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HomeMy WebLinkAbout24340AGREEMENT INFORMATION AGREEMENT NUMBER 24340 NAME/TYPE OF AGREEMENT OMNI CRA & TERRABANK, N.A. DESCRIPTION MORTGAGE SUBORDINATION AGREEMENT/CASA MIA APARTMENTS EFFECTIVE DATE March 31, 2023 ATTESTED BY TODD B. HANNON ATTESTED DATE 3/31/2023 DATE RECEIVED FROM ISSUING DEPT. 4/3/2023 NOTE 2 34o MORTGAGE SUBORDINATION AGREEMENT THIS MORTGAGE SUBORDINATION AGREEMENT ("Agreement") is made as of this St day of MarCA. , 2023, by and among TERRABANK, N.A., a National Banking Association, with its principal office located at 3191 Coral Way, Miami, FL 33145 ("Bank"), and OMNI REDEVELOPMENT DISTRICT COMMUNITY REDEVELOPMENT AGENCY, a public agency and body corporate created pursuant to Section 163.356, Florida Statutes, with a principal office located at 1401 N. Miami Avenue, Miami, FL, 33136 (hereinafter the "CRA" or "Subordinate Lender"), and CASA MIA APARTMENTS, LLC, a Florida limited liability company with its principal office located at 2650 SW 27th Ave Suite 301 Miami, Florida 33133 (hereinafter the "Borrower" or "Project Sponsor"). WITNESSETH: WHEREAS, Borrower has executed and delivered that certain Note ("Note") dated August 11, 2022 in the original principal amount of One Million One Hundred Thousand 00/100 Dollars ($1,100,000.00), made payable to the order of Bank; and WHEREAS, the Note is secured by a certain Mortgage Security Agreement dated as of August 11, 2022, executed by Borrower in favor of Bank to be recorded in Official Record Book 33341, Page 3034, of the public records of Miami -Dade County, Florida (the "First Mortgage"), and constituting a first mortgage lien on that certain property (hereinafter called the "Mortgaged Property" or "Property") located in Miami Dade County, Florida, more particularly described on Exhibit "A" attached hereto and incorporated herein, together with certain additional loan documents (the "First Mortgage Loan Documents"); and WHEREAS, Borrower has executed a second promissory note in favor of Subordinate Lender in the amount of $500,000.00 (the note to Subordinate Lender sometimes referred to as the "Subordinate Loan"), secured by a Second Mortgage and Security Agreement (the "Second Mortgage") on or about the date hereof, to be recorded in the Public Records of Miami Dade County, Florida, which also encumbers the Mortgaged Property; and WHEREAS, Borrower and Subordinate Lender have entered into various other documents and agreements evidencing, securing, guaranteeing, or otherwise delivered in connection with the Second Mortgage on or about even date herewith, including but not limited to the Declaration of Restrictive Covenants for Casa Mia Apartments, LLC, (the "Covenant"), the Disbursement Agreement for Casa Mia Apartments, LLC, the Rent Regulatory Agreement for Casa Mia Apartments ("Rent Regulatory Agreement"), the Promissory Note (CRA Funds) for Casa Mia Apartments, LLC, the Mortgage and Security Agreement For Casa Mia Apartments, LLC, and the Construction Forgivable Project Loan Page 1 of 13 Agreement for Casa Mia Apartments, LLC (collectively, the "Subordinate Loan Documents"), which are all incorporated herein by reference; and WHEREAS, the CRA agrees to subordinate the lien of the Second Mortgage and Subordinate Loan Documents; and WHEREAS, the CRA has the right to purchase the First Mortgage (the "Purchase Option") in the event of a default under the First Mortgage; and WHEREAS, to induce Bank to consent to Borrower granting the Second Mortgage, the Subordinate Lender has agreed to make the representations, warranties, covenants and agreements hereinafter set forth, NOW, THEREFORE, for and in consideration of the sum of TEN AND NO/100 ($10.00) DOLLARS and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Bank, Subordinate Lender and Borrower hereby agree as follows: 1. The foregoing recitals are true and correct and are incorporated herein and by this referenced made a part hereof. 2. Subordinate Lender covenants and agrees with and for the benefit of Bank (and Borrower acknowledges) as follows: (a) The lien and effect of the Second Mortgage, and the indebtedness secured thereby, relating to the property located at 1815 NW 1st Court, Miami, FL 33136 as further described on Exhibit "A," attached hereto and incorporated herein, any UCC-1 financing statements, assignment of leases and rents and other security instruments and documents executed in connection therewith, including any and all disbursements and loans (together with interest thereon) made under or secured by the Second Mortgage and the Subordinate Loan Documents are and shall be subject and subordinate to the First Mortgage, and in all other 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 Borrower under the First Mortgage Loan Documents or for any purpose expressly permitted by the First Mortgage, or (2) constructing, renovating, repairing, furnishing, fixturing or equipping. the Mortgaged Property, with the exception of the Covenant and the Rent Regulatory Agreement (b) Notwithstanding the foregoing or anything to the contrary contained in this Agreement, Bank agrees that other than the First Mortgage loan, which has a current principal balance of ONE MILLION ONE HUNDRED THOUSAND Page 2 of 13 AND 00/100 DOLLARS ($1,100,000.00), further disbursements of funds to Borrower constituting "future advances" pursuant to the terms of the First Mortgage (together with interest thereon) shall not have priority over the Second Mortgage unless such disbursements are made for one or more of the following purposes: (i) to pay taxes, levies or insurance on the Property, (ii) to cure, in whole or in part, any default under the First Mortgage and/or Second Mortgage, (iii) to preserve or protect the value of the Property, (iv) to make tenant improvements, additions, repairs of other improvements to the Property, (v) to provide Borrower with funds to pay interest or any other charges due under the Bank loan, or (vi) to pay closing costs incurred by Borrower in connection with the making of the disbursements described in the foregoing items (i) — (v). (c) Notwithstanding anything to the contrary contained herein or the Subordinate Loan Documents, it is understood and agreed that: (i) the Right of First Refusal of Subordinate Lender shall not apply to the Bank's right to foreclose its First Mortgage or any sale of the Property in connection therewith or arising after a foreclosure as the CRA will have the right to purchase the first mortgage as more particularly described in Section 4 below. (ii) any fines, assessments or other monies levied by Subordinate Lender as may be permitted by the Covenant, the Rent Regulatory Agreement or other Document entered into by Borrower with Subordinate Lender shall at all times be subordinate to the lien of the First Mortgage. 3. Agreement Not to Commence Bankruptcy Proceeding. Subordinate Lender agrees that during the term of this Agreement it will not commence, or join with any other creditor in commencing any bankruptcy proceeding with respect to Borrower, without Bank's prior written notice to the CRA. In addition, if there is a violation of the Rent Regulatory Agreement or Covenant or a violation of the CRA's Loan Documents, Subordinate Lender shall promptly provide written notice thereof to Bank. 4. Subordinate Lender's Exercise of Remedies After Notice to Bank; Bank's Exercise of Remedies after Notice to Subordinate Lender. If a Subordinate Mortgage default occurs and is continuing, Subordinate Lender agrees that it will not commence foreclosure proceedings or exercise any other rights or remedies it may have under the Subordinate Loan Documents with respect to the Mortgaged Property, including, but not limited to accelerating the Subordinate Loan, collecting rents, appointing (or seeking the appointment of) a receiver unless Subordinate Lender has provided Bank with prior written notice and all applicable cure periods under the Subordinate Loan Documents have expired. Additionally, the preceding sentence shall not preclude Subordinate Lender from seeking specific performance or exercising or enforcing all the rights available to Subordinate Lender under the Subordinate Loan documents to enforce covenants and agreements of Borrower relating to income, rent, or affordability restrictions contained in Page 3 of 13 the Rent Regulatory Agreement as well as the use and expenditure of CRA funds in the rehabilitation of property. If a First Mortgage default occurs and is continuing, Bank agrees that it will not commence foreclosure proceedings or exercise any other rights or remedies pursuant to the First Mortgage Loan Documents, including, but not limited to accelerating the First Mortgage, collecting rents, appointing (or seeking the appointment of) a receiver or exercising any other rights or remedies thereunder without prior written notice to Subordinate Lender providing Subordinate Lender with notice of the default and a thirty (30) day cure period (the "Cure Period") wherein Subordinate Lender may cure the Borrower default, and providing Subordinate Lender the right to purchase the First Mortgage (the "Purchase Option") for an amount equal to all outstanding principal, accrued and unpaid interest and permitted advances made by Bank ( the "Loan Purchase Price") pursuant to the First Mortgage Loan Documents. In the event Subordinate Lender elects to exercise its Purchase Option, it shall notify Bank within the aforesaid Cure Period, and tender the Purchase Price thirty (30) days following the Cure Period (the "Closing Date") in exchange for assignment, without warranty or recourse, of the First Mortgage Note, Mortgage and other Loan Documents. In the event Subordinate Lender fails to timely close on or before the Closing Date, the Purchase Option shall expire and be of no further force and effect during the term of the First Mortgage, even in the event Borrower cures the default and the First Mortgage Loan does not proceed to foreclosure. If Subordinate Lender does not elect the Purchase Option nor cure the Borrower default within the Cure Period, the Bank may proceed to exercise all rights and remedies available to Bank under the First Mortgage Loan Documents. Time is of the essence as to all provisions set forth in this subparagraph. 5. 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 Mortgaged Property (collectively, a "Taking"); or the occurrence of a fire or other casualty resulting in damage to all or a portion of the Mortgaged Property (collectively, a "Casualty"), at any time or times when the First Mortgage remains a lien on the Mortgaged Property, if all of the following conditions are met: (i) the Project Sponsor is not in breach or default of any provision of the Mortgage or any other CRA Loan Document; (ii) the Project Sponsor determines that there will be sufficient funds, through condemnation and casualty proceeds and contributions by the Project Sponsor, to (a) restore and repair the Property and the Project to a condition as close as reasonably possible to what previously existed, due consideration given to the portion of the Property and the Project taken, and, (b) meet all operating costs and other expenses, payments for reserves and loan repayment obligations relating to the Project until completion of the restoration and repair of the Property and the Project to a condition as close as reasonably possible to what previously existed, due consideration given to the portion of the Property and the Project taken; and (iii) the Project Sponsor determines that the rental income of the Project, after restoration and repair of the Property and the Project to a condition as close as reasonably possible to what previously existed, due consideration given to the portion of the Property and the Project taken, will be sufficient to meet all operating costs and other expenses, payments for reserves and loan repayment obligations relating to the Project, and (iv) the Project .Sponsor has received the CRA's written concurrence with such determination, the following provisions shall apply: Page 4 of 13 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 Bank's rights under the First Mortgage with respect thereto; and all proceeds received or to be received on account of a Taking or a Casualty, or both, shall be applied to payment of the costs and expenses of repair and restoration in the manner prescribed above. Any proceeds then remaining after complete restoration and then satisfaction in full of the principal of, interest on and other amounts payable under the First Mortgage shall be paid by the Bank to Subordinate Lender and then to Borrower. 6. No Modification of Subordinate Loan Documents. Borrower and 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 Bank 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 Bank under the First Mortgage Loan Documents. The only exception to the foregoing provision is any loan or grant accepted by Borrower that may be utilized to meet Close -Out of the Project as described in CRA Loan Documents. Any amendment of the Subordinate Loan Documents must be consented to in writing by the Bank. 7. Modification of First Mortgage Loan Documents; Refinancing of First Mortgage Indebtedness. Subordinate Lender consents to any agreement or arrangement in which Bank waives, postpones, extends, reduces or modifies any provisions of the First Mortgage Loan Documents, provided however, there shall be no modification of the First Mortgage Loan Documents without the written consent of the Subordinate Lender if such modification would increase the principal amount of the First Mortgage Indebtedness beyond the original principal amount of the First Mortgage indebtedness (excluding any amounts having been advanced by Bank for the protection of its security interest pursuant to the First Mortgage Loan Documents), increase the interest rate of the First Mortgage indebtedness, or decrease the original maturity term of the First Mortgage indebtedness or any modification that will have a material adverse effect on Subordinate Lender. Subordinate Lender further agrees that its agreement to subordinate hereunder shall extend to any new mortgage debt which is for the purpose of refmancing all or any part of the First Mortgage (including reasonable and necessary costs associated with the closing and/or the refinancing) upon written notice being provided; 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 indebtedness, the First Mortgage Note, the First Mortgage, the First Mortgage Loan Documents and Bank shall mean, respectively, the indebtedness related to the refinance loan, the refinance note, the security instrument securing the refinance note, all documents evidencing, securing or otherwise pertaining to the refinance note and the holder of the refinance note, provided however, there shall be no refinancing of the First Mortgage indebtedness without the consent of the Subordinate Page 5of13 Lender if such refinancing would increase the principal amount of the First Mortgage indebtedness beyond the original principal amount of the First Mortgage indebtedness (excluding any amounts having been advanced by Bank for the protection of its security interest pursuant to the First Mortgage Loan Documents or otherwise permitted herein), increase the interest rate of the First Mortgage indebtedness, decrease the original maturity term of the First Mortgage indebtedness, or have any material adverse effect on the Subordinate Lender other than as otherwise permitted herein. 8. Default by Subordinate Lender or Bank. If Subordinate Lender or Bank 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 provide written notice to all parties to this Agreement, allow sufficient cure period (not to exceed thirty (30) days) and shall also have the right to all available legal and equitable relief. 9. 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 acquisition by Bank of title to the Mortgaged Property pursuant to a foreclosure; or (iii) the acquisition by Subordinate Lender of the First Mortgage or title to the Mortgaged 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. Notwithstanding the foregoing, in the event the First Mortgage is refinanced, the term of this Agreement shall continue and the Second Mortgage and Subordinate Loan Documents shall be subordinate to any such indebtedness related to the refinance loan as provided in Section 7 above. 10. Notices. All notices that any of the parties to this Agreement may desire or be required to give hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, with postage prepaid, or delivered by recognized overnight delivery courier service, addressed to the parties as follows: If to Bank: If to Subordinate Lender: Attention: Edgar J. Nieto, Senior Vice President TERRABANK, N.A., 3191 Coral Way, Penthouse 1 Miami, FL 33145 Executive Director: Humberto Gonzalez Omni Redevelopment District Community Redevelopment Agency 1401 North Miami Avenue, Miami Florida, 33136 With Copy To Subordinate Lender's General Counsel: Victoria Mendez General Counsel City Attorney's Office, City of Miami Page 6 of 13 If to Borrower: CASA MIA APARTMENTS, LLC 2650 SW 27th Ave Suite 301 Miami, Florida 33133 With copy to Borrower's Counsel: John L. Marro, Esq. Marro Law, P.A. 950 S. Pine Island Rd. Suite A-150 Plantation, FL 33324 Any party may designate another address (or change its address) for notices hereunder by written notice given pursuant to this paragraph 10. A notice sent in compliance with the provisions of this paragraph 10 shall be deemed given (if not sooner received) on the third business day next succeeding the day on which it is deposited in the United States mails, or on the day following receipt by recognized overnight courier delivery service, if so delivered. 11. In the event of, any inconsistency by and between any provision, covenant and/or condition of the Second Mortgage and any provision, covenant and/or condition of this Agreement, the subject provision, covenant and/or condition of this Agreement shall prevail and take precedence over any such inconsistent provision, covenant and/or condition of the Second Mortgage. 12. Entire Agreement. The covenants and agreements made by the parties herein are absolute and irrevocable. This Agreement constitutes the entire agreement and understanding between Bank and Subordinate Lender with respect to the subject matter hereof. 13. Subordinate Lender and Borrower hereby represent and warrant to Bank that, as to itself, it has full right, power and authority to execute and deliver this Agreement. 14. Whenever used in this Agreement, words in the plural include the singular, words in the singular include the plural, and pronouns of any gender include all other genders. The Section headings or captions appearing in this Agreement are for convenience only, are not part of this Agreement, and are not to be considered in interpreting this Agreement. 15. Attorney's Fees. In the event of any dispute or litigation arising from or related to this Agreement (including any appellate, administrative or bankruptcy proceedings), each party shall bear their respective attorney's fees and costs in connection therewith. 16. Time is of the essence under this Agreement. Page 7 of 13 17. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with the laws of the State of Florida. 18. Jurisdiction. The parties submit to the jurisdiction of the state and federal courts of the State of Florida for any litigation or proceeding brought with respect to this Agreement and agree that the venue of any such action or proceeding may be laid in Miami Dade County, Florida, and waive any claim that the same is an inconvenient forum. 19. Assignment/Successors. This Agreement shall be binding upon Borrower, Bank and Subordinate Lender and shall inure to the benefit of the respective legal successors and assigns of Bank and Subordinate Lender. 20. No Partnership or Joint Venture. Bank's permission for the placement of the Subordinate Loan Documents does not constitute Bank as a joint venturer or partner of Subordinate Lender. Neither party hereto shall hold itself out as a partner, agent or Affiliate of any other party hereto. 21. Counterparts. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, and such counterparts shall together constitute but one and the same Agreement. The parties shall be entitled to sign and transmit an electronic signature of this Agreement (whether by facsimile, PDF or other email transmission), which signature shall be binding on the party whose name is contained therein. Any party providing an electronic signature agrees to promptly execute and deliver to the other parties an original signed Agreement upon request. 22. Further Assurances; UCC Financing Statements. Subordinate Lender, Bank and Borrower each agree, at 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 Loan Documents are subordinate to the lien, covenants and conditions of the First Mortgage Loan Documents, or to further evidence the intent of this Agreement. Bank is hereby authorized to file any and all UCC financing statement amendments required to reflect the priority of the First Mortgage Indebtedness. 23. Amendment. This Agreement shall not be amended except by written Instrument signed by all parties hereto. 24. WAIVER OF TRIAL BY JURY. THE PARTIES KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS, (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE PARTIES. Page 8of13 (Signature Pages Follow) Page 9 of 13 IN WITNESS WHEREOF, this Subordination Agreement has been executed by the CRA, BANK and Project Sponsor Borrower on the date first above written. BANK: TERRABANK, N.A., a National Banking Association By: I Print : me: Zi k Title: Ev/ .-' C Lo Date: Address: ACKNOWLEDGMENT STATE OF FLORIDA COUNTY OF MIAMI-DADE ) THE FOREGOING INSTRUMENT was acknowledged before me by means of physical presence or O online notarization on this 027t day of A-frlie-, 2023 by /4, 4ZI the �/� ea% j'e0i,J4 W' of TERRABANK, N.A., a National Banking Association , who is personally known to me or who produced a as identification. My Commission Expires: TERESITA MENENDEZ Notary Public - State of Florida e Commission # HH 297976 ;oF.... My Comm. Expires Aug 31, 2025 Bonded through National Notary Assn. Signature of No ary Public, State of Florida r Printed Name of No ary Public Page 10 of 13 IN WITNESS WHEREOF, this Subordination Agreement has been executed by the CRA, BANK and Project Sponsor Borrower on the date first above written. ATTEST: 'Todd Hannon, Date: APPROVED AS TO FORM AND CORRECTNESS: endez XEh General Counsel APPROVED BY RISK MANAGEMENT: Ann -Marie Sh Director of Ris e Management CRA: OMNI REDEVELOPMENT DISTRICT COMMUNITY REDEVELOPMENT AGENCY of the City of Miami, a public agency and body corporate created pursuant to Section 163.356, Florida Statutes ("CRA") By: H erto Gonzalez, Executive Director Page 11 of 13 IN WITNESS WHEREOF, this Subordination Agreement has been executed by the CRA, BANK and Project Sponsor Borrower on the date first above written. PROJECT SPONSOR: CASA MIA APARTMENTS LLC, a Florida limited liability company By: SOUTHEAST REAL ESTATE INVESTMENTS LLC, a Florida limited liability company Its Manager WITNESS S: tbame:0' \e Pl `rlc--\ bVaL.,`4 V Print Name: GA1OLiA & SIa-VA CASA MIA APARTMENTS LLC Address: Attn: CARLOS PARRA 2650 SW 27th Av Suite 301 Miami, Florida 33133 ACKNOWLEDGMENT STATE OF FLORIDA ) COUNTY OF MIAMI-DADE ) THE FOREGOING INSTRUMENT was acknowledged before me by means of 014sical presence or O online notarization on this day of K.G-rcli"- ; 2023 by Carlos G. Parra, as Manager of SOUTHEAST REAL ESTATE INVESTMENTS LLC, a Florida limited liability company, the Manager of CASA MIA APARTMENTS, LLC, a Florida limited liability company, on behalf of such limited liability company, who is personally known to me or who produced a identification. • My Commission Expires: KRIi3TEN GAU AOHEi� Notary Publk State of Florida Comm# HH210559 Expires 12/21/2025 as Signatur of o ary Public, State of Florida CriUCCI-ef/ Printed Name of Notary PublicU Page 12 of 13 `2-1-13 LI 0 EXHIBIT "A" Legal Description: DESCRIPTION: LOT 11 LESS THE E 25FT BLOCK 23 OF WADDELLS ADDITION TO MIAMI, ACCORDING TO THE PLAT THEREOF AS RECORDED IN PLAT BOOK B PAGE 53 OF THE PUBLIC RECORDS OF MIAMI DADE COUNTY, FLORIDA. Page 13 of 13