HomeMy WebLinkAboutNORTH HARBOR HOUSING PARTNERS, LP (CO JAMBOREE HOUSING CORPORATION) (2)RECORDING REQUESTED BY:
1'AT WI1101011171711130K110CIS
KMO Partners, LLP
3777 Long Beach Blvd.
Suite 280
Long Beach, CA 90807
Attention: John Opgenorth
THIS SPACE FOR RECORDER'S USE ONLY
APR 16 2024 SUBORDINATION AGREEMENT A-2021-054-03
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(c.dhnw)^^� NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY
INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY
THAN THE LIEN OF SOME OTHER OR LATER INSTRUMENT.
THIS SUBORDINATION AGREEMENT ("Agreement') is entered into as of April 1, 2024,
by and among NORTH HARBOR HOUSING PARTNERS LP, a California limited partnership
("Borrower"), THE CITY OF SANTA ANA ("Junior Lender % and JPMORGAN CHASE BANK,
N.A., a national banking association (`Bank"), in its capacity as agent for the Issuer in connection
with the issuance of the Bonds (each as defined below). The parties to this Agreement are referred
to as the "Parties." Bank and Junior Lender are referred to as the "Lenders."
RECITALS
A. Pursuant to the terms of that certain Master Pledge and Assignment by and between
California Municipal Finance Authority (the "Issuer") and Bank dated March 1, 2021 ("Master
Pledge and Assignment'), Bank agreed to purchase those certain Multifamily Housing Revenue
Bonds (North Harbor Village) 2021 Series A in the principal amount of $19,000,000 (the "Tax -
Exempt Bonds") and those certain Multifamily Housing Revenue Taxable Bonds (North Harbor
Village) 2021 Series A-T in the principal amount of $13,700,000 (the "Taxable Bonds", and together
with the Tax -Exempt Bonds, the "Bonds"), the proceeds of which were to be used to fund a loan to
Borrower in the original principal amount of up to $32,700,000 for the acquisition, construction,
development and operation of a multifamily project located in the City of Santa Ana, County of
Orange, California (the `Bank Loan"), as increased pursuant to the Modification Agreement
(Supplemental Issuance) defined below. In connection therewith, Borrower executed a Deed of
Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing recorded in the
Official Records of Orange County, California ("Official Records") on April 1, 2021 as Instrument
No. 2021000224389, as amended by the Modification Agreement (Supplemental Issuance) defined
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below (as amended, the `Bank Deed of Trust") for the benefit of Bank, to secure that certain
Promissory Note (Tax Exempt) dated as of April 1, 2023 in the original principal amount of
$19,000,000, as amended by that certain Modification Agreement (Tax -Exempt) dated as of March
15, 2023 and the Modification Agreement (Supplemental Issuance) (as amended, the "Tax -Exempt
Note") and that certain Promissory Note (Taxable) dated as of April 1, 2023 in the original principal
amount of $13,700,000 as amended by that certain Modification Agreement (Taxable) dated as of
March 15, 2023 and the as amended by the Modification Agreement (Supplemental Issuance) (as
amended, the "Taxable Note", and together with the Tax -Exempt Note, the "Bank Note"), and a
UCC-I Financing Statement in favor of Bank ("Bank UCC") recorded concurrently with the Bank
Deed of Trust. The Bank Deed of Trust encumbers, among other things, the real property more
particularly described in Exhibit A attached to this Agreement (the "Land"). The Land, together
with all improvements now or hereafter located on the Land and all fixtures and personal property
located on the Land and encumbered by any of the Recorded Items (as defined below) are referred
to, collectively, as the "Pro e ."
B. In connection with the issuance of the Bonds, Borrower executed a Regulatory
Agreement and Declaration of Restrictive Covenants (the "Bond Regulatory Agreement') recorded
in the Official Records on April 1, 2021 as Instrument No. 2021000224388, as amended by that
certain First Amendment to Regulatory Agreement and Declaration of Restrictive Covenants
recorded in the Official Records on November 13, 2023 as Instrument No. 2023277028 (as amended,
the "Bond Regulatory Agreement').
C. Issuer agreed to issue and Bank has agreed to purchase those certain Multifamily
Housing Revenue Bonds (North Harbor Village) 2023 Series A in an aggregate principal amount not
to exceed $8,037,572 (the "Supplemental Tax -Exempt Bonds") pursuant to that certain First
Supplement to Master Pledge and Assignment dated as of November 1, 2023 (the "First Sup lep meet
to Master Pledge"), and in connection with the First Supplement to Master Pledge, the Borrower and
the Bank entered into that certain Modification Agreement dated as ofNovember 1, 2023, recorded
in the Official Records on November 13, 2023 as Instrument No. 2023000277029 (the "Modification
Agreement (Supplemental Issuance)"), pursuant to which the Borrower and Bank agreed to increase
the maximum principal amount of the Tax -Exempt Note to $27,037,572, to reduce the maximum
principal amount of the Taxable Note to $8,913,936, and to increase the maximum principal amount
of Bank Loan in the Bank's Loan Documents and secured by the Deed of Trust to $35,951,508.
D. Junior Lender made a loan to the Borrower in the original principal amount of
$1,687,047 (the "Junior Loan") pursuant to that certain Loan Agreement dated as of April 20, 2021
by and between the Junior Lender and Borrower dated as of April 20, 2021 and recorded in the
Official Records as Instrument No. 2021000285576 (the "Junior Loan Agreement"). The Junior
Loan is evidenced by that certain City CDBG Loan Note Secured by Deed of Trust to the City of
Santa Ana, dated as of April 20, 2021(the "Junior Note") and secured by that certain CDBG Deed of
Trust and Assignment of Rents, dated April 20, 2021, and recorded on April 28, 2021 in the Official
Records as Instrument No. 2021000285575 (the "Junior Deed of Trust"). Junior Lender and
Borrower also executed those certain Affordability Restrictions on Transfer of Property dated April
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20, 2021, recorded on April 28, 2021 in the Official Records as Instrument No. 2021000285574
("Affordability Restrictions"). A requirement of the Junior Loan is that the Affordability Restrictions
have senior priority among the Recorded Items, as defined below. The Parties hereto desire to enter
into this Agreement for the purpose of complying with this requirement of the Junior Loan, and the
agreement to comply with this requirement of the Junior Loan constitutes consideration for entering
into this Agreement.
D. The Bond Regulatory Agreement, the Bank Deed of Trust, the Bank UCC, the Junior
Deed of Trust and the Affordability Restrictions are referred to as the "Recorded Items."
E. It is the intent of the Parties that the order of priority of the Recorded Items as liens
on or charges against the Property be as follows:
1. Affordability Restrictions
2. Bond Regulatory Agreement
3. Bank Deed of Trust
4. Bank UCC
5. Junior Deed of Trust
E. It is a condition precedent to the respective obligations of each Party under the
Recorded Items to which it is a party that such Recorded Item unconditionally be and remain at all
times a lien or charge on the Property, having priority with respect to the other Recorded Items in the
order set forth above, and that each Party specifically and unconditionally subordinate the lien or
charge of each of the Recorded Items to which it is a party as necessary in order that the Recorded
Items have the relative priority set forth above.
In consideration of the mutual benefits accruing to the Parties and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
AGREEMENT
Priority and Subordination.
(a) Each Recorded Item, and any and all amendments, replacements, renewals
and extensions thereof, shall unconditionally be and remain at all times a lien or charge on the
Property, having the relative priority with respect to the other Recorded Items as set forth above.
Each Party intentionally and unconditionally waives, relinquishes and subordinates the lien or charge
of the Recorded Items, except the Affordability Restrictions, to which it is a party in favor ofthe lien
or charge upon the Property of the other Recorded Items to the extent necessary so that the Recorded
Items shall have the relative priority set forth above. Notwithstanding anything to the contrary
herein, the Affordability Restrictions are not subordinated by this Agreement.
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(b) Each Party acknowledges that it has been offered a satisfactory opportunity to
review each of the Recorded Items and related documents to the extent that it wishes to review them.
(c) Each Party acknowledges that its payment interests pursuant to the Recorded
Items and any related documents shall have the relative priority with respect to payment interests
pursuant to the other Recorded Items as set forth above. In addition, Junior Lender agrees that
repayment of the indebtedness secured by the Junior Deed of Trust is and shall be postponed and
subordinated to repayment in full of the indebtedness secured by the Bank Deed of Trust; provided,
however, that Junior Lender may accept regularly scheduled payments due under its Junior Loan so
long as no default has occurred and is continuing under the Bank Loan Documents. Junior Lender
agrees that from and after such time as it has received from either Bank or Borrower written notice
that a default then exists under the Bank Loan Documents (as defined hereinbelow) (which has not
been expressly waived in writing by Bank) or otherwise has actual knowledge of such a default,
Junior Lender shall not receive or accept any payments under the Junior Loan. If (i) Junior Lender
receives any payment, property, or asset of any kind or in any form on account of the Junior Loan
after a default under the Bank Loan Documents of which Junior Lender has actual knowledge or has
been given notice of, or (ii) Junior Lender receives, voluntarily or involuntarily, by operation of law
or otherwise, any payment, property, or asset in or in connection with any bankruptcy proceeding,
such payment, property, or asset will be received and held in trust for Bank. Junior Lender will
promptly remit, in kind and properly endorsed as necessary, all such payments, properties, and assets
to Bank. Bank shall apply any payment, asset, or property so received from Bank to the outstanding
indebtedness under the Bank Loan in such order, amount (with respect to any asset or property other
than immediately available funds), and manner as Bank shall determine in its sole and absolute
discretion.
(d) Junior Lender shall not, without either the prior written consent of Bank
(which consent may be granted or withheld in Bank's sole and absolute discretion), pursue any
remedy including, without limitation, the acceleration and/or demand of all or any part of the
obligations secured by the Junior Deed of Trust, any foreclosure proceeding, exercise of power of
sale, exercise of any rights as a secured party under the Uniform Commercial Code, any other public
or private sale, acceptance of a tender of title to all or any portion of the Property in full or partial
satisfaction of the Junior Deed of Trust, obtaining of a receiver, obtaining of a restraining order,
protective order or injunction, seeking of default interest, taking possession or control of all or any
portion of the Property, applying any funds pledged to Junior Lender or to any other obligation,
exercising of any right of setoff against Borrower, initiating or voluntarily participating in any action
or proceeding against Borrower or any of Borrower's assets, to enforce collection or payment of all
or any portion of the obligations to Junior Lender or to enforce rights against all or any portion of the
Property. Notwithstanding the foregoing, such limitation on the remedies of Junior Lender shall not
derogate or otherwise limit Junior Lender's rights, following an event of default under the Junior
Loan to (a) compute interest on all amounts due and payable under the Junior Loan at the default rate
described in the Junior Note, (b) compute prepayment premiums and late charges, (c) enforce against
any person, other than Borrower and any guarantors or indemnitors under the Bank Loan, any
guaranty of the obligations of Borrower under the Junior Loan, and (d) seek specific performance or
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Subordination Agreement (City Loan) North Harbor Village
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to enforce covenants and agreements of Borrower relating to income, rent, or affordability restriction
contained in the Affordability Restrictions.
(e) Junior Lender agrees that Bank shall have all approval, consent and oversight rights
in connection with any insurance claims relating to the Property, any decisions regarding the use of
insurance proceeds after a casualty loss or condemnation awards, the hiring or firing of property
managers, or otherwise related in any way to the Property, and Junior Lender shall have no right to
object to any such action or approval taken by Bank and shall consent thereto and be bound thereby.
Reserved.
3. Recordin¢. Each Party consents to the recording of each of the Recorded Items, in
the lien priority as set forth herein, and the recording of this Agreement.
4. No Obligation. No Lender is under any obligation to any other Lender to, nor has
any Lender represented that it will, see to the application of any proceeds of any loan secured by any
of the Recorded Items except as may otherwise be set forth in a written agreement (other than this
Agreement) executed by the Lender sought to be charged with such an obligation.
5. Notice of Default; Opportunity to Cure. Each Party shall give each of the other
Parties notice of default under each Recorded Item in favor of such Party prior to enforcing remedies
for such default against Borrower or the Property and each of the other Parties shall have the right to
cure such default at any time that Borrower would have a right to cure it.
6. Actions by Bank; Certain Waivers. Bank, without the consent of or notice to any
other Lender, may enter into amendments of the Bank Deed of Trust and the documents and
obligations secured thereby (collectively, the `Bank Loan Documents") in any manner, may release
any or all persons or entities liable for any obligation secured by the Bank Loan Documents, and
may release any or all security for the obligations secured by the Bank Loan Documents, all without
affecting the subordination under this Agreement. Each Party waives any right to require marshaling
of assets or to require Bark to proceed against or exhaust any specific security for the obligations
secured by the Bank Loan Documents, and waives any and all defenses arising out of the loss or
impairment of any right of subrogation to the lien of the Bank Loan Documents. Any Lender may
release any or all persons or entities liable for any obligation secured by the deed of trust in its favor
and the documents secured thereby (collectively, with respect to each respective Lender, that
Lender's "Loan Documents"), without the consent of or notice to any other Lender, all without
affecting the subordination under this Agreement. Each Party waives any right to require marshaling
of assets or to require a Lender to proceed against or exhaust any specific security for the obligations
secured by any of the Loan Documents, and waives any and all defenses arising out of the loss or
impairment of any right of subrogation to the lien of any of the Loan Documents.
Miscellaneous.
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Subordination Agreement (City Loan) North Harbor Village
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(a) Entire Agreement. This Agreement constitutes the entire agreement among
the Parties with respect to the priority of the lien and charge of the Recorded Items against the
Property and all prior understandings and agreements on that subject, if any, are superseded and
replaced by this Agreement.
(b) Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the state where the Land is located.
(c) Successors: Assignment. This Agreement is for the benefit of the Lenders
and their respective successors and assigns, and any provision hereof may be waived or modified by
agreement of Lenders without the consent of Borrower, and without affecting the priority of the liens
and charges of the Recorded Items as provided in this Agreement. The heirs, administrators, assigns
and successors -in -interest of the Parties shall be bound by this Agreement. This Agreement may be
assigned by a Party only as a part of an assignment of such Party's interest in the Property.
(d) Notices. All notices to be given pursuant to this Agreement shall be in
writing and shall be deemed given when hand -delivered, or two business days after deposit in the
U.S. mail, postage prepaid, to the Parties at the addresses set forth below, or to such other place as a
Party may from time to time designate for itself by notice to the other Parties. No successor or
assign of a Party shall be entitled to notices or opportunity to cure defaults hereunder unless notice of
the transfer is given in accordance with this subsection.
(e) Amendment. This Agreement may be amended only by a writing signed by
the Parties, but this clause shall not impair the validity of any further agreements among fewer than
all of the Parties as among themselves.
(f) Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same instrument and whether or
not all Parties execute each counterpart.
(g) Completion of Recording Information. If this Agreement is signed without
completion of certain recording information called for above, any Party or any escrow agent or title
insurance company acting on the instructions of any Party is hereby authorized to insert such
information prior to recording this Agreement.
(Remainder of page intentionally left blank)
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Subordination Agreement (City Loan) North Harbor Village
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NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR INTEREST IN
THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE
LIEN OR CHARGE OF SOME OTHER OR LATER INSTRUMENT.
NORTH HARBOR HOUSING PARTNERS LP,
a California limited partnership
By: JHC-North Harbor LLC,
a California limited liability company,
Managing General Partner
By: Jamboree Housing Corporation,
a California nonprofit public benefit corporation,
its Manager � I11 / \ I
k —
Chief Development Officer
Address:
North Harbor Housing Partners LP
c/o Jamboree Housing Corporation
17701 Cowan Ave., Suite 200
Irvine, CA 92614
Attention: Michael Massie
With a copy to:
Rutan & Tucker, LLP
18575 Jamboree Road, 9th Floor
Irvine, CA 92612
Attention: Patrick McCalla
(Signature Page to Subordination Agreement)
Subordination Agreement (City Loan) North Harbor Village
4865-1649-6244
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR INTEREST IN THE
PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OR
CHARGE OF SOME OTHER OR LATER INSTRUMENT.
JUNIOR LENDER:
CITY OF S TA AV
NA
Nufiez {
Acting City Manager
Dated: Q2Y
APPROVED AS TO FORM;.
SONIA R. CA;t)(ALMO, Yyfy Attorney
Un
Best, Best & Krieger
Special Counsel for/he City
Dated: o�
RECOMMENDEDFORAPPROVAL:
Michael Garcia
Executive Director
Community Development Agency
Address:
City of Santa Ana
Executive Director (CDA)
20 Civic Center Plaza (M-26)
P.O. Box 1988
Santa Ana, California 92702
With a copy to:
City Attorney
City of Santa Ana
20 Civic Center Plaza,
7th Floor (M-29)
Santa Ana, California 92702
(Signature Page to Subordination Agreement)
Subordination Agreement (City Loan) North Harbor Village
4665-1649-6244
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 10, 2024 before me, Claudia M. Fernandez -Shaw, Notary Public
(insert name and title of the officer)
personally appeared Waldo Barela Jr.
who proved to me on the basis of satisfactory evidence to be the person) whose name
subscribed to the within instrument and acknowledged to me that,&-%haAhey executed the same in
,tg rN r�P authorized capacity(ies}, and that by er/tMeir signatureo on the instrument the
person(4, or the entity upon behalf of which the person(s}acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
CLAL'DIAM. FERNANDEZ•SHAW
Notary Public - California
and official S08I. =' - orange Cocnry
Commission 9 2388597
My Comm. Expires Jan 25, 2026
/1
BANK:
JPMORGAN CHASE BANK, N.A.,
a national banking association
Justin Chen
Authorized Officer
with a copy to:
JPMorgan Chase Bank, N.A.
Community Development Banking
300 South Grand Avenue, Suite 300
Los Angeles, CA 90071
Attention: Rosalind Ross
Subordination Agreement (City Loan) North Harbor Village
4865-1649-6244
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 )
ss.
COUNTY OF OrOtl )
On Prpn1'Df70Z I before me OrOna C;ofj-0gne2-
a notary public in and
for said state, personally appeared %tit I Got p el M q SS 1 C, , who proved to
me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacities, and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
CRISTINA COTA-NUNE2
Notary public - California
Orange County 9
\\\\ Comm-'onn"'I"'j1
A2379272
my Comm. Expires Oct 20, 2025 '
Subordination Agreement (City Loan) North Harbor Village
4865-1649-6244
Ms t" -qW.1
LEGAL DESCRIPTION
Real property in the City of Santa Ana, County of Orange, State of California, described as follows:
THE SOUTH 135 FEET OF THE NORTHEAST QUARTER OF THE SOUTHEAST QUARTER OF THE NORTHEAST
QUARTER OF SECTION 9, TOWNSHIP 5 SOUTH, RANGE 10 WEST, SAN BERNARDINO BASE AND MERIDIAN,
IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF.
EXCEPT THE WEST 20 FEET THEREOF.
APN No. 198-011-05
Subordination Agreement (City Loan) North Harbor Village
4865-1649-6244, v. 5
CALIFORNIA ACKNOWLEDGMENT
CIVIL CODE § 1189
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 I
County of orange
On Wo Igi U14 before me, Mb (Ail I. Rk0u, Nd q V41io
Date Here Insert Name and Title of the Officer
personally appeared 1\ Ugmo uonit
Nome(s) of Signer(s)
who proved to me on the basis of satisfactory evidence}A be the person(s) whose name(sUiare subscribed
to the within instrument and acknowledged to me that e( e he/they executed the same in Itg/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.
BIGAIL
O AOrang Count L4
Notary Public • California
¢� Orange County F
Commission @ 2474325
My Comm. Expires Dec 26, 2027
Place Notary Seal and/or Stamp Above
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 ancJ.efficial seal.
Signature
OPTIONAL
Public
Completing this information can deter alteration of the document or
fraudulent reattachment of this form to an unintended document.
Description of Attached Document
Title or Type of Document: NOffih iittrppf wyslrq PUft\PNS
Document
Signer(s) Other Than Named Above:
Capacity(ies) Claimed by Signer(s)
Signer's Name:
❑ Corporate Officer — Title(s):
❑ Partner— ❑ Limited ❑ General
❑ Individual ❑ Attorney in Fact
❑ Trustee ❑ Guardian or Conservator
❑ Other:
Signer is Representing:
of Pages:
Signer's Name:
❑ Corporate Officer — Title(s):
❑ Partner— ❑ Limited ❑ General
❑ Individual ❑ Attorney in Fact
❑ Trustee ❑ Guardian or Conservator
❑ Other:
Signer is Representing:
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(02018 National Notary Association