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Attachment 11Attachment 11
Attachment 11
Attachment 11
APN: 407-271-01
SUBORDINATION AGREEMENT
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR LEASEHOLD INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN OTHER LEASEHOLD INTERESTS, AS SET FORTH HEREIN.
THIS SUBORDINATION AGREEMENT (“Agreement”), is dated as of _____, 2023, by the CITY OF HESPERIA, a municipal corporation and general law city duly organized and existing under the laws of the State of California (“City of Hesperia”), and the COUNTY OF SAN BERNARDINO, a political subdivision duly organized and existing under the laws of the State of California (“County of San Bernardino”).
WITNESSETH
WHEREAS, the City of Hesperia, as lessor, and the County of San Bernardino, as lessee, previously executed an unrecorded Lease Agreement (“County Library Lease Agreement”), covering the real property and improvements located at 9650 7th Avenue, Hesperia, California, 92345, Assessor’s Parcel Number 407-271-01, as described more fully in Exhibit A attached hereto (“Premises”), the term of which commenced on October 1, 2006; and WHEREAS, City of Hesperia, as lessor, has executed, or is about to execute, a Site and Facilities Lease, dated as of July 1, 2023, with the Hesperia Joint Public Finance Authority (the “Finance Authority”), as lessee, upon the terms and conditions described therein, which Site and Facilities Lease [was recorded in the real property records of the County of San Bernardino on ______, 2023, as Instrument No. ____] [is intended to be recorded concurrently herewith]; and WHEREAS, the City of Hesperia, as lessee, has executed, or is about to execute, a Property Lease, dated as of July 1, 2023, with the Finance Authority as lessor, upon the terms and conditions described therein, a memorandum of which Property Lease [was recorded in the real property records of the County of San Bernardino on ______, 2023, as Instrument No. ____] [is intended to be recorded concurrently herewith]; and WHEREAS, the City of Hesperia and the Finance Authority have executed or are about to execute the 2023 Financing Leases (as defined below) in connection with the issuance by the Finance Authority of its Hesperia Joint Public Finance Authority 2023 Refunding Lease Revenue Bonds (“Bonds”), pursuant to an Indenture, dated as of July 1, 2023, by and between the Finance Authority and U.S. Bank Trust Company, National Association, a memorandum of which Indenture [was recorded in the real property records of the County of San Bernardino on ______, 2023, as Instrument No. ____] [is intended to be recorded concurrently herewith]; and WHEREAS, it is a condition precedent to including the Premises as part of the Leased Property referenced in said Site and Facilities Lease and Property Lease (together, the “2023 Financing Leases”) that said 2023 Financing Leases shall unconditionally be and remain at all times a lien or charge upon the Premises prior and superior to the County Library Lease Agreement and to the leasehold estate created thereby; and WHEREAS, the City of Hesperia has covenanted in Section 31 of the County Library Lease Agreement, and hereby ratifies and confirms such covenant, as follows:
“31. QUIET ENJOYMENT: Subject to the provisions of this Lease and conditioned upon performance of all the provisions to be performed by COUNTY hereunder, CITY shall secure to COUNTY during the Lease term the quiet and peaceful possession of the Premises and all right and privilege appertaining thereto.” WHEREAS, to protect the interests of the County of San Bernardino under the County Library Lease Agreement and to ensure compliance with Section 31 thereof, the City has not granted and will not grant to the Finance Authority the right to enter/re-lease the Premises in the event of a default by the City of Hesperia under the Property Lease, and WHEREAS, the City of Hesperia and the County of San Bernardino further wish to provide for the subordination of the County Library Lease Agreement to future leases (“Future Financing Leases”; together with the 2023 Financing Leases, the “Financing Leases”) executed by the City of Hesperia in connection with similar financings, as long as the City of Hesperia shall require the Finance Authority or other counterparties to the Future Financing Leases to waive the right to enter/re-lease the Premises in the event of a default by the City of Hesperia under such Future Financing Leases; and WHEREAS, it is to the mutual benefit of the parties hereto that Financing Leases be entered into, and the County of San Bernardino is willing that the Financing Leases, when recorded, shall constitute a lien or charge upon the Premises which is unconditionally prior and superior to the County Library Lease Agreement and to the leasehold estate created thereby, subject to the terms hereof.
NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, it is hereby declared, understood and agreed as follows:
(1) That said Financing Leases, and any renewals or extensions thereof, shall unconditionally be and remain at all times a lien or charge on the Premises, prior and superior to the County Library Lease Agreement, to the leasehold estate created thereby and to all rights and privileges of County of San Bernardino thereunder, and said County Library Lease Agreement and the leasehold estate created thereby together with all rights and privileges of the County of San Bernardino thereunder is hereby subjected, and made subordinate, to the lien or charge of the Financing Leases and the leasehold estates created thereby in favor of the City of Hesperia and the Finance Authority. (2) That to protect the interests of the County of San Bernardino under the County Library Lease Agreement, the Finance Authority has waived or will waive the right to enter/re-lease the Premises in the event of a default by the City of Hesperia under the Property Lease, and the City of Hesperia shall require the Finance Authority or such other counterparties to the Future Financing Leases to waive the right to enter/re-lease the Premises in the event of a default by the City of Hesperia under such Future Financing Leases. (3) To further protect the interests of the County of San Bernardino under the County Library Lease Agreement, the City of Hesperia has covenanted in Section 31 of the County Library Lease Agreement, and hereby ratifies and confirms such covenant, as follows:
“31. QUIET ENJOYMENT: Subject to the provisions of this Lease and conditioned upon performance of all the provisions to be performed by COUNTY hereunder, CITY shall secure to COUNTY during the Lease term the quiet and peaceful possession of the Premises and all right and privilege appertaining thereto.” (4) That this Agreement shall be the whole and only agreement with regard to the subjection and subordination of the County Library Lease Agreement and the leasehold estate created thereby together with all rights and privileges of County of San Bernardino thereunder to the lien or charge of the Financing Leases and shall supersede and cancel, but only insofar as would affect the priority between the County Library Lease Agreement and the Financing Leases, any prior agreements as to such subjection and subordination, including, but not limited to, those provisions, if any, contained in the County Library Lease Agreement that provide for the subjection or subordination of the County Library Lease Agreement and the leasehold estate created thereby to Financing Leases or similar type leasehold estates.
County of San Bernardino declares, agrees, and acknowledges that:
(a) the County consents to and approves (i) all provisions of the Financing Leases, and (ii) any assignments of the Financing Leases in connection with the issuance of the Bonds; and (b) the County intentionally and unconditionally waives, relinquishes, subjects and subordinates the County Library Lease Agreement and the leasehold estate created thereby together with all rights and privileges of County thereunder in favor of the lien or charge upon the Premises of the Financing Leases in favor of City of Hesperia and the Finance Authority, and understands that in reliance upon this waiver, relinquishment, subjection and subordination, the Bonds have been or will be issued 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 waiver, relinquishment, subjection, and subordination.
NOTICE: THIS SUBORDINATION AGREEMENT PROVIDES FOR THE SUBORDINATION OF THE COUNTY LIBRARY LEASE AGREEMENT TO CERTAIN FINANCING LEASES, THE PROCEEDS OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND.
IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT THERETO.
COUNTY OF SAN BERNARDINO
Attest
By:
By:
[to come]
[to come]
CITY OF HESPERIA
Attest
By:
By:
[to come]
[to come]
ACKNOWLEDGED AND ACCEPTED:
HESPERIA JOINT PUBLIC FINANCE AUTHORITY
Attest
By:
By:
[to come]
[to come]
(ALL SlGNATURES MUST BE ACKNOWLEDGED)
[Notary Form]
EXHIBIT A
LEGAL DESCRIPTION
The land described herein is situated in the State of California, County of San Bernardino, City of Hesperia, and is described as follows:
Parcel 7 of Parcel Map No. 19153, in the City of Hesperia, County of San Bernardino, State of California, as per Map filed in Book 238 Pages 42 and 43 of Parcel Maps, in the Office of the County Record 3 A-1
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