HomeMy WebLinkAboutC2011-249 - 5/10/2011 - NAREAL ESTATE LIEN NOTE
Date: , 2011
Maker: Costa Tarragona II, Ltd., a Texas limited partnership
Makers' Mailing Address:
c/o Corpus Christi Housing Finance Corporation
P. O. Box 9277
Corpus Christi, TX 78469 -9277
Attn: General Manager
Payee: Corpus Christi Community Improvement Corporation, a Texas nonprofit
corporation
Place for Payment: 1201 Leopard Street, Corpus Christi, 78469, AT General Manager,
Nueces County, Texas; or any other place that Payee may designate in writing.
Principal Amount: Seven Hundred Seventy -Seven Thousand Nine Hundred Sixty -Four
Dollars ($777,964.00)
Annual Interest Rate on Unpaid Principal: Interest shall accrue beginning at the date first set
forth above at a rate of Four and 19 /100ths percent (4.19 %) per annum unless and
until Maker (1) defaults beyond any applicable notice and cure period in the
payment of the Note or (2) fails to comply with any one or more terms or
conditions of the Note or defaults beyond any applicable notice and cure period
under any one or more of the other Loan Documents. In the event the Maker so
defaults in the payment of this Note or fails to comply with any provision of any
of the Loan Documents (said Loan Documents described below), interest on the
unpaid principal shall thereafter (a) accrue at the rate of Four and 19 /100ths
percent (4.19 %) per annum until such default is cured and be capitalized and
added to the entire remaining principal amount then owing.
Annual Interest Rate on Matured, Unpaid Amounts: A rate of Four and 19 /100ths percent
(4.19 %) per annum.
Terms of Payment (Principal and interest): This Note is a forty (40) year loan with installments
commencing June 1, 2014, and ending June 1, 2054, subject to Maker's
compliance with each and every term and condition of (1) this Real Estate Lien
Note (the "Note "), (2) that certain "Third Lien Leasehold Deed of Trust" of even
date, (3) that certain "HOME Loan Agreement" of even date (the "HOME Loan
Agreement "), (4) that certain "Assignment of Leases and Rentals" of even date,
and (5) that certain "Declaration of Restrictive Covenant of Affordability" (the
"Declaration ") of even date, executed by Maker against the Property (said
Property described below). (The Note, the Deed of Trust, the HOME Loan
2011 -249
05/10/11
Costa Tarragona 11 INDEXED
Agreement, the Assignment, and the Declaration collectively referred to herein as
the "Loan Documents ".)
The specific terms of payment of this Note are as follows:
Principal shall be due and payable from, and only to the extent of, Net Cash Flow,
as defined below, in forty (40) annual installments of up to Nineteen Thousand
Four Hundred Forty -Nine Dollars and ten cents ($19,449.10) plus interest,
payable each and every year beginning June 1, 2014, and continuing regularly
thereafter until the whole of said principal in the amount of Seven Hundred
Seventy -Seven Thousand Nine Hundred Sixty -Four Dollars ($777,964), plus
applicable interest has been duly paid. In the event that Maker is unable to make
said payments of principal and interest due to the unavailability of cash flow, all
principal and interest payments not made shall be due and payable on the maturity
date herein; said payments shall be capitalized and added to the outstanding
principal balance of the Note and shall accrue interest at the rate of Four and
19 /100ths percent (4.19 %) per annum; provided, however, Maker's failure to
make a payment under this Note due to lacy of Net Cash Flow shall not constitute
a Default under this Note or any other Loan Document.
Net Cash Flow shall be defined herein as Cash Receipts less Cash Expenditures. Cash Receipts
shall mean all cash receipts of Maker from whatever source derived other than from a Capital
Transaction or Capital Contributions (as such terms are defined in the Partnership Agreement as
hereinafter described below) and including, without limitation, cash from operations, , interest
earned on and released from reserves held by or for the benefit of the Project and /or the Maker,
and net insurance recoveries (other than proceeds from title insurance recoveries and other than
condemnation or casualty proceeds). In addition, the net reduction in any year in the amount of
any escrow account or reserve maintained by or for Maker shall be considered a Cash Receipt of
Maker for such year over Cash Expenditures. Cash Expenditures shall mean all disbursements
of cash during the year including, without limitation, payment of Operating Expenses (as defined
in the Partnership Agreement), the payment of debt service pursuant to the terms of the HOME
Loan Agreement, including principal and interest on Maker's indebtedness, including senior
lenders, the payment of deferred Development Fee in accordance with Section 8.09 of the
Partnership Agreement, and amounts allocated to reserves by the General Partner (as those terms
are defined in the Partnership Agreement), but excluding amounts paid from reserves established
in a prior year. In addition, the net increase during the year in any escrow account or reserve
maintained by or for Maker shall be considered Cash Expenditure during the year. Cash
Expenditures payable to Partners or Affiliates of Partners (as that term is defined in the
Partnership Agreement) shall be paid after Cash Expenditures payable to third parties, except for
payments to a Management Agent (as that term is defined in the Partnership Agreement) which
may be an Affiliate of a Partner to the extent such fees are payable and are not subject to
deferral. Cash Expenditures shall not include expenses incurred in connection with a Capital
Transaction. Net Cash Flow shall be determined separately for each fiscal year or portion
thereof.
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Security for Payment: A Third Lien Leasehold Deed of Trust of even date herewith from Maker
to Payee, against the real property more particularly described in Exhibit A which is
attached to this Note and incorporated herein for all purposes (the "Property").
Maker promises to pay to the order of Payee at the place for payment and according to the terms
of payment the principal amount plus interest at the rates stated above. All unpaid amounts shall
be due by the final scheduled payment date.
Subject to the terms and conditions of the Subordination Agreement by and between Sterling
Bank, as Trustee, Corpus Christi Community Improvement Corporation, and Costa Tarragona II,
Ltd., dated as of same date herein (the "Subordination Agreement "), if Maker defaults in the
payment of this Note or defaults in the performance of any obligation in any instrument securing
or collateral to it, and the default continues after Payee gives Maker notice of the default and the
time within which it must be cured, if any, as may be required by law or by written agreement,
then Payee may declare the unpaid principal balance and earned interest on this Note
immediately due. Maker and each surety, endorser, and guarantor waive all demands for
payment, presentations for payment, notices of intention to accelerate maturity, notices of
acceleration of maturity, protests, and notices of protest, to the extent permitted by law.
If this Note or any of the documents referenced in the "Terms of Payment" section above, or any
instrument securing or collateral to it is given to an attorney for collection or enforcement, or if
suit is brought for collection or enforcement, or if it is collected or enforced through probate,
bankruptcy, or other judicial proceeding, then Maker shall pay Payee all costs of collection an d
enforcement, including reasonable attorney's fees and court costs, in addition to other amounts
due.
Interest on the debt evidenced by this Note shall not exceed the maximum amount of Four and
19 /100ths percent (4.19 %) interest that may be contracted for, taken, reserved, charged, or
received under law; any interest in excess of the maximum amount shall be credited on the
principal of the debt or, if that has been paid, refunded. On any acceleration or required or
permitted prepayment, any such excess shall 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 other provisions in this and all other
instruments concerning the debt.
Subject to the terms and conditions of the Prior Liens documents (as defined in the Deed of
Trust), in addition to rights of Payee as contained herein, Payee shall have the further right to
accelerate the maturity of this Note and declare any unpaid amount immediately due should any
one or more of the following events occur:
(1) Subject to the terms of that certain Amended and Restated Agreement of Limited
Partnership (hereinafter referred to as "Partnership Agreement "), executed by
Maker's limited partners and general partners and dated as of May 1, 2011, the
Permitted Exceptions (as defined in that certain Deed of Trust from Maker to
Payee), and resident Ieases of the Project, and excepting any items replaced or
sold in the ordinary course of business, Maker fully or partially sells, conveys,
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disposes of, alienates, hypothecates, assigns, mortgages, pledges, transfers or
encumbers all or any part of the Property or any interest therein, the rents
therefrom, the income therefrom, or any other item of collateral, whether
voluntarily or involuntarily, without the prior written consent of Payee through its
Department's Director or his designate;
(2) Subject to the terms and conditions of and the Limited Partners' rights under the
Partnership Agreement and the Permitted Exceptions, Maker fully or partially
sells, conveys, assigns, mortgages, pledges, transfers or encumbers an interest in
Maker (if Maker is not a natural person but a corporation, partnership, trust or
other legal entity) including, in the event Maker is a limited or general
partnership, a joint venture or a limited liability company, a change in the
ownership interest in any general partner, any joint venturer or any member,
whether such interest is in the form of a beneficial or partnership interest or in the
form of a power of direction, control or management, or otherwise said change
either voluntarily, involuntarily or otherwise, without the prior written consent of
Payee. Payee consent shall not be required for any transfer of a limited partner
interest in Maker or for transfers of ownership interests within such limited
partner. Payee consent shall not be required for removal of a general partner by a
limited partner pursuant to the terms and conditions of the Partnership
Agreement;(3) Maker converts any of the HOME assisted units (defined herein as
portions of the Property developed with the HOME funds herein) to a form of
condominium, cooperative ownership or other non - residential use;
(4) Maker: (1) files as debtor, or has filed against it, a petition for the appointment of
a receiver or for bankruptcy or insolvency, (2) becomes or is adjudicated
insolvent or bankrupt or admits in writing the inability to pay debts as they
mature, (3) petitions or applies to any tribunal for or consents to or does not
contest the appointment of a receiver, trustee, custodian or similar officer for
Maker, any principal of Maker or general partner of Maker, or a substantial part
of the assets of Maker, or commence, as a debtor, any case, proceeding or other
action under any bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect. In any involuntary proceeding Maker shall have ninety (90)
days to have such matter dismissed;
(S) The Property or any material part thereof is taken on execution or other process of
law in any action against Maker;
(6) Maker permanently abandons the Property or any material portion thereof, in
which event such abandonment shall constitute an assignment to Payee, at
Payee's option, of Maker's interest in any lease or contract then affecting the
abandoned Property;
(7) Maker defaults or fails to timely comply with any one or more terms and
conditions of the Loan Documents beyond any applicable notice and cure period;
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(8) The holder of any lien or security interest on the Property, without implying the
consent of Payee to the existence or creation of any such lien or security interest
(except as otherwise acknowledged herein), and whether superior or subordinate
to the Loan, the Note evidencing the Loan or the Deed of Trust securing the Note,
(1) declares a default and (2) such default is not cured within any applicable grace
period set forth, if at all, in the applicable document or institutes foreclosure or
other proceedings for the enforcement of its remedies thereunder;
(9) The Property, or any portion thereof, is subjected to actual waste or threatened
waste or to removal, demolition or alteration so that the value of the Property is
materially diminished thereby and Payee reasonably determines that it is not
adequately protected from any loss, damage or risk associated therewith;
(10) Any representation or warranty made herein by acceptance signature of Maker
hereto, or in any of the Loan Documents, such representation or warranty made
by Maker, any principal of Maker, general partner in Maker, any person
authorized by Maker to execute any of the aforestated documents on behalf of
Maker, or by any indemnitor under any indemnity executed in connection with
the Loan, determined by Payee to have been false or misleading in any material
and detrimental respect at the time made;
01) Maker at any time fails to remain in compliance with each and every term and
condition of or in the Loan Documents beyond any applicable notice and cure
period;
(12) Maker (i) initiates any changes in the Project without Payee's written approval or
(ii) fails to provide to Payee documentation acceptable to Payee of the actual
quoted costs incurred in connection with the Project; or
(13) Maker fails to complete this Project by December 31, 2012.
Payee hereby agrees that, if Maker is a Iimited partnership, any limited partner of Maker may,
but shall not be obligated to, cure any default by Maker hereunder and for the purposes hereof
such curative actions shall be considered the actions of Maker.
Notwithstanding any provision herein to the contrary, Maker and the direct and indirect equity
owners of Maker, including without limitation Maker's general or limited partners, shareholders,
members or venturers, shall have no Iiability for any amounts due hereunder and Payee's sole
recourse shall be against Maker's interest in the Property; provided, however, that such
limitation of recourse shall not apply to Maker's general partner in the event of any loss suffered
or incurred by Payee as a result of any of the following:
1) fraudulent representations by or on behalf of Maker contained in any of the Loan
Documents or in any other documents submitted by Maker to Payee;
Real Estate Lien Note
2) the application of rents or income received by Maker from the Property after an
event of default under the Loan Documents in contravention of the provisions of
the Loan Documents after Payee has given notice to Maker of the occurrence of
an event of default and such default not otherwise cured within any applicable
notice and cure period;
3) the application of insurance proceeds or condemnation awards in contravention of
the provisions of the Loan Documents;
4) the sale or transfer of the Property in contravention of the provisions of the Loan
Documents without Payee's consent;
5) failure by Maker to insure the Property in accordance with the terms of the Loan
Documents; or
6) the violation by Maker of any environmental laws, rules or regulations applicable
to the Property.
When the context requires, singular nouns and pronouns include the plural.
In the event of any conflict between the provisions of this Note and those of the Prior Liens
documents, the Prior Liens documents shall prevail; provided however that, with respect to any
matter addressed in both such documents, the fact that one document provides for greater, lesser
or different rights or obligations than the other shall not be deemed a conflict unless the
applicable provisions are inconsistent and could not be simultaneously enforced or performed.
[SIGNATURE PAGE TO FOLLOW]
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COSTA TARRAGONA R, LTD., a Texas limited
partnership
By: CCHFC Costa Tarragona II, LLC, a Texas
limited liability company, its general partner
By: Corpus Christi HousingR
a Texas gokporation, its so
General Manager
sT MUNCIL
9 CiiAItY
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EXHIBIT A
PROPERTY DESCRIPTION
For a 6.174 acre tract located in Nueces County, Texas, being a portion of Lot 3A, Amending Plat of West
Park Addition Lots 3A and 311, a Subdivision of record in Volume 67, Page 494 of the Map Records of Nueces
County, Texas; Said 6.174 acre tract being more particularly described by metes and bounds as follows with
all bearings being referenced to the Easterly line of said Lot 3, Being S 04 0 05'20" W;
Commencing at a found 518 -incb iron rod at the Southerly Right -of Way line of North Padre Island Drive -
S.H. 358 (variable R.O.W.), for the Northeast corner of said Lot 3B, and the Northwest corner of Lot 1, West
Park Addition Subdivision of Record in Volume 47, Page 25 of the Map Records of Nueces County, Texas;
Thence, N 88 °12'41" W, 230.81 feet, along the Southerly Right -of -Way line of North Padre Island Drive -
S.H. 358 (variable R.O.W.), to a found TXDOT Monument, for corner;
Thence, S 75 1 43'45" W, 167.98 feet, to a found TXDOT Monument, on the Southerly Right -of -Way line of
North Padre Island Drive - S.H. 358 (variable R.O.W.), For the Point of Beginning of a non - tangent curve to
the left and the Point of Beginning hereof,
Thence, Southeasterly, along the common line of said Lot 3A, Lot 3B, and the are of a non - tangent curve to
the left having a radius of 2200.00 feet, a central angle of 32 1 46'07 ", au are length of 1258.22 feet and a chord
bearing: S 37 1 07'57" E, a distance of 124115 feet, to a set 1/2 -inch iron rod with BPI cap located in the
southerly line of said Lot 3B, being a point in the irregular Northerly line of Lot 2 or West Park Addition
Lots 2 and 3, a Subdivision of record in Volume 65, Pages 11 -12 of the Map Records of Nueces County, Texas
for the Southeast corner of the herein described tract;
Thence, S 88 1 25'13" W, 478.14 feet, along a portion of the common boundary line of said Lot 3A and said Lot
2, to a set 1/2 -inch iron rod with BPI cap, for the Southwest corner of the herein described tract;
Thence, continuing along the common line of said Lot 2, and Lot 3A the following courses:
N 20 °28'58" W, 303.75 feet, to a set 1/2 -inch iron rod with BPI cap for corner;
N 34 °53 W, 151.74 feet, to a set 1/2 -inch iron rod with BPI cap for corner;
N 31 0 38 1 26" E, 47.83 feet, to a set 1/2-inch iron rod with BPI cap for corner;
N 20 0 28'58" W, 12.67 feet, to a set 112 -inch iron rod with BPI cap for corner;
N 58 0 21'34" W, 70.00 feet, to a set 112 -inch iron rod with BPI cap for corner;
N 31 °38'26" E, 27.21 feet, to a set 112 -inch iron rod with BPI cap for corner;
N 55 °43 W, 170.07 feet, to a set 112 -inch iron rod with BPI cap for corner;
N 48 0 37'13" E, 66.05 feet, to a set mug nail for corner;
N 44 0 18'22" W, 296.99 feet, to a found 5/8 -inch iron rod on the Southeast right of way line of North Padre
Island Drive (variable R.O.W.), for the Northwest corner of said Lot 3A;
Thence, along the Southeast right of way line of North Padre Island Drive (variable R.O.W.), the following
courses:
N 52 °30'09" E, 54.97 feet, to a found TXDOT monument, for an angle corner of the herein described tract;
N 60 0 52'19" E, 93.63 feet, to a found TXDOT monument, for an angle corner of the herein described tract;
N 67 0 12'55" E, 129.63 feet, to a found TXDOT monument, to the Point of Beginning , containing 6.189 acres
(269,575 square feet) of land, more or less.
SAVE AND EXCEPT that certain called 0.006 acre and 0.009 acre tract as conveyed to Corpus Christi
Housing Finance Corporation, by Special Warranty Deed dated December 13, 2007 and recorded in
Document No. 2007061698 of the Nueces County Records, leaving a net acreage for said Lot 3 of 6.174 acres.
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