CONSTRUCTION LOAN AGREEMENT
--------------------------------------------------------------------------------
Borrower: Timberline Software Corporation Lender: Pacific One Bank
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ P.O. Box 40108
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
THIS CONSTRUCTION LOAN AGREEMENT between Timberline Software Corporation
("Borrower") and Pacific One Bank ("Lender") is made and executed on the
following terms and conditions. Borrower has applied to Lender for loans in the
total principal amount of Nine Million Seven Hundred Fifty Thousand and 00/100
Dollars ($9,750,000.00) in order to construct the Improvements on the Real
Property described below. Lender is willing to lend the loan amount to Borrower
solely under the terms and conditions specified in this Agreement and in the
Related Documents, to each of which Borrower agrees. Borrower understands and
agrees that: (a) in granting, renewing, or extending any Loan, Lender is relying
upon Borrower's representations, warranties, and agreements as set forth in this
Agreement, and (b) all such Loans shall be and remain subject to the following
terms and conditions of this Agreement.
TERM. This Agreement shall be effective as of December 1, 1997, and shall
continue thereafter until all Indebtedness has been paid in full and all other
obligations of Borrower hereunder have been performed in full and the parties
terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
Agreement. The word "Agreement" means this Construction Loan Agreement,
as this Construction Loan Agreement may be amended or modified from time
to time, together with all exhibits and schedules attached to this
Construction Loan Agreement from time to time.
Architecture Contract. The words "Architecture Contract" mean the
contract between Borrower and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Architects,
PC, who designed the Project.
Borrower. The word "Borrower" means Timberline Software Corporation.
Collateral. The word "Collateral" means and includes without limitation
all property and assets granted as collateral security for a Loan,
whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future, and whether granted in
the form of a security interest, mortgage, deed of trust, assignment,
pledge, chattel mortgage, chattel trust, factor's lien, equipment trust,
conditional sale, trust receipt, lien, charge, lien or title retention
contract, lease or consignment intended as a security device, or any
other security or lien interest whatsoever, whether created by law,
contract, or otherwise.
Construction Contract. The words "Construction Contract" mean and include
the contract between Borrower and Westwood Swinerton Construction, the
general contractor for the Project, and any subcontracts with
subcontractors, materialmen, laborers, or any other person or entity for
performance of work on the Project or the delivery of materials to the
Project.
Current Assets. The words "Current Assets" mean assets owned by Borrower
that will be converted into cash in the normal course of business within
one year.
Current Liabilities. The words "Current Liabilities" mean liabilities
that will be paid in the normal course of business within one year by
expending current assets or otherwise.
Debt Service Ratio. The words "Debt Service Ratio" mean net profits, plus
depreciation and amortization, divided by the current maturity of long
term debt.
Event of Default. The words "Event of Default" mean and include any of
the Events of Default set forth below in the section titled "Events of
Default."
Grantor. The word "Grantor" means and includes each and all of the
persons or entities granting a Security Interest in any Collateral for
the Indebtedness, including without limitation all Borrowers granting
such a Security Interest.
Guarantor. The word "Guarantor" means and includes without limitation all
guarantors, sureties, and accommodation parties.
Improvements. The word "Improvements" means and includes without
limitation all existing and future buildings, structures, facilities,
fixtures, additions, and similar construction on the Property.
Indebtedness. The word "Indebtedness" means and includes without
limitation all Loans, together with all other obligations, debts and
liabilities of Borrower to Lender, or any one or more of them, as well as
all claims by Lender against Borrower, or any one or more of them;
whether now or hereafter existing, voluntary or involuntary, due or not
due, absolute or contingent, liquidated or unliquidated; whether Borrower
may be liable individually or jointly with others; whether Borrower may
be obligated as a guarantor, surety, or otherwise; whether recovery upon
such Indebtedness may be or hereafter may become barred by any statute of
limitations; and whether such Indebtedness may be or hereafter may become
otherwise unenforceable.
Lender. The word "Lender" means Pacific One Bank, its successors and
assigns.
Loan. The word "Loan" means the Note and any other loans made to Borrower
under this Agreement and the Related Documents as described below.
Loan Fund. The words "Loan Fund" mean the undisbursed proceeds of the
Loan under this Agreement together with any equity funds or other
deposits required from Borrower under this Agreement.
Note. The word "Note" means the promissory note or credit agreement dated
December 1, 1997, in the original principal amount of Nine Million Seven
Hundred Fifty Thousand and 00/100 Dollars ($9,750,000.00) from Borrower
to Lender, together with all renewals of, extensions of, modifications
of, refinancings of, consolidations of, and substitutions for the
promissory note or agreement.
Plans and Specifications. The words "Plans and Specifications" mean the
plans and specifications for the Project which have been approved and
initialed by Lender, together with such changes and additions as may be
approved by Lender in writing.
Project. The word "Project" means the construction and completion of all
Improvements contemplated by this Agreement, including without limitation
the erection of the building or structure, installation of equipment and
fixtures, landscaping, and all other work necessary to make the Property
usable and complete for the intended purposes. The Project includes the
following work: an office building containing approximately 88,000 square
feet.
Project Documents. The words "Project Documents" mean the Plans and
Specifications, all studies, data and drawings relating to the Project,
whether prepared by or for Borrower, the Construction Contract, the
Architecture Contract, and all other contracts and agreements relating to
the Project or the construction of the Improvements.
Property. The word "Property" means the Real Property together with all
Improvements, all equipment, fixtures, and other articles of personal
property now or subsequently attached or affixed to the real property,
together with all accessions, parts, and additions to, all replacements
of, and all substitutions for any of such property, and all proceeds
(including insurance proceeds and refunds of premiums) from any sale or
other disposition of such property.
Real Property. The words "Real Property" mean the real property located
in Washington County, State of Oregon, and legally described as:
▇▇▇▇ ▇ ▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, recorded January
26, 1995 in Plat Book 95, Pages 27 through 32, recorded as
Document No. 95005969, situated in the County of Washington and
State of Oregon.
TOGETHER WITH a non-exclusive right, privilege and easement for
ingress and egress of pedestrian and vehicular traffic as
disclosed by Easement Agreement recorded August 5, 1997,
Recorder's Fee No.
97071989.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
guaranties, security agreements, mortgages, deeds of trust, and all other
instruments, agreements and documents, whether now or hereafter existing,
executed in connection with the Indebtedness.
Security Agreement. The words "Security Agreement" mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security
Interest.
Security Interest. The words "Security Interest" mean and include without
limitation any type of collateral security, whether in the form of a
lien, charge, mortgage, deed of trust, assignment, pledge, chattel
mortgage, chattel trust, factor's lien, equipment trust, conditional
sale, trust receipt, lien or title retention contract, lease or
consignment intended as a security device, or any other security or lien
interest whatsoever, whether created by law, contract, or otherwise.
Subordinated Debt. The words "Subordinated Debt" mean indebtedness and
liabilities of Borrower which have been subordinated by written agreement
to indebtedness owed by Borrower to Lender in form and substance
acceptable to Lender.
Tangible Net Worth. The words "Tangible Net Worth" mean Borrower's total
assets excluding all intangible assets (i.e., goodwill, trademarks,
patents, copyrights, organizational expenses, and similar intangible
items, but including leaseholds and leasehold improvements) less total
Debt.
LOAN. The Loan shall be in the principal sum of Nine Million Seven Hundred Fifty
Thousand and 00/100 Dollars ($9,750,000.00) and shall bear interest on so much
of the principal sum as shall be advanced pursuant to the terms of this
Agreement and the Related Documents. The Loan shall bear interest on each
Advance from the date of the Advance in accordance with the terms of the Note.
Borrower shall use the proceeds of the Loan solely for the payment of (a) the
costs of constructing the Improvements and equipping the Project in accordance
with the Construction Contract; (b) other costs and expenses incurred or to be
incurred in connection with the construction of the Improvements as Lender in
its sole discretion shall approve; and (c) if permitted by Lender, interest due
under the Note, including all expenses and all loan and commitment fees
described in this Agreement.
FEES AND EXPENSES. Whether or not the Project shall be consummated, Borrower
shall assume and pay upon demand all out-of-pocket expenses incurred by Lender
in connection with the preparation of loan documents and the making of the Loan,
including without limitation the following: (a) all closing costs, fees, and
disbursements; (b) all expenses of Lender's legal counsel; and (c) all title
examination fees, title insurance premiums, appraisal fees, survey costs,
required fees, and filing and recording fees.
CONSTRUCTION PRIOR TO RECORDING OF SECURITY DOCUMENT. In the event Borrower
permits any work or materials to be furnished in connection with the Project
prior to execution of this Agreement, no Loan Funds shall be advanced until (a)
Borrower has signed the Related Documents; (b) Lender's mortgage or deed of
trust and other Security Interests in the Property have been duly recorded and
perfected; and (c) Lender has been provided evidence, satisfactory to Lender,
that Borrower has obtained all insurance required under this Agreement or any
Related Agreement and that Lender's liens on the Property and Improvements are
valid perfected first liens, subject only to such exceptions, if any, acceptable
to Lender.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender as of
the date of this Agreement and as of the date of each disbursement of Loan
proceeds:
Organization. Borrower has the full power and authority to own its
properties and to transact the businesses in which it is presently
engaged or presently proposes to engage.
Authorization. The execution, delivery, and performance of this Agreement
by Borrower, to the extent to be executed, delivered or performed by
Borrower, have been duly authorized by all necessary action by Borrower;
do not require the consent or approval of any other person, regulatory
authority or governmental body; and do not conflict with, result in a
violation of, or constitute a default under (a) any provision of its
articles of incorporation or organization, or bylaws, or any agreement or
other instrument binding upon Borrower or (b) any law, governmental
regulation, court decree, or order applicable to Borrower.
Financial Information. Each financial statement of Borrower supplied to
Lender truly and completely disclosed Borrower's financial condition as
of the date of the statement, and there has been no material adverse
change in Borrower's financial condition subsequent to the date of the
most recent financial statement supplied to Lender. Borrower has no
material contingent obligations except as disclosed in such financial
statements.
Litigation and Claims. No litigation or claim (including those for unpaid
taxes) against Borrower is pending or threatened which may materially
adversely affect Borrower's financial condition, and no other event has
occurred which may materially adversely affect Borrower's financial
condition or properties, other than litigation, claims, or other events,
if any, that have been disclosed to and acknowledged by Lender in
writing.
Title to Property. Borrower has, or on the date of first disbursement of
Loan proceeds will have, good and marketable title to the Property free
and clear of all defects, liens, and encumbrances, excepting only liens
for taxes, assessments, or governmental charges or levies not yet
delinquent or payable without penalty or interest, and such liens and
encumbrances as may be approved in writing by the Lender.
Hazardous Substances. The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this
Agreement, shall have the same meanings as set forth in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("▇▇▇▇"),
the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et
seq., the Resource Conservation and Recovery Act, 49 U.S.C. Section 6901,
et seq., or other applicable state or Federal laws, rules, or regulations
adopted pursuant to any of the foregoing or intended to protect human
health or the environment ("Environmental Laws"). Except as disclosed to
and acknowledged by Lender in writing, Borrower represents and warrants
that: (a) During the period of Borrower's ownership of Borrower's
Property, there has been no use, generation, manufacture, storage,
treatment, disposal, release or threatened release of any hazardous waste
or substance by any person on, under, or about the Property. (b) Borrower
has no knowledge of, or reason to believe that there has been (i) any
use, generation, manufacture, storage, treatment, disposal, release, or
threatened release of any hazardous waste or substance by any prior
owners or occupants of the Property, or (ii) any actual or threatened
litigation or claims of any kind by any person relating to such matters.
(c) Neither Borrower nor any tenant, contractor, agent or other
authorized user of the Property shall use, generate, manufacture, store,
treat, dispose of, or release any hazardous waste or substance on, under,
or about the Property; and any such activity shall be conducted in
compliance with all applicable federal, state, and local laws,
regulations, and ordinances, including without limitation Environmental
Laws. Borrower authorizes Lender and its agents to enter upon the
Property to make such inspections and tests as Lender may deem
appropriate to determine compliance of the Property with this section of
the Agreement. Any inspections or tests made by Lender shall be for
Lender's purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Borrower or to any
other person. The representations and warranties contained herein are
based on Borrower's due diligence in investigating the Property for
hazardous waste. Borrower hereby (a) releases and waives any future
claims against Lender for indemnity or contribution in the event Borrower
becomes liable for cleanup or other costs under any such laws, and (b)
agrees to indemnify and hold harmless Lender against any and all claims,
losses, liabilities, damages, penalties, and expenses which Lender may
directly or indirectly sustain or suffer resulting from a breach of this
section of the Agreement or as a consequence of any use, generation,
manufacture, storage, disposal, release or threatened release occurring
prior to Borrower's ownership or interest in the Property, whether or not
the same was or should have been known to Borrower, or as a result of a
violation of any Environmental Laws. The provisions of this section of
the Agreement, including the obligation to indemnify, shall survive the
payment of the Indebtedness and the satisfaction of this Agreement and
shall not be affected by Lender's acquisition of any interest in the
Property, whether by foreclosure or otherwise.
Project Costs. The Project costs are true and accurate estimates of the
costs necessary to complete the Improvements in a good and workmanlike
manner according to the Plans and Specifications presented by Borrower to
Lender, and Borrower shall take all steps necessary to prevent the actual
cost of the Improvements from exceeding the Project costs.
Utility Services. All utility services appropriate to the use of the
Project after completion of construction are available at the boundaries
of the Property.
Access. The Property is contiguous to publicly dedicated streets, roads,
or highways providing access to the Property.
Assessment of Property. The Property is and will continue to be assessed
and taxed as an independent parcel by all governmental authorities.
Compliance with Governing Authorities. Borrower has examined and is
familiar with all the easements, covenants, conditions, restrictions,
reservations, building laws, regulations, zoning ordinances, and federal,
state, and local requirements affecting the Project. The Project will at
all times and in all respects conform to and comply with the requirements
of such easements, covenants, conditions, restrictions, reservations,
building laws, regulations, zoning ordinances, and federal, state, and
local requirements.
Survival of Representation and Warranties. Borrower understands and
agrees that Lender is relying upon the above representations and
warranties in making the above referenced Loan to Borrower. Borrower
further agrees that the foregoing representations and warranties shall be
continuing in nature and shall remain in full force and effect until such
time as Borrower's Loan and Note shall be paid in full, or until this
Agreement shall be terminated in the manner provided above, whichever is
the last to occur.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment to Lender's satisfaction of all of the conditions set forth in this
Agreement.
Borrower's Payment. Borrower shall have first paid from its own funds the
sum of Three Million Nine Hundred Eighty-Five Thousand and 00/100 Dollars
($3,985,000.00) toward construction of the Project.
Compliance with Commitment Letter. Borrower shall have fully complied
with that Construction/Term Loan Commitment Letter between Borrower and
Lender dated July 17, 1997. In the event there is a conflict between the
terms of the Commitment Letter and the terms of this Construction Loan
Agreement or the Related Documents, the terms of the Construction Loan
Agreement or Related Documents shall prevail.
Approval of General Contractor. Lender shall have approved the general
contractor employed in connection with the construction of the
Improvements. Lender shall have the right to communicate with any person
to verify the facts disclosed by any application for any Advance, or for
any other purpose.
Plans, Specifications, and Permits. Lender shall have received and
accepted a complete set of Plans and Specifications setting forth all
Improvements for the Project, and Borrower shall have furnished to Lender
copies of all permits and requisite approvals of any governmental body
necessary for the construction and use of the Project.
Architecture and Construction Contracts. Borrower shall have furnished in
form and substance satisfactory to Lender an executed copy of the
Architecture Contract and an executed copy of the Construction Contract.
Support Documents. Borrower shall provide to Lender in form satisfactory
to Lender the following support documents for the Loan: Assignment of
Architecture Contract and Assignment of Construction Contract. Budget and
Schedule of Estimated Advances. Lender shall have approved detailed
budget and cash flow projections of total Project costs and a schedule of
the estimated amount and time of disbursements of each Advance.
Borrower's Authorization. Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of the Loan documents, and the
consummation of the Project, and such other authorizations and other
documents as Lender in its sole discretion may require.
Survey. If requested by Lender, Borrower shall have furnished to Lender a
survey of recent date, prepared and certified by a qualified surveyor and
providing that the Improvements, if constructed in accordance with the
Plans and Specifications, shall lie wholly within the boundaries of the
Property without encroachment or violation of any zoning ordinances,
building codes or regulations, or setback requirements, together with
such other information as Lender in its sole discretion may require.
Zoning. Borrower shall have furnished evidence satisfactory to Lender
that the Property is duly and validly zoned for the construction,
maintenance, and operation of the Project.
Soils Test. Borrower shall have provided Lender with test of the
Property's soil. This report, prepared by an engineering firm acceptable
to Lender must indicate that the soil conditions of the Property are
sufficient to support the Project.
Hazardous Substance Report. Borrower shall have provided Lender with a
report showing that the Property is free from hazardous substances. This
report must be prepared by an environmental services company acceptable
to Lender. The report should detail a site reconnaissance, research into
appropriate environmental agency files, and a summary of findings and
recommendations. A 50-year history of Property title and uses will also
be provided.
Title Insurance. Borrower shall have provided to Lender an ALTA Lender's
extended coverage policy of title insurance with such endorsements as
Lender may require, issued by a title insurance company acceptable to
Lender and in a form, amount, and content satisfactory to Lender,
insuring or agreeing to insure that the Mortgage or Deed of Trust on the
Property is or will be upon recordation a valid first lien on the
Property free and clear of all defects, liens, encumbrances, and
exceptions except those as specifically accepted by Lender in writing. If
requested by Lender, Borrower shall provide to Lender, at Borrower's
expense, a foundation endorsement to the title policy upon the completion
of each foundation for the Improvements, showing no encroachments, and
upon completion an endorsement which insures the lien-free completion of
the Improvements.
Insurance. Unless waived by Lender in writing, Borrower shall have
delivered to Lender the following insurance policies or evidence thereof:
(a) an all risks course of construction insurance policy covering the
Improvements issued in an amount and by a company acceptable to Lender,
containing a loss payable or other endorsement satisfactory to Lender
insuring Lender as mortgagee, together with such other endorsements as
may be required by Lender, including stipulations that coverages will not
be cancelled or diminished without at least thirty (30) days' prior
written notice to Lender; (b) flood insurance if required by Lender or
applicable law; and (c) all other insurance required by this Agreement or
by the Related Documents.
WARNING
-------
Unless Borrower provides Lender with evidence of the insurance
coverage as required herein, Lender may purchase insurance at
Borrower's expense to protect Lender's interest. This insurance
may, but need not, also protect Borrower's interest. If the
Collateral becomes damaged, the coverage Lender purchases may not
pay any claim Borrower makes or any claim made against Borrower.
Borrower may later cancel this coverage by providing evidence that
Borrower has obtained property coverage elsewhere.
Borrower is responsible for the cost of any insurance purchased by
Lender. The cost of this insurance may be added to the Note
balance. If the cost is added to the Note balance, the interest
rate on the Note will apply to this added amount. The effective
date of coverage may be the date Borrower's prior coverage lapsed
or the date Borrower failed to provide proof of coverage. The
coverage Lender purchases may be considerably more expensive than
insurance Borrower can obtain on Borrower's own and may not
satisfy any need for property damage coverage or any mandatory
liability insurance requirements imposed by applicable law.
Payment of Fees and Expenses. Borrower shall have paid to Lender all
expenses specified in this Agreement as are then due and payable.
Satisfactory Construction. All work usually done at the stage of
construction for which disbursement is requested shall have been done in
a good and workmanlike manner and all materials and fixtures usually
furnished and installed at that stage of construction shall have been
furnished and installed, all in compliance with the Plans and
Specifications. Borrower shall also have furnished to Lender Property
inspection reports and such other proofs as Lender may reasonably require
to establish the progress of the work, compliance with applicable laws,
freedom of the Property from liens, and the basis for the requested
disbursement.
Certification. Borrower shall have furnished to Lender a certification by
an engineer, architect, or other qualified inspector acceptable to Lender
that the construction of the Improvements has complied and will continue
to comply with all applicable statutes, ordinances, codes, regulations,
and similar requirements, including but not limited to the Americans with
Disabilities Act of 1990.
Lien Waivers. Borrower shall have obtained and attached to each
application for an Advance, including the Advance to cover final payment
to the general contractor, executed acknowledgments of payments of all
sums due and releases of mechanic's and materialmen's liens, satisfactory
to Lender, from any party having lien rights, which acknowledgments of
payment and releases of liens shall cover all work, labor, equipment,
materials done, supplied, performed, or furnished prior to such
application for an Advance.
Lack of Default. There shall not exist at the time of any Advance a
condition which would constitute an Event of Default under this
Agreement.
DISBURSEMENT OF LOAN PROCEEDS. The following provisions relate to the
disbursement of funds from the Loan Fund.
Application for Advances. Each application shall be stated on a standard
AIA payment request form or other form approved by Lender, executed by
Borrower, certified by ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Architects, PC, and
supported by such evidence as Lender shall reasonably require. Borrower
shall apply only for disbursement with respect to work actually done by
the general contractor and for materials and equipment actually
incorporated into the Project. Each application for an Advance shall be
deemed a certification of Borrower that as of the date of such
application, all representations and warranties contained in the
Agreement are true and correct, and that Borrower is in compliance with
all of the provisions of this Agreement. Only one Loan draw will be
allowed each month and all draws shall comply with the Lender's Standard
Construction Loan Procedures dated June 3, 1996 and any subsequent
amendments thereto.
Loan To Value. Unless waived by Lender in writing, the ratio of the
amount of the Loan to the value of the Property as completed shall not
exceed seventy-five percent (75%). The term "value" as used herein shall
be defined by Lender in its sole discretion unless agreed to the contrary
by Lender in writing.
Payments. At the sole option of Lender, Advances may be paid in the joint
names of Borrower and the general contractor, subcontractor(s), or
supplier(s) in payment of sums due under the Construction Contract. At
its sole option, Lender may directly pay the general contractor and any
subcontractors or other parties the sums due under the Construction
Contract. Borrower appoints Lender as its attorney-in-fact to make such
payments. This power shall be deemed to be coupled with an interest,
shall be irrevocable, and shall survive an Event of Default under this
Agreement.
Projected Cost Overruns. If Lender at any time determines in its sole
discretion that the amount in the Loan Fund is insufficient, or will be
insufficient, to complete fully and to pay for the Project, then within
ten (10) days after receipt of a written request and supporting
documentation from Lender, Borrower shall deposit in the Loan Fund an
amount equal to the deficiency as determined by Lender. The judgment and
determination of Lender under this section shall be final and conclusive.
Outside Project Audits. Lender may require in its sole discretion outside
project audits with costs to be borne by Borrower as a condition
precedent to any disbursement of funds from the Loan Fund.
Final Payment to General Contractor. Upon completion of the Project and
fulfillment of the Construction Contract to the satisfaction of Lender
and provided sufficient Loan Funds are available, Lender shall make an
Advance to cover the final payment due to the general contractor upon
delivery to Lender of endorsements to the ALTA title insurance policy
following the posting of the completion notice, as provided under
applicable law. Construction shall not be deemed complete for purposes of
final disbursement unless and until Lender shall have received all of the
following:
(a) Evidence satisfactory to Lender that all work under the
Construction Contract requiring inspection by any
governmental authority with jurisdiction has been duly
inspected and approved by such authority, that a certificate
of occupancy has been issued, and that all parties
performing work have been paid, or will be paid, for such
work;
(b) A certification by ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Architects, PC, ▇▇▇▇▇ ▇▇▇▇▇▇ and any other engineer,
architect, or other qualified inspector acceptable to and
required by Lender that the Improvements have been completed
substantially in accordance with the Plans and
Specifications and the Construction Contract and in
conformance with all applicable statutes, ordinances, codes,
regulations, and similar requirements, that direct
connection has been made to all utilities set forth in the
Plans and Specifications, and that the Project is ready for
occupancy; and
(c) Acceptance of the completed Improvements by Lender
and Borrower.
Notwithstanding any other provision of this Agreement to the contrary,
Lender may retain up to five percent (5.00%) of the original Loan amount
to be paid as the final payment to the general contractor upon
satisfaction of the conditions set forth above.
Construction Default. If Borrower fails in any respect to comply with the
provisions of this Agreement or if construction ceases before completion
regardless of the reason, Lender, at its option, may refuse to make
further Advances, may accelerate the Indebtedness under the terms of the
Note, and without thereby impairing any of its rights, powers, or
privileges, may enter into possession of the construction site and
perform or cause to be performed any and all work and labor necessary to
complete the Improvements, substantially in accordance with the Plans and
Specifications.
Damage or Destruction. If any of the Property or Improvements is damaged
or destroyed by casualty of any nature, within sixty (60) days thereafter
Borrower shall restore the Property and Improvements to the condition in
which they were before such damage or destruction with funds other than
those in the Loan Fund. Lender shall not be obligated to make
disbursements under this Agreement until such restoration has been
accomplished.
Right to Advance Funds. When any event occurs that Lender determines in
good faith may endanger completion of the Project or the fulfillment of
any condition or covenant in this Agreement, Lender may require Borrower
to furnish, within ten (10) days after delivery of a written request,
adequate security to eliminate, reduce, or indemnify Lender against, such
danger. In addition, upon such occurrence, Lender in its sole discretion
may advance funds or agree to undertake to advance funds to any party to
eliminate, reduce, or indemnify Lender against, such danger or to
complete the Project. All sums paid by Lender pursuant to such agreements
or undertakings shall be for Borrower's account and shall be without
prejudice to Borrower's rights, if any, to receive such funds from the
party to whom paid. All sums expended by Lender in the exercise of its
option to complete the Project or protect Lender's interests shall be
payable to Lender on demand together with interest from the date of the
Advance at the rate applicable to the Loan. In addition, any Advance of
funds under this Agreement, including without limitation direct
disbursements to the general contractor or other parties in payment of
sums due under the Construction Contract, shall be deemed to have been
expended by or on behalf of Borrower and to have been secured by the
Mortgage or Deed of Trust on the Property.
LIMITATION OF RESPONSIBILITY. The making of any Advance by Lender shall not
constitute or be interpreted as either (a) an approval or acceptance by Lender
of the work done through the date of the Advance, or (b) a representation or
indemnity by Lender to any party against any deficiency or defect in the work or
against any breach of any contract. Inspections and approvals of the Plans and
Specifications, the Improvements, the workmanship and materials used in the
Improvements, and the exercise of any other right of inspection, approval, or
inquiry granted to Lender in this Agreement are acknowledged to be solely for
the protection of Lender's interests, and under no circumstances shall they be
construed to impose any responsibility or liability of any nature whatsoever on
Lender to any party. Neither Borrower nor any contractor, subcontractor,
materialman, laborer, or any other person shall rely, or have any right to rely,
upon Lender's determination of the appropriateness of any Advance. No
disbursement or approval by Lender shall constitute a representation by Lender
as to the nature of the Project, its construction, or its intended use for
Borrower or for any other person, nor shall it constitute an indemnity by Lender
to Borrower or to any other person against any deficiency or defects in the
Project or against any breach of any contract.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
Litigation. Promptly inform Lender in writing of (a) all material adverse
changes in Borrower's financial condition, and (b) all litigation and
claims and all threatened litigation and claims affecting Borrower or any
Guarantor which could materially affect the financial condition of
Borrower or the financial condition of any Guarantor.
. Maintain a standard modern system of accounting administered in
accordance with generally accepted accounting principles. Lender shall
have the right to examine the books of account of Borrower to the extent
that they pertain to this Agreement and the Property, and to discuss the
affairs, finances, and accounts of Borrower to such extent, all at such
reasonable times and intervals as Lender may desire. Borrower will
furnish to Lender, (i) within one hundred twenty (120) days after and as
of the close of each fiscal year, the year-end financial statements of
Borrower, including a balance sheet and a statement of earnings (income
and loss) from Borrower's business, as requested by Lender, in detail
satisfactory to Lender; (ii) upon an Event of Default, and within twenty
(20) days following Lender's request therefor, all such financial
information as may be necessary or appropriate for Lender's determination
of Borrower's net operating income and debt service with all such
financial information being prepared and certified as accurate by
Borrower; (iii) from time to time, upon Lender's request, tenant rent
rolls, leasing summary reports and cash flow projections (or updates
thereof), setting forth the status of all existing and anticipated leases
or subleases affecting the Property and Borrower's best estimate of the
revenues to be obtained and the expenses to be incurred in connection
with the operation of the Property for the following one-year period; and
(iv) within thirty (30) days after and as of the close of each quarter of
each fiscal year, the quarter-end financial statements of Borrower,
including a balance sheet and statement of earnings (income and loss)
from Borrower's business and from the Property, as requested by Lender,
in detail satisfactory to Lender. In addition to the above, Borrower
shall furnish Lender with, as soon as available, but in no event later
than one hundred twenty (120) days after the end of each fiscal year,
copies of Borrower's tax returns.
Additional Information. Furnish such additional information and
statements, lists of assets and liabilities, agings of receivables and
payables, inventory schedules, budgets, forecasts, tax returns, and other
reports with respect to Borrower's financial condition and business
operations as Lender may reasonably request from time to time.
Construction of the Project. Commence construction of the Project no
later than December 1, 1997, and cause the Improvements to be constructed
and equipped in a diligent and orderly manner and in strict accordance
with the Plans and Specifications approved by Lender, the Construction
Contract, and all applicable laws, ordinances, codes, regulations, and
rights of adjoining or concurrent property owners, and be completed to
the satisfaction of Lender no later than May 1, 1999 (unless extended
pursuant to the extension option provision of the Note).
Financial Covenants and Ratios. Comply with the following covenants and
ratios:
Tangible Net Worth. Maintain a minimum Tangible Net Worth plus
Subordinated Debt of not less than Seven Million and 00/100
Dollars ($7,000,000.00).
Minimum Working Capital. Maintain minimum working capital of not
less than Three Million and 00/100 Dollars ($3,000,000.00).
Current Ratio. Maintain a ratio of Current Assets to Current
Liabilities equal to or in excess of 1.10:1.00.
Debt Service Ratio. Maintain a minimum Debt Service ratio of
1.50:1.00.
Except as provided above, all computations made to determine compliance
with the requirements contained in this paragraph shall be made in
accordance with generally accepted accounting principles, applied on a
consistent basis, and certified by Borrower as being true and correct.
The above covenants shall be measured quarterly.
Loan Proceeds. Use the Loan funds solely for payment of bills and
expenses directly related to the Project.
Workers' Compensation Coverage. Provide to Lender proof of the general
contractor's compliance with all applicable workers' compensation laws
and regulations with regard to all work performed on the Project.
Defects. Upon demand of Lender, promptly correct any defect in the
Improvements or any departure from the Plans and Specifications not
approved by Lender before further work shall be done upon the portion of
the Improvements affected.
Project Claims and Litigation. Promptly inform Lender of (a) all material
adverse changes in the financial condition of the general contractor; (b)
any litigation and claims, actual or threatened, affecting the Project or
the general contractor, which could materially affect the successful
completion of the Project or the ability of the general contractor to
complete the Project as agreed; and (c) any condition or event which
constitutes a breach or default under any of the Related Documents or any
contract related to the Project.
Payment of Claims and Removal of Liens. (a) Cause all claims for labor
done and materials and services furnished in connection with the
Improvements to be fully paid and discharged in a timely manner, (b)
diligently file or procure the filing of a valid notice of completion of
the Improvements, or such comparable document as may be permitted under
applicable lien laws, (c) diligently file or procure the filing of a
notice of cessation, or such comparable document as may be permitted
under applicable lien laws, upon the happening of cessation of labor on
the Improvements for a continuous period of thirty (30) days or more, and
(d) take all reasonable steps necessary to remove all claims of liens
against the Property, the Improvements or any part of the Property or
Improvements, or any rights or interests appurtenant to the Property or
Improvements. Upon Lender's request, Borrower shall make such demands or
claims upon or against laborers, materialmen, subcontractors, or other
persons who have furnished or claim to have furnished labor, services, or
materials in connection with the Improvements, which demands or claims
shall under the laws of the State of Oregon require diligent assertions
of lien claims upon penalty of loss or waiver thereof. Borrower shall,
within ten (10) days after the filing of any claim of lien that is
disputed or contested by Borrower, provide Lender with a surety bond
issued by a surety acceptable to Lender sufficient to release the claim
of lien or deposit with Lender an amount satisfactory to Lender for the
possibility that the contest will be unsuccessful. If Borrower fails to
remove any lien on the Property or Improvements or provide a bond or
deposit pursuant to this provision, Lender may pay such lien, or may
contest the validity of the lien, and Borrower shall pay all costs and
expenses of such contest, including Lender's reasonable attorneys' fees.
Taxes and Claims. Pay and discharge when due all of Borrower's
indebtedness, obligations, and claims that, if unpaid, might become a
lien or charge upon the Property or Improvements; provided, however, that
Borrower shall not be required to pay and discharge any such
indebtedness, obligation, or claim so long as (a) its legality shall be
contested in good faith by appropriate proceedings, (b) the indebtedness,
obligation, or claim does not become a lien or charge upon the Property
or Improvements, and (c) Borrower shall have established on its books
adequate reserves with respect to the amount contested in accordance with
generally accepted accounting practices. If the indebtedness, obligation,
or claim does become a lien or charge upon the Property or Improvements,
Borrower shall remove the lien or charge as provided in the preceding
paragraph. Performance. Perform and comply with all terms, conditions,
and provisions set forth in this Agreement and in all other instruments
and agreements between Borrower and Lender, and in all other loan
agreements now or hereafter existing between Borrower and any other
party. Borrower shall notify Lender immediately in writing of any default
in connection with any agreement.
Additional Assurances. Make, execute, and deliver to Lender such Security
Agreements, instruments, documents, and other agreements reasonably
necessary to document and secure the Loan and to perfect Lender's
Security Interests in the Property and Improvements.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:
Loans, Acquisitions and Guaranties. (a) Loan money or assets other than
in the ordinary course of business, (b) purchase or acquire any interest
in any other enterprise or entity other than in the ordinary course of
business, or (c) incur any obligation as surety or guarantor other than
in the ordinary course of business.
Modification of Contract. Make or permit to be made any modification of
the Construction Contract.
Liens. Create or allow to be created any lien or charge upon the Property
or the Improvements.
GENERAL PROJECT PROVISIONS. The following provisions relate to the construction
and completion of the Project:
Change Orders. All requests for changes in the Plans and Specifications
involving total extra costs in excess of one percent (1%) of total
Project costs must be in writing, signed by Borrower and the architect,
and delivered to Lender for its approval. Borrower will not permit the
performance of any work pursuant to any change order or modification of
the Construction Contract or any subcontract without the written approval
of Lender. Borrower will obtain any required permits or authorizations
from governmental authorities having jurisdiction before approving or
requesting a new change order.
Purchase of Materials; Conditional Sales Contracts. No materials,
equipment, fixtures, or articles of personal property placed in or
incorporated into the Project shall be purchased or installed under any
Security Agreement or other agreement whereby the seller reserves or
purports to reserve title or the right of removal or repossession, or the
right to consider such items as personal property after their
incorporation into the Project, unless otherwise authorized by Lender in
writing.
Lender's Right of Entry and Inspection. Lender and its agents shall have
at all times the right of entry and free access to the Property and the
right to inspect all work done, labor performed, and materials furnished
with respect to the Project. Lender shall have unrestricted access to and
the right to copy all records, accounting books, contracts, subcontracts,
bills, statements, vouchers, and supporting documents of Borrower
relating in any way to the Project. Borrower agrees to pay on demand all
of Lender's out-of-pocket expenses for periodic inspections, reviews, or
reports that Lender, in its sole discretion, deems necessary and
appropriate for disbursement of the Loan Fund.
Lender's Right to Stop Work. If Lender in good faith determines that any
work or materials do not conform to the approved Plans and Specifications
or sound building practices, or otherwise depart from any of the
requirements of this Agreement, Lender may require the work to be stopped
and withhold disbursements until the matter is corrected. In such event,
Borrower will promptly correct the work to Lender's satisfaction. No such
action by Lender will affect Borrower's obligation to complete the
Improvements on or before the completion date required herein. Lender is
under no duty to supervise or inspect the construction or examine any
books and records. Any inspection or examination by Lender is for the
sole purpose of protecting Lender's security and preserving Lender's
rights under this Agreement. No default of Borrower will be waived by any
inspection by Lender. In no event will any inspection by Lender be a
representation that there has been or will be compliance with the Plans
and Specifications or that the construction is free from defective
materials or workmanship.
Indemnity. Borrower shall indemnify and hold Lender harmless from any and
all claims asserted against Lender or the Property by any person, entity,
or governmental body, or arising out of or in connection with the
Property, Improvements, or Project. Lender shall be entitled to appear in
any action or proceeding to defend itself against such claims, and all
costs incurred by Lender in connection with such defense, including
attorneys' fees, shall be paid by Borrower to Lender. Lender shall, in
its sole discretion, be entitled to settle or compromise any asserted
claims against it, and such settlement shall be binding upon Borrower for
purposes of this indemnification. All amounts paid by Lender under this
paragraph shall be secured by the Mortgage or Deed of Trust on the
Property, shall be deemed an additional principal Advance under the Loan,
payable upon demand, and shall bear interest at the rate applicable to
the Loan.
Publicity. Lender may display a sign at the construction site informing
the public that Lender is the construction lender for the Project
provided Lender complies with all applicable laws and regulations. During
construction, any sign placed on the Property will specify Lender as
providing construction financing. Lender may obtain other publicity in
connection with the Project through press releases, including a
description of the Property, Project, occupancy and rentals, and
participation in ground-breaking and opening ceremonies and similar
events.
Actions. Lender shall have the right to commence, appear in, or defend
any action or proceeding purporting to affect the rights, duties, or
liabilities of the parties to this Agreement, or the disbursement of
funds from the Loan Fund. In connection with this right, Lender may incur
and pay reasonable costs and expenses, including, but not limited to,
attorneys' fees, for both trial and appellate proceedings. Borrower
covenants to pay to Lender on demand all such expenses, together with
interest from the date Lender incurs the expense at the rate specified in
the Note, and Lender is authorized to disburse funds from the Loan Fund
for such purposes.
RIGHT OF SETOFF. To the extent any such accounts exist, Borrower grants to
Lender a contractual possessory security interest in, and hereby assigns,
conveys, delivers, pledges, and transfers to Lender all Borrower's right, title
and interest in and to, Borrower's accounts with Lender (whether checking,
savings, or some other account), including without limitation all accounts held
jointly with someone else and all accounts Borrower may open in the future,
excluding however all ▇▇▇▇▇, and trust accounts. Borrower authorizes Lender, to
the extent permitted by applicable law, to charge or setoff all sums owing on
the Indebtedness against any and all such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
Default on Indebtedness. Failure of Borrower to make any payment within
ten (10) days of when due on the Loans.
Other Defaults. Failure of Borrower or any Grantor to comply with or to
perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents, or
failure of Borrower or Grantor to comply with or to perform any other
term, obligation, covenant or condition contained in any other agreement
between Lender and Borrower or Grantor. If any failure, other than a
failure to pay money, is curable and if Borrower or Grantor, as the case
may be, has not been given a notice of a similar breach within the
preceding twelve (12) months, it may be cured (and no Event of Default
will have occurred) if Borrower or Grantor, as the case may be, after
receiving written notice from Lender demanding cure of such failure: (a)
cures the failure within thirty (30) days; or (b) if the cure requires
more than thirty (30) days, immediately initiates steps sufficient to
cure the failure and thereafter continues and completes all reasonable
and necessary steps sufficient to produce compliance within ninety (90)
days after notice is sent.
False Statements. Any warranty, representation, or statement made or
furnished to Lender by or on behalf of Borrower or any Grantor under this
Agreement or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished.
Defective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or
lien) at any time and for any reason.
Insolvency. The dissolution or termination of Borrower's existence as a
going business, insolvency, appointment of a receiver for any part of
Borrower's property, any assignment for the benefit of creditors, any
type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower. The death of
Borrower (or any member or partner of Borrower) shall also constitute an
event of default hereunder. Lender may, at its option, permit the
deceased's estate to assume unconditionally the obligations arising under
the Note in a manner reasonably satisfactory to Lender, and, in so doing,
cure the event of default.
Creditor Proceedings. Commencement of foreclosure, whether by judicial
proceeding, self-help, repossession or any other method, by any creditor
of Borrower or any creditor of any Grantor against any collateral
securing the Indebtedness. This includes a garnishment, attachment, or
levy on or of any of Borrower's deposit accounts with Lender. However,
this Event of Default shall not apply if there is a good faith dispute by
Borrower or Grantor, as the case may be, as to the validity or
reasonableness of the claim which is the basis of the creditor
proceeding, and if Borrower or Grantor gives Lender written notice of the
creditor proceeding and furnishes reserves or a surety bond for the
creditor proceeding satisfactory to Lender.
Events Affecting Guarantor. Any Guarantor seeks, claims, or otherwise
attempts to limit, modify, or revoke such Guarantor's guaranty with
Lender or any of the preceding events occurs with respect to any
Guarantor of any of the Indebtedness or such Guarantor dies or becomes
incompetent. Lender, at its option, may, but shall not be required to,
permit the Guarantor's estate to assume unconditionally the obligations
arising under the guaranty in a manner satisfactory to Lender, and, in
doing so, cure the Event of Default.
Insecurity. Lender, in good faith, deems itself insecure.
Breach of Construction Contract. The Improvements are not constructed in
accordance with the Plans and Specifications or in accordance with the
terms of the Construction Contract.
Cessation of Construction. Prior to the completion of construction of the
Improvements and equipping of the Project, the construction of the
Improvements or the equipping of the Project is abandoned or work thereon
ceases for a period of more than ten (10) days for any reason, or the
Improvements are not completed for purposes of final payment to the
general contractor prior to the completion date represented by Borrower
to Lender, regardless of the reason for the delay.
Transfer of Property. Sale, transfer, hypothecation, assignment, or
conveyance of the Property or the Improvements or any portion thereof or
interest therein by Borrower or any Grantor without Lender's prior
written consent.
Condemnation. All or any material portion of the Property is condemned,
seized, or appropriated without compensation, and Borrower does not
within thirty (30) days after such condemnation, seizure, or
appropriation, initiate and diligently prosecute appropriate action to
contest in good faith the validity of such condemnation, seizure, or
appropriation.
EFFECT OF AN EVENT OF DEFAULT; REMEDIES. Upon the occurrence of any Event of
Default and at any time thereafter, Lender may, at its option, but without any
obligation to do so, and in addition to any other right Lender may have, do any
one or more of the following without notice to Borrower: (a) Cancel this
Agreement; (b) Institute appropriate proceedings to enforce the performance of
this Agreement; (c) Withhold further disbursement of Loan Funds; (d) Expend
funds necessary to remedy the default; (e) Take possession of the Property and
continue construction of the Project; (f) Accelerate maturity of the Note and/or
Indebtedness and demand payment of all sums due under the Note and/or
Indebtedness; (g) Bring an action on the Note and/or Indebtedness; (h) Foreclose
the Mortgage or Deed of Trust on the Property in any manner available under law;
and (i) Exercise any other right or remedy which it has under the Note or
Related Documents, or which is otherwise available at law or in equity or by
statute.
COMPLETION OF IMPROVEMENTS BY LENDER. If Lender takes possession of the
Property, it may take any and all actions necessary in its judgment to complete
construction of the Improvements, including but not limited to making changes in
the Plans and Specifications, work, or materials and entering into, modifying or
terminating any contractual arrangements, subject to Lender's right at any time
to discontinue any work without liability. If Lender elects to complete the
Improvements, it will not assume any liability to Borrower or to any other
person for completing the Improvements or for the manner or quality of
construction of the Improvements, and Borrower expressly waives any such
liability. Borrower irrevocably appoints Lender as its attorney-in-fact, with
full power of substitution, to complete the Improvements, at Lender's option,
either in Borrower's name or in its own name. In any event, all sums expended by
Lender in completing the construction of the Improvements will be considered to
have been disbursed to Borrower and will be secured by the collateral for the
Loan. Any such sums that cause the principal amount of the Loan to exceed the
face amount of the Note will be considered to be an additional Loan to Borrower,
bearing interest at the Note rate and being secured by the collateral. For these
purposes, Borrower assigns to Lender all of its right, title and interest in and
to the Project Documents; however Lender will not have any obligation under the
Project Documents unless Lender expressly hereafter agrees to assume such
obligations in writing. Lender will have the right to exercise any rights of
Borrower under the Project Documents upon the occurrence of an Event of Default.
All rights, powers, and remedies of Lender under this Agreement are cumulative
and alternative, and are in addition to all rights which Lender may have under
applicable law.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
Agency. Nothing in this Agreement shall be construed to constitute the
creation of a partnership or joint venture between Lender and Borrower or
any contractor. Lender is not an agent or representative of Borrower.
This Agreement does not create a contractual relationship with and shall
not be construed to benefit or bind Lender in any way with or create any
contractual duties by Lender to any contractor, subcontractor,
materialman, laborer, or any other person.
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement. No alteration of or amendment to
this Agreement shall be effective unless given in writing and signed by
the party or parties sought to be charged or bound by the alteration or
amendment.
Applicable Law. THIS AGREEMENT HAS BEEN DELIVERED TO LENDER AND ACCEPTED
BY LENDER IN THE STATE OF OREGON. IF THERE IS A LAWSUIT, BORROWER AGREES
UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE COURTS OF
MULTNOMAH COUNTY, THE STATE OF OREGON. LENDER AND BORROWER HEREBY WAIVE
THE RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
BROUGHT BY EITHER LENDER OR BORROWER AGAINST THE OTHER. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF OREGON.
Arbitration. Except as provided below, Lender and Borrower agree that all
disputes, claims and controversies between them, whether individual,
joint, or class in nature, arising from this Agreement or otherwise,
including without limitation contract and tort disputes, shall be
arbitrated pursuant to the then effective arbitration rules of the
Arbitration Service of Portland, Inc., or the then effective commercial
arbitration rules of the American Arbitration Association, whichever
organization is selected by the party which first initiates arbitration
by filing a claim in accordance with the filing rules of the organization
selected. Notwithstanding the above, Lender's actions to take or dispose
of any Collateral shall not be prohibited by this arbitration agreement
nor constitute a waiver of this arbitration provision as to all other
disputes. This includes, without limitation, obtaining injunctive relief
or a temporary restraining order; foreclosing by notice and sale under
any deed of trust or mortgage; obtaining a writ of attachment or
imposition of a receiver; or exercising any rights relating to personal
property, including taking or disposing of such property with or without
judicial process pursuant to Article 9 of the Uniform Commercial Code.
Any disputes, claims, or controversies concerning the lawfulness or
reasonableness of any act, or exercise of any right, concerning any
Collateral, including any claim to rescind, reform, or otherwise modify
any agreement relating to the Collateral, shall also be arbitrated,
provided however that no arbitrator shall have the right or the power to
enjoin or restrain any act of any party. Judgment upon any award rendered
by any arbitrator may be entered in any court having jurisdiction.
Nothing in this Agreement shall preclude any party from seeking equitable
relief from a court of competent jurisdiction. The statute of
limitations, estoppel, waiver, laches, and similar doctrines which would
otherwise be applicable in an action brought by a party shall be
applicable in any arbitration proceeding, and the commencement of an
arbitration proceeding shall be deemed the commencement of an action for
these purposes.
Authority to File Notices. Borrower appoints and designates Lender as its
attorney-in-fact to file for record any notice that Lender deems
necessary to protect its interest under this Agreement. This power shall
be deemed coupled with an interest and shall be irrevocable while any sum
or performance remains due and owing under any of the Related Documents.
Maintenance of Depository Relationship. Borrower shall, at all times
while any portion of the Note remains unpaid, maintain a depository
relationship with Lender, or a subsidiary or affiliate of Lender, unless
the same is contrary to state or federal law or regulation.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the
provisions of this Agreement.
Lender's Right to Sell Participations in the Loan. Lender may at any time
sell, assign, transfer, negotiate, grant participations in, or otherwise
dispose of, to any one or more other lenders (hereinafter called
"Participants") all or any part of the indebtedness of Borrower at any
time outstanding under the Note, this Agreement, or any of the Related
Documents (collectively, the "Loan Documents"). Borrower acknowledges and
agrees that any such disposition will give rise to an obligation of
Borrower to each Participant and that, in such event, each Participant
shall, for all purposes hereof, be entitled to the benefits of the Loan
Documents and all other documents, instruments, and agreements therein
described, as its interest may appear. Borrower shall, from time to time
at the request of Lender, execute and deliver, or cause to be executed
and delivered, to Lender or to such party or parties (including any
Participant) as Lender may designate, any and all such further
instruments as may in the opinion of Lender be necessary or desirable to
give full force and effect to such disposition, including, but not
limited to, a new note or new notes to be issued in exchange for the Note
and such estoppel certificates or other instruments as may be requested
from Borrower to evidence the continuing validity of the Loan Documents
and the absence of any default by Lender thereunder. Notwithstanding the
foregoing, Borrower acknowledges that no Participant shall be deemed a
direct lender or co-lender with Lender.
Costs and Expenses. Borrower agrees to pay upon demand all of Lender's
out-of-pocket expenses, including attorneys' fees, incurred in connection
with this Agreement or in connection with the Loans made pursuant to this
Agreement. Lender may pay someone else to help collect the Loans and to
enforce this Agreement, and Borrower will pay that amount. This includes,
subject to any limits under applicable law, Lender's attorneys' fees and
legal expenses, whether or not there is a lawsuit, including attorneys'
fees for arbitration and bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services. Borrower also will pay any
court costs, in addition to all other sums provided by law.
Entire Agreement. This Agreement and the Related Documents constitute all
of the agreements between the parties relating to the Project and
supersede all other prior or concurrent oral or written agreements or
understandings relating to the Project.
Notices. All notices required to be given under this Agreement shall be
given in writing and shall be effective when actually delivered or when
deposited in the United States mail, first class, postage prepaid,
addressed to the party to whom the notice is to be given at the address
shown above. Any party may change its address for notices under this
Agreement by giving formal written notice to the other parties,
specifying that the purpose of the notice is to change the party's
address. To the extent permitted by applicable law, if there is more than
one Borrower, notice to any Borrower will constitute notice to all
Borrowers. For notice purposes, Borrower agrees to keep Lender informed
at all times of Borrower's current address(es).
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of
this Agreement in all other respects shall remain valid and enforceable.
Survival. All warranties, representations, and covenants made by Borrower
in this Agreement or in any certificate or other instrument delivered by
Borrower to Lender under this Agreement shall be considered to have been
relied upon by Lender and will survive the making of the Loan and
delivery to Lender of the Related Documents, regardless of any
investigation made by Lender or on Lender's behalf.
Time of the Essence. Time is of the essence hereof.
Waiver. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No
delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by Lender
of a provision of this Agreement shall not prejudice or constitute a
waiver of Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Agreement. No prior waiver by
Lender, nor any course of dealing between Lender and Borrower, or between
Lender and any Grantor, shall constitute a waiver of any of Lender's
rights or of any obligations of Borrower or of any Grantor as to any
future transactions. Whenever the consent of Lender is required under
this Agreement, the granting of such consent by Lender in any instance
shall not constitute continuing consent in subsequent instances where
such consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender.
Multiple Parties; Corporate Authority. All obligations of Borrower under
this Agreement shall be joint and several, and all references to Borrower
shall mean each and every Borrower. This means that each of the Borrowers
signing below is responsible for all obligations in this Agreement. Where
any one or more of the parties are corporations or partnerships or
limited liability companies, it is not necessary for Lender to inquire
into the powers of any of the parties or of the officers, directors,
partners, members, or agents acting or purporting to act on their behalf.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY LENDER AFTER
OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR
PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY LENDER TO
BE ENFORCEABLE.
EACH BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS CONSTRUCTION
LOAN AGREEMENT, AND EACH BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED
AS OF DECEMBER 1, 1997.
BORROWER:
Timberline Software Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
-------------------------------
Its: Senior Vice President
------------------------------
LENDER:
Pacific One Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Authorized Officer