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HomeMy WebLinkAboutContract 41635-SA1 CITY SECRETARY CONTRACT NO. ` 1.110341.7/Stewart/215/DRX ElectronicallV Recorded Tarrant County Texas Official Public Records 715/2D11 4:20 PM D211158856 ` do' 6*lia NATION A&REffiNT 92.00 Mary Louise Ga(mw OI FORT WAP*Er LANDATA THIS SUBDRDINATION AGREEMENT (this "Agreement's is entered into this day ofr�U,n P-- ,2011 by and among(i)Bank:ofAmerica,N.A..(the"Senior Lender"),(ii) the City of Fort Worth Texas, a Texas municipal corporation (the`.`Subordinate Lender'D, and(iii) Race Street Lofts,Ltd., a Texas limited partnership(the`Borrower'. Recitals A. The Senior Lender has made or is malting a construction loan (the "Construction Loan's to the Borrower in the original principal amount of$4,200,000.00 and a permanent loan to the Dorrower in the original principal amount of $1,365,00.00 (the "Permanent Loan") (the Construction Loan and the Permanent Loan are collectively known as the "First Mortgage Loan"). The First Mortgage Loan is or will be secured by a first mortgage lien(the"First Mortgage') on a multifamily housing project located in Fort Worth, Tarrant County, Texas (the `Troperty"). '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 Note dated SU.n,�,, M , 2011 (the "First Mortgage Note"),and is due in full on the Maturity Date as defined in the First Mortgage Note. B. The Borrower has requested the Senior lender to permit the Subordinate Lender to make two subordinate loans to Borrower in the amount of $1,412,584.00 and $250,000.00 (collectively,the"Subordinate Loan") and to secure the Subordinate Loan by, among other things, placing a mortgage lien against the property. C. The Senior Lender bas agreed to permit the Subordinate Leader 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 D. Upon satisfaction of all conditions set forth in the Consbuetion Loan Agreement between Borrower and Senior Lender datedTU.re-o� , 2011, the Construction Loan will convert to a Permanent Loan,as defined in the Construction Loan Agreement("Conversion"). 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 a;ainsi the Properly, and in consideration thereof, the Senior Lender,the Subordinate Lender and the Borrower agree as follows: 1, Defiuitlons. 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: -Race Staot—City orFart Worth SubotclinnCion Agruemant OFFICIAL RECORD CITY SECRETARY FT.WORTH,TX "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 (Slee 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 ot; or independently to select the managing partner o�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 Leader) 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 Leader 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 Loan Default" means the occurrence of an "Event of Defar?lt" as that term is defined in the First Mortgage Loan Documents. "First Mortgage Loan Documents"means (i) the First Mortgage Note and all other documents evidencing,securing or otherwise executed and delivered in connection with the First Mortgage Loan, and (ii) following Conversion of the First Mortgage Loan, the Permanent ''Loma Documents. "Permanent Note" means that certain Promissory Note (Term Only) delivered by Borrower to Senior Lender to evidence the Permanent Loan. "Permanent Mortgage" means that certain MbItifamily Leasehold Deed of Trust, Assignment of Rents.and Security Agreement and Fixture Filing (Texas) delivered by Borrowei to Senior Lender and encumbering the Property to secure the obligations of Borrower under the Permanent Note. `Termanent Loan Documents"means the Permanent Note, the Permanent Mortgage and all other documents evidencing, security or otherwise executed and delivered in connection with the Permanent Loan. Roca Stxeet—City ofFort worth Subordination Agreement "Parson"means an individual,estate,trust,partnership,corporation,limited liability company, limited liability partnership, govemmental 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 Landes. "Subordinate Lender" means the Person named as such in the first paragraph on page I 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 tivst 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 issued by the BoiTower to the Subordinate Lender,or order,to evidence the Subordinate Loan. Z. Permission to Place-Mortgage Lieu 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 pernnit 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 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 on both of those dates,the provisions of Race Street—City ofriort Worth Subordination elgreernant the First Mortgage Loan Documents and the Permanent Loan Documents applicable to unpermitted liens on the Property shall apply. S. 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) Subor&ate 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 fill of the indebtedness evidenced by construction loan and permanent loan Promissory Notes issued by Race Street Lofts, Ltd. and payable to Bazik.of America,N.A., or order, to the extent and in the manner provided in that certain Subordination Agreement between the payee of this Note, and the Senior Lender and the City of Fort Worth (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 as more fully set forth in the Subordination Agreement The rights and remedies of the payee and each subsequent holder of this Note tinder 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 teams, 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 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 F'irstMortgage Note. (d) Subordinate Loan Documents, The executed Subordinate Loan Documents are substantially in the same formas as those submitted to, and approved by, Senior Lender prior to the date of f*nis Agreement. Upon execution and delivery of the Subordinate Loan Documents,Borrower shall deliver to Senior Lender an executed copy of each ofthe Subordinate Loan Documents,certified to be true,correct and complete. (e) Senior .Loan Documents. The executed Senior 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 Race Street—city of Port worth Subordination Agreement r, Senior Loan Documents,Borrower shall deliver to Subordinate Lender an executed copy of each of the Senior Loan Documents,cmti ied 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 farther 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). (b) Subordination of Subrogation Rights. The Subordinate Lender agrecs that if, by reason of its payment of real estate taxes or other monetary obligations of the Boirower, or by reason of its exercise of any other right or remedy under the Subordinate Loan Documents, it acquires by rigbt 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 tiie 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)united to principal,-interest, additional interest, late payment charges, default interest, attorney's fees, or any other sums secured by the Subordinate Mortgage) without the SeniorLender'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, attomey'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 Race Street--City ofFort worth 8uboraination Agreement 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 anew 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 Dave 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 Leader to retain such payment or apply such payment to the Subordinate Loan, (f) Agreement Not to Commence Bankruptcy Proceedin;. The Subordinate Lender agrees that during the terra of this Agreement it will not commence, or join with any other creditor in commencing any banImiptcy 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 Plights. 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 pumne its rights and remedies under the Subordinate Loan Documents to the extent permitted under Section 5(b). All amounts paid by the Senior tender in accordance with the First Mortgage Loan Documents to cure a Subordinate Loan Default Race Street—GStq of Port worth Subordination Agreement; r" 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 seep 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 runts 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 discretion, then provided that Senior Lender has not conducted a sale of the Property pursuant to its rigbts 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 shat 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 Leader shall have the right, but not the obligation, to cure any such Fust 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 leave 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 beeps current all payments required by the Fust 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, Race Street—City dFort\Vorth Subordination Agreement revenues and other -proceeds from the Property. 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 tbat, notwithstanding any contrary provision contained in the Subordinate Loan Documents, a Firsf 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(h)the Senior Lender has taken af5lmative 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. 7f 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 Leader 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 taming 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 thus 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 novice 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. Race Street—City of tort worth Subordination Agreement 8. Rights and Obligations of the Subordinate Lender Under the Subordinate Loan Documents and of the Senior Lender under the ltirstlVl':ortgage Loan Documents. Subject to each of the other terms of this Agreement, all of the following provisions shall supersede any provisions ofthe Subordinate Loan Documents coveringthe same subject matter: (a) Protection of Secuxity 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) Condemuation or Casualty. In the event o£ a taking or threatened taking by condemnation or other exercise of eminent domain of all or a portion of the Propery (collectively, a"Talcing'); 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 Talcing 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 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 Race 3lrcet—Ci6yarxortriPaxtltSubordination9graament proceeds,provided further however that in the event of any disagreemo at 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 Sabordivate 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 ofno 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. Conversion,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 Leader skull execute and deliver to Senior Lender a new subordination agreement on the same tem and conditions as this Subordination Agreement. Following Conversion, 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 Fust IVlortgage and the First Mortgage Loan. Documents shall wean, 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 pednrming or observing any of the temps, covenants or conditions to be perfonned or observed by it under this Agreement,the other, non-defaulting lender shall have the right to all available legal and equitable relieE 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 Race Street—City ofFoet Worth Subordintiou Agreement 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 registeKed 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 two days after mailing in the United States), addressed to the respective parties as follows: SENIOR LENDER: Bank ofAmerica,N.A. 100 S.Charles Street,4th Floor Mai,Code: MD4-325-04-25 Baltimore,IVJD 21201 Attu:Laura E. Sheehan,Senior Vice President Fax Number. (410)547-4050 SUBORDINATE LENDER: City ofFort Worth. Housing and Economic Development Department 1000 Throck orlon Street Fort Worth,TX 76102 Attn:Cynthia Garcia,AssistantDuector With a copy to: City Attomey's Office 1000 Throckmorton Street Fort Worth,TX 76102 Attn:Mold S. Ganske Either party may, by notice given pursuant to this Section, change fhe 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. Race Streot—City of Fort worth Subordination Agreement 13. GeneraL (a) AssignmentlSuceessors. 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 apartaer,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 maybe granted or denied by the Subordinate Lender in its sole and absolute discretion,unless otherwise expressly-provided in this Agreement (d) Turther 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 Tirst 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 Lay. This Agreement shall be governed by the laws of the State in which the Property is located. (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 afected thereby and shall be enforced to the greatest extent permitted bylaw. (h) Term. The term of this Agr.•eemeot 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;(fi)the payment of all oftho 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 flue Senior Lender pursuant to Section 4 hereof; (iii)the acquisition by the Senior Lender of'title to the Property pursuant to a foreolosure or a deed in lieu'of foreclosure of, or the exercise of a power of We contained in, the First Mortgage;or(iv)the acquisition by the Subordinate Lender of title to the Property pursuant Ratio Sheat—City of Fort worth Suboxdination Agreement f, to a foreclosure or a deed in lieu of foreclosure o& 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. Ci) 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 shalt together constitute one and the same instrument. [remainder of page intentionally left blank] Ince Street—City ofi'ortwodh SubordinaMonAgrocment , IN WTINESS WIEREOF,the parties hereto Dave executed this Agreement as'of the day and year first written above, SENIOR LENDER: Bank of America,N.A.,a national banking assouiation By. �� 'Name: (0�Gvt t7 Title, NORTH CAROLINA Meckler,l��c,,�J COUN TY L allotary Public for the state and county aforesaid, certify that 11�n l�e��rs personally appeared before me this day and acknowledged that she is the 5cn',or Ulce_Ta s•dektof Bank of America, N.A., a national banldng association, and that she as5�,,;aryiee�'�es?cicvt'�, by the autboiity duly given and as the act of the corporation, executed the foregoing on behalf of the corporation. Witness my hand and official stamp or seal this the3rd day of 2011. _ Notary Public '3' fi$Ftl E3 �D1� ViJJ�9 Print Name; 1r►%c'3ra.�n Notary Pubilo [Note: Notwy Public must sign exactly as on notary seal] Macklenburg County, AJC My commission Expires January M,tots My Commission Expixcs: [NOTARY SEAL] (MUST BE FULLY LLGIfBU) - RLTM TO'after=i C0RWgq-. .Atte; Carol Wdg}it 1980 post ouk Blvd.,Ste.610' 130ustbn,•TY,77056 IWOO$trec!t—City of Tort Worth Subordination Agreement SUBORDINATE LENDER: City of Fort Worth,a Texas municipal corporation By: Name. an Alams Tffle; Assistant City Manager State of Texas § County of nTllrV'o�n+ § This instrument was acknowledged before me on JLLOV, .1—q 2011, by �.Inpvl5' on behalf of the City of Fort Worth, a Texas municipal corporation. (SEAL) Notary Public,State of Texas MYCpl+IAISSIONFJtF1��3 �ebtu2,2014 Race Street—City ofFortwaxth Subordination Agreement f, BORROWER- RACE ORROWERRACE STREET LOFTS,LTD. a Texas Limited partnership By:RACE STREET LOFTS GP,LLC, a Texas limited liability company Its: General Partner By:FORT WORTH HOUSING FINANCE CORPORATION, a Texas housing finance corporation Its:Sole Member Name:Jesus J.Cbapa Its:Assistant General Manager State of Tex § County ofa This instrument was acknowledged before ane on2011, by 7esus J. Chapa, Assistant General Manager, on behalf of Fort Wort Flousing Finance Corporation, a Texas housing finance corporation, Sole Member of Mace Street Lofts GP, LLC, a Texas limited liability company, General Partner of Race Street Lofts,Ltd.,a Texas li 'tedtartnership. (SEAL) Not blip,State of as C) SAUNIoOLS MyC03415510NVARES f`�vf ;r Navam5ac5,?D11 r Race Street--City of Fort worth SubordinationAgreemant EXEIIBTT A Legal Desarigtion Race Street—04 of Fort Worth Subordinatiou Agreement Leasehold Iuterest Exhibit A BEING A 1.565 ACRE TRACT OF LAND SITUATED IN THE ATKIN MCLEMORE SURVEY, ABSTRACT NO, 1056, CITY OF FORT WORTH, TARRANT COUNTY, TEXAS AND BEING ALL OF LOT 2, OF L. L. BENTON SUBDIVISION, AN ADDITION TO THE CITY OF FORT WORTH ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 388-H, PAGE 165, PLAT RECORDS OF TARRANT COUNTY, TEXAS, (PRTCT), BEING ALL OF THAT CALLED 37,584 SQUARE FOOT TRACT OF LAND DESCRIBED IN THE SPECIAL WARRANTY DEED TO RACE STREET LOFTS, LTD. RECORDED IN COUNTY CLERK`S FILE NUMBER D211078060, DEED RECORDS TARRANT COUNTY, TEXAS, (DRTCT), AND ALL OF THAT CERTAIN TRACT OF LAND DESCRIBED IN SPECIAL WARRANTY DEED TO RACE STREET LOFTS, LTD. RECORDED IN COUNTY CLERK'S FILE NUMBER D211078061, DRTCT, SAID 1,565 ACRE TRACT OF LAND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: COMMENCING AT A 60 PENNY NAIL FOUND FOR THE POINT OF INTERSECTION OF THE NORTH RIGHT-OF-WAY LINE OF RACE STREET, (A CALLED 69.66 FOOT WIDE PUBLIC RIGHT-OF-WAY) WITH THE EAST RIGHT-OF-WAY LINE OF BLANDIN STREET, (A VARIABLE WIDTH PUBLIC RIGHT-OF-WAY)AND BEING THE SOUTHWEST CORNER OF LOT 2, CARUTHERS SUBDIVISION, AN ADDITION IN THE CITY OF FORT WORTH ACCORDING TO THE PLAT THEREOF RECORDED IN VOLUME 388-170, PAGE 27, PRTCT; THENCE NORTH 90000'00" EAST ALONG SAID NORTH RIGHT-OF-WAY LINE OF RACE STREET, AT A DISTANCE OF 50.00 FEET PASSING A 60 PENNY NAIL FOUND FOR THE SOUTHEAST CORNER OF SAID LOT 2 OF CARUTHERS SUBDIVISION, CONTINUING IN ALL FOR A DISTANCE OF 244.86 FEET TO A 5/8-INCH IRON ROD WITH YELLOW PLASTIC CAP STAMPED "BURY+PARTNERS" FOUND FOR THE POINT OF BEGINNING, BEING THE SOUTHEAST CORNER OF LOT 1, OF SAID L. L. BENTON SUBDIVISION AND BEING THE SOUTHWEST CORNER OF SAID 37,584 SQUARE FOOT TRACT OF LAND; THENCE NORTH 00°10'11" EAST ALONG THE EAST LINE OF SAID LOT 1, A DISTANCE OF 136.00 FEET TO A 5/8-INCH IRON ROD WITH YELLOW PLASTIC CAP STAMPED "BURY+PARTNERS" FOUND FOR THE NORTHEAST CORNER OF SAID LOT 1 AND THE SOUTHEAST CORNER OF SAID LOT 2; THENCE NORTH 90000'00"WEST ALONG THE COMMON LINE OF SAID LOT 1 AND LOT 2, A DISTANCE OF 72:50 FEET TO A 1-INCH IRON PIPE FOUND FOR THE NORTHWEST CORNER OF SAID LOT 1 AND THE SOUTHWEST CORNER OF SAID LOT 2 AND BEING IN THE EAST LINE OF THAT CERTAIN t TRACT OF LAND DESCRIBED IN DEED TO ANITA ACOSTA & EDUARDO ACOSTA RECORDED IN VOLUME 14414, PAGE 497, DRTCT; THENCE NORTH 00010"ll" EAST ALONG THE COMMON LINE OF SAID LOT 2 AND SAID ACOSTA TRACT OF LAND, A DISTANCE OF 125.00 FEET TO A 5/8-INCH IRON ROD WITH YELLOW PLASTIC CAP STAMPED "BURY+PARTNERS" FOUND FOR THE NORTHWEST CORNER OF SAID LOT 2 AND BEING IN THE SOUTH RIGHT-OF-WAY LINE OF MCLEMORE STREET (A VARIABLE WIDTH PUBLIC RIGHT-OF-WAY); THENCE NORTH 90°00'00" EAST ALONG SAID SOUTH RIGHT-OF-WAY LINE, A DISTANCE OF 217.34 FEET TO A 5/8-INCH IRON ROD WITH YELLOW PLASTIC CAP STAMPED "BURY+PARTNERS" FOUND FOR THE NORTHEAST CORNER OF SAID 37,584 SQUARE FOOT TRACT OF LAND; THENCE NORTH 00°1011"EAST,A DISTANCE OF 22.00 FEET TO A PK NAIL WITH WASHER STAMPED "BURY+PARTNERS" FOUND FOR CORNER IN SAID MCLEMORE STREET; THENCE NORTH 9000`00" EAST, A DISTANCE OF 145.00 FEET TO A PK NAIL FOUND FOR THE NORTHEAST CORNER OF THE AFOREMENTIONED RACE STREET LOFTS TRACT RECORDED IN COUNTY CLERKS FILE NUMBER D211078061, DRTCT; THENCE SOUTH 00°10'11" WEST ALONG THE EAST LINE OF SAID RACE STREET LOFTS TRACT OF LAND RECORDED IN COUNTY CLERKS FILE NUMBER D211078061, DRTCT, AT A DISTANCE OF 10.54 FEET,PASSING THE NORTHWEST CORNER OF THE CALLED 0.907 ACRE TRACT OF LAND DESCRIBED TO RACE STREET PROPERTIES, L.P. RECORDED IN COUNTY CLERK'S FILE NUMBER D200213133, DRTCT, CONTINUING ALONG THE COMMON! LINE OF SAID RACE STREET LOFTS TRACT RECORDED IN COUNTY CLERK'S FILE NUMBER D211078061 AND SAID RACE STREET PROPERTIES TRACT RECORDED IN COUNTY CLERK'S FILE NUMBER D200213133, DRTCT, IN ALL FOR A DISTANCE OF 147.00 FEET TO A 5/8- INCH IRON ROD WITH YELLOW PLASTIC CAP STAMPED "BURY+PARTNERS" FOUND FOR THE NORTHEAST CORNER OF THAT CALLED 0.200 ACRE TRACT OF LAND DESCRIBED TO RACE STREET PROPERTIES, L.P. RECORDED IN COUNTY CLERK'S FILE NUMBER D200213133, DRTCT, THENCE NORTH 90000'00" WEST ALONG THE COMMON LINE OF SAID RACE STREET LOFTS TRACT RECORDED IN COUNTY CLERK'S FILE NUMBER D211078061 AND SAID RACE STREET PROPERTIES TRACT OF LAND RECORDED IN COUNTY CLERKS FILE NUMBER D200213133, DRTCT, AT A DISTANCE OF 63.99 FEET PASSING THE NORTHWEST CORNER OF SAID 0.200 ACRE TRACT OF LAND AND THE NORTHEAST CORNER OF THAT CERTAIN TRACT OF LAND DESCRIBED IN DEED TO RACE STREET PROPERTIES, L.P. RECORDED IN COUNTY CLERKS FILE NUMBER D207261115, DRTCT, CONTINUING ALONG THE COMMON LINE OF SAID RACE TRACT LOFTS TRACT RECORDED IN COUNTY CLERK'S FILE NUMBER D211078061 AND SAID RACE STREET PROPERTIES TRACT RECORDED IN COUNTY CLERK'S FILE NUMBER D207261115, DRTCT, IN ALL FOR A DISTANCE OF 145,00 FEET TO A 518-INCH IRON ROD WITH YELLOW PLASTIC CAP STAMPED "BURY+PARTNERS" FOUND FOR THE NORTHWEST CORNER OF SAID RACE STREET PROPERTIES TRACT OF LAND DESCRIBED IN COUNTY CLERK'S FILE NUMBER D207261115, DRTCT, AND BEING IN THE EAST LINE OF SAID 37,584 SQUARE FOOT TRACT OF LAND; THENCE SOUTH 00°10'11" WEST ALONG THE COMMON LINE OF SAID 37,584 SQUARE FOOT TRACT OF LAND AND SAID RACE STREET PROPERTIES TRACT RECORDED IN COUNTY CLERK'S FILE NUMBER D207261115, DRTCT, A DISTANCE OF 136.00 FEET TO A 518-INCH IRON ROD WITH YELLOW PLASTIC CAP STAMPED "BURY+PARTNERS" FOUND FOR CORNER IN THE AFOREMENTIONED NORTH RIGHT-OF-WAY LINE OF RACE STREET; THENCE NORTH 90000'00" WEST ALONG SAID NORTH RIGHT-OF-WAY LINE, A DISTANCE OF 144,84 FEET TO THE POINT OF BEGINNING; CONTAINING A COMPUTED AREA OF 68,180 SQUARE FEET OR 1.565 ACRES OF LAND. NOTE: THE ABOVE DESCRIPTION WAS PREPARED TO REFLECT THE RESULTS OF THE ON-THE-GROUND SURVEY AND COMBINE THE TWO PARCELS INTO ONE PROPERTY DESCRIPTION TO ULTIMATELY CREATE ONE PLATTED LOT FOR DEVELOPMENT.