HomeMy WebLinkAboutCAG2001-0557 - Amendment - #1 - King County - Borden Chemical Loan Agreement - 03/28/2003 � l
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AMENDMENT TO LOAN AGREEMENT
This Amendment, dated for reference purposes ,V , 2003, is entered into by
and between CITY OF KENT, a Washington municipal corporation, hereinafter called
the`Borrower" and KING COUNTY, a political subdivision of the State of Washington
(hereinafter the "Lender"),
AMENDMENT RECITALS
In February of 2001, the City of Kent, a Washington municipal corporation(hereinafter
the `Borrower") and King County, a political subdivision of the State of Washington
(hereinafter the"Lender"), entered into a Loan Agreement related to property known as
the Borden Chemical Plant in Kent, Washington The parties also executed a Promissory
Note for $9,000,000 00 on February 9, 2000
This amendment (the"Amendment") to the Loan Agreement modifies the recitals, terms,
conditions and covenants set forth in that Loan Agreement A complete copy of the
Loan Agreement is attached to this Amendment and identified as Attachment 1
The purpose of this Amendment is 1)to ensure that the Agreement meets the
requirements set forth in Community Development Block Grant Program (hereinafter
"CDBG") Regulations at 24 CFR Part 570 503(b) to constitute a subrecipient agreement
for acquisition of real property, and 2) to ensure that the use of the real property acquired
with funds provided under this Agreement is consistent with the national objective for the
CDBG Program specified at 24 CFR Part 570 208(a)(4)
In consideration for this Amendment to Loan Agreement, King County agrees to accept a
Substitute Promissory Note with the same terms as the Promissory Note referenced
above, except that the rate of interest on the Note will be 2% after June 30, 2002 and a
upon receipt of the Substitute Promissory Note agrees to cancel the February 9, 2000
Promissory Note
AMENDMENTS
The Borrower and Lender agree to the following amendments to the Agreement
(in) The Loan Agreement shall be re-named Subrecipient Loan Agreement
(2) The RECITALS provision of the Agreement, is hereby amended as follows
Paragraph A is hereby amended as follows.
The phrase "multi-family housing"is deleted from the second sentence
1
(3) ARTICLE V of the Agreement, BORROWER'S LOAN COVENANTS, is hereby
amended as follows
Paragraph 5 2 is hereby amended as follows
52 Change to Protect
(a) There shall be no material change to the Project without the prior written
approval of the lender and, to the extent that such approvals may be required,
the appropriate governmental authorities
(b) In the event Borrower wishes to undertake a housing activity on the property
acquired with the loan proceeds, Borrower must execute a subrecipient
agreement with Lender prior to undertaking the activity.
Paragrrah 5 3 is hereby amended as follows
5.3 Compliance with Laws. Borrower's use of the proceeds of the Loan and
the project shall comply with all applicable laws, ordinances, rules and
regulations, and executive orders of federal, state, county or municipal
governments or agencies, including, but not limited to the following
Public Law 88-352,which is title VI of the Civil Rights Act of 1964 (42
United States Code et seq ) and regulations at 24 CFR Part 1,
Public Law 90-284, which is the Fair Housing Act (42 United States Code
3601-3620),
Executive Order 11063, as amended by Executive Order 12259 (3 CFR,
1959-1963 Comp ,p 652, 3 CFR, 1980 Comp ,p 307) and regulations at 24
CFR Part 107,
Section 109 of the Housing and Community Development Act of 1974, as
amended, and regulations at 24 CFR Part 8 and 24 CFR Part 146,
Section 110(a) of the Housing and Community Development Act of 1974, as
amended, and regulations at 24 CFR Part 70;
Section 202(a) of the Flood Disaster Protection Act of 1973 (42 United States
Code 4106) and regulations at 44 CFR Parts 59 through 79,
The Uniform Relocation and Real Property Acquisition Policies Act of 1970
(42 United States Code 4601-4655) and regulations at 49 CFR Part 24,
Section 104(d) of the Housing and Community Development Act of 1974, as
amended;
24 CFR Part 5, and
those provisions of 24 CFR Part 85 and OMB Circular A-87 that are
specified at 24 CFR Part 502(a)
Paragraph 5 9 is hereby revised to read as follows-
Program Income Borrower shall return to Lender all CDBG Program
Income, as defined at 570 500 (a), and including the following
(i) principal and interest payments,
(n) any additional proceeds that may be due from the borrower's disposition
by sale or long-term lease of the property purchased or improved with CDBG
funds, as noted in Paragraph 7 16 below, and
(in) repayment of any amounts specified in Paragraph 5 14
Paragraph 5 10 is hereby deleted in its entirety
Paragraph 5 12 is hereby deleted in its entirety
Paragraph 5 13(a) is hereby amended as follows
(a) Borrower, Private Developer and any subsequent owners of the Property shall
require in the lease with each Tenant a provision requiring the Tenant to provide
documentation regarding the specific job titles and number of permanent full-time
equivalent lobs to be created, and the household size and annual household
income of persons subsequently hired for those lobs The information shall be
provided in a format approved by Lender Exhibit D, King County Job Creation
Summary Form, and Exhibit E, King County Employee Income Verification
Form, both of which are attached and incorporated by this reference, are the
current acceptable formats Borrower, Private Developer and any subsequent
owners of the Property shall use HUD income guidelines in effect at the time of
hiring Such income guidelines shall be obtained from Lender
The following Paragraph 5 13(c) is hereby mcgMorated as follows:
(c) Borrower shall include the requirement set forth in Subparagraph (a)to
Paragraph 5 13, above, as a condition of transfer of the ownership of the Property
to the Private Developer Such condition shall be set forth in a covenant running
with the Property in favor of Lender that must be recorded at the time of closing
The covenant may be extinguished with Lender's prior written consent upon
completion of the Project Completion of the project shall be defined in Section
717
Paragraph 5 13(d) is hereby deleted in its entirety
Paragraph 5 14 is hereby amended as follows
Borrower shall repay to lender an amount equal to at a minimum (1) the
interest rate subsidy which shall be defined as the difference between lender's
loan interest rate and the Borrower's normal cost of borrowing funds as of
February 9, 2001, less the loan fee and the cost of the letter of credit plus (it)
additional funds if any calculated as follows the current fair market value of
the Property less any portion attributable to expenditures of non-CDBG
funds, and less any principal and interest payments made pursuant to the Note
if any of the following occurs-
(a) Borrower falls to sell, lease or transfer the Property to a Private Developer
within 173 months of February 9, 2000;
(b) The Private Developer fails to (1)secure financing, (2) obtain all necessary
construction permits, and (3) commence construction of the Project within
179 months of February 9, 2000;
(c) Borrower fails to provide documentation (as stated above)to the Lender
evidencing that a minimum of 51% of the permanent full time equivalent lobs
created were filled by persons from low- and moderate-income households
within 203 months of February 9, 2000,
(d) Once the minimum 51% achieved per subparagraph (c) above, borrower fails
to continue to use the real property in accordance with the CDBG national
objectives in 570 208 (a) (4)through the date of project completion defined at
Section 7 17, or
(e) Borrower transfers any portion of the Property and fails to record a covenant
as required under Section 5.13(c) _
Para rah 5 17 is hereby amended as follows-
(a) The Borrower shall maintain accounts and records, including personnel,
property, financial, and project records and other such records as may be
deemed necessary by the Lender to ensure proper accounting for all funds
provided under this Agreement and compliance with all terms and conditions
set forth in this Agreement
(b)Records required to be maintained in subsection (a) above shall be
maintained for a period of six (6) years after the completion of the Project
Completion of the Project is defined in Paragraph 7 17
(c) The Borrower shall inform the Lender in writing of the location, if
different from the Borrower address set forth in this Agreement, of the
aforesaid books, records, documents, and other evidence and shall notify the
Lender in writing of any changes in location within ten (10) working days of
any such relocation
(d) Exceptions to the six (6) year retention period are as follows Records that
are the subject of audit findings shall be retained by Borrower until such
findings have been resolved
(e) Financial records shall identify adequately the source and application of
all funds provided under this Agreement, in accordance with the provisions
of 24 CFR Part 85, Subpart C Financial Administration, and the U S Office
of Management and Budget Circular A-87. These records shall contain
information pertaining to authorizations, obligations, unobligated balances,
assets, liabilities, outlays, and income
(f) The Borrower's record keeping with respect to real property acquired with
funds provided under this Agreement must comply with the Uniform
Relocation Assistance and Real Property Acquisition Policies Act of 1970
and regulations at 49 CFR Part 24
(g) The Borrower agrees to maintain racial, ethnic,persons with disabilities,
single female head of household, single male head of household, household
income, and gender data showing the extent to which these categories of
persons have participated in, or benefited from, the Project
(h) The Borrower shall maintain documentation of the affirmative action
measures the Borrower has taken to overcome prior discrimination if a court
or the U S Department of Housing and Urban Development has found that
the Borrower has previously discriminated against persons on the grounds of
race, color,national origin or sex in administering a program or activity
funded in whole or in part with CDBG funds pursuant to 24 CFR Part 121.
(4)ARTICLE VII of the Agreement, MISCELLANEOUS, is hereby amended as follows-
Paragraph 7 13 is hereby amended as follows:
7.13 Conflict of Interest The Borrower covenants that no officer, elected
official, employee, appointed officials, consultant, or agent of the Borrower
who exercises any functions or responsibilities in connection with the Project
shall have any person financial interest, direct or indirect, in this Agreement
The Borrower shall take appropriate steps to assure compliance with this
provision and the requirements set forth in 24 CFR Part 570.611.
The following new Parag_ra_ph 7 15 is hereby incoWorated as follows
7.15 Termination for Convenience In accordance with 24 CFR Part 85.44,
this Agreement may be terminated by the Lender, in whole or in part, for
convenience.
The following new Paragraph 7 16 is hereby incoMorated as follows
7.16 Reversion of Assets Upon completion of the project as defined in
paragraph 7 17 the Borrower shall transfer to the Lender any CDBG funds
provided under this Agreement and on hand at the time of tennmation and
any accounts receivable attributable to the use of CDBG funds provided
under this Agreement Borrower agrees that real property purchased with
CDBG funds will be used in accordance with the CDBG national objectives
in 570 208 until at least the date of project completion defined at Section
7 17, or borrower will pay to lender additional funds if any calculated as
follows the current fair market value of the property less any portion
attributable to expenditures of non-CDBG funds, and less any principal and
interest payments already made pursuant to the Note In calculating the
amount of principal and interest payments to subtract for this purpose, the
actual amounts paid in the past shall be adjusted to reflect the present value
of those payments
The following new paragraph 7.17 is hereby incoMorated as follows:
7 17 Duration of Agreement Except as otherwise provided herein, this
Agreement shall be in effect until project completion, defined as five years
after the date on which the Borrower provides the Lender acceptable
documentation of the total number of jobs created and that 51% were filled
by persons from low- or moderate-income households
(5) EXHIBIT A to the Agreement, "Description of Project" is hereby amended as
follows
Description of Project
Creation of Jobs
The Project shall include mixed commercial uses ranging as follows
Office 55,000 to 75,000 sq feet
Retail 80,000 to 125,000 sq feet
Entertainment 50,000 plus sq. feet
Parking. 650-800 spaces
Based upon the above estimates, it is projected the project will create 480 new
permanent full-time jobs - 220 new office jobs and 260 new retail/entertainment jobs
The majority of the jobs created will be non-supervisory positions that do not require
a higher education, and thus will be made available to and filled by individuals from
low-to-moderate income households
♦ Of the office jobs, approximately 40% (88)will be clerical or other non-supervisory
jobs not requiring a higher education.
♦ Of the retail/entertainment jobs, approximately 70% (182) will be either non-
supervisory retail clerks or non-supervisory theater/entertainment associates, neither
of which require a higher education
The number of jobs actually created will depend upon the economic climate at the
time of development, and the specific business tenants However, a minimum of 51%
of the actual number of jobs created will be made available to and filled by persons
from low- and moderate-income households
Protect Schedule
Milestone Target Date
1) Loan closing 2/9/01
2) Private Developer selected through 10/01
RFP
3 Note matures 8/3/03
4) Property conveyed to Private Initial and largest takedown to be
Developer in phases or takedowns completed in 2003, final takedown to
be completed no later than 6/30/14
5) Private Developer secures Within 6 months of completion of step
financing, construction/development 4 for each phase. Final phase
permits and starts construction construction begun no later than
12/30/14.
6) Individual Businesses identified; Within 18 months of step 5 for each
borrower provides to lender a listing of phase Final phase no later than
specific jobs by job title, and total 6/30/16,
number of permanent full-time
equivalent jobs, to be created
7) Borrower provides documentation Documentation for each phase due
to Lender evidencing the number and within 6 months of Step 6 for each
proportion of the jobs created that phase Documentation for total due
were filled by persons from low- and with last phase, no later than 12/30/16
moderate-income households.
Standard to demonstrate compliance
with 24 CFR Part 570 208(a)(4) and
Paragraph 5 13 is 51% or more of the
totallobs created when all phases are
completed and combined
8) Protect completion 5 years from satisfactory completion of
step 7 for the final phase
(6) Exhibit D to the Agreement is hereby replaced with Revised Exhibit D, which is
attached to this Amendment and identified as Attachment 2
(7) Exhibit E to the Agreement is hereby replaced with Revised Exhibit D, which is
attached to this Amendment and identified as Attachment 3
IN WITNESS WHEREOF, Borrower and Lender have executed this Amendment as of
the date first written above by and through their duly authorized representatives
LENDER: KING COUNTY BORROWER CI F {FNT
By By:
f6fR& Sims,
King County Executive
Approved as to form.
Norm Maleng Tom Brubaker
King County Prosecuting Attorney Kent City Attorney
By' By. 4L4AA&4 Gt• _
Deput se utmg Attorney
STATE OF WASHINGTON )
) ss
COUNTY OF KING )
I certify that I know or have satisfactory evidence that the persons appeanng before me
and making this acknowledgment are the persons whose true signatures appear on this document
tb-
On ism day of Q ,200 3 before me personally appeared
yap u tam an me known to be the
and respectively, of THE CITY OF KENT,the
municipal ibrporation that execut6ft the within and foregoing instrument, and acknowledged the
said instrument to be the free and voluntary act and deed of said municipal corporation, for the
uses and purposes therein mentioned, and on oath stated that they were authorized to execute said
instrument and that the seal affixed, if any,is the corporate seal of said municipal corporation
WITNESS my hand and official seal here xed the day and year first 14ove written.
*N S:tim VONNo Public in an for the State of Washington
residing at GZJ
# :0 My commission expires {-Z
Sp WAS.* I
[type or print notary name)
ATTACHMENT
ORIGINAL LOAN AGREEMENT
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement"), dated for reference purposes
February_, 2001, is entered into by and between CITY OF KENT, a Washington municipal
corporation, hereinafter called "Borrower," and KING COUNTY, a Washington municipal
corporation,hereinafter called"Lender."
RECITALS
This Agreement is entered into upon the basis of the following facts and circumstances:
A With the use of the Loan proceeds described below, Borrower intends to purchase
that certain parcel of property known as Borden Chemical Plant located at 421-608 ]n Avenue
North,Kent, Washington (the "Property). Thereafter it is anticipated that a private developer(the
"Private Developer") will be selected through a request for proposal procedure to develop the
Property as an urban town center, mixed-use development which shall include office, retail,
entertauunent space, multi-family housing, parking and public space. It is anticipated that the
acquisition will result in the creation of jobs where at least 51% of the jobs, computed on a full time
equivalent basis, involve the employment of low- or moderate-income persons, all as more fully
described in Exhibit "A' attached hereto and made a part hereof(hereinafter called the "Project").
B. The Economic Development Program of the Office of Regional Policy and Planning
of Lender is responsible within King County for the receipt and disbursement of Community
Development Block Grant monies made available to Lender by the United States Department of
Housing and Development (hereinafter called "HUD"), pursuant to the Housing and Community
Development Act of 1974, as amended, and the federal regulations promulgated thereunder
(hereinafter collectively called the"Act"). Lender seeks to maximize the use of such monies consis-
tent with both Lender's and block grant program objectives
C. The acquisition of the Property and the subsequent development of the Project by a
private developer will result in the increase of a minimum of 258 new full time equivalent jobs
which will provide public benefits and qualify for Community Development Block Grant monies
under 24 CFR§570 203. Lender has agreed to lend Community Development Block Grant monies
to Borrower(the"Loan")to assist its acquisition of the Project.
D The Loan from Lender to Borrower will have no negative effect on any projects
approved in Lender's Community Development Block Grant programs.
E The Loan shall be evidenced by this Agreement and by Borrower's Promissory Note
("Note") in the form attached hereto as Exhibit "B" and secured by an unconditional, irrevocable
Direct Pay Letter of Credit, payable upon demand ("Direct Pay Letter of Credit") in the form
attached hereto as Exhibit "C" (The Note and this Agreement are collectively referred to herem as
the "Loan Documents"). It is the intent of the parties that Lender will draw against the Direct Pay
Letter of Credit to repay the indebtedness owed under the Note
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F. Lender is willing to make the Loan to Borrower for the purposes hereinabove set
forth, all upon the terms and conditions herein set forth
G Lender makes no commitment to future support and assumes no obligation for future
support of the activities contracted for herein, except as expressly set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals and the covenants
and conditions,representations and warranties contained herein,the parties hereto agree as follows:
ARTICLE I
THE LOAN
1.1 The Loan. In reliance upon Borrower's representations and warranties, and subject
to the terms and conditions herein and in the Loan Documents, Lender hereby agrees to loan
Borrower a sum of money not to exceed NINE MILLION AND NOl100 DOLLARS
($9,000,000 00) for the purposes set forth herein, which funds shall be received by Lender from
HUD and from no other source (the "Loan'). Borrower shall have the right to receive Loan funds
from Lender only pursuant to the terms and conditions of this Agreement and in accordance with
the Act,and then only to the extent Community Development Block Grant funds are made available
to Lender by HUD. Should anticipated sources of revenue become unavailable to Lender for use in
the Economic Development Program, Lender shall immediately notify Borrower in writing and
Lender will be released from all contracted liability for that portion of the Agreement covered by
funds not yet received by Lender.
1.2 Acquisition Financing Only. The Loan is only to provide financing used by
Borrower for the acquisition of the Project. The Promissory Note evidencing the Loan is to be paid
off on or before its maturity date from such sources as may be necessary to pay the Loan in full,
including,without limitation, from the Direct Pay Letter of Credit.
1.3 Loan Documentation and Security. The Loan will be evidenced by this Agreement
and by the Note The Loan will be secured by the Direct Pay Letter of Credit
ARTICLE II
BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lender to make the Loan, Borrower represents and warrants as follows,
which representations and warranties shall be true and correct as of the execution hereof and shall
survive the execution and delivery of this Agreement,the Note and the Direct Pay Letter of Credit:
21 Organization of Borrower: Authority to Enter into Agreement. Borrower is a
municipal corporation, duly formed and vandly in existence pursuant to the laws of the State of
Washington and authorized to transact business in the State of Washington. Borrower has the right
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and power to own the Project and Borrower has full power and authority to enter into this
Agreement,to borrow money as contemplated herein and to execute and carry out the provisions of
the Loan Documents The execution, delivery and performance of this Agreement and the Loan
Documents have been duly authorized by all necessary corporate action, and no other action of
Borrower is required for the execution, delivery and performance of this Agreement or the Loan
Documents This Agreement and the Note constitute or, if not yet executed or delivered,will when
so executed and delivered constitute, valid and binding obligations of Borrower, each enforceable in
accordance with their respective terms.
2.2 Nondiscrimination.
A. During the performance of this Loan Agreement, Borrower shall not
discriminate on the basis of race, color,sex,religion,national origin, creed,marital status, age or the
presence of any sensory,mental or physical handicap in employment or application for employment
or in the administration or delivery of services or any other benefits under this Loan Agreement.
Borrower shall comply fully with all applicable federal, state and local laws, ordinances, executive
orders and regulations which prohibit discrimination. These laws include, but are not lirmted to,
Chapter 49 60 of the Revised Code of Washington, and Titles VI and VII of the Civil Rights Act of
1964.
B. If Borrower fails to comply with King County Ordinance 4528, as amended,
such failure shall be deemed a violation of the Ordinance and a material breach of this Loan
Agreement. Such breach shall be grounds for cancellation, termination or suspension of this Loan
Agreement, in whole or in part, and shall be grounds for Lender to demand full repayment of the
Loan.
23 No Litigation. There are no actions, suits or proceedings pending, or to the
knowledge of Borrower threatened against or affecting it or the Project in any court at law or in
equity, or before or by any governmental or municipal authority which might adversely affect the
ability of Borrower to perform its obligations hereunder or under any of the Loan Documents to
which Borrower is a party
24 Covenants,Zoning and Codes Borrower will comply with all applicable
environmental statutes and regulations to be complied with in connection with its ownership of the
Project. To Borrower's knowledge, all permits, consents, approvals or authorizations by, or
registrations, declarations, withholding of objections or filings with any governmental body
necessary in connection with the valid execution, delivery and performance of this Agreement, or
presently necessary for the ownership and operation of the Project, have been obtained, are valid,
adequate and in full force and effect or will be obtained prior to the commencement of any activities
for which a permit, consent, approval or authorization is necessary. To Borrower's knowledge,
operation of the Project will in all respects conform to and comply with all applicable zoning,
environmental protection,use and building codes, laws,regulations and ordinances.
25 Approval of Protect. The description of the Project set forth in Exhibit "A" hereto is
a general description of the Project The description of the Project is satisfactory to Borrower and
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has been approved by Borrower and, to Borrower's knowledge, the Project has been or will be
approved as required by all governmental bodies or agencies having jurisdiction.
26 Compliance With Documents. As of the date hereof and for so long as the Loan
Documents remain in effect, Borrower is and will remain in full compliance with all of the terms
and conditions of this Agreement, the Loan Documents, and no event of default has or shall have
occurred and be continuing which, with the lapse of time or the giving of notice, or both, would
constitute such an event of default under the foregoing
27 Incorporation of Representations and Warranties. The request by the Borrower for
any advance of Loan proceeds under this Agreement shall constitute a certification by the Borrower
that the aforesaid representations and warranties are true and correct as of the date of such request.
ARTICLE III
CONDITIONS PRECEDENT TO LOAN CLOSING
Lender's obligation to enter into and perform its duties under this Agreement shall be subject
to the full and complete satisfaction of the following conditions precedent:
3 1 Documents Lender shall have received and approved fully executed originals of
each of the following documents which shall have been duly authorized, executed (and, where
appropriate, acknowledged), and delivered by the parties thereto: this Agreement, the Promissory
Note, the Direct Pay Letter of Credit, and any and all other documents as Lender may deem
reasonably necessary with respect to the Loan.
3.2 Evidence of Authority Lender shall have received evidence satisfactory to it that
Borrower and the persons signing on behalf of Borrower have the capacity and authority to execute
and deliver Loan Documents on behalf of Borrower
33 Insurance.
(a) Borrower shall carry and maintain general public Lability insurance against
claims for bodily injury, personal injury, death or property damage occurring or ansmg out of the
ownership and/or operation of the Project, which insurance shall cover such claims as may be
occasioned by any act, omission, or negligence of the Borrower or its officers, agents,
representatives, assigns or servants relating to the Project. The limits of liability insurance, which
shall be increased from time to time as deemed necessary by Lender, with the approval of Borrower
which shall not be unreasonably withheld, shall not be less than One Million Dollars ($1,000,000)
combined single limit personal injury and property damage insurance. The insurance required
above shall be issued by an msurance company or companies authorized to do business within the
State of Washington and must be acceptable to Lender Lender shall be specifically named as an
additional insured on all such policies, and all such policy or policies shall be primary to any other
valid and collectible insurance.
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(b) Certificate or certificates or other evidence satisfactory to Lender evidencing
the existence and terms and conditions of all insurance required above shall be delivered to Lender
prior to the initial advance of Loan funds. The policy or policies of insurance required to be
maintained in accordance with this Agreement shall not be canceled or given notice of non-renewal
nor shall the terms or conditions thereof be altered or amended without thirty (30) days' written
notice being given to Lender.
ARTICLE IV
CONDITIONS PRECEDENT TO LOAN ADVANCE
Lender's obligation to make the initial advance of Loan funds pursuant to the terms
hereof shall, in addition to compliance with the terms of Article III hereof, be subject to receipt of
the following documents and satisfaction of the following conditions precedent:
(a) Receipt by Lender of any other documents and assurances as it may
reasonably request which are required by HUD or any federal, state or county regulatory agency
which requests Lender to provide such documents or assurances.
(b) Lender shall have received and have in its possession sufficient Community
Development Block Grant funds to fund the draw request of Borrower.
(e) Receipt by Lender of a written acknowledgment from the issuer of the Direct
Pay Letter of Credit adjusting the amount of the Direct Pay Letter of Credit upward by an amount
sufficient to cover the disbursement, plus two month's interest which will accrue on said
disbursement.
ARTICLE V
BORROWER'S LOAN COVENANTS
Borrower covenants and agrees as follows:
51 General. From and after the date hereof and so long as any amount remains unpaid
on the Promissory Note, or for so long as any commitment exists to extend credit hereunder,
Borrower covenants and agrees that it will
(a) Promptly pay principal and interest pursuant to the Note as and when the
same becomes due and payable,
(b) Preserve and keep in full force and effect its existence as a municipal
corporation and its ownership of the Project, and
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(c) Obtain and maintain the insurance required herein.
52 Change to Project. So long as any portion of the Loan proceeds remains unpaid,
there shall be no material change of the Project without the prior written approval of Lender and,
to the extent that such approvals may be required,the appropriate governmental authorities_
5.3 Compliance with Laws. Borrower's use of the proceeds of the Loan shall comply
with all applicable laws, ordinances, rules and regulations and executive orders of federal, state,
county or municipal governments or agencies now in force or which may be enacted hereafter.
5.4 Call Provision. In addition to, and not in any way to be deemed any limitation upon,
Lender's right to demand repayment of the Loan at any time, Lender may call the Loan immediately
due and payable if at any time during the term of the Loan without Lender's prior written approval:
(a) Borrower sells, transfers or assigns all or substantially all of the Project,
whether voluntarily or involuntarily,or by the operation of law; or
(b) There occurs any default under the terms of the Promissory Note, this Loan
Agreement or any of the Loan Documents which is not remedied in full within any applicable
curative period provided herein or therein
Upon the occurrence of any of the foregoing, Lender may declare an Event of
Default hereunder and exercise its rights and remedies pursuant to Article VI.
5.5 Inspections Lender and its representatives shall have the right at all reasonable
times during regular business hours (and at any time in the event of an emergency) to inspect the
Project to determine that the same is in conformity with the Agreement and all laws, ordinances,
rules and regulations applicable to Borrower's use of the Loan funds. Lender shall have the further
right, from time to tune and upon reasonable notice to Borrower, to inspect Borrower's books and
records relating to Borrower's use of the Loan funds. Without limiting the foregoing, Borrower
shall permit Lender to examine and copy all books, records and other papers relating to Borrower's
use of the Loan funds to insure Borrower's compliance with the Act and applicable provisions of 24
CFR Part 570,
5.6 Notify Lender of Litigation or Complaints Borrower shall promptly notify Lender
in writing of all litigation or possible litigation affecting Borrower or any part of the Project which
might materially and adversely affect Borrower's performance of its obligations under the Note or
the Loan Documents, and of all complaints or charges made by any govemmental authority
affecting the Project or Borrower which may require changes in the Project.
57 Indemnify Lender Borrower shalt indemnify and hold Lender, its elected and
appointed officials and any employees thereof, harmless from all liability for any actual or alleged
damage or injury of whatsoever nature arising out of or in any way connected with the Project or
arising out of Borrower's breach of the provisions of this Agreement, including the cost of defense
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thereof using counsel approved by Lender. Lender may commence, appear in or defend any action
or proceeding purporting to affect the rights, duties or liabilities of the parties hereto or the Project,
and Borrower shall pay all of the Lender's costs and expenses incurred thereby on demand. This
section shall survive execution, delivery and performance of this Agreement, the Note and the Loan
Documents.
5.8 Further Assistance. Borrower will at any time and from time to time upon request of
Lender take or cause to be taken any action, execute, acknowledge, deliver or record any further
documents,opinions, or other instruments or obtain such additional insurance as Lender is required
to do or obtain by HUD or other federal, state or county regulatory agency.
5.9 Use of CDBG Funds.
(a) To the greatest extent feasible,Borrower shall purchase supplies and services
for activities under this Agreement from vendors and contractors whose businesses are located in
King County and served by Community Development Block Grant funded activities or owned in
substantial part by project area residents. (See Section 3, Housing and Urban Development Act of
1968, as amended).
(b) Funds loaned to Borrower hereunder shall not be used directly or indirectly
to employ, award contracts to, or otherwise engage the services of, or fund any contractor or
subrecipient during any period of debarment, suspension, or placement in ineligibility status under
the provisions of 24 CFR Part 24
5.10 Procurement Standards
(a) If Borrower is a"for profit"borrower,it shall comply with Federal Executive
Orders 11625, 12432 and 12138, 24 CFR Part 85 36(e) If Borrower is a "nonprofit" borrower, it
shall comply with OMB Circular No.A-110,Attachment O,Paragraph g Failure of the Borrower to
comply with any of the applicable requirements set forth within the foregoing regulations shall be a
breach of this Agreement.
(b) In advertising for employees, goods or services for the activities under this
Agreement, "for profit" borrowers shall comply with 24 CFR Part 85 36(e) and "non profit"
borrowers shall comply with Attachment 0 to OMB Circular 110, Procurement Standards,
paragraph 9, Contracting with Small and Minority Firms, Women's Business Enterprise and Labor
Surplus Area firms. Borrower shall be considered to be in compliance with this provision if at least
one of the following steps is taken: (1) advertise in a minority publication m addition to publication
of general circulation; (2) utilize a minority contractors bidding center, (c) utilize the King County
Affirmative Action Office Certified MinoritylWomen's Business Enterprise Directory and King
County Plan Centers
(c) In awarding contracts pursuant to thus Agreement, Borrower shall comply
with all applicable requirements of local and state law for awarding contracts, including, but not
limited to, procedures for competitive bidding, contractor's bonds, and retained percentages (RCW
7
46247\04306\215342 V02 DM.
60.28.010) In addition, "for profit" borrowers shall comply with the requirements of 24 CFR Part
85.36(h) Bonding Requirements, and "non profit" borrowers shall comply with the U. S. Office of
Management and Budget Circular A-102, relating to bonding, insurance and procurement standards,
and with Executive Order 11246 regarding nondiscrimination in bid conditions for projects over
$10,000 00.
5.11 Intentionally Deleted.
5.12 Administrative Requirements. Borrower shall comply with the policies, guidelines
and requirements of 24 CFR Part 85.20, Standards for Financial Management.
5 13 Job Creation Monitorine and Documentation Lender is loaning $9,000,000 to
Borrower for the Project. This money has been granted to Lender by the United States
Department of Housing and Urban Development through its Community Development Block
Grant (CDBG) program. Therefore, Borrower's activity must comply with CDBG regulations.
Lender has qualified this activity under the national objective criterion for job creation and
retention. This requires that (1) at least 5 1% of the permanent, full-time equivalent jobs created
be held by persons from low and moderate income households, defined by HUD as households
with annual incomes less than 80% of the area median, and (2) a minimum of 258 total
permanent, full-time equivalent jobs be created
Borrower, Private Developer, any subsequent owners of the Project and tenants within the
Project ("Tenants") are responsible for compliance with the above national objective criterion.
To this end
(a) Borrower, Private Developer, any subsequent owners of the Project shall
require that all Tenants complete a King County Job Creation Summary Form
attached hereto as Exhibit "D" and by tlus reference incorporated herein and
require each new permanent employee hired as a result of this Project to
complete the King County Employee Income Verification Form attached
hereto as Exlubit "E" and by this reference incorporated herein.
(b) Borrower shall set forth the requirements of the national objective criterion
that at least 51% of the permanent, full-time equivalent jobs to be created by
the Project be held by persons from low and moderate income households and
that a mimmum of 258 total permanent, full-time equivalent jobs be created
by the Project, as well as Exhibits "D" and "E", in its Request for Proposals
(RFP) to sell, lease or transfer the Property. Borrower shall submit draft
language to Lender for approval prior to issuing an RFP.
(c) Borrower shall include these national objective criterion requirements and
Exhibits "D" and "E" in the deed transferring the Property to the Private
Developer as covenants running with the Property in favor of Lender
8
46247\04306\215342 V02 DNL
(d) The Private Developer and any subsequent owner of the Project shall include
Exhibits"D"and "E", and the requirement to complete said forms, in all leases with
individual Tenants.
5.14 Repayment of Subsidy. Borrower shall repay to Lender the interest rate subsidy
(defined as the difference between Lender's loan interest rate and the Borrower's normal cost of
borrowing funds at the closing of the Loan, less the loan fee and cost of the Letter of Credit) if any of
the following occurs
(a) Borrower fails to sell, lease or transfer the Property to a Private Developer
within 60 months of the date of the Note
(b) The Private Developer fails to (1) secure financing, (2) obtain all necessary
construction permits, and (3) commence construction of the Project within 66
months of the date of the Note.
(c) Borrower fails to provide documentation (as stated above) to the Lender that a
minimum of 258 total permanent full time equivalent jobs were created and that
51% of the permanent full time equivalent jobs were held by persons from low
and moderate income households within 96 months of the date of the Note.
5.15 Compliance with Endangered Species Act. The United States Department of Housing
and Urban Development (HUD), through its Community Development Block Grant (CDBG) program,
has granted this Loan to Lender Consequently, pursuant to 16 US C §1536 of the Endangered
Species Act (ESA), HUD must insure that any action it funds is not likely to jeopardize the continued
existence of any endangered or threatened species or result in the destruction or adverse modification
of any endangered or threatened species' critical habitat. Lender has been informed that species listed
as threatened pursuant to the ESA occur in the general area of the Property. Borrower has disclosed to
Lender that it intends to demolish the existing buildings on the Property prior to repayment of the
Loan In order to analyze any possible effects the demolition activities might have on listed species,
Borrower must prepare a Biological Assessment that will analyze whether the demolition activities
might have an effect on listed species. AHer the Borrower has prepared the Biological Assessment,
Borrower and Lender will consult with the Services on this Project. Section 7(d) of the ESA prohibits
the commitment of irreversible or irretrievable resources by the Borrower or Lender until the Section 7
consultation process has been concluded. Therefore, Borrower, its agents and/or the seller of the
Property may not engage in any demolition, grading, clearing, or construction activities on the
Property prior to the completion of the Section 7 consultation. If Borrower, its agents and/or the seller
of the Property engage in any demolition, grading, clearing or construction activities on the Property
prior to the completion of the Section 7 consultation, Lender will demand immediate repayment of the
Loan, including any interest that is due.
5 16 Compliance with the National Historic Preservation Act If at any time during the
construction phase, any contractors for the Project encounter archaeological materials, Borrower
covenants and warrants to Lender that a professional archaeologist will be called immediately to
evaluate the materials and develop a mitigation plan if appropriate This covenant shall also be
9
46247W4306\215342 V02 DNL
i
included in the RFP and the deed transfemng the Property to the Private Developer as a covenant
running with the land
517 Retention of Records Records required in connection with this Agreement shill be
retained for a period of the later of three (3) years after termination of this Agreement or five (5)
years from the date of initial disbursement of Loan funds,except that records that are the subject of
audit findings shall be retained until such findings have been resolved.
ARTICLE VI
DEFAULT AND REMEDIES
61 Event of Default The occurrence of any of the following events shall constitute an
Event of Default hereunder-
(a) Any default by Borrower in the repayment of any indebtedness owing to
Lender for any purpose or reason,which indebtedness is not paid when due
(b) Any breach by Borrower of any of the non-monetary covenants and
conditions of this Agreement, which breach is not cured to Lender's satisfaction within ten (10)
working days from the occurrence thereof, provided, that in the event of a non-monetary breach or
default by Borrower which is outside of the control of Borrower and which cannot be cured within
said ten (10) working days, Borrower shall have commenced to cure its breach or default within
said ten (10)working days and thereafter diligently proceeds to cure its breach or default. Notwith-
standing anything to the contrary contained herein, any breach or default by Borrower of any
applicable laws,ordinances,rules,regulations or executive orders applicable to Lender,Borrower or
Borrower's use of the Loan funds shall immediately constitute an Event of Default hereunder.
(c) Any representation, warranty or disclosure made to Lender by Borrower
proves to be materially false or misleading as of the date when made, whether or not such
representation or disclosure appears in this Agreement.
(d) Any material deviation in the operation of the Project without the approval
of Lender which deviation is not corrected or substantially corrected within ten (10) working days
after receipt of written notice thereof from Lender to Borrower
(e) A petition in bankruptcy or for reorganization or for an arrangement under
any bankruptcy or insolvency law or for a receiver or trustee for any of Borrower's property is filed
by or against Borrower which is not dismissed within forty-five(45)days, or if Borrower makes an
assignment for the benefit of creditors or becomes insolvent or unable to pay its debts as they
mature or any attachment or execution is levied against a substantial portion of the property of
Borrower and is not discharged within forty-five(45)days
(f) There occurs any event which in Lender's reasonable judgment materially
adversely affects (i)the ability of Borrower to perform any of its obligations hereunder or under any
10
46247\04306k275342 V02 DNL
of the Loan Documents, including, without limitation,the occurrence of any event of dissolution or
termination of Borrower; (ii) the business or financial condition of Borrower; (ili) the operations or
value of the Project; or(iv)compliance with the Act.
(g) A petition in bankruptcy or for reorganization or for an arrangement under
any bankruptcy or insolvency law is filed by or against Borrower within mnety-one (91) days after
Borrower has repaid the Loan in full In such an event, Lender shall have the absolute right to draw
upon the Direct Pay Letter of Credit to the extent of any payments made within runety-one (91)
days of filing a petition in bankruptcy or for reorganization or any arrangement under any
bankruptcy or insolvency law, regardless of the fact that Borrower has previously paid the Loan in
full, provided that within a reasonable time thereafter Lender shall pay over to the trustee or
bankruptcy estate the funds previously paid to Lender by Borrower to the extent that the Direct Pay
Letter of Credit is drawn upon under this subparagraph. Notwithstanding the foregoing, in the event
Borrower has repaid the Loan in full from funds received from a third party, institutional lender,
then Lender shall immediately return the Direct Pay Letter of Credit to the issuer thereof
62 Remedies Upon the occurrence of an Event of Default, Lender may, in addition to
any other remedies which Lender may have hereunder or under the Loan Documents or by law, at
its option and without prior demand or notice take any or all of the following actions:
(a) Immediately terminate any further advance of Loan funds hereunder
(b) Declare the Note immediately due and payable and commence collection
proceedings against the Direct Pay Letter of Credit
All remedies of Lender provided for herein and in any other Loan Document are
cumulative and shall be in addition to all other rights and remedies provided by law. The exercise
of any right or remedy by Lender hereunder shall not in any way constitute a cure or waiver of
default hereunder or under any other Loan Document or invalidate any act done pursuant to any
notice of default, or prejudice Lender in the exercise of any of its rights hereunder or under any
other Loan Documents unless, in the exercise of said rights, Lender realizes all amounts owed to it
under such Loan Documents.
ARTICLE VII
MISCELLANEOUS
7.1 No Waiver No waiver of any default or breach by Borrower hereunder shall be
implied from any failure by Lender to take action on account of such default if such default persists
or is repeated, and no express waiver shall affect any default other than the default specified in the
waiver and shall be operative only for the time and to the extent therein stated Waivers of any
covenant, term or condition contained herein shall not be construed as a waiver of any subsequent
breach of the same covenant, term or condition The consent or approval by Lender to, or of, any
I]
46247\04306U15342 V 02 DNL
act by Borrower requiring further consent or approval shall not be deemed to waive or render
unnecessary the consent or approval to,or of, any subsequent similar act
72 Successors and Assigns This Agreement 2s made and entered into for the sole
protection and benefit of Lender and Borrower, their successors and assigns, and no other person or
persons shall have any right of action hereunder The terms hereof shall inure to the benefit of the
successors and assigns of the parties hereto; provided, however, that the Borrower's interest
hereunder cannot be assigned or otherwise transferred without the prior consent of Lender.
7.3 Notices. Any notice, demand or request required hereunder shall be given in writing
at the addresses set forth below by personal service or registered or certified, fast class mail, return
receipt requested. The addresses may be changed by notice to the other party given in the same
manner as provided above If notice is given by mail, it shall be deemed received on the earlier of
(i) receipt as shown on the return receipt, or(ii)three(3)days after its deposit in the U.S. mail.
If to Borrower. City of Kent
220 4"' Avenue South
Kent, Washington 98032-5895
Attn
If to Lender: Office of Regional Policy and Planning
King County
King County Courthouse
516 Third Avenue,Room 402
Seattle, Washington 98104
Attn• Manager,
Economic Development Program
7.4 Time. Time is of the essence hereof
75 Amendments. No amendment,modification,or termination of any provisions of this
Agreement or of any of the Loan Documents shall in any event be effective unless the same shall be
in writing and signed by Lender and Borrower.
76 Headings. The article and section headmgs in no way define, limit, extend or
interpret the scope of this Agreement or of any particular article or section.
7.7 Number and Gender When the context in which the words are used in this
Agreement indicate that such is the intent, words in the singular number shall include the plural and
vice-versa. References to any one gender shall also include the other gender if applicable under the
circumstances
7.8 Validi . In the event that any provision of this Agreement shall be held to be
invalid, the same shall not affect in any respect whatsoever the validity of the remainder of this
Agreement.
12
46247\04306UI5342.V02 DNL
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement as of the
date first wntten above by and through their duly authorized representatives.
LENDER BORROWER
KING COUNTY, a Washington CITY OF KENT,
municipal corporation a Washington municipal corporation
. � r
By dr By-
Ron ims,
King County Executive
Approved as to form: Attest:
Norm Maleng,King County
Prosecuting Attorney
By.
Deputy Pilosecuting Attorney
14
46247\04306U15342 V02 DNL
STATE OF WASHINGTON )
ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that the persons appearing
before me and making this acknowledgment are the persons whose true signatures appear on this
document
Qn this!._ day _, i899, before me personally appeared
and to me known to be the
and respectively, of THE CITY
OF KENT he municipal corporation that executed the within and foregoing instrument, and
acknowledged the said instrument to be the free and voluntary act and deed of said municipal
corporation, for the uses and purposes therein mentioned, and on oath stated that they were
authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said
municipal corporation
WITNESS my hand and official seal hereto affixed the day and year first above
written.
+""t""'ti. No Pu 1 d for the State of Washington,
�N %wM residing at
s ♦ J�
My commission expires:
fit. Ayettt o [Type or Print Notary Name]
a W11O���`
(Use This Space for Notanal Seal Stamp)
15
4624"43061215342 V02 DNL
EXHIBIT"A"
Description of Project
Kent Urban Town Center Acquisition &Development Project
The City of Kent has completed a Commuter Rail Area Study. The Borden Chemical property is
the largest parcel addressed in the study The study and the City of Kent view the site as
underutilized land and providing the City with the opportunity to create an urban town center
mixed use development. The City's vision is for a mixture of uses ranging as follows-
Office 55,000 to 75,000 sq feet
Retail. 80,000 to 125,000 sq feet
Entertainment: 50,000 plus sq feet
Multifamily: 230 units (depending on configuration and size)
Parking: 650-800 spaces
Based upon the above estimates, it is projected the project will create, at a minimum, 258 new
jobs.
This type of development will create a new synergy in downtown Kent. The mixed-use
development on the Borden Chemical property will be a compliment to the current historic
downtown. The mix of retail will expand the market for downtown and meet some of the unmet
shopping needs of people who live, work and ride commuter rail in the town center. South of the
property is the planned location of the Kent Civic and Performing Arts Center and a 680 stall
parking garage The garage is a shared facility and these two facilities will be part of the whole
mixed-use development.
The planned redevelopment of the Borden Chemical property will provide for some public space.
The proposed concept could include a fountain or an entertainment Plaza. The plaza with many
other design elements is envisioned to tie the new development to the older historic downtown
area.
The City of Kent anticipates using approximately up to $9 million in CDIL funds to acquire the
Borden property. The balance of the purchase price ($12,078,300)will come from other sources.
The proceeds from the CDIL loan will be used for acquisition only. It is projected that a private
developer will be selected, through a RFP process, to purchase the property from the City of
Kent and develop the mixed use concept. It is expected that this selection process will take 18 to
24 months. Proceeds from the sale of the property to the private developer will be used to retire
the CDIL loan
4624704306X215342 V02 DNL
To meet the national objective of CDBG regulations as defined to Section 570 208(a)(4)
benefiting low- and moderate-income families through job creation, fifty-one percent (51%) or
132 jobs will be held by low-or moderate income persons.
2
46247%4306U15342 V02 DNL
EXHIBIT`B"
Promissory Note
46247\04306X215341 V02 DNL
PROMISSORY NOTE
$9,000,000.00
February
,2001
Seattle, Washington
FOR VALUE RECEIVED, the undersigned, CITY OF KENT, a Washington municipal
corporation,promises to pay to the order of KING COUNTY, a Washington municipal corporation,
at its Office of Regional Policy and Planning, King County Courthouse, 516 Third Avenue, Room
420, Seattle, Washington 98104, or such other place as the holder of tlus Note may from time to
time designate, the principal sum of NINE MILLION AND NO/100 DOLLARS ($9,000,000.00),
or so much thereof as may from time to time be outstanding hereunder, together with interest on the
unpaid balance of principal at the rate of four percent (4%) per annum, calculated on the basis of a
365-day calendar year. Interest shall be calculated for each day all or any part of the principal
balance hereof shall remain outstanding. This Note shall be payable as follows.
On the first(1") day of August, 2001, and on the first(I s)day of every sixth calendar month
thereafter,the undersigned shall pay to Lender all interest which has accrued during the previous six
calendar months hi the event interest is not paid when due, the undersigned shall be in default and
the interest that has not been paid when due shall be compounded by adding said unpaid interest to
the principal balance hereof and thereafter said unpaid interest shall bear interest at the same rate as
the unpaid balance hereof.
Notwithstanding the foregoing payment provisions to the contrary, the principal balance
outstanding hereon, together with all accrued and unpaid interest and any other sums due hereunder,
shall be due and payable in full on the earlier of(i) demand by the holder hereof(said demand to be
made as set forth below), (ii) sixty (60)days prior to the expiration of the Irrevocable Standby Letter
of Credit described in the Loan Agreement (the "Loan Agreement") of even date between the
undersigned and King County, and (iii)August 1, 2003. Notwithstanding the foregoing, the holder
of this Note shall have the absolute right to demand partial repayments of the principal balance of
this Note not more often than once per calendar week nor five (5) times per calendar month (said
demands to be made as set forth below). Demands for partial repayment may be made by the holder
of this Note when funds are needed by the holder of this Note to pay for regular block grant
activities.
Provided that the undersigned shall first give the holder of this Note thirty (30) calendar
days'prior notice, the indebtedness evidenced hereby may be prepaid in whole or in part from time
to time without premium or penalty
Should default be made in any payment when due or in the performance or observance of
any of the covenants and agreements of this Note, then, after the expiration of any applicable cure
period,if any, the whole sum of principal and interest shall become immediately due and payable at
the option of the holder Failure to exercise such option shall not constitute a waiver of the right to
exercise it in the event of a continuing or subsequent default
46247\04306\215341 V02 DNL
This Note is issued pursuant to and is entitled to the benefits of the Loan Agreement An
Event of Default under the Loan Agreement shall be deemed a default hereunder, whereupon the
holder may at its option declare all sums as are then outstanding hereunder immediately due and
payable This Note shall be secured by an unconditional Irrevocable Standby Letter of Credit,
payable upon demand, issued by a banking institution approved by the holder of this Note (the
"Irrevocable Standby Letter of Credit'), all as more fully set forth in the Loan Agreement.
Upon the sale, transfer or assignment, whether voluntary, involuntary or by operation of
law, of all or substantially all of the "Project" (described in the Loan Agreement), then at its sole
option the holder hereof may, by written notice to the undersigned, declare all sums as are then
outstanding hereunder to be immediately due and payable. Notwithstanding the foregoing, Maker
shall have the right to grant a deed of trust or mortgage in favor of the issuer of the Irrevocable
Standby Letter of Credit to secure Maker's obligations to the issuer in connection with its issuance
of the Irrevocable Standby Letter of Credit.
As set forth above, the holder of this Note may demand partial repayments of principal from
the undersigned for regular block grant activities. The holder of this Note shall make demand for
partial repayments of principal upon the undersigned, in writing, by delivering or mailing said
demand to the undersigned in the manner and at the address set forth in Section 7.3 of the Loan
Agreement. The partial repayment of principal shall be due and payable on or before ten (10) days,
excluding Saturdays, Sundays and legal holidays, from the date the undersigned receives or is
deemed to have received the demand. In the event the holder of this Note fails to receive a partial
repayment within said ten (10) day period, the holder of this Note shall have the right to draw upon
the Irrevocable Standby Letter of Credit without any fiirther condition.
As set forth above, this Note shall be due and payable in full upon demand. The holder of
this Note shall make demand upon the undersigned, in writing, by delivering or mailing said
demand to the undersigned in the manner and at the address set forth in Section 7.3 of the Loan
Agreement. All principal, accrued interest and other charges due under this Note or the Loan
Agreement shall be due and payable ten (10) days, excluding Saturdays, Sundays and legal
holidays, from the date the undersigned receives or is deemed to have received the demand and the
holder of this Note may,on said tenth(10)day or at any time thereafter, draw from the Irrevocable
Standby Letter of Credit all sums, including principal, accrued interest and other charges, necessary
to fully satisfy the Note.
Except for the demands described above, the undersigned hereby waives diligence, demand,
presentment for payment, and notice of whatever kind or nature Without discharging or many way
affecting the liability of the undersigned, the undersigned hereby consents to any and all extensions
of this Note as the holder hereof may in its sole discretion grant from time to time, to the release of
all or any part of the security for the payment hereof and to the release of any party liable for
repayment of the obligations hereunder
2
46247U04306\215341 V02 DNL
All payments due on this Note shall be payable in lawful money of the Umted States of
America at the time of payment, and shall be made to the holder at the address first hereinabove
indicated,or such other address as the holder may hereafter designate.
Tlus Note shall be governed by the laws of the State of Washington, except to the extent that
Federal laws may preempt the laws of the State of Washington.
In the event that this Note is placed in the hands of an attorney at law for collection after
maturity or upon default or in the event that proceedings at law or in equity are instituted in
connection herewith, or in the event that this Note is placed in the hands of an attorney at law to
enforce any of the rights or the agreements contained herein or in the Loan Agreement, the
undersigned shall pay all costs of the holder hereof in collecting or attempting to collect tlus Note or
protecting or enforcing such rights, including, without limitation, reasonable attorney's fees; and all
such amounts shall be deemed to be secured by, and may be drawn from, the Irrevocable Standby
Letter of Credit.
This Note and the Loan Agreement are by this reference subject to the limitation that in no
event shall interest or any other amount paid or agreed to be paid to King County for the use,
forbearance or detention of money to be advanced hereunder or pursuant to the Loan Agreement
exceed the highest lawful rate permissible under applicable usury laws If fulfillment of any
provision hereof or of the Loan Agreement shall be deemed by a court of competent and final
jurisdiction to violate any applicable usury restrictions, then Wso facto, the obligation to be fulfilled
shall be reduced to the lumt of such validity, and any amount received in excess of such limit shall
be applied to reduce the unpaid principal balance hereof and not to the payment of interest.
Time is of the essence of this Note and of each and every provision hereof.
IN WITNESS WHEREOF, the undersigned have executed this Promissory Note as of the
date first above written.
CITY OF KENT,
a Washington municipal corporation Attest:
By:
Its:
3
46247\04306\215341 V02 DNL
EXHIBIT"C»
Direct Pay Letter of Credit
4 61 4 7104 3 0WI5342 V02 J)NL
( bank. US BANK NATIONAL ASSOCIATION
INTERNATIONAL DEPARTMENT
1420 FIFTH AVENUE,9TH FLOOR
SEATTLE,WA 98101 U S A
PHONE 206-344-2398
FAX 206-344-5374
IRREVOCABLE STANDBY LETTER OF CREDIT
------------------------------
FEBRUARY 9, 2001
--------------------------------------------------------------------------------------------------------------------------
BENEFICIARY APPLICANT
KING COUNTY CITY OF KENT
OFFICE OF REGIONAL POLICY AND PLANNING 220 4T"AVE S
KING COUNTY COURTHOUSE KENT, WA 98032
516 THIRD AVE,ROOM 402
SEATTLE, WA 98104
---------------------------------------------------------------------------------------------------------------------------
LETTER OF CREDIT NUMBER SLCSSEA00665
AAAAAAAAAAAAAAA
-----------------------------------------------------------------------__-----------_-----`--_-------------------------------
EXPIRY DATE AUGUST 9-2003
AT OUR COUNTERS PRESENTLY LOCATED AT 1420 FIFTH AVENUE, 9TH
FLOOR, INTERNATIONAL DEPARTMENT, SEATTLE, WA, 98101 ON OR BEFORE
500PM
-------------------------------------------------------------------------------------------------------------------------
AMOUNT $9,060,000 00
NOT EXCEEDING NINE MILLION SIXTY THOUSAND AND 001100 U S DOLLARS
--------------- ---------------------------------------------------------------------------------------------------------------
WE HEREBY ISSUE THIS IRREVOCABLE STANDBY LETTER OF CREDIT AVAILABLE BY
YOUR DRAFT(S)DRAWN AT SIGHT ON U S BANK NATIONAL ASSOCIATION AND
ACCOMPANIED BY THE FOLLOWING DOCUMENTS
I BENEFICIARY'S CERTIFICATION BEARING A SIGNATURE PURPORTING TO BE FHAT OF
THE KING COUNTY EXECUTIVE OR DEPUTY KING COUNTY EXECUTIVE OR THE
FINANCE DIRECTOR OF KING COUNTY STATING "1, THE KING COUNTY EXECUTIVE
DEPUTY KING COUNTY EXECUTIVE OR THE FINANCE DIRECTOR OF KING COUNTY
(INDICATE TITLE),HEREBY CERTIFY THAT PURSUANT TO THE AGREEMENT BETWEEN
CITY OF KENT AND KING COUNTY DATED FEBRUARY 9, 2001 ("THE AGREEMENT"), AM
REQUESTING PAYMENT IN THE AMOUNT OF$ IN ACCORDANCE WITH THE
TERMS AND CONDITIONS OF THE AGREEMENT WHICH AMOUNT DOES NOT EXCEED
THE OUTS LANDING,UNDRAWN AMOUNT OF THE LETTER OF CREDIT I FURTHER
CERTIFY THAT THE BORROWER UNDER THE AGREEMENT HAS BEEN NOTIFIED BY
KING COUNTY OF THIS DRAWING IN ACCORDANCE WITH THE REQUIREMENTS OF THE
AGREEMENT '
2 THE ORIGINAL OF THIS LETTER OF CREDIT AND ANY SUBSEQUENT AMENDMENTS
PARTIAL OR COMPLETE DRAWINGS MAY BE MADE BY THE BENEFICIARY
THE BANK SHAI L RETURN T1IF ORIGINAL OF THIS LETTER OF CREDI T TO TIM
BENEFICIARY IN CONNECTION WITH ANY PARTIAL DRAWINGS THAT ARE PRESENTED
HEREUNDER THE AMOUNT OF FHE LETTER OF CREDIT SHALL BE REDUCED BY THE
AMOUNT OF EACH DRAFT PAID HEREUNDER
PHIS PAGE I FORAIS AN INTEGRAL PART OF LETTER OF CREDIT NO SLCSSEA00665
Wbank®
THIS LETTER OF CREDIT MAY BE EXTENDED BEYOND ITS CURRENT EXPIRATION DATE
ONLY BY FORMAL AMENDMENT FROM THE ISSUING BANK HOWEVER,THIS LETTER OF
CREDIT MAY BE CANCELED BY THE BENEFICIARY AT ANY TIME PRIOR TO ITS
EXPIRATION DATE UPON THE RETURN OF THE ORIGINAL LETTER OF CREDIT TO THE
ISSUING BANK ACCOMPANIED BY THE FOLLOWING STATEMENT
"THE UNDERSIGNED,THE KING COUNTY EXECUTIVE,KING COUNTY
DEPUTY EXECUTIVE OR THE FINANCE DIRECTOR OF KING COUNTY
(INSERT TITLE),HEREBY CERTIFIES THAT ALL OBLIGATIONS OF THE
BORROWER UNDER THE LOAN AGREEMENT DATED FEBRUARY 9,2001,
HAVE BEEN DISCHARGES IN FULL, AND LETTER OF CREDIT NO
SLCSSEA00665 IS HEREBY RETURNED TO THE ISSUING BANK FOR
CANCELLATION"
THIS STANDBY LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR
UNDERTAKING AND SUCH UNDERTAKING SHALL NOT IN ANY WAY BE MODIFIED,
AMENDED OR AMPLIFIED BY REFERENCE TO ANY DOCUMENTS OR INSTRUMENTS
REFERRED TO HEREIN OR IN WHICH THIS STANDBY LETTER OF CREDIT IS REFERRED TO
HEREIN OR IN WHICH THIS STANDBY LETTER OF CREDIT RELATES AND ANY SUCH
REFERENCE SHALL NOT BE DEEMED TO INCORPORATE HEREIN BY REFERENCE ANY
DOCUMENT OR INSTRUMENT
DRAFTS DRAWN UNDER THIS CREDIT MUST BEAR THE CLAUSE "DRAWN UNDER U S
BANK NATIONAL ASSOCIATION IRREVOCABLE STANDBY LETTER OF CREDIT NO
SLCSSEA00665"
PURSUANT TO U S LAW WE ARE PROHIBTTED FROM ISSUING,TRANSFERRING ACCEPTING
OR PAYING LETTERS OF CREDIT TO ANY PARTY OR ENTITY IDENTIFIED BY THE OFFICE
OF FOREIGN ASSETS CONTROL,U S DEPT OF TREASURY, OR SUBJECT TO THE DFNIAL OF
EXPORT PRIVILEGES BY THE U S DEPT OF COMMERCE
THIS CREDIT IS SUBJECT TO"THE UNIFORM CUSTOMS AND PRACTICE FOR
DOCUMENTARY CREDITS" (1993 REVISION)INTERNATIONAL CHAMBER OF COMMERCE
PUBLICATION NO 500
WE HEREBY ENGAGE WITH YOU THAT DRAFT(S)DRAWN AND/OR DOCUMENTS
PRESENTED UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS IRREVOCABLE
STANDBY LETTER OF CREDIT WILL BE DULY HONORED UPON PRESENTATION TO US
THE AMOUNT OF EACH DRAWING MUST BE ENDORSED ON THE REVERSE OF THIS CREDIT
BY THE NEGOTIATING BANK
U S BANK NATIONAL ASSOCIATION
INTERNATIONAL BANKING DIVISION
AUTHO ED SIGNATURE
Jane: Jo,,eman
Le",er es Creai>, Of-i-er
THIS PAGE 2 FORMS AN INTEGRAL PART OF LETTER OF CREDIT NO SLCSSEA00665
EXHIBIT"D"
King County Job Creation Summary Form
O
KING COUNTY JOB CREATION SUMMARY FORM
STORErFENANT
ADDRESS:
JOB TITLE/CATEGORY WAGE RATE
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
TOTALJOBSCREATED _
46247W4306\215342 V02 DNL
Signature Date
Name and Title
Thu is a confidential statement necessary to verify the need for public financial assistance for a business and is
2
4624T04306N2I5342.V02 DNL
EXHIBIT"E"
King County Employee Income Verification Form
KING COUNTY EMPLOYEE INCOME VERIFICATION FORM
STORE.
EMPLOYEE NAME
ADDRESS
Sex Male Female Job Title
Date ofButh ! / Salary/Wage $
How long employed
here. Years Months
A. Please circle Full Time Part Time If part time#hours per week
B.Please circle the number of people living at your residence. I FAMILY SIZE 11 2 3 4 5 6 7 8 410 more
C. Please circle the number below which best describes the income for your household for the last 12
months. In calculating total income,include all of the following sources that apply.
• Wages,salaries,bps,etc (covered by W-2) Total IRA distributions,taxable amount
• Dividend income Total pensions and annuities,taxable amount
• Taxable refunds,credits,or offsets of state and 0 Rental real estate,royalties,partnerships,
• Local income taxes a S corporations,trusts,etc
• Alimony received • Farm income(or loss)
• Business income(or loss) • Unemployment compensation
• Capital gain(or loss) • Social Security benefits,taxable amount
• Other gains or losses • Other income(specify source)
INCOME $0423 050 $50,201-$54 200
$23 051-$35 150 $54,201-$58 250
$35 151-$40,150 $58,251-$62,250
$40,151-$45,200 $62,251-$66,250
$45,201-$50200 $66,251 or more
The following Race/Ethnicity information is optional. It will be used to determare the employment/hiring
benefits of Project Name The information you provide will remain confidential and will not be made a part of your
permanent records
Please check the appmpnale box-
Afncan Amencan
Amencan IndtanMative American
Asian/Pacific Islander
46247U14306\215342 V02 DNL
Caucasian
Hi amc/Lahno
Other
I hereby certify all of the above to be true and correct
Signature Date
This is a confidential statement necessary to verify the need for public financial assistance for a business and u not
considered a public record THANK YOU FOR YOUR ASSISTANCE
2
46247\04306U15342 V02 DNL
� � a
ATTACHMENT 2
REVISED EXHIBIT D
KING COUNTY JOB CREATION SUMMARY FORM
STORE/TENANT
ADDRESS
JOB TITLE/CATEGORY WAGE RATE HOURS/WEEK
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
$ per
TOTAL JOBS CREATED Page 1 of 2
1 �
In this business hours per week is considered full-time
Signature Date
Print Name and Title
This is a confidential statement necessary to verify the need for public financial assistance for a business
and is not considered a public record THANK YOU FOR YOUR ASSISTANCE
Page 2 of 2
ATTACHMENT
REVISED EXHIBIT E
INCOME VERIFICATION FORM
FOR EMPLOYEES TAKING NEWLY-CREATED JOBS LISTED IN EXHIBIT D
STORE
EMPLOYEE NAME
ADDRESS
Sex Male Female Job Title
Date of Birth Sal (Wa e $
Head of How long employed in
Household? Yes No this job Months
A. Please check one: _Full Time _Part Time
If part time,how many hours per week?
B.Please circle the number of people living at your residence. HOUSEHOLD I 1 2 3 4 5 6 7 8 910 more
SIZE
C. Please circle the box below which best describes the income for your entire household for the last
12 months. In calculating total income,include all of the following sources that apply.
• Wages, salaries,tips,etc (covered by W-2) • Total IRA distributions,taxable amount
• Dividend income • Total pensions and annuities,taxable amount
• Taxable refunds, credits,or offsets of state and • Rental real estate,royalties,partnerships,
• Local income taxes • S corporations,trusts,etc
• Alimony received 0 Farm income(or loss)
• Business income(or loss) • Unemployment compensation
• Capital gain(or loss) 0 Social Security benefits,taxable amount
• Other gains or losses • Other income(specify source)
INCOME BOXES: $0438,100 $58,751-$63 100
$38 101-$43,500 $63 101-$67,450
$43 501-$48 950 $67 451-$71 800
$48 951-$54,400 $71,801 and above
$54,401-$58 750
Page 1 of 2
The following Race/Ethnicity information is optional. The federal government requires us to ask for
this information,but you do not have to answer this part if you do not wish to do so. The information
will be used to determine any additional impacts of the public funds that helped support this project The
information you provide will remain confidential and will not be made a part of your permanent records
Do you consider yourself Hispanic or Latino? _yes no
Please check the most appropriate cats or
Amencan Indian or Alaska Native
Asian
Black or African American
Native Hawaiian or Other Pacific
Islander
White
American Indian or Alaska Native AND
White
Asian AND White
Black or African American AND White
American Indian or Alaska Native AND
Black or African American
Other more than one race
I hereby certify all of the above to be true and correct
Signature Date
This income and race%thnicity statement is confidenttaL It is necessary only to verify the need for public
financial assistance for a business and is not considered a public record THANK YOU FOR YOUR
ASSISTANCE
Page 2 of 2