HomeMy WebLinkAboutC2025-098 - 4/21/2025 - NA 2U15 -2025017231 05/14/2025 03:05 PM Page 1 of 19
Loan No.: 0000070129
SUBORDINATION AND STANDSTILL AGREEMENT
(City 4B Loan)
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU
MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION
FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY
BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL
SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
THIS SUBORDINATION AND STANDSTILL AGREEMENT (this "Agreement") is
entered into this 14th day of May, 2025, by and among (i) WELLS FARGO BANK,
National Association, a national banking association (together with its successors and/or
assigns, the "Senior Lender"), (ii) CORPUS CHRISTI B CORPORATION, a corporation
organized under Chapter 505 of the Texas Local Government Code (the "Subordinate
Lender"), and (iii) TG 110 PALMS AT MORRIS, LP, a Texas limited partnership (the
"Borrower").
Recitals
A. Pursuant to the terms and conditions of the Construction Loan Agreement
of even date herewith (the "Construction Loan Agreement"), the Senior Lender has made
or is making a loan (the "First Mortgage Loan") to the Borrower in the original principal
amount of $12,250,000.00. The First Mortgage Loan is or will be secured by a first
mortgage lien (the "First Mortgage") on the leasehold interest in the multifamily housing
project located in Corpus Christi, Nueces County, Texas (the "Property"). The Property
is more fully described in Exhibit A attached hereto. The Borrower's obligation to repay
the First Mortgage Loan is evidenced by a Promissory Note dated May 14, 2025 (the
"First Mortgage Note"), and is due in full on October 9, 2027, as may be extended in
accordance with the terms and conditions in the First Mortgage Loan Documents.
B. The Subordinate Lender has agreed to make a loan of City 4B funds to the
Borrower in the amount of$1,160,100.00 (the "Subordinate Loan").
C. The Borrower has requested the Senior Lender to permit the Subordinate
Lender to make the Subordinate Loan and to secure the Subordinate Loan by, among
other things, placing a mortgage lien against the leasehold interest in the Property.
D. The Senior Lender has agreed to permit the Subordinate Lender to make
the Subordinate Loan and to place a subordinate mortgage lien against the leasehold
interest in the Property subject to all of the conditions contained in this Agreement.
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E. The First Mortgage Loan will be fully paid and satisfied in connection with
the origination and funding of the Permanent Loan, as defined in the Construction Loan
Agreement (such date is referred to herein as "Stabilization").
NOW, THEREFORE, in order to induce the Senior Lender to permit the
Subordinate Lender to make the Subordinate Loan to the Borrower and to place a
subordinate mortgage lien against the leasehold interest in the Property, and in
consideration thereof, the Senior Lender, the Subordinate Lender and the Borrower agree
as follows:
1. Definitions.
In addition to the terms defined in the Recitals to this Agreement, for purposes of
this Agreement the following terms have the respective meanings set forth below:
"Affiliate" means, when used with respect to a Person, any corporation,
partnership,joint venture, limited liability company, limited liability partnership, trust
or individual controlled by, under common control with, or which controls such
Person (the term "control" for these purposes shall mean the ability, whether by
the ownership of shares or other equity interests, by contract or otherwise, to elect
a majority of the directors of a corporation, to make management decisions on
behalf of, or independently to select the managing partner of, a partnership, or
otherwise to have the power independently to remove and then select a majority
of those individuals exercising managerial authority over an entity, and control shall
be conclusively presumed in the case of the ownership of 50% or more of the
equity interests).
"Borrower" means the Person named as such in the first paragraph of this
Agreement and any other Person (other than the Senior Lender) who acquires title
to the Property after the date of this Agreement.
"Business Day" means any day other than Saturday, Sunday or a day on
which the Senior Lender is not open for business.
"Default Notice" means: (a) a copy of the written notice from the Senior
Lender to the Borrower stating that a First Mortgage Loan Default has occurred
under the First Mortgage Loan; or (b) a copy of the written notice from the
Subordinate Lender to the Borrower stating that a Subordinate Loan Default has
occurred under the Subordinate Loan. Each Default Notice shall specify the
default upon which such Default Notice is based.
"First Mortgage" means, prior to Stabilization, that certain Construction
Deed of Trust with Absolute Assignment of Leases and Rents, Security Agreement
and Fixture Filing, dated as of May 14, 2025, made by Borrower for the benefit of
Senior Lender, and, following Stabilization, the Permanent Mortgage.
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"First Mortgage Loan Default" means the occurrence of an "Event of
Default" as that term is defined in the Construction Loan Agreement and/or the
occurrence of a "default" or an "Event of Default" (including the expiration of all
applicable notice, grace, and cure periods) under the Permanent Loan Documents.
"First Mortgage Loan Documents" means (i) the Construction Loan
Agreement, the First Mortgage Note, the First Mortgage and all other documents
evidencing, securing, governing, or otherwise executed and delivered in
connection with the First Mortgage Loan; and (ii) following Stabilization, the
Permanent Loan Documents.
"First Mortgage Note" means, that certain Promissory Note, dated as of
May 14, 2025, made by Borrower and payable to the order of the Senior Lender,
and, following Stabilization, the Permanent Note.
"Permanent Loan Documents" means the Permanent Note, the Permanent
Mortgage and all other documents evidencing, securing, governing, and/or
otherwise executed and delivered in connection with the Permanent Loan.
"Permanent Mortgage" means that certain Multifamily Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing delivered by Borrower
to Senior Lender and encumbering the Property to secure the obligations of
Borrower under the Permanent Note.
"Permanent Note" means that certain Promissory Note (Term Only)
delivered by Borrower to Senior Lender to evidence the Permanent Loan.
"Person" means an individual, estate, trust, partnership, corporation, limited
liability company, limited liability partnership, governmental department or agency
or any other entity which has the legal capacity to own property.
"Senior Lender" means the Person named as such in the first paragraph on
page 1 of this Agreement. When any other Person becomes the legal holder of
the First Mortgage Note or of the Permanent Loan Documents, such other Person
shall automatically become the Senior Lender.
"Subordinate Lender" means the Person named as such in the first
paragraph on page 1 of this Agreement and any other Person who becomes the
legal holder of the Subordinate Note after the date of this Agreement.
"Subordinate Loan Default" means a default by the Borrower in performing
or observing any of the terms, covenants or conditions in the Subordinate Loan
Documents to be performed or observed by it, which continues beyond any
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applicable period provided in the Subordinate Loan Documents for curing the
default.
"Subordinate Loan Documents" means the Subordinate Note, the
Subordinate Mortgage, and all other documents evidencing, securing or otherwise
executed and delivered in connection with the Subordinate Loan.
"Subordinate Mortgage" means the mortgage or deed of trust encumbering
the Property as security for the Subordinate Loan, which the Subordinate Lender
will cause to be recorded among the applicable land records immediately before
this Agreement.
"Subordinate Note" means the promissory note of even date herewith
issued by the Borrower to the Subordinate Lender, or order, to evidence the
Subordinate Loan.
2. Permission to Place Mortgage Lien Against Property.
The Senior Lender agrees, notwithstanding the prohibition against inferior liens on
the leasehold interest in the Property contained in the First Mortgage Loan Documents or
the Permanent Loan Documents and subject to the provisions of this Agreement, to
permit the Subordinate Lender to record the Subordinate Mortgage and other recordable
Subordinate Loan Documents against the Property (which are subordinate in all respects
to the lien of the First Mortgage and the Permanent Loan) to secure the Borrower's
obligation to repay the Subordinate Note and all other obligations, indebtedness and
liabilities of the Borrower to the Subordinate Lender under and in connection with the
Subordinate Loan. Such permission is subject to the condition that each of the
representations and warranties made by the Borrower and the Subordinate Lender in
Section 3 is true and correct in all material respects on the date of this Agreement and on
the date on which the proceeds of the Subordinate Loan are disbursed to the Borrower.
If any of the representations and warranties made by the Borrower and the Subordinate
Lender in Section 3 is not true and correct in all material respects on both of those dates,
the provisions of the First Mortgage Loan Documents and the Permanent Loan
Documents applicable to unpemiitted liens on the leasehold interest in the Property shall
apply.
3. Borrower's and Subordinate Lender's Representations and
Warranties.
The Borrower and the Subordinate Lender each makes the following
representations and warranties to the Senior Lender:
(a) Subordinate Note. The Subordinate Note contains the following
provision:
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The indebtedness evidenced by this Note is and shall be
subordinate in right of payment to the prior payment in full of the
indebtedness evidenced by a Note of even date herewith in the
original principal amount of $12,250,000.00 issued by Borrower and
payable to Wells Fargo Bank, National Association or order, to the
extent and in the manner provided in that certain Subordination
Agreement of even date herewith between the payee of this Note,
and the Senior Lender and Borrower (the "Subordination
Agreement"). The Deed of Trust securing this Note is and shall be
subject and subordinate in all respects to the liens, terms, covenants
and conditions of the Deed of Trust securing the Note payable to
Senior Lender as more fully set forth in the Subordination
Agreement. The rights and remedies of the payee and each
subsequent holder of this Note under the Deed of Trust securing this
Note are subject to the restrictions and limitations set forth in the
Subordination Agreement. Each subsequent holder of this Note
shall be deemed, by virtue of such holder's acquisition of the Note,
to have agreed to perform and observe all of the terms, covenants
and conditions to be performed or observed by the Subordinate
Lender under the Subordination Agreement.
(b) Relationship of Borrower to Subordinate Lender and Senior
Lender. The Subordinate Lender is not an Affiliate of the Borrower and is not in
possession of any facts which would lead it to believe that the Senior Lender is an
Affiliate of the Borrower.
(c) Term. The term of the Subordinate Note does not end before the
term of the First Mortgage Note.
(d) Subordinate Loan Documents. The executed Subordinate Loan
Documents are substantially in the same forms as those submitted to, and
approved by, Senior Lender prior to the date of this Agreement. Upon execution
and delivery of the Subordinate Loan Documents, Borrower shall deliver to Senior
Lender an executed copy of each of the Subordinate Loan Documents, and if
requested by Senior Lender at the time of such delivery, certified to be true, correct
and complete.
(e) Senior Loan Documents. The executed First Mortgage Loan
Documents are substantially in the same forms as, when applicable, those
submitted to, and approved by, Senior Lender 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. Terms of Subordination.
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(a) Agreement to Subordinate. The Senior Lender and the
Subordinate Lender agree that: (i) the indebtedness evidenced by the Subordinate
Loan Documents is and shall be subordinated in right of payment, to the extent
and in the manner provided in this Agreement to the prior payment in full of the
indebtedness evidenced by the First Mortgage Loan Documents, and (ii) the
Subordinate Mortgage 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 First Mortgage and the other First Mortgage Loan Documents and
to all advances heretofore made or which may hereafter be made pursuant to the
First Mortgage and the other First Mortgage Loan Documents (including but not
limited to, all sums advanced for the purposes of (1) protecting or further securing
the lien of the First Mortgage, curing defaults by the Borrower under the First
Mortgage Loan Documents or for any other purpose expressly permitted by the
First Mortgage, or (2) constructing, renovating, repairing, furnishing, fixturing or
equipping the Property). Notwithstanding anything herein to the contrary,
Borrower directs and authorizes the Subordinate Lender that unless and
until the Permanent Mortgage Loan has funded, all proceeds of the funding
of the Subordinate Loan shall be paid to the Senior Lender for application as
provided for in the Construction Loan Agreement.
(b) Subordination of Subrogation Rights. The Subordinate Lender
agrees that if, by reason of its payment of real estate taxes or other monetary
obligations of the Borrower, or by reason of its exercise of any other right or remedy
under the Subordinate Loan Documents, it acquires by right of subrogation or
otherwise a lien on the Property which (but for this subsection) would be senior to
the lien of the First Mortgage, then, in that event, such lien shall be subject and
subordinate to the lien of the First Mortgage.
(c) Payments Before First Mortgage Loan Default. Until the
Subordinate Lender receives a Default Notice of a First Mortgage Loan Default
from the Senior Lender, the Subordinate Lender shall be entitled to retain for its
own account all scheduled payments (but not prepayments) made under or
pursuant to the Subordinate Loan Documents.
(d) Payments After First Mortgage Loan Default. The Borrower
agrees that, after it receives notice (or otherwise acquires knowledge) of a First
Mortgage Loan Default, it will not make any payments under or pursuant to the
Subordinate Loan Documents (including but not limited to principal, interest,
additional interest, late payment charges, default interest, attorney's fees, or any
other sums secured by the Subordinate Mortgage) without the Senior Lender's
prior written consent. The Subordinate Lender agrees that, after it receives a
Default Notice from the Senior Lender with written instructions directing the
Subordinate Lender not to accept payments from the Borrower on account of the
Subordinate Loan, it will not accept any payments under or pursuant to the
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Subordinate Loan Documents (including but not limited to principal, interest,
additional interest, late payment charges, default interest, attorney's fees, or any
other sums secured by the Subordinate Mortgage) without the Senior Lender's
prior written consent. If the Subordinate Lender receives written notice from the
Senior Lender that the First Mortgage Loan Default which gave rise to the
Subordinate Lender's obligation not to accept payments has been cured, waived,
or otherwise suspended by the Senior Lender, the restrictions on payment to the
Subordinate Lender in this Section 4 shall terminate, and the Senior Lender shall
have no right to any subsequent payments made to the Subordinate Lender by the
Borrower prior to the Subordinate Lender's receipt of a new Default Notice from
the Senior Lender in accordance with the provisions of this Section 4(d).
(e) Remitting Subordinate Loan Payments to Senior Lender. If, after
the Subordinate Lender receives a Default Notice from the Senior Lender in
accordance with subsection (d) above, the Subordinate Lender receives any
payments under the Subordinate Loan Documents, the Subordinate Lender
agrees that such payment or other distribution will be received and held in trust for
the Senior Lender and unless the Senior Lender otherwise notifies the Subordinate
Lender in writing, will be promptly remitted, in kind to the Senior Lender, properly
endorsed to the Senior Lender, to be applied to the principal of, interest on and
other amounts due under the First Mortgage Loan Documents in accordance with
the provisions of the First Mortgage Loan Documents. By executing this
Agreement, the Borrower specifically authorizes the Subordinate Lender to
endorse and remit any such payments to the Senior Lender, and specifically
waives any and all rights to have such payments returned to the Borrower or
credited against the Subordinate Loan. Borrower and Senior Lender acknowledge
and agree that payments received by the Subordinate Lender, and remitted to the
Senior Lender under this Section 4, shall not be applied or otherwise credited
against the Subordinate Loan, nor shall the tender of such payment to the Senior
Lender waive any Subordinate Loan Default which may arise from the inability of
the Subordinate Lender to retain such payment or apply such payment to the
Subordinate Loan.
(f) Agreement Not to Commence Bankruptcy Proceeding. The
Subordinate Lender agrees that during the term of this Agreement it will not
commence, or join with any other creditor in commencing any bankruptcy
reorganization, arrangement, insolvency or liquidation proceedings with respect to
the Borrower, without the Senior Lender's prior written consent.
5. Default Under Subordinate Loan Documents.
(a) Notice of Default and Cure Rights. The Subordinate Lender shall
deliver to the Senior Lender a Default Notice within five Business Days in each
case where the Subordinate Lender has given a Default Notice to the Borrower.
Failure of the Subordinate Lender to send a Default Notice to the Senior Lender
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shall not prevent the exercise of the Subordinate Lender's rights and remedies
under the Subordinate Loan Documents, subject to the provisions of this
Agreement. The Senior Lender shall have the right, but not the obligation, to cure
any Subordinate Loan Default within 60 days following the date of such notice;
provided, however that the Subordinate Lender shall be entitled, during such 60-
day period, to continue to pursue its rights and remedies under the Subordinate
Loan Documents to the extent permitted under Section 5(b). All amounts paid by
the Senior Lender in accordance with the First Mortgage Loan Documents to cure
a Subordinate Loan Default shall be deemed to have been advanced by the Senior
Lender pursuant to, and shall be secured by the lien of, the First Mortgage.
(b) Subordinate Lender's Agreement to Standstill. If a Subordinate
Loan Default occurs and is continuing, the Subordinate Lender agrees that, without
the Senior Lender's prior written consent, it will not accelerate the Subordinate
Loan, commence foreclosure proceedings with respect to the Property, or
commence any collection proceedings, Including without ,limitation, collect rents,
appoint (or seek the appointment of) a receiver or institute any other collection or
enforcement action.
(c) Cross Default. The Borrower and the Subordinate Lender agree
that a Subordinate Loan Default shall constitute a First Mortgage Loan Default
under the First Mortgage Loan Documents and the Senior Lender shall have the
right to exercise all rights or remedies under the First Mortgage Loan Documents
in the same manner as in the case of any other First Mortgage Loan Default. If the
Subordinate Lender notifies the Senior Lender in writing that any Subordinate Loan
Default of which the Senior Lender has received a Default Notice has been cured
or waived, as determined by the Subordinate Lender in its sole and discretion, then
provided that Senior Lender has not conducted a sale of the Property pursuant to
its rights under the First Mortgage Loan Documents, any First Mortgage Loan
Default under the First Mortgage Loan Documents arising solely from such
Subordinate Loan Default shall be deemed cured, and the First Mortgage Loan
shall be reinstated, provided, however, that the Senior Lender shall not be required
to return or otherwise credit for the benefit of the Borrower any default rate interest
or other default related charges or payments received by the Senior Lender during
such First Mortgage Loan Default.
6. Default Under First Mortgage Loan Documents.
(a) Notice of Default and Cure Rights. The Senior Lender shall deliver
to the Subordinate Lender a Default Notice within five Business Days in each case
where the Senior Lender has given a Default Notice to the Borrower. Failure of
the Senior Lender to send a Default Notice to the Subordinate Lender shall not
prevent the exercise of the Senior Lender's rights and remedies under the First
Mortgage Loan Documents, subject to the provisions of this Agreement. The
Subordinate Lender shall have the right, but not the obligation, to cure any such
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First Mortgage Loan Default as provided below. Subordinate Lender may have up
to 30 days from the date of the Default Notice to cure any monetary default under
the First Mortgage Loan Documents; provided, however, that the Senior Lender
shall be entitled during such 30-day period to continue to pursue its remedies with
respect to the Property. Subordinate Lender may have up to 60 days from the
date of the Default Notice to cure a non-monetary default if during such 60-day
period Subordinate Lender keeps current all payments required by the First
Mortgage Loan Documents. In the event that such a non-monetary default creates
an unacceptable level of risk relative to the Property, or Senior Lender's secured
position relative to the Property, as determined by Senior Lender in its sole
discretion, then Senior Lender may exercise during such 60-day period all
available rights and remedies to protect and preserve the Property and the rents,
revenues and other proceeds from the Property as provided in the First Mortgage
Loan Documents. All amounts paid by the Subordinate Lender to the Senior
Lender to cure a First Mortgage Loan Default shall be deemed to have been
advanced by the Subordinate Lender pursuant to, and shall be secured by the lien
of, the Subordinate Mortgage.
(b) Cross Default. The Subordinate Lender agrees that,
notwithstanding any contrary provision contained in the Subordinate Loan
Documents, a First Mortgage Loan Default shall not constitute a default under the
Subordinate Loan Documents if no other default occurred under the Subordinate
Loan Documents until either (i) the Senior Lender has accelerated the maturity of
the First Mortgage Loan, or (ii) the Senior Lender has taken affirmative action to
exercise its rights under the First Mortgage to collect rent, to appoint (or seek the
appointment of) a receiver or to foreclose on (or to exercise a power of sale
contained in) the First Mortgage. At any time after a First Mortgage Loan Default
is determined to constitute a default under the Subordinate Loan Documents, the
Subordinate Lender shall be permitted to pursue its remedies for default under the
Subordinate Loan Documents, subject to the restrictions and limitations of this
Agreement. If at any time the Borrower cures any First Mortgage Loan Default to
the satisfaction of the Senior Lender, as evidenced by written notice from the
Senior lender to the Subordinate Lender, any default under the Subordinate Loan
Documents arising from such First Mortgage Loan Default shall be deemed cured
and the Subordinate Loan shall be retroactively reinstated as if such First Mortgage
Loan Default had never occurred.
7. Conflict.
The Borrower, the Senior Lender and the Subordinate Lender each agrees that, in
the event of any conflict or inconsistency between the terms of the First Mortgage Loan
Documents, the Subordinate Loan Documents and the terms of this Agreement, the terms
of this Agreement shall govern and control solely as to the following: (a) the relative
priority of the security interests of the Senior Lender and the Subordinate Lender in the
Property; (b) the timing of the exercise of remedies by the Senior Lender and the
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Subordinate Lender under the First Mortgage and the Subordinate Mortgage,
respectively; and (c) solely as between the Senior Lender and the Subordinate Lender,
the notice requirements, cure rights, and the other rights and obligations which the Senior
Lender and the Subordinate Lender have agreed to as expressly provided in this
Agreement. Borrower acknowledges that the terms and provisions of this Agreement
shall not, and shall not be deemed to: extend Borrower's time to cure any First Mortgage
Loan Default or Subordinate Loan Default, as the case may be; give the Borrower the
right to notice of any First Mortgage Loan Default or Subordinate Loan Default, as the
case may be other than that, if any, provided, respectively under the First Mortgage Loan
Documents or the Subordinate Loan Documents; or create any other right or benefit for
Borrower as against Senior Lender or Subordinate Lender.
8. Rights and Obligations of the Subordinate Lender Under the
Subordinate Loan Documents and of the Senior Lender under the First Mortgage
Loan Documents.
Subject to each of the other terms of this Agreement, all of the following provisions
shall supersede any provisions of the Subordinate Loan Documents covering the same
subject matter:
(a) Protection of Security Interest. The Subordinate Lender shall not,
without the prior written consent of the Senior Lender in each instance, take any
action which has the effect of increasing the indebtedness outstanding under, or
secured by, the Subordinate Loan Documents, except that the Subordinate Lender
shall have the right to advance funds to cure First Mortgage Loan Defaults
pursuant to Section 6(a) above and advance funds pursuant to the Subordinate
Mortgage for the purpose of paying real estate taxes and insurance premiums,
making necessary repairs to the Property and curing other defaults by the
Borrower under the Subordinate Loan Documents.
(b) Condemnation or Casualty. In the event of: a taking or threatened
taking by condemnation or other exercise of eminent domain of all or a portion of
the Property (collectively, a "Taking"); or the occurrence of a fire or other casualty
resulting in damage to all or a portion of the Property (collectively, a "Casualty"),
at any time or times when the First Mortgage remains a lien on the Property the
following provisions shall apply:
(1) The Subordinate Lender hereby agrees that its rights (under
the Subordinate Loan Documents or otherwise) to participate in any
proceeding or action relating to a Taking and/or a Casualty, or to participate
or join in any settlement of, or to adjust, any claims resulting from a Taking
or a Casualty shall be and remain subordinate in all respects to the Senior
Lender's rights under the First Mortgage Loan Documents with respect
thereto, and the Subordinate Lender shall be bound by any settlement or
adjustment of a claim resulting from a Taking or a Casualty made by the
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Senior Lender; provided, however, this subsection and/or anything
contained in this Agreement shall not limit the rights of the Subordinate
Lender to file any pleadings, documents, claims or notices with the
appropriate court with jurisdiction over the proposed Taking and/or
Casualty; and
(2) all proceeds received or to be received on account of a Taking
or a Casualty, or both, shall be applied (either to payment of the costs and
expenses of repair and restoration or to payment of the First Mortgage
Loan) in the manner determined by the Senior Lender in its sole and
reasonable discretion; provided, however, that if the Senior Lender elects
to apply such proceeds to payment of the principal of, interest on and other
amounts payable under the First Mortgage Loan, any proceeds remaining
after the satisfaction in full of the principal of, interest on and other amounts
payable under the First Mortgage Loan shall be paid to, and may be applied
by, the Subordinate Lender in accordance with the applicable provisions of
the Subordinate Loan Documents, provided however, the Senior Lender
agrees to consult with the Subordinate Lender in determining the application
of Casualty proceeds, provided further however that in the event of any
disagreement between the Senior Lender and the Subordinate Lender over
the application of Casualty proceeds, the decision of the Senior Lender, in
its sole discretion, shall prevail.
(c) No Modification of Subordinate Loan Documents. The Borrower
and the Subordinate Lender each agrees that, until the principal of, interest on and
all other amounts payable under the First Mortgage Loan Documents have been
paid in full, it will not, without the prior written consent of the Senior Lender in each
instance, increase the amount of the Subordinate Loan, increase the required
payments due under the Subordinate Loan, decrease the term of the Subordinate
Loan, increase the interest rate on the Subordinate Loan, or otherwise amend the
Subordinate Loan terms in a manner that creates an adverse effect upon the
Senior Lender under the First Mortgage Loan Documents. Any unauthorized
amendment of the Subordinate Loan Documents or assignment of the Subordinate
Lender's interest in the Subordinate Loan without the Senior Lender's consent
shall be void ab initio and of no effect whatsoever and Subordinate Lender agrees
that it shall not transfer or assign the Subordinate Loan or the Subordinate Loan
Documents without the prior written consent of the Senior Lender.
9. Stabilization, Modification or Refinancing of First Mortgage Loan.
The Subordinate Lender consents to any agreement or arrangement in which the
Senior Lender waives, postpones, extends, reduces or modifies any provisions of the
First Mortgage Loan Documents, including any provision requiring the payment of money.
Subordinate Lender further agrees that its agreement to subordinate hereunder shall
extend to the Permanent Loan Documents, as well as to any new mortgage debt which
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is for the purpose of refinancing all or any part of the First Mortgage Loan (including
reasonable and necessary costs associated with the closing and/or the refinancing) and,
in the event of new mortgage debt, Subordinate Lender shall execute and deliver to
Senior Lender a new subordination agreement on the same terms and conditions as this
Subordination Agreement. Following Stabilization, all the terms and covenants of this
Agreement shall inure to the benefit of any holder of the Permanent Loan; and all
references to the First Mortgage Loan, the First Mortgage Note, the First Mortgage and
the First Mortgage Loan Documents shall mean, respectively, the Permanent Loan, the
Permanent Note, the Permanent Mortgage and the Permanent Loan Documents.
10. Default by the Subordinate Lender or Senior Lender.
If the Subordinate Lender or Senior Lender defaults in performing or observing any
of the terms, covenants or conditions to be performed or observed by it under this
Agreement, the other, non-defaulting lender shall have the right to all available legal and
equitable relief.
11. Notices.
Each notice, request, demand, consent, approval or other communication
(hereinafter in this Section referred to collectively as "notices" and referred to singly as a
"notice") which the Senior Lender or the Subordinate Lender is required or permitted to
give to the other party pursuant to this Agreement shall be in writing and shall be deemed
to have been duly and sufficiently given if: (a) personally delivered with proof of delivery
thereof (any notice so delivered shall be deemed to have been received at the time so
delivered); or (b) sent by Federal Express (or other similar national overnight courier)
designating early morning delivery (any notice so delivered shall be deemed to have been
received on the next Business Day following receipt by the courier); or (c) sent by United
States registered or certified mail, return receipt requested, postage prepaid, at a post
office regularly maintained by the United States Postal Service (any notice so sent shall
be deemed to have been received three business days after mailing in the United States),
addressed to the respective parties as follows:
SENIOR LENDER:
Wells Fargo Bank, N.A.
Community Lending and Investment
550 S. Tryon Street, 23rd Floor
MAC D1086-239
Charlotte, NC 28202-4200
Attn: Manager, CLI Deal Management
Loan No. 0000070129
(Page-12)
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SUBORDINATE LENDER:
Corpus Christi B Corporation
Attention: Director of Economic Development
P.O. Box 9277
Corpus Christi, Texas 78469-9277
Fax: 361-826-1740
WITH A COPY OF ALL NOTICES SENT UNDER THIS AGREEMENT BEING SENT AT
THE SAME TIME AND IN THE SAME MANNER TO:
Either party may, by notice given pursuant to this Section, change the person or persons
and/or address or addresses, or designate an additional person or persons or an
additional address or addresses for its notices, but notice of a change of address shall
only be effective upon receipt.
13. General.
(a) Assignment/Successors. This Agreement shall be binding upon
the Borrower, the Senior Lender and the Subordinate Lender and shall inure to the
benefit of the respective legal successors and assigns of the Senior Lender and
the Subordinate Lender.
(b) No Partnership or Joint Venture. The Senior Lender's permission
for the placement of the Subordinate Loan Documents does not constitute the
Senior Lender as a joint venturer or partner of the Subordinate Lender. Neither
party hereto shall hold itself out as a partner, agent or Affiliate of the other party
hereto.
(c) Senior Lender's and Subordinate Lender's Consent. Wherever
the Senior Lender's consent or approval is required by any provision of this
Agreement, such consent or approval may be granted or denied by the Senior
Lender in its sole and absolute discretion, unless otherwise expressly provided in
this Agreement. Wherever the Subordinate Lender's consent or approval is
required by any provision of this Agreement, such consent or approval may be
granted or denied by the Subordinate Lender in its sole and absolute discretion,
unless otherwise expressly provided in this Agreement.
(d) Further Assurances. The Subordinate Lender, the Senior Lender
and the Borrower each agree, at the Borrower's expense, to execute and deliver
all additional instruments and/or documents reasonably required by any other party
to this Agreement in order to evidence that the Subordinate Mortgage is
subordinate to the lien, covenants and conditions of the First Mortgage, or to
further evidence the intent of this Agreement.
(Page-13)
ACTIVE 709177514v4
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(e) Amendment. This Agreement shall not be amended except by
written instrument signed by all parties hereto.
(f) Governing Law. This Agreement shall be governed by the laws of
the State in which the Property is located (exclusive of choice and conflict of law
principles).
(g) Severable Provisions. If any provision of this Agreement shall be
invalid or unenforceable to any extent, then the other provisions of this Agreement,
shall not be affected thereby and shall be enforced to the greatest extent permitted
by law.
(h) Term. The term of this Agreement shall commence on the date
hereof and shall continue until the earliest to occur of the following events: (i) the
payment of all of the principal of, interest on and other amounts payable under the
First Mortgage Loan Documents; (ii) the acquisition by the Senior Lender of title to
the Property pursuant to a foreclosure or a deed in lieu of foreclosure of, or the
exercise of a power of sale contained in, the First Mortgage; or (iii) the acquisition
by the Subordinate Lender of title to the Property pursuant to a foreclosure or a
deed in lieu of foreclosure of, or the exercise of a power of sale contained in, the
Subordinate Mortgage, but only if such acquisition of title does not violate any of
the terms of this Agreement.
(i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original for all purposes;
provided, however, that all such counterparts shall together constitute one and the
same instrument.
(Page-14)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
SENIOR LENDER:
WELLS F 1 0 BANK, N.A., a national banking
asso i- 'o
isty D�'4t msey,
Executive Direct•
ppr
THE STATE OF TEXAS §
COUNTY OGg §
(b_t_
This instrument was acknowledged before me on this day of
tk , 2025, by Misty D. Ramsey, Executive Director of WELLS
FARGd BANK, N.A., a national banking association, on behalf of said banking
association, on behalf of said banking association.
OLLi,
NOEMIOLIVA
Notary ID 8135042237(443
My Commission Expires ► Nota Public, State of TEXAS
August 15, 2028 My mmission Expires: c(j -\ S
SIGNATURE PAGE TO SUBORDINATION AND STANDSTILL AGREEMENT(CITY 4-B LOAN)
2025 -2025017231 05/14/2025 03:05 PM Page 16 of 19
SUBORDINATE LENDER:
CORPUS CHRISTI B CORPORATION
By: P\--9e"--- L._>0
Alan Wilson
President
STATE OF TEXAS §
§ KNOW ALL BY THESE PRESENTS:
COUNTY OF NUECES §
This instrument was acknowledged before me on this gl day of ppr, I ,
2025, by f 9/an Wl/S aft) , President of the Corpus Christi B
Corporation, on behalf of said corporation.
.. .. .. .... ,. .. .
'oa•. NORMA DURAN >
=y > /-76014 r i�4 '\ ID# 13191600-6' Notary Public //S �,,1STATE OF TEXAS G" _`
h` My Comm. Exp. 02-26-2027
�,,,�,,,,..• Notary Public, State of Texas
2025 -2025017231 05/14/2025 03:05 PM Page 17 of 19
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
BORROWER:
TG 110 PALMS AT MORRIS, LP, a Texas limited
partnership
By: TG 110 Palms at Morris GP, LLC, a Texas
limited liability company, its general partner
By: TG 110, Inc., a Texas nonprofit
corporation, its sole member
By: S . (U9694 .
Jaclyn S. Wb'odring,
Executive Director
STATE OF TEXAS §
COUNTY OF LI.L,,, §
This instrument was acknowledged before me on the 51 L day of
k,1 , 2025, by Jaclyn S. Woodring, Executive Director of TG 110, Inc., a
Texas nonprofit corporation, on behalf of said corporation, sole member of TG 110 Palms
at Morris GP, LLC, a Texas limited liability company, general partner of TG Palms at
Morris, LP, a Texas limited partnership.
CASSIDY SMITH
?:• •0s Notary Public,State of Texas
Comm.Expires 08-31-2026
-'; ;, +' Notary ID 133940379 Notary lic, State of Texas
SIGNATURE PAGE TO SUBORDINATION AND STANDSTILL AGREEMENT(CITY 4-B LOAN)
2025 -2025017231 05/14/2025 03:05 PM Page 18 of 19
EXHIBIT "A"
Ground Leasehold Estate created under that certain Ground Lease by and between TG
110, Inc. and TG 110 Palms at Morris, LP in and to:
LOT ONE (1), BLOCK TWO (2), PALMS AT MORRIS SENIOR LIVING SUBDIVISION,
City of Corpus Christi, Nueces County, Texas, according to the established map or plat
thereof recorded in Volume 70, Pages 416-417, Map and Plat Records of Nueces County,
Texas.
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Nueces County
Kara Sands
Nueces County
Clerk
Instrument Number: 2025017231
eRecording - Real Property
SUBORDINATION
Recorded On: May 14, 2025 03:05 PM Number of Pages: 19
" Examined and Charged as Follows: "
Total Recording: $88.00
STATE OF TEXAS
S�O�NSY CO49.,1111 NUECES COUNTY
I hereby certify that this Instrument was FILED In the File Number sequence on the date/time
4% "'SNa printed hereon, and was duly RECORDED in the Official Records of Nueces County,Texas.
4thtOPN E ":" Kara Sands
Nueces County Clerk
Nueces County, TX
*********** THIS PAGE IS PART OF THE INSTRUMENT***********
Any provision herein which restricts the Sale, Rental or use of the described REAL PROPERTY
because of color or race is invalid and unenforceable under federal law.
File Information: Record and Return To:
Document Number: 2025017231 Simplifile
Receipt Number: 20250514000143 484 North 300 West, Suite 202
Recorded Date/Time: May 14, 2025 03:05 PM
User: Lourdes V Provo UT
Station: CLERK13
I