HomeMy WebLinkAbout12-16 - Res. Authorizing the Acquisition of Real PropertyResolution No. Z - 1 -b
Authorization for the acquisition of real property and execution of a financing
contract, site lease and related documentation relating to the acquisition of
Mason County Public Works Facility
WHEREAS, Mason County (the "Local Agency") has executed a Notice of Intent to the Office of State
Treasurer, in the form attached hereto as Annex 1 (the "NOI"), in relation to the acquisition of and the financing of
the acquisition, improvement and betterment (collectively, the "acquisition") of the Property, as defined below,
under the provisions of RCW ch 39.94; and
WHEREAS, it is deemed necessary and advisable by the Commission of the Local Agency that the Local
Agency acquire the real property identified on Annex 1 attached hereto ("Property"), and
WHEREAS, it 1s deemed necessary and advisable by the Commission of the Local Agency that the Local
Agency enter into a Local Agency Site Lease with the Washington Finance Officers Association in the form
attached hereto as Annex 2 to facilitate the financing of the Property;
WHEREAS, it is deemed necessary and advisable by the Commission of the Local Agency that the Local
Agency enter into a Local Agency Financing Lease with the Office of the State Treasurer, in the form attached
hereto as Annex 3 (the "Local Agency Financing Lease"), in an amount not to exceed $10,675,000 plus related
financing costs in order to acquire the Property, and finance the acquisition of the Property;
WHEREAS, the Local Agency will undertake to acquire and/or improve the Property on behalf of and as
agent of the Washington Finance Officers Association (the "Corporation") pursuant to the terms of the Local
Agency Financing Lease, and in accordance with all applicable purchasing statutes and regulations applicable to the
Local Agency; and
WHEREAS, the Local Agency desires to appoint the individuals set forth in Annex 4 as the representatives
of the Local Agency in connection with the acquisition of the Property and execution of the Local Agency Financing
Lease (each an "Authorized Agency Representative");
NOW, THEREFORE, BE IT RESOLVED, by the Commissioners of Mason County as follows:
Section 1. The individuals holding the offices or positions set forth in Annex 4 are each hereby appointed
as a representative of the Local Agency in connection with the acquisition of the Property and execution of the Local
Agency Financing Lease and all other related documents A minimum of two Authorized Agency Representatives
shall be required to execute any one document in order for it to be considered duly executed on behalf of the Local
Agency.
Section 2. The form of the Local Agency Site Lease attached hereto as Annex 2 is hereby approved and the
Authorized Agency Repiesentatives are hereby authorized and directed to execute and deliver the Local Agency Site
Lease, in substantially the form attached hereto with such changes as may be approved by the Authorized
Representatives, to facilitate the acquisition and/or improvement of the Property and financing of the acquisition of
the property.
Section 3 The form of the Local Agency Financing Lease attached hereto as Annex 3 is hereby approved
and the Authorized Agency Representatives are hereby authorized and directed to execute and deliver the Local
Agency Financing Lease, in an amount not to exceed $10,675,000 plus related fmancing costs, and in substantially
the form attached hereto with such changes as may be approved by the Authorized Representatives, for the
acquisition of the property and financing of the acquisition of the Property.
Section 4. The Local Agency hereby authorizes the acquisition of the property as agent of the Corporation
in accordance with the terms and provisions of the Local Agency Financing Lease
Section 5. The Authonzed Representatives are hereby authorized to execute and deliver to the Office of
State Treasurer all other documents, agreements and certificates, and to take all othei action, which they deem
necessary or appropriate in connection with the financing of the property, including but not limited to, any
amendment to the NOI, any tax certificate and any agreements relating to initial and ongoing disclosure in
connection with the offering of securities related to the financing
Section 6. This resolution shall become effective immediately upon its adoption
1
- It,
Resolution No. r
ADOPTED by the Mason County Commissioners at a regular meeting thereof held this 16th day of February, 2016.
ATTEST:
4/ L( (114114r\
Julia Almanzor, Clerk of the BodrdF__,r,d
APPROVED AS TO FORM:
Tim Whiteheas , Chief DPA
BOARD OF COUNTY COMMISSIONERS
MASON COUNTY, WASHINGTON
Terri Jeffreys,
Tim Sheldon, Commissioner
•
Rand Neatherlin, Commissioner
Certificate of Authorizing Resolution
I, the undersigned, Clerk of the Board for the Board of Mason County Commissioners (the "Local
Agency"), DO HEREBY CERTIFY:
1. That the attached Resolution No. 12-1 bherein called the "Resolution") is a true and correct copy of a
Resolution of the Local Agency ado ted/passed at a regular meeting of thef' ft held on the 16�' day of February,
g Y p
2016, and duly recorded in my office;
2. That said meeting was duly convened and held in all respects in accordance with law; and to the
extent required by law, due and proper notice of such meeting was given; that a quorum of the Commission was
present throughout the meeting and a legally sufficient number of members of the Commission voted in the proper
manner for the adoption of the Resolution;
3. That all other requirements and proceedings incident to the proper adoption/passage of the Resolution
have been duly fulfilled, carried out and otherwise observed;
4. That the Resolution remains in full force and effect and has not been amended, repealed or
superseded; and
5. That I am authorized to execute this certificate.
IN WITNESS WHEREOF, I have hereunto set my hand as of this 16th day of February, 2016.
[SEAL]
Julie Almanzor, Clerk of the Bo
Notice of Intent
State of Washington LOCAL(Local Option Capital Asset Lending)
Annex 1
Local Government Information
County: Mason County
Legal Name: _Mason County
Contact Person: _Frank Pinter
Address: 411 N. 5tl' St. Shelton WA
Phone: 360-427-9670
Fax:
Would you prefer to receive financing documents (check one):
by e-mail E Hard copy by U.S. mail
MCAG No.: 0144
Title: _Budget Manager_
Zip: _98584_
E-mail: _fpinter@co.mason.wa.us
Property (Real Estate or Equipment)
Property description (include quantity, if applicable): Mason County Public Works Facility 100 Public Works
Drive Shelton, WA 98584
Total cost: $14,282,154 Maximum amount to finance: $ 10,675,000_
Finance term: _Balance of COP 0144-1-1 Lease_ Useful life: _35 Years_ Desired financing date: _March 2016_
Purpose of property (Please be specific and include dept. of use): _Public Works Administration and Operations_
If real estate, the Real Estate Worksheet: L] Is attached NI Will be provided by (date) _
If equipment, will the property purchase price be paid with: u program proceeds or Li general funds to be reimbursed
from program proceeds? If general funds are to be used, include a copy of the local agency's reimbursement resolution with
the financing documents. This is a refinance.
Security Pledge
❑ Voted general obligation of local government.. /1 Non -voted general obligation of local government
Other Information
Approximate population: _ _ (not required for cities and counties).
If any of the following apply, please provide a complete discussion on a separate page:
Yes /1 No Does the local government use registered warrants, interfund loans or other cash flow borrowing?
Yes ►1 No Is the local government a party to significant litigation?
Yes ►1 No Is this a reimbursement? If yes, date funds spent
We are not required to submit the Credit Form because
Has local government received a bond rating in the last two years? /1 Yes No Bond rating(s): _AA-_
(attach rating agency letter)
By executing this Notice of Intent, the local agency acknowledges, agrees to and accepts its designation and appointment as the agent of
the nominal lessor in connection with the acquisition of the project. By executing this Notice of Intent, the local agency further
acknowledges and agrees that certificate counsel and any other special counsel to the state in connection with the authorization, issuance
and delivery of the certificates and the related financing documents shall not be acting, and shall not be deemed to act, as counsel to the
local agency, nor shall any attorney -client relationship exist or be deemed to exist between such counsel and any participating local agency
in connection with such matters.
Submitted by: Mast ounty, F nk, ter Title: _Budget Manager_
Signature: Date: 2/16/2016
•
1
Annex 2
LOCAL AGENCY SITE LEASE, SERIES 2016A
THIS LOCAL AGENCY SITE LEASE, SERIES 2016A (the "Site Lease"), dated as of
March 31, 2016 (the "Dated Date") is entered into by and between Mason County, Washington,
a municipal corporation duly organized and existing under and by virtue of the laws of the .state
of Washington (the "Local Agency"), and the Washington Finance Officers Association, a
nonprofit coiporation duly organized and existing under and by virtue of the laws of the state of
Washington (the ` Corporation").
RECITALS:
WHEREAS, the state of Washington (the "State"), acting by and through the State
Treasurer (the "State Treasurer") is authorized to enter into financing contracts, including but not
limited to financing leases, for and on behalf of certain local government agencies (as provided
therein, "Local Agencies") and state agencies (as defined therein, "State Agencies") for the use
and acquisition of real and personal property pursuant to Chapter 356, Laws of Washington,
1989, codified as Chapter 39.94 of the Revised Code of Washington, as supplemented and
amended, (the "Act"), including but not limited to by Chapter 291, Laws of Washington, 1998
and
WHEREAS, the State Treasurer has established a consolidated program providing for the
execution and delivery of certificates of participation in such financing contracts, or in master
financing contracts with respect thereto, in series from time to time in order to provide financing
or refinancing for the costs of acquisition and/or improvement of such real and personal property
by Local Agencies and State Agencies; and
WHEREAS, the Corporation and the Local Agency have determined that it is necessary
and desirable to enter into this Site Lease to provide retina icing for the acquisition or
improvement (the "Protect') of certain real property described in Exhibit A hereto (the 'Site"),
by the Local Agency; and
WHEREAS, the Local Agency is duly authorized to enter into this Site Lease pursuant to
the laws of the State and a duly adopted resolution or ordinance of its legislative body; and
WHEREAS, simultaneously with the execution and delivery hereof, the State is entering
into a Master Financing Lease, Series 2016A, dated as of the Dated Date (the "Master Financing
Lease' ), with the Corporation, which shall constitute a "financing lease," a ' financing contract"
and a 'master financing contract" within the meaning of the Act, to provide financing for the
costs of acquisition or improvement of certain parcels of real property for and on behalf of
certain State Agencies and Local Agencies, including the Local Agency, under the terms set
forth therein; and
WHEREAS, under and pursuant to the Master Financing Lease the State Treasurer is
obligated to make Base Rent Payments (as defined in Appendix I hereto) to the Corporation for
the lease of the parcels of real property described in Exhibit B thereto; and
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51498342.1 LOCAL SITE LEASE
WHEREAS, simultaneously with the execution and delivery of the Master Financing
Lease, the State shall sublease the Site and the Project (collectively, the "Property") to the Local
Agency pursuant to a Local Agency Financing; Lease, Series 2016A (the "Local Agency
Financing Lease' ), dated as of the Dated. Date; and
WHEREAS, the Corporation intends to grant, sell, assign, transfer and convey without
recourse to the Fiscal Agent all of its rights to receive the Base Rent Payments scheduled to be
made by the State Treasurer under and pursuant to the Master Financing Lease, together with all
of its remaining right, title and interest in, to and under this Site Lease, the Master Financing
Lease and the Property by means of a Master Assignment, Series 2016A (the "Master
Assignment' ), dated as of the Dated Date; and
WHEREAS, in consideration of such assignment and pursuant to the Trust Agreement,
Series 2016A (the "Trust Agreement"), dated as of the Dated Date, by and among the Fiscal
Agent, the State and the Corporation, the Fiscal Agent has agreed to execute and deliver the
State of Washington Certificates of Participation, Series 2016A (State and Local Agency Real
and Personal Property), in an aggregate piincipal amount of S . (the ` Certificates")
and
WHEREAS; a portion of the proceeds of the sale of the Certificates shall. be used to
Finance or refinance the costs of the Project; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened
and to have been performed precedent to and in connection with the execution and delivery of
this Site Lease do exist, have happened and have been performed in regular and due time, form
and manner as required by law, and the Parties hereto are now duly authorized to execute,
deliver and perform their respective obligations under this Site Lease;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other valuable consideration,• the Parties hereto do hereby agree as
follows:
Section 1. Definitions; Construction; Miscellaneous Provisions; Supplements.
Capitalized terms used but not otherwise defined in this Site Lease shall have the
respective meanings given such terms in Part 1 of Appendix I, which is incorporated herein and
made a part hereof by this reference. This Site Lease shall be construed in accordance with the
Rules of Construction set forth in Part 2 of Appendix I, which is incorporated herein and made a
part hereof by this reference. The miscellaneous provisions set forth in Part 3 of Appendix I are
incorporated herein and made a part hereof by this reference. '17 his Site Lease may be
supplemented and amended from time to time in accordance with Part 4 of Appendix 1, which is
incoi porated herein and made a part hei eof by this reference.
Section 2. Lease of the Site; Ownership.
(a) The Local Agency hereby leases to the Corporation and the Corporation
hereby hires from the Local Agency, on the terms and conditions hereinafter set forth, the real
-2-
5) 498342.1 LOCAL SITE LEASE
property and all improvements thereon situated in Mason County, state of Washington, and
described in Exhibit A attached hereto and made a part hereof (collectively, the "Site"), subject
to all easements, covenants, conditions and restrictions existing as of the date hereof.
(b) The Local Agency hereby represents and warrants that it is the owner in
fee of the Site, subject only to Permitted Encumbrances.
Section 3. Term.
The term of this Site Lease shall commence on the Dated Date, and shall end on
1, 20 �, unless such term is extended or sooner terminated as hereinafter provided. If
on such date, the Local Agency Financing Lease shall not be discharged by its terms, then the
term of this Site Lease shall be extended until ten (10) days after all amounts due under the I ocal
Agency Financing Lease shall have been paid and the Local Agency Financing Lease shall have
been discharged by its terns, except that the term of this Site Lease shall in no event be extended
beyond 1, 20 If prior to 1, 20^, all amounts due under the Local Agency
Financing Lease shall have been paid and the Local Agency Financing Lease shall have been
discharged by its terms, the term of this Site Lease shall end ten (10) days thereafter or ten (10)
days after written notice by the Local Agency to the Corporation, whichever is earlier.
Section 4. Rental.
The Corporation shall pay to State Treasurer, for the benefit of the Local Agency
pursuant to the Master Financing Lease and the Local Agency Financing Lease, as and for the
total rental due hereunder, the amount set forth in Exhibit B hereto (the "Prepaid Site Lease
Rent"), all of which prepaid rental shall be payable on the Closing Date. The Parties hereto
hereby agree that said amount represents fair consideration for the leasehold interest being
transferred hereunder, given the purposes, terms and provisions hereof. The Corporation shall
not be obligated to pay such rental other than from the proceeds of the Certificates. Anything
herein to the contrary notwithstanding, the Corporation hereby waives any right that it may have
under the laws of the State to a rebate or repayment of any portion of such rental in the event that
there is substantial interference with the use or right to possession by the Corporation of the Site
or any portion thereof as a result of material damage, destruction or condemnation.
Section 5. Purpose.
The Corporation shall use the Site solely for the purpose of leasing the Property to the
State pursuant to the Master Financing Lease and for such purposes as may be incidental thereto;
provided, that in the event of a default by the State under the Master Financing Lease or by the
Local Agency under the Local Agency Financing Lease, the Corporation may exercise the
remedies provided therein
Section 6. Assignments and Subleases.
(a) The Corporation shall not grant, sell, assign, mortgage, pledge, sublet or transfer
any of its right, title or interest in, to or under this Site Lease or the Site except as expressly
provided in the Master Assignment, the Master Financing Lease and the Local Agency
51448342.1 LOCAL SITE LEASE
Financing Lease, without the prior written. consent of the Local Agency. The Local Agency
hereby consents to the sublease of the Property pursuant to the Master Financing Lease, and the
assignment of the Corporation's right, title and interest hereunder to the Fiscal Agent pursuant to
the Master Assignment for the benefit of the Owners of the Certificates.
(b) Upon the occurrence and continuance of an Event of Default or Agency Event of
Default with respect to the Pioperty, the Corporation shall have the right, pursuant to the Master
Assignment, the Trust Agreement and the Master Financing Lease, to sublease all or any portion
of the Property; provided, that the subtenant and the terms and provisions of the sublease shall be
subject to the prior written approval of the Local Agency, which approval shall not be
unreasonably withheld or delayed.
Section 7. Right of Entry.
The Local Agency reserves the right for any of its duly authorized representatives to
enter upon the Site at any reasonable time (or in an emergency at any time) to inspect the same,
or to make any repairs, improvements or changes necessary for the preservation thereof.
Section 8. Termination.
The Corporation agrees, upon the termination or expiration of this Site Lease, to quit and
surrendei the Site in the same good order, condition and repair as the same was in at the time of
commencement of the term hereunder, except for acts of God, reasonable wear and tear, and any
actions by the Local Agency that affect the condition of the Site. The Corporation agrees that
any permanent improvements and structures existing upon the Site at the time of such
termination or expiration of this Site Lease shall remain thereon and title thereto shall vest in the
Local Agency. The Corporation shall thereafter execute acknowledge and deliver to the Local
Agency such instt uments of further assurance as in the reasonable opinion of the Local Agency
are necessary or desirable to confirm the Local Agency's right, title and interest in and to the
Site.
Section 9. Default.
In the event that the Corporation shall be in default in the performance of any obligation
on its part to be performed under the terms of this Site Lease, which default continues for sixty
(60) days following notice and demand for correction thereof to the Corporation, the Local
Agency may exercise any and all remedies granted by law, except that as described in
Section (k) of Part 3 of Appendix I hereto, no merger of this Site Lease shall be deemed to occur
as a result thereof; provided, however , that the Local Agency shall have no power to terminate
this Site Lease by reason of any default on the part of the Corporation; and provided further, that
so long as any Certificates are outstanding and unpaid in accordance with the terms of the Trust
Agreement and the Master Financing Lease, the Base Rent Payments or Additional Rent or any
part thereof payable to the Corporation shall continue to be paid to the Corpo ation. So long as
the Fiscal Agent shall duly perform the terms and conditions of this Site Lease, the Master
Assignment, the Master Financing Lease and of the Trust Agreement, the Fiscal Agent shall be
deemed to be and shall become the tenant of the Local Agency hereunder and shall be entitled to
4149S342,1 LOCAL SITE LI;.
all of the rights and privileges granted to the Corporation hereunder and under the Master
Assignment, the blaster Financing Lease and the Trust Agreement.
Section 10. waiver.
No delay or omission to exercise any right or remedy accruing upon a default hereunder
shall impair any such right or remedy or shall be construed to be a waiver of such default, but
any such right or remedy may be exercised from time to time and as often as may be deemed
necessary or expedient. In order to exercise any remedy reserved to the Local Agency
hereunder, it shall not be necessary to give any notice, other than such notice as may be required
hereunder. A waiver by the Local Agency of any default hereunder shall not constitute a waiver
of any subsequent default hereunder, and shall not affect or impair the rights or remedies of the
Local Agency in connection with any such subsequent default.
Section 11. Quiet Enjoyment.
The Corporation and its authorized assignees and sublessees at all times during the term
of this Site Lease, subject to the provisions of Section 9 hereof, shall peaceably and quietly have,
hold and enjoy all of the Site without suit, trouble or hindrance from the Local Agency.
Section 12. Taxes.
The Local Agency covenants and agrees to pay any and all Impositions of any kind or
character, including but not limited to possessory interest taxes, levied or assessed upon the
Property (including both land and improvements), or with respect to this Site Lease, the Local
Agency Financing Lease, or the lease of the Property pursuant to the Master Financing Lease;
provided, however, that the Local Agency shall not pay any possessory interest taxes levied as a
result of any assignment or sublease of or with respect to all or any part of the Property then in
effect between the Corporation and any assignee or subtenant of the Corporation (other than as
lessee under the Local Agency Financing Lease).
Section 13. Eminent Domain; Loss of Title.
In the event the whole or any part of the Property is taken permanently or temporarily
under the power of eminent domain (or sold under threat of condemnation), or there is a loss of
title to the whole or any part of the Property, the interest of the Corporation in the Property shall
be recognized and is hereby determined to be an amount not less than the then unpaid
indebtedness incurred by the Local Agency under its Local Agency Financing Lease. The term,
"unpaid indebtedness," a.s used in the preceding sentence, includes all unpaid. Agency Principal
Components, Agency Interest Components andall other payments required to be made by the
Local Agency pursuant to the Local Agency Financing Lease, until all Agency Rent Payments
due thereunder have been paid or the payment thereof provided for in accordance therewith. The
amount of any suchaward, judgment or payment shall be paid to the Corporation, and the
balance, if any, in excess of the unpaid indebtedness shall be paid to the Local Agency.
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51498342.1 LOCAL SITE LEASE
IN WITNESS WHEREOF, the Local Agency and the Corporation have caused this Site
Lease to be executed in their respective names by their respective duly authorized officers, all as
of the day and year first written above.
MASON COUNTY, as lessor
By
Authorized Agency Representative
WASHINGTON FINANCE OFFICERS
ASSOCIATION, as lessee
By
Authorized Corporation Representative
51498342.1 LOCAL SITE LEASE
STATE OF WASHINGTON
ss.
COUNTY OF MASON
I certify that I know or have satisfactory evidence that
the person who appeared before me, and said person acknowledged that [s]he signed this
instrument, on oath stated that [s]he was authorized to execute the instrument and acknowledged
it as of MASON COUNTY, WASHINGTON to be the free and
voluntary act of such party for the uses and purposes mentioned in the instrument.
Dated:
(Use this space for notanai stamp/seal)
is
Print Name
(Signature of Notary)
(Legibly Print or Stamp Name of Notary)
Notary public in and for the state of Washington, residing at
My commission expires
N-1
51498342.1 LOCAL SITE LEASE
STATE OF WASHINGTON
) ss.
COUNTY OF YAKIMA
I certify that I know or have satisfactory evidence that CARMEN A. HAYTER is the
person who appeared before me, and said person acknowledged that she signed this instrument,
on oath stated that she was authorized to execute the instrument and acknowledged it as the
President of the WASIIINCGTON FINANCE OFFICERS ASSOCIATION to be the free: and
voluntary act of such paity for the uses and purposes mentioned in the instrument.
Dated:
(Signatwe of Notary)
Print Name Constance D. Hauver
(Legibly Print or Sturm Name of Notary)
Notary public in and for the state of Washington, residing at
Moxee
My commission expires March 22, 2019
(Use this space for notarial stamp/seal)
N'2
51498342.1
LOCAL, SITE, LEASIa
EXHIBIT A
Description of Site
Real property located in Mason County, Washington, describedas follows:
All that portion of the West Half (W 1/2) of the Northeast Quarter (NE 1/4) of Section Two (2),
Township Twenty (20) North, Range Tour (4) West, W.M., lying Westerly of a line particularly
described as follows:
BEGINNING at a point on the South line of said West Half (W 1/2) of the Northeast Quarter
(NE 1/4) which is 890 feet West of the Southeast corner thereof; thence north 2°43' East, 2250
feet, more or less to a point on the North line of said West Half (W 1/2) of the Northeast Quarter
(NE 1/4) and the terminus of the herein described line.
EXCEPTING therefrom right-of-way for Dayton -airport County Road No. 09900.
A-1
51498342.1 LOCAL SITE LEASE
EXHIBIT B
Prepaid Site Lease Rent
Ten Dollars ($10.00)
B-1
51498342.1 LOCAL SITE LEASE
Annex 3
Transaction No. 0144-_-_
LOCAL AGENCY FINANCING LEASE, SERIES 2016A
This Local Agency Financing Lease, Series 20I6A (the "Financing Lease") is entered into by and between the state of Washington (the "Sta
acting by and through the State Treasurer (the "State Treasurer"), and Mason County, a municipal corporation of the State (the "Local Agency").
RECITALS
WHEREAS, the State, acting by and through the State Treasurer, is authorized to enter into financing contracts, including but not limited to
financing leases, for and on behalf of certain state agencies and local government agencies, including the Local Agency, for the use and acquisition of real
and personal property pursuant to Chapter 356, Laws of Washington, 1989, codified as Chapter 39.94 of the Revised Code of Washington (the "RCW"), as
supplemented and amended, (the "Act"), including but not limited to by Chapter 291, Laws of Washington, 1998; and
WHEREAS, the State Treasurer has established a consolidated program providing for the execution and delivery of certificates of participation in
such financing contracts, or in master financing contracts with respect thereto, in series from time to time in order to provide financing for or refinancing
of the costs of acquisition or improvement of such real and personal property by State Agencies and Local Agencies; and
WHEREAS, the Washington Finance Officers Association (the "Corporation"), a nonprofit corporation duly organized and existing under and by
virtue of the laws of the state of Washington, and the Local Agency have entered into a Local Agency Site Lease, Series 2016A, dated as of the Dated
Date (the "Site Lease"), for the lease of certain real property, designated in the Site Lease, (the "Site") for the sole purpose of subleasing the Site to the
State in order to refinance the cost of the acquisition or improvement thereof as described herein (the "Project"); and
WHEREAS, simultaneously with the execution and delivery hereof, the State is entering into a Master Financing Lease, Series 2016A, dated as of
the Dated Date (the "Master Financing Lease") with the Corporation, to provide financing or refinancing for the Projects for and on behalf of the Local
Agency, among others, through the sublease of the Property from the Corporation; and
WHEREAS, the State Treasurer and the Local Agency have determined that it is necessary and desirable to enter into this Financing Lease to
provide financing or refinancing for the Project to the Local Agency; and
WHEREAS, the State Finance Committee has authorized the execution and delivery of this Financing Lease pursuant to Resolution No, 987 adopted
on October 7, 2003; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection
with the execution and delivery of this Financing Lease do exist, have happened and have been performed in regular and due time, form and manner as
required by law, and the Parties hereto are now duly authorized to execute, deliver and perform their respective obligations under this Financing Lease;
NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other valuable consideration, the Parties
hereto mutually agree as follows:
Section 1.1 Defined Terns. Capitalized terms used but not otherwise defined in this Financing Lease shall have the respective meanings given such
terms in Appendix I hereto.
Section 1.2 Notice of Intent; Certificate Designating Authorized Agency Representative; Appendix II. The Local Agency has delivered a Notice of
Intent to the State Tieasurer in the form of Exhibit A attached hereto and incorporated herein by this reference. The Local Agency has delivered a
Certificate Designating Authorized Agency Representatives to the State Treasurer in the form of Exhibit B attached hereto and incorporated herein by this
reference. Said Certificate is currently in force and has not been amended, withdrawn or superseded, and the signatures shown thereon are true and correct
originals of the signatures of the persons who hold the titles shown opposite their names. The signature of any one of the individuals shown on said
Certificate is sufficient to bind the Local Agency under this Financing Lease with respect to any of the undertakings contemplated herein. The terms and
provisions set forth in Appendix II hereto are incorporated herein and made a part hereof by this reference.
Section 1.3 Sublease of Property. The State hereby subleases to the Local Agency, and the Local Agency hereby hires from the State, upon the
terms and conditions set forth in this Financing Lease, the real property and all improvements thereon, including, but not limited to the Project, described
in Exhibit C attached hereto and made a part hereof (collectively, the "Property"), subject to all easements, covenants, conditions and restrictions existing
as of the date hereof. The Local Agency hereby agrees to pay in consideration thereof the Agency Rent Payments and Additional Rent therefor in
accordance with Section 1.4 hereof and all other amounts required to be paid by the Local Agency hereunder, all in accordance with the provisions of this
Financing Lease
Section 1.4 Agency Rent Payments. In consideration of the sublease of the Property and the covenants and agreements of the State in this Financing
Lease, the Local Agency hereby promises to pay to the State the following amounts at the following times: (a) On each Agency Rent Payment Date, the
Agency Rent Payment set forth in Exhibit D hereto, consisting of an Agency Principal Component and/or an Agency Interest Component as set forth in
such Exhibit; and (b) All Additional Rent incurred by the State in connection with the sublease of the Property to the Local Agency, the execution and
delivery of the Certificates, and the observance and performance of the Series 2016A Agreements, within 30 days following receipt of an invoice from the
State with respect thereto which includes (i) a brief description of each item of such Additional Rent, (ii) the party to whom payment is due, (iii) the
amount thereof, and (iv) such additional information as the Local Agency may reasonably request.
Section 1.5 Term. The term of this Financing Lease shall commence on the Dated Date, and shall end on the scheduled termination date for this
Financing Lease as set forth in Section 8.2, unless such tern is extended or sooner terminated as hereinafter provided.
STATE OF WASHINGTON MASON COUNTY, WASHINGTON
OFFICE OF THE STATE TREASURER as Local Agency
By By
Treasurer Representative Authorized Agency Representative
51498334.1
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; CONSTRUCTION; MISCELLANEOUS PROVISIONS;
SUPPLEMENTS 1
Section 1.1 Definitions, Construction, Miscellaneous Provisions, Supplements 1
Section 1.2 Performance by Representatives 1
ARTICLE II SUBLEASE OF PROPERTY; ACQUISITION AND CONSTRUCTION
OF THE PROJECT 1
Section 2.1 Sublease of Property 1
Section 2.2 Appointment of Agents; Additions to Property; Substitution and Release
of Property 2
ARTICLE III AGENCY RENT PAYMENTS; PAYMENTS BY STATE TREASURER;
FULL FAITH AND CREDIT OBLIGATION 4
Section 3.1 Agency Rent Payments 4
Section 3.2 Sources of Payment of Agency Rent Payments 5
Section 3.3 Deposit and Investment of Agency Rent Payments 6
Section 3.4 Net Lease 6
Section 3.5 Assignments by the Corporation 7
ARTICLE IV OPTIONAL AND MANDATORY PREPAYMENT OF AGENCY RENT
PAYMENTS 7
Section 4.1 Optional Prepayment 7
Section 4.2 Mandatory Prepayment; Special Prepayment 8
Section 4.3 Revision of Agency Rent Payments upon Prepayment 8
Section 4.4 Discharge of Agency Financing Lease 8
ARTICLE V EMINENT DOMAIN; LOSS OF TITLE; DAMAGE AND
DESTRUCTION 9
Section 5.1 Eminent Domain 9
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TABLE OF CONTENTS
(continued)
Page
Section 5.2 Loss of Title 9
Section 5.3 Damage or Destruction 9
ARTICLE VI REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS 10
Section 6.1 Representations and Warranties of the Local Agency 10
Section 6.2 Covenants and Agreements of the Local Agency 11
ARTICLE VII EVENTS OF DEFAULT; REMEDIES 16
Section 7.1 Agency Event of Default 16
Section 7.2 Rights of State Treasurer Following Agency Default Event 18
Section 7.3 No Remedy Exclusive; Non -Waiver 20
Section 7.4 Default by State 20
ARTICLE VIII MISCELLANEOUS PROVISIONS 21
Section 8.1 Indemnification of State and the Corporation 21
Section 8.2 Term 21
Section 8.3 Termination 21
Section 8.4 Notices to Agency 21
Exhibit A — Notice of Intent
Exhibit B — Certificate Designating Authorized Agency Representative
Exhibit C — Legal Description
Exhibit D — Agency Rent Payments
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APPENDIX II
LOCAL AGENCY FINANCING LEASE, SERIES 2016A
(REAL PROPERTY)
Article I
DEFINITIONS; CONSTRUCTION; MISCELLANEOUS PROVISIONS; SUPPLEMENTS
Section 1.1 Definitions, Construction, Miscellaneous Provisions, Supplements.
Capitalized terms used but not otherwise defined in this Financing Lease shall have the
respective meanings given such terms in Part 1 of Appendix I of this Financing Lease, which is
incorporated herein and made a part hereof by this reference. This Financing Lease shall be
construed in accordance with the Rules of Construction set forth in Part 2 of Appendix I of this
Financing Lease, which is incorporated herein and made a part hereof by this reference. The
miscellaneous provisions set forth in Part 3 of Appendix I are incorporated herein and made a
part hereof by this reference. This Financing Lease may be supplemented and amended from
time to time in accordance with Part 4 of Appendix I of this Financing Lease, which is
incorporated herein and made a part hereof by this reference.
Section 1.2 Performance by Representatives. Any authority granted or duty imposed
upon the State Treasurer or the State hereunder may be undertaken and performed by the
Treasurer Representative. Any authority or duty imposed upon the Local Agency hereunder may
be undertaken and performed by the Authorized Agency Representative.
Article II
SUBLEASE OF PROPERTY; ACQUISITION AND CONSTRUCTION OF THE PROJECT
Section 2.1 Sublease of Property.
(a) Financing Lease. This Financing Lease shall constitute a "financing lease" and a
"financing contract" within the meaning of the Act.
(b) Master Financing Lease. The Local Agency acknowledges and agrees that this
Financing Lease shall be subject and subordinate in all respects to the terms and provisions of
the Master Financing Lease.
(c) Right of Entry. The State reserves the right for any of its duly authorized
representatives to enter upon the Property at any reasonable time (or in an emergency at any
time) to inspect the same or to make any repairs, improvements or changes necessary for the
preservation thereof, or otherwise in connection with the State's rights and obligations
hereunder.
(d) Quiet Enjoyment. The Local Agency at all times during the term of this
Financing Lease, subject to the provisions of Section 7.1 hereof, shall peaceably and quietly
have, hold and enjoy all of the Property without suit, trouble or hindrance from the State.
Section 2 2 Appointment of Agents,_ Additions to Property; Substitution and Release
oil Property.
(a) Appointment off. Agents. The Local Agency hereby ratifies, approves and
confirms, and accepts and agrees to, its designation and appointment as agent of the Corporation
in connection with the refinancing of the Property.
(b) [RESERVED]
(c) Additions to the Property. The Local Agency shall have the right during the term
of this Financing Lease, at its cost and expense, to make additions, betterments and
improvements to the Property, and to attach fixtures, structures and signs thereto; provided, that
such additions, betterments and improvements and fixtures, structures and signs (i) shall be
constructed and installed in accordance with applicable laws and regulations, and not in violation
of any easements, restrictions, conditions or covenants affecting title to the Property; and
(ii) shall not diminish the value, capacity or usefulness of the Property. The Agency also shall
have the right during the term of the Financing Lease, without the consent of any Owners, to
enter into Additional Local Agency Financing Leases and Additional Site Leases with the
Corporation to finance all or any portion of the cost of such additions, betterments and
improvements to the Property so long as such leases do not reduce the obligation of the State to
perform its obligations under the Master Financing Lease, including without limitation its
obligation to make ease Rent Payments, and will not, in an Opinion of Counsel, adversely affect
the tax-exempt status of the Interest Component of Base Rent Payments evidenced and
represented by the Certificates. If the Agency enters into any Additional Local Agency
Financing Lease for this purpose, the Corporation may be granted an interest in the Property
under an Additional Site Lease of all or any portion of the Property, which leasehold interest
may be assigned to the Fiscal Agent for the benefit of owners of certificates of participation in
the Additional Master Financing Lease to which such Additional Local Agency Financing Lease
is related. The occurrence of an Event of Default with respect to the Financing Lease shall
constitute a like event under any Additional Local Agency Financing Lease, and the occurrence
of any such like event under any Additional Local Agency Financing Lease shall constitute an
Event of Default under the Financing Lease. The owners of certificates of participation in any
Additional Master Financing Lease shall be secured pari passu with the Owners with respect to
any amounts received by the Fiscal Agent with respect to the Property following the occurrence
of an Event of Default.
(d) Substitution of Property After the refinancing of the Project or the Property, the
Local Agency, with the prior written consent of the State Treasurer and only upon the
satisfaction of the requirements set forth in Section 2.2(d) of the Master Financing Lease, may
substitute for the Property, another parcel or parcels of real property. As a condition to any such
substitution, the Local Agency shall deliver to the State Treasurer (i) an appraisal or other
written evidence from an independent, disinterested real property appraiser acceptable to the
State Treasurer and the Fiscal Agentto the effect that such substitute Property has an estimated
fair rental value for the remaining term of this Financing Lease equal to or greater than the
Agency Rent Payments due hereunder from time to time thereafter; (ii) a certificate of the Local
Agency to the effect that such substitute Property (A) is free and clear of any mortgages, deeds
of trust, liens or other similar encumbrances, other than Permitted Encumbrances, and (B) is
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essential to the Local Agency's ability to carry out its governmental functions and
responsibilities. The State Treasurer, the Fiscal Agent, as assignee of the Corporation, and the
Local Agency shall execute, deliver and record such amendments and modifications to the Site
Lease, the Master Financing Lease, the Master Assignment and this Financing Lease, and such
other documents, agreements and instruments, as the State Treasurer or the Fiscal Agent shall
deem necessary or desirable in connection with such substitution.
(e) Release of Property. After the refinancing of the Project, the Local Agency, with
the prior written consent of the State Treasurer and only upon the satisfaction of the
requirements set forth in Section 2.2(e) of the Master Financing Lease, may release a portion of
the Property leased under the Site Lease, and subleased under and pursuant to the Master
Financing Lease and this Financing Lease. As a condition to any such release, the Local Agency
shall (i) deliver to the State Treasurer an appraisal or other INritten evidence from an
independent, disinterested real property appraiser acceptable to the State Treasurer and the Fiscal
Agent to the effect that the remaining portion of the Property has an estimated fair rental value
for the remaining term of this Financing Lease equal to or greater than the Agency Rent
Payments due from time to time hereunder; (ii) provide any necessary easements, reciprocal
agreements or other rights as may be necessary to provide comparable pedestrian and vehicular
access, and other uses and amenities (including but not limited to water, sewer, electrical, gas,
telephone and other utilities) as existed prior to such release. The State Treasurer, the Fiscal
Agent, as assignee of the Corporation, and the Local Agency shall execute, deliver and record
such amendments and modifications to the Site Lease, the Master Financing Lease, the Master
Assignment and this Financing Lease, and such other documents, agreements and instruments, as
the State Treasurer or the Fiscal Agent shall deem necessary or desirable in connection with such
release.
(f) Refunding Escrow Account. In consideration of the mutual covenants and
agreements of the Parties set forth in the Master Financing Lease, the Corporation, the State
Treasurer and the Fiscal Agent shall enter into a Trust Agreement concurrently with the
execution and delivery of the Master Financing Lease under which the Corporation authorizes
and directs the Fiscal Agent to establish the Refunding Escrow Account and to make
disbui sements therefrom in accordance with the provisions hereof and thereof to pay the costs of
carrying out the Refunding Plan on behalf of the Corporation. A portion of the proceeds of the
sale of the Certificates shall be deposited in the Refunding Escrow Account. Moneys on deposit
in the Refunding Escrow Account shall be invested by the Fiscal Agent as provided in the Trust
Agreement. Disbursements from the Refunding Escrow Account shall be made as provided in
the Trust Agreement.
Section 2 3 Title to the Property. Fee title to the Property, and all additions
modifications, repairs and improvements thereto shall remain and vest in the Local Agency,
subject to the respective leasehold estates under the Site Lease, the Master Financing Lease and
this Financing Lease, without any further action by the State, the Local. Agency or the
Corporation.
Section 2.4 Assignment. In order to secure the payment and performance of the State
of its obligations under the Master Financing Lease, the State has assigned and transferred to the
Corporation the State's interest in this Agency Financing Lease and the rentals, income and
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profits herefrom, including without limitation the Agency Rent Payments. The Local Agency
acknowledges and agrees to such assignment and transfer. The State Treasurer hereby
irrevocably authorizes and directs the Local Agency, upon receipt of written notice from the
Fiscal Agent, as assignee of the Corporation, that an Event of Default has occurred and is
continuing, to pay to the Fiscal Agent the Agency Rent Payments and other amounts due and to
become due hereunder. The State Treasurer shall not have any right or claim against the Local
Agency for any Agency Rent Payments or other amounts so paid by the Local Agency to the
Fiscal Agent.
Section 2.5 Disclaimer of Warranties. The Local Agency acknowledges and agrees
that it has had adequate opportunity to inspect the Property, and that such Property, including but
not limited to the structures and improvements thereon, is acceptable to the Local Agency in its
present condition. The Local Agency subleases the Property in its present condition, "as is."
THE STATE MAKES NO WARRANTY OR REPRESENTATION EITHER EXPRESS OR
IMPLIED, AND ASSUMES NO RESPONSIBILITY, LIABILITY OR OBLIGATION, AS TO
THE VALUE, DESIGN, STRUCTURAL OR OTHER CONDITION, USE, USABILITY,
SUITABILITY, OCCUPANCY OR MANAGEMENT OF THE PROPERTY, AS TO THE
INCOME FROM OR EXPENSE OF THE USE OR OPERATION THEREOF, AS TO TITLE
TO THE PROPERTY, AS TO COMPLIANCE WITH APPLICABLE ZONING,
SUBDIVISION, PLANNING, SAFETY, FIRE, HEALTH OR ENVIRONMENTAL LAWS,
REGULATIONS, ORDINANCES, CODES OR REQUIREMENTS, OR AS TO
COMPLIANCE WITH APPLICABLE COVENANTS, CONDITIONS OR RESTRICTIONS,
OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE
PROPERTY.
Article III
AGENCY RENT PAYMENTS; PAYMENTS BY STATE TREASURER; FULL FAITH AND
CREDIT OBLIGATION
Section 3 1 Agency Rent Payments Each Agency Rent Payment shall consist of an
Agency Principal Component and/or an Agency Interest Component as set forth in Exhibit D to
this Financing Lease. Interest shall accrue and be calculated as determined by the State
Treasurer, which determination shall be binding and conclusive against the Local Agency, absent
manifest error Each Agency Rent Payment payable hereunder shall be paid to or upon the order
of the State Treasurer, at such place as the State Treasurer shall direct in writing not less than ten
(10) Business Days prior to the Agency Rent Payment Date by electronic funds transfer in
lawful money of the United States of America. Payments of Additional Rent shall be made to or
upon the order of the State Treasurer Each Agency Rent Payment shall be applied first to the
Agency Interest Component due hereunder, and then to the Agency Principal Component due
hereunder.
Such payments of Agency Rent Payments and Additional Rent for each rental payment
period during the term of this. Financing Lease shall constitute the total rental due for such
period,andshall be paid foi and in consideration of the use and occupancy and continued quiet
enjoyment of the Property for such period. The Parties hereto have determined and agreed that
such total rental does not exceed the fair rental value of the Property for each such rental period,
given the purposes, terms and provisions of this Financing Lease. Anything herein to the
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contrary notwithstanding, the Local Agency hereby waives any right that it may have under the
laws of the State to a rebate or repayment of any portion of such rental in the event that there is
substantial interference with the use or right to possession by the Local Agency of the Property
or any portion thereof as a result of material damage, destruction or condemnation.
Section 3.2 Sources of Payment of Agency Rent Payments.
(a) Agency Financing Lease. The Local Agency hereby acknowledges and agrees
that the State is subleasing the Property from the Corporation for and on. behalf of the Local
Agency. Concurrently with the execution hereof, the State shall execute and deliver (i) the
Master Financing Lease with the Corporation, pursuant to which the State shall agree to make
Base Rent Payments for the sublease of the Property for and on behalf of the respective
Agencies, at such times and in such amounts as provided therein' and (it) the Financing Leases
with the respective Agencies, pursuant to which each such Agency shall agree to sublease
respective Property .and to make Agency Rent Payments therefor, at such times and in such
amounts as provided therein. Such Agency Rent Payments shall be sufficient in the aggregate to
pay, on each Base Rent Payment Date the Base Rent Payment for the Property subleased by the
State from the Corporation for and on behalf of such Local Agencies under the Master Financing
Lease.
The portion of the Base Rent Payments allocable to Local Agencies shall be payable by
the State solely from Agency Rent Payments to be made by the respective Local Agencies,
including the Local Agency, except as otherwise provided in the Master Financing Lease. The
obligation of each Local Agency to make its Agency Rent Payments shall be a direct and general
obligation of the Local Agency to which the full faith and credit of such Local Agency is
pledged. The State shall not be obligated to pay the Base Rent Payments allocable to Local
Agencies other than from Agency Rent Payments paid by the respective Local Agencies, except
as otherwise provided in the Master Financing Lease.
(b) Intercept of Local Agency Share of State Revenues. In the event that the Local
Agency fails to make any payment due under .this Financing Lease, the State Treasurer shall
withhold an amount sufficient to make such payment from the Local Agency's share of State
revenues or other amounts authorized or required by law to be distributed by the State to the
Local Agency, including but not limited to leasehold excise taxes, sales and use taxes, excise
taxes and property taxes; provided, that the use of any such revenues or amounts to make such
payments is otherwise authorized or permitted by State law. Such withholding shall continue
until all such delinquent payments .have been made. Amounts withheld by the State Treasurer
shall be applied to make any such payment. due .under this .Financing Lease on. behalf of the
Local Agency, or to reimburse the State Treasurer for any such payment made pursuant to
Section 3.2(c) hereof. The Local Agency hereby authorizes, approves and consents to any such
withholding.
(c) Conditional Payment of Agency Rent Payments. Upon the failure of the Local
Agency to make any Agency Rent Payment at such time and in such amount as required pursuant
to this Financing Lease, the State Treasurer shall, to the extent of legally available appropriated
funds and subject to any Executive Order reduction, make such payment into the Agency Rent
Payment Fund, defined below, on behalf of such Local Agency within ten (10) Business Days
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after such Agency Rent Payment Date. The Local Agency shall reimburse the State for such
payments made on its behalf immediately thereafter and in any ease not later than ten (10)
Business Days after such Agency Rent Payment Date, together with interest thereon at a rate
equal to the State Reimbursement Rate. Anything herein to the contrary notwithstanding, failure
oI the Local Agency to reimburse the State Treasurer for any such payment shall not constitute
an Agency Event of Default hereunder, but the State may institute such legal action and pursue
such other remedies against the Local Agency as the State deems necessary or desirable
including but not limited to actions for specific performance, injunction and/or the recovery of
damages.
(d) Payments by Local Agency Treasurer. The treasurer of the Local Agency is
hereby authorized and directed to establish and/or maintain a special fund in the "bonds payable"
category of accounts of the Local Agency for the purposes of paying the Local Agency's Agency
Rent Payments and Additional Rent. The treasurer of the Local Agency is hereby further
authorized and directed to remit each payment of Agency Rent Payments to the State Treasurer
or its assignee on each Agency Rent Payment Date and any Additional Rent when due
hereunder. Such payment shall be made from any legally available funds of the Local Agency.
Section 3.3 Deposit and Investment of Agency Rent Payments The Local Agency
hereby acknowledges and agrees that the Agency Rent Payments shall be deposited in a special
fund or funds maintained by the State Treasurer (the "Agency Rent Payment Fund"). The
Agency Rent Payrnents due on each Agency Rent Payment Date shall be at Least sufficient, in the
aggregate, to make; the Base Rent Payment next coming due under the Master Financing Lease.
Amounts in the Agency Rent Payment Fund, including investment earnings thereon., shall be
used and applied, first, to make the Base Rent Payment next coming due, and thereafter, but
prior to the next Agency Rent Payment Date, to the extent that amounts remain in such Fund
after such Base Rent Payment is made, to pay Additional Rent or for any other lawful purpose of
the State 'I reasurer. Amounts in the Agency Rent Payment Fund shall be invested in the
Qualified Investments, and shall be separately accounted for, but may be commingled with other
moneys on deposit with the State Treasurer solely for investment purposes. The Local Agency
shall have no right, title or interest in or to the amounts on deposit from time to time in the
Agency Rent Payment Fund.
Section 3.4 Net Lease. The obligation of the Local Agency to make Agency Rent
Payments from the sources set forth herein and to perform its other obligations hereunder shall
be absoluteand unconditional. This Financing Lease shall be deemed and construed to be a
`triple net lease," and the Local Agency shall pay absolutely net during the term of this
Financing Lease the Agency Rent Payments, Additional Rent and all other amounts due
hereunder, without notice or demand, and free of any charges, assessments, Impositions or
deductions whatsoever, and without any diminution, reduction, postponement, abatement,
counterclaim, defense or set-off as a result of any dispute, claim or right of action by, against
among the Local Agency, the State, the Corporation, the Fiscal Agent, and/or any other Person
or for any other reason; provided, that nothing in this Section 3.4 shall be construed to release or
excuse the State from the observance or performance of its obligations hereunder. If the State
shall fail to observe or perform any such obligation, the Local Agency may institute such legal
action and pursue such other remedies against the State as the Local Agency deems necessary or
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desirable, including, but not limited to actions for specific performance, injunction and/or the
recovery of damages.
Section 3.5 Assignments by the Corporation. The Local Agency acknowledges and
agrees that, concurrently with the execution and delivery hereof, the Corporation will
unconditionally grant, sell, assign, transfer and convey to the Fiscal Agent pursuant to the Master
Assignment, without recourse, (i) all of its rights to the Site pursuant to the Site Leases, (ii) all of
its rights to receive the Base Rent Payments and any Additional Rent under and pursuant to the
Master Financing Lease; (iii) its right to take all actions, exercise all remedies, and give all
consents under and pursuant to the Site Leases and the Master Financing Lease; (iv) all. of its
remaining right, title and interest in, to and under the Site Leases, the Master Financing Lease,
and the Agency Financing Leases, and in and to the Property (including any security interest
therein) and any rents or profits generated therefrom; and (v) its right of access more particularly
described in the Master Financing Lease, all in consideration for the payment by the Fiscal
Agent to the State Treasurer, as agent of the Corporation, of the proceeds of the sale of the
Certificates. The State Treasurer and the Corporation have acknowledged and agreed that such
grant, sale, assignment, transfer and conveyance by the Corporation is intended to be a true sale
of the Corporation's right, title and interest, and that upon such grant, sale, assignment, transfer
and conveyance, the Corporation shall cease to have any rights, duties or obligations under the
Site Leases, the Master Financing Lease and the Agency Financing Leases, or with respect to the
Property, and the Fiscal Agent shall thereafter have all the rights, duties. and obligations of the
Corporation thereunder as if the Fiscal Agent had been the original party thereto, and, except
where the context otherwise requires, every reference therein and herein to the Corporation shall
be deemed and construed to refer to the Fiscal Agent. Anything herein to the contrary
notwithstanding, such grant, sale, assignment, transfer and conveyance shall not confer any
rights or impose any duties or obligations on the Fiscal Agent other than as expressly set forth in
the Trust Agreement and the Master Assignment.
Article IV
OPTIONAL AND MANDATORY PREPAYMENT OF AGENCY RENT PAYMENTS
Section 4.1 Optional Prepayment. (a) The Local Agency may, at its option, prepay all
or any portion of its Agency Rent Payments then unpaid, in whole or in part on any date, by
causing to be deposited with the State Treasurer money and/or Government Obligations in an
amount sufficient for the State Treasures to prepay or defease the portion of its Base Rent
Payments corresponding thereto in accordance with Subsection 4.1(a) or 4.1(b) of the Master
Financing Lease and to pay any Additional Rent in connection therewith.
(b) The Local Agency shall provide the State Treasurer with not less than 60 .days
prior written notice of its intention to prepay any of its Agency Rent Payments which notice shall
specify the date of prepayment, and the amount and the Agency Rent Payment Dates of the
Agency Rent Payments to be prepaid. The State Treasurer shall notify the Local Agency within
fifteen (15) Business Days after receipt of such notice from the Local Agency as to the amount
required to be paid in connection with such prepayment or defeasance of the corresponding Base
Rent Payments, including any Additional Rent in connection therewith. The determination by
the State Treasurer of the amount to be paid by the Local Agency shall be binding and
conclusive against the Local Agency, absent manifest error.
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Section 4.2 Mandatory Prepayment; Special Prepayment.
(a) Eminent Domain; Loss of Title. The Local Agency shall prepay or cause to be
prepaid from eminent domain awards or sale proceeds received pursuant to Section 5.1 hereof,
and from the net proceeds of title insurance received pursuant to Section 5.2 hereof, the Agency
Rent Payments then unpaid, in whole or in part on any date, so that the aggregate annual Agency
Rent Payments for the related Property from and after such prepayment date shall be in
approximately equal amounts, at a Prepayment Price equal to the sum of the Agency Rent
Pay ments so prepaid, without premium, plus accrued interest evidenced and represented thereby
to the date of prepayment.
(b) Insurance Proceeds. The Local Agency may, at its option, prepay or cause to be
prepaid from net insurance proceeds received pursuant to Section5.3 hereof, the Agency Rent
Payments then unpaid, in whole or in part on any date, so that the aggregate annual Agency Rent
Payments for the related Property from and after such prepayment date shall be in approximately
equal amounts, at a Prepayment Price equal to the sum of the Agency Rent Payments prepaid,
without premium, plus accrued interest evidenced and represented thereby to the date of
prepayment.
Section 4.3 Revision of Agency Rent Payments upon Prepayment. The Agency
Principal Components and Agency Interest Components of the Agency Rent Payments due on
each Agency Rent Payment Date on and after the date of any prepayment pursuant to
Sections 4.1 or 4.2 hereof, as set forth in Exhibit D hereto, shall be reduced by the State
Treasurer to reflect such prepayment, in Authorized Denominations, in such amounts and on
such Agency Rent Payment Dates as the Local Agency shall elect in its written notice to the
State Treasurer pursuant to Section 4.1(b) hereof.
Section 4.4 Discharge of Agency Financing Lease. All right, title and interest of the
State herein and all obligations of the Local Agency hereunder shall cease, terminate, become
void and be completely discharged and satisfied (except for the right of the State Treasurer and
the Fiscal Agent, as assignee of the Corporation, and the obligation of the Local Agency to have
the moneys and Government Obligations so set aside applied to make the remaining Agency
Rent Payments) when either:
(a) all Agency Rent Payments and all .Additional Rent and other amounts due
hereunder have been paid in accordance herewith; or
(b) (i) the Local Agency shall have delivered a written notice to the State Treasurer of
its intention to prepay all of the Agency Rent Payments remaining unpaid; (ii) the Local Agency
shall have caused to be deposited with the State Treasurer (A) moneys and/or Government
Obligations in accordance with Section 4.1 hereof; and (B) an Opinion of Counsel to the effect
that such actions are permitted hereunder, under the Master Financing Lease and under the Trust
Agreement and will not cause interest evidenced and represented by the Certificates to be
includable in gross income for federal income tax purposes under the Code' and (iii) for so long
as any Base Rent Payments remain unpaid, provision shall have been made satisfactory to the
Corporation and the Fiscal Agent for payment of all Additional Rent.
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Article V
EMINENT DOMAIN; LOSS OF TITLE; DAMAGE AND DESTRUCTION
Section 5.1 Eminent Domain. If the Property subleased to the Local Agency pursuant
to this Financing Lease, or so much thereof so as to render the remainder unsuitable for the
purposes for which it was used by the Local Agency at the time of such taking shall be taken
under the power of eminent domain (or sold under threat of condemnation), the sublease of such
Property pursuant to this Financing Lease shall cease as of the day that the Local Agency is
required to vacate such Property. If less than all of such Property is taken under the power of
eminent domain (or sold under threat of condemnation), and the remainder is suitable for the
purposes for which it was used by the Local Agency at the time of such taking, as reasonably
determined by the State Treasurer, then the sublease thereof pursuant to this Financing Lease
shall continue in full force and effect as to such remainder, and the Parties waive any benefits of
the law to the contrary. In such event, there shall be no abatement of the rental due hereunder or
thereunder. So long as any Agency Rent Payments under this Financing Lease remain unpaid,
any eminent domain award and any proceeds of sale under threat of condemnation for all or any
part of the Property shall be applied to the prepayment of Agency Rent Payments as provided in
Section 4.2(a) hereof. Any award or proceeds in excess of the amount necessary to prepay such
Agency Rent Payments due hereunder, and thereby to prepay or provide for the payment of the
corresponding portion of the Base Rent Payments under the Master Financing Lease, shall be
paid to the Corporation, the State and the Local Agency as their respective interests may appear.
Section 5.2 Loss of Title. If there is a loss of title to the Property subleased to the
Local Agency pursuant to this Financing Lease which is insured under a policy or policies of
title insurance, or so much thereof so as to render the remainder unsuitable for the purposes for
which it was used by the Local Agency at the time of such loss, the sublease of such Property
pursuant to this Financing Lease shall cease as of the day that the Local Agency is required to
vacate such Property. If there is a loss of title to less than all of such Property, and the remainder
is suitable for the purposes for which it was used by the Local Agency at thetime of such loss, as
reasonably determined by the State Treasurer, then the sublease thereof pursuant to this
Financing Lease shall continue in full force and effect as to such remainder and the Parties
waive any benefits of the law to the contrary. In such event, there shall be no abatement of the
rental due hereunder. So long as any Agency Rent Payments under this Financing. Lease remain
unpaid, any payments under such title insurance policy or policies with respect to such Property
shall be applied to the prepayment of Agency Rent Payments as provided in Section 4.2(a)
hereof. Any payment in excess of the amount necessary to prepay such Agency Rent Payments
due under this Financing Lease, and thereby to prepay or provide for the payment of the
corresponding portion of the Base Rent Payments due under the Master Financing Lease, shall
be paid to the Corporation, the State and the Local Agency as their respective interests may
appear.
Section 5.3 Damage or Destruction. If all or any portion of the Property subleased to
the Local Agency pursuant to this Financing Lease shall be damaged or destroyed by fire or
other casualty, the sublease thereof pursuant to this Financing Lease. shall not terminate, nor shall
there be any abatement of the rent payable hereunder. So long as any Agency Rent Payments
under this Financing Lease remain unpaid, any payments under the property insurance policy or
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policies with respect to such Property may be applied to the prepayment of Agency Rent
Payments as provided in Section 4 2(b) hereof, or may be paid to the State Treasurer and applied
as provided in Section 5.03 of the Trust Agreement.
Article VI
REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
Section 6.1 Representations and Warranties of the Local A2encv, The Local Agency
represents and warrants as follows:
(a) The Local Agency is a `Local Agency" within the meaning of the Act, duly
organized and validly existing under the Constitution and laws of the state of Washington.
(b) The Local Agency is authorized under the laws of the state of Washington and its
Charter or other constituent document, if any, to enter into and perform its obligations under this
Financing Lease.
(c) Neither the execution and delivery by the Local Agency of this Financing Lease,
nor the observance and performance of the terms and conditions hereof, nor the consummation
of the transactions contemplated hereby, conflicts with or constitutes a breach of or default under
any agreement or instrument to which the Local Agency is a party or by which the Local Agency
or its property is bound, or results in the creation or imposition of any lien, charge or
encumbrance whatsoever upon the Site or the Project, except as expressly provided in this
Financing Lease and the Master Financing Lease.
(d) The Local Agency has duly authorized, executed and delivered this Financing
Lease.
(e) This Financing Lease is a valid and binding obligation. of the Local Agency,
enforceable against it in accordance with its terms, except as such enforceability may be affected
by bankiuptcy, insolvency, reorganization, moratorium and other laws relating to or affecting
creditors rights generally, to the application of equitable principles, and to the exercise of
judicial discretion in appropriate cases.
(0 The Site and the Project thereon to be designed, acquired and/or constructed
pursuant to this Financing Lease is essential to the Local Agency's ability to carry out its
governmental functions and responsibilities and the Local Agency expects to make immediate
and continuing use of such Property during the term of this Financing Lease.
(g)
The useful life of the Property is equal to or exceeds the term hereof.
(h) The obligations of the Local Agency under this Financing Lease, together with all
other outstanding indebtedness of the Local Agency, do not exceed any statutory or
constitutional debt limit applicable to the Local Agency.
(i) The Local Agency is the owner in fee of the Property.
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51498334.1
(j) The Local Agency is not in violation of, or subject to any pending or threatened
investigation by, any governmental authority under any federal, State or local law, regulation, or
ordinance pertaining to the handling, transportation, storage, treatment, usage or disposal of
Toxic or Hazardous Substances, air emissions, other environmental matters or any zoning or land
use matters with respect to the Property or the Project.
Section 6.2 Covenants and Agreements of the Local Agency. The Local Agency
covenants and agrees as follows
(a) Preservation of Existence. The Local Agency will do or cause to be done all
things necessary to preserve its existence as a Local Agency within the meaning of the Act.
(b) Budget. The Local Agency shall take such action as may be necessary to include
all the Agency Rent, Payments and Additional Rent due hereunder in its annual budget and to
make the necessary annual appropriations for all such Agency Rent Payments and Additional
Rent.
(c) Tax -Exemption. The Local Agency shall not make any use of the proceeds of this
Financing Lease or the Certificates or of any other amounts, regardless of the source, or of any
property, and shall not take or refrain from taking any action, that would cause the Master
Financing Lease or the Certificates to be "arbitrage bonds" within the meaning of Section 148 of
the Code. The Local Agency shall not use or permit the use of the Property or any part thereof
by any Person other than a "governmental unit" as that term is defined in Section 141 of the
Code, in such manner or to such extent as would result in the loss of the exclusion from gross
income for federal income tax purposes of the Interest Component of the Base Rent Payments
under Section 103 of the Code. The Local Agency shall not make any use of the proceeds of this
Financing Lease or the Certificates or of any other amounts, and shall not take or refrain from
taking any action, that would cause the Master Financing Lease or the Certificates to be
"federally guaranteed" within the meaning of Section 149(b) of the Code or "private activity
bonds" within the meaning of Section 141 of the Code, or "hedge bonds" within the meaning of
Section 149 of the Code. To that end, for so long as any Agency Rent Payments remain unpaid,
the Local Agency, with respect to such proceeds and other amounts, will comply with all
requirements under such Sections and all applicable regulations of the United States Department
of the Treasury promulgated thereunder. The Local Agency will at all times do and perform all
acts and things permitted by law which are necessary or desirable in order to assure that the
Interest Components of the Agency Rent Payments will not be included in gross income of the
Owners of the Certificates for federal income tax purposes under the Code, and will take no
action that would result in such interest being so included. The Local Agency shall comply with
the applicable provisions of the 'Tax Certificate.
(d) Duties Imposed by Law. To the extent permitted by law, the covenants,
agreements and other obligations on the part of the Local Agency contained herein shall be
deemed and construed to be ministerial and non -discretionary duties imposed by law, and it shall
be the duty of the Local Agency and each and every public official to take such actions and to do
such things as are required by law in the performance of the official duties of such officials to
enable the Local Agency to observe and perform the covenants, agreements, terms, conditions
and other obligations contained herein to be observed and performed by the Local Agency.
51498334.1
(e) Liens; Assignments and Subleases. The Local Agency shall not create, incur,
assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with
respect to the Property or any part thereof, except for Permitted Encumbrances. The Local
Agency shall promptly, at its own expense, take such action as may be necessary to duly
discharge any such mortgage, pledge, lien, charge, encumbrance or claim if the same shall arise
at any time. The Local Agency shall not grant, sell, transfer, assign, pledge, convey, mortgage,
pledge, sublet or otherwise dispose of any of the Property or any interest therein during the term
of this Financing Lease, and any such attempted grant, sale, transfer, assignment, pledge,
conveyance or disposal shall be void.
(f) Performance. The Local Agency shall punctually pay the Agency Rent Payments
and Addit onal Rent in strict conformity with the terms and pre visions hereof, and will faithfully
observe and perform all the covenants, agreements, terrns, conditions and other obligations
contained herein required to be observed and performed by the Local Agency. The Local
Agency will not suffer or permit any default to occur hei sunder, or do or permit anything to be
done, or omit or refrain from doing anything, in any case where any such act done or permitted
to be done, or any such omission or refraining from doing anything, would or might be ground
for cancellation or termination of this Financing Lease
(g) Further Assurances. The Local Agency will preserve and protect the rights of the
State Treasurer hereunder, and will warrant and defend such rights against all claims and
demands of all Persons. The Local Agency will promptly execute, make, deliver, file and record
any and all further assurances, instruments and agreements, and do or cause to be done such
other and further things, as may be necessary or proper to carry out the intention or to facilitate
the performance hereof and for the better assuring and confirming to the State Treasurer the
rights and benefits provided to it hereunder.
(h) Pledge of Funds and Credit of Local Agency. The obligations of the Local
Agency under this Financing Lease constitute a debt and a general obligation of the Local
Agency and a contracting of an indebtedness by the Local Agency, to which the full faith and
credit of the Local Agency are hereby pledged. If and to the extent authorized by law, the Local
Agency hereby covenants and agrees that it will levy taxes in such amounts and at such times as
shall be necessary, within and as a part of the tax levy, if any, permitted to the Local Agency
without a vote of its electors, to provide funds, together with other legally available moneys,
sufficient to make the Agency Rent Payments and the other payments required under this
Financing Lease.
(i) Use of Property. During the term of this Financing Lease, the Local Agency will
use the Property for the purposes of performing one or more of its essential governmental
functions or responsibilities.
(j) Notice of Nonpayment. The Local Agency shall give written notice to the State
Treasurer, the Corporation and the Fiscal Agent, as assignee of the Corporation, prior to any
Agency Rent Payment Date if the Local Agency knows prior to such date that it will be unable to
make the Agency Rent Payment due on such date, or any portion thereof.
514969391. I
(k) Financzal Statements. The Local Agency shall prepare annual financial
statements and obtain audits thereof as required by law. Upon the Written Request of the Statc.
Treasurer, the Local Agency shall provide the State Treasurer with a copy of its most recent
audited and unaudited financial statements.
(1) Maintenance; Repairs. For so long as the Local Agency is in possession of the
Property, the Local Agency shall be solely responsible for the maintenance and repair, both
ordinary and extraordinary, thereof. The Local Agency will (i) keep and maintain the Property
in good repair and condition, protect the same from deterioration other than normal wear and
tear, and pay or cause to be paid all charges for utility services to the Property; (ii) comply with
the requirements of applicable laws, ordinances and regulations and the requirements of any
insurance or self-insurance program required under Subsection 6.2(n) hereof in connection with
the use, occupation and maintenance of the Property; (iii) obtain all permits and licenses, if any,
required by law for the use, occupation and maintenance of the Property; and (iv) pay all costs,
claims damages, fees and charges arising out of its possession, use or maintenance of the
Property.
(m) Hazardous Substances.
(i) Use. The Property does not currently violate, and neither the Local
Agency nor its officers, agents, employees, contractors, or invitees, shall not use the
Pioperty in a manner that violates, any applicable federal, state or local law, regulation or
ordinance, including, but not limited to, any such law, regulation or of dinance pertaining
to air and water quality, the handling, transportation, storage, treatment, usage and
disposal of Toxic or Hazardous Substances, an emissions, other environmental matters,
and all zoning and other land use matters. The Local Agency shall not cause or permit
the release or disposal of any Toxic or Hazardous Substances on or from the Property.
(ii) Indemnity. The Local Agency, to the extent permitted by law, agrees to
protect indemnify, defend (with counsel satisfactory to the Local Agency) and hold the
State, the Corporation and the Fiscal Agent, and their respective directors, officers,
employees and agents harmless from any claims, judgments, damages, penalties, fines,
expenses, liabilities or losses arising out of or in any way relating to the presence, release
or disposal of Toxic or Hazardous Substances on or from the Property; provided,
however, that the Local Agency shall not be obligated to indemnify such parties, in its
capacity as Lessor under this Financing Lease, from any such claims, judgments,
damages, penalties, fines, expenses, liabilities or losses relating to the presence, release
or disposal of Toxic or Hazardous Substances on or from the Property occurring when
the Local Agency is not or was not in possession of the Property. Such indemnity shall
include, without limitation, costs incurred in connection with
(A) Toxic or Hazardous Substances present or suspected to be present
in the soil, groundwater or soil vapor on or under the Property; or
(B) Toxic or Hazardous Substances that migrate, flow, percolate,
diffuse, or in any way move onto or under the Property; or
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(C) Toxic or Hazardous Substances present on or under the Property as
a result of any discharge, dumping, spilling (accidental or otherwise) onto the
Property by any person, corporation, partnership, or entity other than the Local
Agency, its officials, officers employees or agents.
The indemnification provided by this subsection shall also specifically cover,
without limitation, costs incurred in connection with any investigation of site conditions
or any cleanup, remedial, removal or restoration work required by any federal, state or
local governmental agency or political subdivision or other third party because of the
presence or suspected presence of Toxic or Hazardous Substances in the soil,
groundwater, or soil vapor on or under the Property. Such costs may include, but not be
limited to, damages for the loss or restriction on use of rentable or usable space o1 of any
amenity of the Property, sums paid in settlements of claims, attorneys fees, consultants
fees, and expert fees.
(iii) Not(flcation Requirements. The Local Agency shall promptly notify the
other Parties in writing of all spills or releases of any Toxic or Hazardous Substances, all
failures to comply with any federal, state, or local law, re&ulation or ordinance, all
inspections of the Property by any regulatory entity concerning the same, all notices,
orders, fines or communications of any kind from any governmental entity or third party
that relate to the existence of or potential for environmental pollution of any kind existing
on or resulting from the use of the Property or any activity conducted thereon, and all
responses or interim cleanup action taken by or proposed to be taken by any government
entity or private party on the Property.
Upon request by any Party, the Local Agency shall provide such Party with a
written report (A) listing the Toxic or Hazardous Substances that were used or stored on
the Property; (B) discussing all releases of Toxic or Hazardous Substances that occurred
or were discovered on the Property and all compliance activities related to Toxic or
Hazardous Substances, including all contacts with and all requests from third parties for
cleanup or compliance; (C) providing copies of all permits, manifests, business plans,
consent agreements or other contracts relating to Toxic or Hazardous Substances
executed or requested during that time period and (D) including such other information
requested by such Party.
(iv) Inspection Rights, The Parties, and their officers, employees and agents,
shall have the right, but not the duty, to inspect the Property and the Local Agency's
relevant ens ironmental and land use documents at any time and to perform such tests on
the Property as are reasonably necessary to determine whether the Local Agency is
complying with the terms of this Financing Lease. The Local Agency shall be
responsible for paying for any testing that is conducted if the Local Agency is not in
compliance with this Financing Lease and such Party has reason to believe such
noncompliance is due to the Local Agency's operations or use of the Property. If the
Local Agency is not in compliance with this Financing Lease, such Party, without
waiving or releasing any right or remedy it may have with respect to such
noncompliance, shall have the right to immediately enter upon the Property to remedy
any contamination caused by the Local Agency's failure to comply notwithstanding any
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51498334.1
other provision of this Financing Lease. The Party shall use reasonable efforts to
minimize interference with the Local Agency's business but shall not be liable for any
interference caused thereby.
(v) Corrective Action. In the event any investigation, site monitoring,
containment, cleanup, removal, restoration or other remedial work ("Remedial Work") of
any kind is necessary under any applicable federal, state or local laws, regulations or
ordinances, or is required by any goy ernmental entity or other third person because of or
in connection with the presence or suspected presence of Toxic or Hazardous Substances
on or under the Property, the Local Agency shall assume responsibility for all such
Remedial Work and shall promptly commence and thereafter diligently prosecute to
completion all such Remedial Work. The Local Agency shall pay for all costs and
expenses of such Remedial Work, including, without limitation, the Party's reasonable
attorneys' fees and costs incurred in connection with monitoring or review of such
Remedial Work. In the event the Local Agency shall fail to timely commence, or cause
to be commenced, or fail to diligently prosecute to completion, such Remedial Work,
such Party may, but shall not be required to, cause such Remedial Work to be performed
and all costs and expenses thereof, or incurred in connection therewith, shall become
immediately due and payable as Additional Rent due to the State from the Local Agency.
(n) Insurance.
(i) The Local Agency shall maintain, or cause to be maintained, in full force
and effect, comprehensive general liability insurance with respect to the Property in such
amounts as may be reasonably determined by the Local Agency from time to time but in
any event not less than $1,000,000 per occ;urience, or such greater amount as the State
Treasurer may reasonably require from time to time. Such insurance may be carried
under a blanket policy with umbrella coverage. Such insurance shall cover any and all
liability of the Local Agency and its officials, officers, employees and volunteers. Such
insurance shall include (A) coverage for any accident resulting in personal injury to or
death of any person and consequential damages arising therefrom; and
(B) comprehensive property damage insurance.
(ii) The Local Agency shall maintain or cause to be maintained in fullforce
and effect fire and extended coverage insurance with respect to the Property in such
amounts as the Local Agency may reasonably determine from time to time, but in any
event not less than the aggregate of the principal components of Agency Rent Payments
due hereunder which remain unpaid. Such insurance may be carried under a policy or
policies covering other property of the Local Agency. Such property insurance shall be
all risk" insurance, and shall cover physical loss or damage as a result of fire, lightning
theft, vandalism, malicious mischief, flood, earthquake, and boiler and machinery,
provided, that the State Treasurer may waive the requirement for earthquake or flood
insurance if it determines, in its reasonable discretion, that the same is not available from
reputable insurers and commercially reasonable rates. Such extended coverage insurance
shall, as nearly as practicable, cover loss or damage by explosion, windstorm, riot
aircraft, vehicle damage, smoke and such other hazards as the Local Agency ma)
reasonably determine from time to time. Such policies of insurance shall provide that all
51498334,1
proceeds thereunder shall be payable to the Fiscal Agent, as assignee of the Corporation,
pursuant to a lender's loss payable endorsement in a form approved in writing by the
State Treasurer, which approval shall not be unreasonably withheld or delayed. The net
proceeds of such insurance shall be applied as provided in Section 5.03 of the Trust
Agreement. Such insurance may at any time include a deductible of not to exceed $5,000
for losses in any year, or such greater amount as the State Treasurer may approve in
writing.
(iii) The insurance required under paragraphs (i) and (ii) above (A) shall be
provided by a financially responsible insurance company authorized to do business in the
State; (B) shall name the State and the Fiscal Agent, as assignee of the Corporation, as
additional insureds thereunder; (C) shall provide that the same may not be canceled or
given notice of non -renewal, nor shall the terms or conditions thereof be altered,
amended or modified, without at least 45 days' prior written notice being given by the
insurer to the State Treasurer and (D) may be provided in whole or in part through a
funded program of self-insurance reviewed at least annually by an insurance actuary.
(iv) A certificate of insurance with respect to the required coverages shall be
provided by the Local Agency to the State Treasurer annually on or prior to December 1
with respect to any required insurance maintained pursuant hereto.
(v) Unless otherwise agreed by the State, the Local Agency shall obtain a
policy or policies of title insurance on the Property, subject only to Permitted
Encumbrances, in an amount equal to the aggregate amount of Agency Rent Payments to
become due hereunder, payable to the State and the Fiscal Agent, in a forte and from a
provider approved in writing by the State Treasurer, which approval shall not be
unreasonably withheld or delayed. The proceeds received under any such policy shall be
applied as provided in Section 5.2 hereof.
(vi) The Local Agency will pay or cause to be paid when due the premiums for
all insurance pohcies required under this Subsection 6.2(n).
(o) State Not Liable. The State and its officers and employees shall not be liable to
the Local Agency or to any other Person whomsoever for any death, injury or damage that may
result to any Person or property by or from any cause whatsoever in, on, about or relating to the
Property.
Article VII
EVENTS OF DEFAULT; REMEDIES
Section 7.1 Agency Event of Default. Each of the following shall constitute an
"Agency Event of Default" hereunder:
(a) Failure by the Local Agency to pay or cause to be paid any Agency Rent Payment
required to be paid hereunder within ten (10) Business Days of the respective Agency Rent
Payment Date;
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51498334.1
(b) Failure by the Local Agency to observe or perform any covenant, agreement, term
or condition on its part to be observed or performed hereunder, other than as set forth in
paragraph (a) above, for a period of thirty (30) days after written notice from the State Treasurer
or the Fiscal Agent to the Local Agency specifying such failure and requesting that it be
remedied; provided, however, that such period shall be extended for not more than sixty (60)
days if such failure cannot be corrected within such period, and the corrective action is
commenced by the Local Agency within such period and diligently pursued until the failure is
corrected;
(c) If any statement, representation, or warranty made by the Local Agency in this
Financing Lease or in any writing delivered by the Local Agency pursuant hereto or in
connection herewith is false, misleading, or erroneous in any material respect;
(d) If the Local Agency's interest under this Financing Lease or any part hereof shall
be assigned, sublet or transferred other than as provided herein, either voluntarily or by operation
of law;
(e) If the Local Agency shall abandon or vacate the Property; and
(f) Inability of the Local Agency to generally pay its debts as such debts become due,
or admission by the Local Agency, in writing, of its inability to pay its debts generally, or the
making by the Local Agency of a general assignment for the benefit of creditors, or the
institution of any proceeding by or against the Local Agency seeking to adjudicate it as bankrupt
or insolvent, or seeking liquidation, winding -up, reorganization, reimbursement, adjustment,
protection, relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or for
appointment of a receiver, trustee, or other similar officer of it or any substantial part of its
property, or the taking of any action by the Local Agency to authorize any of the actions set forth
above in this Section 7,1(d).
(g) If an event of default shall occur under any Additional Financing Lease
Agreement.
Notwithstanding the foregoing provisions of this Section 7.1, if by reason of force
majeure the Local Agency is unable in whole or in part to carry out the covenants, agreements,
terms and conditions on its part contained in this Financing Lease, the Local Agency shall not be
deemed in default during the continuance of such inability. The term `force majeure' means the
following: acts of God; strikes; lockouts or other industrial disturbances or disputes; acts of
public enemies; orders or restraints of any kind of the government of the United States of
America or any of its departments, agencies or officials, or of its civil or military authorities;
orders or restraints of the State or of any of its departments, agencies or officials or civil or
military authorities of the State; wars, rebellions, insurrections; riots; civil disorders; blockade or
embargo; landslides; earthquakes* fires; storms; droughts; floods; explosions; or any other cause
or event not within the control of the Local Agency.
The State Treasurer, with the prior written consent of the Fiscal Agent, may, at its
election, waive any default or Agency Event of Default and its consequences hereunder and
51498334.1
annul any notice thereof by written notice to the Local Agency to such effect, and thereupon the
respective r ghts of the Parties hereunder shall be as they would have been if such default or
Agency Event of Default had not occurred.
Section 7.2 Rights of State Treasurer Following Agency Default Event. Whenever an
Agency Event of Default hereunder shall have occurred and be continuing, the State shall have
the following rights and remedies:
(a) Continuation, Reentry and Reletting. The State may continue this Financing
Lease in full force and effect, and (i) collect rent and other amounts as they become due
hereunder, (ii) enforce every other term and provision hereof to be observed or performed by the
L ocal Agency, and (iii) exercise any and all rights of entry and reentry upon the Property. In the
event that the State does not elect to terminate this Financing Lease in the manner .provided
pursuant to paragraph (b) of this Section, the Local Agency agrees to observe and perform all
terms and provisions herein to be observed or performed by it, and, if the Property is not relet, to
pay the full amount of the rent and other amounts due hereunder for the term of this Financing
L ease, or, if the Property or any part thereof is relet, to pay any deficiency that results therefrom,
in each case at the same time and in the same manner as otherwise provided herein, and
notwithstanding any reentry or reletting by the State, or suit in unlawful detainer or otherwise
brought by the State for the purpose of effecting such re-entry or obtaining possession of all or
any part of the Property. Should the State elect to re-enter or obtain possession of all or any part
of the Property, the Local Agency hereby irrevocably appoints the State as the Local Agency's
agent and attorney -in -fact (i) to relet the Property, or any part thereof, from time to time, either
in the name of the State or otherwise, upon such terms and conditions and for such use and
period as the State may determine in its discretion, (ii) to remove all persons in possession
thereof and all personal property whatsoever situated upon the Property, and (iii) to place such
personal property in storage in any warehouse or other suitable place for the Local Agency in the
county in which such personal property is located, for the account of and at the expense of the
L ocal Agency. The Local Agency shall be liable for, and hereby agrees to pay the State, the
State s costs and expenses in connection with reentryof the Property, removal and storage of any
personal property, and reletting of the Property. The Local Agency hereby agrees that the terms
of this Financing Lease constitute full and sufficient notice of the right of the State Treasurer to
reenter and relet the Property or any part thereof without effecting a surrender or termination of
this Financing Lease. Termination of this Financing Lease upon an Agency Event of Default
shall be effected solely as provided in .paragraph (b) of this Section. The Local Agency further
waives any right to, and releases, any rental obtained by the State upon reletting in excess of the
rental and other amount.; otherwise due hereunder
(b) Termination. The State may terminate this Financing Lease, but solely upon
written notice by the State Treasurer to the Local Agency of such election. No notice to pay
rent, notice of default, or notice to deliver possession of the Property or of any part thereof, nor
any entry or reentry upon the Property or any part thereof by the State Treasurer, nor any
proceeding in unlawful detainer or otherwise brought by the State Treasurer for the purpose of
effecting such reentry or obtaining possession, nor any other act shall operate to terminate this
Financing Lease and no termination of this Financing Lease on an account of a Master
Financing Lease Event of Default shall be or become effective by operation of law or acts of the
51498334.1
Parties hereto or otherwise, unless and until such notice of termination shall have been given by
the State Treasurer. The Local Agency hereby agrees that no surrender of the Property or any
part thereof, nor any termination of this Financing Lease by the Local Agency shall be valid or
effective in any manner or for any purpose whatsoever unless such notice of termination shall
have been given by the State Treasurer. Upon such termination, the State may (i) reenter the
Property or any part thereof and remove all persons in possession thereof and all personal
property whatsoever situated upon the .Property, and (ii) to place such personalproperty in
storage in any warehouse or other suitable place for the Local Agency in the county in which
such personal property is located, for the account of and at the expense of the Local Agency.
Upon such termination, the Local Agency's right to possession of the Property shall terminate,
and the Local Agency shall sun ender possession thereof to the State. In the event of such
termination, the Local Agency shall remain liable to the State for damages in an amount equal to
the rent and other amounts that would have been due hereunder for the balance of the term
hereof, less the net proceeds, if any, of any reletting of the Property or any part thereof by the
State subsequent to such termination, after deducting the expenses incurred b) the State in
connection with any such reentry, removal and storage of personal property, and reletting. The
State shall be entitled to collect damages from the Local Agency on the respective Agency Rent
Payment Dates, or alternatively, the State Treasurer may accelerate the Local Agency's
obligations under this Financing Lease and recover from the Local Agency (i) the worth at the
time of award of the unpaid rental which had been earned at the time of termination, (ii) the
worth at the time of award of the amount by which the unpaid rental which would have been
earned after the termination until the time of award exceeds the amount of such rental loss that
the Local Agency proves could have been reasonably avoided, (iii) the worth at the time of
award by which the unpaid rental for the balance of the term of this Financing Lease after the
time of award exceeds the amount of rental loss that the Local Agency proves could reasonably
have been avoided, and (iv) any other amount necessary to compensate the State for all the
detriment proximately caused by the Local Agency's failure to perform its obligations hereunder,
or which in the ordinary course would be likely to result therefrom,including but not limited to
the State's expenses in connection with reentry of the Property, removal and storage of any
personal property, and reletting of the Property. The worth at the time of award shall be
computed using a discount rate equal to the composite Agency Interest Component of the unpaid
Agency Rent Payments.
(c) Other Remedies. In addition to the other remedies set forth in this Section, upon
the occurrence and continuance of an Agency Fvcnt of Default, the State shall be entitled to
proceed to protect and enforce the rights vested in them by this Financing Lease or by law. The
terms and provisions of this Financing Lease and the duties and obligations of the Local Agency
hereunder, and the officers and employees thereof shall be enforceable by the State Treasurer by
an action at law or in equity, for damages or for specific performance, or for writ of mandate, or
by other appropriate action, suit or proceeding in any court of competent jurisdiction. Without
limiting the generality of the foregoing, the State shall have the right to bring the following
actions:
(i) Accounting By action or suit in equity to require the Local Agency and
its officers and employees to account as the trustee of an express trust;
51498334.1
(ii) Injunction. By action or suit in equity to enjoin the violation of the rights
of the State Treasurer.
(iii) Mandate, By writ of mandate or other action, suit or proceeding at law or
in equity to enforce the State Treasurer's rights against the Local Agency and its officers
and employees, and to compel the Local Agency to perform and carry out its duties and
obligations under the law and its covenants and agreements with the State Treasurer as
provided herein.
In the event that the State shall prevail in any action, suit or proceeding brought to
enforce any of the terms of provisions of this Financing Lease, the Local Agency shall be liable
for the reasonable attorneys' fees of the State Treasurer in connection therewith.
The Local Agency hereby waives any and all claims for damages caused or which may
be caused by the State Treasurer in reentering and taking possession of the Property or any part
thereof as provided herein, and all claims for damages that may result from the destruction of or
injury to the Property or any part thereof, and all claims for damages to or loss of any personal
property that may be in or upon the Property.
Section 7.3 No Remedy Exclusive; Non -Waiver. No remedy conferred upon or
reserved to the State hereunder or under applicable law is intended to or shall be exclusive, and
every such remedy shall be cumulative and shall be in addition to every other remedy given
under this Financing Lease or now or hereafter existing at law or in equity. No delay or
omission to exercise any right or remedy accruing upon a default or an Agency Event of Default
hereunder shall impair any such right or remedy or shall be construed to be a waiver of such
default or Agency Event of Default, but any such right or remedy may be exercised from time to
time and as often as may be deemed necessary or expedient. In order to exercise any remedy
reserved to the State Treasurer hereunder, it shall not be necessary to give any notice other than
sueh notice as may be required hereunder, A waiver by the State Treasurer of an> default or
Agency Event of Default hereunder shall not constitute a waiver of any subsequent default or
Agency Event of Default hereunder, and shall not affect or impair the rights or remedies of the
State Treasurer in connection with any such subsequent default or Agency Event of Default.
No acceptance of less than the full amount of a rental payment due hereunder shall
constitute an accord and satisfaction or compromise of any such payment unless the State
Treasurer specifically agrees to such accord and satisfaction or compromise in writing.
Section 7.4 Default by State. .Anything herein to the contrary notwithstanding, the
State shall not be . in default in the observance or performance of any of the covenants,
agreements, terms or conditions to be observed or performed by it hereunder unless and until the
State shall have failed to observe or perform such covenant, agreement, term or condition for a
period of sixty (60) days after written notice by the Local Agency to the State Treasurer
specifying such failure and requesting that it be remedied; provided, however, that such period
shall be extended for such additional time as shall be reasonably required to coneet such failure
if corrective action is commenced by the State within such period and diligently pursued until the
failure is corrected.
5144.1
Article VIII
MISCELLANEOUS PROVISIONS
Section 8.1 Indemnification of State and the Corporation. To the extent permitted by
law, the Local Agency hereby releases the State and the Corporation from, agrees that the State
and the Corporation shall not be liable for, and agrees to indemnify and hold the State and the
Corporation and their respective directors, officers, officials, employees, and agents harmless
from, any liability for any loss or damage to property or any injury to or death of any person that
may be occasioned by any cause whatsoever arising out of the ownership or operation of the
Property or thedesign acquisition, construction, financing or refinancing thereof To the extent
permitted by law, the Local Agency agrees to indemnify and hold the State and the Corporation
and their respective directors, officers, officials, employees, and agents harmless from any
losses, costs, charges, expenses (including reasonable attorneys' fees), judgments and liabilities
incurred by it or them, as the case may be, in connection with any action, suit or proceeding
instituted or threatened in connection with the transactions contemplated by this Financing Lease
or the exercise of rights or the performance of duties of the State or the Corporation under this
Financing Lease, the Master Financing Lease of the other Series 2016A Agreements, except to
the extent caused by the gross negligence or willful misconduct of such indemnified party. The
indemnification provided in this Section 8.1 shall survive the final payment of the Agency Rent
Payments and the termination of this Financing Lease for any reason.
Section 8.2 Term. If on 1, 20V (the "Scheduled Termination Date"), all
amounts due hereunder shall not have been paid or the payment thereof duly provided for
pursuant to Section 4 4 hereof, then the term of this Financing Lease shall be extended until ten
(10) days after all amounts due hereunder shall have been paid or the payment thereof so
provided for, except that the term of this Financing Lease shall in no event be extended more
than five (5) years beyond the Scheduled Termination Date. If prior to the Scheduled
Termination Date, all amounts due hereunder shall have been paid or the payment thereof so
provided for, the term of this Financing Lease shall end ten (10) days thereafter or ten (10) days
after written notice by the Local Agency to the State Treasurer, whichever is earlier.
Notwithstanding the foregoing, .the payment of all amounts due hereunder shall not result in the
termination of this Financing Lease prior to the scheduled termination of the Site Lease.
Section 8.3 Termination. The Local Agency agrees, upon the termination or
expiration of this Financing Lease, to quit and surrender the Property (i) in the same good order,
condition and repair as the same was in at the time of commencement of the term hereunder,
except for acts of God and reasonable wear and tear, that affect the condition of the Property;
and (ii) free and clear of all leases, occupancies, liens and encumbrances, other than those
existing as of the date hereof or subsequently created in accordance herewith. The Local Agency
agrees that any permanent improvements and structures existing upon the Property at the time of
such termination or expiration of this Financing Lease shall remain thereon. The Local Agency
shall thereafter execute, acknowledge and deliver to the State Treasurer such instruments of
further assurance as in the reasonable opinion of the State Treasurer are necessary or desirable to
confirm the State Treasurer's leasehold right, title and interest in and to the Property.
Section 8.4 Notices to Agency. The notice address for the Local Agency shall be as
set forth in the Notice of Intent.
51498334.1
STATE OF WASHINGTON )
COUNTY OF KING )
ss.
I certify that I know or have satisfactory evidence that ELLEN L. EVANS is the person
who appeared before me, and said person acknowledged that she signed this instrument, on oath
stated that she was authorized to execute the instrument and acknowledged it as the Deputy State
Treasurer Debt Management of the STATE OF WASHINGTON to be the free and voluntary act
of such party for the uses and purposes mentioned in tht. instrument.
Dated:
(Use this space for notarial stamp/seal)
Print Name
(Signature of Notary)
(Legibly Print or Stamp Name of Notary)
Notary public in and for the state of Washington, residing at
My commission expires
51498334.1
N-i
STATE OF WASHINGTON )
) ss.
COUNTY OF MASON )
I certify that I know or have satisfactory evidence that is
the person who appeared before me, and said person acknowledged that [s]he signed this
instrument, on oath stated that [s]he was authorized to execute the instrument and acknowledged
it as of MASON COUNTY, WASHINGTON to be the free and
voluntary act of such party for the uses and purposes mentioned in the instrument.
Dated:
Print Name
(Signature of Notary)
(Legibly Print or Stamp Name of Notary)
Notary public in and for the state of Washington, residing at
My commission expires
(IJse this space for notarial stamp/seal)
N-ii
51498334.1
EXHIBIT A
NOTICE OF INTENT
EXHIBIT C
LEGAL DESCRIPTION
All that portion of the West Half (W 1/2) of the Northeast Quarter (NE 1/4) of Section Two (2),
Township "I wenty (20) North, Range Four (4) West, W.M., lying Westerly of a line particularly
described as follows:
BEGINNING at a point on the South line of said West Half (W 1/2) of the Northeast Quarter
(NE 1/4) which is 890 feet West of the Southeast corner thereof; thence north 2°43' East, 2250
feet, more or less, to a point on the North line of said West Half (W 1/2) of the Northeast Quarter
(NT 1/4) and the terminus of the herein described line,
EXCEPTING therefrom right-ol way for Dayton -airport County Road.
o. 09900.
EXHIBIT B
CERTIFICATE DESIGNATING AUTHORIZED AGENCY REPRESENTATIVE
EXHIBIT D
AGENCY RENT PAYMENTS
[see attached]
Transaction No. 0144- -
LOCAL AGENCY SITE LEASE, SERIES 2016A
by and between
MASON COUNTY, WASHINGTON, as lessor
and the
WASHINGTON FINANCE OFFICERS ASSOCIATION, as lessee
Dated as of March 31, 2016
51498342.1 LOCAL SITE LEASE
Annex 4
Certificate Designating Authorized Agency Representatives
I, Terri Jeffreys, Chair of the Board of County Commissioners of Mason County (the "Local Agency"),
hereby certify that, as of the date hereof, pursuant to Resolution No. /1 i/6, the following individuals are each an
"Authorized Agency Representative," as indicated by the title appended to each signature, that the following
individuals are duly authorized to execute and deliver the Local Agency Financing Agreement to which this
Certificate is attached as Exhibit C, and all documentation in connection therewith, including but not limited to the
Personal Property Certificate(s) attached thereto as Exhibit B, that the signatures set forth below are the true and
genuine signatures of said Authorized Agency Representatives and that pursuant to such resolution two of the three
following signatures are required on each of the aforementioned documents in order to consider such documents
executed on behalf of the Local Agency:
inter, Budget Manager
Jens fer B ; 'erle, Public Works Finance Manager
Dated this 16th day of February, 2016.
Te i Jeffreys, Chair
Mason Cou ty Board of Commissioners
SUBSCRIBED AND SWORN TO before me this day of February, 2016.
By
NOTARY PUBLIC in and for the State of
Washington, residing at:
Printed Name:
My Commission Expires:
OFFICE OF THE
MASON COUNTY PROSECUTING ATTORNEY
MICHAEL K. DORCY
MASON COUNTY PROSECUTOR
February 11, 2016
Ellen Evans, Deputy State Treasurer
Lease Purchase Program
Office of the State Treasurer
P.O. Box 40200
Olympia, Washington 98504-0200
P.O BOX 639
521 N FOURTH STREET
SHELTON, WASHINGTON 98584
PHONE: (360) 427-9670 ext. 417
FAX: (360) 427-7754
Re: State of Washington Certificates of Participation, Series _2016A
Dear Ms. Evans:
We represent Mason County with respect to the above -referenced financing (the
"Certificates"). In connection with the execution and delivery by Mason County of the Local
Y
Ag enc Financing Lease, enclosed herewith is an executed copy of our opinion letter dated as of
the date of initial delivery of the Certificates (the "Dated Date"). You are to hold the opinion letter
in escrow until the Dated Date, at which time, unless you are otherwise instructed by me in writing,
the opinion letter may be considered released and shall become effective.
Please contact me with any question.
•
Mason County Prosecuting Attorney
MICHAEL K. DORCY
Mason County Prosecuting Attorney
521 N. Fourth / P.O. Box 639
Shelton, WA 98584
Ph: 360-427-9670 / Fax: 360-427-7754
Closing Date
Mason County
411 North 5th Street
Shelton, Washington 98584
State of Washington
Office of the State Treasurer
P.O. Box 40200
Olympia, Washington 98504-0200
Washington Finance Officers Association
1200 Fifth Avenue, Suite 1300
Seattle, Washington 98101-115
Re: State of Washington Certificates of Participation, Series 2016A (the "Certificates")
Ladies and Gentlemen:
Real property
•
[I/We] have acted as counsel to Mason County (the "Local Agency") in connection with the execution and delivery
by the Local Agency of (i) the Local Agency Site Lease, dated as of the date of initial delivery of the Certificates
(the "Local Agency Site Lease"), by and between the Washington Finance Officers Association (the "Corporation")
and the Local Agency and (ii) the Local Agency Financing Lease, dated as of the date of initial delivery of the
Certificates (the "Local Agency Financing Lease") by and between the state of Washington (the "State") and the
Local Agency. As such counsel, [I am/we are] of the following opinions:
1. Resolution number , approving the execution and delivery of the Local Agency Site Lease
and the Local Agency Financing Lease, was duly adopted by the governing body of the Local Agency on
February 16, 2016 at a meeting of such governing body duly called and held in conformity with the law.
2. The Local Agency Site Lease and the Local Agency Financing Lease have been duly authorized,
executed and delivered and, assuming the due authorization, execution and delivery by the other parties
thereto, constitute legal, valid and binding obligations of the Local Agency, enforceable in accordance with
their terms, subject only to bankruptcy, insolvency, moratorium, arrangement, reorganization and similar
laws affecting creditors' rights, applicable equitable principles and the application of judicial discretion in
appropriate cases.
[I/We] understand that agency rent payments to be made by the Local Agency under the Local Agency Financing
Lease will constitute a portion of the source of payment and security for base rent payments to be made by the State
to the Corporation under a Master Financing Lease between the State and the Corporation and that certificated
interests in such base rent payments will be offered to purchasers thereof by means of an official statement prepared
by the State. [I/We] have neither reviewed nor participated in the preparation of such official statement and express
no opinion regarding the adequacy or accuracy (under federal securities laws or otherwise) of any information
presented therein.
MICHAEL K. DORCY
Mason County Prosecuting Attorney
Incumbency Certificate
I, Karen Herr, County Auditor of the County of Mason, Washington, do hereby certify that the
following is a true and correct listing of the Board of County Commissioners of Mason County and their
terms of office:
Terri Jeffreys January 1, 2015-2018
Tim Sheldon January 1, 2013-2016
Randy Neatherlin January 1, 2013-2016
Dated this 1 - of February, 2016
Karen He i , County Auditor
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