HomeMy WebLinkAbout05.I- Consent to Subordinate Tax Regulatory Agreement to Department of Housing and Urban Development in Connection with Refinancing of HUD Loan Rancho Meridian Mobile Home Park 5.1
RESOLUTION (ID # 4391) DOC ID: 4391 C
CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION
Conveyance of Property
From: Lisa Connor M/CC Meeting Date: 04/18/2016
Prepared by: Lisa Connor, (909) 663-
1044
Dept: Successor Agency Ward(s): 3
Subject:
Resolution of the Mayor and Common Council Acting as the Successor Agency to the
Redevelopment Agency of the City of San Bernardino Authorizing the Consent to
Subordinate Its Tax Regulatory Agreement to the Loan of the Department of Housing
and Urban Development in Connection with the Refinancing of the HUD Loan on the
Rancho Meridian Mobile Home Park and Such Actions as Are Necessary to Accomplish
the Foregoing. (#4391)
Current Business Registration Certificate: Yes
Financial Impact:
None.
Motion: Adopt the Resolution.
Synopsis of Previous Council Action:
Background:
The Rancho Meridian Mobile Home Park (Park) is part of the original eight mobile home
parks acquired in the mid 1990's by the Redevelopment Agency of the City of San
Bernardino (Agency). The Park was acquired by the Agency with a loan provided by
the San Bernardino Joint Powers Financing Authority from the proceeds of certain lease
revenue bonds.
Prior to the acquisition of the Parks, the Agency expended funds for the initial analysis
of the feasibility of the park purchase project, due diligence investigation of each park,
and administrative and consulting fees. The Agency agreed to enter into Loan
Agreements secured by Notes for each Park for the various fees and expenses
incurred. The loan agreements and notes are not secured by a deed of trust on the
Parks. The liens of the Agency on the Parks are solely tax regulatory agreements.
There are no Agency deeds of trust recorded as liens against the Parks. The deed of
trust securing the loans is recorded against other properties owned by the California
Mobile Home Park Corporation (Corporation). This action was taken several years ago
in order not to affect the lien ratio on the Parks for U.S. Department of Housing and
Urban Development (HUD) financing purposes.
As originally contemplated, the Agency transferred operations of the Parks to the
I
Updated: 4/7/2016 by Linda Sutherland C Packet Pg. 308
5.1
4391
Corporation in 1996. At the request of the Agency, between 2001 and 2003, the
Housing Authority of the County of San Bernardino (County Housing Authority)
refinanced the Agency's outstanding bonds with mortgage revenue bonds secured by
GNMA securities backed by HUD. Red Mortgage Capital Group is the facilitator of the
HUD loan for the Parks. The County Housing Authority issued Series B bonds to assist
in financing, and the Agency assisted in the financing by removing its deeds of trust as
liens on the Parks, and recording its tax regulatory agreements in third position.
In 2010, the Corporation changed its name to Affordable Community Living Corporation
(ACLC). During the year, ACLC requested that the Agency subordinate the regulatory
agreements and other liens on the Rancho Meridian Mobile Home Park to refinance the
park. At that time, the Agency subordinated its regulatory agreements to the new HUD
financing, maintaining the same lien position that it originally had. The refinancing of
the HUD loan resulted in a reduction of the interest rate on the senior loan, and thus
resulted in additional funds to repay the County Housing Authority's second lien bonds.
CURRENT ISSUE
Recently, the ACLC informed the Successor Agency that HUD had provided a
preliminary commitment to refinance the HUD loan on the Park and is requesting that
the Successor Agency subordinate the lien of the Agency Tax Regulatory Agreement to
the refinancing of the HUD loan. Refinancing of the HUD loan will result in a lower
interest rate. The ACLC will take no money out of the refinancing other than for the
payment of reasonable refinancing costs. The anticipated closing of the subordination
is November, 2016 with the following terms:
Loan Terms Existing Proposed
Loan Amount 4,676,523 4,756,200
Interest Rate 4.55% 3.75%
Loan Term (Years) 30 35
Monthly Principal Interest $23,866 $20,352
1 Annual Principal Interest $286,386 $244,224
This subordination will not affect the lien position of the Agency as the Agency Tax
Regulatory Agreement will continue to be in third position. More importantly, the
subordination does not affect any distribution of funds to the Successor Agency.
When the subordination of the Agency Tax Regulatory Agreements occurred in 2010 for
the Park, the Agency required ACLC to commit to the following terms:
1. It will not take any new money out of the refinancing other than for the payment of
reasonable refinancing costs.
2. The refinancing of the HUD loans will result in a lower interest rate on the HUD
Loan.
Updated: 4/7/2016 by Linda Sutherland C Packet Pg. 309
Cl�
4391
Successor Agency staff has indicated that the same requirements will be necessary for
an approval of the refinancing of the Park at this time.
City Attorney Review:
Supporting Documents:
Reso Rancho Meridian Subordination (DOC)
Agmt - Subordination Rancho Meridian (DOC)
Updated: 4/7/2016 by Linda Sutherland C Packet Pg. 310
1 RESOLUTION NO.
2
a
3 RESOLUTION OF THE MAYOR AND COMMON COUNCIL ACTING AS THE E
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF =
4 SAN BERNARDINO AUTHORIZING THE CONSENT TO SUBORDINATE ITS TAX d
5 REGULATORY AGREEMENT TO THE LOAN OF THE DEPARTMENT OF o
HOUSING AND URBAN DEVELOPMENT IN CONNECTION WITH THE
6 REFINANCING OF THE HUD LOAN ON THE RANCHO MERIDIAN MOBILE
HOME PARK AND SUCH ACTIONS AS ARE NECESSARY TO ACCOMPLISH THE
FOREGOING.
0
8
WHEREAS, on January 9, 2012, the Mayor and Common Council of the City of
9 San Bernardino ("Council") adopted Resolution No. 2012-12 confirming that the City of San
10 Bernardino would be the Successor Agency to the Redevelopment Agency of the City of San -
11 Bernardino ("Successor Agency") effective February 1, 2012, pursuant to AB1X 26 (The
co
12 Redevelopment Agency Dissolution Act); and N
13 WHEREAS, on January 23, 2012, the Council adopted Resolution No. 2012-1 0
w
14 providing for the City to become the Housing Successor and to perform housing function o
_
15 previously performed by the Agency; and
WHEREAS, pursuant to Health & Safety Code Section 34181(c) of AB1X 26 th c
16 rn
Oversight Board is to direct the transfer of housing responsibilities, including all rights, powers,
17
duties, obligations and assets, to the Housing Successor; and
18
WHEREAS, the former Redevelopment Agency ("Agency") acquired the Rancho d-
19 =
Meridian Mobile Home Park (Park) with funds loaned to the Agency from the proceeds of the .
20 =
San Bernardino Joint Powers Financing Authority's mortgage revenue bonds (1995 Bonds)
21 s
issued for the Park in 1995; and Cl)
22 c
WHEREAS, the purchase of the Park by the Agency was to further low and moderate
23
income housing within the City of San Bernardino; and,
24 0
WHEREAS, prior to the purchase of the Park, the Agency expended Agency funds on c
25
behalf of the mobile home park conversion program, without any formal intent or 0
1 26
documentation to provide for any reimbursement or recoupment of such expended funds, for (i)
27 c
the initial analysis of the Park, (ii) due diligence investigation, engineering and financial E
28 s
v
co
r
N.. Q
1 Packet Pg. 311
1 analysis for the converted Park, (iii) administrative and consultant expenses to implement the
2 program, and (iv)payment of the Park conversion consultant fees and expenses; and a
3 WHEREAS, in May, 1996, the Agency caused the formation of the California Mobile o
x
4 Home Park Corporation, formerly The San Bernardino Mobilehome Park Corporation
5 O
(Corporation) and eight subsidiaries thereof representing each of the parks it purchased through
6
the conversion program; and a
L
7 C
WHEREAS, the sole purpose of the Corporation and its subsidiaries is to provide low C
8 _
income housing to the residents within the City of San Bernardino and other cities within the M
9
State of California; and
10
WHEREAS, the Agency transferred its ownership interest in the Park to the Rancho
11
Meridian Mobile Home Park Corporation; and to
12 LO
WHEREAS, in an attempt to recoup a portion of its expenditures incurred prior to the
13 p
purchase of the Parks, the Agency required the Corporation to execute a note and deed of trust
14 y
15 (the "Park Reimbursement Obligation") securing the Park Reimbursement Obligations for the
benefit of the Agency; and c
16 m
WHEREAS, in 1999, control of the Corporation and its subsidiaries was transferred to x°
17 ..
la an independent non-profit board of directors to alleviate the further costs and time associated M
with Agency administration of the Corporation; and
19 2
20 WHEREAS, in connection with the issuance by the County of San Bernardino Housing
21 Authority ("County Housing Authority") of its $27,195,000 mortgage revenue notes (the "1999 0
22 Notes"), the Agency reconveyed the deeds of trust upon receipt of a new deed of trust securing c
23 the Park Reimbursement Obligations; and
a�
24 WHEREAS, the County Housing Authority assisted the Corporation with refinancing a s
25 portion of the 1999 Notes and pursuant to that transaction, the County Housing Authority issued
26 GNMA Collateralized Bonds ("Refunding Bonds") for the Park; and d
27
a�
.ter. 28
v
Q
2 Packet Pg.312
.a
1 WHEREAS, the Corporation applied a portion of the proceeds of the Refunding Bonds
Y
z to pay the Park Reimbursement Obligations in full upon the issuance of each series of the a
3 Refunding Bonds; and c
x
4 WHEREAS, the purpose of the expenditures made by the Agency prior to the transfer
Z
5 O
of the Park to the Corporation has been satisfied, as the Park has been acquired, partially
_
6 220
rehabilitated, and transferred to a non-profit corporation which is organized to ensure the Park is :_
reserved for low-and moderate-income tenants; and o
8 �
WHEREAS, the Agency then loaned funds to the Corporation pursuant to the 2001
9
Loan Agreement and 2001 Note evidencing such obligation; and rn
10 —
WHEREAS, the Agency entered into a Subordinate Tax Regulatory Agreement dated
11
March 1, 2001, recorded in the records of the County Recorder for the County of San
12
Bernardino on July 9, 2002, as Instrument Number 2002-0352534; to restrict certain units in the
13 O
Park to low- and moderate-income tenants as long as such Regulatory Agreement does not
14 to
violate any provision of the FHA documents which are recorded against the Park in connection
15 F-
with the issuance of the Bonds; and c
16 u�
WHEREAS, the Corporation has informed the Successor Agency that they desire tc =
17
refinance the HUD Loan and have requested that the Successor Agency agree to subordinate the
18 c�
Series B Tax Regulatory Agreement in order for the new HUD loan to remain a senior lien on
19 _
the Park; and
cc
20 WHEREAS, the Corporation has represented to the Successor Agency that; 1) the a
O
21 refinancing of the HUD loan by the Rancho Meridian Mobile Home park Corporation will result
22 in a lower interest rate; and 2) the Corporations will take no money out of the refinancing other
'a
23 than for the payment of the reasonable refinancing costs; and
24 WHEREAS, the Successor Agency has duly considered the terms of such transactions as =
25 contemplated herein and desire to consent to the subordination of the Series B Tax Regulator
Agreement subject to review of the new HUD loan documents by Successor Agency staff and y
26 y
legal counsel; and payment of any Successor Agency costs associated with the subordination an
27 =
any outstanding Successor Agency fees.
28 c
v
to
w
Q
3 Packet Pg. 313
1 NOW,THEREFORE,BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL
2 OF THE CITY OF SAN BERNARDINO ACTING AS THE SUCCESSOR AGENCY TO THE
a
3 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO,AS FOLLOWS: E
O
x
4 Section 1. Pursuant to Health &Safety Code Section 34176, the Successor Agency t °—'
5 O
the Redevelopment Agency of the City of San Bernardino does hereby consent and agree to
c
6 subordinate its Series B Tax Regulatory Agreement to the new respective HUD loan, subject to
7 and conditioned upon the review and satisfaction of Successor Agency staff and legal counsel
O
8 and hereby authorizes the City Manager or his/her designee, to execute the Subordinationc
9 Agreement (attached and incorporated herein as Exhibit "A") and cause it to be recorded with
10 the San Bernardino County Recorder.
11 Section 2. The City Manager, or any other officer or employee of the Successor
co
12 Agency designated by the City Manager, is hereby authorized to do all such acts and thing N
N
13 necessary to accomplish the subordination of the Series B Tax Regulatory Agreement to the new w c
14 HUD Loan N
c
R
15 Section 3. This Resolution shall take effect upon the date of its passage and
16 adoption.
.y
O
17
18 °i
19
O
20 /// c
21
22
23
24 /// O
t
U
c
25
O
26
27
CD
28
to
r
.r
Q
4 Packet Pg.314
5.I.a
1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL ACTING AS THE
2 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO AUTHORIZING THE CONSENT TO SUBORDINATE ITS TAX a
3 REGULATORY AGREEMENT TO THE LOAN OF THE DEPARTMENT OF E
HOUSING AND URBAN DEVELOPMENT IN CONNECTION WITH THE _
4 REFINANCING OF THE HUD LOAN ON THE RANCHO MERIDIAN MOBILE
5 HOME PARK AND SUCH ACTIONS AS ARE NECESSARY TO ACCOMPLISH THE o
FOREGOING.
c
6
L
7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the g
0
e Mayor and Common Council acting as the Successor Agency to the Redevelopment Agency of
9 the City of San Bernardino at a meeting thereof, held on the day of
Cn
10 , 2016,by the following vote to wit:
11 Commission Members: Ayes Nays Abstain Absent
LO
00
12 W
MARQUEZ
N
N
13 BARRIOS
v
co
14 VALDIVIA c
15 SHORETT
c
16 NICKEL :3
0
17 RICHARD
T
a)
la MULVIHILL
19 c
0
:r
20 c
Georgeann Hanna, City Clerk
21 �°
22 The foregoing resolution is hereby approved this day of , 2016.
a
23
24 0
R. Carey Davis, Mayor
25 City of San Bernardino
Approved as to form: 0
2 6 Gary D. Saenz, City Attorney
27 '-
c
d
28 By: s
U
R
w
w
Q
5 Packet Pg. 315
5.Lb
1
' RECORDING REQUESTED BY Y
a
Michael Decina
E
Kantor Taylor Nelson Evatt&Decina PC =
901 Fifth Ave, Suite 4000
Seattle,WA 98164 0
WHEN RECORDED RETURN TO:
•L
W
a
O
U
Attention:
CU
o!
FIRST AMENDMENT TO AGENCY SUBORDINATE TAX REGULATORY AGREEMENT =
(Rancho Meridian)
co
THIS FIRST AMENDMENT TO AGENCY SUBORDINATE TAX N
REGULATORY AGREEMENT (this "Amendment"), amending that certain Agency o
Subordinate Tax Regulatory Agreement dated as of March 1, 2001, and recorded on July 9,
2002, as Document No. 20020352534, in the Official Records of San Bernardino County (the c
"Regulatory Agreement"), relating to a multifamily rental housing project located on the real
property described in Exhibit A hereto (the "Project"), is made and entered into as of December
1, 2015, by and among the THE CITY OF SAN BERNARDINO, acting as the SUCCESSOR 3
AGENCY to The Redevelopment Agency of the City of San Bernardino pursuant to California 0
x
Health and Safety Code Section 34176 (the "Agency") and THE RANCHO MERIDIAN
r
MOBILEHOME PARK CORPORATION, a California nonprofit public benefit corporation (the
"Company").
c
WITNESSETH:
•L
WHEREAS, the Agency previously loaned low and moderate-income housing o
funds of the Agency to the Company pursuant to that certain Agency 2001 Loan Agreement
dated as of March 1, 2001, between the Agency and the Company and that certain 2001 Note
evidencing such obligation(the"Agency Financing"); o
I �
WHEREAS, Agency Company entered into the Regulatory Agreement as a =
condition of the Agency Financing and in order to impose certain restrictions on the Company's o
use of the Project; 3
WHEREAS, the Agency Financing has since been repaid and is no longer E
outstanding, Agency and Company now wish to execute and deliver this Amendment in Q
connection with the refinancing of the Project with proceeds of a loan made to Company by
Dwight Capital, LLC, a New York limited liability company;
NOW,THEREFORE,the parties hereto hereby agree as follows:
Q
First Amendment to Agency Subordinate Tax Regulatory Agreement
Packet Pg. 316
2
Section 1. Definitions. Unless otherwise defined, capitalized terms used L
herein shall have the meanings assigned to them in the Regulatory Agreement. nom.
d
Section 2. Addition of Section 21. The Regulatory Agreement is hereby
amended to add a new Section 21, as provided in Exhibit B attached to this Amendment: a�
"Section 21. HUD Refinance Requirements. The HUD Rider to Restrictive
Covenants, attached hereto as Exhibit D, is incorporated by reference into the Regulatory o
Agreement for such time as the Project is subject to a mortgage, deed of trust or security
instrument insured or held by the Secretary of Housing and Urban Development
("HUD"), or its successors or assigns." o
U
_
Section 3. Reaffirmation of Regulatory Agreement. Agency and Company
each hereby reaffirm each of the provisions of the Regulatory Agreement and confirms that the N
Regulatory Agreement, as amended, and each of the terms and provisions thereof shall remain in -
full force and effect for the term thereof.
Section 4. Execution of Counterparts. This Amendment may be executed in 00
several counterparts, each of which shall be an original and all of which shall constitute but one
and the same instrument. _
0
U
cc
[Signatures on following pages]
a>
O
X
T
M
d'
_
t0
.a
•L
d
O
t
V
_
co
_
O
R
_
:a
i
O
Cn
Q
_
Q
E
0
t
V
Q
First Amendment to Agency Subordinate Tax Regulatory Agreement
Packet Pg.317
5.I.b
3
' IN WITNESS WHEREOF, Agency and Company have executed this First
Amendment to Agency Subordinate Tax Regulatory Agreement by duly authorized a
representatives, all as of the date first above written.
O
d
AGENCY: o
CITY OF SAN BERNARDINO
ACTING AS THE SUCCESSOR
AGENCY TO THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN
BERNARDINO c
o:
By: N
Name: Mark Scott
Title: Cily Manager N
N
O
[acknowledgment on following page] c
c
a,
c
.N
O
T
M
d'
C
f4
Gf
O
s
U
C
Q'
O
w
t4
C
L
O
Q
V
Q�
I_
U
w
Q
First Amendment to Agency Subordinate Tax Regulatory Agreement
Packet Pg. 318
5.I.b
4
[Agency acknowledgement page] L
�o
a
m
E
A notary public or other officer completing this =
certificate verifies only the identity of the _d
individual who signed the document to which M
0
this certificate is attached, and not the
truthfulness,accuracy, or validity of that _M
document. 2
�L
2
STATE OF CALIFORNIA ) 0
ss:
COUNTY OF )
U)
On , 20 before me,
personally appeared , who proved to me on the co
basis of satisfactory evidence to be the person whose name is subscribed to the within instrument N
and acknowledged to me that he/she executed the same in his/her authorized capacity, and that o
by his/her signature on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument. c
L
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct. _
N
WITNESS my hand and official seal. _
CD
M
Signature:
a
L
2
0
V
C
_
w
_
L
0
Cn
Q
_
d
E
V
Q
First Amendment to Agency Subordinate Tax Regulatory Agreement
Packet Pg. 319
5
[Company Signature Page to First Amendment to Agency Subordinate Tax Regulatory Y
L
Agreement.] a
0
E
0
COMPANY:
THE RANCHO MERIDIAN MOBILEHOME
PARK CORPORATION, a California
nonprofit public benefit corporation
a�
By: 0
Name:
r
Cn
Title: _
[acknowledgment on following pages] co
v�
0
N
cC
LL
r
.N
0
r
M
d'
C
l4
�L
d
0
t
V
NN�
1.1.
w+
V
L
0
Q
E
V
Y
Q
First Amendment to Agency Subordinate Tax Regulatory Agreement
Packet Pg. 320
5.I.b
6
[Company acknowledgement page] Y
a
w
E
A notary public or other officer completing this =
certificate verifies only the identity of the _d
individual who signed the document to which
O
this certificate is attached, and not the
truthfulness,accuracy, or validity of that
document.
L
cc�
G
STATE OF CALIFORNIA ) 0
ss:
COUNTY OF )
On , 20 , before me,
personally appeared ,who proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to the within instrument and acknowledged co
to me that she executed the same in her authorized capacity, and that by her signature on the N
N
instrument the person, or the entity upon behalf of which the person acted, executed the o
instrument.
C" I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
c
WITNESS my hand and official seal. o
x
M
Signature:
L
[Seal] o
U
c
C
O
w
R
C
'a
L
O
M
1
Q
I E
® U
Y
Q
First Amendment to Agency Subordinate Tax Regulatory Agreement
Packet Pg. 321
7
EXHIBIT A
a
Description of Real Property E
O
The South half of the Southwest quarter of the Southwest quarter of Section 7, Township 1, d
South, Range 4 West, San Bernardino Meridian, in the City of San Bernardino, County of San o
Bernardino, State of California, according to the Official Plat thereof.
c
�a
Except the interest in the South 30.00 feet, as conveyed to the City of San Bernardino, in deed
recorded February 13, 1934 in Book 935 Page 379, Official Records.
O
Also except the interest in the West 30.00 feet, as conveyed to the City of San Bernardino, in
deed recorded July 12, 1928 in Book 389 Page 203, Official Records.
Cn
co
N
N
C
O
V
ca
N
C
f �
L
N
C
N
3
O
T-
0
U
C
f0
C
O
M
C
L
O
Q
w+
E
U
Q
First Amendment to Agency Subordinate Tax Regulatory Agreement
Packet Pg. 322
I
5.I.b
8
EXHIBIT B Y
a
HUD Rider to Restrictive Covenants
0
m
"EXHIBIT D o
HUD RIDER TO RESTRICTIVE COVENANTS
This Rider to Restrictive Covenants is made as of December 1, 2015, by and among the 2
CITY OF SAN BERNARDINO COUNTY, acting as the SUCCESSOR AGENCY to The 5.
Redevelopment Agency of the City of San Bernardino pursuant to California Health and Safety
Code Section 34176 (the "Agency") and THE RANCHO MERIDIAN MOBILEHOME PARK
Cz
CORPORATION, a California nonprofit public benefit corporation(the "Company"). W
w
WHEREAS, Company has obtained financing from Dwight Capital, LLC, a New York
limited liability company (the "Lender") for the benefit of the project known as Rancho
Meridian Mobilehome Park (the "Project"), which loan is secured by a Multifamily Deed of to
Trust, Assignment of Rents, and Security Agreement ("Security Instrument") dated as of N
December 1, 2015, and recorded in the Recorder's Office of San Bernardino County, California
(the "Records") contemporaneously herewith, and is insured by the United States Department of .0
Y
Housing and Urban Development("HUD"); a
Whereas Company entered into that certain Agency Subordinate Tax Regulatory
'
Agreement "Restrictive Covenants" with respect to the Project dated March 1 2001 and ='
recorded on July 9, 2002, as Document No. 20020352534, in the Records;
0
WHEREAS, HUD requires as a condition of its insuring Lender's financing to the
T
Project, that the lien and covenants of the Restrictive Covenants be subordinated to the lien, M
covenants, and enforcement of the Security Instrument; and
_
WHEREAS, Agency has agreed to subordinate the Restrictive Covenants to the lien of :2
L
the Mortgage Loan in accordance with the terms of this Rider.
0
NOW, THEREFORE, in consideration of the foregoing and for other consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
_
(a) In the event of any conflict between any provision contained elsewhere in the •
Restrictive Covenants and any provision contained in this Rider, the provision contained in S
this Rider shall govern and be controlling in all respects as set forth more fully herein. o
Cn
(b) The following terms shall have the following definitions:
E
"Code" means the Internal Revenue Code of 1986, as amended. Q
w
"HUD" means the United States Department of Housing and Urban Development.
t
U
Q
First Amendment to Agency Subordinate Tax Regulatory Agreement
Packet Pg. 323
9
"HUD Regulatory Agreement" means the Regulatory Agreement between Y
Company and HUD with respect to the Project dated December 1, 2015, as the a
same may be supplemented, amended or modified from time to time.
0
"Lender" means Dwight Capital, LLC, a New York limited liability company, its _0
successors and assigns.
0
"Mortgage Loan"means the mortgage loan made by Lender to Company pursuant
to the Mortgage Loan Documents with respect to the Project.
m
"Mortgage Loan Documents" means the Security Instrument, the HUD 0
Regulatory Agreement and all other documents required by HUD or Lender in
connection with the Mortgage Loan.
"National Housing Act"means the National Housing Act of 1934, as amended.
"Program Obligations"has the meaning set forth in the Security Instrument. 3:
co
"Residual Receipts" has the meaning specified in the HUD Regulatory N
Agreement. o
"Security Instrument" means the mortgage or deed of trust from Company in y
favor of Lender, as the same may be supplemented, amended or modified. a
"Surplus Cash"has the meaning specified in the HUD Regulatory Agreement. c
(c) Notwithstanding anything in the Restrictive Covenants to the contrary, the =
provisions hereof are expressly subordinate to (1) the Mortgage Loan Documents, including
without limitation, the Security Instrument, and (ii) Program Obligations (the Mortgage Loan
Documents and Program Obligations are collectively referred to herein as the "HUD
Requirements"). Company covenants that it will not take or permit any action that would result m
in a violation of the Code, HUD Requirements or Restrictive Covenants. In the event of any
conflict between the provisions of the Restrictive Covenants and the provisions of the HUD 2
Requirements, HUD shall be and remains entitled to enforce the HUD Requirements. °�
Notwithstanding the foregoing, nothing herein limits Agency's ability to enforce the terms of the
Restrictive Covenants, provided such terms do not conflict with statutory provisions of the
National Housing Act or the regulations related thereto. Company represents and warrants that to 0
the best of Company's knowledge the Restrictive Covenants impose no terms or requirements
that conflict with the National Housing Act and related regulations.
0
(d) In the event of foreclosure (or deed in lieu of foreclosure), the Restrictive an
Covenants (including without limitation, any and all land use covenants and/or restrictions E
contained herein) shall automatically terminate. a
(e) Company and Agency acknowledge that Company's failure to comply with the
1 covenants provided in the Restrictive Covenants does not and shall not serve as a basis for E
default under the HUD Requirements,unless a default also arises under the HUD Requirements. 0
First Amendment to Agency Subordinate Tax Regulatory Agreement
A
Packet Pg.324
1
5.Lb
10
(f) Except for Agency's re orting requirement, in enforcing the Restrictive Y
L
Covenants, Agency will not file any claim against the Project, the Mortgage Loan proceeds, any a
reserve or deposit required by HUD in connection with the Security Instrument or HUD
Regulatory Agreement, or the rents or other income from the property other than a claim against: _
a�
i. Available surplus cash,if Company is a for-profit entity; c
M
ii. Available distributions of surplus cash and residual receipts authorized for release
by HUD, if Company is a limited distribution entity; or
a�
iii. Available residual receipts authorized by HUD, if Company is a non-profit entity.
U
C
(g) For so long as the Mortgage Loan is outstanding, Company and Agency shall not
further amend the Restrictive Covenants, with the exception of clerical errors or administrative
correction of non-substantive matters,without HUD's prior written consent. —
(h) Subject to the HUD Regulatory Agreement, Agency may require Company to
indemnify and hold Agency harmless from all loss, cost, damage and expense arising from any co
claim or proceeding instituted against Agency relating to the subordination and covenants set `y
forth in the Restrictive Covenants, provided, however, that Company's obligation to indemnify o
and hold Agency harmless shall be limited to available surplus cash and/or residual receipts of
Company.
(i) No action shall be taken in accordance with the rights granted herein to preserve
the tax exemption of the interest on the notes or bonds, or prohibiting the owner from taking any N
action that might jeopardize the tax-exemption, except in strict accord with Program Obligations. o
x
r
M
C
fC
L
CCQ�
G
O
U
C
fC
G
O
w
m
C
L
O
N
Q
C
N
E
t
U
Q
First Amendment to Agency Subordinate Tax Regulatory Agreement
Packet Pg. 325