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HomeMy WebLinkAbout815 N. HARBOR, L.P. (CORNERSTONE CCRC MORTAGEG FUND I., LLC / HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS) 3-2017INSURANCE NOT REQUIRED WORK MAY PROCEED CLERK OF COUNC f1ATF AUG 2 8 2011 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Cornerstone CCRC Mortgage Fund I, LLC c/o California Community Reinvestment Corporation 100 West Broadway, Suite 1000 Glendale, CA 91210 Attention: Maria A. Majczinger llp 'i Loan No. 107720131 (Andalucia Apartments) 0`, COA<7 C 010'r foCOPY Use MEMORANDUM OF FIRST MODIFICATION AGREEMENT A-2015-029-01 THIS MEMORANDUM OF FIRST MODIFICATION AGREEMENT (this "Memorandum") is made and entered into as of August 22, 2017, by and among BANK OF AMERICA, N.A., a national banking association organized and existing under the laws of the United States of America ("Bank" or "Bondowner Representive"), CORNERSTONE CCRC MORTGAGE FUND I, LLC, a California limited liability company ("Cornerstone'), and 815 N. HARBOR, L.P., a California limited partnership ("Borrower"). RECITALS A. Reference is made to that certain Bond Issuance and Pledge Agreement executed by the California Municipal Finance Authority, a joint exercise of powers agency, duly organized and existing under the laws of the State of California (together with its successors and assigns, "Issuer"), and Bondowner Representative and dated as of August 1, 2015 (the "Pledge Agreement"), securing up to $15,185,948 California Municipal Finance Authority Multifamily Housing Revenue Bonds (Andalucia Apartments) 2015 Series A-1 and A-2 (the "Bonds"). Pursuant to that certain Loan Agreement executed by Borrower, Issuer and Bondowner Representative, dated as of August 1, 2015 (the "Loan Agreement"), Issuer has agreed to lend to Borrower certain proceeds of the sale of the Bonds (the "Loan") in the principal amount of Fifteen Million One Hundred Eighty -Five Thousand Nine Hundred Forty -Eight and No/100 Dollars ($15,185,948) (the "Construction Loan Amount"), which upon the satisfaction of certain conversion conditions set forth in that certain Bond Purchase Agreement, dated as of August 1, 2015 (the "Bond Purchase Agreement") executed by and among Bank, California Community Reinvestment Corporation, a California nonprofit public benefit corporation ("CCRC") and Borrower, will convert to a term loan not to exceed the principal amount of Eleven Million Four Hundred Eighty -Three Thousand Four Hundred and No/100 Dollars ($11,483,400) (the "Cornerstone Purchase Price"), Subsequently CCRC assigned to Cornerstone its interest in the Bond Purchase Agreement by that certain Loan Commitment Assumption Agreement dated as of August 1, 2015, by and between CCRC and Cornerstone. On the Conversion Date (as defined in that certain Supplemental Agreement, dated August 1, 2015 (the "Supplemental Agreement"), by and between Borrower and CCRC), Cornerstone shall purchase the Bonds and Bank shall assign to Cornerstone its interests under certain of the Loan Documents (as defined below). Upon Cornerstone's purchase of the Bonds, Cornerstone shall become the Majority Owner with respect to the Bonds. B. The obligation of Borrower to repay the Loan is evidenced by (i) that certain Promissory Note Secured by Deed of Trust (Construction Loan Converting to Term Loan) (Series A-1) dated as of August 1, 2015, made by Borrower to the order of Issuer in the original principal amount of $14,494,948 (the "Series A-1 Note") and all modifications, extensions, renewals and replacements thereof and (ii) that certain Promissory Note Secured by Deed of Trust (Construction Loan Converting to Term Loan) (Series A-2) dated as of August 1, 2015, made by Borrower to the order of Issuer in the original principal amount of $691,000 (the "Series A-2 Note"; and together with the Series A-1 Note, the "Note") and all modifications, extensions, renewals and replacements thereof. The obligations of Borrower under the Loan Agreement and the Note are secured by a Construction and Permanent Deed of Trust with Assignment of Rents, Security Agreement, and Fixture Filing (Affordable Housing - California), dated August 1, 2015 (the "Deed of Trust"), executed by Borrower as trustor in favor of Issuer, and recorded on August 14, 2015 as Instrument No. 2015000425625 in the official records of the Recorder's Office of County of Orange, California (the "Official Records") covering certain real and personal property, as therein described (all collectively, the "Property"). Issuer has assigned its rights and interests under the Loan Agreement, Note and Deed of Trust to Bondowner Representative for the benefit of Bank as Majority Owner pursuant to the terms of that certain Assignment of Deed of Trust and Related Documents, dated as of August 1, 2015 and recorded on August 14, 2015 as Instrument No. 2015000425626 in the Official Records. The obligations of Borrower under the Loan Agreement and the Note are also secured by other collateral, as more fully explained in the Loan Agreement. This Agreement, the Loan Agreement, the Note and the Deed of Trust and the Supplemental Agreement, together with all of their exhibits, and all other documents which evidence, guaranty, secure, or otherwise pertain to the Loan collectively constitute the "Loan Documents." C. Borrower has constructed upon the Land certain improvements (the "Improvements") that qualify as a "qualified low income housing project" under Section 42(g) of the Internal Revenue Code (the "Code") and consists of a multifamily rental housing project and other related appurtenances with 70 units (the "Project"). The Land and the Improvements are hereinafter collectively referred to as the "Property." D. Borrower has requested an increase in the Cornerstone Purchase Price from Cornerstone and Cornerstone has agreed to such increase subject to modification of the Loan Documents in accordance with the terms of this Memorandum. E. Bank, Cornerstone and Borrower wish to enter into this Memorandum in order to memorialize the amendment of the Loan Documents pursuant to the terms of the First Modification Agreement. NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Bank, Cornerstone and Borrower agree as follows: 1. Incorporation of Recitals. The foregoing Recitals are hereby incorporated into this Agreement by this reference. 2. Amendment of Loan Documents. Cornerstone, Bank and Borrower have agreed to amend and modify certain of the terms of the Loan Documents in accordance with and pursuant to the terms of the First Modification Agreement, including, without limitation, increase of the Cornerstone Purchase Price to $11,991,300.00, and modification of the Note Rate. 3. Recordation. This Memorandum is prepared for the purposes of recordation only and it in no way modifies the provisions of the First Modification Agreement. 4. Amendment. Acknowledgment and Confirmation of Subordination. Borrower acknowledges and agrees that the effectiveness of the First Modification Agreement is conditioned upon and subject to the execution and delivery of the Amendment, Acknowledgment and Confirmation of Subordination attached hereto as Schedule 1 by all the parties thereto. 5. Further Assurances, Upon Cornerstone's or Bank's request and at Borrower's sole cost and expense, Borrower shall execute, acknowledge and deliver any other amendments, modifications or instruments and perform any other acts necessary, desirable or proper, as reasonably determined by Cornerstone or Bank, to carry out the purposes of this Memorandum or the First Modification Agreement. 6. Ratification. Except as expressly modified by the First Modification Agreement, the Loan Documents remain unmodified and in full force and effect and the parties ratify and confirm the terms thereof as modified by the First Modification Agreement. 7. Counterparts, This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. IN WITNESS WHEREOF, this Memorandum of First Modification Agreement is hereby made as of the date first written above. "Bank" BANK OF AMERICA, N.A., a national banking association By: Name: Title: Signature Page to Memorandum of First Modification Agreement S-1 "Cornerstone" CORNERSTONE CCRC MORTGAGE FUND I, LLC, a California limited liability company By: California Community Reinvestment Corporation, a California nonprofit public benefit corporation, it's manager By: Mary Kaiser President Signature Page to Memorandum of First Modification Agreement S-2 "Borrower" 815 N HARBOR, LP, a California limited partnership By: OHDC 815 N Harbor, LLC, a California limited liability company its Managing General Partner By: Orange Housing Development Corporation, a California nonprofit public benefit corporation, its sole member By: Eunice Bobert Chief Executive Officer By: C&C 815 N Harbor, LLC, a California limited liability company its Developer General Partner as Barry A. Cottle Trustee of the Cottle Family Trust Dated 3/8/87 its member By: Todd R. Cottle its member Signature Page to Memorandum of First Modification Agreement S-3 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 ) On 2017 before me, Notary Public, personally appeared , 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 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. 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 Notary (Seal) SCHEDULEI AMENDMENT, ACKNOWLEDGMENT AND CONFIRMATION OF SUBORDINATION NOTICE: THIS AMENDMENT, ACKNOWLEDGMENT AND CONFIRMATION OF SUBORDINATION RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY REMAINING SUBJECT TO AND OF A LOWER PRIORITY THAN THE LIEN OF THE DEED OF TRUST AS MODIFIED BY THE FIRST MODIFICATION AGREEMENT REFERENCED IN THE FOREGOING MEMORANDUM OF FIRST MODIFICATION AGREEMENT. THIS ACKNOWLEDGMENT AND CONFIRMATION OF SUBORDINATION (this "Acknowledgment") is entered as of August 22, 2017 by and among the BANK OF AMERICA, N.A., a national banking association ("Bank" or "DOJ Lender"), the CITY OF SANTA ANA, a public body corporate and politic ("City"), CORNERSTONE CCRC MORTGAGE FUND I, LLC, a California limited liability company ("Cornerstone"), and 815 N. HARBOR, L.P., a California limited partnership ("Borrower"). RECITALS A. The Bank, DOJ Lender and Borrower entered into that certain Subordination Agreement dated as of August 1, 2015 (the "DOJ Subordination Agreement") and recorded in the Official Records of the County of Orange (the "Official Records") on August 14, 2015 as Instrument No. 2015000425635, pursuant to which, among other things, the DOJ Lender subordinated its rights and interests in the DOJ Deed of Trust and the Affordable Housing Land Use Restriction Agreement (the "DOJ Recorded Instruments") to the lien of the Deed of Trust and the Bank's other rights and interests under the Loan Documents. B. Concurrently, the Bank, City and Borrower entered into that certain Subordination Agreement dated as of August 1, 2015 (the "City Subordination Agreement") (together with the DOJ Subordination Agreement collectively shall be referred to herein as the "Subordination Agreements") and recorded in the Official Records of the County of Orange (the "Official Records") on August 14, 2015 as Instrument No. 2015000425636, pursuant to which, among other things, the City subordinated its rights and interests in the City HOME Deed of Trust and the City NSP Deed of Trust (the "City Recorded Instruments") to the lien of the Deed of Trust and the Bank's other rights and interests under the Loan Documents, C. Borrower, Bank and Cornerstone have entered into that certain First Modification Agreement referenced in the Memorandum of First Modification Agreement to which this Acknowledgment is attached, in order to amend and modify certain of the terms of the Loan Documents in accordance with and pursuant to the terms of the First Modification Agreement, including, without limitation, increase of the Cornerstone Purchase Price to $11,991,300.00, and modification of the Note Rate (as such terms are referenced in the First Modification Agreement). Any capitalized term not otherwise defined herein shall have the definition given such term in the Memorandum of First Modification Agreement. D. In connection therewith, Bank and Cornerstone (in its capacity as the successor to Bank under the Loan, Deed of Trust and other Loan Documents as contemplated by the terms of the Bond Purchase Agreement) have requested that the DOJ Lender and City execute this Acknowledgment in order to acknowledge the above -referenced transactions and reaffirm the subordination of the DOJ Recorded Instruments and the City Recorded Instruments respectively, to the lien of the Deed of Trust and the Bank's other rights and interests under the Loan Documents. NOW, THEREFORE, in order to induce Bank and Cornerstone to enter into the First Modification Agreement, and in consideration thereof and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agrees as follows: 1. Incorporation of Recitals. The above Recitals are, by this reference, incorporated into and deemed a part of this Acknowledgment. Schedule 1 to Memorandum of First Modification Agreement 2. Acknowledgment and Reaffirmation. Each of DOJ Lender, City and Borrower hereby (a) acknowledge the receipt of the First Modification Agreement, (b) consents to the transactions described therein, and (c) confirms that the Deed of Trust, as amended by the terms of the First Modification Agreement, unconditionally remains a lien or charge on the Property prior and superior to the liens or charges of the DOJ Recorded Instruments and City Recorded Instruments, respectively. Each of DOJ Lender, City and Borrower further reaffirm that the terms of the Subordination Agreements, as amended by this Acknowledgment, are in full force and effect with respect to the Deed of Trust and Loan Documents, as amended by the terms of the First Modification Agreement, which such instruments shall be assigned to Cornerstone concurrently herewith pursuant to the terms of the Bond Purchase Agreement. 3. Miscellaneous (a) Assignment/Successors. This Acknowledgment shall be binding upon, and shall inure to the benefit of the respective legal successors and assigns of the parties hereto. (b) Further Assurances. Each party hereto agrees, at Borrower's expense, to execute and deliver all additional instruments and/or documents reasonably required by Bank or Cornerstone in order to further reaffirm the terms of the Subordination Agreements with respectto the Deed of Trust, Loan Documents and all documents related thereto, or otherwise confirm the subordination of the DOJ Recorded Instruments and City Recorded Instruments, respectively, to the lien of the Deed of Trust. (c) Counterparts. This Acknowledgment may be executed in any number of counterparts, each of which shall be considered an original for all purposes; provided, however, that all such counterparts shall together constitute one and the same instrument. (Remainder of Page Left Intentionally Blank.] Schedule 1 to Memorandum of First Modification Agreement NOTICE: THE LOAN DOCUMENTS (AS DEFINED IN THE FOREGOING MEMORANDUM OF FIRST MODIFICATION AGREEMENT) MAY CONTAIN A PROVISION WHICH MAY ALLOW THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO EXPEND A PORTION OF THE AGGREGATE LOAN FOR OTHER PURPOSES THAN IMPROVEMENT OF THE PROPERTY, SUBJECT TO THE TERMS OF THE CITY LOAN AGREEMENT. "Bank and DOJ Lander" BANK OF AMERICA, N.A., a national banking association By: Name: Title: Signature Page to Schedule 1 to Memorandum of First Modification Agreement S-1 "City" ATTEST: -°1 N CYt�% i) A/i Maria D. Huizar Clerk of the Council APPROVED AS TO FORM Sonia R. C rval o City Attef4f Assi FOR APPROVAL: Robert M. Zur Sch ie Interim Executive DireP t Community Development Agency CITY OF SANTA ANA Cynthia J. Kurtz Interim City Manager Signature Page to Schedule 1 to Memorandum of First Modification Agreement S-2 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 August 24, 2017 before me, Rosa A. Flores, Notary Public (insert name and title of the officer) personally appeared Robert C. Cortez who proved to me on the basis of satisfactory evidence to be the person(s'jwhose name(sT is /are subscribed to the within instrument and acknowledged to me that he/she/tihey executed the same in his/hen"their authorized capacity(ies), and that by his/ber-/their signature(s) on the instrument the person,(sT, 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.Roe+ sw+A rr- A. FLORES Commission N 2057129 EE z .:~ Notary Public • California z z v+ Orange County a M Comm. Ex lees Feb 7, 2018 + Signature t r (Seal) "Cornerstone" CORNERSTONE CCRC MORTGAGE FUND I, LLC, a California limited liability company By: California Community Reinvestment Corporation, a California nonprofit public benefit corporation, it's manager By: Mary Kaiser President Signature Page to Schedule 1 to Memorandum of First Modification Agreement S-3 "Borrower" 815 IN HARBOR, LP, a California limited partnership By: OHDC 815 N Harbor, LLC, a California limited liability company its Managing General Partner By: Orange Housing Development Corporation, a California nonprofit public benefit corporation, its sole member M Eunice Bobert Chief Executive Officer By: C&C 815 N Harbor, LLC, a California limited liability company its Developer General Partner LN so Barry A. Cottle Trustee of the Cottle Family Trust Dated 3/8/87 its member Todd R. Cottle its member Signature Page to Schedule 1 to Memorandum of First Modification Agreement S-4 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 ) On 2017 before me, Notary Public, personally appeared , 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 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. 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 Notary (Seal)