HomeMy WebLinkAbout2003-05-20; City Council; 17176 Exhibit 6; Multi-Family Housing Revenue BondsRECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Thomas A. Hauser, Esquire
Ballard Spahr Andrews & In ersoll, LLP
300 East Lombard Street, 19 Floor
Baltimore, Maryland 21202
t!
(Space Above for Recorder’s Use Only)
ASSIGNMENT AND INTERCREDITOR AGREEMENT
by and among
CITY OF CARLSBAD,
[TRUSTEE],
as Trustee,
and
FANNIE MAE,
and
acknowledged, accepted and agreed to by
CIC CALAVERA, L.P.
Relating to
[$S,OOO,OOO]
City of Carlsbad
Multifamily Housing Revenue Bonds
(Mariposa Apartments)
2003 Series A
Dated as of
LA1 : 1004255.2
TABLE OF CONTENTS
Page
SECTION 1 .
SECTION 2 .
DEFINITIONS ................................................................................................. 1
ASSIGNMENT ................................................................................................ 6
Section 2.1
Section 2.2
Section 2.3
Section 2.4
2.4.( 1)
2.4.(2)
2.4.(3)
2.4.(4)
Section 2.5
Section 2.6
2.6.(1)
2.6. (2)
2.6. (3)
Section 2.7
Section 2.8
Section 2.9
Section 2.10
Section 2.11
2.1 1.(1)
2.11 . (2)
Section 2.12
2.12.( 1)
2.12.(2)
2.12.(3)
Assignment ........................................................................................... 6
Assignment of Mortgage Loan Rights to the Credit Provider ............. 7
Assignment of Mortgage Loan Payments Interest to Trustee .............. 7
Effect of the Issuer’s Assignments ....................................................... 8
Effect of Assignment of Mortgage Loan Rights and Mortgage
Loan Payments Interest ........................................................................ 8
Assignment of Mortgage Loan Upon Payment or Redemption
of Bonds ............................................................................................... 9
Assignment of Mortgage Loan Without Payment or
Redemption of Bonds ........................................................................... 9
Trustee’s Assignment ......................................................................... 10
Exercise of Assigned Rights .............................................................. 10
Exclusive Exercise of Rights by the Credit Provider; Exclusive
Exercise of Rights by the Trustee ...................................................... 10
The Credit Provider ............................................................................ 10
Trustee ................................................................................................ 11
Disclaimer of Assumption of Obligations .......................................... 12
Confirmation of Assignment .............................................................. 12
Further Assurances ............................................................................. 12
No Other Encumbrances .................................................................... 12
Consent Required for Amendments ................................................... 12
Insurance; Condemnation ................................................................... 13
Insurance ............................................................................................ 13
Condemnation .................................................................................... 13
Possession of Mortgage Note and Security Instrument: Records
and Books of Account: Examination of Records and Books of
Account .............................................................................................. 14
Possession of Mortgage Note and Security Instrument ..................... 14
Records and Books of Account .......................................................... 14
Examination of Records and Books of Account ................................ 14
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TABLE OF CONTENTS
(continued)
Page
Section 2.13 Disposition of Mortgage Loan ........................................................... 14
Credit Provider Assignment ............................................................... 14
DISPOSITION OF CREDIT FACILITY ...................................................... 15
LIMITATIONS ON ISSUER ......................................................................... 15
EFFECT OF DEFAULT ................................................................................ 15
MORTGAGE LOAN SERVICING ............................................................... 15
BORROWER’S ACKNOWLEDGMENTS .................................................. 16
REGULATORY AGREEMENT ................................................................... 16
Monitoring of Regulatory Agreement ................................................ 16
Termination of Regulatory Agreement ............................................. 16
Right To Enforce Compliance ............................................................ 16
Notices of Violations of the Regulatory Agreement .......................... 16
Cure Rights ......................................................................................... 17
ISSUER’S COVENANTS ............................................................................. 17
2.13.(1)
SECTION 3 .
SECTION 4 .
SECTION 5 .
SECTION 6 .
SECTION 7 .
SECTION 8 .
Section 8.1
Section 8.2
Section 8.3
Section 8.4
Section 8.5
SECTION 9 .
Section 9.1 Limitations on Issuer .......................................................................... 17
Section 9.2 Enforcement ....................................................................................... 17
Section 9.3 Specific Performance ......................................................................... 18
AMENDMENT OF AGREEMENTS ............................................................ 19
REPRESENTATIONS; WARRANTIES AND COVENANTS ................... 19
Representations; Warranties and Covenants of the Issuer ................. 19
Representations and Warranties of the Credit Provider ..................... 20
Representations, Warranties and Covenants of the Borrower ............ 20
SECTION 10 .
SECTION 1 1 .
Section 11.1
Section 11.2
Section 11.3
Section 11.4 Representations and Warranties of the Trustee .................................. 21
SECTION 12 .
SECTION 13 .
SECTION 14 .
SECTION 15 .
SECTION 16 .
SECTION 17 .
SECTION 18 .
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CONTROL ON RIGHT OF REDEMPTION ................................................ 22
EXCULPATION ............................................................................................ 22
DISCLAIMERS; ACKNOWLEDGMENTS ................................................. 22
TERMINATION ............................................................................................ 22
LIABILITY OF BORROWER ...................................................................... 23
INCORPORATION OF SECURITY INSTRUMENT .................................. 23
NOTICE .......................................................................................................... 23
..
TABLE OF CONTENTS
(continued)
Page
MISCELLANEOUS ....................................................................................... 24 SECTION 19 .
Section 19.1
Section 19.2
Section 19.3
Section 19.4
Section 19.5
Section 19.6
Section 19.7
Section 19.8
Section 19.9
Section 19.10
Section 19.11
Section 19.12
Section 19.13
Section 19.14
Section 19.15
Section 19.16
Waivers ............................................................................................... 25
Amendments ....................................................................................... 25
Governing Law ................................................................................... 25
WAIVER OF JURY TRIAL .............................................................. 25
Severability ......................................................................................... 25
Additional Assignment ....................................................................... 25
No Merger of Interests ....................................................................... 26
Reimbursement of Assignees ............................................................. 26
Incorporation of Rights ...................................................................... 26
Counterparts ...................................................................................... -26
Assignment Without Recourse ........................................................... 26
Remarketing Agreement .................................................................... 26
Approval of Documents ..................................................................... 26
Consent of the Credit Provider ........................................................... 26
Certain Notices to the Credit Provider and Loan Servicer ................. 27
Bailee .................................................................................................. 27
SECTION 20 .
SECTION 2 1 .
SECTION 22 .
EXERCISE OF RIGHTS ............................................................................... 27
REMEDIES CUMULATIVE ........................................................................ 27
OBLIGATIONS LIMITED ............................................................................ 27
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the Table of Contents/Authorities.
MULTIFAMILY NOTE
U.S. [$5,000,000]
City of Carlsbad, California
As of [DATE]
The meanings of capitalized terms
not otherwise defined in this
Mortgage Note are set forth in
Schedule A to this Mortgage Note.
FOR VALUE RECEIVED, the undersigned, CIC CALAVERA, L.P. (the “Borrower”),
a California limited partnership, promises to pay to the order of the [CITY OF CARLSBAD
(the “Issuer”), a municipal corporation - confirm this should be Issuer and not Trustee] and its
successors, assigns and transferees, or order, the principal sum of Five Million Dollars and
No/100s (U.S. [$5,000,000]), together with interest on the unpaid principal balance of this
Multifamily Note (the “Mortgage Note”) at the following rates of interest (in each instance, the
“Mortgage Note Rate,” the components of which are more fully described in Paragraph 1 of this
Mortgage Note): (a) % per annum for the period beginning on the Accrual Date (as
specified below) to the first day of the month immediately preceding the Initial Remarketing
Date (the “Initial Adjustment Date”). Effective as of the Initial Adjustment Date, the Mortgage
Note Rate shall be a per annum rate equal to the Remarketing Rate which takes effect on the
Initial Remarketing Date plus such additional basis points of interest (“Additional Basis Points”)
as shall be necessary to ensure that (a) the payments under this Mortgage Note will at all times
be sufficient to pay when due the principal and interest on the Bonds and (b) the Mortgage Note
Rate will be sufficient to (1) cover Set Rate Interest and (2) produce a Pass-Through Rate
sufficient to cover Third Party Fees to the extent included, in accordance with paragraph (i) of
Section 4.3 of the Financing Agreement, in, and payable out of, the Mortgage Note Rate,
(collectively, as to clauses (a) and (b), the “Required Mortgage Note Rate Coverage”), all as
shown in a then current Cash Flow Projection and Verification Report. If the Bonds Outstanding
are remarketed on a Remarketing Date after the Initial Remarketing Date, the Mortgage Note
Rate shall, effective as of the first day of the month immediately preceding such Remarketing
Date, be a per annum rate equal to the Remarketing Rate which takes effect on such Remarketing
Date plus such Additional Basis Points as shall be necessary to ensure that the Mortgage Note
Rate produces the Required Mortgage Note Rate Coverage, all as shown in then current Cash
Flow Projection and Verification Report.
Interest shall begin to accrue on this Mortgage Note on [DATE] (the “Accrual Date”) and
shall accrue continuously thereafter until this Mortgage Note is paid in full.
The principal of and interest on this Mortgage Note shall be payable monthly, as follows:
this Mortgage Note shall be payable interest only, in arrears, at the Mortgage Note Rate, in
consecutive monthly installments, such monthly installments of interest to be due and payable on
the first day of each month beginning on [DATE] (the “Amortization Commencement Date”),
until the entire indebtedness evidenced by this Mortgage Note is paid in full, provided that any
remaining indebtedness, including principal, accrued interest and any and all other sums due
under this Mortgage Note, shall, if not sooner paid, be due and payable on [DATE] (the
“Maturity Date”), provided, further, that the outstanding principal balance of this Mortgage Note
LA1 : 1004261.2
shall, based on a then current Cash Flow Projection and Verification Report, be reamortized as of
each Remarketing Date, so as to change the amount of each subsequent installment of principal
and interest to the amount necessary to amortize the then remaining principal balance of this
Mortgage Note at an interest rate equal to the adjusted Mortgage Note Rate over a period of 360
months minus the number of months in which regularly scheduled monthly installments of
principal and interest shall have become due commencing with the Amortization
Commencement Date through the first day of the month immediately preceding such
Remarketing Date, with the first such revised payment being due on the first day of the month in
which such Remarketing Date occurs, provided, however, that all remaining indebtedness
evidenced by this Mortgage Note, if not sooner paid, shall be due and payable on the Maturity
Date set forth above, but, in any event, not later than January 1, 2036. The Borrower shall not
make any regularly scheduled payment of interest or principal and interest earlier than the date
such payment is due.
The Borrower shall, contemporaneously with the execution and delivery of this Mortgage
Note, pay, or arrange for payment, to [TRUSTEE], a [NATIONAL BANKING
ASSOCIATION DULY ORGANIZED AND VALIDLY EXISTING UNDER THE LAWS
OF THE UNITED STATES OF AMERICA] [OTHER TYPE OF ENTITY], not in its
individual or corporate capacity, but solely as trustee (the “Trustee”), under the Trust Indenture
(the “Indenture”), dated as of the date hereof, between the Issuer and the Trustee, as an
additional payment obligation under this Mortgage Note, the sum of
which is the Initial Debt Service Deposit provided for in the Indenture, and required, by
Section 4.2(3) of the Financing Agreement, to be paid or provided for by the Borrower to the
Trustee, for deposit by the Trustee into the General Account of the Revenue Fund created under
the Indenture.
Dollars ($ 1, ’
The Borrower further promises to pay, when due, any and all other sums which at any
time are due and payable under this Mortgage Note.
Subject to the provisions of Paragraph 8 of this Mortgage Note, the principal, interest and
other amounts payable under this Mortgage Note shall be paid or be caused to be paid by the
Borrower to the Issuer c/o Red Mortgage Capital, Inc. (the “Loan Servicer”), at 150 E. Gay
Street, 22”d Floor, Columbus, Ohio 43215, or such other place as the Loan Servicer may
designate in writing.
1. Mortgage Note Rate. This Mortgage Note shall bear interest at the Mortgage Note
Rate in effect from time to time, computed as provided in Paragraph 1.3 of this Mortgage Note.
The Mortgage Note Rate comprises:
(i) a fixed pass-through rate of interest (the “Pass-Through Rate”), which is
the applicable fixed rate of interest per annum set forth in Paragraph 1.1 of this Mortgage Note;
and
(ii) the Set Rate Interest provided for in Paragraph 1.2 of this Mortgage Note.
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1.1 Pass-Through Rate. The Pass-Through Rate is, beginning on and
including the Accrual Date to but not including the first day of the month immediately preceding
the Initial Remarketing Date, -% per annum, which Pass-Through Rate includes an amount,
expressed as a percentage, sufficient to pay Third Party Fees to the extent included, in
accordance with paragraph (i) of Section 4.3 of the Financing Agreement in, and payable out of,
the Mortgage Note Rate, and thereafter, the Pass-Through Rate shall be equivalent to the
Mortgage Note Rate in effect from time to time, as described in the first paragraph of this
Mortgage Note, minus Set Rate Interest.
the Facil
Servicer.
1.2 Set Rate Interest. Set Rate Interest comprises a percentage equivalent to
ity Fee payable to the Credit Provider and the Servicing Fee payable to the Loan
Set Rate Interest accrues from and including the Accrual Date, to, but not including,
the date this Mortgage Note is paid in full, and is payable on the first day of each month, in
arrears, as part of the Mortgage Note Rate, to and including the date this Mortgage Note is paid
in full. Set Rate Interest payable on the first day of each month to and including the date this
Mortgage Note is paid in full, shall, as part of the Mortgage Note Rate, be paid to and received
by the Loan Servicer, and retained by the Loan Servicer as to the Servicing Fee component of
Set Rate Interest and remitted to the Credit Provider as to the Facility Fee component of Set Rate
In teres t.
1.2(1) Facility Fee. The Facility Fee, expressed as a percentage, is
-% per annum, or - “basis points” per annum, of the outstanding principal balance of the
Mortgage Loan.
1.2(2) Servicing Fee. The Servicing Fee, expressed as a percentage,
is -% per annum, or - “basis points” per annum, of the outstanding principal balance of the
Mortgage Loan.
1.3 Computation of Interest. The Mortgage Note Rate shall be computed on
the basis of a 360-day year comprised of twelve (12) 30-day months.
2. Taxes, Insurance, Escrows and Reserves. All payments for taxes, insurance or for
deposit into the Replacement Reserve, if applicable, or to fund any other escrow or reserve
required to be established, funded or created pursuant to any Mortgage Loan Document, shall be
due and payable to the Loan Servicer on the first day of each month, and in accordance with the
applicable Mortgage Loan Documents.
3. Additional Payment Obligations.
3.1 Activity Fee. The Borrower promises to pay to the Credit Provider, when
due, the Activity Fee provided for in the Reimbursement Agreement and to reimburse, indemnify
and compensate the Credit Provider for all amounts provided by the Credit Provider under the
Credit Facility.
3.2 Remarketing Fees, Costs and Expenses. At least seven (7) Business Days
prior to each Remarketing Date, the Borrower shall pay to the Trustee an amount equal to the
estimated fees, costs and expenses to be incurred in connection with the remarketing of the
Bonds Outstanding on the Remarketing Date (which shall include bond printing and registration
Multifamily Note
LA1 : 1004261.2
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costs, fees and out-of-pocket expenses of the Trustee, the Issuer, the Loan Servicer, the Credit
Provider, the Remarketing Agent, Bond Counsel, tax counsel, counsel to the Trustee, counsel to
the Issuer, counsel to the Loan Servicer and counsel to the Credit Provider, costs of funds
advanced by the Remarketing Agent, and such other fees, costs and expenses reasonably
incurred or expected to be incurred in connection with or estimated to be attributable to the
remarketing of the Bonds Outstanding) as set forth in a written notice to the Borrower from the
Trustee given not less than twelve (12) Business Days prior to the Remarketing Date provided,
that if the notice from the Trustee shall not have been given to the Borrower at least twelve (12)
Business Days prior to the Remarketing Date, such payment by the Borrower shall nonetheless
be due seven (7) Business Days prior to the Remarketing Date. In the event that the Borrower
shall fail to pay the estimated remarketing fees, costs and expenses (or actual remarketing fees,
costs and expenses in excess of such estimate as provided below) on or prior to the date such
payment is due, such failure shall, at the option of the Loan Servicer or the Credit Provider,
constitute a default under this Mortgage Note, in which event the then outstanding principal
balance of this Mortgage Note, together with an additional amount equal to all interest on such
principal balance which has accrued and has not been paid and all interest which would (if the
amount so declared to be due were not paid) accrue on such principal balance to and including
the first day of the month immediately following the month in which the amount so declared to
be due is paid, and all other amounts then due and payable under this Mortgage Note, shall
become immediately due and payable. If any remarketing fees, costs or expenses are advanced
by the Loan Servicer or the Credit Provider on behalf of the Borrower, such amount so advanced
shall constitute additional indebtedness due under this Mortgage Note and shall bear interest
until paid in full at the Default Rate. In the event that Bonds Outstanding are remarketed on a
Remarketing Date and the Loan Servicer or the Credit Provider shall receive reimbursement
from the Trustee of any portion of the estimated remarketing fees, costs and expenses paid by the
Borrower in excess of actual expenses incurred, such reimbursement shall be applied, provided
no default shall then exist under this Mortgage Note, to the next ensuing payments due under this
Mortgage Note. In the event that the Bonds Outstanding are remarketed, and the Trustee shall
give notice to the Borrower that the actual fees, costs and expenses incurred with respect to the
remarketing exceeded the estimated amount of the remarketing expenses paid to the Trustee by
the Borrower, the Borrower shall pay to the Trustee an amount equal to such excess amount
within fifteen (15) days after such notice by the Trustee is given. In the event that the Borrower
shall have paid any amounts to the Trustee for payment of the estimated fees, costs and expenses
of remarketing and the Bonds Outstanding are not remarketed for any reason, the Loan Servicer
or the Credit Provider shall be entitled to receive and hold the amounts of any reimbursement of
such fees, costs and expenses paid to the Loan Servicer or the Credit Provider by the Trustee
until such time as the Bonds Outstanding are subsequently remarketed or redeemed, in which
event any such amounts may be paid by the Loan Servicer or the Credit Provider to the Trustee
for payment of fees, costs and expenses incurred with respect to such remarketing or until
redemption of the Bonds Outstanding by reason of such failure of remarketing, in which event
such amount shall be applied to the outstanding principal balance of this Mortgage Note.
4. The Borrower’s Continued Obligation in the Event of any Disgorgement.
Notwithstanding any payment by the Borrower under this Mortgage Note or the occurrence of
the Maturity Date, this Mortgage Note shall not be extinguished or canceled, but shall remain in
effect, and the Borrower’s obligation to make payments under this Mortgage Note shall continue
so long as, and to the extent that, the Credit Provider is obligated under the Credit Facility to
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make a Bankruptcy-Related Advance (as defined in the Credit Facility) and until such time as all
sums due under this Mortgage Note have been paid in full.
5. Issuance of Bonds to Fund Mortgage Loan. This Mortgage Note is executed and
delivered in connection with the issuance of the Bonds by the Issuer and evidences the Mortgage
Loan made by the Issuer to the Borrower; the Mortgage Loan is funded with the Net Bond
Proceeds in the amount of this Mortgage Note. This Mortgage Note is secured by the Security
Instrument; the Mortgage Loan is otherwise documented, evidenced and secured by the other
Mortgage Loan Documents. The Borrower acknowledges that the Issuer intends to assign this
Mortgage Note to the Credit Provider and the Trustee, as their interests may appear, pursuant to
the Assignment. The Credit Provider is, pursuant to the Credit Facility, providing credit
enhancement for the Mortgage Loan and liquidity support for the Bonds Outstanding on each
Remarketing Date so long as the Credit Facility remains in effect.
The Borrower acknowledges that the Mortgage Loan has been fully funded and has an
unpaid principal balance equal to the Mortgage Loan Amount as of the Accrual Date.
6. Method of Payment. All payments on this Mortgage Note shall be made in lawful
money of the United States of America and in immediately available funds.
7. Notice of Payments; Application of Payments.
7.1 Notice of Payments. With each payment on this Mortgage Note, the
Borrower shall specify in detail the amount of such payment constituting (a) interest at the Pass-
Through Rate, (b) Set Rate Interest, including interest allocable to the Facility Fee and to the
Servicing Fee, (c) principal, (d) interest at the Default Rate, if applicable, (e) late charges, if
applicable, (f) a deposit for escrows for taxes, insurance, the Replacement Reserve, and, if
applicable, other impositions and reserves, (8) a payment pursuant to any Collateral Agreement
(as defined in the Security Instrument) and (h) any other amounts included in such payment
(with a description of the nature and purpose of such amounts).
7.2 Application of Payments. If at any time the holder of this Mortgage Note
receives, from the Borrower or otherwise, any amount applicable to the Indebtedness which is
less than all amounts due and payable at such time, the Credit Provider, as holder of the
Mortgage Loan Rights, may direct the application of that payment to amounts then due and
payable in any manner and in any order determined by the Credit Provider in its discretion. The
Borrower agrees that neither the acceptance of a payment from the Borrower in an amount that is
less than all amounts then due and payable nor the application of such payment shall constitute
or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction.
If the holder of this Mortgage Note accepts a guaranty of only a portion of the Indebtedness,
Borrower hereby waives its right under California Civil Code Section 2822(a) to designate the
portion of the Indebtedness which shall be satisfied by any guarantor’s partial payment.]
8. Reserved.
9. Prepayment. This Mortgage Note may not be prepaid except as expressly provided in
this Paragraph 9.
Multifamily Note
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ALTHOUGH THE BORROWER MAY HAVE THE RIGHT TO PREPAY THE
MORTGAGE LOAN IN ACCORDANCE WITH THIS MORTGAGE NOTE, THE
REIMBURSEMENT AGREEMENT MAY LIMIT THE BORROWER’S EXERCISE OF
THESE RIGHTS WITHOUT THE WRITTEN CONSENT OF THE CREDIT PROVIDER OR
DURING CERTAIN PERIODS. THE BORROWER MAY BE REQUIRED TO PAY A
TERMINATION FEE TO THE CREDIT PROVIDER. PREPAYMENTS ARE SUBJECT TO
LOAN SERVICING UNDER THE REIMBURSEMENT AGREEMENT. SEE THE
REIMBURSEMENT AGREEMENT FOR ALL DETAILS.
No prepayments, in whole or in part, are permitted prior to the last business day of
[DATE], except (a) involuntary prepayments, (b) prepayments from (1) insurance proceeds or
(2) the proceeds of any condemnation award, in either case, in connection with a special
mandatory redemption of the Bonds, in whole or in part, pursuant to Section 3.3(4) of the
Indenture, or (d) other prepayments expressly permitted or required by this Mortgage Note.
On or after the last business day of [DATE], the Borrower may, at the option of the
Borrower, voluntarily prepay this Mortgage Note, in whole, but not in part (it being understood
and agreed that the right to optionally prepay this Mortgage Note other than with Available
Moneys shall be subject to, and evidenced by, the prior written consent of the Credit Provider
provided to the Trustee and the Loan Servicer), provided that, as a prerequisite to the right to
make any such voluntary prepayment in whole, the Borrower shall give written notice of such
voluntary prepayment to the Loan Servicer, the Credit Provider and the Trustee not less than
sixty (60) days prior to the date of such prepayment, and provided, further, that, as a condition to
acceptance of the prepayment, the Loan Servicer and the Credit Provider shall have been
provided with an Available Moneys Certificate. Any prepayment in whole shall be made on the
last Business Day of a month.
If the Bonds Outstanding are remarketed on a Remarketing Date (including the Initial
Remarketing Date) for a term of not less than ten (10) years, the Borrower may, at the
Borrower’s option, make a voluntary prepayment of the outstanding principal balance of this
Mortgage Note, in whole, but not in part, on the last Business Day of any month during the
period beginning on the last Business Day of the second month preceding the seventh
anniversary of the most recent Remarketing Date and ending on the last Business Day of the
second month preceding the next scheduled Remarketing Date, upon payment of an amount
equal to one hundred percent (100%) of the principal amount to be prepaid together with accrued
interest on such principal amount to the first day of the month following the date of such
voluntary prepayment and any other sums due the Loan Servicer or the Credit Provider at the
time of such voluntary prepayment (it being understood and agreed that the right to optionally
prepay this Mortgage Note other than wholly with Available Moneys shall be subject to, and
evidenced by, the prior written consent of the Credit Provider provided to the Trustee and the
Loan Servicer), provided that, as a prerequisite to the right to make any such voluntary
prepayment, the Borrower shall give written notice of such voluntary prepayment to the Loan
Servicer, the Credit Provider and the Trustee not less than sixty (60) days prior to the date of
such voluntary prepayment, and provided, further, that, as a condition to acceptance of the
voluntary prepayment, the Loan Servicer and the Credit Provider shall have been provided with
an Available Moneys Certificate.
Multifamily Note
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If the Bonds Outstanding are remarketed on a Remarketing Date (including the Initial
Remarketing Date) for a term of more than four (4) years but less than ten (10) years, the
Borrower may, at the Borrower’s option, make a voluntary prepayment of the outstanding
principal balance of this Mortgage Note, in whole, but not in part, on the last Business Day of
any month during the period beginning on the last Business Day of the second month preceding
the second anniversary of the most recent Remarketing Date and ending on the last Business Day
of the second month preceding the next scheduled Remarketing Date, upon payment of an
amount equal to one hundred percent (100%) of the principal amount to be prepaid together with
accrued interest on such principal amount to the first day of the month following the date of such
voluntary prepayment and any other sums due to the Loan Servicer or the Credit Provider at the
time of such voluntary prepayment (it being understood and agreed that the right to optionally
prepay this Mortgage Note other than wholly with Available Moneys shall be subject to, and
evidenced by, the prior written consent of the Credit Provider provided to the Trustee and the
Loan Servicer), provided that, as a prerequisite to the right to make any such voluntary
prepayment, the Borrower shall give written notice of such voluntary prepayment to the Loan
Servicer, the Credit Provider and the Trustee not less than sixty (60) days prior to the date of
such voluntary prepayment, and provided, further, that, as a condition to its acceptance of the
voluntary prepayment, Loan Servicer and the Credit Provider shall have been provided with an
Available Moneys Certificate.
If the Bonds Outstanding are remarketed on a Remarketing Date (including the Initial
Remarketing Date) for a term of more than one (1) year but less than four (4) years, the
Borrower may, at the Borrower’s option, make a voluntary prepayment of the outstanding
principal balance of this Mortgage Note, in whole, but not in part, on the last Business Day of
any month during the period beginning on the last Business Day of the second month preceding
the first anniversary of the most recent Remarketing Date and ending on the last Business Day of
the second month preceding the next scheduled Remarketing Date, upon payment of an amount
equal to one hundred percent (100%) of the principal amount to be prepaid together with accrued
interest on such principal amount to the first day of the month following the date of such
voluntary prepayment and any other sums due the Loan Servicer or the Credit Provider at the
time of such voluntary prepayment (it being understood and agreed that the right to optionally
prepay this Mortgage Note other than wholly with Available Moneys shall be subject to, and
evidenced by, the prior written consent of the Credit Provider provided to the Trustee and the
Loan Servicer), provided that, as a prerequisite to the right to make any such voluntary
prepayment, the Borrower shall give written notice of such voluntary prepayment to the Loan
Servicer, the Credit Provider and the Trustee not less than sixty (60) days prior to such
prepayment, and provided, further, that, as a condition to its acceptance of the voluntary
prepayment, the Loan Servicer and the Credit Provider shall have been provided with an
Available Moneys Certificate.
If the Bonds Outstanding are remarketed for a term not exceeding one (1) year, this
Mortgage Note may not be voluntarily prepaid prior to the last Business Day of the second
month preceding the next scheduled Remarketing Date.
The Borrower shall have no right to make a partial prepayment of the principal balance of
this Mortgage Note (a) except from insurance proceeds or the proceeds of a condemnation award
in connection with a special mandatory redemption of Bonds pursuant to paragraph (ii) of
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7 Mariposa Apartments
Section 3.3(4) of the Indenture, (b) unless the Loan Servicer or the Credit Provider (as holder of
the Mortgage Loan Rights) shall require a partial prepayment of the outstanding principal
balance of this Mortgage Note after a default under this Mortgage Note, the Security Instrument
or any of the other Mortgage Loan Documents, whether through the application of funds held by
the Loan Servicer pursuant to any Mortgage Loan Document against the indebtedness secured by
the Security Instrument or otherwise, or (c) unless the Loan Servicer or the Credit Provider shall
for any other reason accept or direct a partial prepayment by the Borrower of the principal
balance of this Mortgage Note.
Any permitted or required partial prepayment of the outstanding principal balance of this
Mortgage Note shall (a) be made on the last Business Day of a month, (b) be applied against the
outstanding principal balance of this Mortgage Note and (c) not extend or postpone the due date
of any monthly installments due following the prepayment. Provided that the Trustee and the
Credit Provider shall have received the Cash Flow Projection and Verification Report required
by Section 3.7 of the Indenture, the amount of each of such subsequent monthly installments
shall be decreased to the extent necessary to amortize the then remaining principal balance of
this Mortgage Note at the Mortgage Note Rate then in effect under this Mortgage Note in level
monthly payments of principal and interest over a period equal to 360 months minus the number
of months which have elapsed since, and including the month of, the Amortization
Commencement Date and in which regularly scheduled monthly installments of principal and
interest shall have become due, commencing with the Amortization Commencement Date,
provided, however, that all indebtedness evidenced by this Mortgage Note shall, if not sooner
paid, be due and payable on the Maturity Date set forth in this Mortgage Note. The Borrower
shall, at the direction of the Loan Servicer or the Credit Provider, execute an allonge to this
Mortgage Note to reflect and implement the reamortization of the outstanding unpaid principal
balance of this Mortgage Note in level monthly installments of principal and interest over the
remaining term to maturity.
Notwithstanding any other provision of this Mortgage Note to the contrary, this Mortgage
Note is, at the option and written direction of the Credit Provider (as holder of the Mortgage
Loan Rights), subject to involuntary prepayment by the Borrower, at any time, in whole, upon
acceleration of payment of this Mortgage Note or acceleration of the Bonds, or in whole or in
part, in amounts sufficient, and in time, to pay, when due, the redemption price of Bonds to be
redeemed or paid upon any special mandatory redemption of Bonds pursuant to the Indenture.
The requirement that the Borrower give written notice of a voluntary prepayment to the
Loan Servicer, the Trustee and the Credit Provider not less than sixty (60) days prior to the date
of the voluntary prepayment shall not apply to (a) any prepayment to be made from (1) insurance
proceeds or (2) the proceeds of a condemnation award, or (b) any partial prepayment permitted
or required by this Mortgage Note, provided that the Borrower shall give written notice of any
such prepayments at the earliest practicable time.
Each written notice of prepayment given pursuant to this Mortgage Note shall state the
date on which the prepayment will be made, the amount of principal to be prepaid, the reason for
the prepayment and the nature of all amounts required to be paid by the Borrower in connection
with the prepayment, as set forth in the next paragraph of this Mortgage Note.
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If the Borrower makes a prepayment for any reason, including, without limitation, an
optional prepayment, as permitted by the terms of this Mortgage Note, and an involuntary
prepayment, the Borrower shall pay, in addition to paying the principal of this Mortgage Note to
be prepaid, as an additional obligation under this Mortgage Note, the following:
(i) all accrued and unpaid interest due on this Mortgage Note through the date
of prepayment or, if the prepayment is in whole, all accrued and unpaid interest due on this
Mortgage Note to the first day of the month following the date of prepayment;
(ii) all other amounts due and payable under the Mortgage Loan Documents
as of the date of prepayment including, but not limited to, all amounts which the Loan Servicer
or the Credit Provider has advised the Borrower are due and payable at the time of such
prepayment ;
(iii) any Termination Fee due under the Reimbursement Agreement;
(iv) all other amounts due and payable upon such prepayment and the
corresponding redemption of a corresponding principal amount of Bonds under the Bond
Documents including premium, if any, payable to the Bondholders of the Bonds to be redeemed
and interest to accrue on the principal amount of the Bonds to be redeemed to the date of
redemption; and
(v) an amount sufficient to pay all fees, costs and expenses in connection with
such prepayment and redemption and, in the case of redemption in whole, to pay all other
amounts payable under this Mortgage Note, the Indenture and the Financing Agreement.
10. Acceleration.
10.1 Nonpayment. If any installment or other amount due under this Mortgage
Note is not paid when due, the entire outstanding principal balance of this Mortgage Note and all
accrued interest on such principal balance shall, at the direction of the Credit Provider, as holder
of the Mortgage Loan Rights, or any successor in interest to the Credit Provider, at once become
due and payable. The Credit Provider, or any successor in interest to the Credit Provider, may
exercise this option to accelerate during any default by the Borrower regardless of any prior
forbearance and notwithstanding the applicability of late charges and default interest under
Paragraph 11 of this Mortgage Note. In the event that this Mortgage Note is referred to an
attorney at law for collection or any action at law or in equity is brought with respect to this
Mortgage Note, the Borrower shall pay all expenses and costs, including, but not limited to,
attorney’s fees and expenses, to the Credit Provider, its successor in interest andor the Trustee,
as applicable.
10.2 Acceleration Relating to Remarketinq. On each Remarketing Date, in the
event (i) the Bonds cannot be remarketed for a term of ten years or more at or below the Strike
Rate or the net operating income for the Mortgaged Property is less than at the original
underwriting, and (ii) Credit Provider elects, as holder of the Mortgage Loan Rights, not to
continue to provide credit enhancement for the Mortgage Loan, and liquidity support for the
remarketing of the Bonds, the outstanding principal balance of this Mortgage Note shall become
immediately due and payable at the direction of the Credit Provider, together with an additional
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amount equal to all interest on such principal balance which has accrued and has not been paid
and all interest which would (if the amount so declared to be due were not paid) accrue on such
principal balance to and including the final day of the month immediately following the month in
which the amount so declared to be due is paid and all other amounts then due and payable under
this Mortgage Note.
11. Late Charges; Default Interest. If any installment under this Mortgage Note is not
received by the Loan Servicer within ten (10) calendar days after the date the installment is due,
then, in any such event, the Borrower shall pay a late charge of five percent (5%) of such
installment, such late charge to be immediately due and payable without demand. If any
installment under this Mortgage Note remains past due for fifteen (15) calendar days or more, the
outstanding principal balance of this Mortgage Note shall bear interest during the period in
which the Borrower is in default at the Default Rate or, if such increased rate of interest may not
be collected from the Borrower under applicable law, then at the maximum increased rate of
interest, if any, which may be collected from the Borrower under applicable law. Any late
charge or interest at the Default Rate (to the extent that such Default Rate is in excess of the
Mortgage Note Rate), shall be remitted promptly to the Credit Provider.
12. Waiver of Defenses. From time to time, without affecting the obligation of the
Borrower, or the successors or assigns of the Borrower, to pay the outstanding principal balance
of this Mortgage Note and observe the covenants of the Borrower contained in this Mortgage
Note, without affecting the guaranty of any person, corporation, partnership or other entity for
payment of the outstanding principal balance of this Mortgage Note, without giving notice to or
obtaining the consent of the Borrower, the successors or assigns of the Borrower or any
guarantor, and without liability on the part of the holder of this Mortgage Note, the Credit
Provider, as holder of the Mortgage Loan Rights, may, at its option, extend the time for payment
of the outstanding principal balance or any part of the outstanding principal balance of this
Mortgage Note, reduce the payments on this Mortgage Note, release anyone liable on the
outstanding principal balance of this Mortgage Note, accept a renewal of this Mortgage Note,
modify the terms and time of payment of the outstanding principal balance of this Mortgage
Note, join in any extension or subordination agreement, release any security given for this
Mortgage Note, take or release other or additional security, and agree in writing with the
Borrower to a modification of the rate of interest or period of amortization of this Mortgage Note
or to a change in the amount of the monthly installments payable under this Mortgage Note.
Presentment, notice of dishonor, and protest are waived by all makers, sureties, guarantors and
endorsers of this Mortgage Note.
13. Limits on Personal Liability.
(a) Except as otherwise provided in this Paragraph 13 or in any of the other Mortgage
Loan Documents, the Borrower shall have no personal liability under this Mortgage Note, the
Security Instrument or any other Mortgage Loan Document for the repayment of this Mortgage
Note or for the performance of any other obligations of the Borrower under the Mortgage Loan
Documents, and the Issuer’s only recourse for the satisfaction of this Mortgage Note and the
performance of such obligations shall be the Issuer’s exercise of its rights and remedies with
respect to the Mortgaged Property and any other collateral held by the Issuer as security for this
Mortgage Note. This limitation on the Borrower’s liability shall not limit or impair the Issuer’s
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enforcement of its rights against any guarantor of this Mortgage Note or any guarantor of any
other obligations of the Borrower.
(b) The Borrower shall be personally liable to the Issuer for the repayment of a portion of
this Mortgage Note equal to any loss or damage suffered by the Issuer as a result of (1) failure of
the Borrower to pay to the Issuer upon demand after an Event of Default under the Security
Instrument, all Rents to which the Issuer is entitled under Section 3(a) of the Security Instrument
and the amount of all security deposits collected by the Borrower from tenants then in residence;
(2) failure of the Borrower to apply all insurance proceeds and condemnation proceeds as
required by the Security Instrument; (3) failure of the Borrower to comply with Section 14(d) or
(e) of the Security Instrument relating to the delivery of books and records, statements, schedules
and reports; (4) fraud or written material misrepresentation by the Borrower, Key Principal or
any officer, director, partner, member or employee of the Borrower in connection with the
application for or creation of the Mortgage Loan or any request for any action or consent by the
Issuer; or (5) failure to apply Rents and Profits, first, to the payment of reasonable operating
expenses (other than Mortgaged Property management fees that are not currently payable
pursuant to the terms of an Assignment of Management Agreement or any other agreement with
the Issuer executed in connection with the Mortgage Loan) and then to amounts (“Debt Service
Amounts”) payable under this Mortgage Note, the Security Instrument or any other Mortgage
Loan Document (except that the Borrower will not be personally liable (i) to the extent that the
Borrower lacks the legal right to direct the disbursement of such sums because of a bankruptcy,
receivership or similar judicial proceeding, or (ii) with respect to Rents and Profits that are
distributed in any calendar year if the Borrower has paid all operating expenses and Debt Service
Amounts for that calendar year).
(c) The Borrower shall become personally liable to the Issuer for the repayment of all of
the principal of and interest on this Mortgage Note and for the payment, performance and
observation of all obligations, covenants and agreements of the Borrower contained in the
Security Instrument, including the payment of all sums advanced by or on behalf of Issuer to
protect the security of the Security Instrument under Section 12 of the Security Instrument, upon
the occurrence of any of the following Events of Default: (1) the Borrower’s acquisition of any
property or operation of any business not permitted by Section 33 of the Security Instrument; or
(2) a Transfer (as that term is defined in the Security Instrument) that is an Event of Default
under Section 21 of the Security Instrument.
(d) To the extent that the Borrower has personal liability under this Paragraph 13, the
Issuer may exercise its rights against the Borrower personally without regard to whether the
Issuer has exercised any rights against the Mortgaged Property or any other security, or pursued
any rights against any guarantor, or pursued any other rights available to the Issuer under this
Mortgage Note, the Security Instrument, any other Mortgage Loan Document or applicable law.
If the Borrower is a married person, then the Borrower agrees that Issuer may look to all of the
Borrower’s community property and separate property to satisfy the Borrower’s recourse
obligations under this Paragraph 13. For purposes of this Paragraph 13, the term “Mortgaged
Property” shall not include any funds that (1) have been applied by the Borrower as required or
permitted by the Security Instrument prior to the occurrence of an Event of Default under the
Security Instrument, or (2) the Borrower was unable to apply as required or permitted by the
Security Instrument because of a bankruptcy, receivership, or siklar judicial proceeding.
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14. [Reserved]
15. Business, Commercial or Investment Purpose. The Borrower represents that the
Mortgage Loan evidenced by this Mortgage Note is being made solely for business, commercial
or investment purposes.
16. Governing Law. The validity of this Mortgage Note and the other Mortgage Loan
Documents, and each of the terms and provisions of this Mortgage Note and the other Mortgage
Loan Documents, and the rights and obligations of the Borrower under this Mortgage Note and
the other Mortgage Loan Documents, shall be governed by, interpreted, construed, and enforced
pursuant to and in accordance with the laws of the Mortgaged Property Jurisdiction.
17. Consent to Jurisdiction. The Borrower irrevocably consents to the exclusive
jurisdiction of any and all state and federal courts with jurisdiction in the Mortgaged Property
Jurisdiction over the Borrower and the Borrower’s assets. The Borrower agrees that such assets
shall be used to first satisfy all claims of creditors organized or domiciled in the United States of
America and that no assets of the Borrower in the United States shall be considered part of any
foreign bankruptcy estate. The Borrower agrees that any controversy arising under or in relation
to this Mortgage Note, the Security Instrument or any of the other Mortgage Loan Documents
shall be litigated exclusively in the Mortgaged Property Jurisdiction. The state and federal courts
and authorities with jurisdiction in the Mortgaged Property Jurisdiction shall have exclusive
jurisdiction over all controversies which may arise under or in relation to this Mortgage Note,
including, but not limited to, those controversies relating to the execution, interpretation, breach,
enforcement, or compliance with this Mortgage Note, the Security Instrument, or any other issue
arising under, related to, or in connection with any of the Mortgage Loan Documents. The
Borrower irrevocably consents to service and to the jurisdiction and venue of such courts with
respect to any litigation involving this Mortgage Note, the Security Instrument or any of the
other Mortgage Loan Documents, and waives any other venue to which it might be entitled by
virtue of domicile, habitual residence, or otherwise.
18. Successors and Assigns. The provisions of this Mortgage Note, the Security
Instrument and all other Mortgage Loan Documents shall be binding on the successors and
assigns, including, but not limited to, any receiver, trustee, representative or other person
appointed under foreign or domestic bankruptcy, receivership, or similar proceedings of the
Borrower and any person having an interest in the Borrower.
19. Reserved.
20. Loss Sharing Arrangements. The Borrower further acknowledges and agrees that
(a) any loss-sharing arrangement or arrangement for interim advancement of funds that is entered
into from time to time by the Loan Servicer and the Credit Provider is made pursuant to a
contractual obligation of the Loan Servicer to the Credit Provider that is independent of, and
separate and distinct from, the obligation of the Borrower for the full and prompt payment of the
indebtedness evidenced by this Mortgage Note, (b) the Borrower shall not be deemed to be a
third party beneficiary of any such loss-sharing arrangement or arrangement for interim
advancement of funds and (c) no such loss-sharing arrangement shall constitute any person or
entity making such payment as a guarantor or surety of the Borrower’s obligations,
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notwithstanding the fact that the obligations under any such loss-sharing arrangement or
arrangement for interim advancement of funds may be calculated with reference to amounts
payable under this Mortgage Note or the other Mortgage Loan Documents,
21. Events of Default. The failure by the Borrower to pay when due any amount payable
by the Borrower under this Mortgage Note or to perform or observe any covenant or obligation
of the Borrower contained in this Mortgage Note, the Security Instrument or any other Mortgage
Loan Document shall, at the option of the Credit Provider (as holder of the Mortgage Loan
Rights), constitute an “Event of Default” under this Mortgage Note, whatever the reason for such
failure and whether it shall be voluntary or involuntary, or within or without the control of the
Borrower, or be impeded by operation of law or by any judgment or order of any court or any
order, rule or regulation of any governmental body.
22. Cross Default. A default by the Borrower in the payment or performance of any
obligation of the Borrower contained in (a) any of the Bond Documents, (b) any of the other
Mortgage Loan Documents, (c) the Reimbursement Agreement, (d) any subordinate financing [,
including, without limitation, any Subordinate Financing described in Paragraph 23 of this
Mortgage Note], (e) the Regulatory Agreement or any other regulatory or restrictive agreement
recorded against the Mortgaged Property in connection with the allocation to the Mortgaged
Property of federal low income housing tax credits, or (f) any form of public, quasi-public,
public/private or private debt and/or equity infusion, grant, subsidy, tax relief or abatement, plan
program or other form of assistance, not cured within any applicable cure period, shall, at the
option of the Credit Provider (as holder of the Mortgage Loan Rights), constitute a default under
this Mortgage Note, the Security Instrument and each of the other Mortgage Loan Documents
and entitle the Credit Provider (as holder of the Mortgage Loan Rights), at its option, in its
discretion, to direct or invoke any remedies set forth in this Mortgage Note, including, but not
limited to, any remedy set forth in Paragraph 10 of this Mortgage Note or as otherwise afforded
by law or in equity. A default under this Mortgage Note shall, at the Credit Provider’s option, in
the Credit Provider’s discretion, constitute a default under the Reimbursement Agreement.
23. Certain Defaults. The Borrower acknowledges and agrees that any default by the
Borrower under or violation of the provisions of the Regulatory Agreement, or any failure of the
Borrower to perform any obligation, covenant or agreement or breach of any covenant,
agreement or warranty contained in the Regulatory Agreement, not cured within any applicable
cure period, shall constitute a default by the Borrower under this Mortgage Note and the Security
Instrument and, at the option of the Credit Provider (as holder of the Mortgage Loan Rights), the
entire outstanding principal balance, accrued interest and any other sums due under this
Mortgage Note shall become immediately due and payable in full. [The Borrower further
acknowledges and agrees that, (a) a default under or violation of the provisions of (1) the
[Promissory Note] (the “Subordinate Mortgage Note”), dated as of [Date], executed by the
Borrower to the order of [Subordinated Lender] (the “Subordinate Lender”) in the
original principal amount of $ , evidencing a loan made by the Subordinate
Lender to the Borrower in the original principal amount of $ (the “Subordinate
Loan”), (2) the [Deed of Trust/Mortgage] (the “Subordinate Security Instrument”), dated
as of [Date], executed by the Borrower to secure the Subordinate Mortgage Note, or (3) the
[Loan Agreement] (the “Subordinate Loan Agreement”), dated as of [Date], by and
between the Borrower and the Subordinate Lender entered into with respect to the
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Subordinate Loan (the Subordinate Mortgage Note, the Subordinate Security Instrument,
the Subordinate Loan Agreement and all other instruments documenting, evidencing and
securing the Subordinate Loan are referred to, collectively, as the “Subordinate Loan
Documents”), or (b) any failure of the Borrower to perform any obligation, covenant or
agreement, or breach of any covenant, agreement or warranty, contained in the
Subordinate Loan Documents or (c) any failure of the Borrower to perform any obligation,
covenant or agreement or breach by the Borrower of any covenant, agreement or warranty
contained in, or the exercise by the Subordinate Lender of any rights in violation of, any
subordination agreement entered into with respect to the Subordinate Loan (the
“Subordination Agreement”), which is not cured within any applicable cure period, shall
constitute a default under this Mortgage Note and the security instrument and entitle the
Credit Provider, (as holder of the mortgage loan rights), at its option, in its discretion, to
direct or invoke any remedies available to it at law or in equity, including but not limited
to, the remedy of acceleration set forth in this Mortgage Note. Any and all amounts
advanced or expended by the Loan Servicer or by the Credit Provider, at their respective
options, to cure a default under the Subordinate Loan Documents or otherwise to pay any
fees or fulfill any other payment obligation of the Borrower shall be deemed to have been
advanced pursuant to and shall become additional indebtedness of the Borrower under and
secured by the lien of the Security Instrument.]
24. Tax Event. The occurrence of a Tax Event shall, at the option of the Credit Provider,
in its sole and absolute discretion, constitute a default under this Mortgage Note.
25. [Reserved]
26. Joint and Several Liability. This Mortgage Note shall be the joint and several
obligation of all makers, sureties, guarantors and endorsers, and shall be binding upon them and
their successors and assigns.
27. Security. The Mortgage Loan evidenced by this Mortgage Note is secured by, among
other instruments, an [Amended and Restated] Multifamily Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing (the “Security Instrument” or “Multifamily Instrument”),
dated as of the date hereof. Reference is made to the Security Instrument for additional rights as
to acceleration of the Mortgage Loan evidenced by this Mortgage Note.
28. Notice. Any notice required by this Mortgage Note shall be given in the manner
provided in the Security Instrument.
29. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY LAW, THE
BORROWER (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH
RESPECT TO ANY ISSUE ARISING UNDER THIS MORTGAGE NOTE OR ANY OF THE
OTHER MORTGAGE LOAN DOCUMENTS TRIABLE BY A JURY AND (B) WAIVES
ANY RIGHT TO TRIAL BY JURY TO THE EXTENT THAT ANY SUCH RIGHT SHALL
EXIST NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF
COMPETENT LEGAL COUNSEL BY THE BORROWER, AND THIS WAIVER IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS
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TO WHICH THE RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE. FURTHER,
THE BORROWER CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE
ISSUER, THE LOAN SERVICER OR THE CREDIT PROVIDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, TO THE BORROWER THAT THE ANY PERSON WILL
NOT SEEK TO ENFORCE THE PROVISIONS OF THIS PARAGRAPH 29.
30. Severability. If any provision of this Mortgage Note shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining portions shall not in any
way be affected or impaired. In case any covenant, stipulation, obligation or agreement of the
Borrower contained in this Mortgage Note shall for any reason be held to be in violation of law,
then such covenant, stipulation, obligation or agreement shall be deemed to be the covenant,
stipulation, obligation or agreement of the Borrower to the full extent permitted by law.
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3 1. Schedule A. Schedule A is deemed part of, and is incorporated by this reference into,
this Mortgage Note.
32. Acknowledgment. By signing below, Borrower accepts and agrees to the covenants
and agreements contained in this Mortgage Note and certifies that this is the Mortgage Note
described in and secured by the Security Instrument, on property located in County,
California.
BORROWER:
CIC CALAVERA, L.P.,
a California limited partnership
By: Pacific Southwest Community Development
Corporation, a nonprofit public benefit
corporation
Its: Managing General PartnIer
By :
Brian F. Biber, Executive Director
By: CIC Calavera Hills, LLC, a California limited
liability company
Its: Co-General Partner
By :
James J. Schmid, Managing Member
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SCHEDULE A
Definitions
The following terms when used in this Mortgage Note shall have the respective meanings
indicated below:
“Accrual Date” has the meaning given to that term in the second paragraph of this
Mortgage Note.
“Activity Fee” has the meaning given to that term in the Reimbursement Agreement.
“Additional Basis Points” has the meaning given to that term in the first paragraph of
the Mortgage Note.
“Assignment” has the meaning given to that term in the Indenture.
“Available Moneys” has the meaning given to that term in the Indenture.
“Available Moneys Certificate” means a certificate of the Trustee to the effect that the
Trustee holds on deposit Available Moneys which are both sufficient and available under the
terms of the Indenture for payment of the End Period Payment and any fees, costs, and expenses
required to be paid in connection with the corresponding redemption of the Bonds to be
redeemed as a result of a voluntary prepayment of this Mortgage Note.
“Bond Counsel” has the meaning given to that term in the Indenture.]
“Bond Documents” has the meaning given to that term in the Indenture.
“Bonds” means the City of Carlsbad Multifamily Housing Revenue Bonds (Mariposa
Apartments) 2003 Series A.
“Borrower” has the meaning given to that term in the first paragraph of this Mortgage
Note.
“Business Day” has the meaning given to that term in the Indenture.
“Cash Flow Projection” has the meaning given to that term in the Indenture.
“Credit Facility” has the meaning given to that term in the Indenture.
“Credit Provider” means Fannie Mae, a corporation duly organized and existing under
the Federal National Mortgage Association Charter Act, 12 U.S.C. $3 1716 et seq., and its
successors and assigns.
“Default Rate” means with respect to any installment due under this Mortgage Note, a
per annum rate equal to the lesser of four percent (4%) per annum above the Mortgage Note Rate
or the maximum interest rate which may be collected from the Borrower under applicable law.
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“End Period Payment” has the meaning given to that term in the Indenture.
“Facility Fee” means the Facility Fee to be paid by the Borrower in consideration of the
Credit Provider’s providing the Credit Facility.
“Fannie Mae Commitment” has the meaning given to that term in the Indenture.
“Financing Agreement” means the Financing Agreement, dated as of the date hereof,
among the Issuer, the Trustee and the Borrower, as amended, modified, supplemented or restated
from time to time.
“General Account” has the meaning given to that term in the Indenture.
“Zndebtedness” means the principal of, interest on, and all other amounts due at any time
under, this Mortgage Note, the Security Instrument or any other Mortgage Loan Document,
including prepayment premiums, late charges, default interest, and advances to protect the
security of the Security Instrument.
“Zndenture” means the Trust Indenture, dated as of the date hereof, between the Issuer
and the Trustee, as amended, modified, supplemented or restated from time to time.
“Initial Remarketing Date” has the meaning given to that term in the Indenture.
b‘Zssuer” means the City of Carlsbad, a municipal corporation, and its successors and
assigns.
“Key Principal” means, collectively, the individual or individuals and/or entity or entities
who have executed the Acknowledgment and Agreement of Key Principal to Personal Liability
for the Exceptions to Non-Recourse attached to, and a part of, this Mortgage Note, or who have
executed an Exceptions to Non-Recourse Guaranty with respect to the Mortgage Loan or who
may, in the future execute, such an Acknowledgment or an Exceptions to Non-Recourse
Guaranty.
“Loan Servicer” means Red Mortgage Capital, Inc., an Ohio corporation, or any
successor servicer appointed by Fannie Mae.
“Maturity Date” has the meaning given to that term in the third paragraph of this
Mortgage Note.
“Mortgage Loan” has the meaning given to that term in the Indenture.
“Mortgage Loan Amount” means, initially, [Five Million Dollars] and No/100s
([$5,000,000]) and thereafter the unpaid principal balance of the Mortgage Loan.
“Mortgage Loan Documents” means, collectively, this Mortgage Note, the Security
Instrument and all other agreements and instruments, including any Collateral Agreements (as
defined in the Security Instrument), documenting, evidencing, securing, arising under, made in
connection with or otherwise relating to the Mortgage Loan, as each such agreement or
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document may be amended, modified, supplemented, or restated from time to time, but
excluding the Financing Agreement and the Regulatory Agreement.
“Mortgage Loan Fund’ has the meaning given to that term in the Indenture.
“Mortgage Loan Rights” has the meaning given to that term in the Assignment.
“Mortgage Note” means this Multifamily Note, as amended, modified, supplemented or
restated.
“Mortgage Note Rate” has the meaning given to that term in the first paragraph of the
Mortgage Note.
“Mortgaged Property” means the “Mortgaged Property” referred to in the Security
Instrument.
“Mortgaged Property Jurisdiction” means the jurisdiction in which the Mortgaged
Property is located.
“Net Bond Proceeds” has the meaning given to that term in the Indenture.
“Operating Expenses” means the reasonable expense of operating, managing,
maintaining and repairing the Mortgaged Property, including, but not limited to, real estate taxes,
utilities, assessments, insurance premiums, repairs, replacements and ground rents, if any.
“Pass-Through Rate” has the meaning given to that term in Paragraph 1.1 of this
Mortgage Note.
“Permitted Lien” has the meaning given to that term in the Reimbursement Agreement.
“Redemption Account” has the meaning given to that term in the Indenture.
“ReguEatory Agreement” means, the Regulatory Agreement and Declaration of
Restrictive Covenants, dated as of June 1, 2003, by and among the Issuer, the Trustee and the
Borrower, as it may be amended, modified, supplemented or restated from time to time.
“Reimbursement Agreement” means the Reimbursement Agreement, dated as of the date
hereof, between the Credit Provider and the Borrower, as amended, modified, supplemented or
restated from time to time.
“Remarketing Agent” has the meaning given to that term in the Indenture.
“Remarketing Rate” has the meaning given to that term in the Indenture.
“Rents and Profits” means the rents, profits, issues, products and income of the
Mortgaged Property received or collected by or on behalf of the Borrower.
“Replacement Reserve” means the replacement reserve required to be established under
the Security Instrument.
Multifamily Note
LA1 : 1004261.2
A-3 Mariposa Apartments
“Revenue Fund’ has the meaning given to that term in the Indenture.
“Security Instrument” means the [Amended and Restated] Multifamily Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing, securing this Mortgage Note, as it
may be amended, modified, supplemented or restated from time to time to the extent permitted
by the Security Instrument and the Indenture.
“Sewicing Fee” has the meaning given to that term in the Fannie Mae Commitment.
“Set Rate Interest” has the meaning given to that term in Paragraph 1.2 of this Mortgage
Note.
“Tax Credit Investor” means [NAME], a [TYPE OF ENTITY].
“Tax Event” means any event which results in the interest payable on the Bonds being
includable for federal income tax purposes, in the gross income of the Bondholders, including,
but not limited to, any violation of any provision of the Regulatory Agreement or any of the
other Bond Documents.
“Termination Fee” has the meaning given to that term in the Reimbursement Agreement.
“Third Party Fees” has the meaning given to that term in the Indenture.
“Transfer” has the meaning given to that term in the Security Instrument.
“Trustee” means [TRUSTEE], not in its individual or corporate capacity, but solely in its
capacity as trustee under the Indenture.
“Verification Report” has the meaning given to that term in the Indenture.
Any capitalized term used in this Mortgage Note and not defined in this Mortgage Note, but
defined in the Indenture, shall have the meaning given to such term in the Indenture.
Multifamily Note
LA 1 : 1 00426 1.2
A-4 Mariposa Apartments
Pay to the order of
[TRUSTEE], as Trustee, and Fannie Mae, as their
interests may appear, without recourse
CITY OF CARLSBAD
By :
Name:
Title:
Dated as of [DATE]
Multifamily Note
LA1 : 1 004261.2
End- 1 Mariposa Apartments
LIHTC AGREEMENT
THIS LIHTC AGREEMENT (“Agreement”) dated as of , is among the
CITY OF CARLSBAD, a municipal corporation (“Issuer”), CIC CALAVERA, L.P., a
California limited partnership (“Borrower”), and FANNIE MAE, a federally-chartered and
stockholder-owned corporation organized and existing under the Federal National Mortgage
Association Charter Act, 12 U.S.C. 0 1716, et seq. (“Fannie Mae”).
This Agreement is made in connection with the Trust Indenture, dated as of [Date]
(“Indenture”), between the Issuer and [Trustee], a [Description of Trustee] (together with its
permitted successors and assigns, “Trustee”) and the issuance of the [$5,000,000] aggregate
principal amount of City of Carlsbad Multifamily Housing Revenue Bonds (Mariposa
Apartments) 2003 Series A (collectively, the “Bonds”) pursuant to the Indenture. All capitalized
terms used in this Agreement have the meanings given to those terms in the Indenture or
elsewhere in this Agreement unless the context or use clearly indicates a different meaning.
RECITALS
A. The Recitals to the Indenture are incorporated into and made a part of this
Agreement.
B. The Issuer, the Borrower and Fannie Mae wish to preservethe ability of Fannie
Mae to acquire an ownership interest directly or indirectly in the Borrower after the Closing Date
should the opportunity to do so become available and should Fannie Mae, in its discretion, desire
to do so at that time.
SECTION 1. Acquisition of Equity Interest in the Borrower by Fannie Mae. The
Issuer and the Borrower agree that Fannie Mae shall have the right to acquire a direct or indirect
ownership interest in the Borrower (“Investment”) if and when available to Fannie Mae. The
Investment may be a direct ownership interest in the Borrower, an indirect investment through
one or more intermediate entities or the acquisition of an existing direct or indirect investment in
the Borrower in a secondary market transaction. Nothing in this Agreement shall obligate:
(a) Fannie Mae to acquire an Investment from the Borrower or any other person;
(b) the Borrower to sell an Investment to Fannie Mae or to any other person.
(c) Fannie Mae to obtain the prior consent of the Issuer before Fannie Mae acquires
an Investment.
No consent is needed from the Borrower for the acquisition by Fannie Mae of an Investment
directly or indirectly in the Borrower from a third party. Fannie Mae may sell or otherwise
transfer all or any portion of the Investment at any time and from time to time in its sole
discretion, but subject to any applicable conditions, restrictions and limitations which are
contractual obligations of Fannie Mae arising in connection with the Investment.
LA1 : 1004734.1
SECTION2. Investment Notice. Not more than 15 days after the date Fannie Mae
acquires an Investment, Fannie Mae shall provide or cause the provision of a notice to the Issuer,
the Borrower and Bond Counsel that an Investment has been acquired (“Investment Notice”).
The Investment Notice will be given in the form of the attached Exhibit A;
SECTION 3. Information Regardinp the Investment. Fannie Mae has no obligation
to provide any documents evidencing the Investment or any information regarding the
Investment other than the information required by the Investment Notice.
SECTION 4. Borrower Acknowledges Consequences of Fannie Mae Investment in
the Borrower. The Borrower represents to the Issuer and Fannie Mae that it has had the benefit
of legal and tax advice regarding the consequences of the acquisition of an Investment by Fannie
Mae. The Borrower understands that from and after the date of the acquisition of an Investment:
(a) the Credit Facility provided by Fannie Mae may no longer be a “qualified
guaranty” as that term is used in Section 1.148-4(f) of the Treasury Regulations;
(b) the bond yield of the Bonds may need to be recalculated to eliminate the cost of
credit enhancement from bond yield; and
(c) the effect of a reduced bond yield could be to reduce the amount of investment
income on certain investments which the Borrower may retain and correspondingly increase the
amount of rebate the Borrower would owe under the Tax Certificate with respect to such income.
SECTIONS Ripht of Fannie Mae to Exercise Rights and Remedies as Credit
Provider. This Agreement does not apply to the acquisition by Fannie Mae or its nominee of
any interest in the Mortgaged Property through a foreclosure of the Security Instrument or a deed
in lieu of a foreclosure. Nothing in this Agreement shall restrict the right of Fannie Mae to
exercise any of its rights and remedies as the Credit Provider as set out in the Financing
Documents or as otherwise provided by applicable law as Fannie Mae may determine from time
to time.
SECTION 6. Further Assurances. Fannie Mae, the Borrower and the Issuer agree that
they will each promptly execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such amendments to or supplements of the Financing Documents and
such other certificates and agreements as Bond Counsel determines are reasonably required to
carry out the intention of, or to facilitate the performance of this Agreement.
SECTION 7. Rules of Construction. The rules of construction set forth in Section 1.3
of the Indenture shall apply to this Agreement in their entirety, except that in applying such rules,
the term “Agreement” shall be substituted for the term “Indenture.”
SECTION 8. Amendment. No amendment to this Agreement shall be binding upon the
parties to this Agreement until such amendment is reduced to writing and executed by such
parties.
LIHTC Agreement
LA1: 1004734.1
2 Mariposa Apartments
SECTION 9. Binding Effect. This Agreement is a continuing obligation and shall (i)
be binding upon each of the parties to this Agreement and their successors and assigns and (ii)
inure to the benefit of and be enforceable by such parties and their respective successors,
transferees and assigns.
SECTION 10. Severability. Should one or more of the provisions of this Agreement
be held to be invalid, illegal or unenforceable in any jurisdiction, such provision shall be
severable from the remainder as to such jurisdiction and the validity, legality and enforceability
of the remaining provisions will not in any way be affected or impaired in any jurisdiction.
SECTION 11. Execution in Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall constitute but one
and the same instrument.
SECTION12. Governing Law. This Agreement shall be construed, and the
obligations, rights and remedies of the parties under this Agreement shall be determined, in
accordance with the laws of the State without regard to conflicts of laws principles, except to the
extent that the laws of the United States of America may prevail.
SECTION13. WAIVER OF JURY TRIAL. THE BORROWER, THE ISSUER
AND FANNIE MAE (A) COVENANT AND AGREE NOT TO ELECT A TRIAL BY JURY
WITH RESPECT TO ANY ISSUE ARISING UNDER THIS AGREEMENT TRIABLE BY A
JURY AND (B) WAIVE ANY RIGHT TO TRIAL BY JURY TO THE EXTENT THAT ANY
SUCH RIGHT NOW EXISTS OR SHALL LATER EXIST. THIS WAIVER OF RIGHT TO
TRIAL BY JURY IS SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY WITH
THE BENEFIT OF COMPETENT LEGAL COUNSEL. THIS WAIVER IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH
THE RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE.
SECTION 14. Notices. It shall be sufficient giving of any notice or other
communication if the same is sent by first-class registered or certified mail, postage prepaid,
return receipt requested, or by private courier service which provides evidence of delivery, or
sent by Electronic Means which produces evidence of transmission, confirmed by first-class
mail, postage prepaid, and in each case will be deemed to have been given on the date evidenced
by the postal or courier receipt or other written evidence of delivery or electronic transmission.
Unless a different address is given by any party as provided in this Section, all such
communications will be addressed as follows:
To the Issuer: City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Attention: Community Development
Telephone: (760) 434-2810
Facsimile: (760) 720-2037
LIHTC Agreement
LA1 : 1004734.1
3 Mariposa Apartments
To the Borrower:
with a copy to:
To the Fannie Mae
CIC Calavera, L.P.
c/o Chelsea Investment Corporation
215 South Highway 101, Suite 200
Solana Beach, California 92075
Attention: Wally Dieckmann
Telephone: (858) 259-2624, Ext. 103
Facsimile: (858) 259-2644
Pillsbury Winthrop LLP
50 Fremont Street
San Francisco, California 94101
Attention: Gary P. Downs
Telephone: (4 1 5) 9 8 3 - 1 83 5
Facsimile: (415) 983-1200
Fannie Mae
3900 Wisconsin Avenue, NW
Drawer AM
Washington, DC 20016-2899
Attention: Director, Multifamily Asset Management
Telephone: (202) 752-2854
Facsimile: (202) 752-3542
Re: [$5,000,000] City of Carlsbad Multifamily Housing
Revenue Bonds (Mariposa Apartments) 2003 Series A; Red
Mortgage Capital, Inc.
with a copy to:
Fannie Mae
3900 Wisconsin Avenue, NW
Drawer AM
Washington, DC 20016-2899
Attention: Vice President, Multifamily Services
Telephone: (202) 752-7869
Facsimile: (202) 752-8369
Re: [$5,000,000] City of Carlsbad Multifamily Housing
Revenue Bonds (Mariposa Apartments) 2003 Series A; Red
Mortgage Capital, Inc.
[For courier use to all Fannie Mae addresses use 4000 Wisconsin Avenue, N.W. and
delete any reference to Drawer AM]
By notice given under this Agreement, any party may designate any different addresses to which
subsequent notices or other communications shall be sent.
The remainder of this page is intentionally blank.
LIHTC Agreement
LAI:1004734.1
4 Mariposa Apartments
IN WITNESS WHEREOF, the Issuer, the Borrower and Fannie Mae have executed this
Agreement as of the day and year first above written.
IS SUER:
CITY OF CARLSBAD
LIHTC Agreement
LA1 : 1004734.1
By :
Name:
Title:
s- 1 Mariposa Apartments
BORROWER:
CIC CALAVERA, L.P.,
a California limited partnership
By :
Its:
By:
Its:
Pacific Southwest Community Development
Corporation, a nonprofit public benefit
corporation
Managing General PartnIer
By :
Brian F. Biber, Executive Director
CIC Calavera Hills, LLC, a California limited
liability company
Co-General Partner
By :
James J. Schmid, Managing Member
LIHTC Agreement
LA1 :IOO4734.1
s-2 Mariposa Apartments
FANNIE MAE
By:
Name:
Title:
LIHTC Agreement
LA1 : 1004734.1
s-3 Mariposa Apartments
EXHIBIT A
Form of Investment Notice
[Date]
[Issuer]
[Issuer’s Address]
[Borrower]
[Borrower’s Address]
[Bond Counsel]
[Bond Counsel’s Address]
Re: [bond caption] (“Bonds”)
[description of bond indenture] (“Indenture”)
[description of LIHTC Agreement] (“LIHTC Agreement”)
Investment Notice
Ladies and Gentlemen:
[Fannie Mae is giving this notice] [I am giving this notice on behalf of Fannie Mae] pursuant to
Section 2 of the LIHTC Agreement. Capitalized terms used in this letter are used as defined in
the LIHTC Agreement.
Fannie Mae acquired an Investment in the Borrower on [fill in date].
If you have any questions regarding this letter, please contact me at
Very truly yours,
LIHTC Agreement
LA1 : 1004734.1
A- 1 Mariposa Apartments
Ex/y-i/3/r b
y3& /1,/76 5- do -03
ASSIGNMENT AND INTERCREDITOR AGREEMENT
This ASSIGNMENT AND INTERCREDITOR AGREEMENT (the
“Assignment”), is made as of [DATE], by and among the CITY OF CARLSBAD (the
“Issuer”), a municipal corporation, [TRUSTEE] (together with any successor trustee, the
“Trustee”, a [TYPE OF ENTITY], not in its individual or corporate capacity, but solely as
trustee, and FANNIE MAE (the “Credit Provider”), a corporation organized and existing under
the Federal National Mortgage Association Charter Act, 12 U.S.C. 0 1716, et seq. and is
acknowledged, accepted and agreed to by CIC CALAVERA, L.P. (the “Borr~wer’~), a
California limited partnership.
The meaning of capitalized
terms can be determined by
reference to Section 1.
RECITALS
A. The Issuer has issued, sold and delivered the Bonds. The Net Bond
Proceeds are being used to fund the Mortgage Loan to the Borrower.
B. The Trustee is trustee under the Indenture.
C. The Mortgage Loan is evidenced by the Mortgage Note, secured by the
Security Instrument and otherwise documented, evidenced and secured by the other Mortgage
Loan Documents.
D. The Issuer, the Borrower and the Loan Servicer have requested that the
Credit Provider provide the Credit Facility as credit enhancement for the Mortgage Loan and
liquidity support for the Bonds.
E. As an inducement to the Credit Provider to provide the Credit Facility, (a)
the Issuer and the Trustee have accepted and agreed to execute and deliver, and the Borrower has
agreed to acknowledge, accept and agree to the terms of, this Assignment and (b) the Borrower
has agreed to enter into the Reimbursement Agreement and the Pledge Agreement.
In consideration of the mutual promises contained in this Assignment and for
other valuable consideration, the receipt and sufficiency of which are acknowledged by the
Issuer, the Credit Provider, the Trustee and the Borrower, the Issuer, the Credit Provider, the
Trustee and the Borrower agree as follows:
Section 1. Definitions. Capitalized terms used in this Assignment (including the
Recitals) shall have the meanings given to those terms in this Section 1 or elsewhere in this
Assignment unless the context clearly indicates a different meaning. Capitalized terms used in
this Assignment and not defined in this Assignment are defined in, and shall have the meanings
given to those terms in, the Indenture or the Financing Agreement. The meanings given to all
defined terms shall be applicable whether such terms are used in the singular or the plural form.
Assignment and Intercreditor Agreement
LA 1 : 1004255.2
1 Mariposa Apartments
‘‘Activity Fee” has the meaning given to that term in the Reimbursement
Agreement.
“Advance” has the meaning given to that term in the Credit Facility.
“Assigned Documents” means, collectively, the Mortgage Loan Documents and
the Financing Agreement.
“Assigned Rights” has the meaning given to that term in Section 2.1 of this
Assignment.
“Assignee” means, individually, the Credit Provider, as its interest may appear, or
the Trustee, as its interest may appear, as the context shall permit or require, and, collectively,
the Credit Provider and the Trustee, as their interests may appear.
“Assignment” means this Assignment and Intercreditor Agreement, dated as of
[DATE], by and among the Issuer, the Trustee and the Credit Provider, and acknowledged
accepted and agreed to by the Borrower, as it may be amended, modified, supplemented or
restated from time to time.
“As their interests may appear” or “as its interest may appear” means, with
reference to the Assigned Documents and/or the Assigned Rights, the respective interests,
exclusive of the Issuer’s Reserved Rights, of the Credit Provider, k, “the Credit Provider’s
Interests”(as defined in paragraph (i) below), and of the Trustee, k, the “Trustee’s Interests” (as
defined in paragraph (ii) below), from time to time, in and to the Assigned Documents and the
Assigned Rights:
(i) “the Credit Provider’s Interests” means and includes (a) all rights and
interests of the Credit Provider under or pursuant to the Credit Facility Agreement, including, but
not limited to, the (1) right of the Credit Provider, pursuant to the Reimbursement Agreement, to
payment by the Borrower of, or reimbursement by the Borrower for, Advances under the Credit
Facility and (2) right of the Credit Provider, pursuant to the Reimbursement Agreement, to
payment by the Borrower, of all fees (including, but not limited to, the Facility Fee and the
Activity Fee), costs and expenses (including, but not limited to, attorneys’ fees) and other
amounts payable to the Credit Provider under the Reimbursement Agreement as a result of its
execution and delivery of, and, if applicable, any payment under, the Credit Facility, (b) all other
rights of the Credit Provider to payment, reimbursement and/or security under the Credit Facility
Agreement and the Mortgage Loan Documents, or otherwise with respect to the transactions
provided for in the Bond Documents, the Mortgage Loan Documents and the Credit Facility
Agreement (but excluding (1) the payments to be received by the Trustee pursuant to the Credit
Facility, (2) all other payments to be received by the Trustee in respect of the unpaid principal
amount of and accrued and unpaid interest on the Outstanding Bonds (other than Purchased
Bonds which, pursuant to the Pledge Agreement, are subject to a lien in favor of the Credit
Provider, plus all accrued and unpaid interest on the Purchased Bonds) and (3) the payments to
be received by the Trustee pursuant to the assignment of the Mortgage Loan Payments Interest to
the Trustee), (c) the Mortgage Loan Rights and (d) the right of the Credit Provider to payment or
reimbursement of (1) all amounts to or for which it is or may be entitled to as an Assignee under
Assignment and Intercreditor Agreement
LA1 : 1004255.2
2 Mariposa Apartments
this Assignment, (2) all amounts secured by the Security Instrument and (3) all fees, costs,
expenses and other sums paid, incurred or advanced by the Credit Provider under the Credit
Facility Agreement or the Assigned Documents, or otherwise in connection with the Mortgaged
Property, or in connection with the exercise by the Credit Provider of any duties, obligations,
rights, powers, options, privileges or remedies as an Assignee under this Assignment, including,
but not limited to, all amounts advanced:
(A) for taxes, assessments, water, sewer and vault charges, insurance
premiums and other similar or dissimilar items in connection with the Mortgaged Property, its
development, operation or management;
(B) for payments to laborers, suppliers, mechanics, materialmen,
subcontractors, contractors, construction managers, surveyors, architects, engineers, accountants,
governmental agencies having or asserting jurisdiction over the Mortgaged Property, or any
portion of it, and other similar or dissimilar persons or entities in connection with the
construction of the Improvements or the development, operation, maintenance or management of
the Mortgaged Property;
(C) for costs, expenses, appraisals, attorneys’ fees and expenses,
accountants’ fees and expenses or other fees and expenses in connection with (a) the protection
of any security and/or collateral for the Mortgage Loan or for the Borrower’s obligations to the
Credit Provider under the Credit Facility Agreement, (b) the enforcement of the rights and
remedies of the Credit Provider under the Credit Facility Agreement, the Assigned Documents or
this Assignment and (c) any foreclosure action or proceeding or the acceptance of a deed in lieu
of foreclosure or other comparable conversion of the Mortgage Loan;
(D) by reason of or in connection with the acquisition, use, operation,
maintenance, management, ownershipeor sale of the Mortgaged Property, or any portion of it, in
the event of the acquisition of the Mortgaged Property, or any portion of it, through foreclosure
or by acceptance of a deed in lieu of foreclosure or other comparable conversion of the Mortgage
Loan;
(E) for any and all other things which the Credit Provider shall or may
become entitled to pay or advance or for which it is or may be entitled to payment or
reimbursement under the Credit Facility Agreement or the Assigned Documents; and/or
(F) for attorneys fees, costs and expenses; and
(ii) the “Trustee’s Interests” means and includes (a) the right to receive (1) the
payments to be received by the Trustee pursuant to the assignment of the Mortgage Loan
Payments Interest to the Trustee, pursuant to (A) the assignment of the Mortgage Loan Payments
Interest to the Trustee, and (B) the Credit Facility and (2) all other payments to be received by
the Trustee in respect of the unpaid principal amount of and accrued and unpaid interest on the
Outstanding Bonds (other than Purchased Bonds which, pursuant to the Pledge Agreement, are
subject to a lien in favor of the Credit Provider, plus all accrued and unpaid interest on the
Purchased Bonds), (b) the right to receive all fees, costs and expenses owing to the Trustee under
the Indenture, (c) the right to receive payment or reimbursement of all amounts for which it is or
Assignment and Intercreditor Agreement
LA1:1004255.2
3 Mariposa Apartments
may be entitled to as an Assignee under this Assignment and (d) the right to receive all fees,
costs, expenses and other sums paid or incurred by the Trustee (including, but not limited to,
attorneys’ fees and expenses), for itself or on behalf of the Issuer, in exercising any of its rights,
powers, options, privileges or remedies as Assignee under this Assignment, including, but not
limited to, all reasonable or necessary sums paid or advanced from time to time by the Trustee of
the nature described in clauses (A), (B), (C), (D), (E) and (F) of paragraph (i) above.
“Borrower” means CIC Calavera, L.P., a California limited partnership.
“Credit Provider” means Fannie Mae.
“Exhibit A” means Exhibit A attached to and by this reference made a part of this
As si gnmen t .
“Facilitv Fee” means the Facility Fee provided for in the Mortgage Note.
‘‘Financing Agreement” means the Financing Agreement, dated as of [Date],
among the Issuer, the Trustee and the Borrower, as amended, modified, supplemented or restated
from time to time.
“Improvements” means the improvements made or to be made upon the Land.
“Indenture” means the Trust Indenture, dated as of June 1,2003, between the
Issuer and the Trustee, as amended, modified, supplemented or restated from time to time as
permitted by the Indenture.
“Issuer” means City of Carlsbad, a municipal corporation, and its successors and
assigns.
“Issuer’s Annual Fee” has the meaning given to that term in the Indenture.
“Issuer’s Documents” has the meaning given to that term in paragraph (iv) of
Section 11.1 of this Assignment.
“Land” means the real property described in Exhibit A, being the same real
property described in the Security Instrument.
“Loan Servicer” means Red Mortgage Capital, Inc., an Ohio corporation , as
servicer of the Mortgage Loan, and any successor servicer appointed by the Credit Provider.
“Mortgage Loan” means the loan made by the Issuer to the Borrower pursuant to
the terms and provisions of the Financing Agreement for the purpose of providing funds to the
Borrower to refinance the Mortgaged Property.
“Mortgage Loan Documents” means, collectively, the Mortgage Note, the
Security Instrument and all other agreements, documents and instruments evidencing, securing
or otherwise relating to the Mortgage Loan, including all amendments, modifications,
Assignment and Intercreditor Agreement
LA1 : 1004255.2
4 Mariposa Apartments
supplements and restatements of such agreements, documents and instruments, but excluding the
Financing Agreement and the Regulatory Agreement.
“Mortgage Loan Payments Interest” means, with respect to the Mortgage Loan,
the right of the Trustee to receive and retain all payments due and owing under the Mortgage
Note including the right to payment of the unpaid principal amount of and accrued and unpaid
interest on the Outstanding Bonds (excluding Purchased Bonds which, pursuant to the Pledge
Agreement, are subject to a lien in favor of Fannie Mae, and all accrued and unpaid interest on
the Purchased Bonds) other than (a) Set Rate Interest, comprising the Facility Fee and the
Servicing Fee, (b) late charges, (c) default interest, (d) payments for reserves (including all
payments for deposit into the Replacement Reserve (as defined in the Replacement Reserve and
Security Agreement dated as of , between the Borrower and the Loan Servicer)),
(e) escrows for taxes, insurance and other impositions, (f) payments pursuant to any Mortgage
Loan Document, (g) any other amount due pursuant to any Mortgage Loan Document (and
further including all fees due to the Credit Provider, e.g., without limitation, the Activity Fee (as
defined in the Reimbursement Agreement) due to the Credit Provider) and (h) other amounts
which do not constitute principal or interest at the Pass-Through Rate.
“Mortgage Loan Rights” means, with respect to the Mortgage Loan, without
limitation (a) all of the rights, and interests, power and authority under the Mortgage Loan
Documents and the Financing Agreement to direct actions, grant consents, grant extensions,
grant waivers, grant requests, give approvals, give directions, exercise and enforce remedies,
exercise forbearance, give releases, make appointments, make decisions, take actions, apply
partial payments, apply late charges, receive and apply default interest, receive and apply escrow
payments for reserves, taxes, insurance and other impositions, receive and apply funds received
pursuant to any Mortgage Loan Document, and, subject to the exclusion set forth below, do all
other things that may be done under the Mortgage Loan Documents and (b) the right, power and
authority to, and the right, power and authority to assign or delegate the right, power and
authority to, enter into and/or receive or accept delivery of and/or be a party to all Mortgage
Loan Documents (other than the Mortgage Note and the Security Instrument which are executed
and delivered by the Borrower to the Issuer), to be executed and delivered in connection with the
Mortgage Loan, and which are not entered into and/or received or accepted by the Issuer, or to
which the Issuer is not a party, including, but not limited to, any agreements, documents and
instruments ancillary to or otherwise relating to the Mortgage Loan, including agreements with
respect to the servicing of the Mortgage Loan and the establishment of custodial and other
accounts for the deposit of funds payable by the Borrower under the Mortgage Loan Documents
and collected by the Loan Servicer, and to vest in any assignee or delegatee, including the Loan
Servicer, such rights, powers and authority as may be necessary to implement any of the
foregoing; “Mortgage Loan Rights” also means, and expressly includes, with respect to the
Mortgage Loan, custody of, and exclusive dominion and control over, each Mortgage Loan
Document, including the Mortgage Note and the Security Instrument. “Mortgage Loan Rights”
does not mean, and expressly excludes, the Mortgage Loan Payments Interest which is assigned
by the Issuer to the Trustee.
“Mortgage Note” means the Multifamily Note, dated as of the date hereof,
executed by the Borrower in favor of the Issuer, together with all addenda and schedules, as the
same may be amended, modified, supplemented or restated from time to time, or any note
Assignment and Intercreditor Agreement
LA1 : 1004255.2
5 Mariposa Apartments
executed in substitution therefor, as such substitute note may be amended, modified,
supplemented or restated from time to time.
“Mortgaged Propertv” has the meaning given to that term in the Security
Instrument.
“Pass-Through Rate” has the meaning given to that term in the Mortgage Note.
“Person” means any natural person, firm, partnership, association, limited liability
company, corporation, company or public body.
“Pledge Agreement” means the Pledge, Security and Custody Agreement, dated
as of the date hereof, by and among the Borrower, the Trustee, as collateral agent for Fannie
Mae, and the Credit Provider, as such agreement may be amended supplemented or otherwise
modified from time to time.
“Regulatory Agreement” means the Regulatory Agreement and Declaration of
Restrictive Covenants, relating to the Mortgaged Property, dated as of June 1,2003, by and
among the Issuer, the Trustee and the Borrower, as amended, modified, supplemented or restated
from time to time.
“Reimbursement Agreement” means the Reimbursement Agreement, dated as of
the date hereof, between the Credit Provider and the Borrower, as amended, modified,
supplemented or restated from time to time or any agreement entered into in substitution
therefor.
“Reserved RiPhts” has the meaning given to that term in the Indenture.
“Security Instrument” means the [Amended and Restated] Multifamily Deed of
Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated as of the date hereof,
together with all riders and exhibits, securing the Mortgage Note, executed by the Borrower with
respect to the Mortgaged Property, as it may be amended, modified, supplemented or restated
from time to time, or any security instrument executed in substitution therefor, as such substitute
security instrument may be amended, modified, supplemented or restated from time to time.
“State” means the State of California.
“Wrongful Dishonor” means an uncured failure by the Credit Provider to make an
Advance to the Trustee upon proper presentation of documents that conform to the terms and
conditions of the Credit Facility.
Section 2. Assignment.
Section 2.1 Assignment. Subject to the specific assignments set forth in
Section 2.2 and Section 2.3 of this Assignment, and further subject to the provisions of Sections
2.4 through 2.13 of this Assignment, consistent and in accordance with the grant provisions of
the Indenture, the Issuer absolutely and irrevocably assigns, transfers, conveys and delivers to
each of the Assignees, and their respective successors and assigns, for the benefit of each of the
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Assignees, and their respective successors and assigns, in each instance as their interests may
appear (k, to the Credit Provider, as its interest may appear, and to the Trustee, as its interest
may appear), without recourse, all (a) of the Issuer’s right, title and interest in and to the
Mortgage Loan and in and to each of the Assigned Documents, provided that the Reserved
Rights of the Issuer are excepted from this assignment, transfer, conveyance and delivery, and
provided further that such reservation shall not in any way limit the rights of the Assignees to
exercise all other rights of the Issuer under the Assigned Documents and (b) right, title and
interest of every nature of the Issuer in the rights to receive payments under the Assigned
Documents (including all proceeds of insurance or condemnation awards, but excluding
payments on account of Reserved Rights) and in and to all Funds and Accounts (other than the
Rebate Fund, the Costs of Issuance Fund and the Fees Account) held, maintained or administered
by the Trustee pursuant to and in accordance with the Indenture and in all amounts on deposit in
any Fund or Account (other than the Rebate Fund the Costs of Issuance Fund and the Fees
Account) held, maintained or administered by the Trustee pursuant to and in accordance with the
Indenture (all rights, titles, interests, liens and privileges described in paragraphs (a) and (b) of
this Section 2.1 and assigned to the Assignees by this Section 2.1 are, collectively, the “Assigned
Rights”). Each Assignee, for and on behalf of itself and its successors and assigns,
acknowledges receipt of, and accepts, and shall hold, the Assigned Rights, together with all right,
title, interest, estates, liens, privileges, claims and demands and equities now existing, and to
exist in the future, in connection with the Assigned Rights, or as security for the Assigned
Rights, as its interest may appear.
Section 2.2 Assignment of Mortgage Loan Rights to the Credit Provider.
Notwithstanding the provisions of Section 2.1 of this Assignment, the Issuer absolutely and
irrevocably assigns, transfers, conveys and delivers the Mortgage Loan Rights exclusively to the
Credit Provider, and its successors and assigns, without recourse. The Trustee agrees to take
such action and to execute and deliver and to facilitate the recordation of such documents
provided to the Trustee as may be reasonably necessary to accede to the assignment of the
Mortgage Loan Rights to the Credit Provider. If a Wrongful Dishonor occurs and continues for
more than five Business Days, the Credit Provider agrees that the Mortgage Loan Rights shall
automatically, without any further action on the part of the Credit Provider, transfer to the
Trustee at the end of such five-day period. In furtherance of the foregoing, the Credit Provider
agrees to take such action and to execute and deliver and to facilitate the recordation of such
documents provided to the Credit Provider as may be reasonably necessary to evidence the
transfer of the Mortgage Loan Rights to the Trustee. The transfer of the Mortgage Loan Rights
to the Trustee shall automatically terminate, and the Mortgage Loan Rights shall revert to the
Credit Provider automatically, upon the cure of the Wrongful Dishonor.
Section 2.3 Assignment of Mortgage Loan Payments Interest to Trustee.
Notwithstanding the provisions of Section 2.1 of this Assignment, but subject to the provisions
of Section 2.6 of this Assignment, the Issuer absolutely and irrevocably assigns, transfers,
conveys and delivers the Mortgage Loan Payments Interest to the Trustee, without recourse, such
assignment to be (1) for the equal and proportionate benefit, security and protection of the
owners of the Outstanding Bonds, without privilege, priority or distinction as to the lien or
otherwise of any of the Bonds over any of the other Bonds, and (2) for the benefit of the Credit
Provider, for the payment of all amounts owing to the Credit Provider under andor secured by
the Credit Facility Agreement andor the Assigned Documents. The Trustee shall receive the
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Mortgage Loan Payments Interest and deposit payments received on account of the Mortgage
Loan Payments Interest in the appropriate Accounts under the Indenture (a) for the equal and
proportionate benefit of the Bondholders without privilege, priority or distinction as to the lien or
otherwise of any of the Bondholders over any of the other Bondholders and (b) for the benefit of
the Credit Provider for the payment of all amounts owing to the Credit Provider under and/or
secured by the Credit Facility Agreement and/or the Assigned Documents. The Trustee
acknowledges and agrees that all payments on the Mortgage Note will be made by the Borrower
to the Loan Servicer.
Section 2.4 Effect of the Issuer’s Assignments.
2.4.(1) Effect of Assignment of Mortgage Loan Rights and Mortgage
Loan Payments Interest. The Credit Provider and the Trustee acknowledge that the Issuer’s
assignment of the Mortgage Loan Rights to the Credit Provider and assignment of the Mortgage
Loan Payments Interest to the Trustee are and shall be effective without any other or further
action by the Issuer, the Trustee or the Credit Provider. The Trustee acknowledges and accedes
to the assignment of the Mortgage Loan Rights to the Credit Provider and agrees to take such
action and to execute and deliver and to facilitate the recordation of such documents provided to
the Trustee as may be reasonably necessary to accede to the assignment of the Mortgage Loan
Payments Rights to the Credit Provider. The Credit Provider acknowledges and accedes to the
assignment of the Mortgage Loan Interest to the Trustee. The Trustee covenants that it will not
assign its rights or interests in and to the Mortgage Loan Payments Interest to any party other
than the Credit Provider, or other than as provided in the Indenture and this Assignment, and
confirms and agrees that it will not in any event assign any of such rights or interests to any other
party without the Credit Provider’s prior written consent. The Trustee acknowledges that by
virtue of the Issuer’s assignment of the Mortgage Loan Rights to the Credit Provider, the Credit
Provider will have (a) the right, power and authority to make all decisions in connection with the
Mortgage Loan and under the Mortgage Loan Documents, it being understood and agreed that
the Credit Provider shall be entitled to act with respect to the Mortgage Loan in the same manner
and with the same rights, powers and authority to act as the Credit Provider would have if the
Credit Provider were the sole owner of the Mortgage Loan and the sole owner and holder of the
Mortgage Note and the Security Instrument, (b) the right to require that payments on the
Mortgage Loan be made to the Loan Servicer, (c) the right, power and authority to enter into
and/or receive or accept delivery of and/or be a party to all Mortgage Loan Documents (other
than the Mortgage Note and the Security Instrument which are executed and delivered by the
Borrower to the Issuer) to be executed and delivered in connection with the Mortgage Loan, and
which are not entered into and/or received or accepted by the Issuer, or to which the Issuer is not
a party, including, but not limited to, any agreements, documents and instruments ancillary to or
otherwise relating to the Mortgage Loan and (d) the right to further assign or delegate (including
assignments to any Loan Servicer) any of the Mortgage Loan Rights assigned to it and to
delegate to the Loan Servicer the right to (1) enter into and/or receive or accept delivery of
andor be a party to any Mortgage Loan Document (other than the Mortgage Note and the
Security Instrument which are executed and delivered by the Borrower to the Issuer), including,
but not limited to, any agreements, documents and instruments ancillary to or otherwise relating
to the Mortgage Loan and (2) establish and maintain custodial and other accounts for the deposit
of funds payable by the Borrower under any of the Mortgage Loan Documents and collected by
the Loan Servicer and apply and disburse such funds in accordance with the Mortgage Loan
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Documents. Neither the Credit Provider nor the Loan Servicer, nor their respective officers,
directors, employees, or agents, shall be liable to the Trustee or any Bondholder for any action
taken or omitted to be taken in good faith by the Credit Provider in connection with the
Mortgage Loan by reason of the assignment of the Mortgage Loan Rights to the Credit Provider.
The actions of the Credit Provider with respect to the Mortgage Loan shall not be taken as an
agent of the Issuer or the Trustee, and neither the Issuer nor the Trustee shall be liable for any
actions taken or not taken by the Credit Provider, any assignee of the Credit Provider or the Loan
Servicer.
2.4.(2) Assignment of Mortgage Loan Upon Payment or Redemption
of Bonds. In the event that the Credit Provider makes an Advance pursuant to the Credit Facility
which results in the payment or redemption of the Bonds in whole in accordance with the terms
of the Bonds and the Indenture, the Trustee, unless otherwise instructed by the Credit Provider,
shall (a) assign (in recordable form, if applicable) all of its rights and interests in and to the
Mortgage Note, the Security Instrument, all other Mortgage Loan Documents, the Mortgage
Loan Payments Interest and the Financing Agreement to the Credit Provider, and endorse the
Mortgage Note to the Credit Provider, (b) assign and transfer to the Credit Provider all funds, but
excluding the Rebate Fund, the Costs of Issuance Fund and the Fees Account, held by the
Trustee, and, until such time as such moneys are paid to the Credit Provider, hold all moneys in
all Funds and Accounts (excluding the Rebate Fund, the Costs of Issuance Fund and the Fees
Account) as bailee for the Credit Provider and take such action with respect to such moneys
while in the possession or control of the Trustee as the Credit Provider may direct and (c)
execute and deliver all such documents presented by or on behalf of the Credit Provider as are
necessary to legally and validly effectuate the assignments and other actions provided for in the
preceding clauses (a) and (b).
2.4.(3) Assignment of MortgaEe Loan Without Payment or
Redemption of Bonds. So long as a Wrongful Dishonor has not occurred, or if it has occurred,
has not continued for more than five Business Days, the Credit Provider shall have the right, with
respect to the Mortgage Loan, in its sole and absolute discretion, without making an Advance
under the Credit Facility, but only upon filing with the Trustee a certification reaffirming the
Credit Provider’s obligations under the Credit Facility, to direct the Trustee in writing to assign
(in recordable form, if applicable) all of the Trustee’s rights and interests in and to the Mortgage
Note, the Security Instrument, the other Mortgage Loan Documents and the Financing
Agreement to the Credit Provider, in which event the Trustee shall (a) assign (in recordable
form, if applicable) all of its rights and interests in and to the Mortgage Note, the Security
Instrument, the other Mortgage Loan Documents and the Financing Agreement to the Credit
Provider, and endorse the Mortgage Note to the Credit Provider and (b) execute all such
documents presented by or on behalf of the Credit Provider as are necessary to legally and
validly effectuate the assignments provided for in the preceding clause (a). The Credit Provider
shall hold the Mortgage Note and the Security Instrument for the benefit of the Bondholders. If,
following such assignments, a Wrongful Dishonor occurs and continues for more than five
Business Days, the Credit Provider agrees that all rights and interests assigned by the Trustee to
the Credit Provider pursuant to this Section 2.4(3) shall automatically, without any further action
on the part of the Credit Provider, transfer to the Trustee. Notwithstanding the foregoing, the
Credit Provider agrees to take such action and to execute and deliver and to facilitate the
recordation of such documents provided to the Credit Provider as the Trustee deems reasonably
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necessary to evidence the transfer to the Trustee of all rights and interests so assigned by the
Trustee to the Credit Provider pursuant to this Section 2.4(3). Upon the cure of the Wrongful
Dishonor, the transfer of such rights and interests to the Trustee shall automatically terminate,
and such rights and interests shall revert to the Credit Provider automatically. No assignment
pursuant to this Section 2.4(3) shall affect the Credit Provider’s obligations under the Credit
Facility .
2.4.(4) Trustee’s Assignment. The Trustee’s assignment to the Credit
Provider pursuant to Section 2.4(2) or 2.4(3) and the Trustee’s endorsement of the Mortgage
Note to the Credit Provider pursuant to Section 2.4(2) or 2.4(3) shall be without recourse, except
that the Trustee shall (a) represent and warrant in connection with such assignment and
endorsement that (1) the Trustee has the power and authority to assign such documents and
instruments to the Credit Provider and to endorse the Mortgage Note to the Credit Provider, (2)
the assignment of such documents and instruments and the endorsement of the Mortgage Note to
the Credit Provider have been duly authorized and (3) the Trustee has not previously assigned
any such documents or instruments or endorsed the Mortgage Note to any other person and (b)
certify the principal amount outstanding under the Mortgage Note.
Section 2.5 Exercise of Assigned Rights. Subject to the Reserved Rights of
the Issuer and to the provisions of Section 2.2, Section 2.3, Section 2.4 and Section 2.6 of this
Assignment, the Issuer agrees that either Assignee, in its own name or in the name of the Issuer,
may enforce all of the Assigned Rights and all obligations of the Borrower under the Assigned
Documents, without regard to whether the Issuer is in default under the Assigned Documents or
under this Assignment. In order to implement the foregoing, the Issuer appoints each Assignee,
and its successors and assigns, as the Issuer’s true and lawful attorney-in-fact, irrevocably, with
power of substitution to do any or all of the foregoing in the name, place and stead of the Issuer.
This power of attorney, being coupled with an interest, is irrevocable as long as this Assignment
shall remain in effect as to such Assignee. The Assignees shall not be obligated by reason of this
Assignment or otherwise to perform or be responsible for the performance of any of the
covenants or agreements of the Issuer under the Assigned Documents. In no event shall (a) the
exercise of any of the foregoing rights, remedies or powers or (b) any default under any of the
Assigned Documents andor the Credit Facility Agreement result in a redemption of the Bonds or
an acceleration of the Bonds pursuant to the terms of the Indenture unless the Credit Provider
shall have directed such redemption or acceleration in writing. The Issuer shall fully cooperate
with the Assignees in their enforcement of the Assigned Rights or obligations of the Borrower
under the Assigned Documents and take such steps as reasonably requested to effectuate the
same. The Borrower shall reimburse the Issuer for all of the Issuer’s out-of-pocket expenses
incurred in connection with the Issuer’s compliance with the preceding sentence.
Section 2.6 Exclusive Exercise of RiPhts bv the Credit Provider: Exclusive
Exercise of Rights by the Trustee.
2.6.(1) The Credit Provider. Notwithstanding any other provision of this
Assignment to the contrary, until this Assignment is terminated as to the Credit Provider, as
provided in Section 15 of this Assignment, or until a Wrongful Dishonor shall have occurred
and, in that event, only if the Wrongful Dishonor continues for more than five Business Days,
the Credit Provider shall, subject to the assignment of the Mortgage Loan Payments Interest to
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the Trustee pursuant to Section 2.3 of this Assignment, have (a) exclusive dominion and control
over, and the sole right to exercise, the Mortgage Loan Rights and (b) the sole and exclusive
right to exercise all of the rights, powers, options, privileges and remedies provided to the
Assignees in this Assignment, including, but not limited to, all rights to enforce all obligations of
the Borrower under the Assigned Documents and to enforce all of the Assigned Rights to the
total exclusion of the Trustee, and without the consent of the Trustee, and the Trustee shall not
have, and may not exercise, any of such rights, powers, options, privileges and remedies. Any
one or more of the Mortgage Loan Rights afforded to the Credit Provider under the provisions of
this Assignment may be exercised by the Credit Provider concurrently with or independently of
the exercise of any one or more other Mortgage Loan Rights. Consistent with the foregoing,
until this Assignment is terminated as to the Credit Provider, as provided in Section 15 of this
Assignment, or until a Wrongful Dishonor shall have occurred and, in that event, only if the
Wrongful Dishonor continues for more than five Business Days, the proceeds of any foreclosure
of the Mortgaged Property or other enforcement of the Assigned Documents, the proceeds of any
sale of the Mortgaged Property, the rents and other amounts generated by the holding, leasing,
operation or other use of the Mortgaged Property, and any condemnation and insurance
proceeds, shall be applied by the Credit Provider in accordance with the terms of the Security
Instrument and the other Mortgage Loan Documents, as the Credit Provider shall direct, in its
discretion. The Trustee agrees that, in order to effectuate the purposes of this Assignment and
the assignment of the Mortgage Loan Rights to the Credit Provider, the Trustee, for itself and for
any successor or replacement Trustee, unconditionally appoints the Credit Provider as the
Trustee’s true and lawful attorney-in-fact, irrevocably, with power of substitution, to execute,
acknowledge and deliver any notice, document, certificate, paper, instrument or pleading and to
do in the Trustee’s name, place and stead, all such acts, things and deeds for and on behalf of the
Trustee under this Assignment and/or any of the Assigned Documents which the Trustee could
or might do or which may be necessary, desirable or convenient in the Credit Provider’s sole
discretion to effectuate the purposes of this Assignment and/or any Assigned Document. This
power of attorney and the rights, remedies, power and authority granted by the Trustee to the
Credit Provider in this Assignment are declared by the Trustee to be coupled with an interest and
irrevocable until the Reimbursement Agreement is no longer in full force and effect or until a
Wrongful Dishonor shall have occurred and shall have continued for more than five Business
Days and may be exercised by the Credit Provider in the name of the Credit Provider, in the
name of the Trustee or in the names of the Credit Provider and the Trustee, as the Credit
Provider may at any time or from time to time determine; the Trustee confirms and ratifies all
acts and deeds taken or to be taken by the Credit Provider as attorney-in-fact.
2.6.(2) Trustee. Only at such time as this Assignment shall have
terminated as to the Credit Provider as provided in Section 15 of this Assignment or during such
period of time as there exists a Wrongful Dishonor which has continued for more than five
Business Days may the Trustee exercise any of the rights, powers, options, privileges and
remedies provided to the Assignees under this Assignment, including, but not limited to, the
Mortgage Loan Rights and all rights to enforce all obligations of the Borrower under the
Assigned Documents and to enforce all of the Assigned Rights to the exclusion of the Credit
Provider, and without the consent of the Credit Provider, provided that, and notwithstanding any
such Wrongful Dishonor, the Credit Provider shall be entitled to receive all notices pursuant to
this Assignment, the Indenture and the Assigned Documents.
Assignment and Intercreditor Agreement 11
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2.6.(3) Disclaimer of Assumption of Oblipations. Neither the Trustee
nor the Credit Provider shall be deemed by reason of this’Assignment to have assumed any
obligations of the Issuer, under the Indenture or the Financing Agreement.
Section 2.7 Confirmation of Assignment. In order to confirm and evidence
this Assignment, the Issuer has (a) delivered to the Credit Provider and the Trustee and the
Credit Provider and the Trustee acknowledge receipt of, a signed counterpart of each of the
Assigned Documents and (b) executed and delivered to the Credit Provider and the Trustee
Uniform Commercial Code financing statements covering the Issuer’s interest in the Assigned
Rights in form sufficient for filing with the California Secretary of State and the Recorder’s
Office of County, naming the Credit Provider and the Trustee as secured parties.
The Credit Provider and the Trustee acknowledge the Trustees’s receipt and custody of (a) the
original executed Mortgage Note, endorsed to the order of the Trustee and Fannie Mae, as their
interests may appear, and (b) the original Security Instrument. The Issuer shall, at any time after
the date of this Assignment, at the request of either Assignee, execute and deliver such financing
statements, continuation statements and other instruments, in forms acceptable to the requesting
Assignee, as either Assignee may request from time to time or as are necessary in such
Assignee’s opinion to further confirm and evidence this Assignment.
Section 2.8 Further Assurances. The Issuer covenants that it will, at the sole
expense of the Borrower, cooperate to the extent necessary with the Borrower, the Trustee and
the Credit Provider in their defenses of the security for the Bonds against the claims and
demands of all Persons, and will do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, such additional and supplemental agreements,
instruments and documents, do such further acts, and make such further transfers as the Trustee
or the Credit Provider may reasonably request to effectuate the purpose and intent of this
Assignment. The Issuer shall execute and the Credit Provider and the Trustee shall do, execute,
acknowledge and deliver, such additional and supplemental agreements, documents and
instruments, do such further acts and make such further transfers as the Credit Provider or the
Trustee may reasonably require for the better assuring, transferring, conveying, assigning and
confirming to the Credit Provider and the Trustee the interests to be assigned pursuant to this
Assignment.
Section 2.9 No Other Encumbrances. The Issuer covenants that, except as
otherwise provided in the Indenture and this Assignment, it will not sell, convey, mortgage,
encumber or otherwise dispose of any of the Assigned Rights or any of the Assigned Documents.
Section 2.10 Consent Required for Amendments. The Issuer covenants that it
will not agree to any amendment, modification, supplement, waiver or consent with respect to
any of the Assigned Documents, other than in relation to the Reserved Rights, without the prior
written consent of the Trustee and the Credit Provider. So long as this Assignment shall not have
terminated as to the Credit Provider as provided in Section 15 of this Assignment, and no
Wrongful Dishonor shall have occurred, or if it shall have occurred, shall not have continued for
more than five Business Days, the Trustee shall, at the written direction of the Credit Provider,
consent to, and shall not, without the Credit Provider’s prior written consent, consent to any
proposed amendment, supplement, waiver, or modification to, or revision of, any Assigned
Document, provided, however, that no such amendment, supplement, waiver, modification or
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revision to the Mortgage Note shall change the (a) outstanding principal amount, the interest rate,
the maturity date, the due date for the payment of interest, the terms of mandatory prepayment or
governing law or jurisdiction provisions without the Trustee’s prior written consent; or (b)
timing or amount of the Issuer’s Annual Fee without the Issuer’s consent.
Section 2.11 Insurance: Condemnation.
2.1 1 .( 1) Insurance. The Borrower covenants and agrees that the Credit
Provider, the Loan Servicer and the Trustee shall each be named as a mortgagee on all fire,
extended coverage and other hazard insurance policies required under the Assigned Documents,
provided that all insurers shall be directed to pay all proceeds of such policies directly to the
Credit Provider, which proceeds shall be held and applied by the Credit Provider in accordance
with the terms of the Security Instrument and the other Mortgage Loan Documents, as the Credit
Provider shall direct, in its discretion, and the Borrower, as mortgagor, shall deal solely with the
Credit Provider or the Loan Servicer, as the Credit Provider shall direct, under the Assigned
Documents. Neither the Credit Provider, the Loan Servicer nor the Trustee shall have any
liability under this Assignment for any such application of insurance proceeds. Notwithstanding
the foregoing, so long as this Assignment shall continue in full force and effect as to the Credit
Provider, and no Wrongful Dishonor shall have occurred, or if it shall have occurred, shall not
have continued for more than five Business Days, the Credit Provider and the Loan Servicer
shall be the sole loss payees on all fire, extended coverage and other hazard insurance policies
required under the Mortgage Loan Documents, and all insurers shall be directed to pay all
proceeds of such policies directly to the Credit Provider. Only at such time as this Assignment
shall have terminated as to the Credit Provider as provided in Section 15 of this Assignment or
during such period of time as there exists a Wrongful Dishonor which shall have continued for
more than five Business Days shall the Trustee be deemed a loss payee entitled to receive the
proceeds of such policies. The Borrower further covenants and agrees that the Credit Provider,
the Trustee and the Issuer shall each be a named insured on all liability insurance policies
required under the Assigned Documents.
2.1 1.(2) Condemnation. The Borrower covenants and agrees that all
proceeds of any condemnation award or award in lieu of condemnation shall be paid solely to the
Credit Provider, it being agreed that so long as this Assignment shall continue in full force and
effect as to the Credit Provider, and no Wrongful Dishonor shall have occurred, or if it shall have
occurred, shall not have continued for more than five Business Days, the Credit Provider shall be
the sole payee with respect to all condemnation and like awards and all awards in lieu of
condemnation. Only at such time as this Assignment shall have terminated as to the Credit
Provider as provided in Section 15 of this Assignment or during such period of time as there
exists a Wrongful Dishonor which shall have continued for more than five Business Days shall
the Trustee be entitled to receive such proceeds. All proceeds of a condemnation award or other
award in lieu of condemnation received by the Credit Provider shall be held and applied by the
Credit Provider in accordance with the terms of the Security Instrument, as the Credit Provider
shall direct, in its discretion, and the Borrower, as mortgagor, shall deal solely with the Credit
Provider or the Loan Servicer, as the Credit Provider shall direct, under the Assigned
Documents. Neither the Credit Provider nor the Trustee shall have any liability under this
Assignment for any such application of condemnation award proceeds. The Credit Provider and
the Trustee shall execute, acknowledge and deliver all such documents presented by or on behalf
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of the Credit Provider as shall be necessary to evidence or confirm the provisions of Section
2.1 I( 1) and this Section 2.11(2), as applicable.
Section 2.12 Possession of Mortgage Note and Security Instrument:
Records and Books of Account: Examination of Records and Books of Account.
2.12.( 1) Possession of Mortgage Note and Security Instrument. The
Credit Provider shall have custody of the original Mortgage Note, duly endorsed to the Trustee
and the Credit Provider, as their interests may appear, and the recorded Security Instrument. The
originals (or, where recorded, executed copies) of all other Mortgage Loan Documents, shall be
delivered to, held by, and be under the exclusive dominion and control of, the Credit Provider.
2.12.(2) Records and Books of Account. The Trustee shall keep, or
cause to be kept, proper records and books of account in which complete and accurate entries
shall be made of all of its transactions relating to the Mortgage Loan and the Assigned
Documents, including, but not limited to, payments made under the Mortgage Loan and all funds
and accounts established by or held pursuant to the Indenture with respect to the Mortgage Loan.
2.12.(3) Examination of Records and Books of Account. The Trustee
covenants and agrees that all records and books of account in its possession relating to the
Mortgage Loan, the Assigned Documents and all records and books of account regarding the
receipt and distribution of payments on the Mortgage Loan and the Borrower’s compliance with
the terms and conditions of the Mortgage Loan and the Assigned Documents, shall be open to
inspection, examination and audit at any reasonable time by the Issuer, the Borrower, the Loan
Servicer and the Credit Provider or by such accountants or other agents as the Issuer, the
Borrower, the Loan Servicer or the Credit Provider may from time to time designate. In addition,
the Issuer, the Borrower, the Loan Servicer and the Credit Provider shall have the right, at any
time and from time to time, to require the Trustee to furnish such documents to the Issuer, the
Borrower, the Loan Servicer and the Credit Provider, at the Borrower’s expense, as the Issuer,
the Borrower, the Loan Servicer or the Credit Provider, as the case may be, from time to time,
deems reasonably necessary in order to determine that the provisions of the Mortgage Loan have
been complied with.
Section 2.13 Disposition of Mortgage Loan. Unless a Wrongful Dishonor
shall have occurred and be continuing, the Trustee shall not, except at the written direction or
with the prior written consent of the Credit Provider, assign, transfer or dispose of (a) its rights or
interests in and to the Mortgage Loan, the Mortgage Note, the Security Instrument or any other
Mortgage Loan Document or (b) the Mortgage Loan Payments Interest to any party other than to
(1) the Credit Provider as provided in Section 2.4(2) and Section 2.4(3) of this Assignment, (2) a
successor Trustee pursuant to the terms of the Indenture or (3) to the Issuer, as provided in
Section 15 of this Assignment.
2.13.(1) Credit Provider Assignment. The Credit Provider shall, in its
sole discretion, have the right to assign, sell or transfer its right, title and interest in, to and under
the Assigned Documents, the Assigned Rights and this Assignment to any Person.
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Section 3. Disposition of Credit Facility. On the Closing Date, the Credit Provider
shall deliver the Credit Facility to the Trustee. The Trustee shall not, without the prior written
consent of the registered owners of all of the Bonds then Outstanding, transfer the Credit Facility
except as provided in Section 7.2 of the Indenture.
Section 4. Limitations on Issuer. From and after the date of this Assignment, the
Issuer shall not, except with respect to its Reserved Rights (a) deal in any manner with any of the
Assigned Documents, (b) exercise or refrain from exercising any of the Assigned Rights or any
rights or remedies under the Assigned Documents, (c) purport to exercise any of the Mortgage
Loan Rights or (d) take any other action with respect to the Assigned Documents, the Assigned
Rights or the Mortgage Loan Rights including, but not limited to, waiving or releasing the
Borrower from any Event of Default or the performance or observance of any obligation or
condition under any Assigned Document.
Section 5. Effect of Default. In the event that, following a default under the
Mortgage Loan (a) the Mortgaged Property is acquired by either or both of the Assignees, or
their nominees, as a result of a foreclosure or the acceptance of a deed in lieu of foreclosure or
comparable conversion of the Mortgage Loan or other enforcement provisions of the Security
Instrument, (b) the Bonds are not redeemed with funds provided under the Credit Facility and (c)
this Assignment shall continue in full force and effect as to the Credit Provider and no Wrongful
Dishonor shall have occurred, or if it shall have occurred, shall not have continued for more than
five Business Days, the Mortgaged Property shall be conveyed to the Credit Provider or its
nominee, and all decisions thereafter with respect to the Mortgaged Property (including, but not
limited to, all decisions with respect to the management, operation, maintenance and sale of the
Mortgaged Property, and the price and terms of such sale, the payment or contesting of real
estate taxes, rebuilding or restoration after damage, destruction or taking, alterations,
improvements, insurance coverage, litigation and conversion to a cooperative or condominium),
shall be made solely by the Credit Provider.
Section 6. Mortgape Loan Servicing. The identity of the Loan Servicer being of
material importance to the Credit Provider, this Assignment is accepted by the Credit Provider
on the basis, and with the understanding, that the Loan Servicer will be determined solely by the
Credit Provider. Accordingly, so long as this Assignment shall continue in full force and effect
as to the Credit Provider and no Wrongful Dishonor shall have occurred, or if it shall have
occurred, shall not have continued for more than five Business Days, the Issuer, the Trustee and
the Borrower agree that the Credit Provider shall, in its discretion, have the sole and exclusive (a)
right to appoint the Loan Servicer and arrange for the servicing of the Mortgage Loan and the
Assigned Documents, provided such servicing shall be performed by a Fannie Mae approved
seller-servicer in accordance with the requirements of the Credit Provider, (b) power and
authority, on its own behalf and/or on behalf of the Trustee and the Issuer, to do or refrain from
doing any act in connection with the Mortgage Loan and/or the Assigned Documents, including
any act provided for in this Assignment and (c) right to remove the Loan Servicer (for any
reason), terminate its right to service the Mortgage Loan, and appoint a new Loan Servicer. The
Issuer, the Trustee and the Borrower further acknowledge and agree that the servicing
arrangements between the Credit Provider and the Loan Servicer are subject to amendment or
termination without the consent of the Issuer, the Trustee or the Borrower and that none of the
Issuer, the Trustee or the Borrower shall have any rights under or be a third party beneficiary of
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such arrangements. The Trustee, the Borrower and the Issuer acknowledge and agree that any
Loan Servicer designated by the Credit Provider shall be paid a fee for its services. Neither the
Issuer, the Trustee nor the Credit Provider shall have the obligation to pay such fees from their
own funds. The Trustee, the Borrower and the Issuer acknowledge the right of the Loan Servicer
to deduct the Servicing Fee and the Facility Fee from monthly payments on the Mortgage Note
made by the Borrower so long as the amount remitted to the Trustee includes interest at the Pass-
Through Rate. As long as the Loan Servicer is servicing the Mortgage Loan, the Borrower shall
deliver to the Issuer, the Loan Servicer and the Trustee copies of all reports and notices required
by the Mortgage Loan Documents. The Credit Provider delegates to the Loan Servicer the right
to exercise such of the Mortgage Loan Rights as shall be approved or confirmed from time to
time by the Credit Provider.
Section 7. Borrower’s Acknowledgments. The Borrower acknowledges that all of
the right, title and interest of the Issuer (excluding the Reserved Rights of the Issuer) in, to and
under the Assigned Documents, including, but not limited to, the Issuer’s right to collect and
receive all amounts payable under the Assigned Documents has, pursuant to this Assignment,
been assigned by the Issuer to the Assignees as provided in this Assignment. The Borrower
further acknowledges and consents to all of the terms and provisions set forth in this Assignment.
Section 8. Regulatory Agreement.
Section 8.1 Monitoring of Regulatory Agreement. The Issuer shall have the
sole obligation to monitor compliance with the Regulatory Agreement.
Section 8.2 Termination of Regulatory Agreement. Upon expiration or
termination of the Regulatory Agreement pursuant to its terms, the Issuer, in its capacity as the
Issuer, shall promptly notify Credit Provider of the termination of the Regulatory Agreement.
Section 8.3 Right To Enforce Compliance. The Issuer, the Trustee, the Loan
Servicer and Credit Provider shall each have the right, but not the obligation, to enforce
compliance by the Borrower and its successors as subsequent owners of the Mortgaged Property
with the Regulatory Agreement. Notwithstanding the foregoing, the Trustee agrees that it will,
subject to the provisions of the Indenture and Article IX, at the direction of the Issuer, take such
action as may be required to achieve compliance by the Borrower with the Regulatory
Agreement.
Section 8.4 Notices of Violations of the Regulatory APreement. Promptly
upon determining that a violation of the Regulatory Agreement has occurred, the Issuer shall
send written notice of such violation to Credit Provider, the Loan Servicer and the Trustee. The
Issuer’s notice shall set out the nature of the violation and state whether the violation has been
cured or has not been cured but is curable within a reasonable period of time, or is incurable and
contain a copy of the Issuer’s notice of violation to the Borrower. If the Borrower fails to cure
the violation to the reasonable satisfaction of the Issuer within the time period set forth in the
Issuer’s notice of the violation to the Borrower (which period shall not be shorter than any
applicable period set out in the Regulatory Agreement for the cure of such violation) and if, as a
consequence of such failure, the Issuer declares an Event of Default under the Regulatory
Agreement, the Issuer shall provide prompt written notice to Credit Provider, the Loan Servicer
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and the Trustee of the Event of Default (together with a copy of any notice of the Event of
Default provided to the Borrower).
Section 8.5 Cure Rights. Each of Credit Provider, the Loan Servicer and the
Trustee shall have the right, but not the obligation, to cure any default by the Borrower under the
Regulatory Agreement. Such cure may be made even after the Issuer’s notice of declaration of
an Event of Default under the Regulatory Agreement, provided however, such cure right shall
not affect any requirements of the Code and the Act. Credit Provider shall have the additional
right, but not the obligation, to cure any violation of the Regulatory Agreement by assumption of
the management and operation of the Mortgaged Property, directly or through any Credit
Provider approved seller-servicer or a receiver under the Security Instrument. Any operation of
the Mortgaged Property by Credit Provider or its successors or assigns shall be in accordance
with the Regulatory Agreement, but only so long as the Regulatory Agreement remains in effect.
Section 9. Issuer’s Covenants.
Section 9.1 Limitations on Issuer. The Issuer shall not consent to any
amendment, supplement to, or restatement of any Bond Document or the Regulatory Agreement,
or any other document executed or delivered in connection with the Bonds without the prior
written consent of Credit Provider.
Section 9.2 Enforcement. Notwithstanding any other provision in this
Assignment to the contrary, until this Assignment shall have terminated as to the Credit Provider
as provided in Section 15 of this Assignment or until a Wrongful Dishonor shall have occurred
and, in that event, only if the Wrongful Dishonor shall have continued for more than five
Business Days, neither the Issuer nor any person under its control shall exercise any remedy or
direct any proceeding under the Indenture, the Financing Agreement or the Regulatory
Agreement other than as set out in this Section.
(a) Enforcement of Certain Rights and Obligations. Subject to subsection
(b), the Issuer may:
(1) Tax Covenants. Seek specific performance of the tax covenants of the
Indenture, the Tax Certificate and the Financing Agreement, injunctive relief against acts
which may be in violation of any of the tax covenants, and enforce the Borrower’s
obligation to pay amounts for credit to the Rebate Fund;
(2) Regulatory Agreement. Seek specific performance of the obligations of
the Borrower or any other owner of the Property under the Regulatory Agreement and
injunctive relief against acts which may be in violation of the Regulatory Agreement or
otherwise unlawful; provided, however, that the Issuer may enforce any right it may have
under the Regulatory Agreement for monetary damages only against Excess Revenues, if
any, of the Borrower, unless Credit Provider otherwise specifically consents in writing to
the use of other funds; and
(3) Reserved Rights. Take whatever action at law or in equity which appears
necessary or desirable to enforce the Reserved Rights; provided, however, that the Issuer
or any person under its control may only enforce any right it may have for monetary
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damages against Excess Revenues, if any, of the Borrower, unless Credit Provider
otherwise specifically consents in writing to the enforcement against other funds of the
Borrower.
(b) Overriding Limitations. In no event shall the Issuer:
(1) prosecute its action to a lien on the Mortgaged Property;
(2) take any action which may have the effect, directly or indirectly, of
impairing the ability of the Borrower to timely pay the principal of, interest on, or other
amounts due under, the Loan or of causing the Borrower to file a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the Borrower
under any applicable liquidation, insolvency, bankruptcy, rehabilitation, composition,
reorganization, conservation or other similar law in effect now or in the future; or
(3) interfere with the exercise by Credit Provider of any of its rights under the
Loan Documents or the Credit Facility Agreement upon the occurrence of an event of
default by the Borrower under the Loan Documents or the Credit Facility Agreement; or
(4) take any action to accelerate or otherwise enforce payment or seek other
remedies with respect to the Loan or the Bonds.
(c) Notice of Action. The Issuer shall provide written notice to Credit
Provider, the Trustee and the Loan Servicer immediately upon talung any action at law or in
equity to exercise any remedy or direct any proceeding under the Indenture, the Financing
Agreement or the Regulatory Agreement.
(d) Definition of “Excess Revenues”. As used in this Section, the term
“Excess Revenues” means, for any period, the net cash flow of the Borrower available for
distribution to shareholders, members or partners (as the case may be) for such period, after the
payment of all interest expense, the amortization of all principal of all indebtedness coming due
during such period (whether by maturity, mandatory sinlung fund payment, acceleration or
otherwise), the payment of all fees, costs and expenses on an occasional or recurring basis in
connection with the Loan or the Bonds, the payment of all operating, overhead, ownership and
other expenditures of the Borrower directly or indirectly in connection with the Mortgaged
Property (whether any such expenditures are current, capital or extraordinary expenditures), and
the setting aside of all reserves for taxes, insurance, water and sewer charges or other similar
impositions, capital expenditures, repairs and replacements and all other amounts which the
Borrower is required to set aside pursuant to agreement, but excluding depreciation and
amortization of intangibles.
Section 9.3 Specific Performance. The Borrower acknowledges and agrees
that were money damages a remedy under the Regulatory Agreement or in connection with any
of the tax covenants of the Indenture, the Tax Certificate and the Financing Agreement, money
damages alone would not be an adequate remedy at law for a default by the Borrower arising
from a failure to comply with the Regulatory Agreement or the tax covenants and therefore the
Borrower agrees that the remedy of specific performance shall be available to the Issuer andor
the Trustee in any case.
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Section 10. Amendment of Agreements. The Issuer agrees that it will not consent to
any amendment, modification of, supplement to, or waiver or consent with respect to, the
Financing Agreement, the Indenture, the Regulatory Agreement, or any other documents
executed or delivered in connection with the Bonds without the prior written consent of the
Credit Provider.
Section 11. Representations: Warranties and Covenants.
Section 1 1.1 Representations: Warranties and Covenants of the Issuer. The
Issuer represents, warrants and covenants to the Assignees that:
(i) the making of the Mortgage Loan is in accordance with the Act;
(ii) the Issuer is a validly existing municipal corporation, duly created,
organized and existing under the laws of the State;
(iii) the Issuer is the owner of all right, title and interest in and to the
Assigned Documents and the Assigned Rights, and has all necessary power and authority (a) to
execute, deliver and carry out the terms and provisions of this Assignment and to assign the
Assigned Documents and the Assigned Rights to the Assignees pursuant to this Assignment free
of any liens or restrictions other than those created under the Indenture, and (b) to execute and
deliver the Indenture;
(iv) the Issuer has duly (a) authorized the execution, delivery and
performance of this Assignment, the Indenture and any and all other agreements to which it is a
party, including, but not limited to, the Assigned Documents to which it is a party (collectively,
with this Assignment, the “Issuer’s Documents”) and (b) executed and delivered each of the
Issuer’s Documents;
(v) the Issuer’s Documents are the legal, valid and binding obligations
of the Issuer enforceable against the Issuer in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, reorganization, insolvency or other similar
laws affecting the enforcement of creditors’ rights generally or by general principles of equity;
(vi) the execution, delivery and performance of the Issuer’s Documents
by the Issuer will not (a) violate any provision of law, or any rules or regulations promulgated
under any law, (b) violate, be in conflict with or constitute a default (after notice or lapse of time,
or both) under the Act or under the by-laws of the Issuer, as amended from time to time, or any
term or provision of any agreement, indenture, resolution or other instrument by which the Issuer
is bound or to which any of its assets is subject, or (c) violate any judgment, decree,
governmental order, writ, injunction, statute, rule or regulation of any court or governmental
body, agency or other instrumentality applicable to the Issuer;
(vii) the Issuer is not a party to, or otherwise subject to any provision
contained in, any agreement or other instrument (including the Act) which restricts or otherwise
limits the assignability of the Assigned Documents or the Assigned Rights pursuant to this
Assignment;
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(viii) except as specifically provided for in the Indenture, the Issuer has
not granted and will not grant any lien or security interest in the Assigned Documents or the
Assigned Rights and has not sold, transferred or otherwise disposed of any interest in the
Assigned Documents or the Assigned Rights;
(ix) the principal place of business and chief executive office of the
Issuer and the office where the Issuer keeps all records concerning the Assigned Rights are
located at the address set forth in this Assignment for notices to be given to the Issuer;
(x) no further action, consent, approval, registration or filing by or
with any governmental agency, bureau, commission or court is required in connection with the
execution, delivery, adoption and/or performance, as the case may be, by the Issuer of the
Issuer’s Documents other than as have been (or will be, when required) made or obtained;
(xi) the Issuer shall comply with the covenants, requirements and
provisions of the Indenture applicable to it and perform all of its obligations under the Indenture;
(xii) the Issuer has complied and will comply with all material
provisions of the Act applicable to the Bonds and the transactions contemplated by the
provisions of the Indenture; and
(xiii) no litigation or administrative action of any nature has been served
on it and is now pending (i) seeking to restrain or enjoin the execution and delivery of this
Assignment or the Assigned Documents, or the adoption of the Indenture or in any manner
questioning the proceedings or authority relating to any of the foregoing or otherwise affecting
the validity of the Bonds or (ii) as to the existence or authority of the Issuer or that of its present
or former members or officers and, to the best knowledge of the Issuer, none of the foregoing are
threatened.
Section 11.2 Representations and Warranties of the Credit Provider. The
Credit Provider represents and warrants to the Issuer and the Trustee that this Assignment has
been duly authorized, executed and delivered by the Credit Provider; assuming due
authorization, execution and delivery of this Assignment by the Issuer and the Trustee, this
Assignment constitutes a legal, valid and binding obligation of the Credit Provider enforceable
against the Credit Provider in accordance with its terms, subject to any applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general applicability relating to or
affecting creditors’ rights from time to time in effect, and to the exercise of judicial discretion in
accordance with general principles of equity, whether applied by a court of law or of equity.
Section 11.3 Representations, Warranties and Covenants of the Borrower.
The Borrower represents, warrants and covenants that:
(i) all representations, warranties, covenants, indemnities and other
agreements of the Borrower set forth in the Assigned Documents, and all rights, powers and
remedies of the Issuer under the Assigned Documents, are acknowledged to be assigned to and
for the benefit of the Assignees, and all of such rights, powers and remedies may, as provided in
this Assignment, be enforced by the Assignees (in the priorities established by this Assignment)
in the name, place and stead of the Issuer;
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(ii) the Assignees (in the priorities established by this Assignment), as
the holders of all of the rights, remedies, authority, privileges, powers and options and authority
of the Issuer, have the exclusive authority to exercise all of the rights, powers and authority of
the Issuer, and to take any action or do anything, with respect to, under or in connection with or
in the enforcement of, the Assigned Documents and the Assigned Rights;
(iii) it will perform and observe, for the benefit of the Assignees (in the
priorities established by this Assignment), all of the covenants and agreements of the Borrower
under the Assigned Documents as if the Assignees were named in the Assigned Documents
rather than the Issuer;
(iv) it will not cancel, amend, surrender, abridge or otherwise modify
the Assigned Documents without the prior written consent of the Assignees pursuant to the terms
of this Assignment;
(v) it will not seek to recover from an Assignee any monies owed to
the Borrower by the other Assignee, pursuant to the Assigned Documents, whether by reason of
defense, set-off, counterclaim or deduction for any reason whatsoever;
(vi) whenever the consent or approval of the Issuer is required or
permitted under the Assigned Documents, the written consent or approval of the Assignee having
the right to give such consent pursuant to this Assignment shall, in lieu of such consent or
permission of the Issuer, be obtained before taking any action or omitting to take any action for
which such consent or permission is needed; and
(vii) it will simultaneously give to the Assignees copies of all notices
and communications required to be given by the Borrower under the Assigned Documents.
Nothing contained in this Assignment shall be deemed to change, modify or waive any of the
representations, warranties, covenants or agreements of the Borrower contained in the Assigned
Documents.
represents and warrants to Credit Provider that:
Section 11.4 Representations and Warranties of the Trustee. The Trustee
(i) it is a [TYPE OF ENTITY];
(ii) it has the power and authority to accept and execute trusts and has
duly accepted its appointment as Trustee under the Indenture;
(iii) it has the power and authority to execute and deliver, accept the
rights and duties granted in, and perform its obligations under, this Assignment;
(iv) all corporate action required to authorize the acceptance of its
appointment as Trustee under the Indenture and the execution, delivery and performance of this
Assignment and the effectuation of the transactions provided for in this Assignment has been
duly taken;
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(v) the execution and delivery of this Assignment by the Trustee, as
trustee, and the performance of its duties and obligations under this Assignment as provided in
this Assignment are not in violation of any provisions of its organizational documents or by-
laws, any law or regulation, any court or administrative order or any agreement or other
instrument to which it is a party or by which it may be bound; and
(vi) this Assignment has been duly authorized, executed, delivered and
has been duly accepted by its duly authorized officers and, assuming due authorization,
execution and delivery of this Assignment by the Issuer, Credit Provider and the Borrower,
constitutes a valid, binding and enforceable obligation of the Trustee, subject to applicable
bankruptcy, insolvency, reorganization, and other laws of general applicability relating to or
affecting creditors’ rights from time to time in effect, and to general equity principles.
Section 12. Control on Right of Redemption. Notwithstanding any inconsistent
provision of the Indenture or any of the Assigned Documents, the Issuer agrees that, so long as
the Credit Facility is in full force and effect and no Wrongful Dishonor shall have occurred, or if
it shall have occurred, shall not have continued for more than five Business Days, the Issuer shall
not exercise any option under the Indenture to redeem any or all of the Bonds without the prior
written consent of the Credit Provider.
Section 13. Exculpation. Notwithstanding any term or provision of this Assignment,
the Assigned Documents andor the Issuer’s Documents to the contrary, the Credit Provider shall
not be liable under this Assignment or under any of the Assigned Documents or the Issuer’s
Documents to any other party to this Assignment for any action taken or omitted by the Credit
Provider in connection with the Mortgage Loan, this Assignment, the Assigned Documents or
the Issuer’s Documents, except for such action or omission which is directly attributable to its
own gross negligence or willful misconduct. The Credit Provider shall be protected and shall
incur no liability in relying upon the accuracy, acting in reliance upon the contents, and assuming
the genuineness, of any notice, demand, certificate, signature, instrument or other document
believed by the Credit Provider to be genuine and to have been duly executed by the appropriate
signatory. In addition, the Credit Provider shall be protected and shall incur no liability in relying
upon an Opinion of Counsel with respect to any action taken or not taken in good faith by the
Credit Provider under this Assignment, the Assigned Documents or the Issuer’s Documents. The
Credit Provider shall, at all times, be free to establish independently to its satisfaction and in its
absolute discretion the existence or non-existence, as the case may be, of any fact the existence
or non-existence of which shall be a condition to any term or provision of this Assignment or of
any of the Assigned Documents. The immunities and exemptions from liability of each Assignee
shall extend to its directors, officers, employees and agents.
Section 14. Disclaimers: Acknowledgments. Approval by the Credit Provider of the
Borrower, the Mortgage Loan, the Bonds or otherwise shall not constitute a warranty or
representation by the Credit Provider as to any matter. Nothing set forth in this Assignment or in
the subsequent conduct of the parties shall be deemed to constitute the Credit Provider as the
partner of any person for any purpose whatsoever.
Section 15. Termination. This Assignment (a) shall terminate and be of no further
force or effect as to the Credit Provider at such time as the Reimbursement Agreement is no
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longer in full force and effect and (b) shall terminate and be of no further force and effect as to
the Trustee at the earlier of (1) such time as the Bonds shall have been paid in full or deemed
paid in full as provided in the Indenture or (2) by mutual written agreement of the Issuer and the
Trustee after this Assignment shall have so terminated as to the Credit Provider, in which event
the Assigned Documents shall automatically revert to the Issuer without any further action on the
part of the Trustee. The Credit Provider agrees that upon termination of this Assignment solely
as to the Credit Provider, as provided in clause (a) of the preceding sentence, it will execute a
release, in recordable form, of its rights and interests under this Assignment.
Section 16. Liability of Borrower. The liability of the Borrower under this
Assignment is limited to the same extent as set forth in the Mortgage Note, the provisions of
which are, by this reference, incorporated in this Assignment and shall have the same force and
effect as if fully set forth in this Assignment.
Section 17. IncorDoration of Security Instrument. The provisions of the Security
Instrument are, by this reference, incorporated into this Assignment and shall have the same
force and effect as if fully set forth in this Assignment.
Section 18. Notice. All notices, certificates, demands and other communications
provided for in this Assignment shall be in writing and mailed (registered or certified mail, return
receipt requested, and postage prepaid), hand-delivered, with signed receipt, or sent by
nationally-recognized overnight courier:
If to the Issuer: City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Attention: Community Development
Telephone: (760) 434-2810
Facsimile: (760) 720-2037
To the Credit Provider: Fannie Mae
3900 Wisconsin Avenue, N.W.
Drawer AM
Washington, D.C. 20016-2899
Attention: Director, Multifamily Asset Management
Telephone: (202) 7 5 2-2 8 54
Facsimile: (202) 752-3542
Re: [$5,000,000] City of Carlsbad Multifamily Housing
Revenue Bonds (Mariposa Apartments) 2003 Series A; Red
Mortgage Capital, Inc.
[for messenger use 4000 Wisconsin Avenue, N.W., and delete
Drawer AM]
with a copy to: Fannie Mae
3900 Wisconsin Avenue, N.W.
Drawer AM
Washington, D.C. 20016-2899
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To the Trustee:
To the Borrower:
with a copy to:
To the Loan Servicer:
Attention: Vice President, Multifamily Services
Telephone: (202) 752-7869
Facsimile: (202) 752-8369
Re: [$5,000,000] City of Carlsbad Multifamily Housing
Revenue Bonds (Mariposa Apartments) 2003 Series A; Red
Mortgage Capital, Inc.
[for messenger use 4000 Wisconsin Avenue, N.W., and delete
Drawer AM]
[TRUSTEE]
[ADDRESS]
Telephone:
Facsimile:
CIC Calavera, L.P.
c/o Chelsea Investment Corporation
215 South Highway 101, Suite 200
Solana Beach, California 92075
Attention: Wally Dieckmann
Telephone: (858) 259-2624, Ext. 103
Facsimile: (858) 259-2644
Pillsbury Winthrop LLP
50 Fremont Street
San Francisco, California 94101
Attention: Gary P. Downs
Telephone: (415) 983-1835
Facsimile: (415) 983-1200
Red Mortgage Capital, Inc.
150 E. Gay Street, 22"d Floor
Columbus, OH 43215
Atten ti on : President
Telephone: (614) 857-1400
Facsimile: (614) 857-1410
The Issuer, the Trustee, the Borrower, the Credit Provider and the Loan Servicer, by notice given
under this Assignment, may designate any different addresses to which subsequent notices,
certificates, requests, demands or other communications shall be sent, but no notice directed to
any one such entity (except for the Credit Provider) shall be required to be sent to more than two
addresses. All such notices, certificates, demands and other communications shall be effective
when received at the address specified as aforesaid.
Section 19. Miscellaneous.
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Section 19.1 Waivers. The Assignees shall not by any act, delay, omission or
otherwise be deemed to have waived any of their rights or remedies under this Assignment and
no waiver whatever shall be valid, unless in writing signed by the Assignees, and then only to the
extent set forth in the waiver. A waiver by the Assignees of any default, right or remedy under
this Assignment on any one occasion shall not be construed as a waiver of any other default or be
a bar to any right or remedy the Assignees would otherwise have on any future occasion.
Section 19.2 Amendments. This Assignment may not be changed, modified or
discharged in whole or in part, unless set forth in a writing signed on behalf of both of the
Assignees and by the Issuer, each by their duly authorized officers.
Section 19.3 Governing Law. This Assignment shall be governed by and
construed in accordance with the laws of the State, without regard to conflicts of laws principles,
except to the extent that the laws of the United States of America prevail.
Section 19.4 WAIVER OF JURY TRIAL. THE PARTIES (A) COVENANT
AND AGREE NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE
ARISING UNDER THIS ASSIGNMENT TRIABLE BY A JURY AND (B) WAIVE ANY
RIGHT TO TRIAL BY JURY TO THE EXTENT THAT ANY SUCH RIGHT SHALL EXIST
NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF
COMPETENT LEGAL COUNSEL BY THE PARTES, AND THIS WAIVER IS INTENDED
TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH
THE RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE.
Section 19.5 Severability. Should any provision of this Assignment be held by
a court of competent jurisdiction to be enforceable only if modified, such holding shall not affect
the validity of the remainder of this Assignment, the balance of which shall continue to be
binding upon the parties to this Assignment with any such modification to become a part of this
Assignment and treated as though originally set forth in this Assignment. The parties further
agree that any such court is expressly authorized to modify any such unenforceable provision of
this Assignment in lieu of severing such unenforceable provision from this Assignment in its
entirety, whether by rewriting the offending provision, deleting any or all of the offending
provision, adding additional language to this Assignment, or by malung such other modifications
as it deems warranted to carry out the intent and agreement of the parties as embodied in this
Agreement to the maximum extent permitted by law. The parties expressly agree that this
Assignment as so modified by the court shall be binding upon and enforceable against each of
them. In any event, should one or more of the provisions of this Assignment be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions hereof, and if such provision or provisions are not modified
as provided above, this Assignment shall be construed as if such invalid, illegal or unenforceable
provisions had never been set forth herein.
Section 19.6 Additional Assignment. In the event that the Borrower is no
longer the owner of the Mortgaged Property and a new mortgagor is substituted in its place, or if
the Security Instrument is replaced by a new mortgage on the Mortgaged Property, the Issuer
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shall execute and deliver to the Assignees, and shall record, a new assignment, substantially the
same as this Assignment, which shall refer to this Assignment.
Section 19.7 No Merger of Interests. There shall be no merger of the interests
of any of the Bondholders with the interests of any holder of the Assigned Rights by reason of
the fact that the same person, firm or entity may acquire, own or hold, directly or indirectly, such
interests, unless and until such person, firm or entity and all others having an interest in the
Bonds and the Assigned Rights shall effect such merger in a written, duly recorded instrument.
Section 19.8 Reimbursement of Assignees. The Borrower shall reimburse
each Assignee, from time to time, for all the Assignee’s reasonable expenses, charges, costs, fees
and disbursements, and those of the Assignee’s attorneys, agents and employees, incurred in
connection with the performance of the Assignee’s powers and duties under this Assignment.
The Borrower shall indemnify and save each Assignee harmless against any liability which it
may incur in the exercise and performance of its powers and duties under this Assignment and
which are not due to its gross negligence or willful misconduct.
Section 19.9 Incorporation of Rights. All provisions of the Indenture, the
Financing Agreement, the Reimbursement Agreement and the Credit Facility applicable to the
rights of the Credit Provider are incorporated into this Assignment as if expressly set forth at
length in this Assignment, except as such rights are expanded or modified by the express
provisions of this Assignment. All provisions of the Indenture related to the duties, obligations,
standard of care, protections and immunities from liability afforded the Trustee under the
Indenture shall apply to the Trustee under this Assignment.
Section 19.10 Counterparts. This Assignment may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Assignment to produce or account for more than one such
counterpart.
Section 19.1 1 Assignment Without Recourse. This Assignment is made by the
Issuer without recourse in respect of the Mortgage Note or liabilities secured by the Assigned
Documents.
Section 19.12 Remarketing Agreement. The Issuer and the Borrower agree that
they will not enter into any amendment, modification, supplement or other document effecting a
change in any Remarketing Agreement applicable to the Bonds or enter into any new or
replacement Remarketing Agreement with respect to the Bonds without the prior written consent
of the Credit Provider.
Section 19.13 Approval of Documents. All documents relating to the
transactions described in this Assignment shall be subject to the approval of the Credit Provider,
in its discretion.
Section 19.14 Consent of the Credit Provider. If any provision of this
Assignment provides for the prior approval or consent of the Credit Provider or any waiver by
the Credit Provider and if a basis for the Credit Provider granting such approval, consent or
Assignment and Intercreditor Agreement
LA 1 : 1 OO4255.2
26 Mariposa Apartments
,/
waiver is not otherwise stated, then it is understood and agreed that such approval or consent will
be given by the Credit Provider in its discretion.
Section 19.15 Certain Notices to the Credit Provider and Loan Servicer. The
Trustee agrees to advise the Credit Provider and the Loan Servicer promptly in writing of (a) the
occurrence of any event of default known to it under the Indenture, the Financing Agreement, the
Credit Facility or any Mortgage Loan Document, or any event known to it which, with the
passage of time or service of notice, or both, would constitute an event of default under the
Indenture or under the Financing Agreement, the Credit Facility or any Mortgage Loan
Document, specifying the nature and period of existence of such event and the actions being
taken or proposed to be taken with respect to such event, (b) each proposed redemption of Bonds
(other than mandatory sinking fund redemption), (c) any failure by the Borrower to pay any fees,
costs or expenses due to the Issuer or the Trustee and (d) any failure by the Trustee to receive
any scheduled payment when due under the Mortgage Note or otherwise with respect to the
Mortgage Loan. The Trustee also agrees to give prompt written notice to the Loan Servicer (and
upon written request to the Credit Provider) of all payments received by the Trustee under the
Mortgage Note or otherwise with respect to the Mortgage Loan.
Section 19.16 Bailee. The Trustee agrees to act as bailee and agent on behalf of
the Credit Provider in relation to the Borrower’s pledge and grant of a security interest pursuant
to the Reimbursement Agreement to the extent, if any, the Borrower retains an interest in all
Funds and Accounts held by the Trustee under the Indenture.
Section 20. Exercise of Rights. Subject to the provisions of this Assignment, any one
or more of the rights and remedies afforded to the Assignees under the provisions of this
Assignment may be exercised by the particular Assignee concurrently with or independently of
the exercise of any or all other rights or remedies.
Section 21. Remedies Cumulative. The rights, powers and remedies of the Assignees
under this Assignment are in addition to all rights, powers and remedies given by statute or rule
of law and are cumulative. The exercise of any one or more of the rights, powers or remedies
provided in this Assignment shall not be construed as a waiver of any other rights, powers and
remedies of any of the Assignees.
Section 22. Obligations Limited. Neither Assignee, as such, shall be obligated to
take any steps which are or may be necessary to preserve any rights of the Assignee in and to the
Assigned Documents or the Assigned Rights against any other parties who may be liable in
connection therewith. Neither Assignee, as such, shall have a duty to comply with any
recording, re-recording, filing, re-filing, or other legal requirements necessary to establish or
maintain the validity, priority or enforceability of, or the Assignee’s rights in and to, the
Assigned Documents or the Assigned Rights.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Assignment and Intercreditor Agreement
LA 1 : 1004255.2
27 Mariposa Apartments
The parties have duly executed this Assignment as of the day and year first above
written.
CITY OF CARLSBAD
Name:
Title:
Assignment and Intercreditor Agreement
LA1 : 1004255.2
s-1 Mariposa Apartments
Assignment and Intercreditor Agreement
LA1 : 1004255.2
[TRUSTEE]
By :
Name:
Title:
s-2 Mariposa Apartments
Assignment and Intercreditor Agreement
LA1 : 1004255.2
FANNIE MAE
By:
Name:
Title:
s-3 Mariposa Apartments
Acknowledged, Accepted and Agreed to:
BORROWER:
CIC CALAWRA, L.P.,
a California limited partnership
By: Pacific Southwest Community Development
Corporation, a nonprofit public benefit
corporation
Its: Managing General PartnIer
By :
Brian F. Biber, Executive Director
By: CIC Calavera Hills, LLC, a California limited
liability company
Its: Co-General Partner
By:
James J. Schmid, Managing Member
Assignment and Intercreditor Agreement
LA1 :1004255.2
s-4 Mariposa Apartments
Assignment and Intercreditor Agreement
LA1 : 1004255.2
EXHIBIT A
Property Description
A- 1 Mariposa Apartments
[IS SUER’S ACKNOWLEDGEMENT]
STATE OF ) 1
COUNTY OF 1
On ,200- before me, a Notary
Public in and for said State, personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
Assignment and Intercreditor Agreement
LA1 :10O4255.2
N- 1 Mariposa Apartments
[TRUSTEE'S ACKNOWLEDGEMENT]
STATE OF )
COUNTY OF )
1
On ,200- before me, a Notary
Public in and for said State, personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) idare subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
Assignment and Intercreditor Agreement
LA1 : 1004255.2
N-2 Mariposa Apartments
[FANNIE MAE’S ACKNOWLEDGEMENT]
STATE OF 1 1 COUNTY OF )
On ,200- before me, a Notary
Public in and for said State, personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
Assignment and Intercreditor Agreement
LA1 : 1OO4255.2
N-3 Mariposa Apartments
[BORROWER’ S ACKNOWLEDGEMENT]
STATE OF 1 1 COUNTY OF )
On ,200-before me, a Notary
Public in and for said State, personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
Assignment and Intercreditor Agreement
LA1:1004255.2
N-4 Mariposa Apartments
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement1') is entered into as of this
1 st day of , 200 , by and among (i) the CITY OF CARLSBAD (as the "Issuer"),
(ii) FANNIE MAE, a corporation duly organized and existing under the Federal National
Mortgage Association Charter Act, 12 U.S.C. $1716, I=t seq, its successors, transferees and
assigns ("Fannie Mae"); (iii) the CITY OF CARLSBAD (as the "Subordinate Lender"); (iv)
CIC CALAVERA, L.P., a California limited partnership (the "Borrower")[, and (v)
(the "Trusteel').]
Recitals
A. The Issuer has previously issued its tax-exempt revenue bonds entitled ''City of
Carlsbad Multifamily Housing Revenue Refunding Bonds (Mariposa Apartments Project) 2003
Series A" in the aggregate principal amount of $5,185,000 and has loaned the proceeds thereof to
the Borrower (the "First Mortgage Loan"). The First Mortgage Loan is secured by a Multifamily
Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of June 1,
2003 by Borrower for the benefit of Issuer and recorded on June -, 2003 as Instrument No.
among the Official Records of San Diego County, California (the "Land Records"), as
amended and restated pursuant to that certain Amended and Restated Multifamily Deed of Trust,
Assignment of Rents, Security agreement and Fixture Filing dated as of even date herewith by
Borrower for the benefit of Issuer and Fannie Mae and recorded as Instrument No. among
the Land Records (collectively, the "First Mortgage") on a multifamily housing project located in
the City of Carlsbad, San Diego County, California (the "Property"). The Property is more fully
described in Whit A attached hereto. The Borrower's obligation to repay the First Mortgage
Loan is evidenced by a Multifamily Note dated as of even date herewith (the "First Mortgage
..
20 . Note"), and is due in full on -3
B. Fannie Mae is providing substitute credit enhancement and liquidity support for
the Bonds by issuing that certain Credit Enhancement Instrument [(Direct-Pay)], dated as of even
date herewith (such instrument, as the same may be amended, supplemented or otherwise
modified, amended and restated, is herein the "Credit Enhancement"). The Borrower's obligation
to repay Fannie Mae amounts disbursed under the Credit Enhancement (the "Reimbursement
Obligations") is evidenced by that certain Reimbursement Agreement, dated as of even date
herewith, between Fannie Mae and Borrower (such agreement, as the same may be amended,
supplemented or otherwise modified, amended and restated, is herein the "Reimbursement
Agreement") and the Reimbursement Obligations are also secured by the First Mortgage.
C. The Subordinate Lender has previously made a loan to Borrower in the original
principal amount of $1,060,000 (the "Subordinate Loan") which is secured by a mortgage lien
against the Property.
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A #I 199204 vl
D. Fannie Mae has .agreed to issue the Credit Enhancement provided that the
Subordinate Lender agree to subordinate the Subordinate Loan to the First Mortgage Loan and
the Reimbursement Obligations, and that the Subordinate Lender enter into this Agreement.
E. Pursuant to the terms of that certain Assignment and Intercreditor Agreement,
dated as of even date herewith, by and among Issuer, Fannie Mae, Borrower, and Trustee, the
Issuer has transferred and assigned to Fannie Mae, certain rights and benefits relating to the First
Mortgage Loan and the Reimbursement Obligations.
NOW, THEREFORE, in order to induce Fannie Mae to issue the Credit Enhancement,
and in consideration thereof, the Issuer, Fannie Mae, the Trustee, Subordinate Lender and the
Borrower agree as follows:
1. Definitions.
In addition to the terms defined in the Recitals to this Agreement, for purposes of this
Agreement the following terms have the respective meanings set forth below:
"Affiliate" means, when used with respect to a Person, any corporation,
partnership, joint venture, limited liability company, limited liability partnership, trust or
individual controlled by, under common control with, or which controls such Person (the
term "control" for these purposes shall mean the ability, whether by the ownership of
shares or other equity interests, by contract or otherwise, to elect a majority of the
directors of a corporation, to make management decisions on behalf of, or independently
to select the managing partner of, a partnership, or otherwise to have the power
independently to remove and then select a majority of those individuals exercising
managerial authority over an entity, and control shall be conclusively presumed in the
case of the ownership of 50% or more of the equity interests).
"Borrower" means the Person named as such in the first paragraph of this
Agreement and any other Person (other than the Senior Lender) who acquires title to the
Property after the date of this Agreement.
"Business Day" means any day other than Saturday, Sunday or a day on which the
Senior Lender is not open for business.
"Default Notice" means: (a) a copy of the written notice from the Senior Lender to
the Borrower stating that a First Mortgage Loan Default has occurred under the First
Mortgage Loan or Reimbursement Agreement; or (b) a copy of the written notice from
the Subordinate Lender to the Borrower stating that a Subordinate Loan Default has
occurred under the Subordinate Loan. Each Default Notice shall specify the default upon
which such Default Notice is based.
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MD-DOCS-A # 1 I99204 v 1
Form 4503 10/98 (Page 2)
"First Mortgage Loan Default" means the occurrence of an "Event of Default" as
that term is defined in the First Mortgage Loan Documents.
"First Mortgage Loan Documents'' means the First Mortgage Note, the First
Mortgage, the Reimbursement Agreement and all other documents evidencing, securing
or otherwise executed and delivered in connection with the First Mortgage Loan,
including the Credit Enhancement, and the issuance of the Bonds.
"Person'' means an individual, estate, trust, partnership, corporation, limited
liability company, limited liability partnership, governmental department or agency or any
other entity which has the legal capacity to own property.
"Senior Lender" means collectively, the Issuer and Fannie Mae.
"Subordinate Lender" means.the Person named as such in the first paragraph on
page 1 of this Agreement and any other Person who becomes the legal holder of the
Subordinate Note after the date of this Agreement.
\. "Subordinate Loan Default" means a default by the Borrower in performing or
observing any of the terms, covenants or conditions in the Subordinate Loan Documents
to be performed or observed by it, which continues beyond any applicable period
provided in the Subordinate Loan Documents for curing the default.
"Subordinate Loan Documents'' means the Subordinate Note, the Subordinate
Mortgage, the Subordinate Regulatory Agreement and all other documents evidencing,
securing or otherwise executed and delivered in connection with the Subordinate Loan.
"Subordinate Mortgage" means the City Deed of Trust and Security Agreement
dated encumbering the Property as security for the
Subordinate Loan, recorded as Instrument No. among the Land
Records.
"Subordinate Note'' means the City Note dated issued by the
Borrower to the Subordinate Lender, or order, to evidence the Subordinate Loan.
"Subordinate Regulatory Agreement" means the Regulatory Agreement and
Declaration of Restrictive Covenants dated encumbering the
Property as security for the Subordinate Loan, recorded as Instrument No.
among the Land Records.
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A # 1 199204 v 1
Form 4503 10/98
2. Permission to Place Mortgage Lien Against Property.
The Senior Lender agrees, notwithstanding the prohibition against inferior liens on the
Property contained in the First Mortgage Loan Documents and subject to the provisions of this
Agreement, to permit the Subordinate Lender to keep the Subordinate Mortgage of record so long
as the Subordinate Mortgage and all other recordable Subordinate Loan Documents are subordinate
in all respects to the lien of the First Mortgage, and that the Subordinate Mortgage shall continue to
secure the Borrowerls 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
the First Mortgage Loan Documents applicable to unpermitted liens on the Property shall apply.
3. Borrower's and Subordinate Lender's Representations and Warranties.
The Borrower and the Subordinate Lender each makes the following representations and
warranties to the Senior Lender:
(a) Subordinate Note. The Subordinate Note contains the following
provision:
The indebtedness evidenced by this Note shall be subordinate in
right of payment to the prior payment in full of the indebtedness evidenced by a
Multifamily Note dated on or about , 20- in the original
principal amount of $5,185,000 issued by CIC Calavera, L.P., a California limited
partnership, and payable to City of Carlsbad ("Issuer"), as assigned and endorsed to
the order of Fannie Mae and , as their interests may appear, to the
extent and in the manner provided in that certain Subordination Agreement dated
on or about , 20- between the payee of this Note, Issuer,
Fannie Mae, Borrower and (the "Subordination
Agreement"). The Deed of Trust securing this Note shall be subject and
subordinate in all respects to the liens, terms, covenants and conditions of the
Multifamily Deed of Trust securing the Multifamily Note as more fully set forth
in the Subordination Agreement. The rights and remedies of the payee and each
subsequent holder of this Note under the Deed of Trust securing this Note are
subject to the restrictions and limitation set forth in the Subordination Agreement.
Each subsequent holder of this Note shall be deemed, by virtue of such holder's
acquisition of the Note, to have agreed to perform and observe all of the terms,
covenants and conditions to be performed or observed by the Subordinate Lender
under the Subordination Agreement.
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A # 1 199204 v 1
Form 4503 10/98 (Page 4)
(b) Relationship of Borrower to Subordinate Lender and Senior Lender.
The Subordinate Lender is not an Affiliate of the Borrower and is not in possession of any
facts which would lead it to believe that the Senior Lender is an Affiliate of the Borrower.
(c) Term. The term of the Subordinate Note does not end before the term of
the First Mortgage Note.
(d) Subordinate Loan Documents. The executed Subordinate Loan
Documents are substantially in the same forms as those submitted to, and approved by,
Fannie Mae prior to the date of this Agreement. Borrower has delivered to Senior Lender an
executed copy of each of the 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,
Fannie Mae prior to the date of this Agreement. Upon execution and delivery of the Senior
Loan Documents, Borrower shall deliver to Subordinate Lender an executed copy of each of
the Senior Loan Documents, certified to be true, correct and complete.
4. Terms of Subordination.
(a) Agreement to Subordinate. The Senior Lender and the Subordinate
Lender agree that: (i) the indebtedness evidenced by the Subordinate Loan Documents is
and shall be subordinated in right of payment, to the extent and in the manner provided in
this Agreement to the prior payment in full of the indebtedness evidenced by the First
Mortgage Loan Documents, and (ii) the Subordinate Mortgage and the other Subordinate
Loan Documents are and shall be subject and subordinate in all respects to the liens, terms,
covenants and conditions of the First Mortgage and the other First Mortgage Loan
Documents and to all advances heretofore made or which may hereafter be made pursuant
to the First Mortgage and the other First Mortgage Loan Documents (including but not
limited to, all sums advanced for the purposes of (1) protecting or further securing the lien
of the First Mortgage, curing defaults by the Borrower under the First Mortgage Loan
Documents or for any other purpose expressly permitted by the First Mortgage, or (2)
constructing, renovating, repairing, fiunishing, fixturing or equipping the Property).
(b) Subordination of Subrogation Rights. The Subordinate Lender agrees
that if, by reason of its payment of real estate taxes or other monetary obligations of the
Borrower, or by reason of its exercise of any other right or remedy under the Subordinate
Loan Documents, it acquires by right of subrogation or otherwise a lien on the Property
which (but for this subsection) would be senior to the lien of the First Mortgage, then, in
that event, such lien shall be subject and subordinate to the lien of the First Mortgage.
fc) Payments Before First Mortgage Loan Default. Until the Subordinate
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A # 1 199204 v 1
Form 4503 10/98 (Page 5)
Lender receives a Default Notice of a First Mortgage Loan Default from the Senior Lender,
the Subordinate Lender shall be entitled to retain for its own account all payments made
under or pursuant to the Subordinate Loan Documents.
(d) Payments After First Mortgage Loan Default. The Borrower agrees that,
after it receives notice (or otherwise acquires knowledge) of a First Mortgage Loan Default,
it will not make any payments under or pursuant to the Subordinate Loan Documents
(including but not limited to principal, interest, additional interest, late payment charges,
default interest, attorney's fees, or any other sums secured by the Subordinate Mortgage)
without the Senior Lender's prior written consent. The Subordinate Lender agrees that, after
it receives a Default Notice from the Senior Lender with written instructions directing the
Subordinate Lender not to accept payments from the Borrower on account of the
Subordinate Loan, it will not accept any payments under or pursuant to the Subordinate
Loan Documents (including but not limited to principal, interest, additional interest, late
payment charges, default interest, attorney's fees, or any other sums secured by the
Subordinate Mortgage) without the Senior Lender's prior written consent. If the
Subordinate Lender receives written notice from the Senior Lender that the First Mortgage
Loan Default which gave rise to the Subordinate Lender's obligation not to accept payments
has been cured, waived, or otherwise suspended by the Senior Lender, the restrictions on
payment to the Subordinate Lender in this Section 4 shall terminate, and the Senior Lender
shall have no right to any subsequent payments made to the Subordinate Lender by the
Borrower prior to the Subordinate Lender's receipt of a new Default Notice from the Senior
Lender in accordance with the provisions of this Section 4(d).
(e) Remitting Subordinate Loan Payments to Senior Lender. If, after the
Subordinate Lender receives a Default Notice from the Senior Lender in accordance with
subsection (d) above, the Subordinate Lender receives any payments under the Subordinate
Loan Documents, the Subordinate Lender agrees that such payment or other distribution
will be received and held in trust for the Senior Lender and unless the Senior Lender
otherwise notifies the Subordinate Lender in writing, will be promptly remitted, in kind to
the Senior Lender, properly endorsed to the Senior Lender, to be applied to the principal of,
interest on and other amounts due under the First Mortgage Loan Documents in accordance
with the provisions of the First Mortgage Loan Documents. By executing this Agreement,
the Borrower specifically authorizes the Subordinate Lender to endorse and remit any such
payments to the Senior Lender, and specifically waives any and all rights to have such
payments returned to the Borrower or credited against the Subordinate Loan. Borrower and
Senior Lender acknowledge and agree that payments received by the Subordinate Lender,
and remitted to the Senior Lender under this Section 4, shall not be applied or otherwise
credited against the Subordinate Loan, nor shall the tender of such payment to the Senior
Lender waive any Subordinate Loan Default which may arise from the inability of the
Subordinate Lender to retain such payment or apply such payment to the Subordinate Loan.
(f) Agreement Not to Commence Bankruptcy Proceeding. The Subordinate
Fannie Mae Subordination Agreement --
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MD-DOCS-A #I 199204 VI
Form 4503 10/98 (Page 6)
Lender agrees that during the term of this Agreement it will not commence, or join with any
other creditor in commencing any bankruptcy reorganization, arrangement, insolvency or
liquidation proceedings with respect to the Borrower, without the Senior Lender's prior
written consent.
5. Default Under Subordinate Loan Documents.
(a) Notice of Default and Cure Rights. The Subordinate Lender shall deliver
to the Senior Lender a Default Notice within five Business Days in each case where the
Subordinate Lender has given a Default Notice to the Borrower. Failure of the Subordinate
Lender to send a Default Notice to the Senior Lender shall not prevent the exercise of the
Subordinate Lender's rights and remedies under the Subordinate Loan Documents, subject
to the provisions of this Agreement. The Senior Lender shall have the right, but not the
obligation, to cure any Subordinate Loan Default within 60 days following the date of such
notice; provided, however that the Subordinate Lender shall be entitled, during such 60-day
period, to continue to pursue its rights and remedies under the Subordinate Loan
Documents. All amounts paid by the Senior Lender in accordance with the First Mortgage
Loan Documents to cure a Subordinate Loan Default shall be deemed to have been
advanced by the Senior Lender pursuant to, and shall be secured by the lien of, the First
Mortgage.
(b) Subordinate Lender's Exercise of Remedies After Notice to Senior
Lender. 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 commence
foreclosure proceedings with respect to the Property under the Subordinate Loan
Documents or exercise any other rights or remedies it may have under the Subordinate Loan
Documents, including, but not limited to accelerating the Subordinate Loan, collecting
rents, appointing (or seeking the appointment of) a receiver or exercising any other rights or
remedies thereunder unless and until it has given the Senior Lender at least 60 days' prior
written notice; during such 60 day period, however, the Subordinate Lender shall be entitled
to exercise and enforce all other rights and remedies available to the Subordinate Lender
under the Subordinate Loan Documents and/or under applicable laws, including without
limitation, rights to enforce covenants and agreements of the Borrower relating to income,
rent, or affordability restrictions contained in the Subordinate Regulatory Agreement.
(c) Cross Default. The Borrower and the Subordinate Lender agree that a
Subordinate Loan Default shall constitute a First Mortgage Loan Default under the First
Mortgage Loan Documents and the Senior Lender shall have the right to exercise all rights
or remedies under the First Mortgage Loan Documents in the same manner as in the case of
any other First Mortgage Loan Default. If the Subordinate Lender notifies the Senior
Lender in writing that any Subordinate Loan Default of which the Senior Lender has
received a Default Notice has been cured or waived, as determined by the Subordinate
Lender in its sole discretion, then provided that Senior Lender has not conducted a sale of
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A # 1 199204 v I
Form 4503 10/98 (Page 7)
the Property pursuant to its rights under the First Mortgage Loan Documents, any First
Mortgage Loan Default under the First Mortgage Loan Documents arising solely from such
Subordinate Loan Default shall be deemed cured, and the First Mortgage Loan shall be
reinstated, provided, however, that the Senior Lender shall not be required to return or
otherwise credit for the benefit of the Borrower any default rate interest or other default
related charges or payments received by the'Senior Lender during such First Mortgage Loan
Default.
6. Default Under First Mortgage Loan Documents.
(a) Notice of Default and Cure Rights. The Senior Lender shall deliver to the
Subordinate Lender a Default Notice within five Business Days in each case where the
Senior Lender has given a Default Notice to the Borrower. Failure of the Senior Lender to
send a Default Notice to the Subordinate Lender shall not prevent the exercise of the Senior
Lender's rights and remedies under the Senior Loan Documents, subject to the provisions of
this Agreement. The Subordinate Lender shall have the right, but not the obligation, to cure
any such First Mortgage Loan Default within 60 days following the date of such notice;
provided, however, that the Senior Lender shall be entitled during such 60-day period to
continue to pursue its remedies under the First Mortgage Loan Documents. Subordinate
Lender may have up to 90 days from the date of the Default Notice to cure a non-monetary
default if during such 90-day period Subordinate Lender keeps current all payments
required by the First Mortgage Loan Documents. In the event that such a non-monetary
default creates an unacceptable level of risk relative to the Property, or Senior Lender's
secured position relative to the Property, as determined by Senior Lender in its sole
discretion, then Senior Lender may exercise during such 90-day period all available rights
and remedies to protect and preserve the Property and the rents, 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 that, notwithstanding any
contrary provision contained in the Subordinate Loan Documents, a First Mortgage Loan
Default shall not constitute a default under the Subordinate Loan Documents if no other
default occurred under the Subordinate Loan Documents until either (i) the Senior Lender
has accelerated the maturity of the First Mortgage Loan, or (ii) the Senior Lender has taken
affirmative action to exercise its rights under the First Mortgage to collect rent, to appoint
(or seek the appointment of) a receiver or to foreclose on (or to exercise a power of sale
contained in) the First Mortgage. At any time after a First Mortgage Loan Default is
determined to constitute a default under the Subordinate Loan Documents, the Subordinate
Lender shall be permitted to pursue its remedies for default under the Subordinate Loan
Documents, subject to the restrictions and limitations of this Agreement. If at any time the
Borrower cures any First Mortgage Loan Default to the satisfaction of the Senior Lender, as
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A # 1 199204 v 1
Form 4503 10198 (Page 8)
evidenced by written notice from the Senior lender to the Subordinate Lender, any default
under the Subordinate Loan Documents arising from such First Mortgage Loan Default
shall be deemed cured and the Subordinate Loan shall be retroactively reinstated as if such
First Mortgage Loan Default had never occurred.
7. Conflict.
The Borrower, the Senior Lender and the Subordinate Lender each agrees that, in the event
of any conflict or inconsistency between the terms of the First Mortgage Loan Documents, the
Subordinate Loan Documents and the terms of this Agreement, the terms of this Agreement shall
govern and control solely as to the following: (a) the relative priority of the security interests of the
Senior Lender and the Subordinate Lender in the Property; (b) the timing of the exercise of
remedies by the Senior Lender and the Subordinate Lender under the First Mortgage and the
Subordinate Mortgage, respectively; and (c) solely as between the Senior Lender and the
Subordinate Lender, the notice requirements, cure rights, and the other rights and obligations which
the Senior Lender and the Subordinate Lender have agreed to as expressly provided in this
Agreement. Borrower acknowledges that the terms and provisions of this Agreement shall not, and
shall not be deemed to: extend Borrower's time to cure any First Mortgage Loan Default or
Subordinate Loan Default, as the case may be; give the Borrower the right to notice of any First
Mortgage Loan Default or Subordinate Loan Default, as the case may be other than that, if any,
provided, respectively under the First Mortgage Loan Documents or the Subordinate Loan
Documents; or create any other right or benefit for Borrower as against Senior Lender or
Subordinate Lender.
8. Rights and Obligations of the Subordinate Lender Under the Subordinate
Loan Documents and of the Senior Lender under the First Mortgage Loan Documents.
Subject to each of the other terms of this Agreement, all of the following provisions shall
supersede any provisions of the Subordinate Loan Documents covering the same subject matter:
(a) Protection of Security Interest. The Subordinate Lender shall not, without
the prior written consent of the Senior Lender in each instance, take any action which has
the effect of increasing the indebtedness outstanding under, or secured by, the Subordinate
Loan Documents, except that the Subordinate Lender shall have the right to advance funds
to cure First Mortgage Loan Defaults pursuant to Section 6(a) above and advance funds
pursuant to the Subordinate Mortgage for the purpose of paying real estate taxes and
insurance premiums, making necessary repairs to the Property and curing other defaults by
the Borrower under the Subordinate Loan Documents.
(b) Condemnation or Casualty. In the event of: a taking or threatened taking
by condemnation or other exercise of eminent domain of all or a portion of the Property
(collectively, a "Taking"); or the occurrence of a fire or other casualty resulting in damage to
all or a portion of the Property (collectively, a Tasualty"), at any time or times when the
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A #I 199204 vl
Form 4503 10/98 (Page 9)
First Mortgage remains a lien on the Property the following provisions shall apply:
(1) The Subordinate Lender hereby agrees that its rights (under the
Subordinate Loan Documents or otherwise) to participate in any proceeding or
action relating to a Taking and/or a Casualty, or to participate or join in any
settlement of, or to adjust, any claims resulting from a Taking or a Casualty shall be
and remain subordinate in all respects to the Senior Lender's rights under the First
Mortgage Loan Documents with respect thereto, and the Subordinate Lender shall
be bound by any settlement or adjustment of a claim resulting from a Taking or a
Casualty made by the Senior Lender; provided, however, this subsection and/or
anything contained in this Agreement shall not limit the rights of the Subordinate
Lender to file any pleadings, documents, claims or notices with the appropriate court
with jurisdiction over the proposed Taking and/or Casualty; and
(2) all proceeds received or to be received on account of a Taking or a
Casualty, or both, shall be applied (either to payment of the costs and expenses of
repair and restoration or to payment of the First Mortgage Loan) in the manner
determined by the Senior Lender in its sole discretion; provided, however, that if the
Senior Lender elects to apply such proceeds to payment of the principal of, interest
on and other amounts payable under the First Mortgage Loan, any proceeds
remaining after the satisfaction in full of the principal of, interest on and other
amounts payable under the First Mortgage Loan shall be paid to, and may be applied
by, the Subordinate Lender in accordance with the applicable provisions of the
Subordinate Loan Documents, provided however, the Senior Lender agrees to
consult with the Subordinate Lender in determining the application of Casualty
proceeds, provided further however that in the event of any disagreement between
the Senior Lender and the Subordinate Lender over the application of Casualty
proceeds, the decision of the Senior Lender, in its sole discretion, shall prevail.
(c) No Modification of Subordinate Loan Documents. The Borrower and the
Subordinate Lender each agrees that, until the principal of, interest on and all other amounts
payable under the First Mortgage Loan Documents have been paid in full, it will not,
without the prior written consent of the Senior Lender in each instance, increase the amount
of the Subordinate Loan, increase the required payments due under the Subordinate Loan,
decrease the term of the Subordinate Loan, increase the interest rate on the Subordinate
Loan, or otherwise amend the Subordinate Loan terms in a manner that creates an adverse
effect upon the Senior Lender under the First Mortgage Loan Documents. Any unauthorized
amendment of the Subordinate Loan Documents or assignment of the Subordinate Lender's
interest in the Subordinate Loan without the Senior Lender's consent shall be void ab initio
and of no effect whatsoever.
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A # 1 199204 VI
Form 4503 10/98 (Page 10)
9. 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 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 that all the terms and
covenants of this Agreement shall inure to the benefit of any holder of any such refinanced debt;
and that all references to the First Mortgage Loan, the First Mortgage Note, the First Mortgage, the
First Mortgage Loan Documents and Senior Lender shall mean, respectively, the refinance loan, the
refinance note, the mortgage securing the refinance note, all documents evidencing securing or
otherwise pertaining to the refinance note and the holder of the refinance note.
10. Default by the Subordinate Lender or Senior Lender.
If the Subordinate Lender or Senior Lender defaults in performing or observing any of the
terms, covenants or conditions to be performed or observed by it under this Agreement, the other,
non-defaulting lender shall have the right to all available legal and equitable relief.
11. Notices.
Each notice, request, demand, consent, approval or other communication (hereinafter in this
Section referred to collectively as "notices" and referred to singly as a "notice") which the Senior
Lender or the Subordinate Lender is required or permitted to give to the other party pursuant to this
Agreement shall be in writing and shall be deemed to have been duly and sufficiently given if: (a)
personally delivered with proof of delivery thereof (any notice so delivered shall be deemed to have
been received at the time so delivered); or (b) sent by Federal Express (or other similar national
overnight courier) designating early morning delivery (any notice so delivered shall be deemed to
have been received on the next Business Day following receipt by the courier); or (c) sent by United
States registered or certified mail, return receipt requested, postage prepaid, at a post office
regularly maintained by the United States Postal Service (any notice so sent shall be deemed to
have been received two days after mailing in the United States), addressed to the respective parties
as follows:
SENIOR LENDER:
City of Carlsbad
1635 Faraday Avenue
Carlsbad, California 92008
Attention: Assistant Finance Director
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A #1199204 vl
Form 4503 10198 (Page 11)
and
Fannie Mae
Attention: Multifamily Operations - Asset Management
Drawer AM
3900 Wisconsin Avenue, N.W.
Washington, DC 200 16
Attention: Director, Multifamily Asset Management
SUBORDINATE LENDER:
City of Carlsbad Housing and Redevelopment Agency
2965 Roosevelt Street, Suite B
Carlsbad, California 92008
Attention: Craig Ruiz
Either party may, by notice given pursuant to this Section, change the person or persons and/or
address or addresses, or designate an additional person or persons or an additional address or
addresses for its notices, but notice of a change of address shall only be effective upon receipt.
13. General.
(a) Assignment/Successor. 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 consent to the
Subordinate Loan Documents does not constitute the Senior Lender as a joint venturer or
partner of the Subordinate Lender. Neither party hereto shall hold itself out as a partner,
agent or Affiliate of the other party hereto.
(c) Senior Lender's and Subordinate Lender's Consent. Wherever the
Senior Lender's consent or approval is required by any provision of this Agreement, such
consent or approval may be granted or denied by the Senior Lender in its sole and absolute
discretion, unless otherwise expressly provided in this Agreement. Wherever the
Subordinate Lender's consent or approval is required by any provision of this Agreement,
such consent or approval may be granted or denied by the Subordinate Lender in its sole and
absolute discretion, unless otherwise expressly provided in this Agreement.
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A # 1 199204 v 1
Form 4503 10/98 (Page 12)
(d) Further Assurances. The Subordinate Lender, the Senior Lender and the
Borrower each agree, at the Borrower's expense, to execute and deliver all additional
instruments and/or documents reasonably required by any other party to this Agreement in
order to evidence that the Subordinate Mortgage is subordinate to the lien, covenants and
conditions of the First Mortgage, or to further evidence the intent of this Agreement.
(e) Amendment. This Agreement shall not be amended except by written
instrument signed by all parties hereto.
(f) Governing Law. This Agreement shall be governed by the laws of the
State in which the Property is located.
(g) Severable Provisions. If any provision of this Agreement shall be invalid
or unenforceable to any extent, then the other provisions of this Agreement, shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.
(h) Term. The term of this Agreement shall commence on the date hereof and
shall continue until the earliest to occur of the following events: (i) the payment of all of the
principal of, interest on and other amounts payable under the First Mortgage Loan
Documents; (ii) the payment of all of the principal of, interest on and other amounts payable
under the Subordinate Loan Documents [(provided the "Term", as defined in the
Regulatory Agreement has expired)], other than by reason of payments which the
Subordinate Lender is obligated to remit to the Senior Lender pursuant to Section 4 hereoc
(iii) the acquisition by the Senior Lender of title to the Property pursuant to a foreclosure or
a deed in lieu of foreclosure of, or the exercise of a power of sale contained in, the First
Mortgage; or (iv) the acquisition by the Subordinate Lender of title to the Property pursuant
to a foreclosure or a deed in lieu of foreclosure of, or the exercise of a power of sale
contained in, the Subordinate Mortgage, but only if such acquisition of title does not violate
any of the terms of this Agreement.
(i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original for all purposes; provided,
however, that all such counterparts shall together constitute one and the same instrument.
(j) Rights of Fannie Mae and Issuer. Notwithstanding any provision of this
Agreement to the contrary, the parties acknowledge and agree that, as between Fannie Mae
and the Issuer, the relative rights of Senior Lender under this Agreement shall be governed
by the terms of the Assignment and Intercreditor Agreement dated as of the date hereof, by
and among the Issuer, Fannie Mae and Trustee, a copy of which has been reviewed and
acknowledged by the Borrower. The foregoing shall in no event relieve the Borrower of, or
modify, the obligations of Borrower to the Senior Lender under this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A # 1 199204 vl
Form 4503 10/98 (Page 13)
Fannie Mae Subordination Agreement --
Aflordable Housing
MD-DOCS-A #1199204 vl
Form 4503 (Page 14)
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first written above.
SENIOR LENDER:
CITY OF CARLSBAD
By:
Name:
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A # 1 199204 v I
FANNIE MAE
By:
Name:
Title:
SUBORDINATE LENDER:
CITY OF CARLSBAD HOUSING AND
REDEVELOPMENT AGENCY
By:
Name:
Title:
Form 4503 10/98 (Page 15)
BORROWER:
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A #1199204 VI
CIC CALAVERA, L.P.,
a California limited partnership
By: Pacific Southwest Community Development
Corporation, a California nonprofit public
benefit corporation
Its: Managing General Partner
By:
Michael T. Walsh,
Executive DirectodPresident
By:
Its: Co-General Partner
CIC Calavera Hills 11, LLC,
a California limited liability company
By:
James J. Schmid
Manager
TRUSTEE:
By:
Name:
Title:
Form 4503 10/98 (Page 16)
ACKNOWLEDGMENT
[California]
State of )
) ss:
county of )
before me, On 3-9 (name, title of officer, eg, “Jane Doe, Notary Public)
Personally appeared
(name@) of signer(s))
( )
( )
personally known to me -0R-
proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacityhes, and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument
Witness my hand and official seal.
(Signature of Notary)
Capacity claimed by signer: (This section is optional)
( ) Individual
( ) Corporate Officer(s):
( ) Partner(s):
( ) Attorney-in-fact
( ) Trustee(s)
( ) Guardian/Conservator
( ) Other:
( )General ( )Limited
Signer is representing:
(Name of person(s) or entity(ies)
Attention Notary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment
of this certificate to an unauthorized document.
THIS CERTIFICATE MUST BE
ATTACHED TO THE
DOCUMENT DESCRIBED AT
RIGHT:
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A # 1199204 VI
Title of Type of Document
Number of Pages Date of Document
Signer(s) Other than Named Above
Form 4503 10/98 (Page 17)
ACKNOWLEDGMENT
[California]
State of )
County of )
) ss:
On 9-5 before me,
(name, title of ofticer, e.g., “Jane Doe, Notary Public)
Personally appeared
(name(s) of signer(s))
( )
( )
personally known to me -0R-
proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) idare subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacityhes, and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument
Witness my hand and official seal.
(Signature of Notary)
Capacity claimed by signer: (This section is optional)
( ) Individual
( ) Corporate Officer(s):
( ) Partner(s):
( ) General
( ) Attorney-in-fact
( ) Trustee(s)
( ) Guardian/Conservator
( ) Other:
( ) Limited
Signer is representing:
(Name of person(s) or entity(ies)
Attention Notary: Although the information requested below is OPTIONAL, it could prevent fi-audulent attachment
of this certificate to an unauthorized document.
THIS CERTIFICATE MUST BE
ATTACHED TO THE
DOCUMENT DESCRIBED AT Number of Pages Date of Document
RIGHT:
Title of Type of Document
Signer(s) Other than Named Above
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A # 1 199204 v 1
Form 4503 10/98 (Page 18)
ACKNOWLEDGMENT
[California]
State of )
) ss:
county of )
before me, On 7-> (name, title of officer, e.g., “Jane Doe, Notary Public)
Personally appeared
(name(s) of signer@))
before me, On 7-> (name, title of officer, e.g., “Jane Doe, Notary Public)
Personally appeared
(name(s) of signer@))
( )
( )
personally known to me -0R-
proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) idare subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in hishedtheir authorized capacity/ies, and that by hishedtheir signature(s) on the
instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument
Witness my hand and official seal.
(Signature of Notary)
Capacity claimed by signer: (This section is optional)
( ) Individual
( ) Corporate Officer(s):
( ) Partner(s):
( ) Attorney-in-fact
( ) Trustee(s)
( ) GuardianKonservator
( )General ( )Limited
( ) Other:
Signer is representing:
(Name of person(s) or entity(ies)
Attention Notary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment
of this certificate to an unauthorized document.
THIS CERTIFICATE MUST BE
ATTACHEDTOTHE
DOCUMENT DESCRIBED AT
RIGHT:
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A # 1199204 VI
Title of Type of Document
Number of Pages Date of Document
Signer(s) Other than Named Above
Form 4503 I0198 (Page 19)
ACKNOWLEDGMENT
[California]
State of )
County of )
) ss:
On 9-7 before me,
(name, title of officer, eg, “Jane Doe, Notary Public)
Personally appeared
(name(s) of signer@))
( )
( )
personally known to me -0R-
proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) idare subscribed to the within instrument and acknowledged to me that
hehhehhey executed the same in his/her/their authorized capacity/ies, and that by hishedtheir signature(s) on the
instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument
Witness my hand and oficial seal.
(Signature of Notary)
Capacity claimed by signer:
( ) Individual
( ) Corporate Officer(s):
( ) Partner(s):
( ) Attorney-in-fact
( ) Trustee(s)
( ) Guardian/Conservator
(This section is optional)
( )General ( )Limited
( ) Other:
Signer is representing:
(Name of person(s) or entity(ies)
Attention Notary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment
of this certificate to an unauthorized document.
THIS CERTIFICATE MUST BE
ATTACHEDTOTHE
DOCUMENT DESCRIBED AT
RIGHT:
Title of Type of Document
Number of Pages Date of Document
Signer(s) Other than Named Above
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A #1199204 VI
Form 4503 10/98 (Page 20)
[California]
ACKNOWLEDGMENT
State of )
County of )
) ss:
On ¶-> before me,
(name, title of officer, e.g., “Jane Doe, Notary Public)
Personally appeared
(name(s) of signer(s))
( )
( )
personally known to me -0R-
proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) islare subscribed to the within instrument and acknowledged to me that
helshelthey executed the same in hislherltheir authorized capacitylies, and that by hislherltheir signature(s) on the
instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument
Witness my hand and official seal.
(Signature of Notary)
Capacity claimed by signer: (This section is optional)
( ) Individual
( ) Corporate Officer(s):
( ) Partner(s):
( ) Attorney-in-fact
( ) Trustee(s)
( ) GuardiadConservator
( )General ( )Limited
( ) Other:
Signer is representing:
(Name of person(s) or entity(ies)
Attention Notary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment
of this certificate to an unauthorized document.
THIS CERTIFICATE MUST BE
ATTACHEDTOTHE
DOCUMENT DESCRIBED AT
RIGHT:
Title of Type of Document
Number of Pages Date of Document
Signer(s) Other than Named Above
MD-DOCS-A #I 199204 VI
ICalifornia]
ACKNOWLEDGMENT
State of )
) ss:
county of )
On >-? before me,
(name, title of officer, e.g., “Jane Doe, Notary Public)
Personally appeared
(name(s) of signer(s))
( )
( )
personally known to me -0R-
proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) idare subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacityhes, and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument
Witness my hand and official seal.
(Signature ofNotary)
Capacity claimed by signer: (This section is optional)
( ) Individual
( ) Corporate Officer(s):
( ) Partner(s):
( ) Attorney-in-fact
( ) Trustee(s)
( ) Guardian/Conservator
( ) Other:
( ) General ( )Limited
Signer is representing:
(Name of person(s) or entity(ies)
Attention Notary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment
of this certificate to an unauthorized document.
THIS CERTIFICATE MUST BE
ATTACHED TO THE
DOCUMENT DESCRIBED AT
RIGHT:
Title of Type of Document
Number of Pages Date of Document
Signer(s) Other than Named Above
Fannie Mae Subordination Agreement --
Affordable Housing
MD-DOCS-A # 1 199204 VI
Form 4503 10198
DESCRIPTION OF THE LAND
BEING A SUBDIVISION OF A PORTION OF LOT “D” AND “E” OF THE RANCHO AGUA
HEDIONDA, IN THE CITY OF CARLSBAD, COUNTY OF DAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO THE PARTITION MAP THEREOF NO. 823 FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY ON NOVEMBER 16,1896.
Fannie Mae Subordination Agreement
MD-DOCS-A #I 199204 VI
Form 4503 10/98 (Page A-I)