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HomeMy WebLinkAboutContract 61698-CD1LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 1 FW Babers Manor LP to City of Fort Worth NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. Leasehold Deed of Trust Security Agreement - Financing Statement HOME Funds Terms Date: August 1, 2024 Grantor: FW Babers Manor, LP, a Texas Limited Partnership Grantor's Mailing Address: FW Babers Manor, LP c/o Fort Worth Affordability, Inc. 1407 Texas Street Fort Worth, TX 76102 With a copy to: Babers Manor MBS SLP, Inc. 100 N. Broadway, Suite 100 St. Louis, MO 63102Attention: General Counsel And to: Klein Hornig LLP 101 Arch Street, Suite 1101 Boston, MA 02110 Attention: Daniel Rosen And to: Coats Rose, P.C. 9 Greenway Plaza, Suite 1000 Houston, TX 77046 Attention: Lauren B. Hodge And to: LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 2 FW Babers Manor LP to City of Fort Worth c/o Hunt Capital Partners, LLC 15910 Ventura Boulevard, Suite 1100 Encino, California 91436 And to: Nixon Peabody LLP 799 9th Street NW Suite 500, Washington, DC 20001-5327 Attention: Matthew W. Mullen Trustee: Leslie L. Hunt or Denis McElroy Trustee's Mailing Address: The City of Fort Worth 100 Fort Worth Trail (previously 100 Energy Way) Fort Worth TX 76102 Tarrant County Lender: City of Fort Worth, a Texas home rule municipality Lender's Mailing Address: c/o Neighborhood Services Department ATTN: Projects Team 100 Fort Worth Trail (previously 100 Energy Way) Fort Worth, Texas 76102 Loan Authority: Loan Trust Security Agreement Financing Statement (this Deed of Trust pursuant to the HOME Investment Partnerships Program authorized under Title II of the Cranston-Gonzales National Affordable Housing Act of 1990, as amended, 42 USC 12701 et seq HOME Program Final Rule, as amended, 24 CFR Part 92 et seq. HOME Regulations HOME funds. Obligations Note Date: Original principal amount: $1,000,000.00 Borrower/Grantor: FW Babers Manor, LP Lender: City of Fort Worth Maturity Date: 40 years after Project Stabilization as defined in the HOME Contract, City Secretary Contract No. 61698, LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 3 FW Babers Manor LP to City of Fort Worth between Grantor and Lender, December 31, 2066. Terms of Payment: As provided in the Note In addition, Obligations shall include compliance by Grantor with the requirements of the HOME Program for the 20-year Affordability Period more particularly described in Section F. below. Property (including any improvements): Lease Date: August 1, 2024 Landlord: Cavile Public Facility Corporation Tenant: Grantor Premises: Real property in the City of Fort Worth, County of Tarrant, State of Texas commonly known as 4400, 4408, 4416, and 4424 Ramey Avenue, Fort Worth, TX 76105 as described in Legal Description Property ). Leasehold Estate: All of Tenant's rights under the Amended and Restated Ground Lease dated August 1, 2024 executed by and between Cavile Public Facility Corporation, Landlord, and FW Babers Manor, LP, Tenant Together with the following personal property to the extent owned by Grantor: All fixtures, supplies, building materials, and other goods of every nature now or hereafter located, used, or intended to be located or used on the Property; All plans and specifications for development of or construction of improvements on the Property; All contracts and subcontracts relating to the construction of improvements on the Property; All accounts, contract rights, instruments, documents, general intangibles, and chattel paper arising from or by virtue of any transactions relating to the Property; All permits, licenses, franchises, certificates, and other rights and privileges obtained in connection with the Property; All proceeds payable or to be payable under each policy of insurance relating to the Property; and All products and proceeds of the foregoing. Notwithstanding any other provision in this Deed of Trust, the term Property does not include personal effects used primarily for personal, family, or household purposes. In addition to creating a deed-of-trust lien on the Leasehold Estate and all the other Property described above, Grantor also grants to Lender a security interest in all of the LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 4 FW Babers Manor LP to City of Fort Worth above-described personal property pursuant to and to the extent permitted by the Texas Uniform Commercial Code. Prior Liens: The lien created by this Deed of Trust is and shall be subject and subordinate in all respects to the liens, terms, covenants and conditions of (i) the Multifamily Deed of Trust, Assignment of Leases and Rents and Security Agreement securing that certain Note (Multistate) dated August 1, 2024 made by Grantor and payable to Mason Joseph Company, LLC Senior Lender evidencing the indebtedness arising from the loan by Senior Lender to Grantor Senior Indebtedness that certain Subordination Agreement dated August 1, 2024 among Senior Lender and Subordination Agreement and (ii) a Promissory Note dated August 1, 2024, in the original principal amount of $100,000.00 made by the Fort Worth Housing Finance Corporation and payable to Fort Worth Affordability, Inc. PSH Loan This Deed of Trust is and shall be subject and subordinate in all respects to the liens, terms, covenants and conditions of the loan documents evidencing the Senior Indebtedness Senior Loan Documents as more fully set forth in the Subordination Agreement, and the liens, terms, covenants and conditions of the loan documents evidencing the PSH Loan (collectively the Senior FWAI Loan Documents . The rights and remedies of Lender and each subsequent assignee of the lien under this Deed of Trust are subject to the restrictions and limitations set forth in the Subordination Agreement. Subject the terms of the Subordination Agreement and to waiver, notice, grace and cure period, if any, provided in the Senior Loan Documents and/or the Senior FWAI Loan Documents, if default occurs in payment of any part of principal or interest of the Senior Indebtedness and/or the FWAI Loans, or in observance of any covenants contained in the Senior Loan Documents and/or the Senior FWAI Loan Documents, the entire debt secured by this Deed of Trust will immediately become payable at the option of Lender to the extent permitted by the Subordination Agreement. Any future refinancing by Grantor or any new or subordinate financing shall require the review and prior written approval of Lender for the purpose of ensuring compliance with the underwriting and subsidy layering requirements of the HOME Regulations, which approval shall not be unreasonably withheld, conditioned or delayed. Such approval will be based on review of the then-current financial information, underwriting and subsidy layering requirements, and may require renegotiation of the Loan terms to comply with the HOME Regulations. Renegotiation of the Loan term may include modification of the maturity date (if permitted by any senior lender), payment amount adjustment, or any other modification necessary to comply with the HOME Regulations. A refinance of the Senior Loan or any subsequent refinance shall not automatically cause repayment of the Loan. Notwithstanding the foregoing, refinancing by Grantor of the Senior Indebtedness will not require prior written approval of the City of Fort Worth so long as such refinancing would not increase the principal amount of the Senior Indebtedness beyond the original principal amount of the Senior Indebtedness (excluding any amounts having been advanced by Senior Lender for the protection of its security LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 5 FW Babers Manor LP to City of Fort Worth interest pursuant to the Senior Loan Documents), increase the interest rate of the Senior Indebtedness, or decrease the original maturity term of the Senior Indebtedness; provided however that the City must review and approve any loan documents, including subordination agreements, approval of which shall not be unreasonably withheld or delayed, herein. Lender agrees to re-subordinate the debt evidenced hereunder in the event that such senior debt is refinanced. The terms of this Deed of Trust and the Note are also subject to the limitations of the HUD Rider to Deed of Trust Other Exceptions to Conveyance and Warranty: The Permitted Exceptions set forth on attached hereto and incorporated herein for all purposes, to the extent that they relate to the Leasehold Estate. For value received and to secure performance of the Obligations, Grantor conveys the Property to Trustee in trust. Grantor warrants and agrees to defend the title to the Property, subject to the Other Exceptions to Conveyance and Warranty. On performance of the Obligations, including payment of the Loan and all other amounts secured by this Deed of Trust and performance of the requirements of the HOME Program, this Deed of Trust will have no further effect, and Lender will release it at Grantor's expense. Clauses and Covenants A. Grantor's Obligations Grantor agrees to- 1. perform all of Tenant's obligations under the Lease and Contract and deliver, on Lender's written request, satisfactory evidence of timely payment of all rents and other charges due under the Lease and Contract; 2. enforce Landlord's obligations under the Lease; 3. within 10 business days after receipt, deliver a copy of each notice received by Grantor from Landlord to Lender; 4. timely exercise each option to extend the term of the Lease as long as the Obligations remain unpaid or otherwise outstanding and concurrently deliver to Lender a copy of the notice doing so. If Grantor does not exercise an option to extend the term of the Lease, Lender may, at its option, exercise the option on behalf of Grantor. Grantor appoints Lender its attorney-in-fact to execute and deliver all instruments necessary to extend the term of the Lease or to exercise any other rights, powers, or privileges under the Lease in the event Grantor fails to LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 6 FW Babers Manor LP to City of Fort Worth do so; this power, being coupled with an interest, is irrevocable as long as the Obligations remain unpaid or are otherwise outstanding; 5. use commercially reasonable efforts to deliver to Lender, within 20 days after written request by Lender, an estoppel certificate from Landlord setting forth to the extent accurate (a) that the Lease has not been modified or, if it has been modified, the date of each modification (together with copies of each modification), (b) the date to which all rent has been paid by Tenant under the Lease, and (c) whether there are any defaults of Tenant under the Lease and, if there are, setting forth the nature of the default(s) in reasonable detail; 6. execute and deliver on the request of Lender any instruments required to permit Lender to cure any default under the Lease or preserve the interest of Lender in the Leasehold Estate; 7. defend leasehold title to the Property subject to the Other Exceptions to Conveyance and Warranty and preserve the lien's priority as it is established in this Deed of Trust; 8. obey all laws, ordinances, and restrictive covenants applicable to the Property; 9. if the lien of this Deed of Trust is not a first lien, pay or cause to be paid all prior lien notes pursuant to their respective terms and abide by or cause to be abided by all prior lien instruments; and 10. notify Lender of any change of address. Grantor agrees not to- 1. do or intentionally or knowingly permit anything to be done that will impair the security of this Deed of Trust or will be grounds for terminating the Lease unless cured within any applicable cure period; or 2. consent, without Lender's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, to (a) any waiver, cancellation, or amendment of any provision of the Lease or (b) the subordination of the Lease to any mortgage of the fee interest of Landlord in the Premises. Grantor represents that- 1. the Lease is enforceable; 2. except as set forth above, there are no amendments to the Lease; and 3. Grantor is not in default under the Lease and, to the best of Grantor's knowledge, Landlord is not in default under the Lease, and no event LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 7 FW Babers Manor LP to City of Fort Worth exists that, with the passage of time or the giving of notice, or both, would constitute a default under the Lease.: When used in this Deed of Trust or any of the other Loan Documents, the following officers of the Grantor: FW Babers Manor GP, LLC. B. Lender's Rights 1. Lender or Lender's mortgage servicer may appoint in writing a substitute trustee, succeeding to all rights and responsibilities of Trustee. 2. If the proceeds of the Loan are used to pay any debt secured by prior liens, Lender is subrogated to all the rights and liens of the holders of any debt so paid, subject to the Subordination Agreement. 3. Notwithstanding the terms of the Note to the contrary, and unless applicable law prohibits, all payments received by Lender from Grantor with respect to the Obligations or this Deed of Trust may, at Lender's reasonable discretion, be applied first to amounts payable under this Deed of Trust and then to amounts due and payable to Lender with respect to the Obligations, to be applied to late charges, principal, or interest in the order Lender in its discretion determines. 4. If Grantor fails to perform any of Grantor's obligations under this Deed of Trust, subject to prior written notice and cure period, Lender may perform those obligations and be reimbursed by Grantor on demand for any amounts so paid, including reasonable and actually incurred attorney's fees, plus interest on those amounts from the dates of payment at the rate stated in the Note for matured, unpaid amounts. The amount to be reimbursed will be secured by this Deed of Trust. 5. If there is a default on the Obligations or if Grantor fails to perform any of Grantor's obligations under this Deed of Trust and the default continues after any required notice of the default and the time allowed to cure , Lender may- a. declare any unpaid principal balance and earned interest on the Obligations immediately due; b. direct Trustee to foreclose this lien, in which case Lender or Lender's agent will cause notice of the foreclosure sale to be given as provided by the Texas Property Code as then in effect; and c. purchase the Property at any foreclosure sale by offering the highest bid and then have the bid credited on the Obligations. Notwithstanding anything to the contrary, if a monetary event of default occurs under the terms of any of the Loan documents, prior to exercising any remedies Lender shall give Grantor and each of the Partners of Grantor, as identified in the Amended and Restated Agreement of Limited Partnership of Grantor dated on or about the date hereof Partnership Agreement simultaneous written notice of such default. Grantor and each of its Partners on behalf of Grantor LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 8 FW Babers Manor LP to City of Fort Worth shall have a period of 15 days after such notice is given within which to cure the default prior to exercise of remedies by Lender under the Loan documents. Notwithstanding anything to the contrary, if a non-monetary event of default occurs under the terms of any of the Loan documents, prior to exercising any remedies, Len Partners, as identified in the Partnership Agreement, simultaneous written notice of such default. If the default is reasonably capable of being cured within 45 days, Grantor and each of its Partners on behalf of Grantor shall have such period to effect a cure prior to exercise of remedies by Lender under the Loan documents. If the default is such that it is not reasonably capable of being cured within 45 days, and if Grantor or any of its Partners (a) initiates corrective action within said period, and (b) diligently, continually, and in good faith works to effect a cure as soon as possible, then Grantor or each of its Partners on behalf of Grantor 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, subject to any cure periods included herein, if its security becomes or is about to become materially jeopardized 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, Grantor 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. 6. Lender may remedy any default without waiving it and may waive any default without waiving any prior or subsequent default. 7. If Grantor fails to perform any of its obligations, covenants, or agreements under the Lease or Contract, Lender may do any act it deems reasonably necessary to cure such failure. During an Event of Default, Lender may enter the Premises with or without notice and do anything that Lender reasonably deems necessary or prudent to do. 8. If Lender elects to make any payments or do any act or thing required to be paid or done by Grantor as Tenant under the Lease, Lender will be fully subrogated to the rights of Landlord, and any sums advanced by Lender are a part of the Obligations. C. Trustee's Rights and Duties If directed by Lender to foreclose this lien, Trustee will- 1. either personally or by agent give notice of the foreclosure sale as required by the Texas Property Code as then in effect; 2. sell and convey all or part of the Property "AS IS" to the highest bidder for cash with a general warranty binding Grantor, subject to the Prior Lien and to the Other Exceptions to Conveyance and Warranty and without representation or warranty, express or implied, by Trustee; 3. from the proceeds of the sale, pay, in this order- LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 9 FW Babers Manor LP to City of Fort Worth a. expenses of foreclosure, including a reasonable commission to Trustee; b. to Lender, the full amount of principal, interest, reasonable attorney's fees, and other charges due and unpaid; c. any amounts required by law to be paid before payment to Grantor; and d. to Grantor, any balance; and 4. to the extent permitted by applicable law, be indemnified, held harmless, and defended by Lender against all costs, expenses, and liabilities incurred by Trustee for acting in the execution or enforcement of the trust created by this Deed of Trust, which includes all court and other costs, including reasonable attorney's fees, incurred by Trustee in defense of any action or proceeding taken against Trustee in that capacity. D. General Provisions 1. If any of the Property is sold under this Deed of Trust, Grantor must immediately surrender possession to the purchaser. If Grantor fails to do so, Grantor will become a tenant at sufferance of the purchaser, subject to an action for forcible detainer. 2. Recitals in any trustee's deed conveying the Property will be presumed to be true, absent evidence to the contrary. 3. Proceeding under this Deed of Trust, filing suit for foreclosure, or pursuing any other remedy will not constitute an election of remedies. 4. This lien will remain superior to liens later created even if the time of payment of all or part of the Obligations is extended or part of the Property is released, unless a subordination agreement is executed by Lender. 5. If any portion of the Obligations cannot be lawfully secured by this Deed of Trust, payments will be applied first to discharge that portion. 6. Subject to the rights of senior lien holders, Grantor assigns to Lender all amounts payable to or received by Grantor from condemnation of all or part of the Property, from private sale in lieu of condemnation, and from damages caused by public works or construction on or near the Property. After deducting any expenses incurred, including reasonable attorney's fees and court and other costs, Lender will apply such amounts to reduce the Obligations and any excess proceeds shall be paid to Grantor. Lender will not be liable for failure to collect or to exercise diligence in collecting any such amounts. Grantor will immediately give Lender notice of any actual or known threatened proceedings for condemnation of all or part of the Property. Notwithstanding the above, and subject to the rights and requirements of any senior lien holder, in the event of any fire or other casualty to the Property or eminent domain proceedings resulting in condemnation of the Property or any part thereof, Grantor shall have the right to rebuild the Property, and to use all available insurance or condemnation proceeds therefor, provided that (a) LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 10 FW Babers Manor LP to City of Fort Worth such proceeds are sufficient to keep the Obligations in balance and rebuild the Property in a manner that provides adequate security to Lender for repayment or performance of the Obligations or if such proceeds are insufficient then Grantor shall have funded any deficiency, (b) Lender shall have the right to approve plans and specifications for any major rebuilding and the right to approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangement, and (c) no material default then exists under the Loan documents other than attributable to the casualty or condemnation. If the casualty or condemnation affects only part of the Property and total rebuilding is infeasible, then proceeds may be used for partial rebuilding and partial repayment of the Obligations in a manner that provides adequate security to Lender for repayment of the remaining balance of the Obligations, and any excess proceeds shall be paid to Grantor. 7. Subject to the rights of senior lien holders, Grantor assigns to Lender all present and future rent and other income and receipts from the Property pursuant to Chapter 64 of the Texas Property Code, as may be amended from time to time. If Grantor defaults in payment or performance of the Obligations or performance of this Deed of Trust, Lender may, upon notice, cause all rent and other income and receipts that have accrued but remain unpaid on the date of notice and that accrue on or after the date of notice to be paid to Lender. Payments to Lender under this paragraph shall begin within thirty days of the date of notice. Lender neither has nor assumes any obligations as lessor or landlord with respect to any occupant of the Property. possession of the Property. Lender will apply all rent and other income and receipts collected and this Deed of Trust in the order determined by Lender. Lender is not required to act under remedies. 8. Interest on the debt secured by this Deed of Trust will not exceed the maximum 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 of the debt or, if that 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 already paid, credited on the principal of the debt or, if the principal of the debt has been paid, refunded. This provision overrides any conflicting provisions in this and all other instruments concerning the debt. 9. In no event may this Deed of Trust secure payment of any debt that may not lawfully be secured by a lien on real estate or create a lien otherwise prohibited by law. 10. When the context requires, singular nouns and pronouns include the plural. 11. The term Note includes all extensions, modifications, and renewals of the Note and all amounts secured by this Deed of Trust. LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 11 FW Babers Manor LP to City of Fort Worth 12. Grantor agrees to (a) keep at Grantor's address, or such other place as Lender may approve, accounts and records reflecting the operation of the Property and copies of all written contracts, leases, and other instruments that affect the Property; (b) prepare financial accounting records in compliance with generally accepted accounting principles consistently applied; and (c), at Lender's request on reasonable notice from time to time, permit Lender to examine and make copies of such books, records, contracts, leases, and other instruments at any reasonable time. 13. Grantor agrees to deliver to Lender, at Lender's request from time to time, internally prepared financial statements of Grantor prepared in accordance with generally accepted accounting principles consistently applied, in detail reasonably satisfactory to Lender and certified to be materially true and correct by the chief financial officer of Grantor or its certified public accountant, as applicable. 14. If Lender orders an appraisal of the Property while a default exists, following any applicable notice and cure period, or to comply with legal requirements affecting Lender, Grantor, at Lender's request, agrees to reimburse Lender for the reasonable cost of any such appraisal. If Grantor fails to reimburse Lender for any such appraisal within 30 days of Lender's written request, that failure is a default under this Deed of Trust. 15. Grantor agrees to allow Lender or Lender's agents to enter the Property at reasonable times and inspect it and any personal property in which Lender is granted a security interest by this Deed of Trust. 16. Grantor may not sell, transfer, or otherwise dispose of any Property, whether voluntarily or by operation of law, except for transfer to the landlord, condemnation, residential leases or to obtain utility or other necessary easements, without the prior written consent of Lender. If granted, consent may be conditioned upon (a) the grantee's integrity, reputation, character, creditworthiness, and management ability being satisfactory to Lender; and (b) the grantee's executing, before such sale, transfer, or other disposition, a written assumption agreement containing any terms Lender may reasonably require, such as a principal pay down on the Obligations, an increase in the rate of interest payable with respect to the Obligations, a transfer fee, or any other modification of the Note, this Deed of Trust , or any other instruments evidencing or securing the Obligations. Grantor may not cause or knowingly permit any Property to be encumbered by any liens, security interests, or encumbrances other than the liens securing the Obligation and the liens securing ad valorem taxes not yet due and payable and the Permitted Exceptions without the prior written consent of Lender, which shall not be unreasonably withheld, conditioned or delayed. If granted, consent may be conditioned upon Grantor's executing, before granting such lien, a written modification agreement containing any terms Lender may reasonably require, such as a principal pay down on the Obligations, an increase in the rate of interest payable with respect to the Obligations, an approval fee, or any other reasonable modification of the Note, this Deed of Trust, or any other instruments evidencing or securing the Obligations. Lender hereby specifically approves the execution of the proposed Declaration of Land Use Restrictive LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 12 FW Babers Manor LP to City of Fort Worth LURA TDHCA ent for HUD Regulatory Agreement , the Choice Neighborhoods Implementation Grant Program Declaration of Restrictive Covenants CNI DORC , and the City of Fort Worth HOME Investment HOME Deed Restrictions . Approval of the LURA which is required by the TDHCA. Grantor may not grant any lien, security interest, or other encumbrance (a "Subordinate Instrument") covering the Property that is subordinate to the liens created by this Deed of Trust without the prior written consent of Lender. If granted, consent for a Subordinate Instrument may be conditioned upon the Subordinate Instrument's containing express covenants to the effect that- a. the Subordinate Instrument is unconditionally subordinate to this Deed of Trust; b. if any action is instituted to foreclose or otherwise enforce the Subordinate Instrument, no action may be taken that would terminate any occupancy or tenancy without the prior written consent of Lender, and that consent, if granted, may be conditioned in any manner Lender determines; c. rents, if collected by or for the holder of the Subordinate Instrument, will be applied first to the payment of the Obligations then due and to expenses incurred in the ownership, operation, and maintenance of the Property in any order Lender may determine, before being applied to any indebtedness secured by the Subordinate Instrument; d. written notice of default under the Subordinate Instrument and written notice of the commencement of any action to foreclose or otherwise enforce the Subordinate Instrument must be given to Lender concurrently with or immediately after the occurrence of any such default or commencement; and e. in the event of the bankruptcy of Grantor, all amounts due on or with respect to the Obligations and this Deed of Trust will be payable in full before any payments on the indebtedness secured by the Subordinate Instrument. Lender acknowledges and agrees that, in the event of a foreclosure of its interest under this Deed of Trust, the following rule contained in Section 42(h)(6)(E)(ii) of the For a period of 3 years from the date of foreclosure, with respect to any unit that had been regulated by the LURA, (i) none of the eligible tenants occupying those units at the time of foreclosure may be evicted or their tenancy terminated (other than for good cause), and (ii) no rent for said units may be increased except as otherwise permitted under Section 42 of the Code. Grantor may not cause or permit any of the following events to occur without the prior written consent of Lender: if Grantor is (a) a corporation, the dissolution of the corporation or the LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 13 FW Babers Manor LP to City of Fort Worth sale, pledge, encumbrance, or assignment of any shares of its stock; (b) a limited liability company, the dissolution of the company or the sale, pledge, encumbrance, or assignment of any of its Partnership interests; (c) a general partnership or joint venture, the dissolution of the partnership or venture or the sale, pledge, encumbrance, or assignment of any of its partnership or joint venture interests, or the withdrawal from or admission into it of any general partner or joint venturer; or (d) a limited partnership, (1) the dissolution of the partnership, (2) the sale, pledge, encumbrance, or assignment of any of its general partnership interests, or the withdrawal from or admission into it of any general partner, or (3) except for a limited partnership interest in a low income housing project, the withdrawal from or admission into it of any controlling limited partner or partners. If granted, consent may be conditioned upon (a) the integrity, reputation, character, creditworthiness, and management ability of the person succeeding to the ownership interest in Grantor (or security interest in such ownership) being reasonably satisfactory to Lender; and (b) the execution, before such event, by the person succeeding to the interest of Grantor in the Property or ownership interest in Grantor (or security interest in such ownership) of a written modification or assumption agreement containing such terms as Lender may reasonably require, such as a principal pay down on the Obligations, an increase in the rate of interest payable with respect to the Obligations, a transfer fee, or any other modification of the Note, this Deed of Trust, or any other instruments evidencing or securing the Obligations. Permitted Transfers. Notwithstanding anything to the contrary herein or in any other Loan document, the following shall not constitute a default or Event of Default under any of the Loan documents- a. the withdrawal, removal, replacement, and/or addition of a General Partner, Special Limited Partner or Limited Partner of the Grantor in accordance with the Partnership Agreement, or the withdrawal, replacement, and/or addition of any of Partners or its general partners or members, provided that prior notice of any additional or General Partner, Special Limited Partner or Limited Partner is delivered to Lender and is selected with reasonable promptness. Any additional or substitute General Partner, Special Limited Partner or Limited Partner Partners are hereby deemed acceptable to Lender; b.the sale, transfer, conveyance or pledge of partnership interests in the Grantor; c.the sale, transfer, conveyance or pledge of any partnership Investor Limited Partner or Special Limited Partner; d.transfers to an affiliate or subsidiary in accordance with the right of first refusal and purchase option included in the Amended and Restated Limited Partnership Agreement of Grantor, completion by the new owner. The new owner shall be required to assume all obligations of Grantor hereunder in a form acceptable to Lender; e.the dilution of General Part interest in cash flow and/or capital transaction proceeds in Grantor in accordance with the terms of the Partnership Agreement; f.assignment of the loan to a borrower that is an affiliate of the Grantor or its partners, subject to consent from Lender. Any assignment shall also require an assumption of the loan terms, including all City and HOME Regulations; and LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 14 FW Babers Manor LP to City of Fort Worth g. any amendment to the Partnership Agreement which does not affect terms that impact loan repayment, and does not otherwise adversely affect Lend interest in the Property. Further, none of the actions described in this paragraph will constitute a material change in ownership which would trigger termination of the Contract, as hereinafter defined. 17. Except as otherwise related to the project as defined in the Contract (as hereinafter defined), Grantor agrees not to grant any lien or security interest in the Property or to permit any junior encumbrance to be recorded or any claim to otherwise become an encumbrance against the Property other than the proposed LURA, the HOME Deed Restrictions, the CNI DORC, or HUD Regulatory Agreement, and any other lien or security interest approved in advance by Lender. If an involuntary encumbrance is filed against the Property, Grantor agrees, within 30 days of actual notice, to either remove the involuntary encumbrance or insure against it or provide a bond acceptable to Lender against the involuntary encumbrance. 18. This Deed of Trust binds, benefits, and may be enforced by the successors in interest of all parties. 19. If Grantor and Borrower are not the same person, the term Grantor includes Borrower. 20. Grantor and each surety, endorser, and guarantor of the Obligations 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. 21. Grantor agrees to pay reasonable attorney's fees, trustee's fees, and court and other actually incurred costs of enforcing Lender's rights under this Deed of Trust if this Deed of Trust is placed in the hands of an attorney for enforcement. 22. If any provision of this Deed of Trust is determined to be invalid or unenforceable, the validity or enforceability of any other provision will not be affected. 23. As long as the Obligations remain unpaid or otherwise not performed, unless Lender otherwise consents in writing, the fee title to the Premises and the Leasehold Estate will not merge but will always remain separate, notwithstanding a union of the estates. 24. This Deed of Trust does not constitute an assignment of the Lease, and Lender has no liability or obligation under the Lease by reason of its acceptance of this Deed of Trust. Lender is liable for the obligations of Tenant arising out of the Lease for only that period of time after Lender has acquired, by foreclosure or otherwise, and is holding Grantor's interest in the Leasehold Estate. 25. The term Lender includes any mortgage servicer for Lender. LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 15 FW Babers Manor LP to City of Fort Worth 26. The debt and the performance secured by this Deed of Trust is a nonrecourse obligation of Grantor. Neither Grantor nor any of its Partners nor any other party shall have any personal liability for repayment of the Loan described in the Contract (as hereafter defined). The sole recourse of Lender under the Loan documents for repayment of the Loan or performance of any of the Obligations shall be the exercise of its right against the security for payment as defined in the Note. E. Construction Loan Mortgage 1. This Deed of Trust is a "construction mortgage" within the meaning of section 9.334 of the Texas Business and Commerce Code. The liens and security interests created and granted by this Deed of Trust secure an obligation incurred for the construction of improvements on land, including the acquisition costs of the Leasehold Estate. 2. Grantor agrees to comply with the terms, covenants and conditions of Loan Agreement between Grantor and Lender (the Contract which requires the Note and this Deed of Trust. All advances made by Lender under the Contract will be indebtedness of Grantor secured by the liens created by this Deed of Trust, and such advances are conditioned as provided in the Contract. 3. All amounts disbursed by Lender before completion of the improvements to protect the security of this Deed of Trust up to the principal amount of the Note will be treated as disbursements under the Contract. All such amounts will bear interest from the date of disbursement at the rate stated in the Note, unless collections from Grantor of interest at that rate would be contrary to applicable law, in which event such amounts will bear interest at the rate stated in the Note for matured, unpaid amounts and will be payable on notice from Lender to Grantor requesting payment. 4. From time to time as Lender deems reasonably necessary to protect Lender's interests, Grantor will, on request of Lender, execute and deliver to Lender, in such form as Lender directs but subject to the rights of any senior lien holders, assignments of any and all rights or claims that relate to the construction of improvements on the Property. 5. In case of breach by Grantor of the terms, covenants and conditions of the Contract, Lender, at its option, subject to applicable notice, grace and cure periods, with or without entry on the Property, may (a) invoke any of the rights or remedies provided in the Contract, (b) accelerate the amounts secured by this Deed of Trust and invoke the remedies provided in this Deed of Trust, or (c) do both. F. THIS CONVEYANCE IS MADE AND ACCEPTED SUBJECT TO THE FOLLOWING CONDITIONS AND RESTRICTIONS: The Note secured by this Deed of Trust is the Note required in the Contract, and has been executed and delivered in accordance with the Contract. The funds advanced by Lender are HOME funds and the Contract and HOME Deed Restrictions require that the LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 16 FW Babers Manor LP to City of Fort Worth 5 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 Contract and HOME Deed Restrictions. The Obligations described in the Contract evidenced by the Note and secured by this Deed of Trust will be in default if, following any applicable notice and cure period, the 5 HOME-assisted residential rental units located on the Property more particularly described in the Contract do not remain affordable rental housing for the duration of the Affordability Period, subject to the next available unit rule Internal Revenue Code Section 42 (g) (2) (D). This Deed of Trust has also been executed and delivered pursuant to the terms of the Contract. Grantor agrees to perform each and every obligation set forth therein and will not permit a default to occur thereunder, following any applicable notice and cure period Contract or the HOME Program or HOME Regulations, following any applicable notice and cure period, shall be deemed an Event of Default in the terms of the Note and Lender may invoke any remedies provided herein for an Event of Default, subject to the terms and conditions of the HUD Rider. THE CONTRACT, THE NOTE AND THIS DEED OF TRUST 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. [SIGNATURES AND NOTARIZATION FOLLOW] IN WITNESS WHEREOF, Grantor has executed this Deed of Trust as of the date first written above. FW Babers Manor, LP, a Texas limited partnership By: FW Babers Manor GP, LLC, a Texas limited liability company, its general partner By: Fort Worth Affordability, Inc., a Texas nonprofit corporation, its le me be By: � Name: Ma y-Ma aret mons Title: Secretary reas r By: Babers Manor MBS SLP, Inc., a Texas corporation, its special limited partner By: Name: Ian McCormacic Title: Vice President STATE OF TEXAS '�ravi S ��i COUNTY OF T�NT � � I HEREBY CERTIFY that on or about this � day of July, 2024, before me, a Notary Public for the state aforesaid, personally appeared Mary-Margaret Lemons, known to me or satisfactorily proven to be the person whose name is subscribed to the foregoing or attached document, who acknowledged that she is the Secretary/Treasurer of Fort Worth Affordability, Inc., a Texas nonprofit corporation, the sole member of FW Babers Manor GP, LLC, a Texas limited liability company, the general partner of FW Babers Manor, LP, a Texas limited partnership; that she has been duly authorized to execute, and has executed, such instrument on its behalf for the purposes therein set forth; and that the same is its act and deed of said liznited partnership. IN WITNESS WHEREOF, I have set my hand and Notarial Seal, the day and year first above wr' ten. G p,) 9f ;�aaY ?ue�,,� BARIKA Q H(�USTON �X = 2_� �� = Notary Public, State c�f Texas _.:���._ Notary Public, State of Texas �N�;. �r+�.,�,; co�»m. EXP����s 11-1�1-2024 �'��FOFZ�,.'� Notary ID 13090078-3 9.,,�,;�,�' � � �, �� �w..:. LEASEHOLD DEED OF TRUST —$1M HOME FUNDS Page 17 FW Babers Manor LP to City of Fort Worth THIS DEED OF TRUST EXECUTED BY LENDER SOLELY FOR THE PURPOSE OF INDICATING LENDER'S AGREEMENT TO THE TERMS, CONDITIONS AND LIMITATIONS OF THE HUD RIDER ATTACHED HERETO AS EXHIBIT "C". LENDER: CITY OF FORT WORTH A Texas home rule municipality STATE OF TEXAS § COUNTY OF TARRANT § By: c::::s=h+r� CtL Name: Fernando Costa Title: Assistant City Manager This instrument was acknowledged before me on July \L( 2024, by Fernando Costa, Assistant City Manager of the City of Fort Worth, a Texas home rule municipality, on behalf of said municipality. Tyra Denise Buckley My Commission Expires 3/27/2027 Notary ID134274248 AFTER RECORDING RETURN TO: City of Fort Worth City Attorney's Office Attention: Leslie L. Hunt 100 Fort Worth Trail (previously 100 Energy Way) Fort Worth, Texas 76102 LEASEHOLD DEED OF TRUST -$IM HOME FUNDS FW Babers Manor LP to City of Fort Worth Page 20 IN WITNESS WHERF,OF, Grailkor has exectited ihis Deed of`Trust as ofthe da#e first �vt•itte« above. FW Babers Manor, LP, a Texas fimitecl parmcrship 13y: FW Babers Manor GP, LLC, a Texas limi�ed liability company, its ge�ieral partner By: Fort Wortl� AFfordability, Inc., a Texas nonpro�t corpoz�ation, its sole member By: Nai�1e: Maa�y-Mat•garet Lemor}s Title: Sect�etary/Treasurec By: 13abers Manor MBS SLP, Inc., a Te�as corporatioti, its specia] ' ' d part��er � By: 7 Na : Ian McC n�ack itle: Vice Presi enk STATE Ol�' TEXAS COUNTY OF TAKRANT I HERFBY CERTII�Y tl�at on or about this day of July, 2024, before �ne, a Notaiy Piiblic for tl�e state aforesaid, �ersona[ly appea�•ed Mary-Margaret Le�nons, kno��n to me c�r satisfactorily proven to be the pe�'son wk3ose naine is subscribed to the foregoin� or attaclied doc�iment, �vho ackno�4�ledged that she is tlle Sec��etary/Treasurer af Iiort Wortll AiTordabilit�f, Itic., a Texas nonprofit corporakian, the sole i�le�t�ber of F W Bahers Mannr GF', LI,C, a Te�as [imited liability ca�i7p�ny, the general paetnez• of FW Bahees Manor, L�', a`l'exas li�nited parttie��s��ip; that she has bect� dtaly authorized to exect�te, and I�as exccutecl, such instrument on its behalf for the p�i��poses therein set forth; and Ehat the sa�ne is its act and deec� of said limited partnership. 1N VL'ITNESS WI-IL:REOF, 1]lave set my hancl and Notarial Seal, the cla�� and year Grst abovc �vritteil. Notary �'ublic, State af TeYas LE�i,SEHOLD 1}1:ED OF TRUST — S1\i I!Ol1�; 1� UNDS 1'agc 17 F14' [3abers Manor [,P to City oF I�ort 11'orth STATE OF MISSOUR[ CITY OF ST. LOUIS On this, the 3�s� day ofJu[y, 2024, be�ore me, the undersigned officer, persa�tally appeared Ian MeCormack, tivho states that he is the Vice President of Babers Place MBS SI.,P, Inc., a Texas corporation, the special limited partner of F W�3abers Manar, LP, knawn to rrte (or satisfactorily pro�en) to be the person whose name is st�bscribed to tlie �vidlin instrument and acicnowledged that Ile, being aut�zorized ta do so, executed the same for the purpose t��erean contained, attd desires tiie sai��e to be recorded as such. IN WITN�;SS WHEREOF, T llereunto set my hand and ofticial seal. Nota y Public, State of Misso��ri lINNETTANpERSpN �ocary Pubilc - Notary 5eai St :auds County • 5tate of Missouri Commi55ion Nt�mber 2i937315 �y CGmm�ssion Expires Feb �, 202d [SIGN�ITURE AND NOTARI7ATION O�� LENDER FOLLOWS] LEASE�IOLD DI:T:D OF "I�KC)S"C — $I �t }IO1�IE �UNDS I�1V [3abers Mai�or LE' to City of Foet 1�'ord� Page i S LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 20 FW Babers Manor LP to City of Fort Worth LEGAL DESCRIPTION BEING a 4.4719 acre (194,796 square foot) tract of land situated in the George J. Ashabranner Survey, Abstract No. 7, City of Fort Worth, Tarrant County, Texas, and being a portion of Block 33, Eastwood Addition, Third Filing, an addition to the City of Fort Worth according to the plat recorded in Volume 388-Z, Page 52, Plat Records, Tarrant County, Texas, and being all of Tracts 1-4 described in Special Warranty Deed to Cavile Public Facility Corporation recorded in Instrument No. D221131212, Official Public Records, Tarrant County, Texas, and being more particularly described as follows: COMMENCING at 1/2-inch iron rod found at the southwest corner of Lot 1, Block 32, said Eastwood Addition, Third Filing, and being at the intersection of the east right-of-way line of South Hughes Avenue, a 50-foot right-of-way, and the north right-of-way line of Little John Avenue, a 50-foot right-of-way; West, along the west line of said Lot 1, and along the said east right- of-way line, a distance of 118.00 feet to a chain link fence corner found for the POINT OF BEGINNING, being the northwest corner of said Lot 1, and being the southwest corner of said Block 33; THENCE North 0°14'14" West, along the west line of said Block 33, and continuing along the said east right-of- set for corner, being the northwest corner of said Tract 4, and being at the intersection of the said east right-of-way line, and the south right-of-way line of Ramey Avenue, a variable width right- of-way; THENCE North 89°52'35" East, along the north lines of said Tracts 1-4, and along the said south right-of-way l corner, being the northeast corner of said Tract 1, and being at the intersection of the said south right-of-way line and the west right-of-way line of South Edgewood Avenue, a 60-foot right-of- way, and being in the east line of said Block 33; THENCE South 0°31'21" East, along the east line of said Block 33, and along the said west right-of-way line, a distance of 398.68 feet to a 5/8- for corner, being the southeast corner of said Block 33, and being the northeast corner of Lot 8, Block 32, said Eastwood Addition, Third Filing; THENCE South 89°45'46" West, departing the said west right-of-way line, along the south line of said Block 33, at a distance of 64.01 feet passing a 1/2-inch iron rod found at the northwest corner of said Lot 8, and continuing in all a total distance of 489.01 feet to the POINT OF BEGINNING and containing 4.4719 acres or 194,796 square feet of land, more or less. LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 21 FW Babers Manor LP to City of Fort Worth PERMITTED ENCUMBRANCES 1. All those listed in First American Policy of Title Insurance File No. [______________] 2. [TDHCA LURA] LEASEHOLD DEED OF TRUST $1M HOME FUNDS Page 22 FW Babers Manor LP to City of Fort Worth HUD RIDER TO DEED OF TRUST The terms of this Deed of Trust are subject to that certain Subordination Agreement Form HUD-92420M by and between Mason Joseph, LLC, City of Fort Worth, and FW Babers Manor, LP. Routing and Transmittal Slip Neighborhood Services Department DOCUMENT TITLE: HOME Babers/Manor HOME Leasehold Deed of Trust M&C 24-0435 CPN CSO # 61698 DOC# _ DATE: TO: INITIALS DATE OUT 1. Allison Tidwell 2. 3. All documents received from any and all City APPROPRIATE ACM for approval first. Once the ACM has signed the routing slip, David will review and take the next steps. NEEDS TO BE NOTARIZED: Yes No RUSH: Yes No SAME DAY : Yes No NEXT DAY : Yes No ROUTING TO CSO: X Yes No Action Required: As Requested and Notary Tabs For Your Information X Attach Signature × Signature/Routing and or Recording Comment File Return to: Please call Virginia Villalobos at ext. 7744 for pick up when completed. Thank you.