BUSINESS LOAN AGREEMENT
PART A
THIS SEAFIRST BUSINESS LOAN AGREEMENT ("Agreement") is made between
SEATTLE-FIRST NATIONAL BANK ("Bank") and IDS/SHURGARD INCOME GROWTH PARTNERS
L.P. III, a Washington limited partnership ("Borrower") with respect to the
following:
1. TERM LOAN. Subject to the terms and conditions of this Agreement, Bank
agrees to lend to Borrower as follows:
a. AMOUNT: The initial outstanding principal amount owing under this
Agreement, prior to any disbursements hereunder, shall be
$8,000,000.00 which constitutes the aggregate outstanding principal
amount, as of the date hereof, of the Prior Notes (as defined
below). Bank agrees, subject to the terms and conditions of this
Agreement, to make further advances under this Agreement from time
to time upon Borrower's written request therefor between the date
of this Agreement and December 31, 1996; PROVIDED HOWEVER, that at
no time may Borrower request an advance hereunder that would cause
the aggregate outstanding principal amount of this loan to exceed
the lesser of $12,500,000 or 50% of the Total Appraised Collateral
Value (as defined below). Bank agrees that the Total Appraised
Collateral Value of the real property covered by the Existing Deeds
of Trust totals $22,525,000 as of the date of this Agreement. This
loan matures on April 1, 2001.
b. INTEREST RATE: As described in the Note (as defined below).
c. REPAYMENT: At the times and in amounts as set forth in the Note.
d. COLLATERAL: This term loan shall be secured by deeds of trust
covering certain real and personal property located in Alameda
County, California; San Xxxxxxx County, California, Sacramento
County,, California (collectively, the "California Deeds of Trust")
and Maricopa County, Arizona (the "Arizona Deed of Trust") all as
described on Schedule attached hereto (collectively, the "Existing
Deeds of Trust") and certain other deeds of trust that may be
granted by Borrower from time to time (collectively the "Future
Deeds of Trust"). The Existing Deeds of Trust and the Future Deeds
of Trust are collectively referred to in this Agreement as the
"Deeds of Trust."
BUSINESS LOAN AGREEMENT
PART B
1. PROMISSORY NOTE(S). This loan shall be evidenced by the Amended
and Restated Promissory Note dated as of the date hereof in the principal amount
of up to $12,500,000.00 executed by Borrower in favor of Bank (the "Note"). The
Note shall amend, restate, consolidate and replace (without satisfying the
indebtedness evidenced thereby) (a) that certain promissory note in the maximum
principal amount of $4,000,000.00 dated as of July 29, 1993, executed by
Borrower in favor of Bank, as amended by that certain Amendment to Note dated as
of August 27, 1993, by and between Bank and Borrower, and (b) that certain
promissory note in the maximum principal amount of $4,865,000.00 dated as of
September 1, 1993, executed by Borrower and Grcich, et al., a California
partnership, Xxxxx Storage Investors No. 4, Ltd., a California limited
partnership and Xxxxx Properties Co., a California corporation (collectively,
"Xxxxx"), in favor of Bank, as amended by that certain Assignment and Assumption
Agreement dated as of January 9, 1994, by and between Borrower, Xxxxx and Bank
(the promissory notes referred to in clauses (a) and (b) above are collectively
referred to herein as the "Prior Notes").
2. CONDITIONS TO AVAILABILITY OF FUTURE ADVANCES OF TERM LOAN. This
Agreement shall not become effective and Bank shall not be obligated to
disburse/make any advance, until Borrower complies with all of the following
conditions and Bank receives all of the following documents, each of which must
be in form and substance satisfactory to Bank.
2.1 Original, duly executed Note;
2.2 Original, duly executed and duly recorded Arizona Deed of
Trust and original, duly executed and duly recorded amendments to the California
Deeds of Trust (the "Amendments to Deed of Trust");
2.3 Such evidence as Bank may deem appropriate that the security
interests and liens in favor of Bank are valid, enforceable, perfected and prior
to the rights and interests of others except those consented to in writing by
Bank;
2.4 Evidence that the execution, delivery and performance by
Borrower of this Agreement and the execution, delivery and performance by
Borrower of any instrument or agreement required under this Agreement, as
appropriate, have been duly authorized;
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2.5 Any other document which is deemed by the Bank to be required
from time to time to evidence loans or to effect the provisions of this
Agreement;
2.6 If requested by Bank, a written legal opinion expressed to
Bank, of counsel for Borrower as to the matters set forth in Sections 3.1 and
3.2, and to the best of such counsel's knowledge after reasonable investigation,
the matters set forth in Sections 3.3, 3.5, 3.6, 3.7 and such other matters as
the Bank may reasonably request;
2.7 Pay or reimburse Bank for any out-of-pocket expenses expended
in making or administering the loans made hereunder including, without
limitation, attorneys' fees (including allocated costs of in-house counsel),
appraisal fees, title insurance premiums and recording fees;
2.8 Other
(a) Borrower shall have paid to Bank a Commitment Fee of
$125,000.00.
(b) Borrower shall have executed and delivered to Bank (1)
a Certificate and Indemnity Agreement Regarding Compliance with Building Laws,
(2) a Certificate and Indemnity Agreement Regarding Hazardous Substances, (3)
such UCC-1 Financing Statements and UCC-3 Change Statements as Bank deems
necessary or desirable to perfect or continue the perfection of all security
Interests granted under any of the Deeds of Trust, and (4) a letter in form and
substance satisfactory to Bank regarding compliance with Americans With
Disabilities Act.
(c) Bank shall have received from Chicago Title Insurance
Company endorsements (or irrevocable commitments to issue endorsements) in form
and substance satisfactory to Bank to the following title insurance policies
(the "Policies") insuring that nothing contained herein or in the Amendments to
Deed of Trust impairs the lien or priority of the California Deeds of Trust:
(i) Policy No. 34868 dated August 4, 1993, (ii) Policy No. 05-0047-02-030916
(Order No. 338026) dated September 1, 1993, and (iii) Policy No. 296015L dated
September 1, 1993.
(d) Bank shall have received an irrevocable commitment to
issue a title insurance policy in form and substance satisfactory to Bank from
Chicago Title Insurance Company insuring that the Arizona Deed of Trust is a
first lien on the real property described therein;
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(e) Bank shall have received evidence satisfactory to Bank
that all insurance required by any of the Existing Deeds of Trust is in effect.
(f) Bank shall have received a Phase I environmental
assessment in form and substance satisfactory to Bank as to the real property
that is subject to the lien of any of the existing Deeds of Trust (the "Existing
Real Property Collateral").
(g) Bank shall have received appraisals in form and
substance satisfactory to Bank as to each parcel of the Existing Real Property
Collateral.
(h) Borrower and Bank shall have entered into an interest
rate swap agreement, in a notional amount and otherwise in form and substance
satisfactory to Bank.
3. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants
to Bank as of the date of this Agreement and hereafter so long as credit granted
under this Agreement is available and until full and final payment of all sums
outstanding under this Agreement and the Note that:
3.1 Borrower is duly organized and existing under the laws of the
state of its organization as a limited partnership. Borrower is properly
licensed and in good standing in each state in which Borrower is doing business
and Borrower has qualified under and has complied with, where required, the
fictitious or trade name statutes of each state in which Borrower is doing
business, and Borrower has obtained all necessary government approvals for its
business activities; the execution, delivery and performance of this Agreement
and such notes and other instruments required herein are within Borrower's
partnership powers, have been duly authorized by all necessary partnership
action and are not in conflict with the terms of any charter, bylaw or other
organizational papers of Borrower, and this Agreement, such notes and the loan
documents are the valid and binding obligation of Borrower, enforceable
according to their terms.
3.2 The execution, delivery and performance of this Agreement,
the Note, the Deeds of Trust, the Amendments to Deeds of Trust, and all other
documents executed in connection with or otherwise relating to this Agreement
(collectively, the "Loan Documents") are not in conflict with any law or any
indenture, agreement or undertaking to which Borrower is a party or by which
Borrower is bound or affected;
3.3 Borrower has title to each of the properties and assets as
reflected in its financial statements (except such assets which have been sold
or otherwise disposed of in the ordinary course of business), and no assets or
revenues of the
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Borrower are subject to any lien except as required or permitted by this
Agreement, disclosed in its financial statements or otherwise previously
disclosed to Bank in writing;
3.4 All financial information, statements as to ownership of
Borrower and all other statements submitted by Borrower to Bank, whether
previously or in the future, are and will be true and correct in all material
respects upon submission, and are and will be complete upon submission insofar
as may be necessary to give Bank a true and accurate knowledge of the subject
matter thereof;
3.5 Borrower has filed all tax returns and reports as required by
law to be filed and has paid all taxes and assessments applicable to Borrower or
its properties which are presently due and payable, except those being contested
in good faith;
3.6 There are no proceedings, litigation or claims (including
unpaid taxes) against Borrower pending or, to the knowledge of the Borrower,
threatened, before any court or government agency, and no ether event has
occurred which may have a material adverse effect on Borrower's financial
condition;
3.7 There is no event which is, or with notice or lapse of time
or both, would be an Event of Default (as defined in Article 7) under this
Agreement.
3.8 Borrower has exercised due diligence in inspecting Borrower's
properties for hazardous wastes and hazardous substances. Except as otherwise
previously disclosed and acknowledged to Bank in writing:
(a) during the period of Borrower's ownership of Borrower's
properties, there has been no use, generation, manufacture, storage, treatment,
disposal, release or threatened release of any hazardous waste or hazardous
substance by any person in, on, under or about any of Borrower's properties;
(b) Borrower has no actual or constructive knowledge that
there has been any use, generation, manufacture, storage, treatment, disposal,
release or threatened release of any hazardous waste or hazardous substance by
any person in, on, under or about any of Borrower's properties by any prior
owner or occupant of any of Borrower's properties; and
(c) Borrower has no actual or constructive notice of any
actual or threatened litigation or claims of any kind by any person relating to
such matters. The terms "hazardous waste(s)," "hazardous substance(s),"
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same
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meanings as set forth in the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq., the
Superfund Amendments and Reauthorization Act of 1986, as amended, Pub. L.
No. 99-499, the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
Section 1801, et seq., the Resource Conservation and Recovery Act, as amended,
49 U.S.C. Section 6901, et seq., or other applicable state or federal laws,
rules or regulations adopted pursuant to any of the foregoing.
3.9 Each chief place of business of Borrower, and the office or
offices where Borrower keeps its records concerning any of the collateral, is
located at: 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000.
3.10 Each of the representations and warranties contained in this
Agreement or any other Loan Document shall be true and correct in each case as
if made on and as of the date of any advance under this Agreement, and Borrower
expressly agrees that it shall be an additional event constituting an Event of
Default under the Deeds of Trust if any representation or warranty made
hereunder shall prove to have been incorrect in any material respect when made.
4. AFFIRMATIVE COVENANTS. So long as credit granted under this
Agreement is available and until full and final payment of all sums outstanding
under this Agreement and promissory note(s), Borrower will:
4.1 Use the proceeds of any new advances under this Agreement
exclusively for the payment of certain sums owing to Xxxxx for the deferred
purchase price on certain parcels of real property that Borrower purchased from
Xxxxx pursuant to (a) that certain Agreement for Purchase and Sale and Escrow
Instructions dated July 15, 1993, as amended by the First Addendum dated July
29, 1993, and as assigned by the Assignment of Agreement of Purchase and Sale
dated July 29, 1993, and (b) that certain Agreement for Purchase and Sale and
Escrow Instructions dated August 5, 1993, as amended by the First Amendment to
Agreement for Purchase and Sale and Escrow Instructions dated August 27, 1993,
and as assigned by the Assignment of Agreement of Purchase and Sale dated August
27, 1993 (the "Xxxxx Agreements").
4.2 Maintain an annual Net Operating Income in an amount at least
equal to 2.5 times annual principal and interest payments on debt owed by
Borrower to Bank. The term "Net Operating Income" means, with respect to any
fiscal year, Borrower's projected annual rental income for such fiscal year
minus the sum of Borrower's actual operating expenses for such fiscal year to
date plus projected operating expenses for the remainder of such fiscal year
plus depreciation and amortization for such period;
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4.3 Maintain a tangible net worth of no less than Borrower's
tangible net worth as reported in Borrower's audited financial statement for the
fiscal year ending December 31, 1993 and as such tangible net worth is reduced
annually by Borrower's reported depreciation, amortization and non-cash expenses
and not permit Borrower's total indebtedness which is not subordinated in a
manner satisfactory to Bank to exceed 50% of Borrower's tangible net worth.
"Tangible net worth" means the excess of total assets over total liabilities
excluding, however, from the determination of total assets (a) all assets which
should be classified as intangible assets, such as goodwill, patents,
trademarks, copyrights, franchises and deferred charges (including unamortized
debt discount and research and development costs); (b) treasury stock; (c) cash
held in a sinking or other similar fund established for the purpose of
redemption or other retirement of capital stock; (d) to the extent not already
deducted from total assets, reserves for depreciation, depletion, obsolescence
or amortization of properties and other reserves or appropriations of retained
earnings which have been or should be established in connection with the
business conducted by the relevant corporation; and (e) any revaluation or other
write-up in book value of assets subsequent to the fiscal year of such
corporation last ended at the date of this Agreement;
4.4 Promptly give written notice to Bank of:
(a) all litigation affecting Borrower where the uninsured
amount is $100,000.00 or more;
(b) any substantial dispute which may exist between
Borrower and any governmental regulatory body or law enforcement authority;
(c) any default or Event of Default (however defined under
this Agreement or any other agreement between Borrower and with Bank or any
other creditor, or any event which, upon notice or lapse of time, or both, would
become an Event of Default; and
(d) any other matter which has resulted or might result in
a material adverse change in Borrower's financial condition or operations;
4.5 Provide or cause to be provided to Bank, as soon as available
but in any event within 60 days following the close of each of Borrower's fiscal
years and within 30 days following the end of each fiscal quarter in a form
satisfactory to Bank (including audited statements if required at any time by
Bank), such financial statements and other information respecting the financial
condition and operations of Borrower as Bank may reasonably request;
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4.6 Maintain in effect insurance with responsible insurance
companies in such amounts and against such risks as is customarily maintained by
persons engaged in businesses similar to that of Borrower and all policies
covering property given as security for the loans shall have loss payable
clauses in favor of Bank. Borrower agrees to deliver to Bank such evidence of
insurance as Bank may reasonably require and, within thirty (30) days after
notice from Bank, to obtain such additional insurance as Bank may reasonably
request;
4.7 Pay all indebtedness, taxes and other obligations for which
the Borrower is liable or to which its income or property is subject before they
shall become delinquent, except any which is being contested by the Borrower in
good faith;
4.8 Continue to conduct its business as presently constituted,
and will maintain and preserve all rights, privileges and franchises now
enjoyed, conduct Borrower's business in an orderly, efficient and customary
manner, keep all Borrower's properties in good working order and condition and,
from time to time, make all needed repairs, renewals or replacements so that the
efficiency of Borrower's properties shall be fully maintained and preserved;
4.9 Maintain adequate books, accounts and records and prepare all
financial statements required hereunder in accordance with generally accepted
accounting principles and practices consistently applied, and in compliance with
the regulations of any governmental regulatory body having jurisdiction over
Borrower or Borrower's business;
4.10 Permit representatives of Bank to examine the books and
records of Borrower and to examine the collateral of the Borrower at reasonable
times;
4.11 Perform, on request of Bank, such acts as may be necessary or
advisable to perfect any lien or security interest provided for herein or
otherwise carry out the intent of this Agreement;
4.12 Comply with all applicable federal, state and municipal laws,
ordinances, rules and regulations relating to its properties, charters,
businesses and operations, including compliance with all minimum funding and
other requirements related to any of Borrower's employee benefit plans.
4.13 Permit representatives of Bank to enter into Borrower's
properties to inspect and test Borrower's properties as Bank, in its sole
discretion, may deem appropriate to determine Borrower's compliance with section
5.8 of this Agreement; provided, however, that any such inspections and tests
shall be for Bank's sole benefit
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and shall not be construed to create any responsibility or liability on the part
of Bank to Borrower or to any third party.
5. NEGATIVE COVENANTS. So long as credit granted under this Agreement
is available and until full and final payment of all sums outstanding under this
Agreement and promissory note(s):
5.1 Borrower shall not permit or create any lien or encumbrance
on any of its assets other than liens or encumbrances of the type permitted
under the Deed of Trust nor incur, assume, guaranty, or otherwise become or
remain directly or indirectly liable with respect to any debt of Borrower other
than debt currently due by Borrower at the time of closing of the Loan or
incurred in the ordinary course of its business; PROVIDED, HOWEVER, that
Borrower may create a lien in the pledge real property identified in Schedule II
hereto to secure its obligations under the Xxxxx Agreements.
5.3 Total debt repayments to partners of Borrower plus
partnership distributions shall not exceed Borrower's net income plus
depreciation, amortization and other non-cash expenses for any calendar quarter.
5.4 Borrower shall not permit the outstanding principal amount of
the loan at any time to exceed 50% of the Total Appraised Collateral Value. As
used in this Agreement, the term "Total Appraised Collateral Value" shall mean
the aggregate value of all real property collateral in which a first lien is
created by any of the Existing Deeds of Trust as determined by MAI Appraisals
and confirmed by Bank's Appraisal Review Department. Borrower may from time to
time execute deeds of trust covering other property securing the obligations
secured by the Existing Deeds of Trust. The value of such future collateral
shall be calculated in the same manner as the Existing Real Property Collateral;
PROVIDED, HOWEVER, that before such future collateral shall be so included,
Borrower shall have satisfied with respect to such future collateral all
conditions set forth in Section 2 relating to the Existing Real Property
Collateral (including, without limitation, the execution of documents relating
to compliance with building laws, hazardous substance indemnities, and UCC
financing statements and the issuance of title insurance policies insuring the
first lien status of such Future Deeds of Trust). If at any time Bank
determines in its reasonable discretion that such loan-to-value ratio exceeds
fifty percent (50%), Borrower shall immediately grant a first priority line on
additional real estate collateral to Bank or prepay the loan to lower the ratio
to fifty percent (50%).
5.5 Borrower will not liquidate or dissolve or enter into any
consolidation, merger, pool, joint venture, syndicate or other combination, or
sell,
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lease or dispose of Borrower's business assets as a whole or such as in the
opinion of Bank constitutes a substantial portion of Borrower's business or
assets;
5.7 Borrower will not engage in any business activities or
operations substantially different from or unrelated to present business
activities or operations; and
5.8 Borrower, and Borrower's tenants, contractors, agents or
other parties authorized to use any of Borrower's properties, will not use,
generate, manufacture, store, treat, dispose of, or release any hazardous
substance or hazardous waste in, on, under or about any of Borrower's
properties, except as previously disclosed to Bank in writing as provided in
section 3.8; and any such activity shall be conducted in compliance with all
applicable federal, state and local laws, regulations and ordinances, including
without limitation those described in section 3.8;
6. WAIVER, RELEASE AND INDEMNIFICATION. Borrower hereby (a) releases
and waives any claims against Bank for indemnity or contribution in the event
Borrower becomes liable for cleanup or other costs under any of the applicable
federal, state or local laws, regulations or ordinances, including without
limitation those described in section 3.8, and (b) agrees to indemnify and hold
Bank harmless from and against any and all claims, losses, liabilities, damages,
penalties and expenses which Bank may directly or indirectly sustain or suffer
resulting from a breach of (i) any of Borrower's representations and warranties
with respect to hazardous wastes and hazardous substances contained in section
3.8, or (ii) section 5.7. The provisions of this section 6 shall survive the
full and final payment of all sums outstanding under this Agreement and the Note
and shall not be affected by Bank's acquisition of any interest in any of the
Borrower's properties, whether by foreclosure or otherwise.
7. EVENTS OF DEFAULT. The occurrence of any of the following events
("Events of Default") shall terminate any and all obligations on the part of
Bank to make any additional advances under the loan and, at the option of Bank,
shall make all sums of Interest and principal outstanding under the loan
Immediately due and payable, without notice of default, presentment or demand
for payment, protest or notice of nonpayment or dishonor, or other notices or
demands of any kind or character, all of which are waived by Borrower, and Bank
may proceed with collection of such obligations and enforcement and realization
upon all security which it may hold and to the enforcement of all rights
hereunder or at law:
7.1 The Borrower shall fail to pay when due any amount payable by
it hereunder;
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7.2 Borrower shall fail to comply with the provisions of any
other covenant, obligation or term of this Agreement for a period of fifteen
(15) days after the earlier of written notice thereof shall have been given to
the Borrower by Bank, or Borrower has knowledge of an Event of Default or an
event that can become an Event of Default or Borrower breaks any promise
Borrower has made to Bank, or Borrower fails to perform promptly at the time and
strictly in the manner provided in any other agreement or loan Borrower has with
Bank;
7.3 Borrower shall fail to pay when due any other obligation for
borrowed money, or to perform any term or covenant on its part to be performed
under any agreement relating to such obligation or any such other debt shall be
declared to be due and payable and such failure shall continue after the
applicable grace period;
7.4 Any representation or warranty made by Borrower in this
Agreement or in any other statement to Bank shall prove to have been false or
misleading in any material respect when made;
7.5 Borrower makes an assignment for the benefit of creditors,
files a petition in bankruptcy, is adjudicated insolvent or bankrupt, petitions
to any court for a receiver or trustee for Borrower or any substantial part of
its property, commences any proceeding relating to the arrangement,
readjustment, reorganization or liquidation under any bankruptcy or similar
laws, or if there is commenced against Borrower any such proceedings which
remain undismissed for a period of thirty (30) days, or if Borrower by any act
indicates its consent or acquiescence in any such proceeding or the appointment
of any such trustee or receiver;
7.6 Any judgment attaches against Borrower or any of its
properties for an amount in excess of $50,000 which remains unpaid, unstayed on
appeal, unbonded or undismissed for a period of thirty (30) days;
7.7 Loss of any required government approvals, and/or any
governmental regulatory authority takes or institutes action which, in the
opinion of Bank, will adversely affect Borrower's condition, operations or
ability to repay the loan;
7.8 Failure of Bank to have a legal, valid and binding first lien
on, or a valid and enforceable prior perfected security interest in, any
property covered by any deed of trust or security agreement required under this
Agreement;
7.9 Borrower ceases to exist as a going concern;
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7.10 Occurrence of an extraordinary situation which gives Bank
reasonable grounds to believe that Borrower may not, or will be unable to,
perform its obligations under this or any other agreement between Bank and
Borrower; or
7.11 Any of the preceding events occur with respect to Borrower of
credit under this Agreement or any of Borrower's partners, or such partner dies
or becomes incompetent.
7.12 Any of the preceding events occur with respect to Shurgard
Storage Centers, Inc. ("SSCI") or SSCI discontinues of property management
services on behalf of Borrower.
8. ARBITRATION.
8.1 At the request of either Bank or Borrower any controversy or
claim between the Bank and Borrower arising from or relating to this Agreement
or any Loan Document executed in connection with this Agreement or arising from
any alleged tort shall be settled by arbitration in King County, Washington.
The United States Arbitration Act will apply to the arbitration proceedings
which will be administered by the American Arbitration Association under its
commercial rules of arbitration except that unless the amount of the claim(s)
being arbitrated exceeds $5,000,000.00, there shall be only one arbitrator. Any
controversy over whether an issue is arbitrable shall be determined by the
arbitrator(s). Judgment upon the arbitration award may be entered in any court
having jurisdiction. The institution and maintenance of any action for judicial
relief or pursuit of a provisional or ancillary remedy shall not constitute a
waiver of the right of either party, including plaintiff, to submit the
controversy or claim to arbitration if such action for judicial relief is
contested.
For purposes of the application of the statute of limitations, the filing
of an arbitration as provided herein is the equivalent of filing a lawsuit and
the arbitrator(s) will have the authority to decide whether any claim or
controversy is barred by the statute of limitations, and if so, to dismiss the
arbitration on that basis. The parties consent to the joinder in the
arbitration proceedings of any guarantor, hypothecator or other party having an
interest related to the claim or controversy being arbitrated.
8.2 Notwithstanding the provisions of Section 8.1, no controversy
or claim shall be submitted to arbitration without the consent of all parties if
at the time of the proposed submission such controversy or claim arises from or
relates to an obligation secured by real property;
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8.3 No provision of this Section 8 shall limit the right of the
Borrower or the Bank to exercise self-help remedies such as setoff, foreclosure,
or sale of any collateral, or obtaining any ancillary provisional or interim
remedies from a court of competent jurisdiction before, after or during the
pendency of any arbitration proceeding. The exercise of any such remedy does
not waive the right of either party to request arbitration. At Bank's option
foreclosure under any deed of trust may be accomplished by exercise of the power
of sale under the deed of trust or judicial foreclosure as a mortgage.
10. SUCCESSORS; WAIVERS. Notwithstanding the Events of Default above,
this Agreement shall be binding upon and inure to the benefit of Borrower and
Bank, their respective successors and assigns, except that Borrower may not
assign its rights hereunder. No consent or waiver under this Agreement shall be
effective unless in writing and signed by the Bank and shall not waive or affect
any other default, whether prior or subsequent thereto, and whether of the same
or different type. No delay or omission on the part of the Bank in exercising
any right shall operate as a waiver of such right or any other right.
11. COLLECTION ACTIVITIES, LAWSUITS AND GOVERNING LAW. Borrower agrees
to pay Bank all costs and expenses (including reasonable attorneys' fees and the
allocated cost for in-house legal services incurred by Bank) to enforce this
Agreement or any notes or loan documents entered into pursuant to this
Agreement, whether or not suit is instituted. If suit is instituted by Bank to
enforce this Agreement or any of these documents, Borrower consents to the
personal jurisdiction of the courts of the State of Washington and Federal
Courts located in the State of Washington. Borrower further consents to the
venue of this suit being laid in King County, Washington. This Agreement and
any notes and security agreements entered Into pursuant to this Agreement shall
be construed in accordance with the laws of the State of Washington.
12. ADDITIONAL PROVISIONS. Borrower agrees to the following additional
provisions: This Agreement supersedes all oral negotiation or agreements
between Bank and Borrower with respect to the subject matter hereof.
12.1 If any provision of this Agreement is held to be invalid or
unenforceable, then (a) such provision shall be deemed modified if possible, or
if not possible, such provision shall be deemed stricken, and (b) all other
provisions shall remain in full force and effect.
12.2 If the imposition of or any change in any law, rule, or
regulation guideline or the interpretation or application of any thereof by any
court of administrative or governmental authority (including any request or
policy whether or not having the force of law) shall impose or modify any taxes
(except U.S. federal,
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state or local income or franchise taxes imposed on Bank), reserve requirements,
capital adequacy requirements or other obligations which would: (a) increase
the cost to Bank for extending or maintaining the loans to which this Agreement
relates, (b) reduce the amounts payable to Bank under this Agreement, such notes
and other instruments; or (c) reduce the rate of return on Bank's capital as a
consequence of Bank's obligations with respect to the loan which this Agreement
relates, then Borrower agrees to pay Bank such additional amounts as will
compensate Bank therefor, within five (5) days after Bank's written demand for
such payment, which demand shall be accompanied by an explanation of such
imposition or charge and a calculation in reasonable detail of the additional
amounts payable by Borrower, which explanation and calculations shall be
conclusive, absent manifest error.
12.3 Bank may sell participation in or assign this loan in whole
or in part without notice to Borrower and Bank may provide information regarding
the Borrower and this Agreement to any prospective participant or assignee. If
a participation is sold or the loan is assigned the purchaser will have the
right of setoff against the Borrower and may enforce its interest in the Loan
irrespective of any claims or defenses the Borrower may have against the Bank.
13. NOTICES. Any notices shall be given in writing to the opposite
party's signature below or as that party may otherwise specify in writing.
14. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT,
OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
THIS BUSINESS LOAN AGREEMENT (Parts A and B) executed by the parties on
March 28, 1994.
BANK:
SEATTLE-FIRST NATIONAL BANK
(Branch or Office)
By
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Title:
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BORROWER:
IDS/SHURGARD INCOME GROWTH
PARTNERS L.P. III, a
Washington limited partnership
By Shurgard Associates L,P. III,
a Washington limited partnership,
its sole general partner
By XXXXXXX X. XXXXX
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Its:
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-15-