Fort Walton Beach Council agenda — 02-12-13--cra — reading text

shall be deemed to include the obligor of the debt secured by the Senior Security Instrument. Subordination Agreement HUD- 92420M ( 04/ 11) Packet Pg. 23  7. 1 b 3 d) ' Business Day" means any day other than Saturday, Sunday or any other day on which Senior Lender or HUD is not open for business. e) " Covenant Event of Default" is defined in the Senior Security Instrument. f) INTENTIONALLY OMITTED g) " Entity' means an estate, trust, partnership, corporation, limited liability company, limited liability partnership, governmental department or agency or any other entity which has the legal rapacity to own property. h) INTENTIONALLY OMITTED 1) " Monetary Event of Default' is defined in the Senior Security Instrument. j) " Non- Project Sources' means any funds that are not derived from Project Sources. k) " Project Sources' means the Mortgaged Property ( as defined in the Senior Security Instrument), any proceeds of the Senior loan, and any reserve or deposit made with Senior Lender or any other party as required by HUD in connection with the Senior loan. 1) " Senior Indebtedness" means all present and future indebtedness, obligations, and liabilities of Borrower to Senior Lender under or in connection with the Senior loan or Senior Loan Documents. m) " Senior Lender" means the Entity named as such in the first paragraph on page 1 of this Agreement, its successors and assigns. n) " Senior Loan Documents' means the Senior Note, the Senior Security Instrument, and the Regulatory Agreement between Borrower and HUD, as such documents may be amended from time to time and all other documents at any time evidencing, securing, guaranteeing, or otherwise delivered in connection with the Senior Indebtedness. o) INTENTIONALLY OMITTED p) " Senior Security Instrument Default' means a " Monetary Event of Default" or a " Covenant Event of Default' as defined in the Senior Security Instrument. q) " Subordinate Indebtedness" means all present and future indebtedness, obligations, and liabilities of Borrower to Subordinate Lender under or in connection with the Subordinate Loan or the Subordinate Loan Documents. r) " Subordinate Lender" means the Entity that qualifies under Program Obligations and named as such in the first paragraph on page 1 of this Agreement. Subordination Agreement HUD- 92420M ( 04111) Packet Pg. 24  7. t. b 4 s) " Subordinate Loan Documents" means the Subordinate Note and all other documents at any time evidencing, securing, guaranteeing, or otherwise delivered in connection with the Subordinate Indebtedness. t) " Subordinate Loan Enforcement Action " means the acceleration of all or any part of the Subordinate Indebtedness, the advertising of or commencement of any foreclosure or trustee' s sale proceedings, the exercise of any power of sale, the acceptance of a deed or assignment in lieu of foreclosure or sale, the collecting of rents, the obtaining of or seeking of the appointment of a receiver, the seeking of default interest, the taking of possession or control of any of the Mortgaged Property, the commencement of any suit or other legal, administrative, or arbitration proceeding based upon the Subordinate Note or any other of the Subordinate Loan Documents, the exercising of any banker' s lien or rights of set -off or recoupment, or the taking of any other enforcement action against Borrower, any other party liable for any of the Subordinate Indebtedness or obligated under any of the Subordinate Loan Documents, or the Mortgaged Property. u) " Subordinate Loan Default" means any act, failure to act, event, conditions, or occurrence which allows ( but for any contrary provision of this Agreement), or which with the giving of notice or the passage of time, or both, would allow ( but for any contrary provision of this Agreement), Subordinate Lender to take a Subordinate Loan Enforcement Action. v) " Surplus Cash" is defined herein to mean the same as that term is defined in the Regulatory Agreement between Borrower and HUD. 2. Permission to Place Lien Against Mortgaged Property. Senior Lender agrees, subject to the provisions of this Agreement, to permit Subordinate Lender to record, when applicable, the Subordinate Lien and other recordable Subordinate Loan Documents, if any, against the Mortgaged Property (which v are subordinate in all respects to the lien of the Senior Security Instrument) to secure d Borrower's obligation to repay the Subordinate Note and all other obligations, indebtedness and liabilities of Borrower to Subordinate Lender under and in connection a with the Subordinate Loan. Such permission is subject to the condition that each of the o representations and warranties made by Borrower and Subordinate Lender in Section 3 are true and correct on the date of this Agreement and on the date on which the proceeds of the Subordinate Loan are disbursed to Borrower. If any of the representations and warranties made by Borrower and Subordinate Lender in Section 3 are not true and y correct on both of those dates, the provisions of the Senior Loan Documents applicable to v unpermitted liens on the Mortgaged Property shall apply. a 3. Borrower' s and Subordinate Lender's Representations and Warranties. Borrower and, with respect to subsections ( a) through ( d) below, Subordinate Lender each make the following representations and warranties to Senior Lender: a) Subordinate Loan Documents. The Subordinate Loan is evidenced by the Subordinate Note and is secured by the Subordinate Lien. Subordination Agreement HUD- 92420M ( 04/ 11) Packet Pg. 25  7. 1. b 5 b) Terms of the Subordinate Loan. The original principal amount of the Subordinate Note is $ 700, 000. Interest on the Subordinate Note accrues monthly at the rate of 1. 5% per annum. The Subordinate Note is due and payable in full on July 1, 2054 ( "Maturity "). The principal of the Subordinate Note will be fully amortized at Maturity. The promissory note evidencing the Subordinate Note obligates Borrower to make payments as follows two times a year, annually and semi -annually, subject to available Surplus Cash. As long as HUD is the insurer or holder of the Senior Note on FHA Project No. 063 -35325, any payments due from project income under the Subordinate Note shall be payable only ( i) from permissible distributions from Surplus Cash of the Project; but in no event greater than seventy-five percent ( 75 %) of the total amount of Surplus Cash; or (ii) from monies received from Non -Project Sources. No prepayment of the Subordinate Note shall be made until after final endorsement by HUD of the Senior Note, unless such prepayment is made from Non -Project Sources and is approved in writing by HUD. The restriction on payment imposed by this paragraph shall not excuse any default caused by the failure of the maker to pay the indebtedness evidenced by the Subordinate Note. c) Relationship of Borrower to Subordinate Lender. Subordinate Lender is not an Affiliate of Borrower. d) Term. The term of the Subordinate Note does not end before the term of the Senior Note. e) Subordinate Loan Documents. The executed Subordinate Loan Documents are substantially in the same forms as those submitted to, and approved by, HUD prior to the date of this Agreement. Upon execution and delivery of the Subordinate Loan Documents, Borrower shall deliver to Senior Lender an executed copy of each of the Subordinate Loan Documents, certified to be true, correct and complete. f) Senior Loan Documents. The executed Senior Loan Documents are the same forms as-approved by HUD prior to the date of this Agreement. 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. Deliveries. Borrower shall submit the following items to Senior Lender and HUD not later than ten ( 10) Business Days after the date of the initial disbursement of proceeds of the Subordinate Loan. a) Title Policy Endorsement. An endorsement to the policy of title insurance insuring the lien of the Senior Security Instrument which insures that i) the lien , if and when actually recorded, of the Subordinate Lender is Subordination Agreement HUD- 92420M ( 04/ 11) Packet Pg. 26  7. 1. b 6 subordinate to the lien of the Senior Mortgage, and ( ii) this Agreement has been recorded among the applicable land records. b) Certification. A certification from Borrower and Subordinate Lender to HUD that the Subordinate Loan Documents do not contain any changes from the Subordinate Loan Documents submitted to, and approved by, HUD, before the date of this Agreement. c) Loan Documents. A complete set of the Subordinate Loan Documents. 5. Terms of Subordination. a) Agreement to Subordinate. Senior Lender and 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 Lien 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 Security Instrument and the other Senior Loan Documents and to all advances heretofore made or