Ordinance 4132CITY OF EDMONDS, WASHINGTON
Ordinance No. 4132
AN ORDINANCE of the City of Edmonds, Washington, authorizing the
execution and delivery of an amended and restated contingent loan agreement with
the Edmonds Public Facilities District and a collateral agreement with First
Financial Northwest Bank; authorizing certain other actions in connection
therewith; and fixing a time when the same shall be effective.
THE CITY COUNCIL OF THE CITY OF EDMONDS DOES ORDAIN AS FOLLOWS:
Section 1. Findings and Determinations. The City Council makes the following
findings and determinations:
1.1 Pursuant to chapter 67.28 RCW, the City of Edmonds, Washington (the "City"), is
authorized to acquire and operate "tourism -related facilities."
1.2 RCW 67.28.130 authorizes the City and the Edmonds Public Facilities District (the
"District") to participate in the financing of all or any part of a tourism -related facility on such
terms as may be fixed by agreement between the respective legislative bodies without submitting
the matter to a vote of the electors thereof, unless the provisions of the general laws of the State of
Washington applicable to the incurring of indebtedness require such submission.
1.3 Pursuant to RCW 67.28.130, Ordinance No. 3676, adopted by the City Council on
January 15, 2008, and Ordinance No. 3687, adopted by the City Council on June 3, 2008, the City
authorized the execution and delivery of a Contingent Loan Agreement (the "Original Contingent
Loan Agreement") with the District to provide credit support for $4,000,000 aggregate principal
amount of Sales Tax Obligation and Refunding Bonds, 2008, issued by the District, which are
currently outstanding in the aggregate principal amount of $2,655,000 (the "Refunded Bonds").
1.4 The District has determined to issue its Edmonds Public Facilities District Note,
2018 (the "Note") in the principal amount of not to exceed $2,803,516.08 to repay and redeem the
Refunded Bonds and to pay costs of issuance and sale of the Note.
1.5 First Financial Northwest Bank (the "Bank") has presented the District with an
offer to purchase the Note, and as a condition to the purchase, requires the City to purchase a
certificate of deposit from the Bank in an amount equal to the principal amount of the Note.
1.6 The City Council has determined that it is in the best interest of the City to authorize
the execution and delivery of an amendment and restatement of the Original Contingent Loan
Agreement to provide credit support for the Note and a collateral agreement with the Bank setting
forth the terms and conditions upon which the City will purchase a certificate of deposit from the
Bank to secure payment by the District of the principal of the Note.
Section 2. ARproval of Amended and Restated Contingent Loan Agreement. The
form of the First Amended and Restated Contingent Loan Agreement attached as Exhibit A, and
incorporated by this reference (the "Contingent Loan Agreement"), is approved, and the Mayor is
authorized and directed to execute and deliver the Contingent Loan Agreement on the City's behalf
with only such changes as may be consistent with its purpose and necessary, in the judgment of the
Mayor, to fill in blanks and conform to the details of the Note when issued.
Section 3. Further Loans to District Authorized. The City is authorized to make
additional loans to the District at the times, in the amounts, and subject to the terms and conditions
specified in the Contingent Loan Agreement.
Section 4. Transfer of Funds. The City shall make loans to the District under in
accordance with the terms and conditions specified in the Contingent Loan Agreement by
transferring money to the Note Fund (as defined in the Contingent Loan Agreement) for the
account of District at the times, in the amounts, and subject to the terms and conditions specified
in the Contingent Loan Agreement.
Section 5. Limitation on Principal Amount of Note. The provisions of Sections 2, 3,
and 4 of this ordinance are subject to the condition that at or prior to the execution and delivery of
the Contingent Loan Agreement, the City has received a certificate of Piper Jaffray & Co.,
municipal advisor to the District, that the principal amount of the Note does not exceed $3,000,000
and is not greater than the amount necessary to repay and redeem the Refunded Bonds and to pay
costs of issuance and sale of the Note.
Section d. Approval of Collateral Agreement. The form of the Assignment of Deposit
Account attached as Exhibit B, and incorporated by this reference (the "Collateral Agreement"),
is approved, and the Mayor is authorized and directed to execute and deliver the Collateral
Agreement on the City's behalf with only such changes as may be consistent with its purpose and
necessary, in the judgment of the Mayor, to fill in blanks and conform to the details of the Note when
issued.
Section 7. Authorization and Ratification. The Administrative Services Director, the
Mayor, and the other appropriate officers of the City are authorized and directed to take any actions
and to execute such documents as in their judgment may be necessary or desirable to carry out the
terms of, and complete the transactions contemplated in connection with, this ordinance, the
Contingent Loan Agreement, and the Collateral Agreement. The Administrative Services Director
is further authorized to give the City's approval where required under the Contingent Loan
Agreement or the resolution of the District authorizing issuance of the Note (the "Note
Resolution") if, in the sole judgment of the Administrative Services Director, such consent is in
the best interest of the City and all conditions in the Contingent Loan Agreement and Note
Resolution related to such consent are met. All actions previously taken in furtherance of and not
inconsistent with the provisions of this ordinance are hereby ratified and confirmed in all respects.
2
53162484.5
Section 8. Effective Date. This ordinance shall take effect and be in full force from
and after its passage and five days following its publication as required by law. This ordinance is
the exercise of a power delegated to the City Council and is not subject to referendum.
PASSED by the City Council at a regular open p blic meeti 7 thereof this 5th day of
November, 2018.--y
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APPROVED AS TO FORM:
Filed with the City Clerk:
November 2, 2018
Passed b_y_the City Council: _
November 5, 2018
Published:
November 8, 2018
Effective Date:
November 13, 2018
I HEREBY CERTIFY THIS TO BE A TRUE AND
CORRECT COPY OF THE ORIGINAL ON FILE IN
MY OFFICE AS PART OF THE OFFICIAL RECORDS
OF IT EDMONDS.
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CL R DATE
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53162494.5
EXHIBIT A
FIRST AMENDED AND RESTATED
CONTINGENT LOAN AGREEMENT
by and between
THE CITY OF EDMONDS
and
THE EDMONDS PUBLIC FACILITIES DISTRICT
relating to the
$2,803,54 6.08
EDMONDS PUBLIC FACILITIES DISTRICT NOTE, 2018
Dated as of November 15, 2018
This document prepared by:
Foster Pepper PLLC
1111 Third Avenue, Suite 3000
Seattle, Washington 98101
(206) 447-4400
52974391.8
TABLE OF CONTENTS
ARTICLE1. Recitals............................................................................................ 1
ARTICLE 2. Definitions...................................................................................... 3
ARTICLE 3. Loans to the District; Repayment Terms ........................................ 3
Section 3.1 Loans to the District 3
Section 3.2 Procedures Under Guarantee; Time and Amount of Loans 3
Section 3.3 Covenants Regarding Refunding, Debt Limit and Additional Bonds. 5
Section 3.4
Repayment Terms. 6
Section 3.5
Nature of District's Obligation 6
Section 3.6
Nature of City's Obligation 7
Section 3.7
City Acknowledgments 7
ARTICLE 4. Rights of City Upon Making Loans ................................................ 8
Section 4.1
Rights of the City 8
ARTICLE 5. Additional Obligations and Covenants ........................................... 8
Section 5.1
Agreement to Issue the Note 8
Section 5.2
Third -Party Beneficiary 8
Section 5.3
Representations and Warranties of the District. 9
Section 5.4
Additional Covenants and of the District. 9
ARTICLE 6. Remedies Upon Default................................................................ 10
Section 6.1
Remedies of City on Default 10
Section 6.2
Remedies of District on Default 11
Section 6.3 No Remedy Exclusive I
Section 6.4 No Implied Waiver 11
Section 6.5 Agreement to Pay Attorneys' Fees and Expenses 11
Section 6.6 Dispute Resolution 12
52974391.8
ARTICLE 7. Hold Harmless.............................................................................. 12
ARTICLE 8. Miscellaneous............................................................................... 13
Section 8.1 Continuing Disclosure Undertaking of the District 13
Section 8.2 Governing Law; Venue 14
Section 8.3 Notices 14
Section 8.4 Binding Effect 15
Section 8.5 Severability 15
Section 8.6 Amendments. 15
Section 8.7 Additional Bonds 15
Section 8.8 Waiver of Breach 16
Section 8.9 No Rights Created in Third Parties 16
Section 8. 1OTime of Essence 16
Section 8.11Effective Date of and Termination of Agreement 17
52974391.8
FIRST AMENDED AND RESTATED
CONTINGENT LOAN AGREEMENT
RELATING TO THE
$2,803,516.08
EDMONDS PUBLIC FACILITIES DISTRICT NOTE, 2018
This FIRST AMENDED AND RESTATED CONTINGENT LOAN AGREEMENT
(this "Agreement") is dated as of November 15, 2018, and amends and restates the
CONTINGENT LOAN AGREEMENT dated as of July 14, 2008 (the "Original Agreement"),
by and between THE CITY OF EDMONDS (the "City"), a code city organized under the laws
of the State of Washington, and the EDMONDS PUBLIC FACILITIES DISTRICT (the
"District"), a municipal corporation established by the City of Edmonds and duly organized and
existing under and by virtue of the laws of the State of Washington (together, the "Parties").
The City and the District enter into this Agreement solely for the purpose of providing
credit support for the Edmonds Public Facilities District Note, 2018 (the "Note"), issued in the
principal amount of $2,803,516.08 pursuant to Resolution No. 2018-03 adopted by the Board of
Directors of the District (the "Board") on October 25, 2018 (the "Note Resolution").
The Parties agree as follows:
I.
Recitals
The following facts and circumstances form the background of this Agreement:
1. The District is a duly organized and legally existing municipal corporation of the
State of Washington. The District and the City are authorized by applicable provisions of state
law, including chapters 35.57 and 35.59 RCW and RCW 82.14.390, to acquire, construct, own,
remodel, maintain, equip, repair, and operate a regional center (including multipurpose
community centers and special events centers) and related parking facilities.
2. The City and the District have the authority to enter into interlocal agreements
under chapters 35.57, 35.59, and 67.28 RCW for joint and cooperative action, including
provisions to finance joint or cooperative undertakings, multipurpose community centers,
regional centers, and tourism -related facilities, and to provide for services to be provided by one
government to another.
3. The Board previously found and determined that the residents of the District and
the region would benefit from the District's acquisition, construction, operation, and maintenance
of a performing arts center, known as the Edmonds Center for the Arts (the "Regional Center"),
which provides for meetings, conferences, community events, trade shows, and artistic, musical,
theatrical, or other cultural exhibitions, presentations, or performances.
4. As authorized by RCW 35.57.040(1)(d) and RCW 82.14.390, the District has
since 2001 imposed and collected a 0.033% sales and use tax to assist in financing the design,
development, acquisition, construction, operation, and management of the Regional Center,
which taxing authority will expire when the bonds issued to finance the construction of the
Regional Center and related parking facilities are retired, but not later than 2026, which is twenty-
five years after the tax was first collected.
5. In 2017, the State Legislature amended RCW 82.14.390 so that the District's
taxing authority will expire when the bonds issued to finance or refinance the construction of the
Regional Center and related parking facilities are retired, but not later than 2041, which is forty
years after the tax was first collected.
6. The District has entered into the County PFD Agreement (the "County PFD
Agreement") with the City, the Snohomish County Public Facilities District (the "County PFD")
and Snohomish County (the "County"), dated November 4, 2002, as amended, regarding the joint
development and operation of the Regional Center and pursuant to which the City, the County
PFD, and the County agreed to make payments to the District to support such joint development
and operation, and pursuant to which the District has agreed to make certain payments to the City
in support of the City's Limited Tax General Obligation Refunding Bonds, 2012 (the "City
Bonds") issued to refund bonds issued by the City to pay a portion of the costs of acquisition and
development of the Regional Center.
7. In Section C. L(b) of the County PFD Agreement, the parties "reserve[d] the right
to make or to agree to make, additional payments or transfers among themselves with respect to
the Edmonds Center For the Arts, so long as such agreements and/or payments are consistent
with the terms of this Agreement."
8. Pursuant to RCW 35.57.030 and chapter 39.53 RCW, the Board desires to issue
its $2,803,516.08 Edmonds Public Facilities District Note, 2018 (the "Note"), payable from Sales
Tax Revenue and General Revenue (as described herein) for the purpose of (i) refunding the
District's outstanding Sales Tax Obligation and Refunding Bonds, 2008 (the "Refunded Bonds");
and (ii) paying the costs of issuance and sale of the Note.
52974391.8 2
9. In connection with the issuance of the Refunded Bonds, the City and the District
entered into the Original Agreement. As of December 17, 2017, the aggregate principal amount
of outstanding loans made by the City to the District pursuant to the Original Agreement was
$1,254,066.05.
10. The District has requested that the City provide, for the benefit of the holders of
the Note, credit support to the District to permit the District to obtain the financing described
herein at the lowest interest rate available.
11. The City is willing to provide credit support for the Note and has authorized the
execution of this Agreement pursuant to Ordinance No. 4132, adopted on November 5, 2018.
II.
Definitions
Unless the context clearly requires otherwise, capitalized terms used in this Agreement
have the meanings given such terms in the Note Resolution.
M.
Loans to the District; Repayment Terms
A. Loans to the District. The City shall lend money to the District at the times
and in the amounts set forth in Section 3.2. The District shall borrow the amounts described
above from the City pursuant to this Agreement for the purpose of paying debt service on the
Note. The City irrevocably agrees to disburse all loans made hereunder directly to the District,
and the District irrevocably agrees to immediately apply all such amounts received by it for the
purpose of meeting its obligations under the Note. The aggregate principal amount of outstanding
loans to be made by the City pursuant to this Agreement shall not exceed the original principal
amount of the Refunded Bonds, plus all interest accrued on the Refunded Bonds and the Note.
B. Procedures Under Guarantee; Time and Amount of Loans.
1. Notice of Insufficiency. On the 1 st day of the month preceding each Debt Service
Payment Date (or if the 1 st is not a Business Day, then on the next Business Day), the District
shall review the amount on deposit in the Note Fund to determine whether there will be sufficient
money available in the Note Fund to make the required payment due on the upcoming Debt
Service Payment Date. If, upon such review, it appears that the money available in the Note Fund
will be insufficient to make that payment, the District shall provide the City a notice in
52974391.8
substantially the form attached hereto as Exhibit A (a "Notice of Insufficiency") within five days
after the date on which the review was required. Failure of the District to give a Notice of
Insufficiency to the City shall not relieve the City of its obligation to make loans upon demand
by the District under subsection (4) of this Section.
2. Budgeting for Loans. Upon receipt of a Notice of Insufficiency from the District,
the City shall, to the extent necessary, include in its budget the amounts required to make the
loans described in subsection (4) of this Section. If the need to budget for such loans was not
reasonably foreseeable at the time the City prepared its budget, the City shall budget for such
loans under Title 35A RCW and the Edmonds Municipal Code in sufficient time to provide for
the loans described in subsection (4) of this Section.
3. Cancellation Notices. If, at any time before 10:00 a.m. (Pacific time) on the 24th
day of the month preceding a Debt Service Payment Date for which the District has given a
Notice of Insufficiency (or, if the 24th is not a Business Day, the Business Day preceding the
24th), the District determines that there will be sufficient money available in the Note Fund to
make the required payment due on the upcoming Debt Service Payment Date, the District shall
provide, prior to 5:00 p.m. on the same day, a notice to the City in substantially the form attached
hereto as Exhibit B (a "Cancellation Notice"). Delivery of a Cancellation Notice by the District
to the City shall not relieve the City of its obligations to make loans upon demand by the District
under subsection (4) of this Section.
4. Loans. For as long as the Note remains outstanding, the City shall, no later than
10:00 a.m. on the Business Day preceding that Debt Service Payment Date, lend to the District
an amount that, when added to the money available in the Note Fund, is sufficient to make all
make all payments of principal of and interest on the Note due on the upcoming Debt Service
Payment Date. The City shall, upon demand by the District in accordance with Section 3.1, cause
the amount of each loan hereunder to be transferred to the District in United States Dollars and
in immediately available funds.
5. Method of Notice. Notices of Insufficiency and Cancellation Notices shall be sent
by the District to the City Administrative Services Director by hand delivery or email (which
email shall be promptly confirmed by telephone communication to the City Administrative
Services Director). The original of each such notice also shall be mailed to the City pursuant to
Section 8.3. Any failure by the District to send such notices shall not nullify the City's obligation
to make loans to the District hereunder, but may result in a delay by the City in transferring loan
amounts to the District.
6. Assumed Payment Under County PFD Agreement. Solely for the purpose of
determining whether sufficient money will be available in the Note Fund on any Debt Service
Payment Date, the parties may assume that the City will make payments to the District at the
times, and in the amounts, required by the County PFD Agreement, except to the extent expressly
modified by this Agreement.
52974391.8 4
C. Covenants Regarding Refunding, Debt Limit and Additional Bonds.
1. The District covenants that: (a) the final maturity of the Note shall not be later
than December 31, 2028; and (b) in each year that the Refunded Bonds were scheduled to be
outstanding, the debt service payable on the Note shall be less than the debt service that would
be payable on the Refunded Bonds if they were not refunded.
2. The District does not intend to submit this Agreement or any indebtedness created
hereunder to qualified electors of the District for approval. Under RCW 35.57.030 and existing
laws, the District may incur non -voted indebtedness in an aggregate amount equal to one-half of
one percent of the value of the taxable property within the District. In light of the foregoing, and
to comply with RCW 67.28.130, the District agrees not to incur additional indebtedness after the
Note is issued unless prior written approval is obtained in accordance with Section 8.7 of this
Agreement and Section 17 of the Note Resolution.
3. In the event the District lacks sufficient non -voted debt capacity to incur
indebtedness resulting from a loan from the City in the amount determined under Section 3.2, the
District shall incur indebtedness for an amount equal to the District's remaining non -voted debt
capacity, if any, and any loan amount greater than the District's then -remaining non -voted debt
capacity shall be deemed an equity payment by the City to the District in exchange for an interest
in the Regional Center, which need not be repaid pursuant to Section 3.4. Within 60 days after
any such equity payment by the City, the District shall deliver to the City a quitclaim deed
conveying to the City a tenancy -in -common interest in the Regional Center. Such interest shall
be a percentage ownership interest in the Regional Center, the numerator of which shall be the
sum of such equity payment and the costs of transferring title and recording such quitclaim deed,
and the denominator of which shall be the aggregate original principal amounts of. (a) the
Refunded Bonds, (b) all bonds issued by the City to finance the Regional Center, and (c) any
other bonds issued by the District to finance the Regional Center (excluding from clause (c) the
Note, the Prior Note (as defined in the Original Agreement) and any bonds, or any portion
thereof, issued to refinance bonds issued by the City or the District to finance the Regional
Center).
4. The City will reconvey to the District, by means of a quitclaim deed, all of the
City's interest in the Regional Center acquired pursuant to subsection (3) of this Section if the
District pays to the City an amount equal to the sum of:
a. all payments made by the City to the District in exchange for an
interest being reconveyed to the District; plus
b. all costs incurred by the City relating to the transfer of title and
recording of deed(s); plus
C. interest on the sum of the amounts described by clauses (a) and (b),
calculated from the date(s) of the City's payment thereof; plus
52974391.8 5
d. the costs of transferring title to the District and recording such
quitclaim deed.
The rate of interest to be used for purposes of this calculation shall be the rate described in Section
3.4(2).
5. The transfers of interest authorized by this Section are intended to reflect the joint
and cooperative nature of the financing of the Regional Center pursuant to chapters 35.57, 35.59,
and 67.28 RCW.
D. Repayment Terms.
1. Repayment Terms. The principal amount of each loan to the District hereunder,
together with interest thereon calculated as set forth in subsection (2) of this Section, shall be
repaid by the District from available Sales Tax Revenue and General Revenue during each
calendar year after (a) the Note Fund has been fully funded for such calendar year and
(b) reasonable provision has been made for the operating expenses of the Regional Center. Such
payments will be applied first, to costs owed to the City, second, to interest owed to the City on
account of outstanding loans made under this Agreement, and third, to the principal of all
outstanding loans made under this Agreement in the order in which such loans were made.
2. Interest Rate. Each loan made under the terms of this Agreement will bear
interest from the date of the loan until the date such loan is repaid. Interest on the loans will be
calculated on the basis of a 365/366-day year, for the actual number of days elapsed. The rate of
interest borne by each loan hereunder shall be a variable rate equal to the monthly average rate
of return on the State of Washington Local Government Investment Pool (or its successor), as
determined as of the last day of each month in which a loan is outstanding, and shall change
monthly as of the first day of each month in which a loan is outstanding. The City may in its
discretion charge a lower rate of interest. Absent manifest error, all calculations of the City
Administrative Services Director shall be binding upon the District.
3. Maturity. Unless paid earlier pursuant to subsection (1) of this Section, all loans
hereunder shall mature on December 31, 2028. If any loan has not been repaid under this
Agreement on the loan maturity date described in this Section 3.4(3), the City shall acquire an
ownership interest in the Regional Center equal to the unpaid principal and interest due to the
City on that loan maturity date, and the District shall execute and deliver a quitclaim deed and
such other documents as may be necessary to convey this interest to the City as described in
Section 3.3, and the District's obligation to repay the loan under this Agreement shall be
discharged.
E. Nature of District's Obligation. The District's obligation to make the loan
repayments to the City from the sources identified herein and to perform and observe the other
52974391.8 6
obligations on its part contained herein shall be absolute and unconditional, and shall not be
subject to diminution by setoff, counterclaim, abatement, or otherwise. The full faith, credit, and
resources of the District are hereby pledged for the payment of all amounts owed to the City
under this Agreement. The District's obligations under this Agreement shall continue in effect
and shall survive the satisfaction of the District's obligations under the Note and the Note
Resolution until such time as principal and interest due to the City pursuant to any loan or loans
made hereunder have been repaid, together with any costs owed to the City pursuant to Section
6.5 and Article 7. To further its ability to make such payments to the City, the District hereby
irrevocably covenants and agrees to continue imposing the Sales Tax as permitted under
RCW 82.14.390 for so long as the Note remains outstanding or any District obligation to pay any
amount to the City under this Agreement remains outstanding.
F. Nature of City's Obligation. The City's obligation to advance funds to the
District in the amounts, at the times, under the conditions, and in the manner described herein
shall be absolute and unconditional, and shall not be subject to diminution by setoff,
counterclaim, abatement, or otherwise. The full faith, credit, and resources of the City are pledged
irrevocably to make the loans, in the amounts, at the times, in the manner, and subject to the
limitations described herein, regardless of whether the Regional Center is operating at any
particular time. The obligations of the City hereunder shall terminate upon payment in full of the
principal of and interest on the Note. For each fiscal year during the term of this Agreement, the
City agrees that it will include in its budget and appropriate an amount that the City reasonably
expects to be necessary to fulfill its obligation to make loans to the District under the terms of
this Agreement. Failure to so budget shall not be a default under this Agreement if the City fulfills
its obligation to make loans to the District as required under this Article 3.
G. City Acknowledgments. The City acknowledges and agrees that the
District may pledge to the payment of the Note: (a) the loan proceeds it receives under this
52974391.8 7
Agreement; (b) the Sales Tax Revenues, junior to the lien granted in connection with the City's
Limited Tax General Obligation Refunding Bonds, 2012; and (c) the District's General Revenue.
IV.
Rights of City Upon Making Loans
A. Rights of the City. If the City has made any loans to the District under
this Agreement and such loans have not been repaid in full (whether or not the loan is in default),
the City may take any one or more of the following steps:
1. The City may have access to and inspect, examine, and make copies of the books
and records and any and all accounts and data of the District; and
2. With the consent of the parties to the County PFD Agreement, the City may, but
shall not be required to, appoint a manager (which may be the City) or a receiver for the Regional
Center. Any manager or receiver appointed pursuant to this subsection (2) shall have, in addition
to all the rights and powers customarily given to and exercised by receivers, all rights of the
District to manage, operate, and maintain the Regional Center and shall have all other rights of
the District to exercise its rights and powers in the same manner and to the same extent that the
District could do, including without limitation the execution, enforcement, and termination of
contracts providing for management or maintenance of the Regional Center, all on such terms as
are deemed best by the City to protect its interests under this Agreement. The City, or the manager
or receiver appointed by the City, shall be entitled to receive a reasonable fee for managing the
Regional Center. The City shall not enter into an agreement with a manager unless it receives
written confirmation from nationally recognized bond counsel that the agreement will not
adversely affect the tax-exempt nature of interest on the Note for federal income tax purposes.
V.
Additional Obligations and Covenants
A. Agreement to Issue the Note. The District shall issue the Note in
accordance with the Note Resolution and this Agreement in the principal amount of
$2,803,516.08, which amount does not exceed the amount necessary to refund the Refunded
Bonds and pay the costs of issuance and sale of the Note.
B. Third -Party Beneficiary. Each covenant and commitment of the District
in the Note Resolution is incorporated herein for the further benefit of the City, and the City shall
be a third -party beneficiary of the contract of the District set forth in the Note Resolution.
52974391.8
C. Representations and Warranties of the District.
1. Commencement of Construction Prior to January 1, 2004. The District
represents that it commenced construction (within the meaning of RCW 82.14.390) of the
Regional Center before January 1, 2004.
2. Regarding the Regional Center. The District has, and will have, as long as the
Note or any Additional Bonds remain outstanding, good, right, and lawful authority to own and
operate the Regional Center and to provide for the maintenance, operation, and improvement of
the Regional Center. The District shall not release or modify the obligations of any user of the
Regional Center that would in any way limit any such user's obligation to make payment of such
rents, rates, fees, or other charges imposed by the District for such use of the Regional Center.
The foregoing shall not prohibit the District from establishing reduced rates and charges, or
eliminating rates and charges, for the use of the Regional Center for certain classes of users of
the Regional Center if and as appropriate, as long as charges are applied on a fair and
nondiscriminatory basis.
D. Additional Covenants and of the District.
1. Operation of Regional Center. The District shall cause the Regional Center to be
operated and maintained in a business -like fashion (including the maintenance of proper and
customary property and liability insurance with respect to the Regional Center) as both a
"tourism -related facility" (within the meaning of RCW 67.28.080(7)) and a "regional center"
(within the meaning of RCW 35.57.020) and shall cause all books and records to be maintained
with respect thereto.
2. Reporting. The District shall provide the City Council Finance Committee with,
(a) each quarter, a report summarizing actual financial activity, and (b) each November, a report
summarizing financial expectations for the following year, and (c) within nine months after the
end of each year, complete financial statements for the year.
3. No Liens. Neither the City nor the District shall grant or permit any lien (other
than consensual liens such as contractors' liens) against the Regional Center or its interest therein
which, if unpaid, might become a lien or charge upon the Sales Tax Revenue, or any part thereof,
prior to or superior to the lien of the Note and any Additional Bonds, or which might impair the
security of the Note and any Additional Bonds.
4. Enforcement of Obligations. The District shall take all reasonable measures
permitted by law to enforce payment to it of all Sales Tax Revenue, including without limitation
any payments due to it under the County PFD Agreement, and shall at all times, to the extent
permitted by law, defend, preserve, and protect the rights, benefits, and privileges of the District
and of the Registered Owners under or with respect to the Note Resolution.
5. Ownership, Sale, Transfer, or Disposition of the Regional Center. The District
shall be the owner of the Regional Center except to the extent the City acquires any interest
52974391.8 9
therein pursuant to Section 3.3. Except pursuant to Section 3.3, the District will not sell, transfer
or otherwise dispose of any facilities or property (real or personal) comprising a part of the
Regional Center, except upon approval by resolution of the Board and only consistent with one
or more of the following:
a. The District in its discretion may sell, transfer, or dispose (each, as
used in this subsection, a "transfer") of facilities or property that is not material to
the operation of the Regional Center, or which has become unserviceable,
inadequate, obsolete, or unfit to be used in the operation of the Regional Center
or is no longer necessary, material, or useful to the operation of the Regional
Center; or
b. The District in its discretion may transfer facilities or property if
the District receives from the transferee in a bona fide, arm's-length transaction
an amount equal to the fair market value of the facilities or property so transferred.
As used herein, "fair market value" means the most probable price that a property
would bring in a competitive and open market under all conditions requisite to a
fair sale, the willing buyer and willing seller each acting prudently and
knowledgeably. The proceeds of any transfer under this paragraph (b) shall be
used (1) to promptly redeem, or irrevocably set aside for the redemption of, the
outstanding Note or Additional Bonds, and/or (2) to provide for all or part of the
cost of capital improvements and/or additions to or expansions of the Regional
Center.
Nothing in the foregoing is intended to restrict the transfer of the facilities or property to the City
pursuant to the County PFD Agreement or to permit transfers not permitted under the County
PFD Agreement.
VI.
Remedies Upon Default
A. Remedies of City on Default. Upon the occurrence of a default by the
District in its obligations hereunder, the City may proceed to protect and enforce its rights in
equity or at law, either in mandamus or for the specific performance of any covenant or
agreement contained herein, or for the enforcement of any other appropriate legal or equitable
remedy, as the City may deem most effectual to protect and enforce any of its rights or interests
52974391.8 10
hereunder; provided that the City may not enforce repayment of the loans until repayment in full
of the principal of and interest on the Note.
B. Remedies of District on Default. Upon the occurrence of a default by the
City in its obligations to make loans to the District hereunder, the District may proceed to protect
and enforce its rights in equity or at law, either in mandamus or for the specific performance of
any covenant or agreement contained herein, or for the enforcement of any other appropriate
legal or equitable remedy, as the District may deem most effectual to protect and enforce any of
its rights or interests hereunder.
C. No Remedy Exclusive. No remedy conferred upon or reserved to either
party by this Agreement is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to every other
remedy given under this Agreement or now or hereafter existing at law or in equity or by statute,
and either party hereto shall be free to pursue, at the same time, each and every remedy, at law
or in equity, which it may have under this Agreement, or otherwise.
D. No Implied Waiver. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised from time to time and as often as
may be deemed expedient. For the exercise of any remedy, it shall not be necessary to give any
notice, other than such notice as may be expressly required herein.
E. Agreement to Pay Attorneys' Fees and Expenses. If a default arises under
any of the provisions of this Agreement and either party hereto should employ attorneys or incur
other expenses for the collection of amounts due under this Agreement or the enforcement of
performance or observance of any obligation or agreement on the part of the other party contained
52974391.8 11
in this Agreement, on demand therefor, the nonprevailing party shall pay or reimburse the
prevailing party for the reasonable fees of such attorneys and such other expenses so incurred.
F. Dispute Resolution. The parties may mediate any dispute over the
interpretation of any terms or conditions under this Agreement. Mediation will be made available
upon request of either party. The costs associated with any such mediation shall be shared equally
by the parties.
VII.
Hold Harmless
As between the City and the District, the District shall assume the risk of, be liable for,
and pay all damage, loss, cost, and expense of any party, including its employees, arising out of
the performance of this Agreement, except that caused by negligence and/or willful misconduct
solely of the City and its employees acting within the scope of their employment. The District
shall hold harmless the City and its officers, elected officials, agents, and employees against all
claims, losses, suits, actions, costs, counsel fees, litigation costs, expenses, damages, judgments,
or decrees by reason of damage to any property or business and/or any death, injury, or disability
to or of any person or party, including any employee, arising out of or suffered, directly or
indirectly, by reason of or in connection with the performance of this Agreement or any act, error,
or omission of the District or the District's employees, agents, or subcontractors, whether by
negligence or otherwise, but only after repayment in full of the principal of and interest on the
Note.
The District's obligation shall include, without limitation, investigating, adjusting, and
defending all claims against the City alleging loss from action, error, or omission or breach of
any common law, statutory, or other delegated duty by the District or the District's employees,
agents, or subcontractors.
52974391.8 12
VIII.
Miscellaneous
A. Continuing Disclosure Undertaking of the District. If required to meet the
conditions of paragraph (d)(2) of United States Securities and Exchange Commission ("SEC")
Rule 15c2-12 (the "Rule"), as applicable to a participating underwriter for the Note, the District
shall undertake for the benefit of the holder of the Note to provide to the Municipal Securities
Rulemaking Board the following annual financial information, in an electronic format and
accompanied by identifying information, each as prescribed by the Municipal Securities
Rulemaking Board: (i) annual financial statements for the City prepared (except as noted in the
financial statements) in accordance with generally accepted accounting principles applicable to
Washington governmental units such as the City, as such principles may be changed from time
to time, which statements need not be audited, except, however, that if and when audited financial
statements are otherwise prepared and available to the City, they will be provided; (ii) statements
of authorized, issued and outstanding general obligation debt of the City; (iii) statements of
assessed valuation of property within the City subject to ad valorem taxation for the fiscal year;
and (iv) the ad valorem regular property tax levy rate and regular property tax levy rate limit for
the fiscal year.
Such annual financial information shall be provided not later than the last day of the ninth
month after the end of each fiscal year of the City (currently, a fiscal year ending December 31),
as such fiscal year may be changed as required or permitted by State law, commencing with the
City's fiscal year ending December 31, 2018. It may be provided in a single or multiple
documents, and may be included by specific reference to documents available to the public on
the Municipal Securities Rulemaking Board's Internet Web site or filed with the SEC.
52974391.8 13
The City's obligations under this undertaking shall terminate upon the legal defeasance
of the Note. In addition, the City's obligations under this undertaking shall terminate if those
provisions of the Rule that require the City to comply with this undertaking become legally
inapplicable in respect of the Note for any reason, as confirmed by an opinion of nationally
recognized bond counsel or other counsel familiar with federal securities laws delivered to the
City and the District, and the District provides timely notice of such termination to the Municipal
Securities Rulemaking Board.
B. Governing Law; Venue. This Agreement is governed by and shall be
construed in accordance with the substantive laws of the State of Washington and shall be
liberally construed so as to carry out the purposes hereof. Except as otherwise required by
applicable law, any action under this Agreement shall be brought in the Superior Court of the
State of Washington in and for Snohomish County.
C. Notices. Except as otherwise provided herein, all notices, consents, or
other communications required hereunder shall be in writing and shall be sufficiently given if
addressed and hand delivered or mailed by certified or registered mail, postage prepaid and return
receipt requested, as follows:
To the City: City of Edmonds
121 Fifth Avenue North
Edmonds, WA 98020
Attention: Finance/Administrative Services Director
Email: scott.james@edmondswa.gov
Telephone: (425) 771-0240
To the District: Edmonds Public Facilities District
410 Fourth Avenue North
52974391.8 14
Edmonds, WA 98020
Attention: Executive Director
Email: joe@ec4arts.org
Telephone: (425) 275-9485
The City or the District may designate any further or different addresses to which subsequent
notices, certificates, requests, or other communications shall be sent by giving notice of such
change to the other party. Notices shall be deemed served upon deposit of such notices in the
United States mail in the manner provided above.
D. Binding Effect. This Agreement shall inure to the benefit of the City, the
District, and the holders of the Note and shall be binding upon the City and the District and their
successors. This Agreement may not be assigned.
E. Severability. In the event any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate
or render unenforceable any other provision hereof.
F. Amendments. This Agreement may be amended, changed, modified, or
altered by an instrument in writing duly executed by the City and the District (or the successors
in title of each) if, in the opinion of bond counsel, such amendment will not adversely affect the
security for the Note or tax exemption of interest on the Note. This Agreement may not be
terminated until the Note is no longer outstanding, unless the City has assumed all liability for
payment of the principal of and interest on the Note when due and has pledged its full faith and
credit to such payment.
G. Additional Bonds. So long as the Note remains outstanding and this
Agreement remains in effect, the District shall not incur any additional indebtedness, other than
52974391.8 15
in the ordinary course of business, without the prior written consent of the City. Such consent
shall not be unreasonably withheld if the following conditions are met at the time:
a. The District is not in default under this Agreement or under the
Note Resolution;
b. The proceeds of the additional debt will be used to fund or refund
capital expenditures relating to the Regional Center;
C. The additional indebtedness will not cause the District to exceed
its non -voted debt capacity under RCW 35.57.030(1); and
d. No ownership interest in the Regional Center has been transferred
to the City under this Agreement that has not been transferred back to the District
under Section 3.3(4) of this Agreement.
Unless specified in a separate agreement or an amendment hereto, the City shall be under no
obligation to make loans hereunder to pay debt service on any additional debt.
H. Waiver of Breach. No waiver of any breach of any covenant or agreement
contained herein shall operate as a waiver of any subsequent breach of the same covenant or
agreement or as a waiver of any breach of any other covenant or agreement, and in case of a
breach by either party of any covenant, agreement, or undertaking, the nondefaulting party may
nevertheless accept from the other any payment or payments or performance hereunder without
in any way waiving its right to exercise any of its rights and remedies provided for herein or
otherwise with respect to any such default or defaults that were in existence at the time such
payment or payments or performance were accepted by it.
L No Rights Created in Third Parties. The terms of this Agreement are not
intended to establish or to create any rights in any persons or entities other than the City, the
District, and the respective successors and assigns of each.
J. Time of Essence. Time and all terms and conditions shall be of the
essence of this Agreement.
52974391.8 16
K. Effective Date of and Termination of Agreement. Except as amended
hereby, the Original Agreement is and remains in full force and effect. Except as provided in
Section 3.5, this Agreement shall terminate upon payment in full of all principal of and interest
on the Note. Section 3.3 and Article 7 shall survive the termination of this Agreement.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LEND MONEY, EXTEND
CREDIT, OR FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, the City and the District have caused this Agreement to be
executed in their respective names by their duly authorized officers, and have caused this
Agreement to be dated as of the date set forth on the first page hereof.
CITY OF EDMONDS, WASHINGTON EDMONDS PUBLIC FACILITIES
DISTRICT
Mayor President, Board of Directors
Attest: Attest:
City Clerk Secretary, Board of Directors
52974391.8 17
STATE OF WASHINGTON
ss.
COUNTY OF SNOHOMISH
I certify that I know or have satisfactory evidence that Dave Earling and Scott Passey are
the persons who appeared before me, and said persons acknowledged that said persons signed
this instrument, on oath stated that said persons were authorized to execute the instrument and
acknowledged it as the Mayor and Clerk, respectively, of the CITY OF EDMONDS, a municipal
corporation of the State of Washington, to be the free and voluntary act of such municipal
corporation for the uses and purposes mentioned in the instrument.
52974391.8
Dated this day of November, 2018.
(Signature of Notary)
(Legibly Print or Stamp Name of Notary)
Notary public in and for the State of Washington, residing at
My appointment expires
STATE OF WASHINGTON
ss.
COUNTY OF SNOHOMISH
I certify that I know or have satisfactory evidence that and
are the persons who appeared before me, and said persons acknowledged that
said persons signed this instrument, on oath stated that said persons were authorized to execute
the instrument and acknowledged it as the President and Secretary, respectively, of the Board of
Directors of the EDMONDS PUBLIC FACILITIES DISTRICT, a municipal corporation of the
State of Washington, to be the free and voluntary act of such municipal corporation for the uses
and purposes mentioned in the instrument.
52974391.8
Dated this day of November, 2018.
(Signature of Notary)
(Legibly Print or Stamp Name of Notary)
Notary public in and for the State of Washington, residing at
My appointment expires
Exhibit A
Form of Notice of Insufficiency
City of Edmonds VIA EMAIL
121 Fifth Avenue North (with telephone confirmation)
Edmonds, WA 98020
Attention: Finance/Administrative Services Director
Re: NOTICE OF INSUFFICIENCY
Edmonds Public Facilities District Note, 2018
The undersigned, a duly authorized officer of the Edmonds Public Facilities District (the "District"),
hereby certifies to the City of Edmonds, Washington (the "City"), with reference to the First Amended
and Restated Contingent Loan Agreement (the "Agreement") dated as of November 15, 2018, by and
between the City and the District, and the above -captioned note (the "Note"), that:
1. Next Debt Service Payment Date: , 20_
2. Debt service due: Principal $
Interest $
Total $
3. There will be insufficient money available in the Note Fund on the date described in clause (1)
to make the debt service payments described in clause (2):
Amount expected to be on deposit in the District's Note Fund: $
Plus the payment the City is required to make on 120
pursuant to the County PFD Agreement: $
Total available for debt service: $
4. Amount of the loan requested is calculated as follows:
Debt service total listed in clause (2): $
Less the amount available for debt service, as listed in clause (3): $
Loan Amount:
Pursuant to Section 3.2 of the Agreement, the City is requested to make a loan to the District no later than
, 20_, in the amount listed in clause (4). The City shall cause such amount to be transferred
to the District's Note Fund, in United States Dollars and in immediately available funds.
Any capitalized term used herein and not defined shall have the meaning assigned to such term in the
Agreement or, if not therein defined, as defined in the Note Resolution. The individual signing below
hereby represents that he or she is an officer of the undersigned and is duly authorized to execute and
deliver this document.
52974391.8
Dated: , 20
EDMONDS PUBLIC FACILITIES DISTRICT
[Executive Director or designee]
52974391.8
Exhibit B
Form of Cancellation Notice
City of Edmonds VIA EMAIL
121 Fifth Avenue North (with telephone confirmation)
Edmonds, WA 98020
Attention: Finance/Administrative Services Director
Re: CANCELLATION NOTICE
Edmonds Public Facilities District Note, 2018
The undersigned, a duly authorized officer of the Edmonds Public Facilities District (the "District"), hereby
certifies to the City of Edmonds, Washington (the "City"), with reference to the First Amended and Restated
Contingent Loan Agreement (the "Agreement") dated as of November 15, 2018, by and between the City
and the District, and the above -captioned note (the "Note"), that:
1. Next Debt Service Payment Date: 520
2. Debt service due: Principal $
Interest $
Total $
3. There will be sufficient money available in the Note Fund on the date described in clause (1) to
make the debt service payments described in clause (2):
Amount expected to be on deposit in the District's Note Fund: $
Plus the payment the City is required to make on 120
pursuant to the County PFD Agreement: $
Total available for debt service:
4. The District's Notice of Insufficiency and loan request delivered on , 20_ is hereby
cancelled.
Pursuant to Section 3.2 of the Agreement, the City is requested NOT to make a loan to the District with
respect to the debt service payments described in clause (2).
Any capitalized term used herein and not defined shall have the meaning assigned to such term in the
Agreement or, if not therein defined, as defined in the Note Resolution. The individual signing below hereby
represents that he or she is an officer of the undersigned and is duly authorized to execute and deliver this
document.
53162484.5
Dated: , 20
EDMONDS PUBLIC FACILITIES DISTRICT
[Executive Director or designee]
53162484.5
EXHIBIT B
ASSIGNMENT OF DEPOSIT ACCOUNT
Principal Loan Date Maturity Loan No Call / Coll Account Officer Initials
$2,803,516.08 11-15- 12-31- tbd
2018 2028
LUMM
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any
particular loan or item.
Any item above containing —*— has been omitted due to text length limitations.
Borrower: Edmonds Public Facilities District Lender: First Financial Northwest Bank
410 Fourth Avenue North 207 Wells Ave S
Edmonds, WA 98020 PO Box 1130
Renton, WA 98057
Grantor: City of Edmonds
410 Fourth Avenue North
Edmonds, WA 98020
THIS ASSIGNMENT OF DEPOSIT ACCOUNT dated November 15, 2018, is made and executed among City of Edmonds
("Grantor"); Edmonds Public Facilities District ("Borrower"); and First Financial Northwest Bank ("Lender").
ASSIGNMENT. For valuable consideration, the sufficiency and receipt of which are hereby acknowledged, Grantor assigns
and grants to Lender a security interest in the Collateral, including without limitation the deposit accounts described below, to
secure Borrower's payment of the outstanding Indebtedness and agrees that Lender shall have the rights stated in this
Agreement with respect to the Collateral, in addition to all other rights which Lender may have by law.
COLLATERAL DESCRIPTION. The word "Collateral" means the following described deposit account or accounts (collectively
called "Account"):
CD Account Number xxxx-xx with Lender with an initial balance of $2,803,516.08
together with (A) all interest on the Account, whether now accrued or hereafter accruing; (B) all additional deposits hereafter
made to the Account; (C) any and all proceeds from the Account; and (D) all renewals, replacements and substitutions of
the foregoing CD. Until the Indebtedness has been paid in full, Grantor agrees, as necessary, to renew and extend the maturity
dates of any Collateral having a maturity date prior to December 31, 2028. The Annual Percentage Yield on the Collateral shall
remain fixed at 2.10% until December 31, 2028. Grantor agrees to maintain account balances in said Collateral which, in the
aggregate, equal or exceed the original principal balance on the Note less the aggregate amounts withdrawn from the Account
by Lender to pay Indebtedness. Grantor may withdraw, at any time, any funds in the Account, including any interest that
Grantor has earned on funds in the Account, so long as the amount remaining in the Account is not less than the original
principal balance on the Note less the aggregate amounts withdrawn from the Account by Lender to pay Indebtedness. Lender
agrees to release said excess amount to Grantor within ten (10) days of receipt of Grantor's written request therefor, and agrees
not to assess an early withdrawal penalty for any such withdrawal.
BORROWER'S WAIVERS AND RESPONSIBILITIES. Except as otherwise required under this Agreement or by applicable
law, (A) Borrower agrees that Lender need not tell Borrower about any action or inaction Lender takes in connection with this
Agreement; (B) Borrower assumes the responsibility for being and keeping informed about the Collateral; and (C) Borrower
waives any defenses that may arise because of any action or inaction of Lender, including without limitation any failure of
53162484.5
Lender to realize upon the Collateral or any delay by Lender in realizing upon the Collateral; and Borrower agrees to remain
liable under the Note no matter what action Lender takes or fails to take under this Agreement.
GRANTOR'S REPRESENTATIONS AND WARRANTIES. Grantor warrants that: (A) this Agreement is executed at
Borrower's request and not at the request of Lender; (B) Grantor has the full right, power and authority to enter into this
Agreement and to pledge the Collateral to Lender; (C) Grantor has established adequate means of obtaining from Borrower on
a continuing basis information about Borrower's financial condition; and (D) Lender has made no representation to Grantor
about Borrower or Borrower's creditworthiness.
GRANTOR'S WAIVERS. Grantor waives all requirements of presentment, protest, demand, and notice of dishonor or non-
payment to Borrower or Grantor, or any other party to the Indebtedness or the Collateral. Lender may do any of the following
with respect to any obligation of Borrower, without first obtaining the consent of Grantor: (A) grant any extension of time for
any payment, (B) grant any renewal, (C) permit any modification of payment terms or other terms, or (D) exchange or release
any Collateral or other security. No such act or failure to act shall affect Lender's rights against Grantor or the Collateral.
Notwithstanding the foregoing, Lender shall not extend the date for any payment by Borrower on the Note without the prior
written consent of Grantor.
RIGHTS OF SETOFF. Grantor hereby acknowledges that Lender has a right of setoff on the funds in the Account to pay the
Indebtedness, as well as in any renewed or substituted CD maintained or opened by Grantor prior to December 31, 2028 for
the purpose of securing Borrower's repayment of the Note, up to the original principal balance on the Note less the aggregate
amounts withdrawn from the Account by Lender to pay Indebtedness, until the principal of and interest on the Note are paid in
full. Lender shall have no right of setoff in any amount in the Account other than to pay the Indebtedness, or in any of Grantor's
other accounts with Lender (whether checking, savings, or some other account, held individually by Grantor or jointly with
someone else), or any other accounts Grantor may open in the future which have not been opened for the purpose of extending
or replacing matured Collateral.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the
Collateral, Grantor represents and promises to Lender that:
Ownership. Grantor is the lawful owner of the Collateral free and clear of all loans, liens, encumbrances, and claims
except as disclosed to and accepted by Lender in writing.
Right to Grant Security Interest. Grantor has the full right, power, and authority to enter into this Agreement and to
assign the Collateral to Lender.
No Prior Assignment. Grantor has not previously granted a security interest in the Collateral to any other creditor.
No Further Transfer. Grantor shall not sell, assign, encumber, or otherwise dispose of any of Grantor's rights in the
Collateral except as provided in this Agreement.
No Defaults. There are no defaults relating to the Collateral, and there are no offsets or counterclaims to the same.
Grantor will strictly and promptly do everything required of Grantor under the terms, conditions, promises, and agreements
contained in or relating to the Collateral.
Proceeds. Any and all replacement or renewal certificates, instruments, or other benefits or proceeds related to the
Collateral that are received by Grantor shall be held by Grantor in trust for Lender and immediately shall be delivered by
Grantor to Lender to be held as part of the Collateral.
Validity; Binding Effect. This Agreement is binding upon Grantor and Grantor's successors and assigns and is legally
enforceable in accordance with its terms.
Financing Statements. Grantor authorizes Lender to file a UCC financing statement, or alternatively, a copy of this
Agreement to perfect Lender's security interest. At Lender's request, Grantor additionally agrees to sign all other
documents that are necessary to perfect, protect, and continue Lender's security interest in the Collateral. Grantor will
pay all filing fees, title transfer fees, and other fees and costs involved unless prohibited by law or unless Lender is required
by law to pay such fees and costs. Lender may file a copy of this Agreement as a financing statement.
LENDER'S RIGHTS AND OBLIGATIONS WITH RESPECT TO THE COLLATERAL. Lender acknowledges that under RCW
62A.9A-109(d)(14), Article 9 of the UCC does not apply to a transfer of a governmental unit of the State of Washington, including
Grantor and Borrower. While this Agreement is in effect, Lender may retain the rights to possession of the Collateral, together
with any and all evidence of the Collateral, such as certificates or passbooks. This Agreement will remain in effect until (a)
there no longer is any Indebtedness owing to Lender; (b) all other obligations secured by this Agreement have been fulfilled;
and (c) Grantor, in writing, has requested from Lender a release of this Agreement.
PUBLIC DEPOSITARY. Lender acknowledges that under RCW 39.58.080, except as otherwise provided therein, no public
funds, including money of Grantor or Borrower, may be deposited in investment deposits other than in a Public Depositary.
Lender warrants that Lender is a Public Depositary. At any time during the term of this Agreement that Lender ceases to be a
Public Depositary, this Agreement shall terminate immediately, and Lender shall promptly pay to Grantor all funds then on
deposit in the Account.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the
Collateral or if Grantor fails to comply with any provision of this Agreement, including but not limited to Grantor's failure to
discharge or pay when due any amounts Grantor is required to discharge or pay under this Agreement, Lender on Grantor's
behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging
or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Collateral and
paying all costs for insuring, maintaining and preserving the Collateral. All such expenditures incurred or paid by Lender for
such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date
of repayment by Grantor. All such expenses will (A) be payable by Grantor on demand by Lender. This Agreement also will
53162484.5
secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be
entitled upon Default.
LIMITATIONS ON OBLIGATIONS OF LENDER. Lender shall use ordinary reasonable care in the physical preservation and
custody of any certificate or passbook for the Collateral but shall have no other obligation to protect the Collateral or its value.
In particular, but without limitation, Lender shall have no responsibility (A) for the collection or protection of any income on the
Collateral; (B) for the preservation of rights against issuers of the Collateral or against third persons; (C) for ascertaining any
maturities, conversions, exchanges, offers, tenders, or similar matters relating to the Collateral; nor (D) for informing the
Grantor about any of the above, whether or not Lender has or is deemed to have knowledge of such matters.
DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:
Payment Default. Borrower fails to make any principal or interest payment when due under the Note.
Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in
(a) this Agreement; and (b) the Contingent Loan Agreement between Borrower and City dated July 14, 2008, as amended
in the First Amended and Restated Contingent Loan Agreement between Borrower and Grantor dated November 15,
2018.
False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor under this
Agreement is false or misleading in any material respect, either now or at the time made or furnished or becomes false or
misleading at any time thereafter.
Defective Collateralization. This Agreement or the Note ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien) at any time and for any reason due to the
action or failure to take action of Grantor or Borrower.
Insolvency. The insolvency of Borrower or Grantor, the appointment of a receiver for any part of Borrower's or Grantor's
property, any general assignment for the benefit of creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against Borrower or Grantor.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial
proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency
against any collateral securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including
deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor
as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower
or Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety
bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an
adequate reserve or bond for the dispute.
Cure Provisions. If any default, other than a default in payment, is curable and if Grantor and Borrower have not been
given a notice of a breach of the same provision of this Agreement within the preceding twelve (12) months, it may be
cured if Grantor or Borrower, after Lender sends written notice to Grantor and Borrower demanding cure of such default:
(1) cures the default within thirty (30) days; or (2) if the cure requires more than thirty (30) days, Grantor and Borrower
immediately initiate steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably
practical.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default, or at any time thereafter, Lender may
exercise any one or more of the following rights and remedies, in addition to any rights or remedies that may be available at
law, in equity, or otherwise:
Application of Account Proceeds. Lender may take directly sufficient funds in the Account, up to the original principal
balance on the Note less the aggregate amounts withdrawn from the Account by Lender to pay Indebtedness, to cure the
default and apply them to the outstanding interest and principal of the Note. Any excess funds remaining in the Account
after the principal of and interest on the Note have been paid in full will be paid to Grantor. Borrower agrees, to the extent
permitted by law, to pay any deficiency after application of the proceeds of the Account to the Indebtedness.
Transfer Title. Lender may effect transfer of title upon sale of all or part of the Collateral.
Other Rights and Remedies. Lender shall have and may exercise any or all of the rights and remedies of a secured
creditor under the provisions of the Washington Uniform Commercial Code, at law, in equity, or otherwise.
Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment against Borrower for any deficiency
remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights
provided in this section.
Election of Remedies. Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether
evidenced by this Agreement or by any other writing, shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Grantor or Borrower under this Agreement, after Grantor's or
Borrower's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies.
Cumulative Remedies. All of Lender's rights and remedies, whether evidenced by this Agreement or by any other writing,
shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of
Grantor or Borrower under this Agreement, after Grantor's or Borrower's failure to perform, shall not affect Lender's right
to declare a default and to exercise its remedies.
53162484.5
NOTICE OF ORAL AGREEMENTS. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND
CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement:
Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and
agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement
shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration
or amendment.
Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's
attorneys' fees and Lender's legal expenses, incurred in connection with the enforcement of Lender's rights against
Grantor under this Agreement. Lender may hire or pay someone else to help enforce Lender's rights against Grantor
under this Agreement, and Grantor shall pay the costs and expenses of such enforcement. Costs and expenses include
Lender's attorneys' fees and legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses
for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post -judgment collection services. Grantor also shall pay all court costs and such additional fees as may be
directed by the court. Under no circumstances shall Grantor be responsible for any costs and expenses of Lender in the
enforcement of Lender's rights against Borrower under this Agreement or any of the Related Documents. Under no
circumstances shall Borrower be responsible for any costs and expenses of Lender in the enforcement of Lender's rights
against Grantor under this Agreement or any of the Related Documents.
Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to
interpret or define the provisions of this Agreement.
Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not
preempted by federal law, the laws of the State of Washington without regard to its conflicts of law provisions.
This Agreement has been accepted by Lender in the State of Washington.
Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of
King County, State of Washington.
Preference Payments. Any monies Lender pays because of an asserted preference claim in Borrower's bankruptcy will
become a part of the Indebtedness and shall be payable by Borrower as provided in this Agreement and the Related
Documents. Any monies Lender pays because of an asserted preference claim in Grantor's bankruptcy shall be payable
by Grantor as provided in this Agreement.
No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver
is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate
as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or
constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of
this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a
waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of
Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute
continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted
or withheld in the sole discretion of Lender.
Notices. Subject to applicable law, and except for notice required or allowed by law to be given in another manner, any
notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered,
when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized
overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for
notices under this Agreement by giving formal written notice to the other parties, specifying that the purpose of the notice
is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's
current address. Subject to applicable law, and except for notice required or allowed by law to be given in another manner,
if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors.
Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or
unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable
as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Agreement.
Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not
affect the legality, validity or enforceability of any other provision of this Agreement.
Successors and Assigns. Subject to any limitations stated in this Agreement on transfer of Grantor's interest, this
Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the
Collateral becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's
successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing
Grantor from the obligations of this Agreement.
Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor or
Lender in this Agreement shall survive the execution and delivery of this Agreement, shall be continuing in nature, and
shall remain in full force and effect until such time as Borrower's Indebtedness shall be paid in full.
Time is of the Essence. Time is of the essence in the performance of this Agreement.
53162484.5
Waive Jury. All parties to this Agreement hereby waive the right to any jury trial in any action, proceeding, or
counterclaim brought by any party against any other party.
DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement.
Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United
States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as
the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such
terms in the Uniform Commercial Code:
Account. The word "Account" means the deposit account described in the "Collateral Description" section.
Agreement. The word "Agreement" means this Assignment of Deposit Account, as this Assignment of Deposit Account
may be amended or modified from time to time, together with all exhibits and schedules attached to this Assignment of
Deposit Account from time to time.
Borrower. The word "Borrower" means Edmonds Public Facilities District and includes its successors and assigns.
Collateral. The word "Collateral" means all of Grantor's right, title and interest in and to all the Collateral as described in
the Collateral Description section of this Agreement.
Default. The word "Default" means the Default set forth in this Agreement in the section titled "Default".
Event of Default. The words "Event of Default" mean any of the events of default set forth in this Agreement in the default
section of this Agreement.
Grantor. The word "Grantor" means City of Edmonds.
Indebtedness. The word "Indebtedness" means only the principal and interest for which Borrower is responsible under
the Note.
Lender. The word "Lender" means First Financial Northwest Bank, its successors and assigns.
Note. The word "Note" means the Note dated November 15, 2018 and executed by Edmonds Public Facilities District in
the principal amount of $2,803,516.08, together with all renewals of, extensions of, modifications of, refinancings of,
consolidations of, and substitutions for the note or credit agreement.
Public Depositary. The word "Public Depositary" has the meaning assigned in RCW 39.58.010.
Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral
mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in
connection with the Indebtedness.
BORROWER AND GRANTOR HAVE READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS ASSIGNMENT OF
DEPOSIT ACCOUNT AND AGREE TO ITS TERMS. THIS AGREEMENT IS DATED NOVEMBER 15, 2018.
GRANTOR:
CITY OF EDMONDS
By:
Authorized Signer for City of Edmonds
BORROWER:
EDMONDS PUBLIC FACILITIES DISTRICT
By:
Authorized Signer for
Edmonds Public
Facilities District
Attest:
Authorized Signer for City of Edmonds
53162484.5
Authorized Signer for
Edmonds Public
Facilities District
L—Pro, Ver. 18.1.10.007 Cop, Finestra USA CoMora0on 1997, 2018. Al Rights R--d. -WA OCFl\LPL\EWYC TR-3210 PR-28 (M)
53162484.5
CERTIFICATION
I, the undersigned, City Clerk of the City of Edmonds, Washington (the "City"), hereby
certify as follows:
1. The foregoing Ordinance No. 4132 (the "Ordinance") is a full, true and correct copy
of the Ordinance duly passed at a regular meeting of the City Council of the City held at the regular
meeting place thereof on November 5, 2018, as the Ordinance appears on the minute book of the
City; and the Ordinance will be in full force and effect five days after the publication of its
summary in the City's official newspaper; and
2. A quorum was present throughout the meeting and a sufficient number of members
of the City Council voted in the proper manner for the passage of the Ordinance.
IN WITNESS WHEREOF, I have hereunto set my hand this day of ,
2018.
CITY OF EDMONDS, WASHINGTON
City Clerk
(SEAL)
53162484.5
Everett Daily Herald
Affidavit of Publication
State of Washington }
County of Snohomish } ss
Dicy Sheppard being first duly sworn, upon
oath deposes and says: that he/she is the legal
representative of the Everett Daily Herald a
daily newspaper. The said newspaper is a legal
newspaper by order of the superior court in the
county in which it is published and is now and
has been for more than six months prior to the
date of the first publication of the Notice
hereinafter referred to, published in the English
language continually as a daily newspaper in
Snohomish County, Washington and is and
always has been printed in whole or part in the
Everett Daily Herald and is of general
circulation in said County, and is a legal
newspaper, in accordance with the Chapter 99
of the Laws of 1921, as amended by Chapter
213, Laws of 1941, and approved as a legal
newspaper by order of the Superior Court of
Snohomish County, State of Washington, by
order dated June 16, 1941, and that the annexed
is a true copy of EDH833607 ORDINANCE NO.
4132 as it was published in the regular and
entire issue of said paper and not as a
supplement form thereof for a period of 1
issue(s), such publication commencing on
11/08/2018 and ending on 11/08/2018 and that
said newspaper was regularly distributed to its
subscribers during all of said period.
The amount of the fee for such publication is
$30,96. ii
Ittj':�k
Subscribed and sworn before me on this
day of 4o J rail
"'i Ir--
Notary Public in and for the State o
Washington.
City of Edmonds - LEGAL ADS 114101416
SCOTT PASSEY
RECEIVED
NOV 13 2018
EDMONDS CITY CLERK
A, g tY KNAPP
Notary PublIC
State of Washington
N}y Commission Expires
Juiy 30, 2022
Classified Proof
SUMMARY OF ORDINANCE NO. 4132
011ne City 011
s, Weahmgl0n
On me ,l 1, or Nerrmber. 2t?18. Ille CISy COur+cli a[ ma Crsv bf
E0mnn0a, GnSSGd C?rCinan.o No• 9132. A aunmary of ih0 can nl
01 eald ardma�0. Sot;yraling 01 Iha UBe, proYidea 8s bllarva'
AN ORDINANCE OF THE CITY Or EOMONOS.
WASHINGTON, AUTHORIZING THE EXECUTION AND
DELIVERY OF AN AMENDED AND RESTATED
CONTINGENT LOAN AGREEMENT WITH THE EDMONDS
PUBLIC FACILITIES DISTRICT AND A COLLATERAL
AGREEMENT WITH FIRST FINANCIAL NORTHWEST
BANK; AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH; AND FIXING A TIME WHEN
THE SAME SHALL BE EFFECT{VE THE FULL TEXT OF
THIS ORDINANCE WILL BE MAILED UPON REQUEST,
DATED lhls 6lh day of November, 2018.
CITY CLERK, SCOTT PASSEY
Published: November8, 2018. EDHO33607
RECEIVED
NOV 13 2018
EDMONDS CITY CLERK
Proofed by Sheppard, Dicy, 11/08/2018 09:32:57 am Page: 2