AGREEMENT REGARDING TERMINATION
OF CONTRACT OF COINSURANCE
THIS AGREEMENT, made as of the 3lst day of January, 1995, by RICHLAND
PROPERTIES, INC., a Delaware corporation (the "Borrower") and RELATED MORTGAGE
CORPORATION, a Delaware corporation, its successors and assigns (the "Coinsuring
Lender").
WITNESSETH:
WHEREAS, the Coinsuring Lender made a mortgage loan in the original
principal amount of $13,154,200.00 (the "Coinsured Mortgage Loan") to H.O.
Associates, Ltd. ("H.O. Associates") to finance a multifamily rental housing
project known as Highland Oaks Apartments, identified as FHA Project No.
067-36672, located in Tampa, Florida (the "Project"), which Coinsured Mortgage
Loan was coinsured by the Coinsuring Lender and HUD under Section 221(d)(4),
pursuant to Section 244, of the National Housing Act. The Coinsured Mortgage
Loan is evidenced by a Mortgage Note dated December 13, 1990, as amended by a
Modification of Mortgage Note of even date herewith (hereinafter the "Coinsured
Mortgage Note") and secured by a Mortgage recorded in the Public Records of
Hillsborough County, Florida on May 15, 1992 in O.R. Book 6612, Page 403, as
amended by a Modification of Mortgage of even date herewith (hereinafter the
"Coinsured Mortgage").
WHEREAS, NYLIFE GOVERNMENT MORTGAGE PLUS LIMITED PARTNERSHIP, a
Massachusetts limited partnership ("NYLIFE"), agreed to finance the Coinsured
Mortgage Loan to the Borrower through the exchange with the Coinsuring Lender of
certain GNMA-guaranteed securities now owned by NYLIFE for certain modified GNMA
guaranteed securities backed by the modified Coinsured Mortgage Loan ("GNMA
Guaranteed Securities") upon the execution and delivery by the Borrower to
NYLIFE of a certain Amended and Restated Agreement (the "Agreement") and other
instruments evidencing and securing the obligations of the Borrower under the
Agreement;
WHEREAS, NYLIFE has the right to accelerate the maturity date of the
Coinsured Mortgage Note (such accelerated maturity date being the "Designated
Date") under certain circumstances provided in the Agreement by giving notice to
Borrower;
WHEREAS, NYLIFE has the right to direct the Coinsuring Lender to cancel the
GNMA Guaranteed Securities and terminate the contract of coinsurance;
WHEREAS, HUD does not permit the Coinsured Mortgage Note or the Coinsured
Mortgage to refer to NYLIFE's rights to direct the Coinsuring Lender to cancel
the GNMA Guaranteed Securities and terminate the contract of coinsurance and the
parties therefore intend by this Agreement Regarding Termination of Contract of
Coinsurance that Borrower acknowledge and confirm directly to the Coinsuring
Lender such rights of NYLIFE and powers of the Coinsuring Lender with respect
thereto.
NOW THEREFORE, in consideration of the premises, the parties agree as
follows:
1. The Borrower acknowledges that the Coinsuring Lender, and any
successor mortgagee under the Coinsured Mortgage Loan, in addition to its right
to accelerate the Coinsured Mortgage Loan in the event of default under the
Coinsured Mortgage Note or the Coinsured Mortgage, also has the right and
obligation, when directed to do so by NYLIFE, to cancel the GNMA Guaranteed
Securities, terminate the contract of coinsurance, and assign the Coinsured Note
and Coinsured Mortgage to NYLIFE, even though the Coinsured Mortgage Note and
the Coinsured Mortgage do not contain any provisions authorizing or referring to
such an acceleration.
2. The parties acknowledge that so long as the contract of
coinsurance is in effect, in the absence of a default under the Coinsured
Mortgage Note or the Coinsured Mortgage, the HUD coinsurance must be terminated
on or before the Designated Date. In this regard, the Borrower has agreed to
join in a request to HUD for a termination of the contract of coinsurance, and
the Borrower has given NYLIFE an irrevocable power of attorney to execute such a
request on the Borrower's behalf.
3. The parties acknowledge that this Agreement shall not constitute
an amendment to the Coinsured Mortgage Note and the Coinsured Mortgage, but
shall constitute a confirmation to the Coinsuring Lender of the rights and
powers of the Coinsuring Lender to cause the contract of insurance to be
terminated when directed to do so by NYLIFE in accordance with the provisions of
the Amended and Restated Agreement.
4. This Agreement shall not amend or modify the rights of the
Coinsuring Lender to accelerate the Coinsured Mortgage Loan pursuant to the
terms of the Coinsured Mortgage Note and the Coinsured Mortgage as a result of
or in connection with a default under the Coinsured Mortgage Note or the
Coinsured Mortgage. This Agreement does not purport to be a complete or
definitive restatement of the provisions of the Amended and Restated Agreement
relating to acceleration of the Coinsured Mortgage Loan, cancellation of the
GNMA Guaranteed Securities or
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termination of the contract of coinsurance, and shall not be deemed to amend or
modify those provisions.
5. This Agreement shall inure to the benefit of NYLIFE and its
successors and assigns, as holder of the Amended and Restated Additional
Interest Agreement.
6. Nothing herein is intended to alter or conflict with the terms,
conditions and provisions of the HUD regulations, handbooks, administrative
requirements and lender notices in effect at the time of initial endorsement of
the Coinsured Mortgage Note, or the documents required to be executed by
Mortgagor in connection with initial endorsement of the Coinsured Mortgage Note;
and to the extent that they do so, the HUD regulations, handbooks,
administrative requirements, lender notices and documents shall control and this
document shall be amended or deemed amended so as not to alter or conflict with
the aforesaid regulations, notices or documents. This provision shall terminate
and be void upon termination of HUD coinsurance of the Coinsured Mortgage Loan.
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IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year hereinabove f first written.
BORROWER:
RICHLAND PROPERTIES, INC.
By: /s/ Vahe M. Melkonian
--------------------------------
Name: Vahe M. Melkonian
------------------------------
Title: Vice President
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COINSURING LENDER:
RELATED MORTGAGE CORPORATION
By: /s/ Bruce H. Brown
--------------------------------
Name: Bruce H. Brown
------------------------------
Title: Vice President
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ACKNOWLEDGED AND AGREED TO:
NYLIFE GOVERNMENT MORTGAGE PLUS LIMITED
PARTNERSHIP
By: NYLIFE Realty, Inc.,
General Partner
By: /s/ Kevin M. Micucci
--------------------------------
Name: Kevin M. Micucci
------------------------------
Title: Vice President
-----------------------------
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