HomeMy WebLinkAboutItem 01- Downtown Real Property AgreementAGENDA ITEM SUMMARY Meeting Date: 4/8/2024
Meeting Type: Regular Meeting
Department: CMO
Staff Contact: Allie Camp
S P R I N G F I E L D ECONOMIC Staff Phone No: 541-726-3688
DEVELOPMENT AGENCY Estimated Time: 5 minutes
ITEM TITLE: DOWNTOWN REAL PROPERTY AGREEMENT
ACTION
REQUESTED:
Authorize the City Manager to negotiate and enter into an Option Agreement with
U.S. Bank for one tax lot in Downtown Springfield Map 17-03-35-31, Tax Lot
11200, upon the terms substantially provided in Attachment 1.
ISSUE
STATEMENT:
The Springfield Economic Development Agency (SEDA) has an Option Agreement
for 437 Main Street, currently owned by U.S. Bank. City Attorney’s Office and
outside counsel have provided input to reflect SEDA’s interests.
ATTACHMENTS: 1. Option Agreement
DISCUSSION/
FINANCIAL
IMPACT:
Staff are requesting that SEDA approve an Option Agreement (ATT 1) for one
parcel of land in Downtown Springfield owned by U.S. Bank at 437 Main Street.
Staff are using outside legal counsel at Radler, White, Parks, and Alexander to
navigate this transaction. The key business points in the Agreement are as follows-
• The property sale price is the list price or appraised value, whichever is
lower. This is for an “as is” purchase.
• SEDA’s Option Payment is 3% of the list price ($43,500). Money for the
Option goes towards the Purchase Price at close. If the Option is terminated
because of due diligence findings, SEDA would receive the Option
Payment back, less $10.
• SEDA will be issued a quitclaim deed unless a different type of deed form
is required by the Title Company to issue the Title Policy.
• This transaction does not include any personal property.
• This agreement is the same agreement that would be used for the purchase.
The entrance into the Option Agreement begins the Option Term. The Option Term
starts a 30-day due diligence period. Staff will return to SEDA with findings from
the due diligence period to determine how to proceed. Due diligence activities are
anticipated to cost between $15,000 and $20,000. Should SEDA proceed, closing
must occur within 10 business days from notice of exercising the Option, and no
more than 60 days from the Option Term.
The property is a large lot in a strategic location connecting South A. Street and
Main Street. The site is 0.71 acres and is zoned Mixed Use Commercial. The
Springfield Development Code states the primary development objectives of the
zone are to expand housing opportunities; allow businesses to locate in a variety of
settings; provide options for living, working, and shopping environments; facilitate
more intensive use of land while minimizing potentially adverse impacts; and
provide options for pedestrian-oriented lifestyles. SEDA’s interest in acquisition is
for future redevelopment of the site.
The property will need to be added to the Downtown Urban Renewal Plan Section
700 C. by Resolution. Staff will return with that Resolution at a later date.
Springfield, OR
Site No. 8684
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OPTION AGREEMENT
THIS OPTION AGREEMENT (this “Agreement”) is entered into as of __________, 2024
(the “Effective Date”), by and between U.S. BANK NATIONAL ASSOCIATION, a national
banking association (“Seller”), and SPRINGFIELD ECONOMIC DEVELOPMENT AGENCY,
an urban renewal agency of the City of Springfield, a municipal corporation of the state of Oregon
(“Buyer”).
RECITALS
A. Seller is the owner of certain real property (together with all buildings and
improvements located thereon, if any, the “Real Property”) located at 437 Main Street in
Springfield, Oregon, which real property is legally described on Exhibit A.
B. Buyer desires to secure from Seller the option to purchase (a) the Real Property,
and (b) all transferable licenses, permits, entitlements, government approvals, warranties,
guaranties, and other appurtenances and general intangibles benefiting or appurtenant to the Real
Property, including, without limitation, Seller’s interest in all mineral rights, water rights,
transferable development rights, and any rights in abutting rights of way (“General Intangibles”),
all on the terms contained in this Agreement. The Real Property and General Intangibles are
sometimes collectively referred to herein as the “Property”.
C. Seller is willing to grant such option to Buyer, subject to and upon the terms and
conditions of this Agreement.
ACCORDINGLY, in consideration of the above Recitals and for other good and valuable
consideration, including the mutual agreement to the terms and conditions hereinafter contained,
Seller and Buyer hereby agree as follows:
1. Grant of Option. Seller hereby grants to Buyer an option (the “Option”) to purchase
the Property during the Option Term (as defined in Section 2), subject to and upon the terms and
conditions of this Agreement.
2. Option Term. The term of the Option (the “Option Term”) shall commence on the
Effective Date and shall continue until 5:00 p.m. Pacific time on the thirtieth (30th) day after the
Contingency Date, unless sooner terminated as provided in this Agreement. In the event the Option
Term expires without Buyer having exercised the Option by closing on the purchase of the
Property, then this Agreement shall automatically expire and terminate effective as of the date and
time of such expiration, and the Earnest Money (as defined in Section 3.1.1) shall be disbursed to
Seller.
3. Purchase Price. The “Purchase Price” for the Property shall be the lesser of (a)
One Million Four Hundred Fifty Thousand and No/100 Dollars ($1,450,000.00), and (b) the value
of the Property as determined by an MAI appraisal obtained by Buyer, payable as follows:
3.1. Earnest Money.
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3.1.1 Initial Deposit. Within five (5) days after the Effective Date, Buyer
shall deposit an initial earnest money deposit in the amount of Forty-Three
Thousand Five Hundred and No/100 Dollars ($43,500.00) (the “Initial Deposit”)
into escrow with First American Title Insurance Company, 121 S. 8th Street, Suite
1250, Minneapolis, Minnesota 55402 (“Title Company”) by wire transfer of
immediately available funds. If Buyer fails to timely deliver the Initial Deposit, as
Seller’s sole and exclusive remedy, this Agreement shall immediately terminate
and be of no further force or effect (subject to Section 15). As used in this
Agreement, the “Earnest Money” shall mean the Initial Deposit, plus all interest
earned on the deposit. The Earnest Money shall be non-refundable, except as
otherwise expressly provided in this Agreement, and will be credited against the
Purchase Price at Closing (as defined in Section 6.1).
3.2. Balance of Purchase Price. Buyer will pay the balance of the Purchase Price
pursuant to Section 6.
4. Due Diligence.
4.1. Entry; Inspections. Subject to the terms of this Section 4.1, Buyer and its
officers, directors, employees, shareholders, members, partners, consultants, contractors
and agents (collectively, the “Buyer Parties”) shall have the right to enter the Property
during the Executory Period (as defined in Section 9 below) and during normal business
hours to inspect the same, perform surveys, environmental assessments, soil and other tests
and investigations Buyer deems necessary in its sole and absolute discretion to evaluate
the condition of the Property (collectively, the “Reports”); provided, however, no Buyer
Parties may perform a “Phase II” or other follow-up environmental inspection or any soil
or other testing that involves any borings or other invasive testing of any kind without
Seller’s prior written consent, which consent Seller shall not unreasonably withhold,
condition or delay. Buyer shall (a) give Seller reasonable advance notice prior to any entry
to the Property, (b) comply with the terms of any leases affecting the Property in connection
with any such entry, and (c) permit Seller to have a representative present during any such
entry. Buyer shall restore any damage to the Property caused by such entry or inspection
and shall indemnify and hold Seller harmless from all liabilities incurred by Seller and
arising out of any such entry or inspection; provided, however, that Buyer shall not be
required to indemnify Seller if and to the extent that any such liabilities were (i) caused by
the gross negligence or misconduct of Seller, its employees, representatives or its agents,
or (ii) related to pre-existing conditions at the Property discovered by Buyer or its agents,
representatives, consultants, or contractors. At all times during the performance of any such
entry or inspection and prior to entering the Property pursuant to this Section 4.1, Buyer
shall obtain and keep in full force and effect or shall cause any consultant entering onto the
Property to obtain in full force and effect a policy of commercial general liability insurance
with an insurance company licensed to do business in the state where the Property is located
and having a rating of at least “A-VII” by A.M. Best Company with a combined single
limit of not less than Two Million Dollars ($2,000,000.00) on an occurrence basis for
bodily or personal injury or death and Three Million Dollars ($3,000,000.00) aggregate per
location (provided that such limits may be achieved through an umbrella or excess liability
policy), insuring all activity and conduct of Buyer and the Buyer Parties during any such
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entry or inspection, including property damage, personal injury or death and contractual
liability coverage. Seller shall be named an insured on such insurance policy, and Buyer
shall provide proof of such insurance to Seller, in a form reasonably acceptable to Seller,
prior to any such entry. Buyer’s obligations under this Section 4.1 shall survive Closing or
any termination of this Agreement; provided that the liability insurance required under this
Section 4.1 does not need to be kept in full force or effect after Closing or after the
expiration or termination of this Agreement, whichever is earliest.
4.2. Examination of Title.
4.2.1 Within five (5) days of the Effective Date, Seller shall deliver to
Buyer a preliminary title report or a commitment for an ALTA owner’s policy of title
insurance covering the Property (the “Title Commitment”) issued by Title Company and
showing record title of the Property and all liens, claims, encumbrances, easements,
rights-of-way, encroachments, reservations, restrictions, and all other matters of record
affecting the Property, together with legible copies of all such matters, including vesting
and exception instruments, listed in the Title Commitment. Buyer may perform, at its
discretion and at its sole cost and expense, a survey of the Property (the “Survey”). The
Title Commitment and the Survey, if any, (together with any such update thereof) shall
sometimes be referred to in this Agreement as the “Title Evidence”.
4.2.2 Buyer shall have ten (10) days after receipt of the Title Commitment,
legible copies of all vesting and exception documents listed in the Title Commitment and
the Survey (the “Title Review Period”) to object in writing to any liens, encumbrances,
and other matters reflected by the Title Commitment or Survey. All such matters to which
Buyer so objects shall be “Objected Encumbrances.” If no such objection notice is given
during the Title Review Period, all matters reflected by the Title Commitment shall be
“Permitted Encumbrances.” Seller may, but shall not be obligated to, at its cost, cure,
remove or insure around all Objected Encumbrances, and Seller shall give Buyer written
notice of its intent thereof within ten (10) days after the Title Review Period expires.
Seller’s failure to respond to Buyer’s notice shall be deemed an election not to cause the
removal of any Objected Encumbrances. If Seller does not elect to cause all of the Objected
Encumbrances to be removed, cured or insured around, then Buyer may deliver notice to
Seller within five (5) days after Seller’s notice (or within five (5) days of the last day by
which Seller’s notice should have been received if Seller fails to respond to Buyer’s notice)
indicating Buyer’s election to either (a) terminate this Agreement, in which event Ten and
No/100 Dollars ($10.00) of the Initial Deposit shall be disbursed to Seller as part of the
consideration for the Buyer’s grant of the Option, the balance of the Earnest Money shall
be disbursed to Buyer, and the parties will have no further obligations under this
Agreement; or (b) purchase the Property subject to the Objected Encumbrances in which
event such Objected Encumbrances shall thereafter be Permitted Encumbrances. Buyer’s
failure to timely deliver notice pursuant to Section 4.2.2(a) or (b) shall be deemed Buyer’s
election to terminate this Agreement. Notwithstanding the foregoing, Seller shall remove
from title on or prior to Closing each and every of the following exceptions whether or not
Buyer raises such items in a title objection: (w) liens securing a deed of trust or other
document or instrument evidencing indebtedness of Seller; (x) judgement liens against
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Seller; (y) delinquent tax liens; and (z) mechanic and materialmen liens not created by or
through Buyer.
4.2.3 If, at any time prior to the Closing, any new exceptions to title to the
Property are identified by Title Company or appear on a survey of the Real Property, Buyer
shall have until the date which is five (5) Business Days after its receipt of the supplement
to the Title Commitment or survey (the “New Exception Review Period”) to object in
writing to any such new title and survey exceptions. If no such objection notice is given
during the New Exception Review Period, any matters reflected in the supplement to the
Title Commitment or survey shall be Permitted Encumbrances. Seller may, but shall not
be obligated to, at its cost, remove from title any new Objected Encumbrances, and Seller
shall give Buyer written notice of its intent thereof within five (5) Business Days after the
New Exception Review Period expires. If Seller does not elect in writing to cause any new
Objected Encumbrances to be removed or does not timely respond to Buyer’s objection,
then Buyer may deliver notice to Seller prior to the date which is twelve (12) Business
Days after the New Exception Review Period expires indicating Buyer’s election to either
(a) terminate this Agreement, in which event Ten and No/100 Dollars ($10.00) of the Initial
Deposit shall be disbursed to Seller as part of the consideration for the Buyer’s grant of the
Option, the balance of the Earnest Money shall be disbursed to Buyer, and the parties will
have no further obligations under this Agreement; or (b) purchase the Property subject to
any new Objected Encumbrances in which event such new Objected Encumbrances shall
thereafter be Permitted Encumbrances. Notwithstanding the foregoing, if Seller does not
cause any Objected Encumbrances to be removed but the Title Company independently
removes any such Objected Encumbrances, then they shall be deemed Permitt ed
Encumbrances hereunder. Buyer’s failure to timely deliver notice pursuant to Section
4.2.3(a) or (b) shall be deemed Buyer’s election to terminate this Agreement.
4.3 New Matters. If, at any time between the Effective Date and Closing, any
Hazardous Substances have been introduced on or under the Property in violation of law,
Buyer shall have ten (10) Business Days after being given written notice thereof or
otherwise becoming actually aware of the Hazardous Substances (the “Evaluation Period”)
within which to evaluate the Hazardous Substances and elect, in the exercise of its sole and
absolute discretion to either waive the condition and proceed to Closing or terminate this
Agreement by written notice delivered to Seller, on or prior to the Closing Date. If Buyer
so elects to terminate this Agreement, Ten and No/100 Dollars ($10.00) of the Initial
Deposit shall be disbursed to Seller as part of the consideration for the Buyer’s grant of the
Option, and the balance of the Earnest Money shall be disbursed to Buyer. The Closing
will be automatically extended if and as necessary to accommodate the review, objection
and response times under Section 4.2.3 and this Section 4.3.
4.4. Governmental Approvals. Buyer may seek such permits, licenses, zoning,
variances, subdivision, entitlements and development rights desired by Buyer for the
development or use of the Property (collectively, the “Governmental Approvals”). Seller
will reasonably cooperate with Buyer in connection with the Governmental Approvals,
including executing such documents as are reasonably necessary to permit Buyer to submit
application materials in connection with the Governmental Approvals. Notwithstanding
the foregoing, (a) the Governmental Approvals will not be effective and will not result in
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a change of zoning, or cause or create any liens or encumbrances against any portion of the
Property, unless and until the Closing occurs, (b) the Governmental Approvals will not
result in any liability or obligation whatsoever to Seller, and (c) Seller will not be obligated
to incur any out-of-pocket expenses in connection with any of the Governmental
Approvals.
4.5. Confidentiality. Unless and until the Closing occurs, Buyer agrees to not
disclose the Title Evidence, the Reports, or the contents of any thereof, or any information
disclosed, discovered or determined in connection with Buyer’s investigations of the
Property (collectively, the “Confidential Information”) to any person or entity other than
(a) Buyer’s employees, board members, officers, directors, attorneys, accountants,
surveyors, architects, contractors or other business consultants assisting Buyer in this
transaction, third parties as required under applicable law, and Buyer’s potential investors
and lenders, (b) in response to lawful process or subpoena or order of a court of competent
jurisdiction, and (c) in any filings with governmental authorities required by reason of the
transactions provided for herein. Any such disclosure to third parties shall include a
statement from Buyer that such information is confidential and shall be so treated by the
third party, except for disclosures required by applicable law. If this Agreement is
terminated or the Closing does not occur for any reason, Buyer shall promptly deliver to
Seller or destroy all copies of the Confidential Information (including any provided to any
third parties by or on behalf of Buyer), except where said delivery or destruction would
conflict with Buyer’s obligations under applicable law. Buyer’s obligations under this
Section 4.5 shall survive any termination of this Agreement.
5. Conditions Precedent.
5.1. Contingency Date. As used in this Agreement, the “Contingency Date”
shall mean the earlier to occur of (a) the date Buyer gives the Preliminary Exercise Notice,
and (b) the first business day occurring thirty (30) days after the Effective Date.
5.2. Buyer’s Conditions. Buyer’s obligations under this Agreement are
contingent upon the satisfaction (or waiver by Buyer) of the following conditions
precedent:
5.2.1 General Contingency. On or before the Contingency Date, Buyer
shall have determined that it is satisfied with its review and analysis of the
Permitted Exceptions, the Reports and the results and matters disclosed by Buyer’s
inspection of the Property (including all physical aspects and conditions of the
Property, including the repair and condition of the Improvements, the
environmental condition, soils, access and utility services with respect to the
Property).
5.2.2 Title Policy. At the Closing, the Title Company shall be irrevocably
committed to issue to Purchaser a 2006 ALTA Extended Owner’s policy of title
insurance in the amount of the Purchase Price subject only to Permitted
Encumbrances (the “Title Policy”).
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5.2.3 Governmental Approvals. On or before the Contingency Date,
Buyer shall have received or determined that it will receive the Governmental
Approvals on a timely basis.
5.2.4 Seller’s Representations. On the Closing Date, each of the
representations and warranties of Seller in Section 7.2 shall be true and correct as
if the same were made on the Closing Date.
5.2.5 Seller Default. On the Closing Date, Seller shall not be in default of
any of its obligations under this Agreement.
5.2.6 Removal of ATM. On or prior to the Closing Date, Seller shall have
removed the automated teller machine that is attached to the building located on the
Property (“ATM”) and secured the opening in the building resulting from the
removal of the ATM with plywood that covers the entirety of such opening and is
placed in and secured from the inside of the building located on the Property.
If any conditions in this Section 5.2 have not been satisfied on or before the applicable date
set forth in this Section 5.2 with respect to each condition, then Buyer may terminate this
Agreement by notice to Seller on or before the applicable date (subject to Section 15), and
Ten and No/100 Dollars ($10.00) of the Initial Deposit shall be disbursed to Seller as part
of the consideration for the Buyer’s grant of the Option, and the balance of the Earnest
Money shall be disbursed to Buyer. To the extent that any of the conditions in this
Section 5.2 require the satisfaction of Buyer, such satisfaction shall be determined by
Buyer in its sole but reasonable discretion. The conditions in this Section 5.2 are
specifically stated and for the sole benefit of Buyer. Buyer in its discretion may unilaterally
waive (conditionally or absolutely) the fulfillment of any one or more of the conditions, or
any part thereof, by notice to Seller. If Buyer fails to timely terminate this Agreement on
or before the applicable date, then the applicable condition shall be deemed to be satisfied
and waived by Buyer. Notwithstanding the foregoing, if Seller fails to timely complete
removal of the ATM, then, in addition to the foregoing options, Buyer may unilaterally
extend the Closing Date to allow Seller additional time to complete such removal.
5.3. Seller’s Conditions. Seller’s obligation to close the transaction
contemplated by this Agreement is contingent upon the satisfaction (or waiver by Seller)
of the following conditions precedent:
5.3.1 Buyer’s Representations. On the Closing Date, each of the
representations and warranties of Buyer in Section 7.1 shall be true and correct in
all material respects as if the same were made on the Closing Date.
5.3.2 Buyer Default. On the Closing Date, Buyer shall not be in material
breach of any of its obligations under this Agreement.
5.3.3 Preliminary Exercise Notice. On or before the Contingency Date,
Buyer shall have delivered the Preliminary Exercise Notice in the form and manner
set forth in Section 6.1.
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If any conditions in this Section 5.3 have not been satisfied on or before the applicable date
set forth in this Section 5.3 with respect to each condition, then Seller may terminate this
Agreement by notice to Buyer on or before the applicable date (subject to Section 15), and,
subject to Section 5.2 the Earnest Money shall be disbursed to Seller. To the extent that
any of the conditions in this Section 5.3 require the satisfaction of Seller, such satisfaction
shall be determined by Seller in its sole but reasonable discretion. The conditions in this
Section 5.3 are specifically stated and for the sole benefit of Seller. Seller in its discretion
may unilaterally waive (conditionally or absolutely) the fulfillment of any one or more of
the conditions, or any part thereof, by notice to Buyer. If Seller fails to timely terminate
this Agreement on or before the applicable date, then the applicable condition shall be
deemed to be satisfied and waived by Seller.
6. Exercise of Option; Closing.
6.1 Preliminary Exercise Notice; Closing. At any time during the Option Term,
Buyer may give one (1) written notice (the “Preliminary Exercise Notice”) to Seller that
Buyer intends to exercise the Option. The Preliminary Exercise Notice shall specify a date
during the Option Term (the “Closing Date”) no sooner than ten (10) business days from
the date of the Preliminary Exercise Notice and no later than the expiration of the Option
Term, for the formal exercise of the Option in accordance with the terms hereof (the
“Closing”). The Closing will occur through the deposit of documents, deliveries and funds
into an escrow established with Title Company pursuant to Seller’s and Buyer’s respective
closing instructions to Title Company, which instructions shall be consistent with the terms
of this Agreement. Possession of the Property will be delivered to Buyer on the Closing
Date, subject to the Permitted Encumbrances.
6.2. Exercise Notice. Provided that Buyer has given the Preliminary Exercise
Notice in accordance with Section 6.1, the Option may be exercised at any time on or
before the Closing Date by Buyer (a) paying to Title Company the Purchase Price less the
Earnest Money paid (such balance of the Purchase Price, the “Exercise Payment”), by
wire transfer of immediately available funds, (b) giving Seller a written notice (the
“Exercise Notice”) of its election to do so, and (c) delivering to Title Company all of the
instruments and other deliveries required pursuant to Section 6.4 with no condition to such
delivery to Title Company except those expressly specified in this Agreement. Buyer’s
failure to satisfy conditions (a), (b) and (c) set forth in the preceding sentence shall render
Buyer’s attempted exercise of the Option null and void.
6.3. Seller’s Closing Deliveries. No later than the Closing Date, Seller shall
deliver or cause to be delivered into escrow with Title Company the following, properly
completed and duly executed by Seller and notarized where applicable, and in
commercially reasonable form (collectively, “Seller’s Closing Deliveries”):
6.3.1 Deed. A quitclaim deed conveying the Property to Buyer, unless a
different form of deed is required by the Title Company to issue the Title Policy to
Buyer, then the deed form required by the Title Company, subject only to the
Permitted Encumbrances (the “Deed”).
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6.3.2 Seller’s Affidavit. An affidavit of Seller regarding liens judgments,
parties in possession, mechanics’ or materialmens’ liens and other matters affecting
title to the Property which are caused by Seller, and which is otherwise consistent
with the “as is” nature of this transaction and a quit claim conveyance of the
Property, but in any event sufficient for the Title Company to issue the Title Policy
to Buyer.
6.3.3 FIRPTA. A transferor’s certification stating that Seller is not a
“foreign person”, “foreign partnership”, “foreign trust” or “foreign estate” as those
terms are defined in Section 1445 of the Internal Revenue Code, and containing
such additional information as may be required thereunder.
6.3.4 Restrictive Covenant. A Restrictive Covenant in the form attached
hereto as Exhibit B.
6.3.5 Miscellaneous. Any customary closing documents in commercially
reasonable form and substance and consistent with this Agreement which (a) Title
Company may reasonably determine are necessary to evidence the authority of
Seller to enter into and perform this Agreement and the documents and instruments
required to be executed and delivered by Seller pursuant to this Agreement, or (b)
may be required of Seller under applicable law, including any revenue or tax
certificates or statements.
6.3.6 Settlement Statement. A settlement statement consistent with this
Agreement.
6.4. Buyer’s Closing Deliveries. No later than the Closing Date, Buyer shall
deliver or cause to be delivered into escrow with Title Company, in addition to any other
items required by this Agreement, the following, properly completed and duly signed by
Buyer and notarized where applicable, and in commercially reasonable form (collectively,
“Buyer’s Closing Deliveries”):
6.4.1 Purchase Price. The balance of the Purchase Price by wire transfer
of immediately available funds.
6.4.2 Miscellaneous. Any customary closing documents in commercially
reasonable form and substance and consistent with this Agreement which (i) Title
Company may reasonably determine are necessary to evidence the authority of
Buyer to enter into and perform this Agreement and the documents and instruments
required to be executed and delivered by Buyer pursuant to this Agreement, or
(ii) may be required of Buyer under applicable law, including any revenue or tax
certificates or statements.
6.4.3 Settlement Statement. A settlement statement consistent with this
Agreement.
6.5. Adjustments and Prorations. The following adjustments will be made to the
Purchase Price at Closing:
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6.5.1 Real Estate Taxes. General real estate taxes applicable to any of the
Property due and payable in the year of Closing shall be prorated between Seller
and Buyer on a daily basis as of the Closing Date based upon a calendar year, with
Seller being responsible for those allocable to the period prior to the Closing Date
and Buyer being responsible for those allocable to the Closing Date and subsequent
thereto. If there is any tax refund or rebate related to the year of Closing, the refund
or rebate (after deducting the fees and other costs attributable to such refund or
rebate) will be allocated between Seller and Buyer on the same basis as proration
of taxes under this Section 6.5.1.
6.5.2 Assessments. All special assessments (and charges in the nature of
or in lieu of such assessments) levied or constituting a lien with respect to any of
the Property payable in the year of Closing shall be prorated between Seller and
Buyer on a daily basis as of the Closing Date based upon a calendar year, with
Seller being responsible for those installments and applicable portions thereof
allocable to the period prior to the Closing Date and Buyer being responsible for all
installments and applicable portions thereof allocable to the Closing Date and
subsequent thereto. Buyer shall be responsible for special assessments first levied
after the Effective Date.
6.5.3 Title Costs. Seller will pay the basic premium for an ALTA owner’s
policy of title insurance issued to Buyer with an insured amount not in excess of
the Purchase Price. Buyer will pay all costs of and premiums for any title insurance
policy it desires with respect to the Property in excess of such basic premium,
including the costs of any endorsements and extended coverages. Buyer will pay
all costs for any Survey. Buyer will pay all premiums for any loan policies of title
insurance. Seller and Buyer will each pay one-half of any Closing fee payable to
Title Company acting as escrow agent in connection with this transaction.
6.5.4 Recording Costs. Seller will pay the cost of recording the Deed, and
any other documents to be recorded in connection with the Closing (other than costs
to record documents to remove encumbrances from the Property that are not
Permitted Encumbrances, which shall be paid by Seller).
6.5.5 Transfer Taxes. Seller will pay any state deed or transfer tax
imposed in connection with the recording of the Deed. Buyer will pay any mortgage
registry tax regarding any mortgage given by Buyer on the Property in connection
with this transaction.
6.5.6 Operating Expenses. Seller will pay all utility and other operating
expenses of the Property relating to the period prior to the Closing Date, and Buyer
will pay all expenses of the Property relating to the period from and after the
Closing Date. Seller agrees to have all meters with respect to any such utilities read
as of the Closing Date.
6.5.7 Other Closing Costs. All other Closing costs will be allocated
between Seller and Buyer in accordance with the customary practice for
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commercial real estate transactions in county and state where the Property is
located.
6.5.8 Closing Proration and Reconciliation. All items of income and
expense attributable to the Property shall be prorated as of the Closing Date.
Escrow Agent shall prepare a settlement statement showing such prorations, and all
Closing costs. If any of the aforesaid prorations cannot be definitively calculated
on the Closing Date, then they shall be estimated at the Closing and definitively
calculated after the Closing Date as soon as feasible. As soon as the necessary
information is available (but in no event more than ninety (90) days after the
Closing), Buyer and Seller shall conduct a post-Closing review to determine the
accuracy of all prorations. Either Party owing the other Party a sum of money based
on such subsequent proration(s) or post-Closing review shall pay said sum to the
other Party within thirty (30) days of delivery of a written demand therefor, together
with documentation to support such demand. The provisions of this Section related
to post-Closing adjustment of prorations shall survive the Closing.
6.6. Strict Adherence. Each of the requirements set forth in this Agreement with
respect to the Earnest Money, the Option Term, the exercise of the Option and Closing
have been fully negotiated and agreed to, and strict adherence to such requirements is a
condition of this Agreement and shall be the sole responsibility of Buyer.
7. Representations and Warranties.
7.1. Representations and Warranties by Buyer. Buyer represents and warrants to
Seller that:
7.1.1 Authority. Buyer is an urban renewal agency of the City of
Springfield, a municipal corporation of the state of Oregon. Buyer has or will have
prior to Closing the requisite power and authority to enter into and perform this
Agreement and the documents to be executed by Buyer in connection with this
transaction. This Agreement and such documents have been or will be duly
authorized by all necessary action on the part of Buyer and have been or will be
duly executed and delivered on the part of Buyer. The execution, delivery and
performance by Buyer of this Agreement and such documents does not conflict
with or result in a violation of Buyer’s organizational documents or any agreement,
judgment, order, or decree of any court or arbiter to which Buyer is a party or is
subject.
7.1.2 Prohibited Persons and Transactions. Neither Buyer nor any of its
affiliates is, nor will they become, a person or entity with whom U.S. persons or
entities are restricted from doing business under regulations of the Office of Foreign
Asset Control (“OFAC”) of the Department of the Treasury (including those named
on OFAC’s Specially Designated and Blocked Persons List) or under any statute,
executive order (including the September 24, 2001, Executive Order Blocking
Property and Prohibiting Transactions with Persons Who Commit, Threaten to
Commit, or Support Terrorism) or other governmental action and does not, to its
{01425396;3} 11
actual knowledge, engage in any dealings or transactions or be otherwise associated
with such persons or entities.
7.1.3 Related Parties.
7.1.3.1 Buyer is not (i) an executive officer, director or Principal
Shareholder of Seller, U.S. Bancorp or any subsidiary of either entity or
(ii) a Company that is Controlled by any person or entity described in (i).
7.1.3.2 “Principal Shareholder” means any person or entity that
directly or indirectly, or acting through or in concert with one or more
persons, owns, controls, or has the power to vote more than 10 percent of
any class of voting securities of Seller, U.S. Bancorp or any subsidiary of
either entity.
7.1.3.3 “Company” means any corporation, partnership, business
or other trust, association, joint venture, pool syndicate, sole
proprietorship, unincorporated organization, or other business entity.
7.1.3.4 “Control” means directly or indirectly, or acting through or
in concert with one or more persons (i) owning, controlling, or having the
power to vote 25% or more of any class of a Company’s voting securities;
(ii) controlling in any manner the election of a majority of a Company’s
directors; or (iii) having the power to exercise a controlling influence over
a Company’s management or policies.
7.2. Representations and Warranties by Seller. Seller represents and warrants to
Buyer that:
7.2.1 Authority. Seller is a national banking association. Seller has the
requisite power and authority to enter into and perform this Agreement and the
documents to be executed by Seller in connection with this transaction. This
Agreement and such documents have been or will be duly authorized by all
necessary action on the part of Seller and have been or will be duly executed and
delivered on the part of Seller. The execution, delivery and performance by Seller
of this Agreement and such documents does not conflict with or result in a violation
of Seller’s organizational documents or any agreement, judgment, order, or decree
of any court or arbiter to which Seller is a party or is subject. Seller has not entered
into any purchase agreements, contracts for deed, rights of first refusal, options or
the like whereby someone other than Buyer has a right to acquire all or any part of
the Property, and to the actual knowledge of Seller, other than parties with
condemning authority under applicable law, no person, firm or entity has any right
to acquire the Property or any rights or estates in and to the Property or any portion
thereof.
7.2.2 Bankruptcy. Seller has not (a) commenced a voluntary case, or to
Seller’s knowledge, had entered against it a petition, for relief under any federal
bankruptcy act or any similar petition, order or decree under any federal or state
{01425396;3} 12
law or statute relative to bankruptcy, insolvency or other relief for debtors, (b)
caused, suffered or consented to the appointment of a receiver, trustee,
administrator, conservator, liquidator, or similar official in any federal, state, or
foreign judicial or non-judicial proceeding, to hold, administer and/or liquidate all
or substantially all of its assets, or (c) made an assignment for the benefit of
creditors.
7.2.3 Contracts. Except as shown on the Title Report, there are no
contracts or leases entered into by Seller, that will be binding on Buyer or the
Property after Closing.
7.2.4 Prohibited Persons and Transactions. Neither Seller nor any of its
affiliates is, nor will they become, a person or entity with whom U.S. persons or
entities are restricted from doing business under OFAC regulations (including those
named on OFAC’s Specially Designated and Blocked Persons List) or under any
statute, executive order (including the September 24, 2001, Executive Order
Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit, or Support Terrorism) or other governmental action and does
not, to its actual knowledge, engage in any dealings or transactions or be otherwise
associated with such persons or entities.
7.2.5 FIRPTA. Seller is not a “foreign person”, “foreign partnership”,
“foreign trust” or “foreign estate” as those terms are defined in Section 1445 of the
Internal Revenue Code.
7.2.6 Litigation. To the actual knowledge of the Seller, there is no
litigation pending or threatened against the Property, or against Seller in a manner
that would affect Seller’s ability to perform its obligations under this Agreement.
The “actual knowledge of the Seller” and similar terms mean the actual, present
consciousness of Richard Varriano, without any duty of inquiry or investigation. If Buyer
proceeds to Closing notwithstanding Buyer’s knowledge of any breach or untruth of any
representation or warranty by Seller, Buyer is deemed to have waived the breach or untruth
at Closing. All representations and warranties of Seller set forth in this Section 7.2 above
shall survive Closing for a period of twelve (12) months.
7.3 Notification of Changes. If, prior to Closing, Seller becomes aware of any
matters which make any of its representations or warranties untrue, which Seller shall
disclose to Buyer in writing, or in the event that Buyer otherwise becomes actually aware
prior to Closing of any matters which make any of Seller’s representations or warranties
untrue, then Buyer’s sole right and remedy with respect to any such matters shall be to elect
in writing delivered to Seller on or before the Closing Date, (i) to waive such matters and
complete the purchase of the Property in accordance with the terms of this Agreement, or
(ii) as to any matters disclosed following the Contingency Date, to terminate this
Agreement, in which event Ten and No/100 Dollars ($10.00) of the Initial Deposit shall be
disbursed to Seller as part of the consideration for the Buyer’s grant of the Option, and the
balance of the Earnest Money shall be disbursed to Buyer and the parties will have no
{01425396;3} 13
further obligations under this Agreement. Notwithstanding anything in this Section to the
contrary, the foregoing procedure with respect to a breach of representation or warranty
shall not be applicable to the intentional breach by Seller of any of its obligations hereunder
or a breach of a representation or warranty by Seller, it being understood that the remedy
for such a breach by Seller shall be in accordance with Section 13.1 (Default by Seller)
hereof. This Section shall survive Closing.
8. Sale “As Is”.
8.1. Buyer’s Obligations. SUBJECT TO THE TERMS OF THIS
AGREEMENT, BUYER WILL CONDUCT SUCH INSPECTIONS AND
INVESTIGATIONS OF THE PROPERTY (INCLUDING ITS PHYSICAL AND
ENVIRONMENTAL CONDITION) AS IT DEEMS NECESSARY TO PROCEED WITH
THE CLOSING AND THIS TRANSACTION, AND ASSUMES THE RISK THAT
ADVERSE MATTERS, INCLUDING THE DISCLAIMED MATTERS (AS DEFINED
IN SECTION 8.2), MAY NOT HAVE BEEN REVEALED BY BUYER’S
INSPECTIONS AND INVESTIGATIONS. SUCH INSPECTIONS AND
INVESTIGATIONS OF BUYER WILL BE DEEMED TO INCLUDE AN
ENVIRONMENTAL AUDIT OF THE PROPERTY, AN INSPECTION OF THE
PHYSICAL COMPONENTS AND GENERAL CONDITION OF ALL PORTIONS OF
THE PROPERTY, SUCH STATE OF FACTS AS AN ACCURATE SURVEY AND
INSPECTION OF THE PROPERTY WOULD SHOW, PRESENT AND FUTURE
ZONING AND LAND USE ORDINANCES, RESOLUTIONS AND REGULATIONS
OF THE CITY, COUNTY AND STATE WHERE THE PROPERTY IS LOCATED AND
THE VALUE AND MARKETABILITY OF THE PROPERTY.
8.2. Disclaimers. BUYER ACKNOWLEDGES AND AGREES THAT,
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT AND IN
ANY CLOSING DOCUMENTS, (A) BUYER HAS NOT RELIED UPON AND WILL
NOT RELY UPON, EITHER DIRECTLY OR INDIRECTLY, ANY
REPRESENTATION OR WARRANTY OF SELLER IN CONNECTION WITH THE
PROPERTY OR THIS TRANSACTION, (B) SELLER WILL SELL AND CONVEY TO
BUYER, AND BUYER WILL ACCEPT THE PROPERTY “AS IS”, “WHERE IS”, AND
“WITH ALL FAULTS” ON THE CLOSING DATE, AND THERE ARE NO ORAL
AGREEMENTS, WARRANTIES OR REPRESENTATIONS, COLLATERAL TO OR
AFFECTING THE PROPERTY BY SELLER OR ANY THIRD PARTY, AND (C)
SELLER DOES NOT, BY THE EXECUTION AND DELIVERY OF THIS
AGREEMENT, AND SELLER WILL NOT, BY THE EXECUTION AND DELIVERY
OF ANY DOCUMENT OR INSTRUMENT EXECUTED AND DELIVERED IN
CONNECTION WITH CLOSING, MAKE ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND OR NATURE
WHATSOEVER, WITH RESPECT TO THE PROPERTY AND ALL SUCH
WARRANTIES ARE HEREBY DISCLAIMED. WITHOUT LIMITING THE
GENERALITY OF THE PROVISIONS OF THIS SECTION 8.2, BUYER
ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN THIS AGREEMENT AND IN ANY CLOSING DOCUMENTS,
SELLER MAKES, AND WILL MAKE, NO EXPRESS OR IMPLIED WARRANTY AS
{01425396;3} 14
TO (I) MATTERS OF TITLE, (II) ZONING, (III) TAX CONSEQUENCES, (IV)
PHYSICAL OR ENVIRONMENTAL CONDITION (INCLUDING LAWS, RULES,
REGULATIONS, ORDERS AND REQUIREMENTS PERTAINING TO THE USE,
HANDLING, GENERATION, TREATMENT, STORAGE OR DISPOSAL OF ANY
TOXIC OR HAZARDOUS WASTE OR TOXIC, HAZARDOUS OR REGULATED
SUBSTANCE, AND FURTHER INCLUDING THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE AND COMPENSATION AND LIABILITY ACT,
THE RESOURCE CONSERVATION AND RECOVERY ACT, THE CLEAN WATER
ACT, THE SOLID WASTE DISPOSAL ACT, THE FEDERAL WATER POLLUTION
CONTROL ACT, THE OIL POLLUTION ACT, THE FEDERAL CLEAN AIR ACT,
THE FEDERAL INSECTICIDE, FUNGICIDE AND RODENTICIDE ACT, EACH AS
MAY BE AMENDED FROM TIME TO TIME, AND INCLUDING ANY AND ALL
REGULATIONS, RULES OR POLICIES PROMULGATED THEREUNDER AND ALL
APPLICABLE LOCAL LAWS, ORDINANCES, AND REGULATIONS, (V)
VALUATION, (VI) GOVERNMENTAL APPROVALS, GOVERNMENTAL
REGULATIONS, ENTITLEMENT STATUS OR ANY OTHER MATTER OR THING
RELATING TO OR AFFECTING THE PROPERTY, (VII) THE USE, INCOME
POTENTIAL, EXPENSES, OCCUPANCY STATUS, OPERATION OR
CHARACTERISTICS OF THE PROPERTY OR ANY PORTION OF THE PROPERTY,
INCLUDING WARRANTIES OF SUITABILITY, HABITABILITY,
MERCHANTABILITY, DESIGN OR FITNESS FOR ANY SPECIFIC PURPOSE OR
FOR A PARTICULAR PURPOSE, OR GOOD OR WORKMANLIKE
CONSTRUCTION, (VIII) THE NATURE, MANNER, CONSTRUCTION,
CONDITION, STATE OF REPAIR OR LACK OF REPAIR OF ANY OF THE
BUILDINGS, STRUCTURES OR IMPROVEMENTS, ON OR UNDER THE
SURFACE, WHETHER OR NOT LATENT, OBVIOUS, VISIBLE OR APPARENT, (IX)
THE NATURE OR QUALITY OF CONSTRUCTION, STRUCTURAL DESIGN OR
ENGINEERING OF THE PROPERTY, (X) THE SOIL CONDITIONS, DRAINAGE,
FLOODING GEOTECHNICAL AND SEISMIC CHARACTERISTICS, ACCESS,
UTILITIES OR OTHER CONDITIONS EXISTING IN, ON OR UNDER THE
PROPERTY, (XI) THE PRESENCE OR EXISTENCE OF MOLD OR OTHER
ORGANISMS, LEAD BASED PAINT OR WATER PENETRATION IN OR ABOUT
THE BUILDINGS, STRUCTURES OR IMPROVEMENTS, OR (XII) ANY OTHER
STATE OF FACTS THAT EXISTS WITH RESPECT TO ANY OF THE PROPERTY
(COLLECTIVELY, “DISCLAIMED MATTERS”),
8.3. Waiver and Release. EXCEPT WITH RESPECT TO THE EXPRESS
AGREEMENTS, REPRESENTATIONS, WARRANTIES AND OBLIGATIONS OF
SELLER UNDER THIS AGREEMENT AND IN ANY CLOSING DOCUMENTS,
BUYER AND ANYONE CLAIMING BY, THROUGH OR UNDER BUYER HEREBY
FULLY AND IRREVOCABLY WAIVES AND RELEASES SELLER AND EACH OF
ITS SHAREHOLDERS, EMPLOYEES, OFFICERS, MANAGERS,
REPRESENTATIVES, AGENTS, SUCCESSORS AND ASSIGNS (EACH, A
“RELEASED PARTY”) FROM ANY AND ALL CLAIMS (OTHER THAN FRAUD
AND INTENTIONAL MISREPRESENTATION OR BREACH OF WARRANTY)
THAT IT MAY NOW HAVE OR HEREAFTER ACQUIRE AGAINST ANY
RELEASED PARTY FOR AND AGAINST ANY AND ALL ANY LIABILITIES,
{01425396;3} 15
WHETHER DIRECT OR INDIRECT, KNOWN OR UNKNOWN, FORESEEN OR
UNFORESEEN, ARISING FROM OR RELATED TO ANY OF THE PROPERTY,
INCLUDING ANY OF THE DISCLAIMED MATTERS.
8.4. Limitation of Seller’s Liability. SUBJECT TO SECTION 13 BELOW,
ANY PARTY SEEKING TO ENFORCE ANY DUTY, OBLIGATION, LIABILITY OR
RESPONSIBILITY OF SELLER ARISING UNDER THIS AGREEMENT WILL RELY
ON AND LOOK SOLELY TO THE PROPERTY AND ANY INCOME OR PROCEEDS
FROM THE PROPERTY. SELLER WILL HAVE NO LIABILITY FOR THE
PERFORMANCE OF ANY DUTIES OR OBLIGATIONS OF SELLER UNDER THIS
AGREEMENT BEYOND ITS INTEREST IN THE PROPERTY AND ITS PROCEEDS.
BUYER WILL NOT SEEK TO ENFORCE ANY CLAIM OR JUDGMENT OBTAINED
BY BUYER AGAINST SELLER AGAINST ANY PROPERTY OF SELLER OTHER
THAN ITS INTEREST IN THE PROPERTY AND ITS PROCEEDS, AND BUYER
WILL LOOK SOLELY TO, AND RELY SOLELY ON, THAT INTEREST AND THOSE
PROCEEDS FOR ENFORCEMENT AND SATISFACTION OF ANY CLAIM OR
JUDGMENT. BUYER AGREES THAT THE DIRECTORS, OFFICERS, PARTNERS,
MEMBERS, OWNERS AND EMPLOYEES OF SELLER HAVE NO PERSONAL
LIABILITY UNDER THIS AGREEMENT, AND BUYER WAIVES ITS RIGHT TO
SUE ANY OF THEM PERSONALLY OR INDIVIDUALLY.
9. Executory Period. After the Effective Date until the date of Closing or earlier
termination of this Agreement (the “Executory Period”), Seller shall (a) operate and manage the
Property in a manner generally consistent with the manner in which Seller has operated and
managed the Property prior to the Effective Date, (b) maintain the Property in good condition,
repair and working order consistent with Seller’s past practices, (c) perform when due, and
otherwise comply with, all of Seller’s obligations and duties under the Contracts, if any, and (d)
maintain commercially reasonably policies of liability and casualty insurance in place that cover
Seller and the Real Property, as applicable.
10. Destruction, Damage, or Taking Before Closing. If, before Closing, all or any part
of the Property is damaged or destroyed, or becomes subject to condemnation or eminent domain
proceedings, then Seller shall promptly notify Buyer thereof in writing, and Buyer shall have ten
(10) business days from receipt of such written notice to elect whether to (a) terminate this
Agreement, in which event Ten and No/100 Dollars ($10.00) of the Initial Deposit shall be
disbursed to Seller and as part of the consideration for the Buyer’s grant of the Option, and the
balance of the Earnest Money shall be disbursed to Buyer and the parties will have no further
obligations under this Agreement, or (b) proceed to Closing pursuant to the terms of this
Agreement, in which event Seller shall assign to Buyer all of Seller’s right to any proceeds from
insurance or any condemnation award in respect of such damage or condemnation.
11. Intentionally Omitted.
12. Assignment; Third Party Beneficiaries. This Agreement is made solely for the
benefit of the parties hereto and their respective successor and assigns. No rights, privileges or
immunities of either Seller or Buyer under this Agreement shall inure to the benefit of any
third-party, nor shall any third-party be deemed to be a beneficiary of any of the provisions
{01425396;3} 16
contained in this Agreement. Buyer may not fully or partially assign or transfer this Agreement or
any interest therein in any manner whatsoever without Seller’s prior written consent, which may
be given, conditioned or withheld in Seller’s sole and absolute discretion. Notwithstanding the
foregoing, Seller’s consent shall not be required for an assignment by Buyer of all of Buyer’s rights
and obligations under this Agreement to (a) any parent, subsidiary or other affiliate of Buyer, or
(b) to any person or entity which succeeds to the business of Buyer as a result of any
reorganization, joint venture, merger or consolidation of Buyer, or (c) to any entity the day-to-day
management of which is controlled by Buyer through voting rights, ownership or contractual
management rights. Buyer must give Seller not less than ten (10) business days’ prior notice of
any proposed assignment of this Agreement (even if permitted under this Section 12); which notice
shall be accompanied by a copy of the assignment (and an assumption of this Agreement) and
documents evidencing the formation, ownership, good standing (if applicable) and authority of the
assignee to assume and perform the Buyer’s obligations under this Agreement. No assignment or
transfer of Buyer’s rights or obligations under the Agreement (even if permitted under this Section
12 or consented to by Seller) shall operate to modify or relieve Buyer of its obligations under the
Agreement.
13. Default and Remedies.
13.1. Default By Seller. If Seller defaults under this Agreement and such default
continues for ten (10) days following notice from Buyer to Seller specifying the default
(provided that no notice or cure period shall be required with respect to any default of any
obligations to be performed at Closing), Buyer may exercise one of the following as its
sole, exclusive and mutually-exclusive remedies, either (a) terminate this Agreement by
giving written notice to Seller, in which event Buyer shall be entitled to immediate refund
of the Initial Deposit and to reimbursement of its out-of-pocket third-party costs incurred
in connection with the Agreement in an amount not to exceed $50,000.00, or (b) seek
specific performance of this Agreement. If Buyer proceeds to Closing notwithstanding any
defaults by Seller, Buyer shall be deemed to have waived such defaults. Nothing in this
Section shall limit Buyer’s rights to indemnity or other remedies if the remedy of specific
performance is not available to Buyer (e.g., if Seller conveys the Property to a third party
in breach of this Agreement).
Notwithstanding the foregoing, if, following Closing, it is determined that Seller is
in default of any of its representations and warranties in Section 7.2 (including any updates
under Section 7.3) (collectively and together with any and all representations and
warranties contained in closing documents delivered by Seller to Buyer at Closing (a
“Seller Post-Closing Breach”)) for which Buyer (i) did not have actual knowledge of prior
to Closing and (ii) files a claim prior to expiration of the Survival Period, then Buyer may,
as its sole and exclusive remedy, recover the actual out of pocket damages it suffers as a
direct result of such default or breach by Seller up to $500,000.00.
13.2. Default By Buyer. If Buyer defaults under this Agreement and such default
continues for ten (10) days following notice from Seller to Buyer specifying the default
(provided that no notice or cure period shall be required with respect to any default of any
obligations to be performed at Closing), Seller may terminate this Agreement by giving
written notice to Buyer, and if such default occurs after the Contingency Date, Seller shall
{01425396;3} 17
be entitled to immediate payment of the Earnest Money as liquidated damages (Seller and
Buyer each hereby agreeing that determining Seller’s actual damages would be difficult,
and the Earnest Money is a reasonable estimate of Seller’s damages). If Seller proceeds to
Closing notwithstanding any defaults by Buyer, Seller shall be deemed to have waived
such defaults. Notwithstanding the foregoing, Seller may enforce any provisions of this
Agreement which survive Closing, and Seller may recover from Buyer its reasonable fees
and costs of enforcing those provisions.
13.3. Nature of Remedies. Seller’s and Buyer’s respective remedies as set forth
in this Section 13 are their sole and exclusive remedies, except with respect their respective
obligations that expressly survive Closing or termination under this Agreement. Seller and
Buyer each hereby waive any right to sue the other or recover any costs or other damages
whatsoever except as expressly provided in this Section 13 (except with respect to
obligations that expressly survive Closing or termination as provided under this
Agreement).
13.4. Limitations Period on Suits and Proceedings. If either Seller or Buyer is
entitled to commence any action or other proceeding to seek specific performance of this
Agreement, or to recover any fees, costs or other amounts expressly recoverable under this
Section 13, the applicable party must do so within sixty (60) days after the earlier of (a) the
date that party obtains actual knowledge of the defaulting party’s default, or (b) the date of
termination of this Agreement, or such party shall be deemed to have irrevocably waived
the related claims and shall be barred from asserting the related claims.
13.5. Attorney’s Fees. Each of the parties will pay its own attorney’s fees with
respect to this Agreement and this transaction, except that a party defaulting under this
Agreement or any closing document will pay the reasonable attorneys’ fees and court costs
at trial and on any appeal incurred by the non-defaulting party to enforce its rights regarding
such default.
14. Notices. Any notice required or permitted to be given by this Agreement will be in
writing and will be given by nationally recognized overnight courier (with delivery charges
prepaid), or by certified or registered mail, return receipt requested, postage prepaid. Notices so
given shall be deemed received when actually received or when delivery is confirmed or refused.
Notices may also be given by e-mail, and will be effective at the time of sending at the e-mail
address specified below by 5:00 p.m. Pacific Time on a business day (and otherwise as of the next
business day), provided the notice-giving party also sends notice by one of the physical methods
permitted above on the same date as sending the e-mail, time being of the essence. Any notice
required to be given under this Agreement shall be addressed as follows:
Seller: U.S. Bank National Association
800 Nicollet Mall, 15th Floor
BC-MN-H15F
Minneapolis, MN 55402
Attn: Corporate Real Estate
Email: richard.varriano@usbank.com
{01425396;3} 18
with a copy to: U.S. Bank National Association
800 Nicollet Mall, 21st Floor
BC-MN-H21N
Minneapolis, MN 55402
Attn: Corporate Counsel, Corporate Real Estate
Email: neil.davis@usbank.com
Buyer: Springfield Economic Development Agency
Attn: Allie Camp, SEDA Liaison
225 5th Street
Springfield, Oregon
Phone: 541-726-3688
Email: acamp@springfield-or.gov
with a copy to: Radler White Parks & Alexander LLP
111 SW Columbia Street, Suite 700
Portland, OR 97201
Attn: Dina Alexander
Email: dalexander@radlerwhite.com
Any party may, by notice to the others, specify a different address for notice purposes.
15. Termination. If this Agreement is terminated pursuant to the terms hereof, then (a)
the respective rights of Buyer and Seller arising out of this Agreement shall immediately cease
with the exception of obligations that expressly survive termination under this Agreement, and (b)
within ten (10) days after such termination notice, Buyer shall (i) deliver to Seller a true, correct,
complete and legible copy of the Reports, if any, to the extent not previously delivered to Seller,
and if and only if Seller first reimbursees Buyer for an amount equal to the actual cost of such
Reports, and (ii) if this Agreement or a memorandum of this Agreement is recorded, execute,
acknowledge, and deliver to Seller a quit claim deed with respect to the Property in order to remove
any cloud of this Agreement from Property (provided that the failure to give such deed or
termination shall not affect the termination of this Agreement). Buyer’s obligations under this
Section 15 shall survive termination of this Agreement, and Seller may recover from Buyer its
reasonable legal fees and costs of enforcing the provisions of this Section 15 if Buyer does not
comply with the terms hereof.
16. Tax Deferred Exchange. Seller and/or Buyer may elect to dispose of or acquire (as
the case may be) any of the Real Property in connection with the completion of a tax-deferred
exchange under Section 1031 of the Internal Revenue Code of 1986, as amended, at no cost to the
non-exchanging party. Each party agrees to take such steps as the other may reasonably require in
order to complete such tax-deferred exchange, including accepting payment of all or a portion of
the Purchase Price from a third party.
17. Brokers. Seller and Buyer each represents and warrants to the other that it has not
retained or dealt with any broker entitled to a commission or other fee in connection with this
transaction except for Cushman & Wakefield, which is acting as Seller’s agent (“Broker”). If the
Closing occurs, Seller will pay a commission to Broker in accordance with a separate agreement
{01425396;3} 19
with Broker. Seller and Buyer shall indemnify, defend (with counsel reasonably acceptable to the
indemnified party) and hold the other party harmless against all claims (and any related liabilities)
made by any person other than Broker alleging to have represented or assisted the indemnifying
party and to thereby be owed a commission or fee in connection with the signing or consummation
of this Agreement. The indemnity obligations under this Section 17 shall survive Closing or any
termination of this Agreement.
18. No Liens. Buyer may not record this Agreement or any memorandum of this
Agreement against the title to the Property or in other public records. Buyer may not record a lien,
notice of lis pendens or other instrument against the title to the Property except in connection with
a timely- and properly-filed specific performance action permitted under this Agreement, and
Buyer waives any other right to do so at law or in equity. This Agreement is not, and does not
convey, any interest in or lien against the Property.
19. Waiver of Jury Trial. SELLER AND BUYER EACH IRREVOCABLY WAIVE
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR
RELATING TO THIS TRANSACTION.
20. Miscellaneous. This Agreement may be signed in counterparts and evidenced by
facsimile, PDF format or similarly-imaged pages. Buyer and Seller each acknowledge and agree
that it has had an opportunity to receive the advice of such counsel and other advisors as it desires
before entering into this Agreement. Time is of the essence of this Agreement. This Agreement
will be governed by and construed under and in accordance with the laws of the state where the
Property is located. This Agreement contains the entire agreement between the parties hereto with
respect to this transaction, supersedes any prior oral negotiations or agreements. Subject to Section
12, this Agreement is binding upon the parties hereto and their respective legal representatives,
successors and permitted assigns. No amendment, modification or waiver of the provisions of this
Agreement will be effective unless it is in writing and signed by the party against whom it is to be
enforced. All decisions requiring the “approval” or “agreement” of any party hereto shall be made
in writing by the applicable party. If any part of this Agreement is held to be illegal, invalid or
unenforceable, the remainder of this Agreement will be unaffected and continue in full force and
effect. Seller’s preparation of this Agreement and submission of this Agreement for the review or
execution by any party is not an offer by Seller to sell the Property, and this Agreement is not
binding upon Seller or Buyer until it has been signed by Seller and Buyer. The section headings
and other captions are for ease of reference only, and are not otherwise part of this Agreement.
Any reference to a section of this Agreement includes its subsections and parts.
21. Rules of Construction. In interpreting this Agreement, the following rules of
construction shall be used.
21.1. Construction. The rule of strict construction shall not apply to this
Agreement. This Agreement shall not be interpreted in favor of or against either Buyer or
Seller merely because of their respective efforts in preparing it.
21.2. Captions, Gender, Number, and Language of Inclusion. The article and
section headings in this Agreement are for convenience of reference only and shall not
define, limit or prescribe the scope or intent of any term of this Agreement. As used in this
{01425396;3} 20
Agreement, the singular shall include the plural and vice versa, the masculine, feminine,
and neuter adjectives shall include one another, and the following words and phrases shall
have the following meanings: (a) “including” shall mean “including but not limited to”;
(b) “terms” shall mean “terms, provisions, duties, covenants, conditions, representations,
warranties, and indemnities”; (c) “any of the Property” or “any of the Property” shall
mean “the Property or any part thereof or interest therein” or “the Property or any part
thereof or interest therein”, as the case may be; (d) “rights” shall mean “rights, duties, and
obligations”; (e) “liabilities” shall mean “liabilities, obligations, damages, fines, penalties,
claims, demands, costs, losses, charges, liens, judgments, actions, causes of action, and
expenses, including reasonable attorneys’ fees”; (f) “incurred by” shall mean “imposed
upon or suffered or incurred or paid by or asserted against”; (g) “applicable law” shall
mean “all applicable federal, state, county, municipal, local, or other laws, statutes, codes,
ordinances, rules, and regulations”; (h) “about the Property” or “about the Property”
shall mean “in, on, under, or about the Property” or “in, on, under, or about the Property”,
as the case may be; (i) “operation” shall mean “use, non-use, possession, occupancy,
condition, operation, maintenance, or management”; (j) “this transaction” shall mean “the
purchase, sale, and related transactions contemplated by this Agreement”; and (k) “shall”
means mandatory and imperative.
21.3. Time Periods. Any reference in this Agreement to the time for performance
of obligations or elapsed time shall mean consecutive days, months or years, as applicable.
In the event the time for performance of any obligation hereunder expires on the day that
is not a business day, the time for performance shall be extended to the next business day.
A “business day” means any day that is not Saturday, Sunday or a holiday observed by
the state of Oregon.
22. Escrow Provisions.
22.1. Earnest Money. Title Company will hold and disburse the Earnest Money
in accordance with the terms of this Agreement, unless otherwise directed by the mutual
written direction of the parties.
22.2. Duties of Title Company. The sole duties of Title Company will be those
described herein, and Title Company will be under no obligation to determine whether the
parties hereto are complying with any requirements of law or the terms of any other
agreements among said parties. Title Company may conclusively rely upon and will be
protected in acting upon any notice, consent, order or other document believed by it to be
genuine and to have been signed or presented by the proper party or parties, consistent with
reasonable due diligence on Title Company’s part. Title Company may consult the advice
of counsel with respect to any issue concerning the interpretation of its duties hereunder.
Title Company will have no duty or liability to verify any such notice, consent, order or
other document, and its sole responsibility will be to act as expressly set forth in this
Agreement. Title Company will be under no obligation to institute or defend any action,
suit or proceeding in connection with this Agreement. If any dispute arises with respect to
the disbursement of any money, Title Company may continue to hold the money, or
commence an interpleader action in a court of competent jurisdiction and remit the money
to that court.
{01425396;3} 21
23. Removal of Personal Property. Buyer agrees that Seller shall have the right, upon
the provision of written notice to Buyer, to reenter the Property within ten (10) business days of
the Closing Date, for purposes of retrieving any personal property of Seller (collectively, “Seller’s
Personal Property”) remaining at the Property after Closing, which was not intended to be included
with the sale. Buyer agrees to cooperate with Seller in providing reasonable access to the Property
for purposes of retrieving Seller’s Personal Property. In the event Seller fails to remove any of
Seller’s Personal Property remaining at the Property within the timeframes described above, Buyer
may remove or destroy it without liability to Seller. Buyer and Seller agree that the obligations in
this Section 23 shall expressly survive the Closing.
24. Statutory Disclosure. THE PROPERTY DESCRIBED IN THIS INSTRUMENT
MAY NOT BE WITHIN A FIRE PROTECTION DISTRICT PROTECTING STRUCTURES.
THE PROPERTY IS SUBJECT TO LAND USE LAWS AND REGULATIONS THAT, IN
FARM OR FOREST ZONES, MAY NOT AUTHORIZE CONSTRUCTION OR SITING OF A
RESIDENCE AND THAT LIMIT LAWSUITS AGAINST FARMING OR FOREST
PRACTICES, AS DEFINED IN ORS 30.930, IN ALL ZONES. 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
195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007,
SECTIONS 2 TO 9 AND 17, CHAPTER 855, OREGON LAWS 2009, AND SECTIONS 2 TO
7, CHAPTER 8, OREGON LAWS 2010. 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 VERIFY THE EXISTENCE OF FIRE
PROTECTION FOR STRUCTURES AND TO INQUIRE ABOUT THE RIGHTS OF
NEIGHBORING PROPERTY OWNERS, IF ANY, UNDER ORS 195.300, 195.301 AND
195.305 TO 195.336 AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007,
SECTIONS 2 TO 9 AND 17, CHAPTER 855, OREGON LAWS 2009, AND SECTIONS 2 TO
7, CHAPTER 8, OREGON LAWS 2010.
[Remainder of page intentionally left blank]
Springfield, OR
Site No. 8684
{01425396;3} S-1
SIGNATURE PAGE
TO
OPTION AGREEMENT
Seller and Buyer executed this Agreement as of the Effective Date.
“Buyer”
SPRINGFIELD ECONOMIC
DEVELOPMENT AGENCY,
an urban renewal agency
of the City of Springfield, a municipal
corporation
By: _________________________________
Name: _______________________________
Its:__________________________________
“Seller”
U.S. BANK NATIONAL ASSOCIATION,
a national banking association
By: _________________________________
Name: ______________________________
Its: _________________________________
{01425396;3} S-2
JOINDER BY TITLE COMPANY
FIRST AMERICAN TITLE INSURANCE COMPANY is executing this Agreement in its
capacity as Title Company only, and by such execution is only agreeing to act strictly in
accordance with the terms of this Agreement that govern the duties and obligations of Title
Company, including being the designated party to comply with any reporting requirements
specified in Section 6045 of the United States Internal Revenue Code (and any related regulations
regarding such reporting obligations) in relation to this transaction.
FIRST AMERICAN TITLE INSURANCE
COMPANY
By: ___________________________________
Name: _________________________________
Its: ___________________________________
Date: __________, 2024
Springfield, OR
Site No. 8684
{01425396;3}
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
All that certain real property situated in the County of Lane, State of Oregon, described as
follows:
APN: 1703353111200
{01425396;3}
EXHIBIT B
RESTRICTIVE COVENANT
[See following 3 pages.]
{01425396;3}
WHEN RECORDED, MAIL TO:
U.S. Bank National Association
Attn: _____________________
U.S. Bancorp Center
BC-MN-H21R
800 Nicollet Mall
Minneapolis, Minnesota 55402
DECLARATION OF RESTRICTIVE COVENANT
This Declaration of Restrictive Covenant is made as of the ______day of ______
2024 (the “Effective Date”), by U.S. BANK NATIONAL ASSOCIATION, a national banking
association (“Bank”).
RECITALS
A. Bank owns certain real property situated in Lane County, Oregon , more
particularly described in Exhibit A hereto (the “Property”).
B. In connection with Bank’s intended sale of the Property on this date, Bank desires
to declare that the Property may not be used for certain uses for the benefit of Bank.
NOW, THEREFORE, Bank hereby declares that no portion of the Property may be used
or occupied for the principal purpose, or any uses ancillary thereto (including, but not limited to
parking and advertising), of a retail bank, credit union, savings and loan, money store, or mortgage
or loan origination or for the placement, operation or maintenance of an automated teller machine
or similar device. These restrictions shall run with the Property as covenants running with the land
or as equitable servitudes, as the case may be, and shall constitute a burden on the Property for the
benefit of Bank for a period of three (3) years from the Effective Date, at which time this
Declaration of Restrictive Covenant shall automatically terminate and be of no further force or
effect.
{01425396;3}
IN WITNESS WHEREOF, Bank has executed this Declaration of Restrictions as of the
day and year first written above.
OWNER: U.S. BANK NATIONAL ASSOCIATION
By:
Name:
Title:
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
On this _____ day of _________, in the year 20__, before me, a Notary Public in and for
said State, personally appeared ______________________, known or identified to me to be
__________________________ of U.S. Bank National Association, a national banking
association, who executed the instrument, on behalf of said national banking association.
Notary Public
My Commission Expires:
{01425396;3} B-1
EXHIBIT A TO
DECLARATION OF RESTRICTIVE COVENANT
Legal Description of the Property