INTER CREDITOR AGREEMENTPREPARED BY AND RETURN TO:
Michael Cronin, Esquire
Johnson, Pope, Bokor,
Ruppel & Burns, LLP
911 Chestnut Street,
Clearwater, FL 33756
INTER -CREDITOR AGREEMENT
THIS INTER -CREDITOR AGREEMENT ("Inter -Creditor Agreement") effective as of
December , 2021 is entered into by and between HOUSING FINANCE AUTHORITY OF
PINELLAS COUNTY, FLORIDA ("HFA"), PINELLAS COUNTY, FLORIDA ("County"), the
CITY of CLEARWATER, a Florida municipal corporation ("City"), GREENWOOD
APARTMENTS, LLC, a Florida limited liability company ("Seller"), and PALMETTO
PRESERVATION, LTD., a Florida limited partnership ("Purchaser" or "Borrower").
WHEREAS, the HFA, City and County (collectively "Subordinated Governmental Lenders")
previously advanced funds to the Seller, which are evidenced by various promissory notes,
mortgages and modifications thereof, as more particularly set forth on Exhibit "A-1" (collectively
"Subordinated Governmental Lender Loan Documents"), the proceeds of which were used to assist
in the acquisition, renovation, financing and equipping of a multifamily apartment housing facility
consisting of approximately 179 units and related property and equipment, located in Clearwater,
Florida, now known as "Palmetto Park Apartments (the "Project"), a legal description of which is
attached as Exhibit B..
WHEREAS, the Project is being acquired by the Purchaser from Seller and in connection
with such acquisition, the Subordinated Governmental Lenders, Purchaser and Seller are entering
into this Inter -Creditor Agreement to set forth their respective rights, dignity and priority to the
Project's Net Cash Flow (as defined below) and lien upon and security interest in the Project's assets.
WHEREAS, the Seller has agreed to accept subordinated seller financing, as evidenced by
the promissory note, mortgage and other loan documents as more particularly set forth on Exhibit
"A-2" (Subordinated Seller Loan Documents"), and in connection with this sale and has agreed to be
a party to this Inter -Creditor Agreement to also set forth Seller's rights, dignity and priority with
respect to the Project's Net Cash Flow (as defined below) and lien upon and security interest in the
Project's assets vis-a-vis the Subordinated Governmental Lenders.
WHEREAS, simultaneously the Subordinated Governmental Lenders, Seller and Purchaser
are entering into assignments and assumption agreements in which the Purchaser will assume the
obligations due pursuant to the Subordinated Governmental Lenders Loan Documents from Seller, as
modified and subject to the terms and conditions of this Inter -Creditor Agreement.
WHEREAS, the Borrower will execute and deliver to the HFA a Promissory Note (the
"Borrower Note") secured by, among other things, a first- priority mortgage lien on the Project
granted pursuant to a Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture
Filing dated as of the date hereof (as amended, modified or supplemented from time to time, the
"Senior Mortgage");
WHEREAS, the rights of the HFA (in such capacity, the "Issuer") under the Senior Mortgage
are being assigned contemporaneously with the execution and delivery hereof to U.S. BANK
NATIONAL ASSOCIATION, a national banking association and AFFORDABLE HOUSING
CREDIT OPPORTUNITIES WAREHOUSE I LLC, a limited liability company duly organized and
validly existing under the laws of the State of Delaware;
WHEREAS, the Subordinated Governmental Lenders and Seller desire to enter into this
Inter -Creditor Agreement to set forth their respective rights, understandings and remedies vis-a-vis
amongst themselves.
NOW, THEREFORE, for and in consideration of the foregoing promises and for other good
and valuable consideration, the parties agree as follows:
1. Agreement amongts Subordinated Governmental Lenders and Sellers regarding
Rights to repayment of respective obligations:
(a) Definitions:
"Net Cash Flow" means the sum of (i) all cash received from rents, lease
payments and all other sources, but excluding (A) tenant security or other deposits (except to the
extent forfeited to the Borrower), (B) Capital Contributions and interest thereon (other than if used to
pay for an item deducted below in determining Net Cash Flow), (C) proceeds from Capital
Transactions and (D) interest on reserves not available for distribution, (ii) the net proceeds of any
insurance (including rental interruption insurance), other than fire and extended coverage and title
insurance, to the extent not used for rebuilding of the Apartment Complex, and (iii) any other funds
deemed available for distribution by the Borrower, less the sum of (x) all cash expenditures, and all
expenses unpaid but properly accrued, which have been incurred in the operation of the Borrower's
business (whether or not such expenditure is deducted, amortized or capitalized for tax purposes),
including the management fee to the Management Agent, (y) all payments on account of any loans
made to the Partnership (whether such loan is made by a Partner or otherwise), but not including any
amounts to be paid pursuant to the Development Agreement or pursuant to any loans where
repayment of such loans is to be made out of Net Cash Flow, and (z) any cash reserves for, among
other purposes, working capital, capital expenditures, repairs, replacements and anticipated
expenditures, in such amounts as may be required by the Project Lenders or advisable for the
operation of the Borrower.
"Cash Available For Subordinate Debt Service" means the portion of Net
Cash Flow remaining after applying Net Cash flow to amounts that, in accordance with the Project
Documents, must be satisfied prior to payments from Net Cash Flow to either the Seller Loan or
Deferred Developer Fee.
"Deferred Developer Fee" has the meaning set forth in the Development
Agreement between HK Palmetto Developer LLC and the Borrower.
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2. Waterfalls for Cash Available for Subordinated Debt Service.
(a) The Subordinated Governmental Lenders will not participate or have a right
to Net Cash Flow generated by the Project during the first thirty six (36) months of the Senior
Mortgage interest only period. Any such Net Cash Flow shall be payable solely to the Seller to
reduce the obligations under the Subordinated Seller Loan Documents.
(b) After this initial 36 months period, Cash Available for Subordinated Debt
Service shall be distributed as follows:
First, to satisfy accrued but unpaid interest pursuant to the Subordinated
Seller Loan Documents and to the Deferred Developer Fee until paid in full.
Second, 50% of Cash Available for Subordinated Debt Service shall be paid
to service unpaid obligations pursuant to the Subordinated Seller Loan Documents. The remaining
50% of Cash Available for Subordinate Debt Service shall be paid at the same time pro rata to the
HFA and City in proportion to the outstanding obligations due the HFA and City, respectively.
(c) Notwithstanding the foregoing obligations due to the County for its $900,000
non-recourse Home loan, which is due and payable on August 1, 2045.
3. Parri-Passu Rights. It is the express understanding of each of the Subordinated
Governmental Lenders and Seller (collectively "Subordinated Lender(s)") that each of their
respective liens upon and security interest in the Project are on a parri-passu pro -rata basis as
computed by comparing the respective principal and accrued interest amount due each respective
Subordinated Lenders as compared to the total amount of principal and interest due all Subordinated
Lenders. Each Subordinated Lender agrees that it shall not, unless agreed to by all Subordinated
Lenders, take or cause to be taken any action, including without limitation, the commencement of
any legal or equitable proceeding, the purpose of which is, or could be, to give such Subordinated
Lender any preference or priority against the other Subordinated Lenders. If any Subordinated
Lender receives any payment with respect in contravention of the terms hereof, such Subordinated
Lender shall promptly advance such amounts to the appropriate Subordinated Lender. By execution
hereof, the Subordinated Lenders agree that each of the Subordinated Lenders shall have a pari -passu
interest in the lien upon and security interest in the Project irrespective of the time of recording or
prior dignity of lien and/or security interest of the underlying loan documents.
4. Other Agreements Among the Subordinated Lenders.
(a) Non -Reliance. No Subordinated Lender makes to any other Subordinated
Lender any representation, assumes any responsibility other than as set forth in this Agreement
between each Subordinated Lender. Each Subordinated Lender acknowledges that it has conducted
its own independent investigation into the financial condition, creditworthiness, business or
operations of the Borrower.
(b) Cooperation. Each Subordinated Lender agrees to fully cooperate with the
other Subordinated Lender so that the terms and provisions of this Inter -Creditor Agreement may be
promptly and fully carried out. Each Subordinated Lender also agrees, from time to time, to execute
and deliver such other agreements, documents or instruments and to take such other actions as may
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be reasonably necessary or desirable to effectuate the terms, provisions and the intent of this Inter -
Creditor Agreement.
(c) Transfers. No Subordinated Lender will further sell, transfer or dispose of
any interest in the Notes or in any evidence of indebtedness thereunder unless such purchaser
transferee shall agree, in writing, to be bound by the terms of this Inter -Creditor Agreement.
(d) FHFC Extended Low -Income Housing Agreement. No modification or
revisions to the FHFC Extended Low -Income Housing Agreement will be approved by the Borrower
without the prior consent of the Subordinated Governmental Lenders, which consent will not be
unreasonably withheld, conditioned or delayed provided the commitment to the 45 year affordability
period is not reduced.
5. Bankruptcy. In the event Borrower files a petition for relief under any chapter of the
United States Bankruptcy Code, Borrower agrees that the Subordinated Lenders shall be entitled to,
and Borrower hereby consents to immediate relief from the automatic stay imposed by the
Bankruptcy Codes to take any and all actions necessary to enforce any rights Subordinated Lenders
may have under this Agreement, the loan documents promissory notes or security agreements
including, but not limited to, the commencement or continuation of the foreclosure of liens or
security interest, or otherwise compel the specific performance of any obligation of Borrower under
this Agreement. Borrower further agree that the filing of any petition for relief under the Bankruptcy
Code which postpones, prevents, delays or otherwise hinders the Subordinated Lenders' ability to
enforce their rights under this Agreement or any loan documents, shall be subject to dismissal.
6. Agreement Not a Novation. This Agreement is an agreement, and is not intended by
the parties to be a novation of any loan documents, mortgage modifications, promissory notes,
security agreement or otherwise, in any way, to impair the liens granted therein. The parties agree
that except as expressly modified herein, all terms, conditions, rights and obligations under the
Subordinated Lender Loan Documents described on Exhibits A-1 and A-2 are hereby reaffirmed and
shall otherwise remain in full force and effect as originally written and agreed. Unless otherwise
expressly stated herein, the parties to this Agreement do not intend to alter the Borrower obligations
which are the subject of this Agreement.
7. Reaffirmation of Existing Documents. Except as specifically set forth herein, each of
the Subordinated Lender Loan Documents described on Exhibits A-1 and A-2 or understandings by
and between the Borrower and each of the Subordinated Lenders are hereby ratified and confirmed.
Borrower acknowledges and reaffirms the bona fide nature of the indebtedness as evidenced by the
Subordinated Lender Loan Documents described on Exhibit A-1 and A-2 and represents that it has
no defense, counterclaim or set-off against any of the obligations due each of the Subordinated
Lenders under the Subordinated Lender Loan Documents described on Exhibits A-1 and A-2. The
parties agree that in the event of any conflict between the provisions of this Inter -Creditor Agreement
and the provisions of the Subordinated Lender Loan Documents described on Exhibits A-1 and A-2
or other documents that the provisions of this Inter -Creditor Agreement shall control.
8. Rights are Cumulative. This Agreement shall be construed to give Subordinated
Lenders the greatest possible cumulative rights and remedies. In addition, in the event of any
apparent conflict or ambiguity between the Subordinated Lender Loan Documents described on
Exhibit A-1 and A-2, this Agreement, or any other agreement entered into in connection herewith,
the terms, provisions and intent of this Agreement shall govern.
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9. No Release or Waiver. Nothing in this Agreement is intended to be nor can be
construed or relied upon as evidencing a release or waiver of any of Subordinated Lenders rights
under any other Subordinated Lender Loan Documents descried on Exhibits A-1 and A-2, including
without limitation, any right against any other person or entity not a party to this Agreement.
10. General/Miscellaneous.
(a) Each of the parties hereto covenant and agree, with each other, that in the
event any party is required at any time to execute such other documents to clarify the order of
priority of lien or claims to assets, consistent with this Agreement that each shall do so upon written
request of the other within five (5) business days of receipt of such written request. All notices
required under this Agreement shall be deemed to have been duly given: (i) three (3) days after the
deposit in the United States Mail, postage prepaid; or (ii) two (2) days after deposited in a nationally
recognized overnight courier service; or (iii) on the day of the personal delivery, if addressed or
delivered to each of the parties at their respective address as set forth on the signature pages of this
Agreement.
(b) In the event that any of the Subordinated Lenders determines to exercise their
remedies following the occurrence of a default or event of default under such Subordinated Lender's
respective loan documents, or to exercise any other remedies that such Subordinated Lender may
have with respect to Borrower assets or collateral pledged to any Subordinated Lender, such
Subordinated Lender will give the other Subordinated Lender at least fourteen (14) days' notice in
writing, specifying the nature of the default or event of default that has occurred and the action
proposed to be taken by such Subordinated Lender in connection therewith.
(c) This Agreement shall be binding upon and inure to the benefit of the parties
and their respective successors, and assigns. If any provision of this Agreement or application
thereof to any person or circumstance shall be held invalid or unenforceable to any extent, the
remainder of this Agreement and the application of such provisions to other persons or circumstances
shall not be effected and shall be enforced to the greatest extent permitted by law. This Agreement
shall be governed by and construed under the laws of the State of Florida, applicable to contracts to
be wholly performed in the State of Florida.
(d) Except as provided in this Agreement, no Subordinated Lender shall have any
liability to the other Subordinated Lenders for actions that such Subordinated Lender, in good faith,
takes or omits with respect to its collateral, or the indebtedness secured thereby, including, without
limitation, actions with respect to the creation, perfection or continuation of its liens, actions with
respect to the occurrence of an event of default and actions with respect to foreclosure upon sale,
disposition or collection.
(e) This Agreement shall constitute a continuing agreement between the parties
hereto until all obligations of Borrower are satisfied to each of the Subordinated Lenders or this
Agreement is modified or amended in writing.
(0 Each party represents and warrants it has the authority to enter into this
Agreement and that the person signing is duly authorized.
(g) This Agreement may be executed in one or more counterparts.
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(h) HFA is a party to this Agreement solely in its capacity as a Subordinated
Lender with respect to the HFA Note and not in its capacity as Issuer with respect to the Senior
Mortgage.
11. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS RELATED HERETO OR CONTEMPLATED HEREBY.
(Signature pages follow)
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IN WITNESS WHEREOF, the parties have executed this Inter -Creditor Agreement on the
date indicated.
HFA:
HOUSING FINANCE AUTHORITY OF
PINELLAS COUNTY, FLORIDA
WITNESSES: By:
Name:
By: Title:
Name:
By: Address:
Name: 26750 US Highway 19 North, Suite 110,
Clearwater, FL 33761
[SEAL]
STATE OF FLORIDA
COUNTY OF PINELLAS
The foregoing instrument was acknowledged before me by means of 0 physical presence or
0 online notarization, this day of , 2021, by , as
of the HOUSING FINANCE AUTHORITY OF PINELLAS
COUNTY, FLORIDA, on behalf of such entity. Said person is personally known to me or has
produced a valid driver's license as identification.
Notary Public
My Commission Expires:
[Signature Page to Inter -Creditor Agreement]
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IN WITNESS WHEREOF, the parties have executed this Inter -Creditor Agreement on the
date indicated.
COUNTY:
PINELLAS COUNTY, FLORIDA
WITNESSES: By:
Name:
By: Title:
Name:
By: Address:
Name:
STATE OF FLORIDA
COUNTY OF PINELLAS
[SEAL]
The foregoing instrument was acknowledged before me by means of 0 physical presence or
❑ online notarization, this day of , 2021, by , as
of , on behalf of such entity.
Said person is personally known to me or has produced a valid driver's license as identification.
Notary Public
My Commission Expires:
[Signature Page to Inter -Creditor Agreement]
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IN WITNESS WHEREOF, the parties have executed this Inter -Creditor Agreement on the date
indicated.
WITNESSES:
id-Ne44-de
ank Hibbard
Mayor
Approved as to Form:
Laura Mahony
Senior Assistant City Attorney
STATE OF FLORIDA
COUNTY OF PINELLAS
CITY OF CLEARWATER:
CITY OF CLEARWATER, FLORIDA
By: .jJ?
Jon Jennings
City Manager
Attest:
(4.. C) et.,Ce
Rosemarie Call
City Clerk
THE FOREGOING INSTRUMENT was acknowledged before me by means of physical
presence or ❑ online notarization, this 6/11` day of ta,taeml q-, 2021 by r Q. (rean'wL,
as C. j.ko, e,( of the City of Clearwater, Florida, on behalf of the City of
Clearwater, Florida. Such person vls personally known to me or has produced
as identification.
`u'¢�,�°,, Scott Burrows
• `' =COMMISSION # GG261179 li
4G.a Notary Public
; EXPIRES: October 1, 2022 My Commission Expires: (o ` o} J 2-c�ac}-
,„ m Bonded Nu Aaron Notary
[Signature Page to Inter -Creditor Agreement]
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IN WITNESS WHEREOF, the parties have executed this Inter -Creditor Agreement on the date
indicated.
SELLER:
GREENWOOD APARTMENTS, LLC, a
Florida limited liability company
WITNESSES: By: H K PALMETTO, LLC, a Massachusetts
limited liability company, it's Manager
By:
Name:
By: By:
Name: Name:
Title:
Address:
STATE OF
COUNTY OF
The foregoing instrument was acknowledged before me by means of ❑ physical presence or
❑ online notarization, this day of , 2021 by , as
oft' K PALMETTO, LLC, the managing member of
GREENWOOD APARTMENTS, LLC, a Florida limited liability company, who executed the within
Inter -Creditor Agreement and acknowledged to me that [s]he did such on behalf of on behalf of the
corporation and limited liability company. Said person is personally known to me or has produced a
valid driver's license as identification.
Notary Public
My Commission Expires:
[Signature Page to Inter -Creditor Agreement]
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IN WITNESS WHEREOF, the parties have executed this Inter -Creditor Agreement on the date
indicated.
PURCHASER:
PALMETTO PRESERVATION, LTD., a
Florida limited partnership
WITNESSES: By: HK Palmetto Holdings LLC, a
Massachusetts limited liability company,
By: its general partner
Name:
By: By:
Name: Name:
Title:
STATE OF
COUNTY OF
Address:
The foregoing instrument was acknowledged before me by means of 0 physical presence or
0 online notarization, this day of , 2021 by , as
of , the general
partner of PALMETTO PRESERVATION, LTD., a Florida limited partnership, who executed the
within Inter -Creditor Agreement and acknowledged to me that [s]he did such on behalf of on behalf
of the partnership and limited liability company. Said person is personally known to me or has
produced a valid driver's license as identification.
Notary Public
My Commission Expires:
[Signature Page to Inter -Creditor Agreement]
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Exhibit A-1
Subordinated Governmental Lender Loan Documents
City of Clearwater:
That certain Second Amended and Restated Promissory Note dated on or about the date
hereof and currently outstanding in the principal amount of $1,297,483.63, which is secured by a
Mortgage and Security Agreement dated April 3, 2002 and recorded April 4, 2002 in Pinellas
County Official Records Book 11928, Page 2494, as modified by that certain Mortgage
Modification Agreement and Receipt of Future Advance recorded May 15, 2012 in Pinellas
County Official Records Book 17582, Page 2508, as modified by Mortgage, Note and Other
Loan Documents, Assignment, Assumption and Modification Agreement dated on or about the
date hereof).
That certain Assignment and Assumption of Land Use Restriction Agreement, dated on
or about the date hereof, which assigns and assumes that Land Use Restriction Agreement, dated
as of April 1, 2002, and recorded April 4, 2002, in the Official Records Book 11928, Page 2470
in the Public Records of Pinellas County, Florida, as amended by that certain Amendment to
Land Use Restriction Agreement dated as of May 4, 2012 and recorded in Official Records Book
17582m Page 2522 in the Public Records of Pinellas County, Florida. .
Housing Finance Authority of Pinellas County, Florida
That certain Third Mortgage and Promissory Note Modification Agreement dated on or
about the date hereof and currently outstanding in the principal amount of $285,168.99 and is
secured by a Mortgage and Security Agreement in favor of Subordinate Lender dated April 3,
2002 and recorded April 4, 2002 in Pinellas County Official Records Book 11928, Page 2526, as
modified by that certain Mortgage and Promissory Note Modification Agreement recorded May
15, 2012 in Pinellas County Official Records Book 17582, Page 2519.
Pinellas County, Florida:
That certain Mortgage Assignment and Assumption Agreement dated on or about the
date hereof and currently outstanding in the principal amount of $900,000, which
is secured by a Mortgage and Security Agreement in favor of Subordinate Lender recorded
August 31, 2005, in Pinellas County Official Records Book 14570, Page 379-386, as modified
by Mortgage and Promissory Note Modification Agreement to defer all payments of the
principal indebtedness until August 1, 2045 (the Mortgage Date"), as recorded May 15, 2012, in
Pinellas County Official Records Book 17582, Pages 2514-2528.
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Exhibit A-2
Subordinated Seller Loan Documents
1. Promissory Note dated on or about the date hereof and currently outstanding in the
principal amount of $19,726,624.
2. Mortgage and Security Agreement dated on or about the date hereof to be recorded in the
Official Records of Pinellas County, Florida.
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Exhibit B
Legal Description
PARCEL 1:
All that certain parcel of land lying and being in the County of Pinellas, State of Florida,
more particularly described as follows:
The Southwest 1/4 of the Southeast 1/4 of the Northwest 1/4 of Section 10, Township 29
South, Range 15 East, LESS AND EXCEPT each of the following: The North 122 feet of the
West 175 feet thereof, and the portion thereof described as: Begin at the Southwest corner
of said Southwest 1/4 of Southeast 1/4 of Northwest 1/4 for Point of Beginning; and run
thence North 0°7'41" East 663.23 feet along the fractional section line; thence South
89°2329" East 13.6 feet; thence South 0°4'7" East 643.96 feet; thence along a curve to
the left whose chord bears South 44°37'21" East 21.45 feet and whose radius is 15 feet;
thence South 89°16'7" East 633.86 feet; thence South 0°6'30" West 2.9 feet; thence North
89°23'8" West 664.76 feet to Point of Beginning, lying and being in Pinellas County, Florida.
AND LESS AND EXCEPT THE FOLLOWING PARCEL:
A portion of the Northwest 1/4 of Section 10, Township 29 South, Range 15 East, Pinellas
County, Florida, more particularly described as follows:
From the Southwest corner of the Southeast 1/4 of the Northwest 1/4 of said Section 10,
Township 29 South, Range 15 East, run North 30.0 feet; thence East 30.0 feet for a Point of
Beginning; thence S 89°23'45.35" East, 60.00 feet; thence N 50°00'00.00" West, 30.0000
feet; thence N 15°00'00.00" West, 100.00 feet; thence N 05°00'00.00" West, 115.7269
feet; thence S 00°15'36.94" West, 230.5325 feet to the Point of Beginning.
PARCEL 2:
Lots 13 and 14, Block B, of NO. 1 SPRINGFIELD SUBDIVISION, LESS AND EXCEPT the
South 6 feet of said Lot 13, according to the Map or Plat thereof, as recorded in Plat Book 3,
Page 56, of the Public Records of Pinellas County, Florida.
PARCEL 3:
A portion of the North 122 feet of the West 175 feet of the Southwest 1/4 of the Southeast
1/4 of the Northwest 1/4 of Section 10, Township 29 South, Range 15 East, Pinellas County,
Florida, being further described as follows:
From the Northwest corner of the Southwest 1/4 of the Southeast 1/4 of the Northwest 1/4
of Section 10, Township 29 South, Range 15 East, Pinellas County, Florida; thence South
89°09'34" East along the Northerly boundary thereof a distance of 175.00 feet; thence
South 00°14'59" West, 112.91 feet to the Point of Beginning; thence continue South
00°14'59" West, 9.09 feet; thence North 89°09'34" West, 13.60 feet; thence North
56°53'48" East, 16.28 feet to the Point of Beginning.
7497954_1
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