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HomeMy WebLinkAboutProperty #: 9566-1 - 1/7/2015 C-9566-1 CITY CLERK 01/07/2015 ORIGINAL CITY OF GLENDALE, ARIZONA SUBORDINATION AGREEMENT (Tanner Terrace Apartments MCR 2015-0173946) (PLEASE DO NOT REMOVE - THIS IS PART OF THE OFFICIAL DOCUMENT) OFF ICI-AL- RECORDS OF MARICOPA COUNTY RECOR)ER HELEN PURCELL 2015-0173946 03/16/15 12:35 PN Prepared by: PAPER RECORDING 0194597-30-7-6 Thomas Kelly Derryberry moi Isar Peaseley& Derryberry PLC 504 Autumn Springs Ct, Suite 26 Franklin,TN 37067 After Recording return to; U,,S..Department of Housing and Urban Development Attn: Legal Department One North Central, Suite 60Q Phoenix,Arizona 85004-4414 IntraWeat Tate Agency, Inc /H0003of Subordination Agreement (ARIZONA) Owner: Tanner Terrace, Inc Lender: Walker and Dunlop, LLC Subordinate Lender: City of Glendale, Arizona Project Name: Tanner Terrace Apartments FHA Case No. 123-11235 DO NOT REMOVE - PART OF OFFICIAL DOCUMENT i Subordination Agreement 'U.S.Department of Housing OMB Approval No:2502-0598 and Urban Development (Exp.06/3012017) Office of Housing Public Reporting Burden for this collection of information is estimated to average 0'5 hours per response,including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.Response to this request for information is required in order to receive the benefits to be derived.This agency may not collect thisinformation, and you are not required to complete this form unless it displays a currently valid OMB control number.While no assurance of confidentiality is pledged to respondents,HUD generally discloses this data only in response to a Freedom of Information Act request. Project Name: Tanner Terrace Apartments HUD Project No: 123-11235 THIS SUBORDINATION AGREEMENT ("Agreement") is entered into this 1st day of March, 2015 by and among (i) City of Glendale, a municipal corporation located in Arizona ("Senior Lender"), (ii) Walker & Dunlop. LLC a limited liability company organized and existing under the laws of State of Delaware ("Subordinate Lender"), and (iii)Tanner Terrace, Inc., an Arizona non-profit corporation ("Borrower"). Recitals WHEREAS, Borrower is the owner of that certain 156 unit residential rental development known as "Tanner Terrace Apartments" ("Project"), located at 7138 N. 45th Avenue, City of Glendale. State or Arizona.Senior Lender has made or is making the senior mortgage loan as described on Schedule A hereto ("Senior Indebtedness")to Borrower in the original principal amount(s) as shown on Schedule A, evidenced by the Note described in Schedule A ("Senior Note"), and secured by, among other things, the Security instrument as,described in Schedule A (collectively, "Senior Security Instrument"), covering the property described in Exhibit A attached hereto together with all improvements thereon and personal property used relative thereof, all as more particularly described in the Senior Security Instrument ("Mortgaged Property"). WHEREAS, Subordinate Lender made a subordinate loan to Borrower in the amount of Forty Seven Thousand Two Hundred and Thirty Eight and 00/100 Dollars $47,238.00 ("Subordinate Loan"), pursuant to the Subordinate Loan Documents as defined below, and secured by, among other things, a mortgage lien against the Mortgaged Property. WHEREAS, Senior Lender, with the approval of the U.S. Department of Housing and Urban Development ("HUD"), has agreed to permit Subordinate Lender to keep the Subordinate Loan outstanding and maintain a subordinate mortgage lien against the Mortgaged Property subject to,all of the conditions contained in this Agreement and in accordance with Program Obligations. "Program Obligations" means (1) all applicable statutes and any regulations issued by the Secretary pursuant thereto that apply to the Project, including all amendments to such statutes and regulations, as they become effective, Subordination Agreement HUD-92420M (06/14) 2 except that changes subject to notice and comment rulemaking shall become effective only upon completion of the rulemaking process, and (2) all current requirements in HUD handbooks and guides, notices, and mortgagee letters that apply to the Project, and all future updates, changes and amendments thereto, as they become effective, except that changes subject to notice and comment rulemaking shall become effective only upon completion of the rulemaking process, and provided that such future updates, changes and amendments shall be applicable to the Project only to the extent that they interpret, clarify and implement terms in this Agreement rather than add or delete provisions from such document. Handbooks, guides, notices, and mortgagee letters are available on HUD's official website: (htto://www.hud.00v/offices/adm/hudclips[ndex.cfm, or a successor location to that site). NOW, THEREFORE, in order to induce Senior Lender to permit Subordinate Lender to keep outstanding the Subordinate Loan to Borrower and to place a subordinate mortgage lien against the Mortgaged Property, and in consideration thereof, Senior Lender, Subordinate Lender and Borrower agree as follows: 1. Definitions. In addition to the terms defined in the Recitals to this Agreement,for purposes of this Agreement the following terms have the respective meanings set forth below: (a) "Affiliate"is defined in 24 C.F.R. 200.215, or any successor regulation. (b) "Bankruptcy Proceeding" means any bankruptcy, reorganization, insolvency, composition, restructuring, dissolution, liquidation, receivership, assignment for the benefit of creditors, or custodianship action or proceeding under any federal or state law with respect to Borrower, any guarantor of any of the Senior Indebtedness, any of their respective properties, or any of their respective partners, members, officers, directors, or shareholders. (c) "Borrower" means all entities identified as "Borrower" in the first paragraph of this Agreement, together with any successors, heirs, and assigns (jointly and severally). Borrower shall include any entity taking title to the Mortgaged Property, whether or not such entityassumes the Senior Note, provided that the term "Borrower" shall not incude Senior Lender in the event that Senior Lender may acquire title to the Mortgaged Property. Whenever the term "Borrower" is used herein, the same shall be deemed to include the obligor of the debt secured by the Senior Security Instrument. (d) "Business Day" means any day other than Saturday, Sunday or any other day on which Senior Lender or HUD is not open for business. (e) "Covenant Event of Default" is defined in the Senior Security Instrument. (t) "Entity"means an estate,trust, partnership, corporation, limited liability company, limited liability partnership,governmental department or agency or any other entity which has he legal capacity to own property. (g) "Monetary Event of Default" is defined in the Senior Security Instrument. Subordination Agreement HUD-92420M (06/14) 3 (h) "Non-Project Sources" means any funds that are not derived from Project Sources. (I) "Project Sources" means the Mortgaged Property (as defined in the Senior Security Instrument), any proceeds of the Senior loan, and any reserve or deposit made with Senior Lender or any other party as required by HUD in connection with the Senior loan. iJ "Senior Indebtedness" means all present and future indebtedness, obligations, and liabilities of Borrower to Senior Lender under or in connection with the Senior loan or Senior Loan Documents. (k) "Senior Lender" means the Entity named as such in the first paragraph on page 1 of this Agreement, its successors and assigns. (I) "Senior Loan Documents" means the Senior Note, the Senior Security Instrument, and the Regulatory Agreement between Borrower and HUD, as such documents may be amended from time to time and all other documents at any time evidencing, securing, guaranteeing, or otherwise delivered in connection with the Senior Indebtedness. (m) "Senior Security Instrument Default"means a "Monetary Event of Default" or a "Covenant Event of Default" as defined in the Senior Security Instrument. (n) "Subordinate Indebtedness" means all present and future indebtedness, obligations, and liabilities of Borrower to Subordinate Lender under or in connection with the Subordinate Loan or the Subordinate Loan Documents, (o) "Subordinate Lender" means the Entity named as such in the first paragraph on page 1 of this Agreement. (p) "Subordinate Loan Documents" means the Subordinate Note,the Subordinate Mortgage,and all other documents at any time evidencing, securing, guaranteeing, or otherwise delivered in connection with the Subordinate Indebtedness, as identified in Exhibit B. (q) "Subordinate Loan Enforcement Action" means the acceleration of all or any part of the Subordinate Indebtedness, the advertising of or commencement of any foreclosure or trustee's sale proceedings, the exercise of any power of sale, the acceptance of a deed or assignment in lieu of foreclosure or sale, the collecting of rents, the obtaining of or seeking of the appointment of a receiver,the seeking of default interest, the taking of possession or control of any of the Mortgaged Property, the commencement of any suit or other legal, administrative, or arbitration proceeding based upon the Subordinate Note or any other of the Subordinate Loan Documents, the exercising of any banker's lien or rights of set-off or recoupment, or the taking of any other enforcement action against Borrower, any other party liable for any of the Subordinate Indebtedness or obligated under any of the Subordinate Loan Documents, or the Mortgaged Property. (r) "Subordinate Mortgage Default" means any act, failure to act, event, conditions, or occurrence which allows (but for any contrary provision of this Subordination Agreement HUD-92420M(06/14) 4 Agreement), or which with the giving of notice or the passage of time, or both, would allow (but for any contrary provision of this Agreement), Subordinate Lender to take a Subordinate Loan Enforcement Action. (s) "Surplus Cash" is defined herein to mean the same as that term is defined in the Regulatory Agreement between Borrower and HUD. 2. Permission to Allow Mortgage Lien Against Mortgaged Property. Senior Lender consents, subject to the provisions of this Agreement, to the Subordinate Mortgage and other recorded Subordinate Loan Documents against the Mortgaged Property (which are subordinate in all respects to the lien of the Senior Security Instrument) to secure Borrower's obligation to repay the Subordinate Note and all other obligations, indebtedness and liabilities of Borrower to Subordinate Lender under and in connection with the Subordinate Loan. Such consent is subject to the condition that each of the representations and warranties made by Borrower and Subordinate Lender in Section 3 are true and correct on the date of this Agreement. If any of the representations and warranties made by Borrower and Subordinate Lender in Section 3 are not true and correct on the date of this Agreement, the provisions of the Senior Loan Documents applicable to unpermitted liens on the Mortgaged Property shall apply. 3. Borrower's and Subordinate Lender's Representations and Warranties. Borrower and, with respect to subsections (a) through (d) below, Subordinate Lender each make the following representations and warranties to Senior Lender. (a) Subordinate Loan Documents.The Subordinate Loan is evidenced by the Subordinate Note and is secured by the Subordinate Mortgage. (b) Terms of the Subordinate Loan. The original principal amount of the Subordinate Note is$47.238.00. Interest on the Subordinate Note accrues monthly at the rate of N/A% per annum. The Subordinate Note is due and payable in full on April 10, 2019, ("Maturity"). The principal of tha - - • . The promissory note evidencing the Subordinate Note obligates Borrower to make payments as follows: N/A. subject to available Surplus Cash. As long as HUD is the insurer or holder of the Senior Note on FHA Project No.123-11235, any payments due from project income under the Subordinate Note shall be payable only(i)from permissible distributions from Surplus Cash of the Project; but in no event greater than seventy-five percent (75%) of the total amount of Surplus Cash; or(ii)from monies Subordination Agreement HUD-92420M (06/14) 5 received from Non-Project Sources. No prepayment of the Subordinate Note shall be made until after final endorsement by HUD of the Senior Note, unless such prepayment is made from Non-Project Sources and is approved in writing by HUD. The restriction on payment imposed by this paragraph shall not excuse any default caused by the failure of the Borrower to pay the indebtedness evidenced by the Subordinate Note. (c) Relationship of Borrower to Subordinate Lender. Subordinate Lender is not an Affiliate of Borrower. (d) Term. The term of the Subordinate Note does not end before the term of the Senior Note. (e) Subordinate.Loan Documents. The executed Subordinate Loan Documents are substantially in the same forms as those submitted to, and approved by, HUD prior to the date of this Agreement. Upon execution and delivery of the Subordinate Loan Documents, Borrower shall deliver to Senior Lender an executed copy of each of the Subordinate Loan Documents, certified to be true, correct and complete. (f) Senior Loan Documents. The executed Senior Loan Documents are the same forms as approved by HUD prior to the date of this Agreement. Upon execution and delivery of the Senior Loan Documents, Borrower shall deliver to Subordinate Lender an executed copy of each of the Senior Loan Documents, certified to be true, correct and complete. 4. Deliveries. Borrower shall submit the following items to Senior Lender and HUD: (a) Title Evidence. Evidence of title (title policy or title policy endorsement, as appropriate) insuring the lien of the Senior Security instrument which insures that (i)the lien of the Subordinate Mortgage is subordinate to the lien of the Senior Mortgage, and (ii) this Agreement has been recorded among the applicable land records. (b) Certification. A certification from Borrower and Subordinate Lender to HUD that the Subordinate Loan Documents do not contain any changes from the Subordinate Loan Documents submitted to, and approved by, HUD, before the date of this Agreement. (c) Loan Documents. A complete set of the Subordinate Loan Documents. 5. Terms of Subordination. Subordination Agreement HUD-92420M (0611-4), 6 (a) Agreement to Subordinate. Senior Lender and Subordinate Lender agree that: (i) the indebtedness evidenced by the Subordinate Loan Documents is and shall be subordinated in right of payment to the extent and in the manner provided in this Agreement,to the prior payment of the indebtedness evidenced by the Senior Loan Documents, and (ii) the Subordinate Mortgage and the other Subordinate Loan Documents are and shall be subject and subordinate in all respects to the liens, terms, covenants and conditions of the Senior Security Instrument and the other Senior Loan Documents and to all advances heretofore made or which may hereafter be made pursuant to the Senior Security Instrument and the other Senior Loan Documents (including but not limited to, all sums advanced for the purposes of(1) protecting or further securing the lien of the Senior Security Instrument, curing defaults by Borrower under the Senior Loan Documents or for any other purpose expressly permitted by the Senior Security Instrument, or (2)constructing, renovating, repairing,furnishing, fixturing or equipping the Mortgaged Property). Subordinate Lender agrees to extinguish and release its lien on any and all Mortgaged Property in the event Senior Lender, HUD, or a designee of either acquires title to the Mortgaged Property pursuant to a deed in lieu of foreclosure. (b) Subordination of Subrogation Rights. Subordinate Lender agrees that if, by reason of its payment of real estate taxes or other monetary obligations of Borrower, or by reason of its exercise of any other right or remedy under the Subordinate Loan Documents, it acquires by right of subrogation or otherwise a lien on the Mortgaged Property which(but for this subsection)would be senior to the lien of the Senior Security Instrument, then, in that event, such lien shall be subject and subordinate to the lien of the Senior Security Instrument. (c) Payments Before Senior Security Instrument Default. Until Subordinate Lender receives a default notice of a Senior Security Instrument Default from Senior Lender, Subordinate Lender shall be entitled to retain for its own account all payments made under or pursuant to the Subordinate Loan Documents provided that such payments are otherwise permitted under the terms of this Agreement. (d) Payments After Senior Security Instrument Default, Borrower agrees that, after it receives notice (or otherwise acquires knowledge)of a Senior Security Instrument Default, it will not make any payments under or pursuant to the Subordinate Loan Documents(including but not limited to principal, interest, additional interest, late payment charges, default interest, attorney's fees, or any other sums secured by the Subordinate Mortgage)without Senior Lenders prior written consent. Subordinate Lender agrees that,after it receives a default notice from Senior Lender with written instructions directing Subordinate Lender not to accept payments from Project Sources on account of the Subordinate Loan, it will not accept any payments under or pursuant to the Subordinate Loan Documents (including but not limited to principal, interest, additional interest, late payment charges, default interest, attorney's fees, or any other sums secured by the Subordinate Mortgage) unless either(i) such payment is being made solely from Non-Project Sources or(ii) such payment is made with Senior Lender's prior written Subordination Agreement HUD-92420M (06/14) 7 consent If Subordinate Lender receives written notice from Senior Lender that the Senior Security Instrument Default which gave rise to Subordinate Lender's obligation not to accept payments has been cured, waived, or otherwise suspended by Senior Lender, the restrictions on payment to Subordinate Lender in this Section 5 shall terminate, and Senior Lender shall have no right to any subsequent payments made to Subordinate Lender by Borrower prior to Subordinate Lender's receipt of a new default notice from Senior Lender in accordance with the provisions of this Section 5(d). (e) Remitting Subordinate Loan Payments to Senior Lender. If, after Subordinate Lender receives a default notice from Senior Lender in accordance with subsection (d) above, Subordinate Lender receives any payments under the Subordinate Loan Documents (other than payments permitted under subsection (d) above), Subordinate Lender agrees that such payment or other distribution will be received and held in trust for Senior Lender and unless Senior Lender otherwise notifies Subordinate Lender in writing, will be promptly remitted, in kind to Senior Lender, properly endorsed to Senior Lender, to be applied to the principal of, interest on and other amounts due under the Senior Loan Documents in accordance with the provisions of the Senior Loan Documents. By executing this Agreement, Borrower specifically authorizes Subordinate Lender to endorse and remit any such payments to Senior Lender, and specifically waives any and all rights to have such payments returned to Borrower or credited against the Subordinate Loan_ Borrower and Senior Lender acknowledge and agree that payments received by Subordinate Lender, and remitted to Senior Lender under this Section 5, shall not be applied or otherwise credited against the Subordinate Loan, nor shall the tender of such payment to Senior Lender waive any Subordinate Mortgage Default whichmay arise from the inability of Subordinate Lender to retain such payment or apply such payment to the Subordinate Loan. (f) 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 Senior Lender's prior written consent. 6. Default Under Subordinate Loan Documents. (a) Notice of Default and Cure Rights. Subordinate Lender shall deliver to Senior Lender a default notice within five Business Days in each case where Subordinate Lender has given a default notice to Borrower. Failure of Subordinate Lender to send a default notice to Senior Lender shall not prevent the exercise of Subordinate Lender's rights and remedies under the Subordinate Loan Documents, subject to the provisions of this Agreement. Senior Lender shall have the opportunity, but not the obligation, to cure any Subordinate Mortgage Default within 60 days following the date of such notice; provided, however that Subordinate Lender shall be entitled, during such 60-day period, to continue to pursue its rights and remedies under the Subordinate Loan Documents, subject to the limitations set forth in Section 6(b) below. Subordination Agreement HUD-92420M (06/14) 8 (b) Subordinate Lender`s Exercise of Remedies After Notice to Senior Lender. If a Subordinate Mortgage Default occurs and is continuing, Subordinate Lender agrees that it will not commence foreclosure proceedings with respect to the Mortgaged Property under the Subordinate Loan Documents 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 or exercising any other rights or remedies thereunder without Senior Lender's prior written consent. However, the preceding sentence shall not(i) limit Subordinate Lender's right to bring an action seeking recovery solely from Non-Project Sources or(ii) preclude Subordinate Lender from exercising or enforcing all the rights available to Subordinate Lender under the Subordinate Loan Documents and/or under applicable law to enforce covenants and agreements of Borrower relating to income, rent or affordability restrictions. 7. Default Under Senior Loan Documents. (a) Notice of Default and Cure Rights. Senior Lender shall deliver to Subordinate Lender a default notice within five Business Days in each case where Senior Lender has given a default notice to Borrower (provided that Senior Lender shall have no liability to Borrower, Subordinate Lender or to any other Entity for failure to timely give such notice). Failure of Senior Lender to send a default notice to Subordinate Lender shall not prevent the exercise of Senior Lender's right and remedies under the Senior Loan Documents, subject to the provisions of this Agreement. Borrower agrees that Subordinate Lender shall have the opportunity, but not the obligation, to cure either a Monetary Event of Default or a Covenant Event of Default within 30 days following the date of such notice, or any time prior to an assignment of the Senior Security Instrument from Senior Lender to HUD, whichever date is later. Subordinate Lender acknowledges that Senior Lender shall be entitled during such period described above to continue to pursue its remedies under the Senior Loan Documents. Subordinate Lender shall have the opportunity to cure a Covenant Event of Default during such period described above so long as there is no Monetary Event of Default under the Senior Loan Documents. All amounts paid by Subordinate Lender to Senior Lender to cure any default under the Senior Loan Documents shall be deemed to have been advanced by Subordinate Lender pursuant to, and shall be secured by the lien of, the Subordinate Mortgage. (b) Cross Default.Subordinate Lender agrees that notwithstanding any contrary provision contained in the Subordinate Loan Documents, a Senior Security Instrument Default shall not constitute a default under the Subordinate Loan Documents if no other default occurred under the Subordinate Loan Documents. 8. Conflict. Borrower, Senior Lender and Subordinate Lender each agrees that,in the event of any conflict or inconsistency between the terms of the Senior Loan Documents, the Subordinate Loan Documents and the terms of this Agreement,the terms of this Subordination Agreement HUD-92420M (06114) 9 Agreement shall govern and control solely as to the following: (a)the relative priority of the security interests of Senior Lender and Subordinate Lender in the Mortgaged Property; and (b)solely as between Senior Lender and Subordinate Lender, the notice requirements, cure rights, and the other rights and obligations which Senior Lender and Subordinate Lender have agreed to as expressly provided in this Agreement. Borrower acknowledges that the terms and provisions of this Agreement shall not, and shall not be deemed to: extend Borrower's time to cure any Senior Security Instrument Default or Subordinate Mortgage Default, as the case may be; give Borrower the right to notice of any Senior Security Instrument Default or Subordinate Mortgage Default, as the case may be other than that, if any, provided, respectively under the Senior Loan Documents or the Subordinate Loan Documents, as applicable; or create any other right or benefit for Borrower as against Senior Lender or Subordinate Lender. 9. Rights and Obligations of Subordinate Lender under the Subordinate Loan Documents and of Senior Lender under the Senior Loan Documents. Subject to each of the other terms of this Agreement,all of the following provisions shall supersede any provisions of the Subordinate Loan Documents covering the same subject matter (a) Protection of Security Interest. Subordinate Lender shall not, without the prior written consent of Senior Lender in each instance, take any action which has the effect of increasing the indebtedness outstanding under, or secured by, the Subordinate Loan Documents, except that Subordinate Lender shall have the right to advance funds to cure Senior Security Instrument Defaults pursuant to Section 7(a) above and advance funds pursuant to the Subordinate Mortgage for the purpose of paying real estate taxes and insurance premiums, making necessary repairs to the Mortgaged Property and curing other defaults by Borrower under the Subordinate Loan Documents. (b) 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 (collec- tively, a "Casualty"), at any time or times when the Senior Security Instrument remains a lien on the Mortgaged Property the following provisions shall apply; (1) 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 Senior Lender's rights under the Senior Loan Documents with respect thereto, and Subordinate Lender shall be bound by any settlement or adjustment of a claim resulting from a Taking or a Casualty made by or with the written consent of Senior Lender; and (2) all proceeds received or to be received on account of a Taking Subordination Agreement HUD-92420M (06/14) l0 or a Casualty, or both, shall be applied (to payment of the costs and expenses of repair and restoration and/or to payment of the.Senior Security Instrument) in the manner determined by Senior Lender in its sole discretion; provided, however, that if Senior Lender elects to apply such proceeds to payment of the principal of, interest on and other amounts payable under the Senior Security Instrument, any proceeds remaining after the satisfaction in full of the principal of, interest on and other amounts payable under the Senior Security Instrument shall be paid to,and may be applied by, Subordinate Lender in accordance with the applicable provisions of the Subordinate Loan Documents.Any proceeds then remaining after the satisfaction in full of the principal of, interest on and other amounts payable under the Subordinate Loan Documents shall be paid by the Subordinate Lender to Borrower. (c) 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 Senior Loan Documents have been paid in full, it will not, without the prior written consent of Senior Lender 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 Senior Lender under the Senior Loan Documents. Any unauthorized amendment of the Subordinate Loan Documents without Senior Lender's consent shall be void ab initio and of no effect whatsoever. 10. Modification of Senior Loan Documents; Refinancing of Senior Indebtedness. Subordinate Lender consents to any agreement or arrangement in which Senior Lender waives, postpones, extends, reduces or modifies any provisions of the Senior Loan Documents, including any provision requiring the payment of money, provided however, there shall be no modification of the Senior Loan Documents without the consent of the Subordinate Lender if such modification would increase the principal amount of the Senior Indebtedness beyond the original principal amount of the Senior Indebtedness (excluding any amounts having been advanced by Senior Lender for the protection of its security interest pursuant to the Senior Loan Documents), increase the interest rate of the Senior Indebtedness,or decrease the original maturity term of the Senior Indebtedness. Subordinate Lender further agrees that its agreement to subordinate hereunder shall extend to any new mortgage debt which is for the purpose of refinancing all or any part of the Senior Indebtedness in accordance with Program Obligations (including reasonable and necessary costs associated with the closing and/or the refinancing); 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 Senior Indebtedness,the Senior Note, the Senior Security Instrument,the Senior Loan Documents and Senior Lender 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 Subordination Agreement HUD-92420M (06/14) 11 otherwise pertaining to the refinance note and the holder of the refinance note, provided however, there shall be no refinancing of the Senior Indebtedness without the consent of the Subordinate Lender if such refinancing would increase the principal amount of the Senior Indebtedness beyond the original principal amount of the Senior Indebtedness (excluding any amounts having been advanced by Senior Lender for the protection of its security interest pursuant to the Senior Loan Documents), increase the interest rate of the Senior Indebtedness,or decrease the original maturity term of the Senior Indebtedness. 11. Default by Subordinate Lender or Senior Lender. If Subordinate Lender or Senior Lender 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 have the right to all available legal and equitable relief. 12. Notices. Each notice, request, demand, consent, approval or other communication (hereinafter in this Section referred to collectively as "notices"and referred to singly as a"notice")which Senior Lender or Subordinate Lender is required or permitted to give to the other party pursuant to this Agreement shall be in writing and shall be deemed to have been duly and sufficiently given if: (a) personally delivered with proof of delivery thereof(any notice so delivered shall be deemed to have been received at the time so delivered); or(b) sent by Federal Express (or other similar national overnight courier) designating next Business Day delivery(any notice so delivered shall be deemed to have been received on the next Business Day following receipt by the courier); or(c) sent by United States registered or certified mail, return receipt requested, postage prepaid,at a post office regularly maintained by the United States Postal Service (any notice so sent shall be deemed to have been received two Business Days after mailing in the United States), addressed to the respective parties as follows: SENIOR LENDER: Walker and Dunlop, LLC 7501 Wisconsin Ave, Suite 1200E' Bethesda, MD 20814 Attn: Kristin Layden With a copy to: Peaseley and Derryberry PLC 504 Autumn Springs Court Franklin, TN 37067 Subordination Agreement HUD-92420M (06/14) 12 HUD: U.S. Department of Housing and Urban Development Director- Office of Multifamily Asset Management Room 6160451 Seventh Street,S.W. Washington, DC 20410 SUBORDINATE LENDER: City of Glendale Community Revitalization Division 5850 W. Glendale Avenue, Suite 107 Glendale, AZ Attn: Assistant City Manager Either party may, by notice given pursuant to this Section, change the person or persons and/or address or addresses, or designate an additional person or persons or an additional address or addresses for its notices, but notice of a change of address shall only be effective upon receipt. 13. General. (a) Assignment/Successors. This Agreement shall be binding upon Borrower, Senior Lender and Subordinate Lender and shall inure to the benefit of the respective legal successors and assigns of Senior Lender and Subordinate Lender. (b) No Partnership or Joint Venture. Senior Lender's permission for the placement of the Subordinate Loan Documents does not constitute Senior Lender 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. (c) Senior Lender's and Subordinate Lender's Consent. Wherever Senior Lender's consent or approval is required by any provision of this Agreement, such consent or approval may be granted or denied by Senior Lender in its sole and absolute discretion, unless otherwise expressly provided in this Agreement.Wherever Subordinate Lender's consent or approval is required by any provision of this Agreement, such consent or approval may be granted or denied by Subordination Agreement HUD-92420M (06/14) 13 Subordinate Lender in its sole and absolute discretion, unless otherwise expressly provided in this Agreement. (d) Further Assurances; UCC Financing Statements.Subordinate Lender, Senior Lender 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 Senior Loan Documents, or to further evidence the intent of this Agreement. Senior Lender is hereby authorized to file any and all UGC financing statement amendments required to reflect the priority of the Senior Indebtedness. (e) Amendment.This Agreement shall not be amended except by written instrument signed by all parties hereto. (f) Governing Law.This Agreement shalt be governed by the laws of the State in which the Mortgaged Property is located, except as, so long as the Senior loan is insured or held by HUD, and solely as to rights and remedies of HUD,federal jurisdiction may be appropriate pursuant to any federal requirements. The State courts, and with respect to HUD's rights and remedies, federal courts, and governmental authorities in the State in which the Mortgaged Property is located,shall have exclusive jurisdiction over all controversies which shall arise under or in relation to the Subordinate Loan Documents. Borrower irrevocably consents to service,jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might beentitled by virtue of domicile, habitual residence or otherwise. (g) Severable Provisions.If any provision of this Agreement shall be invalid or unenforceable to any extent,then the other provisions of this Agreement shall not be affected thereby and shall be enforced to the greatest extent permitted. by law. (h) 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 Senior Loan Documents; (H) the payment of all of the principal of, interest on and other amounts payable under the Subordinate Loan Documents, other than by reason of payments which Subordinate Lender is obligated to remit to Senior Lender pursuant to Section 5 hereof; (iii) the acquisition by Senior Lender of title to the Mortgaged Property pursuant to a foreclosure; or (iv)the acquisition by Subordinate Lender of 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 Senior Indebtedness is refinanced, the term of this Agreement shall continue and the Subordinate Indebtedness and Subordinate Loan Documents shall be subordinate to any such indebtedness related to the refinance loan as provided in Section 10 above. (i) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be considered an original for all purposes; provided, however, that all such counterparts shall together constitute one and the same instrument. Each signatory below hereby certifies that each of their statements and representations contained in this Agreement and all their supporting documentation thereto are true, accurate, and complete. This Agreement has been made, presented, and delivered for the purpose of influencing an official action of HUD in insuring the Loan, and may be relied upon by HUD as a true statement of the facts contained therein. IN WITNESS WHEREOF,the parties hereto have executed this Agreement as of the day and year first written above. See Counterpart Signature Pages SENIOR LENDER: By: Walker and Dunlop, LLC Name: Kristin G. Layden Title: Assistant Vice President SUBORDINATE LENDER: By: City of Glendale Name: Brenda S. Fischer Title: City Manager BORROWER: By: Tanner Terrace, Inc. Name: L.C. DeMon Carey Title: Vice President Warning: Any person who knowingly presents a false, fictitious, or fraudulent statement or claim in a matter within the jurisdiction of the U.S. Department of Housing and Urban Development is subject to criminal penalties, civil liability,and administrative sanctions. SENIOR LENDER Walker&Dunlop, LLC, a Delaware limited liability company : r Kristin G. Layden, Assistant 4rice President STATE OF TENNESSEE COUNTY OF WILLIAMSON The foregoing instrument was acknowledged before me on this day of March 2015,by Kristin G. Layden,in her capacity as the Assistant Vice President of Walker&Dunlop, LLC,a Delaware limited liability company,on behalf of said limited liability company(Lender). MY COMMISSION EXPIRES O$/ z z •N` My commission expires: MARCH 10, 2018 z: _coz : x rn 347 r. 5 Gam-. m Pte: V /Len-ea iet• L NOTARY PUB1•lIC, ST LARGE SUBORDINATE LENDER CITY OF GLENDALE,an Arizona muni? srporation Brenda S. Fischer City Manager ATTEST: 7 Pam Hanna, City Clerk (SEAL) APPROVED AS TO FORM: •' Mic'�I D. s ailey City A orney an Arizona corporation By: Its: STATE OF ARIZONA ) ) ss. County of Maricopa ) SUBSCRIBED AND SWORN to before me this q day of Jav}uizntj 201 a by Brehd a S, FI her, em �1ann Q Y ,the Developer who signed the above document. Notary Public My Commission Expires: _ ALiCIAMULLER acv, tI � Zoll �s✓�' . , cgttgs BORROWER Tanner Terrace, Inc., an Arizona nonprofit corporation By _Io ,0/ /r. ._ 3%. Name: LC'.DeMon Care Its: Vice President STA I h OF ARIZONA ) )ss. County of ) SUBSCRIBED AND SWORN to before me this SA day of March 201A, by 4-.0 Deni /14-g sy ,the Developer who signed the above document. 'rotary Public My Commission Expires: � � ��J�e1 CHARTRESE C. PRUITT A member 2 ' P6 he a Notary Public-Arizona �� Mericopa Caumy { *,' + My Commission Expires November 28.2018 SCHEDULE A SENIOR NOTE AND INDEBTEDNESS DESCRIPTION Promissory Note Deferred Loan between Tanner Terrace, Inc. and the City of Glendale dated April 10, 2009 in the amount of$47,238.00 and due and payable"within 10 years from the date of this Note" is attached as Exhibit B hereto. EXHIBIT A DESCRIPTION OF THE PROPERTY THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF MARICOPA, STATE OF ARIZONA,AND IS DESCRIBED AS FOLLOWS: The North Seven-Tenths of the Northeast quarter of the Southwest quarter of the Southeast quarter of Section 4,Township 2 North,Range 2 East of the Gila,and Salt River Base and Meridian, Maricopa County,Arizona; Except the East 30 feet thereof. APN: 147-09-01TA EXHIBIT B Subordinate Loan Documents 1. Promissory Note Deferred Loan between Tanner Terrace, Inc.and the City of Glendale dated April 10,2009; 2. Deed of Trust and Assignment of Rents between Tanner Terrace, Inc.and the City of Glendale Subordination Agreement HUD-92420M (06/14) OFFICIAL RECORDS OF 1 MARICOPA COUNTY RECORDER K lei b i (1j ' HELEN PURCELL , 20090322156 04/10/2009 03:36 ELECTRONIC RECORDING When recorded,mall to: CITY OF GLENDALE Community Revitalization PNTANNERTER-2-1-1-- 6829 North se Drive,Suite 104 sarabiam Glendale,AZ 85301 PROMISSORY NOTE DEFERRED LOAN Loan Amount: $_47,238.00 Glendale, Arizona Date: FOR VALUE RECEIVED, the undersigned jointly and severally promise(s) to pay to the order of the City of Glendale, a municipal corporation of the state of Arizona (City), or its successors,the principal sum of Forty-Seven Thousand,Two Hundred Thirty-Eght Dollars and 00/100 ($47,238.00). This Note is made on a 10-year Deferred Payment, non-interest bearing basis on and is secured by a Deed of Trust. This Note shall become due and payable upon any transfer,voluntary, involuntary, or by operation of law, of the Property identified in the Deed of Trust within ten years from the date of this Note, or at any time within ten years from the date of this Note undersigned ceases to occupy or use the property to provide services to low or moderate income youth. This Note is secured by a Deed of Trust executed by the undersigned naming the City of Glendale as Beneficiary; which Deed of Trust and this Note are security for the obligations of the undersigned contained in the contract for(Exterior Lighting Upgrade & Utility Shut Off Valves Proiect)executed by the parties on (October 29,2007). The amount due at such time shall be the amount of the current fair market value of the property less, any portion attributable to non-Community Development Block Grant funds involved in the rehabilitation improvements to the real property. The current fair market value of the property shall be established by independent appraisal. The portions of fair market value attributable to CDBG and non-CDBG funds shall be established at completion of the rehabilitation improvements through a subsequent appraisal. Appraisals completed to determine such values shall be at the sole cost and expense of the City. If at the end of the term of this Promissory Note, the undersigned has continuously provided the services and complied with the provisions of the above referenced subrecipient agreement, the City shall consider the obligations of this Note to have been met and shall consider its security interest in the property to be released to the undersigned. Should default be made in the payment of any amount when due, or should the undersigned default on any obligation owed to the City under the terms of this Promissory Note or the Deed of Trust providing security, therefore, the whole sum of principal shall become immediately due and payable at the option of the holder of this Note. If suit or action is instituted by City to recover on this Note, (Tanner Properties, Inc., DBA Tanner Terrace) agrees to pay reasonable attomey's fees and costs in addition to the amount due on the Note. Promissory Note/Deferred Loan 1 111111M Mir_ 20090322156 y 1 1 1 , Diligence, demand, protest and notice of demand and protest are hereby waived and the undersigned hereby waives, to the extent which otherwise would apply to the debt evidenced by this Note. Consent is hereby given to the extension of time of payment of this Note, without notice. The undersigned reserves the right to repay at any time all of the principal amount of this Note in a single payment without the penalties, discount or premiums. IN WITNESS WHEREOF, this Note and Deed of Trust securing the Note, have been duly executed by the undersigned, as of the date above written. `` un� Com - Executive Director (Tanner Properties Inc., DBA Tanner Terrace) STATE OF ARIZONA ) )ss County of Maricopa ). 2 11�__ BE IT REMEMBERED, that on this a s day of � tp_dx,Kln 2008 , before me, the dens ned, a Notary P f in and ,for said County and State, personally appeared the within named -a 1p known to me to be the identical individuals) described in and who executed the within Loan and Note and acknowledged to me the said individuals) executed the same freely and voluntarily. IN TESTIMONY WHEREOF, I have hereunto set my hand and a/ e• by official seal the day and year above written. «: y .1W - ,. . + _ : . Ali Sf / MMA WALKER iMAL COUNTY wire , Deputy City ; ag City of Glen, ,e STATE OF ARIZONA ) )ss County of Maricopa ) > � +id BE IT REMEMBERED, that on this '5" day of_%Tani i n i u.N 200L before me, the rr��dersigned, a Notary Pubic in�and for said County and State, persoAally appeared the within named /undersigned, C1:. T34) C X > , known to me to be the identical individual(s) described in and who executed the in Loan and Note and acknowledged to me the said individual(s)executed the same freely and voluntarily. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed by official seal the day and year above written. j�� ,. OFFICIAL SEAT. A . d�` Ii 4 1 ,(-� '"� TIFFANY A.HUSKEY Nota blit '� _"OY ( N9rARY WBUC-Stata of AiY i ,.r.:-.3);)' MARICOPA CaXINTY • My Eanm,Foirua Alt,21,2011 Promissory Note!Deterred Loan 2 - OFFICIAL RECORDS OF MARICOPA COUNTY RECORDER HELEN PURCELL 20090322122 04/10/2009 03:36 ELECTRONIC RECORDING When recorded,mail to: CITY OF GLENDALE Community Revitalization DOTTANNERTER-7-1-1-- 6829 North 58t Drive,Suite 104 Yorlcm Glendale,AZ 85301 DEED OF TRUST AND ASSIGNMENT OF RENTS DATE: TRUSTOR: Tanner Properties Inc., DBA Tanner Terrace ADDRESS: 4420 South 18 Place Phoenix, Arizona 85040-2467 BENEFICIARY: City of Glendale ADDRESS: 6829 North SS i Drive, Suite 104 Glendale, Arizona 85301 TRUSTEE: Land America Lawyers Title ADDRESS: 2152 South Vineyard, Suite 106 Mesa,Arizona 85210 PROPERTY in Maricooa County, State of Arizona, described as: See the Legal Description set Forth in"Attachment A" and Incorporated by this Reference This Deed of Trust is made between the Trustor, Trustee and Beneficiary above,named, WITNESSETH: That Trustor irrevocably grants and conveys to Trustee in Trust, with Power of Sale, the above described real property, together with: (1) All buildings, improvements and fixtures now or hereafter placed thereon; (2) all existing leases, and all futureleases executed with respect to such property; (3) all rents, issues, profits and income thereof (all of which are hereinafter called "property income'); (4) all classes of property now, or at any time hereafter, attached to or used in any way in connection with the use, operation or occupancy of such property; (5) all property, rights, permits and privileges now or hereafter owned by Trustor or now or hereafter appurtenant to such property, which entitle Trustor or such property to receive water or electrical power for use thereon; all property granted, transferred and assigned to Trustee hereunder is hereafter referred to as the °property," and Trustor warrants that it is well and truly seized of a good and marketable title in fee simple to the real property hereby conveyed; that the title to all property conveyed by this Deed of Trust is clear, free and unencumbered, and Trustor shall forever warrant and defend the same unto Beneficiary, its need of Trust and Assignment of Rents 1 20090322122 • successors and assigns, against all claims whatsoever; SUBJECT, HOWEVER, to the right, power, and authority hereinafter given to and conferred upon Beneficiary to collect and apply such property income; AND SUBJECT TO any easements and restrictions listed in a schedule of exceptions to coverage in any title insurance polity insuring Beneficiary's interest in the property. FOR THE PURPOSE OF SECURING: (a) Performance of each agreement of Trustor herein contained. (b) Payment of the indebtedness evidenced by promissory note or notes of even date herewith,and any extension or renewal thereof, in the principal sum of Forty-Seven Thousand, Two Hundred Thirty fight Dollars and 001100 ($47,238.00), executed by Trustor in favor of Beneficiary or order; Payment of additional sums and interest thereon which may hereafter be loaned to Trustor, or his successors or assigns, when evidenced by a promissory note or notes that are secured by this Deed of Trust. A. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES: 1. To keep said property in good condition and repair; not to remove or demolish any building thereon; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon, and to pay when due all claims for labor performed and materials furnished therefor, to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon; not to commit or permit waste thereof; not to commit, suffer, or permit any act upon said property in violation of law;and to do all other acts which from the character or use of said property may be reasonably necessary,the specific enumerations herein not excluding the general. 2. To keep all improvements now or hereafter erected on said property continuously insured against loss by fire or other hazards specified by Beneficiary in an amount not less than the total obligation secured hereby. All policies shall be held by Beneficiary and be in such companies as Beneficiary may approve and have loss payable first to Beneficiary, as his interest may appear and then to Trustor. The amount collected under any insurance policy may be applied upon any indebtedness hereby secured and in such order as Beneficiary may determine or at option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default hereunder nor cause discontinuance of any action that may have been or may thereafter be taken by Beneficiary or Trustee because of such default. 3. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all costs and expenses of Beneficiary or Trustee, including cost of evidence of title and attorneys fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear or be named,and in any suit brought by Beneficiary to enforce this Deed of Trust 4. To pay: before delinquent, all taxes and assessments affecting said property;when due, all encumbrances, charges and liens, on said property or any part thereof,which appear to be prior or superior hereto;all costs, fees, and expenses of this Trust, including, without limiting the generality of the foregoing, the fees of Trustee for issuance of any Deed of Partial Release and Partial Reconveyance or Deed of Release and Full Reconveyance and all lawful charges, costs, and expenses in the event of reinstatement of, following default in, this Deed of Trust or the obligations secured hereby. Deed of Trust and Assignment of Rents — 2 20090322122 Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may: Make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, pay necessary expenses, employ counsel, and pay his reasonable fees. All amounts so paid, together with interest thereon at the same rate as is provided for in the note secured by this Deed of Trust or at the highest legal rate, whichever is greater, shall be part of the debt secured by this Deed of Trust and a lien on the above property. 5. To pay immediately and without demand all sums expended by Beneficiary or Trustee pursuant to the provisions hereof, together with interest from date of'.expenditure at the same rate as is provided for in the note secured by this Deed of Trust or at the highest legal rate, whichever is greater. Any amounts so paid by Beneficiary or Trustee shall become part of the debt secured by this Deed of Trust and a lien on said property and immediately due and payable at option of Beneficiary or Trustee. B. IT IS MUTUALLY AGREED: 1. That any award of damages in connection with any condemnation or any taking, or for injury to the property by reason of public use, or for damages for private trespass or injury thereto, is assigned and shall be paid to Beneficiary as further security for all obligations secured hereby (reserving unto Trustor, however, the right to sue therefor and the ownership thereof, subject to this Deed of Trust),and upon receipt of such moneys Beneficiary may hold the same as such further security, or apply or release the same in the same manner and with the same effect as above provided for disposition of proceeds of fire or other insurance. 2. That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay. Without affecting the obligation of Trustor to pay and perform as herein required; without affecting the personal liability of any person for payment of the indebtedness secured hereby; and without affecting the lien or priority of lien hereof on the.Trust Property,Beneficiary may, at its option,extend the time for payment of said indebtedness, or any part thereof, reduce the payment thereon, release any person liable on any of said indebtedness, accept a renewal note therefor, modify the terms of said Indebtedness, take or release other or additional security, or join in any extension or subordination agreement. Any such action by Beneficiary or the Trustee at Beneficiary's direction may be taken without the consent of any junior lienholder, and shall not affect the priority of this Deed of Trust over any junior lien. Time is of the essence of this Deed of Trust. 3. That at any time or from time to time, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and said note(s) for endorsement, and without liability therefor, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, and without affecting the security hereof for the full amount secured hereby on all property remaining subject hereto, and without the necessity that any sum representing the value or any portion thereof of the property affected by the Trustee's action be credited on the indebtedness, the Trustee may; (a)release and reconvey all or any Deed of Trust and Assignment of Rents 3 20090322122 _ part of said property; (b) consent to the making and recording, or either, of any map or plat of the property or any part thereof; (c)join in granting any easement thereon; (d)join in or consent to any extension agreement of any agreement subordinating the lien, encumbrance or charge hereof. Any Trustor signing this Trust as a surety or accommodation party or that has subjected its property to this Trust to secure the debt of another, expressly waives the benefits of A.R.S. 12-1641. 4. That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust and said note(s)to Trustee for cancellation and retention, and upon payment of its fees, Trustee shall release and reconvey, without covenant or warranty, express or implied, the property then held hereunder,the recitals in such reconveyance, of any matters or facts, shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto." 5. That as additional security, Trustor hereby gives to and confers upon Beneficiary the right, power, and authority, during the continuance of this Trust, to collect the property income, reserving to Trustor the right, prior to any default by Trustor in payment of any indebtedness secured hereby or in performance of any agreement hereunder, to collect and retain such property income as it becomes due and payable. Upon any such default Beneficiary may at any time, without notice either by person, by agent, or by receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness hereby secured or the solvency of the Trustor, enter upon and take possession of said property or any part thereof, in his own name sue for or otherwise collect such property income, including that past due and unpaid and apply the same, less costs and expenses of operation and collection, including reasonable attorney's fees of Beneficiary and Trustee, upon any indebtedness secured hereby, and in such order as Beneficiary may determine. The entering upon and taking possession of said property,the collection of such property income, and the application thereof as aforesaid, shall not cure or waive any default or notice of Trustee's sale hereunder or invalidate any act done pursuant to such notice. Beneficiary shall expressly have all rights provided for in A.R.S. 33-7026 and 33-807. 6. That upon default by Trustor In the payment of any indebtedness secured hereby or in performance of any agreement hereunder, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written notice thereof, setting forth the nature thereof, and of election to cause to be sold said property under this Deed of Trust. Beneficiary also shall deposit with Trustee this Deed of Trust, said note(s), and all documents evidencing expenditures secured hereby. Trustee shall record and give notice of Trustee's sale in the manner required by law, and after the lapse of such time as may then be required by law, Trustee shall sell, in the manner required by law, said property at public auction at the time and place fixed by it in said notice of Trustee's sale to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee at its discretion may postpone or continue the sale from time to time by giving notice of postponement or continuance by public declaration at the time and place last appointed for the sale. Trustee shall deliver to such purchaser its Deed conveying the property so sold, but without any covenant or warranty,expressed or implied. Any persons, including Trustor, Trustee or Beneficiary, may purchase at such sale. The purchaser at the Trustee's sale shall be entitled to immediate possession of the property as against the Trustee or other persons in possession and shall have a right to the summary proceedings to obtain Deed of Trust and Assignment of Rents 4 J - 20090322122 possession provided in Title 12, Chapter 8, Article 4, Arizona Revised Statues, together with costs and reasonable attorney's fees. After deducting all costs, fees,and expenses of Trustee and of this Trust,including cost of evidence of title in connection with sale and reasonable attorney's fees of Beneficiary and Trustee, Trustee shall apply the proceeds of sale to payment of: all sums then secured hereby and all other sums due under the terms hereof,with accrued interest; and,the remainder, if any, to the person or persons legally entitled thereto, or as provided in A.R.S. 33-812. To the extent permitted by law, an action may be maintained by Beneficiary to recover a deficiency judgment for any balance due hereunder. In lieu of sale pursuant to the power of sale conferred hereby, this Deed of Trust may be foreclosed in the same manner provided by law for the foreclosure of mortgages on real property. Beneficiary shall also have all other rights and remedies available to it hereunder and at law or in equity. All rights and remedies shall be cumulative. 7. That Beneficiary may appoint a successor Trustee in the manner prescribed by law. Trustor and Beneficiary authorize Trustee, in the event any demand or notice is made or tendered to it concerning this trust or the property, to hold any money and documents and to withhold action or performance until an action shall be brought in a court of competent jurisdiction to determine the rights asserted or the property of the demand, notice or action • requested and Trustee shall be without liability or responsibility for awaiting such court action. A Successor Trustee herein shall without conveyance from the predecessor Trustee, succeed to all the predecessor's title, estate,rights,powers,and duties. Trustee may resign at any time by mailing or delivering notice thereof to Beneficiary and Trustor and having so resigned shall be relieved of all liability and responsibility to Trustor, Beneficiary or otherwise hereunder, "Trustee" herein shall include all successor trustees. Trustee shall not be liable for any action taken in its discretion and in good faith, or upon advice of counsel, or upon any information supplied or direction given by Beneficiary. Unless Trustee is adjudged grossly negligent or guilty of intentional wrongdoing or breach of contract, Trustor and Beneficiary will, upon demand, indemnify and hold harmless Trustee against all costs, damages, attorney's fees, expenses and liabilities which it may incur or sustain in connection with this Deed of Trust or any foreclosure or sale hereof or any court or other action or proceeding arising here from. 8. That this Deed of Trust applies to, inures to the benefit of, and binds all parties hereto,their heirs, legatees, devisees, administrators, executors,successors and assigns. The term 'Beneficiary' shall mean the owner and holder of the note(s) secured hereby, whether or not named as Beneficiary herein. In this Deed of Trust, whenever the contest so required,the masculine gender includes the feminine and neuter, and the singular number includes the plural. 9. That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, Is made a public record as provided by law. Trustee may but is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party, unless brought by Trustee. Deed of Trust end Assignment of Rents 5 20090322122 The undersigned Trustor requests that a copy of any notice of Trustee's sale hereunder be mailed to him at his address set forth above. C aukreee Executive Director (Tanner Properties Inc., DBA Tanner Terrace) STATE OF ARIZONA ) ) ss. County o1 Maricooa ) BE IT REMEMBERED, that on this day of �4- 'QLL.eYJY f 20084 before me; the ersigred a NotaryotPubliq„in and or %aid County and State, personally appeared the within named 'UL /" E�(.ezJO4n(fl . known to meso be the identical individual(s)described in and who a uted the within Loan and Note and acknowledged to me the said individual(s) executed the same freely and voluntarily. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed by official seal the day and year above written. stunaua WALXER e. i . flu , , } p =ublicrnrw , /� 4,,'t /!e Deputy Ci Man- •er City of Glendale STATE OF ARIZONA ). ss. County of Maricopa ih £9 ) BE IT REMEMBERED, that on this 5 da of � 111Aa , 20013, before me, the u dersigned a Notary Public in and for said County and State, person y appeared the within named c io k3 t re . DMA known to me to be the identical individual(s) described in and who executed the within Loan and Note and acknowledged to me the said individual(s) executed the same freely and voluntarily. IN TESTIMONY WHEREOF.I have hereunto set my hand and affixed by official seal the day and year above written. ...OFFICIAL SEAL .AA `.'' •L A I� ' TIFFANY A.HUSKEY No,- Pu. c `� 4140TART Poem-Sutra Arizona MARICOPA COUNTY My Comm..Roses-Au1.29.2011 Deed of Trust and Assignment of Rents 6 20090322122 • EXHIBIT A Tanner Properties Inc. DBA Tanner Terrace 4420 South 18 Place Phoenix, Arizona 85040-2462 LEGAL DESCRIPTION : the following real property situated in Maricopa County, Arizona, together with all rights and privileges appurtenant thereto, to wit. : The North seventh-tenths of the Northeast quarter of the S-outhwest-quarterotheSuutheas • - - . _ Township 2 North, Range 2 East of the Gila and Salt River Base and Meridian, Maricopa County, Arizona ; EXCEPT the East 30 feet thereof.