4b attach draftagreement
DRAFT DATED 10/30/15
REIMBURSEMENT AGREEMENT
Dated November 19, 2015
by and between
PORT OF SEATTLE, WASHINGTON
and
SUMITOMO MITSUI BANKING CORPORATION,
acting through its New York Branch,
relating to
Port of Seattle
Subordinate Lien Revenue Notes
(Commercial Paper)
Draft Copy of the POS_Reim_Agmt_3864080.01.13 (KLG).docx
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TABLE OF CONTENTS
SECTION HEADING PAGE
ARTICLE I DEFINITIONS .................................................................................................1
Section 1.01. Certain Defined Terms ...........................................................................1
Section 1.02. Accounting Terms and Determinations ...............................................10
Section 1.03. Rules of Construction ..........................................................................11
ARTICLE II ISSUANCE OF LETTER OF CREDIT AND PAYMENTS; TERM
LOANS ........................................................................................................11
Section 2.01. Issuance of Letter of Credit..................................................................11
Section 2.02. Drawings ..............................................................................................12
Section 2.03. Repayment of Drawings and Other Payments .....................................12
Section 2.04. Prepayment ..........................................................................................14
Section 2.05. Fees and Expenses ...............................................................................14
Section 2.06. Liability of Bank ..................................................................................14
Section 2.07. Other Agreements by the Issuer ...........................................................15
Section 2.08. Voluntary Termination.........................................................................15
Section 2.09. Security ................................................................................................15
Section 2.10. Payment on Non Business Days ..........................................................16
Section 2.11. Book Entries.........................................................................................16
Section 2.12. Extension of Stated Termination Date .................................................16
Section 2.13. Issuance Generally ...............................................................................17
Section 2.14. Stop Issuance Instructions; Final Drawing Notice...............................39
ARTICLE III TAXES; INCREASED COSTS ..........................................................................17
Section 3.01. Taxes ....................................................................................................17
Section 3.02. Increased Costs ....................................................................................18
ARTICLE IV CONDITIONS PRECEDENT ............................................................................20
Section 4.01. Resolution; Other Basic Documents ....................................................20
Section 4.02. Opinions ...............................................................................................21
Section 4.03. Events of Default, Representations and Warranties ............................21
Section 4.04 No Litigation ........................................................................................21
Section 4.05. No Material Adverse Change...............................................................22
Section 4.06. Certificate .............................................................................................22
Section 4.07. Payment of Expenses ...........................................................................22
Section 4.08. Ratings; CUSIP ....................................................................................22
Section 4.09. Registrar Certificate .............................................................................23
Section 4.10. No Change in Law ...............................................................................23
Section 4.11. Other Matters .......................................................................................23
ARTICLE V REPRESENTATIONS AND WARRANTIES ........................................................23
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Section 5.01. Organization and Authorization ...........................................................23
Section 5.02. Issuer Authority to Adopt or Execute and Deliver
Documents ...........................................................................................23
Section 5.03. Obligations Legal, Valid and Binding .................................................23
Section 5.04. No Legal Bar ........................................................................................24
Section 5.05. Consents ...............................................................................................24
Section 5.06. Litigation ..............................................................................................25
Section 5.07. Disclosure ............................................................................................25
Section 5.08. The Resolution and the Basic Documents ...........................................25
Section 5.09. Liens .....................................................................................................26
Section 5.10. No Proposed Legal Changes ................................................................26
Section 5.11. Environmental Matters.........................................................................26
Section 5.12. Sovereign Immunity.............................................................................26
Section 5.13. No Maximum Interest Rate ..................................................................26
Section 5.14. Security ................................................................................................27
Section 5.15. Anti-Terrorism Laws ..........................................................................27
Section 5.16. Margin Stock ........................................................................................27
Section 5.17. Tax-Exempt Status ...............................................................................28
Section 5.18. Parity Repayment .................................................................................28
ARTICLE VI COVENANTS ................................................................................................28
Section 6.01. Affirmative Covenants .........................................................................28
Section 6.02. Negative Covenants .............................................................................33
ARTICLE VII EVENTS OF DEFAULT, REMEDIES ................................................................36
Section 7.01. Events of Default .................................................................................36
Section 7.02. Remedies ..............................................................................................39
Section 7.03. Waiver of Remedies .............................................................................39
Section 7.04. Remedies Not Exclusive ......................................................................39
ARTICLE VIII MISCELLANEOUS ........................................................................................40
Section 8.01. Payments to the Bank...........................................................................40
Section 8.02. Right to Set-off ....................................................................................40
Section 8.03. Liability of the Bank ............................................................................41
Section 8.04. Indemnification ....................................................................................42
Section 8.05. Costs and Expenses ..............................................................................43
Section 8.06. Participants ...........................................................................................44
Section 8.07. Successors and Assigns........................................................................44
Section 8.08. Modification or Waiver of this Agreement ..........................................44
Section 8.09. No Waiver of Rights by the Bank; Cumulative Rights........................45
Section 8.10. Governing Law; Waiver of Jury Trial .................................................45
Section 8.11. Notices .................................................................................................45
Section 8.12. Counterparts .........................................................................................48
Section 8.13. Certificates, Etc. ...................................................................................48
Section 8.14. Severability ..........................................................................................48
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Section 8.15. Headings ..............................................................................................48
Section 8.16. Waiver of Rules of Construction .........................................................48
Section 8.17. USA PATRIOT Act Notice .................................................................48
Section 8.18. No Advisory or Fiduciary Relationship ...............................................49
EXHIBITS
EXHIBIT A FORM OF IRREVOCABLE DIRECT-PAY LETTER OF CREDIT
EXHIBIT B FORM OF REIMBURSEMENT NOTE
EXHIBIT C FORM OF CERTIFICATE OF ISSUER REGARDING NO EVENT OF DEFAULT
EXHIBIT D FORM OF STOP ISSUANCE INSTRUCTION
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REIMBURSEMENT AGREEMENT
This REIMBURSEMENT AGREEMENT (the "Agreement") is entered into November 19,
2015 by and between the PORT OF SEATTLE, WASHINGTON, a municipal corporation of the State
of Washington (the "Issuer") and SUMITOMO MITSUI BANKING CORPORATION, acting through its
New York Branch, and its successors and assigns (the "Bank").
WITNESSETH:
WHEREAS, pursuant to Resolution No. 3456, as amended, entitled "A RESOLUTION of
the Port Commission of the Port of Seattle, authorizing the sale of Subordinate Lien Revenue
Notes (Commercial Paper), in series from time to time in an aggregate principal amount not to
exceed $250,000,000, for the purpose of financing and refinancing capital improvements,
including refunding outstanding notes, within the Issuer, for working capital and for paying
maturing revenue notes of the same series and/or reimbursing one or more credit providers for
advances made therefor; providing a method of determining the dates, forms, terms, maturities,
and interest rates of each series of such notes; authorizing the execution and delivery of one or
more bank reimbursement notes; approving the form of and authorizing the execution, delivery
and performance of various agreements relating to said notes; and making certain other
covenants and agreements with respect thereto" (the "Resolution"), the Issuer has authorized the
issuance of its Port of Seattle Subordinate Lien Revenue Notes (Commercial Paper) (the
"Notes"); and
WHEREAS, the Issuer has requested the Bank to issue a Letter of Credit (as hereinafter
defined) to support the payment by the Registrar, when and as due, of the principal of and
interest on the Notes on their respective maturity dates; and
WHEREAS, the Bank is willing to issue an irrevocable direct-pay letter of credit in the
form attached as Exhibit A hereto (as the same may be amended from time to time, the "Letter of
Credit"), which the Bank has agreed to do subject to the terms and conditions set forth herein;
NOW, THEREFORE, to provide for and set forth the obligation of the Issuer to reimburse
the Bank for any drawings under the Letter of Credit, and in consideration of the mutual
promises contained herein and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Issuer and the Bank agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. As used in this Agreement and unless otherwise
expressly indicated, or unless the context clearly requires otherwise:
(a) All the agreements or instruments herein defined shall mean such
agreements or instruments as the same may from time to time be supplemented or
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amended or the terms thereof waived or modified to the extent permitted by, and in
accordance with, the terms thereof and of this Agreement.
(b) The terms "Issuer" and "Bank" shall have the meanings assigned to such
terms in the introductory paragraph of this Agreement and the terms "Resolution,"
"Notes," and "Letter of Credit" shall have themeanings assigned to such terms in the
recitals to this Agreement.
(c) Any term used herein and not otherwise defined shall have the meaning
assigned that term in the Resolution.
(d) The following terms shall have the following meanings (such meanings to
be equally applicable to both singular and plural forms of the terms defined):
"Accountant" shall mean the independent certified public accountant or a firm of
independent certified public accountants, or the Division of Municipal Corporations of the State
Auditor's office of the State, retained or otherwise engaged to audit the financial statements
required to be delivered hereunder.
"Affiliate" meanswith respect to any Person, any Person that directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under common control
with, such first Person. A Person shall be deemed to control another Person for the purposes of
this definition if such first Person possesses, directly or indirectly, the power to direct, or cause
the direction of, the management and policies of the second Person, whether through the
ownership of voting securities, common directors, trustees or officers, by contract or otherwise.
"Agreement" shall mean this Reimbursement Agreement, dated November 19, 2015, by
and between the Issuer and the Bank, as the same may be amended, restated or supplemented
from time to time in accordance with its terms.
"Alternate Credit Facility" shall have the meaning assigned that term in the Resolution.
"Amortization Period" shall have the meaning set forth in Section 2.03(b) hereof.
"Annual Debt Service" shall have the meaning assigned that term in the Resolution.
"Authorized Representative" shall mean, with respect to the Registrar, any Person at the
time designated to act on behalf of the Registrar for purposes of this Agreement by written
certificate furnished to the Bank containing the specimen signature of such Person and, with
respect to the Issuer, the Designated Port Representative (as defined in the Resolution).
"Available Amount" shall have the meaning assigned that term in the Letter of Credit.
"Available Revenue" shall have the meaning assigned that term in the Resolution.
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"Bank Agreement" means any credit agreement, liquidity agreement, standby bond
purchase agreement, reimbursement agreement, direct purchase agreement, bond purchase
agreement, supplemental indenture or other agreement or instrument (or any amendment,
supplement or other modification thereof) under which, directly or indirectly, any Person or
Persons undertake(s) to make or provide loans or funds to make payment of, or to purchase
securities or provide liquidity support or credit enhancement for Debt of the Issuer secured by or
payable from Gross Revenues or Available Revenue.
"Bank Rate" means, during the Liquidity Period: (i) for any day commencing on the date
such Drawing is made to and including the 60th day next succeeding the date such Drawing is
made, a rate per annum equal to the Base Rate in effect for such day; (ii) for any day
commencing on the 61st day next succeeding the date such Drawing is made to and including the
90th day next succeeding the date such Drawing is made, a rate per annum equal to the sum of
the Base Rate from time to time in effect plus one percent (1.00%); (iii) for any day commencing
on the 91st day next succeeding the date such Drawing is made to and including the Term-Out
Date for such Drawing, a rate per annum equal to the sum of the Base Rate from time to time in
effect plus two percent (2.00%); and (iv) for any day after the Liquidity Period, a rate per annum
equal to the Term Loan Rate; provided that at no time shall the Bank Rate be less than the
highest interest rate at which any Outstanding Note secured by the Letter of Credit but not held
by the Bank is then accruing interest.
"Base Rate" shall mean, for any day, the rate of interest per annum equal to the greatest
of (i) the Prime Rate in effect for such day plus two percent (2.00%), (ii) the Federal Funds Rate
in effect for such day plus three percent (3.00%), (iii) the One Month USD LIBOR Rate in effect
for such day plus three percent (3.00%), (iv) the SIFMA Rate in effect for such day plus three
percent (3.00%) and (v) seven and one-half percent (7.50%). Each determination of the Base
Rate by the Bank shall be conclusive and binding on the Issuer absent manifest error.
"Basic Documents" shall mean this Agreement, the Fee Letter, the Resolution, the Letter
of Credit, the Notes (including the Reimbursement Note), and the Dealer Agreement.
"Business Day" shall mean any day other than (i) a Saturday, Sunday or a day on which
banking institutions in the State of Washington or the State of New York are closed, (ii) a day on
which the New York Stock Exchange is closed and (iii) a day upon which commercial banks are
closed in the city in which demands for payment are to be presented under the Letter of Credit.
"Change of Law"means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation, statute, treaty, policy,
guideline or directive by any Governmental Authority, (b) any change in any law, rule,
regulation, statute, treaty, policy, guideline or directive or in the application, interpretation,
promulgation, implementation, administration or enforcement thereof by any Governmental
Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or
not having the force of law) by any Governmental Authority; provided that notwithstanding
anything herein to the contrary, (x) all statutes, requests, rules guidelines or directives
promulgated under or in connection with the Dodd-Frank Act implemented subsequent to the
execution and delivery of this Agreement, and (y) all requests, rules, guidelines or directives
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promulgated by the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III or any other Basel accord, regardless of the date
enacted, adopted, issued or promulgated, shall, in each case, be deemed to be a "Change of
Law."
"Code"shall mean the Internal Revenue Code of 1986, as amended and supplemented
from time to time, including relevant regulations, proposed and temporary regulations and
published rulings of the Department of the Treasury promulgated thereunder.
"Commission" shall mean the Port Commission of the Issuer.
"Controlled Group"means all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common control which, together with
the Issuer or any subsidiary, are treated as a single employer under Section 414 of the Code.
"Date of Issuance" shallmean the date on which the Bank delivers the Letter of Credit
pursuant to this Agreement.
"Dealer" shall have the meaning assigned that term in the Resolution.
"Dealer Agreement" shall have the meaning assigned that term in the Resolution.
"Debt" shall mean at any date, without duplication and to the extent any of the following
are secured or payable, in whole or in part, from Gross Revenues (i) all obligations of the Issuer
for borrowed money and reimbursement obligations which are not contingent, (ii) all obligations
of the Issuer evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations
of the Issuer to pay the deferred purchase price of property which purchase price is due twelve
months or more from the date of incurrence of the obligation in respect thereof, (iv) all
obligations of the Issuer as lessee under capital leases, (v) all Debt of others Guaranteed by the
Issuer and (vi) all payment obligations of the Issuer, in addition to any obligations set forth in
clauses (i) through (v) above, arising under any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate futures contract, interest rate option
contract or other similar arrangement and under any foreign exchange contract, currency swap
agreement, foreign exchange futures contract, foreign exchange option contract, synthetic cap or
other similar agreement (each a "Swap Agreement"); provided that it is understood that Debt
does not include contingent obligations of the Issuer to reimburse any other Person in respect of
surety bonds or letters of credit to the extent that such surety bonds or letters of credit support
Debt of the Issuer. For purposes of this definition, if any of the agreements or contracts set forth
in clause (vi) above relate to any other obligation of the Issuer which is otherwise included in
this definition of Debt, such agreements and contracts shall constitute Debt only to the extent that
the payment obligations of the Issuer thereunder, less any amounts receivable by the Issuer
thereunder, exceed or are expected to exceed the interest payable on the related Debt.
"Default Rate" shall mean the Base Rate plus four percent (4.00%) per annum; provided
that at no time shall the Default Rate be less than the highest interest rate at which any
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Outstanding Note secured by the Letter of Credit but not held by the Bank is then accruing
interest.
"Drawing" shall mean a drawing under the Letter of Credit accompanied by a certificate
in the form of Annex A or Annex H-2 to the Letter of Credit.
"Drawing Date" shall mean the date on which the Bank pays a Drawing on the Letter of
Credit in accordance with the terms thereof.
"Environmental Law" shallmean any and all federal, state and local laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or other governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals
or industrial, toxic or hazardous substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land.
"ERISA" meansthe Employee Retirement Income Security Act of 1974, as amended
from time to time, and all rules and regulations from time to time promulgated thereunder, or any
successor statute.
"Event of Default" shall have the meaning set forth in Section 7.01 hereof.
"Facilities" shall have the meaning assigned that term in the Resolution.
"Final Drawing Notice" shallmean a Drawing under the Letter of Credit accompanied
by a certificate in the form of Annex H-1 to the Letter of Credit.
"First Lien Bonds" shall have the meaning assigned that term in the Resolution.
"Facility Fee" shall have the meaning assigned that term in the Fee Letter.
"Facility Fee Rate" shall have the meaning assigned that term in the Fee Letter.
"Federal Funds Rate" shallmean, for any day, the per annum rate (rounded upward, if
necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal Funds transactions with members of the Federal Reserve System arranged by Federal
Funds brokers on that day; provided that (a) if the date for which the rate is to be determined is
not a Business Day, the Federal Funds Rate for that day shall be the rate on such transactions on
the next succeeding Business Day and (b) if that rate is not so published for any day, the Federal
Funds Rate for that day shall be the average rate charged to the Bank on that day on such
transactions as determined by the Bank. Each determination of the Federal Funds Rate by the
Bank shall be deemed conclusive and binding on the Issuer.
"Fee Letter" shall mean that certain Fee Letter dated as of the Date of Issuance between
the Issuer and the Bank, as amended, supplemented, modified, and/or restated from time to time.
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"Fitch" shall have the meaning assigned that term in the Resolution.
"GAAP"shall mean generally accepted accounting principles in the United States of
America from time to time as set forth in (i) the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and (ii) statements
and pronouncements of the Governmental Accounting Standards Board, as modified by the
opinions, statements and pronouncements of any similar accounting body of comparable
standing having authority over accounting by governmental entities.
"Governmental Authority" means any federal, state or local government (whether
domestic or foreign), any political subdivision thereof or any other governmental,
quasi-governmental, judicial, public or statutory instrumentality, authority, body, agency, bureau
or entity (including any zoning authority, the Federal Deposit Insurance Corporation or the
Federal Reserve Board, any central bank or any comparable authority), or any arbitrator with
authority to bind a party at law.
"Gross Revenues" shall have the meaning assigned that term in the Resolution.
"Guarantee"by any Person shall mean any obligation, contingent or otherwise, of such
Person directly or indirectly guaranteeing any Debt of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt (whether arising by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise), (ii) entered into for the purpose of assuring in any other manner the
obligee of such Debt of the payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part) or (iii) with respect to any letter of credit issued for the account of
such other Person or as to which such other Person is otherwise liable for reimbursement of
drawings; provided that the term Guarantee shall not include (x) endorsements for collection or
deposit in the ordinary course of business, or (y) performance or completion guarantees. The
term "Guarantee" used as a verb has a corresponding meaning.
"Interest Coverage" shall have the meaning assigned that term in the Resolution.
"Intermediate Lien Master Resolution"shall mean Resolution No. 3540, as amended,
and as the same may be amended in the future in accordance with its terms.
"Intermediate Lien Parity Bonds" shallhave the meaning assigned that term in the
Intermediate Lien Master Resolution.
"Investment Grade" meansa rating of "Baa3" (or its equivalent) or better by Moody's
or "BBB-" (or its equivalent) or better by S&P or Fitch.
"Lien" shallmean, with respect to any asset, (i) any lien, charge, claim, mortgage,
security interest, pledge or assignment of revenues of any kind in respect of such asset or (ii) the
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interest of a vendor or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Liquidity Period"shall mean the period of time from and after a Drawing under the
Letter of Credit, to and including the date one hundred and eighty (180) days from the date of
such Drawing.
"Material Adverse Effect" means a material adverse change in or material adverse effect
upon (i) solely with respect to Section 6.01(k) hereof, the operations, assets, condition (financial
or otherwise) or prospects of the Issuer, (ii) solely with respect to Section 6.02(g) hereof, (a) the
Issuer's ability to perform its material obligations under any of the Basic Documents, (b) the
legality, validity, binding effect or enforceability of any material provision of any of the Basis
Documents or the legality, validity, binding effect, enforceability, perfection or priority of any
lien, pledge or security interest created or purportedly created by any of the Basic Document, or
(c) the rights, remedies, security, duties or obligations of the Bank under any Basic Document.
"Maximum Rate" shallmean, solely for the purposes of Sections 6.01(o) and 6.02(l)
hereof, twelve (12%) percent per annum.
"Moody's" shall have the meaning assigned that term in the Resolution.
"Notice of Termination" shall mean a Notice of Termination in substantially the form of
the certificate attached to the Letter of Credit as Annex G.
"Offering Memorandum" shall mean the offering memorandum used in connection with
the sale of the Notes.
"One Month USD LIBOR Rate" means, for any day, the rate per annum equal to the rate
for deposits in United States dollars of amounts equal to or comparable to the principal amount
of the Notes paid with the proceeds of a Drawing under the Letter of Credit, offered for a term of
one month, which rate appears on the display designated as Reuters LIBOR01 Page (or such
other page as may replace Reuters LIBOR01 Page or such other service or services as may be
nominated by the British Bankers' Association for the purpose of displaying London interbank
offered rates for United States dollar deposits), determined as of approximately 11:00 a.m.,
London time, on such day.
"Operating Expenses" shall have the meaning assigned that term in the Resolution.
"Other Taxes" shall have the meaning set forth in Section 3.01(b) hereof.
"Outstanding" shall have the meaning assigned that term in the Resolution.
"Participant" shall mean each bank purchasing a participation from the Bank pursuant to
a Participation Agreement.
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"Participation Agreement"shall mean any certain participation agreement, among the
Bank and the other bank or banks purchasing participations and named therein, relating to this
Agreement, the Letter of Credit and the Reimbursement Note.
"Permitted Prior Lien Bonds" shall have the meaning assigned that term in the
Resolution.
"Person" shall have the meaning assigned that term in the Resolution.
"Plan" means,with respect to the Issuer and each subsidiary at any time, an employee
pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and either (i) is maintained by a member of the
Controlled Group for employees of a member of the Controlled Group of which the Issuer or
such subsidiary is a part, (ii) is maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and to which a
member of the Controlled Group of which the Issuer or such subsidiary is a part is then making
or accruing an obligation to make contributions or has within the preceding five plan years made
contributions.
"Prime Rate" shall mean, for any day, the rate per annum established by the Bank from
time to time as its "prime rate" for U.S. dollar loans, or its equivalent, as is in effect on such
day, any change in such rate to be effective on the date such change is effective for the Bank's
purposes, it being understood that such rate shall not necessarily be the best or lowest rate of
interest available to the Bank's best or most preferred prime, large commercial customers. Each
determination of the Prime Rate by the Bank shall be conclusive and binding on the Issuer absent
manifest error. The Prime Rate is a reference rate only, and the Bank may make loans from time
to time at interest rates above, equal to or below the Prime Rate.
"Rating" shall mean the long-term rating assigned by a Rating Agency to the
Subordinate Lien Parity Bonds (without regard to any third-party credit enhancement). The term
Rating refers to rating categories as presently determined by the Rating Agency and in the event
of adoption of any new or changed rating system by any such Rating Agency, each Rating from
the Rating Agency in question shall be deemed to refer to the rating category under the new
rating system that most closely approximates the applicable rating category as currently in effect.
"Rating Agency" shall mean Moody's, S&P and/or Fitch, as applicable.
"Reduction Fee" shall have the meaning assigned to that term in the Fee Letter.
"Registrar" shall have the meaning assigned that term in the Resolution.
"Reimbursement Account"shall mean the following account, or such other account as
may be designated by the Bank in writing to the Issuer and the Registrar:
ABA#: _____________
A/C#: ______________
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A/C Name: _________
Attn: ______________
Re: Letter of Credit No. _______
"Reimbursement Note" shallmean the Reimbursement Note issued by the Issuer to the
Bank pursuant to the Resolution evidencing all obligations of the Issuer to the Bank hereunder
with respect to the Notes secured by the Letter of Credit, in the form attached hereto as
Exhibit B.
"Related Parties" means, with respect to any Person, such Person's Affiliates and the
partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and
representatives of such Person and of such Person's Affiliates.
"S&P" shall have the meaning assigned that term in the Resolution.
"Senior Lien Master Resolution" shall mean Resolution No. 3059, as amended by
Resolution No. 3214, Resolution No. 3241, Resolution No. 3436, and as amended and restated
by Resolution No. 3577, as the same may be amended in the future in accordance with its terms.
"Semi-annual Payment Date" shall have the meaning set forth in Section 2.03(b) hereof.
"Semiannual Principal Payment" shallhave the meaning set forth in Section 2.03(b)
hereof.
"SIFMA" means Securities Industry & Financial Markets Association (formerly the
Bond Market Association).
"SIFMA Rate" means, on any date, a rate determined on the basis of the seven-day high
grade market index of tax-exempt variable rate demand obligations, as produced by Municipal
Market Data and published or made available by SIFMA or any Person acting in cooperation
with or under the sponsorship of SIFMA and acceptable to the Bank and effective from such
date. In the event Municipal Market Data no longer produces an index satisfying the
requirements of the preceding sentence, the SIFMA Rate (a/k/a, the "SIFMA MunicipalSwap
Index") shall be deemed to be the S&P Weekly High Grade Index, or if either such index is not
available, such other similar national index as shall be reasonably designated by the Bank.
"State" shall mean the State of Washington.
"Stated Amount" shall have the meaning set forth in Section 2.01(a) hereof.
"Stated Expiration Date" shall mean the close of business on November 18, 2020 or any
subsequent date to which the Letter of Credit shall have been extended in accordance with its
terms and the terms of Section 2.12 hereof.
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"Stop Issuance Instruction" means the written instruction, in the form attached as Exhibit
D hereto, given by the Bank to the Issuer and the Registrar pursuant to Sections 7.02(e) and 7.05
hereof.
"Subordinate Lien Note Fund" shall have the meaning assigned that term in the
Resolution.
"Subordinate Lien Parity Bonds" shall have the meaning assigned that term in the
Resolution.
"Subordinate Lien Rate Covenant" shallhave the meaning assigned that term in the
Resolution.
"Subordinate Lien Resolutions" shall have the meaning assigned that term in the
Resolution.
"Swap Agreement" shallhave the meaning assigned to that term in the definition of
"Debt".
"Taxes" shall have the meaning set forth in Section 3.01(a) hereof.
"Term Loan" shall have the meaning set forth in Section 2.03(a) hereof.
"Term Loan Maturity Date" shall mean the maturity date of any Term Loan, which date
shall be the earlier of (i) the fifth (5th) anniversary of the Stated Expiration Date (as the same
may be extended from time to time), (ii) the date the Registrar cancels the Letter of Credit or
replaces the Letter of Credit with an Alternate Credit Facility, and (iii) the fifth (5th) anniversary
of the related Drawing Date.
"Term Loan Rate" shall mean, for any day, the Base Rate in effect for such day plus two
percent (2.00%).
"Term-Out Date" shall have the meaning set forth in Section 2.03(b) hereof.
"Termination Date"shall mean the Stated Expiration Date or any earlier date on which
the Letter of Credit shall terminate, expire or be cancelled in accordance with its terms.
"Termination Fee" shall have the meaning set forth in the Fee Letter.
"United States" and "U.S." shall mean the United States of America.
Section 1.02. Accounting Terms and Determinations. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all accounting determinations hereunder
shall be made, and all financial statements required to be delivered hereunder shall be prepared,
in accordance with GAAP as in effect from time to time, applied on a basis consistent (except for
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changes approved by the Issuer's Accountant) with the most recent audited financial statements
of the Issuer delivered to the Bank.
Section 1.03. Rules of Construction. When used in this Agreement:
(a) the singular includes the plural and the plural includes the singular;
(b) "or" is not exclusive;
(c) a reference to a law includes any amendment or modification to such law;
(d) a reference to a Person includes its permitted successors and permitted
assigns;
(e) a reference to an agreement, instrument or document shall include such
agreement, instrument or document as the same may be amended, modified or
supplemented from time to time in accordance with its terms and as permitted hereby;
(f) all references to time shall mean Seattle time (daylight or standard, as
applicable), unless otherwise specified; and
(g) any use of the term "Bank" to refer to any institution or entity agreeing to
make advances hereunder, which is not actually a banking institution, is for purposes of
convenience only and shall not imply that such entity or institution is regulated as a
banking institution.
ARTICLE II
ISSUANCE OF LETTER OF CREDIT AND PAYMENTS; TERM LOANS
Section 2.01. Issuance of Letter of Credit.
(a) Issuance of Letter of Credit. The Bank hereby agrees, on the terms and subject to
the conditions hereinafter set forth, to issue to the Registrar an amended Letter of Credit
substantially in the form of Exhibit A hereto dated the Date of Issuance and completed in
accordance with such form and the terms of this Section 2.01(a). The Letter of Credit shall be in
the initial stated amount of $125,000,000 (the "Stated Amount"). The Stated Amount may be
from time to time reduced and/or reinstated in accordance with the terms of the Letter of Credit.
The Bank will use only its own funds in honoring a Drawing on the Letter of Credit.
(b) Delivery to a Successor Registrar. Promptly following the appointment and
qualification of any successor Registrar, the Bank shall deliver to such successor Registrar,
against receipt of the Letter of Credit held by the predecessor Registrar and payment of the fees,
costs and charges set forth in the Fee Letter hereof, the Bank will endorse the Letter of Credit in
favor of such successor Registrar.
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(c) Procedure for Drawings. All Drawings to be made under the Letter of Credit shall
be made by hand delivery or by facsimile transmission in the form of Annex A or Annex H-2 to
the Letter of Credit, addressed to the Bank and submitted by the Registrar at the time and place
specified in the Letter of Credit, and no further presentation of documentation, including the
original Letter of Credit, need be made; it being understood that the facsimile transmission shall,
in all events, be considered to be the sole operative instrument of drawing. The Bank may rely
upon any such facsimile transmission drawing which it, in good faith, believes to have been
dispatched by the Registrar.
Section 2.02. Drawings.
(a) Interest on Drawings. Subject to Section 2.03(a) hereof, all Drawings under the
Letter of Credit not reimbursed on the Drawing Date shall bear interest (computed on the basis of
a 365/366-day year and actual days elapsed) payable monthly in arrears on the first Business Day
of each month. The principal component of each Drawing shall bear interest at the Bank Rate or
the Default Rate, as applicable, as from time to time in effect. The interest component of each
Drawing, if not paid on the Drawing Date, shall bear interest at the Default Rate. All Term
Loans shall bear interest at a rate per annum equal to the greater of (i) the Term Loan Rate and
(ii) the highest interest rate at which any Outstanding Note secured by the Letter of Credit but
not held by the Bank is then accruing interest.
(b) Default Rate. Upon the occurrence of any Event of Default, the Issuer shall pay
interest on all outstanding Drawings, any Term Loans and any other amounts then accruing
interest hereunder, at the Default Rate. If the Issuer shall fail to pay any amount due and payable
hereunder, each such unpaid amount shall bear interest for each day from and including the date
it was so due until paid in full at a rate per annum equal to the Default Rate (computed on the
basis of a year of 365/366 days and actual days elapsed). Any amount of interest accruing
hereunder at the Default Rate shall accrue each day and shall be payable on demand. The taking
of any judgment hereunder shall not operate as a merger of any covenant herein or affect the
right of the Bank to receive interest at the Default Rate.
(c) Clawback Amount. Notwithstanding anything herein or in the other Basic
Documents to the contrary, to the extent permitted by law, if at any time the rate per annum
payable hereunder exceeds any applicable statutory or constitutional interest rate limitation or
restriction and the Bank shall not receive payment at such rate (such amount of interest not
received by the Bank on the date due being herein referred to as the "Clawback Amount"), any
subsequent reduction in such rate shall not reduce the rate of interest utilized for the calculation
of amounts payable to the Bank hereunder or under any other Basic Document until the total
Clawback Amount has been paid to the Bank; provided, however, that if such Clawback Amount
due to the Bank has not been paid to the Bank on or prior to the later of the (i) the date on which
all obligations under this Agreement have been paid in full and (ii) the Termination Date, such
amounts due shall convert to a termination fee due and payable on the Termination Date; and
provided, further, that any Clawback Amount shall bear interest at the Term Loan Rate until paid
in full.
Section 2.03. Repayment of Drawings and Other Payments.
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(a) Drawings. The Issuer agrees to reimburse the Bank, at the times, in the manner and
otherwise in accordance with the terms of this Agreement, for any payment made under the
Letter of Credit honoring a demand for payment made by the Registrar thereunder and to pay all
other amounts specified herein, together with interest thereon, pursuant to the terms hereof. The
Issuer shall pay or cause to be paid to the Bank, by 5:00 p.m. (Seattle time), on the Drawing Date
the full amount of such Drawing. Notwithstanding the above, so long as on the Drawing Date (i)
no Event of Default has occurred and is continuing and (ii) the representations and warranties of
the Issuer is deemed to have made in Article V hereof are true and correct in all material
respects, the principal component of any Drawing made on a Drawing Date may remain
outstanding and unpaid during the Liquidity Period and, thereafter, may be converted to a term
loan (a "Term Loan"); provided all conditions set forth in Section 2.03(b) below shall have been
met.
(b) Term Loans. In the event the portion of any Drawing used to pay the principal
amount of any Notes on the maturity date thereof has not been repaid in full by the last day of the
Liquidity Period (the "Term-Out Date"), then, provided (i) no Event of Default has occurred and
is continuing, (ii) the representations and warranties of the Issuer is deemed to have made in
Article V hereof are true and correct in all material respects, and (iii) the sum of the Outstanding
Notes supported by the Letter of Credit, plus the Interest Coverage with respect thereto, plus all
unreimbursed Drawings and all Term Loans then outstanding including the Term Loan then
proposed to be made, shall not exceed the Stated Amount on the Date of Issuance, as such
amount may have been reduced following receipt by the Bank of a certificate in the form of
Annex B to the Letter of Credit, such principal component of such Drawing shall be converted to
a Term Loan. Each Term Loan shall mature on the Term Loan Maturity Date. The Issuer shall
pay the principal amount of each Term Loan in equal semi-annual installments ("Semiannual
Principal Payments") commencing on the Term-Out Date and on the first Business Day of each
sixth (6th) calendar month thereafter (each a "Semi-annual Payment Date"), with the final
installment in an amount equal to the entire then outstanding principal amount of such Term
Loan due and payable on the Term Loan Maturity Date (the period commencing on the Term-
Out Date and ending on the Term Loan Maturity Date is referred to as the "Amortization
Period"). EachSemiannual Principal Payment shall be that amount of principal which will
result in equal (as nearly as possible) aggregate Semiannual Principal Payments over the
applicable Amortization Period.
(c) Manner of Payments. All payments to be made by or on behalf of the Issuer to the
Bank on account of amounts at any time owing hereunder or under the Reimbursement Note or
in connection herewith or therewith shall be made, and shall not be considered made until
received, in United States Dollars in the Reimbursement Account in immediately available
funds. Each payment required to be made hereunder or thereunder shall be made not later than
5:00 p.m. (Seattle time) on the date such payment shall be due in lawful money of the United
States of America to the Reimbursement Account in immediately available funds. Any payment
received after 5:00 p.m. (Seattle time) shall be deemed made on the next succeeding Business
Day.
(d) Credit Against Obligations Hereunder. To the extent the Bank receives any
payment of any amounts pursuant to the Reimbursement Note, such amounts shall be credited
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against the obligation of the Issuer hereunder to repay the principal of and interest on Drawings
and Term Loans, to the extent of such payment under the Reimbursement Note.
Section 2.04. Prepayment. The Issuer may prepay any Term Loan, in whole or in part, at
any time, without penalty, provided that such prepayment is accompanied by all interest accrued
thereon. The Reimbursement Note shall be subject to prepayment at any time in accordance with
the terms of this Agreement.
Section 2.05. Fees and Expenses. The Issuer hereby agrees to perform the obligations
provided for in the Fee Letter, including, without limitation, the payment of any and all fees,
expenses and other amounts provided for therein, at the times and in the amounts set forth in the
Fee Letter. Without limiting the generality of the foregoing, in the event that the Letter of Credit
is terminated or the Stated Amount is reduced and is not subject to reinstatement, the Issuer shall
pay to the Bank the Termination Fee and/or Reduction Fee, if any, at the times and in the
amounts set forth in and as required by the Fee Letter. The terms and provisions of the Fee
Letter are hereby incorporated herein by reference as if fully set forth herein. All references to
amounts or obligations due hereunder or in this Agreement shall be deemed to include all
amounts and obligations (including without limitation fees and expenses) under the Fee Letter.
All fees paid under this Agreement and the Fee Letter shall be fully earned when due and
nonrefundable when paid.
Section 2.06. Liability of Bank. Neither the Bank nor any of its present or former officers
or directors shall be liable or responsible for (a) the use which may be made of the Letter of
Credit or for any acts, omissions, errors, interruptions, delays in transmission, dispatch or
delivery of any message or advice, however transmitted, of the Registrar in connection with the
Letter of Credit; (b) any action, inaction or omission which may be taken by the Bank in good
faith without gross negligence in connection with the Letter of Credit; (c) the validity,
sufficiency or genuineness of documents, or of any endorsements thereon, as against any party or
signatory to such document except for the Bank, even if such documents should in fact prove to
be in any or all respects invalid, insufficient, fraudulent or forged; (d) payment by the Bank
against presentation of documents which do not comply with the terms of the Letter of Credit,
including failure of any documents to bear any reference or adequate reference to the Letter of
Credit; or (e) any other circumstances whatsoever in making or failing to make payment under
the Letter of Credit, except only that the Issuer shall have a claim against the Bank for acts or
events described in the immediately preceding clauses (a) through (e), and the Bank shall be
liable to the Issuer, to the extent, but only to the extent, of any direct, as opposed to
consequential, damages suffered by it which are determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from (i) the Bank's willful misconduct or
gross negligence in determining whether documents presented under the Letter of Credit comply
with the terms of the Letter of Credit or (ii) the Bank's willful failure or gross negligence in
failing to pay under the Letter of Credit after the presentation to it by the Registrar of a certificate
strictly complying with the terms and conditions of the Letter of Credit.
The Issuer further agrees that any action taken or omitted by the Bank under or in
connection with the Letter of Credit or the related draft or documents, if done in good faith
without gross negligence, shall be effective against the Issuer as to the rights, duties and
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obligations of the Bank and shall not place the Bank under any liability to the Issuer. In
furtherance and not in limitation of the foregoing, the Bank may accept documents from the
Registrar or the Dealer that appear on their face to be in order, without responsibility for further
investigation, unless the Bank shall receive written notification from the Registrar or the Dealer
that such documents are not to be accepted or honored.
Section 2.07. Reserved.
Section 2.08. Voluntary Termination. Notwithstanding any provisions of this Agreement
or the Letter of Credit to the contrary, the Issuer may terminate or replace the Letter of Credit at
any time upon fulfillment of the following conditions:
(i) the payment to the Bank of all fees, expenses and other amounts payable
hereunder and under the other Basic Documents, including the Termination Fee or
Reduction Fee, if any, specified in the Fee Letter;
(ii) the payment to the Bank of all principal and accrued interest owing on all
Drawings and Term Loan and all other obligations payable hereunder and under the other
Basic Documents; and
(iii) provision to the Bank and the Registrar notice of its intention to do so, and
the proposed date thereof, at least ten (10) days prior to the date of such termination or
replacement.
Section 2.09. Security. The obligations of the Issuer hereunder shall be evidenced by
the Reimbursement Note, the terms of which are incorporated herein by this reference.
(a) Without limiting any other provision in this Agreement, the covenants of the
Issuer with respect to the priority and use of Gross Revenue set forth in Section 4.01 of the
Resolution are hereby incorporated herein for the benefit of the Bank and for the repayment of
the obligations hereunder, as evidenced by the Reimbursement Note.
(b) The Notes (including the Reimbursement Note) and the lien thereof created and
established under the Resolution shall be obligations only of the Subordinate Lien Note Fund.
The Notes shall be payable solely from and secured solely by Available Revenue and amounts
on deposit in the Subordinate Lien Note Fund.
(c) From and after the time of issuance and delivery of the Notes and so long
thereafter as the Reimbursement Note remains Outstanding, the Issuer hereby irrevocably
obligates and binds itself to set aside and pay into the Subordinate Lien Note Fund out of
Available Revenue, on or prior to the date on which the principal of and interest on the Notes
shall become due, the amount necessary to pay such principal and interest coming due on the
Notes and its obligations hereunder as the same become due.
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Said amounts so pledged to be paid into the Subordinate Lien Note Fund are hereby
declared to be a prior lien and charge upon the Gross Revenue superior to all other charges of
any kind or nature whatsoever except for Operating Expenses and except for the lien on Gross
Revenue of the Permitted Prior Lien Bonds as set forth in clauses "First" through "Fourth" of
Section 4.01(b) of the Resolution and except that the amounts so pledged are of equal lien to the
liens and charges on Gross Revenue which have been, are or may hereafter be made to pay and
secure the payment of the principal of and interest on any other Subordinate Lien Parity Bonds.
(d) The Issuer may cause the Registrar to make any payment to the Bank
on its behalf.
2.10. Payment on Non Business Days. Whenever any payment to be made hereunder
shall be stated to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day (and if so made, shall be deemed to have been made when due),
and such extension of time shall in such case be included in the computation of the payment of
interest due hereunder.
2.11. Book Entries. The Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the obligations of the Issuer resulting from the amounts of
principal and interest payable and paid from time to time hereunder or under the Reimbursement
Note. In any legal action or proceeding in respect of this Agreement, the entries made in such
account or accounts shall, in the absence of manifest error, be conclusive evidence of the
existence and amounts of the obligations of the Issuer therein recorded.
Section 2.12. Extension of Stated Expiration Date. The Issuer may, by written notice to
the Bank not more than one hundred eighty (180) and not less than sixty (60) days prior to the
then current Stated Expiration Date, request the Bank to extend the Stated Expiration Date for a
period of up to five years. The Bank shall respond to the Issuer's request in writing within thirty
(30) days after the Bank's receipt of the Issuer's written request. If by the thirty-first (31st) day
after the Bank's receipt of the Issuer's request for such extension the Bank has not notified the
Issuer that the Bank will extend the Stated Expiration Date, the Bank shall be deemed to have not
consented to such request. Any decision by the Bank to extend the Stated Expiration Date shall
be in the Bank's sole and absolute discretion based on credit underwriting factors concerning the
Issuer.
If the Bank elects to extend the Stated Expiration Date, the Bank will notify the Issuer of
the terms and conditions of such extension (including conditions relating to legal documentation
and pricing, such as fees for renewal and drawings). If the Bank and the Issuer agree upon the
terms and conditions to extend the Stated Expiration Date then in effect, the Bank shall deliver to
the Registrar a Notice of Extension in the form of Annex F to the Letter of Credit (herein
referred to as a "Notice of Extension") designating the date to which the Stated Expiration Date
is being extended. Such extension of the Stated Expiration Date shall be effective, after receipt of
such notice, on the Business Day following the date of delivery of such Notice of Extension, and
thereafter all references in this Agreement to the Stated Expiration Date shall be deemed to be
references to the date designated as such in the most recent Notice of Extension delivered to the
Registrar.
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Section 2.13. Issuance Generally. The Issuer sha ll ensure that the Registrar issues
Notes only in accordance with the terms of and subject to the conditions set forth in the
Resolution, this Agreement and the other Basic Documents. The Issuer shall ensure that, without
the prior written consent of the Bank, the Registrar does not issue any Notes with a maturity date
shorter than seven (7) days.
ARTICLE III
TAXES; INCREASED COSTS
Section 3.01. Taxes.
(a) Payments Free of Taxes. To the extent permitted by law, any and all payments by
the Issuer hereunder or under the Fee Letter shall be made free and clear of and without
deduction for any and all taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on the overall gross or net income or
receipts of the Bank (and franchise taxes imposed in lieu of such income taxes or receipts) by the
jurisdiction of the Bank's applicable lending office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). To the best of the Bank's knowledge, there are no such
Taxes currently imposed or required to be withheld or deducted. If the Issuer shall be required
by law to withhold or deduct any Taxes from or in respect of any sum payable hereunder or
under the Fee Letter, then, to the extent permitted by law, (i) the sum payable shall be increased
as may be necessary so that after making all required withholdings or deductions (including
those Taxes payable solely by reason of additional sums payable under this Section 3.01) the
Bank receives an amount equal to the sum it would have received had no such withholdings or
deductions been made, (ii) the Issuer shall make such withholdings or deductions and (iii) the
Issuer shall pay the full amount withheld or deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) Payment of Other Taxes. In addition, to the extent permitted by law, the Issuer
agrees to pay any present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise under the laws of the United States or the State from
any payment made hereunder or under the Fee Letter or from the execution or delivery or
otherwise with respect to this Agreement, the Fee Letter or the Letter of Credit (hereinafter
referred to as "Other Taxes").
(c) Reimbursement by the Issuer. If the Issuer fails to pay Taxes and/or Other Taxes
(including Taxes imposed by any jurisdiction on amounts payable under this Section 3.01)
required to be paid by the Issuer pursuant to clause (a) or (b) above in accordance with
applicable law, then to the extent permitted by law the Issuer will hold harmless the Bank, and
reimburse the Bank, as applicable, for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable
under this Section 3.01) paid by the Bank or any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. Payments by the Issuer pursuant to this subSection shall be
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made within thirty (30) days from the date the Bank makes written demand therefor which
demand shall be accompanied by a certificate describing in reasonable detail the Bank's
determination of such amounts.
(d) Evidence of Payments. Within thirty (30) days after the date of any payment of
Taxes by the Issuer, the Issuer shall furnish to the Bank with respect to which such payment was
made, at its address referred to in Section 8.11 hereof, the original or a certified copy of a receipt
evidencing payment thereof. The Issuer shall compensate the Bank for all reasonable losses and
expenses sustained by the Bank as a result of any failure by such party to so furnish such copy of
such receipt.
(e) Treatment of Refunds. If the Bank determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been paid or reimbursed by the
Issuer or with respect to which the Issuer has paid additional amounts pursuant to this
Section 3.01, it shall promptly pay to the Issuer an amount equal to such refund (but only to the
extent of payments made, or additional amounts paid, by the Issuer under this Section 3.01 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all reasonable out-ofpocket
expenses of the Bank and without interest (other than any interest paid by the relevant
taxation authority with respect to such refund net of all reasonable out-of-pocket expenses of the
Issuer and without interest); provided that the Issuer, upon the request of the Bank, agrees to
repay the amount paid over to the Issuer (plus any penalties, interest or other charges imposed by
the relevant taxation authority) to the Bank in the event the Bank is required to repay such refund
to such taxation authority. This subSection shall not be construed to require the Bank to make
available its tax returns (or any other information relating to its taxes that it deems confidential)
to the Issuer or any other Person.
(f) Survival. Without prejudice to the survival of any other agreement of the Issuer
hereunder, the agreements and obligations contained in this Section 3.01 shall survive the
payment in full of fees, principal and interest hereunder, under the Fee Letter and under the
Letter of Credit.
Section 3.02. Increased Costs. If the Bank or any Participant shall have determined that a
Change of Law shall have occurred which, shall:
(i) subject the Bank or any Participant to any tax, charge, fee, deduction or
withholding of any kind with respect to the Letter of Credit, this Agreement or the Fee
Letter, or any amount paid or to be paid by the Bank as the issuer of the Letter of Credit
or any Participant (other than any tax measured by or based upon the overall gross or net
income or receipts of the Bank or a Participant);
(ii) impose, modify or deem applicable any reserve, liquidity or capital ratio,
premium, special deposit, liquidity, insurance, premium, compulsory loan, fee, financial
charge, monetary burden or similar requirement against funding any Drawing under the
Letter of Credit or maintaining the Letter of Credit, or complying with any term of this
Agreement, or against any assets held by, deposits with or for the account of, or loans,
letters of credit or commitments by, an office of the Bank or any Participant;
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(iii) change the basis of taxation of payments due the Bank or any Participant
under this Agreement (other than a change in taxation of the overall gross or net income
or receipts of the Bank or a Participant); or
(iv) impose upon the Bank or any Participant any other condition with respect
to such amount paid or payable to or by the Bank or any Participant or with respect to this
Agreement, the Fee Letter or the Letter of Credit;
and the result of any of the foregoing is to increase the cost to the Bank or any Participant of
agreeing to issue, issuing, making any payment under or maintaining the Letter of Credit, the
obligations of the Issuer hereunder or under the Reimbursement Note, or to reduce the amount of
any payment (whether of principal, interest or otherwise) receivable by the Bank or any
Participant or to require the Bank or any Participant to make any payment on or calculated by
reference to the gross amount of any sum received by it, then:
(1) the Bank shall promptly notify the Issuer in writing of the happening of
such event within one hundred eighty (180) days of the date the Bank learns about such
event and its impact on the Bank's costs (the "Cut-Off Date"), except that if the Change
of Law giving rise to such increased costs or reductions is retroactive, then the 180 day
period referred to above shall be shortened to 90 days and such period shall be extended
to include the period of retroactive effect thereof);
(2) the Bank shall promptly deliver to the Issuer a certificate stating the
change that has occurred or the reserve requirements or other costs or conditions which
have been imposed on the Bank or a Participant or the request, direction or requirement
with which it has complied together with the date thereof, the amount of such increased
cost, reduction or payment and the way in which such amount has been calculated,
including a reasonably detailed calculation and the Bank's determination of such
amounts, which determination shall be conclusive absent fraud or manifest error; and
(3) the Issuer shall pay to the Bank, from time to time as specified by the
Bank, such an amount or amounts as will compensate the Bank or such Participant for
such additional cost, reduction or payment, together with interest on such amount
following, and including, the date specified by the Bank for payment (which specified
date shall not be sooner than the date that is thirty (30) days after the date the Bank
provides notice to the Issuer of the amount or amounts due).
In addition to the foregoing, if after the date hereof the Bank or any Participant shall have
determined that a Change of Law shall have occurred there with of which shall impose, modify
or deem applicable any capital (including but not limited to contingent capital) adequacy,
reserve, insurance, liquidity or similar requirement (including, without limitation, a request or
requirement that affects the manner in which the Bank or any Participant (or any entity
controlling any such Person) allocates capital or liquidity resources or reserves to its
commitments that either (i) affects or would affect the amount of capital, liquidity or reserves
required or expected to be maintained by the Bank or such Participant (or any entity controlling
any such Person), or (ii) reduces or would reduce the rate of return on the Bank's or such
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Participant's (or any entity controlling any such Person) capital or liquidity or reserves to a level
below that which the Bank or such Participant could have achieved but for such circumstances
(taking into consideration the policies of the Bank or such Participant (or any entity controlling
any such Person) with respect to capital adequacy and liquidity or the maintenance of reserves),
then from time to time the Issuer shall be obligated to pay or cause to be paid to the Bank such
additional amount or amounts as will compensate the Bank or such Participant (or any entity
controlling any such Person) for such reduction or capital or liquidity increase with respect to
any period for which such reduction or capital or liquidity increase was incurred upon demand
by the Bank, together with interest on such amount for each day from the date set forth by the
Bank for payment until payment in full at the Default Rate. The Bank shall be required to
deliver to the Issuer a certificate setting forth in reasonable detail any reduction in the rate of
return on capital or liquidity, or such capital or liquidity increase, of the Bank or a Participant (or
any entity controlling any such Person) as a result of any event mentioned in this paragraph,
which such certificate shall, in the absence of manifest error, be conclusive as to the amount
thereof.
Notwithstanding anything in this Section 3.02 to the contrary, if such costs are to be
incurred on a continuing basis and the Bank shall so notify the Issuer in writing as to the amount
thereof, such costs shall be paid by the Issuer to the Bank quarterly in arrears, together with all
other fees payable pursuant to the Fee Letter. The Bank shall use a reasonable method of
allocation or attribution to equitably apportion any increased costs or reduction in the rate of
return on capital among all of its customers so affected.
The protections of this Section 3.02 shall be available to the Bank and the Participants,
regardless of any possible contention of invalidity or inapplicability of the law, regulation or
condition which has been imposed; provided, however, that if it shall be later determined that
any amount so paid by the Issuer pursuant to this Section 3.02 is in excess of the amount payable
under the provisions hereof, the Bank or such Participant, as the case may be, shall refund such
excess amount to the Issuer, with any interest the Issuer may have paid on such amount.
Notwithstanding the foregoing, in no event shall the Issuer be required to pay to the Bank
on behalf of any Participant any increased cost required under this Agreement in excess of the
amount the Issuer would have paid to the Bank if the Bank had not entered into a participation
with such Participant.
ARTICLE IV
CONDITIONS PRECEDENT
The obligation of the Bank to issue the Letter of Credit shall be subject to the satisfaction
of the following conditions precedent, which satisfaction shall be evidenced by the issuance and
delivery by the Bank of the Letter of Credit:
Section 4.01. Resolution; Other Basic Documents. ( a) The Resolution shall not have
been revoked or rescinded or otherwise further amended or modified and shall be in full force
and effect;
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(b) all other Basic Documents shall have been executed (where applicable) and copies
thereof delivered to the Bank (with originals to be promptly delivered to the Bank if requested)
and shall be in full force and effect and shall be in form and substance satisfactory to the Bank;
and
(c) the Bank and its counsel shall have received copies of the Offering Memorandum
and each of the Basic Documents (other than the Letter of Credit) along with a certificate, as
requested by the Bank, of an Authorized Representative of the Issuer dated the Date of Issuance
to the effect that (A) such copies are true, correct and complete copies of such documents and
(B) such documents to which the Issuer is a party were duly issued, adopted or executed and
delivered by the Issuer and are in full force and effect.
Section 4.02. Opinions. The Bank shall have received legal opinions addressed to the
Bank, dated the Date of Issuance and in form and substance satisfactory to the Bank, from (i)
counsel of the General Counsel to the Issuer as to such matters as the Bank may reasonably
request and (ii) K&L Gates LLP, as counsel to the Issuer, as to enforceability with respect to the
Basic Documents and as to such matters as the Bank may reasonably request. The Bank shall
have received a reliance letter, dated the Date of Issuance and in form and substance satisfactory
to the Bank, from K&L Gates LLP with respect to the approving and tax opinion with respect to
the Notes.
Section 4.03. Events of Default, Representations and Warranties. (a) No Event of
Default and no event which is or with the passage of time or giving of notice or both would be an
Event of Default and no default under any of the Basic Documents (other than the Letter of
Credit) or the Senior Lien Master Resolution or Intermediate Lien Master Resolution shall have
occurred and be continuing, and
(b) The representations of the Issuer set forth in Article V hereof, in any other Basic
Document or the Senior Lien Master Resolution or Intermediate Lien Master Resolution shall be
true and correct on and as of the Date of Issuance with the same force and effect as if made on
and as of such date (taking into account any passage of time since the date of the applicable
representation).
Section 4.04 No Litigation. Except as disclosed to the Bank pursuant to Section 6.01(h),
there is no action, suit, investigation or proceeding pending or, to the best of the Issuer's
knowledge after due inquiry, threatened
(a) in connection with this Agreement, the Notes, the other Basic Documents, or the
Senior Lien Master Resolution or Intermediate Lien Master Resolution or any transactions
contemplated thereby or hereby, or
(b) against or affecting the Issuer, in which an adverse determination would have a
material adverse effect on the financial condition of the Issuer or its ability to perform its
obligations hereunder, under the Notes, the other Basic Documents or the Senior Lien Master
Resolution or Intermediate Lien Master Resolution.
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Section 4.05. No Material Adverse Change. (a) Since the date of the most recent
financial statements of the Issuer, no material adverse change shall have occurred in the status of
the business, operations or conditions (financial or otherwise) of the Issuer or the Facilities or its
ability to perform its obligations hereunder, under the Notes, the other Basic Documents or the
Senior Lien Master Resolution or Intermediate Lien Master Resolution; and
(b) The Bank shall have received a copy of the Issuer's current adopted budget and
copies of the audited financial statements for the three most recently ended fiscal years of the
Issuer.
Section 4.06. Certificate. The Bank shall have received:
(a) certified copies of all proceedings taken by the Commission authorizing
the execution, delivery and performance of this Agreement, the Offering Memorandum
and the other Basic Documents (other than the Letter of Credit), and the transactions
contemplated hereby and thereby and by the Letter of Credit; and
(b) a certificate or certificates of one or more Authorized Representatives of
the Issuer dated the Date of Issuance certifying (i) as to the matters set forth in
Sections 4.03 (with respect to the Basic Documents to which the Issuer is a party), 4.04
and 4.05, (ii) to the effect that all consents, permits, licenses and approvals of, and filings,
registrations and declarations with, governmental authorities that are required to be
obtained or made in connection with the Notes (other than compliance with any state blue
sky laws or regulations, as to which the Issuer makes no representations), this Agreement,
the Offering Memorandum and the other Basic Documents have been obtained or made,
and (iii) the name, incumbency and signature of each individual authorized on behalf of
the Issuer to sign this Agreement, the Offering Memorandum, the other Basic Documents
to with the Issuer is a party and the other documents or certificates to be delivered by the
Issuer pursuant hereto or thereto, on which certificate or certificates the Bank may
conclusively rely until a revised certificate is similarly delivered.
Section 4.07. Payment of Expenses. All expenses due and payable to the Bank on the
Date of Issuance in accordance with the provisions of Section 8.05 hereof shall have been paid.
Section 4.08. Ratings; CUSIP. (a) The Bank shall have received evidence that (i) the
Notes secured by the Letter of Credit shall have received at least the short-term and long-term
ratings of the Bank from Moody's and S&P and (ii) the Ratings on Subordinate Lien Parity
Bonds are at least "A2" (or its equivalent) by Moody's and "A" (or its equivalent) by S&P and
Fitch (which shall be evidenced by screen shots of such ratings on the Date of Issuance).
(b) CUSIP and Rating. The Bank shall have received written confirmation that (i) a
CUSIP number (No. ________________) has been obtained from Standard and Poor's CUSIP
Services for the Reimbursement Note and (ii) a long term rating of at least Investment Grade has
been obtained for Reimbursement Note (and its related CUSIP number) from any Rating
Agency.
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Section 4.09. Registrar Certificate. The Bank shall have received a certificate of an
Authorized Representative of the Registrar certifying as to the authority, incumbency and
specimen signatures of the Authorized Representatives of the Registrar authorized to sign the
Basic Documents (other than the Letter of Credit) to which it is a party and any other documents
to be delivered by it hereunder and who will be authorized to represent the Registrar in
connection with this Agreement and the Letter of Credit, on which certificate the Bank may
conclusively rely until it receives a new certificate.
Section 4.10. No Change in Law. No law, regulation, ruling or other action of the United
States, the State, the State of New York or any political subdivision or authority therein or
thereof shall be in effect or shall have occurred, the effect of which would be to prevent the
Issuer from fulfilling its obligations under this Agreement.
Section 4.11. Other Matters. All other legal matters pertaining to the execution and
delivery of this Agreement, the Offering Memorandum and the other Basic Documents shall be
satisfactory to the Bank, and the Bank shall have received such other statements, certificates,
agreements, documents and information with respect to the Issuer and matters contemplated by
this Agreement as the Bank may request.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to issue the Letter of Credit, the Issuer hereby represents and
warrants to the Bank, as of the Date of Issuance and, except for the representations set forth in
Sections 5.03(b), 5.06, 5.07, 5.08, 5.10, 5.17 and 5.18 hereof, as of the date of each Drawing
under the Letter of Credit and as of each Term-Out Date, as follows:
Section 5.01. Organization and Authorization. The Issuer is a municipal corporation
organized and existing under the Constitution and laws of the State.
Section 5.02. Issuer Authority to Adopt or Execute and Deliver Documents. The Issuer
had, as of the date of adoption thereof, full power and authority to adopt the Senior Lien Master
Resolution, the Intermediate Lien Master Resolution and the Resolution, and has, or had as of the
date of execution and delivery, full power and authority to issue or to execute and deliver this
Agreement, the Notes, the Offering Memorandum, and the other Basic Documents (other than
the Letter of Credit), and to execute, deliver and perform all other agreements and instruments
executed and delivered or to be executed and delivered by the Issuer pursuant to or in connection
with this Agreement, the Notes, the Offering Memorandum, the Resolution, and the other Basic
Documents, and the Issuer has full power and authority to perform its obligations under each of
the foregoing and has full power and authority to pledge the Available Revenue to secure the
obligations under this Agreement, the Fee Letter and the Reimbursement Note.
Section 5.03. Obligations Legal, Valid and Binding. (a) This Agreement, the Offering
Memorandum and the other Basic Documents have been duly and validly authorized, executed
and delivered, or in the case of the Resolution, duly and validly adopted, and this Agreement and
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the other Basic Documents constitute, or will constitute upon issuance in the case of the Notes,
the legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance
with their respective terms, except insofar as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights and remedies generally, and by general principles of equity, whether applied by
a court of law or equity.
(b) No Event of Default has occurred and is continuing hereunder and the Issuer is not
in default under the Senior Lien Master Resolution, the Intermediate Lien Master Resolution, the
Resolution, any other Subordinate Lien Resolution or any other Basic Document.
Notwithstanding this or any other provision of this Agreement, a default under the Senior Lien
Master Resolution or the Intermediate Lien Master Resolution shall not constitute a default or an
Event of Default hereunder.
Section 5.04. No Legal Bar. (a) The Issuer is in compliance with and not in violation
under any laws, rules or regulations of the State which would adversely affect the Issuer's
existence or its powers and authority referred to in Section 5.02 hereof.
(b) The adoption of the Resolution, and the execution, delivery (or issuance, in the case
of the Notes) and performance by the Issuer of its obligations under this Agreement and the other
Basic Documents, and all other agreements and instruments relating to all the foregoing executed
and delivered by the Issuer in connection herewith and therewith,
(i) do not violate any provision of the laws of the State or any other
applicable law, regulation, order, writ, judgment or decree of any court, arbitrator or
governmental authority, and
(ii) do not violate any provision of, constitute a default under any mortgage,
resolution, indenture, contract, agreement or other undertaking with respect to the
Facilities to which the Issuer is a party or which purports to be binding on the Issuer or on
any of its assets.
(c) The Issuer is not a party to, or otherwise subject to, any provision contained in any
instrument evidencing Debt of the Issuer, any agreement relating thereto or to the Facilities, or
any other contract or agreement which limits the amount of, or otherwise imposes restrictions on
the incurring of, obligations of the Issuer that would materially and adversely affect the ability of
the Issuer to perform its obligations hereunder, under the Reimbursement Note or under any of
the other Basic Documents.
Section 5.05. Consents. The Issuer has obtained, or will obtain on or before the Date of
Issuance, all consents, permits, licenses and approvals of, and has made all filings, registrations
and declarations with, governmental authorities required to be obtained by the Issuer under law,
to authorize the issuance and sale of the Notes (other than compliance with any state blue sky
laws or regulations, as to which the Issuer makes no representations), the adoption of the
Resolution, the execution and delivery of the Offering Memorandum, and the execution, delivery
and performance of this Agreement, the other Basic Documents to which the Issuer is a party and
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all other agreements delivered or to be delivered in connection with any thereof, and all such
consents, permits, licenses, approvals, filings, registrations and declarations remain in full force
and effect.
Section 5.06. Litigation.
(a) There is no action, suit, investigation or proceeding pending or, to the best of the
Issuer's knowledge after due inquiry, threatened
(i) in connection with the Notes, this Agreement or the other Basic
Documents or any transactions contemplated thereby or hereby or
(ii) against or affecting the Issuer, in which an adverse determination could
have a material adverse effect on the financial condition of the Issuer or its ability to
perform its obligations under this Agreement, the Notes, the Resolution or under any
other Basic Document to which the Issuer is a party.
(b) Except as disclosed to the Bank pursuant to Section 6.01(h) hereof, to the best of the
Issuer's knowledge, there is no action, suit, investigation or proceeding (including any arbitration
or mediation proceeding) pending against the Issuer, in which an adverse determination could
have a material adverse effect on the ability of the Issuer to perform its obligations hereunder or
under the Reimbursement Note or any other Basic Document.
Section 5.07. Disclosure. All audited financial statements of the Issuer furnished to the
Bank were prepared in accordance with GAAP as in effect from time to time, applied on a
consistent basis (except for changes approved by the Accountant) throughout the periods
involved. Other than as disclosed to the Bank in writing, since the date of the most recent
audited financial statements referred to in the preceding sentence, no event has occurred which
could have material adverse effect on the financial condition of the Issuer or affect the ability of
the Issuer to perform its obligations under this Agreement, the Notes, the Resolution or under
any other Basic Document. The representations and statements made by the Issuer herein, in the
Offering Memorandum or in any document furnished to the Bank by the Issuer in connection
herewith were, taken in the aggregate and at the time the same were so furnished, accurate and
do not contain any untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they were made, not
misleading.
Section 5.08. The Resolution and the Basic Documents. The representations and
warranties of the Issuer set forth in the Resolution and the other Basic Documents are true and
accurate in all material respects on the Date of Issuance as fully as though made on the Date of
Issuance. The Issuer makes as of the Date of Issuance each of such representations and
warranties and each of the covenants contained in the Basic Documents to, and for the benefit of,
the Bank as if the same were set forth at length herein together with all applicable definitions
thereto. No amendment, modification or termination of any such representations, warranties,
covenants or definitions contained in the Resolution or the Notes, and, if such amendment,
modification or termination would have an adverse impact on the rights of the Bank hereunder or
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thereunder, no amendment, modification or termination of any provisions contained in
Sections 2, 3, 5, 6, 7(a) through (f), 9(i), 14, 16, 17, 19 or 21 of the Senior Lien Master
Resolution, Sections 2, 3, 5, 6(a) through (f), 7, 8(j), 9, 10 or 11 of the Intermediate Lien Master
Resolution, or of any other provision of any other Basic Document shall be effective to amend,
modify, or terminate the representations, warranties, covenants and definitions incorporated
herein by this reference, without the prior written consent of the Bank.
Section 5.09. Liens. No filings, recordings, registrations or other actions are necessary to
create and perfect the Liens provided for in the Senior Lien Master Resolution, the Intermediate
Lien Master Resolution, the Resolution and herein; the Lien provided for in the Resolution in
respect of the Notes, including the Reimbursement Note, constitutes the valid prior Lien on
Available Revenue subject to no other Liens other than the Liens in favor of the other
Subordinate Lien Parity Bonds which are on parity with such Lien provided for in the
Resolution.
Section 5.10. No Proposed Legal Changes. There is no amendment, or to the knowledge
of the Issuer, no proposed amendment, to the Constitution of the State certified for placement on
a statewide or local ballot, or any published administrative interpretation of the Constitution of
the State or any State law, or any legislation that has passed either house of the State legislature,
or any published judicial decision interpreting any of the foregoing, the effect of which is or if
passed would be to materially adversely affect the Notes or any holder thereof in its capacity as
such, or the ability of the Issuer to perform its obligations under this Agreement, the other Basic
Documents or the Reimbursement Note.
Section 5.11. Environmental Matters. In the ordinary course of its business, the Issuer
conducts an ongoing review of the effect of Environmental Laws on the business, operations and
Facilities of the Issuer, in the course of which it identifies and evaluates associated liabilities and
costs (including, without limitation, any capital or operating expenditures required for clean-up
or closure of properties presently or previously owned or operated, any capital or operating
expenditures required to achieve or maintain compliance with environmental protection
standards imposed by law or as a condition of any license, permit or contract, any related
constraints on operating activities, including any periodic or permanent shutdown of any facility
or reduction in the level of or change in the nature of operations conducted thereat and any actual
or potential liabilities to third parties, including employees, and any related costs and expenses).
On the basis of such review the Issuer does not believe that noncompliance with any
Environmental Laws would have a material adverse effect on the ability of the Issuer to perform
its obligations hereunder, under the Notes, the other Basic Documents or the Senior Lien Master
Resolution or Intermediate Lien Master Resolution.
Section 5.12. Sovereign Immunity. The Issuer is subject to civil and commercial suit to
enforce its obligations under this Agreement and under each of the other Basic Documents.
Section 5.13. No Maximum Interest Rate. The Issuer is authorized by the laws of the
State to enter into this Agreement, the Reimbursement Note and the other Basic Documents and
the transactions contemplated hereby or thereby. In accordance therewith, the obligations of the
Issuer hereunder and under the Reimbursement Note are not subject to any constitutional and
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statutory limitation as to maximum rate of interest under the Resolution or otherwise. The terms
of this Agreement, the Reimbursement Note and the other Basic Documents regarding the
calculation and payment of interest and fees do not violate any applicable usury laws.
Section 5.14. Security. T he Bank has a valid and enforceable lien on the Available
Revenue and amounts on deposit in the Subordinate Lien Note Fund to the extent and as
described under Section 2.09 hereof, subject to the provisions of the Resolution.
Section 5.15. Anti-Terrorism Laws. The Issuer is not in violation of any laws relating to
terrorism or money laundering ("Anti-Terrorism Laws"), including Executive Order No. 13224
on Terrorist Financing, effective September 24, 2001 (the "Executive Order"), and USA
PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Patriot
Act");
(a) The Issuer is not any of the following:
(i) a Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;
(ii) a Person owned or controlled by, or acting for or on behalf of, any
Person that is listed in the annex to, or is otherwise subject to the provisions of,
the Executive Order;
(iii) a Person with which the Bank is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;
(iv) a Person that commits, threatens or conspires to commit or
supports "terrorism" as defined in the Executive Order; or
(v) a Person that is named as a "speciallydesignated national and
blocked person" on the most current list published by the Office of Foreign Asset
Control of the United States Department of the Treasury ("OFAC") or any list of
Persons issued by OFAC pursuant to the Executive Order at its official website or
any replacement website or other replacement official publication of such list;
(b) The Issuer does not (i) conduct any business or engage in making or
receiving any contribution of funds, goods or services to or for the benefit of any Person
described in subSection (a)(ii) above, (ii) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to the Executive Order
or (iii) engage in or conspires to engage in any transaction that evades or avoids, or has
the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set
forth in any Anti-Terrorism Law.
Section 5.16. Margin Stock. The Issuer is not engaged principally, or as one of its
important activities, in the business of extending credit for the purposes of purchasing or
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carrying margin stock (within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System).
Section 5.17. Tax-Exempt Status. The Issuer has not taken any action or omitted to take
any action, and has no actual knowledge of any action taken or omitted to be taken by any other
Person, which action, if taken or omitted, would adversely affect the exclusion of interest on the
Notes issued on a federally tax-exempt basis from gross income for federal income tax purposes.
Section 5.18. Parity Repayment. The Issuer has not granted to the issuer of any Credit
Facility providing security or liquidity to any obligation secured by or payable from Gross
Revenues or Available Revenue the right to declare such obligations (or the related contractual
obligations owing to the issuer of such Credit Facility) to be immediately due and payable, or to
be due and payable earlier or in proportionately greater amounts than the Issuer's obligations
with respect to the Reimbursement Note, the Drawings, Term Loans or its contractual
obligations hereunder (i.e., with respect to the Reimbursement Note, the Drawings and Term
Loans, payable over a period less than five years).
ARTICLE VI
COVENANTS
Section 6.01. Affirmative Covenants. As long as this Agreement is in effect, and until all
amounts payable hereunder and under other Basic Documents to which the Issuer is a party,
including, without limitation the Reimbursement Note, are indefeasibly paid in full, the Issuer
will perform and observe the covenants set forth below, unless the Bank shall otherwise consent
in writing:
(a) Financial Records. The Issuer shall at all times maintain financial records and
furnish to the Bank, as soon as available but no later than six (6) months after the end of each
fiscal year, financial statements prepared in accordance with GAAP as in effect from time to
time, applied on a consistent basis (except for changes approved by the Accountant) throughout
the periods involved, including:
(i) a balance sheet as of the end of each fiscal year,
(ii) the related statements of operations and changes in equity,
(iii) statements of cash flows for such fiscal year, and
(iv) a calculation of the ratio of Available Revenue to Annual Debt
Service for such fiscal year.
(b) Certificate of Authorized Representative. As soon as available, but no later than
two hundred seventy (270) days after the end of each fiscal year, the Issuer shall furnish to the
Bank the audited financial statements of the Issuer, certified by the Accountant. Concurrently
with the delivery of the audited financial statements, the Issuer shall deliver to the Bank a
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certificate of an Authorized Representative substantially in the form of Exhibit C attached hereto
to the effect that such Person has reviewed the Issuer's obligations hereunder and under the
Resolution and stating that no Event of Default hereunder has occurred and is continuing or, if
for any reason such statements cannot be made, so stating and describing the relevant
circumstances.
(c) Budgets; Semi-Annual Reports. The Issuer shall deliver to the Bank no later than
February 28 of each year a copy of its then current annual budget and such additional period as
may be covered by such budget. The Issuer also shall deliver to the Bank, within 30 days after
presentation to the Commission, a copy of the financial performance report prepared by the
Issuer on a semi-annual basis. The Issuer may deliver its annual budget to the Bank by giving
notice to the Bank that such budget has been made available to the public on the Issuer's website.
(d) Other Information. The Issuer shall furnish to the Bank, as the Bank may
reasonably request, such additional financial and operational information concerning the Issuer
in order to enable the Bank to determine whether the covenants, terms and provisions of this
Agreement, the Notes, the Resolution and the other Basic Documents have been complied with
by the Issuer, and for that purpose all pertinent books, documents and vouchers relating to the
Issuer's business, affairs and properties and not required to be kept confidential by the Issuer
pursuant to RCW 42.17.250 et seq. shall at all reasonable times during regular business hours
and upon three Business Days' prior notice be open to the inspection of such accountants or
other agents (who may make copies of all or any part thereof at their own cost and expense) as
shall from time to time be designated by the Bank. The Bank shall not divulge any information
it may receive to any other Person, other than to its agents and employees, any Participant or
financial institution to which it may assign any interest pursuant to Sections 8.06 or 8.07 hereof,
any auditors or examiners of the Bank and any other Person to whom the Bank is required by law
to provide such information. Without limiting the foregoing, upon three Business Days' prior
notice the Issuer will permit the Bank to visit and inspect any of the properties of the Issuer
during regular business hours and to discuss the affairs, finances and accounts of the Issuer with
its officials and any accounting firm performing services for the Issuer, as often as such Bank
may reasonably request. Notwithstanding any notice requirement in this Section 6.01(d) to the
contrary, if an Event of Default shall occur and be continuing, the Bank may review such books
and records, make such inspections, copy such information, and enter into such discussions with
the Issuer's officials and accountants as the Bank may deem necessary or desirable.
(e) EMMA Postings. The Issuer shall be deemed to have complied with the financial
reporting requirements set forth in Section 6.01(a), (c) and (d) hereof to the extent that (i) the
Issuer has made such financial information available on http://emma.msrb.org (or, upon prior
written notice to the Bank, any other applicable online system used by the Issuer) and (ii) the
Issuer has given notice to the Bank that such financial information is available on
http://emma.msrb.org (or, upon prior written notice to the Bank, any other applicable online
system used by the Issuer), in each case, not later than the deadlines required by such Sections.
(f) Notice of Default. (i) The Issuer shall promptly notify the Bank, the Registrar and
the Dealer in writing of the occurrence of any Event of Default under Sections 7.01(a) or (c)
hereof.
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(ii) The Issuer shall, promptly upon obtaining knowledge thereof, notify the Bank, the
Registrar and the Dealer in writing of the occurrence of any other Event of Default or any default
by the Issuer under the Notes, the Resolution or any other Basic Document. The Issuer shall also
notify the Bank of the occurrence of any default or other event under any indenture, contract or
instrument providing for the creation of other Debt of the Issuer where the effect thereof is to
accelerate, or permit the acceleration of, the maturity of such Debt.
(g) Compliance With Obligations. The Issuer shall observe and comply in all material
respects with all of its obligations arising in connection with the Senior Lien Master Resolution,
the Intermediate Lien Master Resolution, the Resolution, the other Basic Documents (including,
without limitation, the issuance of additional Debt strictly in accordance with the terms of the
foregoing) and all applicable laws, ordinances, rules or regulations of duly constituted public
authorities which may be applicable to the Issuer; provided, however, that the failure of the
Issuer to comply with the Senior Lien Master Resolution or the Intermediate Lien Master
Resolution shall not by itself constitute an Event of Default hereunder. Any failure of the Issuer
to comply with any continuing disclosure agreement or undertaking to provide information
pursuant to Rule 15c2-12(b)(5), adopted by the Securities and Exchange Commission under the
Securities and Exchange Act of 1934, as the same may be amended from time to time, likewise
shall not constitute a default or an Event of Default hereunder.
(h) Litigation. The Issuer shall promptly notify the Bank in writing with respect to any
action, suit, investigation or proceeding (including any arbitration or mediation proceeding)
commenced or pending, the existence of which would cause the representation set forth in
Section 5.06(b) hereof to be untrue or inaccurate in any material respect if such representation
were made by the Issuer on the date such action, suit, investigation or proceeding was
commenced.
(i) Licenses, Permits, Etc. The Issuer will take all necessary and appropriate action to
ensure the continuance in force of all consents, licenses, permits, orders, decrees, approvals,
authorizations, registrations and filings obtained or made in connection with this Agreement, the
Notes, the Resolution and the other Basic Documents or to authorize the execution and delivery
by the Issuer of the Offering Memorandum and the execution, delivery and performance by the
Issuer of this Agreement, the Notes, the Resolution or the other Basic Documents, the absence of
which consents, licenses, permits, orders, decrees, approvals, authorizations, registrations and
filings would have a material adverse effect on the ability of the Issuer to perform its obligations
hereunder, under the Notes, the other Basic Documents or the Senior Lien Master Resolution or
Intermediate Lien Master Resolution.
(j) Books and Records. The Issuer shall keep or cause to be kept adequate and proper
records and books of account with respect to the Issuer and the management and operation of the
Facilities in which complete and correct entries shall be made, reflecting all financial
transactions of the Issuer in connection with the proceeds of the Notes.
(k) Maintenance of Existence. The Issuer shall preserve and maintain its existence as a
municipal corporation organized and existing under the laws of the State, and its rights,
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franchises and privileges material to the conduct of its business and the operation of its Facilities
as from time to time being conducted or operated.
(l) Offering Memoranda and Official Statements. Upon request, the Issuer shall
furnish to the Bank a copy of any offering memorandum or official statement prepared in
connection with the sale of any securities by the Issuer.
(m) Notice of Material Adverse Change. The Issuer shall notify the Bank as soon as
possible after any member of the office of the Chief Financial Officer of the Issuer acquires
knowledge of the occurrence of any event which, in the reasonable judgment of such member or
officer, is likely to have a material adverse effect on the financial condition or operations of the
Issuer or affect the ability of the Issuer to perform its obligations under the Notes, this
Agreement or under any other Basic Document. The occurrence of any such event shall not, in
and of itself, constitute an Event of Default under this Section 6.01(m) unless the occurrence of
such event would otherwise be an Event of Default under another provision of this Agreement.
(n) Ratings and CUSIP Number. The Issuer shall at all times (i) maintain, or cause to
be maintained, a short-term credit rating on the Notes by any two of Fitch, Moody's or S&P, (ii)
maintain, or cause to be maintained, Ratings on Subordinate Lien Parity Bonds from any two of
Moody's, Fitch or S&P, and (iii) maintain, or cause to be maintained, an Investment Grade longterm
credit rating by any one of Moody's, Fitch or S&P applicable to the Reimbursement Note.
(o) Dealer and Dealer Agreement. The Issuer will cause a Dealer acceptable to the
Bank to be in place at all times while this Agreement is in effect or any Notes secured by the
Letter of Credit are Outstanding. The Issuer shall require in the Dealer Agreement that the
Dealer to use its best efforts to sell Notes secured by the Letter of Credit up to the Maximum
Rate to pay maturing Notes. If the Dealer fails to perform its duties under the Dealer Agreement
(including without limitation failing to use its best efforts to sell Notes secured by the Letter of
Credit up to the Maximum Rate), then the Issuer agrees, at the written request of the Bank, to
cause the Dealer to be replaced with another commercial paper dealer satisfactory to the Bank.
The Issuer shall require in the Dealer Agreement that the Dealer may not resign until the earlier
of (i) the appointment of a Dealer which is acceptable to the Bank and such Dealer's acceptance
of such appointment and (ii) the date which is at least thirty (30) days following the receipt by
the Issuer, the Registrar and the Bank of prior written notice of such resignation. The Issuer
shall immediately notify the Bank of any resignation of a Dealer.
(p) Rate Covenant. The Issuer shall at all times comply with the Subordinate Lien Rate
Covenant.
(q) Reserved.
(r) Maintenance of Insurance. The Issuer shall maintain, or cause to be maintained,
insurance on the Facilities and with respect to its business operations and properties against such
risks, in such amounts, with such companies and with such deductibles as required by
Section 5.07(e) of the Resolution.
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(s) Alternate Credit Facility. In the event that the Bank delivers a notice to the Issuer
and the Registrar that the expiration date of the Letter of Credit will not be extended beyond its
then present expiration date, the Issuer shall promptly, and in any event not less than ten (10)
days prior to the Stated Expiration Date, obtain a commitment for an Alternate Credit Facility or
pay all outstanding Notes secured by the Letter of Credit. The Issuer agrees that any termination
of the Letter of Credit as a result of the provision of any Alternate Credit Facility will require, as
a condition thereto, that the Issuer or the issuer of the Alternate Credit Facility will provide funds
on the date of such termination or provision, which funds will be sufficient to insure the payment
of all amounts due to the Bank hereunder, including without limitation, the repayment of all
unreimbursed Drawings and Term Loans together with accrued but unpaid interest thereon.
Without limiting the foregoing, not less than ten (10) days prior to the Stated Expiration Date,
the Issuer shall either obtain a commitment for an Alternate Credit Facility or pay all outstanding
Notes secured by the Letter of Credit. On the date of any such replacement or payment, the
Issuer shall pay to the Bank an amount equal to the outstanding principal amount of any and all
other obligations (other than Term Loans) payable hereunder. The Issuer shall not permit an
Alternate Credit Facility to become effective with respect to less than all of the Notes supported
by the Letter of Credit without the prior written consent of the Bank.
(t) Environmental Laws. The Issuer shall comply in all material respects with all
Environmental Laws applicable to ownership or use of the Facilities, and will cause, to the extent
possible, its tenants and other Persons occupying or using the Facilities to comply with such
Environmental Laws (through covenants to such effect to be inserted into any lease or other
occupancy agreement executed on or after the Date of Issuance with such tenants or occupants),
will timely pay or cause to be paid all costs and expenses incurred in such compliance, and will
keep or cause to be kept all of the Facilities free and clear of any Liens imposed pursuant to such
Environmental Laws, unless the same are being contested in good faith and by appropriate legal
proceedings and such contest shall operate to stay the material adverse effect of any such noncompliance.
(u) Amendments. The Issuer shall provide, within a reasonable period of time after
adoption of any resolution pursuant to which the Issuer intends to issue any Permitted Prior Lien
Bonds or Subordinate Lien Parity Bonds, but no later than thirty (30) days after such adoption,
written notice thereof, and reasonable prior written notice of, together with a draft of, any other
proposed amendments to, or modifications of, any of the Basic Documents.
(v) Payment of Obligations; Removal of Liens. The Issuer shall pay all assessments or
other governmental charges as the same respectively become due, all taxes, assessments (general
or special) and governmental charges of any kind whatsoever that may be at any time lawfully
assessed or levied against or with respect to any of the Available Revenue or any interest thereon
and promptly discharge or cause to be discharged all liens, encumbrances and charges on such
Available Revenue.
(w) Maintenance of Assets. The Issuer shall at all times keep and maintain or cause to
be kept or maintained all of the Facilities in good repair, working order and condition and shall at
all times operate or cause to be operated the same and the business or businesses in connection
therewith in an efficient manner and at a reasonable cost.
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(x) Disclosure to Participants. The Issuer shall permit the Bank to disclose the
information described in Sections 6.01(a) through 6.01(d) hereof to any participants of the Bank
in this Agreement.
(y) Reserved.
(z) Further Assurances. From time to time hereafter, the Issuer will execute and
deliver such additional instruments, certificates or documents, and will take all such actions as
the Bank may reasonably request for the purposes of implementing or effectuating the provisions
of this Agreement or the other Basic Documents or for the purpose of more fully perfecting or
renewing the rights of the Bank with respect to the rights, properties or assets subject to such
documents (or with respect to any additions thereto or replacements or proceeds thereof or with
respect to any other property or assets hereafter acquired by the Issuer which may be deemed to
be a part thereof). Upon the exercise by the Bank of any power, right, privilege or remedy
pursuant to this Agreement or the other Basic Documents which requires any consent, approval,
registration, qualification or authorization of any governmental authority or instrumentality, the
Issuer will execute and deliver all necessary applications, certifications, instruments and other
documents and papers that the Bank may be required to obtain for such governmental consent,
approval, registration, qualification or authorization.
(aa) Other Obligations. If the Issuer issues other obligations, incurs additional Debt
payable from or secured by the Gross Revenues or any Available Revenue or has or shall enter
into or otherwise consent to any Bank Agreement or Swap Agreement (or any amendment,
supplement or other modification thereof) with any Person, which provides the holder of such
Debt or obligation or any Person with (1) a cross default to any Debt or obligation payable or
secured on a basis senior to such Debt, obligation, Bank Agreement or Swap Agreement, or (2)
any right of acceleration or a remedy which permits such counterparty to any such Bank
Agreement or Swap Agreement to cause such Debt to become due and payable prior to its stated
maturity, such provisions containing such cross default or greater acceleration rights shall be
deemed automatically incorporated into this Agreement and the Issuer shall also deliver a copy
of such agreement or obligation to the Bank. Moreover, to the extent provisions of this
Agreement are required to be modified to reflect such provisions, the parties agree that this
Agreement shall be deemed modified.
(bb) Legal Authority. At all times, the Issuer shall have the legal authority to issue bonds
or other indebtedness secured by or payable from Gross Revenues or Available Revenue to
enable it to repay an amount at least equal to the sum of (i) the aggregate principal amount of the
Notes authorized under the Resolution, plus (ii) the Obligations hereunder and under the Fee
Letter.
Section 6.02. Negative Covenants. As long as this Agreement is in effect, and until all
amounts payable hereunder and under the Fee Letter, including, without limitation, the
Reimbursement Note are indefeasibly paid in full, the Issuer will perform and observe the
covenants set forth below, unless the Bank shall otherwise consent in writing:
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(a) Fundamental Changes. Except as required by applicable law, the Issuer
shall not merge, dissolve, liquidate or consolidate with or into another Person.
(b) No Amendments. The Issuer shall not amend, extend, modify, waive,
revise or otherwise alter or terminate:
(i) any term of the Notes or the Resolution; or
(ii) if such amendment, modification or termination could have an
adverse impact on the rights of the Bank hereunder or thereunder, any provisions
contained in Sections 2, 3, 5, 6, 7(a) through (f), 9(i), 14, 16, 17, 19 or 21 of the
Senior Lien Master Resolution, or Sections 2, 3, 5, 6(a) through (f), 7, 8(j), 9, 10
or 11 of the Intermediate Lien Master Resolution.
(c) Tax Status of Notes. The Issuer shall not invest the proceeds of any taxexempt
Notes in any way that would violate the Code or cause such Notes to be
"arbitrage bonds" or knowingly take any action or omit to take any action if such action
or omission would adversely affect the exclusion of interest on such Notes from gross
income of the holders thereof for Federal income tax purposes.
(d) Dealer. The Issuer shall not appoint, remove or consent to the
appointment or removal of a Dealer with respect to the Notes secured by the Letter of
Credit without the consent of the Bank.
(e) Debt. The Issuer shall not issue any Debt except as permitted by the
Resolution.
(f) Offering Document. The Issuer shall not permit the marketing of Notes
pursuant to any Offering Memorandum or other offering document unless the Bank shall
have approved in writing of the description of the Bank contained in such document.
(g) Rights of Bank. The Issuer shall not take action, or cause the Registrar to
take any action, under or with respect to any of the Basic Documents if such action could
result in a Material Adverse Effect; provided, however, that any action taken to issue any
Debt under such documents, which Debt is otherwise permitted to be issued hereunder,
shall not, by itself, be deemed capable of causing a Material Adverse Effect.
(h) Alternate Credit Facility. The Issuer shall not so long as any of the
Issuer's obligations hereunder remain unpaid, cause the Registrar to cancel the Letter of
Credit or replace the Letter of Credit with an Alternate Credit Facility under the
Resolution unless the Issuer shall have received a firm underwriting commitment from a
purchaser to purchase the Notes secured by the Letter of Credit or unless the Issuer shall
have on deposit with the Registrar or otherwise sufficient funds to reimburse the Bank for
any Drawing made in connection therewith.
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(i) No Liens. The Issuer shall not create or suffer to be created any pledge of
or Lien on the Available Revenue or any of the funds pledged to the Bank pursuant to
Section 2.09 hereof, other than the pledge and Lien provided for in and permitted by the
Resolution and the Subordinate Lien Resolutions, and the Issuer will take all actions and
do all things necessary to maintain the pledge of and the Lien on the Available Revenue
and such funds.
(j) Accounting Changes. The Issuer shall not make any material change in its
accounting policies or financial reporting practices that would be inconsistent with
GAAP.
(k) Maximum Amount. The Issuer shall not permit the marketing of Notes
secured by the Letter of Credit in an aggregate principal amount at such interest rate and
for such interest period such that the principal and interest due on all Outstanding Notes
secured by the Letter of Credit upon maturity all such Notes, would exceed the Available
Amount.
(l) Maximum Rate. The Issuer shall not elect to not issue Notes secured by
the Letter of Credit to pay maturing Notes secured by the Letter of Credit up to the
Maximum Rate, or otherwise take action to restrict the interest rate to be paid on Notes
secured by the Letter of Credit below the Maximum Rate, if such election or action
results in a Drawing on the Letter of Credit or nonpayment of a then outstanding Term
Loan.
(m) Reserved.
(n) Offering Memorandum. Except for the Offering Memorandum, the Issuer
shall not refer to any financial information relating to the Bank or any of the Bank's long
or short-term credit ratings in any official statement or similar offering document, or
make any changes in reference to any financial information relating to the Bank or any of
the Bank's long or short-term credit ratings that appear in theOffering Memorandum or
any official statement or similar offering document, in each case without the Bank's
written consent thereto, such consent not to be unreasonably withheld.
(o) Swap Agreements. The Issuer will not enter into any Swap Agreement
relating to any obligation secured by or payable from all or any portion of the Gross
Revenues or the Available Revenue wherein any termination payments thereunder are
payable or secured on a basis that is senior to or on parity with the payments on the Notes
or the other obligations of the Issuer hereunder.
(p) Sovereign Immunity. If the defense of sovereign immunity in respect of
contract claims becomes available to the Issuer, the Issuer agrees, to the fullest extent
permitted by law, not to assert the defense of sovereign immunity in any proceeding to
enforce any of the obligations of the Issuer under this Agreement or (to the extent it could
affect the Bank) any other Basic Document in any court of competent jurisdiction.
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(q) Federal Reserve Board Regulations. The Issuer shall not use any portion
of the proceeds from the issuance of the Notes or Drawings under the Letter of Credit for
the purpose of carrying or purchasing any margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System), and shall not
incur any Debt which is to be reduced, retired or purchased by the Issuer out of such
proceeds.
ARTICLE VII
EVENTS OF DEFAULT, REMEDIES
Section 7.01. Events of Default. Each of the following events shall constitute an "Event
of Default" hereunder:
(a) Payments. The Issuer shall:
(i) fail to pay any amount due under Articles II or III hereof, under the
Reimbursement Note or under any Notes secured by the Letter of Credit (other
than as a result of the failure of the Bank to honor any properly presented and
conforming draw under the Letter of Credit) when the same shall become due and
payable; or
(ii) fail to pay any other amount payable hereunder or under the
Reimbursement Note within three (3) Business Days of the date the same shall
become due and payable.
(b) Representations Untrue. Any representation, warranty, certification or
statement made by the Issuer in this Agreement or in any other Basic Document or in any
financial statement or certificate delivered pursuant to clauses (a) and (b) of Section 6.01
hereof shall (in any such case) have been incorrect or untrue in any materially adverse
respect when made or deemed to have been made.
(c) Certain Covenant Defaults. The Issuer shall default in the due
performance or observance of any term, covenant or agreement contained in clauses
(f)(i), (k), or (p) of Section 6.01 hereof or in Section 6.02 (except clause (l) of such
Section) hereof.
(d) Other Covenant Defaults. The Issuer shall default in the due performance
or observance of any term, covenant or agreement contained herein (other than those
covered by clause (a) or (c) of this Section) and such default, if capable of being
remedied, shall remain unremedied for thirty (30) days after written notice thereof shall
have been given to the Issuer by the Bank or the Issuer first becomes aware thereof;
provided, however, if a default under clauses (g), (i), (j), (n), (o), (r), (t), (v), (w), (z), or
(bb) of Section 6.01 hereof is capable of being cured and cannot reasonably be cured
within said thirty (30) day period, then the Issuer shall have an additional maximum
thirty (30) day period to cure such default and no Event of Default shall be deemed to
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exist hereunder so long as the Issuer commences such cure within the initial thirty (30)
day period and diligently and in good faith pursues such cure to completion within such
resulting maximum sixty (60) day period from the date of the Bank's notice or the
Issuer's awareness.
(e) Invalidity. (i) This Agreement, the Senior Lien Master Resolution, the
Intermediate Lien Master Resolution, the Resolution, the Notes, the Reimbursement Note
or the Fee Letter or any material provision hereof or thereof, at any time after its
adoption, issuance or execution and delivery, shall, for any reason, cease to be valid and
binding on the Issuer or in full force and effect or be declared to be null and void by a
final non-appealable judgment of a court of competent jurisdiction, or the validity or
enforceability of any such document or provision shall be contested by the Issuer or the
Issuer shall deny that it has any or further liability or obligation under any such document
or
(ii) any other Basic Document or any material provision thereof, at any time
after its execution and delivery shall, for any reason, cease to be valid and binding on the
Issuer or in full force and effect or be declared to be null and void, or the validity or
enforceability of any such document or provision shall be contested by any governmental
agency or authority having jurisdiction over the Issuer; unless with respect to this clause
(ii), the same is being contested by the Issuer in good faith and by appropriate
proceedings and, under no circumstance could such invalidity or unenforceability have an
adverse impact on the ability of the Issuer to perform its obligations hereunder or under
the Notes, the Resolution, the Senior Lien Master Resolution or the Intermediate Lien
Master Resolution, the Reimbursement Note or the Fee Letter.
(f) Insolvency, Etc.
(i) The Issuer shall become insolvent or admit in writing its inability
to pay its debts as they mature, make an assignment for the benefit of creditors,
or shall declare a moratorium on the payment of its debts or apply for, consent to
or acquiesce in the appointment of a trustee, custodian, liquidator or receiver for
itself or any substantial part of its property, or shall take any action to authorize or
effect any of the foregoing; or in the absence of any such application, consent or
acquiescence, a trustee, custodian, liquidator or receiver shall be appointed for it
or for a substantial part of its property or revenues and shall not be discharged
within a period of sixty (60) days; or
(ii) The State or any other governmental authority having jurisdiction
over the Issuer or its Facilities imposes on the Issuer a debt moratorium, debt
restructuring, or comparable restriction on repayment when due and payable of
the principal of or interest on any debt by the Issuer or any receiver or other
governmental entity shall be appointed for the Issuer or the Facilities, or the
property or Facilities of the Issuer shall be condemned, seized, or otherwise
appropriated, if such condemnation, seizure or appropriation could have a
material adverse effect on the ability of the Issuer to perform its obligations under
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this Agreement, the Notes, the Resolution or under any other Basic Document, or
any bankruptcy, reorganization, debt arrangement or other proceeding under any
bankruptcy or insolvency law or any dissolution or liquidation proceeding shall be
instituted by or against the Issuer, in respect of the Issuer (or any action shall be
taken to authorize or effect the institution by it of any of the foregoing) and if
instituted against it, shall be consented to or acquiesced in by it, or shall not be
dismissed within a period of sixty (60) days.
(g) Pledge, Etc. Any pledge or security interest created by the Resolution, the
Subordinate Lien Resolutions or this Agreement to secure any amount due under any
Subordinate Lien Parity Bonds, the Reimbursement Note or this Agreement shall fail to
be fully enforceable with the priority required under this Agreement, the Resolution or
any Subordinate Lien Resolution, as the case may be, by reason of a final, non-appealable
judgment of a court of competent jurisdiction.
(h) Basic Document Default. The Issuer shall default in the due performance
or observance of any material term, covenant or agreement contained in any Basic
Document and the same shall not have been cured within any applicable cure period. For
avoidance of doubt, the parties agree that the failure of the Issuer to comply with the
Senior Lien Master Resolution or the Intermediate Lien Master Resolution shall, by itself,
not constitute a default or an Event of Default hereunder.
(i) Cross-Defaults. The Issuer shall fail to pay when due and payable
(whether by scheduled maturity, required prepayment, demand or otherwise) any
Subordinate Lien Parity Bonds (other than the Notes), or any interest or premium
thereon, and such failure shall continue beyond any applicable period of grace specified
in any underlying indenture, contract or instrument providing for the creation of or
concerning such Subordinate Lien Parity Bonds.
(j) Certain Unsatisfied Judgments. A final and non-appealable judgment or
court order for the payment of money in excess of $10,000,000 shall be rendered against
the Issuer, and such judgment or court order shall continue unsatisfied and in effect for a
period of one hundred eighty (180) consecutive days without being vacated, discharged
or satisfied.
(k) Attachment. Any of the funds on deposit in, or otherwise to the credit of,
any of the funds or accounts established under the Resolution shall become subject to any
writ, warrant or attachment, execution or similar process.
(l) Rating Downgrade, Etc. (i) If Moody's shall lower its Rating below
"Baa3" or S&P or Fitch shall lower its Rating below "BBB-", as applicable, or any
higher threshold (for example BBB or Baa2) contained in any similar default or event of
default contained in any Credit Facility or relating reimbursement agreement; or
(ii) any Rating Agency shall suspend or withdraw its Rating for credit-related
reasons.
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Section 7.02. Remedies. Upon the occurrence and during the continuance of any Event of
Default, the Bank at its option, upon notice to the Registrar and the Issuer, may do any one or
more of the following:
(a) declare the principal of and interest on all obligations payable hereunder
and under the Reimbursement Note to be due and payable in ten (10) equal semi-annual
installments on each Semi-annual Payment Date commencing with the first Semi-annual
Payment Date that is at least three (3) months following the occurrence of the Event of
Default leading to such remedy;
(b) reduce the Stated Amount to an amount equal to the principal amount of
all Outstanding Notes secured by the Letter of Credit together with interest which will
accrue thereon to the maturity date thereof and instruct the Issuer and the Registrar to
immediately cease issuing, delivering and selling additional Notes by delivering to the
Registrar a Notice of Termination in the form attached as Annex G to the Letter of Credit
and/or a Stop Issuance Instruction;
(c) issue the Final Drawing Notice (the effect of which shall be to cause the
Termination Date of the Letter of Credit to occur on the 10th day after the date of receipt
thereof by the Registrar);
(d) exercise any or all rights provided or permitted by law or in equity or
granted pursuant to this Agreement or any of the other Basic Documents in such order
and in such manner as the Bank may, in its sole judgment, determine; or
(e) deliver a Stop Issuance Instruction in the form of Exhibit D attached
hereto.
Section 7.03. Waiver of Remedies. No waiver of any breach of or default under any
provision of this Agreement or any other Basic Document shall constitute or be construed as a
waiver by the Bank of any subsequent breach of or default under that or any other provisionof
this Agreement or any other Basic Document.
Section 7.04. Remedies Not Exclusive. No remedy herein conferred upon the Bank is
intended to be exclusive of any other remedy herein or in any other agreement between the
parties hereto or by law provided or permitted, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at law, in equity or
by statute.
Section 7.05. Stop Issuance Instructions; Final Drawing Notice. (a) Notes may be
issued from time to time prior to the Termination Date in accordance herewith and with the terms
of and subject to the conditions set forth in the Resolution and the other Basic Documents so
long as (i) no Event of Default hereunder has occurred and is continuing, (ii) the Registrar is not
in receipt of a Stop Issuance Instruction then in effect given by the Bank pursuant to
Section 7.02(e) hereof and not rescinded and/or (ii) the Registrar is not in receipt of a Final
Drawing Notice in substantially the form attached to the Letter of Credit as Annex H-1.
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(b) Unless the Issuer shall have previously advised the Bank in writing that (i) any or
all of the representations and warranties deemed to have been made in Article V of this
Agreement are not true and correct on and as of the date the Bank honors such Drawing as
though made on and as of such date, except to the extent a representation or warranty relates
specifically to an earlier date (in which case such representation or warranty shall be true and
correct as of such date) or (ii) any event has occurred and is continuing, or would result from the
Bank honoring such Drawing, which constitutes an Event of Default, then the Issuer shall be
deemed to have represented and warranted on the date the Bank honors such Drawing that (i) the
representations and warranties deemed to have been made in Article V hereof and in each other
Basic Document shall be true and correct on and as of the date of such Drawing as though made
on and as of such date, and (ii) no event has occurred and is continuing, or would result from the
Bank honoring such Drawing, which constitutes an Event of Default.
(c) A Stop Issuance Instruction or the Final Drawing Notice shall be effective when
received by the Registrar; provided, however, that a Stop Issuance Instruction or the Final
Drawing Notice received by the Registrar after 12:00 noon Seattle time, on any day on which
Notes are being issued shall be effective on the next succeeding day. A Stop Issuance
Instruction or the Final Drawing Notice may be given by facsimile or electronic mail
transmission, confirmed in writing within twenty-four (24) hours, but the failure to so confirm
such Stop Issuance Instruction or the Final Drawing Notice in writing shall not render such Stop
Issuance Instruction or the Final Drawing Notice ineffective. The Bank agrees that if, after the
delivery of a Stop Issuance Instruction, the Bank determines that the conditions to the execution
and delivery of any Note have been satisfied and the Bank has received a notice from the Issuer
to such effect, then the Bank shall promptly deliver a notice (a copy of which shall be delivered
by the Bank to the Issuer and the Dealer) to the Registrar, rescinding such Stop Issuance
Instruction. The Bank will furnish a copy of any Stop Issuance Instruction or the Final Drawing
Notice to the Issuer and the Dealer promptly following delivery thereof to the Registrar, but the
failure to furnish any such copy shall not render ineffective such Stop Issuance Instruction or the
Final Drawing Notice.
The Bank shall not incur any liability as a result of the Bank's giving any Stop Issuance
Instruction. In addition, the Bank shall have no obligation to honor any Drawing under the
Letter of Credit the proceeds of which shall be used to pay the principal of and interest on
maturing Notes that were executed and delivered by the Registrar after receipt by theRegistrar
of a Stop Issuance Instruction or Final Drawing Notice.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Payments to the Bank. All payments to t he Bank hereunder shall be made
without setoff or counterclaim.
Section 8.02. Right to Set-off. (a) Upon the occurrence and during the continuance of any
Event of Default, the Bank is hereby authorized at any time and from time to time, without
notice to the Issuer (any such notice being expressly waived by the Issuer) and to the extent
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permitted by law, to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by the Bank to or for the credit or the account of the Issuer
against any and all of the obligations of the Issuer to the Bank then due and payable under this
Agreement or the Reimbursement Note, irrespective of whether or not such Bank shall have
made any demand hereunder. Notwithstanding anything in this Section to the contrary, nothing
in this Section 8.02 shall entitle the Bank to apply deposits at times earlier than or in amounts
greater than would be permitted under the priority of payments set forth in the Resolution.
Accordingly, the Bank's rights under this Section aresubject at all times to the priority of
payments set forth in, and all other provisions of, the Resolution, and are subject to the following
requirements:
(i) Prior to exercising any right of set-off the Bank shall make best efforts to
determine which deposits, if any, then held by the Bank to or for the credit or the account
of the Issuer are legally subject to set-off and application.
(ii) The Bank shall not set-off and apply any amounts that are not legally
available under the Resolution for such set-off and application, including without
limitation amounts that constitute bond proceeds, amounts that are held in a trust or
custodial capacity, amounts that are pledged to pay bonds and the application of which
would be inconsistent with the priority of the Lien of the Bank described in the
Resolution and under Section 2.09 hereof, or that would create a default under the
Issuer's bond or other contractual agreements orthat would be otherwise prohibited by
law.
(b) The Bank agrees to promptly notify the Issuer in writing after any such set-off and
application; provided that the failure to give such notice shall not in and of itself affect the
validity of such set-off and application. The rights of the Bank under this Section 8.02 shall be
in addition to all other rights and remedies (including, without limitation, other rights of set-off
or recoupment) that the Bank may have at law, in equity or by statute.
(c) In the event that in connection with the exercise of its rights under this Section 8.02
the Bank does set-off and apply any amounts that are not legally available under the Resolution
for such application, the Bank agrees to promptly (within one Business Day) return such
amounts to the Issuer or the Person or Persons legally entitled thereto. The rights of the Issuer
under this Section 8.02 shall be in addition to all other rights and remedies that the Issuer may
have at law, in equity or by statute.
Section 8.03. Liability of the Bank. The Issuer assumes all risks of the acts or omissions
of the Registrar and the Dealer with respect to the proceeds of a draw on the Letter of Credit.
Neither the Bank, nor any of its officers, directors, employees or agents shall be liable or
responsible for:
(i) the use which may be made of the proceeds of a draw on the Letter of
Credit or of any acts or omissions of the Registrar, the Dealer or any transferee in
connection therewith,
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(ii) the validity, sufficiency or genuineness of documents, or of any
endorsement(s) thereon (other than the validity as against the Bank of any agreement to
which the Bank is a party), even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged,
(iii) the lack of validity or enforceability of this Agreement, the Notes, the
Senior Lien Master Resolution, the Intermediate Lien Master Resolution, the Resolution,
the other Basic Documents or any other agreement or instrument relating thereto (other
than the validity or enforceability as against the Bank of any agreement to which the
Bank is a party), or
(iv) any other circumstances whatsoever in making or failing to make payment
under this Agreement or the Letter of Credit,
provided, that the Issuer shall have a claim against the Bank, and the Bank shall be liable to the
Issuer, to the extent of any direct, as opposed to incidental or consequential, damages suffered
by the Issuer to the extent that such direct damages are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from (x) the Bank's willful
misconduct or gross negligence in determining whether documents presented under the Letter of
Credit complied with the terms thereof, or (y) the Bank's willful failure or gross negligence in
failing to pay under the Letter of Credit after the presentation to it by the Registrar of a certificate
strictly complying with the terms and conditions of the Letter of Credit. In furtherance and not
in limitation of the foregoing, the Bank may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any notice or information
(other than actual knowledge of uncontested information) to the contrary.
Section 8.04. Indemnification. The Issuer, to the extent permitted by law, hereby
indemnifies and holds the Bank harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses which the Bank may incur or which may be claimed against the
Bank by any Person:
(a) by reason of any inaccuracy in any material respect, or any untrue
statement or alleged untrue statement of any material fact, contained in the Offering
Memorandum or any amendment or supplement thereto (other than information regarding
the Bank that was furnished to the Issuer by the Bank), or by reason of the omission or
alleged omission to state therein a material fact necessary to make the statements
contained in the Offering Memorandum in the light of the circumstances under which
they were made, not misleading; or
(b) by reason of or in connection with the execution or delivery of the
Offering Memorandum or the execution, delivery, performance or non-performance of
this Agreement or any other Basic Document or any transaction contemplated hereby or
by the Offering Memorandum or any other Basic Document; provided, however, that the
Issuer shall not be required to indemnify the Bank pursuant to this Section 8.04 for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of the Bank in determining
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whether the documents presented under the Letter of Credit complied with the terms
thereof, or (ii) the Bank's willful misconduct or gross negligence in failing to pay under
the Letter of Credit after the presentation to it by the Registrar of a certificate strictly
complying with the terms and conditions of the Letter of Credit.
In case any proceeding (including any governmental investigation) shall be instituted in
respect of which indemnity may be sought pursuant to this Section 8.04, the Bank shall promptly
notify the Issuer in writing, and the Bank will tender the defense thereof to the Issuer to be
conducted in accordance with the following parameters. The Bank shall manage the response
and course of action with respect to such proceeding and selection of counsel; provided that the
Bank shall in good faith use commercially reasonable efforts to consult with the Issuer regarding
the response and course of action with respect to such proceeding, and regarding selection of
counsel for the Bank in connection with such proceeding, which counsel shall be reasonably
satisfactory to the Bank and the Issuer, and the Issuer shall pay the reasonable fees and
disbursements of such counsel related to such proceeding. Counsel for the Bank shall provide
the Issuer with monthly invoices substantiating the reasonable fees an disbursements of such
counsel related to such proceeding to be paid by the Issuer. The Bank shall manage negotiations
and determinations regarding reasonable settlement of any such proceeding; provided that the
Bank shall in good faith use commercially reasonable efforts to consult with and obtain the
concurrence of the Issuer regarding any settlement of any such proceeding, but if settled or if
there shall be a final judgment against the Bank, the Issuer, to the extent permitted by law, agrees
to indemnify the Bank from and against any loss or liability by reason of such settlement of
judgment. Without prejudice to the survival of any other obligation of the Issuer under this
Agreement, the indemnities and related obligations of the Issuer contained in this Section 8.04
will survive payment of the Reimbursement Note, the Notes, the termination or expiration of the
Letter of Credit, and the full payment and performance of all other amounts and obligations of
the Issuer hereunder and under the Reimbursement Note.
Section 8.05. Costs and Expenses. The Issuer agrees to pay on demand:
(a) on the Date of Issuance, all costs and expenses paid or incurred by the
Bank (including the reasonable fees and out-of-pocket expenses of counsel for the Bank
(not to exceed an amount agreed to by the Bank and the Issuer in writing)) in connection
with the preparation, review, execution and delivery of this Agreement, the Letter of
Credit, the Resolution, the Offering Memorandum and the other Basic Documents and
(b) thereafter, all reasonable costs and expenses paid or incurred by the Bank
from time to time, including, without limitation, reasonable allocated costs of staff
counsel and reasonable fees and out-of-pocket expenses of other counsel for the Bank, in
connection with the filing, recording administration (other than normal routine
administration), enforcement, interpretation, maintenance, renewal or cancellation of this
Agreement, the Letter of Credit, the Resolution, the Offering Memorandum or the other
Basic Documents, or any waiver or consent hereunder or under any Basic Document or
any amendment hereof or thereof requested by the Issuer.
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Section 8.06. Participants. The Bank shall have the right to grant participations from
time to time (to be evidenced by one or more Participation Agreements) in this Agreement, the
Letter of Credit, the Reimbursement Note and the other Basic Documents to one or more
Participants, provided that the grant of any such participation shall not terminate or otherwise
affect any obligation of the Bank hereunder and provided, further, that the Issuer shall continue
to deal solely with the Bank for all purposes hereunder. Each Participant purchasing such a
participation shall in the discretion of the Bank have all rights of the Bank hereunder to the
extent of the participation purchased. The Issuer agrees that each Participant shall, to the extent
of its Participation, be entitled to the benefits of this Agreement and the Fee Letter (including,
without limitation, Section 3.02 and Section 8.04 hereof) as if such Participant were the Bank;
provided that no Participant shall have the right to declare, or to take actions in response to, an
Event of Default under Section 7.01 hereof; and provided further that no such Participant shall
be entitled to receive payment pursuant to Section 3.02 hereof in an amount greater than the
amount which would have been payable had the Bank not granted a participation to such
Participant. In connection with the granting of participations, the Bank may disclose to any
proposed Participant any information that the Issuer or a Dealer delivers or discloses pursuant to
this Agreement. The Bank shall give notice to the Issuer of any Participant that is granted a
participation pursuant to this Section 8.06.
Section 8.07. Successors and Assigns. (a) This Agreement shall be binding upon and
inure to the benefit of the Issuer, the Bank and their respective successors and assigns, except
that (i) the Issuer may not assign its rights or obligations hereunder or under the Reimbursement
Note or any interest herein or therein without the prior written consent of the Bank and (ii) so
long as no Event of Default has occurred and is continuing, the Bank may not, except as
provided in this Section 8.07 and in Section 8.06 hereof, assign its rights or obligations
hereunder or under the Reimbursement Note or the Letter of Credit or any interest herein or
therein without the prior written consent of the Issuer.
(b) The Bank may assign and pledge all or any portion of the obligations of the Issuer
hereunder or under the Reimbursement Note to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of Governors of the Federal
Reserve System and any Operating Circular issued by such Federal Reserve Bank; provided that
any payment in respect of such assigned obligations made by the Issuer to the Bank in
accordance with the terms of this Agreement shall satisfy the Issuer's obligations hereunder or
under the Reimbursement Note in respect of such assigned obligation to the extent of such
payment. No such assignment shall release the Bank from its obligations hereunder or under the
Letter of Credit.
Section 8.08. Modification or Waiver of this Agreement. This Agreement is intended by
the parties hereto as a final expression of their agreement with respect to the subject matter
hereof, and is intended as a complete and exclusive statement of the terms and conditions of that
agreement. No modification or waiver of any provision of this Agreement (including this
Section 8.08 and the Reimbursement Note) shall be effective unless the same shall be in writing
and signed by the Bank and the Issuer. Any modification or waiver referred to in this
Section 8.08 shall be effective only in the specific instance and for the specific purpose for which
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given. No notice to or demand on the Issuer in any case shall entitle the Issuer to any other or
further notice or demand in the same, similar or other circumstances.
Section 8.09. No Waiver of Rights by the Bank; Cumulative Rights. No course of dealing
or failure or delay on the part of the Bank in exercising any right, power or privilege hereunder
or under any other Basic Document shall preclude any other or further exercise or the exercise of
any right, power or privilege hereunder or under any other Basic Document. The rights of the
Bank under this Agreement, the Resolution and the other Basic Documents are cumulative and
not exclusive of any rights or remedies which the Bank would otherwise have.
Section 8.10. Governing Law; Waiver of Jury Trial.
(a) Governing Law. This Agreement shall be deemed to be a contract under, and shall
be governed by, and construed and interpreted in accordance with the law of the State; provided,
however, that any rights and obligations of the Bank hereunder shall be governed by and
constituted in accordance with the laws of the State of New York.
(b) Waiver of Jury Trial. Each of the Issuer and the Bank hereby waives to the extent
permitted by applicable law, any right it may have to have to a trial by jury in any legal
proceeding directly or indirectly arising out of or relating to the Letter of Credit, this Agreement,
any of the other Basic Documents or the transactions contemplated hereby or thereby (whether
based on contract, tort or other theory). Each party hereby:
(i) certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver, and
(ii) acknowledges that it and the other parties hereto have freely and
voluntarily entered into this agreement to waive trial by jury and have been induced to
enter into this Agreement by, among other things, the mutual waivers and certifications in
this Section 8.10.
(c) Jurisdiction and Venue. Each of the Issuer and the Bank hereby irrevocably
submits to the nonexclusive jurisdiction of any state or federal court sitting in Seattle, King
County, Washington, and in the borough of Manhattan in New York, New York in any action or
proceeding brought to enforce or otherwise arising out of or relating to this Agreement, the
Letter of Credit, the Reimbursement Note or the other Basic Documents, hereby waives any
objection to venue in any such court and any claim that such forum is an inconvenient forum and
agrees that a final judgment in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment or in any other manner provided by
law. Nothing in this Section 8.10 shall impair the right of the Issuer or the Bank to bring any
action or proceeding hereunder in the courts of any other jurisdiction.
Section 8.11. Notices. (a) Unless otherwise specified herein, all notices, requests,
demands or other communications to or upon the respective parties hereto or referred to herein
shall be deemed to have been given (i) in the case of notice by letter, when delivered, or (ii) in
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the case of notice by facsimile upon confirmation of receipt or by email upon confirmation as
described in Section 8.11(c) hereof, addressed as follows or to such other address, facsimile
number or email address as any of the parties hereto set forth below or as otherwise provided in
Section 8.11(d) hereof:
to the Issuer: Port of Seattle, Washington
Pier 69
2711 Alaskan Way
P.O. Box 1209
Seattle, Washington 98111
Attention: Chief Financial Officer
Telephone: (206) 787-3205
Telecopy: (206_ 787-3207
Email: __________________
Bank, with respect Sumitomo Mitsui Banking Corporation
to credit matters: 277 Park Avenue
New York, New York 10172
Attention: Public and Infrastructure Finance
Telephone: (212) 224-4000
Facsimile: (212) 224-5227
Bank, with respect
to Drawings under
the Letter of Credit: Sumitomo Mitsui Banking Corporation
277 Park Avenue
New York, New York 10172
Attention: Trade Credit Services District
Telephone: (212) 224-4000
Facsimile: (212) 224-4566
Email: ________________
with a copy to: Sumitomo Mitsui Banking Corporation
277 Park Avenue
New York, New York 10172
Attention: Public and Infrastructure Finance
Telephone: (212) 224-4000
Facsimile: (212) 224-5227
Email: __________________
to the Registrar: ___________________
_______________________
_______________________
Attention: ________________
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Telephone: (___) ___-_____
Telecopy: (___) ___-____
Email: ____________________
to the Dealer: [Dealer]
________________
________________
________________
Attention: ________________
Telephone: (___) ________________
Telecopy: (___) ________________
Email: ________________
(b) Unless otherwise specified herein, certain notices and other information to be
furnished pursuant to the terms of this Agreement shall be delivered as follows:
(i) For each Drawing, by facsimile, with receipt immediately confirmed
telephonically. The Paying Agent shall promptly deliver an original of such Drawing by
postage prepaid, U.S. mail; provided that the receipt of such original is not a condition to
the Bank's obligation to honor .
(ii) For each item to be delivered by the Issuer to the Bank pursuant to
Section 6.01(a) hereof, by email transmission.
(c) Electronic Communications. Notices and other communications to the Bank
hereunder may be delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the Bank, provided that the
foregoing shall not apply to Drawings under the Letter of Credit. The Bank or the Issuer may, in
its discretion, agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of such
procedures may be limited to particular notices or communications.
Unless the Bank otherwise prescribes, (i) notices and other communications sent to an
e-mail address shall be deemed received upon the sender's receipt of an acknowledgement from
the intended recipient (such as by the "return receipt requested" function, as available, return
e-mail or other written acknowledgement), provided that if such notice or other communication
is not sent during the normal business hours of the recipient, such notice or communication shall
be deemed to have been sent at the opening of business on the next business day for the
recipient, and (ii) notices or communications posted to an Internet or intranet website shall be
deemed received upon the deemed receipt by the intended recipient at its e-mail address as
described in the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
(d) Change of Address, Etc. The Issuer or the Bank may change its address, telecopier
or telephone number for notices and other communications hereunder by notice to the other
parties hereto.
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(e) Reliance by Bank. The Bank shall be entitled to rely and act upon any notices
(including telephonic notices) purportedly given by or on behalf of the Issuer even if such
notices were not made in a manner specified herein, were incomplete or were not preceded or
followed by any other form of notice specified herein. To the extent permitted by law, the Issuer
shall indemnify any Indemnified Person for all losses, costs, expenses and liabilities resulting
from the reliance by such Person on each notice purportedly given by or on behalf of the Issuer;
provided, however, that the Issuer shall not be required to indemnify the Bank for any losses,
costs, expenses or liabilities pursuant to this Section 8.11(e) to the extent, but only to the extent,
such costs, expenses or liabilities resulted from the willful misconduct or gross negligence of the
Bank. All telephonic notices to and other telephonic communications with the Bank may be
recorded by the Bank, and the Issuer hereby consents to such recording.
Section 8.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but both or all of which, when taken
together, shall constitute but one document, and shall become effective when copies hereof
which, when taken together, bear the signatures of each of the parties hereto.
Section 8.13. Certificates, Etc. In connection with the execution and delivery of this
Agreement, the parties hereto may rely on any certificates delivered by or on behalf of each other
respective party hereto as representations and warranties as to the matters therein certified.
Section 8.14. Severability. In case any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall negotiate in good faith to replace any invalid, illegal or
unenforceable provision with a valid provision, which, to the extent possible, will preserve the
economic effect of the invalid, illegal or unenforceable provisions.
Section 8.15. Headings. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement for any other
purpose.
Section 8.16. Waiver of Rules of Construction. The Issuer hereby waives any and all
provisions of law to the effect that an ambiguity in a contract or agreement should be interpreted
against the party responsible for its drafting.
Section 8.17. USA PATRIOT Act Notice. The Bank hereby notifies the Issuer that
pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies the Issuer, which information includes the name and address of the
Issuer and other information that will allow the Bank to identify the Issuer in accordance with the
Patriot Act. The Issuer agrees to, promptly following a request by the Bank, provide all such
other documentation and information that the Bank requests in order to comply with its ongoing
obligations under applicable "know your customer" and anti-money laundering rules and
regulations, including the Patriot Act.
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The Issuer shall (a) ensure that no person who owns a controlling interest in or otherwise
controls the Issuer is or shall be listed on the Specially Designated Nationals and Blocked Person
List or other similar lists maintained by OFAC, the Department of the Treasury or included in
any Executive Orders, that prohibits or limits the Bank from making any advance or extension of
credit to the Issuer or from otherwise conducting business with the Issuer and (b) ensure that the
proceeds of the Notes and Drawings shall not be used to violate any of the foreign asset control
regulations of OFAC or any enabling statute or Executive Order relating thereto.
Section 8.18. No Advisory or Fiduciary Relationship. In connection with all aspects of
each transaction contemplated hereby (including in connection with any amendment, waiver or
other modification hereof or of any other Basic Document), the Issuer acknowledges and agrees,
that: (a) (i) the services regarding this Agreement provided by the Bank and any Affiliate thereof
are arm's-length commercial transactions between the Issuer, on the one hand, and the Bank and
its Affiliates, on the other hand, (ii) the Issuer has consulted its own legal, accounting, regulatory
and tax advisors to the extent it has deemed appropriate, and (iii) the Issuer is capable of
evaluating, and understands and accepts, the terms, risks and conditions of the transactions
contemplated hereby and by the other Basic Documents; (b) (i) the Bank and its Affiliates each is
and has been acting solely as a principal and, except as expressly agreed in writing by the
relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary, for
the Issuer, or any other Person and (ii) neither the Bank nor any of its Affiliates has any
obligation to the Issuer with respect to the transactions contemplated hereby except those
obligations expressly set forth herein and in the other Basic Documents; and (c) the Bank and its
Affiliates may be engaged in a broad range of transactions that involve interests that differ from
those of the Issuer, and neither the Bank nor any of its Affiliates has any obligation to disclose
any of such interests to the Issuer.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
[Remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
and delivered by their respective officers thereunto authorized as of the date first above written.
PORT OF SEATTLE, WASHINGTON
By: ____________________________________
Name: ______________________________
Title: _______________________________
[Signature Page to Reimbursement Agreement]
EXHIBIT A
FORM OF IRREVOCABLE DIRECT-PAY LETTER OF CREDIT
EXHIBIT B
FORM OF REIMBURSEMENT NOTE
NO. R-1 November 19, 2015
UNITED STATES OF AMERICA
STATE OF WASHINGTON
PORT OF SEATTLE
SUBORDINATE LIEN REVENUE NOTES (COMMERCIAL PAPER)
The Port of Seattle, a municipal corporation of the State of Washington, (hereinafter
called the "Port"), for value received, hereby promises to pay to the order of Sumitomo Mitsui
Banking Corporation, acting through its New York Branch (the "Bank"), pursuant to that certain
Reimbursement Agreement, dated November 19, 2015 (the "Reimbursement Agreement"),
between the Port and the Bank, at the office of the Bank at 27 Park Avenue, New York, New
York 10172, the aggregate unpaid principal amount of all Term Loans (and other Drawing that
do not become Term Loans) (referred to below) made by the Bank from time to time pursuant to
the Reimbursement Agreement and the Letter of Credit on the dates and in the amounts provided
for in the Reimbursement Agreement.
The Port promises to pay interest on the unpaid principal amount of such Term Loans and
other Drawings on the dates and at the rate or rates provided for in the Reimbursement
Agreement. All payments of principal and interest shall be made in any coin or currency of the
United States of America which at the time of payment is legal tender for public and private
debts in immediately available funds. All capitalized terms used herein and not otherwise
defined herein shall have the meanings specified in the Reimbursement Agreement.
This Note is the Reimbursement Note referred to in the Reimbursement Agreement and is
entitled to the benefits thereof and of the Related Documents referred to therein. As provided in
the Reimbursement Agreement, this Reimbursement Note is subject to prepayment, in whole or
in part.
The Bank agrees, by acceptance of this Reimbursement Note, that it will make a notation
on the schedule attached hereto of all Drawings and Term Loans evidenced hereby and all
principal payments and prepayments made hereunder and of the date to which interest hereon has
been paid, all as provided in the Reimbursement Agreement; provided, however, that the failure
to make any such notation shall not limit or otherwise affect the obligation of the Port hereunder
with respect to payments of principal of and interest on this Reimbursement Note.
This Reimbursement Note is authorized by the Port Commission of the Port to be issued
for the purpose of financing and refinancing capital improvements, including refunding
outstanding notes of the Port for working capital and for paying maturing revenue notes of the
same series and/or reimbursing one or more credit providers for advances made therefor. This
Reimbursement Note is issued under and pursuant to and in full compliance with the
Constitution and laws of the State of Washington including Resolution No. 3456, as amended,
entitled "A RESOLUTION of the Port Commission of the Port of Seattle, authorizing the sale of
Subordinate Lien Revenue Notes (Commercial Paper) adopted by the Port Commission on
__________, 20__.
This Reimbursement Note is given to the Bank to evidence the Port's obligations under
the Reimbursement Agreement and the terms of the Reimbursement Agreement are hereby
incorporated by this reference in this Reimbursement Note, as fully as set forth in full herein.
This Reimbursement Note shall be deemed to be a contract under, and shall be governed
by, and construed and interpreted in accordance with the law of the State of Washington.
It is hereby certified that all acts, conditions and things required by the Constitution and
statutes of the State of Washington, resolutions and ordinances of the Port to be done precedent
to and in the issuance of this Reimbursement Note have happened, been done and performed.
IN WITNESS WHEREOF, THE PORT OF SEATTLE, has caused this Reimbursement Note to be
executed with the manual or facsimile signature of the Designated Port Representative.
[SEAL]
PORT OF SEATTLE, WASHINGTON
By: ____________________________________
Name: ______________________________
Title: _______________________________
By: ____________________________________
Name: ______________________________
Title: _______________________________
Exhibit B-2
SCHEDULE FOR REIMBURSEMENT NOTE DATED NOVEMBER 19, 2015
BY THE PORT OF SEATTLE
PAYABLE TO SUMITOMO MITSUI BANKING CORPORATION, ACTING THROUGH ITS NEW YORK
BRANCH
Amount of Amount of Date to Which Notation Made
Date Drawing or Principal Paid Interest Paid Due Date by
Term Loan
Made
EXHIBIT C
FORM OF CERTIFICATE OF ISSUER REGARDING NO EVENT OF DEFAULT
Financial Statement Date: ___________, ____
Sumitomo Mitsui Banking Corporation
277 Park Avenue
New York, New York 10172
Attention: Public and Infrastructure Finance
Telephone: (212) 224-4000
Facsimile: (212) 224-5227
Ladies and Gentlemen:
Reference is hereby made to that Reimbursement Agreement dated November 19, 2015
(the "Agreement"), between the Port of Seattle, a municipal corporation of the State of
Washington (the "Port") and Sumitomo Mitsui Banking Corporation, acting through its New
York Branch (the "Bank"). Capitalized terms used herein that are not defined shall have the
meaning set forth in the Agreement.
The undersigned Authorized Representative hereby certifies as of the date hereof that
he/she is the _____________________________ of the Port, and that, as such, he/she is
authorized to execute and deliver this Certificate to the Bank on the behalf of the Port, and that:
1. Attached hereto as Schedule 1 are the year-end audited financial statements required
by Section 6.01(b) of the Agreement for the fiscal year of the Port ended as of the above date,
together with the certification of the Accountant required by such section.
2. The undersigned has reviewed and is familiar with the terms of the Agreement and
the Resolution and has made, or has caused to be made under his/her supervision, a review of the
transactions and condition (financial or otherwise) of the Port during the accounting period
covered by the attached financial statements.
3. A review of the activities of the Port during such fiscal period has been made under
the supervision of the undersigned with a view to determining whether during such fiscal period
the Port performed and observed all its obligations under the Agreement and the Resolution, and
[select one:]
[to the best knowledge of the undersigned during such fiscal period, the Port
performed and observed each covenant and condition of the Agreement and the Resolution
applicable to it, and no Event of Default has occurred and is continuing.]
--or--
[certain covenants or conditions have not been performed or observed and the
following is a list of each such Event of Default and its nature and status:]
Delivery of an executed counterpart of a signature page of this Certificate by fax
transmission or other electronic mail transmission (e.g. "pdf" or "tif") shall be effective as
delivery of a manually executed counterpart of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
_____________, _____.
PORT OF SEATTLE, WASHINGTON
By: ____________________________________
Name: ______________________________
Title: _______________________________
Exhibit C-2
EXHIBIT D
[FORM OF STOP ISSUANCE INSTRUCTION]
[Dated Date]
Port of Seattle, Washington
______________________
______________________
______________________
Attention: ______________
[_____________________],
as Registrar
______________________
______________________
______________________
Attention: ______________
Re: Port of Seattle
Subordinate Lien Revenue Notes
(Commercial Paper)
Ladies and Gentlemen:
Pursuant to Section 7.02(e) of that certain Reimbursement Agreement, dated November
19, 2015 (the "Reimbursement Agreement"), by and between the Port of Seattle, Washington
(the "Issuer") and the undersigned, as Bank, you are hereby notified that (a) either (1) an "Event
of Default" under Section 7.01(_)of the Reimbursement Agreement has occurred and is now
continuing or (2) one or more of the representations and warranties of the Issuer set forth in the
Reimbursement Agreement (other than those set forth in Section 5.03(b) thereof), are in the
reasonable opinion of the Bank, no longer true and correct in all material respects and; (b) upon
receipt of this notice, (i) no new Notes, as defined in the Reimbursement Agreement, shall be
issued or authenticated under the Resolution, (ii) the Stated Amount of the Letter of Credit shall
be permanently reduced to $_____________, representing the principal amount of Notes
currently outstanding and interest thereon, and shall be further permanently reduced following
the maturity of any such Notes, and (iii) the Stated Amount shall no longer be reinstated
following payment by the Bank of any Drawings.
This Stop Issuance Instruction shall remain in effect unless you have received written
notification from us that this Stop Issuance Instruction has been rescinded.
Very truly yours,
SUMITOMO MITSUI BANKING CORPORATION,
acting through its New York Branch, as Bank
By: ____________________________________
Name: ______________________________
Title: _______________________________
cc: [DEALER]
[RATING AGENCIES]
D-2
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