STANDING LOAN AGREEMENT
This Standing Loan Agreement (hereinafter referred to as
"Loan Agreement"), dated as of June 20, 1996, is between PORTLAND
LOFTS ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited
partnership (Borrower") and BANK OF AMERICA OREGON, an Oregon
state chartered commercial bank ("Bank").
Agreement
I. Loan Terms.
1.1 Amount and Purpose.
Bank shall make a loan to Borrower in the principal
amount of Five Million Six Hundred Twenty-Five Thousand and
No/100 Dollars ($5,625,000.00) (the "Loan") to be used for
Refinance as described below.
The Loan will be evidenced by a promissory note (the "Note")
payable to Bank in the original principal amount of the Loan and
will be secured by a Deed of Trust with Assignment of Rents,
Security Agreement and Fixture Filing ("Deed of Trust") covering
certain real property commonly known as Xxxxxxxx Hardware Lofts,
000-000 X.X. 0xx Xxxxxx, Xxxxxxxx, Xxxxxx 00000 (together with
all improvements now or hereafter located thereon, the
"Property") and certain personal property and other collateral.
Xxxxxx X. Xxxxx, XX and Xxxxx X. Angel (collectively,
"Guarantors") will guaranty Borrower's obligations under this
Loan Agreement pursuant to a Payment Guaranty of even date
herewith (collectively, the "Guaranties").
1.2 Documentation.
At the closing of this transaction, Borrower will
deliver the following documents and other items, executed and
acknowledged as appropriate, all in form and substance
satisfactory to Bank: (a) this Loan Agreement; (b) the Note; (c)
the Deed of Trust; (d) a UCC- 1 Financing Statement perfecting a
first-position lien on all personal property collateral; (e) the
Guaranties, (f) a 1970 form ALTA extended coverage title
insurance policy insuring Bank that the Deed of Trust constitutes
a valid and enforceable lien on the Property subject and
subordinate only to such liens or other matters as Bank has
approved in writing; (g) if the Deed of Trust is to be junior to
any other lien or deed of trust on the Property, a Beneficiary's
Statement from the holder of such prior lien or deed of trust;
(h) evidence of the casualty and other insurance coverage required under this
Loan Agreement; (i) if Borrower is anything other than a natural
person, evidence of Borrower's due formation and good standing or
existence, as well as due authorization and execution of the Loan
Documents; (]) if applicable, Subordination Agreements and
Estoppels from tenants leasing space in the Property; (k) if the
Property is to be leased to third parties, Borrower's pro forma
lease form; (1) a loan fee in the amount of $70,312.50; (m) an
Environmental Questionnaire and Disclosure Statement prepared and
certified by Borrower, and, if Bank requires, an environmental
survey of the Property prepared by an environmental consultant
satisfactory to Bank; and (n) such other documents, Property
information and other assurances as Bank may require.
1.3 INTENTIONALLY DELETED
1.4 Disbursement Procedures.
Bank shall disburse the Loan proceeds as follows:
(a) Pay Bank of America Oregon a loan fee in the
amount of $70,312.50;
(b) Pay Bank of America Oregon $55.00 to reimburse the
fee advanced for pre-closing and post-closing UCC searches;
(c) Pay Bank of America Oregon Commercial Appraisal
Group for preparation and review of the appraisal;
(d) Pay Bank of America Oregon to reimburse the
amounts advanced or incurred for legal fees in connection with
the closing and administration of the loan;
(e) Pay Chicago Title Insurance Company for recording
and escrow fees, title charges and related fees.
(f) Pay any unpaid taxes and assessments on the
Property, plus interest;
(g) Payoff the indebtedness evidenced by a lien in
favor of City of Portland recorded on March 11, 1992, in the
original amount of $15,000.00
(h) Pay $5,400,000.00 to be held in escrow under the
terms of the Settlement Agreement dated May 21. 1996 among
Borrower, Bank, Xxxxxxx Street Real Estate Company, L.P. and
others.
(i) Any remaining loan proceeds shall be paid per the
Borrower's instructions.
II. Covenants of the Borrower.
Borrower promises to keep each of the following covenants:
2.1 Compliance with Law.
Borrower shall comply with all existing and future
laws, regulations, orders, building restrictions and requirements
of, and all agreements with and commitments to, all governmental,
judicial or legal authorities having jurisdiction over the
Property and Borrower's business.
2.2 Conditional Sales Contracts.
Without Bank's prior written consent, which consent
shall not be unreasonably withheld, Borrower shall not purchase
any materials, equipment, furnishings or fixtures to be installed
on the Property under any agreement where the seller reserves
title or the right of removal or repossession after such items
are installed on the Property.
2.3 Site Visits.
Borrower shall allow Bank access to the Property at any
reasonable time between the hours of 9:00 a.m. and 5:00 p.m.
after reasonable advance notice for the purposes of performing an
appraisal, inspecting the Property, taking soil or groundwater
samples, and conducting tests, among other things, to investigate
for the presence of Hazardous Substances, as defined in Article
IV. Borrower shall also allow Bank to examine, copy and audit its
books and records. Bank is under no duty to visit or observe the
Property, or to examine any books or records. Any site visit,
observation or examination by Bank shall be solely for the
purpose of protecting Bank's security and preserving Bank's
rights under the Loan Documents. Bank owes no duty of care to
protect Borrower or any other party against, or to inform
Borrower or any other party of, any adverse condition affecting
the Property, including any defects in the design or construction
of any improvements on the Property or the presence of any
Hazardous Substances on the Property.
2.4 Insurance.
Borrower shall maintain the following insurance:
(a) All risk property damage insurance in nonreporting
form on the Property, with a policy limit in an amount not
less than the full insurable value of the Property on a
replacement cost basis, including tenant improvements, if
any. The policy shall include a business interruption (or
rent loss, if more appropriate) endorsement in the amount of
six months' projected rents or income, a lender's loss
payable endorsement (438 BFU) in favor of Bank, and any
other endorsements required by Bank.
(b) Comprehensive General Liability coverage with such
limits as Bank may require. Should other than Borrower
provide the insurance, such policy shall name Borrower as an
additional insured with respect to the Property. Coverage
shall be written on an occurrence basis, not claims made.
(c) Such other insurance as Bank may require, which
may include earthquake and flood.
All policies of insurance required by Bank must be issued by
companies approved by Bank and otherwise be acceptable to Bank as
to amounts, forms, risk coverages and deductibles. In addition,
each policy (except workers' compensation) must provide Bank at
least thirty (30) days' prior notice of cancellation, non-renewal
or modification. If Borrower fails to keep any such coverage in
effect while the Loan is outstanding, Bank may procure the
coverage at Borrower's expense. Borrower shall reimburse Bank,
on demand, for all premiums advanced by Bank, which advances
shall be considered to be additional loans to Borrower secured by
the Deed of Trust and bearing interest at the default rate
provided in the Note.
2.5 Payment of Expenses.
Borrower shall pay all reasonable costs and expenses
incurred by Bank in connection with the making, disbursement and
administration of the Loan, as well as any revisions, extensions,
renewals or "workouts" of the Loan, and in the exercise of any of
Bank's rights or remedies under this Loan Agreement. Such costs
and expenses include title insurance, recording and escrow
charges, fees for appraisal (but not more than one appraisal in
any twelve (12) month period), environmental services, legal fees
and expenses of Bank's counsel and any other reasonable fees and
costs for services, regardless of whether such services are
furnished by Bank's employees or by independent contractors.
Borrower acknowledges that the Loan tee does not include amounts
payable by Borrower under this section. All such sums incurred by
Bank and not immediately reimbursed by Borrower shall be
considered an additional loan to Borrower secured by the Deed of
Trust and bearing interest at the default rate provided in the
Note.
2.6 Financial and Other Information.
If Borrower or any Guarantor is other than a natural
person or a trust, Borrower shall provide Bank, within one
hundred - twenty (120) days of the close of Borrower's and each
such Guarantor's fiscal year-end, its and each such Guarantor's
annual financial statements, including a year-end balance sheet
and annual profit and loss statement and shall provide Bank its
and each such Guarantor's tax returns, together with 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. If
Borrower or any Guarantor is a natural person or a trust,
Borrower shall provide Bank its and each such Guarantor's year
end financial statement within one hundred - twenty (120) days of
the fiscal year end and shall provide copies of its and 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. Borrower shall also provide an
annual operating statement and rent roll on the Property in form
and substance satisfactory to Bank within ninety (90) days of
Borrower's fiscal year-end. Within thirty (30) days after request
by the Bank, Borrower shall promptly provide Bank with any other
financial or other information concerning its and each
Guarantor's affairs and properties as Bank may request.
2.7 Notices.
Borrower shall promptly notify Bank in writing of:
(a) any litigation filed against Borrower, Guarantor
or the Property, and litigation filed against the General Partner
of Borrower that directly relates to the Property, where the
amount claimed is One Hundred Thousand Dollars ($100,000.00) or
more;
(b) any notice that the Property or Borrower's or
Guarantor's business fails in any respect to comply with any
applicable law, regulation or court order; and
(c) any material adverse change in the physical
condition of the Property or Borrower's or any Guarantor's
financial condition or operations or other circumstance that
adversely affects Borrower's intended use of the Property or
Borrower's or Guarantor's ability to repay the Loan.
2.8 Indemnity.
Borrower agrees to indemnify, defend with counsel
acceptable to Bank, and hold Bank harmless from and against all
liabilities, claims, actions, damages, costs and expenses
(including all legal fees and expenses of Bank's counsel) arising
out of or resulting from the ownership, operation, or use of the
Property, whether such claims are based on theories of derivative
liability, comparative negligence or otherwise. Notwithstanding
anything to the contrary in any other Loan Document, the
provisions of this Section 2.8 shall not be secured by the Deed
of Trust, and shall survive the termination of this Loan
Agreement, repayment of the Loan and foreclosure of the Deed of
Trust or similar proceedings.
2.9 Preservation of Rights: Maintenance of Properties.
Borrower shall obtain and preserve all rights,
privileges and franchises necessary or desirable for the
operation of the Property and the conduct of Borrower's business.
Borrower shall maintain all its properties in good condition.
2.10 Performance of Acts.
Upon request by Bank, Borrower shall perform all acts
which may be necessary or advisable to perfect any lien or
security interest provided for in the Loan Documents or to carry
out the intent of the Loan Documents.
2.11 Keeping Guarantor Informed.
Borrower shall keep each Guarantor, informed of
Borrower's financial condition and business operations and all
other circumstances which may affect Borrower's ability to pay
and perform its obligations under the Loan Documents. In
addition, Borrower shall deliver to each such person all of the
financial information required to be furnished to Bank hereunder.
2.12 Maximum Loan-to-Value Ratio.
Borrower agrees that the ratio of the total committed amount of
the Loan to the current "as is" value of the Property ("Current
As Is Value") shall at no time exceed eighty percent (80%) (the
"Maximum Loan-to-Value Ratio"). If the debt service coverage
("DSC") for the Property falls below 1. lOX DSC annually, based
on the Property's actual annual net operating income ("NOI") as
reported annually by Borrower, divided by the debt service
on the Loan utilizing the remaining amortization schedule and the
current note rate as defined in the Promissory Note, an appraisal
may be required at Bank's option, but not more than annually, at
Borrower's expense. For purposes of this section, Bank shall
determine the Current As Is Value of the Property by an appraisal
using a methodology which (i) conforms to then-current regulatory
requirements, (ii) is considered by Bank to be reasonable and
appropriate under the circumstances, and (iii) takes into account
then-current market conditions, including vacancy factor,
discount rates, and rental rates and concessions, all as
determined by Bank. If Bank at any time should determine that
such ratio has been exceeded, Bank may make written demand on
Borrower to repay principal of the Loan in an amount sufficient
in Bank's reasonable judgment to cause the Maximum Loan-to-Value
Ratio to be met. Borrower shall make any such payment of
principal within thirty (30) days after Bank's demand. No
Prepayment Fee will be assessed on such payment.
2.13 Further Encumbrances.
Borrower acknowledges that Bank has relied upon the
Property not being subject to additional liens or encumbrances
for reasons which include, but are not limited to, the
possibility of competing claims or the promotion of plans
disadvantageous to Bank in bankruptcy; the risks to Bank in a
junior lienholder's bankruptcy; questions which involve the
priority of future advances, the priority of future leases of the
Property, the marshaling of Borrower's assets, and Bank's rights
to determine the application of condemnation awards and insurance
proceeds; the impairment of Bank's option to accept a deed in
lieu of foreclosure; and Bank's requirements concerning
Borrower's preservation of its equity in the Property and the
absence of debt which could increase the likelihood of Borrower's
inability to perform its obligations when due. Therefore, as a
principal inducement to Bank to make the Loan and with the
knowledge that Bank will materially rely upon this section in so
doing. Borrower covenants not to voluntarily or involuntarily
encumber the Property or any part thereof. Without limiting the
generality of the foregoing and irrespective of the priority
thereof, no mortgages, deeds of trust or other forms of security
interests shall encumber any real or personal property which is
the subject of any lien or security interest granted to Bank as
security for the Note. Encumbrances and hypothecations of stock
or partnership interests in Borrower or any successor of
Borrower, sale lease-backs, transfers by leases with purchase
options, and conveyances by real estate contract shall each be
deemed an encumbrance for the purposes of this Section. Any
transfers (i) of partnership interests in Historic Preservation
Properties 1989 Limited Partnership ("HPP") or its partners or
(ii) of partnership interests by Xxxxxx X. Xxxxx XX for estate
planning purposes, will neither violate the provisions of this
Section nor require the Beneficiary's consent but will require
written notice to the Beneficiary. In the event of a transfer of
the interest of HPP to East Bank Angel Joint Venture ('~EBAJV")
or of the interest of EBAJV to HPP in accordance with the Amended
and Restated Agreement of Limited Partnership of Portland Lofts
Associates Limited Partnership, as in effect on the date of this deed of
Trust, the Beneficiary shall not increase the interest rate on
the Loan.
2.14 UCC Searches.
At any time requested by Bank, Borrower will reimburse
Bank for all expenses incurred by Bank to obtain current uniform
commercial code searches made in the office of the Secretary of
State of the State of Oregon, and such other places as Bank may
require, covering Borrower and such other persons and entities as
Bank may require. Bank may require, at its sole discretion,
Borrower to take action to remove filings related to or which
could relate to the Property, or any other collateral for the
Loan, other than filings made pursuant to the Loan Documents or
otherwise approved by Bank.
III. Use or Leasing of the Property.
3.1 Use of the Property.
Borrower shall develop and hold the Property as income
property for lease to unaffiliated third parties in accordance
with the provisions of this Article III provided however, Bank
understands Borrower may desire to pursue condominium conversion
of the Property at a future date. Bank, in its sole discretion,
reserves the right to reach an underwriting determination on
whether the Bank will consent to such conversion based on
information required by the Bank at that time.
3.2 Leasing.
Except as otherwise approved by Bank in writing, all
leases of space in the Property shall be documented on a pro
forma lease approved by Bank, shall be entered into with bona
fide third party tenants financially capable of performing their
obligations under their leases, and shall reflect arms-length
transactions at the then current market rate for comparable
space. The pro forma lease may be modified so long as the
modifications do not impair, or purport to impair, the Bank's, or
any Lender's rights under the pro forma lease. Borrower shall
perform all obligations required to be performed by it as
landlord under any lease affecting any part of the Property.
Borrower shall not accept payment of more than one month's rent
in advance from any tenant.
3.3 Delivery of Leasing Information and Documents.
Borrower shall promptly deliver to Bank such rent
rolls, leasing schedules and reports, operating statements or
other leasing information as Bank from time to time may
request, and shall promptly notify Bank of any material tenant
dispute or material adverse change in leasing activity on the
Property. Borrower shall use all reasonable efforts to promptly
obtain and deliver to Bank such estoppel certificates and
subordination and attornment agreements from tenants as Bank from
time to time may require. In no event shall any approval by Bank
of a lease be a representation of any kind with regard to the
lease or its enforceability, or the financial capacity of any
tenant or lease guarantor.
3.4 Income from Property.
Borrower shall first apply all income derived from the
Property, including all income from leases, to pay costs and
expenses associated with the ownership, maintenance, operation
and leasing of the Property, including all amounts then required
to be paid under the Loan Documents, before using or applying
such income for any other purpose. No such income shall be
distributed or paid to any partner, shareholder or, if Borrower
is a trust, to any beneficiary or trustee, unless all such costs
and expenses which are then due have been paid in full.
IV. Hazardous Substances.
Notwithstanding any provision in the Deed of Trust or any
other Loan Document, the provisions of this Article IV shall not
be secured by the Deed of Trust and shall survive termination of
this Loan Agreement, repayment of the Loan, and foreclosure of
the Deed of Trust or similar proceedings.
4.1 Definition of Hazardous Substance.
For purposes of this Loan Agreement, a "Hazardous
Substance" is defined to mean any substance, material or waste,
including asbestos and petroleum (including crude oil or any
fraction thereof), which is or becomes designated, classified or
regulated as "toxic," "hazardous," a "pollutant" or similar
designation under any federal, state or local law, regulation or
ordinance.
4.2 Indemnity Regarding Hazardous Substances.
Borrower agrees to indemnify, defend with counsel
acceptable to Bank, and hold Bank, its parent and affiliated
companies, and their respective officers, directors, employees
and agents, harmless from and against all actual or threatened
liabilities, claims, actions, damages (including foreseeable and
enforceable consequential damages), penalties, costs, expenses
(including attorney's fees) and losses directly or indirectly
arising out of or resulting from the presence of any Hazardous
Substance in or around any part of the
Property or in the soil or groundwater under the Property,
including (1) any expenses incurred in connection with any
investigation of site conditions or any clean-up, remedial,
removal or restoration work, and (2) any resulting damages or
injuries to the person or property of any third parties or to any
natural resources. In addition, Borrower shall similarly
indemnify, defend and hold harmless any persons purchasing the
Property through a foreclosure sale or following a foreclosure
sale, and any persons purchasing the Loan or any portion of or
interest in it.
4.3 Representation and Warranty.
Before signing this Loan Agreement, Borrower researched
and inquired into the previous, current and contemplated uses and
ownership of the Property. Based on that due diligence, Borrower
represents and warrants that, to the best of its knowledge, no
Hazardous Substance has been or will be disposed of, released
onto or otherwise exists in, on, or under the Property, except as
Borrower has disclosed to Bank in writing.
4.4 Compliance with Law: Notices.
Borrower has complied, and shall comply and cause all
occupants of the Property to comply, with all laws, regulations
and ordinances governing or applicable to Hazardous Substances as
well as the recommendations of any qualified environmental
engineer or other expert. Borrower shall promptly notify Bank if
it knows or suspects there may be any Hazardous Substance in or
around the Property, or in the soil or groundwater under the
Property, or if any action or investigation by any governmental
agency or third party pertaining to Hazardous Substances is
pending or threatened.
V. Representations and Warranties.
Borrower promises that each representation and warranty set
forth below is true, accurate and correct.
5.1 Formation: Authority.
If Borrower is anything other than a natural person, it
has complied with all laws and regulations concerning its
organization, existence and the transaction of its business, and
is in good standing or existence in each state in which it
conducts its business. Borrower is authorized to execute, deliver
and perform its obligations under each of the Loan Documents.
5.2 No Violation.
Neither Borrower nor the Property is in violation of, nor do
the terms of this Loan Agreement conflict with, any regulation or
ordinance, any order of any court or governmental entity, or any
covenant or agreement affecting Borrower or the Property.
There are no claims, actions, proceedings or investigations
pending or threatened against Borrower or affecting the Property
except for those previously disclosed by Borrower to Bank in writing.
5.3 Financial Information.
All financial information which has been and will be
delivered to Bank, including all information relating to the
financial condition of Borrower, any of its members, partners,
shareholders, or other principals, any Guarantor, and the
Property, does and will fairly and accurately represent the
financial condition being reported on. All such information was
and will be prepared in accordance with generally accepted
accounting principles consistently applied, unless otherwise
noted. As of the date hereof, there has been no material adverse
change in any financial condition reported at any time to Bank.
5.4 Borrower Not a "Foreign Person".
Borrower is not a "foreign person" within the meaning of Section
1445(t)(3) of the Internal Revenue Code of 1986, as amended from
time to time.
5.5 Disclosure to Guarantor.
Before each Guarantor, became obligated in connection with
the Loan, Borrower made full disclosure to that person regarding
Borrower's financial condition and business operations and all
other circumstances bearing upon Borrower's ability to pay and
perform its obligations under the Loan Documents.
VI. Default and Remedies.
6.1 Events of Default.
Borrower will be in default under this Loan Agreement upon the
occurrence of any one or more of the following events ("Event of
Default"):
(a) Borrower fails to make any payment due under the
Note, or fails to make any payment demanded by Bank under any
Loan Document, within fifteen (15) days after the date due or
demand; or
(b) Borrower fails to comply with any covenant contained
in this Loan Agreement other than those referred to in clause
(a), and does not either cure that failure within thirty (30)
days after written notice from Bank, or, if the default cannot be
reasonably cured in thirty days, within a reasonable time; or
(c) Borrower or any Guarantor, or Borrower's managing
general partner if it is a partnership or its majority
shareholder if it is a corporation, becomes insolvent or the
subject of any bankruptcy or other voluntary or involuntary
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),
in or out of court, for the adjustment of debtor-creditor
relationships; or
(d) Borrower or any Guarantor dissolves or liquidates,
or any of these events happens to Borrower's managing general
partner if it is a partnership or to its chief executive or
majority shareholder if it is a corporation, or, if Borrower or
any Guarantor is a trust, the trust is revoked or materially
modified or there is a change or substitution of the trustee; or
(e) Borrower or any Guarantor dies or becomes
permanently disabled, or any of these events happens to
Borrower's or any Guarantor's managing general partner, if it is
a partnership, its chief executive officer, if it is a
corporation, or its trustee, if it is a trust unless within
ninety (90) days of the death or disability, Borrower or
Guarantor provides a substitute borrower or guarantor or
additional collateral, satisfactory to Bank, in Bank's sole
discretion; or
(f) Any representation or warranty made or given in
any of the Loan Documents proves to be false or misleading in any
material respect; or
(g) Any Guarantor revokes its Guaranty or any Guaranty
becomes ineffective for any reason; or
(h) An Event of Default occurs under any of the Loan
Documents; or
(i) Bank fails to have an enforceable first lien on or
security interest in any property given as security to; 0r the
Loan (except as approved by Bank in writing); or
(j) A judgement or judgements are entered against
Borrower or any Guarantor in excess of $100,000.00 which are not
covered by insurance or are not satisfied or bonded within the
time required by law, if the same materially adversely affects
Borrower's or such Guarantor's ability to repay the Loan, or any
governmental authority takes action that materially adversely
affects Borrower's intended use of the Property or Borrower's or
any Guarantor's ability to repay the Loan; or
(k) Borrower, any Guarantor or any person affiliated
with Borrower or any Guarantor fails to meet the conditions of,
or fails to perform any obligation under, any other agreement
Borrower has with Bank or any affiliate of Bank after any
applicable notice and cure period provided therein. For the
purposes of this section, "affiliated with" means in control of,
controlled by or under common control with; or
(I) Borrower defaults in connection with any credit
such person has with any lender, if the default consists of the
failure to make a payment when due or gives the other lender the
right to accelerate the obligation; or
(m) There is a material adverse change in Borrower's
or any Guarantor's financial condition that materially impairs
Borrower's intended use of the Property or Borrower's or any
Guarantor's ability to repay the Loan.
6.2 Remedies.
If an Event of Default occurs under this Loan Agreement,
(a) Bank may exercise any right or remedy which it has
under any of the Loan Documents, or which is otherwise available
at law or in equity or by statute, and all of Bank's rights and
remedies shall be cumulative. All of Borrower's obligations under
the Loan Documents shall become immediately due and payable
without notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor, or other notices or
demands of any kind or character, all at Bank's option,
exercisable in its sole discretion.
(b) Bank shall have the right in its sole discretion
to enter the Property and take possession of it, whether in
person, by agent or by court-appointed receiver, collect rents
and otherwise protect its collateral. If Bank exercises any of
the rights or remedies provided in this clause (b), that exercise
shall not make Bank a partner or joint venture of Borrower. All
sums which are expended by Bank in preserving its collateral
shall be considered an additional loan to Borrower secured by the
Deed of Trust and bearing interest at the default rate provided
in the Note.
VII. Arbitration.
7.1 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 Loan
Agreement 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 Loan
Agreement, 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.
7.2 Real Property Collateral.
Notwithstanding the provisions of Section 7.1, 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 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.
7.3 Provisional Remedies Self-Help and
Foreclosure.
No provision of this Article VII shall limit the right of any party to
this Loan Agreement to exercise self-help remedies such as
setoff, foreclosure against or sale of any real or personal
property collateral or security, or obtaining 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.
VIII. Miscellaneous Provisions.
8.1 No Waiver Consents.
No alleged waiver by Bank shall be effective unless in writing, and no
waiver shall be construed as a continuing waiver. No waiver shall
be implied from any delay or failure by Bank to take action on
account of any default of Borrower. Consent by Bank to any act or
omission by Borrower shall not be construed as a consent to any
other or subsequent act or omission.
8.2 No Third Parties Benefited.
This Loan Agreement is made and entered into for the sole protection
and benefit of Bank and Borrower and their successors and
assigns. No trust fund is created by this Loan Agreement and no
other persons or entities shall have any right of action under
this Loan Agreement or any right to the Loan funds.
8.3 Notices.
All notices given under this Loan Agreement shall be in writing and
shall be effectively served upon delivery, or if mailed, upon
receipt of certified United States mail, postage prepaid, sent to
the party at its address appearing below its signature. Those
addresses may be changed by either party by notice to the other
party.
8.4 Attorneys' Fees.
If any lawsuit, reference or arbitration is commenced which arises out
of, or which relates to this Loan Agreement, the Loan Documents
or the Loan, including any alleged tort action, regardless of
which party commences the action, 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 in the action or proceeding or appeal or review therefrom,
in addition to costs and expenses otherwise allowed by law. In
all other situations, including any bankruptcy or other voluntary
or involuntary proceeding, in or out of court, for the adjustment
of debtor-creditor relationships, Borrower agrees to pay all of
Bank's costs and expenses, including attorneys' fees, which may
be incurred in any effort to collect or enforce the Loan or any
part of it or any term of any Loan Document. From the time(s)
incurred until paid in full to Bank, all sums shall bear interest
at the default rate provided in the Note.
8.5 Heirs. Successors and Assigns.
The terms of this Loan Agreement shall bind and benefit the heirs,
legal representatives, successors and assigns of the parties;
provided, however, that Borrower may not assign this Loan
Agreement without the prior written consent of Bank. Bank shall
have the right to transfer the Loan to any other persons or
entities without the consent of or notice to Borrower. Provided,
however, in the case of an unaffiliated entity, Bank will
undertake its best efforts to provide notification to Borrower.
Without the consent of or notice to Borrower, Bank may disclose
to any prospective purchaser of any securities issued by Bank,
and to any prospective or actual purchaser of any interest in the
Loan or any other loans made by Bank to Borrower, any financial
or other information relating to Borrower, the Loan or the
Property.
8.6 Interpretation.
The language of this Loan Agreement shall be construed as a whole
according to its fair meaning, and not strictly for or against
any party. The word "include(s)" means "include(s), without
limitation," and the word "including" means "including, but not
limited to." Whenever Borrower is obligated to pay or reimburse
Bank for any attorneys' fees, those fees shall include the
allocated costs for services of in-house counsel. This Loan
Agreement is the result of substantial negotiations between
Borrower and Bank and shall be construed in accordance with the
fair intent and meaning of the language contained in this Loan
Agreement in its entirety and not for or against either party,
regardless of which party (or its legal counsel) was responsible
for its preparation. Borrower and Bank each represent to the
other that each has consulted with its own legal counsel in
connection with Loan Agreement.
8.7 Miscellaneous.
This Loan Agreement may not be modified or amended except by
a written agreement signed by the parties. The invalidity or
unenforceability of any one or more provisions of this Loan
Agreement shall in no way affect any other provision. If Borrower
consists of more than one person or entity, each shall be jointly
and severally liable to Bank for the faithful performance of this
Loan Agreement and the other Loan Documents. If Borrower consists
of or is comprised of more than one person or entity, any
reference to Borrower shall refer to each person or entity
comprising Borrower. Time is of the essence in the performance of
this Loan Agreement and the other Loan Documents. This Loan
Agreement shall be governed by Oregon law.
8.8 Inte ration and Relation to Loan Commitment.
The Loan Documents fully state all of the terms and
conditions of the parties' agreement regarding the matters
mentioned in or incidental to this Loan Agreement. The Loan
Documents supersede all oral negotiations and prior writings
concerning the subject matter of the Loan Documents, including
any loan commitment issued to Borrower.
8.9 Relationships with Other Bank Customers.
From time to time, Bank may have business relationships with
Borrower's customers, suppliers, contractors, tenants, partners,
shareholders, officers or directors, with businesses offering
products or services similar to those of Borrower, or with
persons seeking to invest in, borrow from or lend to Borrower.
Borrower agrees that in no event shall Bank be obligated to
disclose to Borrower any information concerning any other Bank
customer. Borrower further agrees that Bank may extend credit to
those parties and may take any action it may deem necessary to
collect any such credit, regardless of any effect the extension
or collection of such credit may have on Borrower's financial
condition or operations.
8.10 Limitation on Recourse. This Loan Agreement is executed
in connection with a term loan made by the Bank to the Borrower.
Notwithstanding any other provisions of the Loan Agreement to the
contrary, neither Historic Preservation Properties 1989 Limited
Partnership, a Delaware limited partnership ("HPP"), which is one
of the Borrower's two general partners, nor HPP's general
partners shall have any personal liability for the payment of the
loan secured by the Deed of Trust or any liability for the
performance of the Borrower's obligations and the Bank's sole
remedy in the case of HPP shall be to proceed against HPP's
interest in the property and improvements or any proceeds
thereof. The preceding sentence shall not preclude the Bank from
enforcing the Bank's rights against the property and improvements
and against other parties liable for the payment of the loan
secured by a Deed of Trust, nor shall it preclude the Bank from
joining HPP or its general partners in any proceeding to
foreclose the Bank's Deed of Trust, security interest and other
liens securing the Borrower's obligations pursuant to such loan.
8.11 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:
Borrower 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, Borrower 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.
PORTLAND LOFTS ASSOCIATES LIMITED PARTNERSHIP,
a Delaware Limited partnership
BY: East Angel Joint Venture, an Oregon joint
venture, General Partne
By: Xxxxxx X. Xxxxx
BY: Pacific Star Corporation, an Oregon corporation
BY: Xxxxxx X.Xxxxx
President
BY: Historic Preservation Properties 1989 Limited
Partnership, a Delaware Limited partnership, General
Partner
By: Boston Historic Partners Limited Partnership,
a Massachusetts limited partnership, General
Partner
By: Portfolio Advisory Services, Inc., a
Massachusetts corporation, General Partner
By: Xxxxxxxx X. Sulllivan
President
By: Xxxxxxxx X. Xxxxxxxx
General Partner
8.12 Statutory Notice.
"UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND
COMMITMENTS MADE BY US AFTER OCTOBER 3,1989 CONCERNING LOANS
OR OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY
OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE
SIGNED BY US TO BE ENFORCEABLE".
WARNING
Unless you provide us with evidence of the insurance
coverage as required by our contract or loan agreement, we
may purchase insurance at your expense to protect our
interest. This insurance may, hut need not, also protect
your interest. If the collateral becomes damaged, the
coverage we purchase may not pay any claim you make or any
claim made against you. You may later cancel this coverage
by providing evidence that you have obtained property
coverage elsewhere.
You are responsible for the cost of any insurance
purchased by us. The cost of this insurance may be added to
your contract or loan balance. If the cost is added to you
contract or loan balance, the interest rate on the
underlying contract or loan will apply to this added amount.
The effective date or coverage may be the date your prior
coverage lapsed or the date you failed to provide proof of
coverage.
The coverage we purchase may be considerably more
expensive than insurance you can obtain on your own and may
not satisfy any need for property damage coverage or any
mandatory liability insurance requirements imposed by
applicable law.
BORROWER: PORTLAND LOFTS ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited partnership
BY: East Bank Angel Joint Venture, an Oregon
joint venture, General Partner
By: Xxxxxx X. Xxxxx
By: Pacific Star Corporation, an Oregon
corporation
By: Xxxxxx X. Xxxxx
President
BY: Historic Preservation Properties 1989
Limited Partnership, a Delaware limited
partnership, General Partner
By: Boston Historic Partners Limited Partnership,
a Massachusetts limited partnership,
General Partner
By: Portfolio Advisory Services, Inc.,
a Massachusetts corporation,
General Partner
By: Xxxxxxxx X. Xxxxxxxx
Title: President
By: Xxxxxxxx X. Sulllivan
General Partner
Adress: Portland Lofts Associates L. P.
c/o Restaurant Management Northwest, Inc.
0000 X.X. Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx, 00000
Copy to: Mr. Xxxxx Xxxxxxx
Ball, Janick & Xxxxxx
101 S.W. Main Street, Suite 1100
Xxxxxxxx, Xxxxxx 00000
BANK OF AMERICA OREGON,
an Oregon state chartered commercial bank
By: Xxx Xxxxx, Vice President
ADDRESS: BANK OF AMERICA OREGON
Loan Administration No.2098
X.X. Xxx 0000
Xxxxxxxx, Xxxxxx 00000
