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EXHIBIT 10(m)
CONSTRUCTION LOAN AGREEMENT
DATE: March 22, 1996
PARTIES: MONTEREY MANAGEMENT, INC., an Arizona corporation ("MMI"),
MONTEREY MANAGEMENT TUCSON, INC., an Arizona corporation ("MMT"),
and MONTEREY HOMES CORPORATION, an Arizona corporation, dba
Monterey Homes ("MHC") MMI, MMT and MHC are jointly and
severally referred to herein as "Borrower."
NATIONAL BANK OF ARIZONA, a national banking association ("Bank")
RECITALS:
Pursuant to the Option Agreement and Escrow Instructions between
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Company, Inc., a California corporation ("Optionor"), and MMI
dated November 9, 1994 (the "Parcel F Option Agreement"), Borrower is acquiring
Lots 309 through 364 of The Lakes at Castle Rock, according to the Plat recorded
in Book 47 of Maps, Page 49, official records of Pima County (the "Parcel F
Lots"), which subdivision is located in the vicinity of Tanque Verde Road and
Woodland Drive in Tucson, Arizona.
Pursuant to the Option Agreement and Escrow Instructions between
Optionor and MMI dated November 9, 1994 (the "Parcel G Option Agreement") (the
Parcel F Option Agreement and the Parcel G Option Agreement are sometimes
referred to herein collectively as the "Option Agreements"), the Borrower is
acquiring Lots 243 through 308 of The Lakes at Castle Rock, (the "Parcel G
Lots"). The Parcel F Lots and the Parcel G Lots are sometimes referred to
collectively herein as the "Lots," or individually as a "Lot."
Borrower desires to obtain from Bank a $5,500,000.00 revolving line of
credit to finance the acquisition costs of the Lots pursuant to the Option
Agreements and the construction of presold homes and a maximum of two (2) not
pre-sold, i.e., "spec" homes ("Homes"), in each of Parcel F and Parcel G,
totalling not more than four (4) spec homes.
Borrower also desires to obtain from Bank a $514,165.00 line of credit
to finance the construction of four model homes on Lots 360 through 363 in
Parcel F; and a $563,283.00 line of credit to finance the construction of three
model homes on Lots 305 through 307 in Parcel G.
Bank is willing to establish for Borrower the credit facilities
described above (the "Loans"), but only on the terms and conditions set forth
herein.
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Now, therefore, in consideration of the mutual covenants and agreements
herein contained, the parties agree as follows:
AGREEMENTS:
1. REVOLVING LINE OF CREDIT.
a. Subject to the terms and conditions of this Agreement, Bank
will establish for Borrower a revolving line of credit (the "RLC") against which
Bank will make advances not to exceed the sum of $5,500,000.00 in the aggregate
at any one time outstanding.
b. The RLC shall be evidenced by a promissory note in a form
prepared and approved by Bank (the "RLC Note"). Interest on the principal amount
outstanding under the RLC shall be charged at a rate equal to three quarters of
one percent (3/4%) in excess of the prime rate of interest as the same is
published in the western edition of the Wall Street Journal. The interest rate
shall be adjusted as of the close of business of any day during which the prime
rate of interest is changed. When a range of rates has been published, the
higher of the rates will be used. If the prime rate becomes unavailable during
the term of this Loan, Bank may designate a substitute index after notice to
Borrower. Bank will advise Borrower of the current prime rate upon Borrower's
request. Borrower understands that Bank may make loans based on other rates as
well. Interest on the Note shall be computed for the actual number of days that
principal is outstanding, on the basis of a 360 day year. Interest under the RLC
shall be due and payable monthly. All unpaid principal and interest shall be due
and payable in full on the date twenty-four (24) months following the date of
the RLC Note (the "RLC Maturity Date"). Borrower shall be entitled to postpone
the Maturity Date upon written notice to Lender prior to the Maturity Date one
(1) time for an additional six (6) months to the date thirty (30) months
following the date of the RLC Note.
c. Borrower agrees to pay to Bank a commitment fee for each Home
to be constructed in an amount equal to: one percent (1%) of the Estimated Loan
Value available under the RLC to construct such Home as provided in Section 3.1
hereof if such Home is a spec Home; and one-half of one percent (1/2%) of the
Estimated Loan Value available under the RLC to construct such Home as provided
in Section 3.1 hereof if such Home is pre-sold. Such fee shall be payable at the
same time as the initial disbursement under the RLC for such Home and may be
paid out of the RLC.
d. Advances under the RLC shall be used to finance the
construction of Homes on the Lots. All disbursements under the RLC shall be made
in accordance with Section 3 hereof. For each Home, Bank shall record in
Borrower's revolving loan account on the books of Bank all advances made by Bank
to Borrower on the RLC, all charges, expenses, and other items properly
chargeable to Borrower, all payments made by Borrower and any other appropriate
debits and credits. The debit balance of Borrower's revolving loan account shall
reflect for each Home the amount of Borrower's indebtedness from time to time
under the RLC for such Home.
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e. Upon Bank's demand from time to time, Borrower shall give to
Bank a list of all contractors, subcontractors and material suppliers who will
be supplying labor and materials for the construction of Homes.
f. All advances for construction of a spec Home shall be repaid
to Bank not later than 12 months from the date of the initial advance under the
RLC with respect to such spec Home. All advances for pre-sold Homes shall be
repaid to Bank not later than 7 months from the date of the initial advance
under the RLC with respect to such pre-sold Home; provided, however, such 7
month period may be extended only one time for an additional 5 months (resulting
in a total term for such advance of 12 months) upon notification by Borrower,
accompanied by an additional commitment fee of one quarter of one percent (1/4%)
received by Bank prior to the expiration of the initial 7 month period. In any
event, all advances for construction of Homes shall be repaid to Bank not later
than the Maturity Date.
2. PURPOSES OF THE RLC.
The RLC proceeds shall be used to finance the construction of pre-sold
Homes and not more than a total of four (4) spec Homes on the Lots, with not
more than two (2) spec Homes on Parcel F and not more than two (2) spec Homes on
Parcel G. Bank will advance such amounts with respect to the construction of
such Homes not to exceed the limits described in Section 3.1 hereof.
3. DISBURSEMENT OF THE RLC.
a. Borrower may request advances under the RLC from time to
time. Bank will lend Borrower such amounts as Borrower may request within a
reasonable time after such request upon the express conditions that: (a) all
such action shall have been taken and documents shall have been executed and
delivered which are or may be necessary to perfect or to continue the perfection
of Bank's liens and security interests including, without limitation, execution
and delivery of Lender's standard form Deed of Trust and UCC-1 financing
statements for the Lot on which the Home is to be built and collateral
assignments of the Borrower's rights under the Option Agreements in form and
substance acceptable to Bank in its sole and absolute discretion; (b) there
shall exist no Event of Default or event which with the giving of notice or the
passage of time or both, would be an Event of Default hereunder; (c) the total
debit balance of Borrower's RLC, after reflecting any advances requested, shall
not exceed the amounts set forth in Section 1.1; (d) advances under the RLC for
each Home do not exceed the lesser of (i) 80% of the appraised value of such
pre-sold Home as it is to be constructed as shown in an appraisal report
obtained at Borrower's expense and satisfactory in all respects to Bank in its
sole discretion, or 75% of the appraised value of such spec Home as it is to be
constructed as shown in an appraisal report obtained at Borrower's expense and
satisfactory in all respects to Bank in its sole discretion, as applicable, (ii)
80% of the gross sales price of such pre-sold Home, (iii) the Estimated Loan
Value attributed to the particular model for such Home as set forth in Exhibit
A, attached hereto, or (iv) 100% of the actual cost of constructing the Home in
accordance with the plans and specifications and cost breakdown; and (e) the
requested advance meets the additional requirements set forth below.
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b. Any requests by Borrower for an initial advance under the RLC
for any given pre-sold Home shall be accompanied by the following, in form and
substance satisfactory to Bank and at Borrower's expense: (i) a copy of an
arms-length sales contract for full and fair consideration and for which
Borrower shall have collected ▇▇▇▇▇▇▇ money with respect to the pre-sold Home on
which an advance is requested; (ii) a copy of a permanent loan pre-qualification
letter with respect to the pre-sold Home; (iii) Lender's standard form Deed of
Trust and UCC-1 financing statements for the Lot on which the Home is to be
built; (iv) a preliminary title report or bringdown endorsement on the affected
Lot insuring Bank's first lien position under the RLC; (v) a breakdown of actual
costs for the construction of the pre-sold Home; (vi) a copy of the plans and
specifications to be used in construction; and (vii) an appraisal for the
pre-sold Home. No material changes in the plans and specifications, estimated
construction costs, permanent lender commitment or title condition of the Lot
shall be agreed to by Borrower without Bank's prior written consent.
c. Any requests by Borrower for an initial advance under the RLC
for any given spec Home shall be accompanied by the following, in form and
substance satisfactory to Bank and at Borrower's expense: (i) Lender's standard
form Deed of Trust and UCC-I financing statements for the Lot on which the Home
is to be built; (ii) a preliminary title report or bringdown endorsement on the
affected Lot insuring Bank's first lien position under the RLC; (iii) a
breakdown of actual costs for the construction of the Home; (iv) a copy of the
plans and specifications to be used in construction; and (v) an appraisal for
the Home. No material changes in the plans and specifications, estimated
construction costs or title condition of the Lot shall be agreed to by Borrower
without Bank's prior written consent.
d. Advances with respect to each Home shall be made first to
allow Borrower to pay the RLC Commitment Fee in connection with such Home and
the advance to acquire the affected Lot pursuant to the applicable Option
Agreement. Loan funds for construction of said Home shall be advanced on
approved inspection by Bank when the following stages have been completed:
(1) Five percent (5%) First Advance: Permits obtained,
site laid out, trenching completed and rebar in place, footings poured.
(2) Ten percent (10%) Second Advance: Stem walls poured.
(3) Fifteen percent (15%) Third Advance: Underground set
and soil backfilled.
(4) Twenty percent (20%) Fourth Advance: ABC in place
and graded, copper plumbing in place, floor slabs poured and set.
(5) Twenty-five percent (25%) Fifth Advance: Lumber and
trusses on site.
(6) Thirty percent (30%) Sixth Advance: Framing and
rough carpentry complete.
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(7) Thirty-five percent (35%) Seventh Advance: Rough
plumbing, HVAC and electric complete.
(8) Forty percent (40%) Eighth Advance: Rough Inspection
complete and passed, roof dry, windows and sliding doors set in place.
(9) Forty-five percent (45%) Ninth Advance: Stucco lath
insulation installed.
(10) Fifty percent (50%) Tenth Advance: Stucco first
coat applied, drywall stock on site.
(11) Fifty-five percent (55%) Eleventh Advance: Drywall
hung and taped.
(12) Sixty percent (60%) Twelfth Advance: Drywall joints
floated, stucco finish coat applied.
(13) Sixty-five percent (65%) Thirteenth Advance:
Interior walls sanded, dry wall textured.
(14) Seventy percent (70%) Fourteenth Advance: Doors and
trim on site, exterior paint complete.
(15) Seventy-five percent (75%) Fifteenth Advance: Trim
carpentry complete, interior paint complete.
(16) Eighty percent (80%) Sixteenth Advance: Cabinets on
site, roof complete.
(17) Eighty-five percent (85%) Seventeenth Advance:
Cabinets installed, countertops set.
(18) Ninety percent (90%) Eighteenth Advance: Interior
hardware, plumbing, electrical, HVAC and trim is complete.
(19) Ninety-five percent (95%) Nineteenth Advance:
Pre-cleaning complete, appliances are installed.
(20) One Hundred percent (100%), or the balance of the
Loan as provided in Section 3.1 hereof, whichever is less when all work has been
completed, including floor coverings are installed, final cleaning is complete
and all city inspections are complete and approved and provide the Bank with the
final city inspection and termite certificate.
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Notwithstanding anything contained herein to the contrary, prior to any
advances for construction or advances to reimburse Borrower for previously
incurred construction costs, Borrower shall permit Bank and Bank's inspector to
make an inspection of the Home to be completed in order to determine the
percentage of such completion and the amount to be advanced.
e. Each request for an advance under the RLC Note shall be in
writing on a form satisfactory to Bank. Each such request shall be made at least
five (5) days prior to the date on which the advance is required, and shall be
accompanied by evidence in form and substance satisfactory to Bank (including
but not limited to certificates and affidavits of Borrower, and reports of
Bank's inspector as required by Bank) showing: (a) percentage of completion or
stage of completion as set forth in Section 3.3 above; (b) that all outstanding
claims due for labor, materials, fixtures and equipment have been paid, except
claims contested in good faith by Borrower; (c) that there are no recorded liens
outstanding against the real property except the Bank's liens, those liens
approved in writing by Bank, and except liens bonded over in accordance with
A.R.S. Section 33-1004; (d) that Borrower has complied with all of Borrower's
obligations under this Agreement; (e) that all construction prior to the date of
the request for an advance has been accomplished in accordance with the plans
and specifications; (f) that all funds previously disbursed have been properly
applied to the costs of construction; (g) if requested by Bank, copies of all
bills or statements of expenses for which the advance is requested; (h) that all
change orders which require the approval of Bank shall have been approved in
writing by Bank; and (i) that the amount of the undisbursed loan proceeds is
sufficient to pay the cost of completing construction in accordance with the
plans and specifications.
f. If at any time during the course of construction of a Home,
Bank determines that the undisbursed loan funds available for such construction
plus the items prepaid by Borrower and not reimbursed by Bank are insufficient
to pay the remaining costs of construction, Bank may, at its option, either (i)
cause Borrower to deposit the amount of such deficiency in an account with Bank
to be used to pay such costs; or (ii) cause Borrower to expend such funds as are
necessary to make up such deficiency and Borrower shall furnish the Bank with
satisfactory proof of any such expenditures.
g. Bank reserves the right, in its discretion, to defer, reduce
or decline payment of any item when in Bank's reasonable judgment the payment is
not justified by the value of the work in place or if such item is not covered
by the cost breakdowns referred to herein.
h. If requested by Bank, Borrower shall furnish statements from
each contractor, subcontractor and supplier:
(1) Stating the amount of its contract and the amount
paid to date;
(2) Acknowledging full payment less retainer for all
work done and materials supplied; and
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(3) Waiving any mechanic's or material-man's lien on the
Property for work done to the date of disbursement, payment for which is covered
by that or prior disbursements, and waiving any lien on equipment purchased.
i. At no time and in no event shall Bank be obligated to
disburse funds for construction:
(1) In excess of the amount recommended by Bank's
Inspector;
(2) If Bank is unsatisfied with the progress of
construction;
(3) If in the sole opinion of Bank the estimated
remaining costs of construction in accordance with the plans and specifications
exceeds the remaining undisbursed portion of loan proceeds for such construction
and Borrower fails to make up such deficiency in accordance with Section 3.6;
(4) If the improvements shall have been damaged by fire
or other casualty and Bank shall not have received insurance proceeds or other
cash funds from Borrower sufficient in the sole judgment of Bank to effect the
restoration of the improvements in accordance with the plans and specifications
prior to the maturity of the RLC Note;
(5) If Bank's Deed of Trust covering the Lot and Home
under construction for which the draw is requested shall not be in a first lien
position; or
(6) If any Event of Default hereunder shall have
occurred or any event which with the giving of notice or passage of time, or
both, would constitute an Event of Default hereunder shall have occurred.
j. At its option, Bank may make any or all advances directly to
Borrower, or to Borrower's subcontractors or material suppliers, or jointly to
the Borrower and any subcontractor or material supplier, and the execution of
this Agreement by Borrower shall, and hereby does, constitute an irrevocable
authorization to so advance the funds. No further direction or authorization
from Borrower shall be necessary to warrant such direct advances and all such
advances shall satisfy pro tanto the obligations of Bank hereunder and shall be
covered and secured by the Deed of Trust as fully as if made only to Borrower,
regardless of the disposition thereof by such person. Bank, at its option, may
pay suppliers of all furniture, fixtures and equipment directly.
k. No advance of loan proceeds hereunder shall constitute a
waiver of any of the conditions to any further advances nor, in the event
Borrower is unable to satisfy any such condition, shall any such waiver have the
effect of precluding Bank from thereafter declaring such inability to be an
Event of Default.
l. Borrower acknowledges that any inspections or any
examinations made by Bank, or lien waivers, receipts or other instruments
obtained by Bank, are made or obtained
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solely for Bank's benefit and not in any way for the benefit or protection of
Borrower or any third party.
m. Borrower shall permit Bank and its representatives and agents to
enter upon any Lot and to inspect the construction of the Home and all materials
to be used in the construction thereof and to cause Borrower's contractors and
subcontractors to cooperate with Bank during such inspections. If required by
Bank, Borrower shall pay Bank the applicable inspection fee for each inspection.
Borrower agrees that the Bank has no obligation in carrying out or supervising
the construction program. Bank, in its discretion, may waive any inspection or
the furnishing of lien waivers or receipts or other proof of payment or any
other condition to a disbursement and make disbursements of the loans solely
upon the statements and recommendations of Borrower, and such waiver shall not
constitute a waiver of any of the conditions to any later disbursements.
n. Borrower shall diligently pursue construction of all Homes to
completion in accordance herewith and with the plans and specifications
delivered to Bank and in full compliance with all construction, use, building,
zoning and other similar requirements of any governmental authority. The
Borrower covenants that all Homes will be constructed and completed free and
clear of all liens, claims or assessments against the Lots except Bank's liens.
Borrower agrees that construction of each Home shall be completed within the
applicable time periods for repayment of advances specified in Section 1.6. In
the event Borrower's buyer defaults under the purchase agreement during the
construction of any pre-sold Home, Borrower shall notify the Bank immediately of
such event and immediately market such Home for sale. Borrower agrees that so
long as any loan under this Agreement may be outstanding, Borrower will borrow
no other funds, directly or indirectly, for the purpose of construction on the
Lots nor cause any lien other than Bank's to be placed against the Lots.
Borrower will not allow any Home buyers to take possession of any Home or part
thereof, until Bank's lien upon such Home and Lot is paid in full, and the Lot
has been released from the lien of the Deed of Trust.
4. MODEL LOANS.
a. Subject to the terms and conditions of this Agreement, Bank will
establish for Borrower two (2) lines of credit against which Bank will make
advances not to exceed the sums of $514,165.00 (the "Parcel F Model Loan") and
$563,283.00 (the "Parcel G Model Loan") for the purpose of constructing the
permitted model homes. The Parcel F Model Loan and the Parcel G Model Loan are
referred to herein collectively as the "Model Loans." The proceeds of the Parcel
F Model Loan shall be used for the purpose of constructing model homes on four
(4) of the Parcel F Lots. The proceeds of the Parcel G Model Loan shall be used
for the purpose of constructing model homes on three (3) of the Parcel G Lots.
The RLC and the Model Loans are sometimes referred to herein as the "Loans."
b. The Parcel F Model Loan shall be evidenced by a Promissory Note
(the "Parcel F Model Note") of even date herewith in the face amount of
$514,165.00 payable in accordance with the terms thereof. The Parcel G Model
Loan shall be evidenced by a Promissory Note (the "Parcel G Model Note") of even
date herewith in the face amount of $563,283.00 payable in accordance with the
terms thereof. The Parcel F Model Note and the
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Parcel G Model Note are referred to herein collectively as the "Model Notes."
Interest on the principal amount outstanding under the Model Loans shall be
charged at an annual rate equal to three-quarters percent (3/4%) in excess of
the prime rate of interest as the same is published in the western edition of
the Wall Street Journal. The interest rate shall be adjusted as of the close of
business during any day during which the prime rate of interest has changed.
When a range of rates has been published, the higher of the rates will be used.
If the prime rate becomes unavailable during the term of this Loan, Bank may
designate a substitute index after notice to Borrower. Bank will advise Borrower
of the current prime rate upon Borrower's request. Borrower understands that
Bank may make loans based on other rates as well. Interest on the Note shall be
computed for the actual number of days that principal is outstanding, on the
basis of a 360 day year. Interest under the Model Loans shall be due and payable
monthly. All unpaid principal and interest shall be due and payable in full on
the date twelve (12) months following the date of the Model Notes (the "Model
Maturity Date"). Provided Borrower is not in default, Borrower may elect to
extend the Model Maturity Date of either or both of the Model Notes one time for
an additional six (6) months by giving Bank written notice ten (10) days prior
to the then Model Maturity Date. The RLC Note and the Model Notes are sometimes
referred to herein as the "Notes."
5. MODEL LOAN COMMITMENT FEES: EXTENSION FEE(S).
Borrower shall pay to Bank a commitment fee and service charge for the
making and servicing of the Model Loans in the amount of $5,141.65 for the
Parcel F Model Loan and in the amount of $5,632.83 for the Parcel G Model Loan
(collectively, the "Model Commitment Fees") which shall be fully earned and
non-refundable upon payment. The Model Commitment Fees are due and payable upon
the execution hereof out of the proceeds of the respective Model Loans. If
Borrower elects to extend the Model Maturity Date for either or both of the
Model Notes, Borrower shall pay to Bank an extension fee and service charge for
extending the Model Maturity Date in the amount of one-half of one percent of
the face amount of the applicable Model Note or Notes so extended, less any
principal balance thereof which has been repaid (the "Model Maturity Extension
Fee(s)"). The Model Maturity Extension Fee(s) is (are) due and payable by
Borrower upon the Borrower's providing to Bank written notice of its election to
extend the Model Maturity Date(s), which shall be fully earned and
non-refundable upon payment.
6. PURPOSES OF THE MODEL LOANS.
Advances under the Model Loans shall be used only for the payment of the
costs and expenses to allow Borrower to pay the respective Model Commitment Fees
and to build model homes (the "Permitted Model Homes") as follows: The proceeds
of the Parcel F Model Loans shall be used for the purpose of building four (4)
model homes on four (4) of the Parcel F Lots. The proceeds of the Parcel G Model
Loan shall be used for the purpose of building three (3) model homes on three
(3) of the Parcel G Lots.
7. DISBURSEMENT OF THE MODEL LOANS.
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a. Bank shall make an advance for the benefit of the Borrower to pay
the Model Commitment Fees.
b. Advances for construction of the Permitted Model Homes shall be
made in the same manner as advances are to be made under the RLC; provided;
however, that advances under the Model Loan for construction of each Permitted
Model Home shall not exceed the lesser of (i) 75% of the appraised value of
such Permitted Model Home as it is to be constructed as shown in an appraisal
report obtained at Borrower's expense and satisfactory in all respects to Bank
in its sole discretion, (ii) the Estimated Loan Value (less the price paid to
acquire the Lot on which the model home is located pursuant to the applicable
Option Agreement) attributed to the particular model for such Permitted Model
Home as set forth in Exhibit "B," attached hereto, or (iii) 100% of the actual
cost of constructing the Permitted Model Home in accordance with the plans and
specifications and cost breakdown (less the price paid to acquire the Lot on
which the Permitted Model Home is located pursuant to the applicable Option
Agreement).
8. SECURITY.
a. As security for the payment of the Loans, and all other
liabilities and obligations of Borrower to Bank, now existing or hereafter
created, Borrower shall execute and deliver to Lender for recording Lender's
standard form Deed of Trust and UCC-1 financing statements. The Deeds of Trust
shall be and remain a first and prior lien on the Lots on which any Homes or
Permitted Model Homes are to be constructed with proceeds of the Loans, and all
fixtures and attachments of and to the structures now or hereafter on the Lots
and those to be erected thereon, and shall assign all leases and rents and
purchase agreements on the Lots to Bank, all subject only to those exceptions
set forth in Section 10 hereof. Borrower shall also execute and deliver to Bank
collateral assignments of Borrower's rights under the Option Agreements in form
and substance acceptable to Bank in its sole and absolute discretion.
b. Borrower shall execute and deliver to Bank from time to time upon
the request of Bank, such financing statements or other documents reasonably
required by Bank to perfect or continue Bank's liens and security interest
described herein.
9. GUARANTIES.
Borrower shall cause its obligations to pay and perform under the Loans to
at all times be fully guaranteed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a married man dealing with
his sole and separate property, and by ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, husband
and wife (the "Guarantors"). Guarantors shall execute and deliver to Bank its
form of continuing guaranties relating to the Loans (the "Guaranties").
10. TITLE INSURANCE.
Borrower, at its cost and expense, shall cause the Title Company to issue
to Bank at the time of each initial disbursement under the RLC or a Model Loan
an ALTA Extended Coverage Mortgage Title Insurance Policy in the amount of total
advances, to be made in connection with
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the acquisition of the Lot and the construction of the Home or Permitted Model
Home, with Number 3R and 5 Endorsements, insuring the Deed of Trust to be
recorded against the applicable Lot in Bank's favor to be a valid first lien and
encumbrance on the applicable Lot subject only to the matters approved by Bank
and listed as exceptions therein.
11. RELEASES OF DEEDS OF TRUST.
So long as no Event of Default has occurred, and there shall not have
occurred any event which with the giving of notice or the passage of time, or
both, would constitute an Event of Default hereunder, Bank shall release the
lien of the Deed of Trust for each Lot with a Home or Permitted Model Home
thereon upon the sale thereof and payment to Bank in cash of the sum equal to
all advances made to Borrower under the RLC or Model Loan, as the case may be,
relating to the acquisition of the applicable Lot and the construction of the
Home or Permitted Model Home and applicable Lot to be released, all as shown on
Borrower's loan account (the "Release Price"). Payments of interest under the
Notes shall not be applied toward the Release Price of any Lot from the lien of
the applicable Deed of Trust.
12. INSURANCE.
a. With respect to each Lot then encumbered by a Deed of Trust,
Borrower shall obtain the following insurance, together with such other
insurance or evidence of insurance as Bank may reasonably require:
(1) Insurance against loss or damage by fire, lightning and
other casualties, with a uniform standard extended coverage endorsement, such
insurance to be in an amount not less than the full replacement value of the
completed improvements, exclusive of footings and foundations, as determined by
a recognized appraiser or insurer selected by the Borrower and approved by Bank.
During the construction period, such policy shall be written in the so-called
"Builder's Risk Completed Value Non-Reporting Form" and shall contain a
provision granting the insured permission to complete and/or occupy.
(2) Insurance protecting the Borrower and Bank against loss or
losses from liability imposed by law or assumed in any written contract and
arising from personal injury, including bodily injury or death, or a limit of
liability of not less than $500,000.00 (combined single limit for personal
injury, including bodily injury or death, and property damage) and a blanket
excess liability policy in an amount not less than $1,000,000.00 protecting the
Borrower and Bank against any loss or liability or damage for personal injury,
including bodily injury or death, or property damage.
(3) A policy of flood insurance in the maximum amount
available with respect to the Project under the Flood Disaster Protection Act of
1973, as amended. This requirement will be waived upon presentation of evidence
satisfactory to Bank that no portion of any Lot is located within an area
identified by the U.S. Department of Housing and Urban Development as having
special flood hazards.
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(4) Upon completion of any Home or Permitted Model Home,
insurance on such Home or Permitted Model Home insuring against loss by fire and
other hazards and casualties as are now included in "extended coverage" policies
in an amount equal to the maximum insurable value of the improvements. The
policy shall at all times have attached thereto the standard non-contributory
mortgagee clause with loss payable to Bank.
b. With regard to each policy of insurance required to be maintained
by Borrower pursuant to Section 12. 1, Borrower shall deliver to Bank certified
copies of such policies, together with appropriate endorsements thereto,
evidence of payment of premiums thereon and written agreement of the insurer or
insurers therein to give Bank 30 days' prior written notice of intention to
cancel. All insurance shall be carried in responsible insurance companies which
shall have been approved by Bank and which shall be rated not less than A, class
XV or better in Best's Key Rating Guide.
c. Borrower shall cooperate with Bank in obtaining for Bank the
benefits of any insurance or other proceeds lawfully or equitably payable to it
in connection with the Loans and the collection of any indebtedness or
obligation of Borrower to Bank incurred hereunder (including the payment by
Borrower of the expense of an independent appraisal on behalf of Bank in case of
a fire or other casualty affecting any Lot, Home or Permitted Model Home).
13. CONDITIONS PRECEDENT.
Bank's obligation to make each advance hereunder is contingent upon each
of the following occurrences in addition to the other terms and conditions
contained herein (provided Bank may waive any such occurrence for an advance
without such waiver constituting a waiver of such occurrence for any later
advance):
(1) All of Bank's liens and security interests securing the
Loans shall have been validly perfected;
(2) Receipt of the title insurance policy (or policies)
described above;
(3) Receipt of updated appraisals acceptable to Bank for each
Home or Permitted Model Home, as appropriate; and
(4) Receipt of such documentation as Bank may reasonably
require, including, without limitation, the Guaranties, the Deeds of Trust,
Notes, a permanent lender commitment letter, and purchase contracts for such
Home, all in form and substance satisfactory to Bank.
14. COVENANTS AND WARRANTIES.
Borrower represents, warrants and agrees as follows:
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12
(1) All information given to Bank in order to support
Borrower's loan request, and all information set forth in any financial
statements given by Borrower, and Guarantors to Bank, is true, correct and
complete;
(2) MMI, MMT and MHC are and will continue to be corporations
duly organized and validly existing under the laws of the State of Arizona;
(3) Borrower has full power to enter into this Agreement and
to perform all obligations herein contained and contemplated;
(4) This Agreement, the Notes, the Deeds of Trust, and all
other documents executed by Borrower in favor of Bank (i) are and will be in all
respects legal, valid, and binding, (ii) are enforceable against Borrower
according to their terms, and (iii) will grant to Bank a direct, valid and
enforceable first lien upon the Lots;
(5) The consummation of the transactions hereby contemplated
and the performance of the obligations of the Borrower hereunder and by virtue
of the Loans and the Deeds of Trust will not result in any breach of, or
constitute a default under any mortgage, deed of trust, lease, loan or credit
agreement, articles of incorporation, bylaws or other instrument to which
Borrower is a party or by which it may be bound or affected;
(6) There are no actions, suits or proceedings pending, or to
the knowledge of Borrower threatened, against or affecting it or the Guarantors,
or involving the validity or enforceability of the Loans or the Deeds of Trust,
or the priority of the liens thereof, at law or in equity, or before or by any
governmental authority, and Borrower is not in default with respect to any
order, writ, injunction or decree of any court or any governmental authority;
(7) All financial statements provided and to be provided
hereunder have been and shall be prepared in accordance with generally accepted
accounting principles consistently applied. Borrower warrants and represents as
to each such financial statement that it fairly presents the financial condition
of Borrower and that since the date of such financial statement there has been
no material adverse change in the financial condition of Borrower. Bank or its
agents shall have the right without hindrance or delay to inspect, check, audit
and make extracts from Borrower's books, records and accounts including without
limitation all journals, orders, receipts and any correspondence and other data
relating to the books, records and accounts. Bank, or any persons designated by
it, shall have the right to make such verifications concerning Borrower's
businesses as Bank may consider reasonable under the circumstances;
(8) All utility services are available on the Lots, and
Borrower has obtained all necessary permits and permissions required from all
governmental and other authorities for access to and use of such services in
connection with the construction of Homes and the Permitted Model Homes;
(9) There is no delinquent tax or delinquent assessment
respecting any Lot;
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(10) All applicable requirements of local, Arizona, and
federal law relating to the subdivision involved and the sale of homes therein
have been complied with, or will be complied with at the time such compliance is
required by law;
(11) There are no restrictions or zoning regulations which
will restrict or prevent the proposed construction on and use of the Lots;
(12) The plans and specifications for the Homes and Permitted
Model Homes to be constructed on the Lots which Borrower delivers to Bank
hereunder shall be true and correct copies of the plans and specifications used
in construction, and Borrower hereby certifies that said plans and
specifications are identical to those used in preparation of the appraisal
reports referred to above;
(13) Borrower has received no notice of and to the best of its
knowledge there is no violation of any law, municipal ordinance or order, or any
requirement of the State of Arizona, or any municipal department or governmental
authority, which violation relates to or affects the Lots or the Homes and
Permitted Model Homes to be constructed thereon;
(14) All building permits required for construction of Homes
and Permitted Model Homes in accordance with the plans and specifications will
be or have been obtained, and copies of such building permits will be delivered
promptly to Bank if requested;
(15) At all times following their acquisition by Borrower
pursuant to the Option Agreements, Borrower will continue to be the lawful owner
of each such Lot, except for sales made in the ordinary course of business for a
full and fair consideration. Borrower will not create or suffer to exist any
mortgage, pledge, lien, charge, encumbrance or security interest in or upon any
Lot upon which a Deed of Trust has been recorded except for Bank's liens;
(16) Within 30 days following the end of the relevant quarter,
Borrower shall furnish Bank with Borrower's quarterly compiled financial
statements prepared on an accrual basis in accordance with generally accepted
accounting principles and work in progress reports furnished to Bank (within 30
days following the end of the relevant quarter,) and prepared by a certified
public accountant or internally prepared and signed by either ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
or ▇▇▇▇▇ ▇▇▇▇▇▇ as officers of Borrower. Such statements shall consist of a
balance sheet and profit and loss statement in such reasonable detail as Bank
may request. Borrower shall furnish Bank with Borrower's annual audited
financial statements within 90 days after the end of Borrower's fiscal year
prepared by a certified public accountant acceptable to Bank and on an accrual
basis in accordance with generally accepted accounting principles; Borrower
further authorizes Bank to discuss such financial statements with Borrower's
CPA;
(17) All financial statements delivered to Bank by the
Guarantors fairly represent the financial condition of the Guarantors at the
times and for the periods therein stated; and since the date of these financial
statements, there has been no material change in the financial condition or any
other status of any Guarantor. Within 30 days following Borrower's fiscal year
end, Borrower shall cause each Guarantor to provide its financial statement to
Bank, in form satisfactory to Bank, and all such statements shall indicate all
assets held in trust.
-14-
14
Guarantors shall further provide Bank with personal income tax returns and
schedules, signed and dated, within 30 days of the required filing dates;
(18) Borrower has filed all tax returns and reports required
by law to be filed and all taxes, fees, assessments, and other governmental
charges upon Borrower or upon any of its properties or income that are due and
payable have been paid; Within 30 days from the required filing date, Borrower
shall provide Bank with copies of all federal and state income tax returns and
schedules signed and dated by an Officer of Borrower;
(19) MHC is and will at all times continue to be in compliance
with all covenants contained in the Indenture and all other documents relating
to the $8,000,000.00 in Senior Subordinated Notes issued by MHC on October 11,
1994.
(20) Upon request from Bank, at least quarterly, Borrower
shall certify in writing to Bank that it is in compliance with the warranties
and covenants contained herein;
(21) Borrower will immediately inform Bank in writing of any
litigation threatened or instituted which might have a material adverse affect
upon any Lot or the financial condition of Borrower or Guarantors and, at Bank's
request, will furnish to Bank a summary of all such litigation;
(22) Borrower will promptly inform Bank of the occurrence of
any Event of Default or event which with the giving of notice or passage of time
or both would be an Event of Default hereunder; and
(23) Each of the warranties made by Borrower herein shall be
considered to have been made again as of the time Borrower delivers to Bank a
request for an advance under the Loans or Bank makes an advance pursuant to this
Agreement.
15. Construction Costs and Inspections.
a. Borrower will give Bank immediate notice of: (i) any and all
proposed significant changes in construction costs by means of the contractors
submitting to Bank's Inspector a change order log which shall include all
current and pending change orders; (ii) all proposed significant changes in
major subcontractors or major suppliers; (iii) all proposed significant
structural changes or changes material to the Home or Permitted Model Home
plans, and (iv) any and all significant proposed changes in the amounts of any
other items in any Home or Permitted Model Home budget. No such changes shall be
made by Borrower without the prior written consent of Bank. Amounts not drawn
under any one line item on any budget may be added to another line item on such
budget with prior written consent of Bank as follows: In the event there are
Bank approved costs in excess of the amount shown in the Home or Permitted Model
Home budget in any cost category described therein, and there are funds
available in any other cost category (for which the work is completed and fully
paid) in an amount sufficient to pay such excess costs, then Bank may authorize
a transfer of funds out of the cost category containing such excess and into the
cost category that is exceeding its Home or Permitted Model Home budget amount.
Upon the completion of all work relating to any
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specific cost category, any amount remaining undisbursed under such cost
category shall be transferred out of such cost category and into the applicable
contingency cost category. Any changes which result in an increase in the Model
budget or Permitted Model Home budget shall be paid for by Borrower.
b. Bank is authorized to contract with such persons or agencies as
Bank may choose in its discretion ("Bank's Inspector") for the purpose of
reviewing the Home or Permitted Model Home plans, performing inspections of the
Homes or Permitted Model Home, and monitoring the progress of construction of
the same, which inspection shall be made with such frequency as Bank shall
determine in the reasonable exercise of its discretion.
c. Borrower shall permit Bank's Inspector and Bank's representatives
and agents to enter upon the Lots and approved off-site storage areas to inspect
the improvements in the Homes or Permitted Model Home and all materials to be
used in the construction thereof. Any inspections or determinations made by
Bank's Inspector or Bank or instruments obtained by Bank, are made or obtained
solely for the benefit of Bank and its successors and assigns, and not in any
way for the benefit or protection of Borrower. Borrower shall pay all fees of
Bank's (third party) Inspector promptly when billed for the same by Bank.
16. EVENTS OF DEFAULT.
Any of the following shall be an Event of Default hereunder:
(1) If Borrower shall fail to pay any principal or interest
under the Notes within ten (10) days after notice to Borrower by Bank;
(2) If any warranty or representation herein contained shall
prove to be untrue;
(3) If Borrower breaches any of its agreements contained
herein not otherwise described in this Section 16;
(4) If the construction work is abandoned or stopped for a
continuous period of 15 days, and not to exceed 30 days in the aggregate,
(except for a temporary stoppage due to a strike, shortage or unavailability of
materials, adverse weather conditions or an act of God);
(5) If any of the Homes or Permitted Model Home shall be
materially damaged or destroyed by fire or other casualty, provided, however,
that it shall not be an Event of Default if Bank receives insurance proceeds or
cash funds from Borrower sufficient to repair or restore the improvements, the
improvements can be repaired or restored and fully completed, and Borrower
expeditiously proceeds to so repair or restore;
(6) The commencement of any case under the United States
Bankruptcy Code, or the commencement of any other bankruptcy, arrangement,
reorganization, insolvency, receivership, custodianship, or similar proceeding
under any state or federal law by
-16-
16
or against Borrower, or any Guarantor (provided it shall not be an Event of
Default hereunder if such entity or person obtains dismissal of any involuntary
proceeding within sixty (60) days of the date of filing thereof); or if
Borrower, or any Guarantor is generally not paying its or their debts as they
become due;
(7) If a mechanic's or materialmen's lien is filed against a
Lot and Borrower does not contest in good faith the assertion of such a lien and
immediately record and serve a surety bond pursuant to A.R.S. Section 33-1004;
(8) If any judgment should be entered in any suit or legal
action materially affecting any Lot, Borrower, or any Guarantor, which is not
promptly satisfied or bonded over in a manner satisfactory to Bank pending
appeal;
(9) If Borrower's business is discontinued or suspended for
any reason or if Borrower's existence is dissolved or terminated;
(10) If Borrower or any Guarantor defaults on any other loan
it may have with Bank;
(11) If Borrower is unable to satisfy any condition to its
right to a disbursement hereunder after demand is made by Bank;
(12) If any action, rule, law or decision of any legislative
or administrative body or of any court should materially impair or materially
and adversely affect the enforceability of the loan documents;
(13) If there is a material adverse change in Borrower's or
any Guarantor's financial condition, or if the collateral becomes unsatisfactory
in character or value, or if Bank shall reasonably deem itself insecure.
17. REMEDIES OF BANK.
a. Upon the occurrence of any Event of Default, Bank may at its
option and without further notice do one or more of the following:
(1) Withhold making any further advances hereunder and under
the Notes, it being agreed that Bank may also take such action upon the
occurrence of an event which would be an Event of Default except for any notice
and cure provisions set forth above;
(2) Declare the amount of the loan proceeds then advanced
under the Loans and the Notes, together with all costs and expenses, immediately
due and payable;
(3) Take possession of any real property encumbered by any of
the Bank's Deeds of Trust through agents, employ security watchmen, and cause
the Homes and the Permitted Model Homes to be completed in whole or in part at
the expense of Borrower using
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the remaining loan proceeds under the Notes for such purpose and charging any
additional expense to Borrower, which sums shall be secured by the Deeds of
Trust;
(4) Foreclose the Deeds of Trust or cause the exercise of the
power of sale granted therein, and exercise any rights and remedies given to
Bank in all other documents securing the Loans;
(5) Apply any remaining Loan funds to the direct payment of
bills, claims or liens of laborers or materialmen which Bank in its judgment
believes to be valid;
(6) File suit for any sums owing or for damages; and
(7) Take such other action as is allowed by law and exercise
any rights in any manner it may deem necessary to protect its interest.
b. Any and all remedies conferred upon Bank shall be deemed
cumulative with, and nonexclusive of any other remedy conferred hereby or by
law, and Bank in the exercise of any one remedy shall not be precluded from the
exercise of any other.
18. FIXTURES.
Borrower agrees that all items of fixtures and all items of property which
might be determined to be fixtures as defined in the Uniform Commercial Code and
the laws of the State of Arizona, will be fully paid promptly after installation
and billing by such subcontractor, and no one has or will have a security
interest therein.
19. ATTORNEYS' FEES AND EXPENSES.
a. Borrower shall pay all costs of closing the Loans and all
expenses of Bank with respect thereto, including, but not limited to, inspection
fees, legal fees (including legal fees incurred by Bank subsequent to the
closing of the Loans in connection with the disbursement, administration,
collection or satisfaction of the Loans) advances, recording expense, surveys,
taxes, expenses of foreclosure (including reasonable attorneys' fees) and
similar items. Said attorneys' fees and costs may, at Bank's option, be deducted
from the disbursements of Loan proceeds in any manner deemed appropriate by
Bank.
b. In addition to any liability Borrower may have under Arizona
Revised Statutes Section 12-341.01, Borrower shall pay Bank's attorneys' fees
and costs incurred in the collection of any indebtedness hereunder, or in
enforcing this Agreement, whether or not suit is brought, and any attorneys'
fees and costs incurred by Bank in any proceeding under the United States
Bankruptcy Code in order to collect any indebtedness hereunder or to preserve,
protect or realize upon any security for such indebtedness.
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20. MISCELLANEOUS.
a. This Agreement is made solely between Borrower and Bank, and no
other person shall have any right of action hereunder. The loan proceeds are not
a fund held for the benefit of laborers, materialmen or others. The parties
expressly agree that no person shall be a third party beneficiary to this
Agreement.
b. Bank may waive any of the requirements made of Borrower herein,
and any such waiver shall not constitute a waiver of any of the other
requirements made of Borrower hereunder. The failure of Bank to exercise any
right with respect to the declaration of any default shall not be deemed or
construed to constitute a waiver by Bank of such default or to preclude Bank
from exercising any right with respect to such default at a later date or with
respect to any subsequent default by Borrower.
c. Except as otherwise expressly provided herein, Borrower agrees
that there is no obligation or commitment on the part of Bank to renew the Loans
or to make any additional loans to Borrower.
d. Borrower agrees to and shall indemnify Bank from any liability,
claims or losses resulting from the disbursement of loan proceeds, or from the
condition of the real property whether related to hazardous waste on the
Property, the quality of construction or otherwise, and whether arising before,
during or after the term of the Loans. This provision shall survive the
repayment of the Loans and shall continue in full force and effect as long as
the possibility of such liability, claims or losses exist.
e. This Agreement and the rights, duties and obligations of the
parties hereto shall be governed by and construed in accordance with the laws of
the State of Arizona. Borrower hereby agrees that any suit or proceeding in
connection herewith may be brought in the State of Arizona and Borrower
irrevocably submits to jurisdiction in any court in such State.
f. Time is of the essence hereof.
g. This Agreement shall inure and be binding on the parties hereto,
and their respective successors and assigns; provided, however, that neither
this Agreement nor any rights or obligations hereunder shall be assignable by
Borrower without the prior express written consent of Bank, and any purported
assignment made in contravention hereof shall be void.
h. Any communications between the parties hereto or notices provided
herein to be given may be given by mailing the same by United States certified
or registered mail, return receipt requested, postage pre-paid, addressed as
follows, or to such other address as either party may in writing hereafter
indicate:
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If to Borrower:
MONTEREY MANAGEMENT, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Bank:
National Bank of Arizona
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Any such notice shall be deemed received for purposes of this Agreement
forty-eight (48) hours after dispatch.
21. ARBITRATION DISCLOSURES.
a. ARBITRATION IS USUALLY FINAL AND BINDING ON THE PARTIES AND
SUBJECT TO ONLY VERY LIMITED REVIEW BY A COURT.
b. THE PARTIES ARE WAIVING THEIR RIGHT TO LITIGATE IN COURT,
INCLUDING THEIR RIGHT TO A JURY TRIAL.
c. PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED AND DIFFERENT
FROM COURT PROCEEDINGS.
d. ARBITRATORS' AWARDS ARE NOT REQUIRED TO INCLUDE FACTUAL FINDINGS
OR LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF
RULINGS BY ARBITRATORS IS STRICTLY LIMITED.
e. A PANEL OF ARBITRATORS MIGHT INCLUDE AN ARBITRATOR WHO IS OR WAS
AFFILIATED WITH THE BANKING INDUSTRY.
22. ARBITRATION PROVISIONS.
a. Any controversy or claim between or among the parties, including
but not limited to those arising out of or relating to this Agreement or any
agreements or instruments relating hereto or delivered in connection herewith,
and including but not limited to a claim based on or arising from an alleged
tort, shall at the request of any party be determined by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitration proceedings shall be conducted in Phoenix, Arizona.
The arbitrator(s) shall have the qualifications set forth in subparagraph 22.3
hereto. All statutes of
-20-
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limitations which would otherwise be applicable in a judicial action brought by
a party shall apply to any arbitration or reference proceeding hereunder.
b. In any judicial action or proceeding arising out of or relating
to this Agreement or any agreements or instruments relating hereto or delivered
in connection herewith, including but not limited to a claim based on or arising
from an alleged tort, if the controversy or claim is not submitted to
arbitration as provided and limited in subparagraph 22.1 hereto, all decisions
of fact and law shall be determined by a reference in accordance with Rule 53 of
the Federal Rules of Civil Procedure or Rule 53 of the Arizona Rules of Civil
Procedure or other comparable, applicable reference procedure. The parties shall
designate to the court the referee(s) selected under the auspices of the
American Arbitration Association in the same manner as arbitrators are selected
in Association sponsored arbitration proceedings. The referee(s) shall have the
qualifications set forth in subparagraph 22.3 hereto.
c. The arbitrator(s) or referee(s) shall be selected in accordance
with the rules of the American Arbitration Association from panels maintained by
the Association. A single arbitrator or referee shall be knowledgeable in the
subject matter of the dispute. Where three arbitrators or referees conduct an
arbitration or reference proceeding, the claim shall be decided by a majority
vote of the three arbitrators or referees, at least one of whom must be
knowledgeable in the subject matter of the dispute and at least one of whom must
be a practicing attorney. The arbitrator(s) or referee(s) shall award recovery
of all costs and fees (including attorneys' fees, administrative fees,
arbitrator's fees, and court costs). The arbitrator(s) or referee(s) also may
grant provisional or ancillary remedies such as, for example, injunctive relief,
attachment, or the appointment of a receiver, either during the pendency of the
arbitration or reference proceeding or as part of the arbitration or reference
award.
d. Judgment upon an arbitration or reference award may be entered in
any court having jurisdiction, subject to the following limitation: the
arbitration or reference award is binding upon the parties only if the amount
does not exceed Four Million Dollars ($4,000,000.00); if the award exceeds that
limit, either party may commence legal action for a court trial de novo. Such
legal action must be filed within thirty (30) days following the date of the
arbitration or reference award; if such legal action is not filed within that
time period, the amount of the arbitration or reference award shall be binding.
The computation of the total amount of an arbitration or reference award shall
include amounts awarded for arbitration fees, attorneys' fees, interest and
other related costs.
e. At the Lender's option, foreclosure under a deed of trust or
mortgage may be accomplished either by exercise of a power of sale under the
deed of trust or mortgage or by judicial foreclosure. The institution and
maintenance of an action for judicial relief or pursuit of a provisional or
ancillary remedy shall not constitute a waiver of the right of any party,
including the plaintiff, to submit the controversy or claim to arbitration if
any other party contests such action for judicial relief.
f. Notwithstanding the applicability of other law to any other
provision of this Agreement, the Federal Arbitration Act, 9 U.S.C. 1 et seq.,
shall apply to the construction and interpretation of this arbitration
paragraph.
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21
In witness whereof, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
MONTEREY MANAGEMENT, INC., an Arizona
corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: President
--------------------------------------
MONTEREY MANAGEMENT-TUCSON, INC.,
an Arizona corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: President
--------------------------------------
MONTEREY HOMES CORPORATION, an Arizona
corporation, dba Monterey Homes
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: President
--------------------------------------
"Borrower"
NATIONAL BANK OF ARIZONA, a national
banking association
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------------
Its: V.P.
--------------------------------------
"Bank"
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22
LIST OF EXHIBITS
Exhibit "A" - Estimated Loan Value-Homes (Section 3)
Exhibit "B" - Estimated Loan Value-Permitted Model Homes (Section 7.2)
-23-
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EXHIBIT "A"
Estimated Loan Value-Homes
9311 $166,128.00
9312 173,135.00
9313 178,361.00
9314 224,020.00
9316 220,059.00
9521 114,093.00
9522 121,174.00
9523 131,554.00
9525 141,054.00
9526 146,012.00
24
EXHIBIT "B"
Estimated Loan Value-Permitted Model Homes
9311 $166,128.00
9312 173,135.00
9314 224,020.00
9521 114,391.00
9522 121,489.00
9523 131,896.00
9526 146,389.00
