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HomeMy WebLinkAbout2016 CON CDC HA - Paradise Creek II Housig Partners - Subordinate Completion GuarantySUBORDINATE COMPLETION GUARANTY [Paradise Creek Apartments Project/Phase II] 1. Obligations Guaranteed. For valuable consideration, the adequacy and sufficiency of which is acknowledged, the undersigned ("Guarantor") unconditionally guarantees the timely completion of the construction required pursuant to Article 10 of that certain Disposition and Development Agreement, dated as of June 21, 2011, by and between the Community Development Commission -Housing Authority of the City of National City (the "Commission") and Paradise Creek Housing Partners, L.P. ("Partnership"), as further set forth in that certain Assignment and Assumption of Phase II Obligations Under Disposition and Development Agreement dated as of August 17, 2016 (the "Construction" required by the "DDA"). This Guaranty is in addition to and independent of any other guaranty previously, concurrently or hereafter given to Commission by Guarantor. 2. Completion of Improvements By Guarantor. Guarantor irrevocably and unconditionally agrees that if for any reason (a) Partnership fails to diligently proceed with or complete the Construction in the manner and within the time limits set forth in the DDA, (b) Partnership fails to pay all costs of the Construction, or (c) Commission takes possession of the Property and the Improvements prior to the completion of the Construction, then, in any such event, and upon demand by Commission, Guarantor shall diligently complete the Construction in accordance with the terms of the DDA, all at Guarantor's sole cost and expense. In addition, Guarantor shall defend, indemnify and hold Commission harmless from and against all claims, demands, causes of action, liabilities, losses, costs and expenses (including, without limitation, costs of suit and reasonable attorneys' fees) arising from or in connection with any such event. Commission hereby agrees that if demand is made hereunder for Guarantor to complete the Construction, Guarantor shall have the right to have any undisbursed portion of the Commission Subordinate Loan applied to the costs of that Construction. 3. Remedies of Commission. If Guarantor fails to perform its obligations hereunder, then Commission may, in its sole and absolute discretion and without any obligation to do so, (a) elect to complete the Construction (with such changes to the General Contract and the Plans as Commission reasonably deems necessary), in which event Guarantor shall, upon demand, reimburse Commission for all reasonable expenditures made and reasonable costs incurred by Commission in connection with such completion, together with interest thereon at Commission's option at either the per annum rate of interest (the "Note Rate") set forth in that certain Commission Subordinate Loan Note of even date herewith made by Partnership in favor of Commission (the "Note") or the default rate of interest provided for in the Note (the "Default Rate"), or (b) from time to time and without first requiring performance on the part of Partnership or being required to exhaust or proceed against any or all security held by Commission, enforce performance by Guarantor of any obligation on the part of Guarantor to be performed hereunder, by action at law or in equity or both, in which event Commission shall be entitled to recover from Guarantor all actual losses, costs, damages, liabilities and expenses (including reasonable attorneys' fees and costs) sustained or incurred by Commission as a result of Guarantor's failure to perform its obligations hereunder, together with interest thereon at Commission's option at either the Note Rate or the Default Rate. Page 1 4. Reinstatement. All of Commission's rights pursuant to this Guaranty continue with respect to amounts previously paid to Commission on account of any obligations which are thereafter restored or returned by Commission, whether in a bankruptcy, reorganization, insolvency, receivership or similar proceeding ("Insolvency Proceeding") of Partnership or for any other reason, all as though such amounts had not been paid to Commission, and Guarantor's liability under this Guaranty (and all its terms and provisions) shall be reinstated and revived, notwithstanding any surrender or cancellation of this Guaranty. Commission, in its sole discretion, may determine whether any amount paid to it must be restored or returned; provided, however, that if Commission elects to contest any claim for return or restoration, Guarantor agrees to indemnify and hold Commission harmless from and against all costs and expenses, including reasonable attorneys' fees, expended or incurred by Commission in connection with such contest. If any Insolvency Proceeding is commenced by or against Partnership or Guarantor, at Commission's election, Guarantor's obligations under this Guaranty shall immediately and without notice or demand become due and payable, whether or not then otherwise due and payable. 5. Authorization. Guarantor authorizes Commission, without notice and without affecting Guarantor's liability under this Guaranty, from time to time, whether before or after any revocation of this Guaranty, to alter, modify or amend the Plans, the General Contract or any of the relevant terms, covenants and conditions of the DDA, provided there are no material changes to the Guarantor's obligations. 6. Waivers. To the maximum extent permitted by law, Guarantor waives (a) all rights to require Commission to proceed against Partnership, or any other guarantor, or proceed against, enforce or exhaust any security for the Construction or to marshal assets or to pursue any other remedy in Commission's power whatsoever; (b) all defenses arising by reason of any disability or other defense of Partnership, the cessation for any reason of the liability of Partnership, any defense that any other indemnity, guaranty or security was to be obtained, any claim that Commission has made Guarantor's obligations more burdensome or more burdensome than Partnership's obligations; (c) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Guaranty, and all other notices or demands to which Guarantor might otherwise be entitled; (d) all conditions precedent to the effectiveness of this Guaranty; (e) all rights to file a claim in connection with the obligations in an Insolvency Proceeding filed by or against Partnership; and (f) all rights to require Commission to enforce any of its remedies. 7. Guarantor to Keep Informed. Guarantor warrants having established with Partnership adequate means of obtaining, on an ongoing basis, such information as Guarantor may require concerning all matters bearing on the risk of nonperformance of the Construction. Guarantor assumes sole, continuing responsibility for obtaining such information from sources other than from Commission. Commission has no duty to provide any information to Guarantor until Commission receives Guarantor's written request for specific information in Commission's possession and Partnership has authorized Commission to disclose such information to Guarantor. 8. Authorization. Where Partnership is a corporation, partnership or other entity, Commission need not inquire into or verify the powers or authority of those acting or purporting Page 2 to act on behalf of Partnership, and this Guaranty shall be enforceable in reliance on the purported exercise of such powers or authority. 9. Assignments. Without notice to Guarantor, Commission may assign its rights with respect to the Construction and this Guaranty, in whole or in part, and may disclose to any prospective or actual purchaser any and all information Commission has or acquires concerning Guarantor and/or this Guaranty. 10. Counsel Fees and Costs. The prevailing party shall be entitled to reasonable attorneys' fees (including the allocated costs of Commission's in-house counsel and legal staff), and all other costs and expenses which it may incur in connection with the enforcement or preservation of its rights under, or defense of, this Guaranty or in connection with any other dispute or proceeding relating to this Guaranty, whether or not incurred in any Insolvency Proceeding, arbitration, litigation or other proceeding. 11. Integration/Severability/Amendments. This Guaranty is intended by Guarantor and Commission as the complete, final expression of their agreement concerning its subject matter. It supersedes all prior understandings or agreements with respect thereto and may be changed only by a writing signed by Guarantor and Commission. No course of dealing, or parole or extrinsic evidence shall be used to modify or supplement the express terms of this Guaranty. If any provision of this Guaranty is found to be illegal, invalid or unenforceable, such provision shall be enforced to the maximum extent permitted, but if fully unenforceable, such provision shall be severable, and this Guaranty shall be construed as if such provision had never been a part of this Guaranty and the remaining provisions shall continue in full force and effect. 12. Notice. Any notice given by any party under this Guaranty shall be effective only upon its receipt by the other party and only if (a) given in writing and (b) personally delivered or sent by United States mail, postage prepaid, and addressed to Commission or Guarantor at their respective addresses for notices indicated below. Guarantor and Commission may change the place to which notices, requests, and other communications are to be sent to them by giving written notice of such change to the other. 13. California Law. This Guaranty shall be governed by and construed according to the laws of California, and Guarantor submits to the nonexclusive jurisdiction of the state or federal courts in California. 14. Subordinate Obligation. Notwithstanding anything contained in this Guaranty to the contrary, Commission acknowledges and agrees that this Guaranty is subject and subordinate to a prior and superior guaranty made by Guarantor in favor of MUFG Union Bank, N.A., a national banking association. 15. Termination. This Guaranty shall terminate and be of no further force or effect upon completion of the Construction and payment of all costs thereof. [INTENTIONALLY LEFT BLANK] Page 3 Executed as of October 19, 2016. Guarantor acknowledges having received a copy of this Guaranty and having made each waiver contained in this Guaranty with full knowledge of its consequences. Address for notices sent to Commission: National City Housing Commission 303 East "B" Street National City, California 91764 Attn: Executive Director "GUARANTOR" THE RELATED COMPANIES, L.P., a New York limited partnership By: The Related Realty Group, Inc., a Delaware corporation Its: General Partner By: Michael J. ,Fenner, EVP and CFO Address for notices sent to Guarantor: The Related Companies, L.P. 60 Columbus Circle New York, New York 10023 Attn: Michael J. Brenner Page 4 ASSIGNMENT OF ARCHITECTURAL AGREEMENTS AND PLANS AND SPECIFICATIONS [Paradise Creek Apartments Project/Phase II] FOR VALUE RECEIVED, the undersigned, PARADISE CREEK II HOUSING PARTNERS, L.P., a California limited partnership ("Developer"), assigns to COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY, a public body, corporate and politic ("Commission"), all of its right, title and interest in and to: 1. All architectural, design, engineering and development agreements, and any and all amendments, modifications, supplements, addenda and general conditions thereto (collectively, "Architectural Agreements"), and 2. All plans and specifications, shop drawings, working drawings, amendments, modifications, changes, supplements, general conditions and addenda thereto (collectively, "Plans and Specifications"), heretofore or hereafter entered into or prepared by any architect, engineer or other person or entity (collectively, "Architect"), for or on behalf of Developer in connection with the construction of the Improvements on the Real Property described on Exhibit "A" attached hereto. The Plans and Specifications, as of the date hereof, are those which Developer has heretofore, or will hereafter deliver to Commission. The Architectural Agreements include, but are not limited to, the architectural agreement or contract between Developer and Pyatock Architects, Inc., dated November 30, 2011, and that certain Consultant Contract between Developer and Pyatock Architects, Inc., dated August 10, 2015. This ASSIGNMENT OF ARCHITECTURAL AGREEMENTS AND PLANS AND SPECIFICATIONS ("Assignment") constitutes a present, absolute and unconditional assignment to Commission. Developer acknowledges that by accepting this Assignment, Commission does not assume any of Developer's obligations under the Architectural Agreements with respect to the Plans and Specifications. Developer represents and warrants to Commission that: (a) all Architectural Agreements entered into by Developer are in full force and effect and are enforceable in accordance with their terms and no default, or event which would constitute a default after notice or the passage of time, or both, exists with respect to said Architectural Agreements; (b) all copies of the Architectural Agreements and Plans and Specifications delivered to Commission are complete and correct; and (c) Developer has not assigned any of its rights under the Architectural Agreements or with respect to the Plans and Specifications other than to [insert Construction Lender], which assignment shall be senior and superior to the assignment contemplated hereby in all respects. This Assignment shall be governed by the laws of the State of California, except to the extent that federal laws preempt the laws of the State of California, and Developer consents to the jurisdiction of any federal or state court within the State of California having proper venue for the filing and maintenance of any action arising hereunder and agrees that the prevailing Page 1 party in any such action shall be entitled, in addition to any other recovery, to reasonable attorneys' fees and costs. This Assignment shall be binding upon and inure to the benefit of the heirs, legal representatives, assigns, and successors -in -interest of Developer and Commission. The attached Architect's/Engineer's Consent and Exhibit "A" are incorporated by reference. Executed by Developer as of November 1, 2016. "Developer" PARADISE CREEK II HOUSING PARTNERS, L.P., a California limited partnership By: RELATED/PARADISE CREEK II DEVELOPMENT CO., LLC, a California limited liability company its Administrative General Partner By: Frank Cardone, President By: CHW PARADISE CREEK II DEVELOPMENT CO., LLC, a California limited liability company its Managing General Partner By: COMMUNITY HOUSINGWORKS, a California nonprofit public benefit corporation its Managing Member By: ilson, Senior Vice President Page 2 ARCHITECT'S/ENGINEER'S CONSENT [Paradise Creek Apartments Project/Phase II] The undersigned architect and/or engineer (collectively referred to as "Architect") hereby consents to the foregoing Assignment to which this Architect's/Engineer's Consent ("Consent") is a part, and acknowledges that there presently exists no unpaid claims due to the Architect arising out of the preparation and delivery of the Plans and Specifications to Developer and/or the performance of the Architect's obligations under the Architectural Agreements described in the Assignment. Architect agrees that, by virtue of the foregoing Assignment, Commission has succeeded to all. of Developer's right, title and interest in, to and under the Architectural Agreements and the Plans and Specifications and, therefore, so long as the Architect continues to receive the compensation called for under the Architectural Agreements, Commission and its successors and assigns may, at their option, use and rely on the Plans and Specifications for the purposes for which they were prepared, and Architect will continue to perform its obligations under the Architectural Agreements for the benefit and account of Commission and its successors and assigns in the same manner as if performed for the benefit or account of Developer in the absence of the Assignment. Architect warrants and presents that it/he has no knowledge of any prior assignment(s) of any interest in either the Plans and Specifications and/or the Architectural Agreements. Except as otherwise defined herein, the terms used herein shall have the meanings given them in the Assignment. Executed as of November 1, 2016. Pyatock Architects, Inc. Page 3 EXHIBIT "A" PROPERTY DESCRIPTION That certain real property situated in the City of National City, County of San Diego, State of California, described as follows: