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HomeMy WebLinkAboutContract 53776-LA1CSC No. 53776-LA1 LOAN ASSUMPTION AGREEMENT THIS LOAN ASSUMPTION AGREEMENT (the Assumption Agreement) is made and entered into as of September 21, 2023, by and between New Leaf Community Services, a Texas non-profit corporation (Original Borrower), 4444 Quail Trail, LLC, a Texas limited liability company (Assuming Bon-ower) and City of Fort Worth, a Texas municipal corporation (Lender). BACKGROUND The following provisions are a part of this Assumption Agreement and are acknowledged as being true and correct by all parties hereto; A. On June 30, 2020, Original Borrower and Lender entered into a HOME Developer Rental Contract (Loan Agreement) which contained the terms of a loan from Lender to the Original Borrower in the original principal amount of $500,000 (Loan Agreement), a copy of which is attached hereto as Exhibit A. On the same date, Original Borrower executed a promissory note (Note), a copy of which is attached hereto as Exhibit B, in the original principal amount of $500,000.00, payable to the order of Lender. The Note is secured by a Deed of Trust Security Agreement -Financing Statement (Deed of Tr(st) dated June 30, 2020, recorded under Clerk's File No. D220187153, Official Public Records, Tarrant County, Texas, covering the property described on Exhibit C attached hereto an incorporated herein (the Property). The Property is subject to Deed Restrictions (Deed Restrictions) dated June 30, 2020, recorded under Clerk's File No. D220187151, Official Public Records, Tarrant County, Texas. The Loan Agreement, Note, Deed of Trust, and other documents between Lender and Original Borrower, including the Deed Restrictions, are collectively referred to as the Loan Documents. B. Original Borrower has conveyed the Property to Assuming Borrower by a Warranty Deed dated the same date as this Assumption Agreement, and Assuming Borrower has agreed to assume all of Original Borrower's liabilities and obligations under the Loan Documents. NOW, THEREFORE, for and in consideration of $10.00 and other good and valuable consideration, the receipt and sufficiency of which are hereby confessed and acknowledged, the parties hereto agree as follows: 1. From and after the date hereof, Assuming Borrower hereby (i) assumes and agrees to pay each and every obligation of the Original Borrower set forth in the Loan Documents, including, without limitation, the obligation to make installment payments of principal and interest; (ii) agrees to observe and perform all of the terms, covenants and conditions on the part of the Original Borrower as set forth in the Loan Documents; (iii) and agrees to observe and perform all of the terms, covenants and conditions under and pursuant to any and all other documents the provisions of which secure the payment of the Note or relate to the Loan Documents, 2. Original Borrower and Assuming Borrower hereby acknowledge, agree and warrant that (i) there are no rights of offset or defenses of any kind, whether legal, equitable or otherwise, which would enable either of them to avoid or delay timely performance of their obligations under the Loan Documents, and (ii) there are no claims of any kind or nature against the property described in the Deed of Trust. 3. Original Borrower is hereby released from its obligations under the Loan Documents. 4. This Assumption Agreement constitutes the entire agreement of the parties hereto and shall not be amended unless such amendment is in writing and executed by each of the parties hereto. This Assumption Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns. OFFICIAL RECORD Loan Assumption Agreement Page I CITY SECRETARY City of Fort Worth FT. WORTH, TX This Agreement shall be governed in all respects by the laws of the State of Texas. Venue shall lie only in a court of competent jurisdiction in Fort Worth, Texas. THE WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. Reinaindei• of the page intentionally blank; signature pages follow. Loan Assumption Agreement Page 2 City of Fort Worth EXECUTED on the day and year first above written. LENDER: CITY OF FORT WORTH a Texas municipal corporation By: ���1 Fernando Costa, Assistant City Manager STATE OF TEXAS COUNTY OF TARRANT The foregoing instrument was acknowledged before me on this 21st day of September, 2023, by Fernando Costa, Assistant City Manager of the City of Fort Worth, a Texas municipal corporation, on behalf of said corporation. Loan Assumption Agreement City of Fort Worth otary Public, State of Te) Signature Page ORIGINAL BORROWER: NEW LEAF, CO�MVNITY SERVICES, a Texas onpfit o oration By: R. Steve Christian, Board Chair Date: September 21, 2023 STATE OF TEXAS COUNTY OF TARRANT The foregoing instrument was acknowledged before me on this 21st day of September, 2023, by R. Steve Christian, Board Chair of New Leaf Community Services, a Texas non-profit corporation, on behalf of said non-profit corporation, r RICHARD B, CARROLL Notary Public, State of Texas °v Comm. Expires 05-18-2024 ''nnu�a`CP tary ID 4065647 Loan Assumption Agreement City of Fort Worth Notary Public, Stafe of Texas Signature Page ASSUMING BORROWER: 4444 QUAIL TRAIL, LLC a Texas limited liability company By: NEW LEAF COMMUNITY SERVICES, a Texa�aaprofrt corporation its sol- ernbe By. R. Steve Christian, Board Chair STATE OF TEXAS COUNTY OF TARRANT The foregoing instrument was acknowledged before me on this 21st day of September, 2023, by R. Steve Christian, Board Chair of New Leaf Community Services, a Texas non-profit corporation, the sole member of 4444 Quail Trail, LLC, a Texas limited liability company, on behalf of said limited liability company. o`"ra���• RICHARD B. CARROLL �O�- Notary Public, State of Texas q+Pc Comm. Expires 05-18-2024 '''i,Rf `FALJ Notary ID 4065647 AFTER RECORDING, RETURN TO: Fort Worth Housing Finance Corporation c/o City of Fort Worth City Attorney's Office 200 Texas Street Fort Worth, Texas 76102 Attention: Leslie L. Hunt Q _ �E1a&6.rllu.110 Notary Public, State of Texas Loan Assumption Agreement Signature Page City of Fort Worth CITY OF FORT WORTH INTERNAL ROUTING PROCESS: Approval Recommended: Contract Compliance Manager: By signing I acknowledge that I am the person responsible for the monitoring and administration By. �`�` of this contract, including ensuring all Name: Victor T. Turner performance and reporting requirements. Title: Director t-, �' * Approved as to Form and Legality: By: Chad LaVoque(Dec 20,202315:28 CST) Name: Chad LaRoque Title: Housing Development & Grants Manager By: Le ie L. Hunt (Dec 22 :57 CST) Name: Leslie L. Hunt p44pn Title: Senior Assistant City Attorney City Secretary: p � FOrtr' p4 dd Pvoo 8 °oo =A Contract Authorization: aaQn%o'000 M&C: 20-0062 By: °ap4a4 Name: Jannette S. Goodall Title: Acting City Secretary OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX Loan Assumption Agreement Signature Page City of Fort Worth EXHMIT A Promissory Note (attached) Loan Assumption Agreement Exhibit A City of Fort Worth Promissory Note HOME Funds Date: July 30, 2020 Borrower: New Leaf Community Services, a Texas nonprofit corporation Borrower's Mailing Address: New Leaf Community Services P.O. Box 100103 Fort Worth, TX 76185 Lender: City of Fort Worth, a Texas municipal corporation Place for Payment: City of Fort Worth Neighborhood Services Department Attn: Assistant Director 200 Texas Street Fort Worth, Tarrant County, Texas 76102, or any other place that Lender may designate in writing. Principal Amount: $500,000.00 Loan Authority: The loan evidenced by this HOME Note (the "HOME Loan") is being made pursuant to the HOME Investment Partnerships Program authorized under Title II of the Cranston -Gonzalez National Affordable Housing Act of 1990, as amended; 42 USC 12701 et seq. ("HOME Program") and the HOME Investment Partnerships Program Final Rule, as amended, 24 CFR Part 92 et seq. (the "HOME Regulations") with HOME funds for the development of the Quail Trail Apartments, a Permanent Supportive Housing multifamily complex located in Fort Worth, Texas (the "project"). Annual Interest Rate: 0% Maturity Date: The termination of the Affordability Period defined in the HOME Contract, City Secretary Contract No. 53776, between Borrower and Lender for the HOME Loan ("HOME Contract"). Annual Interest Rate on Matured, Unpaid Amounts: 12% PROMISSORY NOTE — HOME FUNDS Page 1 New Leaf Community Services — Quail Trail Apartments rev. 07-29-20 Terms of Payment: The Principal Amount is a deferred forgivable loan. Payment of the Principal Amount will only be required if Borrower does not comply with the terms of the HOME Contract, the HOME Program or the HOME Regulations, or the terms of this HOME Note and any instrument evidencing or securing the HOME Loan including certain Deed Restrictions between Borrower and Lender (the "HOME Deed Restrictions"), (collectively, the "HOME Loan Documents"), This HOME Note is the Note required in the HOME Contract and has been executed and delivered in accordance with that contract. The funds advanced by Lender are HOME funds and the HOME Contract requires that the 6 residential rental units described below and located on the Property must qualify and remain affordable rental housing in accordance with the HOME Program and the HOME Regulations for the 20-year Affordability Period more particularly defined in the HOME Contract. The obligations described in the HOME Contract pertaining to the HOME Program and the HOME Regulations including the Affordability Period as well as the HOME Loan evidenced by this HOME Note will be in default if the 6 HOME - assisted rental units more particularly described in the HOME Contract do not remain affordable rental housing for the duration of the Affordability Period. In the event of such default, Lender may invoke any remedies provided in the HOME Contract or the HOME Deed of Trust (hereinafter defined) for default. On performance of the obligations described in the HOME Contract and the terms and conditions of the HOME Loan Documents, the HOME Loan will be forgiven. Security for Payment: This HOME Note is secured by a Deed of Trust Security Agreement - Financing Statement dated July 30, 2020 from Borrower to Jo Ann Pate, Trustee or Leann Guzman, Trustee (the "HOME Deed of Trust") which covers the personal property described therein and the following real property: Being all of Lot C, Blockl, of FAIR OAKS ADDITION, an addition to the City of Fort Worth, filed in Tarrant County Clerk's Instrument No. D220120858 in Tarrant County, Texas, situated in the John Preston Lusk Survey, Abstract 947, containing 3.047 acres or 132,740 square feet, more or less Other Security for Payment: As set forth in the HOME Contract and the HOME Deed Restrictions. If the Principal Amount is not forgiven, Borrower promises to pay to the order of Lender the Principal Amount plus interest. This HOME Note is payable at the Place for Payment and according to the Terms of Payment. All unpaid amounts are due by the Maturity Date. After the Maturity Date, Borrower promises to pay any unpaid principal balance plus interest at the Annual Interest Rate on Matured, Unpaid Amounts. PROMISSORY NOTE — HOME FUNDS Page 2 New Leaf Community Services — Quail Trail Apartments rev. 07-29-20 If Borrower defaults in the payment of this HOME Note or in the performance of its obligations under the HOME Contract or the HOME Deed Restrictions , or in the performance of any obligation in any instrument securing or collateral to this HOME Note, Lender may declare the unpaid Principal Amount, any earned interest, and any other amounts owed on this HOME Note immediately due and payable. Borrower and each surety, endorser, and guarantor waive all demand for payment, presentation for payment, notice of intention to accelerate maturity, notice of acceleration of maturity, protest, and notice of protest, to the extent permitted by law. Notwithstanding anything to the contrary, if a monetary event of default occurs under the terms of any ofthe HOME Loan Documents, prior to exercising any remedies Lender shall give Borrower written notice of such default. Borrower shall have a period of 10 days after such notice is given within which to cure the default prior to exercise of remedies by Lender under the HOME Loan Documents. Notwithstanding anything to the contrary, if a non -monetary event of default occurs under the terms of any of the HOME Loan Documents, prior to exercising any remedies, Lender shall give written notice of such default. If the default is reasonably capable of being cured within 30 days, Borrower shall have such period to effect a cure prior to exercise of remedies by Lender under the HOME Loan Documents. If the default is such that it is not reasonably capable of being cured within 30 days, and if Borrower (i) initiates corrective action within said period, and (ii) diligently, continually, and in good faith works to effect a cure as soon as possible, then Borrower shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Lender. In no event shall Lender be precluded from exercising remedies if its security becomes or is about to become materially j eopardized by any failure to cure a default or the default is not cured within 180 days after the first notice of default is given. If the default is not cured after notice within the time periods stated above, Borrower and each surety, endorser, and guarantor waive all demand for payment, presentation for payment, notice of intention to accelerate maturity, notice of acceleration of maturity, protest, and notice of protest, to the extent permitted by law. Borrower also promises to pay reasonable attorney's fees and court and other costs if this HOME Note is placed in the hands of an attorney to collect or enforce this HOME Note. These expenses will bear interest from the date of default at the Annual Interest Rate on Matured, Unpaid Amounts. Borrower will pay Lender these expenses and 'interest on demand at the Place for Payment. These expenses and interest will become part of the debt evidenced by the HOME Note and will be secured by any security for payment. Interest on the debt evidenced by this HOME Note will not exceed the maximum rate or amount of non -usurious interest that may be contracted for, taken, reserved, charged, or received under law. Any interest in excess of that maximum amount will be credited on the Principal Amount or, if the Principal .Amount has been paid, refunded. On any acceleration or required or permitted prepayment, any excess interest will be canceled automatically as of the acceleration or prepayment or, if the excess interest has already been paid, credited on the Principal Amount or, if the Principal Amount has been paid, refunded. This provision overrides any conflicting provisions in this HOME Note and all other instruments concerning the debt. PROMISSORY NOTE — HOME FUNDS Page 3 New Leaf Community Services — Quail Trail Apartments rev. 07-29-20 Each Borrower, as applicable, is responsible for all obligations represented by this HOME Note. Borrower may prepay this HOME Note in any amount at any time before the Maturity Date without penalty or premium; provided however, early payment will not relieve Borrower of its obligations under the HOME Contract or the HOME Regulations including but not limited to its obligation to provide the six HOME -assisted units throughout the Affordability Period. When the context requires, singular nouns and pronouns include the plural. The indebtedness evidenced by this HOME Note is and shall be subordinate in right of payment to the prior payment in full of the indebtedness more particularly described in that one certain Loan Agreement of even date between Borrower and the Fort Worth Housing Finance Corporation to be hereafter evidenced by a Promissory Note of even date made by Borrower and payable to the Fort Worth Housing Finance Corporation ("FWHFC") in the original principal amount of $1,200,000.00 (the `FFWHFC Loan"), The HOME Deed of Trust securing this HOME Note is and shall be subject and subordinate in all respects to the liens, terms, covenants and conditions of the documents evidencing or securing the FWHFC Loan ("FWHFC Loan Documents"), Subject to any cure periods provided in the FWHFC Loan Documents, if there is a default in payment of any part of principal or interest of the FWHFC Loan, or a breach of any covenants contained in the FWHFC Loan Documents, the debt evidenced by this HOME Note will immediately become payable at the option of Lender. If Borrower fails to perform any of Borrower's obligations in the FWHFC Loan Documents, Lender may perform those obligations and be reimbursed by Borrower, on demand, at the Place for Payment for any amounts advanced, including attorney's fees, plus interest on those amounts from the date of payment at the Annual Interest Rate on Matured, Unpaid Amounts. The amount to be reimbursed will be secured by all instruments securing this HOME Note. A default exists under this HOME Note if (1) (a) Borrower or (b) any other person liable on any part of this HOME Note (an "Other Obligated Party") fails to timely pay or perform any obligation or covenant in any written agreement between Lender and Borrower or such Other Obligated Party; (2) any warranty, covenant, or representation in this HOME Note or in any other written agreement between Lender and Borrower or any Other Obligated Party is materially false when made; (3) a receiver is appointed for Borrower, any Other Obligated Party, or any property on which a lien or security interest is created as security (the "Collateral Security") for any part of this HOME Note; (4) any Collateral Security is assigned for the benefit of creditors other than the holder(s) of the Senior Indebtedness; (5) a bankruptcy or insolvency proceeding is commenced by Borrower or an Other Obligated Party; (6) (a) a bankruptcy or insolvency proceeding is commenced against Borrower or an Other Obligated Party and (b) the proceeding continues without dismissal for 90 days, the party against whom the proceeding is commenced admits the material allegations of the petition against it, or an order for relief is entered; (7) any of the following PROMISSORY NOTE —HOME FUNDS Page 4 New Leaf Community Services — Quail Trail Apartments rev. 07-29-20 parties is dissolved, begins to wind up its affairs, is authorized to dissolve or wind up its affairs by its governing body or persons, or any event occurs or condition exists that permits the dissolution or winding up of the affairs of any of the following parties: (i) Borrower, or (ii) an Other Obligated Party; and (8) any Collateral Security is materially impaired by loss, theft, damage, levy and execution, issuance of an official writ or order of seizure, or destruction, unless it is promptly replaced with insurance proceeds, collateral security of like kind and quality or restored to its former condition. The execution and delivery of this HOME Note and HOME Loan Documents are required under the HOME Contract. If any provision of this HOME Note conflicts with any provision of the HOME Contract, the HOME Deed of Trust, the HOME Deed Restrictions, or any other document evidencing the same transaction between Lender and Borrower, the provisions of the HOME Contract will govern to the extent of the conflict. Capitalized terms not defined herein shall have meanings assigned to them in the HOME Contract This HOME Note will be construed under the laws of the state of Texas without regard to choice -of -law rules of any jurisdiction. This HOME Note is a nonrecourse obligation of Borrower. Neither Borrower nor any nor any other party shall have any personal liability for repayment of the HOME Loan described in the HOME Contract. The sole recourse of Lender under the HOME Loan Documents for repayment of the HOME Loan shall be the exercise of its rights against the Security for Payment. [SIGNATURE FOLLOWS] PROMISSORY NOTE — HOME FUNDS Page 5 New Leaf Community Services — Quail Trail Apartments rev. 07-29-20 THE HOME CONTRACT, HOME NOTE, HOME DEED OF TRUST, AND HOME DEED RESTRICTIONS CONSTITUTE THE FINAL AGREEMENT OF THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NEW LEAF COMMUNITY SERVICES, a Ted /noSTeorporation By: / A, Steve Christian, Chair PROMISSORY NOTE — HOME FUNDS Page 6 New Leaf Community Services — Quail Trail Apartments rev. 07-29-20 EXIIIBIT B Legal Description Being all of Lot C, Block 1, FAIR OAKS ADDITION, an Addition to the City of Fort Worth, Tarrant County, according to plat thereof recorded in D220120858, Real Property Records, Tarrant County, Texas. Loan Assumption Agreement Exhibit B City of Fort Worth