HomeMy WebLinkAboutContract 48303-SA2 11/8/2016 Subordination Agreement-15000331058 pkg 2(Read-Orly)CITY SECRETARY '
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D216262152 11171201612.31 PM PGS 17 Fee: $80.00 Submitter:CSC ERECORDING SOLUTIONS
Electronically Recorded by Tarrant County Clerk in Official Public Records
9rt•qt'�an tti:. Mary Louise Garcia
Prepared by and return to:
Ann T.Cole, Esq.
Miles&Stockbridge P.C.
100 Light Street
Baltimore,Maryland 21202
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� SUBORDINATION AGREEMENT
w GOVERNMENTAL ENTITY
(Direct Purchase of Tax-Exempt Loans)
G\ ��iS�cQ�PO (Revised 11/1/2015)
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THIS SUBORDINATION AGREEMENT("Agreement")is entered into this 1st day of Nove nber,2016, by
and between BANK OF AMERICA,N.A.,a national banking association('Senior Mortgagee'),and THE
CITY OF FORT WORTH,a Texas municipal corporation("Subordinate Mortgagee").
RECITALS
A. THE BROADMOOR AT WESTERN HILLS LTD., a limited partnership organized under the laws
of the State of Texas ("Borrower"), is the leasehold owner of certain land located in Tarrant
County, Texas, described in Exhibit A ("Land'). The Land is improved with a multifamily rental
housing project("Improvements").
B. Senior Mortgagee has made a loan to Borrower in the original principal amount of$8,589,430.00
('Senior Loan') upon the terms and conditions of a Construction Loan Agreement dated as of
November 1, 2016 (as the same may from time to time be extended, amended, restated,
supplemented or otherwise modified,the"Senior Loan Agreement")between Senior Mortgagee
and Borrower in connection with the Mortgaged Property. The Senior Loan is secured by a
Leasehold Deed of Trust,Assignment,Security Agreement and Fixture Filing,with Joinder of Fee
Owner dated as of November 1, 2016 (as the same may from time to time be extended,
amended, restated, supplemented or otherwise modified, the "Senior Mortgage') encumbering
the Land,the Improvements and related personal and other property described and defined in the
Senior Mortgage as the"Mortgaged Property."
C. Pursuant to a City Secretary Contract,Contract No.48303 dated as of October 20,2016 between
Subordinate Mortgagee and Borrower("HOME Contract'), Subordinate Mortgagee has made or
is making a loan to Borrower in the original principal amount of $559,481.00 ('Subordinate
Loan"). The Subordinate Loan is or will be secured by a Leasehold Deed of Trust, Security
Agreement — Financing Statement (HOME Funds) dated as of November November 1, 2016
("Subordinate Mortgage')encumbering all or a portion of the Mortgaged Property.
D. The Senior Mortgage will be recorded in the Land Records of Tarrant County,Texas("Recording
Office')prior to recordation of this Agreement. The Subordinate Mortgage will be recorded in the
Recording Office following the recording of the Senior Mortgage.
E. The execution and delivery of this Agreement is a condition of Senior Mortgagee's consenting to
Subordinate Mortgagee's making of the Subordinate Loan and Borrowers granting of the
Subordinate Mortgage.
NOW,THEREFORE, for valuable consideration, the receipt and sufficiency of which are acknowledged,
the parties agree as follows:
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1. Definitions. The following terms, when used in this Agreement(including, as appropriate, when
used in the above recitals),will have the following meanings.
(a) The terms "Condemnation," "Leases," and "Rents" as well as any term used in this
Agreement and not otherwise defined in this Agreement,will have the meanings given to
those terms in the Senior Loan Agreement.
(b) "Bankruptcy Proceeding" means any bankruptcy, reorganization, insolvency,
composition, restructuring, dissolution, liquidation, receivership, assignment for the
benefit of creditors, or custodianship action or proceeding under any federal or state law
with respect to Borrower, any guarantor of any of the Senior Indebtedness, any of their
respective properties, or any of their respective partners,members, officers, directors, or
shareholders.
(c) "Borrower' means all persons or entities identified as "Borrower" in the first Recital of
this Agreement, together with their successors and assigns, and any ether person or
entity who acquires title to the Mortgaged Property after the date of this Agreement:
provided that the term "Borrower"will not include Senior Mortgagee if Senior Mortgagee
acquires title to the Mortgaged Property.
(d) "Casualty" means the occurrence of damage to or loss of all or any portion of the
Mortgaged Property by fire or other casualty.
(e) "Enforcement Action" means any of the following actions taken by or at the direction of
Subordinate Mortgagee: the acceleration of all or any part of the Subordinate
Indebtedness, the advertising of or commencement of any foreclosure or trustee's sale
proceedings, the exercise of any power of sale,the acceptance of a deed or assignment
in lieu of foreclosure or sale, the collecting of Rents, the obtaining of or seeking of the
appointment of a receiver, the seeking of default interest, the taking of possession or
control of any of the Mortgaged Property, the commencement of any suit or other legal,
administrative,or arbitration proceeding based upon the Subordinate Note or any other of
the Subordinate Loan Documents, the exercising of any banker's lien or rights of set-off
or recoupment, or the exercise of any other remedial action against Borrower, any other
party liable for any of the Subordinate Indebtedness or obligated under any of the
Subordinate Loan Documents,or the Mortgaged Property.
(f) "Enforcement Action Notice" means a written Notice from Subordinate Mortgagee to
Senior Mortgagee, given following one or more Subordinate Mortgage Default(s)and the
expiration of any Notice or cure periods provided for such Subordinate Mortgage
Default(s) in the Subordinate Loan Documents, setting forth in reasonable detail the
Subordinate Mortgage Default(s) and the Enforcement Actions proposed to be taken by
Subordinate Mortgagee.
(g) "HOME" means the HOME Investment Partnerships Act at Title II of the Cranston
Gonzales National Affordable Housing Act of 1990,as amended,42 U.S.C. 12701 et seq.
and its implementing regulations, HOME Investment Partnerships Program Final Rule,as
amended,24 CFR Part 92 et seq.
(h) "Loss Proceeds" means all monies received or to be received under any insurance
policy, from any condemning authority, or from any other source, as a result or any
Condemnation or Casualty.
(i) "Notice"is defined in Section 6(d).
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(j) "Senior Indebtedness" means the 'Indebtedness" of Borrower as evidenced by the
Senior Loan Documents.
(k) "Senior Loan Agreement"has the meaning as provided in the Recitals.
(1) "Senior Loan Documents'collectively means the Senior Loan Agreemert,together with
the "Loan Documents"as defined in the Senior Loan Agreement,as the same may from
time to time be extended,amended,restated,supplemented or otherwise modified,
(m) 'Senior Mortgage Default"means any act,failure to act, event,condition,or occurrence
which constitutes, or which with the giving of Notice or the passage of time, or both,
would constitute,an"Event of Default"as defined in the Senior Loan Agreement.
(n) 'Senior Mortgagee' means Bank of America, N.A., a national banking association.
When any other person or entity becomes the legal holder of the Senior Note,such other
person or entity automatically will become Senior Mortgagee.
(o) 'Senior Note"means the Promissory Note dated November 1,2016,in an amount equal
to$8,589,430.00 made by Borrower to the order of Senior Mortgagee, as the same may
from time to time be extended,amended, restated,supplemented or otherwise modified.
(p) "Subordinate Indebtedness'means all sums evidenced or secured or guaranteed by,or
otherwise due and payable to Subordinate Mortgagee pursuant to, the Subordinate Loan
Documents.
(q) "Subordinate Loan Documents" means the Subordinate Mortgage, the Subordinate
Note, the HOME Contract and all other documents at any time evidercing, securing,
guaranteeing, or otherwise delivered in connection with the Subordinate Indebtedness,
as the same may be amended.
(r) "Subordinate Mortgage Default' means any act, failure to act, event, condition, or
occurrence which allows(but for any contrary provision of this Agreement),or which with
the giving of Notice or the passage of time, or both, would allow (but for any contrary
provision of this Agreement),Subordinate Mortgagee to take an Enforcement Action.
(s) "Subordinate Mortgagee" means the person or entity named as such in the first
paragraph of this Agreement and any other person or entity who becomes the legal
holder of the Subordinate Note after the date of this Agreement.
(t) "Subordinate Note" means the promissory note or other evidence of the Subordinate
Indebtedness referred to in the Subordinate Mortgage and any replacement of the
Subordinate Note.
(u) "Surplus Cash" means,with respect to any period,any revenues of Borrower remaining
after paying,or setting aside funds for paying,all of the following:
(i) AJI sums due or currently required to be paid under the Senior Loan Documents,
including any Imposition Reserve Deposits.
(ii) All deposits to any replacement reserve, completionlrepair reserve or other
reserve or escrow required by the Senior Loan Documents that are due or
currently payable.
(iii) All reasonable operating expenses of the Mortgaged Property, including real
estate taxes, insurance premiums, utilities, building maintenance, painting and
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repairs, management fees, payroll, administrative expenses, legal expenses and
audit expenses (excluding any developer fees payable with respect to the
Mortgaged Property).
2. Subordination of Subordinate Indebtedness.
(a) The Subordinate Indebtedness is and will at all times continue to be subject and
subordinate in right of payment to the prior payment in full of the Senior Indebtedness.
(b) Until the occurrence of a Senior Mortgage Default,Subordinate Mortgagee will be entitled
to retain for its own account all payments made on account of the principa'of and interest
on the Subordinate Indebtedness in accordance with the requirements of the Subordinate
Loan Documents; provided no such payment is made more than 10 days in advance of
its due date and provided further that no such payment exceeds 50% of then available
Surplus Cash. However, immediately upon Subordinate Mortgagee's receipt of Notice or
actual knowledge of a Senior Mortgage Default, Subordinate Mortgagee will not accept
any payments on account of the Subordinate Indebtedness,and the provisions of Section
2(c) of this Agreement will apply. Subordinate Mortgagee acknowledges that a
Subordinate Mortgage Default constitutes a Senior Mortgage Default. Accordingly, upon
the occurrence of a Subordinate Mortgage Default, Subordinate Mortgagee will be
deemed to have actual knowledge of a Senior Mortgage Default.
(c) If(i) Subordinate Mortgagee receives any payment, property, or asset of any kind or in
any form on account of the Subordinate Indebtedness(including any proceeds from any
Enforcement Action) after a Senior Mortgage Default of which Subordinate Mortgagee
has actual knowledge(or is deemed to have actual knowledge as provided in 2(b)above)
or has been given Notice, or (Iii) Subordinate Mortgagee receives, voluntarily or
involuntarily, by operation of law or otherwise, any payment, property, or asset in or in
connection with any Bankruptcy Proceeding, such payment, property, or asset will be
received and held in trust for Senior Mortgagee. Subordinate Mortgagee will promptly
remit, in kind and properly endorsed as necessary, all such payments, properties, and
assets to Senior Mortgagee. Senior Mortgagee will apply any payment, asset, or
property so received from Subordinate Mortgagee to the Senior Indebtedness in such
order, amount (with respect to any asset or property other than immediately available
funds),and manner as Senior Mortgagee determines in its sole and absolute discretion.
(d) Without limiting the complete subordination of the Subordinate Indebtedness to the
payment in full of the Senior Indebtedness, in any Bankruptcy Proceeding, upon any
payment or distribution(whether in cash, property,securities,or otherwise)to creditors(I)
the Senior Indebtedness will first be paid In full In cash before Subordinate Mortgagee will
be entitled to receive any payment or other distribution on account of or In respect of the
Subordinate Indebtedness, and (ii) until all of the Senior Indebtedness is paid in full in
cash, any payment or distribution to which Subordinate Mortgagee would be entitled but
for this Agreement (whether in cash, property, or other assets) will be made to Senior
Mortgagee.
(e) The subordination of the Subordinate Indebtedness will continue if any payment under
the Senior Loan Documents (whether by or on behalf of Borrower, as proceeds of
security or enforcement of any right of set-off or otherwise) is for any reason repaid or
returned to Borrower or its insolvent estate,or avoided, set aside or required to be paid to
Borrower, a trustee, receiver or other similar party under any bankruptcy, insolvency,
receivership or similar law. In such event, any or all of the Senior Indebtedness originally
intended to be satisfied will be deemed to be reinstated and outstanding to the extent of
any repayment, return, or other action, as if such payment on account of the Senior
Indebtedness had not been made.
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(f) In addition to the limitations set forth above, Subordinate Mortgagee agrees that the
Subordinate Indebtedness will be payable solely from not more than 50% of Surplus
Cash while the Senior Indebtedness remains outstanding.
3. Subordination of Subordinate Loan Documents.
(a) Each of the Subordinate Loan Documents is, and will at all times remain, subject and
subordinate in all respects to the liens, terns, covenants, conditions, operations, and
effects of each of the Senior Loan Documents.
(b) The subordination of the Subordinate Loan Documents and of the Subordinate
Indebtedness will apply and continue notwithstanding (i) the actual date and time of
execution, delivery, recording, filing or perfection of each of the Senior Loan Documents
and of each of the Subordinate Loan Documents, and (ii)the availability of any collateral
to Senior Mortgagee, including the availability of any collateral other than the Mortgaged
Property.
(c) By reason of, and without in any way limiting, the full subordination of the Subordinate
Indebtedness and the Subordinate Loan Documents provided for in this Agreement, all
rights and claims of Subordinate Mortgagee under the Subordinate Loan Documents in or
to all or any portion of the Mortgaged Property are expressly subject and subordinate in
all respects to the rights and claims of Senior Mortgagee under the Senior Loan
Documents in or to the Mortgaged Property.
(d) If Subordinate Mortgagee, by indemnification, subrogation or otherwise, acquires any
lien,estate, right or other interest in any of the Mortgaged Property,then that lien,estate,
right or other interest will be fully subject and subordinate to the receipt by Senior
Mortgagee of payment in full of the Senior Indebtedness, and to the Senior Loan
Documents, to the same extent as the Subordinate Indebtedness and the Subordinate
Loan Documents are subordinate pursuant to this Agreement.
4. Additional Representations and Covenants.
(a) Subordinate Mortgagee represents and warrants that each of the following is true:
(i) Subordinate Mortgagee is now the owner and holder of the Subordinate Loan
Documents.
(fi) The Subordinate Loan Documents are now in full force and effect.
(iii) The Subordinate Loan Documents have not been modified or amended.
(iv) No Subordinate Mortgage Default has occurred.
(v) The current unpaid principal balance of the Subordinate Irdebtedness is
$559,481.00.
(vi) No scheduled monthly payments under the Subordinate Note have been or will
be prepaid.
(vii) None of the rights of Subordinate Mortgagee under any of the Subordinate Loan
Documents are subject to the rights of any third parties, by way of subrogation,
indemnification or otherwise.
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(b) Without the prior written consent of Senior Mortgagee in each instance, Subordinate
Mortgagee will not do any of the following:
(i) Amend, modify, waive, extend, renew, or replace any provision of any of the
Subordinate Loan Documents.
(ii) Pledge, assign, transfer, convey, or sell any interest in the Subordinate
Indebtedness or any of the Subordinate Loan Documents.
(iii) Accept any payment on account of the Subordinate Indebtedness other than a
regularly scheduled payment of interest or principal and interest made not earlier
than 10 days prior to its due date, or as expressly authorized in Section 4(i)
below and not in excess of 50%of then available Surplus Cash.
(iv) Take any action which has the effect of increasing the Subordinate
Indebtedness.
(v) Appear in,defend or bring any action to protect Subordinate Mortgagee's interest
in the Mortgaged Property.
(vi) Take any action concerning environmental matters affecting the Mortgaged
Property.
(c) Subordinate Mortgagee will deliver to Senior Mortgagee a copy of each Notice received
or delivered by Subordinate Mortgagee pursuant to the Subordinate Loan Documents or
in connection with the Subordinate Indebtedness, simultaneously with Subordinate
Mortgagee's delivery or receipt of such Notice. Senior Mortgagee will deliver to
Subordinate Mortgagee in the manner required in Section 5(b)a copy of each Notice of a
Senior Mortgage Default delivered to Borrower by Senior Mortgagee. Neither giving nor
failing to give a Notice to Senior Mortgagee or Subordinate Mortgagee pursuant to this
Section 4(c) will affect the validity of any Notice given by Senior Mortgagee or
Subordinate Mortgagee to Borrower,as between Borrower and such of Senior Mortgagee
or Subordinate Mortgagee as provided the Notice to Borrower.
(d) Without the prior written consent of Senior Mortgagee in each instance, Subordinate
Mortgagee will not commence, or join with any other creditor in commencing, any
Bankruptcy Proceeding. In the event of a Bankruptcy Proceeding, Subordinate
Mortgagee will not vote affirmatively in favor of any plan of reorganization or liquidation
unless Senior Mortgagee has also voted affirmatively in favor of such plan. In the event
of any Bankruptcy Proceeding, Subordinate Mortgagee will not contest the continued
accrual of interest on the Senior Indebtedness, in accordance with and at the rates
specified in the Senior Loan Documents, both for periods before and for periods after the
commencement of such Bankruptcy Proceedings.
(e) Whenever the Subordinate Loan Documents give Subordinate Mortgagee approval or
consent rights with respect to any matter, and a right of approval or consent with regard
to the same or substantially the same matter is also granted to Senior Mortgagee
pursuant to the Senior Loan Documents or otherwise, Senior Mortgagee's approval or
consent or failure to approve or consent, as the case may be, will be binding on
Subordinate Mortgagee. None of the other provisions of this Section 4 are intended to be
in any way in limitation of the provisions of this Section 4(e).
(f) All requirements pertaining to insurance under the Subordinate Loan Documents
(including requirements relating to amounts and types of coverages, deductibles and
special endorsements) will be deemed satisfied if Borrower complies with the insurance
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requirements under the Senior Loan Documents and of Senior Mortgagee. All original
policies of insurance required pursuant to the Senior Loan Documents will be held by
Senior Mortgagee. Nothing In this Section 4(f)will preclude Subordinate Mortgagee from
requiring that it be named as a mortgagee and loss payee, as its interest may appear,
under all policies of property damage insurance maintained by Borrower with respect to
the Mortgaged Property, provided such action does not affect the priority of payment of
Loss Proceeds,or that Subordinate Mortgagee be named as an additional insured under
all policies of liability insurance maintained by Borrower with respect to the Mortgaged
Property.
(g) In the event of a Condemnation or a Casualty, all of the foilowing provisions will apply:
(i) The rights of Subordinate Mortgagee(under the Subordinate Loan Documents or
otherwise)to participate in any proceeding or action relating to a Condemnation
or a Casualty, or to participate or join in any settlement of, or to adjust, any
claims resulting from a Condemnation or a Casualty, will be and remain
subordinate in all respects to Senior Mortgagee's rights under the Senior Loan
Documents with respect thereto, and Subordinate Mortgagee will be bound by
any settlement or adjustment of a claim resulting from a Condemnation or a
Casually made by Senior Mortgagee.
(ii) All Loss Proceeds will be applied either to payment of the costs and expenses of
Restoration or to payment on account of the Senior Indebtedness, as and in the
manner determined by Senior Mortgagee in its sole discretion.
(iii) If Senior Mortgagee applies or releases Loss Proceeds for the purposes of
Restoration of the Mortgaged Property, then Subordinate Mortgagee will release
for such purpose all of its right, title and interest, if any, in and to such Loss
Proceeds. If Senior Mortgagee holds Loss Proceeds, or monitors the
disbursement thereof, Subordinate Mortgagee will not do so. Nothing contained
in this Agreement will be deemed to require Senior Mortgagee to act for or on
behalf of Subordinate Mortgagee in connection with any Restoration or to hold or
monitor any Loss Proceeds in trust for or otherwise on behalf of Subordinate
Mortgagee, and all or any Loss Proceeds may be commingled with any funds of
Senior Mortgagee.
(iv) If Senior Mortgagee elects to apply Loss Proceeds to payment on account of the
Senior Indebtedness, and if the application of such Loss Proceeds results in the
payment in full of the entire Senior Indebtedness, any remaining Loss Proceeds
held by Senior Mortgagee will be paid to Subordinate Mortgagee unless another
party has asserted a claim to the remaining Loss Proceeds.
(h) Subordinate Mortgagee will enter into attornment and non-disturbance agreements with
all tenants under commercial or retail Leases, if any, to whom Senior Mortgagee has
granted attomment and non-disturbance, on the same terms and concitions given by
Senior Mortgagee.
(i) Except as provided in this Section 4(i), and regardless of any contrary provision in the
Subordinate Loan Documents, Subordinate Mortgagee will not collect payments for the
purpose of escrowing for any cost or expense related to the Mortgaged Property or for
any portion of the Subordinate Indebtedness. However, if Senior Mortgagee is not
collecting escrow payments for one or more Impositions, Subordinate Mortgagee may
collect escrow payments for such Impositions; provided that all payments so collected by
Subordinate Mortgagee will be held in trust by Subordinate Mortgagee to be applied only
to the payment of such Impositions.
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Q) Within 30 days after request by Senior Mortgagee, Subordinate Mortgagee will furnish
Senior Mortgagee with a statement, duly acknowledged and certified setting forth the
then-current amount and terms of the Subordinate Indebtedness, c:onfinning that there
exists no default under the Subordinate Loan Documents(or describing any default that
does exist), and certifying to such other information with respect to the Subordinate
Indebtedness as Senior Mortgagee may request.
(k) Senior Mortgagee may amend, waive, postpone, extend, renew, replace, reduce or
otherwise modify any provision of any of the Senior Loan Documents without the
necessity of obtaining the consent of or providing Notice to Subordinate Mortgagee, and
without affecting any of the provisions of this Agreement. Notwithstanding the foregoing,
Senior Mortgagee may not modify any provision of the Senior Loan Documents that
increases the Senior Indebtedness, except for increases in the Senior Indebtedness that
result from advances made by Senior Mortgagee to protect the security or lien priority of
Senior Mortgagee under the Senlor Loan Documents or to cure defaults under the
Subordinate Loan Documents.
S. Default Under Loan Documents.
(a) For a period of 90 days following delivery to Senior Mortgagee of an Enforcement Action
Notice, Senior Mortgagee will have the right, but not the obligation, to cure any
Subordinate Mortgage Default, provided that if such Subordinate Mortgage Default is a
non-monetary default and is not capable of being cured within such 90-day period and
Senior Mortgagee has commenced and is diligently pursuing such cure to completion,
Senior Mortgagee will have such additional period of time as may be required to cure
such Subordinate Mortgage Default or until such time, if ever, as Senior Mortgagee (i)
discontinues its pursuit of any cure and/or(ii) delivers to Subordinate Mortgagee Senior
Mortgagee's written consent to the Enforcement Action described in the Enforcement
Action Notice. Senior Mortgagee will not be subrogated to the rights of Subordinate
Mortgagee under the Subordinate Loan Documents by reason of Senior Mortgagee
having cured any Subordinate Mortgage Default. However, Subordinate Mortgagee
acknowledges that all amounts advanced or expended by Senior Mortgages in
accordance with the Senior Loan Documents or to cure a Subordinate Mortgage Default
will be added to and become a part of the Senior Indebtedness and will be secured by
the lien of the Senior Mortgage.
(b) Senior Mortgagee will deliver to Subordinate Mortgagee a copy of any Notice sent by
Senior Mortgagee to Borrower of a Senior Mortgage Default within 5 Business Days of
sending such Notice to Borrower. Failure of Senior Mortgagee to send Notice to
Subordinate Mortgagee will not prevent the exercise of Senior Mortgagee's rights and
remedies under the Senior Loan Documents. Subordinate Mortgagee will have the right,
but not the obligation, to cure any monetary Senior Mortgage Default within 30 days
following the date of such Notice; provided, however, that Senior Mortgagee will be
entitled during such 30-day period to continue to pursue its remedies under the Senior
Loan Documents.
Subordinate Mortgagee may, within 90 days after the date of the Notice, cure a non-
monetary Senior Mortgage Default K during such 90-day period, Subordinate Mortgagee
keeps current all payments required by the Senior Loan Documents. If such a non-
monetary Senior Mortgage Default creates an unacceptable level of risk relative to the
Mortgaged Property, or Senior Mortgagee's secured position relative to the Mortgaged
Property, as determined by Senior Mortgagee in its sole discretion, then during such 90-
day period Senior Mortgagee may exercise all available rights and remedies to protect
and preserve the Mortgaged Property and the Rents, revenues and other proceeds from
the Mortgaged Property. Subordinate Mortgagee will not be subrogated to the rights of
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Senior Mortgagee under the Senior Loan Documents by reason of Subordinate
Mortgagee having cured any Senior Mortgage Default. However, Senior Mortgagee
acknowledges that all amounts paid by Subordinate Mortgagee to Senior Mortgagee to
cure a Senior Mortgage Default will be deemed to have been advanced by Subordinate
Mortgagee pursuant to, and will be secured by the lien of, the Subordinate Mortgage.
Notwithstanding anything in this Section 5(b) to the contrary, Subordina",e Mortgagee's
right to cure any Senior Mortgage Default will terminate immediately upon the occurrence
of any Bankruptcy Proceeding.
(c) In the event of a Subordinate Mortgage Default, Subordinate Mortgagee will not
commence any Enforcement Action until 90 days after Subordinate Mortgagee has
delivered to Senior Mortgagee an Enforcement Action Notice with resped to such
Enforcement Action, provided that during such 90-day period or such longer period as
provided in Section 5(a), Subordinate Mortgagee will be entitled to seek specific
performance to enforce covenants and agreements of Borrower relating to income, rent,
tenant eligibility or affordability restrictions contained in the HOME Contact, subject to
Senior Mortgagee's right to cure a Subordinate Mortgage Default set forth in Section 5(a).
Subordinate Mortgagee may not commence any other Enforcement Action, Including any
foreclosure action under the Subordinate Loan Documents, until the earlier of (f) the
expiration of such 90-day period or such longer period as provided In Section 5(a),or(11)
the delivery by Senior Mortgagee to Subordinate Mortgagee of Senior Mortgagee's
written consent to such Enforcement Action by Subordinate Mortgagee. Subordinate
Mortgagee acknowledges that Senior Mortgagee may grant or refuse consent to
Subordinate Mortgagee's Enforcement Action in Senior Mortgagee's sole and absolute
discretion. At the expiration of such 90-day period or such longer period as provided in
Section 5(a) and, subject tc Senior Mortgagee's right to cure set forth in Section 5(a),
Subordinate Mortgagee may commence any Enforcement Action. Any Enforcement
Action on the part of Subordinate Mortgagee will be subject to the provisions of this
Agreement. Subordinate Mortgagee acknowledges that the provisions of this Section
5(c) are fair and reasonable under the circumstances, that Subordinate Mortgagee has
received a substantial benefit from Senior Mortgagee having granted its consent to the
Subordinate Mortgage, and that Senior Mortgagee would not have granted such consent
without the inclusion of these provisions in this Agreement.
(d) Senior Mortgagee may pursue all rights and remedies available to it under the Senior
Loan Documents, at law, or in equity, regardless of any Enforcement Action Notice or
Enforcement Action by Subordinate Mortgagee. No action or failure to act on the part of
Senior Mortgagee in the event of a Subordinate Mortgage Default or commencement of
an Enforcement Action will constitute a waiver on the part of Senior Mortgagee of any
provision of the Senior Loan Documents or this Agreement.
(e) If the Enforcement Action taken by Subordinate Mortgagee is the appointment of a
receiver for any of the Mortgaged Property,all of the Rents, issues, profits and proceeds
collected by the receiver will be paid and applied by the receiver solely to and for the
benefit of Senior Mortgagee until the Senior Indebtedness will have been paid in full.
(f) Subordinate Mortgagee consents to and authorizes the release by Senior Mortgagee of
all or any portion of the Mortgaged Property from the lien, operation, and effect of the
Senior Loan Documents. Subordinate Mortgagee waives to the fullest extent permitted
by law, all equitable or other rights it may have(i) in connection with the release of all or
any portion of the Mortgaged Property, (if)to require the separate sale of any portion of
the Mortgaged Property,(III)to require Senior Mortgagee to exhaust its remedies against
all or any portion of the Mortgaged Property or any combination of portions of the
Mortgaged Property or any other collateral for the Senior Indebtedness,er(Iv) to require
Senior Mortgagee to proceed against Borrower, any other party that may be liable for any
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of the Senior Indebtedness (including any general partner of Borrower if Borrower is a
partnership), all or any portion of the Mortgaged Property or combination of portions of
the Mortgaged Property or any other collateral, before proceeding against all or such
portions or combination of portions of the Mortgaged Property as Senior Mortgagee
determines. Subordinate Mortgagee consents to and authorizes, at the option of Senior
Mortgagee, the sale, either separately or together, of all or any portion of the Mortgaged
Property. Subordinate Mortgagee acknowledges that without Notice to Subordinate
Mortgagee and without affecting any of the provisions of this Agreement, Senior
Mortgagee may (i) extend the time for or waive any payment or performance under the
Senior Loan Documents;(ii) modify or amend in any respect any provision of the Senior
Loan Documents; and(lii)modify,exchange, surrender, release, and otherwise deal with
any additional collateral for the Senior Indebtedness.
(g) If any party other than Borrower(including Senior Mortgagee) acquires tit to any of the
Mortgaged Property pursuant to a foreclosure of, or trustee's sale or other exercise of
any power of sale under, the Senior Mortgage conducted in accordance with applicable
law, the lien, operation, and effect of the Subordinate Mortgage and other Subordinate
Loan Documents automatically will terminate with respect to such Mortgaged Property.
6. Miscellaneous Provisions.
(a) If there is any conflict or inconsistency between the terms of the Subordinate Loan
Documents and the terms of this Agreement, then the terms of this Agreement will
control.
(b) This Agreement will be binding upon and will inure to the benefit of the respective legal
successors and permitted assigns of the parties hereto. No other party will be entitled to
any benefits hereunder,whether as a third-party beneficiary or otherwise.
(c) This Agreement does not constitute an approval by Senior Mortgagee of the terms of the
Subordinate Loan Documents.
(d) Each Notice, request, demand, consent, approval or other communication (collectively,
'Notices,"and singly, a"Notice') which is required or permitted to be given pursuant to
this Agreement will be in writing and will be deemed to have been duly and sufficiently
given if (i) personalty delivered with proof of delivery (any Notice so delivered will be
deemed to have been received at the time so delivered), or (ii) sent by a national
overnight courier service (such as FedEx) designating earliest available delivery (any
Notice so delivered will be deemed to have been received on the next Business Day
following receipt by the courier), or(iii)sent by United States registered or certified mail,
return receipt requested, postage prepaid, at a post office regularly ma ntained by the
United States Postal Service (any Notice so sent will be deemed to have been received
on the date of delivery as confirmed by the return receipt), addressed to the respective
parties as follows:
(i) Notices intended for Senior Mortgagee will be addressed to.
Bank of America,N.A.
730 15"Street,NW, 3'°Floor
DCI-701-03-14
Washington,DC 20005
Attention: Loan Administration
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With a copy to:
Miles and Stockbridge P.C.
100 Light Street
Baltimore,Maryland 21202
Attention: Shaun F.Carrick
(ii) Notices intended for Subordinate Mortgagee will be addressed to:
City of Fort Worth
Neighborhood Services Department
1000 Throckmorton Street
Fort Worth,Texas 76102
Attention:Assistant Director
With a copy to:
City Attorney's Office
1000 Throc kmorton Street
Fort Worth,Texas 76102
Attention: Vicki Ganske
Any party, by Notice given pursuant to this Section, may 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 will
only be effective upon receipt. Neither party will refuse or reject delivery of any Notice
given in accordance with this Section.
(e) Nothing in this Agreement or in any of the Senior Loan Documents or Subordinate Loan
Documents will be deemed to constitute Senior Mortgagee as a joint venturer or partner
of Subordinate Mortgagee.
(f) Upon Notice from Senior Mortgagee, Subordinate Mortgagee will execute and deliver
succi additional instruments and documents, and will take such actions, as are required
by Senior Mortgagee in order to further evidence or Implement the provisions and intent
of this Agreement.
(g) This Agreement will be governed by the laws of the State in which the Land is located.
(h) If any one or more of the previsions contained in this Agreement, or any application of
any such provisions, is invalid, illegal, or unenforceable in any respect, the validity,
legality, enforceability, and application of the remaining provisions contained in this
Agreement will not in any way be affected or impaired.
(i) The term of this Agreement will commence on the date of this Agreement and will
continue until the earliest to occur of the following events: (i) the payment of all of the
Senior Indebtedness; provided that this Agreement will be reinstated in the event any
payment on account of the Senior Indebtedness is avoided, set aside, rescinded or
repaid by Senior Mortgagee as described in Section 2(e) of this Agreement, (ii) the
payment of all of the Subordinate Indebtedness other than by reason of payments which
Subordinate Mortgagee is obligated to remit to Senior Mortgagee pursuant to this
Agreement, (iii)the acquisition by Senior Mortgagee or by a third party purchaser of title
to the Mortgaged Property pursuant to a foreclosure of, deed in lieu of foreclosure, or
trustee's sale or other exercise of a power of sale or similar disposition under the Senior
Mortgage, or(iv) with the prior written consent of Senior Mortgagee, without limiting the
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provisions of Section 5(d), the acquisition by Subordinate Mortgagee of title to the
Mortgaged Property subject to the Senior Mortgage pursuant to a foreclosure, or a deed
in lieu of foreclosure, of (or the exercise of a power of sale under) the Subordinate
Mortgage.
(j) No failure or delay on the part of any party to this Agreement in exercising any right,
power, or remedy under this Agreement will operate as a waiver of such right, power, or
remedy, nor will any single or partial exercise of any such right power or remedy
preclude any other or further exercise of such right, power, or remedy or the exercise of
any other right,power or remedy under this Agreement.
(k) Each party to this Agreement acknowledges that if any party falls to comply with its
obligations under this Agreement,the other parties will have all rights available at law and
in equity, including the right to obtain specific performance of the obligations of such
defaulting party and injunctive relief.
(1) Nothing in this Agreement is intended, nor will it be construed, to In any way limit the
exercise by Subordinate Mortgagee of its governmental powers (including police,
regulatory and taxing powers)with respect to Borrower or the Mortgaged Property to the
same extent as if it were not a party to this Agreement or the transactions contemplated
by this Agreement
(m) This Agreement shall inure to the benefit of any subsequent holder of the Senior
Indebtedness.
(n) This Agreement may be amended, changed, modified, altered or terminated only by a
written instrument or written instruments signed by the parties to this Agreement.
(o) This Agreement may be executed in two or more counterparts, each of which will be
deemed an original but all of which together will constitute one and the same instrument.
[Signature and acknowledgment pages follow]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first
above written.
SENIOR MORTGAGEE:
BANK OF AMERICA,N.A.
By,
teMi le D.Bernardo
for Vice President
THE STATE OF +A §
Q� §
COUNTY OF
On this, thelL day of uL 2016, before me, the undersigned Notary Public,
personally appeared Mkheft D. Bernardo, who acknowledged that she is a Senior Vice President of
Bank of America, N.A, a national banking association., and that she, as such officer, being duly
authorized so to do,executed the foregoing Agreement for the purposes therein contained by signing her
name as such officer.
(SEAL)
Notary Ofiblic in and for the State of I)I "
(Printed amec f PAk ftis of�ft
j ?C t _9 ConrlMNbry FF 9G29ti9
My c fission ex re
-1 9VIV
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SUBORDINATE MORTGAGEE:
CITY OF FORT WORTH
By: 1 - �;!=
Name: Femando Costa
Title: Assistant City Manager
ACKNOWLEDGMENT
THE STATE OF TEXAS §
COUNTY OF TARRANT §
On this the 21V day of ' 2016, before me, the undersigned Notary Public,
personally appeared Fernando Costa,who acknowledged to be the Assistant City Manager of the City of
Fort'North, Texas, and that he, as such officer, being duly authorized to do so, executed the foregoing
Agreement for the purposes therein contained by signing his name as such officer.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
o iRIK1NYA t JOHNSON Notary Pu rc of th ate of Texas
Notary Public,State of Texas
~'• '*`?Comm.Ex
Aims 04-17.2078
Notary ID 1230832•0
b. o
Allison Tidwell,Assistant to the City Ski ataxy
was-
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CONSENT OF BORROWER
Borrower acknowledges receipt of a copy of this Subordination Agreement,dated ode t,6e r i ,2`u r�,
by and among Bank of America,N.A.and City of Fort Worth and consents to the agreement of the psinies
set forth In this Agreement
THE BROADMOOR AT WESTERN HILLS LTD., a Texas
limited partnership
By. THE BROADMOOR AT WESTERN HILLS GP LLC,
a Texas limited liability company,its General Partner
By: FORT WORTH HOUSING FINANCE
CORPORATION, a Texas horsing finance
corp,orraation,its Sole Member
13th L
Au�ThWM A.slisaalt c www Ahwo r
STATE OF TEXAS §
COUNTY OF TARRANT §
This instrument was acknowledged before me on 2016,by Aubrey Thagard,
Assistant General Manager of the Fort Worth Housing Finance Corporation., a Texas housing finance
corporation, on behalf of said corporation, Sole Member of The Broadmoor at Western Has GP LLC, a
Texas limited liability company, General Partner olhe Broadmoor at Western Hills Ltd.,a Texas limited
partnership.
No any Public,State of Texas i,I!
NI la,
CMISTANZE DENISE WILUAMS
My Notary ID#130835514
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EXHIBIT A
LEGAL DESCRIPTION
BEING a tract of land situated in the Hays Covington Survey, Abstract No. 256, City of Fort
Worth,Tarrant County,Texas, being all of I.ot 1,Block 1,The Broadmoor at Westem Hills, an
addition to the City of Fort Worth according to the plat recorded in County Clerk's Document
Number D216247626, Plat Records, Tarrant County,Texas, being a part of that certain tract of
land described as Tract Seventeen II by deed to Land Rover, LTD., recorded in Volume 9806,
Page 1448, Deed Records, Tarrant County, Texas, said tract of land bring more particularly
described by metes and bounds as follows:
BEGINNING at a 5/8"iron rod with yellow cap stamped"DUNAWAY ASSOCIATES,LP"set,
(hereinafter called 5/8" YCIR) for the northeast comer of Lot 21, Block 19, Broadmoor, an
addition to the City of Fort Worth,according to the plat recorded in Volume 388-E,Page 20,Plat
Records, Tarrant County, Texas, in the west right-of-way line of Broadmoor Drive (a 60'width
public right-of-way),recorded in Volume 3501,Page 127,Deed Records, Tarrant County,Texas
and the southeast comer of said Land Rover,LTD tract Seventeen II;
THENCE North 83°16'28"West,departing the west right-of-way line of said Broadmoor Drive,
with the north line of said,Block 19,Broadmoor,a distance of 1,292.66 feet to a 5/8"YCIR set
for the northwest corner of Lot 1,said Block 19,Broadmoor Addition,in the east lime of Block 7,
Western Hills Addition Section No. 1,an addition to the City of Fort Worth,according to the plat
recorded in Volume 388-43,Page 18,Plat Records,Tarrant County,Texas;
THENCE North 00°4455"West,departing the north line of said Block 19,Broadmoor Addition,
with the east line of said Block 7, Western Hills Addition, a passing distance of 442.36 feet to
the northeast corner of said Block 7,Western Hills Addition,a passing distance of 632.17 feet to
the northeast comer of Lot 5-R,Block 12,Western Hills Addition,an addition to the City of Fort
Worth,according to the plat recorded in Volume 388-98,Page 52,Plat Records,Tarrant County,
Texas, the southeast corner of Lot 1, Block 95, Western Hills Addition Section No. VII, an
addition to the City of Fort Worth,according the plat recorded in Volume 388-45,Page 81,Plat
Records,Tarrant County,Texas,continuing with cast line of said Lot 1,Block 95,Western Hills
Addition for a total distance of 858.41 feet to a 3/4"iron rod found for the southwest comer of
Lot D,Block 6,West Plaza Addition,an addition to the City of Fort Worth,according to the plat
recorded in Volume 388-44,Page 97,Plat Records,Tarrant County,Texas;
THENCE North 89°53'09" East, departing the east line of said Lot 1, Block 95, Western Hills
Addition,with the south line Lot D, Block 6,a distance of 341.49 feet to a 5/8"YCIR set for the
southeast comer of said Lot D,Block 6,West Plaza Addition;
THENCE South 10°08'15" East, departing the south line of said Lot D, Block 6, West Plaza
Addition, a distance of 70.66 feet to a point from for the beginning of a non-tangent curve to the
left, from which the radius point bears North 80°37'15"East, a distance of 60.00 feet, having a
central angle of 257°49'56", a radius of 60.00 feet and a chord bearing and distance of North
41042'1 7"East-93.37 feet;
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THENCE with said non-tangent curve to the left in a northeasterly direction, an are length of
270.00 feet to a 5/8"YCIR set in the south line of said Lot B,Block 5,West Plaza Addition;
THENCE North 89053'09"East,with the south line of said Lot B,Block 5,West Plaza Addition,
a distance of 632.98feet to a 5/8"YCIR set for the southeast corner of said Lot B, Block 5,West
Plaza Addition;
THENCE South 07°14'51" East, departing the south line of said Lot B, Block 5, West Plaza
Addition and with the west line of Lot A, Block 5, said West Plaza Addition, a distance of
155.71 feet to a point, from which a 112" iron rod found bears South 67°5151"East, a distance
of 0.34 feet;
TI IENCE South 891175 1"East,with the south line of said Lot A,Block 5,West Plaza Addition,
a distance of 212.89 feet to a 5/8" YCIR set in the west right-of-way line of said Broadmoor
Drive;
THENCE South 15002'25" East, with the west right-of-way line of said Broadmoor Drive, a
distance of 8.99 feet to a 112" iron rod found for the beginning of a curve to the right having a
central angle of 21°40'00", a radius of 1,537.70 feet and a chord bearing and distance of South
04'12'25"East-578.03 feet;
THENCE continuing with the west right-of-way line of said Broadmoor Drive and with said
curve to the right in a southeasterly direction,an arc length of 581.49 feet to a 5/8"YCIR set;
THENCE South 069T35" West,a distance of 271.09 feet to the POINT OF BEGINNING and
containing a calculated area of 1,176,714 square feet or 27.014 acres of land.
4838-44C9-9387,v. 2
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