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RESOLUTION NO. cDC/Z006.Z7
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO (1) APPROVING THE SALE OF
TUSCANY APARTMENTS (THE "PROPERTY") TO CAPITAL
FORESIGHT LIMITED PARTNERSHIP AND (Z) APPROVING AND
AUTHORIZING THE EXECUTIVE DIRECTOR OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") TO EXECUTE AN ASSUMPTION AGREEMENT
RELATED TO THE SALE OF THE PROPERTY
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WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") is
8 authorized wtder Health and Safety Code Section 33000, e1 seq., 10 issue bonds 10 be used 10 make loans
9 10 finance certain activities within the City of San Bernardino; and
10 WHEREAS, the Agency and U.S. Bank National Association, successor by merger 10 U.S.
11 Bank Trust National Association formerly known as First Trust of California, National Association (the
12 "Trustee"), en1ered inlo that certain Indenture ofTrust, dated as of May I, 1996 (the "Indenture"), in
13 connection with the issuance of the Agency's $7,000,000 Variable Rate Demand Multifamily Housing
14 Revenue Bonds (Silverwood Apartments Project) Series 1996 (the "Bonds"); and
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WHEREAS, the Agency loaned the proceeds of the Bonds 10 Magellan Silverwood Partnership,
16 an Arizona general partnership (the "Original Borrower''), pursuant 10 a Loan Agreement, dated as of
May I, 1996 (the "Loan Agreement''), among the Agency, the Trustee and the Original Borrower; and
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WHEREAS, proceeds of the Bonds were used, in part, 10 constroct and pay other costs
associated with the construction and development of a multifamily residential rental housing project
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originaJly known as Silverwood Apartments and is now known as Tuscany Apartments (the "Property'')
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located in San Bernardino, California; and
WHEREAS, the Property was sold 10 San Bernardino 328/ AF xxx, LLC, a California limited
liability company in 2001; and
WHEREAS, at that time, the Indenture was amended by that certain First Supplemental
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Indenture dated as of September I, 2001, because San Bernardino 328/AF xxx, LLC caused the
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delivery 10 the Trustee of a Wells Fargo Bank, National Association leiter of credit 10 replace the existing
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1 letter of credit issued by Bank One, Arizona, NA; and
2 WHEREAS, in September 2001, the Property was acquired by MG Tuscany Apartments L.P., a
3 California limited partnership ("Tuscany''), and in connection therewith certain amendments were made
4 to the Indenture, Loan Agreement and ReguJatory Agreement and Declaration of Restrictive Covenants
5 dated as of May I, 1996, the fonns of which amendments are on file with the Secretary of the Agency
(the "Bond Docwnents''); and
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WHEREAS, Tuscany has entered into a Purchase and Sale Agreement and Joint Escrow
Instroctions dated as of April 28, 2006, for the sale of the Property to The Capital Foresight Limited
Partnership, a Nevada limited partnership ("Buyer''), as amended by a First Amendment to the Purchase
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and Sale Agreement and Joint Escrow Instroctions dated as of May 15, 2006 (as so amended, the
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"Purchase Agreement"); and
WHEREAS, Buyer sha11 assign the Purchase Agreement to Capital Foresight Tuscany I, LP
and Capital Foresight Tuscany II, LP (collectively, "Borrower"), who shall acquire ownership of
the Property as tenants-in-common; and
WHEREAS, Borrower desires the right, in its sole election, on or before December 31, 2007 to
add a non-profit entity (a "Non-Profit") as a general partner in each of the borrowing partnerships
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(Capital Foresight Tuscany I, L.P. and Capital Foresight Tuscany II, L.P.); and
WHEREAS, the Agency has considered the tenns of the sale of the Property and the asswnption
18 of the Bond Docwnents by the Borrower and the admission, at Borrower's election prior to December
19 31, 2007, to add a Non-Profit general partner to each of the Partnerships comprising Borrower, as
20 contemplated herein and desires at this time to approve the tenns of said transaction in the public
21 interests of the Agency.
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22 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF
23 THE CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND
24 ORDER, AS FOLLOWS:
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Section 1.
The Community Development Commission ("Commission") on behalf of
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the Agency hereby approves the sale of the Property to The Capital Foresight Limited Partnership,
a Nevada limited partnership and lor its assigns, Capital Foresight Tuscany I, LP, and Capital
Foresight Tuscany II, LP. The Agency further approves the admission of a Non-Profit general
partner into each such partnership on or before December 31, 2007, at the sole option and
election of such partnerships, so long as the Agency is provided prior written notice of such
admission, which notice shall be accompanied by copies of the documentation therefor. The
Commission on behalf of the Agency acknowledges and agrees that Borrower is under no
obligation to so admit a Non-Profit as a general partner in each of the partnerships, which
comprise Borrower.
Section 2. The Commission on behalf of the Agency hereby approves the form of
Assumption Agreement and execution thereof between Agency, Trustee and the Borrower
attached hereto as Exhibit "A" together with any nonsubstantive changes therein or
nonsubstantive additions thereto as may be approved by the Chairman or Executive Director,
with the concurrence of Agency Counsel, as necessary, to incorporate certain terms and
conditions when such terms and conditions have been ascertained.
Section 3. The Chairman or the Executive Director, or their designees are hereby
authorized and directed, for and in the name and on behalf of the Agency, to do any and all
things and take any and all actions, including execution and delivery of any and all assignments,
certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants
and other documents, which they, or any of them, may deem necessary or advisable in order to
consununate the transaction contemplated herein.
Section 4. The Commission on behalf of the Agency hereby appoints Lewis
Brisbois Bisgaard & Smith LLP as bond counsel for the Agency in this matter. The fees of
Lewis Brisbois Bisgaard & Smith LLP shall be paid by the Borrower.
Section 5. The Resolution shall become effective immediately upon its adoption.
III
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO (1) APPROVING THE SALE OF
TUSCANY APARTMENTS (THE "PROPERTY") TO CAPITAL
FORESIGHT LIMITED PARTNERSHIP AND (2) APPROVING AND
AUTHORIZING THE EXECUTIVE DIRECTOR OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") TO EXECUTE AN ASSUMPTION AGREEMENT
RELATED TO THE SALE OF THE PROPERTY
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Conununit
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Development Conunission of the City of San Bernardino at a ;oint regular
meetin
thereof, held on the 10th day of July
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, 2006, by the following vote, to wit:
9 Conunission Members:
Aves
Navs
Abstain
Absent
to ESTRADA
11 BAXTER
12 MCGINNIS
DERRY
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KELLEY
14
JOHNSON
15 MC CAMMACK
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i
Secretary
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19 The foregoing resolution is hereby approved this J~tt~ day of July
,2006.
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Morris, C' on
Co . ty Development Conunission
of the City of San Bernardino
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Approved as to Form and Legal Content:
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By:
v~~J
Agency Co
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ASSUMPTION AGREEMENT
$7,000,000
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
Variable Rate Demand Multifamily Housing Revenue Bonds
(Silverwood Apartments Project)
Series 1996
This Assumption Agreement is entered into this 18th day of October, 2006, by and
between the Redevelopment Agency of the City of San Bernardino (the "Issuer"), U.S. Bank
National Association, successor by merger to U.S. Bank Trust National Association, formerly
First Trust of California, National Association, as trustee (the "Trustee") under that certain
Indenture dated as of May I, 1996, as amended by that certain First Supplemental Indenture
dated as of September I, 2001, and that certain Second Supplemental Indenture dated as of May
1,2003 (the "Indenture") and Tuscany Holding, LLC, a California limited liability company (the
"Borrower") pursuant to Section 7 of the Regulatory Agreement and Declaration of Restrictive
Covenants dated as of May I, 1996 and recorded in the Official Records of the County of San
Bernardino, as Document No. 19960251735 on July 16, 1996 as amended by that certain
Amendment to Regulatory Agreement and Declaration of Restrictive Covenants dated as of May
I, 2003 (the "Regulatory Agreement"). Capitalized terms used herein which are not defined
herein shall have the meanings assigned thereto in the Indenture and the Regulatory Agreement.
RECITALS
WHEREAS, the Issuer has previously issued the above-captioned bonds (the "Bonds")
the proceeds of which were loaned by the Issuer to Magellan Silverwood & Cross Creek General
Partnership, an Arizona general partnership (the "Original Borrower") pursuant to a Loan
Agreement dated as of May 1,1996 (the "Original Loan Agreement") by and among the Issuer,
the Trustee and the Original Borrower to finance the acquisition, rehabilitation and equipping of
a multifamily residential housing project facility located in San Bernardino, California (the
"Project"); and
WHEREAS, in connection with the issuance of the Bonds, the Original Borrower, the
Trustee and the Issuer entered into the Regulatory Agreement; and
WHEREAS, the Original Borrower sold the Project to San Bemardino 328/AF XXX,
LLC, a California limited liability company ("San Bemardino 328/AF XXX") and San
Bernardino 328/AF XXX sold the Project to MG Tuscany Apartments, LP; and
WHEREAS, in May, 2003, at the request of MG Tuscany Apartments, LP, Fannie Mae
issued a direct pay irrevocable, transferable Credit Enhancement Instrument (the "Credit
Enhancement Instrument") to the Trustee and in connection therewith MG Tuscany Apartments,
LP, the Trustee, and Fannie Mae entered into, and the Issuer and MG Tuscany Apartments, LP
acknowledged, the Intercreditor Agreement dated as of May I, 2003 (the "Intercreditor
Agreement"); and
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WHEREAS, and MG Tuscany Apartments, LP intends to sell the Project to the
Borrower; and
WHEREAS, Section 7 of the Regulatory Agreement provides that a transferee of the
Original Borrower who acquires the Project prior to the termination of the Rental Restrictions
and Occupancy Restrictions provided in the Regulatory Agreement shall assume all duties and
obligations of the Original Borrower under the Regulatory Agreement and the Original Loan
Agreement, as amended by the First Amendment to Loan Agreement dated as of September I,
2003 and Second Supplemental Loan Agreement dated as of May I, 2003 (collectively the
"Loan Agreement"); and
WHEREAS, the Intercreditor Agreement must be assigned to the Borrower at this time.
NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, the Borrower, Issuer and Trustee hereby agree as follows:
Section 1. Borrower's Assumption of Duties and Obligations under the Regulatory
Agreement, Loan Agreement and Intercreditor Agreement.
The Borrower hereby fully accepts and assumes all of the duties and obligations of MG
Tuscany Apartments, LP under the Regulatory Agreement, the Loan Agreement and the
Intercreditor Agreement (collectively, the "Assumed Obligations") and agrees to perform all
Assumed Obligations in accordance with the terms of the Regulatory Agreement, the Loan
Agreement and the Intercreditor Agreement (collectively, the "Assumed Documents").
Notwithstanding anything herein or in the Assumed Documents, the Borrower shall not be held
responsible for or be subject to duties or obligations arising under the Assumed Documents
before the date of this Assumption Agreement.
From and after recording of the Grant Deed transferring ownership from MG Tuscany
Apartments, LP to Borrower, MG Tuscany Apartments, LP shall have no further liability under
the Assumed Documents, and shall be relieved of all of its obligations thereunder; provided
however, that this Agreement does not relieve MG Tuscany Apartments, LP of any Assumed
Obligations with respect to events or circumstances arising prior to such date.
Section 2.
Completion of Tax Deferred Exchange.
The parties hereto acknowledge and agree that the Borrower is acquiring the property at
the direction of C.F. A venterra L.P., a California limited partnership ("CF A venterra"), as part of
a so called "reverse" tax deferred exchange under Section I 031 of the Internal Revenue Code,
and that no later than 180 days from and after the acquisition of the Project by Borrower,
Borrower will exchange the Project directly, or indirectly through a qualified intermediary, to CF
Aventerra or some other entity owed or controlled by The Capital Foresight Limited Partnership,
a Nevada limited partnership and/or its general partner, Naty Saidoff (a "CF Entity"), and the
parties hereto approve the subsequent transfer to CF A venterra or such other CF Entity, so long
as the parties are provided prior written notice of such transfer, which notice shall be
accompanied by copies of the documentation therefor and CF A venterra or such other CF Entity
4841-6844-9281.2
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fully accepts and assumes all of the duties and obligations of Borrower under the Assumed
Documents and agrees to perform all Assumed Obligations in accordance with the terms of the
Assumed Documents.
Section 3.
Admission of a Non-Profit General Partner.
The parties acknowledge that the Project is qualified for certain property tax benefits if a
non-profit entity ("Non-Profit") is a general partner in the entity that owns the Project. The
parties have been provided the organizational documents for CF A venterra, including one of its
general partners, AOF Pacific, LLC, which qualifies as a Non-Profit. In the event Borrower
exchanges the Project to a CF Entity which does not have a Non-Profit general partner at the
time of the exchange, the parties hereto approve the subsequent admission of a Non-Profit as a
general partner in the CF Entity on or before December 31, 2008, to qualify the Project for a
non-profit exemption from property taxes, at the sole option and election of such CF Entity, so
long as the parties are provided prior written notice of such admission, which notice shall be
accompanied by copies of the documentation therefor. The parties further acknowledge and
agree that such CF Entity is under no obligation to so admit a Non-Profit as a general partner.
Section 4.
Miscellaneous Provisions.
(a) Notices to be provided to the Borrower shall be provided to the following address:
Tuscany Holding, LLC
c/o Accommodator Finance Company
22837 Ventura Boulevard, Suite 300
Woodland Hills, California 91364
Attn: Eli Tene
Telephone No: (818) 225-1642
Facsimile No: (818) 591-2990
and The Capital Foresight Limited Partnership
2780 Beverly Glen Circle, Suite #300
Bel Air, California 90077
Attn: Naty Saidoff
Telephone No: (310) 234-9598
Facsimile No: (310) 234-9589
(b) The Borrower represents and warrants to the Issuer and the Trustee that, to the
best of its knowledge, as of the date hereof, there exists no event of default under the Assumed
Documents and the other documents assumed by the Borrower in connection with the Bonds (the
"Borrower Documents") and there is no event that, with the giving of notice, the passage of time,
or both, would constitute an event of default under the Borrower Documents.
(c) The Borrower agrees to pay the reasonable costs of the Issuer and Trustee
associated with this Assumption Agreement, including attorneys fees.
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(d) This Assumption Agreement may be executed in several counterparts, each of
which shall be deemed an original and all of which together shall constitute but one and the same
instrument.
(e) This Assumption Agreement shall be governed exclusively by and construed in
accordance with the laws of the State ofCalifomia.
(f) MG Tuscany Apartments L.P. is a third party beneficiary of this Agreement.
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IN WITNESS WHEREOF, this Asswnption Agreement has been executed by the parties
hereto as of the day and year first hereinabove written.
BORROWER
TUSCANY HOLDING, LLC,
a California limited r bility company
By:
ISSUER
APPROVED AS TO FORM AND
LEGAL CONTENT:
Redevelopment Agency of the City of
San Bernardino
Agency Counsel
By:
Maggie Pacheco, Executive Director
TRUSTEE
U.S. Bank National Association, as Trustee
By:
Its Vice President
4841-6844-9281.1
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IN WITNESS WHEREOF, this Assumption Agreement has been executed by the parties
hereto as of the day and year first hereinabove written.
BORROWER
TUSCANY HOLDING, LLC,
a California limited liability company
By:
Eli Tene, Manager
ISSUER
APPROVED AS TO FORM
AND LEGAL CONTENT:
V~W-
Agency COll el
Redevelopment Agency of the City of
San Bernardino
;;711~b----
Maggie Pa heco, EXecutive Director
TRUSTEE
U.S. Bank National Association, as Trustee
By:
Its Vice President
4841-6844-9281.2
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IN WITNESS WHEREOF, this Assumption Agreement has been executed by the parties
hereto as of the day and year first hereinabove written.
BORROWER
TUSCANY HOLDING, LLC,
a California limited liability company
By:
Eli Tene,11anager
ISSUER
Redevelopment Agency of the City of
San Bernardino
By:
11aggie Pacheco, Executive Director
TRUSTEE
U.S. Bank National Association, as Trustee
By:
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Its ice rdent
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ACKNOWLEDGED AND ACCEPTED BY:
MG TUSCANY APARTMENTS L.P.,
a California limited partnership
By: Gleiberman Investments, Inc.,
a California corporation,
its Administrative General Partner
By:
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Mark Gle an, President
4841-6844-9281.2
GUARANTY
THIS GUARANTY ("Agreement") is made as of October 3, 2006, by Netanel "Naty"
Saidoff ("Guarantor") in favor of the Redevelopment Agency of the City of San Bernardino
("Agency"):
RECITALS
Whereas, in 1996, the Agency issued $7 million principal amount of multi-family
housing revenue bonds (the "Bonds") on behalf of the owner of the apartment complex located at
2225 East Pumalo Street, San Bernardino, California, now commonly known as Tuscany
Apartments (the "Project"); and
Whereas, the current owner of the Project ("Owner") intends to sell the Project, and on
June 19,2006, the Agency approved the sale of the Project to Guarantor, one of his two primary
entities, The Capital Foresight Limited Partnership or Saidoff Enterprises, LLC or a single
purpose entity owned by one of the foregoing (an "Approved SaidoffEntity"); and
Whereas, the Project shall be sold on or before October 20, 2006, and the sale is pursuant
to a structure commonly known as a "reverse exchange" under which the Guarantor shall not
take fee title to the Project immediately, but instead title shall be transferred first to an
intermediary, Tuscany Holding, LLC, a California limited liability company ("Intermediary")
and within 180 days the Project will be transferred to C.F. Aventerra L.P., a California limited
partnership, an entity which is owned 99.99% by one or more Approved SaidoffEntities; and
Whereas, the Agency will agree to approve the sale of the Project in its current structure
as long as Guarantor agrees that during the period in which Intermediary or any entity other than
an Approved Saidoff Entity holds title to the Project, he will (i) guarantee payment under the
Loan Agreement dated as of May 1, 1996, among the Agency, the Bond trustee and the Owner, as
amended by the First Amendment to Loan Agreement dated as of September 1, 2003 and Second
Supplemental Loan Agreement dated as of May 1, 2003 (the "Loan Agreement"), and (ii)
guarantee the covenants, terms and conditions of the Regulatory Agreement and Declaration of
Restrictive Covenants dated as of May 1, 1996 and recorded in the Official Records of the
County of San Bernardino, as Document No. 19960251735 on July 16, 1996, as amended by that
certain Amendment to Regulatory Agreement and Declaration of Restrictive Covenants dated as
of May 1,2003, among the Agency, the Bond trustee and the Owner (the "Regulatory Agreement",
and with the Loan Agreement collectively the "Bond Documents") ; and
WHEREAS, when the Project is transferred to Guarantor or an Approved SaidoffEntity,
this Agreement will terminate and be of no force and effect.
4843-1944-4225.1
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NOW THEREFORE, THE PARTIES HERETO AGREE, AS FOLLOWS:
1. Recitals. The recitals herein are true and correct and are incorporated herein by
this reference.
2. Guarantv.
(a) Guarantor unconditionally and irrevocably guarantees the full and prompt
payment of any and all principal, interest, fees, costs, reimbursements and other sums owed
under the Bond Documents at the times and according to the terms expressed in the Bond
Documents. Guarantor further unconditionally and irrevocably guarantees the performance of
the covenants, terms and conditions of the Bond Documents, including but not limited to all tax
related covenants affecting the tax exempt status of the Bonds, affordability covenants, income
restrictions and rent restrictions on the Project.
(b) The Guarantors' liability under this Guaranty is a guaranty of payment and
performance and not of collectibility only.
3. Waivers.
(a) Guarantor waives all benefits and defenses it may have under California
Civil Code Section 2809 and agrees that Guarantor's liability may be larger in amount and more
burdensome than that of Intermediary. Guarantor's liability under this Guaranty shall continue
until all sums due under the Bond Documents have been paid in full and shall not be limited or
affected in any way by any impairment or any diminution or loss of value of any security or
collateral for Intermediary's obligations to Agency, from whatever cause, including, without
limitation, Agency's failure to perfect a security interest in any such security or collateral or any
disability or other defense ofIntermediary, any other surety for Intermediary's obligations or any
other person related to Intermediary's obligations to Agency.
(b) Guarantor agrees that its liability under, and the enforceability of, this
Guaranty are absolute and are not contingent upon the genuineness, validity or enforceability of
any of the Bond Documents or the availability of any defense to Intermediary, any other surety
for Intermediary's obligations or any other person related to Intermediary's obligations to
Agency. Guarantor waives all benefits and defenses it may have under California Civil Code
Section 2810 and agrees that it shall be liable even if Intermediary, any other surety for
Intermediary's obligations or any other person related to Intermediary's obligations to Agency
had no liability at the time of execution of the Bond Documents or later ceases to be liable.
(c) Guarantor waives its rights under California Civil Code Section 2815 and
agrees that by doing so Guarantor has no right to revoke this Guaranty until all obligations under
the Bond Documents have been fully satisfied.
(d) Guarantor waives its rights under California Civil Code Section 2819 and
agrees that by doing so Guarantor's liability and the enforceability of this Guaranty shall
continue even if Agency alters any obligations under any of the Bond Documents in any respect.
4843-1944-4225.1
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(e) Guarantor waives its rights under California Civil Code Section 2839 and
agrees that by doing so (i) Guarantor's obligations under this Guaranty shall not be deemed
satisfied by a mere offer of payment by Intermediary or any other person of the principal
obligations under the Bond Documents and (ii) Guarantor's liability under and the enforceability
of this Guaranty shall continue until all obligations under the Bond Documents have been fully
satisfied.
(f) Guarantor waives all benefits and defenses it may have under California
Civil Code Sections 2845, 2849 and 2850, including, without limitation, the right to require
Agency to: (i) proceed against Intermediary, any other surety for Intermediary's obligations to
Agency or any other person related to Intermediary's obligations to Agency, (ii) proceed against
or exhaust any other security or collateral Agency may hold, or (iii) pursue any other right or
remedy for Guarantor's benefit, and agrees that Agency may foreclose against all or a part of any
security Agency may hold without taking any action against Intermediary, any other surety for
Intermediary's obligations to Agency or any other person related to Intermediary's obligations to
Agency, and without proceeding against or exhausting any security or collateral Agency holds.
(g) Guarantor waives diligence and all demands, protests, presentments and
notices of every kind or nature, including notices of protest, dishonor, nonpayment, acceptance
of this Guaranty and creation, renewal, extension, modification or accrual of any of the
obligations under the Bond Documents. Guarantor also waives the right to plead all statutes of
limitation as a defense to Guarantor's liability under, or the enforceability of, this Guaranty.
4. Guarantor Informed ofIntermediarv's Condition. Guarantor acknowledges that it
has had an opportunity to review the Bond Documents, the value of the security for
Intermediary's obligations to Agency and Intermediary's financial condition and ability to
perform such obligations. Guarantor agrees to keep itself fully informed of all aspects of
Intermediary's fmancial condition and the performance ofIntermediary's obligations to Agency
and that Agency has no duty to disclose to Guarantor any information pertaining to Intermediary
or any security for Intermediary's obligations to Agency.
5. Subrogation. Reimbursement and Contribution Rights. Guarantor agrees that its
rights of subrogation and reimbursement against Intermediary, its right of subrogation against
any other collateral or security for Intermediary's obligations to Agency or any other surety for
Intermediary's obligations to the Agency and its right of contribution from any surety for
Intermediary's obligations to Agency shall be subordinate to Agency's rights against
Intermediary, in such collateral or security and against any such surety. Guarantor shall not have
any such rights of subrogation, reimbursement or contribution until all amounts due under the
Bond Documents have been paid in full and Agency has released, transferred or disposed of all
of its rights in any collateral or security. Guarantor waives its rights under California Civil Code
Sections 2847, 2848 and 2849 to the extent inconsistent with the foregoing.
6. Guarantv Continues if Pavments Are Avoided or Recovered from Agencv. If all
or any portion of the obligations guaranteed under this Guaranty are paid or performed,
Guarantor's obligations under this Guaranty shall continue and remain in full force and effect if
all or any part of such payment or performance is avoided or recovered directly or indirectly
4843-1944-4225.1
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from Agency as a preference, fraudulent transfer or otherwise, irrespective of (a) any notice of
revocation given by any Guarantor prior to such avoidance or recovery, and (b) complete
performance ofIntermediary's obligations to Agency.
7. Subordination. Any rights of any Guarantor, whether now existing or later
arising, to receive payment on account of any indebtedness (including interest) owed to it by
Intermediary, or to withdraw capital invested by it in Intermediary, or to receive distributions
from Intermediary, shall at all times be subordinate as to lien and time of payment and in all
other respects to the full and prior performance of Intermediary's obligations to Agency.
Guarantor shall not be entitled to enforce or receive payment of any sums hereby subordinated
until all of Intermediary's obligations to Agency have been paid and performed in full and any
such sums received in violation of this Guaranty shall be received by Guarantor in trust for
Agency.
8. Representations and Warranties. Guarantor makes the following representations
and warranties to Agency:
(a) This Guaranty has been duly executed and delivered and is the legal, valid
and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting
the rights of creditors generally and general principles of equity.
(b) Guarantor's execution and delivery of, and its performance of its
obligations under, this Guaranty do not and will not conflict with any (i) contractual or legal
restriction or obligation, or (ii) court or regulatory order, binding on or affecting Guarantor.
(c) There is no pending or, to the actual knowledge of Guarantor, threatened
action, proceeding or investigation before any court, governmental agency or arbitrator against or
affecting Guarantor or any of Guarantor's other assets which, if decided adversely to Guarantor,
would materially and adversely affect the financial condition of Guarantor or of any of
Guarantor's assets, or would materially and adversely affect the present or future ability of
Guarantor to perform its obligations under this Guaranty.
(d) Guarantor is not insolvent nor will Guarantor be rendered insolvent by the
transactions contemplated by the Bond Documents. After giving effect to the transactions
contemplated by the Bond Documents, Guarantor will not be left with an unreasonably small
amount of capital with which to engage in its business or undertakings, nor will Guarantor have
intended to incur, or believe that it has incurred, debts beyond its ability to pay such debts as they
mature.
(e) Guarantor has filed all required federal, state and local tax retums.
Guarantor has paid all federal, state and local taxes prior to delinquency (including any interest
and penalties) other than taxes being promptly and actively contested in good faith and by
appropriate proceedings.
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(f) Guarantor is in material compliance with all laws, regulations and court
orders applicable to it and its business.
(g) None of Guarantor's representations or warranties contained in this
Guaranty or any other document, certificate or written statement furnished to Agency on behalf
of Guarantor contains any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained in this Agreement or in such other
document, certificate or written statement (when taken in their entirety) not misleading. There is
no fact known to Guarantor which materially or adversely affects the business, operations, assets
or condition (financial or otherwise) of Guarantor which has not been disclosed in this
Agreement or in another written statement delivered to Agency by Intermediary or Guarantor.
9. Intermediarv. As used in this Guaranty, "Intermediary" shall include any
successor to Intermediary with respect to Intermediary's obligations under the Bond Documents
and any estate created by the commencement of a case under the Bankruptcy Code or any other
insolvency, bankruptcy, reorganization or liquidation proceeding, or by any trustee under the
Bankruptcy Code; provided that "Intermediary" shall not include any legal entity owned by
Guarantor.
10. Opportunity to Review. Guarantor acknowledges that it has had the opportunity
to review the matters discussed and contemplated by the Bond Documents, including the
remedies Agency may pursue against Intermediary in the event of a default under the Bond
Documents, the value of the security or collateral for Intermediary's obligations to Agency and
Intermediary's financial condition and ability to perform Intermediary's obligations to Agency.
Guarantor further has had the opportunity to review this Guaranty with its counsel.
11. Miscellaneous.
(a) Governing Law. All questions with respect to the construction of this
Guaranty and the rights and liabilities of the parties to this Guaranty shall be governed by the
laws of the State of California.
(b) Binding on Successors. This Guaranty shall inure to the benefit of, and
shall be binding upon, the successors and assigns of each of the parties to this Guaranty. Agency
may assign this Guaranty with one or more of the Bond Documents, without in any way
affecting any Guarantor's liability under it or them.
(c) Attornevs' Fees. The Guarantor shall reimburse Agency for all reasonable
attorneys' fees, costs and expenses, incurred by Agency in connection with the enforcement of
Agency's rights under this Guaranty and each of the other Bond Documents, including, without
limitation, reasonable attorneys' fees, costs and expenses for trial, appellate proceedings, out-of-
court negotiations, workouts and settlements or for enforcement of rights under any state of
federal statute.
(d) Termination. This Agreement shall remain in effect until Guarantor or an
Approved Saidoff Entity takes fee title to the Project as evidence by the recordation of a grant
4843-1944-4225.1
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deed in the records of the County of San Bernardino. Upon recordation of such grant deed, this
Agreement shall terminate and be of no force and effect.
(e) Counterparts. This Guaranty may be executed in any number of original
counterparts, each of which shall be deemed an original, but all of which when taken together
shall constitute one instrument. The original signature page of any counterpart may be detached
from such counterpart and attached to any other counterpart identical to such counterpart (except
having additional signature pages executed by other parties to this Guaranty) without impairing
the legal effect of any such signature(s).
(f) Entire AlITeement. This Guaranty constitutes the entire agreement and
understanding between the parties in respect of the subject matter of this Guaranty and
supersedes all prior agreements and understandings with respect to such subject matter, whether
oral or written.
(g) Amendments. This Guaranty may be amended only by an instrument in
writing signed by the parties to this Guaranty.
(h) Severability. If any part of this Guaranty is declared invalid for any
reason, such shall not affect the validity of the rest of the Guaranty. The other parts of this
Guaranty shall remain in effect as if this Guaranty had been executed without the invalid part.
The parties declare that they intend and desire that the remaining parts of this Guaranty continue
to be effective without any part or parts that have been declared invalid.
(i) Execution bv Facsimile. This Guaranty may be executed and delivered by
facsimile, in which case all signatures contained within said facsimile shall be deemed to be
original signatures and shall be treated as a binding and final execution of this Guaranty.
[Signatures on Next Page]
4843-1944-4225.1
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IN WITNESS WHEREOF, Netanel "Naty" Saidoff and the Redevelopment Agency of
the City of San Bernardino have caused this Agreement to be signed in their respective names.
REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO
By:
Legal Counsel
GUARANT R
etanel "Naty" Saido f
By:
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