R-07-05-10-8F3 - 5/10/2007 RESOLUTION NO. R-07-05-10-8F3
WHEREAS, YMCA of Greater Williamson County ("YMCA") is in the
process of developing a year round indoor pool recreation facility, and
WHEREAS, pursuant to a Memorandum of Understanding approved by
the Council on March 8, 2007 by Resolution No. R-07-03-08-12C2, the
City of Round Rock ("City") and the YMCA have entered into a
Construction Agreement and a Joint Use Agreement ("Agreements")
regarding the community pool, and
WHEREAS, in connection with the Agreements, the City has agreed
to execute a Subordination Agreement and deliver same to JPMorgan Chase
Bank, N.A. , Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
That the Mayor is hereby authorized and directed to execute on
behalf of the City a Subordination Agreement, a copy of same being
attached hereto as Exhibit "A" and incorporated herein.
The City Council hereby finds and declares that written notice of
the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to the
public as required by law at all times during which this Resolution and
the subject matter hereof were discussed, considered and formally acted
upon, all as required by the Open Meetings Act, Chapter 551, Texas
Government Code, as amended.
RESOLVED this 10th day of May, ;0J
ELL, Mayor
May;
Round Rock, Texas
AT T: ,
— (ThA)AkYUS.
CHRISTINE R. MARTINEZ, City Secre ry
0:\wdox\RESOLUTI\R70510F3.WPD/xmc/0112-0702
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• �. 3
SUBORDINATION AGREEMENT
This SUBORDINATION AGREEMENT is executed as of , 2007,
by THE CITY OF ROUND ROCK, TEXAS, a Texas home rule municipality (the "City"), in
favor of JPMORGAN CHASE BANK, .N.A., a national association, and its successors and
assigns ("Lender").
RECITALS:
A. In connection with the issuance of the San Gabriel Health Facilities Development
Corporation Variable Rate Demand Revenue Bonds (YMCA of Greater Williamson County
Project), Series 2005, Lender issued Irrevocable Transferable Direct Pay Letter of Credit
Number 440591 (the "Letter of Credit") in the amount of Seven Million Two Hundred Eighteen
Thousand Three Hundred Thirty Four and No/100 Dollars ($7,218,334.00) on behalf of the
YMCA OF GREATER WILLIAMSON COUNTY, a Texas 501(c)(3) corporation (the
"YMCA"), in connection with certain improvements to be constructed on property owned by the
YMCA. The YMCA and Lender executed a Credit Agreement dated January 15, 2005 (the
"Credit Agreement") setting forth, among other things, the YMCA's reimbursement obligations
to Lender in connection with any draws made on the Letter of Credit. The Letter of Credit, the
Credit Agreement and any and all other documents evidencing, securing or relating to the Letter
of Credit or the Credit Agreement are hereinafter collectively referred to as the "Letter of Credit
Documents."
B. The YMCA and Lender additionally entered into a Loan Agreement dated January 15,
2005 (the "Loan Agreement"), relating to a revolving line of credit in the maximum amount of
$300,000, evidenced by a Line of Credit Note dated , 2005 (the "Note"), executed
by the YMCA and payable to the order to Lender, in the amount of Three Hundred Thousand
and No/100 Dollars ($300,000.00). The Loan Agreement, the Note, and any and all other
documents evidencing, securing or relating to the Loan Agreement or the Note are hereinafter
collectively referred to as the "Loan Documents."
C. As additional security for the Letter of Credit Documents and the Loan Documents, and
as additional security for the obligations of the YMCA under the ISDA Master Agreement dated
June 21, 2004 (the "Swap Agreement") between the YMCA and Lender, the YMCA executed a
Deed of Trust, Assignment of Leases and Rents, Security Agreement and Financing Statement
dated , 2005 (the "Deed of Trust"), recorded as Document Number
of the Official Public Records of Williamson County, Texas, to Douglas J.
Kroiss, Trustee, for the benefit of Lender, as beneficiary, covering the Premises defined in the
Deed of Trust. The Letter of Credit Documents, the Loan Documents, the Swap Agreement, the
Deed of Trust, and any and all other documents evidencing, securing or relating to the Letter of
Credit Documents, the Loan Documents, the Swap Agreement or the Deed of Trust are
hereinafter collectively referred to as the "First Lien Documents."
D. The YMCA and the City entered into that certain Agreement Regarding Construction of a
Community Pool to the YMCA of Greater Williamson County Recreation Center dated
2007 (the "Agreement Regarding. Construction"), relating to: (i) the
YMCA's construction of improvements and additions for a community pool on the Premises (the
"Community Pool"), as more particularly described in the Agreement Regarding Construction,
SUBORDINATION AGREEMENT- Page 1EXHIBIT ii w)
and (ii) the City's agreement to contribute funds towards the construction of the Community Pool
(the "City's Monetary Contribution").
E. In connection with the Agreement Regarding Construction, the YMCA and the City
entered into a Community Pool Joint Use and Access Agreement dated , 2007,
recorded as Document Number of the Official Public Records of
Williamson County, Texas (the "Joint Use Agreement"), relating to certain joint access and joint
use rights to the Community Pool, as more particularly described therein, granted by the YMCA
to the City as consideration for the City's Monetary Contribution.
F. The Joint Use Agreement requires the YMCA to execute a Deed of Trust to Secure
Performance ("City Deed of Trust") covering the real property more particularly described on
Exhibit "A" attached hereto and incorporated hereby by this reference (the "City-Liened
PropertX") to secure the City's Monetary Contribution and the YMCA's performance of its
obligations under the Joint Use Agreement (which obligations diminish according to the
schedule attached as Exhibit B to the Joint Use Agreement). The City Deed of Trust and any
documents evidencing or relating to the City Deed of Trust are hereinafter collectively referred
to as the "Subordinate Documents."
G. In connection with the YMCA's construction of the Community Pool, the YMCA has
executed: (i) a Promissory Note dated , 2007,payable to the order of Lender in
the original principal amount of Two Million and No/100 Dollars ($2,000,000.00); and (ii) a
Promissory Note dated , 2007, payable to the order of Lender in the original
principal amount of Nine Hundred Ninety Thousand and No/100 Dollars ($990,000.00)
(collectively, the "Construction Notes"), such Construction Notes being secured by, among other
things, a Deed of Trust, Assignment of Leases and Rents, Security Agreement and Financing
Statement dated , 2007 (the "Construction Deed of Trust"), recorded as Document
Number of the Official Public Records of Williamson County, Texas,
covering, among other property, the Community Pool and parking facilities located on certain
tracts of land adjacent to the Community Pool, as more particularly described in the Construction
Deed of Trust (the "Mortgaged Property"). The Construction Notes, the Construction Deed of
Trust, and any and all other documents evidencing, securing or relating to the Construction Notes
or the Construction Deed of Trust are hereinafter collectively referred to as the "Construction
Loan Documents."
H. Lender has required, as a condition to the making of the loans evidenced by the
Construction Loan Documents, that all liens, rights, titles and interests securing payment of the
First Lien Documents and the Construction Loan Documents should be prior and superior to any
and all of the liens, rights, titles and interests of the City in and to the City-Liened Property
under, pursuant to and by virtue of the Subordinate Documents and that any and all liens, rights,
titles and interests of the City in and to the City-Liened Property under, pursuant to and by virtue
of the Subordinate Documents should be subordinated to all liens, rights, titles and interests of
the First Lien Documents and the Construction Loan Documents.
NOW, THEREFORE, for and in consideration of the premises and the sum of TEN AND
NO/100 DOLLARS ($10.00), and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged and confessed, and to induce Lender to make the
loans evidenced by the Construction Loan Documents, the City hereby agrees as follows:
SUBORDINATION AGREEMENT-Page 2
1. Subordination of City's Lien. The City does hereby expressly subordinate and
make second,junior and inferior any and all rights, powers and prerogatives of the City in and to
the City-Liened Property under, pursuant to and by virtue of the Subordinate Documents to all
liens, rights, titles and interests of the First Lien Documents and the Construction Loan
Documents, and the City agrees that all liens, rights, titles and interests of the First Lien
Documents and the Construction Loan Documents, shall be unconditionally first, prior and
superior to any and all rights, powers and prerogatives of the City in and to the City-Liened
Property under,pursuant to and by virtue of the Subordinate Documents. The City further agrees
that any and all liens, rights, titles and interests of the City in and to the City-Liened Property
under, pursuant to and by virtue of the Subordinate Documents shall be and remain expressly
subject and subordinate to the liens, rights, titles and interests of the First Lien Documents and
the Construction Loan Documents and any renewal, extension or refinancing thereof.
2. Subordinationf p � �
Imes' Tee e-rcrn ct� a .] 1. 4 41.� 4..
--- ---r-----� r-.,.-.�.... herein o sac—cam
e the--tent, and in die-mannef set fi)fth in
Genstfuetion Notes and all abligatiens seeufed by the First Lien Deetiments —aft-1 the Gens--ftetief]
Loan Doeuments. TMs Suber-dination Agreement shall not affieet any other- fights betv��
City and the )FMCA 'With respeet te the exer-eise of any of the other- riglits p.-M
femedies granted to the Gity-i—m—er-the jeint Use Aeeess Agreement or-the Agreement aagaMiag
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3.
Presentation ^IITVTI[��^-`�t'l�jT-QS-flel'cinr .7 .7 ry ♦ 41a ._
H
dufing sueh time as the First Lien Deewmeents, the Genstfuetien bean Deeuments wafidd "lie ether
will not ask > demand—, sue frwef, take>
the Subefdinate Doeuments for payment (other- dhan sueh presentment as may be neeessary4a
pfe,vided to the e0fitfany-the City will net ask fim-,
> sue > take,
ef the
A , en ean 2
`I.Reei'eii3t"ef Pa; as hGifil t, �J Y ded to Hhe t aL
the City%ill he F amount se Feeeived i a tfust for-Leader- will twn evef-sueh
aflA
—�
te be applied against the ebligiatiens-desefibed in the First Lien D Ii e t i I
Lean Doeuments. In the event Lender. demands dim stieh stuns shall be paid te Leader-and
Subefdinat
by th
stiffl
aaµ„1.. s, b A- r ��3 � ' ,
.. owuvJiZii�LZ7.
SUBORDINATION AGREEMENT-Page 3
2.. 5-4BWlkru IU SProc_eedings. The City will not commence any action or
proceeding against the YMCA to recover all or any part of any sums owed under the Subordinate
Documents 6 � 8
to9
rounder" any bankruptcy, reorganization, readjustment
of debt, arrangement of debt, receivership, liquidation or insolvency law or statute of the federal
government or any stategovernment))oor- Lender- fl d 12 (collectively, a "Ba_nknwtcTit
Or loin with ani Other creditor 14. any actions or15 nroceeding.s a int _YMCA under any
16 ---- -----
Bank=
tcy Law_ 17unlsde� 18
�11�11.__a1s_�a-jam_i�,_._�ixing�p�_,. nroceedineG aeain�t the
YMCA under such v a�= or Lender a o r�=i consent in writing to such action
or proceeding, which consent or approval may be withheld by Lender in Lender's sole discretion,
unless and until the Letter of Credit, the Note, the Construction Notes and all other obligations of
the YMCA to Lender evidenced by the First Lien Documents and the Construction Loan
Documents shall have been paid in full. Regardless of anything contained herein to the contrary
the City may file and pursue a claim in bankruptcy against the YMCA without first obtaining the
consent of Lender.
3, 6720Enforcement of Obligations. In the event of any receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization or arrangement with creditors,
adjustment of debt, whether or not pursuant to benl� Banntcy Law22, the sale of
all or substantially all of the assets, dissolution, liquidation or any other marshalling of the assets
and liabilities of the YMCA, the City will, at Lender's request, file any claim, proof of claim,
proof of interest or other instrument of similar character necessary to enforce the obligations of
the YMCA in respect to the Subordinate Documents and will hold in trust for Lender and pay
over to Lender, in the form received (together with any necessary endorsement), to be applied
against the obligations described in the First Lien Documents and the Construction Loan
Documents, any and all monies, dividends or other assets received in any such proceedings on
account of the Subordinate Documents unless and until the obligations described in the First Lien
Documents and the Construction Loan Documents shall be paid in full. In the event that the City
shall fail to take any such action requested by Lender, Lender may, as attorney-in-fact for the
City, take such action on behalf of the City, and the City hereby appoints Lender as
attorney-in-fact for the City to demand, sue for, collect and receive any and all such monies,
dividends or other assets and give acquittance therefor and to file any claim, proof of claim,
proof of interest or other instrument of similar character and to take such other proceedings in
Lender's own name or in the name of the City as Lender may deem necessary or advisable for the
enforcement of this Subordination Agreement; and the City will execute and deliver to Lender
such other and further powers of attorney or other instruments as Lender may request in order to
accomplish the foregoing. In the event Lender demands that such sums shall be paid to Lender
and applied against the obligations described in the First Lien Documents and the Construction
Loan Documents, such sums so paid to the City shall not be deemed to have been a payment
under the Subordinate Documents, and the obligations under the Subordinate Documents shall
not have been reduced or discharged, in whole or in part, by the initial payment of such sum of
the YMCA to the City.
I 7723Controlling Afreement. The City hereby acknowledges that Lender would
not make the loans evidenced by the Construction Loan Documents or consent to the
Subordinate Documents without this Subordination Agreement and agrees that this
Subordination Agreement shall be the whole and only agreement with regard to the
subordination of the rights, powers, interests and prerogatives of the City with respect to the
SUBORDINATION AGREEMENT-Page 4
City-Liened Property and the liens, rights, titles and interests of the Subordinate Documents, and
this Subordination Agreement shall supersede and cancel, but only insofar as would affect the
priority rights hereinbefore specifically described, any prior agreements regarding such
subordination.
$-24Representations. The City hereby certifies, warrants and represents to Lender
as follows:
(a) The Joint Use Agreement, the Agreement Regarding Construction and the
Subordinate Documents have not been modified, amended, released or terminated in any
manner, and will not be materially modified or amended or modified or amended so as to
affect to the value of the Mortgaged Property in any manner without the prior written
consent of Lender;
(b) The Joint Use Agreement, the Agreement Regarding Construction and the
Subordinate Documents are in full force and effect and no uncured breaches or defaults
exist thereunder;
(c) The City acknowledges that it has marked its files relating to the City-
Liened Property and the Subordinate Documents to reflect that Lender is the holder of a
superior lien in the City-Liened Property, and the City agrees that it will give written
notice to Lender of any default under the Joint Use Agreement, the Agreement Regarding
Construction or the Subordinate Documents. Lender shall have reasenabk-feried-of
time 601 day26after the effective date of any such notice of default within which
to cure such default; provided, however, Lender shall not be obligated to cure any such
default. The notices to be given hereunder shall be in writing, and shall be given by
depositing same in the United States mail, postage prepaid, registered or certified, with
return receipt requested, addressed to the following address or such other address of
which the City has been notified in writing by Lender:
Ki Allen
Commercial Banking
JPMorgan Chase Bank,N.A.
221 W. Sixth St. -Floor 2
Austin, Texas 78701
Notices shall be effective three(3) days after deposit in the United States mail.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
SUBORDINATION AGREEMENT-Page 5
EXECUTED as of the day of 2007.
THE CITY
CITY OF ROUND ROCK, TEXAS
a Texas home rule municipality
By
Nyle Maxwell,Mayor
Attest:
Printed Name:
Title:
STATE OF TEXAS §
COUNTY OF WILLIAMSON §
The foregoing instrument was ACKNOWLEDGED before me this day of
2007, by NYLE MAXWELL, Mayor of the CITY OF ROUND ROCK,
TEXAS, a Texas home rule municipality, on behalf of said home rule municipality.
[SEAL]
Notary Public, State of Texas
When recorded,return to:
Kathleen Robertson
Commercial Banking
JPMorgan Chase Bank, N.A.
221 W. Sixth St. -Floor 2
Austin, Texas 78701
SUBORDINATION AGREEMENT-Page 1
EXHIBIT "A"
The City-Liened Property
Austin_1\467313\227328
nnu 01)ci129,230MAn-7
SUBORDINATION AGREEMENT—Exhibit "A"—The City-Liened Property
Document corn arison done b DeltaView on Thursday, May 03, 2007 6:46:26 PM
Document 1 cdocs://austin 1/467313/2
Document 2 cdocs://austin 1/467313/3
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DATE: May 2, 2007
SUBJECT: City Council Meeting - May 10, 2007
ITEM: 8.F.3. Consider a resolution authorizing the Mayor to execute a
Subordination Agreement in favor of JPMorgan Chase Bank, N.A.
regarding the YMCA/City of Round Rock Community Pool.
Department: Administration
Staff Person• Jim Nuse, City Manager
Justification:
Pursuant to a Memorandum of Understanding approved by the Council on March 8, the City
and the YMCA have developed a Community Pool Construction Agreement and a Joint Use
Access Agreement. This Subordination Agreement is pursuant to the terms of the Joint Use
and Access Agreement.
Funding_•
Cost: $0 Operating Cost (Pursuant to the Construction Agreement, the City
provides $2 million capital investment)
Source of funds: N/A
Outside Resources: N/A
Background Information•
The Joint Use and Access Agreement provides for the YMCA to grant a lien to the City on its
property to secure the obligations of the YMCA. This Subordination Agreement makes the
City's lien inferior and junior to certain liens held by JPMorgan Chase Bank.
Public Comment: N/A