LUANA GARDEN VILLAS SALES CONTRACT AND DEPOSIT RECEIPT

Transcription

1 LUANA GARDEN VILLAS SALES CONTRACT AND DEPOSIT RECEIPT This Sales Contract and Deposit Receipt (this Contract ) is made by and between LUANA DEVELOPMENT PARTNERS LP, a Delaware limited partnership, whose principal place of business and post office address is 6405 Mira Mesa Boulevard, Suite 100, San Diego, California 92121, herein referred to as Seller, and the below-named Buyer(s), and shall be effective upon the date of execution by Seller. A. Description of the Unit Covered by This Contract. Unit No. ( Unit ), in the Honua Kai Condominium project ( Honua Kai ) located at 130 Kai Malina Parkway, Lahaina, Hawaii The Unit is located in the Luana Enclave ( Luana ) of Honua Kai. Luana is also known for marketing purposes as the Luana Garden Villas. See Luana s most recent public report for information regarding common interests, etc. The Unit shall come fully furnished with appliances and fixtures including a range, range hood, microwave, oven, refrigerator, dishwasher, garbage disposal, outdoor barbecue, outdoor under-counter refrigerator, water heater, ceiling fans and air conditioner, and the furnishings listed in Exhibit A. 1 The Unit shall also come with the exclusive right to use two parking stall(s): one garage stall and an uncovered stall directly fronting the garage, appurtenant to the Unit. See Section E.2.c. below for more information. B. Information Concerning Buyer. All persons whose names will appear on the deed to the Unit must enter their names below and affix their signature on page 3 hereof. If Buyer is a trustee, a copy of the trust agreement shall be provided to Seller prior to pre-closing. BUYER 1 BUYER 2 Full legal name please- no initials. If you have no middle name put "NMN". Full legal name please- no initials. If you have no middle name put "NMN". Name of spouse, if married. date of Trust. For an entity, place of formation. For a trust, Name of spouse, if married. For an entity, place of formation. For a trust, date of Trust. Street Address Street Address City, State & Zip City, State & Zip Business Phone Cell Phone Business Phone Cell Phone Home Phone Federal Tax ID (for entities) Home Phone Federal Tax ID (for entities) 1 Exhibit A may be altered based on purchaser preference at the time of contract formation. { } 1

2 BUYER 3 BUYER 4 Full legal name please- no initials. If you have no middle name put "NMN". Full legal name please- no initials. If you have no middle name put "NMN". Name of spouse, if married. For an entity, place of formation. For a trust, date of Trust. Name of spouse, if married. For an entity, place of formation. For a trust, date of Trust. Street Address Street Address City, State & Zip City, State & Zip Business Phone Cell Phone Business Phone Cell Phone Home Phone Federal Tax ID (for entities) Home Phone Federal Tax ID (for entities) C. Purchase Price. Method of Purchase, Method of Payment, Additional Sums to be Paid, Purchase Agreement, Reservation Agreement and Public Report(s). 1. Total Purchase Price. a. Purchase Price for Unit: $ b. Total Cost of Options from Exhibit B: $ Total of a. and b. ( Total Purchase Price ): $ 2. Method of Purchase. ( ) All Cash ( ) Cash Down Payment and Mortgage Loan 3. Method of Payment. Buyer shall make the following payments in immediately available United States funds via wire transfer or by cashier s check payable to Title Guaranty Escrow Services, Inc. (the Escrow Agent ) in the amounts and at the times set forth below. Seller, Seller s Agents and Escrow Agent shall accept no cash payments: Payment A: Initial deposit in the amount of $ (five percent (5%) of the Purchase Price for Unit provided in Section C.1.a) to be paid upon signing this Contract. Buyer paid a reservation deposit of $15, which will be applied to Payment A. Buyer did not pay a reservation deposit and is making Payment A in full upon signing this Contract. { } 2

3 Payment B: $ (fifteen percent (15%) of the Purchase Price for Unit provided in Section C.1.a, plus one-hundred percent (100%) of the costs of any Options selected, whether noted in Exhibit B or subsequently selected by Buyer using an Options Addendum) to be paid on the date this Contract becomes a binding agreement pursuant to Section E.3. Payment C: $ balance of Total Purchase Price by way of: Total Purchase Price: $ Payment C.1: $ (Balance of Payment C not being provided by a mortgage loan or loans as set forth in Payment C.2) payable no later than the Pre-Closing Date (as defined in Section E.11.b below). Payment C.2: $ (The portion of Total Purchase Price provided by way of mortgage proceeds) payable no later than two (2) days prior to the Final Closing Date (as defined in Section E.11.a below). (Note: There is no Finance Charge or any other cost which is payable by Buyer because of the fact that Buyer will make several deposits and payments on account of the Total Purchase Price under this Contract. All costs associated with deferral of payments in the manner provided in this Contract have been included in the Total Purchase Price.) Interest on Deposits: Buyer shall not receive and shall not be entitled to any interest on any Deposit made by Buyer hereunder. Any and all interest paid on any such deposits shall belong to Seller. Buyer s execution of this Contract is a direction to the Escrow Agent to that effect. 4. Options. At the time of execution, Buyer may select certain options as provided in the sheet entitled Options attached as Exhibit B. 2 Buyer must select any Options at the time of execution of this Contract, and no changes or refunds will be permitted after such date. If Buyer selects any of the Options, Buyer must pay all costs associated with such Options as provided in Section C.3 above. 5. Additional Sums to be Paid by all Buyers at Closing. One (1) Month s Maintenance Fee: $ Three (3) Months' Maintenance Fee (Start-up Fee): $ Total Additional Sums: $ PLUS CLOSING COSTS AND PRORATIONS AS PROVIDED IN SECTIONS E.8 and E.9. ESTIMATED AMOUNTS SHALL BE PAID NO LATER THAN TWO (2) DAYS BEFORE FINAL CLOSING. 2 Exhibit B may be altered based on purchaser preference at the time of contract formation. { } 3

4 6. Purchase Agreement. SELLER AGREES TO SELL AND BUYER AGREES TO BUY THE UNIT DESCRIBED IN SECTION A ABOVE WHICH IS LOCATED IN THE LUANA ENCLAVE OF THE HONUA KAI CONDOMINIUM PROJECT SUBJECT TO AND IN CONSIDERATION OF THE ADDITIONAL TERMS AND CONDITIONS SET FORTH IN SECTION E OF THIS CONTRACT WHICH BY THIS REFERENCE ARE MADE A PART HEREOF AND INCORPORATED HEREIN FOR ALL PURPOSES. BUYER ACKNOWLEDGES HAVING READ SECTION E IN FULL AND IS AWARE OF AND ACCEPTS THE TERMS, CONDITIONS, LIMITATIONS AND DISCLAIMER OF WARRANTIES DESCRIBED THEREIN AND ACKNOWLEDGES THAT THIS CONTRACT, SECTIONS A THROUGH E.26, TOGETHER WITH EXHIBITS A, B and C AND ANY ADDENDUM ATTACHED HERETO, CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE PARTIES (the Agreement ). 7. Receipt for Public Report(s) and Honua Kai Documents. Buyer acknowledges that Buyer has been provided with the following documents before signing this Contract ( Condominium Documents ): ( ) Receipt for Developer s Public Report ( ) Developer s Public Report for Luana ( ) Amended and Restated Declaration of Condominium Property Regime of Honua Kai dated October 5, 2006, filed as Document No and recorded as Document No ( ) First Amendment to the Amended and Restated Declaration of Condominium Property Regime of Honua Kai dated April 20, 2007, filed as Document No and recorded as Document No ( ) Second Amendment to the Amended and Restated Declaration of Condominium Property Regime of Honua Kai dated August 29, 2008, filed as Document No and recorded as Document No ( ) Third Amendment to the Amended and Restated Declaration of Condominium Property Regime of Honua Kai dated June 10, 2009, filed at Document No and recorded as Document No ( ) Fourth Amendment to the Amended and Restated Declaration of Condominium Property Regime of Honua Kai dated June 16, 2009, filed as Document No and recorded as Document No ( ) Fifth Amendment to the Amended and Restated Declaration of Condominium Property Regime of Honua Kai dated September 3, 2009, filed as Document No and recorded as Document No ( ) Sixth Amendment to the Amended and Restated Declaration of Condominium Property Regime of Honua Kai dated February 9, 2010, filed as Document No and recorded as Document No ( ) [Seventh] Amendment to the Amended and Restated Declaration of Condominium Property Regime of Honua Kai dated October 12, 2005, filed as Document No. T and recorded as Document No. A ( ) Eighth Amendment to Amended and Restated Declaration of Condominium Property Regime of Honua Kai dated 2012, filed as Document No. T and recorded as Document No. A ( ) Ninth Amendment to Amended and Restated Declaration of Condominium Property Regime of Honua Kai dated March 25, 2014, filed as Document No. T and recorded as Document No. A { } 4

5 ( ) Tenth Amendment to Amended and Restated Declaration of Condominium Property Regime of Honua Kai dated May 2, 2016, filed as Document No. T and recorded as Document No. A ( ) Partial Assignment of Declarant Rights and Assumption, dated September 19, 2017, filed as Document No. T and recorded as Document Nos. A A thru A B, and ( ) Eleventh Amendment to Amended and Restated Declaration of Condominium Property Regime of Honua Kai dated December 11, 2017, filed as Document No. T and recorded as Document No. A ( ) Amended and Restated Bylaws of the Honua Kai Condominium Association, Inc. dated October 5, 2006, filed as Document No and recorded as Document No ( ) First Amendment to the Amended and Restated Bylaws of the Honua Kai Condominium Association, Inc. dated April 20, 2007, filed as Document No and recorded as Document No ( ) Second Amendment to the Amended and Restated Bylaws of the Honua Kai Condominium Association, Inc. dated August 29, 2008, filed as Document No and recorded as Document No ( ) Third Amendment to the Amended and Restated Bylaws of the Honua Kai Condominium Association, Inc. dated September 3, 2009, filed as Document No and recorded as Document No ( ) Fourth Amendment to the Amended and Restated Bylaws of the Honua Kai Condominium Association, Inc. dated December 11, 2017, filed as Document No. T and recorded as Document No. A ( ) Second Amended and Restated Condominium Map dated April 3, 2007 ( ) As Built Condominium Map for the Hokulani Enclave dated May 18, 2009 ( ) First Amendment to the Second Amended and Restated Condominium Map dated June 15, 2009 ( ) First Amendment to the As Built Condominium Map for the Hokulani Enclave dated July 31, 2009 ( ) Second Amendment to the Second Amended and Restated Condominium Map dated October 5, 2009 ( ) Third Amendment to the Second Amended and Restated Condominium Map dated June 1, 2012 ( ) Fifth Amendment to the Second Amended and Restated Condominium Map dated July 3, 2015 ( ) Sixth Amendment to the Second Amended and Restated Condominium Map dated December 5, 2017 ( ) Rules and Regulations for Honua Kai (House Rules) dated April 20, 2007 ( ) Declaration of Covenants, Conditions, Easements and Restrictions for Kaanapali North Beach dated December 6, 2000, filed as Document No and recorded as Document No ( ) Supplemental Declaration to Declaration of Covenants, Conditions, Easements and Restrictions for Kaanapali North Beach dated August 5, 2003, filed as Document No and recorded as Document No ( ) Designation of Successor Declarant and Assignment of Declarant s Rights and Interests Under Declaration of Covenants, Conditions, Easements and Restrictions for Kaanapali North Beach dated August 26, 2003, filed as Document No and recorded as Document No { } 5

6 ( ) First Amendment to By-Laws of Kaanapali North Beach Master Association, Inc. dated September 17, 2003, filed as Document No and recorded as Document No ( ) Notice of Right to Cancel Sales Contract ( ) Notice of Right to Rescind Sales Contract and Purchaser s Receipt If documents were provided electronically, Buyer has also received and signed an Agreement to Receive Document Electronically. D. Special Broker Agency Disclosure. In connection with the sale of the Unit by Seller to Buyer pursuant to a Public Report with an effective date issued by the Real Estate Commission, Buyer acknowledges and understands that PowerPlay Destination Properties (Hawaii) Inc., and all licensees employed by or associated with such broker, represent Seller. By initialing below, Buyer and Seller confirm that oral or written disclosure of such representation was provided to Buyer and Seller before the signing of this Contract. In the event that Buyer is represented by a cooperating broker or realtor, Buyer agrees and acknowledges that Buyer s cooperating broker or realtor is not an agent or sub-agent of Seller. Buyer s Initials Seller s Initials SUBJECT TO THE PROVISIONS OF SECTION E.3 HEREOF, THIS AGREEMENT IS BINDING UPON SELLER ONLY IF SELLER SIGNS IT. EXECUTION OF THIS CONTRACT BY A BROKER, SALESPERSON OR REALTOR REPRESENTING SELLER SHALL NOT CONSTITUTE EXECUTION BY SELLER OR BIND SELLER UNDER THIS CONTRACT. [Signatures on Following Page] { } 6

7 BUYER 1: Name (Print): Date BUYER 2: Name (Print): Date BUYER 3: Name (Print): Date BUYER 4: Name (Print): Date SELLER: LUANA DEVELOPMENT PARTNERS LP, a Delaware limited partnership By: Luana Developments Inc., a Delaware corporation Its General Partner By: Name: Its: Date Receipt of Buyer s $ Deposit pursuant to Section C.3 above is hereby acknowledged. POWERPLAY DESTINATION PROPERTIES (HAWAII) INC. By Contract Reviewed By: { } 7

8 E. Additional Terms and Conditions. 1. Background Information. a. Seller is the fee simple owner of the unit covered by this Contract. Seller acquired fee simple interest in all seventy-two (72) units within Luana and the rights to develop such units from the creator and initial developer of the Condominium, Maui Beach Resort Limited Partnership ( MBRLP or Initial Developer ). Luana is the third phase of Honua Kai, with the two previous phases, Hokulani Enclave and Konea Enclave, already developed by MBRLP. b. MBRLP created Honua Kai pursuant to that certain Declaration of Condominium Property Regime of Honua Kai dated October 12, 2005, recorded in the Bureau as Document No , and filed in the Office as Document No , which was amended and restated by that certain Amended and Restated Declaration of Condominium Property Regime of Honua Kai (Chapter 514B), recorded in the Bureau as Document No , and filed in the Office as Document No , as further amended from time to time (the Declaration ), and that certain Condominium Map No filed in said Office, and Map No recorded in said Bureau, as may be amended from time to time (the Condominium Map ), copies of which have been filed with the Real Estate Commission of the State of Hawaii (the Real Estate Commission ), pursuant to the Condominium Property Act, Chapter 514B, Hawaii Revised Statutes ( HRS ), as amended (the Act ), all of which are available for inspection at the Real Estate Commission. Seller intends to construct eighteen (18) two-story townhouse buildings containing a total of seventy-two (72) units. c. Seller has entered into an escrow agreement (the Escrow Agreement ) with Title Guaranty Escrow Services, Inc., whose address is 235 Queen Street, First Floor, Honolulu, Hawaii ( Escrow Agent ), as the same may be amended from time to time, providing for the payment of all monies due hereunder to be paid to and disbursed by Escrow Agent in accordance with the terms and conditions thereof. d. Seller desires to sell to Buyer and Buyer desires to purchase from Seller all of Seller s right, title and interest in a unit in Honua Kai and common elements appertaining thereto, all in accordance with the terms, covenants and conditions of this Contract and the Escrow Agreement. 2. Sale of Unit. a. Seller hereby agrees to sell to Buyer and Buyer hereby agrees to purchase from Seller all of Seller s right, title and interest in, to and under the following: (1) The above-designated Unit, as more particularly described in the Declaration and shown on the Condominium Map, together with all limited common elements and easements appurtenant thereto. (2) An undivided percentage interest, as described in the Declaration, in the common elements of Honua Kai as defined and established in the Declaration, as a tenant in common with the holders from time to time of other undivided interests in the common elements. b. The interest of Buyer in the above-described property ( Property ) shall be subject to all of the applicable terms, covenants, conditions, easements, rights, agreements and other provisions mentioned or contained in the proposed unit deed, as the same may be amended from time to time (the Deed ), and in the Declaration, the Amended and Restated Bylaws of the Honua Kai Condominium Association, Inc. dated October 5, 2006, filed as Document No and recorded as { } 8

9 Document No (the Bylaws ), and the Rules and Regulation for Honua Kai (House Rules) dated April 20, 2007 (the House Rules ), as the same may be amended from time to time, all of which are filed with the Real Estate Commission, and all of which Buyer acknowledges having received a copy of and examined. c. The Unit shall also come with the exclusive right to use two parking stalls (as indicated in Section A) designated appurtenant to the Unit and as shown on the Condo Map. 3. Conditions for Binding Agreement. a. This Contract will not become a binding Agreement upon Seller and Buyer unless and until: (i) Buyer has receipted for or is deemed to have receipted for the Public Report, which shall include the Public Report itself, the recorded Declaration and Bylaws, House Rules, Condominium Map, and all amendments (collectively, the Public Report ), and a Notice of Right to Cancel Sales Contract; and (ii) Buyer has waived or is deemed to have waived Buyer s right to cancel this Contract as more particularly provided in Section 514B-86 of the Act. Buyer may cancel this Contract at any time up to midnight of the thirtieth (30 th ) day after the Public Report is delivered to Buyer. Buyer may waive Buyer s right to cancel, or shall be deemed to have waived Buyer s right to cancel, by (A) checking the waiver box on the Notice of Right to Cancel Sales Contract and delivering it to Seller, (B) letting the 30- day period expire without taking any action to cancel, or (C) closing the purchase of the Unit before the cancellation period expires. b. In the event this Contract is terminated pursuant to Section E.3.a above, Seller shall cause the Escrow Agent to refund all payments previously made by Buyer, without interest, and neither party shall have any other or further liability hereunder or with respect to Honua Kai; provided that, if this Contract is terminated as aforesaid, then the Escrow Agent shall deduct from the refund to Buyer the escrow cancellation fee (which shall not exceed $250) and Buyer shall be separately responsible for the costs of any lending institution in processing this Contract or the loan application. 4. Buyer s Financial Condition. a. Financial Statement. Buyer agrees to deliver to Seller s agent or, at Seller s option, directly to Buyer s mortgagee prior to or no later than five (5) business days after the date of Seller s notice to Buyer of Seller s acceptance of this Contract, (1) a financial statement certified by Buyer to be true and accurate as of the date of such delivery, in form and content sufficient to fully disclose Buyer s financial circumstances as of the date of delivery, including, without limitation, the identification and the reasonably accurate valuation of any assets as of the date of delivery, (2) a completed loan application to one or more lending institutions, if Buyer requires financing, (3) a full credit report, and (4) any other information required by Seller. b. Buyer Shall Provide Evidence of Funds to Make Deposits. Prior to or within five (5) business days after execution of this Contract by Buyer, Buyer shall give to Seller, Seller s Lender (as defined below), or, at Seller s option, directly to Buyer s mortgagee such written evidence including, without limitation, copies of tax returns, financial statements and other evidence ( Cash Evidence ) from Buyer s bankers or accountants, or others, as Seller may require, of Buyer s ability to pay the Total Purchase Price (less any amounts to be paid out of the mortgage proceeds pursuant to a loan approval or loan commitment acceptable by Seller) at the times specified in Section C above. In the event that Seller, Seller s Lender, or Buyer s mortgagee, as the case may be, (i) shall not receive such Cash Evidence within five (5) business days after execution of this Contract by Buyer, or (ii) shall reject Buyer s Cash Evidence as unacceptable by written notice to Buyer within fifteen (15) business days of Seller s receipt of such Cash Evidence, then in either case this Contract may, at any time thereafter and at { } 9

10 Seller s sole discretion, be terminated and cancelled, and, upon such termination and cancellation, Seller shall direct the Escrow Agent to refund to Buyer all sums paid hereunder by Buyer, less any escrow cancellation fee not in excess of $250. Buyer represents that the financial data to be submitted in connection with this Contract to Seller or any prospective mortgagee shall be true and accurate. Buyer agrees to notify Seller immediately of any material change which occurs in Buyer s financial condition prior to Final Closing. Buyer s failure to notify Seller of any such change shall constitute a continuing representation by Buyer that Buyer s financial circumstances have not materially changed. Seller shall have the right, exercisable in Seller s sole discretion, to cancel this Contract and hold Buyer in default under this Contract if any material discrepancies are discovered between the financial information furnished and Buyer s actual financial condition. c. No Detrimental Change in Financial Statement. Buyer acknowledges that Seller is relying on the above-mentioned financial statement, Cash Evidence and other information submitted by Buyer in entering into this Contract. Buyer acknowledges that Seller may have to make binding commitments to Seller s Lender and other parties based upon the Financial Statement and other information provided by Buyer. In partial consideration of such reliance, Buyer agrees to notify Seller immediately of any detrimental material change which occurs in Buyer s financial condition prior to Final Closing, and, notwithstanding anything herein to the contrary, if Buyer s financial circumstances detrimentally and materially change prior to Final Closing (if Buyer requires financing) or Pre-Closing (if Buyer does not require financing) as defined below, then Seller shall have fifteen (15) business days after receipt of such notification to either accept such change, in which case Buyer and Seller shall, in its sole discretion, proceed according to the terms of this Contract or rescind this Contract. In the event of such rescission, Seller shall cause the Escrow Agent to refund to Buyer the amounts already paid, less the cost of any credit report, escrow cancellation fees, if any, and other costs actually incurred in reviewing such financial statement. BUYER HEREBY ACKNOWLEDGES THAT IN THE EVENT OF A DETRIMENTAL CHANGE IN BUYER S FINANCIAL CONDITION, BUYER MAY NOT BE RELEASED FROM THE TERMS AND CONDITIONS OF THIS CONTRACT, AND BUYER WARRANTS THAT BUYER HAS ENTERED INTO THIS CONTRACT KNOWING AND ASSUMING THE RISK OF A DETRIMENTAL CHANGE TO BUYER S FINANCIAL CONDITION. d. Breach. Any breach of the covenants and warranties contained herein shall constitute a default hereunder by Buyer entitling (but not limiting) Seller to retain all sums paid hereunder as liquidated damages as provided therein. e. Financial Inquiries. Buyer agrees that by executing this Contract, Seller and any proposed mortgagee are authorized to make such financial inquiries about Buyer which Seller and any proposed mortgagee may deem necessary or appropriate to verify Buyer s financial condition, capability to consummate the Agreement. Buyer further agrees to promptly confirm such authority separately in writing as may be required by Seller or any proposed mortgagee. 5. Financing of Purchase: Qualifying for Loan. a. Buyer s Obligation to Seek a Loan Commitment. Buyer represents that Buyer is financially capable of making all required payments at the required time set forth herein. If financing is required by Buyer, Buyer shall prior to or within five (5) business days from the date of execution of this Contract by Buyer, apply for mortgage financing from a mortgage lender of Buyer s choice, subject to approval by Seller and Seller s Lender, and shall promptly sign and deliver all documents and diligently take all steps necessary to qualify and obtain the required financing. Within five (5) business days thereafter, Buyer must provide Seller with evidence satisfactory to Seller (and Seller s Lender) that Buyer has received pre-approval for a mortgage loan to { } 10

11 finance Buyer s purchase of the Unit. Such pre-approval shall be in the form of a conditional prequalification letter in form and substance acceptable to Seller s Lender from the prequalification agent(s) selected by Seller and approved by Seller s Lender or such other financial institution(s) acceptable to Seller and Seller s Lender. The prequalification letter shall include acknowledgement that such prequalification letter has been issued based on the following, at minimum: (1) Receipt of a loan application; (2) Credit Report; (3) Buyer s current income verified; (4) Buyer s ability to make all deposits and down payment verified; and (5) any other documentation necessary to analyze Buyer s ability to qualify. The prequalification letter shall contain no contingencies, other than the lien-free completion of construction of the Unit, issuance of the appropriate certificate of occupancy for the Unit, and reconfirmation of Buyer s pertinent financial information within one-hundred and twenty (120) days of the scheduled Final Closing, unless specifically approved by Seller s Lender. Upon loan approval or mortgage commitment, an originally executed copy of any notification of loan approval or mortgage commitment obtained by Buyer shall be delivered to Seller immediately upon receipt by Buyer. Buyer shall have fifty (50) calendar days after Seller s acceptance and execution of this Contract to obtain loan approval or a mortgage commitment. If Buyer fails to obtain such prequalification letter and loan approval or mortgage commitment within the time periods prescribed above, this Contract may be cancelled at Seller s discretion and Seller will cause the Escrow Agent to refund to Buyer all of Buyer s deposits paid to the Escrow Agent without any interest less an escrow cancellation fee not in excess of $250. Seller and Seller s Lender shall have the right, in their absolute discretion, to disapprove of any prequalification letter or loan approval or mortgage commitment submitted to Seller under this Contract within fifteen (15) business days of the receipt of same by Seller. In the event that Seller or Seller s Lender shall not have given written notice of disapproval to Buyer within said fifteen (15) business-day period, such prequalification letter, loan approval or mortgage commitment shall be deemed to be approved. Seller and its agents make no representation or assurance that Buyer will qualify for financing from any lender (even those who may have been recommended by Seller). All financing and the terms and conditions of it, including impound payments and interest rate, are a matter of concern solely between Buyer and Buyer s lender. Neither Seller nor any of its agents or representatives shall have any obligation to arrange for Buyer s mortgage financing. Buyer agrees to be solely responsible for any fees charged by Buyer s mortgage lender in processing and canceling Buyer s loan application. In order to facilitate Seller s awareness of Buyer s progress in obtaining a mortgage loan, Buyer hereby authorizes Buyer s prospective mortgage lender to transmit at Seller s or Seller s agent s request any and all information necessary for this purpose, including, but not limited to, copies of all correspondence between Buyer s prospective lender and Buyer. b. Failure to Meet Financial Requirements. Seller, in its sole discretion, may elect to cancel this Contract upon written notice to Buyer if any of the following occurs: (1) Buyer s application or eligibility for a mortgage loan in the amount set forth in Section C is rejected by a mortgage lender or mortgage lenders, or Buyer s loan approval or mortgage commitment is not approved within the fifty (50) calendar day period specified in Section E.5.a hereof; (2) Buyer fails to supply any proposed mortgage lender with full financial information (including copies of tax returns) or fails to supply Seller with the required Cash Evidence as required in Section E.4.b hereof; { } 11

12 (3) Buyer, after having had a loan approval or mortgage commitment disapproved by Seller or Seller s Lender, is thereafter unable to have such approval or commitment modified or revised to the satisfaction of Seller within thirty (30) business days thereafter; (4) Seller or Seller s Lender, in their absolute discretion, after reviewing the written Cash Evidence submitted to Seller or Buyer s mortgagee, as the case may be, by Buyer, determines that either is not satisfied as to Buyer s ability to make the cash deposit payments as described in Section C above; or (5) Seller is unable to meet Seller s Lender s pre-sale requirement for the units in Luana Garden Villas and/or is unable to obtain financing for Luana. Upon such cancellation, Seller shall direct the Escrow Agent to refund to Buyer all sums paid hereunder by Buyer, less any escrow cancellation fee not in excess of $250. If Seller elects to cancel this Contract for reasons set forth in this Section, Seller shall not be liable for any damage Buyer may suffer as a result of such cancellation. c. Failure of Buyer s Financing at Pre-Closing. If Buyer shall fail for any reason whatsoever to remove any contingency from its loan approval by Pre-Closing or fail (for any reason whatsoever including, without limitation, any purposeful or inadvertent change in Buyer s credit standing) to keep the loan approval in force and thereby fail to close as required herein, such failure shall constitute a default hereunder and Seller shall be entitled, in Seller s sole and absolute discretion, to elect to cancel this Contract and pursue any and all other remedies available to Seller at law or in equity and as set forth in Section E.23 herein. 6. Late Charge. In addition to such other remedies which may be available to Seller by law or pursuant to this Contract, Seller may impose a late charge of one percent (1%) per month on the amount of any such payment which is not paid in the manner specified above. Such late charge shall accrue commencing on the date the payment is due and payable as provided herein. 7. Escrow Agreement; Use of Escrow Funds. Buyer acknowledges that Buyer has had an opportunity to examine and hereby ratifies, approves and accepts the terms and provisions of the Escrow Agreement, which is incorporated herein, and assumes the benefits and obligations set forth therein. Buyer hereby irrevocably authorizes and instructs Escrow Agent to comply with the terms of the Escrow Agreement, and agrees that payments under Section C hereof may be disbursed by Escrow Agent, including disbursements for construction costs, as provided in the Escrow Agreement. 8. Closing Costs. Buyer shall pay for all closing costs, including, without limitation, the cost of drafting the Unit Deed and the cost of the acknowledgments thereof; recording fees; the State of Hawaii conveyance tax (note: in connection with the conveyance tax, Seller and Buyer do hereby appoint the Escrow Agent as their agent for the purpose of filing the affidavit in respect thereto); all other applicable taxes (including, but not limited to, any general excise tax or other tax on furnishings); the escrow fees; the cost of obtaining financing or a financing commitment for any portion of the purchase price and all expenses incident thereto; the expense of credit reports; preparation of all of Buyer s mortgage documents (which costs shall be paid directly to Buyer s mortgagee and shall in no event be reimbursed by Seller); any costs and premiums incurred for Buyer s title insurance; any costs and fees otherwise required to be paid by Buyer in this Contract, including maintenance fees and start-up fees; and any cost incurred by Buyer or Seller as a result of Buyer s requesting changes in a document after Buyer has been given notice by the Escrow Agent that such document will be prepared. Buyer shall also pay for any attorneys fees and costs incurred by Seller in connection with any failure by Buyer to timely preclose and close as set forth herein and otherwise perform all obligations of Buyer as set forth herein. { } 12

13 9. Other Costs. In addition to payment of the closing costs referred to in Section E.8, Buyer acknowledges that Buyer has been informed that Buyer will be required to (a) prepay maintenance fees for a period of one (1) month; (b) prepay real property taxes for the remainder of the real property tax year prorated as of the date of Final Closing; and (c) pay a non-refundable Honua Kai start-up fee in an amount equal to three (3) months maintenance fees, which start-up fee shall be a one-time assessment at sale, not as a common expense, which shall be in addition to the normal monthly maintenance fees, and shall be held, accounted for and expended as funds of the Honu Kai Condominium Association, Inc. ( Association ) for the benefit of all of the unit owners. Buyer further agrees that all maintenance, other taxes, assessments, and other expenses shall also be prorated between Seller and Buyer as of such proration date for real property taxes which shall be the date of Final Closing as defined in Section E.11.a. (Note: This amount, together with other amounts required, is in addition to and is not part of the Total Purchase Price and shall be paid on or before Pre-Closing). 10. Completion of the Unit. a. Estimated Completion, Deadline; Force Majeure. The parties understand that the present estimated completion of the Unit is, and that such date is an approximate date given to the best of Seller s information and belief. Notwithstanding any other provision in this Contract to the contrary, Seller agrees that the completion of construction of the Unit covered by this Contract shall occur on or before thirty (30) months from the date that of execution of this Contract (the Completion Deadline ); provided, however, that said thirty (30) month period shall be extended for any period of time during which Seller is actually and necessarily delayed in completing such construction because of matters beyond Seller s reasonable control, such as strikes, walkouts or other labor disputes, acts of God, inability to obtain labor, materials or merchandise, governmental restrictions, regulations or controls, judicial orders, war, riot, inability to obtain required governmental permits or approvals within the period usually required to obtain such permits in the relevant jurisdiction (provided, however, that delay in obtaining such permits or approvals due to Seller s failure to pursue such permits or approvals in a manner reasonably consistent with the timing of Seller s obligations under this Contract or failure to provide any necessary information to the relevant authorities as and when requested shall not constitute justifiable delay), civil commotion, fire or other casualty, inclement weather (provided, however that reasonable delays due to seasonal inclement weather shall not be deemed sufficient cause to further delay any date, and shall be deemed foreseeable) and other causes beyond the reasonable control of Seller, or by occurrence of a contingency, the non-occurrence of which was a basic assumption upon which this Contract was made ( Force Majeure ). b. Right to Use Purchasers Deposits. Seller reserves the right to use purchaser deposits held in escrow pursuant to binding sales contracts to pay for Luana costs. Disbursement of purchaser deposits prior to closing shall be permitted only if: (1) the Real Estate Commission has issued an effective date for the Public Report for Luana; (2) the Declaration and Bylaws have been filed with the Land Court and the Bureau; and (3) the following have been submitted to the Real Estate Commission: a Luana budget showing all costs required to be paid to complete Luana, evidence of sufficient funds to pay all costs required to be paid to complete Luana, and copies of the executed construction contract, building permit, and evidence of security for completion of construction, such as a completion or performance bond issued by a surety licensed in the State covering 100% of the cost of construction. In the event that Seller satisfies the above conditions and decides to disburse purchaser deposits prior to closing, Seller hereby provides the following notice to Buyer pursuant to Section 514B-92(d) of the Act: Important Notice Regarding Your Deposits: Deposits that you make under your sales contract for the purchase of the unit may be disbursed before closing of your purchase to pay for Luana costs, construction costs, Luana architectural, engineering, finance and legal { } 13

14 fees, and other incidental expenses of Luana. While the developer has submitted satisfactory evidence that Luana should be completed, it is possible that Luana may not be completed. If your deposits are disbursed to pay Luana costs and Luana is not completed, there is a risk that your deposits will not be refunded to you. You should carefully consider this risk in deciding whether to proceed with your purchase. 11. Pre-Closing; Final Closing. a. Pre-Closing. Seller will have the right to pre-close ( Pre-Closing ) this sale by having all documents necessary for Final Closing (defined below) executed and deposited with Escrow Agent prior to the time of Final Closing, which shall not be earlier than thirty (30) days prior to the date Seller estimates that the County of Maui Department of Public Works will issue a permanent certificate of occupancy covering the Unit. Seller reserves the right to schedule and/or reschedule the Pre-Closing date in its sole discretion but shall provide not less than fifteen (15) days written notice to Buyer of the Pre- Closing date. Buyer agrees to take and complete any action which may be necessary to enable Final Closing and Buyer will execute and deliver to the Escrow Agent on or before Pre-Closing, all documents necessary for Final Closing (as determined and provided by Seller) and pay to Escrow Agent the following sums by either a cashier s check or wired funds (personal checks and certified checks are not acceptable): (i) the remaining cash portion of the Total Purchase Price, as provided in Section C.3 above, (ii) all other additional costs and expenses provided for in Sections E.8 and E.9 of this Contract; and (iii) all other sums of money which Buyer is required to pay under this Contract by Pre-Closing and which Buyer shall not have yet paid. This Contract shall constitute Seller s and Buyer s written authority to Escrow Agent to date all documents, to add recording information and to adjust the estimated prorations in accordance with the provisions of this Contract. In the event that Buyer fails to designate the type of tenancy for the vesting of title at least fifteen (15) days prior to the Pre-Closing date, buyers who are sole owners will take title as tenants in severalty; multiple buyers other than married couples will take title as tenants in common; and married couple buyers will take title as tenants by the entirety. If Buyer consists of more than one married couple, each couple will take title as tenant by the entirety as to each other, and each couple will be a tenant in common with every other couple. Whenever a couple or individual takes title with another couple or individual as tenants in common, each tenant in common will take an equal interest, unless Buyer specifies otherwise at least fifteen (15) days prior to the Pre-Closing date. In the event of any changes in the Unit Deed and other closing documents requested by Buyer less than fifteen (15) days prior to the Pre-Closing date, Buyer may be assessed a documentation fee for such changes. Buyer shall have the right to take title to the Unit in the name of a corporation, partnership, limited liability company or other business entity; provided, however, that Buyer has provided evidence to Seller that is acceptable to Seller and Seller s Lender in their its absolute discretion that such corporation, partnership, limited liability company or other business entity is owned by or related to the named Buyer in this Contract. In addition, such partnership, corporation, limited liability company or other business entity, Buyer will be required to furnish appropriate resolutions and other evidence of authority to purchase and execute documents as Seller or Escrow Agent may request. b. Final Closing. The final closing ( Final Closing ) shall occur on that date selected by Seller, in its sole discretion, and identified in a written notice to Buyer. Except as otherwise stated herein, Seller shall give Buyer at least thirty (30) days prior written notice of Final Closing. Final Closing shall not occur on a date earlier than the date the County of Maui Department of Public Works has issued a permanent certificate of occupancy covering the Unit. In the event it appears, in the sole { } 14

15 opinion of Seller, that the certificate of occupancy will issue after the date specified in writing for Final Closing by Seller as aforesaid, Seller shall have the right to extend and reschedule Final Closing by giving Buyer reasonable notice of the rescheduled Final Closing, and in such case the date of the rescheduled Final Closing shall be treated for all purposes as Final Closing. Seller may extend and reschedule Final Closing for up to one hundred twenty (120) days after the issuance of the certificate of occupancy. The Unit Deed shall be recorded in favor of Buyer upon Final Closing. The Total Purchase Price and all other sums of money which Buyer is required to pay under this Contract and which Buyer shall not have paid shall have been paid into Escrow in full by two (2) days before Final Closing. c. Failure to Comply with Pre-Closing or Final Closing Requirements. If Buyer fails to execute all documents necessary for Final Closing (as determined and provided by Seller) on or before Pre-Closing, or if Buyer fails to make the payments required by this Contract when due on or before Pre-Closing, then Buyer shall be deemed to be in default pursuant to Section E.23 hereof. Without limiting, and in addition to, any other remedies that Seller may have as a result of Buyer s failure to make such payments or complete such inspection or execute such documents, Buyer shall remain liable for all maintenance costs, real property taxes and other pro-rated expenses as of the proration date set forth in Sections E.8 and E.9 hereof regardless of when the closing of the sale of the Unit actually occurs, and Buyer shall pay to Seller TWO HUNDRED FIFTY DOLLARS ($250) per calendar day from the date of Final Closing until the date a deed is actually recorded in favor of Buyer or a replacement buyer for the Unit described herein as Seller s cost incurred for Buyer s delay. Seller and Buyer hereby acknowledge that they understand and have agreed that, in such event, the injury to Seller will be difficult and expensive to measure in view of Seller s financial commitments with respect to Luana, and the uncertainty created by Buyer s delay in view of the nature of the real estate market in Hawaii. The parties agree that the above-mentioned amounts are a reasonable estimate of Seller s fair compensation for any damages resulting from such delay and shall be in addition to, and is not part of, the Total Purchase Price and shall be payable immediately regardless of whether the closing of the sale of the Unit actually occurs. 12. Orientation and Actual Possession. a. Orientation. When construction of the Unit is substantially complete, Buyer (or Buyer s designated representative) shall attend an orientation of the Unit on a date and at a time specified by Seller upon reasonable written notice to Buyer, which date and time may be before or after delivery of possession and which may be done on a unit by unit or building by building basis. Upon completion of such orientation, Buyer agrees to sign an orientation sheet to be furnished by Seller or the contractor, which shall list all legitimate work remaining to be completed on the Unit, if any ( Work ). If Buyer does not attend the orientation of the Unit on the date and at the time specified by Seller, Buyer hereby appoints the inspecting architect or engineer for Luana, or Seller or any agent of Seller, to so inspect the Unit and to execute said checklist on behalf of Buyer, and Buyer shall be deemed to have waived all rights of inspection and Buyer acknowledges that such waiver shall not in any way affect Buyer s obligations hereunder. Buyer agrees to accept possession of the Unit despite the fact that Seller may have Work to complete on the Unit, including, without limitation, installation of appliances, as long as Seller agrees to exercise its best efforts to have the contractor for Luana complete such Work within a reasonable time after Buyer s occupancy. Buyer agrees to indemnify Seller for any damages or losses, including interest and reasonable attorneys fees, resulting from any wrongful refusal to accept the Unit upon presentation by Seller. In the event Buyer refuses to participate in the inspection process prior to Final Closing, Seller may treat such refusal as a default pursuant to Section E.22 hereof. b. Occupancy. Delivery of possession of the Unit to Buyer shall be deemed to have occurred when Seller makes the Unit keys available for pick up by Buyer, which shall occur after the recordation of Buyer s Unit Deed, and Buyer agrees that keys for the Unit will not be issued to Buyer and Buyer shall not be entitled to occupy, rent or lease the Unit until such recordation has occurred. Buyer { } 15

16 expressly understands and agrees that Buyer shall in no event take possession of the Unit prior to the Final Closing and full compliance by Buyer with the terms and conditions of this Contract. Violation of this provision shall be deemed a material breach of contract and, in addition to any other remedy of Seller for Buyer s breach of this Contract, Buyer agrees that Seller shall have the right to remove Buyer from the Unit by any lawful means. 13. Risk of Loss; Condemnation. Risk of loss of the Unit and other improvements shall be borne by Seller until the date of Final Closing or the date Buyer takes possession, whichever is earlier, and thereafter such risk of loss shall be borne by Buyer. No taking by eminent domain of an easement or other limited right or of a portion of the common elements which does not in any such case substantially interfere with or diminish the practical enjoyment and use by Buyer of the common elements as originally planned shall be deemed grounds for cancellation hereof. 14. Maintenance Costs; Association Dues and Managing Agent. Buyer has examined and approved the estimate of monthly maintenance charges for the Unit, which estimated budget was prepared by the Association, not Seller, in accordance with generally accepted accounting principles and is contained in the Public Report on Luana, an effective date for which has been issued by the Real Estate Commission, provided to Buyer prior to the execution of this Contract. Buyer acknowledges and agrees that such estimates are only estimates and are not intended to be and do not constitute any representation or warranty by Seller, including, without limitation, any representation or warranty as to the accuracy of such estimates or future maintenance charges and assessments. 15. Honua Kai Documents. Seller shall deliver to Buyer copies of the Declaration, the Bylaws, the House Rules, the Escrow Agreement, the Unit Deed and the Public Report, an effective date for which has been issued by the Real Estate Commission, and individual unit floor plans for each unit type, as the same may have been amended, true copies of these documents, being on file in the Real Estate Commission (the Honua Kai Documents ) at the time Buyer signs a receipt for the Public Report. A copy of the Condominium Map for Honua Kai, which shall also be on file at the Real Estate Commission, will be made available for Buyer s review at Seller s Honua Kai site office during the business hours of said office. Buyer shall execute a receipt for the Honua Kai Documents at the time of delivery. Buyer shall have thirty (30) calendar days from receipt of the Honua Kai Documents to review the Honua Kai Documents. If the Honua Kai Documents are not acceptable to Buyer, Buyer shall, within said thirty (30) day period, provide Seller with written notice canceling this Contract. Upon such cancellation, Buyer shall either return all copies of the Honua Kai Documents provided by Seller or pay a document fee of $250, after which Seller shall direct the Escrow Agent to refund to Buyer all sums paid hereunder by Buyer, less any escrow cancellation fee not in excess of $250; provided that no document fee shall apply if Buyer received the Honua Kai Documents electronically. Buyer does hereby acknowledge that, unless Buyer has exercised Buyer s right to cancel this Contract as aforesaid, Buyer shall have had a full opportunity to read, review, examine and approve the Honua Kai Documents. 16. Seller s Right To Change Luana, Honua Kai and Honua Kai Documents; Conditions Acknowledged by Buyer. a. Seller s Right to Make Changes. (1) Seller reserves the right to modify the Honua Kai Documents as may be required by law, the Real Estate Commission, a title insurance company, an institutional mortgagee or any governmental agency and Buyer authorizes Seller and the Initial Developer to make and specifically approves all changes to said documents and Honua Kai. { } 16