HomeMy WebLinkAboutItem A: Beam Development Purchase and Sale Agreement Terms
EURA
UGENE RBAN ENEWAL GENCY
AIS
GENDA TEM UMMARY
Work Session: Beam Development Purchase and Sale Agreement Terms
Meeting Date: May 21, 2008 Agenda Item Number: A
Department: Planning and Development Staff Contact: Mike Sullivan
www.eugene-or.gov Contact Telephone Number: 682-5448
ISSUE STATEMENT
The Urban Renewal Agency Board (URA) provided direction to pursue a development agreement for
the downtown Beam Development project. The URA is being asked to review and act on terms to be
included in a purchase and sale agreement between the URA and Beam Development.
BACKGROUND
On December 10, 2007, the URA provided direction to pursue a development agreement for the Beam
Development project and to proceed with acquisition or assignment of the purchase options on the
Washburne Building, Centre Court building and adjacent lot, within the financial constraints of the
current $33 million urban renewal district spending limit. On March 10, 2008, the council approved the
supplemental budget action necessary to move forward with the purchase of the Centre Court building
and adjacent lot and the Washburne Building.
On March 24, 2008 (the purchase option expiration date), the Agency provided exercise notice of intent
to purchase the Centre Court and Washburne Building properties. Consistent with the terms of the
purchase option agreements, the URA paid a deposit equal to 10% of the purchase prices ($470,000).
On April 16, 2008, the URA considered next steps related to the scheduled end to the due diligence
period (May 8). The URA provided direction to “1) work with Beam and the property owner to extend
the timeline for the purchase option agreements on the Centre Court building and adjacent lot, and the
Washburne Building, 2) work towards an assignment of the purchase options to Beam, and 3) continue
to work with Beam on elements of acquisition and redevelopment financing consistent with the amounts
and terms outlined in this agenda item. If an extension of the option agreement timeline is not approved
prior to May 7, then the Agency Director shall inform the property owners and the escrow agent that the
URA will not be acquiring the property and the deposit should be returned. If a satisfactory extension is
approved, the Agency Director shall bring back terms to be included in the assignment of the purchase
options to Beam as soon as practicable.” In the discussion, the URA clarified that Beam would be
responsible for providing any needed extension money payments.
On May 7, 2008, the Agency and the property owner signed an amended purchase option agreement
which provided for the extension of the due diligence period to May 23, 2008 and a reduction of the
combined purchase prices from $4.7 million to $3.6 million. In consideration for these considerations,
Beam is set to provide $50,000 in additional deposit money no later than May 23. The required 10%
Y:\CMO\2008 Council Agendas\M080521\S080521A.doc
deposit and the additional $50,000 deposit from Beam will become non-refundable after May 23. Prior
to May 23, the URA and Beam will sign a binding PSA.
On May 14, 2008, the URA received an overview of the potential terms to be included in the agreement
with Beam. At that meeting, the following key points for the Beam Development project were
highlighted:
·Revitalization of this prime downtown corner is a significant step to provide momentum for other
downtown redevelopment.
·Redevelopment of the downtown core is a longstanding City Council and community goal.
·The City is moving the project forward in a financially responsible manner given our limited public
resources.
·The proposal structures public financial participation to minimize risk and maximize results.
·The current property owner, Connor-Wooley, has extended the due diligence period to May 23,
when the Purchase and Sale Agreement will be signed.
·The current owner has reduced the purchase price by $1.1 million.
·Beam will pay the additional $50,000 deposit for the extension.
·A top priority is to assist Beam in their work to secure private tenants that will provide maximum
benefit toward downtown revitalization goals.
·The demonstrated commitment of all parties to the project is encouraging and is critical to its
success.
Due to considerations for the use of federal Department of Housing and Urban Development (HUD)
Section 108 Loan Guarantee and Brownfield Economic Development Initiative (BEDI) grant funds,
staff has determined that it is in the best interest of the Agency to purchase the properties and sell them
to Beam rather than to assign the purchase options to Beam. The properties will subsequently be
conveyed to Beam in a simultaneous closing of escrow.
The URA and Beam have negotiated terms to be included in the PSA. On May 19, 2008, a public
hearing will provide an opportunity for comments on the terms to be included in the PSA. A summary
of the terms is included in Attachment A. An overview of the project is included in Attachment B. The
complete Purchase and Sale Agreement document is included in Attachment C (delivered under separate
cover).
RELATED CITY POLICIES
The proposed redevelopment along West Broadway is consistent with the policies and implementation
strategies included in the Downtown Plan, including:
·Downtown development shall support the urban qualities of density, vitality, livability and diversity
to create a downtown, urban environment.
·Actively pursue public/private development opportunities to achieve the vision for an active, vital,
growing downtown.
·Use downtown development tools and incentives to encourage development that provides character
and density downtown.
·Promote multi-story, mixed-use structures downtown through financial incentives or code
amendments.
Y:\CMO\2008 Council Agendas\M080521\S080521A.doc
·Stimulate multi-unit housing in the downtown core and on the edges of downtown for a variety of
income levels and ownership opportunities.
·Provide and promote development and community events that reinforce downtown’s role as the
cultural center for the city and region.
·Reinforce the creative, distinctive culture of downtown as the arts and entertainment center of the
city.
In addition, future development along West Broadway is responsive to the following Growth
Management policies:
Policy 1: Support the existing Eugene Urban Growth Boundary by taking actions to increase density
and use existing vacant and under-used land within the boundary more efficiently.
Policy 2: Encourage in-fill, mixed-use, redevelopment, and higher density development.
Policy 3: Encourage a mix of business and residential uses downtown using incentives and zoning.
Policy 10: Encourage the creation of transportation-efficient land use patterns and implementation
of nodal development concepts.
Policy 14: Development shall be required to pay the full cost of extending infrastructure and
services, except that the City will examine ways to subsidize the costs of providing
infrastructure or offer other incentives that support higher-density infill, mixed use, and
redevelopment.
–
This item is also related to the 2007-2008 Council Goal: Downtown InitiativeFacilitate significant
revitalization of downtown core.
AGENCY OPTIONS
1. Authorize the Agency Director to sign a PSA with Beam Development consistent with the terms
included in Attachment A.
2. Direct the Agency Director to disengage from the purchase process prior to the May 23 due
diligence period expiration.
AGENCY DIRECTOR’S RECOMMENDATION
The Agency Director recommends that a purchase and sale agreement be signed between the URA and
Beam Development consistent with the terms provided in Attachment A.
SUGGESTED MOTION
Move to authorize the Agency Director to sign a purchase and sale agreement between the URA and
Beam Development consistent with the terms provided in Attachment A.
ATTACHMENTS
A. Summary of Terms - Purchase and Sale Agreement
B. Project Overview
C. Purchase and Sale Agreement (under separate cover)
Y:\CMO\2008 Council Agendas\M080521\S080521A.doc
FOR MORE INFORMATION
Staff Contact: Mike Sullivan
Telephone: 682-5448
Staff E-Mail: mike.c.sulivan@ci.eugene.or.us
Y:\CMO\2008 Council Agendas\M080521\S080521A.doc
ATTACHMENT A
Summary of Terms - Purchase and Sale Agreement (PSA)
1. PSA Signing Date: Beam will sign a binding PSA no later than May 22, 2008.
2. Deposit: Upon the signing of the PSA, Beam will provide a non-refundable deposit equal to $50,000
and a secured obligation to pay the URA $470,000, if the purchase is not completed by July 7, 2008.
3. Price: Beam shall purchase the Washburne Building for $1.2 million, and the Centre Court building
and adjacent vacant lot for $2.4 million.
4. Closing: The URA shall purchase the property on or before July 7, 2008. Beam shall purchase the
property from the URA immediately thereafter in a simultaneous closing of escrow.
5. City Occupancy: Beam has engaged with a local broker to secure an anchor tenant(s). Should Beam
be unable to sufficiently pre-lease the project, the City will be prepared to be a tenant for a portion of the
project. It is not the City’s or Beam’s intention to have the City tenant the project. However, the PSA
includes language indicating the City commitment to provide back-up tenanting. The PSA also details
the documentation that Beam will be required to provide to demonstrate its good faith and best efforts to
secure private tenants. Additionally, Beam will be required to provide in the City lease any incentives
agreed upon with other tenants.
6. URA Loan #1: The URA shall finance Beam’s purchase of the properties in an amount equal to the
purchase prices of $3.6 million (less Beam’s $50,000). The financing terms will include a maximum
20-year amortization schedule (interest-only during construction) with a 10-year balloon payment and an
interest rate equal to the rate paid on the City’s HUD Section 108 loan.
7. URA Loan #2: The URA shall provide gap financing for Beam’s renovation of the Centre Court
building and new construction on the vacant parcel in an amount not to exceed $6.5 million. The
financing terms would include a 20-year amortization schedule (interest-only during construction) with a
10-year balloon payment and an interest rate equal to the rate paid on the City’s HUD Section 108 loan.
The URA is unable to commit to Loan #2 until City Council and HUD have approved the project-
specific use of the borrowed HUD Section 108 funds. (The approval process takes approximately two
and a half months.) If HUD approval is not granted and other sources of funds are not identified, the
City will buy back the property.
8. Contingent Repayment of BEDI Proceeds: The portions of Loan #1 and Loan #2 derived from BEDI
grant proceeds will be repaid when Beam reaches a 13% return on investment. The portions of Loan #1
and Loan #2 derived from BEDI grant proceeds will not accrue interest. Repayment of Beam’s deferred
developer fee will only occur after the BEDI has been repaid.
9. Project Description: The PSA shall include a commitment from Beam to move forward with a
project consistent with their proposal, including rehabilitation of the Centre Court building and a newly
Y:\CMO\2008 Council Agendas\M080521\S080521A.doc
constructed building of approximately 75,000 square feet on the adjacent vacant lot. The Centre Court
building will be designed for retail, office, and sub-surface parking consistent with the design elevations
submitted in Beam’s February 2007 RFQ response. The adjacent building will also be designed for
retail, office, and sub-surface parking.
10. Project Timing: Beam shall commence construction and complete the project within a time period
specified in the agreement.
11. Reversionary Clauses: In the event that Beam does not meet the construction and completion
timeline included in the PSA, the URA would have the right to re-purchase the property.
Y:\CMO\2008 Council Agendas\M080521\S080521A.doc
ATTACHMENT B
Project Overview
Beam has estimated a total project cost of approximately $38 million, including property acquisition,
renovation of the Centre Court building, and construction of a new building on the vacant parcel. Beam
will likely defer improvements to the Washburne Building until after the Centre Court renovation and
new construction on the adjacent lot are completed.
The URA’s financial participation in the project would be limited to approximately $10 million in
financing provided to Beam for acquisition of property and renovation/construction, plus transaction
costs and funding of a debt service reserve account for the HUD Section 108 loan. The Beam financing
would be structured as interest bearing, secured loans that would be repaid from income derived from
the completed project. The proposed source of funding includes proceeds from the HUD Section 108
loan ($8 million) and the BEDI grant ($2 million). The HUD Section 108 program includes stringent
loan underwriting criteria that will require the project to include adequate collateral and debt service
coverage. The project would also have to meet a HUD national objective (elimination of slums and
blight or job creation).
On July 23, 2007, City Council approved the use of HUD Section 108 and BEDI funds for acquisition of
the properties. This action was preceded by a July 16 public hearing at council. The proposed
construction loan (URA Loan #2) would require a separate HUD application request including a public
hearing and council resolution prior to HUD review and approval.
The following are summaries of sources and uses for the acquisition of property and renovation/
construction:
Property Acquisition
SOURCES USES
HUD Section 108 Loan $ 2,510,000 Acquire Centre Court Property $ 2,400,000
BEDI Grant 636,000 Acquire Washburne Bldg 1,200,000
Downtown Loan Program 454,000
Total Sources $ 3,600,000 Total Uses $ 3,600,000
Project Construction
SOURCES USES
HUD Section 108 Loan $ 5,187,000 Renovation of Centre Court Bldg $ 16,700,000
BEDI Grant Loan 1,313,000 New Construction 16,300,000
Bank Loan 15,500,000
Beam Equity 4,000,000
Historic Tax Credit Equity 2,000,000
New Mkt Tax Credit Equity 5,000,000
Total Sources $33,000,000 Total Uses $ 33,000,000
Y:\CMO\2008 Council Agendas\M080521\S080521A.doc
ATTACHMENT C
DRAFT
PURCHASE AND SALE AGREEMENT
P:URACE
,
ARTIESRBAN ENEWAL GENCY OF THE ITY OF UGENE
(“Agency” “Seller”)
an Oregon municipal corporation or
A:BC&M,LLC,
NDEAM ONSTRUCTION ANAGEMENT
an Oregon limited liability company,
(“Beam” “Buyer”)
doing business as Beam Development or
E
FFECTIVE
D:
May 8, 2008
ATE
R
ECITALS
A.
On October 26, 2006, Agency obtained from Evergreen Associates and from
Prado Partners Ltd. and Blue Ridge, Inc. options to acquire certain real property
more particularly described in Exhibit A (the “Property”).
B.
After acquiring the options to purchase the Property, Agency outlined its interest
in making the Property available for redevelopment by issuing a request for
proposals (“RFP”). Within the RFP, Agency stressed its goal to attract one or
more developers or owners to rehabilitate and redevelop the Property in order to
facilitate private investment, while enhancing and reinforcing community goals
and objectives for improving the function, condition and appearance of the area.
Such goals and objectives include creating high-quality urban design and
architecture; increased density with active ground-floor uses; expanded housing,
cultural and recreational opportunities; compatibility with existing and planned
future public and private investments in the area; quality jobs; better connectivity
between downtown and the river; and increased activity and vitality along
Broadway.
C.
Beam responded to the RFP by indicating, among other things, its interest in
acquiring and redeveloping the Property for office and retail uses. Agency
selected Beam to acquire and redevelop the Property in accordance with its
proposal.
D.
Beam and Agency entered into a non-binding memorandum of understanding (the
“MOU”), acknowledging the key elements of Beam’s proposal and the parties’
mutual desire to negotiate the terms and conditions of an agreement relating to
Beam’s acquisition and rehabilitation of the Property.
Page 1 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
E.
Due to a number of circumstances beyond the control of Agency or Beam, the
negotiations related to Beam’s acquisition and redevelopment of the Property
continued beyond the date set forth in the MOU.
F.
Pursuant to the option agreements, Agency has exercised its right to purchase the
Property. The option agreements require Agency to have made nonrefundable
deposits totaling Five Hundred Twenty Thousand Dollars ($520,000) by May 23,
2008 and to acquire the Property by July 7, 2008.
G.
As of the Effective Date, Beam executed and delivered this Agreement. But for
the parties entering into this Agreement, Agency would have terminated its rights
to buy the Property prior to May 23, 2008, thereby entitling Agency to a return of
the majority of the Agency’s option payments.
H.
Beam’s execution of this Agreement and the completion of the Project according
to the terms of this Agreement are material inducements to Agency’s acquisition
of the Property and funding of the Loans.
A
GREEMENT
1. D.
Unless proper nouns or otherwise defined herein, capitalized terms used in
EFINITIONS
this Agreement will have following meanings:
“AL”
1.1 means, collectively, the loans in the aggregate principal
CQUISITION OAN
amount of Three Million Five Hundred Fifty Thousand Dollars ($3,550,000) made by
Agency to Beam pursuant to the Loan Documents and to be used by Beam to acquire the
Property and repay the Earnest Money Loan. The terms of the Acquisition Loan are set
Exhibit E-1
forth in .
“AN”
1.2 means the promissory notes made by Beam in favor of
CQUISITION OTES
Agency evidencing the Acquisition Loan.
“BEDI”
1.3 means the Brownfields Economic Development Initiative, a grant
program of the US Department of Housing and Urban Development.
“B’CC”
1.4 means one-half (1/2) of the Escrow Agent’s fees and
UYERS LOSING OSTS
costs of Closing plus all other taxes and payments which Buyer is to make at Closing as
described in this Agreement.
“CCB”
1.5 means the building located on the Centre
ENTRE OURT UILDING
Court/Vacant Lot Property, generally consisting of approximately 74,000 square feet in
five (5) above grade and one (1) below grade floors.
“CC/VLCL”
1.6 means the loans of up to
ENTRE OURTACANT OT ONSTRUCTION OAN
Six Million Five Hundred Thousand Dollars ($6,500,000) that may be made by City or
Agency to Beam, depending upon the availability of funds from HUD under its Section
108 Loan Guarantee and BEDI grant programs, and applied by Beam toward the
Page 2 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
redevelopment of the Centre Court/Vacant Lot Property pursuant to this Agreement. The
Exhibit E-2
terms of the Centre Court/Vacant Lot Construction Loan are set forth in .
“CC/VLP”
1.7 means certain real property, located
ENTRE OURTACANT OT ROPERTY
Exhibit A-1
within the City of Eugene, more particularly described in .
“C”
1.8 means the City of Eugene, Oregon.
ITY
“CL”
1.9means a “gross” lease between Beam, as lessor, and City, as
ITY EASE
lessee, under which, subject to certain conditions set forth in a separate written
agreement between the City and Beam, City will lease a certain amount of space in
the Newly Constructed Building. The conditions are included in Section 6.1 and the
Exhibit F
material terms of the City Lease are set forth in .
“C”
1.10 means the conveyance of the Property to Beam by Agency by
LOSING
Deed.
“CD”
1.11 means the date on which Agency conveys the Property to
LOSING ATE
Beam and disburses the Loans proceeds to Beam. The Closing Date shall occur no
later than July 7, 2008.
“C”
1.12 means the Eugene Code, 1971, effective as of June 16, 1971 as a result
ODE
of adoption of Ordinance No. 16226.
“CC”
1.13 means the date upon which Buyer has
OMMENCEMENT OF ONSTRUCTION
(i) obtained building permits from the City, (ii) obtained construction financing, in an
amount sufficient to complete redevelopment of the Project in accordance with this
Agreement, on terms acceptable to Beam AND (iii) issued a notice to proceed to the
general construction contractor for the Project pursuant to a binding contract for
construction.
CP”
1.14 “ mean elevations and other plans and information showing
ONCEPTUAL LANS
or demonstrating certain design elements, describing the uses and generally defining the
size and scope of the Project improvements.
CPS”
1.15 “ means the final plans and
ONSTRUCTION LANS AND PECIFICATIONS
specifications for the construction of the Newly Constructed Building and the
rehabilitation of the Centre Court Building.
“D”
1.16 means, collectively, bargain and sale deeds for the Centre Court/Vacant
EED
Lot Property and the Washburne Property duly executed and acknowledged by Seller,
conveying good and marketable fee simple title to Buyer subject to Seller’s right of re-
Exhibit B
entry and the Permitted Exceptions, if any, substantially in the form of .
“DD”
1.17 shall mean site and engineering plans, elevations and
ESIGN RAWINGS
typical cross sections identifying the Project buildings and other elements, including
Page 3 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
utilities, landscaping and parking, which drawings shall be consistent with the
Conceptual Plans approved by Agency, comply with all applicable laws, including the
Code and the Plan and demonstrate, to Agency’s satisfaction, that Beam will rehabilitate
the historical features and elements of the existing Centre Court Building and meet
Agency’s LEED Requirements.
“DDIP”
1.18 means the time during which Buyer
UE ILIGENCE NVESTIGATION ERIOD
has the right to conduct an investigation of the Property pursuant to Section ___. The
Due Diligence Investigation Period shall formally commence on the Effective Date and
expire at 5:00 PM on May 22, 2008.
“EM”
1.19 means a down-payment on the Purchase Price in the amount
ARNEST ONEY
of Five Hundred Twenty Thousand Dollars ($520,000), consisting of Fifty Thousand
Dollars ($50,000) in cash and the Earnest Money Loan.
“EML”
1.21 means the loan from Agency to Beam in the principal
ARNEST ONEY OAN
amount of Four Hundred Seventy Thousand Dollars ($470,000), evidenced by a
promissory note executed by Buyer payable to the order of Seller in the form attached
Exhibit E-3
hereto as . Repayment of the Earnest Money note shall be secured by a deed
of trust on the Portland Property.
“ED”
1.22 means the date shown above or if no date is shown above,
FFECTIVE ATE
the first date upon which this Agreement has been executed by both parties.
“EA”
1.23 means Cascade Title Company, located at 811 Willamette
SCROW GENT
Street, Eugene, Oregon.
“EIQCD”
1.24 means the escrow
SCROW NSTRUCTIONS FOR UIT LAIM EED
Exhibit C
instructions in , which apply to Agency’s right of re-entry.
“E”“E”
1.25 means the following attachments to this Agreement,
or
XHIBIT XHIBITS
each of which is incorporated by reference:
Exhibit A-1: Legal Description of the Centre Court/Vacant Lot Property
Exhibit A-2: Legal Description of the Washburne Property
Exhibit B: Bargain and Sale Deed
Exhibit C: Escrow Instructions for the Quit Claim Deed
Exhibit D: Quit Claim Deed
Exhibit E-1: Term Sheet for the Acquisition Loan
Exhibit E-2: Term Sheet for the Centre Court/Vacant Lot Construction Loan
Exhibit E-3: Earnest Money Loan Note and Trust Deed (including Legal
Description of the Portland Property)
Exhibit F: City Lease Term Sheet
Exhibit G: Project Pro Forma
Exhibit H: Project Schedule
“HUD”
1.26 means the US Department of Housing and Urban Development.
Page 4 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
“LEED R”
1.27 means the Leadership in Energy and Environmental
EQUIREMENTS
Design and all other green building standards required by Agency to be obtained or
incorporated by Beam for and into the Project.
“L”
1.28 means, collectively, the Earnest Money Loan, the Acquisition Loan and
OANS
the Centre Court/Vacant Lot Construction Loan.
“LD”
1.29 means the promissory note(s), loan agreement(s), trust
OAN OCUMENTS
deed(s), financing statement(s) and other documents issued by Agency or City and
executed by the Parties or delivered in connection with the Loans.
“M”
1.30 means a mortgage or deed of trust against the Property, or any
ORTGAGE
portion thereof, recorded in the real property records of Lane County, Oregon.
“M”
1.31 means the holder of any Mortgage encumbering the Property, or
ORTGAGEE
any portion thereof, together with any successor or assignee of such holder.
“NCB”
1.32 means the new building to be constructed on
EWLY ONSTRUCTED UILDING
the Centre Court/Vacant Lot Property, generally consisting of five (5) above-grade floors
and one (1) below grade floor of underground parking, and mirroring, in height and size,
the Centre Court Building.
“NT”
1.33 has the meaning set forth in Section 14.1.1.
OTICE OF ERMINATION
“PE”
1.34 means standard exceptions to title under a
ERMITTED NCUMBRANCES
standard title policy, including encumbrances for taxes and assessments not yet due and
payable, and those other liens, encumbrances and exceptions to title shown on the Title
Report and not objected to by Buyer within the time and in the manner described in
Section 5.
“P”
1.35 means the Urban Renewal Plan for the Downtown Urban Renewal
LAN
District, adopted by the Eugene City Council during July 1968, and amended thereafter
from time to time.
“PP”
1.36 means that certain real property, located within the City
ORTLAND ROPERTY
Exhibit E-3
of Portland, more particularly described in .
“P”
1.37 means Beam’s acquisition of the Property and redevelopment of the
ROJECT
Centre Court/Vacant Lot Property. Beam’s redevelopment of the Centre Court/Vacant
Lot Property includes the construction of the Newly Constructed Building, the
rehabilitation of the existing Centre Court Building and all other improvements made to
the Centre Court/Vacant Lot Property. The Newly Constructed Building will be designed
for retail ground floor use, with office space on the remaining four (4) floors. The
existing Centre Court Building will be designed for retail space on the ground floor and
office space on the remaining four (4) floors. The buildings will share an elevator and
Page 5 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
lobby areas on each floor via a newly constructed tower located between them and will
also have shared use of underground parking. Together, the Newly Constructed Building
and the Centre Court Building shall consist of approximately 120,000 square feet of retail
and office space and a total of Fifty-Six (56) subsurface, shared parking spaces.
“PC”
1.38 means the last date upon which the City has issued
ROJECT OMPLETION
certificates of occupancy for both the Centre Court Building and the Newly Constructed
Building.
“PP”
1.39 means the budget for the Project which shows and
ROJECT ROFORMA
includes a total project cost, both hard and soft costs (such as design and construction
costs, developer fees, etc,.), sources (including the Centre Court/Vacant Lot Construction
Loan) and uses of funds that will be obtained and allocated by Buyer toward the
acquisition and redevelopment of the Property and the maximum amount of Centre
Court/Vacant Lot Construction Loan funds Buyer needs from Agency. The Project Pro
Forma, which may be revised from time to time (provided, however, that the amount of
the Centre Court/Vacant Lot Construction Loan and the total Project cost shall not be
Exhibit G
increased without Agency’s prior consent), is attached hereto as .
“PS”
1.40 means the timeline and milestones associated with
ROJECT CHEDULE
Beam’s acquisition and redevelopment of the Property, including a date by which Buyer
shall commence construction of the Project. The Project Schedule, which is set forth in
Exhibit H
, also describes the time during which Beam’s job creation and retention
activities will be carried out. The Project Schedule may be revised from time to time.
“P”
1.41 means, collectively, the Centre Court/Vacant Lot Property and the
ROPERTY
Washburne Property.
“PP”
1.42 means Three Million Six Hundred Thousand Dollars
URCHASE RICE
($3,600,000), the total purchase price paid by Beam for the Property pursuant to this
Agreement.
“QCD”Exhibit
1.43 means the quit claim deed or deeds in the form of
UIT LAIM EED
D
, which shall be recorded if Agency reacquires the Property through its right of re-entry.
“S108LGP”
1.44 means a source of financing
ECTION OAN UARANTEE ROGRAM
provided by HUD to local governments for economic development, housing
rehabilitation, public facilities and large scale development projects.
“S’CC”
1.45 means one-half (1/2) of the Escrow Agent’s fees
ELLERS LOSING OSTS
and costs of Closing, plus all payments which Seller is to make at Closing as described in
this Agreement.
“SL”
1.46 means the holder or holders of the Senior Loan.
ENIOR ENDER
Page 6 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
“SL”
1.47 means the construction loan financing for the Project, and any
ENIOR OAN
refinancing thereof, which, in each instance, shall be subject to the prior approval of
Agency in its reasonable discretion.
“T”
1.48 shall have the meaning set forth in Section 17.
AKING
“TP”
1.49 shall have the meaning set forth in Section 7.
ITLE OLICY
“TR”
1.50 means the preliminary title reports for the Centre Court/Vacant
ITLE EPORT
Lot Property and the Washburne Property, dated as of February 19, 2008 and February
16, 2008, respectively, issued by the Escrow Agent as required by this Agreement and
showing the condition of title to the Property, together with copies of all exceptions listed
therein.
“TD”
1.51 means the deed of trust encumbering the Property and the
RUST EED
Portland Property executed in favor of Agency and securing, from time to time, the
Loans.
“WB”
1.52 means the building located on the Washburne Property
ASHBURNE UILDING
which generally consists of two (2) above grade and one (1) below grade floors, with a
total of approximately 33,261 square feet of commercial space.
“WP”
1.53 means certain real property, located within the City of
ASHBURNE ROPERTY
Exhibit A-2
Eugene, more particularly described in .
2. APS
. On and subject to each of the terms, covenants,
GREEMENT TO URCHASE AND ELL
conditions and other provisions set forth in this Agreement, Buyer agrees to purchase and Seller
agrees to sell the Property for the Purchase Price.
3. PPP.
Buyer shall pay Seller the Purchase Price, as follows:
AYMENT OF URCHASE RICE
D.
3.1 Buyer shall deposit with the Escrow Agent or Seller the Earnest
EPOSIT
Money upon Buyer’s approval of Buyer’s due diligence investigation pursuant to Section
5.
B.
3.2 The balance of the Purchase Price shall be paid at Closing with the
ALANCE
proceeds of the Acquisition Loan.
4. C.
The Closing shall take place at the office of the Escrow Agent on the Closing
LOSING
Date described below.
CD.
4.1 The parties shall select a mutually agreeable date for the Closing
LOSING ATE
Date provided, however, that the Closing Date shall be no sooner than July 1, 2008 nor
later than July 7, 2008.
CM.
4.2
LOSING ECHANICS
Page 7 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
S.
4.2.1 Seller shall deliver or cause to be delivered to Escrow Agent on
ELLER
or prior to the Closing Date the following items, of which the delivery of each shall be a
condition to the performance by Buyer of its obligations under this Agreement:
(i) bargain and sale deeds for the Centre Court/Vacant Lot Property
Exhibit
and the Washburne Property, substantially in the form of
B
, duly executed and acknowledged by Seller, conveying good and
marketable fee simple title subject to Agency’s right of re-entry
and the Permitted Exceptions, if any;
(ii) a FIRPTA affidavit and/or a certificate required under ORS
314.258;
(iii) a certificate in form and substance acceptable to Buyer and its
counsel, duly executed by Seller, evidencing that Seller is exempt
from the withholding requirements of Section 1445 of the Internal
Revenue Code (the “Code”);
(iv) the Title Policy or a binding commitment to issue the Title Policy;
and
(v) the Supplemental Escrow Instructions for the Quit Claim Deed, in
Exhibit C
the form of .
B.
4.2.2 Buyer shall deliver or cause to be delivered to Escrow Agent on
UYER
or prior to the Closing Date the following items, of which the delivery of each shall be a
condition to the performance by Seller of its obligations under this Agreement:
(i) cash in an amount sufficient to pay Buyer’s share of Closing Costs
and prorations;
(ii) executed Loan Documents;
(iii) executed and acknowledged Quit Claim Deed substantially in the
Exhibit D
form of ;
(iv) executed Escrow Instructions for the Quit Claim Deed in the form
Exhibit C
of ;
(v) Articles of Organization, a certificate of good standing from the
Secretary of State of the State of Oregon dated no earlier than ten
(10) days prior to the Closing Date and a resolution or other action
by Buyer authorizing and approving the execution of this
Agreement and the Loan Documents; and
Page 8 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
(vi) pre-leasing logs and, if applicable, amendments to the City Lease.
PT;P.
4.2.3 Seller is exempt from real property
ROPERTY AXES RORATIONS
taxes and assessments. There shall be no pro-ration of real property taxes and
assessments on the date of Closing, and Buyer shall be responsible for any real property
taxes and assessments against the Property as of and after the Closing Date. Seller shall
be responsible for paying utilities and operating expenses relating to the Property through
the Closing Date. Buyer shall be responsible for all such costs and expenses after the
Closing Date.
P.
4.2.4 Escrow Agent shall close escrow as follows:
ROCEDURE
(i) obtain the release of the Property from any liens described in the
Title Report except the Permitted Exceptions;
(ii)obtain fully executed Loan Documents in connection with the
Acquisition Loan, including all documents and instruments
required by the Loan Documents;
(iii) record the Deed;
(iv)record the Acquisition Loan Trust Deed;
(v) retain for recording, as instructed, the fully executed Quit Claim
Deed and the Escrow Instructions for Quit Claim Deed;
(vi) complete the prorations;
(vii) issue and deliver the Title Policy to Buyer; and
(viii) forward to Buyer and Seller, in duplicate, a separate accounting of
all funds received and disbursed for each party and copies of all
executed and recorded or filed documents deposited into Escrow,
with such recording and filing date endorsed thereon.
IEI.
4.2.5 This Agreement and the
NCORPORATION OF SCROW NSTRUCTIONS
Escrow Instructions for the Quit Claim Deed shall serve as escrow instructions, and an
executed copy of this Agreement shall be deposited by Seller with Escrow Agent
following its execution. The parties may execute additional escrow instructions provided
that such additional escrow instructions shall not change or contradict the terms of this
Agreement or the Escrow Instructions for the Quit Claim Deed and provided, further, that
such additional escrow instructions meet with the approval of both of the parties.
5. B’DDI
. During the Due Diligence Investigation
UYERS UE ILIGENCE NVESTIGATION
Period, Buyer shall have the right to inspect the Property, review title and the Acquisition Loan
Page 9 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
Documents and review all other matters pertaining to an investment in the Property and the
Project as Buyer deems advisable.
CP.
5.1 Buyer shall have the right to conduct an
ONDITION OF THE ROPERTY
investigation of the Property. The investigation may include, without limitation and at
Buyer’s sole cost and expense, a physical inspection of the land and all improvements
thereon including, without limitation, soil, geological, environmental, structural,
mechanical, engineering, governmental requirements and matters affecting the Property
such as zoning and other land use restrictions, location and capacity of existing utilities,
building permit and occupancy matters and access; provided, however, Seller’s
withholding of consent shall be deemed reasonable if the then current owner of the
Property does not give consent as provided under the Agency’s options. Buyer shall use
care and consideration in connection with its inspections and tests. Seller and/or the then
current owner of the Property shall have the right to be present during any entry onto the
Property by Buyer or its agents, and Buyer shall provide Seller with not less than two (2)
business days’ prior notice before each such entry onto the Property, which notice may be
given verbally by contacting the following representative of Seller: Denny Braud at
541.682.5536.
T.
5.2 Seller has provided Buyer copies of the Title Report, including the
ITLE
exceptions. Within seven (7) days of the Effective Date, Buyer shall notify Seller, in
writing, of Buyer’s disapproval of any exceptions shown in the Title Report. Any
exception shown in the Title Report and not disapproved by Buyer in writing within such
five-day period will be considered to be a Permitted Encumbrance. Seller will have
seven (7) days from receipt of Buyer’s disapproval of exceptions to either reject Buyer’s
disapproval and terminate this Agreement without liability to Seller or indicate that Seller
is able to remove the disapproved exception. If Seller does not terminate this Agreement
by rejection of Buyer’s disapproval of exceptions, Seller shall provide Buyer, at Closing,
with title to the Property, free of all exceptions other than the Permitted Encumbrances.
PPF;CP;PS.
5.3 As of the
ROJECT RO ORMA ONCEPTUAL LANS ROJECT CHEDULE
Effective Date of this Agreement, Agency has reviewed and approved the Conceptual
Plans submitted by Beam. Buyer shall provide Agency for Agency’s approval, the
Project Pro Forma and the Project Schedule. Subsequent to Agency’s approval, which
shall not be unreasonably withheld, the Project Pro Forma and the Project Schedule shall
Exhibit GExhibit H
be attached to this Agreement as and , respectively.
ALD.
5.4Buyer shall review and agree to the specific
CQUISITION OAN OCUMENTS
Exhibit E-1Exhibit E-2
terms of the Loans, as set forth in and and be prepared to
execute the Loan Documents relating to the Acquisition Loan. Buyer shall provide
evidence of all insurance coverage required by the Loan Documents and shall have
satisfied all conditions precedent to disbursement of the Acquisition Loan as set forth in
this Agreement and the Loan Documents. With respect to the Property, the liens granted
under the Loan Documents shall be superior to all other acquisition funding of Buyer, if
any, and shall be subordinate to any Mortgage securing the Senior Loan on terms
satisfactory to Agency in its reasonable discretion.
Page 10 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
B’P-LE;CL.
5.5 Under separate negotiations,
UYERS REEASING FFORTS ITY EASE
Beam and City shall have either entered into or agreed upon the material terms of a lease.
Exhibit F
The material terms of the City Lease shall be set forth in .
B’ADDD
5.6
UYERS PPROVAL OR ISAPPROVAL OF THE UE ILIGENCE
I;DEM.
Prior to expiration of the Due
NVESTIGATION ELIVERY OF ARNEST ONEY
Diligence Investigation Period, Buyer shall have the right to approve the results of
Buyer’s due diligence investigation by delivering the Earnest Money to the Escrow Agent
or to Seller not later than the expiration of the Due Diligence Investigation Period. In
such event, the Earnest Money shall thereafter be nonrefundable except upon a material
default by Seller. In the event Buyer disapproves any aspect of its due diligence
investigation or fails to deliver the Earnest Money as set forth in this Section 5.6, Buyer
shall be deemed to have disapproved the matters that were subject to review under this
Section 5. Upon Buyer’s disapproval, this Agreement shall terminate and be of no
further effect. If this Agreement is terminated pursuant to this section, each party shall
pay one-half of all title and escrow fees and neither party shall have any further rights
against the other.
6. S’CC
. Seller’s obligation to sell the Property is
ELLERS ONDITIONS TO LOSING
contingent on satisfaction of each of the following conditions prior to Closing:
B’O-GP-LE.
6.1 In accordance with the separate
UYERS NOING REEASING FFORTS
agreement between the City and Beam, Beam shall, in good faith and using its best
efforts, market and obtain commercial leases and lease commitments for all available
space in the Centre Court Building, the Newly Constructed Building and the Washburne
Building. For purposes of this Agreement, “available space” shall mean all of the
commercial space in each of the buildings, including the space in the Newly Constructed
Building that is the subject of the City Lease. Prior to the Effective Date of this
Agreement and supplemented, from time to time, Beam shall produce and provide Seller
with logs and other records that demonstrate Beam’s leasing efforts, including but not
limited to the companies and individuals contacted, the amount of space discussed, lease
rates, term of proposed lease, status of responses and copies of all signed leases and lease
commitments. All leasing efforts by Beam shall be offered at commercially reasonable
levels. Any lease incentives, reduced rental rates and the like agreed upon with other
tenants must also be provided to City and the City Lease shall be amended to incorporate
such incentives into its lease terms. The City and Beam entered into the City Lease or
other separate written arrangements when one of Beam’s prospective anchor tenants
withdrew from negotiations so that Beam could secure construction financing from
Senior Lender and move forward with the acquisition and redevelopment of the Property.
In the event Beam, in using its best efforts to obtain other tenants, is able to fulfill Senior
Lender’s pre-leasing requirements prior to Closing or before Project Completion, Beam
shall allow City, at no cost to the City and pursuant to the City Lease, to opt out of or
reduce the lease rate and/or square footage of the premises described in the City Lease.
Exhibit F
Such changes to the City Lease, if any, shall be reflected in amendments to ;
Page 11 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
DD.
6.2 Beam shall submit to Agency, for Agency’s approval, the
ESIGN RAWINGS
Design Drawings;
UR.
6.3 Beam shall demonstrate that public and private utilities
TILITY ELOCATION
are available to the Property with sufficient capacity to serve the Project and that Beam
has considered the need for utilities installation, connection or upgrade. Agency, at no
cost or expense to Agency, shall cooperate with Beam in Beam’s efforts to obtain
information relating to the availability and capacity of existing utilities;
LEEDR;HR;C
6.4
EQUIREMENTS ISTORICAL EHABILITATION OMPLIANCE WITH
HUDR.
Buyer shall provide Agency information demonstrating, to
EQUIREMENTS
Agency’s satisfaction, Buyer’s intention to redevelop the Property in accordance with the
Agency’s LEED Requirements and in a manner that rehabilitates the historical character
of the Centre Court Building;
ALR.
6.5 Buyer shall have satisfied all conditions
CQUISITION OAN EQUIREMENTS
precedent to the Acquisition Loan;
OD.
6.6 Buyer shall have provided to Agency and
RGANIZATIONAL OCUMENTS
Escrow Agent organizational documents and a certificate of good standing; and
ND.
6.7 Beam shall not be in default under any material term or condition
O EFAULT
of this Agreement, including the completion of each task shown on the Project Schedule
to be completed as of Closing.
7. TI
. Seller shall purchase a standard form ALTA owner’s policy of title
ITLE NSURANCE
insurance in the amount of the Purchase Price, insuring Buyer as the owner of the Property
subject only to the usual printed exceptions and the Permitted Encumbrances (the “Title Policy”).
8. P
. Buyer shall be entitled to possession upon completion of the Closing.
OSSESSION
9. CPC
. Buyer is purchasing the Property in As-Is
ONDITION OF ROPERTY AT LOSING
condition and Buyer’s expectations concerning all aspects of the Property are to be based solely
on the basis of Buyer’s own inspection and investigation of the Property and such records
concerning the Property as Seller has been able to discover and provide to Buyer from within
Seller’s public records. Seller makes no warranty concerning the conditions of the Property or
its suitability for Buyer’s purposes. Without limiting the generality of the foregoing, Seller has
disclosed all information to Buyer which Seller, to the best of Seller’s knowledge, has in its
possession regarding the presence of asbestos and asbestos-containing materials in or on the
Property. Buyer shall assume at Closing all liability for any asbestos or asbestos-containing
materials on the Property.
10. S’R.
Seller has made no representations or warranties to
ELLERS EPRESENTATIONS
Buyer concerning the physical or environmental conditions of the Property or the feasibility of
Buyer’s intended use and redevelopment.
Page 12 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
10.1 Seller has full power and authority to enter into this Agreement. All requisite
action has been taken by Seller in connection with the execution of this Agreement and
the transactions contemplated hereby.
10.2 Seller has not received any uncured notice from any governmental agency having
jurisdiction in the matter of any violation of any statute, law, ordinance, deed restriction
or rules or regulations with respect to the existence of the Property.
10.3 Seller has no actual knowledge of any condemnation, zoning, annexation or other
land use proceeding, either instituted or threatened, which could adversely affect the
Property.
10.4 Each of the representations of Seller contained in this Section shall be deemed
remade by Seller as of the Closing Date, shall survive closing, and shall be fully
enforceable thereafter.
11. B’R
.
UYERS EPRESENTATIONS
11.1 Buyer is a limited liability company duly organized and validly existing under the
laws of the State of Oregon.
11.2 Buyer represents that Buyer has full power and authority to enter into this
Agreement. All requisite action has been taken by Buyer in connection with the
execution of this Agreement and the transactions contemplated hereby.
11.3 Buyer acknowledges that no warranties, guarantees or representations have been
or are being made by Seller or any agent or representative of Seller concerning the
Property. Buyer accepts the Property, “AS IS, WITH ALL FAULTS” without any
representations or warranties by Seller or any agent or representative of Seller, expressed
or implied and releases and indemnifies Seller from any and all liability therefor. Seller
shall not be responsible for any failure to investigate the Property on the part of Buyer or
for any representation or statement regarding the Property (including any representation
or statement by any real estate broker or sales agent, or any other purported or
acknowledged agent, representative, contractor, consultant or employee of Seller, or any
third party).
11.4 Each of the representations of Buyer contained in this Section shall be deemed
remade by Buyer as of the Closing Date, shall survive closing, and shall be fully
enforceable thereafter.
12. B’II;ASISS
UYERS NDEPENDENT NVESTIGATION ALE
I.
12.1 Buyer acknowledges and agrees that it has been given or will be
NVESTIGATION
given during the Due Diligence Investigation Period, a full opportunity to inspect and
investigate each and every aspect of the Property, either independently or through agents
of Buyer’s choosing, including, without limitation:
Page 13 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
12.1.1 All matters relating to title, together with all governmental and other legal
requirements such as taxes, assessments, zoning, use permit requirements and building
codes;
12.1.2 The physical condition and aspects of the Property, including, without
limitation, the square footage of the Property, the structure, seismic aspects of the
Property, the paving, the utilities, if any, and all other physical and functional aspects of
the Property. Such examination of the physical condition of the Property shall include,
but not be limited to, the Buyer’s examination of the presence or absence of Hazardous
Substances. For purposes of this Agreement, “Hazardous Substances” shall mean
inflammable explosives, pollutants, contaminants, radioactive materials, asbestos,
polychlorinated biphenyls, lead, lead-based paint, under and/or above ground tanks,
hazardous materials, hazardous wastes, hazardous substances, oil, or related materials,
which are listed or regulated by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.),
the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901, et seq.),
the Clean Water Act (33 U.S.C. Section 1251, et seq.), the Safe Drinking Water Act (14
U.S.C. Section 1401, et seq.), the Hazardous Materials Transportation Act (49 U.S.C.
Section 5101, et seq.), the Toxic Substance Control Act (15 U.S.C. Section 2601, et seq.),
the Oregon Hazardous Substance Removal and Remedial Action Law, ORS 465.200, et
seq. and any other applicable federal, state or local laws, rules, regulations or
governmental requirements (collectively “Environmental Laws”);
12.1.3 Any easements and/or access rights affecting the Property;
12.1.4 Any lease and any other documents or agreements of significance
affecting the Property; and
12.1.5All other matters of material significance affecting the Property.
A-IA.
12.2 BUYER SPECIFICALLY ACKNOWLEDGES
SS CKNOWLEDGEMENT
AND AGREES THAT SELLER IS SELLING AND BUYER IS PURCHASING THE
PROPERTY ON AN “AS IS WITH ALL FAULTS” BASIS, INCLUDING BUT NOT
LIMITED TO BOTH LATENT AND PATENT DEFECTS, AND THAT BUYER IS
NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND
WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ITS AGENTS, OR
BROKERS AS TO ANY MATTERS CONCERNING THE PROPERTY INCLUDING
WITHOUT LIMITATION: (i) the quality, nature, adequacy and physical condition and
aspects of the Property, including, but not limited to, the structural elements, seismic
aspects of the Property, appurtenances, access, sewage, utility systems, if any, the square
footage of the Property, (ii) the quality, nature, adequacy, and physical condition of soils,
geology and any groundwater, (iii) the existence, quality, nature, adequacy and physical
condition of utilities serving the Property, if any, (iv) the redevelopment potential of the
Property, and the Property’s use, habitability, merchantability, or fitness, suitability,
value or adequacy of the Property for any particular purpose, (v) the zoning or other legal
status of the Property or any other public or private restrictions on use of the Property,
(vi) the compliance of the Property or its operation with any applicable codes, laws,
Page 14 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
regulations, statutes, ordinances, covenants, conditions and restrictions of any
governmental or quasi-governmental entity or of any other person or entity, (vii) the
presence of Hazardous Substances on, under or about the Property or the adjoining or
neighboring property, (viii) the quality of any labor and materials used in any
improvements on the Property, (ix) the condition of title to the Property, (x) the contracts
or other agreements affecting the Property and (xi) the economics of the operation of the
Property.
B’RS.
12.3 Buyer acknowledges that some defects may
UYERS ELEASE OF ELLER
become apparent only after the Closing Date. Buyer on behalf of itself and its successors
and assigns covenants not to bring any action against Seller and waives its right to
recover from, and forever releases and discharges, Seller, Seller’s elected and appointed
officials, employees, legal counsel and agents of each of them, and their respective
successors (collectively, the “Seller Related Parties”) from any and all demands, claims,
legal or administrative proceedings, losses, liabilities, damages, penalties, fines, liens,
judgments, costs or expenses whatsoever (including, without limitation, attorneys’ fees
and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, that
may arise on account of or in any way be connected with (i) the physical condition of the
Property including, without limitation, all structural and seismic elements, all mechanical,
electrical, plumbing, sewage, heating, ventilating, air conditioning and other systems, the
environmental condition of the Property and all Hazardous Substances on, under, or
about the Property, or (ii) any Environmental Law.
13. RP
EDEVELOPMENT OF THE ROPERTY
PC.
13.1 Buyer will redevelop the Property in accordance with the terms
ROJECT OSTS
and conditions of this Agreement, at Buyer’s sole cost and expense.
DCD.
13.2 Beam shall complete, or cause to be
ESIGN AND ONSTRUCTION RAWINGS
completed, the design work necessary to build the Project. Beam and Agency have
agreed to the Conceptual Plans as a basis for entering into this Agreement. Beam shall
prepare Design Drawings and final Construction Plans and Specifications and submit
them to Agency for review and approval within the timeline set forth in the Project
Schedule.
A’R.
13.2.1 Agency’s review and approval of the Design
GENCYS EVIEW
Drawings and the final Construction Plans and Specifications shall be limited to (i)
review of the Design Drawings for substantial consistency with the Conceptual Plans; (ii)
review of the final Construction Plans and Specifications for substantial consistency with
the Design Drawings; (ii) compliance with all applicable federal, state and local laws,
including the Plan and the Code; (iii) material compliance with Agency’s LEED
Requirements; and (iv) rehabilitation of the historical characteristics of the Centre Court
Building.
A’AD.
13.2.2 Agency shall approve or
GENCYS PPROVAL OR ISAPPROVAL
disapprove the Design Drawings and the final Construction Plans and Specifications
within ten (10) days of Beam’s submittal and provide Beam written notice of Agency’s
Page 15 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
determination within such ten-day period. If Agency disapproves the Design Drawings
or the final Construction Plans and Specifications submitted by Beam, Agency shall
include in its notice the reasons for disapproval and Beam shall resubmit the Design
Drawings or the final Construction Plans and Specifications, as applicable. If Beam
desires to make any substantial change to the Design Drawings or the final Construction
Plans and Specifications after approval by Agency, the proposed changes shall be
resubmitted to Agency for approval. As used in this section, “substantial change” means
a change which materially alters the layout or scope of the improvements or changes to a
lesser quality previously approved materials.
PF.
13.3 Beam shall obtain all private construction and permanent
ROJECT INANCING
financing that, combined with the Centre Court/Vacant Lot Construction Loan, will be
sufficient to complete all Project improvements at a total project cost of approximately
_____ Dollars ($_____).
AF.
13.3.1 Subject to the terms and conditions of this
CQUISITION INANCING
Agreement and the Loan Documents, Agency will provide acquisition financing to Beam
in the amount of Three Million Five Hundred Fifty Thousand Dollars ($3,550,000).
Agency agrees to subordinate the lien of the Trust Deed to Mortgages securing the Senior
Loan on terms satisfactory to Agency in its reasonable discretion. The Loan Documents
shall provide for repayment of the portion of the Loan funded under the BEDI grant
program prior to payment of the deferred developer fee or any portion thereof. Buyer
shall provide Agency information demonstrating, to Agency’s satisfaction, Buyer’s
compliance with all requirements of the US Department of Housing and Urban
Development for its Section 108 and Brownfields Economic Development Initiative loan
guarantee and grant programs.
CF.
13.3.2 Subject to the availability of funds from
ONSTRUCTION INANCING
HUD, Agency shall provide construction financing to Beam in the amount of Six Million
Five Hundred Thousand Dollars ($6,500,000). Agency agrees to subordinate the Loan
and the Centre Court/Vacant Lot Construction Loan to the Senior Loan on terms
satisfactory to Agency in its reasonable discretion. The Loan Documents shall provide
for repayment of the portion of the Centre Court/Vacant Lot Construction Loan funded
under the BEDI grant program prior to payment of the deferred developer fee or any
portion thereof. Buyer shall provide Agency information demonstrating, to Agency’s
satisfaction, Buyer’s compliance with all requirements of the US Department of Housing
and Urban Development for its Section 108 and Brownfields Economic Development
Initiative loan guarantee and grant programs.
13.3.2.1 In the event Agency is unable, through no fault of Beam, to
obtain from HUD funds in an amount equal to Six Million Five Hundred Thousand
Dollars ($6,500,000), Agency shall notify Beam of the unavailability of such funds and,
to the extent applicable, the difference between the amount that is available from HUD
and the total Centre Court/Vacant Lot Construction Loan amount. Beam and Agency,
individually and together, shall thereafter diligently pursue additional funding from other
sources.
Page 16 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
13.3.2.2 If, after thirty (30) days of each party using good faith efforts
Beam and Agency are unable to obtain commitments for the additional funding needed to
cover the Centre Court/Vacant Lot Construction Loan amount, Beam may request that
Agency reacquire the Property from Beam. Within thirty (30) days of Beam making such
request, Beam shall transfer the Property, via bargain and sale deed, to Agency for Fifty
Thousand Dollars ($50,000) and relief from the Acquisition Loan. At the time of
Agency’s reacquisition of the Property pursuant to this Section 13.3.2.2, Agency shall
reimburse Beam for fees and charges actually paid by Beam to third parties and
attributable to Beam’s acquisition of the Property, up to a maximum of _____ Dollars
($_____). Beam shall provide to Agency documentation reasonably requested by
Agency to determine the amount of reimbursement under this section.
B’O-GP-LR;CL.
13.3.3 In the
EAMS NOING REEASING EQUIREMENTS ITY EASE
event Beam is able to fulfill Senior Lender’s pre-leasing requirements prior to Project
Completion, Beam shall allow the City, at no cost to the City and pursuant to the City
Lease, opt out of or reduce the lease rate and/or square footage of the premises described
in the City Lease. Such changes to the City Lease, if any, shall be reflected in
Exhibit F
amendments to . Pursuant to the City Lease, Beam shall provide City written
notice of (i) Project Completion; and (ii) completion of the tenant improvements made by
Beam to the City’s leased premises.
CL;PPW.
13.4 Buyer will
OMPLIANCE WITH AWS AYMENT OF REVAILING AGES
redevelop the Property in accordance with all applicable federal, state and local laws,
including applicable federal and state prevailing wage laws.
13.4.1 Beam shall pay prevailing wages and comply with all prevailing wage rate
laws, as set forth in the Davis-Bacon Act (40 USC 3141, et seq.) and under ORS
279C.800 through and including ORS 279C.870. Beam shall cause its contractors and
subcontractors working on the Project to pay such wages and to comply with all other
prevailing wage rate laws.
13.4.1.1 Every contract and subcontract between Beam and its
contractors and subcontractors shall contain a provision that the workers shall be paid not
less than the specified minimum hourly rate of wage. The Specifications for this
Agreement and every contract between Beam and its contractors and subcontractors shall
further include the applicable prevailing rate of wage for all of the laborers working on
the Project.
13.4.1.2 Because the Project is subject to both ORS 279C.800 to
279C.870 and the Davis-Bacon Act, Beam, its contractors and subcontractors shall pay at
least the higher of the state and the federal prevailing rates of wages.
13.4.1.3 At the time Beam enters into this Agreement, Beam shall pay
Agency the administrative fee required under ORS 279C.825.
Page 17 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
13.4.1.4 Before commencing construction of the Project, Contractor shall
provide Agency a written statement certifying that Beam, its contractors and
subcontractors are exempt or have filed public works bonds as required under ORS
279C.836.
13.4.1.5 Beam shall retain twenty-five percent (25%) of any amount
earned by any of its contractors until the certified statements of wage rates and payment
on forms prescribed by the Bureau of Labor and Industries have been filed and shall
thereafter pay a contractor within fourteen (14) days after the contractor verifies that
proper certificates have been filed. Beam’s contractors shall retain twenty-five percent
(25%) of any amount earned by a first tier subcontractor until the certified statements of
wage rates and payment on forms prescribed by the Bureau have been filed. Each of
Beam’s contractors shall verify that the first tier subcontractor has filed the certified
statements before such contractor pays a subcontractor the amount retained, which shall
be within fourteen (14) days after the first tier subcontractor files the certificates.
13.4.1.6 During construction of the Project, Beam or its contractors and
subcontractors shall file certified statements with Agency regarding payment of
prevailing wage rates in accordance with ORS 279C.845.
13.4.1.7 As used in this Agreement, the term “prevailing wage rate laws”
means all state, federal and local statutes, regulations and ordinances, including 40 USC
3141 et seq. and ORS 279C.800 to ORS 279C.870.
13.5 P-CCB.
To induce Seller to sell the Property to
OSTLOSING OVENANTS OF UYER
Buyer under the terms and conditions described herein, Buyer hereby makes the
following representations and covenants, for the benefit of Seller:
CC.
13.5.1Pursuant to ORS 457.230, the
OMMENCEMENT OF ONSTRUCTION
Parties have agreed that construction of the Project will commence on or before May 1,
2009, provided that Buyer may extend the commencement date for up to an additional
thirty (30) days, if necessary due to events or circumstances beyond Buyer’s reasonable
control, upon Buyer providing written notice of extension. Buyer’s written notice shall
be provided to Agency on or before April 15, 2009 and shall state the reasons Buyer
wishes to extent the commencement date.
DCC;
13.5.1.1
EFINITION OF OMMENCEMENT OF ONSTRUCTION
N.
Construction will be deemed to commence on the date on which Buyer has (i)
OTICE
obtained building permits from the City, (ii) obtained construction financing, in an
amount sufficient to complete redevelopment of the Project in accordance with this
Agreement, on terms acceptable to Beam AND (iii) issued a notice to proceed to the
general construction contractor for the Project pursuant to a binding contract for
construction. Buyer shall provide written notice to Seller once Buyer determines it has
commenced construction. The notice shall include copies of the building permits,
construction loan commitments and the notice to proceed. Within two (2) days of
receiving Buyer’s notice, Seller shall determine whether Seller agrees that construction
Page 18 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
has commenced, in which case Seller shall issue a Certificate of Commencement,
pursuant to Section 13.5.3, or that construction has not commenced, in which case a
certificate shall be not issued.
CC;N.
13.5.1.2 Buyer shall
OMPLETION OF ONSTRUCTION OTICE
diligently pursue, through completion, redevelopment of the Property, which shall be
consistent with this Agreement, the Plan and all applicable laws. Buyer shall provide
Agency written notice immediately upon achieving Project Completion.
CC–B
13.5.1.3
OMMENCEMENT OF ONSTRUCTION INDING
CS.
Buyer’s obligation to commence construction on or before
ONDITION UBSEQUENT
May 1, 2009 is a condition subsequent, which shall be binding on Buyer and Buyer’s
assigns, successors and heirs and shall be recorded against the Property in the form of the
covenants and restrictions included in the Deed.
RR-E.
13.5.2 In the event Buyer fails to commence construction
IGHT OF ENTRY
on or before May 1, 2009 (or a later date if Buyer has requested an extension pursuant to
Section 13.5.1), as set forth in this Section 13 and the Schedule of Performance, as
evidenced by issuance of a Certificate of Commencement, Seller may pursue all available
remedies, at law or in equity, including termination in favor of Seller of the title, and of
all the rights and interest in the Property and all the title and rights and interest in the
Property conveyed to Buyer and any assigns or successors in interest shall be reconveyed
to Seller by Quit Claim Deed, pursuant to Section 14 and the Escrow Instructions for Quit
Exhibit C
Claim Deed in .
CC.
13.5.3 A “Certificate of Commencement”
ERTIFICATE OF OMMENCEMENT
means a certificate to be issued by Seller to Buyer indicating Seller’s agreement that
Buyer has commenced construction of the Project. The Certificate of Commencement
shall provide for termination of the construction obligations established under this
Agreement and a limitation of remedies of Seller as expressly provided for herein.
FCC;S’R
13.5.4
ORM OF ERTIFICATE OF OMMENCEMENT ELLERS EFUSAL TO
I.
The Certificate of Commencement shall be in a form that can be recorded in the
SSUE
real property records of Lane County. At Buyer’s request, the Certificate of
Commencement shall state that Seller’s right of re-entry is of no further force and effect.
If Seller refuses or fails to provide a Certificate of Commencement in accordance with
this Section 13, then Seller, within fifteen (15) days after written request by Buyer for
such Certificate of Commencement, shall provide Buyer with a written statement
indicating in detail how Buyer has failed to commence construction in accordance with
the provisions of this Agreement or is otherwise in default and what measures or acts
Buyer must take or perform to obtain such Certificate of Commencement. Upon receipt
of such detailed statement from Seller, Buyer shall commence construction of the
improvements and/or cure the alleged default in a manner responsive to the stated reasons
for disapproval. Seller’s failure to furnish Buyer with such detailed written statement
within such fifteen (15) day period shall be deemed Seller’s approval of Buyer’s request
for the Certificate of Commencement.
Page 19 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
14. A’R;RI.
In the event of a breach by Buyer
GENCYS EMEDIES EVERSIONARY NTEREST
after Closing of Buyer’s covenants and representations contained in Section 13, Seller shall have
the choice to: (a) pursue any remedy available to it at law or equity, or (b) give notice to Buyer
that the conditions have not been met and that Agency’s right of re-entry is being invoked
causing title to the Property to transfer back to Seller.
FCC.
14.1 If, after Closing, Buyer fails to obtain
AILURE TO OMMENCE ONSTRUCTION
the required Certificate of Commencement on or before May 1, 2009 (or a later date if
Buyer has requested an extension pursuant to Section 13.5.1), then Seller may demand in
writing that Buyer cure such default within thirty (30) days. If Buyer does not cure the
default within the thirty (30) day period (or in the case that such default is not curable
within said thirty (30) day period, if Buyer shall have not commenced and be diligently
pursuing such cure to completion), then such action or inaction shall create in Seller the
following remedies, which remedies shall be exclusive of any other granted to Seller:
CS;NT;QC
14.1.1
ONDITION UBSEQUENT OTICE OF ERMINATION UIT LAIM
D.
The right to re-enter and take possession of the Property, and to terminate (and
EED
revest in Seller) the estate conveyed by the Deed to the Property, terminate Buyer’s right
to finish redevelopment of the Property, and resell the Property pursuant to this Section
14 hereof, it being the intent of this provision together with other provisions of this
Agreement, that the conveyance of the Property to Buyer shall be made upon, and that
the Deed to the Property shall provide for, a condition subsequent to the effect that in the
event of default by Buyer and failure of Buyer to remedy, end or abrogate such default,
within the period and in the manner stated, then Seller, at its option, may upon thirty (30)
days written notice (hereinafter “Notice of Termination”) to Buyer and the Escrow Agent
declare a termination in favor of Seller of the title, and of all the rights and interest in the
Property and all the title and rights and interest in the Property conveyed to Buyer and
any assigns or successors in interest shall be reconveyed to Seller by the Quit Claim
Exhibit C
Deed, pursuant to the Escrow Instructions for Quit Claim Deed in .
TB’WP.
14.1.2 Buyer shall provide Seller
RANSFER OF UYERS ORK RODUCT
with any work product produced by any third parties for Buyer, if allowed pursuant to
Buyer’s contracts with such third parties, for Seller’s use.
SR.
14.1.3 If title to the Property shall revest in Seller in
ELLER ESALE
accordance with this Section 14, Seller may, at its option, undertake such actions deemed
by Seller as reasonably necessary to protect the Property from the elements or other
dangers, and shall, pursuant to its responsibilities under Oregon Revised Statutes, and the
Code, use its best efforts consistent with prudent business practices and generally in
accordance with the terms of this Agreement to resell at a reasonable price, the Property
as soon and in such a manner as Seller shall find feasible and consistent with the
objectives of such laws, to a qualified and responsible party or parties (as determined by
Seller in its sole discretion) who will assume the obligation of making or completing the
improvements or such other improvements in their stead as shall be satisfactory to Seller.
Upon such resale, the proceeds thereof shall be applied as follows:
Page 20 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
SR.
14.1.3.1 First, to Seller on its own
ELLER EIMBURSEMENT
behalf to reimburse Seller for all costs and expenses reasonably incurred by it including,
but not limited to: salaries of personnel in connection with the recapture, management
and resale of the Property; any payments made or necessary to be made to discharge any
encumbrances or liens existing on the Property (including but not limited to the Loan
Documents) at the time of revesting of title thereto in Seller or to discharge or prevent
from attaching or being made; any subsequent encumbrances or liens due to obligations,
defaults, or acts of Buyer, its successors or transferees; any expenditures made or
obligations incurred with respect to the protecting the Property or any portion thereof;
and any amounts otherwise owing Seller by Buyer and its successor or transferee;
BR.
14.1.3.2 Second, to reimburse Buyer, its
UYER EIMBURSEMENT
successor or transferee, up to the amount equal to, the sum of (a) the Purchase Price made
prior to revesting in the Seller, and (b) the Seller-approved redevelopment costs incurred
by it in making any improvements to the Property or part thereof, less any gains or
income withdrawn or made as to the Property; and
BS.
14.1.3.3 Third, any balance remaining after
ALANCE TO ELLER
any reimbursements shall be retained by Seller.
15. I
NDEMNIFICATION
15.1 BI.
Beam shall protect, defend, indemnify and hold harmless
EAM NDEMNITY
Agency and its elected and appointed officials, employees and agents from any and all
third party claims, demands, suits, penalties, losses, damages, judgments, costs and fees
Claims
of any kind whatever, including attorney fees (“”) arising out of or in any way
resulting from the acts or omissions of Beam’s members, officers, employees, agents,
contractors and/or subcontractors in performing or failing to perform under this
Agreement; provided, however, that Beam shall have no obligation under this section or
this Agreement to indemnify or in any other way provide protection to Agency for
Claims involving Agency’s sole negligence.
15.2 AI.
Subject to the limitations of the Oregon Tort Claims Act,
GENCY NDEMNITY
the Oregon Constitution and all laws applicable to municipal corporations and political
subdivisions of the state, Agency shall protect, defend, indemnify and hold harmless
Beam and its members, officers, employees and agents from any and all Claims arising
out of or in any way resulting from the negligent acts or omissions of Agency officials,
officers, employees, agents, contractors and/or subcontractors in performing or failing to
perform under this Agreement; provided, however, that Agency shall have no obligation
under this section or this Agreement to indemnify or in any other way provide protection
to Beam for Claims involving Beam’s negligence.
16. BE/AR.
This Agreement is binding on and will
INDING FFECTSSIGNMENT ESTRICTED
inure to the benefit of Seller, Buyer, and their respective heirs, legal representatives, successors
and assigns. Nevertheless, Buyer may not assign or transfer its rights under this Agreement
without Seller’s prior written consent, which consent may be withheld for any reason deemed by
Page 21 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
Seller to be in the public interest. Notwithstanding the foregoing, Buyer may assign or transfer
its rights under this Agreement without Seller’s prior written consent if such assignment or
transfer is to a partnership, limited liability company or limited liability partnership with Beam
Construction & Management, LLC holding the majority ownership or controlling interest in and
of such entity.
17. DD;C.
Prior to the Closing Date, if all or a
AMAGE OR ESTRUCTION ONDEMNATION
material portion of the Property is taken by eminent domain, condemnation or similar
government power (a “Taking”), then either party may terminate this Agreement. Termination
by a party pursuant to this Section 17 shall be by written notice to the other party within fifteen
(15) days of the effective date of the Taking. Upon termination of this Agreement pursuant to
this Section 17, this Agreement shall be of no further force or effect, Buyer shall have no further
right, title or interest in or to the Property, and neither party shall have any rights or obligations
to the other party respecting this Agreement (except as expressly provided herein). If neither
Buyer nor Seller elects to terminate this Agreement pursuant to this Section 17, then Buyer and
Seller shall be obligated to complete their obligations under this Agreement; provided, however,
that: the Property shall not include the portion so taken, Seller shall be entitled to any award or
compensation paid by the Taking authority, and the Purchase Price shall be reduced by the
amount Seller receives from the Taking authority.
18. R.
The remedies provided in this section are not intended to replace or
EMEDIES
supersede any other remedies to which a party may be entitled under this Agreement.
B’FP.
18.1 If Buyer fails to complete the purchase of
UYERS AILURE TO URCHASE
the Property by reason of any default by Buyer, Buyer agrees to reimburse Seller for
all of its costs and expenses incurred to satisfy the conditions described in Section 7,
and agrees that Seller shall receive the Earnest Money, and any interest earned
thereon, as liquidated damages to compensate Seller’s losses and expenses incurred in
the preparation and negotiation of the transactions contemplated hereunder. Seller
and Buyer believe that liquidated damages in an amount equal to the Earnest Money
(and any interest earned thereon) is reasonable to compensate Seller for its losses, in
light of the anticipated or actual harm caused by the default, the difficulties of proof
of loss, and the inconvenience or nonfeasibility of otherwise obtaining an adequate
remedy. Buyer’s forfeiture in favor of Seller of the Earnest Money and interest shall
constitute the exclusive remedy of Seller on account of the default of Buyer. If Seller
gives written notice to the Escrow Agent and Buyer has defaulted hereunder, the
Escrow Agent shall remit to Seller all amounts held by the Escrow Agent with respect
to this Agreement, consisting of the Earnest Money deposit and any interest earned
thereon. If the Escrow Agent for any reason fails to pay the amount of the liquidated
damages to Seller, Seller may seek payment of the amount directly from Buyer.
S’F.
18.2 If Buyer cannot purchase the Property because of breach or
ELLERS AILURE
default by Seller, or as a result of Seller’s failure to satisfy Buyer’s conditions to Closing
then, unless Buyer is in breach of this Agreement, Buyer shall not be prevented from
seeking specific performance or, if specific performance is not available to Buyer
Page 22 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
because Seller’s failure was not within Seller’s control, from recovering its actual costs
necessarily incurred by Buyer to purchase the Property.
19. DR
ISPUTE ESOLUTION
A.
19.1 Any controversy, claim or dispute arising out of or related to this
RBITRATION
Agreement (but excluding the Loan Documents) shall be resolved by arbitration upon
written demand therefor made by a party upon all other parties to the controversy, claim
or dispute (provided, however, that a party may not demand arbitration under this Section
19.1 after the party has filed or appeared in any legal proceeding instituted to resolve the
dispute, claim or controversy), and judgment on the award rendered in such arbitration
may be entered in any court having jurisdiction thereof. If the parties do not otherwise
agree, the arbitration shall be in accordance with the Oregon Business Rules of the
American Arbitration Association (although the arbitration need not be conducted by or
administered under the auspices of the American Arbitration Association). If the Oregon
Business Rules of the American Arbitration Association no longer exist, the matter shall
be arbitrated in accordance with ORS 36.300 et seq., or any successor statutes thereto.
AF
19.2 . If any suit, action, arbitration or other proceeding is instituted
TTORNEY EES
upon this Agreement or to enforce creditor’s rights or otherwise pursue, defend or litigate
issues related to or peculiar to federal bankruptcy law (including, but not limited to,
efforts to obtain relief from an automatic stay), or any other controversy arising from this
Agreement, the prevailing party shall be entitled to recover from the other party and the
other party agrees to pay the prevailing party, in addition to costs and disbursements
allowed by law, such sum as the court, arbitrator or other adjudicator may adjudge
reasonable as an attorney fee in such suit, action, arbitration or other proceeding, and in
any appeal thereof or therefrom. Such sum shall include an amount estimated by the
court, arbitrator or adjudicator, as the reasonable costs and fees to be incurred in
collecting any monetary judgment or award or otherwise enforcing each award, order,
judgment or decree entered in such suit, action or other proceeding.
20. FM
.Neither Buyer nor Seller nor their successors shall be considered in
ORCE AJEURE
breach of or in default with respect to any obligation created hereunder or progress in respect
thereto if the delay in performance of such obligation or progress (the “Unavoidable Delay”) is
due to causes that are unforeseeable, beyond the control of the party asserting Unavoidable
Delay and without its fault or negligence, including but not limited to acts of God, acts of the
public enemy, acts of the government, acts of the other party, fires, floods, earthquakes,
explosion, mob violence, riot, general sabotage or rationing of labor, equipment, facilities,
sources of energy, material or supplies in the open market, litigation or arbitration involving a
party relating to the Project, malicious mischief or condemnation action delays of litigation. It is
the purpose and intent of this Section 20 that, in the event of the occurrence of any such
Unavoidable Delay, the time or times for performance of the obligations of the Buyer or Seller,
as applicable, shall be extended for the period of the Unavoidable Delay; provided, however, that
the party seeking the benefit of this section shall, within seven (7) days after it becomes aware of
the causes of any such Unavoidable Delay, notify the other party in writing of the cause or
causes of the delay and the estimated time of correction; and, provided, further, that the
Page 23 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
extension of the time or times for performance of the obligations of the party seeking the benefit
of this section shall not exceed thirty (30) days.
21. GP
ENERAL ROVISIONS
T.
21.1 Time is of the essence of Buyer’s obligations hereunder.
IME
S.
21.2 If any term, condition or provision of this Agreement is declared
EVERABILITY
illegal or invalid for any reason by a court of competent jurisdiction, the remaining terms,
conditions and provisions of this Agreement shall remain in full force and effect.
C.
21.3 The section or paragraph captions contained in this Agreement are for
APTIONS
convenience only and shall not limit or amplify or otherwise constitute a part of the
provisions herein.
W.
21.4 Failure of either party at any time to require performance of any
AIVER
provision of this Agreement shall not limit the party’s right to enforce the provision, nor
shall any waiver of any breach of any provision constitute a waiver of the provision
unless the waiver is in writing and signed by the waiving party. The waiver by a party of
a provision shall not constitute or be deemed to be a waiver of any other provision, nor
shall it constitute or be deemed to be a waiver of any subsequent breach of the same or
any other provision.
N.
21.5 Any notice, request, demand, instruction or other communication or
OTICES
document to be given hereunder shall be given either: (a) by personal delivery (in which
event, such notice shall be deemed received upon such delivery), or (b) by first class
United States mail, postage prepaid, registered or certified, return receipt requested,
addressed to the person as required by this Section 20.5 (in which event such notice shall
be deemed received forty-eight (48) hours after deposit in any United States Post Office
mailbox in the state to which the notice is addressed, or seventy-two (72) hours after
deposit in any United States Post Office mailbox other than in the state to which the
notice is addressed. The address for purposes of this Section 20.5 shall be the address set
forth below the party’s signature at the end of this Agreement, as such address may be
changed by giving written notice of such change in the manner herein provided for giving
notice. A copy of any notice given hereunder to Beam shall be provided to Susan
Alterman, Alterman Law Office, 1000, Southwest Broadway, Suite 910, Portland,
Oregon 97205-3065.
EA.
21.6 This is the only agreement between the parties relating to
NTIRE GREEMENT
the subject matter hereof, and all prior and contemporaneous negotiations relating to this
Agreement, are merged herein and superseded hereby. The only agreements,
representations or warranties made by Seller are those set forth in writing in this
Agreement (including the exhibits and any addenda incorporated by reference into this
Agreement). No agreements, representations or warranties, express or implied, that are
not set forth in writing in this Agreement are made by Seller to or with Buyer.
Page 24 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
BC
21.7 . Neither Seller nor Buyer is represented in this
ROKER OMMISSIONS
transaction by a realtor. Each of the parties represents and warrants to the other that no
other commission or fee is due in connection with the transactions contemplated by this
Agreement. Each party agrees to indemnify, defend and hold harmless the other party
against any loss, liability, damage, cost, claim or expense, including interest, penalties
and reasonable attorneys’ fees that the other party shall incur or suffer by reason or a
breach of the representation and warranty in this Section 20.7.
AA.
21.8 Where approvals of Agency are required, Agency will
GENCY PPROVALS
approve or disapprove within ten (10) days after receipt of the material to be approved,
except where a longer or shorter time period is specifically provided to the contrary.
Approvals will not be unreasonably withheld, except where rights of approval are
expressly reserved to Agency’s sole discretion in this Agreement. Unless specified to the
contrary, whenever consent or approval by Agency is required, all such consents or
approvals shall be given in writing from the Director of Agency.
S.
21.9 All provisions, covenants and warranties hereunder shall survive
URVIVAL
execution, delivery and termination of this Agreement and the Deed to the extent
necessary to carry out their reasonably intended effects. Such provisions, covenants and
warranties shall not merge with the Deed.
RSD.
21.10 THEPROPERTYDESCRIBEDINTHIS
EQUIRED TATUTORY ISCLOSURE
INSTRUMENTMAYNOTBEWITHINAFIREPROTECTIONDISTRICT
PROTECTINGSTRUCTURES.THEPROPERTYISSUBJECTTOLANDUSELAWS
ANDREGULATIONSTHAT,INFARMORFORESTZONES,MAYNOT
AUTHORIZECONSTRUCTIONORSITINGOFARESIDENCEANDTHATLIMIT
LAWSUITSAGAINSTFARMINGORFORESTPRACTICES,ASDEFINEDINORS
30.930,INALLZONES.BEFORESIGNINGORACCEPTINGTHISINSTRUMENT,
THEPERSONTRANSFERRINGFEETITLESHOULDINQUIREABOUTTHE
PERSON’SRIGHTS,IFANY,UNDERORS195.300,195.301195.305TO195.336
AND
ANDSECTIONS5TO11,CHAPTER424,OREGONLAWS2007BEFORESIGNING
ORACCEPTINGTHISINSTRUMENT,THEPERSONACQUIRINGFEETITLETO
THEPROPERTYSHOULDCHECKWITHTHEAPPROPRIATECITYORCOUNTY
PLANNINGDEPARTMENTTOVERIFYTHATTHEUNITOFLANDBEING
TRANSFERREDISALAWFULLYESTABLISHEDLOTORPARCEL,ASDEFINED
INORS92.010OR215.010,TOVERIFYTHEAPPROVEDUSESOFTHELOTOR
PARCEL,TOVERIFYTHEEXISTENCEOFFIREPROTECTIONFOR
STRUCTURESANDTOINQUIREABOUTTHERIGHTSOFNEIGHBORING
PROPERTYOWNERS,IFANY,UNDERORS195.300,195.301195.305TO
AND
195.336ANDSECTIONS5TO11,CHAPTER424,OREGONLAWS2007.
SNRL.UNDEROREGONLAW,MOST
21.11
TATUTORY OTICE EGARDING OANS
AGREEMENTS,PROMISESANDCOMMITMENTSMADEBYALENDER,
CONCERNINGLOANSANDOTHERCREDITEXTENSIONS,WHICHARE
NOTFORPERSONAL,FAMILYORHOUSEHOLDPURPOSESORSECURED
Page 25 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
SOLELYBYABORROWER’SRESIDENCE,MUSTBEINWRITING,EXPRESS
CONSIDERATIONANDBESIGNEDBYALENDERTOBEENFORCEABLE.
I
, Seller and Buyer have executed this Purchase and Sale
N WITNESS WHEREOF
Agreement on the date set forth below.
S: B:
ELLERUYER
URA BC&M,
RBAN ENEWAL GENCYEAM ONSTRUCTION ANAGEMENT
LLC,
CE, an Oregon limited liability company,
OF THE ITY OF UGENE
a municipal corporation of the State of Oregon doing business as Beam Development
By: By:
Jon R. Ruiz, Director
Date: Date:
APN APN
DDRESS FOR URPOSES OF OTICEDDRESS FOR URPOSES OF OTICE
URBAN RENEWAL AGENCY OF BEAM CONSTRUCTION &
THE CITY OF EUGENE MANAGEMENT, LLC,
Denny Braud dba Beam Development
th
99 West 10 Avenue 1001 SE Water Avenue, #120
Eugene, Oregon 97401 Portland, Oregon 97214
Page 26 - PURCHASE AND SALE AGREEMENT – DRAFT #3 (20 May 2008)
EXHIBIT A-1
LEGAL DESCRIPTION
CENTRE COURT/VACANT LOT PROPERTY
EXHIBIT A
EXHIBIT A-2
LEGAL DESCRIPTION
WASHBURNE PROPERTY
EXHIBIT A
EXHIBIT B
After Recording Return to and
Tax Statements to be sent to:
_______________
_______________
_______________
_______________
BARGAIN AND SALE DEED
(Fee Simple on a Condition Subsequent and Right of Entry)
KNOW ALL MEN BY THESE PRESENTS, that the URBAN RENEWAL AGENCY OF THE CITY OF
EUGENE, a municipal corporation of the State of Oregon (the “Grantor”), for the consideration hereinafter stated to
the Grantor paid, does hereby grant, bargain, sell and convey to BEAM CONSTRUCTION & MANAGEMENT,
LLC, an Oregon limited liability company, doing business as BEAM DEVELOPMENT (the “Grantee”), and to
Grantee’s heirs, successors and assigns, that certain real property, with the tenements, hereditaments and
appurtenances thereunto belonging or appertaining, situated in the County of Lane, State of Oregon, described as
follows, to-wit:
________________, City of Eugene, Lane County, Oregon
TO HAVE AND TO HOLD the above described and granted premises unto the Grantee, its successors in
interest and assigns, but if Buyer has not received a Certificate of Commencement demonstrating that Buyer has
commenced construction (as defined below) of the redevelopment of the property herein granted on or before May
1, 2009, Grantor, or Grantor’s heirs, successors and assigns, may enter and terminate this estate according to the
Termination Procedure (set forth below).
“Commencement of Construction” shall be deemed to have occurred when Buyer has (i) obtained building
permits from the City, (ii) obtained construction financing, in an amount sufficient to complete redevelopment of the
Project in accordance with this Agreement, on terms acceptable to Beam AND (iii) issued a notice to proceed to the
general construction contractor for the Project pursuant to a binding contract for construction.
The “Termination Procedure” (if necessary) is as follows: in the event of a default by Grantee, if Grantor
wishes to invoke the Right of Entry, Grantor shall provide written notice to Grantee of its intention to terminate
Grantee’s estate. In addition, Grantee shall convey any and all interest it may have in said property herein granted to
Exhibit C
Grantor by quitclaim deed, substantially in the form attached as , pursuant to the escrow instructions
Exhibit D
attached as .
It is intended that the delivery of this deed shall not effect a merger of those provisions of that certain
Purchase and Sale Agreement by and between Grantor and Grantee dated as of May 23, 2008 (the “Agreement”)
that are intended by the terms of the Agreement to continue after the delivery of this deed.
EXHIBIT B
BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE
TITLE SHOULD INQUIRE ABOUT THE PERSON’S RIGHTS, IF ANY, UNDER ORS 195.300,195.301
AND
195.305TO195.336ANDSECTIONS5TO11,CHAPTER424,OREGONLAWS2007. THIS INSTRUMENT
DOES NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF
APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS
INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE
APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY THAT THE UNIT OF LAND
BEING TRANSFERRED IS A LAWFULLY ESTABLISHED LOT OR PARCEL, AS DEFINED IN ORS 92.010
OR 215.010, TO VERIFY THE APPROVED USES OF THE LOT OR PARCEL, TO DETERMINE ANY LIMITS
ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES, AS DEFINED IN ORS 30.930, AND TO
INQUIRE ABOUT THE RIGHTS OF NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS 195.300,
195.301195.305TO195.336ANDSECTIONS5TO11,CHAPTER424,OREGONLAWS2007.
AND
IN WITNESS WHEREOF, Grantor has caused this deed to be executed this ___day of ________, 2008.
URBAN RENEWAL AGENCY OF THE CITY OF
EUGENE
, a municipal corporation of the State of Oregon
By:
Name:
Title:
STATE OF OREGON )
) ss.
County of Lane )
The foregoing instrument was acknowledged before me this _______ day of _________________, 2008,
by __________________________ as _______ of the Urban Renewal Agency of the City of Eugene, on its behalf.
____________________________
Notary Public for Oregon
My commission expires:
EXHIBIT B
EXHIBIT C
ESCROW INSTRUCTIONS FOR QUITCLAIM DEED
Cascade Title Company
811 Willamette Street
Eugene, Oregon 97401
Attention: [INSERT TITLE OFFICER]
Re: Escrow No.
Background
On ________, 2008, Beam Construction & Management, LLC (“Buyer”) will purchase from the Urban Renewal
Agency of the City of Eugene, an Oregon municipal corporation (“Agency”) parcels of real property located in the
Exhibit A-1 Exhibit A-2
City of Eugene, Oregon, more particularly described in the attached and (collectively, the
“Property”). The bargain and sale deeds that the Agency will grant to Buyer (collectively, the “Bargain and Sale
Deed”) contain a reversionary interest called a right of re-entry (the “Right of Entry”). The Bargain and Sale Deed
will provide that the Agency has the right to invoke the Right of Entry if Buyer has not commenced construction of
redevelopment of the Property on or before May 1, 2009.
If the commencement of construction requirement is not met and the Agency chooses to invoke the Right of Entry,
title to the Property will transfer back to the Agency by operation of law. In addition to the title passing back to the
Agency via the Right of Entry, the Buyer must release and quitclaim all right, title and interest in and to the Property
to the Agency pursuant to the attached quitclaim deed (the “Quitclaim Deed”). If the redevelopment requirement
relating to commencement of construction is met then the Agency will issue to the Buyer an official certificate of
commencement of construction (the “Certificate of Commencement”).
Instructions
In the event that you receive a notice from the Agency signed by the Agency’s Director certifying that a copy of said
notice has been delivered concurrently to Buyer and certifying that the Right of Entry has been invoked according to
the terms of the Bargain and Sale Deed (the “Notice”), you shall at the end of thirty (30) days after receipt of the
Notice record the Quitclaim Deed in the records of Lane County. The only exceptions to this are if: (a) within said
thirty (30) day period you receive a notice from the Agency signed by the Agency’s Director certifying that the
Agency has withdrawn the Right of Entry, or (b) you are prohibited from recording the Quitclaim Deed by
temporary restraining order, preliminary injunction, or other court order.
In the event that you receive a copy of a Certificate of Commencement issued by Agency with respect to the
Property, you will forthwith return the Quitclaim Deed to the Buyer. These instructions may not be withdrawn or in
any way amended, modified or waived without the prior written consent of both of the parties hereto. Please
indicate your acceptance of and agreement to carry out these instructions as indicated below.
Very truly yours,
Beam Construction & Management, LLC,
an Oregon limited liability company,
doing business as Beam Development
By:
Name:
Urban Renewal Agency of the City of Eugene,
an Oregon municipal corporation
EXHIBIT C
By:
Name:
Accepted and agreed to this ___ day of _______, 2008.
By
Title Company
EXHIBIT C
EXHIBIT D
QUITCLAIM DEED
After recording return to
and send tax statements to:
Urban Renewal Agency
For the City of Eugene
th
99 West 10 Avenue
Eugene, Oregon 97401
Attn: Denny Braud
For a valuable consideration, receipt of which is hereby acknowledged, BEAM CONSTRUCTION &
MANAGEMENT, LLC, an Oregon limited liability company, doing business as BEAM DEVELOPMENT
(“Grantor”), does hereby release and quitclaim to URBAN RENEWAL AGENCY FOR THE CITY OF EUGENE,
an Oregon municipal corporation (“Grantee”), all right, title and interest in and to the following described real
property, with the tenements, hereditaments and appurtenances, situated in the County of Lane and State of Oregon,
to wit:
_____________, City of Eugene, Lane County, Oregon
To have and to hold the same unto the said Grantee and Grantee’s successors and assigns forever.
The true and actual consideration paid for this transfer, stated in terms of dollars, is One Dollar ($1). However, the
actual consideration consists of or includes other value given or promised which is the whole consideration.
BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE TITLE
SHOULD INQUIRE ABOUT THE PERSON’S RIGHTS, IF ANY, UNDER ORS 195.300,195.301195.305
AND
TO195.336ANDSECTIONS5TO11,CHAPTER424,OREGONLAWS2007. THIS INSTRUMENT DOES NOT
ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE
LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE
PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY
OR COUNTY PLANNING DEPARTMENT TO VERIFY THAT THE UNIT OF LAND BEING TRANSFERRED
IS A LAWFULLY ESTABLISHED LOT OR PARCEL, AS DEFINED IN ORS 92.010 OR 215.010, TO VERIFY
THE APPROVED USES OF THE LOT OR PARCEL, TO DETERMINE ANY LIMITS ON LAWSUITS
AGAINST FARMING OR FOREST PRACTICES, AS DEFINED IN ORS 30.930, AND TO INQUIRE ABOUT
THE RIGHTS OF NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS 195.300,195.301
AND
195.305TO195.336ANDSECTIONS5TO11,CHAPTER424,OREGONLAWS2007.
In Witness Whereof, grantor has executed and sealed this instrument this _____day of _____________, 2008.
Beam Construction & Management, LLC,
an Oregon limited liability company,
doing business as Beam Development
By: Date: _________________
Name:
Title:
EXHIBIT D
STATE OF OREGON
)
) ss.
County of Lane )
The foregoing document was personally acknowledged before me this __ day of_________,
200__, by ___________________________, who being duly sworn, did say that he is the
[____________] of Beam Construction & Management, LLC, doing business as Beam Development and
that the foregoing instrument was signed on behalf of said corporation, and acknowledged said instrument
to be its voluntary act and deed.
________________________________
Notary Public for Oregon
My Commission Expires: ___________
Accepted this ___ day of ____________, 2008
URBAN RENEWAL AGENCY
FOR THE CITY OF EUGENE
By:
Name:
Title:
The foregoing document was personally acknowledged before me this __ day of_________,
200__, by ________, who being duly sworn, did say that s/he is the ____________ of the Urban Renewal
Agency for the City of Eugene, a municipal corporation of the State of Oregon and that the foregoing
instrument was signed on behalf of the agency, and acknowledged said instrument to be its voluntary act
and deed.
________________________________
Notary Public for Oregon
My Commission Expires: ___________
EXHIBIT D
EXHIBIT E-1
ACQUISITION LOAN – LOAN TERMS
Borrower:
Beam Construction & Management, LLC
Aggregate Amount:
An amount not to exceed $3,550,000
Tranche 1: Section 108
Amount: $2,510,444
Term/Amortization:
10 years. Interest only payments for the first two years, commencing August 1,
2008. No principal the first two years; thereafter thirty-one (31) principal quarterly payments of $32,000
each, with a final principal installment of all unpaid principal due at maturity.
Interest Rate:
Prior to Conversion by HUD of Section 108 Loan: Interest rate on Section 108 Loan (currently LIBOR +
20 bps, floating)
After Conversion by HUD of Section 108 Loan: Interest rate on Section 108 Loan (a fixed rate based on
market conditions when sold annually (traditionally lower yields than federal agency securities (ex. Fannie
Mae))
Prepayment:
No prepayment after conversion to fixed rate unless (i) permitted by HUD under the
corresponding Section 108 loan to the City, which allows for defeasance, or (ii) unless consented by
Agency in its sole and absolute discretion. Prior to conversion may be pre-paid in whole or in part at any
time.
Beam shall pay to the Agency the ratable portion of any fees and charges charged to or incurred by the City
or the Agency in connection with the City’s Section 108 Loan from HUD, including fiscal agent and/or
trustee’s fees and conversion fees.
Tranche 2: BEDI
Amount: $635,556
Term/Amortization:
The earlier of (i)50 years or (ii) the date on which Beam achieves a 13% rate of
return on capital, to be measured according to a formula mutually agreed. All unpaid principal due at
maturity. Tranche 2 may be subject to debt forgiveness upon sale of the Property if Beam fails to achieve a
13% rate of return on capital. Pursuant to Section 13.3.1 of the Agreement, the payment of the deferred
development fee is subordinated to the repayment of Tranche 2.
Interest Rate:
0%
Prepayment:
May be pre-paid in whole or in part at any time.
Tranche 3: DRLP
Amount: $404,000
Term/Amortization:
10 years. Interest only payments for the first two years, commencing August 1,
2008. No principal the first two years; thereafter thirty-one (31) principal quarterly payments of $5,700
each, with a final principal installment of all unpaid principal due at maturity.
Interest Rate:
Same as Tranche 1.
Prepayment:
May be pre-paid in whole or in part at any time.
Payment Dates:
Payments of principal and interest due on the first day of each August, November, February and
May, commencing August 1, 2008
Default Rate Interest:
5% above the otherwise applicable rate
Conditions Precedent to Acquisition Loan Closing:
1. Buyer shall provide Agency information demonstrating, to Agency’s satisfaction, Buyer’s
compliance with all requirements of the US Department of Housing and Urban Development for
its Section 108 and Brownfields Economic Development Initiative loan guarantee and grant
programs.
2. Receipt by Agency of the following:
a. Satisfactory evidence of the authority of Beam to enter into the transactions contemplated by
this term sheet.
Page - 35
b. Such documents, executed by such persons as Agency requires, which may include, without
limitation, loan agreements, notes, deeds of trust, security agreements, UCC financing statements,
guaranties, general and/or specific assignments of leases and rents, borrowing authorizations, and
subordination, attornment and estoppel agreements.
c. A commitment to issue a 2006 ALTA mortgagee's extended coverage title insurance policy,
including all endorsements required by Agency, in the full amount of the Loan, and issued by a
company acceptable to Agency, inuring Agency's first lien priority upon recording Agency's
security instruments, and showing only such encumbrances, easements, covenants, conditions,
restrictions, or exceptions which are acceptable to Agency.
d. Beam provides and the Agency approves any environmental studies or reports regarding
Beam’s Portland property which will be subject to a deed of trust securing the Loans.
e. The Agency receives evidence verifying that the following insurance is in effect: (a) fire
insurance with extended coverage and course of construction endorsements on the basis of
100 percent of full replacement cost of all improvements on the Property with a mortgagee clause
attached in favor of the Agency, (b) public liability insurance in amount of $2,000,000,
(c) worker's compensation insurance in amounts satisfactory to the Agency, and (d) any flood
insurance for the Property required by the Agency, together with any additional insurance
coverage required by the deed of trust or any other document securing the Loans.
f. The Agency receives evidence reasonably satisfactory to it that its security interest in the items
of personal property collateral relating to the property has been perfected and that the priority of
such security interest is senior to all other liens, security interests, and claims, except permitted
encumbrances.
g. If required by Agency or title insurer, two copies of an acceptable survey prepared and certified
by a registered land surveyor, which locates existing improvements, easements and
encroachments.
h. Beam provides such financial statements, credit reports, tax returns, and other financial
information regarding Beam and the property as Agency requires.
i. The opinion of counsel reasonably satisfactory to Agency covering such matters as Agency
requires, including without limitation an opinion addressing Beam’s due organization and valid
existence, authority, enforceability, no required consents, no litigation, no conflict with
agreements, etc., and such other matters as Agency may reasonably require.
j. The Property shall be in its current condition, and no part of the property shall have been
damaged by fire or other casualty or be the subject of any eminent domain or condemnation
proceedings.
k. Beam shall have paid to the Agency the ratable portion of all fees and charges charged the
[and all escrow and title charges
Agency in connection with the HUD Section 108 Loan
associated with the Loans, including title insurance premiums]
.
l. All representations and warranties included in the loan documents shall be true and correct as of
the date of the closing of the Loans.
m. Beam shall satisfy such requirements, provide such information and execute such documents
as Agency reasonably requires.
Representations and Warranties:
Standard for commercial real estate loans.
Page - 36
Covenants:
Standard for commercial real estate loans.
Collateral:
The Acquisition Loan will be secured by the Trust Deed. The lien of the Trust Deed shall, with respect
to the Property, take priority over any other debt incurred by Buyer relating to acquisition of the Property, if any, but
shall be subordinate to the Senior Loan on terms reasonably satisfactory to Agency.
Events of Default:
Standard for commercial real estate loans. Also, Borrower causes a default under the City’s
Section 108 Loan with HUD.
Page - 37
EXHIBIT E-2
CENTRE COURT CONSTRUCTION LOAN – LOAN TERMS
Borrower:
Beam Construction & Management, LLC
Aggregate Amount:
An amount not to exceed $6,500,000
Tranche 1: Section 108
Amount: $5,187,000
Term/Amortization:
10 years. Interest only payments for the first two years commencing on the first
payment date after Beam makes its first construction draw. Principal payments will commence on the
second anniversary of Beam making its first construction draw; thereafter thirty-one (31) principal
quarterly payments of $65,000 each, with a final principal installment of all unpaid principal due at
maturity.
Interest Rate:
Prior to Conversion by HUD of Section 108 Loan: Interest rate on Section 108 Loan (currently LIBOR +
20 bps, floating)
After Conversion by HUD of Section 108 Loan: Interest rate on Section 108 Loan (a fixed rate based on
market conditions when sold annually (traditionally lower yields than federal agency securities (ex. Fannie
Mae))
Prepayment:
No prepayment after conversion to fixed rate unless (i) permitted by HUD under the
corresponding Section 108 loan to the City, which allows for defeasance, or (ii) unless consented by
Agency in its sole and absolute discretion. Prior to conversion may be pre-paid in whole or in part at any
time.
Beam shall pay to the Agency the ratable portion of any fees and charges charged to or incurred by the
Agency or the City in connection with the City’s Section 108 Loan from HUD, including fiscal agent
and/or trustee’s fees and conversion fees.
Tranche 2: BEDI
Amount: $1,313,000
Term/Amortization:
The earlier of (i) 50 years or (ii) the date on which Beam achieves a 13% rate of
return on capital, to be measured according to a mutually agreed formula. All unpaid principal due at
maturity. Tranche 2 may be subject to debt forgiveness upon sale of the Property if Beam fails to achieve a
13% rate of return on capital. Pursuant to Section 13.3.1 of the Agreement, the payment of the deferred
development fee is subordinated to the repayment of Tranche 2.
Interest Rate:
0%
Prepayment:
May be pre-paid in whole or in part at any time.
Payment Dates:
Payments of principal and interest due on the first day of each August, November, February and
May.
Default Rate Interest:
5% above the otherwise applicable rate
Conditions Precedent to Centre Court/ Vacant Lot Construction Loan Closing:
Page - 38
1. Buyer shall provide Agency information demonstrating, to Agency’s satisfaction, Buyer’s
compliance with all requirements of the US Department of Housing and Urban Development for
its Section 108 and Brownfields Economic Development Initiative loan guarantee and grant
programs.
2. Buyer shall execute a memorandum of understanding with the Oregon Employment Department
for the outreach and recruitment of low to moderate income persons for the permanent jobs made
available by the Project.
3. Receipt by Agency of the following:
a. Satisfactory evidence of the authority of Beam to enter into the transactions contemplated by
this Commitment.
b. Such documents, executed by such persons as Agency requires, which may include, without
limitation, loan agreements, notes, deeds of trust, security agreements, UCC financing statements,
guaranties, general and/or specific assignments of leases and rents, borrowing authorizations, and
subordination, attornment and estoppel agreements.
c. A commitment to issue a 2006 ALTA mortgagee's extended coverage title insurance policy,
including all endorsements required by Agency, in the full amount of the Loan, and issued by a
company acceptable to Agency, inuring Agency's second lien priority upon recording Agency's
security instruments, and showing only such encumbrances, easements, covenants, conditions,
restrictions, or exceptions which are acceptable to Agency.
d. The Agency receives evidence verifying that the following insurance is in effect: (a) fire
insurance with extended coverage and course of construction endorsements on the basis of
100 percent of full replacement cost of all improvements on the Property with a mortgagee clause
attached in favor of the Agency, (b) public liability insurance in amount of $2,000,000,
(c) worker's compensation insurance in amounts satisfactory to the Agency, and (d) any flood
insurance for the Property required by the Agency, together with any additional insurance
coverage required by the deed of trust or any other document securing the Loans.
e. Beam provides copies of all of the permits and licenses that are required by applicable laws and
orders to rehabilitate the project and any other evidence reasonably required by the Agency to
verify that the project will comply with all applicable laws and orders necessary for the lawful
occupancy, use, and operation of the Project for its intended purposes when the rehabilitation work
is completed.
f. If required by Agency or title insurer, two copies of an acceptable survey prepared and certified
by a registered land surveyor, which locates existing improvements, easements and
encroachments.
g. The Agency approves in its reasonable discretion the architect selected by Beam to prepare the
plans and specifications for the project and the contractor selected by Beam to perform the
rehabilitation work for the project.
h. Beam provides and the Agency approves copies of the construction documents (including the
hard and soft costs for the project and the construction/rehabilitation schedule) for the work to be
done using proceeds of the Loans for the project.
i. Beam provides and the Agency approves a guaranteed maximum price contract from the
contractor listing the subcontractors and material suppliers (identified on such list by name,
address, phone number and estimated subcontract amount) who will perform the rehabilitation
work.
Page - 39
j. Beam provides copies of all of the permits and licenses that are required by applicable laws and
orders to rehabilitate the project and any other evidence reasonably required by the Agency to
verify that the project will comply with all applicable laws and orders necessary for the lawful
occupancy, use, and operation of the Project for its intended purposes when the rehabilitation work
is completed.
k. Such financial statements, credit reports, tax returns, and other financial information regarding
Beam and the Property as Agency requires.
l. The opinion of counsel reasonably satisfactory to Agency covering such matters as Agency
requires, which may include without limitation an opinion addressing Beam’s due organization
and valid existence, authority, enforceability, no required consents, no litigation, no conflict with
agreements, etc., and such other matters as Agency may reasonably require.
m. Leases. (1) Copies of all leases with a term in excess of one year covering all or any part of
the Property, each of which shall be satisfactory to Agency in all respects, (2) subordination,
attornment and estoppel agreements signed by Beam and each lessee, subordinating all leases to
Agency's deeds of trust and (3) general and/or specific assignments of all leases and rents.
n. The Property shall be in its current condition, and no part of the Property shall have been
damaged by fire or other casualty or be the subject of any eminent domain or condemnation
proceedings.
o. Beam shall have paid to the Agency the ratable portion of all fees and charges charged the
Agency in connection with the HUD Section 108 Loan and all escrow and title charges associated
with the Loans, including title insurance premiums.
p. All representations and warranties included in the loan documents shall be true and correct as
of the date of the closing of the loan.
q. Beam shall satisfy such requirements, provide such information and execute such documents as
Agency reasonably requires.
Representations and Warranties:
Standard for commercial real estate construction loans.
Covenants:
Standard for commercial real estate construction loans.
Collateral:
The Centre Court/Vacant Lot Construction Loan will be secured by the Trust Deed. Upon funding of
the Senior Loan, the Portland Property shall be released from the lien of the Trust Deed. The lien of the Trust
Deed shall take priority over any other debt incurred by Buyer relating to acquisition of the Property or construction
of the Project, if any, but shall be subordinate to the Senior Loan on terms reasonably satisfactory to Agency.
Events of Default:
Standard for commercial real estate construction loans. Also, Borrower causes a default under
the City’s Section 108 Loan with HUD.
Page - 40
EXHIBIT E-3
EARNEST MONEY LOAN NOTE AND TRUST DEED
EARNEST MONEY LOAN NOTE
$470,000 Eugene, Oregon
May 22, 2008
BEAM CONSTRUCTION & MANAGEMENT, LLC
FOR VALUE RECEIVED, the undersigned, , an Oregon
limited liability company ("Borrower") whose address is 1001 SE Water Avenue, #120, Portland, Oregon 97214,
THE URBAN RENEWAL AGENCY OF THE CITY OF EUGENE,
hereby promises to pay to the order of a
municipal corporation of the State of Oregon, ("Lender"), whose address is 777 Pearl Street, Eugene, Oregon
97401, or its assignee, the principal sum of FOUR HUNDRED SEVENTY THOUSAND and NO/100 DOLLARS
($470,000), together with interest thereon as hereinafter provided.
1.PAYMENTS
No payments shall be due hereunder until the Maturity Date.
2.MATURITY DATE
The unpaid principal balance, accrued but unpaid interest thereon, and other amounts remaining due under
this Note shall be due and payable on the date (the “Maturity Date”) which is the earlier of: (i) July 7, 2008; (ii) the
date of the closing of Borrower’s acquisition of real property contemplated by the Purchase and Sale Agreement
between Borrower and Lender dated as of even date herewith; and (iii) the acceleration of Borrower’s obligations
hereunder pursuant to paragraph 8 of this Note.
3.PREPAYMENT
This Note may be prepaid at any time without premium or penalty.
4.PLACE OF PAYMENT
All payments shall be made to Lender at P.O. Box 1967, Eugene, Oregon 97440, Attn: Finance Department, or such
other place as Lender may from time to time designate in writing.
5.SECURITY
This Note is secured by a Deed of Trust, Security Agreement, Assignment of Leases and Rents, and Fixture Filing
("Deed of Trust") on certain real and personal property owned by [Historic Fairmount, LLC (“Fairmount”)] and
located in Multnomah County, Oregon dated as of even date herewith. The terms of the Deed of Trust are
incorporated herein and made a part hereof by reference. [This Note is also secured by membership interests in
Fairmount pledged by Bradley and Elizabeth Malsin pursuant to a Membership Pledge Agreement dated as of even
date herewith.]
6.DEFAULT
Each of the following shall be an “Event of Default” hereunder: (a) a default in the payment of any amount due
hereunder on the due date, or (ii) a default in the performance of any non-monetary obligation or non-monetary
covenant contained herein or in the Deed of Trust, and such default or breach is not cured within any applicable cure
period.
7.ACCELERATION; REMEDIES
If an Event of Default exists, at the election of Lender, without further notice, the unpaid principal sum, together
with accrued and unpaid interest thereon evidenced by this Note, shall at once become due and payable and shall
bear interest at the rate of twelve percent (12%) per annum. Without limiting the foregoing right and without
limiting any other rights and remedies of Lender at law or in equity, Lender is also entitled to the rights and
Page - 41
remedies provided for in the Deed of Trust and may enforce the covenants, agreements and undertakings of
Borrower contained therein and may exercise the remedies provided for thereby or otherwise available in respect
thereto, all in accordance with the terms hereof.
8.WAIVERS
Except as herein provided, Borrower and all others who may become liable for all or part of the principal balance
hereof or for any obligations of Borrower to Lender or the holder hereof (a) jointly and severally, forever waive
presentment, protest and demand, notice of protest, demand and dishonor and non-payment of this Note, and all
other notices in connection with the delivery, acceptance, performance, default or enforcement of the payment of
this Note, (b) agree that the time of payment of the debt or any part thereof may be extended from time to time
without modifying or releasing the lien of the Deed of Trust or the liability of Borrower or any other such parties,
the right of recourse against Borrower and such parties being hereby reserved by Lender; and (c) agree that time is
of the essence. Borrower agrees to pay all costs of collection when incurred, whether suit be brought or not,
including reasonable attorneys' fees and costs of suit and preparation therefore. If suit is brought, Borrower shall
pay reasonable attorney fees incurred at trial, on appeal, or in any bankruptcy proceeding if Lender is the prevailing
or successful party as the case may be. Borrower further agrees to perform and comply with each of the covenants,
conditions, provisions and agreements of Borrower contained in this Note and the Deed of Trust. It is expressly
agreed by Borrower that no extensions of time for the payment of this Note, nor the failure on the part of Lender to
exercise any of its rights hereunder, shall operate to release, discharge, modify, change or affect the original liability
under this Note or the Deed of Trust, either in whole or in part.
9.COMPLIANCE
Borrower agrees that (1) this instrument and the rights and obligations of all parties hereunder shall be governed by
and construed under the laws of the State of Oregon, and (2) the transaction evidenced by this Note is an exempted
transaction under the Truth-In-Lending Act, 15 U.S.C. Section 1601, et. seq. If any provision of this Note shall be
illegal or unenforceable, such provision shall be deemed canceled to the same extent as though it never had appeared
therein, but the remaining provisions shall not be affected thereby.
10.NOTICES
Whenever Lender or Borrower desires to give any notice to the other, it shall be sufficient for all purposes if such
notice is personally delivered or sent by registered or certified United States mail, postage prepaid, addressed to the
intended recipient at the address listed at the beginning of this Note for Borrower, or such other address as hereafter
specified in writing, and for Lender at the address listed at the beginning of this Note, or such other address as
hereafter specified in writing.
11.INTEREST NOT TO EXCEED MAXIMUM ALLOWED BY LAW
If from any circumstances whatsoever, by reason of acceleration or otherwise, the fulfillment of any provision of
this Note involves transcending the limit of validity prescribed by any applicable usury statute or any other
applicable law, with regard to obligations of like character and amount, then the obligations to be fulfilled will be
reduced to the limit of such validity as provided in such statute or law, so that in no event shall any exaction be
possible under this Note in excess of the limit of such validity.
12.SUCCESSORS AND ASSIGNS
All rights, powers, privileges and immunities herein granted to Lender shall extend to its successors and assigns and
any other legal holder of this Note, with full right by Lender to assign and/or sell same.
13.WAIVER OF JURY TRIAL
BORROWER, BY SIGNING BELOW, AND LENDER, BY ACCEPTING THIS NOTE, HEREBY WAIVE
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO
THIS NOTE AND TO THE DEED OF TRUST, THE OBLIGATIONS HEREUNDER OR THEREUNDER,
ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY TRANSACTION ARISING
THEREFROM OR CONNECTED THERETO. BORROWER AND LENDER EACH REPRESENTS TO
THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.
Page - 42
14.STATUTORY NOTICE
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES, AND COMMITMENTS MADE BY
LENDER, CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR
PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION, AND BE SIGNED BY LENDER TO
BE ENFORCEABLE.
BORROWER
:
BEAM CONSTRUCTION & MANAGEMENT, LLC
, an
Oregon limited liability company
By:_______________________________
Name:
Title:
DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, AND
FIXTURE FILING
This DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, AND
nd
THE URBAN
FIXTURE FILING (this "Deed of Trust"), made as of this 22 day of May, 2008, between
RENEWAL AGENCY OF THE CITY OF EUGENE,
a municipal corporation of the State of Oregon(hereinafter
CASCADE TITLE
referred to as "Beneficiary"), whose address is 777 Pearl Street, Eugene, Oregon 97401,
COMPANY
, whose address is 811 Willamette Street, Eugene, Oregon 97401 (hereinafter referred to as "Trustee"),
[HISTORIC FAIRMOUNT, LLC]
and , an Oregon limited liability company (hereinafter referred to as "Grantor"),
whose address is 1001 SE Water Avenue, #120, Portland, Oregon 97214.
W I T N E S S E T H:
WHEREAS
, Beneficiary has this date made a loan to Grantor (the "Loan"), which Loan is evidenced by a
Promissory Note in the principal sum of $470,000 (the "Note"), executed this date by Grantor and delivered to
Beneficiary, the terms of the Note providing that the Note shall be paid in full on or before July 7, 2008. Reference
to said Note is hereby made to the same extent as if it is set forth in full herein. Wherever the term "Loan
Documents" is used herein, it shall mean the Note, this Deed of Trust, and all other documents executed by Grantor
or any guarantor in connection with the Loan.
NOW, THEREFORE
, to secure the payment, performance and observance by Grantor of all of the covenants and
conditions in the Note and any extensions or renewals thereof, as it may be modified, amended or supplemented at
any time and from time to time, and in this Deed of Trust and the Loan Documents, and in order to charge the
properties, interests and rights hereinafter described with such payment, performance and observance, Grantor does
hereby execute and deliver this Deed of Trust, and hereby grants, bargains, sells, conveys in trust with power of sale,
assigns, transfers, hypothecates, pledges, sets over, and grants a security interest unto Trustee for the benefit of
Beneficiary, its successors and assigns forever, all of the estate, title and interest of Grantor in and to the following:
1. The land described in Exhibit A attached hereto;
2. All buildings, structures, improvements, privileges and appurtenances belonging thereto now existing or
hereafter constructed thereon;
3. All easements, rights of way, streets, ways, alleys, sewer lines, water lines, water rights, and all estates,
rights, titles, interests, privileges, hereditaments, access rights and appurtenances whatsoever in any way relating to
or appertaining to any of the property described in Exhibit A, or which hereafter shall in any way belong, relate or
be appurtenant thereto, whether now owned or hereafter acquired by Grantor, and the reversion or reversions,
Page - 43
remainder and remainders, rents, issues, profits thereof, and all the estate, right, title, interest, property, possession,
claim and demand whatsoever at law, as well as in equity, of Grantor in and to the same;
(Hereinafter the properties contained in Paragraphs 1 through 3 shall collectively be referred to as the "Premises");
4. All existing leases of all or any portion of the Premises, together with any and all future leases hereinafter
entered into by any lessor or lessee affecting all or any portion of the Premises, and all guaranties, amendments,
extensions, modifications and renewals of such leases and any of them, all of which are hereinafter called the
"Leases," and all rents, receipts, revenues, awards, income and profits (collectively referred to as "Rents") which
may now or hereafter be or become due or owing under the Leases, and any of them, on account of the use of the
Premises or otherwise arising out of or pertaining to the Premises.
5. All furniture, fixtures, appliances, machinery, equipment, construction and building materials, and all
personal property used in the maintenance or operation of the Premises and any replacements and proceeds and
substitutions thereof, owned by Grantor and now located thereon, attached to, or hereafter acquired or located
thereon or attached thereto, and all lighting, heating, cooking, ventilating, air conditioning, incinerating, sprinkling
and plumbing systems and all pipes, wires, attached fixtures and apparatus forming a part of or used in connection
therewith, and all cooking appliances, cabinets, windows, doors and all wall to wall carpeting located thereon;
6. All judgments, awards of damages and settlements hereafter made resulting from condemnation
proceedings or the taking of the Premises or any part thereof under the power of eminent domain, or for any damage
(whether caused by such taking or otherwise) to the Premises or the improvements thereon or any part thereof, or to
any rights appurtenant thereto, including any award for change of grade or streets;
7. All inventory, contract rights, cash (including the "Funds," as such term is defined in Section 1.3 hereof),
proceeds, accounts receivable, insurance proceeds, deposit and other accounts, logos, trademarks, and all trade name
agreements, and all replacements and proceeds relating thereto now owned or hereafter acquired by Grantor, in each
case in connection with the Premises, including but not limited to all revenues and credit card receipts collected
from guest rooms, meeting rooms, recreational facilities, all receivables, customer obligations, installment payment
obligations, deposits securing reservations, license, lease and concession fees and vending machine sales.
8. All documents, instruments, chattel paper, claims, deposits and general intangibles, as the foregoing terms
are defined in the Uniform Commercial Code, and all contract rights, franchises, property management agreements,
books, records, plans, specifications, permits, franchise agreements, licenses, approvals, actions and telephone
numbers, which now or hereafter relate to, are derived from or used in connection with the Premises or in the use,
operation, maintenance, occupancy or enjoyment thereof or the conduct of any business or activities thereon.
9. All contracts and general intangibles relating to construction of improvements at the Premises, including
without limitation any and all construction contracts, architect contracts, and plans and specifications created
thereunder, development contracts, payment and/or performance bonds, and claims for defective materials or
workmanship, including any judgments and awards arising from such claims.
(Hereinafter the items set forth in Paragraphs 5, 6, 7, 8, and 9 shall collectively be referred to as the "Collateral.")
TO HAVE AND TO HOLD
the Premises and Collateral, and all other properties hereinabove granted to
Beneficiary, its successors and assigns, to its own proper use and benefit forever, subject however to the terms and
conditions herein.
PROVIDED, HOWEVER
, that these presents are upon the condition that, if Grantor shall pay or cause to be paid
to Beneficiary the principal, interest and other charges provided in the Note and this Deed of Trust and the other
Loan Documents, at the times and in the manner stipulated therein and herein, all without any deduction or credit for
taxes or other similar charges paid by Grantor, and shall keep, perform and observe all the covenants and promises
in the Note and in this Deed of Trust expressed and the other Loan Documents to be kept, performed and observed,
then the foregoing conveyance and transfer of the Premises and the Collateral shall cease, determine and be void but
shall otherwise remain in full force and effect.
- 44 -
AND
, Grantor covenants and agrees with Beneficiary that:
ARTICLE I
PARTICULAR COVENANTS OF GRANTOR
1.1Performance of Note and Deed of Trust and the Other Loan Documents.
Grantor will perform, observe and comply with all provisions of the Note and this Deed of Trust
and the other Loan Documents secured hereby and will duly and timely pay, without relief from
any valuation or appraisement law, to Beneficiary the sum of money expressed in the Note with
interest thereon and all other sums required to be paid by Grantor pursuant to the provisions of
the Note and this Deed of Trust and the other Loan Documents, all without any deductions or
credit for taxes or other similar charges paid by Grantor.
1.2Title Warranties and Representations.
Grantor hereby covenants with and
represents and warrants to Beneficiary that Grantor is indefeasibly seized of the Premises in fee
simple; that Grantor has full power and lawful right to convey the same as aforesaid; that it shall
be lawful for said Beneficiary at all times peaceably and quietly to enter upon, hold, occupy and
enjoy the Premises and every part thereof; that said Grantor will make such further assurances to
perfect the fee simple title to the Premises and Beneficiary's lien thereon, as may be reasonably
required; that the Premises is not subject to any liens in favor of any private or governmental
entity; and that Grantor does hereby fully warrant the title to the Premises and every part thereof
and will defend the same against the claims (whether meritorius or non-meritorius) of all persons
whomsoever, except for those matters set forth on Exhibit B attached hereto ("Permitted
Exceptions").
1.3Real Estate Taxes, Assessments and Personal Property Taxes.
(a)On and after the occurrence of a default hereunder, or under the Note or
any other Loan Documents, Grantor shall upon demand pay to Beneficiary on the day monthly
installments of interest or monthly installments of principal and interest are payable under the
Note, until the Loan Documents are paid in full, a sum (herein "Funds") equal to one-twelfth of
the yearly real estate taxes and assessments which may attain priority over this Deed of Trust, all
as reasonably estimated initially and from time to time by Beneficiary on the basis of
assessments and bills and reasonable estimates thereof. The Funds shall be held by Beneficiary
and Beneficiary shall apply the Funds to pay said taxes and assessments as and when they shall
be due and payable. No interest shall be paid on the Funds. The Funds are pledged as additional
security for the sums secured by this Deed of Trust. If the amount of the Funds held by
Beneficiary shall not be sufficient to pay taxes and assessments as they fall due, Grantor shall
pay to Beneficiary any amount necessary to make up the deficiency within 15 days from the date
notice is mailed by Beneficiary to Grantor requesting payment thereof. Upon payment in full of
the Note and all of the other Loan Documents, all Funds then held by Beneficiary shall be
returned to Grantor.
(b)Except as provided in (a) above, Grantor shall pay when due according to
law, all taxes, assessments and other charges which are now due or may hereafter be imposed or
assessed against the Premises and the Collateral. Upon reasonable request, Grantor will
promptly send to Beneficiary receipts for the payment of all such taxes, assessments and other
charges. Upon the failure of Grantor to promptly pay such taxes, assessments and other charges,
- 45 -
Beneficiary shall have the option to pay and discharge same without notice to Grantor. Any
sums so expended by Beneficiary shall at once become an indebtedness of Grantor and shall be
due and payable by Grantor with interest as provided in the Note after default, which sums shall
thereupon become secured by this Deed of Trust.
1.4Other Taxes, Liens and Utility Charges.
Grantor will pay promptly, when and
as due, all charges for utilities, whether public or private, and will promptly exhibit to
Beneficiary, upon reasonable request, receipts for the payment of all taxes, assessments, water
and sewer charges, dues, fines and impositions of every nature whatsoever imposed, levied or
assessed or to be imposed, levied or assessed upon or against the Premises and the Collateral, or
any part thereof, or upon the interest of Grantor in the Premises (other than any of the same for
which provision has been made in Section 1.3 of this Article I), as well as all income taxes,
assessments and other governmental charges lawfully levied and imposed by the United States of
America or any State, county, municipality or other taxing authority upon Grantor in respect of
the Premises and the Collateral or any part thereof, or any charge which, if unpaid, would
become a lien or charge upon the Premises and the Collateral or any part thereof. Grantor will
not suffer any mechanic's, laborer's, statutory or other liens, or any mortgage or other lien which
might or could be prior to, equal to, or subordinate to the lien of this Deed of Trust to be created
or to remain outstanding upon the Premises and the Collateral or any part thereof, other than the
Permitted Exceptions. Notwithstanding the foregoing, Grantor may withhold payment of any
tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so
long as Beneficiary's interest in the Premises and Collateral is not jeopardized. If a lien arises or
is filed, Grantor shall within 15 days after the lien arises or, if a lien is filed, within 15 days after
Grantor has notice of the filing, secure the discharge of the lien or deposit with Beneficiary cash
or a sufficient corporate surety bond or other security satisfactory to Beneficiary in an amount
sufficient to discharge the lien plus any costs, attorney fees, or other charges that could accrue as
a result of a foreclosure or sale under the lien.
1.5Insurance.
(a)Grantor will, at its expense, keep the Premises and the Collateral owned
by it, adequately insured at all times against such risks as are customarily insured against by
entities engaged in similar businesses. Without limiting the foregoing, Grantor will (i) keep the
Premises and the Collateral fully insured against fire, theft and extended coverage risks (all
hazards included within the term "all risks coverage"), and if the Premises are determined to be
in a flood plain or flood prone area, flood insurance, in an amount sufficient to prevent Grantor
or Beneficiary from becoming a co-insurer of any partial loss under applicable insurance policies
and in any event not less than 100 percent of the full replacement value (actual replacement
value without deduction for physical depreciation, but exclusive of the cost of excavation,
footings, foundation and underground utilities) thereof; provided, however, in no event less than
the then outstanding principal amount of the Note; (ii) maintain all such workers' compensation
or similar insurance as may be required by law, (iii) maintain rental interruption insurance
coverage equal to or greater than six months of income from the Premises and Collateral;
(iv) maintain personal property insurance in an amount as Beneficiary shall reasonably request;
and (v) maintain general public liability insurance in respect of the Premises and the Collateral
against claims for personal and bodily injury, death or property damage occurring, in or about
the Premises and the Collateral and liability insurance covering the operations of Grantor
- 46 -
conducted on or about the Premises and the Collateral in an amount as is reasonably acceptable
to Beneficiary. All policies of insurance shall be placed with insurance companies satisfactory to
Beneficiary and shall have attached thereto the standard form of Beneficiary clause, without
contribution, in favor of Beneficiary and be delivered to and be held by said Beneficiary, which
policy shall provide that no cancellation, modification, termination or lapse thereof shall be
effective until at least 30 days after receipt by Beneficiary of written notice thereof. This Deed
of Trust shall operate as an assignment to Beneficiary of said policies, whether delivered or not.
(b)Grantor shall provide evidence of fully paid insurance at least 15 days
prior to the expiration date of any insurance policy. Upon the failure of Grantor to provide the
aforesaid insurance, Beneficiary shall have the option (but not the duty) to procure and maintain
such insurance or a Beneficiary interest policy without notice to Grantor. Any sums so expended
by Beneficiary shall at once become indebtedness owing from Grantor to Beneficiary and shall
immediately become due and payable by Grantor with interest thereon, to the extent legally
enforceable. The following notice is given pursuant to ORS 746.201:
WARNING
Unless Grantor provides Beneficiary with evidence of the insurance coverage as required herein,
Beneficiary may purchase insurance at Grantor's expense to protect Beneficiary's interest. This
insurance may, but need not, also protect Grantor's interest. If the collateral becomes damaged,
the coverage Beneficiary purchases may not pay any claim Grantor makes or any claim made
against Grantor. Grantor may later cancel this coverage by providing evidence that Grantor has
obtained property coverage elsewhere.
Grantor is responsible for the cost of any insurance purchased by Beneficiary. The cost of this
insurance may be added to the indebtedness secured hereby. If the cost is added to the
indebtedness secured hereby, the interest rate on the indebtedness secured hereby will apply to this
added amount. The effective date of coverage may be the date the prior coverage lapsed or the
date Grantor failed to provide proof of coverage.
The coverage Beneficiary purchases may be considerably more expensive than insurance Grantor
can obtain on Grantor's own and may not satisfy any need for property damage coverage or any
mandatory liability insurance requirements imposed by applicable law.
If Beneficiary acquires title to the Premises by foreclosure proceedings or otherwise, any unearned premiums on any
hazard insurance covering the Premises are hereby assigned to and shall belong to Beneficiary. If at any time during
the term of this Deed of Trust, any insurance policies shall be cancelled and returned premiums available, these
returned premiums shall be retained by Beneficiary to the extent required to reimburse Beneficiary for any sums
advanced by Beneficiary to purchase insurance required by this section and the balance may be used by Beneficiary
to satisfy any other defaults by Grantor hereunder. Any rights of Beneficiary to any insurance proceeds shall in no
way be affected or impaired by reason of the fact that Beneficiary may have instituted foreclosure proceedings
hereunder. Upon default hereunder and demand by Beneficiary, Grantor shall pay to Beneficiary an amount each
month equal to one-twelfth of the annual premium due for all such insurance. Such payment shall be added to the
Funds (as provided in Section 1.3 hereof) and be applied to pay such insurance premiums when they shall become
due and payable.
1.6Distribution of Insurance Proceeds.
(a)In the event of either a Partial Loss or Total Loss, as defined below, all
insurance proceeds and rights of action related to the loss are hereby assigned to Beneficiary.
Grantor agrees to execute such further assignments to such proceeds and rights of action as
- 47 -
Beneficiary may require. Grantor shall give immediate written notice to Beneficiary, and
Beneficiary may, but is not obligated to, make proof of loss. At its option, in its own name,
Beneficiary shall be entitled to commence, appear in and prosecute any action or proceedings or
to make any compromise or settlement in connection with any such loss, which shall be binding
on Grantor and Beneficiary jointly. Each insurance carrier is hereby authorized and directed to
make payment for such loss to Grantor. Beneficiary's right to payment of insurance proceeds
shall exist whether or not any such loss results in any impairment to the security of Beneficiary.
The payment to Beneficiary of such insurance proceeds shall not cure or waive any default or
notice of default hereunder. Notwithstanding such Total Loss or Partial Loss, all payments under
the Note and the other Loan Documents shall be made without reduction, modification or
interruption and all applicable terms and conditions of this Deed of Trust shall be applicable to
Grantor without modification or interruption.
(b)In the event of any loss of 65 percent or more of the full replacement value
of the then Premises and Collateral not previously released from this Deed of Trust (a "Total
Loss"), the proceeds received of any policy of insurance shall be paid directly to Beneficiary and
applied against the outstanding balance of principal, interest and other charges owing (regardless
of whether then payable) under the Note, the other Loan Documents and this Deed of Trust.
Should said proceeds exceed such balance owing, any such excess shall be paid to Grantor.
Should said proceeds be less than such balance owing, the deficiency shall be paid by Grantor to
Beneficiary within 60 days of demand by Beneficiary.
(c)In the event of any loss under any of said policies of insurance covering
the Premises and the Collateral where such loss is less than 65 percent of the full replacement
value of the then Premises and Collateral not previously released from this Deed of Trust (a
"Partial Loss"), the proceeds received from any policy of insurance shall be paid directly to
Beneficiary and applied against the outstanding balance of principal, interest and other charges
owing (regardless of whether then payable) under the Note, the other Loan Documents and this
Deed of Trust, provided, however, if (i) Grantor desires to restore the Premises and Collateral to
its prior good condition, (ii) Grantor is not in default hereunder, (iii) said amount owing will not
be more than 75 percent of the value of the Premises and Collateral as restored (as may be
determined by independent appraisal satisfactory to Beneficiary completed at Grantor's expense),
and (iv) any funds in excess of insurance proceeds necessary to complete the restoration work in
accordance with plans and specifications and budgets as approved by Beneficiary shall have
been deposited by Grantor with Beneficiary, then the insurance proceeds shall be held by
Beneficiary for restoration of the Premises and the Collateral. Beneficiary shall disburse so
much of the proceeds to Grantor as restoration progresses, equal to the cost of said restoration,
and subject to reasonable conditions, including the right of Beneficiary to withhold up to
10 percent of said amount until completion, and the expiration of the period within which
mechanic's and materialmen's liens may be filed or until the receipt of satisfactory evidence that
no liens exist. Should the insurance proceeds be less than the sum required to complete said
restoration, Grantor shall deposit the difference with Beneficiary, and its failure to do so shall
constitute default hereunder. Upon payment of such sum to Beneficiary, the same shall be held
by Beneficiary in a mutually acceptable interest-bearing account until disbursement. Should said
proceeds, including the interest payable thereon, exceed the cost of completing said restoration,
any balance remaining shall be paid to Grantor. Grantor shall pay to Beneficiary any reasonable
- 48 -
expenses incurred by Beneficiary in making such disbursements and reasonable building
inspections.
1.7Maintenance, Compliance With Law, Alterations.
Grantor shall keep the
Premises and the Collateral in good condition and repair and shall comply with all laws,
ordinances, and regulations of all public authorities relating to the Premises and the Collateral,
comply with all easements, declarations, covenants and any other private agreements imposing
duties or obligations on owners or occupants of the Premises, and shall not suffer any waste to be
committed thereon nor remove or demolish any building. Grantor shall permit Beneficiary to
enter upon the Premises and inspect the Premises and Collateral at all reasonable hours and
without prior notice. Grantor shall not cause or permit any improvements to be materially
altered or changed without the prior written consent of Beneficiary to the proposed action, as
well as Beneficiary's prior written consent to the plans and specifications relating thereto.
Grantor shall not consent to any subdivision or partition of the Premises or any zoning change or
variance affecting the Premises without the prior written consent of Beneficiary.
1.8Condemnation.
In the event any of the Premises or the Collateral, or any part
thereof, shall be damaged or taken by reason of any public improvement or condemnation
proceedings, Grantor agrees that such proceeds or awards shall be payable to Beneficiary to be
applied against the outstanding balance of principal, interest and other charges owing (regardless
of whether then payable) under the Note, the other Loan Documents and this Deed of Trust.
Should said proceeds exceed said balance owing, any such excess shall be paid to Grantor. All
such proceeds and rights of action are hereby assigned to Beneficiary, and Beneficiary shall be
entitled, along with Grantor, to commence, appear in and prosecute any action or proceedings or
to make any compromise or settlement in connection with any such taking or damage. Grantor
agrees to execute such further assignments of any such proceeds and rights of action as
Beneficiary may require.
1.9Protection of Premises and Collateral.
Grantor will from time to time execute
and deliver all such supplements and amendments hereto and other instruments, and will take
such other action, as Beneficiary reasonably requests and reasonably deems necessary or
advisable to (a) grant to Beneficiary all of the Premises and the Collateral, as security;
(b) maintain or preserve the lien of the Deed of Trust or carry out more effectively the purposes
hereof; and (c) preserve and defend title to the Premises and the Collateral and the rights of
Beneficiary therein against the claims of all persons and parties.
1.10Expenses.
Grantor agrees to pay or reimburse Beneficiary, upon demand
therefor, for all reasonable attorneys' fees, costs and expenses incurred by Beneficiary in any
suit, action, legal proceeding or dispute of any kind in which Beneficiary is made a party or
appears as a party plaintiff or defendant, affecting the indebtedness secured hereby, this Deed of
Trust or the interest created herein, or the Premises, including, but not limited to any action to
protect the security hereof; and any such amount paid by Beneficiary shall be added to the
indebtedness secured by the lien of the Deed of Trust.
1.11Books, Records, Accounts and Annual Reports.
Grantor shall keep and
maintain proper and adequate books, records and accounts reflecting all items of income and
expense, including all supporting facts relating to the operation of the Premises and the
- 49 -
Collateral. Beneficiary shall have the right from time to time, at all times during normal business
hours, to examine all such records, books and accounts on the Premises, or at such other place or
with such other person or entity maintaining such books, records and accounts and to make
copies or abstracts thereof as Beneficiary shall desire. With respect to the Premises and the
Collateral, Grantor will, upon Beneficiary's request, from time to time furnish to Beneficiary
operating statements, rent rolls and reports in form and content reasonably requested by
Beneficiary. Grantor shall furnish Beneficiary with such other financial information concerning
it as Beneficiary may reasonably request. All such statements shall be in form satisfactory to
Beneficiary, and shall be prepared on a basis consistent with prior years. All such reports
described in this Section 1.11 shall be certified correct by such party reasonably designated by
Beneficiary.
1.12Additional Indebtedness.
Grantor agrees to pay or reimburse Beneficiary, upon
demand therefor, for any and all losses, damages, costs, expenses, fees, duties, taxes (except
Federal income taxes), penalties, assessments of other charges (hereinafter referred to as
"Liabilities") at any time suffered by, imposed upon, assessed or levied against the Premises or
Beneficiary by any governmental authority or agency relating to, arising from or in connection
with the execution and delivery of the Note and the recording of this Deed of Trust, including,
but not limited to, liabilities arising from any applicable law or statute relating to the making of
the Loan, the perfection of the security documents or the enforcement thereof. Any such liability
so incurred or paid by Beneficiary shall constitute an additional indebtedness secured by this
Deed of Trust.
1.13Transfer.
Grantor shall not make, create or suffer to be made or created, any
sale, transfer, conveyance, or lease (except as permitted in Article III hereof) of the Premises,
any portion thereof, or any interest therein. Any change whatsoever in the legal or beneficial
ownership of Grantor which results in a change in the identity of the person or persons or entity
or entities having a direct or indirect controlling interest in Grantor shall not be made, created or
suffered. The execution and delivery by Grantor of any joint venture agreement, partnership
agreement, declaration of trust, option agreement, or other instrument whereunder any other
person or entity may become entitled, directly or indirectly, to the possession or enjoyment of the
Premises, or the income or other benefits derived or to be derived therefrom, shall in each case
be deemed to be a conveyance of Grantor's interest in the Premises for the purposes of this
section.
1.14Environmental Matters.
(a)Grantor hereby represents and warrants that, to the best of Grantor's
knowledge, (i) the Premises presently complies with, in all material respects, all applicable
federal, state or local environmental, health and safety statutes and regulations with which non-
compliance would have material adverse affect on the Premises; (ii) the Premises is not subject
to any judicial or administrative proceeding alleging the violation of any federal, state or local
environmental, health or safety statute or regulation, which violation would have a material
adverse affect on the Premises; (iii) the Premises is not the subject of a federal or state
investigation regarding the need for any remedial action to respond to a release of any hazardous
or toxic wastes, substance or constituent, or other substance into the environment which remedial
action would have a material adverse affect on the Premises; (iv) Grantor has not filed any notice
- 50 -
under any federal or state law indicating past or present treatment, storage or disposal of a
hazardous waste, or reporting a spill or release of a hazardous or toxic waste, substance or
constituent, or other substance into the environment; (v) hazardous waste or substance has not
been disposed of by placing it in or on the ground of the Premises; and (vi) there are no
underground storage tanks or surface impoundments on the Premises.
(b)Promptly after learning of the occurrence of any of the following, Grantor
shall give Beneficiary oral and written notice thereof, describing the same and the steps being
taken by Grantor with respect thereto: (i) the happening of any event involving the spill, release,
leak, seepage, discharge or cleanup of any hazardous or toxic waste, substance or constituent;
(ii) any litigation, arbitration proceeding, or governmental proceeding arising from an
environmental accident; (iii) notice that Grantor's operations on the Premises are not in
compliance with requirements of applicable federal, state, or local environmental, health and
safety statutes and regulations; (iv) notice that Grantor is subject to federal or state investigation
evaluating whether any remedial action is needed to respond to the release of any hazardous or
toxic waste, substance or constituent, or asbestos or other substance from the Premises into the
environment; or (v) notice that the Premises are subject to a lien in favor of any governmental
entity for (A) any liability under federal or state environmental laws or regulations or
(B) damages arising from or costs incurred by such governmental entity in response to a release
of a hazardous or toxic waste, substance or constituent, or other substance into the environment.
1.15Wetlands.
Grantor hereby covenants and represents that, (a) to the best of
Grantor's knowledge, it is in compliance with all federal, state, and local laws relating to
"Wetlands" as defined in 33 C.F.R. § 328.3, as hereinafter amended, and in any comparable state
and/or local law, statute or ordinance, rule or regulation pertaining to such Wetlands, and
(b) Grantor shall not perform or cause to be performed any excavation or fill activity or other
acts which would in any way destroy, eliminate, alter, obstruct, interfere with or otherwise affect
any Wetlands.
1.16Access Laws.
Grantor hereby covenants and represents that (a) to the best of its
knowledge, it and the Premises are in compliance with the Americans With Disabilities Act and
all rules and regulations pertaining thereto and all state and local statutes, ordinances, rules, and
regulations relating to access by disabled persons, and (b) Grantor shall at all times hereafter
continue to comply with all such requirements.
ARTICLE II
SECURITY INTEREST IN COLLATERAL
2.1Security Agreement.
Grantor and Beneficiary do hereby agree and declare that
this Deed of Trust shall constitute a security agreement and Grantor hereby grants Beneficiary a
security interest in each and every item of the Collateral for the purpose of securing payment and
performance of all obligations secured by this Deed of Trust. The remedies for any violation of
the covenants, terms and conditions of the Note, the other Loan Documents and this Deed of
Trust shall be (i) as prescribed in this Deed of Trust; (ii) as prescribed by general law; or (iii) as
prescribed by the specific statutory consequences now or hereafter enacted and specified in the
said Uniform Commercial Code, all at Beneficiary's sole election.
- 51 -
2.2Representations and Warranties.
Grantor represents, warrants and agrees that:
(a) the Collateral secured hereby is, or is to be used by Grantor primarily for business purposes
and not for personal, family or household purposes; (b) except for the security interest granted
herein, Grantor is the owner of the Collateral free from any prior liens, security interest or
encumbrance and will defend the Collateral against all claims and demands of any and all
persons at any time claiming the same or any interest therein; and (c) no financing statement
covering the Collateral is on file at any public office.
2.3No Disposition of Personal Property.
Grantor will not make, suffer or permit,
without the prior written consent of Beneficiary, any sale, conditional sale, transfer, or lease of
any fixtures, apparatus, machinery, equipment or personal property comprising the Collateral,
except in the ordinary course of business and if replaced with like-kind Collateral that is free and
clear of all liens and security interests in favor of third parties.
2.4Financing Statements.
Grantor authorizes Beneficiary to prepare and file one or
more financing statements (including amendments and continuation statements) pursuant to the
Uniform Commercial Code as enacted by any applicable State, in form satisfactory to
Beneficiary to perfect or continue the perfection of the security interests granted herein and
Grantor agrees to pay the cost of filing in all public offices wherever filing is deemed necessary
by Beneficiary. A photocopy of this instrument may be filed as a financing statement at the
election of Beneficiary. This Deed of Trust shall constitute a fixture financing statement.
ARTICLE III
ASSIGNMENT OF LEASES AND RENTS
3.1Assignment.
Grantor hereby assigns to Beneficiary the Leases and Rents as
security for performance of all obligations secured by this Deed of Trust.
3.2Representations, Warranties and Covenants Pertaining to Leases.
Grantor
represents, warrants, covenants, and agrees with Beneficiary as follows:
(a)The sole ownership of the entire lessor's interest in the Leases and Rents is
vested in Grantor, and that Grantor has not, and shall not, perform any acts or execute any other
instruments which might prevent Beneficiary from fully exercising its rights under any of the
terms, covenants and conditions of this Article III.
(b)No Leases (including any guaranties of such Leases) shall be materially
altered, modified, amended, terminated, cancelled or surrendered nor any material terms or
conditions thereof be waived without Beneficiary's prior written consent.
(c)No Leases shall be entered into except upon a lease form previously
approved in writing by Beneficiary and following such leasing parameters as established from
time to time by Beneficiary, in its reasonable discretion.
(d)There are no defaults by the lessee or the lessor now existing under any
Leases and there exists no state of facts which, with the giving of notice or lapse of time or both,
would constitute a default under any of the Leases.
- 52 -
(e)Each of the Leases shall remain in full force and effect irrespective of any
merger of the interest of lessor and any lessee under any of the Leases.
(f)Grantor has not accepted and will not accept any Rents under any Leases
for more than 30 days in advance of their due dates.
(g)Grantor upon request, from time to time, shall furnish to Beneficiary a rent
roll and lease abstract in such reasonable detail as Beneficiary may request, certified by Grantor,
of all Leases relating to the Premises, and on demand, Grantor shall furnish to Beneficiary
executed copies of any and all such Leases.
(h)Grantor has not previously sold, assigned, transferred, mortgaged,
pledged, or granted a security interest in the Leases or Rents. Grantor agrees to neither create
nor permit any lien, charge, or encumbrance under its interest in the Leases and Rents.
(i)In the event any Lease is rejected in any proceeding under the Federal
Bankruptcy Code or any other federal, state, or local statute, no damage settlement shall be made
without the prior written consent of Beneficiary. Grantor will request that any check in payment
of damages for rejection or termination of any such Lease will be made payable both to Grantor
and Beneficiary. Grantor hereby assigns any such payment to Beneficiary.
(j)Grantor will timely perform and observe all terms, covenants, conditions
and agreements contained in any Lease which are required to be observed and performed by
Grantor.
3.3Assignment Absolute.
This assignment of Leases and Rents is absolute and is
effective immediately. Notwithstanding the foregoing, until an Event of Default under Article
IV hereof has occurred, and has not been cured, Grantor may receive, collect, and use the Rents
accruing from the Premises.
3.4Right to Collect.
Upon the occurrence of an Event of Default, Beneficiary may,
at its option, without notice to Grantor, receive and collect all Rents as they become due, from
the Premises and the leasehold interest therein and under any and all Leases of all or any part of
the Premises. Beneficiary shall thereafter continue to receive and collect all Rents, as long as
such Event of Default shall exist, and during the pendency of any foreclosure proceedings, and if
there is a deficiency, during any redemption period.
3.5Attorney-in-Fact.
Grantor hereby irrevocably appoints Beneficiary its true and
lawful attorney with full power of substitution and with full power for Beneficiary in its own
name and capacity or in the name and capacity of Grantor, from and after any Event of Default
not having been cured, to demand, collect, receive, and give complete acquittances for any and
all Rents accruing from the Premises or the leasehold interest therein, and at Beneficiary's
discretion to file any claim or take any other action or proceeding and make any settlement of
any claims, in its own name or otherwise, which Beneficiary may deem necessary or desirable in
order to collect and enforce the payment of the Rents. Lessees of the Premises are hereby
expressly authorized and directed to pay any and all amounts due Grantor pursuant to the Leases
directly to Beneficiary or such nominee as Beneficiary may designate in writing delivered to and
- 53 -
received by such lessees who are expressly relieved of any and all duty, liability, or obligation to
Grantor in respect of all payments so made.
3.6Remedies.
From and after any Event of Default that has not been cured,
Beneficiary is hereby vested with full power to use all measures, legal and equitable, deemed by
it necessary or proper to enforce this assignment and to collect the Rents assigned hereunder,
including the right of Beneficiary, its designee, or a receiver to enter upon the Premises, or any
part thereof, with or without force and with process of law, and take possession of all or any part
of the Premises together with all personal property, fixtures, documents, books, records, papers
and accounts of Grantor relating thereto, and may exclude the Grantor, its agents and servants,
wholly therefrom. Grantor hereby grants full power and authority to Beneficiary to exercise all
rights, power and authority herein granted at any and all times after any Event of Default that has
not been cured, without further notice to Grantor, with full power to use and apply all of the
Rents to the payment of the costs of managing and operating the Premises and the leasehold
interest therein and of any indebtedness or liability of Grantor to Beneficiary, including but not
limited to the payment of taxes, special assessments, insurance premiums, damage claims, the
cost of maintaining, repairing, rebuilding and restoring the improvements on the Premises or of
making the same rentable, attorneys' fees incurred in connection with the enforcement of this
assignment, and of principal and interest payments due from Grantor to Beneficiary on the Note
and the other Loan Documents, all in such order as Beneficiary may determine according to
provisions of the Note and the other Loan Documents executed herewith.
3.7Beneficiary's Liability.
Beneficiary shall be under no obligation to exercise or
prosecute any of the rights or claims assigned to it hereunder or to perform or carry out any of
the obligations of the lessor under any of the Leases and does not assume any of the liabilities in
connection with or growing out of the covenants and agreements of Grantor in the Leases. It is
further understood that this assignment shall not operate to place responsibility for the control,
care, management or repair of the Premises or leasehold interest therein, or parts thereof, upon
Beneficiary, nor shall it operate to make Beneficiary liable for the performance of any waste of
the Premises by any lessee under any of the Leases or any other person, or for any dangerous or
defective condition of the Premises, or for any negligence in the management, upkeep, repair or
control of the Premises resulting in loss or injury or death to any lessee, licensee, employee or
stranger, or for any environmental hazard on the Premises. The acceptance by Beneficiary of
this assignment, with all of the rights, powers, privileges, and authority so created shall not, prior
to entry upon taking possession of the Premises by Beneficiary, be deemed or construed to
constitute Beneficiary a "mortgagee-in-possession." Grantor hereby agrees to indemnify and
hold Beneficiary harmless from any and all liability, loss, damage, or expense which Beneficiary
may incur under or by reason of this assignment; or for any action taken by Beneficiary
hereunder; or by reason or in defense of any and all claims and demands whatsoever which may
be asserted against Beneficiary arising out of the Leases.
ARTICLE IV
EVENTS OF DEFAULT
4.1Events of Default.
The Note shall become due at the option of Beneficiary upon
the occurrence of any of the following events (hereinafter referred to as the "Events of Default"):
- 54 -
(a)a default under the terms of the Note or any other Loan Document, after
the expiration of any applicable grace periods;
(b)Grantor, any affiliate of Grantor or any guarantor of the Note is in default,
after the giving of any required notice, under any other note, security agreement, lease agreement
or lease schedule, loan agreement, guaranty or other agreement, whether now existing or
hereafter made, between Grantor, any affiliate of Grantor or any guarantor of the Note and
Beneficiary;
(c)a default in the payment of any amount due hereunder on its due date;
(d)if there shall be default in the due observance or performance of any non-
monetary provision of this Deed of Trust;
(e)if Grantor shall make an assignment for the benefit of its creditors;
(f)if a custodian, liquidator or trustee shall be appointed for Grantor or if any
action is commenced by or against Grantor under the Federal Bankruptcy Code, or any similar
federal or state statute, or if any proceeding for the dissolution or liquidation of Grantor shall be
instituted and, if such appointment, adjudication, petition or proceeding was involuntary and not
consented to by Grantor, upon the same not being discharged, stayed or dismissed within
60 days;
(g)if any material representation or warranty of Grantor made in this Deed of
Trust or the Note or in any certificate or other writing delivered pursuant hereto or thereto, shall
prove to be incorrect in any material respect as of the time when the same shall have been made;
and
(h)if any guarantor of the Note shall permit any of the items set forth in
subparagraphs (d), (e), or (f) above to occur with regard to such guarantor or such guarantor dies
or is dissolved and Grantor fails to provide to Beneficiary a substitute guarantor reasonably
acceptable to Beneficiary, within 60 days.
ARTICLE V
REMEDIES
5.1Rights of Beneficiary After Default.
Upon the occurrence of an Event of
Default, Beneficiary shall:
(a)have the option to declare the Note, the other Loan Documents and all
sums secured hereby immediately due and payable, and further may proceed immediately to
foreclose this Deed of Trust by judicial action as a mortgage or by notice and sale as authorized
by applicable law and to exercise all other rights under this Deed of Trust, the Note, the other
Loan Documents or any other controlling document;
(b)have all the rights and remedies of a secured party under the Uniform
Commercial Code of those states governing disposition of the Collateral in the Event of a
- 55 -
Default, including, but not limited to, the right to sell the Collateral at public or private sale, and
the right to be a purchaser at any such sale;
(c)demand, elect and receive all the Rents and profits as then or may
thereafter be due and owing to Grantor in connection with the Premises and the Collateral and
exercise all other remedies set forth in Article III hereof pertaining to the Leases and Rents;
(d)have all other remedies available at law or in equity; and
(e)Beneficiary shall have the right either through its own actions or by
receiver appointed under Section 5.4 below:
(i)to enter upon and take possession of the Premises and the
Collateral and to operate same for and on behalf of Grantor;
(ii)to collect all of the Rents;
(iii)to expend such sums of money which it may deem necessary for
the maintenance, preservation and operation of the Premises, including
expenditures for improvements, alterations and repairs, including those of a
capital nature;
(iv)to cancel or terminate any Lease or agreement pertaining to the
Premises for any cause for which Grantor would be entitled to cancel the same
and to extend or modify any Lease and make any new Lease on any portion of the
Premises;
(v)to complete any construction in progress on the Premises, and in
that connection, pay bills, borrow funds, employ contractors, and make any
changes in plans or specifications as Beneficiary or the receiver deems
appropriate; and
(vi)if the revenues and income are insufficient to pay expenses,
Beneficiary or the receiver may borrow such sums as Beneficiary or the receiver
deems necessary for the purposes stated in this Section 5.1. The amounts
borrowed including interest thereon shall become a part of the balance secured by
this Deed of Trust and shall be payable by Grantor on demand.
Any sums so expended by Beneficiary under this Section 5.1(e) shall at once become additional
indebtedness owing from Grantor to Beneficiary and shall be immediately due and payable by
Grantor, with interest thereon to the extent legally enforceable at the default rate set forth in the
Note, which sum so advanced shall be added to and become a part of the indebtedness secured
by this Deed of Trust.
5.2Distribution of Sums Received by Beneficiary.
Upon enforcement of this Deed
of Trust upon the occurrence of an Event of Default, all sums received from time to time by
Beneficiary shall be applied as follows:
- 56 -
First:
To the payment of all reasonable costs and expenses of Beneficiary (including fees and expenses of its agents
and counsel) incurred or accrued in connection with (a) the operation, maintenance or repair of the Premises and the
Collateral and any and all businesses operated thereon; (b) any proceedings brought by Beneficiary; and (c) any sale
(public or private) or other disposition of the Premises and the Collateral.
Second:
To the payment of all amounts as provided for in the Note and this Deed of Trust, and the other Loan
Documents, whether for principal, interest or otherwise, in whatever order Beneficiary, exercising its sole discretion,
may elect.
Third:
To the payment of any surplus to Grantor or any other person legally entitled thereto.
5.3Rights Cumulative.
All rights and remedies from time to time conferred upon or
reserved to Beneficiary are cumulative, and none is intended to be exclusive of any other. No
delay or omission in insisting upon the strict observance or performance of any provision of this
Deed of Trust, or to exercise any right or remedy, shall be construed as a waiver or
relinquishment of such provision, nor shall it impair such right or remedy. Every right and
remedy may be exercised from time to time and as often as deemed expedient.
5.4Appointment of Receiver.
If an Event of Default shall occur, then with or
without the filing of judicial proceedings to foreclose this Deed of Trust or otherwise to enforce
the rights of Beneficiary, Beneficiary, to the maximum extent permitted by law, and without
prior notice to Grantor, shall be entitled as a matter of right to the appointment of a receiver or
receivers of the Premises and the Collateral, pending such proceedings, with such powers as are
conferred upon Beneficiary herein and as shall be conferred by the court making such
appointment; but notwithstanding the appointment of any receiver, trustee, or other custodian,
Beneficiary shall be entitled to the possession and control of any cash, or other instruments at the
time held by, or payable or deliverable under the terms of this Deed of Trust to Beneficiary. The
receiver may serve without bond if permitted by law. Beneficiary's right to the appointment of a
receiver shall exist whether or not apparent value of the Premises and Collateral exceeds the
indebtedness by a substantial amount. Grantor hereby irrevocably consents to the appointment
of a receiver on the terms set forth herein. Employment by Beneficiary shall not disqualify a
person from serving as receiver.
5.5Suits to Protect the Premises and the Collateral.
Beneficiary shall have power:
(a)To institute and maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Premises by any acts which may be unlawful or a
violation of the Deed of Trust; and
(b)To preserve or protect its interest in the Premises and in the income,
revenues, rents and profits arising therefrom.
5.6Beneficiary's Power of Enforcement.
If an Event of Default shall have
occurred, Beneficiary may, either with or without entry or taking possession as hereinabove
provided or otherwise, proceed by suit or suits at law or in equity or by any other appropriate
proceeding or remedy (a) to foreclose this Deed of Trust as a mortgage and to sell, as an entirety
or in separate lots, units or parcels, the Premises and the Collateral, under the judgement or
decree of a court or courts of competent jurisdiction; and (b) to pursue any other remedy
available to it, all as Beneficiary shall deem most effectual for such purposes. Beneficiary shall
- 57 -
take action either by such proceedings or by the exercise of its powers with respect to entry or
taking possession, as Beneficiary may determine.
5.7Foreclosure by Power of Sale.
Should Beneficiary elect to foreclose by exercise
of the power of sale herein contained, Beneficiary shall notify Trustee and shall deposit with
Trustee this Deed of Trust and the Note and such receipts and evidence of expenditures made
and secured hereby as Trustee may require. Upon receipt of such notice from Beneficiary,
Trustee shall cause to be given such notice of default as then required by law. Trustee shall,
without demand on Grantor, after lapse of such time as may then be required by law and after
notice of sale having been given as required by law, sell the Premises at the time and place of
sale fixed by it in such notice of sale, either as a whole, or in separate lots or parcels or items as
Trustee shall deem expedient, and in such order as it may determine, at public auction to the
highest bidder for cash in lawful money of the United States payable at the time of sale. Trustee
shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds
conveying the property so sold, but without any covenant or warranty, express or implied. The
recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof.
Any person, including, without limitation, Grantor or Beneficiary, may purchase at such sale.
5.8Application of Indebtedness Towards Purchase Price.
Upon any foreclosure
sale, Beneficiary may bid for and purchase the Premises and Collateral, and upon compliance
with the terms of sale, may hold, retain, possess and dispose of such property at its own absolute
right without further accountability. Any such purchase shall permit Beneficiary to apply to the
purchase price any portion of or all sums due to Beneficiary under the Note, the other Loan
Documents and this Deed of Trust in lieu of cash, to the amount which shall, upon distribution of
the net proceeds of such sale, be payable thereon. In the event the sale proceeds from a judicial
foreclosure after payment of the expenses described in Section 5.2 hereof are not sufficient to
satisfy all indebtedness secured hereby, Beneficiary shall be entitled to a judgment against
Grantor in the amount of such deficiency.
5.9No Waiver of One Default to Affect Another, Etc.
No waiver of any default
hereunder shall extend to or shall affect any subsequent or other then existing default or shall
impair any rights, powers or remedies consequent thereon. If Beneficiary (a) grants forbearance
or any extension of time for the payment of any sums secured hereby; (b) takes other or
additional security for the payment thereof; (c) waives or does not exercise any right granted
herein or in the Note; (d) releases any part of the Premises from the lien of the Deed of Trust or
otherwise changes any of the terms of the Note or Deed of Trust or any of the other Loan
Documents; (e) consents to the filing of any map, plat or replat thereof; (f) consents to the
granting of any easement thereon; or (g) makes or consents to any agreement subordinating to
the lien or charge hereof, then and in each such case such act or omission shall not release,
discharge, modify, change, or affect the original liability under the Note, Deed of Trust, the other
Loan Documents or otherwise of Grantor or any subsequent purchaser of the Premises or any
part thereof, or any maker, co-signer, endorser, surety or guarantor; nor shall any such act or
omission preclude Beneficiary from exercising any right, power or privilege herein granted or
intended to be granted in the event of any other default then made or of any subsequent default,
nor, except as otherwise expressly provided in an instrument or instruments executed by
Beneficiary shall the lien of this Deed of Trust be altered thereby.
- 58 -
5.10Injunctive Relief.
In addition to, but not in lieu of, any other rights hereunder,
Beneficiary shall have the right to institute suit and obtain a protective or mandatory injunction
to prevent a breach or default of, or to enforce the observation by Grantor of the agreements,
covenants, and terms, any condition contained herein.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1Successors and Assigns Included in Parties.
Whenever in this Deed of Trust
one of the parties hereto is named or referred to, the successors and assigns of such party shall be
included, and all covenants and agreements contained in this Deed of Trust by or on behalf of
Grantor or by or on behalf of Beneficiary shall include their respective successors and assigns,
whether so expressed or not.
6.2Invalid Provisions to Affect No Others.
In case any one or more of the
covenants, agreements, terms or provisions contained in this Deed of Trust or in the Note or in
the other Loan Documents shall be invalid, illegal or unenforceable in any respect, the validity of
the remaining covenants, agreements, terms or provisions contained herein and in the Note and
in the other Loan Documents shall be in no way affected, prejudiced or disturbed thereby.
6.3Notices.
Notices, statements and other communications to be given under the
terms of this Deed of Trust shall be in writing and delivered by hand against written receipt or
sent by certified or registered mail, return receipt requested, postage prepaid and addressed as
provided in the cover page of this Deed of Trust, or at such other address as from time to time
designated by the party receiving the notice. The date of mailing of such notices shall be deemed
the effective date of service.
6.4Maximum Principal Amount.
This Deed of Trust shall secure the payment of
any additional amounts advanced, from time to time, by Beneficiary to Grantor under the Note or
other Loan Documents stating that such advances are secured hereby. All advances made by
Beneficiary with respect to the Premises for the payment of taxes, assessments, insurance
premiums, costs incurred for the protection of the Premises and other costs which Beneficiary is
authorized by this Deed of Trust or any other Loan Document to pay on Grantor's behalf, shall
be secured by this Deed of Trust.
6.5No Merger.
If both the lessor's and lessee's estates under any lease or portion
thereof which constitutes a part of the Premises shall at any time become vested in one owner,
this Deed of Trust and the lien created hereby shall not be destroyed or terminated by application
of the doctrine of merger and, in such event, Beneficiary shall continue to have and enjoy all of
the rights and privileges of Beneficiary as to the separate estates. In addition, upon the
foreclosure of the lien created by this Deed of Trust on the Premises pursuant to the provisions
hereof, any leases or subleases then existing and created by Grantor shall not be destroyed or
terminated by application of the law of merger or as a matter of law or as a result of such
foreclosure unless Beneficiary or any purchaser at any such foreclosure sale shall so elect. No
act by or on behalf of Beneficiary or any such purchaser shall constitute a termination of any
lease or sublease unless Beneficiary or such purchaser shall give written notice thereof to such
tenant or subtenant.
- 59 -
6.6Reconveyance by Trustee.
Upon written request of Beneficiary stating that all
sums and other obligations secured hereby have been paid, and upon surrender of this Deed of
Trust and the Note to Trustee for cancellation and retention and upon payment by Grantor of
Trustee's fees, Trustee shall reconvey to Grantor, or the person or persons legally entitled thereto,
without warranty, any portion of the Premises then held hereunder. The recitals in such
reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The
grantee in any reconveyance may be described as "the person or persons legally entitled thereto."
Grantor shall pay for the cost of recording any reconveyance or partial reconveyance(s) of this
Deed of Trust, plus a reconveyance fee for each such reconveyance or partial reconveyance as
authorized by applicable law.
6.7WAIVER OF JURY TRIAL. GRANTOR AND BENEFICIARY HEREBY
JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING RELATING TO THIS DEED OF TRUST AND TO
ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS HEREUNDER OR
THEREUNDER, ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY
TRANSACTION ARISING THEREFROM OR CONNECTED THERETO. GRANTOR
AND BENEFICIARY EACH REPRESENTS TO THE OTHER THAT THIS WAIVER IS
KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.
IN WITNESS WHEREOF, Grantor has executed this instrument as of the date first written above.
GRANTOR:
BEAM CONSTRUCTION & MANAGEMENT, LLC, an
Oregon limited liability company
By:
Name:
Title
STATE OF _________________ )
) SS
COUNTY OF ________________ )
The foregoing instrument was acknowledged before me this ____ day of ______________, 2008, by
___________________ as _______________ of BEAM CONSTRUCTION & MANAGEMENT, LLC an Oregon
limited liability company, on behalf of said company.
Notary Public for
My Commission Expires:
- 60 -
EXHIBIT A
Legal Description
EXHIBIT B
Permitted Exceptions
EXHIBIT F
CITY LEASE – LEASE TERMS
Lessor: Beam Construction & Management, LLC, doing business as Beam Development
Lessee: City of Eugene, a municipal corporation
Description of Premises: Newly Constructed Building - not to exceed 50,000 square feet in floors 2 through 5
Term:
Initial Term: 5 years
Renewal Term (upon City’s election): 5 years
Commencement Date: Upon Completion of Construction of the Tenant Improvements provided by Lessor
Monthly Rental Amount: Market rent, based on amounts charged other tenants or prospective tenants renting
similar amount of space in the Newly Constructed Building and recognizing that City is
exempt from payment of ad valorem taxes assessable against the Premises, and, in any
event, not to exceed $1.89 per square foot
Monthly Rental Escalation: No
Use: Office
Taxes, Insurance, Utilities: Paid by Lessor
Tenant Improvement Allowance: $25.00 per square foot
Tenant Improvement Work Agreement: Yes
Commencement of TI Construction Date: Upon written notice given to Lessee by Lessor on or before
May 1, 2009
Completion of TI Construction: Within 60 days after commencement of TI work and upon the
acceptance and approval of the TI work by Lessor and Lessee
EXHIBIT F
EXHIBIT G
PROJECT PRO FORMA
DRAFT
Estimated Value
Centre Court, New, Washburne Buildings
CenterNew CombinedWashburne
ProgramCourtBuildingTotalBuilding
Below Grade 12,800 12,800 25,600
Ground Floor 12,800 12,800 25,600
2nd Floor 7,500 12,800 20,300
3rd Floor 12,800 12,800 25,600
4th Floor 12,800 12,800 25,600
5th Floor 12,800 12,800 25,600
148,300
Rental AssumptionsmonthlyCCNewWashburnePking/mo
Below Grade$ 1.59$ 1.59$ 20,288$ 20,288$ -$ 65.03
Ground Floor$ 23.00 $ 23.00$ 294,400$ 294,400$ 5,940
2nd Floor$ 16.00 $ 22.68$ 120,000$ 290,304$ 99,924
3rd Floor$ 22.50 $ 22.68$ 288,000$ 290,304$ 11,880
4th Floor$ 24.00 $ 22.68$ 307,200$ 290,304$ 49,200
5th Floor$ 26.00 $ 22.68$ 332,800$ 290,304$ -
122,700 23.13$ 1,362,688$ 1,475,904$ 166,944
Estimated NOI
CC & NewWashburne
Gross Rent Received$ 2,838,592$ 166,944
Less: Vacancy5%$ (83,869) $ 11,6867% appraisal
Total Forecasted Annual Revenue$ 2,754,723$ 155,258
Total Expenses$ 879,664 12,421
$ 5.93 8% appraisal
EBT&DS$ 1,875,059$ 142,837
Debt ServiceDCRDCR
Bank6.4%25$ (1,264,357) 1.48
HUD 1&2 & DRLP4.0%20$ (519,485) $ (69,633)2.05
Total Debt Service$ (1,783,842) 1.05$ (69,633)
EBT$ 91,217$ 73,205
Dividend on Dev Equity6.1%
Combined Div on Dev EQ11%
Cap Rate7.5%$ 25,000,79094%LTV (Conv + HUD)
Estimated Value
Construction Loan @ Estimated Perm Mortgage$ 15,750,000
65% LTV$ 16,250,514$ 500,514
65% LTC$ 23,170,688
EXHIBIT G
EXHIBIT H
PROJECT SCHEDULE
DRAFT
Schematic drawings 8/30/2008
Design drawings 11/17/2008
Construction starts 5/1/2009
Permit review 3/29/2009
Centre Court completed 6/23/2010
New building completed 9/30/2010
EXHIBIT H