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HomeMy WebLinkAboutContract 61698-PN1PROMISSORY NOTE HOME FUNDS Page 1 FW Babers Manor, LP Babers Manor Apartments Promissory Note HOME Funds Date: August 1, 2024 Borrower: FW Babers Manor, LP, a Texas limited partnership Borrower's Mailing Address: FW Babers Manor, LP c/o Fort Worth Affordability, Inc. 1407 Texas Street Fort Worth, TX 76102 Lender: City of Fort Worth, a Texas home rule municipality Place for Payment: City of Fort Worth Neighborhood Services Department Attn: Assistant Director 100 Fort Worth Trail (previously 100 Energy Way) Fort Worth, Tarrant County, Texas 76102, or any other place that Lender may designate in writing. Principal Amount: $1,000,000.00 Loan Authority: The loan evidenced by this HOME HOME Loan 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 Partnerships Program Final Rule, as amended, 24 CFR Part 92 et seq. (the HOME Regulations for the development of the Babers Manor Apartments Project . Annual Interest Rate: 4.79% simple annual interest Maturity Date: 40 years after Project Stabilization as defined in City Secretary Contract No. 61698 between Borrower and Lender for the HOME Loan (the HOME Contract and, together with this HOME Note and any other documents evidencing the HOME Loan HOME Loan Documents ), but no later than December 31, 2066. Annual Interest Rate on Matured, Unpaid Amounts: 12% Terms of Payment: The Principal Amount is a no interest, deferred-payment loan. All unpaid amounts are due at the Maturity Date, but only to the extent of 75% of available Surplus Cash or City Secretary Contract No. 61698-PN1 PROMISSORY NOTE HOME FUNDS Page 2 FW Babers Manor, LP Babers Manor Apartments non-Project Assets, as both such terms are defined in that certain Regulatory Agreement for Multifamily Projects dated August 1, 2024 executed by the United long as HUD is the insurer or holder of the Senior Note on FHA Project No. 113- 36069 as defined in that certain Subordination Agreement (hereinafter defined), the Principal Amount and accrued interest shall thereafter be due and payable only to the extent of 75% of available Surplus Cash or non-Project Assets, as both such terms are defined in the HUD Regulatory Agreement. After the Maturity Date, Borrower promises to pay any unpaid principal balance plus 12% interest. 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 4 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 4 HOME- assisted rental units more particularly described in the HOME Contract do not remain affordable rental housing for the duration of the Affordability Period, subject to the . In the event of default under the HOME Loan, Lender may invoke any remedies provided in the HOME Contract for default. Security for Payment: Execution by Borrower of the Loan Documents, including this Promissory Note dated August 1, 2024, in the original principal amount of $1,000,000.00 payable to Lender by Borrower and Leasehold Deed of Trust Security Agreement Financing Statement of even date from Borrower to Lender. Property to be secured by Loan Documents: 4400 Ramey Avenue -1 Legal Description. Other Security for Payment: As set forth in the HOME Contract and the HOME Deed Restrictions. Borrower promises to pay to the order of Lender the Principal Amount on the Maturity Date. This HOME Note is payable at Place for Payment listed in the HOME Contract. After the Maturity Date, Borrower promises to pay any unpaid principal balance plus interest at the Annual Interest Rate on Matured, Unpaid Amounts. As long as HUD is the insurer or holder of the Senior Note on FHA Project No. 113-36069 as defined in that certain Subordination Agreement (hereinafter defined), any payment made under the terms of this Note, including payments after the Loan Maturity Date, shall be due and payable only to PROMISSORY NOTE HOME FUNDS Page 3 FW Babers Manor, LP Babers Manor Apartments the extent of 75% of available Surplus Cash or non-Project Assets as both such terms are defined in the HUD Regulatory Agreement. 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, following any applicable notice and cure periods, 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 of the HOME Loan Documents, prior to exercising any remedies Lender shall give Borrower and each of the Partners of Borrower, as identified in the First Amended and Restated Agreement of Limited Partnership dated on or about the date hereof (the written notice of such default. Borrower and each of its Partners on behalf of Borrower 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 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 Bo Agreement, simultaneous written notice of such default. If the default is reasonably capable of being cured within 45 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 45 days, and if Borrower or any of its Partners (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 or each of its Partners on behalf of 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 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, 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 or the HOME Regulations by Lender. 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. PROMISSORY NOTE HOME FUNDS Page 4 FW Babers Manor, LP Babers Manor Apartments 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. 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 four (4) HOME-assisted units throughout the Affordability Period. When the context requires, singular nouns and pronouns include the plural. The indebtedness evidenced by this Note is and shall be subordinate in right of payment to the prior payment in full of the indebtedness to be hereafter evidenced by (i) a Note (Multistate) dated August 1, 2024, made by Borrower and payable to Mason Joseph, LLC Senior Lender Senior Indebtedness to the extent and in the manner provided in that certain Subordination Agreement dated August 1, 2024 among Senior Lender, Borrower and Subordination Agreement (ii) and a Promissory Note dated August 1, 2024, in the original principal amount of $100,000.00 made by Fort Worth Affordability, Inc. and payable to the Fort Worth Housing Finance Corporation PSH Loan The Deed of Trust securing this Note is and shall be subject and subordinate in all respects to the liens, terms, covenants and conditions of the documents evidencing the Senior Indebtedness Senior Loan Documents more fully set forth in the Subordination Agreement, and the liens, terms, covenants and conditions of the Senior . The rights and remedies of the payee and each subsequent holder of this Note under the Deed of Trust securing this Note are subject to the restrictions and limitations set forth in the Subordination Agreement and/or the Senior FWAI Loan Documents. Each subsequent holder of this Note shall be deemed, by virtue of such the Note, to have agreed to perform and observe all of the terms, covenants and conditions to be performed or observed by the Subordinate Lender as defined in the Subordination Agreement. Lender agrees to re-subordinate the debt evidenced hereunder in the event that such senior debt is refinanced. Subject to the terms of the Subordination Agreement and any cure periods provided in the Senior Loan Documents, if there is a default in payment of any part of principal or interest of the Senior Indebtedness and/or the Senior FWAI Loans, or a breach of any covenants contained in the Senior Loan Documents and/or the Senior FWAI Loan Documents, PROMISSORY NOTE HOME FUNDS Page 5 FW Babers Manor, LP Babers Manor Apartments 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 Senior Loan Documents and/or the Senior FWAI Loan Documents, and to the extent allowed by the Subordination Agreement, Lender may perform, but is not obligated to 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 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, Lender and FWAI, FWAI and Borrower, or FWAI and the Fort Worth Housing Finance Corporation FWHFC , regarding the Project or such Other Obligated Party with respect to the Project; (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 with respect to the Project 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 Note or the Senior FWAI Loan Documents; (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 120 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 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, FWAI, any partner of Borrower, FWHS, or (ii) an Other Obligated Party; (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; or (9) the Project is not completed by January 1, 2027. 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 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. PROMISSORY NOTE HOME FUNDS Page 6 FW Babers Manor, LP Babers Manor Apartments This HOMENote 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. [SIGNATURES FOLLOW] THE HOME CONTRACT, HOME NOTE, HOME DEED OF TRUST, AND HOME DEED RESTRICTIONS CONSTITUTE THE FINAL AGREEM�NT OF THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENC� OF PRIOR, CONT�MPORAN�OUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITT�N ORAL AGREEMENTS BETWE�N TH� PARTIES. 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 sole membe By: ' �; Na e: ry-Ma are '�, mons Title: Secretary rea er BABERS MANOR MBS SLP, INC., a Texas corporation, its special limited partner By: Name: Ian McCormack Title: Vice President PROMISSORY NOTE — HOM� FUNDS Page 7 FW Babers Manor, LP — Babers Manor Apartments THE HOME CONTRACT, HOMF NOT�, HOME DE�ll O�' TRUST, AND HOMC DrED R�STRICTIONS CONSTITUT� THC I'INAL AGRE�MENT UF THC PARTI�S AND MAY NOT I3E CONTRADICTED BY FVIllENCE OF PI2IOR, CONTCMPORANCOUS, nR SUBSEQU�NT OItAL AGREEMENTS 41' TH� PARTI�S. THERE ARI{'1 NO UNWRITTEN ORAL AGREI;M�NTS BrTWTEN THC PARTiES. FW BABERS NIANOR, LP, a Texas limited par#nership By: FW Babers Ma��oc• GP, LLC, a Texas limited liability company, its �eneral partner By: E'OI't WOI'C�1 AffOCda�I�ICj�, Inc., a Texas nanprofit corparation, its sole member By: Name: Mary-Margaret I�emons `I'itle: SecretarylT�•easw�er BABERS MANOR MBS SLP, INC., a Texas corporatian, its special � ;, ec� partnei° B�r • N� e: Iac� McC rEnack itle: Vice 1're ident YROl11SSOf21' NO"C£ — f�O\1F. FU�IDS Pa�e 7 1�1V 13abers \lanor, L,P — Bai�crs ll:inor Apartmeuts PROMISSORY NOTE HOME FUNDS Page 8 FW Babers Manor, LP Babers Manor Apartments - FW BABERS MANOR, LP LEGAL DESCRIPTION Lot 1, Block 33R, Eastwood Addition, being a replat of a portion of Block 33, Eastwood Addition, Third Filing, George J. Ashabranner Survey Abstract No. 7, City of Fort Worth, Tarrant County, Texas, according to plat thereof recorded in Instrument No. D224122361, Official Public Records, Tarrant County, Texas. Routing and Transmittal Slip Neighborhood Services Department DOCUMENT TITLE: HOME Babers/Manor HOME PROMISSORY NOTE 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.