Portuguese Bend Club Homeowners Association - Construction Loan 1111•
CONSTRUCTION LOAN AGREEMENT
THIS AGREEMENT, dated as of August 3, 1999, is executed by the undersigned,the
PORTUGUESE BEND CLUB HOMEOWNERS ASSOCIATION, a California corporation(referred to
herein as "Borrower"), for the purpose of obtaining a Loan(the "Loan") from BAY CITIES NATIONAL
BANK, a national association("Lender"), which loan is concurrently being assigned to and assumed by
the RANCHO PALOS VERDES REDEVELOPMENT AGENCY, a public body, corporate and politic,
to be evidenced by a note of Borrower in favor of Lender and secured by a deed of trust encumbering
Borrower's easement interests in the real property in the City of Rancho Palos Verdes, County of Los
Angeles, State of California(the "Property"), the legal description of which is set forth on Exhibit A
hereto and incorporated herein by this reference.
In consideration of the making of the Loan, Borrower agrees as follows:
1. In order to consummate the Loan, Borrower will hand Lender the following
documents, items and funds, together with any additional documents, instructions and funds necessary to
comply with this Agreement:
(a) Promissory Note in form satisfactory to Lender in the principal amount of
Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000.00) (the "Note"), dated as written. The
Note shall not bear interest except upon Borrower's default, and shall be payable in 180 equal monthly
installments, commencing the first day of the calendar month 12 months after the Improvements (as
defined below) have been substantially completed.
(b) Deed of Trust in form satisfactory to Lender executed by Borrower,
covering Borrower's easement interest in the Property and securing the Note (the "Deed of Trust").
(c) Security Agreement and Financing Statement in form reasonably
satisfactory to Lender covering all personal property belonging to Borrower now or hereafter located on
or used in connection with the Property.
(d) Public liability, builder's risk, course of construction, completed
operations and workers' compensation insurance policies in amounts and form and written by insurance
companies reasonably acceptable to Lender(as further described in paragraphp, below).
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(e) Plans and specifications for the construction of sewer system
improvements on the Property (the "Improvements"),reasonably acceptable to Lender, approved by the
appropriate governmental authorities and the general contractor, if any.
(f) Cost breakdown for the Improvements setting forth the estimated cost of
construction, on a form reasonably acceptable to Lender, and a Construction Schedule in form
reasonably satisfactory to Lender showing estimated dates of the initiation and completion of each major
phase of the construction.
(g) Evidence satisfactory to Lender that Borrower has sufficient revenues to
pay the debt service on the Loan. Such evidence may include, at Lender's option, Borrower's annual
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budget, and evidence of special assessments levied upon the members of Borrower for payment of the
debt service, and ratification by Borrower's board of directors of same.
(h) In the event the amount available for construction purposes is less than the
estimated cost of construction as shown on the cost breakdown, Borrower will deliver to Lender a sum
equal to such difference,to be disbursed in the manner specified in paragraph 3 hereof before
disbursement of any of the construction funds.
(i) Assignment of Contracts and Plans and Specifications in form reasonably
satisfactory to Lender.
(j) A fully executed copy of the general contract(s) for the Improvements, if
any.
(k) Copies of all governmental permits and approvals required for
construction of the Improvements.
(1) Such other documents and instruments as Lender shall reasonably require.
Those documents,reports, instruments,papers, data, information and forms of evidence
specified in subparagraphs 1(a), 1(b), 1(c)and 1(h) are hereinafter referred to as the "Loan Documents."
2. Lender, when it holds the items specified in paragraph 1, shall consummate the
Loan and make payments on account thereof, as follows and in accordance herewith:
(a) To pay Loan costs and expenses, including but not limited to the
following:
(i) Premium on insurance policies(if not provided by Borrower);
(ii) Payment of costs and expenses incurred to Lender's disbursement
authorization service;
(iii) Recording fees and filing fees in connection with the Loan
Documents.
(b) Construction Funds. To pay for completion of the Improvements specified
in the plans and specifications, in the sum of$750,000.00 (less the amounts paid for Loan costs
described above).
Except as otherwise provided, any assignment or transfer, voluntary or involuntary, of this Agreement or
of any right hereunder shall not be binding upon or in any way affect Lender without its prior written
consent, and Lender may advance the moneys herein provided for, as herein set forth,notwithstanding
any such assignment or transfer.
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3. Construction Funds shall be disbursed upon occurrence of the conditions set forth
above in accordance with the terms of this paragraph to pay for items listed in the cost breakdown
furnished to Lender pursuant to paragraph 1, the amount to be disbursed for each item not to exceed the
amount specified therefor in such cost breakdown. The Loan shall not be used to pay for any amounts or
items of expense not listed in the cost breakdown. Neither the general contractor(s) executing or
acknowledging this Agreement("Contractor(s)") (as identified below on the signature page), nor
Borrower shall change or consent to any material change of the plans and specifications without the
prior written consent of Lender,not to be unreasonably withheld or delayed. As used herein, a "material
change" is one which increases or decreases the overall costs of the project by more than$5,000.00 or
which, when taken with all prior non-material changes, will result in an increase or decrease in the cost
of the project of$10,000.00 or more. Lender will not unreasonably withhold or delay consent to an
increase in the contract price due to the discovery of rock,provided that the Loan shall stay in balance in
accordance with the provisions of paragraph 11 hereof. Amounts to be disbursed pursuant to this
paragraph shall be paid to the following persons from time to time as construction work progresses,
upon presentation to Lender of written Loan Draw Requests signed by two (2) authorized persons:
(a) Persons named in such order, who have furnished labor, services and/or
materials theretofore used in or related to the construction project.
(b) Contractor(s), for reimbursement of prior payment for labor, services
and/or materials theretofore used in or related to the construction project, upon receipt by Lender of
evidence satisfactory to it, showing such prior payment.
The following are hereby designated as persons authorized to sign written Loan Draw Requests, in
accordance with the terms of this Agreement, and Borrower, with the consent of Lender, shall have the
sole right to revoke such designation, and substitute any other person as the person authorized to sign
such order:
Michael Barth ,41
Person Authorized to Sign Specimen Signature Above
AO ..
Gale Lovrich dow -
Person Authorized to Sign Specimen Si. atur- A bove
John McCarthy ,../1 < < S(
Person Authorized to Sign pecimen Signature Above
Steve Cummins
Person Authorized to Sign Speci en Signature Above
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1110 41)
Lender shall have the right to hire, at the cost and expense of Borrower(which cost and
expense shall be reasonable and customary for the services rendered), a disbursement authorization
service or similar agent or contractor to review the Loan Draw Requests to confirm that requests are
acceptable for payment and that the terms and conditions hereof have been satisfied. At Lender's sole
and absolute option,the disbursement authorization service may also be a representative of Borrower in
performing similar oversight services with respect to the Contractor(s). The cost and expense of such
disbursement authorization service shall be charged against the Loan.
Lender will disburse to Contractor(s), one time per month, sums necessary to reimburse
Contractor(s) for sums actually expended by Contractor(s) during the prior month. Monthly applications
for payment shall be in writing and shall be accompanied by a Loan Draw Request, receipted invoices,
signed unconditional mechanic's lien waivers meeting all the requirements of Civil Code Section 3262,
and such other evidence of actual payment as Lender shall reasonably require. All disbursements shall
be net of retentions in the sum of 10%of the amount of each invoice. If Borrower's Loan Draw Request
is timely received by Lender and is complete and acceptable to Lender and the disbursement
authorization service, Lender shall use its best efforts to deliver progress payments within 15 days after
receipt of a Loan Draw Request.
Direct payments to Contractor(s)for supervision and overhead items and for non-contract
labor shall be made on a voucher basis. Final payment to Contractor(s) shall be made sixty-five(65)
days after recordation of a valid Notice of Completion at the direction of Borrower and presentation of
evidence satisfactory to Lender that the work is complete and that all mechanic's liens, if any, have been
discharged or bonded.
Upon receipt of a properly signed Loan Draw Request, Lender is authorized to act
thereon without further inquiry. Notwithstanding any provision hereof to the contrary, Lender may
require prior to disbursement of any funds hereunder: (1)the submission of proof of the delivery to the
site of and/or incorporation into the work of improvement of all labor and/or materials, and the
submission of labor and/or materials releases on forms reasonably satisfactory to Lender, as well as such
other supporting affidavits, invoices and/or statements as Lender may specify; (2)the submission by
Borrower to Lender of the names and addresses of all persons who have or will perform or furnish any
work, labor or materials in connection with the work of improvement; (3) the submission of proof that a
period of twenty(20)days has expired after the furnishing of the labor, services and/or materials for
which each Loan Draw Request is presented and that no preliminary notice describing such labor,
services and/or materials has been served upon Lender except by the person named in the Loan Draw
Request; and (4) evidence of prior payment of the sums for which reimbursement is sought. Lender
reserves the right to issue joint checks.
4. All disbursement obligations are subject to the provisions of this Agreement and,
in particular,paragraphs 10 and 13 hereof. Lender reserves the right to modify the disbursement
method, subject to the reasonable approval of Borrower and Contractor(s).
5. Borrower agrees to deliver, or cause to be delivered to Lender:
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(a) A Project Summary detailing the status of the project including percentage
IIIof completion by phase and construction budget category,percentage of construction funds expended to
date (including sums for which reimbursement is being sought) and any deviations from budget or time
schedules. Such reports shall also include information with respect to any subcontractor defaults,
strikes, inability to obtain materials or other material matters which might or could either delay
construction or increase the cost thereof. Such Project Summaries shall be submitted monthly or may be
incorporated into the Loan Draw Requests.
(b) Copies of all other reports and communications received from the
Contractor(s)and/or Borrower's construction manager(the "Construction Manager")with respect to the
project. Such matters shall be submitted as received.
6. Provided that there then exists no default hereunder or under the Note or Deed of
Trust, upon the completion of the proposed construction, free of liens and claims and the expiration of
applicable lien periods,the amount of any balance remaining in the amount available for construction
and any other amounts not otherwise disbursed pursuant to paragraph 3 hereof shall be retained by
Lender and applied in reduction of the principal balance of the Note.
7. Borrower shall carry out the construction work in conformity with all applicable
laws, including all applicable federal and state occupation, safety and health standards, and, if applicable
to the construction,prevailing wage laws.
8. Borrower agrees to commence construction of the Improvements promptly, but no
0 more than thirty (30) days after recordation of the Deed of Trust and obtaining the items set forth in
paragraph 1, above, and to continue such construction with reasonable speed and in a workmanlike
manner, and in compliance with all applicable legal requirements, including, without limitation,the
Rancho Palos Verdes municipal code. Borrower will complete the Improvements promptly, in
accordance with the plans and specifications, and with all requirements of all governmental authorities
having or asserting jurisdiction, and will pay the cost thereof. Borrower agrees that all Improvements
shall be completed no later than September 1, 2000, and that Lender shall have no obligation to disburse
any additional loan funds after that date(except for the final payment as provided in paragraph 3,
above), and if the Improvements are not complete by such date, Lender shall have the right to declare the
Note immediately due and payable; provided that the time for completion shall be extended for as long
as Borrower shall be prevented from completing the construction by delays beyond Borrower's control,
including but not limited to flood, earthquake, fire, acts of God, war, strike, labor or material shortage,
epidemic and civil commotion("Force Majeure"); provided, further, failure regardless of cause to
complete construction within 3 years after the date of this Agreement shall, at Lender's election,
constitute a non-curable breach hereof. For purposes hereof, all the work shall be deemed "completed"
when all improvements described in the plans and specifications have been constructed, and a valid
Notice of Completion has been recorded by Borrower and all mechanic's liens, if any, have been
discharged or bonded. If there is any difference between any such prescribed specifications and govern-
mental requirements and the plans and specifications furnished pursuant hereto,then the requirements of
whichever thereof are the higher shall be met in construction of the Improvements. Borrower, and any
Contractor(s) or Borrower's Construction Manager, shall notify Lender at least one week prior to the
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initiation of each major phase of construction as set forth on the Construction Schedule furnished to
Lender pursuant to paragraph 1.
9. After completion of all construction and development by Borrower of all of the
Improvements, Lender shall, promptly following written request by Borrower therefor, furnish Borrower
with a Certificate of Completion. The Certificate of Completion shall be in the form attached hereto as
Exhibit C, and shall be in such form as is necessary to permit it to be recorded in the County Recorder's
Office of Los Angeles County. Such Certificate of Completion shall not constitute evidence of
compliance with or satisfaction of any obligation of Lender to any holder of a mortgage, trust deed or
other security instrument, nor shall it constitute satisfactory repayment of the Loan. Such Certificate of
Completion shall not be construed as a notice of completion as described in California Civil Code
Section 3093.
10. Borrower makes the following representations and warranties as of the date of this
Agreement, without duty of inquiry or investigation, and agrees that such representations and warranties
shall survive and continue thereafter:
(a) Authority. Borrower has complied with all laws and regulations
concerning its organization, existence and transaction of business. Borrower has the right and power to
own the Property and the Improvements thereon as contemplated in the Loan Documents. Borrower
has, or at all appropriate times shall have,properly obtained all permits, licenses and approvals
necessary to construct, occupy and operate the Improvements and in so doing has, or shall have (as
appropriate), complied with the plans and specifications for construction and all other applicable
111 statutes, laws, regulations and ordinances.
(b) Enforceability. Borrower has full right, power and authority to execute
and deliver the Loan Documents and to perform the undertakings of Borrower contained in the Loan
Documents. The Loan Documents constitute valid and binding obligations of Borrower which are
legally enforceable in accordance with their terms. The obligations of Borrower under all Loan
Documents, including specifically the Note, shall be joint and several.
(c) No Breach. None of the undertakings of Borrower contained in the Loan
Documents violates any of the plans and specifications for construction or any other applicable statute,
law,regulation or ordinance or any order or ruling of any court or governmental entity, or conflicts with,
or constitutes a breach or default under, any agreement by which Borrower is, or the Property and
improvements thereon are, bound or regulated.
(d) Financial Information. All financial information delivered to Lender,
including, without limit, information relating to Borrower,the Property,the Improvements thereon, any
partner, limited partners or joint venturers of Borrower, or any guarantor, fairly and accurately
represents such financial condition and has been prepared in accordance with generally accepted
accounting principles consistently applied, unless otherwise noted in such information. No material
adverse change in such financial condition has occurred.
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(e) Proceedings. To the best of Borrower's knowledge, Borrower is not in
IIIviolation of any statute, law, regulation or ordinance, or of any order of any court or governmental
entity. Borrower has no knowledge of any claims, actions or proceedings pending or threatened against
Borrower or affecting the Property or improvements thereon other than those disclosed to Lender in
writing.
(f) Accuracy. To the best of Borrower's knowledge, all documents, reports,
instruments, papers, data, information and forms of evidence delivered to Lender with respect to the
Loan are accurate and correct, are complete insofar as completeness may be necessary to give Lender
true and accurate knowledge of the subject matter thereof, and do not contain any misrepresentation or
omission. Lender may rely on such reports, documents, instruments,papers, data, information and
forms of evidence without any investigation or inquiry, and any payment made by Lender in reliance
thereon shall be a complete release in its favor for all sums so paid.
(g) Adequacy of Loan. To the best of Borrower's knowledge, the amount
available for construction purposes is not less than the amount necessary to: (i)pay all costs to be
incurred in connection with the completion of the construction of the Improvements in accordance with
the Loan Documents, (ii) pay all sums which may accrue under the Loan Documents prior to repayment
of the Loan including, without limit, interest on the Loan, and(iii)enable Borrower to perform and
satisfy all of the covenants of Borrower contained in the Loan Documents.
(h) Taxes. Borrower has filed all federal, state, county and municipal tax
returns required to have been filed by Borrower, and has paid all taxes which have become due pursuant
• to such returns or to any notice of assessment received by Borrower, and Borrower has no knowledge of
any basis for additional assessment with respect to such taxes.
(i) Impairment of Security. No materials, equipment, fixtures, or any other
part of the Improvements shall be purchased or installed under conditional sales agreements, leases, or
under other arrangements wherein the right is reserved or accrues to anyone to remove or to repossess
any such items.
(j) Examination. Borrower is familiar with all of the plans and specifications
for construction set forth in the Loan Documents. The construction of the Improvements will in all
material respects conform to and comply with the plans and specifications for construction furnished to
Lender.
11. In the event of the filing with Lender of a stop notice or the recording of a
mechanic's lien pursuant to Title 15, Part 4, Division 3 of the Civil Code of the State of California
relating to works of improvement upon real property, Lender may summarily refuse to honor any orders
for payment pursuant to this Agreement, and in the event Borrower fails to furnish Lender a bond
causing such notice or lien to be released, within ten(10) days of notice from Lender to do so, such
failure shall at the option of Lender constitute a default under the terms of this Agreement.
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411)
12. As provided in paragraph 1(g), Lender shall advance the proceeds of the Loan
after disbursement of all funds (if any are necessary) deposited with Lender by Borrower. Such funds
shall be deposited into a fund to be created by Lender to be known as the "Construction Fund." If and
whenever Lender shall determine and notify Borrower that the amount available for construction
purposes, after deduction of amounts theretofore paid out pursuant hereto, is less than the amount
required fully to complete and pay for the Improvements, and Lender shall demand that Borrower
deposit with Lender an amount equal to such deficiency as estimated by Lender,then and in that event
Borrower shall comply with such demand within ten(10)days from the date thereof,and the reasonable
judgment of Lender shall be final and conclusive in this regard.
13. Lender and its agents shall have the right at all times to enter upon the Property
during the period of construction and, if Lender reasonably determines that the work is not in
conformance with the plans and specifications and the terms of this Agreement, Lender shall have the
right to stop the work and order its replacement whether or not the unsatisfactory work has theretofore
been incorporated in the Improvements, and to withhold all further disbursements until such work is
satisfactory to it; and if the work is not made satisfactory to Lender within fifteen(15) calendar days
from the date of stoppage by Lender, such failure to do so shall constitute a default by Borrower under
the terms of this Agreement; provided,however,that if the nature of the correction is such that it
requires more than fifteen(15)calendar days to correct,then no default shall exist if, within such 15-day
period, Borrower or Contractor(s) commences such correction and pursues it diligently to completion
thereafter. Borrower agrees that Lender is under no obligation to construct or supervise construction of
the Improvements and that any inspection by Lender of the construction of the Improvements is for the
sole purpose of protecting the security of Lender, and that such inspection is not to be construed as a
representation by Lender that there is or will be a strict compliance on the part of Borrower with plans
and specifications, or that the construction is or will be free from faulty material or workmanship.
Borrower will make or cause to be made such other independent inspections as Borrower may desire for
its own protection.
14. If Borrower fails to cure a default in the performance of any of the terms,
covenants and conditions contained in this Agreement, or any other joint and/or several obligation or
obligations of Borrower, or any of them, to Lender, within 10 days after receipt of written notice from
Lender(or, if such cure cannot be completed within said 10 day period, if Borrower fails to commence
to cure such default within such 10 day period and thereafter to diligently prosecute such cure to
completion),then all sums disbursed or advanced by Lender shall, at the option of Lender, immediately
become due and payable and Lender shall have no obligation to disburse any further funds and shall be
released from any and all obligations to Borrower, or any of them, under the terms of this Agreement.
15. Borrower does hereby irrevocably appoint,designate, empower and authorize
Lender as its Agent, coupled with an interest,to sign and file for record any notice or written document
that it may deem necessary to file or record to protect its security or interests hereunder.
16. Lender shall in no way be liable for any acts or omissions of Borrower, agent,
Contractor(s)or any person furnishing labor and/or materials used in or related to such construction.
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17. Borrower hereby agrees to, and shall defend (with counsel reasonably approved
roved
by the Lender), indemnify and hold Lender, the Rancho Palos Verdes enc Redevelopment A and the
p Agency,
City harmless from and against all liabilities, losses, damages,costs, expenses, or liabilities, including
reasonable attorney's fees and court costs, arising from the construction of the Improvements, including
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without limitation, any act or omission of Borrower,the project engineer, Contractor(s), any agent a ent of
any of them, or any person furnishing labor and/or materials used in or related to such construction.
Lender shall have no liability whatsoever for any acts or omissions of Borrower or its project engineer,
. g ,
contractors (including the Contractor(s)), or agents, or any one of them, or any othererson furnishing
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services, labor and/or material to Borrower in connection with the Property.
18. Should work cease on the Improvements, for a period of 20 days, for any reason
other than Force Majeure, as provided in paragraph 8, above, specifically including stoppage by sto a e Lender
in accordance with paragraph 10 hereof, or for any reason whatsoever notpress rog continuously in a
manner satisfactory to Lender, Lender being the sole judge as to this requirement, but in the exercise of
its good faith judgment,then Lender may, at its option, without notice, declare Borrower to be in default
hereunder and/or may take possession of the Property and enter into contracts for orp roceed with the
finishing of the Improvements and pay the cost thereof, plus a fee of fifteen percent(15%) for
supervision of construction, disbursing all or any part of the Loan for such purposes; and should the cost
of finishing the Improvements plus such fee amount to more than the undisbursed balance of the Loan,
then such additional costs may be expended at its option by Lender, in which event it shall be considered
and be an additional Loan to Borrower and the repayment thereof, together with interest thereon at the
rate provided for in the above Loan, shall be secured by the Deed of Trust and shall be repaid within
thirty (30) days after the completion of the Improvements, and Borrower agrees topaythe same.
Borrower further hereby authorizes Lender at its option at any time, when a default exists, either in its
own name or in the name of Borrower, to do any and all the things necessary or expedient in the
reasonable opinion of Lender to secure the performance of the construction contracts and to secure the
completion of the Improvements substantially in accordance with the plans and specifications, and to do
any and every act or thing pertaining to or arising out of the construction or completion of such
improvements or any contract therefor, disbursing all or any part of the Loan proceeds for such
purposes. In addition to the specific rights and remedies hereinabove mentioned,Lender shall have the
right to avail itself of any other rights or remedies to which it may be entitled under any existing law or
laws.
19. Borrower agrees that copies of all preliminary notices delivered pursuant to
Section 3097 of the California Civil Code(a)to Borrower and(b)to the Property, addressed to Rancho
Palos Verdes Redevelopment Agency,to City of Rancho Palos Verdes,to "Lender" or to "Construction
Lender," shall promptly be delivered to Lender. Borrower further agrees that Lender and Lender's
agents shall have the right at all times to enter upon the Property and post such notices and other written
or printed material thereon as it may deem necessary or desirable for its protection as Lender.
20. Notices, demands and communications between Lender and Borrower shall be
deemed sufficiently given if dispatched by registered or certified mail,postage prepaid,return receipt
P P �
requested, to:
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110 11/
Lender: Bay Cities National Bank
0 1333 South Pacific Coast Highway
Redondo Beach, California 90277
Borrower: Portuguese Bend Club Homeowners Association
4100 Palos Verdes Drive South
Rancho Palos Verdes, California 90275
Attention: Gale N. Lovrich
with a copy to: Tuttle& Taylor
355 S. Grand Street, 40th Fl.
Los Angeles, California 90071
Attention: Timi Anyon Hallem, Esq.
Such written notices, demands and communications may be sent in the same manner to such
other addresses as either party may from time to time designate by mail as provided in this paragraph.
All notices shall be deemed received on the date three (3)business days after the date of deposit into the
U.S. mail in the fashion provided herein.
21. Borrower agrees that Lender may place a sign or signs at the site of the
construction project evidencing that construction financing is being provided by Lender.
22. Borrower shall comply with all Environmental Laws (as defined in Exhibit B) and
III shall not release or permit the release of any Hazardous Substances (as defined in Exhibit B) into, onto,
beneath or from the Property in excess of legally permissible levels, and any such release of any
Hazardous Substances into, onto, beneath or from the Property shall be default hereunder. Lender shall
have the right to suspend any disbursement hereunder upon a reasonable belief of such a present release
by, or permitted by, Borrower,of any Hazardous Substances into, onto, beneath or from the Property.
Lender may,upon reasonable notice, enter and inspect the Property for the purpose of determining the
existence, location,nature and magnitude of any past current or present release of any Hazardous
Substances into, onto, beneath or from the Property upon a reasonable belief of the existence of a current
or present release or threatened release of any Hazardous Substances into, onto beneath or from the
Property.
23. Borrower shall not discriminate against any employee or applicant for
employment because of age, sex, marital status, race,handicap, color, religion, creed,ancestry, or
national origin in the construction of the Improvements.
24. (a) Throughout construction of the Improvements, Borrower or its
Contractor(s) shall take out and maintain, at no cost or expense to Lender, with a reputable and
financially responsible insurance company that is admitted to do business in the State of California and
is reasonably acceptable to Lender, comprehensive broad form general commercial liability insurance,
insuring Borrower against claims and liability for personal injury, death, or property damage arising
from the use, occupancy, condition, or operation of the Property and the Improvements thereon, which
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insurance shall provide combined single limit protection, including contractual liability, of at least
• $1,000,000. Such insurance shall name Lender and the City of Rancho Palos Verdes ("City") and its
board members, councilmembers, officers, employees, attorneys, and servants (collectively
"Representatives"), as additional insureds.
(b) Before disbursement of Loan proceeds to Borrower, Borrower or its Contractor(s)
shall provide Lender with evidence that it maintains in force until completion of said work(i) "all risk"
builder's risk insurance, including coverage for vandalism and malicious mischief, in a form and amount
and with an insurance company that is admitted to do business in the State of California and is
reasonably acceptable to Lender and (ii)workers' compensation insurance covering all persons
employed in connection with work on the Property, or any portion thereof in accordance with applicable
law. Said builder's risk insurance shall cover improvements in place and all materials and equipment at
the job site furnished under contract, but shall exclude contractors', subcontractors', and construction
managers'tools and equipment and property owned by contractors' and subcontractors' employees.
(c) Borrower shall also furnish or cause to be furnished to Lender evidence
satisfactory to Lender that any contractor with whom it has contracted for the performance of work on
Property or otherwise pursuant to this Agreement carries workers' compensation insurance as required
by law.
(d) With respect to each policy of insurance required above, Borrower shall furnish a
certificate of insurance countersigned by an authorized agent of the insurance carrier on the insurance
carrier's form setting forth the general provisions of the insurance coverage and endorsements naming
Lender and the City and their Representatives as additional insureds under those policies. The required
certificates and endorsements shall be furnished by Borrower prior to commencement of construction of
the Improvements.
(e) All such policies required by this paragraph shall be nonassessable and shall
contain language to the effect that(i)the policies are primary and noncontributing with any insurance
that may be carried by Lender or the City, (ii)the policies cannot be canceled or materially changed
except after thirty (30) days written notice by the insurer to Lender and the City, and(iii)neither Lender
nor the City shall be liable for any premiums or assessments. All such insurance shall have deductibility
limits reasonably satisfactory to Lender and shall contain cross liability endorsements.
25. In the event that Lender shall be, or shall become, a party to any legal proceedings
instituted in connection with or arising out of the Improvements or the Loan, Borrower agrees to pay to
Lender all sums paid and/or incurred by it to third parties(i.e., parties other than Lender's in-house staff)
as costs and expenses in the legal proceedings, including reasonable attorneys' fees incurred to contract
legal counsel. Borrower warrants that it has not paid or given, and will not pay or give, any third party
any money or other consideration for obtaining this Construction Loan Agreement. No member,official
or employee of Lender shall be personally liable to Borrower or any successors in interest in the event of
any default or breach by Lender or for any amount which may become due to Borrower or its successors
or on any obligations under the terms of this Construction Loan Agreement.
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26. Time is of the essence of this Agreement and of each and every provision hereof.
• The waiver by Lender of any breach or breaches hereof shall not be deemed, nor shall the same
constitute, a waiver of any subsequent breach or breaches.
27. This Agreement is made for the sole benefit and protection of Borrower and
Lender, and Lender's successors and assigns, and no other person shall have any right of action or right
to rely hereon. This Agreement and the Note and Deed of Trust contain all of the terms and conditions
agreed upon between the parties, and no other agreement regarding the subject matter thereof shall be
deemed to exist or bind any party unless in writing and signed by the party to be charged.
28. Borrower has made certain statements and disclosures in order to induce Lender
to make the Loan and enter into this Agreement, and in the event Borrower has made material
misrepresentations or failed to disclose any material fact, Lender may treat such misrepresentation or
omission as a breach of this Agreement. Such action shall not affect any remedies Lender may have
under the Deed of Trust for such misrepresentation or concealment.
29. Within 60 days after completion of construction of the Improvements, Borrower
shall deliver to Lender a copy of all written warranties received from Contractor(s) and any suppliers of
goods or materials during the course of construction.
30. Wherever the context of this Agreement requires,the singular shall include the
plural and the masculine gender shall include the feminine and/or neuter.
31. This Agreement is made pursuant to and shall be construed and governed by the
laws of the State of California and the rules and regulations promulgated thereunder. If any paragraph,
clause or provision of this Agreement is construed or interpreted by a court of competent jurisdiction to
be void, invalid or unenforceable, such decision shall affect only those paragraphs, clauses or provisions
so construed or interpreted and shall not affect the remaining paragraphs, clauses and provisions of this
Agreement.
32. This Construction Loan Agreement is made for the sole protection of Lender and
Borrower and their respective permitted successors and assigns, and no other person or persons shall
have any right of action hereon, nor should any laborer, materialman, subcontractor, or other third party
rely upon the funds deposited hereunder as a source of payment for work done or labor and/or materials
supplied in respect to the Improvements contemplated hereunder or otherwise, notwithstanding any
representation to the contrary made by Borrower, Contractor(s) or any other person. This Construction
Loan Agreement, the Note,the Deed of Trust, and the other Loan Documents, contain all of the terms
and conditions agreed to by Borrower, and no other agreement regarding the subject matter of this
contract,unless it is in writing and signed by Lender and Borrower, shall be deemed to exist or to bind
any party hereto.
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33. Lender's rights and obligations are concurrently herewith being assigned to and
assumed by the Rancho Palos Verdes Redevelopment Agency. Upon such assignment and assumption,
Bay Cities Bank shall be released from any and all obligations of Lender hereunder.
Lender: Borrower:
BAY CITIES NATIONAL BANK, a national PORTUGUESE BEND CLUB
association HOMEOWNERS ASSOCIATION, a
California corporation
By: 0,1,0e-C,k
Cathy Allen, g " /,, % IAA 61
President, CEO and Secretary
By:
The undersigned acknowledge that they have has received a copy of, and have
reviewed and understand, the foregoing Agreement.
"Contractor"
"Contractor"
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•
110
33. Lender's rights and obligations are concurrently herewith being assigned to and
assumed by the Rancho Palos Verdes Redevelopment Agency. Upon such assignment and assumption,
Bay Cities Bank shall be released from any and all obligations of Lender hereunder.
Lender: Borrower:
BAY CITIES NATIONAL BANK, a national PORTUGUESE BEND CLUB
association HOMEOWNERS ASSOCIATION, a
California corporation
By:
Cathy Allen, By:
President,CEO and Secretary
The undersigned acknowledge that they have has received a copy of, and have
reviewed and understand,the foregoing Agreement.
"Contr
"Contractor"
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33. Lender's rights and obligations are concurrently herewith being assigned to and
assumed by the Rancho Palos Verdes Redevelopment Agency. Upon such assignment and assumption,
Bay Cities Bank shall be released from any and all obligations of Lender hereunder.
Lender: Borrower:
BAY CITIES NATIONAL BANK,a national PORTUGUESE BEND CLUB
association HOMEOWNERS ASSOCIATION, a
California corporation
By:
Cathy Allen, By:
President, CEO and Secretary
B •
The undersigned acknowledge that they have has received a copy of, and have
rev.-� ed and understand,the foregoing Agreement.
/1
,,�1
810. 144q
"Contractor" 6/... ;02/02-es--i! !
"Contractor"
111
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EXHIBIT
SANITARY SEWER EASEMENT
(LOT 81-LA)
THAT PORTION OF LOT 81-LA AS PROVIDED IN THE CERTIFICATE OF COMPLIANCE RECORDED
DECEMBER 12, 1986 AS INSTRUMENT NO.86-1728234 IN THE OFFICIAL RECORDS OF THE OFFICE OF
THE COUNTY RECORDER OF THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED
AS FOLLOWS:
THE SOUTHWESTERLY 5.00 FEET OF SAID LOT 81-LA.
DV-08/10/99
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•
1111
�K
n 7' ��
L A I A
SANITARY SEWER EASEMENT
(LOT 100)
A 5.00 FOOT STRIP OF LAND BEING THAT PORTION OF LOT 100 OF L.A.C.A. MAP#64, IN THE CITY
OF RANCHO PALOS VERDES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP
FILED IN BOOK 1, PAGES 12 THROUGH 16, INCLUSIVE OF ASSESSOR'S MAPS, IN THE OFFICE OF
THE COUNTY RECORDER OF SAID COUNTY, THE SIDELINE OF SAID STRIP LYING 5.00 FEET
SOUTHEASTERLY MEASURED AT RIGHT ANGLES FROM THE FOLLOWING DESCRIBED LINE:
BEGINNING AT THE WESTERLY CORNER OF SAID LOT 100;THENCE NORTHEASTERLY ALONG THE
NORTHWESTERLY LINE OF SAID LOT 100,NORTH 65° 14'55"EAST A DISTANCE OF 65.00 FEET, SAID
SIDELINE TO BE FORESHORTENED SO AS TO TERMINATE AT THE WEST LINE OF SAID LOT 100.
•
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5
4111
fY
Y
1111 "
• r�
d t
SANITARY SEWER EASEMENT
(LOT 122-LA)
THAT PORTION OF LOT 122-LA AS PROVIDED IN THE CERTIFICATE OF COMPLIANCE RECORDED
JANUARY 13, 1987 AS INSTRUMENT NO. 87-48066 IN THE OFFICIAL RECORDS OF THE OFFICE OF
THE COUNTY RECORDER OF THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED
AS FOLLOWS:
THE MOST NORTHWESTERLY 8.00 FEET OF SAID LOT 122-LA.
t
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r a.
Eijd I B tit
SANITARY SEWER EASEMENT
(LOT 202)
A STRIP OF LAND 5.00 FEET WIDE LYING WITHIN LOT 202 OF L.A.C.A. MAP #64, IN THE CITY OF
RANCHO PALOS VERDES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP FILED
IN BOOK 1, PAGES 12 THROUGH 16 INCLUSIVE, OF ASSESSOR'S MAP, IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY, THE SIDELINES OF SAID STRIP BEING 2.50 FEET,
MEASURED AT RIGHT ANGLES FROM THE FOLLOWING DESCRIBED CENTERLINE:
BEGINNING AT THE SOUTHERLY CORNER OF LOT 83 OF SAID MAP, SAID CORNER BEING IN THE
WESTERLY LINE OF SPINDRIFT ROAD (PRIVATE STREET) AS SHOWN ON SAID MAP ON A CURVE
CONCAVE EASTERLY HAVING A RADIUS OF 40.00 FEET, A RADIAL LINE TO SAID CORNER
BEARING NORTH 84° 41' 27" WEST; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A
CENTRAL ANGLE OF 36° 10' 01" FOR AN ARC DISTANCE OF 25.25 FEET TO THE TRUE POINT OF
BEGINNING; THENCE SOUTH 23° 51' 02" WEST A DISTANCE OF 30.57 FEET TO THE SOUTHERLY
LINE OF SAID LOT 202, SAID SOUTHERLY LINE ALSO BEING THE NORTHERLY LINE OF SEASCAPE
ROAD (PRIVATE STREET), 20.00 FEET WIDE, AS SHOWN ON SAID MAP, THE SIDELINES OF SAID
STRIP SHALL BE PROLONGATED OR FORESHORTENED SO AS TO TERMINATE AT THE LINES OF
SAID LOT 202.
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5
EXHIBIT B
• CERTAIN DEFINITIONS
Environmental Laws means all federal, state, local, or municipal laws,rules,orders,
regulations, statutes,ordinances,codes, decrees, or requirements of any government authority
regulating,relating to, or imposing liability or standards of conduct concerning any Hazardous
Substance(as later defined),or pertaining to occupational health or industrial hygiene(and only to
the extent that the occupational health or industrial hygiene laws,ordinances, or regulations relate to
Hazardous Substances on, under, or about the Property), occupational or environmental conditions
on, under, or about the Property, as now or may at any later time be in effect, including without
limitation,the Comprehensive Environmental Response, Compensation and Liability Act of 1980
(CERCLA)[42 tISCS§§9601 et seq.]; the Resource Conservation and Recovery Act of 1976
(RCRA)[42 USCS§sc 6901 et seq.J; the Clean Water Act, also known as the Federal Water
Pollution Control Act(FWPCA)[33 USCS§sr 1251 et seq.]; the Toxic Substances Control Act
(TSCA)[15 USCS§sr 2601 et seq.];the Hazardous Materials Transportation Act(HMTA)[49 USCS
§,¢1801 et seq.];the Insecticide, Fungicide, Rodenticide Act[7 USCSsr,¢ 136 et seq.]; the Superfund
Amendments and Reauthorization Act[42 USCS,¢�6901 et seq.]; the Clean Air Act[42 USCS sr§
7401 et seq.J;the Safe Drinking Water Act[42 USCS ksr 300f et seq.];the Solid Waste Disposal Act
[42 USCS§sr 6901 et seq.]; the Surface Mining Control and Reclamation Act[30 USCS tsr§ 1201 et
seq.]; the Emergency Planning and Community Right to Know Act[42 USCS§sr 11001 et seq.J; the
Occupational Safety and Health Act[29 USCS§§655 and 657]; the California Underground Storage
of Hazardous Substances Act[H& S C sr§25280 et seq.]; the California Hazardous Substances
• Account Act[H& S C§§25300 et seq.]; the California Hazardous Waste Control Act[H& S C��
25100 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act[H& S C sr§24249.5
et seq.]; the Porter-Cologne Water Quality Act[Wat C§§ 13000 et seq.]together with any
amendments of or regulations promulgated under the statutes cited above and any other federal,
state, or local law, statute, ordinance, or regulation now in effect or later enacted that pertains to
occupational health or industrial hygiene, and only to the extent that the occupational health or
industrial hygiene laws, ordinances, or regulations relate to Hazardous Substances on,under, or
about the Property, or the regulation or protection of the environment, including ambient air, soil,
soil vapor, groundwater, surface water, or land use.
Hazardous Substances includes without limitation:
(a) Those substances included within the definitions of hazardous substance,hazardous
waste,hazardous material,toxic substance, solid waste, or pollutant or contaminant in CERCLA,
RCRA, TSCA, HMTA,or under any other Environmental Law;
(b)Those substances listed in the United States Department of Transportation(DOT) Table
[49 CFR 172.I0I], or by the Environmental Protection Agency(EPA), or any successor agency,as
hazardous substances[40 CFR Part 302];
L:\VOLiVAR\f860-3 jar.wpd rev. 8/17/99
•
(c) Other substances, materials,and wastes that are or become regulated or classified as
• hazardous or toxic under federal, state, or local laws or regulations; and
(d)Any material, waste, or substance that is
(i)a petroleum or refined petroleum product,
(ii)asbestos,
(iii)polychlorinated biphenyl,
(iv) designated as a hazardous substance pursuant to 33 USCS § 1321 or listed
pursuant to 33 USCS § 1317,
(v) a flammable explosive, or
(vi)a radioactive material.
•
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v
0 0.
•
Exhibit C
0 CERTIFICATE OF COMPLETION
Recording Requested by and
When Recorded Return to:
Rancho Palos Verdes
Redevelopment Agency
30940 Hawthorne Boulevard
Rancho Palos Verdes, California 90275
Attn: City Clerk
Exempt from Recording Fees per Government Code Section 6103
CERTIFICATE OF COMPLETION
This Certificate of Completion is given this day of , 19 day of , 19 , with
reference to the following matters:
A. BAY CITIES NATIONAL BANK, a national association("BCNB")and the
III PORTUGUESE BEND CLUB HOMEOWNERS ASSOCIATION, a California corporation(the
"Borrower")entered into a certain Construction Loan Agreement dated as of August 3, 1999 (the
"Agreement"), which Agreement provides, in Section 9 thereof, that the Lender shall furnish Borrower
with a Certificate of Completion upon satisfactory completion of the Improvements on the real property
described therein(the "Property"), which certificate shall be in such form as to permit it to be recorded
in the Recorder's Office of Los Angeles County; and
B. BCNB assigned to the RANCHO PALOS VERDES REDEVELOPMENT AGENCY
("Lender"), and the Lender assumed from BCNB, all of BCNB's rights and obligations under the
Agreement; and
C. The Certificate of Completion shall be conclusive determination of satisfactory
completion of the construction Improvements required with respect to the Property in accordance with
the Agreement; and
D. Lender has determined that the construction of the Improvements has been satisfactorily
performed.
NOW, THEREFORE,the parties to this instrument hereby provide as follows:
0
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410
1. As provided in said Agreement, Lender does hereby certify that the construction of the
Improvements on the Property described in Exhibit 1 attached hereto has been satisfactorily performed
and completed.
2. This Certificate shall not constitute evidence of compliance with or satisfaction of any
obligation of Borrower to any holder of a mortgage or deed of trust or any insurer of a mortgage or deed
of trust securing money loaned to finance the improvements or any part thereof nor does it constitute
evidence of payment of any promissory note or performance of any deed of trust provided by Borrower
to Lender under the Agreement or otherwise.
IN WITNESS WHEREOF, Lender and Borrower have executed this Certificate as of the day and
year first above written.
Lender: Borrower:
RANCHO PALOS VERDES PORTUGUESE BEND CLUB HOMEOWNERS
REDEVELOPMENT AGENCY, a public body, ASSOCIATION, a California corporation
corporate and politic
By:
By: President
Chairperson
Attest: By:
Secretary
Secretary
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