HomeMy WebLinkAboutR-2003-105 Helen & Seong Kim Loan Application / Agreement / Promissory Note (re: Pepper’s Family Restaurant )RESOLUTION NO. R-2003-105
A RESOLUTION to approve the loan application and enter into a loan with Helen
and Seong Kim to up to $330,000 from the Yakima Commercial Development Loan
Fund.
WHEREAS, the City of Yakima has set up the Yakima Commercial
Development Loan Fund; and
WHEREAS, the City has worked with the National Development Council to
develop the guidelines for a program to use the Commercial Development Loan
Fund; and
WHEREAS, located in a low income area, has submitted an application for a
loan from the Commercial Development Loan Fund, with the funds to be used
refinance debt, purchase equipment, complete remodeling, provide working capital
and fund other expenses associated with the acquisition and operation of a Pepper's
Family Restaurant in the former Denny's Restaurant on North First Street
WHEREAS, the City and the National Development Council have reviewed
the Helen and Seong Kim application and corresponding collateral and guaranties
for payment;
WHEREAS, the City and the National Development Council have
determined that Helen and Seong Kim's loan application meets the criteria for this
type of loan, demonstrates a good plan for operating a restaurant business, and
provides evidence of sufficient collateral to back this loan in case of default;
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
1. The City Council authorizes a loan to Helen and Seong Kim of $330,000
dollars from the City's Commercial Development Loan Fund. The loan
shall be evidenced by a Loan Agreement and a Promissory Note signed by
the City and the Borrowers, a personal Guaranty signed by Helen and
Seong Kim, and first security in the restaurant and a second position
interest in the newly remodeled Ramada limited motel.
2. The City Manager is hereby designated as the official representative of
the City to act in connection with signing of the Loan Agreement, the
Promissory Note, and any other agreement associated with this loan with
Helen and Seong Kim.
ADOPTED BY THE CITY COUNCIL THIS 15th day of July, 2003.
ATTEST:
City Clerk
ary P1,e, Mayor
LOAN AGREEMENT
between
SEONG AND HELEN KIM, dba PEPPERS RESTAURANT
and
THE CITY OF YAKIMA
•
LOAN AGREEMENT
THIS LOAN AGREEMENT (as supplemented or amended from time to time, and
including all documents and terms incorporated herein by reference, the "Agreement"), dated as of
March 24, 2003, is entered into by and between SEONG AND HELEN KIM, husband and wife,
("Obligor") and THE CITY OF YAKIMA, a Washington municipal corporation ("City").
RECITALS
This Agreement is entered into upon the basis of the following facts and circumstances:
A. Obligor is a husband and wife who have purchased a restaurant. Obligor has
requested a loan from the City for funds for refinancing existing acquisition debt, making repairs,
and providing working capital (the "Loan"). The Obligor's use of the funds is to be made pursuant
to this Agreement. Obligor's refinancing of its acquisition debt, making repairs to the restaurant,
and providing working capital, are to be funded with proceeds of the Loan (defined in Section 1.1
below) to be made pursuant to this Agreement, and is referred to herein collectively as the
"Project."
B. City has applied for and received a commitment from the United States Department
of Housing and Urban Development ("HUD") to guarantee a non-recourse note or notes (as
supplemented or amended from time to time, and together with any replacements thereof issued by
the City and guaranteed by HUD pursuant to the HUD Contract described below, the "City Note")
to be issued by City to fund the Project, in accordance with Section 108 of the Housing and
Community Development Act of 1974, as amended (such Act and the federal regulations
promulgated under it are called the "Act"). The City Note is the subject of a Contract for Loan
Guarantee Assistance between the City and HUD (as supplemented or amended from time to time,
the "HUD Contract") and certain Letter Agreements for Section 108 Guarantee Program Custodial
Account (as supplemented or amended from time to time, the "Letter Agreements") among the
City, HUD and JPMorgan Chase Bank (hereinafter referred to, with any successors under such
agreement or successor agreement, as "Custodian"). City has also entered into an Indenture of
Trust and Custodial Agreement with the Custodian (as supplemented or amended from time to
time, together with any substitute in accordance with Section 7.2 below, the "Custodial
Agreement"), which provides for, among other things, the Custodian to hold certain security for the
City Note on behalf of HUD and for the establishment and management of certain accounts
pursuant to the HUD Contract and Letter Agreements. The HUD Contract is entered into pursuant
to an application submitted to HUD by the City dated November 14, 2002, a copy of which Obligor
has received and reviewed (as supplemented or amended from time to time, the "Application").
The Application, HUD Contract, Letter Agreements and Custodial Agreement are incorporated
herein by this reference. Unless the context otherwise provides, capitalized terms used herein and
not otherwise defined shall have the meanings assigned to them in the HUD Contract or City Note,
• as applicable.
Loan Agreement Page 1
•
C. The Department of Community and Economic Development ("DCED") is
responsible within The City of Yakima for making, subject to City Council approval, loans of funds
obtained from HUD by pledges of Community Development Block Grant ("CDBG") funds to be
made available to the City by HUD, pursuant to the Act. Unless the City otherwise notifies Obligor
in writing, the DCED shall be responsible for performance of the obligations of the City under this
Agreement and the other Loan Documents, and for oversight of performance of such agreements by
Obligor, and references hereinafter made to the City shall be deemed to mean the City, acting
through DCED.
D. The Loan shall be evidenced by this Agreement and by Obligor's Promissory Note
("Obligor Note") in the form attached as Attachment A and hereby incorporated by reference, and
together with Obligor's other obligations under the Loan Documents. The Obligor's obligation
under this Agreement shall be secured by 1) Obligor granting the City security interests in the
fixtures, personal property, and equipment owned by the Obligor that are located at 822 N. 1'
Street, Yakima, WA ("Security Agreement"), and 2) Obligor's deed of trust, substantially in the
form of Attachment B hereto, (as supplemented or amended from time to time in accordance with
this Agreement, the "Deed of Trust") on commercial property located at 822 and 818 N. 1s` Street in
Yakima, Washington, which is more particularly described on Attachment B and fully incorporated
herein ("Property"), and 3) and such other real or personal property that satisfies the City's
requirements. Both the Security Agreement and the Deed of Trust shall be dated on or about the
date hereof.
The Obligor Note, this Agreement, and any other documents or instruments executed by
Obligor in favor of City pursuant hereto, are collectively referred to herein as the "Loan
Documents". Where the context so requires, to the extent that the Loan Documents provide that
Obligor's obligations or duties are determined by reference to any teams or provisions of documents
incorporated by reference in any of the Loan Documents, any reference to the "Loan Documents"
shall include such terms or provisions.
E. The Obligor's obligations under this Agreement and the other Loan Documents
shall be further secured by the assignment of certain additional collateral as required by HUD and
security interests in certain Reserves.
NOTICE: ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY,
EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT,
ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
NOW, THEREFORE, in consideration of the foregoing Recitals and the covenants,
conditions, representations and warranties contained herein, the parties hereto agree as follows:
Loan Agreement Page 2
9
ARTICLE I — THE LOAN
1.1 The Loan. In reliance upon Obligor's representations and warranties, and subject to
the terms and conditions contained in this Agreement and the other Loan Documents (including
without limitation, the HUD Contract, the Letter Agreements, and the Custodial Agreement), the
City hereby agrees to cause funds to be advanced to Obligor through the Custodian (which
advances collectively shall constitute the "Loan") in a maximum aggregate principal amount of
Three Hundred Thirty Thousand Dollars ($330,000), solely for the purposes set forth in Section 1.2
below. Loan disbursements shall he made only the extent ofavailable funds by
� to .,.. received the
Custodian for such purposes through issuance by the City of the City Note, and except with respect
to the payment of interest from EDI Grant funds allocated for such purpose as more particularly
described in Section 4.4(b) of this Agreement and the Custodial Agreement, the City shall have no
obligation to make disbursements to or for the benefit of Obligor for the Project or otherwise, from
any ether source. Obligor shall have the right to receive Loan funds only pursuant to the terms and
conditions of this Agreement and in accordance with the Act.
1.2 Purpose of Loan. Obligor shall use the Loan proceeds for refinancing acquisition
debt, making repairs to the building, and providing working capital for Peppers Restaurant, located
at 822 N. 1S` Street in Yakima, WA.
1.3 Loan Documentation: Interest.
(a) Loan Documentation. The Loan shall be evidenced by this Agreement and
by the Obligor Note, and together with Obligor's other obligations under the Loan Documents,
shall be secured by the Security Agreement and the Deed of Trust, substantially in the form of
Attachment B hereto. The principal of and interest on this Loan shall be due and payable in
accordance with the tei ins set forth in the Obligor Note.
(b) Variable Rate. Obligor acknowledges and agrees that, as provided in the
Obligor Note, interest shall accrue on each advance of Loan funds from the date of the correlative
Advance under the City Note until repayment in full, at a rate or rates equal to the correlative
interest rate or rates on the City Note, as the same may change from time to time under the terms of
the City Note and HUD Contract.
Initially and continuing to the Conversion Date, interest shall accrue at a rate equal to twenty (20)
basis points (0.2%) over the Applicable LIBO Rate. From and after the Conversion Date (whether
conversion to a fixed rate or rates is effected with the consent of Obligor or otherwise), each
principal amount scheduled to become due on a particular date pursuant to the City Note shall bear
interest at a separate, stated rate, and the corresponding Obligor Principal Amount (as defined by
the Obligor Note) under the Obligor Note shall bear interest at the same rate. Any principal of the
Loan or interest thereon, which is unpaid after the date when payment is due, shall bear interest at
the rate stated for amounts past due in the Obligor Note.
Loan Agreement Page 3
- Obligor shall make all payments on behalf of City to the Custodian, as provided in the Loan
Documents.
(c) Consent to Conversion. So long as no default shall have occurred under this
Agreement and the other Loan Documents which has not been cured or waived in accordance with
the terms hereof and thereof, the City shall not request or consent to conversion of the interest rate
on the City Note to a fixed rate or rates, without the prior written consent of the Obligor. However,
Obligor acknowledges and agrees that under the HUD Contract, HUD will have the unilateral right
(with or without notice to nr consent of the City and/or fix the interest , ,
�� Obligor) to payable on the
City Note.
1.4 Security.
(a) Deed of Trust. Obligor's obligations under the Loan Documents at all times
shall be secured a Deed of Trust on the Property as security for the Loan. The Property is more
particularly described on Attachment B and fully incorporated herein.
(b) Security Agreement. Obligor's obligations under the Loan Documents at all
times shall be secured by the Obligor granting a security interest in all fixtures, equipment, and
personal property owned by the Obligor which are located at 822 N. 1st Street, Yakima, WA
98901. The security interests granted pursuant to the security agreement shall be perfected, to the
extent possible, by filing with the Department of Licensing of the State of Washington and
recording with the Yakima County Auditor, and Obligor agrees to take all action reasonably
requested by the City or Custodian, and to pay all fees and costs reasonably required to continue
such perfection so long as the Loan or any of Obligor's other obligations under the Loan
Documents remain outstanding. Obligor hereby grants to the City a security interest in all fixtures,
equipment and personal property, including by not limited to that listed on Attachment B, and fully
incorporated herein and all accessions, attachments, and modifications thereto, NONE OF
WHICH THE DEBTOR IS AUTHORIZED TO SELL, LEASE OR OTHERWISE DISPOSE OF
WITHOUT THE WRITTEN CONSENT OF SECURED PARTY: all cash and non-cash
proceeds of any of the foregoing in whatever form (including proceeds in the form of inventorv,
equipment or any other form of personal property), including_ proceeds of proceeds: all books and
records relating to the any of the foregoing collateral. This Loan Agreement shall, also constitute a
security agreement under RCW 62A.9A.
(c) Reserve Accounts. Obligor's obligations under the Loan Documents also
shall be secured by all funds and investments in all of the accounts now or hereafter established
under the Loan Documents, including without limitation, the Custodial Agreement, and specifically
including without limitation, the Debt Service Reserve Account and the Loan Repayment Account
(all accounts collectively referred to herein as the "Reserve Accounts"). Obligor hereby pledges to
the City, and grants the City a security interest in, all right, title and interest of Obligor in and to the
funds and investments now or hereafter in the Reserve Accounts, and all earnings thereon and
proceeds thereof (the "Collateral Assignments"). This Loan Agreement shall also constitute a
Loan Agreement Page 4
security agreement under RCW 62A.9A. Obligor and City will execute a Deposit Account Control
Agreement, substantially in the four of Attachment C hereto and fully incorporated herein.
Obligor agrees that such funds and other assets shall constitute "cash collateral" as
described in the United States Bankruptcy Code. Obligor shall promptly take such actions as shall
be reasonably requested by the City or Custodian, and pay all fees and costs reasonably required in
order to perfect and continue perfection as a first priority lien and security interest, so long as the
Loan remains outstanding, the City's security interest in such accounts, the funds and investments
therein, and the prnoi-ms thereof. Obligor agrees that, in addition to all other rights and remedies
with respect to Reserve Accounts and otherwise under the Loan Documents, immediately upon
acceleration of the balance owing on the Loan, whether upon an Event of Default or any other
circumstance permitting acceleration, the City shall have the absolute right, without notice or
demand, to apply all funds and assets pledged under this section to amounts owing under the Loan
Documents, and for such purpose to liquidate or cause to be liquidated any investments in any
commercially reasonable manner, and irrevocably authorizes any Custodian, upon notice from the
City of an Event of Default or any other circumstance permitting acceleration, to comply with the
City's directions to so apply any or all such funds and assets and to liquidate investments for such
purpose.
(d) Rights of City With Respect to Security. Obligor irrevocably agrees that, to
the full extent permitted by applicable law, the City may realize upon any security for the Loan
either before, concurrently with, or after either (1) any action to realize upon any other form of
security (including without limitation the Deed of Trust and/or Security Agreement), or (2) any suit
or other proceeding on the Obligor Note, in each case without affecting the status of or waiving any
rights or remedies under the Loan Documents or with respect to any security. Obligor consents to
any and all actions that the City or Custodian may take to release, subordinate, accept substitution
for, modify, compromise, or waive any or all security with respect to the Loan, and Obligor agrees
that no such action shall impair any rights or remedies of the City or Custodian under the Loan
Documents.
1.5 Loan Fee. Obligor shall pay to City a loan fee of Three Thousand Three Hundred
Dollars ($3,300), representing one percent (1%) of the amount of the Loan, payable directly to City
upon and from the first disbursement of Loan funds hereunder. This fee is in addition to Obligor's
duty to pay City's costs and fees pursuant to Section 1.6 of this Agreement
1.6 Obligor's Payment of Costs and Fees. Obligor shall pay to City or at City's
direction, as and when due, the lesser of a) Three Thousand Three Hundred Dollars ($3,300),
representing one percent (1%) of the amount of the Loan, and b) all other costs and fees of
whatever nature incurred by City (whether or not with recourse to the City) in connection with the
Loan, including without limitation, fees and costs incurred by the City pursuant to the HUD
Contract and City Note (to be allocated on a pro rata basis according to the total principal amount
outstanding on the Obligor Note and the City Note at the time fees or costs are incurred from time
to time). The costs and fees payable by Obligor shall include, without limitation, (i) any and all
charges and costs billed by the Fiscal Agent in respect of the City Note under the Amended and
Loan Agreement Page 5
•
Restated Master Fiscal Agency Agreement among HUD and The Chase Manhattan Bank (now
known as JPMorgan Chase Bank) as Fiscal Agent dated as of May 17, 2000, (ii) on and after the
Conversion Date, any charges and costs in respect of the City Note billed by the trustee under that
certain Trust Agreement by and between HUD and JPMorgan Chase Bank, as Trustee, dated as of
January 1, 1995, as now and hereafter amended and supplemented, and under any other trust
agreement or similar instrument that may be executed by HUD in connection with a public offering
conducted with respect to notes guaranteed by HUD under the Section 108 program (each such
offering is referred to herein as a "Public Offering") that involves the City Note, (iii) fees and
costs of the Custodian in connection with the Custodial Agreement and Letter Agreements; (iv)
fees and costs of the City's outside counsel and the Custodian's outside counsel; title insurance and
escrow fees and costs in connection with Closing. Obligor shall also pay the following: the fees
described in Section 1.5; fees and costs of the Custodian, if any, other than the initial set-up fee; and
any fees or costs of the City's Outside Counsel or Custodian's Outside Counsel incurred after the
date of closing, without limitation,with
g including in connection a Public Offering, and as may be
incurred in case of breach or failure to perform by Obligor or in case of any litigation arising in
connection with this Agreement.
1.7 City Funds Not Obligated. The Loan will be made only from non -City funds that
the Custodian receives under the HUD Contract and City Note, and interest subsidy payments in
accordance with Section 4.4(b) hereof will be made only from available funds under the EDI Grant
Agreement. In accordance with RCW 35.21.735, the City Note, and any payments or obligations
under the HUD Contract and any documents or agreements relating thereto, including without
limitation this Loan Agreement shall be a valid claim only against and payable solely from, the
Accounts held by the Custodian and from the security pledged under the HUD Contract, and shall
not be an obligation of The City of Yakima or the State of Washington, and neither the faith and
credit nor the taxing power of the City or State or any municipal corporation or subdivision of the
State or any agency of any of the foregoing is pledged to the payment of principal, interest or
premium, if any, on the City Note or for any amounts due under the HUD Contract or any
documents or agreements relating thereto including without limitation this Agreement. Nothing
herein shall constitute a debt or indebtedness of the City payable from public funds within the
meaning of any constitutional or statutory limitation on the incurrence of debt. Obligor agrees and
acknowledges that this Agreement does not create any recourse to or claim upon the City's general
fund, or any other funds of the City, and Obligor hereby disclaims any such claim.
1.8 Application of Payments. So long as the City or the Custodian shall have received,
in immediately available funds, timely payments of interest and principal on the Obligor Note in
the amounts required, the City shall apply such payments to payment of interest on and the
principal of the City Note, as such interest and principal shall become due.
1.9 Acceleration on Certain Events. The City shall have the absolute right, in its
discretion, to declare all or any part of the principal balance owing on the Loan immediately due
and payable in the event that:
Loan Agreement Page 6
•
(a) HUD or any court of competent jurisdiction shall determine that the Loan or
the issuance of the City Note roust be terminated, canceled, or rescinded for failure to comply with
the Act or other applicable law, or that for any reason any City Note cannot be issued or cannot be
guaranteed by HUD; or
(b) HUD shall notify the City that any or all of the City Note cannot be included
in the pool of notes for purposes of a scheduled Public Offering for any reason, and that HUD or
the holder of the City Note is not willing to allow the interim terms of the City Note to remain in
effect pending a later public offering, provided, that unless otherwise required by HUD or by the
effect of a court order, Obligor shall be allowed a period of ninety (90) days after notice to Obligor
thereof to seek to have such determination reversed or rescinded, or the effect thereof stayed, prior
to acceleration of all or any part of the principal balance. If any such stay is obtained, then the City
shall have the right to accelerate all or part of the principal balance immediately upon the lifting or
termination of such stay.
ARTICLE II — OBLIGOR'S REPRESENTATIONS AND WARRANTIES
In order to induce City to make the Loan, Obligor represents and warrants as set forth below
in this Article II as of the date hereof, as of the date of Closing, and at all times any of the principal
or interest on the Loan remain outstanding. These representations and warranties shall survive the
execution, delivery, and performance of the Loan Documents but shall terminate upon the
satisfaction of all of the obligations of Obligor under this Agreement and the other Loan
Documents, subject to revival after such satisfaction if any amount paid under the Loan Documents
is recaptured in bankruptcy or similar proceedings.
2.1 Nondiscrimination. During the performance of this Loan Agreement, neither
Obligor nor any party contracting with Obligor who would be paid with Loan funds under this
Loan Agreement shall discriminate on the basis of race, color, sex, religion, national origin, creed,
marital status, sexual orientation, gender identity, age, or the presence of any sensory, mental or
physical handicap in employment or application for employment or in the administration or
delivery of services or any other benefits under this Loan Agreement. The Obligor shall comply
fully with all applicable federal, state and local laws, ordinances, executive orders and regulations
that prohibit such discrimination. These laws include, but are not limited to, Chapter 49.60 of the
Revised Code of Washington, and Titles VI and VII of the Civil Rights Act of 1964.
2.2 No Litigation. There are no actions, suits, or proceedings pending, or to the
knowledge of Obligor threatened against or affecting Obligor in any court of law or in equity, or
before or by any governmental or municipal authority.
2.3 Authority. When Obligor executes the Loan Documents, it will not cause the
Obligor to violate any existing contract to which they are a party.
Loan Agreement Page 7
•
2.4 Title. Obligor is the owner in fee simple absolute of the Property and the Property
shall be subject to no liens or encumbrances except:
(a) Senior lien, if any;
(b) The Deed of Trust in favor of City securing the Loan;
(c)
Certain Special Exceptions, to be determined upon completion of the title
report; and
(d) Liens for property taxes or assessments on the Property not yet due; and
(e) Incorrect legal description in Deeds of Trust for some of the Property that do
not properly reflect a previous boundary adjustment. Obligor will ensure
that Deeds of Trust incorporating the proper legal description are issued for
the Property within a reasonable time after Closing.
2.5 Covenants. Zoning, and Codes and Permits. Except as disclosed to the City in
writing, as of the date of Closing, the Property and its current and intended uses are in compliance
in all material respects with, and Obligor covenants that the Property and its uses will at all times
comply in all material respects with all applicable zoning and land use codes, and other laws,
ordinances, and regulations applicable to the Property. Obligor has not received notice from any
regulatory body or agency of any actual or alleged noncompliance with any applicable law,
regulation, code, ordinance or permit affecting the Property.
2.6 Compliance With Documents. Obligor is and will remain in full compliance with
all of the terms and conditions of this Agreement and the other Loan Documents, and any and all
other material agreements, instruments or other documents affecting the Property, and no
occurrence has or shall have occurred and be continuing, which, with the passage of time or the
giving of notice, or both, would constitute a default under any of the foregoing.
2.7 Taxes Are Paid. Obligor has filed all material tax returns which are required and
have paid or made provision for the payment prior to the last day on which payment may be made
without interest or penalty of all taxes which have or may become due pursuant to said returns or
pursuant to any assessments levied against the Obligor or its personal or real property by any taxing
agency, federal, state or local, and Obligor has withheld and paid over to proper authorities all
withholding taxes required by law. No due or overdue tax liability or lien has been asserted by the
Intemal Revenue Service or other taxing agency, federal, state or local, and the Obligor knows of
no basis for any such deficiency assessment or lien.
Loan Agreement Page 8
ARTICLE III — CONDITIONS PRECEDENT TO LOAN CLOSING
The City's obligation to perform its duties under this Agreement, including without
limitation causing disbursement of any funds, shall be subject to the full and complete satisfaction
of the following conditions precedent:
3.1 Documents. City shall have received fully executed originals of each of the
following, each of which shall have been duly authorized, executed (and acknowledged where
appropriate) and delivered by the parties thereto, and shall be in form required by this Agreement,
with such modifications as may be approved by the City in accordance with the Ordinance: this
Agreement; the Obligor Note; the Deed of Trust; the Deposit Account Control Agreement; the
Demand Note, and such other documents as City shall reasonably request.
32 Insurance. The Obligor shall have provided to the City evidence of adequate
insurance coverage for Obligor's operations and for its Property.
3.4 Title Insurance: Other Confirmation of No Liens. Obligor shall have caused to be
furnished to the City, at Obligor's expense, from Chicago Title Insurance Company ("Title
Company"), an ALTA 1970 Form Extended Coverage lender's policy of title insurance in the
amount of the maximum principal of the Loan, showing City as an insured mortgagee, that fee title
to the Property is vested in Obligor and that the Deed of Trust is a valid lien upon Obligor's interest
in the Property, subject only to such encumbrances and exceptions as may be explicitly permitted
by the Loan Documents, including Section 2.4 of this Agreement, and any others that may be
acceptable to City in its sole discretion. The title policy shall be Attachment D and fully
incorporated herein. The title policy shall be in form, and shall include the endorsements,
satisfactory to the City, shall limit exceptions for taxes limited to those not yet due and payable, and
shall show no additional exceptions or encumbrances, whether senior or junior to the Deed of Trust.
Finally, the City shall have received such other evidence reasonably requested and satisfactory to
the City that all security instruments and assignments contemplated by this Agreement are in full
force and effect and have the priority contemplated hereby.
3.5 Legal Opinions.
(a) City shall have received a legal opinion, containing reasonable and
customary exclusions and qualifications, and in form and content reasonably satisfactory to City
and the City's outside counsel, from Obligor's counsel, who shall be satisfactory to City, to the
effect that:
(1) The execution and delivery of the Loan Documents and Deed of
Trust by Obligor do not, and the transactions contemplated by the Loan Documents will not, violate
any laws or regulations applicable to the Obligor and will not conflict with and will not cause a
default any material agreements, instruments, judgments, decrees, orders or undertakings known to
such counsel after reasonable inquiry by which the respective parties are bound or to which the
Property is subject; and
Loan Agreement Page 9
•
(2) The Loan Documents have been duly executed and delivered by
Obligor and constitute the legal, valid, binding obligations on the Obligor, enforceable in
accordance with their terms.
(b) The City shall have received such additional items as may be required
pursuant to the HUD Contract, including without limitation, an opinion of outside counsel to the
City.
3.6 Additional Conditions Precedent to Each Advance of Funds.
(a) The City shall have received such additional documents and further
assurances as it may reasonably request or which are required by HUD or any federal, state or
county regulatory agency.
(b) Obligor shall be in full compliance and shall not be in breach or default
under this Agreement or any of the other Loan Documents; provided, however, that City may, in its
discretion, elect to make advances notwithstanding the existence of Obligor's noncompliance or
default, and any advance so made shall be deemed to have been made pursuant to this Agreement
and secured by the Deed of Trust.
(c) None of the Property shall have been materially damaged, destroyed,
condemned, or threatened with condemnation.
(d) The representations and warranties of Obligor contained herein shall remain
accurate in all material respects as of the date of the requested disbursement.
(e) Neither HUD nor any court of competent jurisdiction shall have determined
that the issuance of the City Note or the making of the Loan must be terminated, canceled or
rescinded for failure to comply with the Act or other applicable law, or that for any reason any City
Note cannot be issued or cannot be guaranteed by HUD.
Loan Agreement Page 10
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ARTICLE IV — LOAN DISBURSEMENTS AND REPAYMENTS: RESERVE ACCOUNTS
4.1 Initial and Subsequent Disbursement.
(a) Conditioned upon receipt of proceeds of the City Note and satisfaction of all
other applicable conditions to Loan disbursements under this Agreement, the City will disburse
Loan funds in the amount of up to Three Hundred and Four Thousand Dollars ($304,000), based on
the City's appraisal of the value of the real property and restaurant that is located at 822 N. 1' Street
in Yakima, WA ("Restaurant").
(b) The remaining Twenty -Six Thousand Dollars ($26,000) will be held in
escrow by the Custodian, pursuant to the Indenture of Trust agreement, until:
i) The Deeds of Trust for the remaining parcels have been corrected to show
the proper legal title to the correct legal description for the c respective parcels, such that n0
exception exists as listed in Section 2.4(d).
ii) When a title policy, as described in Section 3.4, can be issued that does
not contain the exceptions listed in Section 2.4(d), then the City can disburse all remaining funds to
Obligor, less applicable costs.
(c) The Loan funds shall be disbursed on the date (the "Closing Date") of
closing of the Loan (the "Closing"). The initial disbursal is limited to the amount necessary to pay
1) related Closing costs, 2) the Loan fee payable to the City in accordance with Section 1.5 of this
Agreement, 3) any other fees and costs due and payable at Closing pursuant to Section 1.6 of this
Agreement, 4) all 2003 property taxes on the Property , 5) pay off the debt on the Restaurant that is
in the original amount of $90,000; and 6) pay off the allowable credit card debt.
(d) The remaining funds will be held in escrow by the Custodian pursuant to the
Indenture of Trust agreement, and will be used to ensure that all improvements are made to the
Restaurant and for operating expenses approved by the City. Borrower will submit a disbursement
request to the City to use Loan funds to pay off Borrower's debts. City will verify and approve the
request(s). Each disbursement request will be in a form similar to Attachment E. After Borrower
makes all improvements to the Restaurant, the Borrower can request that the City disburse all
remaining funds to the Borrower.
(e) Obligor agrees to execute an agreement for interim expenses, as set forth in
subsections b and d above, in substantially the same form as Attachment F, providing that Obligor
will compensate City for all expenses, if any, the City incurs by closing this Loan but not
disbursing all of the funds, as set forth above. These expenses include, but are not limited to,
interest expenses.
4.2 Costs Related to Public Offering.
Loan Agreement Page 11
(a) On the Closing Date, the amount of Three Thousand Three Hundred Dollars
($3,300), out of the City Loan proceeds, shall be held in the Guaranteed Loan Funds Account
established by the Custodian under the Letter Agreements ("Guaranteed Loan Funds Account"), for
the purpose of paying the costs to be incurred in connection with the Public Offering, including
without limitation trustee's fees and underwriters' fees and costs. Such funds shall nonetheless be
considered Outstanding under the Obligor Note. After the Conversion Date, upon payment of all of
such fees and costs allocable to the City Note, any remaining amount in the Guaranteed Loan Funds
Account shall be transferred to the Loan Repayment Account maintained by the Custodian under
the Letter Agreements ("Loan Account"), and the
� Repayment< awvuia� �, next deposit(s) required to the Debt
Service Reserve Account in respect of principal under Section 4.4 below shall be reduced, dollar for
dollar, by the amount of such transfer. In any event all amounts remaining in the Guaranteed Loan
Funds Account on September 1, 2013 shall be transferred to the Loan Repayment Account unless
otherwise agreed by HUD and the City. If the Obligor Note shall be paid in full prior to the
Conversion Date, the amount so withheld, and earnings thereon, shall be applied as part of such
prepayment of the Obligor Note and transferred to the Loan Repayment Account to redeem the City
Note.
(b) The City may elect, in its sole discretion, to waive the foregoing requirement in
subsection (a) upon receipt of evidence satisfactory to the City that the payment of such costs has
otherwise been duly provided for and that funds necessary to pay such costs will be available when
demanded by City. If the City so elects, Obligor shall execute a demand note ("Demand Note"),
substantially in the form of Attachment G attached hereto, in favor of the City for an amount not
expected to exceed one percent (1%) of the Loan amount. City shall give Obligor at least ten (10)
days written notice of its call for payment of the Demand Note. If Obligor fails to perform under
the Demand Note that shall be a breach of the Demand Note and an Event of Default, as defined in
Section 6.1, and the City may use the remedies outlined in Section 6.3, as well as any other
remedies available under the Loan Documents.
4.3 Delegation of Loan Administration. City may delegate administration of any or all
of the matters described in this Article IV to the Custodian in accordance with the provisions of the
HUD Contract, the City Note, and the Custodial Agreement. Upon execution of the Custodial
Agreement by the parties thereto Obligor shall provide the appropriate requests and information to
the Custodian and to the City at such times and in such form as is provided in the Custodial
Agreement.
4.4 Debt Service Reserve Account.
(a) Monthly Deposits. Commencing in the first month disbursement of
principal of the City Note in respect of the Obligor Note is to be made, Obligor shall make monthly
installment payments to the Custodian for deposit in an account maintained by the Custodian for
the accumulation of funds for payments on the Obligor Note (the "Debt Service Reserve Account,"
which term shall include any related Debt Service Reserve Investment Account established under
the Custodial Agreement and Letter Agreements), in order that the Custodian shall have sufficient
funds to make transfers to the Loan Repayment Account in payment of installments on the Obligor
Loan Agreement Page 12
•
Note as they come due (each such due date being an "Obligor Payment Date"). Funds in the Loan
Repayment Account shall be used to make payments on the City Note as they come due. Each
Account
such monthly payment shall be due and payable, in immediately available funds, on the "Deposit
Day," which shall be the fifteenth (15th) day of the month, or if such day is not a Business Day,
then on the previous Business Day; subject to adjustment in respect of any Conversion Date.
Subject to the provisions of Section 4.4(b), each such payment shall be in an amount equal to the
actual interest accruing on the Obligor Note during the corresponding month, at the rate or blended
rate, as the case may be, then in effect (the "Interest Component"), plus one -twelfth (1112th) of the
total principal coming due on the Obligor Note on the next Obligor Payment Dae (the "Pri
Payment Laic ril[1C:lpa1
Component"); provided that the monthly payment obligation in respect of the Interest Component
shall be adjusted ratably in any month the Loan is not outstanding for the entire month; and
provided further, that the monthly payment obligation in respect of the Principal Component shall
be adjusted ratably during any period that fewer than twelve (12) Deposit Days are scheduled to
occur prior to the Obligor Payment Date in respect of principal of the Obligor Note.
r- corresponding g .Y
Except as provided in Section 4.4(b) below, Obligor shall not be entitled to any reductions in, or
credits against, deposits to the Debt Service Reserve Account based upon interest or earnings
credited to the Debt Service Reserve Account (including any Debt Service Reserve Investment
Account).
(b) Interest Stabilization Payments and Subsidy. Obligor and the City intend,
notwithstanding the actual rate of interest payable on the Loan and Obligor Note from time to
time, that to the extent feasible, Obligor's monthly interest payment obligations shall be based
upon a deemed rate of interest equal to four percent (4.0%) per annum. The actual interest
payable by Obligor shall be determined as follows:
(i) If the rate or blended rate, as the case may be, of interest on the
Loan and Obligor Note during any month is less than four percent (4.0%) per annum as
calculated under Section 1.3 (b), above, Obligor shall pay to the Custodian on the corresponding
Deposit Day, for deposit into the Debt Service Reserve Account, an amount equal to the interest
payment calculated at four percent (4.0%) per annum, notwithstanding that the actual interest
accruing on the Obligor Note during such period may be less.
(ii) If the actual rate of interest on the Loan and Obligor Note during
any month as calculated under Section 1.3(b), above, exceeds four percent (4%) per annum,
unless the Custodian shall have delivered to Obligor and City a Shortfall Notice (defined in this
section, below), Obligor shall pay to the Custodian on the corresponding Deposit Day, interest at
a rate equal to four percent (4%) per annum on the then -Outstanding principal balance of the
Loan and Obligor Note, and the Custodian shall look to other funds on deposit in the Debt
Service Reserve Account and the EDI Grant Loan Payment Reserve Account to pay the balance
of interest next scheduled to become due on the City Loan; provided, that the Custodian shall
exhaust funds on deposit in the Debt Service Reserve Account from time to time prior to making
any withdrawals from the EDI Grant Loan Payment Reserve Account to pay any portion of the
Interest Component of any monthly deposit; and provided further, that Custodian is not
authorized to and shall not withdraw from the EDI Grant Loan Payment Reserve Account for
Loan Agreement Page 13
such purposes, an aggregate amount greater than Three Hundred Thirty Three Thousand and
Three Hundred Thirty Three Dollars ($333,333.00).
(iii) If not less than five (5) Business Days prior to any Deposit Day the
Custodian determines that there shall or may be insufficient funds available in the Debt Service
Reserve Account and EDI Grant Loan Payment Reserve Account to pay the full amount of
principal and interest, as calculated under Section 1.3(b), above, to become due on the City Note
on the next date such interest is required to be paid, taking into account the expected payment of
interest at a deemed rate of four percent 0.0%) per annum required to be made by Obligor on
such Deposit Day and each subsequent Deposit Day scheduled to occur prior to the
corresponding Obligor Payment Date, the Custodian shall promptly deliver written notice (each,
a "Shortfall Notice") to that effect to the Obligor (with a copy to the City). Upon receipt of any
such Shortfall Notice, and in any event, on or before the corresponding Deposit Day, the Obligor
shall pay to the Custodian, for deposit into the Debt Service Reserve Account, the full amount of
interest actually accruing on the Loan and Obligor Note during the corresponding month as
calculated under Section 1.3 (b), above. Obligor acknowledges and agrees that interest
stabilization payments made by Obligor in accordance with this Section 4.4(b) and deposited in
the Debt Service Reserve Account, together with the earnings thereon, if any, shall be held,
without right of withdrawal or reimbursement.
(c) Transfers Authorized: Crediting Payments on Obligor Note. The Custodian
is hereby irrevocably authorized to transfer funds from the Debt Service Reserve Account to the
Loan Repayment Account on each Obligor Payment Date, in the full amount due on the Obligor
Note on each such date. The Custodian is then authorized and directed to apply funds in the Loan
Repayment Account to the timely payment of amounts due on the City Note. Obligor's monthly
installment payments into the Debt Service Reserve Account shall not constitute payments under
the Obligor Note. Obligor shall be credited with the payment of interest and principal on the
Obligor Note only when and solely to the extent that funds shall be transferred to the Loan
Repayment Account under this Section 4.4(c). The Custodian is further irrevocably authorized by
Obligor to liquidate investments in the Debt Service Reserve Account, in the Custodian's
discretion, and without liability for any loss on any such liquidation, for the purposes described in
this Section 4.4(c). The authorization by Obligor in this Section 4.4(c) is in addition to, and not in
limitation of, the authorization in Section 1.4 above.
(d) Investment of Funds: Earnings Remain on Deposit. Funds in the Debt
Service Reserve Account shall be invested at the direction of City, but only in instruments that
mature (or are redeemable without penalty) within six (6) months and in any event no later than
five (5) Business Days before the next Obligor Payment Date, and that are guaranteed as to
payment of principal by the United States Government, or in money market funds that invest solely
in such instruments. All earnings in the Debt Service Reserve Account shall remain therein until
applied in accordance with this Agreement or until all amounts owing under the Loan Documents
have been paid in full. When all amounts owing under the Loan Documents have been paid in full,
then the remaining balance shall be disbursed to or upon the order of the City.
Loan Agreement Page 14
(e) Late Charge. If any deposit required to be made into the Debt Service
Reserve Account is not received w ithin ten (10) days after the date when such deposit is due, in
addition to additional interest required to be paid in accordance with the Obligor Note, Obligor
agrees to pay a late charge equal to five percent (5.0%) of the amount past due, as compensation to
the City and Custodian for the staff time and resources required to handle such delinquencies, and
not as a penalty. Such late charges shall not be credited to the Debt Service Reserve Account or
Loan Repayment Account, but shall be retained by the City and/or Custodian. Late charges under
this section are in addition to, and not in substitution for, the other remedies provided in the Loan
Documents.
4.5 Application of Payments. Any amounts transferred into the Loan Repayment
Account in accordance with this Agreement shall be applied first to accrued interest on the Obligor
Note, next to any premium then due, and the balance, if any, to reduction of principal.
Notwithstanding the foregoing, Custodian hall have u�.. City or shall the right, each in its respective
discretion, to apply funds available in the Debt Service Reserve Account to fees, costs,
reimbursements, and late charges then due under the Loan Documents prior to application of funds
against the Obligor Note.
ARTICLE V — OBLIGOR'S LOAN COVENANTS
Obligor covenants and agrees as follows:
5.1 General. From and after the date hereof and so long as any amount remains unpaid
on the Obligor Note, or for so long as any commitment exists to extend credit hereunder, Obligor
covenants and agrees that:
(a) Obligor shall promptly pay principal, interest, and premium (if any)
pursuant to the Obligor Note as and when the same becomes due and payable, and make any and all
other payments and deposits required by the Loan Documents;
(b) Obligor shall maintain, preserve, and keep the Property in good condition,
except for ordinary wear and tear, and from time to time make all necessary repairs, renewals, and
replacements.
5.2 Compliance with Laws. Run its business in compliance with all material respects
with all applicable laws, ordinances, rules and regulations and executive orders of federal, state,
county or municipal governments or agencies now in force or which may be enacted hereafter.
5.3 Inspections. Upon written notification by City to Obligor, City and its
representatives shall have the right to inspect and copy Obligor's books and records relating to its
business. Without limiting the foregoing, Obligor shall permit City to examine and copy all books,
records and other papers relating to Obligor's use of the Loan proceeds and to Obligor's
Loan Agreement Page 15
•
compliance with this Agreement, the Act, and applicable provisions of federal, state, and local laws,
ordinances, rules and regulations.
5.4 Notify City of Litigation or Complaints. Obligor shall promptly notify City in
writing of all litigation or threatened litigation involving its business or the Property, and any other
litigation that reasonably could have a material adverse affect on the financial condition of Obligor,
and of all complaints or charges made by any governmental authority affecting Obligor.
5.5 Federal Reguulatione acknowledges be with
ar____.,_..,. Obligor acknowledges that the Loan is to made funds
received by the Custodian under the Section 108 program of the Act and that such funds are subject
to CDBG program regulations of HUD, and certain other federal laws and regulations.
Accordingly, Obligor agrees, represents, and warrants that Obligor shall comply with all applicable
requirements under HUD regulations for the CDBG program and under other laws and regulations
applicable to loans of such federal funds, including without limitation:
(a) Benefit to Low- and Moderate Income Individuals. Obligor's Project shall
benefit low- and moderate -income individuals (as defined by HUD) to the maximum extent
feasible. The Project shall result in the creation of at least twenty-five new permanent jobs (full-
time equivalent). Obligor shall provide quarterly reports containing data required by the City on
the jobs created and the demographics of persons initially interviewed and hired for such jobs, as
set forth in Attachments H and I and fully incorporated herein. Obligor shall provide the reports on
January 15, April 15, July 15, and October 15 and shall continue to provide the reports until twenty-
five full time equivalent permanent jobs are created (e.g. if two half time positions are created, that
counts for one full time equivalent position). If Obligor fails to submit the report within fifteen
days after the due date, the City may, in its sole discretion, increase the interest rate on the Loan to
the greater of the variable interest rate in effect (as set forth in Section 1.3(b) above) or 12%. The
City must give Obligor notice of its intent to increase the interest rate under this section and ten
days to cure before increasing the interest rate. Once the City increases the interest rate under this
section, it shall remain at that level until Obligor submits its reports. City retains the right to the
increased interest paid and Obligor cannot offset the increased interest against any future payments.
(b) Nondiscrimination. No person shall on the grounds of race, color,
national origin, religion, or sex be excluded from participation in, be denied the benefits of, or be
subjected to discrimination under any program or activity funded in whole or in part with CDBG
funds. Obligor shall comply fully with all requirements of Title VI of the Civil Rights Act of 1964,
42 U.S.C. 2000d et seq., which provides that no person in the United States shall on the ground of
race, color, or national origin, be excluded from participation in, denied the benefits of, or be
subjected to discrimination under any program or activity receiving Federal financial assistance;
and with Department of Housing and Urban Development ("HUD") regulations implementing such
requirements, 24 C.F.R. Part 1.
Obligor shall comply with all applicable requirements and prohibitions of the
following: 24 C.F.R. Section 570.602, implementing the nondiscrimination requirements of Section
109 of the Act; HUD regulations under the Rehabilitation Act of 1973, as amended, 24 C.F.R. Part
Loan Agreement Page 16
8; HUD Regulations under the Americans with Disabilities Act; and HUD regulations under the
Age Discrimination Act of 1975, 42 U.S.C. Section 6101 et seq., at 24 C.F.R. Part 146.
No otherwise qualified handicapped individual in the United States shall, solely
because of handicap, be excluded from the participation in, be denied the benefits, or be subjected
to discrimination under any program or activity receiving Federal financial assistance.
(c) Conflict of Interest. Obligor shall ensure compliance with the provisions of
24 C.F.R. Section 570.611 _ which provide generally that no officer, agent, employe, itan
-> r-� ate"'��"'", employee, consultant, or
elected or appointed official of The City of Yakima or of any subrecipient receiving CDBG funds
who exercises or has exercised any functions or responsibilities with respect to activities assisted by
CDBG funds or who is in a position to participate in a decision-making process or gain inside
information with respect to these activities, shall obtain any financial interest or benefit from, or
have any financial interest in, the activity funded under this Loan Agreement
greerent or any contract or
subcontract or agreement with respect thereto or the proceeds thereof, for himself or herself or those
with whom he or she has business or immediate family ties; nor shall (s)he for one year after
completion of his or her tenure with the City or such subrecipient obtain or have any such financial
interest or benefit. Obligor shall incorporate in all such contracts or subcontracts a provision
prohibiting any conflict of interest prohibited by this subsection.
(d) Lobbying. Obligor hereby certifies and agrees as follows, in accordance
with 31 U.S.C. Section 1352, to the best of its knowledge and belief:
(1) No Federal appropriated funds have been paid or will be paid, by or
on behalf of Obligor, to any person for influencing or attempting to influence an officer or
employee of any agency, a member of Congress, an officer or employee of Congress, or an
employee of a member of Congress in connection with the awarding of any Federal contract, the
making of any Federal loan, the entering into of any cooperative agreement, and the extension,
continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or
cooperative agreement;
(2) If any funds other than Federal appropriated funds have been paid or
will be paid to any person for influencing or attempting to influence an officer or employee of any
agency, a member of Congress, an officer or employee of Congress, or an employee of a member of
Congress in connection with this Federal loan, it will complete and submit Standard Form
"Disclosure Form to Report Lobbying," in accordance with its instructions; and
(3) It will require that the language of this section be included in the
award documents for subawards at all tiers (including subcontracts, subgrants, and contracts under
grants, loans and cooperative agreements) and that all subrecipients shall certify and disclose
accordingly.
This certification is a material representation of fact upon which reliance was placed
when this transaction was made or entered into. Submission of this certification is made a
Loan Agreement Page 17
prerequisite for making or entering into this transaction by section 1352, title 31, U. S. Code. Any
person who fails to file the required certification shall be subject to a civil penalty of not less than
$10,000 and not more than $100,000 for each such failure.
(e) Economic Opportunities for Low- and Very Low -Income Persons. Obligor
shall comply, and cause all contractors and subcontractors to comply, with any and all applicable
provisions of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12
U.S.C. 1701u, the purpose of which is to ensure that employment and other economic opportunities
generated by Federal financial assistance for housing and community development programs shall,
to the greatest extent feasible, be directed toward low- and very low-income persons, particularly
those who are recipients of government assistance for housing. Obligor shall comply, and shall
require all contractors and subcontractors to comply, with all applicable provisions of regulations
issued pursuant thereto by the Secretary of HUD and set forth in 24 C.F.R. Part 135, and with all
,-,.1.� .1 ll,...., .� L-_ TTTtr\
applicable �u1es and orders issued by r�UL.
(f) Records. Obligor shall maintain and make available to the City and HUD
all records reasonably required to demonstrate compliance with all of the requirements of this
Agreement, for at least four (4) years after full repayment of the Loan.
(g) Disclosures. Obligor represents, warrants, and agrees that it has provided
to City any and all disclosures required by the HUD Reform Act, 42 U.S.C. Section 3545, and
regulations thereunder, 24 C.F.R. Part 4; that it will provide timely updated disclosures to City to
the extent required by such act and regulations; and that all such disclosures are and shall be
complete and accurate.
(h) Prior Actions. Obligor represents and warrants that in all actions related to
the Project to date Obligor has complied with all requirements referred to in this Section 5.6.
(1) Indemnity. Obligor shall indemnify and hold harmless the City from any
loss, damage, expense, claim or demand resulting from Obligor's failure to comply with any federal
requirement to be complied with pursuant to this Agreement or failure to maintain adequate records
to demonstrate such compliance. Obligor shall indemnify and hold harmless the City from any
loss of value for the Property, including but not limited to any environmental or hazardous waste
issue. This provision shall survive expiration of this Agreement.
5.6 Reports. Obligor shall deliver to the City reports and information as City may
require for purposes of monitoring and evaluating the performance of the Obligor.
5.7 Liens or Claims of Liens. Obligor keep the Property free from liens and
encumbrances of all kinds, superior or inferior to the Deed of Trust, except for those permitted
pursuant to Section 2.4 above and any of the following:
(a) Liens for property taxes on the Property not yet due and payable;
Loan Agreement Page 18
(b) Mortgage
(c) Liens subordinate to the lien of the Deed of Trust, created after the date of
Closing with the prior written consent of the City, which consent shall not be unreasonably
withheld.
If any claims of lien shall be asserted against the Property other than as permitted by this
section, Obligor, regardless of any action that City may otherwise be authorized to take, shall obtain
a release and satisfaction of such lien claim, bond the lien claim, procure title insurance satisfactory
to City protecting City from any loss relating to such lien claim, or otherwise provide to City
assurances and security satisfactory to City that the lien claim will be paid or satisfied not later than
ten (10) days after a judgment on the lien claim. If such a lien claim is not released or satisfied or a
bond or other security satisfactory to City provided within forty-five (45) days of written request
from City to Obligor, then the failure to do so shall alloy the City to declare an Event of Default (as
defined in Section 6.1 below) regardless of whether such lien claim is or is not superior to the Deed
of Trust.
5.8 Political Activity. No portion of the Loan shall be used for any political activity or
to further the election or defeat of any candidate for public office or to influence the approval or
defeat of any ballot issue or legislation.
5.9 Further Actions. Obligor will at any time and from time to time upon request of
City take or cause to be taken any action, execute, acknowledge, deliver or record any further
documents, opinions, or other instruments or obtain such additional insurance as City is required to
do or obtain by HUD or other federal, state or county regulatory agency.
5.10 Payment of Compensation of Custodian. Obligor shall be responsible for and pay
the fees of the Custodian as provided under the Custodial Agreement. The Custodian's acceptance
fee, prorated first annual fee and counsel fees and expenses shall be disbursed to Custodian from
the Guaranteed Loan Funds Account at the time of initial Loan disbursement. The Custodian is
hereby authorized to withdraw from interest and/or investment earnings on the Debt Service
Reserve Account established pursuant to such Custodial Agreement up to the amount of its annual
fee and any other fees and expenses to which it is entitled thereunder, and if such interest and/or
investment earnings are insufficient to pay in full the Custodian's fees and expenses, then upon
Custodian's notice thereof to Obligor, Obligor shall promptly pay the remaining amount of the
Custodian's fees and expenses directly to the Custodian.
5.11 Payment of Other Indebtedness. Obligor shall timely pay the principal, interest and
all other amounts due on any other indebtedness or liability now or hereafter owing by the Obligor
to any person and secured by the Property; provided, that nothing in this section shall authorize
Obligor to make any payment from any funds or assets pledged to the City hereunder.
5.12 Transfer of Property. Obligor transfer the Property or any interest of Obligor
therein, voluntary or involuntary, without the advance written consent of the City, except for the
Loan Agreement Page 19
creation of liens, encumbrances, or leases that are expressly permitted under the Loan Documents
without the City's consent.
ARTICLE VI — DEFAULT AND REMEDIES
6.1 Events of Default. Upon the occurrence of any of the following events and prior to
the complete cure thereof by Obligor in a manner satisfactory to the City, the City shall have the
right to declare an Event of Default here'ander, without notice or demand by /lty,
, except as
expressly provided in this section:
(a) Any failure to pay when due any deposit into the Debt Service Reserve Fund
in respect of principal or interest on the Obligor Note;
(b) Any failure to make a payment or deposit of money required by any of the
Loan Documents, other than amounts referred to in Section 6.1(a) above, that is not cured within
ten (10) days of the due date of such payment or deposit (or within ten (10) days of demand in case
of amounts due on demand);
(c) Any transfer of the Property or any interest therein, voluntary or involuntary,
contrary to Section 5.12 of this Loan Agreement;
(d) Any failure to comply with the terms of Section 5.7 of this Loan Agreement
(relating to lien claims) within the time period permitted by such Section;
(e) Any breach or nonperformance by Obligor of any provision of any of the
Loan Documents not included within any of Subsections (a) -(d) above that is not cured within sixty
(60) days after notice to Obligor of such breach or nonperformance, or such longer cure period as
may be permitted under the specific terms of the Loan Document; provided, however, that unless
HUD shall otherwise require, if (1) such breach or nonperformance is susceptible to cure but cannot
reasonably be cured within such cure period, (2) Obligor shall commence to cure such breach or
nonperformance within such cure period and shall thereafter diligently and expeditiously proceed to
cure the same, and (3) Obligor shall inform the City in writing of the status of the cure at the
expiration of such cure period and every thirty days thereafter, then such cure period shall be
extended for such time as is reasonably necessary for Obligor in the exercise of due diligence to
cure such breach or nonperformance;
(f) A petition in bankruptcy or for reorganization or for an arrangement under
any bankruptcy or insolvency law or for a receiver or trustee for any of Obligor's property is filed
by Obligor, or is filed against Obligor and is not dismissed within ninety (90) days, or if Obligor
makes an assignment for the benefit of creditors or becomes insolvent or unable to pay its debts as
they mature or any attachment or execution is levied against a substantial portion of the property of
• Obligor and is not discharged within ninety (90) days, or if any law or court order shall require the
City, Custodian or any other party to refund or otherwise relinquish any portion of any amount paid
Loan Agreement Page 20
under the Obligor Note or this Agreement as a preference or for any other reason except refund of
duplicative payment;
(g) Any representation, warranty or disclosure made to City by Obligor, or
contained in any information submitted by Obligor to City or to any government agency in
connection with the Loan or the Property, proves to be materially false or misleading as of the date
when made or reaffirmed, whether or not such representation or disclosure appears in this
Agreement.
6.2 Declaration of Event of Default. City's declaration of an Event of Default
hereunder shall be made by notice to Obligor pursuant to Section 7.15 of this Agreement and shall
be effective as provided therein.
6.3 Remedies.
(a) Upon declaring an Event of Default, City may, in addition to any other
remedies that City may have hereunder or under the Loan Documents or by law, at its option and
without prior demand or notice take any or all of the following actions:
(1) Immediately terminate any further advances of Loan funds
hereunder and revoke any instructions to any third party holding any such funds;
(2) Cause the Custodian to stop making interest subsidy payments;
(3) Declare the Loan immediately due and payable in full;
(4) Foreclose under the Deed of Trust, judicially or nonjudicially;
(5 Apply any or all funds in the Reserve Accounts to amounts due
under the Loan Documents, whether by reason of acceleration or otherwise, and cause investments
in such accounts to be liquidated for such purpose; and
(6) Seek judicial appointment of a receiver.
(b) All remedies of City provided for herein and in any other Loan Documents
are cumulative and shall be in addition to all other rights and remedies provided by law. The
exercise of any right or remedy by City hereunder shall not in any way constitute a cure or waiver
of default hereunder or under any other Loan Document or invalidate any act done pursuant to any
notice of default, or prejudice City in the exercise of any of its rights hereunder or under any other
Loan Documents unless, in the exercise of said rights, City realizes all amounts owed to it under
such Loan Documents.
• 6.4 No Default Prior to Declaration. No default or Event of Default shall exist under
this Agreement or the Obligor Note until the same shall have been declared by the City or other
Loan Agreement Page 21
•
party authorized to make such declaration; provided, that failure to declare, or delay in declaring, a
default hereunder shall not constitute a waiver of any rights or remedies or excuse any failure by
Obligor to strictly comply with its obligations under all of the Loan Documents.
ARTICLE VII — MISCELLANEOUS
7.1 No Waiver. No waiver of any noncompliance or breach by Obligor hereunder shall
be implied from any failure by City to take action on account of such noncompliance or breach, and
no express waiver shall affect any breach or noncompliance other than as specified in the waiver.
Any waiver shall be operative only for the time and to the extent therein stated. Waivers of any
covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent
breach of the same covenant, term or condition. The consent or approval by City to, or of, any act
by Obligor requiring further consent or approval shall not be deemed to waive or render
y...�. .g
unnecessary the consent or approval to, or of, any subsequent similar act.
7.2 Successors and Assigns: Delegation to Custodian; Changes in Custodian and
Custodial Agreement. This Agreement is made and entered into for the sole protection and benefit
of City, HUD, and Obligor, their successors and assigns, and no other person or persons shall have
any right of action hereunder. The terms hereof shall inure to the benefit of the successors and
assigns of the parties hereto; provided, however, that the Obligor's interest hereunder cannot be
assigned or otherwise transferred without the prior written consent of City. Obligor acknowledges
and agrees that City may assign to HUD or any custodian or trustee for HUD any or all of City's
rights under this Agreement and any of the Loan Documents and may direct that any payment or
perfoimance be provided directly to HUD or such custodian or trustee, whether or not the Obligor
Note or this Agreement have been assigned. Obligor agrees that City may delegate to the
Custodian the right to make demands and give directions on behalf of City under the Loan
Documents, but that the scope of any such delegation shall be strictly limited to the teens of a
written instrument duly signed on behalf of the City. Obligor further acknowledges that the
Custodial Agreement may be modified or terminated, or a substitute Custodial Agreement
executed, or a successor Custodian appointed, in each case without the consent of Obligor so long
as the obligations of Obligor are not increased and the rights of the Obligor under the Loan
Documents are not adversely affected in any material respect. Except for minor modifications to
the Custodial Agreement not affecting Obligor, City agrees to give reasonable advance notice to the
Obligor of any action as described in the preceding sentence, and agrees in each case to provide a
copy of any modification or substitute Custodial Agreement to Obligor within fifteen (15) days
after the execution thereof.
7.3 No Defense Based on City Regulatory Actions. Obligor understands that (a) the
operations of Obligor are subject to numerous laws, regulations, ordinances and permits, including
those of City and other governmental bodies, and (b) the modification, interpretation, application,
or revocation of such laws, regulations, rules or permits could adversely affect economic return to
Obligor. Obligor has conducted its own investigation and relied on the advice of its own counsel
and experts as to all such matters in connection with Obligor's expanding its product line. Obligor
Loan Agreement Page 22
•
acknowledges that by entering into this Agreement the City does not make, and that the City
expressly disclaims, any representation or assurance whatever as to the availability, issuance or
continuation of any permits, approvals, or interpretations of any kind that may be required or
desired by Obligor or any other party in connection with its operations. Obligor agrees that
notwithstanding any regulatory action or omission of City affecting Obligor, no defense, offset or
reduction of liability shall be available to Obligor, at law or in equity.
7.4 Time. Time is of the essence of all provisions of the Loan Documents.
7.5 Entire Agreement: Amendments. This Agreement, the other Loan Documents, and
the documents, laws and regulations incorporated by reference herein constitute the entire
agreement of the parties hereto with respect to the Loan and supersede any prior agreements or
understandings, written or oral, with respect to the Loan. Obligor is not relying upon any promises,
representations or understandings, written or oral, in entering into the Loan Documents, other than
as expressly set forth in the Loan Documents. The obligations of Obligor under the Loan
Documents are not conditioned upon, and shall not be affected by, any other agreement,
understanding, performance or nonperformance by the City or any other party, and in any
proceeding to enforce any of Obligor's obligations under the Loan Documents, Obligor shall not be
entitled to assert, by way of excuse, offset, counterclaim, grounds for equitable relief, or otherwise,
any actual or alleged action or inaction by or on behalf of the City except to the extent that any such
action or inaction is expressly required of the City by, and is made a condition of Obligor's
obligation by, the Loan Documents. No amendment, modification, or termination of any
provisions of this Agreement or of any of the Loan Documents shall in any event be effective
unless the same shall be in writing and signed by a duly authorized officer of City and by Obligor,
and no such writing shall be construed to modify, waive, or affect the terms of the Loan Documents
except to the extent that such document expressly so provides.
7.6 Headings. The article and section headings in no way define, limit, extend or
interpret the scope of this Agreement or of any particular article or section.
7.7 Number and Gender. When the context in which the words are used in this
Agreement indicates that such is the intent, words in the singular number shall include the plural
and vice -versa. References to any one gender shall also include the other gender if applicable under
the circumstances.
7.8 Validity. In the event that any provision of this Agreement shall be held to be
invalid, the same shall not affect in any respect whatsoever the validity of the remainder of this
Agreement.
7.9 Goveming Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Washington and The City of Yakima, except to the extent federal law
applies.
Loan Agreement Page 23
•
7.10 Survival. All agreements, representations and warranties made herein and in the
Obligor Note shall survive the execution and delivery of this Agreement and of the Loan
Documents and the making of the Loan hereunder and continue in full force and effect until the
obligations of Obligor hereunder and the indebtedness evidenced by the Obligor Note have been
fully paid and satisfied, and thereafter to the extent provided in the Loan Documents, regardless of
whether the Obligor Note is surrendered or marked as canceled or paid in full.
7.11 Venue and Forum. In the event that any legal action should be filed by either party
other, venue and for such
against the the forum action snail be the Superior Court of the State of
Washington for the County of Yakima.
7.12 Attorney's Fees. In the event either party shall bring an action to enforce the terms
and conditions of this Agreement, the prevailing party shall be entitled to recover all of its costs and
expenses, including, but not limited to, reasonable attorney's fees as determined by the court.
7.13 Duplicate Originals: Counterparts. This Agreement shall be executed in duplicate
and each of the parties hereto shall receive an original. Each original shall constitute one and the
same agreement. This Agreement may be executed in counterparts, and each such counterpart shall
be deemed to be an original.
7.14 Construction. The Loan Documents shall be construed so as to conform to the
requirements of the HUD Contract and applicable federal laws and regulations. The Loan
Documents are the product of negotiation between the parties and therefore shall not be construed
strictly in favor of, or against, either party except as may be specifically provided in the Loan
Documents with respect to particular provisions thereof.
7.15 Notices. Any notice, demand or request required hereunder shall be given in
writing at the addresses set forth below by personal service, by facsimile transmission, or by first
class mail. The addresses may be changed by notice to the other party given in the same manner as
provided above. Notices personally served or sent be facsimile shall be effective when actually
received during normal business hours, and otherwise on the following Business Day. If notice is
given by mail, it shall be deemed received on the earlier of: (i) if by certified mail, the date of
receipt as shown on the return receipt, or (ii) three (3) days after its deposit in the U.S. mail.
If to Obligor: Seong and Helen Kim
If to City:
Yakima, Washington 9890
fax:
Department of Economic and Community Development
City of Yakima
129 N. 2nd Street
Yakima, Washington 98901
Attn: Director
Loan Agreement Page 24
•
fax: 509-576-6792
IN WITNESS WHEREOF, Obligor and City have executed this Agreement as of the date
first written above by and through their duly authorized representatives;
CITY: THE CITY OF YAKIMA, a Washington municipal corporation
.j,C/
Print N. e: R. A. Zais, Jr
City Manager
OBT IGOR:
By:
By:
Helen Kim
Loan Agreement Page 25
LIST OF ATTACHMENTS
Attachment A Form of Obligor Note
Attachment B Deed of Trust
Attachment C Deposit Account Control Agreement
- Attachment D Title Insurance for Property
Attachment E Disbursement Request
Attachment F InterimExpenJeJ Agreement
Attachment G Demand Note
Attachment G Job Creation Summary Report
Attachment H Income Verification Form
F:\CLIENTS\DAB\YAKIMA\ICim - 103\loan docs\Loan Agreement v.3.a.doc
Loan Agreement Page 26
•
VARIABLE/ FIXED RATE PROMISSORY NOTE
Yakima Washington $330,000.00
July 2003
FOR VALUE RECEIVED, SEONG AND HELEN KIM, husband and wife,
who are dba Peppers Restaurant ("Obligor"), a sole proprietorship, promises to
pay to THE CITY OF YAKIMA, WASHINGTON ("Payee"), a Washington
municipal corporation, or order, at Yakima, Washington, at the time or times
provided herein, the sum of Three Hundred Thirty Thousand Dollars
($330,000.00), with interest as provided herein.
RECITALS
This Note is given to evidence a loan (the "Loan") made pursuant to the
Loan Agreement dated July, 2003 (as supplemented or amended from time
to time, the "Loan Agreement"), between the Obligor and the Payee. The funds
used by the Payee to make the Loan have been obtained by Payee exclusively
through loan proceeds from a loan evidenced by a Promissory Note in the total
principal amount of $4,000,000 issued by the Payee (the "City Note") pursuant
to Section 108 of the Housing and Community Development Act of 1974 as
amended (42 USC §5308) and 24 CFR 570.700, et seq., pursuant to which the
Payee has entered into certain agreements, including, but not limited to: (a)
with the United States Department of Housing and Urban Development
("HUD"), a Contract for Loan Guarantee Assistance, (b) with HUD, the
Application for Loan Guarantee, , (c) with HUD and JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank), an Amended and Restated
Master Fiscal Agency Agreement, and (d) with JPMorgan Chase Bank, an
Indenture of Trust and Custodial Agreement which documents, as amended or
amended from time to time, may be referred to collectively as the "Master
Agreement"). The Obligor acknowledges and agrees that the Loan has been
made subject to all of the terms and conditions of the Master Agreement and
the City Note. Any capitalized terms not defined herein shall have the
meanings provided in the City Note, the Loan Agreement or the Master
Agreement as applicable.
AGREEMENT
NOW, in consideration of the Recitals and the covenants, conditions,
representations, and warranties contained here, the parties agree as follows:
1. Variable Interest Rate. Loan advances made from time to time in
accordance with the terms of this Note and the Loan Agreement ("Advance")
shall bear interest from the date of the Advance and at the rates applicable
Promissory Note Page 1
•
to the corresponding Advances made under the City Note until repayment of
the loan is made in full. Initially, such interest shall accrue at a variable
interest rate on the unpaid principal balance of each Advance. The initial
variable interest rate for each Advance hereunder will be set on the date of
such Advance and will be equal to twenty basis points (0.2 %) above the
Applicable LIBO Rate (as hereinafter defined) and thereafter will be adjusted
monthly on the first day of each month (each, a "Reset Date") to a variable
interest rate equal to twenty basis points (0.2 %) above the Applicable LIBO
Rate (such interest rate, as reset from time to time, the "Standard Note
Rate"). If the Conversion Date for the City Note has not occurred by nine
and one half years following the initial Advance thereunder, then the
variable interest rate hereunder will be equal to the variable interest rate on
the City Note set pursuant to the terms of Appendix A to the City Note. If
the Fiscal Agent does not receive notice of either a Negotiated Special
Interest Rate or Holder Determined Special Interest Rate (as defined in
Appendix A to the City Note) from the Secretary or Holder, respectively, by
the times specified in Appendix A to the City Note, then the Standard Note
Rate shall apply for the period to which such Negotiated Special Interest
Rate or Holder Determined Special Interest Rate would otherwise apply.
1.1. "LIBO Rate" for any given Business Day means, except in the case
of manifest error, the interest rate per annum published on that day in
the Eastern Edition of The Wall Street Journal or any successor
publication ("WSJ"), published by Dow Jones 86 Company, Inc., in the
section titled "Money Rates" (or any successor section) and opposite the
caption "London Interbank Offered Rates (LIBOR) -- three months" (or
any successor caption). If such rate does not appear in WSJ on a given
Business Day, for each interest period, the LIBO Rate shall be the
interest rate, converted to a bond -equivalent yield basis, for deposits in
U.S. dollars for three months which appears on Telerate Page 3750 or
such other page as may replace Page 3750 on that service or such other
service or services as may be nominated by the British Bankers'
Association for the purpose of displaying such rate (together, "Telerate
Page 3750") as of 11:00 a.m., London time, on the day (the
"Determination Date") that is two London Banking Days preceding the
relevant Reset Date or Advance. If such rate does not appear on Telerate
Page 3750 on such Determination Date, such rate shall be obtained
from the Reuters Screen ISDA Page as of 11:00 a.m., London time, on
such Determination Date. If, in turn, such rate does not appear on the
Reuters Screen ISDA Page on such Determination Date, the offered
quotation from each of four reference banks (expressed as a percentage
per annum) as of approximately 11:00 a.m., London time, on such
Determination Date for deposits in U.S. dollars to prime banks on the
London interbank market for a 3 -month period, commencing on the
Promissory Note Page 2
Reset Date or date of such Advance, shall be obtained. If at least two
such quotations are provided, the LIBO Rate for such Reset Date or date
of such Advance will be the arithmetic mean of the quotations, rounded
to five decimal places. If fewer than two such quotations are provided as
requested, the LIBO Rate for that Determination Date shall be the rate
for the most recent day preceding such Determination Date for which
the LIBO Rate shall have been displayed on Telerate Page 3750. The
LIBO Rate for any interest period shall be converted to a bond -
equivalent yield basis by multiplying such rate by the actual number of
Vl
days in such interest period and dividing that number by 180.
1.2. "Applicable LIBO Rate" means: (1) with respect to the initial
interest rate for the first Advance hereunder, the LIBO Rate two London
Banking Days before the date of such first Advance; (2) with respect to
the initial interest rate for any subsequent Advance made before the first
Reset Date, the interest rate borne by the first Advance; (3) with respect
to the initial interest rate for any subsequent Advance made after the
first Reset Date, the LIBO Rate two London Banking Days before the
immediately preceding Reset Date; and (4) with respect to the
subsequent interest rate at any Reset Date for any Advance, the LIBO
Rate two London Banking Days before such Reset Date.
1.3. "London Banking Day" means any day in which dealings in
deposits in United States dollars are transacted in the London interbank
market.
2. Principal Amount. Prior to the Conversion Date, the aggregate amount of
Advances under this Note for each specified Principal Due Date under the
City Note shall be the Principal Amount to be paid by Payee on such
Principal Due Date (as assigned in accordance with the Master Agreement),
except to the extent such Principal Amount shall have been reduced by
prepayment before such Principal Due Date as provided herein.
3. Conversion Date. On the Conversion Date (whether conversion to a fixed
rate or rates is effected with the consent of the Obligor or otherwise), all
Advances owed by the Obligor under this Note with the same Principal Due
Date shall be aggregated into a single Principal Amount, which will accrue
interest at the fixed rate determined as provided in Appendix A to the City
Note. So long as no default shall have occurred under this Note and the other
Loan Documents which has not been cured or waived in accordance with the
terms hereof and thereof, the Payee shall not request or consent to conversion
of the interest rate on the City Note to a fixed rate or rates, without the prior
written consent of the Obligor. However, Obligor acknowledges and agrees
that under the HUD Contract, HUD will have the unilateral right (with or
without notice to or consent of the Payee and/or Obligor) to fix the interest
payable on the City Note.
Promissory Note Page 3
4. Calculate Interest. Interest payable on or before the Conversion Date shall
be calculated based on a 360 -day year and the actual number of days
elapsed. Interest after the Conversion Date shall be calculated based on a
360 -day year consisting of twelve 30 -day months.
5. Payment of Principal and Interest. The principal of and interest on this Note
shall be due and payable at the same time correlative principal of and
interest on the City Note is due and payable. Such interest is due and
payable quarterly in arrears on February 1, May 1, August 1, and November
1, and such principal is due as set out on Exhibit 1 attached hereto and
incorporated herein by this reference. Payments of principal of and interest
on this Note shalt be made to the Loan Repayment Account.
5.1. In order to ensure timely payment of such principal and interest,
commencing in the first month disbursement of principal of the City
Note in respect of this Note is to be made, Obligor shall make monthly
installment payments to the Custodian for deposit in an account
maintained by the Custodian for the accumulation of funds for
payments on this Note (the "Debt Service Reserve Account," which term
shall include any related Debt Service Reserve Investment Account
established under the Custodial Agreement and Letter Agreements) .
Each such monthly payment shall be due and payable, in immediately
available funds, on the "Deposit Day," which shall be the fifteenth (15th)
day of the month, or if such day is not a Business Day, then on the
previous Business Day; provided that the Deposit Day in respect of any
Conversion Date shall be the day which is two Business Days prior to
the Conversion Date.
5.2. Subject to the provisions of the next section, each such payment
shall be in an amount equal to the actual interest accruing on this Note
during the corresponding month (the "Interest Component"), at the rate
or blended rate, as the case may be, then in effect, plus one -twelfth
(1/12th) of the total principal coming due on this Note on the next
scheduled principal payment date ("Principal Component"); provided,
that the monthly payment obligation in respect of the Interest
Component shall be adjusted ratably during any month the Loan is not
outstanding for the entire month; and provided further, that the
Principal Component shall be adjusted ratably during any period that
fewer than twelve (12) Deposit Days are scheduled to occur prior to the
corresponding Obligor Payment Date (as such term is defined in the next
paragraph of this Note) in respect of a principal payment on this Note.
5.3. Except as provided in the next section, Obligor shall not be
entitled to any reductions in, or credits against, deposits required to be
Promissory Note Page 4
•
made to the Debt Service Reserve Account based upon interest or
earnings credited to the Debt Service Reserve Account (including any
Debt Service Reserve Investment Account). The Obligor hereby
irrevocably authorizes the Custodian to transfer funds from the Debt
Service Reserve Account to the Loan Repayment Account on each
Obligor Payment Date, in the full amount due on this Note on each such
date. Obligor's monthly installment payments into the Debt Service
Reserve Account shall not constitute payments under this Note. Obligor
shall be credited with the payment of interest nn and the principal of
this Note only when and solely to the extent that funds shall be
transferred to the Loan Repayment Account in accordance with the
terms of the Loan Agreement and this Note. The Custodian is further
irrevocably authorized by Obligor to liquidate investments in the Debt
Service Reserve Account, in the Custodian's discretion, and without
liability for any loss on any such liquidation, for the purposes described
in this paragraph.
6. Interest Subsidy. Interest Stabilization Payments and Subsidy. Obligor and
the City intend, notwithstanding the actual rate of interest payable on the
Loan and Obligor Note from time to time, that to the extent feasible,
Obligor's monthly interest payment obligations shall be based upon a
deemed rate of interest equal to four percent (4.0%) per annum. The actual
interest payable by Obligor shall be determined as follows:
6.1. If the rate or blended rate, as the case may be, of interest on
the Loan and Obligor Note during any month is less than four
percent (4.0%) per annum as calculated under Paragraph 1.3(b),
above, Obligor shall pay to the Custodian on the corresponding
Deposit Day, for deposit into the Debt Service Reserve Account, an
amount equal to the interest payment calculated at four percent
(4.0%) per annum, notwithstanding that the actual interest
accruing on the Obligor Note during such period may be less.
6.2. If the actual rate of interest on the Loan and Obligor Note
during any month as calculated under Paragraph 1.3(b), above,
exceeds four percent (4%) per annum, unless the Custodian shall
have delivered to Obligor and City a Shortfall Notice (defined in
this Section, below), Obligor shall pay to the Custodian on the
corresponding Deposit Day, interest at a rate equal to four percent
(4%) per annum on the then -Outstanding principal balance of the
Loan and Obligor Note, and the Custodian shall look to other
funds on deposit in the Debt Service Reserve Account and the EDI
Grant Loan Payment Reserve Account to pay the balance of
interest next scheduled to become due on the City Loan; provided,
Promissory Note Page 5
that the Custodian shall exhaust funds on deposit in the Debt
Service Reserve Account from time to time prior to making any
withdrawals from the EDI Grant Loan Payment Reserve Account to
pay any portion of the Interest Component of any monthly deposit;
and provided further, that Custodian is not authorized to and
shall not withdraw from the EDI Grant Loan Payment Reserve
Account for such purposes, an aggregate amount greater than
Three Hundred Thirty Three Thousand and Three Hundred Thirty
Three Dollars ($333,333.00).
6.3. If not less than five (5) Business Days prior to any Deposit
Day the Custodian determines that there shall or may be
insufficient funds available in the Debt Service Reserve Account
and EDI Grant Loan Payment Reserve Account to pay the full
amount of principal and interest, as calculated under Paragraph
1.3(b), above, to become due on the City Note on the next date
such interest is required to be paid, taking into account the
expected payment of interest at a deemed rate of four percent
(4.0%) per annum required to be made by Obligor on such Deposit
Day and each subsequent Deposit Day scheduled to occur prior to
the corresponding Obligor Payment Date, the Custodian shall
promptly deliver written notice (each, a "Shortfall Notice") to that
effect to the Obligor (with a copy to the City). Upon receipt of any
such Shortfall Notice, and in any event, on or before the
corresponding Deposit Day, the Obligor shall pay to the
Custodian, for deposit into the Debt Service Reserve Account, the
full amount of interest actually accruing on the Loan and Obligor
Note during the corresponding month as calculated under
Paragraph 1.3(b), above. Obligor acknowledges and agrees that
interest stabilization payments made by Obligor in accordance
with this Section 4.4(b) and deposited in the Debt Service Reserve
Account, together with the earnings thereon, if any, shall be held,
without right of withdrawal or reimbursement.
7. Late Charge. If any deposit required to be made into the Debt Service Reserve
Account is not received within ten (10) days after the date when such deposit
is due, in addition to additional interest required to be paid in accordance
with this Note, Obligor agrees to pay a late charge equal to five percent (5.0%)
of the amount past due, as compensation to Payee for the staff time and
resources required to handle such delinquencies, and not as a penalty. Such
late charges shall not be credited to the Debt Service Reserve Account or Loan
Repayment Account, but shall be retained by Payee. Late charges under this
Section are in addition to, and not in substitution for, the other remedies
provided in the Loan Documents.
8. Due Date. Anything herein to the contrary notwithstanding, all principal,
ProADAffeysgo&&es, costs and other gbiavgs that Obligor is obligated to pay in
•
connection with this Note and the Loan shall be due and payable, in full, on
July 15, 2012.
9. Security. This Note, together with other obligations of Obligor under the
Loan Documents, is by security interests in the monies and investments
held in certain Reserves established in accordance with the Loan Agreement
and Master Agreement. This Note is further secured by four deeds of trust
of real property owned by Seong and Helen Kim located at 822 N. 1st Street
and 818 N. 1St Street (3 parcels) and by security agreements covering
all
Obligor's interest in fixtures, personal property, and equipment owned by the
Obligor and located at 822 N. lst. All of the above security interests are
perfected, to the extent allowable under Washington law, by recording in the
records of Yakima County, Washington and by filing of financing statements
with the Washington State Department of Licensing or taking possession of
... __Vl
the collateral.
10. Prepayment. The principal hereof and any interest accrued hereon may
be prepaid, provided, however, that any prepayment shall not reduce the
principal payment required at any subsequent time until this Note is paid in
full, together with interest hereon, and provided, further:
10.1. On or before the Conversion Date, this Note may be prepaid in
whole or in part upon thirty (30) days prior written notice to the Payee
and with, and only with, the consent of HUD. Any prepayment of the
principal hereof shall be accompanied by all accrued interest thereon to
the date of prepayment, and partial prepayments shall be credited
against the Principal Amount last becoming due hereunder.
10.2. After the Conversion Date, this Note may be prepaid in whole or in
part at any time if the City Note allows, provided Obligor shall give
90 days prior written notice of its intention to make any prepayment.
Any prepayment shall be applied to the payments last becoming due
under this Note. No partial prepayment shall relieve the Obligor of the
obligation to make any future payments due after the date of any
prepayment. Any prepayment shall be in an amount not less than the
amount which is sufficient to defease the portion of the City Note
allocable to this Note or the portion hereof to be prepaid as provided in
the Master Agreement, including the requirement that Principal
Amounts under the City Note having the latest maturity must be
defeased before those with shorter maturities. If in the event of any
prepayment Payee incurs any costs, expenses, fees, charges, premiums
or losses, the Obligor shall pay such items upon demand in addition to
the principal and interest due hereunder.
Promissory Note Page 7
}
•
10.3. Any prepayment by Obligor or any third party, or recovery from the
disposition of any collateral, after default shall constitute a prepayment
and be subject to all terms and conditions regarding prepayment.
11. Default. In the event of any default by Obligor in any term or condition
of this Note, the Loan Agreement, the Deed of Trust, or any other document
executed in connection herewith, or in the event of any default by Guarantor
under the Guaranty, if any, in any event, which default is not cured as
nermitterl by the armlirahle doc ment. the follnwzwinorma �r nr Tall occur
11.1. Any interest rate subsidy for this Note shall cease.
11.2. The outstanding principal balance of the Loan and this Note shall
bear interest at the greater of the rate set as provided above twelve
above V or twelve
percent (12%) per annum.
11.3. The entire principal and accrued interest hereunder shall become
immediately due and payable without notice or demand at the option of
the Payee.
11.4. If Payee commences any action to enforce collection hereof or
foreclosure under any security document given in connection herewith
or therewith, the Obligor agrees to pay all costs and expenses incurred
by Payee, including but not limited to Payee's reasonable attorneys' fees.
11.5. Demand, protest, and notice of demand and protest are hereby
waived, and the Obligor, to the extent authorized by law hereby waives
any and all exemption rights which otherwise might apply to the
obligation evidenced by this Note, and/or any property covered by any
security document given in connection herewith.
12. The Obligor executes this Note as a principal and not as a surety.
ORAL AGREEMENTS, OR ORAL COMMITMENTS TO LEND MONEY,
EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A
DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
By: By: /C6_
Seong Kim Helen Kim
Promissory Note
Page 8
STATE OF WASHINGTON
ss:
County of Yakima
On this day personally appeared before me SEONG KIM and HELEN KIM,
to me known to be the individuals described in and who executed the within
and foregoing instrument, and acknowledged that they signed the same as
their free and voluntary act and deed, for the uses and purposes therein
mentinnPrl,
GIVEN under my hand and official seal this may of July, 2003.
OTARY PUBLIC in and for the
State of Washi • o
Residing at
My Comm/on Expires:
AS ' ENTID ACKNOWLEDGMENT:
The Payee hereby assigns to JPMorgan Chase Bank, as Trustee, with full
right of assignment for the benefit of HUD under that certain Indenture of
Trust and Custodial Agreement dated as of , 2003 and the
Master Agreement, all of its rights under the foregoing Promissory Note.
Dated this day of July, 2003.
Manager
Promissory Note Page 9
CITY OF YAKIMA
By:
R. A. Zais, Jr., City
•
Obligor hereby acknowledges the foregoing assignment and agrees to
recognize and render all performance to the Trustee and HUD as assignee of
the Promissory Note.
By: By: `C,,./<
Seong Kim Helen Kim
F•\ CLIENTS \ DAB \YAKIMA \ Kim - 103\loan docs\Promissory Note - final.doc
Promissory Note Page 10
8/15/2003
9/15/2003
10/15/2003
11/15/2003
12/15/2003
1/15/2004
2/15/2004
3/15/2004
4/15/2004
5/15/2004
6/15/2004
7/15/2004
8/15/2004
9/15/2004
10/15/2004
11/15/2004
12/15/2004
1/15/2005
2/15/2005
3/15/2005
4/15/2005
5/15/2005
6/15/2005
Exhibit 1
Principal Payable Schedule (Estimated)
Interest
Principal Total Principal Principal
Annual Balance
1,100,00 2,333.33 3,433.33 330,000.00
1,100.00 2,333.33 3,433.33 330,000.00
1,100.00 2,333.33 3,433.33 330, 000.00
1,100.00 2,333.33 3,433.33 330,000.00
1,100.00 2,333.33 3,433.33 330,000.00
1,100.00 2,333.33 3,433.33 330,000.00
1,100.00 2,333.33 3,433.33 330,000.00
1,100.00 2,333.33 3,433.33 330,000.00
1,100.00 2,333.33 3,433.33 330,000.00
1,100.00 2,333.33 3,433.33 330,000.00
1,100.00 2,333.33 3,433.33 330,000.00
1,100.00 2,333.33 3,433.33 28,000.00 302,000.00
1,006.67 2,333.33 3,340.00 302,000.00
1,006.67 2,333.33 3,340.00 302,000.00
1,006.67 2,333.33 3,340.00 302,000.00
1,006.67 2,333.33 3,340.00 302,000.00
1,006.67 2,333 33 3,340.00 302,000.00
1,006.67 2,333.33 3,340.00 302,000.00
1,006.67 2,333.33 3,340.00 302,000.00
1,006.67 2,333.33 3,340.00 302,000.00
1,006.67 2,333.33 3,340.00 302,000.00
1,006.67 2,333.33 3,340.00 302,000.00
1,006 67 2,333.33 3,340.00 302,000.00
Promissory Note Page 11
7/15/2005
8/15/2005
9/15/2005
10/15/2005
11/15/2005
12/15/2005
1/15/2006
2/15/2006
3/15/2006
4/15/2006
5/15/2006
6/15/2006
7/15/2006
8/15/2006
9/15/2006
10/15/2006
11/15/2006
12/15/2006
1/15/2007
2/15/2007
3/15/2007
4/15/2007
5/15/2007
6/15/2007
7/15/2007
8/15/2007
9/15/2007
1 0/1 5/2007
1,006.67 2,333.33 3,340.00 29,000.00 273,000.00
910.00 2,500.00 3,410.00 273,000.00
910.00 2,500.00 3,410.00 273,000.00
910.00 2,500.00 3,410.00 273,000.00
910.00 2,500.00 3,410.00 273,000.00
910.00 2,500.00 3,410.00 273,000.00
910.00 2,500.00 3,410.00 273,000.00
910.00 2,500.00 3,410.00 273,000.00
910.00 2,500.00 3,410.00 273,000,00
910.00 2,500.00 3,410.00 273,000.00
910.00 2,500.00 3,410.00 273,000.00
910.00 2,500.00 3,410.00 273,000.00
910.00 2,500.00 3,410.00 30,000.00 243,000.00
810.00 2,500.00 3,310.00 243,000.00
810.00 2,500.00 3,310 00 243,000.00
810.00 2,500.00 3,310 00 243,000.00
810.00 2,500.00 3,310.00 243,000.00
810.00 2,500.00 3,310.00 243,000.00
810.00 2,500.00 3,310.00 243,000.00
810.00 2,500.00 3,310.00 243,000.00
810.00 2,500.00 3,310.00 243,000.00
810.00 2,500.00 3,310.00 243,000.00
810.00 2,500.00 3,310.00 243,000.00
810 00 2,500.00 3,310.00 243,000.00
810 00 2,500.00 3,310.00 31,000.00 212,000.00
706.67 2,666.67 3,373.33 212,000 00
706 67 2,666.67 3,373.33 212,000.00
Promissory Note Page 12
11/15/2007
12/15/2007
1/15/2008
2/15/2008
3/15/2008
4/15/2008
5/15/2008
6/15/2008
7/15/2008
8/15/2008
9/15/2008
10/15/2008
11/15/2008
12/15/2008
1/15/2009
2/15/2009
3/15/2009
4/15/2009
5/15/2009
6/15/2009
7/15/2009
8/15/2009
9/15/2009
10/15/2009
11/15/2009
12/15/2009
1/15/2010
706.67 2,666.67 3,373.33 212,000.00
706.67 2,666.67 3,373.33 212,000.00
706.67 2,666.67 3,373.33 212,000.00
706.67 2,666.67 3,373.33 212,000.00
706.67 2,666.67 3,373.33 212,000.00
706.67 2,666.67 3,373.33 212,000.00
706.67 2,666.67 3,373.33 212,000.00
706.67 2,666.67 3,373.33 212,000.00
706.67 2,666.67 3,373.33 212,000.00
706.67 2,666.67 3,373.33 32,000.00 180,000.00
600.00 2,666.67 3,266.67 180,000.00
600.00 2,666.67 3,266.67 180,000.00
600.00 2,666.67 3,266.67 180,000.00
600.00 2,666.67 3,266.67 180,000.00
600.00 2,666.67 3,266.67 180,000.00
600.00 2,666.67 3,266.67 180,000.00
600.00 2,666.67 3,266.67 180,000.00
600.00 2,666.67 3,266.67 180,000.00
600.00 2,666.67 3,266.67 180,000.00
600.00 2,666.67 3,266.67 180,000.00
600.00 2,666 67 3,266.67 180,000.00
600.00 2,666.67 3,266.67 33,000.00 147,000.00
490.00 2,833.33 3,323.33 147,000.00
490.00 2,833.33 3,323.33 147,000.00
490.00 2,833.33 3,323.33 147,000.00
490.00 2,833.33 3,323.33 147,000.00
490.00 2,833.33 3,323.33 147,000.00
490.00 2,833.33 3,323.33 147,000.00
Promissory Note Page 13
2/15/2010
3/15/2010
4/15/2010
5/15/2010
6/15/2010
71 15/2V1
8/15/2010
9/15/2010
1 011 51901 0
11/15/2010
12/15/2010
1/15/2011
2/15/2011
3/15/2011
4/15/2011
5/15/2011
6/15/2011
7/15/2011
8/15/2011
9/15/2011
10/15/2011
11/15/2011
12/15/2011
1/15/2012
2/15/2012
3/15/2012
4/15/2012
5/15/2012
490.00 2,833.33 3,323.33 147,000.00
490.00 2,833.33 3,323.33 147,000.00
490.00 2,833.33 3,323.33 147,000.00
490.00 2,833.33 3,323.33 147,000.00
490.00 2,833.33 3,323.33 147,000.00
490.00 2,833.33 3,323.33 34,000.00 113,000.00
376.67 2,833.33 3,210.00 113,000.00
376.67 2,833.33 3,210.00 113,000.00
376.67 2,833.33 3,210.00 113,000.00
376.67 2,833.33 3,210.00 113,000.00
376.67 2,833.33 3,210.00 113,000.00
376.67 2,833.33 3,210.00 113,000.00
376.67 2,833.33 3,210.00 113,000.00
376.67 2,833.33 3,210.00 113,000.00
376.67 2,833.33 3,210.00 113,000.00
376.67 2,833.33 3,210.00 113,000 00
376.67 2,833.33 3,210.00 113,000.00
376 67 2,833.33 3,210.00 35,000.00 78,000.00
260.00 3,083.33 3,343.33 78,000.00
260.00 3,083.33 3,343 33 78,000.00
260.00 3,083.33 3,343.33 78,000 00
260.00 3,083.33 3,343.33 78,000.00
260.00 3,083.33 3,343.33 78,000.00
260.00 3,083.33 3,343.33 78,000.00
260.00 3,083.33 3,343.33 78,000.00
260.00 3,083.33 3,343.33 78,000.00
260.00 3,083.33 3,343.33 78,000.00
Promissory Note Page 14
•
6/15/2012
7/15/2012
8/15/2012
9/15/2012
10/15/2012
11/15/2012
12/15/2012
1/15/2013
2/15/2013
3/15/2013
4/15/2013
5/15/2013
6/15/2013
7/15/2013
260.00 3,083.33 3,343.33 78,000.00
260.00 3,083.33 3,343.33 78,000.00
260.00 3,083.33 3,343.33 37,000.00 41,000.00
136.67 3,083.33 3,220.00 41,000.00
136.67 3,083.33 3,220.00 41,000.00
136.67 3,083.33 3,220.00 41,000.00
136.67 3,083.33 3,220.00 41,000.00
136.67 3,083.33 3,220.00 41,000.00
136.67
3o.o7 3,083.33 3,220
.v0 41,000.00
136.67 3,083.33 3,220.00 41,000.00
136.67 3,083.33 3,220.00 41,000.00
136.67 3,083.33 3,220.00 41,000.00
136.67 3,083.33 3,220.00 41,000.00
136.67 3,083.33 3,220.00 41,000.00
136.67 3,083.33 3,220.00 41,000.00
77,028.89 322,000.00 330,000.00
F \ CLIENTS \ DAB \ YAKIMA \ Kim - 103\loan docs Promissory Note - final.doc
Promissory Note Page 15
Return Address:
Donald A. Boyd
Halverson & Applegate, P.S.
P.O. Box 22730
Yakima, WA 98907-2715
DEED OF TRUST
Grantor:
1. SEONG KIM
2. HELEN KIM
Beneficiary:
1. THE CITY OF YAKIMA
Trustee:
1. FIDELITY TITLE COMPANY
Legal Description:
1. Lot 8, Block 2 TOWN OF NORTH YAKIMA, "A"-10 of Plats, re-
recorded in "E"-1 of Plats, records of Yakima County, Washington.
2. Portion of Lot 5, HENRY T. STONE'S ACRE TRACTS, "A"-73 of
Plats and portion of the SE 14 of Section 13, Township 13 North,
Range 18, E.W.M.
3. Portion of the Na4 SE 14 of Section 13, Township 13 N, Range
18 E.W.M., and of Lot 5, HENRY T. STONES ACRE TRACTS, "A" - 73 of
Plats.
Assessor's Property Tax Parcel Number(s):
181313-41420, 181313-41003, 181313-41002
THIS DEED OF TRUST ("Deed of Trust") is made on this ,r • ay of July,
2003, by SEONG KIM and HELEN KIM, Grantor, whose address is
08724, f , Washington, 98901 ; FIDELITY TITLE COMPANY, Trustee,
11
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Page 8
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'?,99 Yakima Co, WA
whose address is 406 N. 2nd St., Yakima, WA, 98901, and THE CITY OF
YAKIMA, Beneficiary, whose address is 129 N. 3rd St, Yakima, WA 98901.
Recitals
Grantor has signed a loan agreement ("Loan Agreement") and promissory
note ("Promissory Note") with the Beneficiary, dated on or about the date
hereof. Grantor is giving this Deed of Trust in consideration of
accommodations made or to be made by Beneficiary.
Grantor hereby bargains, sells and conveys to Trustee in Trust, with
power of sale, the following described real property in Yakima County,
Washington:
1. Parcel A:
Lot 8, Block 2 TOWN OF NORTH YAKIMA, now Yakima, as recorded
in volume "A" of Plats, page 10 and re-recorded in Volume "E" of
Plats, Page 1., records of Yakima County, Washington.
Situate in Yakima County, State of Washington.
2. Parcel B:
That portion of Lot 5, HENRY T. STONE'S ACRE TRACTS, as recorded
in Volume "A" of Plats, page 73 records of Yakima County,
Washington, and of the Southeast 1,4 of Section 13, Township 13
North, Range 18, E.W.M., described as follows:
Beginning at the intersection of the South line of North Avenue and
the West line of North First Street; thence Southeasterly along said
North First Street, 264.75 feet to the true point of beginning; thence
Southwesterly at right angles to said Westerly line of North First
Street, 140 feet, more or less to the Easterly line of the alley, parallel
to North First Street;
thence Southeasterly along said alley to the North line of Lot 8.
Block 2, TOWN OF NORTH YAKIMA, now Yakima, as recorded in
Volume "A" of Plats, page 10, and re-recorded in Volume "E" of Plats,
page 1, records of Yakima County, Washington, thence northeasterly
along said North line of said Lot 8 to the West line of North First
Street; thence Northwesterly along the West line of North First Street
to the point of beginning.
1111 IIM 1111 III
F DELITY TITLE CO
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7351108
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$2?,99 Yakima Co, WA
Situated in Yakima County, State of Washington.
3. Parcel C:
That portion of the Northeast 1,4 of the Southeast 1,4 of Section 13,
Township 13 N, Range 18 E.W.M., and of Lot 5, HENRY T. STONES
ACRE TRACTS, as recorded in Volume "A" of Plats, page 73, records
of Yakima County, Washington described as follows.
Beginning at the intersection of the South line of North Avenue and
the West line of North 1st Street; thence Southeasterly along said
westerly line of North 1st Street, 134.75 feet to the true point of
beginning. Thence Southeasterly along said westerly line of North 1st
Street, 130 feet; thence Southwesterly at right angles to said Westerly
line of North 1st Street 140 feet, more or less, to the Easterly line of
Alley paralleling North 1st Street; thence Northwesterly along the East
line of said Alley to a point 181.45 feet from the intersection of said
Easterly line of said Alley with the South line of said North Avenue;
thence northeasterly 140.5 feet, more or less to the true point of
beginning.
Situated in Yakima County, State of Washington.
which real property is not used principally for agricultural or farming purposes,
together with all the tenements, hereditaments, and appurtenances now or
hereafter thereunto belonging or in any wise appertaining, and the rents,
issues and profits thereof.
This deed is for the purpose of securing performance of the Grantor's
Loan Agreement, and payment of the sum of THREE HUNDRED AND THIRTY
THOUSAND DOLLARS ($330,000.00) with interest, in accordance with the
terms of a Promissory Note of even date herewith, payable to Beneficiary, and
made by Grantor, and all renewals, modifications and extensions thereof, and
also such further sums as may be advanced or loaned by Beneficiary to
Grantor, or any of their successors or assigns, together with interest thereon at
such rate as shall be agreed upon.
To protect the security of this Deed of Trust, Grantor covenants and agrees:
1. To keep the property in good condition and repair; to permit no waste;
to complete any building, structure or improvement being built or about to be
built thereon; to restore promptly any building, structure or improvement
thereon which may be damaged or destroyed; and to comply with all laws,
1111111111111111111111111 7351108
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88/87/2883 02,24P
FIDELITY TITLE CO DT same Yakima Co, WA
ordinances, regulations, covenants, conditions and restrictions affecting the
property.
2. To pay before delinquent all lawful taxes and assessments upon the
property; to keep the property free and clear of all other charges, liens, or
encumbrances impairing the security of this Deed of Trust.
3. To keep all buildings now or hereafter erected on the property
described herein continuously insured against loss by fire or other hazards in
an amount not less than the total debt secured by this Deed of Trust. All
policies shall be held by the Beneficiary, and be in such companies as the
Beneficiary may approve and have loss payable first to the Beneficiary as its
interest may appear and then to the Grantor. The amount collected under any
insurance policy may be applied upon any indebtedness hereby secured in
such order as the Beneficiary shall determine. Such application by the
Beneficiary shall not cause discontinuance of any proceedings to foreclose this
Deed of Trust. In the event of foreclosure, all rights of the Grantor in insurance
policies then in force shall pass to the purchaser at the foreclosure sale.
4. To defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs
and expenses, including cost of title search and attorney's fees in a reasonable
amount, in any such action or proceeding, and in any suit brought by
Beneficiary to foreclose this Deed of Trust.
5. To pay all costs, fees and expenses in connection with this Deed of
Trust, including the expenses of the Trustee incurred in enforcing the
obligation secured hereby and Trustee's and attorney's fees actually incurred,
as provided by statute.
THE PARTIES MUTUALLY AGREE:
6. Should Grantor fail to pay when due any taxes, assessments,
insurance premiums, liens, encumbrances, or other charges against the
property hereinabove described, Beneficiary may pay the same, and the
amount so paid, with interest at the rate set forth in the note secured hereby,
shall be added to and become a part of the debt secured in this Deed of Trust.
7. In the event any portion of the property is taken or damaged in an
eminent domain proceeding, the entire amount of the award or such portion
thereof as may be necessary to fully satisfy the obligation secured hereby, shall
be paid to Beneficiary to be applied to said obligation.
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$2?,89 Yakima Coo WA
8. By accepting payment of any sum secured hereby after its due date,
Beneficiary does not waive its right to require prompt payment when due of all
other sums so secured or to declare default for failure to so pay.
9. The Trustee shall reconvey all or any part of the property covered by
this Deed of Trust to the person entitled thereto, on written request of the
Beneficiary, or upon satisfaction of the obligation secured and written request
for reconveyance made by the Beneficiary or the person entitled thereto.
10. Upon default by Grantor in the payment of any indebtedness
secured hereby or in the performance of any agreement contained herein, all
sums secured hereby shall immediately become due and payable at the option
of the Beneficiary. In such event and upon written request of Beneficiary,
Trustee or trustee's authorized agent, shall sell the trust property, in
accordance with the Deed of Trust Act of the State of Washington, (as
amended), at public auction to the highest bidder. Any person except Trustee
may bid at Trustee's sale. Trustee shall apply the proceeds of the sale as
follows: (1) to the expense of the sale, including a reasonable Trustee's fee and
attorneys fee; (2) to the obligation secured by this deed of Trust; (3) the
surplus, if any, shall be distributed to the persons entitled thereto or shall be
deposited (less clerk's filing fee) with the clerk of the superior court of the
county in which sale takes place.
11. Trustee shall deliver to the purchaser at the sale its deed, without
warranty, which shall convey to the purchaser the interest in the property
which Grantor had or had the power to convey at the time of his execution of
this Deed of Trust, and such as he may have acquired thereafter. Trustee's
deed shall recite the facts showing that the sale was conducted in compliance
with all' the requirements of law and of this Deed of Trust, which recital shall
be prima facie evidence of such compliance and conclusive evidence thereof in
favor of bona fide purchasers and encumbrancers for value.
12. The power of sale conferred by this Deed of Trust and by the Deed of
Trust Act for the State of Washington in not an exclusive remedy; Beneficiary
may cause this Deed of Trust to be foreclosed as a mortgage.
13. In the event of the death, incapacity, disability or resignation of
Trustee, Beneficiary shall appoint in writing a successor trustee, and upon the
recording of such appointment in the mortgage records of the county in which
this Deed of Trust is recorded, the successor trustee shall be vested with all
powers of the original trustee. The trustee is not obligated to notify any party
hereto of pending sale under any other Deed of Trust or of any action or
iM
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IDELITY TITLE CO OT
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Pa35ge Sof 8
9819712893 02:24P
$27.00 Yakima Co, WA
proceeding in which Grantor, Trustee or Beneficiary shall be a party unless
such action or proceeding is brought by the Trustee.
14. This Deed of Trust applies to, inures to the benefit of, and is binding
on the parties, and on their heirs, devisees, legatees, administrators, executors,
successors and assigns. The term Beneficiary shall mean the holder and
owner of the note secured hereby, whether or not named as Beneficiary herein.
By:
Seong Kim
STATE OF WASHINGTON
County of Yakima
ss:
By: IG✓
Helen Kim
On this day personally appeared before me SEONG KIM, to me known to
be the individual described in and who executed the within and foregoing
instrument, and acknowledged that he signed the same as his free and
voluntary act and deed, for the uses and purposes therein mentioned.
GIVEN under my hand and official seal this
STATE OF WASHINGTON
ss:
County of Yakima
day of July, 2003.
TARY PUBLIC in and for the
tate of Washinlr.o
Residing at
My Commi fon Expires:
On this day personally appeared before me HELEN KIM, to me known to
be the individual described in and who executed the within and foregoing
instrument, and acknowledged that she signed the same as her free and
111111111 111
N
1
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FIDELITY TITLE CO DT
til 11 7351108
Page 6 of 8
II 0810712003 92:24P
$227,00 Yakima Co, WR
voluntary act and deed, for the uses and purposes therein mentioned.
GIVEN under my hand and official seal thisiN day of July, 2003.
OTARY PUBLIC in and for the
State of Was . 4 • `on
Residing at
y Comm sion Expires:
'ID
m
F DELITY TITLE CO
ID
11
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ui
DT
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Pa35ge: 7 of 8
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$27,00 Yakima Co, WR
REQUEST FOR FULL RECONVEYANCE
Do not record. To be used only when note has been paid.
TO: TRUSTEE
The undersigned is the legal owner and holder of the note and all other
indebtedness secured by this Deed of Trust. This note, together with all other
indebtedness secured by the Deed of Trust, has been fully paid and satisfied;
and you are hereby requested and directed, on payment to you of any sums
owing to you under the terms of the Deed of Trust, to cancel the note
mentioned above, and all other evidences of indebtedness secured by the Deed
of Trust delivered to you, together with the Deed of trust, and to reconvey,
without warranty, to the parties designated by the terms of the Deed of Trust,
all the estate now held by you thereunder.
Dated this day of July, 2003.
Mail reconveyance to:
F•\ CLIENTS \ DAB \ YAKIMA \ Kim - 103\loan docs\Deed of Trust v 1.a.doc
7351108
Ili 88/18712693 82:20
FIDELITY TITLE CO DT !27,89 Yakima Co,
DEPOSIT ACCOUNT CONTROL AGREEMENT
THIS Deposit Account Control Agreement (as supplemented or amended
from time to time, and including all documents and terms incorporated herein by
reference, the "Agreement"), dated as of July _, 2003, is entered into by and
between Seong and Helen Kim, husband and wife, who are dba Peppers
Restaurant, hereinafter called "Obligor", THE CITY OF YAKIMA, a Washington
municipal corporation, hereinafter called "City", and _TPMOROAN CHASE BANK,
a New York banking corporation, hereinafter called "Custodian."
RECITALS
The parties enter into this Agreement upon the following
circumstances:
facts and
A. City has entered into an agreement with the United States
Department of Housing and Urban Development ("HUD") for a $ 4 million dollar
loan to capitalize the Yakima Commercial Development Loan Fund ("HUD
Contract"). The City and Custodian have entered into the Indenture of Trust and
Custodial Agreement, whereby Custodian will manage the flow of funds from
HUD to City in order to disburse these funds to various borrowers, including
Obligor, through loans by the City ("Junior Loans") and from the Obligor to the
City to HUD in order to repay the Junior Loans.
B. Obligor and City have entered into a Loan Agreement and
Promissory Note, whereby Obligor is borrowing $330,000 from City's Yakima
Commercial Development Loan Fund.
C. The Obligor's obligations under this Agreement and the other Loan
Documents are secured in part by Obligor's assignment of any interest it has in
the accounts with Custodian that are used to repay this loan ("Deposit
Accounts") .
D. The parties intend that this Agreement give the City control over any
interest Obligor may have in the Deposit Accounts, as set forth in RCW 62A.9A-
314 and 62A.9A-104.
AGREEMENT
1. City's Security Interest in Deposit Account. In order to secure Obligor's debt
to City pursuant to the collateral security arrangements between Obligor
and City, Obligor has assigned and granted to City a security interest in and
Deposit Account Control Agreement page 1
lien upon the Deposit Account, as well as any and all proceeds thereof,
whether now or hereafter existing ("Deposit Account Collateral").
2. Obligor's Dealings with Deposit Accounts. Obligor is not entitled to present
items drawn on or otherwise to withdraw or direct the disposition of funds
from the Deposit Account.
3. City's Right to Give Exclusive Instructions as to Deposit Account. City shall
be entitled, for purposes of this Agreement, to give Custodian instructions
as to the withdrawal or disposition of any funds from time to time deposited
to the Deposit Account, or as to any other matters relating to the Deposit
Account or any of the Deposit Account Collateral, without Obligor's further
consent. Custodian agrees to comply with any such request from City
without any further consent from Obligor. Custodian is fully entitled to rely
upon such instructions from City even if such instructions are contrary to
any instructions or demands that Obligor may give to Custodian.
4. Choice of Law and Venue. This Agreement shall be governed by the laws of
the state of Washington, without regard to any conflict of law provisions.
Venue for any action related to this Agreement shall be in Yakima County,
Washington.
5. Entire Agreement; Amendments. This Agreement and the documents, laws
and regulations incorporated by reference herein constitute the entire
agreement of the parties and supercede any prior agreements or
understandings, whether written or oral. No amendment, modification, or
termination of any provisions of this Agreement shall be effective unless it is
in writing and signed by a duly authorized officer of City, Obligor, and
Custodian, and no such writing shall be construed to modify, waive, or affect
the terms of this Agreement except to the extent that such document
expressly so provides.
6. Construction. The Agreement shall be construed to conform to the
requirements of the HUD Contract and applicable federal laws and
regulations.
IN WITNESS WHEREOF, Obligor, City, and Custodian have executed this
Agreement as of the date first written above by and through their duly authorized
representatives.
(signatures on the next page)
Deposit Account Control Agreement page 2
CITY:
THE CITY OF YAKIMA, a Washington municipal corporation
By:
Print Name: R. A. Zais, Jr.
City Manager
OBLIGOR:
Seong Kim:
Helen Kim:
CUSTODIAN:
7L S A ----
JPMorgan Chase Bank, a New York banking corporation
By:
Print Name:
Title:
F \ CLIENTS \ DAB \YAKIMA \ Kim - 103\loan docs \ Final \ Bank control agmt - final.doc
Deposit Account Control Agreement page 3
DEMAND NOTE
Yakima, Washington
March 24, 2003
S�,3 .00
FOR VALUE RECEIVED, SEONG AND HELEN KIM, husband and wife,
who are dba Peppers Restaurant ("Obligor"), a sole proprietorship, promises to
pay to THE CITY OF YAKTMA WASHINGTON ( "CitJy), ) a `i shitgtotmunicipal
l
corporation, on order, at Yakima, Washington, at the time provided herein, up
to the sum of Three Thousand Three Hundred Dollars ($ 3,300.00)
RECITALS
1. Obligor has signed a Loan Agreement, as of the date of this Note, with
the City to borrow Three Hundred Thirty Thousand Dollars ($330,000),
which is funded by the Housing and Urban. Development ("HUD").
Obligor and the City have executed other Loan Documents as part of the
Loan Agreement.
2. Under section 4.2 of the Loan Agreement, City can choose, in its own
discretion, to waive the requirement that the Obligor must set aside
proceeds from the Loan to pay the costs associated with a public offering
of the HUD Loan to the City.
3. City chooses to waive the above requirement and instead have Obligor
give a demand note to pay the costs associated with a public offering.
AGREEMENT
NOW, in consideration of the Recitals and the covenants, conditions,
representations, and warranties contained here, the parties agree as follows:
1. Obligor shall pay to City up to Three Thousand Thirty Dollars ($ 3,300.00)
in cash or equivalent within ten business days after City makes a written
demand under this Note. These funds shall be used solely for the costs
described in section 4.2 of the Loan Agreement.
2. City may only make a demand on this Note when the HUD, or its agents,
sell the City Note in a public offering, as described in the Loan Documents.
3. Both parties intend that this Note be non-negotiable.
4. Demand, protest, and notice of demand and protest are hereby waived, and
the Obligor, to the extent authorized by law hereby waives any and all
exemption rights which otherwise might apply to the obligation evidenced by
Demand Note Page 1
this Note, and/ or any property covered by any security document given in
connection herewith.
5. The Obligor executes this Note as a principal and not as a surety.
ORAL AGREEMENTS, OR ORAL COMMITMENTS TO LEND MONEY,
EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A
DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
Seong Kim Helen Kim
STATE OF WASHINGTON )
ss:
County of Yakima
On this day personally appeared before me SEONG KIM and HELEN KIM,
to me known to be the individuals described in and who executed the within
and foregoing instrument, and acknowledged that they signed the same as
their free and voluntary act and deed, for the uses and purposes therein
mentioned.
DATED: July, 2003.
OTARY PUBLIC in and for the
State of Washi to
Residing at:
'My appoints nt expires: 0.//72.
Manager
F•\ CLIENTS \ DAB \YAKIMA \ Kim - 103\loan docs \ Final \ Demand Note - final.doc
CITY OF YAKIMA
By:
R. A. Zais, Jr., City
Demand Note Page 2
INTERIM EXPENSES AGREEMENT
FOR VALUE RECEIVED, SEONG KIM AND HELEN KIM, husband and
wife, who are dba Peppers Restaurant ("Borrower"), a sole proprietorship,
promises to pay to expenses set forth below.
RECITALS
1. Obligor has signed a Loan Agreement, as of the date of this Agreement,
with the City to borrow Three Hundred Thirty Thousand Dollars
($330,000), which is funded by the Housing and Urban. Development
("HUD"). Obligor and the City have executed other Loan Documents as
part of the Loan Agreement.
0. Tinder section /1 l the Loan Agreement, Cit 'l disburse section 4. 1 of Agreemen L, City will not dis Burse ali funds
to the Borrower at the Closing. Instead, Borrower will request funds be
disbursed for specific reasons. Borrower will also receive the remaining
portion of the funds when it clears up the issues with the legal
description of the Property, as defined in the Loan Agreement.
3. Borrower agrees to pay interest on the loan for the full amount of
$330,000, even though they will not get the beneficial use of the full
amount of funds upon Closing. Borrower also agrees to pay all other
associated costs, including but not limited to, the cost of recording a
deed of trust.
AGREEMENT
NOW, in consideration of the Recitals and the covenants contained here,
the Borrowers agree as follows:
1. Borrower shall pay interest on the loan for the full amount of 5330,000, if
even Borrower does not receive beneficial use of the money upon Closing.
2. Borrower shall pay all other expenses associated with this Agreement,
including but not limited to, the recording fee for the Deed of Trust and the
City's attorneys' fees.
3. This agreement shall terminate when the Borrower receives the full amount
borrowed under the Loan Agreement.
Seong Kim
F•\CLIENTS \ DAB \YAKIMA\Kim - 103\loan docs \ Final \Interim Expenses agmt.doc
Ys'.
Helen Kim
Interim Expenses Agreement Page 1
Fidelity Title Company
406 NORTH SECOND STREET • P 0 BOX 1682 • YAKIMA, WASHINGTON 98907
PHONE (509) 248-6210 (800) 666-8308 • FAX (509) 248-2048
Agent for
Chicago Title Insurance Company
ALTA COMMITMENT
Title Order No.: 00059089 - CK
1. Effective Date: July 10, 2003 at 8:00 a.m.
2. Policy or policies to be issued:
b. Extended Coverage Loan Policy
Proposed Insured:
CITY OF YAKIMA
PREMIUM INFORMATION.
B. REORGANIZATION MTG. (340)
WORK FEE
Schedule A
$483.00
$100.00
To: Fidelity Escrow
406 North Second Street
Yakima WA 98901
Attn: John Corning
Tax: $38.16
Tax: $ 7.90
Amount $330,000.00
Total: $521.16
Total: $107.90
3. The estate or interest in the land described herein and which is covered by this commitment is:
A FEE
4. The estate or interest referred to herein is at Date of Commitment vested in:
SEONG KIM, also shown of record as SEONG H. KIM and SEONG HOON KIM, and HELEN KIM also
shown of record as HELEN S. KIM and HELEN SUK KIM, husband and wife, as to Parcels A, B, E and
a portion of C; RED LION, a California Limited partnership, as to Parcel D; RED LION HOTELS,
INC., a Delaware corporation, as to a portion of Parcel C
5. The land referred to in this Commitment is situated in the County of Yakima, State of Washington and is more
fully described as follows.
See Exhibit A attached hereto and made a part hereof.
ALTA COMMITMENT
Schedule 13
Commitment No. 00059089
Schedule B of the policy or policies to be issued will contain exceptions to the following matters unless the same are
disposed of to the satisfaction of the Company.
GENERAL EXCEPTIONS:
A. Rights or claims disclosed only by possession, or claimed possession, of the premises.
B. Encroachments and questions of location, boundary and area disclosed only by inspection of the premises or by
survey.
C. Easements, prescriptive rights, rights-of-way, streets, roads, alleys or highways not disclosed by the public records.
D. Any lien. or right to a lien, for contributions to employees benefit funds, or for state workers' compensation, or for
services, labor or material heretofore or hereafter furnished, all as imposed by law and not shown by the public
records.
E. Taxes or special assessments which are not yet payable or which are not shown as existing liens by the public
records.
F. Any service, installation, connection, maintenance, or construction charges for sewer, water, electricity, natural gas
or other utilities or garbage collection and disposal.
G. Reservations or exceptions in United States Patents or in Acts authorizing the issuance thereof.
H. Indian tribal codes or regulations, Indian treaty or aboriginal rights, including easements or equitable servitudes.
I. Water rights, clam -is or title to water.
J. Defects, liens encumbrances, adverse claims or other matters, if any, created, first appearing in the public records or
attaching subsequent to the effective date hereof but prior to the date the proposed Insured acquires for value of
record the estate or interest or mortgage thereon covered by this Commitment.
SPECIAL EXCEPTIONS:
1. Real Estate Excise Tax as may be due on this transfer, as now imposed at the rate of 1.53% of taxable value, as
to Parcel "D".
2. Delinquent real property taxes for the assessment year 2003 in the surn of $20,031.10, plus interest and penalty.
3. Deed of Trust and the terms and conditions thereof, wherein Seong Hoon Kim and Helen Suk Kim, husband and
wife is Grantor, and Evergreen Title Insurance Company, Inc is Trustee, and City Bank is Beneficiary, in the
original amount of $1,200,000.00, dated January 29, 2002, and recorded February 1, 2002, under Auditor's File
Number 7255388. Affects Parcels '''A ", "B", and portion of "C".
4. Financing Statement and the terms and conditions thereof, wherein City Bank is the Secured Party, and Kim,
Seong Hoon is the Debtor, recorded February 1, 2002, under Auditor's File Number 7255389. Affects Parcels
"A", "B", and a portion of "C".
•
SCHEDULE B - continued
Commitment No. 00059089
5. Financing Statement and the terms and conditions thereof, wherein City Bank is the Secured Party, and Kim,
Seong Hoon is the Debtor, recorded October 2, 2002, under Auditor's File Number 7295526. Affects Parcels
"A", "B" and a portion of "C".
6. Deed of Trust and the terms and conditions thereof, wherein Seong Hoon Kim and Helen Suk Kim, husband and
wife is Grantor, and Evergreen Title Insurance Company is Trustee, and City Bank is Beneficiary, in the original
amount of $162,198.20, dated December 19, 2002, and recorded December 20, 2002, under Auditor's File
Number 7308363. Affects Parcels "A", "B" and a portion of "C".
7. Deed of Trust and the terms and conditions thereof, wherein Seong Kim and Helen Kim, husband and wife is
Grantor, and Yakima Title and Escrow is Trustee, and David Andrew Godenberg, as his separate estate, as to an
undivided 1/3 interest; Robert Erlich, Trust of the Robert Erlich Revocable Living Trust, dated March 14, 1991,
Ruth E. Erlich, Trustee of the Ruth E. Erlich Revocable Living trust dated March 14, 1991, Marvin S. Nepom
and David R. Nepom, Co -Trustees of the Debra Goldenberg Trust, Marvin S. Nepom and David R Nepom, Co -
Trustees of the David Goldenberg Trust, and Bernard D. Brown and Selma Brown, husband and wife, as to an
undivided 2/3 interest, as their interest may appear.as Beneficiary, in the original amount of $90,000.00, and
recorded February 28, 2003, under Auditor's File Number 7319993. Affects Parcel "E".
8. Unrecorded leaseholds, if any; rights of vendors and holders of security interest on personal property installed
upon said property, and rights of tenants to remove trade fixtures at the expiration of the term.
9. Agreement and the terms and conditions thereof regarding right of entry, as recorded February 13, 2003, under
Auditor's File Number 7317054.
•
ALTA COMMITMENT
Schedule C
Cornmitment No. 00059089
REQUIREMENTS:
The following are requirements to be complied with in a manner satisfacl.ory to the Company prior to issuance of the
policy:
A. Requirements: Instruments creating the estate or interest to be insured must be approved and filed of record.
B. Requirements: Payment of cancellation fee in accordance with our filed rate Schedule, to be imposed if this
transaction is canceled for any reason.
C. A copy of the current partnership agreement and any amendments must be submitted unless a Statement of
Authority has been filed with the Secretary of State. In that case, a copy of the filed Statement will be sufficient.
Any conveyance or encumbrance of property must he executed by all general partners and their spouses, unless
otherwise provided in the agreement or Statement of Authority.
Partnership:Red Lion
D. We must be furnished with evidence confirming the authority of the officers of Red Lion Hotels, Inc.,to execute
documents in the proposed transaction.
INFORMATION FOR THE CLOSER AND/OR INSURED:
The following matters will not be listed as Special Exceptions in Schedule "B" of the Policy to be issued pursuant to this
Cornmitment. Notwithstanding the absence of a Special Exception in Schedule "B" of the Policy to be issued, there will
be no coverage for loss arising by reason of the matters listed below because these matters are either excepted from
coverage under the General Exceptions section of Schedule "B", excluded from coverage under the Exclusions from
Coverage or are not matters for which coverage is afforded under the insuring clauses of the Policy.
This Commitment shall not obligate the Company to issue any Endorsement. All Endorsements to be issued must be
agreed to by the Company and appropriate for the estate insured.
Any sketch or map enclosed as an attachment herewith is furnishedfor information purposes only to assist in property
location with reference to streets and other parcels. No representation is made as to accuracy and the Company assumes
no liability for any loss occurring by reason of reliance thereof.
NOTES:
1. Parcel number(s) assigned by the Yakima County Assessor's Office based upon their own composed narrative
description, and used by the Yakima County Treasurer's Office in the collection of real property taxes and
assessments: 181313-41420 Parcel A, 181313-41003 Parcel B, 181313-41005 Parcels C and D, 181313-41002
Parcel E
NOTE• The designated Levy Code is 333
9
SCHEDULE C - continued
Commitment No. 00059089
2. The legal description in this commitment is based on information provided with the application and the public
records as defined in the policy to issue. The parties to the forthcoming transaction must notify the title
insurance company prior to closing in the description does not conform to their expectations.
3. Our inspection of the land disclosed commercial buildings known as 818 and 822 North 1st Street, Yakima,
Washington 98901. General Exceptions A, B, C, D, E, F and H, set forth in Schedule "B" of this Commitment
will be deleted from the Extended Coverage Loan Policy to issue.
4. Title Officer: Chris Kroll
5. 1 cc: City of Yakima, 8th Street
1 cc: Halverson and Applegate, Attn.: Kirstin Peterson 311 North 1st Street, Yakima WA 98901
Fidelity Title Company
As agent for
Chicago Title Insurance Company and
Fidelity National Title Insurance Company
(Members of the Fidelity National Financial, Inc. group of companies)
Fidelity National Financial Group of Companies' Privacy Statement
July 1, 2001
We recognize a:rd respect the privacy expectations of today's consumers and the requirements of applicable
federal and state privacy laws. We believe that making you aware of how we use your non-public personal
information ("Personal Information'°), and to whom it is disclosed, will form the basis for a relationship of
trust between us and the public that we serve. This Privacy Statement provides that explanation. We
reserve the right to change this Privacy Statement from time to time consistent with applicable privacy laws.
In the course of our business, we may collect Personal Information about you from the following
sources:
• From applications or other forms we receive from you or your authorized representative;
• From your transactions with, or from the services being performed by, us, our affiliates or others;
• From our int ernet web sites;
• From the public records maintained by governmental entities that we either obtain directly from those
entities, or from our affiliates or others; and
• From consumer or other reporting agencies.
Our Policies Regarding the Protection of the Confidentiality and Security of Your Personal
Information
We maintain physical, electronic and procedural safeguards to protect your Personal Information from
unauthorized access or intrusion. We limit access to the Personal Information only to those employees who
need such access in connection with providing products or services to you or for other legitimate business
purposes.
Our Policies and Practices Regarding the Sharing of Your Personal Information
We may share your Personal Information with our affiliates, such as insurance companies, agents, and other
real estate settlement service providers. We also may disclose your Personal Information:
• To agents, brokers or representatives to provide you with services you have requested;
• To third -party contractors or service providers who provide services or perform marketing or other
functions on our behalf, and
o To others with whom we enter into joint marketing agreements for products or services that we believe
you may fmdof interest .
9
Privacy Statement
(Continued)
In addition, we will disclose your Personal Information when you direct or give us permission, when we are
required by law to do so, or when we suspect fraudulent or criminal activities. We also may disclose your
Personal Information when otherwise permitted by applicable privacy laws such as, for example, when
disclosure is needed to enforce our rights arising out of any agreement, transaction or relationship with you.
One of the important responsibilities of some of our affiliated companies is to record documents in the
public domain. Such documents may contain your Personal Information.
Right to Access Your Personal Information and Ability To Correct Errors or Request Changes or
Deletion
Certain states afford you the right to access your Personal Information and, under certain circumstances, to
find out to whom your Personal Information has been disclosed. Also, certain states afford you the right to
request correction, amendment or deletion of your Personal Information. We reserve the right, where
permitted by law, to charge a reasonable fee to cover the costs incurred in responding to such requests.
All requests must be made in writing to the following address:
Privacy Compliance Officer
Fidelity National Financial, Inc.
4050 Calle Real, Suite 220
Santa Barbara, CA 93110
Multiple Products or Services
If we provide you with more than one financial product or service, you may receive more than one privacy
notice from us. We apologize for any mconvenience this may cause you.
•
Commitment No.:59089
Exhibit A
PARCEL "A":
Lot 8, Block 2 TOWN OF NORTH YAKIMA, now Yakima, as recorded in volume "A" of Plats,
page 10 and re-recorded in Volume "E" of Plats, Page 1., records of Yakima County, Washington.
Situated in Yakima County, State of Washington.
PARCEL "B"
That portion of Lot 5, HENRY T. STONE'S ACRE TRACTS, as recorded in Volume "A" of Plats,
page 73 records of Yakima County, Washington, and of the Southeast 1/4 of Section 13, Township 13
North, Range 18, E.M.W., described as follows:
Beginning at the intersection of the South line of North Avenue and the West line of North First
Street; thence Southeasterly along said North First Street, 264.75 feet to the true point of beginning;
thence Southwesterly at right angles to said Westerly line of North First Street, 140 feet, more or less
to the Easterly line of the alley, parallel to North First Street;
thence Southeasterly along said alley to the North line of Lot 8,
Block 2, TOWN OF NORTH YAKIMA, now Yakima, as recorded in Volume "A" of Plats, page 10,
and re-recorded in Volume "E" of Plats, page 1, records of Yakima County, Washington,
thence northeasterly along said North line of said Lot 8 to the West line of North First Street;
thence Northwesterly along the West line of North First Street to the point of beginning.
Situated in Yakima County, State of Washington.
PARCEL "C":
That portion of the Northeast 1/4 of the Southeast 1/4 of Section 13, Township 13, North, Range,
E.W.M., described as follows:
Beginning at the Northeast corner of Lot 9, Block 2, TOWN OF NORTH YAKIMA, (now Yakima),
as recorded in Volume "A" of Plats, page 10 and re-recorded in Volume "E" of Plats, page 1,
records of Yakima County, Washington;
thence Southwesterly along the North line of said Lot, 140 feet to the East line of North Front Street;
thence Northwesterly along said East line to a point 229.5 feet Southerly measured along the Easterly
line of Front Street from the South line of North Avenue; thence East paraiiei with the South line of
North Avenue to the West line of alley as shown on Plat of TOWN OF NORTH YAKIMA, now
Yakima, as recorded in Volume "A" of Plats, page 10, extended Northwesterly,
thence Southeasterly to the point of beginning;
AND
That part of the Southeast 1/4 of Section 13, Townshipl3 North, Range 18, E.W.M., beginning at a
point on the North line of said Southeast 1/4 726 feet West of the Northeast corner of said
subdivision;
thence West 140.63 feet; ;
thence South 30 feet, said point being the intersection of the South line of North Avenue ("I" Street)
and the Northerly produced West line of the alley in Block 2 TOWN OF NORTH YAKIMA, (now
Yakima) as recorded in Volume "A" of Plats, page 10 and re-recorded in Volume "E" of Plats, page
1, records of Yakima County, Washington;
thence South 18°31' East 205.59 feet to true point of beginning;
thence South 18°31' East 23.46 feet;
thence North 90°.00' West 73.87 feet;
thence North 71°29 East 70.05 feet to true point of beginning.
EXCEPT
That part of the Southeast 1/4 of Section 13, Township 13 North, Range 18 E.W.M., beginning at a
point on the North line of said Southeast 1/4 726 feet West of the Northeast corner of said
subdivision;
thence West 140.63 feet; ;
thence South 30 feet, said point being the intersection of the South line of North Avenue ("I" Street)
and the Northerly produced West line of the alley in Block 2 TOWN OF NORTH YAKIMA, (now
Yakima) as recorded in Volume "A" of Plats, page 10 and re-recorded in Volume "E" of Plats page
1, records of Yakima County, Washington;
thence South 18°31' East 205.59 feet,
thence South 71°29' West 70.05 feet true point of beginning;
thence South 71°2F West 70,05 feet;
thence North 18°31' West 23.46 feet;
thence North 90°00' East 73.87 feet to the true point of beginning.
AND EXCEPT that portion within the 400 foot right of way of the Northern Pacific Railway granted
by act of Congress of July 2, 1864, and conveyed to said Railway Company by deed recorded in
Volume if 3 of Deeds page 120.
Situated in Yakima, County State of Washington.
•
PARCEL "D"r
That part of the Southeast 1/4 of Section 13, Township 13 North., Range 18, East, W.M., beginning at
a point on the North line of said Southeast 1/4 726 feet West of the Northeast corner of said
subdivision;
thence West 140.63 feet;
thence South 30 feet, said point being the intersection of the South line of North Avenue ("I" Street)
and the Northerly produced West line of the Valley in block 2, Town of North Yakima, now Yakima,
as recorded in Volume "A" of Plats, page 10 and re corded in volume "E" of Plats, page 1,records of
Yakima County, Washington;
thence South 18031' East 205.09 feet to the true point of beginning;
s
thence South 71°29' West 140.1 feet;
thence North 18°31' West 2.5 feet,
thence North I1°29' East 140.1 feet,
thence South 18°31' East 2.5 feet to the true point of beginning.
AND EXCEPT portion within the 400 of of
EXCEPT that portion foot right way the Northern Pacific Railway granted
by act of Congress of July 2, 1864, and conveyed to said Railway Company by Deed recorded in
'Volume 3 of Deeds, Page 120.
Situated in Yakima County, State of Washington.
PARCEL "E":
That portion of the Northeast 1/4 of the Southeast 1/4 of Section 13, Townshiip 13 N, Range 18
E.W.M., and of Lot 5, HENRY T. STONES ACRE TRACTS, as recorded in Volume "A" of Plats,
page 73, records of Yakima County, Washington described as follows.
Beginning at the intersection of the South line of North Avenue and the West line of North lst Street;
thence Southeasterly along said westerly line of North Est street, 134.75 feet to the true point of
beginning.
Thence Southeasterly along said westerly line of North 1st Street, 130 feet;
thence Southwesterly at right angles to said Westerly line of North 1st Street, 140 feet, more or less,
to the Easterly liine of Alley paralleling North 1st Street;
thence Northwesterly along the East line of said Alley to a point 181.45 feet from the intersection of
said Easterly line of said Alley with the South line of said North Avenue;
thence northeasterly 140.5 feet, more or less to the true point of beginning.
Situated in Yakima County, State of Washington.
•
•
DEPARTMENT OF FINANCE & BUDGET
129 North Second Street
Yakima, Washington 98901 - -
July 23, 2003
JPMorgan Chase Bank
Institutional Trust Services
600 Travis Street, Suite 1150
Houston, TX 77002
ATTN Kathy Graves
RE: Instructions Repayment from Guaranteed Loan Funds
Account/Loan to Seong and Helen Kim
VFR Note Number. B -02 -MC -53-0008
Dear Kathy.
7-,20q((r. //
Pursuant to Paragraph 4.02 of the Indenture of Trust and Custodial Agreement between the City of
Yakima and JPMorgan Chase Bank, the City, through its undersigned authorized representative, hereby
instructs that you act in accordance with the terms of these instructions:
1 Deliveries into Guaranteed Loan Funds Account. On or about August 7, 2003, you will be
receiving, via wire transfer the sum of $330,000 ("Guaranteed Loan Funds"), which amount should be
received no later than 4.00 p m , New York City time Upon receipt, such amounts shall he deposited
into the Guaranteed Loan Funds Account. We understand that funds received after 4.00 p m. New
York time may not be credited to the Guaranteed Loan Funds Account until the next Business Day
2. Payment from Guaranteed Loan Funds. After receipt of the Guaranteed Loan Funds, you are
authorized and directed by the City to make payment of the entire amount by wire transfer or other
method providing immediately available funds, to
Key Bank of Washington
102 E Yakima Avenue
Yakima, WA 98901
ABA #. 125000574
Account Name Fidelity Title Company
Escrow Trust Account
Number. 472091002593
Reference Escrow #00059089
Contact Person John Corning
Fidelity Title Company
(800) 666-8308
EXHIBIT "A"
Customer Service (509) 575-6080 • Finance (509) 575-6070 • Information Systems (509) 575-6098
Yakima
bleed
'1111!
1994
Page 2
Seong and Helen Kim
VFR Note Number B -02 -MC -53-0008
Please acknowledge your receipt and acceptance of these instructions by executing and dating a copy of
this letter enclosed herewith. After execution and dating thereof by you as indicated below, return the
^vriginai to Jeanne Thompson, City'o1 Yakima, Finance Department
Sincerely,
Richard A. 7a,c Jr.
City Manager
WE ACKNOWLEDGE RECEIPT OF THESE INSTRUCTIONS AND AGREE TO ACT IN THIS
TRANSACTION IN STRICT ACCORDANCE WITH THE FOREGOING INSTRUCTIONS
Dated f r� , 2003
JPMorgan Chase Bank
Author ignatory
EXHIBIT "A"
•
Carlson, Boyd & Bailey
230 S. Second Street, Ste. 202
Yakima, WA 98901
Attention: Don Boyd
ENDORSEMENT
to
ALTA COMMITMENT
Issued By FIDELITY TITLE COMPANY
acting as agent for
CHICAGO TITLE INSURANCE COMPANY
Endorsement No. 2 to 2nd Report
Our office File No. 00059089
RE: KIM
This Endorsement is made a part of said Commitment including any prior Endorsements, and is subject to the schedules,
terms and provisions and the conditions and stipulations therein, except as modified by the provisions hereof:
1. The Effective Date of the ALTA Commitment is now: March 23, 2004 at 8:00 a.m.
2. The attached Schedule B of the Commitment has been modified as follows:
(B) New Paragraph 10 has been added.
3 Please replace the appropriate Schedules to the existing Commitment with the attached revisions.
4. 1 cc City of Yakima
1 cc' Halverson and Applegate, Attn.: Kirstin Peterson 311 North 1st Street, Yakima WA 98901
Fidelity Title Company
C3AirrY1
n� �Y
Chris Kroll,
Authorized Agent o hicle Insurance Company
jb/04-16-04
SAS Vision Form ENWA59 Rev 04/29/96
•
ALTA COMMITMENT
Schedule 13
Commitment No. 00059089 (2nd Report)
Schedule B of the policy or policies to be issued will contain exceptions to the following matters unless the same are
disposed of to the satisfaction of the Company.
GENERAL EXCEPTIONS:
A. Rights or claims disclosed only by possession, or claimed possession, of the premises.
B. Encroachments and questions of location, boundary and area disclosed only by inspection of the premises or by
survey.
C Easements, prescriptive rights, rights-of-way, streets, roads, alleys or highways not disclosed by the public records.
D. Any lien, or right to a lien, for contributions to employees benefit funds, or for state workers' compensation, or for
services, labor or material heretofore or hereafter furnished, all as imposed by law and not shown by the public
records.
E. Taxes or special assessments which are not yet payable or which are not shown as existing liens by the public
records.
F Any service, installation, connection, maintenance, or construction charges for sewer, water, electricity, natural gas
or other utilities or garbage collection and disposal.
G. Reservations or exceptions in United States Patents or in Acts authorizing the issuance thereof.
H. Indian tribal codes or regulations, Indian treaty or aboriginal rights, including easements or equitable servitudes.
L Water nghts, claims or title to water
J Defects, liens encumbrances, adverse claims or other matters, if any, created, first appearing in the public records or
attaching subsequent to the effective date hereof but prior to the date the proposed Insured acquires for value of
record the estate or interest or mortgage thereon covered by this Commitment.
SPECIAL EXCEPTIONS:
1. Real property taxes for the assessment year 2004 in the original amount of $19,973 04, which shall be
delinquent after April 30th.
2. Deed of Trust and the terms and conditions thereof, wherein Seong Heon Kim and Helen Suk Kim, husband and
wife is Grantor, and Evergreen Title Insurance Company, Inc. is Trustee, and City Bank is Beneficiary, in the
original amount of $1,200,000.00, dated January 29, 2002, and recorded February 1, 2002, under Auditor's File
Number 7255388 Affects Parcels "A", "B", and a portion of "D".
3 Financing Statement and the terms and conditions thereof, wherein City Bank is the Secured Party., and Kim,
Seong Hoon is the Debtor, recorded February 1, 2002, under Auditor's File Number 7255389. Affects Parcels
"A", "B", and a portion of "D".
Said document amended by document recorded March 15, 2004, under Auditor's File Number 7389511.
SCHEDULE B - continued
Commitment No. 00059089 (2nd Report)
4. Financing Statement and the terms and conditions thereof, wherein City Bank is the Secured Party, and Kim,
Seong Hoon is the Debtor, recorded October 2, 2002, under Auditor's File Number 7295526. Affects Parcels
"A", "B" and a portion of "D".
Said document amended by document recorded March 4, 2004, under Auditor's File Number 7387746.
5. Deed of Trust and the terms and conditions thereof, wherein Seong Hoon Kim and Helen Suk Kim, husband and
wife is Grantor, and Evergreen Title Insurance Company is Trustee, and City Bank is Beneficiary, in the original
amount of $162,198.20, dated December 19, 2002, and recorded December 20, 2002, under Auditor's File
Number 7308363 Affects Parcels "A", "B" and a portion of "D".
6 Deed of Trust and the terms and conditions thereof, wherein Seong Kim and Helen Kim is Grantor; and Fidelity
Title Company is Trustee, and The City of Yakima is Beneficiary, in the original amount of $330,000.00, dated
July 22, 2003, and recorded August 7, 2003, under Auditor's File Number 7351108.
7 Notice of Federal Tax Lien on all property and rights to property belonging to Seong H. and Helen S. Kim, for
the amount of $19,286.21 and additional penalties, interest and costs, filed December 9, 2003, under Auditor's
File Number 7375600.
8. Notice of Federal Tax Lien on all property and rights to property belonging to Seong Hoon Kim and Helen Pak,
for the amount of $83,493.37 and additional penalties, interest and costs, filed February 13, 2004, under
Auditor's File Number 7384942.
9. Notice of Federal Tax Lien on all property and rights to property belonging to Seong H. & Helen S. Kim, for the
amount of $9,395.69 and additional penalties, interest and costs, filed March 22, 2004, under Auditor's File
Number 7390396.
10 Lien claimed by the State of Washington, Department of Employment Security, against Seong H. Kim, an
individual d/b/a Lions Inn in the amount of $676.81. Said lien was recorded April 12, 2004, under Auditor's
File Number 7393968.
11. Unrecorded leaseholds, if any; rights of vendors and holders of security interest on personal property installed
upon said property, and rights of tenants to remove trade fixtures at the expiration of the term.
12. Agreement and the terms and conditions thereof regarding right of entry, as recorded February 13, 2003, under
Auditor's File Number 7317054.
jb/03-22-04 (2nd Report)
•
Fidelity Title Company
406 North Second Street
Yakima, WA 98907
(509) 248-6210
BUYER'S CLOSING STATEMENT
FINAL
Buyer: Seong Kim
Helen Kim
Property Address: 818 and 822 North 1st Street
Yakima, WA 98901
RECFR1E®
AUG 1 8 2003
CITY ur r b+S M
COMMUNITY DEVELON4ENT
Escrow No:
Close Date:
Proration Date:
Date Prepared:
00059089 -002 -JC
08/04/2003
08/04/2003
08/08/2003
'Description f
Debit
Credit Tr
NEW AND EXISTING ENCUMBRANCES:
New First Loan from City of Yakima HUD
330,000.00
PRORATIONS AND ADJUSTMENTS:
Hold Back
26,000.00
PAYOFFS:
Payoff to David A. Godenbera et al
182,000.00
$182,000.00 Principal Balance
NEW LOAN CHARGES:
Loan Origination Fee to City of Yakima HUD
3,300.00
Attorney Fees to Halverson Applegate P.S.
4,373.00
HUD Fee to City of Yakima HUD
1,370.88
ADDITIONAL DISBURSMENTS:
Payoff Account to Discover Card Service
5,574.98
Payoff Account to Discover Card Service
7,095.27
Payoff Account to CITI
4,703.35
Payoff Account to Capital One
1,426.64
Payoff Due to American Express
5,907.85
Payoff Due to Chase
1,500.00
Taxes to Yakima Co
21,433.28
Painting to Bruner Painting Inc
4,000.00
Construction Cost to Larry A. Day Construction
8,480.94
Lumber to Helliesen Lumber & Supply
3,974.59
Sign to•CascadeSign
7,000.00
Equipment to Positive Technologies Inc
13,301.00
Supplies to Sysco
6,363.20
Lighting to Inland Lighting
343.90
Pest Control to Sprague
453.18
Cleaning to CBC
264.36
Repayment for Funds Advance to Seon & Helen Kim
6,606.18
Working Capital to Seon & Helen Kim
9,534.76
Reconveyance Fee to Yakima Title and Escrow
75.00
Payoff to Capital One
3,800.00
TITLE CHARGES:
Title Insurance Fees to Fidelity Title Co.
583.00
Title Sales Tax to Fidelity Title Co
46.06
RECORDING AND EXCISE TAXES:
Recording Fee to Fidelity Title Co
30.00
Mortgage. 0 pages @ $30.00
•
ESCROW CHARGES:
Escrow Fee to Fidelity Title Company
425.00
Escrow Sales Tax to Fidelity Title Company
33.58
Sub Totals
330,000.00
330,000.00
Totals
330,000.00
330,000.00
Page 1 of 2
Fidelity Title Company
406 North Second Street
Yakima, WA 98907
(509) 248-6210
BUYER'S CLOSING STATEMENT
FINAL
Buyer: Seong Kim
Helen Kim
Property Address: 818 and 822 North 1st Street
Yakima, WA 98901
Escrow No:
Close Date:
Proration Date:
Date Prepared:
RECEIVED
AUG 1 8 2003
CITY 01- YAKIMA
COMMUNITY DEVELOPMENT
00059089 -002 -JC
08/04/2003
08/04/2003
08/08/2003
•?.
• <$.\6, , -
Description • •
ebit
redit
Page 2 of 2
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No.
For Meeting Of: July 15, 2003
ITEM TITLE: Consideration of a resolution approving a loan application and authorizing
the City Manager to execute a Loan Agreement and Promissory Note with
Helen and Seong Kim in the amount of $330,000.
SUBMITTED BY:
m Cook, Director of Community and Economic Development
CONTACT: William Cook, 575-6113
SUMMARY EXPLANATION:
Attached are the Resolution, Loan Agreement and Promissory Note for a $330,000 loan to Helen
and Seong Kim. Funding for the loan will come from the Economic Development Initiative
grant and Section 108 loan from the U.S. Department of Housing and Urban Development.
Pepper's Family Restaurant is a new business locating in a former Denny's restaurant building at
801 North 1St Street. The restaurant will create 25 full-time equivalent jobs. The requested loan
amount is $330,000, and will be used to refinance existing acquisition debt, make repairs to the
building, and provide working capital. The principals of the business are Sean and Helen Kim.
The Kims are owners of the Ramada Limited Hotel (formerly Lions Inn), located adjacent to the
restaurant. The restaurant building has been closed for over a year, and its re -opening is
important to the success of the Ramada Hotel and revitalization of the North lsc Street comdor.
In addition to a Loan Agreement and Promissory Note, the loan shall be secured by personal
guaranties signed by the borrowers. The parties have also agreed to provide the City a security
interest lien on their Ramada Limited Hotel.
The National Development Council (NDC) has reviewed the application and determined that the
Pepper's Family Restaurant application meets the cnteria for this type of loan, demonstrates a
sound plan for reopening this business, and provides sufficient security to secure this loan in case
of default.
Resolution _X_ Ordinance _ Contract _ Other: Loan Application
Funding Source: U.S. Department of Housing and Urban Development
Approval for Submittal:
City Manager
STAFF RECOMMENDATION: Staff recommends approval of the resolution.
BOARD RECOMMENDATION: Economic Development Committee recommends approval.
COUNCIL ACTION:
ADDRESS:
230 S. 2N0 STREET
YAKIMA, WASHINGTON
98901
TELEPHONE:
509.839.6611
FACSIMILE:
509-834-6610
WEB SITE:
www.clablawtirm.com
1111 Carlson Boyd & Bailey PLLC
Attorneys at Law 1111
May 23, 2006
Mr. R. A. Zais, City Manager
City of Yakima
129 N. 2nd St.
Yakima, WA 98901
Hand -deliver
Re: Seong and Helen Kim / Pepper's Restaurant
Dear Mr. Zais:
DONALD A. BOYD
E -Mail dhovd@chblawlirm.com
d RECE FD
CITY OF YAKIMA
MAY 2 3 2006
FEICE OF CITY MANAGER
I write to request that you sign the enclosed Request for Reconveyance
authorizing me, as Trustee, of execute and deliver a Reconveyance Deed for the
Deeds of Trust securing the City's loan to Seong and Helen Kim.
The Kims are in the process of selling the Pepper's Restaurant property and will
pay off the City loan secured by that property. Upon receipt of the Request for
Reconveyance, I will deliver the signed Reconveyance Deed and Closing
Instructions of the City to Ms. Barbara Luther at First American Title Company
and she will proceed to close the sale of the restaurant property and pay off of the
City loan. I attach a copy of the Reconveyance Deed and Closing Instructions for
your information.
Please let me know if you need any further information.
Very truly yo
;-'
onald A. Boyd
Encl.
cc. Bill Cook
Michael Morales
Tim Jensen
X.\CITY OF YAKIMA-20009\Kim-2003012\2006 Payoff\Correpsondence\Zais 052306 Otr - re Request for Reconveyance).doc
REQUEST FOR FULL RECONVEYANCE
The undersigned beneficiary, City of Yakima, a Washington municipal
corporation, is the legal owner and holder of the promissory note in the original sum of
$330,000.00, secured by that certain Deed of Trust in which Seong Kim and Helen
Kim, husband and wife, are the grantor and Fidelity Title is trustee, filed for record on
August 7, 2003 as Auditor's File No. 7351108 official records of Yakima County,
Washington and modified by instrument recorded June 18, 2005 under Auditor's File
No. 7458674.
The portion of the indebtedness secured by said Deed of Trust having been fully
satisfied, the Deed of Trust is herewith surrendered to you for reconveyance. The Note
is fully satisfied, and the Note will be surrendered for cancellation upon approval by
the United States Department of Housing and Urban Development and written release
of the Note and security thereof.
You are therefore requested, upon payment of all sums owing to you, to reconvey
without warranty, to the person(s) entitled thereto, the right, title and interest now
held by you thereunder. rd
DATED this 2-3 day May, 2006.
ATTEST:
City of Yakima
129 North Second Street
Yakima, WA 98901
a
Deborah Moore, Acting City Clerk --
CITY OF YAKIMA, a Washington municipal
corporation, as Beneficiary
By:
R.A. Zais, J., City Manager
STATE OF WASHINGTON )
) ss:
County of Yakima )
I certify that I know or have satisfactory evidence that R.A. Zais, Jr., City
Manager for the City of Yakima, a Washington municipal corporation, signed this
instrument, on oath stated that he was authorized to execute the instrument and
acknowledge it to be the free and voluntary act of such party for the uses and purposes
mentioned in the instrument.
GIVEN
nd official seal this 02.3A day of May, 2006.
4140
z,0,/./z(u
ARY PUBLIC in and for the
State of Washin n
Residing at G/774
My Commissio xpires: 3- i3 -i0
X.\CITY OF YAKIMA-20009\Kim-2003012\2006 Payoff\Request for Reconveyance 052206 (modification).doc