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HomeMy WebLinkAboutR-2017-118 Yakima County SIED Funds Application; Property Development at 3215 River RoadA RESOLUTION RESOLUTION NO. R-2017-118 authorizing an application to the Yakima County SIED Board for funds for utilities necessary to support the development of the property located at 3215 River Road WHEREAS, the Yakima City Council established that development of commercial properties and increasing jobs for residents of the City is an Economic Development priority for the City of Yakima, and WHEREAS, the Yakima City Council has invested and partnered in the creation of Craft Beverage Yakima to help increase the number of local breweries, distilleries, wineries and cideries, and WHEREAS, Yakima County has established the Supporting Investments in Economic Diversification (SIED) funds to assist the growth of business, and WHEREAS, the property owner at 3215 River Road is developing the parcel into a microbrewery and production center that will contribute to the local tourism potential and niche beer industry growth in Yakima and will initially employ seven people, and WHEREAS, the property at 3215 River Road is currently not serviced by City water or sewer service and a successful SIED fund award would help bring these necessary services to this property, as well as to make utility services available to neighboring property owners for future economic activity; and WHEREAS, the property owner agrees to repay the loan proceeds from the SIED Fund to the City of Yakima through a written agreement to be executed if the SIED Fund approves the grant and loan request; and WHEREAS, the City Council deems it to be in the best interest of the City of Yakima and its residents to authorize the City Manager to execute and submit a grant/loan application with Yakima County for funding of infrastructure improvements from the SIED Fund for the above-described project, now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: The City Manager is hereby authorized and directed to submit a grant application with Yakima County for funding from the Yakima County SIED program for utility infrastructure improvements associated with development of the property located 3214 River Road. which, if awarded, will require the City of Yakima to execute a grant agreement with Yakima County and the property owner at 3215 River Road for repayment. The City Manager is authorized to execute the grant agreement with Yakima County and the property owner at 3215 River Road ADOPTED BY THE CITY COUNCIL this 3rd day of October, 2017 ATTEST Sonya CI*(Tee, City Clerk y, Mayor BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDASTATEMENT 1 Item No. 13. For Meeting of: October 3, 2017 ITEM TITLE: Resolution authorizing an application to the Yakima County SIED Board for funds for utilities necessary to support the development of the property located at 3215 River Road SUBMITTED BY: Sean Hawkins, Economic Development Manager, 575-6274 SUMMARY EXPLANATION: The Valley Brewing Company is under development at 3215 River Road. This new brewery and tap room would add to the growth of the local craft beverage industry within the City of Yakima and employ seven people initially. The property is currently serviced by well water and a septic sewer system which would not meet health requirements for brewing beer. The SI ED (Supporting Investment in Economic Development) grant and loan funds would extend water and sewer to 3215 River Road and also bring infrastructure to neighboring properties for future economic activities. The project is estimated to cost $103,500. The City of Yakima will have no cash commitment to make if the SIED application is awarded. The owners of Valley Brewing Company would pay the loan portion back to the City of Yakima through an agreement using their property as collateral. ITEM BUDGETED: No STRATEGIC PRIORITY: Economic Development APPROVED FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: Adopt resolution. BOARD/COMMITTEE RECOMMENDATION: At the August 24, 2017 Council Economic Development Committee meeting, City Staff, Jon 2 Smith from Yakima County Development Association and representatives from Valley Brewing Company reviewed the request from Valley Brewing Company for Yakima County SI ED funding to extend water and sewer to their location at 3215 River Road. The council members present, Coffey and A. Gutierrez, voted to move this issue to the full City Council. The grant application is due to the Yakima County SI ED board on Thursday, October 5th. ATTACHMENTS: Description D Resolution Valley Brewing Company D Sewer and water map for Valley Brewing Company Upload Date 9/25/2017 T25/2017 Type Cover Memo Cover Memo w August 16, 2017 r M 5 cityMap 3219 3217 - `{'It 1310 ; 3215 J 3211 ►ir-.Main and Lateral � 2 3109 3110 3108 310 1:1,439 0 0.015 0.03 0.06 mi 0 0.0275 0.055 0.11 km Sources: Esri, HERE, DeLorme, Intermap, increment P Corp., GEBCO, USGS, FAO, NPS, NRCAN, Geo Base, IGN, Kadaster NL, Ordnance Survey, Esri Japan, METI, Esri China (Hong Kong), swisstopo, Mapmylndia, © OpenStreetMap contributors, and the GIS User Community City of Yakima, Washington City of Yakima, Washington - 2017 TERM LOAN AGREEMENT PARTIES: BORROWER: Korey Shroyer and Joe Daily, LENDER: City of Yakima, a Washington municipal corporation L, 4) TERM LOAN AGREEMENT dated as of-AI4Laaer , 20 7, between Borrower and Lender. The parties hereto hereby agree as follows: BACKGROUND: The Borrower is the owner of certain real property within the city limits of the City of Yakima upon which Borrower wishes to improve infrastructure to its property, including construction of 420 linear feet of 8 inch City of Yakima water line and 80 feet of 8 inch sewer main from the corner of 32nd Avenue and River Road to the vicinity of 3215 River Road, together with miscellaneous items and materials related to the improvements. The City will lend to the Borrowers under this agreement, funds up to Sixty One Thousand Five Hundred Eighty Dollars ($61,580), said loan amount not to exceed 40% of the construction bid acceptable to Lender and to the extent such funds are made available to the City from Yakima County under the County's Supporting Investments in Economic Development Program and other City improvement resources. Article I DEFINITIONS AND ACCOUNTING TERMS Section 1.01. Defined Terms. As used in this Agreement, the following terms have the following meanings (terms defined in the singular to have the same meaning when used in the plural and vice versa): "Agreement" means this Term Loan Agreement, as amended, supplemented, or modified from time to time. Term Loan Agreement - 1 "Business Day" means any day other than a Saturday, Sunday, or other day on which commercial banks in Washington are authorized or required to close under the laws of the State of Washington. "Collateral" means all property that is subject to the security interest granted by the Deed of Trust attached as Exhibit "B". "Commitment" means the Lender's obligation to make Loans to the Borrower pursuant to Section 2.01 in the amount referred to therein. "County SIED Agreement" means the loan agreement between the City of Yakima, as borrower, and Yakima County, as lender, under its Supporting Investments in Economic Development ("SIED") Program, as evidenced by that written commitment to lend and grant funds to the City dated November 21 , 2017 and all documents subsequently executed in conjunction therewith. "Debt" means indebtedness or liability for borrowed money hereunder. "Default" means any of the events specified in Section 7.01 and the regulations and published interpretations thereof. "Event of Default" means any of the events specified in Section 7.01, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "GAAP" means generally accepted accounting principles in the United States. "Lien" means any mortgage, deed of trust, pledge, security interest, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or preference, priority, or other security agreement or preferential arrangement, charge or encumbrance of any kind or nature whatsoever. "Loan" shall have the meaning assigned to such term in Section 2.01. Term Loan Agreement - 2 "Loan Document" means this Agreement, the Note, and the Deed of Trust. "Note" shall have the meaning assigned to such term in Section 2.03, and shall be in substantially the form as attached hereto as exhibit "A". "Principal Office" means the Lender's office at 129 North 2nd Street, Yakima, Washington. Section 1.02. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 4.04, and all financial data submitted pursuant to this Agreement shall be prepared in accordance with such principles. Article II AMOUNT AND TERMS OF THE LOAN Section 2.01. Term Loan. The Lender agrees on the terms and conditions hereinafter set forth, to make a loan (the "Loan") to the Borrower on the date of this Agreement in the principal amount of not more than Sixty One Thousand Five Hundred Eighty Dollars($61,580). Section 2.02. Interest. The Borrowers shall pay the interest to the Lender on the outstanding and unpaid principal amount of the Loan made under this Agreement at a rate per annum equal to the interest rate charged under the County SIED Agreement (3.190). Any change in the interest rate resulting from a change in the rate charged under the County SIED Agreement shall become effective as of the opening of business on the day on which such change in the County SIED Agreement interest rate shall become effective. Interest shall be calculated in a manner consistent with the terms of the County SIED Agreement. Any principal amount not paid when due (at maturity, by acceleration, or otherwise) shall bear interest thereafter until paid in full, payable on demand, at the rate of 3.69% interest (SIED loan rate plus 0.50%) as of the day immediately after the payment due date. Term Loan Agreement - 3 Section 2.03. Term Note. The Borrower's obligation to repay the Loan shall be evidenced by its promissory note (the "Note") in substantially the form of Exhibit "A" attached hereto with blanks appropriately filled in and payable to the order of the Lender. The Note shall be dated the date of this Agreement and the principal of the Loan shall be repaid in five (5) equal, consecutive annual installments, with the first installment due on June 1, 2019, with four (4) subsequent installments due on the same day of each year thereafter to and including June 1, 2023, provided, however, that the last such installment shall be in the amount necessary to repay in full the unpaid amount of the Loan. Section 2.04. Prepayments. The Borrower may prepay the Note in whole or in part with accrued interest to the date of such prepayment on the amount prepaid, provided that each partial prepayment shall be in a principal amount of not less than the next due annual payment and shall be applied to the principal installments of the Note in the inverse order of their maturities. Section 2.05. Method of Payment. The Borrower shall make each payment under this Agreement and under the Note on the date when due in lawful money of the United States to the Lender at its Principal Office in immediately available funds. Whenever any payment to be made under this Agreement or under the Note shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest. Section 2.06. Use of Proceeds. The proceeds of the Loan hereunder shall be used by the Borrower to improve infrastructure to its property, including construction of 420 linear feet of 8 inch City of Yakima water line and 80 feet of 8 inch sewer main from the corner of 32nd Avenue and River Road to the vicinity of 3215 River Road, together with miscellaneous items and materials related to the improvements as provided for under the approved plans and specifications of the Project. The Borrower will not, directly or indirectly, use any part of such proceeds for any purpose not consistent with said infrastructure improvements. Article III Term Loan Agreement - 4 CONDITIONS PRECEDENT Section 3.01. Condition Precedent to the Loan. The obligation of the Lender to make the Loan to Borrowers is subject to the conditions precedent that the Lender shall have received on or before the day of such Loan each of the following, in form and substance satisfactory to the Lender and its counsel: (1) Note. The Note duly executed by the Borrowers; (2) Security Agreement. A Deed of Trust in substantially the form of Exhibit "B" attached hereto with Blanks appropriately filled in, granting the Lender a second position security interest in the Borrower's real estate described therein. The Borrower shall provide title insurance documenting said second position. (3) Additional documentation. The Lender shall have received such other approvals, opinions, or documents as the Lender may reasonably request. Article IV REPRESENTATIONS AND WARRANTIES The Borrower represents and warrants to the Lender that: Section 4.01. Legally Enforceable Agreement. This Agreement is, and each of the other Loan Documents when delivered under this Agreement will be, legal, valid, and binding obligations of the Borrower and be enforceable against the Borrower in accordance with their respective terms, except to the extent that such enforcement may be limited by applicable bankruptcy, insolvency, and other similar laws affecting creditors' rights generally. Section 4.02. Litigation. There is no pending or threatened action or proceeding against or affecting the Borrower before any court, governmental agency, or arbitrator, which may, in any one case or in the aggregate, materially adversely affect the financial condition, operations, properties, or business of the Borrower or the ability of the Borrower to perform its obligation under the Loan Documents to which it is a party. Term Loan Agreement - 5 Section 4.03. Ownership and Liens. The Borrowers have title to all assets assigned or pledged to Lender as security for repayment of the Note. Section 4.04. Development Standards. The Borrower agrees that as partial consideration for the City making SIED loan resources available to it for infrastructure improvements serving Borrower's property, Borrower agrees to develop the property in accord with the following: (1) All applicable City of Yakima development standards shall be included on Borrower's submitted site development plans and also incorporated in Borrower's construction designs and specifications for all development proposals submitted for City review for Borrower's project site, including but not limited to City of Yakima Municipal Code Title 12 Development Standards. Section 4.05. Environment. The Borrowers and the Guarantor have duly complied with, and their businesses, operations, assets, equipment, property, leaseholds, or other facilities are in compliance with, the provisions of all federal, state, and local environmental, health, and safety laws, codes and ordinances, and all rules and regulations promulgated thereunder. Neither the Borrowers nor the Guarantor have received notice of, nor knows of, or suspects, facts which might constitute any violations of any federal, state, or local environmental, health, or safety laws, codes or ordinances, and any rules or regulations promulgated thereunder with respect to its businesses, operations, assets, equipment, property, leaseholds, or other facilities. Neither the Borrowers nor the Guarantor have any indebtedness, obligation, or liability, absolute or contingent, matured or not matured, with respect to the storage, treatment, cleanup, or disposal of any solid wastes, hazardous wastes, or other toxic or hazardous substances (including without limitation any such indebtedness, obligation, or liability with respect to any current regulation, law, or statute regarding such storage, treatment, cleanup or disposal) which is not disclosed herein. Term Loan Agreement - 6 Article V AFFIRMATIVE COVENANTS So long as the Note shall remain unpaid, the Borrowers will: Section 5.01. Maintenance of Existence. Preserve and maintain its company existence and good standing in the jurisdiction of its formation. Section 5.02. Maintenance of Records. Keep adequate records and books of account reflecting all financial transactions of the Borrowers. Section 5.03. Maintenance of Properties. Maintain, keep, and preserve all of its properties (tangible and intangible) necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and tear excepted. Section 5.04. Conduct of Business. Continue to engage in an efficient and economical manner in a business of the same general type as now conducted by it on the date of this Agreement. Section 5.05. Compliance With Laws. Comply in all respects with all applicable laws, rules, regulations, and orders, such compliance to include, without limitation, paying before the same become delinquent all taxes, assessments, and governmental charges imposed upon it or upon its property. Section 5.06. Environment. Be and remain in compliance with the provisions of all federal, state, and local environmental, health, and safety laws, codes and ordinances, and all rules and regulations issued thereunder; notify the Lender immediately of any notice of a hazardous discharge or environmental complaint received from any governmental agency or any other party; notify the Lender immediately of any hazardous discharge from or affecting its premises; immediately contain and remove the same, in compliance with all applicable laws; promptly pay any fine or penalty assessed in connection therewith; permit the Lender to inspect the premises, to conduct tests thereon, and to inspect all books, correspondence, and records pertaining thereto; and at the Lender's request, Term Loan Agreement - 7 and at the Borrower's expense, provide a report of a qualified environmental engineer, satisfactory in scope, form, and content to the Lender, and such other and further assurances reasonably satisfactory to the Lender that the condition has been corrected. Article VI NEGATIVE COVENANTS So long as the Note shall remain unpaid, the Borrowers shall not: Section 6.01. Liens. Create, incur, assume, or suffer to exist any Lien upon or with respect to any of its assets assigned or pledged to Lender to secure payment under the Note and performance of all obligations under this Agreement, now or hereafter acquired. Article VII EVENTS OF DEFAULT Section 7.01. Events of Default. If any of the following events shall occur: (1) The Borrowers should fail to pay the principal of, or interest on, the Note, or any fee, as and when due and payable; (2) Any representation or warranty made or deemed made by the Borrowers in this Agreement, the Deed of Trust, or the Note shall prove to have been incorrect, incomplete, or misleading in any material respect on or as of the date made or deemed made; (3) The Borrowers shall fail to perform or observe any term, covenant, or agreement contained in Articles V, VI, or VII hereof; (4) The Borrowers (a) shall generally not pay, or shall be unable to pay, or shall admit in writing its inability to pay its debts as such debts become due; or (b) shall make an assignment for the benefit of creditors, or petition or apply to any tribunal for the appointment of a custodian, receiver, or trustee for it or a substantial part of its assets; or (c) shall commence any proceeding Term Loan Agreement - 8 under bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or (d) shall have had any such petition or application filed or any such proceeding commenced against it in which an order for relief is entered or an adjudication or appointment is made, and which remains undismissed for a period of one hundred and eighty (180) days or more; or (e) shall take any action indicating its consent to, approval of, or acquiescence in any such petition, application, proceeding, or order for relief or the appointment of a custodian, receiver, or trustee for all or any substantial part of its properties; or (f) shall suffer any such custodianship, receivership, or trusteeship to continue undischarged for a period of one hundred and eighty (180) days or more; (5) The Lender otherwise deems itself insecure. Section 7.02. Remedies Upon Default. Upon the occurrence of any event of default, the Lender may, by notice to the Borrowers, declare the Note, all interest thereon, and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Note, all such interest, and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly waived by the Borrower. Article VIII MISCELLANEOUS Section 8.01. Amendments, Etc. No amendment, modification, termination, or waiver of any provision of any Loan Document to which the Borrowers are a party, nor consent to any departure by the Borrowers from any Loan Document to which it is a party, shall in any event be effective unless the same shall be in writing and signed by the Lender, and then such waiver or consent shall be effective only in specific instance and for the specific purpose for which given. Section 8.02. Notices, Etc. All notices and other communications provided for under this Agreement and under the other Loan Documents to which the Borrowers are a party Term Loan Agreement - 9 shall be in writing (including telegraphic, telex, and facsimile transmissions) and mailed or transmitted or delivered, If to the Borrowers, at their address at: Korey Shroyer Joe Daily 3215 River Road Yakima, WA 98902 And if to the Lender, at its address at: 129 North Second Street Yakima, Washington 98901 Attention: William R. Cook; Or, as to each party, at such other address as shall be designated by such party, in a written notice to the other party complying as to delivery with the terms of this Section 8.02. Except as otherwise provided in this Agreement, all such notices and communications shall be effective when deposited in the mails or delivered to the telegraph company, or sent, answer back received, respectively, addressed as aforesaid, except that notices to the Lender pursuant to the provisions of Article II shall not be effective until received by the Lender. Section 8.03. No Waiver. No failure or delay on the part of the Lender in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy hereunder. The rights and remedies provided herein are cumulative, and are not exclusive of any other rights, powers, privileges, or remedies, now or hereafter existing, at law or in equity or otherwise. Section 8.04. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Borrower and the Lender and their respective successors and assigns, except that the Borrowers may not assign or transfer any of their rights under any Loan Document to Term Loan Agreement - 10 which the Borrower is a party without the prior written consent of the Lender. Section 8.05. Integration. This Agreement and the Loan Documents contain the entire agreement between the parties relating to the subject matter hereof and supersede all oral statement and prior writings with respect thereto. Section 8.06. Indemnity. The Borrowers hereby agree to defend, indemnify, and hold the Lender harmless from and against any and all claims, damages, judgment, penalties, costs, and expenses (including attorney fees and court costs now or hereafter arising from the aforesaid enforcement of this clause) arising directly or indirectly from the activities of the Borrowers, their predecessors in interest, or third parties with whom they have a contractual relationship, or arising directly or indirectly from the violation of any environmental protection, health, or safety law, whether such claims are asserted by any governmental agency or any other person. This indemnity shall survive termination of this Agreement. Section 8.07. Governing Law. This Agreement and the Note shall be governed by, and construed in accordance with, the laws of the State of Washington. Section 8.08. Severability of Provisions. Any provision of any Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provision of such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction. Section 8.09. Headings. Article and Section headings in the Loan Documents are included in such Loan Documents for the convenience of reference only and shall not constitute a part of the applicable Loan Documents for any other purpose. Section 8.11. Attorney Fees. In the event legal action is instituted to determine the rights and duties of the parties hereunder in any state or federal court, including bankruptcy court, the prevailing party in any court action shall be awarded, its reasonable attorney's fees, costs and expenses in pursuing such action in any Term Loan Agreement - 11 state or federal court and enforcing such rights and duties determined thereby. Section 8.12. Jury Trial Waiver. THE LENDER AND THE BORROWERS HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE LOAN DOCUMENTS. NO OFFICER OF THE LENDER HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION. DISCLOSURE ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. ATTEST: City of Yakima 129 North Second Street Yakima, WA 9$901 1 , City Cler Cm CONTRACT NO. ,201 7 - RESOLUTION -RESOLUTION NO: R ``2O / 7-1/ v Term Loan Agreement - 12 CITY OF YAKIMA City Manager PROMISSORY NOTE $61,580.00 December 1, 2017 Yakima, Washington 1. Promise to Pay. Korey Shroyer and Joe Daily, (referred to as "Maker" herein), hereby promise to pay to the order of The City of Yakima, Washington, a Washington municipal corporation, ("Holder" herein), at Yakima, Washington or at such other place as the Holder may designate in writing, in lawful money of the United States of America, the principal sum of Sixty One Thousand Five Hundred Eighty Dollars ($61,580.00), at three point one nine percent (3.19%) interest per annum on the unpaid balance, on the terms and conditions set forth herein. The funds being loaned hereunder are from the Yakima County SIED funding provided to the City of Yakima, Washington via contract no. YC-YVB-17, and are being used to construct a water and sewer line to the Maker's brewery production facility and tap room located at 3215 River Road, Yakima Avenue, Yakima, Washington. 2. Payment. Maker shall make five (5) annual equal installment payments of $12,316, plus accrued interest thereon, with the first payment commencing on June 1, 2019. Succeeding annual payments shall be due on June 1 of each of the next four consecutive years thereafter, with the final payment due on June 1, 2023. The final installment may be either greater or lesser than the preceding annual payments, as may be required to fully amortize the remaining repayment amount. The City of Yakima will invoice the Maker one month in advance of each payment then becoming due to the City of Yakima. However, the City's failure to so invoice Maker shall not release Maker from the responsibility to pay the loan amount in full, including accrued interest thereon. 3. Prepayment. Maker shall not have the right to prepay this Note in full or in part at any time without the prior approval of Holder. 4. Application of Payments. Payments made hereunder may be applied in any order to payments of costs, interest or principal due hereunder, at the option of the Holder. 5. Acceleration; Cross -Default. This Note shall be in default if payment of any installment is not made when due, or a default occurs under the Agreement dated November 17, 2017, or any other instrument evidencing, securing or relating to any other indebtedness of Maker to the Holder (whether direct or indirect), and such default continues after any notice from the Holder to Maker and the expiration of any period granted to Maker for curing such default as provided for in any such instrument. In the event of default under this Note that is not timely cured by Maker, Holder may elect to accelerate all amounts due and owing under this Note. 6. Late Payment Charge - Curing of Monetary Defaults. If any payment is not delivered to Holder within five days after the payment due date, then a late payment fee of $250.00 will be charged and immediately payable. A default in payment of any amount due hereunder may be cured only by payment in full of such amount plus the applicable fees and charges, plus any attorneys' fees incurred by the Holder by reason of such default. Promissory Note Page -1- 7. Nonwaiver. Failure to exercise any right the Holder may have or be entitled to in the event of any default hereunder shall not constitute a waiver of such right or any other right in the event of any subsequent default. 8. Waiver of Presentment. The Maker and all guarantors and endorsers hereof hereby severally waive presentment for payment, protest and demand, notice of protest, demand, dishonor and nonpayment of this Note; and consent that the Holder may extend the time of payment or otherwise modify the terms of payment of any part of the whole of the debt evidenced by this Note. Each and every party signing or endorsing this Note binds itself as a principal and not as a surety. In any action or proceeding to recover any sum herein provided for, no defense of adequacy of security or that resort must first be had to security or to any other person shall be asserted. This Note shall bind the undersigned and its or their successors and assigns, jointly and severally. 9. Security of Note, Pledge of License Agreement. This Note evidences the obligation incurred by Maker for the construction of a water and sewer line for use in Maker's brewery production facility and tap room. To secure prompt performance of Maker's obligations hereunder, Maker does hereby pledge and assign to Holder all Maker's rights, title and interest under the Deed of Trust dated November 17, 2017. In the event of an uncured default hereunder that Maker does not fully cure within thirty (30) days after Holder sends written notice to Maker describing said default and demanding cure thereof, then Holder may foreclose Maker's interest under said Deed of Trust by any judicial or non -judicial means available at law or in equity. 10. Collection Costs. Maker agrees to pay all costs, including reasonable attorneys' fees, incurred by the Holder in any suit, action or appeal therefrom, or without suit, in connection with collection hereof or enforcement of Holder's rights hereunder. 11. Maximum Interest. Neither this Note nor any instrument securing payment hereof or otherwise relating to the debt evidenced hereby shall require the payment or permit the collection of interest in excess of the maximum permitted by applicable law. If this Note or any other instrument does so provide, the provisions of this paragraph shall govern, and neither Maker nor any guarantors or endorsers of this Note nor their respective heirs, personal representatives, successors or assigns shall be obligated to pay the amount of interest in excess of the amount permitted by applicable law. 12. Business Purpose. The undersigned warrants and represents that all funds advanced under this Note shall be applied and are intended solely for the business or commercial purposes stated herein. 13. Notice. Any demand or notice to be made or given under the terms hereof or any instrument now or hereafter securing this Note by the Holder to Maker shall be effective when mailed to the following addresses: Korey Shroyer, Joe Daily 3215 River Road Yakima, WA 98902 Promissory Note Page -2- City of Yakima Attn: Sean Hawkins 129 North Second Street Yakima, Washington 98901 14. Venue: In the event any suit or action is commenced to collect all or any part of this note, the venue of any such action shall lie in a court of competent jurisdiction in Yakima County, Washington. 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. Korey Shroyer, Joe Daily By: ^g Titl . 6. /A:: By: Title: ( X -\CITY OF YAKIMA-20009\Sports Center-2006070\Garbage Facility Loan\Promissory Note - 1.doc Promissory Note Page -3- When recorded return to: Jeff Cutter City of Yakima Legal Department 200 South Third Street, 2nd Floor Yakima, WA 98901 DEED OF TRUST (For Use in the State of Washington Only) THIS DEED OF TRUST, made this 1st day of December, 2017, between KOREY SHROYER and JOE DAILY, as GRANTORS, whose address is 3215 River Road, Yakima, Washington 98902; and FIDELITY TITLE COMPANY, a Washington Corporation, as TRUSTEE, whose address is 117 North Fourth Street, Yakima, Washington 98901; and The CITY OF YAKIMA, as BENEFICIARY, whose address is Yakima City Hall, 129 North Second Street, Yakima, Washington 98901. WITNESSETH: Grantors hereby bargain, sell, and convey to TRUSTEE in Trust, with power of sale, the following described real property in Yakima County, Washington: Legal Description: That portion of the Northeast Quarter of the Northeast Quarter of Section 15, Township 13 North, Range 18 East, W.M., bounded as follows: Commencing at the intersection of the Page 1 of 6 centerline of the right of way of the North Yakima and Valley Railway Company, and the West line of the Northeast Quarter of the Northeast Quarter of said Section 15, thence South 58° 30' 00" East along said railroad centerline 1054.81 feet to the Point of Beginning; thence North 58° 30' 00" West 84.09 feet, thence North 4° 37' 00" East 265.87 feet to the North line of the South 394 feet of the Northeast Quarter of the Northeast Quarter of said Section 15, thence South 88° 16' 14" East parallel with the South line of the Northeast Quarter of the Northeast Quarter of said Section 15 a distance of 75.10 feet to a line bearing North 4° 37' 00" East from the point of beginning, thence South 4° 37' 00" West 307.67 feet to the point of beginning, EXCEPT right of way for said railway company, AND EXCEPT right of way for River Road. Tax Parcel Number: 1813151107 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 each agreement of Grantors herein contained, and payment of the sum of Sixty One Thousand Five Hundred Eighty Dollars ($61,580) with interest, in accordance with the terms of a promissory note of even date herewith, payable to Beneficiary or order, and made by Grantor(s), and all renewals, modifications, and extensions thereof, and also such further sums as may be advanced or loaned by Beneficiary to Grantor(s), 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, GRANTORS COVENANT AND AGREE: 1. To keep the property in good condition and repair; to permit no waste thereof; 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, 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 Grantors. 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 Page 2 of 6 proceedings to foreclose this Deed of Trust. In the event of foreclosure, all rights of the Grantors 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. 6. Should Grantors 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. NO FURTHER ENCUMBRANCES: (OPTIONAL — Not applicable unless initialed by Grantor and Beneficiary) As an express condition of Beneficiary making the loan secured by this Deed of Trust, Grantor shall not further encumber, pledge, mortgage, hypothecate, place any lien, charge or claim upon, or otherwise give as security the property or any interest therein nor cause or allow by operation of law the encumbrance of the Trust Estate or any interest therein without the written consent of Beneficiary even though such encumbrance may be junior to the encumbrance created by this Deed of Trust. Encumbrance of the property contrary to the provisions of this provision shall constitute a default and Beneficiary may, at Beneficiary's option, declare the entire balance of principal and interest immediately due and payable, whether the same be created by Grantor or an unaffiliated third party asserting a judgment lien, mechanic's or materialmen's lien or any other type of encumbrance or title defect. Grantor initials IT IS MUTUALLY AGREED THAT: Beneficiary initials 1. 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 as may be necessary to fully satisfy the obligation secured hereby, shall be paid to Beneficiary to be applied to said obligation. 2. 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. Page 3 of 6 3. 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 Grantors and the Beneficiary, or upon satisfaction of the obligation secured and written request for reconveyance made by the Beneficiary or the person entitled thereto. 4. Upon default by Grantors 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 shall sell the trust property, in accordance with the Deed of Trust Act of the State of Washington, 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 attorney's fee; (2) to the obligation secured by this Deed of Trust; and (3) the surplus, if any, shall be distributed to the persons entitled thereto. 5. 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 Grantors had or had the power to convey at the time of their execution of this Deed of Trust, and such as they 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 purchaser and encumbrancers for value. 6. The power of sale conferred by this Deed of Trust and by the Deed of Trust Act of the State of Washington is not an exclusive remedy; Beneficiary may cause this Deed of Trust to be foreclosed as a mortgage. 7. In the event of the death, incapacity, disability, or resignation of Trustee, Beneficiary may 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 an action or proceeding in which Grantors, Trustee, or Beneficiary shall be a party unless such action or proceeding is brought by the Trustee. 8. This Deed of Trust applies to, inures to the benefit of, and is binding not only on the parties hereto, but on their heirs, devisees, legatees, administrators, executors, and assigns. The term Beneficiary shall mean the holder and owner of the note secured hereby, whether or not named as Beneficiary herein. Page 4 of 6 EXECUTED this 1st day of December, 2017. STATE OF WASHINGTON ) ) ss. County of Yakima ) JO.,E DA tILY I certify that I know or have satisfactory evidence that Korey Shroyer and Joe Daily are the persons who appeared before me, and said persons acknowledged that they each signed this instrument and acknowledged it to be their free and voluntary act for the uses and purposes mentioned in this instrument. DATED this 1st day of December, 2017. ,,,,,,,Notary Public State of Washington JULIA MY COMMISSION EXPIRES December 17, 2019 Notor}ublic in anfor the State of Washington, residing at "0,21 fr"1-A- My commission expires: / 2//7 //9 . Page 5 of 6 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 the within Deed of Trust. Said note, together with all other indebtedness secured by said 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 said Deed of Trust, to cancel said note above mentioned, and all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you thereunder. Dated: ////// 7- Page 6 of 6