Anne E. Klokow

Construction Loans – Lender Representation

• National Life Insurance Company. $40 million construction loan made by client for the demolition of existing improvements and construction of a new multifamily apartment complex in San Francisco, California.
• National Life Insurance Company. $230 million construction loan made by client and a public pension system, as co-lenders, for the (a) refinancing of a 875-room, 40-story convention hotel, with approximately 45,000 square feet of meeting and banquet facilities, four outdoors tennis courts, an outdoor pool, health club, spa, approximately 6,700 square feet of retail shops located in San Diego, California, and (b) the construction of a 33-story expansion tower consisting of approximately 750-rooms, a 34,000 square foot hall, a 30,000 square foot ballroom, 16,000 square feet of meeting space, additional food and beverage facilities, health club, swimming pool and 10,000 square feet of retail facilities. Representation included drafting and negotiation of loan documents that included a subordination agreement for the management agreement with the nationally recognized hotel manager, a cash management agreement with the borrower and hotel manager, a subordination agreement for the parking agreement for the hotel parking, an intercreditor agreement between the lender and mezzanine lender for a $120 million mezzanine loan, and ground lease estoppel with the Port of San Diego, the fee owner of the property with regard to the ground lease between the borrower, as ground tenant, and the Port of San Diego, as ground lessor.
• National Life Insurance Company. Represented a national life insurance company in $100 million additional advance on an existing $230 million construction loan made by client and a public pension system, as co-lenders, secured by the two-tower convention hotel located in San Diego, California.
• Non-Profit Mutual Benefit Society. Represented a non-profit mutual benefit society in $49.65 million construction loan, to be converted to four separate cross collateralized permanent loans, made by client for the construction of a regional retail center, consisting of 195,000 square feet of retail space to be constructed on 3,035,783 square feet of land in Anchorage, Alaska. Representation included collateral assignment of the borrower's right to receive reimbursements for site development work pursuant to site development agreements with Target, Kohl's and Lowe's.
• Public Pension System. Represented a public pension system in $75 million construction to permanent loan made by client for the expansion of an existing two-level 429,624 square foot regional shopping mall located in Temecula, California, with a 126,000 square foot open-air lifestyle retail component and two multi-level parking structures. Representation includes documentation of a collateral assignment of an acquisition agreement with the city redevelopment agency for the purchase of one of the parking structures for public parking, a SNDA for the ground sublease with the redevelopment agency, an agreement with the agency for the direct payment to the lender of the $11 million purchase price payable by the redevelopment agency from tax allocation bonds; assignment and consent documentation relating to the construction of a ring road pursuant to a development agreement with the City.
• Non-Profit Mutual Benefit Society. Represented a non-profit mutual benefit society in $48.5 million construction loan to be converted to three separate permanent cross collateralized loans made by client for the construction of a 122,161 square foot regional retail center located in Morgan Hill, California, and drafting standard construction loan documents, and included drafting and negotiating a set aside letter with the City for completion of certain off-site improvements and collateral assignment and consent of the City to the assignment of borrower's rights under a City Development Agreement.
• National Banking Association. Represented a national banking association in $66 million construction loan made by client, as administrative agent and co-lender with two other nationally recognized institutional lenders, for the construction of 100 luxury residential "for sale" condominium units, consisting of 148,400 square feet, a resort style pool and spa, fitness center, private wine cellar; 43,000 square feet of retail space on the ground floor and a subterranean parking garage. Documentation included negotiation of a collateral assignment of a purchase agreement with an affiliate of the borrower for the sale and release from the lender's lien of the retail portion of the project upon completion of the retail space and consent of the city to the collateral assignment of the developer's rights under the development agreement with the City.
• National Banking Association. Represented a national banking association in $70 million construction loan made by client a for a 15-story building containing 180 for-sale luxury residential condominiums, parking garage, swimming pool and sun deck, exercise room, business center, recreation room and retail space on the ground floor in Los Angeles, California. Documentation included drafting and negotiation of intercreditor agreement with mezzanine lender for mezzanine financing and DRE compliance for sale of condominiums.
• National Banking Association. Represented a national banking association in $35 million construction loan made by client for the conversion of two existing office buildings (six and nine stories) in downtown Los Angeles, California, into 123 joint live-work loft condominiums, with 1,800 square feet of retail space located on the ground floor and construction of a three story parking structure.
• National Life Insurance Company. Represented a national life insurance company in $37.5 million construction loan made by client to construct 143 new apartment units, 128 new garages and a recreation center and to remodel and renovate the existing improvements to be performed in four phases for property located in San Diego, California.
• Non-Profit Mutual Benefit Society. Represented a non-profit mutual benefit society in $15.5 million construction to permanent loan made by client for the construction of a retail center, consisting of 64,000 square feet of retail space in Wasilla, Alaska.
• Construction Company. Represented client in $24 million construction loan for the construction of seven "for sale" light industrial buildings, comprising 300,800 square feet in Las Vegas, Nevada, – documentation included assignment of purchase agreements for the sale of the completed buildings to third party purchasers.
• Construction Lender.Represented a nationally recognized construction lender in $17 million construction loan made by client for the conversion of an existing 11 story office building into a residential apartment tower located in Los Angeles, California.
• National Life Insurance Company. Represented a national life insurance company in $37 million construction loan made by client for the renovation of a 732,464 square foot 856-unit apartment complex located in California.
• Institutional Lender. Represented an institutional lender in $26 million construction/permanent loan made for the construction of a 27-hole "Nicklaus Design" golf course and related improvements and facilities, and 14,000 square foot clubhouse, pro shop, grill room and banquet facilities located in Aliso Viejo, California.
• National Banking Association. Represented a national banking association in $35 million construction loan made by client for the construction of a 345,000 square foot retail center in Arizona.
• Construction Lender. Represented a nationally recognized construction lender in $25.1 million construction loan made by client for the construction of an apartment complex in Santa Monica, California, and included an additional advance of $825,000 required to correct defects in the construction of the building.
• Construction Lender. Represented a nationally recognized construction lender in $36.5 million construction loan made by client to finance the acquisition of and renovation of eight apartment complexes located in Fresno, California.
• National Life Insurance Company. Represented a national life insurance company in $32 million construction loan made by client to finance the construction of a three-story 105,148 square foot building and a four-story, 134,784 square foot building on property located in Burbank, California, and included negotiation of environmental insurance policy and environmental indemnities from responsible parties relating to environmental contamination (property was part of a larger superfund site).

Hotel Financing New Construction and Portfolio Restructurings – Lender Representation

• National Life Insurance Company. Represented a national life insurance company in $230 million construction loan made by client and a public pension system, as co-lenders, for the construction of a 33-story expansion tower consisting of approximately 750-rooms, a 34,000 square foot hall, a 30,000 square foot ballroom, 16,000 square feet of meeting space, additional food and beverage facilities, health club, swimming pool and 10,000 square feet of retail facilities. Representation included drafting and negotiation of loan documents that included a subordination agreement for the management agreement with the nationally recognized hotel manager, a cash management agreement with the borrower and hotel manager, a subordination agreement for the parking agreement for the hotel parking, an intercreditor agreement between the lender and mezzanine lender for a $120 million mezzanine loan, and ground lease estoppel with the Port of San Diego, the fee owner of the property with regard to the ground lease between the borrower, as ground tenant, and the Port of San Diego, as ground lessor.
• Federal Savings Bank. Represented a federal savings bank in $45 million restructuring of a problem loan portfolio acquired from the FDIC, providing for the cross collateralization and cross defaulting of eight loans secured by a fee interest in a Marriott hotel, a ground lease interest in a Holiday Inn hotel located on an Indian reservation and as such governed by the Bureau of Indian Affairs and the Secretary of the Interior as well as other real and personal property collateral. Representation included drafting amended and restated loan documents, negotiating "comfort letters" with each hotel franchisors, permitting the lender to continue to operate the hotel under the applicable brand name upon foreclosure; drafting stock pledge agreements for the pledge of stock in two Holiday Inn hotels owned by borrower affiliates and cash management agreements for each hotel, each with a waterfall distribution allowing for, among other things, the payment of debt service on all loans, and a unique mechanism allowing the lender to control all cash flow while at the same time giving the borrower the flexibility to request transfers of excess cash from profitable hotels to pay for operating and/or capital expenditure deficiencies of less profitable hotels based on lender approved operating and capex budgets. The restructuring also provided for a mechanism to allow the borrower to payoff all loans at a discounted achieved through negotiated release prices for each property and lender's receipt of an aggregate minimum principal payments on all loans.
• Bank. Represented a California bank in $20 million forbearance and restructuring of eight loans acquired by client from the FDIC, which were originally made to affiliated SPE borrowers secured by seven hotels located in Idaho, Oregon and Washington. Rather than seeking the appointment of receivers and instituting foreclosure proceedings, this lender opted to grant a temporary forbearance and restructured the loans to provide for a catch of unpaid debt service and staged sale of the hotels, with all net sales proceeds to be applied to repayment of the loans.

SEC Receivership Financing Experience

• SEC Receiver. Represented SEC Receiver on the discounted payoff of a loan secured by an Internet company, requiring SEC court approval of the discounted payoff and concurrent sale of the Internet company.
• Hospital. Represented a hospital located in New York in sale of first and second lien priority loans secured by client, which involved drafting loan purchase and sale agreement with provisions requiring SEC court approval of the transaction and overbid procedures at an SEC court auction requiring the buyer to be the highest bidder. Unique issues involved the SEC receiver reserving from the sale the right to all distributions in the bankruptcy case involving the hospital leasing the real property.

Residential Construction Related Work-Out

• Institutional Lender. Represented an institutional lender on a forbearance/discounted payoff agreement, providing for a forbearance to allow the borrower time to complete construction of a "green" residence in Mammoth Lakes, California, and provisions for a discounted payoff of the loan after timely completion of the residence. Representation included review and negotiation on behalf of the lender of a maximum price construction contract for the completion of the work, construction budget and schedule, collateral assignment of construction contract and offsite construction materials, and review of city approvals and permits needed to obtain certificate of occupancy.

REO Sales Representing Foreclosing Lenders

• Credit Union. Represented a credit union in connection with a sale of a 188-unit multi-building apartment complex located in Indiana acquired through foreclosure. Representation including drafting the purchase and sale agreement, "as is" provisions, limitation of lender's liability, release of lender, right to receive all tax rebates resulting from pending tax appeals for taxes paid by lender prior to closing of the sale.
• Institutional Lender. Represented out of state institutional lender in connection with the foreclosure of a $44 million residence located in California and eventual sale of the residence following foreclosure.