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SUBORDINATION OF DEED OF TRUST
<br />(Continued) Page 2
<br />want Lender to provide financial accommodations to Borrower in the form of the Superior Indebtedness. Trustor and Beneficiary each represent
<br />and acknowledge to Lender that Beneficiary will benefit as a result of these financial accommodations from Lender to Borrower, and Beneficiary
<br />acknowledges receipt of valuable consideration for entering into this Subordination.
<br />NOW THEREFORE THE PARTIES TO THIS SUBORDINATION HEREBY AGREE AS FOLLOWS:
<br />SUBORDINATION. The Subordinated Deed of Trust and the Subordinated Indebtedness secured by the Subordinated Deed of Trust are and
<br />shall be subordinated in all respects to Lenders Lien and the Superior Indebtedness, and it is agreed that Lender's Lien shall be and remain, at all
<br />Limes, prior and superior to the lien of the Subordinated Deed of Trust. Beneficiary also subordinates to Lender's Lien all other Security Interests in
<br />the Real Property held by Beneficiary, whether now existing or hereafter acquired. The words "Security Interest" mean and include without
<br />limitation any type of collateral security, whether in the form of a lien, charge, mortgage, deed of trust, assignment, pledge, chattel mortgage;
<br />chattel trust, factor's lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security
<br />device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise.
<br />PAYMENTS TO BENEFICIARY. Borrower will not make and Beneficiary will not accept, at any time while any Superior Indebtedness is owing to
<br />Lender, (A) any payment upon any Subordinated Indebtedness, (B) any advance, transfer, or assignment of assets to Beneficiary in any form
<br />whatsoever that would reduce at any time or in any way the amount of Subordinated Indebtedness, or (C) any transfer of any assets as security
<br />for the Subordinated Indebtedness, except upon Lenders prior written consent. Notwithstanding the foregoing or anything else in this Agreement,
<br />Beneficiary may accept scheduled payments (but not prepayments) of principal and interest that are required to be paid under the Subordinated
<br />Promissory Note, so long as no default has occurred and is continuing or will occur as a result of or immediately following any such payment under
<br />the terms of the Superior Indebtedness.
<br />In the event of any distribution, division, or application, whether partial or complete, voluntary or involuntary, by operation of law or otherwise, of all
<br />or substantially all of Borrower's assets, or the proceeds of Borrower's assets, in whatever form, to creditors of Borrower or upon any indebtedness
<br />of Borrower, whether by reason of the liquidation, dissolution or other winding -up of Borrower, or by reason of any execution sale, receivership,
<br />insolvency, or bankruptcy proceeding, assignment for the benefit of creditors, proceedings for reorganization, or readjustment of Borrower or
<br />Borrowers properties, then and in such event, (A) the Superior Indebtedness shall be paid in full before any payment is made upon the
<br />Subordinated Indebtedness, and (B) all payments and distributions, of any kind or character and whether in cash, property, or securities, which
<br />shall be payable or deliverable upon or in respect of the Subordinated Indebtedness shall be paid or delivered directly to Lender for application in
<br />payment of the amounts then due on the Superior Indebtedness until the Superior Indebtedness shall have been paid in full.
<br />Should any payment, distribution, security, or proceeds thereof be received by Beneficiary at any time on the Subordinated Indebtedness contrary
<br />to the terms of this Agreement, Beneficiary immediately will deliver the same to Lender in precisely the form received (except for the endorsement
<br />or assignment of Beneficiary if necessary), for application on or to secure the Superior Indebtedness, whether it is due or not due, and until so
<br />delivered the same shall be held in trust by Beneficiary as property of Lender.
<br />BENEFICIARY'S REPRESENTATIONS AND WARRANTIES. Beneficiary represents and warrants to Lender that: (A) no representations or
<br />agreements of any kind have been made to Beneficiary which would limit or qualify in any way the terms of this Subordination; (B) this
<br />Subordination is executed at Borrowers request and not at the request of Lender; (C) Lender has made no representation to Beneficiary as to the
<br />creditworthiness of Borrower; and (D) Beneficiary has established adequate means of obtaining from Borrower on a continuing basis information
<br />regarding Borrowers financial condition. Beneficiary agrees to keep adequately informed from such means of any facts, events, or circumstances
<br />which might in any way affect Beneficiary's risks under this Subordination, and Beneficiary further agrees that, except as set forth in this
<br />Agreement, Lender shall have no obligation to disclose to Beneficiary information or material acquired by Lender in the course of its relationship
<br />with Beneficiary.
<br />BENEFICIARY WAIVERS. Beneficiary waives any right to require Lender: (A) to make, extend, renew, or modify any loan to Borrower or to grant
<br />any other financial accommodations to Borrower whatsoever; (B) except as required in this Agreement, to make any presentment, protest,
<br />demand, or notice of any kind, including notice of any nonpayment of any Superior Indebtedness secured by Lenders Lien, or notice of any action
<br />or nonaction on the part of Borrower, Lender, any surety, endorser, or other guarantor in connection with the Superior Indebtedness, or in
<br />connection with the creation of new or additional indebtedness; (C) to resort for payment or to proceed directly or at once against any person,
<br />including Borrower; (D) to proceed directly against or exhaust any collateral held by Lender from Borrower, any other guarantor, or any other
<br />person; or (E) to pursue any other remedy within Lenders power.
<br />LENDER'S RIGHTS. Lender may take or omit any and all actions with respect to Lender's Lien without affecting whatsoever any of Lender's rights
<br />under this Subordination. In particular, without limitation, Lender may (A) make one or more additional secured or unsecured loans to Borrower,
<br />provided that any loan secured by the Property shall be subject to the prior written consent of the City Manager of Beneficiary; (B) except as
<br />otherwise set forth in this Agreement, repeatedly alter, compromise, renew, extend, accelerate, or otherwise change the time for payment or other
<br />terms of the Superior Indebtedness or any part of it; (C) take and hold collateral for the payment of the Superior Indebtedness, and exchange,
<br />enforce, waive, and release any such collateral, with or without the substitution of new collateral; (D) release, substitute, agree not to sue, or deal
<br />With any one or more of Borrower's sureties, endorsers, or guarantors on any terms or manner Lender chooses; (E) determine how, when and
<br />what application of payments and credits, shall be made on the Superior Indebtedness; (F) apply such security and direct the order or manner of
<br />sale of the security, as Lender in its discretion may determine, except as expressly limited in this Agreement; and (G) transfer this Subordination to
<br />another party. Notwithstanding the foregoing or anything to the contrary in this Agreement, Lender may not without the prior written consent of the
<br />City Manager of Beneficiary, increase the amount of the Superior Indebtedness (other than pursuant to a Protective Advance permitted by the
<br />Superior Indebtedness documents or applicable law); increase the interest rate; increase or decrease the term of the Superior Indebtedness; or
<br />increase or decrease the amount of any payment due; or alter any other term that would have a materially detrimental effect on Beneficiary.
<br />Beneficiary shall respond in writing to a request for such consent pursuant to this paragraph within thirty (30) days after receipt of Lenders written
<br />request therefor. For purposes of this Agreement, "Protective Advance" shall mean any advance made to correct a failure by Borrower to perform
<br />any of its obligations under the Superior Indebtedness.
<br />BENEFICIARY RIGHTS TO PAYMENT. Beneficiary may accept scheduled payments (but not prepayments) of principal and interest that are
<br />required to be paid under its promissory note, so long as no default has occurred and is continuing or will occur as a result of or immediately
<br />following any such payment under the Superior Loan Documents.
<br />DEFAULT /CURE PERIODS. In the event of any default of Borrower under the Superior Loan Documents, Lender shall deliver to Beneficiary a
<br />copy of any notice delivered to Borrower in connection therewith. In such event, Beneficiary has the right, but not the obligation, to cure the
<br />noticed default by forty-five (45) days after the date Beneficiary receives a copy of the notice of default (the "Beneficiary Cure Period"), and Lender
<br />shall accept such cure by Beneficiary as if it were cured by Borrower, provided that Lender shall have the continuing right to declare and record a
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