PAYMENT GUARANTY
(Commercial Real Estate)
This Payment Guaranty ("Guaranty") is made as of June
20 1996, by ▇▇▇▇▇ ▇.
ANGEL ("Guarantor") in favor of BANK OF AMERICA OREGON ("Bank").
Factual Background
A. Guarantor is executing this Guaranty to induce Bank to make
a standing loan (defined in Section 2 as the "Loan") to PORTLAND
LOFTS ASSOCIATES LIMITED PARTNERSHIP, a
Delaware limited partnership ("Borrower") in the principal amount
of Five Million Six Hundred Twenty-Five Thousand and No/i 00
Dollars ($5,625,000.00) The Loan is being made under a standing
loan agreement (the "Loan Agreement") entered into as of June ~
1996, between Bank and Borrower.
B. The Loan is evidenced by a promissory note (the
"Note") made payable to Bank in the principal amount of the Loan.
The Note is secured by a deed of trust ("Deed of Trust") covering
certain real and personal property, as therein described (all
collectively, the "Property"). The Note may also be secured by other
collateral, as more fully explained in the Loan Agreement. In connection
with the Loan, Borrower is signing an Unsecured Indemnity Agreement (the
"Borrower's Indemnity").
C. This Guaranty is one of several Loan Documents, as
defined and designated in the Loan Agreement. The Loan Documents
also include the Loan Agreement, the Note, the Deed of Trust and
certain other specified instruments and agreements.
Guaranty
1. Guaranty of Loan. Guarantor unconditionally
guaranties to Bank the full payment of and performance of
Borrower's obligations in connection with the Loan, and
unconditionally agrees to pay Bank the full amount of the Loan.
This is a guaranty of payment,
not of collection. If Borrower causes an Event of Default to
occur in the payment when due of the Loan or any part of it,
Guarantor shall in lawful money of the United States pay to Bank
or order, on demand, all sums due and owing on the Loan,
including all interest, charges, fees and other sums, costs and
expenses.
2. Loan. In this Guaranty, the term "Loan" is broadly
defined to mean and include all primary, secondary, direct,
indirect, fixed and contingent obligations of Borrower to pay
principal, interest, prepayment charges, late charges, loan fees
and any other fees, charges, sums, costs and expenses which may
be owing at any time under the Note or the other Loan Documents,
as any or all of them may from time to time be modified, amended,
extended or renewed. For purposes of this Guaranty, the Loan
includes any and all such obligations which may arise in
connection with (a) the Borrower's Indemnity (b) any set aside
letters, and (c) any advances made before recording of the Deed
of Trust. If the amount outstanding under the Loan is determined
by a court of competent jurisdiction, that determination shall be
conclusive and binding on Guarantor, regardless of whether
Guarantor was a party to the proceeding in which the
determination was made or not.
3. Rights of Bank. Guarantor authorizes Bank to
perform any or all of the following acts at any time in its sole
discretion, all without notice to Guarantor and without affecting
Guarantor's obligations under this Guaranty:
(a) Bank may alter any terms of the Loan or any
part of it, including renewing, compromising, extending or
accelerating, or otherwise changing the time for payment of, or
increasing or decreasing the rate of interest on, the Loan or any
part of it.
(b) Bank may take and hold security for the Loan
or this Guaranty, accept additional or substituted security for
either, and subordinate, exchange, enforce, waive, release,
compromise, fail to perfect and sell or otherwise dispose of any
such security.
(c) Bank may direct the order and manner of any
sale of all or any part of any security now or later to be held
for the Loan or this Guaranty, and Bank may also bid at any such
sale.
(d) Bank may apply any payments or recoveries
from Borrower, Guarantor or any other source, and any proceeds of
any security, to Borrower's obligations under the Loan Documents
in such manner, order and priority as Bank may elect, whether or
not those obligations are guarantied by this Guaranty or secured
at the time of the application.
(e) Bank may release Borrower of its liability
for the Loan or any part of it.
(f) Bank may substitute, add or release any one
or more guarantors or endorsers.
(g) In addition to the Loan, Bank may extend
other credit to Borrower, and may take and hold security for the
credit so extended, all without affecting Guarantor's liability
under this Guaranty.
4. Guaranty to be Absolute. Guarantor expressly
agrees that until the Loan is paid and performed in full and each
and every term, covenant and condition of this Guaranty is fully
performed, Guarantor shall not be released by or because of:
(a) Any act or event which might otherwise
discharge, reduce, limit or modify Guarantor's obligations under
this Guaranty;
(b) Any waiver, extension, modification,
forbearance, delay or other act or omission of Bank, or its
failure to proceed promptly or otherwise as against Borrower,
Guarantor or any security;
(c) Any action, omission or circumstance which
might increase the likelihood that Guarantor may be called upon
to perform under this Guaranty or which might affect the rights
or remedies of Guarantor as against Borrower; or
(d) Any dealings occurring at any time between
Borrower and Bank, whether relating to the Loan or otherwise.
Guarantor hereby expressly waives and surrenders any
defense to its liability under this Guaranty based upon any of
the foregoing acts, omissions, agreements, waivers or matters. It
is the purpose and intent of this Guaranty that the obligations
of Guarantor under it shall be absolute and unconditional under
any and all circumstances.
5. Guarantor's Waivers. Guarantor waives:
(a) All statutes of limitations as a defense to
any action or proceeding brought against Guarantor by Bank, to
the fullest extent permitted by law;
(b) Any right it may have to require Bank to
proceed against Borrower, proceed against or exhaust any security
held from Borrower, or pursue any other remedy in Bank's power to
pursue;
(c) Any defense based on any claim that
Guarantor's obligations exceed or are more burdensome than those
of Borrower;
(d) Any defense based on: (i) any legal
disability of Borrower, (ii) any release, discharge,
modification, impairment or limitation of the liability of
Borrower to Bank from any cause, whether consented to by Bank or
arising by operation of law or from any bankruptcy or other
voluntary or involuntary proceeding, in or out of court, for the
adjustment of debtor-creditor relationships ("Insolvency
Proceeding") and (iii) any rejection or disaffirmance of the
Loan, or any part of it, or any security held for it, in any such
Insolvency Proceeding;
(e) Any defense based on any action taken or
omitted by Bank in any Insolvency Proceeding involving Borrower,
including any election to have Bank's claim allowed as being
secured, partially secured or unsecured, any extension of credit
by Bank to Borrower in any Insolvency Proceeding, and the taking
and holding by Bank of any security for any such extension of
credit;
(f) All presentments, demands for performance,
notices of non performance, protests, notices of protest, notices
of dishonor, notices of acceptance of this Guaranty and of the
existence, creation, or incurring of new or additional
indebtedness, and demands and notices of every kind except for
any demand or notice by Bank to Guarantor expressly provided for
in Section 1;
(g) Any defense based on or arising out of any
defense that Borrower may have to the payment or performance of
the Loan or any part of it; and
(h) Any defense, claim and damage arising from
errors or omissions in
Bank's administration of the Loan.
6. Waivers of Subrogation and Other Rights.
(a) Upon a default by Borrower, Bank in its sole
discretion, without prior notice to or consent of Guarantor, may
elect to: (i) foreclose either judicially or nonjudicially
against any real or personal property security it may hold for
the Loan, (ii) accept a transfer of any such security in lieu of
foreclosure, (iii) compromise or adjust
the Loan or any part of it or make any other accommodation with
Borrower or Guarantor or (iv) exercise any other remedy against
Borrower or any security. No such action by Bank shall release or
limit the liability of Guarantor, who shall remain liable under
this Guaranty after the action, even if the effect of the action
is to deprive Guarantor of any subrogation rights, rights of
indemnity, or other rights to collect reimbursement from Borrower
for any sums paid to Bank, whether contractual or arising by
operation of law or otherwise. Guarantor expressly agrees that
under no circumstances shall it be deemed to have any right,
title, interest or claim in or to any real or personal property
to be held by Bank or any third party after any foreclosure or
transfer in lieu of foreclosure of any security for the Loan.
(b) Regardless of whether Guarantor may have made
any payments to Bank, Guarantor forever waives: (i) all rights to
enforce any remedy that Bank may have against Borrower, and (ii)
all rights to participate in any security now or later to be held
by Bank for the Loan. Provided such waiver shall not affect or
impair any other right of contribution, subrogation, collection,
indemnity or rights Guarantor may have against Borrower
contractually or arising by operation of law or otherwise.
7. Revival and Reinstatement. If Bank is required to
pay, return or restore to Borrower or any other person any amounts
previously paid on the Loan because of any
Insolvency Proceeding of Borrower, any stop notice or any other
reason, the obligations of Guarantor shall be reinstated and revived
and the rights of Bank shall continue with regard to
such amounts, all as though they had never been paid.
8. Information Regarding Borrower and the Property.
Before signing this Guaranty, Guarantor investigated the
financial condition and business operations of Borrower, the
present and former condition, uses and ownership of the Property,
and such other matters as Guarantor deemed appropriate to assure
itself of Borrowers ability to discharge its obligations under
the Loan Documents. Guarantor assumes full responsibility for
that due diligence, as well as for keeping informed of all
matters which may affect Borrower's ability to pay and perform
its obligations to Bank. Bank has no duty to disclose to
Guarantor any information which Bank may have or receive about
Borrower's financial condition or business operations, the
condition or uses of the Property, or any other circumstances
bearing on Borrower's ability to perform.
9. Subordination. Any rights of Guarantor, whether
now existing or later arising, to receive payment on account of
any indebtedness (including interest) owed to it by Borrower or
any subsequent owner of the Property, or to withdraw capital
invested by it in Borrower, or to receive distributions from Borrower,
shall at all times be subordinate as to lien and time of payment and
in all other respects to the full and prior repayment to Bank of the
Loan. Guarantor shall not be entitled to enforce or receive
payment of any sums hereby subordinated until the Loan has been
paid and performed in full and any such sums received in
violation of this Guaranty shall be received by Guarantor in
trust for Bank. The foregoing notwithstanding, Guarantor is not
prohibited from receiving (a) such reasonable management fees or
reasonable salary from Borrower as Bank may find acceptable from
time to time, and (b) distributions from Borrower in an amount
equal to any income taxes imposed on Guarantor which are
attributable to Borrower's income from the Property, and (c) so
long as the loan is current and Borrower maintains adequate
reserves for taxes, insurance and maintenance, then Borrower is
permitted to distribute excess proceeds for repayment of loans
incurred by Borrower from Guarantor in connection with the
property.
10. Financial Information. Guarantor shall keep true
and correct financial books and records, using generally accepted
accounting principles consistently applied, or such other
accounting principles as Bank in its reasonable judgment may find
acceptable from time to time. Within thirty (30) days after
written request by the Bank, but in no event no earlier than one
hundred-twenty (120) days after the end of each year, Guarantor
shall deliver to Bank its financial statement, together with a
statement showing all changes in its financial condition which
occurred during the preceding year and shall provide copies of
each such Guarantor's tax returns, together with all supporting
schedules, including without limitation K-i forms, extension
requests and statements of contributions to subchapter S
corporations within thirty (30) days of filing same. Guarantor
shall also promptly deliver to Bank all quarterly balance sheets
and income statements if they become available or if Bank
requests them. Within thirty (30) days after written request by
the Bank, Guarantor shall promptly provide Bank with any other
financial or other information concerning each Guarantor's
affairs and properties as Bank may request.
11. Guarantor's Representations and Warranties:
Guarantor represents and warrants that:
(a) all financial statements and other financial
information furnished or to be furnished to Bank are or will be
true and correct and do or will fairly represent the financial
condition of Guarantor (including all contingent liabilities);
(b) all financial statements were or will be
prepared in accordance with generally accepted accounting
principles, or such other accounting principles as may be
acceptable to Bank at the time of their preparation, consistently
applied; and
(c) there has been no material adverse change in
Guarantor's financial condition since the dates of the statements
most recently furnished to Bank.
12 Events of Default. Bank may declare Guarantor to
be in default under this Guaranty upon the occurrence of any of
the following events ("Events of Default"):
(a) Guarantor fails to perform any of its
obligations under this Guaranty; or
(b) Guarantor revokes this Guaranty or this
Guaranty becomes ineffective for any reason; or
(c) Any representation or warranty made or given
by Guarantor to Bank proves to be false or misleading in any
material respect; or
(d) Guarantor becomes insolvent or the subject of
any Insolvency Proceeding (except that, in the case of an
involuntary proceeding, the same shall not constitute an Event of
Default if the proceeding is dismissed within ninety (90) days of
filing); or
(e) Guarantor dies, dissolves or liquidates, or
any of these events happens to any of Guarantor's members,
general partners or to its chief executive or majority
shareholder, or Guarantor's managing general partner or its chief
executive ceases for any reason to act in that capacity unless
within ninety (90) days of the death or disability, Guarantor
provides a substitute guarantor or additional collateral,
satisfactory to Bank, in Bank's sole discretion.
13 Arbitration.
(a) Mandatory Arbitration. After the Deed of
Trust has been released, fully reconveyed or extinguished, any
controversy or claim between or among the parties, including
those arising out of or relating to this Guaranty or the Loan
Documents and any claim based on or arising from an alleged tort,
shall at the request of any party be determined by arbitration.
The arbitration shall be conducted in accordance with the United
States Arbitration Act (Title 9, U.S. Code), notwithstanding any
choice of law provision in this Guaranty, and under
the Commercial Rules of the AAA. The arbitrator(s) shall give
effect to statutes of limitation in determining any claim Any
controversy concerning whether an issue is arbitrable shall be
determined by the arbitrator(s). Judgment upon the arbitration
award may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or
pursuit of a provisional or ancillary remedy shall not constitute
a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party
contests such action for judicial relief
(b) Real Property Collateral. Notwithstanding
the provisions of subsection 13(a), no controversy or claim shall
be submitted to arbitration without the consent of all parties
if, at the time of the proposed submission, such controversy or
claim arises from or relates to an obligation by Guarantor or
Borrower to Bank which is secured by real property collateral. If
all parties do not consent to submission of such a controversy or
claim to arbitration, the controversy or claim shall be
determined by a court of competent jurisdiction.
(c) Provisional Remedies Self-Help and
Foreclosure. No provision of this Section 13 shall limit the
right of any party to exercise self-help remedies such as setoff
foreclosure against or sale of any real or personal property
collateral or security, or to obtain provisional or ancillary
remedies from a court of competent jurisdiction before, after, or
during the pendency of any arbitration or other proceeding. The
exercise of a remedy does not waive the right of either party to
resort to arbitration or reference. At Bank's option, foreclosure
under a deed of trust or mortgage may be accomplished either by
exercise of power of sale under the deed of trust or mortgage or
by judicial foreclosure.
14. Authorization No Violation. Guarantor is
authorized to execute, deliver and perform under this Guaranty,
which is a valid and binding obligation of Guarantor. No
provision or obligation of Guarantor contained in this Guaranty
violates any applicable law, regulation or ordinance, or any
order or ruling of any court or governmental agency. No such
provision or obligation conflicts with, or constitutes a breach
or default under, any agreement to which Guarantor is a party.
15. Additional and Independent Obligations.
Guarantor's obligations under this Guaranty are in addition to
its obligations under any other existing or future guaranties,
each of which shall remain in full force and effect until it is
expressly modified or released in a writing signed by Bank.
Guarantor's obligations under this Guaranty are independent of
those of Borrower on the Loan. Bank may bring a separate action,
or commence a separate reference or arbitration proceeding
against Guarantor without first proceeding against Borrower, any
other person or any security that Bank may hold, and without pursuing
any other remedy. Bank's rights under this Guaranty shall not be
exhausted by any action by Bank until the Loan has been paid and
performed in full.
16. No Waiver Consents Cumulative Remedies. Each
waiver by Bank must be in writing, and no waiver shall be
construed as a continuing waiver. No waiver shall be implied from
Bank's delay in exercising or failure to exercise any right or
remedy against Borrower, Guarantor or any security. Consent by
Bank to any act or omission by Borrower or Guarantor shall not be
construed as a consent to any other or subsequent act or
omission, or as a waiver of the requirement for Bank's consent to
be obtained in any future or other instance. All remedies of Bank
against Borrower and Guarantor are cumulative.
17. No Release. Guarantor shall not be released from
its obligations under this Guaranty except by a writing signed by
Bank or performance in full of the obligations under this
Guaranty. The failure of any Guarantor to sign this Guaranty
shall not in any way affect, release or discharge the liability
of any Guarantor who signs this Guaranty. In the event that there
are multiple Guarantors, Bank's release of one or more such
Guarantors shall not in any way affect, release or discharge the
liability of the remaining Guarantors hereunder.
18. Heirs Successors and Assigns; Participations. The
terms of this Guaranty shall bind and benefit the heirs, legal
representatives, successors and assigns of Bank and Guarantor;
provided, however, that Guarantor may not assign this Guaranty,
or assign or delegate any of its rights or obligations under this
Guaranty, without the prior written consent of Bank in each
instance. Bank in its sole discretion may sell or assign
participations or other interests in the Loan and this Guaranty,
in whole or in part, all without notice to or the consent of
Guarantor and without affecting Guarantor's obligations under
this Guaranty. Also without notice to or the consent of
Guarantor, Bank may disclose any and all information in its
possession concerning Guarantor, this Guaranty and any security
for this Guaranty to any actual or prospective purchaser of any
securities issued or to be issued by Bank, and to any actual or
prospective purchaser or assignee of any participation or other
interest in the Loan and this Guaranty.
19. Notices. All notices given under this Guaranty
must be in writing and shall be effectively served upon delivery,
or if mailed, upon the first to occur of receipt or the
expiration of forty-eight hours after deposit in certified United
States mail, postage prepaid, sent to the party at its address
given at the end of this Guaranty. Those addresses may be changed
by Bank or Guarantor by written notice to the other party.
Service of any notice on any one Guarantor signing this Guaranty
shall be effective service on Guarantor for all purposes.
20. Rules of Construction. In this Guaranty, the word
"Borrower" includes both the named Borrower and any other person
who at any time assumes or otherwise becomes primarily liable for
all or any part of the obligations of the named Borrower on the
Loan. The word "person" includes any individual, company, trust
or other legal entity of any kind. If this Guaranty is executed
by more than one person, the word "Guarantor" includes all such
persons. The word "include(s)" means "include(s), without
limitation," and the word "including" means "including, but not
limited to." When the context and construction so require, all
words used in the singular shall be deemed to have been used in
the plural and vice versa. No listing of specific instances,
items or matters in any way limits the scope or generality of any
language of this Guaranty. All headings appearing in this
Guaranty are for convenience only and shall be disregarded in
construing this Guaranty.
21. Governing Law. This Guaranty shall be governed by,
and construed in accordance with, the laws of the State of
Oregon.
22. Costs and Expenses. If any lawsuit, reference or
arbitration is commenced which arises out of, or which relates to
this Guaranty, the Loan Documents or the Loan, the prevailing
party shall be entitled to recover from each other party such
sums as the court, referee or arbitrator may adjudge to be
reasonable attorneys' fees (including allocated costs for
services of in-house counsel) in the action or proceeding, in
addition to costs and expenses otherwise allowed by law. In all
other situations, including any Insolvency Proceeding, Guarantor
agrees to pay all of Bank's costs and expenses, including
attorneys' fees (including allocated costs for services of Bank's
in-house counsel) which may be incurred in any effort to collect
or enforce the Loan or any part of it or any term of this
Guaranty. From the time(s) incurred until paid in full to Bank,
all sums shall bear interest at the Default Rate provided in the
Note.
23. Consideration. Guarantor acknowledges that it
expects to benefit from Bank's extension of the Loan to Borrower
because of its relationship to Borrower, and that it is executing
this Guaranty in consideration of that anticipated benefit.
24. Integration; Modifications. This Guaranty (a)
integrates all the terms and conditions mentioned in or
incidental to this Guaranty, (b) supersedes all oral negotiations
and prior writings with respect to its subject matter, and (c) is
intended by Guarantor and Bank as the final expression of the
agreement with respect to the terms and conditions set forth in
this Guaranty and as the complete and exclusive statement of the
terms agreed to by Guarantor and Bank. No representation,
understanding, promise or condition shall be enforceable against
any party unless it is contained in this Guaranty. This
Guaranty may not be modified except in a writing signed
by both Bank and Guarantor.
25. Miscellaneous. The death or legal
incapacity of any Guarantor shall not terminate the
obligations of such Guarantor or any other Guarantor
under this Guaranty, including its obligations with
regard to future advances under the Loan Documents. The
liability of all persons who are in any manner obligated
under this Guaranty shall be joint and several. The
illegality or unenforceability of one or more provisions
of this Guaranty shall not affect any other provision.
Any Guarantor who is married agrees that Bank may look to
all of his or her community property and separate
property to satisfy his or her obligations under this
Guaranty. Time is of the essence in the performance of
this Guaranty by Guarantor.
26. Special Provision. Without limiting the
foregoing or any other provision of this Loan Agreement
or the Loan Documents, in order to avoid any
misunderstanding between the parties, the parties agree
to the following special provision:
Guarantor and each of its constituent partners, and
their permitted successors and assigns (if any),
agree that no agreement, representation, warranty,
promise, commitment, or statement of any kind
(collectively, "Statements") by any person related
directly or indirectly to this Loan or the Property
shall be binding on Bank, its parent, subsidiaries,
affiliates, participants, assigns, or the officers,
directors, employees, and agents of any of them
(collectively, the "Bank Related Parties"), unless
the Statements are in writing and executed by a
duly authorized officer of Bank, Guarantor and each
of its constituent partners, and their permitted
successors and assigns (if any), agree not to rely
upon such Statements in any way and further agree
not to claim waiver of the foregoing provision
(requiring all Statements to be in writing) for any
reason. This provision requiring any Statement to
be in writing to be enforceable against the Bank
Related Parties cannot be waived orally or by
conduct.
GUARANTOR: Address Where Notices to
Guarantor are to be Sent:
▇▇▇▇▇ ▇. Angel ▇▇▇▇ ▇.▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Copy to:
Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Ball, Janick & ▇▇▇▇▇▇
▇▇▇ ▇▇▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Address Where Notices to Bank
are to be
Sent:
BANK OF AMERICA - OREGON
Loan Administration No.2098
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
