HomeMy WebLinkAboutItem 03 Blue McKenzie Predvelopment LoanAGENDA ITEM SUMMARY
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Meeting Date:
6/26/2023
Meeting Type:
Regular Meeting
Department:
City Manager's Office
Staff Contact:
Allie Camp
Staff Phone No:
726-3688
DEVELOPMENT AGENCY Estimated Time: 10 Minutes
ITEM TITLE: AUTHORIZING THE CITY MANAGER TO TAKE ACTION UNDER THE
BLUE MCKENZIE PREDEVELOPMENT LOAN
ACTION Adopt/Not adopt the following Resolution:
REQUESTED:
A RESOLUTION AUTHORIZING THE CITY MANAGER TO TAKE CERTAIN
ACTIONS RELATED TO THE SEDA ACQUISITION AND
PREDEVELOPMENT LOAN CONTRACT #2827
ISSUE
STATEMENT:
Whether the SEDA Board should authorize the City Manager to pursue actions
under the SEDA Acquisition and Predevelopment Loan Contract for the Blue
McKenzie project that may include forgiving the loan and obtaining a deed to the
property.
ATTACHMENTS:
1. Proposed Resolution
2. Acquisition and Predevelopment Loan Contract #2827 (as amended)
3. Promissory Note
4. Deed of Trust
5. Assignment of Plans, Specifications, Reports and Permits
DISCUSSION/
Market volatility and changing lending conditions quartering 2023 have impacted
FINANCIAL
the feasibility to construct the Blue McKenzie project. These conditions have
IMPACT:
affected both the construction/senior loan and SEDA's tax increment borrowing
capacity. Brief details of these conditions are provided below. Staff believe the
lending environment is likely to stabilize in the next year, but unlikely to improve.
Since the SEDA Board authorized construction loan funding of up to $10 million in
November 2022, commercial lenders have increased lending requirements due to
increased risk. At the same time, rising interest rates have reduced lending capacity.
Without solid senior loan funding identified, staff delayed the award for SEDA's
tax increment RFP (authorized in Resolution 2023-02). SEDA's borrowing rate has
since risen, decreasing the potential total amount of tax increment financing.
Cumulatively, these conditions leave a significant gap in the project's funding.
The Board is therefore requested to authorize the City Manager to take actions
under the Loan Contract to protect SEDA's investment in the property (Resolution
in ATT 1), if it is not feasible to construct the Project. The Loan Contract (ATT 2)
and related loan documents (ATT 3-5) allow SEDA to forgive the loan funds in
exchange for a deed to the property if both parties agree. If both parties do not
agree, the City Manager may take other actions to protect SEDA's investment.
Regardless of the circumstances, SEDA remains committed to the overall goals of
this project:
• Create a proof of concept to communicate viability and profitability of a
new construction type/height in Springfield.
• Provide a market rate, high density, housing project to serve as a
comparable to financial institutions approving similar future projects.
• Create a dense development in downtown which spurs subsequent private,
taxable, development and increases market rate housing stock.
100029360:11
SPRINGFIELD ECONOMIC DEVELOPMENT AGENCY (SEDA)
RESOLUTION NO.
A RESOLUTION AUTHORIZING THE CITY MANAGER TO TAKE CERTAIN ACTIONS RELATED
TO THE SEDA ACQUISITION AND PREDEVELOPMENT LOAN CONTRACT #2827
WHEREAS, in April 2021, the Springfield Economic Development Agency (SEDA) entered into a
Memorandum of Understanding with Blue McKenzie Apartments, LLC, regarding construction of a new
eight -story mixed use building with market -rate residential units and ground floor commercial uses in
Downtown Springfield (the "Project");
WHEREAS, the Project's goals are to create a proof of concept to communicate viability and
profitability of a new construction type/height in Springfield; to provide a market rate high-density,
housing project to serve as a comparable to financial institutions approving similar future projects; and
to create a dense development in downtown which spurs subsequent private, taxable, development
and increases market rate housing stock;
WHEREAS, in May 2021, SEDA entered into the Acquisition and Predevelopment Loan Contract #2827
("Loan Contract") with Blue McKenzie Apartments LLC for the purpose of providing up $400,000 for
Blue McKenzie Apartments, LLC to acquire the property east of 7t" Street and north of A Street (Map
Number 17-03-35-42, Tax Lot 2300) (the "Property"), and an additional $1,600,000 to fund
predevelopment costs of the Project;
WHEREAS, the Loan Contract was amended in November 2022 to provide a six-month extension until
May 2023 to allow more time for Blue McKenzie Apartments, LLC to secure construction financing, and
in February 2023 to add $100,000 for building permit submittals to occur while negotiations for
construction financing were underway;
WHEREAS, the market and lending conditions have changed significantly since the Project
predevelopment work began in Spring 2021 due to factors outside the parties' control, and these
conditions have continued to worsen in 2023;
WHEREAS, construction costs have risen more than ten percent since May 2021 and have continued
to increase in 2023, which increases the cost to construct the Project;
WHEREAS, in 2023, the Federal Reserve has raised interest rates an additional 0.75% to a fifteen -
year high of 5.25%, which impacts SEDA's ability to issue indebtedness to provide a construction loan
for the Project and impacts Blue McKenzie Apartment LLC's ability to secure construction financing;
WHEREAS, SEDA remains committed to the goals of the Project but recognizes that recent market
volatility and changed lending conditions may make construction of the Project, as envisioned in the
Loan Contract, to be infeasible,
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SEDA, AN URBAN RENEWAL AGENCY OF THE
CITY OF SPRINGFIELD, AS FOLLOWS:
Section 1: The City Manager or a person designated by the City Manager is hereby
authorized to declare the Project as described in the Acquisition and Predevelopment Loan Contract
#2827 to be infeasible, if in the judgment of the City Manager or person designated by the City
Attachment 1 Page 1 of 2
Manager, the construction of said Project has become impractical and not in the best interests of the
Springfield Economic Development Agency.
Section 2: The City Manager, City Finance Director, City Attorney, or any person designated
by the City Manager, are authorized to take any actions under the Acquisition and Predevelopment
Loan Contract #2827 or the loan documents as defined therein, which are desirable to enforce SEDA's
rights under the Contract. Such actions may include but are not limited to forgiving the principle of the
loan in exchange for a deed to the Property, or issuing a notice of default and instituting foreclosure of
SEDA's deed of trust.
Section 3: This Resolution will take effect immediately upon adoption.
ADOPTED by the Board of SEDA, an Urban Renewal Agency of the City of Springfield this
day of , 2023, by a vote of for and against.
ATTEST:
Allie Camp, SEDA Staff Liaison
Attachment 1 Page 2 of 2
SECOND AMENDMENT TO
SPRINGFIELD ECONOMIC DEVELOPMENT AGENCY DOWNTOWN
ACQUISITION AND PREDEVELOPMENT LOAN CONTRACT
AND FIRST AMENDMENT TO PROMISSORY NOTE
(Blue McKenzie Apartments LLC)
Contract #2827
Effective Date: Feb 9, 2023
The Parties hereby agree that the SEDA Downtown Acquisition and Predevelopment Loan
Contract ("Loan Contract's is made and entered into this May 17, 2021, by and between the
Springfield Economic Development Agency (SEDA) and Blue McKenzie Apartments LLC, an
Oregon limited liability company (Borrower), as amended by the First Amendment dated
November 14, 2022, is hereby amended for the second time as set forth herein. The Parties
further agree that the Promissory Note by Borrower, dated May 17, 2021, is hereby amended
for the first time to increase the amount secured by the Promissory Note as provided herein.
Recitals:
As provided in Exhibit B to the Loan Contract, Borrower has obtained Tentative Site Plan
approval from the City of Springfield as of December 29, 2022. Borrower has provided 85%
construction documents to SEDA for approval according to Section 10 and Exhibit B.
Pursuant to Section 3.6 of the Memorandum of Understanding (MOU) between the parties
dated April 16, 2021, Borrower is to submit building permit applications to the City of Springfield
following execution of the Construction Loan Documents and issuance of land use approvals
from the City of Springfield. Pursuant to Section 20 of the Loan Contract, the Parties have
completed negotiations on the material terms of the Construction Loan (as approved by the
SEDA Board on November 14, 2022); however, final execution of the Construction Loan
documents is pending Borrower's completion of the final construction cost estimate and
schedule, and selection of a senior lender. To enable the Project to maintain the conceptual
schedule identified in the MOU (adjusted out one year as referenced in the First Amendment to
the Predevelopment Loan Contract), Borrower must submit building permits and public
improvement project (PIP) permit for review prior to final execution of the Construction Loan
documents.
Accordingly, both parties agree that it is in their mutual interest for SEDA to advance to
Borrower the payment of initial building permit and PIP fees under the terms and conditions of
the Predevelopment Loan Contract. The parties specifically agree that the permit fees will be
included in the outstanding principal balance of the Predevelopment Loan to be deemed repaid
as of the date of execution of the Construction Loan documents.
Therefore, based on the foregoing recitals, the Loan Contract is amended as follows:
Section 2 is amended to state:
2. SEDA Agreement to Fund Loan. Subject to, and conditioned upon, Borrower's
compliance with the terms of this Contract and the other Loan Documents and the
representations contained in the Developer's Statement of Financial Capability (the
"Application'), SEDA agrees to provide Borrower a loan in an amount not to exceed two
{000269752}
Attachment 2 Page 1 of 22
million and one -hundred thousand dollars ($2,100,000.00) at 0% interest.
Notwithstanding any provision in this Contract, items eligible for the SEDA funds shall be
limited to purchase of the Property, predevelopment costs associated with the
permanent improvements to the Property identified in Exhibit B, and advancement of
building permit and PIP fees. Examples of items not eligible for the SEDA funds include:
Ongoing administration costs or business operating costs. SEDA shall have final
determination on items eligible for payment, provided SEDA's approval shall not be
unreasonably withheld, conditioned, or delayed.
Section 7 is amended to add Subsection 7.3:
7.3 Building Permit & PIP Review Fees. Loan funds not greater than the actual cost of
the Borrower's building permit review fees and PIP fees at the point of application, or
$100,000, whichever is less, will be paid directly by SEDA to the City of Springfield
Development and Public Works Department, Community Development Division, on
Borrower's behalf. No loan funds may be disbursed to the City of Springfield unless and
until Borrower has (1) submitted a complete set of plans for Building Permit review, not
including any submittals specifically deferred by Borrower for later submittal, and (2)
submitted PIP initial submittal documents required under Springfield Engineering Design
Standards and Procedures Manual section 12.03.1. Said funds will not be subject to the
5% holdback specified in Section 15.
Further, the first paragraph of the Promissory Note dated May 17, 2021 by Borrower in favor of
SEDA, is amended to state:
For value received, the undersigned ("Borrower's, promises to pay the Springfield
Economic Development Agency, or to another person and at another place that the
holder of this Promissory Note (this "Note") may designate ("Lender"), the maximum
principal sum of two million, one hundred thousand dollars ($2,100,000.00), or as much
as may be advanced under that certain SEDA Downtown Acquisition and
Predevelopment Loan Contract by and between Borrower and Lender dated as of the
date hereof (the "Loan Contract's and payable in the manner and on the terms set forth
in this Note.
Except as amended herein, all other terms and conditions of the Loan Contract between Parties,
including Project Budget in Exhibit B, and the Promissory Note dated May 17, 2021, will remain
in full force and effect.
SEDA
Name: Niel Laudati_�� - �•�-
Title: City Manager - AIC
Date: 02/09/2023
BORROWER
Name:
Title: Manager
Date: 21112:
{000269752}
Attachment 2 Page 2 of 22
FIRST AMENDMENT TO
SPRINGFIELD ECONOMIC DEVELOPMENT AGENCY DOWNTOWN
ACQUISITION AND PREDEVELOPMENT LOAN CONTRACT
(Blue McKenzie Apartments LLC)
Contract #2827
Effective Date: November 14, 2022
The Parties hereby agree that the SEDA Downtown Acquisition and Predevelopment Loan
Contract ("Loan Contract's is made and entered into this May 17, 2021, by and between the
Springfield Economic Development Agency (SEDA) and Blue McKenzie Apartments LLC, an
Oregon limited liability company (Borrower) is hereby amended for the first time as set forth
herein.
Pursuant to Section 9 of the Loan Contract, Borrower has requested SEDA approve an extension
to the term of the Loan Contract for an additional six months, to a total of 24 months from the
effective date of the Loan Contract. The basis for Borrower's request is that said extension will
enable Borrower to receive better construction pricing and more favorable senior financing for
the development that is the subject of the Loan Contract. SEDA considers it in the parties'
mutual interest to agree to the requested six-month extension.
Therefore, the Loan Contract is amended as follows:
Section 9 is amended to state:
Project Schedule and Completion. The predevelopment work must be completed
within twenty-four (24) months of the date Borrower signs this Contract (for the
avoidance of doubt, subject to extensions for events of force majeure as described in
section 35). Each predevelopment task must be completed according to the project
schedule in Exhibit B, except that period for completion of tasks 4 through 7 are
extended by an addition six (6) months. Any deviations or adjustments to the project
schedule that will materially delay the ultimate completion of the predevelopment work
and/or Project completion must be approved by SEDA.
Section 17 is amended to state:
Repayment Terms. The disbursed principal amount is fully due and payable
twenty-four months (24) months from date of this Contract.
Except as amended herein, all other terms and conditions of the Loan Contract between Parties,
including Project Budget in Exhibit B, will remain in full force and effect.
SEDA BORROWER
Name. Name -
Title: CVW HAM8E,Ee Title:
Date:t_ttkz IZZ Date:
J00026329:1)
Attachment 2 Page 3 of 22
SEDA DOWNTOWN ACQUISITION AND PREDEVELOPMENT LOAN
Contract #_2827
This SEDA Downtown Acquisition and Predevelopment Loan Contract ("Contract") is made and
entered into this May 17 , 2021, by and between the Springfield Economic Development
Agency, hereinafter referred to as "SEDA" and Blue McKenzie Apartments LLC, an Oregon
limited liability company, hereinafter referred to as "Borrower."
STATEMENT OF PURPOSE
SEDA is authorized to provide financial loans to businesses in the Downtown Urban Renewal
Plan area that are consistent with the Downtown Urban Renewal Plan. Borrower and SEDA
have entered into a Memorandum of Understanding dated April 16, 2021 (the "MOU") regarding
development of an eight -story mixed-use, market rate residential building located east of 7'h
Street and north of A Street in Springfield (Map Number 17-03-35-42, Tax Lot 2300) (the
"Property"). The purpose of this Contract is to set forth the terms under which the SEDA funds
will be provided to Borrower.
NOW, THEREFORE, in consideration of the promises contained herein, it is agreed as follows:
1. Purpose of Loan Funding. The purpose of this loan is to facilitate Borrower's
acquisition of the Property and to fund predevelopment costs for a new development with the
following attributes: (a) eight -story mixed-use building; (b) seven stories of market rate
residential development providing approximately 84 units; (c) approximately 5,000 square feet
of ground floor commercial retail; and (d) cross -laminated timber construction, more particularly
described in the "Springfield Motors Development Report" in Exhibit A (the "Project").
2. SEDA Agreement to Fund Loan. Subject to, and conditioned upon, Borrower's
compliance with the terms of this Contract and the other Loan Documents and the
representations contained in the Developer's Statement of Financial Capability (the
"Application"), SEDA agrees to provide Borrower a loan in an amount not to exceed two million
dollars ($2,000,000.00) at 0% interest. Notwithstanding any provision in this Contract, items
eligible for the SEDA funds shall be limited to purchase of the Property and predevelopment
costs associated with the permanent improvements to the Property identified in Exhibit B.
Examples of items not eligible for the SEDA funds include: Ongoing administration costs or
business operating costs. SEDA shall have final determination on items eligible for payment,
provided SEDA's approval shall not be unreasonably withheld, conditioned, or delayed.
3. Security. This loan shall be evidenced by a Promissory Note executed by
Borrower in favor of SEDA, and secured by (a) a Line of Credit Instrument Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture Filing executed by Borrower
in favor of SEDA placed on the Property (the "Deed of Trust"), and (b) an Assignment of Plans,
Specifications, Reports and Permits (the "Assignment") executed by Borrower in favor of SEDA
(collectively with this Contract, the "Loan Documents"). Borrower hereby authorizes SEDA to file
or record any other documents Lender considers reasonably necessary to perfect Lender's
security interest.
3.1. Subordination. This loan will be secured by a first position lien on the
Property. SEDA will not agree to subordinate this loan.
Page 1 of 7
Attachment 2 Page 4 of 22
4. Title Insurance. Title insurance will be required. The costs of a title search, title
insurance and any endorsements thereto, and credit reports, and recording SEDA's security
interest against the Property are considered eligible project expenses and shall be paid by the
loan proceeds as the first or subsequent draws on the loan. Borrower will be responsible for
reconveyance costs either through the remainder of loan proceeds or by making a separate
payment to SEDA.
5. Credit Information Release. Borrower and its members each individually hereby
authorize any person or consumer reporting agency to complete and furnish to SEDA's agents
any information it may have or obtain in response to SEDA's credit inquiries. Borrower
authorizes SEDA to provide information concerning Borrower's and Borrower's members' credit
relationship to credit reporting agencies or other creditors.
6. Funding. Pursuant to Oregon Budget Law, SEDA's obligations are expressly
made subject to the availability of uncommitted funds on all dates anticipated for SEDA
payments. If funds are not available on the anticipated date, but are expected in the future,
SEDA funding may be deferred until funds become available.
7. Disbursement of Loan Proceeds.
7.1. Acquisition Loan funds. Loan funds not greater than the purchase price of
the Property or four hundred thousand dollars ($400,000), whichever is less, will be sent to
escrow to acquire the Property, along with the Loan Documents. No loan funds may be
disbursed unless all the Loan Documents are properly executed by Borrower.
7.2. Predevelopment Loan funds. SEDA shall segregate the loan proceeds to a
specific SEDA account held for the use of Borrower's disbursement pursuant to the terms of this
Contract. SEDA will disburse funds directly to the Borrower. Eligible expenses are only those
expenses listed in the project budget in Exhibit B. SEDA will disburse loan funds no more
frequently than once in any 30 -day period and within 15 days of SEDA's receipt of a
disbursement request that meets the following requirements and is otherwise approved by
SEDA:
7.2.1 Borrower will submit each disbursement application using the form
in Exhibit C.
7.2.2 Borrower will provide SEDA and City staff with all invoices, proofs
of payment, contracts and lien waivers associated with the Project with the disbursement
application.
7.2.3 With the exception of the final loan draw, loan funds must be
drawn in amounts of at least $10,000.
7.2.4 Borrower will provide SEDA and City staff with any other
documentation reasonably requested by SEDA or City staff in connection with the
disbursement, including without limitation, title endorsements.
Loan Documents.
7.2.5 Borrower shall not be in default of any of its obligations under the
Page 2 of 7
Attachment 2 Page 5 of 22
8. Borrower's Representations. Borrower represents, warrants and covenants to
SEDA the following as of the date of this Contract, each disbursement date and during the term
of this Agreement as follows:
8.1. Organization and Authority. Borrower is a limited liability company, duly
and validly organized and in existence under the laws of the State of Oregon. Borrower has full
legal right, power and authority, and all necessary licenses and permits required to (a)
undertake and carry on the predevelopment work, (b) execute and deliver this Contract, the
Note and the other Loan Documents, and (c) carry out and consummate all transactions
contemplated by this Contract, the Note and the other Loan Documents.
8.2. No Violations or Default. Borrower is not in default under or in violation of
any agreement to which it is a party or by which it is bound, nor any order, regulation, ruling or
requirement of a court or other public body or authority. No creditor has given Borrower notice
or threatened to give it any notice of default under any material agreement. At all times material
to this Contract, Borrower shall remain fully able to perform all of its duties and obligations.
8.3. Litigation. No action, suit, investigation or proceeding is pending against
Borrower or with respect to the Property or the Project before any court or administrative
agency, (a) the outcome of which, by itself or taken together with any other litigation, might have
a material adverse effect on the business, assets, operations, or financial condition of Borrower,
or (b) which purports to affect the legality, enforceability or validity of any Loan Document.
8.4. Tax Returns. All federal, state, and other tax returns of Borrower required
by law to be filed have been filed.
9. Project Schedule and Completion. The predevelopment work must be completed
within eighteen (18) months of the date Borrower signs this Contract (for the avoidance of
doubt, subject to extensions for events of force majeure as described in section 35). Each
predevelopment task must be completed according to the project schedule in Exhibit B. Any
deviations or adjustments to the project schedule that will materially delay the ultimate
completion of the predevelopment work and/or Project completion must be approved by SEDA.
10. Review of Work Product. SEDA staff may review the work product as stated in
Exhibit B to ensure that all elements have been satisfactorily completed. SEDA shall have
reasonable discretion to determine whether or not Borrower has complied with Borrower's
obligations herein. SEDA's determination on this matter shall be final and binding.
11. Standard of Work. Borrower shall ensure that all predevelopment activities,
investigation and work product contemplated by this Contract in Exhibit B or subsequently
approved in writing by SEDA, and undertaken by Borrower are of high quality and meet with the
commonly accepted standards of persons performing such investigations or activities or
producing such work product. If Borrower fails to take all reasonable steps of investigation,
adequate contracting and monitoring typical of a borrower similarly situated to Borrower and in
accordance with applicable industry standards, such failure shall be a breach of this Contract,
subject to applicable cure periods.
12. Licenses; Maintenance of Business. Borrower will remain a limited liability
company, validly existing under the laws of Oregon, and will keep in force all licenses and
permits necessary to undertake and complete all predevelopment work.
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Attachment 2 Page 6 of 22
13. Prior Expenses. Expenses incurred by Borrower or otherwise with respect to the
Project prior to the date of the execution of this Contract are not eligible for reimbursement.
14. Third Party Contracts. All predevelopment contracts will be between Borrower
and Borrower's contractors and suppliers as identified in Exhibit B. Borrower will provide copies
of executed contracts with all contractors. Borrower will not enter into new contracts for
predevelopment work with contractors or suppliers not described in Exhibit B, including yet to be
identified contractors, without the consent of SEDA, which shall not be unreasonably withheld,
conditioned, or delayed. The City of Springfield (the "City") and SEDA are not parties to these
contracts by virtue of providing this financial assistance.
15. Final Disbursement. Five percent (5%) of the total SEDA funding, not including
funds for acquisition of the Property, will be held back from the final draw and released only
upon satisfactory completion of the predevelopment work as described in section 19, and
receipt of documentation establishing that the total expenditures match the estimated cost
outlined in the Exhibit B.
16. Remaining Loan Funds. SEDA's funding assumes that completion of the
predevelopment work will require expenditure of all sums represented by the applicant as being
necessary for the predevelopment work. If the total predevelopment work costs are less than
the projected amount, SEDA's contribution is to be proportionately reduced. If, at the
completion of the predevelopment work, or the deadline for completion of the predevelopment
work set forth herein, any loan funds remaining undisbursed, the Borrower shall not be required
to repay any undisbursed funds.
17. Repayment Terms. The disbursed principal amount is fully due and payable
eighteen months (18) months from date of this Contract.
18. Consequences of Unauthorized Expenditure by Borrower. In the event that
Borrower expends any loan funds for a purpose outside of, or beyond what is set forth in this
Contract, SEDA may withhold any future loan funding and Borrower shall be immediately
obligated to repay SEDA all loan funds which have been expended for a purpose outside or
beyond that set forth in this Contract. Expenditures shall be subject to inspection annually by
SEDA/City auditors.
19. Prosect Completion. Borrower agrees to complete the predevelopment work
described in this Contract within the time schedule provided therein. The predevelopment work
shall be deemed complete when all documents have been created to the extent described in
Exhibits A and B and are otherwise ready to submit for required permits and construction
lending requests, as reasonably determined by SEDA. If necessary, Borrower may request in
writing, an extension to complete the work. This extension will be authorized by SEDA at its
reasonable discretion.
20. Construction Loan Negotiation. During the 6 -month period commencing on the
date of this Contract (the "Negotiation Period"), SEDA and Borrower shall exercise diligent and
good faith efforts to agree in writing on the material terms (which shall include, without limitation,
the loan term, interest rate, repayment terms, and required guarantors and loan collateral, as
generally described in the MOU) of a subsequent approximately $10 million dollar construction
loan from SEDA to Borrower for the construction of the Project (the "Construction Loan"), which
loan is intended to pay off this Predevelopment and Acquisition Loan. The Negotiation Period
may be extended if the parties mutually agree in writing to such extension. If the parties are
unable to agree in writing on the material terms of the Construction Loan during the Negotiation
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Attachment 2 Page 7 of 22
Period (as may be mutually extended), then, notwithstanding anything herein to the contrary,
SEDA shall have no obligation to disburse additional funds to Borrower under this loan, except
for disbursements for expenses actually and already incurred by Borrower under this
agreement. Nothing in this paragraph shall be construed to create an obligation of SEDA to
make the Construction Loan and no party shall be obligated with respect to the Construction
Loan until binding loan documents are mutually executed by the parties.
21. Consequences of Failing to Complete Prosect or Other Breach of this Contract.
In the event that the Borrower fails to complete the predevelopment work described in this
Contract within the applicable time schedule (as the same may be extended pursuant to force
majeure under section 35 of this Contract), or commits any other material breach of this
Contract beyond all applicable notice and cure periods, all sums loaned or granted by the City
shall then be immediately repaid to City by Borrower.
22. Loan Forgiveness. Notwithstanding anything in the Loan Documents to the
contrary, in the event that Borrower and SEDA mutually agree that future construction of the
Project is no longer feasible, this loan will be forgivable by SEDA. As a condition precedent to
loan forgiveness, Borrower will deliver and assign to SEDA, at no cost to SEDA, all Borrower's
right, title and interest in the architectural designs and drawings for the Project, third -party
reports, studies, work product and other Collateral (as defined in the Assignment), and a deed
to the Property in lieu of foreclosure, all in forms acceptable to SEDA. Following Borrower's
delivery of the aforementioned documents to SEDA, Borrower shall be fully released from any
and all obligations under this Contract or the Loan Documents. For the avoidance of doubt, the
principals, members, managers, and other individuals associated with Borrower shall have no
personal liability associated with this loan evidenced by this Contract, it being understood and
agreed that all liability of Borrower shall be limited solely to Borrower's assets described in the
Loan Documents, except for any indemnification obligations under this Contract or the Loan
Documents.
23. Inspection and Regulatory Review. It is Borrower's responsibility to obtain all
necessary regulatory reviews and approvals including but not limited to land -use review, and
requisite permits. The Project must remain in compliance with all regulatory bodies and
approval agencies. It will be Borrower's responsibility to resolve any regulatory issues.
24. Special Provisions. In addition to compliance with all representations made in the
loan Application, this loan shall further be conditioned upon Borrower's compliance with the
following special conditions:
24.1. Project Plan Amendment. Any material deviation from the predevelopment
work detailed in Exhibit B must be preapproved in writing by SEDA to be eligible for
reimbursement.
24.2. Design Review. The Project is subject to the City of Springfield
Development Code and applicable building codes. If the Project is not approved by Springfield
Development & Public Works Department, subsequent funding is hereby revoked. SEDA shall
agree to loan forgiveness as provided in Section 22.
25. Discharge of Liens. Borrower will timely pay and discharge all indebtedness,
taxes and other obligations for which it is liable or to which its income or property is subject, as
well as all claims for labor, materials or supplies that, if unpaid, might become by law a lien upon
the Property, subject to Borrower's right to contest any liens described in the Deed of Trust. If
Borrower fails to discharge any such claim or lien, SEDA may, in its sole discretion and without
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Attachment 2 Page 8 of 22
waiving the default, pay the same, which payment shall, at SEDA's option, be added to the
amount outstanding under the Note.
26. Prevailing Wages. Borrower and its subcontractors shall comply with ORS
279C.840 requiring Borrower and its subcontractors to pay workers on the Project the prevailing
rate of wage as established by the Oregon Bureau of Labor and Industries unless exempt
therefrom. Borrower will be responsible for compliance and reporting under the Oregon
Prevailing Wage Law and its implementing rules, ORS 279C.800 et. seq. Borrower will hold the
City and SEDA harmless for all costs, fees and penalties that may be incurred, and for all
reports, fines and/or litigation costs, including reasonable attorney fees, that may result from
Borrower's application of the Oregon Prevailing Wage Law to the Project.
27. No Assignment. The obligations of Borrower hereunder and under any
accompanying loan or personal obligations of Borrower are not assignable or transferable
without written consent of SEDA, which shall not be unreasonably withheld, conditioned, or
delayed.
28. Interest. In the event Borrower breaches any term of this Contract or any of the
other Loan Documents, Borrower's obligation will bear interest at the rate of twelve percent
(12%) per annum.
29. Attorney's Fees. Should suit or action be filed to enforce this Contract or seek
damages for its breach, the prevailing party shall be entitled to an award of its reasonable
attorney fees including those incurred upon appeal.
30. Indemnification and Regulatory Compliance. Borrower shall be responsible, and
shall comply with, all requirements of law including, but not limited to, compliance with all
applicable federal, state, and local regulations and hereby covenants and agrees to indemnify
and hold harmless SEDA, from any claim, demand, or damage, resulting in any manner from
the extension in loan funds from SEDA to Borrower and/or any use of SEDA funds by Borrower,
this Contract, Borrower's actions in connection with the Project, including its agents and
assignees, and from any use of SEDA funds except to the extent caused by SEDA's
negligence or willful misconduct.
31. Insurance. Borrower will at all times carry a Comprehensive General Liability
insurance policy for at least $2,000,000 combined single limits per occurrence for Bodily Injury,
Property Damage, and Personal Injury and $3,000,000 aggregate. The City and SEDA, and
their respective employees, officials, and agents will be named as an Additional Insured on the
General Liability policy and a certificate evidencing the foregoing insurance requirements in a
form acceptable to SEDA shall be delivered to SEDA prior to the initial loan disbursement. This
insurance will be primary over any insurance the City may carry on its own. Borrower
understands that the City of Springfield is a public entity subject to the requirements of the
Oregon Governmental Tort Claims Act, ORS 30.260 et seq.
32. Tax Consequences. SEDA makes no representations concerning the tax
consequences to the recipient of any agency grant or loan. Any questions in this regard should
be resolved by the recipient with his/her own tax professional.
33. Legal Representation. This Contract was prepared by SEDA. Borrower has had
the opportunity to have this Contract reviewed by its own legal counsel prior to its execution.
Page 6 of 7
Attachment 2 Page 9 of 22
34. Venue. Venue for litigation concerning this Contract shall rest exclusively with the
court of the State of Oregon for Lane County.
35. Force Maieure. If Borrower is delayed by reason of weather, fire, strikes,
pandemic (other than the present conditions or restrictions associated with the COVID-19
pandemic), Acts of God, or other similar circumstances beyond Borrower's reasonable control,
Borrower shall be entitled to additional time to complete the predevelopment work equal to that
lost by any or all of the above causes, as reasonably determined by SEDA.
36. Obligations Binding on Trustees Successors and assign . The obligations of
Borrower shall be binding upon Borrower, Borrower's successors and assigns, Borrower's
estate, any trusts in which Borrower is a trustor or beneficiary, and any other entity or instrument
owned or controlled by Borrower.
SEDA:
By: C _
Printed Nam6-"
Title: Ci=g�
2=1Date:
EXHIBITS:
A — Springfield Motors Development Report
B — Project Budget, Tasks and Timeline
C — Disbursement Request Form
BORROWER:
BLUE MCKENZIE APARTMENTS, LLC
By��–ted
- — Name: 4�tLams
Title:
Date: S't� z
Page 7 of 7
Attachment 2 Page 10 of 22
SPRINGFIELD MOTORS
DEVELOPMENT REPORT - OCTOBER 2020
702 NORTH A STREET, SPRINGFIELD, OR 97477
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Attachment 2 Page 12 of 22
SPRINGFIELD MOTORS
MIXED USE MASS TIMBER DEVELOPMENT
702 NORTH A STREET, SPRINGFIELD, OR 97477
DATE: 10/19/2020
SITEWORKS
PAGE: 20F19
DESIGN I BUILD
SPRINGFIELD ZONING MAP & EXISTING SITE INFORMATION
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PHASE 2 - FUTURE DEVELOPMENT
10 FT MAX SETBACK
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BUILDING HEIGHT SUBJECT TO SHADE POINT
HEIGHT REGULATIONS PER 3.2-225A
EASEMENT
SOUTHEAST PARCEL - FOCUS SITE
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PAVED PANG PHASE 1A - PROPOSED DEVELOPMENT
90 FT MAX BUILDING HEIGHT
25 FT MIN. BUILDING HEIGHT
STORIES MIN.
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0 FT MAX STREET SETBACK ON A -STREET
VEHICLE ACCESS ALLOWED FROM A -STREET
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ALLOWED USES - MIXED USED COMMERCIAL (MUC) ZONE
• BUSINESS AND PROFESSIONAL OFFICES AND PERSONAL SERVICES
• EATING AND DRINKING ESTABLISHMENTS (INCLUDING TAVERNS AND
BREW PUBS)
• RECREATIONAL FACILITIES
• RELIGIOUS, SOCIAL AND CIVIC INSTITUTIONS
• RESIDENTIAL USES IN AREAS DESIGNATED MIXED-USE IN THE METRO
PLAN OR REFINEMENT PLANS
• RETAIL SALES
• TRANSIENT ACCOMMODATIONS
Attachment 2 Page 13 of 22
PHASE 1 B - FUTURE RENOVATION
EXISTING BUICK DEALERSHIP
MUC - ZONE DEVELOPMENT STANDARDS
• MINIMUM FLOOR AREA = 6000 SF
• MIN F.A.R. = .40
• 40 FT MIN. STREET FRONTAGE
• 60% MIN. GROUND FLOOR AREA AS
COMMERCIAL USE
• UNLIMITED LOT COVERAGE
• BUILDING SETBACK = 0 FT
SPRINGFIELD MOTORS
MIXED USE MASS TIMBER DEVELOPMENT
702 NORTH A STREET, SPRINGFIELD, OR 97477
DATE: 10/19/2020
PAGE: 30F19 SITEWORKS
DESIGN I BUILD
SITE MASSING DIAGRAM
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Attachment 2 Page 14 of 22
PHASE 1
7 STORIES RESIDENTIAL TYPE IV -C: 63,980 SF
1 STORY COMMERCIAL TYPE IV -C: 9,020 SF
TOTAL 73,000 SF
85FT BUILDING HEIGHT
(MASS TIMBER CONSTRUCTION)
84 TOTAL RESIDENTIAL UNITS
49 ONE BEDROOM UNITS
28 TWO BEDROOM UNITS
7 THREE BEDROOM UNITS
PHASE 2
4 STORIES RESIDENTIAL TYPE VA: 62,000 SF
1 STORY COMM. / RES. TYPE IA: 15,900 SF
52FT BUILDING HEIGHT
85 TOTAL RESIDENTIAL UNITS
58 ONE BEDROOM UNITS
23 TWO BEDROOM UNITS
4 THREE BEDROOM UNITS
77,900 SF TOTAL BUILT SF
53,845 SF RESIDENTIAL LEASABLE
6,745 SF COMMERCIAL LEASABLE
12,070 SF COMMON AREA/ CIRCULATION
5,240 SF ROOF DECK AREA
SPRINGFIELD MOTORS
MIXED USE MASS TIMBER DEVELOPMENT
702 NORTH A STREET, SPRINGFIELD, OR 97477
DATE: 10/19/2020
PAGE: 50F19 SITEWORKS
DESIGN I BUILD
PHASE 1 - SITE DIAGRAM & MASSING
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Attachment 2 Page 15 of 22
EXIS I INU PUS I UFFlUE
SPRINGFIELD MOTORS
MIXED USE MASS TIMBER DEVELOPMENT
702 NORTH A STREET, SPRINGFIELD, OR 97477
DATE: 10/19/2020
SIITEWORKS
PAGE: 60F19
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Attachment 2 Page 16 of 22
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NOT TO SCALE
SPRINGFIELD MOTORS
MIXED USE MASS TIMBER DEVELOPMENT
702 NORTH A STREET, SPRINGFIELD, OR 97477
DATE: 10/19/2020
SIITEWORKS
PAGE: 70F19
SPRINGFIELD FEASIBILITY - MASSING
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EXHIBIT A
7 STORIES TYPE IV -C: 63,980 SF
1 STORY TYPE IV -C: 9,020 SF
(MASS TIMBER CONSTRUCTION)
84 RESIDENTIAL UNITS
A
73,000 SF TOTAL BUILT SF
54,425 SF RESIDENTIAL LEASABLE
2,300 SF COMMERCIAL LEASABLE
16,275 SF COMMON AREA / CIRCULATION
4
MASSING 3A
Attachment 2 Page 17 of 22
SPRINGFIELD FEASIBLITY
702 N. A STREET
Spnngfield, OR 97477
2020.06.25
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9 STREET CAR PARKING SPACES
10 STREET CAR PARKING SPACES
EXISTING BUILDING
8,000 SF GROUND FLOOR
CORRIDOR
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210 SF I F
MEP / TRASH /
BIKE / STORAGE
1 5,560 SF
STAIR
200 SF COMMERCIAL
2,300 SF
ELEV
90 SF
LOBBY
460 SF
i
STAIR
200 SF I
80' - 6"
10 STREET CAR PARKING SPACES
8 STREET CAR PARKING SPACES
Attachment 2 Page 18 of 22
1" — 40'-0"
s
SPRINGFIELD FEASIBLITY
702 N. A STREET
Springfield, OR 97477
2020.06.25
--------------------
59 STREET CAR PARKING SPACES
55 PRIVATE CAR PARKING SPACES '
I
I 114 TOTAL PARKING SPACES
I
I 48 UNITS; 2.38 TOTAL PARKING RATIO ,
II
8 STORIES TYPE IV -C '
9,020 SF (NEW) + 8,000 SF (E) _
17,020 SF TOTAL GROUND FLOOR AREA
60% COMMERCIAL REQUIRED
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8,000 SF GROUND FLOOR
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200 SF COMMERCIAL
2,300 SF
ELEV
90 SF
LOBBY
460 SF
i
STAIR
200 SF I
80' - 6"
10 STREET CAR PARKING SPACES
8 STREET CAR PARKING SPACES
Attachment 2 Page 18 of 22
1" — 40'-0"
s
SPRINGFIELD FEASIBLITY
702 N. A STREET
Springfield, OR 97477
2020.06.25
EXHIBIT A
r-------------------------------T-------------------------�
9,140 TOTAL SF PER FLOOR '
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12 UNITS PER FLOOR '
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84 UNITS ON 7 FLOORS: '
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7*7 = 49 ONE BEDROOM UNITS '
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4*7 = 28 TWO BEDROOM UNITS
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1 *7 = 7 THREE BEDROOM UNITS
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595 SF 280 SF 90 SF 200 SF
® SPRINGFIELD N.
A STREET ITY
702 N. A STREET
1/32^ = 1'-0" Spnngfield, OR 97477
2020.06.25
Attachment 2 Page 19 of 22
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EXHIBIT B
BLUE MCKENZIE APARTMENTS LLC PROJECT BUDGET, TASKS, & TIMELINE
Project Budget — Predevelopment & Acquisition Loan
Predevelopment Activity
Amount
Development Management
$409,000
Architectural Design
$739,250
Structural Engineering
$116,250
Civil Engineering
$31,500
Mechanical Engineering
$148,600
Surveying & Geotechnical
$17,000
Cost Estimating
$75,000
Loan Fee
$20,000
Contingency
$43,400
Predevelopment Total
$1,600,000
Acquisition Activity
Amount
Property Acquisition
$400,000
Acquisition Total
$400,000
LOAN TOTAL
$2,000,000
Project Tasks & Timeline
The Project timeline is intended to inform estimated timing and relationship of tasks and
predevelopment phases to be funded during the initial pre -development and property acquisition loan
($2M) phase. SEDA will disburse loan funds to Owner on a monthly basis according to the
Predevelopment & Acquisition Loan Agreement.
1. Property Acquisition. Owner will acquire fee simple title to the Property no later than June 30,
2021.
2. Survey & Geotechnical. Owner will complete surveying and geotechnical work needed to
complete the schematic design in four to six weeks, no later than June 30, 2021.
Development of Project Concept and Scope. Owner agrees to refine the Project concept and
scope for a mixed-use development that is consistent with the following attributes
("Schematic Design"): (a) eight -story mixed-use building; (b) seven stories of market rate
residential development providing approximately 84 units; (c) approximately 5,000 square
feet of ground floor commercial retail; and (c) CLT construction. Owner's Conceptual Design
will include at least the following: (i) a site plan that shows the location of the structure,
streets, any parking areas and open spaces; (ii) a program showing all proposed uses for the
Project; (iii) the location of uses within the Project; (iv) the approximate square footage of
each use; (v) building envelopes that show the approximate scale and massing of the
proposed buildings; and (vi) illustrative sketches depicting the character of the overall Project,
Page 1 of 2
Attachment 2 Page 20 of 22
including public spaces. SEDA will have the right to review and approve or disapprove of the
Schematic Design, which approval shall not be unreasonably withheld. The Schematic Design
will be completed within 12 weeks of Survey no later than September 1, 2021.
4. Schematic Design. Owner will prepare schematic level architectural design drawings
('Schematic Design's and engineering drawings and specifications of the Project, which shall
be consistent with the Conceptual Design approved by SEDA. The drawings will include a site
plan, floor plans, elevation views and renderings, and SEDA will have the right to review and
approve or disapprove of the Schematic Design, which approval shall not be unreasonably
withheld. Upon completion of Schematic Design, Owner will prepare and provide to SEDA a
preliminary cost estimate and construction schedule for the Project, which cost estimate and
schedule shall be subject to SEDA's review and approval. Owner will provide SEDA with the
Schematic Design for review no later than [date 12 -weeks out].
5. Design Development Drawings and Specifications. Owner will prepare the design development
level architectural and engineering drawings and specifications of the structures ("Design
Development Drawings'. The dimensioned drawings, details and the specifications will be
sufficiently detailed to allow subcontractor pricing and for the contractor to prepare cost
estimates, a schedule, construction contract, and to obtain a building permit. SEDA will have
the right to review and approve or disapprove of the 50% and 90% Design Development
Drawings, which approval shall not be unreasonably withheld. Upon completion of Design
Development Drawings, Owner will prepare and provide to SEDA an updated cost estimate
and construction schedule for the Project, which updated cost estimate and schedule shall be
subject to SEDA's reasonable review and approval.
6. Construction Documents. Owner will prepare construction documents for the Project sufficient
to allow the City to review and issue a building permit for all vertical construction other than
site work ("Construction Documents"). SEDA will have the right to review and approve or
disapprove of 50% and 100% Construction Documents, which approval shall not be
unreasonably withheld. The 50% Construction Documents must be provided to SEDA no later
than and the 100% Construction Documents must be provided to SEDA no later than March 1,
2022.
7. Final Cost Estimate. Upon completion of Construction Documents and no later than May 15,
2022, Owner will prepare and provide to SEDA an updated cost estimate and construction
schedule for the Project, which updated cost estimate and schedules shall be subject to
SEDA's reasonable review and approval. After completion of a competitive subcontractor bid
process for the construction of the Project, Owner shall provide to SEDA an updated project
budget and timeline. The final project budget and timeline is subject to reasonable review
and approval by the SEDA.
Page 2of2
Attachment 2 Page 21 of 22
Steps At set-up of this form, please complete steps below for pre -development phases
1 List Contractors in Column C
2 Insert Estimated Total Budget by Task in Column G
Do Not Modify Column L
Prime Hours Sub Fixed Costs Total Estimated Total Spent By End Total Spent Total Spent to Percent Task Percent of Total Task
Attachment 2 Page 22 of 22
PROMISSORY NOTE
$2,000,000.00 Date: , 2021
Location: Springfield, Oregon
For value received, the undersigned ("Borrower"), promises to pay the Springfield
Economic Development Agency, or to another person and at another place that the holder of
this Promissory Note (this "Note") may designate ("Lender"), the maximum principal sum of two
million dollars ($2,000,000.00), or as much as may be advanced under that certain SEDA
Downtown Acquisition and Predevelopment Loan Contract by and between Borrower and
Lender dated as of the date hereof (the "Loan Contract") and payable in the manner and on the
terms set forth in this Note:
1. Interest Rate. This is a no -interest loan.
2. Payments. The entire loan balance must be paid not later than eighteen (18)
months after the date of this note. Each payment will be applied first to any expenditures
advanced or incurred by Lender under this Note, the Loan Contract, the Deed of Trust (as
defined in section 16) and the Assignment (as defined in Section 16); second, to the balance to
the principal.
3. Prepayments. Borrower has the right to prepay this Note, in whole or in part, at
any time with no prepayment penalties. Early payments will not relieve Borrower of Borrower's
obligation to continue to make payments under the payment schedule. Early payments will
reduce the principal balance due and may result in Borrower making fewer payments. Borrower
agrees not to send Lender payments marked "paid in full," "without recourse," or similar
language. If Borrower send such a payment, Lender may accept it without losing any of
Lender's rights under this Note, and Borrower will remain obligated to pay any further amount
owed to Lender.
4. Default and Acceleration. Each of the following shall constitute an event of
default ("Event of Default") under this Note:
Payment Default. Borrower fails to make any payment when due under this Note.
Other Defaults. Any other "Event of Default" occurs in accordance with the Deed of
Trust, subject to the cure periods contained therein.
Lender's Rights. Upon an Event of Default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount, and Lender may exercise any other remedies in accordance with
the Deed of Trust.
5. Default Interest Rate. In the Event of a Default, Lender will have the right, in
addition to any other remedy set forth in this Note and the Deed of Trust, to increase the interest
rate set forth in this Note to twelve (12) percent per annum, until the Event of Default is cured to
Lender's satisfaction or until the Note is paid in full.
6. Reserved.
7. Attorney Fees; Costs. If the holder of this Note takes any action, judicial or
otherwise, to enforce this Note, the holder of this Note will be entitled to recover from Borrower
all expenses that the holder of this Note may reasonably incur in taking such action, including,
but not limited to, costs and expenses provided by statute or otherwise, as well as reasonable
attorney fees determined by the court, whether incurred in a suit or action or on appeal from a
judgment or decree, in connection with any bankruptcy proceeding, or in connection with a
nonjudicial action. Upon demand, Borrower will reimburse the holder of this Note for expenses
so incurred, together with interest from the date of invoice to Borrower until repaid at the rate
specified in section 5.
8. Governing Law. This Note is to be governed by and construed in accordance
with the laws of Oregon.
Attachment 3 Page 1 of 3
9. Severability. If any provision or clause of this Note is construed by a court of
competent jurisdiction to be void, invalid, or unenforceable, that construction will not affect other
provisions of this Note that can be given effect without the void, invalid, or unenforceable
provision, and to this end the provisions of this Note are declared to be severable.
10. Venue. If there is a lawsuit, Borrower agrees upon Lender's request to submit to
the jurisdiction of the courts of Lane County, Oregon.
11. Amendments. Any amendment to this Note must be made in writing and signed
by all parties.
12. Notice. All payments and written communication concerning this Note must be
mailed or delivered to Courtney Griesel, Economic Development Manager, City of Springfield,
225 Fifth Street, Springfield, OR 97477; cgriesel(a)-springfield-or.gov; 541-736-7132.
13. Voluntariness. Before signing this Note, Borrower read and understood all the
provisions of this Note. Borrower agrees to the terms of this Note.
14. Waiver of Protest. Borrower and each present or future maker, surety, endorser
and signatory to this Note, in whatever capacity, waives presentment, demand, protest, notice of
dishonor, and all suretyship defenses, and agrees that the Lender may exercise its rights under
the Note in any order and at any time. Without notice to any such person (except for any notice
to borrower specified in this Note and without the need to obtain further consent from any party),
and without in any way diminishing the obligations of any person, Lender may (a) deal with any
such person with reference to this Note by way of forbearance, extension, modification,
compromise, or otherwise; (b) extend, release, surrender, exchange, compromise, discharge, or
modify any right or obligation secured by or provided in this Note, the Trust Deed, or any other
document securing this Note; and (c) take any other action that the holder may deem
reasonably appropriate to protect its interest in the collateral under the Trust Deed.
15. Limitation of Interest. In no event will any payment of interest or any other sum
payable under this Note exceed the maximum amount permitted by applicable law. If it is
established that any payment(s) exceeding lawful limits have been received, the holder and
payee of such amount(s) will refund such excess or, at its option, credit the excess amount(s) to
the principal. Such payments will not affect the obligation to make other payments required
under this Note that do not cause the lawful limits to be exceeded.
16. Security. Borrower acknowledges that this this Note is secured by (a) a Line of
Credit Instrument Deed of Trust, Security Agreement and Fixture Filing dated as of the date of
this Note on unaddressed real estate located at Map and Tax Lot number 17-03-35-42-02300 in
Springfield, Oregon 97477, executed by Borrower in favor of Lender (the "Deed of Trust"), and
(b) an Assignment of Plans, Specifications, Reports and Permits dated as of the date of this
Note, executed by Borrower in favor of Lender (the "Assignment").
17. Bankruptcy. Borrower agrees that, notwithstanding ORS 73.0602 and ORS
73.0604, any payment under this Note that is avoided in a later bankruptcy proceeding or
otherwise will not be deemed a payment, and Borrower's obligations under the Note will be
reinstated or supplemented, or both, to the extent of any payment so avoided. In that event,
Borrower will not be discharged even if this Note has been canceled, renounced or surrendered.
Attachment 3 Page 2 of 3
18. Right to Setoff. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other
account). This includes all accounts Borrower holds jointly with someone else and all accounts
Borrower may open in the future. However, this does not include any IRA or Keogh accounts,
or any trust accounts for which setoff would be prohibited by law. 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, and, at Lender's option, to administratively
freeze all such accounts to allow Lender to protect Lender's charge and setoff rights provided in
this paragraph.
19. Statute -of -Frauds Notice. UNDER OREGON LAW, MOST AGREEMENTS,
PROMISES, AND COMMITMENTS MADE BY LENDER CONCERNING LOANS AND OTHER
CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL FAMILY OR HOUSEHOLD
PURPOSES OR SECURED SOLELY BY THE BORROWER'S PROPERTY MUST BE IN
WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY LENDER TO BE
ENFORCEABLE.
20. Waiver of Jury Trial. BORROWER, AFTER CONSULTING OR HAVING HAD
THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY RELATED
INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY
THIS NOTE OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF EITHER OF THEM. NEITHER THE BORROWER NOR THE
LENDER SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY
SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION
IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS
SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY EITHER THE BORROWER OR LENDER EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY BOTH PARTIES.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPETED COPY OF THIS PROMISSORY
NOTE.
BORROWER:
THE UNDERSIGNED ARE JOINTLY AND SEVERALLY LIABLE FOR ALL OBLIGATIONS SET
FORTH IN THIS NOTE AND THE ACCOMPANYING TRUST DEED.
BLUE MCKENZIE APARTMENTS LLC
By:
inted Name:.—IL-kms r64C
Title:
Date: 7• Z/
Attachment 3 Page 3 of 3
GRANTOR:
Property Owner:
Blue McKenzie Apartments LLC
240 SE 2n1 Ave.
Portland, OR 97214
BENEFICIARY:
Springfield Economic Development Agency (SEDA)
c/o City of Springfield
City Manager's Office
225 Fifth Street
Springfield, OR 97477
TRUSTEE:
Kristina Kraaz
City Attorney's Office
225 Fifth Street
Springfield, OR 97477
RETURN AFTER RECORDING TO:
Sprincifield Economic Development Agency (SEDA)
City of Springfield
225 Fifth Street
Springfield, OR 97477
SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY
LINE OF CREDIT INSTRUMENT DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
Maximum principal amount to be advanced: $2,000,000; however, such maximum principal amount may be exceeded by principal advances made
pursuant to ORS 86.155.
Maturity pate: November �,? , 2022. exclusive of options to renew or extend, if any.
Notice to Recorder: THiS DOCUMENT CONSTITUTES A FIXTURE FILING IN ACCORDANCE WiTH THE PROVISIONS OF ORS 79.0502 THAT
SHALL HAVE AN EFFECTIVE PERIOD UNTiL THIS DEED OF TRUST IS RECONVEYED OR SATISFIED OF RECORD OR ITS EFFECTIVENESS
OTHERWISE TERMINATES AS TO THE REAL PROPERTY.
THIS LINE OF CREDIT INSTRUMENT DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING ("Deed of Trust") is dated 6 1, At.-
2021, among Blue McKenzie Apartments LLC, an Oregon limited liability company, and whose address is 240 SE 2nd Ave., Portland, OR 97214
("Grantor"); Springfield Economic Development Agency (SEDA), whose address is c/o City of Springfield, City Manager's Office, 225 Fifth
Street, Springfield, OR 97477 (referred to below sometimes as "Lender" and sometimes as "Beneficiary"); and Kristina Kraaz, City of
Springfield, City Attorney's office, 225 Fifth Street, Springfield, OR 97477 (referred to below as "Trustee").
Grantor is the Owner in fee simple title to certain real property including all improvements and easements and other real property rights belonging
thereto located in Lane County, State of Oregon, located east of 7th Street and north of A Street in Springfield (Map Number 17-03.35-42, Tax Lot
2300), more particularly described below.
Grantor is the maker of a certain Promissory Note ("Note") payable to the order of the Beneficiary evidencing the loan ("Loan") in the maximum principal
amount of $2,000,000.00 and payable as stated therein. The Note is made pursuant to a SEDA Downtown Acquisition and PredevelDpment Loan
Contract between Grantor and Beneficiary (the "Loan Contract") and is secured by. among other things, this Deed of Trust and that certain Assignment
of Plans, Specifications, Reports and Permits executed by Grantor in favor of Beneficiary (the "Assignment"). The purpose of the loan is to provide
funding for Grantor to acquire the property described herein in the vicinity of 7" Street and A Street in Springfield, Oregon, and to fund Grantor's
predevelopment expenses consistent with the Loan Contract. The Loan is secured by a lien on real property owned by Grantor and located in Lane
County, Oregon.
CONVEYANCE AND GRANT. For and in consideration of Beneficiary making loan to Grantor and other good and value consideration, receipt in
sufficiency of which are acknowledged, this Deed of Trust provides as follows: Grantor conveys to Trustee for the benefit of Lender as Beneficiary with
the power of sale and right of entry and possession, all of Grantor's right, tine, and interest in and to the following described real property, together with
all existing or subsequently erected or affixed buildings, improvements and fixtures; all easements, rights-of-way. and appurtenances; all water, water
rights, and ditch rights (inducting stock in utilities with ditch or irrigation rights); and all other rights. royalties, and profits relating to the real property,
including without limitation all minerals, oil, gas, geothermal and similar matters. (the "Real Property") located in Lane County, State of Oregon (Map
Identification and Tax Lot No. 17-03-35-42-02300):
Commencing at a point 105 feel West of the Southeast corner of Block 72 of the SPRINGFIELD INVESTMENT AND POWER COMPANY'S ADDITION TO
SPRINGFIELD. as platted and recorded in Book 25, Page 306. Lane County Oregon Deed Records: thence running West 100 leet, thence North 119 feet: thence
East 100 feel; thence South 119 feet to the point of beginning, all in Lane County. Oregon,
EXCEPTING THEREFROM: the East 15 feet of the above described parcel.
ALSO: the East one-half of the now vacated alley abutting the above described properly on the West.
ALSO: that portion of the South one-half of the East-West alley abutting & contiguous with the North boundary per Ordinance #5408.
The Note, this Deed of Trust, the Loan Contract and the Assignment evidence the obligations of Grantor to Beneficiary. This Deed of Trust is given to
secure those obligations and concems the Real Properly. A breach of any term of any of the above referenced notes, contracts, or trust deeds shall
constitute a breach of all entitling Lender to all remedies cumulatively available in all instruments.
Grantor presently assigns to Lender (also known as Beneficiary in this Deed of Trust) all of Grantor's right, title, and interest in and to all present and
future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the
Personal Property and Rents.
THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL
PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER
THE NOTE AND THE RELATED DOCUMENTS. THE RELATED DOCUMENTS, AND THIS DEED OF TRUST. THIS DEED OF TRUST IS GIVEN AND
ACCEPTED ON THE FOLLOWING TERMS:
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Deed of Trust. Grantor shall pay to Lender all amounts secured by this Deed of
Trust as they become due, and shall strictly and in a timely manner perform all of Grantor's obligations under the Note, this Deed of Trust, and the other
Related Documents.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the
following provisions:
Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property: (2) use,
operate or manage the Property; and (3) collect the Rents from the Property. The following provisions relate to the use of the Property or to other
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Attachment 4 Page 1 of 7
DEED OF TRUST
limitations on the Property, THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS DOCUMENT TO BE IN
VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS.
Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.
Compliance with Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the
Property, there has been no use, generation, manufacture. storage, treatment, disposal, release or threatened release of any Hazardous
Substance by any person on, under. about or from the Property: (2) Grantor has no knowledge of. or reason to believe that there has been, except
as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation,
manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any
prior owners or occupants of the Property, or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters; and
(3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent or other
authorized user of the Property shall use. generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or
from the property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and
ordinances. including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such
inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the
Deed of Trust. Any Inspections or tests made by Lender shall be for Lender's purposes only and shalt not be construed to create any responsibility
or liabOity on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due
diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for
indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and (2) 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 Deed of Trust or as a consequence of any use, generation, manufacture, storage, disposal.
release or threatened release occurring during Grantor's ownership or interest in the Property, whether or not the same was or should have been
known to Grantor. The provisions of this section of the Deed of Trust, including the obligation to indemnify, shall survive the payment of the
Indebtedness and the satisfaction and reconveyance of the lien of this Deed of Trust and shall not be affected by Lender's acquisition of any
interest in the Property, whether by foreclosure or otherwise.
Nuisance, Waste. Grantor shall not cause, conduct, or permit any nuisance, nor commit, permit, or suffer any stripping of or waste on or to the
Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party to right
to remove, any timber, minerals (including oil and gas), coal, day, scoria, soil, gravel or rock products without Lender's prior written consent.
Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written
consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace
such Improvements with improvements of at least equal value.
Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to
Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Deed of Trust.
Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in
effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans with Disabilities
Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate
appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as. in Lender's sole opinion, Lender's interests in the
Property are not jeopardized. Lender may require Grantor to post adequate security or surety bond, reasonably satisfactory to Lender, to protect
Lenders interest.
Duty to Protect. Grantor agrees neither to abandon nor leave unattended the Property. Grantor shall do all other acts, in addiflon to those acts set
forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property.
DUE ON SALE — CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Deed of
Trust upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sate
or transfer" means the conveyance of Real Property or any right, title or interest in Real Property; whether legal, beneficial or equitable; whether
voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract. contract for deed, leasehold interest, lease -option
contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of
conveyance of an interest in the Real Property. If any Grantor is a corporation, partnership or limited liability company (LLC), transfer also includes any
change in ownership of more than twenty-five percent (25%) of the voting stock, partnership interests or limited liability company interests, as the case
may be, of such Grantor. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Oregon law.
TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Deed of Trust:
Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, special taxes, assessments, charges (including -water and
sewer), fines and impositions levied against or on account of the Property, and shall pay when due all claims for work done on or for services
rendered or material furnished to the Property. Grantor shall maintain the Property free of all liens having priority over or equal to the Interest of
Lender under this Deed of Trust. except for the lien of taxes and assessments not due and except as otherwise provided in this Deed of Trust.
Right to Contest. Grantor may withhold payment of any tax, assessment. or claim in connection with a good faith dispute over the obligation to
pay, so long as Lenders interest in the Property is not jeopardized. if a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen
(15) days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if
requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient
to discharge the lien plus any costs and aftomeys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any
contest, Grantor shall defend itself and Lender shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name
Lender as an additional obligee under and surety bond furnished in the contest proceedings.
Evidence of Payment. Grantor shall provide to Lender, upon request, satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the
Property.
PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Deed of Trust:
Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements an a
replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any
coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general
liability insurance in such coverage amounts as Lender may request with Trustee and Lender being named as additional insureds in such liability
insurance policies. Additionally, Grantor shall maintain such other Insurance, including but not limited to hazard, business interruption, and boiler
insurance, as Lender may reasonably require. Policies shall be written in form, amounts, coverages and basis reasonably acceptable to Lender and
issued by a company or companies reasonably acceptable to Lender. Grantor, upon request of Lender, will deliver to Lender from time to time the
policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at
least fifteen (15) days prior written notice to Lender. Each Insurance policy also shall include an endorsement providing that coverage in favor of
Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an
area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and
maintain Federal Flood Insurance, if available, within 45 days after notice is given by Lender that the Property is located in a special flood hazard
area. for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under
the National Flood Insurance Program, or as otherwise required by Lender, and to maintain ALL insurance for the term of the loan.
Application of Proceeds, Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor
fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired. Lender may, at Lender's election, receive and
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Attachment 4 Page 2 of 7
DEED OF TRUST
retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the
restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged
or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor
from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Deed of Trust. Any proceeds which have not
been disbursed within 180 days after their receipt and which Lender has not committed to the repair of restoration of the Property shall be used first
to pay any amount owing to Lender under this Deed of Trust, then to pay accrued interest. and the remainder, if any, shall be applied to the
principal balance of the Indebtedness. If Lender holds any proceeds after payment in full the Indebtedness. such proceeds shall be paid to Grantor
as Grantor's interests may appear.
Grantor's Report on Insurance. Upon request of Lender, however not more than once a year. Grantor shall furnish to Lender a report on each
existing policy of insurance showing: (1) the name of insurer: (2) the risks insured; (3) the amount of the policy; (4) the property insured, the then
current replacement value of such property, and the manner of determining that value; and (5) the expiration date of the policy. Grantor shall, upon
request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property,
LENDER'S EXPENDITURES. if any action of proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails
to comply with any provision of this Deed of Trust or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due
any amounts Grantor is required to discharge or pay under this Deed of Trust or any Related Documents, Lender on Grantor's behalf may (but shall not
be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property.
All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or
paid by Lender to the date of repayment by Grantor, All such expenses will become a part of the Indebtedness and. at Lender's option, will (A) be
payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due
during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note: or (C) be treated as a balloon payment which will be
due and payable at the Note's maturity. The Deed of Trust also will secure payment of these amounts. Such right shall be in addition to all other rights
and remedies to which Lender may be entitled upon Default.
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this peed of Trust
Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and
encumbrances other than those set forth in the Real Property description or in any title insurance policy title report, or final title opinion issued in
favor of, and accepted by, Lender in connection with this Deed of Trust, and (b) Grantor has the full right, power, and authority to execute and
deliver this Deed of Trust to Lender.
Defense of Title. Subject to the exception in the paragraph above. Grantor warrants and will forever defend the title to the Property against the
lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Trustee or Lender
under this Deed of Trust, Grantor shall defend the action at Grantor's expense, Grantor may be the nominal party in such proceeding, but Lender
shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will
deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation.
Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws,
ordinances, and regulations of governmental authorities.
Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Deed of Trust shall
survive the execution and delivery of this Deed of Trust, shall be continuing in nature. and shall remain in full force and effect until such time as
Grantor's Indebtedness shall be paid in full.
CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Deed of Trust:
Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such
steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to
be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation.
Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in
lieu of condemnation. Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or
the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and
attorney's fees incurred by Trustee or Lender in connection with the condemnation.
IMPOSITION OF TAXES, FEES, AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees,
and charges are a part of this Deed of Trust:
Current Taxes, Fees, and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Deed of Trust and take
whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all
taxes, as described below. together with all expenses incurred in recording, perfecting or continuing this Deed of Trust, including without limitation
all taxes, fees, documentary stamps, and other charges for recording or registering this Deed of Trust.
Taxes. The following shall constitute taxes to which this section applles: (1) a specific tax upon this type of Deed of Trust or upon all or any part of
the Indebtedness secured by this Deed of Trust: (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on
the Indebtedness secured by this type of Deed of Trust: (3) a tax on this type of Deed of Trust chargeable against the Lender or the holder of the
Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor.
Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Deed of Trust, this event shall have the same
effect as an Event of Default. and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor
either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with
Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Deed of Trust as a security agreement are a part of this
Deed of Trust:
Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall
have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time.
Securlty Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security
interest in the Rents and Personal Property. In addition to recording this Deed of Trust in the real property records, Lender may, at any time and
without further authorization from Grantor. file executed counterparts, copies or reproductions of this Deed of Trust as a financing statement.
Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove,
sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Property in
a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written
demand from Lender to the extent permitted by applicable law.
Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted
by this Deed of Trust may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Deed of Trust.
FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attomey-in-fact are a part of this Deed of
Trust:
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DEED OF TRUST
Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, or will cause to be
made. executed or delivered. to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, of rerecorded.
as the case may be, at such times and in such offices and places as Lender may deem appropriate. any and all such mortgages, deeds of trust,
security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other
documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1)
Grantor's obligations under the Note. this Deed of Trust, and the Related Documents, and (2) the liens and security interests created by this Deed
of Trust as first and prior Gens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to
the contrary in writing. Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this
paragraph.
Attorney -in -Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor
and at Grantor's expense. For such purposes. Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making,
executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the
matters referred to in the preceding paragraph.
FULL PERFORMANCE. If Grantor pays all the Indebtedness when due. and otherwise performs all the obligations imposed upon Grantor under this Deed
of Trust, Lender shall execute and deliver to Trustee a request for full reconveyance and shall execute and deliver to Grantor suitable statements of
termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. All reconveyance fees shall be
paid to Lender by Grantor,
EVENTS OF DEFAULT. Each of the following, at Lenders option, shall constitute an Event of Default under this Deed of Trust:
Payment Default. Grantor fails to make any payment when due under the Indebtedness
Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant, or condition contained in this Deed of Trust or in
any of the Related Documents, or to comply with or to perform any term. obligation, covenant, or condition contained in any other agreement
between Lender and Grantor.
Compliance Default. Failure to comply with any other term, obligation, covenant or condition contained in this Deed of Trust. the Note, or in any of
the Related Documents.
Default on Other Payments. Failure of Grantor within the time required by this Deed of Trust to make any payment for taxes or insurance, or any
other payment necessary to prevent filing of or to effect discharge of any lien.
Default in Favor of Third Parties. Should Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement,
or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay the
Indebtedness or perform their respective obligations under this Deed of Trust or any of the Related Documents.
False Statements. Any warranty. representation, or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Deed of
Trust or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or
misleading at any time thereafter.
Defective Collateralization. This Deed of Trust 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 Grantor's existence as a going business. the insolvency of Grantor, the appointment of a receiver for
any part of Grantor'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 Grantor.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help.
repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This
includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there
is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if
Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor of
forfeiture proceeding. in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.
Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied
within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to
Lender, whether existing now or later.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor. endorser, surety, or accommodation party of any
of the Indebtedness or any guarantor, endorser. surety, or accommodation party dies or becomes incompetent. or revokes or disputes the validity
of, or liability under, any Guaranty of the Indebtedness. In the event of a death. 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
any Event of Default.
Adverse Change. A material change occurs in Grantor's financial condition, of Lender believes the prospect of payment or performance of the
Indebtedness is impaired.
Insecurity. Lender in good faith believes itself insecure
Right to Cure. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same
provision of this Deed of Trust within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender
demanding cure of such default: (1) cures the default within fifteen (15) days: or (2) if the cure requires more than fifteen (15) days, immediately
initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. provided that the total cure period shall not
exceed sixty (60) days from the default..
RIGHTS AND REMEDIES ON DEFAULT. if an Event of Default occurs under this Deed of Trust, at any time thereafter, Trustee or Lender may exercise
any one or more of the following rights and remedies:
Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy. and an election to make expenditures
or to take action to perform an obligation of Grantor under this Deed of Trust, after Grantor's failure to perform, shall not affect Lender's right to declare a
default and exercise its remedies.
Foreclosure. With respect to all or any part of the Real Property, the Trustee shall have the right to foreclose by notice and sale, and Lender shall have
the right to foreclose by judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law. If this Deed of Trust is
foreclosed by judicial foreclosure, Lender will be entitled to a judgment which will provide that if the foreclosure sale proceeds are Insuffrclenl to satisfy
the judgment, execution may issue for the amount of the unpaid balance of the judgment.
UCC Remedies. With respect to all or any part of the Personal Properly. Lender shall have all the rights and remedies of a secured party under the
Uniform Commercial Code.
Collect Rents. Lender shall have the right, without notice to Grantor to take possession of and manage the Property and collect the Rents, including
amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right. Lender
may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then
Page 4 of 7
Attachment 4 Page 4 of 7
DEED OF TRUST
Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to
negotiate the same and collect the proceeds, Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations
for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph
either in person, by agent, or through a receiver.
Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to
protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the
proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law, Lender's right
to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount,
Employment by Lender shall not disqualify a person from serving as a receiver.
Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes
entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property
and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of
Lender.
Other Remedies. Trustee or Lender shall have any other right or remedy provided in this Deed of Trust or the Note or by law
Notice of Sate. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which
any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least fifteen (15)
days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property.
Sale of the Property. To the extent permitted by applicable law. Grantor hereby waives any and all rights to have the Property marshalled. In
exercising its rights and remedies, the Trustee or Lender shall be free to sell all or any part of the Properly together or separately, in one sale or by
separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property.
Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Deed of Trust or any of the other Related
Documents, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether
or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary
at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear
interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to
any limits under applicable law. Lender's attorneys' fees and Lender's legal expenses. whether or not there is a lawsuit, including attorneys' fees and
expenses for bankruptcy proceedings (induding efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post -judgment
collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees, title
Insurance, and fees for the Trustee, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided
by law.
Rights of Trustee. Trustee shall have all of the rights and duties of Lender as set forth in this section.
POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions retailing to the powers and obligations of Trustee are part of this Deed of Trust:
Powers of Trustee. in addition to all powers of Trustee arising as a matter of law, Trustee shall have the power to take the following actions with
respect to the Property upon the written request of Lender and Grantor: (a) join in preparing and filing a map or plat of the Real Property, including the
dedication of streets or other rights to the public; (b) join in granting any easement or creating any restriction on the Real Property; and (c) join in any
other agreement affecting this Deed of Trust or the interest of Lender under this Deed of Trust,
Obligations to Notify. Trustee shall not be obligated to notify any other party of a pending sale under any other trust deed or lien, or of any action or
proceeding in which Grantor, Lender, or Trustee shall be a party, unless the action or proceeding is brought by Trustee.
Trustee. Trustee shall meet all qualifications required for Trustee under applicable law. In addition to the rights and remedies set forth above, with
respect to all or any part of the Property, the Trustee shall have the right to foreclose by notice and sale, and Lender shall have the right to foreclose by
judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law.
Successor Trustee. Lender, at Lender's option, may from time to time appoint a Successor Trustee to any Trustee appointed under the Deed of Trust
by an instrument executed and acknowledged by Lender and recorded in the Office of the Recorder. County of Lane, State of Oregon, The instrument
shall contain, in addition to all other matters required by Stale law, the names of the original Lender, Trustee, and Grantor, the book and page where this
Deed of Trust is recorded, and the name and address of the Successor Trustee. and the instrument shall be executed and acknowledged by Lender or
its successors in interest. The Successor Trustee, without conveyance of the Property, shall succeed to all the title, power, and duties conferred upon
the Trustee in this Deed of Trust and by applicable law. This procedure for substitution of Trustee shall govern to the exclusion of all other provisions for
substitution.
NOTICES. Any notice required to be given under this Deed of Trust, Including without limitation any notice of default and any notice of sale shall be given
in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified, or registered mail, postage prepaid,
directed to the addresses shown near the beginning of this Deed of Trust. All copies of notices of foreclosure from the holder of any lien which has priority
over this Deed of Trust shall be sent to Lender's address, as shown near the beginning of this Deed of Trust. Any party may change its address for notices
under this Deed of Trust by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For
notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, r there i r
more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors.
ASSOCIATED FEES.
GRANTOR IS REQUIRED TO PAY LENDER FOR ALL FEES ASSOCIATED WITH OBTAINING A SEDA DOWNTOWN MATCHING LOAN FROM THE
LOAN PROCEEDS, WHICH INCLUDES CREDIT REPORTS, TITLE SEARCH, TiTLE INSURANCE, RECORDING COSTS, AND RECONVEYANCE
COSTS.
MISCELLANEOUS PROVISIONS. The fallowing miscellaneous provisions are a part of this Deed of Trust
Amendments. This Deed of Trust, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Deed of Trust. No alteration of or amendment to this Deed of Trust 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.
Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified
statement of net operating income received from the Properly during Grantors previous fiscal year in such form and detail as Lender shall require. "Net
operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property.
Caption Headings. Caption headings in this Deed of Trust are for convenience purposes only and are not to be used to interpret or define the
provisions of this Deed of Trust.
Merger. There shall be no merger of the interest or estate created by this Deed of Trust with any other interest or estate in the Property at any time held
by or for the benefit of Lender in any capacity. without the written consent of Lender,
Governing Law. This Deed of Trust will be governed by, construed, and enforced in accordance with federal law and the laws of the State of Oregon.
This Deed of Trust has been accepted by Lender in the State of Oregon.
Page 5 of 7
Attachment 4 Page 5 of 7
DEED OF TRUST
Choice of Venue. If there is a lawsuit. Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Lane County, State of Oregon.
No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Deed of Trust 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 Deed of Trust shall not prejudice ar constitute a waiver of Lenders right otherwise to demand strict compliance with that
provision or any other provision of this Deed of Trust. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute
a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this
Deed of Trust, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such
consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.
Severability. If a court of competent jurisdiction finds any provision of this Deed of Trust to be illegal, invalid, or unenforceable as to any circumstance,
that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall
be cons#dered modified so that it becomes legal, valid. and enforceable. If the offending provision cannot be so modified. it shall be considered deleted
from this Deed of Trust. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Deed of Trust shall not
affect the legality, validity, or enforceability of any other provision of this Deed of Trust,
Successors and Assigns. Subject to any limitations stated in this Deed of Trust on transfer of Grantor's interest. this Deed of Trust shall be binding
upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor,
Lender, without notice to Grantor, may deal with Grantors successors with reference to this Deed of Trust and the Indebtedness by way of forbearance
or extension without releasing Grantor from the obligations of this Deed of Trust or liability under the Indebtedness.
Time is of the Essence. Time is of the essence in the performance of this Deed of Trust.
Waive Jury. All parties to this Deed of Trust hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any party
against any other party.
Waiver of Homestead Exemption. Grantor hereby releases and waives all rights and benefits of the homestead exemption laws of the State of Oregon
as to all indebtedness secured by this Deed of Trust.
Commercial Deed of Trust. Grantor agrees with Lender that this Deed of Trust is a commercial deed of trust and that Grantor will not change the use
of the Property without Lender's prior written consent.
STATUTE OF FRAUDS. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY LENDER CONCERNING
LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY
BY THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY LENDER TO BE ENFORCEABLE.
FORCED PLACE INSURANCE NOTICE.
WARNING: UNLESS YOU PROVIDE US WiTH EVIDENCE OF THE INSURANCE COVERAGE AS REQUIRED BY OUR CONTRACT OR LOAN
AGREEMENT, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTEREST. THIS INSURANCE MAY, BUT NEED NOT,
ALSO PROTECT YOUR INTEREST. IF THE COLLATERAL BECOMES DAMAGED, THE COVERAGE WE PURCHASE MAY NOT PAY ANY CLAIM
YOU MAKE OR ANY CLAIM MADE AGAINST YOU. YOU MAY LATER CANCEL THIS COVERAGE BY PROVIDING EVIDENCE THAT YOU HAVE
OBTAINED PROPERTY COVERAGE ELSEWHERE.
YOU ARE RESPONSIBLE FOR THE COST OF ANY INSURANCE PURCHASED BY US. THE COST OF THIS INSURANCE MAY BE ADDED TO
YOUR CONTRACT OR LOAN BALANCE. IF THIS COST IS ADDED TO YOUR CONTRACT OR LOAN BALANCE, THE INTEREST RATE
PAYABLE UNDER THE UNDERLYING LOAN WILL APPLY TO THIS ADDED AMOUNT. THE EFFECTIVE DATE OF THE COVERAGE MAY BE
THE DATE YOUR PRiOR COVERAGE LAPSED OR THE DATE YOU FAILED TO PROVIDE PROOF OF COVERAGE.
THE COVERAGE WE PURCHASE MAY BE CONSIDERABLY MORE EXPENSIVE THAN INSURANCE YOU CAN OBTAIN ON YOUR OWN AND
MAY NOT SATISFY ANY NEED FOR PROPERTY DAMAGE COVERAGE OR ANY MANDATORY LIABILITY INSURANCE REQUIREMENTS
IMPOSED BY APPLICABLE LAW. (EACH REFERENCE TO "YOU" AND "YOUR" WILL REFER TO GRANTOR AND EACH REFERENCE TO "US"
AND "WE" WILL REFER TO BENEFICIARY.)
STATUTORY NOTICE. BEFORE SIGNING OR ACCEPTING THIS SECURITY 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. THIS SECURITY INSTRUMENT DOES NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS SECURITY INSTRUMENT IN
VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS SECURITY INSTRUMENT, THE
PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING
DEPARTMENT TO VERIFY THAT THE UNIT OF LAND BEING TRANSFERRED iS A LAWFULLY ESTABLISHED LOT OR PARCEL, AS DEFINED
IN ORS 92.010 OR 215.010, TO VERIFY THE APPROVED USES OF THE LOT OR PARCEL, TO DETERMINE ANY LIMITS ON LAWSUITS
AGAINST FARMING OR FOREST PROACTICES, AS DEFINED IN ORS 30.930, AND TO INQUIRE ABOUT THE RIGHTS OF NEIGHBORING
PROPRTY OWNERS, IF ANY, UNDER QRS 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, CAHPTER 8, OREGON LAWS 2010.
DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Deed of Trust. Unless specifically stated
to the contrary. all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Deed
of Trust shall have the meanings attributed to such terms in the Uniform Commercial Code:
Beneficiary. The word "Beneficiary' means the Springfield Economic Development Agency (SEDA), and its successors and assigns
Deed of Trust. The words "Deed of Trust" mean this Deed of Trust among Grantor, Lender, and Trustee, and includes without limitation all assignment
and security interest provisions relating to the Personal Property and Rents.
Default, The word "Default" means the Default set forth in this Deed of Trust in the section titled "Default."
Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation 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 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.. the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., or other applicable state or federal laws, rules. or regulations adopted pursuant thereto or intended to protect human health or the
environment.
Event of Default. The words "Event of Default" mean any of the events of default set forth in this Deed of Trust in the Events of Default section of this
Deed of Trust.
Grantor. The word "Grantor" means Blue McKenzie Apartments LLC and includes all cc -signers and co -makers signing the Note.
Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration, or physical, chemical or
infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored.
disposed of, generated, manufactured, transported, or otherwise handled, The words "Hazardous Substances" are used in their very broadest sense and
include without limitation any and all hazardous or toxic substances, materials. or waste as defined by or listed under the Environmental Laws. The term
"Hazardous Substances" also includes. without limitation, petroleum, including crude oil. and any fraction thereof, and asbestos.
Page 6 of 7
Attachment 4 Page 6 of 7
DEED OF TRUST
Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real
Property, facilities. additions. replacements, and other construction on the Real Property.
Indebtedness. The word "Indebtedness" means all principal, interest, and other amounts, costs, and expenses payable under the Note or Related
Documents. together with all renewals of. extensions of, modifications of, consolidations of, and substitutions for the Note or Related Documents and
any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Trustee or Lender to enforce Grantor's
obligations under this Deed of Trust. together with interest on such amounts as provided in this Deed of Trust.
Lender. The word "Lender" means Springfield Economic Development Agency (SEDA), its successors and assigns.
Note. The word "Note" means the Promissory Note dated as of the date hereof, in the original principal amount of $2,000,000.00 from Grantor to
Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of. and substitutions for the promissory note or
agreement. The maturity date of the Note is ,
Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by
Grantor, and now or hereafter 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 together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from
any sale or other disposition of the Property.
Property. The word "Property" means collectively the Real Property and the Personal Property,
Real Property. The words "Real Property" mean the real property, interests and rights. as further described in this Deed of Trust.
Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan contracts or agreements, environmental
agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, collateral assignments and all other
instruments, agreements, and documents, whether now or hereafter existing, executed in connection with the Indebtedness.
Rents. The word "Rents" means all present and future rents, revenues, income. issues, royalties, profits, and other benefits derived from the Property.
Trustee. The word "Trustee" means Kristina Kraaz. City of Springfield, City Attorney's Office, 225 Fifth Street, Springfield, OR 97477 and any substitute
or Successor Trustees.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF TRUST, AND GRANTOR AGREES TO ITS TERMS AND
CONDITIONS.
GRANTOR:
BLUE MCKENZIE APARTMENTS LLC,
an Oregon limited liabffity company
By:
n -Pierre Veillet
Title: Member of Northwest Sustainable Properties as Manager of Blue McKenzie Apartments, LLC
CORPORATE ACKNOWLEDGEMENT
STATE OF OREGON j
COUNTY OF LANE )
This instrument was acknowledged before me on this day of J VrIlP2021 by Jean—Pierre Veillet as
that he executed the same. e i
of Blue McKenzie Apartments LLC, the person whose name is subscribs instrument. and acknowledged
*Member of Northwest Sustainable Properties, LLC
as Manager OFFICIAL STAMP
DANIEL DAVID HALLBERG
NOTARY PUBLIC -OREGON Nota ubico Expires:
Oregon lJ7 �r Z1
My Commission Expires: —f L
COMMISSION NO. 996165
MY COMMISSION EXPIRES JANUARY 23, 2024
REQUEST FOR FULL_ RECONVEYANCE
(To be used only when obligations have been paid in full)
To: Krisfina Kraaz, Springfield City Attorney, Trustee
The undersigned is the legal owner and holder of all indebtedness secured by this Deed of Trust. All sums secured by this Deed of Trust have been fully
paid and satisfied. You are hereby directed, upon payment to you of any sums owning to you under the terms of this Deed of Trust or pursuant to any
applicable statute, to cancel the Note secured by this Deed of Trust (which is delivered to you together with this Deed of Trust), and to reconvey, without
warranty, to the parties designated by the terms of this Deed of Trust, the estate now held by you under this Deed of Trust. Please mail the
reconveyance and Related Documents to:
Grantor/Borrower
Date
Beneficiary/Lender:
By:
Page 7 of 7
Attachment 4 Page 7 of 7
ASSIGNMENT OF PLANS, SPECIFICATIONS, REPORTS AND PERMITS
THIS ASSIGNMENT OF PLANS, SPECIFICATIONS, REPORTS AND PERMITS (this "Assignment") is
made as of May 17 , 2021 ("Effective Date") by Blue McKenzie Apartments LLC, an Oregon limited
liability company ("Assignor"), for the benefit of Springfield Economic Development Agency ("Lender").
Recitals
A. Lender has agreed to make a loan to Assignor in the maximum principal amount of
$2,000,000.00 (the "Loan"). The Loan is being made pursuant to the terms and conditions of that
certain SEDA Downtown Acquisition and Predevelopment Loan Contract, between Assignor, as
borrower, and Lender, dated of event date herewith (the "Loan Contract").
B. The Loan is evidenced by that certain Promissory Note of even date herewith in the
maximum principal amount of $2,000,000.00 made by Assignor in favor of Lender (the "Note") and is
secured by a Line of Credit Instrument Deed of Trust, Security Agreement and Fixture Filing of even date
herewith made by Assignor in favor of Lender (the "Deed of Trust"), encumbering Assignor's interest in
certain real property described on Exhibit A attached hereto (the "Property").
C. Lender requires as a condition precedent to making the Loan that Assignor enter into
this Assignment and Assignor wishes to grant to Lender a security interest, and collaterally assign,
pledge, convey and set over unto Lender the collateral more particularly hereinafter described.
Agreement
NOW, THEREFORE, in consideration of the making of the Loan and as an inducement to Lender
to do so, and for and in consideration of the mutual promises, covenants and agreements hereinafter
set forth, Assignor and Lender agree as follows:
1. Creation of Security Interest. Assignor hereby grants to Lender a security interest in,
and does hereby collaterally assign, pledge, convey and set over unto Lender, any and all of Assignor's
right, title and interest, if any, in, to and under (a) all plans, specifications, surveys, architectural
renderings and drawings, soil test reports, and other reports or examinations, (b) all service contracts,
construction contracts, architect agreements, consulting agreements, maintenance contracts,
management agreements, warranties, guaranties and the right to use all names now or hereafter used
by Assignor, (c) all permits, certificates, licenses, approvals, contracts, agreements, entitlements and
authorizations, and (d) all market analyses, appraisals and development and economic feasibility
studies, which Assignor has, may have, or may subsequently directly or indirectly enter into, obtain or
acquire in connection with the design, development and construction of improvements on the Property
(collectively, the "Collateral"), it being understood that prior to the occurrence and continuation of an
Event of Default by Assignor or as otherwise provided in the Loan Contract, Lender shall not exercise any
right in and to the Collateral, and Assignor shall have the right to use the Collateral and enforce all of the
terms, covenants, conditions and agreements therein contained, without interruption by Lender, and
Lender shall take such action as may be reasonably required to permit Assignor to use the Collateral and
so enforce said terms, covenants, conditions and agreements. Assignor shall ensure that each and every
item that is part of the Collateral is freely assignable to Assignee by its express terms.
1
Attachment 5 Page 1 of 5
2. Assignor's Liabilities. This Assignment is made and given as collateral security for the
prompt payment when due of any and all indebtedness, obligations and liabilities of Assignor to Lender,
and evidenced by or secured by or otherwise provided in the Loan Contract, the Note and the Deed of
Trust, whether such indebtedness, obligations or liabilities are now existing or hereafter created, direct
or indirect, absolute or contingent, joint or several, due or to become due, howsoever created,
evidenced or arising and howsoever acquired by Lender, and any and all renewals, extensions or
refinancings thereof (all of the foregoing are hereinafter collectively referred to as the "Indebtedness").
Upon full payment by Assignor of the Indebtedness, this Assignment and the lien or charge created
hereby or resulting herefrom automatically shall cease to exist.
3. Representations, Warranties and Covenants of Assignor. Assignor represents, warrants
and covenants to Lender that: (a) Assignor is the owner of all right, title and interest of the owner under
all of the documents, instruments, agreements and contracts constituting the Collateral and, so long as
any portion of the Indebtedness remains unpaid, Assignor shall remain liable for all costs, fees and
expenses which may be or become due and payable under the Collateral; (b) Assignor shall not sell,
transfer, assign, pledge, encumber or mortgage all or any portion of the Collateral or any interest
therein without the prior written consent of Lender; (c) Assignor shall reimburse Lender for all
reasonable costs, expenses and fees, including court costs and reasonable attorneys' fees, incurred for
any action taken by Lender to remedy an Event of Default or to enforce Lender's rights hereunder; (d)
Assignor will punctually and promptly perform all covenants, agreements and conditions required to be
performed by it under this Assignment and all of the documents, instruments, agreements and contracts
constituting the Collateral; (e) Assignor agrees to take reasonable efforts to enforce performance by the
other party to each document, instrument, agreement or contract constituting the Collateral of each
and every material obligation, covenant, condition and agreement to be performed by such other party;
and (f) Assignor agrees promptly to deliver to Lender, following written request therefor, true, complete
and correct copies of each agreement or contract comprising the Collateral.
4. Limitation of Lender's Liability. The interest of Assignor in the Collateral is assigned and
transferred to Lender by way of collateral security only, and Lender by its acceptance hereof shall not be
deemed to have assumed or become liable for any of the obligations or liabilities of Assignor under the
Collateral, whether provided for by the terms thereof, arising by operation of law or otherwise.
Assignor hereby acknowledges that Assignor shall remain liable for the due performance of Assignor's
obligations under the documents, instruments, agreements and contracts constituting the Collateral to
the same extent as though this Assignment had not been made. It is expressly intended, understood
and agreed that this Assignment, the Loan Contract, the Note and the Deed of Trust are made and
entered into for the sole protection and benefit of Lender and Assignor, and their respective successors
and assigns (but in the case of assigns of Assignor, only to the extent permitted hereunder), and no
other person or persons shall have any right of action hereunder or rights to the proceeds of the Loan at
any time; that no third party shall under any circumstances be entitled to any equitable lien on the
undisbursed proceeds of the Loan at any time. The relationship between Lender and Assignor is solely
that of a lender and borrower, and nothing contained herein shall in any manner be construed as
making the parties hereto partners or joint venturers or creating any other relationship other than
lender and borrower.
S. Events of Default. An "Event of Default" shall be deemed to have occurred under this
Assignment upon the occurrence of an "Event of Default" under the Deed of Trust.
2
Attachment 5 Page 2 of 5
6. Remedies. At any time upon or following the occurrence of any one or more Events of
Default hereunder, Lender shall be entitled to exercise any and all rights and remedies provided under
the Note or the Deed of Trust.
7. Further Assurances. Assignor will, from time to time, execute, acknowledge and deliver
such additional documents and instruments and take such other actions as may reasonably be required
or requested by Lender for carrying out the intention of or facilitating the performance of this
Assignment. Assignor hereby irrevocably authorizes Lender at any time, and from time to time, to file in
any jurisdiction any initial financing statements and amendments thereto that indicate the Collateral is
comprised of all assets of the debtor or words of similar effect.
8. Indemnity. Assignor hereby agrees to indemnify, defend and hold Lender harmless from
and against any and all liability, expense, cost or damage which Lender may incur by reason of any act or
omission of Assignor under any of the documents, instruments, or agreements constituting the
Collateral; provided, however, the foregoing indemnification shall not apply to any instance in which
Lender has committed gross negligence or willful misconduct.
9. Counterparts; Electronic Signatures. This Assignment may be executed in any number
of counterparts, all of which shall be taken to be one and the same instrument, for the same effect as if
all parties hereto had signed the same signature page. Receipt of an executed signature page to this
Assignment by electronic transmission shall constitute effective delivery thereof.
10. Miscellaneous. This Assignment and all rights and liabilities hereunder and in and to any
and all Collateral shall be binding upon and inure to the benefit of Lender and its successors and assigns,
and shall be binding upon and inure to the benefit of Assignor and its successors and permitted assigns.
This Assignment and all rights and obligations hereunder, including matters of construction, validity and
performance, shall be governed by the laws of the State of Oregon. All provisions of this Assignment
shall be deemed valid and enforceable to the extent permitted by law. Any provision or provisions of
this Assignment which are held unenforceable, invalid or contrary to law by a court of competent
jurisdiction, shall be of no force or effect, and in such event each and all of the remaining provisions of
this Assignment shall subsist and remain and be fully effective according to the terms of this Assignment
as though such invalid, unenforceable or unlawful provision or provision had not been included in this
Assignment.
(Remainder of Page Intentionally Left Blank,
Signature Page Follows)
3
Attachment 5 Page 3 of 5
Date.
IN WITNESS WHEREOF, Assignor and Lender have executed this Assignment as of the Effective
Assignor: Blue McKenzie Apartments LLC
an Oregon limited liability company
By:
am
e:
Title:
Lender: Springfield Economic Development Agency
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Attachment 5 Page 4 of 5
..
yr
EXHIBIT A
Property Legal Description (Map Identification and Tax Lot No. 17-03-35-42-02300)
Commencing at a point 105 feet West of the Southeast corner of Block 72 of the SPRINGFIELD
INVESTMENT AND POWER COMPANY'S ADDITION TO SPRINGFIELD, as platted and recorded in Book 25,
Page 306, Lane County Oregon Deed Records; thence running West 100 feet, thence North 119 feet;
thence East 100 feet; thence South 119 feet to the point of beginning, all in Lane County, Oregon.
EXCEPTING THEREFROM: the East 15 feet of the above described parcel.
ALSO: the East one-half of the now vacated alley abutting the above described property on the West.
ALSO: that portion of the South one-half of the East-West alley abutting & contiguous with the North
boundary per Ordinance #5408.
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Attachment 5 Page 5 of 5