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Resolution No. 76791 2 3 4 5' 6' 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 7679 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A SUBORDINATION AGREEMENT BY AND BETWEEN THE CITY OF VERNON, R.C.C.I. AND MERRILL LYNCH BUSINESS FINANCIAL SERVICES, INC. REGARDING THE PROPERTY LOCATED AT 1912 EAST VERNON AVENUE WHEREAS, on December 8, 1998, the owners of the properties at 4510 South Alameda Street and 1912 East Vernon Avenue recorded a Covenant and Agreement that provided for parking, exit access to a public way, surface water drainage to the street as required by the City's Zoning Ordinance and parcels to be held as one and no portion sold separately; and WHEREAS, R.C.C.I., the owners of the property located at 1912 East Vernon Avenue, desires that the City agree to a Subordination Agreement in order to put their new lender, Merrill Lynch Business Financial Services, Inc ("Merrill Lynch") in the same position as their previous lender, American International Bank, in order to (refinance their loan on the property located at 1912 East Vernon lAvenue; and WHEREAS, R.C.C.I. has represented that if it cannot refinance its loan it would suffer financial hardship resulting in the possible loss of jobs; and WHEREAS, the Subordination Agreement will not change the City's position because the new lender or mortgagee is subject to the same restrictions of the Covenant and Agreement; and WHEREAS, R.C.C.I. has provided the Director of Community Services with a copy of a recorded easement that shows that 4510 South ' x r + r 1 Alameda Street has an easement for ingress and egress, building 2 maintenance and access to a drainage pipe through 1912 East Vernon 3 Avenue; and 4 WHEREAS, the owners of the property located at 4510 South 5 Alameda Street have agreed to reaffirm their obligation to provide 6 parking, as required by the Vernon City Code, in the event they should 7. lose the parking currently available and being used at 1912 East Vernon 8 Avenue; and 9 WHEREAS, by letter dated December 14, 2000, Bruce V. 10 Malkenhorst, City Administrator/City Clerk recommended the approval and 11 execution of.the Subordination Agreement. 12 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY 13 OF VERNON AS FOLLOWS: 14 SECTION 1: The City Council of the City of Vernon hereby finds 15 and determines that the recitals contained hereinabove are true and 16 SECTION 2: The City Council of the City of Vernon hereby 17 approves the Subordination Agreement with R.C.C.I. and Merrill Lynch, a 18 copy of which is attached hereto as Exhibit "A" and made a part hereof. 19 SECTION 3: The City Council of the City of Vernon hereby 20 authorizes the Mayor and the City Clerk to execute said Agreement for, 21 and on behalf of, the City of Vernon. 22 SECTION 4: The City Council of the City of Vernon hereby 23 directs the City Clerk, or his designee, to transmit one fully executed 24 and notarized original of the Agreement to each of the following: 25 R.C.C.I. 26 Attn. David L. Prince, Esq. 1912 East Vernon Avenue, Suite 100 27 Vernon, CA 90058 28 2 - A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Merrill Lynch Business Financial Services, Inc. c/o Frandzel, Robins, Bloom & Csato, L.C. Attn. Steve Bloom, Esq. 6500 Wilshire Blvd., 17th Floor Los Angeles, CA 90048-4920 SECTION 5: The City Clerk of the City of Vernon shall certify to the passage of this resolution, and thereupon and thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this 3rd day of January, 2001. EONIS C. MAL URG, Mdyor ATTEST: BRUCE V. MALKENHORST, City Clerk - 3 - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STATE OF CALIFORNIA ) ss COUNTY OF LOS ANGELES ) I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 7679, was duly adopted by the City Council of the City of Vernon at an adjourned regular meeting of the City Council duly held on Wednesday, January 3. 2001, and thereafter was duly signed by the Mayor of the City of Vernon. I(SEAL) /: �L , /' I �' BRUCE V. MALKENHORST, City Clerk 4 - EXHIBIT RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: MERRILL LYNCH BUSINESS FINANCIAL SERVICES, INC. 222 No. LaSalle Street, 17th Floor Chicago, IL 60601 Attn: Sandy Savich Assessor's Parcel No. SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE SUBORDINATION AGREEMENT NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS SUBORDINATION AGREEMENT ("Subordination Agreement") is hereby made as of this day of January, 2001, by R.C.C.I., a California general partnership ("Owner") as owner of the "Property" (as defined below), CITY OF VERNON, ("City"), as beneficiary of the "Subordinated Agreement" (as defined below), and MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC. ("Lender"), as lender under the "Senior Loan Documents" (as defined below). WITNESSETH: THAT WHEREAS, Owner did execute a Covenant and Agreement, covering the Property, in favor of City, which Covenant and Agreement was recorded December 8, 1998, as Document No. 982228326, Official Records of Los Angeles County, California (the "Subordinated Agreement"); and WHEREAS, Owner is the owner of certain real property (the "Property") located in the County of Los Angeles, State of California, as more particularly described on Exhibit "A", attached hereto and incorporated herein by this reference; and WHEREAS, Owner is obtaining financing from Lender (the "Loan") which will be secured by a deed of trust covering the Property (the "Senior Deed of Trust"), which Loan will be evidenced by a promissory note, (the "Note"), in the amount of One Million Five Hundred Thousand and no/100 Dollars ($1,500,000.00), payable with interest and upon the terms and conditions described in the Note, the Senior Deed of Trust, and such other customary loan documents necessary or appropriate to evidence and/or secure the Loan (which documents, together with the Note and Senior Deed of Trust, as collectively referred to herein as the "Senior Loan Documents"); and WHEREAS, it is a condition precedent to obtaining the Loan that the Senior Loan Documents shall be and remain at all times a lien or charge upon the Property, prior and superior to the lien or charge of the Subordinated Agreement; and 239952.2 WHEREAS, Lender is willing to make the Loan provided the Senior Loan Documents shall at all times be a lien or charge upon the Property, prior and superior to the lien or charge of the Subordinated Agreement and provided that the City will specifically subordinate the Subordinated Agreement to the lien or charge of the Senior Loan Documents in favor of Lender (as such Senior Loan Documents may be modified or amended from time to time); and WHEREAS, it is to the mutual benefit of the parties hereto that Lender makes such Loan to Owner; and City is willing that the Senior Loan Documents shall, when recorded, constitute a lien or charge upon the Property which is prior and superior to the lien or charge of the Subordinated Agreement. NOW THEREFORE, inconsideration 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, Lender to make the Loan, it is hereby declared, understood and agreed as follows: l . That the Senior Loan Documents securing the Loan in favor of Lender, and any renewals or extensions thereof, shall be and remain at all times a lien or charge on the property therein described, prior and superior to the lien or charge of the Subordinated Agreement. 2. That Lender would not make the Loan without this Subordination Agreement. 3. That this Subordination Agreement shall be the whole and only agreement with regard to the subordination of the lien or charge of the Subordinated Agreement to the lien or charge of the Senior Loan Documents and shall supersede and cancel, but insofar as would affect the priority between the deeds of trust hereinbefore specifically described, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the Subordinated Agreement, which provide for the subordination of the lien or charge thereof to another deed or deeds of trust or to another mortgage or mortgages. 4. City declares, agrees and acknowledges that: a. City consents to the Senior Loan Documents being senior to the Subordinated Agreement. b. Lender in making disbursements pursuant to any such agreement is under no obligation or duty to, nor has Lender represented that it will, see to the application of 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; and C. City knowingly and voluntarily waives, relinquishes and subordinates the lien or charge of the Subordinated Agreement in favor of the lien or charge upon the Property of the Senior Loan Documents 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, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered 239952.2 -2- into but for said reliance upon this waiver, relinquishment and subordination. 5. City acknowledges and agrees that Owner and Lender may, from time to time, (i) enter into new documents to secure the existing Loan or, (ii) modify the Senior Loan Documents. With respect thereto, in the event that any additional documents evidencing Lender's security interest in the Property, including, without limitation, any amendment or modification to any of the Senior Loan Documents (collectively, "Additional Security Documents") are recorded against the Property after the recordation of this Subordination Agreement in the Official Records of Los Angeles County, California, the lien or charge of the Subordinated Agreement shall be and remain subordinate to the lien or charge upon the Property of such Additional Security Documents. In furtherance of the foregoing, City agrees to execute, if requested by Owner or Lender, an additional agreement, in form and content reasonably similar to this Subordination Agreement, and containing terms and provisions similar to those set forth in this Subordination Agreement and otherwise in recordable form, to evidence the continuing subordination of the lien or charge of the Subordinated Agreement to the lien or charge of any Additional Security Documents. 6. This Subordination Agreement shall be binding upon and shall inure to the benefit of the respective successors and assigns of the parties hereto. 7. This Subordination Agreement may be executed in counterparts which together shall constitute but one and the same original. NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A FULL PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A PORTION OF WHICH MAY BE EXTENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. City: THE CITY OF VERNON, a Municipal Corporation By: Leonis C. Malburg, Mayor Attest: Bruce V. Malkenhorst City Clerk Approved as to form: Eduardo Olivo City Attorney [Signatures Continued on Next Page] 239952.2 -3- Borrower: R. C. C. I. a California general By: _ Name i < rfj <&a Its 7NSf?— By:� Name: roll 9' irJ au Its: 6w;4at, k&t *'r Lender: MERRILL LYNCH BUSINESS FINANCIAL SERVICES, INC. By: Name: Its: By: Name: Its: [ALL SIGNATURES MUST BE ACKNOWLEDGED] NOTICE: IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT THERETO. 239952.2 -4- STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) On Jan. 3, 2001 before me, Howard D . Choi , allotary Public in and for said County and State, personally appeared Ming Bin Kou personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/am subscribed to the within instrument, and acknowledged to me that he/sley executed the same in hisAmMAlt authorized capacity/M, and that by hisAl 44hbft 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. Not*v Public STATE CALIFORNIA ) ss COUNT OF LOS ANGELES ) HOWARD D. CHOI Commission # 1225625 Z Notary Public - California f. Z Los Angeles County My Comm. ipres Jul 19, 2003 On Jan . 3, 2001 , before me, Howard D . Choi , allotary Public in and for said County and State, personally appeared Ming Shin Kou , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) isAh subscribed to the within instrument, and acknowledged to me that he*ha executed the same in his/hHEL"if authorized capacityTm& and that by hisRwAk4k 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. HOWARD D. CHOI Commission # 1225625 Notary Public - Cafrfomia Z Las Angeles Coin t.Ay Corm. fires Jul 19.2lJD;i 1 239952.2 -5- STATE OF CALIFORNIA ss COUNTY OF On , 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 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. WITNESS my hand and official seal. Notary Public STATE OF CALIFORNIA ss COUNTY OF On , before me, , allotary Public in and for said County and 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/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public 239952.2 -6- STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) On , before me, Gloria J . Orosco , allotary Public in and for said County and State, personally appeared Leonis C . Malburg , personally known tome( to be the person(s) whose name(s) is/ffe subscribed to the within instrument, and acknowledged to me that he/shefthey executed the same in his/he-FAheir authorized capacity/ies, and that by hisfherAheir signatures-) on the instrument the person(s), or the entity upon behalf of which the person(&) acted, executed the instrument. WITNESS my hand and official seal. Notary Public 239952.2 -7- •. .1 r .w ` 1, l i EXHIBIT A ATTACHED TO AND HEREBY MADE A PART OF SUBORDINATION AGREEMENT AMONG R.C.C.I., A CALIFORNIA GENERAL PARTNERSHIP, CITY OF VERNON, AND MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC. COMMON ADDRESS OF REAL PROPERTY: RECORD OWNER: LEGAL DESCRIPTION: PARCELI: 1908-1912 East Vernon Avenue Vernon, CA 90058 SHU CHIN KOU and SHAN CHUN KOU, husband and wife as community property, MING BIN KOU, a married man as his sole and separate property, AND MING SHIN KOU, a married man as his sole and separate property, all as joint tenants. THOSE PORTION OF NEW VERNON, 1N THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 21, PAGES 25 AND 26, OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTER LINES OF VERNON AVENUE, 60 FEET WIDE, AND THE EAST BRANCH OF ALAMEDA STREET, 30 FEET WIDE, AS THE SAME IS ESTABLISHED BY THE CITY OF ENGINEER OF SAID CITY; THENCE ALONG SAID CENTER LINE OF VERNON AVENUE, NORTH 89 DEGREES 50 MINUTES 30 SECONDS EAST 235.56 FEET; THENCE AT RIGHT ANGLES TO SAID CENTER LINE, SOUTH 0 DEGREES 09 MINUTES 30 SECONDS EAST 30 FEET TO THE TRUE POINT OF BEGINNING IN THE SOUTH LIENE OF SAID AVENUE; THENCE CONTINUING SOUTH 0 DEGREES 09 MINUTES 30 SECONDS EAST 90.70 FEET; THENCE PARALLEL WITH SAID AVENUE, SOUTH 89 DEGREES 50 MINUTES 30 SECONDS WEST 144.83 FEET TO THE EAST LINE OF LAND DESCRIBED IN DEED TO SOUTHERN PACIFIC COMPANY, RECORDED IN BOOK 447, PAGE 184 OF DEEDS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; THENCE ALONG SAID EAST LINE, NORTH 2 DEGREES 45 MINUTES 44 SECONDS EAST 90.82 FEET TO SAID SOUTH LINE OF VERNON AVENUE; THENCE ALONG SAID AVENUE, NORTH 89 DEGREES 50 MINUTES 30 SECONDS EAST 140.20 FEET TO THE TRUE POINT OF BEGINNING PARCEL 2; THOSE PORTIONS OF NEW VERNON, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 21, PAGES 25 AND 26, OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF THE LAND DESCRIBED IN THE DEED TO DORTHY STRAWN, RECORDED FEBRUARY 28, 1942, AS INSTRUMENT NO. 671 OF OFFICIAL RECORDS OF SAID COUNTY; THENCE ALONG THE PROLONGATION OF THE NORTHERLY LINE OF SAID LAND, NORTH 89 DEGREES 60 MINUTES 30 SECONDS EAST 153.80 FEET TO THE NORTHWEST CORNER OF THE LAND DESCRIBED IN THE DEED TO THE ALAVERN CO., RECORDED JANUARY 30, 1975 AS INSTRUMENT NO. 382 OF OFFICIAL RECORDS OF SAID COUNTY; THENCE ALONG THE WESTERLY LINE OF THE LAND DESCRIBED IN SAID LAST MENTIONED DEED AND THE PROLONGATION THEREOF, SOUTH 0 DEGREES 41 MINUTES 30 SECONDS WEST 153.45 FEET TO THE MOST NORTHERLY CORNER OF THE LAND FIRST DESCRIBED IN THE DEED TO THE ARGOSY FUND, RECORDED NOVEMBER 28, 1951, AS INSTRUMENT NO. 754, OF OFFICIAL RECORDS IN SAID LAST MENTIONED DEED, SOUTH 89 DEGREES 50 MINUTES 30 SECONDS WEST 299.55 FEET TO THE EASTERLY LINE OF THE LAND FIRST DESCRIBED IN THE DEED TO THE SOUTHERN, PACIFIC COMPANY, RECORDED JUNE 91 1888 AS INSTRUMENT NO. 76 IN BOOK 447 PAGE 184 OF DEEDS, IN SAID RECORDERS OFFICE; THENCE ALONG SAID EASTERLY LINE, NORTH 2 DEGREES 45 MINUTES 44 SECONDS EAST TO THE SOUTHWEST CORNER OF THE LAND DESCRIBED IN SAID HEREINABOVE MENTIONED DEED TO DORTHY STRAWN; THENCE ALONG THE SOUTHERLY AND EASTERLY LINES OF SAID HEREINABOVE MENTIONED DEED TO DORTHY STRAWN AS FOLLOWS: NORTH 89 DEGREES 50 MINUTES 30 SECONDS EAST 144.83 FEET, AND NORTH 0 DEGREES 09 MINUTES 30 SECONDS WEST TO THE POINT OF BEGINNING. SUPPORTING DOCUMENTS u . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF VERNON AND SHU CHIN KOU AND SHAN CHUN KOU REGARDING THE CITY OF VERNON'S PARKING REQUIREMENTS THIS MEMORANDUM OF UNDERSTANDING REGARDING THE CITY OF VERNON'S PARKING REQUIREMENTS (this "MOU") is made, entered into and executed in duplicate originals, either copy of which may be considered and used as the original hereof for all purposes, as of this day of January, 2001 IBY AND BETWEEN IAND RECITALS THE CITY OF VERNON, A Municipal Corporation (hereinafter referred to as "the City") 4305 Santa Fe Avenue Vernon, CA 90058-0805 Shu Chin Kou.and Shan Chun Kou (hereinafter referred to as "the Property Owners") 4510 South Alameda Street Los Angeles, CA 90058. WHEREAS, on December 8, 1998, a Covenant and Agreement (hereinafter referred to as "the Covenant and Agreement") was recorded by the owners of the real property located at 4510 South Alameda Street and 1912 East Vernon Avenue for the benefit of the City; and WHEREAS, the owners of the property located at 4510 South Alameda Street are Shu Chin Kou and Shan Chun Kou; and ' r 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2E WHEREAS, Neptune Foods is situated on the property .ocated at 4510 South Alameda Street; and WHEREAS, the owners of the property located at 1912 ;ast Vernon Avenue R.C.C.I., a California general partnership which is made up of the Kou Family, specifically, Shu Chin Kou, Shan Chun Kou, Ming Bin Kou and Ming Shin Kou and WHEREAS, the purpose of the Covenant and Agreement is to provide parking, exit access to a public way, and surface water drainage to the street as required by Section 24.10 of the city's Code, the City's Zoning Ordinance, and the 1994 Edition of the Uniform Building Code; and WHEREAS, the Covenant and Agreement requires the property owners of 4510 South Alameda Street and 1912 East Vernon Avenue to hold their respective properties as one parcel and that no portion shall be sold separately; and WHEREAS, the property owners of these two properties agreed that the Covenant and Agreement shall run with the land described therein and be binding upon themselves, and future owners, encumbrancers, their successors, heirs or assignees and shall continue in effect until released by the authority of the Director of Community Services or if no longer required'by law. WHEREAS, R.C.C.,I. is attempting to refinance its mortgage on the property located at 1912 East Vernon Avenue and 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ias requested that the City execute a Subordination Agreement to )lace the new lender in the same position as the existing Lender; and WHEREAS, the City has expressed a willingness to execute such an agreement with R.C.C.I so long as the City can be assured that the parking, exit access to a public way, and surface water drainage to the street as required by the City's Code can be maintained in the event that parcels should be held and/or sold separately; and WHEREAS, the Neptune's parking requirements are presently being satisfied by using approximately 60 parking spaces on the property located at 1912 Vernon Avenue; and WHEREAS, the Property Owners have expressed a desire to reaffirm their obligation to provide parking, as required by the City Code, in the event they should lose their parking on 1912 Vernon Avenue, if that property should be held and/or sold off separately; WHEREAS, the Property Owners are making this representation in order to facilitate the execution of the Subordination Agreement for the benefit of R.C.C.I., and WHEREAS, based on this representation, the City agrees to enter into an acceptable Subordination Agreement. t. a ■ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NOW, THEREFORE, in consideration of the Recitals set forth above, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as set forth below. 1. The parties hereto agree that this MOU evidences the commitment of the Property Owners to obtain parking, as required by the and consistent with the Vernon City Code, in the event that the property located at 1912 Vernon Avenue should be held and/or sold off separately. IN WITNESS WHEREOF, the parties hereto have executed this MOU, duly authorized, as of this date, month and year first, above written. THE CITY OF VERNON By: EONIS C. MAL G, May r 4510 SOUTH ALAMEDA STREET By: S u Ch Kou ATTEST: By: BRUCE V. MALKENHORST, City Clerk APPROVED AS TO FORM: By: EDUARDO OLIVO, City Attorney I . �!J 9. Mn Chun Kou s RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: MERRILL LYNCH BUSINESS FINANCIAL SERVICES, INC. 222 No. LaSalle Street, 17th Floor Chicago, IL 60601 Attn: Sandy Savich Assessor's Parcel No. SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE SUBORDINATION AGRE_ ENT_ NOTICE: THIS SUBORDINATION AGREEMENT RESULTSF OWERPRIO THAN THELIE PROPERTY BECOMING SUBJECT OF SOME OTHER OR LATER SECURITY INSTRUMENT. THIS SUBORDINATION AGREEMENT ("Subordination Agreement") is hereby made as of this day of January, 2001, by R.C.C.I., a California general partnership ("Owner") as owner of the "Property" (as defined below), CITY OF VERNON, ("City"), as beneficiary of the "Subordinated Agreement" (as defined below), and MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC. ("Lender"), as lender under the "Senior Loan Documents (as defined below). WITNESSETH: THAT WHEREAS, Owner did execute a Covenant and Agreement, covering the Property, in favor of City, which Covenant and Agreement was recorded December 8, 1998, as Document No. 982228326, Official Records of Los Angeles County, California (the "Subordinated Agreement"); and WHEREAS, Owner is the owner of certain real property (the "Property") located in the County of Los Angeles, State of California, as more particularly described on Exhibit "A", attached hereto and incorporated herein by this reference; and WHEREAS, Owner is obtaining financing from Lender (the "Loan") which will be secured by a deed of trust covering the Property (the "Senior Deed of Trust"), which Hundred Thousand and videnced Doll s by a promissory note, (the "Note"), in the amount of One Million Five Hu ($1,500,000.00), payable with interest and upon the terms and conditions described in the Note, the Senior Deed of Trust, and such other customary loan documents necessary or appropriate to evidence and/or secure r with the Note and Senior Deed of Trust, as collectively referred to the Loan (which documents, togethe herein as the "Senior Loan Documents"); and WHEREAS, it is a condition precedent to obtaining the Loan that the Senior Loan Documents shall be and remain at all times a lien or charge upon the Property, prior and superior to the lien or charge of the Subordinated Agreement; and 239952.2 WHEREAS, Lender is willing to make the Loan provided the Senior Loan Documents shall at all times be a lien or charge upon the Property, prior and superior to the lien or richar ofAgrthe Subent orthe lien Agreement and provided that the City will specifically subordinate the or charge of the Senior Loan Documents in favor of Lender (as such Senior Loan Documents may be modified or amended from time to time); and WHEREAS, it is to the mutual benefit of the parties hereto that Lender makes such Loan to Owner; and City is willing that the Senior Loan Documents shall, when recorded, constitute a lien or charge upon the Property which is prior and superior to the lien or charge of the Subordinated Agreement. NOW TBEREFORE, inconsideration 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 Lender to make the Loan, it is hereby declared, understood and agreed asll l . That the Senior Loan Documents securing the Loan in favor of Lender, and any renewals or extensions thereof, shall be and remain at all times a lien or charge on the property therein described, prior and superior to the lien or charge of the Subordinated Agreement. 2. That Lender would not make the Loan without this Subordination Agreement. 3. That this Subordination Agreement shall be the whole and only agreement with regard to the subordination of the lien or charge of the Subordinated Agreement to the lien or charge of the Senior Loan Documents and shall .supersede and cancel, but insofar as would affect the priority between the deeds of trust hereinbefore specifically described, any prior agreement as to such subordination including, but not limited to, those provisions, if any, contained in the Subordinated Agreement, nother deed or deeds of trust subordination of the lien or charge thereof to a or to another mortgage or mortgages. 4. City declares, agrees and acknowledges that: a.. City consents to the Senior Loan Documents being senior to the Subordinated Agreement. b. Lender in making disbursements pursuant to any such agreement is under no obligation or duty to, nor has Lender represented that, it will, see to the application of such provided for y application or use of such proceeds for purposes other than those in such agreement or agreements shall not defeat the subordination herein made in whole or in part; and C. City knowingly and voluntarily waives, relinquishes and subordinates the lien or charge of the Subordinated Agreement in favor of the lien or charge upon the Property of the Senior Loan Documents 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, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered 239952.2 -2- into but for said reliance upon this waiver, relinquishment and subordination. 5. City acknowledges and agrees that Owner and Lender may, from time to time, (i) enter into new documents to secure the existing Loan or, (ii) modify the Senior Loan Documents. With respect thereto, in the event that any additional documents evidencing Lender's security interest in the Property, including, without limitation, any amendment or modification to any of the Senior Loan Documents (collectively, "Additional Security Documents") are recorded against the Property after the recordation of this Subordination Agreement in the Official Records of Los Angeles County, California, the lien or charge of the Subordinated Agreement shall be and remain subordinate to the lien or charge upon the Property of such Additional Security Documents. In furtherance of the foregoing, City agrees to execute, if requested by Owner or Lender, an additional agreement, in form and content reasonably similar to this Subordination Agreement, and containing terms and provisions similar to those set forth in this Subordination Agreement and otherwise in recordable form, to evidence the continuing subordination of the lien or charge of the Subordinated Agreement to the lien or charge of any Additional Security Documents. 6. This Subordination Agreement shall be binding upon and shall inure to the benefit of the respective successors and assigns of the parties hereto. 7. This Subordination Agreement may be executed in .counterparts which together shall constitute but one and the same original. NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A FULL PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A PORTION OF WHICH MAY BE EXTENDED FOR OTI-IER PURPOSES THAN IMPROVEMENT OF THE LAND. City: THE CITY OF VERNON, a Municipal Corporation By: e nis C. Malburg, Ma -tor Attest: Bruce V. Malkenhorst City Clerk Approved as to form: <f- A4,6. a - Eduardo Olivo City Attorney [Signatures Continued on Next Page] 239952.2 _3_ Borrower: R. C. C. I. a California general partnership By: Name Its . Lender: MERRILL LYNCH BUSINESS FINANCIAL SERVICES, INC. By: Name: Its: By: Name: Its: [ALL SIGNATURES MUST BE ACKNOWLEDGED] NOTICE: IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT THERETO. 239952.2 -4- Borrower: R. C. C. I. a California general partnership By: Name: Its By: Name: Its: Lender: MERRILL LYNCH BUSINESS FINANCIAL SERVICES, INC. By: Name: Its: tj By: Name: �.._ Its: [ALL SIGNATURES MUST BE ACKNOWLEDGED] NOTIC E: ITIS RECOMMENDED THAT, PRIORTO THE EXECUTION ATTORNEYS WITH RESPEOF TIES CT AGREEMENT, TIC PARTIES CONSULT WITH THEIR A THERETO. 239952.2 -4- STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) On Jan . 3 , 2001 , before me, Howard D . Choi allotary Public in and personally for said County and State, personally appeared Nti „o Ri n Kou be the person(s) whose known to me (or proved to me on the basis of satisfactory evidence) to name(s) is/Ke subscribed to the within instrument, and acknowledged to me that he/A R4/ 0 executed the same in his/l��sst authorized capacity/ios, and that by his/h 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. Public STATfi OF CALIFORNIA ) ss COUNTY OF LOS ANGELES ) HOWARD D.CHOI 1225 Commission # 1225625 Notary Public - Califomia z Los Angeles County " V My Comm. Bores Jul 19.2003 Howard D. . Choi allotary Public in and On Jan. 3 , 2001 , before me, personally known for said County and State, personally appeared M--- n--�L i n KAl, 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/slj e * executed on the instrument same the his/her/their authorized capaci h�f of which at by the person(s)actked, executed the instrument. person(s), or the entity upon b WITNESS my' hand and official seal. HOWARD D. CHOI Commission # 1225625 Notary Public - California Los Angeles County Co'nm. Bores Jul 19, 2003 239952.2 -5- STATE OF ILLINOIS ) )ss. COUNTY OF Cody:-) On au ? 1oo1 before me, ,Sam SA v �cN , Notary Public in and for said County and'State, personally appeared t , nno i ' 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/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted executed the instrument. WITNESS my hand and official s Signature SANDY SAVICH 4 I'll fV1W I* nZ=0 STATE OF ILLINOIS ) )ss. COUNTY OF p0 �,__ ) On' , ja,,,�o,,, u 2, .Zoo ► before me, SRrvb Srtul 0 , Notary Public in and for said County and State, personally appeare (. (�. koer-2'Yn) 'r-' ' 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/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted executed the instrument. WITNESS my hand and official seal. Signature (Seal) A r �• ........a a.• 'a'a.aLa� STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) On ,1C� c_ / ��/ before me, Gloria J . orosco , allotaryPublic in and for said Com ty and State, personally appeared Leonis C. Marburg _ personally known tome (vrlmrvcd-to-rrtcoYrt ieias' tvidenc e) to be the person(s) whose name(s) is/ere subscribed to the within instrument, and acknowledged to me that he/sirdthey' executed the same in his/her/their authorized capacity/ies, and that by his/hefAkeif signatures) 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. GLORIA I OROSCO Commission # 1194618 Mary public - Colifomia /. aLc,s A�nggeiiye$ CounMiyIL orym 239952.2 -7- .. c EXHIBIT A ATTACHED TO AND HEREBY MADE A PART OF SUBORDINATION AGREEMENT AMONG R.C.C.I., A CALIFORNIA GENERAL PARTNERSHIP, CITY OF VERNON, AND MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC. COMMON ADDRESS OF'REAL PROPERTY: RECORD OWNER: LEGAL DESCRIPTION: 1908-1912 East Vernon Avenue Vernon, CA 90058 SHU CHIN KOU and SHAN CHUN KOU, husband and wife as community property, MING BIN KOU, a married man as his sole and separate property, AND MING SHIN KOU, a married man as his sole and separate property, all as joint tenants. PARCELI: THOSE PORTION OF NEW VERNON, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 21, PAGES 25 AND 26, OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE CENTELINES OFVERNON RNONAME IS ESTABLISHED AVENUE, 60 FEET WIDE, ANDTHE Y OF EAST BRANCH OF ALAMEDA STREET, 30 FEET WIDE, AS ENGINEER OF SAID CITY; THENCE ALONG SAID CENTER LINE OF VERNON AVENUE, NORTH 89 DEGREES 50 MINUTES 30 SECONDS EAST 235.56 FEET; THENCE AT RIGHT ANGLES TO SAID CENTER LINE, SOUTH 0 DEGREES 09 MINUTES 30 SECONDS EAST 30 FEET TO THE TRUE POINT OF BEGINNING IN THE SOUTH LIENE OF SAID AVENUE; THENCE CONTINUING SOUTH 0 DEGREES 09 MINUTES 30 SECONDS EAST 90.70 FEET; THENCE PARALLEL WITH SAID AVENUE, SOUTH 89 DEGREES 50 MINUTES 30 SECONDS WEST 144.83 FEET TO THE EAST LINE OF LAND DESCRIBED IN DEED TO SOUTHERN PACIFIC COMPANY, RECORDED IN BOOK 447, PAGE 184 OF DEEDS IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; THENCE ALONG SAID EAST LINE, NORTH 2 DEGREES 45 MINUTES 44 SECONDS EAST 90.82 FEET TO SAID SOUTH LINE OF VERNON AVENUE; THENCE ALONG SAID AVENUE, NORTH 89 DEGREES 50 MINUTES 30 SECONDS EAST 140.20 FEET TO THE TRUE POINT OF BEGINNING PARCEL 2; THOSE PORTIONS OF NEW VERNON, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 21, PAGES 25 AND 26, OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF THE LAND DESCRIBED IN THE DEED TO DORTHY STRAWN, RECORDED FEBRUARY 28, 1942, AS INSTRUMENT NO. 671 OF OFFICIAL RECORDS OF SAID COUNTY; THENCE ALONG THE PROLONGATION OF THE NORTHERLY LINE OF SAID LAND, NORTH 89 DEGREES 50 MINUTES 30 SECONDS EAST 153.80 FEET TO THE NORTHWEST CORNER OF THE LAND DESCRIBED IN THE DEED TO THE ALAVERN CO., RECORDED JANUARY 30, 1975 AS INSTRUMENT NO. 382 OF OFFICIAL RECORDS OF SAID COUNTY; THENCE ALONG THE WESTERLY LINE OF THE LAND DESCRIBED IN SAID LAST MENTIONED DEED AND THE PROLONGATION THEREOF, SOUTH 0 DEGREES 41 MINUTES 30 SECONDS WEST 153.45 FEET TO THE MOST NORTHERLY CORNER OF THE LAND FIRST DESCRIBED IN THE DEED TO THE ARGOSY FUND, RECORDED NOVEMBER 28, 1951, AS INSTRUMENT NO.764, OF OFFICIAL RECORDS IN SAID LAST MENTIONED DEED, SOUTH 89 DEGREES 50 MINUTES 30 SECONDS WEST 299.55 FEET TO THE EASTERLY LINE OF THE LAND FIRST DESCRIBED IN THE DEED TO THE SOUTHERN -PACIFIC COMPANY, RECORDED JUNE 9, 1888 AS INSTRUMENT NO. 76 IN BOOK 447 PAGE 184 OF DEEDS, IN SAID RECORDERS OFFICE; THENCE ALONG SAID EST CORNER OF THE EASTERLY LINE, NORTH 2 DEGREES 45 MINUTES 44 SECONDS EAST TO THE SOUTHWTHENCE ALONG THE LAND DESCRIBED IN SAID HEREINABOVE MENTIONED DEED TO DORTHY STRAWN; SOUTHERLY AND EASTERLY LINES OF SAID HEREINABOVE MENTIONED DEED TO DORTHY STRAWN AS FOLLOWS: NORTH 89 DEGREES 50 MINUTES 30 SECONDS EAST 144.83 FEET, AND NORTH 0 DEGREES 09 MINUTES 30 SECONDS WEST TO THE POINT OF BEGINNING.