HomeMy WebLinkAboutWave Crest Resorts II; 2006-06-26;PROMISSORY NOTE
$210,000 Carlsbad, California
, 2006
FOR VALUE RECEIVED, the undersigned Wave Crest Resorts II, Inc., a California
corporation (the "Developer"), hereby promises to pay to the order of the Carlsbad
Redevelopment Agency, a public body corporate and politic (the "Agency"), a principal amount
equal to Two Hundred Ten Thousand Dollars ($210,000) or so much thereof as is advanced by
the Agency to the Developer pursuant to the Loan Agreement between the Developer and the
Agency dated as of J^i/^S oifc , 2006 (the "Agreement"). All capitalized terms not
otherwise defined in this Promissory Note (the "Note") shall have the meanings set forth in the
Agreement.
1. Interest: Repayment Terms. The indebtedness evidenced by this Note
shall not bear interest; provided, however, if a default occurs hereunder, the principal amount of
this Note shall accrue interest in accordance with Section 4 of this Note. The Note shall be due
and payable at the times and in the manner set forth in Section 2.5 of the Agreement.
2. No Assumption. Except as provided in 6.9 of the Agreement, this Note
shall not be assumable by the successors and assigns of Developer without the prior written
consent of the Agency.
3. Terms of Payment.
a. All payments due under this Note shall be paid in currency of the
United States of America, which at the time of payment is lawful for the payment of public and
private debts.
b. All payments on this Note shall be paid to Agency at the Housing
and Redevelopment Agency of the City of Carlsbad, 2965 Roosevelt Street, Suite B, Carlsbad,
CA 92008, Attn: Executive Director, or to such other place as the Agency of this Note may
from time to time designate.
c. All payments on this Note shall be without expense to the Agency,
and the Developer agrees to pay all costs and expenses, including re-conveyance fees and
reasonable attorney's fees of the Agency, incurred in connection with the payment of this Note
and the release of any security hereof.
4. Acceleration. Upon the occurrence of a Default, the Agency shall have
the right to accelerate the debt evidenced by this Note and declare all of the unpaid principal and
interest, if any, immediately due and payable. Upon the occurrence of a Default, the outstanding
portion of the principal shall bear interest at the rate of the lesser often percent (10%),
1010\19\345052.2
compounded annually, and the highest rate permitted by law. Any failure by the Agency to
pursue its legal and equitable remedies upon Default shall not constitute a waiver of the Agency's
right to declare a Default and exercise all of its rights under this Note and the Loan Agreement.
Nor shall acceptance by the Agency of any payment provided for herein constitute a waiver of
the Agency's right to require prompt payment of any remaining payment owed.
5. Other Remedies. Upon the occurrence of a Default, the Agency make
seek full recourse against the Developer for amounts owed under this Note or any other remedy
at law or in equity.
6. No Offset. The Developer hereby waives any rights of offset it now has or
may hereafter have against the Agency, its successors and assigns, and agrees to make the
payments called for herein in accordance with the terms of this Note and the Loan Agreement.
7. Waiver: Attorneys' Fees. Developer, for itself, its heirs, legal
representatives, successors and assigns, respectively, waives diligence, presentment, protest, and
demand, and notice of protest, dishonor and non-payment of this Note, and expressly waives any
rights to be released by reason of any extension of time or change in terms of payment, or
change, alteration or release of any security given for the payments hereof, and expressly waives
the right to plead any and all statutes of limitations as a defense to any demand on this Note or
agreement to pay the same, and agrees to pay all costs of collection when incurred, including
reasonable attorneys' fees. If an action is instituted on this Note, the undersigned promises to
pay, in addition to the costs and disbursements allowed by law, such sum as a court may adjudge
reasonable as attorneys' fees in such action.
8. Notice. All notices to the Agency or the Developer shall be given in the
manner and at the addresses set froth in the Agreement, or to such addresses as the Agency and
the Developer may hereinafter designate.
9. Choice of Law. This Note shall be governed by and construed in
accordance with the laws of the State of California.
10. Time of the Essence. The times for the performance of any obligations
hereunder shall be strictly construed, time being of the essence.
11. Conflict. If any term or provision of this Note conflicts with any term or
provision of the Agreement, the term of provision of the Agreement shall control to the extent of
such conflict.
12. Headings. The headings included in this Note are for convenience of
reference only and are not part of this Agreement and do not in any way limit or amplify the
terms and provisions hereof.
13. Entire Agreement. This document, together with the other Loan
Documents, contains the entire agreement between the parties as to the Agency Loan. It may not
be modified except upon written consent of the parties.
1010\19\345052.2
14. Amendment. This Note may not be changed orally, but only by an
agreement in writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
DEVELOPER:
Wave Crest Resorts II, Inc., a California corporation
William L. Canepa, President and Secretary
1010\19\345052.2
LOAN AGREEMENT
BY AND BETWEEN
CARLSBAD REDEVELOPMENT AGENCY
and
WAVE CREST RESORTS II, INC.
(Laguna Point)
1010\19\344866.3
TABLE OF CONTENTS
ARTICLE 1: DEFINITIONS AND EXHIBITS 2
SECTION 1.1 DEFINITIONS 2
SECTION 1.2 EXHIBITS 4
ARTICLE 2: LOAN PROVISIONS 5
SECTION 2.1 LOAN 5
SECTION 2.2 INTEREST 5
SECTION 2.3 USE OF AGENCY LOAN FUNDS 5
SECTION 2.4 DISBURSEMENT OF LOAN PROCEEDS 5
SECTION 2.5 TERM AND REPAYMENT SCHEDULE 6
SECTION 2.6 ASSUMPTION 7
ARTICLE 3: CONSTRUCTION OF THE DEVELOPMENT 7
SECTION 3.1 CERTIFICATE OF OCCUPANCY 7
SECTION 3.2 CONSTRUCTION PURSUANT TO PLANS AND LAWS 7
SECTION 3.3 CONSTRUCTION RESPONSIBILITIES 8
ARTICLE 4: SALE OF HOMES 8
SECTION 4.1 SALE OF HOMES TO ELIGIBLE BUYERS AND LOAN ASSISTANCE 8
SECTION 4.2 CONDITIONS To CITY/HOMEBUYER LOANS 9
ARTICLE 5: AFFORDABLE HOUSING AGREEMENT; MARKETING; EDUCATION.
10
SECTION 5.1 COMPLIANCE WITH AFFORDABLE HOUSING AGREEMENT 10
SECTION 5.2 MARKETING PLAN 10
SECTION 5.3 HOMEBUYER EDUCATION 10
ARTICLE 6: ADDITIONAL LOAN REQUIREMENTS 10
SECTION 6.1 INFORMATION 10
SECTION 6.2 INSURANCE 10
SECTION 6.3 RECORDS 11
SECTION 6.4 HAZARDOUS MATERIALS 11
SECTION 6.5 FEES AND TAXES 12
SECTION 6.6 NONDISCRIMINATION 13
SECTION 6.7 MANDATORY LANGUAGE IN ALL SUBSEQUENT DEEDS, LEASES AND
CONTRACTS 13
SECTION 6.8 NOTICE OF LITIGATION 14
SECTION 6.9 . TRANSFERS 14
ARTICLE 7: DEFAULT 15
SECTION 7.1 EVENT OF DEFAULT 15
SECTION 7.2 REMEDIES 17
SECTION 7.3 RIGHT OF CONTEST 17
i
1010\19\344866.3
TABLE OF CONTENTS
(continued)
"'age
SECTION 7.4 REMEDIES CUMULATIVE 17
SECTION 7.5 WAIVER OF TERMS AND CONDITIONS 18
ARTICLE 8: REPRESENTATIONS AND WARRANTIES OF DEVELOPER 18
SECTION 8.1 REPRESENTATIONS AND WARRANTIES 18
ARTICLE 9: GENERAL PROVISIONS 19
SECTION 9.1 RELATIONSHIP OF PARTIES 19
SECTION 9.2 No CLAIMS 20
SECTION 9.3 AMENDMENTS 20
SECTION 9.4 INDEMNIFICATION 20
SECTION 9.5 NON-LIABILITY OF AGENCY OFFICIALS, EMPLOYEES AND AGENTS 20
SECTION 9.6 No THIRD PARTY BENEFICIARIES 20
SECTION 9.7 DISCRETION RETAINED BY AGENCY AND CITY 20
SECTION 9.8 NOTICES, DEMANDS AND COMMUNICATIONS 21
SECTION 9.9 APPLICABLE LAW 21
SECTION 9.10 PARTIES BOUND; COVENANTS RUNNING WITH THE LAND 21
SECTION 9.11 ATTORNEYS'FEES 22
SECTION 9.12 SEVERABILITY 22
SECTION 9.13 FORCE MAJEURE 22
SECTION 9.14 APPROVALS 22
SECTION 9.15 TITLE OF PARTS AND SECTIONS 22
SECTION 9.16 ENTIRE UNDERSTANDING OF THE PARTIES 23
SECTION 9.17 MULTIPLE ORIGINALS; COUNTERPART 23
SECTION 9.18 TIME OF THE ESSENCE 23
EXHIBIT A: Legal Description of the Property
11
1010\19\344866.3
LOAN AGREEMENT
(Laguna Point)
This Loan Agreement (the "Agreement") is entered into as ot+J£4s*E. 2. (e> , 2006,
by and between the Carlsbad Redevelopment Agency, a public body corporate and politic (the
"Agency"), and Wave Crest Resorts II, Inc., a California corporation (the "Developer"), with
reference to the following facts:
A. The Developer is the owner of certain real property in the City of Carlsbad, in the
County of San Diego, California described in Exhibit A attached hereto and incorporated herein
(the "Property").
B. The Developer has constructed twenty-one (21) residential housing units and
related improvements on the Property, in a development to be known as Laguna Point (the
"Development"). The Housing and Redevelopment Commission, on behalf of the Agency, has
approved Carlsbad Tentative Tract Map Number CT-01-13, and Major Redevelopment Permit
RP 01-08 for the proposed Development.
C. In satisfaction of certain conditions of approval in connection with the City of
Carlsbad's Inclusionary Housing Ordinance, the City and the Developer have executed an
Affordable Housing Agreement Imposing Restrictions on Real Property dated as of November
17, 2003 (the "Affordable Housing Agreement").
D. Pursuant to the Affordable Housing Agreement, the Developer agreed to sell three
(3) of the housing units in the Development to lower income households (the "Affordable
Units"). The Developer further agreed to carry back financing on the Affordable Units in an
amount equal to the difference between the market rate purchase price of the Affordable Unit
and the affordable price of such unit, and to assign such financing to the City.
E. In connection with the Affordable Housing Agreement, the Agency agreed to
provide financial assistance for the Affordable Units in the form of a Two Hundred Ten
Thousand Dollars ($210,000) (the "Agency Loan"), which represents a direct Agency subsidy
amount of Seventy Thousand Dollars ($70,00) per Affordable Unit.
F. As more fully set forth herein, upon sale of each Affordable Unit to an eligible
lower income household in compliance with the Affordable Housing Agreement and this
Agreement, and the satisfaction of certain conditions including the recordation of certain
City/Homebuyer Loan documents against each Affordable Unit, the Agency will credit the
Developer with repayment of Seventy Thousand Dollars ($70,000) of the Agency Loan.
G. The Agency Loan is solely funded by Agency low and moderate income housing
funds and the use of such funds has been approved by the Agency resolution number 366.
H. The Development is located in the Village Redevelopment Project Area (the
"Redevelopment Area").
1
1010\19\344866.3
I. Through this Agreement and the accompanying documents the Agency is
imposing occupancy and affordability restrictions on the Affordable Units in order to meet
replacement housing requirements applicable to the Redevelopment Area pursuant to Health and
Safety Code Section 33413(a) and low and moderate income housing production requirements
pursuant to Health and Safety Code Section 33413(b)(2)(A).
J. Prior to the consideration of this Agreement, the Agency approved the Negative
Declaration for the Development on April 9th, 2006 pursuant to resolution number 352. Pursuant
to California Environmental Quality Act (Public Resources Code Sections 21000 et seq.)
("CEQA"), the Negative Declaration has served as the environmental documentation for the
Agency's consideration and approval of this Agreement and the transactions contemplated by
this Agreement.
NOW, THEREFORE, the Parties agree as follows:
ARTICLE 1: DEFINITIONS AND EXHIBITS
Section 1.1 Definitions.
The following capitalized terms shall have the following meanings in this Agreement:
(a) "Affordable Housing Agreement" shall mean the Affordable Housing
Agreement Imposing Restrictions on Real Property by and between the City and the Developer
dated November 17, 2003, and recorded against the Property as Instrument No. 2004-0908137 of
the Official Records of San Diego County.
(b) "Affordable Unit" shall mean a Unit sold to an Eligible Buyer in
compliance with the Affordable Housing Agreement.
(c) "Agency" shall mean the Carlsbad Redevelopment Agency, a public body
corporate and politic.
(d) "Agency Loan" shall mean the loan for the amount of Two Hundred Ten
Thousand Dollars ($210,000) by the Agency to the Developer pursuant to this Agreement.
(e) "Agreement" shall mean this Loan Agreement.
(f) "City" shall mean the City of Carlsbad, a municipal corporation.
(g) "City/Homebuyer Loan Documents" shall mean the Eligible Buyer Note,
the Eligible Buyer Deed of Trust, Eligible Buyer Disclosure Statement and Eligible Buyer Resale
Agreement.
(h) "City/Homebuyer Loan" shall mean the carry back financing provided by
the Developer to Eligible Buyers and assigned by the Developer to the City more particularly
described in Section 2.3.2 of the Affordable Housing Agreement and Section 2.4(a)(viii) of this
Agreement. Each City/Homebuyer Loan shall be evidenced by an Eligible Buyer Note and
2
1010\19\344866.3
secured by an Eligible Buyer Deed of Trust. In connection with the City/Homebuyer Loan, the
City and Eligible Buyer shall also execute an Eligible Buyer Resale Agreement that shall be
recorded against title in each Affordable Unit upon the sale of such Affordable Unit to an Eligible
Buyer pursuant to this Agreement. The amount of the City/Homebuyer Loan shall be equal to the
primary affordability subsidy for each Affordable Unit, as applicable.
(i) "Default" shall have the meaning set forth in Section 7.1 below.
(j) "Developer Note" shall mean the promissory note, in a form to be
provided by the Agency, executed and delivered by the Developer to the Agency in the principal
amount of Two Hundred Ten Thousand Dollars ($210,000), evidencing the Agency Loan.
(k) "Development" shall mean the Property and the Improvements.
(1) "Direct Agency Subsidy Amount" shall mean the Seventy Thousand
Dollars ($70,000) increment of the Agency Loan attributable to each Affordable Unit.
(m) "Eligible Buyer" shall mean a Lower Income Household purchasing an
Affordable Unit whose income shall also not exceed the maximum eligible buyer income as set
forth in the Exhibit C to the Affordable Housing Agreement.
(n) "Eligible Buyer Deed of Trust" shall mean the deed of trust held by the
City to secure payment of an Eligible Buyer Note executed and delivered to the City by the
Eligible Buyer of an Affordable Unit, in the form to be provided by the City.
(o) "Eligible Buyer Disclosure Statement" shall mean the disclosure statement
explaining the terms of the Eligible Buyer Deed of Trust, of the Eligible Buyer Note and the
Eligible Buyer Resale Agreement. The Eligible Buyer shall execute the Eligible Buyer Disclosure
Statement prior to purchasing an Affordable Unit.
(p) "Eligible Buyer Note" shall mean the promissory note in a form to be
provided by the City, executed and delivered to the City by an Eligible Buyer of a Affordable
Unit.
(q) "Eligible Buyer Resale Agreement" shall mean the resale restriction
agreement and option to purchase, executed by the City and Eligible Buyer of an Affordable Unit,
in a form to be provided by the City.
(r) "Hazardous Materials" shall have the meaning set forth in Section 6.4
below.
(s) "Hazardous Materials Claim" shall have the meaning set forth in Section
6.4 below.
(t) "Hazardous Materials Law" shall have the meaning set forth in Section 6.4
below.
1010\19\344866.3
(u) "Improvements" shall mean the approximately twenty-one (21) residential
housing units to be constructed on the Property, as well as all landscaping, roads, and parking
spaces appurtenant to such units.
(v) "Loan Documents" shall mean the following documents: (i) the
Developer Note; (ii) the Affordable Housing Agreement and (ii) this Agreement.
(w) "Lower Income Household" shall mean a household with an annual
income that does not exceed the qualifying limits for lower income families as established and
amended from time to time pursuant to Section 8 of the United States Housing Act of 1937 as
published by the State of California Department of Housing and Community Development.
(x) "Median Income" shall mean the median gross yearly income for
households in San Diego County, California, as adjusted for household size (which for one
bedroom units will be assumed to include 2 (two) people), as published periodically by the United
States Department of Housing and Urban Development ("HUD"). In the event such income
determinations are no longer published by HUD, or are not updated for a period of at least
eighteen (18) months, the Agency shall provide the Developer with other income determinations
which are reasonably similar with respect to method of calculation to those previously published
by HUD.
(y) "Parties" shall mean the Agency and the Developer.
(z) "Primary Affordability Subsidy" shall have the meaning set forth in
Section 2.3.2 of the Affordable Housing Agreement.
(aa) "Property" shall mean the property on which the Developer shall construct
the Improvements, as more particularly described in the attached Exhibit A.
(bb) "Term" shall mean the six (6) month term of the Agency Loan,
commencing on the date of this Agreement and continuing for six (6) months thereafter.
(cc) "Title Company" shall mean Stewart Title of California Company,
(dd) "Transfer" shall have the meaning set forth in Section 6.9 below,
(ee) "Unit" shall mean a housing unit located within the Development.
Section 1.2 Exhibits.
The following exhibits are attached to this Agreement and incorporated into this
Agreement by this reference:
EXHIBIT A: Legal Description of the Property
1010\19\344866.3
ARTICLE 2: LOAN PROVISIONS
Section 2.1 Loan.
The Agency shall loan to the Developer the Agency Loan in the principal amount of Two
Hundred Ten Thousand Dollars ($210,000) for the purposes set forth in Section 2.3 of this
Agreement. The obligation of the Developer to repay the Agency Loan shall be evidenced by
the Developer Note.
Section 2.2 Interest.
The Agency Loan shall not bear interest; provided, however, if a Default is declared by
the Agency, the Agency Loan shall bear interest, commencing on the date of declaration of the
Default, at the default rate equal to the lesser often percent (10%), compounded annually or the
maximum rate permitted by law.
Section 2.3 Use of Agency Loan Funds.
The Developer shall use the Agency Loan to pay for Developer's costs of constructing the
Affordable Units and to assist Eligible Buyers of the Affordable Units in paying for a portion of
costs associated with the construction of the Affordable Units. The Developer shall not use the
Agency Loan funds for any other purpose without the prior written consent of the Agency.
Section 2.4 Disbursement of Loan Proceeds.
(a) The Agency Loan shall be disbursed to Developer in three Seventy
Thousand Dollars ($70,000) increments. Subject to Section 2.4(b), the Agency shall disburse
each Seventy Thousand Dollars ($70,000) increment to Developer upon the sale of each
Affordable Unit to an Eligible Buyer provided that the events listed in this Section 2.4(a) have
occurred.
(i) The Developer has received a certificate of occupancy from the
City for all Units in the Development.
(ii) The Developer shall have executed this Agreement and the
Developer Note.
(iii) The Agency has approved the form of purchase agreement the
Developer will use in connection with the sale of the Affordable Units.
(iv) The Eligible Buyer of the Affordable Unit shall have executed the
City/Homebuyer Loan Documents and deposited the City/Homebuyer Loan Documents into
escrow.
(v) The Agency has received a good standing certificate issued by the
California Secretary of State's office indicating that the Developer exists in good standing at the
1010\19\344866.3
time of the proposed disbursement, as well as a copy of a corporate resolution indicating that
Developer has duly authorized entry into and performance under this Agreement.
(vi) No mechanics liens have been recorded against title to the
applicable Affordable Unit and the Developer has provided Agency with lien releases for all
work done on the Property in forms reasonably acceptable to the Agency.
(vii) There exists no Default nor any act, failure, commission or
condition that would constitute an Event of Default under this Agreement or the Affordable
Housing Agreement.
(viii) The Developer shall carry back financing to the Eligible Buyer in
an amount equal to the Primary Affordability Subsidy and assign such interest in the carry back
financing o the City pursuant to Section 2.3.2 of the Affordable Housing Agreement.
(b) The Agency shall deposit each Seventy Thousand Dollar ($70,000)
increment into an escrow account at the Title Company opened for the sale of an Affordable Unit
to an Eligible Buyer. The Agency shall instruct the Title Company to disburse each Seventy
Thousand Dollar ($70,000) increment to Developer upon recordation of the grant deed
evidencing the transfer of the applicable Affordable Unit to an Eligible Buyer in accordance with
the Affordable Housing Agreement and this Agreement.
Section 2.5 Term and Repayment Schedule.
(a) The Agency shall credit the Developer with repayment of Seventy
Thousand Dollars ($70,000) of the Agency Loan upon the sale of each Affordable Unit to an
Eligible Purchaser provided that the events listed in this Section 2.5(a) have occurred.
(i) The conditions set forth in Section 2.4 have been satisfied.
(ii) The Eligible Buyer Deed of Trust executed by an Eligible Buyer
and an Eligible Buyer Resale Agreement executed by the City and an Eligible Buyer have been
recorded against title to the applicable Affordable Unit.
(iii) A title insurer reasonably acceptable to the City is unconditionally
and irrevocably committed to issuing a CLTA Lender's Policy of insurance insuring the priority
of the Eligible Buyer Deed of Trust in the amount of the City/Homebuyer Loan, subject only to
such exceptions and exclusions as may be reasonably acceptable to the City and containing such
endorsements as the City may reasonably require.
(iv) The Eligible Buyer purchasing the applicable Affordable Unit has
furnished the City with evidence of the insurance coverage required by the City/Homebuyer
Loan Documents.
(v) The Developer shall have met and caused the homebuyer to
meet the conditions set forth in Article 4.
6
1010\19\344866.3
(b) The Agency and the Developer acknowledge that the principal amount of
the City/Homebuyer Loan and the Eligible Buyer Note to the City shall be equal to the Primary
Affordability Subsidy as defined in Section 2.3.2 of the Affordable Housing Agreement. The
Primary Affordability subsidy includes the value to the Eligible Buyer of the City's inclusionary
housing restrictions pursuant to the Affordable Housing Agreement and will therefore be greater
in principal amount than the Direct Agency Subsidy Amount of Seventy Thousand Dollars
($70,000). The Agency and Developer nevertheless agree that only the Direct Agency Subsidy
Amount of Seventy Thousand Dollars ($70,000) shall be credited toward repayment of the
Agency Loan.
(c) Upon the sooner of the date of expiration of the Term, the date of an
unauthorized Transfer of the Development, or Developer's Transfer of the last Affordable Unit
still owned by the Developer, all principal remaining unpaid or uncredited shall be due and
payable.
(d) The Developer may pay the principal and any interest due the Agency
under the Developer Note prior to or in advance of the time for payment thereof as provided in
the Developer Note, without penalty. However, the Provisions of this Agreement and the
Affordable Housing Agreement will be applicable to the Development even though Developer
may have prepaid the Developer Note, including the requirement that a minimum of three (3) of
the Units shall be sold to Eligible Buyers who execute City/Homebuyer Loan Documents.
Section 2.6 Assumption.
Subject to Section 6.9 below, the Developer Note shall not be assumable by successors
and assigns of Developer without the prior written consent of the Agency, which consent shall
not be withheld unreasonably.
ARTICLE 3: CONSTRUCTION OF THE DEVELOPMENT
Section 3.1 Certificate of Occupancy.
Developer shall complete construction of the Development no later than six (6) months
from the date of this Agreement.
Section 3.2 Construction Pursuant to Plans and Laws.
(a) The Developer represents that Developer has caused all work performed in
connection with the Development to be performed in compliance with (i) all applicable laws,
ordinances, rules and regulations of federal, state, City, or agencies now in force or that may be
enacted hereafter and (ii) all directions, rules and regulations of any fire marshal, health officer,
building inspector, or other officer of every governmental agency now having or hereafter
acquiring jurisdiction.
1010\19\3 44866.3
(b) This Agreement has been prepared with the intention that the Agency
Loan meets the exception set forth in Labor Code Sections 1720(c)(4) and 1720 (c)(6)(c) to the
general requirement that prevailing wages be paid in connection with construction work that is
paid for in whole or in part out of public funds, provided however that nothing in this Agreement
constitutes a representation or warranty by any party regarding the applicability of Labor Code
Sections 1720 et seq. and by Labor Code Sections 1777.5 et seq. and the implementing
regulations of the Department of Industrial Relations and Borrower shall comply with any laws
related to construction wages or apprenticeship, if and to the extent applicable to the
Development. The Borrower shall indemnify, hold harmless and defend (with counsel reasonably
acceptable to the Agency and City) the Agency and City against any claim for damages,
compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any
person or entity (including the Borrower, its contractor and subcontractors) to pay prevailing
wages as determined pursuant to Labor Code Sections 1720 et seq. and implementing regulations
of the Department of Industrial Relations, or to employ apprentices as required by Labor Code
Section 1777.5 et seq., and implementing regulations of the Department of Industrial Relations,
and to comply with other implementing rules and regulations in connection with the construction
of the Development or any other work undertaken or in connection with the Property. This
Section 3.2(b) shall survive the expiration of the Term and the termination of this Agreement.
(c) The Developer represents that all construction work and professional
services has been and will be performed by persons or entities licensed or otherwise authorized
to perform the applicable construction work or service in the State of California.
Section 3.3 Construction Responsibilities.
(a) It shall be the responsibility of Developer to coordinate and schedule the
work to be performed so that commencement and completion of construction will take place in
accordance with this Agreement.
(b) Developer shall be solely responsible for all aspects of Developer's
conduct in connection with the Development, including (but not limited to) the quality and
suitability of the plans and specifications, the supervision of construction work, and the
qualifications, financial condition, and performance of all architects, engineers, contractors,
subcontractors, suppliers, consultants, and property managers. Any review or inspection
undertaken by the Agency with reference to the Development is solely for the purpose of
determining whether Developer is properly discharging its obligations to the Agency, and should
not be relied upon by Developer or by any third parties as a warranty or representation by the
Agency as to the quality of the design or construction of the Development.
ARTICLE 4: SALE OF HOMES.
Section 4.1 Sale of Homes to Eligible Buyers and Loan Assistance.
All three (3) of the Affordable Units shall be sold to Eligible Buyers. Developer shall
target Eligible Buyers who are Lower Income Households for purchase of the Affordable Units.
The purchase prices of all Affordable Units shall be subject to approval of the Agency and City,
8
1010\19\3 44866.3
and shall be equal to the market price charged for a comparable unit (and not to exceed fair
market value) (the "Approved Purchase Price"). The Developer shall carry back financing on
each Affordable Unit in an amount equal to the Primary Affordability Subsidy. Such carry back
financing will be assigned to the City pursuant to Section 2.3.2 of the Affordable Housing
Agreement and Section 2.4(a)(viii) of this Agreement. The Developer shall provide, in a form
approved by the Agency and City in writing, a purchase and sale agreement to be used for the
sale of the Affordable Units to the Eligible Buyers.
Section 4.2 Conditions To Citv/Homebuyer Loans.
(a) As a condition precedent to an Eligible Buyer receiving the
City/Homebuyer Loan, Developer shall obtain from the Eligible Buyer certifications of
household income and household size in a form to be provided by the City (the "Income
Certification") to ensure that the proposed homebuyer is an Eligible Buyer. The Developer shall
income-certify the Eligible Buyer as close to the time of commencement of actual construction
as is reasonably possible. If the Income Certification occurs more than one hundred twenty
(120) days before sale to the Eligible Buyer, the Developer shall recertify the Eligible Buyer no
more than one hundred twenty (120) days before sale. The Developer shall verify that the
income provided by an Eligible Buyer in an Income Certification is accurate by taking two or
more of the following steps as a part of the verification process: (i) obtain a pay stub for the
most recent pay period; (ii) obtain an income tax return for the three most recent tax years; (iii)
conduct a credit agency or similar search; (iv) obtain an income verification form from the
Eligible Buyer's current employer; (v) obtain an income verification form from the Social
Security Administration and/or the California Department of Social Services if the Eligible
Buyer receives assistance from either of such agencies; or (vi) if the Eligible Buyer is
unemployed and has no such tax return, obtain another form of independent verification.
(b) As a condition precedent to an Eligible Buyer receiving the
City/Homebuyer Loan, an Eligible Buyer shall certify that he or she will occupy the Affordable
Unit as a principal place of residence and shall agree to in no event lease the Affordable Unit,
utilizing a form of certification to be provided by the City (the "Owner Occupancy
Certification").
(c) As a condition precedent to an Eligible Buyer receiving the
City/Homebuyer Loan, an Eligible Buyer shall: (i) execute the Eligible Buyer Note in the
amount of the City/Homebuyer Loan in a form to be provided by the City; and (ii) execute and
record against the Affordable Unit an Eligible Buyer Deed of Trust securing the Eligible Buyer's
obligations under the Eligible Buyer Note; and (iii) execute an Eligible Buyer Disclosure
Statement, and (iv) enter into with the City a Eligible Buyer Resale Agreement restricting the
resale price of the Affordable Unit for forty-five (45) years and record such agreement against
the Affordable Unit; and (v) execute such other documents required by the City in its reasonable
discretion.
(d) For each Eligible Buyer receiving a City/Homebuyer Loan, Developer
shall transmit to the City the Eligible Buyer's Income Certification (with attached required
documentation), and Owner Occupancy Certification, and City/Homeowner Loan Documents, all
executed by the Eligible Buyer, at least five (5) working days prior to the sale of the Affordable
9
1010\19\344866.3
Unit to the Eligible Buyer. The City shall review these documents, and submit the executed
Eligible Buyer Note, Eligible Buyer Deed of Trust, and Eligible Buyer Resale Agreement into
escrow with escrow instructions.
ARTICLE 5: AFFORDABLE HOUSING AGREEMENT; MARKETING; EDUCATION.
Section 5.1 Compliance with Affordable Housing Agreement.
Developer shall comply with the terms of the Affordable Housing Agreement and any
breach under the Affordable Housing Agreement shall be considered a Default under this
Agreement. The Affordable Housing Agreement is hereby incorporated into this Agreement by
this reference.
Section 5.2 Marketing Plan
(a) The Developer has submitted and the Agency has approved Developer's
plan for marketing the Affordable Units to Lower Income Households, including information on
affirmative marketing efforts and compliance with fair housing laws.
(b) The plan prepared pursuant to this section may be revised by the
Developer with prior written approval from the Agency and City.
Section 5.3 Homebuver Education.
(a) The Developer has submitted and the Agency has approved Developer's
plan for an educational program to inform Eligible Buyers purchasing the Affordable Units of
the obligations of home ownership.
(b) The plan prepared pursuant to this section may be revised by the
Developer with prior written approval from the Agency and City.
ARTICLE 6: ADDITIONAL LOAN REQUIREMENTS
Section 6.1 Information.
The Developer shall promptly provide any information reasonably requested by the
Agency in connection with the Development.
Section 6.2 Insurance.
Throughout the period of Developer's ownership of any portion of the Development,
Developer shall maintain the insurance as required by the Affordable Housing Agreement.
10
1010\19\344866.3
Section 6.3 Records.
(a) Developer shall maintain complete, accurate, and current records
pertaining to the Development for a period of five (5) years after the creation of such records,
and shall permit any duly authorized representative of the Agency to inspect and copy records.
Such records shall include but not be limited to all invoices, receipts, and other documents
related to expenditures from the Agency and financial accounting information, books, records
and other information related to the Development. Records must be kept accurate and current.
(b) The Agency shall notify Developer of any records it deems insufficient.
Developer shall have fifteen (15) calendar days after the receipt of such a notice to correct any
deficiency in the records specified by the Agency in such notice, or if a period longer than fifteen
(15) days is reasonably necessary to correct the deficiency, then Developer shall begin to correct
the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible.
This Section 6.3 shall survive the expiration of the Term and the termination of this Agreement.
Section 6.4 Hazardous Materials.
(a) The Developer shall keep and maintain the Development in compliance
with, and shall not cause or permit the Development to be in violation of, any federal, state or
local laws, ordinances or regulations relating to industrial hygiene or to the environmental
conditions on, under or about the Development including, but not limited to, soil and ground
water conditions. The Developer shall not use, generate, manufacture, store or dispose of on,
under, or about the Development or transport to or from the Development any flammable
explosives, radioactive materials, hazardous wastes, toxic substances or related materials,
including without limitation, any substances defined as or included in the definition of
"hazardous substances, "hazardous wastes," "hazardous materials," or "toxic substances" under
any applicable federal or state laws or regulations (collectively referred to hereinafter as
"Hazardous Materials") except such of the foregoing as may be customarily kept and used in and
about multifamily residential property.
(b) The Developer shall immediately advise the Agency in writing if at any
time it receives written notice of (i) any and all enforcement, cleanup, removal or other
governmental or regulatory actions instituted, completed or threatened against the Developer or
the Development pursuant to any applicable federal, state or local laws, ordinances, or
regulations relating to any Hazardous Materials ("Hazardous Materials Law"); (ii) all claims
made or threatened by any third party against the Developer or the Development relating to
damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous
Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as
"Hazardous Materials Claims"); and (iii) the Developer's discovery of any occurrence or
condition on any real property adjoining or in the vicinity of the Development that could cause
the Development or any part thereof to be classified as "border-zone property" under California
Health and Safety Code Sections 25220 et seq. or any regulation adopted in accordance
therewith, or to be otherwise subject to any restrictions on the ownership, occupancy,
transferability or use of the Property under any Hazardous Materials Law.
11
1010\19\344866.3
(c) The Agency shall have the right to join and participate in, as a party if it so
elects, any legal proceedings or actions initiated in connection with any Hazardous Materials
Claims and to have its reasonable attorneys' fees in connection therewith paid by the Developer.
The Developer shall indemnify, defend (with counsel reasonably chosen by the Agency, at the
Agency's option), and hold harmless the Agency and its officers, councilmembers, employees,
and agents from and against any loss, damage, cost, expense, or liability directly or indirectly
arising out of or attributable to the use, generation, storage, release, threatened release, discharge,
disposal, or presence of Hazardous Materials on, under, or about the Development including
(without limitation): (i) all foreseeable consequential damages; (ii) the costs of any required or
necessary repair, cleanup, or detoxification of the Development and the preparation and
implementation of any closure, remedial, or other required plans; and (iii) all reasonable costs
and expenses incurred by the Agency in connection with clauses (i) and (ii), including (but not
limited to) reasonable attorneys' fees. This paragraph shall survive the expiration of the Term
and the termination of this Agreement.
(d) Without the Agency's prior written consent, which shall not be
unreasonably withheld, the Developer shall not take any remedial action in response to the
presence of any Hazardous Materials on, under or about the Development, nor enter into any
settlement agreement, consent decree, or other compromise in respect to any Hazardous Material
Claims, which remedial action, settlement, consent decree or compromise might, in the Agency's
reasonable judgement, impair the value of the Agency's security hereunder. However, the
Agency's prior consent shall not be necessary if the presence of Hazardous Materials on, under,
or about the Development either poses an immediate threat to the health, safety or welfare of any
individual, or is of such a nature that an immediate remedial response is necessary and it is not
reasonably possible to obtain the Agency's consent before taking such action, provided that in
such event the Developer shall notify the Agency as soon as practicable of any action so taken.
The Agency shall not withhold its consent, where consent is required hereunder, if either (i) a
particular remedial action is ordered by a court of competent jurisdiction, (ii) the Developer will
or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action;
or (iii) the Developer establishes to the reasonable satisfaction of the Agency that there is no
reasonable alternative to such remedial action which would result in less impairment of the
Agency's security hereunder.
Section 6.5 Fees and Taxes.
During the period of ownership of the Development or any portion thereof by the
Developer, the Developer shall be solely responsible for payment of all fees, assessments, taxes,
charges, and levies imposed by any public authority or utility company with respect to the
Development or portion thereof owned by the Developer, and shall pay such charges prior to
delinquency. However, the Developer shall not be required to pay and discharge any such
charge so long as (a) the legality thereof is being contested diligently and in good faith and by
appropriate proceedings, and (b) if requested by the Agency, the Developer deposits with the
Agency any funds or other forms of assurance that the Agency in good faith from time to time
determines appropriate to protect the Agency from the consequences of the contest being
unsuccessful.
12
1010\19\344866.3
Section 6.6 Nondiscrimination.
The Developer covenants by and for itself and its successors and assigns that there shall
be no discrimination against or segregation of a person or of a group of persons on account of
race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or
national origin in the sale, transfer, use, occupancy, or enjoyment of any Affordable Unit, nor
shall the Developer or any person claiming under or through the Developer establish or permit
any such practice or practices of discrimination or segregation. The foregoing covenant shall run
with the land.
Section 6.7 Mandatory Language in All Subsequent Deeds, Leases and Contracts.
All deeds, leases or contracts made or entered into by the Developer, its successors or
assigns, as to any portion of the Development shall contain therein the following language:
(a) In Deeds:
"Grantee herein covenants by and for itself, its successors and assigns that
there shall be no discrimination against or segregation of a person or of a group of
persons on account of race, color, creed, religion, disability, sex, sexual orientation,
marital status, familial status, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the property herein conveyed nor shall
the grantee or any person claiming under or through the grantee establish or permit any
such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees
or vendees in the property herein conveyed. The foregoing covenant shall run with the
land."
(b) In Leases:
"The lessee herein covenants by and for the lessee and lessee's heirs,
personal representatives and assigns and all persons claiming under the lessee or through
the lessee that this lease is made subject to the condition that there shall be no
discrimination against or segregation of any person or of a group of persons on account
of race, color, creed, religion, disability, sex, sexual orientation, marital status, familial
status, national origin or ancestry in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the land herein leased nor shall the lessee or any
person claiming under or through the lessee establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the
land herein leased."
(c) In Contracts:
"There shall be no discrimination against or segregation of any person or
group of persons on account of race, color, creed, religion, disability, sex, sexual
orientation, marital status, familial status, national origin or ancestry in the sale, lease,
13
1010\19\344866.3
sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the
transferee or any person claiming under or through the transferee establish or permit any
such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees
or vendees of the land."
Section 6.8 Notice of Litigation.
During the period of ownership of the Development or any portion thereof by the
Developer, the Developer shall promptly notify the Agency in writing of any litigation affecting
the Developer or the Development and of any claims or disputes that involve a material risk of
litigation.
Section 6.9 Transfers.
(a) The qualifications and identity of the Developer are of particular concern
to the Agency. It is because of those qualifications and identity that the Agency has entered into
this Agreement with the Developer. The Agency shall have no obligation to perform hereunder
if any voluntary or involuntary successor in interest of the Developer shall acquire any rights or
powers under this Agreement except as expressly set forth herein. The Agency may terminate
this Agreement upon the occurrence of a Transfer prohibited by subsection (b). The Agency
shall approve a proposed Transfer if the Developer is transferring the entire Property to the
transferee and the Agency reasonably determines that the proposed transferee possesses the
qualifications, development experience and financial capability necessary and adequate to fulfill
the obligations undertaken in this Agreement and the Affordable Housing Agreement by the
Developer.
(b) No Transfer shall be permitted prior to repayment of the Agency Loan in
full or prior to sale of all Affordable Units in compliance with the Affordable Housing
Agreement without the prior written consent of the Agency, which the Agency shall grant or
withhold in accordance with the standard set forth in subsection (a) above. Pursuant to Section
2.5(c) above, the Agency Loan shall automatically accelerate and be due in full upon any
Transfer for which prior written Agency approval has not been obtained.
(c) For purposes of this Agreement, "Transfer" shall mean, except as excluded
by the provisions of subsection (b), any sale, assignment, or transfer, whether voluntary or
involuntary, of (i) any rights and/or duties under this Agreement, and/or (ii) any interest in the
Development, including (but not limited to) a fee simple interest, a joint tenancy interest, a life
estate, a partnership interest, a leasehold interest, a security interest, or an interest evidenced by a
land contract by which possession of the Development is transferred and the Developer retains
title.
(d) The term "Transfer" shall exclude the following transfers that would
otherwise be Transfers under subsection (a):
(i) the assignment of this Agreement (and the transfer of the
Development) to a corporation controlled by the Developer, or to a partnership or joint venture in
14
1010\19\344866.3
which the Developer, or an entity controlled by the Developer, is a general partner and is in
control thereof;
(ii) the admission of additional new general or limited partners, or the
substitution or deletion of partners to any partnership or joint venture set forth in (i) above so
long as the Developer, or an entity controlled by the Developer, continues in control;
(iii) the granting of easements, licenses or permits to facilitate the
development of the Development;
(iv) the granting of any security interest in the Development then
owned by Developer or other financing arrangement for the purposes of securing the
construction loan for the Development or the transfer of such security interests to another entity;
(v) the transfer or conveyance of all or any portion of the
Development by foreclosure of a mortgage or deed of trust or by transfer in-lieu-of foreclosure
thereof, and a subsequent transfer or conveyance of all or any portion of the Development to a
third party transferee.
(vi) the sale or transfer of individual Units in the Development to
homebuyers in compliance with this Agreement or the Affordable Housing Agreement.
(e) In the absence of specific written agreement by the Agency, or except to a
transferee otherwise authorized in this Agreement (whereupon the transferor-assignor shall be
relieved of its obligations hereunder), no Transfer (whether authorized or unauthorized) shall be
deemed to relieve the Developer or any other party of any obligations under this Agreement.
ARTICLE?: DEFAULT
Section 7.1 Event of Default.
Each of the following shall constitute a "Default" by Developer under this Agreement:
(a) Failure to Construct. Subject to Section 9.13, failure of Developer to
receive a certificate of occupancy for all units in the Development within the times set forth in
Article 3.1 above.
(b) Failure to Make Payment. Failure to make prompt payments of the
principal on the Developer Note when due.
(c) Breach of Covenants. Failure by the Developer to duly perform, comply
with, or observe any of the conditions, terms, or covenants of any of the Loan Documents (other
than a monetary default as described in paragraph (a) above). If such a non-monetary event of
default occurs under the terms of the Loan Documents, unless automatic acceleration is provided
for hereunder, prior to exercising any remedies thereunder, the Agency shall give the Developer
written notice of such default and the Developer shall have thirty (30) days (unless an alternative
15
1010\19\344866.3
time period is specified hereunder, in which event such alternate cure period shall apply) to
effect a cure prior to exercise of remedies by the Agency.
(d) Insolvency. A court having jurisdiction shall have made or entered any
decree or order (i) adjudging the Developer to be bankrupt or insolvent, (ii) approving as
properly filed a petition seeking reorganization of the Developer or seeking any arrangement for
the Developer under the bankruptcy law or any other applicable debtor's relief law or statute of
the United States or any state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator,
or assignee of the Developer in bankruptcy or insolvency or for any of their properties, or (iv)
directing the winding up or liquidation of the Developer, or the Developer shall have admitted in
writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed
a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. The
occurrence of any of the events of Default in this section 7.1 (d) shall act to accelerate
automatically, without the need for any notice or action by the Agency, the indebtedness
evidenced by the Developer Note.
(e) Assignment: Attachment. The Developer, by reason of a default under its
obligations to creditors, has assigned its assets for the benefit of its creditors or suffered a
sequestration or attachment of or execution on any substantial part of its property; provided that
Developer shall have sixty (60) days to cure any sequestration, attachment, or execution not
consented to by Developer. The occurrence of any of the events of Default in this section shall
act to accelerate automatically, without the need for any notice or action by the Agency, the
indebtedness evidenced by the Developer Note.
(f) Suspension; Termination. The Developer shall have voluntarily suspended
its business or Developer shall have been dissolved or terminated.
(g) Liens on the Development. There shall be filed any claim of lien (other
than a lien approved in writing by the Agency) against the Development or any part thereof then
owned by Developer, or any interest or right made appurtenant thereto, or the service of any
notice to withhold proceeds of the Agency Loan, and such claim of lien or notices to withhold is
maintained for a period of forty-five (45) days without discharge or satisfaction thereof or
provision therefor satisfactory to the Agency.
(h) Condemnation. The condemnation, seizure, or appropriation of all or, in
the opinion of the Agency, a substantial part of the Development.
(i) Defaults Under Other Loans. Any default declared by the lender under any
loan document related to a loan secured by the Property or any part thereof then owned by
Developer, which default is not cured by the Developer following the expiration of applicable
notice and cure periods under the applicable loan documents or other loan document, shall act to
accelerate automatically, without the need for any notice or action by the Agency, the
indebtedness evidenced by the Developer Note.
(j) Breach of Representation. Any representation or warranty of Developer
contained in this Agreement, or in any application, financial statement, certificate, or report to
the Agency was incorrect in any material respect when made.
16
1010\19\344866.3
(k) Unauthorized Transfer. Any Transfer other than as permitted by
Section 6.9.
Section 7.2 Remedies.
The occurrence of any Default will either at the option of the Agency, or automatically
where so specified, relieve the Agency of any obligation to make or continue the Agency Loan
and shall give the Agency the right to proceed with any and all remedies set forth in this
Agreement and the Loan Documents, including but not limited to the following:
(a) Acceleration of Developer Note. The Agency shall have the right to cause
all indebtedness of the Developer to the Agency under this Agreement and the Developer Note to
become immediately due and payable, with interest accruing on the principal amount from the
date of acceleration to the date of repayment at an interest rate equal to the interest rate set forth
in Section 4 of the Developer Note. The Developer waives all right to presentment, demand,
protest or notice of protest or dishonor. The Agency may proceed to enforce payment of the
indebtedness and to exercise any or all rights afforded to the Agency as a creditor under the law.
The Developer shall be liable to pay the Agency on demand all expenses, costs and fees
(including, without limitation, attorney's fees and expenses) paid or incurred by the Agency in
connection with the collection of the Agency Loan and the preservation, maintenance,
protection, sale, or other disposition of the security given for the Agency Loan.
(b) Specific Performance. The Agency shall have the right to mandamus or
other suit, action or proceeding at law or in equity to require the Developer to perform its
obligations and covenants under the Loan Documents or to enjoin acts on things which may be
unlawful or in violation of the provisions of the Loan Documents.
(c) Right to Cure at the Developer's Expense. The Agency shall have the
right (but not the obligation) to cure any monetary default by the Developer under a loan other
than the Agency Loan. The Developer shall reimburse the Agency for any funds advanced by
the Agency to cure a monetary default by Developer upon demand therefor, together with
interest thereon at the rate of interest equal to the interest rate set forth in Section 4 of the
Developer Note from the date of expenditure until the date of reimbursement.
Section 7.3 Right of Contest.
Developer shall have the right to contest in good faith any claim, demand, levy, or
assessment the assertion of which would constitute a Default hereunder. Any such contest shall
be prosecuted diligently and in a manner unprejudicial to the Agency or the rights of the Agency
hereunder.
Section 7.4 Remedies Cumulative.
No right, power, or remedy given to the Agency by the terms of this Agreement or the
Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and
every such right, power, or remedy shall be cumulative and in addition to every other right,
power, or remedy given to the Agency by the terms of any such instrument, or by any statute or
17
1010\19\344866.3
otherwise against the Developer and any other person. Neither the failure nor any delay on the
part of the Agency to exercise any such rights and remedies shall operate as a waiver thereof, nor
shall any single or partial exercise by the Agency of any such right or remedy preclude any other
or further exercise of such right or remedy, or any other right or remedy.
Section 7.5 Waiver of Terms and Conditions.
The Agency's Executive Director may at his or her discretion waive in writing any of the
obligations of the Developer under this Agreement, without the Developer completing an
amendment to this Agreement. No waiver of any default or breach by Developer hereunder shall
be implied from any omission by the Agency to take action on account of such default if such
default persists or is repeated, and no express waiver shall affect any default other than the
default specified in the waiver, and such waiver shall be operative only for the time and to the
extent therein stated. Waivers of any covenant, term, or condition contained herein shall not be
construed as a waiver of any subsequent breach of the same covenant, term, or condition. The
consent or approval by the Agency to or of any act by the Developer requiring further consent or
approval shall not be deemed to waive or render unnecessary the consent or approval to or of any
subsequent similar act. The exercise of any right, power, or remedy shall in no event constitute a
cure or a waiver of any default under this Agreement or the Loan Documents, nor shall it
invalidate any act done pursuant to notice of default, or prejudice the Agency in the exercise of
any right, power, or remedy hereunder or under the Loan Documents, unless in the exercise of
any such right, power, or remedy all obligations of the Developer to Agency are paid and
discharged in full.
ARTICLE 8: REPRESENTATIONS AND WARRANTIES OF DEVELOPER
Section 8.1 Representations and Warranties.
Developer hereby represents and warrants to the Agency as follows:
(a) Organization. Developer is duly organized, validly existing and in good
standing under the laws of the State of California and has the power and authority to own its
property and carry on its business as now being conducted.
(b) Authority of Developer. Developer has full power and authority to
execute and deliver this Agreement and to make and accept the borrowings contemplated
hereunder, to execute and deliver the Loan Documents and all other documents or instruments
executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to
perform and observe the terms and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the
Loan Documents and all other documents or instruments executed and delivered, or to be
executed and delivered, pursuant to this Agreement have been executed and delivered by persons
who are duly authorized to execute and deliver the same for and on behalf of Developer, and all
actions required under Developer's organizational documents and applicable governing law for
the authorization, execution, delivery and performance of this Agreement and the Loan
18
1010\19\344866.3
Documents and all other documents or instruments executed and delivered, or to be executed and
delivered, pursuant to this Agreement, have been duly taken.
(d) Valid Binding Agreements. This Agreement and the Loan Documents and
all other documents or instruments which have been executed and delivered pursuant to or in
connection with this Agreement constitute or, if not yet executed or delivered, will when so
executed and delivered constitute, legal, valid and binding obligations of Developer enforceable
against it in accordance with their respective terms.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of
this Agreement and the Loan Documents or of any other documents or instruments executed and
delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any
provision, condition, covenant or other term hereof or thereof, will conflict with or result in a
breach of any statute, rule or regulation, or any judgment, decree or order of any court, board,
commission or agency whatsoever binding on Developer, or any provision of the organizational
documents of Developer, or will conflict with or constitute a breach of or a default under any
agreement to which Developer is a party, or will result in the creation or imposition of any lien
upon any assets or property of Developer, other than liens established pursuant hereto.
(f) Pending Proceedings. Developer is not in default under any law or
regulation or under any order of any court, board, commission or agency whatsoever, and there
are no claims, actions, suits or proceedings pending or, to the knowledge of Developer,
threatened against or affecting Developer or the Development, at law or in equity, before or by
any court, board, commission or agency whatsoever which might, if determined adversely to
Developer, materially affect Developer's ability to repay the Agency Loan.
(g) Financial Statements. The financial statements of Developer and other
financial data and information furnished by Developer to the Agency fairly present the
information contained therein. As of the date of this Agreement, there has not been any adverse,
material change in the financial condition of Developer from that shown by such financial
statements and other data and information.
ARTICLE 9: GENERAL PROVISIONS
Section 9.1 Relationship of Parties.
Nothing contained in this Agreement shall be interpreted or understood by any of the
Parties, or by any third persons, as creating the relationship of employer and employee, principal
and agent, limited or general partnership, or joint venture between the Agency and the Developer
or its agents, employees or contractors, and the Developer shall at all times be deemed an
independent contractor and shall be wholly responsible for the manner in which it or its agents,
or both, perform the services required of it by the terms of this Agreement. The Developer has
and retains the right to exercise full control of employment, direction, compensation, and
discharge of all persons assisting in the performance of services under the Agreement. In regards
to the construction of the Improvements and sale of the Units, the Developer shall be solely
responsible for all matters relating to payment of its employees, including compliance with
19
1010\19\344866.3
Social Security, withholding, and all other laws and regulations governing such matters, and
shall include requirements in each contract that contractors shall be solely responsible for similar
matters relating to their employees. The Developer shall be solely responsible for its own acts
and those of its agents and employees.
Section 9.2 No Claims.
Nothing contained in this Agreement shall create or justify any claim against the Agency
by any person that the Developer may have employed or with whom the Developer may have
contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the
performance of any work or services with respect to the construction or sale of the Units, and the
Developer shall include similar requirements in any contracts entered into for the construction or
sale of the Units.
Section 9.3 Amendments.
No alteration or variation of the terms of this Agreement shall be valid unless made in
writing by the Parties.
Section 9.4 Indemnification.
Developer shall indemnify, defend, and hold harmless (without limit as to amount)
Agency, the City and their elected officials, board members, officers, employees and agents in
their official capacity (hereinafter collectively referred to as "Indemnitees"), and any of them,
from and against all loss, all risk of loss and all damage (including expense and attorneys fees)
sustained or incurred because of or by reason of any and all claims, demands, suits, actions,
judgments and executions for damages of any and every kind and by whomever and whenever
made or obtained, allegedly caused by, arising out of or relating in any manner to Developer's
actions or defaults pursuant to this Agreement, or construction of the Development and sale of
any Units, and shall protect and defend Indemnitees, and any of them with respect thereto. The
provisions of this section shall survive the expiration of the Term and the termination of this
Agreement.
Section 9.5 Non-Liability of Agency Officials, Employees and Agents.
No member, official, employee or agent of the Agency shall be personally liable to the
Developer in the event of any default or breach by the Agency or for any amount which may
become due to the Developer or its successor or on any obligation under the terms of this
Agreement.
Section 9.6 No Third Party Beneficiaries.
There shall be no third party beneficiaries to this Agreement.
Section 9.7 Discretion Retained By Agency and City.
20
1010\19\3 44866.3
The Agency's execution of this Agreement in no way limits the discretion of the Agency
and City in the permit and approval process in connection with the Development.
Section 9.8 Notices, Demands and Communications.
Formal notices, demands, and communications between the Parties shall be sufficiently
given if and shall not be deemed given unless dispatched by registered or certified mail, postage
prepaid, return receipt requested, or delivered by express delivery service, return receipt
requested, or delivered personally, with deliver receipt to the principal office of the Parties as
follows:
Agency:
Carlsbad Redevelopment Agency
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008
Attn: Executive Director
Developer:
Wave Crest Resorts II, LLC
829 Second Street, #a
Encinitas, California 92024
Attention: William L. Canepa
With a copy to:
Richard A. Gant
1740 AltaVista Way
San Diego, CA 92109
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected Party may from time to time designate by mail as provided in this
section. Receipt shall be deemed to have occurred on the date shown on a written receipt as the
date of delivery or refusal of delivery (or attempted delivery if undeliverable).
Section 9.9 Applicable Law.
This Agreement shall be governed by California law.
Section 9.10 Parties Bound; Covenants Running with the Land.
Except as otherwise limited herein, the provisions of this Agreement shall be binding
upon and inure to the benefit of the Parties and their heirs, executors, administrators, legal
representatives, successors, and assigns. This Agreement is intended to run with the land and
21
1010\19\344866.3
shall bind the Developer and its successors and assigns in the Property and the Development for
the entire Term, and the benefit hereof shall inure to the benefit of the Agency and its successors
and assigns.
Section 9.11 Attorneys' Fees.
If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing
Party will have the right to recover its reasonable attorneys' fees and costs of suit from the other
Party.
Section 9.12 Severabilitv.
If any term of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the provisions shall continue in full force and effect
unless the rights and obligations of the Parties have been materially altered or abridged by such
invalidation, voiding or unenforceability.
Section 9.13 Force Majeure.
In addition to specific provisions of this Agreement, performance by either Party shall not
be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock-
outs; riots; floods; earthquakes; fires; quarantine restrictions; freight embargoes; lack of
transportation; third party lawsuit; or court order; or any other similar causes beyond the control
or without the fault of the Party claiming an extension of time to perform (but not including any
inability by Developer to secure financing). An extension of time for any such cause shall be for
the period of the enforced delay and shall commence to run from the time of the commencement
of the cause. If, however, notice by the party claiming such extension is sent to the other party
more than thirty (30) days after the commencement of the cause, the period shall commence to
run only thirty (30) days prior to the giving of such notice.
Section 9.14 Approvals.
Whenever this Agreement calls for Agency approval, consent, or waiver, the written
approval, consent, or waiver of the Agency Executive Director shall constitute the approval,
consent, or waiver of the Agency, without further authorization required from the Agency Board.
The Agency hereby authorizes the Executive Director to deliver such approvals or consents as
are required by this Agreement, or to waive requirements under this Agreement, on behalf of the
Agency.
Section 9.15 Title of Parts and Sections.
Any titles of the sections or subsections of this Agreement are inserted for convenience of
reference only and shall be disregarded in interpreting any part of the Agreement's provisions.
22
1010\19\344866.3
Section 9.16 Entire Understanding of the Parties.
This Agreement constitutes the entire understanding and agreement of the Parties with
respect to the Agency Loan.
Section 9.17 Multiple Originals; Counterpart.
This Agreement may be executed in multiple originals, each of which is deemed to be an
original, and may be signed in counterparts.
Section 9.18 Time of the Essence.
Time is of the essence in this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
above written.
Developer:
Wave Crest Resorts II, Inc., a California corporation
William L. Canepa, President and Secret
Agency:
Carlsbad Redevelopment Agency, a public body
corporate and politic
Raymond R. Patchett, Executive Director
Approved as to Form:
, Agency Legal Counsel
1010\19\344866.3
23
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
A-l
1010\19\344866.3
09-0250515
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF
CALIFORNIA, COUNTY OF San Diego AND IS DESCRIBED AS FOLLOWS:
A CONDOMINIUM LOCATED ON THE REAL PROPERTY DESCRIBED AS LOT 1
OF CITY OF CARLSBAD TRACT NO. 01-13, IN THE CITY OF
CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING
TO MAP THEREOF NO. 14797, FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY, MAY 17, 2004 AS FILE NO.
2004-0446317 OF OFFICIAL RECORDS, COMPRISED OF:
PARCEL 1:
UNIT 577, AS SHOWN UPON THAT CERTAIN CONDOMINIUM PLAN
FOR LACUNA POINT, AS RECORDED ON JUNE 27, 2005, AS FILE NO.
2005-0538003, IN THE OFFICE OF THE COUNTY RECORDER FOR SAN DIEGO
COUNTY, CALIFORNIA ("CONDOMINIUM PLAN").
PARCEL 2:
AN UNDIVIDED 1/21ST INTEREST AS A TENANT IN COMMON IN THE
UNDIVIDED INTEREST COMMON AREA AS SHOWN AND DEFINED ON THE
CONDOMINIUM PLAN AND AS DESCRIBED IN THE DECLARATION OF
COVENANTS, CONDITIONS AND RESTRICTIONS FOR LACUNA POINT
HOMEOWNERS ASSOCIATION, RECORDED ON JUNE 27, 2005, AS FILE NO.
2005-0538002, IN THE OFFICE OF THE COUNTY RECORDER FOR SAN
DIEGO COUNTY, CALIFORNIA ("DECLARATION"). THE UNDIVIDED
INTEREST COMMON AREA WILL NOT BE OWNED BY LACUNA POINT
HOMEOWNERS ASSOCIATION, A CALIFORNIA NON-PROFIT MUTUAL BENEFIT
CORPORATION ("ASSOCIATION").
PARCEL 3:
NON-EXCLUSIVE EASEMENTS FOR INGRESS, EGRESS, ACCESS, ENJOYMENT,
USE AND SUPPORT OVER THE ASSOCIATION PROPERTY AS DESCRIBED IN
THE DECLARATION AND INDICATED ON THE CONDOMINIUM PLAN, WHICH
WILL BE OWNED BY THE ASSOCIATION.
EXCEPTING THEREFROM THE FOLLOWING:
(a) ALL UNITS, AS SHOWN UPON THE CONDOMINIUM PLAN OTHER THAN
THE UNIT CONVEYED AS PARCEL 1 ABOVE.
(b) THE EXCLUSIVE RIGHT OF POSSESSION AND OCCUPANCY OF ALL
THOSE AREAS DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY AS
DESCRIBED IN THE DECLARATION AND AS SHOWN UPON THE CONDOMINIUM
PLAN WHICH ARE SET ASIDE AND ALLO GATED FOR THE EXCLUSIVE USE
OF OWNERS OF UNITS.
(c) THE EASEMENT AND OTHER RIGHTS RESERVED IN FAVOR OF
09-0250515
DECLARANT AS DESCRIBED IN THE DECLARATION AND ON THE
CONDOMINIUM PLAN
PARCEL 4:
THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION
OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE
ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN,
DESIGNATED AS D-577.
PARCEL 5:
THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION
OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE
ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN,
DESIGNATED AS S-577.
PARCEL 6:
ONE CLASS A MEMBERSHIP IN THE ASSOCIATION.
GRANTEES IN ACCEPTING THIS DEED AND THE CONVEYANCE HEREUNDER DO
HEREBY AGREE, JOINTLY AND SEVERALLY FOR THE BENEFIT OF GRANTOR
AND FOR THE BENEFIT OF THE ASSOCIATION AND EACH AND EVERY ONE
OF THE MEMBERS OF SAID ASSOCIATION THAT GRANTEES WILL PROMPTLY,
FULLY, AND FAITHFULLY COMPLY AND CONFORM TO THE DECLARATION,
THE RULES AND REGULATIONS FROM TIME TO TIME PRESCRIBED
THEREUNDER BY THE BOARD OF DIRECTORS OF THE ASSOCIATION OR ITS
OFFICERS AND IN PARTICULAR, GRANTEES DO HEREBY AGREE, JOINTLY
AND SEVERALLY, TO PROMPTLY PAY IN FULL ANY DUES, FEES OR
ASSESSMENTS LEVIED BY SAID ASSOCIATION ON THE MEMBERSHIP
CONVEYED HEREBY.
THE OBLIGATIONS OF GRANTEES HEREIN SET FORTH SHALL BE COVENANTS
RUNNING WITH THE ABOVE DESCRIBED PROPERTY, IT BEING UNDERSTOOD
THAT SAID MEMBERSHIP IN THE ASSOCIATION, AND THE OBLIGATIONS
HEREOF, WILL AUTOMATICALLY PASS TO GRANTEES' SUCCESSORS IN
TITLE IN THE ABOVE DESCRIBED PROPERTY WHETHER SUCH SUCCESSORS
ACQUIRE TITLE BY FORECLOSURE OR OTHERWISE, AND SHALL BE BINDING
UPON THE GRANTEES ABOVE-NAMED THEIR HEIRS, DEVISEES, EXECUTORS,
ADMINISTRATORS, SUCCESSORS AND ASSIGNS, PROVIDED THAT GRANTEES
AND THEIR SAID SUCCESSORS IN TITLE SHALL BE BOUND BY THE
FOREGOING COVENANTS ONLY AS LONG AS THEY RESPECTIVELY ARE IN
TITLE TO THE ABOVE DESCRIBED PROPERTY.
THE FOLLOWING PROVISIONS (THE "RIGHT TO REPAIR PROVISIONS")
PERTAINING TO MATTERS CONCERNING TITLE 7 OF PART 2 OF DIVISION
2 OF THE CALIFORNIA CIVIL CODE (THE "RIGHT TO REPAIR LAW")
SHALL APPLY TO THE DEED:
(a) GRANTEES ACKNOWLEDGE THAT GRANTOR HAS PROVIDED AND GRANTEES
09-0250515
HAVE RECEIVED THE DOCUMENTS PROVIDED TO GRANTEES IN CONJUNCTION
WITH THIS ORIGINAL TRANSFER OF THE CONDOMINIUM, INCLUDING
GRANTORS'S FIT AND FINISH WARRANTY (THE "FIT AND FINISH
WARRANTY") WHICH INCLUDES A ONE YEAR EXPRESS WARRANTY WHICH
ADDRESSES THE STATUTORY REQUIRED COMPONENTS (CABINETS, MIRRORS,
FLOORING, INTERIOR AND EXTERIOR WALLS, COUNTERTOPS, PAINT
FINISHES AND TRIM), AND GRANTOR'S MAINTENANCE RECOMMENDATION
(AS THE SAME MAY BE MODIFIED OR SUPPLEMENTED FROM TIME TO
TIME). GRANTEES SHALL PROVIDE THE FIT AND FINISH WARRANTY TO
ANY PERSON WHO PURCHASES THE CONDOMINIUM FROM GRANTEES ON OR
BEFORE THE FIRST ANNIVERSARY OF THE DEED RECORDATION DATE, AND
GRANTOR'S MAINTENANCE RECOMMENDATIONS (AS THE SAME MAY BE
AMENDED FROM TIME TO TIME) TO ANY PERSON WHO PURCHASES THE
CONDOMINIUM FROM GRANTEES AT ANY TIME. GRANTEES ACKNOWLEDGE
THEIR OBLIGATION TO FOLLOW THE MAINTENANCE RECOMMENDATIONS
PROVIDED BY GRANTOR, AS WELL AS ANY PRODUCT MANUFACTURERS, AND
COMMONLY ACCEPTED MAINTENANCE PRACTICES.
(b) GRANTOR ADVISES GRANTEES OF THE EXISTENCE OF THE
PRELITIGATION PROCEDURES SET FORTH IN CHAPTER 4 OF THE RIGHT TO
REPAIR LAW AND THAT SUCH PROCEDURES IMPACT THE LEGAL RIGHTS OF
GRANTEES. GRANTEES ACKNOWLEDGE THAT (i) GRANTEES HAVE BEEN
PROVIDED A WRITTEN COPY OF THE RIGHT TO REPAIR LAW, (ii)
GRANTEES HAVE BEEN OFFERED A COMPLETE COPY OF ALL OF PART 2 AND
(iii) A COMPLETE COPY OF PART 2 IS AVAILABLE FROM GRANTOR UPON
REQUEST. GRANTOR INSTRUCTS GRANTEES TO, AND GRANTEES
ACKNOWLEDGES THAT GRANTEES SHALL, PROVIDE SUCH DOCUMENTS TO ANY
SUBSEQUENT PURCHASER OF THE CONDOMINIUM FROM GRANTEES, AND
SHALL REQUIRE ANY SUCH SUBSEQUENT PURCHASER TO PROVIDE SAID
DOCUMENTS TO ANY PERSON OR ENTITY WHO PURCHASES THE CONDOMINIUM
FROM SUCH SUBSEQUENT PURCHASER.
(c) GRANTEES SHALL INDEMNIFY, DEFEND AND HOLD GRANTOR HARMLESS
FROM ANY LOSS, COST OR DAMAGES ARISING FROM GRANTEES' FAILURE
TO CARRY OUT GRANTEES' OBLIGATIONS UNDER THIS DEED.
09-0250516
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF
CALIFORNIA, COUNTY OF San Diego AND IS DESCRIBED AS FOLLOWS:
A CONDOMINIUM LOCATED ON THE REAL PROPERTY DESCRIBED AS LOT 1
OF CITY OF CARLSBAD TRACT NO. 01-13, IN THE CITY OF
CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING
TO MAP THEREOF NO. 14797, FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY, MAY 17, 2004 AS FILE NO.
2004-0446317 OF OFFICIAL RECORDS, COMPRISED OF:
PARCEL 1:
UNIT 579, AS SHOWN UPON THAT CERTAIN CONDOMINIUM PLAN
FOR LAGUNA POINT, AS RECORDED ON JUNE 27, 2005, AS FILE NO.
2005-0538003, IN THE OFFICE OF THE COUNTY RECORDER FOR SAN DIEGO
COUNTY, CALIFORNIA ("CONDOMINIUM PLAN").
PARCEL 2:
AN UNDIVIDED 1/21ST INTEREST AS A TENANT IN COMMON IN THE
UNDIVIDED INTEREST COMMON AREA AS SHOWN AND DEFINED ON THE
CONDOMINIUM PLAN AND AS DESCRIBED IN THE DECLARATION OF
COVENANTS, CONDITIONS AND RESTRICTIONS FOR LAGUNA POINT
HOMEOWNERS ASSOCIATION, RECORDED ON JUNE 27, 2005, AS FILE NO.
2005-0538002, IN THE OFFICE OF THE COUNTY RECORDER FOR SAN
DIEGO COUNTY, CALIFORNIA ("DECLARATION"). THE UNDIVIDED
INTEREST COMMON AREA WILL NOT BE OWNED BY LAGUNA POINT
HOMEOWNERS ASSOCIATION, A CALIFORNIA NON-PROFIT MUTUAL BENEFIT
CORPORATION ("ASSOCIATION").
PARCEL 3:
NON-EXCLUSIVE EASEMENTS FOR INGRESS, EGRESS, ACCESS, ENJOYMENT,
USE AND SUPPORT OVER THE ASSOCIATION PROPERTY AS DESCRIBED IN
THE DECLARATION AND INDICATED ON THE CONDOMINIUM PLAN, WHICH
WILL BE OWNED BY THE ASSOCIATION.
EXCEPTING THEREFROM THE FOLLOWING:
(a) ALL UNITS, AS SHOWN UPON THE CONDOMINIUM PLAN OTHER THAN
THE UNIT CONVEYED AS PARCEL 1 ABOVE.
(b) THE EXCLUSIVE RIGHT OF POSSESSION AND OCCUPANCY OF ALL
THOSE AREAS DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY AS
DESCRIBED IN THE DECLARATION AND AS SHOWN UPON THE CONDOMINIUM
PLAN WHICH ARE SET ASIDE AND ALLO CATED FOR THE EXCLUSIVE USE
OF OWNERS OF UNITS.
(c) THE EASEMENT AND OTHER RIGHTS RESERVED IN FAVOR OF
09-0250516
DECLARANT AS DESCRIBED IN THE DECLARATION AND ON THE
CONDOMINIUM PLAN
PARCEL 4:
THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION
OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE
ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN,
DESIGNATED AS D-579.
PARCEL 5:
THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION
OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE
ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN,
DESIGNATED AS S-579.
PARCEL 6:
ONE CLASS A MEMBERSHIP IN THE ASSOCIATION.
GRANTEES IN ACCEPTING THIS DEED AND THE CONVEYANCE HEREUNDER DO
HEREBY AGREE, JOINTLY AND SEVERALLY FOR THE BENEFIT OF GRANTOR
AND FOR THE BENEFIT OF THE ASSOCIATION AND EACH AND EVERY ONE
OF THE MEMBERS OF SAID ASSOCIATION THAT GRANTEES WILL PROMPTLY,
FULLY, AND FAITHFULLY COMPLY AND CONFORM TO THE DECLARATION,
THE RULES AND REGULATIONS FROM TIME TO TIME PRESCRIBED
THEREUNDER BY THE BOARD OF DIRECTORS OF THE ASSOCIATION OR ITS
OFFICERS AND IN PARTICULAR, GRANTEES DO HEREBY AGREE, JOINTLY
AND SEVERALLY, TO PROMPTLY PAY IN FULL ANY DUES, FEES OR
ASSESSMENTS LEVIED BY SAID ASSOCIATION ON THE MEMBERSHIP
CONVEYED HEREBY.
THE OBLIGATIONS OF GRANTEES HEREIN SET FORTH SHALL BE COVENANTS
RUNNING WITH THE ABOVE DESCRIBED PROPERTY, IT BEING UNDERSTOOD
THAT SAID MEMBERSHIP IN THE ASSOCIATION, AND THE OBLIGATIONS
HEREOF, WILL AUTOMATICALLY PASS TO GRANTEES' SUCCESSORS IN
TITLE IN THE ABOVE DESCRIBED PROPERTY WHETHER SUCH SUCCESSORS
ACQUIRE TITLE BY FORECLOSURE OR OTHERWISE, AND SHALL BE BINDING
UPON THE GRANTEES ABOVE-NAMED THEIR HEIRS, DEVISEES, EXECUTORS,
ADMINISTRATORS, SUCCESSORS AND ASSIGNS, PROVIDED THAT GRANTEES
AND THEIR SAID SUCCESSORS IN TITLE SHALL BE BOUND BY THE
FOREGOING COVENANTS ONLY AS LONG AS THEY RESPECTIVELY ARE IN
TITLE TO THE ABOVE DESCRIBED PROPERTY.
THE FOLLOWING PROVISIONS (THE "RIGHT TO REPAIR PROVISIONS")
PERTAINING TO MATTERS CONCERNING TITLE 7 OF PART 2 OF DIVISION
2 OF THE CALIFORNIA CIVIL CODE (THE "RIGHT TO REPAIR LAW")
SHALL APPLY TO THE DEED:
(a) GRANTEES ACKNOWLEDGE THAT GRANTOR HAS PROVIDED AND GRANTEES
09-0250516
HAVE RECEIVED THE DOCUMENTS PROVIDED TO GRANTEES IN CONJUNCTION
WITH THIS ORIGINAL TRANSFER OF THE CONDOMINIUM, INCLUDING
GRANTORS'S FIT AND FINISH WARRANTY (THE "FIT AND FINISH
WARRANTY") WHICH INCLUDES A ONE YEAR EXPRESS WARRANTY WHICH
ADDRESSES THE STATUTORY REQUIRED COMPONENTS (CABINETS, MIRRORS,
FLOORING, INTERIOR AND EXTERIOR WALLS, COUNTERTOPS, PAINT
FINISHES AND TRIM), AND GRANTOR'S MAINTENANCE RECOMMENDATION
(AS THE SAME MAY BE MODIFIED OR SUPPLEMENTED FROM TIME TO
TIME). GRANTEES SHALL PROVIDE THE FIT AND FINISH WARRANTY TO
ANY PERSON WHO PURCHASES THE CONDOMINIUM FROM GRANTEES ON OR
BEFORE THE FIRST ANNIVERSARY OF THE DEED RECORDATION DATE, AND
GRANTOR'S MAINTENANCE RECOMMENDATIONS (AS THE SAME MAY BE
AMENDED FROM TIME TO TIME) TO ANY PERSON WHO PURCHASES THE
CONDOMINIUM FROM GRANTEES AT ANY TIME. GRANTEES ACKNOWLEDGE
THEIR OBLIGATION TO FOLLOW THE MAINTENANCE RECOMMENDATIONS
PROVIDED BY GRANTOR, AS WELL AS ANY PRODUCT MANUFACTURERS, AND
COMMONLY ACCEPTED MAINTENANCE PRACTICES.
(b) GRANTOR ADVISES GRANTEES OF THE EXISTENCE OF THE
PRELITIGATION PROCEDURES SET FORTH IN CHAPTER 4 OF THE RIGHT TO
REPAIR LAW AND THAT SUCH PROCEDURES IMPACT THE LEGAL RIGHTS OF
GRANTEES. GRANTEES ACKNOWLEDGE THAT (i) GRANTEES HAVE BEEN
PROVIDED A WRITTEN COPY OF THE RIGHT TO REPAIR LAW, (ii)
GRANTEES HAVE BEEN OFFERED A COMPLETE COPY OF ALL OF PART 2 AND
(iii) A COMPLETE COPY OF PART 2 IS AVAILABLE FROM GRANTOR UPON
REQUEST. GRANTOR INSTRUCTS GRANTEES TO, AND GRANTEES
ACKNOWLEDGES THAT GRANTEES SHALL, PROVIDE SUCH DOCUMENTS TO ANY
SUBSEQUENT PURCHASER OF THE CONDOMINIUM FROM GRANTEES, AND
SHALL REQUIRE ANY SUCH SUBSEQUENT PURCHASER TO PROVIDE SAID
DOCUMENTS TO ANY PERSON OR ENTITY WHO PURCHASES THE CONDOMINIUM
FROM SUCH SUBSEQUENT PURCHASER.
(c) GRANTEES SHALL INDEMNIFY, DEFEND AND HOLD GRANTOR HARMLESS
FROM ANY LOSS, COST OR DAMAGES ARISING FROM GRANTEES' FAILURE
TO CARRY OUT GRANTEES' OBLIGATIONS UNDER THIS DEED.
09-0250514
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF
CALIFORNIA, COUNTY OF San Diego AND IS DESCRIBED AS FOLLOWS:
A CONDOMINIUM LOCATED ON THE REAL PROPERTY DESCRIBED AS LOT 1
OF CITY OF CARLSBAD TRACT NO. 01-13, IN THE CITY OF
CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING
TO MAP THEREOF NO. 14797, FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY, MAY 17, 2004 AS FILE NO.
2004-0446317 OF OFFICIAL RECORDS, COMPRISED OF:
PARCEL 1:
UNIT 571, AS SHOWN UPON THAT CERTAIN CONDOMINIUM PLAN
FOR LACUNA POINT, AS RECORDED ON JUNE 27, 2005, AS FILE NO.
2005-0538003, IN THE OFFICE OF THE COUNTY RECORDER FOR SAN DIEGO
COUNTY, CALIFORNIA ("CONDOMINIUM PLAN").
PARCEL 2:
AN UNDIVIDED 1/21ST INTEREST AS A TENANT IN COMMON IN THE
UNDIVIDED INTEREST COMMON AREA AS SHOWN AND DEFINED ON THE
CONDOMINIUM PLAN AND AS DESCRIBED IN THE DECLARATION OF
COVENANTS, CONDITIONS AND RESTRICTIONS FOR LACUNA POINT
HOMEOWNERS ASSOCIATION, RECORDED ON JUNE 27, 2005, AS FILE NO.
2005-0538002, IN THE OFFICE OF THE COUNTY RECORDER FOR SAN
DIEGO COUNTY, CALIFORNIA ("DECLARATION"). THE UNDIVIDED
INTEREST COMMON AREA WILL NOT BE OWNED BY LACUNA POINT
HOMEOWNERS ASSOCIATION, A CALIFORNIA NON-PROFIT MUTUAL BENEFIT
CORPORATION ("ASSOCIATION").
PARCEL 3:
NON-EXCLUSIVE EASEMENTS FOR INGRESS, EGRESS, ACCESS, ENJOYMENT,
USE AND SUPPORT OVER THE ASSOCIATION PROPERTY AS DESCRIBED IN
THE DECLARATION AND INDICATED ON THE CONDOMINIUM PLAN, WHICH
WILL BE OWNED BY THE ASSOCIATION.
EXCEPTING THEREFROM THE FOLLOWING:
(a) ALL UNITS, AS SHOWN UPON THE CONDOMINIUM PLAN OTHER THAN
THE UNIT CONVEYED AS PARCEL 1 ABOVE.
(b) THE EXCLUSIVE RIGHT OF POSSESSION AND OCCUPANCY OF ALL
THOSE AREAS DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY AS
DESCRIBED IN THE DECLARATION AND AS SHOWN UPON THE CONDOMINIUM
PLAN WHICH ARE SET ASIDE AND ALLO GATED FOR THE EXCLUSIVE USE
OF OWNERS OF UNITS.
(c) THE EASEMENT AND OTHER RIGHTS RESERVED IN FAVOR OF
09-0250514
DECLARANT AS DESCRIBED IN THE DECLARATION AND ON THE
CONDOMINIUM PLAN
PARCEL 4:
THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION
OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE
ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN,
DESIGNATED AS D-571.
PARCEL 5:
THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION
OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE
ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN,
DESIGNATED AS S-571.
PARCEL 6:
ONE CLASS A MEMBERSHIP IN THE ASSOCIATION.
GRANTEES IN ACCEPTING THIS DEED AND THE CONVEYANCE HEREUNDER DO
HEREBY AGREE, JOINTLY AND SEVERALLY FOR THE BENEFIT OF GRANTOR
AND FOR THE BENEFIT OF THE ASSOCIATION AND EACH AND EVERY ONE
OF THE MEMBERS OF SAID ASSOCIATION THAT GRANTEES WILL PROMPTLY,
FULLY, AND FAITHFULLY COMPLY AND CONFORM TO THE DECLARATION,
THE RULES AND REGULATIONS FROM TIME TO TIME PRESCRIBED
THEREUNDER BY THE BOARD OF DIRECTORS OF THE ASSOCIATION OR ITS
OFFICERS AND IN PARTICULAR, GRANTEES DO HEREBY AGREE, JOINTLY
AND SEVERALLY, TO PROMPTLY PAY IN FULL ANY DUES, FEES OR
ASSESSMENTS LEVIED BY SAID ASSOCIATION ON THE MEMBERSHIP
CONVEYED HEREBY.
THE OBLIGATIONS OF GRANTEES HEREIN SET FORTH SHALL BE COVENANTS
RUNNING WITH THE ABOVE DESCRIBED PROPERTY, IT BEING UNDERSTOOD
THAT SAID MEMBERSHIP IN THE ASSOCIATION, AND THE OBLIGATIONS
HEREOF, WILL AUTOMATICALLY PASS TO GRANTEES' SUCCESSORS IN
TITLE IN THE ABOVE DESCRIBED PROPERTY WHETHER SUCH SUCCESSORS
ACQUIRE TITLE BY FORECLOSURE OR OTHERWISE, AND SHALL BE BINDING
UPON THE GRANTEES ABOVE-NAMED THEIR HEIRS, DEVISEES, EXECUTORS,
ADMINISTRATORS, SUCCESSORS AND ASSIGNS, PROVIDED THAT GRANTEES
AND THEIR SAID SUCCESSORS IN TITLE SHALL BE BOUND BY THE
FOREGOING COVENANTS ONLY AS LONG AS THEY RESPECTIVELY ARE IN
TITLE TO THE ABOVE DESCRIBED PROPERTY.
THE FOLLOWING PROVISIONS (THE "RIGHT TO REPAIR PROVISIONS")
PERTAINING TO MATTERS CONCERNING TITLE 7 OF PART 2 OF DIVISION
2 OF THE CALIFORNIA CIVIL CODE (THE "RIGHT TO REPAIR LAW")
SHALL APPLY TO THE DEED:
(a) GRANTEES ACKNOWLEDGE THAT GRANTOR HAS PROVIDED AND GRANTEES
09-0250514
HAVE RECEIVED THE DOCUMENTS PROVIDED TO GRANTEES IN CONJUNCTION
WITH THIS ORIGINAL TRANSFER OF THE CONDOMINIUM, INCLUDING
GRANTORS'S FIT AND FINISH WARRANTY (THE "FIT AND FINISH
WARRANTY") WHICH INCLUDES A ONE YEAR EXPRESS WARRANTY WHICH
ADDRESSES THE STATUTORY REQUIRED COMPONENTS (CABINETS, MIRRORS,
FLOORING, INTERIOR AND EXTERIOR WALLS, COUNTERTOPS, PAINT
FINISHES AND TRIM), AND GRANTOR'S MAINTENANCE RECOMMENDATION
(AS THE SAME MAY BE MODIFIED OR SUPPLEMENTED FROM TIME TO
TIME) . GRANTEES SHALL PROVIDE THE FIT AND FINISH WARRANTY TO
ANY PERSON WHO PURCHASES THE CONDOMINIUM FROM GRANTEES ON OR
BEFORE THE FIRST ANNIVERSARY OF THE DEED RECORDATION DATE, AND
GRANTOR'S MAINTENANCE RECOMMENDATIONS (AS THE SAME MAY BE
AMENDED FROM TIME TO TIME) TO ANY PERSON WHO PURCHASES THE
CONDOMINIUM FROM GRANTEES AT ANY TIME. GRANTEES ACKNOWLEDGE
THEIR OBLIGATION TO FOLLOW THE MAINTENANCE RECOMMENDATIONS
PROVIDED BY GRANTOR, AS WELL AS ANY PRODUCT MANUFACTURERS, AND
COMMONLY ACCEPTED MAINTENANCE PRACTICES.
(b) GRANTOR ADVISES GRANTEES OF THE EXISTENCE OF THE
PRELITIGATION PROCEDURES SET FORTH IN CHAPTER 4 OF THE RIGHT TO
REPAIR LAW AND THAT SUCH PROCEDURES IMPACT THE LEGAL RIGHTS OF
GRANTEES. GRANTEES ACKNOWLEDGE THAT (i) GRANTEES HAVE BEEN
PROVIDED A WRITTEN COPY OF THE RIGHT TO REPAIR LAW, (ii)
GRANTEES HAVE BEEN OFFERED A COMPLETE COPY OF ALL OF PART 2 AND
(iii) A COMPLETE COPY OF PART 2 IS AVAILABLE FROM GRANTOR UPON
REQUEST. GRANTOR INSTRUCTS GRANTEES TO, AND GRANTEES
ACKNOWLEDGES THAT GRANTEES SHALL, PROVIDE SUCH DOCUMENTS TO ANY
SUBSEQUENT PURCHASER OF THE CONDOMINIUM FROM GRANTEES, AND
SHALL REQUIRE ANY SUCH SUBSEQUENT PURCHASER TO PROVIDE SAID
DOCUMENTS TO ANY PERSON OR ENTITY WHO PURCHASES THE CONDOMINIUM
FROM SUCH SUBSEQUENT PURCHASER.
(c) GRANTEES SHALL INDEMNIFY, DEFEND AND HOLD GRANTOR HARMLESS
FROM ANY LOSS, COST OR DAMAGES ARISING FROM GRANTEES' FAILURE
TO CARRY OUT GRANTEES' OBLIGATIONS UNDER THIS DEED.