Ordinance 3563CITY OF EDMONDS, WASHINGTON
ORDINANCE NO. 3563
AN ORDINANCE of the City of Edmonds, Washington, approving and
authorizing the making of loans to the Edmonds Public Facilities District;
authorizing the execution of an agreement reflecting the conditions and terms of
such loans; approving and authorizing the making of annual contributions to the
Edmonds Public Facilities District; authorizing the execution of an agreement
reflecting the conditions and terms of such contributions; and providing for other
matters properly relating thereto.
Adopted September 27, 2005
This document prepared by:
Foster Pepper & Shefelman PLLC
1111 Third Avenue, Suite 3400
Seattle, Washington 98101
(206) 447-4400
50571686.07
CITY OF EDMONDS, WASHINGTON
Ordinance No. 3563
AN ORDINANCE of the City of Edmonds, Washington, approving and
authorizing the making of loans to the Edmonds Public Facilities District;
authorizing the execution of an agreement reflecting the conditions and terms of
such loans; approving and authorizing the making of annual contributions to the
Edmonds Public Facilities District; authorizing the execution of an agreement
reflecting the conditions and terms of such contributions; and providing for other
matters properly relating thereto.
WHEREAS, the City of Edmonds, Washington (the "City"), is authorized by chapter
67.28 RCW to acquire and operate "tourism -related facilities;" and
WHEREAS, 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 this state applicable to the incurring of indebtedness require such submission;
and
WHEREAS, the.City and the District intend to finance, acquire, construct, equip, operate
and maintain a tourism -related facility known as the Edmonds Center for the Arts (the "Regional
Center"); and
WHEREAS, pursuant to RCW 67.28.130, the City and the District intend to enter into an
agreement • to evidence the City's obligation to contribute money to the District for such
purposes; and
WHEREAS, the District expects to issue a $7,000,000 Sales Tax and General Revenue
Obligation Line of Credit Note, 2005 (the "Note") for the purpose of (a) providing funds needed
to complete construction of the Regional Center and other related costs, (b) providing interim
financing upon completion; and (c) paying certain fees and the costs of issuance and sale of such
Note; and
WHEREAS, pursuant to RCW 67.28.130, the City and the District intend to enter into an
agreement to evidence the City's obligation to lend the District money, if necessary, to pay debt
service on the Note when due; NOW, THEREFORE,
50571686.07
THE CITY COUNCIL OF THE CITY OF EDMONDS DOES ORDAIN as follows:
Section 1. Approval of Guarantee Agreement. The City approves the Guarantee
Agreement (the "Guarantee Agreement") by and among the City, the District and Bank of
America, N.A. (the "Bank") in substantially the form attached hereto as Exhibit A. The Mayor is
authorized and directed to execute and deliver the Guarantee Agreement on the City's behalf in
substantially the form presented to the City Council at this meeting, with such changes as may be
approved by the Finance Director.
Section 2. Loans to District Authorized. The City shall make loans to the District at the
times, in the amounts and subject to the terms and conditions specified in the Guarantee
Agreement.
Section 3. Transfer of Funds. The City shall make loans to the District by transferring
money to the Bank for the account of District at the times, in the amounts and subject to the
terms and conditions specified in the Guarantee Agreement.
Section 4. General Authorization and Ratification. The Finance Director, Mayor and
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 by, this ordinance and the Guarantee Agreement.
The Finance Director is further authorized to give the City's approval under Section 8.8 of the
Guarantee Agreement for the issuance of additional debt by the District if, in his judgment, the
conditions in Section 8.8 of the Guarantee Agreement 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.
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Section 5. 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 public meeting thereof this 27`h day of
September, 2005.
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
09/23/2005
09/27/2005
10/02/2005
10/07/2005
Mayo
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EXHIBIT A
Guarantee Agreement
[This space intentionally left blank.]
50571686.07
- GUARANTEE AGREEMENT
by and among
THE CITY OF EDMONDS .
and
THE EDMONDS PUBLIC FACILITIES DISTRICT
and
BANK OF AMERICA, N.A.
relating to the
EDMONDS PUBLIC FACILITIES DISTRICT
Not to Exceed $7,000,000
GENERAL AND REVENUE OBLIGATION
.LINE OF CREDIT NOTE, 2005
Dated as. of October 26, 2005
Thisdocument prepared by..
Foster Pepper & Shefelman PLLC
1111 Third Avenue, Suite 3400
Seattle,. Washington 98101
(206) 447-4400
so56Mo.o7
TABLE OF CONTENTS
ARTICLE1. Recitals ........................... »»........... »............ ....».......................................
:.....»...».......».»...................1
ARTICLE2. Definitions ................................. »....... ............................................... ......................... ........................ 2
ARTICLE 3. Loans to the District; Repayment Terms .».».......... ...................................................... ................... 2
Section3=1 Loans to the District....................................:.....::......................................................._...........:........2
Section 3_2 Procedures Under Guarantee; Time and Amount of Loans.............................................................. 2
Section 3_3 Covenants Regarding Debt Limit and Additional Debt.................................................................... 4
Section3.4 Repayment Terms...................................................................................•.....:................................... 5
Section 3_5 Nature of District's Obligation......................................................................................................... 5
Section 3_6 Nature of City's Obligation .................. :........................................................................................... 5
Section3_7 City Acknowledgments.................................................................................................................... 6
ARTICLE 4. Rights of City Upon Making Loans ... ».......... ».... ............ ........ »... :.................. ».............. ............ »..... 6
Section4.1 Rights of the City ...................... »..................................................................................................... 6
ARTICLE 5. Additional Obligations and Covenants .» ..................... »............................................ »... .............. 7
Section5.1 Project Budget ............................................................................................................................. ...... 7
Section 5_2 Agreement to Obtain Line of Credit................................................................................................. 7
Section 5_3 Third Party Beneficiary ............................................................::...................................................... 7
Section 5_4 Regional Center Conditions, Progress and Monitoring.................................................................... 7
Section5.5 Additional Covenants.....:................................:............................................................................:... 8
ARTICLE6. Remedies Upon Default ...... »............ ............ »....................... »............ »................................. ............ 8
Section 6_I Remedies of City on Default............................................................................................................ 8
Section 6_2 Remedies of District on Default....................................................................................................... 8
Section6_3 - No Remedy Exclusive.......:..............................................................................................................8
Section 6=4 No Implied Waiver .....................
Section 6_5 Agreement to Pay Attorneys' Fees and Expenses............................................................:............... 9
Section6.6 Dispute Resolution..............................................................:............................................................ 9
ARTICLE 7. hold Harmless.........» ........... ........... »............ ...
ARTICLE8. Miscellaneous ...... »..... .....».»».»... ...».... »............... »............................................. ............................. 10
Section 8_1 Interlocal Cooperation Act Provisions.........................•.................................................................10
Section 8_2 Additional Covenants of the City................................................................................................... 10
Section 8_3 Governing Law; Venue .................................................................................................................. I I
Section8_4 Notices................................................................................................................... 11
Section8_5 Binding Effect.........................................................................:......................................................II
Section8.6 Severability .......................................................................................................... ............................ I I
Section8.7 Amendments..............................:...................................................................................... .:......... 11
Section 8.8 Additional Debt ................... :...............................
......................................................... 12
Section8_9 Waiver of Breach ............................................................................................................................. 12
Section 8.10 No Rights Created in Third Parties................................................................................................12
Section8.11 Time of Essence..........................................................................................•.................................. 12
Section 8.12 Effective Date of and Termination of Agreement......................................................................._. 13
50560950.07
GUARANTEE AGREEMENT
RELATING TO THE
EDMONDS PUBLIC FACILITIES DISTRICT'S
Not to exceed $7,000,000
GENERAL AND REVENUE OBLIGATION
LINE OF CREDIT NOTE, 2005
This GUARANTEE AGREEMENT is dated as of October 26, 2005,by and among
THE CITY OF EDMONDS (the "City"), a code city organized under the laws of the State of
Washington, 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, and BANK OF AMERICA, N._A., a national
banking association (the "Bank").
The City, the District and the Bank agree as follows:
ARTICLE 1.
Recitals
The following facts and circumstances form the background of this Agreement:
L 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 39.34 and 35.59 RCW for joint and cooperative action, including provisions to
finance joint or cooperative undertakings, multipurpose community centers, regional centers
and other facilities to provide for services to be provided by one government to another.
3. The District's Board of Directors (the `Board') has previously found and
determined that the residents of the District and the region will 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 will provide for meetings,
conferences, community events, trade shows, and artistic, musical, theatrical or other cultural
exhibitions, presentations or performances.
4. In 2001, the District began imposing and collecting a sales and use tax pursuant
to RCW 82.14.390, which taxing authority shall expire when the bonds issued for the
construction of the regional center and related parking facilities are retired, but not more than
twenty-five years after the tax was first collected.
5. The District has entered into an Interlocal Agreement with the City of Edmonds,
the Snohomish County Public Facilities District (the "County PFD") and Snohomish County
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(the "County"), dated November 4, 2002, regarding the joint development and operation of the
Regional Center and pursuant to which the City, the County PFD and the County have agreed
to make payments to the District to support such joint development and operation.
6. Pursuant to RCW 35.57.030 and 39.46.050, the Board desires to issue its
General and Revenue Obligation Line of Credit Note, 2005, payable from Sales Tax Revenue
and General Revenue (as described herein) for the purpose of (a) providing funds needed to
complete construction of the Regional Center and other related costs, (b) providing interim
financing upon completion; and (c) paying certain fees and the costs of issuance and sale of the
Note.
7. The .District and the Bank have requested that the City provide an additional
guarantee that amounts due under the Note will be paid or repaid when due by agreeing to
advance amounts to the Bank for the account of the District when and if necessary, subject to
the terms described herein.
ARTICLE 2.
Definitions
Unless the context clearly requires. otherwise, capitalized terms used in this agreement
have the meanings given such terms in Resolution No. 14 of the District, adopted on October
11, 2005 (the "Authorizing Resolution"). A copy of the Authorizing Resolution is attached
hereto as Exhibit A.
ARTICLE 3.
Loans to the District; Repayment Terms
Section 3.1 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 amounts drawn under the District's Not to Exceed $7,000,000 General and- Revenue
Obligation Line of Credit Note, 2005 (the "Note"). The City irrevocably agrees to disburse all
loans made hereunder directly to the Bank, and the Bank irrevocably agrees to apply all such
amounts received by it to the payment of the. principal of and interest on outstanding Draws on
the Note, and all other amounts due to the Bank with regard to the line of credit evidenced by
the Note (the "Note Obligations'). The aggregate principal amount of outstanding loans to be
made by the City pursuant to this agreement shall not exceed the amounts drawn on the Note,
plus all interest accrued on the amounts drawn under the Note.
Section 3.2 Procedures Under Guarantee, Time and Amount of Loans.
(1) Notice of Insufficiency. On the I" day of the month preceding each Debt Service
Payment Date (or if the I" is not a business day, then on the business day preceding the V), the
District shall review the amount on deposit in..the Debt Service Fund to .determine whether
there will be sufficient money available in the Debt. Service 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 Debt Service Fund will be insufficient to make that payment, the
District shall provide the City a notice in substantially the form attached hereto as Exhibit B (a
50M0950.07 -2-
"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 Bank 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 biennial 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).
(3) Cancellation Notices. If, at any time before 10 a.m. (Pacific time) on the 24ie day of
the month preceding an upcoming Debt Service Payment Date for which the District has given
a Notice of Insufficiency (or, if the 24t' is not a business day, the business day preceding the
24` ), the District determines that there will be sufficient money available in the Debt Service
Fund to make the required payment due on the upcoming Debt Service Payment Date, the
District shall provide, prior to 5 p.m. on the same day, a notice to the City in substantially the
form attached hereto as Exhibit C (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 Bank under subsection (4) of this section.
(4) Loans. For as long as the Note and amounts drawn thereunder remain outstanding,
if the City receives a Notice of Insufficiency and has not received a Cancellation Notice bZ 5
p.m. on the 24a' day of the month preceding any Debt Service Payment Date (or, if the 24 is
not a business day, the business day preceding the 24`h), the City shall, no later than 10 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 Debt Service Fund, is sufficient to make all make all
payments due on the upcoming Debt Service Payment Date, subject to the limitation set forth in
Section 3.1. The City shall, upon demand by the Bank in accordance with Section 3.1, cause
the amount of each loan hereunder to be -transferred to the Bank for the account of the District
in United States Dollars and immediately available funds. The City acknowledges and agrees
that the Bank may submit such a demand before seeking payment from any other sources of
payment set forth in the Authorizing Resolution.
(5) Method of Notice. Notices of Insufficiency and Cancellation Notices shall be_ sent
by the District to the City Finance Director by hand delivery or facsimile (which facsimile shall
be promptly confirmed by telephone communication to the City Finance Director). The
original of each such notice also shall be mailed .to the City pursuant to Section 8.03 of this
agreement. 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. Solely for the purpose of determining wtiether sufficient money
will be available in the Debt Service 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 Interlocal Agreement, except to the extent. expressly modified by this
Agreement.
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Section 3_3 Covenants Regarding Debt Limit and Additional Debt
(1) The District does not intend to submit this Agreement and any indebtedness created
hereunder to qualified electors of the District for approval. Under 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 will not incur additional indebtedness after the Note is issued
unless prior written approval is obtained in accordance with Section 8.8.
(2) 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. The City shall remain obligated to make_ available to the Bank the
amount determined under Section 3.2, and any amount greater than the District's then -
remaining non -voted debt capacity shall be deemed a 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 each such equity payment by the City, the District shall deliver to the
City, a quit claim 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 . such payment and the costs of transferring title and
recording such quit claim deed; and the denominator of which shall be the aggregate original
principal amounts of (a) the Note, (b) all bonds issued by the City to finance the Regional
Center, and (c) all District Bonds issued to finance the Regional Center.
(3) The City will reconvey to the District, by means of a quit claim deed, all of the
City's interest in the Regional Center acquired pursuant to subsection (2) 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
(d) the costs of transferring title to the District and recording such.quit claim
deed.
The rate of interest to be used for purposes of this calculation shall be the rate described in
Section 14(2).
(4) The transfers of interest authorized by this Section are intended to reflect the joint
and cooperative nature of the financing of the Regional Center and to establish the manner in
which property is to be acquired, held and disposed under this agreement, as required by RCW
39.34.030(3)(e) and 39.34.030(4)(b).
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Section 3_4 Repayment Terms.
(1) Repayment.Terms. The principal amount of each Ioan to the District hereunder,
together with interest thereon calculated as 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 Debt Service Fund has been fully fimded for such calendar year and reasonable
provision has been made for the operating expenses of the Regional Center, if any, and (b) all
Note Obligations have been repaid in. full and the Bank is no longer obligated to make any
advances under the line of credit evidenced by the Note. Such payments will be applied first to
costs owed to the City, second, to interest owed to the City on account of all 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
Finance 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 August 30, 2010.
Section 3_5 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 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
Authorizing 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 VII. To further its ability to make such payments to the
City, the District hereby irrevocably covenants and agrees to continue imposing the Sales Tax
pursuant to RCW 82.14.390 for so, long as the Note remains outstanding, the Bank remains
obligated to make any advance under the line of credit evidenced by the Note, or any District
obligation to pay any amount to the City under -this agreement remains outstanding.
Section 3.6 Nature of City's .Obli ag tion. 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
50560 _10.07 -5-
any particular time. The obligations of the City hereunder shall terminate upon payment in full
of the principal of and interest on all outstanding draws on the Note, and all other amounts due
to the Bank with regard to the Note. The City agrees that it will include in its budget for each
fiscal- year during_the term of this Agreement, 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 advances to the Bank for the account of the District as
required under this Article III.
Section 3_7 City Acknowledgments. The City acknowledges and agrees that the
District will pledge to the payment of the Note: (a) the loan proceeds it receives under this
agreement; (b) the Sales Tax Revenues, junior only to the lien granted in connection with the
City's Limited Tax General Obligation Bonds, 2402; (c) the District's General Revenue; and
(d) proceeds_ of fundraising efforts for the Project as described in Section 8 of the Authorizing
Resolution.
ARTICLE 4.
Rights of City Upon Making Loans
Section 4_1 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 request in writing that the District cease making Draws on the Note,
and upon receipt of such demand, the District shall not make any Draw on the Note;
(2) 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
(3) With the consent of the parties to the Interlocal Agreement (as defined in the
Authorizing Resolution), 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 (3) 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.
50560950.07 --6-
ARTICLE 5.
Additional Obligations and Covenants
Section 5_1 Project Budget_ The District shall not exceed the overall capital project
budget attached hereto as Exhibit D (the "Project Budget'), and incorporated herein by this
reference, without the express written authorization of the City.
Section 5_2 AQreement to Obtain Line of Credit. The District shall issue the Note
and obtain a line of credit in accordance with the Authorizing Resolution and this agreement.
The District shall contract for the line of credit in an amount not to exceed the amount
necessary to finance the Regional Center in accordance with the Project Budget, but in no event
in an amount exceeding $7,000,000 without express written authorization of the.City.
From and after the completion of the 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
A books and records to be maintained with respect thereto.
Section 5_3. Third Party Beneficiary. Each covenant and commitment of the District
in the Authorizing 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 Authorizing
Resolution.
Section 5_4 ReOonal Center Conditions Progress and Moriitorina
(1) Commencement of Construction. The District represents that it commenced
construction (within the meaning of RCW 82.14.390) of the Regional Center before January 1,
2004.
(2) Substantial Delay. The District shall immediately notify the City in the event that
there is any significant risk that there will be substantial delay in the completion of the
Regional Center.
(3) Progress. The District shall proceed with diligence to cause to be constructed the
Regional Center in accordance with the plans and specifications provided to the City, and as
substantially described and for the purposes and benefits provided herein and in the
Authorizing Resolution.
(4) Ownership. The District shall be the owner of the Regional Center except to the
extent the City acquires any interest therein pursuant to Section 3.3.
(5) Quarterly Reports. Until the Regional Center is completed (as evidenced by the
granting by the City a certificate of occupancy for the Regional Center), the District shall file
with the City Finance Director quarterly written reports in a form reasonably acceptable to the
City Finance Director as'to the progress of the Regional Center, including:
5056MM.07 -7-
(a) A progress report of construction of the Regional Center, indicating the
extent to which the Regional Center is in compliance with the Project
Budget and the District's construction schedule;
(b) A -description of significant events during the preceding quarter -and
planed activities for the next quarter, such significant events to include,
without limitation, change orders, any . changes inthe cost of the
Regional Center associated with such change orders, and any lawsuits
relating to the Regional Center that have been filed or that the District
has reasonable cause to believe may be filed; and
(c) An estimate of the Draws that will be requested under the Note and
expenditures from the Project Fund during the next quarter.
Section 5_5 Additional Covenants.
(1) 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 without the
consent of the City Finance Director.
(2) For so long as the Note remains outstanding or the Bank remains obligated to make
any advance under the line of credit evidenced by the Note, neither the City nor the District
shall agree to any amendment to -the Interlocal Agreement without the consent of the Bank.
ARTICLE 6.
Remedies Upon Default
Section 6_I 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
hereunder; provided that the City may not enforce repayment of the loans until repayment in
full of the principal of and interest on all outstanding draws on the Note and -all other amounts
due to the Bank with regard to the Note.
Section 6_2 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.
Section 6_3 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
50560950,07 . -8-
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.
Section 6_4 No Implied Waver. No delay or omission to exercise any right or power
i
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.
Section 6_5 Agreement to Pay Attorneys' Fees and Ex rises. 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 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.
Section 6_6 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. Either party may request that Foster Pepper & Shefelman (or its
successor) be mediator, and such request shall be binding on the other party.
ARTICLE 7.
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 all outstanding draws on the Note, and all other amounts due to the Bank with
regard .to the Note.
The District's obligation shall include, but not be limited to, 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, the District's employees,
agents or subcontractors.
505W so.o7 —9—
ARTICLE 8.
Miscellaneous
Section 8_1 Interlocal Cooperation Act Provisions. The parties acknowledge that
they have entered into this agreement pursuant to the express authority granted to them by
RCW 67.28.130; pursuant to RCW 39.34.100, the powers and authority conferred by the
Interlocal Cooperation Act (chapter 39.34 RCW) are supplemental to powers or authority
conferred by RCW 67.28.130; and nothing contained in the Interlocal Cooperation Act limits
the power or authority of either party to contract pursuant to RCW 67.28.130. To avail
themselves of the supplemental powers and authority granted by the Interlocal Cooperation
Act; the parties agree that:
(a) No separate .legal or administrative entity within the meaning of RCW
39.34.030(3)(b) or "joint board" within . the meaning of RCW
39.34.030(4)(a) is created by this agreement;
(b) The District will adopt .and provide the City with a Regional Center
operating budget for the following year by each December 31,• and will
further provide the City with all amendments to such budgets as they are
adopted by the District;
(c) The City Finance Director is appointed as the "administrator" within the
meaning of RCW 39.34.030(4)(a) responsible for administering the
City's rights and duties set forth in this agreement, and the District's
President is appointed as the "administrator" within the meaning of
RCW 39.34.030(4)(a) responsible for administering the District's rights
and duties set forth in this agreement;
(d) Sections 3.2 and 5.4(4) of this agreement set forth the manner in which:
property is to be acquired, held and disposed under this agreement, as
required by RCW 39.34.030(3)(e) and 39.34.030(4)(b); and
(e) The District will, pursuant to RCW 39.34.040, cause this agreement to
be filed with the Snohomish County Auditor immediately upon the full
execution hereof by the parties.
Nothing set forth in this agreement is intended to limit the rights and duties of the
parties relating to the Regional Center that are established through other contracts between the
parties.
Section 8_2 Additional Covenants of the City. For as long as the Note and amounts
drawn thereunder remain outstanding, the City covenants 'with the District and the Bank as
follows:
(a) The City will provide to the Bank audited annual financial statements
prepared by the Washington State Auditor's Office within 10 days after
its receipt.
(b) The City will provide to the Bank its internally prepared unaudited
financial statement within 8 months after its fiscal year end.
sow09SOA7 -10-
(c) The City will provide to the Bank a copy of its annual budget within 90
. days after its adoption.
Section 8_3 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.
Section 8_4 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
Fax: (425) 771-0265
Telephone: (425) 771-0240
To the District: Edmonds Public Facilities
District
121 Fifth Avenue North
Edmonds, WA 98020
Attention: PFD Treasurer
Fax: (425) 771-0265
Telephone: (425) 771-0240
To the Bank: Bank of America, N.A.
Government Banking
WA1-501-34-03
800 Fifth Avenue, 34`h Floor
Seattle, WA 98104
Attn: Nancy Nuerenberg
Fax: (206) 358-8818
Telephone: (206) 358-6279
The City, the Bank or the District may, by notice given hereunder,. designate any funther or
different addresses to which subsequent notices, certificates, requests or other communications
shall be sent. Notices shall be deemed served upon deposit of such notices in the United States
mail in the manner provided above.
Section 8_5 Binding Effect. This agreement shall inure to the benefit of and shall be
binding upon the City, the Bank and the District and their successors. This agreement may not
be assigned.
Section 8.6 SeverabiIity. 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.
Section 8.77 Amendments.
(1) This Agreement. This agreement may be amended, changed, modified or altered by
an instrument in writing duly executed by the City, the District and, so long as the Note is
50560950.07 —11—
outstanding or the Bank remains obligated to make advances under the line of credit evidenced
by the Note, the Bank (or the successors in title of each). This Agreement may not be
terminated until the Note is no longer outstanding and all amounts drawn thereunder have been
paid in full, unless the City has assumed all liability for payment of the principal of and interest
on the amounts drawn under the Note when due,. and all other amounts due with respect to the
Note, and shall have pledged its full faith and credit to such payment:
(2). The Authorizing Resolution. The District shall not amend the Authorizing
Resolution without the prior written consent of the City and the Bank so long as this agreement
is in effect and the City is performing its obligations hereunder.
Section 8_8 Additional Debt. The District shall not incur any additional indebtedness,
other than in the ordinary course of business, without the prior written consent of the City and, -
so long as the Note is outstanding or the Bank remains obligated to make advances under the
line of credit evidenced by the Note, the Bank. 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
Authorizing Resolution;
(b) The proceeds of the additional debt will be used to fund capital
expenditures relating to the Regional Center; .
(c) The District's non -voted debt capacity under RCW 35.57.030(1), after
such additional indebtedness has been incurred, is at Ieast equal to the
outstanding amount of all Draws on the Note; and
(d) No ownership interest in the Regional Center has been transferred to the
City under Section 3.3(2) that has not been transferred back to the
District under Section 3.3(3).
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.
Section 8_9 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.
Section 8.10 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, the Bank and the respective successors and assigns of each.
Section 8.11 Time of Essence. Time and all terms and conditions shall be of the
essence of this agreement.
SOSW950.07 -12-
Section 8.12 Effective Date of and Termination of Agreement. This agreement shall
take effect upon its execution and recording with the Snohomish County Auditor. Except as
provided in Section 3.5, this agreement shall terminate upon payment in full of all principal of
and interest on the Note, and all other amounts due to the Bank with regard to the Note, so long
as the Bank is no -longer obligated to make advances under the line of credit evidenced by the
Note. Section 3.3 and Article VII 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, the Bank 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 E MONDS, WASHINGTON
Mayo
Attest:
City- Clerk
EDMONDS PUBLIC FACILITIES DISTRICT
President, Board of Directors A
Board of Directors
BANK OF ERICA, A.
er-nberg, Senior Vice President
-rix,�A c. Ao r-ao-i
STATE OF WASHINGTON
ss.
COUNTY OF SNOHOMISH
I certify that I know or have satisfactory evidence that Ga.• Q4 P �,fand
o'.�v�it, S. C1.� 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.
Dated this ��day of Qchde,e—, 2005.
ttf'�� G. fir = / (sipat m fNobq)
`, • (Legibly print or Stamp Nam otary)
Notarypublic in d for the State of ashington, residing at
_ 1. p( jBV:�' 0 ; My appointment expires .3-11 a-ooi
oAZ N
STATE OF WASHINGTON
ss.
COUNTY OF SNOHOMISH
I certify - that I know or have satisfactory evidence that '%sAAy VE+145 and
ONN M`C payxare 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
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.
Dated this ) (A day of Ot:-raga R .2005.
/ (Signature of Notary)
S/iNDR* S. C—Ims&
(Legibly Print or stamp Name of Notary)
Notary public in and for the State of Washington, residing at
My appointment expires o
STATE OF WASHINGTON
J41 to (o Ss.
COUNTY OF SN0119
I certify that I know or have satisfactory evidence that —7a,7a Ili at•oU /
is the person who appeared before me, and said person acknowledged that said person signed this
instrument, on oath stated that said person was authorized to execute the instrument , and
d, acknowledged it as a .5e,u er Z, �� •+ " of Bank of America, N.A., a national banking
association,: to be the free `and voluntary act of such banking association for the uses and
purposes mentioned in the instrument.
Dated this ao-14 day of 1),;6 J:�A 2005.
SHMY L HAM
(Legibly PAmt or Stamp Name of Notary)
No ubli in and for the State of Washington,.residing at
My appointment expires 7
Exhibit A
Authorizing Resolution
[[THIS SPACE INTENTIONALLY LEFT BLANK.]]
T IA
506OM-07
0
EDMONDS PUBLIC FACILITIES DISTRICT
SNOHOMISH COUNTY, WASHINGTON
RESOLUTION NO. 14
A RESOLUTION.of the Edmonds Public Facilities District, Snohomish
County, Washington, relating to contracting indebtedness; providing for the
issuance of its Not to Exceed $7,000,000, par value General and Revenue
Obligation Line of Credit Note, 2005, to (a) provide funds needed to complete
construction of the Edmonds Performing Arts Center and other related costs, (b)
provide interim financing, upon completion; and (c) to pay certain fees and the .
costs of issuance and sale of such note; fixing the form, terms and covenants of
the note; establishing a Debt Service - Fund; authorizing the execution of
agreements with the City of Edmonds, Washington, regarding the City's
guarantee of debt service payments on the Note, and providing for other matters
properly relating thereto; and approving the sale. and providing for the delivery of
the note to Bank of America, N.A., of. Seattle, Washington, and ratifying prior
actions.
Adopted October 11, 2005
This document prepared by:
Foster Pepper & Shefelman PLLC
1111 Third Avenue, Suite 3400
Seattle, Washington 98101
(206) 447-4400
50$71693.03
Table of Contents
Section 1 .Definitions.:.....:............................................:..............:..... 2
Section 2. Authorization and Description of Note ................
.................. I .................... ..._.............5
Section 3. Designation ofOfficers to Make Draws ..................... a.__.............................................. 6
Section 4. Note Registrar; Registration and Transfer of Note ................ 6
Section 5 Place,' Manner and Medium of Pa lent ......................................
Section 6. Optional Prepayment of Note .............................................:.......... 6
Section 7 - Failure To Pay Installments; Defaults ..............................:..:.. 7
Section 8 _ Pledges of Full Faith and -Credit Sales Tax Revenue and General
Revenue...............................................................................................: 7
Section 9 . Preservation of Tax Exemption for Interest on Note .............. 7
Section 10. Additional Covenants ................................................... _..............................................
Section 1 I . Form and Execution of Note .............. _.--,--•--.........................._..........._.....-•---
Section 12 _ Designation of Note as a "Qualified Tax -Exempt Obli ation..................... ..........9
Section 13 . Note Fund, Proiect Fund and Deposit and Use of Note Proceeds. ............................... 9
Section 14. Approval of Transactions................................................................
Section IS . City Guarantee..... ,
Section 16 .:General Authorization and Ratification .......................
................ :............................ 10
Section17. Severability......... _...................................................................................................... 10
Section18 . Effective Date........................----...----.......................................................... .....10
k
SOfl1693.06
11,
EDMONDS PUBLIC FACILITIES DISTRICT
SNOHOMISH COUNTY, WASHINGTON
RESOLUTION NO. 14
A RESOLUTION of the Edmonds Public Facilities District, Snohomish
County, Washington, relating to. contracting: indebtedness; providing for the
issuance of its Not to Exceed $7,000,000 par value General and Revenue
Obligation Line of Credit Note, 2005, to (a) provide funds needed to complete
construction of the Edmonds Performing Arts Center and other related costs, (b)
provide interim financing upon completion; and (c) to pay certain fees and the
costs of issuance and sale of such note; fixing the -form, terms and covenants of
the note; establishing a Debt Service Fund; authorizing the execution of
agreements with the City of Edmonds, Washington, regarding the City's
guarantee of debt service payments on the Note, and providing for other matters
properly relating thereto; and approving the. sale and providing for the delivery of
the note to Bank of America, NA., of Seattle, Washington, and ratifying prior
actions.
WHEREAS, the Edmonds Public Facilities District (the "District') is a duly organized
and legally existing municipal corporation of the State of Washington; and
WHEREAS, the District is authorized by chapter 35.57 RCW to acquire, construct, own,
remodel, maintain, equip, repair and operate a regional center, including a special events center;
and
WHEREAS, the District's Board of Directors (the `Board') has previously found and
determined that the residents of the District and the region will benefit from the District's
acquisition, construction, operation and maintenance of a performing arts center, known as the
Edmonds Center for the Arts (the "Center"), which will provide for meetings, conferences,
community events, trade shows, and artistic, musical, theatrical or other cultural exhibitions,
presentations or performances; and
WHEREAS, the Board currently imposes and collects a sales and use tax pursuant to
RCW 82.14.390; and
WHEREAS, the District has entered into an Interlocal Agreement- with the City of
Edmonds (the "City"), the Snohomish County Public Facilities District (the "County PFD") and
Snohomish County (the "County'), dated November 4, 2002,. regarding the joint development
and operation of the Center and pursuant to which the City, the County PFD and the County have
agreed to make payments to the District to support such joint operations; and
T ±-_
'
—1—
ty
WHEREAS, the Board desires to issue a non -revolving line of credit note pursuant to
RCW 35.57.030 and 39.46A50 that is payable from Sales Tax Revenue and General Revenue (as
such terms are defined herein) for the purpose of (a) providing funds needed to complete
construction of -the Center and other related costs, (b) providing interim financing upon
.completion; and (c) paying certain fees and the costs of issuance and sale of the note;,and
WHEREAS, the assessed valuation of the taxable property within the ' District as
ascertained by the last preceding assessment for. District purposes for the calendar year 2005 is
$4,189,291,927, the District has no outstanding general indebtedness, and the herein -authorized
Note will be incurred within the statutory debt limit of %2% of the value of the taxable property
within the District permitted without a vote of the qualified voters therein; and
WHEREAS, Bank of America, N.A. of Seattle; Washington, has proposed to purchase
the Note under the terms and conditions set forth in this resolution and the Proposal Letter (as
defined herein); NOW, THEREFORE,
BE IT RESOLVED BY THE BOARD OF DIRECTORS OF EDMONDS PUBLIC
FACILITIES DISTRICT, as follows:
Section 1. Definitions_ As used in this resolution, the following words have the
following meanings:
"Available Amount" means as of each day during each quarter (a) $7,000,000, minus
(b) the amount of all Draws, minus (c) the amount of all capital fundraising contributions used to
pay contractor progress payments relating to the Center, effective upon the date the Bank
receives written notice of such use.
"Bank" means Bank of America, N-A., of Seattle, Washington.
`Board" means the Board of Directors of the District.
"Centel" means the Edmonds Center for the Arts.
"City" means the City of Edmonds, Washington.
"Code" means the Internal Revenue Code of19g6, as amended, and applicable rules.and
regulations promulgated thereunder.
"County PFD" means the Snohomish County Public Facilities District, Snohomish
County, Washington_
"County" means Snohomish County, Washington.
"Debt Service Fund" means the District's Debt Service Fund created pursuant to
Section 13 of this resolution.
�smn"-% - -2-
'A- �
"Debt Service Payment Date" means the first business day of each January, April, -July -
and October, beginning January 2006.
"District" means the Edmonds Public . Facilities. District, Snohomish County,.
Washington.
"Draw" means an advance under the Note made pursuant to a request by the District.
"Executive Director" means the Executive Director of the District (or the successor
officer to the Executive Director).
"Floating Rate" means an interest rate per annum equal to (a)- 65% of the Prime Rate,
minus (b) 67 basis points.
"General Revenue" means all revenues of the District from any source, including
- without limitation, donations, grants, rents and operating revenues, but excluding the Sales Tax
Revenue.
"Guarantee Agreement" means the Guarantee Agreement by and among the City, the
District and -the Bank of America, N.A, substantially in the form attached.as Exhibit D.
"Interlocal Agreement" means the "Interlocal Agreement for the Development of the
Edmonds Center for the .Arts" by and among the City, the County, the County PFD and the
District, dated November 4, 2002.
"LIBOR Banking Day" means a day other than a Saturday or a Sunday on which the
Bank. is open for business in New York, New York and London, England, and dealing in
offshore dollars.
"LIBOR Fixed Rate" means an interest rate per annum equal to: (a) 65% of the LIBOR
Rate, plus (b) 105. basis .points.
"LIBOR Fixed Rate Draws" means Draws accruing interest at the LIBOR Fixed Rate.
"LIBOR Interest Period" means each one- to 12-month period beginning on each
LIBOR Reset Date, the length to be determined by the District no later than 12:00 noon -Pacific
time three LIBOR Banking Days prior to the date of such LIBOR Reset Date, provided that
absent such a determination by the District for any subsequent LIBOR Interest Period the. length
of such LIBOR Interest Period shall be of the same length as the immediately preceding LIBOR
Interest Period. The first day of.a LIBOR Interest Period must be a LIBOR Banking Day. The
date of the last .day of a LIBOR Interest Period and the actual number of days during a LIBOR
Interest Period will- be. determined by the Bank using the _practices of. the London interbank
market. No LIBOR Interest Period may extend beyond the Maturity Date. -
"LIBOR Rate" means for any LIBOR Interest Period, the rate per annum equal to the
British Bankers Association LIBOR Rate ("BBA LIBOR"), as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as selected py_the Bank
sosnAs -3-
from time to time) at approximately 11:00 am. London time, two London Banking Days before
the commencement of such LIBOR Interest Period, for U.S. Dollar deposits (for delivery on the
first day of such LIBOR Interest Period). with a term equivalent to such LIBOR Interest Period.
If such rate is- not available at such time for any reason, then the rate for that LIBOR Interest
Period will be determined by such alternate method as.reasonably selected by the -Bank.
"LIBOR Reset Date" means, with respect to the first LIBOR Interest -Period for any
LIBOR Fixed Rate Draw, the date of such draw, and with respect to subsequent LIBOR Interest
Periods, the first day of that LIBOR Interest Period.
"London Banking Day" means a day on which banks in London are open for business
and dealing in offshore dollars.
"Maturity Date" means August 31, 2010.
"Note Registrar" means the Executive Director of the District.
"Note" means the General and Revenue Obligation Line of Credit Note, 2005; of the
District issued pursuant to and under the authority of and for the purposes provided in this
resolution.
"President" means the President of the District, or any presiding officer or titular head of
the District, or his/her successor in functions, if any.
"Prime Rate" means the rate of interest publicly announced from time to time by the
Bank as its prime rate. The Prime Rate is set by the Bank based on various factors, including the
Bank's costs and desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans. The Bank may price Ioans .to its customers at, above, or
below the Prime Rate. Any changein the Prime Rate shall take effect at the opening of business
on the day specified in the public announcement of a change in the Bank's Prime Rate.
"Prime Rate Draws" means Draws accruing interest at the Floating Rate.
"Project Fund" means the District's Fund 634: PFD Project -Fund.
"Project" means (a) providing funds needed to complete construction of the Edmonds
Performing Arts Center and other related costs (excluding any financing of operations or
operating losses), (b) providing interim financing upon completion; and (c) paying certain fees
and the costs of issuance and sale of such note.
"Proposal Letter" means the letter of the Bank dated August 2, 2005, describing certain.
conditions under which the Bank proposes to purchase the Note. ,
- "Registered Owner" means the Bank, as registered owner of the Note, or any
subsequent registered owner of the Note.
5-057kM-08 -4-
"Sales Tax Revenue" means, the money received by the District from the Washington
State Department of Revenue on account of the sales and use tax imposed by and collected for
the District pursuant to RCW 82.14.390, as the same may be amended from time to time, or any
successor statute.
"Secretary" means the Secretary of the District, or other officer of the District who is the
custodian of the records of the proceedings of the Board, or his/her successor in functions, -if ariy.
Section 2. Authorization and Description of Note.
(a) The District shall issue the its General and Revenue Obligation Line of Credit Note, .
2005 in a principal amount of Not to Exceed $7,000,000, and may borrow money from time to -
time pursuant to a non -revolving line of credit extended by the Bank under the terms of this
resolution and the Proposal Letter, for the purposes of carrying out the Project (including paying
certain fees and the costs of issuance and sale of the Note) and for no other purpose_ The general
indebtedness to be incurred shall be within the limit of up to one-half of one percent of the value
of the taxable property within the District permitted for general District purposes without a vote
of the qualified voters therein.
(b) The Note shall be designated the General and Revenue Obligation Line of Credit
Note, 2005 of the. District; shall be issued in registered form; shall be. dated as of its date of
delivery to the Bank; and shall mature on the Maturity Date.
(c) The District may request Draws. upon the Note on any Bank business day during
the term of the Note for the Note purposes "identifted.above, subject to the terms of the Proposal
Letter, by faxing to the Bank a Draw request, in the form attached as Exhibit A, stating the
amount of the Draw and where fiords are to be transferred. Each such Draw request shall be
deemed a continuing representation that the proceeds of such Draw will be used for tax-exempt
purposes. Draws shall be recorded in such form as the District and the Bank may agree. Draws
may be requested in any amount not to exceed an aggregate principal amount -of $7,000,000,
except that any LIBOR Fixed Rate Draw must be in an amount not less than $250,000. LIBOR
Fixed Rate Draws must be fora term equal to a LIBOR Interest Period, and must be requested at
least three LIBOR Banking Days prior to the date .for which the Draw is requested. Draws may
be made to pay interest on the Note, but Draws repaid may not be re -borrowed. Principal of the
Note, together with all accrued and unpaid interest thereon, is payable on the Maturity Date..
(d) Draws on the Note shall bear interest at the Floating Rate or -at the LIBOR Fixed Rate,
as selected by the District at any time, with conversion from one interest rate basis to another to be
made by notice to the Bank; in the form- of the Interest Reset Request- attached as. Exhibit B.
Principal of the Note shall be payable at maturity or upon earlier prepayment Interest on each
Draw shall accrue from the date of that -Draw and shall be computed on the basis of a 360-day year
and actual number of days -elapsed -for the . actual number of days the principal amount- is
outstanding. Interest shall be payable quarterly on the first business day of each January-, April, July
and October, beginning on•the first business day of January 2006. The Board finds that fixing the
above interest rate indices is in the best interest of the District.
(e) The President is authorized,- without further action of the Board but with the consent
and approval of the Bank, to extend the maturity date of the Note beyond the Maturity Date
specified herein to a date no later than August 31, 2015, if no other terms of the Note or this
resolution are revised, and to do everything necessary for - the execution and delivery of such
documents as are useful_ or necessary to such extension of maturity and upon such extension, the
term "Maturity Date" as. used herein shall mean the maturity date as extended.
Section 3. Designation of Officers to Make Draws. The Board authorizes the Executive
Director of -the District or his or her designee to make Draws on the Note in such amounts and at
such times as he or she may determine hereafter, those Draws to be made in accordance with the
terms and provisions set forth herein and in the Proposal Letter.
Section 4. Note Registrar: Registration and Transfer of Note. The Executive Director of
the District shall serve as Note Registrar for the Note. The Note Registrar shall keep, or cause to
be kept, at his or her office in Edmonds, Washington, sufficient books for the registration of the
Note (the "Note Register"), which shall contain the name and mailing address of the Registered
Owner of the Note. The Note Registrar is authorized, on behalf of the District, to authenticate
and deliver the Note in accordance with the provisions of the Note and this resolution, to serve as
the District's paying agent for the Note and to carry out all of the Note Registrar's powers and
duties under this resolution.
The Note shall be issued only in registered form as to both principal and interest and
recorded on the Note Register. The Note may not be assigned or transferred by the Bank, except
that the Bank may assign or transfer the Note to any successor to the business and assets of the
Bank. No assignment or transfer of the Note shall be effective until the name of the new owner
and the new owner's mailing address, together with such information deemed appropriate by the
Note Registrar, shall be recorded on the Note Register.
Section 5. Place, Manner and Medium of Payment. Both principal of and interest on the
Note shall be payable in lawful money of the -United States of America. Interest on the Note and
fees and costs of issuance may also be paid from the proceeds of Draws on the Note. Payment of
interest ou each interest payment.date, and of principal at maturity or prepayments of principal,
shall be paid,by check or draft of the District mailed or by immediately available funds delivered
on or before each interest payment date or the maturity or prepayment date to the Registered
Owner at the address appearing on the Note Register on the last business day of the month
preceding the payment date. Upon the final payment of principal of and interest on the Note, the
Registered Owner shall surrender the Note at the principal office of the Note Registrar in
Edmonds, Washington, for destruction or cancellation in accordance with law.
Section 6. Optional Prepayment of Note. The District reserves the. -right and option to
prepay the Note, in whole or in part, at any time prior to the Maturity Date at par plus accrued
interest to the date of prepayment. Principal may be not be re -borrowed. Prime Rate Draws may
be prepaid in whole or in- part at any time without fee or penalty. LIBOR Fixed Rate Draws are
subject to prepayment fees as described in Exhibit C to this resolution_
soma43os -6- ~ --
Section 7. FaiIure To Pay Installments; Defaults. If an event of default occurs due to -(i)
nonpayment of principal, interest or other amounts when due, or (ii) failure to maintain the tax.:
exempt status of the interest on the Note, then the Bank may provide notice of such default to the
'District, and the -District shall be obligated to pay interest on the Note at two percentage points in
excess of the interest rate otherwise payable on the Note until the Note, both principal and
interest, as the case may be, is paid in full or until such default is cured. Nothing contained herein
shall, in any event or under any circumstance, be deemed to authorize the acceleration of maturity of
the Note, and the remedy of acceleration is expressly denied under any circumstances.
Section 8. Pledges of Full Faith and Credit, Sales Tax Revenue and General Revenue.
(a) The General Revenue and the full faith and credit of the District are hereby pledged
-for the repayment of the Note, all as provided in this resolution. The District currently is 'not
authorized to levy or collect ad valorem property taxes. The Sales Tax Revenue is hereby
pledged for payment of the principal of and interest on all amounts drawn on the Note, subject to
the provisions of this resolution permitting the application of such amounts to this purpose. The
District's pledge of Sales Tax Revenue is expressly made junior to the District's pledge with
regard to the City's Limited Tax General Obligation Bonds, Z002 issued to provide funding for
the Center. All amounts received from the City under the Guarantee Agreement are hereby
pledged for the payment of the principal of and interest on the Note, subject to the provisions of
this resolution permitting the application of such amounts to this purpose.
(b) The District further covenants that it will collect and hold the proceeds of its capital
fundraising efforts, and spend them only in accordance with this paragraph. Within 10 business
days after any date on which the District's unspent capital fundraising proceeds equals or exceeds
$50,000, the District shall either: (1) apply such amount to the prepayment of the outstanding
balance drawn on the Note (if any); or (2) provide notice to the Bank that the District intends to
use such amount to pay contractor progress payments relating to the Center.
The Note shall not be a debt of the City of Edmonds, the State of Washington -or any
political subdivision thereof, and the Note shall so state on its face. Neither the City of
Edmonds, the Slate of Washington nor anyvolitical subdivision thereof other than the District
shall be liable for payment of the Note. Neither the directors nor any of the officers or
employees -of the District shall be personally liable for the payment of the Nota
Section 9. Preservation of Tax Exemption for Interest on Note. The District covenants
that it will take all actions necessary to prevent interest on the Note from being included in gross
income for federal income tax purposes, and it will neither take any action nor make or permit
any, use of proceeds of the Note or other funds of the District treated as proceeds of the Note at
any time during the term of the Note which will cause interest on the Note to be included in
gross income for federal income tax purposes. The District also covenants that it will, to .the
extent the arbitrage rebate requirement of Section 148 of the Code, is applicable to the Note, take
all actions necessary to comply (or to be treated as having complied) with that requirement in
connection with the Note, including the calculation and payment of any penalties that the District
`has elected to pay as an alternative to calculating rebatable arbitrage, and the payment of any
-"71693.M
other penalties if required under Section 148 of the Code to -prevent interest on the'Nbte.from
being included in gross income for federal income tax purposes:
Section _10. Additional Covenants. The District covenants with the Bank for as long as
the Note remains outstanding as follows:
(1) The District will provide to the Bank audited annual financial
statements .prepared by the Washington State Auditor's Office within 10 days
after receipt thereof.
(2) The District will provide to the Bank its internally prepared unaudited
financial statement within 180 days after its fiscal year end.
(3) The District will adopt and provide the Bank with a Center operating
budget for the following year by each December 31, and will further provide the
Bank with all amendments to such budget as adopted by the District.
(4) The District will provide quarterly status reports, which shall include
construction progress reports (until project completion) and fundraising status
reports in form acceptable to the Bank.
Section 11. Form and Execution of Note. The Note shall be printed or'. typed in a fomx
consistent with the provisions of this resolution and state law and shall be signed by the President
and by the Secretary, either or both of whose signatures may be manual or in facsimile.
Only a Note bearing a Certificate of Authentication in the following form, manually
signed by the Note Registrar, shall be valid or obligatory for any purpose or entitled to the
.benefits of this resolution:
CERTIFICATE OF AUTHENTICATION
This Note is the fully registered Edmonds Public Facilities District,
Snohomish County, Washington, Generai and Revenue Obligation
Line of Credit Note, 2005, described in the Note Resolution.
LM
Note Registrar
The authorized signing of a Certificate of Authentication shall be conclusive evidence that the
Note so authenticated has been. duly executed, authenticated and delivered and is entitled to the
benefits of this resolution.
If any officer whose signature appears on the Note ceases to be an officer of the District
authorized to ' sign bonds . before the Note bearing his or her signature is authenticated or
delivered by -the Note Registrar or issued by the District, the Note nevertheless may be
authenticated, issued and delivered and; when authenticated, issued and delivered, shall be as
binding on the District as though that person had. continued to be an officer of the District
authorized to sign bonds. The Note also may he signed on behalf of the District -by any person
who, on the actual date of signing of the Note, is an officer of the District authorized to sign
bonds, although he or she did not hold the required office on the date of issuance of the Note.
Section 12. Desienation of Note as a "Qualified Tax-Exempt.Obli ation " The District
has determined and certifies that (a) the Nbte is not a "private activity bond" within the meaning
of Section 141 of the Code; (b) the reasonably anticipated amount of tax-exempt obligations
(other than private activity bonds and other obligations not required to be included in such
calculation) which the District and any entity subordinate to the District (including any entity
that the District controls, that derives its authority to issue tax-exempt obligations from the
District, or that issues tax-exempt obligations on behalf of the -District) will issue during the
calendar year in which the Note is issued will not exceed $10,000,000; and (c) the amount of tax-
exempt obligations, including the Note, designated by the District as "qualified tax-exempt
obligations" for the purposes of Section 265(b)(3) of the Code during the calendar year in which
the Note is issued does not exceed $10,000,000.. The District designates the Note as a "qualified
tax-exempt obligation" for the purposes of Section 265(b)(3) of the Code.
Section 13. Note Fund, Project Fund and Deposit and Use of Note Proceeds. The Note
Fund is created and established as a special fund of the District and designated the Line of Credit
Debt Service Fund, 2005 (the "Note Fund'), for the purpose of paying principal of and interest
and any prepayment fee on the Note. All Sales Tax Revenue and General Revenue collected for
and allocated to the payment of the principal of and interest on the Note shall be deposited in the
Note Fund, together with any other money available and to be used therefor. All of the proceeds
of any Draw on the Note shall be deposited in the previously established Fund 634: PFD Project
Fund (the "Project Fund"), and shall be used to carry out the Project and pay costs of issuance of
the Note. Until needed to pay those costs, the District may invest proceeds of Draws temporarily -
in any legal investment, -and the investment earnings may be retained in the Project Fund, and be
spent for the Project.
Section 14. Approval of Transactions. The Bank has offered to -purchase the Note under
the terms and conditions provided in the Proposal Letter, which is on file with the District and
are -incorporated herein by -this reference. The District Board finds that accepting an offer by the
:Bank on substantially the same terms and conditions as set forth in the Proposal Letter is in the
District's best interest and therefore the District accepts such offer as and when made. This
resolution shall be deemed a covenant to comply with all terms and conditions set forth in the
Proposal Letter. - ,
The District shall pay or reu burse the Bank for its legal expenses as provided in the Proposal
Letter, not to exceed $2,000 for the issuance of the Note. The Bank shall be paid an origination
= fee in the- total amount of $7,000 for the Note. The District further agrees to pay the Bank an
unused commitment fee of 0.10% per annum, payable quarterly in arrears, calculated on the
Available Amount. The Note will be .prepared at the District's expense and will be delivered to
the Bank, .together with the approving legal opinion of Foster Pepper & Shefelman PLLC,
municipal bond counsel of Seattle, Washington, regarding the Note. The proper District officials
are authorized and directed to do everything necessary for the prompt sale and delivery of the
-9-
Note to the Bank and for the proper application and use of the proceeds of the sale thereof or
Draws thereon.
Section 15. City Guarantee. The District approves the Guarantee Agreement in
substantially the _form attached hereto as Exhibit D. The President and Secretary.are authorized
and directed to execute and deliver the Guarantee Agreement on the District's behalf in
substantially the form attached as Exhibit D, with .such changes as may be approved by the
President
Section 16. General Authorization and Ratification. The President, the Secretary, and
other appropriate officers of the District,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 by, this resolution, the Proposal Letter and the -
Guarantee Agreement (including everything necessary for the prompt delivery of the Note to -the
Bank and for the proper application and use of the proceeds of the Draws). All prior actions
taken in furtherance of and not- inconsistent with the provisions of this resolution are hereby
ratified and confirmed in all respects.
Section 17. Severability. if any one or more sections, subsections, or sentences of this
resolution are held to be unconstitutional or invalid, such -decision shall not affect the validity of
the remaining portion of this resolution and. the same shall remain in full force and effect.
Section 18.. Effective Date. This resolution shall take effect and be in full force from and
after its adoption.
ADOPTED by the Boatd of Directors of the Edmonds Public Facilities District at a
regular open public meeting thereof held this f day of October, 2005, the following
Directors being present and voting in favor of the resolution.
EDMONDS PUBLIC FACILITIES DISTRICT
Board Wtuber
Board Member
-11-
Exhibit B
Form Notice of Insufficiency
City of Edmonds
121 Fifth Avenue North
Edmonds, WA 98020
Attention: Finance/Administrative Services Director
VIA FACSIMILE
(with telephone confirmation)
Re: NOTICE OF INSUFFICIENCY
Edmonds Public Facilities District
General and Revenue Obligation Line of Credit Note, 2005
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 Guarantee
Agreement (the "Agreement") dated as of October 26, 2005, by and between the City, the District and
Bank of America, N.A., and the above -captioned note (the "Note"), that:
(1) the next Debt Service Payment Date for the Note is:
(2) the aggregate amount. of debt service due on such date is $ which
represents principal of the Note in the amount of $ and interest on the Note
in the amount of $
(3) ' the sum of (i) the amount on deposit in the District's Debt Service Fund as of
20_, and (ii) the payment the City is required to make on
20_, pursuant to the Interlocal Agreement, is $ , and it
appears there will be insufficient money available in the Debt Service Fund on the .date
described in clause (1) to make the debt service payments described in clause (2).;
(4) the amount of the loan requested hereunder is $ (which is equal _to the
difference between the first amount listed in clause (2) and the amount listed in clause
(3)); and
(5) this -is a "Notice of Insufficiency" within the meaning of the Agreement.
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 Bank upon its order, in United States Dollars and 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 Authorizing 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.
Dated: , 20
EDMONDS PUBLIC FACILITIES DISTRICT -
[Executive Director or designee)
soW)9so.o7
Exhibit C
Form Cancellation Notice
City of Edmonds
121 Fifth Avenue North
Edmonds, WA 98020
Attention: Finance/Administrative Services Director
VIA FACSIMILE
(with telephone confirmation)
Re: CANCELLATION NOTICE
Edmonds Public Facilities District
General and Revenue Obligation Line of Credit Note, 2005
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 Guarantee
Agreement (the "Agreement") dated as of October 26, 2005, by. and .among the City, the District and the
Bank of America, N.A., and the above -captioned note (the "Note'), that:
(1) the next Debt Service Payment Date. for the Note is: . 20_;
(2) the aggregate amount of debt service due on such date is $ which
represents principal of the Note in the amount of $ and interest on the Note
in the amount of $ ;
(3) the sum of (i) the amount on deposit in the District's Debt Service Fund as of
20_, and (ii) the payment the City is required to make on
20_, pursuant to the Annual Contribution Agreement, is
$ which amount will be sufficient to make the. debt service payments
described in clause (2);
(4) on , the District delivered to the City a Notice of Insufficiency; and
(5) this is a "Cancellation Notice" within the meaning of the Agreement.
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 meanmg.assigned to such terra in the
Agreement or, if not therein defined, as defined in the Authorizing 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.
Dated: , 20
EDMONDS PUBLIC FACILITIES DISTRICT
[Executive Director or designee]
.. -i t PHT c
5%6050.07
Exhibit D
Project Budget
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CERTIFICATION
I, the undersigned, City Clerk of the City of Edmonds, Washington (the "City"), hereby
certify as follows:
1. The foregoing Ordinance No. 3563 (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 September 27, 2005, as that 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.
1N WITNESS WHEREOF, I have hereunto set my hand this day of ,
2005.
CITY OF EDMONDS, WASHINGTON
City Clerk
(SEAL)
50571686.07
SUMMARY OF ORDINANCE NO. 3563
of the City of Edmonds, Washington
On the 27th day of September, 2005, the City Council of the City of Edmonds
passed Ordinance No. 3563. A summary of the content of said ordinance, consisting of
the title, provides as follows:
AN ORDINANCE of the City of Edmonds, Washington, approving and
authorizing the making of loans to the Edmonds Public Facilities District;
authorizing the execution of an agreement reflecting the conditions and
terms of such loans; approving and authorizing the making of annual
contributions to the Edmonds Public. Facilities District; authorizing the
execution of an agreement reflecting the conditions and terms of such
contributions; and providing for other matters properly relating thereto.
The full text of this Ordinance will be mailed upon request.
DATED this 28th day of September, 2005.
'4�� ,/. C.. /' c.
CITY CLERK, SANDRA S. CHASE
Affidavit of Publication
STATE OF WASHINGTON, S.S.
COUNTY OF SNOHONHSH
SUMMARY OF ORDINANCE NO. 3563
o t e it o mon s, as ington
i On the 27th day of September, 2005, the Cityy Council of
the City of Edmonds, passed Ordinance No. 3563. A summa-
ry of the content of said ordinance, consisting of the title, pro-
vides as follows:
lj AN ORDINANCE of the City of Edmonds, Washington,
approving
PublicFacilitiesDs tact authorizingof the execuns to the tion -
I of an agreement reflecting the conditions and terms of
such loans; approving and authorizing the making of an-
nual contributions to the Edmonds Public Facilities Dis-
trict; authorizing the execution of an agreement reflecting
the conditions and terms of such contributions; and pro-
viding for other matters properly relating thereto.
The full text of this Ordinance will be mailed upon request.
DATED this 261h day of September, 2005.
CITY CLERK, SANDRA S.'CHASE
Published: October 2, 2005.
OCT
2 2005
EDMONDS CITY C"_EP-K
The undersigned, being first duly sworn on oath deposes and says that she is Principal Clerk
of THE HERALD, a daily newspaper printed and published in the City of Everett, County of
Snohomish, and State of Washington; that said newspaper is a newspaper of general
circulation in said County and State; that said newspaper has been approved as a legal
newspaper by order of the Superior Court of Snohomish County and that the notice
Summary of Ordinance No. 3563
City of Edmonds
a printed copy of which is hereunto attached, was published in said newspaper proper and not
in supplement form, in the regular and entire edition of said paper on the following days and
times, namely:
October 02, 2005
and that said newspaper was regularly distributed to its subscribers during all of said period.
Subscribed an Swom to before me this
day of
October, 2005
3rd