Exhibit 10(s)
REGULATORY AGREEMENT TO:
MULTIFAMILY HOUSING PROJECTS
___________________________________________________________________
Under Sections 207, 220, 221(d)(4), 231 and 232, Except Nonprofits
___________________________________________________________________
Project No.: 053-11099
Mortgagee: REILLY MORTGAGE GROUP, INC.
Amount of Mortgage Note: $3,230,000.00 Date: 11/22/95
Mortgage: Recorded: 11/28/95 State: North Carolina
County: Mecklenburg Date: 11/28/95 Book: 8375 Page: 470
Originally endorsed for insurance under Section 207 pursuant to
223(f) of the National Housing Act.
This Agreement entered into this 22nd day of November, 1995,
between BASS REAL ESTATE FUND-84, A NORTH CAROLINA LIMITED
PARTNERSHIP whose address is 4000 PARK ROAD, CHARLOTTE, NORTH
CAROLINA 28209, their successors, heirs, and assigns jointly and
severally, hereunder referred to as Owners and the undersigned
Secretary of Housing and Urban Development and his successors
thereinafter referred to as Secretary.
In consideration of the endorsement for insurance by the
Secretary of the above described note or in consideration of the
consent of the Secretary to the transfer of the mortgaged property
or the sale and conveyance of the mortgaged property by the
Secretary, and in order to comply with the requirements of the
National Housing Act, as amended, and the Regulations adopted by
the Secretary pursuant thereto. Owners agree for themselves, their
successors, heirs and assigns, that in connection with the
mortgaged property and the project operated thereon and so long as
the contract of mortgage insurance continues in effect, and during
such further period of time as the Secretary shall be the owner,
holder or reinsurer of the mortgage, or during any time the
Secretary is obligated to insure a mortgage on the mortgage
property:
1. Owners, except as limited by paragraph 17 hereof, assume
and agree to make promptly all payments due under the note and
mortgage.
2. (a) Owners shall establish or continue to maintain a
reserve fund for replacements by the allocation to such reserve
fund in a separate account with the mortgagee or in a safe and
responsible depository designated by the mortgagee, concurrently
with the beginning of payments towards amortization of the
principal of the mortgage insured or held by the Secretary of an
amount equal to $1,702.42* per month unless a different date or
amount is approved in writing by the Secretary. *An initial deposit
of $267,038 has been made to the reserve fund for replacement.
Such fund, whether in the form of a cash deposit or invested in
obligations of, or fully guaranteed as to principal by, the United
States of America shall at all times be under the control of the
mortgagee. Disbursements from such fund, whether for the purpose
of effecting replacement of structural elements and mechanical
equipment of the project or for any other purpose, may be made only
after receiving the consent in writing of the Secretary. In the
event that the owner is unable to make a mortgage note payment on
the due date and that payment cannot be made prior to the due day
of the next such installment or when the mortgagee has agreed to
forgo making an election to assign the mortgage to the Secretary
based on a monetary default, or to withdraw an election already
made, the Secretary is authorized to instruct the mortgagee to
withdraw funds from the reserve fund for replacements to be applied
to the mortgage payment in order to prevent or cure the default.
In addition, in the event of a default in the terms of the
mortgage, pursuant to which the loan has been accelerated, the
Secretary may apply or authorize the application of the balance in
such fund to the amount due on the mortgage debt as accelerated.
(b) Where Owners are acquiring a project already subject
to an insured mortgage, the reserve fund for replacements to be
established will be equal to the amount due to be in such fund
under existing agreements or charter provisions at the time Owners
acquire such project and payments hereunder shall begin with the
first payment due on the mortgage after acquisition, unless some
other method of establishing and maintaining the fund is approved
in writing by the Secretary.
3. Real property covered by the mortgage and this agreement
described in Exhibit A attached hereto.
(This paragraph 4 is not applicable to cases insured under Section 232).
4. (a) Owners shall make dwelling accommodation and service
of the project available to occupants at charges not exceeding
those established in accordance with a rental schedule approved in
writing by the Secretary, for any project subject to regulation of
rent by the Secretary. Accommodations shall not be rented for a
period of less then thirty (30) days, or, unless the mortgage is
insured under Section 231, for more than three years. Commercial
facilities shall be rented for such use and upon such terms as
approved by the Secretary Subleasing of dwelling accommodations,
except for sublease of single dwelling accommodations by the tenant
thereof, shall be prohibited without prior written approval of
Owner and the Secretary and any lease shall so provide. Upon
discovery of any unapproved sublease. Owners shall immediately
demand cancellation and notify the Secretary thereof.
(b) Upon prior written approval by the Secretary, Owner
may charge to and receive from any tenant such amounts from time to
time may be mutually agreed upon between tenant and the Owners for
any facilities and or services which may be furnished by the Owners
or others to such tenant upon his request, in addition to the
facilities and services included in the approved rental schedule.
Approval charges for facilities and services is not required for
any project not subject to regulation of rent by the Secretary.
(c) For any project subject to regulation of rent by the
Secretary, the Secretary will at any time entertain a written
request for a rent increase properly reported by substantiating
evidence and within a reasonable time shall
(i) Approve a rental schedule that is necessary to
compensate for any net increase, occurring
since the last approved rental schedule in
taxes (other than income taxes) and operating
and maintenance cost over which Owners have no
effective control or;
(ii) Deny the increase stating the reasons
therefor.
5. (a) If the mortgage is originally a Secretary-held
purchase money mortgage, or is originally endorsed for insurance
under any Section other than Sections 231 or 232 and is not
designed primarily for occupancy by elderly persons. Owners shall
not in selecting tenants discriminate against any person or persons
by reason of the fact that there are children in the family.
(b) through (c) MARKED THROUGH COMPLETELY.
(d) All advertising or efforts to rent a project insured
under Section 231 shall reflect a bona fide effort of the Owners to
obtain occupancy by elderly persons.
6. Owners shall not without the prior written approval of
the Secretary:
(a) Convey, transfer, or encumber any of the mortgaged
property, or permit the conveyance, transfer or encumbrance of such
property.
(b) Assign, transfer, dispose of, or encumber any
personal property of the project, including rents, or pay out any
funds expect from surplus cash, except for reasonable operating
expenses and necessary repairs.
(c) Convey, assign, or transfer any beneficial interest
in any trust holding title to the property, or the interest of any
general partner in a partnership owning the property, or any right
to manage or receive the rents and profits from the mortgaged
property.
(d) Remodel, add to, reconstruct, or demolish any part
of the mortgaged property or subtract from any real or personal
property of the project.
(e) Make, or receive and retain, any distribution or
___________ any income of any kind of the project except surplus
cash and except on the following conditions:
(1) All distributions shall be made only as of and
after the end of a semiannual or annual fiscal
period, and only as permitted by the law of
the applicable jurisdiction;
(2) No distribution shall be made from borrowed
funds prior to the completion of the project
or when there is any default under this
Agreement or under the note or mortgage;
(3) Any distribution of any funds of the project,
which the party receiving such funds is not
entitled to retain hereunder, shall be held in
trust separate and apart from any other funds;
and
(4) There shall have been compliance with all
outstanding notices of requirements for proper
maintenance of the project.
(f) Engage, except for natural persons, in any other
business or activity, including the operation of any other rental
project, or incur any liability or obligation not in connection
with the project.
(g) Require, as a condition of the occupancy or leasing
of any unit in the project, any consideration or deposit other than
the prepayment of the first month's rent plus a security deposit in
an amount not in excess of one month's rent to guarantee the
performance of the covenants of the lease. Any funds collected as
security deposits shall be kept separate and apart from all other
funds of the project in a trust account in the amount of which
shall at all times equal or exceed the aggregate of all outstanding
obligations under said account.
(h) Permit the use of the dwelling accommodations or
nursing facilities of the project for any purpose except the use
which was originally intended, or permit commercial use greater
than that originally approved by the Secretary.
7. Owners shall maintain the mortgaged premises,
accommodations and the grounds and equipment appurtenant thereto,
in good repair and condition. In the event all or any of the
buildings covered by the mortgage shall be destroyed or damaged by
fire or other casualty, the money derived from any insurance on the
property shall be applied in accordance with the terms of the
mortgage.
8. Owners shall not file any petition in bankruptcy or for
a receiver or in insolvency or for reorganization or composition,
or make any assignment for the benefit of creditors or to a trustee
for creditors, or permit an adjudication in bankruptcy or the
taking possession of the mortgaged property or any part thereof by
a receiver or the seizure and sale of the mortgaged property or any
part thereof under judicial process or pursuant to any power of
sale, and fail to have such adverse actions set aside within forty-
five (45) days.
9. (a) Any management contract entered into by Owners or
____ of them involving the project shall contain a provision that
in the event of default hereunder, it shall be subject to
termination without penalty upon written request by the Secretary.
Upon such request Owners shall immediately arrange to terminate the
contract within a period of not more than thirty (30) days and
shall make arrangements satisfactory to the Secretary for
continuing proper management of the project.
(b) Payment for services, supplies, or materials shall
not exceed the amount ordinarily paid for such services, supplies,
or materials in the area where the service are _____ or the
supplies or materials furnished.
(c) The mortgaged property, equipment, buildings, plans,
offices, apparatus, devices, books, contracts, records, documents,
and other papers relating thereto shall at all times be maintained
in reasonable condition for proper audit and subject to examination
and inspection at any reasonable time by the Secretary of his duly
authorized agents. Owners shall keep copies of all written
contracts or other instruments which affect the mortgaged property,
all or any of which may be subject to inspection and examination by
the Secretary or his duly authorized agents.
(d) The books and accounts of the operations of the
mortgaged property and of the project shall be kept in accordance
with the requirements of the Secretary.
(e) Within sixty (60) days following the end of each
fiscal year the Secretary shall be furnished with a complete annual
financial report based upon an examination of the books and records
of mortgagor prepared in accordance with the requirements of the
Secretary, prepared and certified to by an officer or responsible
Owner and, when required by the Secretary, prepared and certified
by a Certified Public Accountant, or other person acceptable to the
Secretary.
(f) At request of the Secretary, his agents, employees,
or attorneys, the Owners shall furnish monthly occupancy reports
and shall give specific answers to questions upon which information
is desired from time to time relative to income, assets,
liabilities, contracts, operation, and condition of the property
and the status of the insured mortgage.
(g) All rents and other receipts of the project shall be
deposited in the name of the project in a financial institution,
whose deposits are insured by an agency of the Federal Government.
Such funds shall be withdrawn only in accordance with the
provisions of this Agreement for expenses of the project or for
distributions of surplus cash as permitted by paragraph 6(e) above.
Any Owner receiving funds of the project other than by such
distribution of surplus cash shall immediately deposit such funds
in the project bank account and failing so to do in violation of
this Agreement shall hold such funds in trust. Any Owner receiving
property of the project in violation of this Agreement shall hold
such funds in trust. At such time as the Owners shall have lost
control and/or possession of the project, all funds held in trust
shall be delivered to the mortgagee to the extent that the mortgage
indebtedness has not been satisfied.
10. Owners will comply with the provisions of any Federal,
State, or local law prohibiting discrimination in housing on the
grounds of race, color, religion or creed, sex, or national origin,
including Title VIII of the Civil Rights Act of 1968 (Public Law
90-284; 82 Stat. 73), as amended. Executive Order 11063, and all
requirements imposed by or pursuant to the regulations of the
Department of Housing and Urban Development implementing these
authorities including 24 CFR Parts 100, 107 and 110, and Subparts
1 and M of Part 200).
11. Upon a violation of any of the above provisions of this
Agreement by Owners, the Secretary may give written notice thereof
to Owners by registered or certified mail, addressed to the
addresses stated in this Agreement or such other addresses as may
subsequently, upon appropriate written notice thereof to the
Secretary, be designated by the Owners as their legal business
address. If such violation is not corrected to the satisfaction of
the Secretary within thirty (30) days after the date such notice is
mailed or within such further time as the Secretary determines is
necessary to correct the violation without further notice the
Secretary may declare a default under this Agreement effective on
the date of such declaration of default and upon such default the
Secretary may:
(a) (i) If the Secretary holds the note - declare the
whole of said indebtedness immediately due and
payable and then proceed with the foreclosure
of the mortgage;
(ii) If said note is not held by the Secretary -
notify the holder of the note of such default
and request holder to declare a default under
the note and mortgage and holder after
receiving such notice and request, but not
otherwise, at its option, may declare the
whole indebtedness due and thereupon proceed
with foreclosure of the mortgage or assign the
note and mortgage to the Secretary as provided
in the Regulations;
(b) Collect all rents and charges in connection with the
operation of the project and use such collections to pay the
Owners' obligations under this Agreement and under the note and
mortgage and the necessary expenses of preserving the property and
operating the project.
(c) Take possession of the project, bring any action
necessary to enforce any rights of the Owners growing out of the
project operation and operate the project in accordance with the
terms of this Agreement until such time as the Secretary in his
discretion determines that the Owners are again in a position to
operate the project in accordance with the terms of this Agreement
and in compliance with the requirements of the note and mortgage.
(d) Apply to any court, State or Federal, for specific
performance of this Agreement for an injunction against any
violation of the Agreement for the appointment of a receiver to
take over and operate the project in accordance with the terms of
the Agreement, or for such other relief as may be appropriate since
the injury to the Secretary arising from a default under any of the
terms of this Agreement would be irreparable and the amount of
damage would be difficult to ascertain.
12. As security for the payment due under this Agreement to
the reserve fund for replacements, and to secure the Secretary
because of his liability under the endorsement of the note for
insurance, and as security for the other obligations under this
Agreement, the Owners respectively assign, pledge and manage to the
Secretary their rights to the rents, profits, income and charges of
whatsoever sort which they may receive or be entitled to receive
from the operation of the mortgaged property, subject, however, to
any assignment of rents in the insured mortgage referred to herein.
Until a default is declared under this Agreement, however,
permission is granted to Owners to collect and retain under the
provisions of this Agreement such rents, profits, income and
charges, but upon default this permission is terminated as to all
rents due or collected thereafter.
13. As used in this Agreement the term:
(a) "Mortgage" includes "Deed of Trust", "Chattel
Mortgage", "Security Instrument", and any other security for the
note identified herein, and endorsed for insurance or held by the
Secretary;
(b) "Mortgagee" refers to the holder of the mortgage
identified herein, its successors and assigns;
(c) "Owners" refers to the persons named in the first
paragraph hereof and designated as Owners, their successors, heirs
and assigns;
(d) "Mortgaged Property" includes all property, real,
personal or mixed, covered by the mortgage or mortgages securing
the note endorsed for insurance or held by the Secretary;
(e) "Project" includes the mortgaged property and all
its other assets of whatsoever nature or wheresoever situate, used
in or owned by the business conducted on said mortgaged property,
which business is providing housing and other activities as are
incidental thereto;
(f) "Surplus Cash" means any cash remaining after:
(1) the payment of:
(i) All sums due or currently required to be
paid under the terms of any mortgage or
note insured or held by the Secretary;
(ii) All amounts required to be deposited in
the reserve fund for replacements;
(iii) All obligations of the project other than
the insured mortgage unless funds for
payment are set aside or deferment of
payment has been approved by the
Secretary; and
(2) the segregation of:
(i) An amount equal to the aggregate of all
special funds required to be maintained
by the project: and
(ii) All tenant security deposits held.
(g) "Distribution" means any withdrawal or taking of
cash or any assets of the project, including the segregation of
cash or assets for subsequent withdrawal within the limitations of
Paragraph 6(e) hereof, and excluding payment for reasonable
expenses incident to the operation and maintenance of the project.
(h) "Default" means a default declared by the Secretary
when a violation of this Agreement ______________ satisfaction
within the time allowed by this Agreement of such further time as
may be allowed by the Secretary after written notice.
(i) "Section" refers to a Section of the National
Housing Act, as amended.
(j) "Displaced persons or families" shall mean a family
or families, or a person, displaced from an urban renewal area or
as the result of government action, or as a result of a major
disaster as determined by the President pursuant to the Disaster
Relief Act of 1970.
(k) "Elderly person" means any person, married or
single, who is sixty-two years of age or over.
14. This instrument shall bind, and the benefits shall inure
to the respective Owners, their heirs, legal representatives,
executors, administrators, successors in office or interest, and
assigns, and to the Secretary and his successors so long as the
contract of mortgage insurance continues in effect, and during such
further time as the Secretary shall be the owner, holder, or
reinsurer of the mortgage, or obligated to reinsure the mortgage.
15. Owners warrant that they have not, and will not, execute
any other agreement with provisions contradictory of, or in
opposition to, the provisions hereof, and that, in any event, the
requirements of this Agreement are paramount and controlling as to
the rights and obligations set forth and supersede any other
requirements in conflict therewith.
16. The invalidity of any clause, part or provision of this
Agreement shall not affect the validity or the remaining portions
thereof.
17. The following Owners: Bass Real Estate Fund-84, A North
Carolina Limited Partnership and all present and future general and
limited partners thereof do not assume personal liability for
payments due under the note and mortgage, or for the payments to
the reserve for replacements, or for matters not under their
control, provided that said Owners shall remain liable under this
Agreement only with respect to the matters hereinafter stated;
namely:
(a) for funds or property of the project coming into
their hands which, by the provisions hereof, they are note entitled
to retain; and
(b) for their own acts and deeds or acts and deeds of
others which they have authorized in violation of the provisions
hereof.
(To be executed with formalities for recording a deed to real estate)
In witness whereof, the owner has caused these presents to be
signed under seal the day and year written above.
OWNER:
BASS REAL ESTATE FUND-84, A NORTH [SEAL]
CAROLINA LIMITED PARTNERSHIP
[CORPORATE SEAL] By: Marion Bass Real Estate Group, Inc.
Managing General Partner
ATTEST:
__________________ By:________________________________
Secretary Ronald L. Paschal
Vice President
November 22, 1995
SECRETARY OF HOUSING AND URBAN
DEVELOPMENT
By:___________________________ [SEAL]
Authorized Agent
November 22, 1995
ACKNOWLEDGMENT
STATE OF NORTH CAROLINA ]
] ss
COUNTY OF MECKLENBURG ]
On this 22nd day of November personally came before me J.
MICHAEL NEESE, a Notary Public of the County of Mecklenburg, State
of North Carolina, Ronald L. Paschal, who, being by me duly sworn,
says that he is Vice President of Marion Bass Real Estate Group,
Inc., a corporation, Managing General Partner of BASS REAL ESTATE
FUND-84, A NORTH CAROLINA LIMITED PARTNERSHIP, and that the seal
affixed to the foregoing instrument is the corporate seal of said
Managing General Partner and that said instrument was signed and
sealed by him for and on behalf of said Limited Partnership by
authority duly given by said Managing General Partner. And said
Vice President acknowledged said instrument to be the act and deed
of said Limited Partnership
Witness my hand and official seal.
_______________________
Notary Public
[SEAL]
My Commission expires: 5-18-99
STATE OF NORTH CAROLINA ]
] ss
COUNTY OF GUILFORD ]
On this 22nd day of November, 1995 before me personally
appeared DON MCCARLES, JR. to me personally known, who, being by me
duly sworn, did say that he/she is the authorized agent of the
Secretary of Housing and Urban Development, which executed the
foregoing instrument, and that said instrument was signed and
sealed in behalf of said Secretary of Housing and Urban Development
the day and year first above written.
IN WITNESS WHEREOF I hereunto set my hand and official seal.
______________________________
Notary Public
RUTH SHORT
NOTARY PUBLIC
GUILFORD COUNTY, NC
[SEAL]
My Commission Expires: 10-5-97
THE CHASE
EXHIBIT A
BEGINNING at a new iron pin located at the northeasterly
intersection of Shenandoah Avenue (a 60-foot public right-of-way)
and Rockway Drive (a 30-foot public right-of-way); thence with the
easterly margin of Shenandoah Avenue N. 52-52-15 W. 145.46 feet to
a new iron pin located in the easterly margin of Independence
Boulevard (variable width public right-of-way); thence with the
easterly margin of said Independence Boulevard N. 26-44-22 W. 39.46
feet to a new iron pin; thence N. 23-03-35 W. 189.54 feet to a
point in Briar Creek; thence with Briar Creek the following five
(5) courses and distances: (1) N. 17-30-00 E. 64.65 feet to a
point, (2) N. 07-00-00 W. 120.00 feet to a point, (3) N. 09-00-00
E. 110.00 feet to a point, (4) N. 22-30-00 E. 270.00 feet to a
point, (5) N. 52-25-56 E. 91.35 feet to a point located in the
southwesterly margin of Commonwealth Avenue (a 60-foot public
right-of-way); thence with the southwesterly margin of said
Commonwealth Avenue S. 52-52-15 E. 487.07 feet to an existing iron
pin at the northeasternmost corner of the E.T. Mangum property (now
or formerly); thence with the line of said E.T. Mangum property the
following two (2) courses and distances: (1) S. 37-01-37 W. 299.98
feet to an existing iron pin, (2) S. 52.51.12 E. 60.12 feet to a
new iron pin in the westerly margin of the right-of-way of the
above-referenced Rockway Drive; thence with the westerly margin of
said Rockway Drive S. 37-16-58 W. 405.00 feet to the POINT AND
PLACE OF BEGINNING, containing approximately 6.9465 acres according
to survey for Bass Real Estate Fund-84, a North Carolina limited
partnership re: The Chase prepared by R.B. Pharr & Associates,
P.A., dated October 18, 1995.