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limits the Agency鈥檚 ability to enforce the terms of the Restrictive Covenants,
provided such terms do not conflict with statutory provisions of the National
Housing Act or the related regulations. The Borrower represents and warrants
that to the best of Borrower鈥檚 knowledge the Restrictive Covenants impose no
terms or requirements that conflict with the National Housing Act and related
regulations.
4. Notwithstanding anything in the Restrictive Covenants to the contrary, the
provisions hereof are expressly subordinate to the HUD Requirements. In the
event of foreclosure (or deed in lieu of foreclosure), the Restrictive Covenants
(including without limitation, any and all land use covenants and/or restrictions
contained herein) shall automatically terminate.
4. Borrower and the Agency acknowledge that Borrower鈥檚 failure to comply with the
Restrictive Covenants does not and shall not serve as a basis for default under
the HUD Requirements, unless a default also arises under the HUD
Requirements.
5. Except for the Agency鈥檚 reporting requirement, in enforcing the Restrictive
Covenants the Agency will not file any claim against the Project, the Mortgage
Loan proceeds, any reserve or deposit required by HUD in connection with the
Security Instrument or HUD Regulatory Agreement, or the rents or other income
from the Project other than a claim against:
a) available Surplus Cash, if the Borrower is not subject to Residual Receipts
restrictions;
b) available Residual Receipts authorized for release by HUD, if the Borrower is
subject to Residual Receipts restrictions; or
c) a HUD-approved collateral assignment of any HAP contract.
7. For so long as the Mortgage Loan is outstanding, Borrower and Agency shall not
further amend the Restrictive Covenants, with the exception of clerical, without
HUD鈥檚 prior written consent.
8. Subject to the HUD Regulatory Agreement, the Agency may require the Borrower
to indemnify and hold the Agency harmless from all loss, cost, damage and
expense arising from any claim or proceeding instituted against Agency relating
to the subordination and covenants set forth in the Restrictive Covenants,
provided, however, that Borrower鈥檚 obligation to indemnify and hold the Agency
harmless shall be limited to available Surplus Cash or Residual Receipts of the
Borrower.
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