AG 16-095 - US Department of Housing and Urban Development (HUD)AC-A Flo- 0°15
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
CONTRACT FOR LOAN GUARANTEE ASSISTANCE UNDER
SECTION 108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT
OF 1974, AS AMENDED, 42 U.S.C. §5308
Date of Contract
This Contract for Loan Guarantee Assistance ( "Contract ") is
entered into between City of Federal Way, Washington, as Borrower
(the "Borrower "), and the Secretary of Housing and Urban
Development ( "Secretary "), as guarantor for the Guarantee made
pursuant to section 108 ( "Section 108 ") of title I of the Housing
and Community Development Act of 1974, as amended (the "Act ") and
24 CFR Part 570, Subpart M, of the promissory note executed
contemporaneously herewith and numbered B- 13- vIC -53 -0015, in the
Maximum Commitment Amount of $3,030,000, and any amended note or
note issued in substitution for such note and having the same
note number (the "Note "). This is the first and only Contract
under the Funding Approval ( "Commitment ") of the same number,
which was approved by the Secretary on May 15, 2014, in the
amount of $3,030,000. The funds paid or credited to the account
of the Borrower pursuant to the Note are referred to herein as
the "Guaranteed Loan Funds." The Note (including the Fiscal
Agency Agreement and the Trust Agreement as defined in Section
I.A. of the Note and incorporated therein) is hereby incorporated
into the Contract. Terms used in the Contract with initial
capital letters and not otherwise defined in the text hereof
shall have the respective meanings given thereto in the Note.
The Fiscal Agency Agreement, and the Trust Agreement are sometimes
collectively referred to herein as the "Fiscal Agency /Trust
Agreements," and the Fiscal Agent and the Trustee respectively
are sometimes collectively referred to as the "Fiscal
Agent /Trustee. "
PART I
The Note: Advances and Records. The Note provides that
Advances and Conversion Date Advances shall be made
thereunder upon the written request of the Borrower and the
approval of the Secretary, pursuant to this Contract and the
Fiscal Agency Agreement. The Commitment Schedule attached to
the Note represents the principal repayment schedule for the
Maximum Commitment Amount of the Note. At all times, the
total amount of all Advances and Conversion Date Advances
under the Note for all Principal Due Dates shall not exceed
the Maximum Commitment Amount of the Note. Prior to the
Conversion Date (as defined in the Note, Section I.A.), the
total amount of Advances made by the Holder for each
Principal Due Date under the Note shall not exceed the
applicable Commitment Amount for such Principal Due Date set
forth in the Commitment Schedule of the Note. Prior to the
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Conversion Date, the Borrower agrees that the Fiscal Agent
pursuant to the Fiscal Agency Agreement shall record the date
and amount of each payment and Advance under the Note and
shall maintain the books and records of all Advances and
Conversion Date Advances for each Principal Due Date,
interest rates on Advances, payments, and Principal Amounts
outstanding for each Principal Due Date. On and after the
Conversion Date, the Borrower agrees that the Trustee
pursuant to the Trust Agreement will maintain the books and
records of all payments on the Note and all Principal Amounts
and interest rates on such Principal Amounts (each as to be
set forth on Schedule P &I to the Note). No advances of any
kind may be made on the Note after its Conversion Date.
Borrower's Requests for Advances. All requests for Advances
or Conversion Date Advances by the Borrower under the Note
shall: be in writing; specify the amount of the Advance
requested; identify the Note by Borrower, number and Maximum
Commitment Amount; be addressed to the Secretary at the
address for notices specified in paragraph 12(f) of this
Contract; be signed by an authorized official of the
Borrower; and otherwise be in the form prescribed by the
Secretary. Advances and Conversion Date Advances shall be
requested and will only be approved and made in increments of
not less than $1,000 for any Principal Due Date. A request
for an initial Advance under a Note, or a request for a
Conversion Date Advance, shall be received by the Secretary
at least ten Business Days prior to the Borrower's proposed
Funding Date or Conversion Date, as applicable. All other
requests for Advances shall be received by the Secretary not
less than five Business Days prior to the proposed Funding
Date. The Borrower may not deliver a Note or a request for
an Advance or Conversion Date Advance to the Secretary more
than two calendar months prior to the Borrower's proposed
Funding Date. At least two Business Days prior to the
proposed Funding Date or Conversion Date if the Borrower's
request was timely received, or the next available Funding
Date for which the request was timely received, the Secretary
shall, except as otherwise provided in paragraph 11(c) or 12
hereof, deliver a corresponding Authorization Order or
Advance Order (as applicable) to the Fiscal Agent in
accordance with Section 2.03 or 2.04 of the Fiscal Agency
Agreement for the applicable Funding Date or Conversion Date.
If the Borrower requests an Advance or Conversion Date
Advance of less than the outstanding Maximum Commitment
Amount under the Note, the Borrower may also specify in its
written request the amount of the Advance or Conversion Date
Advance to be allocated to each Commitment Amount or
Principal Amount per Principal Due Date under the Note. If
the Borrower does not specify how the Advance or Conversion
Date Advance should be allocated among Commitment
Amounts /Principal Due Dates, the Borrower hereby authorizes
the Secretary to direct the Fiscal Agent to allocate the
Advance to the respective Commitment Amounts or Principal
Amounts in order of the earliest Principal Due Date(s).
C Conversion; Public Offering. On the Conversion Date (if
any), trust certificates backed by the Note (and similar
notes issued by other Section 108 borrowers) will be
purchased for a purchase price of the full principal amount
thereof by underwriters selected by the Secretary (the
"Underwriters ") pursuant to an Underwriting Agreement between
the Underwriters and the Secretary, at a closing on such
Conversion Date as determined by the Secretary and the
Underwriters. The Borrower agrees that the interest rate at
which the trust certificate of a specified maturity is sold
to the Underwriters shall govern the interest rate inserted
on the Conversion Date in Schedule P &I of the Note for the
Principal Amount of corresponding maturity.
Consents. By execution of this Contract, the Borrower
ratifies and consents to the Secretary's selection of the
Underwriters and authorizes the Secretary to negotiate with
the Underwriters the terms of the Underwriting Agreement and
of the public offering of interests in the trust certificates
to investors (including the applicable interest rates). In
addition, by execution hereof the Borrower ratifies and
consents to the Secretary's selection of the Fiscal
Agent /Trustee and agrees to the respective terms of the
Fiscal Agency /Trust Agreements. If Advances have been made
in the Maximum Commitment Amount of the Note not less than
ten Business Days prior to the proposed Conversion Date, or
if the Borrower requests a Conversion Date Advance, the
Borrower authorizes the Secretary to deliver Schedule P &I to
the Note completed in accordance herewith to the Fiscal
Agent /Trustee on the Conversion Date in accordance with the
Fiscal Agency /Trust Agreements, concurrent with delivery of
the Secretary's Guarantee of the trust certificates at the
closing on the Conversion Date, and thereafter the Note shall
be enforceable in accordance with its terms including
Schedule P &I. In addition, the Secretary reserves the right
to notify the Borrower not less than one calendar month in
advance of a specified Conversion Date that the Note will be
sold to the Underwriters on such date, if the Secretary in
his sole discretion determines that market conditions or
program needs require the participation in the proposed
public offering of all or substantially all Borrowers with
outstanding Advances.
n
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PART II
1. Receipt, Deposit and Use of Guaranteed Loan Funds.
(a) Except for funds deducted on the Conversion Date
pursuant to paragraph 4(b) and fees and charges deducted by
the Fiscal Agent /Trustee pursuant to paragraph 4(a), the
Guaranteed Loan Funds shall be electronically transferred in
accordance with the Borrower's instructions for deposit in a
separate, identifiable account (the "Guaranteed Loan Funds
Account ") with a financial institution whose deposits or
accounts are Federally insured. The Guaranteed Loan Funds
Account shall be established and designated as prescribed in
the attached form document entitled "Letter Agreement for
Section 108 Loan Guarantee Program Deposit Account"
(Attachment 1) and shall be continuously maintained for the
Guaranteed Loan Funds. Such Letter Agreement must be
executed when the Guaranteed Loan Funds Account is
established. (A fully executed copy of such Letter Agreement
shall be submitted to the Secretary within thirty days of its
execution.)
The Borrower shall make withdrawals from said account only
for payment of the costs of approved Section 108 activities,
for transfer to the Loan Repayment Account or for the
temporary investment of funds pursuant to this paragraph
1(a). Such temporary investment of funds into the Guaranteed
Loan Funds Investment Account shall be required within three
Business Days after the balance of deposited funds exceeds
the amount of the Federal deposit insurance on the Guaranteed
Loan Funds Account. At that time, any balance of funds in
the Guaranteed Loan Funds Account exceeding such insurance
coverage shall be fully (100 %) and continuously invested in
Government Obligations, as defined in paragraph 10 hereof,
held in the Guaranteed Loan Funds Investment Account.
All temporary investments, whether or not required as above,
shall be limited to Government Obligations having maturities
that are consistent with the cash requirements of the
approved activities. In no event shall the investments
mature on or after September 30, 2017, or have maturities
which exceed one year. All such investments shall be held in
trust for the benefit of the Secretary by the above financial
institution in an account (the "Guaranteed Loan Funds
Investment Account ") established and designated as prescribed
in the attached form document entitled "Letter Agreement for
Section 108 Loan Guarantee Program Investment Account"
(Attachment 2), which account shall be maintained for all
Government Obligations purchased with funds from the
Guaranteed Loan Funds Account. The Guaranteed Loan Funds
Investment Account need only be established if and when the
Borrower is required to invest, or otherwise invests, the
Guaranteed. Loan Funds in Government Obligations. Such Letter
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Agreement must be executed when the Guaranteed Loan Funds
Investment Account is established. (A fully executed copy of
such Letter Agreement shall be submitted to the Secretary
within thirty days of its execution.) All proceeds and
income derived from such investments shall be returned to the
Guaranteed Loan Funds Account.
All funds in the Guaranteed Loan Funds Account or the
Guaranteed Loan Funds Investment Account must be withdrawn
and disbursed by the Borrower for approved activities by
September 30, 2017. Any funds remaining in either Account
after this date shall be immediately transferred to the Loan
Repayment Account established pursuant to paragraph 6 of this
Contract.
(b) The Borrower shall by the fifteenth day of each month
provide the Secretary with a written statement showing the
balance of funds in the Guaranteed Loan Funds Account and the
withdrawals from such account during the preceding calendar
month, and a statement identifying the obligations and their
assignments in the Guaranteed Loan Funds Investment Account.
(c) Upon the Secretary giving notice that the Borrower is in
Default under this Contract or the Note, all right, title,
and interest of the Borrower in and to the Guaranteed Loan
Funds and Guaranteed Loan Funds Investment Accounts shall
immediately vest in the Secretary for use in making payment
on the Note, purchase of Government Obligations in accordance
with paragraph 10, or payment of any other obligations of the
Borrower under this Contract or the Fiscal Agency /Trust
Agreements.
2 Payments Due on Note; Final Payment and Discharge. The
Borrower shall pay to the Fiscal Agent /Trustee, as collection
agent for the Note, all amounts due pursuant to the terms of
the Note. In accordance with the Note and the Fiscal
Agency /Trust Agreements, payment shall be made by 3:00 P.M.
(New York City time) on the seventh Business Day (the "Note
Payment Date ") preceding the relevant Interest Due Date or
Principal Due Date (each as defined in the Note). If any
Note Payment Date falls on a day that is not a Business Day,
then the required payment shall be made on the next Business
Day. Payment may be made by check or wire transfer.
Upon final payment of all amounts due to Holders under the
Note, including any payment made by the Secretary pursuant to
the Guarantee, the Fiscal Agent /Trustee is required by the
Fiscal Agency /Trust Agreements to return the Note to the
Secretary. Upon final payment to the Secretary of any
amounts due as a result of Guarantee Payments or otherwise
due under this Contract, the Secretary will cancel and return
the Note to the Borrower in discharge of the Borrower's
obligations under the Note.
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Selection of New Fiscal Agent or Trustee. The Secretary
shall select a new Fiscal Agent or Trustee if the Fiscal
Agent or Trustee resigns or is removed by the Secretary. The
Borrower hereby consents in advance to any such selection and
to any changes in the Fiscal Agency /Trust Agreements agreed
to by any Fiscal Agent or Trustee and the Secretary, subject
to paragraph 4(e) of this Contract.
4. Payments Due Fiscal Agent or Trustee; Documents to the
Secretary.
(a) The Borrower agrees to pay the fees of the Fiscal Agent
as required by Exhibit G to the Fiscal Agency Agreement, and
any additional amounts that may be due pursuant to Section
6.01 of the Fiscal Agency Agreement. If not paid by the
Borrower by any other means prior thereto, the Borrower
agrees that any such fees or additional amounts that have
been incurred prior to an Advance or a Conversion Date
Advance may be deducted by the Fiscal Agent /Trustee from the
proceeds of the Advance or Conversion Date Advance, as
applicable.
(b) The Borrower agrees to pay the Borrower's share, as
determined by the Secretary, of the customary and usual
issuance, underwriting, and other costs related to the public
offering and future administration of the Note and the trust
certificates, as approved by the Secretary, including the
cost of reimbursement and /or compensation of the Trustee
pursuant to the Trust Agreement, including Sections 3.11 and
7.01 thereof. In connection with the public offering on the
Conversion Date, such payment shall either be made by wire
transfer to the Trustee on the day prior to the Conversion
Date or shall be deducted from the Guaranteed Loan Funds on
the Conversion Date.
(c) The Borrower shall submit to the Secretary not later than
ten Business Days prior to the Funding Date for the initial
Advance hereunder, or if not submitted earlier, prior to any
Conversion Date or Public Offering Date applicable to the
Note, this executed Contract, the executed Note, a request
for an Advance or a Conversion Date Advance (as applicable)
in proper form, and an opinion acceptable to the Secretary
from the Borrower's counsel to the effect that: (i) the
governing body of the Borrower has authorized by resolution
or ordinance, in accordance with applicable State and local
law, the issuance of the Note and the execution of this
Contract; (ii) the Note and this Contract are valid, binding,
and enforceable obligations of the Borrower; (iii) the pledge
of funds pursuant to 24 CFR 570.705(b)(2) and paragraph 5(a)
of this Contract is valid and binding; and (iv) there is no
outstanding litigation that will affect the validity of the
Note or this Contract. In addition, the Borrower shall submit
any other additional documents or opinions specifically
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required by this Contract (e.g., paragraph 5(c), or paragraph
15, et seq.), at the time required thereby.
(d) The Borrower agrees to reimburse the Underwriters upon
demand by the Secretary for the Borrower's share, as
determined by the Secretary, of all reasonable out -of- pocket
expenses (including reasonable fees and disbursements of
counsel) incurred in connection with a proposed public
offering, if the Underwriters incur such additional costs for
the public offering because of any refusal, inability, or
failure on the part of the Borrower timely to submit in
acceptable form any document required by this Contract
(including paragraph 4(c)), or because of any withdrawal by
the Borrower from the public offering, after the Borrower has
submitted a request for a Conversion Date Advance hereunder.
By execution and delivery of this Contract to the Secretary,
the Borrower hereby expressly authorizes the Secretary to pay
amounts due under this paragraph from funds pledged under
paragraph 5(a) of this Contract.
(e) The undertakings in paragraphs 3 and 4 of this Contract
are expressly subject to the requirement that the Fiscal
Agency /Trust Agreements shall in no event require payment of
fees or charges, reimbursement of expenses, or any
indemnification by the Borrower from any source other than
funds pledged pursuant to paragraphs 5 or 15 et seq. of this
Contract.
Security. The Borrower hereby pledges as security for
repayment of the Note, and such other charges as may be
authorized in this Contract, the following:
(a) All allocations or grants which have been made or for
which the Borrower may become eligible under Section 106 of
the Act, as well as any grants which are or may become
available to the Borrower pursuant to Section 108(q).
(b) Program income, as defined at 24 CFR 570.500(a)(or any
successor regulation), directly generated from the use of the
Guaranteed Loan Funds.
(c) Other security as described in paragraph 15, et seq.
(d) All proceeds (including insurance and condemnation
proceeds) from any of the foregoing.
(e) All funds or investments in the accounts established
pursuant to paragraphs 1 and 6 of this Contract.
6. Loan Repayment Account.
(a) All amounts pledged pursuant to paragraphs 5(b), 5(c),
and 5(d) of this Contract shall be deposited immediately on
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receipt in a separate identifiable account (the "Loan
Repayment Account ") with a financial institution whose
deposits or accounts are Federally insured. The Loan
Repayment Account shall be established and designated as
prescribed in the attached form document entitled "Letter
Agreement for Section 108 Loan Guarantee Program Deposit
Account" (Attachment 1) and shall be maintained for such
pledged funds. The Loan Repayment Account need only be
established if and when the Borrower receives amounts pledged
pursuant to paragraph 5(b), 5(c) or 5(d). Such Letter
Agreement must be executed when the Loan Repayment Account is
established. (A fully executed copy of such Letter Agreement
shall be submitted to the Secretary within thirty days of its
execution.) Borrower shall make withdrawals from said
account only for the purpose of paying interest and principal
due on the Note (including the purchase of Government
Obligations in accordance with paragraph 10 hereof), for
payment of any other obligation of the Borrower under this
Contract or the Fiscal Agency /Trust Agreements, or for the
temporary investment of funds pursuant to this paragraph,
until final payment and discharge of the indebtedness
evidenced by the Note, unless otherwise expressly authorized
by the Secretary in writing. Such temporary investment of
funds shall be required within three Business Days after the
balance of deposited funds exceeds the amount of the Federal
deposit insurance on the Loan Repayment Account. At that
time, the balance of funds in the Loan Repayment Account
exceeding such insurance coverage shall be fully (100 %) and
continuously invested in Government Obligations, as defined
in paragraph 10 hereof.
All temporary investments, whether or not required as above,
shall be limited to Government Obligations having maturities
that are consistent with cash requirements for payment of
principal and interest as required under the Note. In no
event shall the maturities of such investments exceed one
year. All such investments shall be held in trust for the
benefit of the Secretary by the above financial institution
in an account (the "Loan Repayment Investment Account ")
established and designated as prescribed in the attached form
document entitled "Letter Agreement for Section 108 Loan
Guarantee Program Investment Account" (Attachment 2), which
account shall be maintained for all Government Obligations
purchased with funds from the Loan Repayment Account. Such
Letter Agreement must be executed when the Loan Repayment
Investment Account is established. (A fully executed copy of
such Letter Agreement shall be submitted to the Secretary
within thirty days of its execution.) All proceeds and
income derived from such investments shall be returned to the
Loan Repayment Account.
(b) Borrower shall by the fifteenth day of each month,
provide the Secretary with a written statement showing the
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balance of funds in the Loan Repayment Account and the
deposits and withdrawals of all funds in such account during
the preceding calendar month and a statement identifying the
obligations and their assignments in the Loan Repayment
Investment Account.
(c) Upon the Secretary giving notice that the Borrower is in
Default under this Contract or the Note, all right, title,
and interest of the Borrower in and to the Loan Repayment and
Loan Repayment Investment Accounts shall immediately vest in
the Secretary for use in making payment on the Note, purchase
of Government Obligations in accordance with paragraph 10, or
payment of any other obligation of the Borrower under this
Contract or the Fiscal Agency /Trust Agreements.
Use of CDBG, EDI or BEDI Funds for Repayment. Any funds
available to the Borrower under Section 106 of the Act
(including program income derived therefrom) are authorized to
be used by the Borrower for payments due on the Note, Optional
Redemption (as defined in the Note), payment of any other
obligation of the Borrower under this Contract or the Fiscal
Agency /Trust Agreements, or the purchase of Government
Obligations in accordance with paragraph 10. Any funds
specifically available to the Borrower for such payments or as a
debt service reserve under an EDI or BEDI Grant Agreement
pursuant to Section 108(q) of the Act which supports the
eligible project(s) and activities financed by the Note may also
be used therefor; any other use of Section 108(q) funds for such
purposes shall require the prior written approval of the
Secretary. Unless otherwise specifically provided herein or
unless otherwise expressly authorized by the Secretary in
writing, the Borrower shall substantially disburse funds
available in the Loan Repayment or the Loan Repayment Investment
Accounts before funds from grants under Section 106 of the Act
are withdrawn from the U.S. Treasury for such purposes.
Secretary's Right to Restrict Use of CDBG Funds to Repayment.
Upon a determination by the Secretary that payments required by
paragraph 2 and /or paragraph 4 of this Contract are unlikely to
be made as specified, the Secretary may give the Borrower notice
that the availability to the Borrower of funds pledged under
paragraph 5(a) of this Contract for purposes other than
satisfaction of the pledge is being restricted. This
restriction shall be in an amount estimated by the Secretary to
be sufficient to ensure that the payments referred to in
paragraph 2 and /or paragraph 4 hereof are made when due. This
restriction may be given effect by conditioning the restricted
amounts to prohibit disbursement for purposes other than
satisfaction of the pledge at the time such restricted funds are
approved as grants, by limiting the Borrower's ability to draw
down or expend the restricted funds for other purposes, and by
disapproving payment requests submitted with respect to such
grants for purposes other than satisfaction of the pledge.
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9 Secretary's Right to Use Pledged Funds for Repayment. The
Secretary may use funds pledged under paragraph 5(a) of this
Contract or funds restricted under grants pursuant to paragraph
8 of this Contract to make any payment required of the Borrower
under paragraph 2 and /or paragraph 4, if such payment has not
been timely made by the Borrower.
10 Defeasance. For purposes of this Contract, after the Conversion
Date the Note shall be deemed to have been paid (defeased) if
there shall have been deposited with the Trustee either moneys
or Government Obligations (as defined below), which in the sole
determination of the Secretary, mature and bear interest at
times and in amounts sufficient, together with any other moneys
on deposit with the Trustee for such purpose, to pay when due
the principal and interest to become due on the Note. The
Aggregate Principal Amount of the Note or any unpaid Principal
Amount may be so defeased, in whole or in part, as of any
Interest Due Date, or any other Business Day acceptable to both
HUD and the Borrower. In accordance with the Note and the Trust
Agreement, the Borrower shall give timely notice and written
instructions to the Secretary and the Trustee concerning any
principal amounts proposed to be defeased, including any
Optional Redemptions proposed, which instructions shall be
approved by the Secretary. If the unpaid Aggregate Principal
Amount of the Note guaranteed pursuant to this Contract shall be
defeased and deemed to have been paid in full, then the Borrower
shall be released from all agreements, covenants, and further
obligations under the Note.
"Government Obligation" means a direct obligation of, or any
obligation for which the full and timely payment of principal
and interest is guaranteed by, the United States of America,
including but not limited to, United States Treasury
Certificates of Indebtedness, Notes and Bonds - State and Local
Government Series or certificates of ownership of the principal
of or interest on direct obligations of, or obligations
unconditionally guaranteed by, the United States of America,
which obligations are held in trust by a commercial bank which
is a member of the Federal Reserve System and has capital and
surplus (exclusive of undivided profits) in excess of
$100,000,000.
11. Default. (a) A Default under the Note and this Contract
shall occur upon failure by the Borrower to:
(i) pay when due an installment of principal or interest
on the Note; or (ii) punctually and properly perform,
observe, and comply with any covenant, agreement, or
condition contained in: (A) this Contract, (B) any
security agreement, deed of trust, mortgage, assignment,
guarantee, or other contract securing payment of
indebtedness evidenced by the Note, or (C) any future
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amendments, modifications, restatements, renewals, or
extensions of any such documents.
(b) The Borrower waives notice of Default and opportunity
for hearing with respect to a Default under paragraph 11(a).
(c) In addition to Defaults under paragraph 11(a), the
Secretary may declare the Note in Default if the Secretary
makes a final decision in accordance with the provisions of
section 111 of the Act and 24 CFR 570.913 (or any successor
provisions), including requirements for reasonable notice and
opportunity for hearing, that the Borrower has failed to
comply substantially with title I of the Act.
Notwithstanding any other provision, following the giving of
such reasonable notice, the Secretary may, in the Secretary's
sole discretion pending the Secretary's final decision,
withhold the guarantee of any or all obligations not yet
guaranteed on behalf of the Borrower under outstanding
commitments, suspend approval of any further Advances or
Conversion Date Advances under the Note, and/or direct the
Borrower's financial institution to: refuse to honor any
instruments drawn upon, or withdrawals from, the Guaranteed
Loan Funds Account or the Loan Repayment Account initiated by
the Borrower, and /or refuse to release obligations and
assignments by the Borrower from the Guaranteed Loan Funds
Investment Account or the Loan Repayment Investment Account.
12. Remedial Actions. Upon a Default or declaration of Default
under this Contract, the Secretary may, in the Secretary's sole
discretion, take any or all of the following remedial actions:
(a) With any funds or security pledged under this Contract, the
Secretary may: (i) continue to make payments due on the Note,
(ii) make a prepayment under Section I.D. of the Note or make an
acceleration payment with respect to the principal amount of the
Note subject to Optional Redemption as provided in Section III
of the Note, (iii) purchase Government Obligations in accordance
with paragraph 10 of this Contract, (iv) pay any interest due
for late payment as provided in the Note, this Contract, or the
Fiscal Agency /Trust Agreements, (v) pay any other obligation of
the Borrower under this Contract or the Fiscal Agency /Trust
Agreements, and /or (vi) pay any reasonable expenses incurred by
the Secretary or the Fiscal Agent /Trustee as result of the
Borrower's Default.
(b) The Secretary may withhold the guarantee of any or all
obligations not yet guaranteed or the disbursement of any or all
grants not yet disbursed in full under outstanding guarantee
commitments or grant approvals for the Borrower under Sections
108 and /or 106 of the Act.
(c) The Secretary may withhold approval of any or all further
Advances or Conversion Date Advances under the Note (if
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applicable); direct the Borrower's financial institution to
refuse to: honor any instruments drawn upon, or withdrawals
from, the Guaranteed Loan Funds Account or the Loan Repayment
Account by the Borrower, and /or to release obligations and
assignments by the Borrower from the Guaranteed Loan Funds
Investment Account or the Loan Repayment Investment Account;
and /or direct the Borrower and /or the Borrower's financial
institution to transfer remaining balances from the Guaranteed
Loan Funds Account to the Loan Repayment Account.
(d) Until the Conversion Date, or with respect to amounts
subject to Optional Redemption, the Secretary may accelerate the
Note.
(e) The Secretary may exercise any other appropriate remedies
or sanctions available by law or regulation applicable to the
assistance provided under this Contract, or may institute any
other action available under law to recover Guaranteed Loan
Funds or to reimburse the Secretary for any payment under the
Secretary's Guarantee or any reasonable expenses incurred by the
Secretary as a result of the Default.
(f) All notices and submissions provided for hereunder shall be
in writing (including by telex, telecopier or any other form of
facsimile communication) and mailed or sent or delivered, as to
each party hereto, at its address set forth below or at such
other address as shall be designated by such party in a written
notice to the other party hereto. All such notices and other
communications shall be effective when received as follows: (i)
if sent by hand delivery, upon delivery; (ii) if sent by mail,
upon the earlier of the date of receipt or five Business Days
after deposit in the mail, postage prepaid; (iii) if sent by
telex, upon receipt by the sender of an answer back; and (iv) if
sent by telecopier, upon receipt.
The Secretary:
U.S. Dept. of Housing and Urban Development
Attention: Paul Webster, Director
Financial Management Division
451 7th Street SW, Room 7180
Washington, DC 20410
Borrower:
Honorable Jim Ferrell, Mayor
City of Federal'ay_
33325 8th Avenue S
Federal Way WA 98003
13. Limited Liability. Notwithstanding any other provision of this
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Contract, the Fiscal Agency /Trust Agreements or the Note, any
recovery against the Borrower for any liability for amounts due
pursuant to the Note, the Fiscal Agency /Trust Agreements or this
Contract shall be limited to the sources of security pledged in
paragraph 5 or any Special Conditions of this Contract. Neither
the general credit nor the taxing power of the Borrower, or of
the State in which the Borrower is located, is pledged for any
payment due under the Note, the Contract, or the Fiscal
Agency /Trust Agreements.
14. Incorporated Grant Agreement. The Contract and the Note are
hereby incorporated in'and made a part of the Grant Agreement
authorized by the Secretary on July 26, 2013, under the Funding
Approval for grant number B- 13 -MC -53 -0015 to the Borrower. In
carrying out activities with the Guaranteed Loan Funds hereunder,
the Borrower agrees to comply with the Act and 24 CFR Part 570,
as provided in Subpart M thereof.
15. Special Conditions and Modifications:
(a) Paragraph 5(c) of the Contract is amended by deleting
the paragraph as written in its entirety and
substituting therefor the following:
(c) Borrower pledges the full faith and credit of the
Borrower, as described and pledged in the Borrower's
resolution No. 16 -704 dated May 3, 2016, to the
payment of principal and interest on the promissory
note executed contemporaneously herewith and numbered
B- 13 -MC -53 -0015 in the Maximum Commitment Amount of
$3,030,000.
(i) The Borrower shall deliver to the Secretary,
contemporaneously with the delivery of this
Contract and the Note numbered B- 13 -MC -53 -0015 in
the Maximum Commitment Amount of $3,030,000:
A. an opinion of Borrower's counsel on its
letterhead, addressed to the Secretary and
satisfactory to the Secretary, that the full
faith and credit pledge of the Borrower in
the Resolution described in paragraph 15(a)
is a valid, legally binding, and enforceable
obligation of the Borrower. This opinion
shall include an explanation of Borrower's
full faith and credit pledge in the
[ordinance /resolution] identified in
paragraph 15(a), which shall describe:
Borrower's legal authority for the full faith
and credit pledge; the Borrower's sources of
revenue(s), which shall be used in case of
payment under Borrower's full faith and
credit pledge; and each and every limit,
14
statutory or otherwise, that Borrower is
subject to in making payments under its
pledge of full faith and credit.
(b) Guaranteed Loan Funds may be used by the Borrower to
finance public facility and improvement activities in
accordance with 24 CFR 570.703 (1) .
(c) Additional Grounds for Default. Notice of Default.
Restriction of Pledged Grants. Availability of
Other Remedial Actions.
(i) The Borrower acknowledges and agrees that the
Secretary's guarantee of the Note is made in reliance
upon the availability of grants pledged pursuant to
paragraph 5(a) (individually, a "Pledged Grant" and,
collectively, the "Pledged Grants ") in any Federal
fiscal year subsequent to the Federal fiscal year
ending September 30, 203, to: (A) pay when due the
payments to become due on the Note, or (B) defease (or,
if permitted, prepay) the full amount outstanding on
the Note. The Borrower further acknowledges and agrees
that if the Secretary (in the Secretary's sole
discretion) determines that Pledged Grants are unlikely
to be available for either of such purposes, such
determination shall be a permissible basis for any of
the actions specified in paragraphs (ii) and (iii)
below (without notice or hearing, which the Borrower
expressly waives).
(ii) Upon written notice from the Secretary to the
Borrower at the address specified in paragraph 12(f)
above that the Secretary (in the Secretary's sole
discretion) has determined that Pledged Grants are
unlikely to be available for either of the purposes
specified in (A) and (8) of paragraph (i) above (such
notice being hereinafter referred to as the "Notice of
Impaired Security "), the Secretary may limit the
availability of Pledged Grants by withholding amounts
at the time a Pledged Grant is approved or by
disapproving payment requests (drawdowns) submitted
with respect to Pledged Grants.
e(iii) If after 60 days from the Notice of Impaired
Security the Secretary (in the Secretary's sole
discretion) determines that Pledged Grants are still
unlikely to be available for either of the purposes
specified in (A) and (8) of paragraph (i) above, the
Secretary may declare the Note in Default and exercise
any and all remedies available under paragraph 12.
This paragraph (iii) shall not affect the right of the
Secretary to declare the Note and /or this Contract in
Default pursuant to paragraph 11 and to exercise in
connection therewith any and all remedies available
15
under paragraph 12.
(iv) All notices and submissions provided for hereunder
shall be submitted as directed in paragraph 12(f)
above.
[Rest of Page Intentionally Left Blank]
16
THE UNDERSIGNED, as authorized officials on behalf of the
Borrower or the Secretary, have executed this Contract for Loan
Guarantee Assistance, which shall be effective as of the date of
execution hereof on behalf of the Secretary.
City of Federal Way
BY:
Signe,tur
Jim Ferrell
(Name)
Mayor
(Title)
June 28, 2016
(Date)
SECRETARY OF HOUSING AND URBAN
DEVELOPMENT
BY:
(Signature)
Marion Mollegen McFadden
(Name)
Deputy Assistant Secretary
for Grant Programs
(Title)
(Date)
Note No. B- 13- MC -53- 0015
Attachment 1
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
LETTER AGREEMENT FOR
SECTION 108 LOAN GUARANTEE PROGRAM
DEPOSIT ACCOUNT
(&ath # 137
Name o-ftsttution (and Branch)
32/"PO pace, sS
Street
citaa -t eno
City, State, Zip Code
***************************************** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * **
[ X ] This account is established for funds received by the Borrower under Note(s)
guaranteed by the United States Department of Housing and Urban Development (HUD)
under the Section 108 Loan Guarantee Program (Guaranteed Loan Funds Account).
[ ] This account is established for repayment of the Note(s) guaranteed by HUD under
the Section 108 Loan Guarantee Program (Loan Repayment Account).
[ ] This account is established as a debt service reserve under the Section 108 Loan
Guarantee Program (Debt Service Reserve Account).
You are hereby authorized and requested to establish a deposit account to be
specifically designated:
"City of Federal Way, Washington, as Trustee of United States Department di-lousing
and Urban Development." All deposits made into such account shall be subject to
withdrawal therefrom by the Borrower named below, unless and until HUD provides you
with a notice that it is assuming control over the account. Thereafter withdrawals may
not be made by the Borrower. Within a reasonable period of time, not to exceed two
business days, after your receipt of such notice from HUD, you shall so prevent such
Borrower withdrawals and, if requested by HUD in writing, shall thereafter forward
monthly to HUD, to an account it specifies in its notice, the collected and available
balance in such account.
You are further authorized, after receipt of the notice from HUD, to refuse to
honor any instrument drawn upon or withdrawals from such account by parties other than
HUD. In no instance shall the funds in the deposit account be used to offset funds which
may have been advanced to, or on behalf of, the Borrower by you. You are permitted,
however, to debit from the account your customary fees and charges for maintaining the
account and the amount of any deposits that are made to the account and returned unpaid
for any reason.
Such account shall also be subject to your standard agreement and documents
relating to the opening and maintenance of bank accounts with you. In the event of any
conflict between this Letter Agreement and such. agreements and documents, this Letter
Agreement shall control.
This letter is submitted to you in duplicate. Please execute the duplicate copy of
the certificate below, acknowledging the existence of such account, so that we may
present the copy signed by you to HUD.
Name ofBoirower. City of Federal Way,, Wash n on
[Signature]
Date: {.0
Name and Title: Ade Ariwoola, Finance Director
***************************************** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * **
The undersigned institution certifies to the United States Department of Housing and
Urban Development (HUD) that the account identified is in existence in this institution
under account number: 41131 Mt 9 5 u tp , and agrees with the Borrower
named above and HUD to promptly comply with HUD's notice in the manner provided
in the above letter, but in no event to exceed two business days. The undersigned
institution further agrees, after receipt of the HUD notice as set forth above, to refuse to
honor any instruments drawn upon or withdrawals from such account by parties other
than HUD. In no instance shall the funds in the deposit account be used to offset funds
which may have been advanced to, or on behalf of, the Borrower by the institution,
except as set forth above. Deposits in this institution are insured by the Federal Deposit
Insurance Corporation, the Federal Savings and Loan Insurance Corporation, or the
National Credit Union Administration up to statutory limits.
Name, of Institution:
$cm.s ft-
(Signature)
Name and Title: O ttVt &. ?ei 6Nn.1 FziN k2.:Z.
8 -28-08
nn or
Federal Way
June 28, 2016
U.S. Department of Housing and Urban Development
Paul D. Webster, Director
Financial Management Division - Room 7180
451 Seventh Street, SW
Washington, DC 20410
RE REQUEST FOR ADVANCE No. 1: City of Federal Way, Washington
Note No. B- 13 -MC -53 -0015
Dear Mr. Webster:
CITY HALL
33325 8th Avenue South
Federal Way, WA 98003 -6325
(253) 835 -7000
www. cityoffederalway. com
Jim Ferrell, Mayor
The City of Federal Way, Washington, hereby requests an advance in the amount of $1,636,000.00 (One
Million Six Hundred Thirty Six Thousand Dollars and 00/100 cents) under the Variable/Fixed Rate ( "VFR ")
Note No. B- 13 -MC -53 -0015, guaranteed pursuant to Section 108 of the Housing and Community
Development Act of 1974, as amended.
The amount to be advanced under the Note(s) is $1,636,000.00 (One Million Six Hundred Thirty Six
Thousand Dollars and 00/100 cents)
Principal Due Date Advance Amount
1. August 1, 2016 $0
2. August 1, 2017 $86,000.00
3. August 1, 2018 $86,000.00
4. August 1, 2019 $86,000.00
5. August 1, 2020 $86,000.00
6. August 1, 2021 $86,000.00
7. August 1, 2022 $86,000.00
8. August 1, 2023 $86,000.00
9. August 1, 2024 $86,000.00
10. August 1, 2025 $86,000.00
11. August 1, 2026 $86,000.00
12. August 1, 2027 $86,000.00
13. August 1, 2028 $86,000.00
14. August 1, 2029 $86,000.00
15. August 1, 2030 $86,000.00
16. August 1, 2031 $86,000.00
17. August 1, 2032 $86,000.00
18. August 1, 2033 $86,000.00
19. August 1, 2034 $87,000.00
20. August 1, 2035 $87,000.00
Total $1,636,000.00
U.S. Department of Housing and Urban Development
Paul D. Webster, Director
Financial Management Division
RE: REQUEST FOR ADVANCE No. 1: City of Federal Way, Washington
Note No. B- 13 -MC -53 -0015
Page 2 of 2
Please wire- transfer the advance using the following information:
BORROWER
AMOUNT
VARIABLE/FIXED RATE NOTE NUMBER
1. Name of Bank
2. Address of Receiving Bank
3. A.B.A. Number*
4. Borrower's Account Number
5. Account Name
6. Bank Official to Contact
7. Phone Number of Bank Official
. City of Federal Way, Washington
: $1,636,000.00
: B- 13 -MC -53 -0015
Key Bank
32400 Pacific Highway South,
Federal Way, WA 98003
125000574
471371019566
City of Federal Way
Olivia Smith
206- 870 -2521
Questions regarding this Request for Advance should•be directed to:
Ade Ariwoola, Finance Director
253- 835 -2520
Ade.AriNvoolatr eity%offkd&:.ralwtiv.cotn
Or
Jeffrey Watson, Community Services Manager
253 -835 -2650
Jt..if Watson Ovcii
Best Regards,
Ade Ariwoola
Finance Director
Services Manager
1988 -201 -760/8
0
0
.e
CITY OF
► Federal Way
June 28, 2016
Department of Housing and Urban Development
Financial Management Division
Attn: Paul D. Webster, Director
451 Seventh Street, S.W., Room 7180
Washington, D.C. 20410
CITY HALL
33325 8th Avenue South
Federal Way, WA 98003 -6325
(253) 835 -7000
www, cityoffederalway. corn
Jim Ferrell, Mayor
RE: CLOSING DOCUMENTS - Section 108 Loan: City of Federal Way, Washington
Note No. B- 013 -MC -53 -0015
Dear Mr. Webster,
The City of Federal Way, Washington, is herewith forwarding documents for the closing of our
Section 108 Loan, Note No. B- 013 -MC -53 -0015. The following documents are enclosed.
• Contract for Loan Guarantee Assistance, including the following attachments:
o Letter Agreement for Section 108 Loan Guarantee Program Deposit Account;
o City of Federal Way City Council Resolution #15 -691, authorizing submittal of the
Section 108 Loan Application in support of development of the Performing Arts &
Events Center; and
o City of Federal Way City Council Resolution #16 -704, pledging the City's full faith
and credit in support of its Section 108 Loan for the development of the Performing
Arts and Events Center.
Variable/Fixed Rate Note No. B- 013 -MC -53 -0015;
Legal Opinion regarding the City's Section 108 Loan;
Two Signature Cards with Original Signatures; and
Letter Request for Advance No. 1.
Department of Housing and urban Development
Financial Management Division
Attn: Paul D. Webster, Director
June 28, 2016
Page 2 of 2
If you need additional information, please do not hesitate to contact Jeffrey Watson at (253) 835-
2650.
Respectfully,
Ferrell, Mayor
City of Federal Way, Washington
CC: Mr. Ade Ariwoola, Finance Director
Mr. Scott Sproul, Acting Director - Community Development Department
Mr. Jeffrey Watson, Community Services Manager - Community Development
Department
Mr. Chuck Depew, Director - National Development Council, Seattle Office
Ms. Lori Martin, HUD - Seattle Office
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
SECTION 108 LOAN GUARANTEE PROGRAM
VARIABLE /FIXED RATE NOTE
NOTE NUMBER: B- 13 -MC -53 -0015
BORROWER: City of Federal Way,
Washington
[Performing Arts and Conference
Center (PACC) project]
MAXIMUM COMMITMENT
AMOUNT: $3,030,000
COMMITMENT AMOUNTS: See
DATE OF NOTE:
PRINCIPAL DUE DATES AND PRINCIPAL
AMOUNT: Before the Conversion Date, the
aggregate of Advances made for each
applicable Principal Due Date specified in the
Commitment Schedule to this Note; on or after
the Conversion Date, the Principal Amount (if
any) listed for each Principal Due Date in
Schedule P & I hereto.
VARIABLE INTEREST RATE: As set forth below.
REGISTERED HOLDER:
I. Terms Applicable
A. Advances
Daedalus & Co
As Nominee for
Money Market Obligations Trust
on behalf of its Government Obligations Fund
efore the Conversion Date
For value received, the undersigned, City of Federal Way (the "Borrower"), which term includes
any successors and assigns, a public entity organized and existing under the laws of the State (or
Commonwealth as applicable) of Washington, promises to pay to the Registered Holder (the
"Holder," which term includes any successors or assigns), at the time, in the manner, and with
interest at the rate or rates hereinafter provided, such amounts as may be advanced under this
Note from time to time by the Holder for disbursement to, or on behalf of, the Borrower
(individually, an "Advance ", and collectively, "Advances "). The Holder shall make Advances
upon the written request of the Borrower and the approval of the Secretary of Housing and Urban
Development or his designee (the "Secretary "), pursuant to the Contract for Loan Guarantee
Assistance (as further defined in Section N.A. of this Note, the "Contract "), and the Amended
and Restated Master Fiscal Agency Agreement (the "Fiscal Agency Agreement ") dated as of
May 17, 2000, between The Bank of New York Mellon (successor to The Chase Manhattan
Bank and JPMorgan Chase Bank, N.A.), as Fiscal Agent (the "Fiscal Agent "), and the Secretary.
The total amount of Advances made for each Principal Due Date under this Note shall not
exceed the applicable Commitment Amount for such Principal Due Date set forth on the
Commitment Schedule attached hereto. The aggregate of all Advances under this Note for all
Principal Due Dates shall not exceed the Maximum Commitment Amount specified on the
attached Commitment Schedule. The Fiscal Agent shall record the date and amount of all
payments and Advances on this Note and maintain the books and records of all such Advances
and Commitment Amounts for each corresponding Principal Due Date, and all payments. No
Advances shall be made on this Note after its Conversion Date.
As used herein, "Conversion Date" means the date (if any) upon which this Note is (i)
delivered by the Holder to the Fiscal Agent against payment therefore by the purchasers selected
by the Secretary to make such payment; and (ii) assigned to Bank of New York Mellon (or any
successor thereto) acting in its capacity as Trustee (the "Trustee ") pursuant to a Trust Agreement
between the Secretary and the Trustee, dated as of January 1, 1995, as such agreement may be
amended or supplemented (the "Trust Agreement "). Upon the occurrence of both (i) and (ii) in
the previous sentence, Section III of this Note applies, thereby converting this Note to a fixed
rate obligation.
B. Variable Rate of Interest
From and including the date of each Advance to but excluding the earlier of (i) the
Conversion Date, and (ii) the date of redemption or prepayment of such Advance pursuant to
Section I.D. below (each such date of redemption or prepayment, a "Prepayment Date ") interest
shall be paid quarterly at a variable interest rate (as set forth below) on the unpaid principal
balance of each Advance on the first day of each February, May, August and November (each, an
"Interim Payment Date "), commencing on the first Interim Payment Date after the initial Advance
is made under this Note. Interest also shall be paid on each applicable Conversion Date,
Prepayment Date or Principal Due Date. The amount of interest payable on each Interim Payment
Date will represent interest accrued during the three -month period ending immediately prior to
such Interim Payment Date, or in the case of the first Interim Payment Date following each
Advance that is not made on an Interim Payment Date, the period from and including the date of
such Advance to but excluding the first Interim Payment Date following such Advance. The
amount of interest payable on this Note's Conversion Date, Prepayment Date, or on any Principal
Due Date that precedes such Conversion Date will represent interest accrued during the
2
period from the last Interim Payment Date to such Conversion Date, Prepayment Date,
or Principal Due Date, respectively.
The initial variable interest rate for each Advance will be set on the date of such Advance
and will be equal to 20 basis points (0.2 %) above the Applicable LIBO Rate (as hereinafter
defined) and thereafter will be adjusted monthly on the first day of each month (each, a "Reset
Date ") to a variable interest rate equal to 20 basis points (0.2 %) above the Applicable LIBO Rate
(such interest rate, as reset from time to time, the "Standard Note Rate "). If the Conversion Date
for this Note has not occurred by the March 1 following the initial Advance under this Note, then
the terms of Appendix A shall be used to set the variable interest rate. If the Fiscal Agent does
not receive notice of either a Negotiated Special Interest Rate or Holder Determined Special
Interest Rate (as defined in Appendix A attached hereto) from the Secretary or Holder,
respectively, by the times specified in Appendix A to this Note, then the Standard Note Rate shall
apply for the period to which such Negotiated Special Interest Rate or Holder Determined
Special Interest Rate would otherwise apply. The Fiscal Agent may conclusively rely on any
such notice as to the correctness of any matters set forth therein. Appendix A shall be
inapplicable to this Note on or after the Conversion Date.
"LIBO Rate" for any given Business Day means, except in the case of manifest error, the
interest rate per annum published on that day in the Eastern Edition of The Wall Street Journal or
any successor publication ( "WSJ "), published by Dow Jones & Company, Inc., in the section titled
"Money Rates" (or any successor section) and opposite the caption "London Interbank Offered
Rates (LIBOR) — three months" (or any successor caption). If such rate does not appear in WSJ on
a given Business Day, for each interest period, the LIBO Rate shall be the interest rate, converted
to a bond- equivalent yield basis, for deposits in U.S. dollars for three months which appears on
Telerate Page 3750 or such other page as may replace Page 3750 on that service or such other
service or services as may be nominated by the British Bankers' Association for the purpose of
displaying such rate (together, "Telerate Page 3750 ") as of 11:00 a.m., London time, on the day
(the "Determination Date ") that is two London Banking Days preceding the relevant Reset Date or
Advance. If such rate does not appear on Telerate Page 3750 on such Determination Date, such
rate shall be obtained from the Reuters Screen ISDA Page as of 11:00 a.m., London time, on such
Determination Date. If, in turn, such rate does not appear on the Reuters Screen ISDA Page on
such Determination Date, the offered quotation from each of four reference banks (expressed as a
percentage per annum) as of approximately 11:00 a.m., London time, on such Determination Date
for deposits in U.S. dollars to prime banks on the London interbank market for a 3 -month period,
commencing on the Reset Date or date of such Advance, shall be obtained. If at least two such
quotations are provided, the LIBO Rate for such Reset Date or date of such Advance will be the
arithmetic mean of the quotations, rounded to five decimal places. If fewer than two such
quotations are provided as requested, the LIBO Rate for that Determination Date shall be the rate
for the most recent day preceding such Determination Date for which the LIBO Rate shall have
been displayed on Telerate Page 3750. The LIBO Rate for any interest period shall be converted to
a bond - equivalent yield basis by multiplying such rate by the actual number of days in such interest
period and dividing that number by 180.
3
"Applicable LIBO Rate" means: (1) with respect to the initial interest rate for the first
Advance hereunder, the LIBO Rate two London Banking Days before the date of such first
Advance; (2) with respect to the initial interest rate for any subsequent Advance made before the
first Reset Date, the interest rate borne by the first Advance; (3) with respect to the initial interest
rate for any subsequent Advance made after the first Reset Date, the LIBO Rate two London
Banking Days before the immediately preceding Reset Date; and (4) with respect to the
subsequent interest rate at any Reset Date for any Advance, the LIBO Rate two London Banking
Days before such Reset Date.
"London Banking Day" means any day in which dealings in deposits in United States
dollars are transacted in the London interbank market. Interest payable on or before the
Conversion Date shall be calculated on the basis of a 360 -day year and the actual number of days
lapsed.
C. Principal Amount
Prior to the Conversion Date, the aggregate amount of Advances under this Note for each
specified Principal Due Date shall be the Principal Amount paid by the Borrower on such
Principal Due Date (as assigned to such Advances by the Secretary's instructions to the Fiscal
Agent in accordance with the Contract and the Fiscal Agency Agreement), except to the extent
such Principal Amount shall have been reduced by redemption before such Principal Due Date as
provided below.
D. Redemption before Conversion Date
At any time on or before the Conversion Date, the Borrower, with the consent of the
Secretary, may redeem this Note, in whole or in part, upon fourteen calendar days notice to the
Fiscal Agent and the Secretary, at the purchase price of one hundred percent (100 %) of the
unpaid Principal Amount to be redeemed, plus accrued interest thereon to the date of redemption.
Partial redemptions shall be credited against the applicable Principal Amount(s). The related
Commitment Amounts and the Maximum Commitment Amount shall be adjusted concurrently
with any such redemptions in accordance with the Secretary's instructions to the Fiscal Agent
pursuant to the Contract and the Fiscal Agency Agreement.
II. Conversion
The following events shall occur on the Conversion Date:
4
A. Schedule P &I
On the Conversion Date all Advances owed by the Borrower under this Note with the
same Principal Due Date shall be aggregated into a single Principal Amount which will accrue
interest at the fixed rate applicable to such Principal Due Date. Such Principal Amount may be
adjusted by the Fiscal Agent in accordance with the following paragraph or paragraph IV.H, as
applicable. Whether or not adjusted, each Principal Amount, the fixed rate applicable to each
Principal Amount, and the applicable Principal Due Date, shall be listed by the Secretary in
Schedule P &I. Schedule P &I will be provided by the Secretary to the Fiscal Agent and attached
to this Note by the Fiscal Agent upon the Fiscal Agent's receipt of this Note on the Conversion
Date.
B. Conversion Date Advances
If, on or prior to the Conversion Date, the Borrower has not utilized the entire
Commitment Amount indicated on the Commitment Schedule attached hereto for a given
Principal Due Date, the Borrower may, in accordance with the Fiscal Agency Agreement and
the Contract, and with the approval of the Secretary, utilize such Commitment Amount on the
Conversion Date to obtain a Conversion Date Advance. A "Conversion Date Advance" shall
mean any amount by which the Secretary instructs the Fiscal Agent to increase a Principal
Amount on Schedule P &I for a given Principal Due Date, effective as of the Conversion Date of
this Note. Conversion Date Advances shall be funded by the sale of this Note to the purchaser
selected by the Secretary. The proceeds of a Conversion Date Advance (net of any applicable
fees) shall be distributed to or on behalf of the Borrower on the Conversion Date. The total
amount of Conversion Date Advances hereunder shall not exceed the sum of any unused
Commitment Amounts for all Principal Due Dates.
IIL Terms Applicable Upon Conversion.
The following terms shall apply to this Note from the Conversion Date (if any) until this
Note is canceled, or matured and paid in full:
Commencing on the Conversion Date, the Borrower promises to pay to the Holder on
the applicable Principal Due Date each Principal Amount set forth on the attached Schedule
P &I, together with interest on each such Principal Amount at the rate applicable thereto
specified on the Schedule P &L Interest shall be calculated and payments shall be made in the
manner set forth below.
Interest on each scheduled Principal Amount of this Note due as of a given date specified
on Schedule P &I hereto shall accrue at the related per annum rate specified on Schedule P &I from
(and including) the Conversion Date to (but excluding) such Principal Due Date or, if applicable,
to the applicable Interest Due Date on which an Optional Redemption (as defined below) occurs.
Each interest amount accrued on each unpaid Principal Amount of this Note shall be due
semiannually as of February 1 and August I of each year (each such February 1 and
5
August 1, an "Interest Due Date ") commencing on the first such date after the Conversion Date,
until each Principal Amount listed on Schedule P &I to this Note is paid m full. Interest shall be
calculated on the basis of a 360 -day year consisting of twelve 30-day months.
Certain Principal Amounts that are indicated as being eligible for Optional Redemption on
Schedule P &I may be paid, in whole or in part, at the option of the Borrower as of any Interest
Due Date on or after the date specified in such schedule (an "Optional Redemption "). In order to
elect an Optional Redemption of such a Principal Amount, the Borrower shall give notice of its
intention to prepay a Principal Amount to the Trustee and the Secretary not less than 60 days and
not more than 90 days prior to the Interest Due Date as of which the Borrower intends to prepay
the Principal Amount. The Trustee shall apply any payments received in respect of Optional.
Redemptions in accordance with written instructions of the Borrower, as approved by the
Secretary. Principal Amounts that are not indicated as being eligible for Optional Redemption on
Schedule P &I may not be prepaid.
IV. General Terms
A. Additional Definitions
For purposes of this Note, the following terms shall be defined as follows:
"Business Day" shall mean a day on which banking institutions in New York City are
not required or authorized to remain closed and on which the Federal Reserve Bank and the New
York Stock Exchange are not closed. If any payment (including a payment by the Secretary) is
required to be made on a day that is not a Business Day, then payment shall be made on the next
Business Day.
"Contract" shall mean the Contract for Loan Guarantee Assistance, and any amendments
thereto, among the Secretary and the Borrower, the designated public entity named therein (if
applicable), and the State named therein (if applicable), that refers to and incorporates this Note
by the number hereof.
"Principal Amount" shall mean: (i) before the Conversion Date for this Note, the
aggregate amount of Advances made for each Principal Due Date specified in the Commitment
Schedule attached to this Note, less the amount of any redemptions pursuant to Section I.D.
hereof, and any principal repayment; and (ii) on or after the Conversion Date, the principal
amount (if any) stated for each Principal Due Date in Schedule P &I attached hereto, less the
amount of any principal repayment and any Optional Redemptions made pursuant to Section III
hereof and the Trust Agreement.
6
B. Timely Payment to Fiscal Agent or Trustee
Notwithstanding anything contained in Section I, Section II, or Section III, the Borrower,
in accordance with the Contract, shall be required to make all payments of interest and principal,
including any Optional Redemption payment, directly to the Fiscal Agent or the Trustee (as
applicable) on the seventh Business Day prior to the appropriate Interim Payment Date, Interest
Due Date, Principal Due Date, Prepayment Date, or date of Optional Redemption, as applicable.
C. Interest on Late Payments
If a payment of principal or interest herein provided for shall not be made by either (i)
2:30 p.m. on an Interest Due Date or Principal Due Date; or (ii) 2:30 p.m. on the second Business
Day (as herein defined) next succeeding an Interim Payment Date, then interest shall accrue on
the amount of such payment at the then applicable interest rate or rates payable on this Note,
from the relevant due date, as the case may be, until the date such payment is made. Nothing in
the immediately preceding sentence shall be construed as permitting or implying that the
Borrower may, without the written consent of the Holder and the Secretary, modify, extend, alter
or affect in any manner whatsoever the right of the Holder timely to receive any and all
payments of principal and interest specified in this Note.
D. Applicability of Fiscal Agency Agreement or Trust Agreement
Prior to the Conversion Date, this Note and Advances and payments made hereunder
shall be administered pursuant to the terms of the Fiscal Agency Agreement and are subject to
such agreement. On or after the Conversion Date, this Note and Advances and payments made
hereunder shall be administered pursuant to the Trust Agreement and are subject to such
agreement. The terms and provisions of the Fiscal Agency Agreement or the Trust Agreement,
insofar as they affect the rights, duties and obligations of the Holder and/or the Borrower, are
hereby incorporated herein and form a part of this Note. The Borrower hereby agrees to be
bound by all obligations of the Borrower to the Fiscal Agent set forth in the Fiscal Agency
Agreement. Capitalized terms not defined in this Note shall have the meanings ascribed to them
in the Fiscal Agency Agreement or Trust Agreement, as applicable. The Fiscal Agency
Agreement provides for the Fiscal Agent to perform certain duties, including the duties of (i)
paying agent and calculation agent for this Note until its Conversion Date, and (ii) registrar for
this Note until this Note is canceled or a new registrar appointed, each in accordance with the
Fiscal Agency Agreement. The Trust Agreement provides for the Trustee to perform certain
duties, including the duties of collection agent for this Note after its Conversion Date until a
new Trustee is appointed in accordance with the Trust Agreement. This Note may be
surrendered to the Fiscal Agent for registration of transfer or exchange, as provided in the Fiscal
Agency Agreement. The Fiscal Agent and Trustee each shall permit reasonable inspection to be
made of a copy of the Fiscal Agency Agreement or Trust Agreement kept on file at its
respective corporate trust office. Neither the Fiscal Agency Agreement nor the Trust Agreement
shall change the Borrower's payment obligations under this Note.
7
E. Applicability of Contract and Secretary's Guarantee
This Note evidences indebtedness incurred pursuant to and in accordance with the
Contract and pursuant to Section 108 of Title I of the Housing and Community Development Act
of 1974, as amended (42 U.S.C. § 5308) (the "HCD Act "). This Note is subject to the terms and
provisions of the Contract, to which Contract reference is hereby made for a statement of said
terms and provisions and for a description of the collateral security for this Note. The payment of
principal on the applicable Principal Due Dates and interest on the applicable Interim Payment
Dates or Interest Due Dates under this Note is unconditionally guaranteed by the Secretary to the
Holder through a guarantee (the "Guarantee "). Execution of the Secretary's Guarantee is required
before this Note is effective, and such Guarantee shall be issued pursuant to and in accordance
with the terms of the Contract and Section 108 of the HCD Act.
F. Default
A default under this Note shall occur upon failure by the Borrower to pay principal or
interest on this Note when due hereunder. If a Borrower defaults on the payment of any interest
or Principal Amounts when due, or if the Secretary gives notice of a final decision to declare the
Borrower in default pursuant to the following paragraph of this Section IV.F, the Secretary may,
but is not obligated to, make on any date on or prior to the Conversion Date with fourteen
calendar days prior notice to the Fiscal Agent, or on the seventh Business Day preceding any
Interest Due Date on or after the first permissible Optional Redemption date with seven Business
Days prior notice to the Trustee, an acceleration payment to the Fiscal Agent or the Trustee, as
applicable, equal to the unpaid Aggregate Principal Amount of the Note, together with accrued
and unpaid interest thereon to such acceleration payment date or Interest Due Date, as applicable.
In the event that any such acceleration payment is made from sources other than funds pledged
by the Borrower as security under the Contract (or other Borrower funds), the amounts paid on
behalf of the Borrower shall be deemed to be immediately due and payable to the Secretary.
Nothing in this paragraph shall be construed as permitting or implying that the Borrower may,
without the written consent of the Holder and the Secretary, modify, extend, alter or affect in any
manner whatsoever the right of the Holder timely to receive any and all payments of principal
and interest specified in this Note.
In addition, the Secretary may declare the Borrower in default under this Note if the
Secretary makes a final decision in accordance with the provisions of 24 C.F.R. § 570.913 (or
any successor regulation thereof), including requirements for reasonable notice and
opportunity for hearing, that the Borrower has failed to comply substantially with Title I of the
HCD Act. Following the giving of such reasonable notice, the Secretary may take the remedial
actions specified as available in the relevant provisions of the Contract pending the Secretary's
final decision.
8
G. Holder's Reliance on Guarantee
Following a default by the Borrower under the terms of this Note, the Holder agrees to
rely wholly and exclusively for repayment of this Note upon the Guarantee. The enforcement of
any instruments or agreements securing or otherwise related to this Note shall be the sole
responsibility of the Secretary, and the Holder shall not be responsible for the preparation,
contents or administration of such instruments and agreements, or for any actions taken in
connection with such instruments and agreement. The Holder, to the extent it is legally able to
do so, shall bind or cause to be bound its successors and assigns to all limitations imposed upon
the Holder by this Note.
H. Amendment
This Note may only be amended with the prior written consent of the Secretary and the
Borrower. No such amendment shall reduce, without the prior written consent of the Holder of
this Note, in any manner the amount of, or delay the timing of, payments required to be received
on this Note by the Holder, Fiscal Agent or Trustee, including Guarantee Payments; provided
that prior to the Conversion Date, the Commitment Amounts on the Conunitment Schedule
attached hereto, and the Principal Amounts due on the corresponding Principal Due Dates may
be rescheduled pursuant to written instructions given to the Fiscal Agent by the Secretary with
the written agreement of the Borrower and the Secretary absent the consent of the Holder.
I. Waivers
The Borrower hereby waives any requirement for presentment, protest or other demand
or notice with respect to this Note. The Borrower hereby waives notice of default and
opportunity for hearing for any failure to make a payment when due.
J. Delivery and Effective Date
This Note is deemed issued, executed, and delivered on behalf of the Borrower by its
authorized official as an obligation guaranteed by the Secretary pursuant to Section 108 of
the HCD Act, effective as of the date of the Secretary's Guarantee.
V. Borrower- Specific Provisions
[This space intentionally left blank]
9
THE UNDERSIGNED, as an authorized official of the Borrower, has executed and
delivered this Note.
Jim Ferrell
(Name)
Mayor
(Title)
10
ASSIGNMENT AND TRANSFER
For value received, the undersigned assigns and transfers this Note to
(Name and Address of Assignee)
(Social Security or Other Identifying Number of Assignee)
and irrevocably appoints
attorney -in -fact to transfer it on the books kept for registration of the Note, with full power of
substitution.
Dated:
Note: The signature to this assignment must
correspond with the name as written on the
face of the Note without alteration or
enlargement or other change.
Signature Guaranteed:
Qualified Financial Institution
By
Authorized Signature
[This page to be completed by the Fiscal Agent for transfer of the Note by the Holder as of the
Conversion Date pursuant to the last paragraph of Section I.A. of this Note.]
11
APPENDIX A
Special Interest Rates.
(a) The Holder and the Secretary contemplate that the majority of the outstanding
Variable/Fixed Rate Notes will be purchased by underwriters selected by the
Secretary for sale in public offerings to occur each year. If a public offering
including this Note has not occurred by each March 1 following the initial Advance
under this Note, the Secretary shall, upon request, advise the Holder as to when a
public offering including this Note is expected to occur, and the Holder and the
Secretary agree to consult with each other as to what the interest rate on this Note
will be after May 1 of that year if a public offering has not occurred by such May 1.
The Holder shall notify the Secretary if such consultation has not occurred by April
1 of that year. If no public offering including this Note has occurred on or before
such May 1, the applicable interest rate on this Note from such May 1 shall be the
rate (if any) negotiated and agreed upon by the Secretary and the Holder. Such rate
may be the Standard Note Rate or some other rate agreed upon by the Holder and
the Secretary at least two Business Days before such May 1 (such other rate, the
"Negotiated Special Interest Rate "). The Secretary shall notify the Fiscal Agent and
the Holder in writing of any Negotiated Special Interest Rate within two Business
Days of the determination thereof.
(b)
If the Secretary and the Holder do not, by the April 15th preceding such May 1,
negotiate and agree under Section (a) of this Appendix on an interest rate
applicable to this Note, then the Holder may, on or before the April 20th
preceding such May 1, give written notice to the Secretary of its intent to change
the interest rate on this Note and, if such notice was given during such period, the
Holder may, on such May 1, unilaterally determine (subject to the terms of this
paragraph) the interest rate that this Note will bear (such rate, the "Holder
Determined Interest Rate ") from and including such May 1 to but excluding the
earliest of: (i) the Conversion Date; (ii) the date that this Note is purchased by a
new Holder (as described in Section (c) below) or (iii) a Monthly Special Reset
Date (as defined below). Interest from and including such May 1 to but excluding
the Public Offering Date shall be paid on the unpaidprincipal balance of all
outstanding Advances under this Note at the rate(s) to be determined by the
Holder which, based upon then prevailing market conditions and taking into
account all the circumstances, will enable the Holder to sell this Note at one
hundred percent (100 %) of the aggregate amount of all Advances hereunder prior
to the date of such sale. Such interest rate shall be determined as of such May 1
and shall be determined again on the foregoing basis on the first of each month
thereafter (the first of each month after such May 1, a "Monthly Special Reset
Date "). The Holder shall notify the Fiscal Agent and the Secretary in writing
(c)
within two Business Days following such dates of the determination of the Holder
Determined Interest Rate and each applicable interest rate determined on
a Monthly Special Reset Date.
If the Secretary and the Holder have failed to agree upon an interest rate pursuant
to Section (a) of this Appendix A, the Secretary, upon seven calendar days notice
to the Holder, may arrange for the purchase of this Note in full by another entity
on the following May 1 or any Business Day thereafter. If such a purchase occurs,
the Holder shall sell and assign this Note to the purchaser thereof without
recourse to the Holder and deliver this Note and its Guarantee to the Fiscal Agent
for registration in the name of the purchaser thereof in accordance with the
Secretary's written instructions. The purchase price for this Note shall be 100% of
the aggregate amount of all Advances owing hereunder plus accrued interest to
the date of purchase. Payment to the Holder of the purchase price for this Note
shall be made by the purchaser thereof in Federal funds at the offices of the
Holder, or at such other place as shall be agreed upon by the Holder and the
Secretary, at 10:00 a.m., New York time, on the date of purchase. After such
purchase date this Note shall bear a rate of interest negotiated between the
Secretary and the new interim Holder (the "New Purchaser Special Interest
Rate "). The Secretary shall notify the Fiscal Agent and the new purchaser in
writing of any New Purchaser Special Interest Rate within two Business Days
following the date of determination thereof.
(d) Notwithstanding Sections (a) through (c) (inclusive) of this Appendix, no
Borrower is obligated to pay interest at a variable rate exceeding the maximum
rate permitted by generally applicable law of the Borrower's state (such rate, the
"Maximum Rate "). If the Borrower receives notice of a variable interest payment
that exceeds the Maximum Rate, then the Borrower shall timely pay such amount
as does not exceed the Maximum Rate, and concurrently shall notify the Secretary
and the Fiscal Agent of the reason for any interest non - payment.
2
COMMITMENT SCHEDULE
Note No. B- 13 -MC -53 -0015
incipal Du c Date Commitment Amount.
August 1, 2016
August 1, 2017
August 1, 2018
August 1, 2019
August 1, 2020
August 1, 2021
August 1, 2022
August 1, 2023
August 1, 2024
August 1, 2025
August 1, 2026
August 1, 2027
August 1, 2028
August 1, 2029
August 1, 2030
August 1, 2031
August 1, 2032
August 1, 2033
August 1, 2034
August 1, 2035
0
159,000
159,000
159,000
159,000
159,000
159,000
159,000
159,000
159,000
159,000
160,000
160,000
160,000
160,000
160,000
160,000
160,000
160,000
160,000
Maximum Commitment Amount = $3,030,000
SCHEDULE P &I*
Note No. B- 13 -MC -53 -0015
Principal Amount Principal Interest Rate ** Optional Redemption Available
Due Date
YES NO
August 1, 2016 X
August 1, 2017 X
August 1, 2018 X
August 1, 2019 X
August 1, 2020 X
August 1, 2021 X
August 1, 2022 X
August 1, 2023 X
August 1, 2024 X
August 1, 2025 X
August 1, 2026 X
August 1, 2027 X
August 1, 2028 X
August 1, 2029 X
August 1, 2030 X
August 1, 2031 X
August 1, 2032 X
August 1, 2033 X
August 1, 2034 X
August 1, 2035 X
= Aggregate Principal Amount
Principal Amounts due on or after August 1, 2026, may be redeemed, subject to the terms
contained herein and in the Trust Agreement, on any Interest Due Date on or after
August 1, 2025.
*This schedule will not be completed when initially executed and delivered by the
Borrower for Guarantee for interim, variable -rate financing. It will be completed when
assigned by the Holder at the request of the Borrower for conversion to Fixed Rates on
the Conversion Date. The first date shown above on which Optional Redemption is
available is expected to be the same when this schedule is completed, if the Borrower
participates in the initial Section 108 public offering after receiving an interim financing
Advance hereunder. If the Borrower participates in a later public offering, the first date
on which Optional Redemption is available is expected to be correspondingly later. **
The fixed rate applicable to each Principal Amount shall be listed by the Secretary.
�► Federal Way
June 28, 2016
Secretary of Housing and Urban Development
451 7th Street, SW
Washington, DC 20410
City Attorney's Office
33325 8th Ave S • Federal Way, WA 98003
253 - 835 -2562 • www.cityoffederalway.com
Jim Ferrell, Mayor
RE: Required Legal Opinion for Section 108- Guaranteed Loan
Dear Sir or Madam:
The undersigned, being duly licensed and in good standing to practice law in the State of
Washington is legal counsel to the City of Federal Way ( "Borrower "). As such, I have
represented Borrower regarding that certain Variable/Fixed Rate Note, referred to as Note No. B-
13 -MC -53 -0015 in the Maximum Commitment Amount of $3,030,000 (the "Note "), to be
guaranteed by the Secretary of Housing and Urban Development ( "HUD ") under section 108 of
the Housing and Community Development Act of 1974, as amended, 42 U.S.C. 5308 ( "Section
108 "). HUD's guarantee of the Note will be governed by the Contract for Loan Guarantee
Assistance under Section 108 executed by the Borrower on June 28, 2016 between the Borrower
and HUD (the "Contract "), in which the Borrower pledges Community Development Block
Grants pursuant to 24 CFR 570.705(b)(2) and the full faith and credit of the City as security for
the Note.
In my capacity as legal counsel, I have made an examination and investigation of all such
matters of fact and questions of law as I consider necessary or advisable to enable me to render
the opinion hereafter set forth. Specifically, and without limiting the generality of the foregoing,
I have examined:
1. Resolution No. 15 -691 of the governing body of Borrower, dated June 16, 2015,
authorizing Borrower to enter into this transaction, and authorizing the Mayor of the City of
Federal Way to execute on behalf of Borrower all documents necessary or desirable to
accomplish the transaction;
2. Resolution 16 -704 of the governing body of the Borrower, dated May 3, 2016,
irrevocably pledging the full faith and credit of the Borrower as security for the prompt payment
of the principal and interest on the Note; and
3. The Contract; and
4. The Note.
Secretary of Housing and Urban Development
June 28, 2016
Page 2 of 3
Based on the foregoing investigation and authorities, I am of the opinion that:
1. Borrower has authorized in accordance with applicable State and local law, the
transaction, including issuance of the Note, the pledge of grant funds, and the execution of all
documents necessary or desirable to accomplish the transaction.
2. Borrower has authorized Jim Ferrell in his capacity the Mayor of the City of Federal
Way to execute the Contract, the Note and all other documents necessary or desirable to
accomplish the transaction.
3. The Note and the Contract have been duly executed by the aforementioned authorized
representative of the Borrower, and upon delivery thereof, due execution of the Contract and the
Guarantee on behalf of HUD, and receipt of the loan proceeds on behalf of the Borrower, the
Note and the Contract shall be valid, binding and enforceable obligations of the Borrower.
4. The pledge of present and future Community Development Block Grants by the
Borrower pursuant to 24 CFR 570.705(b)(2) and the Contract is valid and binding.
5. There is no outstanding, or to my knowledge threatened, action, suit, proceeding,
investigation or litigation by or against the Borrower which will affect the validity of the Note or
the security therefor.
6. If the Borrower is unable to make payments for obligations under the Contract
and Note from present and future Community Development Block Grants pledged by Borrower
pursuant to 24 CFR 570.705(b)(2) because such Grants are not available to Borrower on the
dates and in amounts sufficient to meet Borrower's obligations therein, the Borrower shall make
such payments from any legally available funds of the Borrower. The obligation of Borrower to
advance funds to meet Borrower's obligations under the Contract and Note, in the amounts, at
the times and in the manner described therein is a general obligation of the Borrower, absolute
and unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or
otherwise.
7. The full faith and credit pledge of Borrower contained in Resolution 16 -704 is a
valid, legally binding and enforceable obligation of Borrower, pledged irrevocably for the
payment of principal and interest as called for in the Contract and Note. The laws of the State of
Washington permit this pledge without a vote of the electorate. The Borrower is authorized by
Article 8, Section 6 of the Washington State Constitution and Chapter 39.36 of the Revised Code
of Washington ( "RCW ") to incur indebtedness, with limitations as set forth in RCW 39.36.020.
Pursuant to RCW 39.36.020(2)(a)(ii), the Borrower is authorized to incur up to 1.5% of assessed
value of taxable properties within the City of Federal Way without a vote of the electorate. The
Borrower is authorized to generate revenue through property tax by Chapter 84.52 RCW, which
is available to the Borrower to fulfill its pledge in the event that grants pledged pursuant to 24
CFR 570.705(b)(2) are unavailable. Pursuant to the authorities cited above, a pledge of the
Borrower's full faith and credit is payable from all legally available funds of the Borrower.
City of Federal Way, City Attorney's Office 133325 Eighth Ave 51 Federal Way, WA 980031253 835 -2562
Secretary of Housing and Urban Development
June 28, 2016
Page 3 of 3
All sources of payment and revenue together will be sufficient to pay such principal and interest
under the Contract and Note as the same shall become due.
Sincerely,
le912A1
Amy J "r arsail
City A omey
City of Federal Way
City of Federal Way, City Attorney's Office 1 33325 Eighth Ave 5 I Federal Way, WA 980031253 835 -2562
Attachment 2
RESOLUTION NO. #15 -691
A RESOLUTION of the City Council of the City of Federal Way,
Washington, approving a Section 108 Loan Application in support of
development of the Performing Arts and Events Center and authorizing
its submission to the U.S. Department of Housing and Community
Development, and authorizing the Mayor to execute all documents
associated with the application and loan.
WHEREAS, the City Council, via Resolution 14 -665, unanimously voted to approve
development of the Performing Arts and Events Center in downtown Federal Way; and
WHEREAS, estimates that construction of the facility will create direct spending of $59
million in the downtown and create more than 300 family wage, union jobs; and
WHEREAS, ongoing operation of the facility will generate each year approximately $5.6
million in direct spending and 49 new jobs; and
WHEREAS, construction and operation of the Performing Arts and Events Center is
expected to spur additional business investment in Federal Way's downtown, thus creating additional
jobs for Federal Way residents; and
WHEREAS, the City of Federal Way has estimated development costs for the Performing
Arts and Events Center to be $32.75 million; and
WHEREAS, the City of Federal Way is seeking to complete project funding through a variety
of sources including state and federal funding, private and public grants, a local capital campaign,
selling of naming rights and New Market Tax Credits; and
WHEREAS, the City of Federal Way applied for the establishment of a Section 108
Guaranteed Loan Fund from the U.S. Department of Housing and Community Development, and
received approval for the Loan Fund on May 15, 2014; and
Resolution No. 15 -691 Page 1 of 3
WHEREAS, this Section 108 Loan Application is the first application under the Guaranteed
Loan Fund and is seeking a loan in the amount of $3,030,000.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
RESOLVES AS FOLLOWS:
Section 1. The Section 108 Loan Application in support of development of the Federal Way
Performing Arts and Events Center is approved, and its submission to the U.S. Department of
Housing and Community Development authorized. Furthermore, the Mayor is authorized to execute
all documents associated with the Application and Loan.
Section 2. Severability. If any section, sentence, clause or phrase of this resolution should be
held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or
unconstitutionality shall not affect the validity or constitutionality of any other section, sentence,
clause or phrase of this resolution.
Section 3. Corrections. The City Clerk and the codifiers of this resolution are authorized to
make necessary corrections to this resolution including, but not limited to, the correction of
scrivener /clerical errors, references, resolution numbering, section/subsection numbers and any
references thereto.
Section 4. Ratification. Any act consistent with the authority and prior to the effective date
of this resolution is hereby ratified and affirmed.
Section 5. Effective Date. This resolution shall be effective immediately upon passage by
the Federal Way City Council.
Resolution No. 15 -691 Page 2 of 3
RESOLVED BY THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
WASHINGTON this 16th day of June, 2015.
ATTEST:
CITY OF FEDERAL WAY
ERK, STEPHANIE CO EY, CMC
APPROVED AS TO FORM:
od 4477-
Q ✓CITY ATTORNEY, AMY JO PEARSALL
FILED WITH THE CITY CLERK: 06/12/2015
PASSED BY THE CITY COUNCIL: 06/16/2015
RESOLUTION NO.: #15 -691
Resolution No. 15 -691 Page 3 of 3
Attachment 3
RESOLUTION NO. 16 -704
A RESOLUTION of the City Council of the City of Federal Way,
Washington, pledging the City's full faith and credit in support of its
Section 108 Loan for the development of the Performing Arts and Events
Center.
WHEREAS, the City Council, via Resolution 14 -665, unanimously voted to approve
development of the Performing Arts and Events Center in downtown Federal Way; and
WHEREAS, the City of Federal Way has compiled project funding through a variety of
sources including state and federal funding, private and public grants, a local capital campaign, and
the selling of naming rights; and
WHEREAS, the City of Federal Way applied for the establishment of a Section 108
Guaranteed Loan Fund from the U.S. Department of Housing and Community Development (HUD),
and received approval for the Loan Fund on May 15, 2014; and
WHEREAS, the City Council, via Resolution 15 -691, approved a Section 108 Loan
Application in support of development of the Performing Arts and Events Center and authorized its
submission to HUD, and authorized the Mayor to execute all documents associated with the
application and loan; and
WHEREAS, pursuant to Resolution 15 -691, the City of Federal Way applied for loan
guarantee assistance from HUD under Section 108 of the Housing and Community Development Act
of 1974, as amended; and
WHEREAS, a Section 108 Loan in the amount of $3,030,000, to be guaranteed by HUD and
evidenced by a Variable/Fixed Rate Note numbered B- 13 -MC -53 -0015 (the Note), will be made
available to the City of Federal Way and governed by the terms of a Contract for Loan Guarantee
Resolution No. 16 -704 Page 1 of 3
Assistance under Section 108 of the Housing and Community Development Act of 1974, as amended
(the Contract) between the City of Federal Way and HUD; and
WHEREAS, HUD and the Contract require a Resolution of the City Council to pledge its full
faith and credit as security in support of all of the obligations of the City of Federal Way under the
Note and Contract;
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
RESOLVES AS FOLLOWS:
Section 1. The City Council hereby pledges the full faith and credit of the City of Federal
Way for the prompt payment of the principal and interest of its Section 108 Loan for the
development of the Federal Way Performing Arts and Events Center, as evidenced by the Note. The
Note constitutes a general indebtedness of the City of Federal Way, payable from tax revenues of the
City of Federal Way and such other money as is lawfully available. For as long as the Note is
outstanding, the City of Federal Way irrevocably pledges that it shall, in the manner provided by law
within the constitutional and statutory limitations provided by law without the assent of the voters,
include in its annual property tax levy amounts sufficient, together with other money that is lawfully
available, to pay principal of an interest on the Note as the same become due. The full faith and
credit of the City of Federal Way is pledged irrevocably for the prompt payment of the principal and
interest on the Note and such pledge shall be enforceable in mandamus against the City of Federal
Way.
Section 2. Severability. If any section, sentence, clause or phrase of this resolution should be
held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or
unconstitutionality shall not affect the validity or constitutionality of any other section, sentence,
Resolution No. 16 -704 Page 2 of 3
clause or phrase of this resolution.
Section 3. Corrections. The City Clerk and the codifiers of this resolution are authorized to
make necessary corrections to this resolution including, but not limited to, the correction of
scrivener /clerical errors, references, resolution numbering, section/subsection numbers and any
references thereto.
Section 4. Ratification. Any act consistent with the authority and prior to the effective date
of this resolution is hereby ratified and affirmed.
Section 5. Effective Date. This resolution shall be effective immediately upon passage by
the Federal Way City Council.
RESOLVED BY THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
WASHINGTON this 3`d day of May 2016.
Al LEST:
CI
PERr( CK, STEPHANIE C
CITY DE • L WAY
MAYQR, FERRELL
EY, CMC
VED AS T
RM:
CITY A
EY, AMY JO PEARSALL
FILED WITH THE CITY CLERK: 04 /27/2016
PASSED BY THE CITY COUNCIL: 05/03/2016
RESOLUTION NO.: 16 -704
Resolution No. 16 -704
Page 3 of 3