15-0701_MILLENNIUM HOUSING, LLC._Sub Agreement_Rec No. 2015000396765 Recorded in Official Records, Orange County
RECORDING REQUESTED BY Hugh Nguyen, Clerk-Recorder
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Preston F. Olsen, Esq. )
Ballard Spahr LLP )
201 S. Main St., Suite 800 )
Salt Lake City, UT 84111-2221 )
WS , 710071 5
This document is recorded for the benefit of the City of San Juan Capistrano, and
the recording is fee-exempt under Section 27383 of the Government Code.
SUBORDINATION AGREEMENT
(SAN JUAN MOBILE ESTATES)
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 SECURITY
INSTRUMENT.
THIS SUBORDINATION AGREEMENT (the "Agreement") is made as of July
30, 2015, by MILLENNIUM HOUSING, LLC, a California limited liability company, owner of
the real property hereinafter described (the "Owner,), the CITY OF SAN JUAN CAPISTRANO
(the "City") and MUFG UNION BANK, N.A., as trustee under the Indenture, as hereinafter
defined (the "Indeinture Trustee").
RECITALS
A. Reference is made to the following; document (the "Subordinate
Document") which encumbers the property described in Exhibit A attached hereto (which
property, together with all improvements now or hereafter located on the property, is hereinafter
referred to as the "Property"):
(a) Supplemental Regulatory Agreement and Declaration of Restrictive
Covenants dated as of May 1, 2006, by and between the Owner and the City filed in the records
of Orange County, California on the 1 st day of June, 2006 as Instrument No. 2006-000368544.
B. The Owner has executed, or proposes to execute, a Deed of Trust with
Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing (the "Bond
Deed of Trust"), dated as of July 1, 2015, naming the Indenture Trustee as beneficiary and First
American Title Insurance Company as trustee. The Bond Deed of Trust secures, among other
things,the obligations of the Owner under a promissory note (the"Note") made by the Owner to
the order of the Independent Cities Finance Authority (the "Authority"), as issuer of certain
mobilehome park revenue refunding bonds, in the aggregate principal sum of THIRTY SEVEN
MILLION TWO HUNDRED THIRTY FIVE THOUSAND DOLLARS ($37,235,000.00). The
loan evidenced by the Note (the "Loan") is being made pursuant to a Loan Agreement (the
"Loan Agreement") executed as of July 1, 2015, and a Regulatory Agreement and Declaration of
Restrictive Covenants (the "Bond Regulatory Agreement") executed as of July 1, 2015, among
DMWEST#12071575 v2
the Owner, the Indenture Trustee and the Authority. The Loan Agreement is being executed in
connection with that certain Indenture of Trust (the "Indenture") executed as of July 1, 2015,
between the Authority and the Indenture Trustee, relating to $37,235,000 Mobile Home Park
Revenue Refunding Bonds (San Juan Mobile Estates) Series 2015. (The Loan Agreement, the
Note, the Bond Deed of Trust, and the other instruments and documents which relate to or secure
the obligations under the Loan shall be referred to collectively as the "Bond Loan Documents").
The Bond Deed of Trust and the Bond Regulatory Agreement are to be recorded concurrently
herewith.
E. As a condition to funding of the Loan, the Indenture Trustee, at the
direction of the Authority, requires that the Bond Deed of Trust and the Bond Regulatory
Agreement be unconditionally and at all times remain a lien or charge upon the Property, prior
and superior to the lien or charge of the Subordinate Document and that the City specifically and
unconditionally subordinate the Subordinate Document to the lien or charge of the Bond Deed of
Trust and the Bond Regulatory Agreement.
F. The City and the Owner both agree to the subordination of the Subordinate
Document in favor of the Bond Deed of Trust and the Bond Regulatory Agreement.
G. The Authority has requested and directed that the Indenture Trustee
execute and deliver this Agreement.
THEREFORE, for valuable consideration and to induce the Authority and the
Indenture Trustee to make the Loan, the Owner, the City and the Indenture Trustee hereby agree
for the benefit of the Indenture Trustee as follows:
1. The Bond Deed of Trust and the Bond Regulatory Agreement and any
modifications, renewals or extensions thereof, shall unconditionally be and at all times remain a
lien or charge on the Property prior and superior to the Subordinate Document.
2. This Agreement shall be the whole agreement with regard to the
subordination of the Subordinate Document and shall supersede and cancel, but only insofar as
would affect the priority of the Bond Deed of Trust and the Bond Regulatory Agreement, any
prior agreements as to such subordination, including, without limitation, those provisions, if any,
contained in the Subordinate Document which provide for the subordination of the Subordinate
Document to a deed or deeds of trust or to a mortgage or mortgages.
3. The parties hereto agree to cooperate with each other and perform any acts
and execute, acknowledge and deliver any additional agreements, documents or instruments that
may be reasonably necessary or desirable to carry out the provisions or to effectuate the purpose
of this Agreement, including, without limitation, execution, acknowledgment, delivery and
recordation of any document necessary to clear title to the Property and Improvements after a
foreclosure under the Bond Deed of Trust, or a transfer of the Property and Improvements by an
assignment or a deed in lieu of foreclosure under the Bond Deed of Trust.
The City further declares, agrees and acknowledges for the benefit of the
Indenture Trustee,that:
DMWEST#12071575 v2 2
4. The City intentionally and unconditionally subordinates the lien or charge
upon the Property of the Subordinate Document to the lien or charge of the Bond Deed of Trust
and the Bond Regulatory Agreement upon the Property and understands that in reliance upon,
and in consideration of, this subordination, specific loans and advances are being and will be
made by the Indenture Trustee and, as part and parcel thereof, specific monetary and other
obligations are being and will be entered into which would not be made or entered into but for
said reliance upon this subordination.
5. The City hereby agrees not to exercise or attempt to exercise any remedy
under the Subordinate Document due to or as a remedy for any breach of, or default or event of
default thereunder, unless, prior to such exercise or attempted exercise, a breach of, or a default
or event of default under the terms of the Bond Loan Documents shall have occurred and be
continuing and the Indenture Trustee or the Bondowners (as defined below) shall have
commenced exercising remedies under the Bond Loan Documents.
The Indenture Trustee covenants and agrees that:
6. In the event that the Indenture Trustee delivers to the Owner a notice of
default under the Bond Loan Documents, the Indenture Trustee shall deliver to the City a copy of
said notice concurrently with delivery to the Owner, and the City shall have the right (but not the
obligation) to cure any or all defaults specified in said notice for a period of ninety (90) days
after the date of such notice.
7. If, prior to any foreclosure sale of the Property under the Bond Deed of
Trust, the City takes title to or possession of the Property and cures the outstanding defaults
under the Loan, if any, the Indenture Trustee herby agrees not to exercise any rights it may have
to declare a default and accelerate its Loan by reason of the transfer of title or possession to the
City, or if acceleration has already occurred, the Trustee hereby agrees that it will reinstate the
Loan at that time; and agrees that it will recognize the City as borrower under the Loan under the
same terms and conditions of said Loan, if the City agrees to assume and perform the Owner's
obligations under said Loan, subject to the written approval of the owners of a majority of the
aggregate principal amount of the Outstanding Bonds (the "Bondowners").
8. If the City takes title to the Property and cures the outstanding defaults
under the Bond Loan Documents, if any, the City shall have the right to transfer the Property to
another nonprofit 501(c)(3) tax-exempt housing developer reasonably approved in writing by the
Indenture Trustee, the Authority and the Bondowners. In connection with any such transfer
approved by the Indenture Trustee, the Bondowners and the Authority, the Indenture Trustee
agrees that such transfer shall not constitute a default under the Bond Loan Documents and the
Indenture Trustee shall not exercise any rights it may have to accelerate the Loan as a result of
such transfer. This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original and all of which together shall constitute and be construed as one and the
same instrument.
Exhibit A is attached hereto and incorporated herein by this reference.
DMWEST#12071575 v2 3
IN WITNESS WHEREOF, the parties have executed this Subordination Agreement as of
the date first above written.
CITY OF SAN JUAN CAPISTRANO, a municipal
corporation
By:
Derek Reeve, Mayor
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 )
On 2015,before me, , a 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 (Seal)
(Signature Page to Subordination Agreement—San Juan Mobile Estates)
PUBLIC AGENCY FORM OF ACKNOWLEDGEMENT
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 ) ss.
City of San Juan Capistrano )
(Gov't Code 40814 & Civil Code 118 1)
On July 23, 2015, before me, Christy Jakl, Deputy City Clerk, personally appeared
Derek Reeve, Mayor, who proved to me on the basis of satisfactory evidence to the be 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/there signature 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.
(SEAL)
WITNESS'rny-hand-and`official seal.
.f n
k1risakl, De uty_t :ty (jerk
yJ
OPTIONU!"h
Capacity Claimed by Signers Description of Attached Document
Title or Type of Document
Mayor
Subordination Agreement(San Juan Mobile Estates)
Title Millennium Housing Corporation
MUFG Union Bank,N.A.
Signer is Representing
City of San Juan Capistrano
MILLENNIUM HOUSING, LLC,
a California limited liability company
By: Millennium Housing Corporation,
a California nonprofit public benefit corporation, its
Sole Member
By:
Lorraine M. Carraway, Vice President
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 5 Q,las ) .-
Onzi-,-ILA 19, 2015,before me, Y�GtY1n2��Yd S l , a Notary
Public, personally appear d Lorraine M. Carraway, who proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to the within instrument and acknowledged
to me that she executed the same in her authorized capacity, and that by her signature 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. rA MARIANNE FROST
Commission# 1986601
Z Notary Public-California x
Z los Angeles County
(Seal)
M Comm.Expires Jul 29,2016
Signature45��
(Signature Page to Subordination Agreement—San Juan Mobile Estates)
MUFG UNION BANK,N.A., as Trustee
By: ' "
MELa EE o i e � ff r
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 )
ss.
COUNTY OF /10.5 ° )
On1-4 y 2-7_,2015,before me, G , a Notary Public,
personally appeared /✓I G Z-o a-,& yoti N y,who proved tome on the basis of satisfactory
evidence to be the person(o)whose name( Isis/aye subscribed to the within instrument and
acknowledged to me that k0she/4ey executed the same in I-os/her/their authorized capacity(0),
and that by Wer/tb&-signature( on the instrument the person(0), or the entity upon behalf of
which the person(o) 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. apo ERT d.c►Ro
Commission Mt 2Q29816
zNotary Public-Calflorniat
J Z Los Angeles County
M >
Comm.Expires Jun 20,2017
Signature (Seal)
I
(Signature Page to Subordination Agreement—San Juan Mobile Estates)
EXHIBIT A
Legal Description of Land
A-1
Exhibit "A"
Legal Description
Real property in the City of San Juan Capistrano, County of Orange, State of California, described as
follows:
PARCEL 3 OF PARCEL MAPS, IN THE CITY OF SAN JUAN CAPISTRANO, COUNTY OF ORANGE, STATE OF
CALIFORNIA, AS PER MAP FILED IN BOOK 62, PAGE 19 OF PARCEL MAPS, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY.
SAID LAND IS ALSO BEING A PORTION OF THE FOLLOWING DESCRIBED PARCELS "A" AND "B".
PARCEL A:
BEING THOSE PORTIONS OF LOTS 60, 61 AND 62 OF TRACT NO. 103, IN THE CITY OF SAN JUAN
CAPISTRANO, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 11,
PAGES 29 THROUGH 33 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT IN THE NORTHWESTERLY LINE OF SAID LOT 61, LYING NORTH 210 40'07"
EAST 4.78 FEET FROM THE WESTERLY CORNER OF SAID LOT 61; THENCE NORTH 890 58, 18" EAST
564.75 FEET TO THE WESTERLY LINE OF THE LAND DESCRIBED AS PARCEL 101, IN THE DEED TO THE
ORANGE COUNTY FLOOD CONTROL DISTRICT, RECORDED JUNE 28, 1963 IN BOOK 6609, PAGE 371 OF
OFFICIAL RECORDS OF SAID COUNTY; THENCE ALONG SAID WESTERLY LINE, SOUTH 30 04'46" WEST
1045.00 FEET TO A POINT LYING NORTH 30 04'46" EAST 583.39 FEET FROM THE SOUTHERLY LINE OF
SAID LOT 62; THENCE SOUTH 891 58' 18" WEST 548.34 FEET; THENCE NORTH 441 01'54" WEST
687.07 FEET TO THE NORTHWESTERLY LINE OF SAID LOT 62; THENCE ALONG SAID LAST MENTIONED
NORTHWESTERLY LINE, NORTH
420 14'44" EAST 743.84 FEET TO THE NORTHEASTERLY LINE OF SAID LOT 62; THENCE ALONG SAID
NORTHEASTERLY LINE, SOUTH 70° 07'46" EAST 16.40 FEET TO SAID NORTHWESTERLY LINE OF LOT
61; THENCE ALONG SAID LAST MENTIONED NORTHWESTERLY LINE, NORTH 210 40'07" EAST 4.78
FEET TO THE POINT OF BEGINNING.
PARCEL B:
BEING THOSE PORTIONS OF LOTS 60 AND 62 OF TRACT NO. 103, IN THE CITY OF SAN JUAN
CAPISTRANO, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 11,
PAGES 29 THROUGH 33 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY, DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE WESTERLY LINE OF THE LAND DESCRIBED AS PARCEL 101,
IN THE DEED TO ORANGE COUNTY FLOOD CONTROL DISTRICT, RECORDED JUNE 28, 1963 IN BOOK
6609, PAGE 371 OF OFFICIAL RECORDS OF SAID COUNTY, WITH THE SOUTHERLY LINE OF SAID LOT
62; THENCE ALONG SAID WESTERLY LINE, NORTH 30 04'46" EAST 583.39 FEET; THENCE SOUTH 890
58' 18" WEST 548.34 FEET; THENCE NORTH 440 01'54" WEST 687.07 FEET TO THE NORTHWESTERLY
LINE OF SAID LOT 62; THENCE ALONG SAID NORTHWESTERLY LINE, SOUTH 420 14'44" WEST 290.73
FEET AND SOUTH 360 58' 16" WEST 302.19 FEET TO THE SOUTHWESTERLY LINE OF SAID LOT 62;
THENCE ALONG SAID SOUTHWESTERLY LINE, SOUTH 440 01' 54" EAST 862.34 FEET TO SAID
SOUTHERLY LINE;
THENCE ALONG SAID SOUTHERLY LINE, NORTH 890 58' 18" EAST 772.38 FEET TO THE POINT OF
BEGINNING.
APN: 121-171-29 and 121-171-30