HomeMy WebLinkAbout12/08/2015 12 Loan Repayment Terms MOU with the Seasons Music Festival; Seasons Music HallBUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. 12.
For Meeting of. December 8, 2015
ITEM TITLE: Resolution authorizing Memorandum of Understanding with the
Seasons Music Festival Board of Directors establishing the terms of
repayment of the City's loan for improvements to the Seasons Music
Hall to United Builders of Washington, Inc.
SUBMITTED BY: Jeff Cutter, City Attorney
SUMMARY EXPLANATION:
In 2009, the City loaned $200,000 to United Builders of Washington, Inc. for required fire safety equipment
that was installed in The Seasons Music Hall. United Builders failed to make the required payments to the
City and therefore, in 2011, a Modification of the original loan agreement was executed by the parties allowing
for an additional two years for the repayment of the loan and accrued interest. United Builders was unable to
satisfy the terms of repayment and transferred the title to The Seasons Music Hall to the Seasons Board
without the consent of the City as required in the loan agreement.
To avoid the City's foreclosing on the property, the City negotiated with the Seasons Musical Festival Board
to arrange the terms of repayment of the loan balance and accrued interest. The terms of that agreement were
set forth in the attached and incorporated Memorandum of Understanding (MOU) between the Seasons
Music Festival Board and the City. To preserve the City's right of recovery from United Builders in the
underlying loan during the agreed loan repayment period the City executed a Tolling Agreement with United
Builders to toll the running of the City's statute of limitations while the repayment was being accomplished.
This negotiated repayment plan will allow the Seasons Music Festival Board to retain ownership of the
Seasons Music Hall so long as the terms of the repayment MO U are complied with.
Correction to exhibit C of Tolling Agreement made 12 -7 -15.
Resolution: X
Ordinance:
Other (Specify): Memorandum of Understanding and Incorporated Documents
Contract:
Start Date:
Item Budgeted:
Funding Source/Fiscal Impact:
Strategic Priority:
Insurance Required? No
Contract Term:
End Date:
Amount:
Economic Development
Mail to: Sean Russel
Phone: 509-853-3000
APPROVED FOR
SUBMITTAL:
RECOMMENDATION:
a4- W-1
Approve the Memorandum of Understanding.
ATTACHMENTS:
Description
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City Manager
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RESOLUTION NO. R -2015-
A RESOLUTION authorizing the City Manager to execute a Memorandum of Understanding
with The Seasons Music Festival establishing the repayment terms for a
loan balance for which the Seasons Music Hall is the collateral.
WHEREAS, in April 2009 United Builders received a loan from the City in the amount of
$200,000 to pay for required fire safety improvements to the Seasons Music Hall; and
WHEREAS, United Builders executed promissory notes and a deed of trust on the
Season property to secure the loan amount requiring the loan to be repaid to the City within two
years; and
WHEREAS, In April 2011 the entire balance of the loan was still outstanding; to allow
more time for United Builders to repay the loan the City and United Builders entered a
Modification and Restatement Of Promissory Note dated September 5, 2012 that provided
terms of payment of accrued interest and allowed 2 more years for full retirement of the loan
balance; and
WHEREAS, as of April, 2014 the City had received no interest payment or payment on
the principle of the loan balance and the City was advised that United Builders had transferred
title to the Seasons Performance Hall over to the Seasons Music Festival Board without the
consent of the City; and
WHEREAS, the City then entered discussion with the Season Board to attempt to work
out a repayment plan for the balance of the loan and accruing interest to avoid the City's
foreclosure of the loan and recovery of the collateral property; and
WHEREAS, the Season Board and the City successfully negotiated a repayment plan
that will retire the City's loan principle and accrued interest through a series of annual payments,
all as described in the attached and incorporated documents and Memorandum of
Understanding between the Seasons Music Festival and the City that will allow the Season
Board to retain ownership of the Seasons property; and
WHEREAS, in order to preserve the City's right of recovery in the underlying loan to
United Builders during the agreed upon repayment period the City and United Builders entered
into the attached and incorporated Tolling Agreement to preserve the City's statute of limitations
on its time to prosecute the underlying loan; 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 the
attached and incorporated Memorandum of Understanding providing for the repayment of the
principle and accrued interest of the City's United Builders loan by the Seasons Music Festival
Board.
ADOPTED BY THE CITY COUNCIL this 8th day of December, 2015.
ATTEST:
Sonya Claar Tee, City Clerk
Micah Cawley, Mayor
TOLLING AGREEMENT
This Tolling Agreement (this "Agreement") is entered into by the City of Yakima
("Yakima" or "the City ") and United Builders of Washington, Inc., J. Patrick Strosahl, and
Stephen R. Strosahl, personally and for their respective marital communities, sometimes
collectively referred to herein as the "Parties." This Agreement shall be effective upon the date
of its execution and delivery to the other Party by the last Party to execute.
RECITALS
The Parties submit the following recitals in support of this Tolling Agreement as
representations of the potential allegations that may be asserted in the event of fixture litigation of
the issues subject to this Agreement. The Parties may not mutually agree with certain
representations set forth in the following recitals, but .present them as individual perspectives
supporting potential claims and as a basis for warranting this Tolling Agreement. If the Parties
should litigate the issues identified herein in the future the Parties agree that each and every
element of any future claim(s) shall be subject to proof before a finder of fact, and are in no way
conceded by either Party based upon the recitals set forth.
A. United Builders of Washington, Inc. is a private, for - profit corporation that sought and
received Two Hundred Thousand Dollars ($200,000) in loan funds from the City for use as
operating funds, said loan secured under the terms and conditions set forth in the, attached
AGREEMENT, including a Promissory Note and personal Unconditional Guarantees
(Attachment A), and Deed Of Trust (Attachment B).
B. Yakima is a first class city located in Yakima County, Washington and is a Washington
municipal corporation.
C. Under the terms of the Agreement and Deed of Trust United Builders was to have repaid
the City Loan in frill on the second annual arwiversary of the Agreement, that date of repayment
being April 22, 2011,
D. As of April 22, 2011 United Builders did not make any payment whatsoever on the Loan
balance, or the interest accruing thereon. As a result of the non- performance the City entered
into a MODIFICATION AND RESTATEMENT OF PROMISSORY NOTE dated September 5,
2012 with United Builders (Attachment D) whereby United Builders was to deed over to the City
a parcel of real property as payment on the accrued loan interest as of said date of execution of
the Modification, and in consideration of that transfer /compensation the City agreed to modify
the underlying promissory note to extend the repayment of the Loan balance to April 22, 2014.
E. As of April 22, 2014 the City had received no payment whatsoever from United Builders
on the outstanding Loan amount. In the meantime, United Builders had deeded the title to the
secured property, known generally as the Seasons Performance Nall, to the Seasons Board of
Directors, said transfer having taken place without the notice to and consent by the City as
required in paragraph 4 and 5 of the Deed of Trust executed by United Builders.
Tolling Agreement
Page t of 6
F. To attempt to recover the unpaid Loan balance and accrued interest owed to the City the
City initiated negotiations with the Seasons Board, as current deed holders, to attempt to arrange
a repayment plan that the City and the Seasons could each accommodate in order to satisfy the
Loan balance and accrued interest thereon and to also allow the Seasons to continue to Operate in
the venue rather than subjecting the property to a foreclosure sale.
G. The Seasons Board and the City successfully negotiated a repayment plan that the parties
are in agreement on, as represented in the attached Memorandum of Understanding (Attachment
E). In order for the City to preserve its right to pursue a claim of foreclose on the secured
property for full recovery of the Loan value in the event the Seasons Board's efforts to repay the
Loan are not successful during the period permitted to the Seasons for repayment of the Loan in
accord with the Memorandum of Understanding, United Builders, and Patrick and Steve Strosahl
and their marital communities would have to agree to the tolling of the remaining period under
the applicable statutes of limitation and similar Timing Defenses, as- stated below, which United
Builders and the Strosahls are willing to do subject to the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing RECITALS and documents attached
hereto, which arc collectively deemed to be a part of this Agreement, and of the benefits to and
burdens -upon each, the Parties agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have the following
meanings:
(a). "Effective Date" shall mean the latest date upon which both Parties have
ratified this Agreement by providing a signature in the space provided below.
(b). "Tolling Period" shall mean the period from and including the Effective
Date (as defined above) of this Agreement until and including the Expiration Date (as defined
below) of this Agreement, or as such Expiration Date may be hereafter extended in writing by
the mutual agreement of the Parties hereto. Unless terminated by any Party prior thereto in
accordance with the terms of subparagraph 1(d), below, or extended in writing by the Parties,
this Agreement shall expire fifteen and one -half (15112) years from the Effective Date of this
Agreement, at which time the statute of limitations shall no longer be tolled and the statute of
limitations shall begin to run again.
(c). "Expiration Date" shall mean the date that falls exactly fifteen (15) years
and six (b) months after the Effective Date of this Agreement.
(d). `Early Termination" shall mean the termination of this Agreement by
either Party by delivery of a notice of termination to the other Party not less than 30 days before
termination is effective.
(e). "Timing Defenses" shall mean any affirmative defenses to any Claim that
any Party may have to the extent based upon any statute of limitations and/or any failure of any
Party to file a damage claim, institute or commence litigation, or institute or commence any other
legal proceeding within some specified period, before a specified date, or before the happening
of a specified event, including any equitable defense of a similar nature.
(f). "Claim" or "Claims" shall mean any and all right of recovery of the fitll
Two Hundred Thousand Dollar ($200,000) Loan value, together with all accrued interest thereon
in accord with the terms of the underlying Loan Agreement, including the right to foreclose on
the real property securing the Loan under the Deed of Trust attached hereto.
Tolling Agireement
Page 2 of 6
2. The Parties stipulate, covenant and agree that Timing Defenses applicable to the Claims
shall be tolled during the Tolling Period. Any limitation periods for filing complaints or
demands with any federal, state or municipal court, agency or dispute resolution service
applicable to any existing claim or cause of action, including any claim or cause of action
grounded in contract, tort, statute or equity that either of the Parties may possess against the other
Party with regard to said Claire are tolled and shall be suspended from. running from the
"Effective Date" set forth in this Agreement. Any sale, transfer, exchange or assignment of
interest in United Builders of Washington, Inc. to any other entity during the terram of this
Agreement shall not impair the application of its terms upon the party receiving said United
Builders' interest, responsibilities and obligations herein.
3. The Parties stipulate, covenant, and agree that this Agreement shall have no effect on any
Tinging Defenses that may be available to any Party prior to the Effective Date, and that all time
periods prior to the Effective Date and after the Expiration Date shall be included in the
calculation of and running of any applicable Timing Defenses. Nothing contained herein shall
preclude any Party fiom asserting any Timing Defenses to the extent that such defenses already
exist as of the Effective Date, and nothing herein shall be deemed to revive any Claim -, barred as
of the Effective Date, Furthermore, this Agreement shall have no effect on any defenses asserted
by any party other than the Parties to this Agreement.
4. The Parties stipulate, covenant and agree that by executing and entering into this
Agreement no Party waives or otherwise impairs, by estoppel or any other means, any Party's
right and ability to raise any Tinning Defenses available for the periods prior to the Effective
Date and after the Expiration Date.
5. The Patties stipulate, covenant and agree that in the event the Seasons Board successfully
repays the full balance of the Loan, together with accrued interest thereon in accord with the
terms of the Memorandum of Understanding attached hereto, the final payment of said
repayment shall entitle United Builders and the Strosahls to a full and complete settlement,
extinguishment and release of any and all obligations as represented in the underlying Loan
Agreement, Promissory Mote, Deed of Trust and Unconditional Guaranty that are identified in
this Tolling Agreement, together with any and all claims, actions or demands whatsoever that
may have been asserted by one of the Parties hereto against another.
6. The provisions of this Agreement comprise all of the terms, conditions, agreements and
representations of the Parties respecting the tolling of the Timing Defenses, This Agreement
may not be altered or amended except by mutual written agreement executed by the parties, The
Parties hereby agree that terms of this Agreement have not been changed, modified, or expanded
by any oral agreements or representations entered into or made by the Parties prior to or at the
execution of this Agreement.
7. The Parties hereto acknowledge that each of them has had the benefit of counsel of their
choice and has been offered an opportunity to review this Agreement with chosen counsel. The
Toiling Agreement
Page 3 of 6
Parties hereto further acknowledge that they have, individually or through their respective
counsel, participated in the preparation of this Agreement, and it is understood that no provision
hereof shall be construed against any Party hereto by reason of any Party having drafted or
prepared this Agreement.
8. This Agreement may be executed in one or more original facsimile counterparts, each of
which shall be deemed an original, but also which together will constitute one and the same
instrument.
9. This Agreement shall terminate on the Expiration Date as provided in paragraph 1(c)
above, unless there has been an Early Termination as provided for in paragraph l (d) above, or it
has been extended in writing prior to termination by the Parties to be bound.
10. Nothing in this Agreement shall be construed as an admission or denial by either of the
Parties to the merits of any Party's claims or the merits of any .party's defenses.
11. This Agreement is not intended to be admissible against any Party as an admission of any
liability and/or fault in any matter. Notwithstanding the immediately preceding sentence, this
Agreement, if otherwise admissible, may be introduced into evidence at any proceeding held
between or among the Parties for the specific purpose of enforcing its terms.
12. This Agreement shall be governed by and construed in accordance with the laws of the
State of Washington. Venue for any action taken to enforce or construe the terns of this
agreement shall reside in the Yakima County Superior Court in Yakima County, Washington.
13. If any portion of this Agreement is changed per mutual agreement of the Parties, or any
portion is held invalid by a court of competent jurisdiction, the remainder of the Agreement shall
continue in full force and effect.
14. Time shall be of the essence as to this Agreement,
15. If any Party brings an action upon this Agreement, the prevailing Party shall be entitled to
recover its actual expenses, including, but not limited to, sums expended for its engagement of
expert witnesses and their costs and expenses, whether or not called to testify, and actual costs
and attorney fees incurred in connection therewith, whether at trial, arbitration, or any appeal
tberefiom, including, without limitation, those incurred in connection with any bankruptcy,
insolvency or reorganization proceeding or receivership in which any Party is involved,
including, without limitation, those incurred in making any appearances in any such proceeding
or in seeking relief from any stay or injunction issued in or arising out of any such proceeding.
16. Any demand, notice, or request required or permitted under this Agreement shall be
given in writing, and shall be deemed to have been properly made, as of the time of such
delivery, if personally delivered, delivered by email of facsimile; or as of the third (311d) day after
`felling Agreement
Page 4 of 6
such mailing, if sent by Certified Mail, postage prepaid, return receipt requested, to the addresses
set forth below:
YAJCU\4A: City of Yakima
City Manager
129 N, 2nd Street
Yaldma, WA 98901
UNITED BUILDERS OF WASI-UNGTON, INC .:
-P,OrBox-9489
Yakima, Washington -98907-
Attn: 44-at-rick-Strosahl-
J, PATRICK STROSAHL: 'A
Yakima, Washington 98907— `3
-21
STEPHEN R. STROSARL:
P-.9,BoK-948-8
Yakima, Washington 9,8907-
17, The persons executing this Agreement on behalf of their respective party hereto warrants
that be or she has been fully authorized to do so on behalf of and to legally bind the party
represented by the signature to all terms, performances and provisions of this Agreement.
IN WITNESS WHEREOF, this Agreement has been signed by the following
Parties, or their representative counsel.
CITY OF YAKIMA
32
Tony O'Rourke
City'Manager for City of Yakirna
Dated this _ day of September, 2015.
Tolling Agreement
Page 5 of 6
By- M Dated this I day of pt tuber, 2015.
Osallf s:"Tr /Z
President
J. Patrick Strosahl personally
of r, 2015.
Judith L. Strosahl personally
of September, 2015.
Stephen R. Strosahl j
of September, 2015.
1�16, f- 0_
Geanette L. Strosahl
of Septembm, 2015
Io\ (C-wl
Dated this -2-day
Dated this —day
Tollitig Agreement
Page 6 of 6
'4k-
this' Lday
qt".
his 'I —day
Attachment A
AGREEMENT BETWEEN THE CI'T'Y OF YAKIMA OFFICE OF
NEIGHBORHOOD DEVELOPMENT SERVICES
AND UNITED BUILDERS OF WASHINGTON INC.
R_ Z 00 -5-5-
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 Sex -vices (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 wessarr 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, paYtticularly by creating and retaining jobs.
WHEREAS, accordingly, the City is willing to use CDBG funds to assist
United Builders of Washington thxough 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 AVeement. This Agreement shall commence upon execution by the
pax -ties 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.
Page X of 9
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.
I 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 loam
funding obligations under this Agreement.
4. Contact with HUD. United Builders of Washington tinderstands and agrees
that, without the written consent of the City, all direct contact with bIUD 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.
a. Cpadit ons 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 undertakon 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 records) 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).
Page-2 of 9
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.
B. United Builders of Washington shall have provided to The City a first
position lien against the Collateral evidenced by a folly executed Deed of Trust.
R 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. Maintenancee and Inspection-of Records. United Builders of Washington
shall maintain standard business and accounting records, any other records
required herein, aad 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 tunes 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 anchor financial adjustments withiXI
thirty (30) calendar days of notification of the discrepancy by the City,
7. No City Fun s. 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 fart 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, IUD, or any other federal agency,
United Builders of Washington shall prepay 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 fiom any CDBG, HUD, or
other federal funds received from or through the City.
10. nu 1 Fi aaxeial R rt, During the terra 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.
Page 3 of 9
71. Compliance with Law. United Builders of Washington must comply with any
and all applicable lags, rules, and regulations promulgated- by any federal, state,
and/or local governmental agency or regulatory body.
Law's that may apply to this Agreement include without fimi.tation:
+ Title VI of the Civil Rights Act of 19614 (42 USC 200(4 ));
+► Title VIII of the Civil .Rights Act of 1968 (42 USC 3601);
• Section 8 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 5909);
• Age Discrimination Act of 1975, as amended (42 USC 6101);
+ Americans with Disabilities Act of 1990;
• Cavil 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
327338);
• 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 amwid -ed 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- 7.28 --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,
Page 4 of 9
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, partaership 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 takes 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 treasonable liability insurance relating to the
conduct of its business for the next year.
E. 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 Agxeement 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 Stiosahl 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
Page 5 of 9
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. Stiosahl represents and warrants that his personal and
marital community financial statement dated November 25, 2048 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,
1s. Liability Insurance.
A. On or before the effective date of this Agreement, United Builders of
Washington skull 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 pour 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 shalt 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 mold lfarn-dess. 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 - fi -otn 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.
Page 6 of 9
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 banding on the panties to this Agreement.
-17, Limitatian.9f.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, then. the assignee shall assume all duties, obligations, and
liabilities of United Builders of Washington stated. herein.
7.9. Termination. This Agreement may be terminated as follows:
A. In tho 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. StVvival. Any provision of this Agreement that imposes an obligation after
termination or expiration of this Agreement shall survive the terms or expiration of
this Agreement and shall be Binding on the parties to this Agreement.
23. Severabilit_y. 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 provisions of the United States or
Page 7 of 9,
the State of Washington, said provision which inay conflict therewith shall be
deemed modified to conform to such statutory andlor regulatory provision.
24. Intearation and ModifloaCign. This Agreement sets forth all of the terms,
conditions, and agreements of the parties relative to the subject mutter 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 axed sent to the parties to their addresses as follows:
TO CITY: City of f akaa
Office of Neighborhood Development Services
Attn: Archie Mathews
City Hall --- Second. Floor r
129 North Second Street
Yakima, WA 98901
TO UNITED .BUILDERS OF WASHINGTON:
United Builders of Washington. Inc.
F.O. Box 9488
Yakima, Washington 98907
Attn: J. Patrick Strosahl
TO J. PATRICK STROSAI-IL:
P.O. Box 9488
Yakima, Washington 98907
TO STEPHEN R. STROSAHL:
F.O. Bost 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 spRcified above.
26. GoverninK 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.
Page 8 of 9
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 Hly 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
this A! day of ti — -- - 2009
CITY OF Y'AKIMA
13y:
R. A. Zais, Jr., Cry' Manager
J. Watrick Strosahl
Date. 2009
ATTEST-.
Deborah Moore, City Cleric -t+* I
City Contract No, 2oo9 -118
Resolution No. Rw,g.00-7,3:0'
EXECUTED by United Builders of
Washinn, Inc.
this �'2_ day ofs�_ '
2009.
UNITED BUILDERS OF
WASHINGTON, INC.
�4 -WROW—WARP
-� L�-Wc .._
Stephen . Strosahl
Date: _ - 2009
XAMY OF YMMA 2000010M - Unhed Bwldm CDBG Inue- X00408 HCnau PurwnrntslCoaa Agt (041409).x%
Page 9 of 9
•E
PROAUSSORY NOTE
$200,000:00
April '7.7. 2005
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 SER'V'ICES, ( "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 sure of TWO HUNDRED THOUSAND
($200,000,00), with interest on the principal from the elate 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.
S. 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.
d. Prepayment, Maher 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 Maher 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 ofprincipal anal 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 tee 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 ..I..
W
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 corisent 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.
14. Security of Note. To secure fidl payment and performance of Maher 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 191919 - 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 loam 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.
18, 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 giveft 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
elo Archie Mathews
City Hall-- Second Floor
129 North Second Street
Yakima, WA 98901
1
United Builders of Washington, Inc.
if
mi
r�
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EX'T'END CREDIT,
OR TO FORBIAR FROM ENVORCTNG REPAYMLN'T OF A DEBT ARX NOT
ENFORCEABLE UNDER WASHINGTON IAW,
X, \CI Y OF NATCXA- 20009 \ONDS - United Buildm 00i1G 7ann 20(NJO &1ltgaa i7ncumeuls\Pmwiasary Nate • buvfnm'doc-
Promissory Nate
Page -3-
UNCONDITIONAL GUARANTY
PARTIES: City: The City of Yakima, a Washington municipal corporation
through the Office of Neighborhood Development Services.
Ob, ligor: 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 (" A.greement ") and Promissory Note.
Pursuant to the terms of the Agreement, Obligor is accepting a
loan in the amount of Two Hundred Thousand Dollars
($200,000.00) from the City. The undersigned has agreed to
enter into this Unconditional Guaranty of all Obligor's
obligations under the Agreement.
AGREEMENT:
As an inducement and in consideration of any and all contemporaneous or future
financial accommodations by City to Obligor, the undersigned Guarantor
unconditionally guarantees the prompt payment when due and at all times thereafter
of the Loan, including any and all existing, contemporaneously incurred and future
indebtedness and liability of every kizrd arising therefiom. (including all extension$,
renewals, and modifications thereon, absolute or contingent, however created or
evidenced, owing from Obligor to City plus such interest as way 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 might to
enforce all agreements and obligations contained in this guaranty for its own: bepefit as
fully as if named heroin, but City shall nevertheless have the aright to enforce this
Guaranty Page I
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 iii 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 bind 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. shalt 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 noon- 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, ov 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, fam
or corporation or to proceed against or exhaust any security hold 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 array, 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 offteer 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
Guaxanty 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 f,?- . day of * f , 2049.
A, A- A.. tl
. 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 thxs�day of , 2009.
f
�" W.'e'V402
7C; \CITYOF YAKUWA- 20409 \0MM- 9.dted73uU&raCOW Laaa- 2009M \Loaa4auuteup \tluaaaty- Pat3tmaaM (049909).4oa
Guaranty Page 4
t
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
corporations.
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 accenting 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 pant 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 mare 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 persons 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 rage 2
QbHgor, 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 (0 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 fiom Obligor, Guarantor, any other guarantor
or source, or from any securrity grannted to City, under this or any other agreement, iii
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 i-ITevocably waives
to the fullest extent perm Ated by law any objection which it may have now or hereafter
to venue or any claim that such forum is an inconvenient forum.
EXECUTED this2*qMdPa y of, ^ , 2009.
Stephen R. Strosahl
CONSENT OF SPOUSE
The undersigned, being the spouse ofthe 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 l now have or
acquire in the future.
Dated this M day of , 2009.
i
Y- \0ITY0ryARIMA• 20009', 0nS• Ual kd804ers0013EILwn•2009081\1&aaBa mmts' ,Guaxanty•SwwSaosaW(0A0909)AQIa
Guaranty
Page 4
Attachment B
uduin7 g4Ni5 ui0 3 iu2uiiimui�liuimi
DEED OF TRUST -1 2h W
Grantor(s):
1. UNITED BUILDERS OF WASHINGTON, INC. �
Grantee(s):
L 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 32eday 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 Hal"econd
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, Bloch 109, TOWN OF NORTH YARIMA, now
Yakima.
' FILE# 7850327
Return Address:
YAKIMA COUNTY, WA
DaizaOfEDgOF
Donald A. Boyd
MST:19PH
Carlson, Boyd & Bailey, PLLC
FNES: 6
230 South 2nd Street, Suite 202
FIDELITY TITLE WPM
Yakima, WA 98901
Recording Fey: 96.dD
DEED OF TRUST -1 2h W
Grantor(s):
1. UNITED BUILDERS OF WASHINGTON, INC. �
Grantee(s):
L 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 32eday 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 Hal"econd
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, Bloch 109, TOWN OF NORTH YARIMA, now
Yakima.
r . "
which real property is not used principally for agricultural or farming
purposes, together with all the tenements, hereditaments, and appurtenances now ar
hereafter thereunto belonging or in any wise appertaining, and the rents, issues and
i profits thereof.
i
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 gate as shall be
agreed upon.
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, GRANTORS
COVENANT AND .AGREE:
1. To creep 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 proportyfee and clear of all other charges, liens or encumbrances
impairing the security of this Deed of Trust.
3. To beep all buildings now or hereafter erected on the property described
herein continuously insured against loss by fire or other hazards in an amount not less
than the total debt secured by this Deed of Trust. All policies shall be held by the
Beneficiary, and be in such companies as the Beneficiary may approve and have loss
payable first to the Beneficiary, as its interest may appear, and then to the Grantor.
The amount collected under any insurance policy may be applied upon any indebted-
ness hereby secured in such order as the Beneficiary shaU. dotermine. 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 BENEIi ICIARY'S prior
written consent; BENEFICIARY may, at their sole, unrestricted option, declare all
2
I L a . I
sums clue hereunder and secured hereby immediately due and payable. Consent once
given by BENEFICLARY shall not be deemed a waiver- to any future consent. The
parties recognize that strict enforcement of this prevision is necessary for the protec-
tion of the BENEFICIARY.
h. 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 waxrant that GRANTORS' intended use of the premises does not involve the use,
production, disposal orb ' ringing onto the premises of any hazardous substance, waste
or materials. As used erein, 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
MERCLA ") 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 couxts 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 anyi.mprovements 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 andlor
TRUSTEE in connection with all of those matters referred to or related to the
provisions, representations and/or warranties of this provision..
G. 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.
S. 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.
91
• !' - . .
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 ofthe 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.
1 By accepting payment of any sum.. secured hereby after 'its due date,
Beneficiary does not waive its right to require prompt payment when due of all other
sums so secured or to declare default for failure to so pay,
s. 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 containeti 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 shalt 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 fellows: (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. Trustees 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 andby 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 assigus. The term Beneficiary shall mean the holder and owner of the
note secured hereby, whether-or not named as Beneficiary herein.
United Builders of Washington, Inc.
By:
Its:
0
STATE OF WASHINGTON )
} ss:
County of Yakima j
r'.SL�_
�,t 't)vzwxtl
On this day personally appeared before met-,\- , to we known
to be the ` of United Builders ofWashington, 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 five and voluntary act and
deed of said corporation, for the uses and purposes therein. mentioned.
GIVEN usd—ar-my hand and official seal this �e-6d.ay of April, 2009.
If-v\• jaR
0 Y PUBLIC in and for the
u � �G � State of Washington
ca -1hz Residing at
aesl CO My Commission. Expires: ` 1
44.2 Ot 79(1t(fidih� CflBGi.van•40o'X08M9=Domme-o \de d dt--t.dw
5
Lots 15 and 16, Block 109, TOWN OF NORTH YAKIMA, now Yakima,
recorded in volume "All of Plats, Page 10, re-recorded in Volume
"E" of Plats, Wage 1, records of Yakima County, Washington.
Situated in Yakima County, State of Washington.
Attachment C
Instructions: To use the Payment Calculator, enter all REED information
Payment amounts and Debt Schedule will appear below
Borrowed Amount $260,024.79
Rate 2.000%
Lease/Loan Term 15 years
Payments per Year I payments per year
Payment -$20,236.55 per Billy
Payment -$,20,236.55 per Year
Total Payments -$303,,548.28 Total over Life
Debt Schedule
Period
Beginning Balance
Payment
lnterest
Principal Paydown
1
$260,024.79
-$20,236.55
-$5,200.50
-$15,036.06
2
$244,988.74
-$20,236.55
-$4,899.77
-$15,336.78
3
$229,651.96
-$20,236.55
-$4,593.04
-$15,643.51
4
$214,008.44
-$20,236.55
-$4,280.17
-$15,956.38
5
$198,052.06
-$20,236.55
-$3,96104
-$16,275.51
6
$181,776.55
-$20,236.55
-$3,635.53
-$16,601.02
7
$165,175.53
-$20,236.55
-$3,303.51
-$16,933.0,4
8
$148,242.49
-$20,236.55
-$2,964,85
-$17,2717'0
9
$130,970.79
-$20,236.55
-$2,619,42
-$17,617.14
10
$113,353.65
-,$20,236.55
-$2,267,07
-$17,969A8
11
$95,384.17
-$20,236,55
-$1,907.68
-$18,328.87
12
$77,055.30
-$20,236,55
-$1,541.11
-$18,695,45
13
$58,359.85
-$20,236.55
-$1,167.20
-$19,069.36
14
$39,290.50
-$20,236,55
-$785.81
-$19,45074
15
$19,839.76
-$20,236.55
-$396.80
-$19,83916
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Attachment D
MODIFICATION AND RESTATEMENT OF PROMISSORY NOTE
,---
_ 1 , 201-2
Yalfi , Washington
This Agreement is made and executed this day of f , 2012, by and between
City of Yakima, Office of Neighborhood Development Sei:vice ("Lender "), and United Builders
of Washington, Inc. ( „Maher ") and modifies and amends that certain note dated April 22, 2009, in
the principal sum of $200,000.00 executed by Maker (the "Note ").
1. The Note is hereby modified as follows:
a. Maker shall cause the owner of that certain real property located at 112 South Sixth
(6111) Street, Yakima, Washington., Yakima County Tax Parcel No. 191319- 13418, to
deed to Lender by Bargain and Sale Deed free and clear of all liens and encumbrances
thereon, except those specifically approved by Lender. The transfer of said property to
Lender shall be in payment of all accrued base interest and late charges on the Note
through the date hereof which the parties agree to be in the amount of $20,000.00.
Lender hereby waives default interest under the Note through the date hereof. The
parties agree that upon recording of the Deed on said property, the Note shall be
current and in good standing.
b. Section 3. of the Note is hereby changed as follows, effective as of the date hereof.
Maker shall make full and final payment of all principal, interest, costs and charges
due under the Note on April 22, 2014,
2. Except as modified herein, the terms and conditions of the Note and any other
agreements shall continue in frill force and effect, including without limitation the
provisions for default specified therein. Each of the Makers agree to and are bound
jointly and severally by the terms of the Note, as modified herein.
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.
United Builders of Washington, Inc.
By
Its
P.(
Yakima, Washington 98907
Cit
I:
Its
Cit
129 North. Second Street
Yakima, WA 98901
Note Modification, Agreement CITY CONTRAc r NO: 00 1,!)
.
Page -1- RESOLUTION NO: 0- V - J1 q
m \city of yakima. 20000 \onds -united builders cobg loan - 2008081 \loan documents\united builders- seaso34s promissory note amendment -je
amencled note- 8- 22- 2012.doo
Promissory Note
Page -2-
RESOLUTION NO. R- 2092 -114
A RESOLUTION authorizing the execution of a Promissory Note Modification
Agreement to extend the final payment date of indebtedness owed
to the City by United Builders of Washington, Inc. resulting from a
loan of certain CDBG funds the City previously provided to United
Builders of Washington, Inc., said loan being secured by certain
real property owned by United Builders of Washington, Inc.
commonly known as The Seasons Music Hall and by the personal
guarantees of J. Patrick Strosahl and by Stephen R. Strosahl.
WHEREAS, the City of Yakima entered into a Loan Agreement with United
Builders of Washington, Inc. on April 22, 2059 whereby The City of Yakima loaned United
Builders of Washington, Inc. $250,500.00 for use as operating funds for business
operations within the City of Yakima; and
WHEREAS, the loan to United Builders of Washington, Inc. incurred interest at the
rate of 4.0% per annum and the loan was fully due and payable within two (2) years; and
WHEREAS, the loan to United Builders of Washington, Inc. was secured by real
property located in Yakima, Washington commonly known as the Seasons Music Hall,
and also by the personal guarantees of J. Patrick Strosahl and by Stephen R. Strosahl,
owners of United Builders of Washington, Inc.; and
WHEREAS, United Builders of Washington, Inc. of has not been able to operate
sufficiently profitably to pay off the loan when it became due and payable; and
WHEREAS, United Builders of Washington, Inc. has requested that the City of
Yakima agree to an extension of the payment due date on the loan to April 22, 2014; and
WHEREAS, J. Patrick Strosahl has proposed transferring title to certain vacant
residential real property owned by Nob Hill Realty Co., Inc., a Washington corporation,
which real property is commonly Known as 112 South Sixth Street, Yakima, Washington
and is listed as Yakima County Tax Parcel 1 91 31 9 -1 341 8 having a current assessed
value of $16,500.00, to satisfy the current accrual of interest under the Promissory Note,
and
WHEREAS, the City Council finds it to be in the best interests of the citizens of
Yakima to amend the promissory note provided by United Builders of Washington, Inc.
and to accept the real property identified in the MODIFICATION AND RESTATEMENT OF
PROMISSORY NOTE attached hereto and incorporated herein by this reference; 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:
1. execute the attached and incorporated MODIFICATION AND RESTATEMENT OF
PROMISSORY NOTE; and
2. execute any and all other documents necessary and appropriate for full
performance of this Resolution and the MODIFICATION AND RESTATEMENT OF
PROMISSORY NOTE.
ADOPTED BY THE CITY COUNCIL. this 4th day of September, 2012.
Is/ Micah Cawley
Micah Cawley, Mayor
ATTEST:
Isl Sonya Claar Tee _.._
Sonya Claar Tee, City Clerk
Certified to be a true and correct c of the
original filed in my office. .4M
.� GIT
BY
6� •= ���
Attachment E
Memorandum of Understanding
DATE : , 2015
PARTIES: (1) UNITED BUILDERS 01r' WASHINGTON, INC.
a Washington corporation
(referred to in this Memmundurn as "United Builders ")
(2) THE SEASONS MUSIC FESTIVAL
a Washington nonprofit corporation
(referred to in this Memorandum as "Seasons ")
(3) CIT Y Or YAKIMA, a Washington municipality, through
OFFICE Or NEIGHBORHOOD DEVELOPMENT SERVICES
(referred to iii this Memorandum as "City ")
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, Washingtom
BACKGROUND AND PURPOSE:
On or about April 22, 2009, United Builders of Washington, Inc. and the City of Yaldma
Office of Neighborhood Development Services executed an Agreement Between the City of
Yakima Office of Neighborhood Development Services and United Builders of Washington Inc.
( "Agreement "). The purpose of the Agreement was to memorialize a loan from the City to
United Builders in the amount of $200,000 ( "Loan" ). A copy of the Agreement and
accompanying promissory notes are attached hereto as Attachment A.
To secure the City's Loan, United Builders pledged the Subject Property as collateral.
The City recorded. a Deed of Trust on the Subject Property. A copy of the Deed of Trust is
attached hereto as Attachment A
At the time that United Builders and the City executed Agreement, United Builders held
legal title to the Subject Property. On or about August 3, 2009, however, United Builders
transferred title to the Subject Property to the Seasons, and the Seasons thereafter became the
legal owner of the Subject Property. The Seasons is the current owner of the Subject Property.
The repayment obligations for United Builders that were created by the Agreement were
not transferred to Seasons in conjunction with the transfer of title to the Subject Property.
Nonetheless, the Subject Property remains subject to the Deed of Trust that the City recorded to
secure the repayment obligations under the Agreement.
No payments have been made towards the City's Loan by United Builders, or any person
or entity on behalf of United Builders. In recent months, the City has demanded repayment of
the Loan to United Builders. United Builders is not in a position to make payments towards the
outstanding Loan balance. The City has stated that it will foreclose on the Subject Property
pursuant to its rights as the Grantee of the Deed of Trust if repayment of the Loan does not
occur.
The Seasons does not want to lose the Subject Property in a foreclosure, so it has agreed
to :mako payments towards the outstanding balance of the Loan as set forth herein. To preserve
the Subj ect Property, the Patties to this Memorandum of Understanding have agreed to the
following terms in an effort the preserve the Seasons and the Seasons Performance Hall.
UNDERSTANDING. THE PARTIES AGREE AS FOLLOWS:
1. Memorandum Lffect. This Memorandum is not a contract or binding agreement
between the Parties and is merely an expression of good faith intention to preserve the Subject
Property for the Seasons. Accordingly, the Parties are not bound or otherwise obligated by this
Memorandum. Instead, the Parties merely intend for the terms of this Memorandum to serve as a
guide for the repayment of the Loan and continued operation of the Seasons and the Seasons
Performance IIall.
2. The Loan. The Agreement is and shall remain a legally binding contract between the
City and United Builders. The legal obligations to repay the Loan will continue to belong to
United Builders pursuant to the terms of the Agreement. The opportunity presented under this
Memorandum of Understanding allowing The Seasons to provide repayment of the Loan shall
only exist so long as United Builders executes a Tolling Agreement staying the statute of
limitations applicable to the City's action on collection of the outstanding Loan balance
throughout the entire term of the repayment period. This Memorandum of Understanding does
not require the Seasons or its Board of Directors to assume any terms or conditions of the
Agreement, or in any way assume the underlying obligation of repaying the Loan.
2. Preserve the Subject Property. Notwithstanding the Parties' respective legal rights
and obligations regarding the repayment of the Loan, the Parties recognize that the Subject
Property is the collateral for the Loan, and therefore the Subject Property is at risk if the Loan is
not repaid. The Seasons is, therefore, agreeing to make payments towards the outstanding Loam
repayment obligations of United Builders in order to preserve the Subject Property and continue
the operations of the Seasons and the Seasons Performance Hall.
3, Payments. The Seasons will make annual payments towards the outstanding Loan
balance as set forth in Attachment C. The first payment shall be due and payable to the City on
January 1., 2016 in the annual payment amount set forth in Exhibit C, and annual payments shall
be made on JanuatT first of each year thereafter until the balance of the Loan, together with the
accrued interest thereon, has been repaid.
4. Foreclosure Abeyance. So long as the Seasons makes all annual payments in
accordance with Paragraph 3, and United Builders remains a viable entity or assigns its interest
and obligations for this Loan to a viable entity that will remain responsible for the outstanding
debt, and so long as United Builders executes a Tolling Agreement that tolls the limitations
period in which to foreclose upon the Loan, as set forth in Paragraph 2, the City will not initiate
legal action to foreclose on the Loan.
4. Governing Law. This Memorandum is governed and will be interpreted under the laws
of the State of Washington. Jurisdiction and ven-Lic, for any disputes shall be Yakima County,
Washington,
EXECUTED as of the dates listed below.
MISWITIAMITRAM
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