HomeMy WebLinkAboutC2021-361 - 7/27/2021 - Approved 2022 -2022020759 04/28/2022 02:20 PM Page 1 of 20
Loan No.: 1020757
SUBORDINATION AND STANDSTILL AGREEMENT
(HOME 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 28th day of April, 2022, by and among (i) WELLS FARGO BANK, N.A.,
a national banking association (together with its successors and/or assigns, the "Senior
Lender"), (ii) CITY OF CORPUS CHRISTI, TEXAS, a home-rule municipal corporation
(the "Subordinate Lender"), and (iii) TG 110 PALMS AT BLUCHER PARK, 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 $13,200,000.00. The First Mortgage Loan is or will be secured by a
first mortgage lien (the "First Mortgage") on a multifamily housing project located in
Corpus Christi, 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 April 28, 2022 (the "First Mortgage Note"), and is
due in full on October 28, 2024, as may be extended in accordance with the terms and
conditions in the First Mortgage Loan Documents.
B. The Borrower has requested the Senior Lender to permit the Subordinate
Lender to make a subordinate loan to Borrower in the amount of $1,000,000.00 (the
"Subordinate Loan") using funds from the U.S. Department of Housing and Urban
Development under Title II of the National Affordable Housing Act of 1990, (P.L. 101-
625) for utilization in connection with its HOME Investment Partnerships Program and to
secure the Subordinate Loan by, among other things, placing a mortgage lien against
the Property.
C. The Senior Lender has agreed to permit the Subordinate Lender to make
the Subordinate Loan and to place a subordinate mortgage lien against the Property
subject to all of the conditions contained in this Agreement.
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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 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 April 28, 2022, 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, prior to Stabilization, that certain Promissory
Note, dated as of April 28, 2022, made by Borrower and payable to the order of
the Senior Lender, and, following Stabilization, the Permanent Note.
"Permanent Commitment" means the commitment letter dated April 28,
2022, issued by the Senior Lender, as the permanent lender, to Borrower, with
respect to the Permanent Loan.
"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.
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"Stabilization" means the date when the conditions to funding the
Permanent Loan in the Permanent Commitment are satisfied as determined by
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
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 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
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respects on both of those dates, the provisions of the First Mortgage Loan Documents
and the Permanent Loan Documents applicable to unpermitted liens on 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:
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 $13,200,000.00 issued by TG 110 Palms
at Blucher Park, LP and payable to Wells Fargo Bank, N.A., 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 TG 110 Palms at Blucher
Park, LP (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.
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(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.
(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)
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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 payments 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
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
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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
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, collect rents, appoint (or seek the appointment of) a receiver or institute
any other collection or enforcement action; provided, however, that the
Subordinate Lender shall be entitled to exercise the right to enforce restrictions
relating to income, rent, and affordability restrictions contained in the Subordinate
Loan Documents.
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(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 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.
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(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 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.
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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 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
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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 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
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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. 1020757
SUBORDINATE LENDER:
City of Corpus Christi
P.O. Box 9277
Corpus Christi, Texas 78469-9277
Attention: Neighborhood Services Department
(Page-13)
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Fax: 361-826-1740
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.
(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).
(Page-14)
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(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 payment of all of the principal of,
interest on and other amounts payable under the Subordinate Loan Documents,
other than by reason of payments which the Subordinate Lender is obligated to
remit to the Senior Lender pursuant to Section 4 hereof; (iii) 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 (iv) 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-15)
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SENIOR LENDER:
WELLS FA o BANK, N.A., a national banking
associ- ; r ',,
B f�`a /
Misty D- ' ey,
Vice President
THE STATE OF TEXAS §
COUNTY OFWraft4- §
This instrument was acknowledged before me on this 1 -2' day of
, 2022, by Misty D. Ramsey, Vice President of WELLS FARGO
BANK, N.A., a national banking association, on behalf of said banking association, on
behalf of said banking association.
P°84e, wiCHELLERALLS Notary Public, State of TEXAS
NDTARYPUBLIC STACIE OFTEXAS My Commission Expires: _3
My COMM.EXP.03/18/22023
�''FoF - NOTARY ID 12597424-9
SIGNATURE PAGE TO SUBORDINATION AND STANDSTILL AGREEMENT
2022 2022020759 04/28/2022 02:20 PM Page 17 of 20
TG 110 PALMS AT BLUCHER PARK, LP, a
Texas limited partnership
By: TG 110 Palms at Blucher GP, LLC, a
Texas limited liability company, its
general partner
By: TG 110, Inc., a Texas nonprofit
corporation, its so - member
By: i� "az.
Gilbert M. Piette,
Executive Director
THE STATE OF TEXAS §
§ KNOW ALL MEN BY THESE PRESENTS
COUNTY OF BEXAR §
BEFORE ME, the undersigned authority, on this day personally appeared Gilbert
M. Piette, Executive Director of TG 110, Inc., a Texas nonprofit corporation, on behalf of
said corporation, sole member of TG 110 McArdle GP, LLC, a Texas limited liability
company, general partner of TG 110 PALMS AT BLUCHER PARK; LP, a Texas limited
partnership.
GIVEN UNDER MY HAND AND SEAL OF OFFICE on this the N day of
___N:2P...J , 2022.
*-
.. .. Jean Ann Piks ' Nota ublic, State of Texas
My Commission Exptres i
[SEAL e/aisosa
�.
142°43741° I
SIGNATURE PAGE TO SUBORDINATION AND STANDSTILL AGREEMENT
2022 2022020759 04/28/2022 02:20 PM Page 18 of 20
SUBORDINATE LENDER:
ATTEST: CITY OF CORPUS CHRISTI, TEXAS
e-O ,��� By: A . /�.►
[�jj .,,�
11.
Na e: Rebecca Huerta Name: _ ow _
City Secreta yTitle: A A g g
Z� 16
DOC 5CP 1 %
r (uu n(:I; .1.-.
.� `1
STATE OF TEXAGRfTARY §
§ KNOW ALL BY THESE PRESENTS:
COUNTY OF NUECES §
Thisjpstrument was acknowledgedbefore me on this a/ day of #tri 1 ,
2022, by I f �K G , gym ,)/(GGdD of the CITY OF CORPUS
CHRISTI, TEXAS, a home-rule municipal co oration, on beha f of said corporation.
—, l ,/ Ar
s.,;"1P';% DEBRA S. DAVENPORT' Notary Public, tate of Tex..
iJ...�.'
f. .•1;Notary Public, State of Texas
., .q Comm.Expires 03-11.2024
'a;,o;'h:�` Notary ID 11707398
�r• •• '4: •' •
�-Z/-ZL
As to ��.homey
For City Attorney
(Page-19)
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EXHIBIT "A"
TRACT ONE: LOT NINE(9), BLOCK SEVEN(7), PALMS AT BLUCHER PARK SUBDIVISION 1,a
subdivision of the City of Corpus Christi, Nueces County,Texas according to the established map or plat
thereof recorded in Volume 69, Page 874, Map Records of Nueces County,Texas.
TRACT TWO: LOT FIFTEEN (15), BLOCK FIVE (5). PALMS AT BLUCHER PARK SUBDIVISION 2,a
subdivision of the City of Corpus Christi, Nueces County,Texas according to the established map or plat
thereof recorded in Volume 69, Page 875, Map Records of Nueces County, Texas.
ACTIVE 61501154v5
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Nueces County
Kara Sands
Nueces County
Clerk
Instrument Number: 2022020759
eRecording-Real Property
AGREEMENT
Recorded On: April 28, 2022 02:20 PM Number of Pages: 20
" Examined and Charged as Follows: "
Total Recording: $93.00
STATE OF TEXAS
�oJNtYCp49f0', NU EC ES COUNTY
y� yy I hereby certify that this Instrument was FILED In the File Number sequence on the date/time
;% '"'"1" ;f% printed hereon,and was duly RECORDED in the Official Records of Nueces County,Texas.
If
OF MUEC�~" 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: 2022020759 Simplifile
Receipt Number: 20220428000136 484 North 300 West, Suite 202
Recorded Date/Time: April 28, 2022 02:20 PM
User: Margarita S Provo UT
Station: CLERK04.nuecescc.local
1