AgdaPkt 2019-03-25 Joint SA PFA - Laserfiche WebLink

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6.D. - Page 6 of 19 1. Subordination of Locality Documents. (a) The Locality and Borrower hereby unconditionally subordinate the Locality Documents to the MHSA Permanent Loan Documents, including all extensions, modifications, incremental disbursements of the original amount of the MHSA Permanent Loan if made during construction, or additional advances made thereunder. Hereafter, the MHSA Permanent Loan Documents shall unconditionally be, and remain at all times, liens and encumbrances on the Project prior and superior to the encumbrances of the Locality Documents and to all rights and privileges of the parties thereunder, and the liens and encumbrances of the Locality Documents together with all rights and privileges of the parties thereunder shall hereby be subject to and made subordinate to the liens and encumbrances of the MHSA Permanent Loan Documents. In the event of a judicial or non judicial foreclosure of the MHSA Permanent Loan Documents, the lien of the Locality Documents shall be extinguished. (b) The Agency agrees that it shall provide Locality with a copy of all initial notices of default provided to Borrower under the MHSA Permanent Loan Documents, provided, the Agency shall have no liability to Locality and/or Borrower for its failure to do so, nor shall failure to do so constitute grounds for any restraining order, injunction, or other prohibition against or delay in the Agency's exercise of its remedies under the MHSA Permanent Loan Documents. The Agency shall not record a Notice of Default related to such initial notice during the period ninety (90) days after the date of such initial notice if such notice relates to a nonmonetary default or defaults under the MHSA Permanent Loan Documents. During the term of such period Locality shall have the right, but not the obligation, to cure any nonmonetary default under such initial notice. Notwithstanding the foregoing, if at any time following the date of the initial notice, there shall occur or be continuing a default in the payment of any amount due to the Agency under the MHSA Permanent Loan Documents, the Agency shall have the right to, and in its sole discretion may, record a Notice of Default and proceed to foreclosure based upon any such nonpayment regardless of any extended cure period with respect to nonmonetary defaults. (c) Locality has read, understands and approves the MHSA Permanent Loan Documents and agrees to be bound thereby in the event of its foreclosure or acquisition of the Project. 2. Representations. Locality hereby represents and warrants to the Agency that at the time of execution of this agreement, the Borrower is in substantial compliance with its obligations to the Locality under the terms of the Locality Documents, and Locality has read and understands the MHSA Permanent Loan Documents and agrees that in the event the Agency determines there is a conflict of terms between the MHSA Permanent Loan Documents and Locality Documents, the terms of the MHSA Permanent Loan Documents shall prevail. 3. Attorney's Fees & Costs. If any party shall take any action to enforce or otherwise relating to this Agreement, the prevailing party or parties shall be entitled to recover reasonable attorney's fees and costs from the other party or parties. 4. Amendments. Amendments to this Agreement shall be in writing and signed by all the parties hereto. 5. Governing Law. This Agreement shall be construed in accordance with and be governed by the laws of California. ATTY/AGR/2019.056/MHA WAVERLY PLACE_SHMHP SUBORDINATION AGREEMENT REV: 03-14-19 VR Page 3 of 7 111