Exhibit 10.1

 

WHEN RECORDED RETURN TO:

 

THOMPSON & KNIGHT LLP
ONE ARTS PLAZA

1722 ROUTH STREET, SUITE 1500

DALLAS, TEXAS 75201-4533
ATTENTION: ADAM B. HILL

 

MODIFICATION AGREEMENT

 

This MODIFICATION AGREEMENT (this “Agreement”) dated effective as of June 7,
2016, by and among (i) BR T&C BLVD., LLC, a Delaware limited liability company
(“Borrower”), (ii) CFP RESIDENTIAL, L.P., a Texas limited partnership, MAPLE
RESIDENTIAL, L.P., a Delaware limited partnership, CFH MAPLE RESIDENTIAL
INVESTOR, L.P., a Texas limited partnership, VF RESIDENTIAL, LTD., a Texas
limited partnership, and VF MULTIFAMILY HOLDINGS, LTD., a Texas limited
partnership (each individually “Guarantor” and collectively, “Guarantors”)
(Borrower and Guarantors herein sometimes called “Borrower Parties” or “Borrower
Party”, as the context may require), (iii) COMPASS BANK, an Alabama banking
corporation (“Compass”), as agent for the Lenders (as such term is defined in
the hereinafter described Loan Agreement) under the Loan Agreement (in such
capacity, “Administrative Agent”), and as a Lender and (iv) GREEN BANK, N.A., a
national banking association (“Green”), as a Lender;

 

WITNESSETH:

 

WHEREAS, the following documents have previously been executed and delivered by
Borrower Parties to Administrative Agent and/or Lenders relating to a loan (the
“Original Loan”) from Lenders to Borrower in the original principal amount of
$57,000,000.00, each dated July 1, 2014:

 

A.           Construction Loan Agreement (the “Loan Agreement”);

 

B.           Promissory Note (the “Compass Note”) in the stated principal sum of
$37,000,000.00 payable to the order of Compass;

 

C.           Promissory Note (the “Patriot Note”; and together with the Compass
Note, collectively referred to as the “Notes”) in the stated principal sum of
$20,000,000.00 payable to the order of Patriot Bank, a Texas banking association
(“Patriot”);

 

D.           Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Fixture Filing (the “Security Instrument”) covering certain real property
and personal property described therein (collectively, the “Property”), recorded
as Document Number 20140287792 in the Real Property Records of Harris County,
Texas;

 

E.           Environmental Indemnity Agreement made by Borrower for the benefit
of Administrative Agent and each Lender;

 

 

 

 

F.           Guaranty made by Guarantors for the benefit of Administrative Agent
and each Lender (the “Guaranty”); and

 

G.           Assignment and Subordination of Development Agreement;

 

the instruments described above and all other instruments executed by Borrower
or Guarantor and evidencing or securing the Original Loan, being herein
collectively called the “Loan Documents”;

 

WHEREAS, Borrower has requested that Administrative Agent and the Lenders agree
to certain modifications of the Loan Documents, and Administrative Agent and the
Lenders are willing to do so on the terms and conditions hereinafter set forth;

 

WHEREAS, Compass is the owner and holder of the Compass Note, Green, as
successor-in-interest to Patriot, is the owner and holder of the Patriot Note,
and Borrower is the owner of the Property;

 

NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

 

1.          Defined Terms. Capitalized terms not otherwise defined herein shall
have the same definitions as set forth in the Loan Agreement. This Agreement
constitutes a “Loan Document” as such term is defined in the Loan Agreement.

 

2.          Loan Decrease. Effective as of the date hereof, the total committed
amount of the Original Loan is decreased by $1,900,000 (the “Loan Decrease”) to
$55,100,000 (the “Loan”). In connection with the Loan Decrease, the amount of
the Compass Note is reduced to $35,766,666.67, and the amount of the Patriot
Note is reduced to $19,333,333.33. As of the date hereof, (i) the unpaid balance
of the Compass Note is $7,273,808.04, (ii) the unpaid balance of the Patriot
Note is $3,931,788.15, (iii) interest on the Original Loan has been paid up to
and including May 31, 2016, and (iv) following the Loan Decrease $43,894,403.81
remains available to be funded under the Loan in accordance with the terms of
the Loan Documents.

 

3.          Extension of Maturity Date. The term and maturity date of each of
the Notes is hereby extended to January 1, 2020. The liens, security interests,
assignments and other rights evidenced by the Security Instrument and other Loan
Documents are hereby renewed and extended to secure payment of the Notes as
extended hereby. The definition of “Initial Maturity Date” and all references to
the maturity of the Loan which appear in the Loan Documents shall hereafter
refer to January 1, 2020. Borrower shall have the right to extend the maturity
date of each of the Notes for a period of twelve (12) months to January 1, 2021
in accordance with the terms of the Loan Agreement (as modified by Section 1.7
of Schedule I attached this Agreement).

 

4.          Modifications of Other Loan Documents. Effective as of the date of
this Agreement, the Loan Documents are modified as set forth on Schedule I
attached hereto. When recorded, this Agreement will not contain Schedule I, but
all unrecorded copies of this Agreement will contain Schedule I. The
modifications set forth on Schedule I attached hereto, including, without
limitation, the change to the definition of “Applicable Margin,” shall not be
applied retroactively to the effective date of the Loan Agreement but instead
shall apply beginning on the date of this Agreement.

 

 

 

 

5.          Extension Fee. As consideration for the extension of the term and
maturity date of the Loan, contemporaneously with the execution and delivery of
this Agreement and as a condition to its effectiveness, Borrower hereby agrees
to pay to Administrative Agent, in immediately available funds, a loan extension
fee in the amount of $275,500.

 

6.          General Release by Borrower Parties. In consideration of, among
other things, Administrative Agent’s execution and delivery of this Agreement,
each Borrower Party hereby forever agrees and covenants not to sue or prosecute
against any Released Party (as hereinafter defined) and hereby forever waives,
releases and discharges, to the fullest extent permitted by law, each Released
Party from any and all claims (including, without limitation, cross claims,
counterclaims, rights of set-off and recoupment), actions, causes of action,
suits, debts, liabilities, obligations, damages and consequential damages,
demands, judgments, costs, expenses or claims whatsoever (collectively, the
“Claims”), that such Borrower Party now has or hereafter may have, of whatsoever
nature and kind, whether known or unknown, whether now existing or hereafter
arising, whether arising at law or in equity, against any or all of
Administrative Agent or Lenders (the “Lender Parties”) in any capacity and their
respective affiliates, subsidiaries, shareholders and “controlling persons”
(within the meaning of the federal securities laws), and their respective
successors and assigns and each and all of the officers, directors, employees,
agents, attorneys and other representatives of each of the foregoing
(individually a “Released Party” and collectively, the “Released Parties”),
based in whole or in part on facts, whether or not now known, existing on or
before the date hereof, that relate to, arise out of or otherwise are in
connection with: (a) any or all of the Loan Documents or transactions
contemplated thereby or any actions or omissions in connection therewith, or (b)
any aspect of the dealings or relationships between or among Borrower and the
other Borrower Parties, on the one hand, and any or all of the Lender Parties,
on the other hand, relating to any or all of the Loan Documents or transactions,
actions or omissions referenced in clause (a) hereof. In entering into this
Agreement, each Borrower Party consulted with, and has been represented by,
legal counsel and expressly disclaims any reliance on any representations, acts
or omissions by any of the Released Parties in making the releases set forth
above and hereby agrees and acknowledges that the validity and effectiveness of
the releases set forth above do not depend in any way on any such
representations, acts and/or omissions or the accuracy, completeness or validity
hereof. THE FOREGOING RELEASE INCLUDES ACTIONS AND CAUSES OF ACTION, JUDGMENTS,
EXECUTIONS, SUITS, DEBTS, CLAIMS, DEMANDS, LIABILITIES, OBLIGATIONS, DAMAGES AND
EXPENSES ARISING AS A RESULT OF THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OR FRAUD) OF ONE OR MORE OF THE RELEASED PARTIES. Nothing
contained in this Section 7 shall constitute a waiver by Borrower Parties of
their rights to enforce the terms of this Agreement and the Loan Documents
against Administrative Agent and Lenders. The provisions of this Section 6 shall
survive the termination of this Agreement, the other Loan Documents and payment
in full of the Obligations.

 

 

 

 

7.          Representations and Warranties of Borrower. To induce Administrative
Agent and the Lenders to execute and deliver this Agreement, Borrower represents
and warrants that (a) Borrower is the lawful owner of good and indefeasible
title to the Property; (b)  the Loan Documents to which Borrower is a party and
this Agreement constitute the legal, valid and binding obligations of Borrower
enforceable against Borrower in accordance with their terms, subject to
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and
other laws applicable to creditors’ rights or the collection of debtors’
obligations generally; (c) the execution and delivery of this Agreement by
Borrower do not contravene, result in a breach of or constitute a default under
any deed of trust, deed to secure debt, mortgage, loan agreement, indenture or
other contract, agreement or undertaking to which Borrower is a party or by
which Borrower or any of its properties may be bound (nor would such execution
and delivery constitute such a default with the passage of time or the giving of
notice or both) and do not violate or contravene any law, order, decree, rule or
regulation to which Borrower is subject; (d) to the best of Borrower’s knowledge
there exists no uncured default under the Loan Documents; (e) Borrower has no
offsets, claims or defenses under or otherwise with respect to the Loan
Documents; and (f) there have been no changes in direct or indirect ownership
interests in Borrower, and no amendments or modifications to the operating
agreements, partnership agreements, certificates of formation, articles of
organization or other governing agreement, as applicable, of Borrower,
Borrower’s members, or the partners or members of Borrower’s members since the
date of the closing of the Original Loan, in each case that would require the
consent of or notice to Administrative Agent under the Loan Documents, and
Borrower is currently duly organized and legally existing under the laws of its
state of organization and is qualified to do business in the state where the
Property is located. Borrower agrees to indemnify and hold Lender Parties
harmless against any loss, claim, damage, liability or expense (including
without limitation reasonable attorneys' fees actually incurred) incurred as a
result of any representation or warranty made by Borrower herein proving to be
untrue in any material respect.

 

8.          Representations of the Guarantors. To induce Administrative Agent
and the Lenders to execute and deliver this Agreement, each Guarantor represents
and warrants that (a)  the Loan Documents to which such Guarantor is a party and
this Agreement constitute the legal, valid and binding obligations of such
Guarantor enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and other laws
applicable to creditors’ rights or the collection of debtors’ obligations
generally; (b) the execution and delivery of this Agreement by such Guarantor do
not contravene, result in a breach of or constitute a default under any deed of
trust, deed to secure debt, mortgage, loan agreement, indenture or other
contract, agreement or undertaking to which such Guarantor is a party or by
which such Guarantor or any of its properties may be bound (nor would such
execution and delivery constitute such a default with the passage of time or the
giving of notice or both) and do not violate or contravene any law, order,
decree, rule or regulation to which such Guarantor is subject, in any such case,
to the extent such contravention, breach, default or violation would result in a
material adverse effect on such Guarantor’s ability to perform its obligations
under this Agreement or the Loan Documents as modified hereby; (c) to the best
of such Guarantor’s knowledge there exists no uncured default by such Guarantor
under the Loan Documents; (d) such Guarantor has no offsets, claims or defenses
under or otherwise with respect to the Loan Documents; and (e) there have been
no changes to the direct or indirect ownership interests in such Guarantor, and
no amendments or modifications to the partnership agreement, operating
agreement, bylaws, certificates of formation, articles of organization, articles
of incorporation or other governing agreement, as applicable, of such Guarantor
or its general partner since the date of the closing of the Original Loan, in
each case that would require the consent of or notice to Administrative Agent
under the Loan Documents, and such Guarantor is currently duly organized and
legally existing under the laws of its state of organization. Guarantors agree,
on a joint and several basis, to indemnify and hold Lender Parties harmless
against any loss, claim, damage, liability or expense (including without
limitation reasonable attorneys' fees actually incurred) incurred as a result of
any representation or warranty made by any Guarantor herein proving to be untrue
in any material respect.

 

 

 

 

9.          No Recourse Against Partners; Guarantors Liability.

 

(a)          The obligations of a Guarantor under this Agreement are collectible
only from the assets of such Guarantor, and in no event will any partner of a
Guarantor have any liability for the obligations of a Guarantor hereunder solely
as a result of such partners partnership interest in Guarantor. Notwithstanding
the foregoing, the limitations of this Section 9(a) shall not be deemed to (i)
limit any liability of any Guarantor under this Agreement or under the Guaranty
or any other guaranty or indemnity agreement now or hereafter executed in favor
of Administrative Agent and Lenders in connection with the Loan or (ii) limit
the liability of Borrower or any Guarantor in any way.

 

(b)          All liability of any Guarantor under this Agreement shall be joint
and several with all other Guarantors.

 

10.         Additional Documentation. Borrower Parties, upon request from
Administrative Agent, agree to execute such other and further documents as may
be reasonably necessary or appropriate to consummate the transactions
contemplated herein or to perfect the liens and security interests intended to
secure the payment of the Loan, provided that such other and further documents
do not materially increase the obligations, or dimish the rights, of any of the
Borrower Parties.

 

11.         Default. If (i) any representation by any Borrower Party contained
herein is false or misleading in any material respect when made or (ii) any
Borrower Party shall fail to keep or perform any of the covenants, warranties or
agreements contained herein and such failure continues for thirty (30) days
after receipt by Borrower and Guarantors of written notice and demand for the
performance of such covenant, agreement, warranty or condition (the “Grace
Period”); provided, however, that Administrative Agent shall extend the Grace
Period up to an additional thirty (30) days (for a total of sixty (60) days from
the date of default) if (i) the applicable Borrower Party immediately commences
and diligently pursues the cure of such default and delivers (within the Grace
Period) to Administrative Agent a written request for more time and (ii)
Administrative Agent determines in good faith that (1) such default cannot be
cured within the Grace Period but can be cured within sixty (60) days after the
default, (2) no Lien or security interest created by the Loan Documents will be
impaired prior to completion of such cure, and (3) Administrative Agent’s
immediate exercise of any remedies provided under the Loan Documents or by law
is not necessary for the protection or preservation of the Property or
Administrative Agent’s security interest, then, it shall be deemed an Event of
Default under the Loan Agreement and Administrative Agent and the Lenders shall
be entitled to exercise any and all of the rights and remedies granted pursuant
to the Loan Documents or to which they may otherwise be entitled, whether at law
or in equity.

 

12.         Recordation; Loan Title Policy. Contemporaneously herewith,
Administrative Agent will deliver this Agreement for recording in the
appropriate records of the county where the Property is located at Borrower’s
expense, and Borrower shall, at its sole cost and expense, obtain and deliver to
Administrative Agent an endorsement to the Loan Title Policy in form and
substance reasonably acceptable to Administrative Agent.

 

 

 

 

13.         Ratification of Loan Documents. Except as same are modified by this
Agreement, the terms and provisions of the Loan Documents shall remain unchanged
and shall remain in full force and effect. The Loan Documents, as modified and
amended hereby, are hereby ratified and confirmed in all respects. All liens,
security interests, mortgages and assignments granted or created by or existing
under the Loan Documents continue, unabated, in full force and effect, to secure
Borrower’s obligation to repay the Notes. All references in any of the Loan
Documents to a Loan Document shall hereafter refer to such Loan Document as
amended hereby.

 

14.         Integration. This Agreement supersedes and merges all prior and
contemporaneous promises, representations and agreements with respect to the
matters set forth herein. No term of this Agreement may be modified or amended,
nor may any rights hereunder be waived, except in a writing signed by the party
against whom enforcement of the modification, amendment, or waiver is sought.
Administrative Agent, the Lenders and Borrower Parties further agree that this
Agreement may not in any way be explained or supplemented by a prior, existing
or future course of dealings between the parties or by any prior, existing, or
future performance between the parties pursuant to this Agreement or otherwise.

 

15.         Costs and Expenses. Contemporaneously with the execution and
delivery of this Agreement, Borrower shall pay, or cause to be paid, all costs
and expenses incident to the preparation hereof and the consummation of the
transactions specified herein, including, without limitation, Loan Title Policy
endorsement charges, recording fees and fees and expenses of legal counsel to
Administrative Agent and/or the Lenders.

 

16.         Severability. If any covenant, condition, or provision herein
contained is held to be invalid by final judgment of any court of competent
jurisdiction, the invalidity of such covenant, condition, or provision shall not
in any way affect any other covenant, condition or provision herein contained.

 

17.         Time of the Essence. It is expressly agreed by the parties hereto
that time is of the essence with respect to this Agreement.

 

18.         Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all parties hereto had signed the same
document. All such counterparts shall be construed together and shall constitute
one instrument, but in making proof hereof it shall only be necessary to produce
one such counterpart.

 

19.         Successors and Assigns. The terms and provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and to their
respective successors and assigns permitted under the Loan Documents.

 

20.         Recitals. The above recitals are incorporated herein and agreed as
accurate.

 

21.         APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING
EFFECT TO TEXAS’ PRINCIPLES OF CONFLICTS OF LAW) AND THE LAW OF THE UNITED
STATES APPLICABLE TO TRANSACTIONS IN THE STATE OF TEXAS.

 

 

 

 

22.         Notice of Final Agreement. Borrower Parties, Administrative Agent
and the Lenders hereby take notice of and agree to the following:

 

(a)          PURSUANT TO SUBSECTION 26.02(b) OF THE TEXAS BUSINESS AND COMMERCE
CODE, A LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED THEREIN EXCEEDS $50,000 IN
VALUE IS NOT ENFORCEABLE UNLESS THE AGREEMENT IS IN WRITING AND SIGNED BY THE
PARTY TO BE BOUND OR BY THAT PARTY'S AUTHORIZED REPRESENTATIVE.

 

(b)          PURSUANT TO SUBSECTION 26.02(c) OF THE TEXAS BUSINESS AND COMMERCE
CODE, THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO THE LOAN DOCUMENTS SHALL BE
DETERMINED SOLELY FROM THE LOAN DOCUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN
THE PARTIES ARE SUPERSEDED BY AND MERGED INTO THE LOAN DOCUMENTS.

 

(c)          THE LOAN DOCUMENTS AND THIS AGREEMENT REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES THERETO. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

IN WITNESS WHEREOF, Borrower Parties, Administrative Agent and the Lenders have
executed this Agreement on the respective dates of acknowledgement to be
effective as of the date first above written.

 

REMAINDER OF PAGE INTENTIONALLY BLANK

SIGNATURE PAGES FOLLOW

 

 

 

 

SIGNATURE PAGE OF BORROWER TO
MODIFICATION AGREEMENT

 

BRT&C Blvd., LLC, a Delaware limited liability company

 

By:HCH 106 Town and Country, L.P., a Delaware limited partnership, a manager

 

By:Maple Multi-Family Development, L.L.C., a Texas limited liability company,
its general partner

 

  By: /s/ Sean D. Rae   Name: Sean D. Rae   Title: Vice President

 

THE STATE OF TEXAS )   ) COUNTY OF DALLAS )

 

This instrument was acknowledged before me on     May
26                          , 2016, by Sean D. Rae       , in his/her capacity
as Vice President       on behalf of Maple Multi-Family Development, L.L.C., a
Texas limited liability company, in its capacity as general partner on behalf of
HCH 106 Town and Country, L.P., a Delaware limited partnership, in its capacity
as a manager on behalf of BR T&C Blvd., LLC, a Delaware limited liability
company.

 

LEE ANN SHAMBLIN   /s/ Lee Ann Shamblin Notary ID # 5724248   Notary Public,
State of Texas My Commission Expires     February 20, 2018   Lee Ann Shamblin  
(printed name)

 

My commission expires:

 

02-20-2018    .

 

 

 

 

SIGNATURE PAGE OF GUARANTOR TO

MODIFICATION AGREEMENT

 

MAPLE RESIDENTIAL, L.P., a Delaware limited partnership

 

By:Maple Residential GP, L.L.C., a Delaware limited liability company, its
general partner

 

  By: /s/ Sean D. Rae     Name: Sean D. Rae     Title: Vice President

 

STATE OF TEXAS §   § COUNTY OF DALLAS §

 

This instrument was acknowledged before me on the 26th     day of May , 2016, by
Sean D. Rae     , as    Vice President          of Maple Residential GP, L.L.C.,
a Delaware limited liability company, on behalf of said limited liability
company, in its capacity as the general partner of Maple Residential, L.P., a
Delaware limited partnership, on behalf of said limited partnership.

 

LEE ANN SHAMBLIN   /s/ Lee Ann Shamblin Notary ID # 5724248   Notary Public,
State of Texas My Commission Expires     February 20, 2018   Lee Ann Shamblin  
  (printed name)

 

My commission expires:

 

02-20-2018  .

 

 

 

 

SIGNATURE PAGE OF GUARANTOR TO

MODIFICATION AGREEMENT

 

CFP RESIDENTIAL, L.P., a Texas limited partnership

 

By:Crow Family, Inc., a Texas corporation, its general partner

 

  By: /s/ M. Kevin Bryant     Name: M. Kevin Bryant   Title: Vice President

 

STATE OF TEXAS §   § COUNTY OF DALLAS §

 

This instrument was acknowledged before me on the 27th     day of May      ,
2016, by M. Kevin Bryant      , as Vice President of Crow Family Inc., a Texas
corporation, on behalf of said corporation in its capacity as the general
partner of CFP Residential, L.P., a Texas limited partnership, on behalf of said
limited partnership.

 

LEE ANN SHAMBLIN   /s/ Lee Ann Shamblin Notary ID # 5724248   Notary Public,
State of Texas My Commission Expires     February 20, 2018   Lee Ann Shamblin  
  (printed name)

 

My commission expires:

 

02-20-2018   .

 

 

 

 

SIGNATURE PAGE OF GUARANTOR TO

MODIFICATION AGREEMENT

 

CFH MAPLE RESIDENTIAL INVESTOR, L.P., a Texas limited partnership

 

By:CH Residential GP, L.L.C., a Texas limited liability company, its general
partner

 

  By: /s/ M. Kevin Bryant       Name: M. Kevin Bryant     Title: Vice President

 

STATE OF TEXAS §   § COUNTY OF DALLAS §

 

This instrument was acknowledged before me on the 27th     day of May      ,
2016, by M. Kevin Bryant    , as Vice President of CH Residential GP, L.L.C., a
Texas limited liability company, on behalf of said limited liability company, in
its capacity as the general partner of CFH Maple Residential Investor, L.P., a
Texas limited partnership, on behalf of said limited partnership.

 

LEE ANN SHAMBLIN   /s/ Lee Ann Shamblin Notary ID # 5724248   Notary Public,
State of Texas My Commission Expires     February 20, 2018   Lee Ann Shamblin  
  (printed name)

My commission expires:

 

02-20-2018    .

 

 

 

 

SIGNATURE PAGE OF GUARANTOR TO

MODIFICATION AGREEMENT

 

VF RESIDENTIAL, LTD., a Texas limited partnership

 

By:VFTCR GP, LLC, a Texas limited liability company, its general partner

 

  By: /s/ Clifford A. Breining     Clifford A. Breining, Vice President

 

STATE OF California            §   § COUNTY OF Riverside         §

 

This instrument was acknowledged before me on the 26th     day of May   , 2016,
by Clifford A. Breining, as Vice President of VFTCR GP, LLC, a Texas limited
liability company, on behalf of said limited liability company, in its capacity
as the general partner of VF Residential, Ltd., a Texas limited partnership, on
behalf of said limited partnership.

 

A. PALLESCHI   /s/ Ariel Palleschi COMM. # 2024228   Notary Public, State of
California               NOTARY PUBLIC • CALIFORNIA   Ariel Palleschi RIVERSIDE
COUNTY   Printed/Typed Name of Notary Commission Expires MAY 11, 2017    

 

My Commission Expires:

 

May 11th 2017 .

 

 

 

 

SIGNATURE PAGE OF GUARANTOR TO

MODIFICATION AGREEMENT

 

VFMULTIFAMILY HOLDINGS, LTD., a Texas limited partnership

 

By:VFTCR GP, LLC, a Texas limited liability company, its general partner

 

  By: /s/ Clifford A. Breining     Clifford A. Breining, Vice President

 

STATE OF California            §   § COUNTY OF Riverside         §

 

This instrument was acknowledged before me on the 26th      day of May     ,
2016, by Clifford A. Breining, as Vice President of VFTCR GP, LLC, a Texas
limited liability company, on behalf of said limited liability company, in its
capacity as the general partner of VF Multifamily Holdings, Ltd., a Texas
limited partnership, on behalf of said limited partnership.

 

A. PALLESCHI   /s/ Ariel Palleschi COMM. # 2024228   Notary Public, State of
California                 NOTARY PUBLIC • CALIFORNIA   Ariel Palleschi
RIVERSIDE COUNTY   Printed/Typed Name of Notary Commission Expires MAY 11, 2017
   

 

My Commission Expires:

 

May 11th 2017 .

 

 

 

 

SIGNATURE PAGE OF ADMINISTRATIVE AGENT AND LENDER TO
MODIFICATION AGREEMENT

 

COMPASSBANK, an Alabama banking corporation

 

  By: /s/ Curtis R. Burchard     Name: Curtis R. Burchard     Title: EVP

 

STATE OF TEXAS §   § COUNTY OF HARRIS §

 

This instrument was acknowledged before me on     May 31    , 2016, by Curtis R.
Burchard,    EVP                      of Compass Bank, an Alabama banking
corporation, on behalf of said corporation.

 

  /s/ Dolores Serrano   Notary Public, State of Texas My Commission expires:
Dolores Serrano   [Printed name]     May 23, 2018     

 

DOLORES SERRANO   Notary Public   STATE OF TEXAS   My Comm. Exp. May 23, 2018  

 

 

 

 

SIGNATURE PAGE OF LENDER TO
MODIFICATION AGREEMENT

 

GREEN BANK, N.A., a national banking association

 

  By: /s/ Rhonda L. Sands   Name: Rhonda L. Sands   Title: Senior Vice President

 

STATE OF Texas             §   § COUNTY OF Harris          §

 

This instrument was acknowledged before me on      June 6th     , 2016, by
Rhonda L. Sands,      Senior Vice President       of Green Bank, N.A., a
national banking association, on behalf of said national banking association.

 

    /s/ Glenda Chavez     Notary Public, State of Texas My Commission expires:  
Glenda Chavez     [Printed name]   5-8-2019    

 

  GLENDA CHAVEZ   Notary Public, State of Texas   Comm. Expires 05-08-2019  
Notary ID # 587224-6

 

 

 

  

SCHEDULE I

 

INTENTIONALLY OMITTED FOR RECORDING PURPOSES 

 

MODIFICATION AGREEMENT – Schedule I, Page 1

 

  

SCHEDULE I

 

MODIFICATION OF LOAN DOCUMENTS

 

1.        Modification of Loan Agreement. The Loan Agreement is hereby modified
as follows:

 

1.1.          Substitution of Project Budget. The Project Budget attached to the
Loan Agreement as Exhibit B thereto is hereby deleted in its entirety and the
Project Budget attached hereto as Exhibit B-1 is substituted therefor. To the
extent of any discrepancy in figures contained in the Project Budget attached to
the Loan Documents prior to amendment by this Agreement and the figures
contained in the Project Budget attached hereto, the Project Budget attached
hereto shall govern and control.

 

1.2.          Pro Rata Shares. Schedule 1.1 of the Loan Agreement is hereby
deleted in its entirety and Schedule 1.1-1 attached hereto is substituted
therefor.

 

1.3.          Modification of Defined Terms. The definitions of the following
defined terms are hereby amended and restated in their entirety to read as
follows:

 

a.            “Aggregate Commitment” means, as of any date of determination, the
aggregate of the Commitments of all the Lenders, as such amount may have been
reduced pursuant to Section 2.7 hereof, less the sum of all principal payments
made by Borrower, if any. As of the date of the First Modification, the
Aggregate Commitment is Fifty-Five Million One Hundred Thousand and No/100
Dollars ($55,100,000.00).

 

b.           “Applicable Margin” means (i) with respect to the Base Rate,
one-half of one percent (.5%) and (ii) with respect to the LIBOR Based Rate,
three percent (3.00%).

 

c.           “Borrower’s Equity” means, collectively, the Initial Borrower’s
Equity and the Additional Borrower’s Equity.

 

d.           “Completion Date” means December 31, 2017 (it being agreed that
Borrower will have no right to extend the Completion Date for any reason,
including, without limitation, extension for Force Majeure Events).

 

e.            “Determination Date” means, for the purposes of determining
whether Borrower satisfies the conditions to the Extension Period, the last day
of the most recent calendar month ending at least thirty (30) days prior to the
commencement of the Extension Period.

 

f.            “Extension Period” means a period of twelve (12) months,
commencing on the first day after the Initial Maturity Date and ending on the
Extended Maturity Date.

 

MODIFICATION AGREEMENT – Schedule I, Page 2

 

  

g.           “Loan Amount” means Fifty-Five Million One Hundred Thousand and
No/100 Dollars ($55,100,000.00).

 

h.           “Maturity Date” means the Initial Maturity Date, as may be extended
to the Extended Maturity Date pursuant to the Extension Period, on the terms and
conditions set forth in Section 2.7 hereof, subject, however, to the right of
acceleration as herein provided and as provided elsewhere in the Loan Documents.

 

1.4.       Additional Defined Terms. The following defined terms are hereby
added to Section 1.1 of the Loan Agreement:

 

a.           “Actual Debt Service” means the amount of principal and/or interest
payments due pursuant to the Loan Documents during the applicable test period.

 

b.           “Additional Borrower’s Equity” means funds in the amount of
$2,200,500 obtained by Borrower from either (i) equity contributions or (ii)
other sources approved by Administrative Agent, and in both cases which are to
be applied to the payment of Project Costs.

 

c.           “Distribution Criteria” means each of the following: (i) the final
certificates of occupancy have been issued by the appropriate Governmental
Authority for all of the Improvements, (ii) no further Advances can be requested
by Borrower for the payment of interest on the Loans, (iii) the Loan Documents
require Borrower to make principal payments on the Loans within the initial term
of the Loans or during an extension period, and (iv) Borrower shall have
contributed to the Property cash equity of at least $14,811,480 prior to the
date any Advance was made (recognizing that the inclusion of this dollar figure
is not intended to modify in any respect the requirement that Borrower
contribute the Borrower’s Equity, in full, to the Property prior to the date the
Lenders make any Advance).

 

d.           “Distribution Debt Service Coverage Ratio” means a ratio, as
reasonably determined by Administrative Agent, the numerator of which is the
Distribution Net Operating Income for the most-recently completed calendar
quarter annualized, and the denominator of which is Distribution Debt Service,
calculated as of the date of determination.

 

e.           “Distribution Debt Service” means the greater of (i) the Debt
Service on the date of determination, multiplied by four (4) or (ii) the Actual
Debt Service for the most-recent calendar month, multiplied by twelve (12).

 

MODIFICATION AGREEMENT – Schedule I, Page 3

 

  

f.            “Distribution Net Operating Income” means the annualized gross
income received by Borrower from the operation of the Property for the period in
question, less expenses incurred and/or paid by Borrower in connection with the
operation and maintenance of the Property that are allocable to such period,
computed on an accrual basis without regard to depreciation, amortization, value
adjustments such as “mark to market” reduction in value of assets or debt
service on the Loans, but otherwise in accordance with generally accepted
accounting principles consistently applied. Included within the expenses shall
be (1) a management fee equal to the greater of (a) the actual management fee or
(b) three percent (3.0%), (2) annual capital expenditures equal to the greater
of (a) actual capital expenditures or (b) $200 per unit per annum, and (c)
prorated ad valorem taxes and insurance premiums. Only actual income received
shall be included in such calculations and no credit will be given for free rent
periods. Documentation of Distribution Net Operating Income shall be certified
by Borrower with detail reasonably satisfactory to Administrative Agent and
shall be subject to the reasonable approval of Administrative Agent.

 

g.           “Excess Cash Flow” means, for any period, the Distribution Net
Operating Income for such period, less Actual Debt Service for such period .

 

h.           “Extended Maturity Date” means January 1, 2021.

 

i.            “First Modification” means that certain Modification Agreement
dated as of June 7, 2016, by and among, Borrower, Guarantors, Administrative
Agent and the Lenders.

 

j.            “Initial Borrower’s Equity” means funds in the amount of
$24,800,000 obtained by Borrower from either (i) equity contributions or (ii)
other sources approved by Administrative Agent, and in both cases which are to
be applied to the payment of Project Costs. Administrative Agent acknowledges
the Initial Borrower Equity has been fully funded by Borrower.

 

1.5.      Deletion of Defined Terms. The following defined terms are hereby
deleted in their entirety:

 

a.           First Extended Maturity Date

 

b.           First Extension Period

 

c.           Second Extended Maturity Date

 

d.           Second Extension Period

 

1.6.      Payments. Sections 2.5(a)(ii) and (iii) are amended and restated in
their entirety to read as follows:

 

(ii)         In the event the Extension Period is exercised and the Maturity
Date is extended to the Extended Maturity Date pursuant to the terms hereof,
then commencing on the first Payment Date thereafter and continuing on each
Payment Date thereunder until the earlier of the date the Indebtedness is repaid
in full or the Extended Maturity Date, Borrower shall pay the Monthly Principal
Installment Amount, which Monthly Principal Installment Amount is in addition to
accrued interest due on each such date.

 

MODIFICATION AGREEMENT – Schedule I, Page 4

 

  

(iii)        The outstanding Principal Amount and any and all accrued but unpaid
interest thereon shall be due and payable in full on the Initial Maturity Date,
as may be extended by the Extension Period in accordance with the terms of this
Agreement, or upon the earlier maturity of the Loans, whether by acceleration or
otherwise.

 

1.7.      Further Extension of Maturity Date. Section 2.7 is amended and
restated in its entirety to read as follows:

 

2.7           Extension Periods. Borrower shall have the right and option to
extend the Maturity Date to a date ending upon the expiration of the Extension
Period; provided, however, any such extension shall be granted and be effective
only if all of the following conditions have been satisfied:

 

(a)          Borrower shall have notified Administrative Agent in writing of its
exercise of such extension at least forty-five (45) days but not more than
ninety (90) days prior to the Maturity Date;

 

(b)          on the date of such written notice and on the date of commencement
of the Extension Period, there shall exist no Event of Default and
Administrative Agent shall not have sent written notice of the occurrence of an
event which, with the passage of time or the giving of notice or both, would
constitute an Event of Default, and which has not been cured;

 

(c)          the written notice given pursuant to clause (a) above shall be
accompanied by a fee in the amount equal to one-fourth of one percent (0.25%) of
the Principal Amount outstanding on the date of the extension of the Maturity
Date;

 

(d)          the Completion Event shall have occurred;

 

(e)          Administrative Agent shall have received evidence reasonably
satisfactory to Administrative Agent that the Property has achieved a Debt
Coverage Ratio of not less than 1.20:1.0 as of the Determination Date
immediately preceding the Initial Maturity Date; provided, however, Borrower may
prepay any portion of the Principal Amount on or before the Initial Maturity
Date to the extent necessary to achieve the required Debt Coverage Ratio;

 

MODIFICATION AGREEMENT – Schedule I, Page 5

 

  

(f)          Administrative Agent shall have received a current or updated
Appraisal of the Property, paid for at Borrower’s expense, and in form and
substance reasonably acceptable to Administrative Agent, confirming that the
Loan-to-Value Ratio does not exceed sixty-five percent (65%); provided, however,
Borrower may prepay any portion of the Principal Amount on or before the Initial
Maturity Date to the extent necessary to achieve the required Loan-to-Value
Ratio; and

 

(g)          at or before the commencement of the Extension Period, Borrower and
Guarantors shall have executed such documents as Administrative Agent reasonably
deems appropriate to evidence such extension and shall have delivered to
Administrative Agent an endorsement to the Loan Title Policy pursuant to the
applicable title insurance regulations and in form and substance satisfactory to
Administrative Agent.

 

Effective as of the commencement of the Extension Period, the Aggregate
Commitment will be reduced by the amount of any unfunded proceeds of the Loans,
and the Loans will be deemed fully funded.

 

1.8.      Completion of Construction.

 

a.           The second sentence of Section 4.3(c) is amended to delete “,
subject to extension for Force Majeure Events not to exceed sixty (60) days in
the aggregate,” such that such second sentence reads:

 

Borrower shall commence construction of the Improvements (including demolition
of any existing improvements) no later than one hundred twenty (120) days from
the date of this Agreement (subject to extension for Force Majeure Events as
hereinafter provided) and Borrower shall diligently pursue said construction to
the Completion Event, and shall supply such moneys required in excess of the
Loan Amount and Borrower’s Equity and perform such duties as may be necessary to
complete the construction of the Improvements in substantial accordance with the
Plans and Specifications and all Requirements, and achieve the Completion Event,
all of which shall be accomplished on or before the Completion Date.

 

b.           Section 6.5(c) is amended to delete “(subject to extension for
Force Majeure Events as provided herein),” such that Section 6.5(c) reads:

 

MODIFICATION AGREEMENT – Schedule I, Page 6

 

  

(c)          If Administrative Agent, in its reasonable discretion, and after
the review of and discussion with the Inspecting Architect and Borrower,
determines in good faith that the Improvements cannot feasibly be constructed in
substantial accordance with the Loan Documents on or before the Completion Date;
or

 

c.           Section 7.1(ee) is amended to delete “(subject to extension for
Force Majeure Events to the extent permitted in this Agreement),” such that
Section 7.1(ee) reads:

 

(ee)         Completion Event - the Completion Event does not occur before the
Completion Date; or

 

1.9.      Additional Borrower’s Equity. Section 6.3(c) is amended and restated
in its entirety to read as follows:

 

(c)          Borrower’s Equity. Except for the Initial Advance, Borrower shall
have applied the Initial Borrower’s Equity to pay certain Project Costs included
in the Project Budget approved by Administrative Agent, and Borrower shall have
furnished Administrative Agent with a schedule showing the payment of such funds
for Project Costs and evidence of such payment. For all Advances after the date
of the First Modification, Borrower shall have applied the Additional Borrower’s
Equity to pay certain Project Costs included in the Project Budget approved by
Administrative Agent, and Borrower shall have furnished Administrative Agent
with a schedule showing the payment of such funds for Project Costs and evidence
of such payment.

 

1.10.    Limitations on Distributions. The following is hereby added to the Loan
Agreement as Section 4.1(gg):

 

(gg)         Limitation on Distributions. Notwithstanding anything to the
contrary contained in the Loan Documents, Borrower shall not make any
distributions of cash or property to its members or otherwise on account of the
equity interests in Borrower, whether or not such distribution is permitted or
required under the terms of the organizational documents of Borrower, including,
without limitation, the repayment of any loans made by any member of Borrower to
Borrower, the return of capital contributions, or distributions upon
termination, liquidation or dissolution of Borrower. Notwithstanding the
foregoing, Borrower may make distributions of Excess Cash Flow upon satisfaction
of all of the following requirements:

 

MODIFICATION AGREEMENT – Schedule I, Page 7

 

  

(a)          There shall exist no Event of Default and Administrative Agent
shall not have sent written notice of the occurrence of an event which, with the
passage of time or the giving of notice or both, would constitute an Event of
Default, and which has not been cured.

 

(b)          The Completion Event shall have occurred.

 

(c)          Borrower shall have waived the right to request any further
disbursement of unfunded proceeds of the Loans allocated for payment of Actual
Debt Service for the remainder of the term of the Loans and Lenders shall no
longer be obligated to make further Advances, including, without limitation,
Advances from the Interest Reserve Amount.

 

(d)          Lender shall have received satisfactory evidence that the Property
has achieved a Distribution Debt Service Coverage Ratio (calculated on a
trailing three (3) calendar month basis) of at least 1.0:1.0 for a minimum of
two (2) consecutive calendar quarters.

 

(e)          In order to establish that the Loans are not a so-called “High
Volatility Commercial Real Estate” loans, the Distribution Criteria shall have
been met.

 

(f)          The total of all distributions made by Borrower for any calendar
year shall not exceed Excess Cash Flow for such year.

 

The foregoing provisions shall not impose any limitation on the ability of the
members of Borrower, or of such members’ respective members, partners, or other
equity interest owners (direct and indirect) (including, but not limited to BR
T&C BLVD JV MEMBER, LLC and its constituent members), to make distributions of
cash or property (or make other payments) as contemplated by their respective
operating agreements, partnership agreements, bylaws or other organizational
documents.

 

2.          Modification of Guaranty. The Guaranty is hereby modified as
follows:

 

2.1.          Guaranteed Obligations. The definition of “Guaranteed Obligations”
is amended and restated in its entirety to read as follows:

 

“Guaranteed Obligations” means (i) the Principal Obligation; (ii) all Interest;
(iii) all Completion Obligations until the Completion Event occurs, after which
the Completion Obligations will not be included in the Guaranteed Obligations
and Guarantor will have no further liability under this clause (iii); (iv) all
Recourse Amounts; and (v) all Enforcement Costs.

 

2.2.          Principal Obligations. The definition of “Principal Obligations”
is amended and restated in its entirety to read as follows:

 

MODIFICATION AGREEMENT – Schedule I, Page 8

 

  

“Principal Obligation” means a portion of the Principal Amount of the Loan as
follows:

 

(i)          Fifty percent (50%) of the Principal Amount, from and after the
date of this Guaranty until the First Step-Down Date (defined below).

 

(ii)         Twenty-five percent (25%) of the Principal Amount from and after
the First Step-Down Date.

 

“First Step-Down Date” means the first date on which all of the following are
satisfied: (A) the Completion Event has occurred, (B) Agent receives evidence
reasonably satisfactory to Agent that the Property has achieved a Debt Coverage
Ratio of 1.0:1.0 for three (3) consecutive calendar months (using a minimum
vacancy factor equal to the greater of (1) the actual vacancy rate or (2) 15%,
in determining Net Operating Income for purposes of calculating the Debt
Coverage Ratio for the purposes of the First Step-Down Date only), and (C) no
continuing Event of Default then exists.

 

2.3.          Second Step-Down Date. The defined term “Second Step-Down Date” is
deleted in its entirety.

 

2.4.          Loans. As used in the Guaranty, the term “Loan” means the “Loans”
and/or any “Loan” as such term is defined in the Loan Agreement.

 

MODIFICATION AGREEMENT – Schedule I, Page 9

 

  

SCHEDULE 1.1-1

 

LENDERS

 

Lender 

  Commitment   Pro Rata Share  Green Bank, N.A.  $19,333,333.33    35.087719298%
Compass Bank  $35,766,666.67    64.912280702% Total  $55,100,000.00    100%

 

MODIFICATION AGREEMENT – Schedule 1.1-1, Page 1

 

  

EXHIBIT B-1

 

Project Budget

 

 [tex10-1pg26.jpg]

 

MODIFICATION AGREEMENT – Exhibit B-1, Page 1