Subordination Agreement - TIFA.
B
Freddie Mac Loan Number: 509828396
Property Name: Lake Place Senior Apartments
SUBORDINATION AGREEMENT . REGULATORY AGREEMENT ONLY
GOVERNMENTAL ENTITY
(NO SUBORDINATE DEBT)
(Revised 7-30-2024)
THIS SUBORDINATION AGREEMENT FOR REGULATORY AGREEMENT ("Agreement")
is effective as of the 15th day of November, 2024 by CHANHASSEN ECONOMIC
DEVELOPMENT AUTHORITY, a public body corporate and politic under the laws of
Minnesota (o'Governmental Entity"), and LAKES AT CHANHASSEN LLC, a Minnesota
limited liability company ("Borrower"), for the benefit of BELLWETHER ENTERPRISE
REAL ESTATE CAPITAL,LLC, an Ohio limited liability company ("Lender").
RECITALS
Simultaneously herewith Borrower is refinancing a loan secured by certain improved real
property located in the County of Carver, State of Minnesota, as more particularly
described on Exhibit A attached hereto ("Property").
Borrower and Governmental Entity entered into that certain Contract for Private
Development ("Regulatory Agreement") recorded on title to the Property on February
13,2023 in the Office of the County Recorder, Carver County, Minnesota, as Document
Number A757323 ("Official Records"), pursuant to which the Property was subjected to
certain restrictions by Governmental Entity in connection with the development or
rehabilitation of the Property, as affected by that certain Certificate of Completion,
recorded on title to the Property on March 28,2023,2023 in the Office of the County
Recorder, Carver County, Minnesota, as DocumentNumber A758573.
In connection with the refinancing ofthe loan secured by]the Property by Borrower, Lender
is making a loan to Borrower in the original principal amount of 1***5rO'693,000.00***l
("Loan") pursuant to a Multifamily Loan and Security Agreement between Lender and
Borrower (as supplemented or amended from time to time, the "Loan Agreement") and
evidenced by a Multifamily Note by Borrower to Lender (as supplemented or amended
from time to time, the "Note"). The Loan is to be secured by a Multifamily Mortgage,
Assignment of Rents, Security Agreement and Fixture Financing Statement that will be
recorded among the Official Records (as supplemented or amended from time to time, the
"Mortgage") (the Loan Agreement, the Note and the Mortgage, together with all other
documents executed with respect to the Loan, are hereinafter collectively referred to as the
"Loan Documents").
Subordination Agreement - Regulatory Agreement Only
DOCSOPEN\CH I 3 5\62\98487 0.v l'1 0 124 124
C
1
2
D As a condition to making the Loan, Lender requires that the Loan Documents be a lien on
the Property superior to the lien of the Regulatory Agreement and that the rights of Lender
under the Loan Documents be superior to the rights of Governmental Entity and Borrower
under the Regulatory Agreement. Lender will not make the Loan unless Governmental
Entity and Borrower agree to subordinate their rights and obligations under the Regulatory
Agreement.
E.Borrower and Governmental Entity hereby agree to subordinate the Regulatory Agreement
on and subject to the terms, conditions and requirements set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and
other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
Recitals. The foregoing Recitals are hereby incorporated into this Agreement as
agreements among the parties.
Subordination. The Governmental Entity hereby covenants and agrees that the Regulatory
Agreement is and will at all times continue to be, subordinate, subject and inferior to the
rights of Lender under the Loan Documents and that the liens, rights (including approval
and consent rights), remedies, payment interests, priority interests, and security interests
granted to Governmental Entity pursuant to or in connection with the Regulatory
Agreement are hereby expressly acknowledged to be in all respects and at all times, subject,
subordinate and inferior in all respects to the liens, rights (including approval and consent
rights), remedies, payment, priority and security interests granted to Lender pursuant to the
Loan Documents and the terms, covenants, conditions, operations and effects thereof.
Notwithstanding the above, Governmental Entity may exercise the remedies of specific
performance or injunctive relief.
Financing, Encumbrance and Transfer Approval. Govemmental Entity hereby
approves the financing evidenced by the Mortgage. Governmental Entity further agrees
that any transfer of the Property in connection with foreclosure or deed in lieu thereof will
not require Governmental Entity's consent.
4. Reserved.
Lender Notice of Default. In consideration of Governmental Entity's agreements
contained in this Agreement, Lender agrees that in the event of any default by Borrower
under the Loan Documents, Governmental Entity will be entitled to receive a copy of any
notice of default given by Lender to Borrower under the Loan Documents. Neither the
giving nor the failure to give a notice to Governmental Entity pursuant to this Section 5
will affect the validity of any notice given by Lender to the Borrower.
Subordination Agreement - Regulatory Agreement Only
DOCSOPEN\CH 1 35\62\98487 0.v l-10/24/24
3.
5.
Page2
7
6.
8.
Governmental Entity Notice of Default. Governmental Entity must give Lender a
concurrent copy of each material notice (including without limitation each notice of
default) given by Governmental Entity under or with respect to the Regulatory Agreement,
and agrees that Lender, at Lender's sole election, will have the right (but not the obligation)
to cure any default by Borrower under the Regulatory Agreement on its and/or Borrower's
behalf. Governmental Entity hereby represents and warrants that, to the best of its
knowledge, there is no current default under the Regulatory Agreement.
Governmental Entity's Rights. Except as set forth in Sections 2 and 8 of this Agreement,
nothing in this Agreement is intended to abridge or adversely affect any right or obligation
of Borrower and/or Govemmental Entity, respectively, under the Regulatory Agreement;
provided that, (A) the Regulatory Agreement may not be modified, amended, changed or
altered without the prior written consent of Lender so long as the Loan is secured by the
Property and (B) for so long as the Loan is secured by the Property, notwithstanding the
terms of the Regulatory Agreement to the contrary, neither Borrower nor Governmental
Entity will, without Lender's prior written consent, exercise or seek any right or remedy
under the Regulatory Agreement or available at law or in equity which will or could result
in (i) a transfer of possession of the Property or the control, operations or management
thereof, (ii) collection or possession of rents or revenues from or with respect to the
Property by any party other than Borrower or Lender; (iii) appointment of a receiver for
the Property; (iv) application of insurance or condemnation proceeds other than as
approved by Lender pursuant to the Loan Documents; (v) removal or replacement of the
existing property manager of the Property; or (vi) a material adverse effect on Lender's
security for the Loan.
Foreclosure by Lender. In the event of foreclosure, deed in lieu of foreclosure, or similar
disposition of the Property by Lender, (a) no consent will be required from Governmental
Entity, and (b) the Regulatory Agreement will terminate, at the option of Lender and (c)
Lender will have no indemnification obligations to Governmental Entity for any period
during which Lender does not own or is not in possession of the Property.
Refinancing. Governmental Entity agrees that its agreement to subordinate hereunder will
extend to any new mortgage debt which is for the purpose of refinancing all or any part of
the indebtedness evidenced by the Loan Documents (including reasonable and necessary
costs associated with the closing and/or the refinancing, and any reasonable increase in
proceeds for rehabilitation in the context of a preservation transaction). All terms and
covenants of this Agreement will inure to the benefit of any holder of any such refinanced
debt, and all references to the Loan Documents and Lender will mean, respectively, the
refinance loan documents and the holder of such refinanced debt.
10. Miscellaneous Provisions.
(a) This Agreement represents the entire understanding and agreement between the
parties with regard to the matters addressed herein, and will supersede and cancel
any prior agreements with regard to such matters.
Subordination Agreement - Regulatory Agreement Only
DOCSOPEi{\CH I 3 5\62\98487 0.v I -l 0 /24/24
9
Page 3
(b) If there is any conflict or inconsistency between the terms of the Regulatory
Agreement and the terms of this Agreement, then the terms of this Agreement will
control.
(c) This Agreement will be binding upon and will inure to the benefit of the respective
legal successors and permitted assigns of the parties to this Agreement. Without
prior notice to or the consent of the Governmental Entity or the Borrower, the
Lender may freely transfer or assign the Loan and the Loan Documents, including
this Agreement, in whole or in part, and the Govemmental Entity acknowledges
and agrees that any future legal holder of the Note will automatically be a legal
successor and permitted assignee of Lender hereunder, without the necessity of any
further action or instrument. No other party will be entitled to any benefits under
this Agreement, whether as a third-party beneficiary or otherwise.
(d) If any one or more of the provisions contained in this Agreement, or any application
of any such provisions, is invalid, illegal, or unenforceable in any respect, the
validity, legality, enforceability, and application of the remaining provisions
contained in this Agreement will not in any way be affected or impaired.
(e)Each notice, request, demand, consent, approval or other communication
(collectively, "Notices," and singly, a "Notice") which is required or permitted to
be given pursuant to this Agreement will be in writing and will be deemed to have
been duly and suffrciently given if (i) personally delivered with proof of delivery
(any Notice so delivered will be deemed to have been received at the time so
delivered), or (ii) sent by a national overnight courier service (such as FedEx)
designating earliest available delivery (any Notice so delivered will be deemed to
have been received on the next Business Day following receipt by the courier), or
(iii) 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 will be deemed to have been received on the date of
delivery as confirmed by the return receipt), addressed to the respective parties as
follows:
If to Governmental Entity:
CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY, A
public body corporate and politic under the laws of Minnesota
7700 Market Blvd.
Chanhassen, Minnesota 55317
Attention: Executive Director
Facsimile:
Telephone:
If to Lender:
BELLWETHER ENTERPRISE REAL ESTATE
Subordination Agreement - Regulatory Agreement Only
DOCSOPEN\CH I 3 5\62\98487 0.v | -1 0 124 124
Page 4
CAPITAL,LLC, an Ohio limited liability company
1375 E,.9th Street, Suite 2400
Cleveland, Ohio 44114
Attention: Theresa Callahan
Senior Vice President
Facsimile:
Telephone:
If to Borrower:
LAKES AT CHANHASSEN LLC, A
Minnesota limited liability company
1010 W St. Germain Street, Suite 750
St. Cloud, Minnesota 56301
Attention:
Facsimile:
Telephone:
Any party, by Notice given pursuant to this Section, may 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 will only be effective upon receipt. Neither party will refuse or reject
delivery of any Notice given in accordance with this Section.
(0 Each of the parties will, whenever and as often as they are requested to do so by the
other, execute, acknowledge and deliver, or cause to be executed, acknowledged or
delivered, any and all such further instruments and documents as may be reasonably
necessary to carry out the intent and purpose of this Agreement, and to do any and
all further acts reasonably necessary to carry out the intent and purpose of this
Agreement.
(g) This Agreement will be govemed by the laws of the State in which the Property is
located.
(h) Each person executing this Agreement on behalf of a party hereto represents and
warrants that such person is duly and validly authorized to do so on behalf of such
party with full right and authority to execute this Agreement and to bind such party
with respect to all of its obligations under this Agreement.
(n) No failure or delay on the part of any party to this Agreement in exercising any
right, power, or remedy under this Agreement will operate as a waiver of such right,
power, or remedy, nor will any single or partial exercise of any such right, power
or remedy preclude any other or further exercise of such right, power, or remedy or
the exercise of any other right, power or remedy under this Agreement.
(j) Each party to this Agreement acknowledges that if any party fails to comply with
Subordination Agreement - Regulatory Agreement Only
DOCSOPEN\CH I 3 5\62\9848 7 0.v I -10 124 124
Page 5
its obligations under this Agreement, the other parties will have all rights available
at law and in equity, including the right to obtain specific performance of the
obligations of such defaulting party and injunctive relief.
(k)This Agreement may be assigned at any time by Lender to any subsequent holder
of the Note.
(l)This Agreement may be amended, changed, modified, altered or terminated only
by a written instrument signed by the parties to this Agreement or their successors
or assigns.
(m) This Agreement may be executed in two or more counterparts, each of which will
be deemed an original but all of which together will constitute one and the same
instrument.
(n) Nothing in this Agreement is intended, nor will it be construed, to in any way limit
the exercise by Govemmental Entity of its governmental powers (including police,
regulatory and taxing powers) with respect to Borrower or the Property to the same
extent as if it were not a party to this Agreement or the transactions contemplated
by this Agreement.
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN THE REGULATORY
AGREEMENT BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN
OF THE MORTGAGE.
[SIGNATURE AND ACKNOWLEDGMENT PAGES FOLLOWI
Subordination Agreement - Regulatory Agreement Only
DOCSOPEN\CH I 3 5\62\98487 0.v 1 -10 124 124
Page 6
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
and year above written.
GOVERNMENTAL ENTITY
CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY, A
public body corporate and politic under the laws of Minnesota
SrArE oF \AtwwgAhu
COUNTY OF LC^,W
This was acknowledged before me on 06tb'o+' U , 2024 by
of CHANHASSEN ECONOMIC
DEVELO AUTHORITY,a public body corporate and politic under the laws of
Minnesota.
Notary
JENNIFER ANN POTTER
Notary Public'Minnesota
MyComrnbdon Exgir6J.n 3t,2027
Printed Name:Ttnnt I4,v ?o l+ov
My Commission Expires:
1nur,^.r,- '?j\ , ?-oLT
Subordination Agreement - Regulatory Agreement Only
DOCSOPEN\CH I 3 5\62\98487 0.v I -10 124 124
llrA*)6,t*
L
,
l;t
^l
E
mTitle 2n)
)
):
)
SS.
Page S-1
\
BORROWER:
LAKES AT CHANHASSEN LLC, A
Minnesota limited liability company
By: TPS HOLDING LLC, A
Minnesota limited liability company, its Manager
By
Name:
Title:
Todd M. Simning
President
By SILVER CREEK EQUITY LLC, A
Delaware limited liability company, its Manager
Name:
Title:
Craig Hanson
Manager
Subordination Agreement - Regulatory Agreement Only
DOCSOPEN\CH I 35\62\98487 0.v I -10 124 124
Page S-2
This instrument was acknowledged before me on 2024by TODD M.
SIMNING, PRESIDENT of TPS HOLDING LLC, a Minnesota limited liability company,
MANAGER of LAKES AT CHANHASSEN LLC, a Minnesota limited liability company.
Notary Public
Printed Name
My Commission Expires:
STATE OF
COIjNTY OF
This instrument was acknowledged before me on , 2024 by
of SILVER CREEK EQUITY LLC,
a Delaware limited liability company, MANAGER of LAKES AT CHANHASSEN LLC, a
Minnesota limited liability company.
Notary Public
Printed Name
My Commission Expires:
Subordination Agreement - Regulatory Agreement Only
DOCSOPEN\CH I 35\62\98487 0.v 1'10 /24 124
)
)
)
SS.
)
)
)
SS.
Page S-3
STATE OF
COUNTY OF
LENDER:
BELLWETHER ENTERPRISE REAL ESTATE CAPITAL, LLC, AN
Ohio limited liability company
By
Name:
Title:
Therese Callahan
Senior Vice President
STATE OF OHIO
COUNTY OF CUYAHOGA
This instrument was acknowledged before me on 2024 by
THERESE CALLAHAN, SENIOR VICE PRESIDENT of BELLWETHER ENTERPRISE
REAL ESTATE CAPITAL,LLC, an Ohio limited liability company.
Notary Public
Printed Name:
My Commission Expires:
Subordination Agreement - Regulatory Agreement Only
DOCSOPEN\CH I 35\62\9848'7 0.v 1 -1 0 124 124
)
): ss
)
Page S-4
EXHIBIT A
LEGAL DESCRIPTION
Lot2,Block 1, Powers Ridge Apartment Homes 2nd Addition, Carver County, Minnesota.
4867-3688-2160, v. 4
Subordination Agreement - Regulatory Agreement Only
DOCSOPEN\CH I 3 5\62\98487 0.v l'10 124 124
Page A-1