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HomeMy WebLinkAboutRES 2596 CITY OF RENTON, WASHINGTON RESOLUTION NO. 2596 A RESOLUTION APPROVING RESOLUTION NO. 84-19 OF KING COUNTY ECONOMIC ENTERPRISE CORPORATION WHEREAS, 1981 Washington Laws, Chapter 300, as codified in RCW 39 . 84 et seq. (the "Act" ) , states that no public corpora- tion may issue revenue bonds except upon the approval of the city, county or town within whose planning jurisdiction the proposed industrial development facility lies; and WHEREAS, King County Economic Enterprise Corporation, a public corporation under the Act (the "Issuer" ) , by the adop- tion of Resolution No . 84-19, attached hereto as Exhibit A, has evidenced its intention to issue bonds in an aggregate prin- cipal amount not to exceed $3,000 , 000 (the "Bonds" ) to finance industrial development facilities located within its geograph- ical boundaries (the "Project" ) for Hans Koch, a sole proprie- tor, together with any affiliate, successor or assign; and WHEREAS, Hans Koch has assigned all rights and interest in the Agreement to Issue Bonds dated as of December 21, 1984 between the Issuer and Hans Koch to Corr-Pro Associates, a Washington general partnership (the "Company" ) , and the Company has assumed all of the duties and obligations thereunder; and RESOLUTION NO. 2596 022785/77911 WHEREAS, the City of Renton is located within the geograph- ical boundaries of the Issuer and is the city within whose planning jurisdiction the Project lies; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RENTON DOES RESOLVE AS FOLLOWS: SECTION I : The City of Renton, as the city within whose planning jurisdiction the Project lies, hereby approves Resolu- tion No. 84-19 of King County Economic Enterprise Corporation as set forth in Exhibit A and approves the Issuer ' s intention to issue the Bonds to finance the Project . The proceeds are to be used to loan money to the Company to acquire and build the Project pursuant to a Loan Agreement (the "Loan Agreement" ) . The Bonds shall be payable solely from the Company' s obliga- tions to repay under the Loan Agreement . The bonds shall not constitute an obligation of the City, and no tax funds or other revenues of the City shall be used to pay the principal of, premium, if any, or interest on the Bonds . Neither the faith and credit nor any taxing power or revenues of the City shall ever be pledged to pay the principal of, premium, if any, or the interest on the Bonds . SECTION II : This resolution is intended solely to consti- tute approval of the issuance of revenue bonds within the mean- ing of RCW 39 . 84 . 060 . This approval shall not in any way be deemed to be a review or final approval of any development -2- RESOLUTION NO. 2596 .s� 022785/77911 permit for the Project which may be in process , or may be sub- mitted at a future date. PASSED BY THE CITY COUNCIL this 4th day of March, 1985 . e2- aE.Mo or, City Clerk APPROVED BY THE MAYOR this 4th day of March, 1985 . Barbara Y. thinpoch, Mayor Approved as to form: Lawrence J. Warren, City Attorney -3- r RESOLUTION NO. . 2596 022785/77911 CERTIFICATE I , Maxine E. Motor, City Clerk of the City of Renton, here- by certify that the foregoing is a full , true and correct copy of a Resolution duly adopted at a regular meeting of the City Council of the City of Renton duly held at the regular meeting place thereof on the 4th day of March, 1985, of which meeting all of the members of said City Council had due notice, includ- ing compliance with the Open Public Meetings Act, Chapter 42 .30 RCW, and at which a quorum was present; and that at said meet- ing, said Resolution was adopted in accordance with the Code of the City of Renton. I further certify that I have carefully compared the fore- going with the original minutes of said meeting on file and of record in my office; that said Resolution is a full, true and correct copy of the original Resolution adopted at said meeting and entered in said minutes; and that said Resolution has not been amended, modified or rescinded since the date of its adop- tion, and is now in full force and effect . WITNESS my hand and the seal of the City of Renton this 4th day of March, 1985 . Maxine E. Motor City Clerk [SEAL] • -4- , RESOLUTION N0. 259 i RESOLUTION NO. 84-19 A RESOLUTION of the Board of Directors of the King County Economic Enterprise Corporation taking official action with respect to the issuance of its nonrecourse revenue bonds in the amount of $3 . 000 ,000 to provide funds to finance the acquisition of land and construc- tion of a light manufacturing plant for Hans Koch. WHEREAS, King County Economic Enterprise Corporation (the "Issuer") , a public corporation, is authorized and empowered by the provisions of Laws of 1981 , Chapter 300 (the "Act") and King County Ordinance No. 6628, to issue bonds for the purpose of facilitating economic development and employment opportuni- ties in the State of Washington through the financing of the project costs of industrial development facilities; and WHEREAS, an executed Indemnification and Compensation Agreement dated as of December 21 , 1984 (the "Indemnification and Compensation Agreement") has been presented to the Board of Directors of the Issuer in the form attached hereto as Exhibit A; and WHEREAS, a proposed form of Agreement to Issue Bonds (the "Agreement") has been presented to the Board of Directors of the Issuer for its approval in the form attached hereto as Exhibit B; and WHEREAS. carder :o : ic= 1a:e economic deve=cFmen: ar.c employment opportunities in the State of Washington (the • �I RESOLUTION NO. 259 121484/4538M "State" ) and the jurisdiction of the Issuer, Mans Koch, a sole proprietorship (together with any affiliate, successor or as- sign, the "Company") has requested the Issuer to assist in the financing of industrial development facilities in Renton, Wash- ington through the loan of bond proceeds to the Company to construct said facilities and has presented to the Issuer the description of the proposed industrial development facilities (the "Project") , and an estimate of the cost of the Project, as shown in the Application for Industrial. Revenue Bond Financing of the Company attached to the Agreement as Exhibit A; and WHEREAS, the Issuer desires to foster economic development in the jurisdiction of the Issuer; and WHEREAS, the Issuer deems it necessary and advisable for the facilitation of economic development and employment oppor- tunities within the State and the jurisdiction of the Issuer that the Project be constructed at the earliest practicable date, but the Company requires satisfactory assurances from the Issuer that the proceeds of the sale of bonds of the Issuer will be loaned to the Company to finance the Project; and WHEREAS, King County Ordinance No. 6628 and the policies adopted thereby and the policies of the Issuer require that certain requirements be fulfilled and certain findings be made prior to the adoption of an inducement resolution; and WHEREAS, notice has been given in accordance with the Open Public Meetings Act, Chapter 42 .30 RCW, and the policies of the -2- RESOLUTION NO. 2596 121484/4538M Issuer of a public hearing to be held this date for the purpose of soliciting comments by citizens regarding the adoption of an inducement resolution stating that the Issuer intends to issue industrial development revenue bonds in favor of the Company; and WHEREAS, a public hearing has been held this date at which citizens of King County and representatives from the City of Renton had the opportunity to offer comments with regard to the adoption of an inducement resolution, and this Board of Direc- tors has considered those comments, together with (i) the Ap- plication for Industrial Revenue Bond Financing of the Company, (ii) the Issuer ' s application to the Department of Commerce and Economic Development of the State of Washington with respect to the eligibility of the Project under the Act, and (iii) the preliminary staff report prepared by the Issuer with respect to the Project ' s apparent eligibility under and consistency with the Act, the Internal Revenue Code of 1954 and the regulations thereunder, and the policies adopted by King County Ordinance No. 6628; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of King County Economic Enterprise Corporation, as follows : Recaardina Nord' sc'':"'^ca' tion. T'he Board of directors of the Issuer herebv acknowledges receipt of a certificate of the Company' s chief executive officer certifying -3- RESOLUTION NO. 2596 121484/4538M that the Company engages in nondiscriminatory employment prac- tices and hereby finds that the Company has certified that it engages in nondiscriminatory4employment practices. SECTION 2. Finding Regarding Employment. The Board of Directors of the Issuer hereby finds that the Company has shown that the Project creates or maintains employment within the jurisdiction of the Issuer . SECTION 3 . Finding Regarding Policy Compliance. The Board of Directors of the Issuer hereby finds that the Project con- forms to the policies adopted by King County Ordinance No. 6628 and is acceptable based on legal and financial considerations . SECTION 4 . Finding Regarding Economic Development. The Board of Directors of the Issuer hereby finds that the acquisi- tion and construction of industrial development facilities by the Company within the boundaries of the Issuer will facilitate economic development and will be consistent with the public purposes set forth in the Act . SECTION 5. Conditional Agreement to Issue Bonds. Subject to the provisions of the Indemnification and Compensation Agreement and the Agreement, the Issuer will issue an amount not to exceed $3,000,000 principal amount of bonds for the Project . SECTION 6. Bonds To Be Limited Obligations . The bonds shall be payable solely from either the revenues derived. as a result of the Project funded by the revenue bonds, including, -4- RESOLUTION NO. 2596 121484/4538m without limitation, amounts received under the terms of any financing document or by reason of any additional security furnished by the Company in connection with the financing of the Project, and/or money and other property received from private sources. Each bond shall contain a statement to the following effect: Neither the State, King County, nor any other munici- pal corporation, quasi-municipal corporation, subdivi- sion, or agency of the State is obligated to pay the principal of, premium, if any, or the interest on this Bond; no tax funds or governmental revenue may be used to pay the principal of, premium, if any, or interest on this Bond; and neither any or all of the faith and credit nor the taxing power of the State, King County, the Issuer or any other municipal corporation, quasi- municipal corporation, subdivision, or agency thereof is pledged to the payment of the principal of, premi- um, if any, or the interest on this Bond. SECTION 7. Approval of Indemnification Agreement. The Indemnification and Compensation Agreement in the form pre- sented is hereby ratified and approved. SECTION 8. Approval of Agreement to Issue Bonds . The Agreement in the form presented is hereby approved, and the President and the Vice President are each hereby authorized to execute and deliver the Agreement on behalf of the Issuer. SECTION 9 . Proiect Commencement . The Company is autho- rized to commence construction of such Project and advance such funds as may be necessary therefor , subject to reimbursement for all expenditures, but only out of proceeds, if any, of the issue of bonds herein authorized. -5- RESOLUTION NO. 2596 121484/4538m SECTION 10. Resolution Constitutes Official Action. It is intended that this Resolution shall constitute "some other similar official action" toward the issuance of bonds within the meaning of Section 1.103-8(a) (5) of the Treasury Regula- tions promulgated under Section 103 of the Internal Revenue Code of 1954 . SECTION 11. Effective Date. . This Resolution shall take effect immediately upon its passage and remain in full force and effect thereafter; provided, however, that this Resolution shall cease to be effective 12 months after the date of its adoption unless prior thereto the Issuer specifically adopts a further resolution extending the effective date of this Resolu- tion, which it will do only after receiving a specific request for such action from the Company, accompanied by an explanation of the reason why the Project has not proceeded prior to the date of the letter. ADOPTED by the Board of Directors of the King County Economic Enterprise Corporation this 21st day of December, 1984 . _ BOARD OF DIRECTORS, RING COUNTY rRswomic SE CORPORATION Paul Isaki President [ AL] tte R bertV. Cowan, Jr . Secretary -6- 121484/4538m RESOLUTION NO. 2596 SECRETARY'S CERTIFICATE I, Robert V. Cowan, Jr . , .Secretary of the King County Eco- nomic Enterprise Corporation, hereby certify that the foregoing is a full, true and correct copy of a Resolution duly adopted at a special meeting of the Board of Directors of said public corporation duly held at the regular meeting place thereof on the 21st day of December, 1984, of which meeting all of the members of said Board of Directors had due notice, including compliance with the Open Public, Meetings Act, RCW 42.30, and at which a quorum was present; and that at said meeting, said Resolution was adopted by the following vote: AYES: Mr. Douglas, Mr. Lansing, Mr. Isaki NOES: ABS ; Mr. Bender, Ms. Tatalias ABSTAINING: I further certify that I have carefully compared the fore- going with the original minutes of said meeting on file and of record in my office; that said Resolution is a full, true and correct copy of the original Resolution adopted at said meeting and entered in said minutes; and that said Resolution has not been amended, modified or rescinded since the date of its adop- tion, and is now in full force and effect. WITNESS my hand and the seal of the King County Economic Enterprise Corporation this 2 st aWofDec a 984 . bert V. Cowan, Jr . Secretary [SEAL) -7- , a RESOLUTION NO 2596 For Corporation/County Relating to Application 0 Name of Applicant Date of Application IDEMNIFICATION ANO COMPENSATION AGREEMENT THIS AGREEMENT, entered into as of the 07/ day of n 198 . ic Enterprise Corporation created by King County, between the King County Econom Washington (the "County"), under the provisions of RCW Ch. 39.84, as amended (herein called the "Corporation"), and Bans Koch (herein called the "App licant"), in connection with the application for industrial development bond issuance submitted on —Dec by the Applicant to the Corporation. Section 1. Background* The Corporation has entered into an agreement � _ with the County. Under the agreement, the County performs certain services for the Corporation including, among others, reviewing applications for industrial development bond financing and assisting the Corporation in the issuance of nonrecourse revenue bonds and servicing, if any, required subsequent to the issuance of such bonds. Section p. Services to be Provided-by Corporation/County. The County on behalf of the Corporation, has recieved the Applicant's application for the financing of an industrial development facility (the "Project"). If the County and bond counsel determine that such application may be approved, bond counsel will prepare a resolution for consideration by the Corporation Ithe "Official assist in preparation and presentation of Action Resolution"). The County will -1- the Official Action Re� �lution. RESOLUTION NO. 2596 Subsequent to the adoption of the Official Action Resolution, the County and the Corporation will cooperate with the Applicant, its underwriter, banker, and counsel in arranging for the financing of the Project through the issuance of nonrecourse industrial development bonds of the Corporation (the "Bonds"). The County and the Corporation have no authority or responsibility to assist in locating a purchaser for the Bonds. Sect_. Fees and Expenses. A. Nonrefundable Application Fee. At the time of submitting its applica- tion for industrial development bond issuance, the Applicant shall pay a Nonrefundable Application Fee based on the following schedule: Principal Amount Of Bonds Requested implication Fee SO - $1,000,000 $1,000 $1,000,001 - $8,000,000 $1,000 plus .05% of principal amount t Over $8,000,000 $5,000 In addition to the Nonrefundable Application Fee, the Applicant shall pay the Corporation for all expenses, direct or indirect, incurred by the Corporation in administering and servicing the application to the extent such fees exceed the Nonrefundable Application Fee accompanying the application. Such expenses shall be paid within fifteen (IS) days of billing by the Corporation. It is the intention that the Applicant must reimburse the Corporation for all expenses of administering and servicing the application, including bond counsel fees, if applicable, whether the application is granted or denied to the extent that the Nonrefundable Application Fee does not cover such expenses. In addition, the Applicant shall pay all costs, direct or indirect, -2- RESOLUTION NO.259 resulting from the if ance of the Bonds, including, 1 not limited to, the following items: (i) fees of bond Counsel ; (ii ) fees of financial consultants or bond underwriters; (iii) costs of printing and execution of bonds; (iv) fees of engineers, economists or other special consultants in connection with the issuance of the Bonds; (v) fees of trustee; (vi) fees of local counsel ; and (vii ) travel expenses of the Directors and staff if travel is required or requested by the Applicant. The Corporation and/or the County will , upon request, provide or cause to be provided to the Applicant any data or information which may be reasonably required to verify any of the costs and expenses and fees enumerated above. To the extent that the costs, expenses and fees enumerated above are not or may not be paid or reimbursed from the proceeds of the Bonds, the Applicant shall pay the same within fifteen (15) days of billing. ! B. Annual Service Fee. In addition to the fees above mentioned, the Applicant shall pay to the Corporation for servicing the account, an Annual Service Fee. The Annual Service Fee shall be determined as follows: 1. One-tenth of one percent (1/10x) of the outstanding principal balance of unredeemed Bonds on each anniversary date of the issue, payable in advance, com- mencing with the date of issuance of the Bonds and on each anniversary date thereafter. Such fees shall cover the annual costs of the Corporation. These costs shall be for Directors' meetings and costs (including Directors' insurance), staff costs, if any, auditing fees and costs, and any and all other general expenses of the Corporation. The costs shall be divided per capita -3- RESOLUTION NO. 2596 among the various applic-AS for financing and shall bet 'led from time to time by the Corporation as costs are incurred. 2. In addition, the Applicant shall pay any and all costs attributable specifically to the outstanding Bonds. Such costs will be billed from time to time as the costs are incurred. 3. The foregoing fees and reimbursement of costs and expenses shall be paid within fifteen (15) days of billing by the Corporation. Section 4. Idemnification. The Applicant agrees that it will at all times idemnify and hold harmless the Corporation and the County against all losses, costs, damages, expenses and liabilities (collectively referred to herein as 'Losses") of whatsoever nature (including but not limited to attorneys' fees, litigation and court costs, amounts paid in settlement, and amounts to discharge judgments) directly or indirectly resulting from, arising out of, or related to one or more Claims, as hereinafter defined, even if such Losses or Claims, or both, directly or indirectly result from, arisen out of, or relate to or are aserted to have resulted from, arisen out of or related to, in whole or in part, one or more negligent acts or omissions of the Corporation and/or the f County or its or their officers, commissioners, employees, agents, servants or any other party acting for or on behalf of,the Corporation and/or the County. The term "Claims" as used herein shall mean all claims, lawsuits, causes of action, and other legal actions and proceedings of whatsoever nature, including but not limited to claims, lawsuits, causes of action, and other legal actions and proceedings, involving bodily or personal injury or death of any person or any damage to property (including but not limited to persons employed by the Corporation and/or the County, the Applicant or any other person and all property owned or claimed by the Corporation and/or the County, the Applicant, any affiliate of the Applicant or any other person) or involving damages -4- RESOLUTION NO. 2596 relating to the issu e, offering, sale or delivery the Bonds brought against the Corporation and/or )the County or to which the Corporation and/or the County is a party, even if groundless, false or fraudulent, that directly or indirectly result from, arise out of or relate to the design, construction, operation, use, occupancy, maintenance or ownership of the Project or any part thereof or from the issuance, offering, sale or delivery of the Bonds or the terms or covenants thereof. The obligations of the Applicant shall apply to all Losses or Claims, or both, that result from, arise out of, or are related to any event, occurrence, condition or relationship, whether such losses of Claims, or both, are asserted. Neither the Corporation nor the County will be liable to the Applicant for, and the applicant hereby releases the Corporation and the County from all liability for, all or any part or parts of any Losses or Claims occurring as a result of injuries, damages or destruction by or to any property owned or claimed by the Applicant, which losses or claims directly or indirectly result from, arise out of or relate to the design, construction, operation, use, occupancy, maintenance or ownership of the Project or any part thereof, even if such injuries, damages or destruction directly or indirectly result from, arise r. out of or relate to, in whole or in part, one or more negligent acts or omissions of the Corporation and/or the County or its or their officers, directors, employees, agents, servants, or any other party acting for or on behalf of the Corporation and/or the County. The Corporatin shall reimburse the Applicant for payments made by the Applicant to the extent of any proceeds, net of all expenses of collection, actually received by the Corporation from any insurance with respect to the loss sustained. The Corporation shall have the duty to claim any such insurance proceeds and the Corporation shall assign its rights to such proceeds, to the extent of such required reimbursement, to the Applicant. In case any action shall be brought against the Corporation in RESOLUTION NO. 2596 • respect of which indemnity may be sought against the Applicant, the Corporation shall promptly notify the Applicant in writing, and the Applicant shall have the right to assume the investigation and defense thereof including the employment of counsel and the payment of all expenses. The Corporation shall have the right to employ separate counsel in any such action and participate in the investigation and defense thereof, but the fees and expenses of such counsel shall be paid by the Corporation unless the employment of such counsel has been authorized by the Applicant. The Applicant shall not be liable for any settlement of any such action without its consent but, if any such action is settled with the consent of the Applicant or if there be final judgement for the plaintiff of any such action, the Applicant agrees to idemnify and hold harmless the Corporation and the County from and against any Losses by reason of such settlement or judgement. The provisions of this section shall survive the expiration or termination of this Agreement. Section 5. Tax Payment and Idemnification. The Applicant hereby agrees to pay direand/or to reimburse the Corporation for any and all taxes, assessments, licenses, fees, charges and other impositions levied, assessed or, imposed by local , state or federal authorities against the Applicant or the Corporation based upon the activity of issuing the Bonds or which are measured by such Bond financing. Further. Applicant agrees to pay in full before delinquency all taxes, assessments, licenses, fees, charges, or other imposi- ition that may now or hereafter be levied, assessed or imposed by local , state, or federal authorities against the Applicant, the Applicant's activities in Washington, the Project or against the Applicant or the Corporation resulting from administration or payment or service of the Bonds including without limita- tion the current business and occupation tax of the State of Washington and its political subdivisions. The Applicant, upon request, will exhibit to the -6- RESOLUTION NO. 259 • Corporation official receipts therefor. On default under this Agreement, the Corporation may, at its option, pay out of any unencumbered funds accumulated under the Bonds, any such sums without waiver of any other right of the Corporation which accrued by reason of such default of the Applicant; the Corporation shall not be liable to the Applicant for failure to exercise any such option. Upon payment by the Corporation of any such amount, the Applicant shall promptly reimburse the Corporation, and the Applicant hereby agrees to idemnify and hold the Corporation harmless from any interest, penalty, or other charge, as well as payment of the principal amount, that may be assessed as a result of the default of the Applicant in payment of such tax or other charge. In the event of the passage after the date of the Bonds of any federal , state or local law for the purpose of imposing a tax, assessment, charge, license or fee on the Bonds or measured by the Bonds or changing in any way the law now in force for the taxation of the bonds, the debt evidenced thereby, the security for such debt or the manner of collection of any such tax so as to adversely affect the Corporation, then and in such event the Applicant shall bear and pay the full amount of such a tax or other charge; provided, however, that if a federal or state tax is assessed against the Corporation upon or measured by the Corporation's net income from the issuance of industrial deve- lopment bonds, such income tax shall be the responsibility of and be paid by the Corporation. Section 6. Federal Tax Information. The Applicant covenants and agrees to furnish to the Corporation not later than five (5) days before the adoption of the final bond resolution with respect to the Bonds, a fully completed Internal Revenue Service Form 8038, signed by the preparer thereof, with respect to the Bonds. The Applicant further covenants and agrees that it or its agent will have the primary responsibility as between or among any preparers for the -7- RESOLUTION NO. 2596 overall substantive accuracy of the preparation of the Form 8038. The Applicant will hold harmless the Corporation, Bond Counsel , and any purchaser or holder of the Bonds, against all consequences of any material misrepresentation in or material omission from such Form 803840 Section 7. Termination. if twelve (12) full calendar months shall have elapsed following the date on which the Project was first placed in service as that term is defined in U.S. Treasury Regulation 1.103-8(a)(5)(v) and the Applicant shall not have designated a purchaser of Bonds and recommended terms for the Bonds, the Corporation shall have the right to give written notice by postage prepaid, certified or registered mail to the Applicant at the address set forth in Exhibit "A" hereto, and if the Applicant at the address set forth in Exhibit "A" hereto, and if the Applicant shall not have designated a purchaser and recommended terms of the Bonds within thirty (30) days after giving of such notice then the Corporation may unilaterally terminate this Agreement without any liability by it to the Applicant. So long as no Bonds have been issued and remain outstanding, the Applicant may unilaterally terminate this Agreement without liability by it to the Corporation and/or the County (except for amounts due and owing by it to the Corporation and/or the -8- ' RESOLUTION NO. 2596 • County at the time of _ermination which shall be paid -, the Applicant to the Corporation at the address set forth in Exhibit "A" hereto specifying therein the date of termination which may be the date of notice). IN WITNESS WHEREOF. the King County Economic Development Corporation has caused its name to be hereunto subscribed and has executed this document as of the year and date first above written. KING COUNTY ECONOMIC DEVELOPMENT CORPORATION By President Board f Directors APPLIC T B • Title• Name of Appl i'cant: Hans Koch -9- RESOLUTION NO. 2596 o • EXHIBIT "A" ADDRESS OF CORPORATION: King County Economic Enterprise Corporation c/o King County Office of Finance King County Administration Building SOO Fourth Avenue Seattle, Washington 98104 Attention: Robert V. Cowan, Jr. ADDRESS OF APPLICANT: 75 1 D,ew ex tCre�gw T Attention: �fJl/S �UCG� -10- ZAnlblT b RESOLUTION NO. 259 AGREEMENT TO ISSUE BONDS THIS AGREEMENT is made as of December 21 , 1984, between Ring County Economic Enterprise Corporation, a public corpora- tion and an authority and instrumentality (within the meaning of those terms in the regulations of the United States Treasury and the rulings of the Internal Revenue Service prescribed pursuant to Section 103 of the Internal Revenue Code of 1954 , as amended) created under the auspices of King County pursuant to Laws of 1981, Chapter 300, together with any subsequent laws authorizing the issuance of revenue bonds for the purposes described below (the "Act") , together with any successor to its duties and functions (the "Issuer" ) , and Hans Koch, a sole proprietorship, authorized to do business in the State of Washington, together with any affiliate, successor or assign to its rights and duties hereunder (the "Company") , for the purpose of carrying out the public purposes set forth .in the Act. W I T N E S S E T H: WHEREAS, the Issuer is authorized by the Act and King County Ordinance No. 6628 to finance industrial development facilities, as set forth in the Act and to issue its revenue bonds for the purpose of financing the cost thereof and related costs; and • RESOLUTION NO. 2596 121484/4537M WHEREAS, the Issuer has determined that the acquisition and construction of industrial development facilities by the Com- pany within the boundaries of the Issuer (such industrial development facilities being more fully described in the Application for Industrial Revenue Bond Financing of the Company attached hereto as Exhibit A and herein called the "Project") , will facilitate economic development and employment opportunities and will be consistent with the public purposes set forth in the Act; and WHEREAS, the Issuer and the Company desire to cooperate in the financing of the Project and to have the costs of the Project financed from the proceeds of revenue bonds of the Issuer (herein called the "Bonds") to be issued pursuant to the Act in an aggregate principal amount not to exceed $3,000,000; and WHEREAS, it will be necessary for the Issuer to appoint nationally recognized bond counsel to assist in issuing the Bonds and to render an .opinion; and WHEREAS, the Issuer and the Company contemplate that the Project will be constructed by the Company, financed through a loan from the Issuer to the Company, and that the payments to the Issuer on such loan together with other moneys available shall be sufficient to pay debt service on the Bonds and all related costs; NOW, THEREFORE, in consideration of the premise and other good and valuable consideration and of the mutual benefits, -2- • RESOLUTION NO. 2596 121484/4537M covenants and agreements herein expressed, the Issuer and, the Company agree as follows : 1 . Construction. The Company will be solely responsible for the acquisition and construction of the Project, and the Company will provide, or cause to be provided, any necessary interim financing to permit the acquisition and construction of the Project to commence and continue expeditiously pending the issuance of interim and/or permanent Bonds. 2. Loan to Company. The Company shall enter into a loan agreement or agreements (herein called the "Loan Agreement" ) with the Issuer for the loan to the Company of the proceeds of the Bonds then issued, and under which the Company will agree to make periodic payments sufficient to pay the principal of, premium, if any, and interest on the Bonds. - 3 . Sale of Bonds, Security. The Issuer will use its best efforts to issue, sell and deliver, pursuant to the terms of the Act, the Bonds for the purpose of financing the costs of the Project, in each case only upon designation by the Company of the purchaser(s) or underwriters(s) thereof, such Bonds to be in the principal amount, to mature in such amount and times, to bear interest at such rate or rates and to be payable on such dates and to have such optional and mandatory redemption features and prices as are determined by the Board of Directors of the Issuer or any successor governing body (the "Board of Directors") and approved in writing by the Company. 6It is -3- s RESOLUTION NO. 2596 121484/4537M understood by the parties hereto that reference above to "best efforts to . . . sell" does not obligate the Issuer to participate in any way in the marketing of the Bonds. The Issuer further agrees that it will use its best efforts to enter into the Loan Agreement and, if required, an agreement (or assignment and/or indenture of trust) with a bank or trust company, qualified to exercise trust powers where necessary, for the purpose of providing periodic payments sufficient, with other amounts available, to pay the principal of, premium, if any, and interest on the Bonds as they become due and pledging or otherwise securing the payment of such periodic payments for the benefit of the holder(s) of the Bonds. The principal of, premium, if any, and interest on the Bonds issued by the Issuer shall be secured by a pledge of unexpended bond proceeds and the revenues and receipts received by the Issuer from the Project funded by the Bonds . Pursuant to the Loan Agreement, the Company shall agree to make payments to provide sufficient revenues to pay (1) the principal of, premium, if any, and the interest on the revenue bonds proposed to be issued to finance the Project; (2) subject to the approval of the Company, the amount necessary to be paid each year into any reserve funds which the Issuer considers advisable to establish in connection with the retirement of the proposed bonds and the maintenance of the Project; and (3) unless the terms of the Loan Agreement provide that the Company shall maintain the Project and carry -4- RESOLUTION NO. 2596 121484/4537M all proper insurance with respect thereto, the estimated cost of maintaining the Project in good repair and keeping it properly insured. The Issuer will cooperate to its fullest extent in consummating the transactions so contemplated and in attempting to realize the desire of the parties. hereto that interest on all Bonds be exempt from federal income taxation. 4 . Bonds to be Special Obligations . The Issuer shall have no financial responsibility with respect to the Project, the Bonds or the costs associated with either, and the Bonds shall be limited obligations of the Issuer and shall never constitute a general obligation, indebtedness or pledge of the credit of the Issuer within the meaning of any constitutional or statutory limitation and shall not constitute or give rise to a charge against the general credit or taxing power of the Issuer or any pecuniary liability of the Issuer. The Bonds shall be payable solely from either the revenues derived as a result of the Project funded by the revenue bonds, including, without limitation, amounts received under the terms of any financing document or by .reason of any .additional security furnished by the Company in connection with the financing of the Project, and/or money and other property received from private sources . Each bond shall contain a statement to the following effect : Neither the State, King County, or any other munici— pal corporation, quasi-municipal corporation, subdivi- sion, or agency of the State is obligated to pay the -5- I RESOLUTION NO. 2596 121484/4537m • principal of, premium, if any, or the interest on this Bond; no tax funds or governmental revenue may be used to pay the principal of, premium, if any, or the interest on this Bond; and neither any or all of the faith and credit nor the taxing power of the State, King County, or any other municipal corporation, quasi-municipal corporation, subdivision, or agency thereof is pledged to the payment of the principal of, premium, if any, or the interest on this Bond. 5. Conditions of Issuance. The Bonds shall be issued at one time in a single issue in such aggregate principal amount as the Company shall request; provided that it shall be a condition to the issuance of the Bonds that (a) the Issuer and the Company shall have first agreed to mutually acceptable terms for the Bonds and of the sale and delivery thereof and mutually acceptable terms and conditions of the Loan Agreement, (b) all requisite governmental approvals, including those required by the Act, shall have first been obtained, and (c) the Issuer be in receipt of an opinion or opinions from underwriter's counsel or bond counsel to the effect that repre- sentations and findings that the Issuer is required by law to make can properly be made with respect to the Project. It is further agreed that the proceeds of the Bonds shall not be invested so as to constitute any of the Bonds as arbitrage bonds within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, and applicable regulations promulgated pursuant thereto. 6. Use of Proceeds. The proceeds of the Bonds of 'such issue shall be used solely for the making of a loan in the -6- RESOLUTION NO. 2596 121484/4537m amount of all or part of the project costs, as defined in Section 7 below, and shall be disbursed in such manner and under such restrictions, if any, provided in the resolution authorizing the issuance of the Bonds or in the trust indenture securing the Bonds . If the proceeds of the Bonds exceed the cost of the Project, the surplus shall be deposited to the credit of the debt service fund for the Bonds or used to purchase Bonds in the open market. 7. Costs to be Financed. The costs of the Project may include those costs enumerated in the Act as "Project costs . " 8. Bond Counsel . The Company and the Issuer agree that the Issuer will appoint Perkins, Coie, Stone, Olsen & Williams, a nationally recognized bond counsel firm, as bond counsel in connection with the issuance of the Bonds. Bond counsel 's fee will be paid by the Company in an amount to be agreed upon between the Company and bond counsel . 9. Termination. The Company may unilaterally terminate this Agreement without . liability to the Issuer except for amounts due and owing by the Company under the Indemnification and Compensation Agreement dated as of December 21, 1984 between the Issuer and the Company (the "Indemnification and Compensation Agreement") . 10 . Purpose and Effect . The Bonds are to be issued, sold and delivered under authority of the Act and all related actions and documents shall be in conformity therewith. The -7- RESOLUTION NO. 2596 . s ti 121484/4537M Issuer intends this Agreement to Issue Bonds to be its official binding commitment, pursuant °to the terms hereof, to use its best efforts to issue the Bonds up to ;3,000,000 aggregate principal amount . The terms and provisions of this Agreement to Issue Bonds is supplemental to any covenants contained in the Indemnification and Compensation Agreement. In the event of a conflict, the terms of the Indemnification and Compensation Agreement shall prevail . The Issuer considers this Agreement to be an official action of the Issuer, acting by and through the Board of Directors, toward the issuance of the Bonds in accordance with the purposes of the Act and Section 1. 103-8(a)(5) (iii) of the Federal Income Tax Regulations. KING COUNTY ECONOMIC ENTERPRISE CORPORATION [SEAL] ByPaul Isaki President Attest: By. Robert V. Cowan, Jr . Secretary By Hans Koch, Sole Proprietor -8-