HomeMy WebLinkAboutD-2185 Broad Street Place - Subordination Agreement - City of SLORECORDING REQUESTED BY:
First American Title Company
WHEN RECORDED MAIL DOCUMENT TO:
David Wright Tremaine LLP
865 S. Figueroa #2400
Los Angeles, CA 90017
Attn: Nancy B. Clapp, Esq.
A. P. N .: 053-231-048
Property Address: 3720 Broad Street, San Luis Obispo, CA 93401
"This document was electronically submitted
to San Luis Obispo County for recording"
2021018398
Tommy Gong
San Luis Obispo - County Clerk -Recorder
03/10/2021 02:12 PM
Recorded at the request of:
FIRST AMERICAN TITLE COMPANY
Titles:1 Pages:18
Fees: $0.00
Taxes: $0.00
Total: $0.00
Above This Line for Recorder's Use Only
SUBORDINATION AGREEMENT (City of San Luis Obispo)
Title of Document
File No.: 4009-6127807 (LB)
The undersigned declares that the document to which this page is affixed and made a part of is exempt from the
fee imposed by the Affordable Housing & Job Act (SB2) (GC 27388.1)
()= ) Recorded [concurrently] in connection with a transfer of real property subject to the imposition of
Documentary Transfer Tax per GC 27388.1 (a) (2).
( ) Recorded [concurrently] in connection with a transfer of real property that is residential dwelling to an owner -
occupier per GC 27388.1 (a) (2).
() Maximum fee of $225 has been reached per GC 27388.1 (a) (1).
() Not related to real property GC 27388.1 (a) (1).
D-2185
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Davis Wright Tremaine LLP
865 S. Figueroa Street
Suite 2400
Los Angeles, California 90017
Attn: Nancy B. Clapp, Esq.
APN: 053-231-048
SUBORDINATION AGREEMENT
(City of San Luis Obispo)
FOR RECORDER'S USE)
THIS SUBORDINATION AGREEMENT (this "Agreement") is entered into as of March 4, 2021, by and
among BANK OF AMERICA, N.A., a national banking association (the "Senior Lender"), the CITY OF
SAN LUIS OBISPO ("Subordinate Lender"), and BROAD STREET PLACE, L.P., a California limited
partnership (the "Borrower").
RECITALS
A. Pursuant to that certain Construction and Permanent Loan Agreement dated as of even
date herewith (the "Senior Loan Agreement"), between Borrower and Senior Lender, Senior Lender is
making a loan (the "Senior Loan") to the Borrower in the original principal amount of $16,490,000 to
provide financing for the acquisition, construction and development of a 40-unit apartment complex
(which includes one manager's unit) to be known as "Broad Street Place" (the "Project") to be located in
the County of San Luis Obispo, State of California (the "Property"). The Property is more fully described
in Exhibit A attached hereto. The Senior Loan is or will be secured by a first mortgage lien (the "Senior
Deed of Trust") on, among other things, Borrower's fee simple interest in the Property and in the
improvements located thereon. The Borrower's obligation to repay the Senior Loan is evidenced by that
certain Promissory Note Secured By Deed of Trust dated as of even date herewith (the "Senior Note"),
made by Borrower to the order of Senior Lender, in an aggregate face principal amount equal to
$16,490,000. All capitalized terms used but not defined herein shall have the meaning ascribed thereto in
the Senior Loan Agreement.
B. Concurrently herewith, Subordinate Lender is making (1) a subordinate loan to Borrower
in the original principal amount of $1,300,000 (the "AHF Loan"), and (2) a subordinate loan to Borrower in
the original principal amount of $347,042 (the "Fee Deferral Loan", and together with the AHF Loan, the
"Subordinate Loan"). The AHF Loan is evidenced by that certain City of San Luis Obispo Affordable
Housing Fund Promissory Note Secured By Deed of Trust dated as of March 5, 2021 (the "AHF Note"),
executed by Borrower to the order of Subordinate Lender and secured by that certain Subordinate Deed
of Trust, Deed of Trust Covenants, Assignment of Rents, Security Agreement and Fixture Filing dated as
of March 5, 2021 (the "AHF Deed of Trust"), executed by Borrower for the benefit of Subordinate Lender
and recorded in the Official Records of San Luis Obispo County, California (the "Official Records")
substantially concurrently herewith. The Fee Deferral Loan is evidenced by that certain City of San Luis
Obispo Impact Fee Deferral Promissory Note Secured By Deed of Trust dated as of March 5, 2021 (the
"Fee Deferral Note", and together with the AHF Note, the "Subordinate Note"), executed by Borrower to
the order of Subordinate Lender and secured by that certain Subordinate Deed of Trust, Deed of Trust
Covenants, Assignment of Rents, Security Agreement and Fixture Filing dated as of March 5, 2021 (the
"Fee Deferral Deed of Trust", and together with the AHF Deed of Trust, the "Subordinate Deed of
Trust"), executed by Borrower for the benefit of Subordinate Lender and recorded in the Official Records
substantially concurrently herewith. Borrower has requested the Senior Lender to permit Subordinate
Lender to make the Subordinate Loan and to secure the Subordinate Loan by, among other things,
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recording the Subordinate Deed of Trust against the Borrower's fee simple interest in the Property, and in
conjunction therewith, to record the Regulatory Agreement.
C. Pursuant to that certain Loan Purchase Agreement dated as of even date herewith (the
"Loan Purchase Agreement") by and among Senior Lender, Borrower and California Community
Reinvestment Corporation, a California nonprofit public benefit corporation ("CCRC"), and upon the
satisfaction of certain terms and conditions contained therein, (i) CCRC has agreed to purchase up to
$1,980,000 in the principal amount of the Senior Loan from Senior Lender on the Conversion Date (as
defined in the Loan Purchase Agreement) and thereupon become the "Senior Lender" under the Senior
Loan Agreement, (ii) Senior Lender has agreed to assign its rights under the Senior Loan Agreement, the
Senior Note, the Senior Deed of Trust and certain of other Senior Loan Documents to CCRC on the
Conversion Date (as defined in the Loan Purchase Agreement), and (iii) Borrower has agreed to execute
certain additional documents in connection with such purchase and assignment. From and after the
Conversion Date, all references herein to "Senior Lender' shall mean and refer to CCRC.
D. The Senior Lender has agreed to permit the Subordinate Lender to make the Subordinate
Loan and to record the Subordinate Deed of Trust and the Regulatory Agreement against the Property
subject to all of the conditions contained in this Agreement.
NOW, THEREFORE, in order to induce the Senior Lender to permit the Subordinate Lender to make
the Subordinate Loan to the Borrower and to record the Subordinate Deed of Trust and the Regulatory
Agreement against the Property, and in consideration thereof, the Senior Lender, the Subordinate Lender
and the Borrower agree as follows:
1. Definitions.
In addition to the terms defined in the Recitals to this Agreement, for purposes of this Agreement
the following terms have the respective meanings set forth below:
"Affiliate" means, when used with respect to a Person, any corporation, partnership, joint venture,
limited liability company, limited liability partnership, trust or individual controlled by, under common control
with, or which controls such Person (the term "control" for these purposes shall mean the ability, whether by
the ownership of shares or other equity interests, by contract or otherwise, to elect a majority of the directors
of a corporation, to make management decisions on behalf of, or independently to select the managing
partner of, a partnership, or otherwise to have the power independently to remove and then select a majority
of those individuals exercising managerial authority over an entity, and control shall be conclusively
presumed in the case of the ownership of 50% or more of the equity interests).
"Borrower" means the Person named as such in the first paragraph of this Agreement and any other
Person (other than the Senior Lender) who acquires title to the Property after the date of this Agreement.
"Business Day" means any day other than Saturday, Sunday or a day on which the Senior Lender
is not open for business.
"Default Notice" means: (a) a copy of the written notice from the Senior Lender to the Borrower
stating that a Senior Loan Default has occurred under the Senior Loan; or (b) a copy of the written notice
from a Subordinate Lender to the Borrower stating that a Subordinate Loan Default has occurred under any
Subordinate Loan. Each Default Notice shall specify the default upon which such Default Notice is based.
"Person" means an individual, estate, trust, partnership, corporation, limited liability company, limited
liability partnership, governmental entity, department or agency or any other entity which has the legal
capacity to own property.
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"Regulatory Agreement' means that certain Affordable Housing Rental Restriction Agreement and
Declaration of Restrictive Covenants dated as of March 5, 2021, by and between Subordinate Lender and
Borrower, encumbering the Property and recorded in the Official Records substantially concurrently herewith.
"Senior Lender" means the Person named as such in the first paragraph on page 1 of this
Agreement. When any other Person becomes the legal holder of the Senior Note, such other Person shall
automatically become the Senior Lender.
"Senior Loan Default" means the occurrence of an "Event of Default" as that term is defined in
the Senior Loan Documents.
"Senior Loan Documents" means the Senior Loan Agreement, the Senior Note, the Senior Deed of
Trust, and all other Loan Documents (as defined in the Senior Loan Agreement).
"Subordinate Deed of Trust" has the meaning ascribed thereto in Recital B, above.
"Subordinate Lender" means the Persons named as such in the first paragraph on page 1 of this
Agreement and any other Person who becomes the legal holder of any Subordinate Note after the date of
this Agreement.
"Subordinate Loan Default" means a default by the Borrower in performing or observing any of
the terms, covenants or conditions in the Subordinate Loan Documents to be performed or observed by it,
which continues beyond any applicable period provided in the Subordinate Loan Documents for curing the
default.
"Subordinate Loan Documents" means, collectively, the Subordinate Note, the Subordinate
Deed of Trust, and all other documents evidencing, securing or otherwise executed and delivered in
connection with the Subordinate Loan, but specifically excluding the Regulatory Agreement.
"Subordinate Note" has the meaning ascribed thereto in Recital B, above.
2. Permission to Record the Subordinate Deed of Trust and the Regulatory Agreement
Against the Property.
The Senior Lender agrees, notwithstanding the prohibition against inferior liens on the Property
contained in the Senior Loan Documents and subject to the provisions of this Agreement, to permit the
Subordinate Lender to record the Subordinate Deed of Trust and other recordable Subordinate Loan
Documents against the Property (which are subordinate in all respects to the lien of the Senior Deed of Trust
and the Senior Loan) to secure the Borrower's obligation to repay the Subordinate Note and all other
obligations, indebtedness and liabilities of the Borrower to the Subordinate Lender under and in connection
with the Subordinate Loan. In addition, Senior Lender agrees to permit Subordinate Lender to record the
Regulatory Agreement against the Property as an encumbrance senior to the Senior Deed of Trust. Such
permission is subject to the condition that each of the representations and warranties made by the Borrower
and the Subordinate Lender in Section 3 is true and correct on the date of this Agreement and on the date on
which the proceeds of the Subordinate Loan are disbursed to the Borrower. If any of the representations and
warranties made by the Borrower and the Subordinate Lender in Section 3 is not true and correct on both of
those dates, the provisions of the Senior Loan Documents applicable to unpermitted liens on the Property
shall apply.
3. Borrower's and Subordinate Lender's Representations and Warranties.
The Borrower and the Subordinate Lender each makes the following representations and warranties
to the Senior Lender:
(a) Intentionally Omitted.
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Subordination Agreement (City of San Luis Obispo)
(b) Relationship of Borrower to Subordinate Lender and Senior Lender. The
Subordinate Lender is not an Affiliate of the Borrower.
(c) Term. The Subordinate Note has a stated maturity date of fifty-five (55) years from
the date of execution.
(d) Subordinate Loan Documents. The executed Subordinate Loan Documents and
the Regulatory Agreement are substantially in the same forms as those submitted to, and approved
by, Senior Lender prior to the date of this Agreement. Upon execution and delivery of the
Subordinate Loan Documents and the Regulatory Agreement, Borrower shall deliver to Senior
Lender an executed copy of each of the Subordinate Loan Documents and the Regulatory
Agreement, certified to be true, correct and complete.
(e) Senior Loan Documents. Upon execution and delivery of the Senior Loan
Documents, Borrower shall deliver to Subordinate Lender an executed copy of each of the Senior
Loan Documents, certified to be true, correct and complete.
4. Terms of Subordination.
(a) Agreement to Subordinate. The Senior Lender and the Subordinate Lender
agree that: (i) the indebtedness evidenced by the Subordinate Loan Documents is and shall be
subordinated in right of payment, to the extent and in the manner provided in this Agreement to the
prior payment in full of the indebtedness evidenced by the Senior Loan Documents, and (ii) the
Subordinate Deed of Trust and the other Subordinate Loan Documents are and shall be subject and
subordinate in all respects to the liens, terms, covenants and conditions of the Senior Deed of Trust
and the other Senior Loan Documents and to all advances heretofore made or which may hereafter
be made pursuant to the Senior Deed of Trust and the other Senior Loan Documents (including but
not limited to, all sums advanced for the purposes of (1) protecting or further securing the lien of the
Senior Deed of Trust, curing defaults by the Borrower under the Senior Loan Documents or for any
other purpose expressly permitted by the Senior Deed of Trust, or (2) constructing, renovating,
repairing, furnishing, fixturing or equipping the Property).
(b) Subordination of Subrogation Rights. Subordinate Lender agrees that if, by
reason of its payment of real estate taxes or other monetary obligations of the Borrower, or by
reason of its exercise of any other right or remedy under the Subordinate Loan Documents, it
acquires by right of subrogation or otherwise a lien on the Property which (but for this subsection)
would be senior to the lien of the Senior Deed of Trust, then, in that event, such lien shall be subject
and subordinate to the lien of the Senior Deed of Trust.
(c) Payments Before Senior Loan Default. Until the Subordinate Lender receives a
Default Notice of a Senior Loan Default from the Senior Lender, the Subordinate Lender shall be
entitled to retain for its own account all payments made under or pursuant to the Subordinate Loan
Documents.
(d) Payments After Senior Loan Default. The Borrower agrees that, after it receives
notice (or otherwise acquires knowledge) of a Senior Loan Default, it will not make any payments
under or pursuant to the Subordinate Loan Documents (including but not limited to principal, interest,
additional interest, late payment charges, default interest, attorney's fees, or any other sums secured
by any Subordinate Deed of Trust) without the Senior Lender's prior written consent. The
Subordinate Lender agrees that, after it receives a Default Notice from the Senior Lender with written
instructions directing the Subordinate Lender not to accept payments from the Borrower on account
of the Subordinate Loan, it will not accept any payments under or pursuant to the Subordinate Loan
Documents (including but not limited to principal, interest, additional interest, late payment charges,
default interest, attorney's fees, or any other sums secured by any Subordinate Deed of Trust)
without the Senior Lender's prior written consent. If the Subordinate Lender receives written notice
from the Senior Lender that the Senior Loan Default which gave rise to the Subordinate Lender's
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obligation not to accept payments has been cured, waived, or otherwise suspended by the Senior
Lender, the restrictions on payment to the Subordinate Lender in this Section 4 shall terminate, and
the Senior Lender shall have no right to any subsequent payments made to the Subordinate Lender
by the Borrower prior to the Subordinate Lender's receipt of a new Default Notice from the Senior
Lender in accordance with the provisions of this Section 4(d).
(e) Remitting Subordinate Loan Payments to Senior Lender. If, after any
Subordinate Lender receives a Default Notice from the Senior Lender in accordance with subsection
(d) above, the Subordinate Lender receives any payments under the Subordinate Loan Documents,
the Subordinate Lender agrees that such payment or other distribution will be received and held in
trust for the Senior Lender and unless the Senior Lender otherwise notifies the Subordinate Lender
in writing, will be promptly remitted, in kind to the Senior Lender, properly endorsed to the Senior
Lender, to be applied to the principal of, interest on and other amounts due under the Senior Loan
Documents in accordance with the provisions of the Senior Loan Documents. By executing this
Agreement, the Borrower specifically authorizes the Subordinate Lender to endorse and remit any
such payments to the Senior Lender, and specifically waives any and all rights to have such
payments returned to the Borrower or credited against the Subordinate Loan. Borrower and Senior
Lender acknowledge and agree that payments received by a Subordinate Lender, and remitted to
the Senior Lender under this Section 4, shall not be applied or otherwise credited against the
Subordinate Loan, nor shall the tender of such payment to the Senior Lender waive any Subordinate
Loan Default which may arise from the inability of Subordinate Lender to retain such payment or
apply such payment to the Subordinate Loan.
(f) Agreement Not to Commence Bankruptcy Proceeding. The Subordinate
Lender agrees that during the term of this Agreement they will not commence, or join with any other
creditor in commencing any bankruptcy reorganization, arrangement, insolvency or liquidation
proceedings with respect to the Borrower, without the Senior Lender's prior written consent.
5. Default Under Subordinate Loan Documents.
(a) Notice of Default and Cure Rights. The Subordinate Lender shall deliver to the
Senior Lender a Default Notice within five (5) Business Days in each case where any Subordinate
Lender has given a Default Notice to the Borrower. Failure of the Subordinate Lender to send a
Default Notice to the Senior Lender shall not prevent the exercise of the Subordinate Lender's rights
and remedies under the Subordinate Loan Documents, subject to the provisions of this Agreement.
The Senior Lender shall have the right, but not the obligation, to cure any Subordinate Loan Default
within 60 days following the date of such notice; provided, however that the Subordinate Lender shall
be entitled, during such 60-day period, to continue to pursue its rights and remedies under the
Subordinate Loan Documents to the extent permitted under Section 5(b). All amounts paid by the
Senior Lender in accordance with the Senior Loan Documents to cure a Subordinate Loan Default
shall be deemed to have been advanced by the Senior Lender pursuant to, and shall be secured by
the lien of, the Senior Deed of Trust.
(b) Subordinate Lender's Agreement to Standstill. If a Subordinate Loan Default
occurs and is continuing, the Subordinate Lender agrees that, without the Senior Lender's prior
written consent, it will not accelerate the Subordinate Loan, commence foreclosure proceedings with
respect to the Property, collect rents, appoint (or seek the appointment of) a receiver or institute any
other collection or enforcement action.
(c) Cross Default. The Borrower and the Subordinate Lender agrees that a
Subordinate Loan Default shall constitute a Senior Loan Default under the Senior Loan Documents
and the Senior Lender shall have the right to exercise all rights or remedies under the Senior Loan
Documents in the same manner as in the case of any other Senior Loan Default. If any Subordinate
Lender notifies the Senior Lender in writing that any Subordinate Loan Default of which the Senior
Lender has received a Default Notice has been cured or waived, as determined by the Subordinate
Lender in its sole discretion, then provided that Senior Lender has not conducted a sale of the
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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 shall be deemed cured,
and the Senior Loan shall be reinstated, provided, however, that the Senior Lender shall not be
required to return or otherwise credit for the benefit of the Borrower any default rate interest or other
default related charges or payments received by the Senior Lender during such Senior Loan Default.
6. Default Under Senior Loan Documents.
(a) Notice of Default and Cure Rights. Senior Lender agrees that it shall not
complete a foreclosure sale of the Property or record a deed -in -lieu of foreclosure with respect to the
property (each, a "Foreclosure Remedy") unless Subordinate Lender has first been given sixty (60)
days written notice of the Event(s) of Default giving Senior Lender the right to complete such
Foreclosure Remedy. Subordinate Lender shall have the right but not the obligation to cure such
default within the sixty (60)-day period. Senior Lender shall be entitled during such sixty (60)-day
period to continue to pursue all of its rights and remedies under the Senior Loan Documents,
including, but not limited to, acceleration of the Senior Loan (subject to any de -acceleration
provisions specifically set forth in the Senior Loan Documents), commencement and pursuit of a
judicial or non judicial foreclosure (but not completion of the foreclosure sale), appointment of a
receiver, enforcement of any guaranty (subject to any notice and cure provisions contained therein),
and/or enforcement of any other Senior Loan Document. In the event Senior Lender has
accelerated the Senior Loan and Subordinate Lender cures all Events of Default giving rise to such
acceleration within the sixty (60)-day cure period described above, such cure shall have the effect of
de -accelerating the Senior Loan; provided, however, that such de -acceleration shall not waive or limit
any of Senior Lender's rights to accelerate the Senior Loan or exercise any other remedies under the
Senior Loan Documents as to any future or continuing Events of Default. It is the express intent of
the parties hereunder that Senior Lender shall have the right to pursue all rights and remedies except
completion of a Foreclosure Remedy without liability to Subordinate Lender for failure to provide
timely notice to Subordinate Lender required hereunder, and that Senior Lenders liability hereunder
shall be expressly limited to actual and consequential damages to Subordinate Lender directly
caused by Senior Lender's completion of a Foreclosure Remedy without Subordinate Lender
receiving the notice and opportunity to cure described above. Senior Lender shall give Subordinate
Lender notice at the address set forth below in Section 11 or such other address as Subordinate
Lender may instruct Senior Lender in writing from time to time. Nothing contained herein shall waive
or modify any of Subordinate Lender's rights under California Civil Code Section 2924c.
(b) Cross Default. The Subordinate Lender agrees that, notwithstanding any contrary
provision contained in the Subordinate Loan Documents, a Senior Loan Default shall not constitute a
default under the Subordinate Loan Documents if no other default occurred under the Subordinate
Loan Documents until either (i) the Senior Lender has accelerated the maturity of the Senior Loan, or
(ii) the Senior Lender has taken affirmative action to exercise its rights under the Senior Deed of
Trust to collect rent, to appoint (or seek the appointment of) a receiver or to foreclose on (or to
exercise a power of sale contained in) the Senior Deed of Trust. At any time after a Senior Loan
Default is determined to constitute a default under the Subordinate Loan Documents, the
Subordinate Lender shall be permitted to pursue its remedies for default under the Subordinate Loan
Documents, subject to the restrictions and limitations of this Agreement. If at any time the Borrower
cures any Senior Loan Default to the satisfaction of the Senior Lender, as evidenced by written
notice from the Senior lender to the Subordinate Lender, any default under the Subordinate Loan
Documents arising from such Senior Loan Default shall be deemed cured and the Subordinate Loan
shall be retroactively reinstated as if such Senior Loan Default had never occurred.
7. Conflict.
The Borrower, the Senior Lender and the Subordinate Lender each agrees that, in the event of
any conflict or inconsistency between the terms of the Senior Loan Documents, the Subordinate Loan
Documents and the terms of this Agreement, the terms of this Agreement shall govern and control solely
as to the following: (a) the relative priority of the security interests of the Senior Lender and the
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Subordinate Lender in the Property; (b) the timing of the exercise of remedies by the Senior Lender and
the Subordinate Lender under the Senior Deed of Trust and the Subordinate Deed of Trust, respectively;
and (c) solely as between the Senior Lender and the Subordinate Lender, the notice requirements, cure
rights, and the other rights and obligations which the Senior Lender and the Subordinate Lender have
agreed to as expressly provided in this Agreement. Borrower acknowledges that the terms and
provisions of this Agreement shall not, and shall not be deemed to: extend Borrower's time to cure any
Senior Loan Default or Subordinate Loan Default, as the case may be; give the Borrower the right to
notice of any Senior Loan Default or Subordinate Loan Default, as the case may be other than that, if any,
provided, respectively under the Senior Loan Documents or the Subordinate Loan Documents; or create
any other right or benefit for Borrower as against Senior Lender or Subordinate Lender.
8. Rights and Obligations of the Subordinate Lender Under the Subordinate Loan
Documents and of the Senior Lender under the Senior Loan Documents.
Subject to each of the other terms of this Agreement, all of the following provisions shall
supersede any provisions of the Subordinate Loan Documents covering the same subject matter:
(a) Protection of Security Interest. The Subordinate Lender shall not, without the
prior written consent of the Senior Lender in each instance, take any action which has the effect of
increasing the indebtedness outstanding under, or secured by, the Subordinate Loan Documents,
except that the Subordinate Lender shall have the right to advance funds to cure Senior Loan
Defaults pursuant to Section 6(a) above and advance funds pursuant to the Subordinate Deed of
Trust for the purpose of paying real estate taxes and insurance premiums, making necessary repairs
to the Property and curing other defaults by the Borrower under the Subordinate Loan Documents.
(b) Condemnation or Casualty. In the event of: a taking or threatened taking by
condemnation or other exercise of eminent domain of all or a portion of the Property (collectively, a
"Taking"); or the occurrence of a fire or other casualty resulting in damage to all or a portion of the
Property (collectively, a "Casualty"), at any time or times when the Senior Deed of Trust remains a
lien on the Property the following provisions shall apply:
(1) The Subordinate Lender hereby agrees that its rights (under the
Subordinate Loan Documents or otherwise) to participate in any proceeding or action
relating to a Taking and/or a Casualty, or to participate or join in any settlement of, or to
adjust, any claims resulting from a Taking or a Casualty shall be and remain subordinate in
all respects to the Senior Lender's rights under the Senior Loan Documents with respect
thereto, and the Subordinate Lender shall be bound by any settlement or adjustment of a
claim resulting from a Taking or a Casualty made by the Senior Lender; provided, however,
this subsection and/or anything contained in this Agreement shall not limit the rights of the
Subordinate Lender to file any pleadings, documents, claims or notices with the appropriate
court with jurisdiction over the proposed Taking and/or Casualty; and
(2) all proceeds received or to be received on account of a Taking or a
Casualty, or both, shall be applied (either to payment of the costs and expenses of repair
and restoration or to payment of the Senior Loan) in the manner determined by the Senior
Lender in its sole discretion; provided, however, that if the Senior Lender elects to apply
such proceeds to payment of the principal of, interest on and other amounts payable under
the Senior Loan, any proceeds remaining after the satisfaction in full of the principal of,
interest on and other amounts payable under the Senior Loan shall be paid to, and may be
applied by, the Subordinate Lender in accordance with the applicable provisions of the
Subordinate Loan Documents, provided however, the Senior Lender agrees to consult with
the Subordinate Lender in determining the application of Casualty proceeds, provided further
however that in the event of any disagreement between the Senior Lender and the
Subordinate Lender over the application of Casualty proceeds, the decision of the Senior
Lender, in its sole discretion, shall prevail.
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(c) No Modification of Subordinate Loan Documents. The Borrower and the
Subordinate Lender each 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 the Senior Lender in each instance (which consent shall not be unreasonably withheld,
conditioned or delayed), increase the amount of any Subordinate Loan, increase the required
payments due under any Subordinate Loan, decrease the term of any Subordinate Loan, increase
the interest rate on any Subordinate Loan, or otherwise amend any Subordinate Loan terms in a
manner that creates an adverse effect upon the Senior Lender under the Senior Loan Documents.
Any unauthorized amendment of the Subordinate Loan Documents or assignment of the
Subordinate Lender's interest in any Subordinate Loan without the Senior Lender's consent shall be
void ab initio and of no effect whatsoever and Subordinate Lender agrees that it shall not transfer or
assign any Subordinate Loan or the Subordinate Loan Documents without the prior written consent
of the Senior Lender (which consent shall not be unreasonably withheld, conditioned or delayed).
9. Conversion, Modification or Refinancing of Senior Loan.
The Subordinate Lender consents to any agreement or arrangement in which the Senior Lender
waives, postpones, extends, reduces or modifies any provisions of the Senior Loan Documents, including
any provision requiring the payment of money. Subordinate Lender further agrees that its agreement to
subordinate hereunder shall extend to any new mortgage debt which is for the purpose of refinancing all
or any part of the Senior Loan (including reasonable and necessary costs associated with the closing
and/or the refinancing) and, in the event of new mortgage debt, Subordinate Lender shall execute and
deliver to Senior Lender a new subordination agreement on the same terms and conditions as this
Subordination Agreement. Notwithstanding the foregoing, the Senior Lender shall not increase the
principal amount of the Senior Loan (other than pursuant to a protective advance permitted under the
Senior Loan Documents) without Subordinate Lender's consent, nor shall this agreement to subordinate
extend to any refinancing, if such refinancing has a principal amount that is greater than the Senior Loan.
Following Conversion, all the terms and covenants of this Agreement shall inure to the benefit of any
holder of the Senior Loan.
10. Default by the Subordinate Lender or Senior Lender.
If the Subordinate Lender or Senior Lender defaults in performing or observing any of the terms,
covenants or conditions to be performed or observed by it under this Agreement, the other, non -defaulting
lender shall have the right to all available legal and equitable relief.
11. Notices.
Each notice, request, demand, consent, approval or other communication (hereinafter in this Section
referred to collectively as "notices" and referred to singly as a "notice") which the Senior Lender or the
Subordinate Lender is required or permitted to give to the other party pursuant to this Agreement shall be in
writing and shall be deemed to have been duly and sufficiently given if: (a) personally delivered with proof of
delivery thereof (any notice so delivered shall be deemed to have been received at the time so delivered); or
(b) sent by Federal Express (or other similar national overnight courier) designating early morning delivery
(any notice so delivered shall be deemed to have been received on the next Business Day following receipt
by the courier); or (c) 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 shall be
deemed to have been received two days after mailing in the United States), addressed to the respective
parties as follows:
SENIOR LENDER (prior to Conversion): Bank of America, N.A.
2000 Clayton Road
6th Floor
Concord, California 94520
Attention: Loan Administration Manager
N.
4826-1870-5369 v.5 4900000.002270
Broad Street
Subordination Agreement (City of San Luis Obispo)
With a copy to: California Community Reinvestment Corporation
100 W. Broadway
Suite 1000
Glendale, California 91210
Attention: President
SENIOR LENDER (following Conversion)
SUBORDINATE LENDER:
With a copy to:
California Community Reinvestment Corporation
100 W. Broadway
Suite 1000
Glendale, California 91210
Attention: President
City of San Luis Obispo
Community Development Department
919 Palm Street
San Luis Obispo, California 93401-3249
Attention: Community Development Director
City of San Luis Obispo
990 Palm Street
San Luis Obispo, California 93401
Attention: City Attorney
Either party may, by notice given pursuant to this Section, 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 shall only be effective upon receipt.
12. General.
(a) Assignment/Successors. This Agreement shall be binding upon the Borrower,
the Senior Lender and the Subordinate Lender and shall inure to the benefit of the respective legal
successors and assigns of the Senior Lender and the Subordinate Lender.
(b) No Partnership or Joint Venture. The Senior Lender's permission for the
placement of the Subordinate Loan Documents does not constitute the Senior Lender as a joint
venturer or partner of the Subordinate Lender. Neither party hereto shall hold itself out as a partner,
agent or Affiliate of the other party hereto.
(c) Senior Lender's and Subordinate Lender's Consent. Wherever the Senior
Lender's consent or approval is required by any provision of this Agreement, such consent or
approval may be granted or denied by the Senior Lender in its sole and absolute discretion, unless
otherwise expressly provided in this Agreement. Wherever the Subordinate Lender's consent or
approval is required by any provision of this Agreement, such consent or approval may be granted or
denied by the Subordinate Lender in its sole and absolute discretion, unless otherwise expressly
provided in this Agreement.
(d) Further Assurances. The Subordinate Lender, the Senior Lender and the
Borrower each agree, at the Borrower's expense, to execute and deliver all additional instruments
and/or documents reasonably required by any other party to this Agreement in order to evidence that
the Subordinate Deed of Trust are subordinate to the lien, covenants and conditions of the Senior
Deed of Trust, or to further evidence the intent of this Agreement.
(e) Amendment. This Agreement shall not be amended except by written instrument
signed by all parties hereto.
PO
4826-1870-5369 v.5 4900000.002270
Broad Street
Subordination Agreement (City of San Luis Obispo)
(f) Governing Law. This Agreement shall be governed by the laws of the State in
which the Property is located.
(g) Severable Provisions. If any provision of this Agreement shall be invalid or
unenforceable to any extent, then the other provisions of this Agreement, shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
(h) Term. The term of this Agreement shall commence on the date hereof and shall
continue until the earliest to occur of the following events: (i) the payment of all of the principal of,
interest on and other amounts payable under the Senior Loan Documents; (ii) the payment of all of
the principal of, interest on and other amounts payable under the Subordinate Loan Documents,
other than by reason of payments which the Subordinate Lender is obligated to remit to the Senior
Lender pursuant to Section 4 hereof, (iii) the acquisition by the Senior Lender of title to the Property
pursuant to a foreclosure or a deed in lieu of foreclosure of, or the exercise of a power of sale
contained in, the Senior Deed of Trust; or (iv) the acquisition by the Subordinate Lender of title to the
Property pursuant to a foreclosure or a deed in lieu of foreclosure of, or the exercise of a power of
sale contained in, the Subordinate Deed of Trust, but only if such acquisition of title does not violate
any of the terms of this Agreement.
(i) Counterparts. This Agreement 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 Intentionally Left Blank]
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4826-1870-5369 v.5 4900000.002270
Broad Street
Subordination Agreement (City of San Luis Obispo)
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first written above.
SENIOR LENDER:
BANK OF AMERICA, N.A.,
a national banking association
By:
An rea Ursill
Senior Vice President
S-1
Broad Street
Subordination Agreement (City of San Luis Obispo)
SUBORDINATE LENDER:
CITY OF SAN LUIS OBISPO,
a California charter city d municipal corporation
Michael Codron
Community Development Director
AS TO FORM AND LEGAL EFFECT:
CVs75he Dietrick, City
S-2
Broad Street
Subordination Agreement (City of San Luis Obispo)
BORROWER:
BROAD STREET PLACE, L.P.,
a California limited partnership
By: Broad Street Place LLC,
a California limited liability company,
its General Partner
By: People's Self -Help Housing Corporation,
a California nonprofit public benefit corporation,
its sole Member and Manager
By:
Morgen Ben vedo
Executive Vice President
S-3
Broad Street
Subordination Agreement (City of San Luis Obispo)
/_[tl:V 161711111 =1rZrL§I=1:Ill 9
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 Go-s 42,�5 )Ss
On l/V `ay&� S � 2021 before me, 0,5Q
s2eS (j �t
a Notary Public, personally appeared (�r5 i I o who proved
to me on the basis of satisfactory evidence to be the personwhose name 0) is/ar-e-subscribed to the
within instrument and acknowledged to me that §esshe/they-executed the same infiisfher tbeif-authorized
capacity Oes}-and that by 4is/her/tb�ignature M on the instrument the person , or the entity upon
behalf of which the person (sf 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
,,.
ROSE MORE52E5
<` t ' Notary Public • California
Los Angeles County
Commission # Apr 2237956
My Comm. Expires 022 J
(Seal)
Broad Street
Subordination Agreement (City of San Luis Obispo)
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 Sagv\ LUIS QbI ao ) ss
On _ t[ ,1ayv" \ 'S 1 202�, 2021 before me, YtA, Al a vi t/m ev✓' chaw Y-\, ,
a Notary Public, personally appeared IM IrM Od Vd ✓\ 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 &V4
.� CARA ALEXANDRA VERESCHAGIN
Notary Public • California
" San Luis Obispo County
Commission k 2255915
r""'°'�• My Comm. Expires Aug 26, 2022
(Seal)
Broad Street
Subordination Agreement (City of San Luis Obispo)
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 )
0 ) ss
County
,,ofsau / /- o -5 Q O
�7
On W��C4 D , 2021 before me,
a Notary Public, personally appeared ,(/f W6 t:IJ , 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.
L. A. BERTRAN�
Notary Public - California z
San Luis Obispo County
Commission # 2210707
My Comm. Expires Sep 16, 2021
Signature
(Seal)
Broad Street
Subordination Agreement (City of San Luis Obispo)
EXHIBIT A
(Legal Description of Property)
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE CITY OF SAN LUIS OBISPO, COUNTY OF
SAN LUIS OBISPO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL A:
PARCEL 3 OF PARCEL MAP SLO 13-0003, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN
LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED JANUARY 31, 2014 IN
BOOK 77 OF PARCEL MAPS AT PAGES 16 AND 17.
PARCEL B:
A 40 FOOT PRIVATE ACCESS AND UTILITY EASEMENT OVER PARCEL 2 OF PARCEL MAP SLO
13-0003, IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF
CALIFORNIA, ACCORDING TO MAP RECORDED JANUARY 31, 2014 IN BOOK 77 OF PARCEL MAPS
AT PAGES 16 AND 17, AND AS DESCRIBED IN THAT CERTAIN GRANT OF EASEMENT AND
AGREEMENT FOR COMMON DRIVEWAY AND UTILITIES RECORDED JANUARY 31, 2014, AS
INSTRUMENT NO. 2014004065.
PARCEL C
AN EASEMENT FOR PEDESTRIAN ACCESS OVER A PORTION OF PARCEL 4 OF PARCEL MAP
SLO13-0003, FILED IN BOOK 77 OF MAPS, PAGES 16 AND 17, SAN LUIS OBISPO COUNTY
RECORDS AND MORE PARTICULARLY DESCRIBED IN THAT CERTAIN RECIPROCAL ACCESS
EASEMENT AGREEMENT, WHICH ALSO CONTAINS PROVISIONS FOR PARKING AS DESCRIBED
THEREIN, RECORDED MARCH 8, 2017, AS INSTRUMENT NO. 2017010455, OFFICIAL RECORDS,
SAN LUIS OBISPO COUNTY.
PARCEL D
EASEMENTS AS CREATED IN THAT CERTAIN DECLARATION OF COVENANTS, CONDITIONS AND
RESTRICTIONS, RECORDED FEBRUARY 19, 2014, AS INSTRUMENT NO. 2014006630 SAN LUIS
OBISPO COUNTY RECORDS.
PARCEL E:
AN EASEMENT FOR UNDERGROUND UTILITIES AS CREATED IN THAT CERTAIN EASEMENT
AGREEMENT IN FAVOR OF PEOPLE'S SELF-HELP HOUSING CORPORATION, A CALIFORNIA
NONPROFIT PUBLIC BENEFIT CORPORATION, RECORDING CONCURRENTLY HEREWITH.
APN: 053-231-048
A-1
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Subordination Agreement (City of San Luis Obispo)