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HomeMy WebLinkAboutCITIBANK, N.A1N'S[JRAN(;;I": NOT REJIG11�'ED A-2019.059 WORK MAY F'RC}CErD n=rr. A` K23(s2019 OIL tA,, 4^4 WHEN RECORDED MAIL TO: Citibank. N.A. Transaction Management Group/Post Closing 388 Greenwich Street, 8"' Floor New York, New York 10013 Attention: Tanya Jimenez Re: Tiny Tim Apartments Deal ID No. 25353 SUBORDINATION AGREEMENT GOVERNMENTAL .ENTITY (CITY OF SANTA ANA) (Revised 10-1-201.8) Subordination Agreement— Governmental Entity Tiny Tim Apartments City of Santa Ana -Inclusionary Housing 1918932542 Property Name: Tiny Tim Apartments SUBORDINATION AGREEMENT GOVERNMENTAL ENTITY (CITY OF SANTA ANA) (Revised 10-1-2018) THIS SUBORDINATION AGREEMENT ("Agreement') is entered into as of the 1st day of May, 2019, by and between (i) CITIBANK, N.A., a national banking association ("Senior Lender") and (ii) the CITY OF SANTA ANA, a municipal corporation and charter city of the State of California ("Subordinate Lender"). The date of this Assignment as set forth above is for reference purposes only, and this Assignment will not be effective and binding until the Closing Date (as defined in the Senior Loan Agreement). RECITALS A. Tiny Tim LP, a limited partnership organized under the laws of the State of California ("Borrower") is the owner of certain land located in Orange County, California, described in Exhibit A ("Land"). The Land is improved with a multifamily rental housing project ("Improvements"). B. Senior Lender has made or is making a loan to Borrower in the original principal amount of [$15,000,000] ("Senior Loan") upon the terms and conditions of a Construction Loan Agreement dated as of May 1, 2019 between Senior Lender and Borrower ("Senior Loan Agreement') in connection with the Mortgaged Property. The Senior Loan is secured by a Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of the date of the Senior Loan Agreement ("Senior Mortgage") encumbering the Land, the Improvements and related personal and other property described and defined in the Senior Mortgage as the "Mortgaged Property." C. Pursuant to a Loan Agreement dated as of May [], 2019 between Subordinate Lender and Borrower ("Subordinate Loan Agreement'), Subordinate Lender has made or is making an Inclusionary Housing Loan to Borrower in the original principal amount of $1,300,000 ("Subordinate Loan"). The Subordinate Loan is or will be secured by an Agency Deed of Trust and Assignment of Rents dated as of May [_], 2019 ("Subordinate Mortgage") encumbering all or a portion of the Mortgaged Property. The Subordinate Loan also includes an Affordability Restrictions on Transfer of Property agreement by and between the Subordinate Lender and the Borrower, dated as of May [_], 2019 ("Regulatory Agreement') that shall remain in first position on title to the Land and shall not be subordinated. Subordination Agreement — Governmental Entity 1 Tiny Tim Apartments City of Santa Ana -Inclusionary Housing D. The Senior Mortgage will be recorded in the Official Records of Orange County, California ("Recording Office"). The Subordinate Mortgage will be recorded in the Recording Office following the recording of the Senior Mortgage. E. The execution and delivery of this Agreement is a condition of Senior Lender's consenting to Subordinate Lender's making of the Subordinate Loan and Borrower's granting of the Subordinate Mortgage. AGREEMENT NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which is acknowledged, the parties agree as follows: 1. Definitions. The following terms, when used in this Agreement (including, as appropriate, when used in the above recitals), will have the following meanings: The terms "Condemnation," "Imposition Deposits," "Impositions," "Leases," "Rents" and "Restoration," 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 Loan Agreement. "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 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. "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 Mortgaged Property after the date of this Agreement; provided that the term "Borrower" will not include Senior Lender if Senior Lender acquires title to the Mortgaged Property. "Casualty" means the occurrence of damage to or loss of all or any portion of the Mortgaged Property by fire or other casualty. "Enforcement Action" means any of the following actions taken by or at the direction of Subordinate Lender: 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 assigmnent 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 or the Regulatory Agreement, the exercising of any banker's lien or Subordination Agreement — Governmental Entity 2 Tiny Tim Apartments City of Santa Ana -Inclusionary Housing rights of set-off or recoupment, or the exercise of any other remedial action against Borrower, any other party liable for any of the Subordinate Indebtedness or obligated under any of the Subordinate Loan Documents or the Regulatory Agreement, or the Mortgaged Property. "Enforcement Action Notice" means a Notice given from Subordinate Lender to Senior Lender following one or more Subordinate Mortgage Defauh(s) and the expiration of any applicable notice or cure periods, setting forth in reasonable detail the Subordinate Mortgage Default(s) and the Enforcement Actions proposed to be taken by Subordinate Lender. "Lien" means any lien, encumbrance, estate or other interest, recorded against or secured by the Mortgaged Property. "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 of any Condemnation or Casualty. "Notice" means all notices, requests, demands, consents, approvals or other communication pursuant to this Agreement provided in accordance with the provisions of Section 10. "Regulatory Agreement" shall have the meaning ascribed in the Recitals hereof, recorded or to be recorded in the Recording Office, which shall remain in first position on title to the Land and shall not be part of the Subordinated Loan Documients. "Senior Indebtedness" means the "Indebtedness" as defined in the Senior Loan Agreement. "Senior Lender" 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 will automatically become Senior Lender. "Senior Loan Documents" means the "Loan Documents" as defined in the Senior Loan Agreement, as such documents may be amended. "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 Loan Agreement. "Senior Note" means the promissory note or other evidence of the Senior Indebtedness and any replacement of the Senior Note. "Subordinate Indebtedness" means all sums evidenced or secured or guaranteed by, or otherwise due and payable to Subordinate Lender pursuant to, the Subordinate Loan Documents. Subordination Agreement — Governmental Entity 3 Tiny Tim Apartments City of Santa Ana -Inclusionary Housing "Subordinate Lender" 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. "Subordinate Loan Documents" means the Subordinate Mortgage, the Subordinate Note, the Subordinate Loan Agreement and all other documents at any time evidencing, securing, guaranteeing, or otherwise delivered in connection with the Subordinate Indebtedness, as such documents may be amended and specifically excluding the Regulatory Agreement, provided, that any exercise of remedies under the Subordinate Loan Documents, by reason of a default trader the Regulatory Agreement, shall be and remain subordinated, pursuant to the terms of this Subordination. "Subordinate Mortgage Default" means any act, failure to act, event, condition, or occurrence which allows (but for any contrary provision of this Agreement), Subordinate Lender to take an Enforcement Action. "Subordinate Note" means the promissory note or other evidence of the Subordinate Indebtedness and any replacement of the Subordinate Note. "Surplus Cash" means, with respect to any period, any revenues of Borrower remaining after paying, or setting aside funds for paying, all the following: (a) All sums due or currently required to be paid under the Senior Loan Documents, including any reserves and Imposition Deposits. (b) All reasonable operating expenses of the Mortgaged Property, including real estate taxes, insurance premiums, utilities, building maintenance, painting and repairs, management fees, payroll, administrative expenses, legal expenses and audit expenses (excluding any developer fees payable with respect to the Mortgaged Property). Subordinate Lender's Representations and Warranties. (a) Subordinate Lender represents and warrants that each of the following is true as of the date of this Agreement: (i) Subordinate Lender is now the owner and holder of the Subordinate Loan Documents and the Regulatory Agreement. (ii) No Subordinate Mortgage Default has occurred and is continuing. (iii) The current unpaid principal balance of the Subordinate Indebtedness is (iv) No scheduled payments under the Subordinate Note have been prepaid. Subordination Agreement — Governmental Entity 4 Tiny Tim Apartments City of Santa Ana -Inclusionary Housing (b) Without the prior written consent of Senior Lender, Subordinate Lender will not do any of the following: (i) Pledge, assign, transfer, convey, or sell any interest in the Subordinate Indebtedness or any of the Subordinate Loan Documents or the Regulatory Agreement. (ii) Take any action which has the effect of increasing the Subordinate Indebtedness, except to cure a Senior Mortgage Default as contemplated under Section 5(a) of this Agreement. (iii) Accept any prepayment of the Subordinate Indebtedness. 3. Terms of Subordination. (a) Agreement to Subordinate. 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. 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, specifically excluding the Regulatory Agreement executed by and between the Subordinate Lender and Borrower in connection with the Subordinating Party's Loan, which shall always remain in first position on title to the Land. (b) Subordination of Subrogation Rights. If Subordinate Lender, by indemnification, subrogation or otherwise, acquires any Lien on any of the Mortgaged Property, then that Lien will be fully subject and subordinate to the receipt by Senior Lender 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. (c) Payments Before Senior Loan Default; Soft Subordinate Debt. Until the occurrence of a Senior Mortgage Default, Subordinate Lender will be entitled to retain for its own account all payments of the principal of and interest on the Subordinate Indebtedness pursuant to the Subordinate Loan Documents; provided that Subordinate Lender expressly agrees that it will not accept any such payment that is made more than 10 days in advance of its due date and provided further that Subordinate Lender will not accept any payment in an amount that exceeds 75% of then available Surplus Cash]. (d) Payments After Senior Loan Default or BanknMtcy. (i) Immediately upon Subordinate Lender's receipt of Notice or actual knowledge of a Senior Mortgage Default, Subordinate Lender will not Subordination Agreement— Governmental Entity 5 Tiny Tim Apartments City of Santa Ana -Inclusionary Housing accept any payments of the Subordinate Indebtedness, and the provisions of Section 3(d) of this Agreement will apply. (ii) If Subordinate Lender receives any of the following, whether voluntarily or by action of law, after a Senior Mortgage Default of which Subordinate Lender has actual knowledge (or is deemed to have actual knowledge as provided in Section 4(c)) or has been given Notice, such will be received and held in trust for Senior Lender: (A) Any payment, property, or asset of any kind or in any form in connection with the Subordinate Indebtedness. (B) Any proceeds from any Enforcement Action. (C) Any payment, property, or asset in or in connection with any Bankruptcy Proceeding. (iii) Subordinate Lender will promptly remit, in kind and properly endorsed as necessary, all such payments, properties, and assets described in Section 3(d)(ii) to Senior Lender. Senior Lender will apply any payment, asset, or property so received from Subordinate Lender to the Senior Indebtedness in such order, amount (with respect to any asset or property other than immediately available funds), and manner as Senior Lender determines in its sole and absolute discretion. (e) Bankruptcy. Without the prior written consent of Senior Lender, Subordinate Lender will not commence, or join with any other creditor in commencing, any Bankruptcy Proceeding. In the event of a Bankruptcy Proceeding, Subordinate Lender will not vote affirmatively in favor of any plan of reorganization or liquidation unless Senior Lender has also voted affirmatively in favor of such plan. 4. Default Under Subordinate Loan Documents. (a) Notice of Subordinate Loan Default and Cure Rights. (i) Subordinate Lender will deliver to Senior Lender a copy of each Notice delivered by Subordinate Lender pursuant to the Subordinate Loan Documents and/or the Regulatory Agreement within 5 Business Days of sending such Notice to Borrower. Neither giving nor failing to give a Notice to Senior Lender pursuant to this Section 4(a) will affect the validity of any Notice given by Subordinate Lender to Borrower. (ii) For a period of 90 days following delivery to Senior Lender of an Enforcement Action Notice, Senior Lender will have the right, but not the obligation, to cure any Subordinate Mortgage Default. However, if such Subordination Agreement — Governmental Entity 6 Tiny Tim Apartments City of Santa Ana -Inclusionary IIousing Subordinate Mortgage Default is a non -monetary default and is not capable of being cured within such 90 -day period and Senior Lender has commenced and is diligently pursuing such cure to completion, Senior Lender will have such additional period of time as may be required to cure such Subordinate Mortgage Default or until such time, if ever, as Senior Lender takes either of the following actions: (A) Discontinues its pursuit of any cure. (B) Delivers to Subordinate Lender Senior Lender's written consent to the Enforcement Action described in the Enforcement Action Notice. (iii) Senior Lender will not be subrogated to the rights of Subordinate Lender under the Subordinate Loan Documents as a result of Senior Lender having cured any Subordinate Mortgage Default. (iv) Subordinate Lender acknowledges that all amounts advanced or expended by Senior Lender 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 and will be secured by the lien of the Senior Mortgage. (b) Subordinate Lender's Exercise of Remedies After Notice to Senior Lender. (i) In the event of a Subordinate Mortgage Default, Subordinate Lender will not commence any Enforcement Action until 90 days after Subordinate Lender has delivered to Senior Lender an Enforcement Action Notice. During such 90 -day period or such longer period as provided in Section 4(a), Subordinate Lender will be entitled to seek specific performance to enforce covenants and agreements of Borrower relating to income, rent, or affordability restrictions contained in the Regulatory Agreement, subject to Senior Lender's right to cure a Subordinate Mortgage Default set forth in Section 4(a). (ii) Subordinate Lender may not commence any other Enforcement Action, including any foreclosure action tinder the Subordinate Loan Documents, until the earlier of: (A) The expiration of such 90 -day period or such longer period as provided in Section 4(a). (B) The delivery by Senior Lender to Subordinate Lender of Senior Lender's written consent to such Enforcement Action by Subordinate Lender. Subordination Agreement—Governmental Entity 7 Tiny Tim Apartments City of Santa Ana -Inclusionary Housing (iii) Subordinate Lender acknowledges that Senior Lender may grant or refuse consent to Subordinate Lender's Enforcement Action in Senior Lender's sole and absolute discretion. At the expiration of such 90 -day period or such longer period as provided in Section 4(a) and, subject to Senior Lender's right to cure set forth in Section 4(a), Subordinate Lender may commence any Enforcement Action. (iv) Senior Lender 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 Subordinate Lender. No action or failure to act on the part of Senior Lender in the event of a Subordinate Mortgage Default or commencement of an Enforcement Action will constitute a waiver on the part of Senior Lender of any provision of the Senior Loan Documents or this Agreement. (c) Cross Default. Subordinate Lender acknowledges that a Subordinate Mortgage Default constitutes a Senior Mortgage Default. Accordingly, upon the occurrence of a Subordinate Mortgage Default, Subordinate Lender will be deemed to have actual knowledge of a Senior Mortgage Default. If Subordinate Lender notifies Senior Lender in writing that any Subordinate Loan Default of which Senior Lender has received Notice has been cured or waived, as determined by Subordinate Lender in its sole discretion, then provided that Senior Lender has not conducted a sale of the Mortgaged Property pursuant to its rights under the Senior Loan Documents, any Senior Loan Default under the Senior Loan Documents arising solely from such Subordinate Loan Default will be deemed cured, and the Senior Loan will be reinstated. 5. Default Under Senior Loan Documents. (a) Notice of Senior Loan Default and Cure Rights. (i) Senior Lender will deliver to Subordinate Lender a copy of any Notice sent by Senior Lender to Borrower of a Senior Mortgage Default within 5 Business Days of sending such Notice to Borrower. Failure of Senior Lender to send Notice to Subordinate Lender will not prevent the exercise of Senior Lender's rights and remedies under the Senior Loan Documents. (ii) Subordinate Lender will have the right, but not the obligation, to cure any monetary Senior Mortgage Default within 30 days following the date of such Notice. During such 30 -day period Senior Lender will be entitled to continue to pursue its remedies under the Senior Loan Documents. (iii) Subordinate Lender may, within 90 days after the date of the Notice, cure a non -monetary Senior Mortgage Default if during such 90 -day period, Subordinate Lender keeps current all payments required under the Senior Loan Documents. If such a non -monetary Senior Mortgage Default creates Subordination Agreement— Governmental Entity 8 Tiny Tim Apartments City of Santa Ana -Inclusionary IIousing an unacceptable level of risk relative to the Mortgaged Property, or Senior Lender's secured position relative to the Mortgaged Property, as determined by Senior Lender in its sole discretion, then during such 90 -day period Senior Lender may exercise all available rights and remedies to protect and preserve the Mortgaged Property and the Rents, revenues and other proceeds from the Mortgaged Property. (iv) All amounts paid by Subordinate Lender to Senior Lender to cure a Senior Mortgage Default will be deemed to have been advanced by Subordinate Lender pursuant to, and will be secured by the lien of, the Subordinate Mortgage. Notwithstanding anything in this Section 5(a) to the contrary, Subordinate Lender's right to cure any Senior Mortgage Default will terminate immediately upon the occurrence of any Bankruptcy Proceeding. (b) Release of Mortgaged Property. (i) Subordinate Lender consents to and authorizes any future release by Senior Lender of all or any portion of the Mortgaged Property from the lien, operation, and effect of the Senior Loan Documents. Subordinate Lender waives to the fullest extent permitted by law, all equitable or other rights it may have in connection with the release of all or any portion of the Mortgaged Property, including any right to require Senior Lender to do any of the following: (A) To conduct a separate sale of any portion of the Mortgaged Property. (B) 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. (C) To proceed against Borrower, any other party that may be liable for any of the Senior Indebtedness (including any general partner of Borrower if 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 Senior Lender determines. Subordinate Lender waives to the fullest extent permitted by law any and all benefits under California Civil Code Sections 2845, 2849 and 2850. (ii) Subordinate Lender consents to and authorizes, at the option of Senior Lender, the sale, either separately or together, of all or any portion of the Mortgaged Property. Subordinate Lender acknowledges that without Notice to Subordinate Lender and without affecting any of the provisions of this Agreement, Senior Lender may do any of the following: Subordination Agreement—Governmental Entity 9 Tiny Tim Apartments City of Santa Ana -Inclusionary Housing (A) Extend the time for or waive any payment or performance under the Senior Loan Documents. (B) Modify or amend in any respect any provision of the Senior Loan Documents or the Regulatory Agreement. (C) Modify, exchange, surrender, release, and otherwise deal with any additional collateral for the Senior Indebtedness. Notwithstanding the foregoing, Senior Lender agrees that it will provide Subordinate Lender with all Notices of foreclosure or foreclosure sale that are required under applicable State or local law. 6. Conflicts. If there is any conflict or inconsistency between the terns of the Subordinate Loan Documents and the terms of this Agreement, then the terms of this Agreement will control. Borrower acknowledges that the terms and provisions of this Agreement will not, and will not be deemed to do any of the following: (a) Extend Borrower's time to cure any Senior Loan Default or Subordinate Loan Default. (b) Give Borrower the right to receive notice of any Senior Loan Default or Subordinate Loan Default, other than that, if any, provided, respectively under the Senior Loan Documents of the Subordinate Loan Documents. (c) Create any other right or benefit for Borrower as against Senior Lender or Subordinate Lender. 7. Rights and Obligations of Subordinate Lender Under the Subordinate Loan Documents and of Senior Lender under the Senior Loan Documents. (a) Insurance. (i) Intentionally Omitted. (ii) All original policies of insurance required pursuant to the Senior Loan Documents will be held by Senior Lender. (iii) Nothing in this Section 7(a) will preclude Subordinate Lender from requiring that it be named as a mortgagee and loss payee, as its interest may appear, under all policies of property damage insurance maintained by Borrower with respect to the Mortgaged Property, provided such action does not affect the priority of payment of Loss Proceeds, or that Subordinate Lender be named as an additional insured under all policies of Subordination Agreement — Governmental Entity 10 Tiny Tim Apartments City of Santa Ana-Ltclusionary Housing liability insurance maintained by Borrower with respect to the Mortgaged Property. (b) Condemnation or Casualty. In the event of a Condemnation or a Casualty, the following provisions will apply: (i) The rights of Subordinate Lender (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 Senior Lender's rights under the Senior Loan Documents, and Subordinate Lender will be bound by any settlement or adjustment of a claim resulting from a Condemnation or a Casualty made by Senior Lender. (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 maturer determined by Senior Lender in its sole discretion; provided however, Senior Lender agrees to consult with Subordinate Lender in determining the application of Casualty proceeds. In the event of any disagreement between Senior Lender and Subordinate Lender over the application of Casualty proceeds, the decision of Senior Lender, in its sole discretion, will prevail. (iii) If Senior Lender holds Loss Proceeds, or monitors the disbursement of Loss Proceeds, Subordinate Lender will not do so. Nothing contained in this Agreement will be deemed to require Senior Lender to act for or on behalf of Subordinate Lender in connection with any Restoration or to hold or monitor any Loss Proceeds in trust for or otherwise on behalf of Subordinate Lender, and all or any Loss Proceeds may be commingled with any funds of Senior Lender. (iv) If Senior Lender 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 Senior Lender will be paid to Subordinate Lender unless another party has asserted a claim to the remaining Loss Proceeds. (c) Modification of Subordinate Loan Documents. Subordinate Lender agrees that, until the principal of, interest on and all other amounts payable under the Senior Loan Documents have been paid in full, it will not, without the prior written consent of Senior Lender, increase the amount of the Subordinate Loan, increase the required payments due under the Subordinate Loan, decrease the term of the Subordinate Loan, increase the interest rate on the Subordinate Loan, or otherwise Subordination Agreement — Governmental Entity 11 Tiny Tim Apartments City of Santa Ana -Inclusionary Housing amend the Subordinate Loan terms in a manner that creates an adverse effect upon Senior Lender under the Senior Loan Documents. If Subordinate Lender either (i) amends the Subordinate Loan Documents in the manner set forth above or (ii) assigns the Subordinate Loan without Senior Lender's consent then such amendment or assignment will be void ab initio and of no effect whatsoever. (d) Modification of Senior Loan Documents. Senior Lender 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 Subordinate Lender, and without affecting any of the provisions of this Agreement. Notwithstanding the foregoing, Senior Lender 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 Senior Lender to protect the security or lien priority of Senior Lender under the Senior Loan Documents or to cure defaults under the Subordinate Loan Documents. (e) Commercial or Retail Leases. If requested, Subordinate Lender will enter into attornment and non -disturbance agreements with all tenants under commercial or retail Leases, if any, to whom Senior Lender has granted attornment and non- disturbance, on the same terms and conditions given by Senior Lender. (f) Consent Rights. Whenever the Subordinate Loan Documents give Subordinate Lender approval or consent rights with respect to any matter, and a right of approval or consent for the same or substantially the same matter is also granted to Senior Lender pursuant to the Senior Loan Documents or otherwise, Senior Lender's approval or consent or failure to approve or consent will be binding on Subordinate Lender. None of the other provisions of Section 7 are intended to be in any way in limitation of the provisions of this Section 7(f). (g) Escrows. Except as provided in this Section 7(g), and regardless of any contrary provision in the Subordinate Loan Documents, Subordinate Lender will not collect any escrows for any cost or expense related to the Mortgaged Property or for any portion of the Subordinate Indebtedness. However, if Senior Lender is not collecting escrow payments for one or more Impositions, Subordinate Lender may collect escrow payments for such Impositions; provided that all payments so collected by Subordinate Lender will be held in trust by Subordinate Lender to be applied only to the payment of such Impositions. (h) Certification. Within 10 days after request by Senior Lender, Subordinate Lender will furnish Senior Lender with a statement, duly acknowledged and certified setting forth the then -current amount and teens of the Subordinate Indebtedness, confirming that there exists no default under the Subordinate Loan Documents or the Regulatory Agreement (or describing any default that does exist), and certifying to such other information with respect to the Subordinate Indebtedness as Senior Lender may request. Subordination Agreement — Governmental Entity 12 Tiny Tim Apartments City of Santa Ana -Inclusionary Housing 8. Refinancing. Subordinate Lender agrees that its agreement to subordinate under this Agreement will extend to any new mortgage debt which is for the purpose of refinancing all or any part of the Senior Indebtedness (including reasonable and necessary costs associated with the closing and/or the refinancing). Subordinate Lender firrther agrees to expeditiously review and approve any reasonable increase to the Senior Indebtedness in connection with any such refinanced mortgage debt provided that such increase is to be used for rehabilitation of the Improvements in the context of a preservation transaction. All terms and covenants of this Agreement will inure to the benefit of any holder of any such refinanced debt, and all references to the Senior Loan Documents and Senior Lender will mean, respectively, the refinance loan documents and the holder of such refinanced debt. 9. Governmental Powers. Nothing in this Agreement is intended, nor will it be construed, to in any way limit the exercise by Subordinate Lender of its governmental powers (including police, regulatory and taxing powers) with respect to Borrower or the Mortgaged Property to the same extent as if it were not a party to this Agreement or the transactions contemplated by this Agreement. 10. Notices. (a) Any Notice 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 (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) 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: If to Senior Lender: Citibank, N.A. 388 Greenwich Street, 8th Floor New York, New York 10013 Attention: Transaction Management Group Re: Tiny Tim Apartments Deal ID No. 25353 Facsimile: (212) 723-8209 With a copy to: Citibank, N.A. 325 East Hillcrest Drive, Suite 160 Thousand Oaks, California 91360 Attention: Operations Manager/Asset Manager Subordination Agreement— Governmental Entity 13 Tiny Tim Apartments City of Santa Ana -Inclusionary Ifonsing Re: Tiny Tim Apartments Deal ID No. 25353 Facsimile: (805) 557-0924 With a copy to: Citibank N.A. c/o Berkadia Commercial Servicing Department 323 Norristown Road, Suite 300 Ambler, Pennsylvania 19002 Attention: Client Relations Manager Re: Tiny Tim Apartments Deal ID No. 25353 Facsimile: (215) 328-0305 And a copy of any notices of Citibank, N.A. default sent to: 388 Greenwich Street New York, New York 10013 Attention: General Counsel's Office Re: Tiny Tim Apartments Deal ID No. 25353 Facsimile: (646) 291-5754 If to Subordinate Lender: Community Development Agency of the City of Santa Ana Housing Manager 20 Civic Center Plaza (M-26) P.O. Box 1988 Santa Ana, California 92702 With a copy sent to: Office of the City Attorney City of Santa Ana 20 Civic Center 'Plaza, 7th Floor (M-29) Santa Ana, California 92702 (b) Any party, by Notice given pursuant to this Section 10, 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 refiise or reject delivery of any Notice given in accordance with this Section 10. Subordination Agreement — Governmental Entity 14 Tbry Tim Apartments City of Santa Ana -Inclusionary Housing 11. Miscellaneous Provisions. (a) Assignments/Successors. This Agreement will be binding upon and will inure to the benefit of the respective legal successors and permitted assigns of the parties to this Agreement. No other party will be entitled to any benefits under this Agreement, whether as a third -party beneficiary or otherwise. This Agreement may be assigned at any time by Senior Lender to any subsequent holder of the Senior Note. (b) No Partnership or Joint Venture. Nothing in this Agreement or in any of the Senior Loan Documents or Subordinate Loan Documents will be deemed to constitute Senior Lender as a joint venturer or partner of Subordinate Lender. (c) Further Assurances. Upon Notice from Senior Lender, Subordinate Lender will execute and deliver such additional instruments and documents, and will take such actions, as are required by Senior Lender to further evidence or implement the provisions and intent of this Agreement. (d) Amendment. This Agreement may be amended, changed, modified, altered or terminated only by a written instrument signed by the parties to this Agreement or their successors or assigns. (e) Governing. This Agreement will be governed by the laws of the State in which the Land is located. (f) Severable Provisions. If any one or more of the provisions contained in this Agreement, or any application of any such provisions, is invalid, illegal, or unenforceable in any respect, the validity, legality, enforceability, and application of the remaining provisions contained in this Agreement will not in any way be affected or impaired. (g) Term. The term of this Agreement will commence on the date of this Agreement and will continue until the earliest to occur of the following events: (i) The payment of all 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 Senior Lender as described in Section 2(e) of this Agreement. (ii) The payment of all the Subordinate Indebtedness other than by reason of payments which Subordinate Lender is obligated to remit to Senior Lender pursuant to this Agreement. (iii) The acquisition by Senior Lender or by a third -party purchaser of title to the Mortgaged Property pursuant to a foreclosure of, deed in lieu of Subordination Agreement — Governmental Entity 15 Tiny Tim Apartments City of Santa Ana -Inclusionary Ilousing foreclosure, or trustee's sale or other exercise of a power of sale or similar disposition under the Senior Mortgage. (iv) With the prior written consent of Senior Lender, without limiting the provisions of Section 4(b)(iv), the acquisition by Subordinate Lender 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. (h) Counterparts. 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. (i) Entire Agreement. This Agreement represents the entire understanding and agreement between the parties regarding the matters addressed in this Agreement, and will supersede and cancel any prior agreements regarding such matters. (j) Authority. Each person executing this Agreement on behalf of a party to this Agreement represents and warrants that such person is duly and validly authorized to do so on behalf of such party with full right and authority to execute this Agreement and to bind such party with respect to all of its obligations under this Agreement. (k) No Waiver. No failure or delay on the part of any party to this Agreement in exercising any right, power, or remedy under this Agreement will operate as a waiver of such right, power, or remedy, nor will any single or partial exercise of any such right, power or remedy preclude any other or further exercise of such right, power, or remedy or the exercise of any other right, power or remedy under this Agreement. (1) Remedies. Each party to this Agreement acknowledges that if any party fails to comply with its obligations under this Agreement, 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. [SIGNATURE AND ACKNOWLEDGMENT PAGES FOLLOW] Subordination Agreement — Governmental Entity 16 Tiny Tim Apartments City of Santa Ana -Inclusionary Rousing IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written. SENIOR LENDER: CITIBANK, N.A. Bv: Name: Michael Hemmens Title: Authorized Signatory Deal ID No. 25353 SUBORDINATE LENDER: CITY OF SANTA ANA By: �� AA - Name: :S eJenyy\er A,zq Title: Ac+ h4 C.+v nn,,,,a a e ✓ TO FORM Attorney / P WEN P ��PhY �1 Norma Mitre Acting Clerk oftheCouncil Subordination Agreement — Governmental Entity S -l. Tiny Tim Apartments City of Santa Ana -Inclusionary Housing ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Orange ) On April 23, 2019 before me, Claudia M. Fernandez -Shaw, Notary Public (insert name and title of the officer) personally appeared Steven A. Mendoza who proved to me on the basis of satisfactory evidence to be the person whose name fe- subscribed to the within instrument and acknowledged to me that F�i / theyexecuted he same in ilk eR/thetr authorized capacity(i�s), and that by, /her/tt eir signature(q,'on the instrument the person(, or the entity upon behalf of which the person( 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. r .. CLAUDIAM, FERNANDEZ•SHAW Notary Publlc-California Orange County Commission m 2228084 My Comm. Expires Jan 25. 2022 EXHIBIT A LEGAL DESCRIPTION APN: 007-313-15 007-313-16 THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SANTA ANA, IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: LOT 39 OF TRACT NO. 1341, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 57, PAGES 47 AND 48 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA