HomeMy WebLinkAboutR-2009-055 CDBG Economic Development Loan Agreement with United Builders of WashingtonRESOLUTION NO. R-2009-55
A RESOLUTION authorizing the City Manager of the City of Yakima to execute a
Community Development Block Grant economic development loan
agreement with United Builders of Washington, Inc. in the amount of
$200,000.
WHEREAS, United Builders of Washington, Inc., herein after referred to as "United
Builders", is an established construction company, based in Yakima, and licensed to conduct
business in the state of Washington; and
WHEREAS, United Builders has established and subsidized a community performing
arts facility in the downtown area of the Yakima Renewal Community; and
WHEREAS, the City has received and is responsible for the administration of annual
Entitlement Grants of Community Development Block Grant ("CDBG") funds made available
through the United States Department of Housing and Urban Development (HUD) and
authorized by Title I of the Housing and Community Development Act of 1974, as amended; and
WHEREAS, federal regulations goveming the use of CDBG funds for special economic
development projects allow the City to use such funds as an economic incentive to provide
loans to assist private, for-profit businesses with projects that provide an appropriate level of
public benefit; and
WHEREAS, the City has determined that the CDBG assistance described below is
necessary and appropriate to ensure that United Builders continues its economic development
activities in the City of Yakima's Renewal Community Area; and
WHEREAS, the City has determined that provision of CDBG assistance would provide
substantial appropriate public benefits to the City and the Renewal Community, particularly by
retaining jobs and supporting downtown revitalization; and
WHEREAS, accordingly, the City wants to encourage United Builders to continue such
operations in •the City of Yakima's Renewal Community Area as a special economic
development project and is willing to use CDBG funds to assist United Builders through a
working capital loan of not more than $200,000 over the course of two years according to the
following terms and conditions:
1. Repayment Period: 24 months, total principal and interest due at end of term.
2. Interest rate: 4%
3. Security/collateral:
a. 1'1 Deed of Trust for the real property located at 101 North Naches Avenue in
Yakima, Washington.
b. Any subordinate debt on the secured property must be pre -approved by the City
Manager.
c. In addition to the Loan Agreement and Promissory Note, the loan shall be
evidenced by the personal Guaranties signed by the principals of United Builders
(J. Patrick Strohsal and Steven R. Strohsal), with each member guaranteeing the
full amount of the loan.
4. Clear title report
5. The borrower cannot be delinquent on any local, state or federal taxes.
6. All city, county, state and federal certificates, licenses and permits must be issued and
current.
7. Liability insurance fully paid for the next year.
8. There are no material changes to the financial statements submitted for review by the
City of Yakima for United Builders of Washington, Inc. as of Oct. 31, 2008; Stephen R.
Strosahl dated November 25, 2008; and J. Patrick Strosahl dated March 13, 2009.
9. Provide for review by the City of Yakima a written appraisal report on the subject real
property effective no more than six months from the date of loan funding and showing
sufficient value to provide for full repayment of the loan; and
WHEREAS, the City Council deems it to be in the best interest of the City to authorize
execution of a CDBG economic development project loan agreement with United Builders, now,
therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager of the City of Yakima is hereby authorized and directed to execute a
CDBG economic development project loan agreement with United Builders in the amount of
$200,000 to retain their economic development activity in the City of Yakima's Renewal
Community Area. The City Attorney shall approve the final form of the Agreements.
ADOPTED BY THE CITY COUNCIL this 7Ih day of , 2009.
City Clerk
avid Edle ayor
AGREEMENT BETWEEN THE CITY OF YAKIMA OFFICE OF
NEIGHBORHOOD DEVELOPMENT SERVICES
AND UNITED BUILDERS OF WASHINGTON INC.
THIS AGREEMENT (hereinafter "Agreement") is made and entered into by
and between the City of Yakima, Washington, a first-class city incorporated under
the laws of the State of Washington, through the Office of Neighborhood
Development Services (hereinafter "City") and United Builders of Washington Inc.,
a Washington corporation (hereinafter "United Builders of Washington").
WHEREAS, United Builders of Washington is a private, for-profit
corporation.
WHEREAS, United Builders of Washington seeks use of loan funds from the
City for use as operating funds in the conduct of its business within the City of
Yakima for two years.
WHEREAS, the City has received and is responsible for the administration
of annual Entitlement Grants of CDBG funds made available through the United
States Department of Housing and Urban Development (HUD) and authorized by
Title I of the Housing and Community Development Act of 1974, as amended.
WHEREAS, federal regulations governing the use of CDBG funds for special
economic development projects allow the City to use such funds as an economic
incentive to provide loans to assist private, for-profit businesses with projects that
provide an appropriate level of public benefit.
WHEREAS, the City has determined that the CDBG assistance described
below is necessary and appropriate to ensure that United Builders of Washington
continues its business activity within the City of Yakima.
WHEREAS, continuation of United Builders of Washington's business
activity within the City of Yakima would provide substantial appropriate public
benefits to the City, particularly by creating and retaining jobs.
WHEREAS, accordingly, the City is willing to use CDBG funds to assist
United Builders of Washington through a working capital loan of not more than
$200,000 according to the following terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants, promises,
and agreements set forth herein, it is agreed by and between the City and United
Builders of Washington as follows:
1. Term of Agreement. This Agreement shall commence upon execution by the
parties hereto and full performance of all United Builders of Washington, Inc.'s
obligations shall be due no later than the second annual anniversary date of this
Agreement, unless the Agreement is earlier terminated by the parties in accordance
with the terms of this Agreement.
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2. The Loan. Subject to availability of loan funds from the identified source of
funds and the other provisions of this Agreement, the City shall provide a loan to
United Builders of Washington of $200,000, to be disbursed in accordance with the
terms of the Promissory Note. The loan shall be paid as follows:
A. United Builders of Washington shall make full and final payment of all
amounts due and payable under the Promissory Note no later than the
second annual anniversary date of the Promissory Note.
3. Source of Funds. The source of funds for this Agreement is the City's CDBG
loan funds administered by HUD. It is expressly understood and agreed by the City
and United Builders of Washington that the obligations under this Agreement are
contingent upon the City's receipt of CDBG funds adequate to meet the City's loan
funding obligations under this Agreement.
4. Contact with HUD. United Builders of Washington understands and agrees
that, without the written consent of the City, all direct contact with HUD over any
matter related to the project under this Agreement shall be made solely by the City
unless otherwise provided herein or provided by law.
5. Conditions of Loan. The obligation of the City to advance any portion of the
loan amounts identified in section 3 of this Agreement are subject to the following
additional conditions:
A. All actions undertaken in connection with this Agreement and all
documents incidental thereto shall be satisfactory in form, scope and
substance to the City in its reasonable discretion.
B. United Builders of Washington shall have all applicable and necessary
permits, licenses and approvals of any federal, state, and local government or
governmental authority. The City shall not unreasonably withhold its
approval of any necessary permit, license or other approval necessary for the
project described in this Agreement.
C. If United Builders of Washington, or an entity constituting part of
United Builders of Washington, is a corporation, there shall be delivered to
the City (with respect to each such corporation, if there be more than one) a
certified copy of the record(s) of minutes and Board Resolution of the Board of
Directors of each such corporation specifically authorizing its officers to
execute this Agreement and all other documents necessary for the
consummation of this transaction. The record(s) of the minutes and
Resolution of the Board of Directors meeting shall be certified to be true by
the Secretary or Assistant Secretary of such corporation(s).
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D. United Builders of Washington shall have provided to The City a copy
of an appraisal prepared by a real estate appraiser licensed by the State of
Washington indicating a fair market value of the real property legally
described on Exhibit "A" attached hereto (the "Collateral") of not less than
One Million Dollars which valuation date is not more than six months old.
E. United Builders of Washington shall have provided to The City a first
position lien against the Collateral evidenced by a fully executed Deed of Trust.
F. The loan shall be further secured by the personal Guaranties signed by
J. Patrick Strosahl and Stephen L. Strosahl, with each jointly and severally
guaranteeing the full repayment of the loan.
6. Maintenance and Inspection of Records. United Builders of Washington
shall maintain standard business and accounting records, any other records
required herein, and any other records required by the City in writing. Such
records shall be available for inspection by City representatives, at the City's
expense, at reasonable times during the term of this Agreement and for a period of
three (3) years following termination of this Agreement. In the event that any audit
or inspection identifies any discrepancy, United Builders of Washington shall
provide the City with appropriate clarification and/or financial adjustments within
thirty (30) calendar days of notification of the discrepancy by the City.
7. No City Funds. It is expressly understood that, except for CDBG Entitlement
Grant funds, this Agreement shall in no way obligate any funds or resources of the
City.
8. No Third Party Benefit. The City shall not be obligated or liable under this
Agreement for provision of any goods or services or for payment of any monies to
any party other than United Builders of Washington.
9. Disallowed Loan Advances. Should any loan advance made by the City to
United Builders of Washington be subsequently disallowed or disapproved as a
result of any auditing or monitoring by the City, HUD, or any other federal agency,
United Builders of Washington shall repay such amount to the City within ten (10)
working days of receipt of written notice specifying the amount disallowed.
Repayment of disallowed loan advances may not be made from any CDBG, HUD, or
other federal funds received from or through the City.
10. Annual Financial Report. During the term of this Agreement, United
Builders of Washington shall submit a written financial report reviewed by a
certified public accountant duly licensed by the State of Washington to the City
within twenty (20) days after the end of its fiscal year that demonstrates United
Builders of Washington' maintenance of a net worth sufficient to repayment the
Loan.
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11. Compliance with Law. United Builders of Washington must comply with any
and all applicable laws, rules, and regulations promulgated by any federal, state,
and/or local governmental agency or regulatory body.
Laws that may apply to this Agreement include without limitation:
• Title VI of the Civil Rights Act of 1964 (42 USC 200(d));
• Title VIII of the Civil Rights Act of 1968 (42 USC 3601);
• Section 3 of the Housing and Urban Development Act of 1968, as amended (12
USC 1701(u));
• Section 109 of the Housing and Urban Development Act of 1974, as amended (42
USC 5309);
• Age Discrimination Act of 1975, as amended (42 USC 6101);
• Americans with Disabilities Act of 1990;
• Civil Rights Restoration Act of 1987;
• 49 CFR Part 21;
• 24 CFR Part 570;
• RCW 49.60;
• Davis -Bacon Fair Labor Standards Act (40 US27600000a-276a-5);
• Grant Agreement Work Hours and Safety Standards Act, as amended (40 USC
327-333);
• Section 504 of the Rehabilitation Act of 1973 (29 USC 794);
• Architectural Barriers Act of 1968, as amended (42 USC 4151);
• Section 504 of the Rehabilitation Act of 1973, as amended (29 USC 792);
• Equal Employment Opportunity (Executive Order 11246, September 24, 1965);
• Equal Opportunity in Housing (Executive Order 11063, as amended by
Executive Order 12259);
• The Hatch Act (5 USC 1501 et seq.);
• The National Environmental Policy Act of 1969;
• Uniform Relocation Assistance and Real Property Acquisition Policies Act of
1970 and Amendments of 1987;
• Title IV of the Lead -Based Paint Poisoning Prevention Act (42 USC 4831);
• HUD Reform Act;
• Office of Management and Budget Circulars;
• A-87—Cost Principles for State and Local Governments and 24 CFR Part 85,
Administrative Requirements for Grants and Cooperative Agreements to State,
Local and Federally Recognized Indian Tribal Governments;
• A-128—Single Audit Act.
12. Status of United Builders of Washington. United Builders of Washington
and the City understand and expressly agree that United Builders of Washington is
an independent contractor in the performance of each and every part of this
Agreement. United Builders of Washington, as an independent contractor, assumes
the entire responsibility for carrying out and accomplishing the terms and
conditions of this Agreement on its part to be performed. Additionally, and as an
independent contractor, United Builders of Washington, its agents, employees,
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and/or representatives shall make no claim of City employment nor shall claim
against the City any related employment benefits, social security, and/or retirement
benefits. Nothing contained herein shall be interpreted as creating a relationship of
servant, employee, partnership or agency between United Builders of Washington
and the City.
13. Representations and Warranties.
13.1 United Builders of Washington represents and warrants that:
A. All information, reports and data furnished to the City are complete
and accurate.
B. The financial statement dated October 31, 2008 furnished to the City
fairly reflects the financial condition of United Builders of Washington and
there has been no material change in the financial condition of United
Builders of Washington since the date of said financial statement.
C. United Builders of Washington is current on all tax reports and
returns required to be filed with all Washington State and United States of
America governmental agencies and has paid all taxes assessable under
those tax returns and reports.
D. United Builders of Washington has obtained and is in good standing
with regard to all necessary city, county, state and federal business
certificates, licenses and permits.
E. United Builders of Washington has obtained and fully paid all
premiums for all commercially reasonable liability insurance relating to the
conduct of its business for the next year.
F. No provision of this Agreement contravenes or conflicts with the
authority under which United Builders of Washington is doing business or
with the provisions of any existing indenture or agreement of United Builders
of Washington.
G. United Builders of Washington possesses the legal authority to enter
into this Agreement and accept payments hereunder and has taken all
necessary action to authorize such acceptance.
H. This Agreement will not violate any provision of law or result in any
breach or constitute a default under any agreement to which United Builders
of Washington is presently a party, or result in the creation of any lien,
charge or encumbrance upon any of its property or its assets other than as
specifically may be allowed under this Agreement.
13.2 J. Patrick Strosahl represents and warrants that his personal and
marital community financial statement dated March 13, 2009 furnished to
the City fairly reflects the financial condition of his marital community and
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there has been no material change in the financial condition of his marital
community since the date of said financial statement.
13.3 Stephen R. Strosahl represents and warrants that his personal and
marital community financial statement dated November 25, 2008 furnished
to the City fairly reflects the financial condition of his marital community
and there has been no material change in the financial condition of his
marital community since the date of said financial statement.
14. No Insurance. It is understood the City does not maintain liability insurance
for United Builders of Washington and/or its employees, agents, officers, and
subcontractors.
15. Liability Insurance.
A. On or before the effective date of this Agreement, United Builders of
Washington shall provide the City with a certificate of insurance as proof of
commercial liability insurance with a minimum liability limit of Two Million
Dollars ($2,000,000.00) per occurrence combined single limit bodily injury
and property damage, and Four Million Dollars ($4,000,000.00) general
aggregate. The certificate shall clearly state who the provider is, the
coverage amount, the policy number, and when the policy and provisions
provided are in effect. Said policy shall be in effect for the duration of this
Agreement. The policy shall name the City, its elected officials, officers,
agents and employees as additional insureds and shall contain a clause that
the insurer will not cancel or change the insurance without first giving the
City thirty (30) calendar days' prior written notice. The insurance shall be
with an insurance company rated A -VII or higher in Best's Guide and
admitted in the State of Washington.
16. Indemnification and Hold Harmless. United Builders of Washington agrees
to protect, defend, indemnify, and hold harmless the City, its elected officials,
officers, employees and agents from any and all claims, demands, losses, liens,
liabilities, penalties, fines, lawsuits, and other proceedings and all judgments,
awards, costs and expenses (including reasonable attorneys' fees and
disbursements) to the extent arising out of, relating to, or resulting from United
Builders of Washington' performance and/or nonperformance related to this
Agreement.
In the event that both United Builders of Washington and the City are negligent,
United Builders of Washington' liability for indemnification of the City shall be
limited to the contributory negligence for any resulting suits, actions, claims,
liability, damages, judgments, costs and expenses (including reasonable attorney's
fees) that can be apportioned to United Builders of Washington, its officers,
employees, agents, and/or subcontractors.
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Nothing contained in this section of this Agreement shall be construed to create a
liability or a right of indemnification in any third party.
This section of the Agreement shall survive the term or expiration of this
Agreement and shall be binding on the parties to this Agreement.
17. Limitation of Liability. Neither party will be liable to the other party with
respect to any subject matter of this Agreement for any indirect, incidental,
consequential, special, or exemplary damages (including, without limitation, loss of
revenue or goodwill or anticipated profits or lost business), even if such party have
been advised of the possibility of such damages.
18. Assignment. United Builders of Washington' rights and duties under this
Agreement, or any interest herein, or claim hereunder, shall not be assigned or
transferred in whole or in part by United Builders of Washington to any other
person or entity without the prior written consent of the City which shall not be
unreasonably withheld. In the event that such prior written consent to an
assignment is granted, thenthe assignee shall assume all duties, obligations, and
liabilities of United Builders of Washington stated herein.
19. Termination. This Agreement may be terminated as follows:
A. In the event that the funding contemplated herein is no longer available,
United Builders of Washington may terminate this Agreement upon ten (10)
calendar days written notice to the City.
20. Conflict of Interest. United Builders of Washington represents that it, its
members, officers, employees, and/or agents do not have any interest, direct or
indirect, and shall not hereafter acquire any interest, direct or indirect, which
would conflict in any manner or degree with the performance of this Agreement.
United Builders of Washington further covenants that it will not knowingly hire
anyone or any entity having such a conflict of interest during the performance of
this Agreement.
21. Non -Waiver. The waiver of either the City or United Builders of Washington of
the breach of any provision of this Agreement by the other party shall not operate
and/or be construed as a waiver of any subsequent breach by either party or prevent
either party from enforcing such provision or the remaining terms of this
Agreement.
22. Survival. Any provision of this Agreement that imposes an obligation after
termination or expiration of this Agreement shall survive the term or expiration of
this Agreement and shall be binding on the parties to this Agreement.
23. Severability. It is understood and agreed by the parties hereto that if any part,
term, or provision of this Agreement is held by the courts to be illegal, the validity
of the remaining provisions shall not be affected, and the rights and obligations of
the parties shall be construed and enforced as if the Agreement did not contain the
particular provision held to be invalid. If it should appear that any provision hereof
is in conflict with any statutory and/or regulatory provision of the United States or
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the State of Washington, said provision which may conflict therewith shall be
deemed modified to conform to such statutory and/or regulatory provision.
24. Integration and Modification. This Agreement sets forth all of the terms,
conditions, and agreements of the parties relative to the subject matter hereof and
supersedes any and all such former agreements which are hereby declared
terminated and of no further force and effect upon the execution and delivery
hereof. There are no terms, conditions, or agreements with respect thereto, except
as herein provided and no amendment or modification of this Agreement shall be
effective unless reduced to writing and executed by the parties.
25. Notices. Unless stated otherwise herein, all notices and demands shall be in
writing and sent to the parties to their addresses as follows:
TO CITY:
City of Yakima
Office of Neighborhood Development Services
Attn: Archie Mathews
City Hall—Second Floor
129 North Second Street
Yakima, WA 98901
TO UNITED BUILDERS OF WASHINGTON:
United Builders of Washington, Inc.
P.O. Box 9488
Yakima, Washington 98907
Attn: J. Patrick Strosahl
TO J. PATRICK STROSAHL:
P.O. Box 9488
Yakima, Washington 98907
TO STEPHEN R. STROSAHL:
P.O. Box 9488
Yakima, Washington 98907
or to such other addresses as the parties may hereafter designate in writing.
Notices and/or demands shall be sent by registered or certified mail, postage
prepaid, or hand delivered. Such notices shall be deemed effective when mailed or
hand delivered at the addresses specified above.
26. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington.
27. Venue. The venue for any action to enforce or interpret this Agreement shall lie
in the Superior Court of Washington for Yakima County, Washington.
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28. Authority. The person executing this Agreement on behalf of United Builders
of Washington represents and warrants that he or she has been fully authorized by
United Builders of Washington to execute this Agreement on its behalf and to
legally bind United Builders of Washington to all the terms, performances and
provisions of this Agreement. The person executing this Agreement on behalf of the
City represents and warrants that he or she has been fully authorized by the City to
execute this Agreement on its behalf and to legally bind the City to all the terms,
performances and provisions of this Agreement.
EXECUTED by the City of Yakima EXECUTED by United Builders of
Washin, Inc.
this A) "qday of f4ri 1 , 2009. this 72 day of
2009.
CITY OF YAKIMA
R. A. Zais, Jr., City Manager
J. (�atrick trosahl
Date: y
ATTEST:
, 2009
UNITED BUILDERS OF
WASHINGTON, INC.
By:
w
Title: 02)
Stephen ' . Strosahl
Date: 19-rt--
Deborah
Z'Z
Deborah Moore, City Clerk
City Contract No. 2o09-'8
Resolution No. R -AO
X:\CITY OF YAKIMA-20009\ONDS - United Builders COBG Loan-2009081\Loan Documents\Loan Agt (041409).DOC
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, 2009
Exhibit A
SUBJECT PROPERTY: The term "Subject Property" means and refers to the property located at 101 N.
Naches Avenue, Yakima, WA 98902, commonly referred to as "The Seasons Building," "Seasons
Performance Hall" and Yakima County Parcel No. 191319-21482, which is legally described as follows:
Lots 15 and 16 Block, 109, Town of North Yakima, now Yakima, recorded in
Volume "A" of Plats, page 10, re-recorded in Volume "E" of Plats, page 1,
records of Yakima County, Washington
Situated in Yakima County, Washington.
PROMISSORY NOTE
$200,000.00 April 11, 2009
Yakima, Washington
1. Promise to Pay. UNITED BUILDERS OF WASHINGTON, INC., a Washington
corporation (referred to as "Maker" herein), hereby promises to pay to the order of THE CITY
OF YAKIMA OFFICE OF NEIGHBORHOOD DEVELOPMENT SERVICES, ("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 TWO HUNDRED THOUSAND
($200,000.00), with interest on the principal from the date of each advance, on the terms and
conditions set forth herein.
The loan funds shall be delivered to Maker upon execution of loan documents and
adherence to terms and conditions.
2. Interest Rate. The rate of interest assessed from the date hereof upon the unpaid
principal balance and any fees, expenses and charges chargeable under the terms of this Note
shall be equal to four percent (4.0%) per annum.
3. Payment. Maker shall make full and final payment of all unpaid principal, interest,
and any accrued fees, costs and charges to Holder on the second annual anniversary date of the
Note Date stated above.
4. Prepayment. Maker shall have the right to prepay this Note in full or in part at any
time without the prior approval of Holder.
5. 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.
6. Acceleration; Cross -Default; Default Interest Rate. This Note shall be in default if
payment of any installment is not made when due or a default occur under any 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 such default, the whole sum of principal and accrued interest hereunder shall, at
the option of the Holder, become immediately due and payable, anything herein or any
instrument securing this Note to the contrary notwithstanding, time being of the essence. As
long as this Note is in default, then, at the option of the Holder, AFTER notice, this Note shall
bear interest at a rate which is three and one-half (3.5) percentage points per annum above
the Interest Rate.
7. 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 five
percent (5.0%) of the payment due 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
Promissory Note
Page -1-
plus the applicable fees and charges, plus any attorneys' fees incurred by the Holder by reason
of such default.
8. 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.
9. 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.
10. Security of Note. To secure full payment and performance of Maker hereunder, Maker
has granted a first lien against Maker's real property commonly known as 101 North Naches
Avenue in Yakima, Washington and Yakima County Tax Parcel Number 191319-21482.
11. 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 under the other documents executed in
connection with the loan evidenced hereby.
12. 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.
13. Business Purpose. The undersigned warrants and represents that all funds advanced
under this Note shall be applied and are intended substantially for business or commercial
purposes.
14. 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:
United Builders of Washington, Inc.
c/o J. Patrick Strosahl
P.O. Box 9488
Yakima, Washington 98907
Promissory Note
Page -2-
City of Yakima, Office of
Neighborhood Development Services
c/o Archie Mathews
City Hall—Second Floor
129 North Second Street
Yakima, WA 98901
United Builders of Washington, Inc.
By:
Title
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.
X.\CITY OF YAKIMA•20009\ONDS - United Builders COBG Loan-2009081\Loan Documents\Promissory Note - Business.doc
Promissory Note
Page -3-
UNCONDITIONAL GUARANTY
PARTIES: City: The City of Yakima, a Washington municipal corporation
through the Office of Neighborhood Development Services.
Obligor: United Builders of Washington, a Washington
corporation.
Guarantor: J. Patrick Strosahl, a married person.
RECITALS: Concurrent with this Guaranty, City and Obligor have entered
into a Loan Agreement ("Agreement") and Promissory Note.
Pursuant to the terms of the Agreement, Obligor is accepting a
loan in the amount of Two Hundred Thousand Dollars
($200,000.00) from the City. The undersigned has agreed to
enter into this Unconditional Guaranty of all Obligor's
obligations under the Agreement.
AGREEMENT:
As an inducement and in consideration of any and all contemporaneous or future
financial accommodations by City to Obligor, the undersigned Guarantor
unconditionally guarantees the prompt payment when due and at all times thereafter
of the Loan, including any and all existing, contemporaneously incurred and future
indebtedness and liability of every kind arising therefrom (including all extensions,
renewals, and modifications thereof), absolute or contingent, however created or
evidenced, owing from Obligor to City plus such interest as may accrue thereon. City
may grant credit to Obligor from time to time without further authorization of or notice
to Guarantor.
Guarantor agrees to pay City all expenses of every kind including, without limitation,
any and all fees and expenses incurred by it on account of the services of any attorney
employed or retained by it, including in-house counsel, in protecting or defending City's
interest and in attempting to collect all or any part of such indebtedness and in
enforcing this guaranty, with or without suit. Every immediate and successive
assignee of any part of such indebtedness guaranteed hereby shall have the right to
enforce all agreements and obligations contained in this guaranty for its own benefit as
fully as if named herein, but City shall nevertheless have the right to enforce this
Guaranty Page 1
guaranty for its own benefit as to so much of the liability guaranteed as has not been
assigned.
Guarantor waives notice of (a) the acceptance of this guaranty; (b) any and all
indebtedness of any kind covered by the guaranty; and (c) any and all demands,
nonpayments or other defaults in respect of such indebtedness.
If more than one person or legal entity signs this Unconditional Guaranty, all
references to "Guarantor" herein shall bind each of the undersigned jointly and
severally.
The liability of Guarantor under this guaranty shall be continuing and shall remain in
full force and effect as long as Obligor is or may be indebted to City on account of any
indebtedness covered by the guaranty. It shall not be affected in any way by (and the
City is hereby expressly authorized to make without notice to anyone) any sale, pledge,
surrender, compromise, release, acceleration, discharge, renewal, extension,
substitution, exchange, or modification of any kind whatsoever of all or any part of the
indebtedness covered by the guaranty, or of all or any part of the security or collateral
given to secure such indebtedness, including the release or addition of other
guarantors. In addition, such liability of Guarantor shall not be affected in any way by
the failure or invalidity of or any defect in any security or collateral given to secure
such indebtedness. No exercise or non -exercise, waiver, change, impairment, or
suspension by City of any right or remedy given it by this Unconditional Guaranty or
by Obligor and no dealings by City with Obligor or any other person shall in any way
affect any of the obligations of Guarantor hereunder or any security furnished by
Guarantor, now or hereafter, or give Guarantor any recourse against City. The
obligations of Guarantor to City hereunder are independent of Obligor's obligations
and a separate action or actions may be brought and prosecuted by City against
Guarantor, whether or not such action or actions are also brought against Obligor,
other guarantors or any security granted to City.
Guarantor waives and agrees not to assert or otherwise take advantage of (a) any right
which it may have to require City to proceed against Obligor or any other person, firm
or corporation or to proceed against or exhaust any security held by it at any time or to
pursue any other remedy in its power; (b) any defense which it may have in the nature
of statute of limitations in any action hereunder or for the collection of any
indebtedness or the performance of any obligation guaranteed hereby; (c) any defense
which it may have by reason of incapacity, lack of authority, or lack of shareholder or
other approvals relating either to Obligor or Guarantor or the failure of City to file or
enforce a claim against the estate (either in administration, bankruptcy, or other
proceeding) of Obligor or of any other or others; (d) any lack of demand, protest and
notice of any kind including, without limitation, notice of the existence, creation or
incurring of new or additional indebtedness or of any action or non -action on the part of
Guaranty Page 2
Obligor, City, any endorser, creditor of Obligor or Guarantor under this or any other
agreement, or any person whomsoever, in connection with any obligation or evidence of
indebtedness held by City as collateral or in connection with any indebtedness
guaranteed hereby; (e) any defense which is may have based upon an election of
remedies by City; and (f) any duty which City may have to disclose to Guarantor any
facts which it may now or hereafter know about Obligor, it being understood and
agreed that Guarantor is fully responsible for being and keeping informed of the
financial condition of Obligor and of all circumstances bearing on the risk of non-
payment of any indebtedness guaranteed hereby.
Until all indebtedness of Obligor to City is paid in full, Guarantor shall have no right
of subrogation and waives any right which it may otherwise have to enforce any
remedy whatsoever which City may have against Obligor and any benefit of or right to
participate in realization or any security now or hereafter granted to City.
With or without notice to Guarantor, City may, in its sole discretion and at any time
and from time to time and in such manner and upon such terms as it considers fit,
apply any or all payments or recoveries from Obligor, Guarantor, any other guarantor
or source, or from any security granted to City, under this or any other agreement, in
such manner and order or priority as City may determine, to any indebtedness of
Obligor to City, whether or not such indebtedness is guaranteed hereby or is otherwise
secured or is due at the time of such application.
For consideration as recited above, Guarantor subordinates any and all indebtedness of
Obligor to Guarantor to any and all indebtedness of Obligor to City. If City so
requests, any such indebtedness of Obligor to Guarantor shall be collected and received
by Guarantor as trustee for City and paid to City on account of Obligor's indebtedness
to it, without reducing or affecting Guarantor's liability under any of the provisions of
this guaranty.
This guaranty is in addition to and independent of any other guaranties at any time in
effect with respect to all or any part of Obligor's indebtedness to City and may be
enforced regardless of the existence of any such other guaranties which shall continue
to remain in full force and effect.
No provision of this guaranty or any right or remedy of City hereunder can be waived,
nor can Guarantor be released from its obligations hereunder except in writing duly
executed by an authorized officer of City. Should any one or more provisions of this
guaranty be determined to be illegal or unenforceable, all other provisions shall
nevertheless be effective.
This guaranty shall be construed and performed according to the laws of the State of
Washington. Guarantor irrevocably submits to the jurisdiction of any state or federal
Guaranty Page .3
court sitting in Yakima County, Washington, in any action or proceeding brought to
enforce or otherwise arising out of or relating to this guaranty and irrevocably waives
to the fullest extent permitted by law any objection which it may have now or hereafter
to venue or any claim that such forum is an inconvenient forum.
EXECUTED this 22 day of , 2009.
Patrick Strosahl
CONSENT OF SPOUSE
The undersigned, being the spouse of the J. PATRICK STROSAHL, and hereby
acknowledges and consents to the personal guaranty set forth above as to any
community property interest in which J. PATRICK STROSAHL and I now have or
acquire in the future.
Dated this _2Zday of , 2009.
X:\CITY OF YAKIMA-20009\ONDS - United Builders COBG Loan-2009081\Loan Documents\Guaranty - Pat Strosahl (040909).doc
Guaranty Page 4
UNCONDITIONAL GUARANTY
PARTIES: City: The City of Yakima, a Washington municipal corporation
through the Office of Neighborhood Development Services.
Obligor: United Builders of Washington, a Washington
corporation.
Guarantor: Stephen R. Strosahl, a married person.
RECITALS: Concurrent with this Guaranty, City and Obligor have entered
into a Loan Agreement ("Agreement") and Promissory Note.
Pursuant to the terms of the Agreement, Obligor is accepting a
loan in the amount of Two Hundred Thousand Dollars
($200,000.00) from the City. The undersigned has agreed to
enter into this Unconditional Guaranty of all Obligor's
obligations under the Agreement.
AGREEMENT:
As an inducement and in consideration of any and all contemporaneous or future
financial accommodations by City to Obligor, the undersigned Guarantor
unconditionally guarantees the prompt payment when due and at all times thereafter
of the Loan, including any and all existing, contemporaneously incurred and future
indebtedness and liability of every kind arising therefrom (including all extensions,
renewals, and modifications thereof), absolute or contingent, however created or
evidenced, owing from Obligor to City plus such interest as may accrue thereon. City
may grant credit to Obligor from time to time without further authorization of or notice
to Guarantor.
Guarantor agrees to pay City all expenses of every kind including, without limitation,
any and all fees and expenses incurred by it on account of the services of any attorney
employed or retained by it, including in-house counsel, in protecting or defending City's
interest and in attempting to collect all or any part of such indebtedness and in
enforcing this guaranty, with or without suit. Every immediate and successive
assignee of any part of such indebtedness guaranteed hereby shall have the right to
enforce all agreements and obligations contained in this guaranty for its own benefit as
fully as if named herein, but City shall nevertheless have the right to enforce this
Guaranty Page 1
guaranty for its own benefit as to so much of the liability guaranteed as has not been
assigned.
Guarantor waives notice of (a) the acceptance of this guaranty; (b) any and all
indebtedness of any kind covered by the guaranty; and (c) any and all demands,
nonpayments or other defaults in respect of such indebtedness.
If more than one person or legal entity signs this Unconditional Guaranty, all
references to "Guarantor" herein shall bind each of the undersigned jointly and
severally.
The liability of Guarantor under this guaranty shall be continuing and shall remain in
full force and effect as long as Obligor is or may be indebted to City on account of any
indebtedness covered by the guaranty. It shall not be affected in any way by (and the
City is hereby expressly authorized to make without notice to anyone) any sale, pledge,
surrender, compromise, release, acceleration, discharge, renewal, extension,
substitution, exchange, or modification of any kind whatsoever of all or any part of the
indebtedness covered by the guaranty, or of all or any part of the security or collateral
given to secure such indebtedness, including the release or addition of other
guarantors. In addition, such liability of Guarantor shall not be affected in any way by
the failure or invalidity of or any defect in any security or collateral given to secure
such indebtedness. No exercise or non -exercise, waiver, change, impairment, or
suspension by City of any right or remedy given it by this Unconditional Guaranty or
by Obligor and no dealings by City with Obligor or any other person shall in any way
affect any of the obligations of Guarantor hereunder or any security furnished by
Guarantor, now or hereafter, or give Guarantor any recourse against City. The
obligations of Guarantor to City hereunder are independent of Obligor's obligations
and a separate action or actions may be brought and prosecuted by City against
Guarantor, whether or not such action or actions are also brought against Obligor,
other guarantors or any security granted to City.
Guarantor waives and agrees not to assert or otherwise take advantage of (a) any right
which it may have to require City to proceed against Obligor or any other person, firm
or corporation or to proceed against or exhaust any security held by it at any time or to
pursue any other remedy in its power; (b) any defense which it may have in the nature
of statute of limitations in any action hereunder or for the collection of any
indebtedness or the performance of any obligation guaranteed hereby; (c) any defense
which it may have by reason of incapacity, lack of authority, or lack of shareholder or
other approvals relating either to Obligor or Guarantor or the failure of City to file or
enforce a claim against the estate (either in administration, bankruptcy, or other
proceeding) of Obligor or of any other or others; (d) any lack of demand, protest and
notice of any kind including, without limitation, notice of the existence, creation or
incurring of new or additional indebtedness or of any action or non -action on the part of
Guaranty Page 2
Obligor, City, any endorser, creditor of Obligor or Guarantor under this or any other
agreement, or any person whomsoever, in connection with any obligation or evidence of
indebtedness held by City as collateral or in connection with any indebtedness
guaranteed hereby; (e) any defense which is may have based upon an election of
remedies by City; and (f) any duty which City may have to disclose to Guarantor any
facts which it may now or hereafter know about Obligor, it being understood and
agreed that Guarantor is fully responsible for being and keeping informed of the
financial condition of Obligor and of all circumstances bearing on the risk of non-
payment of any indebtedness guaranteed hereby.
Until all indebtedness of Obligor to City is paid in full, Guarantor shall have no right
of subrogation and waives any right which it may otherwise have to enforce any
remedy whatsoever which City may have against Obligor and any benefit of or right to
participate in realization or any security now or hereafter granted to City.
With or without notice to Guarantor, City may, in its sole discretion and at any time
and from time to time and in such manner and upon such terms as it considers fit,
apply any or all payments or recoveries from Obligor, Guarantor, any other guarantor
or source, or from any security granted to City, under this or any other agreement, in
such manner and order or priority as City may determine, to any indebtedness of
Obligor to City, whether or not such indebtedness is guaranteed hereby or is otherwise
secured or is due at the time of such application.
For consideration as recited above, Guarantor subordinates any and all indebtedness of
Obligor to Guarantor to any and all indebtedness of Obligor to City. If City so
requests, any such indebtedness of Obligor to Guarantor shall be collected and received
by Guarantor as trustee for City and paid to City on account of Obligor's indebtedness
to it, without reducing or affecting Guarantor's liability under any of the provisions of
this guaranty.
This guaranty is in addition to and independent of any other guaranties at any time in
effect with respect to all or any part of Obligor's indebtedness to City and may be
enforced regardless of the existence of any such other guaranties which shall continue
to remain in full force and effect.
No provision of this guaranty or any right or remedy of City hereunder can be waived,
nor can Guarantor be released from its obligations hereunder except in writing duly
executed by an authorized officer of City. Should any one or more provisions of this
guaranty be determined to be illegal or unenforceable, all other provisions shall
nevertheless be effective.
This guaranty shall be construed and performed according to the laws of the State of
Washington. Guarantor irrevocably submits to the jurisdiction of any state or federal
Guaranty Page 3
court sitting in Yakima County, Washington, in any action or proceeding brought to
enforce or otherwise arising out of or relating to this guaranty and irrevocably waives
to the fullest extent permitted by law any objection which it may have now or hereafter
to venue or any claim that such forum is an inconvenient forum.
EXECUTED this' day of , 2009.
Liyek
Stephen R. Strosahl
CONSENT OF SPOUSE
The undersigned, being the spouse of the STEPHEN R. STROSAHL, and hereby
acknowledges and consents to the personal guaranty set forth above as to any
community property interest in which STEPHEN R. STROSAHL and I now have or
acquire in the future.
Dated this 96 day of (A)4 , 2009.
a4
GEANETTE L. STROSAHL
X.\CITY OF YAKIMA-20009\ONDS - United Builders COBG Loan-2009081\Loan Documents\Guaranty - Steve Strosahl (040909).doc
Guaranty Page 4
UNITED
BiUI_LDERS
SiNrh I 9 4 9
Dear Dick:
To: Dick Zais, City Manager
City of Yakima
129 N. 2"d Street
Yakima, WA 98901
April 2, 2009
RECEIVED
APR 0 2 2009
CITY OF YAKIMA
COMMUNITY DEVELOPMENT
Pursuant to our recent conversations, this letter confirms a request from United Builders of
Washington, Inc., for a short-term loan of $200,000.00 from the City of Yakima. The need for
this loan is to provide working capital for our company to continue operations. If approved,
this financing will allow United Builders of Washington to free up resources within the
company to ensure continued operation and code compliance at The Seasons Performance
Hall. Our request is for a bridge loan to be repaid in twenty-four months or less.
As you are aware, the Seasons is a facility owned by United Builders but donated to a non-
profit organization that programs events and concerts at the hall, and has been recognized as a
key component in the downtown Yakima recovery & renaissance.
We have actively solicited lender resources for the last nine months, but because credit markets
have been frozen and are particularly inaccessible for residential home construction businesses,
we have been unable to secure the capital needed to continue our home building construction
and to complete needed improvements to the Seasons facility. Over the last nine months we
have approached several lenders without success in spite of a $1.6M appraisal of the building
and no underlying debt.
With this request, United Builders of Washington acknowledges the City of Yakima's
underwriting requirements of: 1) personal guarantees from all owners of our company to repay
the City's loan; 2) collateral security provided through a first lien position in favor of the City
of Yakima on The Seasons Performance Hall property; and 3) other requirements, if any.
I assure you, Dick, that our need is real and our commitment to repay the City's loan within
twenty-four months or less is sincere. We have not, nor will we, diminish our efforts to secure
permanent financing to repay the City's loan at the earliest opportunity.
Sincere
atrick Strosahl, CEO
nited Builders of Washington
Cc: Michael Morales, City of Yakima
2112 Nob Hill Blvd • P 0 Box 9488 • Yakima, WA 98902 • Ph 509-248-6321 • Fax 509-575-6527
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
THE SECRETARY — —_
WASHINGTON, DC 20410-0001 F' ; • '?
C tJ. Y y _
March 6, 2009
The Honorable David Edler
Mayor of Yakima
129 North Second Street
Yakima, WA 98901
Dear Mayor Edler:
tt; / EY`
1
OFFiCE
21.2109
I am pleased to inform you that the U.S'. Department of Housing and Urban Development
has allocated $10.1 billion, made available through the American Recovery and Reinvestment
Act of 2009 (Recovery Act) (Public Law 111-5) signed into law by President Obama on
February 17, 2009.
This letter provides the allocations from the Recovery Act for the following programs
administered by the Department: Community Development Block Grants; Public Housing
Capital Fund; Lead Hazard Reduction; Section 8 Project -Based Rental Assistance; Homelessness
Prevention Fund; and Tax Credit Assistance. These programs provide funding for housing,
community and economic development, and assistance for low- and moderate -income persons
and special populations across the country.
Table 1 reflects the level of funding directly available for those programs in your
community. Table 2 identifies funding available through other partners in your community, and
finally, Table 3 identifies the allocation provided to your state for which you may apply:
Table 1— Grants awarded directly to your community
Recovery Act of 2009 Program
Grant Amount
Community Development Block Grant
$317,515
Homelessness Prevention Fund
$0
Lead Hazard Reduction
$0
www.hud.gov espanol.hud.gov
As with all HUD Recovery Act programs, your community has HUD's commitment to be
as flexible as possible to help communities such as yours address local needs in the most
effective manner.
I look forward to establishing a partnership to help strengthen your community for years
to come. HUD is always available to help you implement your programs effectively. If you or
your staff have any questions, please contact your local HUD Field Office.
Sincerely,
Shaun Donovan
3
e.
Return Address:
Donald A. Boyd
Carlson, Boyd & Bailey, PLLC
230 South 2nd Street, Suite 202
Yakima, WA 98901
11q 111ill biliHMI i IIiiiii
DEED OF TRUST -13)FV
Grantor(s):
1. UNITED BUILDERS OF WASHINGTON, INC.
FILE# 7650327
YAKIMA COUNTY, WA
04/24/2009 12:54:18PN
DEED OF TRUST
PAGES: 6
FIDELITY TITLE COMPANY
Recording Fee: 48.00
Grantee(s):
1. THE CITY OF YAKIMA OFFICE OF NEIGHBORHOOD DEVELOPMENT
SERVICES
Legal Description:
1. LOTS 15 and16, BLK 109, TOWN OF NORTH YAKIMA, now
Yakima.
Assessor's Property Tax Parcel Number(s): 191319-21482
DEED OF TRUST
(For Use in the State of Washington Only)
THIS DEED OF TRUST, made this 22ire0day of April, 2009, between UNITED
BUILDERS OF WASHINGTON, INC., a Washington corporation, GRANTOR, whose
address is P.O. Box 9488, Yakima, Washington 98907; FIDELITY TITLE COMPANY,
a Washington Corporation, TRUSTEE, whose address is 117 North 4th Street, Yakima,
Washington 98901; and THE CITY OF YAKIMA OFFICE OF NEIGHBORHOOD
DEVELOPMENT SERVICES, BENEFICIARY, whose address is City Hall—Second
Floor, 129 North Second Street, Yakima, WA 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:
Lots 15 and 16, Block 109, TOWN OF NORTH YAKIMA, now
Yakima.
1
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
1 profits thereof.
This deed is for the purpose of securing performance of each agreement between
GRANTOR and BENEFICIARY, and to secure all obligations and indebtedness owed
by Grantor to the Beneficiary either owing as of the date of this Deed of Trust or owed
at any time prior to the reconveyance of this Deed of Trust, including, but not limited
j to any and all obligations of Grantor arising from or evidenced by in accordance with
the terms of a Promissory Note in the original principal balance of Two Hundred
Thousand Dollars of even date herewith, payable to BENEFICIARY or order, and made
by GRANTORS, and all renewals, modifications and extensions thereof, and also such
further sums as may be advanced or loaned by BENEFICIARY to GRANTORS, 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 fee 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 erectedon 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 indebted-
ness 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. If all or any part of the property securing this Deed of Trust and the
Promissory Note above referred to, or any interest therein is sold, transferred, leased
or any other interest therein is created by GRANTORS without BENEFICIARY'S prior
written consent, BENEFICIARY may, at their sole, unrestricted option, declare all
2
sums due hereunder and secured hereby immediately due and payable. Consent once
given by BENEFICIARY shall not be deemed a waiver to any future consent. The
parties recognize that strict enforcement of this provision is necessary for the protec-
tion of the BENEFICIARY.
5. GRANTORS shall not dispose of or otherwise allow the release of any
hazardous substance, waste or materials in, on or under the premises, or any adjacent
property, or in any improvements placed on the premises, and GRANTORS represent
and warrant that GRANTORS' intended use of the premises does not involve the use,
production, disposal or bringing onto the premises of any hazardous substance, waste
or materials. As used herein, the term "hazardous substance, waste or materials"
includes any substance, waste or material defined or designated as hazardous, toxic or
dangerous (or any similar such term) by any federal, state or local statute, regulation,
rule or ordinance now or hereafter in effect, including, but not limited to, Federal
Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA") and the Washington Model Toxics Control Act, RCW Chapter 70.105D.
GRANTORS shall promptly comply with all statutes, regulations and ordinances, and
with all orders, decrees or judgments of governmental authorities or courts having
jurisdiction, relating to the use, collection, treatment, disposal, storage, control,
removal or clean up of hazardous substances, waste or materials in, on or under the
premises, or any adjacent property, or any improvements thereon, at GRANTORS' sole
expense. GRANTORS agree to indemnify, defend and hold harmless BENEFICIARY
and TRUSTEE against any and all losses, liabilities, suits, obligations, fines, damages,
judgments, penalties, claims, charges, clean up costs, remedial action, costs and
expenses (including, without limitation, attorney fees and disbursements) which may
be imposed on, incurred or paid by, or asserted against BENEFICIARY and/or
TRUSTEE in connection with all of those matters referred to or related to the
provisions, representations and/or warranties of this provision.
6. GRANTORS must obtain and shall have the pre -approval and consent of
BENEFICIARY at the time of any development and/or usage plan, improvements,
tenancies, and/or financing arrangements for any improvements to the above-described
premises.
7. 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 proceedings, and in any suit brought by Beneficiary to foreclose this Deed of
Trust.
8. 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.
3
9. 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.
10. To not engage in any illegal activity and to not allow any illegal activity to
occur on the subject property.
IT IS MUTUALLY AGREED THAT:
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 sumsecured 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.
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 Grantor 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 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 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; (3) the surplus, if any, shall be deposited with the Clerk
of the Superior Court of the County in which the sale took place, to be distributed in
accordance with the provisions of RCW 61.24.080.
5. Trustee shall deliver to the purchaser. at the sale its deed, without
warranty, which shall reconvey 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 purchaser and
encumbrances for value.
4
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 any action or proceeding in which Grantor, 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.
STATE OF WASHINGTON
) ss:
County of Yakima
United Builders of Washington, Inc.
0c-wC\
On this day personally appeared before meAc03_ c y `Thkif-0x\ , to me known
to be the `T` moo,1\1&.,5 of United Builders of Washington, Inc., who executed
the within and foregoing instrument, and acknowledged that he signed the same in his
official capacity as authorized corporate officer and as the free and voluntary act and
deed of said corporation, for the uses and purposes therein mentioned.
GIVEN u
hand and official seal this d.ay of April, 2009.
X.\CITY OF YAKIMA-2
G us--
NOTARY PUBLIC in and for the
State of Washington
Residing at
My Commission Expires:
s COBG Loan-2009081\Loan Documents\deed of trust.doc
5
Lots 15 and 16, Block 109, TOWN OF NORTH YAKIMA, now Yakima,
recorded in Volume "A" of Plats, Page 10, re-recorded in Volume
"E" of Plats, Page 1, records of Yakima County, Washington.
Situated in Yakima County, State of Washington.
ADDRESS:
230 S. 2N0 STREET
YAKIMA, WASHINGTON
98901
TELEPHONE:
509-834-6611
FACSIMILE:
509-834-6610
WEB SITE:
www.cbblawfirm.com
i•�, sig A a?.;t+ '�,'';t 4"9.s".:.t .,-' a x.:ar. j . y���..
September 9, 2009
Mr. Michael Morales
City of Yakima Office of
Community and Economic Development
129 North 2nd Street
Yakima, Washington 98901
Re: ONDS — United Builders Loan.
Dear Michael:
•
Via First Class Mail
RECEIVE®
SEP 10 2009
CITY OF YAKIMA
COMMUNITY DEVELOPMENT
DONALD A. BOYD
E -Mail: dbovd@chhlawdinn.com
I enclose the Loan Policy of Title Insurance received from Fidelity Title
Company showing that the City of Yakima ONDS loan is the only
encumbrance against The Seasons' property. Please retain this document
with your original loan documents on this matter. Please call me if you have
any questions.
Very truly yours,
‘C
Donald A. Boyd
Encl.
X.\CITY OF YAKIMA-20009\ONDS - United Builders COBG Loan -2009081\ Correspondence\Morales 090909 (ltr w Title Pohcy).doc
Chicago Title Insurance Company
POLICY NO.. WA2001-46-73980-2009.72307-78490709
LOAN POLICY OF TITLE INSURANCE
Issued by
Chicago Title Insurance Company
Any notice of claim and any other notice or statement in writing required to be given to the Company ,under this Policy must be given to the Company at the
address shown in Section 17 of the Conditions.
COVERED RISKS
SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B, AND THE CONDITIONS,
CHICAGO TITLE INSURANCE COMPANY, a Nebraska corporation (the "Company') insures as of Date of Policy and, to the extent stated in Covered Risks 1I, 13,
and 14, after Date of Policy, against loss or damage, not exceeding the Amount of Insurance, sustained or incurred by the Insured by reason of
I Title being vested other than as stated in Schedule A
2. Any defect in or lien or encumbrance on the Title. This Covered Risk includes but is not limited to insurance against loss from
(a) A defect in the Title caused by
(i) forgery, fraud, undue influence, duress, incompetency, incapacity, or impersonation,
(ii) failure of any person or Entity to have authorized a transfer or conveyance;
(iii) a document affecting Title not properly created, executed, witnessed, sealed, acknowledged, notarized, or delivered;
(iv) failure to perform those acts necessary to create a document by electronic means authorized by law;
(v) d document executed under a falsified, expired, or otherwise invalid power of attorney;
(vi) a document not properly filed, recorded, or indexed in the Public Records includingfailure to perform those acts by electronic means authorized
by law, or
(vii) a defective judicial or administrative proceeding.
(b) The lien of real estate taxes or assessments imposed on the Title by a governmental authority due or payable, but unpaid.
(c) Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the :Title that would be disclosed by an accurate and complete
land survey of the Land. The term "encroachment" includes encroachments of existing improvements located on the Land onto adjoining land, and
encroachments onto the Land of existing improvements located on adjoining land.
3. Unmarketable Title.
4. No right of access to and from the Land.
5 The violation or enforcement of any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting,
regulating, prohibiting, or relating to
(a) the occupancy, use, or enjoyment of the Land,
(b) the character, dimensions, or location of any improvement erected on the Land,
(c) the subdivision of land; or
(d) environmental protection
if a notice, describing any part of the Land, is recorded in the Public Records setting forth the violation or intention to enforce, but only to the extent of the
violation or enforcement referred to in that notice.
6. An enforcement action based on the exercise ofa governmental police power not covered by Covered Risk 5 if a notice of the enforcement action, describing
any part of the Land, is recorded in the Public Records, but only to the extent of the enforcement referred to in that notice.
7 The exercise of the rights of eminent domain if a notice of the exercise, describing any part of the Land, is recorded in the Public Records.
8. Any taking by a governmental body that has occurred and is binding on the rights ofa purchaser for value without Knowledge.
9 The invalidity or unenforceability of the lien of the Insured Mortgage upon the Title. This Covered Risk includes but is not limited to insurance against loss
from any of the following impairing the lien of the Insured Mortgage
(a) forgery, fraud, undue influence, duress, incompetency, incapacity, or impersonation,
(b) failure of any person or Entity to have authorized a transfer or conveyance;
(c) the Insured Mortgage not being properly created, executed, witnessed, sealed, acknowledged, notarized, or delivered,
(d) failure to perform those acts necessary to create a document by electronic means authorized by law,
(e) a document executed under a falsified, expired, or otherwise invalid power of attorney;
(9 a document not properly filed, recorded, or indexed in the Public Records includingfailure to perform those acts by electronic means authorized by
law, or
(g) a defective judicial or administrative proceeding.
10. The lack of priority of the lien of the Insured Mortgage upon the Title over any other lien or encumbrance.
11 The lack of priority of the lien of the Insured Mortgage upon the Title
(a) as security for each and every advance of proceeds of the loan secured by the Insured Mortgage over any statutory lien for services, labor, or material
arising from construction of an improvement or work related to the Land when the improvement or work is either
(1) contracted for or commenced on or before Date of Policy; or
(ii) contracted for, commenced or continued after Date of Policy if the construction is financed, in whole or in part, by proceeds of the loan secured
• by the Insured Mortgage that the Insured has advanced or is obligated on Date of Policy to advance; and
(b) over the lien of any assessments for street improvements under construction or completed at Date of Policy.
12. The' invalidity or unenforceability of any assignment of the Insured Mortgage, provided the assignment is shown in Schedule A, or the failure of the
assignment shown in Schedule A to vest title to the Insured Mortgage in the named Insured assignee free and clear of all liens.
13. The invalidity, unenforceabilty, lack of priority, or avoidance of the lien of the Insured Mortgage upon the Title
72307 (6/06)
ALTA Loan Policy (6/17/06)
(a) resulting from the avoidance in whole or in part, or from a court order providing an alternative remedy, of any transfer of all or any part of the title to
or any interest in the Land occurring prior to the transaction creating the lien of the Insured Mortgage because that prior transfer constituted a
fraudulent or preferential transfer under federal bankruptcy, state insolvency, or similar creditors' rights laws, or
(b) because the Insured Mortgage constitutes a preferential transfer under federal bankruptcy, state insolvency, or similar creditors' rights laws by reason
of the failure of its recording in the Public Records
(i) to be timely, or
(ii) to impart notice of its existence to a purchaser for value or to a judgment or lien creditor.
14 Any defect in or lien or encumbrance on the Title or other matter included in Covered Risks 1 through 13 that has been created or attached or has been filed
or recorded in the Public Records subsequent to Date of Policy and prior to the recording of the Insured Mortgage in the Public Records.
The Company will also pay the costs, attorneys' fees, and expenses incurred in defense of any matter insured against by this Policy, but only to the extent provided in
the Conditions.
IN WITNESS WHEREOF, CHICAGO TITLE INSURANCE COMPANY has caused this policy to be signed and sealed by its duly authorized officers.
Countersigned:
WA2001 73980
Fidelity Title Company
117 North 4th Street
Yakima , WA 98901
Tel:(509) 248-6210
Fax:(509) 248-2048
72307 (6/06)
thonzed Signatory
Karen Allen
CHICAGO TITLR..INSURANCE 'COMPANY
ih.
ALTA Loan Policy (6/17/06)
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or
expenses that arise by reason of:
I. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or
relating to
(i) the occupancy, use, or enjoyment of the Land;
(ii) the character, dimensions, or location of any improvement erected on the Land;
(iii) the subdivision of land; or
(iv) environmental protection,
or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage
provided under Covered Risk 5.
(b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6.
2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8.
3. Defects, liens, encumbrances, adverse claims, or other matters
(a) created, suffered, assumed, or agreed to by the Insured Claimant;
(b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in
writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy;
(c) resulting in no loss or damage to the Insured Claimant;
(d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 13, or
14); or
(e) resulting in loss or damage that would not have been sustained if the Insured Claimant had.paid value for the Insured Mortgage.
4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an insured to comply with applicable doing -business laws
of the state where the Land is situated.
5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured
Mortgage and is based upon usury or any consumer credit protection or truth -in -lending law.
6. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of
the Insured Mortgage, is
(a) a fraudulent conveyance or fraudulent transfer, or
(b) a preferential transfer for any reason not stated in Covered Risk 13(b) of this policy.
7 Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the
date of recording of the Insured Mortgage in the Public Records. This exclusion does not modify or limit the coverage provided under Covered Risk
11(b).
CONDITIONS
1. DEFINITION OF TERMS
The following terms when used in this policy mean:
(a) "Amount of Insurance". The amount stated in Schedule A, as may
be increased or decreased by endorsement to this policy, increased by
Section 8(b) or decreased by Section 10 of these Conditions.
(b) "Date of Policy": The date designated as "Date of Policy" in
Schedule A.
(c) "Entity". A corporation, partnership, trust, limited liability
company, or other similar legal entity.
(d) "Indebtedness". The obligation secured by the Insured Mortgage
including one evidenced by electronic means authorized by law, and if
that obligation is the payment of a debt, the Indebtedness is the sum of
(i) the amount of the principal disbursed as of Date of Policy;
(ii) the amount of the principal disbursed subsequent to Date of
Policy;
(iii) the construction loan advances made subsequent to Date of
Policy for the purpose of financing in whole or in part the construction of
an improvement to the Land or related to the Land that the Insured was
and continued to be obligated to advance at Date of Policy and at the date
of the advance;
(iv)interest on the loan;
(v) the prepayment premiums, exit fees, and other similar fees or
penalties allowed by law;
(vi)the expenses of foreclosure and any other costs of
enforcement;
(vii) the amounts advanced to assure compliance with laws or to
protect the lien or the priority of the lien of the Insured Mortgage before
the acquisition of the estate or interest in the Title;
(viii) the amounts to pay taxes and insurance; and
(ix)the reasonable amounts expended to prevent deterioration of
improvements; but the Indebtedness is reduced by the total of all
payments and by any amount forgiven by an Insured.
(e) "Insured": The Insured named in Schedule A.
72307 (6/06)
(i) The term "Insured" also includes
(A)the owner of the Indebtedness and each successor in
ownership of the Indebtedness, whether the owner or successor owns the
Indebtedness for its own account or as a trustee or other fiduciary, except
a successor who is an obligor under the provisions of Section 12(c) of
these Conditions;
(B) the person or Entity who has "control" of the "transferable
record," if the Indebtedness is evidenced by a "transferable record," as
these terms are defined by applicable electronic transactions law;
(C) successors to an Insured by dissolution, merger,
consolidation, distribution, or reorganization;
(D) successors to an Insured by its conversion to another kind
of Entity;
(E) a grantee of an Insured under a deed delivered without
payment of actual valuable consideration conveying the Title
(1) if the stock, shares, memberships, or other equity
interests of the grantee are wholly-owned by the named Insured,
(2) if the grantee wholly owns the named Insured, or
(3) if the grantee is wholly-owned by an affiliated Entity
of the named Insured, provided the affiliated Entity and the named
Insured are both wholly-owned by the same person or Entity;
(F) any government agency or instrumentality that is an
insurer or guarantor under an insurance contract or guaranty insuring or
guaranteeing the Indebtedness secured by the Insured Mortgage, or any
part of it, whether named as an Insured or not;
(ii) With regard to (A), (B), (C), (D), and (E) reserving, however,
all rights and defenses as to any successor that the Company would have
had against any predecessor Insured, unless the successor acquired the
Indebtedness as a purchaser for value without Knowledge of the asserted
defect, lien, encumbrance, or other matter insured against by this policy.
(f) "Insured Claiimant": An Insured claiming loss or damage.
(g) "Insured Mortgage": The Mortgage described in paragraph 4 of
Schedule A.
ALTA Loan Policy (6/17/06)
(h) "Knowledge" or "Known": Actual knowledge, not constructive
'knowledge or notice that may be imputed to an Insured by reason of the
Public Records or any other records that impart constructive notice of
matters affecting the Title.
(i) "Land": The land described in Schedule A, and affixed
improvements that by law constitute real property The term "Land" does
not include any property beyond the lines of the area described in
Schedule A, nor any right, title, interest, estate, or easement in abutting
streets, roads, avenues, alleys, lanes, ways or waterways, but this does not
modify or limit the extent that a right of access to and from the Land is
insured by this policy.
(j) "Mortgage": Mortgage, deed of trust, trust deed, or other security
instrument, including one evidenced by electronic means authorized by
law.
(k) "Public Records". Records established under state statutes at Date
of Policy for the purpose of imparting constructive notice of matters
relating to real property to purchasers for value and without Knowledge.
With respect to Covered Risk 5(d), "Public Records" shall also include
environmental protection liens filed in the records of the clerk of the
United States District Court for the district where the Land is located.
(1) "Title": The estate or interest described in Schedule A.
(m)"Unmarketable Title": Title affected by an alleged or apparent
matter that would permit a prospective purchaser or lessee of the Title or
lender on the Title or a prospective purchaser of the Insured Mortgage to
be released from the obligation to purchase, lease, or lend if there is a
contractual condition requiring the delivery of marketable title.
2. CONTINUATION OF INSURANCE
The coverage of this policy shall continue in force as of Date of
Policy in favor of an Insured after acquisition of the Title by an Insured or
after conveyance by an Insured, but only so long as the Insured retains an
estate or interest in the Land, or holds an obligation secured by a purchase
money Mortgage given by a purchaser from the Insured, or only so long
as the Insured shall have liability by reason of warranties in any transfer
or conveyance of the Title. This policy shall not continue in force in favor
of any purchaser from the Insured of either (i) an estate or interest in the
Land, or (ii) an obligation secured by a purchase money Mortgage given
to the Insured.
3. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT
The Insured shall notify the Company promptly in writing (i) in case
of any litigation as set forth in Section 5(a) of these Conditions, (ii) in
case Knowledge shall come to an Insured of any claim of title or interest
that is adverse to the Title or the lien of the Insured Mortgage, as insured,
and that might cause loss or damage for which the Company may be
liable by virtue of this policy, or (iii) if the Title or the lien of the Insured
Mortgage, as insured, is rejected as Unmarketable Title. If the Company
is prejudiced by the failure of the Insured Claimant to provide prompt
notice, the Company's liability to the Insured Claimant under the policy
shall be reduced to the extent of the prejudice.
4. PROOF OF LOSS
In the event the Company is unable to determine the amount of loss or
damage, the Company may, at its option, require as a condition of
payment that the Insured Claimant furnish a signed proof of loss. The
proof of loss must describe the defect, lien, encumbrance, or other matter
insured against by this policy that constitutes the basis of loss or damage
and shall state, to the extent possible, the basis of calculating the amount
of the loss or damage.
5. DEFENSE AND PROSECUTION OF ACTIONS
(a) Upon written request by the Insured, and subject to the options
contained in Section 7 of these Conditions, the Company, at its own cost
and without unreasonable delay, shall provide for the defense of an
Insured in litigation in which any third party asserts a claim covered by
this policy adverse to the Insured. This obligation is limited to only those
stated causes of action alleging matters insured against by this policy. The
Company shall have the right to select counsel of its choice (subject to the
72307 (6/06)
right of the Insured to object for reasonable cause) to represent the Insured
as to those stated causes of action. It shall not be liable for and will not
pay the fees of any other counsel. The Company will not pay any fees,
costs, or expenses incurred by the Insured in the defense of those causes
of action that allege matters not insured against by this policy.
(b) The Company shall have the right, in addition to the options
contained in Section 7 of these Conditions, at its own cost, to institute and
prosecute any action or proceeding or to do any other act that in its
opinion may be necessary or desirable to establish the Title or the lien of
the Insured Mortgage, as insured, or to prevent or reduce loss or damage
to the Insured. The Company may take any appropriate action under the
terms of this policy, whether or not it shall be liable to the Insured. The
exercise of these rights shall not be an admission of liability or waiver of
any provision of this policy. If the Company exercises its rights under this
subsection, it must do so diligently.
(c) Whenever the Company brings an action or asserts a defense as
required or permitted by this policy, the Company may pursue the
litigation to a final determination by a court of competent jurisdiction, and
it expressly reserves the right, in its sole discretion, to appeal from any
adverse judgment or order.
6. DUTY OF INSURED CLAIMANT'TO COOPERATE
(a) In all cases where this policy permits or requires the Company to
prosecute or provide for the defense of any action or proceeding and any
appeals, the Insured shall secure to the Company the right to so prosecute
or provide defense in the action or proceeding, including the right to use,
at its option, the name of the Insured for this purpose. Whenever
requested by the Company, the Insured, at the Company's expense, shall
give the Company all reasonable aid (i) in securing evidence, obtaining
witnesses, prosecuting or defending the action or proceeding, or effecting
settlement, and (ii) in any other lawful act that in the opinion of the
Company may be necessary or desirable to establish the Title, the lien of
the Insured Mortgage, or any other matter as insured. If the Company is
prejudiced by the failure of the Insured to furnish the required
cooperation, the Company's obligations to the Insured under the policy
shall terminate, including any liability or obligation to defend, prosecute,
or continue any litigation, with regard to the matter or matters requiring
such cooperation.
(b) The Company may reasonably require the Insured Claimant to
submit to examination under oath by any authorized representative of the
Company and to produce for examination, inspection, and copying, at
such reasonable times and places as may be designated by the authorized
representative of the Company, all records, in whatever medium
maintained, including books, ledgers, checks, memoranda,
correspondence, reports, e-mails, disks, tapes, and videos whether bearing
a date before or after Date of Policy, that reasonably pertain to the loss or
damage. Further, if requested by any authorized representative of the
Company, the Insured Claimant shall grant its permission, in writing, for
any authorized representative of the Company to examine, inspect, and
copy all of these records in the custody or control of a third party that
reasonably pertain to the loss or damage. All information designated as
confidential by the Insured Claimant provided to the Company pursuant
to this Section shall not be disclosed to others unless, in the reasonable
judgment of the Company, it is necessary in the administration of the
claim. Failure of the Insured Claimant to submit for examination under
oath, produce any reasonably requested information, or grant permission
to secure reasonably necessary information from third parties as required
in this subsection, unless prohibited by law or governmental regulation,
shall terminate any liability of the Company under this policy as to that
claim.
7, OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS;
TERMINATION OF LIABILITY
In case of a claim under this policy, the Company shall have the
following additional options:
(a) To Pay or Tender Payment of the Amount of Insurance or to
Purchase the Indebtedness.
ALTA Loan Policy (6/17/06)
(i) To pay or tender payment of the Amount of Insurance under
this policy together with any costs, attorneys' fees, and expenses incurred
by the Insured Claimant that were authorized by the Company up to the
time of payment or tender of payment and that the Company is obligated
to pay; or
(ii) To purchase the Indebtedness for the amount of the
Indebtedness on the date of purchase, together with any costs, attorneys'
fees, and expenses incurred by the Insured Claimant that were authorized
by the Company up to the time of purchase and that the Company is
obligated to pay
When the Company purchases the Indebtedness, the Insured shall
transfer, assign, and convey to the Company the Indebtedness and the
Insured Mortgage, together with any collateral security.
Upon the exercise by the Company of either of the options provided
for in subsections (a)(i) or (ii), all liability and obligations of the
Company to the Insured under this policy, other than to make the payment
required in those subsections, shall terminate, including any liability or
obligation to defend, prosecute, or continue any litigation.
(b) To Pay or Otherwise Settle With Parties Other Than the Insured or
With the Insured Claimant.
(i) to pay or otherwise settle with other parties for or in the name
of an Insured Claimant any claim insured against under this policy. In
addition, the Company will pay any costs, attorneys' fees, and expenses
incurred by the Insured Claimant that were authorized by the Company up
to the time of payment and that the Company is obligated to pay; or
(ii) to pay or otherwise settle with the Insured Claimant the loss or
damage provided for under this policy, together with any costs, attorneys'
fees, and expenses incurred by the Insured Claimant that were authorized
by the Company up to the time of payment and that the Company is
obligated to pay.
Upon the exercise by the Company of either of the options provided
for in subsections (b)(i) or (ii), the Company's obligations to the Insured
under this policy for the claimed loss or damage, other than the payments
required to be made, shall terminate, including any liability or obligation
to defend, prosecute, or continue any litigation.
8. DETERMINATION AND EXTENT OF LIABILITY
This policy is a contract of indemnity against actual monetary loss or
damage sustained or incurred by the Insured Claimant who has suffered
loss or damage by reason of matters insured against by this policy.
(a) The extent of liability of the Company for loss or damage under
this policy shall not exceed the least of
(i) the Amount of Insurance,
(ii) the Indebtedness,
(iii) the difference between the value of the Title as insured and
the value of the Title subject to the risk insured against by this policy, or
(iv)if a government agency or instrumentality is the Insured
Claimant, the amount it paid in the acquisition of the Title or the Insured
Mortgage in satisfaction of its insurance contract or guaranty.
(b) If the Company pursues its rights under Section 5 of these
Conditions and is unsuccessful in establishing the Title or the lien of the
Insured Mortgage, as insured,
(i) the Amount of Insurance shall be increased by 10%, and
(ii) the Insured Claimant shall have the right to have the loss or
damage determined either as of the date the claim was made by the
Insured Claimant or as of the date it is settled and paid.
(c) In the event the Insured has acquired the Title in the manner
described in Section 2 of these Conditions or has conveyed the Title, then
the extent of liability of the Company shall continue as set forth in
Section 8(a) of these Conditions.
(d) In addition to the extent of liability under (a), (b), and (c), the
Company will also pay those costs, attorneys' fees, and expenses incurred
in accordance with Sections 5 and 7 of these Conditions.
9. LIMITATION OF LIABILITY
(a) If the Company establishes the Title, or removes the alleged
defect, lien or encumbrance, or cures the lack of a right of access to or
from the Land, or cures the claim of Unmarketable Title, or establishes
72307 (6/06)
the lien of the Insured Mortgage, all as insured, in a reasonably diligent
manner by any method, including litigation and the completion of any
appeals, it shall have fully performed its obligations with respect to that
matter and shall not be liable for any loss or damage caused to the
Insured.
(b) In the event of any litigation, including litigation by the Company
or with the Company's consent, the Company shall have no liability for
loss or damage until there has been a final determination by a court of
competent jurisdiction, and disposition of all appeals, adverse to the Title
or to the lien of the Insured Mortgage, as insured.
(c) The Company shall not be liable for loss or damage to the Insured
for liability voluntarily assumed by the Insured in settling any claim or
suit without the prior written consent of the Company.
10. REDUCTION OF INSURANCE; REDUCTION OR
TERMINATION OF LIABILITY
(a) All payments under this policy, except payments made for costs,
attorneys' fees, and expenses, shall reduce the Amount of Insurance by
the amount of the payment. However, any payments made prior to the
acquisition of Title as provided in Section 2 of these Conditions shall not
reduce the Amount of Insurance afforded under this policy except to the
extent that the payments reduce the Indebtedness.
(b) The voluntary satisfaction or release of the Insured Mortgage shall
terminate all liability of the Company except as provided in Section 2 of
these Conditions.
11. PAYMENT OF LOSS
When liability and the extent of loss or damage have been definitely
fixed in accordance with these Conditions, the payment shall be made
within 30 days.
12. RIGHTS OF RECOVERY UPON PAYMENT OR
SETTLEMENT
(a) The Company's Right to Recover
Whenever the Company shall have settled and paid a claim under this
policy, it shall be subrogated and entitled to the rights of the Insured
Claimant in the Title or Insured Mortgage and all other rights and
remedies in respect to the claim that the Insured Claimant has against any
person or property, to the extent of the amount of any loss, costs,
attorneys' fees, and expenses paid by the Company. If requested by the
Company, the Insured Claimant shall execute documents to evidence the
transfer to the Company of these rights and remedies. The Insured
Claimant shall permit the Company to sue, compromise, or settle in the
name of the Insured Claimant and to use the name of the Insured Claimant
in any transaction or litigation involving these rights and remedies.
If a payment on account of a claim does not fully cover the loss of the
Insured Claimant, the Company shall defer the exercise of its right to
recover until after the Insured Claimant shall have recovered its loss.
(b) The Insured's Rights and Limitations
(i) The owner of the Indebtedness may release or substitute the
personal liability of any debtor or guarantor, extend or otherwise modify
the terms of payment, release a portion of the Title from the lien of the
Insured Mortgage, or release any collateral security for the Indebtedness,
if it does not affect the enforceability or priority of the lien of the Insured
Mortgage.
(ii) If the Insured exercises a right provided in (b)(i), but has
Knowledge of any claim adverse to the Title or the lien of the Insured
Mortgage insured against by this policy, the Company shall be required to
pay only that part of any losses insured against by this policy that shall
exceed the amount, if any, lost to the Company by reason of the
impairment by the Insured Claimant of the Company's right of
subrogation.
(c) The Company's Rights Against Noninsured Obligors
The Company's right of subrogation includes the Insured's rights
against noninsured obligors including the rights of the Insured to
indemnities, guaranties, other policies of insurance, or bonds,
notwithstanding any terms or conditions contained in those instruments
that address subrogation rights.
ALTA Loan Policy (6/17/06)
The Company's right of subrogation shall not be avoided by
acquisition of the Insured Mortgage by an obligor (except an obligor
described in Section 1(e)(i)(F) of these Conditions) who acquires the
Insured Mortgage as a result of an indemnity, guarantee, other policy of
insurance, or bond, and the obligor will not be an Insured under this
policy.
13. ARBITRATION
Either the Company or the Insured may demand that the claim or
controversy shall be submitted to arbitration pursuant to the Title
Insurance Arbitration Rules of the American Land Title Association
("Rules"). Except as provided in the Rules, there shall be no joinder or
consolidation with claims or controversies of other persons.
Arbitrable matters may include, but are not limited to, any controversy or
claim between the Company and the Insured arising out of or relating to
this policy, any service in connection with its issuance or the breach of a
policy provision, or to any other controversy or claim arising out of the
transaction giving rise to this policy. All arbitrable matters when the
Amount of Insurance is $2,000,000 or less shall be arbitrated at the option
of either the Company or the Insured. All arbitrable matters when the
Amount of Insurance is in excess of $2,000,000 shall be arbitrated only
when agreed to by both the Company and the Insured. Arbitration
pursuant to this policy and under the Rules shall be binding upon the
parties. Judgment upon the award rendered by the Arbitrator(s) may be
entered in any court of competent jurisdiction.
14. LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE
CONTRACT
(a) This policy together with all endorsements, if any, attached to it
by the Company is the entire policy and contract between the Insured and
the Company. In interpreting any provision of this policy, this policy shall
be construed as a whole.
(b) Any claim of loss or damage that arises out of the status of the
Title or lien of the Insured Mortgage or by any action asserting such claim
shall be restricted to this policy.
(c) Any amendment of or endorsement to this policy must be in
writing and authenticated by an authorized person, or expressly
incorporated by Schedule A of this policy.
72307 (6/06)
(d) Each endorsernent to this policy issued at any time is made a part
of this policy and is subject to all of its terms and provisions. Except as
the endorsement expressly states, it does not (i) modify any of the terms
and provisions of the policy, (ii) modify any prior endorsement, (iii)
extend the Date of Policy, or (iv) increase the Amount of Insurance.
15. SEVERABILITY
In the event any provision of this policy, in whole or in part, is held
invalid or unenforceable under applicable law, the policy shall be deemed
not to include that provision or such part held to be invalid, but all other
provisions shall remain in full force and effect.
16. CHOICE OF LAW; FORUM
(a) Choice of Law: The Insured acknowledges the Company has
underwritten the risks covered by this policy and determined the premium
charged therefor in reliance upon the law affecting interests in real
property and applicable to the interpretation, rights, remedies, or
enforcement of policies of title insurance of the jurisdiction where the
Land is located.
Therefore, the court or an arbitrator shall apply the law of the
jurisdiction where the Land is located to determine the validity of claims
against the Title or the lien of the Insured Mortgage that are adverse to the
Insured and to interpret and enforce the terms of this policy In neither
case shall the court or arbitrator apply its conflicts of law principles to
determine the applicable law.
(b) Choice of Forum: Any litigation or other proceeding brought by
the Insured against the Company must be filed only in a state or federal
court within the United States of America or its territories having
appropriate jurisdiction.
17. NOTICES, WI ERE SENT
Any notice of claim and any other notice or statement in writing
required to be given to the Company under this policy must be given to
the Company at Chicago Title Insurance Company, Attn. Claims
Department, P 0. Box 45023, Jacksonville, Florida 32232-5023.
ALTA Loan Policy (6/17/06)
LOAN POLICY
Schedule A
Rate Code
Std
State
48
City
077
Property Type
10
Office File Number
00073980
Policy Number
72307 78490709
Date of Policy
April 24, 2009 at
12:55 a.m.
Amount of Insurance
$200,000.00
Premium
$776.00
1. Name of Insured:
CITY OF YAKIMA, OFFICE OF NEIGHBORHOOD DEVELOPMENT SERVICES
2. The estate or interest in the land herein described which is covered by this policy is:
A Fee
3. The estate or interest in the land referred to herein is at date of policy vested in:
UNITED BUILDERS OF WASHINGTON, INC., a Washington Corporation
4. The insured mortgage and assignments thereof, if any, are described as follows:
Deed of Trust, wherein United Builders of Washington, Inc., a Washington Corporation is Grantor, and Fidelity
Title Company is Trustee, and City of Yakima Office of Neighborhood Development Services is Beneficiary, in the
original amount of $200,000.00, dated April 22, 2009, and recorded April 24, 2009, under Auditor's File Number
7650327.
5. The land referred to in this Policy is described as follows:
Lots 15 and 16, Block 109, TOWN OF NORTH YAILMMA, now Yakima, recorded in Volume "A" of Plats, Page
10, re-recorded in Volume "E" of Plats, Page 1, records of Yakima -County, Washington.
Situated in Yakima County, State of Washington.
This policy valid only if Schedule B is attached.
i
LOAN POLICY
SCHEDULE B - PART I
File Number: 00073980 Policy Number: 72307 78490709
EXCEPTIONS FROM COVERAGE
This policy does not insure against Toss or damage by reason of the (and the Company will not pay costs, attorneys fees or
expenses), which arise by reason of:
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, claims or title to water.
SPECIAL EXCEPTIONS:
1. Real property taxes for the second half of the assessment year 2009 in the sum of $2,439.25, which shall be delinquent
after October 31st.
2. Obligation to pay future annual assessments by reason of inclusion within the boundaries of City of Yakima Stormwater
Fee and Horticulture Pest & Disease Control District, which sums are not now due or payable.
FIDELITY TITLE COMPANY agent for
CHICAGO TITLE INSURANCE COMPANY
Countersigned
Oj/08-20-09
This policy valid only if Schedule A is attached.
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'BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. ) 2 --
For Meeting Of: April 7, 2009
ITEM TITLE: Consideration of a resolution authorizing the City Manager of the City of
Yakima to execute a $200,000 CDBG economic development loan agreement
with United Builders of Washington, Incorporated.
SUBMITTED BY: Michael Morales, Deputy Director CED
CONTACT: Michael Morales, Deputy Director 575-3533
SUMMARY EXPLANATION:
United Builders of Washington, Inc. (UB) has requested a working capital loan from the city to allow
them to sustain their current workforce, and release sufficient UB capital to continue operation of the
Seasons Music Festival (Seasons). The source of funds for the loan is the city's Community
Development Block Grant Economic Development budget. The future availability of additional
CDBG funds from the American Recovery and Reinvestment Act has provided the additional
resources to make this loan possible. The allocation of funds, however, will be from the approved
2009 annual action plan and budget.
United Builders purchased the property located at 101 North Naches Avenue in 2005. The building
was constructed as a church in 1902, and was converted to a music performance hall, known thereafter
as The Seasons Music Festival (Seasons). Seasons was established as a philanthropic effort by.UB and
the Strohsal family to enhance and expand the musical performance market in Yakima. Seasons Music
Festival is a not for profit community arts organization that operates the facility, and UB has
subsidized this cost from the inception, including over $350,000 of investments necessary to convert
its use from church to concert venue.
CONTINUED ON NEXT PAGE
Resolution X Ordinance Contract Other:
Funding Source: CDBG. Economic Development
Approval for Submittal:
. City Manater
STAFF RECOMMENDATION: Staff recommends approval of the resolution.
BOARD RECOMMENDATION: This proposal has not been formally presented to a committee
COUNCIL ACTION:
1
Don Boyd of Carlson, Boyd & Bailey, LLC has served as the city's legal counsel for Section 108 and
CDBG loans, and is assisting with this project. Mr. Boyd has reviewed the financial statements for UB
and the personal financial statements of the guarantors to determine if the city's risks are adequately
mitigated. In particular, Mr. Boyd will analyze whether United Builders and the guarantors possess
sufficient assets and net worth to back this loan in case of default. Mr. Boyd's opinion will be
available at the city council meeting.
Based upon the information reviewed thus far, and balanced against the city's proposed collateral
position, staff recommends approval of the $200,000 working capital loan, subject to the following
terms and conditions being agreed to and/or met prior to loan closing and fund disbursement:
1. Repayment Period: 24 months, total principal and interest due at end of term.
2. ,Interest rate: 4% - Based on prior Section 108 and CDBG Float Loans.
3. Security/collateral:
a. 1st Deed of Trust for the real property located at 101 North Naches Avenue in Yakima,
Washington (Seasons Performance Hall).
b. Any subordinate debt on the secured property must be pre -approved by the City
Manager.
c. In addition to the Loan Agreement and Promissory Note, the loan shall be evidenced by
the personal Guaranties signed by the principals of United Builders (J. Patrick Strohsal
and Steven R. Strohsal), with each member guaranteeing the full amount of the loan.
4. Clear title report
5. The borrower cannot be delinquent on any local, state or federal taxes.
6. All city, county, state and federal certificates, licenses and permits must be issued and current.
7. Liability insurance fully paid for the next year.
8. There are no material changes to the financial statements submitted for review by the City of
Yakima for United Builders of Washington, Inc. as of Oct. 31, 2008; Stephen R. Strosahl dated
November 25, 2008; and J. Patrick Strosahl dated March 13, 2009.
9. Provide for review by the City of Yakima a written appraisal report on the subject real property
effective no more than six months from the date of loan funding and showing sufficient value
to provide for full repayment of the loan
2