Exhibit 99.1
FORBEARANCE AGREEMENT
(Revolving Credit)
This FORBEARANCE AGREEMENT
(Revolving Credit) (this “ Agreement ”) is made
and entered into as of this 1 st day of October, 2009 (the “
Effective Date ”), by and among CALIFORNIA COASTAL
COMMUNITIES, INC. , Delaware corporation (the “
Borrower ”), the undersigned guarantors (collectively,
the “ Guarantors ”), and KEYBANK NATIONAL
ASSOCIATION , a national banking association, as Agent (the
“ Agent ”) for the financial institutions which
are or may become lender parties to the Loan Agreement (each
individually a “ Lender ” and collectively the
“ Lenders ”). All capitalized terms not
otherwise defined in this Agreement shall have the meanings
specified in the Loan Agreement described below. The Borrower
and the Guarantors are hereafter sometimes referred to individually
as a “ Borrower Party ”, and together as the
“ Borrower Parties ”.
RECITALS OF FACT:
A.
The Borrower is indebted to the
Lenders under the Senior Secured Revolving Credit Agreement, dated
as of September 15, 2006, among the Borrower, the Guarantors,
the Agent and the Lenders (as the same may have been or may
hereafter be modified, amended, restated, supplemented, renewed or
replaced from time to time, the “ Loan Agreement
”). The credit facility evidenced by the Loan Agreement
(the “ Loan ”) is further evidenced by
(i) a Promissory Note, dated as of October 6, 2006, made
by the Borrower to KeyBank in the stated principal amount of
$19,440,000, (ii) a Promissory Note, dated as of
September 15, 2006, made by the Borrower to Comerica Bank in
the stated principal amount of $18,000,000, (iii) a Promissory
Note, dated September 15, 2006, made by the Borrower to
Franklin Bank, SSB in the stated principal amount of $12,000,000,
(iv) a Promissory Note, dated September 15, 2006, made by
the Borrower to Guaranty Bank in the stated principal amount of
$15,560,000, (v) a Promissory Note, dated September 29,
2006, made by the Borrower to LaSalle Bank National Association in
the stated principal amount of $10,000,000, (vi) a Promissory
Note, dated September 15, 2006, made by the Borrower to United
Overseas Bank Limited in the stated principal amount of $5,000,000,
(vii) a Promissory Note, dated September 15, 2006, made
by the Borrower to Wachovia Bank, National Association in the
stated principal amount of $20,000,000 (as the same may have been
or may hereafter be modified, amended, restated, supplemented,
renewed or replaced from time to time, collectively, the “
Notes ”).
B.
The Loan is secured by, among other
security, (i) the Deed of Trust with Assignment of Rents,
Security Agreement and Fixture Filing, by Signal Landmark, a
California corporation (“ Signal Landmark ”) for
the benefit of Agent, recorded in the Official Records of Orange
County, California as Instrument No. 2006000617267 (as
modified, amended, restated, supplemented, renewed or replaced from
time to time, the “ First Deed of Trust ”),
granting the Agent a perfected first priority security interest in
the property described therein (the “ Property
”), (ii) the Collateral Assignment of Contracts,
Development Rights, Licenses, Permits, Warranties and Guaranties
and Subordination Agreement, dated as of September 15, 2006,
by and among Borrower, Signal Landmark and Agent (as modified,
amended, restated, supplemented, renewed or replaced from time to
time, the “ Collateral Assignment ”), and
(iii) certain other collateral assignments or security
agreements for the benefit of the Agents
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and/or Lenders, including, without limitation,
UCC-1 financing statements executed and delivered in connection
with the Loan.
C.
The Guarantors have executed and
delivered to Agent, as agent for the Lenders, the Unconditional
Guaranty, dated as of September 15, 2006 (as the same may have
been or may hereafter be modified, amended, restated, supplemented,
renewed or replaced from time to time, the “ Payment
Guaranty ”), made by the Guarantors for the benefit of
Agent and the Lenders with respect to the Loan and certain other
obligations of the Borrower. The Loan Agreement, the Notes,
the Deed of Trust, the Collateral Assignment, the Payment Guaranty,
and all other Loan Documents (as defined in the Loan Agreement), as
the same may have been or may hereafter be modified, amended,
restated, supplemented, renewed or replaced from time to time, are
referred to herein, collectively, as the “ Loan
Documents .”
D.
Certain Events of Default have
occurred under the Loan Agreement and the other Loan Documents, as
described on Exhibit “A ” attached hereto
(collectively, the “ Stated Defaults
”).
I.
The Borrower and the Guarantors have
requested that Agent and Lenders forbear for a limited period of
time (designated as the “Forbearance Period” in
Section 4 ) from exercising certain rights and remedies
provided to Agent and the Lenders under the Loan Documents and
otherwise available at law or in equity as a result of the
occurrence of the Stated Defaults, which remedies include but are
not limited to publishing a notice of default under the Deed of
Trust. Subject to the terms and conditions contained herein,
the Agent and Lenders are prepared to forbear from the exercise of
their respective rights and remedies, but only during the
Forbearance Period, except as otherwise expressly provided
herein.
NOW, THEREFORE, FOR AND IN
CONSIDERATION of the
foregoing Recitals of Fact, the covenants hereinafter contained,
and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
Section 1.
Recitals of
Fact .
(a)
The Borrower
Parties represent and warrant that all of the above Recitals of
Fact are true and correct and incorporated herein by reference, and
may be relied on by the Agent and the Lenders as to their truth,
completeness, and correctness.
(b)
The Borrower
Parties acknowledge that the Agent and the Lenders are relying on
the truth, completeness, and correctness of the statements and
representations of the Borrower Parties in this Agreement, and the
Borrower Parties represent that this Agreement contains no material
misrepresentations or omissions by them.
Section 2.
Acknowledgment of Outstanding
Indebtedness . The Borrower and the
Guarantors acknowledge that:
(a)
The outstanding
indebtedness owed by the Borrower to the Lenders under the Loan as
of September 30, 2009 is as follows:
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$
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81,679,317.58
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outstanding principal balance of the
Loan
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$
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100,051.74
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accrued interest under the Loan (without giving
effect to Default Rate interest under the Loan)
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$
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25,000.00
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administrative fees due and payable
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$
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885.90
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fees accrued but not payable
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$
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81,805,255.22
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total amount of outstanding principal, accrued
interest and specified accrued fees under the Loan
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The above Loan amounts, plus all other
Obligations, are subject to increase, decrease or other adjustment
as a result of interest, Default Rate interest, late charges, fees
and other charges including, without limitation, attorneys’
fees and other costs of collection which are payable to the Agent
and/or the Lenders under the Loan Documents. All amounts set
forth above are due and payable without offset, deduction or
counterclaim of any kind or character whatsoever.
(b)
The Borrower
Parties acknowledge and agree that, except as hereafter otherwise
stated by Agent in writing in its sole and absolute discretion,
interest on the Loan calculated at the Default Rate will accrue and
be payable from and after October 1, 2009.
Section 3.
Acknowledgement of
Continuation of Liabilities .
(a)
The obligations
in Section 2 and all other respective liabilities and
obligations of the Borrower Parties under the Loan Documents shall,
except as expressly modified in this Agreement, remain in full
force and effect, and shall not be released, impaired, diminished
or in any other way modified or amended as a result of the
execution and delivery of this Agreement or by the agreements and
undertakings of the parties contained herein. The Borrower
Parties hereby ratify and confirm each of the Loan Documents to
which they are respectively a party and the rights granted
thereunder in favor of the Agent and Lenders, and acknowledge and
agree that the Loan Documents constitute valid and legally binding
obligations against each Borrower Party that is a party thereto and
are enforceable against such Borrower Party, the Property and all
other Collateral in accordance with their terms without any
defenses thereto. The Borrower Parties hereby confirm that
the first priority security interests and liens granted pursuant to
the Loan Documents continue to secure the obligations of the
Borrower under the Loan Documents and any obligations incurred
following the Effective Date, and that such first priority security
interests and liens remain in full force and effect.
(b)
The Borrower
Parties acknowledge and agree that the Stated Defaults have
occurred and are continuing under the Loan Documents, and that any
and all notices thereof required to be sent to the Borrower
Parties, or any of them, under the Loan Documents have been
properly and timely provided by the Agent on behalf of Lenders (or,
if not so provided, are hereby waived) and all applicable cure
periods, if any, have expired; that the indebtedness under the Loan
shall remain due and payable pursuant to the terms of the Loan
Agreement (except as otherwise expressly provided herein); that,
except as expressly set forth in this Agreement, this Agreement is
not intended to be, and shall not be deemed or construed to be, a
satisfaction, reinstatement, novation, modification or release of
the Loan, the Loan Documents, or any of them, or a waiver by the
Agent or Lenders of any of their rights under the Loan Documents,
or any of them, or at law or in equity; that none of this Agreement
or any payments made or other actions taken pursuant to this
Agreement shall be deemed to cure the Stated Defaults that
have
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occurred under the Loan
Documents or to cure or reinstate the Loan or the Loan Documents;
and that, except as otherwise expressly provided in this Agreement,
Agent and Lenders reserve all of their respective rights and
remedies in connection with the Stated Defaults, under the Loan
Documents and at law and in equity and are immediately entitled to
execute such rights and remedies upon a Forbearance Termination
Event (as defined in Section 7 ).
(c)
The Guarantors
acknowledge and agree that the term “Guarantied
Obligations” under the Payment Guaranty includes, without
limitation, all amounts required to be paid by the Borrower to the
Agent or Lenders under the terms of this Agreement.
Section 4.
Forbearance
.
(a)
Subject to the
satisfaction of the conditions precedent in Section 5 ,
for the period (hereinafter referred to as the “
Forbearance Period ”) beginning on the Effective Date
and ending on the Forbearance Termination Date defined in
Section 4(b) , the Agent and Lenders, without waiving,
curing or affecting the Stated Defaults, hereby agree to forbear
from the exercise of any of their rights and remedies available
under the Loan Agreement and other Loan Documents on account of the
Stated Defaults. The Agent’s and Lenders’
forbearance provided for herein

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