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HomeMy WebLinkAboutStaff Report 5.A 06/19/2017DATE: June 19, 2017 Agenda Item #5.A TO: Honorable Mayor and Members of the City Council through City Manager FROM: Sue Castellucci, Housing Administrator SUBJECT: Resolution Approving Subordination Agreements with an Affiliate of the Burbank Housing Development Corporation, Old Elm Partners, L. P., in Connection with the Refinancing of Old Elm Village, and Authorizing the City Manager to Sign Documents Related to the Financing of the Project. RECOMMENDATION It is recommended that the City Council adopt the attached Resolution Approving Subordination Agreements with an Affiliate of the Burbank Housing Development Corporation, Old Elm Partners, L. P., in Connection with the Refinancing of Old Elm Village and Authorizing the City Manager to Sign Documents Related to the Financing of the Project. BACKGROUND Old Elm Village project is an existing 87 -unit affordable housing rental apartment facility, located at 2 Sandy Lane. The project was built in 2001 and is a mix of 19 studio and one bedroom apartments in a gateway mixed use building and 70 duplex units of one to four bedrooms. The City of Petaluma has a Housing Fund loan in the amount of $1,730,475 and a HOME loan in the amount of $800,000 on the property. Currently, there are affordability restrictions on the property that will expire in 2032. Burbank Housing is refinancing the first mortgage through Housing Trust Silicon Valley bank in the amount of $1,400,000 to lower the interest rate and to take advantage of terminating a Yield Maintenance Fee from the current first mortgage upon refinancing the loan after July 1, 2017. . DISCUSSION Old Elm Village property is 15 years old and is in need of rehabilitation to address deferred maintenance issues. Typically, when an affordable housing property reaches the 15 year mark, the owner /developer goes through the process of acquiring the property from the limited partner. The first step in this process for the Old Elm Village property is to refinance the first mortgage in order to remove the Yield Maintenance Fee clause on the current mortgage held with Citibank. This will save the property over $900,000 in financing fees when it resyndicates and rehabilitates the property using 4% tax credits and bonds in the future. It has been the housing policy to subordinate city loans to the senior loan mortgage holder. There is some risk involved when you subordinate to a senior debt, however, no city funds have been in jeopardy on any of our prior affordable housing rental developments. Since 1984, the city has subordinated to the senior debt on each of the twenty one affordable housing developments. The recommended Resolution presented for the City Council's approval authorizes the City Manager to execute the subordination agreements and any necessary related documents. FINANCIAL IMPACTS This project fulfills the City Council's goals and priorities of the 2015 -2023 Housing Element and the 2015 -2020 Consolidated Plan in preserving affordable housing in Petaluma. There are no new funds allocated to this property for this refinancing. The loans can be paid back using residual receipts from the property. ATTACHMENTS 1. Resolution 2. Subordination Agreement for Housing loan 3. Subordination Agreement for HOME loan 2 ATTACHMENT #1 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA APPROVING SUBORDINATION AGREEMENTS WITH AN AFFILIATE OF BURBANK HOUSING CORPORATION, OLD ELM PARTNERS, L. P., IN CONNECTION WITH THE REFINANCING OF OLD ELM VILLAGE, AND AUTHORIZING THE CITY MANAGER TO SIGN DOCUMENTS RELATED TO THE FINANCING OF THE PROJECT. WHEREAS, the City previously provided a Housing loan in the amount of $1,730,745, pursuant to loan documents executed January 31, 2001 . for the development of Old Elm Village, an affordable housing rental project consisting of 87 units of multifamily housing (the "Project ") located at 2 Sandy Lane; and WHEREAS, the City of Petaluma also provided a loan of HOME funds in the amount of $800,000, pursuant to loan documents executed January 31, 2001 for the Project; and WHEREAS, Burbank or an affiliate of Burbank is the general partner in Old Elm Village L.P., a California limited partnership ( "Owner "), intends to refinance the Project; and WHEREAS, to ensure the financial feasibility of the Project, Burbank has requested that the City subordinate the HOME loan and the Housing loan to the deed of trust with Housing Trust Silicon Valley bank securing the refinancing of the senior debt for the Project in the amount of $1,400,000. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Petaluma hereby: Agrees to subordinate the City's deeds of trust executed in connection with the financing of the Project to the first deed of trust to be executed by Owner for the benefit of the Project refinancing. 2. Authorizes and directs the City Manager and /or his designees to execute all documents and to take all actions reasonably necessary to implement this Resolution and the transactions described herein. PASSED AND ADOPTED AT A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF PETALUMA ON , 2017 BY THE FOLLOWING VOTE: ATTACHMENT #2 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: HOUSING TRUST SILICON VALLEY 95 S. Market St., Suite 610 San Jose, CA 95113 Attn: Multifamily Loan Dept. Ref: Old Elm Village (SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY) SUBORDINATION AGREEMENT (359 Payran Street, Petaluma, California) 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 ( "AGREEMENT "), is dated as of June 23, 2017 by BURBANK HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation, owner of the real property ( "Owner" or "Borrower ") described on the attached Exhibit A (the "Property ") and The City of Petaluma, a political subdivision of the State of California ( "Subordinate Lender ") in favor of HOUSING TRUST SILICON VALLEY, a California nonprofit public benefit corporation, (the "Senior Lender "). RECITALS: A. Concurrently herewith and in order to provide funds to the Owner in connection with the refinance of existing financing in connection with that certain real property described in Exhibit A attached hereto (the "Property "), Senior Lender is making a loan to Owner in the amount of $1,400,000 (the "Senior Loan "). The Senior Loan will be secured by a Deed of Trust with Assignment of Rents, Security Agreement and Fixture Filing (the "Senior Deed of Trust ") to be recorded against the Owner's interest in the Property in the Official Records of Petaluma County concurrently herewith. In addition to the Senior Deed of Trust, a Use Restriction Agreement (the "Use Restriction Agreement ") will also be recorded against the Owner's interest in the Property in the Official Records of Petaluma County concurrently herewith. The Senior Deed of Trust, the Use Restriction Agreement, together with any other documents or instruments to be recorded in connection with the Senior Loan are hereinafter collectively referred to as the "Senior Encumbrances." The Senior Encumbrances, together with the separate unrecorded loan documents executed by Owner in connection with the Senior Loan, shall be collectively referred to herein as the "Senior Loan Documents." The Property, together with all improvements thereon, all personal property used relative thereto, and all other "Property" secured by the Senior Deed of Trust (as more particularly described in the Senior Deed of Trust) is collectively referred to as the "Collateral." Subordination Agreement old elm village 1 B. On or about January 31, 2001, Subordinate Lender made a loan (the "Subordinate Loan ") to Owner in the amount of $1,730,475. The Subordinate Loan is secured by a deed of trust with assignment of rents (the "Subordinate Deed of Trust ") dated January 31, 2001 and recorded on January 31, 2001 against the Property in the Official Records of Petaluma County as Instrument No. 2001010768 by Owner in connection with the Subordinate Loan, shall be collectively referred to herein as the "Subordinate Loan Documents." C. It is a condition precedent to making the Senior.Loan, that the Senior Loan Documents and Senior Lender's' rights to payments under the Senior Loan Documents shall unconditionally be and remain at all times a lien or charge upon the Collateral, prior and superior to the Subordinate Loan Documents and any and all rights, restrictions, agreements, liens and charges in favor of Subordinate Lender and the Subordinate Lender's right to payments under the Subordinate Loan Documents. D. Senior Lender is willing to make its Senior Loan, provided the condition precedent described above is satisfied and that Subordinate Lender will specifically and unconditionally subordinate the Subordinate Loan Documents, the Subordinate Lender's right to payments under the Subordinate Loan Documents, and any and all other rights, restrictions, agreements, liens and charges in favor of Subordinate Lender to the liens and charges of the Senior Loan Documents and Senior Lender's right to payments under the Senior Loan Documents. It is to the mutual benefit of the parties hereto that the Senior Lender make the Senior Loan, and Subordinate Lender and Owner are willing to provide the subordination required by the condition precedent described above. AGREEMENT NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Senior Lender and Subordinate Lender do herein and hereby agree as follows: 1. Certification by Subordinate Lender. Subordinate Lender hereby certifies and warrants to Senior Lender that the following information is true and complete as of the date hereof: (a) The Subordinate Deed of Trust is the only document securing the Subordinate Loan and /or recorded against the Property in connection with the Subordinate Loan; (b) Subordinate Lender has never assigned any interest (whether collateral or otherwise) in or to the Subordinate Deed of Trust; (c) No default or event of default has been declared by Subordinate Lender under the Subordinate Loan Documents; (d) The term of the Subordinate Loan does not end before the stated term of the Senior Loan; and (e) The Subordinate Loan Documents have not been amended, modified, assigned or superseded. 2. Reliance. Senior Lender would not make the Senior Loan to the Borrower without this Agreement. Accordingly, Subordinate Lender intentionally and unconditionally enters into the covenants and agreements as set forth herein, and understands that, in reliance upon and in consideration of such covenants and agreements, the Senior Loan shall be made and, as part and parcel thereof, specific Subordination Agreement old elm village 2 monetary and other obligations have been, are being and shall be entered into which would not be made or entered into but for such reliance. 3. Priority of Senior Loan and Senior Deed of Trust. Notwithstanding the time of the recording of the Senior Deed of Trust, and notwithstanding anything to the contrary whatsoever contained in the Subordinate Deed of Trust, all of Subordinate Lender's rights and remedies under the Subordinate Loan Documents are hereby expressly made subject and subordinate in all respects including, without limitation, subordinate in lien and subordinate in right to payment to the Senior Loan Documents (including, without limitation, any future advances by Senior Lender to protect the Collateral or Senior Lender's lien thereon or rights thereto), and to all of Senior Lender's rights (including, without limitation, rights to receive payments) and remedies under the Senior Loan Documents and to the Collateral. In addition, in furtherance of and without limiting the foregoing, Subordinate Lender agrees that: (a) All rights of Subordinate Lender under the Subordinate Deed of Trust and under any of the other Subordinate Loan Documents in and to the Collateral and the proceeds thereof (including, without limitation, any rights with respect to leases, rents, insurance proceeds and condemnation awards) shall be expressly subject and subordinate to the rights of Senior Lender in and to the Collateral and the proceeds thereof (including, without limitation, any rights with respect to leases, rents, insurance proceeds and condemnation), and to any other expenses incurred under and as permitted in the Senior Loan Documents. (b) Subordinate Lender declares, agrees and acknowledges that Subordinate Lender consents to and approves all provisions of the Senior Deed of Trust and each of the other Senior Loan Documents. (c) Subordinate Lender hereby expressly consents to and authorizes, at the option of Senior Lender and without any further consent of or notice to Subordinate Lender, the amendment, extension, restatement, refinance, or other modification, in whole or in part, of all or any of the Senior Loan Documents. Notwithstanding any provision of this Agreement to the contrary, any reference herein to the "Senior Deed of Trust," or "Senior Loan Documents" is deemed to include and refer to any renewal, replacement, amendment, modification, refinancing, extension, substitution or consolidation thereof whether by Senior Lender, any successor or assign of Senior Lender, or any other person or entity. Notwithstanding the foregoing, the Senior Lender shall not modify or amend the Senior Loan Documents to increase the principal amount of the Senior Loan without the prior written consent of the Subordinate Lender. Senior Lender need not obtain the prior consent of the Subordinate Lender for advancing payment for taxes, insurance or other necessary expenses to maintain or protect the Collateral or Senior Lender's security interest therein. (d) Subordinate Lender hereby agrees that Subordinate Lender shall not agree to, and the Subordinate Deed of Trust shall not be deemed to be evidence of approval by Senior Lender of, any additional encumbrance on the Collateral (other than deeds of trust in favor of the "Senior Lenders ", as defined in the Senior Loan Documents) or any increases in the amount evidenced by the Subordinate Deed of Trust. No further advances shall be provided by Subordinate Lender to the Borrower whether pursuant to the Subordinate Deed of Trust or otherwise without Senior Lender's prior consent. (e) If, notwithstanding the provisions of this Agreement, any payment, distribution or security of any character (whether in cash, securities or other property) shall be received by the Subordinate Lender out of or in connection with the Subordinate Loan Documents before all of the Senior Loan shall have been paid in full, such payment, distribution or security, as applicable, shall not be commingled with any asset of Subordinate Lender, shall be held in trust for the benefit of, and shall be delivered over or delivered and transferred to, Senior Lender or its representative, for application to the Subordination Agreement old elm village 3 -7 payment of the Senior Loan remaining unpaid, until all of the Senior Loan shall have been paid in full. Subordinate Lender is not and shall not be permitted to receive or apply payments against the Subordinate Loan until such time as all obligations under the Senior Loan Documents have been fully satisfied and the Senior Loan has been paid in full (the "Release Event"). (f) Subordinate Lender shall be bound by any consents or waivers made by Senior Lender, and Subordinate Lender, hereby waives any and all rights of consent or approval with regard to. any matters covered by or under the terms of the Senior Loan Documents. (g) Subordinate Lender hereby agrees to deliver to the Senior Lender copies of any and all notices (including, without limitation, any default notices) received, or given, by it or its agents in connection with the Subordinate Deed of Trust. Subordinate Lender hereby grants to the Senior Lender the right, but not the obligation, to cure any default under the Subordinate Deed of Trust within thirty (30) days of Subordinate Lender's delivery of a default notice to the Senior Lender, and the Subordinate Lender also accepts all such performance by the Senior Lender. 4. Certain Actions Regarding Subordinate Deed of Trust. Until the Release Event has occurred, Subordinate Lender shall not take any of the following actions with respect to the Subordinate Deed of Trust, without the prior written consent of Senior Lender: (a) Declare a default under the Subordinate Loan Documents, accelerate all or any portion of any monies due pursuant to the Subordinate Loan Documents, or exercise any of its remedies under the Subordinate Loan Documents; (b) Commence any legal proceedings against the Borrower; (c) Consent to any amendment, extension, restatement, replacement, supplement, increase, consolidation, renewal or modification of the Subordinate Loan Documents; (d) Assign, convey, sell, hypothecate or transfer any interest whatsoever in the Subordinate Loan or the Subordinate Deed of Trust directly or indirectly (including, without limitation, by means of a transfer of ownership interests in Subordinate Lender), whether such interest be collateral in nature (e.g., pledges or grants of security interests) or absolute; (e) Commence or consent to any bankruptcy, insolvency, reorganization or similar proceeding by or against the Borrower; or (f) Accept any payments under the Subordinate Loan Documents. Any consent required of Senior Lender in this Agreement may be given or withheld in the sole and absolute discretion of Senior Lender. The Subordinate Lender shall have no rights to any proceeds of a refinancing of the Senior Loan in which rights under the Senior Loan Documents are sold or transferred or the Senior Loan is replaced, until such time as the entire indebtedness evidenced or secured by the Senior Loan Documents and all other sums evidenced or secured by the Senior Loan Documents have been paid in full. The Subordinate Lender acknowledges and agrees that any assignment or assignments of the Senior Loan and /or the Senior Loan Documents in connection with a sale by the Senior Lender of the Senior Loan (by itself or with other loans) shall not be deemed to be a repayment of the Senior Loan for purposes of this Agreement. Subordination Agreement old elm village 4 Bankruptcy Issues. (a) This Agreement shall be applicable both before and after commencement, whether voluntary or involuntary, of any case by or against the Borrower under the United States Bankruptcy Code (as amended from time to time, the "Bankruptcy Code ") and all references herein to the Borrower shall be deemed to apply to the Borrower as a debtor -in- possession and to any trustee in bankruptcy for the estate of the Borrower. (b) In the event the Senior Lender is required under any bankruptcy or other law to return to the Borrower, Borrower's bankrupt estate, any third party or any trustee, receiver or other similar representative of the Borrower any payment or distribution of assets, whether in cash, property or securities, including, without limitation any Collateral or any proceeds of the Collateral previously received by the Senior Lender on account of the Senior Loan Documents (a "Reinstatement Distribution "), then to the maximum extent permitted by law, this Agreement and the subordination of the Subordinate Note shall be reinstated with respect to any such Reinstatement Distribution. The Senior Lender shall not be required to contest its obligation to return such Reinstatement Distribution. 6. Senior Lender. Senior hereby agrees to deliver to the Subordinate Lender copies of any default notice given by it or its agents in connection with the Senior Deed of Trust. Senior Lender hereby grants to the Subordinate Lender the right, but not the obligation, to cure any default under the Senior Deed of Trust within thirty (30) days of Senior Lender's delivery of a default notice to the Subordinate Lender, and the Senior Lender also accepts all such performance by the Subordinate Lender Miscellaneous Provisions. (a) Entire Agreement; Amendment; Severability. This Agreement contains the entire agreement between the parties respecting the matters herein set forth and supersedes all prior agreements, whether written or oral, between the parties respecting such matters. Any amendments or modifications hereto, in order to be effective, shall be in writing and executed by the parties hereto. A determination that any provision of this Agreement is unenforceable or invalid shall not affect the enforceability or validity of such provision as it may apply to any other persons or circumstances. (b) Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except to the extent that the applicability of any of such laws may now or hereafter be preempted by federal law, in which case such federal law shall so govern and be controlling. Subordinate Lender, to the full extent permitted by law, hereby knowingly, intentionally and voluntarily, with and upon the advice of competent counsel, (i) submits to personal jurisdiction in the State of California over any suit, action or proceeding by any person arising from or relating to this Agreement, (ii) agrees that any such action, suit or proceeding may be brought in any state or federal court of competent jurisdiction sitting in San Jose, California, (iii) submits to the jurisdiction of such courts, and (iv) to the fullest extent permitted by law, agrees that it will not bring any action, suit or proceeding in any other forum (but nothing herein shall affect the right of Senior Lender to bring any action, suit or proceeding in any other forum). Subordinate Lender hereby further irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this agreement sitting in San Jose, California, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. (c) Assigns. The terms, provisions and conditions of this Agreement shall be binding upon Subordinate Lender, Senior Lender and the successors and assigns of either; provided, Subordination Agreement old elm village however, nothing in this Section 6(c) shall be deemed to limit or diminish in any respect Subordinate Lender's obligations pursuant to Section 4(d) above. (d) Further Assurances. Subordinate Lender agrees, within ten (10) days after request by Senior Lender, to execute such other documents (whether in recordable form or otherwise) as may be reasonably requested by Senior Lender to further evidence the subordination and other agreements effectuated hereby. (e) No Third Party Beneficiaries; Securitization. It is expressly agreed and understood that each and every certificate and agreement of Subordinate Lender in this Agreement are for the benefit of the Senior Lender and subsequent owners or holder of the Senior Loan Documents. No third party shall be entitled to rely on any agreements or certifications provided herein to any extent whatsoever. (f) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more additional signature pages. (g) Estoppel Certificates. Subordinate Lender agrees that it shall, from time to time, upon the demand of the Senior Lender, famish the Senior Lender with estoppel certificates pursuant to which the Subordinate Lender shall certify to the Senior Lender the matters set forth in Section 1 above and such other matters as Senior Lender may reasonably require. (h) No Partnership. This Agreement shall not in any respect be interpreted, deemed or construed as making Subordinate Lender a partner or joint venturer with any other person or entity, including, without limitation, Senior Lender or Borrower, nor shall it be construed as making Subordinate Lender the agent or representative of the Senior Lender or Borrower nor the Senior Lender or Borrower the agent or representative of Subordinate Lender. G) Severability. In the event that any provision of this Agreement or the application hereof to any party hereto shall, to any extent, be invalid or unenforceable, under any applicable statute, regulation or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute, regulation or rule of law, and the remainder of this Agreement and the application of any such invalid or unenforceable provisions to parties, jurisdictions or circumstances other than to whom or to which it is held, invalid or unenforceable, shall not be affected thereby nor shall same affect the validity of enforceability of any other provision of this Agreement. 0) Conflict. In the event of any conflict between the provisions of this Agreement on the one hand, and the Subordinate Deed of Trust on the other hand, the provisions of this Agreement shall control. [signatures on following pages] Subordination Agreement old elm village IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date hereinabove written. Subordinate Lender: a By: _ Name: Its: 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 before me, , personally (here insert name and title of the officer) 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 signatures) 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: (This area for notary stamp) Subordination Agreement old elm village EXHIBIT A (Legal Description) The Property referred to herein is situated in the County of Sonoma, City of Petaluma, State of California, and is described as follows: PARCEL ONE: ALL THAT REAL PROPERTY SITUATED IN THE CITY OF PETALUMA, COUNTY OF SONOMA, STATE OF CALIFORNIA BEING PORTIONS OF LOTS 579 AND 580 AS SAID LOTS ARE DELINEATED ON THE OFFICIAL MAP OF THE CITY OF PETALUMA RECORDED IN BOOK 3 OF MAPS AT PAGE 1, SONOMA COUNTY RECORDS, SAID PORTIONS BEING PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A 3/4" IRON PIPE TAGGED LS 5087, INTENDED TO MARK THE COMMON NORTHERLY CORNER OF LOTS 577 AND 580 AS SAID LOTS ARE DELINEATED ON THE OFFICIAL MAP OF THE CITY OF PETALUMA RECORDED IN BOOK 3 OF MAPS AT PAGE 1, SONOMA COUNTY RECORDS, AS SAID IRON PIPE MONUMENT IS SHOWN ON THAT "RECORD OF SURVEY" RECORDED IN BOOK 571 OF MAPS AT PAGES 13 AND 14, SONOMA COUNTY RECORDS. SAID MONUMENT ALSO LYING ON THE SOUTHERLY SIDE OF'PAYRAN STREET'. A PUBLIC STREET AS DEEDED TO THE CITY OF PETALUMA AND DESCRIBED BY DEED RECORDED IN BOOK 1788 OF OFFICIAL RECORDS AT PAGE 876, SONOMA COUNTY RECORDS; THENCE FROM SAID POINT OF BEGINNING AND ALONG SAID SOUTHERLY LINE OF'PAYRAN STREET' AND THE NORTHERLY LINE OF SAID LOT 580, SOUTH 89° 43' 20" EAST, 242.94 FEET (74.047 METERS) TO A 3/4" IRON PIPE TAGGED LS 5087 MARKING A POINT IN A LINE PARALLEL WITH AND DISTANT 22.50 FEET (6.858 METERS) MEASURED AT RIGHT ANGLES, FROM THE CENTERLINE OF THE PETALUMA AND SANTA ROSA RAILROAD COMPANY'S MAIN TRACK, AS IT FORMERLY EXISTED; THENCE SOUTH 030 54'30" EAST, 308.90 FEET (94.153 METERS) ALONG SAID PARALLEL LINE. TO A 3/4" IRON PIPE TAGGED LS 5087: THENCE CONTINUING ALONG SAID PARALLEL LINE, SOUTH 03° 54' 30' EAST, 277.47 FEET (84.573 METERS) TO A 3/4" IRON PIPE TAGGED LS 5087 AND FROM WHICH IRON PIPE A 1/2" IRON PIPE TAGGED LS 2798 BEARS SOUTH 62'30'40" WEST, 0.49 FEET (0.150 METERS) (SAID 1/2" IRON PIPE IS SHOWN ON AN UNRECORDED "PLOT OF SURVEY" PREPARED BY RICHARD S. HOGAN, DATED 07/12/63, REVISED 07/02/64); THENCE CONTINUING ALONG SAID PARALLEL LINE, ALONG THE ARC OF A CURVE TO THE LEFT, TANGENT WITH THE LAST PRECEDING COURSE, WITH A RADIUS OF 2842.33 FEET (866.342 METERS) THROUGH A CENTRAL ANGLE OF 04° 22' 00', AN ARC LENGTH OF 216.62 FEET (66.026 METERS) TO THE SOUTHEASTERLY CORNER OF "PARCEL THREE" DESCRIBED IN THAT DEED TO BURBANK HOUSING DEVELOPMENT CORPORATION, A CALIFORNIA CORPORATION RECORDED UNDER DOCUMENT NUMBER 1995 - 0049209, SONOMA COUNTY RECORDS, AND FROM WHICH POINT A 1/2" IRON PIPE TAGGED LS 2798 BEARS SOUTH 18° 20'55" WEST. 0.52 FEET (0.158 METERS); THENCE ALONG THE SOUTHERLY LINE OF SAID LANDS OF BURBANK HOUSING DEVELOPMENT CORPORATION, NORTH 88° 48' 25" WEST, 230.59 FEET (70.285 METERS) TO A 3/4" IRON PIPE TAGGED LS 5087, MARKING A POINT IN THE WESTERLY LINE OF THE LANDS CONVEYED TO MAX POEHLMANN AND NATHAN C. THOMPSON BY DEED RECORDED IN BOOK 225 OF OFFICIAL RECORDS AT PAGE 249, SONOMA COUNTY RECORDS. SAID POINT ALSO BEING ON THE COMMON LINE OF LOTS 580 AND 581 AS SHOWN ON THE HEREINABOVE REFERRED TO OFFICIAL MAP OF THE CITY OF PETALUMA; THENCE ALONG SAID COMMON LINE, NORTH 12° 48'38" WEST, 176.07 FEET (53.668 METERS), TO THE NORTHEASTERLY CORNER OF SAID LOT 581 AND THE SOUTHEASTERLY CORNER OF THAT PARCEL GRANTED TO BURBANK HOUSING DEVELOPMENT CORPORATION BY TAX DEED RECORDED UNDER DOCUMENT NUMBER 1999- 0014368. SONOMA COUNTY RECORDS; THENCE SOUTH 89° 16'22" WEST, 204.50 FEET (62.332 METERS), ALONG THE NORTHERLY LINE OF SAID LOT 581, TO THE NORTHWESTERLY CORNER OF SAID LOT 581 AND FROM WHICH POINT A LEAD PLUG AND BRASS DISC MARKED LS 5087 BEARS NORTH 12° 48' 38" WEST, 10.22 FEET (3.115 METERS); THENCE ALONG THE WESTERLY LINE OF THE AFORESAID LOT 580 AND THE EASTERLY LINE OF PETALUMA BOULEVARD NORTH, A PUBLIC STREET, NORTH 12° 46'38" WEST, 10.22 FEET (3.115 METERS), TO SAID LEAD PLUG AND BRASS DISC MARKED LS 5087; THENCE CONTINUING ALONG SAID WESTERLY LINE OF SAID LOT 580, NORTH 12° 48'38" WEST 48.88 FEET (14.899 METERS) TO A 3/4" IRON PIPE TAGGED Page 4 R.V. NAT8 /20/13 Order No. 54801-1365197-15 LS 5087, MARKING A POINT THAT BEARS SOUTH 12° 48'38" EAST, 239.00 FEET (72.847 METERS) FROM THE COMMON WESTERLY CORNER OF LOTS 578 AND 579 AS SHOWN ON SAID ORIGINAL MAP OF THE CITY OF PETALUMA; THENCE NORTH 88° 44' 24' EAST, 204.50 FEET (62.332 METERS) TO THE WESTERLY LINE OF THE HEREINABOVE DESCRIBED LANDS OF POEHLMANN AND THOMPSON; THENCE ALONG SAID WESTERLY LINE, NORTH 12'48'38" WEST, 141.67 FEET (43.181 METERS) TO A 3/4" IRON PIPE TAGGED LS 5087 MARKING THE SOUTHWESTERLY CORNER OF THE LANDS DESCRIBED IN THOSE QUIT CLAIM DEEDS RECORDED IN BOOK 351 OF OFFICIAL RECORDS AT PAGE 419 AND BOOK 352 OF OFFICIAL Subordination Agreement old elm village A -1 RECORDS AT PAGE 218, SONOMA COUNTY RECORDS; THENCE ALONG THE SOUTHERLY LINE OF THE LANDS DESCRIBED IN SAID QUIT CLAIM DEEDS. NORTH 88° 49'28" EAST, 117.57 FEET (35.835 METERS) TO A 3/4" IRON PIPE TAGGED LS 5087, MARKING A POINT ON THE COMMON LINE TO LOTS 579 AND 580 AS SHOWN ON SAID ORIGINAL MAP OF THE CITY OF PETALUMA; THENCE ALONG THE COMMON LINE TO LOTS 577, 578, 579 AND 580 AS SHOWN ON SAID ORIGINAL MAP OF THE CITY OF PETALUMA, NORTH 12° 17' 23' WEST, 436.13 FEET (132.932 METERS) TO THE POINT OF BEGINNING. PARCEL TWO: ALL THAT REAL PROPERLY SITUATED IN THE CITY OF PETALUMA, COUNTY OF SONOMA, STATE OF CALIFORNIA AND BEING A PORTION OF "PAYRAN STREET" AS SAID STREET IS SHOWN AND DELINEATED ON THAT "RECORD OF SURVEY" RECORDED IN BOOK 571 OF MAPS AT PAGES 13 &14, SONOMA COUNTY RECORDS, SAID PORTION BEING PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A 3/4" IRON PIPE MONUMENT TAGGED LS 5087 MARKING THE NORTHWESTERLY CORNER OF THE LANDS OF BURBANK HOUSING DEVELOPMENT CORPORATION, A CALIFORNIA CORPORATION AS DESCRIBED BY DEED RECORDED UNDER DOCUMENT NUMBER 1995 - 0049209, SONOMA COUNTY RECORDS AND DELINEATED ON THAT "RECORD OF SURVEY" RECORDED IN BOOK 571 OF MAPS AT PAGES 13 & 14, SONOMA COUNTY RECORDS; THENCE FROM SAID POINT OF BEGINNING, NORTH 00° 16'40" EAST, 31.70 FEET (9.662 METERS); NORTH 82° 3T1 4' EAST, 39.97 FEET (12.183 METERS); SOUTH 89° 43,20" EAST, 200.62 FEET (61.149 METERS); SOUTH 03° 54'30" EAST, 37.17 FEET (11.329 METERS), TO 3/4" IRON PIPE MONUMENT TAGGED LS 5087 MARKING THE NORTHEASTERLY CORNER OF SAID LANDS OF BURBANK HOUSING DEVELOPMENT CORPORATION; THENCE ALONG THE NORTHERLY LINE OF SAID LANDS OF BURBANK HOUSING DEVELOPMENT CORPORATION, NORTH 89° 43'20" WEST, 242.97 FEET (74.047 METERS), TO THE POINT OF BEGINNING. PARCEL THREE: AN EASEMENT FOR LANDSCAPE PURPOSES DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWESTERLY CORNER OF THE LANDS OF DIONICIO CASTELLO LOPEZ & ELISA AVALOS LOPEZ AS DESCRIBED BY DEED RECORDED UNDER DOCUMENT NUMBER 1996 - 0002715, SONOMA COUNTY RECORDS; THENCE ALONG THE NORTHERLY LINE OF SAID LANDS OF LOPEZ, NORTH 89° 15'22" EAST, 204.50 FEET (62.332 METERS) TO THE NORTHEASTERLY CORNER OF SAID LANDS OF LOPEZ; THENCE ALONG THE EASTERLY LINE OF SAID LANDS OF LOPEZ, SOUTH 12° 48' 38" EAST, 3.07 FEET (0.935 METERS); THENCE LEAVING SAID EASTERLY LINE SOUTH 89° 15'22- WEST, 204.5 FEET (62.332 METERS), TO A POINT ON THE WESTERLY LINE OF SAID LANDS OF LOPEZ; THENCE ALONG SAID WESTERLY LINE, NORTH 12'48'38" WEST 3.07 FEET (0.935 METERS), TO THE POINT OF BEGINNING. APN: 006 - 051 - 085 -000 Subordination Agreement old elm village A -2 0 ATTACHMENT #3 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: HOUSING TRUST SILICON VALLEY 95 S. Market St., Suite 610 San Jose, CA 95113 Attn: Multifamily Loan Dept. Ref: Old Elm Village (SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY) SUBORDINATION AGREEMENT (359 Payran Street, Petaluma, California) 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 ( "AGREEMENT "), is dated as of June 23, 2017 by BURBANK HOUSING DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation, owner of the real property ( "Owner" or "Borrower ") described on the attached Exhibit A (the "Property ") and The City of Petaluma, a political subdivision of the State of California ( "Subordinate Lender ") in favor of HOUSING TRUST SILICON VALLEY, a California nonprofit public benefit corporation, (the "Senior Lender "). RECITALS: A. Concurrently herewith and in order to provide funds to the Owner in connection with the refinance of existing financing in connection with that certain real property described in Exhibit A attached hereto (the "Property "), Senior Lender is making a loan to Owner in the amount of $1,400,000 (the "Senior Loan "). The Senior Loan will be secured by a Deed of Trust with Assignment of Rents, Security Agreement and Fixture Filing (the "Senior Deed of Trust ") to be recorded against the Owner's interest in the Property in the Official Records of Petaluma County concurrently herewith. In addition to the Senior Deed of Trust, a Use Restriction Agreement (the "Use Restriction Agreement ") will also be recorded against the Owner's interest in the Property in the Official Records of Petaluma County concurrently herewith. The Senior Deed of Trust, the Use Restriction Agreement, together with any other documents or instruments to be recorded in connection with the Senior Loan are hereinafter collectively referred to as the "Senior Encumbrances." The Senior Encumbrances, together with the separate unrecorded loan documents executed by Owner in connection with the Senior Loan, shall be collectively referred to herein as the "Senior Loan Documents." The Property, together with all improvements thereon, all personal property used relative thereto, and all other "Property" secured by the Senior Deed of Trust (as more particularly described in the Senior Deed of Trust) is collectively referred to as the "Collateral." Subordination Agreement old elm village 0 B. On or about January 31, 2001, Subordinate Lender made a loan (the "Subordinate Loan ") to Owner in the amount of $800,000. The Subordinate Loan is secured by a deed of trust with assignment of rents (the "Subordinate Deed of Trust ") dated January 31, 2001 and recorded on January 31, 2001 against the Property in the Official Records of Petaluma County as Instrument No. 2001010767 by Owner in connection with the Subordinate Loan, shall be collectively referred to herein as the "Subordinate Loan Documents." C. It is a condition precedent to making the Senior Loan, that the Senior Loan Documents and Senior Lender's' rights to payments under the Senior Loan Documents shall unconditionally be and remain at all times a lien or charge upon the Collateral, prior and superior to the Subordinate Loan Documents and any and all rights, restrictions, agreements, liens and charges in favor of Subordinate Lender and the Subordinate Lender's right to payments under the Subordinate Loan Documents. D. Senior Lender is willing to make its Senior Loan, provided the condition precedent described above is satisfied and that Subordinate Lender will specifically and unconditionally subordinate the Subordinate Loan Documents, the Subordinate Lender's right to payments under the Subordinate Loan Documents, and any and all other rights, restrictions, agreements, liens and charges in favor of Subordinate Lender to the liens and - charges of the Senior Loan Documents and Senior Lender's right to payments under the Senior Loan Documents. It is to the mutual benefit of the parties hereto that the Senior Lender make the Senior Loan, and Subordinate Lender and Owner are willing to provide the subordination required by the condition precedent described above. AGREEMENT NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Senior Lender and Subordinate Lender do herein and hereby agree as follows: 1. Certification by Subordinate Lender. Subordinate Lender hereby certifies and warrants to Senior Lender that the following information is true and complete as of the date hereof: (a) The Subordinate Deed of Trust is the only document securing the Subordinate Loan and/or recorded against the Property in connection with the Subordinate Loan; (b) Subordinate Lender has never assigned any interest (whether collateral or otherwise) in or to the Subordinate Deed of Trust; (c) No default or event of default has been declared by Subordinate Lender under the Subordinate Loan Documents; (d) The term of the Subordinate Loan does not end before the stated term of the Senior Loan; and (e) The Subordinate Loan Documents have not been amended, modified, assigned or superseded. 2. Reliance, Senior Lender would not make the Senior Loan to the Borrower without this Agreement. Accordingly, Subordinate Lender intentionally and unconditionally enters into the covenants and agreements as set forth herein, and understands that, in reliance upon and in consideration of such covenants and agreements, the Senior Loan shall be made and, as part and parcel thereof, specific Subordination Agreement old elm village 2 16 monetary and other obligations have been, are being and shall be entered into which would not be made or entered into but for such reliance. 3. Priority of Senior Loan and Senior Deed of Trust. Notwithstanding the time of the recording of the Senior Deed of Trust, and notwithstanding anything to the contrary whatsoever contained in the Subordinate Deed of Trust, all of Subordinate Lender's rights and remedies under the Subordinate Loan Documents are hereby expressly made subject and subordinate in all respects including, without limitation, subordinate in lien and subordinate in right to payment to the Senior Loan Documents (including, without limitation, any future advances by Senior Lender to protect the Collateral or Senior Lender's lien thereon or rights thereto), and to all of Senior Lender's rights (including, without limitation, rights to receive payments) and remedies under the Senior Loan Documents and to the Collateral. In addition, in furtherance of and without limiting the foregoing, Subordinate Lender agrees that: (a) All rights of Subordinate Lender under the Subordinate Deed of Trust and under any of the other Subordinate Loan Documents in and to the Collateral and the proceeds thereof (including, without limitation, any rights with respect to leases, rents, insurance proceeds and condemnation awards) shall be expressly subject and subordinate to the rights of Senior Lender in and to the Collateral and the proceeds thereof (including, without limitation, any rights with respect to leases, rents, insurance proceeds and condemnation), and to any other expenses incurred under and as permitted in the Senior Loan Documents. (b) Subordinate Lender declares, agrees and acknowledges that Subordinate Lender consents to and approves all provisions of the Senior Deed of Trust and each of the other Senior Loan Documents. (c) Subordinate Lender hereby expressly consents to and authorizes, at the option of Senior Lender and without any further consent of or notice to Subordinate Lender, the amendment, extension, restatement, refinance, or other modification, in whole or in part, of all or any of the Senior Loan Documents. Notwithstanding any provision of this Agreement to the contrary, any reference herein to the "Senior Deed of Trust," or "Senior Loan Documents" is deemed to include and refer to any renewal, replacement, amendment, modification, refinancing, extension, substitution or consolidation thereof whether by Senior Lender, any successor or assign of Senior Lender, or any other person or entity. Notwithstanding the foregoing, the Senior Lender shall not modify or amend the Senior Loan Documents to increase the principal amount of the Senior Loan without the prior written consent of the Subordinate Lender. Senior Lender need not obtain the prior consent of the Subordinate Lender for advancing payment for taxes, insurance or other necessary expenses to maintain or protect the Collateral or Senior Lender's security interest therein. (d) Subordinate Lender hereby agrees that Subordinate Lender shall not agree to, and the Subordinate Deed of Trust shall not be deemed to be evidence of approval by Senior Lender of, any additional encumbrance on the Collateral (other than deeds of trust in favor of the "Senior Lenders ", as defined in the Senior Loan Documents) or any increases in the amount evidenced by the Subordinate Deed of Trust. No further advances shall be provided by Subordinate Lender to the Borrower whether pursuant to the Subordinate Deed of Trust or otherwise without Senior Lender's prior consent. (e) If, notwithstanding the provisions of this Agreement, any payment, distribution or security of any character (whether in cash, securities or other property) shall be received by the Subordinate Lender out of or in connection with the Subordinate Loan Documents before all of the Senior Loan shall have been paid in full, such payment, distribution or security, as applicable, shall not be commingled with any asset of Subordinate Lender, shall be held in trust for the benefit of, and shall be delivered over or delivered and transferred to, Senior Lender or its representative, for application to the subordination Agreement old elm village 3 1I payment of the Senior Loan remaining unpaid, until all of the Senior Loan shall have been paid in full. Subordinate Lender is not and shall not be permitted to receive or apply payments against the Subordinate Loan until such time as all obligations under the Senior Loan Documents have been fully satisfied and the Senior Loan has been paid in full (the "Release Event "). (f) Subordinate Lender shall be bound by any consents or waivers made by Senior Lender, and Subordinate Lender, hereby waives any and all rights of consent or approval with regard to any matters covered by or under the terms of the Senior Loan Documents. (g) Subordinate Lender hereby agrees to deliver to the Senior Lender copies of any and all notices (including, without limitation, any default notices) received, or given, by it or its agents in connection with the Subordinate Deed of Trust. Subordinate Lender hereby grants to the Senior Lender the right, but not the obligation, to cure any default under the Subordinate Deed of Trust within thirty (30) days of Subordinate Lender's delivery of a default notice to the Senior Lender, and the Subordinate Lender also accepts all such performance by the Senior Lender. 4. Certain Actions Regarding Subordinate Deed of Trust. Until the Release Event has occurred, Subordinate Lender shall not take any of the following actions with respect to the Subordinate Deed of Trust, without the prior written consent of Senior Lender: (a) Declare a default under the Subordinate Loan Documents, accelerate all or any portion of any monies due pursuant to the Subordinate Loan Documents, or exercise any of its remedies under the Subordinate Loan Documents; (b) Commence any legal proceedings against the Borrower; (c) Consent to any amendment, extension, restatement, replacement, supplement, increase, consolidation, renewal or modification of the Subordinate Loan Documents; (d) Assign, convey, sell, hypothecate or transfer any interest whatsoever in the Subordinate Loan or the Subordinate Deed of Trust directly or indirectly (including, without limitation, by means of a transfer of ownership interests in Subordinate Lender), whether such interest be collateral in nature (e.g., pledges or grants of security interests) or absolute; (e) Commence or consent to any bankruptcy, insolvency, reorganization or similar proceeding by or against the Borrower; or (f) Accept any payments under the Subordinate Loan Documents. Any consent required of Senior Lender in this Agreement may be given or withheld in the sole and absolute discretion of Senior Lender. The Subordinate Lender shall have no rights to any proceeds of a refinancing of the Senior Loan in which rights under the Senior Loan Documents are sold or transferred or the Senior Loan is replaced, until such time as the entire indebtedness evidenced or secured by the Senior Loan Documents and all other sums evidenced or secured by the Senior Loan Documents have been paid in full. The Subordinate Lender acknowledges and agrees that any assignment or assignments of the Senior Loan and /or the Senior Loan Documents in connection with a sale by the Senior Lender of the Senior Loan (by itself or with other loans) shall not be deemed to be a repayment of the Senior Loan for purposes of this Agreement. Subordination Agreement old elm village 4 6 Bankruptcy Issues. (a) This Agreement shall be applicable both before and after commencement, whether voluntary or involuntary, of any case by or against the Borrower under the United States Bankruptcy Code (as amended from time to time, the "Bankruptcy Code ") and all references herein to the Borrower shall be deemed to apply to the Borrower as a debtor -in- possession and to any trustee in bankruptcy for the estate of the Borrower. (b) In the event the Senior Lender is required under any bankruptcy or other law to return to the Borrower, Borrower's bankrupt estate, any third party or any trustee, receiver or other similar representative of the Borrower any payment or distribution of assets, whether in cash, property or securities, including, without limitation any Collateral or any proceeds of the Collateral previously received by the Senior Lender on account of the Senior Loan Documents (a "Reinstatement Distribution "), then to the maximum extent permitted by law, this Agreement and the subordination of the Subordinate Note shall be reinstated with respect to any such Reinstatement Distribution. The Senior Lender shall not be required to contest its obligation to return such Reinstatement Distribution. 6. Senior Lender. Senior hereby agrees to deliver to the Subordinate Lender copies of any default notice given by it or its agents in connection with the Senior Deed of Trust. Senior Lender hereby grants to the Subordinate Lender the right, but not the obligation, to cure any default under the Senior Deed of Trust within thirty (30) days of Senior Lender's delivery of a default notice to the Subordinate Lender, and the Senior Lender also accepts all such performance by the Subordinate Lender Miscellaneous Provisions. (a) Entire Agreement; Amendment; Severability. This Agreement contains the entire agreement between the parties respecting the matters herein set forth and supersedes all prior agreements, whether written or oral, between the parties respecting such matters. Any amendments or modifications hereto, in order to be effective, shall be in writing and executed by the parties hereto. A determination that any provision of this Agreement is unenforceable or invalid shall not affect the enforceability or validity of such provision as it may apply to any other persons or circumstances. (b) Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of California, except to the extent that the applicability of any of such'laws may now or hereafter be preempted by federal law, in which case such federal law shall so govern and be controlling. Subordinate Lender, to the full extent permitted by law, hereby knowingly, intentionally and voluntarily, with and upon the advice of competent counsel, (i) submits to personal jurisdiction in the State of California over any suit, action or proceeding by any person arising from or relating to this Agreement, (ii) agrees that any such action, suit or proceeding may be brought in any state or federal court of competent jurisdiction sitting in San Jose, California, (iii) submits to the jurisdiction of such courts, and (iv) to the fullest extent permitted by law, agrees that it will not bring any action, suit or proceeding in any other forum (but nothing herein shall affect the right of Senior Lender to bring any action, suit or proceeding in any other forum). Subordinate Lender hereby further irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this agreement sitting in San Jose, California, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. (c) Assigns. The terms, provisions and conditions of this Agreement shall be binding upon Subordinate Lender, Senior Lender and the successors and assigns of either; provided, Subordination Agreement old elm village b 1011 however, nothing in this Section 6(c) shall be deemed to limit or diminish in any respect Subordinate Lender's obligations pursuant to Section 4(d) above. (d) Further Assurances. Subordinate Lender agrees, within ten (10) days after request by Senior Lender, to execute such other documents (whether in recordable form or otherwise) as may be reasonably requested by Senior Lender to further evidence the subordination and other agreements effectuated hereby. (e) No Third Party Beneficiaries; Securitization. It is expressly agreed and understood that each and every certificate and agreement of Subordinate Lender in this Agreement are for the benefit of the Senior Lender and subsequent owners or holder of the Senior Loan Documents. No third party shall be entitled to rely on any agreements or certifications provided herein to any extent whatsoever. (f) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature of this Agreement may be detached from any counterpart of this Agreement without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Agreement identical in form hereto but having attached to it one or more additional signature pages. (g) Estoppel Certificates. Subordinate Lender agrees that it shall, from time to time, upon the demand of the Senior Lender, furnish the Senior Lender with estoppel certificates pursuant to which the Subordinate Lender shall certify to the Senior Lender the matters set forth in Section 1 above and such other matters as Senior Lender may reasonably require. (h) No Partnership. This Agreement shall not in any respect be interpreted, deemed or construed as making Subordinate Lender a partner or joint venturer with any other person or entity, including, without limitation, Senior Lender or Borrower, nor shall it be construed as making Subordinate Lender the agent or representative of the Senior Lender or Borrower nor the Senior Lender or Borrower the agent or representative of Subordinate Lender. (i) Severability. In the event that any provision of this Agreement or the application hereof to any party hereto shall, to any extent, be invalid or unenforceable, under any applicable statute, regulation or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute, regulation or rule of law, and the remainder of this Agreement and the application of any such invalid or unenforceable provisions to parties, jurisdictions or circumstances other than to whom or to which it is held, invalid or unenforceable, shall not be affected thereby nor shall same affect the validity of enforceability of any other provision of this Agreement. 0) Conflict. In the event of any conflict between the provisions of this Agreement on the one hand, and the Subordinate Deed of Trust on the other hand, the provisions of this Agreement shall control. [signatures on following pages] Subordination Agreement old elm village 6 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date hereinabove written. Subordinate Lender: a By: _ Name: Its: 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 before me, appeared who proved to me on the basis of satisf, subscribed to the within instrument and a his/her /their authorized capacity(ies), and person(s), or the entity upon behalf of which I certify under PENALTY OF PERJURY i paragraph is true and correct. WITNESS my hand and official seal. Signature: (This area for notary stamp) Subordination Agreement old elm village , personally (here insert name and title of the officer) ctory evidence to be the person(s) whose name(s) is /are knowledged to me that he /she /they executed the same in that by his /her /their signature(s) on the instrument the the person(s) acted, executed the instrument. nder the laws of the State of California that the foregoing EXHIBIT A (Legal Description) The Property referred to herein is situated in the County of Sonoma, City of Petaluma, State of California, and is described as follows: PARCEL ONE: ALL THAT REAL PROPERTY SITUATED IN THE CITY OF PETALUMA, COUNTY OF SONOMA, STATE OF CALIFORNIA BEING PORTIONS OF LOTS 579 AND 580 AS SAID LOTS ARE DELINEATED ON THE OFFICIAL MAP OF THE CITY OF PETALUMA RECORDED IN BOOK 3 OF MAPS AT PAGE 1, SONOMA COUNTY RECORDS, SAID PORTIONS BEING PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A 3/4" IRON PIPE TAGGED LS 5087, INTENDED TO MARK THE COMMON NORTHERLY CORNER OF LOTS 577 AND 580 AS SAID LOTS ARE DELINEATED ON THE OFFICIAL MAP OF THE CITY OF PETALUMA RECORDED IN BOOK 3 OF MAPS AT PAGE 1, SONOMA COUNTY RECORDS, AS SAID IRON PIPE MONUMENT IS SHOWN ON THAT "RECORD OF SURVEY" RECORDED IN BOOK 571 OF MAPS AT PAGES 13 AND 14, SONOMA COUNTY RECORDS. SAID MONUMENT ALSO LYING ON THE SOUTHERLY SIDE OF'PAYRAN STREET'. A PUBLIC STREET AS DEEDED TO THE CITY OF PETALUMA AND DESCRIBED BY DEED RECORDED IN BOOK 1788 OF OFFICIAL RECORDS AT PAGE 876, SONOMA COUNTY RECORDS; THENCE FROM SAID POINT OF BEGINNING AND ALONG SAID SOUTHERLY LINE OF'PAYRAN STREET' AND THE NORTHERLY LINE OF SAID LOT 580, SOUTH 89° 43' 20" EAST, 242.94 FEET (74.047 METERS) TO A 3/4" IRON PIPE TAGGED LS 5087 MARKING A POINT IN A LINE PARALLEL WITH AND DISTANT 22.50 FEET (6.858 METERS) MEASURED AT RIGHT ANGLES, FROM THE CENTERLINE OF THE PETALUMA AND SANTA ROSA RAILROAD COMPANY'S MAIN TRACK, AS IT FORMERLY EXISTED; THENCE SOUTH 03'54'30" EAST, 308.90 FEET (94.153 METERS) ALONG SAID PARALLEL LINE. TO A 3/4" IRON PIPE TAGGED LS 5087: THENCE CONTINUING ALONG SAID PARALLEL LINE, SOUTH 03° 54130t EAST, 277.47 FEET (84.573 METERS) TO A 3/4" IRON PIPE TAGGED LS 5087 AND FROM WHICH IRON PIPE A 1/2" IRON PIPE TAGGED LS 2798 BEARS SOUTH 62'30'40" WEST, 0.49 FEET (0.150 METERS) (SAID 1/2" IRON PIPE IS SHOWN ON AN UNRECORDED "PLOT OF SURVEY" PREPARED BY RICHARD S. HOGAN, DATED 07/12/63, REVISED 07/02/64); THENCE CONTINUING ALONG SAID PARALLEL LINE, ALONG THE ARC OF A CURVE TO THE LEFT, TANGENT WITH THE LAST PRECEDING COURSE, WITH A RADIUS OF 2842.33 FEET (866.342 METERS) THROUGH A CENTRAL ANGLE OF 04° 22' 00', AN ARC LENGTH OF 216.62 FEET (66.026 METERS) TO THE SOUTHEASTERLY CORNER OF "PARCEL THREE" DESCRIBED IN THAT DEED TO BURBANK HOUSING DEVELOPMENT CORPORATION, A CALIFORNIA CORPORATION RECORDED UNDER DOCUMENT NUMBER 1995- 0049209, SONOMA COUNTY RECORDS, AND FROM WHICH POINT A 1/2" IRON PIPE TAGGED LS 2798 BEARS SOUTH 18'20'55" WEST. 0.52 FEET (0.158 METERS); THENCE ALONG THE SOUTHERLY LINE OF SAID LANDS OF BURBANK HOUSING DEVELOPMENT CORPORATION, NORTH 88° 48'25" WEST, 230.59 FEET (70.285 METERS) TO A 3/4" IRON PIPE TAGGED LS 5087, MARKING A POINT IN THE WESTERLY LINE OF THE LANDS CONVEYED TO MAX POEHLMANN AND NATHAN C. THOMPSON BY DEED RECORDED IN BOOK 225 OF OFFICIAL RECORDS AT PAGE 249, SONOMA COUNTY RECORDS. SAID POINT ALSO BEING ON THE COMMON LINE OF LOTS 580 AND 581 AS SHOWN ON THE HEREINABOVE REFERRED TO OFFICIAL MAP OF THE CITY OF PETALUMA; THENCE ALONG SAID COMMON LINE, NORTH 12'48'38" WEST, 176.07 FEET (53.668 METERS), TO THE NORTHEASTERLY CORNER OF SAID LOT 581 AND THE SOUTHEASTERLY CORNER OF THAT PARCEL GRANTED TO BURBANK HOUSING DEVELOPMENT CORPORATION BY TAX DEED RECORDED UNDER DOCUMENT NUMBER 1999 - 0014368. SONOMA COUNTY RECORDS; THENCE SOUTH 89° 15'22" WEST, 204.50 FEET (62.332 METERS), ALONG THE NORTHERLY LINE OF SAID LOT 581, TO THE NORTHWESTERLY CORNER OF SAID LOT 581 AND FROM WHICH POINT A LEAD PLUG AND BRASS DISC MARKED LS 5087 BEARS NORTH 12° 48'38" WEST, 10.22 FEET (3.115 METERS); THENCE ALONG THE WESTERLY LINE OF THE AFORESAID LOT 580 AND THE EASTERLY LINE OF PETALUMA BOULEVARD NORTH, A PUBLIC STREET, NORTH 12° 46'38" WEST, 10.22 FEET (3.115 METERS), TO SAID LEAD PLUG AND BRASS DISC MARKED LS 5087; THENCE CONTINUING ALONG SAID WESTERLY LINE OF SAID LOT 580, NORTH 12° 48' 38" WEST 48.88 FEET (14.899 METERS) TO A 3/4" IRON PIPE TAGGED Page 4 Rev. NAT 8/20/13 Order No. 54801-1365197-15 LS 5087, MARKING A POINT THAT BEARS SOUTH 12° 48'38" EAST, 239.00 FEET (72.847 METERS) FROM THE COMMON WESTERLY CORNER OF LOTS 578 AND 579 AS SHOWN ON SAID ORIGINAL MAP OF THE CITY OF PETALUMA; THENCE NORTH 88° 44' 24' EAST, 204.50 FEET (62.332 METERS) TO THE WESTERLY LINE OF THE HEREINABOVE DESCRIBED LANDS OF POEHLMANN AND THOMPSON; THENCE ALONG SAID WESTERLY LINE, NORTH 12'48'38" WEST, 141.67 FEET (43.181 METERS) TO A 314" IRON PIPE TAGGED LS 5087 MARKING THE SOUTHWESTERLY CORNER OF THE LANDS DESCRIBED IN THOSE QUIT CLAIM DEEDS RECORDED IN BOOK 351 OF OFFICIAL RECORDS AT PAGE 419 AND BOOK 352 OF OFFICIAL Subordination Agreement old elm village A -1 RECORDS AT PAGE 218, SONOMA COUNTY RECORDS; THENCE ALONG THE SOUTHERLY LINE OF THE LANDS DESCRIBED IN SAID QUIT CLAIM DEEDS. NORTH 88° 49'28" EAST, 117.57 FEET (35.835 METERS) TO A 3/4" IRON PIPE TAGGED LS 5087, MARKING A POINT ON THE COMMON LINE TO LOTS 579 AND 580 AS SHOWN ON SAID ORIGINAL MAP OF THE CITY OF PETALUMA; THENCE ALONG THE COMMON LINE TO LOTS 577, 578, 579 AND 580 AS SHOWN ON SAID ORIGINAL MAP OF THE CITY OF PETALUMA, NORTH 12° 17' 23' WEST, 436.13 FEET (132.932 METERS) TO THE POINT OF BEGINNING. PARCEL TWO: ALL THAT REAL PROPERLY SITUATED IN THE CITY OF PETALUMA, COUNTY OF SONOMA, STATE OF CALIFORNIA AND BEING A PORTION OF "PAYRAN STREET' AS SAID STREET IS SHOWN AND DELINEATED ON THAT "RECORD OF SURVEY" RECORDED IN BOOK 571 OF MAPS AT PAGES 13 &14, SONOMA COUNTY RECORDS, SAID PORTION BEING PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A 3/4" IRON PIPE MONUMENT TAGGED LS 5087 MARKING THE NORTHWESTERLY CORNER OF THE LANDS OF BURBANK HOUSING DEVELOPMENT CORPORATION, A CALIFORNIA CORPORATION AS DESCRIBED BY DEED RECORDED UNDER DOCUMENT NUMBER 1995 - 0049209, SONOMA COUNTY RECORDS AND DELINEATED ON THAT "RECORD OF SURVEY" RECORDED IN BOOK 571 OF MAPS AT PAGES 13 & 14, SONOMA COUNTY RECORDS; THENCE FROM SAID POINT OF BEGINNING, NORTH 00° 16'40" EAST, 31.70 FEET (9.662 METERS); NORTH 82° 33'1 4' EAST, 39.97 FEET (12.183 METERS); SOUTH 89° 43,20" EAST, 200.62 FEET (61.149 METERS); SOUTH 03° 54'30" EAST, 37.17 FEET (11.329 METERS), TO 3/4" IRON PIPE MONUMENT TAGGED LS 5087 MARKING THE NORTHEASTERLY CORNER OF SAID LANDS OF BURBANK HOUSING DEVELOPMENT CORPORATION; THENCE ALONG THE NORTHERLY LINE OF SAID LANDS OF BURBANK HOUSING DEVELOPMENT CORPORATION, NORTH 89'43'20" WEST, 242.97 FEET (74.047 METERS), TO THE POINT OF BEGINNING. PARCEL THREE: AN EASEMENT FOR LANDSCAPE PURPOSES DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWESTERLY CORNER OF THE LANDS OF DIONICIO CASTELLO LOPEZ & ELISA AVALOS LOPEZ AS DESCRIBED BY DEED RECORDED UNDER DOCUMENT NUMBER 1996 - 0002715, SONOMA COUNTY RECORDS; THENCE ALONG THE NORTHERLY LINE OF SAID LANDS OF LOPEZ, NORTH 89° 15'22" EAST, 204.50 FEET (62.332 METERS) TO THE NORTHEASTERLY CORNER OF SAID LANDS OF LOPEZ; THENCE ALONG THE EASTERLY LINE OF SAID LANDS OF LOPEZ, SOUTH 12° 48'38" EAST, 3.07 FEET (0.935 METERS); THENCE LEAVING SAID EASTERLY LINE SOUTH 89° 15' 22' WEST, 204.5 FEET (62.332 METERS), TO A POINT ON THE WESTERLY LINE OF SAID LANDS OF LOPEZ; THENCE ALONG SAID WESTERLY LINE, NORTH 12° 48'38" WEST 3.07 FEET (0.935 METERS), TO THE POINT OF BEGINNING. APN: 006 - 051 - 085 -000 Subordination Agreement old elm village A -2 �0