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Council PKT 02-01-2005 Special/Regular . I A Federal Way City Council Meeting AGENDA CO UN CILMEMBERS Dean McColgan, Mayor Jeanne Burbidge Jack Dovey Eric Faison Jim Ferrell Linda Kochmar Mike Park CITY MANAGER David H. Moseley Office of the City Clerk February 1, 2005 1. II. III. 1. II. III. IV. AGENDA FEDERAL WAY CITY COUNCIL Council Cham hers - City Hall February 1, 2005 (1V1VW cityoffederalway. com) * * * * * SPECIAL MEETING -4:00 p.m. CALL MEETING TO ORDER ARTS & HUMAN SERVICES COMMISSION INTERVIEWS ADJOURNMENT REGULAR MEETING - 7:00 p.m. CALL MEETING TO ORDER PLEDGE OF ALLEGIANCE PRESENTATIONS a. b. Promotion Ceremony/Police Officers Introduction of New Employees/City Manager Emerging Issues/City Manager c. CITIZEN COMMENT PLEASE COMPLETE THE PINK SLIP & PRESENT TO THE CITY CLERK PRIOR TO SPEAKING. Citizens may address City Council at this time. When recognized by the Mayor, please comefÒrward to the podium and state your name for the record PLEASE LIMIT YOUR REMARKS TO THREE (3) MINUTES. The Mayor may interrupt citizen comments that continue too long, relate negative I)! to other individuals, or are otherwise inappropriate. Over please. . . v. VI. VII. VIII. IX. X. CONSENT AGENDA Items listed below have been previously reviewed by a Council Committee of three members and brought befÒre fit/I CouncilfÒr approval; all items are enacted by one motion. Individual items may be removed by a Councilmemberfor separate discussion and subsequent motion. a. b. Minutes/January 18, 2005 Re,gular Meeting Lodging Tax Advisory Committee Membership Changes King County lnterlocal Agreement/Permitting Newly Annexed Areas Sale of Old City Hall c. d. CITY COUNCIL BUSINESS a. b. Arts Commission Appointments Human Services Commission Appointments CITY COUNCIL REPORTS CITY MANAGER REPORT EXECUTIVE SESSION Potential Litigation/Pursuant to RCW 42.30.11 O( 1 )(i) ADJOURNMENT ** THE COUNCIL MAY ADD AND TAKE ACTION ON OTHER ITEMS NOT LISTED ON THE AGENDA ** THE COMPLETE AGENDA PACKET IS AVAILABLE FOR REVIEW AT CITY HALL AND ON THE CITY'S WEBSITE UNDER "PUBLIC DOCUMENT .LIBRARY" MEETING DATE: February 1,2005 ITEM# I( a) CITY OF FEDERAL WAY City Council AGENDA BILL SUBJECT: CITY COUNCIL MEETING MINUTES CATEGORY: BUDGET IMPACT: ¡g¡ CONSENT 0 RESOLUTION 0 CITY COUNCIL BUSINESS 0 ORDINANCE 0 PUBLIC HEARING 0 OTHER Amount Budgeted: Expenditure Amt.: Contingency Req'd: $ $ $ ATTACHMENTS: Draft minutes of the City Council regular meeting held on January 18,2005. SUMMARY/BACKGROUND: Official City Council meeting minutes for permanent records pursuant to RCW requirements. CITY COUNCIL COMMITTEE RECOMMENDATION: n/a PROPOSED MOTION: I move approval of the minutes of the City Council regular meeting held on January 18,2005. CITY MANAGER APPROVAL: ~ (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: 0 APPROVED 0 DENIED 0 TABLED/DEFERRED/NO ACTION 0 MOVED TO SECOND READING (ordinances only) COUNCIL BILL # ST l' reading Enactment reading ORDINANCE # RESOLUTION # REVISED - 05/10/2001 Federal Way City Council Regular Meeting Minute,s January J 8, 2005 - Page J of 6 DRAFr FEDERAL WAY CITY COUNCIL Regular Meeting Council Chambers - City Hall January 18,2005 - 7:00 p.m. Minutes 1. CALL MEETING TO ORDER Mayor Dean McColgan called the regular meeting of the Federal Way City Council to order at 7:00 p.m. Councilmembers present: Mayor Dean McColgan, Deputy Mayor Linda Kochmar, and Councilmembers Jeanne Burbidge, Jack Dovey, Eric Faison, Jim Ferrell, and Mike Parle Staff present: City Manager David Moseley, City Attorney Pat Richardson, and City Clerk Chris Green. II. PLEDGE OF ALLEGIANCE Mayor McColgan congratulated Diversity Commissioner Ron Walker and the Diversity Commission on another successful MLK Celebration event yesterday, and called upon him to lead the flag salute. III. PRESENTATIONS a. Swearing-In Ceremony/Police Officer Chief Anne Kirkpatrick announced and introduced the city's newest officer, police recruit Mark Rodmyre. She also introduced Officer Rodmyre's family to the Council. City Clerk Chris Green administered the oath of office to Officer Rodmyre, and congratulated him. b. Civil Service Commission/Outgoing Commissioner Plaque Mayor McColgan was pleased to present outgoing Civil Service Commissjoner Forrest Niccum with a plaque of appreciation for his years of service to the city. Mr. Niccum has been a commissioner since 1995. Federal Way City Council Regular Meeting Minutes January /8, 2005 - Page 2 of 6 IV. V. a. b. c. d. e. f. g. h. 1. J. k. 1. c. Introduction of New Employees/City Manager City Manager Moseley introduced Randall Reynolds, who is the city's newest police recruit officer. Mr. Reynolds previously served in the Air Force and will be attending the police academy. d. Emerging Issues/City Manager City Manager Moseley reported no emerging issues at this time. CITIZEN COMMENT Carrol Clemens - Ms. Clemens is a boardmember for the Federal Way Symphony; she urged the Council to accept the recommendations by staff to allow the Symphony to perform at Dumas Bay Centre on Saturday, August 13th. Ron Walker - Mr. Walker updated the Council on the Diversity Commission's activities. They recently donated over $1,000 in books to local schools during their annual book donation drive, and announced that plans are being made to collaborate with the Seattle Supersonics on a similar project Over 400 attended yesterday's MLK Celebration event; Mr. Walker thanked all of those who donated their time and mòney to the celebration (list of donors attached hereto as Exhibit "A"). CONSENT AGENDA Minutes/December 21, 2004 Regular Meeting - Approved Vouchers - Approved City Manager Employment Agreement Amendment - Approved 2005 Arts Commission Contract for Services Program - Approved 2005 Arts Commission Work Plan - Approved Federal Way Symphony Special Event Use Permit Request for Dumas Bay Centre - Approved King County Developmental Disabilities Grant - Approved Community Center Artwork Program/Final Design - Approved West Hylebos Creek Restoration/Project Acceptance - Approved SW 356th Regional Pond Fence ProiectllOO% Design Approval and Authorization to Bid - Approved Wynstone Preliminary Plat and Concomitant Agreement - Approved Resolution #05-439 Browns Point/Dash Point Comprehensive Plan Amendment - Resolution Postponed to May 17, 2005 regular Council meeting Councilmember Faison pulled consent item (1) from the agenda. Burbidge pulled consent item (h) from the agenda. Councilmember Federal Way City Council Regular Meeting Minutes January /8, 2005 - Page 3 of 6 MOTION BY COUNCILMEMBER FAISON TO APPROVE CONSENT AGENDA ITEMS (a) through (g) AND ITEMS (i) through (k) AS PRESENTED; SECONDED BY COUNCILMEMBER FERRELL. The motion passed as follows: Burbidge Dovey Faison Ferrell yes yes yes yes Kochmar McColgan Park yes yes yes Consent Item (h)/Community Center Artwork Program/Final Design Councilmember Burbidge called upon Recreation and Cultural Services Supervisor Mary Faber, who introduced consultant Renee Tanner. She gave a powerpoint presentation on the Community Center Artwork Program/Final Design. MOTION BY COUNCILMEMBER BURBIDGE TO APPROVE THE COMMUNITY CENTER ARTWORK PROGRAM/FINAL DESIGN AS PRESENTED; SECONDED BY DEPUTY MAYOR KOCHMAR. The motion passed as follows: Burbidge Dovey Faison Ferrell yes yes yes yes Kochrnar McColgan Park yes yes yes Consent Item (l)/Browns Point/Dash Point Comprehensive Plan Amendment - Resolution Councilmember Faison reported that the City of Tacoma requested more time to gather feedback from all parties involved (e.g. citizens and public officials in Federal Way, Tacoma, and Pierce County), before making a decision. MOTION BY COUNCILMEMBER FAISON TO POSTPONE THE BROWN POINT/DASH POINT RESOLUTION TO THE MAY 17 CITY COUNCIL MEETING; SECONDED BY COUNCILMEMBER PARK. Deputy Mayor Kochrnar asked that staff meet with City of Tacoma otìïcials on the issue and perform further financial analysis. She also suggested that any discussions between Federal Way and Tacoma should also include the Federal Way School District. Councilmember Ferrell urged the Council to proceed cautiously on the issue, and asked them to make sure that feedback is solicited from the residents and from Tacoma officials. Councilmember Faison reported that he received an invitation from the Dash Point Social Improvement Club to discuss the issue and invited Councilmembers to attend those meetings next month. Federal Way City Council Regular Meeting Minutes January J 8, 2005 - Page 4 (~f 6 The motion passed as follows: Burbidge Dovey Faison Ferrell yes yes yes yes Kochmar McColgan Park yes yes yes VI. CITY COUNCIL BUSINESS a. City Council Committee Appointments Mayor McColgan thanked all of the Council Committees for all their hard work in 2004, and reappointed Councilmembers to the following committees for 2005: Finance/Economic Development/Regional Affairs Committee Councilmembers Faison (Chair), Burbidge, Ferrell Land Use/Transportation Committee Council members Dovey (Chair), Faison, Park Parks/Recreation/Human Services and Public Safety Committee Council members Burbidge (Chair), Dovey, Ferrell Sister City Association Mayor McColgan (Ex-Officio) Lodging Tax Advisory Committee Councilmember Park (Chair) Lakehaven/City Liaison Meeting Mayor McColgan and Councilmember Ferrell Sound Transit Executive Advisory Committee Mayor McColgan and Councilmember Burbidge School District/City Liaison Meeting Mayor McColgan and Councilmember Burbidge South County Area Transportation Board Councilmember Burbidge Joint Recommendation Committee Councilmember Burbidge Federal Way City Council Regular Meeting Minutes January 18, 2005 - Page 5 of 6 b. Termination of Lease at South 359th Street and Pacific Highway South City Attorney Richardson gave an overview of the lease, which the Ackerley Group signed for placement of a billboard. Under the termination clause of the lease, the City asks the company to remove their billboard from the property by March 31, 2005. MOTION TO APPROVE NOTICE OF TERMINATION OF THE LEASE AT SOUTH 359TH STREET AND PACIFIC HIGHWAY SOUTH BY COUNCILMEMBER BURBIDGE; SECONDED BY DEPUTY MA YOR KOCHMAR. The motion passed as follows: Burbidge Dovey Faison Ferrell yes yes yes yes Kochrnar McColgan Park yes yes yes VII. CITY COUNCIL REPORTS Councilmember Ferrell represented the City at a recent Suburban Cities Association Public Issues Committee meeting. Their next meeting will be held tomorrow at the City of SeaTac. He recently received an award from the Federal Way Police Officers Guild for his work on law enforcement issues. He reiterated his call to action on finding solutions to help the local business community and the need for a city ombudsman. Councilmember Park had nothing to report at this time. Deputy Mayor Kochmar reported the Municipal Solid Waste Advisory Committee met on January 14. This newly formed committee serves as an advisory body to the King County Council on solid waste issues and planning, meeting monthly. Sound Transit will be holding an open forum meeting at the King County Regional Library on January 24th from 5:00 - 8:00 p.m. The Highline Forum (formerly the Airport Communities Coalition) will be meeting for half a day on January 2ih. She thanked Rob Van Orsow and Cary Roe for their work on solid waste issues. Councilmember Burbidge reported the next Parks/Public Safety/Human Services Committee meeting will be February 14th, in the Hylebos Conference Room. Earlier in the day she attended the South County Area Transportation Board meeting. They discussed their joint legislative program that is being put together in collaboration with other transportation groups in the South King County area. The State Department of Transportation gave a presentation on areas of potential traffic bottlenecks. Last week she also attended the Puget Sound Regional Transportation Policy Board; they discussed the 2006-2007 Budget and Work Program. Federal Way City Council Regular Meeting Minule,~ january J 8, 200S - Page 6 of 6 Councilmember Dovey reported the next Land Use/Transportation Committee meeting will take place on January 24th, at 4:30 p.m. Councilmember Faison reported that the next Finance/Economic Development and Regional Affairs Committee meeting is scheduled for January 25th, at 5:30 p.m. Mayor McColgan reported that the Council will be discussing the current business climate and finding solutions to helping the local business community at its retreat at Dumas Bay Centre on January 29th, from 8:30 a.m.-12:30 p.m. The retreat is open to the public. He also reported that Han Woo-Ri, the City's Korean Festival, will take place in May. City Manager Moseley and all of the Councilmembers individually praised the Diversity Commission, MLK Chair Ron Walker, city staff, and all of those who helped make the MLK Celebration Event a very successful one, in terms of labor, entertainment, attendance, and financial contributions. VIII. CITY MANAGER REPORT City Manager Moseley reported that Community Development staff and volunteers from Todd Beamer HS recently rounded up over 100 shopping carts for the City's Go Karts program. He mentioned that the Public Works department is reporting very few incidents of flooding with all the heavy rains lately and expressed his appreciation to the Surface Water Management Division for their great work. IX. EXECUTIVE SESSION a. b. Sale or Lease or Real Property/Pursuant to RCW 42.30.11 00)( c) Potential Litigation/Pursuant to RCW 42.30.1100 )(i) At 8:00 p.m. Mayor McColgan announced the Council would recess into Executive Session for the purpose of discussing Sale or Lease of Real Property/Pursuant to RCW 42.30.110 (1)( c), and Potential Litigation/Pursuant to RCW 42.30.110(1 )(i) for approximately one hour. x. ADJOURNMENT There being nothing further to discuss, Mayor McColgan adjourned the regular meeting of the Federal Way City Council at the hour of9:00 p.m. N. Christine Green, CMC City Clerk MEETING DATE: February 1,2006 ITEM# ~ lb ) .....-................... . CITY OF FEDERAL WAY City Council AGENDA BILL SUBJECT: Addition of Members to Lodging Tax Advisory Committee (LTAC) CATEGORY: BUDGET IMP ACT: x CONSENT RESOLUTION CITY COUNCIL BUSINESS ORDINANCE PUBLIC HEARING OTHER Amount Budgeted: Expenditure Amt.: Contingency Req'd: $0 $ $ ............................... """'m"""'."""""'.""'" ATTACHMENTS: Memo to Council Committee ......................................................... ..................................................................... SUMMARY /BACKGROUND: In December 2004 the City Council approved changes to the Federal Way City Code (FWCC) to allow more than five members on the L T Ac. FWCC Section 2-95.5 ("Changes to membership") also provides the following language: The council may review the membership of the committee annually, and make such changes as the council may deem appropriate. The total number of members may be increased or decreased at the time of the annual review, by motion of the council duly adopted, but the number of members shall not be less than five. PROPOSAL: Option 1. Add two more members to the L T AC, one representing businesses in the lodging industry and one representing organizations that promote tourism. Pros: Currently there are several qualified individuals who have either applied or have indicated interest in applying to sit on the L T Ac. By increasing the membership to seven, the City will benefit from greater community representation. Cons: No clear negative consequences. Option 2. Leave the L T AC membership unchanged at five members. Pros: Maintains a smaller, streamlined group. Cons: Does not take advantage ofthe full amount of qualified individuals and greater community representation possible with seven members. LTAC RECOMMENDATION: At its January 14, 2005 meeting, the LTAC recommended to approve Option 1. CITY COUNCIL COMMITTEE RECOMMENDATION: At its January 25,2005 meeting, the FEDRAC recommended approval of Option 1. oooooooo"""oo """""".""".oo .",oo oo. oooooo",oooooo",..oo",oo",oooooooooooooooo",..",oooooooooo..oo",oo",oooo_",oo",oooo"""oooo",oo"""oo.""" PROPOSED MOTION: "I move to add two more members to the Lodging Tax Advisory Committee, one representing businesses in the lodging industry and one representing organizations that promote tourism." CITY MANAGER APPROVAL: ~ (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: D APPROVED 0 DENIED D TABLED/DEFERRED/NO ACTION 0 MOVED TO SECOND READING (ordinances only) COUNCIL BILL # 1 ST reading Enactment reading ORDINANCE # RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: January 20, 2005 TO: Finance, Economic Development and Regional Affairs Committee VIA: David Moseley, City Manager P atri ck Doh~nomic Development Director Addition of Members to Lodging Tax Advisory Committee FROM: SUBJECT: Policy Question Should membership on the Lodging Tax Advisory Committee (L T AC) be increased from five to seven members? Background At its December 7,2004 meeting, the City Council approved changes to the Federal Way City Code (FWCC) to allow more than five members on the LTAC. FWCC Section 2-95.5 ("Changes to membership") provides the following language: The council may review the membership of the committee annually, and make such changes as the council may deem appropriate. The total number of members may be increased or decreased at the time of the annual review, by motion of the council duly adopted, but the number of members shall not be less than five. Proposal Option 1. Add two more members to the L T AC, one representing businesses in the lodging industry and one representing organizations that promote tourism. Pros: Currently there are several qualified individuals who have either applied or have indicated interest in applying to sit on the L T Ac. By increasing the membership to seven, the City will benefit from greater community representation. Cons: No clear negative consequences. Option 2. Leave the L T AC membership unchanged at five members. Pros: Maintains a smaller, streamlined group. f'l FEDRAC memo LTAC Changes 11/2/04 Page 2 of2 Cons: Does not take advantage of the full amount of qualified individuals and greater community representation possible with seven members. L T AC Recommendation. At its January 14,2005 meeting, the LTAC recommended to approve Option 1. Committee Recommendation Forward Option -L to the full City Council for approval on February 1,2005. . APPROVAL BY COMMITTEE. Committee Chair t:L MEETING DATE: February 1,2005 ITEM# ~ (é., ) CITY OF FEDERAL WAY City Council AGENDA BILL SUBJECT: Interlocal Agreement (Permitting) with King County CA TEGORY: BUDGET IMPACT: ¡g¡ CONSENT 0 RESOLUTION 0 CITY COUNCIL BUSINESS 0 ORDINANCE 0 PUBLIC HEARING 0 OTHER Amount Budgeted: Expenditure Amt.: Contingency Req'd: $ $ $ ........._-"""",.",_....",.." .................._"""..",....", .......-..............-.",."""", ATTACHMENTS: 1/21/05 LUTC Memo, Interlocal Agreement. """._"""",.",.....",....""""""""".", .......--...."""""".. SUMMARY /BACKGROUND: The Interlocal Agreement with King County designates which juridiction is responsible for permit applications in the recently annexed areas of North lake, Redondo and ParkwayIRegency Woods. The agreement requires King County to finish applications that were applied for prior to January 1. 2005 and the City of Federal Way to process applications after that date. CITY COUNCIL COMMITTEE RECOMMENDATION: To recommend the full Council approve the King County Interlocal Agreement for permitting in the recently annexed areas. ......._",.."""",.",........._""". ....................-......."""..-..--..-.""" .",...-.-...-"""......... PROPOSED MOTION: "I move to approve the King County Interlocal Agreement for permitting in the recently annexed areas". ......"""""".-......--....... .......-............-........",-""". .......-........-..................... .......-............",...--................. .......-......----....... ......._....",._",..",_..",.. CITY MANAGER APPROVAL: ~ (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: 0 APPROVED 0 DENIED 0 TABLED/DEFERRED/NO ACTION 0 MOVED TO SECOND READING (ordinances only) COUNCIL BILL # 1 ST reading Enactment reading ORDINANCE # RESOLUTION # REVISED - 05/10/2001 ~ CITYOF , ~ Federal Way CITY COUNCIL COMMITTEE STAFF REPORT DATE: To: January 21, 2005 Land Useffransportation Committee (LUTC) SUBJECT: David ose , i Manager Kathy McCI ng, CDS Director \!..(\J\'--' Isaac Conlen, Associate Planner Annexation Interlocal Agreement - Permits VIA: FROM: MEETING DATE: January 24,2005 POLICY QUESTION Should City Council adopt the attached interlocal agreement regarding permitting and code enforcement issues in the recently annexed areas? BACKGROUND On October 18,2004, the LUTC directed staff to work towards a January 1,2005, annexation effective date. On December 6,2004, the LUTC directed staff to enter into a Memorandum of Understanding (MOD) with King County staff regarding police and permitting transitional issues as a condition of annexation approval. A MOU was reached and the annexations were approved by City Council on December 21,2004, and became effective January 1,2005. Beginning in early fall of 2004, City staff has been working with County staff to create an interlocal agreement to address a number of annexation transitional issues, including permitting and code enforcement. City and County staff have now reached consensus on language for an agreement to address building and land use permitting and code enforcement in the annexation areas. The attached agreement does not address other annexation transitional issues such as property acquisition and transfer of funds. It is the County's position that these issues should be addressed in a separate interlocal agreement. As of January 1,2005, the County has béen unable to issue any pending building or land use permits in the annexation areas. The County will not be able to do so until an interlocal agreement granting such authority is approved. For this reason, the County has requested that the City expedite review and approval of the attached interlocal agreement. The general intent of the agreement is that the County maintains primary review authority for vested permits. The agreement, however, allows the City to assume review authority for individual permits on a case-by-case basis. The agreement has undergone a number of revisions and re-revisions by City and County staff. The attached draft, while not exactly as staff originally proposed, represents a working compromise that protects the City's interest in annexation permitting issues. OPTIONS Options Positives Negatives 1. "I move that City This option would: None identified. Council approve the a) Formalize the City and County's role attached interlocal in processing vested permits. agreement regarding b) Allow the County to issue pending building and land use building and land use permits. permitting and code c) Provide a higher level of certainty and enforcement in the consistency for project applicants. annexation areas." d) Allow opportunities for a high level of coordination between City and County staff 2. "I move that City None identified. This option would: Council not approve the a) Result in confusion as to the roles attached interlocal and responsibilities of City and agreement regarding County permitting staff. building and land use b) Indefinitely prohibit the County permitting and code from issuing any pending building enforcement in the and land use permits in the annexation areas." annexation areas. c) Result in delays and resubmittall redesign costs for project applicants. d) Limit opportunities for coordination between City and County staff. Staff Recommendation Option 1: "I move that City Council approve the interlocal agreement regarding vested building and land use permitting and code enforcement in the North Lake, Parkway, and Redondo East annexation areas." Committee Recommendation Forward option - to the full City Council for approval. APPROVAL OF COMMITTEE REPORT: Eric Faison, Member ~r Attachments: Draft Interlocal Agreement K:\Annexations\General Annexation Information\General Documents\Council-LUTC Packet Meterials\Ol2405 LUTC Staff Reportdoc Annexation Interlocal Agreement - Permits Page 2 D!!4Fr INTERLOCAL AGREEMENT BETWEEN KING COUNTY ~. AND THE CITY OF FEDERAL WAY ~LA TING TO PROCESSING ð ~ OF BUILDING AND LAND USE APPLICATIONS THIS. AGREEMENT is made and entered into this day by and between King County, a home rule charter County in the State of Washington (hereinafter referred to as the "County") and the City of Federal Way, a municipal corporation in the State of Washington (hereinafter referred to as the "City"). WHEREAS, the North Lake, Redondo East, and Parkway annexation areas ("Annexation Areas") will become effective on January 1,2005, pursuant to ordinances 15005, 15006, and 15007; and WHEREAS, all local governrnentalland use authority and jurisdiction with respect to the newly annexed areas transfers from the County to the City upon the date of annexation; and WHEREAS, the County and City agree that having County staff process various annexation area building and land use applications on behalf of the City for a transitional period will assist in an orderly transfer of authority and jurisdiction; and WHEREAS, it is the parties' intent by virtue of this Agreement that any and all discretionary decisions shall be made by the City; and WHEREAS, this Agreement is authorized by the Interlocal Cooperation Act, RCW 39.34; NOW, THEREFORE, in consideration of the terms and provisions herein, it is agreed by and between the City and County as follows: 1. Preannexation Building Permit Applications Filed with King County. 1.1 Except as otherwise specified herein, the County shall continue to review on behalf of the City all vested building permit applications filed with the County before the effective date of annexation that involve property within the Annexation Areas. Review by the County shall occur in accordance with the regulations under which the applications are vested or to which they are otherwise subject. Any decisions regarding whether or when an application vested shall be made by the City. 1.2 For purposes ofthis Agreement building permits include but are not limited to building permit mechanical permits and fire systems/fire sprinkler permits. 1.3 County review of building permits pursuant to this Agreement shall include decisions to approve condition or deny applications; follow-up inspections; issuance of extensions or completion of extensions; and issuance of ancillary permits, such as fire and mechanical permits that are essential for completion of each original project permit. The County agrees to consult with the City prior to rendering any administratively appealable building-related permit decision. Appeals of building permit decisions, if any, shall be processed in the same manner as permit appeals in Section 2.4 of this Agreement. 1.4 The City shall have sole discretion and responsibility on the assessment of required performance and the enforcement or release of financial guarantees required of the applicant to secure compliance with permit or development-related requirements. Notwithstanding the foregoing, upon special written request by the City, the County may agree to assist the City in determining whether to enforce or release particular financial guarantees. Such assistance from the County shall not include the initiation or. undertaking of legal actions. 1.5 The County shall review and render decisions on requests for changes to approved building-related plans up to the time that either a certificate of occupancy is issued or final construction approval has been issued for the project. Following issuance of a certificate of occupancy or final construction approval, requests for changes to the approved set of plans shall be referred to the City. The City intends to process such requests as new permit applications. 2 Federal Way lnterlocal Permit Processing 2. Preannexation Land Use Permit Applications Filed with King County. 2.1 Except as otherwise specified herein, the County shall continue to review on behalf of the City all vested land use permit applications filed with the County before the effective date of annexation that involve property within the Annexation Areas. Review by the County shall occur in accordance with the regulations under which the applications are vested or to which they are otherwise subject. Any decisions regarding whether or when an application vested shall be made by the City. 2.2 For purposes ofthis Agreement, land use permits include but are not limited to conditional use permits, site plan approvals, rezones, reasonable use permits, special use permits, SEP A reviews, shoreline permits and exemptions, short subdivisions, formal subdivisions (preliminary plats and final plats), boundary line adjustments, lot line elimination, binding site plans, plat alterations and amendments, right-of-way permits, clearing and grading permits, and other land use and engineering permits and approvals. 2.3 For those vested land use applications that do not require a public hearing prior to issuance, the County shall render a decision to approve, condition or deny applications; conduct follow- up inspections; issue extensions or completion of extensions. Appeals of building permit decisions, if any, shall be processed in the same manner as appeals are processed under Section 2.4 ofthis Agreement. 2.4 For those vested land use applications that require quasi-judicial or legislative approval or that involve administrative appeals, the County shall prepare a report and recommendation to the City's designated decision-maker for a final decision. Except as provided in Section 5, the City's decision- maker shall not be a County employee. The City shall be responsible for scheduling, providing notice, 3 Federal Way lnterlocal Permit Processing conducting any public hearings or appeals and making any final decision on such applications. County staff shall attend the public hearing to testify with respect to analysis set forth in the County's report and recommendation. 2.5 For those subdivisions and short subdivisions that have been granted preliminary approval prior to incorporation or annexation or under Section 2.4, the County shall continue its review through engineering plan approval, final plat or short plat approval, construction inspection approval, and maintenance/defect approval phases. For each of these post-preliminary review phases, the County shall prepare a recommendation for the City's designated decision maker. All final decisions on any of the post-preliminary review phases shall be rendered by the City. At the request of the City, County staff shall appear before the City Council to discuss analysis set forth in the County's final plat approval recommendation. 2.6 The City shall have sole discretion and responsibility on the assessment of required performance and the enforcement or release of financial guarantees required of the applicant to secure compliance with permit or development-related requirements. Notwithstanding the foregoing, upon special written request by the City, the County may agree to assist the City in determining whether to enforce or release particular financial guarantees. Such assistance from the County shall not include the initiation or undertaking of legal actions. 3. Permit Renewal or Extension. The City shall have ultimate authority to determine whether or not to renew a building permit or to renew or extend a land use permit under review or issued by the County in the annexation areas. 4 Federal Way lnterlocal Permit Processing 4. Optional Exclusion of Particular Applications. The City or County may at any time exclude from this Agreement any particular permit(s) or application(s) upon providing to the County or City fifteen days advance written notice. If the City provides written objection to the County's exclusion within ten days thereafter, the County shall continue processing of the application. Upon excluding any permit from review under this Agreement, the County shall turn the application over to the City for all further processing. 5. Optional Hearing Examiner Review. Notwithstanding any other provision in this Agreement, upon written request by the City, the County may agree to have the King County Hearing Examiner conduct public hearings or appeals on behalf of the City for particular land use or building permit applications. Decisions whether to utilize the County Hearing Examiner for appeal or hearing recommendations or decisions shall be made by the City and County on a case by case basis. 6. SEP A Compliance. 6.1. In order to satisfy the procedural requirements of the State Environmental Policy Act ("SEP A"), the County shall serve as lead agency for all applications processed by the County pursuant to this Agreement. 6.2 Except as provided in Section 5, appeals from SEP A threshold determinations and other SEP A matters relating to projects within the City shall be heard by the City. 7. Permit Condition and Code Enforcement. 7.1. Enforcement of Code Requirements. Within sixty days following the date this Agreement is last signed below, the County shall provide the City with a list and brief explanation of all 5 Federal Way lnterlocal Permit Processing incorporation or annexation area code enforcement cases under review by the County at the time of annexation and shall provide file documents to the City upon request. 7.2 The City shall be responsible for undertaking any code enforcement actions following the date of incorporation or annexation. 8. Fees and Reimbursement. 8.1 In order to cover the costs of processing building and land use permit applications and performing SEP A review in accordance with the terms of this Agreement, the County is authorized to collect and retain such application and other fees authorized by the County fee ordinances adopted by the City as may be modified at some future date by the County and the City. 8.2 For all applications upon which the County has initiated review and that are subsequently excluded from County processing or transferred to the City pursuant to the terms of this Agreement, the County will retain the base permit fee and a percentage of fees equivalent to the percentage of permit processing and administration performed by the County on the application. Any remaining application fee amounts received by the County prior to exclusion or transfer shall be promptly forwarded to the City. 9. Duration. This Agreement shall be deemed to take effect retroactively upon January 1, 2005 and shall continue in effect for a period of five years thereafter, unless otherwise terminated or extended. Either party may terminate this Agreement upon providing at least one hundred and twenty days (120) days written notice to the other party. The Agreement may be extended as provided in Section 11. 6 Federal Way lnterlocal Permit Processing 10. Termination Procedures. Upon termination of this Agreement, the County shall cease further processing, enforcement, and related review functions with respect to applications it is processing under this Agreement. The County shall thereupon transfer to the City those application files and records, posted financial guarantee instruments, and unexpended portions of filing fees for pending land use and building-related applications within the incorporation or annexation area. Upon transfer, the City shall be responsible for notifying affected applicants that it has assumed all further processing responsibility. 11. Extension. Pursuant to amutual agreement between the parties, this Agreement may be extended for five additional years or for a lesser agreed upon period. In order to extend the otherwise applicable termination date of this Agreement, the City shall make a written request to the County not less than sixty (60) days prior to the otherwise applicable termination date. If the parties have not agreed to the extension in writing by the termination date, the agreement terminates. 12. Indemnification. 12.1 The County shall indemnify and hold harmless the City and its officers, agents and employees, or any of them from any and all claims, actions, suits, liability, loss, costs, expenses, and damages of any nature whatsoever, by reason or arising out of any negligent action or omission of the County, its officers, agents, and employees, or any of them, in performing obligations pursuant to this Agreement. In the event that any suit based upon such a claim, action, loss, or damage is brought against the City, the County shall defend the same at its sole cost and expense, provided that the City retains the right to participate in said suit if any principal or governmental or public law is involved, and if final 7 Federal Way lnterlocal Permit Processing judgment be rendered against the City and its officers, agents, and employees, or any of them, or jointly against the City and County and their respective officers, agents, and employees, or any of them, the County shall satisfy the same. 12.2 The City shall indemnify and hold harmless the County and its officers, agents and employees or any of them from any and all claims, actions, suits, liability, loss, costs, expenses, and damages of any nature whatsoever, by reason or arising out of any negligent action or omission of the City, its officers, agents, and employees, or any of them, in performing obligations pursuant to this Agreement. In the event that any suit based upon such a claim, action, loss, or damage is brought against the county, the City shall defend the same at its sole cost and expense, provided that the County retains the right to participate in said suit if any principal of governmental or public law is involved; and if final judgment be rendered against the County and its officers, agents, employees, or any of them, or jointly against the City and County and their respective officers, agents, and employees or any of them, the City shall satisfy the same. 12.3 The City and the County acknowledge and agree that if such claims, actions, suits, liability, loss, costs, expenses and damages are caused by or result from the concurrent negligence ofthe City, its agents, employees, and/or officers and the County, its agents, employees, and/or officers, this section shall be valid and enforceable only to the extent of the negligence of each party, its agents, employees and/or officers. 13. Personnel. Control of personnel assigned by the County to process applications under this Agreement shall remain with the County. Standards of performance, discipline and all other aspects of performance shall be governed by the County. 8 Federal Way Interlocal Permit Processing 14. Administration. This Agreement shall be administered by the County Director of Development and Environmental Services or his/her designee, and the City Manager, or his/her designee. 15. Amendments. This Agreement is the complete expression of the terms hereto and any oral representation or understanding not incorporated herein are excluded. Any modifications to this Agreement shall be in writing and signed by both parties. 16. Legal Representation. The services to be provided by the County pursuant to this agreement do not include legal services, which shall be provided by the City at its own expense. 17. Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the parties hereto. No other person or entity shall have any right of action or interest in this Agreement based upon any provision set forth herein. 9 Federal Way Interlocal Permit Processing IN WITNESS THEREOF, the Parties have executed this Agreement. CITY: COUNTY: David H. Moseley, City Manager Ron Sims, King County Executive Date: Date: ATTEST: ATTEST: N. Christine Green, CMC, City Clerk DATED: DATED: Approved as to Form: Approved as to Form: Patricia A. Richardson, City Attorney King County Prosecuting Attorney K:\Annexations\General Annexation Infonnation\General Documents\Council-LUTC Packet Meterials\Federal Way finaL doc 10 Federal Way lnterlocal Permit Processing MEETING DATE: February 1, 2005 ITEM# .:rz=- çI) CITY OF FEDERAL WAY City Council AGENDA BILL SUBJECT: Sale of Old City Hall CATEGORY: BUDGET IMP ACT: ¡g¡ CONSENT 0 RESOLUTION 0 CITY COUNCIL BUSINESS 0 ORDINANCE 0 PUBLIC HEARING 0 OTHER Amount Budgeted: Expenditure Amt.: Contingency Req'd: $ $ $ ..",..-..--",-....-"""-.",.....-.-......-...-,,,.... """.---....----..-..",-.-....--..--..-.-.-.-....-..-..--",.-""".--..",...-.--.-",.... m"""'-"-"-'-'-"""'..-.--.-.--...........-"",,"""-""'--""""""-""--"" """'-""""'--""-""'.-....-...-....--'-'-'-"""" .......-..",-...-",-..",-..---""". ATTACHMENTS: Porposed Purchase and Sale Agreement, Deed of Trust and Promissory Note. """""'-""-"""""-"""""""""'-'--'-""""-'--""""""""""""""""""-""-'-"-""-"""'-"-........""""""..---..--"""",.........-""""......""".--..-'-"""""""""""""'-"--""""""""'-"'-"""'-'-'---""-'-""""""""""""-"'""""'-""""""""'-""'-""""-""""""""'-""""""-""-"""""'-..-..."""",..-"""..",-....-.-.-.------....-.-..",----.------ SUMMARYIBACKGROUND: As required by City Code and State law, the city has previously conducted 2 public hearings to declare the surplus the Old City Hall located at 33530 1 st Way S, Federal Way. The fair market value, according to the September 2004 appraisal, is $2.6 million. Subsequent to the hearings, the city received an offer to purchase the building form Acrobat Financial Services, LLc. Pursuant to Council direction, City Staff negotiated the following terms for the sale of Old City Hall: (1) the purchase price is $2.65 million with no contingencies as set forth in the proposed Purchase and Sale Agreement; (2) the payment of a $265,000 or 10% down payment/earnest money will be due to the escrow company in 2 days ofthe City's acceptance ofthe offer and will be disbursed to the City at closing; (3) the remaining balance of $2,385,000, in form of a promissory note secured by the proposed Deed of Trust and personal guarantee ofthe principal, will be due no later than May 31,2005. Any portion of the promissory note is paid by the due date is subject to 5% penalty and 18% or maximum allowable interest, whichever is less. The offer is very competitive in price and is in line with the appraised fair market value for the building. If Council approves this offer, the closing is set for February 15, 2005. ",....-..",...-.--.---""'" ".....-..-",-...-.....",-....-.-""'" .......-",-..--.....-..--....... .......-...-.-.---...-..-..-.-.---..-""""""-....,,, CITY COUNCIL COMMITTEE RECOMMENDATION: N/A. .......-...."""",.-.-....... ",....-.....-....-....-.........--......-""". """._",.._.......-......-",.... """'-'-""--""-"""""'-"-"""'--""-""-"-"""""-"'.... .......-........-......",...-......--.-.-",..-",..""".-",-""". .......-..-.-.....-......-............-....-.-",...... PROPOSED MOTION: I move the Council authorize the City Manager to take action that is consistent with this decision and to execute necessary documents to carry out the transaction. ~\......_-",- .......-""".....-...-....... CITY MANAGER APPROVAL: (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: 0 APPROVED D DENIED 0 TABLEDIDEFERREDfNO ACTION D MOVED TO SECOND READING (ordinances only) COUNCIL BILL # 1 ST reading Enactment reading ORDINANCE # RESOLUTION # REVISED - 05/10/2001 ADDENDUM/AMENDMENT TO PURCHASE AND SALES AGREEMENT The following is part of the Purchase and Sale Agreement dated January 5,2005 Between City of Federal Way ("Seller") And Acrobat Financial Services, LLC. ("Buyer") regarding the sale of the Property known as: 33530 1 st Way S Federal Way, W A. IT IS AGREED BETWEEN THE SELLER AND BUYER AS FOLLOWS: 1. Section 1 and item 1 of the Addendum to the Purchase and Sales Agreement of the same date: Purchase Price option: Purchase price shall be $2,650,000.00 paid as follows: $265,000 cash earnest money deposited with Escrow at Chicago Title within 2 days of mutual acceptance of this Agreement with the balance $2,385,000 secured with Deed Of Trust and a personal guaranty in forms that are acceptable to the City. The Deed of Trust shall bear interest of 18% or the maximum rate allowed by law which ever is less, starting on June 1, 2005 until such time the amount is paid in full. 2. Section 4.C: Seller Financing. The amount and due date shall be revised to reflect an amount of Two million three hundred eighty five thousand dollars ($2,385,000); and a due date of May 31, 2005 to be consistent with the section above. Any payment not made when due, a late payment charge of 5% of the delinquent amount shall be added to the amount due and payable. 3. Section 22, Default and attorney's Fee. The Seller may keep as liquidated damages all of the earnest moneys as remedy to Seller for such failure. 4. Seller warrants that the attached right of way taking and the easement will not reduce the existing parking along the south side of the building nor will it make the building non- conforming based on its existing use under current code. 5. Seller agrees to remove all personal property from the building, with no damage to building, no later than March 1,2005. Seller shall have until February 2nd, 2005 to respond to this offer. This Addendum/Amendment replaces in full the addendum/amendment initiated by Seller on January 19 and counter signed by Buyer on January 24. Initials: Buyer Seller Date Date Buyer Seller Date Date ~I . r RIGHT OF WA Y THAT PORTION OF PARCELS 1 AND 2 OF SHORT PLAT NUMBER 878144, ACCORDING TO THE SHORT PLAT RECORDED UNDER RECORDING NUMBER 7812081138, RECORDS OF KING COUNTY, WASHINGTON, LYING SOUTHEASTERL Y, SOUTHERL Y AND SOUTHWESTERL Y OF THE FOLLOWING DESCRIBED LINE: BEGINNING A T THE INTERSECTION OF THE EASTERL Y LINE OF SAID PARCEL 2 WITH A LINE 12.00 FEET NORTHWESTERL Y OF AND PARALLEL WITH THE NORTHWESTERL Y MARGIN OF SOUTH 336TH STREET; THENCE SOUTH 76° 15'05" WEST ALONG SAID PARALLEL LINE, 195.69 FEET; THENCE NORTHWESTERL Y ON A CURVE TO THE RIGHT WHOSE RADIAL CENTER BEARS NORTH 13° 44' 55" WEST, 30.00 FEET, AN ARC DISTANCE OF 45.16 FEET TO THE INTERSECTION OF A LINE 4.00 FEET NORTHEASTERL Y OF AND PARALLEL WITH THE NORTHEASTERL Y MARGIN OF 1ST WA Y SOUTH; THENCE NORTHWESTERL Y ALONG SAID PARALLEL LINE ON A CURVE TO THE LEFT WHOSE RADIAL CENTER BEARS SOUTH 72° 30' 01" WEST, 1254.00 FEET, AN ARC DISTANCE OF 257.58 FEET TO THE NORTHERL Y LINE OF SAID PARCEL 1 AND THE TERMINUS OF THIS LINE DESCRIPTION. CONTAINING 3,871 SQUARE FEET, MORE OR LESS. ID-\~~o4 1796 row take. doc - 1 - EAR T H ~ T E c H A tqcø INTERNATIONAL LTO. COMPANY ))2-- \ \ \ EXISTING ~ \ ROW \ , \ ':., \\ --- ~ /' /' /' /' "\ 15' ROAD &- /' UTILITY EASEMENT /' /' K.C.S.P. 878144 - REC. NO. 7812081138 PARCEL 1 PARCEL 2 , N.T.S. -> \ IJ) \ PROPOSED ROW TAKE AREA = J,871:f: S.F. ~ R~30.00' --- Vì / l=45.16' 195.69' ..--\ \t- \ ,98.97' ~ - [XlsnNG --------\ R~JO.OO' N 1615'O§' ~ - ROW C/l \ l=45.44' ~ IH 51. ------ - S. 336 ~ EXISTING ROW Cjl OCT. 2004 E EXHIBIT MAP PROPOSED RICH T or WA Y A @)T R T H 10800 N.E. 8th St. 7th Floor Bellevue, WA 98004 425 455-9494 1)3 ACAD No. 1796 row E c H 720 S. 333 St. Ste.200 Federal. Way, WA 98003 253 838-6202 / EASEMENT THE NORTHERL Y 10.00 FEET OF THE SOUTHERL Y 22.00 FEET OF PARCEL 2 OF SHORT PLA T NUMBER 878144, ACCORDING TO THE SHORT P~A T RECORDED UNDER RECORDING NUMBER 7812081138, RECORDS OF KING COUNTY, WASHINGTON: EXCEPT THA T PORTION OF SAID PARCEL 2, LYING SOUTHEASTERL Y AND SOUTHERL Y OF THE FOLLOWING DESCRIBED LINE: BEGINNING A T THE INTERSECTION OF THE EASTERL Y LINE OF SAID PARCEL 2 WITH A LINE 12.00 FEET NORTHWESTERL Y OF AND PARALLEL WITH THE NORTHWESTERL Y MARGIN OF SOUTH 336TH STREET; THENCE SOUTH 76°15'05- WEST ALONG SAID PARALLEL LINE, 195.69 FEET; THENCE NORTHWESTERL Y ON A CURVE TO THE RIGHT WHOSE RADIAL CENTER BEARS NORTH 13° 44' 55- WEST, 30.00 FEET, AN ARC DISTANCE OF 45.16 FEET TO THE INTERSECTION OF A LINE 4.00 FEET NORTHEASTERL Y OF AND PARALLEL WITH THE NORTHEASTERL Y MARGIN OF 1ST WA Y SOUTH AND THE TERMINUS OF THIS LINE DESCRIPTION. CONTAINING 2, 112 SQUARE FEET, MORE OR LESS. ItJ-19-ot 1796 easement. doc - 1 - EAR T H ~ T E c H A tqco INTERNAnONAL LTO. COMPANY ~~ \ -- \ /'~ /' \ /' /' \ 15' ROAD &: EXISTING j \ /' UTILITY EASEMENT ROW /' \ K C S P 878144 - REC. NO. 7812081138 \ ;., \ ~ ~\ ~ \\ ~ '\ ~ PROPOSED EASEMENT~ ~ . ~ AREA = 2,112:t S.F. 5' :1-- -Z ~ 218.0 ~ <f> \ ~ 1~' ----- \ t. - £XISnNG----\ R~30.00' --- N 1615'O~ ~ - ROW CjL \ L=25.23' ~ 1H 51. ----- -- 5. 336 ~ EXISTING ROW ejL PARCEL 1 PARCEL 2 EXHIBIT MAP PROPOSED EASEMENT OCT. 2004 E @T 720 S. 333 SI. Ste.200 Federal Way, WA 98003 253 838-6202 E R T H c A 10800 N.£. 8th 51. 7th Flaar Bellevue, WA 98004 425 455-9494 '-:PS , N.T.S. ~ I ACAD No. 1 796 esm t H Puget Sound Commit Reat Estate 918 S. 348th St., Ste. C Federal Way, WA 98003 Phone: (253) 927-6000 Fax: (253) 815-1100 @Copyright 1999 Commercial Brokers Association All Rights Reserved ~ CBA Form PSA NWMlS Form No. 34 ADDENDUM/AMENDMENT TO Addendum/Amendment to P & 5 PURCHASE AND SALE AGREEMENT Rev. 12/99 CBA Text Disclaimer: Text deleted by licensee indicated by strike. Page 1 of 1 New text inserted by licensee indicated by small capital letters. The following is part of the Purchase and Sale Agreement dated January 5. 2005, Between City of Federal Way a Washinaton Municipal Corporation ("Seller") And áßt'tJ&ffi~~BU~~(L /it-- regarding the sale of the Property known as: 33530 1 st Way South IT IS AGREED BETWEEN THE SELLER AND BUYER AS FOLLOWS: #1 Purchase option (A) All cash ($2.650.000.00 on or before June 30. 2005. Purchase option (B) $200.000.00 cash down at closina the balance of Purchase price will be carried on a Note and Deed of Trust on the subject property. Closina shall be February 15. 2005. The Note balance shall be for $2.450.000.00 which shall be due in full and payable on June 30. 2005. The note shall bear NO INTEREST. #2 The buyer has completed his inspection and is satisfied. This offer is non-continQent #3 Commission on the sale shall be $75.000.00 due and payable to Brokers at closina. #4 Seller warrants that any takinQ by the City for riaht-of -way will not make the buildinQ. and parkina non-conformina for (its) present use. #5 Buyer aQrees to deposit $200.000.00 into Escrow at Chicaao Title upon mutual execution of this aareement. AGENT (COMPANY): ? ú t; -t.-f- .s;lIN-I I I" ALL OTHER TERMS AND CONDITIONS of said Agreement remain unchanged. INITIALS' 8",., . I A . Date Sell" O.."a. ~ n~.a - ik "'alia. By: Date n~.a .. Puget Sound Comm'l Real Estate 918 S. 348th St, Ste. C Federal Way, WA 98003 Phone: (253) 927~OOO Fax: (253) 815-1100 @Copyright 1999 ~ Commercial Brokers Association All Rights Reserved CBA Form PS-1A Purchase & Sale Agreement Rev. 12/99 COMMERCIAL & INVESTMENT REAL ESTATE Page 1 of 9 PURCHASE & SALE AGREEMENT This has been prepared for submission to your attorney for review and approval prior to signing. No representation is made by licensee as to its sufficiency or tax consequences. fit ~ Ii Date: January 5, 2005 The undersigned Buyer, {jt1r¿Jlo.J-..{:;ïV",J.,(Ji4. / ~~ buy and Seller agrees to sell, on the following terms, the commercial real estate and all improvements thereon (collectively, the "Property") commonly known as 33530 1St Way S in the City of Federal Way, KinQ County, Washington, legally described on attached Exhibit A. (Buyer and Seller authorize the Listing Agent or Selling Licensee to insert and/or correct, over their signatures, the legal description of the Property.) 1. PURCHASE PRICE. The total purchase price is Two Million Six Hundred Fifty Thousand Dollars ($2.650.000.00), including the earnest money, payable as follows (check only one): 0 All cash at closing, including the earnest money, with no financing contingency. 0 All cash at closing, including the earnest money, contingent on new financing under Section 4a below. [8J $200.000.00/_% of the purchase price in cash at closing, including the earnest money, with the balance of the purchase price paid as follows (check one or both, as applicable): 0 Buyer's assumption of any underlying note and deed of trust, or real estate contract, under Section 4b below; [8J Buyer's delivery at closing of a promissory note for the balance of the purchase price, secured by a deed of trust encumbering the Property, as described in Section 4c below. 0 Other. See Addendum 2. EARNEST MONEY. Buyer agrees to deliver the earnest money $200.000.00 in Ithe form of [8J Cash 0 Personal check 0 Promissory note 0 Other:- If the earnest money is in the form of a promissory note, it shall be due no later than: 0 - days after mutual acceptance. 0 Upon removal of the inspection contingencies in Section 5 below. 0 Other:- The earnest money shall be held by 0 Selling Licensee 0 Closing Agent. Buyer shall deliver the earnest money no later than: [8J ~ days after mutual acceptance. 0 Upon removal of the inspection contingencies in Section 5 below. 0 Other:- Selling Licensee may, however, transfer the earnest money to Closing Agent. If the earnest money is to be held by Selling Licensee and is over $10,000, it shall be deposited to: 0 Selling Licensee's pooled trust account (with interest paid to the State Treasurer) 0 A separate interest bearing trust account in Selling Licensee's name. The interest, if any, shall be credited at closing to Buyer whose Social Security or taxpayer 10 Number is: -' If this sale fails to close, whoever is entitled to the earnest money is entitled to interest. Selling Licensee shall deposit any check to be held by Selling Licensee within 3 days after receipt or mutual acceptance, whichever occurs later. Buyer agrees to pay financing and purchase costs incurred by Buyer. If all or part of the earnest money is to be returned to Buyer and any such costs remair;¡ unpaid, Selling Licensee or Closing Agent may deduct and pay them therefrom. Unless otherwise provided in this Agreement, the earnest money shall be applicable to the purchase price and shall be non-refundable except where a condition to Buyer's obligation under this Agreement is not satisfied through no fault of Buyer. ~ Date INITIALS: ¥ Seller Date Buyer Date Seller Date 'm} Puget Sound Comm'I Real Estate 918 S. 348th St., Ste. C Federal Way, WA 98003 Phone: (253) 927-6000 . Fax: (253) 815-1100 COMMERCIAL & INVESTMENT REAL ESTATE PURCHASE & SALE AGREEMENT (CONTINUED) ~ Copyright 1999 rt'n&/ Commercial Brokers Association lJ:R: All Rights Reserved CBA Form PS-1A Purchase & Sale Agreement Rev. 12/99 Page 20f9 3. EXHIBITS AND ADDENDA. The following Exhibits and Addenda are made a part of this Agreement: Exhibit A - Legal Description 0 Earnest Money Promissory Note, CBA Form EMN 0 Promissory Note, LPB Form No. 28NCBA Form N1-A ~ Short Form Deed of Trust, LPB Form No. 20 0 Deed of Trust Rider, CBA Form DTR 0 Utility Charges Addendum, CBA Form UA 0 FIRPTA Certification, CBA Form 22E 0 Assignment and Assumption, CBA Form PS-AS [8 Addendum/Amendment, CBA Form PSA 0 Back-Up Addendum, CBA Form BU-A 0 Vacant Land Addendum, CBA Form VLA 0 Other- 4. FINANCING. Application for New Financing. If payment of the purchase price is contingent on Buyer obtainin w finan then Buyer's obligation to close is conditioned upon Buyer accepting a written com' ent for financing. will not reject those terms of a commitment which provide for a loan amount of east - percent (_%) e purchase price, interest not to exceed - percent (_%) num, a payment schedule calling for mo payments amortized over not less than - ( rs, and total placement fees and points not more - percent (_%) of the loan am . Buyer shall make immediate application for said commitment, p equired costs and make a good f' effort to procure such financing. This Agreement shall terminate and Buyer II receive a refund of earnest money unless Buyer gives Seller written notice that this condition is satisfied 0 ived on or b e - (-) days (60 days, if not completed) following mutual acceptance of this Agreement. r b. Assumption of Existing Financing. If pa nt 0 e purchase price includes Buyer's assumption of a note and mortgage or deed of trust, or a re ate contract, er shall promptly deliver to Buyer a copy of the underlying debt instrument(s) to be med, and Buyer shall be med to have approved all of the terms of the debt instrument(s) unless Bu Ives notice of disapproval within five ays after receiving such instrument(s). If any of the debt instru (s) requires the consent of a third party to the a ption by Buyer, then Buyer shall apply for such c nt within seven (7) days after receiving the debt instrument(s . on Buyer's request, Seller shall assis yer by requesting the third party's consent to the assumption on Buye s alf. This Agreement shall inate and Buyer shall receive a refund of the earnest money unless Buyer gives written notice w' In - (-) days (30 days, if not completed) of receiving the debt instrument(s) statin t such ~~~~~~tl~n a~~~~b~~;d~~;~9 ~~~~~:~~ assumption fees or other out-of-pocket,¡ expenses attributable he c. Seller Financing. If Seller is financing a portion of the purchase price by promissory note and deed of trust, unless different forms are attached to this Agreement, Buyer shall execute and submit to the Closing Agent: (i) LPB Form No. 28A Promissory Note and the DUE ON SALE and COMMERCIAL PROPERTY optional clauses in that form shall apply; (ii) UCC-1 Financing Statement covering the personal property described in Section 14 below; (iii) LPB Form No. 20 Short Form Deed of Trust; and (iv) CBA Form No. DTR Deed of Trust Rider. The promissory note shall bear interest at the rate of Q % per annum, and shall be payable as follows (choose one): 0 monthly installments of interest only, 0 monthly installments of $ N/A , 0 equal monthly installments of principal and interest in an amount' sufficient to fully amortize the outstanding principal balance at the stated interest rate over N/A years, ~ other Two million Four Hundred Fifty Thousand on June 30. 2005 . Payments shall commence on the first day of the first month after closing and continuing on the same day of each succeeding month until (choose one): 0 - months from the date of closing, ~ other June 30. 2005, on which date all outstanding principal and interest shall be due. The principal shall, at Seller's option, bear interest at the rate of Q % per annum (18% or the maximum rate allowed by law, whichever is less, if not filled in) during any period of Bu~er' default. If Seller receives any monthly payment more than Q days (15 days if not filled in) INITIALS: Buyer Date Seller Date I Buyer Date Seller Date -VB puget Sound Comm'l Real Estate 918 S. 348th St., Ste. C Federal Way, WA 98003 Phone: (253) 927-QOOO Fax: (253) 815-1100 eCopyright 1999 rtru/ Commercial Brokers Association lJ:SI( All Rights Reserved COMMERCIAL & INVESTMENT REAL ESTATE PURCHASE & SALE AGREEMENT (CONTINUED) CBA Form PS-1A Purchase & Sale Agreement Rev. 12/99 Page 3 of9 after its due date, then a late payment charge of $Q/Q% of the delinquent amount (5% of the delinquent amount if not filled in) shall be added to the scheduled payment. Buyer shall have § days (5 days if not filled in) after written notice to cure a default before Seller may declare all outstanding sums to be immediately due and payable. (Note to Buyer and Seller: If the Property is currently used primarily for agricultural purposes, then a nonjudicial foreclosure/forfeiture remedy is available to Seller only by using a real estate contract and is not available with a deed of trust.) d. Section 1031 Like-Kind Exchange. If either Buyer or Seller intends for this transaction to be a part of a Section 1031 like-kind exchange, then the other party agrees to cooperate in the completion of the like-kind exchange so long as the cooperating party incurs no additional liability in doing so, and so long as any expenses (including attorneys fees and costs) incurred by the cooperating party that are related only to the exchange are paid or reimbursed to the cooperating party at or prior to closing. 5. INSPECTION CONTINGENCY. This Agreement shall terminate and Buyer shall receive a refund of the earnest money unless Buyer gives written notice to Seller within N/A days (20 days if not filled in) of mutual acceptance of this Agreement stating that Buyer is satisfied, in Buyer's reasonable discretion, concerning all aspects of the Property, including without limitation, its physical condition; the presence of or absence of any hazardous substances; the contracts and leases affecting the property; the potential financial performance of the Property; the availability of government permits and approvals; and the feasibility of the Property for Buyer's intended purpose. If such notice is timely given, the inspection contingencies stated in this Section 5 shall be deemed to be satisfied. a. Books, Records, Leases, Agreements. Seller shall make available for inspection by Buyer and its agents as soon as possible but no later than ten (10) days after mutual acceptance of this Agreement all documents available to Seller relating to the ownership, operation, renovation or development of the Property, including without limitation: statements for real estate taxes, assessments, and utilities; property management agreements, service contracts, and agreements with professionals or consultants entered into by the Seller or any predecessor in title to the Seller; leases of personal property or fixtures; leases or other agreements relating to occupancy of all or a portion of the Property and a schedule of tenants, rents, and deposits; plans, specifications, permits, applications, drawings, surveys, studies and maintenance records; and accounting records and audit reports. Buyer shall determine within the contingency period stated in the preceding introductory paragraph whether it wishes and is able to assume, as of closing, all of the foregoing leases, contracts, and agreements which have terms extending beyond closing. Buyer shall be solely responsible for obtaining any required consents to such assumption. Seller shall transfer the leases, contracts and agreements as provided in Section 17 of this Agreement. b. Access. Seller shall permit Buyer and its agents, at Buyer's sole expense and risk to enter the Property at reasonable times after legal notice to tenants, to conduct inspections concerning the Property and improvements, including without limitation, the structural condition of improvements, hazardous materials (limited to a Phase I audit only), pest infestation, soils conditions, sensitive areas, wetlands, or other matters affecting the feasibility of the Property for Buyer's intended use. Buyer shall schedule any entry onto the Property with Seller in advance. Buyer shall not perform any invasive testing or contact the tenants without obtaining the Seller's prior written consent, which shall not be unreasonably withheld. Buyer shall restore the Property and improvements to the same condition they were in prior to inspection. Buyer agrees to indemnify and defend Seller from all liens, costs, claims, and expenses, including attorneys' and experts' fees, arising from or relating to entry onto or inspection of the Property by Buyer and its agents. This agreement to indemnify and defend Seller shall survive closing. Buyer may continue to enter the Property and interview tenants in accordance with the foregoing terms and conditions after removal or satisfaction of the inspection contingency only for the purpose of re-sale, leasing or to satisfy conditions of financing. 6. TITLE INSURANCE. a. Title Report. Seller authorizes Lender and Listing Agent, Selling Licensee or Closing Agent, at Seller's expense, to apply for and deliver to Buyer a D standard [g extended (standard, if not completed) coverage INITIALS: Buyer ~ Date Seller Date I Buyer Date Seller Date 1)1 . ' COMMERCIAL & INVESTMENT REAL ESTATE PURCHASE & SALE AGREEMENT (CONTINUED) @ Copyright 1999 f'frt.&/ Commercial Brokers Association lJ:K All Rights Reserved CBA Form PS-1A Purchase & Sale Agreement Rev. 12/99 Page 40f9 Puget Sound Comm'l Real Estate 918 S. 348th St., Ste. C Federal Way, WA 98003 Phone: (253) 927-6000 Fax: (253) 815-1100 owner's policy of title insurance. If an extended coverage owner's policy is specified, Buyer shall pay the increased costs associated with that policy including the excess premium over that charged for a standard coverage policy, and the cost of any survey required by the title insurer. The title report shall be issued by ChicaQo Title. b. Pennitted Exceptions. Buyer shall notify Seller of any objectionable matters in the title commitment or any supplemental report within ten (10) days after receipt of such commitment or supplement. This Agreement shall terminate and Buyer shall receive a refund of the earnest money, less any costs advanced or committed for Buyer, unless (a) within ten (10) days of Buyer's notice of such objections, Seller agrees to remove all objectionable provisions, or (b) within fifteen (15) days after Buyer's notice of such objections, Buyer notifies Seller in writing that it waives any objections which Seller does not agree to remoye. The closing date shall be extended to the extent necessary to permit time for these notices. Those provision's not objected to or for which Buyer waived its objections shall be referred to collectively as the "Permitted Exceptions." The title policy shall contain no exceptions other than the General Exclusions and Exceptions common to such form of policy and the Permitted Exceptions. 7. CLOSING OF SALE. This sale shall be closed on or before SEE ADDENDUM, ("closing") by ChicaQo Title ("Closing Agent"). Buyer and Seller will, immediately on demand, deposit with Closing Agent all instruments and monies required to complete the purchase in accordance with this Agreement. "Closing" shall be deemed to have occurred when all documents are recorded and the sale proceeds are available to Seller. Time is of the essence in the performance of this Agreement. 8. CLOSING COSTS. Seller shall pay the excise tax and premium for the owner's standard coverage title policy. Seller and Buyer shall each pay one-half of the escrow fees. Real and personal property taxes and assessments payable in the year of closing; rents on any existing tenancies; interest; mortgage reserves; utilities; and other operating expenses shall be pro-rated as of closing. Buyer shall pay all costs of financing including the premium for the lender's title policy. Security, cleaning, and any other unearned deposits on tenancies, and remaining mortgage or other reserves shall be assigned to Buyer at closing. The real estate commission is due on closing or upon Seller's default under this Agreement, whichever occurs first, and neither the amount nor due date thereof can be changed without Listing Agent's written consent. a. Unpaid Utility Charges. Buyer and Seller 0 WAIVE [g DO NOT WAIVE the right to have the Closing Agent disburse closing funds necessary to satisfy unpaid utility charges affecting the Property pursuant to RCW 60.80. If "do not waive" is checked, then attach CBA Form UA ("Utility Charges" Addendum). If neither box is checked, then the "do not waive" option applies. 9. POST-CLOSING ADJUSTMENTS, COLLECTIONS, AND PAYMENTS. After clqsing, Buyer and Seller shall reconcile the actual amount of revenues or liabilities upon receipt or payment thereof to the extent those items were prorated or credited at closing based upon estimates. Any bills or invoices received by Buyer after closing which relate to services rendered or goods delivered to the Seller or the Property prior to closing shall be paid by Seller upon presentation of such bill or invoice. At Buyer's option, Buyer may pay such bill or invoice and be reimbursed the amount paid plus interest at the rate of 12% per annum beginning fifteen (15) days from the date of Buyer's written demand to Seller for reimbursement until such reimbursement is made. Rents collected from each tenant after closing shall be applied first to rentals due most recently from such tenant for the period after closing, and the balance shall be applied for the benefit of Seller for delinquent rentals owed for a period prior to closing. The amounts applied for the benefit of Seller shall be turned over by Buyer to Seller promptly after receipt. 10. OPERATIONS PRIOR TO CLOSING. Prior to closing, Seller shall continue to operate the Property in the ordinary course of its business and maintain the Property in the same or better condition than as existing on the date of mutual acceptance of this Agreement, but shall not be required to repair material damage from casualty except as otherwise provide in this Agreement. Seller shall not enter into or modify existing rental agreements or leases (except that Seller may modify or terminate residential rental agreements or leases in the ordinary course INITIALS: Buyer ~ L Buyer Date Seller Date Date Seller Date --DID . . . . Puget Sound Comm" Rea' Estate 918 S. 348th St, Ste. C Federal Way, WA 98003 Phone: (253) 927-6000 Fax: (253) 815-1100 COMMERCIAL & INVESTMENT REAL ESTATE PURCHASE & SALE AGREEMENT (CONTINUED) @Copynght1999 ~A~ Commercial Brokers Association l.Ji{' All Rights Reserved CBA Form PS-1A Purchase & Sale Agreement Rev. 12/99 Page50f9 of its business), service contracts, or other agreements affecting the Property which have terms extending beyond closing without first obtaining Buyer's consent, which shall not be unreasonably withheld. 11. POSSESSION. Buyer shall be entitled to possession, subject to existing tenancies (if any), 1:8] on closing D - (on closing, if not completed). 12. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and warrants to Buyer that, to the best of Seller's knowledge, each of the following is true as of the date hereof and shall be true as of closing: (a) Seller is authorized to enter into the Agreement, to sell the Property, and to perform its obligations under the Agreement; (b) All books, records, leases, agreements and other items delivered to Buyer pursuant to this Agreement are accurate and complete; (c) The Property and the business conducted thereon comply with all applicable laws, regulations, codes and ordinances; (d) Seller has all certificates of occupancy, permits, and other governmental consents necessary to own and operate the Property for its current use; (e) There is no pending or threatened litigation which would adversely affect the Property or Buyer's ownership thereof after closing; (f) There are no covenants, conditions, restrictions, or contractual obligations of Seller which will adversely affect Buyer's ownership of the Property after closing or prevent Seller from performing its obligations under the Agreement, except as disclosed in the preliminary commitment for title insurance or as otherwise disclosed to Buyer in writing prior to the end of the inspecting contingency stated in Section 5 above; (g) TherE¡! is no pending or threatened condemnation or similar proceedings affecting the Property, and except as otherwise disclosed in the preliminary commitment for title insurance as or otherwise disclosed to Buyer in writing prior to closing, the Property is not within the boundaries of any planned or authorized local improvement district; (h) Seller has paid (except to the extent prorated at closing) all local, state and federal taxes (other than real and personal property taxes and assessments described in Section 8 above) attributable to the period prior to closing which, if not paid, could constitute a lien on Property (including any personal property), or for which Buyer may be held liable after closing; and (i) Seller warrants that there are no pending or lhreatened notices of violation of building, zoning, or land use codes applicable to the Property; and G> Seller is not aware of any concealed material defects in the Property except: NONE. Seller makes no representations or warranties regarding the Property other than those specified in this Agreement, Buyer otherwise takes the Property "AS IS," and Buyer shall otherwise rely on its own pre- closing inspections and investigations. 13. HAZARDOUS SUBSTANCES. Except as disclosed to or known by Buyer prior to the satisfaction or waiver of the inspection contingency stated in Section 5 above, Seller represents and warrants to Buyer that, to the best of its knowledge: (i) there are no Hazardous Substances (as defined below) currently located in, on, or under the Property in a manner or quantity that presently violates any Environmental Law (as defined below); (ii) there are no underground storage tanks located on the Property; and (iii) there is no pending or threatened investigation or remedial action by any governmental agency regarding the release of Hazardous Substances or the violation of Environmental Law at the Property. As used herein, the term "Hazardous Substances" shall mean any substance or material now or hereafter defined or regulated as a hazardous substance, hazardous waste, toxic substance, pollutant, or contaminant under any federal, state, or local law, regulation, or ordinance governing any substance that could cause actual or suspected harm to human health or the environment ("Environmental Law"). The term "Hazardous Substances" specifically includes, but is not limited to, petroleum, petroleum by-products, and asbestos. 14. PERSONAL PROPERTY. a. This sale includes all right, title and interest of Seller to the following tangible personal property: D None 12] That portion of the personal property located on and used in connection with the Property, which Seller will itemize in an Addendum to be attached to this Agreement within ten (10) days of mutual acceptance (None, if not completed). The value assigned to the personal property shall be the amount agreed upon by the parties and, if they cannot agree, the County-assessed value if available, and if not available, the fair market value determined by an appraiser selected by the Listing Agent and Selling Licensee. Seller warrants title to, but not the condition of, the personal property and shall convey it by bill of sale. Buyer shall pay any sales or use tax arising from the transfer of the personal property. INITIALS: Buyer ~ Date Seller Date Buyer Date Seller Date --rJ/J ,. Puget Sound Comm' Real Estate 918 S. 348th St, Ste. C Federal Way, WA 98003 Phone: (253) 927-6000 Fax: (253) 815-1100 COMMERCIAL & INVESTMENT REAL ESTATE PURCHASE & SALE AGREEMENT (CONTINUED) @Copyright1999 ~A~ Commercial Brokers Association lJjI{ All Rights Reserved CBA Fonn PS-1A Purchase & Sale Agreement Rev. 12/99 Page6of9 b. In addition to the leases, contracts and agreements assumed by Buyer pursuant to Section 5a above, this sale includes all right, title and interest of Seller to the following intangible property now or hereafter existing with respect to the Property including without limitation: all rights-of-way, rights of ingress or egress or other interests in, on, or to, any land, highway, street, road, or avenue, open or proposed, in, on, or¡iacross, in front of, abutting or adjoining the Property; all rights to utilities serving the Property; all drawings, plans, specifications and other architectural or engineering work product; all governmental permits, certificates, licenses, authorizations and approvals; all utility, security and other deposits and reserve accounts made as security for the fulfillment of any of Seller's obligations; any name of or telephone numbers for the Property and related trademarks, service marks or trade dress; and guaranties, warranties or other assurances of performance received. 15. CONDEMNATION AND CASUALTY. Buyer may terminate this Agreement and obtain a refund of the earnest money, less any costs advanced or committed for Buyer, if improvements on the Property are destroyed or materially damaged by casualty before closing, or if condemnation proceedings are commenced against all or a portion of the Property before closing. 16. FIRPTA - TAX WITHHOLDING AT CLOSING. Closing Agent is instructed to prepare a certification (CBA or NWMLS Form 22E, or equivalent) that Seller is not a "foreign person" within the meaning of the Foreign Investment in Real Property Tax Act. Seller agrees to sign this certification. If Seller is a foreign person, and this transaction is not otherwise exempt from FIRPTA, Closing Agent is instructed to withhold and pay the required amount to the Internal Revenue Service. 17. CONVEYANCE. Title shall be conveyed by a Statutory Warranty Deed subject only to the Permitted Exceptions. If this Agreement is for conveyance of Seller's vendee's interest in a Real Estate Contract, the Statutory Warranty Deed shall include a contract vendee's assignment sufficient to convey after acquired title. At closing, Seller and Buyer shall execute and deliver to Closing Agent CBA Form No. PS-AS Assignment and Assumption Agreement transferring all leases, contracts and agreements assumed by Buyer pursuant to Section 5a and all intangible property transferred pursuant to Section 14b. 18. SEATTLE REQUIREMENTS. If the Property is in the City of Seattle, Seller shall deliver to Buyer a Certificate of Land Use and Local Assessments (not applicable to single family dwellings not rep~esented to be a lawful site for more than one dwelling unit). 19. NOTICES AND COMPUTATION OF TIME. Unless otherwise specified, any notice required or permitted in, or related to, this Agreement (including revocations of offers and counteroffers) must be in writing. Notices to Seller must be signed by as least one Buyer and must be delivered to Seller and Listing Agent A notice to Seller shall be deemed delivered only when received by Seller, Listing Agent, or the licensed office of Listing Agent. Notices to Buyer must be signed by at least one Seller and must be delivered to Buyer and Selling Licensee. A notice to Buyer shall be deemed delivered only when received by Buyer, Selling Licensee, or the licensed office of Selling Licensee. Selling Licensee and Listing Agent have no responsibility to advise of receipt of a notice beyond either phoning the party or causing a copy of the notice to be delivered to the party's address on this Agreement. Buyer and Seller must keep Selling Licensee and Listing Agent advised of their whereabouts to receive prompt notification of receipt of a notice. Unless otherwise specified in this Agreement, any period of time in this Agreement shall begin the day after the event starting the period and shall expire at 5:00 p.m. Pacific time of the last calendar day of the specified period of time, unless the last day is a Saturday, Sunday or legal holiday as defined in RCW 1.16.050, in which case the specified period of time shall expire on the next day that is not a Saturday, Sunday or legal holiday. Any specified period of five (5) days or less shall not include Saturdays, Sundays or legal holidays. 20. AGENCY DISCLOSURE. At the signing of this Agreement, Selling Licensee Courtland B Pixton Puget Sound Commercial Real Estate (Insert names of Licensee and the Company name as licensed) INITIALS: Buyer ~ Date 6. Seller Date Buyer Date Seller Date 'J)tL , , COMMERCIAL & INVESTMENT REAL EST ATE PURCHASE & SALE AGREEMENT (CONTINUED) . @ Copyright 1999 rrr.../ Commercial Brokers Association tJ:K All Rights Reserved CBA Form PS-1A Purchase & Sale Agreement Rev. 12/99 Page7of9 puget Sound Comm'l Real Estate 918 S. 348th St., Ste. C Federal Way, WA 98003 Phone: (253) 927-6000 Fax: (253) 815-1100 represented Buyer (Insert Seller, Buyer, both Seller and Buyer or Neither Seller nor Buyer) and the Listing Agent Mark Freitas CraiQ Michalik Real Estate (Insert names of Licensee and the Company name as licensed) represented Seller (Insert Seller, Buyer, both Seller and Buyer or Neither Seller nor Buyer) If Selling Licensee and Listing Agent are different salespersons affiliated with the same Broker, then Seller and Buyer confirm their consent to Broker acting as a dual agent. If Selling Licensee and Listing Agent are the same person representing both parties, then Seller and Buyer confirm their consent to that person and his/her Broker acting as dual agents. If Selling Licensee, Listing Agent, or their Broker are dual agents, then Seller and Buyer consent to Selling Licensee, Listing Agent and their Broker being compensated based on a percentage of the purchase price or as otherwise disclosed on an attached addendum. Buyer and.:Seller confirm receipt of the pamphlet entitled "The Law of Real Estate Agency." 21, ASSIGNMENT. Buyer I:8J may 0 may not (may not, if not completed) assign this Agreement, or Buyer's rights hereunder, without Seller's prior written consent, unless provided otherwise herein. 22. DEFAULT AND ATTORNEY'S FEE. In the event Buyer fails, without legal excuse, to complete the purchase of the Property, then (check one): [g that portion of the earnest money which does not exceed five percent (5%) of the purchase price shall be kept by Seller as liquidated damages (subject to Seller's obligation to pay certain costs or a commission, if any) as the sole and exclusive remedy available to Seller for such failure; or 0 Seller may, at its option, (a) keep as liquidated damages all of the earnest money (subject to Seller's obligation to pay certain costs or a commission, if any) as the sole and exclusive remedy available to Seller for such failure,(b} bring suit against Buyer for Seller's actual damages, (c) bring suit to specifically enforce this Agreement and recover any incidental damages, or (d) pursue any other rights or remedies available at law or equity. If Buyer or Seller institutes suit concerning this Agreement, the prevailing party is entitled to reasonable attorneys' fees and expenses. In the event of trial, the amount of the attorney's fee shall be fixed by the court. The venue of any suit shall be the county in which the Property is located, and this Agreement shall be governed by the laws of the state where the Property is located. 23, MISCELLANEOUS PROVISIONS. a, Complete Agreement. The Agreement and any addenda and exhibits to it state the entire understanding of Buyer and Seller regarding the sale of the Property. There are no verbal or written agreements which modify or affect the Agreement. b, No Merger. The terms of the Agreement shall not merge in the deed or other conveyance instrument transferring the Property to Buyer at closing. The terms of this Agreement shall survive closing. c. Counterpart Signatures. The Agreement may be signed in counterpart, each signed counterpart shall be deemed an original, and all counterparts together shall constitute one and the same agreement. d. Facsimile Transmission. Facsimile transmission of any signed original document, and retransmission of any signed facsimile transmission, shall be the same as delivery of an original. At he request of either party, or the Closing Agent, the parties will confirm facsimile transmitted signa~ig.9Ï n" al document. 24. ACCEPTANCE; COUNTEROFFERS. Seller has until midnight of ~, 2005 (if not filled in, the third business day following the last Buyer signature date below) to accept this offer, unless sooner withdrawn. If this offer is not timely accepted, it shall lapse and the earnest money shall be refunded to Buyer. If either party makes a future counteroffer e other party shall have until 5:00 p.m. on the 2nd business day (if not filled in, the second INITIALS: Buyer Date Seller Date Buyer Date Seller Date yß c' COMMERCIAL & INVESTMENT REAL ESTATE PURCHASE & SALE AGREEMENT (CONTINUED) @Copyright 1999 ~£/ Commercial Brokers Association lJK" All Rights Reserved CBA Fonn PS-1A Purchase & Sale Agreement Rev. 12/99 Page Sot9 Puget Sound Comm'l Real Estate 918 S. 348th St., Ste. C Federal Way, WA 98003 Phone: (253) 927-6000 Fax: (253) 815-1100 business day) following its receipt to accept the counteroffer, unless sooner withdrawn. If the counteroffer is not timely accepted or countered, this Agreement shall lapse and the earnest money shall be refunded to the Buyer. No acceptance, offer or counteroffer from the Buyer is effective until a signed copy" is received by the Seller, the Listing Agent or the licensed office of the Listing Agent. No acceptance, offer or counteroffer from the Seller is effective until a signed copy is received by the Buyer, the Selling Licensee or the licensed office of the Selling Licensee. 25. INFORMATION TRANSFER. In the event this Agreement is terminated, Buyer agrees to deliver to Seller within ten (10) days of Seller's written request copies of all materials received from Seller and any plans, studies, reports, inspections, appraisals, surveys, drawings, permits, application or other development work product relating to the Property in Buyer's possession or control as of the date this Agreement is terminated. 26. CONFIDENTIALITY. Until and unless closing has been consummated, Buyer will treat all information obtained in connection with the negotiation and performance of this Agreement as confidential (except for any information that Buyer is required by law to disclose and then only after giving Seller written notice at least three (3) days prior to the disclosure) and will not use or knowingly permit the use of any confidential information in any manner detrimental to Seller. 27. SELLER'S ACCEPTANCE AND BROKERAGE AGREEMENT. Seller agrees to sell the Property on the terms and conditions herein, and further agrees to pay a commission in a total amount computed in accordance with the listing agreement. If there is no written listing agreement, Seller agrees to pay a commission of Q% of the sales price or $75.000.00. The commission shall be apportioned between Listing Agent and Selling Licensee as specified in the listing agreement or any co-brokerage agreement. Seller assigns to Listing Agent and Selling Licensee a portion of the sales proceeds equal to the commission. If the earnest money is retained as liquidated damages, any costs advanced or committed by Listing Agent or Selling Licensee for Buyer or Seller shall be reimbursed or paid therefrom, and the balance shall be paid one-half to Seller and one-half to Listing Agent and Selling Licensee according to the listing agreement and any co-brokerage agreement. In any action by Listing Agent or Selling Licensee to enforce this Section, the prevailing party is entitled to reasonable attorneys' fees and expenses. Neither Listing Agent nor Selling Licensee are receiving compensation from more than one party to this transaction unless disclosed on an attached addendum, in which case Buyer and Seller consent to such compensation. The Property described in attached Exhibit A, is commercial real estate. Notwithstanding Section 26 above, the pages containing this section, the parties' signatures and an attachment describing the Property may be recorded. 28. LISTING AGENT AND SELLING LICENSEE DISCLOSURE. EXCEPT AS OTHERWISE DISCLOSED IN WRITING TO BUYER OR SELLER, THE SELLING LICENSEE, LISTING AGENT, AND BROKERS HAVE NOT MADE ANY REPRESENTATIONS OR WARRANTIES CONCERNING THE LEGAL EFFECT OF THIS AGREEMENT, BUYER'S OR SELLER'S FINANCIAL STRENGTH, OR THE PROPERTY, INCLUDING WITHOUT LIMITATION, THE PROPERTY'S ZONING, COMPLIANCE WITH APPLICABLE LAWS (INCLUDING LAWS REGARDING ACCESSIBILITY FOR DISABLED PERSONS), OR HAZARDOUS MATERIALS. SELLER AND BUYER ARE EACH ADVISED TO SEEK INDEPENDENT LEGAL AND TAX ADVICE ON THESE AND OTHER MATTERS RELATED TO THIS AGREEMENT. INITIALS: Buyer Æ ~ Date L Buyer Date Seller Date Seller Date ul'-f . , Puget Sound Comm'l Real Estate 918 S. 348th St., Ste. C Federal Way, WA 98003 Phone: (253) 927-6000 Fax: (253) 815-1100 @Copyright1999 ~ Commercial Brokers Association All Rights Reserved CBA Form PS-1A Purchase & Sale Agreement COMMERCIAL & INVESTMENT REAL ESTATE Rev. 12/99 PURCHASE & SALE AGREEMENT Page 9 of 9 Buyer ~~NTINUED) Dare ~ ~ 5. Buyer ~ Date, Office Phone 253 528 0808 Fax No. 253 528 0298 Home Phone Print Buyer's Name Buyer's Address 31620 23rd Ave S Federal Way, WA 98003 Selling Office Puaet Sound Commercial Real Estate Office Phone 253 927 6000 Other Phone 253 606 7539 Address 918 S 3481h St Federal Way. WA 98003 By Courtland B Pixton Seller Fax No. 2538151100 MLS Office No. Print Name Date Date Seller Home Phone Print Seller's Name Seller's Address Listing Office Office Phone No. Address Office Phone Fax No. Other Phone Fax No. MLS Office No. 29. BUYER'S RECEIPT. Buyer acknowledges receipt of a Seller signed copy of this Agreement, on '-' BUYER BUYER --rJ . c; vl/ Puget Sound Comm'l Real Estate 918 S. 348th St., Ste. C Federal Way, WA 98003 Phone: (253) 927-6000 Fax: (253) 815-1100 @Copyright 1999 rTrt.&/ Commercial Brokers Association lJjII All Rights Reserved CBA Form PSR Rescission of Purchase & Sale Rev. 12/99 RESCISSION OF Page 1 of 1 PURCHASE & SALE AGREEMENT CBA Text Disclaimer. Text deleted by licensee indicated by strike. New text inserted by licensee indicated by small capital letters. 1. RELEASE. The undersigned agree that the Purchase and Sale Agreement between them dated Auaust 232004, for purchase and sale of the property whose address is, 33530 1st Way S Federal Way, WA County, Washington, Zip 98003 arid all other agreements or undertakings between them in respect to said property are hereby rescinded; and each releases the other, Listing Agent and Selling licensee from any and all present or future liability thereunder and/or in connection with said sale, other than as set forth in this Rescission Agreement; provided that nothing in this Rescission Agreement shall be construed to terminate any existing agency relationships unless otherwise agreed in writing. 2. ¡ ~ EARNEST MONEY. Selling Licensee is authorized and directed to immediately disburse (or cause to be disbursed from escrow, if applicable) the earnest money as follows: N/A 3. COMMISSION IF SOLD IN FUTURE. If Seller shall, within six (6) months after the date of this Rescission Agreement sell said property to Buyer, someone acting on Buyer's behalf, an entity in which more than 10% of the ownership or voting interests are owned or controlled by Buyer, or a person or entity that has more than 10% ownership or voting interest in Buyer, Seller shall pay Listing Agent a commission of (check one) 0 $ NONE or 0 NONE of the sales price, less any portion of the above earnest money retained by Listing Agent. "Sell" means a Purchase and Sale Agreement si during said six months, regardless of when it closes. This Rescission Agreement may be re rded. BUYER DATE I f/o~ BUYER DATE SELLER DATE SELLER DATE BROKER (COMPANY) DATE BY PRINT NAME -V{~ EXHIBIT A PORTION OF PARCELS 1 AND 2 OF SHORT PLAT NUMBER 878144, ACCORDING TO THE SHORT PLAT RECORDED UNDER RECORDING NUMBER 7812081138, RECORDS OF KING COUNTY, WASHINGTON. WITH THE EXCEPTION OF: BEGINNING AT THE INTERSECTION OF THE EASTERLY LINE OF SAID PARCEL 2 WITH A LINE 12.00 FEET NORTHWESTERLY OF AND PARALLEL WITH THE NORTHWESTERLY MARGIN OF SOUTH 336TH STREET; THENCE SOUTH 76°15'05" WEST ALONG SAID PARALLEL LINE, 195.69 FEET; THENCE NORTHWESTERLY ON A CURVE TO THE RIGHT WHOSE RADIAL CENTER BEARS NORTH 13°44'55" WEST, 30.00 FEET, AN ARC DISTANCE OF 45.16 FEET TO THE INTERSECTION OF A LINE 4.00 FEET NORTHEASTERLY OF AND PARALLEL WITH THE NORTHEASTERLY MARGIN OF 1 ST WAY SOUTH; THENCE NORTHWESTERLY ALONG SAID PARALLEL LINE ON A CURVE TO THE LEFT WHOSE RADIAL CENTER BEARS SOUTH 72°30'01" WEST, 1254.00 FEET, AN ARC DISTANCE OF 257.58 FEET TO THE NORTHERLY LINE OF SAID PARCEL 1 AND THE TERMINUS OF THIS LINE DESCRIPTION. yll PROMISSORY NOTE $2,385,000.00 (Date) FOR V ALUE RECEIVED, Acrobat Financial Services, LLC ("Purchaser") promises to pay to City of Federal Way, a municipal corporation, the sum of Two Million Three Hundred Eighty- five Thousand Dollars ($2,385,000.00), as the balance due and owing for the purchase of real property legally described in Exhibit A attached to a certain Real Estate Purchase and Sale Agreement dated January 5, 2005, between the Purchaser, and City of Federal Way, as Seller (" Agreement"). This note is secured by a Deed of Trust of even date and shall bear a five percent (5%) penalty and interest at the rate of eighteen percent (18%) or the maximum rate allowed by law which ever is less, stating on June 1,2005, until such time the amount is paid in full. This note shall mature on May 31, 2005. lfthis note shall be placed in the hands of an attorney for collection, the Purchaser promises to pay reasonable attorney's fees in addition thereto, or if suit shall be brought to collect any of the principal or interest of this note, the Purchaser promises to pay such sum as a court may adjudge to be a reasonable attorney's fee in such suit. This note is made and executed under, and is to be construed by, the laws of the State of Washington. ACROBAT FINANCIAL SERVICES, LLc. By: Printed Name: Title: K:\city hall\sale of 1 st way s\prom note -Pl'ò UNCONDITIONAL GUARANTY THIS GUARANTY is made this day of February, 2005, by PATRICK W. RHODES and SHANNON RHODES ("Guarantors") to and for the benefit of THE CITY OF FEDERAL WAY, a municipal corporation ("City") . BACKGROUND A. ACROBAT FINANCIAL SERVICES, LLC the ("Buyer") has entered into a Purchase and Sale Agreement for the purchase of real property commonly known as 33530 1st Way South in the amount of TWO MILLION SIX HUNDRED FIFTY AND NO/IOO DOLLARS ($2,650,00.00) (the "Purchase"). The Purchase will be evidenced by a Promissory Note of Two Hundred Sixty-five Thousand Dollars ($265,000.00) (the "Note") and will be secured by a Deed of Trust (the "Deed of Trust") encumbering real property and improvements commonly known as 33530 1st Way South, Federal Way, King County, Washington. The Guarantors acknowledge that they have had an opportunity to review the Note, Deed of Trust and related documents (the Note, Deed of Trust and other documents evidencing or securing the Purchase are sometimes collectively referred to as the" Purchase Documents"), and is otherwise fully familiar with the terms of the Loan. B. Guarantors are either financially interested in Buyer or will receive other benefits as a result of Guarantors' promise. Guarantors sign this Agreement as an inducement to and as consideration for City selling the real property to Buyer. NOW, THEREFORE, in order to induce City to make said sale, Guarantors agree as follows: 1. UNCONDITIONAL GUARANTY OF PAYMENT. Guarantors unconditionally, absolutely and irrevocably guarantee the due and punctual payment of the principal and interest under the Promissory Note and Deed of Trust and any other money due or which may become due under the Purchase Documents, whether according to the present terms of any of those documents or at any earlier or accelerated date or dates as provided therein, or pursuant to any extension of time, or to any change or changes in the terms, covenants and conditions of those documents hereafter made or granted. 2. GUARANTY OF PERFORMANCE. Guarantors further unconditionally, absolutely and irrevocably guarantee the due and punctual performance of the Purchase Documents, whether according to the present terms of any of those documents or at any earlier or accelerated date or dates as provided therein, or pursuant to any extension of time, or to any change or changes in the terms, covenants and conditions of those documents hereafter made or granted. - I - ---c1 q 3. WAIVERS BY GUARANTORS AND RIGHTS OF CITY. It is the intention that Guarantors shall remain unconditionally liable for payment of all sums that may become due under the Purchase Documents regardless of any act or omission which might otherwise operate as a legal or equitable defense to discharge the Buyer or any guarantors in whole or part. Therefore, Guarantors hereby waive the following and City may do any of the following things as many times as City wishes, without Guarantors' permission and without notifying Guarantors, and this will not affect Guarantors' promise to pay City the amounts that become due under the Promissory Note and Deed of Trust and other Purchase Documents: a. City does not have to notify Guarantors of City's acceptance of this Unconditional Guaranty; b. City may extend, renew, accelerate or otherwise change the time for payment of any of the Buyer's obligations; c. Ci ty may make any other changes Documents which Buyer approves; in its Purchase d. Ci ty may release Buyer, any guarantors or anyone else against whom City may have the right to collect amounts that may become due under the Purchase Documents; e. City may apply such collateral and direct order or manner of sale thereof as City deems reasonable; the f. City may apply any money or collateral received from or on behalf of Buyer to the repayment of any obligations due to City in any order City determines; g. City may release, surrender, substitute, take additional, or exchange, any collateral City now holds or may later acquire as security for Buyer's or Guarantors' obligations; h. City may forbear from pursuing Buyer or from foreclosing or otherwise realizing upon any security interest or other guaranty; 1. limited to, collateral; City may impair any collateral, including, but not failure to perfect a security interest in any j . City may sell collateral in any manner it sees fit, and except to the extent the collateral secures this Guaranty, is not required to notify Guarantors of a sale of the collateral, nor is City obligated to Guarantors to sell the collateral in a commercially reasonable manner. At any sale of the collateral only the net proceeds after deduction of all charges and expenses of every kind shall be applied in reduction of the outstanding purchase price and City shall not be required to institute proceedings to recover any deficiency. At any such - 2 - -niÆ sale, City may at its discretion purchase all or part of such collateral, and may apply against the amount bid an equal amount out of the balance due to City; k. Guarantors hereby waive any defense arising out of the absence, impairment, or loss of any or all rights of recourse, reimbursement, contribution, subrogation or any other right or remedy of Guarantors against Buyer or any other party or collateral to collect amounts which Guarantors are obligated to pay under this Guaranty; 1. Guarantors hereby waive any defenses arising by reason of any invalidity, ineffectiveness or unenforceability of all or any portion of the Purchase Documents or on the basis of any other defense available to Buyer (other than full payment in cash); and m. Guarantors waive diligence, demand for performance, notice of non-performance, presentment, protest, notice of dishonor, and indulgences and notices of every other kind. 4. CITY'S RIGHT NOT GUARANTORS OR COLLATERAL. TO PROCEED AGAINST BUYER, OTHER This Guaranty may be enforced against Guarantors without attempting to collect or without exhausting its efforts to collect from Buyer, any co-maker, any other guarantors, anyone else who is liable for Buyer's obligations, and without attempting or exhausting its rights to enforce City's rights in any collateral. Without limiting the foregoing, City may foreclose judicially or nonjudicially on the Deed of Trust, may sue on the Note or may take any other action authorized under the Purchase Documents or law. In each case, City shall have the right to exercise its remedies in such order as it elects and may join Guarantors in any suit on the Purchase Documents or can proceed against Guarantors in a separate proceeding. In case of suit, sale or foreclosure, only the net proceeds therefrom, after deducting all charges and expenses of any kind and nature whatsoever, shall be applied to the reduction of the amount due on the Purchase Documents and City shall not be required to institute or prosecute proceedings to recover any deficiency as a condition of payment under or enforcement of this Guaranty. 5. BANKRUPTCY AND ASSIGNMENT OF RIGHTS. Guarantors agree that their obligation to make payment under the terms of this Guaranty shall not be impaired, modified, changed, released or limited in any manner by any impairment, modification, change, release, defense or limitation of the liability of Buyer or of a receiver, trustee, debtor in possession or estate under any bankruptcy or receivership proceeding. If any payment made by the Buyer is reclaimed in a bankruptcy or receivership proceeding, the Guarantors shall pay to City the - 3 - -TI 7..) dollar amount of the amount reclaimed. Guarantors further assign as security to City all rights Guarantors may have against Buyer in any proceeding under the u.s. Bankruptcy Code or any receivership or insolvency proceedings. This assignment includes all rights of Guarantors to be paid by Buyer even though they have nothing to do with this Agreement. This assignment does not prevent City from enforcing Guarantors' promise in any way. 6 . GUARANTORS' DUTY TO GUARANTORS' FINANCIAL CONDITION. KEEP INFORMED OF BUYER'S AND Guarantors are now adequately informed of Buyer's financial condition, and Guarantors agree to keep so informed. City does not have to provide Guarantors with any present or future information concerning the financial condition of the Buyer or any other guarantors, and changes in Buyer's or Guarantors' financial condition shall not affect Guarantors' promise. Guarantors have not relied on financial information furnished by City, nor will they do so in the future. 7. INDEMNITY REGARDING HAZARDOUS SUBSTANCES. Buyer has made various representations in the Deed of Trust with respect to "Hazardous Substances II (as defined in the Deed of Trust) . Buyer has further agreed to defend, hold harmless and indemnify City against various matters identified in the Deed of Trust concerning Hazardous Substances. Those indemnities will survive payment of the Note and satisfaction of the Note through foreclosure or otherwise and will survive payment or satisfaction of Guarantors' other obligations under this Guaranty. 8. WAIVER OF RIGHT OF SUBROGATION. Until all Indebtedness of Buyer to the City has been paid in full, Guarantors shall have no right of subrogation, and during such time waive any right to enforce any remedy which City now has or may hereafter have against Buyer, and during such time waive any benefit of, and any right to participate in any security now or hereafter held by City. 9. SUBORDINATION OF DEBT OF BUYER TO GUARANTORS. Any indebtedness of Buyer now or hereafter held by Guarantors is hereby subordinated to the indebtedness of Buyer to City, and such indebtedness of Buyer to Guarantors, if City has served notice on Buyer of an event or condition which if uncured becomes an Event of Default under the Purchase Documents, shall be collected, enforced and received by Guarantors as trustee for City and be paid over to City on account of the indebtedness of Buyer to it, but without reduction or affecting in any manner the liability of Guarantors under the other provisions of this Guaranty. - 4 - /)Z-Î~ 10. ATTORNEYS' FEES AND COLLECTION EXPENSES. Guarantors agree to pay reasonable attorneys' fees and all other costs and expenses which City may incur in. enforcing or defending this Guaranty, whether or not a lawsuit is started. These costs and attorney fees include those incurred at trial, on appeal, and with respect to bankruptcy or receivership proceedings. 11. PAYMENT OF LOAN; EFFECT OF BANKRUPTCY. This Guaranty shall terminate upon payment in full of the principal and interest of the Note and any other charges provided for in the Note, Deed of Trust or other Purchase Documents i provided, however, it shall be automatically reinstated if any payment is reclaimed in a bankruptcy or receivership proceeding, until Guarantors pay City the amount reclaimed or the amount is otherwise paid to City and is not subject to further reclamation. 12. MISCELLANEOUS. (a) Guarantors agree that this Guaranty shall inure to the benefit of and may be enforced by City and any subsequent holder of the Note and related Purchase Documents, and this Guaranty shall be binding upon and enforceable against the Guarantors, their heirs, legal representatives, successors and assigns. City may, without notice, assign this Guaranty in whole or in part. (b) Unless some other meaning and intent is apparent from the context, the plural shall include the singular and vice versa, and masculine, feminine and neuter words shall be used interchangeably. (c) This Guaranty shall be construed according to the laws of the State of Washington. The undersigned Guarantors consent to the jurisdiction of the courts of the State of Washington. 13. WHOLE AGREEMENT. This Agreement constitutes the entire understanding between City and Guarantors and no course of prior dealing between the parties, no usage of trade, and no parole or extrinsic evidence of any nature shall be used to supplement or modify any terms, nor are there any conditions to the full effectiveness of this Agreement. 14. INVALID PROVISIONS. If any provision of this Guaranty is invalid, illegal or unenforceable, such provision shall be considered severed from the rest of this Guaranty and the remaining provisions shall continue in full force and effect as if the invalid provision had not been - 5 - ---cJZ3 included. This Guaranty may be changed, modified or supplemented only through a writing signed by the Guarantors and City. 15. COUNTERPARTS. This Unconditional Guaranty can be executed in counterpart originals. This Guaranty shall be binding on each person IS signing a counterpart of this Guaranty even though everyone listed in the Guaranty does not agree to the Guaranty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atrick W. Rhodes Shannon Rhodes K,\city hall\Sale of 1st way S\guaranty - two - 6 - ) 7 ~y WHEN RECORDED RETURN TO: City of Federal Way - Law Dept. P.O. Box 9718 Federal Way, Way, WA. 98063 @ Chicago TIde Insurance Company 701 5th Avenue, Suite 1700, Seattle, Washington 98104 LPB No. 22 Deed of Trust (For Use in the State of Washington Only) THIS DEED OF TRUST, made this - day of , 2005, between Acrobat Financial Services, LLC , GRANTOR, whose address is 31620 23'd Avenue South, Federal Way, Washington 98003, CHICAGO TITLE INSURANCE COMPANY, a corporation, TRUSTEE, whose address is 1700 Columbia Center, 701 Fifth Avenue, Seattle, Washington 98104 and City of Federal Way, a municipal corporation, BENEFICIARY, whose address is P.O. Box 9718, Federal Way, Washington 98063. WITNESSETH: Grantor hereby bargains, sells and conveys to Trustee in Trust, with power of sale, the following described real property in the City of Federal Way, King County, Washington: PORTION OF PARCELS I AND 2 OF SHORT PLAT NUMBER 878144, ACCORDING TO THE SHORT PLAT RECORDED UNDER RECORDING NUMBER 7812081138, RECORDS OF KING COUNTY, WASHINGTON. WITH THE EXCEPTION OF: BEGINNING AT THE INTERSECTION OF THE EASTERLY LINE OF SAID PARCEL 2 WITH A LINE 12.00 FEET NORTHWESTERLY OF AND PARALLEL WITH THE NORTHWESTERLY MARGIN OF SOUTH 336TH STREET; THENCE SOUTH 76°15'05" WEST ALONG SAID PARALLEL LINE, 195.69 FEET; THENCE NORTHWESTERLY ON A CURVE TO THE RIGHT WHOSE RADIAL CENTER BEARS NORTH 13°44'55" WEST, 30.00 FEET, AN ARC DISTANCE OF 45.16 FEET TO THE INTERSECTION OF A LINE 4.00 FEET NORTHEASTERLY OF AND PARALLEL WITH THE NORTHEASTERLY MARGIN OF 1sT WAY SOUTH; THENCE NORTHWESTERLY ALONG SAID PARALLEL LINE ON A CURVE TO THE LEFT WHOSE RADIAL CENTER BEARS SOUTH 72°30'01" WEST, 1254.00 FEET, AN ARC DISTANCE OF 257.58 FEET TO THE NORTHERLY LINE OF SAID PARCEL I AND THE TERMINUS OF THIS LINE DESCRIPTION. Tax Account Number: 926500-0360 which real property is not used principally for agricultural or fanning purposes, together with all the tenements, hereditaments, and appurtenances now or hereafter thereunto belonging or in any wise appertaining, and the rents, issues and profits thereof. This deed is for the purpose of securing perfonnance of each agreement of grantor herein contained, and payment of the sum of($2,385,OOO.OO). Two Million Three Hundred Eightv-five Thousand Dollars with interest, in accordance with the tenns of a promissory note of even date herewith, payable to Beneficiary or order, and made by Grantor, and all renewals, modifications and extensions thereof, and also such further sums as may be advanced or loaned by Beneficiary to Grantor, or any of their successors or assigns, together with interest thereon at such rate as shall be agreed upon. To protect the security of this Deed of Trust, Grantor covenants and agrees: I. To keep the property in good condition and repair: to permit no waste thereof; to complete any building, structure or improvement being built or about to be built thereon; to restore promptly any building, structure or improvement thereon which may be damaged or destroyed; and to comply with all laws, ordinances, regulations. covenants, conditions and restrictions affecting the property. 2. To pay before delinquent all lawful taxes and assessments upon the property; to keep the property free and clear of all other charges, liens or encumbrances impairing the security of this Deed of Trust. vZc; 3. To keep all buildings now or hereafter erected on the property described herein continuously insured against loss by fire or other hazards in an amount not less than the total debt secured by this Deed of Trust. All policies shall be held by the Beneficiary, and be in such companies as the Beneficiary may approve and have loss payable first to the Beneficiary, as its interest may appear, and then to the Grantor. The amount collected under any insurance policy may be applied upon any indebtedness hereby secured in such order as the Beneficiary shall determine. Such application by the Beneficiary shall not cause discontinuance of any proceedings to foreclose this Deed of Trust. In the event of foreclosure, all rights of the Grantor in insurance policies then in force shall pass to the purchaser at the foreclosure sale. 4. To defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of title search and attorney's fees in a reasonable amount, in any such action or proceeding, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 5. To pay all costs, fees and expenses in connection with this Deed of Trust, including the expenses of the Trustee incurred in enforcing the obligation secured hereby and Trustee's and attorney's fees actually incurred, as provided by statute. 6. Should Grantor fail to pay when due any taxes, assessments, insurance premiums, liens, encumbrances or other charges against the property hereinabove described, Beneficiary may pay the same, and the amount so paid, with interest at the rate set forth in the note secured hereby, shall be added to and become a part of the debt secured in this Deed of Trust. IT IS MUTUALLY AGREED THAT: I. In the event any portion of the property is taken or damaged in an eminent domain proceeding, the entire amount of the. award or such portion as may be necessary to fully satisfy the obligation secured hereby, shall be paid to Beneficiary to be applied to said obligation. 2. By accepting payment of any sum secured hereby after its due date, Beneficiary does not waive its right to require prompt payment when due of all other sums so secured or to declare default for failure to so pay. 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 perfonnance 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 distributed to the persons entitled thereto. 5. Trustee shall deliver to the purchaser at the sale its deed, without warranty, which shall convey to the purchaser the interest in the property which 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. 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. Printed Name: Title: STATE OF WASHINGTON STATE OF WASHINGTON ) ss. ss. COUNTY OF COUNTY OF On this day of - before me, the undersigned, a notary public in and for the State of Washington, duly commissioned and sworn, personally appeared I certify that I know or have satisfactory evidence that is the person who appeared before me, and said person acknowledged that - signed this instrument, on oath stated that - was authorized to execute the instrument and acknowledged it as of to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Dated: known to me to be the individual(s) described in and who executed the within instrument and acknowledged that - signed and sealed the same as - free and voluntary act and deed, for the uses and purposes herein mentioned. Printed Name: Notary Public in and for the State of Washington Residing at My appointment expires Printed Name: Notary Public in and for the State of Washington Residing at My-appointment expires f)2~ REQUEST FOR FULL RECONVEYANCE Do not record. To be used only when note has been paid. TO: TRUSTEE, The undersigned is the legal owner and holder of the note and all other indebtedness secured by the within Deed of Trust. Said note, together with all other indebtedness secured by said Deed of Trust, has been fully paid and satisfied, and you are hereby requested and directed, on payment to you of any sums owing to you under the terms of said Deed of Trust, to cancel said note above mentioned, and all other evidences of indebtedness secured by said Deed of Trust delivered to you herewith, together with the said Deed of Trust, and to reconvey, without warranty, to the parties designated by the terms of said Deed of Trust, all the estate now held by you thereunder. Dated: V¿l MEETING DATE: February 1,2005 ITEM# JZL(á. -) CITY OF FEDERAL WAY City Council AGENDA BILL SUBJECT: ARTS COMMISSION APPOINTMENTS CATEGORY: BUDGET IMPACT: 0 0 ¡g¡ CONSENT RESOLUTION CITY COUNCIL BUSINESS 0 ORDINANCE 0 PUBLIC HEARING 0 OTHER Amount Budgeted: Expenditure Amt.: Contingency Req'd: $ $ $ ATTACHMENTS: none SUMMARY/BACKGROUND: At a special meeting on February 1,2005, the City Council will interview applicants to fill three 3-year terms, as well as one 2-year and one I-year unexpired terms on the city's Arts Commission. None of the commissioners whose terms are expiring have reapplied. There are no alternates on the commission at this time. The Council will confirm their new appointments during that evening's regular meeting. CITY COUNCIL COMMITTEE RECOMMENDATION: none PROPOSED MOTION: I hereby move the appointment ofthe following persons to the city's Arts Commission: Three 3-year terms expiring December 31,2007 - One 2-year unexpired term ending December 31,2006 - One I-year unexpired term ending December 31,2005 - (The City Clerk will arrange for introductions and presentation of the appointment certificates for the new appointees at the February 15th regular meeting) c;~~ MA~~GER APPRO V A~:~ (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: 0 APPROVED 0 DENIED 0 T ABLEDIDEFERREDfNO ACTION 0 MOVED TO SECOND READING (ordinances only) COUNCIL BILL # 1ST d. rea lUg Enactment reading ORDINANCE # RESOLUTION # REVISED - 05/10/2001 MEETING DATE: February 1,2005 ITEM# YI_(£) CITY OF FEDERAL WAY City Council AGENDA BILL SUBJECT: HUMAN SERVICES COMMISSION APPOINTMENTS CATEGORY: BUDGET IMPACT: 0 CONSENT 0 RESOLUTION ¡g¡ CITY COUNCIL BUSINESS 0 ORDINANCE 0 PUBLIC HEARING 0 OTHER Amount Budgeted: Expenditure Amt.: Contingency Req'd: $ $ $ ATTACHMENTS: none SUMMARY/BACKGROUND: At a special meeting on February 1,2005, the City Council will interview applicants to fill three 3-year terms on the city's Human Services Commission. One of the commissioners whose term expires has reapplied, and the two alternates have both applied for voting positions. The Council will confirm their new appointments during that evening's regular meeting. CITY COUNCIL COMMITTEE RECOMMENDATION: none PROPOSED MOTION: I hereby move the appointment of the following persons to the city's Human Services Comm ission: Three 3-year terms expiring January 31, 2008 - (The City Clerk will arrange for introductions and presentation of the appointment certificates for the new appointees at the February 15th regular meeting) CITY MANAGER APPROVAL: (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: 0 APPROVED 0 DENIED 0 TABLED/DEFERREDfNO ACTION 0 MOVED TO SECOND READING (ordinances only) COUNCIL BILL # ST I' reading Enactment reading ORDINANCE # RESOLUTION # REVISED - 05/10/2001