HomeMy WebLinkAbout1994-09-06; Housing & Redevelopment Commission; 258 Exhibit 8; Family Housing Revenue Refunding BondsEXHIBIT 8
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i !’ ! I Draft Date: July 25, 1994
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INTERCREDITOR AGREEMENT
among
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION,
As Trustee Under An Indenture
Dated As Of [DATE], 1994
and
CARL~BAD HOUSING AND REDEVELOPMENT COMMISSION
and
CONTINENTAL CASUALTY COMPANY
Dated As Of [DATE], 1994
Pertaining To
$15,030,000 CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION
Multifamily Housing Revenue Refunding Bonds, Series 1994-
(Seascape Apartments Project)
260471.01.04
1088145iJAB
7/25/94
SECITON HEADING PAGE
Parties .*.....*............*..................*..........................................................*..........*......**.. 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.
SECTION 2.
SECTIONS.
SECTIONS.
SECTION 5.
SECTION 6.
SECTIONS.
SECTION 8.
SECTION 9.
SECTION 10.
SECTION 11.
SECTION 12.
SECTION 13.
SECTIONED.
EXERCISE OFRIGHTS UNDER THE FINANCING DOCUMENTS .............. ...5
AMENDMENTOFDOCU~~S ............................................................ 7
ACCESSTORECORDSAND~THERINIWMATION ................................. 7
IN-I-ERCREDITORAGREEMENTFORBENEFITOFPARTIES HERETO ............................................................................................ 7
SEVERABILITY .................................................................................. 7
NOTICES .......................................................................................... 7
SUCCESSORSANDASSIGNS ............................................................... 8
COUNTERPARTS ................................................................................ 9
GOW~INGLA~ ............................................................................. 9
N~I~'AIRMENTSOF~'I'~IERRIG~S .................................................. 9
S~-RETYBONDNOTTOBE~~~ED;RJWFDIES .................................. 9
SUBROGATION .................................................................................. 9
HEADINGS ...................................................................................... 10
TERMINATION ................................................................................ 10
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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This INTERCREDITOR AGREEMENT, dated as of [DATE], 1994 (herein, as amended and
supplemented, this “Intercreditor Agreement”) among the CARLSBAD HOUSING AND
REDEVELOPMENT COMMISSION, a public body corporate and politic organized and existing
under the laws and Constitution of the State of California (herein, together with any
successor to its rights, duties and obligations under the hereinafter described Law, referred
to as the “Commission”), FIRST TRUST OF CALIFORNIA, NATIONAL ASS~(XATION, a national
banking association organized and existing under the laws of the United States of America,
as trustee under the hereinafter defined Indenture (herein, together with any successor
Trustee under the Indenture, the “Trustee”), and CONTINENTAL CASUALTY COMPANY in its
capacity as issuer of its Surety Bond as hereinafter defined (herein, together with its
successors and assigns, referred to as the “Surety”);
RECITALS
[l] Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code,
as supplemented and amended (the “Law”), authorizes and empowers the Commission to
issue revenue bonds and to lend the proceeds therefrom to the owner of multifamily
residential rental property (as defined in the Law) for the purpose of financing such
property, and vests the Commission with powers necessary to enable it to accomplish such
purposes; and Article 11 of Chapter 3 of Part 1 of the Division 2 of Title 5 of the
California Government Code (the ‘Refunding Bond Act”) authorizes local agencies to incur
indebtedness for the purpose of refunding any revenue bonds of the local agency and
provides a complete and additional method for doing the things authorized thereby.
[2] Pursuant to the Law, the Commission previously issued its Multifamily Housing
Revenue Bonds, Series 1985B (Seascape Village Apartments Project) in the original
aggregate principal amount of $16,215,000 (the “Prior Bonds”) and used the proceeds thereof to fund a loan (the “Prior Loan”) to the Developer (as hereinafter defined), in the
manner and under the terms and conditions provided in that certain (a) Indenture of Trust
dated as of April 1, 1985 (the “Prior Indenture”) between the Commission and First Trust
of California, National Association, as successor trustee (the “Prior Trustee”) and (b) Loan
Agreement dated as of April 1, 1985 (the “Prior Loan Agreement”) by and between the
Commission and Lincoln Seascape, A California Limited Partnership (the “Developer”) to
assist in the financing of the costs of acquiring, constructing and equipping a certain
multifamily rental housing complex on a certain parcel of real estate (the “Land”) located in
Carlsbad, California (the “Project”), all as more fully described in the Prior Loan
Agreement.
[3] To evidence the obligation of the Developer to repay the Prior Loan under the Prior Loan Agreement, the Developer executed and delivered its Secured Note A and
Secured Note B both dated as of May 21, 1985 (collectively, the “Prior Note”) payable to
the order of the Commission which Prior Note was endorsed, assigned and delivered by the
Commission to the Prior Trustee.
[4] As security, inter alia, for payment of the principal of, premium, if any, and
interest on the Prior Note and for the payment and performance by the Developer of its
obligations under the Prior Loan Agreement and the Prior Reimbursement Agreement (as
hereinafter defined), the Developer executed and delivered for the benefit of the
Commission and the Surety, a Deed of Trust, Assignment of Rents and Security Agreement
dated as of April 1, 1985 (the “Prior First Deed of Trust”) from the Developer to First American Title Insurance Company, as trustee for the benefit of the Commission and the
Surety (the Prior First Deed of Trust, the Prior Note, the Prior Loan Agreement, the Prior
Assignment [as hereinafter defined] and all financing statements filed under the Uniform
Commercial Code with respect thereto are collectively referred to herein as the “Prior First
Deed of Trust Documents” and together with the Regulatory Agreement and Declaration of
Restrictive Covenants dated as of April 1, 1985 (the “Prior Regulatory Agreement”) by and
among the Commission, the Developer and the Prior Trustee are collectively referred to
herein as the “Prior Loan Documents”).
[SJ Pursuant to the Prior Indenture and an Assignment of Deed of Trust dated as of
April 1, 1985 (the “Prior Assignment”), the Commission assigned its interest in the Prior Loan Agreement (except the Commission’s right to receive certain administrative fees,
indemnification and expense payments), the Prior Note and all security therefor, to the Prior
Trustee.
[SJ In order to enhance the marketability of the Prior Bonds, the Surety issued its
Surety Bond No. 1667165 (said Surety Bond, together with all renewals, replacements,
amendments and reissuances thereof, hereinafter collectively referred to as the “Prior Surety
Bond”). In connection with the issuance of the Prior Surety Bond, the Developer and the
Surety entered into a Reimbursement Agreement dated as of April 1, 1985 (the “Prior
Reimbursement Agreement”) pursuant to which, inter alia, the Developer agreed to
reimburse the Surety for any payments made by the Surety under the Prior Surety Bond.
[7J The obligations of the Developer under the Prior Reimbursement Agreement
were also secured by a separate second lien of the Project created by that certain Second
Deed of Trust, Assignment of Rents and Security Agreement dated as of April 1, 1985 (the
“Prior Second Deed of Trust”) from the Developer to the Security Trustee for the benefit of
the Surety.
[S] The Commission has been advised that the Developer has defaulted on its
payment obligations under the Prior Note, the Prior Loan Agreement and the Prior
Reimbursement Agreement resulting in the occurrence of an Event of Default under each of the Prior Note, the Prior Loan Agreement, the Prior First Deed of Trust, the Prior Second
Deed of Trust and the Prior Reimbursement Agreement (collectively, the “Continuing
Defaults”).
[9] As a consequence of the Continuing Defaults the Surety (as the credit instrument
obligor under the Prior Indenture) and the Prior Trustee filed an action on December 19,
1990 in the Superior Court of the State of California for the County of San Diego (the
“Court”), Case No. N49743, entitled Continental Casualty Company, et al. v. Lincoln
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Seascape, A California Limited Partnership, et al. (the “‘Litigation”), seeking to foreclose the
Prior First Deed of Trust and the Prior Second Deed of Trust.
[lo] On October 7, 199 1, pursuant to a joint “Stipulation and Order Thereon,” the
Court ordered James R. Kent to be appointed as receiver for the Project.
[l l] On December 30, 1993, the Owner (as hereinafter defined) acquired the
Project after the foreclosure sale.
[12] Prior to the acquisition of the Project by Seascape Apartments, Inc., an Illinois
corporation (herein, together with its successors and assigns, the “Owner”), the Surety gave
notice to the Prior Trustee to call the Prior Bonds for redemption pursuant to its rights
under Section 601(c)(3) of the Prior Indenture.
[13] In order to pay a portion of the redemption price of the Prior Bonds the
Commission has agreed to issue its Multifamily Housing Revenue Refunding Bonds,
Series 1994- (S eascape Apartments Project) in the aggregate principal amount of
$15,030,000 (the “Bonds”). The Bonds have been issued under and are entitled to the
security of the Indenture of Trust dated as of [DATE], 1994 (as supplemented and amended,
the “Indenture”) between the Commission and the Trustee.
_L [14] To evidence the Owner’s obligation to make payments sufficient to pay the
principal of, premium, if any, and interest when due on the Bonds, the Owner will execute
and deliver the Loan Agreement dated as of [DATE], 1994 (as amended and supplemented, the “Loan Agreement”) to the Commission and the Trustee and its Secured Note in the
principal amount of $15,030,000 payable to the order of the Commission (as supplemented
and amended, the “Note”), which will contemporaneously be assigned, endorsed and
delivered, without recourse, by the Commission to the Trustee.
[15] Contemporaneously with the issuance of the Bonds, and as security for its
payments under the Loan Agreement, the Note and the hereinafter described Reimbursement
Agreement, the Owner will execute and record the First Deed of Trust, Assignment of Rents
and Security Agreement dated as of [DATE], 1994 (as supplemented and amended, the “First
Deed of Trust”) to a trustee for the benefit of the Commission and the Surety, creating a
first priority lien and security interest encumbering the Project and the other rights and
properties described therein (the “Granted Property”). The First Deed of Trust will be
assigned by the Commission to the Trustee pursuant to the Indenture and that certain
Assignment of First Deed of Trust Documents dated as of [DATE], 1994 (as supplemented
and amended, the ‘Assignment”).
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[16] Contemporaneously with the issuance of the Bonds, the Surety (together with the provider of any Alternate Security pursuant to Section 2.11 of the Indenture and
Section 4.05 of the Loan Agreement, referred to herein as the “Credit Facility Issuer”) will
issue its Surety Bond No. 1667165-A (the “Surety Bond” and, together with all extensions, renewals and replacements thereof and together with any Alternate Security, the “Credit
Facility”) to the Trustee, under which the Surety will insure to the Trustee, as obligee of the
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Surety Bond, the payment of any Deficiency (as defined in the Surety Bond, but subject to
the terms and conditions thereof including receipt of a proper notice of claim) in the amount
required (i) to pay any deficiency in the amounts held by the Trustee and the Paying Agent
(as defined in the Indenture) of the principal of and interest becoming due on the Bonds
outstanding under the Indenture on or prior to the termination of the Surety Bond pursuant
to its terms, whether at stated maturity, upon redemption or upon acceleration, but, unless
amended to include such optional redemption, not upon optional redemption pursuant to
Section 4.01(a) or 4.01(d)(4), of the Indenture; (ii) except as provided in Section 2.1 l(b)
of the Indenture, to pay any “Preferential Payments” as defined in Section 6.01 of the
Indenture; (iii) to pay the Purchase Price of Bonds tendered for purchase pursuant to
Section 4.05(b) of the Indenture becoming due on or prior to the termination of the Surety
Bond pursuant to its terms; and (iv) to pay the Purchase Price of Bonds purchased in lieu of redemption in accordance with Section 4.05(c) of the Indenture. The Surety Bond
constitutes a Credit Facility under the Indenture.
[17] To evidence the obligation of the Owner to repay, inter alia, the amounts paid
by the Surety under the Surety Bond, the Surety and the Owner entered into that certain
Reimbursement Agreement dated as of [DATE], 1994 (as amended and supplemented, the
“Reimbursement Agreement”). The obligations of the Owner under the Reimbursement
Agreement are secured by the First Deed of Trust and by a Second Deed of Trust,
Assignment of Rents and Security Agreement dated as of [DATE], 1994 (as amended and
supplemented, the “Second Deed of Trust”) from the Owner to a trustee for the benefit of
the Surety.
[18] Contemporaneously with the issuance of the Bonds, the Surety (together with its
successors and assigns and the provider of any Alternate Liquidity Facility, the “Liquidity
Provider”) will issue its Surety Bond No. 1667165-B (the “Liquidity Surety Bond” and,
together will all extensions, renewals and replacements thereof and together with any
Alternate Liquidity Facility, the “Liquidity Facility”) to the Trustee, under which the
Liquidity Provider will insure to the Trustee, as obligee of the Liquidity Surety Bond, for
the benefit of the Holders of Bonds tendered pursuant to the terms thereof and not
remarketed, the payment of any Deficiency (as defined in the Liquidity Surety Bond, but
subject to the terms and conditions thereof, including receipt of a proper notice of claim) in
the amount required to pay the Purchase Price of Bonds tendered for purchase pursuant to
Section 4.05(a) of the Indenture becoming due on or prior to the termination of the
Liquidity Surety Bond pursuant to its terms.
[19] To evidence the obligation to repay, inter alia, the Liquidity Provider for
amounts paid by the Surety under the Liquidity Surety Bond, the Owner and the Liquidity
Provider have entered into that certain Liquidity Facility Agreement dated as of [DATE], 1994 (as amended and supplemented the “‘Liquidity Facility Agreement”).
[20] Contemporaneously with the issuance of the Bonds, the Trustee, the
Commission and the Surety agree to enter into this Intercreditor Agreement with respect to the exercise of certain rights, remedies and options by the respective parties hereto under the
Financing Documents (as defined in the Indenture).
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NOW, THEREFORE, the parties hereto covenant and agree as follows (all capitalized
terms which are not defined in this Intercreditor Agreement shall take their definitions as set
forth in the Indenture):
SECTION 1. EXERCISE OF RIGHTS UNDER THE FINANCING DOCUMENTS.
So long as (a) the Surety Bond shall be in effect and (b) no Event of Default under
Section 9.01 of the Indenture shall have occurred and be continuing, the following provisions shall be applicable (otherwise, the parties hereto shall be governed by the
provisions of the respective Financing Documents with respect to their rights and remedies):
A. Upon the occurrence of an Event of Default under the Reimbursement
Agreement, the Loan Agreement or under any of the other Financing Documents, the
Surety shall be permitted and is hereby authorized to take any and all actions and to
exercise any and all rights, remedies and options which it or the Trustee or the
Commission may have under the Financing Documents, including the right to direct
the Trustee to accelerate the Bonds or to call the Bonds for redemption, to accelerate
the Owner’s obligations under the Note and/or the Loan Agreement and/or the
Reimbursement Agreement and/or to exercise other rights and remedies under the
First Deed of Trust Documents and/or the Second Deed of Trust Documents, to
foreclose the First Deed of Trust and/or the Second Deed of Trust (or accept a deed in
lieu of foreclosure) and to sell or otherwise realize upon the property mortgaged, pledged and assigned to the Surety under the First Deed of Trust and/or the Second
Deed of Trust without objection or interference by the Commission or the Trustee.
B. The Commission and the Trustee shall not take any action to declare the
outstanding balance of the Bonds or the Note to be due pursuant to Section 9.02 of the
Indenture or Section 7.02 of the Loan Agreement or to foreclose the lien of the First
Deed of Trust or sell the Granted Property (or any portion thereof) described therein,
or to exercise any other rights or enforce any other remedies provided for in the First
Deed of Trust or any other First Deed of Trust Document against any property
described therein, without the prior written consent of the Surety. This provision
shall not restrict or limit (i) the application by the Trustee of any funds held under
the Indenture in accordance with the terms thereof, or (ii) the submission of any
claim and the collection and application of moneys paid under the Surety Bond in
accordance with the terms of the Surety Bond and the Indenture, or (iii) the taking by
the Trustee and/or the Commission of any action to enforce the provisions of the
Regulatory Agreement or (iv) making demand upon the Owner for payment of fees of
the Trustee and/or the Commission and taking such action under the Loan Agreement
to collect such fees, subject to the provisions of this Intercreditor Agreement and the
First Deed of Trust Documents provided that (1) the Trustee shall have given the
Surety at least 60 days’ prior written notice of the Owner’s noncompliance with the
Regulatory Agreement of which a Responsible Officer (as defined in the Indenture)
has actual knowledge (unless immediate action is otherwise required to respond to a
temporary injunction or other emergency proceeding or to avoid entry of a default
judgment) and the actions required to cure such noncompliance, (2) the Surety shall
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not have undertaken appropriate actions or proceedings to effect such compliance and
(3) any action taken by the Trustee or the Commission shall not cause or result in any
acceleration of the Bonds or of the indebtedness evidenced by the Note or any foreclosure sale or a discharge or impairment of any lien and security interest on the
Granted Property securing the obligations of the Owner under the First Deed of Trust
Documents or the Second Deed of Trust Documents.
C. In the event the Surety or its designee shall become the legal or beneficial
owner of the Project by foreclosure, purchase or deed in lieu of foreclosure, the
Surety or its designee shall execute and deliver to the Commission and the Trustee an
instrument in writing assuming and agreeing to perform the obligations of the Owner under the Regulatory Agreement, the Loan Agreement and the Note effective from
and after the date of such acquisition, with the benefit, however, of the nonrecourse
provisions contained therein.
D. The Commission and the Trustee agree that they will cooperate with the
Surety and take or refrain from taking any and all action, including joining in such
proceedings at law or in equity and executing such documents as the Surety may
request and direct to enforce the obligations of the Owner under the Financing
Documents and the Regulatory Agreement, and in order to assure that the rents and
other revenues, profits and proceeds from the Project (including without limitation
any proceeds of insurance), which are pledged and assigned to the Trustee and Surety
jointly under the First Deed of Trust Documents and secondarily to the Surety alone under the Second Deed of Trust Documents (the “Pledged Revenues”), shall be
available, after the payment of any and all costs and expenses incurred in the
collection thereof, to pay and perform any outstanding and unpaid obligations of the
Owner under the Loan Agreement and the other Financing Documents, subject to the
Surety’s rights of subrogation, and in such order and manner as the Surety shall
determine subject to Section 2.07 of the Indenture.
E. The Surety, in consideration for the agreements by the Commission and
the Trustee to cooperate with the Surety and to exercise, or refrain from exercising,
certain rights, remedies and options under the Financing Documents at the request and direction of the Surety, hereby covenants and agrees to pay for any and all reasonable
costs, liabilities, fees and expenses of the Trustee and the Commission (including
reasonable attorneys’ fees and expenses) which may be incurred in connection
therewith, provided, however, that the Surety shall not be obligated under this
Intercreditor Agreement (i) to pay any costs, fees or expenses, which the Commission
or the Trustee may suffer or incur, by reason of their respective negligence or willful
failure to perform the undertakings, trusts and duties imposed upon the Commission
and the Trustee, respectively, under the Indenture and the Financing Documents or
(ii) to pay any costs, fees or expenses which the Commission or the Trustee may incur
by reason of the exercise or failure to exercise any power or discretion (other than at the Surety’s direction).
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SECTION 2. AMENDMENTOFDOCUMENTS.
The parties hereto agree that they will not enter into any amendment, change or
modification of any of the documents referred to in this Intercreditor Agreement without
the express prior written consent to such amendment, change or modification by the Surety.
If any of the Financing Documents require the consent to any amendment, change or modification by either or both of the Commission or the Trustee, the Commission and the
Trustee each agree that it will not withhold its consent to any such amendment, change or
modification requested by the Surety or the Owner if their interests are not adversely
affected thereby in any material way.
The Surety at its expense may at any reasonable time examine or copy any non- privileged letter, account, or other documentation or information in the possession or
control of the Commission or the Trustee relating to or connected with the Project, the
Bonds and collections under the Note and the Loan Agreement. The Commission and the
Trustee shall, at the request and expense of the Surety, take reasonable steps to obtain for the
Surety any information or documents in the possession of any third party relating to or in
connection with the Project or the Bonds.
SECTIONS. INTER~REDITORAGREJZMENTFORBENEFITOFPARTIESHERET~.
Nothing in this Intercreditor Agreement, express or implied, is intended or shall be
construed to confer upon, or to give to, any person other than the parties hereto and their
respective successors and assigns, any right, remedy or claim under or by reason of this Intercreditor Agreement or any covenant, condition or stipulation hereof; and the covenants,
stipulations and agreements contained in this Intercreditor Agreement are and shall be for
the sole and exclusive benefit of the parties hereto and their respective successors and
assigns, including without limitation, any successor trustee under the Indenture. Neither the
Owner nor any Bondholder shall acquire any right or claim under or by virtue of this
Intercreditor Agreement or under any circumstances be deemed to be a third party
beneficiary hereunder.
SECTIONS. SEVERABILITY.
In case any one or more of the provisions contained in this Intercreditor Agreement
shall be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.
SECTION 6. NoncEs.
All notices, demands, certificates or other communications hereunder shall be in writing and
shall be deemed sufficiently given or served for all purposes when presented personally or
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sent by certified or registered mail, postage prepaid, return receipt requested, or sent by
private courier service, with proper address as indicated below. Each party may, by written
notice given to the other parties, designate any other address or addresses to which notices,
certificates or other communications to them shall be sent when required as contemplated by
this Intercreditor Agreement. Notices sent by private courier service shall be deemed to
have been given if and when received (unless the addressee refuses to accept delivery, in
which case it shall be deemed to have been given when first presented to the addressee for
acceptance) and any notice sent by registered or certified mail shall be deemed given or
served three Business Days after the date of mailing thereof. Until otherwise so provided by
the respective parties, all notices, certificates and communications to each of them shall be
addressed as follows:
To the Surety: Continental Casualty Company
CNA Plaza Chicago, Illinois 60685
Attention: Senior Vice President and General Counsel
with a copy to:
Continental Casualty Company
CNA Plaza
Chicago, Illinois 60685
Attention: Corporate Secretary
To the Commission: Carlsbad Housing and Redevelopment Commission
Carlsbad, California
Attention:
To the Trustee: First Trust of California, National Association
101 California Street
Suite 1150
San Francisco, California 94 111
Attention: Multi-Family Housing
SECTION 7. SUCCESSORS AND ASSIGNS.
Whenever in this Intercreditor Agreement any of the parties hereto is named or referred to, the successors and assigns of such party shall be deemed to be included and all
covenants, promises and agreements in this Intercreditor Agreement contained by or on behalf of the respective parties hereto shall bind and inure to the benefit of the respective
successors and assigns of such parties, whether so expressed or not.
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SECTION 8. COUNTERPARTS.
This Intercreditor Agreement may be executed in any number of counterparts, each
executed counterpart constituting an original but all counterparts together constituting only
one instrument.
SECTION 9. GOVERNINGLAW.
It is the intention of the parties hereto that this Intercreditor Agreement and the rights
and obligations of the parties hereunder shall be governed by and construed and enforced in
accordance with the laws of the State of California without reference to conflict of laws principles of such State.
SECTION 10. N~IMPAIRMENTSOFC~-HERRIGHTS.
Nothing in this Intercreditor Agreement is intended or shall be construed to impair,
diminish or otherwise adversely affect any other rights the Surety may have or may obtain
against the Owner, including, but not limited to, the Surety’s rights under the First Deed of
Trust Documents and Second Deed of Trust Documents or as a Holder of Bonds (in the
event it shall be or become a Holder thereof), or the Surety’s rights of subrogation; and
nothing in this Intercreditor Agreement shall in any way impair, limit, or restrict the
obligations of the Owner to the Commission, the Trustee and the Surety.
SECTION 11. S~RETYBONDN~TTOBEIMMIRED;REMEDIES.
No failure of the Trustee or the Commission to perform any undertakings or honor
any covenants or agreements hereunder shall affect the obligation of the Surety on the
Surety Bond after the issuance thereof, but the Surety and the other parties hereto shall have
full right and power to enforce said undertakings, covenants and agreements directly against
the parties hereto by suit for specific performance or claims for damages or a combination
of the foregoing.
SECTION 12. SUBROGATION.
The Commission and the Trustee agree that the Surety shall be subrogated to their
rights and remedies under the First Deed of Trust Documents upon and to the extent of the
Surety’s payment of the principal of, or Purchase Price for, or interest on the Bonds, or the
payment or performance of any obligation under the First Deed of Trust Documents. At the
request and expense of the Surety, the Commission and Trustee agree to cooperate with the
Surety in connection with Surety’s enforcing any of such rights and remedies and agree not
to take any actions that would prejudice the exercise of such right of subrogation.
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SECTION 13. HEADINGS.
Headings herein are for convenience only and shall not be relied upon in interpreting
or enforcing this Intercreditor Agreement.
SECTION 14. TERMINATION.
This Intercreditor Agreement shall terminate when (i) the Surety Bond has been
returned to the Surety marked “canceled and released” by the Trustee and (ii) all amounts
owed to the Surety by the Owner under the Financing Documents have been paid; it being
understood by the parties hereto that this Intercreditor Agreement shall remain in full force
and effect so long as the Surety is the Holder of any of the Bonds.
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IN WITNESS WHEREOF, the Trustee, the Surety and Commission have caused this
Intercreditor Agreement to be executed in their respective corporate names, all as of the
date first above written.
FIRSTTRUSTOFCALIFORNIA,NATIONAL
ASSOCIATION, as Trustee under the
within-mentioned Trust Indenture
By:
Printed Name:
Its: Author&d Signatory
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CONTINENTAL CASUALTY COMPANY, as
Surety
By: Its Attorney-in-Fact
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w=)
ATTEST:
By: Secretary
URLSBAD HOU~INO MD REDEVELOPMENT
COMMISSION
BY Chairman
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