Contigent Loan Agreement with the Lewis County PFD BOARD OF COUNTY COMMISSIONERS
LEWIS COUNTY, WASHINGTON
RE: A RESOLUTION OF THE BOARD OF )
COUNTY COMMISSIONERS )
APPROVING THE FORM OF A )
CONTINGENT LOAN AGREEMENT ) RESOLUTION NO. 18-211
WITH THE LEWIS COUNTY )
PUBLIC FACILITIES DISTRICT IN )
CONNECTION WITH THE )
DISTRICT'S BONDS AND )
AMENDING RESOLUTION NO. 10-
213
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF LEWIS COUNTY,
WASHINGTON, as follows:
WHEREAS, the Lewis County Public Facilities District (the "District") anticipates the
issuance and sale of not to exceed$8,000,000 aggregate principal amount of its Limited Sales Tax
Obligation Bonds, 2018A and Limited Sales Tax Obligation Refunding Bonds, 2018B (Taxable)
(together,the"Bonds"),the proceeds of which will be used to finance improvements and additions
to the multipurpose event center and sports complex known as the Northwest Sports Hub and
Sports Complex (the "Project"), refunding a portion of the District's outstanding Limited Sales
Tax Obligation Bonds, 2010 (Taxable Build America Bonds — Direct Payment) (the "2010
Bonds") (the "Refunding") and pay all or a portion of the loan provided by Lewis County (the
"County Loan"); and
WHEREAS, the District has requested that Lewis County (the "County") provide credit
support for the Bonds to permit the District to obtain financing for the capital costs of the Project,
to carry out the Refunding and repay all or a portion of the County Loan at the lowest available
interest rates; and
WHEREAS, the County and the District have the authority to enter into interlocal
agreements under chapters 35.57,35.59 and 67.28 RCW for joint and cooperative action,including
provisions to finance joint or cooperative undertakings,multipurpose community centers,regional
centers and tourism-related facilities; and
WHEREAS, the County has previously determined that it is in the best interest of the
County and its residents to provide for the design, construction, ownership, operation and/or
financing of the Project; and
WHEREAS, during the 2017 legislative session, RCW 82.14.390 was amended to extend
the imposition of the sales tax to not more than 40 years after the tax is first collected; and
4833-5105-0859.1
WHEREAS, the District and the County have determined that the most efficient and
effective method for obtaining County credit support, would be through the execution of a
contingent loan agreement to evidence the County's commitment to make loans to the District in
accordance with that agreement if, and only if and to the extent, necessary to secure the payment
of the principal of and interest on the Bonds, as such amounts become due and payable; and
WHEREAS, the Bonds will refund a portion of the 2010 Bonds and the Contingent Loan
Agreement dated October 8, 2010 between the County and the District will remain in effect as to
the non-refunded 2010 Bonds so long as those bonds are outstanding; and
WHEREAS,pursuant to RCW 36.100.025,an independent financial feasibility review(the
"Independent Financial Feasibility Review") is required to be performed prior to the issuance by
the District of any indebtedness; such review is to be conducted by the State Department of
Commerce through the Municipal Research and Services Center under RCW 43.100.030 or under
a contract with another entity under the authority of RCW 43.110.080; such review must examine
the potential costs to be incurred by the District and the adequacy of revenues or expected revenues
to meet those costs; and such review, upon completion, is to be submitted to the Governor, the
State Treasurer, the State Auditor, the District, the County, other participating local political
subdivisions and appropriate committees of the State Legislature; and
WHEREAS, the County has previously determined that it is in the best interest of the
County and its residents to provide for the design, construction, ownership, operation and/or
financing of the Project in accordance with the two construction phases set forth in a Construction
Agreement by and between the Parties (the "Construction Agreement")to be entered into prior to
the issuance of the Bonds; and
NOW, THEREFORE, BE IT RESOLVED:
Section 1. Approval of Form of Contingent Loan Agreement. The Board of County
Commissioners hereby approves the form of contingent loan agreement attached as Exhibit A and
incorporated herein by this reference.
Section 2. Execution of Contingent Loan Agreement and Related Documents. The Board of
County Commissioners authorizes and directs the Board Chair,in connection with the issuance of
the Bonds, to execute the contingent loan agreement substantially in the form attached at
Exhibit A, together with such additions and modifications that the Chair determines to be
consistent with the purposes of this resolution and the final form of resolution authorizing the
issuance of the Bonds, subject to the following limitations:
A. The total principal amount of the Bonds(to be issued in two series)shall not exceed
$8,000,000.
B. The final maturity date of the Bonds (including any subsequent bonds refunding
the Bonds) shall be no later than December 31, 2047, as may be extended if the
imposition of the sales tax is extended with the approval of the County.
4833.5105-0859.1
C. The Independent Financial Feasibility Review is completed and is acceptable to the
County.
D. The County and the District have executed a Construction Agreement.
E. The District agrees in the resolution authorizing the Bonds or in a separate
agreement that the District will repay the loan the County made to the District in
2010 and that is currently outstanding in the amount of $366,667 as follows:
(1) $122,222 to be paid from Bond proceeds and (2) three annual payments of
$61,111 each in 2021-2023 and a fourth payment of$61,112 in 2024.
Section 3. Amending Resolution No. 10-213. In the 2017 legislative session,RCW 82.14.390
was amended to extend the imposition of the sales tax authorized for regional centers to up to 40
years after the tax is first collected, or such date as the bonds issued to finance or refinance the
regional center are no longer outstanding. The District began collecting the sales tax in October
2007. The County amends Section 2(B)of Resolution No. 10-213 to extend the final maturity date
of any bonds to refund the 2010 Bonds(such as the Bonds),to December 31, 2047.
Section 4. Ratification of Prior Acts. Any action taken consistent with the authority of this
resolution, after its passage but prior to its effective date, is ratified, approved and confirmed.
ADOPTED this 25th day of June, 2018.
SUBSTITUTED THIS JULY 2, 2018, NUNC PRO TUNC FOR THE RESOLUTION PASSED IN
OPEN SESSION ON JUNE 25, 2018, WHICH LISTED "$336,667" INSTEAD OF "$366,66T AS
A SCRIVENER'S ERROR AND "FOUR ANNUAL PAYMENTS OF$61,111 EACH IN 2021-2024"
INSTEAD OF"THREE ANNUAL PAYMENTS OF $61,111 EACH IN 2021-2023 AND A FOURTH
PAYMENT OF $61,112 IN 2024" AS A SCRIVENER'S ERROR IN THE UNDERLINED ABOVE.
ATTEST: BOARD OF COUNTY COMMISSIONERS
LEWIS COUNTY, WASHINGTON
Clerk of the Board Chairperson
Approved as to form only: em•er W •
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• -.u 'fir,se u ing Attorney Member
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4833-5105-0859.1 0 y „
BOARD OF COUNTY COMMISSIONERS
LEWIS COUNTY, WASHINGTON
RE: A RESOLUTION OF THE BOARD OF )
COUNTY COMMISSIONERS )
APPROVING THE FORM OF A
CONTINGENT LOAN AGREEMENT ) RESOLUTION NO. 1 3-Z1
WITH THE LEWIS COUNTY )
PUBLIC FACILITIES DISTRICT IN )
CONNECTION WITH THE DISTRICT'S )
BONDS AND AMENDING )
RESOLUTION NO. 10-213
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF LEWIS
COUNTY, WASHINGTON, as follows:
WHEREAS, the Lewis County Public Facilities District (the "District") anticipates the
issuance and sale of not to exceed $8,000,000 aggregate principal amount of its Limited Sales
Tax Obligation Bonds, 2018A and Limited Sales Tax Obligation Refunding Bonds, 2018B
(Taxable) (together, the "Bonds"), the proceeds of which will be used to finance improvements
and additions to the multipurpose event center and sports complex known as the Northwest
Sports Hub and Sports Complex (the "Project"), refunding a portion of the District's outstanding
Limited Sales Tax Obligation Bonds, 2010 (Taxable Build America Bonds — Direct Payment)
(the "2010 Bonds") (the "Refunding") and pay all or a portion of the loan provided by Lewis
County(the "County Loan"); and
WHEREAS, the District has requested that Lewis County (the "County") provide credit
support for the Bonds to permit the District to obtain financing for the capital costs of the
Project, to carry out the Refunding and repay all or a portion of the County Loan at the lowest
available interest rates; and
WHEREAS, the County and the District have the authority to enter into interlocal
agreements under chapters 35.57, 35.59 and 67.28 RCW for joint and cooperative action,
including provisions to finance joint or cooperative undertakings, multipurpose community
centers, regional centers and tourism-related facilities; and
WHEREAS, the County has previously determined that it is in the best interest of the
County and its residents to provide for the design, construction, ownership, operation and/or
financing of the Project; and
WHEREAS, during the 2017 legislative session, RCW 82.14.390 was amended to extend
the imposition of the sales tax to not more than 40 years after the tax is first collected; and
52941971.4
4835-2335-4471.1
WHEREAS, the District and the County have determined that the most efficient and
effective method for obtaining County credit support, would be through the execution of a
contingent loan agreement to evidence the County's commitment to make loans to the District in
accordance with that agreement if, and only if and to the extent, necessary to secure the payment
of the principal of and interest on the Bonds, as such amounts become due and payable; and
WHEREAS, the Bonds will refund a portion of the 2010 Bonds and the Contingent Loan
Agreement dated October 8, 2010 between the County and the District will remain in effect as to
the non-refunded 2010 Bonds so long as those bonds are outstanding; and
WHEREAS, pursuant to RCW 36.100.025, an independent financial feasibility review
(the "Independent Financial Feasibility Review") is required to be performed prior to the
issuance by the District of any indebtedness; such review is to be conducted by the State
Department of Commerce through the Municipal Research and Services Center under RCW
43.100.030 or under a contract with another entity under the authority of RCW 43.110.080; such
review must examine the potential costs to be incurred by the District and the adequacy of
revenues or expected revenues to meet those costs; and such review, upon completion, is to be
submitted to the Governor, the State Treasurer, the State Auditor, the District, the County, other
participating local political subdivisions and appropriate committees of the State Legislature; and
WHEREAS, the County has previously determined that it is in the best interest of the
County and its residents to provide for the design, construction, ownership, operation and/or
financing of the Project in accordance with the two construction phases set forth in a
Construction Agreement by and between the Parties (the "Construction Agreement") to be
entered into prior to the issuance of the Bonds; and
NOW,THEREFORE,BE IT RESOLVED:
Section 1. Approval of Form of Contingent Loan Agreement. The Board of County
Commissioners hereby approves the form of contingent loan agreement attached as Exhibit A
and incorporated herein by this reference.
Section 2. Execution of Contingent Loan Agreement and Related Documents. The Board of
County Commissioners authorizes and directs the Board Chair, in connection with the issuance
of the Bonds, to execute the contingent loan agreement substantially in the form attached at
Exhibit A, together with such additions and modifications that the Chair determines to be
consistent with the purposes of this resolution and the final form of resolution authorizing the
issuance of the Bonds, subject to the following limitations:
A. The total principal amount of the Bonds (to be issued in two series) shall not
exceed $8,000,000.
B. The final maturity date of the Bonds (including any subsequent bonds refunding
the Bonds) shall be no later than December 31, 2047, as may be extended if the
imposition of the sales tax is extended with the approval of the County.
52941971.4
4835-2335-4471.1
C. The Independent Financial Feasibility Review is completed and is acceptable to
the County.
D. The County and the District have executed a Construction Agreement.
E. The District agrees in the resolution authorizing the Bonds or in a separate
agreement that the District will repay the loan the County made to the District in
2010 and that is currently outstanding in the amount of $336,667 as follows:
(1) $122,222 to be paid from Bond proceeds and (2) four annual payments of
$61,111 each in 2021-2024.
Section 3. Amending Resolution No. 10-213. In the 2017 legislative session,
RCW 82.14.390 was amended to extend the imposition of the sales tax authorized for regional
centers to up to 40 years after the tax is first collected, or such date as the bonds issued to finance
or refinance the regional center are no longer outstanding. The District began collecting the sales
tax in October 2007. The County amends Section 2(B) of Resolution No. 10-213 to extend the
final maturity date of any bonds to refund the 2010 Bonds (such as the Bonds), to December 31,
2047.
Section 4. Ratification of Prior Acts. Any action taken consistent with the authority of this
resolution, after its passage but prior to its effective date, is ratified, approved and confirmed.
YK
ADOPTED this �tS day of eikktte— , 2018.
••••••
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ATTEST: • $ & i •�9 • BOARD OF COUNTY COMMISSIONERS
•••&/ $ c)'4'\3s.• LEWIS COUNTY, WASHINGTON
ato SINCE \ 91
�°y � P ::
1845 , /
Clerk of the Board _: �MM�S ( ifE Fund, C
Robert C. Jackson, Member
Approved as to form only:
IMP° Gary S per, ember
D- •uty 'rosecuting Attorney
Ross 5 'PeTTRZS&M
52941971.4
4835-2335-4471.1
EXHIBIT A
Form of Contingent Loan Agreement
CONTINGENT LOAN AGREEMENT
by and between
LEWIS COUNTY, WASHINGTON
and
LEWIS COUNTY PUBLIC FACILITIES DISTRICT
relating to
NOT TO EXCEED $8,000,000
LEWIS COUNTY PUBLIC FACILITIES DISTRICT
LIMITED SALES TAX OBLIGATION AND REFUNDING BONDS, 2018
Dated �S , 2018
This document prepared by:
Foster Pepper PLLC
1111 Third Avenue, Suite 3000
Seattle, Washington 98101
(206) 447-4400
4833-5105-0859.1
TABLE OF CONTENTS
Page
ARTICLE 1. Definitions 9
ARTICLE 2. Loans to the District; Repayment Terms 10
Section 2.1 Loans to the District 10
Section 2.2 The Procedures for and Amount of Loans 10
Section 2.3 Additional Debt 11
Section 2.4 Repayment Terms 12
Section 2.5 Nature of District's Obligation 12
Section 2.6 Nature of County's Obligation 13
ARTICLE 3. Additional Obligations and Covenants 13
Section 3.1 Agreement to Issue Bonds 13
Section 3.2 Amendment of Bond Resolution and Issuance of Additional Sales Tax
Bonds 13
Section 3.3 Operating Reserve 13
Section 3.4 County Compliance with Continuing Disclosure Requirement 13
Section 3.5 Bond Resolution Provisions Regarding Application of Sales Tax
Revenue 14
Section 3.6 2010 Contingent Loan Agreement 15
Section 3.7 2018 Debt Service Reserve Account 15
ARTICLE 4. Remedies Upon Default 15
Section 4.1 Remedies Upon District Default 15
Section 4.2 Remedies of District on Default 15
Section 4.3 No Remedy Exclusive 15
Section 4.4 No Implied Waiver 16
Section 4.5 Agreement to Pay Attorneys' Fees and Expenses 16
Section 4.6 Dispute Resolution 16
ARTICLE 5. Miscellaneous 16
Section 5.1 Governing Law; Venue 16
Section 5.2 Notices 16
Section 5.3 Binding Effect 17
Section 5.4 Severability 17
Section 5.5 Amendments 17
Section 5.6 No Rights Created in Third Parties 17
Section 5.7 Refunding Bonds 17
Section 5.8 Time of Essence 17
Section 5.9 Execution in Counterparts 18
Section 5.10 Effective Date of and Termination of Contingent Loan Agreement 18
4833-5105-0859.1
CONTINGENT LOAN AGREEMENT
relating to
NOT TO EXCEED$8,000,000
LEWIS COUNTY PUBLIC FACILITIES DISTRICT
LIMITED SALES TAX OBLIGATION AND REFUNDING BONDS, 2018
(EVENT CENTER AND SPORTS COMPLEX)
This CONTINGENT LOAN AGREEMENT (this "Contingent Loan Agreement") dated
, 2018, is entered into by and between LEWIS COUNTY, WASHINGTON (the
"County"), a political subdivision of the State of Washington (the "State"), and the LEWIS
COUNTY PUBLIC FACILITIES DISTRICT (the "District"), a Washington public facilities
district (together, the"Parties"),
WITNES SETH:
WHEREAS,the District,a duly organized and legally existing Washington public facilities
district and municipal corporation, was created by the County in accordance with Chapter 36.100
of the Revised Code of Washington ("RCW"), pursuant to Resolution No. 07-247 of the County,
adopted on August 13, 2007. The boundaries of the District are coextensive with the boundaries
of the County; and
WHEREAS, the District is authorized by applicable provisions of state law, including
RCW 36.100.030, to acquire, construct, own, remodel, maintain, equip, repair and operate a
regional center(including multipurpose community centers and special events centers) and related
parking facilities; and
WHEREAS, the District was created before September 1, 2007, is located in a county that
has no other public facilities districts,has an estimated population of over 70,000,and commenced
construction of a new regional center in June, 2010, a date that is before January 1, 2011; and,
pursuant to Resolution No. 2007-001 of the District, adopted August 27, 2007, the District has
established and imposed a sales and use tax as authorized by RCW 82.14.390; and
WHEREAS, a public facilities district is authorized by RCW 36.100.060 to issue general
obligation bonds not to exceed an amount (together with any outstanding nonvoter approved
general obligation indebtedness) equal to one-half of one percent of the value of taxable property
within the district; and
WHEREAS, by Resolution No. 2010-007, the District's Board of Directors (the "Board")
authorized the issuance of$5,795,000 principal amount of Limited Sales Tax Obligation Bonds,
2010 (Taxable Build America Bonds — Direct Payment) (the "2010 Bonds"), to finance the
acquisition, construction and equipping of a regional center,including a multipurpose event center
and sports complex, together with related parking facilities (collectively, the"Center"); and
WHEREAS, the District and the County entered into a Contingent Loan Agreement dated
October 8,2010(the"2010 Contingent Loan Agreement"),pursuant to which, among other things,
in consideration of the District's issuance of the 2010 Bonds, the County is obligated to lend to the
District an amount sufficient,together with other money in the 2010 Debt Service Reserve Account
(defined herein), to replenish the 2010 Debt Service Reserve Account to the reserve requirement
4833-5105-0859.1
for the 2010 Bonds, and the District is obligated to borrow loans from the County and to deposit
all amounts received by it under the 2010 Contingent Loan Agreement in the 2010 Debt Service
Reserve Account; and
WHEREAS, in [2010] the County loaned the District $ (the"County Loan"); and
WHEREAS, it is anticipated that the District will issue not to exceed$8,000,000 aggregate
principal amount of its Limited Sales Tax Obligation and Refunding Bonds, 2018 (the "Bonds")
in one or more series, the proceeds of which will be used to finance improvements and additions
to the Center(the"Project"), to refund a portion of the 2010 Bonds and to repay all or a portion of
the County Loan; and
WHEREAS,the District has requested that the County provide credit support for the Bonds
to permit the District to obtain financing for the capital costs of the Project, to refund all or a
portion of the 2010 Bonds and repay all or a portion of the County Loan at the lowest available
interest rates; and
[WHEREAS, pursuant to RCW 36.100.025, an independent financial feasibility review
(the"Independent Financial Feasibility Review") is required to be performed prior to the issuance
by the District of any indebtedness; such review is to be conducted by the State Department of
Commerce through the Municipal Research and Services Center under RCW 43.100.030 or under
a contract with another entity under the authority of RCW 43.110.080; such review must examine
the potential costs to be incurred by the District and the adequacy of revenues or expected revenues
to meet those costs; and such review, upon completion, is to be submitted to the Governor, the
State Treasurer, the State Auditor, the District, the County, other participating local political
subdivisions and appropriate committees of the State Legislature;]
WHEREAS, the County and the District have the authority to enter into interlocal
agreements under chapters 35.57,35.59 and 67.28 RCW for joint and cooperative action, including
provisions to finance joint or cooperative undertakings,multipurpose community centers, regional
centers and tourism-related facilities; and
[WHEREAS, the County has previously determined that it is in the best interest of the
County and its residents to provide for the design, construction, ownership, operation and/or
financing of the Project in accordance with the two construction phases set forth in a Construction
Agreement by and between the Parties (the"Construction Agreement")to be entered into prior to
the issuance of the Bonds; and]
WHEREAS, the County, by Resolution No.18-211, adopted Suns 2 --2018, has approved
and authorized the execution of this Contingent Loan Agreement to evidence the County's
commitment to make loans to the District subject to and in accordance with this Contingent Loan
Agreement to secure the payment of the principal of and interest on the Bonds, as such amounts
become due and payable;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the
Parties hereby covenant and agree as follows:
4833-5105-0859.1
I.
Definitions
Unless the context clearly requires otherwise,the following terms shall have the respective
meanings set forth below for all purposes of this Contingent Loan Agreement. Unless the context
clearly requires otherwise, all other capitalized terms used but not defined in this Contingent Loan
Agreement shall have the meanings assigned to them in the Bond Resolution.
"2018 Debt Service Reserve Account" means the account of that name within the Bond
Fund, as established by the Bond Resolution.
"Bond" or"Bonds"means one or more of the District's Limited Sales Tax Obligation and
Refunding Bonds, 2018, or obligations of such other title as may be specified in the Bond
Resolution, issued in one or more series.
"Bond Fund"means the fund of that name established by Resolution No. 2010-007 of the
District's Board of Directors.
"Bond Resolution" means Resolution No. of the Board of Directors of the District
authorizing the issuance of the Bonds and specifying certain terms thereof, as amended and
supplemented from time to time.
"Business Day" means any day, other than a Saturday or a Sunday, on which banking
institutions are open in the State and in the states in which any of the offices of the Paying Agent
designated from time to time by the Paying Agent for the transfer or exchange of Bonds are located.
"Contingent Loan Agreement" means this Contingent Loan Agreement, including any
supplements or amendments hereto made in conformance herewith.
"County"means Lewis County, Washington.
"County Resolution" means Resolution No. , adopted by the Board of County
Commissioners on , 2018.
"Debt Service Payment Date" means each June 1 and December 1, commencing [June] 1,
2018.
"District"means the Lewis County Public Facilities District.
"Loan"has the meaning specified in Section 2.1.
"MSRB"means the Municipal Securities Rulemaking Board.
"Operating Reserve"means the reserve account previously created for the District.
"Paying Agent"means the fiscal agency of the State, as designated from time to time, and
its successors and assigns as bond registrar and paying agent for the Bonds as set forth in the Bond
Resolution.
4833-5105-0859.1
"Principal and Interest Account"means the account of that name within the Bond Fund, as
established by Resolution No. 2010-007 and continued by the Bond Resolution.
"Project" means the acquisition and construction of the following improvements to the
Lewis County Event Center and Sports Project: expansion of the building; improvements to
bathrooms, elevators, flooring and seating; and improvements to sports facilities.
"Refunding Bonds"means any bonds issued to refund all or a portion of the Bonds.
"Reserve Requirement" initially means the amount of money necessary to be deposited
into the 2018 Debt Service Reserve Account so that the sum of the 2018 Debt Service Reserve
Account and the 2010 Debt Service Reserve Account is $250,000. Once the 2010 Bonds are no
longer outstanding, the Reserve Requirement for the Bonds shall be $250,000 unless the County
agrees in writing to a lower amount. The Reserve Requirement may be recalculated in connection
with the redemption or cancellation of Bonds prior to their scheduled maturity, as set forth in the
Bond Resolution.
"Rule" means Rule 15c2-12(b)(5) adopted by the SEC under the Securities Exchange Act
of 1934, as the same may be amended from time to time.
"Sales Tax Revenue"means the money received by the District from the Washington State
Department of Revenue on account of the sales and use tax imposed by and collected for the
District pursuant to RCW 82.14.390, as the same may be amended from time to time, or any
successor statute. For purposes of this Contingent Loan Agreement, "Sales Tax Revenue" shall
also include the proceeds of any admissions tax imposed by the District under applicable law.
"SEC"means the federal Securities and Exchange Commission.
"Treasurer"means the Treasurer of the District, which currently is the County Treasurer.
II.
Loans to the District; Repayment Terms
A. Loans to the District. The County shall lend money to the District at the times and
in the amounts set forth in Section 2.2 (each a "Loan"). The District shall borrow each Loan by
the County pursuant to this Contingent Loan Agreement for the purpose of paying debt service on
the Bonds. The County irrevocably agrees to disburse all Loans made hereunder directly to the
Paying Agent for the purpose of paying principal of and interest on the Bonds. The aggregate
principal amount of outstanding loans to be made by the County pursuant to this Contingent Loan
Agreement shall not exceed the outstanding principal amount of the Bonds, plus all interest
accrued on the Bonds.
B. The Procedures for and Amount of Loans.
1. Notice of Insufficiency. Under the Bond Resolution the District is required to
make monthly deposits into the Principal and Interest Account equal to one-sixth of the interest or
one-twelfth of the principal next coming due on the Bonds. The County Treasurer is the Treasurer
of the District and holds the Principal and Interest Account on behalf of the District. If the District
4833-5105-0859.1
fails to make a monthly deposit or deposits less than the required deposit, the Treasurer and shall
immediately notify the County Treasurer's office and Board of County Commissioners in the form
of Exhibit A ("Notice of Missed Deposit").
On the 1st day of the month preceding each Debt Service Payment Date (or if the 1st day
of the month is not a Business Day, then on the next Business Day), the District and County
Treasurer shall review the amount on deposit in the Bond Fund(including the Principal and Interest
Account and 2018 Debt Service Reserve Account) to determine whether there will be sufficient
money available in the Bond Fund to make the required payment due on the upcoming Debt
Service Payment Date. If,upon such review,it appears that the money available in the Bond Fund
will be insufficient to make that payment, the District shall provide the County a notice in
substantially the form attached hereto as Exhibit B (a "Notice of Insufficiency") within five
Business Days after the date on which the review was required. Failure of the District to give a
Notice of Insufficiency to the County shall not relieve the County of its obligation to make loans
upon demand by the District under subsection (4) of this section. The District shall use amounts
in the 2018 Debt Service Reserve Account and other available reserves to fund the Principal and
Interest Account prior to requiring the County to make up the deficiency.
2. Budgeting for Loans. Upon receipt of a Notice of Insufficiency from the
District, the County shall, to the extent necessary, include in its budget the amounts required to
make the Loans described in subsection(3) of this section.
3. Loans. For as long as any Bonds remain outstanding,the County shall, no later
than 10 a.m. on the Business Day preceding that Debt Service Payment Date, loan to the District
an amount necessary, if any, that, when added to the money available in the Bond Fund, is
sufficient to make all payments of principal of and interest on the Bonds due on the upcoming
Debt Service Payment Date. The County shall, upon demand by the District in accordance with
Section 3.1, cause the amount of each Loan hereunder to be transferred to the Paying Agent for
the Bonds.
4. Method of Notice. Notices of Missed Deposit and Insufficiency shall be sent
by the District to the County Treasurer by hand delivery or email (which email shall be promptly
confirmed by telephone communication to the County Treasurer). The original of each such notice
also shall be mailed to the County pursuant to Section 5.2. Any failure by the Treasurer to send
such notices shall not nullify the County's obligation to make Loans to the District hereunder,but
may result in a delay by the County in transferring Loans to the Paying Agent.
C. Additional Debt. The District does not intend to submit this Contingent Loan
Agreement or any indebtedness created hereunder to qualified electors of the District for approval.
Under RCW 36.100.060 and other existing laws, the District may incur non-voted indebtedness in
an aggregate amount equal to one-half of one percent of the value of the taxable property within
the District. The District agrees to at all times maintain unused non-voted debt capacity equal to
1.5 times the amount of Bonds then outstanding. This requirement may be eliminated, waived or
modified with the approval of the Board of the County Commissioners.
4833-5105-0859.1
D. Repayment Terms.
1. Repayment Terms. The principal amount of each Loan to the District
hereunder, together with interest thereon calculated as set forth in subsection (2) of this section,
shall be repaid by the District from available sales and use tax revenue during each year after the
Bond Fund (including the Principal and Interest Account and the 2018 Debt Service Reserve
Account) has been fully funded for such year (including sufficient funds to make debt service
payments required on the following June 1 or December 1), certain core expenses of the District
have been provided for, and the District has made any required payments to replenish the 2018
Debt Service Reserve Account, all as set forth in the Bond Resolution. Such payments will be
applied first to costs owed to the County, second, to interest owed to the County on account of
outstanding Loans made under this Contingent Loan Agreement and third to the principal of all
outstanding Loans made under this Contingent Loan Agreement in the order in which such Loans
were made.
2. Interest Rate. Each Loan made under the terms of this Contingent Loan
Agreement will bear interest from the date of the Loan until the date such Loan is repaid. Interest
on the Loans will be calculated on the basis of a 365/366-day year, for the actual number of days
elapsed. The rate of interest borne by each Loan hereunder shall be a variable rate equal to the
monthly average rate of return on the State Local Government Investment Pool (or its successor),
as determined as of the last day of each month in which a Loan is outstanding, and shall change
monthly as of the first day of each month in which a Loan is outstanding;provided, however, that
if the Board of County Commissioners determines that it is necessary or desirable to borrow funds
to make a Loan under this Contingent Loan Agreement, such Loan will instead bear interest at a
rate equal to the interest rate on the obligation pursuant to which the County elects to borrow funds
to make that Loan. The County may in its discretion charge a lower rate of interest. Absent
manifest error, all interest calculations of the County Treasurer shall be binding upon the District
and the County.
3. Maturity. Unless paid earlier pursuant to subsection (1) of this section, all
Loans hereunder shall mature on December 31 of the year of expiration of the District's authority
to impose the Sales Tax under RCW 82.14.390, as it may be amended from time to time, but not
earlier than 2047, which is the year that is 40 years after the tax was first collected.
E. Nature of District's Obligation. Subject to the provisions of Section 2.6(1), the
District's obligation to repay Loans from the sources identified herein and to perform and observe
the other obligations on its part contained herein shall be absolute and unconditional, and shall not
be subject to diminution by setoff,counterclaim, abatement or otherwise. The full faith,credit and
resources of the District are hereby pledged for the payment of all amounts owed to the County
under this Contingent Loan Agreement, and the Parties recognize that the District's obligation to
repay Loans will constitute "debt" subject to constitutional and statutory limitations, and
consequently the District makes the covenant, in Section 2.3,to maintain adequate non-voted debt
capacity to accommodate its obligation to repay any Loans. The District's obligations under this
Contingent Loan Agreement shall continue in effect and shall survive the satisfaction of the
District's obligations under the Bonds and the Bond Resolution until such time as principal and
interest due to the County pursuant to any Loan or Loans made hereunder have been repaid,
together with any costs owed to the County pursuant to Section 4.5. To further its ability to make
4833-5105-0859.1
such payments to the County, the District hereby irrevocably covenants and agrees to continue
imposing the sales and use tax as permitted under RCW 82.14.390 for so long as the Bonds remains
outstanding or any District obligation to pay any amount to the County under this Contingent Loan
Agreement remains outstanding.
F. Nature of County's Obligation. The County's obligation to make Loans hereunder,
in the amounts, at the times, under the conditions and in the manner described herein shall not be
subject to any preconditions not expressly set forth herein and shall not be subject to diminution
by setoff, counterclaim, abatement or otherwise. The full faith, credit and resources of the County
are pledged irrevocably to make the Loans, in the amounts, at the times, in the manner and subject
to the limitations described herein. The Parties recognize that the County's obligations will not
constitute "debt" subject to constitutional or statutory limitations. The obligations of the County
to make Loans hereunder shall terminate upon payment in full of the principal of and interest on
all outstanding Bonds.
III.
Additional Obligations and Covenants
A. Agreement to Issue Bonds. The District shall issue the Bonds in accordance
with the Bond Resolution and this Contingent Loan Agreement in the aggregate principal amount
of not to exceed $8,000,000, which amount does not to exceed the amount necessary to finance
the Project, refund a portion of the 2010 Bonds, repay all or a portion of the County Loan and pay
costs of issuing the Bonds.
B. Amendment of Bond Resolution and Issuance of Additional Sales Tax
Bonds. The District covenants that it will not amend or supplement the Bond Resolution or issue
Additional Sales Tax Bonds (as defined in the Bond Resolution) without the prior written consent
of the County.
C. Operating Reserve. The District covenants that it will maintain an
Operating Reserve to be used to pay operating expenses of District and other expenses and
obligations of the District. The District agrees to deposit Sales Tax Revenue into the Operating
Reserve, as and to the extent, permitted by the Bond Resolution and Resolution No. 2010-007,
together with other money of the District legally available therefor, after providing for payment of
administrative operating expenses coming due in the current calendar year, until such time as the
balance therein reaches $100,000. Except as and to the extent the District determines that it is
necessary to make a transfer from the Operating Reserve to pay expenses or obligations of the
District, the amount of money and investments in the Operating Reserve shall be maintained at an
amount at least equal to $100,000 and, if the value of money and investments in the Operating
Reserve falls below$100,000, the District shall replenish such amounts from the sources of initial
funding described above in this Section 3.3. It is expressly recognized that because money in the
Operating Reserve may be used to pay operating and other expenses of the District, there is no
reasonable assurance that money will be available the Operating Reserve to pay debt service on
the Bonds if the District were to encounter financial difficulties.
D. County Compliance with Continuing Disclosure Requirement. To meet the
conditions of paragraph (d)(2) of the Rule, as applicable to a participating underwriter for the
4833-5105-0859.1
Bonds, the County undertakes for the benefit of holders of the Bonds to provide or cause to be
provided at least annually to the MSRB, in an electronic format and accompanied by identifying
information, each as prescribed by the MSRB, certain financial information of the type described
in this Section 3.4 (the"County Annual Report"). The County Annual Report will be provided no
later than the last day of the ninth month after the end of each fiscal year of the County(currently,
a fiscal year ending December 31), as such fiscal year may be changed as required or permitted by
State law, beginning with the fiscal year ending December 31, 2017. The County Annual Report
will consist of:
1. annual financial statements for the County prepared (except as noted in the
financial statements) in accordance with generally accepted accounting principles applicable to
Washington State governmental units such as the County, as such principles may be changed from
time to time, which statements need not be audited, except, however, that if and when audited
financial statements are otherwise prepared and available to the County they will be provided;
2. statements of assessed valuation of property within the County;
3. statements of ad valorem taxes levied and the percentage of taxes collected
by the County;
4. statements of the County's property tax rates per $1,000 of assessed value;
and
5. statements of the County's outstanding general obligation debt.
Certain items of the County Annual Report may be provided by way of cross-reference to other
documents previously provided to the MSRB or filed with the SEC. If the cross-referenced
document is a final official statement within the meaning of the Rule, it shall be available from the
MSRB.
The foregoing undertaking shall be modified if and as necessary to comply with the Rule
as in effect on the issue date of any Bonds that are subject to the Rule. The County's obligations,
if any, under this undertaking shall terminate upon the legal defeasance of all of the Bonds. In
addition, the County's obligations under this undertaking shall terminate if those provisions of the
Rule which require the County to comply with this undertaking become legally inapplicable in
respect of the Bonds for any reason, as confirmed by an opinion of nationally recognized bond
counsel or other counsel familiar with federal securities laws delivered to the County and the
District, and the District provides timely notice of such termination to the MSRB.
E. Bond Resolution Provisions Regarding Application of Sales Tax Revenue.
Unless otherwise agreed by the County in writing, the District shall (a) include a provision in the
Bond Resolution, and, so long as this Contingent Loan Agreement remains in effect, in any
resolution with respect to Additional Sales Tax Bonds, a provision requiring that that Sales Tax
Revenue be disbursed for the purposes and in the order of priority as set forth in Exhibit C hereto
(notwithstanding that defined terms, titles of Bonds and names of funds and accounts may be
adjusted to reflect the applicable terms of any Additional Bonds, and references to specific
resolution or document provisions may be added); and (b) apply Sales Tax Revenue for the
purposes and in the priority so provided.
4833-5105-0859.1
F. 2010 Contingent Loan Agreement. The Bond proceeds will be used to
refund the callable 2010 Bonds and the 2010 Contingent Loan Agreement will remain in place for
the non-callable 2010 Bonds. Once the 2010 Bonds are called, redeemed and paid, and all
obligations owed by the District to the County under the 2010 Contingent Loan Agreement have
been repaid, the 2010 Contingent Loan Agreement will terminate.
G. 2018 Debt Service Reserve Account. The Bond Resolution creates the 2018
Debt Service Reserve Account to secure the repayment of the Bonds. The County and District
agree that the Reserve Requirement for the Bonds shall not exceed $250,000. While the 2010
Bonds are outstanding,the combined reserve requirements for both the 2010 Bonds and the Bonds
shall be$250,000. The amount necessary to fund the reserve requirement for the 2010 Bonds shall
remain in the 2010 Reserve Account, with any amount not necessary to fund the requirement for
the 2010 Bonds deposited into the 2018 Debt Service Reserve Account. Once the 2010 Bonds are
no longer outstanding, the Treasurer shall deposit into the 2018 Debt Service Reserve Account
from amounts in the 2010 Reserve Account, an amount necessary to make the total balance in the
2018 Debt Service Reserve Account equal to $250,000. With the County's written consent, the
Reserve Requirement for the Bonds may be reduced below $250,000. Any amounts in the 2018
Debt Service Reserve Account that are not required to meet the Reserve Requirement for the Bonds
shall be deposited in the Principal and Interest Account.
IV.
Remedies Upon Default
A. Remedies Upon District Default. If the District is in default of its
obligations under this Contingent Loan Agreement,the County may proceed to protect and enforce
its rights in equity or at law, either in mandamus or for the specific performance of any covenant
or agreement contained herein, or for the enforcement of any other appropriate legal or equitable
remedy,as the County may deem most effectual to protect and enforce any of its rights or interests
hereunder; provided that the County may not enforce repayment of the Loans until repayment in
full of the principal of and interest on the Bonds, except to the extent such repayment is provided
for in Section 13 of the Bond Resolution.
B. Remedies of District on Default. Upon the occurrence of a default by the
County in its obligations to make Loans hereunder, the District may proceed to protect and enforce
its rights in equity or at law, either in mandamus or for the specific performance of any covenant
or agreement contained herein, or for the enforcement of any other appropriate legal or equitable
remedy, as the District may deem most effectual to protect and enforce any of its rights or interests
hereunder. In the event the District receives any payment on account of such rights and/or
remedies while any principal of or accrued interest on the Bonds remain outstanding, the District
agrees to deposit such funds in the Bond Fund for application in accordance with the Bond
Resolution.
C. No Remedy Exclusive. No remedy conferred upon or reserved to either
Party by this Contingent Loan Agreement is intended to be exclusive of any other available remedy
or remedies,but each and every such remedy shall be cumulative and shall be in addition to every
other remedy given under this Contingent Loan Agreement or now or hereafter existing at law or
in equity or by statute, and either Party hereto shall be free to pursue, at the same time, each and
4833-5105-0859.1
every remedy, at law or in equity, which it may have under this Contingent Loan Agreement, or
otherwise.
D. No Implied Waiver. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed to be a waiver
thereof,but any such right and power may be exercised from time to time and as often as may be
deemed expedient. For the exercise of any remedy, it shall not be necessary to give any notice,
other than such notice as may be expressly required herein.
E. Agreement to Pay Attorneys' Fees and Expenses. If a default arises under
any of the provisions of this Contingent Loan Agreement and either Party hereto should employ
attorneys or incur other expenses for the collection of amounts due under this Contingent Loan
Agreement or the enforcement of performance or observance of any obligation or agreement on
the part of the other Party contained in this Contingent Loan Agreement, on demand therefor, the
nonprevailing Party shall pay or reimburse the prevailing Party for the reasonable fees of such
attorneys and such other expenses so incurred.
F. Dispute Resolution. The Parties may mediate any dispute over the
interpretation of any terms or conditions under this Contingent Loan Agreement. Mediation will
be made available upon request of either Party. The costs associated with any such mediation shall
be shared equally by the Parties.
V.
Miscellaneous
A. Governing Law; Venue. This Contingent Loan Agreement is governed by
and shall be construed in accordance with the substantive laws of the State and shall be liberally
construed so as to carry out the purposes hereof. Except as otherwise required by applicable law,
any action under this Contingent Loan Agreement shall be brought in the Superior Court of the
State of Washington in and for Lewis County.
B. Notices. Except as otherwise provided herein, all notices, consents or other
communications required hereunder shall be in writing and shall be sufficiently given if addressed
and hand delivered or mailed by certified or registered mail, postage prepaid and return receipt
requested, as follows:
To the County: Lewis County
360 Northwest North Street
MS TR501
Chehalis, Washington 98532-1900
Attention: Chair, Board of County Commissioners
Fax: (360) 740-1493
Telephone: (360) 740-1115
4833-5105-0859.1
To the District: Chair, Board of Directors,
Lewis County Public Facilities District
c/o Lewis County Treasurer
360 Northwest North Street
MS TR501
Chehalis, Washington 98532-1900
Attention: County Treasurer
Fax: (360) 740-1493
Telephone: (360) 740-1115
The County or the District may designate any further or different addresses to which subsequent
notices, certificates, requests or other communications shall be sent by giving notice of such
change to the other party. Notices shall be deemed served upon deposit of such notices in the
United States mail in the manner provided above.
C. Binding Effect. This Contingent Loan Agreement shall inure to the benefit
of the County, the District and the holders of the Bonds and shall be binding upon the County and
the District and their successors. This Contingent Loan Agreement may not be assigned.
D. Severability. In the event any provision of this Contingent Loan Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall
not invalidate or render unenforceable any other provision hereof.
E. Amendments. This Contingent Loan Agreement may be amended,
changed, modified or altered by an instrument in writing duly executed by the County and the
District(or the successors in title of each),unless(a) expressly permitted by the Bond Resolution,
or(b) if, in the opinion of bond counsel, such amendment will not adversely affect the security for
the Bonds or tax exemption of interest on the tax-exempt series of Bonds. This Contingent Loan
Agreement may not be terminated until the Bonds are no longer outstanding, unless the County
has assumed all liability for payment of the principal of and interest on the Bonds when due and
has pledged its full faith and credit to such payment.
F. No Rights Created in Third Parties. The terms of this Contingent Loan
Agreement are not intended to establish or to create any rights in any persons or entities other than
the County, the District, and the respective successors and assigns of each.
G. Refunding Bonds. If the District issues Refunding Bonds at any time with
the prior written consent of the County, which the County may grant in its sole discretion, all
references in this Contingent Loan Agreement to"Bonds"shall be deemed to be references to such
"Refunding Bonds"for all purposes,without further action by the parties hereto,but only if(a) the
average annual debt service on the Refunding Bonds does not exceed the average annual debt
service on the Bonds that are being refunded, and (b)the final maturity of the Refunding Bonds
does not extend beyond the final maturity date of the Bonds being refunded.
H. Time of Essence. Time and all terms and conditions shall be of the essence
of this Contingent Loan Agreement.
4833-5105-0859.1
I. Execution in Counterparts. This Contingent Loan Agreement may he
executed in counterparts.
J. Effective Date of and Termination of Contingent Loan Agreement. This
Contingent Loan Agreement shall become effective upon its full execution. This Contingent Loan
Agreement shall terminate only upon: [(I) the County's failure to approve the Independent
Financial Feasibility Review for the Project, in its sole discretion, prior to the issuance of the
Bonds; (2) the failure of the Parties to execute the Construction Agreement prior to the issuance
of the Bonds; and (3)] the repayment or defeasance of all of the Bonds and the repayment of any
obligations owed by the District to the County under this Contingent Loan Agreement.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LEND MONEY, EXTEND
CREDIT, OR FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, the County and the District have caused this Contingent Loan
Agreement to be executed in their respective names by their duly authorized officers, and have
caused this Contingent Loan Agreement to be dated as of the date set forth on the first page hereof.
.LEWIS COUNTY, WASHINGTON LEWIS COUNTY PUBLIC FACILITIES
DISTRICT/0--
y7
Chair, Board of Col. ty Commissioners Chair, Board of Directors
Date Signed: Lo"ZS " g Date Signed: - /1/ $7
4833-5105-0859.1
Exhibit A
Form Notice of Missed Deposit
Lewis County VIA HAND DELIVERY
360 Northwest North Street (with telephone confirmation)
MS TR501
Chehalis, Washington 98532-1900
Attention: County Treasurer and
Board of County Commissioners
Fax: (360) 740-1493
Telephone: (360) 740-1115
Re: NOTICE OF MISSED DEPOSIT
Lewis County Public Facilities District
Limited Sales Tax Obligation and Refunding Bonds, 2018 [series designation]
The undersigned, a duly authorized officer of the Lewis County Public Facilities District (the
"District"), hereby certifies to Lewis County, Washington (the "County"), with reference to the
Contingent Loan Agreement (the "Contingent Loan Agreement") dated , 2018, by and
between the County and the District, and the above-captioned bonds (the"Bonds"), that:
1. Pursuant to Section 14 of the Bond Resolution, the District was required to deposit
$ by , 201_.
2. As of , 20 , $ of such amount had not been deposited.
Any capitalized term used herein and not defined shall have the meaning assigned to such term in
the Contingent Loan Agreement or, if not therein defined, as defined in the Bond Resolution. The
individual signing below hereby represents that he or she is an officer of the undersigned and is
duly authorized to execute and deliver this document.
Dated: , 20 .
LEWIS COUNTY PUBLIC FACILITIES DISTRICT
, Treasurer
cc: Chair of the District's Board of Directors
4833-5105-0859.1
Exhibit B
Form Notice of Insufficiency
Lewis County VIA HAND DELIVERY
360 Northwest North Street (with telephone confirmation)
MS TR501
Chehalis, Washington 98532-1900
Attention: County Treasurer and
Board of County Commissioners
Fax: (360) 740-1493
Telephone: (360) 740-1115
Re: NOTICE OF INSUFFICIENCY
Lewis County Public Facilities District
Limited Sales Tax Obligation and Refunding Bonds,2018 [series designation]
The undersigned, a duly authorized officer of the Lewis County Public Facilities District (the
"District"), hereby certifies to Lewis County, Washington (the "County"), with reference to the
Contingent Loan Agreement (the "Contingent Loan Agreement") dated , 2018, by and
between the County and the District, and the above-captioned bonds (the"Bonds"), that:
1. As of , 20 the amount in the Bond Fund was $ , $
less than the principal and/or interest due on .
2. There is a continuing Bond Fund deficiency of$ .
Pursuant to Section 2.2 of the Contingent Loan Agreement,the County is required to make a Loan
to the District equal to the amount required to remedy such deficiency ($ ) no later than
10 a.m. on , 20_(the Business Day preceding the Debt Service Payment Date).
Any capitalized term used herein and not defined shall have the meaning assigned to such term in
the Contingent Loan Agreement or, if not therein defined, as defined in the Bond Resolution. The
individual signing below hereby represents that he or she is an officer of the undersigned and is
duly authorized to execute and deliver this document.
Dated: , 20 .
LEWIS COUNTY PUBLIC FACILITIES DISTRICT
, Treasurer
cc: Chair of the District's Board of Directors
4833-5105-0859.1
Exhibit C
Purposes and Priority of Application of Sales Tax Revenues
Sales Tax Revenue shall be transferred to and deposited into the Sales Tax Revenue Fund when
and as received by the District or by the Treasurer of the County, as ex officio Treasurer of the
District. Sales Tax Revenue deposited therein, together with the proceeds of Loans made by the
County under the Contingent Loan Agreement(to the extent necessary to provide for the First and
Second purposes) and the 2010 Contingent Loan Agreement (to the extent necessary to provide
for the Fourth purpose below), shall be disbursed for the following purposes in the following order
of priority:
First, to make the required deposits into the Principal and Interest Account for the
payment of interest due on the Bonds,the 2010 Bonds and any Additional Sales
Tax Bonds;
Second, to make the required deposits into the Principal and Interest Account for the
payment of principal of the Bonds, the 2010 Bonds and any Additional Sales
Tax Bonds at maturity or upon mandatory sinking fund redemption prior to
scheduled maturity;
Third, to pay Core Operating Expenses of the District;
Fourth, to replenish the 2010 Debt Service Reserve Account so that the amount therein
is at least the reserve requirement for the 2010 Bonds, and the 2018 Debt
Service Reserve Account so that the amount therein is at least the Reserve
Requirement;
Fifth, to repay principal of and interest on any Loans made by the County to the
District under the 2010 Contingent Loan Agreement and the 2018 Contingent
Loan Agreement;
Sixth, to pay other administrative operating expenses of the District;
Seventh, to fund any reserves that the District is required by contract, resolution or
otherwise to create and maintain;
Eighth, to pay principal of, premium, if any, and interest on, and any other payments
required in connection with, Subordinate Obligations; and
Ninth, to provide for costs of and reserves for long-term capital repairs, renewals and
replacements of the regional center, and for other lawful purposes, in no
particular order of preference and all as determined by the District.
The District will exercise due regard for the anticipated financial requirements to be satisfied as
priorities First through Eighth above in each calendar year prior to authorizing or making any
disbursement of money in the Sales Tax Revenue Fund for the purpose identified as priority Ninth.
4833-5105-0859.1
For purposes of this Exhibit C, "Core Operating Expenses" means (a) insurance premiums for
building insurance, directors and officers insurance and/or other insurance policies deemed to be
reasonably necessary by the District, (b) fees and costs associated with audits, and (c) other
operating expenses of the District that the District and the County determine to be essential to the
continued operation of the District and/or the protection of the District and its assets.
4833-5105-0859.1
BOCC AGENDA ITEM SUMMARY
Resolution: BOCC Meeting Date: Jun 25, 2018
Suggested Wording for Agenda Item: Agenda Type: Consent
Approve a contingent loan agreement with the Public Facilities District (PFD)
Contact Rieva Lester Phone: 3607401419
Department: Board of County Commissioners
Action Needed: Approve Resolution
Description
Approve a contingent loan agreement with the Public Facilities District (PFD)
Cover Letter To
Roy Koegen,Roy.Koegen @KutakRock.com
Todd Chaput,todd @hotelservicesgroup.com
Additional Copies
Amy Davis, Suzette Smith, Becky Butler
CONTINGENT LOAN AGREEMENT
by and between
LEWIS COUNTY,WASHINGTON
and
LEWIS COUNTY PUBLIC FACILITIES DISTRICT
relating to
NOT TO EXCEED $8,000,000
LEWIS COUNTY PUBLIC FACILITIES DISTRICT
LIMITED SALES TAX OBLIGATION AND REFUNDING BONDS,2019 (TAXABLE)
Dated February 25, 2019
This document prepared by
Foster Pepper PLLC
1111 Third Avenue, Suite 3000
Seattle, Washington 98101
(206) 447-4400
52922018.iI
TABLE OF CONTENTS
Page
ARTICLE 1. Definitions. . .. . ... . 3
ARTICLE 2 Loans to the District,Repayment Terms . 6666. 4
Section 2 1 Loans to the District .. 4
Section 2.2 The Procedures for and Amount of Loans... 5
Section 2.3 Additional Debt.. . 5
Section 2.4 Repayment Terms . 6
Section 2 5 Nature of District's Obligation 6
Section 2.6 Nature of County's Obligation. . . . ...7
ARTICLE 3 Additional Obligations and Covenants 7
Section 3.1 Agreement to Issue Bonds .... . . . . 7
Section 3 2 Amendment of Bond Resolution and Issuance of Additional Sales Tax
Bonds 7
Section 3 3 Operating Reserve.... .
Section 3 4 County Compliance with Continuing Disclosure Requirement . . 8
Section 3 5 Bond Resolution Provisions Regarding Application of Sales Tax
Revenue. 8
Section 3.6 2010 Contingent Loan Agreement.. .... . ........ .... ....... .. . . . . 9
Section 3 7 2018 Debt Service Reserve Account . . . .. .... 9
ARTICLE 4 Remedies Upon Default 9
Section 4 1 Remedies Upon District Default.. . . . 6666 . . 9
Section 4 2 Remedies of District on Default 9
Section 4 3 No Remedy Exclusive10
Section 4 4 No Implied Waiver 10
Section 4 5 Agreement to Pay Attorneys' Fees and Expenses 10
Section 4.6 Dispute Resolution .... . 10
ARTICLE 5 Miscellaneous . . . 10
Section 5.1 Governing Law,Venue ... . . . 10
Section 5 2 Notices 10
Section 5 3 Binding Effect . . 11
Section 5 4 Severability 11
Section 5 5 Amendments ... ..... •... • • . 11
Section 5 6 No Rights Created in Third Parties .. 6.66 4664 11
Section 5 7 Refunding Bonds . . . . 11
Section 5 8 Time of Essence 12
Section 5 9 Execution in Counterparts 12
Section 5.10 Effective Date of and Termination of Contingent Loan Agreement 12
-r-
529222018.I l
CONTINGENT LOAN AGREEMENT
relating to
NOT TO EXCEED $8,000,000
LEWIS COUNTY PUBLIC FACILITIES DISTRICT
LIMITED SALES TAX OBLIGATION AND REFUNDING BONDS,2019 (TAXABLE)
(EVENT CENTER AND SPORTS COMPLEX)
This CONTINGENT LOAN AGREEMENT (this "Contingent Loan Agreement") dated
February 25, 2019, is entered into by and between LEWIS COUNTY, WASHINGTON (the
"County"), a political subdivision of the State of Washington (the "State"), and the LEWIS
COUNTY PUBLIC FACILITIES DISTRICT (the "District"), a Washington public facilities
district (together,the "Parties"),
WITNESSETH:
WHEREAS, the District, a duly organized and legally existing Washington public
facilities district and municipal corporation, was created by the County in accordance with
Chapter 36,100 of the Revised Code of Washington ("RCW"), pursuant to Resolution No 07-
247 of the County, adopted on August 13, 2007 The boundaries of the District are coextensive
with the boundaries of the County; and
WHEREAS, the District is authorized by applicable provisions of state law, including
RCW 36 100 030, to acquire, construct, own, remodel, maintain, equip, repair and operate a
regional center (including multipurpose community centers and special events centers) and
related parking facilities; and
WHEREAS, the District was created before September 1, 2007, is located in a county
that has no other public facilities districts, has an estimated population of over 70,000, and
commenced construction of a new regional center in June, 2010, a date that is before January 1,
2011, and, pursuant to Resolution No. 2007-001 of the District, adopted August 27, 2007, the
District has established and imposed a sales and use tax as authorized by RCW 82 14 390, and
WHEREAS, a public facilities district is authorized by RCW 36 100.060 to issue general
obligation bonds not to exceed an amount (together with any outstanding nonvoter approved
general obligation indebtedness) equal to one-half of one percent of the value of taxable property
within the district, and
WHEREAS, by Resolution No 2010-007, the District's Board of Directors (the"Board")
authorized the issuance of$5,795,000 principal amount of Limited Sales Tax Obligation Bonds,
2010 (Taxable Build America Bonds — Direct Payment) (the "2010 Bonds"), to finance the
acquisition, construction and equipping of a regional center, including a multipurpose event
center and sports complex, together with related parking facilities (collectively, the "Center"),
and
WHEREAS, the District and the County entered into a Contingent Loan Agreement dated
October 8, 2010 (the "2010 Contingent Loan Agreement"), pursuant to which, among other
things, in consideration of the District's issuance of the 2010 Bonds, the County is obligated to
lend to the District an amount sufficient, together with other money in the 2010 Debt Service
-1-
52922018.11
Reserve Account (defined herein), to replenish the 2010 Debt Service Reserve Account to the
reserve requirement for the 2010 Bonds, and the District is obligated to borrow loans from the
County and to deposit all amounts received by it under the 2010 Contingent Loan Agreement in
the 2010 Debt Service Reserve Account, and
WHEREAS, in 2010 the County loaned the District$550,000 (the "County Loan"); and
WHEREAS, it is anticipated that the District will issue not to exceed $8,000,000
aggregate principal amount of its Limited Sales Tax Obligation and Refunding Bonds, 2019
(Taxable) (the "Bonds") in one or more series, the proceeds of which will be used to finance
improvements and additions to the Center (the "Project"), to refund a portion of the 2010 Bonds
and to repay all or a portion of the County Loan, and
WHEREAS, the District has requested that the County provide credit support for the
Bonds to permit the District to obtain financing for the capital costs of the Project, to refund all
or a portion of the 2010 Bonds and repay all or a portion of the County Loan at the lowest
available interest rates; and
WHEREAS, pursuant to RCW 36 100.025, an independent financial feasibility review
(the "Independent Financial Feasibility Review") is required to be performed prior to the
issuance by the District of any indebtedness, such review is to be conducted by the State
Department of Commerce through the Municipal Research and Services Center under RCW
43 100 030 or under a contract with another entity under the authority of RCW 43 110 080, such
review must examine the potential costs to be incurred by the District and the adequacy of
revenues or expected revenues to meet those costs; and such review, upon completion, is to be
submitted to the Governor, the State Treasurer, the State Auditor, the District, the County, other
participating local political subdivisions and appropriate committees of the State Legislature; the
Independent Financial Feasibility Review was completed in January 2019,
WHEREAS, the County and the District have the authority to enter into interlocal
agreements under chapters 35 57, 35.59 and 67.28 RCW for joint and cooperative action,
including provisions to finance joint or cooperative undertakings, multipurpose community
centers, regional centers and tourism-related facilities, and
WHEREAS, the County has previously determined that it is in the best interest of the
County and its residents to provide for the design, construction, ownership, operation and/or
financing of the Project in accordance with the three construction phases set forth in a
Construction Agreement by and between the Parties (the "Construction Agreement") to be
entered into prior to the issuance of the Bonds, and
WHEREAS,the County, by Resolution No 18-211, adopted June 25, 2018,has approved
and authorized the execution of this Contingent Loan Agreement to evidence the County's
commitment to make loans to the District subject to and in accordance with this Contingent Loan
Agreement to secure the payment of the principal of and interest on the Bonds, as such amounts
become due and payable,
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the
Parties hereby covenant and agree as follows
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ARTICLE 1.
Definitions
Unless the context clearly requires otherwise, the following terms shall have the
respective meanings set forth below for all purposes of this Contingent Loan Agreement Unless
the context clearly requires otherwise, all other capitalized terms used but not defined in this
Contingent Loan Agreement shall have the meanings assigned to them in the Bond Resolution
"2019 Debt Service Reserve Account" means the account of that name within the Bond
Fund, as established by the Bond Resolution
"Bond" or "Bonds" means one or more of the District's Limited Sales Tax Obligation
and Refunding Bonds, 2019 (Taxable), or obligations of such other title as may be specified in
the Bond Resolution, issued in one or more series
"Bond Fund" means the fund of that name established by Resolution No 2010-007 of the
District's Board of Directors.
"Bond Resolution" means Resolution No. 2018-03 of the Board of Directors of the
District authorizing the issuance of the Bonds and specifying certain terms thereof, as amended
and supplemented from time to time.
"Business Day" means any day, other than a Saturday or a Sunday, on which banking
institutions are open in the State and in the states in which any of the offices of the Paying Agent
designated from time to time by the Paying Agent for the transfer or exchange of Bonds are
located.
"Contingent Loan Agreement" means this Contingent Loan Agreement, including any
supplements or amendments hereto made in conformance herewith.
"County"means Lewis County, Washington
"County Resolution" means Resolution No. 18-211, adopted by the Board of County
Commissioners on June 25, 2018
"Debt Service Payment Date" means each June 1 and December 1, commencing June 1,
2019
"District"means the Lewis County Public Facilities District
"Loan"has the meaning specified in Section 2 1
"MSRB"means the Municipal Securities Rulemaking Board
"Operating Reserve"means the reserve account previously created for the District
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"Paying Agent" means the fiscal agency of the State, as designated from time to time,
and its successors and assigns as bond registrar and paying agent for the Bonds as set forth in the
Bond Resolution.
"Principal and Interest Account" means the account of that name within the Bond Fund,
as established by Resolution No. 2010-007 and continued by the Bond Resolution
"Project" means the acquisition and construction of the following improvements to the
Lewis County Event Center and Sports Project: expansion of the building, improvements to
bathrooms, elevators, flooring and seating, and improvements to sports facilities
"Refunding Bonds"means any bonds issued to refund all or a portion of the Bonds
"Reserve Requirement" initially means the amount of money necessary to be deposited
into the 2019 Debt Service Reserve Account so that the sum of the 2019 Debt Service Reserve
Account and the 2010 Debt Service Reserve Account is $250,000 Once the 2010 Bonds are no
longer outstanding, the Reserve Requirement for the Bonds shall be $250,000 unless the County
agrees in writing to a lower amount The Reserve Requirement may be recalculated in
connection with the redemption or cancellation of Bonds prior to their scheduled maturity, as set
forth in the Bond Resolution.
"Rule"means Rule 15c2-12(b)(5) adopted by the SEC under the Securities Exchange Act
of 1934, as the same may be amended from time to time
"Sales Tax Revenue" means the money received by the District from the Washington
State Department of Revenue on account of the sales and use tax imposed by and collected for
the District pursuant to RCW 82 14 390, as the same may be amended from time to time, or any
successor statute. For purposes of this Contingent Loan Agreement, "Sales Tax Revenue" shall
also include the proceeds of any admissions tax imposed by the District under applicable law
"SEC"means the federal Securities and Exchange Commission
"Treasurer"means the Treasurer of the District, which currently is the County Treasurer
ARTICLE 2.
Loans to the District; Repayment Terms
Section 2.1 Loans to the District. The County shall lend money to the District at the
times and in the amounts set forth in Section 2.2 (each a"Loan") The District shall borrow each
Loan by the County pursuant to this Contingent Loan Agreement for the purpose of paying debt
service on the Bonds. The County irrevocably agrees to disburse all Loans made hereunder
directly to the Paying Agent for the purpose of paying principal of and interest on the Bonds
The aggregate principal amount of outstanding loans to be made by the County pursuant to this
Contingent Loan Agreement shall not exceed the outstanding principal amount of the Bonds,
plus all interest accrued on the Bonds
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Section 2.2 The Procedures for and Amount of Loans
(1) Notice of Insufficiency Under the Bond Resolution the District is required
to make monthly deposits into the Principal and Interest Account equal to one-sixth of the
interest and one-twelfth of the principal next coming due on the Bonds The County Treasurer is
the Treasurer of the District and holds the Principal and Interest Account on behalf of the
District. If the District fails to make a monthly deposit or deposits less than the required deposit,
the Treasurer shall immediately notify the County Treasurer's office and Board of County
Commissioners in the form of Exhibit A("Notice of Missed Deposit")
On the 1st day of the month preceding each Debt Service Payment Date (or if the 1st day
of the month is not a Business Day, then on the next Business Day), the District and County
Treasurer shall review the amount on deposit in the Bond Fund (including the Principal and
Interest Account and 2019 Debt Service Reserve Account) to determine whether there will be
sufficient money available in the Bond Fund to make the required payment due on the upcoming
Debt Service Payment Date If, upon such review, it appears that the money available in the
Bond Fund will be insufficient to make that payment, the District shall provide the County a
notice in substantially the form attached hereto as Exhibit B (a"Notice of Insufficiency") within
five Business Days after the date on which the review was required Failure of the District to
give a Notice of Insufficiency to the County shall not relieve the County of its obligation to make
loans upon demand by the District under subsection (4) of this section. The District shall use
amounts in the 2019 Debt Service Reserve Account and other available reserves to fund the
Principal and Interest Account prior to requiring the County to make up the deficiency.
(2) Budgeting for Loans Upon receipt of a Notice of Insufficiency from the
District, the County shall, to the extent necessary, include in its budget the amounts required to
make the Loans described in subsection (3) of this section
(3) Loans For as long as any Bonds remain outstanding, the County shall, no
later than 10 a.m on the Business Day preceding that Debt Service Payment Date, loan to the
District an amount necessary, if any, that, when added to the money available in the Bond Fund,
is sufficient to make all payments of principal of and interest on the Bonds due on the upcoming
Debt Service Payment Date The County shall, upon demand by the District in accordance with
Section 2 1, cause the amount of each Loan hereunder to be transferred to the Paying Agent for
the Bonds
(4) Method of Notice. Notices of Missed Deposit and Insufficiency shall be
sent by the District to the County Treasurer by hand delivery or email (which email shall be
promptly confirmed by telephone communication to the County Treasurer). The original of each
such notice also shall be mailed to the County pursuant to Section 5 2 Any failure by the
Treasurer to send such notices shall not nullify the County's obligation to make Loans to the
District hereunder, but may result in a delay by the County in transferring Loans to the Paying
Agent.
Section 2.3 Additional Debt. The District does not intend to submit this Contingent
Loan Agreement or any indebtedness created hereunder to qualified electors of the District for
approval Under RCW 36 100 060 and other existing laws, the District may incur non-voted
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indebtedness in an aggregate amount equal to one-half of one percent of the value of the taxable
property within the District The District agrees to at all times maintain unused non-voted debt
capacity equal to 1.5 times the amount of Bonds then outstanding. This requirement may be
eliminated,waived or modified with the approval of the Board of the County Commissioners
Section 2.4 Repayment Terms
(1) Repayment Terms The principal amount of each Loan to the District
hereunder, together with interest thereon calculated as set forth in subsection (2) of this section,
shall be repaid by the District from available sales and use tax revenue during each year after the
Bond Fund (including the Principal and Interest Account and the 2019 Debt Service Reserve
Account) has been fully funded for such year (including sufficient funds to make debt service
payments required on the following June 1 or December 1), certain core expenses of the District
have been provided for, and the District has made any required payments to replenish the 2019
Debt Service Reserve Account, all as set forth in the Bond Resolution Such payments will be
applied first to costs owed to the County, second, to interest owed to the County on account of
outstanding Loans made under this Contingent Loan Agreement and third to the principal of all
outstanding Loans made under this Contingent Loan Agreement in the order in which such
Loans were made
(2) Interest Rate. Each Loan made under the terms of this Contingent Loan
Agreement will bear interest from the date of the Loan until the date such Loan is repaid
Interest on the Loans will be calculated on the basis of a 365/366-day year, for the actual number
of days elapsed The rate of interest borne by each Loan hereunder shall be a variable rate equal
to the monthly average rate of return on the State Local Government Investment Pool (or its
successor), as determined as of the last day of each month in which a Loan is outstanding, and
shall change monthly as of the first day of each month in which a Loan is outstanding,provided,
however, that if the Board of County Commissioners determines that it is necessary or desirable
to borrow funds to make a Loan under this Contingent Loan Agreement, such Loan will instead
bear interest at a rate equal to the interest rate on the obligation pursuant to which the County
elects to borrow funds to make that Loan The County may in its discretion charge a lower rate
of interest. Absent manifest error, all interest calculations of the County Treasurer shall be
binding upon the District and the County
(3) Maturity Unless paid earlier pursuant to subsection (1) of this section, all
Loans hereunder shall mature on December 31 of the year of expiration of the District's
authority to impose the Sales Tax under RCW 82 14 390, as it may be amended from time to
time, but not earlier than 2047,which is the year that is 40 years after the tax was first collected
Section 2.5 Nature of District's Obligation. Subject to the provisions of
Section 2.6(1), the District's obligation to repay Loans from the sources identified herein and to
perform and observe the other obligations on its part contained herein shall be absolute and
unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or
otherwise The full faith, credit and resources of the District are hereby pledged for the payment
of all amounts owed to the County under this Contingent Loan Agreement, and the Parties
recognize that the District's obligation to repay Loans will constitute "debt" subject to
constitutional and statutory limitations, and consequently the District makes the covenant, in
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Section 2.3, to maintain adequate non-voted debt capacity to accommodate its obligation to
repay any Loans. The District's obligations under this Contingent Loan Agreement shall
continue in effect and shall survive the satisfaction of the District's obligations under the Bonds
and the Bond Resolution until such time as principal and interest due to the County pursuant to
any Loan or Loans made hereunder have been repaid, together with any costs owed to the
County pursuant to Section 4.5. To further its ability to make such payments to the County, the
District hereby irrevocably covenants and agrees to continue imposing the sales and use tax as
permitted under RCW 82 14.390 for so long as the Bonds remains outstanding or any District
obligation to pay any amount to the County under this Contingent Loan Agreement remains
outstanding.
Section 2.6 Nature of County's Obligation The County's obligation to make Loans
hereunder, in the amounts, at the times, under the conditions and in the manner described herein
shall not be subject to any preconditions not expressly set forth herein and shall not be subject to
diminution by setoff, counterclaim, abatement or otherwise. The full faith, credit and resources
of the County are pledged irrevocably to make the Loans, in the amounts, at the times, in the
manner and subject to the limitations described herein The parties recognize that the County's
obligations will not constitute "debt" subject to constitutional or statutory limitations. The
obligations of the County to make Loans hereunder shall terminate upon payment in full of the
principal of and interest on all outstanding Bonds.
ARTICLE 3.
Additional Obligations and Covenants
Section 3 1 Agreement to Issue Bonds. The District shall issue the Bonds in
accordance with the Bond Resolution and this Contingent Loan Agreement in the aggregate
principal amount of not to exceed $8,000,000, which amount does not exceed the amount
necessary to finance the Project, refund a portion of the 2010 Bonds, repay all or a portion of the
County Loan and pay costs of issuing the Bonds.
Section 3.2 Amendment of Bond Resolution and Issuance of Additional Sales Tax
Bonds The District covenants that it will not amend or supplement the Bond Resolution or issue
Additional Sales Tax Bonds (as defined in the Bond Resolution) without the prior written
consent of the County
Section 3.3 Operating Reserve The District covenants that it will maintain an
Operating Reserve to be used to pay operating expenses of District and other expenses and
obligations of the District The District agrees to deposit Sales Tax Revenue into the Operating
Reserve, as and to the extent, permitted by the Bond Resolution and Resolution No 2010-007,
together with other money of the District legally available therefor, after providing for payment
of administrative operating expenses coming due in the current calendar year, until such time as
the balance therein reaches $100,000 Except as and to the extent the District determines that it
is necessary to make a transfer from the Operating Reserve to pay expenses or obligations of the
District, the amount of money and investments in the Operating Reserve shall be maintained at
an amount at least equal to $100,000 and, if the value of money and investments in the Operating
Reserve falls below $100,000, the District shall replenish such amounts from the sources of
initial funding described above in this Section 3 3 It is expressly recognized that because money
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in the Operating Reserve may be used to pay operating and other expenses of the District, there
is no reasonable assurance that money will be available the Operating Reserve to pay debt
service on the Bonds if the District were to encounter financial difficulties
Section 3.4 County Compliance with Continuing Disclosure Requirement To meet
the conditions of paragraph(d)(2) of the Rule, as applicable to a participating underwriter for the
Bonds, the County undertakes for the benefit of holders of the Bonds to provide or cause to be
provided at least annually to the MSRB, in an electronic format and accompanied by identifying
information, each as prescribed by the MSRB, certain financial information of the type described
in this Section 3.4 (the "County Annual Report") The County Annual Report will be provided
no later than the last day of the ninth month after the end of each fiscal year of the County
(currently, a fiscal year ending December 31), as such fiscal year may be changed as required or
permitted by State law, beginning with the fiscal year ending December 31, 2018 The County
Annual Report will consist of
(1) annual financial statements for the County prepared(except as noted in the
financial statements) in accordance with generally accepted accounting principles applicable to
Washington State governmental units such as the County, as such principles may be changed
from time to time, which statements need not be audited, except, however, that if and when
audited financial statements are otherwise prepared and available to the County they will be
provided,
(2) statements of assessed valuation of property within the County,
(3) statements of ad valorem taxes levied and the percentage of taxes
collected by the County;
(4) statements of the County's property tax rates per $1,000 of assessed value,
and
(5) statements of the County's outstanding general obligation debt.
Certain items of the County Annual Report may be provided by way of cross-reference to other
documents previously provided to the MSRB or filed with the SEC If the cross-referenced
document is a final official statement within the meaning of the Rule, It shall be available from
the MSRB
The foregoing undertaking shall be modified if and as necessary to comply with the Rule
as in effect on the issue date of any Bonds that are subject to the Rule The County's obligations,
if any, under this undertaking shall terminate upon the legal defeasance of all of the Bonds In
addition, the County's obligations under this undertaking shall terminate if those provisions of
the Rule which require the County to comply with this undertaking become legally inapplicable
in respect of the Bonds for any reason, as confirmed by an opinion of nationally recognized bond
counsel or other counsel familiar with federal securities laws delivered to the County and the
District, and the District provides timely notice of such termination to the MSRB
Section 3.5 Bond Resolution Provisions Regarding Application of Sales Tax Revenue
Unless otherwise agreed by the County in writing, the District shall (a) include a provision in the
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Bond Resolution, and, so long as this Contingent Loan Agreement remains in effect, in any
resolution with respect to Additional Sales Tax Bonds, a provision requiring that that Sales Tax
Revenue be disbursed for the purposes and in the order of priority as set forth in Exhibit C hereto
(notwithstanding that defined terms, titles of Bonds and names of funds and accounts may be
adjusted to reflect the applicable terms of any Additional Bonds, and references to specific
resolution or document provisions may be added), and (b)apply Sales Tax Revenue for the
purposes and in the priority so provided.
Section 3.6 2010 Contingent Loan Agreement. The Bond proceeds will be used to
refund the callable 2010 Bonds. Bond proceeds necessary for such refunding will be deposited
with a bank trust company and used to call the 2010 Bonds on December 1, 2020, and the 2010
Contingent Loan Agreement will remain in place until all of the 2010 Bonds are paid or
redeemed on December 1, 2020. Once the 2010 Bonds are called, redeemed and paid, and all
obligations owed by the District to the County under the 2010 Contingent Loan Agreement have
been repaid,the 2010 Contingent Loan Agreement will terminate
Section 3.7 2019 Debt Service Reserve Account, The Bond Resolution creates the
2019 Debt Service Reserve Account to secure the repayment of the Bonds The County and
District agree that the Reserve Requirement for the Bonds shall not exceed $250,000 While the
2010 Bonds are outstanding, the combined reserve requirements for both the 2010 Bonds and the
Bonds shall be $250,000 The amount necessary to fund the reserve requirement for the 2010
Bonds shall remain in the 2010 Reserve Account, with any amount not necessary to fund the
requirement for the 2010 Bonds deposited into the 2019 Debt Service Reserve Account. Once
the 2010 Bonds are no longer outstanding,the Treasurer shall deposit into the 2019 Debt Service
Reserve Account from amounts in the 2010 Reserve Account, an amount necessary to make the
total balance in the 2019 Debt Service Reserve Account equal to $250,000 With the County's
written consent, the Reserve Requirement for the Bonds may be reduced below $250,000. Any
amounts in the 2019 Debt Service Reserve Account that are not required to meet the Reserve
Requirement for the Bonds shall be deposited in the Principal and Interest Account
ARTICLE 4.
Remedies Upon Default
Section 4.1 Remedies Upon District Default. If the District is in default of its
obligations under this Contingent Loan Agreement, the County may proceed to protect and
enforce its rights in equity or at law, either in mandamus or for the specific performance of any
covenant or agreement contained herein, or for the enforcement of any other appropriate legal or
equitable remedy, as the County may deem most effectual to protect and enforce any of its rights
or interests hereunder, provided that the County may not enforce repayment of the Loans until
repayment in full of the principal of and interest on the Bonds, except to the extent such
repayment is provided for in Section 13 of the Bond Resolution
Section 4.2 Remedies of District on Default Upon the occurrence of a default by the
County in its obligations to make Loans hereunder, the District may proceed to protect and
enforce its rights in equity or at law, either in mandamus or for the specific performance of any
covenant or agreement contained herein, or for the enforcement of any other appropriate legal or
equitable remedy, as the District may deem most effectual to protect and enforce any of its rights
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or interests hereunder In the event the District receives any payment on account of such rights
and/or remedies while any principal of or accrued interest on the Bonds remain outstanding, the
District agrees to deposit such funds in the Bond Fund for application in accordance with the
Bond Resolution.
Section 4.3 No Remedy Exclusive No remedy conferred upon or reserved to either
Party by this Contingent Loan Agreement is intended to be exclusive of any other available
remedy or remedies,but each and every such remedy shall be cumulative and shall be in addition
to every other remedy given under this Contingent Loan Agreement or now or hereafter existing
at law or in equity or by statute, and either Party hereto shall be free to pursue, at the same time,
each and every remedy, at law or in equity, which it may have under this Contingent Loan
Agreement, or otherwise
Section 4.4 No Implied Waiver. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised from time to time and as often as
may be deemed expedient For the exercise of any remedy, it shall not be necessary to give any
notice, other than such notice as may be expressly required herein.
Section 4.5 Agreement to Pay Attorneys' Fees and Expenses If a default arises under
any of the provisions of this Contingent Loan Agreement and either Party hereto should employ
attorneys or incur other expenses for the collection of amounts due under this Contingent Loan
Agreement or the enforcement of performance or observance of any obligation or agreement on
the part of the other Party contained in this Contingent Loan Agreement, on demand therefor, the
nonprevailing Party shall pay or reimburse the prevailing Party for the reasonable fees of such
attorneys and such other expenses so incurred
Section 4.6 Dispute Resolution. The Parties may mediate any dispute over the
interpretation of any terms or conditions under this Contingent Loan Agreement Mediation will
be made available upon request of either Party The costs associated with any such mediation
shall be shared equally by the Parties.
ARTICLE 5
Miscellaneous
Section 5.1 Governing Law, Venue This Contingent Loan Agreement is governed by
and shall be construed in accordance with the substantive laws of the State and shall be liberally
construed so as to carry out the purposes hereof Except as otherwise required by applicable law,
any action under this Contingent Loan Agreement shall be brought in the Superior Court of the
State of Washington in and for Lewis County
Section 5.2 Notices. Except as otherwise provided herein, all notices, consents or
other communications required hereunder shall be in writing and shall be sufficiently given if
addressed and hand delivered or mailed by certified or registered mail, postage prepaid and
return receipt requested, as follows
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To the County Lewis County
360 Northwest North Street
MS TR501
Chehalis, Washington 98532-1900
Attention Chair, Board of County Commissioners
Fax: (360) 740-1493
Telephone: (360) 740-1115
To the District. Chair,Board of Directors,
Lewis County Public Facilities District
do Lewis County Treasurer
360 Northwest North Street
MS TR501
Chehalis, Washington 98532-1900
Attention County Treasurer
Fax (360)740-1493
Telephone (360)740-1115
The County or the District may designate any further or different addresses to which subsequent
notices, certificates, requests or other communications shall be sent by giving notice of such
change to the other party Notices shall be deemed served upon deposit of such notices in the
United States mail in the manner provided above.
Section 5.3 Binding Effect. This Contingent Loan Agreement shall inure to the
benefit of the County, the District and the holders of the Bonds and shall be binding upon the
County and the District and their successors This Contingent Loan Agreement may not be
assigned.
Section 5.4 Severability In the event any provision of this Contingent Loan
Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof
Section 5.5 Amendments. This Contingent Loan Agreement may be amended,
changed, modified or altered by an instrument in writing duly executed by the County and the
District (or the successors in title of each), unless (a) expressly permitted by the Bond
Resolution, or (b) if, in the opinion of bond counsel, such amendment will not adversely affect
the security for the Bonds or tax exemption of interest on the tax-exempt series of Bonds This
Contingent Loan Agreement may not be terminated until the Bonds are no longer outstanding,
unless the County has assumed all liability for payment of the principal of and interest on the
Bonds when due and has pledged its full faith and credit to such payment.
Section 5.6 No Rights Created in Third Parties. The terms of this Contingent Loan
Agreement are not intended to establish or to create any rights in any persons or entities other
than the County,the District, and the respective successors and assigns of each.
Section 5.7 Refunding Bonds. If the District issues Refunding Bonds at any time with
the prior written consent of the County, which the County may grant in its sole discretion, all
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S2922Q18.11
references in this Contingent Loan Agreement to "Bonds" shall be deemed to be references to
such "Refunding Bonds" for all purposes, without further action by the parties hereto, but only if
(a)the average annual debt service on the Refunding Bonds does not exceed the average annual
debt service on the Bonds that are being refunded, and (b)the final maturity of the Refunding
Bonds does not extend beyond the final maturity date of the Bonds being refunded
Section 5.8 Time of Essence Time and all terms and conditions shall be of the
essence of this Contingent Loan Agreement
Section 5.9 Execution in Counterparts This Contingent Loan Agreement may be
executed in counterparts
Section 5.10 Effective Date of and Termination of Contingent Loan Agreement. This
Contingent Loan Agreement shall become effective upon its full execution. This Contingent
Loan Agreement shall terminate only upon the repayment or defeasance of all of the Bonds and
the repayment of any obligations owed by the District to the County under this Contingent Loan
Agreement.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LEND MONEY, EXTEND
CREDIT, OR FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW
IN WITNESS WHEREOF, the County and the District have caused this Contingent Loan
Agreement to be executed in their respective names by their duly authorized officers, and have
caused this Contingent Loan Agreement to be dated as of the date set forth on the first page
hereof.
LEWIS COUNTY,WASHINGTON LEWIS COUNTY PUBLIC FACILITIES
DISTRICT
gos/41
Chair, Board of County Commissioners Chair,Board of Directors
Date Signed 3 - G -- t-ui ? Date Signed. 7 6 fl�
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52922013.11
Exhibit A
Form Notice of Missed Deposit
Lewis County _ VIA HAND DELIVERY
360 Northwest North Street (with telephone confirmation)
MS '1'R501
Chehalis, Washington 98532-1900
Attention County Treasurer and
Board of County Commissioners
Fax: (360) 740-1493
Telephone (360)740-1115
Re: NOTICE OF MISSED DEPOSIT
Lewis County Public Facilities District
Limited Sales Tax Obligation and Refunding Bonds,2019 (Taxable)
The undersigned, a duly authorized officer of the Lewis County Public Facilities District (the
"District"), hereby certifies to Lewis County, Washington (the "County"), with reference to the
Contingent Loan Agreement (the "Contingent Loan Agreement") dated February 25, 2019, by
and between the County and the District, and the above-captioned bonds(the"Bonds"), that
1. Pursuant to Section 14 of the Bond Resolution, the District was required to
deposit $ by ,20^
2. As of , 20 , $ of such amount had not been deposited.
Any capitalized term used herein and not defined shall have the meaning assigned to such term
in the Contingent Loan Agreement or, if not therein defined, as defined in the Bond Resolution.
The individual signing below hereby represents that he or she is an officer of the undersigned
and is duly authorized to execute and deliver this document
Dated , 20 .
LEWIS COUNTY PUBLIC FACILITIES DISTRICT
, Treasurer
cc Chair of the District's Board of Directors
A-1
52922018.1 1
Exhibit B
Form Notice of Insufficiency
Lewis County VIA HAND DELIVERY
360 Northwest North Street (with telephone confirmation)
MS TR501
Chehalis, Washington 98532-1900
Attention County Treasurer and
Board of County Commissioners
Fax (360) 740-1493
Telephone. (360) 740-1115
Re: NOTICE OF INSUFFICIENCY
Lewis County Public Facilities District
Limited Sales Tax Obligation and Refunding Bonds,2019 (Taxable)
The undersigned, a duly authorized officer of the Lewis County Public Facilities District (the
"District"), hereby certifies to Lewis County, Washington (the "County"), with reference to the
Contingent Loan Agreement (the "Contingent Loan Agreement") dated February 25, 2019, by
and between the County and the District, and the above-captioned bonds (the"Bonds"),that
1. As of , 20 the amount in the Bond Fund was $ , $
less than the principal and/or interest due on
2. There is a continuing Bond Fund deficiency of$
Pursuant to Section 2.2 of the Contingent Loan Agreement, the County is required to make a
Loan to the District equal to the amount required to remedy such deficiency ($ ) no
later than 10 a.ni on , 20 Business Day preceding the Debt Service Payment
Date)
Any capitalized term used herein and not defined shall have the meaning assigned to such term
in the Contingent Loan Agreement or, if not therein defined, as defined in the Bond Resolution.
The individual signing below hereby represents that he or she is an officer of the undersigned
and is duly authorized to execute and deliver this document.
Dated , 20 .
LEWIS COUNTY PUBLIC FACILITIES DISTRICT
, Treasurer
cc Chair of the District's Board of Directors
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Exhibit C
Purposes and Priority of Application of Sales Tax Revenues
Sales Tax Revenue shall be transferred to and deposited into the Sales Tax Revenue Fund when
and as received by the District or by the Treasurer of the County, as ex officio Treasurer of the
District. Sales Tax Revenue deposited therein, together with the proceeds of Loans made by the
County under the Contingent Loan Agreement (to the extent necessary to provide for the First
and Second purposes) and the 2010 Contingent Loan Agreement (to the extent necessary to
provide for the Fourth purpose below), shall be disbursed for the following purposes in the
following order of priority
First, to make the required deposits into the Principal and Interest Account for the
payment of interest due on the Bonds, the 2010 Bonds and any Additional
Sales Tax Bonds,
Second, to make the required deposits into the Principal and Interest Account for the
payment of principal of the Bonds, the 2010 Bonds and any Additional Sales
Tax Bonds at maturity or upon mandatory sinking fund redemption prior to
scheduled maturity,
Third, to pay Core Operating Expenses of the District,
Fourth, to replenish the 2010 Debt Service Reserve Account so that the amount
therein is at least the reserve requirement for the 2010 Bonds, and the 2019
Debt Service Reserve Account so that the amount therein is at least the
Reserve Requirement;
Fifth, to repay principal of and interest on any Loans made by the County to the
District under the 2010 Contingent Loan Agreement and the 2019 Contingent
Loan Agreement;
Sixth, to pay other administrative operating expenses of the District,
Seventh, to fund any reserves that the District is required by contract, resolution or
otherwise to create and maintain;
Eighth, to pay principal of, premium, if any, and interest on, and any other payments
required in connection with, Subordinate Obligations, and
Ninth, to provide for costs of and reserves for long-term capital repairs, renewals and
replacements of the regional center, and for other lawful purposes, in no
particular order of preference and all as determined by the District.
The District will exercise due regard for the anticipated financial requirements to be satisfied as
priorities First through Eighth above in each calendar year prior to authorizing or making any
disbursement of money in the Sales Tax Revenue Fund for the purpose identified as priority
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For purposes of this Exhibit C, "Core Operating Expenses" means (a) insurance premiums for
building insurance, directors and officers insurance and/or other insurance policies deemed to be
reasonably necessary by the District, (b) fees and costs associated with audits, and (c)other
operating expenses of the District that the District and the County determine to be essential to the
continued operation of the District and/or the protection of the District and its assets.
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CERTIFICATE OF THE LEWIS COUNTY PUBLIC FACILITIES DISTRICT
I, Todd Chaput, Chair of the Board of Directors of Lewis County Public Facilities
District, Lewis County, Washington (the "District"), certifies that the District is authorized to
issue its Limited Sales Tax Obligation and Refunding Bonds, Series 2019 (Taxable) (the
"Bonds") pursuant to Resolution No 2018-01 of the Board of Directors of the District for the
purpose of financing a portion of the cost of renovating and expanding the regional center,
refunding certain outstanding bonds of the Distnct and repaying all or a portion of a loan from
Lewis County (the "County") If the Bonds are sold on March 7, 2019, the District will repay
$122,222 of the County loan to the County on the closing date (expected to be March 21, 2019)
from the proceeds of the Bonds
Dated this 6th day of March, 2019
LEWIS COUNTY PUBLIC FACILITIES
DISTRICT, LEWIS COUNTY, WASHINGTON
Todd Chaput, Chair, Board of Directors
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