HomeMy Public PortalAboutSubordination Agreement- Katie ManorTHIS INSTRUMENT PREPARED BY,
RECORDED AND RETURN TO:
PNC Bank, National Association
26901 Agoura Road, Suite 200
Calabasas Hills, California 91301-9932
Attn: Ms. Linda Abrar
County: Okaloosa
(Reserved)
Freddie Mac Loan Number: 708643876
Property Name: Katie Manor
PNC Loan # 310401264
SUBORDINATION AGREEMENT
GOVERNMENTAL ENTITY
(Revised 3-1-2014)
l 31430.00550/106158051 v.1
Freddie Mac Loan Number: 708643876
Property Name: Katie Manor
SUBORDINATION AGREEMENT
GOVERNMENTAL ENTITY
(Revised 3-1-2014)
THIS SUBORDINATION AGREEMENT ("Agreement") is entered into as of the 15th day of
November, 2017, by and between (i) PNC BANK, NATIONAL ASSOCIATION, a national
banking association ("Senior Mortgagee") and (ii) the CITY OF CRESTVIEW, a municipal
corporation of the State of Florida, together with its successors and assigns ("Subordinate
Mortgagee").
RECITALS
A. KATIE MANOR, LTD., a limited partnership organized under the laws of the State of
Florida ("Borrower") is the owner of certain land located in Okaloosa County, Florida,
described in Exhibit A ("Land"). The Land is improved with a multifamily rental
housing project ("Improvements").
B. Senior Mortgagee has made or is making a loan to Borrower in the original principal
amount of $3,650,000.00 ("Senior Loan") upon the terms and conditions of a
Multifamily Loan and Security Agreement dated as of November 15, 2017 between
Senior Mortgagee and Borrower ("Senior Loan Agreement") in connection with the
Mortgaged Property. The Senior Loan is secured by a Multifamily Mortgage, Assignment
of Rents and Security Agreement dated as of November 15, 2017 ("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 Loan Agreement dated as of June 15, 2015 between Subordinate Mortgagee
and Borrower ("Subordinate Loan Agreement"), Subordinate Mortgagee has made or is
making a loan to Borrower in the original principal amount of $1,000,000.00
("Subordinate Loan"). The Subordinate Loan is or will be secured by a Mortgage and
Security Agreement and Assignment of Leases dated as of June 15, 2015 ("Subordinate
Mortgage") encumbering all or a portion of the Mortgaged Property.
D. The Senior Mortgage will be recorded in the County Clerk's Office, Okaloosa County,
Florida ("Recording Office"). The Subordinate Mortgage is recorded in the Recording
Office in Official Records Book 3202, Page 4284.
E. The execution and delivery of this Agreement is a condition of Senior Mortgagee's
making of the Senior Loan.
Subordination Agreement— Governmental Entity
131430.00550/106158051v.1 Page I
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:
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," "Imposition Deposits," "Impositions," "Leases,"
"Rents" and "Restoration," 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
other 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 acquire titles 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.
(0 "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,
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131-130.00550/106158051v.1
(g)
setting forth in reasonable detail the Subordinate Mortgage Default(s) and the
Enforcement Actions proposed to be taken by Subordinate Mortgagee.
"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.
(h) "Notice" is defined in Section 6(d).
(i) "Regulatory Agreement" means the Rental Regulatory Agreement dated as of
June 15, 2015 by and between Borrower and Subordinate Mortgagee and recorded
in the Recording Office on June 15, 2015 in Official Records Book 3202, Page
4277.
(i) "Senior Indebtedness" means the "Indebtedness" as defined in the Senior Loan
Agreement.
(k) "Senior Loan Documents" means the "Loan Documents" as defined in the
Senior Loan Agreement.
(1) "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.
(m)
"Senior Mortgagee" means the "Lender" as defined in the Senior Mortgage.
When any other person or entity becomes the legal holder of the Senior Note,
such other person or entity automatically will become Senior Mortgagee.
(n) "Senior Note" means the promissory note or other evidence of the Senior
Indebtedness referred to in the Senior Loan Agreement and any replacement of
the Senior Note.
(o) "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.
(p)
(q)
"Subordinate Loan Documents" means the Subordinate Mortgage, the
Subordinate Note, the Subordinate Loan Agreement, the Regulatory Agreement
and all other documents at any time evidencing, securing, guaranteeing, or
otherwise delivered in connection with the Subordinate Indebtedness, as the same
may be amended.
"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
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for any contrary provision of this Agreement), Subordinate Mortgagee to take an
Enforcement Action.
(r) "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.
(s) "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.
(t) "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) All sums due or currently required to be paid under the Senior Loan
Documents, including any Imposition Deposits.
(ii) All deposits to any replacement reserve, completion/repair 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 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
principal 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 75% 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.
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(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 (ii)
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.
(0 In addition to the limitations set forth above, Subordinate Mortgagee agrees that the
Subordinate Indebtedness will be payable solely from not more than 75% 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, terms, covenants, conditions, operations, and
effects of each of the Senior Loan Documents.
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(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.
(ii) 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 Indebtedness is
$1,000,000.00.
(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.
(b) Without the prior written consent of Senior Mortgagee in each instance, Subordinate
Mortgagee will not do any of the following:
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0) 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 75% 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
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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).
(0 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
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 following 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 Casualty 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
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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 attornment and non -disturbance, on the same terms and conditions 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.
(j) Within 10 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, confirming 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 provisions 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 Senior Loan Documents or to cure defaults under the Subordinate
Loan Documents.
5. 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
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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 Mortgagee 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 after the date of the Notice, cure a non -monetary
Senior Mortgage Default if 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 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, Subordinate 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 respect 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,
or affordability restrictions contained in the Regulatory Agreement, 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 (i) the
expiration of such 90-day period or such longer period as provided in Section 5(a), or (ii)
the delivery by Senior Mortgagee to Subordinate Mortgagee of Senior Mortgagee's
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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 to 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.
(0 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, (ii) 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, or (iv) to require
Senior Mortgagee to proceed against Borrower, any other party that may be liable for any
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 (iii) modify, exchange, surrender, release, and otherwise deal with
any additional collateral for the Senior Indebtedness.
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(g)
If any party other than Borrower (including Senior Mortgagee) acquires title 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 to this Agreement.
No other party will be entitled to any benefits under this Agreement, 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) personally 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 maintained 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:
PNC Bank, National Association
26901 Agoura Road, Suite 200
Calabasas Hills, California 91301
Attention: Kelli A. Tyler
Telephone: (858) 577-3521
(ii) Notices intended for Subordinate Mortgagee will be addressed to:
Subordination Agreement — Governmental Entity Page 12
131430.00550/106158051v.1
with a copy to:
City of Crestview
198 North Wilson Street
Crestview, Florida 32536
Telephone: (850) 682-1560
Facsimile: (850) 682-8077
Attention: Mayor
Ben L. Holley, Esq.
P. O. Box 1238
Crestview, Florida 32536
Telephone: (850) 682-2336
Facsimile: (850) 682-2779
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.
(0 Upon Notice from Senior Mortgagee, Subordinate Mortgagee will execute and
deliver such 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 provisions 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
Subordination Agreement — Governmental Entity Page 13
131 430.00550/ 106158051 v.1
power of sale or similar disposition under the Senior Mortgage; or (iv) with the
prior written consent of Senior Mortgagee, without limiting the 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.
a) 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 fails 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.
(I)
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 may be assigned at any time by Senior Mortgagee to any
subsequent holder of the Senior Note.
(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]
Subordination Agreement — Governmental Entity Page 1=4
131.130.00550/106158051v.1
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year
first above written.
Witnesses: SENIOR MORTGAGEE:
Name:
Name:
PNC BANK, NATIONAL ASSOCIATION,
a national banking association
By:
Name: Kelli A. Tyler
Title: Vice President
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On November _, 2017, before me, , a Notary Public,
personally appeared KELLI A. TYLER, who proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument and acknowledged to me that
she executed the same in her authorized capacity, and that by her signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:
expires:
(Seal)
Subordination Agreement — Governmental Entity
131430.00550/106158051v.1 Page S-1
A 1-1'BST:
By:
City Clerk
SUBORDINATE MORTGAGEE:
CITY OF CRESTVIEW, a
municipal corporation of the State of Florida
B
STATE OF FLOgIDA
COUNTY OF O 0SA_
e for go' g ' strument was acknowledgect ore me this i31#1 day of November,
2017 b , _ % / e- , Mayor kir-41-M. , City Clerk and respectively, of the
CITY OF CRESTVIEW, a municipal corporation of t e State of Florida, on behalf of said
corporation. Such persons are . ersonally known to n_227 or have produced
as identification.
Form Approved:
6A,i6-J\
Office of General Counsel
NOT + ' Y PUB IC -STATE OF LORIDA
Print Name: /Veen cJ OF
Commission No.: F/G /1/544,0
OFFICIAL NOTARY SEAL
Natasha S. Peacock
Commission No. FF 145460
My Commission Expires
July 27, 2018
Subordination Agreement — Governmental Entity Page S-2
13I-130.00550/106158051v.1
CONSENT OF BORROWER
Borrower acknowledges receipt of a copy of this Subordination Agreement, dated November
, 2017, by and between PNC BANK, NATIONAL ASSOCIATION and CITY OF
CRESTVIEW and consents to the agreement of the parties set forth in this Agreement.
Witnesses: BORROWER:
Name:
Name:
STATE OF FLORIDA
COUNTY OF DUVAL
KATIE MANOR, LTD., a
Florida limited partnership
By: KATIE MANOR GP, LLC, a
Florida limited liability company,
its general partner
By: VESTCOR, INC., a
Florida corporation,
its Manager
By:
Name: Jason O. Floyd
Title: Vice President
The foregoing instrument was acknowledged before me this day of November, 2017
by JASON O. FLOYD, VICE PRESIDENT of VESTCOR, INC., a Florida corporation,
MANAGER of KATIE MANOR GP, LLC, a Florida limited liability company, GENERAL
PARTNER of KATIE MANOR, LTD., a Florida limited partnership. He is personally known
to me or has produced (type of identification) as
identification.
Notary Public
Printed Name:
My Commission Expires:
Commission #
Subordination Agreement — Governmental Entity Page S-3
131 430.00550/ 10615805 l v.1
EXHIBIT "A"
LEGAL DESCRIPTION
A parcel of land situated in Section 28, Township 3 North, Range 23 West, Okaloosa County,
Florida; being a portion of the North half of the Southwest quarter of the Northwest quarter
thereof, as described in Official Records Book 2937, Page 478, of the Public Records of
Okaloosa County, Florida; and being more particularly described as follows:
Beginning at the Northwest corner of the Southwest quarter of the Northwest quarter proceed S.
88°21'32" E. along the North line of aforesaid North half for a distance of 575.00 feet; thence
departing said North line proceed S. 01°58'18" W. for a distance of 506.13 feet; thence proceed
N. 88°22'49" W. for a distance of 577.09 feet to the West line of aforesaid Section 28; thence
proceed N. 02°12'29" E. along said West line for a distance of 506.36 feet to the Point of
Beginning.
#4277590 vl35247-0131