HomeMy WebLinkAboutC&C DEVELOPMENT COMPANY, LLC AND ORANGE HOUSING DEVELOPMENT CORPORATION (2)INSOURANCE NOT REQUIRED
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MODIFICATION AGREEMENT
A-2018.235
THIS MODIFICATION AGREEMENT (this "Agreement") is made and entered into as of
October 22, 2018, by and among BANK OF AMERICA, N.A., a national banking association ("Bank"),
CALIFORNIA COMMUNITY REINVESTMENT CORPORATION, a California nonprofit public benefit
corporation ("CCRC"), and DEPOT AT SANTIAGO, L.P., a California limited partnership ("Borrower").
RECITALS:
A. Reference is made to that certain Construction and Permanent Loan Agreement
(Affordable Housing — California) executed by Borrower and Bank, dated as of March 1, 2016, as amended
by (i) that certain Loan Modification Agreement dated August 9, 2017 by and among Borrower, Bank and
Guarantor, (ii) that certain Second Loan Modification Agreement dated November 1, 2017 by and among
Borrower, Bank and Guarantor, (iii) that certain Third Loan Modification Agreement dated March 9, 2018
by and among Borrower, Bank and Guarantor, and (iv) that certain Fourth Loan Modification Agreement
dated September 5, 2018 by Borrower and Bank (collectively, the "Loan Agreement"), pursuant to which
Bank agreed to lend to Borrower the total principal amount of $27,295,270.00 (the "Loan"), for the purpose
of financing the construction of certain Improvements on the Land. Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Loan Agreement.
B. The obligation of Borrower to repay the Loan is evidenced by that certain Promissory Note
Secured by Deed of Trust (Construction Loan Converting to Term Loan) dated as of March 1, 2016, made
by Borrower to the order of Bank in the original principal amount of $27,295,270, as amended by that certain
First Amendment to Promissory Note dated May 30, 2018 (collectively, with all modifications, extensions,
renewals and replacements thereof, the "Note'). The obligations of Borrower under the Loan Agreement
and the Note are secured by that certain Construction and Permanent Deed of Trust with Assignment of
Leases and Rents, Security Agreement, and Fixture Filing (the "Original Deed of Trust") dated as of March
1, 2016, and recorded March 16, 2016 as Instrument No. 2016000109369 in the Official Records of Orange
County, California (the "Official Records"), executed by Borrower, as trustor, for the benefit of Bank,
encumbering Borrower's fee interest in and to the Land (as more fully described on Exhibit A attached
hereto) and interest in and to the Improvements and other personal property described therein. The Original
Deed of Trust was amended by that certain First Amendment to Deed of Trust and Loan Documents (the
"First Amendment of Deed of Trust") dated as of May 30, 2018, and recorded June 19, 2018 as
Instrument No. 2018000224307 in the Official Records. The Original Deed of Trust and the First
Amendment of Deed of Trust are, collectively, referred to herein as the "Deed of Trust." The obligations
of Borrower under the Loan Agreement and the Note are also secured by other collateral, as more fully
explained in the Loan Agreement. This Agreement, the Loan Agreement, the Note and the Deed of Trust,
together with all of their exhibits, and all other documents which evidence, guaranty, secure, or otherwise
pertain to the Loan are herein collectively referred to as the "Loan Documents."
C. Upon the satisfaction of those certain Conversion Conditions more fully set forth in that
certain Loan Purchase Agreement dated as of March 1, 2016, executed by and among Bank, CCRC and
Borrower, as amended by that certain First Amendment to Loan Purchase Agreement dated as of March 6,
2018, and that certain Second Amendment to Loan Purchase Agreement dated as of May 30, 2018
(collectively, the "Loan Purchase Agreement"), CCRC agreed to purchase the Loan on the Conversion
Date for an amount not to exceed $5,426,500.00 (the "CCRC Purchase Price'), take assignment of the
Loan Documents, and convert the Loan to a term loan.
D. Borrower has requested an increase in the CCRC Purchase Price from CCRC, and CCRC
has agreed to an increase up to $6,420,000.00, subject to modification of the Loan Documents in
accordance with the terms of this Agreement.
E. Bank, CCRC and Borrower wish to enter into this Agreement in order to amend the Loan
Documents in order to increase the CCRC Purchase Price and modify certain of the other terms thereof in
accordance with CCRC's requirements.
NOW THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, Bank, CCRC and Borrower agree as follows:
1. Incorporation of Recitals. The foregoing Recitals are hereby incorporated into this
Agreement by this reference.
2. Amendment of Loan Purchase Agreement. As among CCRC, Bank and Borrower, the
terms, conditions and covenants of the Loan Purchase Agreement are hereby amended as follows:
(a) Recital F. Recital F of the Loan Purchase Agreement is hereby deleted in its
entirety and the following is substituted therefor:
"F. Pursuant to the terms and conditions of this Agreement, upon satisfaction
of the Conversion Conditions set forth in Article 3 and any other conditions herein, CCRC
has agreed to purchase the Bank Loan from Bank in the principal amount of $6,420,000 or
such lesser amount as required by the terms hereof. The terms and conditions of CCRC's
purchase of the Bank Loan are set forth in this Agreement. Upon such purchase of the
Bank Loan by CCRC (subject to the terms herein), the Bank Loan will, pursuant to its terms,
convert into a term loan in an amount not to exceed Six Million Four Hundred Twenty
Thousand and No/100th Dollars ($6,420,000) with a term of thirty-five (35) years (the
"Permanent Loan"). If CCRC does not purchase the Bank Loan from Bank for any reason
whatsoever, the Bank Loan will become immediately due and payable on the Construction
Loan Maturity Date (as defined in the Loan Agreement)."
(b) Section 2.1(a). Section 2.1(a) of the Loan Purchase Agreement is hereby deleted
in its entirety and the following is substituted therefor:
"(a) CCRC Purchase Price. Provided that all of the Conversion Conditions set
forth in Article 3 and Exhibit G of this Agreement are satisfied, CCRC shall purchase the
Bank Loan at par, in the maximum principal amount of $6,420,000 (the "CCRC Purchase
Price"), on the Conversion Date, subject to adjustment as provided in Section 2.1(b) below;
provided, however, that at Conversion, the Permanent Loan shall not exceed eighty
percent (80%) of CCRC's appraised Project Market Value as Stabilized Subject to
Restricted Rents Including the Project Based Subsidy Rents (Section 8 Value). On or
before the Conversion Date, Borrower shall have made all such payments of principal and
interest on the Note, such that the principal amount outstanding together with any accrued
unpaid interest with respect to the Permanent Loan as of the Conversion Date does not
exceed the CCRC Purchase Price."
(c) Section 4.1. Section 4.1 of the Loan Purchase Agreement is hereby deleted in its
entirety and the following is substituted therefor:
"4.1 Time of Conversion. The closing of the sale of the Bank Loan by Bank to
CCRC and the recordation of the Assignment and Assumption (the "Conversion"), shall
occur on or before a date no later than five (5) business days following satisfaction of all of
the conditions set forth in Article 3 of this Agreement (such date, the "Conversion Date").
The precise date and time of the Conversion Date shall be mutually determined by Bank,
CCRC and Borrower; provided, however, the Conversion Date shall not occur later than
December 1, 2018 (the "Termination Date"), unless extended pursuant to the mutual
agreement of Bank and CCRC. In the event the Conversion Date has not occurred by the
Termination Date as a result of the failure of Borrower or Bank to satisfy any condition for
the benefit of CCRC set forth in this Agreement, then Bank and CCRC shall have the right,
each in its sole and absolute discretion, to terminate this Agreement."
3. Amendment of Note. As between Bank and Borrower (and CCRC as successor to Bank),
the terms, conditions and covenants of the Note are hereby amended as follows:
(a) Section 2.1. Section 2.1 of the Note is hereby deleted in its entirety and the
following is substituted therefor:
"Construction Loan Maturity Date. All principal and all accrued and unpaid interest and
other sums due hereunder shall be due and payable on December 1, 2018 (the
"Construction Loan Maturity Date'), subject to extension as provided in Section 2.2. The
period from the date of recordation of the Deed of Trust through the Construction Loan
Maturity Date is herein referred to as the 'Construction Loan Period."'
(b) Section 4.2. Section 4.2(a) of the Note is hereby deleted in its entirety and the
following is substituted therefor:
"(a) The "Term Loan Interest Rate" shall be the applicable interest rate accruing on
this Note during the Term Loan Period determined in accordance with this Section 4.2.
For the period of time commencing with the Conversion Date and thereafter until the date
that is one hundred eighty (180) months from the Conversion Date (the "Term Loan
Interest Rate Reset Date"), the outstanding principal balance of this Note shall bear
interest at a fixed interest rate of Five and Sixty -Seven one hundredth percent (5.67%)
per annum (the "Initial Term Loan Interest Rate")."
(c) Section 6.2(a). Section 6.2(a) of the Note is hereby deleted in its entirety and the
following is substituted therefore:
"(a) No Prepayment Fee Periods. Borrower may prepay all or a part of the Loan
without fee or premium at any time prior to the Conversion Date.
Notwithstanding anything to the contrary set forth above, Borrower may prepay the
principal balance of this Note prior to the Conversion Date, without fee, premium or penalty,
provided that: (a) no prepayment may be made which in Bank's judgment would
contravene or prejudice funding under any applicable permanent loan commitment or tri -
party agreement or the like; (b) Bank shall have actually received from Borrower prior
written notice of (i) Borrower's intent to prepay, (ii) the amount of principal which will be
prepaid (the "Prepaid Principal"), and (iii) no prepayment may be made which would reduce
the principal balance of the Loan to an amount which is less than $6,420,000 (unless such
prepayment is made in order to satisfy the requirements under Section 2.1(b) of the Loan
Purchase Agreement and Borrower, concurrent with such prepayment to Bank, delivers to
CCRC any "Delivery Assurance Fee" required under the Delivery Assurance Note or the
Loan Purchase Agreement) or such lesser amount of the CCRC Purchase Price as may
be required to satisfy Section 2.1(b) be permitted pursuant to the terms of the Loan
Purchase Agreement. If this Note is prepaid in full, any commitment of Bank for further
advances shall automatically terminate."
4. Amendment of Loan Agreement. As between Bank and Borrower (and CCRC as
successor to Bank), the terms, conditions and covenants of the Loan Agreement are hereby amended as
follows:
(a) Recital D. Recital D of the Loan Agreement is hereby deleted in its entirety and
the following is substituted therefore:
"The Loan is due and payable on December 1, 2018, unless further extended pursuant to
the terms hereof (the "Construction Loan Maturity Date"). However, if prior to the
Construction Loan Maturity Date, Borrower satisfies all "Conversion Conditions" contained
in that certain Loan Purchase Agreement of even date herewith by and among Borrower,
Lender and CCRC, as amended to date, CCRC will purchase the Loan and the Loan will
convert to a term loan not to exceed the principal amount of Six Million Four Hundred and
Twenty Thousand and No/100th Dollars ($6,420,000) (the "Term Loan Amount") on the
Conversion Date, and Borrower shall repay the Loan in monthly amortized principal and
interest payments with a balloon payment due at maturity, on terms and conditions as more
fully set forth in the Note. Once converted, the Loan shall have a term of approximately
thirty-five (35) years, and maturing on the Term Loan Maturity Date (as defined in the
Note)."
5. Amendment to Loan Documents. Any reference to the Permanent Loan, the Permanent
Loan Amount, the CCRC Purchase Price, the Term Loan Amount or any other reference generally to the
amount of the Loan on or after the Conversion Date in any of the Loan Documents or other documents
related thereto, is hereby amended, modified and revised to refer to $6,420,000 as the amount thereof.
6. Modification Fee. As consideration for CCRC's agreement to enter into this Agreement
and the modifications to the Loan Documents contemplated herein, Borrower shall pay to CCRC a
modification fee equal to $9,935.00 on or prior to the date of execution of this Amendment.
7. Further Assurances. Upon CCRC's or Bank's request and at Borrower's sole cost and
expense, Borrower shall execute, acknowledge and deliver any other amendments, modifications or
instruments and perform any other acts necessary, desirable or proper, as reasonably determined by CCRC
or Bank, to carry out the purposes of this Agreement.
8. Attorneys' Fees and Costs. Borrower shall reimburse CCRC and Bank for their reasonable
attorneys' fees and costs actually incurred in connection with the preparation, review, execution and
delivery of this Agreement and of the amendments or modifications of the Loan Agreement, the Note and
the Loan Documents, if any, related hereto, to be payable concurrently with or prior to the execution of this
Agreement.
9. Ratification. Except as expressly modified herein, the Loan Documents remain unmodified
and in full force and effect and the parties ratify and confirm the terms thereof as modified by this
Agreement.
10. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one instrument.
IN WITNESS WHEREOF, this Agreement is hereby made as of the date first written above.
"Bank"
BANK OF AMERICA, N.A.,
a national banking association
By:
Name:
Title:
Signature Page to Modification Agreement
S-1
1{[4141.10 i
CALIFORNIA COMMUNITY REINVESTMENT CORPORATION,
a California nonprofit public benefit corporation
By:
Mary Kaiser,
President
Signature Page to Modification Agreement
"Borrower"
DEPOT AT SANTIAGO, L.P.,
a California limited partnership
By: OHDC DEPOT, LLC,
a California limited liability company,
its managing general partner
By: Orange Housing Development Corporation,
a California nonprofit public benefit corporation,
its sole member
r
By:
Eunice Bobert
Chief Executive Officer
By: C&C DEPOT, LLC,
a California limited liability company,
its administrative general partner
By: C & C Development Co., LLC,
a California limited liability company,
its sole member
By:
Todd R. Cottle, Trustee of the 2007 Todd R. Cottle
and Jennifer N. Cottle Revocable Trust
By:
Kerry A. Cottle, Trustee of The
Cottle Family Trust Dated 3/8/1987,
Member
Signature Page to Modification Agreement
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JUNIOR LIENHOLDER'S CONSENT AND SUBORDINATION AGREEMENT
(City Loan)
NOTICE: THIS JUNIOR LIENHOLDER CONSENT AND SUBORDINATION AGREEMENT
RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY REMAINING SUBJECT TO
AND OF A LOWER PRIORITY THAN THE LIEN OF THE DEED OF TRUST AS MODIFIED
BY THE FOREGOING MODIFICATION AGREEMENT.
The undersigned ("Junior Lienholder") is the owner and holder of a security interest and other interests
("Junior Security Interest") evidenced by that certain City Deed of Trust and Assignment of Rents (923 N.
Santiago Street, Santa Ana, California) dated July 11, 2013, recorded on August 9, 2013, as Instrument
No. 2013000476764 in the Official Records of Orange County, California (the "Official Records"), together
with the other loan documents executed in connection with the Junior Security Interest, which is junior,
subordinate and subject to the terms, covenants, conditions and restrictions of the Deed of Trust, other than
the Senior Affordability Restrictions (collectively, the "Junior Loan Documents").
Junior Lienholder hereby (a) acknowledges the receipt of the Modification Agreement, (b) consents to the terms
and provisions of the Modification Agreement and the transactions described therein, and (c) confirms and
acknowledges that the Deed of Trust, as amended by the terms of the Modification Agreement, unconditionally
remains a lien or charge on the Property prior and superior to the lien or charge of each of the Junior Loan
Documents, other than the Senior Affordability Restrictions, respectively. Junior Lienholder reaffirms that the
terms of that certain Subordination Agreement dated March 1, 2016 and recorded March 16, 2016 as
Instrument No. 2016000109374 in the Official Records, executed by and among Junior Lienholder, Bank and
Borrower (the "City Subordination"), as amended by the Modification Agreement, are in full force and effect
with respect to the Loan, Deed of Trust and Loan Documents, as amended to date, which Loan, Deed of Trust
and Loan Documents are being assigned to CCRC concurrently herewith pursuant to the terms of the Loan
Purchase Agreement.
Agreed and Acknowledged:
Dated as of: October_, 2015 "JUNIOR LIENHOLDER"
CITY OF SANTA ANA, a charter city and municipal
ATT ST: corporation
By: r
AaDui a
Clerk of the Council Name: �(�IGt22
Its: t.feYl 'Y�,IP/Vf
Consent to Modification Agreement
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JUNIOR LIENHOLDER'S CONSENT AND SUBORDINATION AGREEMENT
(MRSA Loan)
NOTICE: THIS JUNIOR LIENHOLDER CONSENT AND SUBORDINATION AGREEMENT
RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY REMAINING SUBJECT TO
AND OF A LOWER PRIORITY THAN THE LIEN OF THE DEED OF TRUST AS MODIFIED
BY THE FOREGOING MODIFICATION AGREEMENT.
The undersigned ("Junior Lienholder") is the owner and holder of a security interest and other interests
("Junior Security Interest") evidenced by that certain MHSA Deed of Trust with Assignment of Rents,
Security Agreement and Fixture Filing (Construction/Permanent Financing) CaIHFA Development No. 14-
032-M dated March 1, 2016, recorded on March 16, 2016, as Instrument No. 2016000109372 in the Official
Records of Orange County, California (the "Official Records"), together with the other loan documents
executed in connection with the Junior Security Interest, which is junior, subordinate and subject to the terms,
covenants, conditions and restrictions of the Deed of Trust (collectively, the "Junior Loan Documents').
Junior Lienholder hereby (a) acknowledges the receipt of the Modification Agreement, (b) consents to the terms
and provisions of the Modification Agreement and the transactions described therein, and (c) confirms and
acknowledges that the Deed of Trust, as amended by the terms of the Modification Agreement, unconditionally
remains a lien or charge on the Property prior and superior to the lien or charge of each of the Junior Loan
Documents, respectively. Junior Lienholder reaffirms that the terms of that certain Subordination Agreement
dated March 1, 2016 and recorded March 16, 2016 as Instrument No. 2016000109376 in the Official Records,
executed by and among Junior Lienholder, Bank and Borrower (the "MHSA Subordination"), as amended by
the Modification Agreement, are in full force and effect with respect to the Loan, Deed of Trust and Loan
Documents, as amended to date, which Loan, Deed of Trust and Loan Documents are being assigned to
CCRC concurrently herewith pursuant to the terms of the Loan Purchase Agreement.
Agreed and Acknowledged:
Dated as of: October _, 2018 "JUNIOR LIENHOLDER"
CALIFORNIA HOUSING FINANCE AGENCY, a public
instrumentality and political subdivision of the State of
California
0
Name:
Its:
Consent to Modification Agreement
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JUNIOR LIENHOLDER'S CONSENT AND SUBORDINATION AGREEMENT
(IIG Loan)
NOTICE: THIS JUNIOR LIENHOLDER CONSENT AND SUBORDINATION AGREEMENT
RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY REMAINING SUBJECT TO
AND OF A LOWER PRIORITY THAN THE LIEN OF THE DEED OF TRUST AS MODIFIED
BY THE FOREGOING MODIFICATION AGREEMENT.
The undersigned ("Junior Lienholder") is the owner and holder of a security interest and other interests
("Junior Security Interest") evidenced by that certain Declaration of Restrictive Covenants for the
Development and Operation of Affordable Housing dated March 1, 2016, 2018, recorded on March 16, 2016
as Instrument No. 2016000109373 in the Official Records of Orange County, California (the "Official
Records"), together with the other loan documents executed in connection with the Junior Security Interest,
which is junior, subordinate and subject to the terms, covenants, conditions and restrictions of the Deed of
Trust (collectively, the "Junior Loan Documents").
Junior Lienholder hereby (a) acknowledges the receipt of the Modification Agreement, (b) consents to the terms
and provisions of the Modification Agreement and the transactions described therein, and (c) confirms and
acknowledges that the Deed of Trust, as amended by the terms of the Modification Agreement, unconditionally
remains a lien or charge on the Property prior and superior to the lien or charge of each of the Junior Loan
Documents, respectively. Junior Lienholder reaffirms that the terms of that certain Subordination Agreement
dated March 1, 2016 and recorded March 16, 2016 as Instrument No. 2016000109375 in the Official Records,
executed by and among Junior Lienholder, Bank and Borrower (the "IIG Subordination"), as amended by the
Modification Agreement, are in full force and effect with respect to the Loan, Deed of Trust and Loan
Documents, as amended to date, which Loan, Deed of Trust and Loan Documents are being assigned to
CCRC concurrently herewith pursuant to the terms of the Loan Purchase Agreement.
Agreed and Acknowledged:
Dated as of: October , 2018 "JUNIOR LIENHOLDER"
DEPARTMENT OF HOUSING AND COMMUNITY
DEVELOPMENT, a public agency of the State of
California
M
@ pro T.3
Its:
Consent to Modification Agreement
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