1
EXHIBIT 10(l)
CONSTRUCTION LOAN AGREEMENT
DATE: December 5, 1995
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:
Borrower has obtained from Bank a term loan to finance the acquisition
costs of forty-six (46) improved lots (the "Lots") within the subdivision known
as The Lakes of Castle Rock located at Tanque Verde and Woodland Drive, Tucson,
Arizona, (the "Property") described on the attached Exhibit "A."
Borrower desires to obtain from Bank a line of credit to finance the
construction of two model homes (the "Model Homes") on Lots ___ and ___, The
Lakes of Castle Rock; and (iii) a revolving line of credit to finance the
construction of pre-sold, and a maximum of two (2) not presold, i.e., "spec,"
single family homes ("Homes") thereon.
Bank is willing to establish for Borrower the two additional credit
facilities described above in conjunction with the Acquisition Loan (the
"Loans"), but only on the terms and conditions set forth herein.
Now, therefore, in consideration of the mutual covenants and agreements
herein contained, the parties agree as follows:
AGREEMENTS:
1. ACQUISITION LOAN.
1. 1. Subject to the terms and conditions contained in the
Acquisition Loan Documents (as hereinafter defined) Bank has advanced to
Borrower the sum of $1,977,500.00, for the acquisition of the Property (the
"Acquisition Loan").
1.2. The Acquisition Loan is evidenced by a Promissory Note,
(the "Acquisition Note") dated June 2, 1995 in the amount of $1,977,500.00
payable in accordance with the terms thereof. The Acquisition Loan is also
subject to the terms of the Business Loan Agreement
2
between Borrower and Lender, dated as of June 2, 1995 (the "Acquisition Loan
Agreement") and secured by the Deed of Trust dated June 2, 1995, recorded June
7, 1995, at Docket No. 10059, Page 1521, official records of Pima County,
Arizona (the "Deed of Trust"). All other documents executed in connection with
or otherwise securing or relating to the Acquisition Loan are hereinafter
referred to as the "Acquisition Loan Documents."
2. REVOLVING LINE OF CREDIT.
2.1. 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 $3,000,000.00 in the aggregate
at any one time outstanding.
2.2. 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 one percent (1%)
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.
2.3. 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
4.1 hereof if such Home is a spec Home; and three-quarters of one percent (3/4%)
of the Estimated Loan Value available under the RLC to construct such Home as
provided in Section 4.1 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.
2.4. Advances under the RLC shall be used to finance the
construction of Homes on the Property. All disbursements under the RLC shall be
made in accordance with Section 4 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.
-2-
3
letter with respect to the pre-sold Home; (iii) a preliminary title report or
bringdown endorsement on the affected Lot insuring Bank's first lien position
under the RLC; (iv) a breakdown of actual costs for the construction of the
pre-sold Home; (v) a copy of the plans and specifications to be used in
construction; and (vi) 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
4.3. 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) a preliminary
title report or bringdown endorsement on the affected Lot insuring Bank's first
lien position under the RLC; (ii) a breakdown of actual costs for the
construction of the Home; (iii) a copy of the plans and specifications to be
used in construction; and (iv) 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.
4.4. 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
any applicable advance to pay down the Acquisition Loan relative to the affected
Lot, but such Lot shall not be released from the lien of the Deed of Trust as a
result of such paydown. Loan funds for construction of said Home shall be
advanced on approved inspection by Bank when the following stages have been
completed:
(a) Five percent (5%) First Advance: Permits obtained,
site laid out, trenching completed and rebar in place, footings poured.
(b) Ten percent (10%) Second Advance: Stem walls poured.
(c) Fifteen percent (15%) Third Advance: Underground set
and soil backfilled.
(d) Twenty percent (20%) Fourth Advance: ABC in place
and graded, copper plumbing in place, floor slabs poured and set.
(e) Twenty-five percent (25%) Fifth Advance: Lumber and
trusses on site.
(f) Thirty percent (30%) Sixth Advance: Framing and
rough carpentry complete.
(g) Thirty-five percent (35%) Seventh Advance: Rough
plumbing, HVAC and electric complete.
(h) Forty percent (40%) Eighth Advance: Rough Inspection
complete and passed, roof dry, windows and sliding doors set in place.
-4-
4
2.5. 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.
2.6. 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.
3. 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 two (2) spec Homes on the Property. Bank will
advance such amounts with respect to the construction of such Homes not to
exceed the limits described in Section 4.1 hereof.
4. DISBURSEMENT OF THE RLC.
4.1. 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; (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 2.1; (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
B, 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.
4.2. 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
-3-
5
(i) Forty-five percent (45%) Ninth Advance: Stucco lath
insulation installed.
(j) Fifty percent (50%) Tenth Advance: Stucco first coat
applied, drywall stock on site.
(k) Fifty-five percent (55%) Eleventh Advance: Drywall
hung and taped.
(l) Sixty percent (60%) Twelfth Advance: Drywall joints
floated, stucco finish coat applied.
(m) Sixty-five percent (65%) Thirteenth Advance:
Interior walls sanded, dry wall textured.
(n) Seventy percent (70%) Fourteenth Advance: Doors and
trim on site, exterior paint complete.
(o) Seventy-five percent (75%) Fifteenth Advance: Trim
carpentry complete, interior paint complete.
(p) Eighty percent (80%) Sixteenth Advance: Cabinets on
site, roof complete.
(q) Eighty-five percent(85%) Seventeenth Advance:
Cabinets installed, countertops set.
(r) Ninety percent (90%) Eighteenth Advance: Interior
hardware, plumbing, electrical, HVAC and trim is complete.
(s) Ninety-five percent (95%) Nineteenth Advance:
Pre-cleaning complete, appliances are installed.
(t) One Hundred percent (100%), or the balance of the
Loan as provided in Section 4.1 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.
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.
-5-
6
4.5. 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 4.3 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.
4.6. 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.
4.7. 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.
4.8. If requested by Bank, Borrower shall furnish statements
from each contractor, subcontractor and supplier:
(a) Stating the amount of its contract and the amount
paid to date;
(b) Acknowledging full payment less retainer for all
work done and materials supplied; and
(c) 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.
4.9. At no time and in no event shall Bank be obligated to
disburse funds for construction:
-6-
7
(a) In excess of the amount recommended by Bank's
Inspector;
(b) If Bank is unsatisfied with the progress of
construction;
(c) 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 4.6;
(d) 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;
(e) 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
(f) 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.
4.10. 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.
4.11. 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.
4.12. 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 solely for Bank's benefit and not in
any way for the benefit or protection of Borrower or any third party.
4.13. 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
-7-
8
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.
4.14. 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 2.6. 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.
5. Model Loan.
5.1. Subject to the terms and conditions of this Agreement,
Bank will establish for Borrower a line of credit against which Bank will make
advances not to exceed the sum of $485,000.00 for the purposes of constructing
two model homes (the "Model Loan"). The Acquisition Loan, RLC and Model Loan are
sometimes referred to herein as the "Loans."
5.2. The Model Loan shall be evidenced by a Promissory Note (the
"Model Note") of even date herewith in the face amount of $485,000.00 payable in
accordance with the terms thereof. Interest on the principal amount outstanding
under the Model Loan shall be charged at an annual rate equal to 1% 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 Loan 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 Note (the "Model
Maturity Date"). Provided Borrower is not in default, Borrower may elect to
extend the Model Maturity Date one time for an additional six (6) months by
giving Bank written notice ten (10) days prior to the then Model Maturity Date.
The Acquisition Note, RLC Note and Model Note are sometimes referred to herein
as the "Notes".
-8-
9
6. MODEL LOAN COMMITMENT FEE: EXTENSION FEE.
Borrower shall pay to Bank a commitment fee and service charge for the
making and servicing of the Model Loan in the amount of $4,850.00 (the "Model
Commitment Fee") which shall be fully earned and non-refundable upon payment.
The Model Commitment Fee is due and payable upon the execution hereof out of
Model Loan proceeds. If Borrower elects to extend the Model Maturity Date,
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 Model Note less any principal balance thereof which has been repaid (the
"Model Maturity Extension Fee"). The Model Maturity Extension Fee is due and
payable by Borrower upon the Borrower's providing to Bank written notice of its
election to extend the Model Maturity Date, which shall be fully earned and
non-refundable upon payment.
7. PURPOSES OF THE MODEL LOAN.
Advances under the Model Loan shall be used only for the payment of the
costs and expenses to allow Borrower to construct two Model Homes and pay the
Model Commitment Fee.
8. DISBURSEMENT OF THE MODEL LOAN.
8.1. Bank shall make an advance for the benefit of the Borrower
to pay the Model Commitment Fee.
8.2. Advances for construction of the 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 each Model Home shall not exceed the
lesser of (i) 75% of the appraised value of such 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 Lot release price) attributed to the particular model for
such Model Home as set forth in Exhibit "C," attached hereto, or (iii) 100% of
the actual cost of constructing the Model Home in accordance with the plans and
specifications and cost breakdown (less any amount attributable to the Lot
release from the Acquisition Loan).
9. SECURITY.
9.1. 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 modify the Deed of Trust pursuant to Bank's form to
secure the payment and performance of the RLC and the Model Loan, as well as the
Acquisition Loan. The Deed of Trust shall be and remain a first and prior lien
on the Property, and all fixtures and attachments of and to the buildings now or
hereafter on the Property and those to be erected thereon, and shall assign all
leases and rents and purchase agreements on the Property to Bank, all subject
only to those exceptions set forth in Section 11 hereof.
-9-
10
9.2. 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.
10. 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 modifications to
the existing continuing guaranties relating to the Acquisition Loan (the
"Guaranties") so as to have them also guaranty the RLC and the Model Loan.
11. TITLE INSURANCE.
Borrower, at its cost and expense, shall cause the Title Company to
issue to Bank at the time of the first disbursement on the RLC or the Model Loan
an endorsement to the ALTA Extended Coverage Mortgage Title Insurance Policy,
with Number 3R and 5 Endorsements, insuring the Deed of Trust, to increase such
Policy's coverage amount by $3,485,000.00 insuring the Deed of Trust in Bank's
favor to be a valid first lien and encumbrance on the Property subject only to
the matters listed as exceptions therein.
12. RELEASES OF THE DEED 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 thereon upon the sale thereof
and payment to Bank in cash of the sum equal to $56,500.00 (so long as the
Acquisition Loan remains unpaid with regard to the applicable Lot) plus all
advances made to Borrower under the RLC or Model Loan, as the case may be,
relating to such Home and Lot to be released, all as shown on Borrower's loan
account (the "Release Price"). Once the Acquisition Loan is paid in full, the
Release Price for each Lot with Home thereon shall equal the sum of all advances
made to Borrower under the RLC or Model Loan, as the case may be, relating to
such Home and Lot to be released, all as shown on Borrower's loan account.
Payments of interest under the Notes shall not be applied toward the Release
Price of any Lot from the lien of the Deed of Trust.
13. INSURANCE.
13.1. Borrower shall obtain the following insurance, together
with such other insurance or evidence of insurance as Bank may reasonably
require:
(a) 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
-l0-
11
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.
(b) 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.
(c) 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.
(d) Upon completion of any Home, insurance on such 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.
13.2. With regard to each policy of insurance required to be
maintained by Borrower pursuant to Section 13.1, 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.
13.3. 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 or Home).
14. 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):
-11-
12
(a) All of Bank's liens and security interests securing
the Loans shall have been validly perfected;
(b) Receipt of the title insurance policy (or policies)
described above;
(c) Receipt of updated appraisals acceptable to Bank for
the Improvements and each Home: and
(d) Receipt of such documentation as Bank may reasonably
require, including, without limitation, the Guaranties, Notes, a permanent
lender commitment letter, and purchase contracts for such Home, all in form and
substance satisfactory to Bank.
15. COVENANTS AND WARRANTIES.
Borrower represents, warrants and agrees as follows:
(a) 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;
(b) MM, MMT and MHC are and will continue to be
corporations duly organized and validly existing under the laws of the State of
Arizona;
(c) Borrower has full power to enter into this Agreement
and to perform all obligations herein contained and contemplated;
(d) This Agreement, the Notes, the Deed 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 Property;
(e) 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 Deed 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;
(f) 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 Deed
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;
(g) 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
-12-
13
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;
(h) All utility services will be 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 development;
(i) There is no delinquent tax or delinquent assessment
respecting any Lot;
(j) 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;
(k) There are no restrictions or zoning regulations
which will restrict or prevent the proposed construction on and use of the Lots;
(l) The plans and specifications for the 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;
(m) 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 to be constructed thereon;
(n) All building permits required for construction of
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;
(o) Borrower is and will at all times continue to be the
lawful owner of each 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 except for Bank's liens;
(p) 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 genera1ly
accepted accounting principles and work in progress reports furnished to Bank
(within 30 days following the end of the relevant quarter,) and
-13-
14
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;
(q) 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 Borrowers 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. Guarantors shall further provide Bank with personal income
tax returns and schedules, signed and dated, within 30 days of the required
filing dates;
(r) 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,
(s) 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.
(t) 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;
(u) 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;
(v) 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
(w) 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.
-14-
15
16. CONSTRUCTION COSTS AND INSPECTIONS.
16. 1. 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 plans, and (iv)
any and all significant proposed changes in the amounts of any other items in
any Home or Model 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 Model 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 Model budget amount. Upon the completion of all work relating to any
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 any Home budget shall be paid for by Borrower.
16.2. 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 plans, performing inspections of the Homes and
Model Homes, 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.
16.3. Borrower shall permit Bank's Inspector and Bank's
representatives and agents to enter upon the Property and approved off-site
storage areas to inspect the improvements in the Homes 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.
17. EVENTS OF DEFAULT.
Any of the following shall be an Event of Default hereunder.
(a) If Borrower shall fail to pay any principal or
interest under the Notes within ten (10) days after notice to Borrower by Bank;
(b) If any warranty or representation herein contained
shall prove to be untrue;
-15-
16
(c) If Borrower breaches any of its agreements contained
herein not otherwise described in this Section 17;
(d) 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);
(e) If any of the Homes 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;
(f) The commencement of any case under the Bankruptcy
Code, Title 11 of 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 or
against Borrower, or any Guarantor (provided it shall not be an Event of Default
hereunder if such entity 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 debts as they become due;
(g) 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;
(h) 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;
(i) If Borrower's business is discontinued or suspended
for any reason or if Borrower's existence is dissolved or terminated;
(j) If Borrower or any Guarantor defaults on any other
loan it may have with Bank;
(k) If Borrower is unable to satisfy any condition to
its right to a disbursement hereunder after demand is made by Bank,
(l) 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;
(m) 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.
-16-
17
18. REMEDIES OF BANK.
18. 1. Upon the occurrence of any Event of Default, Bank may at
its option and without further notice do one or more of the following:
(a) 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;
(b) 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;
(c) 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 to be completed in whole or in part at the expense of Borrower
using the remaining loan proceeds under the Notes for such purpose and charging
any additional expense to Borrower, which sums shall be secured by the Deed of
Trust;
(d) Foreclose the Deed 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;
(e) 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;
(f) File suit for any sums owing or for damages; and
(g) Take such other action as is allowed by law and
exercise any rights in any manner it may deem necessary to protect its interest.
18.2. 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.
19. 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.
20. ATTORNEYS' FEES AND EXPENSES.
20. 1. 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,
-17-
18
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.
20.2. 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.
21. MISCELLANEOUS.
21.1. 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.
21.2. 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.
21.3. 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.
21.4. 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.
21.5. 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.
21.6. TIME IS OF THE ESSENCE HEREOF.
21.7. 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
-18-
19
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.
21.8. 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:
If to Borrower:
MONTEREY MANAGEMENT, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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.
22. ARBITRATION DISCLOSURES.
22.1. ARBITRATION IS USUALLY FINAL AND BINDING ON THE PARTIES
AND SUBJECT TO ONLY VERY LIMITED REVIEW BY A COURT.
22.2. THE PARTIES ARE WAIVING THEIR RIGHT TO LITIGATE IN COURT,
INCLUDING THEIR RIGHT TO A JURY TRIAL.
22.3. PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED AND
DIFFERENT FROM COURT PROCEEDINGS.
22.4. 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.
22.5. A PANEL OF ARBITRATORS MIGHT INCLUDE AN ARBITRATOR WHO IS
OR WAS AFFILIATED WITH THE BANKING INDUSTRY.
-19-
20
23. ARBITRATION PROVISIONS.
23.1. 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 23.3
hereto. All statutes of limitations which would otherwise be applicable in a
judicial action brought by a party shall apply to any arbitration or reference
proceeding hereunder.
23.2. 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 23.1 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 23.3 hereto.
23.3. 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.
23.4. 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.
-20-
21
23.5. 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.
23.6. 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.
-21-
22
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: Vice President
-------------------------
MONTEREY MANAGEMENT-TUCSON, INC.,
an Arizona corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Its: Vice President
-------------------------
MONTEREY HOMES CORPORATION, an Arizona
corporation, dba Monterey Homes
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Its: Vice President
-------------------------
"Borrower"
NATIONAL BANK OF ARIZONA, a national
banking association
By:
---------------------------
Its:
--------------------------
"Bank"
-22-
23
LIST OF EXHIBITS
Exhibit "A" - Legal Description of the Property (First Recital)
Exhibit "B" - Estimated Loan Value-Homes (Section 4)
Exhibit "C" - Estimated Loan Value-Models (Section 8.2)
-23-
24
EXHIBIT "A"
No. 153544
PARCEL 1:
Lots 1, 2, 4, 6 through 21, 23 through 40, and 44 through 46, 48 through 51, 53
and 54, of THE LAKES AT CASTLE ROCK, according to the plat of record in the
office of the County Recorder of Pima County, Arizona, recorded in Book 34, of
Maps, Page 44.
EXCEPTING therefrom that portion of Lots 2, 3, 9 thru 14, and 17, THE LAKES AT
CASTLE ROCK, Lots 1 thru 67 & Common Area "A" & "B", according to the plat
thereof as recorded in Book 34 of Maps and Plats at Page 44, Records of Pima
County, Arizona, lying West of the following described line:
Commencing at the Southwest corner of said Lot 17;
Thence North 89 degrees 53 minutes 44 seconds East along the Southerly line of
said Lot 17 a distance of 30.82 feet, to the Point of Beginning;
Thence North 00 degrees 14 minutes 51 seconds West 384.87 feet;
Thence North 85 degrees 36 minutes 02 seconds East 5.41 feet;
Thence North 00 degrees 27 minutes 49 seconds East 295.96 feet;
Thence South 89 degrees 11 minutes 40 seconds West 8.11 feet;
Thence North 00 degrees 01 minutes 37 seconds West 177.05 feet;
Thence North 00 degrees 01 minutes 00 seconds East 146.07 feet;
Thence North 89 degrees 40 minutes 06 seconds East 8.68 feet;
Thence North 00 degrees 18 minutes 56 seconds West 23.43 feet;
Thence North 87 degrees 13 minutes 54 seconds West 8.69 feet;
Thence North 00 degrees 06 minutes 10 seconds West 160.50 feet to
the Northerly line of said Lot 9;
Thence North 00 degrees 13 minutes 05 seconds West 402.83 feet to
the Southerly line of said Lot 3;
Thence North 00 degrees 03 minutes 33 seconds West 494.71 feet to the Northerly
line of said ▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇.
-2-
25
No. 153544
PARCEL 2:
That portion of land lying in the Abandoned Right of Way, as described in Docket
6808, Page 833, Records of Pima County, Arizona, lying West of the following
described line:
Commencing at the Southeast corner of ▇▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, Lots 1
thru 67 & Common Area "A" & "B" according to the plat recorded in Book 34 of
Maps and Plats at Page 44, Records of Pima County, Arizona;
Thence North 89 degrees 43 minutes 51 seconds East 3.75 feet, to the Point of
Beginning of the herein described parcel;
Thence North 00 degrees 09 minutes 32 seconds West 241.87 feet;
Thence North 00 degrees 15 minutes 16 seconds West 395.24 feet;
Thence North 00 degrees 15 minutes 04 seconds West 284.21 feet;
Thence North 00 degrees 16 minutes 40 seconds West 206.66 feet;
Thence North 00 degrees 15 minutes 02 seconds West 293.49 feet to the Point of
Terminus.
PARCEL 3:
All that part of Lot 1 of PALOMITA ▇▇▇▇▇▇ as recorded in Book 46 of Maps and
Plats at page 18 in the Pima County Recorder's office, Pima County, Arizona
lying Easterly of the Southerly extension of the Westerly line of ▇▇▇ ▇ ▇▇ ▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ as recorded in Book 34 of Maps and Plats at page 44 said
Pima County Recorder's office and Northerly of the following described line;
Commencing at the Northeast corner of said Lot 1;
Thence South 00 degrees 06 minutes 16 seconds East along the East line of said
Lot 1 a distance of 6.69 feet to the Point of Beginning;
Thence South 88 degrees 11 minutes 12 seconds West, to a point on the said
Southerly extension of the Westerly line of said ▇▇▇ ▇.
-▇-
▇▇
▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ 4:
All that part of Lot 2 of PALOMITA ▇▇▇▇▇▇ as recorded in Book 46 of Maps and
Plats at Page 18 in the Pima County Recorder's Office, Pima County, Arizona
lying Westerly of the Southerly extension of the Easterly line of ▇▇▇ ▇ ▇▇ ▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ as recorded in Book 34 of Maps and Plats at Page 44 said
Pima County Recorder's Office and Northerly of the following described line;
Commencing at the Southwest corner of said Lot 4;
Thence South 13 degrees 55 minutes 33 seconds West along the Southerly extension
of the West line of said Lot 4 a distance of 7.94 feet to the Point of
Beginning;
Thence North 88 degrees 10 minutes 33 seconds East, to a point on the said
Southerly extension of the Easterly line of said Lot 4.
PARCEL 5:
A portion of the Northwest quarter of the Southeast quarter of Section 34,
Township 13 South, Range 15 East, Gila and Salt River Base and Meridian, Pima
County, Arizona, being a portion of the Unsubdivided parcel lying adjacent to
▇▇▇▇ ▇-▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, a subdivision recorded in the Pima County
Recorder's Office in Book 34 of Maps and Plats at Page 44, Pima County, Arizona,
said portion being described as follows:
Beginning at the Northwest corner of said Lot 6;
Thence South 00 degrees 06 minutes 16 seconds East upon the West line of said
Lot 6, a distance of 205.83 feet;
Thence North 57 degrees 08 minutes 39 seconds West, 1.80 feet;
Thence North 00 degrees 23 minutes 45 seconds West, 204.85 feet;
Thence North 89 degrees 47 minutes 33 seconds East, 2.55 feet to the Point of
Beginning.
-4-
27
NO. 153544
PARCEL 6:
A portion of the Northwest quarter of the Southeast quarter of Section 34,
Township 13 South, Range 15 East, Gila and Salt River Base and Meridian, Pima
County, Arizona, being a portion of the unsubdivided parcel lying adjacent to
▇▇▇▇ ▇-▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, a subdivision recorded in the Pima County
Recorder's Office in Book 34 of Maps and Plats at page 44, Pima County, Arizona,
said portion being described as follows:
Beginning at the Northwest corner of said Lot 7;
Thence South 00 degrees 06 minutes 16 seconds East upon the West line of said
Lot 7, a distance of 197.00 feet;
Thence South 89 degrees 47 minutes 33 seconds West. 0.50 feet;
Thence North 00 degrees 23 minutes 45 seconds West, 197.98 feet;
Thence South 57 degrees 08 minutes 39 seconds East, 1.80 feet to the Point of
Beginning.
-5-
28
EXHIBIT "B"
ESTIMATED LOAN VALUE - HOMES
9401 - SantaFe $214,900.00
9402 - Taos $235,300.00
9403 - Ventana $245,300.00
29
EXHIBIT "C"
ESTIMATED LOAN VALUE - MODELS
▇▇▇ #▇▇ - ▇▇▇▇ ▇▇▇▇,▇▇▇.▇▇
▇▇▇ #▇▇ - ▇▇▇▇▇▇▇ $247,500.00
