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Home My WebLink About01/06/2010 AGENDA � ' � � � :� ��• CITY COUNCIL 345 6� Street, Suite 600, Bremerton, WA 98337 ❑ Phone (360) 473-5280 ***AMENDED(Final)*** JANUARY 6, 2010 CITY COUNCIL MEETING AGENDA 1. SWEARING- IN CEREMONY 3:30 PM in CHAMBERS LOCATED ON FIRST FLOOR 2. BR�. F�ING.: 5:00 — 5:30 P.M. in COUNCIL CONFERENCE ROOM 603 A: ' General Council Business 3. C�,�L TO ORDER: 5:30 P.M. in FIRST F�OOR CHAMBERS A: Pledge of Allegiance B. Invocation 4. C ,�„U�NC�L., OFFICER, ELEC �NS 5. AI�AY,.O,.F�S„RE,�O� 6. P E OGNI I T 7. CON�S T A�IF ,�1, A. Claims & ChecK Register � B. Minutes of Meeting — December 16, 2009 C. Appointment of Christopher Warthen to the Parks 8� Recreation Commission D. Reappointments of Terry Boyle and Richard Nerf to the Parks 8� Recreation Commission E. Approval of Property Insurance through AFFi��aTEO FM INSURatvCE for 2010 F. ; Pulled until January 20... 8. EXEGUTIVE SESSION — 20-Minute Executive Session to discuss a"Real Estate Acquisition" per RCW 42.30.110(1)(b); and "Potential Litigation" per RCW 42.30.110(1)(i) VI/'�th action 9. U 1 S A. Pu�chase` of�Real Property located at 190 Pacific Avenue for development of the 1 g and Pacific Plaza 10. C 11. I 12. �� y ,�Y, 3 ,S,�,�,Q�— The Council will reconvene in COUNCIL CONFERENCE ROOM 603 for a briefing by�the 2010 Council President; and to discuss "General Council Business" �Americans with Disabili6es Act (ADA) accommodations provided upon iequest. Those iequiring special accommodafions should contact the City Cle►k's Ofice at (360) 473-5323 by noon on the Monday p�eceding the Council meeting. ��►o�� COUNCIL MEETING SPEAKERS LIST PLEASE PRINT YOUR NAME BELOW IF YOU WISIT YOUR COMMENTS TO BE INCLUDED IN THE RECORD . d vt� r �c � � � /� C cir l�e��1�✓L �'L ��` \ � �� ' � ��.� ��-d �- REQUESTS FOR INFORMATION MUST BE SUBMITTED IN WRITING TO THE CLERK THANK YOU JANUARY 6, 2010 BALLOT FOR COUNCIL PRESIDENT/MAYOR PRO-TEMPORE , � NAME OF NOMINEE: � r � I� w��'��Q ❑ NAME OF NOMINEE: l�a �/ �4 ti y G^� ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: �7� O��C� JI McDONALD COUNCIL DISTRICT NO. 1 JANUARY 6, 2010 BALLOT FOR COUNCIL PRESIDENT/MAYOR PRO-TEMPORE .; NAME OF NOMINEE: ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: � � CECIL McCONNELL OUNCIL DISTRICT NO. 2 JANUARY 6, 2010 BALLOT FOR COUNCIL PRESIDENT/MAYOR PRO-TEMPORE , NAME OF NOMINEE: �V ,`c << �Q ��a�� ❑ NAME OF NOMINEE: � ❑ NAME OF NOMINEE: - ❑ NAME OF NOMINEE: � ADAM BROCKUS COUNCIL DISTRICT NO. 3 JANUARY 6, 2010 BALLOT FOR COUNCIL PRESIDENT/MAYOR PRO-TEMPORE ❑ NAME OF NOMINEE: ��` G� �`� �� NAME OF NOMINEE: �� ~ �� a� ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: ROY R ON COUNCIL DISTRICT NO. 4 JANUARY 6, 2010 BALLOT FOR COUNCIL PRESIDENT/MAYOR PRO-TEMPORE �" NAME OF NOMINEE: � C� W O�_ ��7 R� � ❑ NAME OF NOMINEE: � O� ��l `-� O i�I ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: �l GRE HEELER COUNCIL DISTRICT NO. 5 JANUARY 6, 2010 BALLOT FOR COUNCIL PRESIDENT/MAYOR PRO-TEMPORE NAME OF NOMINEE: � �iv �� l ��' NAME OF NOMINEE: D �l� ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: � c ` , DIANNE ROBI SON COUNCIL DISTRICT NO. 6 JANUARY 6, 2010 � BALLOT FOR COUNCIL PRESIDENT/MAYOR PRO-TEMPORE - . , � NAME OF NOMINEE: � ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: CAROL ARENDS COUNCIL DISTRICT NO. 7 JANUARY 6, 2010 BALLOT FOR COUNCIL PRESIDENT/MAYOR PRO-TEMPORE � NAME OF NOMINEE: N 1�K �a�� ❑ NAME OF NOMINEE: � �v � � � ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: . WILL MAUPIN COU IL DISTRICT NO. 8 JANUARY 6, 2010 BALLOT FOR COUNCIL PRESIDENT/MAYOR PRO-TEMPORE , � NAME OF NOMINEE: /y� G��-��,� , ❑ NAME OF NOMINEE: ��a� �2��„ ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: rr� N WOFF COUNCIL DISTRICT NO. 9 JANUARY 6, 2010 BALLOT FOR COUNCIL VICE-PRESIDENT , � NAME OF NOMINEE: � i �� q�P'r ❑ NAME OF NOMINEE: �1-s�r /Q-� l "� �� ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: � � �►� 6 '�'� � JI McDONALD COUNCIL DISTRICT NO. 1 JANUARY 6, 2010 BALLOT FOR COUNCIL VICE-PRESIDENT k �` � NAME OF NOMINEE: � � ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: , � .� G CECIL McCONNELL COUNCIL DISTRICT NO. 2 JANUARY 6, 2010 BALLOT FOR COUNCIL VICE-PRESIDENT ❑ NAME OF NOMINEE: � i (� � � � P '�^ '�` NAME OF NOMINEE: J� �� .� n e ��,�s 6� ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: -� . ADAM BROCKUS COUNCIL DISTRICT NO. 3 JANUARY 6, 2010 BALLOT FOR COUNCIL VICE-PRESIDENT ❑ NAME OF NOMINEE: �' � `l �� NAME OF NOMINEE: ��`a � � -e ��`� ❑ NAME OF NOMINEE: � ❑ NAME OF NOMINEE: ROY RU ON COUNCIL DISTRICT NO. 4 JANUARY 6, 2010 BALLOT FOR COUNCIL VICE-PRESIDENT ❑ NAME OF NOMINEE: �I � �- �-- M�� I� NAME OF NOMINEE: � I�� , R �� I� S 0 � ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: �� GR WHEELER COUNCIL DISTRICT NO. 5 JANUARY 6, 2010 BALLOT FOR COUNCIL VICE-PRESIDENT � �1/ � 1�1Ali�IE OF leTOl�INEE. i� , NAME OF NOMINEE: G�iu'� � ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: , � � � � DIANNE ROBINS COUNCIL DISTRICT NO. 6 JANUARY 6, 2010 BALLOT FOR COUNCIL VICE-PRESIDENT . , � NAME OF NOMINEE: ��-� ❑ NAME OF NOMINEE: � � �'� � � ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: � .�� f�� CAROL ARENDS COUNCIL DISTRICT NO. 7 JANUARY 6, 2010 BALLOT FOR COUNCIL VICE-PRESIDENT f� NAME OF NOMINEE: � t LL �A�PI I� ❑ NAME OF NOMINEE: �i ��V�I� �C781 NS� 1� ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: . WILL MAUPIN CO NCIL DISTRICT NO. 8 JANUARY 6, 2010 BALLOT FOR COUN�CIL VICE—PRESIDENT _ i � NAME OF NOMINEE: �v�/ /��u�� ❑ NAME OF NOMINEE: /.�i�i�- ��r��s.i/ ❑ NAME OF NOMINEE: ❑ NAME OF NOMINEE: NICK FFO OUNCIL DISTRICT NO. 9 DATE SUBMITTED: 1 /6/2010 � , AGENDA BILL CITY OF BREMERTON CITY COUNCIL ........................................................................................ SUBJECT: Committee Meeting Date: COUNCIL MEETING Date January 6 , 2010 Claims & Check Register Department: Financial Services Presenter: Cathy Johnson Phone: 473-5296 SUMMARY: Consent Agenda item. Approval of checks and electronic fund transfers. ATTACHMENTS: Check Register. FISCAL IMPACTS (Include Budgeted Amount): APPROVALS: DEPARTMENT DIRECTOR: CITY ATTORNEY: FINANCE DIRECTOR: MAYOR: COMMITTEE CHAIR COUNCIL PRESIDENT: CONSENT AGENDA � GENERAL BUSINESS ❑ PUBLIC HEARING ❑ RECOMMENDED MOTION: 1) Check #'s 335270 through 335504 and EFT's 9421 through 9464 in the amount of $1,291,908.62. 2) Regular Payroll for the pay period ending December 15, 2009 in the amount of $761,048.19. 3) Regulaz Payroll for the pay period ending December 31, 2009 in the amount of $783,928.65. 4) Retiree Payroll for the pay period ending December 31, 2009 in the amount of $78,887.77. COUNCIL ACTION: � Approve ❑ Deny ❑ Table ❑ Continue Q No Action , f_):\ l�l: �1;13Mf1'"l�l:i�: :1GENDA BII.L CITY OF BREMER"(�ON CITY COUNCIL .......................................................................................� SUBJECT: City Council Mceting Minutcs Committec Mectin3 Date: N/A f01' Il1Ct;t111� Of C'OUNCIL �1E[:TINC� Datr: �ntcQ u�, �olo Dcpartn�ent: City Cou�cil D��er �(p� o2o0q Presenter: Cecil McConnell Council President Phc�ne: (360) 473-5280 SUN[MARY: Attached is a summary of the City Councii Meetin� IZeld D�� 6/ aao� ATTACHMENTS: Meeting Minutes for �� f �6' �.oa Q FISCAL IMPACTS (Include Budgeted Amount): N/A APPROVALS: DEPARTMENT DIRECTOR: Council President CITY ATTORNEY: N/A FINANCE DIRECTOR: N/A MAYOR: N/A COMMITTEE CHAIR N/A COUNCIL PRESIDENT: Y ,�� , `� ` �-.-,,, �� CONSENT AGENDA � GENERAL BUSINESS ❑ PUBL[C HEARING ❑ RF.COMMENDED N10TION: Move to approve the Consent A�encla as prescnte�i. ('OUNCIL ACTION: ❑ Approve ❑ Deny ❑ 1'able � ��011t1tlUt ❑ No Action DIGITAL RECORDING CITY COUNCIL MEETING MINUTES Wednesday, December 16, 2009 The weekly meeting of the City Council of the City of Bremerton was calied to order Wednesday, December 16, 2009, at 5:00 PM in Council Conference Room 603 of the NORM DicKs GOVERNMENT CENTER 345 6 Street, Bremerton, Washington, with Counci� President Cecil McConnell presiding. Council Members present were Nick Wofford, Will Maupin, Carol Arends, Roy Runyon, Adam Brockus, and Brad Gehring. Council Members Mike Shepherd and Dianne Robinson were absent. Also present were City Attorney Roger Lubovich, City Clerk Carol Etgen, and Legislative Assistant Lori Smith. A COUNCIL BRIEFING was held to discuss General Council Business and at 5:30 PM the meeting moved to the First Floor Meeting Chambers. The Pledge of Allegiance was led by Council Member Brad Gehrinq followed by the invocation provided by Reverend Debbie Little of First Christian Church. President McConnell thanked all of the Pastors who have provided invocation for Council business meetings during 2009 and for prior years. This contribution from the community is appreciated. MAYOR'S REPORT • Mayor Patty Lent acknowledged the blessing that is provided prior to Council meetings; • Provided the hightights of several recent events she attended; • Read a letter from the Bremerton School District Security Department thanking several Bremerton City Police Officers for collaborating on the apprehension of a criminal; • Congratulated City employees and Pam Bykonen of Community Development for a successful United Way campaign; • Announced that there will be an Open House on January 11 to kick off the update to the Shoreline Master Program; • Wished the community Happy Holidays; and � • Looked forward to working with the employees in the coming year. PUBLIC RECOGNITION Jeff Elevado from the City's Parks & Recreation Department invited the Council and the public to "Santa in the Park" on Monday, December 21 at Evergreen Park from 10:00 AM to Noon and at the Manette Playfield from 1:00 to 3:00 PM; and on Tuesday, December 22 from 10:00 AM to Noon at Lions Park and at the Kitsap Conference Center Plaza from 1:00 to 3:00 PM. Dave Rubie representing "Citizens for Good Schools" invited the community to attend a meeting on January 4 to discuss the proposed school levy as well as rallies on January 6 and 22; and provided a sign-up sheet for anyone interested in joining their efforts. Tim Henkel and several other representatives with "Friends of Evergreen Park" invited the Council and local residents to attend a Neighborhood Design Review Board Meeting on Sunday, January 10 at 1:00 PM at Samudra's Yoga Studio on McKenzie Avenue near Evergreen Park. CONSENT AGENDA A. Check Numbers 335059 through 335269; and EFT-9385 through EFT-9420 in the amount of $2,549,671.63; and Regular Payroll in the amount of $771,658.80 for the pay period ending November 30, 2009 B. Minutes of Meeting — December 2, 2009 C. Minutes of Study Session — December 9, 2009 D. Agreement with K�TSAP HuMAtvE SOC�ETY for Animal Control Services City Council Reg. Mtg. Minutes Wednesday, December 16, 2009 Page 2 of 7 E. ��r,,;,.o� I 1(` fnr D�rLinn �tlfr+rnomon4 Cor�iinoc Moved to General Business... � F. Ordinance No. 5100 establishing a Cable Television Franchise Agreement with WAVE DiviSiotv IV, LLC G. Intergovernmental Cooperative Purchasing Agreement with Washington State Office of Procurement H. Award Contract to MICHELS CORPORATION for Construction of "Cambrian Avenue Sewer Repair" Project I. Amendment to Professional Services Agreement with PARAMETRix, Itvc. for Construction Support of the "Gorst Sewerage" Project J. Amendment to State Revolving Fund Loan Agreements for the "Gorst Sewerage and Septic System AbandonmenY' Project K. Amendment to extend the Gold Mountain Golf Club "Greens Superintendent Professional Services Agreement" Wlth ED FAULK OPERATIONS LLC to December 31, 2010 L. Amendment to extend the term of the Gold Mountain Golf Club "Golf Management Agreement" Wlth SCOTT ALEXANDER'S GOLF SHOP INC. by one-year to December 31, 2010 M. Amendment to extend the Gold Mountain Golf Club "Pro Shop, Driving Range, and Cart Pad Lease AgreemenY' Wlth SCOTT ALEXANDER'S GOLF SHOP INC. by one-year to December 31, 2010 N. Amendment to extend the Gold Mountain Golf Club "Food and Beverage AgreemenY' with SCOTT ALEXANDER'S GOLF SHOP INC. for one additional year to December 31 2010 05:47:00 M/S/C/U (Arends/Maupin) Move to approve the CoNSENT AGENOa as presented, with the issue relating to 'Diamond Parking' becoming Item 6A. GENERAL BUSINESS 6A — APPROVAL OF SECOND AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT �"JITH DIAMOND PARKING SERVICES LLC FOR PARKING ENFORCEMENT SERVICES: City Clerk Carol Etqen explained that the contract with Diamond Parking for general parking enforcement services expires on December 31, 2009. It is proposed that the agreement be extended on a month-by-month basis for six months to allow for a full analysis of the parking review study. The proposed agreement is for the same base management rate of $18,689 per month with an incentive fee of two percent (2%) also carried forward. City Attorney Roqer Lubovich reiterated that the City is currently conducting a Parking Review Study. Todd Best asked the Council to reconsider the amendment to the Professional Services Agreement with DIAMOND PARKING SERVICES LLC for Parking Enforcement Services; and encouraged Council to form a citizen advisory committee to come up with solutions to parking problems. Gary Saulsberrv does not think that the City needs Diamond Parking to enforce the parking of its residents. Terry Enners expressed concerns over enforcement practices on Summit Avenue; and hoped neighborhoods would solve the problem themselves by petitioning for exemption from enforcement and the unreasonable two-hour rule. City Council Reg. Mtg. Minutes Wednesday, December 16, 2009 Page3of7 AndY Graham believed that parking rates in Bremerton are high for the area, especially when compared to Seattle; and found it interesting that Diamond Parking controls a high number of parking lots in Bremerton which seems to be a conflict of interest. Brent Warner commented that the system needs to be fixed so that people are not ticketed multiple times in one day, especially in front of their own homes. Tim Henkel stated that in order to avoid tickets he has to prove ownership of rental property on Highland Avenue just to obtain a parking permit to take care of needed maintenance. Katherine Schmidt emphasized that Diamond Parking could improve its relationship with residents by instructing them of proper parking practices rather than cause residents to continually waste time in the courts. 06:00:15 The Main Motion was made and seconded, as discussion began by the Council... Will Maupin agreed with the comments made by the citizens and emphasized these are some of the reasons why the City is conducting a parking study. Rov Runvon asked for a scope of the outline of the proposed study. Finance Director Andv Parks stated that the study will include observation of conditions in residential and downtown areas, and to consider what the appropriate next steps may be which will factor in public input later in the year. Carol Arends commented that this is a temporary measure so that the City can address the long standing parking conflicts created by the Navy that impact nearby neighborhoods. Adam Brockus was supportive of short term extension; and believed it would be difficult to put parking enforcement in the hands of the police since there are fewer officers available. Nick Wofford was pleased to see citizens volunteering their time to serve on a committee to study this issue; and hoped that residents from various neighborhoods could be represented in the process to develop solutions. Cecil McConnell stated that he has been on the Council for a long time and parking has always been a major issue yet no solution has been found; and hoped that this problem may finally be solved next year. 06:07:05 M/S/C/U (Maupin/Wofford) Move to approve the second amendment to the Professional Services Agreement with DIAMOND PARKING SERVICES LLC for parking enforcement services; and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. 66 — PROFESSIONAL SERVICES AGREEMENT WITH LORAX PARTNERS, INC. FOR DESIGN, MANAGEMENT. AND MARKETING OF_"_PARK AVENUE PLAZA GARAGE" PROJECT Gary Sexton Redevelopment Projects Administrator, stated that this item is a Professional Services Agreement with LORAX PARTNERS INC. for architectural, engineering, project management, and marketing for Park Avenue Plaza parking structure, plaza design, and retail marketing. Tl�ere were no questions or comments from the public.. . 06:19:00 The Main Mofion was made and seconded ... 06:19:27 An Amendment was made and seconded, as discussion on the amendment began by tl�e Council... City Council Reg. Mtg. Minutes Wednesday, December 16, 2009 Page 4 of 7 Adam Brockus emphasized that a"bonus" is only to be paid for good work. Will Maupin supported the proposed amendment. Nick Wofford summarized that the change would give the Council discretion to continue or discontinue the agreement. Brad Gehrinq believed that the firm should meet the requirements of the contract and no changes are needed. Rov Runyon encouraged the use of an incentive program either in this agreement or to consider that at a later time. Cecil McConnell asked if other cities use a scale for setting "upper limits" for contracts. Gary Sexton answered that broad language was used and that particular provisions were not discussed; and added that contract language is discretionary which may be decided by Council. Mr. Runvon clarified that if additional work requires a change in the contract, that amendment may be brought before Council. Carol Arends did not suppo�t changes to the contract. 06:31:15 A-M/S/C (Runyon/Gehring) Move to amend the Professional Services Agreement between City of Bremerton and LoRAx PaRTNERS, INC. for Design, Management, and Marketing of Park Avenue Plaza by removing the third paragraph, page 6 of 9. Voted in favor of Amendment: Runyon, Wofford, Gehring, McConnell Voted opposed to Amendment: Arends, Maupin, Brockus Amendment approved: 4-Yes; 3-No Council returned to discussion on the Main Motion... Adam Brockus asked if this action will increase taxes. Garv Sexton replied no. Brad Gehrinq raised concerns about not having a letter of intent. Garv Sexton stated that there is potential for the site but not having the use defined allows for some flexibility. Will Maupin believed that this is an excellent location for a parking garage; and asked if Mr. Sexton would have any ideas on how to manage the conflict between shipyard workers and other temporary uses. Garv Sexton responded that the City could address those issues either during construction or after completion of parking garage. Carol Arends emphasized that the Conference Center garage is a clear example of how parking works but acknowledged that additional parking is needed. Rov Runvon believed that there is an adequate supply for parking in the downtown and wondered if additional parking at the garage will reduce revenue; and was concerned about proceeding with design when no development agreement is in place. Brad Gehrinq asked for clarification on DCPM. Garv Sexton answered that DCPM is a reference to project manager. Cecil McConnell expressed concerns about project costs. City Council Reg. Mtg. Minutes Wednesday, December 16, 2009 Page 5 of 7 06:57:30 M/S/C (Arends/Brockus) Move that the City approve the Professional Services Agreement with LORAX PARTNERS Itvc; and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as amended. Voted in favor of Motion: Arends, Maupin, Wofford, Gehring, Brockus, Runyon Voted opposed to Motion: McConneil Motion carried: 6-Yes; 1-No � 6C — DESIGN/BUILD AGREEMENT WITH DILLON WORKS! FOR CUSTOM SCULPTURE AT 4 STREET 8 PACIFIC AVENUE: Garv Sexton, Redevelopment Projects Administrator, summarized that Di��oN WoRKS! will design, engineer, fabricate, deliver, and install a pair of custom sculptures on opposite corners of 4"' & Pacific Avenue. The sculptures are approximately 14 feet tall and depict a whimsical fish catching a fisherman. Di��otv WoRKS! will provide all design, labor, materials, and equipment necessary to complete the project. Carlos Jara asked if the money has to be used for art or can it be used for other things? Garv Sexton stated that the money has been appropriated for a very specific purpose, infrastructure, streets, sidewalks, and art work. 07:19:25 The Main Motion was made and seconded, as discussion began by the Council... Nick Wofford asked for more information on the selection process and if any local artists applied. Andrea Spencer explained that several projects including sculptures and banners to be placed between Evergreen Park and downtown are funded by the 1% for the Arts Program which did include local artists. Rov Runvon suggested bike lanes and awnings for store fronts downtown instead of sculptures. Will Maupin believed that more traditional artwork is more appropriate for the location. 07:27:00 An Amendment was made and seconded, as discussion on the amendment began by the Council... Adam Brockus, Rov Runvon, Nick Wofford did not support changes to the concept for the sculpture. Cecil McConnell, Carol Arends, Brad Gehrinq agreed with Mr. Maupin's comments in support of traditional art and what fits culturally downtown. 07:30:00 A-M/S/C (Maupin/Gehring) Move to amend agenda bill to include 'fisherman catching a fish'. Voted in favor of Amendment: Maupin, Gehring, Arends, McConnell Voted opposed to Amendment: Wofford, Brockus, Runyon Amendment approved: 4-Yes; 3-No Council returned to discussion on the Main Motion... Brad Gehrincl offered comments in support of the project. Rov Runvon believed that the funds could be used in other ways. Cecil McConnell expressed concerns about the amount of money being used for this project; and suggested that the funding be returned to the State. 07:38:25 M/S/C (Arends/Brockus) Move that the City approve the design/build agreement with Di��o►v WoRKS! for the custom sculptures at 4"' & Pacific Avenue; and authorize the Mayor to City Council Reg. Mtg. Minutes Wednesday, December 16, 2009 Page 6 of 7 finalize and execute the agreement with substantially the same terms and conditions as presented. Voted in favor of Motion: Wofford, Gehring, Brockus, Arends, Maupin Voted opposed to Motion: Runyon, McConnell Motion carried: 5-Yes; 2-No 6D — ORDINANCE NO. 5101 TO AMEND ORDINANCE NO. 5071 WHICH ADOPTED THE FISCAL YEAR 2009 BUDGET, AND ORDINANCE NO. 5079 WHICH AMENDED THE FISCAL YEAR 2009 BUDGET: Andv Parks, Financial Services Director, explained that the Bremerton City Council adopted the 2009 Annual City Budget by Ordinance No. 5071 on December 17, 2008. On April 1, 2009, the City Council adopted Ordinance No. 5079, amending Ordinance No. 5071 to reduce appropriations due to reduced revenue. Subsequently, certain actions have been taken and conditions changed since the budget adoption and amended budget adjustment which had an impact on the City's 2009 Budget, resulting in a need to amend the 2009 Budget. There were no questions or comments from the public... 07:39:57 The Main Motion was made and seconded, as discussion began by the Council... Rov Runvon asked if amending the budget is a common practice. Caroline Tompson responded that additional appropriations are accounted for at year-end through a budget adjustment. 07:40:45 M/S/C/U (Runyon/Brockus) Move to approve Ordinance No. 5101 amending Ordinance No. 5071, which adopted the Fiscal Year 2009 Budget and Ordinance No. 5079 which amended the Fiscal Year 2009 Budget. COUNCIL MEMBER REPORTS Nick Wofford thanked Cecil McConnell for his service this past year as Council President and as short term Mayor Pro Tem; and wished everyone a Merry Christmas and Happy New Year. Will Maupin thanked Brad Gehring for his past 6 years of service as a Council Member. Carol Arends echoed previous remarks for Cecil McConnell and Brad Gehring; and welcomed Cecil back to Council. She also reported on her attendance at the Kitsap Transit Board and Emergency Management meetings; and looked forward to new assignments in 2010. Ro Run on announced that there will be meals offered on Christmas at The Salvation Army at 832 6 Street from Noon to 2:00 PM; dinner will be served on Christmas Eve at Coffee Oasis at 822 Burwell Street; and dinner will be served on Christmas Day at the Coffee Club Diner from 1:00 to 6:00 PM at 417 Park Avenue. He also thanked Brad for his service to the citizens. Adam Brockus was pleased to hear good reports about Winter Fest; and also thanked Brad for his service and wished him well in the future. Cecil McConnell presented a plaque to Brad Gehrinq in recognition of his 6 years of service as a Council Member for the City of Bremerton; President McConnell then thanked City Attorney Roger Lubovich for carrying him through the past 5 plus months as Mayor Pro Tempore; and wished everyone a Merry Christmas and Happy Hannukah, as well as a Happy New Year. With no further business, President McConnell adjourned the Council Meeting at 7:50 PM. City Council Reg. Mtg. Minutes Wednesday, December 16, 2009 Page 7 of 7 Prepared and Submitted by: , � - L RI SMITH Legisiative Assistant /��.v17"�.y..:- �f`,�,�,�.,.u�. CHRISTINE GRENIER Council Assistant Attest: CAROL ETGEN, City Clerk CECIL McCONNELL, City Council President CM:CE:Is:cg [)n"I�l� SUl3Ml'f'I�F.D: Uecembcr 18. 2009 AGENDA BILL �� - Cl'rY OF BREMERTON CI"I'Y COUNCII, .......................................................................................� SUBJECT: nppointment to the Parks & Committee Meeting Date: - Recreation Cammission COUNCIL MEETING Date: fGn(,�,_�{ru 6� �o►D Department: Executive� Presenter: Mayor Lent Phone: 473-5266 SUMMARY: There is a vacancy on the Parks and Recreation Commission due to resignation of Wanda Butler. It is recommended the vaeancy be tilled by Christopher Warthen. ATTACHMENTS: Application for appointment available in the Mayor's office. FISCAL IMPACTS (Include Budgeted Amount): APPROVALS: DEPARTMENT DIRECTOR: CITY ATTORNEY: FINANCE DIRECTOR: MAYOR: COMMITTEE CHAIR COUNCIL PRESIDENT: �-�� ' �,,�,,, ,,�,� CONSENT AGENDA L�.=�2�r-.�� GENERAL BUSINESS ❑ PUBLIC HEARING ❑ RECOMMENDED MOTION: Move to contirm the appointment of Christopher Warthen to the Parks and Recrcation Commission. COUNCIL ACTION: ❑ Approve ❑ Deny ❑ Table ❑ Continue ❑ No Action I)/�"(�E �liL3N11'I��I�L•:U: Occembcr 18, �009 � f1GF,NDA 13ILL � CI"I'Y Ol�' I3RLML:R"I�UN CI'I'Y COUNCIL .......................................................................................� SUI3JF..CT: Rrappointments to the Parks & Committee Meeting Date: . Recreation Cummission COUNCIL MEETING Date: f h ��,��a. o � p Department: EYecutive Presenter: Mayor Lent Phone: 473-5266 SUMMAItY: The terms of Parks and Recreation Commissioners Terry Boyle and Richard Nerf have expired. It is recommended they be reappointed to another term. ATTACHMENTS: Applications for reappointment available in the Mayor's office. FISCAL IMPACTS (Include Budgeted Amount): APPROVALS: DEPARTMENT DIRECTOR: CITY ATTORNEY: FINANCE DIRECTOR: MAYOR: � COMMITTEE CHAIR COUNCIL PRESIDENT: ��,,,,��, `� ��.-,..,.. CONSENT AGENDA GENERAL BUSINESS ❑ PUBLIC HEARING ❑ RECOMiVIENDED MOT[Ol�: Move to confirm the reappointments of Terry I3oyle and Richard Nerf to the Parks and Recreation Commission. COUNC[L ACTION: ❑ Approve ❑ Deny ❑ Table ❑ Continue ❑ No nction [)�1"I�L SUBMI'I°I'I�D: I)rcembcr 1=1. 2009 AGENDA BILL �� CITY OF BRENIERTON CITY COUNCIL .......................................................................................� SL)BJFCT: 2010 Property lnsurance Committee Meeting Date: Dec. 16, 2009 (Finance Committee) COUNCIL MEE1'ING Date: January 6, 2010 Department: City Attorney's Office Presenter: Roger Lubovich and Thelma Swem Phone: 473-2345 SUMMARY: The Bremerton Municipal Code authorizes the Risk Management Specialist, with the approval of the City Attorney, to bind property insurance coverage on City assets and requires City Council approval for the continuation of the bound coverage. Property insurance coverage for 2010 has been bound with Affiliated FM Insurance. The annual premium for 2010 is $211,836. Coverage is subject to a$100,000 deductible for most losses and a$50,000 deductible for boiler and machinery losses. Earthquake and flood insurance is only provided for the Wastewater Treatment Plant, the Harborside Conference Center, the Harborside Sculptures and Fountains and PSNS Memorial Plaza ATTACHMENTS: Insurance Binder FISCAL IMPACTS (Include Budgeted Amount): Sufficient funds have been budgeted in the Risk � Management Fund for this expenditure for 2010. APPROVALS: DEPARTMENT DIRECTOR: CITY ATTORNEY: ____--- FINANCE DIRECTOR: MAYOR: COMMITTEE CHAIR / COUNCIL PRESIDENT: / � r CONSENT AGENDA � GENERAL BUSINESS ❑ : PUBLIC HEARING ❑ tZECOMMENDED MOTION: Move to approve the continuation of the property insurance bound by Affiliated FM Insurance for 2010. COUNCIL ACTION: ❑ Approve ❑ Deny ❑ Table ❑ Continue ❑ No Action . � Affili��d F�I INSURANCE BINDER for City of Bremerton P o l icy No. TT330 To: Janet Coombs ��t: �Villis Insurancc Scrviccs of Scattic, lnc Fax No.: 206-356-7960 Prom: Pctcr 1 Sundncs Datc: 14 Dcc 3009 Pagcs: S A. POI.ICY 'TER'1�I: December 31, 2009 to December 3 I, 2010 B. NAMED INS JRF.D: City of Bremerton, and its wholly or majority owned subsidiaries and any interest which may now exist or hereinafter be crcated or acquired �vhich are owned, controlled or operated by any one or more of those named insureds. C. POL.ICY L.IMIT: This company's liability will not exceed the respective Sub-Limits of Liability shown elsewhere for the coverages involved. However, in no event will the company's totat Limit of Liability exceed $100,000,000 as a result of any one occurrence, regardless of the number of perils, coverages or locations involved. D. INSURAN . . PROVID .D: All risks of direct physical loss or damage, as defined and limited herein, on Real Property, Personal Property, Business Interruption, including the Extensions of Coverage applying at the following described locations: As per vehicle and equipment list on file dated 9/14/09 and property schedule on file dated 09/10/2009 Excluding the Casad Dam and Watershed Bridges E. SUB-L.IMIT�: Unless otherwise stated below, the following sub-limits of liability will apply on a per occurrence basis for all coverages provided, and are part of, not in addition to, the above limit(s) of liability. For Annual Aggregate sub-limits the policy year will begin at the inception date of this policy and be concurrent with the anniversary dates of this policy. 1. $56,000,000 Earth Movement (Annual Aggregate, for all coverages provided) 2. $56,000,000 Flood (Annual Aggregate, for all coverages provided) 3. $1,000,000 Extra Expense -- The Company will pay the greater of the sub-limit or 15% of the reported annual Business [nterruption values. 4. $1,000,000 Business [nterruption 5. $1,000,000 Vchicles and Contractors Equipment - as described m Items 4& 5, Section H, Special Terms and Conditions 6. $253,857 Docks, Picrs, and Wharvcs 7. $25,000 1930 White Fire Engine - Model 61 VIN# 171 186 Page 1 of 8 ,�•.�.•� ----. _ Affiliated Fl� F. F.Y'T�NSIC)NS OF COVER�GE (F.001 SliB-LI1�111'S: "1'hc follo�ving sub-limits of liab�l�ty will apply on a per occurrcncc basis for all co��cragcs pro��idcd, unlcss othcr�visc stutcd bclow, und arc part of flOI 111 1l�CI1t1011 f0 lI1C abovc linut(s) of liaUil�ty. Por Annual :�ggregate sub-limits thc policy ycar �� ill begm at the inccption date uf this pohcy and bc roncurrent �vith the unnivcrsary datcs of this policy. All Risk - Extensions of Covera�e Sub-Limits: I. $100,000 Firc Fighting Matcrials and Expcnses 2. S 100,000 Profcssional Fccs 3. 5250,000 Expeditmg Expenses 4. �100,000 Trees, Shrubs, Plants and Lawns not to exceed a limit of $1,000 per item 5. $250,000 Pavements and Roadways 6. �50,000 Land and Water Clean Up Expense (Annual Aggregate, for all coverages provided) 7. $250,000 Installation Floater 8. $5,000,000 Newly Acquired Property 9. $1,000,000 Unnamed Locations Coverage 10. $3,200,000 Fine Arts 1 l. $1,000,000 Accounts Receivable 12. $1,000,000 Valuable Papers and Records 13. $1,000,000 Electronic Data Processing, Data and Media 14. Demolition and Increased Cost of Construction Policy Limit Item A: Undamaged Portion $5,000,000 [tem B: Demolition Included in 14b Item C: Compliance with the Law Included in 14b Item D: Business [nterruption 15. $1,000,000 Errors and Omissions 16. $500,000 Transit l7. Terrorism Coverage and the Supplemental United States Certified Act of Terrorism Endorsement $100,000 A. United States Certified Act of Terrorism coverage Not Covered B. Terrorism Coverage for Locations Outside of the United States (Annual Aggregate, for all coverages provided) 1 S. $1,000,000 Fungus, Mold or Mildew 19. $100,000 Deferred Payment 20. $1,000,000 Off-Premises Serv�ce [nterruption - Property Damage 21. $100,000 Arson or Theft Reward 22. $100,000 Money and Securities 23. $100,000 Locks and Keys 24. $100,000 Tenants Legal Liability and Expense 25. $100,000 Soft Costs Business Interruation - Extensions of Coveraee Sub-Limits: A. 365 Days of Ordinary Payroll B. 30 Days of Civil Authority C. $I,000,000 Off-Premises Service (nten•uphon D. 5250,000 Contingent Business Interruption E. �250,OOU Research and Deveiopmcnt Expense F. 5250,000 ingress/Egress G. $100,000 Tax Trcatment H. 30 Days of Extcndcd Pcriod of indcmnity The above E,Ktensions of Coverage sub-limits of liability �vill be the maximum payable for property damage and business intcrruption (if appl�cablc) resulting from such property damagc, or any combination thcrcof. With respcct to itcros A. and N. the numbcr of days is part of and not in cxccss to any othcr outstanding sub-I�mits of li�bility. Page 2 of 8 .�---°----_ A�filiat�d fl� As respccts thc Unitcd Statcs of Amcrira, rts tcmtorics and posscssions, thc Distnct of Columbia, thc Commomvcalth of Puerto Rico, the U. S. Virgin Islands; and Canada, Sect�on D. Extens�ons of Coverage Item 9. Unnamed Locahons and Section C. Add�tional Coverage Item d. Property Removed from Dcscnbed Lucahons are extended to Section D. Extcnsion of Covcra�;c Itcm 17. "I'crrorism ��ith a sub-I�mit of liability of S I OO,OUO (:lnnual Agbrcgatc for all co�•cragcs pro�•idcd) for Property Damagc and [3usmcss Intcrruption (if providcd) combmcd. Also a 5100,000 Flood sub-limrt of liability (if providcd) (Annuai nggrcgatc for all covcragcs providcd) for Property Damagc and E3usincss Intcrruption (if providcd) combincd applics to Scction D. Ertcnsion of Covcragc itcm 17. Tcrronsm. [3oth of thcsc sub-limits of liabihty applymg to the Extcnsion of Covcragc ltcm 17. Tcrronsm do not apply to thc Supplcmcntal Umted Statcs Certified Acts of Terrorism Endorsement. These limits shall not include the Actual Cash Valuc pornon of firc damage caused by Terrorism. G. DEDUCTIBL.E ANIOtJNT: The following deductible amounts shall apply per occurrence for loss or damage under this policy in the respective loss categories indicated: 1. Earth Movement (per occurrence for all coverages provided): For each occurrence, this company will not be liable for loss or damage to insured property unless the amount of loss or damage exceeds 3% of the combined value of property at the location where loss or damage occurs, in accordance with the valuation section of this policy and annual business interruption value as defined in the Business Interruption Endorsement attached to this policy at the time such loss or damage at the location where loss occurs, subject to a minimum deductible amount of $100,000 per location. If coverage is provided for more than one location, this deductible percentage or minimum deductible amount will be calculated for and applied separately to each location. 2. $100,000 Earth Movement Sprinkler Leakage - for loss or damage due to water or other substance discharged from any part of fire protection equipment caused by or resulting from Earth Movement (per occurrence for all coverages provided). 3. $100,000 Flood (per occurrence for each location for all coverages provided). 4. $50,000 Boiler and Machinery. 5. Off Premises Service Interruption Qualifying Period: In the event of loss or damage covered by this policy, no coverage is provided unless the service interruption exceeds 24 hours beginning from the time of loss or damage covered by this policy. If the service interruption exceeds 24 hours, the loss will be calculated from the time of loss or damage covered by this pol�cy, subject to the policy dcductible. 6. Electronie Data Processing Equipment, Data and Media Deduct�ble: In the cvent of loss or damage to Electronic Data Processmg (EDP) Equipment, Data and Media insured by this policy causcd by thc malicious mtroduction of a machinc code or instruction, no covcragc is providcd unlcss thc period of interrupt�on cxcceds �38 hours begmning from the time of insured loss. "I'he company's li�bility commences only after, and does not include, the Wa�hng Period spccitied. If the period of interruphon exceeds -i8 hours, the msured loss w�ll be calculated bascd upon the amount of insured loss in excess of the Waitm�; Period and subject to u combined dedu�t�ble for all covcrages of S 100,000 per location. Pagc 3 of 8 _ Affiliat�d f�l :�ny perrod in �� hich busincss operatiuns or scn�iccs �vould ha��c not becn maintaincd, or any penod m which goods �vould ha�•c not bccn produccd will not bc includcd as part of or scrvc to rcducc thc cffcct of any Waiting Pcriod. 7. 5100,000 All Othcr Losscs. H. SPECIAL. TERMS AND CONDITION�: l. S�ecific Earth 1�iovement Exclusion Covcrage provided by Section C., Addihonal Coverage, Item I. Earth Movement: only applies to any property situuted at the follo�ving location(s): Location Sewage Trcatment Plant, 1600 Oyster Bay Avenue, Bremerton, WA, 98337 Harborside Conference Center, 100 Washington Avenue, Bremerton, WA, 98337 Harborside Scuiptures/Fountains, 21 I 1 st Street, Bremerton, WA, 98337 PSNS Memorial Plaza - Fountains including Pump Room, Metal Art, Stone Art, Trees/Plants/Irregation/Specialty Lighting, South Carolina Bow, Rivet heater Statue & Plaques, Furnishings, Pavers & Curved Security Walls, 201 Pacific Avenue, Bremerton, WA, 98337 2. Specific Flood Exclusion Coverage provided by Section C., Additional Coverage, Item 2, Flood: only applies to any property situated at the following location(s): Location Sewage Treatment Plant, 1600 Oyster Bay Avenue, Bremerton, WA, 98337 Harborside Conference Center, 100 Washington Avenue, Bremerton, WA, 98337 Harborside Sculptures/Fountains, 211 ist Street, Bremerton, WA, 98337 PSNS Memorial Plaza - Fountains including Pump Room, Meta) Art, Stone Art, Trees/Plants/Irregation/Specialty Lighting, South Carolina Bow, Rivet heater Statue & Plaques, Furnishings, Pavers & Curved Security Walis, 201 Pacific Avenue, Bremerton, WA, 98337 3. Transmission and Distribution Svstems Exclusion Scction E., Property Exctuded, is amended to include: Transmission and distr�bution systems, including poles, towers and fixtures, overhead conductors and deviccs, underground or underwater conduit, underground or underwater conductors and deviccs, Ime transformers, service metcrs, street lighting and signal systems. Pagc 4 of 8 : � ffilia�erl f�l 4. 1lotor Vchicle Coveraee at the Insured's Prc►nises Th�s policy is cxtcndcd to co� cr: a. Motor �•chicics; b. 'rrucks; and c. Trailcrs; Liccnscd for highway use. This policy does not covcr loss or damagc resulting from: 1) Collision; or 2) Ovcrtum; While such motor vehicles, trucks, and trailers are being operated under their own power; or being towed (whether or not in motion at the time of loss). Section E., Property Excluded, Item 7., is amended to: 7. Motor vehicles licensed for highway use or owned by officers and employees of the Insured except while at a described location. 5. Actual Cash Value Valuation T'he following paragraph shown in the General Conditions section, G. 14. Basis of Valuation, Adjustment of loss amount(s) under this policy will be determined based on the cost of repairing or replacing (whichever is the lesser), at the time of loss, with materials or equipment of like kind and quality without deduction for depreciation, except as provided in this valuation section. Is amended to: Adjustment of loss amount(s) under this policy will be determined based on the actual cash value at the time of loss, except as provided in this valuation section. The words "actual cash value" shown elsewhere in this valuation section is substituted wherever the word(s) "replacement cost" are shown. This applies only to Item H-4 above, Motor Vehicle Coveraee at the Insured's Premises. Pagc 5 of 8 _ Affiliated Fl� 6. Contractors' Eauiament "I�his policy is cxtcndcd to co��cr Contractors' Gquipmcnt consishng of thc fuliu�ving: Dcscription Manufacturcr Scrial Numbcr l.imit of liabihtv As listcd on the City of [3remcrton Vehicle Invcntory �atcd 9/14/2009. Actual Cash Value Valuation The following p�ragraph shown in the General Conditions section, G. Basis of Valuation; Adjustment of loss amount(s) under this policy will be determined based on the cost of repairmg or replacing (�vhichever is the lesser), at thc time of loss, with materials or equipment of like kind and quahty without deduchon for depreciation, except as provided �n th�s valuation section. is amended to: Adjustment of loss amount (s) under this policy will be determined based on the actual cash value at the time of loss. The words "actual cash value" are substituted wherever the word(s) "replacement cost" are shown. � Applying to Contractors' Equipment. 7. Docks. Piers, and Wharves Covera�e This policy is extended to cover docks, piers, and wharves. section E., Property Excluded, [tem 3. is deleted. 8. Reservoir Coveraee � This policy is ertended to cover reservoirs. Coverage provided by this extension does not include the water contamed in such reservoirs. Item 2, Section E, Property Excluded, of Form No PRO AR 3100, is amended to read: 2. Bridges and tunnels used for vchicular traffic, canals, and dams. 9. Additionai Named Insured The following is (are) named as Additional Named Insured(s) on property descnbed below, as their interest may appear: Additional Named Insured Location/[nterest K�tsap Transit Harborsidc Confcrcncc Ccnter 60 Washington Avenue 100 Washington Avenue [3rcmcrton, WA �)8337 [3rcmcrton, WA 98337 P�ge 6 of 8 _ Affili�ted fM 10. Extended Terrorism Co��eraee Endorsement Section F. Perils Exciuded, Croup 1. Item 2. f. is amended to: f. Trrrorism, including action takcn to prc��cnt, dcfcnd agamst, respond to or rctaliatc against Tcrronsm or suspcctcd Tcrrorism, cxccpt to thc crtcnt pro��idcd m Scction D, Extcnsions of Covcr.igc, 17. 'fcrrorism. Elo�vcvcr, if dircct loss or damagc by tirc results from any of thcsc acts (unlcss commrttcd by or on bchalf of thc msured), then this Policy covcrs only to the extent the Actual Cash Value of the resulting direct loss or dama�;e by fire to property insured. This coverage excephon for such resulting fire loss or damagc docs not apply to any coverage provided in any Eiusiness Interruption Endorsement, if any, �vhich may be a part of this Policy, or any extension of such coverage, or to any other covcrages provided by this Policy. Any act which satisfies the definition of Terronsm prov�ded in Section H, Definitions, or in any Terrorism Endorsement to this policy, shail not be considered to be vandalism, malicious mischief, riot, c�v�l commotion, or any other risk of physical loss or damage which may be covered elsewhere in this Policy. If any act which satisfies the definition of Terrorism provided in Section H, Definitions, or in any Terrorism Endorsement to this policy, also comes within the terms of the hostile or warlike action exclusion of this Policy in Section F, Group [, 2.a., the hostile or warlike action exclusion applies in place of this exclusion. If any act excluded herein involves nuclear reaction, nuclear radiation or radioactive contamination, this exclusion applies in place of the nuclear hazard exclusion of this Policy, Section F, Group [, 1. 1 l. ContinEent Business Interruption Coverase Territorv Coverage provided in Section 5., Extensions of Coverage, Item D. Contingent Business Interruption Coverage, �s limited to property anywhere in the world except in the following countries, provinces or jurisdictions; Afghanistan, Albania, Algeria, Angola, Armenia, Azerbaijan, Bangladesh, Belize, Benin, Botswana, Burkina Faso, Burundi, Cambodia, Cameroon, Central African Republic, Chad, Cote D'Ivoire, Cuba, Democratic Repubhc of the Congo (former Zaire), Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Fiji, Gabon, Gambia, Georgia, Ghana, Grenada, Guinea, Guinea-Bissau, Guyana, Haiti, India (State of Jammu and Kashmir), Iran, Iraq, Israel (Gaza Strip, West Bank and territories north of Latitude 32.80 N), Laos, Lebanon, Lesotho, Liberia, L�bya, Madagascar, Malawi, Mali, Mauritania, Mauritius, Moldova, Mongolia, Montenegro, Montserrat, Mozambique, Myanmar, Namibia, Nepal, Niger, Nigeria, North Korea, Pakistan, Papua New Guinea, People's Republic of China (Aksa� Chin region and Trans-Karakoram Tract), Republic of the Congo, Russian Federation (Chechen Republic), Rwanda, Senegal, Serbia, Seychelles, Sierra Leone, Somalia, Sri Lanka, Sudan, Swaziland, Syria, Tajikistan, Tanzania, Timor-Leste, Togo, Turkey (Provinces of Agri, Bingol, Bitlis, Diyarbakir, Elazig, Hakkari, Mardin, Mus, Siirt, Urfa and Van), Turkmenistan, Uganda, Uzbekistan, Yemen, Zambia and Zimbabwe. 12. United States Certified Act of Terrorism 2008 As respects the United States, its territories and possessions and the Commonwcalth of Puerto Rico, the detimtion of Terrorism contained in Section H. DEFINITIONS is declared null and void and it is agreed that an event defined as a Certified Act of Terrorism under the terms of the SUPPLEMENTAL UNITED STATE5 CERTIFIED ACT OF TERRORISM ENDORSEMENT attached to this policy shall be considered Terrorism within the terms of this policy. Notwithstandmg anything contained in this policy to the contrary, this policy provides coverage for direct physical loss or damagc to insurcd property and any resulting E3usiness Intcrruption loss, as provided in the policy, cuused by or resulting from a Certified Act of"I�crrorism only to the extent cuverage is providcd under the terms and condihons of thc SUPPLEMENTAL UNITED S"('A'CES CERTIFIED ACT OF'I'ERRORISM ENDORSEMENT attached to this policy. Any difference in limit between loss recoverable under the SUPPLEMENTAL UNlTED STATES CERTIFIED ACT OF TGRRORISM ENDORSEMENT ��nd this policy is not rccovcrablc undcr this pol�cy. Pa�;e 7 of 8 Affili�ted f�l I 3. Notice of Cancellation "I'hc timc rcquircd by thc Company for maihng or dclivcring nuticc of canccllution of this policy to thc F�rst Namcd Insurcd as sho��n in Itcm 17., Canccllation, shuwn m Scrtwn G., Gcncral Cond�tions, �s cxtcndcd from fi0 days to 90, cxccpt thc noticc for non-paymcnt of prcmium rcmains at tcn (10) days. I. jNDEX OF FORi�IS: Thc following forms arc made part of this policy: Title Form No. Edition Dcclarations S-1 PR03100 (I/08) All Risk Property Coverage PRO AR 3100 (I/07) Business Interruption Endorsement Gross Earnings/Rents/ PRO GE-EE 3200 (1/06) Extra Expense Washington Amendatory Endorsement Changes to Form PRO AR 3569 AR 3100 (1/07) 3100 Supplemental United States Certified Acts ofTerrorism Endorsement 7312 (1/08) Application of Policy to Date and Time Recognition PRO DTR 2400 (11/00) Total Annual Premium excluding the United States Certified Act of Terrorism coverage: $205,036 at 0.0% commission Engineering Fees: $6,800 at no commission. A��rlic.�kslc s�;rte tatir�, s�irei�.�nc�s xn�f fec� are rout inclt�tle�t iai 3}iis liin�iei•. t�rj�lic�<il�tt= �t.ete 1.GZC�, Sai� :in:l ('ee �r�iil I)e atd:_tet! h� tltr invnirc�. Any variations between this binder letter and Affiliated FM forms versus your application are not provided. This binder expires I/31/2010. Thank you for your business, and please call if you have any questions. Bcst Regards, Pete Sundnes, P.E. Production Underwriter Affiliated FM Insurance Company (425) 637-2386 ��cr..,�un�/j�c.� �i,��r /iHcu�clliu.COm Pagc 8 of 8 Page 1 of 2 Christine Grenier From: Christine Grenier on behalf of City Council Sent: Wednesday, December 16, 2009 1:01 PM To: City Council Subject: Property Insurance FYI Christine From: Thelma Swem Sent: Wednesday, December 16, 2009 11:17 AM To: City Council Subject: RE: Questions re: Properly Insurance The condo association provides property insurance for the NDGC. The member that purchases the policy is the Kitsap County Health District. I just received a copy of their recently renewed policy and am reviewing it to make sure that the City of Bremerton is properly covered. I can update Councilman Runyon, or the Council as whole (whichever you prefer) via a memo when my review is complete if you would like. Please let me know if you have any additional questions. Thank you. Thelma Swem, Paralegal Bremerton City Attorney's Office 345 6th Street, Suite 600 Bremerton, WA 98337 (360) 473-5302 (360) 473-5161 (fax) thelma.swem(cr�,ci.bremerton.wa.us ATTORNEY-CLIENT PRIVILEGED COMMUNICATION Th�s e-mail message and its attachments may contain confidential attomey work product and be subject to the attomey-cl�ent communication pnv�lege. It �s intended solely for the use of the individual named above. If you are not the mtended recipient, or the person responsible to deliver it to the intended recipient, you are hereby advised that any dissemination, disuibution or copy�ng of this commumcat�on �s prohibited if you have rece�ved this e-mail in error, please immediately notify the sender by reply e-mad and delete and/or destroy the original and all copies of the e-mail message. From: Christine Grenier On Behalf Of City Council Sent: Wednesday, December 16, 2009 10:43 AM To: Thelma Swem Subject: Questions re: Properly Insurance Hi Thelma, Would you have the answers to Roy's questions? Thanks, Christine From: Roy Runyon [mailto:d4bremerton@yahoo.com] Sent: Wednesday, December 16, 2009 4:40 AM 12/16/2009 � Page 2 of 2 To: City Council Subject: Re: Agenda Bill for 2010 Property Insurance Is our office condo in the NDGC covered under the proposed policy...I see no mention of it. Does the condo association provide property insurance coverage for the all tenants of the NDGC including the City? Roy --- On Tue, 12/15/09, City Council <City.Council@ci.bremerton.wa.us> wrote: From: City Council <City.Council@ci.bremerton.wa.us> Subject: Agenda Bill for 2010 Property Insurance To: "City Council" <City.Council@ci.bremerton.wa.us> Date: Tuesday, December 15, 2009, 9:39 PM Attn: Council Members & Council Member Elects: Attached is an agenda bill for "2010 Property Insurance" that requires a vote of Council at the January 6 Council Meeting. Because there will not be another Study Session prior to this meeting the item is attached now for your advanced review; and will also be presented at the Finance Committee tomorrow (December 16). This item is approved by the Council every year for the continuation of property insurance and sufficient funds have been budgeted with Risk Management for this expenditure in 2010 so it is proposed for the Consent Agenda on January 6. Thelma will be present at the Pre-Council Session that evening to answer any additional questions you might have, and you are of course free to contact her prior to that time. Thanks, Lori 12/16/2009 Page 1 of 2 Christine Grenier From: Christine Grenier on behaif of City Council Sent: Thursday, January 07, 2010 9:47 AM To: City Council Subject: Norm Dicks Gov't Center Insurance FYI Christine From: Thelma Swem Sent: Thursday, January 07, 2010 8:46 AM To: City Council Cc: Gary Nystul; Roger Lubovich Subject: Norm Dicks Gov't Center Insurance Hi Lori, At the Finance Committee meeting last month and in earlier emails, council members have expressed questions regarding the insurance for the Norm Dicks Government Center. Could you please pass the following on to the Council: The City insures its contents in the Norm Dicks Governments Center for $1,000,000 through its property coverage through Affiliated FM that was approved for purchase at the Jan. 6 Council meeting. The Norm Dicks Government Center is insured by Enduris Washington (formerly WGEP). The named insured on the policy is the Kitsap County Health District. The Condominium Declaration, tasks the owners association with procuring insurance for the building. The association may designate a trustee to act as attorney-in-fact for the purpose of purchasing and maintaining insurance. I have received Evidence of Coverage naming the Bremerton Condo Association and the City of Bremerton as additional insured under the comprehensive general liability coverage and the property coverage. The certificates are available in my office along with the memorandum of coverage for both liability and property coverage. The current limits on the policy are: Liability: $10,000,000 Property: $1,000,000,000 (with varying sublimits for particular coverages) 1 hope this answers Council's questions, however, I am available to discuss this further with anyone who has additional questions. Thank you. Thelma Swem, Risk Management Specialist Bremerton City Attorney's Office 345 6th Street, Suite 600 Bremerton, WA 98337 (360) 473-5302 (360) 473-5161 (fax) 1/7/2010 Page 2 of 2 thelina.swem�ci_.bremerton.wa.us :1'1'"PORNEY-CLIENT PRIVILEGED COMMUNICATION This c-mail messagc and rts attachments may contam confidenual attomey worl< pioduct and be sul�ect to the attorney-client communicauon privdege. It is mtended solely foi the use of the individual namecl above. lf you are not the mrended iecipient, o� [he peison iesponsible to dehvei rt to the mtended rec�pient, you are hereby ❑ch��sed that any dissemination, distribution or copymg of this commun�cation is piohibrted. If you have recerved this e-mail m error, please �mmediately notify the sender by ieply e-mail and delete and/or destroy the origmal and all cop�es ofthe e-mail message 1/7/2010 DATE SUBMITTED: January 6, 2009 AGENDA BILL CITY OF BREMERTON CITY COUNCIL s�� SUBJECT: Purchase of Real Property Committee Meeting Date: /U /,!� Located at 190 Pacific Avenue for COiJNCIL MEETING Date: January 6, 2009 Development of the l and Pacific Plaza Department: Legal Presenter: Roger Lubovich Phone: 360-473-2345 SUMMARY: Attached purchase and sale agreement presented to Council during Executive Session. ATTACHMENTS: Draft Purchase and Sale Agreement FISCAL IMPACTS (Include Budgeted Amount): APPROVALS: DEPARTMENT DIRECTOR: CITY ATTORNEY: FINANCE DIRECTOR: MAYOR: COMMITTEE CHAIR EXECIJTIVE_SESSION_ACTION, COUNCIL PRESIDENT: CONSENT AGENDA ❑ GENERAL BUSINES PUBLIC HEARING ❑ RECOMMENDED MOTION: Move to authorize the purchase of real property located at 190 Pacific Avenue for development of the 1 and Pacific Plaza and to authorize the Mayor to finalize and execute the Purchase and Sale Agreement with substantially the same terms and conditions as presented and further to execute any and all other documents necessary to complete the purchase of said property. , COUNCIL ACTION: � Approve ❑ Deny �❑ Table ❑ Continue ❑ No Action PURCHASE AND SALE, AGREEMENT between FEDERAL DEPOSIT INSURANCE CORPORATION, as RECEIVER for WESTSOUND BANK And Dated TABLE OF CONTENTS PURCHASE AND SALE AGREEMENT (IMPROVED PROPERTl� (CASH SALE) Section 1. Sale and Purchase .....................................................................................................1 Section 2. Purchase Price; Earnest Money ................................................................................1 Section 3. Title Commitment; Survey .......................................................................................2 Section 4. Representations and Warranties ...............................................................................3 Section 5. Furnishing of Information; Feasibility Inspection Period; Condition to Closing. ...4 Section6. Closing . ....................................................................................................................6 Section7. Notices ....................................................................................................................10 Section8. Commissions ..........................................................................................................1 l Section9. Assigns . ..................................................................................................................11 Section10. Governing Law .......................................................................................................12 Section11. Remedies ................................................................................................................12 Section 12. Condemnation/Casualty .........................................................................................13 Section 13. Entire Agreement; Interpretation; Severability; Attorney's Fees; Counterpart; Memorandum of Agreement; Time is of the Essence ............................................15 Section 14. Disclaimer; Waiver/Release of Claims . .................................................................16 Section 15. Offer Only; Effective Date ....................................................................................21 ' Section 16. Conditioned Upon Committee Approval . ..............................................................22 Section 17. Prospective Lease(s); Reimbursement Period ........................................................22 Section 18. Prohibited Purchaser . .............................................................................................23 Section19. Confidentiality ........................................................................................................23 ii Exhibit "A" - Le�al Description Exhibit "B" - INTENTIONALLY DELETED Exhibit "C" - Furnished Documents Exhibit "D" - Purchaser Eligibilit,v Certification Exhibit "E" - Confidentiality A�reement Schedule "A" - List of Furnished Documents iii � PURCHASE AND SALE AGREEMENT (IMPROVED PROPERT� (CASH SALE) THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into between the FEDERAL DEPOSIT INSURANCE CORPORATION as Receiver for Westsound Bank ("Seller" or "FDIC") and ("Purchaser"). WITNESSETH: In consideration of the mutual covenants and agreements set forth herein, the parties hereto hereby agree as follows: Section 1. Sale and Purchase. Seller hereby agrees to sell, convey and assign to Purchaser without warranty [except as set forth in the Deed (hereinafter defined)] and Purchaser hereby agrees to purchase and accept from Seller, for the Purchase Price (hereinafter defined) and on and subject to the terms and conditions herein set forth: (a) that certain tract or parcel of land situated in Kitsap County, Bremerton, WA 98337, described in Exhibit "A" attached hereto and incorporated herein for all purposes, together with all rights and appurtenances pertaining thereto, including, but not limited to, any right, title and interest of Seller in and to adjacent streets, alleys or rights-of-way (the "Land"); and (b) all buildings and other improvements situated on the Land, together with all �xtures and other property attached thereto (hereinafter collectively called the "Improvements"). The Land and the Improvements are hereinafter collectively called the "Property". Section 2. Purchase Price; Earnest Monev. (a) The purchase price (the "Purchase Price") for which Seller agrees to sell and convey the Property to Purchaser, and which Purchaser agrees to pay to Seller, subject to the terms hereof, is the amount of NINE HUNDRED TEN THOUSAND AND NO/100 DOLLARS ($910,000.00), which shall be paid in the form of cash, a cashier's check, or certified funds at Closing (hereinafter defined). (b) Concurrently with the execution and delivery of this Agreement to Seller by Purchaser, an earnest money deposit in the amount of FORTY FIVE THOUSAND AND FIVE AND NO/100 DOLLARS ($45,500.00) (the "Earnest Money"), shall be separately delivered by Purchaser to Seller. The Earnest Money will be in the form of cash, a cashier's check, or certified funds payable to Seller. Purchase and Sale Agreement — Page 1 190 Pacific Ave — 1/06/10 FDIC as receiver for Westsound Bank The Earnest Money will NOT bear interest at any time. Upon execution of this Agreement by Purchaser, the Earnest Money shall be non-refundable, subject only to the conditions for refund set forth in this Agreement. If the sale hereunder is consummated in accordance with the terms hereof, the Earnest Money will be applied against the Purchase Price at Closing. In the event of default hereunder by Purchaser, the Earnest Money will be applied as provided in Section 1 l. Section 3. Title Commitment; Survev. (a) Within fifteen (15) days after the Effective Date (hereinafter defined in Section 15) of this Agreement, Seller shall deliver or cause to be delivered to Purchaser the following: [modify terms (1) commitment for title insurance (the "Title CommitmenY') from Title Company, addressed to Purchaser, covering the Property and binding the Title Company to issue to Purchaser at Closing a Washington Standard Form Owner Policy of Title Insurance (the "Title Policy") in the amount of the Purchase Price, with such Title Commitment setting forth the status of the title of the Property and showing all liens, claims, encumbrances, easements, rights-of-way, encroachments, reservations, restrictions and any other matters of record affecting the Property. The Title Commitment shall provide that the survey exception may be modified in the Title Policy, at Purchaser's sole cost and expense, to except "shortages in area" only; (2) a true and legible copy of all recorded documents referred to in the Title Commitment as exceptions to title to the Property; and (3) Seller's most current and certified boundary survey, if any exists in Seller's possession, of the Property (the "Survey"), containing the information and meeting the requirements of the Survey Instructions, if any, attached hereto as Exhibit "B" and incorporated herein for all purposes. The legal description of the Property contained in the Survey, if (A) different from the description contained in Exhibit "A" hereto, and (B) approved by Seller in writing, may, in Seller's sole discretion, be substituted for the legal description of the Property contained in Exhibit "A", and this Agreement shall be deemed amended thereby, without the necessity of the parties hereto executing any further amendment to this Agreement. (b) Purchaser shall have five (5) days from the receipt of the information referred to in Section 3.(a) hereof to examine the same and to specify to Seller in writing those items which Purchaser finds� objectionable. If Purchaser does not deliver to Seller a written notice specifying such items within five (5) days after the receipt by Purchaser of the information referred to in Section 3.(a) hereof, then all of the items reflected on the Title Commitment and the survey shall be deemed to be permitted exceptions to title of and to the Property ("Permitted Exceptions"). Purchase and Sale Agreement — Page 2 190 Pacific Ave— 1/06/10 FDIC as receiver for Westsound Bank Moreover, (i) all items referenced herein in Section 6.(b)(1)(v) as the standard printed exceptions to the Title Policy, and (ii) any and all title matter(s) waived or deemed waived by Purchaser pursuant to Section 3.(c)(ii) herein, shall be deemed Permitted Exceptions. (c) If Purchaser objects to any item set forth on the Title Commitment and the survey in the manner required by Section 3.(b) hereof, Seller shall use reasonable efforts to cure such matters before Closing, but shall have no obligation to expend any sums to do so. In the event Seller is not able or willing to cure such matters prior to Closing, as it may be extended by Seller in its sole discretion as provided in Section 6.(a) herein, Purchaser shall have the right to either (i) terminate this Agreement by written notice thereof to Seller, in which event the Earnest Money shall be returned to Purchaser, and thereafter neither party hereto shall have any further rights or obligations under this Agreement, or (ii) waive such title matter or matters and proceed to Closing, without any reduction in the Purchase Price. If, at any time prior to Closing, Seller notifies Purchaser that it cannot or will not cure any particular title matter or matters, Purchaser shall have five (5) days from receipt of such notice to determine whether to terminate this Agreement as set forth in Section 3.(c)(i) herein, and receive a refund of the Earnest Money (with NO interest earned thereon), or waive any such matter(s) and proceed to Closing. In the event Purchaser fails to timely deliver the written notice of termination provided for in Section 3.(c)(i) above, Purchaser shall be deemed to have waived all such title matters in accordance with Section 3.(c)(ii) above for all purposes. Section 4. Representations and Warranties. Purchaser and each of the persons executing this Agreement on behalf of Purchaser � hereby represent and warrant to Seller as follows: (a) If Purchaser executes this Agreement as a corporation, limited liability company, partnership, or joint venture, (i) Purchaser is a duly authorized and existing (A) corporation or limited liability company, as the case may be, in good standing, (B) partnership, or (C) joint venture; (ii) Purchaser is qualified to do business in Washington; (iii) Purchaser has full right and authority to enter into this Agreement and to consummate the transaction contemplated herein; (iv) each of the persons executing this Agreement on behalf of Purchaser is authorized to do so; and (v) this Agreement constitutes a valid and legally binding obligation of Purchaser, enforceable in accordance with its terms. (b) The individual representing the Purchaser and signing this Agreement purportedly on behalf of a corporation, partnership, limited liability company, joint venture or trust will be bound under this Agreement in his or her individual capacity, unless the individual delivers to Seller, no later than fifteen (15) days prior to Closing, documentation evidencing the matters set forth in Section 4.(a) above, including, without limitation, corporate or partnership resolutions authorizing the transaction contemplated herein. Purchase and Sale Agreement — Page 3 • 190 Pacific Ave — 1/06/10 FDIC as receiver for Westsound Bank (c) There are no material legal or administrative proceedings pending or, to the best of Purchaser's knowledge, threatened against or affecting Purchaser that would affect Purchaser's right or ability to execute this Agreement or close the purchase of the Property. (d) In addition to the foregoing, Purchaser shall perform, execute, and deliver or cause to be performed, executed, and delivered at Closing or after Closing, any and all further acts, deeds, and assurances as Seller or the Title Company may reasonably require to consummate the transaction contemplated herein. Section 5. Furnishing of Information; Feasibilitv Insqection Period; Condition to Closing. (a) Subject to the provisions of Section 14. hereinbelow, Seller hereby agrees to furnish the information described in Section 5.(c) hereinbelow to Purchaser as set forth therein. At no time shall Purchaser and/or Purchaser's agents, WITHOUT THE PRIOR WRITTEN APPROVAL OF SELLER, perform any inspection of the Property prior to the closing of this Agreement concerning this Property. However, upon Seller's written approval to Purchaser, Seller agrees to allow Purchaser and/or Purchaser's agent's reasonable access to the Property during regular business hours from and after the Effective Date for the sole purpose of inspecting the Property; provided, however, that the costs and expenses of � Purchaser's inspection shall be borne solely by Purchaser. AT NO TIME SHALL THE PURCHASER AND/OR THE PURCHASER'S AGENT DURING THEIR APPROVED INSPECTION PERIOD OF THE PROPERTY. PERFORM ANY SAMPLING. TESTING, OR ANALYSIS � OF ANY MEDIA ON THE PROPERTY. Purchaser shall, notwithstanding any other provision of this Agreement to the contrary, remain solely liable for the payment of such inspection costs and expenses. All information furnished by Seller to Purchaser in accordance with this Section 5. or obtained by Purchaser in the course of its inspection shall be subject to Section 20. herein. Purchaser shall and does hereby release, indemnify, and hold Seller harmless, and Purchaser shall defend Seller (with counsel acceptable to Seller), from and against any liabilities, claims, demands, or actions incident to, resulting from, or in any way arising out of any such inspection, investigation, or any entry by or on behalf of Purchaser onto the Property. The obligations of Purchaser set forth in this Section 5.(a) shall survive Closing (or, notwithstanding any other provision of this Agreement to the contrary, the earlier termination hereo fl and not be merged therein. . (b) Purchaser shall have a period of five (5) days from the Effective Date, expiring at 5:00 P.M. according to the time zone applicable at the location of the Property, within which to view the Property (the "Inspection Period"). If Purchaser Purchase and Sale Agreement — Page 4 190 Pacific Ave — 1/06/10 ' FDIC as receiver for Westsound Bank determines, at any time prior to the expiration of the Inspection Period, that the Property is not fit for Purchaser's intended use, then Purchaser may terminate this Agreement by written notice thereof to Seller within the Inspection Period, in which event the non-interest bearing Earnest Money shall be returned to Purchaser, and thereafter neither party hereto shall have any further rights or obligations under this Agreement. Purchaser's inspection of the Property may include, subject, however, to any and all restrictions as set forth in Section 5.(a) hereinabove, a determination of whether any Hazardous Materials (hereinafter defined) or other substances known or suspected to pose a threat to health or the environment have been disposed of, or otherwise released, on or to the Properiy or whether any Environmental Matters (hereinafter defined) exist on or within any portion of the Property. If Purchaser does not indicate its disapproval of the Property by such written notice of termination given to Seller prior to the expiration of the Inspection Period, the conditions of this Section 5. shall be deemed satisfied. Moreover, Purchaser's failure to so indicate disapproval of the Property shall, in addition to the provisions of Section 14. hereinbelow, relieve Seller of any liability to Purchaser as a result of any Environmental Matters or Hazardous Materials (or both) subsequently discovered on or related to the Property, and at Closing Purchaser shall accept and assume all liability therefore, as between Seller and Purchaser, and Purchaser shall perform any remedial actions, if necessary, to clean up and/or remove such Environmental Matters or Hazardous Materials (or both), and Purchaser shall and does hereby indemnify and hold Seller harmless from and against any liabilities, claims, demands, or actions incident to, resulting from, or in any way arising out of the presence of any such Environmental Matters or Hazardous Materials (or both). The obligations of Purchaser under this Section 5.(b) shall survive Closing and not be merged therein. (c) Seller agrees to furnish to Purchaser the following information as soon as practicable after the Effective Date, but in any event within five (5) days after the Effective Date: (1) copies of such operating statements, if any, as Seller possesses reflecting the gross rental income and operating expenses for the number of months (not to exceed twelve) preceding the date hereof during which Seller owned the Property; (2) copies, if any, of the Leases (hereinafter defined) and the Service Contracts (hereinafter defined); and (3) copies, if any, of such plans, drawings and specifications (including "as built" plans and drawings) as Seller possesses with regard to the ° Improvements. (d) Upon satisfaction of the conditions specified in Sections 3.(b) and 3.(c) herein, as well as this Section 5., without the termination of this Agreement by Purchaser or Seller, Purchaser shall be deemed obligated to close the transaction set forth in Purchase and Sale Agreement — Page 5 190 Pacific Ave — 1/06/10 FDIC as receiver for Westsound Bank this Agreement, and the Seller shall retain the Earnest Money, and Purchaser may not thereafter terminate this Agreement hereunder. Purchaser agrees that the Seller shall comply with the provisions of this Section 5.(d) without the need for subsequent approval or authorization from Purchaser. Section 6. Closin . (a) The closing of the sale of the Property by Seller to Purchaser ("Closing") shall occur within five (5) days, or sooner as may be agreed upon by the parties, of the expiration of the Inspection Period (the "Closing Date"). The Closing shall occur in Seller's offices, or in the offices of the Title Company, at Seller's option. Notwithstanding the foregoing, Seller shall have the right, in its sole discretion, to extend Closing for a period up to ninety (90) days from the Closing Date, as it may deem necessary for the resolution of title problems, or if there has occurred prior to closing a condemnation, taking, fire or other casualty as referred to in Section 12, whether or not it involves a substantial portion of the Property. (b) At the Closing, the following shall occur: (1) Seller shall deliver or cause to be delivered to Purchaser the following: (i) evidence satisfactory to the Title Company that the person or persons executing this Agreement and the closing documents on behalf of Seller have full right, power and authority to do so; (ii) a Special Warranty Deed (or comparable deed form commonly used in the state where the Property is located) (the "Deed") sufficient to convey good and indefeasible title, executed and acknowledged by Seller and conveying the Property to Purchaser, subject only to the Permitted Exceptions and the other matters set forth herein; (iii) a Quitclaim Bill Of Sale conveying to Purchaser all of Seller's interest, if any, in any furniture, fixtures, equipment and other personalty located on or about the Property; (iv) an Assignment and Assumption of Leases and Contracts (the "Assignment and Assumption") assigning and transferring to Purchaser without warranty by or recourse against Seller, Seller's interest in and under any and all (A) tenant leases in force on the Closing Date covering the Property or any portion thereof (the "Leases"), together with all rentals and other payments arising therefrom on and after the Closing Date, and (B) contract agreements in force on the Closing Date with respect to the operation, maintenance and use of the Property (the "Service Purchase and Sale Agreement — Page 6 ' 190 Pacific Ave — 1/06/10 FDIC as receiver for Westsound Bank Contracts"), if any, together with all rights and obligations arising therefrom on and after the Closing Date; (v) the Title Policy, issued in the full amount of the Purchase Price (premium cost allocated as provided herein), insuring fee simple indefeasible title to the Property in Purchaser, subject only to the Permitted Exceptions, including, without limitation, the standard printed exceptions contained in Schedule B thereof; provided however, (A) the standard exception as to restrictive covenants shall be deleted in its entirety (unless recorded restrictive covenants are specified as or deemed to be Permitted Exceptions, in which event the recording information thereof shall be listed under such exception), (B) the standard exception as to survey may be limited to "shortages in area" only, at Purchaser's option and sole expense, and (C) the standard exception as to rights of parties in possession may be limited to rights of tenants in possession as tenants under any presently effective unrecorded and recorded leases; provided further, however, delivery of the Title Policy may be delayed in order to allow the Title Company to insert recording information as to documents recited therein which must be recorded at Closing; and (vi) a Non-Foreign Affidavit stating, under penalty of perjury, that Seller is not a"foreign person" within the meaning of Sections 1445(fl(3) and 7701(a)(30) of the Internal Revenue Code of 1986, as amended. (2) Purchaser shall deliver or cause to be delivered to Seller the following funds and documents: (i) cash, cashier's check or certified funds made payable to the order of Title Company, at Seller's option, in the amount of the Purchase Price, due credit being given for the non-interest bearing Earnest Money and ANY SECURITY DEPOSITS ACTUALLY IN THE POSSESSION OF THE FDIC (hereinafter defined) and retained by the FDIC in accordance with Section 6.(d) herein, together with such additional funds as may be necessary to cover Purchaser's share of the closing costs and proration hereunder; and (ii) the Assignment and Assumption, executed by Purchaser, whereby Purchaser assumes all of Seller's rights and obligations under the Leases and the Service Contracts, if any. (3) Seller and Purchaser shall execute a tenant notification letter to each tenant , if any, of the Property individually (the "Tenant Notification Letter"), and Purchaser, at the Closing, shall cause the Tenant Noti�cation Letter to be (i) with respect to tenants from whom the FDIC does not Purchase and Sale Agreement — Page 7 190 Pacific Ave — 1/06/10 FDIC as receiver for Westsound Bank actually have in its possession a security deposit, as set forth in the Rent Roll Affidavit, (hereinafter defined) required by Section 6.(b)(4) herein, hand delivered to each tenant or affixed to each tenant's main or front door, and (ii) with respect to tenants from whom the FDIC does actually have in its possession a security deposit, as set forth in the Rent Roll Affidavit, deposited in the United States mail, addressed to each such tenant, postage prepaid and certified with return receipt requested. Each Tenant Notification Letter required by Section 6.(b)(3)(ii) herein shall acknowledge that Purchaser has received and is responsible for such tenant's security deposit and specify the exact dollar amount thereof. Within forty-eight (48) hours of delivery of the Tenant Notification Letters, Purchaser shall provide Seller a copy of each such Tenant Notification Letter, together with an affidavit referencing same in form satisfactory to Seller, stating that Purchaser has delivered such letters to each tenant of the Property in accordance with this Agreement. The provisions of this Section 6.(b)(3) shall survive Closing and not be merged therein. (4) Seller shall, if there are any leases, execute a rent roll affidavit (the "Rent Roll Affidavit") setting forth that, to the best of its knowledge and belief, the rent roll attached thereto is a true, correct and complete listing of the Leases, including the premises covered thereby, the date to which rent has been paid, the name of the tenant, the rental and other charges payable thereunder, and the amount of each security deposit, if any, actually in the possession of the FDIC, from each tenant. (5) Seller and Purchaser shall cause to be delivered to the Title Company such other documents as may be reasonably necessary and appropriate to complete the Closing of the transaction contemplated herein. (c) Proration and payment of property taxes shall be as follows: (1) All ad valorem real estate taxes and assessments levied or assessed against the Property shall be prorated according to the calendar year as of the Closing Date, based on the most recent tax statement(s) available for the Property, Seller being charged and credited for same up to such date, and Purchaser being charged and credited for same on and after such date (herein, the "Proration at Closing"). If Seller does not challenge the assessed value of the Property (or cause such challenge to be made), the Proration at Closing shall be final and unadjustable. If, however, Seller does challenge such assessed value, and such challenge results in a reduction in the ad valorem taxes actually due and payable for the Property for the year of Closing (the "Actual Taxes"), from that reflected in the Proration at Closing, then Seller shall notify Purchaser of such result [which notice shall include (A) reasonable evidence of such reduction, Purchase and Sale Agreement — Page 8 190 Pacific Ave — 1/06/10 FDIC as receiver for Westsound Bank including the fees and expenses incurred by Seller in accomplishing same (herein, the "costs of the challenge"), and (B) a calculation prorating the Actual Taxes as of the Closing Date], and Purchaser shall promptly [within fifteen (15) days of such notice] pay to Seller (i) the difference between the amount for which Seller was charged and credited under the Proration at Closing, and the amount to be so charged and credited under the proration described in Section 6.(c)(1)(B) herein, and (ii) Purchaser's prorata share of the costs of the challenge. (2) In the event the Properly has been assessed for property tax purposes at such rates as would result in reassessment (i.e., "roll-back" taxes) based upon a change in land usage or ownership of the Property, Purchaser hereby agrees to pay all such taxes, and Purchaser shall and does hereby indemnify and save Seller harmless from and against all claims and liability for such taxes. Such indemnity shall survive Closing and not be merged therein. (3) This Section 6.(c) and the obligations of Purchaser hereunder shall survive Closing and not be merged therein. (d) All remaining normal and customarily proratable items, including, without limitation, collected rents and other expenses and fees under the Leases, and payments relating to the Service Contracts, if any, shall be prorated as of the Closing Date, Seller being charged and credited for all of same up to such date and Purchaser being charged and credited for all of same on and after such date. Any security deposits actually in the possession of the FDIC, as determined by the FDIC in its sole and absolute discretion, notwithstanding any provisions of the Lease(s), shall be retained by the FDIC and credited against the Purchase Price. No proration shall be made in relation to rents not collected as of the Closing Date, but Purchaser shall make a good faith attempt to collect the same for Seller's benefit after Closing and such collections, if any, shall be remitted to Seller promptly upon receipt by Purchaser. The provisions of this Section 6.(d) shall survive Closing and not be merged therein. (e) Upon completion of the Closing, Seller shall deliver to Purchaser possession of the Property free and clear of all tenancies of every kind and parties in possession, except for tenants entitled to possession under the Leases, and except for the Service Contracts, if any. Purchaser shall and does hereby indemnify and hold Seller harmless, and Purchaser shall defend Seller (with counsel acceptable to Seller), from and against all claims, demands, and actions made or brought by any tenants under the Leases or by any vendors, suppliers, or trades people providing goods and services to the Property under the Service Contracts or otherwise. The obligations of Purchaser set forth in the immediately preceding sentence shall survive Closing and not be merged therein. Purchase and Sale Agreement — Page 9 190 Pacific Ave— 1/06/10 FDIC as receiver for Westsound Bank (� (1) Purchaser shall pay for the cost of: (i) recording the Deed; (ii) any financing obtained by Purchaser in connection with its purchase of the Property pursuant hereto; (iii) any documentary stamp taxes, deed taxes, transfer taxes, intangible taxes, mortgage taxes, or other similar taxes, fees, or assessments; (iv) services incurred by Purchaser in performing its feasibility study and related tests and investigations; and (v) to the extent of one-half (1/2) of said cost, the Title Company's escrow fee, the Title Commitment, and the Title Policy. (2) Seller shall pay for the cost of: (i) preparing the Deed; (ii) Seller's most recent Survey, if any exists in Seller's possession; and (iii) to the extent of one-half (1/2) of said cost, the Title Company's escrow fee, the Title Commitment, and the Title Policy. (3) Each party shall pay its own attorney's fees. Section 7. Notices. Any notice provided or required to be given under this Agreement must be in writing and shall be served (and shall be deemed to have been served) by (i) depositing same in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested; (ii) delivering the same to such party or agent of such party, in person or by commercial courier; or (iii) depositing the same into the custody of a nationally recognized overnight delivery service such as Federal Express Corporation, Airborne Express, Emery or Purolator, addressed to the parly to be notified. For purposes of notice, the addresses of the parties shall be as follows: If to Seller, to: FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for WESTSOUND BANK CB Richard Ellis, Inc. Attn: Jeff Hackmeyer, Asset Manager 2001 Ross Avenue, Suite 3400 Dallas, TX 75201 Telephone No: (214) 863-3082 Facsimile No: (214) 863-3097 Jeff.hackmeyer@cbre.com Purchase and Sale Agreement — Page 10 190 Pacific Ave— 1/06/10 FDIC as receiver for Westsound Bank With copy to: FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for WESTSOUND BANK 1601 Bryan Street, 32" Floor Dallas, Texas 75201 Attention: ORE Department Telephone No.: (972) 761-8322 With copy to: FDIC Legal Division 1601 Bryan Street, 15` Floor ` Dallas, Texas 75201 Attention: Asset Disposition Department Telephone No.: (972) 761-8129 If to Purchaser, to: Telephone No.: With copy to: Telephone No.: From time to time either party may designate another address for all purposes of this Agreement by giving the other party no less than ten (10) days advance notice of such change of address in accordance with the provisions hereof. Section 8. Commissions. By separate document, Seller has agreed to pay a real estate commission (the "Commission") to the real estate agent specified therein (the "Broker"). However, the Commission shall be payable at Closing only if and when the transaction contemplated by this Agreement actually closes and then only as and when Seller receives the Purchase Price. No Commission shall be paid if the transaction contemplated by this Agreement is not completely closed in accordance with the terms hereof. Broker may agree to pay a portion of the Commission to any other licensed real estate agent, but Seller will bear no liability for payment to any agent other than Broker. Purchaser represents to Seller that no real estate broker has been authorized to act on Purchaser's behalf, and Purchaser hereby indemnifies Seller from any claims which have been or may be asserted against Seller as to brokerage or similar fees with respect to the Property. Section 9. Assigns• This Agreement shall inure to the benefit of and be binding on the parties hereto and their respective heirs, legal representatives, successors, and assigns. Notwithstanding the foregoing, Purchaser shall not have the right to assign its interest in this Agreement without the prior written Purchase and Sale Agreement — Page 11 190 Pacific Ave — 1/06/10 FDIC as receiver for Westsound Bank consent of Seller, which consent will not be unreasonably withheld, and any such assignment to which Seller has not so consented shall be null and void and of no force or effect. Purchaser hereby acknowledges and agrees that any request by Purchaser for Seller's consent to Purchaser's assignment of its interest in this Agreement, shall be in writing and shall be delivered to Seller, together with the documentation required by Section 4.(b) herein with regard to the proposed assignee, no later than fifteen (15) days prior to Closing. Purchaser hereby further acknowledges and agrees that any request for Seller's consent to Purchaser's assignment of its interest in this Agreement which does not strictly conform to the requirements contained in the immediately preceding sentence will be denied by Seller and any such withholding of such consent shall not be deemed to be unreasonable. Provided, however, notwithstanding any language or provision hereof to the contrary, any proposed assignee of Purchaser must have executed the same Purchaser Eligibility Certification form as Purchaser was required to execute, and such original executed Purchaser Eligibility Certification of the proposed assignee must be delivered to Seller with the foregoing written request by Purchaser for consent to such Assignment as a condition precedent for such consent. By accepting any assignment of this Agreement and executing such Purchaser Eligibility Certification Form, such assignee agrees to, and makes all of, the representations and warranties contained in Section 19 below. Section 10. Governin� Law. THIS AGREEMENT IS BEING EXECUTED AND DELIVERED AND IS INTENDED TO BE PERFORMED IN THE STATE OF WASHINGTON. THE PARTIES HERETO WAIVE THE RIGHT TO SUE OR BE SUED ELSEWHERE AND AGREE AND CONSENT TO THE JURISDICTION OF A COURT OF COMPETENT JURISDICTION HAVING AUTHORITY OVER KITSAP COUNTY, WASHINGTON, INCLUDING THE AUTHORIZED REMOVAL FROM STATE COURT TO FEDERAL COURT. THE VALIDITY, CONSTRUCTION, ENFORCEMENT, INTERPRETATION, AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE UNITED STATES OF AMERICA, AND TO THE EXTENT THAT STATE LAW WOULD APPLY UNDER APPLICABLE FEDERAL LAW, THE LAWS c OF THE STATE IN WHICH THE PROPERTY IS LOCATED. Section 11. Remedies. (a) If Purchaser defaults in the performance of its obligations hereunder or refuses or fails to consummate the purchase of the Property in accordance with this Agreement for any reason other than termination hereof in accordance with a right granted to Purchaser hereunder to do so, or breach by Seller of its obligations hereunder, then Seller, as its sole and exclusive remedy, shall have the right to terminate this Agreement by giving Purchaser and the Title Company written notice thereof, in which event neither party hereto shall have any further rights or obligations under this Agreement except that Seller shall be entitled to retain the non-interest bearing Earnest Money as liquidated damages. Seller and Purchaser ° hereby acknowledge that the amount of just compensation for the harm that would be caused by and from a breach of or default in performance of this Agreement by Purchaser cannot be accurately estimated or ascertained or would be very difficult or impossible to accurately estimate or ascertain, and that the Earnest Money Purchase and Sale Agreement — Page 12 190 Pacific Ave — 1/06/10 FDIC as receiver for Westsound Bank amount is a reasonable forecast of just compensation to the Seller that would be caused by such breach or default. Notwithstanding the foregoing, in the event of any other default by Purchaser under this Agreement, Seller shall have any and all rights and remedies available at law or in equity by reason of such default. (b) If Purchaser terminates this Agreement pursuant to and in accordance with a right granted to Purchaser hereunder to do so, absent Seller default, then neither party hereto shall have any further rights or obligations under this Agreement, and the non-interest bearing Earnest Money shall be returned to Purchaser. (c) If Seller fails to perform its obligations hereunder or refuses or fails to consummate the sale of the Property in accordance with this Agreement for any reason other than termination hereof in accordance with a right granted to Seller hereunder to do so, or breach by Purchaser of its obligations hereunder, then Purchaser, as its sole and exclusive remedy, shall have the right to terminate this Agreement by giving Seller written notice thereof, and thereafter neither party hereto shall have any further rights or obligations under this Agreement except that the non-interest bearing Earnest Money shall be returned to Purchaser by the Seller, and, subject to (1) Purchaser's compliance with Sections 5.(a)(i) and (ii) hereinabove, and (2) Purchaser's submission to Seller, within sixty (60) days of termination of this Agreement pursuant to this Section 11.(c), of paid invoices (so marked) evidencing such compliance, Seller shall reimburse Purchaser for its documented reasonable out-of-pocket expenses incurred in connection with this transaction prior to such default up to the maximum amount of ONE THOUSAND AND NO/100 DOLLARS ($1,000.00). In no event shall Seller be liable to Purchaser for any other actual, punitive, speculative, or consequential damages, nor shall Purchaser be entitled to bring a claim to enforce specific performance of this Agreement. Moreover, if Seller is in default of Seller's obligations hereunder and Purchaser fails to exercise its right to terminate this Agreement pursuant to this Section 11.(b) on or prior to the Closing Date [as Closing may be extended by Seller pursuant to Section 6.(a) herein], then this Agreement shall expire by its own terms on the day following the Closing Date [as Closing may be extended by Seller pursuant to Section 6.(a) herein], and thereafter neither party hereto shall have any further rights or obligations under this Agreement except that Purchaser shall have the right to the return of the non- interest bearing Earnest Money from the Seller, and, reimbursement by Seller of any documented out-of-pocket expenses incurred by Purchaser in this transaction, not to exceed ONE THOUSAND AND NO/100 DOLLARS ($1,000.00). Section 12. Condemnation/Casualtv. (a) In the event that all or a substantial portion of the Property is condemned or taken by eminent domain prior to Closing, Purchaser may, at its option, either (i) � terminate this Agreement by written notice thereof to Seller within ten (10) days after Seller notifies Purchaser of the condemnation or taking, and receive the immediate return of the non-interest bearing Earnest Money, and thereafter neither party hereto shall have any further rights or obligations under this Purchase and Sale Agreement — Page 13 190 Pacific Ave — 1/06/10 FDIC as receiver for Westsound Bank Agreement; or (ii) proceed to close the transaction contemplated herein in accordance with the terms hereof, in which event Seller shall (A) deliver to Purchaser at Closing any proceeds then actually received by Seller attributable to the Property from such condemnation or eminent domain proceeding, and (B), without any warranty or representation of recovery, assign to Purchaser at Closing any then remaining claim Seller may have to any condemnation or eminent domain award attributable to the Property, and in either event there shall be no reduction in the Purchase Price. In the event Purchaser fails to timely deliver written notice of termination as described in Section 12.(a)(i) above, Purchaser shall be deemed to have elected to proceed in accordance with Section 12.(a)(ii) above. In no event shall any such condemnation or taking give rise to a claim by Purchaser against Seller for breach of this Agreement. (b) In the event that all or a substantial portion of the Property shall be damaged or destroyed by fire or other casualty prior to Closing, on the Buyer's request, Seller will immediately provide Buyer with a copy of all insurance policies covering the Property, and Purchaser may, at its option, either (i) terminate this Agreement by written notice thereof to Seller within ten (10) days after Seller notifies Purchaser of the casualty and receive the immediate return of the non-interest bearing Earnest Money, and thereafter neither party hereto shall have any further rights or obligations under this Agreement; or (ii) proceed to close the transaction contemplated herein in accordance with the terms hereof, in which event Seller shall (A) deliver to Purchaser at Closing any insurance proceeds then actually received by Seller attributable to the Property from such casualty, and (B), without any warranty or representation of recovery, assign to Purchaser at closing any then remaining claim Seller may have to any recovery from any insurance, and in any event under this Section 12(b)(ii) there shall be no reduction to the Purchase Price. In the event Purchaser fails to timely deliver written notice of termination as described in Section 12.(b)(i) above, Purchaser shall be deemed to have elected to proceed in accordance with Section 12.(b)(ii) above. In no event shall any such fire or casualty give rise to a claim by Purchaser against Seller for breach of this Agreement. (c) For the purposes of Sections 12.(a) and 12.(b) herein, a"substantial portion" of the Property shall be deemed to include any condemnation, taking, fire or other or casualty loss which damages the Property to the extent of at least twenty percent (20%) of the purchase price of the Property provided for in Section 2.(a) (and shall not include any condemnation, taking, fire or other casualty loss of less than such amount), or which materially interferes with direct access to and from the Property to any public street. (d) Notwithstanding anything to the contrary contained in said Sections 12.(a), 12.(b), and 12.(c), in the event the proceeds payable with respect to the Property as a result of any condemnation, taking, fire or other casualty are estimated by Seller in its sole judgment to exceed the amount of the Purchase Price, Seller shall have the right to terminate this Agreement by delivering written notice thereof to Purchaser within thirty (30) days after Seller becomes aware of the proceeds Purchase and Sale Agreement — Page 14 190 Pacific Ave — 1/06/10 FDIC as receiver for Westsound Bank payable with respect to any such taking or casualty, and in such event, neither party hereto shall have any further rights or obligations under this Agreement except that the non-interest bearing Earnest Money shall be returned to Purchaser by the Seller, and, subject to Purchaser's submission to Seller, within sixty (60) days of such termination of this Agreement pursuant to this Section 12.(d), of paid invoices (so marked) therefore, Seller shall reimburse Purchaser for its documented reasonable out-of-pocket expenses incurred in connection with this transaction prior to such termination up to the maximum amount of ONE THOUSAND AND NO/100 DOLLARS ($1,000.00). (e) In the event that any condemnation, taking, fire or other casualty loss is less than a substantial portion of the Property, Purchaser shall be obligated to proceed with Closing, in which event Seller shall (i) with regard to any such condemnation or taking, (A) deliver to Purchaser at Closing any proceeds actually received by Seller attributable to the Property from such condemnation or taking, and (B), without any warranty or representation of recovery, assign to Purchaser at Closing any remaining right Seller may have to such proceeds, or (ii) with regard to any such fire or other casualty loss, (A) deliver to Purchaser at Closing any proceeds actually received by Seller attributable to the Property from such fire or other casualty loss, and (B), without any warranty or representation of recovery, assign to Purchaser at closing any then remaining claim Seller may have to any recovery from any insurance, and in any event under this Section 12(e), there shall be no reduction in the Purchase Price. In no event shall any such condemnation, taking, fire or other casualty loss give rise to a claim by Purchaser against Seller for breach of this Agreement. ( fl In the event the Property is damaged prior to Closing and such damage creates an emergency requiring immediate repair (prior to Purchaser's election under Section 12.) in order to prevent further damage to the Property, Seller may cause such repair(s) to be made in a timely manner, and any condemnation, taking, casualty, fire or other proceeds paid as a result of such damage shall be used in paying the cost of such repair. (g) Risk of loss or damage to the Property, or any part thereof, by fire or other casualty up until Closing shall be borne by Seller and thereafter by Purchaser. Section 13. Entire Agreement; Interpretation; Severabilitv: Attornev's Fees; Counterpart: Memorandum of Agreement; Time is of the Essence. (a) This Agreement is the entire agreement between Seller and Purchaser concerning the sale of the Property and supersedes all prior agreements and understandings, if any, with regard thereto, and no modification hereof or subsequent agreement relative to the subject matter hereof shall be binding on either� party unless reduced to writing and signed by the party to be bound. (b) The parties acknowledge that each party and its counsel have reviewed this Agreement, and the parties hereby agree that the normal rule of construction to Purchase and Sale Agreement — Page 15 • 190 Pacific Ave —1/06/10 FDIC as receiver for Westsound Bank the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments or exhibits hereto. (c) In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions had never been contained herein. (d) Should either party employ an attorney or attorneys to enforce any of the provisions hereof, or to recover damages for the breach of this Agreement, the prevailing party in any final judgment after appeal, if any, shall be entitled to recover from the other party (or parties) all reasonable costs, charges, and expenses, including, without limitation, attorney's fees expended or incurred in connection therewith; provided, however, that Seller's liability, if any, for court costs and attorney's fees, shall be determined in accordance with the Equal Access to Justice Act, 28 U.S.C. § 2412, as amended, to the extent applicable, as well as any other applicable federal law. (e) This Agreement may be executed in any number of identical counterparts. If so executed, each of such counterparts is to be deemed an original for all purposes, and all such counterparts shall collectively constitute one agreement. ( fl In no event shall this Agreement or any memorandum hereof be recorded in the public records of the place in which the Property is situated, and any such recordation or attempted recordation shall constitute a breach of this Agreement by the party responsible for such recordation or attempted recordation. If Buyer records this Agreement or a memorandum or notice thereof, such act may constitute a ground for termination by Seller by reason of such breach, and further Seller may record a notice of such termination which shall prevail in all respects over the Purchaser's recordation for all purposes. (g) Time is of the essence in the performance of each party's obligations hereunder. Section 14. Disclaimer; Waiver/Release of Claims. (a) For the purposes of this Agreement, the following terms shall have the definitions indicated: (1) "Environmental Law" shall mean any federal, state, or local laws, ordinances, permits, or regulations, or any common law, regarding health, safety, radioactive materials, or the environment, (i) including, but not limited to, the following federal statutes: Clean Air Act (42 U.S.C. § 7401 � et se�.) ("CAA"), Clean Water Act and Federal Water Pollution Control Act (33 U.S.C. § 1251 et se�.) ("CWA"/"FWPCA"), Solid Waste Disposal Act and Resource Conservation and Recovery Act (42 U.S.C. § 6901 et Purchase and Sale Agreement — Page 16 190 Pacific Ave— 1/O6/10 FDIC as receiver for Westsound Bank s�.) ("SWDA"/"RCRA"), Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et se�c .) ("CERCLA"), Emergency Planning and Community Right-to-Know Act (42 U.S.C. § 11001 et s�.) ("EPCRA"), Safe Drinking Water Act (42 U.S.C. § 300f et s�.) ("SDWA"), Toxic Substances Control Act (15 U.S.C. § 2601 et se�.) ("TSCA"), Endangered Species Act of 1973 (16 U.S.C. § 1531 et se�c .) ("ESA"), Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. § 136 et se�c .) ("FIFRA"), and the Occupational Safety and Health Act (29 U.S.C. § 651 et s�.) ("OSHA"); and (ii) including, but not limited to, all of the environmental and public health and safety statutes of the state in which the property is located, each as amended, and (iii) any federal or state (in which the property is located) regulations promulgated thereunder, guidances and directives issued with respect thereto, or policies adopted by authority thereunder, with respect to any Environmental Law. (2) "Release" shall mean the discharge, disposal, deposit, injection, dumping, spilling, leaking, leaching, placing, presence, pumping, pouring, emitting, emptying, escaping, or other release of any Hazardous Material. (3) "Hazardous Material" shall mean: (i) any radioactive materials; (ii) any substance or material the transportation, storage, treatment, handling, use, removal, or Release of which is subject to any Environmental Law; or (iii) any substance or material for which standards of conduct are imposed under any Environmental Law. Without limiting the generality of the foregoing, "Hazardous Materials" shall include: asbestos and asbestos-containing materials (whether or not friable); urea-formaldehyde � in any of its forms; polychlorinated biphenyls; oil; used oil; petroleum products and their by-products; lead based paint; radon; and any substances defined as "hazardous waste", "hazardous substances", "pollutants or contaminants", "toxic substances", "hazardous chemical", "hazardous air pollutants", or "toxic chemical" under the CAA, CWA/FWPCA, SWDA/RCRA, CERCLA, EPCRA, SDWA, TSCA, or OSHA or any other applicable state or federal Environmental Law. (4) "Environmental Matter" shall mean any of the following: (i) the Release of any Hazardous Material on or at the Property or any other property; (ii) the migration of any Hazardous Material onto or from the Property; (iii) the environmental, health, or safety aspects of the transportation, storage, treatment, handling, use, or Release, whether any of the foregoing occurs on or off the Property, of Hazardous Materials in connection with the operations or past operations of the Property; (iv) the violation, or alleged violation, of any Environmental 'Law, order, permit, or license of or from any governmental authority, agency, or court relating to environmental, health, or safety matters; (v) the presence of any underground storage tanks ["UST(s)"] within the confines of the Property; (vi) the presence of wetlands within the confines of the Property; (vii) the Purchase and Sale Agreement — Page 17 190 Pacific Ave —1/06/10 FDIC as receiver for Westsound Bank presence of any endangered species on, in, or around the Property; or (viii) the characterization of the Property as historical in nature in any way. (5) "Released Parties" shall mean, collectively, all of the following (to the extent applicable): (i) The failed financial institution(s) through which Seller or its predecessor acquired its interest in the Property (the "Failed Financial Institution"); (ii) The Federal Deposit Insurance Corporation in any and all of its various capacities; and (iii) Seller and all of the directors, officers, employees, agents, contractors, representatives, successors, and assigns of Seller and of each of the parties referenced above in this Section 14.(a)(5). (b) PURCHASER ACKNOWLEDGES THAT SELLER HAS ACQUIRED THE PROPERTY AS A RESULT OF THE FAILURE OF A FAILED FINANCIAL INSTITUTION, AND THAT SELLER HAS LIMITED KNOWLEDGE OF THE CONDITION OF THE PROPERTY AND THE SURROUNDING AREAS. PURCHASER ACKNOWLEDGES AND AGREES THAT PURCHASER IS PURCHASING THE PROPERTY "AS-IS", "WHERE-IS", AND "WITH ALL FAULTS" AS OF THE DATE HEREOF AND AS OF THE CLOSING DATE, AND PURCHASER FURTHER ACKNOWLEDGES, AGREES TO, AND ACCEPTS THAT SELLER HEREBY EXPRESSLY DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES CONCERNING THE CONDITION OF THE PROPERTY AND ANY PORTIONS THEREOF, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF HABITABILITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT SELLER HAS NO DUTY OR OBLIGATION TO DISCLOSE TO PURCHASER ANY DOCUMENT, FACT, CONDITION, OR INFORMATION, CONCERNING, RELATING, OR ARISING FROM THE PROPERTY IN ANY MANNER, AND THAT NO DISCLOSURE OR FAILURE TO DISCLOSE ANY DOCUMENT, FACT, OR INFORMATION SHALL FORM IN WHOLE OR IN PART THE BASIS OF ANY LIABILITY OF SELLER TO PURCHASER. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT IT WILL INSPECT THE PROPERTY, AND PURCHASER WILL RELY SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY IN ITS ACQUISITION THEREOF. SELLER SHALL HAVE NO OBLIGATION HEREUNDER TO A�LTER, REPAIR, OR IMPROVE THE PROPERTY. Purchase and Sale Agreement — Page 18 190 Pacific Ave — 1/O6/10 FDIC as receiver for Westsound Bank (c) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, PURCHASER ACKNOWLEDGES AND AGREES THAT PURCHASER WILL NOT RELY UPON ANY (1) REPRESENTATIONS OR WARRANTIES (ORAL OR WRITTEN) MADE BY OR PURPORTEDLY ON BEHALF OF SELLER UNLESS EXPRESSLY SET FORTH IN THIS AGREEMENT, OR (2) DOCUMENTS OR OTHER INFORMATION (ORAL OR WRITTEN) SUPPLIED BY OR PURPORTEDLY ON BEHALF OF SELLER, INCLUDING BUT NOT LIMITED TO, AS REFERRED TO IN EXHIBIT "F" ATTACHED HERETO AND INCORPORATED HEREIN. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT ANY DOCUMENTS OR INFORMATION PROVIDED TO PURCHASER BY SELLER OR ON SELLER'S BEHALF HAVE BEEN OBTAINED FROM A VARIETY OF SOURCES, AND HAVE NOT BEEN INDEPENDENTLY INVESTIGATED OR VERIFIED BY SELLER. IN ANY EVENT, ANY SUCH DOCUMENTS OR INFORMATION ARE NOT BEING RELIED UPON BY PURCHASER IN ENTERING INTO THIS AGREEMENT OR PURCHASING THE PROPERTY. SELLER MAKES NO EXPRESS REPRESENTATIONS OR WARRANTIES, AND DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, CONCERNING ' THE CONTENT, TRUTH, ACCURACY, OR COMPLETENESS OF ANY DOCUMENTS OR INFORMATION SUPPLIED TO PURCHASER BY SELLER OR ANYONE ACTING OR PURPORTING TO ACT ON SELLER'S BEHALF, OR TO THE SELECTION THEREOF TO THE EXCLUSION OF ANY DOCUMENTS OR INFORMATION. (d) SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, CONCERNING ANY MATTERS CONCERNING, RELATING TO, ARISING FROM OR INVOLVING THE PROPERTY IN ANY MANNER, EXCEPT TO THE EXTENT EXPRESSLY PROVIDED IN THIS AGREEMENT. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER HEREBY AFFIRMATIVELY DISCLAIMS ANY EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES CONCERNING ANY OF THE FOLLOWING MATTERS: (1) EXCEPT AS EXPRESSLY SET FORTH IN THE DEED TO BE DELIVERED BY SELLER TO PURCHASER AT CLOSING, ANY MATTERS AFFECTING TITLE TO THE PROPERTY; (2) THE PERMITTED USES UNDER, OR THE COMPLIANCE OF THE PROPERTY OR ANY PORTION THEREOF WITH, ANY AND ALL APPLICABLE FEDERAL, STATE, AND LOCAL LAWS, ORDINANCES, PERMITS, RULES, REGULATIONS, OR REQUIREMENTS, INCLUDING, BUT NOT LIMITED TO, ENVIRONMENTAL LAWS; Purchase and Sale Agreement — Page 19 190 Pacific Ave — 1/06/10 FDIC as receiver for Westsound Bank (3) THE SUITABILITY OR APPROPRIATENESS OF THE PROPERTY OR ANY PORTION THEREOF FOR FUTURE DEVELOPMENT OR RENOVATION OR FOR THE CONDUCT OF ANY USES OR ACTIVITIES THAT PURCHASER MAY ELECT TO CONDUCT THEREON; (4) THE CONDITION OF THE PROPERTY OR ANY PORTION THEREOF; (5) THE EXISTENCE, QUALITY, NATURE, ADEQUACY, OR PHYSICAL CONDITION OF ANY UTILITIES SERVING THE PROPERTY; AND (6) THE PRESENCE OR ABSENCE OF ANY ENVIRONMENTAL MATTERS. (e) PURCHASER, FOR ITSELF AND ITS HEIRS, SUCCESSORS, AND ASSIGNS AND ANYONE ELSE CLAIMING BY, THROUGH, OR UNDER PURCHASER, HEREBY EXPRESSLY (i) WAIVES THE CLAIMS AND CAUSES OF ACTION DESCRIBED BELOW IN THIS SECTION 14.(e) (WHETHER OR NOT SUCH CLAIMS OR CAUSES OF ACTION ARE KNOWN OR DISCOVERABLE AS OF THE DATE HEREOF), AND (ii) RELEASES SELLER AND ALL RELEASED PARTIES, JOINTLY AND SEVERALLY, FROM ANY AND ALL LIABILITY BASED IN WHOLE OR IN PART UPON ANY SUCH CLAIMS OR CAUSES OF ACTION: (1) CLAIMS OR CAUSES OF ACTION BASED UPON ANY OF THE � MATTERS SET FORTH IN SECTIONS 14.(a), (b), (c), and (d) HEREIN; AND (2) NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS AGREEMENT, CLAIMS OR CAUSES OF ACTION BASED UPON ANY ACTUAL OR ALLEGED FAILURE BY SELLER TO SATISFY A DUTY TO DISCLOSE INFORMATION TO PURCHASER CONCERNING THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, INFORMATION CONCERNING THE PRESENCE OF ANY PATENT OR LATENT DEFECTS, DEFICIENCIES IN OR AFFECTING THE PROPERTY, OR THE PRESENCE OF ANY PATENT, LATENT OR OTHER ENVIRONMENTAL MATTERS. (� Notwithstanding the intent of the parties hereto that the waiver and release provisions contain�d in Section 14.(e) herein bar all claims and causes of action by Purchaser and Purchaser's heirs, successors, and assigns and anyone else claiming by, through, or under Purchaser, should a court of competent jurisdiction deem otherwise, Purchaser hereby agrees that the presence of the waiver and release provisions in said Section 14.(e) should serve as the overwhelming, Purchase and Sale Agreement — Page 20 190 Pacific Ave— 1/O6/10 FDIC as receiver for Westsound Bank primary factor in any equitable apportionment of response costs under applicable federal, state, or local laws, ordinances, or regulations. (g) PURCHASER SHALL AND DOES HEREBY INDEMNIFY AND HOLD SELLER AND ALL RELEASED PARTIES HARMLESS, JOINTLY AND SEVERALLY, FROM AND AGAINST ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES, LOSSES, AND EXPENSES (INCLUDING CLEANUP OR REMEDIATION COSTS, DEFICIENCIES, INTEREST, FINES, PENALTIES, COURT COSTS, AND CONSULTANTS' AND ATTORNEYS' FEES AND DISBURSEMENTS) THAT SELLER OR ANY RELEASED PARTY SUFFERS, INCURS, OR MAY POTENTIALLY SUFFER OR INCUR, AS A RESULT OF ANY CLAIMS OR CAUSES OF ACTION MADE OR BROUGHT BY ANY PARTY OTHER THAN PURCHASER (INCLUDING, WITHOUT LIMITATION, ANY GOVERNMENTAL OR QUASI-GOVERNMENTAL AGENCY, INSTRUMENTALITY, OR AUTHORITY, OR ONE OR MORE PRIVATE PARTIES) ON THE BASIS OF ANY OF THE MATTERS SET FORTH IN SECTIONS 14.(a), (b), (c), (d), AND (e) HEREIN, AND INCLUDING THE NEGLIGENCE OR GROSS NEGLIGENCE OF SELLER OR ANY RELEASED PARTY. (h) Purchaser acknowledges and agrees that the waiver and release provisions contained in Section 14.(e) herein and the indemnification and hold harmless provisions contained in Section 14.(g) herein were each an essential component of the consideration for the sale of the Property. (i) Purchaser acknowledges and agrees that Purchaser's sole recourse for claims or causes of action of the nature described in Section 14.(e) herein shall be to parties other than Seller and all Released Parties ("Other Parties"), and that economic recovery may not be possible against some or all of the Other Parties. (j) EACH OF THE PROVISIONS OF THIS SECTION 14. SHALL SURVIVE CLOSING AND THE EXECUTION AND DELIVERY OF THE DEED BY SELLER AND SHALL NOT BE MERGED THEREIN. Section 15. Offer Onlv; Effective Date. This Agreement, until fully executed, is only an offer of the party first executing the same. Subject to the provisions of Section 16. herein, the date of execution of this Agreement by the latter of Purchaser or Seller shall be the "Effective Date" hereof for all purposes. All references herein to the date of this Agreement shall mean the Effective Date. Unless a fully executed counterpart of this Agreement, together with the Earnest Money, is deposited with the Seller within forty-eigl�t (48) hours after the Effective Date, this Agreement shall be null and void and neither Purchaser nor Seller shall have any further rights or obligations under the Agreement. Purchase and Sale Agreement — Page 21 190 Pacific Ave— U06/10 FDIC as receiver for Westsound Bank Section 16. Conditioned Upon Committee Approval. Seller's acceptance of this Agreement and obligations hereunder, are expressly subject to and conditioned upon the approval hereof by Seller and its appropriate review committee. In the event that the Seller and its appropriate review committee does not accept and approve this Agreement, including considering guidelines used to facilitate the sale of property owned by Seller, as amended from time to time, this Agreement shall be null and void and the non-interest bearing Earnest Money shall be returned to Purchaser, and thereafter neither Purchaser nor Seller shall have any further rights or obligations under this Agreement. Section 17. Prospective Lease(s); Reimbursement Period. (a) Purchaser and Seller hereby acknowledge and agree that it is beneficial to the Property and to the parties hereto for Seller to enter into leases covering the Properiy or any portion thereof ("Prospective Lease") during the period from and after the Effective Date and prior to Closing (the "Reimbursement Period"). (b) During the Reimbursement Period, if Seller submits (in accordance with the notice provisions of Section 7. herein) a Prospective Lease to Purchaser, Purchaser shall have five (5) business days from Purchaser's receipt thereof to notify Seller in writing (and in accordance with said Section 7.) of Purchaser's decision not to become obligated for the costs of such Prospective Lease as described in Section 17.(c) hereinbelow. Purchaser's failure to so notify Seller shall be deemed to be the decision of Purchaser to obligate itself for the costs of such Prospective Lease as set forth in Section 17.(c) herein. (c) Unless Purchaser notifies Seller in accordance with Section 17.(b} herein of Purchaser's decision not to become obligated for the costs of a Prospective Lease [submitted to Purchaser in accordance with said Section 17.(b)], Purchaser shall reimburse Seller in cash at Closing for all costs expended or incurred by Seller under that Prospective Lease during the Reimbursement Period, such costs to include, without implied limitation, real estate commissions or fees, tenant finish out costs, and moving or relocation expenses. To the extent that Seller has not actually expended such sums during the Reimbursement Period, Purchaser shall expressly assume the payment thereof at Closing in accordance with Section 6.(b)(2)(ii) hereinabove. (d) Notwithstanding the foregoing provisions of this Section 17., and prior to the expiration of the Inspection Period, Seller may enter into such Prospective Lease(s) as it may elect in its sole discretion, (i) without submitting such Prospective Lease(s) to Purchaser as set forth in Section 17.(b) hereinabove, or (ii) notwithstanding Purchaser's decision not to be obligated for the costs of such o Prospective Lease(s) as set forth in said Section 17(b). In either of such events set forth in this Section 17.(d), Purchaser shall not be obligated for the costs of such Prospective Lease(s). Purchase and Sale Agreement — Page 22 190 Pacific Ave — 1/06/10 FDIC as receiver for Westsound Bank (e) This Section 17. shall not apply to multifamily residential or mini-warehouse properties which shall continue to be leased by Seller during the term of this Agreement in the ordinary course of Seller's business. Section 18. Prohibited Purchaser. Purchaser hereby acknowledges that certain persons are prohibited from purchasing assets from Seller. Purchaser hereby further acknowledges that under certain circumstances, Seller will not sell assets to certain persons. Accordingly, prior to or contemporaneously with the execution of this Agreement, Purchaser [if an individual, or a principal of Purchaser] must have completed and executed the Purchaser Eligibility Certification attached hereto as Exhibit "G" and incorporated herein for all purposes (the "Purchaser Eligibility Certification"). Purchaser hereby represents and warrants to Seller that the Purchaser Eligibility Certification is true and correct, and Purchaser hereby further acknowledges that Seller is relying on the truth and accuracy of the Purchaser Eligibility Certification. Section 19. Confidentialitv. Purchaser hereby acknowledges that it has received or may receive certain information from Seller for use in evaluating the Property. Accordingly, prior to or contemporaneously with its execution of this Agreement, at the sole discretion of the Seller, Purchaser is required to execute and deliver to Seller the Confidentiality Agreement attached hereto as Exhibit "H" and incorporated herein for all purposes (the "Confidentiality Agreement"). Any breach of the Confidentiality Agreement by Purchaser shall be a default under this Agreement, including but not limited to, as provided for in Section 11.(a) herein. [SIGNATURE PAGES TO FOLLOW] Purchase and Sale Agreement — Page 23 190 Pacific Ave — 1/06/10 FDIC as receiver for Westsound Bank IN WITNESS WHEREOF, the parties have executed this Purchase and Sale Agreement to be effective as of the Effective Date. SELLER: FEDERAL DEPOSIT INSURANCE CORPORATION as Receiver for WESTSOUND BANK By: Typed Name: Title: Attorney in Fact Date: Tax I.D. No. PURCHASER: B Typed Name: Title: Date: Tax I.D. No. 5:�28�DOCS.09\Generic ORE Contracts\Generic Porchase and Sale Agreemenl (envtronmental or over $500,000) (10.23-09).doc Purchase and Sale Agreement — Page 24 190 Pacific Ave —1/06/10 FDIC as receiver for Westsound Bank EXHIBIT "A" LEGAL DESCRIP7IQN: LC7TS 3 THROUGhi 7, BLOCK 9, TOWN OF BREMERTON, ACCORDING TO TI�IE PLAT RECORDEU IN VOLUME 2 OF PLATS, PAGE 30, RECQRDS OF I<1TSAP CdUN�TY, WAStI1NGTON; EXCEPT THAT PORTIQN CONVEYED TO STATE OF WA511INGTON, DEPARTMENT OF TRANSPORTATIQN BY DEED RCCORDEp APRTL 20, 2006 UNUER RECORDING NO. 20060420�285. EXHIBITS EXHIBIT ��B" INTENTIONALLY DELETED EXHIBITS � EXHIBIT "C" Furnished Documents Seller has possession of documents that may concern the Property (as defined in the Agreement). Certain documents containing information about the Property are identified in the List of Furnished documents (Schedule "A"). These documents will be provided for review by Purchaser pursuant to the executed Confidentiality Agreement (Exhibit "E"), which is referenced by, and incorporated within, the Purchase and Sale Agreement. Without limiting any provision contained in the Purchase and Sale Agreement, Purchaser acknowledges and agrees that the information provided hereunder may not be accurate or complete, and Seller does not intend for Purchaser to rely upon such information. To that end, Purchaser hereby further acknowledges and agrees that it has not, and will not, rely upon such information in entering into the Agreement or in purchasing the Property. Purchaser hereby further acknowledges that it will have, or has had, the opportunity to independently inspect the Property and will rely solely upon its own inspection of the Property in its purchase thereof. PURCHASER: By: Typed Name: � Title: Date: EXHIBITS EXHIBIT "D" Purchaser Eligibilitv Certification ("PEC"1 EXHIBITS EXHIBIT "E" CONFIDENTIALITY AGREEMENT (PROPERTY EVALUATION, REVIEW, SERVICE, OR PROPERTY SALES) This CONFIDENTIALITY AGREEMENT ("Agreement") is made as of this day of , 20_, by and between the Federal Deposit Insurance Corporation, in the capacity set forth on the signature page hereof ("FDIC"), and (1) (an individual) or (2) a organized under the laws of the State of ("Interested Party"). WHEREAS, FDIC has offered for sale certain real property together with any improvements thereon ("Property") more particularly described in Exhibit A, attached hereto and incorporated herein; WHEREAS, Interested Party has expressed an interest in evaluating, reviewing, servicing, or purchasing the Property; WHEREAS, in consideration of FDIC, its agents and representatives furnishing Interested Party with information regarding the Property, which information is contained in the documents identified in Schedule A attached hereto and incorporated herein, and which information is non- public, confidential, or proprietary in nature, Interested Party agrees to make certain agreements regarding such information, as well as all notes, analyses, compilations, studies, or other documents, whether prepared by Interested Party or others, which contain or otherwise reflect such information (such information, and such documents, are collectively herein referred to as the "Evaluation Material"). NOW, THEREFORE, in consideration of the promises and mutual covenants set forth below, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, FDIC and Interested Party enter into this Agreement: Section 1. Term. This Agreement shall become effective as of the date first written above, and shall terminate only upon consummation of a purchase and sale transaction relating to the Property, resulting in FDIC's conveyance of the Property to a purchaser wherein FDIC is no longer the recorded title holder of the Property. Section 2. Limitation on Use. Interested Party shall use the Evaluation Material solely for the purpose of evaluating, reviewing, or servicing the Property, evaluating the suitability of the Property for purchase, or the preparation of a bid for such purchase, and for no other purpose. EXHIBITS Section 3. Limited Access. Without the prior, written consent of FDIC, to be granted or withheld in FDIC's sole discretion, Interested Party shall not disseminate or divulge the Evaluation Material to any person or entity, other than as set forth below. Interested Party shall limit access to the Evaluation Material to such persons or entities who have a need to know the information contained in the Evaluation Material for the purpose of evaluating, reviewing or servicing the Property, or for the purpose of advising Interested Party on the suitability of the Property for purchase (including, without limitation, any prospective institutional lender from whom Interested Party may seek financing, for the purchase) and assisting Interested Party in the preparation of a bid for such purchase. Interested Party shall keep a record of the recipients of the Evaluation Materials. Interested Party shall be responsible for any breach of the Agreement by its partners, directors, officers, employees, agents, representatives, affiliates, successors, or assigns. Without the prior written consent of FDIC, which consent may be withheld in its sole discretion, Interested Party shall not directly or indirectly, contact, seek, or attempt to seek any information from any person other than FDIC regarding the Evaluation Material. Section 4. Confidentialitv. Interested Party agrees that Interested Party shall ensure that all persons or entities to whom it discloses the Evaluation Material shall keep the Evaluation Material confidential. This Agreement shall be inoperative as to particular portions of the Evaluation Material if such information (i) becomes generally available for the public other than as a result of a disclosure by Interested Party, its partners, directors, officers, employees, agents, representatives, affiliates, successors or assigns; (ii) was available to Interested Pariy on a non- confidential basis prior to its disclosure to Interested Pariy by FDIC; (iii) becomes available to Interested Party on a non-con�dential basis from a source other than FDIC which source, insofar as is known to Interested Party after reasonable inquiry, is not prohibited from making the disclosure to Interested Party; or (iv) is independently developed by Interested Party without use of the Evaluation Material. Section 5. Return of Documents. Unless otherwise directed by FDIC, Interested Party shall return and ensure that all persons or entities to whom it has disclosed the Evaluation Material shall return all copies of the Evaluation Material (whether prepared by Interested Party or others) to FDIC, upon the earliest of: (1) the,fifth (Sth) business day after receipt by Interested Party of notice from FDIC that FDIC has not accepted Interested Party's bid to purchase the Property; (2) the sixtieth (60th) day following the submission by Interested Party of its bid, whether of not Interested Party has received any notice from FDIC regarding such bid; or (3) Interested Party has completed its evaluating, reviewing or servicing of the Property. Interested Party will inform FDIC immediately of any improper disclosure of any of the Evaluation Material, and of any breach of any provision of this Agreement, which may come to Interested Party's attention; or Interested Party has completed servicing the Property. The return of all Evaluation Material to FDIC, as required by this Section 5, shall not relieve Interested Party of its obligations created by this Agreement regarding confidentiality and use of the Evaluation Material. Section 6. Other Disclosure. To the extent that Interested Party is required to disclose the , Evaluation Material pursuant to the requirements of any legal proceeding, Interested Party shall notify FDIC within one (1) business day of its knowledge of such legally required disclosure so that FDIC may seek an appropriate protective order and/or waive the Interested Party's compliance with this Agreement. Notice shall be both by telephone and in writing. In the EXHIBITS absence of a protective order or waiver, Interested Party may disclose that portion of the Evaluation Material which is required to be disclosed pursuant to such legal proceeding if, in the written opinion of its counsel, failure to disclose such Evaluation Material in any tribunal would subject Interested Party to liability for contempt, censure or other legal penalty or liability. Section 7. Liabilitv. If FDIC determines that Interested Party has breached any provision of this Agreement, FDIC may in its sole discretion, exercise any of all legal or equitable rights or remedies to which FDIC is entitled on account of Interested Party's breach. FDIC shall not be deemed to have waived any of its rights or remedies on account of its failure, delay or forbearance in exercising any such right or remedy in a particular instance. Section 8. Indemnification. Interested Party shall defend, indemnify and hold harmless FDIC from and against any and all claims, demands, causes of action, losses, damages, liabilities, judgments, costs, and expenses (including attorneys' fees) asserted against or incurred by FDIC as a result of any violation of, or failure to comply with, the provisions of this Agreement by Interested Party or any person or entity to whom it has disclosed the Evaluation Material. Section 9. Release of FDIC. Interested Party acknowledges and understands that some or all of the Evaluation Material may have been prepared by parties other than FDIC, and further acknowledges and understands that FDIC expressly disclaims all representations and warranties either express or implied, including, but not limited to any implied warranty of inerchantability or fitness for a particular purpose, and any warranty with respect to the content, completeness or accuracy of the Evaluation Material. Interested Party is responsible for assuring itself as to the content, completeness, or accuracy of the Evaluation Material, and any reliance on the . Evaluation Material shall be solely at Interested Parly's risk. Interested Party hereby releases FDIC from all claims, demands, causes of action, losses, damages, liabilities, judgments, costs and expenses (including attorneys' fees) asserted against or incurred by Interested Party by reason of Interested Party's reliance on or knowledge of the Evaluation Material or by any other reason. Section 10. Effect of Invalid Provision. The invalidity or unenforceability of any provision of this Agreement shall not affect or limit the validity or enforceability of any other provision hereof and such invalid or unenforceable provision shall be construed or deemed amended by the parties only to the extent necessary to make it valid and enforceable. Section 11. Miscellaneous. This Agreement represents the entire agreement between the Interested Party and FDIC relating to the receipt, use, and disclosure of the Evaluation Material, and may be amended only by written agreement of the parties hereto. This Agreement shall apply to and be binding upon Interested Party and its partners, directors, officers, employees, agents, representatives, affiliates, successors and assigns. The representative(s) signing this Agreement on behalf of the Interested Party represents that he or she is fully authorized to enter into the terms and conditions of this Agreement and to bind legally Interested Party. The construction, interpretation, and performance of this Agreement shall be governed by the laws of the United States of America, and to the extent that state law would apply under applicable federal law, the laws of the state where the Property is located, without regard to conflicts of law EXHIBITS principles thereof. Notices under this Agreement shall be addressed to the parties at the following addresses: If to FDIC, to: If to Interested Party, to: [SIGNATURE PAGE FOLLOWS] EXHIBITS IN WITNESS WHEREOF, FDIC and the Interested Party have executed this Agreement effective as of the day and year first above written. FDIC: Federal Deposit Insurance Corporation (check one) [X] as Receiver of [] in its corporate capacity as liquidator of [] as successor in interest to , as Receiver of Westsound Bank [Name of institution] FDIC: Interested Parly: By: By: Signature Signature Print Name Print Name Title Title S LS\DOCS 09�Generic ORE Contracls\Conf Agmo-ORE- (?-13-09)c doc EXHIBITS . SCHEDULE "A" List of Initiallv Furnished Documents • Title Commitment and Underlying Documents (dated 11/12/09) • Certi�cate of Occupancy � Plans and Specs • 2008 and 2009 Property Taxes • Site Plan • Floor Plan • Environmental Phase 1 from Premier Environmental Services, Inc, dated December 2009 EXHIBITS