California municipal corporation("City").
RECITALS
A. Developer is the owner of certain real property (the "Property") located within the City
of Palm Desert, County of Riverside, State of California, and legally described on Exhibit A attached
hereto. Developer is in the process of developing and constructing two hundred forty-seven (247)
townhome units in fifty-seven (57) separate condominium buildings located on the Property (collectively,
the "Residential Deve/��pment"). The Property and the Residential Development are at times referred to
collectively herein as the "Project."
B. In connection with the construction of the Residential Development, Developer and City
entered into that certain Restricted Housing Cost Agreement dated July 13, 2006, and recorded in the
official records of Riverside County, California on September 8, 2006, under Instrument No. 06-0668680
(the "//ousing Agreement"). Pursuant to the terms of the Housing Agreement, Developer agrced to
designate twenty percent(20%)of the 247 units in the Residential Development,a total of 49 units(each a
"Designated Unit," and, collectively, the "Designated Units"), for initial sale at a restricted cost (the
"Restricted Housing Cost") and to a limited group of qualified home purchasers (the "Qualifted
Purchusers").
C. Borrower has an existing Acquisition and Development Loan from Lender secured by the
Property in the maximum principal amount of �21,735,000.00 and, concurrently herewith, Lender, on
behalf of itself and as administrative agent for other participating lenders, is making a loan to Developer in
the maximum revolving principal amount of$24,860,000.00 to finance a portion of the construction of the
Residential Development (collectively the "Loans"). The Loans are governed by a Land Acquisition and
Developmcnt Loan Agreement and a Revolving Residential Condominium Construction Loan Agreement,
respectively, (collectively, the "Loan Agreements") and related Promissory Notes in favor of the
participating lenders(collectively,the "Notes"). The obligations of Developer under the Loan Agreements
and Notes are secured by a deed of trust against the Property executed by Developer,as grantor,in favor of
Lender, as beneficiary, dated November 7, 2005, and recorded on November 10, 2005, in the official
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records of Riverside County, California under ]nstrument No. 2005-2936961 that is to be amended to
secure both Loans pursuant to the First Amendment to Deed of Trust dated and recorded
contemporaneously herewith (as amendcd, the "Security /nstrument"). The Loan Agreements, Notes,
Security Instrument and any other documents that evidence, secure, or otherwise govem the Loans are
referred to herein collectively as the "Loan Documents."
D. This Agreement is being executed to confirm and clarify certain obligations under the
Housing Agreement and certain rights of the Lender with respect to the Project.
AGREEMENTS
NOW, THEREFORE, in consideration of the matters described in the foregoing Recitals, which
Recitals are incorporated herein and made a part hereof,and for other good and valuable consideration,and
to induce the Lender to make the Loan to Developer,the parties hereto hereby agree as follows:
1. Permitted Encumbrance. The City hereby consents to the existence and the making of the
Loans and the encumbrance of the Project by the Security Instrument and agrees that such secured
financing alone shall not constitute a default under the Housing Agreement.
2. Foreclosure of Project as Permitted Transfer. The transfer of the Project, or any portion
thereof, following the commencement of a foreclosure of the Security Instrument, either pursuant to
foreclosure sale or deed-in-lieu of foreclosure (as applicable, a "Foreclosu�e Transjer"), shall not
constitute the sale of Designated Units pursuant to terms of the Housing Agreement and any restrictions
appearing in the Housing Agreement with respect to the Designated Units shall have no applicability to
such Foreclosure Transfer;providec(, however, that Lender,or any third-party acquiring the Project,or any
portion thereof, following a Foreclosure Transfer shall be bound by the obligations of the Developer under
the Housing Agreement with respect to the initial sales of Designated Units, including, but not limited to,
the obligation to sell the Designated Units to Qualified Purchasers at or below the applicable Restricied
Housing Cost, in the same manner and to the same extent that Developer had been so bound prior to such
Foreclosure Transfer. In addition, the City agrees that it shall have no right to claim any portion of the
proceeds of a►�oreclosure Transfer under the Housing Agreement.
3. Right of First Refusal. The City hereby confirms that the Right of First Refusal contained in
Section 7 of the Flousing Agrecment does not apply to (i)the initial sale of a Designated Unit by
Developer, or any other party that succeeds to the obligations of Developer following a Foreclosure
Transfer,to a Qualified Purchaser,or(ii)a Foreclosure Transfer.
4. Suceessors and Assigns. This Agreement inures to the benefit of, and is binding upon, the
parties hereto and their respective successors and assigns.
5. Governing Law. 'I'his Agreement is construcd by, and governed in accordance with,the laws
of the State of California,without regard to that state's choice of law rules.
6. Severability. If any provision of this Agreement is invalid, illegal, or unenforceable, such
provision shall be considered severed from the rest of this Agrcement and the remaining provisions shall
continue in full force and effect as if the invalid provision had not been included.
7. Entire Agrcement. This Agrcement constitutes the entire agreement between the parties,and
may be modified only by a written instrument signed by all parties.
8. Counterparts. This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which taken together shall constitute
one and the same instrument.
Loun Recognition Agreement Page 2
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IN WITNESS WHEREOF, Developer, Lender and the City execute this Agreement as of the day
and year first above writtcn.
CITY: LENDER:
CITY OF PALM DESERT, KEYBANK NATIONAL ASSOCIATION,
a California municipal corporation a national banking association
By: BY:
Name: Name:
Its: Its:
DEVF,LOPER:
SUMMIT-MONTEREY PROPERTIES, LLC,
a California limited liability company
Fiy Summit Properties
a California corporation
Its Manager
13y
Steven H. Levenson
Its President
Loan Recognrtion Agreement PaS�3
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S`I�ATE OF CALIFORNIA
ss.
COUNTY OF
On , 2007, before me, , a Notary
Public in and for said County and State,personally appeared ,
personally known to mc (or proved to mc on the basis
of satisfactory evidencc) to be thc person(s) whose FOR NOTARY SEAL OR STAMP
name(s) is/are subscribed to the within instrument and
acknowledgeJ to me that he/she/they executed the
same in his/hedtheir authorized capacity(ics), and that
by his/her/their signature(s) on the instrument the
person(s). or the entity upon behalf of which the
person(s)acteJ,executed the instrument.
W[TNESS my hand and official seal.
Signature
STATE OF CALIFORNIA
ss.
COUNTY OF
On , 2007, before me, , a Notary
Public in and for said County and State,personally appeared
personally knowm to me (or proved to me on the basis
of satisfactory evidence) to be the person(s) whose FOR NOTARY SEAL OR STAMP
n�me(s) is/are subscribed to thc within instrument and
acknowledged to me that he/she/they executed the
samc in his/hedtheir authorired capacity(ies), and that
by his/hedtheir signature(s) on Ihe instrument the
person(s), or the entity upon behalf of ���hich the
person(s)acted,executed the instrument.
WITNESS my hand and official seal.
Signaturc
Loan Kecognrtron Agreement Page-�
N354437 14G57-252 07 71hh031.doc 6/14/2007
STATE OF CALIFORNIA
ss.
COUNTY OF
On ,2007, before me, , a Notary
Public in and for said County and State,personally appeared >
personally known to me (or proved to me on the basis
of satis�actory cvidence) to be the person(s) whosc FOR NOTARY SEAL OR STAMP
namc(s) is/are subscribcd to the within instrumcnt and
acknowledgcd to me that he/she/they executcd thc
same in his/her/their authorized capacity(ics), and that
by his/hedtheir signature(s) on thc instrument the
person(s), or the entity upon behalf of which thc
person(s)acted,executeJ the instrument.
W[TNESS my hand and official sea1.
Signature
Loan Recognitron Agreement Page S
k354437 14657-252 07 71hh031.doc 6/14/2007
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
THE LAND REFERRED TO HEREIN IS S[TUATED IN THE STATE OF
CALIFORN[A, COUNTY OF RIVERSIDE, CITY OF PALM DESERT, DESCRIBED
AS FOLLOWS:
THF.. SOUTH HALF OF THE SOUTHEAST QUARTER OF THE NORTHWEST
QUARTER OF SECTiON 29, TOWNSHIP 4 SOUTH, RANGE G EAST, SAN
BERNARD[NO BASE AND MERIDIAN.
"I'OGLTI-IER WITH A 20 FOOT EASEMENT FOR INGRESS AND EGRESS
ALONG WITH THE SOUTH LINE OF THE SOUTHWEST QUARTER OF THE
NORTHWEST QUARTER OF SECTION 29, TOWNSHIP 4 SOUTH, RANGE 6
EAST, SAN BERNARDINO BASE AND MERIDIAN.
EXCEP"I'1\'G THEREFROM THAT PORT[ON CONVEYED TO TFiE CITY OP
PAL;Vt DESERT BY DEED RECORDED JANUARY 10, 2005, AS INSTRUMENT
NO.2005-0021756,OF OFFICIAL RECORDS.
/,oan Recognition Agreement E:xhibit A
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