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AGREEMENT TO MODIFY LOAN DOCUMENTS
THIS AGREEMENT TO MODIFY LOAN DOCUMENTS ("Agreement"), dated as of
February 25, 2021, by and between ZIONS BANCORPORATION, N.A. (fka ZB, N.A.) dba California
Bank & Trust, as collateral and administrative agent ("Agent") for itself and each and every other
lender party to the subject credit facility from time to time (each a "Lender" and, collectively,
"Lenders"), and VILLAGE OF ESCAYA APARTMENTS, LLC, a Delaware limited liability
company ("Owner"), and VILLAGE OF ESCAYA MIXED USE, LLC, a Delaware limited
liability company ("Master Tenant") (Owner and Master Tenant shall collectively be
referred to in the singular as 'Borrower"), is made with reference to the following facts:
RECITALS
A. Agent and Lenders previously agreed to extend to Borrower a land loan in the
original maximum principal sum of Fifty -Eight Million Eight Hundred Forty Thousand Dollars
($58,840,000.00) (as the same has been or may be amended from time to time, "Loan") pursuant to
the terms of that certain Construction Loan Agreement (Syndicated) dated as of February 23, 2018,
by and between Agent, Compass Bank, an Alabama banking corporation n/k/a BBVA USA, as joint
lead arranger ("BBVA"), and Borrower (as the same has been or may be amended from time to time,
"Loan Agreement"). All capitalized terms not specifically defined herein have the meanings given
to such terms in the Loan Agreement.
B. The Loan is evidenced by (i) that certain Construction Loan Promissory Note dated
as of February 23, 2018, executed by Borrower in favor of Agent in the face amount of Twenty -Nine
Million Four Hundred Twenty Thousand Dollars ($29,420,000.00) (as the same has been or may be
amended from time to time, "CB&T Note"), and (ii) that certain Construction Loan Promissory Note
dated as of February 23, 2018, executed by Borrower in favor of BBVA in the face amount of Twenty -
Nine Million Four Hundred Twenty Thousand Dollars ($29,420,000.00) (as the same has been or
may be amended from time to time, "BBVA Note" together with CB&T Note shall be referred to
collectively herein as "Note").
C. The Note is secured by, among other things, that certain Fee and Leasehold
Construction Deed of Trust, Assignment of Leases and Rents and Security Agreement (Including
Fixture Filing) dated as of February 23, 2018, and recorded on March 8, 2018, as Instrument No.
2018-0090455 in the Official Records of San Diego County, State of California (as the same has been
or may be amended from time to time, "Deed of Trust").
D. Certain obligations of Borrower are guaranteed by HOMEFED LLC, a Delaware
limited liability company (as successor by merger to HOMEFED CORPORATION, a Delaware
corporation by merger pursuant to that certain Agreement and Plan of Merger entered into on or
about July 1, 2019, and consented to by Agent and BBVA pursuant to that certain consent letter
agreement dated as of July 1, 2019) ("Guarantor"), pursuant to that Continuing Guaranty
Agreement (Payment and Completion) dated as of February 23, 2018, executed by Guarantor in
favor of Agent and Lenders (as the same has been or may be amended from time to time,
"Guaranty").
E. Borrower and Guarantor have agreed to indemnify the "Indemnified Parties" (as
defined in the Environmental Indemnity) for certain potential environmental liabilities with respect
to the Property pursuant to that certain Environmental Indemnity dated as of February 23, 2018,
603093491 1 Agreement to Modify Loan Documents
executed by Borrower and Guarantor in favor of Agent and Lenders (as the same has been or may be
amended from time to time, "Environmental Indemnity").
F. All of the documents evidencing or relating to the Loan, including without limitation
the documents evidencing and relating to the modifications to the Loan set forth in this Agreement,
collectively shall be referred to as the "Loan Documents."
G. Borrower has requested that Agent modify the Loan by, among other things
extending the Initial Maturity Date (as defined in the Loan Agreement) from the current date of
March 1, 2021 to June 29, 2021 ("New Initial Maturity Date").
H. Agent and Lenders are willing to consent to the modifications of the Loan Documents
set forth herein subject to the conditions set forth below. The date on which all of the conditions set
forth herein are satisfied shall be referred to as the "Modification Closing Date."
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the foregoing premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree
as follows:
1. Recitals. The preamble, recitals and any exhibits hereto are hereby incorporated
into this Agreement.
2. Extension of the Initial Maturity Date. From and after the Modification Closing
Date, the Initial Maturity Date of the Loan and the Note is hereby extended from the current date of
March 1, 2021, to the New Initial Maturity Date of June 29, 2021 or such other earlier date resulting
from the acceleration of all sums due and owing under the Loan, as provided in the Note and the
other Loan Documents. The New Initial Maturity Date may be extended for an additional eight (8)
Calendar Months to the "Extended Maturity Date" (i.e., March 1, 2022), if Borrower elects to
exercise the extension option set forth in the Loan Agreement and satisfies the "Extension
Conditions" (both as defined in the Loan Agreement and restated herein) for the extension option
under Section 4 of this Agreement. All references in the Loan Documents to the Initial Maturity
Date shall be revised to refer to the New Initial Maturity Date set forth herein. Borrower
acknowledges that all commitments to make any "Advances" (as defined in the Loan Agreement)
under the Loan shall terminate on March 1, 2021, and as of March 1, 2021, the outstanding principal
balance of the Loan shall not be in excess of Fifty Million Dollars ($50,000,000).
3. Interest -Only Payments. From and after the Modification Closing Date until the
Maturity Date, Borrower is only required to make interest -only payments under each Note.
Accordingly, as of the Modification Closing Date, Section 3.2 of each Note is deleted.
4. Modification of Definitions.
4.1. The following definitions of "Extended Maturity Date", "Extension
Conditions", "Initial Maturity Date", and "Maturity Date" set forth in the Loan Agreement are
deleted in their entirety and replaced with the following:
"Extended Maturity Date" shall mean the date eight (8) Calendar Months after the
Initial Maturity Date — i.e., March 1, 2022 — if the loan extension option is exercised.
"Extension Conditions"
(a) No Event of Default shall exist, and no event shall have occurred and no
condition shall exist for which Agent has given notice and that remains
uncured, and which after lapse of time would constitute an Event of Default;
603093491 2 Agreement to Modify Loan Documents
(b) If required by Agent in its sole discretion, Borrower shall furnish to Agent
with respect to the proposed extension, a CLTA Form 110.5 Endorsement to
Agent's policy of title insurance (showing no additional exceptions to title
other than those shown on the original policy of title insurance and the
Permitted Exceptions). Such Endorsement shall be furnished at Borrower's
sole cost and expense;
(c) Agent shall have received from Borrower written notice of the proposed
extension at least thirty (30) days before the date of said extension;
(d) Agent shall have received an updated Appraisal showing an as -is value for
the Project, such that the amount of the Loan shall not exceed the LTV
Requirement (Extension/Conversion); provided, however, in the event the
amount of the Loan should exceed the LTV Requirement
(Extension/Conversion), Borrower shall reduce the outstanding balance of the
Loan by an amount equal to the amount by which the sum of the outstanding
balance of the disbursed Loan funds exceeds the LTV Requirement
(Extension/Conversion) (in such event Lenders' maximum Loan commitment
hereunder shall be reduced to the LTV Requirement (Extension/Conversion));
(e) The Project must have a Net Operating Income sufficient to provide a Debt
Yield Ratio (Extension) of not less than 8.00%; provided, however, that in the
event the Net Operating Income is not sufficient to satisfy this financial test,
then Borrower may extend the Loan to the Extended Maturity Date by
repaying a portion of the unpaid principal portion of the Loan in the amount
that will satisfy such test;
(f) The Project must have a Net Operating Income sufficient to provide a Debt
Service Coverage Ratio (Extension) of not less than 1.10 to 1.00; provided,
however, that in the event the Net Operating Income is not sufficient to
satisfy this financial test, then Borrower may extend the Loan to the
Extended Maturity Date by repaying a portion of the unpaid principal portion
of the Loan in the amount that will satisfy such test;
(g) Payment by Borrower to Agent of the Extension Fee;
(h) Borrower must be in full compliance with all terms, conditions and covenants
of the Loan, including the financial covenants as set forth in Section 7.20
below;
(i) There shall have been no material adverse change in the physical condition of
the Property or the Improvements since the Closing Date that has not been
remedied;
(j) Borrower shall pay all actual third party out of pocket costs and expenses
reasonably incurred by Agent and/or Lenders in connection with any
extension, including, without limitation, reasonable attorneys' fees, title
costs, appraisal fees, recording charges and other closing fees and costs;
(k) If any Cash Flow Sweep Triggering Event has occurred, a Cash Flow Sweep
Termination Event has occurred on or before the effective date of the
extension.
"Initial Maturity Date" means July 1, 2021.
603093491 3 Agreement to Modify Loan Documents
"Maturity Date" shall mean, as applicable: (a) the date on which the Loan becomes
due and payable, which date shall be the Initial Maturity Date of June 29, 2021,
which date may be extended for an additional eight (8) Calendar Months to the
Extended Maturity Date (i.e., March 1, 2022), if Borrower elects to exercise the
extension option set forth in this Agreement and satisfies the Extension Conditions
for the extension option under Section 3 of this Agreement; or (b) such other earlier
date resulting from the acceleration of all sums due and owing under the Loan, as
provided in the Note and the other Loan Documents.
4.2. The following definitions of "Debt Yield Ratio (Extension)", "Debt
Service Coverage Ratio (Extension)" are hereby added to the Loan Agreement:
"Debt Yield Ratio (Extension)" shall mean the ratio of (i) the lessor of Net
Operating Income or "as is" net operating income set forth in the Appraisal for the
Property received in connection with the proposed extension to (ii) the then -
Commitment Amount.
"Debt Service Coverage Ratio (Extension)" means the ratio of (a) the lessor of
Net Operating Income or "as is" net operating income set forth in the Appraisal for
the Property received in connection with the proposed extension to (b) the annual
debt service payments payable to Agent under the sum of the then outstanding Loan
calculated based on a thirty (30) -year amortization schedule and interest rate based
on the greatest of (i) Borrower's actual, then -current Interest Rate; (ii) six and one-
half percent (6.50%) per annum, or (iii) a phantom rate calculated at the then—
current 10—year Treasury Note yield plus two and one-half percent (2.50%).
5. Amendment to the Other Loan Documents. All of the other Loan Documents
shall be deemed amended as and to the extent necessary to refer to and to secure the obligations
under the Loan Agreement, the Note and the other Loan Documents, as amended above, and to the
extent of any inconsistency between any terms and conditions set forth herein, in the Note, Deed of
Trust, Guaranty or any associated Loan Documents executed prior to the date of this Agreement, the
terms hereof shall control and shall supersede to the extent provided herein any contrary or
conflicting term, provision and/or condition of or to said documents.
6. Conditions Precedent. In no event shall Agent have any obligation to close this
transaction unless and until all of the following conditions are satisfied:
6.1 No Defaults. On the Modification Closing Date, there shall be no uncured
Event of Default hereunder or under the Loan Documents, and no event of which Agent has provided
written notice to Borrower and which, with the passage of time, will result in an Event of Default
under the Loan Documents.
6.2 Loan Modification Fee. On or prior to the Modification Closing Date, in
connection with the modifications set forth herein, Borrower shall pay to Agent a loan modification
fee in the amount as set forth in that certain fee letter acknowledged and agreed to by Borrower of
even date herewith, which fee once paid shall be fully earned and non-refundable.
6.3 Payment of A"pt's Costs. On or before the Modification Closing Date,
Borrower shall pay all of Agent's actual out-of-pocket costs and expenses reasonably incurred in
connection with the documentation and closing of the modifications to the Loan Documents described
herein, including without limitation all reasonable attorneys' fees and other closing fees and costs.
6.4 Title Endorsement. Issuance to Agent of a CLTA 110.5(e) endorsement (or
any substantially equivalent endorsement(s) as reasonably approved by Agent) to its Title Policy in
form satisfactory to Agent and insuring the continued first lien priority of the Deed of Trust, except
as such exceptions as may be approved by Agent in its sole discretion.
603093491 4 Agreement to Modify Loan Documents
7. Representations and Warranties. Borrower hereby represents and warrants to
Agent and Lenders, to its actual knowledge, as of the date hereof, as follows:
7.1 No Default. No Event of Default under any of the Loan Documents has
occurred that remains uncured, and no event has occurred which, with the giving of notice or the
passage of time, or both, would constitute an Event of Default under any of the Loan Documents.
7.2 No New Liens. Except as permitted by the Loan Documents, Borrower has
granted no liens upon the Property or security interests in the collateral described in the Loan
Documents, except for the liens and security interests granted in favor of Agent and Lenders.
7.3 No Claims or Defenses. As of the date hereof, Borrower has no claims
against Agent or Lenders nor defenses to the enforcement of any of the Loan Documents in
accordance with their respective terms, as amended by this Agreement.
7.4 Representations and Warranties. As of the date hereof, all of the
representations and warranties contained in all of the Loan Documents remain true, correct,
complete and accurate.
7.5 No Financial Change. There has been no change in Borrower's financial
condition since the closing of the Loan that has had a Material Adverse Effect.
8. Financial Covenants. Borrower acknowledges and agrees that the financial
covenants contained in the Loan Documents are in full force and effect and shall be monitored by
Agent based on the financial reports to be provided under the Loan Agreement.
9. Further Assurances. Borrower agrees to perform such other and further acts, and
to execute such additional documents, agreements, notices or financing statements, as Agent
reasonably deems necessary from time to time to create, preserve, continue and perfect any of Agents
and Lenders' rights under this Agreement.
10. IntegEation. All rights, remedies, powers and interest provided herein are in
addition to the rights, remedies, powers and interests provided in the Loan Documents, the terms
and provisions of which are incorporated herein by this reference and made a part hereof. If and to
the extent any term or provision hereof is inconsistent with any term or provision of the Loan
Documents, the term or provision of this Agreement shall prevail.
11. Entire Agreement: Amendtnents. This Agreement and the other Loan Documents
contain the entire agreement between Borrower, Agent, and Lenders with respect to the Loan
Documents, and all prior negotiations, commitments, understandings and agreements are
superseded by this Agreement and the Loan Documents. No amendment, modification, supplement,
extension, termination or waiver of any provision of this Agreement, any Loan Document, or any
other agreement executed in connection with any of the foregoing shall be effective unless in writing
and signed by Agent and Borrower (and any Required Lender or Lenders to the extent required
under the terms of the Loan Agreement), and then only in the specific instance and for the specific
purpose given.
12. Governing Law. The Loan Documents shall be governed by, and construed and
enforced in accordance with, the internal laws of the State of California, without regard to its conflict
of laws principles.
13. Section Headings. The section headings of this Agreement are included for
convenience only, and shall not affect the construction or interpretation of any provision of this
Agreement.
603093491 5 Agreement to Modify Loan Documents
14. Attorneys' Fees. If any action or other proceeding is brought to interpret or enforce
any provision of this Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and expenses.
lb. Binding Effect. This Agreement and the other Loan Documents shall be binding
upon, and shall inure to the benefit of, Borrower, Agent, and Lenders and their respective successors
and assigns, or heirs and personal representatives, as applicable.
16. Severability of Provisions. No provision of this Agreement or any other Loan
Document that is held to be inoperative, unenforceable and invalid shall affect the remaining
provisions, and this and all provisions of this Agreement and the Loan Documents are hereby
declared to be severable.
17. Miscellaneous. No reference to this Agreement is necessary in any instrument or
document at any time referring to the Loan Documents. A reference to the Loan Documents shall be
deemed a reference to such document as modified hereby.
18. No Commitment. The furnishing of this Agreement and other modification
documents shall in no way be construed as a commitment by Agent or Lenders to modify, amend,
extend or otherwise alter the Loan Documents. Agent and Lenders shall be under no obligation to
close the transaction evidenced by this Agreement unless this Agreement and all related documents
are returned to Agent fully executed by Borrower, and unless this Agreement is actually executed by
Agent and delivered to Borrower.
19. No Other Amendments. Except as expressly amended herein, the Loan
Agreement, Note, and all of the other Loan Documents remain unmodified and in full force and
effect.
20. Counterparts. This Agreement may be executed in any number of counterparts and
by different parties hereto on separate counterparts, each of which, when so executed and delivered
shall be an original, but all such counterparts shall together constitute one and the same
instrument.
21. Document Imagine. Agent shall be entitled, in its sole discretion, to image or
make copies of all or any selection of the agreements, instruments, documents, and items and
records governing, arising from or relating to any of Borrower's loans, including, without limitation,
this Agreement and the other Loan Documents, and Agent may destroy or archive the paper
originals other than the Notes. Except as provided in the prior sentence, the parties hereto (i) waive
any right to insist or require that Agent produce paper originals, (ii) agree that such images shall be
accorded the same force and effect as the paper originals, (iii) agree that Agent is entitled to use such
images in lieu of destroyed or archived originals for any purpose, including as admissible evidence in
any demand, presentment or other proceedings, and (iv) further agree that any executed facsimile
(faxed), scanned, or other imaged copy of this Agreement or any Loan Document shall be deemed to
be of the same force and effect as the original manually executed document.
22. Reaffirmation of Loan Documents. All of the terms and conditions contained in
the Loan Agreement, the Note, the Deed of Trust and all of the other Loan Documents, including,
without limitation, any prior modifications, amendment or supplements, except as modified herein,
are hereby ratified, reaffirmed and republished and incorporated herein by this reference and made
a part hereof.
603093491 6 Agreement to Modify Loan Documents
23. Originally Executed Documents. As an express condition to Agent modifying the
Loan based upon Agent's receipt of a fully executed imaged copy of this Agreement, Borrower shall
deliver to Agent a fully -executed copy of this Agreement with original hand-written signatures (i.e.,
wet signatures) of all parties to this Agreement on or before thirty (30) days from the date of this
Agreement, and Borrower's failure to do so on or before such date shall after written notice and a ten
(10) day opportunity to cure constitute an Event of Default under this Agreement and the Loan
Documents. Notwithstanding the foregoing, Borrower and Agent agree that this Agreement and any
documents executed in connection therewith may be signed and transmitted by electronic mail of a
.PDF document and thereafter maintained in imaged or electronic form, and that such imaged or
electronic record shall be valid and effective to bind the party so signing as a paper copy bearing such
party's hand-written signature. Borrower and Agent further agree that the signatures appearing on
this this Agreement and any documents executed in connection herewith (whether in imaged or e -
signed or other electronic format) shall be treated, for purposes of validity, enforceability and
admissibility, the same as hand-written signatures.
[The balance of this page is intentionally left blank.]
603093491 7 Agreement to Modify Loan Documents
IN WITNESS WHEREOF, this Agreement has been executed by Borrower and Lender as of
the date first above written.
BORROWER:
VILLAGE OF ESCAYA APARTMENTS, LLC, a
Delaware limited liability company
By: HomeFed Village III, LLC, a Delaware limited
liability company, its sole member
By:
Name: Il
Title: I
VILLAGE OF ESCAYA MIXED USE, LLC, a
Delaware limited liability company
By: Rampage Vineyard LLC, a Delaware limited
liability company, its sole member
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[Signatures Continued on Following Page].
603093491 Signature Page Agreement to Modify Loan Documents
AGENT:
ZIONS BANCORPORATION, N.A. (fka ZB, N.A.) dba
California Bank & Trust
By:`
Name:
BBVA:
BBVA USA, an Alabama banking corporation f/k/a
Compass Bank
Title:
003093491 Signature Page Agreement to Modify Loan Documents
CONSENT OF GUARANTOR
THE UNDERSIGNED GUARANTOR UNDER THAT CERTAIN CONTINUING GUARANTY
AGREEMENT (PAYMENT AND COMPLETION) AND THAT CERTAIN ENVIRONMENTAL
INDEMNITY, BOTH DATED AS OF FEBRUARY 23, 2018, HEREBY CONSENTS TO THE ABOVE
AMENDMENTS TO THE LOAN DOCUMENTS, AND HEREBY REAFFIRM ITS GUARANTY AND
INDEMNITY, AS SO AMENDED, AND GUARANTOR FURTHER ACKNOWLEDGES THAT SUCH
GUARANTY AND INDEMNITY ARE AND SHALL REMAIN IN FULL FORCE AND EFFECT
NOTWITHSTANDING THE CHANGES TO THE LOAN DOCUMENTS SET FORTH ABOVE.
HOMEFED LLC, a Delaware limited liability
company (as successor by merger to HOMEFED
CORPORATION, a Delaware corporation)
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603093491 Guarantor Consent Agreement to Modify Loan Documents