907 Avenue P - 3-28-20123/29/12 11:56 AM
OMB No. 2502 -0265
A. U.S. Department of Housing
and Urban Development
Settlement Statement
B. Type of Loan
1. [ ] FHA 2. [ ] FMHA 3. [X] Conv. Unins.
4. [ ] VA 5. [ ] Cony. Ins.
6. File Number
201103240
7. Loan Number
8. Mortgage Ins. Case No.
C. Note: This form is furnished to give you a statement of actual settlement costs. Amounts paid to and by the settlement
agent are shown. Items marked ( "POC ") were paid outside the closing: they are shown here for information
purposes and are not included in the totals.
D. Name of Borrower: City of Huntsville, 1212 Avenue M, Huntsville, TX 77340
E. Name of Seller:
F. Name of Lender: Texas Department of Housing and Community Affairs, 221 East 11th Street,
Austin, TX 78701
G. Property Location: Lot 2, Block 66, Huntsville Townsite
907 Avenue P, Huntsville, TX 77340
H. Settlement Agent: Walker County Title Company (936) 295 -8173 TIN: 742113306
Place of Settlement: 1109 University Avenue, Huntsville, TX 77340
I. Settlement Date: 3/28/2012 Proration Date: 3/28/2012
J Summary � .,�., , . '. �.
� mss'. �? ,: ,.., ! ' ion
100. Gross amount due from borrower:
400. Gross amount due to seller:
101. Contract sales price
401. Contract sales price
102. Personal property
402. Personal property
103. Settlement charges to borrower (line 1400)
1,233.00
403.
104.
404.
105. Construction Funds Held by Lender
96,110.70
405.
.. $ ,' "�✓+- .''%� 4 1 gha+ i °�
Adjustmentsforltem>�
d'R' k �} I
i $s V2 �L 'V�q`'' `$ 9`4. '+s 0 � f
106. City/town taxes
406. City /town taxes
107. County taxes
407. County taxes
108. Assessments
408. Assessments
109. Property Taxes
409. Property Taxes
110.
410.
111.
411.
112.
412.
120. Gross amount due from borrower:
97,343.70
420. Gross amount due to seller:
0.00
200. Amounts papc(. bx l . r kt
't:SeI e ...
201. Deposit or earnest money
501. Excess deposit (see instructions)
202. Principal amount of new loan(s)
96,110.70
502. Settlement charges to seller (line 1400)
0.00
203. Existing loan(s) taken subject to
503. Existing loan(s) taken subject to
204.
504. Payoff of first mortgage loan
205.
505. Payoff of second mortgage loan
206.
506.
207.
507.
208.
508.
209.
509.
Adjustments. for, items uljR •a... _ � •� �a. „�.^,
�;;5�� -5�k �. .K� s�f�
m..xnsak .�; .:era• � vu's • : , a,', �i �`n, n:, .
210. City/town taxes
510. City/town taxes
211. County taxes
511. County taxes
212. Assessments
512. Assessments
213. Property Taxes
513. Property Taxes
214.
514.
215.
515.
216.
516.
217.
517.
218.
518.
219.
519.
220. Total paid by /for borrower:
96,110.70
520. Total reduction in amount due seller:
0.00
''',' ,^' $ ° -E ^ &
300. Gas atsettlement ' °, . uS� 4:11
. �
� :• �
301. Gross amount due from borrower (line 120)
97,343.70
601. Gross amount due to seller (line 420)
0.00
302. Less amount paid by /for borrower (line 220)
96,110.70
602. Less total reduction in amount due seller(line 520)
0.00
303. CASH (X)FROM ()TO BORROWER
1,233.00
603. CASH ()FROM ()TO SELLER
0.00
SUBSTITUTE FORM 1099 SELLER STATEMENT - The information contained in Blocks E, G, H and I and on line 401 (or, if line 401 is asterisked, lines 403 and 404), 406, 407 and
408 -412 (applicable part of buyer's real estate tax reportable to the IRS) is important tax information and is being fumished to the Internal Revenue Service. If you are required to file a
retum, a negligence penalty or other sanction will be imposed on you if this item is required to be reported and the IRS determines that it has not been reported.
SELLER INSTRUCTION - If this real estate was your principle residence, file form 2119, Sale or Exchange of Principal Residence, for any gain, with your income tax return; for other
transactions, complete the applicable parts of form 4797, Form 6252 and/or Schedule D (Form 1040).
You are required by law to provide Walker County Title Company (936) 295 -8173 with your correct taxpayer identification number.
If you do not provide Walker County Title Company (936) 295 -8173 with your correct taxpayer identification number, you may be subject to civil or criminal penalties.
L.' Settlemrtein , a M .> ¢ x.. , ?; 8J t 2 ` , ` a nfir.'
201.10*z 0.
700. Total sales /broker commission
Paid From
Borrower's
Funds at
Settlement
Paid From
SeIler's
Funds at
Settlement
Division of commission (line 700) as follows:
701. $
702. $
703. Commission paid at settlement
704.
705.
706.
800. .r : Items �,�
i'�,a-
801. Loan origination fee
802. Loan discount
803. Appraisal fee
804. Credit report
805. Lender's inspection fee
806. Mortgage insurance application fee
807. Assumption fee
808.
809.
810.
811.
812.
813.
814. Yield Spread Premium
900 . ' t$ o- 4uY., -� d.=
901. Interest from
902. Mortgage insurance premium for
903. Hazard insurance premium for
904.
905. VA Funding Fee
1000. Rene , e -
, : -
1001. Hazard insurance
1002. Mortgage insurance
1003. City property taxes
1004. County property taxes
1005. Annual assessments (maint.)
1006.
1007.
1008.
1009. Aggregate Adjustment
1100. Title attaigea. Title charge
1101. Settlement or dosing fee
1102. Abstract or title search
1103. Title examination
1104. Title insurance binder
1105. Document preparation
1106. Notary fees
1107. Attomey's fees to
includes above items no.:
1108. Title insurance to Walker County Title Company
895.00
includes above items no.: T19, Tax Del, NYDP
1109. Lender's coverage $96,110.70 $895.00
1110. Owner's coverage
1111. State Guaranty Fee (Owner)
1112. State Guaranty Fee (MTG) to Walker County Title Company
5.00
1113. Escrow /Closing Fee to Walker County Title Company
100.00
1114. Tax Certificates to Walker County Title Company
10.00
1115. Delivery Fee to Walker County Title Company
25.00
1200 ": Governmentr+�ip
1201. Recording fees: Mortgage $144.00 ucc $54.00
198.00
1202. City /county tax/stamps:
1203. State tax/stamps:
1204.
1205.
1206.
� „ooh
Additional
1301. Survey
1302. Pest inspection
1303.
1304.
1305.
1306. Property Taxes - NOW TAX EXEMPT
1400. Total settlement charges (entered on lines 103, section J and 502, section K)
1,233.00
0.00
GF: 201103240
CERTIFICATION
I have carefully reviewed the HUD -1 Settlement Statement and to the best of my knowledge and
belief, it is a true and accurate statement of all receipts and disbursements made on my account or by me
in this transaction. I further certify that I have received a copy of the HUD -1 Settlement Statement.
SELLERS:
City of Huntsville
PURCHASERS:
City of Huntsville Mfit.v oA-
To the best of my knowledge, the HUD -1 Settlement Statement which I have prepared is a true and
accurate account of the funds which were received and have been or will be disbursed by the undersigned
as part of the settlement of this transaction.
Walker County Title Company
3(?\�'IZa Iv
Settle � - nt Age Date
WARNING: It is a crime to knowingly make false statements to the United States on this or any other
similar form. Penalties upon conviction can include a fine and imprisonment. For details, see: Title 18
U.S. Code Sections 1001 and 1010.
GF #: 201103240
Closing Date: 3/28/2012
Seller: City of Huntsville
Buyer: City of Huntsville
Legal: Lot 2, Block 66, Huntsville Townsite
CLOSER: Judy Thornton
WALKER COUNTY TITLE COMPANY
1109 University Avenue
Huntsville, Texas 77340
Gentlemen:
This is to confirm that Judy Thornton is the closer on the above referenced transaction and that the
undersigned were made aware of the fact that said Closer is not an attorney. Said closer did not discuss,
nor explain, nor interpret any of the legal documentation for any of the closing.
Closer merely presented documentation to the undersigned for all signatures and made no representations
to the effect of said legal documentation or other documents used in connection with said closing. Closer
made no representation concerning city or governmental zoning or use ordinances, statutes or regulations
and made no statements or representation concerning the merchantability of the property or fitness for
any contemplated use by the Buyer.
Buyer acknowledges Closer did not make any comments, statements, explanations or representations
concerning arbitration or any arbitration provisions of the title policy(ies).
The Buyer and Seller acknowledge that any survey, Wood Destroying Insect Report (or like report)
and /or Property Condition/Inspection Report have been ordered by persons other than Closer or any
representative and /or employee of Walker County Title Company and that Closer has made no
statements, interpretations and/or representation concerning the survey, Wood Destroying Insect Report
(or similar report) and /or Property Condition/Inspection Report furnished for this transaction.
SELLERS:
City of Huntsville
PURCHASERS:
City of Huntsville A 141 f
Release of Lien
Return to:
WALKFT COUNTY TITLE COMPANY
19 ! 1IVERS!TV AVENUE
HUNTSVILLE, TEXAS 77340
Date: MAY 20, 2013
Holder of Note and Lien: TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
Holder's Mailing Address: P.O. BOX 13941, AUSTIN, TRAVIS COUNTY, TEXAS 78711 -3941
Note
Bk Vol P9
Date: MARCH 28, 2012 00004041 OR
Original principal amount: $96,110.70
Borrower: CITY OF HUNTSVILLE
Lender: TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
Maturity date: APRIL 31, 2012
1075 260
Note and Lien Are Described in the Following Documents: RECORDED IN VOLUME 1018, PAGE 523 OF
THE OFFICIAL PUBLIC RECORDS OF WALKER COUNTY, TEXAS. SAID LIEN BEING MODIFIED
BY MODIFICATION, RENEWAL AND EXTENSION AGREEMENT RECORDED DECEMBER 17, 2012,
AND RECORDED IN VOLUME 1052, PAGE 846, OF THE OFFICIAL PUBLIC RECORDS OF WALKER
COUNTY, TEXAS.
Property (including any improvements):
SEE EXHIBIT A ATTACHED HERETO AND INCORPOATED HEREIN FOR ALL PURPOSES.
Holder of Note and Lien is the owner and holder of the Note and Lien described above.
For value received, Holder of Note and Lien releases the Property from the Lien.
Holder of Note and Lien expressly waives and releases all present and future rights to establish or enforce
the Lien as security for payment of any future or other indebtedness.
When the context requires, singular nouns and pronouns include the plural.
Executed this day of VA i , - 0 i3 in 7-4.40,- '1, S County, Texas.
TEXAS DEPA : THE ► OF HOUSING AND COMMUNITY AFFAIRS
JiJLv4i drib
BY:
Name: !M- QC -1(A:7 l I,-4 0 L. -.0
Its: Duly Authorized Representative
THE STATE OF TEXAS
COUNTY OF TRAVIS
This instrument was acknow ed ed before me on the day of , 20 13, by
DEPART ENT OF
HOUSING duly authorized representative of the TEXAS
D G AND COMMUNITY AFFAIRS, a public and official agency of the State of
Texas, on behalf of said agency.
(Seal;
441714, PEGGY M. HENDERSON
j`...� ' 1 � Nlha d Bond Mao at Tow
JUN 24E�15
•
AFTER RECORDING RETURN TO:
City of Huntsville
1212 Avenue M
Huntsville, Tx. 77340
ice— 411.►l
Notary Pub ic, _e as
tate o
METES AN.D .BOUNDS DESCRIPTION of
B,k
907 Avenue P,. Huntsville, Texas �-��J�J040'� 1 OR
Vol
1075 261
P9
.Being a 0.2346 of an acre (10,218 square feet) tract ofland located in the Pleasant Gray League,
Abstract 24, Walker County, Texas, being a portion of Lot 2, Block 66 of the Huntsville Townsite
and being all of that certain tract of land conveyed to the City of Huntsville, by deed recorded in
Volume 434, Page 763 of the Official Public .Records of Walker County, Texas (O.P.R.W.C.T,);
said 0:2346 of an acre of land being more particularly described by metes and bounds as follows:
BEGINNING at an axle found in the west line of Avenue 0 (width varies) rand being the
northeast corner of that certain tract of land conveyed to Jasper. Bennett, Jr., by deed recorded in
Volume 376, Page 379 of the Deed Records of Walker County, Texas (D.R.W.C.T.), also being:
the southeast corner of the herein described tract;
THENCE, South 86 °33'28" West, a distance of 126.30 feet, along the northerly line of said
Bennett tract to a set 5/8 -inch iron rod with "GS" cap set for corner;
THENCE, North 02 °13'28" West, a distance of 50.64 feet,,-to a 5/8 -inch iron rod. with "GS"
cap set for corner, being in the southerly line of that certain tract of land conveyed to the Carrie
Rollings Estate (no deed of record found), from which a found 1/2 -inch iron rod bears South 80°
22' West, 2.56 feet;
THENCE, North 86 °.16'43" East, .a distance of 66.00 feet, along the southerly line of Rollings
Estate tract to a set 5/8 -inch iron rod with "GS" cap for the southeast corner of said Hollings
Estate tract;
THENCE, North 02 °14'28" West, a distance of 62.80 feet, along the easterly line of said
Railings Estate tract to a point for corner in the southerly line of that certain residue tract
conveyed to M.M. Rollings and wife Hortense Rolling, by deed recorded in Volume 149, Page
438 of the said Deed Records, from which a found 1/2 -inch iron rod bears North 89 °39' West,
0.50 feet;
THENCE, North 86 °15'50" East, a distance of 60.30 feet, along the southerly line of said
residue tract to the northwest corner of that certain residue tract conveyed to the City of
Huntsville, by deed recorded in Volume 421, Page 37 of said Official Public Records, and from
which a found l/2 -inch iron rod bears South 79 °41' West, 0.54 feet;
THENCE, South 02 °14'28" East, a distance of 114.07 feet, .along the southerly line of said
City residue tract and Avenue 0 to the .Point of Beginning and containing 0.2346 of an acre
(10,218 square feet) tract of land.
Horizontal Control is based on holding City of Huntsville. Monuments No. 6542 (grid
coordinate of North = 10, 259 ,631.48 &. East= 3,796,650.84) and 6787 (grid .coordinate of North
10,260,718.74 & East= 3,796,609.77). Bearings described are related to the TeXaS Coordinate
System of 1983, Central Zone, .Distances shown are US Survey Feet in "Field Horizontal" units
and may be converted to "GRID" units by multiplying by a combined scale factor of 0.99988.
Plat of even date accompanies this description.
Prepared by:
GeoSblutions, LLC
25814 Budde Road.
Spring, Texas
Tel. 281 - 681 -9766
Job No. 12- 249 -030
PAGE . OF
MARY E. CHRUSZCZAK
'• 496 0 �v.:
• y,>'
1
Bk Vol Po
00004041 OR 1075 262
Filed for Record in:
Walker County
On: May 22,2013 at 03:34P
As a
Recordings
Document Number: 00004041
Amount: 24.00
Receipt Number - 72914
By,
Rachel Yarabeck
STATE OF TEXAS COUNTY OF WALKER
I hereby certify that this instrument was
filed on the date and time stamped hereon by me
and was duly recorded in the volume and page
of the named records of:
Walker County
as stamped hereon by me.
May 22,2013
Kari A. French, Walker County Clerk
Walker County
EXHIBIT A
LEGAL DESCRIPTION
Being 0.236 acres of land, also called Lot 2, Block 66 of Huntsville Townsite, Walker County,
Texas, according to the recorded deed thereof in Volume 434, Page 763 of the Deed Records of
Walker County, Texas, said 0.236 acres being more particularly described by metes and bounds
as follows:
BEGINNING at a 1/2" iron rod found at the southeast corner of the intersection of Avenue P and
7th Street, having a Texas State Plane coordinate of Y= 10,260,670.695 X= 3,796,635.030;
THENCE South 02 degrees 11 minutes 43 seconds West, a distance of 652.65 feet to a ''A" iron
rod set for the most westerly northwest corner and the POINT OF BEGINNING of herein
described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 67.87 feet to a 1" iron bar
found for the interior corner of herein described tract;
THENCE North 02 degrees 11 minutes 43 seconds West, a distance of 62.92 feet to a 1/2" iron
rod set for the most northerly northwest corner of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 60.30 feet to a 1/2" iron
rod set for the northeast corner of herein described tract, also being South 86 degrees 17 minutes
33 seconds West, a distance of 80.83 feet from a found 60D nail at the base of an old fence
corner post;
THENCE South 02 degrees 11 minutes 43 seconds East, a distance of 113.52 feet to a point for
corner for the southeast corner of herein described tract;
THENCE South 86 degrees 17 minutes 33 seconds West, a distance of 128.17 feet to a 1/2" iron
rod set for the southwest corner of herein described tract,
THENCE North 02 degrees 11 minutes 43 seconds West, A distance of 50.60 feet to the POINT
OF BEGINNING and containing 0.236 acres of land.
T: \Idld \Loan Docs \NSP \Interim Construction Loans \1262 City of Huntsville \Interim Construction Loan
Agreement_20 1 2022 7_v4_cp. doc
Page 35 of 53
WALKER COUNTY TITLE COMPANY
Established 1898
LLOYD C. MARTIN
PRESIDENT
JOE B. HENDERSON, JR.
EXECUTIVE VICE PRESIDENT
City of Huntsville
Attn: Sherry McKibben
1212 Avenue M
Huntsville, Texas 77340
J
1109 UNIVERSITY AVENUE
HUNTSVILLE, TEXAS 77340
June 3, 2013
HURLENE SAVAGE
VICE PRESIDENT
GENERAL MANAGER
TELEPHONE 936/295 -8173
FAX 936/295 -0371
RE: GF No.: 2012121287
Sale to: Geneva Leigh
Property: 907 Avenue P, P. Gray League (0.2346 acres), Abstract #24; Lot 2, Block
66, Huntsville Townsite
Dear Ms. Mckibben:
In connection with the above transaction, we enclose your original recorded Release of Lien.
It is a pleasure to be of service to you.
Cordially,
WALKER COUNTY TITLE COMPANY
Cjildy Thornton
Escrow Officer
Enc.
Serving San Jacinto County Since 1972
Dear NSP Borrower,
Enclosed please find the original
Promissory Note and recorded Deed
of Trust documents associated with
your loan through TDHCA, which has
been fully released.
Please archive these documents with any
other original documents associated to
loan number 7709 .9/99/,u,/,
If you have any questions, please contact
Melissa M. Whitehead by email at
melissa .whiteheadPtdhca.state.tY.us.
You may also call (800) 298 -4013 or
(512) 475-3349.
IT HAS BEEN A PLEASURE
DOING BUSINESS WITH YOUR
ORGANIZATION.
Ale
CL uj CD
A
C.) W f•.
E co lM-
W
CC o z
V =I—
•
PAID IN FULL
'7"1 Dc-'1
00Y 09689 OR
MODIFICATION, RENEWAL AND EXTENSION AGREEMENT
( "Agreement ")
Vol
1052
1OTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON,
YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING
TFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN
AL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:
%'YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
u.
t �
Date:
e ,Q414-e .- (3 , 2012
Holder of Note and Lien: TEXAS DEPARTMENT OF HOUSING AND COMMUNITY
AFFAIRS, a public and official department of the State of Texas
Holder's Mailing Address: P.O. Box 13941, Austin, Travis County, Texas 78711 -3941
Obligor: CITY OF HUNTSVILLE, a political subdivision of the State of
Texas
Obligor's Mailing Address: 1212 Avenue M, Huntsville, Walker County, Texas 77340
Promissory Note:
Date: March 28, 2012
Original principal amount:
($96,110.70)
Ninety -Six Thousand One Hundred Ten and 70/100 Dollars
Maker: CITY OF HUNTSVILLE, a political subdivision of the State of Texas
Payee: TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS, a
public and official department of the State of Texas
Maturity date: August 31, 2012
Unpaid Principal and Interest on Note: Unpaid Principal of $0.00 (of which $96,110.70 has
not been drawn down).
Lien Documents: The Note being secured by an Interim Construction Deed of Trust (With
Security Agreement and Assignment of Rents) ( "Deed of Trust ") of even date with the Note
executed by City of Huntsville, a political subdivision of the State of Texas, to Timothy K. Irvine,
Trustee, filed of record on April 3, 2012 and recorded under Document Number 00002513,Volume
1018, Page 523, of the Official Public Records of Walker County, Texas, ( "the Records ").
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Page 1 of 5
7)
ENTERED JAN 1 7 2013
Ps
346
Bk v 1 1 F's
000a 9689 OR 1052 847
Property (including any improvements): In Walker County, Texas, being more particularly described
in the lien document described above and in Exhibit "A ", attached hereto and incorporated herein.
Extended Maturity Date of Note: December 31, 2012
Modified Terms:
"The principal and interest, if any, of this Note shall be due and payable upon the sale
of the developed real property described below or on December 31, 2012, whichever
occurs first ( "Extended Maturity Date ")
Upon extended maturity or the sale of the developed lot or lots, whichever is
earlier, any deferred, unpaid and unwaived balance hereunder shall be due and
owing."
The Note is secured by liens against the Property. Whether Obligor is primarily liable on the Note or
not, Obligor nevertheless agrees to pay the Note and comply with the obligations expressed in the
Note and the Lien Documents, as modified and extended pursuant to this Agreement.
For value received, Obligor renews the Note, extends the maturity date, and promises to pay to the
order of Holder of Note and Lien, according to the Modified Terms, the Unpaid Principal and
Interest on Note. All unpaid amounts are due by the Extended Maturity Date of the Note. Obligor
also extends the liens described in the Lien Documents.
The Note and the Lien Documents continue as written, except as provided in this agreement and
Obligor acknowledges and reaffirms its liability to Holder of Note and Lien thereunder. In the event
of an inconsistency between this Agreement and the terms of the Lien Documents, this Agreement
shall govern.
Obligor warrants to Holder of Note and Lien that the Note and the Lien Documents, as modified, are
valid and enforceable and represents that they are not subject to rights of offset, rescission, or other
claims.
Any default by Obligor in the performance of its obligations herein contained shall constitute a
default under the Note and Deed of Trust, and shall allow Holder of Note and Lien to exercise all of
its remedies set forth in the Note and the Lien Documents.
Holder of Note and Lien does not, by its execution of this Agreement, waive any rights it may have
against any person not a party hereto.
The terms and provisions hereof shall be governed by and construed in accordance with the laws of
the State of Texas, except as otherwise expressly provided herein.
THIS MODIFICATION EMBODIES THE FINAL, ENTIRE AGREEMENT AMONG THE
T: \ldld\Loan DOGS \NSP\ModExtRenewalAgmtFINAL\A_D \City of Huntsville770999991262 \FORMModify Extend (2).DOC
Page 2 of 5
B k
U u_i cu 0 '9' 6 ,° 9 OR
Vol
1052
PARTIES HERETO AND THERETO AND SUPERSEDES ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS,
WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND THEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OR
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO OR THERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIESE HERETO OR THERETO.
When the context requires, singular nouns and pronouns include the plural.
This Agreement is executed to be effective on August 31, 2012.
OBLIGOR:
By:
Name: Mac Woodward
Title: Mayor
STATE OF TEXA Ali) §
COUNTY OF §
This instrument was acknowledged before me by Mac Woodward, Mayor of City of
Huntsville, a politi 1 subdiv. ion of the State of Texas, on behalf of said political subdivision, on
this day of - -n2012.
(Seal)
State of Texas
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Page 3 of 5
848
B
00009639 OR
HOLDER OF NOTE AND LIEN:
Vol Po
1152 °'49
TEXAS DEPARTMENT OF HOUSING AND
COMMUNITY AFFAIRS, a public and official
department of the State of Texas
By:
Name: 1114 /LO A t7 L , //OLLpa) 4''
Its: Duly authorized officer or representative
STATE OF TEXAS
COUNTY OF TRAVIS
This instrument was acknowledged before me on this day of tJ(pmb17, 2012,
y 4f1J L L. ,I /n� duly authorized officer or representative of the TEXAS
b ay d
DEPAR MENT OF HOUSING AND COMMUNITY AFFAIRS, a public and official agency of
the State of Texas, on behalf of such agency.
(Se Nlkik:s'4':.?% CONNIE NUNLEY
otary Public, State of Texas
I *= Notary Without Bond
VP ,,= My Commission Expires
t+
''%',o''''''`' AUGUST 12, 2014
PREPARED BY:
Texas Department of Housing
and Community Affairs
Legal Services Division
221 East 11 th Street
Austin, Texas 78701
(512) 475 -2574
Notary Public, State of Texas
AFTER RECORDING RETURN TO:
Texas Department of Housing
and Community Affairs
Legal Services Division
P.O. Box 13941
Austin, Texas 78711 -3941
Joniel Crim (512) 475 -3865
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Page 4 of 5
B k
00009689 OR
EXHIBIT "A"
LEGAL DESCRIPTION
Vol P91
105-)
Being 0.236 acres of land, also called Lot 2, Block 66 of Huntsville Townsite, Walker County,
Texas, according to the recorded deed thereof in Volume 434, Page 763 of the Deed Records of
Walker County, Texas, said 0.236 acres being more particularly described by metes and bounds
as follows:
BEGINNING at a 1/2" iron rod found at the southeast corner of the intersection of Avenue P and
7th Street, having a Texas State Plane coordinate of Y= 10,260,670.695 X= 3,796,635.030;
THENCE South 02 degrees 11 minutes 43 seconds West, a distance of 652.65 feet to a Y2" iron
rod set for the most westerly northwest corner and the POINT OF BEGINNING of herein
described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 67.87 feet to a 1" iron bar
found for the interior corner of herein described tract;
THENCE North 02 degrees 11 minutes 43 seconds West, a distance of 62.92 feet to a 1/2" iron
rod set for the most northerly northwest corner of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 60.30 feet to a 1/2" iron
rod set for the northeast corner of herein described tract, also being South 86 degrees 17 minutes
33 seconds West, a distance of 80.83 feet from a found 60D nail at the base of an old fence
corner post;
THENCE South 02 degrees 11 minutes 43 seconds East, a distance of 113.52 feet to a point for
corner for the southeast corner of herein described tract;
THENCE South 86 degrees 17 minutes 33 seconds West, a distance of 128.17 feet to a 1/2" iron
rod set for the southwest corner of herein described tract,
THENCE North 02 degrees 11 minutes 43 seconds West, A distance of 50.60 feet to the POINT
OF BEGINNING and containing 0.236 acres of land.
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Page 5 of 5
L."
Bk
013009689 OR
1052
Filed for kecora in
Walker County
On: Dec 17,2012 at 04:22F
As a
Recordings
Document Number: 00009689
Amount: 36.00
Receipt Number - 67319
Bs,
Rachel Yarabeck
P9
851
STATE OF TEXAS COUNTY OF WALKER
I hereby certify that this instrument was
filed on the date and time stamped hereon bs me
and was duly recorded in the volume and page
of the named records of:
Walker County
as stamped hereon bs me.
Dec 17,2012
Kari A. French, Walker County Clerk
Walker County
U.S. $96,110.70
PROMISSORY NOTE
( "NOTE ")
PAID IN FULL
41776t1919? /42.4 t
March c� , 2012
NEIGHBORHOOD STABILIZATION PROGRAM ( "NSP ")
Awarding Federal Agency: United States Department of Housing and Urban Development
TDHCA Federal Award Number: B- 08 -DN -48 -0001
Federal Award Year (Year of Award from HUD to TDHCA): 2008
TDHCA Award Year (Year of TDHCA Board Approval): 2009
For value received, CITY OF HUNTSVILLE, a political subdivision of the State of Texas
( "Maker ") promises to pay to the order of TEXAS DEPARTMENT OF HOUSING AND
COMMUNITY AFFAIRS, a public and official agency of the State of Texas ( "Payee ") at 221 E. 11th
Street, P.O. Box 13941 in the City of Austin, Travis County, Texas 78711 -3941 (or at such other place
in Austin, Travis County, Texas, as Payee may from 'time to time designate by written notice to
Maker), the sum of Ninety Six Thousand One Hundred Ten and 70/100 Dollars $96,110.70, or so
much thereof as may be advanced and outstanding, together with interest on the principal balance from
the date hereof at a rate equal to Zero percent (0 %) per annum.
No interest shall accrue on this Note unless the maturity of this Note has been accelerated as
hereinafter provided.
The principal and interest, if any, of this Note shall be due and payable upon the sale of the
developed real property described below or on August 31, 2012, whichever occurs first ( "maturity ").
Payee agrees to defer and waive repayment of the principal loan amount, but only in the event
Maker:
1. has not been in default under any terms at any time of this Note or any document securing
payment of this Note, including without limitation, the Deed of Trust; and
2. has complied with the affordability requirements to wit, the rehabilitated or newly constructed
single family residential dwelling must be set aside for an individual or family whose annual
income does not exceed 120% of the area median income as defined in the Housing and
Economic Recovery Act 2301(f)(3)(A)(i) and (ii) of 2008 ( "Eligible Household "); and
3. has "paid" the lot release price of $96,110.70 by and upon the closing of a permanent mortgage
loan made to an Eligible Household; and
4. has sold the rehabilitated or newly constructed single family residential dwelling at a sales price
the lessor of one of the following amounts:
i. the cost to acquire and construct or rehabilitate the Property (as herein defined)
to a decent, safe, and habitable condition, or
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ORJGINAL
ii. one hundred percent (100 %) of the appraised value after rehabilitation or
construction to an Eligible Household; and
5. if the Maker has utilized the Financing Mechanisms as defined in the Deed of Trust, and has
converted the deferred, waived principal loan amount to permanent mortgage loans and/or
down payment assistance loans under the NSP to an Eligible Household, then the Payee may
forgive up to $30,000.00 per down payment assistance loan, or;
6. if Maker has utilized the Financing Mechanisms as defined in the Deed of Trust, and has
submitted to Payee evidence fully executed and recorded, homebuyer assistance loans in a total
amount not to exceed $96,110.70, then Payee may forgive up to an amount equal to the full
unpaid principal balance of the Note for the Property to a thirty (30) year, zero percent (0 %),
fully amortizing permanent mortgage loan from Payee to an Eligible Household whose income
does not exceed fifty (50 %) of the area median income as defined by NSP, if applicable.
Upon maturity or the sale of the last developed lot to an Eligible Household, whichever is
earlier, any deferred, unpaid and unwaived balance remaining hereunder shall be forgiven, but only in
the event Maker has not at any time been in default under any terms of this Note or any document
securing same.
Computations of interest on the unpaid principal balance of this Note shall be made on the basis
of 365 or 366 days in a year, as applicable.
After maturity (by acceleration or otherwise) and until paid, the unpaid, unwaived principal
balance and accrued interest then due shall bear interest at the lesser of (i) ten percent (10 %) per annum
or (ii) the highest interest rate allowed by Applicable Law ( "Default Interest Rate "). Notwithstanding
any other provision of this Note, the daily Default Interest Rate shall be calculated by dividing the
Default Interest Rate per annum applicable for such day by the actual number of days in the calendar
year (whether 365 or 366).
This Note may be prepaid in part or in its entirety at any time, without notice or penalty but any
amounts prepaid may not be reborrowed. Partial prepayment shall be applied first to accrued and
unpaid interest, if any, with the balance to the principal installments in inverse order of maturity. Any
payment received more than thirty (30) days before it is due shall be considered a prepayment, unless
Maker otherwise designates in writing at the time such payment is made.
Any amounts owing on this Note shall be payable at the address of Payee stated above (or at
such other place in Austin, Travis County, Texas designated by Payee in writing delivered to Maker at
the address of Maker set forth above) in lawful money of the United States of America that is legal
tender for public and private debts at the time of payment. The making of any payment in other than
immediately available funds, which Payee, at its option, elects to accept shall be subject to collection,
and interest shall continue to accrue until the funds by which such payment is made are available to
Payee for its use.
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If any payment required under this Note is not paid within 15 days after it becomes due and
payable, then Maker shall pay to Payee, subject to the provisions of this Note limiting the amount of
interest, the payment of a late charge (the "Late Charge ") to compensate Payee for the loss of use of
funds and for the administrative expenses and costs of handling such delinquent payment equal to a
one -time charge of five percent (5.00 %) of the amount of such payment that was not timely paid (but
such Late Charge together with all interest payable hereon shall not exceed the maximum lawful rate
under Applicable Law). The term "Applicable Law" as used herein means (1) the law pertaining to
maximum rates of interest that is now in effect and (2) any law that comes into effect at any time in the
future allowing a higher maximum interest rate than the law now in effect. Payee is not obligated to
accept any past due payment that is not accompanied by a Late Charge, but may accept such payment
without waiving its rights to collect the Late Charge. In no event shall a Late Charge be payable by
reason of the acceleration of the indebtedness evidenced by this Note; therefore, a Late Charge would
only be due and payable with respect to payments under this Note which became delinquent prior to the
acceleration of the indebtedness evidenced hereby.
Maker shall pay a charge of $25.00 for any check returned for any reason.
If this Note is placed in the hands of an attorney for collection or is collected by legal
proceedings of any kind, Maker agrees to pay all costs of collection, including reasonable attorneys' fee
and costs to the extent allowed by law.
Except as provided in this Note, Maker and each endorser and guarantor of this Note jointly and
severally waive grace, presentment for payment, notice of renewals and extensions, notice of
nonpayment, notice of protest, notice of and demand for payment of installments or other amounts
coming due under this Note that are not paid when due, notice of intent or election to accelerate
maturity or the actual acceleration of maturity of the indebtedness evidenced by this Note, and
diligence in the collection of this Note, in filing suit on this Note and in seizing or foreclosing on any
collateral securing this Note and agree to one or more extensions of maturity and partial payments
before or after maturity without prejudice to rights of the holder of this Note.
This Note is for payment of construction costs for the Property which is secured by an implied
or equitable vendor's lien on the Property by operation of law in a Warranty Deed executed by Mary R.
Woodward, Frances R. Snipes, Florin R. Klussmann, Sanford G. Robinson and Michael C. Robinson
to Maker, dated September 16, 2000, filed for record on September 19, 2000, under Clerk's Document
No. 05768, Volume 434, Page 763 of the Official Public Recoreds of Walker County Texas (the
"Records "). This Note is additionally secured by the liens and security interests granted in the interim
construction deed of trust (with security agreement and assignment of rents) ( "Deed of Trust ") of even
date herewith from Maker to Timothy K. Irvine, Trustee for Payee conveying the following property
(hereinafter referred to as the "Property"):
Being 0.236 of an acre, more or less out of LOT TWO (2), BLOCK SIXTY -SIX (66),
HUNTSVILLE TOWNSITE, P. GRAY LEAGUE, A -24, Walker County, Texas and
being more particularly described by metes and bounds on Exhibit "A" attached hereto
and made a part hereof.
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The proceeds of this Note will be advanced to Maker at its special instance and request in
accordance with the terms of that certain Construction Loan Agreement dated of even date herewith,
between Maker and Payee (collectively, the "Loan Agreement "), and incorporated herein by reference
for all purposes.
Any default under the Deed of Trust securing this Note shall be deemed to be a default under
this Note. IF ANY PART OF THE COLLATERAL SECURING THIS NOTE IS
TRANSFERRED OR CONVEYED WITHOUT PAYEE'S PRIOR CONSENT, THIS NOTE IS
IMMEDIATELY DUE AND PAYABLE AND PAYEE MAY INVOKE ANY REMEDIES
PROVIDED UNDER THE DEED OF TRUST SECURING THIS NOTE. If the collateral is
residential real property containing fewer than five dwelling units or a residential manufactured
home occupied by Maker, exceptions to this provision are limited to (a) a subordinate lien or
encumbrance that does not transfer rights of occupancy of the property; (b) creation of a
purchase money security interest for household appliances; (c) transfer by devise, descent, or
operation of law on the death of a co- owner; (d) grant of a leasehold interest of three years or
less without an option to purchase; (e) transfer to a spouse or children of owner or between co-
owners; (f) transfer to a relative of owner or on owner's death; and (g) transfer to an inter vivos
trust in which owner is and remains a beneficiary and occupant of the property.
In the event of default in the payment of any part of the principal or interest on this Note and
Maker's failure to cure the default within thirty (30) days after Payee's delivery of written notice of
default to Maker, or in the event of default in the performance of any other agreement contained in the
Loan Agreement or any document securing the payment of this Note or otherwise executed in
connection herewith, and Maker's failure to cure the default within thirty (30) days after Payee's
delivery of written notice of the default to Maker, then the holder of this Note shall have the
unconditional right, without demand, notice, or other action, to declare the unpaid principal balance of
this Note, together with interest accrued on the unpaid principal balance, at once due and payable and
to foreclose each lien and security interest securing the payment of this Note, either under any power of
sale contained in any documents creating such lien or security interest or by court proceedings, as the
holder may elect. Notice shall be deemed to have been delivered upon actual receipt or upon deposit, if
deposited in an official depository of the United States Postal Service, properly addressed to the party
entitled to the notice, marked certified mail, return receipt requested, and containing sufficient postage.
For the purpose of notice, Maker's address is 1212 Avenue M, Huntsville, Walker County, Texas
77340. Maker shall have the right to change its address and specify any other address within the
United States of America by at least ten (10) days' written notice to Payee.
All agreements and transactions between Maker and Payee, whether now existing or hereafter
arising, whether contained herein or in any other instrument, and whether written or oral, are hereby
expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of
the maturity hereof, prepayment, demand for payment or otherwise, shall the amount contracted for,
charged or received by Payee from Maker for the use, forbearance, or detention of the principal
indebtedness or interest hereof, which remains unpaid from time to time, exceed the maximum amount
permissible under Applicable Law, it particularly being the intention of the parties hereto to conform
strictly to the law of the State of Texas and of the United States of America, whichever is applicable.
Any interest payable hereunder or under any other instrument relating to the loan evidenced hereby that
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is in excess of the legal maximum under Applicable Law, shall, in the event of acceleration of maturity,
prepayment, demand for payment or otherwise, be automatically, as of the date of such acceleration,
prepayment, demand or otherwise, applied to a reduction of the principal indebtedness hereof and not
to the payment of interest, or if such excessive interest exceeds the unpaid balance of such principal,
such excess shall be refunded to Maker. To the extent permitted by Applicable Law, determination of
the legal maximum amount of interest shall at all times be made by amortizing, prorating, allocating
and spreading in equal parts during the period of the full stated term of the loan, all interest at any time
contracted for, charged or received from Maker in connection with the loan, so that the actual rate of
interest on account of such indebtedness is uniform throughout the term thereof.
This Note shall be governed by and construed in accordance with the laws of the State of Texas
and the United States of America from time to time in effect.
Notwithstanding anything herein to the contrary, Payee shall have no recourse against Maker,
nor against any guarantor, if any, for payment and performance of all of the obligations, covenants and
agreements of Maker under this Note and the documents securing same including, but not limited to
the Deed of Trust (said documents hereafter collectively called "Security Documents "), except to the
full extent of all of the Property which constitutes security for this Note. If default occurs in the timely
and proper payment of any portion of such indebtedness or in the timely performance of any of such
obligations, agreement or covenants, any judicial proceedings brought by Payee against Maker or any
guarantor shall be limited to the protection and preservation of the Property, the preservation,
enforcement and foreclosure of the liens, mortgages, assignments, rights and security interests now or
at any time hereafter securing the payment of the Note, and enforcement and collection of obligations,
covenants and indebtedness for which Maker and any guarantors remain liable as provided in this
paragraph. If there is a foreclosure of any such liens, mortgages, assignments, rights, and security
interests securing the payment of this Note, by power of sale or otherwise, no judgment for any
deficiency upon such indebtedness shall be sought or obtained by Payee against Maker.
Notwithstanding the foregoing provisions of this paragraph or any other agreement, Payee shall have
full recourse against Maker and all guarantors, if any, for: (a) fraud or misrepresentation by Maker or
any guarantor in connection with the transactions herein contemplated; (b) failure to pay taxes,
assessments, charges for labor or materials or other charges that can create liens on any portion of the
Property; (c) the misapplication of (i) proceeds of insurance covering any portion of the Property, or (ii)
proceeds of the sale or condemnation of any portion of the Property, or (iii) rentals received by or on
behalf of Maker subsequent to the date on which Payee gives written notice of the posting of
foreclosure notices, (d) failure to prevent waste to the Property unless Payee is compensated therefor by
insurance proceeds collected by Maker; (e) the return to Payee of all unearned advance rentals and
security deposits paid by tenants of the Property and not refunded to or forfeited by such tenants, (f) the
return of, or reimbursement for, all personalty taken from the Property by or on behalf of Maker, (g) all
court costs and for all attorneys' fees provided for in any instrument governing, securing or pertaining
to the payment of the Note; and (h) failure to comply with any indemnification provision or covenants
pertaining to environmental matters contained in the Security Documents.
Each term and provision of this Note is expressly subject to the terms and conditions of the
Neighborhood Stabilization Program Contract # 77099999126 executed between Office of Rural
Affairs established within the Department of Agriculture, a public and official agency of the State of
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Texas, and Maker herein, dated to be effective September 1, 2009 in the original amount of
$1,050,000.00, as assigned and transferred to Payee by Assignment of Contract on August 30, 2011,
and as may be amended from time to time ( "NSP Contract "), which provides acquisition and
rehabilitation or new construction of lot(s) development under the NSP; said NSP Contract is
incorporated herein by reference. The terms of the NSP Contract shall govern over any conflicting
provisions hereof.
THIS WRITTEN AGREEMENT AND THE OTHER WRITTEN AGREEMENTS,
INCLUDING THE COLLATERAL AGREEMENTS, SIGNED CONTEMPORANEOUSLY
WITH THE SIGNING HEREOF REPRESENT 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.
MAKER:
CITY OF HUNTSVILLE, a political subdivision of the
State of Texas
By:
Name: Bill Baine
Title: City Manager
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Exhibit A
Being 0.236 acres of land, also called Lot 2, Block 66 of Huntsville Townsite, Walker
County, Texas, according to the recorded deed thereof in Volume 434, Page 763 of the
Deed Records of Walker County, Texas, said 0.236 acres being more particularly
described by metes and bounds as follows:
BEGINNING at a 1/2" iron rod found at the southeast corner of the intersection of
Avenue P and 7th Street, having a Texas State Plane coordinate of Y= 10,260,670.695
X= 3,796,635.030;
THENCE South 02 degrees 11 minutes 43 seconds West, a distance of 652.65 feet to a
1/4" iron rod set for the most westerly northwest corner and the POINT OF BEGINNING
of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 67.87 feet to a 1"
iron bar found for the interior corner of herein described tract;
THENCE North 02 degrees 11 minutes 43 seconds West, a distance of 62.92 feet to a
1/2" iron rod set for the most northerly northwest corner of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 60.30 feet to a 1/2"
iron rod set for the northeast corner of herein described tract, also being South 86 degrees
17 minutes 33 seconds West, a distance of 80.83 feet from a found 60D nail at the base of
an old fence corner post;
THENCE South 02 degrees 11 minutes 43 seconds East, a distance of 113.52 feet to a
point for corner for the southeast corner of herein described tract;
THENCE South 86 degrees 17 minutes 33 seconds West, a distance of 128.17 feet to a
1/2" iron rod set for the southwest corner of herein described tract,
THENCE North 02 degrees 11 minutes 43 seconds West, A distance of 50.60 feet to the
POINT OF BEGINNING and containing 0.236 acres of land.
CL uj
■
..Jays
wla' LIU
CC
CO)
Ya 6 Avfarding
"s-
INTERIM CONSTRUCTION DEED OF TRUST
(WITH SECURITY AGREEMENT AND ASSIGNMENT OF RENTS)
( "Deed of Trust ")
NEIGHBORHOOD STABILIZATION PROGRAM
Federal Agency: United States Department of Housing and Urban Development
TDHCA Federal Award Number: B- 08 -DN -48 -0001
Federal Award Year (Year of Award from HUD to TDHCA): 2008
TDHCA Award Year (Year of TDHCA Board Approval): 2009
THE STATE OF TEXAS
§
COUNTY OF WALKER
Bk Vo1
P's
00002513 OR 1018 523
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.
ARTICLE I
Definitions
The following terms shall have the respective meanings assigned to them when used
herein.
1.01 Grantor: CITY OF HUNTSVILLE, a political subdivision of the State of Texas
1.02 Grantor's mailing address: 1212 Avenue M, Huntsville, Walker County, Texas 77340
1.03 Beneficiary: TEXAS DEPARTMENT OF HOUSING AND COMMUNITY
AFFAIRS, a public and official agency of the State of Texas, and any lawful owner,
holder, pledgee, or assignee of any indebtedness secured hereby.
1.04 Beneficiary's mailing address: P.O. Box 13941, Austin, Travis County, Texas 78711-
3941.
1.05 Trustee: Timothy K. Irvine of Travis County, Texas.
1.06 Mortgaged Property: The Real Property and the Personal Property.
1.07 Project: Single- family dwelling to be constructed or rehabilitated on the Real Property.
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Page 1 of 33
ENTERED JUN 14 2012
• •
1.08 NSP: Neighborhood Stabilization Program or ( "Program ") as authorized by the Housing
and Economic Recovery Act of 2008 as an adjunct to the Community Development Block Grant
0 Program. (Housing and Economic Recovery Act of 2008, Pub. L. 110 -289, 112 STAT 2850.)
T:ori
1.09 NOFA: Notice of Funding Availability issued by TDHCA for the NSP issued in 2009.
ce
1.10 NOFA -R: Notice of Funding Availability Re- Allocation.
m Q 1.11 NOFA -R- SERIES 2: Neighborhood Stabilization Program Re- allocation — Series 2
(NSPR- Series 2) issued in 2010.
Pi) M
f0 1.12 Eligible Household: Individual or families whose income[s] do not exceed 120% of
N N area median income ( "AMP') as defined in the Housing and Economic Recovery Act 2301
0 (f)(3)(A)(i) and (ii) of 2008.
0 0
0 0
0 1.13 Financing Mechanisms: Mechanisms that provide affordable homeownership
opportunities to assist homebuyers to purchase and redevelop a foreclosed property at a discount
and/or rehabilitate the property as defined in the Housing and Economic Recovery Act 2301
(c)(3)(A) of 2008.
1.14 Real Property: The real property described as: Being 0.236 of an acre, more or less out
of LOT TWO (2), BLOCK SIXTY -SIX (66), HUNTSVILLE TOWNSITE, P. GRAY LEAGUE,
A -24, Walker County, Texas and being more particularly described by metes and bounds on
Exhibit "A" attached hereto and made a part hereof, together with (i) all improvements thereon,
all rights, hereditaments and appurtenances belonging thereto including rights of ingress and
egress, easements, licenses, and all reversionary rights or interests of Grantor; (ii) all fixtures and
personal property now or hereafter attached to the Real Property; (iii) all renewals or
replacements thereof or articles in substitution therefore, whether or not now or later attached to
the Project in any manner; and (iv) all other interests of every kind which Grantor now has or at
any time hereafter acquires in and to the Real Property.
1.15 Personal Property: (i) all furniture, equipment and other personal property now or
hereafter owned by Grantor, located on the Mortgaged Property, and all renewals or
replacements thereof or articles in substitution therefore, whether or not the same are or shall be
attached to the Project in any manner; (ii) all building materials and equipment now or hereafter
delivered to the Mortgaged Property and all building and construction materials, equipment and
parts intended to be installed in or on the Real Property or Project; (iii) all plans and
specifications for the Project; (iv) all contracts and subcontracts relating to the Project; (v) all
deposits (including tenant's security deposits, if any), funds, accounts (including any accounts in
which escrows are deposited as a reserve for the payment of taxes, assessments and insurance on
the Mortgaged Property), contract rights, instruments, documents, general intangibles (including
trademarks, trade names and symbols used in connection therewith), and notes or chattel paper
arising from or by virtue of any transactions related to the Mortgaged Property; (vi) all permits,
licenses, franchises, certificates, and other rights and privileges obtained in connection with the
Mortgaged Property; (vii) all bank accounts in which rental income from the Mortgaged Property
is deposited; (viii) all proceeds arising from or by virtue of the sale, lease or other disposition of
any of the Real or Personal Property; (ix) all proceeds (including premium refunds) payable or to
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•
Bk Vol Ps
00002. OR 1018 525
be payable under each policy of insurance relating to the Project; (x) all proceeds arising from
the taking of all or a part of the Real Property or any rights appurtenant thereto, including change
of grade of streets, curb cuts or other rights of access, for any public or quasi - public use under
any law, or by rights of eminent domain, or by private or other purchase in lieu thereof; (xi) all
other interests of every kind and character which Grantor now has or at any time hereafter
acquires in and to the Personal Property and all property which is used or useful in connection
therewith.
1.16 Construction Loan Agreement: The NSP Construction Loan Agreement ( "Loan
Agreement ") of even date herewith executed by and between Grantor (Borrower in Loan
Agreement or the maker of the Note if different from Grantor) and Beneficiary (Lender in Loan
Agreement), which Loan Agreement sets forth, among other things, the procedure and
requirements for disbursing the loan proceeds to be evidenced by the Note.
1.17 Note: The NSP promissory note ( "Note ") of even date herewith executed by Grantor
payable to the order of Beneficiary in the original principal sum of $96,110.70 payable as therein
provided and finally maturing as therein provided, and all modifications, extensions and
renewals thereof.
1.18 Loan Documents: The NSP Note, this Deed of Trust, the Construction Loan Agreement,
and any and all other documents or instruments heretofore or hereafter executed by Grantor (or
the maker of the Note if different from Grantor) securing, evidencing or in any way pertaining to
the indebtedness evidenced by the Note and hereafter are the ( "Loan Documents. ")
1.19 Governmental Requirements. All laws, ordinances, statutes, codes, rules, regulations,
orders and decrees of the United States, the state, the county, the city, or any other political
subdivision in which the Mortgaged Property is located, and any other political subdivision,
agency or instrumentality exercising jurisdiction over Grantor or the Mortgaged Property
including, without limitation, the following: the Civil Rights Act of 1964 (42 U.S.C. 2000(d);
Executive Order 11063, as amended by Executive Order 12259; Executive Order 11246; Age
Discrimination Act of 1975 (42 U.S.C. 6101 et seq.); Equal Credit Opportunity Act (15 U.S.C.
1691 et seq.); Fair Credit Reporting Act (15 U.S.C. 1681 et seq.); Fair Housing Act (42 U.S.C.
3601 et seq.); the Americans with Disabilities Act of 1990 (P.L. 101 -336); of the Rehabilitation
Act of 1973 (29 U.S.C. 794) and implementing regulations (24 CFR Part 8); Architectural
Barriers Act of 1968 (42 U.S.C. 4151 et seq.); Federal Drug Free Workplace Act of 1988 and the
regulations promulgated thereunder including, without limitation, 54 CFR Part 4956, Section 3
of the Housing and Urban Development Act of 1968; Executive Orders 11625, 12432 and 12138,
as amended; the Copeland "Anti- Kickback" Act (18 U.S.C. § 874 et seq.); the Davis -Bacon Act
(40 U.S.C. § 276a et seq.); Sections 103 and 107 of the Work Hours and Safety Standards Act.
(40 U.S.C. § 327 et seq.); the Uniform Relocation Assistance and Real Property Acquisition
Policies Act (42 U.S.C. § 4201 et seq.); the Housing and Community Development Act of 1974;
the National Environmental Policy Act (42 U.S.C. § 4321 et seq.); ( "NEPA "); the Lead -Based
Paint Poisoning Prevention Act (42 U.S.C. § 4321 et seq.); The Uniform Relocation Assistance
and Real Property Acquisition Policies Act of 1970; the State of Texas Senate Bill 1356; Title 8,
and Chapter 92 of the Texas Property Code; Solid Waste Disposal Act TEX. HEALTH &
SAFETY CODE Ann. Ch. 361; Comprehensive Municipal Solid Waste Management, Resource
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00002, OR 1018 526
Recovery, and Conservation Act. TEX. HEALTH & SAFETY CODE Ann. Ch 363; County
Solid Waste Control Act. TEX. HEALTH & SAFETY CODE Ann. Ch 364; Texas Clean Air
Act, TEX. HEALTH AND SAFETY CODE Ann. Ch.; and Hazardous Communication Act,
TEXAS HEALTH AND SAFETY CODE Ann. Ch.. 502; and such Governmental Requirements
as may be from time to time amended or superseded and all of their implementing regulations, as
may be amended.
1.20 Anti- Terrorism Laws. Any and all present and future judicial decisions, statutes,
rulings, rules, regulations, permits, certificates, orders and ordinances of any Governmental
Authority relating to terrorism or money laundering, including, without limiting the generality of
the foregoing, the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001 (Pub. L. No. 107 -56); the Trading the Enemy
Act (50 U.S.C.A. App. 1, et seq.); the International Emergency Economic Powers Act (50 U. S.
C. A. §1701 -06); Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001 (relating to "Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threatened to Commit, or Support Terrorism ") and the United States Treasury Department's
Office of Foreign Assets Control list of "Specifically Designated National and Blocked Persons"
(as published from time to time in various mediums, including, without limitation, at
http:www.treas.gov /ofac /tl 1 sdn.pdf).
1.21 Prohibited Person. Any person or entity that (i) is specifically named or listed in, or
otherwise subject to, any Anti- Terrorism Laws, (ii) is owned or controlled by, or acting for or on
behalf of any person or entity specifically named or listed in, or otherwise subject to, any Anti -
Terrorism Laws, (iii) Beneficiary is prohibited from dealing with, or engaging in any transaction
with, pursuant to an Anti- Terrorism Laws, or (iv) is affiliated with any person or entity described
in clauses (i) - (iii) of this definition.
1.22 Environmental Laws and Regulations. Any federal, state, or local law, statute,
ordinance, or regulation, whether now or hereafter in effect, pertaining to health, industrial
hygiene, or the environmental conditions on, under, or about the Land or the Improvements,
including without limitation, the following, as now or hereafter amended, Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 ( "CERCLA "), 42 U.S.C.A.
§9601 et seq.; Resource, Conservation and Recovery Act ( "RCRA "), 24 U.S.C.A. §6901 et seq.
as amended by the Superfund Amendments and Reauthorization Act of 1986 ( "SARA "), Pub. L.
No. 99 -499, 100 Stat. 1613; the Toxic Substances Control Act, 15 U.S.C.A. §2601 et seq.;
Emergency Planning and Community Right to Know Act of 1986, 42 U.S.C.A. §1101 et seq.;
Clean Water Act ( "CWA "), 33 U.S.C.A. §1251 et seq., Clean Air Act ( "CAA "), 42 U.S.C.A.
§7401 et seq.; Federal Water Pollution Control Act ( "FWPCA "), 33 U.S.C.A. §1251 et seq.; );
Protection of Wetlands (Executive Order 11990, Mary 24, 1977); Coastal Management Act
(Sections 307 (c) and (d)); Safe Water Driving Act (42 U.S.C. 201, 300(1) and 21U.S.C. 349);
Protection of the Environment, Sole Source Aquifers (40 CFR 149); Endangered Species Act (50
CFR 402); Wild and Scenic Rivers Act (16 U.S.C. 1271 et seq. as amended, particularly section
7(b) and (c)); Farmland Protection Policy Act (7 CFR 658); Federal Actions to Address
Environmental Justice in Minority Populations and Low Income Populations (Executive Order
12898, February 11, 1994); Parts of Environmental Review Procedures for Entities Assuming
HUD Environmental Responsibilities: Noise Abatement and Control (24 CFR 51B); Explosive
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00002 OR
Val P's
1018 527
and Flammable Operations (24 CFR 51 C); Toxic Chemicals and Radioactive Materials (24 CFR
58.5(a); Airport Clear zones and Accident Potential Zones (24 CFR51 D); and any corresponding
state laws or ordinances including but not limited to the Texas Water Code ( "TWC ") §26.001 et
seq.; Texas Health & Safety Code ( "THSC ") §361.001 et seq.; Texas Solid Waste Disposal Act,
Tex. Rev. Civ. Stat. Ann. Art. 4477 -7; and regulations, rules, guidelines, or standards
promulgated pursuant to such laws, statute and regulations, as such statutes, regulations, rules,
guidelines, and standards are amended from time to time.
The environmental effects of each activity carried out with funds provided under the
NSP program must be assessed in accordance with the provisions of the Texas NSP NOFA,
National Environmental Policy Act of 1969 (NEPA) and the related activities listed in HUD's
implementing regulations at 24 CFR Parts 50, 51, 55 and 58. Each such activity must have an
environmental review completed and support documentation prepared complying with the
National Environmental Policy Act of 1969 and regulations at 24 CFR Parts 50, 51, 55 and Part
58. No funds may be requested or committed to an activity before the completion of the
environmental review process, including the requirements of 24 CFR §58.6, and written
clearance has been provided by the Department.
1.23 Permitted Exceptions. The exceptions from coverage found in Schedule B of the
commitment for mortgagee policy of title insurance issued by Stewart Title Guaranty Company,
as agent for Walker County Title Company, a Texas corporation, GF #201103240, issued
January 27, 2012 to Beneficiary herein.
ARTICLE II
Conveyance in Trust
2.01 Grant. Grantor, for and in consideration of the debt evidenced by the Note, has granted,
assigned, and conveyed, and by these presents does grant, assign and convey the Mortgaged
Property, in trust unto the Trustee, his successors and assigns, to have and to hold the Mortgaged
Property, unto Trustee, his successors and assigns, forever. To the extent permitted by law, the
Personal Property shall be deemed to be a part of and affixed to the Real Property. In the event
the estate of the Grantor in and to any of the Mortgaged Property is a leasehold estate, this
conveyance shall include and the lien and security interest and assignment created hereby shall
encumber and extend to all other, further or additional title, estates, interest or rights which may
exist now or at any time be acquired by Grantor in or to the property demised under the lease
creating such leasehold estate and including Grantor's rights, if any, to purchase the property
demised under such lease and, if fee simple title to any of such property shall ever become vested
in Grantor, such fee simple interest shall be encumbered by this Deed of Trust in the same
manner as if Grantor had fee simple title to such property as of the date of execution hereof.
Grantor hereby binds itself, its successors and assigns, to warrant and forever defend the
Mortgaged Property unto Trustee, his successors and assigns, against every person whomsoever
lawfully claiming or to claim the same or any part thereof.
2.02 Security. This conveyance is made in trust, however, to secure and enforce the payment
of the Note, the obligations of Grantor (and/or the maker of the Note, if different from Grantor)
under the other Loan Documents and payment of the Other Indebtedness as defined herein. If
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000025. OR
%J o 1
1018
Grantor shall perform the covenants and agreements herein contained, then, and only then, this
conveyance shall become null and void and shall be released at Grantor's expense; otherwise it
shall remain in full force and effect. No release of this conveyance, or of the lien or security
interest or assignment created and evidenced hereby, shall be valid unless executed by
Beneficiary.
2.03 Other Indebtedness. This Deed of Trust shall secure, in addition to the Note, all funds
hereafter advanced by Beneficiary to or for the benefit of Grantor as contemplated by any
provision herein or for any other purpose, and all Other Indebtedness, of whatever kind or
character, owing or which may hereafter become owing by Grantor to Beneficiary, whether such
indebtedness is evidenced by note, open account, overdraft, endorsement, surety agreement,
guaranty, or otherwise, it being contemplated that Grantor may hereafter become indebted to
Beneficiary in further sum or sums ( "Other Indebtedness "); provided, however, in no event shall
this Deed of Trust secure payment of any installment loan or any open -end line of credit
established under Chapter 3, Chapter 4 or Chapter 15 of the Texas Finance Code. This Deed of
Trust shall also secure all renewals and extensions of any of the Other Indebtedness secured
hereby. If the Note or Other Indebtedness shall be collected by legal proceedings, whether
through a probate or bankruptcy court or otherwise, or shall be placed in the hands of an attorney
for collection after maturity, whether matured by the expiration of time or by any option given to
the Beneficiary to mature same, Grantor agrees to pay Beneficiary's attorney's and collection fees
in the amount set forth in the Note, and such fees shall be a part of the indebtedness secured
hereby.
ARTICLE III
Grantor's Covenants and Representations
Grantor hereby covenants, warrants and represents to and agrees with Beneficiary and
with Trustee as follows:
3.01 Payment and Performance. Grantor (i) will pay all of the indebtedness secured hereby,
together with the interest thereon, when the same shall become due, in accordance with the terms
of the Note or any other instrument evidencing, securing, or pertaining to such indebtedness or
evidencing any renewal or extension of such indebtedness, or any part thereof, and (ii) will
punctually and properly perform all of Grantor's covenants, obligations, and liabilities under any
other security agreement, mortgage, deed of trust, collateral pledge agreement, contract,
assignment, loan agreement or any other instrument or agreement of any kind now or hereafter
existing as security for, executed in connection with, or related to the indebtedness or other
obligations secured hereby, or any part thereof.
3.02 Title and Right to Convey. Grantor (i) has in its own right good and indefeasible title in
fee simple, except as otherwise provided herein, to the Mortgaged Property which is free from
encumbrance superior to the indebtedness hereby secured, except as otherwise provided herein,
and (ii) has full right to make this conveyance.
3.03 Insurance. Grantor shall require the builder and/or its general contractor to obtain and
maintain at said builder's and/or general contractor's sole expense: (1) all -risk insurance with
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528
respect to all insurable Mortgaged Property, against loss or damage by fire, lightning, windstorm,
explosion, hail, tornado and such hazards as are presently included in so- called "all- risk"
coverage and against such other insurable hazards as Beneficiary may reasonably require, in an
amount not less than the unpaid balance of the Note, or if available and requested by Beneficiary
100% of the full replacement cost, including the cost of debris removal, without deduction for
depreciation and sufficient to prevent Grantor and Beneficiary from becoming a coinsurer, such
insurance to be in Builder's Risk (non- reporting) form during and with respect to any
construction on the Real Property; (2) if and to the extent any portion of the Project is in a
special flood hazard area, a flood insurance policy in an amount equal to the lesser of the
principal face amount of the Note or the maximum amount available; (3) commercial general
liability insurance, on an "occurrence" basis, against claims for bodily injury, death or property
damage occurring on or about the Project, to afford protection in a "single limit" of not less than
$1,000,000 in the event of bodily injury to, or death of, any number of persons or of damage to
property arising out of one occurrence, for the benefit of Grantor and Beneficiary as named
insured; and (4) such other insurance on the Mortgaged Property as may from time to time be
reasonably required by Beneficiary, if available, (including but not limited to rent loss or boiler
and machinery insurance) and against other insurable hazards or casualties which at the time are
commonly insured against in the case of premises similarly situated, due regard being given to
the height, type, construction, location, use and occupancy of buildings and improvements. All
insurance policies shall be issued and maintained by insurers, in amounts, with deductibles, and
in form reasonably satisfactory to Beneficiary, and shall require not less than fifteen (15) days'
prior written notice to Beneficiary of any cancellation or change of coverage. All insurance
policies maintained, or caused to be maintained, by Grantor with respect to the Mortgaged
Property, except for public liability insurance, shall provide that each such policy shall be
primary without right of contribution from any other insurance that may be carried by Grantor or
Beneficiary and that all of the provisions thereof, except the limits of liability, shall operate in
the same manner as if there were a separate policy covering each insured. If any insurer which
has issued a policy of hazard, liability or other insurance required pursuant to this Deed of Trust
becomes insolvent or the subject of any bankruptcy, receivership or similar proceeding or if in
Beneficiary's reasonable opinion the financial responsibility of such insurer is or becomes
inadequate, Grantor shall, in each instance promptly upon the request of Beneficiary and at
Grantor's expense, obtain and deliver to Beneficiary a like policy (or, if and to the extent
permitted by Beneficiary, a certificate of insurance) issued by another insurer, which insurer and
policy meet the requirements of this Deed of Trust. All such policies for loss of or damage to the
Mortgaged Property shall contain a standard mortgage clause (without contribution) naming
Beneficiary as mortgagee with loss proceeds payable to Beneficiary notwithstanding (i) any act,
failure to act or negligence of or violation of any warranty, declaration or condition contained in
any such policy by any named insured; (ii) the occupation or use of the Mortgaged Property for
purposes more hazardous than permitted by the terms of any such policy; (iii) any foreclosure or
other action by Beneficiary under this Deed of Trust; or (iv) any change in title to or ownership
of the Mortgaged Property or any portion thereof, such proceeds to be held for application as
provided in this Deed of Trust. A copy of each initial insurance policy (or a satisfactory
certificate of insurance) shall be delivered to Beneficiary at the time of execution of this Deed of
Trust, with premiums fully paid, and each renewal or substitute policy (or certificate) shall be
delivered to Beneficiary, with premiums fully paid, at least ten (10) days before the termination
of the policy it renews or replaces. Grantor shall pay all premiums on policies required
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00002113 OR
1
hereunder as they become due and payable and promptly deliver to Beneficiary evidence
satisfactory to Beneficiary of the timely payment thereof. If any loss occurs at any time when
Grantor has failed to perform Grantor's covenants and agreements in this section, Beneficiary
shall nevertheless be entitled to the benefit of all insurance covering the loss and held by or for
Grantor, to the same extent as if it had been made payable to Beneficiary. Upon any foreclosure
hereof or transfer of title to the Mortgaged Property in extinguishment of the whole or any part
of the secured indebtedness, all of Grantor's right, title and interest in and to the insurance
policies referred to in this section (including unearned premiums) and all proceeds payable
thereunder shall thereupon vest in the purchaser at foreclosure or other such transferee, to the
extent permissible under such policies. Beneficiary shall have the right (but not the obligation)
to receive the proceeds of, all insurance for loss of or damage to the Mortgaged Property. If
Grantor fails to act reasonably and promptly in making proof of loss for, or settling or adjusting
any claim under, any such insurance, then Beneficiary shall have the right to make such proof
and settle and/or adjust, such claim; and the expenses incurred by Beneficiary in the adjustment
and collection of insurance proceeds shall be a part of the secured indebtedness and shall be due
and payable to Beneficiary on demand. Beneficiary shall not be, under any circumstances, liable
or responsible for failure to collect or exercise diligence in the collection of any of such proceeds
or for the obtaining, maintaining or adequacy of any insurance or for failure to see, to the proper
application of any amount paid over to Grantor. Any such proceeds received by Beneficiary
shall, after deduction therefrom of all reasonable expenses actually incurred by Beneficiary,
including attorneys' fees, at Beneficiary's option be (a) released to Grantor, or (b) applied (upon
compliance with such reasonable terms and conditions as may be required by Beneficiary) to
repair or restoration, either partly or entirely, of the Mortgaged Property so damaged, or (c)
applied to the payment of the secured indebtedness in such order and manner as Beneficiary, in
its sole discretion, may elect, whether or not due; provided, however, that Beneficiary shall make
such proceeds available to Grantor to pay for restoration or repair of the Mortgaged Property, so
damaged, if either (i) the amount of such proceeds is less than 5% of the construction costs, or
(ii) Grantor agrees to reasonable, Construction Loan provisions (primarily regarding advances of
those proceeds and Beneficiary's "pricing" of its activities and expenses connected therewith)
and amendments to the Loan Documents executed in connection with the Note, as then proposed
by Beneficiary. In any event, the unpaid portion of the secured indebtedness shall remain in full
force and effect and the payment thereof shall not be excused. Grantor shall at all times comply
with the requirements of the insurance policies required hereunder and of the issuers of such
policies and of any board of fire underwriters or similar body as applicable to or affecting the
Mortgaged Property.
3.04 Taxes and Other Impositions. Grantor will pay all taxes and assessments against or
affecting the Mortgaged Property as the same become due and payable, and, if Grantor fails to do
so, Beneficiary may pay them, together with all costs and penalties thereon, at Grantor's expense
or out of an individual reserve account created to fund any necessary repairs for Mortgaged
Property maintained by a first lien lender or bank trustee. Grantor, however, may in good faith,
in lieu of paying such taxes and assessments as they become due and payable, contest by
appropriate proceedings the validity thereof, and pending such contest Grantor shall not be
deemed in default hereunder because of such nonpayment, (i) if prior to delinquency of the
asserted tax or assessment, Grantor furnishes Beneficiary an indemnity bond, conditioned that
such tax or assessment with interest, cost and penalties be paid as herein stipulated, secured by a
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000023 OR 1018 531
deposit in cash, or security or surety acceptable to Beneficiary, in the amount of the contested tax
or assessment, and a reasonable additional sum to pay all possible costs, interest and penalties
imposed or incurred in connection therewith, and (ii) if Grantor promptly pays any amount
adjudged by a court of competent jurisdiction to be due, with all costs, penalties and interest
thereon, before such judgment becomes final or before any writ or order is issued under which
the Mortgaged Property may be sold pursuant to such judgment, whichever first occurs.
Grantor shall provide to Beneficiary, on or before January 31 of each year during the term of the
Note secured hereby, written evidence that all ad valorem taxes and other assessments against
the Mortgaged Property have been paid in full.
3.05 Tax and Insurance Escrow. Intentionally omitted.
3.06 Assignment of Awards. If the lien secured by this Deed of Trust is first and superior,
Grantor will hereby assign all judgments, decrees and awards for injury or damage to the
Mortgaged Property, all awards or settlements pursuant to proceedings for condemnation thereof,
in their entirety to Beneficiary, who may apply the same to the indebtedness secured hereby in
such manner as it may elect. Grantor will further hereby authorize Beneficiary to execute and
deliver valid acquittances for, and to appeal from, any such award, judgment or decree in the
name of Grantor. In the event Beneficiary, as a result of any such judgment or decree of award,
believes that the payment or performance of any obligation secured by this Deed of Trust is
impaired, Grantor authorizes Beneficiary to declare, without notice, all of the indebtedness
secured hereby immediately due and payable.
3.07 Trustee's Title and Future Laws. If, while this trust is in force, the title of Trustee to,
or the interest of Beneficiary in, the Mortgaged Property or any part thereof, shall be endangered
or shall be attacked directly or indirectly, Grantor authorizes Beneficiary, at Grantor's expense, to
take all necessary and proper steps for the defense of such title or interest, including the
employment of counsel, the prosecution or defense of litigation, and the compromise or
discharge of claims made against such title or interest. If at any time any law shall be enacted
imposing or authorizing the imposition of any tax upon this Deed of Trust, or upon any rights,
titles, liens, or security interests created hereby, or upon the Note, or any part thereof, Grantor
shall immediately pay all such taxes. In the alternative, Grantor may, in the event of the
enactment of such a law, and must, if it is unlawful for Grantor to pay such taxes, prepay the
Note and the Other Indebtedness in full within sixty (60) days after demand therefore by
Beneficiary. Grantor shall at any time and from time to time, furnish promptly, upon request, a
written statement or affidavit, in such form as may be required by Beneficiary, stating the unpaid
balance of the Note, and that there are no offsets or defenses against full payment of the Note
and performance of the terms hereof, or if there are any such offsets and defenses, specifying
them.
3.08 Repayment to Beneficiary. If, pursuant to any covenant contained herein or in any
other instrument executed in connection with the loan evidenced by the Note or in connection
with any Other Indebtedness secured hereby, Beneficiary shall expend any money chargeable to
Grantor or subject to reimbursement by Grantor under the terms of such covenant or agreement,
Grantor will repay the same to Beneficiary immediately at the place where the Note or Other
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00002. OR 1018 532
Indebtedness secured hereby is payable, together with interest thereon at the rate of interest
payable on account of the Note or such Other Indebtedness in the event of a default hereunder
from and after the date of Beneficiary's making such payment. The sum of each such payment
shall be added to the indebtedness hereby secured and thereafter shall form a part of the same,
and it shall be secured by this Deed of Trust and, by subrogation to all of the rights of the person
or entity receiving such payment.
3.09 Condition of Property. Upon completion of certain renovations, additions and
improvements to the Project, Grantor will keep every part of the Mortgaged Property in good
condition and presenting a good appearance, making promptly all repairs, renewals and
replacements necessary to such end, and doing promptly all else necessary to such end. Grantor
will discharge all claims for labor performed and material furnished therefore, and will not suffer
any lien of mechanics or materialman to attach to any part of the Mortgaged Property. Grantor
will guard every part of the Mortgaged Property from removal, destruction and damage, and will
not do or suffer to be done any act whereby the value of any part of the Mortgaged Property may
be lessened.
3.10 Successors. If the ownership, control or management of the Mortgaged Property or any
part thereof becomes vested in a person other than Grantor, or in the event of a change of
ownership of more than thirty percent (30 %) interest in any Grantor other than an individual,
Grantor agrees that Beneficiary may, without notice to Grantor, deal with such successor or
successors in interest with reference to this Deed of Trust and to the indebtedness hereby secured
in the same manner as with Grantor without in any way vitiating or discharging Grantor's
liability hereunder or upon the indebtedness hereby secured. No sale of the Mortgaged Property,
and no forbearance on the part of Beneficiary, and no extension of the time for the payment of
the indebtedness hereby secured, given by Beneficiary, shall operate to release, discharge,
modify, change or affect the original liability of Grantor or the liability of any guarantors or
sureties of Grantor, either in whole or in part.
3.11 Compliance with Governmental Requirements. Grantor covenants that the Mortgaged
Property and the improvements now or hereafter erected thereupon and the intended use thereof
by Grantor comply with all Governmental Requirements, including, without limitation, all
applicable restrictive covenants, zoning ordinances, subdivision and building codes, flood
disaster laws, applicable health and Environmental Laws and Regulations and all other
ordinances, orders or requirements issued by any state, federal or municipal authorities having or
claiming jurisdiction over the Mortgaged Property.
Any rehabilitation of an abandoned or foreclosed upon home or residential property under NSP
shall be to the extent necessary to comply with applicable, laws, codes, and other requirements
related to housing safety, quality, and habitability, in order to sell, rent, or redevelop such homes
and properties. Rehabilitation may include improvements to increase the energy efficiency or
conservation of such homes and properties or provide a renewable energy source or sources for
such homes and properties. Housing and Economic Recovery Act Section 2301 (d)(2) of 2008.
The eligibility of renewable energy equipment on existing structures shall be determined by the
Beneficiary.
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00002. OR 1015 533
Housing that is constructed, including new construction, or rehabilitation with NSP funds must
meet all applicable local codes, rehabilitation standards, ordinances, and zoning ordinances at the
time of completion. In the absence of a local code for new construction or rehabilitation, the
housing must meet the most current International Building Code. In addition, all NSP funded
housing must meet the Texas Minimum Construction Standards, as published in the Texas NSP
NOFA. NSP assisted new construction or rehabilitation will comply with HUD Program lead -
based paint requirements including lead screening in housing built before 1978 in accordance
with 24 CFR Part 92.355 and 24 CFR Part 35, subparts A, B, J, K, M, and R. Multifamily
housing assisted with NSP funds must meet the accessibility requirements at 24 CFR part 8,
which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. Section 794) and
covered multifamily dwellings, as defined at 24 CFR 100.201, and the design and construction
requirements at 24 CFR 100.205, which implement the Fair Housing Act (42 U.S.C. 3601 - 3619).
Finally, NSP assisted housing must meet Energy Efficiency Standards in accordance with
Section 2306.187 of the Texas Government Code.
3.12 Money Laundering; Anti - Terrorism Laws.
(a) Grantor will furnish all of the funds for the purchase of the Mortgaged Property,
other than funds supplied by Beneficiary, and such funds will not be from sources that are
described in 18 U.S.C.A. §1956 and §1957 as funds or property derived from "specified
unlawful activity."
(b) None of Grantor, and constituent party nor Guarantor, if applicable, (nor any person
or entity owning an interest in Grantor, and constituent party or Guarantor, if applicable) (i) is a
Prohibited Person, or (ii) has violated any Anti- Terrorism Laws. No Prohibited Person holds or
owns any interest of any nature whatsoever in Grantor, any constituent party or Guarantor, if
applicable, as applicable, and none of the funds of Grantor, any constituent party or Guarantor, if
applicable, have been derived from any activity in violation of Anti- Terrorism Laws.
3.13 No Foreign Person. Neither Maker, nor Guarantor, if applicable, is a "foreign person"
within the meaning of §1445(0(3) of the Tax Code.
3.14 Payment of Labor and Materials. Grantor will promptly pay all bills for labor,
materials, and specifically fabricated materials incurred in connection with the Mortgaged
Property and never permit to exist in respect of the Mortgaged Property or any party thereof any
lien or security interest, even though inferior to the liens and security interest, hereof, for any
such bill, and in any event never permit to be created or exist in respect of the Mortgaged
Property or any part thereof any other or additional lien or security interest on a parity with,
superior, or inferior to any of the liens or security interest hereof, except for the Permitted
Exceptions.
3.15 Sources and Uses of Funds. Without limiting the requirements of Section 3.12 hereof,
Grantor has taken, and shall continue to take until the Indebtedness is fully repaid and each and
all of the Obligations are satisfied in full, such measures as are required by any and all Anti -
Terrorism Laws to assure that the funds invested in Grantor and/or used to make payments on the
Indebtedness or the Obligations are derived from (a) transactions and sources that do not violate
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00002.3 OR 1018 534
any Anti- Terrorism Laws, nor to the extent such funds originate outside the United States, do not
violate the laws of the jurisdiction from which they originated; and (b) permissible sources
under Anti- Terrorism Laws or, to the extent such funds originate outside the United States, under
the laws of the jurisdiction from which they originated. If Beneficiary reasonably believes that
Grantor, Guarantor, if applicable, any constituent party, or any affiliate of any such parties may
have breached any of the representations, warranties or covenants set forth in this Deed of Trust
or the other Loan Documents relating to any Anti - Terrorism Laws, any violations of the Byrd
Amendment referenced herein and Section 3.16 hereof, or the identity of any person or entity as
a Prohibited Person, or person influencing or attempting to influence the federal persons
referenced herein and Section 3.16 hereof, then, Beneficiary shall have the right, with or without
notice to Grantor, to (1) notify the appropriate governmental authority and to take such action as
such governmental authority or applicable Anti- Terrorism Laws or Byrd Amendment may direct;
(2) withhold Loan advances and segregate the assets constituting the Loan or any of Grantor's
funds or assets deposited with or otherwise controlled by Beneficiary pursuant to the Loan
Documents; (3) decline any payment (or deposit such payment with an appropriate United States
governmental authority or court) or decline any prepayment or consent request; and/or (4)
declare an Event of Default and immediately accelerate the Loan in connection therewith,
Grantor agrees that none of Grantor, Guarantor, if applicable, nor any constituent party will
assert any claim (and hereby waives, for itself and on behalf of its affiliates, successors, assigns,
representatives or agents for any form of damages as a result of any of the foregoing actions,
regardless of whether or not Beneficiary 's reasonable belief is ultimately demonstrated to be
accurate. Without limiting the requirements of Section 3.11 hereof, Grantor has taken, and shall
continue to take until the Indebtedness is fully repaid and each and all of the Obligations are
satisfied in full, such measures as are required by the Byrd amendment to the fiscal 1990
appropriations measures for the United States Department of the Interior (P. L. 101 -121) and any
guidelines and rules issued by any federal entity in connection therewith, if applicable, to assure
that no federal appropriated funds have been paid or will be paid, by or on behalf of Grantor, (i)
to any person influencing or attempting to influence, or (ii) for influencing or attempting to
influence an officer or employee of any agency, a Member of Congress, an officer or employee
of Congress, or an employee of a Member of Congress in connection with this award and loan
under the NSP.
3.16 Byrd Amendment: Prohibition for Influencing Federal Entities. Grantor covenants
that, to the best of Grantor's knowledge, Grantor has complied with all restrictions, certifications
and disclosure requirements contained in the Byrd amendment to the fisca1,1990 appropriations
measures for the United States Department of the Interior (P.L. 101 -121) and with any guidelines
and rules issued by any federal entity in connection therewith, if applicable.
ARTICLE IV
Events of Default
4.01 Events of Default. The following shall be events of default ( "Events of Default ")
hereunder:
(a) The sale of the Mortgaged Property, or any part thereof without, the prior written
consent of Beneficiary, except the sale to an Eligible Household.
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(b) Grantor's agreement to or the granting of an easement, restrictive covenant or other
encumbrance affecting the Mortgaged Property without the prior written consent of Beneficiary.
(c) If Grantor is a corporation, partnership, or limited liability company, more than thirty
percent (30 %) of ownership of Grantor (determined by interest held and not by number of the
shareholders, partners or members, as applicable) changes other than changes resulting from the
transfer of shares or interest among the present owners of Grantor, such determination to be
made by aggregating all ownership changes (other than those involving only the present owners
of Grantor) occurring subsequent to the date hereof.
(d) Grantor's failure to promptly pay when due the indebtedness secured hereby, or any
part thereof and such failure continues for a period of thirty (30) days after written notice of such
failure is given by Beneficiary to Grantor; or Grantor's failure to keep and perform any of the
covenants (other than the failure to pay the indebtedness) or agreements contained herein or in
any of the other Loan Documents within thirty (30) days after written notice of such failure is
given by Beneficiary to Grantor.
(e) Beneficiary's discovery that any statement, representation or warranty in the Note,
this Deed of Trust or the other Loan Documents, or in any other writing delivered to Beneficiary
in connection with the indebtedness secured hereby is false, misleading or erroneous in any
material respect.
(f) If Grantor, or any person liable for the indebtedness secured hereby, or any part
thereof, including any guarantor of or surety for the performance of any obligation hereunder, (i)
files a voluntary petition in bankruptcy; (ii) makes an assignment for the benefit of any creditor;
(iii) suffers an order for relief in bankruptcy to be entered against it; (iv) admits in writing its
inability to pay its debts generally as they become due; (v) applies for or consents to the
appointment of a receiver, trustee, or liquidator of Grantor or of any such guarantor or surety or
of all or a substantial part of its assets; (vi) takes advantage of or seeks any relief under any
bankruptcy, reorganization, debtor's relief or other insolvency law now or hereafter existing; (vii)
files an answer admitting the material allegations of, or consenting to, or defaulting in, a petition
against Grantor or any such guarantor or surety, in any bankruptcy, reorganization, or other
insolvency proceedings; or (viii) institutes or voluntarily is or becomes a party to any other
judicial proceedings intended to effect a discharge of the debts of Grantor or of any guarantor or
surety, in whole or in part, or to effect a postponement of the maturity or the collection thereof,
or to effect a suspension of any of the rights or powers of Beneficiary granted in the Note, this
Deed of Trust or in any other instrument evidencing or securing the indebtedness secured hereby.
(g) If an order, judgment or decree shall be entered by any court of competent
jurisdiction appointing a receiver, trustee or liquidator of Grantor or of any guarantor or surety or
of all or any substantial part of the assets of Grantor or of any such guarantor or surety; or if
Grantor or any guarantor or surety shall fail to pay any money judgment against it within thirty
(30) days after any such judgment becomes final and non - appealable.
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(h) If Grantor or any such guarantor or surety shall fail to have discharged any
attachments, sequestration, or similar proceedings against any assets of Grantor or of any
guarantor or surety which remains undischarged and unstayed for a period of thirty (30)
consecutive days; or if the Mortgaged Property is placed under control or in the custody of any
court, or if Grantor abandons any of the Mortgaged Property.
(i) Grantor's execution or delivery of any pledge, security agreement, mortgage or deed
of trust covering all or any portion of the Mortgaged Property ( "Subordinate Mortgage ") without
the prior written consent of Beneficiary (which consent may be withheld). In the event of consent
by Beneficiary to the foregoing or in the event the foregoing prohibition is determined by a court
of competent jurisdiction to be unenforceable by the provisions of any applicable law, Grantor
will not execute or deliver any Subordinate Mortgage unless there shall have been delivered to
Beneficiary not less than ten (10) days prior to the date thereof a copy thereof which shall
contain express covenants to the effect:
(i) That the Subordinate Mortgage is in all respects unconditionally subject and
subordinate to the lien, security interest and assignment evidenced by this Deed of Trust and
each term and provision hereof;
(ii) That if any action or proceeding shall be instituted to foreclose the
Subordinate Mortgage (regardless of whether the same is a judicial proceeding or pursuant to a
power of sale contained therein), no tenant of any portion of the Mortgaged Property will be
named as a party defendant, nor will any action be taken with respect to the Mortgaged Property
which would terminate any occupancy or tenancy of the Mortgaged Property without the prior
written consent of Beneficiary;
(iii) That all of the rents, royalties (including, but not limited to, royalties arising
out of the sale of oil, gas, and any other minerals produced from the Mortgaged Property, or any
properties pooled with the Mortgaged Property), issues, profits, revenue, income and other
benefits derived from the Mortgaged Property or arising from the use or enjoyment of any
portion thereof or from any lease or agreement pertaining thereto, if collected through a receiver
or by the holder of the Subordinate Mortgage, shall be applied first to the obligations secured by
this Deed of Trust, including principal and interest due and owing on or to become due and
owing on the Note and the Other Indebtedness secured hereby and then to the payment of
maintenance, operating charges, taxes, assessments, and disbursements incurred in connection
with the ownership, operating and maintenance of the Mortgaged Property; and
(iv) That if any action or proceeding shall be brought to foreclose the Subordinate
Mortgage, written notice of the commencement thereof will be given to Beneficiary
contemporaneously with the commencement of such action or proceeding.
(j) The liquidation, termination, dissolution, merger, consolidation or failure to maintain
good standing in the State of Texas (or in the case of an individual, the death or legal incapacity)
of the owner of the Mortgaged Property or any person obligated to pay any part of the secured
indebtedness.
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(k) The liens, mortgages or security interests of Beneficiary in any of the Mortgaged
Property become unenforceable in whole or in part, or cease to be of the priority herein required,
or the validity or enforceability thereof, in whole or in part, shall be challenged or denied by
Grantor or any person obligated to pay any part of the secured indebtedness.
(1) If the ownership of any of the Mortgaged Property is forfeited or otherwise
transferred to any governmental agency under a federal or state law for which forfeiture of
property is a potential penalty or remedy.
(m) A default or event of default occurs under any other documents executed as security
for or in connection with the Note or under any other documents evidencing a loan or
indebtedness owed by Grantor to Beneficiary or any other agency of the State of Texas, and the
same is not remedied within the applicable period for curing such default (if any).
(n) Any portion of the surface of the Mortgaged Property is disturbed or otherwise
used by any person in connection with the exploration for or production of any oil, gas or other
minerals without the prior written consent of Beneficiary.
(o) If Grantor, without Beneficiary' s consent, (i) seeks or acquiesces in a zoning
reclassification, zoning variance or special exception to zoning of all or any portion of the
Mortgaged Property, (ii) grants or consents to any easement, dedication, plat, or restriction (or
allows any easement to become enforceable by prescription), (iii) seeks or acquiesces to any
imposition of any addition of Governmental Requirements or any amendment or modification
thereof, covering all or any portion of the Mortgaged Property.
4.02 Remedies. Upon the occurrence of any Event of Default, Beneficiary, at its sole
option, may declare the Note and all Other Indebtedness secured hereby immediately due and
payable and /or may pursue any rights and remedies it may have hereunder or at law or in equity.
ARTICLE V
Noniudicial Foreclosure and Sale
5.01 Trustee's Sale. Upon an Event of Default, Grantor authorizes and empowers the
Trustee, at the request of Beneficiary, at any time during the continuance of any default, to sell
all or any portion of the Mortgaged Property, at public auction, to the highest bidder, for cash or
for credit against the indebtedness secured hereby if Beneficiary is the highest bidder, at the
county court house of the county in Texas in which such Mortgaged Property or any part thereof
is situated, as herein described, in the area designated by the commissioners court for such
purpose pursuant to a recordation of such designation in the real property records of such county,
or if no such recorded designation by the commissioners court has been made, in the area at the
county court house designated in the notice of proposed sale posted, filed and served in
accordance with the further provisions of this paragraph, between the hours of 10:00 o'clock
A.M. and 4:00 o'clock P.M. on the first Tuesday of any month. The Trustee shall give notice of
the time, place and terms of said sale, and of the property to be sold, as follows:
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Notice of such proposed sale shall be given by posting written notice thereof at least
twenty -one (21) days preceding the date of the sale at the court house door, and by filing a copy
of the Notice in the office of the county clerk of the county in which the sale is to be made, and if
the property to be sold is situated in more than one county, one notice shall be posted at the court
house door and filed with the county clerk of each county in which the property to be sold is
situated. In addition, Beneficiary shall, at least twenty -one (21) days preceding the date of sale,
serve written notice of the proposed sale by certified mail on each debtor obligated to pay the
debt secured hereby according to the records of beneficiary. Service of such notice shall be
completed upon deposit of the notice, enclosed in a postpaid wrapper, properly addressed to such
debtor at the most recent address as shown by the records of Beneficiary, in a post office or
official depository under the care and custody of the United States Postal Service. The affidavit
of any person having knowledge of the facts to the effect that such service was completed shall
be prima facie evidence of the fact of service.
Any notice that is required or permitted to be given to Grantor may be addressed to
Grantor at Grantor's mailing address. Any notice that is to be given by certified mail to any other
debtor may, if no address for such other debtor is shown by the records of Beneficiary, be
addressed to such other debtor at Grantor's mailing address. Notwithstanding the foregoing
provisions of this paragraph, notice of such sale given in accordance with the requirements of the
applicable law of the State of Texas in effect at the time of such sale shall constitute sufficient
notice of such sale. Grantor hereby authorizes and empowers the Trustee to sell all or any
portion of the Mortgaged Property, together or in lots or parcels, as the Trustee may deem
expedient, and to execute and deliver to the purchaser or purchasers of such property, good and
sufficient deeds of conveyance of fee simple title with covenants of general warranty made on
behalf of the Grantor. In no event shall the Trustee be required to exhibit, present or display at
any such sale, any of the personalty described herein to be sold at such sale. The Trustee making
such sale shall receive the proceeds thereof and shall apply the same as follows: (i) first, he shall
pay the reasonable expense of executing this trust including a reasonable Trustee's fee or
commission; (ii) second, he shall pay, so far as may be possible, the indebtedness secured
hereby, discharging first that portion of the indebtedness arising under the covenants or
agreements herein contained and not evidenced by the Note; (iii) third, he shall pay the residue,
if any, to the person or persons legally entitled thereto. Payment of the purchase price to the
Trustee shall satisfy the obligation of the purchaser at such sale therefore, and such purchaser
shall not be bound to look after the application thereof. The sale or sales by the Trustee of less
than the whole of the Mortgaged Property shall not exhaust the power of sale herein granted, and
the Trustee is specifically empowered to make successive sale or sales under such power until
the whole of the Mortgaged Property shall be sold; and if the proceeds of such sale or sales of
less than the whole of such Mortgaged Property shall be less than the aggregate of the
indebtedness secured hereby and the expense of executing this trust, this Deed of Trust and the
lien, security interest and assignment hereof shall remain in full force and effect as to the unsold
portion of the Mortgaged Property just as though no sale or sales had been made; provided,
however, that Grantor shall never have any right to require the sale or sales of less than the
whole of the Mortgaged Property, but Beneficiary shall have the right, at its sole election, to
request the Trustee to sell less than the whole of the Mortgaged Property. If default is made
hereunder, the holder of the indebtedness or any part thereof on which the payment is delinquent
shall have the option to proceed with foreclosure in satisfaction of such item either through
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judicial proceedings or by directing the Trustee to proceed as if under a full foreclosure,
conducting the sale as herein provided without declaring the entire indebtedness secured hereby
due, and if sale is made because of default of an installment, or a part of an installment, such sale
may be made subject to the unmatured part of the Note and Other Indebtedness secured by this
Deed of Trust; and it is agreed that such sale, if so made, shall not in any manner affect the
unmatured part of the indebtedness secured by this Deed of Trust, but as to such unmatured part,
this Deed of Trust shall remain in full force and effect as though no sale had been made under
the provisions of this paragraph. Several sales may be made hereunder without exhausting the
right of sale for any unmatured part of the indebtedness secured hereby.
5.02 Successor Trustee. If the Trustee shall die or become disqualified from acting in the
execution of this trust, or shall fail or refuse to execute the same when requested by Beneficiary
to do so; or if, for any reason, Beneficiary shall prefer to appoint a substitute Trustee to act
instead of the Trustee named herein, Beneficiary shall have full power to appoint, by written
instrument, a substitute Trustee, and, if necessary, several substitute Trustees in succession, who
shall succeed to all the estate, rights, powers, and duties of the original Trustee named herein.
Such appointment may be executed by any authorized agent of Beneficiary; and if Beneficiary is
a corporation and such appointment is executed in its behalf by any officer of such corporation,
such appointment shall be conclusively presumed to be executed with authority and shall be
valid and sufficient without proof of any action by the board of directors or any superior officer
of the corporation. In the event of an assignment of the interests of Beneficiary under this Deed
of Trust, all rights and remedies granted to Beneficiary in this Deed of Trust shall inure to the
benefit of, and may be exercised by, the assignee.
5.03 Acts and Statements of Trustee. Grantor hereby agrees, in its behalf and in behalf of its
heirs, executors, administrators, successors, personal representatives and assigns, that any and all
statements of fact or other recitals made in any deed of conveyance given by the Trustee, with
respect to the identity of Beneficiary, or with respect to the occurrence or existence of any
default, or with respect to the acceleration of the maturity of any indebtedness secured hereby, or
with respect to the request to sell, the notice of sale, the giving of notice to all debtors legally
entitled thereto, the time, place, terms, and manner of sale, and receipt, distribution, and
application of the money realized therefrom, or with respect to the due and proper appointment
of a substitute Trustee, and, without being limited by the foregoing, with respect to any other act
or thing having been duly done by the Beneficiary or by the Trustee hereunder, shall be taken by
all courts of law and equity as prima facie evidence that the statements or recitals state facts and
are without further question to be so accepted, and Grantor hereby ratifies and confirms every act
that Trustee or any substitute Trustee hereunder may lawfully do in the premises by virtue
hereof.
5.04 Disaffirmance by Purchaser. The purchaser at any trustee's or foreclosure sale
hereunder may disaffirm any easement granted, or rental, lease or other contract made, in
violation of any provision of this Deed of Trust, and may take immediate possession of the
Mortgaged Property free from, and despite the terms of, such grant of easement and rental or
lease contract, subject to the Protecting Tenants at Foreclosure Act of 2009, Title VII of the
Helping Families Save Their Homes Act of 2009 (Public Law 111 -22, §702) and other
governmental requirements.
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5.05 Beneficiary May Bid. Beneficiary shall have the right to become the purchaser at all
sales to enforce this trust, being the highest bidder, and to have the amount of which such
property is sold credited on the indebtedness secured hereby which is then owing.
ARTICLE VI
Hazardous Materials
6.01 Definitions. For the purpose of this Deed of Trust, Grantor, Beneficiary and Trustee
agree that, unless the context otherwise specifies or requires, the following terms shall have the
meaning herein specified:
(a) Hazardous Materials: Any substance the presence of which on the Mortgaged
Property is regulated by any Governmental Requirements and Environmental Laws and
Regulations, including but not limited to: (i) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), as amended from time
to time, and regulations promulgated thereunder; (ii) any "hazardous substance" as defined by
the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. Section 9601 et semc .) ( "CERCLA" or "SuperFund "), as amended from time to time, and
regulations promulgated thereunder; (iii) asbestos; (iv) polychlorinated biphenyls; (v) any
petroleum -based products; and (vi) underground storage tanks, whether empty, filled or partially
filled with any substance.
(b) Hazardous Materials Contamination: The contamination (whether presently existing
or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements
on, over or under the Mortgaged Property by Hazardous Materials, or the contamination of the
improvements, facilities, soil, ground- water, air or other elements on, over or under any other
property as a result of Hazardous Materials at any time (whether before or after the date of this
Deed of Trust) emanating from the Mortgaged Property.
6.02 Representations and Warranties. Grantor hereby represents and warrants that to the
best of the Grantor's knowledge:
(a) No Hazardous Materials are located on the Mortgaged Property or have been
released into the environment, or deposited, discharged, placed or disposed of at, on, under or
near the Mortgaged Property, or transported to or from the Mortgaged Property. No portion of
the Mortgaged Property is being used or, to the best of Grantor's knowledge, has been used at
any previous time, for the disposal, storage, treatment, processing, manufacturing or other
handling of Hazardous Materials nor is any part of the Mortgaged Property affected by any
Hazardous Materials Contamination.
(b) No Hazardous Materials are located on property adjoining the Mortgaged
Property. No property adjoining the Mortgaged Property has ever been used at any previous
time for the disposal, storage, treatment, processing, manufacturing or other handling of
Hazardous Materials. No property adjoining the Mortgaged Property is affected by Hazardous
Materials Contamination.
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(c) No asbestos or asbestos containing materials have been installed, used,
incorporated into, or disposed of on the Mortgaged Property.
(d) No polychlorinated biphenyls or materials containing polychlorinated biphenyls
are located on or in the Mortgaged Property, in the form of electrical transformers, fluorescent
light fixtures with ballasts, cooling oils, or any other device or form.
(e) No underground storage tanks are located on the Mortgaged Property or, to the
best of Grantor's knowledge, were previously located on the Mortgaged Property and
subsequently removed or filled.
(f) No investigation, administrative order, consent order, agreement, litigation or
settlement with respect to Hazardous Materials or Hazardous Materials Contamination is
proposed, threatened, anticipated or in existence with respect to the Mortgaged Property. The
Mortgaged Property and its existing and prior uses comply and at all times have complied with
any applicable Governmental Requirements relating to environmental matters or Hazardous
Materials. There is no condition on the Mortgaged Property which is in violation of any
applicable Governmental Requirements relating to Hazardous Materials, and Grantor has
received no communication from or on behalf of any Governmental Authority that any such
condition exists. The Mortgaged Property is not currently on, and to the best of Grantor's
knowledge, has never been on, any federal, state or local "Superfund" or "Superlien" list.
(g) Except for studies, audits, and reports pertaining to the Mortgaged Property which
have been made available to Beneficiary, there have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted by or which are in the possession of or
available to Grantor in relation to the Mortgaged Property.
(h) All representations and warranties contained in this Section 6.02 shall survive the
consummation of the transactions contemplated by this Deed of Trust.
6.03 Covenants. Grantor agrees: (a) that Grantor shall not receive, store, dispose or release
any Hazardous Materials on or to the Mortgaged Property or transport any Hazardous Materials
to or from the Mortgaged Property or permit the existence of any Hazardous Materials
Contamination; (b) to give written notice to Beneficiary immediately upon Grantor's acquiring
knowledge of the presence of any Hazardous Materials on the Mortgaged Property or of the
transport of any Hazardous Materials to or from the Mortgaged Property or of the existence of
any Hazardous Materials Contamination, with a full description thereof; (c) promptly, at
Grantor's sole cost and expense, to comply with any Governmental Requirements requiring the
removal, treatment or disposal of such Hazardous Materials or Hazardous Materials
Contamination and provide Beneficiary with satisfactory evidence of such compliance; (d) to
provide Beneficiary, within thirty (30) days after demand by Beneficiary, with financial
assurance evidencing to Beneficiary's satisfaction that the necessary funds are available to pay
the cost of removing, treating and disposing of such Hazardous Materials or Hazardous Materials
Contamination and discharging any assessments which may be established on the Mortgaged
Property as a result thereof; and (e) to insure that all leases, licenses, and agreements of any kind
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now or hereafter executed which permit any party to occupy, possess, or use in any way the
Mortgaged Property or any part thereof, whether written or oral, include an express prohibition
on the disposal or discharge of any Hazardous Materials at or affecting the Mortgaged Property,
and a provision that failure to comply with such prohibition shall expressly constitute a default
under any such agreement.
6.04 Liens. Grantor shall not cause or suffer any liens to be recorded against the Mortgaged
Property as a consequence of, or in any way related to, the presence, remediation or disposal of
Hazardous Materials in or about the Mortgaged Property, including any so- called state, federal or
local "Superfund" lien relating to such matters.
6.05 Site Assessments. Beneficiary (by its officers, employees and agents) at any time and
from time to time, either prior to or after the occurrence of an Event of Default, may contract for
the services of persons (the "Site Reviewers ") to perform environmental site assessments ( "Site
Assessments ") on the Mortgaged Property for the purpose of determining whether there exists on
the Mortgaged Property any environmental condition which could result in any liability, cost or
expense to the owner, occupier or operator of such Mortgaged Property arising under any
Governmental Requirements relating to Hazardous Materials. The Site Assessments may be
performed at any time or times, upon reasonable notice, and under reasonable conditions
established by Grantor which do not impede the performance of the Site Assessment. The Site
Reviewers are hereby authorized to enter upon the Mortgaged Property for such purposes. The
Site Reviewers are further authorized to perform both above and below - ground testing for
environmental damage or the presence of Hazardous Materials or Hazardous Materials
Contamination on the Mortgaged Property and such other tests on the Mortgaged Property as
may be necessary to conduct the Site Assessments in the reasonable opinion of the Site
Reviewers. Grantor will supply to the Site Reviewers such historical and operational
information regarding the Mortgaged Property as may be reasonably requested by the Site
Reviewers to facilitate the Site Assessments and will make available for meetings with the Site
Reviewers appropriate personnel having knowledge of such matters. On request, Beneficiary
shall make the results of such Site Assessments fully available to Grantor, which (prior to an
Event of Default) may at its election participate under reasonable procedures in the direction of
such Site Assessments and the description of tasks of the Site Reviewers. The cost of
performing such Site Assessments shall be paid by Grantor upon demand of Beneficiary and any
such obligations shall be indebtedness secured by this Deed of Trust.
6.06 INDEMNIFICATION GRANTOR SHALL AT ALL TIMES RETAIN ANY AND
ALL LIABILITIES ARISING FROM THE PRESENCE, HANDLING, TREATMENT,
STORAGE, TRANSPORTATION, REMOVAL OR DISPOSAL OF HAZARDOUS
MATERIALS ON THE MORTGAGED PROPERTY. REGARDLESS OF WHETHER
ANY SITE ASSESSMENTS ARE CONDUCTED HEREUNDER, AND REGARDLESS
OF WHETHER ANY EVENT OF DEFAULT (AS DEFINED IN SECTION 4.01 OF THIS
DEED OF TRUST) SHALL HAVE OCCURRED AND BE CONTINUING OR ANY
REMEDIES IN RESPECT TO THE MORTGAGED PROPERTY ARE EXERCISED BY
BENEFICIARY, GRANTOR SHALL, TO THE EXTENT AUHORIZED BY LAW AND
SUBJECT TO FUNDS LEGALLY AVAILABLE FOR THE PURPOSE, DEFEND,
INDEMNIFY AND HOLD HARMLESS BENEFICIARY AND TRUSTEE (AND ANY
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SUCCESSOR TO THE TRUSTEE) FROM AND AGAINST ANY AND ALL
LIABILITIES (INCLUDING STRICT LIABILITY), SUITS, ACTIONS, CLAIMS,
DEMANDS, PENALTIES, DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST
PROFITS, . CONSEQUENTIAL DAMAGES, INTEREST, PENALTIES, FINES AND
MONETARY SANCTIONS), LOSSES, COSTS AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND REMEDIAL
COSTS) (THE FOREGOING ARE HEREINAFTER COLLECTIVELY REFERRED TO
AS "LIABILITIES ") WHICH MAY NOW OR IN THE FUTURE (WHETHER BEFORE
OR AFTER THE CULMINATION OF THE TRANSACTIONS CONTEMPLATED BY
THIS DEED OF TRUST) BE INCURRED OR SUFFERED BY BENEFICIARY OR
TRUSTEE (OR ANY SUCCESSOR TO THE TRUSTEE) BY REASON OF, RESULTING
FROM, IN CONNECTION WITH, OR ARISING IN ANY MANNER WHATSOEVER
OUT OF THE BREACH OF ANY WARRANTY OR COVENANT OR THE
INACCURACY OF ANY REPRESENTATION OF GRANTOR CONTAINED OR
REFERRED TO IN THIS ARTICLE VI OR IN ANY LOAN AGREEMENT MADE AND
ENTERED INTO BETWEEN GRANTOR AND BENEFICIARY RELATING TO THE
MORTGAGED PROPERTY OR WHICH MAY BE ASSERTED AS A DIRECT OR
INDIRECT RESULT OF THE PRESENCE ON OR UNDER, OR ESCAPE, SEEPAGE,
LEAKAGE, SPILLAGE, DISCHARGE, EMISSION OR RELEASE FROM THE
MORTGAGED PROPERTY OF ANY HAZARDOUS MATERIALS OR ANY
HAZARDOUS MATERIALS CONTAMINATION OR ARISE OUT OF OR RESULT
FROM THE ENVIRONMENTAL CONDITION OF THE MORTGAGED PROPERTY
OR THE APPLICABILITY OF ANY GOVERNMENTAL REQUIREMENTS
RELATING TO HAZARDOUS MATERIALS.
SUCH LIABILITIES SHALL INCLUDE, WITHOUT LIMITATION: (I) INJURY
OR DEATH TO ANY PERSON; (II) DAMAGE TO OR LOSS OF THE USE OF ANY
PROPERTY; (III) THE COST OF ANY DEMOLITION AND REBUILDING OF ANY
IMPROVEMENTS NOW OR HEREAFTER SITUATED ON THE MORTGAGED
PROPERTY OR ADJACENT PROPERTY, AND THE COST OF ANY REPAIR OR
REMEDIATION OF ANY SUCH IMPROVEMENTS; (IV) THE COST OF ANY
ACTIVITY REQUIRED BY ANY GOVERNMENTAL AUTHORITY; (V) ANY
LAWSUIT BROUGHT, GOOD FAITH SETTLEMENT REACHED, OR
GOVERNMENTAL ORDER RELATING TO THE PRESENCE, DISPOSAL, RELEASE
OR THREATENED RELEASE OF ANY HAZARDOUS MATERIALS, ON, FROM OR
UNDER THE MORTGAGED PROPERTY; AND (VI) THE IMPOSITION OF ANY
LIENS ON THE MORTGAGED PROPERTY ARISING FROM THE ACTIVITY OF
GRANTOR OR GRANTOR'S PREDECESSORS IN INTEREST ON THE
MORTGAGED PROPERTY OR FROM THE EXISTENCE OF HAZARDOUS
MATERIALS UPON THE MORTGAGED PROPERTY OR HAZARDOUS MATERIALS
CONTAMINATION. THE COVENANTS, WARRANTIES, AGREEMENTS AND
INDEMNIFICATIONS CONTAINED IN THIS ARTICLE VI SHALL SURVIVE THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS DEED OF
TRUST.
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6.07 Right of Entry. Beneficiary shall have the right but not the obligation, without in any
way limiting Beneficiary's other rights and remedies under this Deed of Trust, to enter onto the
Mortgaged Property or to take such other actions as it deems necessary or advisable to clean up,
remove, resolve or minimize the impact of, or otherwise deal with, any Hazardous Materials or
Hazardous Materials Contamination on or under the Mortgaged Property following receipt of
any notice from any person or entity asserting the existence of any Hazardous Materials or
Hazardous Materials Contamination pertaining to the Mortgaged Property, or any part thereof
which, if true, could result in an order, notice, suit, imposition of a lien on the Mortgaged
Property, or other action, and/or which, in Beneficiary's sole opinion, could jeopardize
Beneficiary's security upon this Deed of Trust. All costs and expenses paid or incurred by
Beneficiary in the exercise of any such rights shall be indebtedness secured by this Deed of Trust
and shall be payable by Grantor upon demand.
ARTICLE VII
Additional Provisions
7.01 Rights of Beneficiary. If any of the indebtedness hereby secured shall become due and
payable, Trustee or Beneficiary shall have the right and power to proceed by a suit or suits in
equity or at law, whether for the specific performance of any covenant or agreement herein
contained or in aid of the execution of any power herein granted, or for any foreclosure
hereunder or for the sale of the Mortgaged Property under the judgment or decree of any court or
courts of competent jurisdiction or for the appointment of a receiver pending any foreclosure
hereunder or the sale of the Mortgaged Property under the order of a court or courts of competent
jurisdiction or under executory or other legal process, or for the enforcement of any other
appropriate legal or equitable remedy. Grantor agrees, to the full extent that it lawfully may, that
in case one or more of the Events of Default hereunder shall have occurred and shall not have
been remedied, then, and in every such case, the Beneficiary shall have the right and power to
enter into and upon and take possession of all or any part of the Mortgaged Property in the
possession of the Grantor, its successors or assigns, or its or their agents or servants, and may
exclude Grantor, its successors or assigns, and all persons claiming under Grantor, and its or
their agents or servants, wholly or partly therefrom; and, holding the same, the Beneficiary may
use, administer, manage, operate and control the Mortgaged Property and conduct the business
thereof to the same extent as Grantor, its successors or assigns, might at the time do and may
exercise all rights and powers of Grantor, in the name, place and stead of Grantor, or otherwise
as the Beneficiary shall deem best; and in the exercise of any of the foregoing rights and powers
Beneficiary shall not be liable to Grantor for any loss or damage thereby sustained.
7.02 The Lien. Any part of the Mortgaged Property may be released by the Beneficiary
without affecting the lien, security interest and assignment hereof against the remainder. The
lien, security interest and other rights granted hereby shall not affect or be affected by any other
security taken for the same indebtedness or any part thereof. The taking of additional security, or
the extension or renewal of the indebtedness secured hereby or any part thereof, shall not release
or impair the lien, security interest and other rights granted hereby, or affect the liability of any
endorser, guarantor or surety, or improve the right of any permitted junior lienholder; and this
Deed of Trust, as well as any instrument given to secure any renewal or extension of the
indebtedness secured hereby, or any part thereof, shall be and remain a first and prior lien, except
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000025. OR 1018 545
as otherwise provided herein on all of the Mortgaged Property not expressly released until the
indebtedness secured hereby is completely paid.
7.03 Waiver. To the extent that Grantor may lawfully do so, Grantor agrees that Grantor shall
not assert and hereby expressly waives, any right under any statute or rule of law pertaining to
the marshalling of assets, the exemption of homestead, the administration of estates of decedents,
or other matter whatever to defeat, reduce or affect the right of Beneficiary, under the terms of
this Deed of Trust, to sell the Mortgaged Property for the collection of the indebtedness secured
hereby (without any prior or different resort for collection) or the right of Beneficiary, under the
terms of this Deed of Trust, to the payment of such indebtedness out of the proceeds of sale of
the Mortgaged Property in preference to every other person and claimant whatever (only
reasonable expenses of such sale being first deducted). No provision of this Deed of Trust or any
other document securing or pertaining to the Note shall be construed to impose on Beneficiary
any duty to sell the Mortgaged Property or any other collateral for the Note for collection of the
indebtedness secured by this Deed of Trust or to pursue any other remedy in Beneficiary's power
whatsoever. Grantor expressly waives and relinquishes any right or remedy which it may have
or be able to assert by reason of the provisions of Chapter 34 of the Business and Commerce
Code of the State of Texas, pertaining to the rights and remedies of sureties. To the full extent
permitted by applicable law, Grantor waives any right to require Beneficiary to use diligence in
collection of any indebtedness secured by this Deed of Trust, to proceed against or exhaust any
security or collateral for the loan evidenced by the Note, to mitigate Beneficiary's damages in
connection with the loan evidenced by the Note, or to pursue any other remedy in Beneficiary's
power whatsoever.
7.04 Subrogation. To the extent that proceeds of the Note are used to pay an outstanding lien,
charge or encumbrance against or affecting the Mortgaged Property, such proceeds have been
advanced by Beneficiary at Grantor's request, and Beneficiary shall be subrogated to all rights,
interests and liens owned or held by any owner or holder of such outstanding liens, charges and
encumbrances, irrespective of whether such liens, charges or encumbrances are released of
record.
7.05 Limitation on Interest. All agreements between Grantor and Beneficiary, whether now
existing or hereafter arising and whether written or oral, are expressly limited so that in no
contingency or event whatsoever shall the amount paid, or agreed to be paid, to Beneficiary for
the use, forbearance, or detention of the money to be loaned pursuant to the Note or otherwise, or
for the performance or payment of any covenant or obligation contained herein, exceed the
maximum amount permissible under applicable law. If from any circumstance whatsoever
fulfillment of any provision hereof at the time performance of such provision shall be due shall
involve transcending the limit of validity prescribed by law, then, ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if from any such circumstance
Beneficiary shall ever receive as interest under such Note or this Deed of Trust or otherwise an
amount that would exceed the highest lawful rate, such amount that would be excessive interest
shall be applied to the reduction of the principal amount owing under the Note or on account of
the Other Indebtedness secured hereby and not to the payment of interest or if such excessive
interest exceeds the unpaid balance of principal of the Note and such Other Indebtedness, such
excess shall be refunded to Grantor, or to the maker of the Note or other evidence of
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OR 1018 546
indebtedness if other than Grantor. All sums paid or agreed to be paid to Beneficiary for the use,
forbearance, or detention of the indebtedness secured hereby shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full so that the actual rate of interest on account of such
indebtedness is uniform throughout the term thereof. The terms and provisions of this Section
shall control and supersede every other provision of all agreements between Grantor, the maker
of the Note or other evidence of indebtedness if other than Grantor, and Beneficiary.
7.06 Waiver and Invalidity. No waiver of any default on the part of Grantor or breach of any
of the provisions of this Deed of Trust or of any other instrument executed in connection with the
indebtedness secured hereby shall be considered a waiver of any other or subsequent default or
breach, and no delay or omission in exercising or enforcing the rights and powers herein granted
shall be construed as a waiver of such rights and powers, and likewise no exercise or
enforcement of any rights or powers hereunder shall be held to exhaust such rights and powers,
and every such right and power may be exercised from time to time. If any provision of this
Deed of Trust is held to be illegal, invalid, or unenforceable under present or future laws
effective while this Deed of Trust is in effect, the legality, validity, and enforceability of the
remaining provisions of this Deed of Trust shall not be affected thereby, and in lieu of each such
illegal, invalid, or unenforceable provision there shall be added automatically as a part of this
Deed of Trust a provision as similar in terms to such illegal, invalid, or unenforceable provision
as may be possible and be legal, valid, and enforceable. If any of the liens, security interest or
assignment of rents created by this Deed of Trust shall be invalid or unenforceable, the
unsecured portion of the indebtedness secured hereby shall be completely paid prior to the
payment of the remaining and secured portion of such indebtedness and all payments made on
account of such indebtedness shall be considered to have been paid on and applied first to the
complete payment of the unsecured portion of such indebtedness.
7.07 Tenancy at Will. In the event of a trustee's sale hereunder and if at the time of such sale
the Grantor occupies the portion of the Mortgaged Property so sold, or any part thereof, Grantor
shall immediately become the tenant of the purchaser at such sale, which tenancy shall be a
tenancy from day to day, terminable at the will of either tenant or landlord, at a reasonable rental
per day based upon the value of the portion of the Mortgaged Property so occupied, such rental
to be due and payable daily to the purchaser. An action of forcible detainer shall lie if the tenant
holds over after a demand in writing for possession of such Mortgaged Property and premises;
and this agreement and any trustee's deed shall constitute a lease and agreement under which the
tenant's possession, each and all, arose and continued.
7.08 Security Agreement. With respect to any portion of the Mortgaged Property which
constitutes personal property or fixtures governed by the Uniform Commercial Code of the State
of Texas (hereinafter called the "Code "), this Deed of Trust shall constitute a security agreement
between Grantor as the Debtor and Beneficiary as the Secured Party, and Grantor hereby grants
to Beneficiary a security interest in such portion of the Mortgaged Property. Cumulative of all
other rights of Beneficiary hereunder, Beneficiary shall have all of the rights conferred upon
secured parties by the Code. Grantor will execute and deliver to Beneficiary all financing
statements that may from time to time be required by Beneficiary to establish and maintain the
validity and priority of the security interest of Beneficiary, or any modification thereof, and all
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000024 OR 1018 547
costs and expenses of any searches reasonably required by Beneficiary. Beneficiary may exercise
any or all of the remedies of a secured party available to it under the Code with respect to such
property, and it is expressly agreed that if upon default Beneficiary should proceed to dispose of
such property in accordance with the provisions of the Code, then (10) days' notice by
Beneficiary to Grantor shall be deemed to be reasonable notice under any provision of the Code
requiring such notice; provided, however, that Beneficiary may at its option dispose of such
property in accordance with Beneficiary's rights and remedies with respect to the real property
pursuant to the provisions of this Deed of Trust, in lieu of proceeding under the Code.
7.09 Changes in Grantor's Identity. Grantor shall give advance notice in writing to
Beneficiary of any proposed change in Grantor's name, address, identity, or corporate structure
and will execute and deliver to Beneficiary, prior to or concurrently with the occurrence of any
such change, all additional financing statements that Beneficiary may require to establish and
maintain the validity and priority of Beneficiary's security interest with respect to any Mortgaged
Property described or referred to herein.
7.10 Fixtures. Some of the items of Mortgaged Property described herein are goods that are
or are to become fixtures related to the real estate described herein, and it is intended that as to
those goods, this Deed of Trust shall be effective as a financing statement filed as a fixture filing
from the date of its filing for record in the real estate records of the county in which the
Mortgaged Property is situated. Information concerning the security interest created by this
instrument may be obtained from Beneficiary, as secured party, at the address of Beneficiary
stated above. The mailing address of the Grantor, as debtor, is as stated in Section 1.02.
7.11 NSP Subrecipient Activity Report. Until all NSP requirements are met, the NSP
Subrecipient Activity Report shall be submitted monthly. Thereafter, the NSP Subrecipient
Activity Report shall be submitted quarterly. The Beneficiary shall determine whether all NSP
obligation requirements have been met and may amend this rule from time to time or as needed.
7.12 Applicable Law. All references in this Deed of Trust to the "law" or to "lawful rate"
shall be construed to be the laws of the State of Texas and the United States, whichever is
applicable. "Applicable law" as used herein means (a) the law pertaining to maximum rates of
interest that is now in effect, and (b) any law that comes into effect at any time in the future
allowing a higher maximum rate than the law now in effect.
7.13 Binding Effect. The covenants herein contained shall bind, and the benefits and
advantages shall inure to, the respective heirs, executors, administrators, personal
representatives, successors and assigns of the parties hereto, and to any substitute Trustee.
Whenever used, the singular number shall include the plural and the singular, and the use of any
gender shall be applicable to all genders. The duties, covenants, conditions, obligations and
warranties of Grantor in this Deed of Trust shall be joint and several obligations of Grantor and
each Grantor if more than one, and Grantor's heirs, personal representatives, successors and
assigns. Each party who executes this Deed of Trust (other than Beneficiary), and each
subsequent owner of the Mortgaged Property, or any part thereof, covenants and agrees that it
will perform, or cause to be performed, each condition, term, provision, and covenant of this
Deed of Trust.
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7.14 Right to Inspect. Beneficiary shall have at all times a right of access to and upon the
Mortgaged Property for purposes of inspection and, at Beneficiary's option, for purposes of
performing any obligations required of Grantor hereunder.
7.15 Notices. All notices, requests, consents, demands and other communications required or
which any part desires to give hereunder shall be in writing. Notice will be deemed effective
upon deposit in the United States mail, postage prepaid, by certified mail, return receipt
requested, addressed to the party to whom directed at the addresses specified in Article I of this
Deed of Trust (unless changed by notice in writing given by the particular party whose address is
to be changed). Notice given in any other manner shall be deemed effective only if and when
received by the party to be notified. Provided, however, service of a notice required by Texas
Property Code Section 51.002, as amended, shall be considered complete when the requirements
of that statute are met. Notwithstanding the foregoing, no notice of change of address shall be
effective except upon receipt. This section shall not be construed in any way to affect or impair
any waiver of notice or demand provided in the Note or any other instrument securing the Note
or to require giving of notice or demand to or upon any person in any situation or for any reason.
7.16 Assignment of Rents. All of the rents, royalties (including, but not limited to, royalties
arising out of the sale of oil, gas, and any other minerals produced from the Mortgaged Property,
or any properties pooled with the Mortgaged Property), issues, profits, revenue, income and
other benefits derived from the Mortgaged Property or arising from the use or enjoyment of any
portion thereof or from any lease or agreement pertaining thereto (hereinafter called the "Rents
and Profits ") are hereby assigned, transferred, conveyed and set over to Beneficiary as security
for (i) payment of the principal and interest and all other sums payable on the Note, (ii) payment
of any Other Indebtedness secured hereby and (iii) the performance and discharge of each and
every obligation, covenant and agreement of Grantor set forth herein or in the Note or in any
other instrument securing payment of the Note. Prior to the occurrence of any Event of Default
hereunder, Grantor shall collect and receive all Rents and Profits, and Grantor shall apply the
funds so collected first to the payment of the principal and interest and all other sums payable on
the Note and in payment of all Other Indebtedness secured hereby and thereafter, so long as no
Event of Default hereunder has occurred, the balance shall be distributed to the account of
Grantor. Grantor will not (i) execute an assignment of any of its right, title or interest in the
Rents and Profits, or (ii) except in the ordinary course of business, including but not limited to
where the lessee is in default thereunder, terminate or consent to the cancellation or surrender of
any lease of the Mortgaged Property or any part thereof, now or hereafter existing having an
unexpired term of one year or more except that any lease may be canceled, provided that
promptly after the cancellation or surrender thereof a new lease is entered into with a new lessee
having a credit standing, in the judgment of Beneficiary, at least equivalent to that of the lessee
whose lease was canceled, on substantially the same terms as the terminated or canceled lease, or
(iii) except in the ordinary course of business, modify any lease of the Mortgaged Property or
any part thereof so as to shorten the unexpired term thereof or so as to decrease any amount of
the rent payable thereunder, or (iv) accept prepayments of any installments of rent to become due
under any of such leases in excess of one month, except prepayments in the nature of security for
the performance of the lessee thereunder, or (v) in any other manner impair the value of the
Mortgaged Property or the security of this Deed of Trust. Upon an Event of Default in the
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000025 OR 1018 549
payment of the Note or any Other Indebtedness secured hereby, Beneficiary may, at its option,
and without notice to Grantor receive and collect all Rents and Profits. Effective upon such
Event of Default and for the foregoing purpose Grantor has irrevocably made, constituted and
appointed, and by these presents does irrevocably make, constitute and appoint Beneficiary as its
true and lawful attorney for it and in its name, place and stead to receive and collect the Rents
and Profits, compromise and settle all claims therefore, and execute, deliver, cancel, modify and
to release any and all leases and lessees, giving and granting unto Beneficiary full power and
authority to do and perform all and every act and thing whatsoever, requisite and necessary to be
done in connection therewith, as fully, to all intents and purposes, as Grantor might or could do if
personally present and also giving and granting unto Beneficiary full power to substitute one or
more attorney or attorneys under it, concerning such matters. Default shall be presumed upon
Beneficiary's filing with the County Clerk of the County in which the Mortgaged Property is
located of an affidavit to the effect that an Event of Default has occurred hereunder and all
persons dealing with Beneficiary may rely upon such affidavit. Grantor agrees that all persons
dealing with Beneficiary and its substitutes that this power of attorney shall remain effective for
so long as there is an Event of Default under the terms hereof. Grantor agrees to indemnify and
hold Beneficiary and its substitutes harmless from any and all liability arising out of
Beneficiary's or its substitutes' acts pursuant to the authority herein granted to the extent allowed
by law. This power of attorney is one coupled with an interest.
7.17 Construction Mortgage. This Deed of Trust constitutes a "Construction Mortgage" as
defined in the Texas Business and Commerce Code and secures an obligation incurred for the
construction of improvements on the Real Property described herein.
7.18 Loan Agreement. It is understood and agreed that all or a portion of the funds to be
advanced under the Note are to be used in the construction or Rehabilitation of the Project in
accordance with the NSP Construction Loan Agreement dated on even date herewith made by
and between Grantor (Borrower in Loan Agreement or the Maker of the Note if different from
Grantor) and Beneficiary (Lender in Loan Agreement), which said Loan Agreement is
incorporated herein by reference to the same extent and effect as if fully set forth herein and
made a part hereof. This Deed of Trust secures the payment of all sums and the performance of
all covenants required by Grantor (or the Maker of the Note if different from Grantor) under the
Loan Agreement, and upon the failure of Grantor (or the maker of the Note if different from
Grantor) to keep and perform all the covenants, conditions and agreements of the Loan
Agreement, the indebtedness secured hereby shall, at the option of Beneficiary, become due and
payable, anything herein contained to the contrary notwithstanding.
7.19 Attorney in Fact. Grantor has irrevocably made, constituted and appointed, and by these
presents does irrevocably make, constitute and appoint Beneficiary its true and lawful attorney,
for it and in its name, place and stead in the Event of Default to contract for the sale of and
convey all or any part of the Mortgaged Property, giving and granting unto Beneficiary full
power and authority to do and perform all and every act and thing whatsoever requisite and
necessary to be done in connection therewith, as fully, to all intents and purposes, as Grantor
might or could do if personally present and also giving and granting unto Beneficiary full power
to substitute one or more attorneys under it, in or concerning such matters. Grantor agrees that
this power of attorney shall be effective upon an Event of Default in the payment of the Note or
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000023 OR 1018 550
under any instrument executed as security therefore, and Grantor agrees and represents to those
dealing with Beneficiary, and its substitute or substitutes, that this power of attorney shall be
effective upon Beneficiary's filing with the County Clerk of the county in which the Mortgaged
Property is situated, an affidavit to the effect that an Event of Default has occurred under the
terms of the Note or any instruments executed as security therefore and such persons may rely
upon Beneficiary's representation with regard to the continuation of such default, Grantor agrees
with all persons dealing with Beneficiary, its substitute and substitutes that this power of attorney
shall remain effective for so long as there is an Event of Default under the terms of the Note or
any instruments executed as security therefore, and further agrees with such persons that they
may rely upon the representations of Beneficiary, its substitute and substitutes, with regard to the
continuation of such default. TO THE EXTENT AUTHORIZED BY LAW AND SUBJECT
TO THE LIMITATIONS CONTAINED HEREIN, AND FUNDS LEGALLY AVAILABLE
FOR THE PURPORSE, GRANTOR AGREES TO INDEMNIFY AND HOLD BENEFICIARY
AND ITS SUBSTITUTES HARMLESS FROM ANY AND ALL LIABILITY ARISING OUT
OF BENEFICIARY'S OR ITS SUBSTITUTES' ACTS PURSUANT TO THE AUTHORITY
HEREIN GRANTED TO THE EXTENT ALLOWED BY LAW. THIS POWER OF
ATTORNEY IS ONE COUPLED WITH AN INTEREST.
7.20 Covenants Running with the Land. All of the covenants, conditions, warranties,
representations and other obligations made or undertaken by Grantor contained in this Deed of
Trust and the other Loan Documents are intended by Grantor, Beneficiary, and. Trustee to be, and
shall be construed as, covenants running with the Mortgaged Property until the lien of this Deed
of Trust has been fully released by Beneficiary.
7.21 Foreclosure. If the Mortgaged Property becomes the subject of a foreclosure proceeding
that results in the sale of part or all of the Mortgaged Property, all sums in excess of those paid to
superior lien holders shall be paid to Beneficiary to apply to the outstanding balance under the
Note. If there are insufficient funds to pay off the Note secured herein, Beneficiary may in its
own discretion waive the payment of any or all of the outstanding loan balance under the Note.
7.22 Non - Recourse. Notwithstanding anything herein to the contrary, Beneficiary shall have
no recourse against Grantor, nor against any guarantor, if any, for payment and performance of
all of the obligations, covenants and agreements of Grantor under the Note and the documents
securing same including, but not limited to this Deed of Trust (said documents hereafter
collectively called "Security Documents "), except to the full extent of all of the Mortgaged
Property which constitutes security for the Note. If default occurs in the timely and proper
payment of any portion of such indebtedness or in the timely performance of any of such
obligations, agreement or covenants, any judicial proceedings brought by Beneficiary against
Grantor or any guarantor shall be limited to the protection and preservation of the Mortgaged
Property, the preservation, enforcement and foreclosure of the liens, mortgages, assignments,
rights and security interests now or at any time hereafter securing the payment of the Note, and
enforcement and collection of obligations, covenants and indebtedness for which Grantor and
any guarantors remain liable as provided in this paragraph. If there is a foreclosure of any such
liens, mortgages, assignments, rights, and security interests securing the payment of the Note, by
power of sale or otherwise, no judgment for any deficiency upon such indebtedness shall be
sought or obtained by Beneficiary against Grantor. Notwithstanding the foregoing provisions of
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0000250 OR 1018 551
this paragraph or any other agreement, Beneficiary shall have full recourse against Grantor and
all guarantors, if any, for: (a) fraud or misrepresentation by Grantor or any guarantor in
connection with the transactions herein contemplated; (b) failure to pay taxes, assessments,
charges for labor or materials or other charges that can create liens on any portion of the
Mortgaged Property; (c) the misapplication of (i) proceeds of insurance covering any portion of
the Mortgaged Property, or (ii) proceeds of the sale or condemnation of any portion of the
Mortgaged Property, or (iii) rentals received by or on behalf of Grantor subsequent to the date on
which Beneficiary gives written notice of the posting of foreclosure notices, (d) failure to prevent
waste to the Mortgaged Property unless Beneficiary is compensated therefore by insurance
proceeds collected by Grantor; (e) the return to Beneficiary of all unearned advance rentals and
security deposits paid by tenants of the Mortgaged Property and not refunded to or forfeited by
such tenants, (f) the return of, or reimbursement for, all personalty taken from the Mortgaged
Property by or on behalf of Grantor, (g) all court costs and for all attorneys' fees provided for in
any instrument governing, securing or pertaining to the payment of the Note; and (h) failure to
comply with any indemnification provision or covenants pertaining to environmental matters
contained in the Security Documents.
7.23 Release. Subject to the following terms, Beneficiary will release the entire Mortgaged
Property or individual lots on the Mortgaged Property from all liens securing the Note upon
closing of a permanent mortgage loan (purchase money) with an Eligible Household utilizing the
Financing Mechanisms available under the NSP, when applicable:
(a) Grantor must not be in default under this Deed of Trust, Loan Agreement or the
Note at the time of the request for lot release.
(b) The release must be on a form approved by Beneficiary that is prepared and
recorded at Grantor's expense.
(c) The purchase price of Mortgaged Property to the Eligible Household shall be the
lesser of one the following amounts: (1) the cost to acquire and construct or rehabilitate the
Project to a decent, safe, and habitable condition; or (2) one hundred percent (100 %) of the
appraised value after rehabilitation or construction. In no instance shall the purchase price of the
Mortgaged Property to the Eligible Household exceed either of the amounts set out in this
section 7.23(c.)
(d) The constructed or rehabilitated single family dwelling must be made available
for sale to Eligible Households within twelve (12) months from the date of acquisition under the
NOFA or from completion of Rehabilitation under the NOFA -R.
(e) The lot to be released must be improved with a single - family dwelling completed
in a good and workmanlike manner in accordance with plans and specifications approved by
Beneficiary and must, at a minimum, meet the Texas Minimum Construction Standards (TMCS)
and the NSP Rehabilitation Standards as noted herein, and must incorporate construction
requirements imposed for single family affordable housing as cited as Texas Government Code,
Section 2306.514, as may be amended from time to time.
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•
v .L
0000254V OR 1018 552
(f) The lot release price upon closing of the permanent mortgage made to an Eligible
Household will be $96,110.70, the full unpaid principal balance of the Note. Upon receipt of
payment of the release price from the Grantor, Beneficiary shall immediately credit said amount
against the principal balance of the Note. As provided herein, Beneficiary may forgive some or
all of the lot release price and said amount shall be immediately credited against the principal
balance of the Note as stated in sections 7.23(g) and (h) of this Deed of Trust.
(g) If Grantor utilizes Financing Mechanisms under NSP and the Eligible Household
qualifies, then in lieu of payment of the full lot release price, the Beneficiary may forgive up to
$30,000.00 in a deferred forgivable down payment assistance loan from Beneficiary to an
Eligible Household whose income exceeds fifty percent (50 %) but is less than one hundred
twenty (120 %) of the area median income as defined by NSP for the payment of down payment
assistance, reasonable closing costs, principal reductions and gap financing in conjunction with a
permanent mortgage loan for the purchase of the single family dwelling from a private mortgage
lender to said Eligible Household. The full amount of any partial release price for the Mortgaged
Property shall be immediately credited against the principal balance of the Note upon receipt of
the fully, executed subordinate, deferred forgivable down payment assistance loan in a form
approved by Beneficiary in addition to payment of the remaining balance of the lot release price.
(h) If Grantor utilizes Financing Mechanisms under NSP, and the Eligible Household
qualifies, then in lieu of payment of the lot release price, Grantor may forgive up to an amount
equal to the full unpaid principal balance of the Note for the Mortgaged Property to a thirty (30)
year, zero percent (0 %) interest, fully amortizing permanent mortgage loan from Beneficiary to
an Eligible Household whose income does not exceed fifty percent (50 %) of area median income
as defined by NSP for the purchase of the single - family dwelling. For an Eligible Household
whose income does not exceed fifty percent (50 %) of the area median income as defined by
NSP, Grantor, in lieu of payment, may also convert up to $30,000.00 of the unpaid principal
balance of the Note per individual lot to a deferred forgivable down payment assistance loan
from Beneficiary to said Eligible Household for the payment of principal reductions and gap
financing in conjunction with and in addition to the permanent mortgage loan from Beneficiary
to said Eligible. The full amount of any partial release price for the Mortgaged Property shall be
immediately credited against principal balance of the Note upon receipt of fully, executed
permanent mortgage loan documents and, if applicable, homebuyer assistance loan documents,
in a form approved by Beneficiary.
(i) Grantor must provide Beneficiary ten (10) days notice of any requested release.
At the time a release is requested, the party requesting the release must furnish to the holder of
the Note a calculation of area by field notes and a plat or survey, indicating the area to be
released and its relationship to the portion of the Property not to be released and shall provide
evidence that the lot is being sold to an Eligible Household by submitting an income certification
in a form prescribed by Beneficiary. All expenses incident to the granting of release will be
borne by the party requesting the release, including but not limited to the cost of the survey,
Beneficiary's attorney's fees, and recording costs.
7.24 Low and Moderate Income Requirement. It is the intent of Beneficiary and Grantor
that 100% of the funds made available under NSP are to be used to meet the low and moderate
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•
Bk Val Ps
000025. OR 1018 553
income requirement established in the Housing and Economic Recovery Act Section 2301
(f)(3)(A)(i) and (ii). The low and moderate income requirement includes individuals and
families whose incomes do not exceed 120% of area median income as defined therein.
Such individuals and families will be considered an Eligible Household, as determined by
Beneficiary as stated herein or in accordance with any corresponding provision of federal law or
provisions of succeeding laws as may be amended from time to time. The determination of
whether a purchaser is an Eligible Household shall be made by Beneficiary, in its sole absolute
discretion.
7.25 NSP Contract. Each term and provision of this Deed of Trust is expressly subject to the
terms and condition of the Neighborhood Stabilization Program Contract Number 77099999126
executed between Office of Rural Affairs established within the Department of Agriculture, a
public and official agency of the state of Texas, and Grantor herein, dated to be effective
September 1, 2009, in the original amount of $1,050,000.00, as assigned and transferred to
Beneficiary by Assignment of Contract on August 30, 2011, and as may be amended from time
to time ( "NSP Contract ") which is incorporated herein by reference. The lot or lots securing this
loan must be improved with a single family dwelling completed in good and workmanlike
manner and sold to an Eligible Household who will maintain the affordability period for rental or
homeownership in accordance with the NSP. The terms of the NSP Contract shall govern over
any conflicting provision hereof.
7.26 Due on Transfer - Nonresidential Property. BENEFICIARY MAY DECLARE THE
DEBT SECURED BY THIS DEED OF TRUST IMMEDIATELY DUE AND PAYABLE
AND INVOKE ANY REMEDIES PROVIDED IN THIS DEED OF TRUST FOR
DEFAULT IF GRANTOR TRANSFERS ANY OF THE MORTGAGED PROPERTY TO
A PERSON WHO IS NOT A PERMITTED TRANSFEREE WITHOUT
BENEFICIARY'S CONSENT. "PERMITTED TRANSFEREE" FOR A NATURAL
PERSON MEANS THAT PERSON'S SPOUSE OR CHILDREN, ANY TRUST FOR
THAT PERSON'S BENEFIT OR THE BENEFIT OF THE PERSON'S SPOUSE OR
CHILDREN, OR ANY CORPORATION, PARTNERSHIP, OR LIMITED LIABILITY
COMPANY IN WHICH THE DIRECT AND BENEFICIAL OWNER OF ALL THE
EQUITY INTEREST IS A NATURAL PERSON OR THAT PERSON'S SPOUSE OR
CHILDREN OR ANY TRUST FOR THE BENEFIT OF THEM; AND THE HEIRS,
BENEFICIARIES, EXECUTORS, ADMINISTRATORS, OR PERSONAL
REPRESENTATIVES OF A NATURAL PERSON ON THE DEATH OF THAT PERSON
OR ON THE INCOMPETENCY OR DISABILITY OF THAT PERSON FOR PURPOSES
OF THE PROTECTION AND MANAGEMENT OF THAT PERSON'S ASSETS; AND
FOR A PERSON THAT IS NOT A NATURAL PERSON, ANY OTHER PERSON
CONTROLLING, CONTROLLED BY, OR UNDER COMMON CONTROL WITH
THAT PERSON.
7.27 Vendor's Lien. $96,110.70 of the Note secured by this Deed of Trust is for payment of
construction costs. The Note is secured both by this Deed of Trust and an implied or equitable
vendor's lien on the Property by operation of law in a warranty deed executed by Mary R.
Woodward, Frances R. Snipes, Florin R. Klussmann, Sanford G. Robinson and Michael C.
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• •
Robinson to Grantor dated September 16, 2000, filed for record on September 19, 2000, under
Clerk's Document No. 05768, Volume 434, Page 763 of the Official Public Records of Walker
County, Texas (the "Records).
7.28 Entire Agreement; Amendment. THIS DEED OF TRUST AND THE OTHER LOAN
DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES
HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO.
THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. The provisions
hereof and the other Loan Documents may be amended or waived only by an instrument in
writing signed by Grantor and Beneficiary.
Bk Vol Ps
00002513 OR 1018 554
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Page 32 of 33
4 •,
•
EXECUTED this 632r day of March, 2012.
GRANTOR:
•
CITY OF HUNTSVILLE, a political subdivision
of the State of Texas ,g
By:
Name: Bill Baine
Title: City Manager
THE STATE ACIAAS §
COUNTY OF /fir-A/
This instrument was acknowledged before me on this °`lJ day of 'I7�C ,'2012,
by Bill Baine, City Manager of City of Huntsville, a political subdivision of the State of Texas,
acting on behalf of said political subdivision and in the capacity herein stated.
(S
JUDY ANN THORNTON
MY COMMISSION EXPIRES
August 14, 2014
PREPARED BY:
Texas Department of Housing
and Community Affairs
Legal Services Division
P.O. Box 13941
Austin, Texas 78711 -3941
(512) 475 -2574
Not
Public, I$tate of Texas
AFTER RECORDING RETURN TO:
Walker County Title Company
1109 University Ave.
Huntsville, Texas 77340
Attn: Judy Thorton
GF # 201103240
Bk V01
Po
00002513 OR 1018 555
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Page 33 of 33
• Bk V•a1 F'�
00002513 OR 1018 556
Exhibit A
Being 0.236 acres of land, also called Lot 2, Block 66 of Huntsville Townsite, Walker
County, Texas, according to the recorded deed thereof in Volume 434, Page 763 of the
Deed Records of Walker County, Texas, said 0.236 acres being more particularly
described by metes and bounds as follows:
BEGINNING at a 1/2" iron rod found at the southeast corner of the intersection of
Avenue P and 7th Street, having a Texas State Plane coordinate of Y= 10,260,670.695
X= 3,796,635.030;
THENCE South 02 degrees 11 minutes 43 seconds West, a distance of 652.65 feet to a
Y2" iron rod set for the most westerly northwest corner and the POINT OF BEGINNING
of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 67.87 feet to a 1"
iron bar found for the interior corner of herein described tract;
THENCE North 02 degrees 11 minutes 43 seconds West, a distance of 62.92 feet to a
1/2" iron rod set for the most northerly northwest corner of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 60.30 feet to a 1/2"
iron rod set for the northeast corner of herein described tract, also being South 86 degrees
17 minutes 33 seconds West, a distance of 80.83 feet from a found 60D nail at the base of
an old fence corner post;
THENCE South 02 degrees 11 minutes 43 seconds East, a distance of 113.52 feet to a
point for corner for the southeast corner of herein described tract;
THENCE South 86 degrees 17 minutes 33 seconds West, a distance of 128.17 feet to a
1/2" iron rod set for the southwest corner of herein described tract,
THENCE North 02 degrees 11 minutes 43 seconds West, A distance of 50.60 feet to the
POINT OF BEGINNING and containing 0.236 acres of land.
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CONSTRUCTION LOAN AGREEMENT
( "Loan Agreement ")
NEIGHBORHOOD STABILIZATION PROGRAM
Awarding Federal Agency: United States Department of Housing and Urban
Development ( "HUD ")
TDHCA Federal Award Number: B- 08 -DN -48 -0001
Federal Award Year (Year of Award from HUD to TDHCA): 2008
TDHCA Award Year (Year of TDHCA Board Approval): 2009
THIS Neighborhood Stabilization Program ( "NSP ") CONSTRUCTION LOAN AGREEMENT
dated this r;2S day of March, 2012 is made by and between the TEXAS DEPARTMENT OF
HOUSING AND COMMUNITY AFFAIRS, a public and official agency of the State of Texas
( "Lender "), whose address is 221 E. 11t Street., P.O. Box 13941, Austin, Travis County, Texas
78711 -3941, and CITY OF HUNTSVILLE, a political subdivision of the State of Texas
( "Borrower), whose address is 1212 Avenue M, Huntsville, Walker County, Texas 77340, in
connection with a loan in the original principal sum of $96,110.70, and is only for construction
costs.
GENERAL
Borrower is engaged in the business of construction, which includes rehabilitation and new
construction, under NSP and the sale of single - family residences on certain lot(s) located in Walker
County, Texas as described as Being 0.236 of an acre, more or less out of LOT TWO (2), BLOCK
SIXTY -SIX (66), HUNTSVILLE TOWNSITE, P. GRAY LEAGUE, A -24, Walker County, Texas
and being more particularly described by metes and bounds on Exhibit "A" attached hereto and
made a part hereof. The Loan that is the subject of this NSP Construction Loan Agreement is to be
used by Borrower to finance the acquisition and construction of a single - family residence, in
accordance with the Neighborhood Stabilization Program Contract (as defined herein) for the
single - family dwelling to be constructed or rehabilitated, as those terms are hereinafter defined.
ARTICLE 1 - DEFINITIONS
For purposes of this Loan Agreement, the following terms shall have the respective
meanings assigned to them.
1.1 Advance. The terms "Advance" or "Advances" shall mean a disbursement by
Lender of any of the proceeds of the Note and/or the Borrower's Deposit (defined herein) based
on an interim inspection supported by appropriate documentation as to be determined by Lender.
1.2 Affidavit of Borrower. The term "Affidavit of Borrower" shall mean a sworn
affidavit of Borrower (and such other parties as Lender may require) to the effect that all statements,
invoices, bills, and other expenses incident to construction of Improvements incurred to a specified
date, whether or not specified in the Approved Budget for such Improvements, have been paid in
full, except for (a) amounts retained pursuant to the Construction Contract, if applicable and (b)
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items to be paid from the proceeds of an Advance then being requested or in another manner
satisfactory to Lender.
1.3 Application for Advance. The term "Application for Advance" shall mean a
written commercial draw request through the Lender's Housing Contract System, including all
supporting documentation required to correspond and substantiate the expense. Said application,
in the form attached hereto as Exhibit B -1, (or on such other form furnished and approved by
Lender from time to time) shall be completed by Borrower (and such other parties as Lender may
require) and submitted to Lender and if requested by Lender specifying by name, current address,
and amount all parties to whom Borrower is obligated for labor, materials, or services supplied for
the construction of the Improvements and all other expenses incident to the Loan, and the
construction of the Improvements, whether or not specified in the Approved Budget, requesting an
Advance for the payment of such items, containing, if requested by Lender, an Affidavit of
Borrower, accompanied by such schedules, affidavits, releases, waivers, statements, invoices, bills,
and other documents as Lender may reasonably request, including but not limited to an executed
Application and Certificate for Payment and an Interim Construction Inspection Report (as those
terms as hereafter defined).
1.4 Application and Certificate for Payment. The term "Application and Certificate for
Payment" shall mean a written application in the form attached hereto as Exhibit C (or on such
other form furnished and approved by Lender from time to time) by Borrower submitted to Lender
to correspond with and substantiate each Application for Advance.
1.5 Approved Budget. The term "Approved Budget" shall be prepared by the Borrower
and include the following documents: schedule of values and itemization of costs incurred, together
demonstrating a budget or a cost itemization, that specifies the cost by item of all labor, materials,
and services necessary for the construction of Improvements for which the proceeds of a Note are to
be used in accordance with the Plans and all Governmental Requirements.
1.6 Architect. This term is not applicable to this agreement.
1.7 Borrower. The term "Borrower" shall mean CITY OF HUNTSVILLE, a
political subdivision of the State of Texas.
1.8 Borrower's Deposit. The term "Borrower's Deposit" shall mean such cash sums as
Lender may deem necessary, from time to time until a Loan is paid in full, in addition to such Loan,
for the payment of the costs of labor, materials, and services required for the construction of the
Improvements, other costs and expenses specified in the Approved Budget, and other costs and
expenses required to be paid in connection with the construction of the Improvements in accordance
with the Plans and any Governmental Requirements.
1.9 Commencement Date. The term "Commencement Date" shall mean the date as of
even date herewith.
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1.10 Completion. When all of the following have been delivered to Lender: (i)
certificate of occupancy (or its equivalent) from the appropriate governmental authority having
jurisdiction over the Property, (ii) certificate of substantial completion from the Architect, if
applicable, or Inspecting Architect and (iii) an Affidavit and full release of liens in recordable
form from the Contractor, if applicable and, upon request of Lender, any other contractors or
subcontractors who have performed work on, or furnished materials for, the Improvements, or
other documentation specified by Lender.
1.11 Completion Date. The term "Completion Date" shall mean the date the
Improvements are constructed or rehabilitated to completion, but in no event later than August 1,
2012.
1.12 Construction Contracts: The term "Construction Contracts" shall mean any and all
contracts and agreements, written or oral, between Borrower and the General Contractor, between
Borrower and any other original contractor, between any of the foregoing and any subcontractor and
between any of the foregoing and any other person or entity relating in any way to the construction
of the Improvements, including, without limitation, the performing of labor or the furnishing of
standard or specifically fabricated materials in connection therewith.
1.13 General Contractor or Contractor. The term "General Contractor" or "Contractor"
shall mean Tegrity Homes, LLC, a Texas limited liability company, or any other general contractor
engaged by Borrower and approved in writing by Lender to construct the Improvements thereof.
1.14 Debtor Relief Laws. The term "Debtor Relief Laws" shall mean any applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement, insolvency, reorganization, or
similar laws affecting the rights or remedies of creditors generally, as in effect from time to time.
1.15 Deed of Trust. The term "Deed of Trust" shall mean an interim construction deed of
trust (with security agreement) of even date herewith executed by Borrower to Timothy K. Irvine,
Trustee for Lender, securing the payment of the Note and conveying the Property.
1.16 Event of Default. The term "Event of Default" shall mean the occurrence of any one
of the following:
(a) Any indebtedness evidenced, governed or secured by any of the Loan Instruments is
not paid when due, whether by acceleration or otherwise.
(b) Any covenant in this Loan Agreement or any of the other Loan Instruments, is not
fully and timely performed, or the occurrence of any default or event of default thereunder.
(c) Any statement, representation or warranty in the Loan Instruments, any Financial
Statements or any other writing delivered to Lender in connection with the Loan is false, misleading
or erroneous in any material respect.
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(d) Failure of the construction of Improvements or any materials for which an Advance
has been requested to comply with the Plans, any Governmental Requirements, or the requirements
of any contract purchaser of a lot(s) and Improvements, if applicable.
(e) Failure of Borrower to satisfy any condition specified herein as precedent to the
obligation of Lender to make an Advance after an Application for Advance has been submitted by
Borrower to Lender.
(0 A reasonable determination by Lender that construction of the Improvements will
not be completed on or before the Completion Date.
(g) Borrower or any person obligated to pay any part of the indebtedness evidenced,
governed or secured by the Loan Instruments:
(1) does not pay its debts as they become due or admits in writing its inability to
pay its debts or makes a general assignment for the benefit of creditors; or
(2) commences any case, proceeding or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any Debtor
Relief Laws; or
(3) in any involuntary case, proceeding or other action commenced against it
which seeks to have an order for relief entered against it, as debtor, or seeks reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, (i) fails to obtain a dismissal
of such case, proceeding or other action within sixty (60) days of its commencement, or (ii) converts
the case from one chapter of the Federal Bankruptcy Code to another chapter, or (iii) is the subject
of an order for relief; or
(4) conceals, removes, or permits to be concealed or removed, any part of its
property, with intent to hinder, delay or defraud its creditors or any of them, or makes or suffers a
transfer of any of its property which may be fraudulent under any bankruptcy, fraudulent
conveyance or similar law; or makes any transfer of its property to or for the benefit of a creditor at
a time when other creditors similarly situated have been paid; or suffers or permits, while insolvent,
any creditor to obtain a lien upon any of its property through legal proceedings which is not vacated
within sixty (60) days from the date thereof; or
(5) has a trustee, receiver, custodian or other similar official appointed for or
take possession of all or any part of the Property or any other of its property or has any court take
jurisdiction of any other of its property which continues for a period of sixty (60) days (except
where a shorter period is specified in the immediately following subparagraph (6)); or
(6) fails to have discharged within a period of ten (10) days any attachment,
sequestration, or similar writ levied upon any property of such person; or
(7) fails to pay immediately any final money judgment against such person.
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(h) The holder of any lien, security interest or assignment on a Property institutes
foreclosure or other proceedings or takes other action for the enforcement of its remedies
thereunder.
(i)
The liquidation, termination, dissolution, death, or legal incapacity of Borrower.
(j) Reasonable belief by Lender that the prospect of payment or performance of any
obligation under any of the Loan Instruments is impaired.
(k) The occurrence of any material adverse change in the financial condition of
Borrower.
(1) Default in the payment of any other indebtedness or default in the performance of
any other obligation to Lender by Borrower.
(m) Breach of the NSP Contract, as defined herein.
(n) Default under the NSP Contract.
1.17 Financial Statements. The term "Financial Statements" shall mean such balance
sheets, profit and loss statements, reconciliations of capital and surplus, changes in financial
condition, schedules of sources and uses of funds, operating statements with respect to Borrower,
pro forma schedules of sources and uses of funds for ensuing twelve -month periods, and other
financial information of Borrower as shall be required by Lender, from time to time, which
statements shall be certified as true and correct by the party submitting such statements or, if
required by Lender, shall be certified by an independent certified public accountant.
1.18 Financing Statements. The term "Financing Statements" shall mean UCC -1
financing statements of even date herewith.
1.19 Governmental Authority. The term "Governmental Authority" shall mean the
United States, the State of Texas, the county, the city, or any other political subdivision in which the
Property is located, and any other political subdivision, agency, or instrumentality exercising
jurisdiction over Borrower or the Property.
1.20 Governmental Requirements. The term "Governmental Requirements" shall mean
all laws, ordinances, rules, and regulations of any Governmental Authority applicable to Borrower
or the Property or the construction or development of Improvements thereon, including, without
limitation, the following: the Civil Rights Act of 1964 (42 U.S.C. 2000(d); Executive Order
11063, as amended by Executive Order 12259; Executive Order 11246; Age Discrimination Act
of 1975 (42 U.S.C. 6101 et seq.); Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.); Fair
Credit Reporting Act (15 U.S.C. 1681 et seq.); Fair Housing Act (42 U.S.C. 3601 et seq.); the
Americans with Disabilities Act of 1990 (P.L. 101 -336); of the Rehabilitation Act of 1973 (29
U.S.C. 794) and implementing regulations (24 CFR Part 8); Architectural Barriers Act of 1968
(42 U.S.C. 4151 et seq.); Federal Drug Free Workplace Act of 1988 and the regulations
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promulgated thereunder including, without limitation, 54 CFR Part 4956, Section 3 of the
Housing and Urban Development Act of 1968; Executive Orders 11625, 12432 and 12138, as
amended; the Copeland "Anti- Kickback" Act (18 U.S.C. § 874 et seq.); the Davis -Bacon Act (40
U.S.C. § 276a et seq.); Sections 103 and 107 of the Work Hours and Safety Standards Act. (40
U.S.C. § 327 et seq.); the Uniform Relocation Assistance and Real Property Acquisition Policies
Act (42 U.S.C. § 4201 et seq.); the Housing and Community Development Act of 1974; the
National Environmental Policy Act (42 U.S.C. § 4321 et seq.); 24 CFR Part 50, of the Housing
and Urban Development Act as applicable; and 24 CFR Part 58, 51, 52, and 55 of the Housing
and Urban Development Act; ( "NEPA "); the Lead -Based Paint Poisoning Prevention Act (42
U.S.C. § 4321 et seq.); ); Protection of Wetlands (Executive Order 11990, Mary 24, 1977);
Coastal Management Act (Sections 307 (c) and (d)); Safe Water Driving Act (42 U.S.C. 201,
300(0 and 21U.S.C. 349); Protection of the Environment, Sole Source Aquifers (40 CFR 149);
Endangered Species Act (50 CFR 402); Wild and Scenic Rivers Act (16 U.S.C. 1271 et seq. as
amended, particularly section 7(b) and (c)); Farmland Protection Policy Act (7 CFR 658);
Federal Actions to Address Environmental Justice in Minority Populations and Low Income
Populations (Executive Order 12898, February 11, 1994); Parts of Environmental Review
Procedures for Entities Assuming HUD Environmental Responsibilities: Noise Abatement and
Control (24 CFR 51 B); Explosive and Flammable Operations (24 CFR 51 C); Toxic Chemicals
and Radioactive Materials (24 CFR 58.5(a); Airport Clear zones and Accident Potential Zones
(24 CFR51 D);the State of Texas Senate Bill 1356; Title 8, and Chapter 92 of the Texas Property
Code; Solid Waste Disposal Act TEX. HEALTH & SAFETY CODE Ann. Ch. 361;
Comprehensive Municipal Solid Waste Management, Resource Recovery, and Conservation Act.
TEX. HEALTH & SAFETY CODE Ann. Ch 363; County Solid Waste Control Act. TEX.
HEALTH & SAFETY CODE Ann. Ch 364; Texas Clean Air Act, TEX. HEALTH AND
SAFETY CODE Ann. Ch.; and Hazardous Communication Act, TEXAS HEALTH AND
SAFETY CODE Ann. Ch. 502; and such Governmental Requirements as may be from time to
time amended or superseded and all of their implementing regulations, as may be amended.
1.21 Hazardous Materials. The term "Hazardous Materials" shall mean (a) any
"hazardous waste" as defined by the Resource Conservation and Recovery Act of 1976 (42 U.S.C.
Section 6901 et sue.), as amended from time to time, and regulations promulgated thereunder; (b)
any "hazardous substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et semc .), as amended from time to
time, and regulations promulgated thereunder; (c) asbestos; (d) polychlorinated biphenyls, whether
in the form of electrical transformers, fluorescent light fixtures with ballasts, cooling oils, or any
other device or form; (e) underground storage tanks, whether empty, filled or partially filled with
any substance; (0 any substance the presence of which on a Property is prohibited by any
Governmental Requirements; and (g) any other substance which by any Governmental
Requirements requires special handling or notification of any federal, state or local governmental
entity in its collection, storage, treatment or disposal.
1.22 Hazardous Materials Contamination. The term "Hazardous Materials
Contamination" shall mean any contamination (whether presently existing or hereafter occurring) of
any Improvements, facilities, soil, groundwater, air or other elements on or of a Property by
Hazardous Materials, or the contamination of the buildings, facilities, soil, groundwater, air or other
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elements on or of any other property as a result of Hazardous Materials at any time (whether before
or after the date of this Loan Agreement) emanating from a Property.
1.23 Improvements. The term "Improvements" shall mean the permanent residential
dwelling unit to be constructed or rehabilitated on the Lot(s) or on the vacant land that is currently
designated for residential use.
1.24 Inspecting Architects/Engineers. If applicable, the term "Inspecting
Architects/Engineers" shall mean such employees, representatives and agents of Lender or third
parties, who may, from time to time, conduct inspections of a Property or offer other services
related thereto, when applicable.
1.25 Insurance Policies. The term "Insurance Policies" shall mean:
(a) All -risk builder's risk insurance during the construction of the Improvements and up
to the sale of the Improvements, in an amount equal to 100% of the replacement cost of
Improvements, providing all -risk coverage on the Improvements and materials stored on a Property
and elsewhere, and including the perils of collapse, damage resulting from error in design or faulty
workmanship or materials, water damage and, if requested by Lender, flood, earthquake, business
interruption, permission to occupy, interest costs and other risks;
(b) All -risk insurance after the completion of the construction of the Improvements, as
determined by Lender, in the amount of at least 100% of the replacement cost of such
Improvements or in such additional amounts as Lender may require, providing all -risk coverage in
the Improvements, and, if requested by Lender, to include the perils of flood, earthquake, business
interruption and other risks;
(c) Such other insurance as Lender may reasonably require.
The all -risk insurance policies referred to in this Section may include a reasonable deductible in an
amount approved by Lender.
All Insurance Policies shall be issued on forms and by companies satisfactory to Lender and shall be
delivered to Lender at the address set forth on page one hereof. All -risk Insurance Policies shall
have loss made payable to Lender as mortgagee together with a standard mortgagee clause which
provides Lender with at least fifteen (15) days prior notice of amendment or cancellation.
Commercial General Liability shall have a provision giving Lender at least fifteen (15) days prior
notice of cancellation or material change of the coverage.
1.26 Interim Construction Inspection Report. The term "Interim Construction Report"
shall mean a report (on a form provided and approved by Lender and is currently located on the
Lender's electronic library, under NSP, under "Forms" see:
http: / /www.tdhca .state.tx.us /nsp /forms.htm) and shall be completed by a third party inspector.
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1.27 Lender. The term "Lender" shall mean TEXAS DEPARTMENT OF HOUSING
AND COMMUNITY AFFAIRS, a public and official agency of the State of Texas.
1.28 Loan. The term "Loan" shall mean the loan by Lender to Borrower pursuant to this
Loan Agreement in the amount of $96,110.70, on the terms and conditions set forth in the Note and
other Loan Instruments, from time to time during the period from the date of this Loan Agreement
up to Completion Date.
1.29 Loan Instruments. The term "Loan Instruments" shall mean the Loan Agreement,
the Deed of Trust, Note, Financing Statements, and such other instruments evidencing, securing, or
pertaining to the Loan as shall, from time to time, be executed and delivered by Borrower or any
other party to Lender pursuant to this Loan Agreement.
1.30 Lot(s). The term "Lot(s)" shall mean that certain lot located in Huntsville, Walker
County, Texas, and more particularly described as Being 0.236 of an acre, more or less out of LOT
TWO (2), BLOCK SIXTY -SIX (66), HUNTSVILLE TOWNSITE, P. GRAY LEAGUE, A -24,
Walker County, Texas and being more particularly described by metes and bounds on Exhibit "A"
attached hereto and made a part hereof which has a property address of:
907 Avenue P, Huntsville, Walker County, Texas 77320.
1.31 Neighborhood Stabilization Program. The term shall mean "Neighborhood
Stabilization Program" (NSP) or (Program), as authorized by the (Housing and Economic Recovery
Act of 2008), as an adjunct to the Community Development Block Grant Program. Housing and
Economic Recovery Act of 2008, Pub. L. 110 -289, 112 STAT 2850).
1.32 Neighborhood Stabilization Contract. The term "Neighborhood Stabilization
Contract," hereinafter "NSP Contract" shall mean the contract executed between Office of Rural
Affairs established within the Department of Agriculture, a public and official agency of the
State of Texas, and Contractor (as stated in the NSP Contract) with a unique contract number of
77099999126 and executed to be effective on September 1, 2009, in the original amount of
$1,050,000.00 as assigned and transferred to Lender by Assignment of Contract on August 30,
2011 and as may be amended from time to time.
1.33 Note. The term "Note" shall mean a promissory note in the amount of $96,110.70
of even date herein executed by Borrower payable to Lender.
1.34 Notice of Invalidity of Oral Agreements. The term "Notice of Invalidity of Oral
Agreements" shall mean the notice executed by Borrower on even date herein.
1.35 Plans. The term "Plans" shall mean an initial inspection, work write -up, estimate or
bid, or other work product as stated by Lender, which pertain to said construction of Improvements
prepared or possessed by the Engineer or Architect, if applicable, or others for such Construction
with respect to the residence to be constructed or Rehabilitated by Borrower, approved by Lender,
and all applicable Governmental Authorities. If an Architect or Engineer is included in the
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construction or Rehabilitation, then any and all contracts and agreement, written or oral, between
the Architect or Engineer and the Borrower, shall also be included in the Plans.
1.36 Rehabilitation: The term "Rehabilitation" includes activities as described in 24
CFR Section 570.202(b), but limited to improvement or modification of an existing property
through an alteration, addition, or enhancement including the demolition of an existing
residential property and the reconstruction (rebuilding of a structure on the same site in
substantially the same manner) of residential property.
1.37 Resolution Certificate. The term "Resolution Certificate" shall mean a corporate
resolution in the form attached hereto as Exhibit F.
1.38 Property. The term "Property" shall mean the Lots(s), Improvement, all other
property, personal property or mixed and fixtures constituting the Mortgaged Property as described
in the Deed of Trust.
1.39 Survey. The term "Survey" shall mean a current certified land title survey of the
Lot(s) satisfying the requirements of a Category 1 A Real Property Title Survey (Condition II) as set
forth in the latest edition of the Manual For Practice for Land Surveying in Texas and certified as
such by the surveyor and including such other certificate as Lender may require in a certificate
addressed to Borrower, Lender, and the Title Company, signed by the Surveyor and bearing the
current date and the Surveyor's registration number and seal, and/or a recorded plat or map of the
property, as required by Lender, which plat or map shall be approved and accepted by all
Governmental Authorities having jurisdiction of the property.
1.40 Title Company. The term "Title Company" shall mean the title company, approved
by Lender, issuing the Title Insurance.
1.41 Title Insurance. The term "Title Insurance" shall mean a loan title policy or
policies of insurance or loan title policy binder or binders on interim construction loan, as Lender
may require, in the amount of the Note described in the Deed of Trust, insuring or committing to
insure that such Deed of Trust constitutes a valid first and prior lien and subject only to those
exceptions and encumbrances which Lender may approve, issued by the Title Company.
ARTICLE 2 - ADVANCES OF THE LOAN
2.1 Interest on the Loan. Interest on the Loan, at the rate specified in the Note, shall be
computed on the unpaid principal balance which exists from time to time and shall be computed
with respect to each Advance only from the date of such Advance (as to the portion of each
Advance not constituting a portion of Borrower's Deposit).
2.2 Advances. New construction and reconstruction shall utilize the Draw Schedule
attached in Exhibit B -1 which includes a five (5) draw structure. Advances for the payment of
costs of labor, materials, and services supplied for the construction of the Improvements and the
other items shown in an Approved Budget shall be made by Lender, after actual commencement of
construction of Improvements, for work actually done during the preceding period. Loan proceeds
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advanced by Lender by journal entry to pay interest required to be paid by Borrower pursuant to this
Loan Agreement shall constitute actual Advances to Borrower. From time to time, Borrower shall
submit an Application for Advance to Lender requesting an Advance for the payment of the
acquisition costs of the Lot, the interest on the Loan, the costs of labor, materials, and services
supplied for the construction of Improvements, and the marketing of the Property for sale, in
accordance with and as specified in the Approved Budget. Advances for payment of costs of
construction of Improvements and the other items shown in an Approved Budget shall be limited to
the amounts shown in an Approved Budget and not exceed the aggregate of (a) the costs of labor,
materials, and services incorporated into the Improvements in a manner acceptable to Lender,
including reasonable indirect costs approved by Lender, less (b) all prior Advances for payment of
costs of labor, materials, and services for the construction of the Improvements actually
incorporated into the Improvements. Each Application for Advance shall be submitted by Borrower
to Lender at least ten (10) business days prior to the date on which an Advance is desired by
Borrower (and each statement made in such application must be true and correct at the time the
requested Advance is to be made).
The final Advance for Rehabilitation, new construction, and reconstruction, including all retainage,
will not be made until the date which is thirty-one (31) days after completion of construction and
until the Lender has received the following: (1) an affidavit of completion in a form approved by
the Department and attached as Exhibit D (2) evidence that all Governmental Requirements have
been satisfied, (3) evidence that no mechanic's or materialman's lien or other encumbrance has been
filed and remains in effect against a Property, (4) final lien releases or waivers by Contractor and all
subcontractors, materialman, and other parties who have supplied labor, materials, or services for
the construction of Improvements, or who otherwise might be entitled to claim a contractual,
statutory, or constitutional lien against a Property in a form approved by Department and attached as
Exhibit E and (5) verification that the Title Insurance will be in effect for a minimum of six (6)
months after the final Advance.
2.3 Conditions to the First Advance. As a condition precedent to the first Advance
under the Note, Borrower must submit to Lender not later than fifteen (15) business days prior to
the anticipated date of the first Advance, a fully completed and executed Application for Advance
and must further satisfy the conditions required hereby and execute and deliver to, procure for and
deposit with, and pay to Lender and, if appropriate, record in the proper records with all filing and
recording fees paid, the documents, certificates, and other items that are noted by (x) on Exhibit A-
1 attached hereto, together with such other documents, instruments, and certificates as Lender may
reasonably require.
2.4 Conditions to Subsequent Advances. As a condition precedent to each subsequent
Advance under the Note other than the first Advance, in addition to all other requirements herein,
Borrower must satisfy the following requirements and, if required by Lender, deliver to Lender
evidence of such satisfaction:
(a) All conditions precedent to the first Advance shall have been satisfied;
(b) No Event of Default shall exist;
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(c) A foundation survey, if required by Lender, shall have been furnished to Lender at
final draw, showing no encroachment of the improvements on any boundary line, easement,
building setback line, or other restricted area;
(d) The representations and warranties made in this Loan Agreement shall be true and
correct on and as of the date of each Advance, with the same effect as if made on that date;
(e) Borrower will procure and deliver to Lender, if required by Lender, releases or
waivers of mechanics' liens and receipted bills showing payment of all parties who have furnished
materials or services or performed labor of any kind in connection with the construction of any of
the Improvements; and
(f) The Title Insurance shall be in effect.
2.5 Reallocation of Approved Budget. Lender reserves the right to make Advances
which are allocated to any of the designated items in an Approved Budget for such other
purposes or in such different proportions as Lender may, in its sole discretion, deem necessary
or advisable. Borrower may not reallocate items of cost or change an Approved Budget without
the prior written consent of Lender.
2.6 No Waiver. No Advance shall constitute a waiver of any condition precedent to the
obligation of Lender to make any further Advance or preclude Lender from thereafter declaring the
failure of Borrower to satisfy such condition precedent to be an Event of Default.
2.7 Conditions Precedent for the Benefit of Lender. All conditions precedent to the
obligation of Lender to make any Advance are imposed hereby solely for the benefit of Lender, and
no other party may require satisfaction of any such condition precedent or be entitled to assume that
Lender will refuse to make any Advance in the absence of strict compliance with such conditions
precedent. All requirements of this Loan Agreement may be waived by Lender, in whole or in part,
at any time.
2.8 Subordination. Lender shall not be obligated to make, nor shall Borrower be entitled
to, any Advance until such time as Lender shall have received, to the extent requested by Lender,
subordination agreements from Architect when applicable, Contractor, when applicable, and all
other persons furnishing labor, materials, or services for the design or construction of
Improvements, subordinating to the provisions of a Deed of Trust any lien, claim, or charge they
may have against Borrower or a Property.
2.9 Title Insurance. If any of the Title Insurance consists of Loan Title Policy Binders
on Interim Construction Loan, after expiration of the time periods specified in Section 2.2,
Borrower will replace such binders with a Loan Policy (or Policies) of Title Insurance, endorsed and
extended to cover the construction costs and acknowledge completion of construction of
Improvements without any encroachment and in compliance with all applicable matters of public
record and Governmental Requirements, with no additional exception objectionable to Lender.
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ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower hereby represents and warrants as of the date of each Advance as follows:
3.1 Financial Statements. The Financial Statements are true, correct, and complete as of
the dates specified therein and fully and accurately present the financial condition of Borrower as of
the dates specified. No material adverse change has occurred in the financial condition of Borrower
since the dates of the Financial Statements.
3.2 Suits, Actions, Etc. There are no material actions, suits, or proceedings pending or
to the knowledge of Borrower threatened in any court or before or by any Governmental Authority
against or affecting Borrower or the Property herein described, or involving the validity,
enforceability, or priority of any of the Loan Instruments, at law or in equity. The consummation of
the transactions contemplated hereby, and the performance of any of the terms and conditions
hereof and of the other Loan Instruments, will not result in a breach of, or constitute a default in,
any mortgage, deed of trust, lease, promissory note, loan agreement, credit agreement, partnership
agreement, or other agreement to which Borrower is a party or by which Borrower may be bound or
affected. Borrower is not in default of any order of any court or any requirement of any
Governmental Authority.
3.3 Valid and Binding Obligation. All of the Loan Instruments, and all other documents
referred to herein to which Borrower is a party, upon execution and delivery will constitute valid
and binding obligations of Borrower, enforceable in accordance with their terms except as limited
by Debtor Relief Laws.
3.4 Title to the Property. Borrower holds full legal and equitable title to the Property
herein described, subject only to title exceptions set forth in the Title Insurance.
3.5 Commencement of Construction. Prior to the recordation of the Deed of Trust
covering the Property herein described, no work of any kind that would give rise to a lien having
priority over the Deed of Trust (including the destruction or removal of any existing improvements,
site work, clearing, grubbing, draining, or fencing of the Property herein described in such Deed of
Trust), shall have commenced or shall have been performed on such Property, no equipment or
material shall have been delivered to or upon such Property for any purpose whatsoever, and no
contract (or memorandum or affidavit thereof) for the supplying of labor, materials, or services for
the construction of the Improvements shall have been recorded in the mechanic's lien or other
appropriate records in the county where such Property is located.
3.6 Disclosure. There is no fact that Borrower has not disclosed to Lender in writing
that could materially adversely affect the property, business or financial condition of Borrower or
the Property herein described.
3.7 Compliance with Environmental Requirements; No Hazardous Materials.
To the best of Borrowers knowledge:
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(a) No Hazardous Materials are located on the Property herein described, released into
the environment, or deposited, discharged, placed or disposed of at, on, under or near such Property.
No portion of the Property herein described is being used or, to the knowledge of Borrower, has
been used at any previous time for the disposal, storage, treatment, processing or other handling of
Hazardous Materials nor is the Property affected by any Hazardous Materials Contamination.
(b) No Hazardous Materials are located in the vicinity of the Property herein described.
No property adjoining the Property herein described is being used, or has ever been used at any
previous time, for the disposal, storage, treatment, processing or other handling of Hazardous
Materials. No property adjoining the Property herein described is affected by Hazardous Materials
Contamination.
(c) No investigation, administrative order, consent order, agreement, litigation or
settlement with respect to Hazardous Materials or Hazardous Materials Contamination is proposed,
threatened, anticipated or in existence with respect to the Property herein described. The Property
herein described and its existing and prior uses comply and at all times have complied with any
applicable Governmental Requirements relating to environmental matters or Hazardous Materials.
There is no condition on the Property herein described which is in violation of any applicable
Governmental Requirements relating to Hazardous Materials, and Borrower has received no
communication from or on behalf of any Governmental Authority that any such condition exists.
The Property herein described is not currently on and, to Borrower's knowledge after diligent
investigation and inquiry, has never been on any federal or state "Superfund" or "Superlien" list.
(d) No asbestos or asbestos - containing materials have been installed, used, incorporated
into, or disposed of on the Property herein described.
(e) No polychlorinated biphenyls or materials containing polychlorinated biphenyls are
located on or in the Property herein described, in the form of electrical transformers, fluorescent
light fixtures with ballasts, cooling oils, or any other device or form.
(f) No underground storage tanks are located on the Property or, to the best of
Borrower's knowledge, were previously located on the Property herein described and subsequently
removed or filled.
(g) Except for studies, audits, and reports pertaining to the Property, if any, which have
been made available to Lender, there have been no environmental investigations, studies, audits,
tests, reviews or other analyses conducted by or which are in the possession of Borrower or
available to Borrower in relation to the Property herein described.
(h) All representations and warranties contained in this Section 3.7 shall survive the
consummation of the transactions contemplated in this Loan Agreement.
3.8 System Compliance. To the best of Borrower's knowledge, after due inquiry, the
storm and sanitary sewer system, water system, all mechanical systems of the Property herein
described and other parts of the Improvements do (or when constructed will) comply with all
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applicable environmental, pollution control and ecological laws, ordinances, rules and regulations,
and all Governmental Authorities having jurisdiction of the Property herein described have issued
all necessary permits, licenses or other authorizations for the construction, occupancy, operation,
and use of the Improvements (specifically including the named systems).
3.9 Utility Availability. Subject only to payment of fees to be paid from an Approved
Budget, all utility and municipal services required for the construction, occupancy and operation of
the Improvements, including, but not limited to, water supply, storm and sanitary sewer systems,
gas, electric and telephone facilities, are available for use and tap -on at the boundaries of the
Property herein described and will be available in sufficient amounts for the normal and intended
use of the Improvements, and written permission has been or will be obtained from the applicable
utility companies or municipalities to connect the Improvements into each of said services.
3.10 Interstate Land Sales Full Disclosure Act. Borrower's development of the Property
herein described and the sale or lease of such Property by Borrower are exempt from the registration
and reporting requirements of the Interstate Land Sales Full Disclosure Act, 15 U.S.C. § 1701, et
seq., and the regulations promulgate thereunder. Any sale of the Property herein described by
Borrower shall be in full compliance with the Interstate Land Sales Full Disclosure Act and the
regulations promulgated thereunder.
3.11 Inducement to Lender. The representations and warranties contained in the Loan
Instruments are made by Borrower as an inducement to Lender to make a Loan and Borrower
understands that Lender is relying on such representations and warranties and that such
representations and warranties shall survive any (a) bankruptcy proceedings involving Borrower or
the Property herein described, or (b) foreclosure of the Deed of Trust or (c) conveyance of title to
such Property in lieu of foreclosure of the Deed of Trust. Acceptance of each Advance constitutes
reaffirmation, as of the date of such acceptance, of the representations and warranties of Borrower
in the Loan Instruments, on which Lender shall rely in making such Advance.
3.12 NPDES Permit. If applicable, Borrower has timely obtained a National Pollutant
Discharge Elimination System Permit ( "NPDES Permit ") or has filed a Notice of Intent to be
covered by an applicable NPDES Permit in connection with the Property herein described and has
otherwise complied with all filing and other applicable requirements of the Water Quality Act of
1987 (33 U.S.C. § 1251 et se g.) (the "Water Quality Act ") and regulations promulgated thereunder.
ARTICLE 4 - COVENANTS AND AGREEMENTS OF BORROWER
Borrower hereby covenants and agrees as follows:
4.1 Compliance with Governmental Requirements. Borrower shall timely comply with
all Governmental Requirements and deliver to Lender evidence thereof. Borrower assumes full
responsibility for the compliance of the Plans and the Property with all Governmental Requirements
and with sound building and engineering practices, and, notwithstanding any approvals by Lender,
Lender shall have no obligation or responsibility whatsoever for the Plans or any other matter
incident to the Property or the construction of Improvements. Immediately upon Borrower's receipt
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of any notice from a Governmental Authority of noncompliance with any Governmental
Requirements, Borrower shall provide Lender with written notice thereof.
Any Rehabilitation of a foreclosed upon home or residential property under NSP shall be to the
extent necessary to comply with applicable, laws, codes, and other requirements related to
housing safety, quality, and habitability, in order to sell, rent, or redevelop such homes and
properties. Rehabilitation may include improvements to increase the energy efficiency or
conservation of such homes and properties or provide a renewable energy source or sources for
such homes and properties. (Housing and Economic Recovery Act Section 2301 (d)(2) of 2008.)
The eligibility of renewable energy equipment on existing structures shall be determined by the
Beneficiary.
Housing that is constructed or Rehabilitated with NSP funds must meet all applicable local
codes, rehabilitation standards, ordinances, and zoning ordinances at the time of completion. In
the absence of a local code for new construction or Rehabilitation, the housing must meet the
most current International Building Code. In addition, all NSP funded housing must meet the
Texas Minimum Construction Standards, as published in the Texas NSP Program Guidelines.
NSP assisted new construction or Rehabilitation will comply with HUD Program lead -based
paint requirements including lead screening in housing built before 1978 in accordance with 24
CFR Part 92.355 and 24 CFR Part 35, subparts A, B, J, K, M, and R. Multifamily housing
assisted with NSP funds must meet the accessibility requirements at 24 CFR part 8, which
implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. Section 794) and covered
multifamily dwellings, as defined at 24 CFR 100.201, and the design and construction
requirements at 24 CFR 100.205, which implement the Fair Housing Act (42 U.S.C. 3601 - 3619).
Finally, NSP assisted housing must meet Energy Efficiency Standards in accordance with
Section 2306.187 of the Texas Government Code. Section 2306.514 of the Texas Government
Code must be applied when single family homes are to be constructed.
4.2 Construction of the Improvements. On or after the Commencement Date as herein
defined, Borrower shall commence construction of the Improvements herein described and the
construction of the Improvements shall be prosecuted with diligence and continuity, in a good and
workmanlike manner, and in accordance with sound building and engineering practices, all
applicable Governmental Requirements as described in Section 4.1 above and the Plans.
4.3 Correction of Defects. Borrower, at its cost, shall correct or cause to be corrected (a)
any material defect in the Improvements, (b) any material departure in the construction of the
Improvements from the Plans or Governmental Requirements, or (c) any encroachment by any part
of the Improvements, or any structure located on the Property, on any easement, property line, or
restricted area, or any encroachment by any such structure on any building line.
4.4 Storage of Materials. Borrower shall cause all materials supplied for, or intended to
be utilized in, the construction of the Improvements, but not affixed to or incorporated into the
Improvements or the Property, to be stored on the Property or at such other location as may be
approved by Lender in writing, with adequate safeguards, as required by Lender, to prevent loss,
theft, damage, or commingling with other materials or projects.
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4.5 Inspection of the Property. Borrower shall permit Lender, any Governmental
Authority, and their agents and representatives to enter upon the Property and any location where
materials intended to be utilized in the construction of the Improvements are stored, for the purpose
of inspection of the Property and such materials at all reasonable times.
4.6 Notices by Governmental Authority, Casualty, Condemnation. Borrower shall
timely comply with and promptly furnish to Lender true and complete copies of any notice or claim
by any Governmental Authority pertaining to a Property. Borrower shall promptly notify Lender of
any fire or other casualty or any notice of taking or eminent domain action or proceeding affecting a
Property, or the threat of any such action or proceeding of which Borrower becomes aware.
4.7 Special Account. If requested by Lender, Borrower shall maintain a special account
at a bank or savings and loan association selected by Borrower and reasonably satisfactory to
Lender, into which all Advances (but no other funds), and excluding direct disbursements made by
Lender pursuant to Section 4.9 hereof, shall be deposited by Borrower, and against which checks
shall be drawn only for the payment of (a) costs of labor, materials, and services supplied for the
construction of the Improvements specified in each Approved Budget and (b) other costs and
expenses incident to the Loan and the construction of the Improvements specified in an Approved
Budget.
4.8 Application of Advances. Borrower shall disburse all Advances for payment of
costs and expenses specified in an Approved Budget, and for no other purpose.
4.9 Direct Disbursement and Application by Lender. Lender shall have the right, but
not the obligation, to disburse and directly apply the proceeds of any Advance to the satisfaction of
any of Borrower's obligations hereunder or under any of the other Loan Instruments. Any Advance
by Lender for such purpose, except Borrower's Deposit, shall be part of a Loan and shall be secured
by the Loan Instruments. Borrower hereby authorizes Lender to hold, use, disburse, and apply a
Loan and the Borrower's Deposit for payment of costs of construction of the Improvements,
expenses incident to a Loan and the Property, and the payment or performance of any obligation of
Borrower hereunder or under any of the other Loan Instruments. Borrower hereby assigns and
pledges the proceeds of each Loan and the Borrower's Deposit to Lender for such purposes. Lender
may advance and incur such expenses as Lender deems necessary for the completion of
construction of the Improvements and to preserve a Property, and any other security for a Loan, and
such expenses, even though in excess of the amount of a Loan, shall be secured by the Loan
Instruments and payable to Lender. Lender may disburse any portion of any Advance at any time,
and from time to time, to persons other than Borrower for the purposes specified in this Section 4.9
irrespective of the provisions of Section 2.3 hereof, and the amount of Advances to which Borrower
shall thereafter be entitled shall be correspondingly reduced.
4.10 Costs and Expenses. Borrower shall pay when due all costs and expenses required
by this Loan Agreement, including, without limitation, (a) all taxes and assessments applicable to
each Property, (b) all fees for filing or recording the Loan Instruments, (c) all fees and commissions
lawfully due to brokers, salesmen, and agents in connection with a Loan, or a Property, (d) all fees
and expenses of counsel to Lender, (e) all title insurance and title examination charges, including
premiums for the Title Insurance, (0 all survey costs and expenses, including cost of a Survey, (g)
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all premiums for Insurance Policies, and (h) all other costs and expenses payable to third parties
incurred by Lender in connection with the consummation of the transactions contemplated by this
Loan Agreement.
4.11 Additional Documents. Borrower shall execute and deliver to Lender, from time to
time as requested by Lender, such other documents as shall reasonably be necessary to provide the
rights and remedies to Lender granted or provided for by the Loan Instruments.
4.12 Inspection of Books and Records. Borrower shall permit Lender to examine and
copy the books and records of Borrower pertaining to a Loan and a Property, and all contracts,
statements, invoices, bills and claims for labor, materials, and services supplied for the construction
of the Improvements.
4.13 No Liability of Lender. Lender shall have no liability, obligation, or responsibility
whatsoever with respect to the construction of Improvements except to advance the Loan and the
Borrower's Deposit pursuant to this Loan Agreement. Lender shall not be obligated to inspect a
Property or the construction of Improvements, nor be liable or responsible for any defect in a
Property or Improvements by reason of inspecting same, nor be liable for the performance or default
of Borrower, the Inspecting Engineers, Architects, when applicable, General Contractor, when
applicable, Contractor, or any other party, or for any failure to construct, complete, protect or insure
Improvements, or for the payment of costs of labor, materials, or services supplied for the
construction of the Improvements, or for the performance of any obligation of Borrower
whatsoever. Nothing, including without limitation any Advance or acceptance of any document or
instrument, shall be construed as a representation or warranty, express or implied, to any party by
Lender.
4.14 No Conditional Sale Contracts. Without the prior written consent of Lender, no
materials, equipment, or fixtures shall be supplied, purchased, or installed for the construction or
operation of Improvements pursuant to security agreements, conditional sale contracts, lease
agreements, or other arrangements or understandings whereby a security interest or title is retained
by any party or the right is reserved or accrues to any party to remove or repossess any materials,
equipment, or fixtures intended to be utilized in the construction or operation of the Improvements.
4.15 Defense of Actions. Lender may (but shall not be obligated to) commence, appear
in, or defend any action or proceeding purporting to affect a Loan, a Property, or the respective
rights and obligations of Lender and Borrower pursuant to this Loan Agreement. Lender may (but
shall not be obligated to) pay all necessary expenses, including attorneys' fees and expenses
incurred in connection with such proceedings or actions, which Borrower agrees to repay to Lender
upon demand.
4.16 Prohibition on Assignment of Borrower's Interest. Borrower shall not assign or
encumber any interest of Borrower hereunder without the prior written consent of Lender.
4.17 Payment of Claims. Borrower shall promptly pay or cause to be paid when due all
costs and expenses incurred in connection with each Property and the construction of Improvements
thereon, and Borrower shall keep each Property free and clear of any lien, charge, or claim other
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than the encumbrances of the Deed of Trust covering such Property and other liens approved in
writing by Lender. Notwithstanding anything to the contrary contained in this Loan Agreement,
Borrower (a) may contest the validity or amount of any claim of any contractor, consultant,
architect, or other person providing labor, materials, or services with respect to a Property, (b) may
contest any tax or special assessments levied by any Governmental Authority, and (c) may contest
the enforcement of or compliance with any Governmental Requirements, and such contest on the
part of Borrower shall not be a default hereunder and shall not release Lender from its obligations to
make Advances hereunder; provided, however, that during the pendency of any such contest
Borrower shall furnish to Lender and Title Company an indemnity bond with corporate surety
satisfactory to Lender and Title Company or other security acceptable to them in an amount equal to
the amount being contested plus a reasonable additional sum to cover possible costs, interest, and
penalties, and provided further that Borrower shall pay any amount adjudged by a court of
competent jurisdiction to be due, with all costs, interest, and penalties thereon, before such judgment
becomes a lien on such Property.
4.18 Restrictions and Annexation. Borrower shall not impose any restrictive covenants,
easements or other encumbrances upon a Property, execute or file any subdivision plat affecting a
Property, or consent to the annexation of a Property to any city without the prior written consent of
Lender.
4.19 Tax Receipts. Subject to the provisions of Section 4.18 hereof, Borrower shall
furnish Lender with receipts or tax statements marked "Paid" or, if required by Lender, copies of tax
statements accompanied by copies of Borrower's checks issued in payment of such taxes to
evidence the payment of all taxes levied on the Property on or before the date such taxes become
delinquent.
4.20 Reporting by Borrower - NSP Subrecipient Activity Report. Until all NSP
obligation requirements are met, the NSP Subrecipient Activity Report shall be submitted
monthly. Thereafter, the NSP Subrecipient Activity Report shall be submitted quarterly. The
Beneficiary shall determine whether all NSP obligation requirements have been met and may
amend this rule from time to time or as needed.
4.21 Notice of Litigation, Claims, and Financial Change. Borrower shall promptly
inform Lender of (a) any litigation against Borrower or affecting a Property, which, if determined
adversely, might have a material adverse effect upon the financial condition of Borrower or upon
such Property, or might cause an Event of Default, (b) any claim or controversy which might
become the subject of such litigation, and (c) any material adverse change in the financial condition
of Borrower.
4.22 Hold Harmless. Borrower shall defend, at its own cost and expense, and hold
Lender harmless from, any proceeding or claim in any way relating to a Property or Loan
Instruments executed in connection with a Loan. All costs and expenses incurred by Lender in
protecting its interests hereunder, including all court costs and attorneys' fees and expenses, shall be
borne by Borrower. The provisions of this Section shall survive the payment in full of each Loan
and all other indebtedness secured by each Deed of Trust and the release of such Deed of Trust as to
events occurring and causes of action arising before such payment and release.
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4.23 Hazardous Materials; Indemnification.
(a) Borrower agrees (i) that Borrower shall not receive, store, dispose or release any
Hazardous Materials on or to a Property or transport any Hazardous Materials, to or from a Property
or permit the existence of any Hazardous Materials Contamination; (ii) to give written notice to
Lender immediately upon Borrower's acquiring knowledge of the presence of any Hazardous
Materials on a Property or of the transport of any Hazardous Materials to or from a Property or the
existence of any Hazardous Materials Contamination, with a full description thereof; (iii) to
promptly, at Borrower's sole cost and expense, comply with any Governmental Requirements
requiring the removal, treatment or disposal of such Hazardous Materials or Hazardous Materials
Contamination and provide Lender with satisfactory evidence of such compliance; (iv) to provide
Lender, within thirty (30) days after demand by Lender, with a bond, letter of credit or similar
financial assurance evidencing to Lender's satisfaction that the necessary funds are available to pay
the cost of removing, treating and disposing of such Hazardous Materials or Hazardous Materials
Contamination and discharging any assessments which may be established on a Property as a result
thereof; and (v) to insure that all leases, licenses, and agreements of any kind now or hereafter
executed which permit any party to occupy, possess or use in any way a Property or any part
thereof, whether written or oral, include an express prohibition on the disposal or discharge of any
Hazardous Materials at or affecting a Property, and a provision that failure to comply with such
prohibition shall expressly constitute a default under any such agreement.
(b) Borrower shall not cause or suffer any liens to be recorded against a Property as a
consequence of, or in any way related to, the presence, remediation or disposal of Hazardous
Materials in or about such Property, including any state, federal or local so -called "Superfund" lien
relating to such matters.
(c) Borrower shall at all times retain any and all liabilities arising from the presence,
handling, treatment, storage, transportation, removal or disposal of Hazardous Materials on a
Property. Regardless of whether any Event of Default shall have occurred and be continuing or any
remedies in respect of a Property are exercised by Lender, Borrower shall to the extent authorized
by law and subject to funds legally available for the purpose defend, indemnify and hold harmless
Lender and any trustee named in the Deed of Trust covering such Property (and any successor to
such trustee) from and against any and all liabilities (including strict liability), suits, actions, claims,
demands, penalties, damages (including, without limitation, lost profits, consequential damages,
interest, penalties, fines and monetary sanctions), losses, costs and expenses (including, without
limitation, attorneys' fees and expenses, and remedial costs) (the foregoing are hereinafter
collectively referred to as "Liabilities ") which may now or in the future (whether before or after the
culmination of the transactions contemplated by this Loan Agreement) be incurred or suffered by
Lender or the trustee named in the Deed of Trust (or any successor to such trustee) by reason of,
resulting from, in connection with or arising in any manner whatsoever out of the breach of any
warranty or covenant or the inaccuracy of any representation of Borrower contained or referred to in
this Section or Section 3.7 of this Loan Agreement and the Deed of Trust or which may be asserted
as a direct or indirect result of the presence on or under, or escape, seepage, leakage, spillage,
discharge, emission, or release from a Property of any Hazardous Materials or any Hazardous
Materials Contamination or arise out of or result from the environmental condition of the Property
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or the applicability of any Governmental Requirements relating to Hazardous Materials, whether or
not occasioned wholly or in part by any condition, accident of event caused by Borrower. Such
Liabilities shall include, without limitation: (i) injury or death to any person; (ii) damage to or loss
of the use of any property; (iii) the cost of any demolition and rebuilding of any improvements now
or hereafter situated on the Property or adjacent property, and the cost of repair or remediation of
any such improvements; (iv) any lawsuit brought, good faith settlement reached, or governmental
order relating to the presence, disposal, release or threatened release of any Hazardous Materials on,
from or under the Property; (v) the imposition of any lien on the Property arising from the activity
of Borrower or Borrower's predecessors in interest on the Property or from the existence of
Hazardous Materials or Hazardous Materials Contamination upon the Property; and (vi) the cost of
any activity required by an Governmental Authority.
(d) The covenants and agreements contained in this Section shall survive the
consummation of the transactions contemplated by this Loan Agreement.
4.24 Notice to Proceed. Borrower must receive a Notice to Proceed from Lender prior to
the start of any construction activities and/or prior to disbursements of funding for Eligible Costs.
Texas Neighborhood Stabilization Program ( "NSP ") developments with eight (8) or more units are
required to meet Davis Bacon Prevailing Wage Regulations and submit required documents prior to
the issuance of the Notice to Proceed. At a minimum, a Labor Standard Officer (TDHCA Form
6.02) must be submitted to Lender to receive authorization for acquisition disbursement. If
construction of Improvements will begin within ten (10) days from the date hereof, Borrower must
have complied with the Lender's established Notice to Proceed policy and procedures prior to the
execution of this Agreement.
4.25 Lead -Based Paint. Borrower shall ensure that the Lot(s) and Improvements meet
the lead -based paint requirements set forth in 24 CFR Part 35 Subparts A, B, J, K, M, and R, as
applicable.
4.26 Accessibility. Borrower shall ensure that the Improvements meet the accessibility
requirements applicable to the Lot(s) and Improvements set forth in 24 CFR Part 8, which
implements Section 504 of the Rehabilitation Act of 1973 (29 USC Section 794), and the design
and construction requirements set forth in 24 CFR Section 100.205, which implements the Fair
Housing Act (42 USC Sections 3601 - 3619).
4.27 Federal Drug Free Workplace Act. Borrower shall comply with the Federal Drug
Free Workplace Act of 1988 and the regulations promulgated thereunder including, without
limitation, 54 CFR Part 4956.
4.28 Non - procurement, Debarment and Suspension. Borrower shall comply with non-
procurement, debarment and suspension standards set forth in 2 CFR Part 180, Subpart C, as
required by 2 CFR Part 2424 and shall not employ, award a contract to, or fund any person that
has been debarred, suspended, proposed for debarment or placed on ineligibility status by HUD
or the Department. Borrower shall post any notice of procurement and job opportunities related
to this Agreement on the Department's website on the workintexas.com website.
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4.29 National Flood Protection Act. The Lot(s) and Improvements will be constructed
in compliance with elevation requirements that meet or exceed those in the QAP, the National Flood
Protection Act, HUD 24 CFR Part 55, and any local requirements.
4.30 Byrd Amendment: Prohibition for Influencing Federal Entities. To the best of
Borrower's knowledge, Borrower has complied with all restrictions, certifications and disclosure
requirements contained in the Byrd amendment to the fiscal 1990 appropriations measures for
the United States Department of the Interior (P.L. 101 -121) and any guidelines and rules issued
by any federal entity in connection therewith, if applicable.
ARTICLE 5 - RIGHTS AND REMEDIES OF LENDER
5.1 Rights of Lender. Upon the occurrence of an Event of Default, Lender shall have
the right, in addition to any other right or remedy of Lender, but not the obligation, in its own name
or in the name of Borrower, to enter into possession of each Property; to perform all work necessary
to complete the construction of Improvements substantially in accordance with the Plans and
Governmental Requirements; and to employ watchmen and other safeguards to protect such
Property. To the extent authorized by law, Borrower hereby appoints Lender as the attorney -in -fact
of Borrower, with full power of substitution, and in the name of Borrower, if Lender elects to do so,
upon the occurrence of an Event of Default, to (a) use such sums as are necessary, including any
proceeds of the Loan and the Borrower's Deposit, make such changes or corrections in the Plans,
and employ such architects, engineers, and contractors as may be required for the purpose of
completing the construction of the Improvements substantially in accordance with the Plans and
Governmental Requirements, (b) execute all applications and certificates on Borrower's behalf
which may be required for completion of construction of the Improvements, (c) do every act with
respect to the construction of the Improvements which Borrower may do, and (d) prosecute or
defend any action or proceeding incident to the Property. The power of attorney granted hereby is a
power coupled with an interest and irrevocable. Lender shall have no obligation to undertake any of
the foregoing actions, and, if Lender should do so, it shall have no liability to Borrower for the
sufficiency or adequacy of any such actions taken by Lender.
5.2 Cessation of Advances. Upon the occurrence of an Event of Default, the obligation
of Lender to disburse the Loan and the Borrower's Deposit and all other obligations of Lender
hereunder shall, at Lender's option, immediately terminate, unless and until reinstated by Lender in
writing.
5.3 Acceleration. Upon the occurrence of an Event of Default, Lender may, at its
option, declare the Loan immediately due and payable without notice of any kind (unless notice is
required by applicable law).
5.4 Funds of Lender. Any funds of Lender used for any purpose referred to in this
Article 5 shall constitute Advances secured by the Loan Instruments and shall bear interest at the
rate specified in the Note executed in connection with the Loan for which funds are used to be
applicable after default thereunder.
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5.5 No Waiver or Exhaustion. No waiver by Lender of any of its rights or remedies
hereunder, in the other Loan Instruments, or otherwise, shall be considered a waiver of any other or
subsequent right or remedy of Lender; no delay or omission in the exercise or enforcement by
Lender of any rights or remedies shall ever be construed as a waiver of any right or remedy of
Lender; and no exercise or enforcement of any such rights or remedies shall ever be held to exhaust
any right or remedy of Lender.
5.6 Role of Lender. Any term or condition hereof, or of any of the Loan Instruments to
the contrary notwithstanding, Lender shall not have, and by its execution and acceptance of this
Loan Agreement hereby expressly disclaims, any obligation or responsibility for the management,
conduct or operation of the business and affairs of Borrower, and any term or condition hereof, or of
any of the Loan Instruments, permitting Lender to disburse funds, whether from the proceeds of the
Loan, the Borrower's Deposit, or otherwise, or to take or refrain from taking any action with respect
to the Borrower, the Property or any other collateral for repayment of the Loan, shall deem to be
solely to permit Lender to audit and review the management, operation and conduct of the business
and affairs of Borrower, and to maintain and preserve the security given by Borrower to Lender for
each Loan and may not be relied upon by any other person. Further, Lender shall not have, has not
assumed and by its execution and acceptance of this Loan Agreement hereby expressly disclaims
any liability or responsibility for the payment or performance of any indebtedness or obligation of
Borrower, and no term or condition hereof, or of any of the Loan Instruments, shall be construed
otherwise.
Borrower hereby expressly acknowledges that no term or condition hereof, or of any of the
Loan Documents, shall be construed so as to deem the relationship between Borrower and Lender to
be other than that of Borrower and Lender, and Borrower shall at all times represent that the
relationship between Borrower and Lender is solely that of Borrower and Lender. Borrower hereby
indemnifies and agrees to hold Lender harmless from and against any cost, expense or liability
incurred or suffered by Lender as a result of any assertion or claim of any obligation or
responsibility of Lender for the management, operation and conduct of the business and affairs of
Borrower or as a result of any assertion or claim of any liability or responsibility of Lender for the
payment or performance of any indebtedness or obligation of Borrower.
ARTICLE 6 - GENERAL TERMS AND CONDITIONS
6.1 Notices. All notices, demands, requests, approvals and other communications
required or permitted hereunder shall be in writing and shall be deemed to have been given when
deposited in a regularly maintained mail receptacle of the United States Postal Service, postage
prepaid, certified, retum receipt requested, addressed to Borrower or Lender, as the case may be, at
the respective addresses set forth on the first page of this Loan Agreement, or such other address as
Borrower or Lender may from time to time designate by written notice to the other as herein
required. Notice given in any other manner shall be deemed effective only if and when received by
the party notified.
6.2 Entire Agreement and Modifications. The Loan Instruments constitute the entire
understanding and agreement between the undersigned with respect to the transactions arising in
connection with each Loan and supersede all prior written or oral understandings and agreements
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between the undersigned in connection therewith. No provision of this Loan Agreement or the
other Loan Instruments may be modified, waived, or terminated except by instrument in writing
executed by the party against whom a modification, waiver, or termination is sought to be enforced.
6.3 Severability. In case any of the provisions of this Loan Agreement shall for any
reason be held to be invalid, illegal, or unenforceable, such invalidity, illegality, or unenforceability
shall not affect any other provision hereof, and this Loan Agreement shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained herein.
6.4 Election of Remedies. Lender shall have all of the rights and remedies granted in
the Loan Instruments and available at law or in equity, and these same rights and remedies shall be
cumulative and may be pursued separately, successively, or concurrently against Borrower or the
Property or any part thereof, at the sole discretion of Lender. The exercise or failure to exercise any
of the same shall not constitute a waiver or release thereof or of any other right or remedy, and the
same shall be nonexclusive.
6.5 Form and Substance. All documents, certificates, insurance policies, and other items
required under this Loan Agreement to be executed and/or delivered to Lender shall be in form and
substance satisfactory to Lender.
6.6 Limitation on Interest. All agreements between Borrower and Lender, whether now
existing or hereafter arising and whether written or oral, are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of acceleration of the maturity of the Loan , or
otherwise, shall the amount paid, or agreed to be paid to Lender for the use, forbearance, or
detention of the money to be loaned hereunder or otherwise or for the payment or performance of
any covenant or obligation contained herein or in any Note, Deed of Trust or in any other Loan
Instruments, exceed the maximum amount permissible under applicable law. If from any
circumstance whatsoever, fulfillment of any provision hereof or of any such Note, Deed of Trust or
other Loan Instruments, at the time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by applicable law, then ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if from any circumstance the Lender shall
ever receive as interest or otherwise an amount which would exceed the highest lawful rate, such
amount which would be excessive interest shall be applied to the reduction of the principal amount
owing on account of the Loan or on account of any other principal indebtedness of the Borrower to
the Lender, and not to the payment of interest, or if such excessive interest exceeds the unpaid
balance of principal hereof and such other indebtedness, such excess shall be refunded to the
Borrower. All sums paid or agreed to be paid to the Lender for the use, forbearance or detention of
the indebtedness of the Borrower to the Lender shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of such indebtedness until
payment in full so that the actual rate of interest on account of such indebtedness is uniform
throughout the term thereof. The term "applicable law" as used herein means (1) the law pertaining
to maximum rates of interest that is now in effect and (2) any law that comes into effect at any time
in the future allowing a higher maximum interest rate than the law now in effect. The terms and
provisions of this Section will control and supersede every other provision of all agreements
between Borrower and Lender.
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6.7 No Third Party Beneficiary. This Loan Agreement is for the sole benefit of Lender
and Borrower and is not for the benefit of any third party.
6.8 Borrower in Control. In no event shall Lender's rights and interests under the Loan
Instruments be construed to give Lender the right to, or be deemed to indicate that Lender is in
control of the business, management or property of Borrower or has power over the daily
management functions and operating decisions made by Borrower.
6.9 Number and Gender. Whenever used herein, the singular number shall include the
plural and the plural the singular, and the use of any gender shall be applicable to all genders. The
duties, covenants, obligations, and warranties of Borrower in this Loan Agreement shall be joint and
several obligations of Borrower and of each Borrower if more than one.
6.10 Captions. The captions, headings, and arrangements used in this Loan Agreement
are for convenience only and do not in any way affect, limit, amplify, or modify the terms and
provisions hereof.
6.11 Applicable Law. This loan agreement and the loan instruments shall be governed by
and construed in accordance with the laws of the State of Texas and the laws of the United States
applicable to transactions within such state.
6.12 INDEMNITY. TO THE EXTENT AUTHORIZED BY LAW, AND SUBJECT TO
FUNDS LEGALLY AVAILABLE FOR THAT PURPOSE, BORROWER HEREBY
EXPRESSLY ACKNOWLEDGES AND RECOGNIZES ITS RESPONSIBILITY FOR AND
AGREES TO INDEMNIFY AND HOLD LENDER AND ITS SUCCESSORS AND ASSIGNS
ABSOLUTELY HARMLESS FROM AND AGAINST ALL COSTS, EXPENSES, LIABILITIES,
LOSS, DAMAGE OR OBLIGATIONS INCURRED BY OR IMPOSED UPON LENDER OR ITS
SUCCESSORS AND_ ASSIGNS IN CONNECTION WITH THE ASSERTION OF (A) ANY
CLAIM FOR BROKERAGE, AGENCY OR FINDER'S FEES FOR COMMISSIONS IN
CONNECTION WITH THE LOAN; OR (B) ANY CLAIM FOR ATTORNEYS', APPRAISAL,
TITLE INSURANCE, INSPECTION OR OTHER FEES, COSTS AND EXPENSES INCURRED
IN CONNECTION WITH THE NEGOTIATION, CLOSING, ADMINISTRATION,
COLLECTION OR REFINANCING OF THE LOAN, WHICH ARISE BY, THROUGH OR ON
BEHALF OF THE BORROWER OR ANY AGENT OR REPRESENTATIVE OF BORROWER.
WITHOUT INTENDING TO LIMIT THE REMEDIES AVAILABLE TO LENDER WITH
RESPECT TO THE ENFORCEMENT OF ITS INDEMNIFICATION RIGHTS AS STATED
HEREIN OR AS STATED IN ANY LOAN INSTRUMENT, IN THE EVENT ANY CLAIM OR
DEMAND IS MADE OR ANY OTHER FACT COMES TO THE ATTENTION OF LENDER IN
CONNECTION WITH, RELATING OR PERTAINING TO, OR ARISING OUT OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, WHICH LENDER
REASONABLY BELIEVES MIGHT INVOLVE OR LEAD TO SOME LIABILITY OF
LENDER, BORROWER SHALL, IMMEDIATELY UPON RECEIPT OF WRITTEN
NOTIFICATION OF ANY SUCH CLAIM OR DEMAND, ASSUME IN FULL THE
PERSONAL RESPONSIBILITY FOR AND THE DEFENSE OF ANY SUCH CLAIM OR
DEMAND AND PAY IN CONNECTION THEREWITH ANY LOSS, DAMAGE,
DEFICIENCY, LIABILITY OR OBLIGATION. IN THE EVENT OF COURT ACTION IN
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CONNECTION WITH ANY SUCH CLAIM OR DEMAND, THE BORROWER SHALL
ASSUME IN FULL THE RESPONSIBILITY FOR THE DEFENSE OF ANY SUCH ACTION
AND SHALL IMMEDIATELY SATISFY AND DISCHARGE ANY FINAL DECREE OR
JUDGMENT RENDERED THEREIN. THE LENDER SHALL HAVE THE RIGHT TO JOIN
THE BORROWER AS A PARTY DEFENDANT IN ANY LEGAL ACTION BROUGHT
AGAINST IT, AND THE BORROWER HEREBY CONSENTS TO THE ENTRY OF AN
ORDER MAKING IT A PARTY DEFENDANT TO ANY SUCH ACTION.
6.13 Survival of Covenants. The covenants hereof shall survive the execution and
delivery of the Loan Instruments. It is agreed that the terms hereof and the terms of the Loan
Instruments shall be cumulative and all such terms shall be construed in a manner that the same are
not inconsistent; provided, however, if a conflict arises, the terms of this Loan Agreement shall
control.
6.14 Assignment. Borrower may assign this Contract only upon written consent of
Lender.
ARTICLE 7 - SPECIAL PROVISIONS
7.1 Continuing Liability. Borrower agrees to develop, construct and complete all of the
Improvements pursuant to the Plans and to the satisfaction of all Governmental Authorities. If
Borrower does not complete the Improvements or if the construction thereof is not satisfactory to
Governmental Authorities having jurisdiction thereon, Lender shall have the option to complete the
Improvements to the satisfaction of the Governmental Authorities. If Lender elects to construct and
complete the Improvements or take such other action as may be necessary to obtain the approval of
the Governmental Authorities for the construction of the Improvements, Borrower promises to pay
to Lender, in addition to any other amounts which may be owing under any of the Loan
Instruments, all sums expended by Lender to complete the Improvements to the satisfaction of the
Governmental Authorities, and such amounts owing to Lender shall be payable on demand and shall
bear interest at the rates provided in the Note secured by the Property on which such Improvements
have been completed by Lender.
7.2 Sales to NSP Eligible Household Requirement. It is the intent of Lender and
Borrower that 100% of the funds made available under NSP are to be used to meet the low and
moderate income requirement established in the (Housing and Economic Recovery Act Section
2301 (f)(3)(A) (i) and (ii) of 2008.) The low and moderate income requirement includes individuals
and families whose incomes do not exceed 120% of area median income as defined therein.
Such individuals and families will be considered an Eligible Household, as determined by
Lender as stated herein and in accordance with any other corresponding provision of federal law
or provisions of succeeding laws as may be amended from time to time. The determination of
whether a purchaser is an Eligible Household shall be made Lender, in its sole absolute
discretion.
7.3 Counterparts. This Loan Agreement and any amendments hereto may be executed in
several counterparts, each of which shall be deemed to be an original copy, and all of which
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together shall constitute one agreement binding on all parties hereto, notwithstanding that all the
parties shall not have signed the same counterpart.
7.4 NSP Contract. Each term and provision of this Construction Loan Agreement is
expressly subject to the terms and condition of the Neighborhood Stabilization Program Contract
Number 77099999126, executed between Office of Rural Affairs established within the
Department of Agriculture and Borrower herein, dated to be effective September 1, 2009, in the
original principal sum of $1,050,000.00, as transferred and assigned to Lender by Assignment of
Contract on August 30, 2011, and as may be amended from time to time, upon written request
and express approval under the Neighborhood Stabilization Program, ( "NSP Contract "). The
NSP Contract is incorporated herein by reference. The lot or lots securing this loan must be
improved with a single family dwelling completed in good and workmanlike manner and sold to
an Eligible Household who will maintain the affordability period for rental or homeownership in
accordance with the NSP. The terms of the NSP Contract shall govern over any conflicting
provision hereof.
THIS WRITTEN CONSTRUCTION LOAN AGREEMENT, AND ANY OTHER
WRITTEN AGREEMENTS SIGNED CONTEMPORANEOUSLY WITH THE SIGNING
HEREOF REPRESENT 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.
EXECUTED AND DELIVERED as of the date first recited.
LENDER:
TEXAS DEPARTMENT OF HOUSING AND
COMMUNITY AFFAIRS, a public and official
agency of the State of Texas
By:
Name:
Its: duly authorized officer or representative
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BORROWER:
CITY OF HUNTSVILLE, a political subdivision
of the State of Texas
By:
Name:
Its:
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EXHIBITS
A- LEGAL DESCRIPTION
A -1 - CONDITIONS TO FIRST ADVANCE
B - APPLICATION FOR ADVANCE FOR RECONSTRUCTION AND NEW
CONSTRUCTION ( "APPLICATION FOR ADVANCE ")
B -1- DRAW SCHEDULE FOR RECONSTRUCTION AND NEW CONSTRUCTION ( "DRAW
SCHEDULE)
C - APPLICATION AND CERTIFICATE FOR PAYMENT
D - AFFIDAVIT OF COMPLETION
E - WAIVER AND SUBORDINATION OF MECHANIC'S LIEN CLAIMS
F - RESOLUTION CERTIFICATE
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EXHIBIT A
LEGAL DESCRIPTION
Being 0.236 acres of land, also called Lot 2, Block 66 of Huntsville Townsite, Walker County,
Texas, according to the recorded deed thereof in Volume 434, Page 763 of the Deed Records of
Walker County, Texas, said 0.236 acres being more particularly described by metes and bounds
as follows:
BEGINNING at a 1/2" iron rod found at the southeast corner of the intersection of Avenue P and
7th Street, having a Texas State Plane coordinate of Y= 10,260,670.695 X= 3,796,635.030;
THENCE South 02 degrees 11 minutes 43 seconds West, a distance of 652.65 feet to a %2" iron
rod set for the most westerly northwest corner and the POINT OF BEGINNING of herein
described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 67.87 feet to a 1" iron bar
found for the interior corner of herein described tract;
THENCE North 02 degrees 11 minutes 43 seconds West, a distance of 62.92 feet to a 1/2" iron
rod set for the most northerly northwest corner of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 60.30 feet to a 1/2" iron
rod set for the northeast corner of herein described tract, also being South 86 degrees 17 minutes
33 seconds West, a distance of 80.83 feet from a found 60D nail at the base of an old fence
corner post;
THENCE South 02 degrees 11 minutes 43 seconds East, a distance of 113.52 feet to a point for
corner for the southeast corner of herein described tract;
THENCE South 86 degrees 17 minutes 33 seconds West, a distance of 128.17 feet to a 1/2" iron
rod set for the southwest corner of herein described tract,
THENCE North 02 degrees 11 minutes 43 seconds West, A distance of 50.60 feet to the POINT
OF BEGINNING and containing 0.236 acres of land.
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EXHIBIT A -1
CONDITIONS TO FIRST ADVANCE
(x) 1. The original, executed Note
(x) 2. Certified copy of the executed Deed of Trust
(x) 3. Approved Budget
(x) 4. The Title Insurance Policy
(x) 5. The Plans and Final draft of Construction Contracts
(x) 6. The Survey
(x) 7. Financing Statements (Form UCC -1) with respect to the security interest granted in
the Loan Instruments, together with evidence of the priority of the respective security interests
perfected thereby
(x) 8. Intentionally omitted
(x) 9. Building permit and all other permits required by the Governmental Requirements
with respect to the construction and development of the Property, if applicable
(x) 10. Evidence that all applicable zoning ordinances or restrictive covenants affecting the
Property permit the use for which the Property is intended and have been or will be complied with
(x) 11. Evidence of the Property's compliance with the requirements of all applicable
"environmental protection" laws, rules, and regulations, whether federal, state, or municipal
(x) 12. Evidence that all of the streets providing access to the Property either have been
dedicated to public use or established by private easement, duly recorded in the records of the
County in which the Property is located, and have been fully installed and accepted by
Governmental Authority, that all costs and expenses of the installation and acceptance thereof have
been paid in full, and that there are no restrictions on the use and employment of such streets that
adversely affect, limit, or impair Borrower's ability to develop and construct the Property or operate
the Property for the purposes and in the manner represented to Lender
(x) 13. Evidence of the availability of all utilities to the Property, including specifically, but
without limitation, gas, electricity, sewer, and water services
(x) 14. Evidence that all necessary action on the part of Borrower has been taken with
respect to the execution and delivery of this Loan Agreement and the consummation of the
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transaction contemplated hereby, so that this Loan Agreement and all Loan Instruments to be
executed and delivered by or on behalf of Borrower will be valid and binding upon Borrower or the
person or entity executing and delivering such document; specifically the Loan Instruments have
been duly authorized, executed and recorded or filed in accordance with applicable Governmental
Requirements and original counterparts thereof delivered to Lender, all before the commencement
of construction of the Improvements, the placing of any materials or supplies on the Lots(s), the
execution or recording of any Construction Contracts (written or oral) for any of the same or the
performance of any other act which could rise to a lien claim equal or superior to the liens and
security interests created by the Loan Instruments.
(x) 15. The Insurance Policies or Certificates of such Insurance Policies
(x) 16. Application for Advance
(x) 17. Application and Certificate for Payment
(x) 18. Certified resolutions of the board of directors of Borrower authorizing such
corporation to execute the Loan Instruments and perform its obligations thereunder
(x) 19. Tax or assessment certificates or other similar evidence of payment from all
appropriate bodies or entities which have taxing or assessing authority over any of the Property,
stating that all taxes and assessments are current
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Date:
EXHIBIT B
APPLICATION FOR ADVANCE FOR RECONSTRUCTION AND NEW
CONSTRUCTION ( "APPLICATION FOR ADVANCE ")
Department: TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
( "TDHCA "), a public and official agency of the State of Texas
Draw Request No.
Itemization of Items
Permissible per Draw
Schedule
Requested Advance: $
(less retainage) $
Amount to be Funded: $
BORROWER: CITY OF HUNTSVILLE, a political subdivision of the State of Texas
PROJECT: Construction of one (1) single family dwelling on property located in Huntsville,
Walker County, Texas more specifically described as:
Being 0.236 of an acre, more or less out of LOT TWO (2), BLOCK SIXTY -SIX
(66), HUNTSVILLE TOWNSITE, P. GRAY LEAGUE, A -24, Walker County,
Texas and being more particularly described by metes and bounds on Exhibit "A"
attached hereto and made a part hereof.
907 Avenue P, Huntsville, Walker County, Texas 77320
1. This application and the items accompanying this application (which are incorporated herein
for all purposes) are delivered pursuant to the Construction Loan Agreement dated
, 2012 between TDHCA and Borrower (the "Loan Agreement "), each of the
defined terms in the Loan Agreement has the same meaning when used herein or in the attachments
unless indicated otherwise. Borrower hereby certifies to TDHCA that this application is true and
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correct in all respects and that this application and every item incorporated herein are genuine; and
Borrower agrees that TDHCA may rely upon same in making the requested advances.
2. Borrower hereby requests to draw the principal amount of and
00 /100 Dollars ($ ) (the "Requested Advance ") less 10% required in the
amount of $ ( "Retainage "), for the total of and _ /100
Dollars ($ )( "Amount to be Funded ") from TDHCA during the normal business
hours, which when drawn will cause the balance remaining to be drawn on the Loan to
and 00 /100 Dollars ($ ), an amount which does not
exceed the committed sum. There is no minimum dollar amount per draw.
3. On the date hereof, and at the time the Amount to be Funded is to be made, (a) the
representations and warranties made in the Loan Agreement and/or certificates delivered pursuant
thereto are and will be true and correct in all material respects, (b) no Default or Event of Default
has or will have occurred and is or will be continuing, and (c) Borrower has performed all acts
required in the Loan Instruments to have been previously performed by Borrower.
4. All proceeds of all previous Advances have been, and the proceeds of the Amount to be
Funded will be spent only for Approved Costs and only for the purposes specified in all
Applications for Advance, and accompanying items, heretofore or herewith to TDHCA.
5. The sum of (a) the balance of the sums to be advanced by TDHCA under the Loan
Agreement plus, (b) all other funds of Borrower available therefore and set aside in a manner which
TDHCA has indicated is satisfactory to it, will enable Borrower to complete the construction of the
Project in substantial accordance with the Plans.
6. All obligations for labor, materials, and other costs heretofore incurred by or on behalf of
Borrower in connection with the construction of the Project and included (a) in any previous
Advance have been paid, and (b) in the Requested Advance will be promptly paid upon
disbursement of the Amount to be Funded under said Requested Advance. Absolute ownership of
all materials, equipment, fixtures and other property heretofore incorporated in the construction of
the Project or otherwise installed therein or on the Real Property and paid for by Borrower with the
process of a previous Advance or otherwise is vested in Borrower, free and clear of all rights therein
of others except TDHCA or other persons holding rights under any Permitted Encumbrance.
Neither Borrower, nor any agent of Borrower, has been served with any notice, written or oral, that
a lien will be claimed for any amount unpaid for materials delivered, labor performed, or services
provided in connection with the construction of all or any portion of the Project, other than those
bonded against pursuant to the Loan Agreement, a complete description of which, if any, is set forth
on a schedule annexed hereto; and, to the best of the undersigned's knowledge, no basis exists or the
filing or any other mechanic's liens with respect to all or any part of the Real Property for the
Project.
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BORROWER:
CITY OF HUNTSVILLE, a political subdivision
of the State of Texas
By:
Name: Bill Baine
Title: City Manager
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Date:
EXHIBIT B -1
DRAW SCHEDULE FOR RECONSTRUCTION AND NEW CONSTRUCTION
( "DRAW SCHEDULE ")
LENDER: TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS
( "TDHCA "), a public and official agency of the State of Texas.
BORROWER: CITY OF HUNTSVILLE, a political subdivision of the State of Texas
PROJECT: New construction of one (1) single family dwelling on property located in
Huntsville, Walker County, Texas more specifically described as:
Being 0.236 of an acre, more or less out of LOT TWO (2), BLOCK SIXTY -SIX
(66), HUNTSVILLE TOWNSITE, P. GRAY LEAGUE, A -24, Walker County,
Texas and being more particularly described by metes and bounds on Exhibit "A"
attached hereto and made a part hereof.
907 Avenue P, Huntsville, Walker County, Texas 77320
LOAN NUMBER: 770999991262
Borrower hereby requests the below itemized funds from Lender to Borrower to pay for the listed
items permissible per draw, all of which are part of the reconstruction or new construction project at
the above referenced Property. Each draw request is hereby limited to pay for only the items listed
hereunder. Borrower shall use
Draw
number
Items eligible for payment per specific draw
Dollar
amount
requested (to
be filled in by
Borrower)
First(1) Draw
Acquisition of property (closing costs paid at closing;
predevelopment cost reimbursement; initial builder soft costs
Second(2)Draw
Site preparation; underground utilities to property; slab;
Third(3) Draw
Framing; rough carpentry; exterior walls sheathed; roof; rough
plumbing; electrical; HVAC
Fourth(4)Draw
Doors; windows; drywall installed; taped; float and finish;
exterior siding; stone; and brick
Fifth(5) Draw
Paint interior and exterior; interior trim, cabinets; countertops;
plumbing; electrical; and HVAC trim; HVAC equipment
installed; house cleaning; appliances; landscaping
Final Draw
Driveway; parking; project close -out; retainage; release
retainage after successful inspection and occupancy permits
issued
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EXHIBIT A
LEGAL DESCRIPTION
Being 0.236 acres of land, also called Lot 2, Block 66 of Huntsville Townsite, Walker County,
Texas, according to the recorded deed thereof in Volume 434, Page 763 of the Deed Records of
Walker County, Texas, said 0.236 acres being more particularly described by metes and bounds
as follows:
BEGINNING at a 1/2" iron rod found at the southeast corner of the intersection of Avenue P and
7th Street, having a Texas State Plane coordinate of Y= 10,260,670.695 X= 3,796,635.030;
THENCE South 02 degrees 11 minutes 43 seconds West, a distance of 652.65 feet to a '" iron
rod set for the most westerly northwest corner and the POINT OF BEGINNING of herein
described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 67.87 feet to a 1" iron bar
found for the interior corner of herein described tract;
THENCE North 02 degrees 11 minutes 43 seconds West, a distance of 62.92 feet to a 1/2" iron
rod set for the most northerly northwest corner of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 60.30 feet to a 1/2" iron
rod set for the northeast corner of herein described tract, also being South 86 degrees 17 minutes
33 seconds West, a distance of 80.83 feet from a found 60D nail at the base of an old fence
corner post;
THENCE South 02 degrees 11 minutes 43 seconds East, a distance of 113.52 feet to a point for
corner for the southeast corner of herein described tract;
THENCE South 86 degrees 17 minutes 33 seconds West, a distance of 128.17 feet to a 1/2" iron
rod set for the southwest corner of herein described tract,
THENCE North 02 degrees 11 minutes 43 seconds West, A distance of 50.60 feet to the POINT
OF BEGINNING and containing 0.236 acres of land.
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r, ,
EXHIBIT A
LEGAL DESCRIPTION
Being 0.236 acres of land, also called Lot 2, Block 66 of Huntsville Townsite, Walker County,
Texas, according to the recorded deed thereof in Volume 434, Page 763 of the Deed Records of
Walker County, Texas, said 0.236 acres being more particularly described by metes and bounds
as follows:
BEGINNING at a 1/2" iron rod found at the southeast corner of the intersection of Avenue P and
7th Street, having a Texas State Plane coordinate of Y= 10,260,670.695 X= 3,796,635.030;
THENCE South 02 degrees 11 minutes 43 seconds West, a distance of 652.65 feet to a '''A" iron
rod set for the most westerly northwest corner and the POINT OF BEGINNING of herein
described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 67.87 feet to a 1" iron bar
found for the interior corner of herein described tract;
THENCE North 02 degrees 11 minutes 43 seconds West, a distance of 62.92 feet to a 1/2" iron
rod set for the most northerly northwest corner of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 60.30 feet to a 1/2" iron
rod set for the northeast corner of herein described tract, also being South 86 degrees 17 minutes
33 seconds West, a distance of 80.83 feet from a found 60D nail at the base of an old fence
corner post;
THENCE South 02 degrees 11 minutes 43 seconds East, a distance of 113.52 feet to a point for
corner for the southeast corner of herein described tract;
THENCE South 86 degrees 17 minutes 33 seconds West, a distance of 128.17 feet to a 1/2" iron
rod set for the southwest corner of herein described tract,
THENCE North 02 degrees 11 minutes 43 seconds West, A distance of 50.60 feet to the POINT
OF BEGINNING and containing 0.236 acres of land.
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EXHIBIT F
RESOLUTION CERTIFICATE
I, the undersigned, Officer of City of Huntsville, a political subdivision of the State of Texas (the
"City "), hereby certify that I have custody of the Resolution No. 2009 -04 from the City of
Huntsville, and am authorized to execute and deliver this certificate on behalf of the City, hold
the office designated by the undersigned name below, and further certify to the following:
1. Attached hereto as Addendum 1 is a full, true and correct copy of
the Resolution duly adopted by the City Council of the and approved by the
mayor of the City, passed at a meeting of said City, duly and legally called in
conformity with the Resolution and in accordance with applicable laws held on
the 7th day of April, 2009, a quorum thereof being present and voting
unanimously for the adoption of said Resolution and that said Resolution is in full
force and effect as of the date of this certification.
2. The Resolution attached hereto as Addendum 1 have not been
amended, modified or rescinded and are in full force and effect on the date hereof.
3. There is no provision of the corporate records, charter, bylaws, or
articles of incorporation of the City limiting the above - described Resolution, and
said Resolution is in conformity with the provisions of the City Council.
4. The following person has been appointed by the City Council to
the position set forth opposite each person's respective name and are qualified to
act in such capacities:
City Manager Bill Baine
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EXECUTED this
day oL"012.
THE STATE !T S §
COUNTY OF ath4/ §
By:
Bill Baine, City Manager
This instrument was acknowledged before me on this day o 012,
by Bill Baine, City Manager, of City of Huntsville, a political subdivision of the State of Texas,
acting on behalf of said political subdivision and •- apacit stated herei
(Seal)
No/ Pus ic, State of exas
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ADDENDUM 1
RESOLUTIONS
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RESOLUTION NO...2009 -04
A RESOLUTION OF THE CITY COUNCIL OF THE • CITY OF HUNTSVILLE, TEXAS,
AUTHORIZING THE SUBMISSION OF A..NEIGHBORHOOD STABILIZATION PROGRAM
(NSP) GRANT APPLICATION TO THE TEXAS DEPARTMENT OF COMMUNITY AND
HOUSING AFFAIRS (TDECA) FOR THE . HUNTSVILLE NEIGHBORHOOD
STABILIZATION PROJECT; .AND AUTHORIZING THE • CITY MANAGER TO ACT AS THE
.CITY'S EXECUTIVE OFFICER AND AUTHORI.ZED REPRESENTATIVE IN ALL
MATTERS PERTAINING TO THE - CITY'S PARTICIPATION IN THE NEIGHBORHOOD
STABILIZATION GRANT PROGRAM.
WHEREAS • Blight is a problem for Huntsville as is affordable housing for low - income residents. This
award will allow for the removal of blighted structures and provide new homes for low-
income.residents; and
WHEREAS It is necessary and in the best interest of the City to apply for funding under the 2009
Neighborhood Stabilization Grant.Program. •
NOW, THEREFORE, belt resolved by the City Council ofthe'City of•Huntsville, Texas, that:
Section 1: An application is hereby authorized to be filed on behalf of the City and be placed in
competition for funding under the. Neighborhood Stabilization Grant Program.
Section 2: The application will be for $1,000,0.00 of grant funds to implement theNeighborhood
Stabilization Project.
Section 3: It is understood that the NSP is a reimbursement program.
Section 4: The Mayor and City Council strongly support this application to address.the blight removal
and low - income housing production for the city and residents of Huntsville.
Section 5: The City Council .directs.and .designates the City Manager, Bill Baine, as the City's Chief
Executive Ofcer and Authorized Representative to act in all matters in connection with this application
and the City's participation in the Neighborhood Stabilization Grant.Prograrn.
PASSED AND APPROVED.this 7th day of April, 2009. . .
ATTEST:
-Stephanie-Brim, City Secretary
A.UN Sin i 7G�
APPROVED AS TO FORM:
Schneider, Interim City Attorney
F HUNTSVILLE, TEXAS
3. Turner, Mayor
r�-
O Z
Ice
IJJ C,
JAI cn
cc u.i
CC
O = A arding
LIU
SC 4k,
CD
INTERIM CONSTRUCTION DEED OF TRUST
(WITH SECURITY AGREEMENT AND ASSIGNMENT OF RENTS)
( "Deed of Trust ")
NEIGHBORHOOD STABILIZATION PROGRAM
Federal Agency: United States Department of Housing and Urban Development
TDHCA Federal Award Number: B- 08 -DN -48 -0001
Federal Award Year (Year of Award from HUD to TDHCA): 2008
TDHCA Award Year (Year of TDHCA Board Approval): 2009
THE STATE OF TEXAS
COUNTY OF WALKER
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.
ARTICLE I
Definitions
The following terms shall have the respective meanings assigned to them when used
herein.
1.01 Grantor: CITY OF HUNTSVILLE, a political subdivision of the State of Texas
1.02 Grantor's mailing address: 1212 Avenue M, Huntsville, Walker County, Texas 77340
1.03 Beneficiary: TEXAS DEPARTMENT OF HOUSING AND COMMUNITY
AFFAIRS, a public and official agency of the State of Texas, and any lawful owner,
holder, pledgee, or assignee of any indebtedness secured hereby.
1.04 Beneficiary's mailing address: P.O. Box 13941, Austin, Travis County, Texas 78711-
3941.
1.05 Trustee: Timothy K. Irvine of Travis County, Texas.
1.06 Mortgaged Property: The Real Property and the Personal Property.
1.07 Proiect: Single - family dwelling to be constructed or rehabilitated on the Real Property.
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1.08 NSP: Neighborhood Stabilization Program or ( "Program ") as authorized by the Housing
and Economic Recovery Act of 2008 as an adjunct to the Community Development Block Grant
Program. (Housing and Economic Recovery Act of 2008, Pub. L. 110 -289, 112 STAT 2850.)
1.09 NOFA: Notice of Funding Availability issued by TDHCA for the NSP issued in 2009.
1.10 NOFA -R: Notice of Funding Availability Re- Allocation.
1.11 NOFA -R- SERIES 2: Neighborhood Stabilization Program Re- allocation — Series 2
(NSPR- Series 2) issued in 2010.
1.12 Eligible Household: Individual or families whose income[s] do not exceed 120% of
area median income ( "AMI ") as defined in the Housing and Economic Recovery Act 2301
(f)(3)(A)(i) and (ii) of 2008.
1.13 Financing Mechanisms: Mechanisms that provide affordable homeownership
opportunities to assist homebuyers to purchase and redevelop a foreclosed property at a discount
and/or rehabilitate the property as defined in the Housing and Economic Recovery Act 2301
(c)(3)(A) of 2008.
1.14 Real Property: The real property described as: Being 0.236 of an acre, more or less out
of LOT TWO (2), BLOCK SIXTY -SIX (66), HUNTSVILLE TOWNSITE, P. GRAY LEAGUE,
A -24, Walker County, Texas and being more particularly described by metes and bounds on
Exhibit "A" attached hereto and made a part hereof, together with (i) all improvements thereon,
all rights, hereditaments and appurtenances belonging thereto including rights of ingress and
egress, easements, licenses, and all reversionary rights or interests of Grantor; (ii) all fixtures and
personal property now or hereafter attached to the Real Property; (iii) all renewals or
replacements thereof or articles in substitution therefore, whether or not now or later attached to
the Project in any manner; and (iv) all other interests of every kind which Grantor now has or at
any time hereafter acquires in and to the Real Property.
1.15 Personal Property: (i) all furniture, equipment and other personal property now or
hereafter owned by Grantor, located on the Mortgaged Property, and all renewals or
replacements thereof or articles in substitution therefore, whether or not the same are or shall be
attached to the Project in any manner; (ii) all building materials and equipment now or hereafter
delivered to the Mortgaged Property and all building and construction materials, equipment and
parts intended to be installed in or on the Real Property or Project; (iii) all plans and
specifications for the Project; (iv) all contracts and subcontracts relating to the Project; (v) all
deposits (including tenant's security deposits, if any), funds, accounts (including any accounts in
which escrows are deposited as a reserve for the payment of taxes, assessments and insurance on
the Mortgaged Property), contract rights, instruments, documents, general intangibles (including
trademarks, trade names and symbols used in connection therewith), and notes or chattel paper
arising from or by virtue of any transactions related to the Mortgaged Property; (vi) all permits,
licenses, franchises, certificates, and other rights and privileges obtained in connection with the
Mortgaged Property; (vii) all bank accounts in which rental income from the Mortgaged Property
is deposited; (viii) all proceeds arising from or by virtue of the sale, lease or other disposition of
any of the Real or Personal Property; (ix) all proceeds (including premium refunds) payable or to
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be payable under each policy of insurance relating to the Project; (x) all proceeds arising from
the taking of all or a part of the Real Property or any rights appurtenant thereto, including change
of grade of streets, curb cuts or other rights of access, for any public or quasi - public use under
any law, or by rights of eminent domain, or by private or other purchase in lieu thereof; (xi) all
other interests of every kind and character which Grantor now has or at any time hereafter
acquires in and to the Personal Property and all property which is used or useful in connection
therewith.
1.16 Construction Loan Agreement: The NSP Construction Loan Agreement ( "Loan
Agreement ") of even date herewith executed by and between Grantor (Borrower in Loan
Agreement or the maker of the Note if different from Grantor) and Beneficiary (Lender in Loan
Agreement), which Loan Agreement sets forth, among other things, the procedure and
requirements for disbursing the loan proceeds to be evidenced by the Note.
1.17 Note: The NSP promissory note ( "Note ") of even date herewith executed by Grantor
payable to the order of Beneficiary in the original principal sum of $96,110.70 payable as therein
provided and finally maturing as therein provided, and all modifications, extensions and
renewals thereof.
1.18 Loan Documents: The NSP Note, this Deed of Trust, the Construction Loan Agreement,
and any and all other documents or instruments heretofore or hereafter executed by Grantor (or
the maker of the Note if different from Grantor) securing, evidencing or in any way pertaining to
the indebtedness evidenced by the Note and hereafter are the ( "Loan Documents. ")
1.19 Governmental Requirements. All laws, ordinances, statutes, codes, rules, regulations,
orders and decrees of the United States, the state, the county, the city, or any other political
subdivision in which the Mortgaged Property is located, and any other political subdivision,
agency or instrumentality exercising jurisdiction over Grantor or the Mortgaged Property
including, without limitation, the following: the Civil Rights Act of 1964 (42 U.S.C. 2000(d);
Executive Order 11063, as amended by Executive Order 12259; Executive Order 11246; Age
Discrimination Act of 1975 (42 U.S.C. 6101 et seq.); Equal Credit Opportunity Act (15 U.S.C.
1691 et seq.); Fair Credit Reporting Act (15 U.S.C. 1681 et seq.); Fair Housing Act (42 U.S.C.
3601 et seq.); the Americans with Disabilities Act of 1990 (P.L. 101 -336); of the Rehabilitation
Act of 1973 (29 U.S.C. 794) and implementing regulations (24 CFR Part 8); Architectural
Barriers Act of 1968 (42 U.S.C. 4151 et seq.); Federal Drug Free Workplace Act of 1988 and the
regulations promulgated thereunder including, without limitation, 54 CFR Part 4956, Section 3
of the Housing and Urban Development Act of 1968; Executive Orders 11625, 12432 and 12138,
as amended; the Copeland "Anti- Kickback" Act (18 U.S.C. § 874 et seq.); the Davis -Bacon Act
(40 U.S.C. § 276a et seq.); Sections 103 and 107 of the Work Hours and Safety Standards Act.
(40 U.S.C. § 327 et seq.); the Uniform Relocation Assistance and Real Property Acquisition
Policies Act (42 U.S.C. § 4201 et seq.); the Housing and Community Development Act of 1974;
the National Environmental Policy Act (42 U.S.C. § 4321 et seq.); ( "NEPA "); the Lead -Based
Paint Poisoning Prevention Act (42 U.S.C. § 4321 et seq.); The Uniform Relocation Assistance
and Real Property Acquisition Policies Act of 1970; the State of Texas Senate Bill 1356; Title 8,
and Chapter 92 of the Texas Property Code; Solid Waste Disposal Act TEX. HEALTH &
SAFETY CODE Ann. Ch. 361; Comprehensive Municipal Solid Waste Management, Resource
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Recovery, and Conservation Act. TEX. HEALTH & SAFETY CODE Ann. Ch 363; County
Solid Waste Control Act. TEX. HEALTH & SAFETY CODE Ann. Ch 364; Texas Clean Air
Act, TEX. HEALTH AND SAFETY CODE Ann. Ch.; and Hazardous Communication Act,
TEXAS HEALTH AND SAFETY CODE Ann. Ch. 502; and such Governmental Requirements
as may be from time to time amended or superseded and all of their implementing regulations, as
may be amended.
1.20 Anti- Terrorism Laws. Any and all present and future judicial decisions, statutes,
rulings, rules, regulations, permits, certificates, orders and ordinances of any Governmental
Authority relating to terrorism or money laundering, including, without limiting the generality of
the foregoing, the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001 (Pub. L. No. 107 -56); the Trading the Enemy
Act (50 U.S.C.A. App. 1, et seq.); the International Emergency Economic Powers Act (50 U. S.
C. A. §1701 -06); Executive Order No. 13224 on Terrorist Financing, effective September 24,
2001 (relating to "Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threatened to Commit, or Support Terrorism ") and the United States Treasury Department's
Office of Foreign Assets Control list of "Specifically Designated National and Blocked Persons"
(as published from time to time in various mediums, including, without limitation, at
http:www.treas. gov/ofachllsdn.pdf).
1.21 Prohibited Person. Any person or entity that (i) is specifically named or listed in, or
otherwise subject to, any Anti- Terrorism Laws, (ii) is owned or controlled by, or acting for or on
behalf of any person or entity specifically named or listed in, or otherwise subject to, any Anti -
Terrorism Laws, (iii) Beneficiary is prohibited from dealing with, or engaging in any transaction
with, pursuant to an Anti- Terrorism Laws, or (iv) is affiliated with any person or entity described
in clauses (i) - (iii) of this definition.
1.22 Environmental Laws and Regulations. Any federal, state, or local law, statute,
ordinance, or regulation, whether now or hereafter in effect, pertaining to health, industrial
hygiene, or the environmental conditions on, under, or about the Land or the Improvements,
including without limitation, the following, as now or hereafter amended, Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 ( "CERCLA "), 42 U.S.C.A.
§9601 et seq.; Resource, Conservation and Recovery Act ( "RCRA "), 24 U.S.C.A. §6901 et seq.
as amended by the Superfund Amendments and Reauthorization Act of 1986 ( "SARA "), Pub. L.
No. 99 -499, 100 Stat. 1613; the Toxic Substances Control Act, 15 U.S.C.A. §2601 et seq.;
Emergency Planning and Community Right to Know Act of 1986, 42 U.S.C.A. §1101 et seq.;
Clean Water Act ( "CWA "), 33 U.S.C.A. §1251 et seq., Clean Air Act ( "CAA "), 42 U.S.C.A.
§7401 et seq.; Federal Water Pollution Control Act ( "FWPCA "), 33 U.S.C.A. §1251 et seq.; );
Protection of Wetlands (Executive Order 11990, Mary 24, 1977); Coastal Management Act
(Sections 307 (c) and (d)); Safe Water Driving Act (42 U.S.C. 201, 300(f) and 21U.S.C. 349);
Protection of the Environment, Sole Source Aquifers (40 CFR 149); Endangered Species Act (50
CFR 402); Wild and Scenic Rivers Act (16 U.S.C. 1271 et seq. as amended, particularly section
7(b) and (c)); Farmland Protection Policy Act (7 CFR 658); Federal Actions to Address
Environmental Justice in Minority Populations and Low Income Populations (Executive Order
12898, February 11, 1994); Parts of Environmental Review Procedures for Entities Assuming
HUD Environmental Responsibilities: Noise Abatement and Control (24 CFR 51B); Explosive
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and Flammable Operations (24 CFR 51C); Toxic Chemicals and Radioactive Materials (24 CFR
58.5(a); Airport Clear zones and Accident Potential Zones (24 CFR51 D); and any corresponding
state laws or ordinances including but not limited to the Texas Water Code ( "TWC ") §26.001 et
seq.; Texas Health & Safety Code ( "THSC ") §361.001 et seq.; Texas Solid Waste Disposal Act,
Tex. Rev. Civ. Stat. Ann. Art. 4477 -7; and regulations, rules, guidelines, or standards
promulgated pursuant to such laws, statute and regulations, as such statutes, regulations, rules,
guidelines, and standards are amended from time to time.
The environmental effects of each activity carried out with funds provided under the
NSP program must be assessed in accordance with the provisions of the Texas NSP NOFA,
National Environmental Policy Act of 1969 (NEPA) and the related activities listed in HUD's
implementing regulations at 24 CFR Parts 50, 51, 55 and 58. Each such activity must have an
environmental review completed and support documentation prepared complying with the
National Environmental Policy Act of 1969 and regulations at 24 CFR Parts 50, 51, 55 and Part
58. No funds may be requested or committed to an activity before the completion of the
environmental review process, including the requirements of 24 CFR §58.6, and written
clearance has been provided by the Department.
1.23 Permitted Exceptions. The exceptions from coverage found in Schedule B of the
commitment for mortgagee policy of title insurance issued by Stewart Title Guaranty Company,
as agent for Walker County Title Company, a Texas corporation, GF #201103240, issued
January 27, 2012 to Beneficiary herein.
ARTICLE II
Conveyance in Trust
2.01 Grant. Grantor, for and in consideration of the debt evidenced by the Note, has granted,
assigned, and conveyed, and by these presents does grant, assign and convey the Mortgaged
Property, in trust unto the Trustee, his successors and assigns, to have and to hold the Mortgaged
Property, unto Trustee, his successors and assigns, forever. To the extent permitted by law, the
Personal Property shall be deemed to be a part of and affixed to the Real Property. In the event
the estate of the Grantor in and to any of the Mortgaged Property is a leasehold estate, this
conveyance shall include and the lien and security interest and assignment created hereby shall
encumber and extend to all other, further or additional title, estates, interest or rights which may
exist now or at any time be acquired by Grantor in or to the property demised under the lease
creating such leasehold estate and including Grantor's rights, if any, to purchase the property
demised under such lease and, if fee simple title to any of such property shall ever become vested
in Grantor, such fee simple interest shall be encumbered by this Deed of Trust in the same
manner as if Grantor had fee simple title to such property as of the date of execution hereof.
Grantor hereby binds itself, its successors and assigns, to warrant and forever defend the
Mortgaged Property unto Trustee, his successors and assigns, against every person whomsoever
lawfully claiming or to claim the same or any part thereof.
2.02 Security. This conveyance is made in trust, however, to secure and enforce the payment
of the Note, the obligations of Grantor (and/or the maker of the Note, if different from Grantor)
under the other Loan Documents and payment of the Other Indebtedness as defined herein. If
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Grantor shall perform the covenants and agreements herein contained, then, and only then, this
conveyance shall become null and void and shall be released at Grantor's expense; otherwise it
shall remain in full force and effect. No release of this conveyance, or of the lien or security
interest or assignment created and evidenced hereby, shall be valid unless executed by
Beneficiary.
2.03 Other Indebtedness. This Deed of Trust shall secure, in addition to the Note, all funds
hereafter advanced by Beneficiary to or for the benefit of Grantor as contemplated by any
provision herein or for any other purpose, and all Other Indebtedness, of whatever kind or
character, owing or which may hereafter become owing by Grantor to Beneficiary, whether such
indebtedness is evidenced by note, open account, overdraft, endorsement, surety agreement,
guaranty, or otherwise, it being contemplated that Grantor may hereafter become indebted to
Beneficiary in further sum or sums ( "Other Indebtedness "); provided, however, in no event shall
this Deed of Trust secure payment of any installment loan or any open -end line of credit
established under Chapter 3, Chapter 4 or Chapter 15 of the Texas Finance Code. This Deed of
Trust shall also secure all renewals and extensions of any of the Other Indebtedness secured
hereby. If the Note or Other Indebtedness shall be collected by legal proceedings, whether
through a probate or bankruptcy court or otherwise, or shall be placed in the hands of an attorney
for collection after maturity, whether matured by the expiration of time or by any option given to
the Beneficiary to mature same, Grantor agrees to pay Beneficiary's attorney's and collection fees
in the amount set forth in the Note, and such fees shall be a part of the indebtedness secured
hereby.
ARTICLE III
Grantor's Covenants and Representations
Grantor hereby covenants, warrants and represents to and agrees with Beneficiary and
with Trustee as follows:
3.01 Payment and Performance. Grantor (i) will pay all of the indebtedness secured hereby,
together with the interest thereon, when the same shall become due, in accordance with the terms
of the Note or any other instrument evidencing, securing, or pertaining to such indebtedness or
evidencing any renewal or extension of such indebtedness, or any part thereof, and (ii) will
punctually and properly perform all of Grantor's covenants, obligations, and liabilities under any
other security agreement, mortgage, deed of trust, collateral pledge agreement, contract,
assignment, loan agreement or any other instrument or agreement of any kind now or hereafter
existing as security for, executed in connection with, or related to the indebtedness or other
obligations secured hereby, or any part thereof.
3.02 Title and Right to Convey. Grantor (i) has in its own right good and indefeasible title in
fee simple, except as otherwise provided herein, to the Mortgaged Property which is free from
encumbrance superior to the indebtedness hereby secured, except as otherwise provided herein,
and (ii) has full right to make this conveyance.
3.03 In_ surance. Grantor shall require the builder and/or its general contractor to obtain and
maintain at said builder's and/or general contractor's sole expense: (1) all -risk insurance with
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respect to all insurable Mortgaged Property, against loss or damage by fire, lightning, windstorm,
explosion, hail, tornado and such hazards as are presently included in so- called "all- risk"
coverage and against such other insurable hazards as Beneficiary may reasonably require, in an
amount not less than the unpaid balance of the Note, or if available and requested by Beneficiary
100% of the full replacement cost, including the cost of debris removal, without deduction for
depreciation and sufficient to prevent Grantor and Beneficiary from becoming a coinsurer, such
insurance to be in Builder's Risk (non- reporting) form during and with respect to any
construction on the Real Property; (2) if and to the extent any portion of the Project is in a
special flood hazard area, a flood insurance policy in an amount equal to the lesser of the
principal face amount of the Note or the maximum amount available; (3) commercial general
liability insurance, on an "occurrence" basis, against claims for bodily injury, death or property
damage occurring on or about the Project, to afford protection in a "single limit" of not less than
$1,000,000 in the event of bodily injury to, or death of, any number of persons or of damage to
property arising out of one occurrence, for the benefit of Grantor and Beneficiary as named
insured; and (4) such other insurance on the Mortgaged Property as may from time to time be
reasonably required by Beneficiary, if available, (including but not limited to rent loss or boiler
and machinery insurance) and against other insurable hazards or casualties which at the time are
commonly insured against in the case of premises similarly situated, due regard being given to
the height, type, construction, location, use and occupancy of buildings and improvements. All
insurance policies shall be issued and maintained by insurers, in amounts, with deductibles, and
in form reasonably satisfactory to Beneficiary, and shall require not less than fifteen (15) days'
prior written notice to Beneficiary of any cancellation or change of coverage. All insurance
policies maintained, or caused to be maintained, by Grantor with respect to the Mortgaged
Property, except for public liability insurance, shall provide that each such policy shall be
primary without right of contribution from any other insurance that may be carried by Grantor or
Beneficiary and that all of the provisions thereof, except the limits of liability, shall operate in
the same manner as if there were a separate policy covering each insured. If any insurer which
has issued a policy of hazard, liability or other insurance required pursuant to this Deed of Trust
becomes insolvent or the subject of any bankruptcy, receivership or similar proceeding or if in
Beneficiary's reasonable opinion the financial responsibility of such insurer is or becomes
inadequate, Grantor shall, in each instance promptly upon the request of Beneficiary and at
Grantor's expense, obtain and deliver to Beneficiary a like policy (or, if and to the extent
permitted by Beneficiary, a certificate of insurance) issued by another insurer, which insurer and
policy meet the requirements of this Deed of Trust. All such policies for loss of or damage to the
Mortgaged Property shall contain a standard mortgage clause (without contribution) naming
Beneficiary as mortgagee with loss proceeds payable to Beneficiary notwithstanding (i) any act,
failure to act or negligence of or violation of any warranty, declaration or condition contained in
any such policy by any named insured; (ii) the occupation or use of the Mortgaged Property for
purposes more hazardous than permitted by the terms of any such policy; (iii) any foreclosure or
other action by Beneficiary under this Deed of Trust; or (iv) any change in title to or ownership
of the Mortgaged Property or any portion thereof, such proceeds to be held for application as
provided in this Deed of Trust. A copy of each initial insurance policy (or a satisfactory
certificate of insurance) shall be delivered to Beneficiary at the time of execution of this Deed of
Trust, with premiums fully paid, and each renewal or substitute policy (or certificate) shall be
delivered to Beneficiary, with premiums fully paid, at least ten (10) days before the termination
of the policy it renews or replaces. Grantor shall pay all premiums on policies required
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hereunder as they become due and payable and promptly deliver to Beneficiary evidence
satisfactory to Beneficiary of the timely payment thereof. If any loss occurs at any time when
Grantor has failed to perform Grantor's covenants and agreements in this section, Beneficiary
shall nevertheless be entitled to the benefit of all insurance covering the loss and held by or for
Grantor, to the same extent as if it had been made payable to Beneficiary. Upon any foreclosure
hereof or transfer of title to the Mortgaged Property in extinguishment of the whole or any part
of the secured indebtedness, all of Grantor's right, title and interest in and to the insurance
policies referred to in this section (including unearned premiums) and all proceeds payable
thereunder shall thereupon vest in the purchaser at foreclosure or other such transferee, to the
extent permissible under such policies. Beneficiary shall have the right (but not the obligation)
to receive the proceeds of, all insurance for loss of or damage to the Mortgaged Property. If
Grantor fails to act reasonably and promptly in making proof of loss for, or settling or adjusting
any claim under, any such insurance, then Beneficiary shall have the right to make such proof
and settle and/or adjust, such claim; and the expenses incurred by Beneficiary in the adjustment
and collection of insurance proceeds shall be a part of the secured indebtedness and shall be due
and payable to Beneficiary on demand. Beneficiary shall not be, under any circumstances, liable
or responsible for failure to collect or exercise diligence in the collection of any of such proceeds
or for the obtaining, maintaining or adequacy of any insurance or for failure to see, to the proper
application of any amount paid over to Grantor. Any such proceeds received by Beneficiary
shall, after deduction therefrom of all reasonable expenses actually incurred by Beneficiary,
including attorneys' fees, at Beneficiary's option be (a) released to Grantor, or (b) applied (upon
compliance with such reasonable terms and conditions as may be required by Beneficiary) to
repair or restoration, either partly or entirely, of the Mortgaged Property so damaged, or (c)
applied to the payment of the secured indebtedness in such order and manner as Beneficiary, in
its sole discretion, may elect, whether or not due; provided, however, that Beneficiary shall make
such proceeds available to Grantor to pay for restoration or repair of the Mortgaged Property, so
damaged, if either (i) the amount of such proceeds is less than 5% of the construction costs, or
(ii) Grantor agrees to reasonable, Construction Loan provisions (primarily regarding advances of
those proceeds and Beneficiary's "pricing" of its activities and expenses connected therewith)
and amendments to the Loan Documents executed in connection with the Note, as then proposed
by Beneficiary. In any event, the unpaid portion of the secured indebtedness shall remain in full
force and effect and the payment thereof shall not be excused. Grantor shall at all times comply
with the requirements of the insurance policies required hereunder and of the issuers of such
policies and of any board of fire underwriters or similar body as applicable to or affecting the
Mortgaged Property.
3.04 Taxes and Other Impositions. Grantor will pay all taxes and assessments against or
affecting the Mortgaged Property as the same become due and payable, and, if Grantor fails to do
so, Beneficiary may pay them, together with all costs and penalties thereon, at Grantor's expense
or out of an individual reserve account created to fund any necessary repairs for Mortgaged
Property maintained by a first lien lender or bank trustee. Grantor, however, may in good faith,
in lieu of paying such taxes and assessments as they become due and payable, contest by
appropriate proceedings the validity thereof, and pending such contest Grantor shall not be
deemed in default hereunder because of such nonpayment, (i) if prior to delinquency of the
asserted tax or assessment, Grantor furnishes Beneficiary an indemnity bond, conditioned that
such tax or assessment with interest, cost and penalties be paid as herein stipulated, secured by a
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deposit in cash, or security or surety acceptable to Beneficiary, in the amount of the contested tax
or assessment, and a reasonable additional sum to pay all possible costs, interest and penalties
imposed or incurred in connection therewith, and (ii) if Grantor promptly pays any amount
adjudged by a court of competent jurisdiction to be due, with all costs, penalties and interest
thereon, before such judgment becomes final or before any writ or order is issued under which
the Mortgaged Property may be sold pursuant to such judgment, whichever first occurs.
Grantor shall provide to Beneficiary, on or before January 31 of each year during the term of the
Note secured hereby, written evidence that all ad valorem taxes and other assessments against
the Mortgaged Property have been paid in full.
3.05 Tax and Insurance Escrow. Intentionally omitted.
3.06 Assignment of Awards. If the lien secured by this Deed of Trust is first and superior,
Grantor will hereby assign all judgments, decrees and awards for injury or damage to the
Mortgaged Property, all awards or settlements pursuant to proceedings for condemnation thereof,
in their entirety to Beneficiary, who may apply the same to the indebtedness secured hereby in
such manner as it may elect. Grantor will further hereby authorize Beneficiary to execute and
deliver valid acquittances for, and to appeal from, any such award, judgment or decree in the
name of Grantor. In the event Beneficiary, as a result of any such judgment or decree of award,
believes that the payment or performance of any obligation secured by this Deed of Trust is
impaired, Grantor authorizes Beneficiary to declare, without notice, all of the indebtedness
secured hereby immediately due and payable.
3.07 Trustee's Title and Future Laws. If, while this trust is in force, the title of Trustee to,
or the interest of Beneficiary in, the Mortgaged Property or any part thereof, shall be endangered
or shall be attacked directly or indirectly, Grantor authorizes Beneficiary, at Grantor's expense, to
take all necessary and proper steps for the defense of such title or interest, including the
employment of counsel, the prosecution or defense of litigation, and the compromise or
discharge of claims made against such title or interest. If at any time any law shall be enacted
imposing or authorizing the imposition of any tax upon this Deed of Trust, or upon any rights,
titles, liens, or security interests created hereby, or upon the Note, or any part thereof, Grantor
shall immediately pay all such taxes. In the alternative, Grantor may, in the event of the
enactment of such a law, and must, if it is unlawful for Grantor to pay such taxes, prepay the
Note and the Other Indebtedness in full within sixty (60) days after demand therefore by
Beneficiary. Grantor shall at any time and from time to time, furnish promptly, upon request, a
written statement or affidavit, in such form as may be required by Beneficiary, stating the unpaid
balance of the Note, and that there are no offsets or defenses against full payment of the Note
and performance of the terms hereof, or if there are any such offsets and defenses, specifying
them.
3.08 Repayment to Beneficiary. If, pursuant to any covenant contained herein or in any
other instrument executed in connection with the loan evidenced by the Note or in connection
with any Other Indebtedness secured hereby, Beneficiary shall expend any money chargeable to
Grantor or subject to reimbursement by Grantor under the terms of such covenant or agreement,
Grantor will repay the same to Beneficiary immediately at the place where the Note or Other
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Indebtedness secured hereby is payable, together with interest thereon at the rate of interest
payable on account of the Note or such Other Indebtedness in the event of a default hereunder
from and after the date of Beneficiary's making such payment. The sum of each such payment
shall be added to the indebtedness hereby secured and thereafter shall form a part of the same,
and it shall be secured by this Deed of Trust and, by subrogation to all of the rights of the person
or entity receiving such payment.
3.09 Condition of Property. Upon completion of certain renovations, additions and
improvements to the Project, Grantor will keep every part of the Mortgaged Property in good
condition and presenting a good appearance, making promptly all repairs, renewals and
replacements necessary to such end, and doing promptly all else necessary to such end. Grantor
will discharge all claims for labor performed and material furnished therefore, and will not suffer
any lien of mechanics or materialman to attach to any part of the Mortgaged Property. Grantor
will guard every part of the Mortgaged Property from removal, destruction and damage, and will
not do or suffer to be done any act whereby the value of any part of the Mortgaged Property may
be lessened.
3.10 Successors. If the ownership, control or management of the Mortgaged Property or any
part thereof becomes vested in a person other than Grantor, or in the event of a change of
ownership of more than thirty percent (30 %) interest in any Grantor other than an individual,
Grantor agrees that Beneficiary may, without notice to Grantor, deal with such successor or
successors in interest with reference to this Deed of Trust and to the indebtedness hereby secured
in the same manner as with Grantor without in any way vitiating or discharging Grantor's
liability hereunder or upon the indebtedness hereby secured. No sale of the Mortgaged Property,
and no forbearance on the part of Beneficiary, and no extension of the time for the payment of
the indebtedness hereby secured, given by Beneficiary, shall operate to release, discharge,
modify, change or affect the original liability of Grantor or the liability of any guarantors or
sureties of Grantor, either in whole or in part.
3.11 Compliance with Governmental Requirements. Grantor covenants that the Mortgaged
Property and the improvements now or hereafter erected thereupon and the intended use thereof
by Grantor comply with all Governmental Requirements, including, without limitation, all
applicable restrictive covenants, zoning ordinances, subdivision and building codes, flood
disaster laws, applicable health and Environmental Laws and Regulations and all other
ordinances, orders or requirements issued by any state, federal or municipal authorities having or
claiming jurisdiction over the Mortgaged Property.
Any rehabilitation of an abandoned or foreclosed upon home or residential property under NSP
shall be to the extent necessary to comply with applicable, laws, codes, and other requirements
related to housing safety, quality, and habitability, in order to sell, rent, or redevelop such homes
and properties. Rehabilitation may include improvements to increase the energy efficiency or
conservation of such homes and properties or provide a renewable energy source or sources for
such homes and properties. Housing and Economic Recovery Act Section 2301 (d)(2) of 2008.
The eligibility of renewable energy equipment on existing structures shall be determined by the
Beneficiary.
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Housing that is constructed, including new construction, or rehabilitation with NSP funds must
meet all applicable local codes, rehabilitation standards, ordinances, and zoning ordinances at the
time of completion. In the absence of a local code for new construction or rehabilitation, the
housing must meet the most current International Building Code. In addition, all NSP funded
housing must meet the Texas Minimum Construction Standards, as published in the Texas NSP
NOFA. NSP assisted new construction or rehabilitation will comply with HUD Program lead -
based paint requirements including lead screening in housing built before 1978 in accordance
with 24 CFR Part 92.355 and 24 CFR Part 35, subparts A, B, J, K, M, and R. Multifamily
housing assisted with NSP funds must meet the accessibility requirements at 24 CFR part 8,
which implements Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. Section 794) and
covered multifamily dwellings, as defined at 24 CFR 100.201, and the design and construction
requirements at 24 CFR 100.205, which implement the Fair Housing Act (42 U.S.C. 3601 - 3619).
Finally, NSP assisted housing must meet Energy Efficiency Standards in accordance with
Section 2306.187 of the Texas Government Code.
3.12 Money Laundering; Anti - Terrorism Laws.
(a) Grantor will furnish all of the funds for the purchase of the Mortgaged Property,
other than funds supplied by Beneficiary, and such funds will not be from sources that are
described in 18 U.S.C.A. §1956 and §1957 as funds or property derived from "specified
unlawful activity."
(b) None of Grantor, and constituent party nor Guarantor, if applicable, (nor any person
or entity owning an interest in Grantor, and constituent party or Guarantor, if applicable) (i) is a
Prohibited Person, or (ii) has violated any Anti- Terrorism Laws. No Prohibited Person holds or
owns any interest of any nature whatsoever in Grantor, any constituent party or Guarantor, if
applicable, as applicable, and none of the funds of Grantor, any constituent party or Guarantor, if
applicable, have been derived from any activity in violation of Anti- Terrorism Laws.
3.13 No Foreign Person. Neither Maker, nor Guarantor, if applicable, is a "foreign person"
within the meaning of §1445(0(3) of the Tax Code.
3.14 Payment of Labor and Materials. Grantor will promptly pay all bills for labor,
materials, and specifically fabricated materials incurred in connection with the Mortgaged
Property and never permit to exist in respect of the Mortgaged Property or any party thereof any
lien or security interest, even though inferior to the liens and security interest, hereof, for any
such bill, and in any event never permit to be created or exist in respect of the Mortgaged
Property or any part thereof any other or additional lien or security interest on a parity with,
superior, or inferior to any of the liens or security interest hereof, except for the Permitted
Exceptions.
3.15 Sources and Uses of Funds. Without limiting the requirements of Section 3.12 hereof,
Grantor has taken, and shall continue to take until the Indebtedness is fully repaid and each and
all of the Obligations are satisfied in full, such measures as are required by any and all Anti -
Terrorism Laws to assure that the funds invested in Grantor and/or used to make payments on the
Indebtedness or the Obligations are derived from (a) transactions and sources that do not violate
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any Anti - Terrorism Laws, nor to the extent such funds originate outside the United States, do not
violate the laws of the jurisdiction from which they originated; and (b) permissible sources
under Anti - Terrorism Laws or, to the extent such funds originate outside the United States, under
the laws of the jurisdiction from which they originated. If Beneficiary reasonably believes that
Grantor, Guarantor, if applicable, any constituent party, or any affiliate of any such parties may
have breached any of the representations, warranties or covenants set forth in this Deed of Trust
or the other Loan Documents relating to any Anti - Terrorism Laws, any violations of the Byrd
Amendment referenced herein and Section 3.16 hereof, or the identity of any person or entity as
a Prohibited Person, or person influencing or attempting to influence the federal persons
referenced herein and Section 3.16 hereof, then, Beneficiary shall have the right, with or without
notice to Grantor, to (1) notify the appropriate governmental authority and to take such action as
such governmental authority or applicable Anti- Terrorism Laws or Byrd Amendment may direct;
(2) withhold Loan advances and segregate the assets constituting the Loan or any of Grantor's
funds or assets deposited with or otherwise controlled by Beneficiary pursuant to the Loan
Documents; (3) decline any payment (or deposit such payment with an appropriate United States
governmental authority or court) or decline any prepayment or consent request; and/or (4)
declare an Event of Default and immediately accelerate the Loan in connection therewith,
Grantor agrees that none of Grantor, Guarantor, if applicable, nor any constituent party will
assert any claim (and hereby waives, for itself and on behalf of its affiliates, successors, assigns,
representatives or agents for any form of damages as a result of any of the foregoing actions,
regardless of whether or not Beneficiary 's reasonable belief is ultimately demonstrated to be
accurate. Without limiting the requirements of Section 3.11 hereof, Grantor has taken, and shall
continue to take until the Indebtedness is fully repaid and each and all of the Obligations are
satisfied in full, such measures as are required by the Byrd amendment to the fiscal 1990
appropriations measures for the United States Department of the Interior (P. L. 101 -121) and any
guidelines and rules issued by any federal entity in connection therewith, if applicable, to assure
that no federal appropriated funds have been paid or will be paid, by or on behalf of Grantor, (i)
to any person influencing or attempting to influence, or (ii) for influencing or attempting to
influence an officer or employee of any agency, a Member of Congress, an officer or employee
of Congress, or an employee of a Member of Congress in connection with this award and loan
under the NSP.
3.16 Byrd Amendment: Prohibition for Influencing Federal Entities. Grantor covenants
that, to the best of Grantor's knowledge, Grantor has complied with all restrictions, certifications
and disclosure requirements contained in the Byrd amendment to the fiscal,1990 appropriations
measures for the United States Department of the Interior (P.L. 101 -121) and with any guidelines
and rules issued by any federal entity in connection therewith, if applicable.
ARTICLE IV
Events of Default
4.01 Events of Default. The following shall be events of default ( "Events of Default ")
hereunder:
(a) The sale of the Mortgaged Property, or any part thereof without, the prior written
consent of Beneficiary, except the sale to an Eligible Household.
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(b) Grantor's agreement to or the granting of an easement, restrictive covenant or other
encumbrance affecting the Mortgaged Property without the prior written consent of Beneficiary.
(c) If Grantor is a corporation, partnership, or limited liability company, more than thirty
percent (30 %) of ownership of Grantor (determined by interest held and not by number of the
shareholders, partners or members, as applicable) changes other than changes resulting from the
transfer of shares or interest among the present owners of Grantor, such determination to be
made by aggregating all ownership changes (other than those involving only the present owners
of Grantor) occurring subsequent to the date hereof.
(d) Grantor's failure to promptly pay when due the indebtedness secured hereby, or any
part thereof and such failure continues for a period of thirty (30) days after written notice of such
failure is given by Beneficiary to Grantor; or Grantor's failure to keep and perform any of the
covenants (other than the failure to pay the indebtedness) or agreements contained herein or in
any of the other Loan Documents within thirty (30) days after written notice of such failure is
given by Beneficiary to Grantor.
(e) Beneficiary's discovery that any statement, representation or warranty in the Note,
this Deed of Trust or the other Loan Documents, or in any other writing delivered to Beneficiary
in connection with the indebtedness secured hereby is false, misleading or erroneous in any
material respect.
(f) If Grantor, or any person liable for the indebtedness secured hereby, or any part
thereof, including any guarantor of or surety for the performance of any obligation hereunder, (i)
files a voluntary petition in bankruptcy; (ii) makes an assignment for the benefit of any creditor;
(iii) suffers an order for relief in bankruptcy to be entered against it; (iv) admits in writing its
inability to pay its debts generally as they become due; (v) applies for or consents to the
appointment of a receiver, trustee, or liquidator of Grantor or of any such guarantor or surety or
of all or a substantial part of its assets; (vi) takes advantage of or seeks any relief under any
bankruptcy, reorganization, debtor's relief or other insolvency law now or hereafter existing; (vii)
files an answer admitting the material allegations of, or consenting to, or defaulting in, a petition
against Grantor or any such guarantor or surety, in any bankruptcy, reorganization, or other
insolvency proceedings; or (viii) institutes or voluntarily is or becomes a party to any other
judicial proceedings intended to effect a discharge of the debts of Grantor or of any guarantor or
surety, in whole or in part, or to effect a postponement of the maturity or the collection thereof,
or to effect a suspension of any of the rights or powers of Beneficiary granted in the Note, this
Deed of Trust or in any other instrument evidencing or securing the indebtedness secured hereby.
(g) If an order, judgment or decree shall be entered by any court of competent
jurisdiction appointing a receiver, trustee or liquidator of Grantor or of any guarantor or surety or
of all or any substantial part of the assets of Grantor or of any such guarantor or surety; or if
Grantor or any guarantor or surety shall fail to pay any money judgment against it within thirty
(30) days after any such judgment becomes final and non - appealable.
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(h) If Grantor or any such guarantor or surety shall fail to have discharged any
attachments, sequestration, or similar proceedings against any assets of Grantor or of any
guarantor or surety which remains undischarged and unstayed for a period of thirty (30)
consecutive days; or if the Mortgaged Property is placed under control or in the custody of any
court, or if Grantor abandons any of the Mortgaged Property.
(i) Grantor's execution or delivery of any pledge, security agreement, mortgage or deed
of trust covering all or any portion of the Mortgaged Property ( "Subordinate Mortgage ") without
the prior written consent of Beneficiary (which consent may be withheld). In the event of consent
by Beneficiary to the foregoing or in the event the foregoing prohibition is determined by a court
of competent jurisdiction to be unenforceable by the provisions of any applicable law, Grantor
will not execute or deliver any Subordinate Mortgage unless there shall have been delivered to
Beneficiary not less than ten (10) days prior to the date thereof a copy thereof which shall
contain express covenants to the effect:
(i) That the Subordinate Mortgage is in all respects unconditionally subject and
subordinate to the lien, security interest and assignment evidenced by this Deed of Trust and
each term and provision hereof;
(ii) That if any action or proceeding shall be instituted to foreclose the
Subordinate Mortgage (regardless of whether the same is a judicial proceeding or pursuant to a
power of sale contained therein), no tenant of any portion of the Mortgaged Property will be
named as a party defendant, nor will any action be taken with respect to the Mortgaged Property
which would terminate any occupancy or tenancy of the Mortgaged Property without the prior
written consent of Beneficiary;
(iii) That all of the rents, royalties (including, but not limited to, royalties arising
out of the sale of oil, gas, and any other minerals produced from the Mortgaged Property, or any
properties pooled with the Mortgaged Property), issues, profits, revenue, income and other
benefits derived from the Mortgaged Property or arising from the use or enjoyment of any
portion thereof or from any lease or agreement pertaining thereto, if collected through a receiver
or by the holder of the Subordinate Mortgage, shall be applied first to the obligations secured by
this Deed of Trust, including principal and interest due and owing on or to become due and
owing on the Note and the Other Indebtedness secured hereby and then to the payment of
maintenance, operating charges, taxes, assessments, and disbursements incurred in connection
with the ownership, operating and maintenance of the Mortgaged Property; and
(iv) That if any action or proceeding shall be brought to foreclose the Subordinate
Mortgage, written notice of the commencement thereof will be given to Beneficiary
contemporaneously with the commencement of such action or proceeding.
(j) The liquidation, termination, dissolution, merger, consolidation or failure to maintain
good standing in the State of Texas (or in the case of an individual, the death or legal incapacity)
of the owner of the Mortgaged Property or any person obligated to pay any part of the secured
indebtedness.
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(k) The liens, mortgages or security interests of Beneficiary in any of the Mortgaged
Property become unenforceable in whole or in part, or cease to be of the priority herein required,
or the validity or enforceability thereof, in whole or in part, shall be challenged or denied by
Grantor or any person obligated to pay any part of the secured indebtedness.
(1) If the ownership of any of the Mortgaged Property is forfeited or otherwise
transferred to any governmental agency under a federal or state law for which forfeiture of
property is a potential penalty or remedy.
(m) A default or event of default occurs under any other documents executed as security
for or in connection with the Note or under any other documents evidencing a loan or
indebtedness owed by Grantor to Beneficiary or any other agency of the State of Texas, and the
same is not remedied within the applicable period for curing such default (if any).
(n) Any portion of the surface of the Mortgaged Property is disturbed or otherwise
used by any person in connection with the exploration for or production of any oil, gas or other
minerals without the prior written consent of Beneficiary.
(o) If Grantor, without Beneficiary's consent, (i) seeks or acquiesces in a zoning
reclassification, zoning variance or special exception to zoning of all or any portion of the
Mortgaged Property, (ii) grants or consents to any easement, dedication, plat, or restriction (or
allows any easement to become enforceable by prescription), (iii) seeks or acquiesces to any
imposition of any addition of Governmental Requirements or any amendment or modification
thereof, covering all or any portion of the Mortgaged Property.
4.02 Remedies. Upon the occurrence of any Event of Default, Beneficiary, at its sole
option, may declare the Note and all Other Indebtedness secured hereby immediately due and
payable and/or may pursue any rights and remedies it may have hereunder or at law or in equity.
ARTICLE V
Noniudicial Foreclosure and Sale
5.01 Trustee's Sale. Upon an Event of Default, Grantor authorizes and empowers the
Trustee, at the request of Beneficiary, at any time during the continuance of any default, to sell
all or any portion of the Mortgaged Property, at public auction, to the highest bidder, for cash or
for credit against the indebtedness secured hereby if Beneficiary is the highest bidder, at the
county court house of the county in Texas in which such Mortgaged Property or any part thereof
is situated, as herein described, in the area designated by the commissioners court for such
purpose pursuant to a recordation of such designation in the real property records of such county,
or if no such recorded designation by the commissioners court has been made, in the area at the
county court house designated in the notice of proposed sale posted, filed and served in
accordance with the further provisions of this paragraph, between the hours of 10:00 o'clock
A.M. and 4:00 o'clock P.M. on the first Tuesday of any month. The Trustee shall give notice of
the time, place and terms of said sale, and of the property to be sold, as follows:
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Notice of such proposed sale shall be given by posting written notice thereof at least
twenty -one (21) days preceding the date of the sale at the court house door, and by filing a copy
of the Notice in the office of the county clerk of the county in which the sale is to be made, and if
the property to be sold is situated in more than one county, one notice shall be posted at the court
house door and filed with the county clerk of each county in which the property to be sold is
situated. In addition, Beneficiary shall, at least twenty -one (21) days preceding the date of sale,
serve written notice of the proposed sale by certified mail on each debtor obligated to pay the
debt secured hereby according to the records of beneficiary. Service of such notice shall be
completed upon deposit of the notice, enclosed in a postpaid wrapper, properly addressed to such
debtor at the most recent address as shown by the records of Beneficiary, in a post office or
official depository under the care and custody of the United States Postal Service. The affidavit
of any person having knowledge of the facts to the effect that such service was completed shall
be prima facie evidence of the fact of service.
Any notice that is required or permitted to be given to Grantor may be addressed to
Grantor at Grantor's mailing address. Any notice that is to be given by certified mail to any other
debtor may, if no address for such other debtor is shown by the records of Beneficiary, be
addressed to such other debtor at Grantor's mailing address. Notwithstanding the foregoing
provisions of this paragraph, notice of such sale given in accordance with the requirements of the
applicable law of the State of Texas in effect at the time of such sale shall constitute sufficient
notice of such sale. Grantor hereby authorizes and empowers the Trustee to sell all or any
portion of the Mortgaged Property, together or in lots or parcels, as the Trustee may deem
expedient, and to execute and deliver to the purchaser or purchasers of such property, good and
sufficient deeds of conveyance of fee simple title with covenants of general warranty made on
behalf of the Grantor. In no event shall the Trustee be required to exhibit, present or display at
any such sale, any of the personalty described herein to be sold at such sale. The Trustee making
such sale shall receive the proceeds thereof and shall apply the same as follows: (i) first, he shall
pay the reasonable expense of executing this trust including a reasonable Trustee's fee or
commission; (ii) second, he shall pay, so far as may be possible, the indebtedness secured
hereby, discharging first that portion of the indebtedness arising under the covenants or
agreements herein contained and not evidenced by the Note; (iii) third, he shall pay the residue,
if any, to the person or persons legally entitled thereto. Payment of the purchase price to the
Trustee shall satisfy the obligation of the purchaser at such sale therefore, and such purchaser
shall not be bound to look after the application thereof. The sale or sales by the Trustee of less
than the whole of the Mortgaged Property shall not exhaust the power of sale herein granted, and
the Trustee is specifically empowered to make successive sale or sales under such power until
the whole of the Mortgaged Property shall be sold; and if the proceeds of such sale or sales of
less than the whole of such Mortgaged Property shall be less than the aggregate of the
indebtedness secured hereby and the expense of executing this trust, this Deed of Trust and the
lien, security interest and assignment hereof shall remain in full force and effect as to the unsold
portion of the Mortgaged Property just as though no sale or sales had been made; provided,
however, that Grantor shall never have any right to require the sale or sales of less than the
whole of the Mortgaged Property, but Beneficiary shall have the right, at its sole election, to
request the Trustee to sell less than the whole of the Mortgaged Property. If default is made
hereunder, the holder of the indebtedness or any part thereof on which the payment is delinquent
shall have the option to proceed with foreclosure in satisfaction of such item either through
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judicial proceedings or by directing the Trustee to proceed as if under a full foreclosure,
conducting the sale as herein provided without declaring the entire indebtedness secured hereby
due, and if sale is made because of default of an installment, or a part of an installment, such sale
may be made subject to the unmatured part of the Note and Other Indebtedness secured by this
Deed of Trust; and it is agreed that such sale, if so made, shall not in any manner affect the
unmatured part of the indebtedness secured by this Deed of Trust, but as to such unmatured part,
this Deed of Trust shall remain in full force and effect as though no sale had been made under
the provisions of this paragraph. Several sales may be made hereunder without exhausting the
right of sale for any unmatured part of the indebtedness secured hereby.
5.02 Successor Trustee. If the Trustee shall die or become disqualified from acting in the
execution of this trust, or shall fail or refuse to execute the same when requested by Beneficiary
to do so; or if, for any reason, Beneficiary shall prefer to appoint a substitute Trustee to act
instead of the Trustee named herein, Beneficiary shall have full power to appoint, by written
instrument, a substitute Trustee, and, if necessary, several substitute Trustees in succession, who
shall succeed to all the estate, rights, powers, and duties of the original Trustee named herein.
Such appointment may be executed by any authorized agent of Beneficiary; and if Beneficiary is
a corporation and such appointment is executed in its behalf by any officer of such corporation,
such appointment shall be conclusively presumed to be executed with authority and shall be
valid and sufficient without proof of any action by the board of directors or any superior officer
of the corporation. In the event of an assignment of the interests of Beneficiary under this Deed
of Trust, all rights and remedies granted to Beneficiary in this Deed of Trust shall inure to the
benefit of, and may be exercised by, the assignee.
5.03 Acts and Statements of Trustee. Grantor hereby agrees, in its behalf and in behalf of its
heirs, executors, administrators, successors, personal representatives and assigns, that any and all
statements of fact or other recitals made in any deed of conveyance given by the Trustee, with
respect to the identity of Beneficiary, or with respect to the occurrence or existence of any
default, or with respect to the acceleration of the maturity of any indebtedness secured hereby, or
with respect to the request to sell, the notice of sale, the giving of notice to all debtors legally
entitled thereto, the time, place, terms, and manner of sale, and receipt, distribution, and
application of the money realized therefrom, or with respect to the due and proper appointment
of a substitute Trustee, and, without being limited by the foregoing, with respect to any other act
or thing having been duly done by the Beneficiary or by the Trustee hereunder, shall be taken by
all courts of law and equity as prima facie evidence that the statements or recitals state facts and
are without further question to be so accepted, and Grantor hereby ratifies and confirms every act
that Trustee or any substitute Trustee hereunder may lawfully do in the premises by virtue
hereof.
5.04 Disaffirmance by Purchaser. The purchaser at any trustee's or foreclosure sale
hereunder may disaffirm any easement granted, or rental, lease or other contract made, in
violation of any provision of this Deed of Trust, and may take immediate possession of the
Mortgaged Property free from, and despite the terms of, such grant of easement and rental or
lease contract, subject to the Protecting Tenants at Foreclosure Act of 2009, Title VII of the
Helping Families Save Their Homes Act of 2009 (Public Law 111 -22, §702) and other
governmental requirements.
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5.05 Beneficiary May Bid. Beneficiary shall have the right to become the purchaser at all
sales to enforce this trust, being the highest bidder, and to have the amount of which such
property is sold credited on the indebtedness secured hereby which is then owing.
ARTICLE VI
Hazardous Materials
6.01 Definitions. For the purpose of this Deed of Trust, Grantor, Beneficiary and Trustee
agree that, unless the context otherwise specifies or requires, the following terms shall have the
meaning herein specified:
(a) Hazardous Materials: Any substance the presence of which on the Mortgaged
Property is regulated by any Governmental Requirements and Environmental Laws and
Regulations, including but not limited to: (i) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), as amended from time
to time, and regulations promulgated thereunder; (ii) any "hazardous substance" as defined by
the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. Section 9601 et seq.) ( "CERCLA" or "SuperFund "), as amended from time to time, and
regulations promulgated thereunder; (iii) asbestos; (iv) polychlorinated biphenyls; (v) any
petroleum -based products; and (vi) underground storage tanks, whether empty, filled or partially
filled with any substance.
(b) Hazardous Materials Contamination: The contamination (whether presently existing
or hereafter occurring) of the improvements, facilities, soil, groundwater, air or other elements
on, over or under the Mortgaged Property by Hazardous Materials, or the contamination of the
improvements, facilities, soil, ground- water, air or other elements on, over or under any other
property as a result of Hazardous Materials at any time (whether before or after the date of this
Deed of Trust) emanating from the Mortgaged Property.
6.02 Representations and Warranties. Grantor hereby represents and warrants that to the
best of the Grantor's knowledge:
(a) No Hazardous Materials are located on the Mortgaged Property or have been
released into the environment, or deposited, discharged, placed or disposed of at, on, under or
near the Mortgaged Property, or transported to or from the Mortgaged Property. No portion of
the Mortgaged Property is being used or, to the best of Grantor's knowledge, has been used at
any previous time, for the disposal, storage, treatment, processing, manufacturing or other
handling of Hazardous Materials nor is any part of the Mortgaged Property affected by any
Hazardous Materials Contamination.
(b) No Hazardous Materials are located on property adjoining the Mortgaged
Property. No property adjoining the Mortgaged Property has ever been used at any previous
time for the disposal, storage, treatment, processing, manufacturing or other handling of
Hazardous Materials. No property adjoining the Mortgaged Property is affected by Hazardous
Materials Contamination.
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(c) No asbestos or asbestos containing materials have been installed, used,
incorporated into, or disposed of on the Mortgaged Property.
(d) No polychlorinated biphenyls or materials containing polychlorinated biphenyls
are located on or in the Mortgaged Property, in the form of electrical transformers, fluorescent
light fixtures with ballasts, cooling oils, or any other device or form.
(e) No underground storage tanks are located on the Mortgaged Property or, to the
best of Grantor's knowledge, were previously located on the Mortgaged Property and
subsequently removed or filled.
(f) No investigation, administrative order, consent order, agreement, litigation or
settlement with respect to Hazardous Materials or Hazardous Materials Contamination is
proposed, threatened, anticipated or in existence with respect to the Mortgaged Property. The
Mortgaged Property and its existing and prior uses comply and at all times have complied with
any applicable Governmental Requirements relating to environmental matters or Hazardous
Materials. There is no condition on the Mortgaged Property which is in violation of any
applicable Governmental Requirements relating to Hazardous Materials, and Grantor has
received no communication from or on behalf of any Governmental Authority that any such
condition exists. The Mortgaged Property is not currently on, and to the best of Grantor's
knowledge, has never been on, any federal, state or local "Superfund" or "Superlien" list.
(g) Except for studies, audits, and reports pertaining to the Mortgaged Property which
have been made available to Beneficiary, there have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted by or which are in the possession of or
available to Grantor in relation to the Mortgaged Property.
(h) All representations and warranties contained in this Section 6.02 shall survive the
consummation of the transactions contemplated by this Deed of Trust.
6.03 Covenants. Grantor agrees: (a) that Grantor shall not receive, store, dispose or release
any Hazardous Materials on or to the Mortgaged Property or transport any Hazardous Materials
to or from the Mortgaged Property or permit the existence of any Hazardous Materials
Contamination; (b) to give written notice to Beneficiary immediately upon Grantor's acquiring
knowledge of the presence of any Hazardous Materials on the Mortgaged Property or of the
transport of any Hazardous Materials to or from the Mortgaged Property or of the existence of
any Hazardous Materials Contamination, with a full description thereof; (c) promptly, at
Grantor's sole cost and expense, to comply with any Governmental Requirements requiring the
removal, treatment or disposal of such Hazardous Materials or Hazardous Materials
Contamination and provide Beneficiary with satisfactory evidence of such compliance; (d) to
provide Beneficiary, within thirty (30) days after demand by Beneficiary, with financial
assurance evidencing to Beneficiary's satisfaction that the necessary funds are available to pay
the cost of removing, treating and disposing of such Hazardous Materials or Hazardous Materials
Contamination and discharging any assessments which may be established on the Mortgaged
Property as a result thereof; and (e) to insure that all leases, licenses, and agreements of any kind
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now or hereafter executed which permit any party to occupy, possess, or use in any way the
Mortgaged Property or any part thereof, whether written or oral, include an express prohibition
on the disposal or discharge of any Hazardous Materials at or affecting the Mortgaged Property,
and a provision that failure to comply with such prohibition shall expressly constitute a default
under any such agreement.
6.04 Liens. Grantor shall not cause or suffer any liens to be recorded against the Mortgaged
Property as a consequence of, or in any way related to, the presence, remediation or disposal of
Hazardous Materials in or about the Mortgaged Property, including any so- called state, federal or
local "Superfund" lien relating to such matters.
6.05 Site Assessments. Beneficiary (by its officers, employees and agents) at any time and
from time to time, either prior to or after the occurrence of an Event of Default, may contract for
the services of persons (the "Site Reviewers ") to perform environmental site assessments ( "Site
Assessments ") on the Mortgaged Property for the purpose of determining whether there exists on
the Mortgaged Property any environmental condition which could result in any liability, cost or
expense to the owner, occupier or operator of such Mortgaged Property arising under any
Governmental Requirements relating to Hazardous Materials. The Site Assessments may be
performed at any time or times, upon reasonable notice, and under reasonable conditions
established by Grantor which do not impede the performance of the Site Assessment. The Site
Reviewers are hereby authorized to enter upon the Mortgaged Property for such purposes. The
Site Reviewers are further authorized to perform both above and below - ground testing for
environmental damage or the presence of Hazardous Materials or Hazardous Materials
Contamination on the Mortgaged Property and such other tests on the Mortgaged Property as
may be necessary to conduct the Site Assessments in the reasonable opinion of the Site
Reviewers. Grantor will supply to the Site Reviewers such historical and operational
information regarding the Mortgaged Property as may be reasonably requested by the Site
Reviewers to facilitate the Site Assessments and will make available for meetings with the Site
Reviewers appropriate personnel having knowledge of such matters. On request, Beneficiary
shall make the results of such Site Assessments fully available to Grantor, which (prior to an
Event of Default) may at its election participate under reasonable procedures in the direction of
such Site Assessments and the description of tasks of the Site Reviewers. The cost of
performing such Site Assessments shall be paid by Grantor upon demand of Beneficiary and any
such obligations shall be indebtedness secured by this Deed of Trust.
6.06 INDEMNIFICATION GRANTOR SHALL AT ALL TIMES RETAIN ANY AND
ALL LIABILITIES ARISING FROM THE PRESENCE, HANDLING, TREATMENT,
STORAGE, TRANSPORTATION, REMOVAL OR DISPOSAL OF HAZARDOUS
MATERIALS ON THE MORTGAGED PROPERTY. REGARDLESS OF WHETHER
ANY SITE ASSESSMENTS ARE CONDUCTED HEREUNDER, AND REGARDLESS
OF WHETHER ANY EVENT OF DEFAULT (AS DEFINED IN SECTION 4.01 OF THIS
DEED OF TRUST) SHALL HAVE OCCURRED AND BE CONTINUING OR ANY
REMEDIES IN RESPECT TO THE MORTGAGED PROPERTY ARE EXERCISED BY
BENEFICIARY, GRANTOR SHALL, TO THE EXTENT AUHORIZED BY LAW AND
SUBJECT TO FUNDS LEGALLY AVAILABLE FOR THE PURPOSE, DEFEND,
INDEMNIFY AND HOLD HARMLESS BENEFICIARY AND TRUSTEE (AND ANY
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SUCCESSOR TO THE TRUSTEE) FROM AND AGAINST ANY AND ALL
LIABILITIES (INCLUDING STRICT LIABILITY), SUITS, ACTIONS, CLAIMS,
DEMANDS, PENALTIES, DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST
PROFITS, . CONSEQUENTIAL DAMAGES, INTEREST, PENALTIES, FINES AND
MONETARY SANCTIONS), LOSSES, COSTS AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND REMEDIAL
COSTS) (THE FOREGOING ARE HEREINAFTER COLLECTIVELY REFERRED TO
AS "LIABILITIES ") WHICH MAY NOW OR IN THE FUTURE (WHETHER BEFORE
OR AFTER THE CULMINATION OF THE TRANSACTIONS CONTEMPLATED BY
THIS DEED OF TRUST) BE INCURRED OR SUFFERED BY BENEFICIARY OR
TRUSTEE (OR ANY SUCCESSOR TO THE TRUSTEE) BY REASON OF, RESULTING
FROM, IN CONNECTION WITH, OR ARISING IN ANY MANNER WHATSOEVER
OUT OF THE BREACH OF ANY WARRANTY OR COVENANT OR THE
INACCURACY OF ANY REPRESENTATION OF GRANTOR CONTAINED OR
REFERRED TO IN THIS ARTICLE VI OR IN ANY LOAN AGREEMENT MADE AND
ENTERED INTO BETWEEN GRANTOR AND BENEFICIARY RELATING TO THE
MORTGAGED PROPERTY OR WHICH MAY BE ASSERTED AS A DIRECT OR
INDIRECT RESULT OF THE PRESENCE ON OR UNDER, OR ESCAPE, SEEPAGE,
LEAKAGE, SPILLAGE, DISCHARGE, EMISSION OR RELEASE FROM THE
MORTGAGED PROPERTY OF ANY HAZARDOUS MATERIALS OR ANY
HAZARDOUS MATERIALS CONTAMINATION OR ARISE OUT OF OR RESULT
FROM THE ENVIRONMENTAL CONDITION OF THE MORTGAGED PROPERTY
OR THE APPLICABILITY OF ANY GOVERNMENTAL REQUIREMENTS
RELATING TO HAZARDOUS MATERIALS.
SUCH LIABILITIES SHALL INCLUDE, WITHOUT LIMITATION: (I) INJURY
OR DEATH TO ANY PERSON; (II) DAMAGE TO OR LOSS OF THE USE OF ANY
PROPERTY; (III) THE COST OF ANY DEMOLITION AND REBUILDING OF ANY
IMPROVEMENTS NOW OR HEREAFTER SITUATED ON THE MORTGAGED
PROPERTY OR ADJACENT PROPERTY, AND THE COST OF ANY REPAIR OR
REMEDIATION OF ANY SUCH IMPROVEMENTS; (IV) THE COST OF ANY
ACTIVITY REQUIRED BY ANY GOVERNMENTAL AUTHORITY; (V) ANY
LAWSUIT BROUGHT, GOOD FAITH SETTLEMENT REACHED, OR
GOVERNMENTAL ORDER RELATING TO THE PRESENCE, DISPOSAL, RELEASE
OR THREATENED RELEASE OF ANY HAZARDOUS MATERIALS, ON, FROM OR
UNDER THE MORTGAGED PROPERTY; AND (VI) THE IMPOSITION OF ANY
LIENS ON THE MORTGAGED PROPERTY ARISING FROM THE ACTIVITY OF
GRANTOR OR GRANTOR'S PREDECESSORS IN INTEREST ON THE
MORTGAGED PROPERTY OR FROM THE EXISTENCE OF HAZARDOUS
MATERIALS UPON THE MORTGAGED PROPERTY OR HAZARDOUS MATERIALS
CONTAMINATION. THE COVENANTS, WARRANTIES, AGREEMENTS AND
INDEMNIFICATIONS CONTAINED IN THIS ARTICLE VI SHALL SURVIVE THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS DEED OF
TRUST.
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6.07 Right of Entry. Beneficiary shall have the right but not the obligation, without in any
way limiting Beneficiary's other rights and remedies under this Deed of Trust, to enter onto the
Mortgaged Property or to take such other actions as it deems necessary or advisable to clean up,
remove, resolve or minimize the impact of, or otherwise deal with, any Hazardous Materials or
Hazardous Materials Contamination on or under the Mortgaged Property following receipt of
any notice from any person or entity asserting the existence of any Hazardous Materials or
Hazardous Materials Contamination pertaining to the Mortgaged Property, or any part thereof
which, if true, could result in an order, notice, suit, imposition of a lien on the Mortgaged
Property, or other action, and/or which, in Beneficiary's sole opinion, could jeopardize
Beneficiary's security upon this Deed of Trust. All costs and expenses paid or incurred by
Beneficiary in the exercise of any such rights shall be indebtedness secured by this Deed of Trust
and shall be payable by Grantor upon demand.
ARTICLE VII
Additional Provisions
7.01 Rights of Beneficiary. If any of the indebtedness hereby secured shall become due and
payable, Trustee or Beneficiary shall have the right and power to proceed by a suit or suits in
equity or at law, whether for the specific performance of any covenant or agreement herein
contained or in aid of the execution of any power herein granted, or for any foreclosure
hereunder or for the sale of the Mortgaged Property under the judgment or decree of any court or
courts of competent jurisdiction or for the appointment of a receiver pending any foreclosure
hereunder or the sale of the Mortgaged Property under the order of a court or courts of competent
jurisdiction or under executory or other legal process, or for the enforcement of any other
appropriate legal or equitable remedy. Grantor agrees, to the full extent that it lawfully may, that
in case one or more of the Events of Default hereunder shall have occurred and shall not have
been remedied, then, and in every such case, the Beneficiary shall have the right and power to
enter into and upon and take possession of all or any part of the Mortgaged Property in the
possession of the Grantor, its successors or assigns, or its or their agents or servants, and may
exclude Grantor, its successors or assigns, and all persons claiming under Grantor, and its or
their agents or servants, wholly or partly therefrom; and, holding the same, the Beneficiary may
use, administer, manage, operate and control the Mortgaged Property and conduct the business
thereof to the same extent as Grantor, its successors or assigns, might at the time do and may
exercise all rights and powers of Grantor, in the name, place and stead of Grantor, or otherwise
as the Beneficiary shall deem best; and in the exercise of any of the foregoing rights and powers
Beneficiary shall not be liable to Grantor for any loss or damage thereby sustained.
7.02 The Lien. Any part of the Mortgaged Property may be released by the Beneficiary
without affecting the lien, security interest and assignment hereof against the remainder. The
lien, security interest and other rights granted hereby shall not affect or be affected by any other
security taken for the same indebtedness or any part thereof. The taking of additional security, or
the extension or renewal of the indebtedness secured hereby or any part thereof, shall not release
or impair the lien, security interest and other rights granted hereby, or affect the liability of any
endorser, guarantor or surety, or improve the right of any permitted junior lienholder; and this
Deed of Trust, as well as any instrument given to secure any renewal or extension of the
indebtedness secured hereby, or any part thereof, shall be and remain a first and prior lien, except
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as otherwise provided herein on all of the Mortgaged Property not expressly released until the
indebtedness secured hereby is completely paid.
7.03 Waiver. To the extent that Grantor may lawfully do so, Grantor agrees that Grantor shall
not assert and hereby expressly waives, any right under any statute or rule of law pertaining to
the marshalling of assets, the exemption of homestead, the administration of estates of decedents,
or other matter whatever to defeat, reduce or affect the right of Beneficiary, under the terms of
this Deed of Trust, to sell the Mortgaged Property for the collection of the indebtedness secured
hereby (without any prior or different resort for collection) or the right of Beneficiary, under the
terms of this Deed of Trust, to the payment of such indebtedness out of the proceeds of sale of
the Mortgaged Property in preference to every other person and claimant whatever (only
reasonable expenses of such sale being first deducted). No provision of this Deed of Trust or any
other document securing or pertaining to the Note shall be construed to impose on Beneficiary
any duty to sell the Mortgaged Property or any other collateral for the Note for collection of the
indebtedness secured by this Deed of Trust or to pursue any other remedy in Beneficiary's power
whatsoever. Grantor expressly waives and relinquishes any right or remedy which it may have
or be able to assert by reason of the provisions of Chapter 34 of the Business and Commerce
Code of the State of Texas, pertaining to the rights and remedies of sureties. To the full extent
permitted by applicable law, Grantor waives any right to require Beneficiary to use diligence in
collection of any indebtedness secured by this Deed of Trust, to proceed against or exhaust any
security or collateral for the loan evidenced by the Note, to mitigate Beneficiary's damages in
connection with the loan evidenced by the Note, or to pursue any other remedy in Beneficiary's
power whatsoever.
7.04 Subrogation. To the extent that proceeds of the Note are used to pay an outstanding lien,
charge or encumbrance against or affecting the Mortgaged Property, such proceeds have been
advanced by Beneficiary at Grantor's request, and Beneficiary shall be subrogated to all rights,
interests and liens owned or held by any owner or holder of such outstanding liens, charges and
encumbrances, irrespective of whether such liens, charges or encumbrances are released of
record.
7.05 Limitation on Interest. All agreements between Grantor and Beneficiary, whether now
existing or hereafter arising and whether written or oral, are expressly limited so that in no
contingency or event whatsoever shall the amount paid, or agreed to be paid, to Beneficiary for
the use, forbearance, or detention of the money to be loaned pursuant to the Note or otherwise, or
for the performance or payment of any covenant or obligation contained herein, exceed the
maximum amount permissible under applicable law. If from any circumstance whatsoever
fulfillment of any provision hereof at the time performance of such provision shall be due shall
involve transcending the limit of validity prescribed by law, then, ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if from any such circumstance
Beneficiary shall ever receive as interest under such Note or this Deed of Trust or otherwise an
amount that would exceed the highest lawful rate, such amount that would be excessive interest
shall be applied to the reduction of the principal amount owing under the Note or on account of
the Other Indebtedness secured hereby and not to the payment of interest or if such excessive
interest exceeds the unpaid balance of principal of the Note and such Other Indebtedness, such
excess shall be refunded to Grantor, or to the maker of the Note or other evidence of
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indebtedness if other than Grantor. All sums paid or agreed to be paid to Beneficiary for the use,
forbearance, or detention of the indebtedness secured hereby shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full so that the actual rate of interest on account of such
indebtedness is uniform throughout the term thereof. The terms and provisions of this Section
shall control and supersede every other provision of all agreements between Grantor, the maker
of the Note or other evidence of indebtedness if other than Grantor, and Beneficiary.
7.06 Waiver and Invalidity. No waiver of any default on the part of Grantor or breach of any
of the provisions of this Deed of Trust or of any other instrument executed in connection with the
indebtedness secured hereby shall be considered a waiver of any other or subsequent default or
breach, and no delay or omission in exercising or enforcing the rights and powers herein granted
shall be construed as a waiver of such rights and powers, and likewise no exercise or
enforcement of any rights or powers hereunder shall be held to exhaust such rights and powers,
and every such right and power may be exercised from time to time. If any provision of this
Deed of Trust is held to be illegal, invalid, or unenforceable under present or future laws
effective while this Deed of Trust is in effect, the legality, validity, and enforceability of the
remaining provisions of this Deed of Trust shall not be affected thereby, and in lieu of each such
illegal, invalid, or unenforceable provision there shall be added automatically as a part of this
Deed of Trust a provision as similar in terms to such illegal, invalid, or unenforceable provision
as may be possible and be legal, valid, and enforceable. If any of the liens, security interest or
assignment of rents created by this Deed of Trust shall be invalid or unenforceable, the
unsecured portion of the indebtedness secured hereby shall be completely paid prior to the
payment of the remaining and secured portion of such indebtedness and all payments made on
account of such indebtedness shall be considered to have been paid on and applied first to the
complete payment of the unsecured portion of such indebtedness.
7.07 Tenancy at Will. In the event of a trustee's sale hereunder and if at the time of such sale
the Grantor occupies the portion of the Mortgaged Property so sold, or any part thereof, Grantor
shall immediately become the tenant of the purchaser at such sale, which tenancy shall be a
tenancy from day to day, terminable at the will of either tenant or landlord, at a reasonable rental
per day based upon the value of the portion of the Mortgaged Property so occupied, such rental
to be due and payable daily to the purchaser. An action of forcible detainer shall lie if the tenant
holds over after a demand in writing for possession of such Mortgaged Property and premises;
and this agreement and any trustee's deed shall constitute a lease and agreement under which the
tenant's possession, each and all, arose and continued.
7.08 Security Agreement. With respect to any portion of the Mortgaged Property which
constitutes personal property or fixtures governed by the Uniform Commercial Code of the State
of Texas (hereinafter called the "Code "), this Deed of Trust shall constitute a security agreement
between Grantor as the Debtor and Beneficiary as the Secured Party, and Grantor hereby grants
to Beneficiary a security interest in such portion of the Mortgaged Property. Cumulative of all
other rights of Beneficiary hereunder, Beneficiary shall have all of the rights conferred upon
secured parties by the Code. Grantor will execute and deliver to Beneficiary all financing
statements that may from time to time be required by Beneficiary to establish and maintain the
validity and priority of the security interest of Beneficiary, or any modification thereof, and all
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costs and expenses of any searches reasonably required by Beneficiary. Beneficiary may exercise
any or all of the remedies of a secured party available to it under the Code with respect to such
property, and it is expressly agreed that if upon default Beneficiary should proceed to dispose of
such property in accordance with the provisions of the Code, then (10) days' notice by
Beneficiary to Grantor shall be deemed to be reasonable notice under any provision of the Code
requiring such notice; provided, however, that Beneficiary may at its option dispose of such
property in accordance with Beneficiary's rights and remedies with respect to the real property
pursuant to the provisions of this Deed of Trust, in lieu of proceeding under the Code.
7.09 Changes in Grantor's Identity. Grantor shall give advance notice in writing to
Beneficiary of any proposed change in Grantor's name, address, identity, or corporate structure
and will execute and deliver to Beneficiary, prior to or concurrently with the occurrence of any
such change, all additional financing statements that Beneficiary may require to establish and
maintain the validity and priority of Beneficiary's security interest with respect to any Mortgaged
Property described or referred to herein.
7.10 Fixtures. Some of the items of Mortgaged Property described herein are goods that are
or are to become fixtures related to the real estate described herein, and it is intended that as to
those goods, this Deed of Trust shall be effective as a financing statement filed as a fixture filing
from the date of its filing for record in the real estate records of the county in which the
Mortgaged Property is situated. Information concerning the security interest created by this
instrument may be obtained from Beneficiary, as secured party, at the address of Beneficiary
stated above. The mailing address of the Grantor, as debtor, is as stated in Section 1.02.
7.11 NSP Subrecipient Activity Report. Until all NSP requirements are met, the NSP
Subrecipient Activity Report shall be submitted monthly. Thereafter, the NSP Subrecipient
Activity Report shall be submitted quarterly. The Beneficiary shall determine whether all NSP
obligation requirements have been met and may amend this rule from time to time or as needed.
7.12 Applicable Law. All references in this Deed of Trust to the "law" or to "lawful rate"
shall be construed to be the laws of the State of Texas and the United States, whichever is
applicable. "Applicable law" as used herein means (a) the law pertaining to maximum rates of
interest that is now in effect, and (b) any law that comes into effect at any time in the future
allowing a higher maximum rate than the law now in effect.
7.13 Binding Effect. The covenants herein contained shall bind, and the benefits and
advantages shall inure to, the respective heirs, executors, administrators, personal
representatives, successors and assigns of the parties hereto, and to any substitute Trustee.
Whenever used, the singular number shall include the plural and the singular, and the use of any
gender shall be applicable to all genders. The duties, covenants, conditions, obligations and
warranties of Grantor in this Deed of Trust shall be joint and several obligations of Grantor and
each Grantor if more than one, and Grantor's heirs, personal representatives, successors and
assigns. Each party who executes this Deed of Trust (other than Beneficiary), and each
subsequent owner of the Mortgaged Property, or any part thereof, covenants and agrees that it
will perform, or cause to be performed, each condition, term, provision, and covenant of this
Deed of Trust.
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7.14 Right to Inspect. Beneficiary shall have at all times a right of access to and upon the
Mortgaged Property for purposes of inspection and, at Beneficiary's option, for purposes of
performing any obligations required of Grantor hereunder.
7.15 Notices. All notices, requests, consents, demands and other communications required or
which any part desires to give hereunder shall be in writing. Notice will be deemed effective
upon deposit in the United States mail, postage prepaid, by certified mail, return receipt
requested, addressed to the party to whom directed at the addresses specified in Article I of this
Deed of Trust (unless changed by notice in writing given by the particular party whose address is
to be changed). Notice given in any other manner shall be deemed effective only if and when
received by the party to be notified. Provided, however, service of a notice required by Texas
Property Code Section 51.002, as amended, shall be considered complete when the requirements
of that statute are met. Notwithstanding the foregoing, no notice of change of address shall be
effective except upon receipt. This section shall not be construed in any way to affect or impair
any waiver of notice or demand provided in the Note or any other instrument securing the Note
or to require giving of notice or demand to or upon any person in any situation or for any reason.
7.16 Assignment of Rents. All of the rents, royalties (including, but not limited to, royalties
arising out of the sale of oil, gas, and any other minerals produced from the Mortgaged Property,
or any properties pooled with the Mortgaged Property), issues, profits, revenue, income and
other benefits derived from the Mortgaged Property or arising from the use or enjoyment of any
portion thereof or from any lease or agreement pertaining thereto (hereinafter called the "Rents
and Profits ") are hereby assigned, transferred, conveyed and set over to Beneficiary as security
for (i) payment of the principal and interest and all other sums payable on the Note, (ii) payment
of any Other Indebtedness secured hereby and (iii) the performance and discharge of each and
every obligation, covenant and agreement of Grantor set forth herein or in the Note or in any
other instrument securing payment of the Note. Prior to the occurrence of any Event of Default
hereunder, Grantor shall collect and receive all Rents and Profits, and Grantor shall apply the
funds so collected first to the payment of the principal and interest and all other sums payable on
the Note and in payment of all Other Indebtedness secured hereby and thereafter, so long as no
Event of Default hereunder has occurred, the balance shall be distributed to the account of
Grantor. Grantor will not (i) execute an assignment of any of its right, title or interest in the
Rents and Profits, or (ii) except in the ordinary course of business, including but not limited to
where the lessee is in default thereunder, terminate or consent to the cancellation or surrender of
any lease of the Mortgaged Property or any part thereof, now or hereafter existing having an
unexpired term of one year or more except that any lease may be canceled, provided that
promptly after the cancellation or surrender thereof a new lease is entered into with a new lessee
having a credit standing, in the judgment of Beneficiary, at least equivalent to that of the lessee
whose lease was canceled, on substantially the same terms as the terminated or canceled lease, or
(iii) except in the ordinary course of business, modify any lease of the Mortgaged Property or
any part thereof so as to shorten the unexpired term thereof or so as to decrease any amount of
the rent payable thereunder, or (iv) accept prepayments of any installments of rent to become due
under any of such leases in excess of one month, except prepayments in the nature of security for
the performance of the lessee thereunder, or (v) in any other manner impair the value of the
Mortgaged Property or the security of this Deed of Trust. Upon an Event of Default in the
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payment of the Note or any Other Indebtedness secured hereby, Beneficiary may, at its option,
and without notice to Grantor receive and collect all Rents and Profits. Effective upon such
Event of Default and for the foregoing purpose Grantor has irrevocably made, constituted and
appointed, and by these presents does irrevocably make, constitute and appoint Beneficiary as its
true and lawful attorney for it and in its name, place and stead to receive and collect the Rents
and Profits, compromise and settle all claims therefore, and execute, deliver, cancel, modify and
to release any and all leases and lessees, giving and granting unto Beneficiary full power and
authority to do and perform all and every act and thing whatsoever, requisite and necessary to be
done in connection therewith, as fully, to all intents and purposes, as Grantor might or could do if
personally present and also giving and granting unto Beneficiary full power to substitute one or
more attorney or attorneys under it, concerning such matters. Default shall be presumed upon
Beneficiary's filing with the County Clerk of the County in which the Mortgaged Property is
located of an affidavit to the effect that an Event of Default has occurred hereunder and all
persons dealing with Beneficiary may rely upon such affidavit. Grantor agrees that all persons
dealing with Beneficiary and its substitutes that this power of attorney shall remain effective for
so long as there is an Event of Default under the terms hereof. Grantor agrees to indemnify and
hold Beneficiary and its substitutes harmless from any and all liability arising out of
Beneficiary's or its substitutes' acts pursuant to the authority herein granted to the extent allowed
by law. This power of attorney is one coupled with an interest.
7.17 Construction Mortgage. This Deed of Trust constitutes a "Construction Mortgage" as
defined in the Texas Business and Commerce Code and secures an obligation incurred for the
construction of improvements on the Real Property described herein.
7.18 Loan Agreement. It is understood and agreed that all or a portion of the funds to be
advanced under the Note are to be used in the construction or Rehabilitation of the Project in
accordance with the NSP Construction Loan Agreement dated on even date herewith made by
and between Grantor (Borrower in Loan Agreement or the Maker of the Note if different from
Grantor) and Beneficiary (Lender in Loan Agreement), which said Loan Agreement is
incorporated herein by reference to the same extent and effect as if fully set forth herein and
made a part hereof. This Deed of Trust secures the payment of all sums and the performance of
all covenants required by Grantor (or the Maker of the Note if different from Grantor) under the
Loan Agreement, and upon the failure of Grantor (or the maker of the Note if different from
Grantor) to keep and perform all the covenants, conditions and agreements of the Loan
Agreement, the indebtedness secured hereby shall, at the option of Beneficiary, become due and
payable, anything herein contained to the contrary notwithstanding.
7.19 Attorney in Fact. Grantor has irrevocably made, constituted and appointed, and by these
presents does irrevocably make, constitute and appoint Beneficiary its true and lawful attorney,
for it and in its name, place and stead in the Event of Default to contract for the sale of and
convey all or any part of the Mortgaged Property, giving and granting unto Beneficiary full
power and authority to do and perform all and every act and thing whatsoever requisite and
necessary to be done in connection therewith, as fully, to all intents and purposes, as Grantor
might or could do if personally present and also giving and granting unto Beneficiary full power
to substitute one or more attorneys under it, in or concerning such matters. Grantor agrees that
this power of attorney shall be effective upon an Event of Default in the payment of the Note or
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under any instrument executed as security therefore, and Grantor agrees and represents to those
dealing with Beneficiary, and its substitute or substitutes, that this power of attorney shall be
effective upon Beneficiary's filing with the County Clerk of the county in which the Mortgaged
Property is situated, an affidavit to the effect that an Event of Default has occurred under the
terms of the Note or any instruments executed as security therefore and such persons may rely
upon Beneficiary's representation with regard to the continuation of such default, Grantor agrees
with all persons dealing with Beneficiary, its substitute and substitutes that this power of attorney
shall remain effective for so long as there is an Event of Default under the terms of the Note or
any instruments executed as security therefore, and further agrees with such persons that they
may rely upon the representations of Beneficiary, its substitute and substitutes, with regard to the
continuation of such default. TO THE EXTENT AUTHORIZED BY LAW AND SUBJECT
TO THE LIMITATIONS CONTAINED HEREIN, AND FUNDS LEGALLY AVAILABLE
FOR THE PURPORSE, GRANTOR AGREES TO INDEMNIFY AND HOLD BENEFICIARY
AND ITS SUBSTITUTES HARMLESS FROM ANY AND ALL LIABILITY ARISING OUT
OF BENEFICIARY'S OR ITS SUBSTITUTES' ACTS PURSUANT TO THE AUTHORITY
HEREIN GRANTED TO THE EXTENT ALLOWED BY LAW. THIS POWER OF
ATTORNEY IS ONE COUPLED WITH AN INTEREST.
7.20 Covenants Running with the Land. All of the covenants, conditions, warranties,
representations and other obligations made or undertaken by Grantor contained in this Deed of
Trust and the other Loan Documents are intended by Grantor, Beneficiary, and Trustee to be, and
shall be construed as, covenants running with the Mortgaged Property until the lien of this Deed
of Trust has been fully released by Beneficiary.
7.21 Foreclosure. If the Mortgaged Property becomes the subject of a foreclosure proceeding
that results in the sale of part or all of the Mortgaged Property, all sums in excess of those paid to
superior lien holders shall be paid to Beneficiary to apply to the outstanding balance under the
Note. If there are insufficient funds to pay off the Note secured herein, Beneficiary may in its
own discretion waive the payment of any or all of the outstanding loan balance under the Note.
7.22 Non- Recourse. Notwithstanding anything herein to the contrary, Beneficiary shall have
no recourse against Grantor, nor against any guarantor, if any, for payment and performance of
all of the obligations, covenants and agreements of Grantor under the Note and the documents
securing same including, but not limited to this Deed of Trust (said documents hereafter
collectively called "Security Documents "), except to the full extent of all of the Mortgaged
Property which constitutes security for the Note. If default occurs in the timely and proper
payment of any portion of such indebtedness or in the timely performance of any of such
obligations, agreement or covenants, any judicial proceedings brought by Beneficiary against
Grantor or any guarantor shall be limited to the protection and preservation of the Mortgaged
Property, the preservation, enforcement and foreclosure of the liens, mortgages, assignments,
rights and security interests now or at any time hereafter securing the payment of the Note, and
enforcement and collection of obligations, covenants and indebtedness for which Grantor and
any guarantors remain liable as provided in this paragraph. If there is a foreclosure of any such
liens, mortgages, assignments, rights, and security interests securing the payment of the Note, by
power of sale or otherwise, no judgment for any deficiency upon such indebtedness shall be
sought or obtained by Beneficiary against Grantor. Notwithstanding the foregoing provisions of
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this paragraph or any other agreement, Beneficiary shall have full recourse against Grantor and
all guarantors, if any, for: (a) fraud or misrepresentation by Grantor or any guarantor in
connection with the transactions herein contemplated; (b) failure to pay taxes, assessments,
charges for labor or materials or other charges that can create liens on any portion of the
Mortgaged Property; (c) the misapplication of (i) proceeds of insurance covering any portion of
the Mortgaged Property, or (ii) proceeds of the sale or condemnation of any portion of the
Mortgaged Property, or (iii) rentals received by or on behalf of Grantor subsequent to the date on
which Beneficiary gives written notice of the posting of foreclosure notices, (d) failure to prevent
waste to the Mortgaged Property unless Beneficiary is compensated therefore by insurance
proceeds collected by Grantor; (e) the return to Beneficiary of all unearned advance rentals and
security deposits paid by tenants of the Mortgaged Property and not refunded to or forfeited by
such tenants, (f) the return of, or reimbursement for, all personalty taken from the Mortgaged
Property by or on behalf of Grantor, (g) all court costs and for all attorneys' fees provided for in
any instrument governing, securing or pertaining to the payment of the Note; and (h) failure to
comply with any indemnification provision or covenants pertaining to environmental matters
contained in the Security Documents.
7.23 Release. Subject to the following terms, Beneficiary will release the entire Mortgaged
Property or individual lots on the Mortgaged Property from all liens securing the Note upon
closing of a permanent mortgage loan (purchase money) with an Eligible Household utilizing the
Financing Mechanisms available under the NSP, when applicable:
(a) Grantor must not be in default under this Deed of Trust, Loan Agreement or the
Note at the time of the request for lot release.
(b) The release must be on a form approved by Beneficiary that is prepared and
recorded at Grantor's expense.
(c) The purchase price of Mortgaged Property to the Eligible Household shall be the
lesser of one the following amounts: (1) the cost to acquire and construct or rehabilitate the
Project to a decent, safe, and habitable condition; or (2) one hundred percent (100 %) of the
appraised value after rehabilitation or construction. In no instance shall the purchase price of the
Mortgaged Property to the Eligible Household exceed either of the amounts set out in this
section 7.23(c.)
(d) The constructed or rehabilitated single family dwelling must be made available
for sale to Eligible Households within twelve (12) months from the date of acquisition under the
NOFA or from completion of Rehabilitation under the NOFA -R.
(e) The lot to be released must be improved with a single - family dwelling completed
in a good and workmanlike manner in accordance with plans and specifications approved by
Beneficiary and must, at a minimum, meet the Texas Minimum Construction Standards (TMCS)
and the NSP Rehabilitation Standards as noted herein, and must incorporate construction
requirements imposed for single family affordable housing as cited as Texas Government Code,
Section 2306.514, as may be amended from time to time.
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(f) The lot release price upon closing of the permanent mortgage made to an Eligible
Household will be $96,110.70, the full unpaid principal balance of the Note. Upon receipt of
payment of the release price from the Grantor, Beneficiary shall immediately credit said amount
against the principal balance of the Note. As provided herein, Beneficiary may forgive some or
all of the lot release price and said amount shall be immediately credited against the principal
balance of the Note as stated in sections 7.23(g) and (h) of this Deed of Trust.
(g) If Grantor utilizes Financing Mechanisms under NSP and the Eligible Household
qualifies, then in lieu of payment of the full lot release price, the Beneficiary may forgive up to
$30,000.00 in a deferred forgivable down payment assistance loan from Beneficiary to an
Eligible Household whose income exceeds fifty percent (50 %) but is less than one hundred
twenty (120 %) of the area median income as defined by NSP for the payment of down payment
assistance, reasonable closing costs, principal reductions and gap financing in conjunction with a
permanent mortgage loan for the purchase of the single family dwelling from a private mortgage
lender to said Eligible Household. The full amount of any partial release price for the Mortgaged
Property shall be immediately credited against the principal balance of the Note upon receipt of
the fully, executed subordinate, deferred forgivable down payment assistance loan in a form
approved by Beneficiary in addition to payment of the remaining balance of the lot release price.
(h) If Grantor utilizes Financing Mechanisms under NSP, and the Eligible Household
qualifies, then in lieu of payment of the lot release price, Grantor may forgive up to an amount
equal to the full unpaid principal balance of the Note for the Mortgaged Property to a thirty (30)
year, zero percent (0 %) interest, fully amortizing permanent mortgage loan from Beneficiary to
an Eligible Household whose income does not exceed fifty percent (50 %) of area median income
as defined by NSP for the purchase of the single - family dwelling. For an Eligible Household
whose income does not exceed fifty percent (50 %) of the area median income as defined by
NSP, Grantor, in lieu of payment, may also convert up to $30,000.00 of the unpaid principal
balance of the Note per individual lot to a deferred forgivable down payment assistance loan
from Beneficiary to said Eligible Household for the payment of principal reductions and gap
financing in conjunction with and in addition to the permanent mortgage loan from Beneficiary
to said Eligible. The full amount of any partial release price for the Mortgaged Property shall be
immediately credited against principal balance of the Note upon receipt of fully, executed
permanent mortgage loan documents and, if applicable, homebuyer assistance loan documents,
in a form approved by Beneficiary.
(i) Grantor must provide Beneficiary ten (10) days notice of any requested release.
At the time a release is requested, the party requesting the release must furnish to the holder of
the Note a calculation of area by field notes and a plat or survey, indicating the area to be
released and its relationship to the portion of the Property not to be released and shall provide
evidence that the lot is being sold to an Eligible Household by submitting an income certification
in a form prescribed by Beneficiary. All expenses incident to the granting of release will be
borne by the party requesting the release, including but not limited to the cost of the survey,
Beneficiary's attorney's fees, and recording costs.
7.24 Low and Moderate Income Requirement. It is the intent of Beneficiary and Grantor
that 100% of the funds made available under NSP are to be used to meet the low and moderate
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income requirement established in the Housing and Economic Recovery Act Section 2301
(f)(3)(A)(i) and (ii). The low and moderate income requirement includes individuals and
families whose incomes do not exceed 120% of area median income as defined therein.
Such individuals and families will be considered an Eligible Household, as determined by
Beneficiary as stated herein or in accordance with any corresponding provision of federal law or
provisions of succeeding laws as may be amended from time to time. The determination of
whether a purchaser is an Eligible Household shall be made by Beneficiary, in its sole absolute
discretion.
7.25 NSP Contract. Each term and provision of this Deed of Trust is expressly subject to the
terms and condition of the Neighborhood Stabilization Program Contract Number 77099999126
executed between Office of Rural Affairs established within the Department of Agriculture, a
public and official agency of the state of Texas, and Grantor herein, dated to be effective
September 1, 2009, in the original amount of $1,050,000.00, as assigned and transferred to
Beneficiary by Assignment of Contract on August 30, 2011, and as may be amended from time
to time ( "NSP Contract ") which is incorporated herein by reference. The lot or lots securing this
loan must be improved with a single family dwelling completed in good and workmanlike
manner and sold to an Eligible Household who will maintain the affordability period for rental or
homeownership in accordance with the NSP. The terms of the NSP Contract shall govern over
any conflicting provision hereof.
7.26 Due on Transfer - Nonresidential Property. BENEFICIARY MAY DECLARE THE
DEBT SECURED BY THIS DEED OF TRUST IMMEDIATELY DUE AND PAYABLE
AND INVOKE ANY REMEDIES PROVIDED IN THIS DEED OF TRUST FOR
DEFAULT IF GRANTOR TRANSFERS ANY OF THE MORTGAGED PROPERTY TO
A PERSON WHO IS NOT A PERMITTED TRANSFEREE WITHOUT
BENEFICIARY'S CONSENT. "PERMITTED TRANSFEREE" FOR A NATURAL
PERSON MEANS THAT PERSON'S SPOUSE OR CHILDREN, ANY TRUST FOR
THAT PERSON'S BENEFIT OR THE BENEFIT OF THE PERSON'S SPOUSE OR
CHILDREN, OR ANY CORPORATION, PARTNERSHIP, OR LIMITED LIABILITY
COMPANY IN WHICH THE DIRECT AND BENEFICIAL OWNER OF ALL THE
EQUITY INTEREST IS A NATURAL PERSON OR THAT PERSON'S SPOUSE OR
CHILDREN OR ANY TRUST FOR THE BENEFIT OF THEM; AND THE HEIRS,
BENEFICIARIES, EXECUTORS, ADMINISTRATORS, OR PERSONAL
REPRESENTATIVES OF A NATURAL PERSON ON THE DEATH OF THAT PERSON
OR ON THE INCOMPETENCY OR DISABILITY OF THAT PERSON FOR PURPOSES
OF THE PROTECTION AND MANAGEMENT OF THAT PERSON'S ASSETS; AND
FOR A PERSON THAT IS NOT A NATURAL PERSON, ANY OTHER PERSON
CONTROLLING, CONTROLLED BY, OR UNDER COMMON CONTROL WITH
THAT PERSON.
7.27 Vendor's Lien. $96,110.70 of the Note secured by this Deed of Trust is for payment of
construction costs. The Note is secured both by this Deed of Trust and an implied or equitable
vendor's lien on the Property by operation of law in a warranty deed executed by Mary R.
Woodward, Frances R. Snipes, Florin R. Klussmann, Sanford G. Robinson and Michael C.
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Robinson to Grantor dated September 16, 2000, filed for record on September 19, 2000, under
Clerk's Document No. 05768, Volume 434, Page 763 of the Official Public Records of Walker
County, Texas (the "Records).
7.28 Entire Agreement; Amendment. THIS DEED OF TRUST AND THE OTHER LOAN
DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES
HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO.
THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. The provisions
hereof and the other Loan Documents may be amended or waived only by an instrument in
writing signed by Grantor and Beneficiary.
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EXECUTED this U` ° day of March, 2012.
GRANTOR:
CITY OF HUNTSVILLE, a political subdivision
of the State of Texas
By:
Name: Bill Baine
Title: City Manager
THE STATE .aTyiCAS §
§
COUNTY OF //1-(114...- §
This instrument was acknowledged before me on this "'"gr day of ' ' ,2012,
by Bill Baine, City Manager of City of Huntsville, a political subdivision of the State of Texas,
acting on behalf of said political subdivision and in the capacity herein stated.
(S
JUDY ANN THORNTON
MY COMMISSION EXPIRES
August 14, 2014
PREPARED BY:
Texas Department of Housing
and Community Affairs
Legal Services Division
P.O. Box 13941
Austin, Texas 78711 -3941
(512) 475 -2574
/n/r(
Not • Public, 1$tate of Texas
AFTER RECORDING RETURN TO:
Walker County Title Company
1109 University Ave.
Huntsville, Texas 77340
Attn: Judy Thorton
GF # 201103240
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Exhibit A
Being 0.236 acres of land, also called Lot 2, Block 66 of Huntsville Townsite, Walker
County, Texas, according to the recorded deed thereof in Volume 434, Page 763 of the
Deed Records of Walker County, Texas, said 0.236 acres being more particularly
described by metes and bounds as follows:
BEGINNING at a 1/2" iron rod found at the southeast corner of the intersection of
Avenue P and 7th Street, having a Texas State Plane coordinate of Y= 10,260,670.695
X= 3,796,635.030;
THENCE South 02 degrees 11 minutes 43 seconds West, a distance of 652.65 feet to a
' /2" iron rod set for the most westerly northwest corner and the POINT OF BEGINNING
of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 67.87 feet to a 1"
iron bar found for the interior corner of herein described tract;
THENCE North 02 degrees 11 minutes 43 seconds West, a distance of 62.92 feet to a
1/2" iron rod set for the most northerly northwest corner of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 60.30 feet to a 1/2"
iron rod set for the northeast corner of herein described tract, also being South 86 degrees
17 minutes 33 seconds West, a distance of 80.83 feet from a found 60D nail at the base of
an old fence corner post;
THENCE South 02 degrees 11 minutes 43 seconds East, a distance of 113.52 feet to a
point for corner for the southeast corner of herein described tract;
THENCE South 86 degrees 17 minutes 33 seconds West, a distance of 128.17 feet to a
1/2" iron rod set for the southwest corner of herein described tract,
THENCE North 02 degrees 11 minutes 43 seconds West, A distance of 50.60 feet to the
POINT OF BEGINNING and containing 0.236 acres of land.
EXHIBIT A
LEGAL DESCRIPTION
Being 0.236 acres of land, also called Lot 2, Block 66 of Huntsville Townsite, Walker County,
Texas, according to the recorded deed thereof in Volume 434, Page 763 of the Deed Records of
Walker County, Texas, said 0.236 acres being more particularly described by metes and bounds
as follows:
BEGINNING at a 1/2" iron rod found at the southeast corner of the intersection of Avenue P and
7th Street, having a Texas State Plane coordinate of Y= 10,260,670.695 X= 3,796,635.030;
THENCE South 02 degrees 11 minutes 43 seconds West, a distance of 652.65 feet to a %2" iron
rod set for the most westerly northwest corner and the POINT OF BEGINNING of herein
described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 67.87 feet to a 1" iron bar
found for the interior corner of herein described tract;
THENCE North 02 degrees 11 minutes 43 seconds West, a distance of 62.92 feet to a 1/2" iron
rod set for the most northerly northwest corner of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 60.30 feet to a 1/2" iron
rod set for the northeast corner of herein described tract, also being South 86 degrees 17 minutes
33 seconds West, a distance of 80.83 feet from a found 60D nail at the base of an old fence
corner post;
THENCE South 02 degrees 11 minutes 43 seconds East, a distance of 113.52 feet to a point for
corner for the southeast corner of herein described tract;
THENCE South 86 degrees 17 minutes 33 seconds West, a distance of 128.17 feet to a 1/2" iron
rod set for the southwest corner of herein described tract,
THENCE North 02 degrees 11 minutes 43 seconds West, A distance of 50.60 feet to the POINT
OF BEGINNING and containing 0.236 acres of land.
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EXHIBIT D
AFFIDAVIT OF COMPLETION
For reconstruction, new construction, and Rehabilitation
Property Code § 53.106
THE STATE OF TEXAS
COUNTY OF WALKER
Owner: CITY OF HUNTSVILLE, a political subdivision of the State of Texas
Owner's Address: 1212 Avenue M, Huntsville, Walker County, Texas 77340
Contractor: TEGRITY HOMES, LLC, a Texas limited liability company
Contractor's Address: 5601 Democracy Dr., Ste. 190, Plano, Dallas County, Texas 75024
Lender: TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS,
a public and official agency of the State of Texas
Lender's Address: 221 E. 11th Street, P.O. Box 13941, Austin, Texas 78711 -3941
Loan: Evidenced by a Promissory Note payable to Lender dated , 2012,
in the original principal sum of $96,110.70.
The Loan is secured by the Interim Construction Deed of Trust recorded in the Real Property
Records of Walker County, Texas.
Legal Description of Lot(s): Being 0.236 of an acre, more or less out of LOT TWO (2),
BLOCK SIXTY -SIX (66), HUNTSVILLE TOWNSITE, P. GRAY LEAGUE, A -24, Walker
County, Texas and being more particularly described by metes and bounds on Exhibit "A"
attached hereto and made a part hereof, which has the street address of:
907 Avenue P, Huntsville, Walker County, Texas 77320.
Improvements: Construction of a single - family residence and related improvements on the Lot(s)
described above.
The persons or entities signing this affidavit have been duly sworn. Under oath, they swear
the following information is true:
1. Description of Transaction. Owner borrowed money from Lender to construct the
Improvements. Owner and Lender have executed a Construction Loan Agreement in
connection with the Loan. Lender would not have made the Loan without Owner's
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agreement to sign this Affidavit. The signatures on this Affidavit are genuine and the
persons or entities named have authority to sign this Affidavit.
2. Date of Completion Owner and Contractor state that the Improvements were
completed according to the plans and specifications (as and if modified) on
. For purposes of this Affidavit, "completion" means the
actual completion of the work, including any extras or change orders reasonably required or
contemplated under the original plans, other than warranty or repair work.
3. Notice. ANY SUBCONTRACTOR OR OTHER LIEN CLAIMANT MAY NOT
HAVE A LIEN ON RETAINED FUNDS UNLESS THE CLAIMANT FILES AN
AFFIDAVIT CLAIMING A LIEN NO LATER THAN THE 30TH DAY AFTER THE
DATE OF COMPLETION.
4. Contractor's and Owner's Statement as to Debts or Liens (Property Code § 53.085).
Contractor and Owner state that all of the funds that Lender has advanced under the
Construction Loan Agreement before the date of this Affidavit have been used to pay for the
labor and materials which have created the Improvements. Contractor and Owner state that
there are no disputes with, or debts owed to, any mechanics, materialman, or subcontractors
for the labor or materials furnished. There are no security interests or liens encumbering the
Lot(s) other than those created in favor of Lender. Contractor and Owner have not received
notice that any lien claimant has filed or intends to file a lien against the Lot(s). The only
exceptions to this paragraph are:
Existing Creditor or Lienholder
Approximate Amount
1.
$
2.
$
3.
$
5. Owner's Statement as to Other Notices. Owner states that he or she has received a
written request to receive a copy of an affidavit of completion from the following persons
who have furnished labor or materials for the Lot(s), and from no other persons:
Persons Requesting Copy of Affidavit of Completion:
6. Funds Disbursed. All of the funds available under the Loan to improve the Lot(s)
have been disbursed by Lender to Contractor except for the retainage which is being
withheld according to the Texas Property Code. The amount of the retainage is defined in
the Construction Loan Agreement.
7. Retainage. The retainage will be disbursed according to the following conditions. If
the Lot(s) is located within the jurisdiction of a governmental entity which has authority to
issue a Certificate of Occupancy, or other similar certificate, then the retainage will be
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disbursed thirty-one days after the following events: (i) completion of the Improvements
and acceptance by Lender; (ii) a Certificate of Occupancy, or other similar certificate, has
been issued; (iii) this Affidavit has been signed; (iv) this Affidavit has been filed in the Real
Property Records of the county where the Lot(s) is located; and (v) Owner and Contractor
have complied with all of the provisions of the Construction Loan Agreement. If the Lot(s)
is not located within the jurisdiction of a governmental entity which has authority to issue a
Certificate of Occupancy, or other similar certificate, then the retainage will be disbursed
thirty -one days after the following events: (i) completion of the Improvements and
acceptance by Lender; (ii) this Affidavit has been signed; (iii) this Affidavit has been filed in
the Real Property Records of the county where the Lot(s) is located; and (iv) Owner and
Contractor have complied with all of the provisions of the Construction Loan Agreement.
Notwithstanding any statement in this paragraph to the contrary, the retainage will not be
disbursed if any liens have been filed against the Lot(s) in the Real Property Records of the
county where the Lot(s) is located. If Owner elects not to retain funds for thirty days,
Owner shall do so at the sole risk of Owner.
8. Release. Owner and Contractor have made a final inspection of the Lot(s) and
hereby release and forever discharge Lender from any and all claims and actions which the
Owner or Contractor have or may have arising from or based upon (1) the Loan or (2) the
construction of the Improvements now located on the Lot(s) or (3) any express or implied
warranties relating to the Improvements, including any implied warranties of
merchantability, habitability or fitness for a particular purpose.
9. Bankruptcy. There is no pending bankruptcy proceeding naming Contractor or
Owner as a party. Neither Contractor nor Owner has made any assignment for the benefit of
creditors. Owner and Contractor acknowledge that bankruptcy of the persons or entities that
sign this Affidavit will not discharge any liability owed to Lender which arises out of false
statements made in this Affidavit.
10. Liability for False Statements. Owner and Contractor will be liable to Lender and
other persons relying on this Affidavit for (i) payment of any debts or liens not disclosed in
this Affidavit, and (ii) attorney's fees and expenses incurred to enforce the liability described
in (i).
11. Signatures. If Contractor is a partnership, joint venture, or corporation, then the
person signing this Affidavit on behalf of Contractor is signing both in his or her individual
capacity and as partner, venturer, or officer of Contractor.
This Affidavit is being filed in compliance with Property Code section 53.106.
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EXECUTED on this day of , 20
OWNER:
CITY OF HUNTSVILLE, a political subdivision
of the State of Texas
THE STATE OF TEXAS
COUNTY OF
§
§
§
By:
Name: Bill Baine
Title: City Manager
SWORN TO, SUBSCRIBED AND ACKNOWLEDGED before me on this day of
2012, by Bill Baine, City Manager of CITY OF HUNTSVILLE, a
political subdivision of the State of Texas, acting on behalf of said corporation and in the
capacity herein stated.
(Seal)
Notary Public - State of Texas
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THE STATE OF TEXAS
COUNTY OF
§
§
§
CONTRACTOR:
TEGRITY HOMES, LLC, a Texas limited
liability company
By:
Name:
Title:
SWORN TO, SUBSCRIBED AND ACKNOWLEDGED before me on this day of
by , , of TEGRITY
HOMES, LLC, a Texas limited liability company, acting on behalf of limited liability company
and in the capacity stated herein.
(Seal)
Notary Public - State of Texas
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EXHIBIT A
LEGAL DESCRIPTION
Being 0.236 acres of land, also called Lot 2, Block 66 of Huntsville Townsite, Walker County,
Texas, according to the recorded deed thereof in Volume 434, Page 763 of the Deed Records of
Walker County, Texas, said 0.236 acres being more particularly described by metes and bounds
as follows:
BEGINNING at a 1/2" iron rod found at the southeast corner of the intersection of Avenue P and
7th Street, having a Texas State Plane coordinate of Y= 10,260,670.695 X= 3,796,635.030;
THENCE South 02 degrees 11 minutes 43 seconds West, a distance of 652.65 feet to a %2" iron
rod set for the most westerly northwest corner and the POINT OF BEGINNING of herein
described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 67.87 feet to a 1" iron bar
found for the interior corner of herein described tract;
THENCE North 02 degrees 11 minutes 43 seconds West, a distance of 62.92 feet to a 1/2" iron
rod set for the most northerly northwest corner of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 60.30 feet to a 1/2" iron
rod set for the northeast corner of herein described tract, also being South 86 degrees 17 minutes
33 seconds West, a distance of 80.83 feet from a found 60D nail at the base of an old fence
corner post;
THENCE South 02 degrees 11 minutes 43 seconds East, a distance of 113.52 feet to a point for
corner for the southeast corner of herein described tract;
THENCE South 86 degrees 17 minutes 33 seconds West, a distance of 128.17 feet to a 1/2" iron
rod set for the southwest corner of herein described tract,
THENCE North 02 degrees 11 minutes 43 seconds West, A distance of 50.60 feet to the POINT
OF BEGINNING and containing 0.236 acres of land.
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PROMISSORY NOTE
( "NOTE ")
U.S. $96,110.70 March , 2012
NEIGHBORHOOD STABILIZATION PROGRAM ( "NSP ")
Awarding Federal Agency: United States Department of Housing and Urban Development
TDHCA Federal Award Number: B- 08 -DN -48 -0001
Federal Award Year (Year of Award from HUD to TDHCA): 2008
TDHCA Award Year (Year of TDHCA Board Approval): 2009
For value received, CITY OF HUNTSVILLE, a political subdivision of the State of Texas
( "Maker ") promises to pay to the order of TEXAS DEPARTMENT OF HOUSING AND
COMMUNITY AFFAIRS, a public and official agency of the State of Texas ( "Payee ") at 221 E. 11 th
Street, P.O. Box 13941 in the City of Austin, Travis County, Texas 78711 -3941 (or at such other place
in Austin, Travis County, Texas, as Payee may from *time to time designate by written notice to
Maker), the sum of Ninety Six Thousand One Hundred Ten and 70/100 Dollars $96,110.70, or so
much thereof as may be advanced and outstanding, together with interest on the principal balance from
the date hereof at a rate equal to Zero percent (0 %) per annum.
No interest shall accrue on this Note unless the maturity of this Note has been accelerated as
hereinafter provided.
The principal and interest, if any, of this Note shall be due and payable upon the sale of the
developed real property described below or on August 31, 2012, whichever occurs first ( "maturity ").
Payee agrees to defer and waive repayment of the principal loan amount, but only in the event
Maker:
1. has not been in default under any terms at any time of this Note or any document securing
payment of this Note, including without limitation, the Deed of Trust; and
2. has complied with the affordability requirements to wit, the rehabilitated or newly constructed
single family residential dwelling must be set aside for an individual or family whose annual
income does not exceed 120% of the area median income as defined in the Housing and
Economic Recovery Act 2301(f)(3)(A)(i) and (ii) of 2008 ( "Eligible Household "); and
3. has "paid" the lot release price of $96,110.70 by and upon the closing of a permanent mortgage
loan made to an Eligible Household; and
4. has sold the rehabilitated or newly constructed single family residential dwelling at a sales price
the lessor of one of the following amounts:
i. the cost to acquire and construct or rehabilitate the Property (as herein defined)
to a decent, safe, and habitable condition, or
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ii. one hundred percent (100 %) of the appraised value after rehabilitation or
construction to an Eligible Household; and
5. if the Maker has utilized the Financing Mechanisms as defined in the Deed of Trust, and has
converted the deferred, waived principal loan amount to permanent mortgage loans and/or
down payment assistance loans under the NSP to an Eligible Household, then the Payee may
forgive up to $30,000.00 per down payment assistance loan, or;
6. if Maker has utilized the Financing Mechanisms as defined in the Deed of Trust, and has
submitted to Payee evidence fully executed and recorded, homebuyer assistance loans in a total
amount not to exceed $96,110.70, then Payee may forgive up to an amount equal to the full
unpaid principal balance of the Note for the Property to a thirty (30) year, zero percent (0 %),
fully amortizing permanent mortgage loan from Payee to an Eligible Household whose income
does not exceed fifty (50 %) of the area median income as defined by NSP, if applicable.
Upon maturity or the sale of the last developed lot to an Eligible Household, whichever is
earlier, any deferred, unpaid and unwaived balance remaining hereunder shall be forgiven, but only in
the event Maker has not at any time been in default under any terms of this Note or any document
securing same.
Computations of interest on the unpaid principal balance of this Note shall be made on the basis
of 365 or 366 days in a year, as applicable.
After maturity (by acceleration or otherwise) and until paid, the unpaid, unwaived principal
balance and accrued interest then due shall bear interest at the lesser of (i) ten percent (10 %) per annum
or (ii) the highest interest rate allowed by Applicable Law ( "Default Interest Rate "). Notwithstanding
any other provision of this Note, the daily Default Interest Rate shall be calculated by dividing the
Default Interest Rate per annum applicable for such day by the actual number of days in the calendar
year (whether 365 or 366).
This Note may be prepaid in part or in its entirety at any time, without notice or penalty but any
amounts prepaid may not be reborrowed. Partial prepayment shall be applied first to accrued and
unpaid interest, if any, with the balance to the principal installments in inverse order of maturity. Any
payment received more than thirty (30) days before it is due shall be considered a prepayment, unless
Maker otherwise designates in writing at the time such payment is made.
Any amounts owing on this Note shall be payable at the address of Payee stated above (or at
such other place in Austin, Travis County, Texas designated by Payee in writing delivered to Maker at
the address of Maker set forth above) in lawful money of the United States of America that is legal
tender for public and private debts at the time of payment. The making of any payment in other than
immediately available funds, which Payee, at its option, elects to accept shall be subject to collection,
and interest shall continue to accrue until the funds by which such payment is made are available to
Payee for its use.
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If any payment required under this Note is not paid within 15 days after it becomes due and
payable, then Maker shall pay to Payee, subject to the provisions of this Note limiting the amount of
interest, the payment of a late charge (the "Late Charge ") to compensate Payee for the loss of use of
funds and for the administrative expenses and costs of handling such delinquent payment equal to a
one -time charge of five percent (5.00 %) of the amount of such payment that was not timely paid (but
such Late Charge together with all interest payable hereon shall not exceed the maximum lawful rate
under Applicable Law). The term "Applicable Law" as used herein means (1) the law pertaining to
maximum rates of interest that is now in effect and (2) any law that comes into effect at any time in the
future allowing a higher maximum interest rate than the law now in effect. Payee is not obligated to
accept any past due payment that is not accompanied by a Late Charge, but may accept such payment
without waiving its rights to collect the Late Charge. In no event shall a Late Charge be payable by
reason of the acceleration of the indebtedness evidenced by this Note; therefore, a Late Charge would
only be due and payable with respect to payments under this Note which became delinquent prior to the
acceleration of the indebtedness evidenced hereby.
Maker shall pay a charge of $25.00 for any check returned for any reason.
If this Note is placed in the hands of an attorney for collection or is collected by legal
proceedings of any kind, Maker agrees to pay all costs of collection, including reasonable attorneys' fee
and costs to the extent allowed by law.
Except as provided in this Note, Maker and each endorser and guarantor of this Note jointly and
severally waive grace, presentment for payment, notice of renewals and extensions, notice of
nonpayment, notice of protest, notice of and demand for payment of installments or other amounts
coming due under this Note that are not paid when due, notice of intent or election to accelerate
maturity or the actual acceleration of maturity of the indebtedness evidenced by this Note, and
diligence in the collection of this Note, in filing suit on this Note and in seizing or foreclosing on any
collateral securing this Note and agree to one or more extensions of maturity and partial payments
before or after maturity without prejudice to rights of the holder of this Note.
This Note is for payment of construction costs for the Property which is secured by an implied
or equitable vendor's lien on the Property by operation of law in a Warranty Deed executed by Mary R.
Woodward, Frances R. Snipes, Florin R. Klussmann, Sanford G. Robinson and Michael C. Robinson
to Maker, dated September 16, 2000, filed for record on September 19, 2000, under Clerk's Document
No. 05768, Volume 434, Page 763 of the Official Public Recoreds of Walker County Texas (the
"Records "). This Note is additionally secured by the liens and security interests granted in the interim
construction deed of trust (with security agreement and assignment of rents) ( "Deed of Trust ") of even
date herewith from Maker to Timothy K. Irvine, Trustee for Payee conveying the following property
(hereinafter referred to as the "Property"):
Being 0.236 of an acre, more or less out of LOT TWO (2), BLOCK SIXTY -SIX (66),
HUNTSVILLE TOWNSITE, P. GRAY LEAGUE, A -24, Walker County, Texas and
being more particularly described by metes and bounds on Exhibit "A" attached hereto
and made a part hereof.
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The proceeds of this Note will be advanced to Maker at its special instance and request in
accordance with the terms of that certain Construction Loan Agreement dated of even date herewith,
between Maker and Payee (collectively, the "Loan Agreement "), and incorporated herein by reference
for all purposes.
Any default under the Deed of Trust securing this Note shall be deemed to be a default under
this Note. IF ANY PART OF THE COLLATERAL SECURING THIS NOTE IS
TRANSFERRED OR CONVEYED WITHOUT PAYEE'S PRIOR CONSENT, THIS NOTE IS
IMMEDIATELY DUE AND PAYABLE AND PAYEE MAY INVOKE ANY REMEDIES
PROVIDED UNDER THE DEED OF TRUST SECURING THIS NOTE. If the collateral is
residential real property containing fewer than five dwelling units or a residential manufactured
home occupied by Maker, exceptions to this provision are limited to (a) a subordinate lien or
encumbrance that does not transfer rights of occupancy of the property; (b) creation of a
purchase money security interest for household appliances; (c) transfer by devise, descent, or
operation of law on the death of a co- owner; (d) grant of a leasehold interest of three years or
less without an option to purchase; (e) transfer to a spouse or children of owner or between co-
owners; (f) transfer to a relative of owner or on owner's death; and (g) transfer to an inter vivos
trust in which owner is and remains a beneficiary and occupant of the property.
In the event of default in the payment of any part of the principal or interest on this Note and
Maker's failure to cure the default within thirty (30) days after Payee's delivery of written notice of
default to Maker, or in the event of default in the performance of any other agreement contained in the
Loan Agreement or any document securing the payment of this Note or otherwise executed in
connection herewith, and Maker's failure to cure the default within thirty (30) days after Payee's
delivery of written notice of the default to Maker, then the holder of this Note shall have the
unconditional right, without demand, notice, or other action, to declare the unpaid principal balance of
this Note, together with interest accrued on the unpaid principal balance, at once due and payable and
to foreclose each lien and security interest securing the payment of this Note, either under any power of
sale contained in any documents creating such lien or security interest or by court proceedings, as the
holder may elect. Notice shall be deemed to have been delivered upon actual receipt or upon deposit, if
deposited in an official depository of the United States Postal Service, properly addressed to the party
entitled to the notice, marked certified mail, return receipt requested, and containing sufficient postage.
For the purpose of notice, Maker's address is 1212 Avenue M, Huntsville, Walker County, Texas
77340. Maker shall have the right to change its address and specify any other address within the
United States of America by at least ten (10) days' written notice to Payee.
All agreements and transactions between Maker and Payee, whether now existing or hereafter
arising, whether contained herein or in any other instrument, and whether written or oral, are hereby
expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of
the maturity hereof, prepayment, demand for payment or otherwise, shall the amount contracted for,
charged or received by Payee from Maker for the use, forbearance, or detention of the principal
indebtedness or interest hereof, which remains unpaid from time to time, exceed the maximum amount
permissible under Applicable Law, it particularly being the intention of the parties hereto to conform
strictly to the law of the State of Texas and of the United States of America, whichever is applicable.
Any interest payable hereunder or under any other instrument relating to the loan evidenced hereby that
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is in excess of the legal maximum under Applicable Law, shall, in the event of acceleration of maturity,
prepayment, demand for payment or otherwise, be automatically, as of the date of such acceleration,
prepayment, demand or otherwise, applied to a reduction of the principal indebtedness hereof and not
to the payment of interest, or if such excessive interest exceeds the unpaid balance of such principal,
such excess shall be refunded to Maker. To the extent permitted by Applicable Law, determination of
the legal maximum amount of interest shall at all times be made by amortizing, prorating, allocating
and spreading in equal parts during the period of the full stated term of the loan, all interest at any time
contracted for, charged or received from Maker in connection with the loan, so that the actual rate of
interest on account of such indebtedness is uniform throughout the term thereof.
This Note shall be governed by and construed in accordance with the laws of the State of Texas
and the United States of America from time to time in effect.
Notwithstanding anything herein to the contrary, Payee shall have no recourse against Maker,
nor against any guarantor, if any, for payment and performance of all of the obligations, covenants and
agreements of Maker under this Note and the documents securing same including, but not limited to
the Deed of Trust (said documents hereafter collectively called "Security Documents "), except to the
full extent of all of the Property which constitutes security for this Note. If default occurs in the timely
and proper payment of any portion of such indebtedness or in the timely performance of any of such
obligations, agreement or covenants, any judicial proceedings brought by Payee against Maker or any
guarantor shall be limited to the protection and preservation of the Property, the preservation,
enforcement and foreclosure of the liens, mortgages, assignments, rights and security interests now or
at any time hereafter securing the payment of the Note, and enforcement and collection of obligations,
covenants and indebtedness for which Maker and any guarantors remain liable as provided in this
paragraph. If there is a foreclosure of any such liens, mortgages, assignments, rights, and security
interests securing the payment of this Note, by power of sale or otherwise, no judgment for any
deficiency upon such indebtedness shall be sought or obtained by Payee against Maker.
Notwithstanding the foregoing provisions of this paragraph or any other agreement, Payee shall have
full recourse against Maker and all guarantors, if any, for: (a) fraud or misrepresentation by Maker or
any guarantor in connection with the transactions herein contemplated; (b) failure to pay taxes,
assessments, charges for labor or materials or other charges that can create liens on any portion of the
Property; (c) the misapplication of (i) proceeds of insurance covering any portion of the Property, or (ii)
proceeds of the sale or condemnation of any portion of the Property, or (iii) rentals received by or on
behalf of Maker subsequent to the date on which Payee gives written notice of the posting of
foreclosure notices, (d) failure to prevent waste to the Property unless Payee is compensated therefor by
insurance proceeds collected by Maker; (e) the return to Payee of all unearned advance rentals and
security deposits paid by tenants of the Property and not refunded to or forfeited by such tenants, (f) the
return of, or reimbursement for, all personalty taken from the Property by or on behalf of Maker, (g) all
court costs and for all attorneys' fees provided for in any instrument governing, securing or pertaining
to the payment of the Note; and (h) failure to comply with any indemnification provision or covenants
pertaining to environmental matters contained in the Security Documents.
Each term and provision of this Note is expressly subject to the terms and conditions of the
Neighborhood Stabilization Program Contract # 77099999126 executed between Office of Rural
Affairs established within the Department of Agriculture, a public and official agency of the State of
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Texas, and Maker herein, dated to be effective September 1, 2009 in the original amount of
$1,050,000.00, as assigned and transferred to Payee by Assignment of Contract on August 30, 2011,
and as may be amended from time to time ( "NSP Contract "), which provides acquisition and
rehabilitation or new construction of lot(s) development under the NSP; said NSP Contract is
incorporated herein by reference. The terms of the NSP Contract shall govern over any conflicting
provisions hereof.
THIS WRITTEN AGREEMENT AND THE OTHER WRITTEN AGREEMENTS,
INCLUDING THE COLLATERAL AGREEMENTS, SIGNED CONTEMPORANEOUSLY
WITH THE SIGNING HEREOF REPRESENT 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.
MAKER:
CITY OF HUNTSVILLE, a political subdivision of the
State of Texas
By:
Name: Bill Baine
Title: City Manager
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Exhibit A
Being 0.236 acres of land, also called Lot 2, Block 66 of Huntsville Townsite, Walker
County, Texas, according to the recorded deed thereof in Volume 434, Page 763 of the
Deed Records of Walker County, Texas, said 0.236 acres being more particularly
described by metes and bounds as follows:
BEGINNING at a 1/2" iron rod found at the southeast corner of the intersection of
Avenue P and 7th Street, having a Texas State Plane coordinate of Y= 10,260,670.695
X= 3,796,635.030;
THENCE South 02 degrees 11 minutes 43 seconds West, a distance of 652.65 feet to a
' /z" iron rod set for the most westerly northwest corner and the POINT OF BEGINNING
of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 67.87 feet to a 1"
iron bar found for the interior corner of herein described tract;
THENCE North 02 degrees 11 minutes 43 seconds West, a distance of 62.92 feet to a
1/2" iron rod set for the most northerly northwest corner of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 60.30 feet to a 1/2"
iron rod set for the northeast corner of herein described tract, also being South 86 degrees
17 minutes 33 seconds West, a distance of 80.83 feet from a found 60D nail at the base of
an old fence corner post;
THENCE South 02 degrees 11 minutes 43 seconds East, a distance of 113.52 feet to a
point for corner for the southeast corner of herein described tract;
THENCE South 86 degrees 17 minutes 33 seconds West, a distance of 128.17 feet to a
1/2" iron rod set for the southwest corner of herein described tract,
THENCE North 02 degrees 11 minutes 43 seconds West, A distance of 50.60 feet to the
POINT OF BEGINNING and containing 0.236 acres of land.
UCC FINANCING STATEMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
Judy Thorton 936- 295 -8173
B. SEND ACKNOWLEDGMENT TO: (Name and Address)
Walker County Title Company
1109 University Ave.
Huntsville, Texas 77340
[F #201103240
1
Return to:
WALKER COUNTY TITLE COMPANY
1109 UNIVERSITY AVENUE
HUNTSVILLE, TEXA
GFit 0201 %03
fr/
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only goo debtor name (la or1b )- do not abbreviate or combine names
la. ORGANIZATIONS NAME
—
OR CITY OF HUNTSVILLE
1 b. INDIVIDUAL'S LAST NAME
FIRST NAME
MIDDLE NAME
SUFFIX
lc. MAILING ADDRESS
1212 AVENUE M
1d SEE INSTRUCTION$ ADD'L INFO RE 115. TYPE OF ORGANIZATION
ORGANIZA
DEBTOR 1ON I POLITICAL S/D TEXAS
crly
HUNTSVILLE
STATE
TX
POSTAL CODE
77340
COUNTRY
USA
1f. JURISDICTION OF ORGANIZATION
1 g. ORGANIZATIONAL ID #, if any
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only gag debtor name (2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR
NONE
2b. INDIVIDUAL'S LAST NAME
FIRST NAME
MIDDLE NAME
SUFFIX
2c. MAILING ADDRESS
CITY
STATE
POSTAL CODE
COUNTRY
2d SEE INSTRUCTION&
ADD'L INFO RE 12e. TYPE OF ORGANIZATION
ORGANIZATION
DEBTOR
2f. JURISDICTION OF ORGANIZATION
2g. ORGANIZATIONAL ID #, if any
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/ P)- insert onlyagesecuredparty name (3aor3b,
I (NONE
OR
3a. ORGANIZATION'S NAME
Texas Department of Housing and Community Affairs
3b. INDIVIDUAL'S LAST NAME
FIRST NAME
MIDDLE NAME
SUFFIX
3c. MAILING ADDRESS
P.O. Box 13941
CITY
Austin
STATE
TX
POSTAL CODE
78711 -3941
COUNTRY
USA
. This FINANCING STATEMENT covers the following collateral:
1. All furniture, equipment and other personal property now or hereafter owned by Debtor and used in connection
with, located on or related in any way to the real property ( "Property") described in Section 14 of this UCC Financing
Statement Addendum, and all renewals or replacements thereof or articles in substitution therefore, whether or not the same
are or shall be attached in any manner to the buildings and other improvements now or hereafter erected, constructed or
developed on the Property ( "Project "); 2. All building materials and equipment now or hereafter delivered to the Property
and all building and construction materials, equipment and parts intended to be installed in or on the Property or Project; 3.
All plans and specifications for the Project; 4. All contracts and subcontracts relating to the Project; 5. All deposits
(including tenants' security deposits, if any), funds, accounts, contract rights, instruments, documents, general intangibles
(including trademarks, trade names and symbols used in connection therewith), and notes or chattel paper arising from or
by virtue of any transactions related to the Property; (see Addendum attached hereto and made a part hereof)
5. ALTERNATIVE DESIGNATION (If applicable):[ ILESSEE/LESSOR [CONSIGNE i CONSIGNOR FBAILEE/BAILOR SELLER/BUYER� '1AG. LIEN NON-UCC FILING
6. r1 A This FINANCING STATEMENT' is to be filed- ffor record] (or recorded) in t the REAL 7. Check to REOU €ST SEARCH REPOT() on Debtors)
tILI ESTATE RECORDS Attach Addendum fif aoolicablel IADDITIONAL FEET footionall All Debtors Debtor 1 nDebtor 2
8. OPTIONAL FILER REFERENCE DATA
NSP #770999991262: City of Huntsville, a political subdivision of the State of Texas
International Association of Commercial Administrators (IACA)
FILING OFFICE COPY — UCC FINANCING STATEMENT (FORM UCC1) (REV. 05/22/02)
UCC FINANCING STATEMENT ADDENDUM
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
9. NAME OF FIRST DEBTOR (la or 1b) ON RELATED FINANCING STATEMENT
OR
9a. ORGANIZATIONS NAME
CITY OF HUNTSVILLE
9b. INDIVIDUAL'S LAST NAME
FIRST NAME
MIDDLE NAME,SUFFIX
10. MISCELLANEOUS:
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
11. ADDITIONAL DEBTORS EXACT FULL LEGAL NAME - insert only gne name (11 a or 11 b) - do not abbreviate or combine names
11a. ORGANIZATION'S NAME
""
11b. INDIVIDUAL'S LAST NAME
FIRST NAME
MIDDLE NAME
SUFFIX
11c. MAILING ADDRESS
CITY
STATE
POSTAL CODE
COUNTRY
11d SEE INSTRUCTION$
ADD'L INFO RE 111e. TYPE OF ORGANIZATION
ORGANIZATION
DEBTOR 1
11f. JURISDICTION OF ORGANIZATION
119. ORGANIZATIONAL ID #, if any
nNONE
12.
OR
I ADDITIONAL SECURED PARTY'S cif n ASSIGNOR SIPS NAME - insert only gm name (12a or 12b)
12a. ORGANIZATION'S NAME
12b. INDIVIDUAL'S LAST NAME
FIRST NAME
MIDDLE NAME
SUFFIX
12e. MAILING ADDRESS
CITY
STATE
POSTAL CODE
COUNTRY
13. This FINANCING STATEMENT covers , timber to be cut or
collateral, or is filed as a future filing.
14. Description of real estate:
Being 0.236 of an acre, more or less out of
(2), BLOCK SIXTY -SIX (66), HUNTSVILLE
TOWNSITE, P. GRAY LEAGUE, A -24, Walker
County, Texas and being more particularly
by metes and bounds on Exhibit "A" attached
and made a part hereof.
15. Name and address of a RECORD OWNER of above - described
(if Debtor does not have a record interest):
, as- extracted
LOT TWO
described
hereto
real estate
16. Additional collateral description:
6. All permits, licenses, franchises, certificates, and other rights and
privileges obtained in connection with the Property; 7. All bank
accounts in which rental income, if any, from the Property are
deposited; 8. All proceeds arising from or by virtue of the sale, lease
or other disposition of any of the real or personal property
described herein; 9. All proceeds (including premium refunds)
payable or to be payable under each policy of insurance relating to
the Project; 10. All proceeds arising from the taking of all or a part
of the Property or any rights appurtenant thereto, including change
of grade of streets, curb cuts or other rights of access, for any public
or quasi- public use under any law or by rights of eminent domain,
or by private or other purchase in lieu thereof; and, 11. All other
interest of every kind and character which Debtor now has or at any
time hereafter acquires in and to the above - described personal
property and all property which is used or useful in connection
therewith.
17. Check only if applicable and check g0(y one box.
Debtor is a n Trust or n Trustee acting with respect to property held in trust or n Decedents Estate
18 Check gnl1C if applicable and check g0(y one box.
11 Debtor is a TRANSMITTING UTILITY
1 Filed in connection with a Manufactured -Home Transaction — effective 30 years
1 Filed in connection with a Public- Finance Transaction — effective 30 years
International Association of Commercial Administrators
FILING OFFICE COPY — UCC FINANCING STATEMENT ADDENDUM (FORM UCC1Ad) (REV. 05/22/02)
Exhibit A
Being 0.236 acres of land, also called Lot 2, Block 66 of Huntsville Townsite, Walker
County, Texas, according to the recorded deed thereof in Volume 434, Page 763 of the
Deed Records of Walker County, Texas, said 0.236 acres being more particularly
described by metes and bounds as follows:
BEGINNING at a 1/2" iron rod found at the southeast corner of the intersection of
Avenue P and 7ch Street, having a Texas State Plane coordinate of Y= 10,260,670.695
X= 3,796,635.030;
THENCE South 02 degrees 11 minutes 43 seconds West, a distance of 652.65 feet to a
' /2" iron rod set for the most westerly northwest corner and the POINT OF BEGINNING
of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 67.87 feet to a 1"
iron bar found for the interior corner of herein described tract;
THENCE North 02 degrees 11 minutes 43 seconds West, a distance of 62.92 feet to a
1/2" iron rod set for the most northerly northwest corner of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 60.30 feet to a 1/2"
iron rod set for the northeast corner of herein described tract, also being South 86 degrees
17 minutes 33 seconds West, a distance of 80.83 feet from a found 60D nail at the base of
an old fence corner post;
THENCE South 02 degrees 11 minutes 43 seconds East, a distance of 113.52 feet to a
point for corner for the southeast corner of herein described tract;
THENCE South 86 degrees 17 minutes 33 seconds West, a distance of 128.17 feet to a
1/2" iron rod set for the southwest corner of herein described tract,
THENCE North 02 degrees 11 minutes 43 seconds West, A distance of 50.60 feet to the
POINT OF BEGINNING and containing 0.236 acres of land.
CONTRACTOR AGREEMENT
("Agreement")
NEIGHBORHOOD STABILIZATION PROGRAM
Awarding Federal Agency: United States Department of Housing and Urban Development
TDHCA Federal Award Number: B- 08 -DN-48 -0001
Federal Award Year (Year of Award from HUD to TDHCA): 2008
Award Year (Year of TDHCA Board Approval): 2009
STATE OF TEXAS
COUNTY OF WALKER
§
WHEREAS, it is proposed that TEXAS DEPARTMENT OF HOUSING AND
COMMUNITY AFFAIRS, a public and official agency of the State of Texas ( "Lender "), make
a NEIGHBORHOOD STABILIZATION PROGRAM Construction Loan (herein so called) to
CITY OF HUNTSVILLE, A POLITICAL SUBDIVISION OF THE STATE OF TEXAS
( "Borrower "), for, among other things, construction of improvement upon the Land situated in
the county and state first herein mentioned, more particularly described as Being 0.236 of an
acre, more or less out of LOT TWO (2), BLOCK SIXTY -SIX (66), HUNTSVILLE
TOWNSITE, P. GRAY LEAGUE, A -24, Walker County, Texas and being more particularly
described by metes and bounds on Exhibit "A" attached hereto and made a part hereof, (the
Land, such improvements, and any and all personal property and fixtures now or hereafter
affixed to, used in and about, or arising in connection with the Land and such improvements,
called the "Project "), to be secured by, among other things, liens and security interests (the
"Lender Liens ") against the Project and the Construction Contract (hereinafter described); and
WHEREAS, the undersigned ( "Contractor ") proposes to hereafter perform labor,
specially fabricate materials, furnish labor, and/or furnish materials (collectively, the "Work ") for
construction or repair of all or portions of improvements on the Land pursuant to a Construction
Contract (as hereafter amended, supplemented, and/or restated from time to time, herein so
called) dated as of September 20, 2011, (execution date of contract) between Contractor and
Borrower.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and to induce Lender to make the Construction Loan to Borrower,
Contractor hereby agrees with Lender as follows:
1. Contractor represents and warrants to Lender that as of the date hereof (a)
Contractor has not reached any agreement or entered into any contract, written or oral, with
respect to the construction or repair of improvements on the Land, other than the Construction
Contract, which has been duly executed and is in full force and effect, (b) no materials have been
delivered to or stored upon the Land, and (c) no work of any kind has been performed on the
Land in connection with the construction or repair of any improvements on the Land.
2. Contractor consents and agrees in all respects to the creation in favor of Lender by
Borrower of a security interest in Borrower's rights in the Construction Contract as security for
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Page 1
the full and complete payment and performance of Borrower's indebtedness and obligations to
Lender, and Contractor further agrees with Lender that: (a) if a default occurs in connection with
the Construction Loan, Contractor will, upon Lender's request, complete the performance of the
Work pursuant to the Construction Contract for the benefit of Lender (notwithstanding any
previous default thereunder by Borrower, and Contractor agrees that Lender shall have no
liability to it whatsoever by reason of any such default by Borrower), provided that Contractor is
paid, in accordance with the Construction Contract, for all Work thereafter rendered by
Contractor for the benefit of Lender; (b) upon the occurrence of a default by Borrower under the
Construction Contract, Contractor will not exercise any remedies thereunder (other than the
cessation of the Work for monetary defaults pending either the cure thereof or the request by
Lender that, pursuant to a preceding, Contractor complete the Work for the benefit of Lender)
until it has notified Lender thereof in writing and granted Lender a period of 30 days (or a
reasonable amount of time if such default cannot be cured in 30 days) after receipt by Lender of
such notice in which Lender shall be entitled, but not obligated, to cure such default; (c) in the
event any of the proceeds of the Construction Loan are disbursed by Lender directly to
Contractor, Contractor will receive all such disbursements, will hold the same as a trust fund for
the purpose of paying the costs of the Work under the Construction Contract, and will apply the
same only to the payment of such costs and for no other purposes; (d) upon request by Lender,
Contractor will furnish to Lender a current list of all persons or firms with whom Contractor has
entered into subcontracts or other agreements relating to the Work in connection with the
Project, together with a statement as to the status of each such subcontract or agreement and the
respective amounts, if any, owed by Contractor thereunder; (e) Contractor shall make timely
payment or deposit of all amounts of tax required to be withheld and paid to or deposited with
the United States pursuant to the provision of Subtitle C of the Internal Revenue Code of 1986,
as from time to time amended, with respect to any and all wages paid to employees of Contractor
from funds paid to Contractor by Borrower or Lender; and (f) after execution and delivery of the
Construction Contract, Contractor will not amend the Construction Contract without the prior
written consent of Lender if such amendment would result in a "Material Change" (as hereinafter
defined). As used herein, the term "Material Change" means a change in the Construction
Contract or plans for the Project which: (a) increases or decreases (individually, solely as a result
of any single change) the costs for or related to construction of the Project set forth in the
original budget for the Project by an amount equal to more than 5% of the construction cost; or
(b) increases or decreases (collectively, when added to all other such changes previously made)
the costs for or related to construction of the Project set forth in the original budget for the
Project by an amount equal to more than 5% of construction costs; or (c) extends, or is likely to
extend, the date of completion of the Project beyond August 1, 2012 or (d) causes the plans for
the Project not to comply with all applicable laws.
3. Contractor hereby subordinates any and all "Contractor Liens" (as hereinafter
defined) to any and all Lender Liens with the same force and effect as though the deeds of trust
and any other instrument creating or evidencing the Lender Liens had been executed, delivered,
and recorded prior to the creation or inception of the Contractor Liens. As used herein, the term
"Contractor Liens" means all constitutional, statutory, contractual, or other liens, rights to liens,
claims, and/or demands, if any, of whatever kind and nature, and against any property or rights
of whatever kind and nature, that may now or hereafter exist or be claimed or asserted by,
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through, or under Contractor for any Work in connection with all or portions of any
improvements on the Land, whether pursuant to the Construction Contract or otherwise.
4. Nothing herein shall be construed to impose upon Lender any duty to see to the
application of the proceeds of the Construction Loan. Contractor acknowledges that Lender is
obligated with respect thereto only to Borrower and to no other person or entity.
5. This instrument shall be binding upon Contractor and its heirs, personal
representatives, successors, and assigns and shall inure to the benefit of Lender and its successors
and assigns.
EXECUTED on this ' day of March , 2012.
CONTRACTOR:
TEGRITY HOMES, LLC, a Texas limited
liability company
By:
Name:
Harris
Title: Dir ctor of Operations
THE STATE OF TEXAS
COUNTY OF WALKER §
This instrument was acknowledged before me on this day of , 2012, by Tony
Harris, Director of Operations, Tegrity Homes, LLC, a Texas limited liability company, acting
on behalf of said limited liability company and in the official ca' •ty herein sated.
Notary Public, Stat of Texas
4: 11k, CHARLOTTE RENEE WILLIAMS
I s Notary Public, State of Texas
% . My Commission Expires
°a'f'f �a May 09, 2015
��xn�
(Seal)
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Exhibit A
Being 0.236 acres of land, also called Lot 2, Block 66 of Huntsville Townsite, Walker
County, Texas, according to the recorded deed thereof in Volume 434, Page 763 of the
Deed Records of Walker County, Texas, said 0.236 acres being more particularly
described by metes and bounds as follows:
BEGINNING at a 1/2" iron rod found at the southeast corner of the intersection of
Avenue P and 7th Street, having a Texas State Plane coordinate of Y= 10,260,670.695
X= 3,796,635.030;
THENCE South 02 degrees 11 minutes 43 seconds West, a distance of 652.65 feet to a
W' iron rod set for the most westerly northwest corner and the POINT OF BEGINNING
of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 67.87 feet to a 1"
iron bar found for the interior corner of herein described tract;
THENCE North 02 degrees 11 minutes 43 seconds West, a distance of 62.92 feet to a
1/2" iron rod set for the most northerly northwest corner of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 60.30 feet to a 1/2"
iron rod set for the northeast corner of herein described tract, also being South 86 degrees
17 minutes 33 seconds West, a distance of 80.83 feet from a found 60D nail at the base of
an old fence corner post;
THENCE South 02 degrees 11 minutes 43 seconds East, a distance of 113.52 feet to a
point for corner for the southeast corner of herein described tract;
THENCE South 86 degrees 17 minutes 33 seconds West, a distance of 128.17 feet to a
1/2" iron rod set for the southwest corner of herein described tract, -
THENCE North 02 degrees 11 minutes 43 seconds West, A distance of 50.60 feet to the
POINT OF BEGINNING and containing 0.236 acres of land.
DOCUMENT CORRECTION AGREEMENT
LENDER:
BORROWER:
PROPERTY:
TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS,
a public and official agency of the State of Texas
CITY OF HUNTSVILLE, a political subdivision of the State of Texas
907 Avenue P, Huntsville, Walker County, Texas 77320
Being 0.236 of an acre, more or less out of LOT TWO (2), BLOCK SIXTY -
SIX (66), HUNTSVILLE TOWNSITE, P. GRAY LEAGUE, A -24, Walker
County, Texas and being more particularly described by metes and bounds on
Exhibit "A" attached hereto and made a part hereof.
DATE: March "' , 2012
AGREEMENT TO CORRECT MISSTATED INFORMATION OR PROVIDE
ADDITIONAL DOCUMENTATION OR FEES: In consideration of Lender disbursing funds for
the closing of the Loan secured by the Property being encumbered, and regardless of the reason
for any loss, misplacement, or inaccuracy in any Loan documentation, Borrower(s) agrees as
follows: If any document is lost, misplaced, misstated or inaccurately reflects the true and correct
terms and conditions of the Loan, upon request of the Lender, Borrower(s) will comply with
Lender's request to execute, acknowledge, initial and deliver to Lender any documentation
Lender deems necessary to replace or correct the lost, misplaced, misstated or inaccurate
document(s). If the original promissory note is replaced, the Lender hereby indemnifies the
Borrower(s) against any loss associated with a demand on the original note. All documents
Lender requests of Borrower(s) shall be referred to as "Replacement Documents." Borrower(s)
agrees to deliver the Replacement Documents within ten (10) days after receipt by Borrower(s)
of a written request for such replacements. Borrower(s) also agrees that upon request
Borrower(s) will supply additional amounts and/or pay to Lender any additional sum previously
disclosed to Borrower(s) as a cost or fee associated with the Loan, which for whatever reason
was not collected at closing.
REQUEST BY LENDER: Any request under this Agreement may be made by the
Lender, (including assignees and persons acting on behalf of the Lender) or Settlement Agent,
and shall be prima facie evidence of the necessity for same. A written statement addressed to
Borrower(s) at the address indicated in the Loan documentation shall be considered conclusive
evidence of the necessity for Replacement Documents.
FAILURE TO DELIVER REPLACEMENT DOCUMENTS CAN CONSTITUTE
DEFAULT: Borrower's failure or refusal to comply with the terms of the correction request may
constitute a default under the note and/or deed of trust, and may give Lender the option of
declaring all sums secured by the loan documents immediately due and payable.
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This Agreement shall survive the closing of the Loan, and inure to the benefit of Lender's
successors and assigns and be binding upon the heirs, devisees, personal representatives,
successors and assigns of Borrower(s).
BORROWER:
CITY OF HUNTSVILLE, a political subdivision
of the State of Texas
By:
Name: Bill Baine
Title: City Manager
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Exhibit A
Being 0.236 acres of land, also called Lot 2, Block 66 of Huntsville Townsite, Walker
County, Texas, according to the recorded deed thereof in Volume 434, Page 763 of the
Deed Records of Walker County, Texas, said 0.236 acres being more particularly
described by metes and bounds as follows:
BEGINNING at a 1/2" iron rod found at the southeast corner of the intersection of
Avenue P and 7th Street, having a Texas State Plane coordinate of Y= 10,260,670.695
X= 3,796,635.030;
THENCE South 02 degrees 11 minutes 43 seconds West, a distance of 652.65 feet to a
' /2" iron rod set for the most westerly northwest corner and the POINT OF BEGINNING
of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 67.87 feet to a 1"
iron bar found for the interior corner of herein described tract;
THENCE North 02 degrees 11 minutes 43 seconds West, a distance of 62.92 feet to a
1/2" iron rod set for the most northerly northwest corner of herein described tract;
THENCE North 86 degrees 17 minutes 33 seconds East, a distance of 60.30 feet to a 1/2"
iron rod set for the northeast corner of herein described tract, also being South 86 degrees
17 minutes 33 seconds West, a distance of 80.83 feet from a found 60D nail at the base of
an old fence corner post;
THENCE South 02 degrees 11 minutes 43 seconds East, a distance of 113.52 feet to a
point for corner for the southeast corner of herein described tract;
THENCE South 86 degrees 17 minutes 33 seconds West, a distance of 128.17 feet to a
1/2" iron rod set for the southwest corner of herein described tract,
THENCE North 02 degrees 11 minutes 43 seconds West, A distance of 50.60 feet to the
POINT OF BEGINNING and containing 0.236 acres of land.
March o(� , 2012
NOTICE OF INVALIDITY OF ORAL AGREEMENTS
TO: Borrower and all other Debtors and Obligors with respect to the Loan which is identified
below.
1. 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.
2. As used in this Notice:
"Borrower" means the Borrower identified below.
"Debtor" and "Obligor" means any entity or individual who (i) is obligated to pay the
Note or (ii) otherwise is or becomes obligated to pay the Loan (for example, as cosigner
or guarantor) or (iii) has pledged any property as security for the Loan.
"Lender" means Texas Department of Housing and Community Affairs.
"Loan" means the loan by Lender which is to be evidenced by the promissory note
( "Note ") dated of even date herewith, executed by Borrower, payable to the order of
Lender, in the principal face amount of $96,110.70.
"Loan Agreement" means one or more promises, promissory notes, agreements,
undertakings, security agreements, deeds of trust or other documents, or commitments, or
any combination of those actions or documents, relating to the Loan.
3. This Notice is given by Lender with respect to the Loan, pursuant to Section 26.02 of the
Texas Business and Commerce Code. Each Borrower, Debtor, and Obligor, who signs
below, acknowledges, represents, and warrants to Lender that Lender has given and such
party has received and retained a copy of this Notice on the date stated above.
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BORROWER:
CITY OF HUNTSVILLE, a political subdivision
of the State of Texas
By:
Name: Bill Baine
Title: City Manager
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LENDER:
TEXAS DEPARTMENT OF HOUSING AND
COMMUNITY AFFAIRS, a public and official
agency of the State of Texas
By:
Name: Timothy K. Irvine
Its: duly authorized officer or representative
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