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Tejon Ranch Co. (NYSE:TRC) Files An 8-K Entry into a Material Definitive Agreement

Tejon Ranch Co. (NYSE:TRC) Files An 8-K Entry into a Material Definitive Agreement

Item1.01 Entry into Material Definitive Agreements.

Item1.01 Entry into Material Definitive Agreements.

On November30, 2016, Tejon Ranchcorp (TRC), a wholly-owned
subsidiary of Tejon Ranch Co. (Company), entered into two
amendments to the Second Amended and Restated Limited Liability
Company Agreement of Centennial Founders, dated July31, 2009 (the
Agreement) for Centennial Founders, LLC (Centennial Founders).
Centennial Founders was organized to pursue the entitlement and
development of land owned by TRC and Centennial Founders in Los
Angeles County.

The first amendment to the Agreement (First Amendment) is by and
among TRC, Standard Pacific Investment Corp. (SPIC), CalAtlantic
Group, Inc. (CalAtlantic), and Pardee Homes (Pardee), and is
acknowledged and agreed to by Lewis Tejon Member, LLC (the
Withdrawing Member) and Lewis Investment Company, LLC, a
California limited liability company (Lewis).

The second amendment to the Agreement (Second Amendment) is by
and among TRC, SPIC, CalAtlantic and Pardee. Capitalized terms
that are not otherwise defined herein are defined in the
Agreement, First Amendment or Second Amendment.

The First Amendment and Second Amendment do not change the
purpose of Centennial Founders, which is to obtain all necessary
governmental approvals and to develop the Centennial community.
As of the Agreements effective date (July 31, 2009) and
continuing through the effective dates of the First and Second
Amendments (November 30, 2016), all parties other than TRC
elected to become non-funding members. Non-funding members are
not obligated to make capital contributions during the Remaining
Entitlement Period or the Pre-Development Period. Non-funding
members may elect to rescind their election on the terms and
conditions in the Second Amendment. Once a member rescinds such
election, it must fund its share of going forward capital calls.
Non-funding members suffer a dilution of their respective
ownership percentage when another member contributes capital in
their stead. The ownership percentage dilution calculation
reduces the non-funding members percentage interest and the
contributing members ownership percentage interest is
correspondingly increased. Prior to entering the First Amendment,
TRC had a 77.11% ownership interest and Pardee, CalAtlantic/SPIC
and the Withdrawing Member each had a 7.63% ownership interest.

The following description of the First and Second Amendments does
not purport to be complete and is qualified in its entirety by
reference to the filed First and Second Amendments.

The following is a summary of the key terms and conditions of the
First Amendment:

The Withdrawing Member agrees to withdraw from the Company
and to accept a liquidation of its interest in the Company to
a separately and contemporaneously entered redemption
agreement. All Withdrawing Members representatives and
alternates to Centennial Founders Executive Committee have
concurrently resigned.
The Withdrawing Members ownership interest has been allocated
to the Remaining Members, whose percentage ownership
interests have been adjusted as follows: TRC 83.48%, Pardee
8.26% and CalAtlantic/SPIC 8.26%. Such percentage ownership
interests shall remain subject to further adjustment and
dilution as provided in the Second Amendment.

The following is a summary of the key terms and conditions of the
Second Amendment:

Pardee and CalAtlantic (each a Developer and collectively the
Developers) may retain non-funding member status or may elect
to become a funding member up to the Withdrawal Date (the
date that is 18 months after the effective date of the Second
Amendment). A Developer that becomes a funding member is not
able to thereafter elect non-funding status.
On or before the Withdrawal Date, Developers who do not
become funding members shall withdraw as members of
Centennial Founders and shall release all right, title and
interest as members, including any rights to unreturned
Capital Contributions being treated as Subordinated Debt. A
withdrawing Developer and the Company shall evidence the
withdrawal by entering a withdrawal and redemption agreement
in a form and content substantially similar to the exhibit
attached to the Second Amendment.

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If any Developer fails to become a funding member of or
withdraw as a member from Centennial Founders by the earlier
of the Withdrawal Date, the Specific Plan Approvals Deadline
(summarized below) or an event of default, then after such
date, TRC has the right to call such Developer(s) interest as
provided in the Second Amendment. In such case the Applicable
Lot Credit (summarized below) and the ability of such
Developer(s) to purchase Private Sale Lots (other than in the
open market) is forfeited.
A Developer that withdraws from Centennial Founders on or
before the Withdrawal Date may purchase a specific percentage
of developed single family attached and/or detached lots
(Private Sales Lots as further defined in the Second
Amendment) and shall have the right to apply an Applicable
Lot Credit to such purchase. Developers that become funding
members do not get a lot credit, but may purchase Private
Sales Lots as provided in the Second Amendment.
Lots that are not sold as Private Sales Lots will be sold on
the open market.
The number of Private Sales Lots available to an eligible
Developer is based on the diluted percentage interest of that
Developer on the date it withdraws from Centennial Founders
or becomes a funding member.
The Applicable Lot Credit for each withdrawing Developer is
$7,000,000 divided by the total number of developed lots
deemed Private Sales Lots. If a Developer that is entitled to
a lot credit and Centennial Founders reach agreement on a
Private Lot Sale, then the Applicable Lot Credit is applied
to the purchase price for such lots.
A Developers ability to purchase a certain percentage of
Private Sales Lots and/or to use its respective Applicable
Lot Credit on such purchases terminates automatically (i)if
Centennial Founders does not obtain final approval from the
Los Angeles Board of Supervisors of certain land use
entitlements described in the Second Amendment by March15,
2018 and, further, (ii)if any litigation challenging such
entitlements is not resolved favorably (in Centennial
Founders sole and absolute discretion) by December31, 2019
(either being a Specific Plan Approvals Deadline).
Non-funding members have no voting interest, management,
voting, consent or approval rights regarding or related to
any matter, business or affairs of Centennial Founders,
provided (i)each non-funding member continues to have a
representative on the Executive Committee (but such
representative is non-voting and advisory only, except for
the Limited Approval Rights), and (ii)each non-funding member
continues to have the Limited Approval Rights (as defined in
the Second Amendment).
The rights of a Developer that timely withdraws to purchase
Private Sales Lots and use the Applicable Lot Credit for such
purchase survive such partys withdrawal as a member of
Centennial Founders.

The First Amendment and Second Amendment will be filed as an
exhibit to the 2016 Annual Report on Form10-K to provide
investors with information regarding its terms.

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About Tejon Ranch Co. (NYSE:TRC)
Tejon Ranch Co. is a diversified real estate development and agribusiness company. The Company operates through five business segments: commercial/industrial real estate development; resort/residential real estate development; mineral resources; farming, and ranch operations. Its commercial/industrial real estate development segment is engaged in building, land lease activities, and land and building sales. The resort/residential real estate development segment is involved in the land entitlement and development process. Within its resort/residential segment, the three active developments are MV, Centennial and Grapevine. Its mineral resources segment includes oil and gas royalty leases, rock and aggregate mining leases, a lease with National Cement and sales of water. The farming segment is engaged in the sale of wine grapes, almonds and pistachios. The Ranch Operations segment consists of grazing leases, game management, and other ancillary services supporting the ranch. Tejon Ranch Co. (NYSE:TRC) Recent Trading Information
Tejon Ranch Co. (NYSE:TRC) closed its last trading session up +0.40 at 27.32 with 31,361 shares trading hands.

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