HomeMy WebLinkAboutDocs re Humane Society of Redmond LoanDeschutes County Board of Commissioner;
1300 NW Wall St., Suite 200, Bend, OR 97701-1960
(541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org
AGENDA REQUEST & STAFF REPORT
For Board Business Meeting of December 10, 2008
DATE: December 3, 2008
FROM: Dave Kanner
Administration 388-6565
TITLE OF AGENDA ITEM:
Consideration and authorizing county administrator's signature of Document Nos. 2008-635,
Rehabilitation Loan Agreement, 2008-636, Lease, 2008-637, Statutory Bargain and Sale Deed,
2008-638, Teater Trust Agreement, 2008-639, Memorandum of Agreement (corresponds with
2008-635), 2008-640, Memorandum of Lease (corresponds with 2008-636), and 2008-641,
Optional Advance Note, and any other documents relating to loan agreements and title transfers
with the Humane Society of Redmond, Bank of the Cascades, Columbia River Bank, Community
First Bank and the Teater Trust.
PUBLIC HEARING ON THIS DATE? No.
BACKGROUND AND POLICY IMPLICATIONS:
Deschutes County has been working with the Humane Society of Redmond (RHS) since last June,
when the Society announced that it was out of cash and would be ceasing its operations. The County
shortly thereafter provided the RHS a loan in the amount of $41,631.63 for the purpose of covering debt
service payments to Bank of the Cascades, Community First Bank and Columbia River Bank through
October of this year. The intent of the loan was to reduce RHS' monthly expenses and buy time for the
RHS Board to restructure the organization and develop revised fundraising and business plans. During
this time, the RHS reduced its staff from 17 to six FTE and scaled back some business operations,
particularly those related to the events center and dog grooming facility on the RHS property. The
County, meanwhile, began negotiating with the banks on a plan to pay off the RHS loans and take first
position on the long-term, secured RHS debt. The County also began contacting unsecured credit yrs
with offers to pay off aged accounts payables on behalf of RHS, thus allowing RHS a fresh start it
terms of its financial situation.
In November, County staff reached agreement in principle with the banks, the Teater Trust and RI ES on
the terms of this debt elimination package. The basic elements of this agreement are as follows:
• The County will place $1 million in escrow, which the banks will by mutual agreement diN ide
among themselves to satisfy the outstanding bank loans.
• The banks will assign all liens and trust deeds relating to those loans to the County.
• The RHS will transfer title to its property at 1355 NE Hemlock in Redmond to the County The
County will then lease the property back to RHS for $1 per year.
• The RHS will provide to the County a promissory note in an amount equal to the total am( unt
provided by the County to retire all secured and unsecured debts on behalf of RHS.
• The Teater Trust will enter into an agreement with the County under which it will assign
proceeds from sales of capital assets to Deschutes County up to an amount necessary to satisfy
RHS debts to the County.
• The County and RHS will enter into an agreement (the Optional Advance Note) under which the
County agrees to loan up to $100,000 to RHS to cover the Society's structural operating deficit
until such time as RHS becomes self-sustaining through its fundraising operations.
Key to these agreements is the fact that the County will own the RHS property and will be assured
future payment from the Teater Trust sale of capital assets. Under the Rehabilitation Loan Agreement
(Document No. 2008-635), the County has the right to partition the RHS property and sell off the 2.2
acre piece on which the event center currently sits. A recently obtained broker's price opinion places
the value of that piece at between $875,000 and $935,000. If the RHS is able to satisfy all of its debts
within the term of this agreement, however, the County agrees to transfer title to the property back to
RHS, but with a reversionary interest. Between the ability to sell property and the assurance from tie
Teater Trust, this is a relatively secure loan. The Rehabilitation Loan Agreement also requires RHS to
report monthly to the County on its financial condition and fundraising activities in sufficient detail for
the County to determine whether RHS is solvent and making progress toward self-sufficiency. If R HS
reports a monthly operating deficit greater that $8,333.00 in any three consecutive months, the Cou ity
has the right to terminate the loan and lease agreements and either operate the shelter itself or contract
with another agency to operate the shelter.
FISCAL IMPLICATIONS:
The Finance Department will, through a supplemental budget process, establish a new fund related to
all loans to the Redmond Humane Society. Funds will be transferred from the Department of Solid
Waste Environmental Remediation Fund into this new fund, allowing us to track all revenues and
expenditures related to RHS in a stand-alone fund. Revenues into this new fund will be transferred
back to Solid Waste, with interest, until the internal transfer is fully repaid. The total cost of these
agreements is estimated at $1.3 million, although the exact cost cannot be determined until agreements
are reached on settlements with all unsecured creditors and the Optional Advance Agreement is
executed.
RECOMMENDATION & ACTION REQUESTED:
Staff recommends authorizing county administrator's signature of Document Nos. 2008-635,
Rehabilitation Loan Agreement, 2008-636, Lease, 2008-637, Statutory Bargain and Sale Deed, 2008-
638, Teater Trust Agreement, 2008-639, Memorandum of Agreement (corresponds with 2008-635),
2008-640, Memorandum of Lease (corresponds with 2008-636), and 2008-641, Optional Advance
Note, and any other documents relating to loan agreements and title transfers with the Humane Society
of Redmond, Bank of the Cascades, Columbia River Bank, Community First Bank and the Teater Trust.
ATTENDANCE: Dave Kanner, Mark Pilliod
DISTRIBUTION OF DOCUMENTS:
Administration, Central File
Redmond Humane Society
P.O. Box 1404
Redmond, OR 97756
Document No. 2008-638:
Dennis Karnopp, Karnopp Peterson
1201 NW Wall St., Ste. 300
Bend, OR 97701
REVIEWED
LEGAL COUNSEL
REHABILITATION LOAN AGREEMENT
This Rehabilitation Loan Agreement("Agreement") is made and entered into effective as
of the day of December, 2008.
PARTIES
The parties to this Agreement are: Deschutes County, a political subdivision of the state of
Oregon ("County"); and Humane Society of Redmond, a non-profit Oregon corporation ("HSR").
RECITALS
A. HSR is the owner, in fee, occupant and operator, of the land and improvements known
and referred to as the Humane Society of Redmond Shelter and Event Center located on the
premises commonly described as 1355 NW Hemlock Avenue, Redmond, OR 97756 (the
"Redmond Facilities"). A full legal description of the land comprising the Redmond Facilities is
contained in Appendix A to this Agreement.
B. HSR acquired the, formerly unimproved, land where the Redmond Facilities are located,
at virtually no capital cost to HSR, by means of a series of transactions and conveyances in
which County was involved, for the purposes of, among other things, "* * * maintaining an
animal shelter that receives and holds animals from and on behalf of the (County) * * *." HSR
also acquired the land where the Redmond Facilities are located subject to County's right to
enter and vest itself with title to the property in the event that it is no longer used for purposes
quoted above, in which event "* * * all rights of the Grantee (i.e. HSR), its successors and
assigns, (in the property) shall terminate."
C. In addition to the structures, facilities and other improvements now comprising that
portion of the Redmond Facilities actively employed and committed to use for the purposes
described in Recital B, the Redmond Facilities include additional structures, facilities,
improvements, and a significant amount of essentially unimproved land, that are now, or may, in
the future, be used and/or developed for purposes of generating income and/or other revenues
to fund HSR's continuing operations and/or repayment of the County loans subject of this
Agreement.
D. HSR is an equal co -beneficiary, with the Humane Society of Central Oregon ("HSCO"),
under the now irrevocable trust estate of the Arthur S. Teater and Alice P. Teater Trust (aka
"Arlis Trust," "Alice P. Teater Trust, or, simply, "Teater Trust") arising under a certain Trust
Agreement made April 12, 1982, as amended by an Amendment to Trust Agreement dated May
12, 1989, a Second Amendment to Trust Agreement dated November 30, 1989, and a Third
Amendment to Trust Agreement dated July 17, 1990 (the "Trust"). 1
E. One of the two principal assets of the Trust is a parcel of improved real estate commonly
known as the "Green Pastures" mobile or manufactured home park located at 2633 SW
Obsidian Avenue, Redmond, OR 97556 ("Green Pastures"). Green Pastures has been, and
now is, actively used as the site of some 51 manufactured home spaces or pads; paved streets,
1
Under the terms of the Trust, the Trustee, currently Dennis C. Karnopp, Esq., makes equal periodic distributions of
principle and interest to each of the Co -Beneficiaries, provided "that such organization must be actively engaged in
providing care and services to animals in order to receive the benefit provided under this Trust."
Rehabilitation Loan Agreement Page 1 of 21
concrete curbing and all necessary hook-ups, an RV storage area, other common areas and
amenities, and a 2,036 square foot residence. Green Pastures presently generates
approximately $14,300, per month in gross rental revenue.
F. The second principal asset of the Trust is a parcel of unimproved, vacant land
immediately adjacent to, and contiguous with, the easterly and northerly boundaries of Greer
Pastures; bounded on the south by SW Obsidian Avenue; the east by SW 23rd Street, and or
the north, by SW Metolius Avenue ("Obsidian"). Green Pastures and Obsidian are both zonec
R-4 (General Residential) by the City of Redmond.
G. In addition to Green Pastures and Obsidian, the Trust assets currently consist of fund'
held by Trustee in depository accounts with Wells Fargo Bank and Bank of the Cascades, an(:
miscellaneous books and records pertaining to properties and administration of the Trust.
H. The Trust requires that the Trustee shall distribute to the co-beneficiaries one fourth o'
the principal balance of the trust estate of the fifth anniversary of the death of the surviving
Grantor, i.e. Alice P. Teater. The fifth anniversary of Ms. Teater's death occurred during the
month of May, 2008.
1. Prior to May, 2008, the Trustee advanced the aggregate sum of $100,000.00 to each 01
the co-beneficiaries on account of their respective equal shares of the principal distributions that
would otherwise be due in May of 2008.
J. For purposes of determining the fair market values of Green Acres and Obsidian, at the
expense of the Trust, the Trustee obtained Summary Appraisal Reports from the Bratton
Appraisal Group LLC, effective as of July 11, 2007. Based on certain assumptions regarding
adjustment of a portion of the boundary between Green Pastures and Obsidian, according tc
these reports:
1. the "Hypothetical Current Market Value" of Green Pastures was fixed at $2,603,000 it
the property was offered for sale for purposes of new residential development, or $1,655,000, it
the property remained in use as a manufactured home park, and
2. the "Current Market Value" of Obsidian was fixed at $2,647,500.
K. Thus, based on these appraised values (and assuming no change of use of Green
Pastures) and certain assumptions regarding the value of the other assets held by Trustee in
the Trust, on January 16, 2008, the Trustee advised counsel for HSR that he anticipated the
amount or value of each co-beneficiary's principal distribution due in May 2008, would be
approximately $338,922.00 net of the above-mentioned $100,000 previously advanced to each
co-beneficiary.
L. And, at the same time, the Trustee further advised counsel for HSR that, unless either
Green Pastures or Obsidian were sold prior to the time that the principal distributions above-
mentioned were to be made, "'k * * the trust may need to distribute interests in real property in
lieu of cash."
M. As of May 31, 2008, neither Green Pastures nor Obsidian had been sold, nor have either
of those assets been sold or liquidated, in whole or in part, since that date. Accordingly, the
Trustee has not made further distributions to either co-beneficiary on account of their respective
shares of the principal balance of the Trust that were otherwise to be distributed to them in May
2008, by reason of the fact that the Trust principal did not then, nor does it now, consist of funds
or other readily liquid assets sufficient in amount or value to effect such distributions in the form
or cash or cash equivalents.
N. On or about September 17, 2008, the Trustee received a bona fide offer to purchase
Green Pastures (subject to reconfiguration of its common boundary with Obsidian and a number
Rehabilitation Loan Agreement Page 2 of 21
of other conditions and contingencies), for $1,000,000 in cash. It was, in the course of good
faith negotiations with the proposed purchaser of the property (i.e. Green Pastures Senior
Cooperative, an Oregon cooperative association comprised of current Green Pastures tenants).
determined that the maximum amount the proposed purchaser would be able to pay for the
property was $1,200,000 (subject to a number of conditions and contingencies).
O. Neither co -beneficiary was prepared to authorize the Trustee to accept the amounts
offered for Green Pastures described immediately above on the terms proposed by the
prospective purchaser, or otherwise, and the Trustee rejected said offer. Previous offers for the
purchase of Obsidian were also rejected, or allowed to lapse, by Trustee and, at this time, it is
doubtful that the fair market value of Obsidian, assuming it could be sold at all under current
market conditions, would exceed half of the $2,647,500 "Current Market Value" attributed to that
property by the above-mentioned appraisal.
P. Beginning in August of 2004, and in anticipation of its receipt of distributions from the
Trust, HSR began incurring a series of obligations in favor of Bank of the Cascades, Columbia
River Bank, Community First Bank, and Sunwest Builders. These obligations eventually totaled
in the aggregate, approximately $1,447,000. These obligations were incurred to provide (01
replenish) funds expended by HSR for purposes of constructing and furnishing the buildings and
related improvements that are now part of the Redmond Facilities. In addition to the obligations
described immediately above, HSR incurred an obligation to the City of Redmond for $26,460 in
Systems Development Charges arising as a result of undertaking development and
improvement of the Redmond Facilities.
Q. The obligations incurred by HSR in favor of Bank of the Cascades, Columbia River
Bank, and Community First Bank (collectively, "Bank Loans"), were and are secured by trust
deeds that now encumber the Redmond Facilities. The obligation incurred in favor of the City of
Redmond described above (the"SDC Debt") is also secured by a lien on the Redmond Facilities
and is payable in semi-annual installments, including interest. The obligation that HSR incurred
in favor of Sunwest Builders described above is not secured.
R. As of September 10, 2008, the amounts required to fully pay and satisfy the several
Bank Loans were approximately as follows:
Bank of the Cascades $ 603,200
Columbia River Bank 653,700
Community First Bank 130,700
Approximate Total $ 1,387,600
S. As of November 10, 2008, the amount required to satisfy the SDC Debt was
approximately $14,183 without regard to interest.2
T. As of November 10, 2008, the unpaid balance owing Sunwest Builders, including interest
and late idharges!ITs1t, was $47,937.
U. As of June 30, 2008, HSR had expended at least $485,000 more than it actually
received in operating revenues, its shares of the annual net income of and distributed by the
Trust, its membership dues, and as a result of its fundraising efforts. These over -expenditures
are the result of the cumulative effects of a series of serious misconceptions, deficient financial
management practices and controls, misinformation, errors in judgment, and unfulfilled!
expectations, that have occurred before, during, and after, the time HSR began incurring the
2 An $1,885 installment payment of principal and interest due on account of this obligation on June 15, 2008, has not
been paid and is included in this total without regard to interest.
Rehabilitation Loan Agreement Page 3 of 21
obligations, and constructing the improvements that now comprise the Redmond Facilities
mentioned above.
V. As of November 15, 2008, and without regard to Sunwest Builders and the SDC Deb
HSR's unsecured accounts payable for goods and services totaled approximately $151,000
Many of these obligations were incurred in favor of suppliers and service providers essential tc
the past and future operations of HSR and are seriously in arrears, and a substantial portion o"
the total consists of legal fees and expenses incurred by HSR in connection with the definition
development and documentation, of the transactions subject of this Agreement.'
W. In order to pay its ongoing obligations and continue operations, commencing in 2007
HSR requested, and received, from the Trust, advances against its share of the mandatory
principal distribution due HSCO and HSR in May 2008, totaling $100,000, in addition to its share
of the net income from the Trust (as determined by Trustee), for the calendar years 2006 and
2007. HSCO received like distributions from the Trust. However, due to lack of liquidity of the
Trust's principal assets (i.e. Green Pastures and Obsidian), Trustee was, and remains, unable
to distribute to HSCO and to HSR their respective shares of the remainder of Trust principal that
were due for distribution in May 2008.4
X. Although, HSR has made and implemented many changes in its operating procedures..
policies, and management, since the end of June, 2008, it has been, and remains, apparent
that HSR has not had, and does not have, the means to pay the Bank Loans, the SDC Debt, its,
obligation to Sunwest Builders, and anything near all of its accounts payable, and, at the same
time, continue operation of the Redmond Facilities and provide the basic services necessary to
fulfill its responsibilities to County, the City of Redmond and the community generally.
Y. Therefore, and in order to assist HSR to pay its ongoing obligations and operating
expenses, and to prevent or forestall actions on the part of its creditors that would likely result in
cessation of its operations, commencing in late June, 2008, HSR requested, and obtained, (1) a
$30,000 distribution from the Trust on account of its share of net income of the Trust for
calendar year 2008,5 (2) an 18 -month loan, in the principal amount of $41,631.63, from County
("CL -A"),6 and second 18 -month term loan, in the principal amount of $15,000, from the County
("C L -B").
Z. In addition, on or about June 30, 2008, the Trustee of the Trust established a $100,000
3
The final total of these legal fees and expenses will not be known until the transactions are consummated.
4 According to a letter dated January 16, 2008, directed to Lisa DT Klemp, and its enclosure entitled Alice P. Teater
Trust Asset Summary, it was anticipated that a total of $877,844.07, Tess the $200,000 previously advanced, or
$677,804.07 ($338.922 each), could be distributed to HSCO and to HSR in May 2008. However, such a distribution
was based on the values placed on the properties by appraisals dated July 11, 2007, assuming that Trustee decided
to place Obsidian on the market for sale and sold it "* * * as the beneficiaries have requested * * *." Trustee also
advised that he would "* * * continue to work with both beneficiaries in evaluating the potential sale of the park (Green
Pastures) to a non-profit agency that would continue to operate the park so long as the sale terms are agreeable to
both beneficiaries."
s An equal distribution was made to HSCO on or about August 21, 2008.
6 With the understanding that $5,000 would be used for purposes of paying for a review of financial operations of
the HSR by Jones & Roth, PC. This review was completed at a cost of $3,700, and Jones & Roth have credited the
remaining $1,300 toward the costs of preparation of HSR's Federal Form 990 and related financial reports required to
maintain HSR's status as a 501(3)(c) non-profit organization. The remaining proceeds of this loan have been used,
or set aside, to cover installment payments due Bank of the Cascades and Community First Bank, that might not
otherwise be paid if necessary.
Rehabilitation Loan Agreement Page 4 of 21
line of credit with Columbia River Bank, secured by a Line of Credit Instrument (deed of trust)
encumbering the Obsidian Property and what may constitute a portion of Green Pastures that is
presently included as a part of Tax Lot 2901 on Assessor's Map 15 13 17. On or about July 2
2008, $34,369.85 was advanced against this line of credit on account of interest payments due.
payable and unpaid by HSR to Columbia River Bank. On and after July 2, 2008, additional
advances have been made on account of an additional interest payments due and payable by
HSR to Columbia River Bank and on account of other interest, loan fees and charges payable
by the Trust arising under this accommodation. As of the date of this Agreement, the total
outstanding principal balance owing on this line of credit is a pproximatelyirs2;
AA. The County is willing to provide funding, in the form of a loan or loans to HSR, for
purposes of relieving HSR of certain obligations and thereby assist it in its efforts to continue its
operations, and allowing its facilities and equipment, to be used, to provide care and services ft;
animals as contemplated by the Trust and other ancillary services and accommodations for the
benefit of the County, the City of Redmond, and the citizens of Deschutes County generally. As
of the date of this Agreement, the parties acknowledge that HSR has continuously engaged in
providing care and services to animals within the meaning of the of the Trust.
BB. County's willingness to provide the loan or loans mentioned immediately above is
conditioned upon its ability to obtain and maintain adequate security for repayment of such loan
or loans in the form of outright ownership in fee of the Redmond Facilities (subject to re-
conveyance in whole or in part as elsewhere described in this Agreement); good and sufficient
contractual arrangements with the Trust that require delivery of any and all future distributions of
principal (including any proceeds of any sale or liquidation of Green Pastures and/or Obsidian)
that would otherwise be distributed to HSR to the County for application to HSR's indebtedness
to County, together with HSR's interest in the Estate of Essie Bernice Shultz, Deceased.7[m3j
CC. County has made an agreement with Bank of the Cascades, Columbia River Bank, and
Community First Bank, whereby, upon delivery by the County into escrow of the aggregate sum
of $1,000,000, each of those banks will deliver into escrow, with instructions to deliver to the
County, or to record as appropriate, all of the documents and instruments evidencing all of
HSR's obligations to all three of said banks together will such instruments as may be reasonably
necessary or convenient for purposes of discharging the Redmond Facilities, and all and any
other property or properties, real or personal, or both, belonging to HSR, from encumbrance by
any form of lien or other security interest given to, or obtained or claimed by,. each of said
banks, and their respective successors and assigns (if any), by way of collateral or security of
any kind or nature for repayment of the Bank Loans or any portion thereof.
DD. Finally, the fundamental intent and purpose of this Agreement, as well as the
transactions that it describes, is to ensure that, under management and guidance by a
competent and fiscally responsible Board of Directors, and with the aid to be provided by the
loans of public funds and other accommodations to be afforded under this Agreement, HSR will
reach a point where it will be able, with the voluntary financial support of its membership and the
community generally, to:
1. provide the services, facilities and accommodations the County is required to provide
itself, or by contracting with third parties such as HSR, according to the provisions of Chapter
609, Oregon Revised Statutes, and Title 6 of the Deschutes County Code, and
2. accomplish its corporate purposes, i.e. to provide shelter and care for unwanted or
Currently the subject of a formal probate proceeding pending in the Circuit Court for Deschutes County.
Rehabilitation Loan Agreement Page 5 of 21
abandoned animals; to provide adoption or placement of animals in quality homes, and to
providel[m4] education in areas of spey/newter, veterinary care, food and shelter for the humane
treatment of all animals,
all to the extent, and only to the extent, that the financial means and resources that it car
generate from its operations and membership fees, the results of continuous and effective
fundraising efforts and programs, gifts and donations, endowments and bequests, the efforts o;
its Board, staff, members and volunteers, and its share of income (and any eventual principal
distributions from the Trust, can and will ultimately provide the financial means and "people
power" necessary to do so without additional financial assistance by the County and withou
repetition of, or resort to, any of the practices that resulted in the recurring grave financial crises
that ultimately necessitated the County's intervention and involvement in HSR's financial affair:
and management in the manner described in this Agreement.
THEREFORE, and in consideration of the facts and circumstances set forth in the
foregoing Recitals, each and all of which shall be deemed elements of the agreements of the,
above-named parties embodied in, and contemplated by, this Agreement, and other good anc
valuable consideration, the receipt and sufficiency of which is acknowledged, the parties dc
hereby and further agree as follows:
AGREEMENTS
1. Basic Transaction Elements. This Agreement involves three (3) separate, bu
interrelated, financial accommodations that will be provided by the County to, or for the benefit
of, HSR. They are:
1.1 Bank Loan Buyout. County will consummate its agreements with Bank of the
Cascades, Columbia River Bank, and Community First Bank, that is generally described it
Recital CC of this Agreement and HSR has, concurrently with execution of this Agreement or
behalf of HSR, and delivered to the Escrow Agent named below, its promissory note in the
principal amount of $1,000,000, to be repaid to County, with interest, at the times, in the
manner, from the sources and resources, and subject to the conditions, stated on its face anc
otherwise described in this Agreement.8
(a) The form of the promissory note described in this subsection 1.1, is set forth as
Appendix B to this Agreement.
(b) For purposes of this Agreement, this accommodation will be referred to as the
"Bank Loan Buyout" or "BLB."
1.2 Accounts Payable Advances. HSR has previously delivered to County one or more
schedules of accounts payable to several named creditors of HSR, other than the banks named
immediately above, accompanied by copies of the most recent statements, invoices, bills o
other paperwork, that was available to HSR for purposes of determining the total obligations o'
HSR owed to each creditor listed in the schedules. HSR's obligations to the City of Redmond
and to Sunwest Builders addressed in the Recitals are included in these schedules.
(a) County has initiated, and has concluded, or will conclude, negotiations with
each of the creditors identified in the above-mentioned schedules (or, if any such accounts have
been assigned for collection, with the assignees thereof) that has resulted, or will result, in ar
agreement between the County and each of those several creditors, respectively, that the
S
If County acquires, by assignment or otherwise, any claims a bank may have arising under any lender's titl«
policy issued in favor of such bank with respect to the Redmond Facilities, any net recovery realized by Count
will be applied to payment of HSR's outstanding indebtedness to County arising under this Agreement. .
Rehabilitation Loan Agreement Page 6 of 2
County will pay, directly to the creditor, an amount that County has determined, or will
determine, in the exercise of its sole judgment and discretion, County is prepared to pay, and
each such creditor has agreed to accept, on account of HSR's outstanding and unpaid
obligations in favor of such creditor in exchange for each such creditor's firm and irrevocable
commitment to fully and unconditionally release and satisfy such creditor's outstanding and
unpaid claims against HSR (to the extent HSR has not undertaken to do so itself).9
(b) When the total amount the County has engaged to pay HSR's creditors as
described immediately above has been determined, HSR will sign and deliver to the County, its
promissory note, in a principal amount equal to that total, to be repaid to County, with interest, a;
the times, in the manner, out of the sources and resources, and subject to the conditions, stated
on its face and otherwise described in this Agreement.10
(c) The form of the promissory note described in this subsection 1.2, is set forth as
Appendix C to this Agreement.
(d) For purposes of this Agreement, this accommodation will be referred to as the
"Accounts Payable Advances" or "APA."
1.3 Working Capital Loans. In addition to the promissory notes previously made ant
delivered to the County evidencing HSR's obligations to repay the two 18 -month term loam
described in Recital Y (i.e. CL -A and CL -B), HSR has, concurrently with execution of this
Agreement on behalf of HSR, made and delivered to the County, its Optional Advance Note it
the principal amount of $100,000.00, to be repaid to the County, with interest, at the time, in the,
manner, out of the sources and resources, and subject to the conditions, stated on its face and
otherwise described in this Agreement.
(a) A copy of the promissory note evidencing the loan referred to as CL -A above is
set forth as Appendix D to this Agreement.
(b) A copy of the promissory note evidencing the loan referred to as CL -B above is
set forth as Appendix E to this Agreement.
(c) The form of Optional Advance Note described in this subsection 1.3, is set forth
as Appendix F to this Agreement.
(d) For purposes of this Agreement, the accommodations described in this
subsection 1.3 will be collectively referred to as the "Working Capital Loans" or "WCL."
2. Sources of Repayment.
2.1 The indebtedness of HSR evidenced by the several promissory notes given to
County pursuant to this Agreement (with the exception of the notes set forth in Appendix D and
Appendix E) shall be payable on demand, and if no demand is made, then, on December 1
2015.
9
10
The schedules mentioned in this paragraph indicate that HSR has undertaken to pay certain creditors somE:
portion of HSR's total obligations in favor of those creditors out of HSR's current operating revenues. County i:;
not expected, nor does it agree, to advance these amounts, or any portion thereof, directly to those creditors.
County will initiate, and, if possible, conclude negotiations with the City of Redmond, to either forgive, or, f
necessary, compromise, the SDC Debt. If forgiveness is not possible, County will obtain a firm and irrevocabb
agreement on the part of the City of Redmond to accept a sum certain in exchange for assignment to County c
the lien described in Recitals P and Q, so that County will end up holding title to the Redmond Facilities free ani I
clear of that lien.
Rehabilitation Loan Agreement Page 7 of 2'
2.2 The indebtedness of HSR evidenced by the notes set forth in Appendix D and
Appendix E, respectively, shall be payable according to their terms, except as otherwise
expressly stated in this Agreement.
2.3 Pending full payment and satisfaction of all indebtedness evidenced by the notes
described in subsections 2.1 and 2.2 above, payments on account of that indebtedness shall be
effected at the following times and in the following manner:
(a) Distributions of Trust Principal. County shall be entitled to direct payment and
disbursement, or direct conveyance or other transfer, from the Trust, of all distributions of trust
principal, whether in cash or in kind, that are now, or at anytime in the future, otherwise
distributable to HSR according to the trust instruments described in Recital D of this Agreement.
(1) County acknowledges and agrees that it is fully aware and informed
regarding the provisions of said trust instruments and that its right to receive principal
distributions from the Trust are co -extensive with the rights of HSR as a co -beneficiary
thereunder.
(2) County, HSR and the Trustee of the Trust have entered, or will
concurrently with execution of this Agreement on behalf of the parties hereto, enter into an
agreement, satisfactory in form and substance to counsel for the parties and the Trustee,
whereby, for as Tong as any indebtedness subject of this Agreement remains outstanding and
unpaid, the Trust will be bound to deliver any and all trust funds or other assets, that would
otherwise be delivered or delivered to HSR by way of principal distributions, to the County, and
not to HSR.11
(3) Provided, however, unless HSR shall then, in fact, be in default under this
Agreement, nothing contained in this Agreement, or in any other agreement or instrument
related to or arising out of the transactions subject of this Agreement, may be deemed or
construed to vest in the County any right or option to receive or recover any distributions of
income (as distinguished from principal) otherwise distributable, or distributed, to HSR. Any
such income distributions are to be used solely for the purpose of funding operations of HSR
Imslas described in Recital DD of this Agreement.
(b) Schultz Estate Distributions. On, and/or prior to, closing and final distribution of
the probate estate of Essie B. Schultz,12 HSR will be entitled to receive a distribution or
distributions in the form of cash and/or interests in property of unknown value at this time. Prior
to the time any such distributions are approved by the Probate Court and with the aid and
cooperation of counsel for the estate, legally effective and appropriate arrangements will be
made, and necessary documents will be prepared and executed, by or on behalf of the
appropriate parties. By means of these arrangements:
(1) The entire net amount of any such distributions effected in the form of
cash or cash equivalents shall be delivered and paid over directly to the County and not to HSR.
(2) And any other assets of said estate that would otherwise be distributed to
HSR in the form of real property, or interests in real property, or contract rights and/or other
11
Nothing contained in the Agreement or in any other agreement or instrument related to or arising out of the
transactions subject of this Agreement may be deemed or construed to vest in the County any right or option to
receive or recover any distributions of income (as distinguished from principal) otherwise distributable, or
distributed, to HSR. Any such income distributions are to be used solely for the purpose of funding operations of
HSR as described in Recital DD of this Agreement.
12 Circuit Court, Deschutes County, Oregon, Probate Department, Case No. 08 -PB -0059 -MA
Rehabilitation Loan Agreement Page 8 of 21
intangible property, shall be conveyed, assigned, or otherwise effectively transferred to County
and not to HSR, and, unless otherwise agreed between the parties to this Agreement, the fair
market value of said real property, interests in real property, or contract rights and/or other
intangible property, as determined for purposes of determining whether or not any Oregon
Inheritance Tax will be payable out, or on account of the value, of the assets of said estate, or
the amount of such taxes, shall be credited to the indebtedness of HSR arising under this
Agreement
(c) Partition and Partial Liquidation of Redmond Facilities. As elsewhere stated
and described in this Agreement, and prior to, or simultaneously with, closing of the BLB
transactions with the banks described above, HSR will cause aII of its right, title and interest in
and to the real property and improvements comprising the Redmond Facilities and described in
Appendix A, to be conveyed to, and vested in, the County by means of a fully executed,
properly acknowledged, and recordable Bargain & Sale Deed in the form set forth in Appendix
G to this Agreement.
(1) At or prior to the time the deed described immediately above is recorded
in the Official Records of the County, the parties will execute, in counterpart original form, a
lease between the parties, pertaining to all of the property comprising the Redmond Facilities
and described in Appendix A in the form of the Lease set forth in Appendix H to this
Agreement.
(2) If, during the term of the Lease described immediately above, and after
June 30, 2010, the County shall determine that the rights of HSR to use and occupy that portion
of the leased "Premises" described and referred to therein as the "EC Parcel" should be
terminated, the County may, at its expense, and after delivering no Tess than thirty (30) days
advance written notice to HSR of its intention to do so, exercise an option, hereby
acknowledged and agreed to by HSR, to undertake the measures necessary to cause the
Premises described in the Lease to be partitioned into two separate legal Tots or parcels and
upon recording of the official plat or final survey, the Lease shall no longer apply or pertain tc
that portion of the Premises that comprises the EC Parcel referred to in the Lease.13
(3) County may make the determination, deliver the notice, exercise the:
option, and undertake the measures, described immediately above, if and when, in the exercise
of reasonable judgment and as a result of reasonably diligent inquiry, it finds that HSR has not
demonstrated, and cannot demonstrate, that its continuing use and occupancy of the EC Parcel
has resulted, or will result, within a reasonable period of time, in the production of sufficient.
revenues and/or non -monetary benefits that, when combined with the other resources availablE
to HSR and in consideration of HSR's operating expenses, will be sufficient to fund and facilitatE
13
One of the two primary improvements comprising the Redmond Facilities consist of a single building and it .
attached ancillary structures, adjacent driveways, walkways, parking areas, outdoor kennels and cages
enclosures, front and side yard landscaping, and a relatively small area of unimproved property, all located or;
the southerly portion of the leased "Premises." The other primary improvements consist of the roughly 555f;
square foot metal clad light industrial type building located on the mostly unimproved portion of the leased
Premises north of the structure and improvements described above and south of the south boundary of NI:
Jackpine Avenue, that is the subject of that certain Broker Price Opinion furnished to the County by Michael Aid,
ABR, CRS, e -Pro, GRI, with the firm of Steve Scott Realtors, on or about October 30, 2008. If the Premises ar,
partitioned as contemplated by this subsection, it is the intention and agreement of the parties that the commo 1
boundary between the partitioned parcels will be located approximately halfway between the two building;
described above so as to provide ample access to the portions of each of those buildings that would end u
facing the boundary line between them. If partition does occur, County or its successors in interest in the E( :
Parcel will be responsible to secure and install any utility lines or feeds required for use of the EC Parcel outsid'
the boundaries of the remaining portion of the Premises the Lease refers to as the "Shelter Parcel.
Rehabilitation Loan Agreement Page 9 of 21
its operations for the purposes described in Recital DD above, and that aII other sources of
payment and/or recovery of the then -unpaid balance of all of HSR's indebtedness to County will
be insufficient to pay said unpaid indebtedness when the entire unpaid balance thereof
becomes due under the notes described in this Agreement.
(4) After delivery of the notice described in subsection 2.3(c)(2) above, and
no more than thirty (30) days following delivery to HSR of a survey or plat of the Premises
subject of the Lease depicting the location of the common boundary between the EC Parcel and
Shelter Parcel in relation to aII then -existing improvements on the Premises, the parties shall, in
good faith, endeavor to reach agreement as to the amount that will be credited against HSR's
then outstanding obligations due the County arising under this Agreement that are evidenced by
the promissory notes described in section 1 above. Among other things relevant to the issue,
the parties shall base any agreement that they may reach as described immediately above, on
the premise that the actions required to finalize the partition process will be concluded not more
than ninety (90) days after such survey or plat has been delivered to HSR and that the credit
shall be afforded on the day the partition is lawfully accomplished, or on the last day of the 90 -
day period described above, whichever first occurs.
(5) However, if, within thirty (30) days after beginning good faith negotiations
for the purpose described immediately above, the parties are unable to reach agreement on the
amount of credit to be afforded HSR against the obligations therein described, then, County
shall employ Bratton Appraisal Group LLC, or any private MAI appraiser otherwise agreed upon
between the parties, to perform and produce a Summary Appraisal Report pertaining to the land
and improvements that will end up comprising the EC Parcel. Upon completion and delivery of
a copy of the final Summary Appraisal Report to County and to HSR, the fair market value of
that land and those improvements comprising the EC Parcel on conclusion of partition, "as is,"
based on sales of comparable properties and such other criteria or assumptions that the
appraiser deems appropriate for purposes of such valuation, shall be the amount of the credit to
be afforded HSR against its obligations to the County the day the appraisal is delivered to the
County. The cost of any such appraisal shall be advanced by the County but one half thereof
shall be added to and become a part of the indebtedness evidenced by the note described in
subsection 1.2 above (see Appendix C).
(6) However, if, before, at, or at anytime after, the time the County has
delivered any notice described in subsection 2.3(c)(2) above, and prior to the time the Premises
are finally and lawfully partitioned as contemplated by this Agreement, either County or HSR, or
both, shall negotiate, and/or obtain, a bona fide offer to purchase the eventual EC Parcel for
cash payable on terms and conditions agreeable to both parties, then, the net amount of the
price the prospective purchaser has offered to pay that is paid over to the County on closing of
the transactions contemplated by such offer, shall be the amount applied and credited to the
account of HSR against its indebtedness to the County effective as the date of such closing.
(7) If the EC Parcel shall be created by partition as aforesaid and then, or at
anytime thereafter, the EC Parcel is sold or otherwise disposed of by or on behalf of County.
and if the value of the consideration paid to, or received by, the County, in exchange for the EC
Parcel, diminished by all and any costs in fact incurred by County for purposes of effecting said
partition, and for purposes of constructing, or reconstructing, or altering, or expanding, or
enlarging, or maintaining, or repairing, any improvements now, or at anytime hereafter, locate(:
on the EC Parcel at the time the same is sold or otherwise disposed of by the County; furthel
diminished by the reasonable and customary costs of such sale or other disposition, shoulc
exceed, when combined with all other amounts previously and then applied or credited tc
payment of the indebtedness of HSR evidenced by the notes described in this Agreement, the
total amount of said indebtedness then outstanding and unpaid, then, County shall, at once, pad,
Rehabilitation Loan Agreement Page 10 of 2
and deliver to HSR, in cash, the amount of such excess consideration.
(8) Finally, whether or not the EC Parcel is created by partition as aforesaid,
if and when the entire amount of HSR's indebtedness to the County shall have been repaid in
accordance with the terms and conditions set forth on the face of each of the several notes
described in this Agreement and as otherwise described herein, then, the County will at once re
convey the Redmond Facilities, or only the Shelter Parcel if the EC Parcel shall have been
previously sold or otherwise disposed of by the County, to HSR free and clear of all liens and
encumbrances save and except any and all easements, conditions, and restrictions, then of
record; zoning and land use laws then affecting said property, but reserving the right to enter
and revest itself with title to the property so conveyed in the event said property is no longer
used for purposes of maintaining an animal shelter that receives and holds animals from and on
behalf of the County and other purposes that provide accommodations, facilities, funds or
resources, ancillary to such uses.
(d) Other Sources of Repayment. In addition to any and all payments or sums credited
to payment of HSR's obligations to the County subject of this Agreement described by the
foregoing provisions of this subsection 2.3, County shall accept, and credit to the account of
HSR, without prepayment penalty or forfeiture of any kind, any and all other amounts HSR may
tender and pay to County, as well as any amounts of money or the fair value of any other
property, real or personal, tangible or intangible, delivered to and officially accepted by County
by third parties, by way of contributions or otherwise, by way of payment on account, or in
satisfaction, of HSR's said obligations, or of any discrete portion, or portions, thereof.
3. Application of Payments and Credits. All money, and the net value, or net proceeds of
any sale or other disposition, of any property or interests in property, received by County on
account of any indebtedness of HSR arising under and subject of this Agreement, shall, to the
extent the same shall be sufficient to do so, be applied and credited as follows:
3.1 First, and except as otherwise stated herein, to payment of all and any interest on
the principal portion of all of said indebtedness accrued and unpaid as of the date each suct"
payment, distribution, property or interest in property, is delivered to the County.
3.2 Next, and except
then outstanding and unpaid
(see Appendix E).
3.3 Next, and except
then outstanding and unpaid
(see Appendix D).
3.4 Next, and except
then outstanding and unpaid
B)
as otherwise stated herein, to payment of any principal amount
under the note evidencing the obligation described as CL -B above
as otherwise stated herein, to payment of any principal amount
under the note evidencing the obligation described as CL -A above
as otherwise stated herein, to payment of any principal amour
under the note evidencing HSR's BLB obligations (see Appendix
3.5 Next, and except as otherwise stated herein, to payment of any principal amount:
then outstanding and unpaid under the note evidencing HSR's APA obligations (see Appendix
C).
3.6 Next, and except as otherwise stated herein, to payment of any principal amour
then outstanding and unpaid under the note evidencing HSR's WCL obligations (see Appendix
F).
3.7 Finally, if and when all of the interest and principal amounts described in thE
foregoing subsections of this section 3 have been fully paid and satisfied, any money, and thE
value, or proceeds of any sale or other disposition, of any property or interests in property
Rehabilitation Loan Agreement Page 11 of 2
received by County on account of any indebtedness of HSR arising under and subject of this
Agreement, shall be immediately delivered to HSR.
4. Loan Documentation and Closing.
4.1 Bank Loan Buyout. The BLB will be closed, in escrow, by Deschutes County Title
Company ("Escrow Agent") as soon as reasonably possible following the date this Agreement is
signed on behalf of both the parties.
(a) For purposes of closing, the Escrow Agent shall prepare, or approve, such
instruments ("Lien Releases") as the Escrow Agent deems suitable and legally sufficient to
effect full discharge and satisfaction of any and all liens and encumbrances on, or affecting, the
Redmond Facilities arising in favor of Bank of the Cascades, Columbia River Bank, Community
First Bank, and the City of Redmond, Oregon, under any and all documents and instruments
heretofore recorded in the Official Records of the County, including, but not limited to, any
deeds of trust, line of credit instruments, assignments of rents, fixture filings, the Systems
Development Charge Installment Payment Lien Agreement above-mentioned, any instruments
or agreements, recorded or unrecorded, amending or supplementing any such instruments, and
any recorded memorandums of any such instruments or agreements, all to the end that when
the deed described in subsection 2.3 above (see Appendix G) is recorded, immediately
followed by recording of the instruments first described in this subsection, County will be vested
with fee simple title to the Redmond Facilities free and clear of all encumbrances save and
except easements, conditions and restrictions of record and applicable zoning and land use
restrictions pertaining to the Redmond Facilities.
(b) For purposes of closing, County shall require each of the Lien Releases
described immediately above to be properly and originally signed and acknowledged by the
person or persons having the authority to bind the party on behalf of whom the same will be
delivered, and delivered to the Escrow Agent
(b) For purposes of closing, County shall require Community First Bank to deliver
to the Escrow Agent a UCC Financing Statement Amendment in the form of Appendix I to this
Agreement.
(c) For purposes of closing, County shall require Bank of the Cascades, Columbia
River Bank, Community First Bank, each, and respectively, to deliver to the Escrow Agent, each
and every original document or instrument given to, or obtained by, such bank to evidence or to
secure any all or any portion of HSR's present indebtedness to said bank, and, in the case of
Columbia River Bank, each and every original document given by, or obtained from, the Trust or
the Trustee of the Trust, to evidence or to secure any portion of HSR's former, or present.
indebtedness, to Columbia River Bank, or to any of its successor or successors in interest, or
assignees, of Columbia River Bank. Each such document shall be marked with a stamp, cy
contain a written notation, to the effect that the obligations evidenced and/or secured thereb3,
have been paid or satisfied in full.
(d) For purposes of closing, HSR shall deliver to the Escrow Agent the fully signec
and attested form of promissory note described in subsection 1.2 of this Agreement (seE
Appendix B); the fully signed and acknowledged form of Bargain & Sale Deed described it
subsection 2.3 above (see Appendix G); and a certified true copy of the written resolutions o
actions of its Board of Directors authorizing execution and delivery of this Agreement, and all o
the "Related Documents" hereinafter described, on the behalf of HSR in the form of Appendix ..
to this Agreement.
(e) For purposes of closing, County shall deliver to the Escrow Agent the sum c
$1,000,000.00 for purposes of disbursement of said sum to the several banks named above, o •
Rehabilitation Loan Agreement Page 12 of 2
order, in accordance with their instructions and any other instructions directed to the Escrow
Agent by any other persons or parties having any interest in the disposition of said sum.
(f) If necessary to comply with any instructions delivered to it by the City of
Redmond, County shall deliver to the Escrow Agent the sum required to be disbursed to the City
of Redmond for purposes of enabling the Escrow Agent to deliver and, where appropriate,
record, the documents and instruments to be delivered to the Escrow Agent by the City
described above.
(g) For purposes of closing, HSR and County will each execute and acknowledge
a Memorandum of Contract pertaining to this Agreement in the form of Appendix K to this
Agreement, and a Memorandum of Lease pertaining to the Redmond Facilities in the form of
Appendix L to this Agreement.
(h) For purposes of closing, HSR and County will each deliver to the Escrow Agent
separate written escrow instructions conforming to this Agreement.
(i) For purposes of Closing, HSR, County and the Trustee of the Trust will sign no
more than three (3) counterpart originals of whatever form of agreement or instrument County,
counsel for HSR, and the Trustee agree is legally sufficient to effect the provisions of this
Agreement respecting principal distributions from the Trust to County, and the County will cause
all three counterpart originals of that agreement or instrument to be delivered to the Escrow
Agent.
(j) For purposes of closing, County will cause each of the above-named banks
(and their successors in interest, if any) to deliver to the Escrow Agent written escrow
instructions conforming to this Agreement and the terms of the County's agreement with said
banks.
(k) For purposes of closing, and if necessary, County will cause the City of
Redmond to deliver to the Escrow Agent written escrow instructions conforming to thi.
Agreement and the terms of County's agreements with the City.
(I) For purposes of closing, HSR, County, each of said banks (and their
successors in interest, if any), and, if applicable, the City of Redmond, will cause any additiona
or supplementary written escrow instructions required by the Escrow Agent to be signed and
delivered to the Escrow Agent, to be promptly signed and delivered to the Escrow Agent.
(m) When all of the documents, instruments, funds and instructions described it
this subsection 4.2 have been delivered to the Escrow Agent, the BLB transaction shall be
closed as follows:
(1) Escrow Agent shall first record the original Bargain & Sale Deed from
HSR to County (see Appendix G) in the Official Records of the County.
(2) Next, Escrow Agent shall, immediately, record each and all of the Lieri
Releases in the Official Records of the County.
(3) Next, Escrow Agent shall, immediately, record the above-mentioned
Memorandum of Agreement (see Appendix K) in the Official Records of the County,
immediately followed by the above-mentioned Memorandum of Lease (see Appendix L).
(4) Escrow Agent shall undertake the measures necessary to effect filing c f
the UCC Financing Statement Amendment from Community First Bank (see Appendix 1) in th,!
offices of the Oregon Secretary of State, Corporation Division, in Salem, Oregon, and that wi I
result in an official Acknowledgment of filing being delivered to the County in due course.
(5) Escrow Agent shall cause to be disbursed to the above-named banks, c r
Rehabilitation Loan Agreement Page 13 of 21
order, the sum of $1,000,000.00, in such shares, if any, such sum is to be disbursed to each of
said banks according to their written instructions, or if no such shares are required or authorized
by said instructions, then jointly to aII three banks, or order, or in any other manner and by any
other means, that Escrow Agent is authorized, or prepared to use for purposes of effecting
disbursement or delivery of the entire $1,000,000.00 to the said three banks, or any of their
number, in a manner not inconsistent with all of their written instructions.
(6) If necessary, Escrow Agent shall cause to be disbursed to the City of
Redmond, or order, the amount required or authorized by the County and the City as stated in
their respective written instructions to the Escrow Agent.
(7) Escrow Agent shall deliver to the County, to counsel for HSR, and to the
Trustee of the Trust, each and respectively, one of the three original executed agreements or
instruments described in subsection 4.1(i) above.
(8) When all of the actions described in the foregoing subsections of this
subsection 4.1(m) have been accomplished, Escrow Agent shall deliver to the County all of the
original documents and instruments described in subsections 4.1(c), and upon receipt thereof,
County shall either deliver the same to HSR in the same form received from the Escrow Agent,
or, at its option, prepare and deliver full, true and correct copies of all of said documents and
instruments to HSR accompanied by a written statement that the originals will be retained by the
County for a period of no less than seven (7) years.
4.2 Accounts Payable Advances. The APA transaction shall be deemed closed upon
execution of this Agreement on behalf of both of the parties and delivery by HSR of the
promissory note described in subsection 1.2 above (see Appendix C) to the County.
(a) If the total principal amount of such note shall not have been determined when
this Agreement is executed on behalf of both Parties, then, said note shall be executed on
behalf of HSR without the principal amount thereof stated on its face, and that principal amount
shall be inserted by the County when the final amount thereof can be determined, and a
complete copy of the original form of said note, stating the exact principal amount thereof, shall
be at once delivered to counsel for HSR.
(b) At, or as soon as reasonably possible following, closing of the APA, County
shall commence disbursement of the amounts it has agreed to pay to each creditor with whom
County has made, or will make, an agreement as described in subsection 1.2(a) of this
Agreement, accompanied by a tender letter from the County directed to such creditor, in the
form of Appendix M to this Agreement, requiring each such creditor to deliver to County an
accompanying written Release of Claims in the form of Appendix N to this Agreement. For
purposes of this Agreement, the check or draft effecting a disbursement to a creditor made in
accordance with the immediately preceding sentence, its accompanying tender letter and
Release of Claims, will be referred to as a "Settlement Package."
(c) Upon mailing or delivery of every Settlement Package, County shall cause a
copy of the letter, signed and dated on behalf of County, and the Release of Claims, included in
such Settlement Package to be delivered to counsel for HSR. If, and when, any Release of
Claims is signed and returned to County by or on behalf of any creditor to whom a Settlement
Package has been delivered, County shall cause a full and complete copy thereof to be
delivered to counsel for HSR, and, thereafter, retain the original thereof for a period of no less
than seven (7) years.
(d) Finally, as soon as reasonably possible following delivery of a Settlement
Package to all of the creditors with whom County has made, or will make, an agreement as
described in subsection 1.2(a), County shall prepare, and deliver to counsel for HSR, an
Rehabilitation Loan Agreement Page 14 of 21
original, certified, statement or schedule setting forth, in summary form, the names and mailing
or delivery address of each such creditor, the date upon which a Settlement Package was
mailed, or otherwise delivered, to such creditor, and the exact amount of the disbursement
made by the County to such creditor.
(e) Upon receipt of each document described in the foregoing subsections of this
subsection 4.2, counsel for HSR shall, after having made such copies thereof as counsel deems
appropriate, forward or deliver such document to the then -appointed or elected Secretary of
HSR for deposit and safekeeping in the official records of the corporation.
4.3 Working Capital Loans. County acknowledges and agrees that it now possesses the
original promissory notes previously made and delivered to the County to evidence HSR's
obligations to repay the two 18 -month term loans described in Recital Y and in subsection 1.3 of
this Agreement (see Appendix D and Appendix E). Accordingly, the WCL transaction shall be
deemed closed upon execution of this Agreement on behalf of both of the parties and delivery
by HSR of the Optional Advance Note described in subsection 1.3 above (see Appendix F) to
County.
(a) Future advances shall be made by the County to HSR according to the terms
and conditions contained in the said Optional Advance Note and as elsewhere stated in this
Agreement.
(b) Upon full payment and satisfaction of each of the several notes evidencing
HSR's obligations to repay the Working Capital Loan, each such note shall be marked or noted
"Paid in Full" and, thereupon, delivered by County to the then -appointed or elected Secretary of
HSR for delivery and safekeeping in the official records of the corporation.
5. Continuing Operation of Redmond Facilities. In keeping with County's purposes in
making the loan or loans subject of this Agreement and the provisions of Recital DD above, the
parties anticipate and expect that HSR will continue to operate the Redmond Facilities anc
provide the services and accommodations that were anticipated by the terms of the Trust, and
the County, when HSR acquired the land comprising the Redmond Facilities and that are
described in Recital DD.
5.1 However, even with the benefits of County's loans subject of this Agreement, its
access to its share of whatever distributions of income may be forthcoming from the Trust
whatever other resources, revenues and income HSR may have, earn, and/or receive,
following, or as a consequence of, closing of the BLB, APA and WCL transactions described it
this Agreement, County will remain concerned that HSR may not be able to generate income:
and other revenue sufficient to enable it to continue to operate the Redmond Facilities and tc:.
furnish the services and accommodations described in Recital DD.
5.2 The parties acknowledge and agree that, If necessary, County has access to the
personnel and expertise required in order to provide the basic functions needed and required by
County to accept and accommodate animals that the County (and the City of Redmond) may be
responsible to accommodate and provide for. However, access to and the ability to enter upon:
and to use the Redmond Facilities now used, or that are capable of being used, to accept and
accommodate animals for and on behalf of County and the City of Redmond, would still be
needed in the event HSR became unable or unwilling to provide the personnel, expertise and
supplies necessary to do so.
5.3 Therefore, in order to ensure: (a) that the fundamental intent and purposes of thi' i
Agreement described in Recital DD above will, in fact, be served; (b) that the functions and
accommodations needed and required by County to accept and accommodate animals that thH
County (and the City of Redmond) may be responsible to accommodate and provide for will bu
Rehabilitation Loan Agreement Page 15 of 21
immediately available in the event HSR becomes unable to provide them; (c) that the public
funds that have been, and will be, loaned directly to HSR as a result of this Agreement is
properly accounted for and managed for the purposes, and subject to the limitations, described
in Recital DD of this Agreement, and (d) that the policies and practices that led to HSR's past
and present financial difficulties are never again employed in, or permitted to affect its
operations or management, it is further, and expressly, acknowledged and agreed by and
between the parties that, for as long as HSR remains indebted to County under this Agreement
and/or any of the notes or other evidence of debt described in this Agreement:
(a) HSR will employ, at its expense, at least one individual to manage and
supervise the day-to-day operations of the Redmond Facilities on a full-time basis. Whoever is
so employed shall have proven and documented records of substantial experience and
expertise in: (1) successful management of an animal shelter, or similar facility or enterprise,
that has been, or is now, engaged in operational activities, and day-to-day financial
transactions, like, or analogous to, those now conducted by HSR at the Redmond Facilities; (2)
the practices, procedures and policies of e ffective and lawful personnel management and
supervision practices and procedures; (3) implementation and enforcement of safety regulations
and reporting procedures; (4) efficient and productive public relations and fundraising activities,
and (5) the development, implementation and continuous utilization of all proper, necessary,
accurate and objective financial records, and financial management and control policies and
procedures, and who possesses the willingness and ability to manage and supervise the
operations of the Redmond Facilities in a manner consistent with the intent and purposes of this
Agreement and its several provisions, along with the unfettered authority to communicate
directly with the County and its representatives at any time.
(1) HSR shall promptly provide written notice to the County disclosing the
identity of each person employed by HSR pursuant to this subsection together with all relevant
contact information pertaining to such person.
(2) On termination of employment of any persons employed by HSP
pursuant to this subsection, regardless of the reason therefor, HSR shall promptly cause written
notice of such termination to be delivered to the County signed by or on behalf of an executive
officer thereof who shall have the authority and responsibility to advise and inform the County, it
confidence, of the reasons that such termination took place if requested to do so by the County.
(b) No later than January 15, 2009, and the 15th day of each consecutive calendar
month thereafter, HSR will deliver to County a written statement of its financial operations (i.e. a
profit and loss statement), prepared on the accrual basis, for the calendar month next preceding
the calendar month that such statement is to be delivered along with a description, and the
results of, any fundraising activities that took place during that month. Such statements shal
reflect the receipt of any advances made under the above-mentioned Optional Advance Note.
during the month subject of such statement and may be included in the total amount o^
revenues reported for that month for purposes of disclosure of the financial results of operations
during that period. The contents of each of these reports will be maintained in strictes'
confidence by County to the fullest extent authorized by law and to be used solely for the
purpose of undertaking the actions described in subsection 7.4 below.
(c) Failure on the part of HSR to deliver, or to cause delivery, of any such financia
statement will not constitute any breach or default under this Agreement or any of the note:
given to evidence HSR's indebtedness to County arising under this Agreement.
(d) Rather, if:
(1) without reasonable excuse or justification, any such operating statemer:
Rehabilitation Loan Agreement Page 16 of 2
is not delivered to County within 10 days after the date that such delivery was due, or
(2) it appears, based on the operating statements described immediately
above, that HSR has incurred an operating loss in the amount of more than $8,333.00, during
each of any three consecutive calendar months, or
(3) it is determined, within 90 days after the end of any calendar month, that
any such operating statement materially misstated the results of HSR operations for purpose of
concealing any operating losses actually incurred by HSR during that calendar month, or if
(4) HSR delivers at least thirty (30) days' advance written request to the
County that such actions be undertaken,
the County may, at its option, initiate whatever actions are reasonably necessary to provide the
personnel and supplies necessary to take over and operate the Redmond Facilities; County
may enter upon and take possession of the Redmond Facilities in their entirety and, upon doing
so, shall be deemed to have terminated the Lease described in subsection 2.3(c)(1) above (see
Appendix H), and HSR shall no longer have any rights to use and occupy the Redmond
Facilities under the Lease, or otherwise, except as may be permitted by the County in the
exercise of its sole and unbridled discretion.
6. Remedies on HSR Default. Regardless of anything else set forth in this Agreement, it is
the ultimate hope and expectation of all the parties that County's loans to HSR will enable HSR
to continue operation of the Redmond Facilities and continue to provide the basic services
necessary to fulfill its obligations to, and needs of, County, the City of Redmond, and the
community generally, if not more.
6.1 It is also the expectation and intention of the parties that the County's loans to HSR
will be fully paid and satisfied out of HSR's share of the net proceeds of a sale (or, perhaps,
refinancing) by the Trust, of Green Pastures and/or Obsidian; its distributive share of the Estate
of Essie B. Schultz as described in subsection 2.3(b) of this Agreement; other gifts and
bequests it may receive prior to when such loans are due and payable according to their terms
and the provisions of this Agreement; if applicable and necessary, from the proceeds of the sale
or development of the EC Parcel if, and when, it is partitioned off and sold or developed by the
County as described in subsection 2.3(c) above; from the proceeds of refinancing some portion
of its debt to County, or as a result of some combination of these sources.
6.2. It is also the expectation and intention of the parties, if HSR is able continue its
operations, and County's loan or loans to HSR are paid, that, at the very least, HSR will end up
owning the portion of the Redmond Facilities that are now used to provide the essential services
needed and expected by County, the City of Redmond, and the community generally, i.e. the
Shelter Parcel described above, outright, and free and clear of any liens or encumbrances given
to secure any indebtedness it may then owe.14
6.3. Therefore, County hereby represents, covenants and agrees that, if HSR defaults in
payment of its indebtedness to County when such payment becomes due, or suffers or permits
itself to be adjudicated as a bankrupt in liquidation (voluntarily or otherwise) after closing of the
County's loans to HSR as described in this Agreement, or otherwise discontinues all of its
operations, or abandons the Redmond Facilities, County will, insofar as possible and in its
discretion, proceed to satisfy its claims against HSR, or the estate of HSR, in such a manner as
to effectuate the expectations and intentions of the parties described in subsections 6.1 and 6.2
14
Unless they are remain encumbered for purposes of refinancing all or a portion of its debt to County or for some
other purpose or purposes consistent with this Agreement.
Rehabilitation Loan Agreement Page 17 of 21
above.
7. Release of Trustee. HSR hereby releases Trustee and the Trust from any claim, Toss,
liability or any other cause of action arising from Trustee's distributions consistent with this
Agreement.
8. Further Documentation. Each party agrees to cause to be executed, and delivered,
such other documents, and to do and perform such other acts and things, as any the party may
reasonably request in order to carry out the intent and accomplish the purposes of this
Agreement.
9. County's Agent. Except for purposes of doing any act, or making any decision or
determination, that he or she is not authorized to do, or to make, by reason of any applicable
charter provision, County Code provision, Oregon law, ordinance, rule, regulation, or policy, all
documents and instruments, official notices and communications, and all actions, decisions or
determinations that the County is afforded the right or prerogative to execute, deliver, or make,
or undertake, that is described or implied by this Agreement or by any one or more of the
"Related Documents" described immediately below, may be done or made by the County
Administrator or, in his or her absence, by any County representative that the County
Administrator may authorize, and confirm by written notice to HSR, to exercise the authority of
the County Administrator afforded under this Agreement.
10. Related Documents. For purposes of this Agreement, this Agreement and each of the
documents, instruments and agreements described or referred to in the text of this Agreement
that require or describe the performance of any duty or obligation on the part of either party.
including, but not limited to, the original forms of all such documents that constitute an Appendix
to this Agreement, shall be and are hereby defined and described as a "Related Document," as
"Related Documents" collectively, and are by this reference incorporated in and made a part of
this Agreement with like effect as though the same were included in the text hereof.
11. Cross -Default. Default in performance, or breach, on the part of HSR under any Related
Document, shall constitute default, or breach, of each and every other Related Document.
including, but not limited to, this Agreement, and shall afford to County the right and the
prerogative to exercise any rights or remedies available to it under each Related Document, for
default or breach thereunder, including:
11.1 In the case of any note or other evidence of indebtedness now or hereafter arising
under this Agreement, the right to accelerate the time for payment of the entire remaining
indebtedness of HSR thereunder,
11.2 In the case of County's right to undertake and effect partition of the Redmonc
Property elsewhere described in this Agreement, to undertake such action at any time it ma
determine to do so.
12. Notice of Default Required. Except as otherwise expressly stated in this Agreement, or
in any other Related Document, neither party shall be in default under this Agreement, or under
any such other Related Document, unless and until written notice of its unperformed obligation
has been given and that obligation remains unperformed for fifteen (15) days after delivery o1
such notice in the case of payment of money, or for thirty (30) days in the case of other
obligations. If the obligation cannot be performed within the thirty -day period, there shall be nc
default if the responsible party commences a good faith effort to perform the obligation within
such period and continues diligently to complete performance.
13. Authority. The execution, delivery, and performance of this Agreement and all other
agreements and Related Documents contemplated by this Agreement have been duly
Rehabilitation Loan Agreement Page 18 of 21
authorized by Board of Directors of HSR and the Board of Commissioners of Deschutes County
and such parties represent that all actions required for valid approval have taken place. This
Agreement and all Related Documents, when executed and delivered by the parties thereto, will
constitute the legal, valid and binding obligation of the parties, enforceable against the parties in
accordance with their respective terms except as the enforceability thereof may be limited or
proscribed by reason of any provisions of this Agreement, or by the application of bankruptcy.
insolvency, moratorium, or similar laws affecting the rights of creditors generally, or by judicial
limits on the right of specific performance.
14. Binding Effect. This Agreement will be binding on and inure to the benefit of the parties
and their respective heirs, personal representatives, successors, and assigns.
15. No Third Party Beneficiaries. Except for the provisions of section 7 above, nothing ir.
this Agreement, express or implied, is intended or will be construed to confer on any person.
other than the parties to this Agreement, any right, remedy, or claim under or with respect to this
Agreement.
16. Amendments. This Agreement may be amended only by an instrument in writing
executed on behalf of both of the parties, which writing must refer to this Agreement.
17. Counterparts and Signatures. This Agreement will likely be executed in counterparts;
original forms, each of which will be considered an original and all of which together will
constitute one and the same agreement. Facsimile or other electronic transmission of any
signed original document, and retransmission of any signed facsimile or other electronic.
transmission, will be the same as delivery of an original. At the request of any party, the parties
will confirm electronically transmitted signatures by signing an original document.
18. Notices and Other Deliveries.
18.1 Any notices, consents, waivers, requests, instructions or other writter
communications required, arising with respect to, or permitted under, this Agreement, or any
additional or other agreements arising hereunder, will be sufficiently given if delivered by hand
or by Certified or Registered US Mail, or by facsimile, or by electronic mail, addressed to the
respective parties as follows:
If addressed to and intended for delivery to County:
County Administrator
Deschutes County
Department of Administrative Services
1300 NW Wall Street, Suite 200
Bend, OR 97701
with a complete copy to: Legal Counsel
Deschutes County
1300 NW Wall Street, Suite 200
Bend, OR 97701
If addressed and intended for delivery to HSR:
Executive Director or Shelter Manager
Humane Society of Redmond
1355 NE Hemlock Street
PO Box 1404
Redmond, OR 97756
Rehabilitation Loan Agreement
Page 19 of 2
with a complete copy to:
Items incapable of being communicated or delivered by facsimile or by electronic mail, such as,
but not limited to, original documents, checks, drafts or cash payments, shall be physically
delivered to the parties listed above at the street address stated immediately following the
name(s) of such parties, by mail or by hand delivery.
18.2 For purposes of this Agreement, and all other agreements arising hereunder:
(a) Delivery by hand is effective when the item(s) being delivered are physically
placed in the possession of any person, at least 18 years of age, found at the address of the
party or persons to whom delivery is intended stated above.
(b) Delivery by Certified or Registered mail is effective at midnight on the day and
date that the items that are so delivered are physically delivered to the address of the party or
person to whom they are addressed stated above, as evidenced or confirmed by a US Postal
Service return receipt for, or electronic confirmation of, such delivery whether or not signed by
or on behalf of the addressee.
(c) Delivery effected by facsimile is effective twelve (12) hours after the time that
the items that are so delivered are sent according to the date stamp affixed, or that is indicated
by the transmitting device, on a written document that evidences the number of pages that were
transmitted and the fax number for the receiving device.
(d) Delivery effected by electronic mail is effective twelve (12) hours after the time
appearing on a copy or blind copy, addressed to the sender, of the first page of the email
message constituting, or that describes and carries as an attachment or attachments, the items
so delivered and that also identifies the party or persons to whom it was directed as the
addressee, or one of the addressees, at their email address set forth above.
18.3. Any party, or other person, to whom notices or other communications described in
subsection 18.1 may be directed, may change their physical address, facsimile number, or
electronic mail address, at any time, by written notice to all other parties and persons identified
in that subsection, delivered by any of the means described in subsection 18.2 above.
However, and until such notice of change is so delivered, all notices and other communications
described in subsection 18.1, shall be deemed effective and delivered to the addressee, by any
means described in subsection 18.2, to the physical address of the addressee set forth above.
19. Advice of Counsel. The parties represent and warrant that they have carefully read this
Agreement and each of the other Related Documents, know the contents hereof, and that this
Agreement, and each of the Related Documents that have been, or will be, signed on behalf of
the parties, has been or will be voluntarily executed after consultation with their respective legal
counsel.
19.1 The parties and their respective legal counsel have participated in, and had an equal
opportunity to participate in, the drafting of this Agreement. Accordingly, no ambiguities or
disputed provisions of this Agreement, or of any other Related Document, shall be construed
against any party based on a claim that that party or its counsel drafted the ambiguous
language.
19.2 For purposes of the delivery of documents to counsel for HSR that are described
elsewhere in this Agreement, such deliveries will be effected to Thomas A. Sherwood, Attorney
Rehabilitation Loan Agreement Page 20 of 21
(OSB No. 66111) unless and until other counsel shall be engaged to represent HSR in
connection with the documentation and closing of the transactions subject of this Agreement;
written notice of such engagement is delivered to County signed by an authorized officer of
HSR, and notice of said engagement has been acknowledged or confirmed by Mr. Sherwood in
writing.
20. Entire Agreement. This Agreement, including all other Related Documents comprise
and evidence all of the agreements and understanding of the parties with respect to the subject
matter of this Agreement and supersedes all prior understandings and agreements, whether
written or oral, among the parties with respect to such subject matter.
Therefore, each of the parties has caused this Agreement to be signed on its behalf by its
duly authorized officers effective as of the day and date first stated above.
COUNTY:
ATTEST:
Recording Secretary
HSR:
ATTEST:
Lisa D.T. Klemp, Corporate Secretary
Rehabilitation Loan Agreement
DESCHUTES COUNTY, OREGON
By:
DAVE KANNER, COUNTY ADMINISTRATOR
HUMANE SOCIETY OF REDMOND
By:
RACHEL A. OXLEY, DVM, PRESIDENT
Page 21 of 21
APPENDIX A
REHABILITATION LOAN AGREEMENT
Page 1 of 1
LEGAL DESCRIPTION OF REDMOND FACILITIES
Parcel Three (3) of Partition Plat 2001-29, Deschutes County, Oregon, TOGETHER
WITH Parcel "A" described hereon, and EXCEPTING THEREFROM Parcel "B" and
Parcel "C" described hereon.
Parcel A:
Commencing at a 3 1/4 -inch aluminum cap monumenting the East quarter (1/4)
corner of Section 10, Township 15 South, Range 13 East of the Willamette Meridian,
Deschutes County, Oregon, the initial point; thence South 89°49'03" West, 1005.89
feet; thence North 00°14'47" West, 440.00 feet to the North boundary of Parcel 3 of
said Partition Plat 2001-29 and the point of beginning; thence South 89°40'56" West
along the common boundary of said Parcel 3 and Parcel 2 of said Partition Plat,
318.72 feet to a 5/8 -inch rebar at the Northwest corner of said Parcel 3; thence
North 00°14'47" West along the West boundary of said Parcel 2, 273.35 feet to a
3/4 -inch pipe; thence North 89°49'03" East, 318.72 feet to a 3/4 -inch pipe; thence
South 00°14'47" East, 273.34 feet to the point of beginning.
Parcel B:
Commencing at a 3 1/4 -inch aluminum cap monumenting the East quarter (1/4)
corner of Section 10, Township 15 South, Range 13 East of the Willamette Meridian,
Deschutes County, Oregon, the initial point; thence South 89°49'03" West, 1005.89
feet; thence North 00°14'47" West, 30.00 feet to a 3/4 -inch pipe on the South
boundary of Parcel 3 of Partition Plat No. 2001-29, and to the point of beginning;
thence along the boundary of said Parcel 3 as follows: North 89°49'03" East, 212.51
feet to a 3/4 -inch pipe; thence North 00°15'12" West 410.01 feet to a 5/8 -inch rebar;
thence South 89°48'56" West, 212.46 feet; thence leaving said Parcel 3 boundary
South 00°14'47" East, 410.00 feet to the point of beginning.
Parcel C:
Commencing at the Northwest corner of Parcel 3 of Partition Plat No. 2001-29
(RMP -00-21 D), a 5/8 -inch rebar with yellow plastic cap marked "W&H PACIFIC", the
initial point of this description; thence North 00°14'47" West along the West line of
the Southeast quarter of the Northeast quarter (SE1/4NE1/4) of said Section 10,
also being the West line of Parcel 2 of Partition Plat No. 2001-29, a distance of
273.75 feet to a 3/4 -inch pipe with yellow plastic cap marked "POVEY & ASSOC.",
the true point of beginning of this description; thence North 89°49'03" East, along the
North line of Parcel "A" as shown on LLA04-12 (CS15978), a distance of 318.72 feet
to a 3/4 -inch pipe on the East line of said Parcel "A"; thence South 00°14'47" East
along said East line, a distance of 83.38 feet to a 5/8 -inch rebar; thence South
89°49'03" West, a distance of 318.72 feet to a 5/8 -inch rebar on the West line of
Parcel 3 of Partition Plat 2001-29; thence North 00°14'47" West along said West
line, a distance of 83.38 feet to the point of beginning.
END OF LEGAL DESCRIPTION
APPENDIX B
REHABILITATION LOAN AGREEMENT
Page 1 of 2
PROMISSORY NOTE
DATE: December _, 2008
PROMISOR: Humane Society of Redmond, an Oregon non-profit corporation.
1355 NE Hemlock Avenue
Redmond, OR 97756
PROMISEE: Deschutes County
1300 NW Wall Street
Bend, OR 97701
ON DEMAND, or if no demand is sooner delivered, then, on December 1, 2015, Promisc-
promises to pay to Promisee, or order, the principal sum of ONE MILLION and no/100ths Dollar;
($1,000,000.00), in lawful money of the United States of America, together with simple interest oil
the unpaid and outstanding balance of said principal sum computed at the rate of three and nine
tenths percent (3.9%) per annum, from and after the day and date the full principal sum
advanced by Promisee to or for the benefit of Promisor, until the same is paid in full. Unles;
otherwise directed by or on behalf of Promisee, all payments shall be addressed or delivered to
the Deschutes County Finance Department, Deschutes Services Building, at the above address.
Promisor acknowledges, confirms and agrees that interest will be computed and may be
accrued, in accordance with the foregoing provisions of this Note, prior to the date payment is due
and payable under this Note, or under that certain Rehabilitation Loan Agreement between
Promisor and Promisee dated and effective as of December , 2008, as the same may be
amended, if at all, in accordance with its terms, whichever first occurs. Promisor agrees that al!
sums paid to, or received or recovered by, Promisee on account of the indebtedness evidenced
by this Note shall first be applied to the payment and satisfaction of Promisor's obligation for the
payment of interest hereunder and then to reduction of the principal amount of said indebtedness
without regard to any contrary characterization or designation of such payment or any portion
thereof by or on behalf of the Promisor. Accordingly, unless and until such time as Promisor shall
have paid an amount equal to all interest computed and accrued as aforesaid, no payments made
by or on behalf of the Promisor shall be applied to reduce the principal amount payable
hereunder.
All or any portion of the indebtedness evidenced hereby may be prepaid at any time withoui
penalty or surcharge of any kind or description.
1. Acceleration.
If any payment due on account of interest or principal payable hereunder is not paid when due.
the whole sum of both principal and interest shall become immediately due and collectible at the
option of the Promisee. If Promisor abandons, terminates or ceases operations as an anima
shelter on the Property located at the above address, Promisee may exercise its option tc
accelerate payment of this Note upon such occurrence or default by Promisor regardless of any
prior forbearance. Otherwise, and in addition, Promisee may exercise its option to accelerate
payment of this Note if and when such right or option shall be afforded Promisee under the above
mentioned Rehabilitation Loan Agreement, as the same may be amended in accordance with it:
terms.
2. Disputes. With respect to any dispute relating to this Note, or in the event that a suit, action
arbitration, or other proceeding of any nature whatsoever, including, without limitation, any
Optional Advance Note (Bank Loan Buyout) Page 1 of 2 Pages
APPENDIX B
REHABILITATION LOAN AGREEMENT
Page 2of2
proceeding under the U.S. Bankruptcy Code and involving issues peculiar to federal bankruptcy
law, or any action seeking a declaration of rights, is instituted to interpret or enforce this Note or
any provision of this Note, the prevailing party shall be entitled to recover from the losing party its
reasonable attorneys' fees and all other fees, costs, and expenses actually incurred anc
reasonably necessary in connection therewith, as determined by the judge or arbitrator at trial o'
other proceeding, or on any appeal or review, in addition to all other amounts provided by law.
3. Waivers. Presentment, notice of dishonor, and protest are hereby waived by Promisor and by
all sureties, guarantors, and endorsers hereof.
4. Notices. Any notice to Promisor provided for in this Note shall be given by mailing such notic€
by certified mail addressed to Promisor at the property address above -stated, or to such other
address as Promisor may designate by notice to Promisee. Any notice to Promisee shall be giver
by mailing such notice by certified mail, return receipt requested, to Promisee at the address
stated in the first paragraph of this Note, or at such other address as may have been designatec
by notice to Promisor.
5. Incorporation by Reference and Conflicts. The above -referenced Rehabilitation Loar
Agreement, as the same may be amended in accordance with its terms, is by this reference
incorporated herein, and made a part hereof, with like effect as though the same was set forth ir
the text of this Note. If any dispute or issue shall arise by reason of any conflict or inconsistency
between the provisions of said Rehabilitation Loan Agreement, as the same may be amended
and the provisions of this Note, the provisions of this Note shall be construed and enforced ir
accordance with said agreement.
Under Oregon Law (Chapter 9.67 OR laws 1989), most agreements, promises, and commitment:
made by us after October 3, 1989 concerning loans and other credit extensions which are not for
personal, family, or household purposes or secured solely by the Borrower's residence, must be ir
writing, express consideration, and be signed by us to be enforceable.
HUMANE SOCIETY OF REDMOND, Promisor
By
Rachel A. Oxley, DVM, President
Attest:
Lisa D. T. Klemp, Secretary
Optional Advance Note (Bank Loan Buyout) Page 2 of 2 Pages
APPENDIX C
REHABILITATION LOAN AGREEMENT
Page 1 of 2
PROMISSORY NOTE
DATE: December _, 2008
PROMISOR: Humane Society of Redmond, an Oregon non-profit corporation.
1355 NE Hemlock Avenue
Redmond, OR 97756
PROMISEE: Deschutes County
1300 NW Wall Street
Bend, OR 97701
ON DEMAND, or if no demand is sooner delivered, then, on December 1, 2015, Promisor
promises to pay to Promisee, or order, the principal sum of:
/100ths Dollars
($ ), in lawful money of the United States of America, together with simple
interest on the unpaid and outstanding balance of said principal sum computed at the rate of three
and nine -tenths percent (3.9%) per annum, from and after the day and date the full principal sum
is advanced by Promisee to or for the benefit of Promisor, until the same is paid in full. Unless
otherwise directed by or on behalf of Promisee, all payments shall be addressed or delivered to
the Deschutes County Finance Department, Deschutes Services Building, at the above address.
Promisor acknowledges, confirms and agrees that interest will be computed and may be
accrued, in accordance with the foregoing provisions of this Note, prior to the date payment is due
and payable under this Note, or under that certain Rehabilitation Loan Agreement between
Promisor and Promisee dated and effective as of December , 2008, as the same may be
amended, if at all, in accordance with its terms, whichever first occurs. Promisor agrees that all
sums paid to, or received or recovered by, Promisee on account of the indebtedness evidenced
by this Note shall first be applied to the payment and satisfaction of Promisor's obligation for the
payment of interest hereunder and then to reduction of the principal amount of said indebtedness
without regard to any contrary characterization or designation of such payment or any portion
thereof by or on behalf of the Promisor. Accordingly, unless and until such time as Promisor shall
have paid an amount equal to all interest computed and accrued as aforesaid, no payments made
by or on behalf of the Promisor shall be applied to reduce the principal amount payable
hereunder.
All or any portion of the indebtedness evidenced hereby may be prepaid at any time without
penalty or surcharge of any kind or description.
1. Acceleration.
If any payment due on account of interest or principal payable hereunder is not paid when due
the whole sum of both principal and interest shall become immediately due and collectible at the
option of the Promisee. If Promisor abandons, terminates or ceases operations as an anima
shelter on the Property located at the above address, Promisee may exercise its option tc
accelerate payment of this Note upon such occurrence or default by Promisor regardless of ant
prior forbearance. Otherwise, and in addition, Promisee may exercise its option to accelerate
payment of this Note if and when such right or option shall be afforded Promisee under the above
mentioned Rehabilitation Loan Agreement, as the same may be amended in accordance with it
terms.
Promissory Note (Accounts Payable Advances) Page 1 of 2 Pager
APPENDIX C
REHABILITATION LOAN AGREEMENT
Page 2of2
2. Disputes. With respect to any dispute relating to this Note, or in the event that a suit, action,
arbitration, or other proceeding of any nature whatsoever, including, without limitation, any
proceeding under the U.S. Bankruptcy Code and involving issues peculiar to federal bankruptcy
law, or any action seeking a declaration of rights, is instituted to interpret or enforce this Note or
any provision of this Note, the prevailing party shall be entitled to recover from the losing party its
reasonable attorneys' fees and all other fees, costs, and expenses actually incurred and
reasonably necessary in connection therewith, as determined by the judge or arbitrator at trial or
other proceeding, or on any appeal or review, in addition to all other amounts provided by law.
3. Waivers. Presentment, notice of dishonor, and protest are hereby waived by Promisor and by
all sureties, guarantors, and endorsers hereof.
4. Notices. Any notice to Promisor provided for in this Note shall be given by mailing such notice
by certified mail addressed to Prornisor at the property address above -stated, or to such other
address as Promisor may designate by notice to Promisee. Any notice to Promisee shall be given
by mailing such notice by certified mail, return receipt requested, to Promisee at the address
stated in the first paragraph of this Note, or at such other address as may have been designated
by notice to Promisor.
5. Incorporation by Reference and Conflicts. The above -referenced Rehabilitation Loan
Agreement, as the same may be amended in accordance with its terms, is by this reference,
incorporated herein, and made a part hereof, with like effect as though the same was set forth in
the text of this Note. If any dispute or issue shall arise by reason of any conflict or inconsistency
between the provisions of said Rehabilitation Loan Agreement, as the same may be amended,
and the provisions of this Note, the provisions of this Note shall be construed and enforced in
accordance with said agreement.
Under Oregon Law (Chapter 9.67 OR laws 1989), most agreements, promises, and commitments
made by us after October 3, 1989 concerning loans and other credit extensions which are not for
personal, family, or household purposes or secured solely by the Borrower's residence, must be in
writing, express consideration, and be signed by us to be enforceable.
HUMANE SOCIETY OF REDMOND, Promisor
By
Rachel A. Oxley, DVM, President
Attest:
Lisa D. T. Klemp, Secretary
Promissory Note (Accounts Payable Advances) Page 2 of 2 Pages
APPENDIX D
REHABILITATION LOAN AGREEMENT
Page 1 of 2
PROMISSORY NOTE
DATE: July 31, 2008
PROMISOR: The Humane Society of Redmond, an Oregon non-profit corporation
1355 NE Hemlock Ave
Redmond, Oregon 97756
PROMISEE: Deschutes County
1300 NW Wall St.
Bend, Oregon 97701
FOR VALUE RECEIVED, Promisor promises to pay to Promisee, at Promisee's order, the sum
of forty-one thousand six hundred and thirty-one dollars and 63/100 dollars ($41,631.63).
Principal shall be payable in one lump sum payment, which shall be due on or before January
31, 2010.
Borrower: The Humane Society of Redmond
Principal: $41,631.63
Interest rate: 0%
Term: eighteen months (18) months
Maturity Date: January 31, 2010
Payment check to: Deschutes County Finance Department
Deschutes Services Building
1300 N.W. Wall Street
Bend, Oregon 97701
1. Acceleration.
If Promisor abandons, terminates or ceases operations as an animal shelter on the
Property located at the above address, Promisee may exercise its option to accelerate
payment of this Note upon such occurrence or default by Promisor regardless of any prior
forbearance.
2. Disputes.
With respect to any dispute relating to this agreement, or in the event that a suit, action,
arbitration, or other proceeding of any nature whatsoever, including, without limitation,
any proceeding under the U.S. Bankruptcy Code and involving issues peculiar to federal
bankruptcy law, or any action seeking a declaration of rights, is instituted to interpret or
enforce this agreement or any provision of this agreement, the prevailing party shall be
entitled to recover from the losing party its reasonable attorneys' fees and all other fees,
costs, and expenses actually incurred and reasonably necessary in connection therewith,
as determined by the judge or arbitrator at trial or other proceeding, or on any appeal or
review, in addition to all other amounts provided by law.
Promissory Note - Redmond Humane Society 7-31-08
APPENDIX D
REHABILITATION LOAN AGREEMENT
Page 2 of 2
3. Waivers.
Presentment, notice of dishonor, and protest are hereby waived by all makers, sureties,
guarantors, and endorsers hereof.
Notices.
Any notice to Promisor provided for in this Note shall be given by mailing such notice by
certified mail addressed to Promisor at the property address stated, or to such other
address as Promisor may designate by notice to Promisee. Any notice to Promisee shall
be given by mailing such notice by certified mail, return receipt requested, to Promisee at
the address stated in the first paragraph of this Note, or at such other address as may
have been designated by notice to Promisor.
5. Additional Consideration
The parties agree that a portion of the funds are intended to be used by Promisee to
acquire audit services relating to the Redmond Humane Society. Promisee shall direct the
accounting firm performing such services to fumish a duplicate copy of any and all
reports, studies and audits to the Deschutes County Administrator simultaneously with
furnishing these reports, studies and audits to Promisee.
Under Oregon Law (Chapter 9.67 OR taws 1989), most agreements, promises, and
commitments made by us after October 3, 1989 concerning loans and other credit extensions
which are not for personal, family, or household purposes or secured solely by the Borrower's
residence, must be in writing, express consideration, and be signed by us to be enforceable.
PROMISOR: TH - REDMOND HUMANE SOCIETY
Promissory Note - Redmond Humane Society
7-31-08
APPENDIX E
REHABILITATION LOAN AGREEMENT
Page 1 of 2
DESCHUTES COUNTY
PROMISSORY NOTE
DATE:
PROMISOR:
PROMISEE:
November 7, 2008
Humane Society of Redmond
1355 NE Hemlock Avenue
Redmond, OR 97701
Deschutes County
1300 NW Wall
Bend, Oregon 97701
FOR VALUE RECEIVED, Promisor promises to pay to Promisee, at Promisee's order, the principal
sum of fifteen thousand dollars ($15,000), together with interest that begins accruing on November 7,
2008, on the unpaid balance from the date of this note, at the rate of three and six -tenth's percent
(3.60%) per annum. The entire unpaid principal balance together with accrued interest, if any, shall be
due and payable no later than May 7, 2010.
Borrower:
Principal:
Interest Rate:
Terre:
Monthly Payment:
Due Date:
Late Charge:
Maturity Date:
Payment checks to:
1. Disputes.
Humane Society of Redmond
$15,000
3.6%
18 months
$0
May 7, 2010
Deschutes County Finance Department
Deschutes Services Building
1340 N.W. Wail Street
Bend, Oregon 97701
With respect to any dispute relating to this agreement, or in the event that a suit, action,
arbitration, or other proceeding of any nature whatsoever, including, without limitation, any
proceeding under the U.S. Bankruptcy Code and involving issues peculiar to federal bankruptcy
law, or any action seeking a declaration of rights, is Instituted to interpret or enforce thls
agreement or any provision of this agreement, the prevailing party shall be entitled to recover
from the losing party its reasonable attorneys' fees and all other fees, costs, and expenses
actually incurred and reasonably necessary in connection therewith, as determined by the judge
or arbitrator at trial or other proceeding, or on any appeal or review, in addition to all other
amounts provided by law.
Page 1 of 2 - Promissory Note: Humane Society of Redmond
8.14apanCcnoacla and AproemenLa d,,* U uon•BOCC1200BViad, Humane Soddy Praniucry Nole.doc
Doc Zoog- I, I,
(Revised 11108)
APPENDIX E
REHABILITATION LOAN AGREEMENT
Page 2of2
2. Late Charge.
Promisor shall pay to Promisee a late charge of five percent (5%) of any annual Installment not
received by Promisee within ten (10) days after the installment is due.
3. Application of Payments.
Payment of any installment shall be first applied to late charges, then accrued interest to the
date of receipt thereof, and the balance, if any, to principal. The undersigned may also prepay
this Note in full or in part without penalty, but any such prepayment shall be first applied to late
fees, accrued Interest, and the balance, if any, to principal. However, any pre -payment shall not
excuse regular annual payments except with prior written approval of Deschutes County.
4. Waivers.
Presentment, notice of dishonor, and protest are hereby waived by all makers, sureties,
guarantors, and endorsers hereof. This note shall be the Joint and several obligation of all
makers, sureties, guarantors and endorsers, and shall be binding upon them and their
successors and assigns.
5. Notices.
Any notice to Promisor provided for In this Note shall be given by mailing such notice by certified
mail addressed to Promisor at the property address stated, or to such other address as
Promisor may designate by notice to Promisee. Any notice to Promisee shall be given by
mailing such notice by certified mail, retum receipt requested, to Promisee at the address stated
in the first paragraph of this Note, or at such other address as may have been designated by
notice to Promisor.
Under Oregon Law (Chapter 9.67 OR laws 1989), most agreements, promises, and commitments
made by us after October 3, 1989, concerning loans and other credit extensions which are not for
personal, family, or household purposes or secured solely by the Borrower's residence, must be in
writing, express consideration, and be signed by us to be enforceable.
PROMI a ' HU • CIETY OF REDMOND
By: I j am!' /J Refotor
11,11 /0-13
Date
Page 2 of 2 - Promissory Note: Humane Society of Redmond
6,ysp.tlOwm..cu sod AyeemanlslAdMNrt1tlon•S0001200B1Redrrond Humans $nclMy Promissory No e.do
(Revised 11/08)
APPENDIX F
REHABILITATION LOAN AGREEMENT
Page 1 of 3
OPTIONAL ADVANCE NOTE
DATE: December , 2008
PROMISOR: Humane Society of Redmond, an Oregon non-profit corporation.
1355 NE Hemlock Avenue
Redmond, OR 97756
PROMISEE: Deschutes County
1300 NW Wall Street
Bend, OR 97701
ON DEMAND, or if no demand is sooner delivered, then, on December 1, 2015, Promiso
promises to pay to Promisee, or order, the maximum principal sum of ONE HUNDRED
THOUSAND and no/100ths Dollars ($100,000.00), or so much of said principal sum as may be
now and at anytime hereafter be advanced and outstanding, in lawful money of the United State.
of America, together with interest on the unpaid and outstanding principal balance of such, anc
each of such, advances, computed at the rate of three and nine -tenths percent (3.9%) per annum
from and after the day and date of each such advance, until the principal amount thereof is paid in
full. Unless otherwise directed by or on behalf of Promisee, all payments shall be addressed or
delivered to the Deschutes County Finance Department, Deschutes Services Building, at the
above address.
On, and after, the date of this Note, until: (a) the maximum principal sum stated above shall
have been advanced, or (b) until such time as the entire amount of principal and interest shall be
due and payable in full according to the terms of this Note, or the terms and provisions of tha
certain Rehabilitation Loan Agreement between Promisor and Promisee dated and effective as of
December , 2008, as the same may be amended, if at all, in accordance with its terms
whichever first occurs, Promisor shall have the right and option to request, and Promisor shall
advance hereunder, such sum as may be stated in a written request for such advance.
countersigned on behalf of Promisee by its President and by its Treasurer, that is delivered to
Promisee in care of its County Administrator, at the address stated above.
Provided, however, that no such optional advance: (a) shall exceed the sum of eight thousand
three hundred thirty three dollars ($8,333.00) unless approved, in writing, by or on behalf of said
County Administrator; (b) may be requested, or delivered, more frequently than once in any period
of less than thirty (30) days' duration; (c) may be requested, or delivered, if, at the time of such
request, Promisee has failed to deliver any financial reports, schedules or other information
required of it under the said Rehabilitation Loan Agreement, or is otherwise in breach or default
under that, or any other "Related Document" described in the said Rehabilitation Loan Agreement
or (d) may be requested, or delivered, if the amount of any such advance would cause the total
principal amount advanced and then -outstanding and unpaid under this Note to exceed the
maximum principal sum stated above.
Promisor acknowledges, confirms and agrees that interest will be computed and may be
accrued, in accordance with the foregoing provisions of this Note, prior to the date payment is dues
and payable under this Note, or the above-mentioned Rehabilitation Loan Agreement. Promiso •
agrees that all sums paid to, or received or recovered by, Promisee on account of the
indebtedness evidenced by this Note shall first be applied to the payment and satisfaction c
Promisor's obligation for the payment of interest hereunder and then to reduction of the principal
amount of said indebtedness without regard to any contrary characterization or designation c'
Optional Advance Note (Working Capital Loans) Page 1 of 3 Page.
APPENDIX F
REHABILITATION LOAN AGREEMENT
Page 2 of 3
such payment or any portion thereof by or on behalf of the Promisor. Accordingly, unless anc
until such time as Promisor shall have paid an amount equal to all interest computed and accruec:
as aforesaid, no payments made by or on behalf of the Promisor shall be applied to reduce the
principal amounts payable hereunder.
All or any portion of the indebtedness evidenced hereby may be prepaid at any time withou°
penalty or surcharge of any kind or description.
1. Acceleration.
If any payment due on account of interest or principal payable hereunder is not paid when due
the whole sum of both principal and interest shall become immediately due and collectible at the
option of the Promisee. If Promisor abandons, terminates or ceases operations as an anima
shelter on the Property located at the above address, Promisee may exercise its option tc
accelerate payment of this Note upon such occurrence or default by Promisor regardless of any
prior forbearance. Otherwise, and in addition, Promisee may exercise its option to accelerate
payment of this Note if and when such right or option shall be afforded Promisee under the above
mentioned Rehabilitation Loan Agreement, as the same may be amended in accordance with its
terms.
2. Disputes. With respect to any dispute relating to this Note, or in the event that a suit, action
arbitration, or other proceeding of any nature whatsoever, including, without limitation, any
proceeding under the U.S. Bankruptcy Code and involving issues peculiar to federal bankruptcy
law, or any action seeking a declaration of rights, is instituted to interpret or enforce this Note or
any provision of this Note, the prevailing party shall be entitled to recover from the losing party its.
reasonable attorneys' fees and all other fees, costs, and expenses actually incurred anc
reasonably necessary in connection therewith, as determined by the judge or arbitrator at trial or
other proceeding, or on any appeal or review, in addition to all other amounts provided by law.
3. Waivers. Presentment, notice of dishonor, and protest are hereby waived by Promisor and by
all sureties, guarantors, and endorsers hereof.
4. Notices. Any notice to Promisor provided for in this Note shall be given by mailing such notice
by certified mail addressed to Promisor at the property address above -stated, or to such other
address as Promisor may designate by notice to Promisee. Any notice to Promisee shall be giver
by mailing such notice by certified mail, return receipt requested, to Promisee at the address
stated in the first paragraph of this Note, or at such other address as may have been designatec
by notice to Promisor.
5. Incorporation by Reference and Conflicts. The above -referenced Rehabilitation Loan
Agreement, as the same may be amended in accordance with its terms, is by this reference
incorporated herein, and made a part hereof, with like effect as though the same was set forth it
the text of this Note. If any dispute or issue shall arise by reason of any conflict or inconsistency
between the provisions of said Rehabilitation Loan Agreement, as the same may be amended
and the provisions of this Note, the provisions of this Note shall be construed and enforced in
accordance with said agreement.
Under Oregon Law (Chapter 9.67 OR laws 1989), most agreements, promises, and commitments
made by us after October 3, 1989 concerning loans and other credit extensions which are not fo:
personal, family, or household purposes or secured solely by the Borrower's residence, must be u
writing, express consideration, and be signed by us to be enforceable.
Optional Advance Note (Working Capital Loans) Page 2 of 3 Pages,
APPENDIX F
REHABILITATION LOAN AGREEMENT
Page 3 of 3
HUMANE SOCIETY OF REDMOND, Promisor
By
Rachel A. Oxley, DVM, President
Attest:
Lisa D. T. Klemp, Secretary
Optional Advance Note (Working Capital Loans) Page 3 of 3 Paget-.
After Recording Return To:
Mark E. Pilliod, Esq.
Deschutes County Counsel
1300 Wall Street, Ste. 200
Bend, OR 97701
Tax Statements To:
APPENDIX G
REHABILITATION LOAN AGREEMENT
Page 1 of 2
BARGAIN AND SALE DEED
Statutory Form
HUMANE SOCIETY OF REDMOND, an Oregon non-profit corporation, Grantor, conveys to
DESCHUTES COUNTY, a political subdivision of the State of Oregon, Grantee, all of Grantor's right,
title and in and to the following described real property:
Parcel Three (3) of Partition Plat 2001-29, Deschutes County, Oregon, TOGETHER WITH Parcel
"A" described hereon, and EXCEPTING THEREFROM Parcel "B" and Parcel "C" described hereon.
Parcel A:
Commencing at a 3 1/4 -inch aluminum cap monumenting the East quarter (1/4) corner of Sectioi
10, Township 15 South, Range 13 East of the Willamette Meridian, Deschutes County, Oregon, the
initial point; thence South 89°49'03" West, 1005.89 feet; thence North 00°14'47" West, 440.00 feet
to the North boundary of Parcel 3 of said Partition Plat 2001-29 and the point of beginning; thenca
South 89°40'56" West along the common boundary of said Parcel 3 and Parcel 2 of said Partitio
Plat, 318.72 feet to a 5/8 -inch rebar at the Northwest corner of said Parcel 3; thence Norti
00°14'47" West along the West boundary of said Parcel 2, 273.35 feet to a 3/4 -inch pipe; thence
North 89°49'03" East, 318.72 feet to a 3/4 -inch pipe; thence South 00°14'47" East, 273.34 feet to
the point of beginning.
Parcel B:
Commencing at a 3 1/4 -inch aluminum cap monumenting the East quarter (1/4) corner of Section
10, Township 15 South, Range 13 East of the Willamette Meridian, Deschutes County, Oregon, the
initial point; thence South 89°49'03" West, 1005.89 feet; thence North 00°14'47" West, 30.00 feet to
a 3/4 -inch pipe on the South boundary of Parcel 3 of Partition Plat No. 2001-29, and to the point of
beginning; thence along the boundary of said Parcel 3 as follows: North 89°49'03" East, 212.51 feet
to a 3/4 -inch pipe; thence North 00°15'12" West 410.01 feet to a 5/8 -inch rebar; thence South
89°48'56" West, 212.46 feet; thence leaving said Parcel 3 boundary South 00°14'47" East, 410.00
feet to the point of beginning.
Parcel C:
Commencing at the Northwest corner of Parcel 3 of Partition Plat No. 2001-29 (RMP -00-21 D), a
5/8 -inch rebar with yellow plastic cap marked "W&H PACIFIC", the initial point of this description;
thence North 00°14'47" West along the West line of the Southeast quarter of the Northeast quarter
(SE1/4NE1/4) of said Section 10, also being the West line of Parcel 2 of Partition Plat No. 2001-21,
a distance of 273.75 feet to a 3/4 -inch pipe with yellow plastic cap marked "POVEY & ASSOC.", the
true point of beginning of this description; thence North 89°49'03" East, along the North line of
Parcel "A" as shown on LLA04-12 (CS15978), a distance of 318.72 feet to a 3/4 -inch pipe on the
East line of said Parcel "A"; thence South 00°14'47" East along said East line, a distance of 83.38
BARGAIN & SALE DEED Page 1 Af 2
APPENDIX G
REHABILITATION LOAN AGREEMENT
Page 2 of 2
feet to a 5/8 -inch rebar; thence South 89°49'03" West, a distance of 318.72 feet to a 5/8 -inch reber
on the West line of Parcel 3 of Partition Plat 2001-29; thence North 00°14'47" West along said Wef.;t
line, a distance of 83.38 feet to the point of beginning.
The true consideration for this conveyance is $1.00 and other property or value given or promised wF!ich
is part of the consideration.
BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON TRANSFERRING FEE TITLE
SHOULD INQUIRE ABOUT THE PERSON'S RIGHTS, IF ANY, UNDER ORS 193.300, 195.301 AND 195.305 TO
195.336 AND SECTIONS 5 TO 11, CHAPTER 424, OREGON LAWS 2007. THIS INSTRUMENT DOES NOT
ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND
USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERE,ON
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 APPROVED U! -;ES
OF THE LOT OR PARCEL, TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST
PRACTICES, AS DEFINED IN ORS 30.930, AND TO INQUIRE ABOUT THE RIGHTS OF NEIGHBORING
PROPERTY OWNERS, IF ANY, UNDER ORS 195.300, 195.301 AND 195.305 TO 195.336 AND SECTIONS 5
TO 11, CHAPTER 424, OREGON LAWS 2007.
Dated this day of , 2008.
HUMANE SOCIETY OF REDMOND
By:
Rachel A. Oxley, DVM, President
STATE OF OREGON, County of )ss.
This instrument was acknowledged before me on
2008, by Rachel A. Oxley, DVM, acting in the capacity of the President of HUMANE SOCIETY OF
REDMOND, an Oregon non-profit corporation, in accordance with its Amended and Restated Bylaws
and in keeping with express authority conferred on her by official action or resolution of its Board of
Directors.
Notary Public for Oregon
My Commission Expires:
BARGAIN & SALE DEED Page 2 Af 2
REVIEWED
LEGAL COUNSEL
APPENDIX H
REHABILITATION LOAN AGREEMENT
Page 1 of 7
LEASE
This Lease, is made by and between DESCHUTES COUNTY ("Lessor"), and HUMANE SOCIETY
OF REDMOND, an Oregon non-profit corporation ("Lessee").
Lessor hereby leases to Lessee and Lessee takes from Lessor the "Premises" described as follows
All of the land, and all of the improvements now and hereafter situated on the real property
described in EXHIBIT A to this Lease and otherwise known as the premises and improvements
located at 1355 NE Hemlock Street, Redmond, Oregon 97756.
The parties agree that the terms of this Lease are as follows:
1. Term. The original term of this Lease shall be effective on the date, and at the time, fee title
in and to the Premises shall be vested in Lessor pursuant to the terms of that certain
Rehabilitation Loan Agreement ("RLA") entered into by and between the parties dated anc
effective as of December , 2008, and shall remain in effect until such time as: (a) fee
title in and to the Premises, or the "Shelter Parcel" (hereinafter described), shall be re-
conveyed by Lessor to Lessee pursuant to the provisions of the RLA, or otherwise, or (b
the Lessor shall terminate this Lease, and the Lessee's rights and interests in the Premises
arising hereunder, in accordance with the provisions of this Lease and/or the RLA
whichever first occurs.
2. Rent. Base rent shall be the sum of one dollar ($1.00) per year and shall be payable, ir
cash or immediately available funds, on or before the first day of January of each calendar
year included in the term of this Lease, commencing with the calendar year 2009.
Use of Premises. Lessee may use the Premises for purposes of maintaining and operatinc
an animal shelter that receives and holds animals from and on behalf of the Lessor and for
any other lawful or ancillary purposes permitted by, and not inconsistent with, the terms and
provisions of the RLA, all subject to obtaining any required permits and all other restrictions
and limitations on uses elsewhere stated in this Lease.
4. Restrictions on Use. In connection with the use of the Premises, Lessee shall:
a) Conform to all applicable laws and regulations affecting the Premises and correct a"
Lessee's own expense any failure of compliance created through Lessee's fault or by
reason of Lessee's use of the Premises. Lessee shall not be required to make any
structural changes to affect such compliance, unless such changes are required because of
Lessee's specific use.
b) Refrain from any use that would be unreasonably offensive to the Lessor, other tenants.
or owners or users of adjoining property, or any portion or portions thereof, or that would
tend to create a nuisance or damage the reputation of the Premises, or of any portion o
portions thereof.
APPENDIX H
REHABILITATION LOAN AGREEMENT
Page 2 of 7
c) Refrain from making any unlawful use, or offensive use of the Premises inconsistent with
any of the purposes described in paragraph 3 above, or to suffer or permit any waste or strip
thereof.
d) Exercise diligence in protecting the land and improvements comprising the Premises
above described that Lessee has a continuing right to use and occupy pursuant to this
Lease.
e) Be responsible for removing any liens placed on the Premises, or any portion thereof,
arising as a result of Lessee's use or occupancy.
5. Lessee's Duty to Repair and Maintain Premises. The following shall be the responsibility of
the Lessee, provided, however, Lessee shall not be required to make structural repairs that
would place the Premises in a better condition than at the commencement of this Lease:
a) Lessee shall, at its expense, make any repairs necessitated by the negligence of Lessee,
its agents, residents, employees, or invitees.
b) Lessee shall, at its expense, make repairs or alterations required in order for it to comply
with the provisions of paragraphs 3 and 4 above, or of either of said paragraphs.
c) Lessee shall, at its expense, maintain and repair all buildings and other structures,
foundations, exterior walls, roofs, doors and windows, emergency lighting, fire suppression
systems, sidewalks, fences, other enclosures, and parking areas located on the Premises
that the Lessee has a continuing right to use and occupy from time -to -time pursuant to this
Lease so as to maintain the Premises in a hazard free condition, and shall repair or replace,
if necessary and at Lessee's sole expense, the heating, air conditioning, plumbing, electrical,
and lighting systems in the Premises, obtaining required permits and inspections from code
enforcement authorities, and shall keep the Premises in good repair.
d) Lessee shall, at its expense, take good care of the interior of the buildings located on the
Premises that it has the right to use and occupy from time -to -time under this Lease, and, if
otherwise required to do so, at the expiration of the term, surrender the Premises in as good
condition as at the commencement of this Lease, excepting only reasonable wear.
permitted alterations, and damage caused by fire or other casualty that Lessee is not
otherwise required to repair or restore according to any provisions elsewhere stated in this
Lease.
e) If necessary, Lessee shall, at its expense, make exterior accessibility improvements to
those portions of the Premises that it has a continuing right to use and occupy pursuant to
this Lease, in order to ensure such portions of the Premises are accessible per guidelines
established by the Department of Justice pursuant to the Americans with Disabilities Act
f) Should Lessee fail to maintain the Premises in accordance with above requirements, and
after reasonable advance notice to Lessee of its intent to do so, Lessor may contract for the
labor, equipment, and material necessary to bring the Premises within those requirements
and Lessor's actual costs incurred in doing so shall bear interest at the rate of nine percem
(9%) per annum from the date expended by Lessor and shall be payable on demand. Suck.
action by Lessor shall not constitute a waiver of any right or remedy which Lessor may have
on account of Lessee's default.
Document No. Page 2
APPENDIX H
REHABILITATION LOAN AGREEMENT
Page 3 of 7
6. Services and Utilities. Lessee shall, at its expense, cause the following -described services
and utilities to be furnished to those portions of the Premises that Lessee has the continuing
right to use and occupy, from time -to -time, under this Lease: water, sanitary sewer,
electricity, natural gas, trash removal, landscape maintenance, telecommunications,
janitorial services, and sidewalks, parking lot and driveway maintenance including snow
removal.
7. Taxes and Assessments. Lessee shall, at its expense, promptly pay and satisfy any and all
ad valorem property taxes and other assessments now or hereafter payable by the Lessor or
Lessee, if any, assessed or levied by any governmental authority or jurisdiction upon those
portions of the Premises that Lessee has a continuing right to use and occupy from time -to -
time under this Lease.
8. Liens.
a) Except with respect to activities for which the Lessor is responsible, the Lessee shall pay
as due all claims for work done on and for services rendered or material furnished to the
Premises and shall keep the same free from any liens. If Lessee fails to pay any such
claims or to discharge any lien, Lessor may do so and collect the cost from Lessee. Any
amount so expended shall bear interest at the rate of nine percent (9%) per annum from the
date expended by Lessor and shall be payable on demand. Such action by Lessor shall not
constitute a waiver of any right or remedy which Lessor may have on account of Lessee'
default.
b) Lessee may withhold payment of any claim in connection with a good faith dispute over
the obligation to pay, so long as Lessor's property interests are not jeopardized. If a lien is
filed and perfected as a result of nonpayment, Lessee shall, within thirty (30) days after
knowledge of the filing, secure the discharge of the lien or deposit with Lessor cash or a
sufficient corporate surety bond or other surety satisfactory to Lessor in an amount sufficient
to discharge the lien plus any costs, attorney fees and other charges that could accrue as a
result of a foreclosure or sale under a lien.
9. Insurance.
a) It is expressly understood that Lessor shall not be responsible for carrying insurance on
any property owned by Lessee.
b) Lessee shall, at its expense, carry fire and casualty insurance on Lessee's persona
property on the Premises.
c) Lessor shall, at its expense, carry fire and casualty insurance, or self -insure, against loss
or damage by fire or other casualty, only on the buildings and other insurable structures and
improvements located on the Premises
d) Lessee shall, at its expense, carry commercial general liability insurance, on ar
occurrence basis, with a combined single limit of not less than $500,000 each occurrence
with an annual aggregate limit of $1,000,000. Lessee shall provide Lessor with a certificat(
of insurance, as well as an endorsement, naming Deschutes County, its officers, agents
and employees and volunteers as an additional insured. There shall be no cancellation
termination, material change, or reduction of limits of the insurance coverage during the tern
of this Lease.
Document No. Page 3
APPENDIX H
REHABILITATION LOAN AGREEMENT
Page 4 of 7
e) Lessee shall provide to Lessor proof of workers compensation insurance.
f) Lessor and Lessee shall each be responsible, and indemnify the other for, the negligent
and wrongful acts of their employees and invitees. Lessor's liability exposure may be
restricted by the Oregon State Constitution, Article XI, and Oregon Revised Statutes 30.260
through 30.300, the Oregon Tort Claims Act.
10. Casualty Damage. If the Premises or improvements thereon are damaged or destroyed by
fire or other casualty to such a degree that the Premises are unusable for the purposes
leased, and if repairs cannot reasonably by made within ninety (90) days, Lessee may elect
to cancel this Lease. Lessor shall in all cases promptly repair the damage or ascertain
whether repairs can be made within ninety (90) days, and shall promptly notify Lessee of the
time required to complete the necessary repairs or reconstruction. If Lessor's estimate for
repair is greater than ninety (90) days, then Lessee, upon receiving said estimate will have
twenty (20) days after such notice in which to cancel this Lease. Following damage, and
including any period of repair, Lessee's rental obligation shall be reduced to the extent the
Premises cannot reasonably be used by Lessee.
11. Lessor's Right to Partition Premises and Partial Termination of Lease. Consistent with the
RLA, at any time after June 30, 2010, Lessor shall have, and hereby reserves, a right and
option to, at its expense, apply to the City of Redmond, and to any other governmental
jurisdiction having the right or authority to approve or condition the same, to partition or
otherwise divide or subdivide, the land described in EXHIBIT A into two separate, legally
separate, lots or parcels. One of which is now the site of the animal shelter and related
improvements located on the southerly portion of the Premises, and the other is now the site
of the so-called "Event Center" building, its related improvements, and some unimproved
land, all located on the northerly portion of the Premises, north of a line essentially parallel
with, and approximately 300 feet north of, the southernmost boundary of the land described
in EXHIBIT A.
a) For purposes of this Lease, the southerly portion of the Premises generally described
above located south of the line described immediately above, is referred to as the "Shelter
Parcel." And, for purposes of this Lease, the northerly portion of the Premises, located
north of the line last described immediately above, is referred to as the "EC Parcel."
b) If, during the term of this Lease, and consistent with the RLA, Lessor shall determine tc
exercise, and effectively exercises, its right and option to apply for, and obtains, partition of
the Premises relating in creation of a separate, "legal lot," and Shelter Parcel, and a.
separate, "legal lot, and EC Parcel, then, upon recording of the final partition plat or survey
of the land described in EXHIBIT A that lawfully effects said partition, the terms and
provisions, and the rights and obligations of the parties, set forth or described in this Lease
shall terminate, rendered null and void, of no further force or effect whatsoever, but only as
to the EC Parcel, and all the land, and all the improvements now or hereafter located on, or
incorporated in and a part of the real property, included in the EC Parcel.
c) And, under the circumstances described immediately above, all of the terms an(
provisions, and all of the rights and obligations of the parties set forth or described in thi!
Lease, shall remain in full force and effect, but only as to the Shelter Parcel, and all of th
land, and all of the improvements and other property now or hereafter located on, o
incorporated in and a part of the real property included in he Shelter Parcel.
Document No. Page 4
APPENDIX H
REHABILITATION LOAN AGREEMENT
Page 5 of 7
d) Accordingly, any provisions of this Lease that would otherwise pertain to the Premises
generally as first described in this Lease, shall, under the circumstances described in
subparagraph 11.b) of this Lease, no longer bind, nor inure to the benefit of, the parties, or
either one of the parties, except with respect to the land and improvements then and
thereafter comprising the Shelter Parcel; the Lessee's continuing use and occupancy
thereof, and Lessee's right to obtain, and Lessor's obligation to effect, re -conveyance of the
Shelter Parcel, and termination of this Lease, in accordance with the RLA, all with like effect
as though this Lease never pertained to the EC Parcel.
12. Surrender of Premises. Unless, at the time, Lessee has already obtained, or is then entitled
to, re -conveyance of the Premises (or, if then applicable, the Shelter Parcel only), upon
abandonment, termination, revocation or cancellation of this Lease, or the surrender of
whatever portion of the Premises the Lessee would otherwise then be entitled to use and
occupy under this Lease, the Lessee shall surrender the said Premises to Lessor in the
same condition they were in on commencement of the term above -stated, fair wear and tear
excepted. Provided, however, nothing in this Lease shall be construed as to relieve Lessee
of Lessee's affirmative obligation to surrender said Premises in a condition which complies
with all local, state or federal environmental laws, regulations and ordersapplicable at the
time of surrender that was caused by Lessee or occurred during the term of this lease.
Upon Lessor's written approval, Lessee may leave site improvements authorized by any lanc
use or building permit. Lessee's obligation to observe and perform this covenant shall
survive the expiration or the termination of the Lease.
13. Nonwaiver. Waiver by either party of strict performance of any provision of this Lease shal
not be a waiver of or prejudice of the party's right to require strict performance of the same
provision in the future or of any other provision.
14. Default.
a) Neither party shall be in default under this Lease until written notice ofits unperformed
obligation has been given and that obligation remains unperformed after notice for fifteen
(15) days in the case of the payment orforthirty (30) days in the case of other obligations. It
the obligation cannot be performed within the thirty -day period, there shall be no default it
the responsible party commences a good faith effort to perform the obligation within such
period and continues diligently to complete performance.
b) In case of default, the non -defaulting party may terminate this Lease with thirty (30) days
notice in writing to the defaulting party, shall be entitled to recover damages or any other
remedy provided by applicable law.
c) A non -defaulting party may, in addition, and without waiving any other remedy otherwise
available at law or in equity, elect to perform the defaulting party's obligation, in which case
the costs incurred by such party in order to effect such performance shall be immediately
recoverable from the defaulting party plus interest at the legal rate for a money judgment. IF
Lessee makes any such expenditures as the non -defaulting party, those expenditures may
in the Lessee's sole discretion, be applied to rent payments(s) or otherwise offset against
any other monetary obligation(s) of Lessee to Lessor
15. Notices. Notices between the parties shall be in writing, effective when personally delivere(
to the address specified herein, or if mailed, effective three (3) weekday banking day,;
Document No. Page 5
APPENDIX H
REHABILITATION LOAN AGREEMENT
Page 6 of 7
following the day and date of mailing, by certified or registered US Mail,to the address for
such party specified below or such other address as either party may specify by notice to the
other:
Lessor: Deschutes County
Attn: Susan Ross, Director of Property and Facilities
14 NW Kearney St
Bend, Oregon 97701
Phone: (541) 383-6713 Fax: (541) 317-3168
Lessee: Humane Society of Redmond
Attn: President
1355 NE Hemlock Street
P.O. Box 1404
Redmond, OR 97756
16. Assignment. Lessee shall not assign or sub -rent the Premises without the prior written
consent of the Lessor, which consent shall not be unreasonably conditioned, delayed or
denied.
17. Holdover. If Lessee holds over after the end of the term, a tenancy from month to month
shall be created.
18. Attorneys' Fees. In the event a suit or action of any kind is instituted on behalf of either party
to obtain performance under this Lease or to enforce any rights or obligations arising from
this Lease, each party will be responsible for paying its own attorney fees.
19. Lessor's Covenants. Lessor covenants that it has the right to make this Lease; that
possession of the Premises will be delivered to Lessee free of other tenants and of
conflicting claims; that the use of the Premises by Lessee for the specific usesset forth in
paragraph 3 of this Lease is not in violation of any federal, state or local statute, regulation or
ordinance, including the acknowledged comprehensive land use plans and regulations of the
city and county in which Premises are located; and that on paying the rent and performing its
covenants of this Lease, Lessee may enjoy the rights granted by this Lease free from rightful
interference by any third party.
20. Authority. The signatories to this agreement covenant that they possess the legal authority
to bind their respective principals to the terms, provisions and obligations contained within
this agreement.
21. MERGER. THIS LEASE, TOGETHER WITH THE ABOVE-MENTIONED REHABILITATION
LOAN AGREEMENT ("RLA"), AND THE "RELATED AGREEMENTS" THEREIN DEFINED
OR DESCRIBED, ALL OF WHICH ARE, BY THIS REFERENCE, INCORPORATED BY
REFERENCE HEREIN TO THE EXTENT THE SAME APPLY TO OR ADDRESS ANY
MATTERS OR CIRCUMSTANCES SUBJECT OF OR DESCRIBED IN THIS LEASE
CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE PARTIES WITH RESPECT
TO THE SUBJECT MATTER OF THIS LEASE. NO WAIVER, CONSENT, MODIFICATION
OR CHANGE OF TERMS OF THIS LEASE SHALL BIND EITHER PARTY UNLESS
WRITING AND SIGNED ON BEHALF OF BOTH PARTIES. SUCH WAIVER, CONSENT
MODIFICATION OR CHANGE, IF MADE, SHALL BE EFFECTIVE ONLY IN THE SPECIFIC
INSTANCE AND FOR THE SPECIFIC PURPOSE GIVEN. LESSOR, BY THE SIGNATURE
Document No. Page 6
APPENDIX H
REHABILITATION LOAN AGREEMENT
Page 7 of 7
BELOW OF ITS AUTHORIZED REPRESENTATIVE, HEREBY REPRESENTS AND
ACKNOWLEDGES THAT LESSOR HAS READ THIS LEASE, UNDERSTANDS IT, AND
AGREES TO BE BOUND BY ITS TERMS AND CONDITIONS.
22. Advice of Counsel. The parties represent and warrant that they have carefully read this
Lease, know the contents hereof, and that this Lease was voluntarily executed after
consultation with their respective legal counsel. The parties and their respective legal
counsel have participated in, and had an equal opportunity to participate in, the drafting of
this Agreement. No ambiguities or disputed provisions of this Lease shall be construed
against any party based on a claim that the party drafted the ambiguous language.
DATED this day of , 2008
LESSOR:
DESCHUTES COUNTY, OREGON
By:
ATTEST:
Recording Secretary
LESSEE:
DAVE KANNER, COUNTY ADMINISTRATOR
HUMANE SOCIETY OF REDMOND
By:
RACHEL A. OXLEY, DVM, PRESIDENT
ATTEST:
Lisa D.T. Klemp, Corporate Secretary
Document No. Page 7
APPENDIX H, EXHIBIT A
REHABILITATION LOAN AGREEMENT
LEASE "EXHIBIT A"
DESCHUTES COUNTY ("Lessor")
And
HUMANE SOCIETY OF REDMOND ("Lessee")
LEGAL DESCRIPTION OF LEASED PREMISES
Parcel Three (3) of Partition Plat 2001-29, Deschutes County, Oregon, TOGETHER
WITH Parcel "A" described hereon, and EXCEPTING THEREFROM Parcel "B" and
Parcel "C" described hereon.
Parcel A:
Commencing at a 3 1/4 -inch aluminum cap monumenting the East quarter (1/4)
corner of Section 10, Township 15 South, Range 13 East of the Willamette Meridian,
Deschutes County, Oregon, the initial point; thence South 89°49'03" West, 1005.89
feet; thence North 00°14'47" West, 440.00 feet to the North boundary of Parcel 3 of
said Partition Plat 2001-29 and the point of beginning; thence South 89°40'56" West
along the common boundary of said Parcel 3 and Parcel 2 of said Partition Plat,
318.72 feet to a 5/8 -inch rebar at the Northwest corner of said Parcel 3; thence
North 00°14'47" West along the West boundary of said Parcel 2, 273.35 feet to a
3/4 -inch pipe; thence North 89°49'03" East, 318.72 feet to a 3/4 -inch pipe; thence
South 00°14'47" East, 273.34 feet to the point of beginning.
Parcel B:
Commencing at a 3 1/4 -inch aluminum cap monumenting the East quarter (1/4)
corner of Section 10, Township 15 South, Range 13 East of the Willamette Meridian,
Deschutes County, Oregon, the initial point; thence South 89°49'03" West, 1005.89
feet; thence North 00°14'47" West, 30.00 feet to a 3/4 -inch pipe on the South
boundary of Parcel 3 of Partition Plat No. 2001-29, and to the point of beginning;
thence along the boundary of said Parcel 3 as follows: North 89°49'03" East, 212.51
feet to a 3/4 -inch pipe; thence North 00°15'12" West 410.01 feet to a 5/8 -inch rebar;
thence South 89°48'56" West, 212.46 feet; thence leaving said Parcel 3 boundary
South 00°14'47" East, 410.00 feet to the point of beginning.
Parcel C:
Commencing at the Northwest corner of Parcel 3 of Partition Plat No. 2001-29
(RMP -00-21 D), a 5/8 -inch rebar with yellow plastic cap marked "W&H PACIFIC", the
initial point of this description; thence North 00°14'47" West along the West line of
the Southeast quarter of the Northeast quarter (SE1/4NE1/4) of said Section 10,
also being the West line of Parcel 2 of Partition Plat No. 2001-29, a distance of
273.75 feet to a 3/4 -inch pipe with yellow plastic cap marked "POVEY & ASSOC.",
the true point of beginning of this description; thence North 89°49'03" East, along the
North line of Parcel "A" as shown on LLA04-12 (CS15978), a distance of 318.72 feet
to a 3/4 -inch pipe on the East line of said Parcel "A"; thence South 00°14'47" East
along said East line, a distance of 83.38 feet to a 5/8 -inch rebar; thence South
89°49'03" West, a distance of 318.72 feet to a 5/8 -inch rebar on the West line of
Parcel 3 of Partition Plat 2001-29; thence North 00°14'47" West along said West
line, a distance of 83.38 feet to the point of beginning.
END OF LEGAL DESCRIPTION
LEASE EXHIBIT A Page 1 of 1
1111111111111111111111111111111111
APPENDIX I
REHABILITATION LOAN AGREEMENT
Page 1 of 1
UCC FINANCING STATEMENT AMENDMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGEMENT TO: (Name and Address)
IOUNTY COUNSEL
DESCHUTES COUNTY
1300 NW Wall St. Suite 200
Bend, OR 97701
THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
1 a. INITIAL FINANCING STATEMENT FILE # 1 b. This FINANCING STATEMENT AMENDMENT is
7868314 ❑ to be filed [for record] (or record) in the
REAL ESTATE RECORDS.
2. El TERMINATION: Effectiveness of the Financing Statement identified above is terminated with resped to security Interest(s) of the Secured Party authorizing this Termination Statement.
CONTINUATION: Effectiveness of the Financing Statement Identified above with respect to security interest(s) of the Secured Party authorizing this Continuation Statement is continued
for the additional period provided by applicable law.
4. ASSIGNMENT: (full or partial): Give name of assignee in item 7a or 7b and addreaa of assignee in item 7c; and also give name of assignor In item 9.
5. AMENDMENT (PARTY INFORMATION): This Amendment affects ❑ Debtor or 0 Secured Party of record. Check only one of these two boxes.
Also check one of the following three boxes and provide appropriate information in item 6 and/or 7.
❑ CHANGE name and/or address: Give current record name In Mem ea or 6b; also give new
name (if name change) In item 75 or 7b and/or new address (M address change) in Mem 70.
0 DELETE name: Give score name 0 ADD name: Complete Item 7a or7b, and also item
to be deleted In tem 6a or eb. 7c: also complete Mama 7d -7g (d applicable).
6. CURRENT RECORD INFORMATION:
6a. ORGANIZATION'S NAME
OR
6b. INDIVIDUALS LAST NAME
FIRST NAME
MIDDLE NAME
SUFFIX
7 CHANGED (NEW) OR ADDED INFORMATION:
OR
7a. ORGANIZATION'S NAME
7b. INDIVIDUAL'S LAST NAME
FIRST NAME
MIDDLE NAME
SUFFIX
7c. MAILING ADDRESS
CITY
STATE
POSTAL CODE
COUNTRY
7d.
AMYL. INFO RE
ORGANIZATION
DEBTOR
7e. TYPE OF ORGANIZATION
7f. JURISDICTION OF ORGANIZATION
7g. ORGANIZATIONAL ID #, if any
8. AMENDMENT (COLLATERAL CHANGE): check onlyOne box.
Describe collateral ❑ deleted or 0 added, or give entire 0 restated collateral description, or describe collateral 0 assigned.
0 NONE;
9 -NAME OF SECURED PARTY of RECORD AUTHORIZING THIS AMENDMENT (lame of assignor, If this is an Assignment). It thla Is an Amendment authorized 09 a debtor which adds
col ateral or adds the authorizing Debtor, or If thin ie a Tarnonation suthorizso by a Debtor, check here ❑ and enter name of DEBTOR authorizing Oris Amendment
00
9a. ORGANIZATION'S NAME
COMMUNITY FIRST BANK, 821 SW 6TH ST., REDMOND, OR, 97767
9b. INDIVIDUALS LAST NAME
FIRST NAME
MIDDLE NAME
SUFFIX
10. OPTIONAL FILER REFERENCE DATA
650000658
404 FILING OFFICE COPY— NATIONAL UCC FINANCING STATEMENT AMENDMENT (FORM UCC3) (REV. 8/02)
APPENDIX J
REHABILITATION LOAN AGREEMENT
Page 1 of 2
CERTIFICATE OF RESOLUTION
The undersigned, Secretary of the HUMANE SOCIETY OF REDMOND, an Oregon
non-profit corporation ("Corporation"), does hereby certify that the following is a full, true
and correct copy of a Resolution duly and regularly adopted at a special meeting of the
Board of Directors of the Corporation, duly called and held in accordance with the
Bylaws, on the day of December, 2008, at which meeting a quorum was present:
RESOLVED, that this Corporation shall execute, enter into, and fully, faithfully, and
to the best of its ability, observe and perform each and all of duties and obligations on its
part to observed or performed under, that certain Rehabilitation Loan Agreement
between this Corporation and Deschutes County, a political subdivision of the state of
Oregon ("County"), in the form annexed to this Resolution, and by this reference
incorporated herein (the "RLA"), as well as:
(a) the form of Promissory Note in the principal amount of $1,000,000.00
incorporated in the RLA as "Appendix B" thereof;
(b) the form of Promissory Note in a principal amount equal to the sum of all
amounts disbursed by the County for purposes of obtaining release and satisfaction of
the claims of this Corporation's unsecured creditors as contemplated and described in
subsection 1.2, and elsewhere, in the RLA and incorporated therein as "Appendix C"
thereof;
(c) the form of Optional Advance Note in the maximum principal amount of
$100,000.00 incorporated in the RLA as "Appendix F" thereof;
(d) the form of Bargain and Sale Deed incorporated in the RLA as "Appendix G"
thereof;
(e) the final and approved form of agreement to be entered into between the
County, the Trustee of the so-called "Teater Trust" and this Corporation, contemplated
and described in subsection 2.3, and elsewhere in the RLA, whereby any principal trust
distributions that would otherwise be made to this Corporation shall be made to the
County as long as, and to the extent that, this Corporation remains indebted to the
County;
(f) whatever agreements or documents are necessary to effect assignment to the
County of all of whatever net distributions may be forthcoming out of the estate of Essie
B. Schultz, Deceased, that would otherwise be distributed to this Corporation, if any, as
contemplated and described in subsection 2.4 of the RLA;
(g) the form of Lease between the County and this Corporation incorporated in the
RLA as "Appendix H" thereof;
(h) the form of certificate of this Resolution as described in subsection 4.1(d) of the
RLA and incorporated therein as "Appendix J" thereof;
(i) the form of Memorandum of Contract pertaining to the RLA that is described in
subsection 4.1(g) of the RLA and incorporated therein as "Appendix K" thereof;
(j) the form of Memorandum of Lease that is also described in subsection 4.1(g) of
the RLA and incorporated therein as "Appendix L" thereof, together with
(k) any and all additional instruments, documents and instructions that may, in the
opinion of this Corporation's legal counsel, be necessary or convenient for purposes of
closing and carrying out the transactions subject of the RLA,
Certificate of Resolution Page 1 of 2
APPENDIX J
REHABILITATION LOAN AGREEMENT
Page 2 of 2
and it is
FURTHER RESOLVED, that the duly elected and acting President of this
Corporation, or in the event of his or her absence, inability or unwillingness, to do so, the
duly elected and acting Vice President of this Corporation, shall be, and is hereby,
authorized and empowered to execute and deliver in the name of this Corporation, any
and all of the agreements, documents, instruments and instructions, described in the
foregoing paragraph of this Resolution, as well as any future documents or instruments
that may be necessary or convenient in order to effect performance on the part of this
Corporation of any duty or obligation on its part to be performed in order to effect full,
literal and timely performance of each and all of its duties and obligations described in
and contemplated by, the several terms and provisions of the RLA and of all of the
"Related Documents" described in section 10 of the RLA, as the same, or any of their
number, may hereafter be amended, supplements or otherwise modified according to
their terms,
and it is
FURTHER RESOLVED, that for purposes of the foregoing provisions of this
Resolution, and until her successor is duly elected and qualified, the elected and acting
President of this Corporation is Rachel A. Oxley, DVM, and that she shall execute and
deliver all agreements, documents, instruments, as well as any instructions not
otherwise provided by counsel for this Corporation, for purposes of closing and
executing the transactions subject of the RLA,
and it is
FURTHER RESOLVED, that the Secretary of this Corporation be and is hereby
authorized and directed to deliver to the County, and to any escrow agent appointed to
assist in closing any transaction(s) subject of the RLA, a copy of this Resolution,
properly certified in evidence of the authority of said persons to make, execute and
deliver said agreements, documents, instruments and instructions, for and on behalf of
this Corporation and to bind this Corporation to performance of each and every
obligation on its part to be performed thereunder.
IN WITNESS WHEREOF, I have signed this instrument, in my capacity as the duly
elected and acting Secretary of the Humane Society of Redmond on this day
of December, 2008.
Lisa D.T. Klemp, Corporate Secretary
Certificate of Resolution Page 2 of 2
After Recording Return To:
Mark E. Pilliod, Esq.
Deschutes County Counsel
1300 Wall Street, Ste. 200
Bend, OR 97701
APPENDIX K
REHABILITATION LOAN AGREEMENT
Page 1 of 2
MEMORANDUM OF CONTRACT
[Grantor and Grantee]
KNOW ALL MEN BY THESE PRESENTS, that by means of that certain Bargain And Sale
Deed recorded , 2008, as Recorder's Document/Fee No. 2008-
, Official Records of Deschutes County, Oregon, HUMANE SOCIETY OF
REDMOND, an Oregon non-profit corporation, Grantor, conveyed to DESCHUTES COUNTY, a
political subdivision of the State of Oregon, Grantee, the following -described real property:
Parcel Three (3) of Partition Plat 2001-29, Deschutes County, Oregon, TOGETHER WITH Parcel "A"
described hereon, and EXCEPTING THEREFROM Parcel "B" and Parcel "C" described hereon.
Parcel A:
Commencing at a 3 1/4 -inch aluminum cap monumenting the East quarter (1/4) corner of Section 10,
Township 15 South, Range 13 East of the Willamette Meridian, Deschutes County, Oregon, the initial
point; thence South 89°49'03" West, 1005.89 feet; thence North 00°14'47" West, 440.00 feet to the North
boundary of Parcel 3 of said Partition Plat 2001-29 and the point of beginning; thence South 89°40'56"
West along the common boundary of said Parcel 3 and Parcel 2 of said Partition Plat, 318.72 feet to a 5/8 -
inch rebar at the Northwest corner of said Parcel 3; thence North 00°14'47" West along the West boundary
of said Parcel 2, 273.35 feet to a 3/4 -inch pipe; thence North 89°49'03" East, 318.72 feet to a 3/4 -inch
pipe; thence South 00°14'47" East, 273.34 feet to the point of beginning.
Parcel B:
Commencing at a 3 1/4 -inch aluminum cap monumenting the East quarter (1/4) corner of Section 10,
Township 15 South, Range 13 East of the Willamette Meridian, Deschutes County, Oregon, the initial
point; thence South 89°49'03" West, 1005.89 feet; thence North 00°14'47" West, 30.00 feet to a 3/4 -inch
pipe on the South boundary of Parcel 3 of Partition Plat No. 2001-29, and to the point of beginning; thence
along the boundary of said Parcel 3 as follows: North 89°49'03" East, 212.51 feet to a 3/4 -inch pipe;
thence North 00°15'12" West 410.01 feet to a 5/8 -inch rebar; thence South 89°48'56" West, 212.46 feet;
thence leaving said Parcel 3 boundary South 00°14'47" East, 410.00 feet to the point of beginning.
Parcel C:
Commencing at the Northwest corner of Parcel 3 of Partition Plat No. 2001-29 (RMP -00-21D), a 5/8 -inch
rebar with yellow plastic cap marked "W&H PACIFIC", the initial point of this description; thence North
00°14'47" West along the West line of the Southeast quarter of the Northeast quarter (SE1/4NE1/4) of said
Section 10, also being the West line of Parcel 2 of Partition Plat No. 2001-29, a distance of 273.75 feet to
a 3/4 -inch pipe with yellow plastic cap marked "POVEY & ASSOC.", the true point of beginning of this
description; thence North 89°49'03" East, along the North line of Parcel "A" as shown on LLA04-12
(CS15978), a distance of 318.72 feet to a 3/4 -inch pipe on the East line of said Parcel "A"; thence South
00°14'47" East along said East line, a distance of 83.38 feet to a 5/8 -inch rebar; thence South 89°49'03"
West, a distance of 318.72 feet to a 5/8 -inch rebar on the West line of Parcel 3 of Partition Plat 2001-29;
thence North 00°14'47" West along said West line, a distance of 83.38 feet to the point of beginning.
Memorandum of Contract [Grantor and Grantee] Page 1 of 2
APPENDIX K
REHABILITATION LOAN AGREEMENT
Page 2 of 2
all in accordance with, and pursuant to, the terms and provisions of a certain Rehabilitation
Loan Agreement, made and entered into by and among the said Grantor and Grantee, dated
and effective December , 2008.
The above-mentioned Rehabilitation Loan Agreement sets forth and contains a number of
terms and provisions affecting the rights and obligations of the Grantor and the Grantee with
respect to the future use, occupancy, development, and transfer of interests in and affecting, the
above-described real property and any improvements now, or hereafter, situated thereon.
ALL PERSONS now or hereafter interested in acquiring, or having or acquiring, any interest
in the above-described property, may inquire with respect to the content, form, provisions, or
effects, of the and/or the above-described Rehabilitation Loan Agreement, insofar as said
property is, or may be, affected thereby, by directing a request, in writing, setting forth with
particularity the nature of the interest of such persons in said property, and the lawful purpose or
purposes for such inquiry, to County Administrator, Deschutes County,1300 Wall Street, Suite
200, Bend, OR 97701.
IN WITNESS WHEREOF, the parties have caused this Memorandum of Contract to be signed
and acknowledged effective as of this _ day of December, 2008.
HUMANE SOCIETY OF REDMOND DESCHUTES COUNTY
By By
Rachel A. Oxley, DVM, President Dave Kanner, County Administrator
State of Oregon, County of }ss.
The foregoing instrument was acknowledged before me on
2008, by RACHEL A. OXLEY, DVM, as President of the HUMANE SOCIETY OF OREGON, an
Oregon non-profit corporation.
Notary Public for Oregon
My commission expires: , 20
State of Oregon, County of }ss.
The foregoing instrument was acknowledged before me on
2008, by DAVE KANNER, as County Administrator of and for DESCHUTES COUNTY, a political
subdivision of the State of Oregon.
Notary Public for Oregon
My commission expires: , 20
Memorandum of Contract [Grantor and Grantee] Page 2 of 2
After Recording Return To:
Mark E. Pilliod, Esq.
Deschutes County Counsel
1300 Wall Street, Ste. 200
Bend, OR 97701
APPENDIX L
REHABILITATION LOAN AGREEMENT
Page 1 of 2
MEMORANDUM OF LEASE
KNOW ALL MEN BY THESE PRESENTS, that effective the day of December, 2008,
DESCHUTES COUNTY, as the "Lessor" named therein, and HUMANE SOCIETY OF
REDMOND, as the "Lessee" named therein, made and entered into a certain Lease pertaining
to the real property and all subsequent improvements incorporated in said real property, therein
more particularly described as:
Parcel Three (3) of Partition Plat 2001-29, Deschutes County, Oregon, TOGETHER WITH Parcel "A"
described hereon, and EXCEPTING THEREFROM Parcel "B" and Parcel "C" described hereon.
Parcel A:
Commencing at a 3 1/4 -inch aluminum cap monumenting the East quarter (114) corner of Section 10,
Township 15 South, Range 13 East of the Willamette Meridian, Deschutes County, Oregon, the initial
point; thence South 89°49'03" West, 1005.89 feet; thence North 00°14'47" West, 440.00 feet to the North
boundary of Parcel 3 of said Partition Plat 2001-29 and the point of beginning; thence South 89°40'56"
West along the common boundary of said Parcel 3 and Parcel 2 of said Partition Plat, 318.72 feet to a 5/8 -
inch rebar at the Northwest corner of said Parcel 3; thence North 00°14'47" West along the West boundary
of said Parcel 2, 273.35 feet to a 3/4 -inch pipe; thence North 89°49'03" East, 318.72 feet to a 3/4 -inch
pipe; thence South 00°14'47" East, 273.34 feet to the point of beginning.
Parcel B:
Commencing at a 3 1/4 -inch aluminum cap monumenting the East quarter (1/4) corner of Section 10,
Township 15 South, Range 13 East of the Willamette Meridian, Deschutes County, Oregon, the initial
point; thence South 89°49'03" West, 1005.89 feet; thence North 00°14'47" West, 30.00 feet to a 3/4 -inch
pipe on the South boundary of Parcel 3 of Partition Plat No. 2001-29, and to the point of beginning; thence
along the boundary of said Parcel 3 as follows: North 89°49'03" East, 212.51 feet to a 3/4 -inch pipe;
thence North 00°15'12" West 410.01 feet to a 5/8 -inch rebar; thence South 89°48'56" West, 212.46 feet;
thence leaving said Parcel 3 boundary South 00°14'47" East, 410.00 feet to the point of beginning.
Parcel C:
Commencing at the Northwest corner of Parcel 3 of Partition Plat No. 2001-29 (RMP -00-21D), a 5/8 -inch
rebar with yellow plastic cap marked "W&H PACIFIC", the initial point of this description; thence North
00°14'47" West along the West line of the Southeast quarter of the Northeast quarter (SE1/4NE1/4) of said
Section 10, also being the West line of Parcel 2 of Partition Plat No. 2001-29, a distance of 273.75 feet to
a 3/4 -inch pipe with yellow plastic cap marked "POVEY & ASSOC.", the true point of beginning of this
description; thence North 89°49'03" East, along the North line of Parcel "A" as shown on LLA04-12
(CS15978), a distance of 318.72 feet to a 3/4 -inch pipe on the East line of said Parcel "A"; thence South
00°14'47" East along said East line, a distance of 83.38 feet to a 5/8 -inch rebar; thence South 89°49'03"
West, a distance of 318.72 feet to a 5/8 -inch rebar on the West line of Parcel 3 of Partition Plat 2001-29;
thence North 00°14'47" West along said West line, a distance of 83.38 feet to the point of beginning.
Memorandum of Lease Page 1 of 2
APPENDIX L
REHABILITATION LOAN AGREEMENT
Page 2 of 2
ALL PERSONS now or hereafter having or acquiring any interest in the above-described
real property and improvements, may inquire with respect to the content, form, provisions or
effects of the Lease herein described by directing a request, in writing, setting forth with
particularity the nature of the interest of such persons in said property, and the lawful purpose or
purposes for such inquiry, to County Administrator, Deschutes County,1300 Wall Street, Suite
200, Bend, OR 97701.
IN WITNESS WHEREOF, the parties have caused this Memorandum of Lease to be signed
and acknowledged effective as of this day of December, 2008.
HUMANE SOCIETY OF REDMOND DESCHUTES COUNTY
By By
Rachel A. Oxley, DVM, President Dave Kanner, County Administrator
State of Oregon, County of }ss.
The foregoing instrument was acknowledged before me on
2008, by RACHEL A. OXLEY, DVM, as President of the HUMANE SOCIETY OF OREGON, an
Oregon non-profit corporation.
Notary Public for Oregon
My commission expires: , 20
State of Oregon, County of }ss.
The foregoing instrument was acknowledged before me on
2008, by DAVE KANNER, as County Administrator of and for DESCHUTES COUNTY, a political
subdivision of the State of Oregon.
Notary Public for Oregon
My commission expires: , 20
Memorandum of Lease Page 2 of 2
APPENDIX M
REHABILITATION LOAN AGREEMENT
Page 1 of 1
Legal Counsel
1300 NW WALL STREET, SUITE 205 • BEND, OREGON 97701
TELEPHONE ¥541-388-6623
541-388-6624
FACSIMILE ¥541-617-4748
Mark Pilliod, Legal Counsel
Laurie E. Craghead, Assistant Legal Counsel
Christopher Bell, Assistant Legal Counsel
Steven Griffin, Assistant Legal Counsel
November 24, 2008
*
Dear *:
This letter is to confirm the compromise and settlement reached between you and Deschutes County,
on behalf of the Human Society of Redmond, regarding the shelter's outstanding account payable due
to you. Your agreement to the reduction of the amount due is greatly appreciated. It will assist the
Human Society through this difficult period, and shows your commitment to keep the shelter open to
benefit all of Deschutes County.
In order to finalize this matter, we are including the following:
1. Release of All Claims. The signature of your authorized representative, date, and a
witness's signature is all that is required to finalize the document. Once the release is fully executed,
please return the original to our office. You should keep an extra copy for your records.
2. Deschutes County Check. This check is made payable to you in the agreed upon
amount. Please be advised that once the check is negotiated, it will be evidence of and finalize your
agreement to accept this amount as a full and final settlement of the outstanding balance due to you
from the Human Society of Redmond.
A return envelope is provided for your convenience in returning the release to our office. If
there is anything further you would like to discuss, or if you require any clarification of the above,
please contact Connie Scorza, Legal Assistant, Deschutes County, 541-388-6624.
Sincerely,
Mark Pilliod
Deschutes County Legal Counsel
Enclosures (per text)
APPENDIX N
REHABILITATION LOAN AGREEMENT
Page 1 of 1
RELEASE OF CLAIMS
FOR AND IN CONSIDERATION of the sum of $*, paid by DESCHUTES COUNTY, Oregon
("County"), the creditor named below ("Creditor") of the HUMANE SOCIETY OF REDMOND, an Oregon
non-profit corporation ("HSR"), on behalf of whom this instrument is signed and delivered does hereby
and irrevocably release and discharge HSR from all obligations or indebtedness owed to Creditor, now
totaling $*, including, if applicable, any and all interest, finance charges, late fees, penalties or
surcharges, of any and every description whatsoever.
As further consideration for payment and delivery of the above -stated amount, Creditor hereby
represents and agrees, that County has never had any obligation to pay said amount, or any other
amount, to the Creditor for the account, or on behalf of HSR, except in consideration of release and
discharge by Creditor of the obligations and indebtedness of HSR and would not pay Creditor the above
amount without the release and discharge contained in this paragraph.
This instrument shall be enforced in accordance with the laws of the state of Oregon; is binding on
Creditor, Creditor's successors in interest and assigns, and shall inure to the benefit of HSR, its former,
present, and future members, directors, officers, employees, agents, representatives, successors and
assigns, and County, jointly and severally.
Finally, each natural person signing this instrument on behalf of any non -natural entity (e.g. any
corporation, partnership, LLC, trust, etc.), does hereby certify under penalty of perjury of the state of
Oregon, that he or she has the lawful authority to accept payment and delivery of the sum first stated
above on behalf of the Creditor named below, and to lawfully and irrevocably bind Creditor and his, her or
its, successors and assigns, by this instrument.
*** "Creditor"
By; its
[Signature] [Title or Capacity]
Date signed: , 2008
[Printed Name]
Witnessed by: Print name
IAS-V.1:1214/200u t 1 :,19:04 PM.