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HomeMy WebLinkAboutR-1998-067 Contingent Loan AgreementRESOLUTION NO. R-98- 67 A RESOLUTION providing for a Contingent Loan Agreement with the Housing Authority of Yakima, Washington, to provide assistance in securing bonds to be issued by the Authority to finance the construction of the Nueva Primavera Project of the Authority. WHEREAS, RCW 35.83.050 provides that a city may lend or donate money to a housing authority or agree tot take such action; and • WHEREAS, the Housing Authority of the City of Yakima (the "Authority") has requested that the City of Yakima (the "City") enter into a Contingent Loan Agreement, evidencing the City's commitment to make loans to the Authority if and to the extent necessary to replenish the reserve account maintained by the trustee for the Authority's proposed Housing Revenue Bonds, 1998 (Nueva Primavera Project) (the "Bonds") and to make up deficiencies in the amounts provided by the Authority to make payments of the principal of and interest on the bonds when due; and WHEREAS, BancAmerica Robertson Stephens (the "Bank"), as underwriter for the bonds, has requested additional assurances that the principal of and interest on the bonds will be paid when due; and WHEREAS, the City Council finds that it is in the best interest of the citizens of Yakima, particularly low-income citizens, to assist the Authority in its issuance of the Bonds; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: Section 1. Approval of Contingent Loan Agreement. The City Council declares its intent to enter into a Contingent Loan Agreement, substantially in the form attached. hereto as Exhibit A (the "Agreement"), with the Authority. The City Manager and City Clerk are authorized to execute the Agreement on behalf of the ,City at or before the time the bonds are issued by the Authority. The City Manager is authorized to deliver the signed agreement to the Authority upon his determination that all steps necessary for the successful completion of the Nueva Primavera Project and all. necessary documentation have been completed or such completion has beenreasonably assured. The interest rate appliedto each advance under the Agreement shall be set by the City in accordance with the Agreement at such time as funds are advanced, but shall not exceed 12% per annum. The total amount of funds to be lent by the City pursuant to the Agreement shall not exceed the principal amount of the bonds approved by the City plus interest due Page 1 of 2 U ..'Nuevo Prunavera-pm and unpaid by the Authority. Upon execution of the Agreement, the full faith, credit and resources of the City shall be pledged irrevocably for the payment of the amounts described in the Agreement. Section 2. Effective Date. This Resolution shall be effective from and after its date of final passage. ADOPTED BY THE CITY COUNCIL this ( day of mily 1998. ATTEST: Artdr john Puccinelli, Mayor City Clerk Page 2 of 2 (tkhe./\uesa Pnm.vera.pm CONTINGENT LOAN AGREEMENT THIS CONTINGENT LOAN AGREEMENT (this "Agreement") dated as of September 1, 1998, by and between the CITY OF YAKIMA, WASHINGTON (the "City"), and the HOUSING AUTHORITY OF THE CITY OF YAKIMA, a public body corporate and politic of the State of Washington (the "Authority"); WITNESSETH: WHEREAS, Revised Code of Washington ("RCW") Section 35.83.050 provides that a city may lend or donate money to a housing authority or agree to take such action; and WHEREAS, the Authority, by its Resolution No 98-447, adopted August 27, 1998, authorized the issuance of the Authority's revenue bonds (the "Bonds") in the aggregate principal amount of not to exceed $2,700,000 for the purpose of providing part of the funds with which to finance the construction of a 38 -unit apartment complex to be known as the Nueva Primavera Apartments (the "Project"); and WHEREAS, BancAmerica Securities, Inc , as underwriter for the Bonds, has requested additional assurances that the principal of and interest on the Bonds will be paid when due, and WHEREAS, the City has declared its intent to enter into a contingent loan agreement with the Authority to evidence the City's commitment to make loans to the Authority if and to the extent necessary to replenish the Reserve Account maintained by the trustee for the Bonds and to make up any deficiencies in the amounts provided by the Authority to make payments of the principal of and interest on the Bonds when due, and approved the form and execution of this Agreement; NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the parties hereto covenant and agree as follows. ARTICLE I Incorporation of Documents: Definitions Section 1.01. Incorporation of Documents. Copies of the Trust Indenture (including any amendments or supplements thereto, the "Indenture") dated as of September 1, 1998, between the Authority and U S. Bank Trust National Association, as Trustee, relating to the Bonds, and the Deed of Trust (as defined herein) are attached hereto as Exhibits A and B, respectively. The Authority shall not amend the Indenture without the prior written consent of the City so long as this Agreement is in effect. tnnwInR ns Section 1.02. Definitions. Unless the context clearly requires otherwise, the following terms shall have the respective meanings set forth below for all purposes of this Agreement. Deed of Trust means the Deed of Trust, Assignment of Rents and Leases and Security Agreement under which the Authority is the Grantor and the City is the Beneficiary, relating to the Project. General Revenues means all revenues (other than Project Revenues) of the Authority from any source, but only to the extent that those revenues are available to pay debt service on the Bonds and are not pledged, by law, regulation, contract, covenant, resolution, deed of trust or otherwise, solely to another particular purpose. Insurance and Policies of Insurance may include, but are not limited to, coverage provided by a self insurance risk sharing pool. All references herein to "insurance," "insured," "insurance policies," "insure," and "insurers" shall be deemed to include references to coverage, :Artitics covered, coverage documents, the term "cover" and to such pools, respectively. The Housing Authorities Risk Retention Pool is such a self-insurance risk sharing pool. Indenture means the Trust Indenture between the Authority and the Trustee, dated as of September 1, 1998, relating to the Project. Investment Earnings means all earnings derived from the investment of money held in any of the Funds held by the Trustee under the Indenture Net Revenues means Project Revenues less Operation and Maintenance Costs and Trustee fees and expenses, if any. Operation and Maintenance Costs means all necessary costs to the Authority of operating and maintaining the Project, including but not limited to administrative and general expenses, costs of insurance (including reasonable contributions for self-insurance reserves, if any), consulting technical services and repairs and replacements (to the extent not properly classifiable as capital costs) and reasonable reserves therefor, but excluding depreciation (or reserves therefor), amortization of intangibles or other bookkeeping entries of a similar nature and debt service on the Bonds or any other obligations of the Authority relating to the Project. Project Revenues means all amounts due to or received by the Authority or by the Trustee for the account of the Authority pursuant or with respect to the Project, including without limitation all lease payments, Insurance Proceeds, Condemnation Awards, and proceeds resulting from foreclosure of the Deed of Trust, and all Investment Earnings. Refunding Bonds means any bonds issued to refund the Bonds, but only if the required debt service on those bonds does not exceed the Required Debt Service on the Bonds in any year and if the maturity of those bonds does not extend beyond the maturity of the Bonds. 2 Required Debt Service means, for any Fiscal Year, with respect to the Bonds, the amount required to make scheduled payments of principal of (including mandatory redemption payments with respect to term bonds) and interest on the Bonds in that Fiscal Year. Reserve Account means the Reserve Account established by the Indenture. Reserve Requirement means, with respect to the Bonds, the maximum annual debt service on the Bonds, estimated not to exceed $188,648, subject to reduction at the times and in the manner described in the Indenture. Trustee means the entity serving as trustee under the Indenture, initially U.S. Bank Trust National Association, a national banking association organized and existing under the laws of the United States of America and having a place of business in Seattle, Washington, or its successor, as trustee under the Indenture. h, 11 other capitalized teras used but not defined in this Agreement shall have the meanings assignee to tnem in the Indenture. ARTICLE II Loans to the Authority; Repayment Terms; Interest Rate; Limitation of Liability Section 2.01. Loans to the Authority. The City agrees to lend to the Authority the principal amount equal to (1) the amount sufficient, together with Net Revenues and General Revenues, if any, deposited with the Trustee, to replenish the Reserve Account maintained by the Trustee pursuant to the Indenture to the Reserve Requirement for the Bonds, and (2) upon an extraordinary mandatory redemption of the Bonds pursuant to paragraphs (a) or (c) of Section 3 2(3) of the Indenture, the amount sufficient, together with Net Revenues and other money available therefor, including money in the Reserve Account, on deposit with the Trustee, to pay the principal of and interest on the Bonds when due The Authority agrees to borrow the amounts described above from the City pursuant to this Agreement for the purpose of meeting its obligations under the Bonds and the Indenture. The total amount of funds to be lent by the City pursuant to this Agreement shall not exceed the principal amount of the Bonds plus interest due and unpaid by the Authority. Section 2.02. Time of Loan. The loan shall be made at such time or times, if any, as the Authority is unable, because of lack of sufficient Net Revenues and General Revenues, to replenish the Reserve Account to the Reserve Requirement for the Bonds or if the money available under the Indenture to the Trustee is insufficient to pay the principal of and interest on the Bonds when due. The loan may be made in a series of principal advances. 3 Section 2.03. Repayment Terms. The loan shall be repaid on reasonable terms established by the City at such time as funds are advanced. Such terms shall require the repayment of principal of such advance and interest thereon from the first available Net Revenues in excess of the amounts needed to pay the interest and principal payments then due under the Bonds or from the Authority's General Revenues Section 2.04 Interest Rate. The rate of interest borne by each advance hereunder shall be the rate that represents the documented actual cost (including opportunity cost) to the City of making the loan to the Authority (as determined by the City), but in no event shall the rate of interest on any loan hereunder exceed 12% per annum. The City may in its discretion charge a lower rate of interest. Section 2.05. Procedures. The Authority, or the Trustee on behalf of the Authority, shall; within two Business Days of any withdrawals from the Reserve Account, give written notice to the City of such withdrawals, which notice shall state the amount, if any, required to restos e the Reserve Account to the Reserve Requirement for the Bonds. By February 15 of the following year, the City shall deliver to the Trustee for deposit into tl. Reset ie Account the greater of one-half of the amount(s) specified (to the extent not previously replenished by the Authority from the sources identified in the Indenture) or the amount, together with other funds held by the Trustee under the Indenture for the purpose, required to pay debt service on the Bonds on the following March 1, and shall deliver to the Trustee no later than the following August 15 the greater of the balance of the amount(s) so specified (to the extent not previously replenished by the Authority from the sources identified in the Indenture) or the amount, together with other funds held by the Trustee under the Indenture for the purpose, required to pay debt service on the Bonds on the following September 1. The Authority also shall provide, with or prior to the submission to the City of the notice requesting funds, an accounting of its operation of the Project, including cash flow projections and a loan repayment plan. Such accounting shall review all funds or other resources of the Authority legally available to fund the Reserve Account The Authority shall be obligated to apply all legally available funds or other resources, and the Authority shall certify that all legally available funds or other resources have been previously applied, to meet the Reserve Requirement. Pursuant to the Indenture, the Trustee shall notify the City in writing of the amount(s), if any, required to be delivered to the Trustee by the City on each February 15 and August 15. Section 2.06 Nature of Authority's Obligation. The obligation of the Authority to make the loan payments 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 Authority's obligations under this Agreement shall continue in effect and shall survive the satisfaction of the Authority's obligations under the Bonds, the Indenture and the Deed of Trust until such time as principal and interest due to the City pursuant to any loan or loans made hereunder have been repaid, together with any costs owed to the City pursuant to Sections 2.08 and 4.05 Section 2.07. Nature of City's Obligation. The obligation of the City to advance funds to the Trustee on behalf of the Authority in the amounts, at the times and in the manner described herein shall be absolute and unconditional, and shall not be subject to diminution by setoff, 4 counterclaim, abatement or otherwise. The full faith, credit and resources of the City are pledged irrevocably for the payment to the Trustee, on behalf of the Authority, of the amounts described herein. The City agrees that it will include in its budget, for each fiscal year following the receipt by the City of notice under Section 2.05 that a deposit to the Reserve Account is required, an amount equal to the deficiency in the Reserve Account to be made up by the City pursuant to this Agreement. The obligations of the City hereunder shall terminate upon payment in full of the principal of and interest on all outstanding Bonds. Section 2.08. Payment of City's Costs Upon request by the City, the Authority shall reimburse the City for all out-of-pocket costs incurred by the City (including, but not limited to, attorneys fees and costs) in connection with the preparation, drafting, negotiation and administration oc this Agreement, the financing of the Project and any loans made by the City to the Authority hereunder. Such costs shall be payable at closing or thereafter at the City's option. ARTICLE III Rights of City Upon Making Loans Section 3.01 If the City has made any loan to the Authority under this Agreement (whether or not the loan is in default), the City may take any one or more of the following steps: (a) The City may require that the Trustee call the Bonds for redemption in accordance with Section 3 2(3) of the Indenture; (b) The City may, but shall not be required to, appoint a manager (which may be the City) or a receiver for the Project; and/or (c) The City may pursue any remedy provided to it under the Deed of Trust as if an event of default has occurred thereunder or hereunder; provided that if the Deed of Trust is foreclosed, the City shall first assume all liability for payment of the principal of and interest on the Bonds when due and shall have pledged its full faith and credit to such payment. Any manager or receiver appointed pursuant to paragraph (b) above shall have, in addition to all the rights and powers customarily given to and exercised by managers or receivers, the right and authority to enter upon and take and maintain full control of the Project in order to perform all acts necessary and appropriate for the operation and maintenance thereof in the same manner and to itut limitation the the same extent that the Authority could of leasesnthe colle tion of all rents of the Project, ion, the enforcement, cancellation and modification removal and eviction of tenants and other occupants, the making of alterations and repairs to the Project and the execution and termination of contracts providing for management or maintenance of the Project, all on such terms as are deemed best by the City to protect its interests under this 5 Agreement. The City or the manager or receiver appointed by the City shall be entitled to receive a reasonable fee for managing the Project. ARTICLE IV Remedies Upon Default Section 4.01. Remedies of City on Default Upon the occurrence of a default by the Authority in its obligations hereunder, or upon the occurrence of an event of default under the Indenture, the City may take one or more of the following steps: (a) If, and only if, the Bonds are no longer Outstanding, the City may declare the entire principal balance of any loans made to the Authority by the City hereunder (if not then due and payable) to be due and payable immediately, and upon any such declaration the principal of the loan shall become and be immediately due and payable, together with all interest accrued thereon to the date of such acceleration, anything in this Agreement to the contrary notwithstanding; (b) The City 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 City may deem most effectual to protect and enforce any of its rights or interests hereunder; and (c) The City may exercise any of its rights under this Agreement including, without limitation, all of its rights under Article III. Section 4.02. Remedies of Authority on Default Upon the occurrence of a default by the City in its obligations to make loans to the Authority hereunder, the Authority 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 Authority may deem most effectual to protect and enforce any of its rights or interests hereunder. Section 4.03 No Remedy Exclusive No remedy conferred upon or reserved to either party by this 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 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, that it may have under this Agreement or otherwise. Section 4.04. 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 4.05 Agreement to Pay Attorneys' Fees and Expenses. If a default arises under any of the provisions of this Agreement and either party hereto should employ attorneys or incur other expenses for the collection of amounts due under this Agreement or the enforcement of performance or observance of any obligation or agreement on the part of the other party contained in this 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. ARTICLE V Indemnification As between the City and the Authority, the Authority shall assume the risk of, be liable for, and pay all damage, loss, cost and expense of any party, including its employees, arising out of the performance of this Agreement, except that caused by negligence and/or misconduct solely of the City and its employees acting within the scope of their employment. The Authority shall hold harmless from and indemnify the City and its officers, elected officials, agents, and employees against, all claims, losses, suits, actions, costs, counsel fees, litigation costs, expenses, damages, judgments, or decrees by reason of damage to any property or business and/or any death, injury or disability to or of any person or party, including any employee, arising out of or suffered, directly or indirectly, by reason of or in connection with the performance of this Agreement or any act, error or omission of the Authority or the Authority's employees, agents, or subcontractors, whether by negligence or otherwise. The Authority's obligation shall include, but not be limited to, investigating, adjusting, and defending all claims against the City alleging loss from action, error or omission or breach of any common law, statutory or other delegated duty by the Authority or the Authority's employees, agents, or subcontractors. ARTICLE VI Compliance With Continuing Disclosure Requirements. To meet the conditions of paragraph (d)(2) of United States Securities and Exchange Commission Rule 15c2-12 (the "Rule"), as applicable to a participating underwriter for the Bonds, the City undertakes for the benefit of holders of the Bonds to provide to the Trustee, with instructions to deliver the same to each NRMSIR and the SID (as those terms are defined in Section 6.6 of the Indenture), annual financial statements for the City, which statements: , (a) Shall be prepared in accordance with applicable generally accepted accounting principles promulgated by the Government Accounting Standards Board ("GASB"), as such principles may be changed from time to time by GASB or its successor; 7 50017106.05 (b) Need not be audited, except, however, that if and when audited financial statements are otherwise prepared and available to the City they will be provided; (c) Shall be provided to the Trustee, not later than the last day of the ninth month after the end of each fiscal year of the City (currently, a fiscal year ending December 31), as such fiscal year may be changed as required or permitted by State law, commencing with the City's fiscal year ending December 31, 1998, and (d) May be provided in a single or multiple documents, and may be incorporated by reference to other documents that have been filed with each NRMSIR and the SID, or, if the document incorporated by reference is a "final official statement" with respect to other obligations of the City, that has been filed with the MSRB. The City's obligations under this undertaking shall terminate upon the legal defeasance of all of the Bonds. In addition, the City's obligations under this undertaking shall terminate if those provisions of the Rule which require the City 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 City and the Authority, and the Authority provides timely notice of such termination to each NRIvISIR or the MSRB and the SID. ARTICLE VII Miscellaneous Section 7.01. Governing Law; Venue. This Agreement is governed by and shall be construed in accordance with the substantive laws of the State of Washington and shall be liberally construed so as to carry out the purposes hereof. Except as otherwise required by applicable law, any action under this Agreement shall be brought in the Superior Court of the State of Washington in and for Yakima County and/or in the United States District Court for the Western District of Washington. Section 7.02. 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 mailed by first-class, certified or registered mail, postage prepaid and return receipt requested, as follows. To the City: 50017108MS City of Yakima 129 N. 2nd Street Yakima, Washington 98901 Attention. Director of Finance 8 To the Authority: Housing Authority of the City of Yakima 110 Fair Avenue Yakima, Washington 98901 Attention: Executive Director The City or the Authority may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates, requests or other communications shall be sent. Notices shall be deemed served upon deposit of such notices in the United States mail in the manner provided above. Section 7.03. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the City and the Authority and their successors. This Agreement may not be assigned, except that the Authority shall have the right to assign to the Trustee its right to obtain funds from the City hereunder for the benefit of the owners of the Bonds. Section 7.04. Severability In the event any provision of this 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 7.05. Amendments. This Agreement may not be effectively amended, changed, modified or altered, except by an instrument in writing duly executed by the City and the Authority (or their successors in title). If the Bonds are rated by a rating agency, then no such amendment shall be permitted unless the Authority, or the Trustee on behalf of the Authority, has received written confirmation from the rating agency that such amendment will not result in a reduction or withdrawal of the rating on the Bonds. If the Bonds are not rated by a rating agency, then no such amendment will be permitted unless in the opinion of the Trustee such amendment will not materially adversely affect the owners of the Bonds. This Agreement may not be terminated until the Bonds have been paid in full or defeased, unless the City has assumed all liability for payment of the principal of and interest on the Bonds when due and shall have pledged its full faith and credit to such payment. Section 7.06. Waiver of Breach. No waiver of any breach of any covenant or agreement contained herein shall operate as a waiver of any subsequent breach of the same covenant or agreement or as a waiver of any breach of any other covenant or agreement, and in case of a breach by either party of any covenant, agreement or undertaking, the nondefaulting party may nevertheless accept from the other any payment or payments or performance hereunder without in any way waiving its right to exercise any of its rights and remedies provided for herein or otherwise with respect to any such default or defaults that were in existence at the time such payment or payments or performance was accepted by it. Section 7.07. No Rights Created in Third Parties. The terms of this Agreement are not intended to establish nor to create any rights in any persons or entities other than the City, the Authority and the respective successors and assigns of each. 9 50017108.05 Section 7.08. Time of Essence. Time and all terms and conditions shall be of the essence of this Agreement. Section 7.09. Termination of Agreement. Except as provided in Section 7.10, this Agreement shall terminate upon payment in full of all principal of and interest on the Bonds (or defeasance thereof pursuant to Article IX of the Indenture). Section 7.10. Refunding Bonds. Excepted as provided in Section 7.11, if the Authority issues Refunding Bonds at any time, all references in this Agreement to "Bonds" shall be deemed to be references to "Refunding Bonds" for all purposes. Section 7.11. Refinance. At any time, the City may request that the Authority refinance the Bonds if the City reasonably determines that in order to provide funds with which to pay and redeem the Bonds, the Authority is (i) able to issue and sell refinancing bonds or to obtain other refinancing, in either case without the guarantee of the City as provided herein; and (ii) financially able to pay the debt service on such refinancing bonds or other refinancing. If the City makes such a request, the Authority shall use its best efforts to obtain a contract lot the purchase of such bonds or obtain other refinancing, in either case without the guarantee of the City, bearing an effective net interest rate that is not more than the effective net interest rate on the Bonds. If the Authority is able to obtain such a bond purchase contract, the Authority shall issue and sell such refinancing bonds, and shall pay and redeem or defease the Bonds, whereupon the City's obligation under this Agreement shall terminate. Section 7.12 Accounting. The Authority shall establish accounting procedures and systems and maintain its accounting books and records in a manner satisfactory to the Auditor of the State of Washington and shall allow the City Finance Director access thereto for audit purposes. Promptly upon the City's request for information (whether oral or written), the Authority shall provide the City with all financial information readily available to the Authority concerning the Project and all funds and accounts established pursuant to this Agreement. The Authority shall provide to the City monthly progress reports during construction through rent -up, in a form approved by the City, and thereafter shall provide quarterly and annual financial statements in the form normally prepared by the Authority and copies of all information provided to the Trustee or any NRMSIR pursuant to Article VI of the Indenture. The City shall have the right to have access to and to inspect the premises (upon reasonable notice) and to examine and make copies of the books, files and records of the Authority at any time during business hours. The designation of the Project construction manager shall be subject to the approval of the City. Section 7.13. Sale of Project. No property constituting a part of the Project may be sold or otherwise encumbered or disposed of by the Authority unless (i) the proceeds thereof (in an amount approved by the City), are deposited in the Bond Fund; and (ii) the Authority receives the express written permission of the City. Notwithstanding the previous sentence, the Authority may sell or otherwise dispose of any of the properties of the Project, other than any real property, - 10- 50U171O8.05 which shall have become unserviceable, inadequate, obsolete or unfit to be used in the operation of the Project or no longer necessary, material to or useful in such operation. The proceeds of any such sale or disposition shall be deposited in the property reserve account maintained by the Authority except that any such proceeds shall be transferred to the Reserve Account to the extent that such transfer shall be necessary to make up any deficiency in the Reserve Account. Section 7.14. Deed of Trust. Upon the issuance of the Bonds, the Authority shall execute a Deed of Trust in favor of the City in substantial conformance with Exhibit B hereto, and shall immediately deliver the Deed of Trust to the City. The City acknowledges that the Deed of Trust will be subordinate to the deed of trust given by the Authority to the Trustee to secure payment of the Bonds. Section 7.15. Insurance. Subject to review and approval by the City, the Authority shall procure and maintain at all times a policy of public liability insurance naming the City as an insured, protecting and holding the City harmless from any and all damages which may arise or are alleged to arise in connection with the Project or the services to be provided hereunder, whether or not such damages are alleged to arise or result from acts or omissions which are the sole negligence of the City, or its officers, agents and/or employees or the combined negligence of the City and others, in at least the principal amount of a combined single limit of $2,000,000 each occurrence, personal injury and/or property damage. The Authority will insure the Project against loss or theft in the amount of replacement costs of the Project, and shall include the City as an insured thereunder. The Authority will procure and maintain a policy of business interruption insurance providing for maintenance of income from the Project in the event of loss or damage to it. The City shall be entitled to review and must approve such insurance policies. The terms of any insurance policies required under this section shall provide that the insurer shall notify the City at least 30 days before any reduction or cancellation of insurance. No such insurance shall be reduced or canceled without the City's prior written agreement. Unless the City authorizes a different application of insurance process, such proceeds shall be applied to restore, repair or replace damaged property or to pay and redeem outstanding Bonds. _ Section 7.16. City Approval. All decisions of the City hereunder shall be deemed to be made by action of the City Manager. Section 7.17. Make Only Economically Sound Improvements. The Authority will not expend any of the Project Revenues or the proceeds of Bonds or other obligations for any extensions, betterments or improvements to the Project, or any other purposes, which will not properly and advantageously contribute to the conduct of the business of the Project without the City's written consent. Within five years from the date of this Agreement, upon request by the Authority the City agrees to review the financial status of the Project and determine if part or all of that portion of the Net Revenues which exceeds such coverage requirement may be expended for Authority purposes other than the Project without materially diminishing the security of the City Such a determination will not be unreasonably withheld. Section 7.18. Rate Covenant—Debt Service Coverage. The Authority shall establish, maintain and collect rates or charges in connection with the ownership and operation of the Project sufficient to provide Net Revenues in any Fiscal Year hereafter in an amount that is at - 11 - 50017108.05 least equal to the coverage requirement provided by the Indenture, but not less than 1.15 times the Required Debt Service for such Fiscal Year. 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 City and the Authority have caused this Agreement to be executed in their respective names by their duly authorized officers, and have caused this Agreement to be dated as of the date set forth on the first page hereof. ATTEST: AT IEST: " Executive Director - 12- 50017108.05 CITY OF YAKIMA, WASHINGTON By HOUSING AUTHORITY OF THE CITY OF YAKIMA, WA II GTON By Chair, Board of ommissioners BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No.: For Meeting of: May 19. 1998 ITEM TITLE: Nueva Primavera Housing Project SUBMITTED BY: Glenn Rice, Acting Director of Community and Economic Development (575-6040) CONTACT PERSON/PHONE: William Cook, Neighborhood Development Services Manager (575-6101) SUMMARY EXPLANATION: Originally scheduled for the Council meeting on April 21, 1998, the attached packet has been expanded and updated to include the draft documents prepared for the Nueva Primavera Project closing. Please note, that these documents are "drafts" subject to additional information that will only be available immediately prior to closing, (i.e. dates, interests rates, etc.) and inconsistencies between documents that will be adjusted to conform to the Contingent Loan Agreement. With your approval of this resolution, the City Manager will withhold execution of the Contingent Loan Agreement until all documents are complete and consistent. The Yakima Housing Authority has requested the City's support for their new mixed income, mixed use residential and office complex to be built on North 6th Avenue at Fruitvale Boulevard. The City's participation would be in the form of a Contingent Loan Agreement with the Housing Authority guaranteeing to loan funds to the Authority to maintain sufficient debt service reserve requirements. The Housing Authority has made this request of the City to: • Lower the interest rate of the bonds to be sold by the Housing Authority to fund, in part, the cost of this project thereby making the project economically feasible. Note: The Housing Authority is new to the Bond markets and unlike the City, unable to place a rated Bond Issue and, • Assist the housing authority to establish a "track record" with this project which should allow them to access private capital markets in the future without City guarantees. City staff. with assistance from our Bond Council, the law firm of Preston, Gates and Ellis, have worked to structure the Contingent Loan Agreement to be as protective of the City's interests as possible. Our number one goal has been to minimize the chances that the City's "full faith and credit" will be called upon and to ensure that the project is a success. As in any real estate transaction, however, there remains a risk to the City (see the attached Risk/Remedy analysis). However, we feel the commitments established herein are reasonable and secure to protect the City's interests/liability and will still enable the project to proceed. Any further limitations or requirements by the City (such as a higher debt service coverage requirement) would effectively negate the fiscal viability of the project. Other than copies in the Council members' packet, copies of the Deed of Trust and Trust Bond Indenture, are available in the City Clerk's office for review. Resolution X Ordinance Contract Other Specify Funding Source: Co nitv Development Block Grant Funds APPROVAL FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: Accept proposal and authorize City Manager to ensure all necessary documentation has been completed prior to executing Contingent Loan Agreement. BOARD/COMMISSION RECOMMENDATION: The Council Economic Development Committee reviewed the proposal on April 10, 1998 and concurred with staff recommendation. COUNCIL ACTION. TD -18 Nueva Primavera Agenda 5/19/98 CERTIFICATE OF COVERAGE EDATE Iss 01/15/99 PRODUCER HOUSING AUTHORI11hS RISK RETENTION 2500 MAIN STREET, SUITE 120 VANCOUVER, WASHINGTON 98660 (360) 694-3500 (360) 694-3600 POOL THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER THIS CERITHICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW COMPANIES AFFORDING COVERAGE COMPANY LE ITER A Housing Authorities Risk Retention Pool (HARRP) COMPANY LETTER B COVERED ENTITY YAKIMA HOUSING AUTHORITY P.O. BOX 2910 YAKIMA, WASHINGTON 98907-2910 COMPANY LEI IDR C COMPANY LETIER D COMPANY LE! 1I R E COVERAGES THIS IS TO CERTIFY THAT THE POLICIES LISTED BELOW HAVE BEEN ISSUED TO THE COVERED ENTITY NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM ORCONDMON OF ANY CONTRACT OROTHER DOCUMENTS WITH RESPECTTO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. co LIR TYPE OF COVERAGE POLICY NUMBER POLICY EPNECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) ALL LIMITS A GENERAL LIABILITY COMMERCIAL GENERAL LIABILITY 060-PLEAF 02/01/99 02/01/00 GENERAL AGGREGATE $3,000,000 X EACH OCCURRENCE $3,000,000 CLAIMS MADE X OCCUR. FIRE DAMAGE (ANY ONE FIRE) $3,000,000 OWNERS & CONTRACTOR'S PROT. MEDICAL EXP. (ANY ONE PERSON) EXCLUDED AUTOMOBILE LIABILITY ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS HIRED AUTOS NON -OWNED AUTOS GARAGE LIABILITY COMBINED SINGLE LIMIT $ 2,000,000 BODILY INJURY (PER PERSON) $ BODILY INJURY (PER ACCIDENT) $ PROPERTY DAMAGE $ A OTHER BLANKET ALL PROPERTY 060-PLEAF 02/01/99 02/01/00 $3,000,000 Blanket Loss Limit / Per Occurrence / All Risk / Replacement Cost / $1,000 Deductible (Subject to Policy Terms & Conditions) DESCRIPTION OF AS RESPECTS: OPERATIONS / LOCATIONS / VEHICLES / RESTRICTIONS NUEVA PRIMAVERA, / SPECIAL ITEMS 810 NORTH 6TH AVENUE, YAKIMA, WA Per the interest of the CERTIFICATE HOLDER / PARTY / LOSS PAYEE As shown below: ADDITIONAL COVERED CEREIFICATE HOLDER CANCELLATION YAKIMA CITY HALL DICKZAIS,YakimaCity Manager $ 129 N. 2ND STREET YAKIMA, WA 98901 Phone: (509) 575-6113 .SHOULD ANY OFTHEABOVE DESCRIBED COVERAGE BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TOTHE LEFT, BUT FAILUREID MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REPRESENTATIVE = JULIUS C. SCOGGINS EXECUTIVE DIRECTOR Z:\TINA\ENDRSMNT\ 1999-200\YAKI-005.W PD ENDORSEMENT COVERED ENTITY: YAKIMA HOUSING AUTHORITY P.O. BOX 2910 YAKIMA, WASHINGTON 98907-2910 MEMBER NO.: 060-PLEAF COVERAGE PERIOD: 02/01/99 - 02/01/00 LOCATION: AS RESPECTS: NUEVA PRIMAVERA 810 NORTH 6TH AVENUE YAKIMA, WASHINGTON CONTRACT NO.: 5-94-491-25B LIABILITY/E&O: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS ADDITIONAL COVERED PARTY(IES) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER LOSS PAYEE / F&C: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS LOSS PAYEE(S) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED 01/16/99 Date Housing Authorities Risk Retention Pool Julius C. Scoggins, Executive Director Z:\TINA\ENDRSMNT\1999-200\YAKIM A.005 CERTIFICATE OF COVERAGE LIME DATE (MM/DDPLY) 01/15/99 PRODUCER HOUSING AUTHORITIES RISK RETENTION POOL 2500 MAIN STREET, SUITE 120 VANCOUVER, WASHINGTON 98660 (360) 694-3500 (360) 694-3600 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CER 1'1NICATE HOLDER THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW COMPANIES AFFORDING COVERAGE COMPANY LE I I1LR A Housing Authorities Risk Retention Pool (HARRP) COMPANY ;) LETTER B COVERED ENTITY YAKIMA HOUSING AUTHORITY P.O. BOX 2910 YAKIMA, WASHINGTON 98907-2910 COMPANY LEI1'hR C ?9-r COMPANY LEIl'hR Da3..r„-., , , . „f_ , f i$•S's s COMPANY LE111 R E COVERAGES THIS IS TO CERTIFY THAT THE POLICIES LISTED BELOW HAVE BEEN ISSUED TO THE COVERED ENTITY NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENTS yam RESPECTTO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. co LTA TYPE OF COVERAGE POLICY NUMBER POLICY ENI,'L+CTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) ALL LIMITS A GENERAL LIABILITY COMMERCIAL GENERAL LIABILITY 060-PLEAF 02/01/99 02/01/00 GENERAL AGGREGATE $3,000,000 X EACH OCCURRENCE $3,000,000 CLAIMS MADE X OCCUR. FIRE DAMAGE (ANY ONE FIRE) $3,000,000 OWNERS & CONTRACTOR'S PROT. MEDICAL EXP. (ANY ONE PERSON) EXCLUDED AUTOMOBILE LIABILITY ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS HIRED AUTOS NON -OWNED AUTOS GARAGE LIABILITY COMBINED SINGLE LIMIT $ 2,000,000 BODILY INJURY (PERPERSON) $ BODILY INJURY (PER ACCIDENT) $ PROPERTY DAMAGE $ A OTHER BLANKET ALL PROPERTY 060-PLEAF 02/01/99 02/01/00 $3,000,000 Blanket Loss Limit / Per Occurrence / All Risk / Replacement Cost / $1,000 Deductible (Subject to Policy Terms & Conditions) DESCRIPTION OF AS RESPECTS: OPERATIONS / LOCATIONS / VEHICLES / RESTRICTIONS NUEVA PRIMAVERA, 1 SPECIAL ITEMS 810 NORTH 6TH AVENUE, YAKIMA, WA Per the interest of the CERTIFICATE HOLDER / PARTY / LOSS PAYEE As shown below: ADDITIONAL COVERED CERTIN'ICATE HOLDER CANCELLATION YAKIMA CITY HALL DICK ZAIS, Yakima City Manager 129 N. 2ND STREET YAKIMA, WA 98901 Phone: (509) 575-6113 .SHOULD ANY OFTHE ABOVE DESCRIBED COVERAGE BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT IICE SHALL MPOSE NO OBLIGATION OR LIABILITY OF ANY NTATIVES KIND UPON THE COMPANY, ITS AGENTS OR REPRETO MAIL SUCH SENTATIVES. AUTHORIZED REPRESENTATIVE JULIUS C. SCOGGINS = A EXECUTIVE DIRECTOR Z:\TINA\ENDRSMNT\1999-200\YAKI-005.W PD ENDORSEMENT COVERED ENTITY: YAKIMA HOUSING AUTHORITY P.O. BOX 2910 YAKIMA, WASHINGTON 98907-2910 MEMBER NO.: 060-PLEAF COVERAGE PERIOD: 02/01/99 - 02/01/00 LOCATION: AS RESPECTS: NUEVA PRIMAVERA 810 NORTH 6TH AVENUE YAKIMA, WASHINGTON CONTRACT NO.: 5-94-491-25B LIABILITY/E&O: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS ADDITIONAL COVERED PARTY(IES) AS RESPECTS THEIR INTEREST IN THE PROPERTY(1l- S) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER LOSS PAYEE / F&C: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS LOSS PAYEE(S) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED 01/16/99 Date Housing Authorities Risk Retention Pool Julius C. Scoggins, Executive Director Z:\TINA\ENDRSMNC11999-200\YAKIMA.005 CERTIFICATE OF COVERAGE ISS°01/16 DYY) PRODUCER HOUSING AUTHORITIES RISK RETENTION POOL 2500 MAIN STREET, SUITE 120 VANCOUVER, WASHINGTON 98660 (360) 694-3500 (360) 694-3600 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW COMPANIES AFFORDING COVERAGE COMPANY LETTER A Housing Authorities Risk Retention Pool (HARRP) COMPANY LETTER B COVERED ENTITY YAKIMA HOUSING AUTHORITY 810 N. 6TH AVENUE YAKIMA, WASHINGTON 98902 COMPANY LETTER C COMPANY LETTER D COMPANY LETTER E COVERAGES THIS IS TO CERTIFY THAT THE POLICIES LISTED BELOW HAVE BEEN ISSUED TO TIM COVERED ENTITY NAMED ABOVE FOR TIM POLICY PERIOD INDICATED NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENTS WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. co LTR TYPE OF COVERAGE POLICY NUMBER POLICY EFFECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) ALL LIMITS A GENERAL LIABILITY COMMERCIAL GENERAL LIABILITY 060-PLEAF 02/01/02 01/31/03 GENERAL AGGREGATE $3,000,000 X EACH OCCURRENCE $3,000,000 CLAIMS MADE X OCCUR. FIRE DAMAGE (ANY ONE FIRE) $3,000,000 OWNER'S & CONTRACTOR'S PROT MEDICAL EXP. (ANY ONE PERSON) EXCLUDED AUTOMOBILE LIABILITY ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS HIRED AUTOS NON -OWNED AUTOS GARAGE LIABILITY COMBINED SINGLE LIMIT $ 2,000,000 BODILY INJURY (PER PERSON) $ BODILY INJURY (PER ACCIDENT) $ PROPERTY DAMAGE $ A OTHER BLANKET ALL PROPERTY 060-PLEAF 02/01/02 01/31/03 $3,000,000 Blanket Loss Limit / Per Occurrence / All Risk / Replacement Cost / $1,000 Deductible (Subject to Policy Terms & Conditions) DESCRIPTION OF AS RESPECTS: OPERATIONS / LOCATIONS / VEHICLES / RESTRICTIONS NUEVA PRIMAVERA, / SPECIAL ITEMS 810 NORTH 6TH AVENUE, YAKIMA, WA Per the interest of the CERTIFICATE HOLDER / PARTY / LOSS PAYEE As shown below: ADDITIONAL COVERED CERTIFICATE HOLDER CANCELLATION YAKIMA CITY HALL DICK ZAIS, Yakima City Manager 129 N. 2ND STREET YAKIMA, WA 98901 Phone: (509) 575-6113 .SHOULD ANY OF THE ABOVEDESCRIBED COVERAGEBE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, TI -IE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REPREESENTATP Pj r ) - /.....7/6',// -- vrrc , (' JULIUS C. SCOGGINS EXECUTIVE DIRECTOR Z:\Endorsements\2002-03)Yakima\YAKI-005 WPD ENDORSEMENT COVERED ENTITY: YAKIMA HOUSING AUTHORITY 810 N. 6TH AVENUE YAKIMA, WASHINGTON 98902 MEMBER NO.: 060-PLEAF COVERAGE PERIOD: 02/01/02 - 01/31/03 LOCATION: AS RESPECTS: NUEVA PRIMAVERA 810 NORTH 6TH AVENUE YAKIMA, WASHINGTON CONTRACT NO.: 5-94-491-25B LIABILITY/E&O: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS ADDITIONAL COVERED PARTY(IES) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER LOSS PAYEE / F&C: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS LOSS PAYEE(S) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED 01/16/02 Date Housing Authorities Risk Retention Pool Julius C. Scoggins, Executive Director Z:\Endorsements\2002-03\Yakima\Yak ima.00S. wpd CERTIFICATE OF COVERAGE ISSUE DATE (MM/DD/YY) 02/01/03 PRODUCER HOUSING AUTHORITIES RISK RETENTION POOL 2500 MAIN STREET, SUITE 120 VANCOUVER, WASHINGTON 98660 (360) 694-3500 (360) 694-3600 FAX THIS CERTIFICATE IS ISSUED AS A MA11ER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. COMPANIES AFFORDING COVERAGE COMPANY LEr1ER A HARRP COVERED ENTITY YAKIMA HOUSING AUTHORITY 810 N. 6TH AVENUE YAKIMA, WASHINGTON 98902 COMPANY LEI IER B COVERAGES THIS IS TO CERTIFY THAT THE POLICIES LISTED BELOW HAVE BEEN ISSUED TO THE COVERED ENTITY NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENTS WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO LTR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) ALL LIMITS A GENERAL LIABILITY X COMMERCIAL GENERAL LIABILITY 060-PLEAF 02/01/03 01/31/04 GENERAL AGGREGATE $ 3,000,000 EACH OCCURRENCE $ 3,000,000 CLAIMS MADE X OCCURRENCE FIRE DAMAGE (ANY ONE FIRE) $ 3,000,000 OWNERS'S & CONRACTOR'S PROT. MEDICAL EXPENSES EXCLUDED AUTOMOBILE LIABILITY ALL OWNED AUTOS COMBINED SINGLE LIMIT $ SCHEDULED AUTOS BODILY INJURY (PER PERSON) $ HIRED AUTOS BODILY INJURY (PER ACCIDENT) $ NON -OWNED AUTOS PROPERTY DAMAGE $ A OTHER BLANKET LOSS LIMIT 060-PLEAF 02/01/03 01/31/04 $3,000,000 Blanket Loss Limit Per Occurrence / All Risk / Replacement Cost / $1,000 Deductible (Subject to Policy Terms & Conditions) DESCRIPTION AS RESPECTS: OF OPERATIONS/LOCATIONS/VEHICLES/RESTRICTIONS/SPECIAL NUEVA PRIMAVERA, 810 NORTH ITEMS 6ll AVENUE, YAKIMA, WASHINGTON Per the interest of the CERTIFICATE PARTY/ LOSS PAYEE As shown below: HOLDER / ADDITIONAL COVERED CERTIFICATE HOLDER CANCELLATION YAKIMA CITY HALL DICK ZAIS, YAKIMA CITY MANAGER 129 N. 2ND STREET YAKIMA, WA 98901 PHONE: 509 575 6113 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OF LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REPRESENTATIVE JULIUS C. SCOGGINS EXECUTIVE DIRECTOR Z:\Endorsements\2003-04\YAKIMA\YAKIMA -005.doc ENDORSEMENT COVERED ENTITY: YAKIMA HOUSING AUTHORITY 810 N. 6114 AVENUE YAKIMA, WASHINGTON 98902 MEMBER NO.: 060-PLEAF COVERAGE PERIOD: 02/01/03 - 01/31/04 LOCATION: AS RESPECTS: NUEVA PRIMAVERA 810 NORTH 6TH AVENUE YAKIMA, WASHINGTON CONTRACT NO.: 5-94-491-25B LIABILITY/E&O: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS ADDITIONAL COVERED PARTY(IES) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER LOSS PAYEE / F&C: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS LOSS PAYEE(S) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED 02/01/03 Date Housing Authorities Risk Retention Pool Julius C. Scoggins, Executive Director Z: \Endorsements\2003-04\YAKIMA \Yakima.005.do CERTIFICATE OF COVERAGE ISSUE, DATE (MM/DD/YY) osiioro6 PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER THIS CERTIFICATE= DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THF HOUSING AUTHORITIES RISK RETENTION POOL POLICIES BELOW 2500 MAIN STREET, SUITE 120 VANCOUVER, WASHINGTON 98660 COMPANIES AFFORDING COVERAGE (360) 694-3500 (360) 694-3600 FAX COMPANY HARRP COVERED ENTITY Housing Authorities Ristc Retetttitin% Poaa"` "" ` ` YAKIMA HOUSING AUTHORITY LETTER A 810 N. ell AVENUE YAKIMA, WA 98902COMPANv i'�1r , t " / 0t ;, LETTER B CONTACT DICK ALLEN, EXECUTIVE DIRECTOR 1 �. 8 i L a.. t. d' , i 1 Y Y i .'i Li f'a (u.5.e a COVERAGES t -..-_ -. _". - _— THIS IS TO CERTIFY THAT THE POLICIES LISTED BELOW HAVE BEEN ISSUED TO THE COVERED ENTITY NAMED ABOVE FOR THE POLICY PERIOD INDICATED NOTWITI (STANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENTS WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL TI -IE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES LIITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS CO TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION ALL LIMITS LTR DATE (MM/DD/YY) DATE (MM/DD/YY) A GENERAL LIABILITY GENERAL AGGREGATE 52,000,000 X COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE 5 2,000,000 CLAIMS MADE X OCCURRENCE 060-PLEAF 02/01/06 01/31/07 FIRE DAMAGE (any one tire) 52,000,000 OWNERS'S & CONRACTOR'S PROT 'IEDICAL L\PENSES EXCLUDED AUTOMOBILE LIABILITY ALL OWNED AUTOS SCHEDULED AUTOS HIRED AUTOS NON -OWNED AUTOS A Declared Value Loss Limit Per PROPERTY 060-PLEAF 02/01/06 01/31/07 Occurrence / Replacement Cost / SPECIAL CAUSES OF LOSS $1,000 Deductible Structure: $4,309,836 DESCRIPTION OF OPERATIONS/LOCATIONS/VEI-IICLES/RESTRICTIONS/SPECIAL ITEMS AS RESPECTS: NUEVA PRIMAVERA, 810 NORTH 6TH AVENUE, YAKIMA, WASHINGTON, Per the interest of the CERTIFICATE HOLDER / ADDITIONAL COVERED PARTY / LOSS PAYEE As shown below: CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION OAT(- THEREOF THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER CITY HALL NAYAKIMA :PRESENTA INOTICE ES IDOSE NO Ok3LiGA TION OI LIABII Tl UT ANYED KIND UPONTHE LEFT BUT THE COMPANY, FAILURE S O AGENTS ORMAIL REPRESENTATIVES ATTN DICK ZAIS, CITY MANAGER AUTHORIZED REPRESENTATIVE 129 N. 2" STREET - YAKIMA, WA 98901 PH: 509-575-6113 " ' WILLIAM E. GREGORY, EXECUTIVE DIRECTOR I.\Certiticates & Endorsements\2006-07\Yakima\Yak-OOS doc ENDORSEMENT COVERED ENTITY: YAKIMA HOUSING AUTHORITY 810 N. 6TH AVENUE T7 A T7 TT iT A NT 7' A c,TTTTTrm/rTT nonnn 1 ti1,11V11-i., VV L-101711NlJ 1 V1N 707UL MEMBER NO.: 060-PLEAF COVERAGE PERIOD: 02/01/06 - 01/31/07 LOCATION: AS RESPECTS: NUEVA PRIMAVERA 810 NORTH 6111 iTii i AVENUE YAKIMA, WASHINGTON L IAPILITY/E&O: i� i IS HEREBY AGREED THAT THE FOLLOWING IS FN�CLUDED L 1 A / 11 IS V AS ADDITIONAL COVERED PARTY(IES) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: PROPERTY/F&C: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS LOSS PAYEE(S) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 NORTH 2ND STREET YAKIMA, WASHINGTON 98901 ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED 05/10/06 DATE WILLIAM E. GREGORY, EXECUTIVE DIRECTOR HOUSING AUTHORITIES RISK RETENTION POOL 1 \Certificates & Endorsements\2006-07\Yakima\Yak-005.doc CERTIFICATE OF COVERAGE FISSA DATE(MM/DD/YY) 0/10/06 PRODUCER HOUSING AUTHORITIES RISK RETENTION POOL 2500 MAIN STREET, SUITE 120 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER "PHIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDLD BY THE POLICIES BELOW VANCOUVER, WASHINGTON 98660 (360) 694-3500 (360) 694-3600 FAX COMPANIES AFFORDING COVERAGE COMPANY HARRP COVERED ENTITY YAKIMA HOUSING AUTHORITY 810 N. 6TH AVENUE Housing Authoriti LETTER A sRis`IC``'"' j��e itio"n �ii�f IN,., I' 1,.3 ....Ao.,. r CITY OF YAKIMA YAKIMA, WA 98902 CONTACT DICK ALLEN, EXECUTIVE DIRECTOR COMPANY LETTER B M,A\= 2006 OFFICE OF CITY MANIAGFR COVERAGES THIS IS TO CERTIFY THAT THE POLICIES LISTED BELOW HAVE BEEN ISSUED TO THE COVERED ENTITY NAMED ABOVE FOR THE POLICY PERIOD INDICATED NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENTS WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES LIITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS CO LTR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) ALL LIMITS A GENERAL LIABILITY GENERAL AGGREGATE 52,000,000 X COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE 5 2,000,000 CLAIMS MADE X OCCURRENCE 060-PLEAF 02/01/06 01/31/07 FIRE DAMAGE (any one tire) 52,000,000 OWNERS'S & CONRACTOR'S PROT MEDICAL EXPENSES EXCLI DED AUTOMOBILE LIABILITY ALL OWNED AUTOS SCHEDULED AUTOS HIRED AUTOS NON-OWNED AUTOS A PROPERTY SPECIAL CAUSES OF LOSS 060-PLEAF 02/01/06 01/31/07 Declared Value Loss Limit Per Occurrence / Replacement Cost / $1,000 Deductible Structure: $4,309,836 DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/RESTRICTIONS/SPECIAL ITEMS AS RESPECTS: NUEVA PRIMAVERA, 810 NORTH 6TH AVENUE, YAKIMA, WASHINGTON, Per the interest of the CERTIFICATE HOLDER / ADDITIONAL COVERED PARTY / LOSS PAYEE As shown below: CERTIFICATE HOLDER CANCELLATION CITY HALL ATTN DICK ZAIS, CITY MANAGER SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF THE ISSLING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO OlE CER f1Fl( ATE HOLDER ANY UID UPONTO TILE LEFT BUT FAILURE T HE COMPANY, ITS AGENTS TOK REPRESENTATIVES MAIL SUCH NOTICE SIIALL IMPOSE NO OBLIGA fION' Of LIABILi ll 01 NAYAKIMA 129 N. 2ND STREET YAKIMA, WA 98901 PH: 509-575-6113 AUTHORIZED REPRESENTATIVE ,/I�" WILLIAM E GREGORY, EXECUTIVI, DIREC FOR ( \Certiticates & Endorsements\2006-07\Yakima\Yak-005 dOL ENDORSEMENT COVERED ENTITY: YAKIMA HOUSING AUTHORITY 810 N. 6TH AVENUE YAKIMA, WASHINGTON 98902 MEMBER NO.: 060-PLEAF COVERAGE PERIOD: 02/01/06 - 01/31/07 LOCATION: AS RESPECTS: NUEVA PRIMAVERA R1(1 NfRTN ATH A VFNITF YAKIMA, WASHINGTON LIABILITY/FAO: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS ADDITIONAL COVERED PARTY(IES) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: PROPERTY/F&C: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS LOSS PAYEE(S) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 NORTH 2ND STREET YAKIMA, WASHINGTON 98901 ALL O1IJETC 'TERMS AND CONDITIONS REMAIN UNCHANGED 05/10/06 DATE WILLIAM E. GREGORY, EXECUTIVE DIRECTOR HOUSING AUTHORITIES RISK RETENTION POOL 1 \Certificates « Endorsennents\2006-07\Yakima\ {an -005 doc CERTIFICATE OF COVERAGE ISSUE DATE (MM/DD/YY) 12/OU09 PRODUCER HOUSING AUTHORITIES RISK RETENTION POOL 7111 NE 179TH STREET VANCOUVER, WASHINGTON 98686 (360) 574-9035 (360) 574-9401 FAX THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. COMPANIES AFFORDING COVERAGE COMPANY HARRP Housing Authorities Risk Retention Pool LETTER A COVERED ENTITY YAKIMA HOUSING AUTHORITY 810 N. 6TH AVENUE YAKIMA, WA 98902 COMPANY LETTER B COVERAGES THIS IS TO CERTIFY THAT THE POLICIES LISTED BELOW HAVE BEEN ISSUED TO THE COVERED ENTITY NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENTS WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO LTR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) ALL LIMITS A GENERAL LIABILITY X COMMERCIAL GENERAL LIABILITY 060-PLEAF 01/01/10 01/01/11 GENERAL AGGREGATE $2,000,000 EACH OCCURRENCE $ 2,000,000 CLAIMS MADE X OCCURRENCE FIRE DAMAGE (any one fire) $2,000,000 OWNERS'S & CONRACTOR'S PROT MEDICAL EXPENSES EXCLUDED AUTOMOBILE LIABILITY ALL OWNED AUTOS _ SCHEDULED AUTOS HIRED AUTOS NON -OWNED AUTOS A PROPERTY SPECIAL CAUSES OF LOSS 060-PLEAF 01/01/10 01/01/11 Declared Value Loss Limit Per Occurrence / Replacement Cost / $1,000 Deductible Structures: $6,281,188 DESCRIPTION AS RESPECTS: OF OPERATIONS/LOCATIONSNEHICLES/RESTRICTIONS/SPECIAL NUEVA PRIMAVERA, 810 ITEMS NORTH 6TH AVENUE, YAKIMA, WASHINGTON, Per the interest of the / ADDITIONAL COVERED PARTY / LOSS PAYEE As shown below: CERTIFICATE HOLDER CERTIFICATE HOLDER CANCELLATION YAKIMA CITY HALL ATTN: DICK ZAIS, CITY MANAGER 129 N. 2" STREET YAKIMA, WA 98901 PH: 509-575-6113 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NL SUCH NOTICE SHALL IMP ANY HIND UPON THE COMPANY, ITS AGEMED TO THE LEFT, BUT FAILURE TO NTS OR REPRESENTATIVESOSE NO OBLIGATION OF LIABILITY OF AUTHORIZED REPRESENTATIVE �r l` 40( WILLIAM E. GREGORY, EXECUTIVE DIRECTOR Z:\Certificates & Endorsements\2010-2011\Yakima\Yak-005.doc ENDORSEMENT COVERED ENTITY: YAKIMA HOUSING AUTHORITY 810 N. 6TH AVENUE NT A TTTT A" A XI/ A QTJ7TT(TlTT flOflr ') 1 t1L111V1A, VY i-1.01111V\J 1 s._./1N JOJVL MEMBER NO.: 060-PLEAF COVERAGE PERIOD: 01/01/10 - 01/01/11 LOCATION: AS RESPECTS: NUEVA PRIMAVERA _Tu 6TH 810 NORTH H AVENUE YAKIMA, WASHINGTON i .AAFBILI Y E&O: IT Is HEREBY A yRE.N.I) THAT THE. FnLi..OWI G IS I IV C .I ,I lDlED AS ADDITIONAL COVERED PARTY(IES) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: PROPERTY/F&C: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS LOSS PAYEE(S) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 NORTH 2ND STREET YAKIMA, WASHINGTON 98901 ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED 12/01/09 DATE WILLIAM E. GREGORY, EXECUTIVE DIRECTOR HOUSING AUTHORITIES RISK RETENTION POOL Z:\Certificates & Endorsements\2010-2011\Yakima\Yak-005.doc AFFIDAVIT OF LOST DEED OF TRUST STATE OF WASHINGTON ) ) ss. COUNTY OF YAKIMA ) The undersigned, being first duly sworn, deposes and says: The Contingent Loan Agreement between the Housing Authority of the City of Yakima (the "Authority") and the City of Yakima (the "City") is secured by that certain Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing made as of September 1, 1998, in which the Authority is grantor, the City is the beneficiary and Valley Title Guarantee is the original trustee, which was filed for record on October 7, 1998, under Auditor's File Nos. 7080812, 7080813, 7080814, and 7080815, records of Yakima County, Washington (the "Deed of Trust"). Pacific Alliance Title LLC (the "Trustee") replaced Valley Title Guarantee as Trustee under the Deed of Trust pursuant to an Appointment of Successor Trustee dated May 15, 2014. The original Deed of Trust has been lost, misplaced or destroyed. I hereby request that the Trustee accept this affidavit and reconvey the Deed of Trust in accordance with the City's Request for Full Reconveyance dated May 15, 2014. In the event the original Deed of Trust is found, the City will immediately surrender it to the Trustee. In consideration of the issuance by Pacific Alliance Title LLC of its reconveyance of the Deed of Trust without the surrender to it of the Deed of Trust for cancellation and retention, the undersigned hereby agrees to indemnify Pacific Alliance Title LLC against all liability and responsibility for any loss, damage and expense that may arise or that Pacific Alliance Title LLC may suffer by reason of the issuance of such reconveyance without having possession of the original Deed of Trust. Dated this 21st day of May, 2014. [Signature appears on the following page.) 51368864.1 [Signature Page — Affidavit of Lost Deed of Trust] CITY OF YAKIMA, WAS corporation By GTON, a unicipal Tonro'Rou,ke, City Manager Attest % ) • City Clerk STATE OF WASHINGTON ) ) ss. COUNTY OF YAKIMA ) On this i day of May, 2014, before me, the undersigned, a Notary Public in and for the State of Washington, duly commissioned and sworn, personally appeared Tony O'Rourke to me known to be the City Manager of the City of Yakima, the entity that executed the foregoing instrument, and on oath stated that he is authorized to execute the said instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said entity for the uses and purposes therein mentioned. 51368864.1 ett3\•ssioifi?..A `'NOTARY (J;\ PU6UG ,\. ° %,. 9).6' 2.:•••..x*. 15ci`Ca (Sigt ire of Notary) aci(Lf R. fce .> (Legibly Print or Stamp Name of Notary) Notary public inand for the stat9 of Washington, residing at L' (t. ..0 My appointni nt expires al 1,511-) CERTIFICATE OF COVERAGE 01/15/99 PRODUCER HOUSING AUTHORII'IhS RISK RETENTION POOL 2500 MAIN STREET, SUITE 120 VANCOUVER, WASHINGTON 98660 (360) 694-3500 (360) 694-3600 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS HOLDER THIS CERT thICATE DOES NOT AMEND, EXTEND OR ALTER THE BY THE POLICIES BELOW UPON THE CER 1IPICATE COVERAGE AFFORDED COMPANIES AFFORDING COVERAGE COMPANY LETTER A Housing Authorities Risk Retention Pool (HARRP) COMPANY LEITER B 7x ;' >; :^' COVERED ENTITY YAKIMA HOUSING AUTHORITY P.O. BOX 2910 YAKIMA, WASHINGTON 98907-2910 COMPANY Mil LEVER C 9I'i1�lix 1 I_ jLI:"i! LETY D U i Y 0, - , i'fl��'�/�l'' \1'-'L- .+ "�' I.1 ilt- Orhi {��i COMPANY LE LEVER E COVERAGES THIS ISTD CERTIFYTHAT THE POLICIES LISTED BELOW HAVE BEEN ISSUED TO THE COVERED ENTITY NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OFANY CONTRACTOROTHER DOCUMENTS WITH RESPECTTO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT 'ID ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO Lm TYPE OF COVERAGE POLICY NUMBER POLICY EHHECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) ALL LIMITS A GENERAL LIABILITY COMMERCIAL GENERAL LIABILITY 060-PLEAF 02/01/99 02/01/00 GENERAL AGGREGATE $3,000,000 X EACH OCCURRENCE $3,000,000 CLAIMS MADE X OCCUR. FIRE DAMAGE (ANY ONE FIRE) $3,000,000 OWNER'S & CONTRACTOR'S PROT MEDICAL EXP. (ANY ONE PERSON) EXCLUDED AUTOMOBILE LIABILITY ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS HIlRED AUTOS NON -OWNED AUTOS GARAGE LIABILITY COMBINED SINGLE LIMIT $ 2,000,000 BODILY INJURY (PER PERSON) S BODILY INJURY (PER ACCIDENT) 5 PROPERTY DAMAGE $ A OTHER BLANKET ALL PROPERTY 060-PLEAF 02/01/99 02/01/00 $3,000,000 Blanket Loss Limit / Per Occurrence / All Risk / Replacement Cost / $1,000 Deductible (Subject to Policy Terms & Conditions) DESCRIPTION OF AS RESPECTS: OPERATIONS / LOCATIONS / VEHICLES / RESTRICTIONS NUEVA PRIMAVERA, / SPECIAL ITEMS 810 NORTH 6TH AVENUE, YAKIMA, WA Per the interest of the CERTIFICATE HOLDER / PARTY / LOSS PAYEE As shown below: ADDITIONAL COVERED CERTIFICATE HOLDER CANCELLATION YAKIMA CITY HALL DICK7ATS,YakimaCi Manager `' 129 N. 2ND STREET YAKIMA, WA 98901 Phone: (509) 575-6113 .SHOULD ANY OFTHE ABOVE DESCRIBED COVERAGE BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TOTHE LEFT, BUT FAILURETO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REPRESENTATIVE �,, -- ,,-, -- ,' r -- - : S NS C SCOGGINS " <---',i_,,,--,r,-----------,--- EXECUTIVE DIRECTOR Z:\TINA\ENDRS MNT\ 1999-200\YAKI.005. W P D ENDORSEMENT COVERED ENTITY: YAKIMA HOUSING AUTHORITY P.O. BOX 2910 YAKIMA, WASHINGTON 98907-2910 MEMBER NO.: 060-PLEAF COVERAGE PERIOD: 02/01/99 - 02/01/00 LOCATION: AS RESPECTS: NUEVA PRIMAVERA 810 NORTH 6TH AVENUE YAKIMA, WASHINGTON CONTRACT NO.: 5-94-491-25B LIABILITY/E&O: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS ADDITIONAL COVERED PARTY° FS) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKEVIA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER LOSS PAYEE / F&C: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS LOSS PAYEE(S) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED 01/16/99 Date Housing Authorities Risk Retention Pool Julius C. Scoggins, Executive Director Z:\TINA\ENDRSMNP\1999-200\YAKIMA.00S • ; C- S � CERTIFICATE OF COVERAGE ISSUE 01/16/02 PRODUCER HOUSING AUTHORITIES RISK RETENTION POOL 2500 MAIN STREET, SUITE 120 VANCOUVER, WASHINGTON." 98660 (360) 694-3500 (360) 694-3600 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW COMPANIES AFFORDING COVERAGE COMPANY LETTER A Housing Authorities Risk Retention Pool (HARRP) COMPANY LETTER B COVERED ENTITY YAKIMA HOUSING AUTHORITY 810 N. 6" AVENUE YAKIMA, WASHINGTON 98902 COMPANY LETTER C COMPANY LETTER D COMPANY LETTER E COVERAGES THIS IS TO CERTIFY THAT THE POLICIES LISTED BELOW HAVE BEEN ISSUED TO THE COVERED ENTITY NAMED ABOVE FOR THE POLICY PERIOD INDICATED NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENTS WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. Co LTR TYPE OF COVERAGE POLICY NUMBER POLICY EFFECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) ALL LIMITS A GENERAL LIABILITY 060-PLEAF 02/01/02 01/31/03 GENERAL AGGREGATE $3,000,000 EACH OCCURRENCE $3,000,000 X COMMERCIAL GENERAL LIABILITY FIRE DAMAGE (ANY ONE FIRE) $3,000,000 CLAIMS MADE X OCCUR. MEDICAL EXP. (ANY ONE PERSON) EXCLUDED OWNER'S & CONTRACTOR'S PROT AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $ 2,000,000 ANY AUTO BODILY INJURY (PER PERSON) 5 ALL OWNED AUTOS SCHEDULED AUTOS BODILY INJURY (PER ACCIDENT) $ HIRED AUTOS NON -OWNED AUTOS PROPERTY DAMAGE $ GARAGE LIABILITY A OTHER BLANKET ALL PROPERTY 060-PLEAF 02/01/02 01/31/03 $3,000,000 Blanket Loss Limit / Per Occurrence / All Risk / Replacement Cost / $1,000 Deductible (Subject to Policy Terms & Conditions) DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES / RESTRICTIONS / SPECIAL ITEMS AS RESPECTS: NUEVA PRIMAVERA, 810 NORTH 6TH AVENUE, YAKIMA, WA Per the interest of the CERTIFICATE HOLDER / ADDITIONAL COVERED PARTY / LOSS PAYEE As shown below: CERTIFICATE HOLDER CANCELLATION YAKIMA CITY HALL DICK ZAIS, Yakima City Manager 129 N 2ND STREET YAKIMA,WA 98901 Phone:one:(5 (509) 575-6113 .SHOULD ANY OF THE ABOVE DESCRIBED COVERAGE BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REP O� <' (x 6..."...--r' JULIUS C. SCOGGINS EXECUTIVE DIRECTOR Z:\Endorsements\2002-03\Yakima\YAK 1-005. W PD J ENDORSEMENT COVERED ENTITY: YAKIMA HOUSING AUTHORITY 810 N. 6TH AVENUE YAKIMA, WASHINGTON 98902 MEMBER NO.: 060-PLEAF COVERAGE PERIOD: 02/01/02 - 01/31/03 LOCATION: AS RESPECTS: NUEVA PRIMAVERA 810 NORTH 6TH AVENUE YAKIMA, WASHINGTON CONTRACT NO.: 5-94-491-25B LIABILITY/E&O: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS ADDITIONAL COVERED PARTY(IES) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER LOSS PAYEE / F&C: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS LOSS PAYEE(S) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED 01/16/02 Date Housing Authorities Risk Retention Pool Julius C. Scoggins, Executive Director Z: \ Endorsements \2002-03\Yakima\Yak i ma.005. wpd F 302. CERTIFICATE OF COVERAGE ISSUE DATE (MM/DD/YY) 01/20/04 PRODUCER HOUSING AUTHORITIES RISK RETENTION POOL 2500 MAIN STREET, SUITE 120 VANCOUVER, WASHINGTON 98660 (360) 694-3500 (360) 694-3600 FAX THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW COMPANIES AFFORDING COVERAGE COMPANY HARRP LETTER A (Housing Authorities Risk Retention Pooi) COVERED ENTITY YAKIMA HOUSING AUTHORITY ATTN: DICK ALLEN, EXECUTIVE DIRECTOR 810 N. 6T11 AVENUE YAKIMA, WASHINGTON 98902 COMPANY LETTER B COVERAGES THIS IS TO CERTIFY THAT THE POLICIES LISTED BELOW HAVE BEEN ISSUED TO THE COVERED ENTITY NAMED ABOVE FOR THE POLICY PERIOD INDICATED NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENTS WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED I-IEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES LIITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO LTR TYPE OP INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) ALL LIMITS A GENERAL LIABILITY X COMMERCIAL GENERAL LIABILITY 060-PLEAF 02/01/04 01/31/05 GENERAL AGGREGATE $ 3,000,000 EACH OCCURRENCE $ 3,000,000 CLAIMS MADE X OCCURRENCE FIRE DAMAGE (ANY ONE FIRE) $ 3,000,000 OWNERS'S & CONRACTOR'S PROT MEDICAL EXPENSES EXCLUDED AUTOMOBILE LIABILITY ALL OWNED AUTOS COMBINED SINGLE LIMIT $ SCHEDULED AUTOS HIRED AUTOS BODILY INJURY (PER PERSON) $ BODILY INJURY (PER ACCIDENT) $ NON -OWNED AUTOS PROPERTY DAMAGE $ A OTI-IER BLANKET ALL PROPERTY 060-PLEAF 02/01/04 01/31/05 $3,000,000 Blanket Loss Limit / Per Occurrence / All Risk / Replacement Cost / $1,000 Deductible (Subject to Policy Terms & Conditions) DESCRIPTION AS OF OPERATIONS/LOCATIONS/VEHICLES/RESTRICTIONS/SPECIAL RESPECTS: NUEVA PRIMAVERA, 810 ITEMS NORTH 6TH AVENUE, YAKIMA, WASHINGTON, Per the interest of the / ADDITIONAL COVERED PARTY / LOSS PAYEE As shown below: CERTIFICATE HOLDER CERTIFICATE HOLDER CANCELLATION YAKIMA CITY HALL ATTN: DICK ZAIS, YAKIMA CITY MANAGER 129 N. 2ND STREET YAKIMA, WA 98901 PHONE:509-575-6113 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE TI -IE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO TI -IE CERTIFICATE HOLDER NAMED TO TILE LEFT, BUT AGENTS MAIL ORREPRESENTATIVESOALL IMPOSE NO OBLIGATION OF LIABILITY OF ANY KIND UPON THE COMPANY, ITS AUTHORIZED REPRESENTATIVE ',� 1 C „--- fPHONE• Julius C. Scoggins, Executive Director Z:\Endorsements\2004-05\Yakima\Yak-005 doc ENDORSEMENT COVERED ENTITY: YAKIMA HOUSING AUTHORITY 810 N.6'"AVENUE YAKIMA, WASHINGTON 98902 MEMBER NO.: 060-PLEAF COVERAGE PERIOD: 02/01/04 - 01/31/03 LOCATION: AS RESPECTS: NUEVA PRIMAVERA 810 NORTH 6TH AVENUE YAKIMA, WASHINGTON LIABILITY/E&O: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS ADDITIONAL COVERED PARTY(IES) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: PROPERTY/F&C: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS LOSS PAYEE(S) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL ATTN: DICK ZAIS, YAKIMA CITY MANAGER 129 N. 2ND STREET YAKIMA, WASHINGTON 98901 ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED 01/20/04 Date Julius C. Scoggins, Executive Director Housing Authorities Risk Retention Pool Z:\Endorsements\2004-05\Yakima\Yak-005 doe Z:\Endorsements\2003.04\YAKIMA\YAKIMA -005.doc CERTIFICATE OF COVERAGE ISSUE DATE (MMDD/YY) 02/01 /03 PRODUCER HOUSING AUTHORITIES RISK RETENTION POOL 2500 MAIN STREET, SUITE 120 VANCOUVER, WASHINGTON 98660 (360) 694-3500 (360) 694-3600 FAX THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW COMPANIES AFFORDING COVERAGE COMPANY LE1IER A HARRP COVERED ENTITY YAKIMA HOUSING AUTHORITY 810 N. 6TH AVENUE YAKIMA, WASHINGTON 98902 COMPANY LEI PER B COVERAGES THIS IS TO CERTIFY THAT THE POLICIES LISTED BELOW HAVE BEEN ISSUED TO THE COVERED ENTITY NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENTS WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LILTS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO LTR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) ALL LIMITS A GENERAL LIABILITY X COMMERCIAL GENERAL LIABILITY 060-PLEAF 02/01/03 01/31/04 GENERAL AGGREGATE $ 3,000,000 EACH OCCURRENCE $ 3,000,000 CLAIMS MADE X OCCURRENCE FIRE DAMAGE (ANY ONE FIRE) $ 3,000,000 OWNERS'S & CONRACTOR'S PROT. MEDICAL EXPENSES EXCLUDED AUTOMOBILE LIABILITY ALL OWNED AUTOS COMBINED SINGLE LIMIT $ SCHEDULED AUTOS BODILY INJURY (PER PERSON) $ HIRED AUTOS BODILY INJURY (PER ACCIDENT) $ NON -OWNED AUTOS PROPERTY DAMAGE $ A OTHER BLANKET LOSS LIMIT 060-PLEAF 02/01/03 01/31/04 $3,000,000 Blanket Loss Limit Per Occurrence / All Risk / Replacement Cost / $1,000 Deductible (Subject to Policy Terms & Conditions) DESCRIPTION AS RESPECTS: OF OPERATIONS/LOCATIONS/VEHICLES/RESTRICTIONS/SPECIAL NUEVA PRIMAVERA, 810 NORTH ITEMS 6TH AVENUE, YAKIMA, WASHINGTON Per the interest of the CERTIFICATE PARTY/ LOSS PAYEE As shown below: HOLDER / ADDITIONAL COVERED CERTIFICATE HOLDER CANCELLATION YAKIMA CITY HALL DICK ZAIS, YAKIMA CITY MANAGER 129 N. 2ND STREET YAKIMA, WA 98901 PHONE: 509 575 6113 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OF LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REPRESENTATIVE ." �.". JULIUS C. SCOGGINS /4- - EXECUTIVE DIRECTOR Z:\Endorsements\2003.04\YAKIMA\YAKIMA -005.doc ENDORSEMENT COVERED ENTITY: YAKIMA HOUSING AUTHORITY 810 N. 6TH AVENUE YAKIMA, WASHINGTON 98902 MEMBER NO.: 060-PLEAF COVERAGE PERIOD: 02/01/03 - 01/31/04 LOCATION: AS RESPECTS: NUEVA PRIMAVERA 810 NORTH 6TH AVENUE YAKIMA, WASHINGTON CONTRACT NO.: 5-94-491-25B LIABILITY/E&O: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS ADDITIONAL COVERED PARTY(IES) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER LOSS PAYEE / F&C: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS LOSS PAYEE(S) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED 02/01/03 Date Housing Authorities Risk Retention Pool Julius C. Scoggins, Executive Director Z:\Endorsements\2003-04\YAKI MA\Yakima.005.do CERTIFICATE OF COVERAGE ISSUEDATE (MM/DD/YY) 02/01/03 PRODUCER HOUSING AUTHORITIES RISK RETENTION POOL 2500 MAIN STREET, SUITE 120 VANCOUVER, WASHINGTON 98660 (360) 694-3500 (360) 694-3600 FAX THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. COMPANIES AFFORDING COVERAGE COMPANY LEI IER A HARRP COVERED ENTITY YAKIMA HOUSING AUTHORITY 810 N. 6TH AVENUE YAKIMA, WASHINGTON 98902 COMPANY LEI 1ER B COVERAGES THIS IS TO CERTIFY THAT THE POLICIES LISTED BELOW HAVE BEEN ISSUED TO THE COVERED ENTITY NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENTS WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES LIITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO LTR TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) ALL LIMITS A GENERAL LIABILITY X COMMERCIAL GENERAL LIABILITY 060-PLEAF 02/01/03 01/31/04 GENERAL AGGREGATE $ 3,000,000 EACH OCCURRENCE $ 3,000,000 CLAIMS MADE X OCCURRENCE FIRE DAMAGE (ANY ONE FIRE) $ 3,000,000 OWNERS'S & CONRACTOR'S PROT MEDICAL EXPENSES EXCLUDED AUTOMOBILE LIABILITY ALL OWNED AUTOS COMBINED SINGLE LIMIT $ SCHEDULED AUTOS BODILY INJURY (PER PERSON) $ HIRED AUTOS BODILY INJURY (PER ACCIDENT) $ NON-OWNED AUTOS PROPERTY DAMAGE $ A OTHER BLANKET LOSS LIMIT 060-PLEAF 02/01/03 01/31/04 $3,000,000 Blanket Loss Limit Per Occurrence / All Risk / Replacement Cost / $1,000 Deductible (Subject to Policy Terms & Conditions) DESCRIPTION AS RESPECTS: OF OPERATIONS/LOCATIONS/VEHICLES/RESTRICTIONS/SPECIAL NUEVA PRIMAVERA, 810 NORTH ITEMS 6TH AVENUE, YAKIMA, WASHINGTON Per the interest of the CERTIFICATE PARTY/ LOSS PAYEE As shown below: HOLDER / ADDITIONAL COVERED CERTIFICATE HOLDER CANCELLATION YAKIMA CITY HALL DICK ZAIS, YAKIMA CITY MANAGER 129 N. 2ND STREET YAKIMA, WA 98901 PHONE: 509 575 6113 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRI1 IEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO MALL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OF LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REPRESENTATIVE , JULIUS C. SCOGGINS / EXECUTIVE DIRECTOR Z;\Endorsements\2003-04\YAKIMA\YAKIMA-005.doc ENDORSEMENT COVERED ENTITY: YAKIMA HOUSING AUTHORITY 810 N. 6TH AVENUE YAKIMA, WASHINGTON 98902 MEMBER NO.: 060-PLEAF COVERAGE PERIOD: 02/01/03 - 01/31/04 LOCATION: AS RESPECTS: NUEVA PRIMAVERA 810 NORTH 6TH AVENUE YAKIIVIA, WASHINGTON CONTRACT NO.: 5-94-491-25B LIABILITY/E&O: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS ADDITIONAL COVERED PARTY(IES) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER LOSS PAYEE / F&C: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS LOSS PAYEE(S) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED 02/01/03 Date Housing Authorities Risk Retention Pool Julius C. Scoggins, Executive Director Z:\Endorsements\2003-04\YAKI MA\Yak ima.005.do Form B (Additional Insured) ' Certificate Number: 89185 Py Y ASSOCIATED ELECTRIC & GAS INSURANCE SERVICES LIM1 Hamilton, Bermuda CERTIFICATE OF INSURANCE (Excess Liability) This Certificate is furnished to the Certificate Holder named below as a matter of information only. Neither this Certificate nor the issuance hereof modifies the policy of insurance identified below (the "Policy") in any manner. The policy terms are solely as stated in the Policy or in any endorsement thereto. Any amendment, change or extension of the Policy can only be effected by a specific endorsement issued by the Company and attached to the Policy. The undersigned hereby certifies that the Policy has been issued by Associated Electric & Gas Insurance Services Limited (the "Company") to the Named Insured identified below for the coverage described and for the policy period specified. Notwithstanding any requirements, terms or conditions of any contract or other document with respect to which this Certificate may be issued or to which it may pertain, the insurance afforded by the Policy is subject to all of the terms of the Policy. NAME OF INSURED: PRINCIPAL ADDRESS: POLICY NUMBER: POLICY PERIOD: RETROACTIVE DATE: DESCRIPTION OF COVERAGE: LIMIT OF LIABILITY: ADDITIONAL INSURED: Avista Communications 159 S. Lincoln Street, Ste. 211, Spokane, WA 99201 X0149A1 A98 FROM: 12/31/98 To: 12/31/03 12/31/86 Claims -First Made Excess Liability Policy covering claims for Bodily Injury, Property Damage and Personal Injury arising from the operations described below. $2,000,000 per occurrence and in the aggregate, where applicable Claims -First -Made Excess Liab. Pol. covering claims for Bodily Inj, PD & Pers. Inj. arising from the operations desc. below The Certificate Holder is an additional Insured under the Policy but only (i) to such extent and for such Limits of Liability (subject always to the terms and Limits of Liability of the Policy) as the Named Insured has agreed to provide insurance for the Certificate Holder under the following contract: and (ii) with respect to the following operations of the Insured, it's directors and officers, affiliates and employees are added as additional insured with respects to the collocation agreement. Insured is self-insured for workers' compensation in the State of Washington. Should the Policy be cancelled, assigned or changed in a manner that is materially adverse to the Insured(s) under the Policy, the undersigned will endeavor to 30 days advance written notice thereof to the Certificate Holder, but failure to give such notice will impose no obligation or liability of any kind upon the Company, the undersigned or any agent or representative or either. DATE: ISSUED TO: ADDRESS: December 31, 2002 City of Yakima Attn: Ken Carlson City of Yakima, City Mayor, City Hall, 129 N. 2nd Street, Yakima, WA 98901-2637 This contract is registered and delivered as a surplus lines coverage under the insurance code of the State of Washington, enacted in 1947. It is not issued by a company regulated by the Washington State Insurance Commissioner and is not protected by any Washington State guaranty fund law. BY. ("Certificate Holder") AEGIS INSURANCE SERVICES At Jersey City, New Jersey Form B (Additional Insured) ASSOCIATED ELECTRIC & GAS INSURANCE SE Hamilton, Bermuda CERTIFICATE OF INSURANCE (Excess Liability) This Certificate is furnished to the Certificate Holder named below as a matter of information only. Neither this Certificate nor the issuance hereof modifies the policy of insurance identified below (the "Policy") in any manner. The policy terms are solely as stated in the Policy or in any endorsement thereto. Any amendment, change or extension of the Policy can only be effected by a specific endorsement issued by the Company and attached to the Policy. The undersigned hereby certifies that the Policy has been issued by Associated Electric & Gas Insurance Services Limited (the "Company") to the Named Insured identified below for the coverage described and for the policy period specified. Notwithstanding any requirements, terms or conditions of any contract or other document with respect to which this Certificate may be issued or to which it may pertain, the insurance afforded by the Policy is subject to all of the terms of the Policy. Cr'tf cater Pl.>ark),r: 9001 ICES' LIMITED JAN 6 2003 ,. ! J t NAME OF INSURED: PRINCIPAL ADDRESS: POLICY NUMBER: POLICY PERIOD: RETROACTIVE DATE: DESCRIPTION OF COVERAGE: LIMIT OF LIABILITY: ADDITIONAL INSURED: Avista Communications 159 S. Lincoln Street, Ste. 211, Spokane, WA 99201 X0149A1 A98 FROM: 12/31/98 To: 12/31/03 12/31/86 Claims -First Made Excess Liability Policy covering claims for Bodily Injury, Property Damage and Personal Injury arising from the operations described below. $2,000,000 per occurrence and in the aggregate, where applicable Claims -First -Made Excess Liability Policy covering claims for Bodily Injury, Property Damage and Personal Injury arising from the operations described below. The Certificate Holder is an additional Insured under the Policy but only (i) to such extent and for such Limits of Liability (subject always to the terms and Limits of Liability of the Policy) as the Named Insured has agreed to provide insurance for the Certificate Holder under the following contract: The City of Yakima, elected officials, agents, & employees are includes as additional insureds as respects installation of telecommunications system infrastructure. and (ii) with respect to the following operations of the Insured, it's directors and officers, affiliates and employees are added as additional insured with respects to the collocation agreement. Insured is self-insured for workers' compensation in the State of Washington. Should the Policy be cancelled, assigned or changed in a manner that is materially adverse to the Insured(s) under the Policy, the undersigned will endeavor to 30 days advance written notice thereof to the Certificate Holder, but failure to give such notice will impose no obligation or liability of any kind upon the Company, the undersigned or any agent or representative or either. DATE: ISSUED To: ADDRESS: December 31, 2002 City of Yakima, City Mayor, City Hall 129 N. 2nd Street Yakima, WA 98901-2637 This contract is registered and delivered as a surplus lines coverage under the insurance code of the State of Washington, enacted in 1947. It is not issued by a company regulated by the Washington State Insurance Commissioner and is not protected by any Washington State guaranty fund law. BY: ("Certificate Holder") AEGIS INSURANCE SERVICES At Jersey City, New Jersey CERTIFICATE OF COVERAGE 01/15/99 PRODUCER HOUSING AUTHORITIES RISK RETENTION POOL THIS CERTIFICATE IS ISSUED AS A MAI TER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER THIS CER INN ICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW 2500 MAIN STREET, SUITE 120 VANCOUVER, WASHINGTON 98660 COMPANIES AFFORDING COVERAGE (360) 694-3500 (360) 694-3600 COMPANY LETTER A Housing Authorities Risk Retention Pool (HARRP) COMPANY LEVER B COVERED ENTITY COMPANY LE 1 TER C YAKIMA HOUSING AUTHORITY P.O. BOX 2910 98907-2910 COMPANY LE111,8IER D YAKIMA, WASHINGTON COMPANY LEI 1'ER E COVERAGES THIS ISTD CERTIFY THATTHE POLICIES LISTED BELOW HAVE BEEN ISSUED TO THE COVERED OR CONDITION OF ANY CONTRACTOR OTHER DOCUMENTS WITH RESPECTIO WHICH THIS CERTIFICATE IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS ENTITY NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. co LTR TYPE OF COVERAGE POLICY NUMBER POLICY EH'ECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) ALL LIMITS A GENERAL LIABILITY 060-PLEAF 02/01/99 02/01/00 GENERAL AGGREGATE $3,000,000 EACH OCCURRENCE $3,000,000 X COMMERCIAL GENERAL LIABILITY FIRE DAMAGE (ANY ONE FIRE) $3,000,000 CLAIMS MADE X OCCUR MEDICAL EXP. (ANY ONE PERSON) EXCLUDED OWNER'S & CONTRACTOR'S PROT. AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $ 2,000,000 ANY AUTO BODILY INJURY (PER PERSON) $ ALL OWNED AUTOS SCHEDULED AUTOS BODILY INJURY (PER ACCIDENT) $ HIRED AUTOS NON-OWNED AUTOS PROPERTY DAMAGE $ GARAGE LIABILITY A OTHER BLANKET ALL PROPERTY 060-PLEAF 02/01/99 02/01/00 $3,000,000 Blanket Loss Limit / Per Occurrence / All Risk / Replacement Cost / $1,000 Deductible (Subject to Policy Terms & Conditions) DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES / RESTRICTIONS / SPECIAL ITEMS AS RESPECTS: NUEVA PRIMAVERA., 810 NORTH 6TH AVENUE, YAKIMA, WA Per the interest of the CERTIFICATE HOLDER / ADDITIONAL COVERED PARTY / LOSS PAYEE As shown below: CER I'IN'ICATE HOLDER CANCELLATION YAKIMA CITY HALL DICK ZAIS, Yakima CityManager $ 129 N. 2ND STREET YAKIMA, WA 98901 Phone: (509) 575-6113�'.% .SHOULD ANY OF THE ABOVE DESCRIBED COVERAGE BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TOTE LER BUTFAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. AUTHORIZED REPRESENTATIVE /- `-, . !�` ` . --- JULIUS C. SCOGGINS ` ✓ z' ` l r, EXECUTIVE DIRECTOR 7 Z\TINA\END RS MN11 l 999.200\YAKI-005. W P D ENDORSEMENT COVERED ENTITY: YAKIMA HOUSING AUTHORITY P.O. BOX 2910 YAKIMA, WASHINGTON 98907-2910 MEMBER NO.: 060-PLEAF COVERAGE PERIOD: 02/01/99 - 02/01/00 LOCATION: AS RESPECTS: NUEVA PRIMAVERA 810 NORTH 6TH AVENUE YAKIMA, WASHINGTON CONTRACT NO.: 5-94-491-25B LIABILITY/E&O: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS ADDITIONAL COVERED PARTY(IES) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER LOSS PAYEE / F&C: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS LOSS PAYEE(S) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED 01/16/99 Date , Housing Authorities Risk Retention Pool Julius C. Scoggins, Executive Director Z:\TIN A\ENDRSMNT\1999-200\YAKIM A.005 s CERTIFICATE OF COVERAGE ISSUE ii16 00 ' PRODUCER HOUSING AUTHORITIES RISK RETENTION POOL 2500 MAIN STREET, SUITE 120 VANCOUVER, WASHINGTON 98660 (360) 694-3500 (360) 694-3600 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW COMPANIES AFFORDING COVERAGE COMPANY LETTER A Housing Authorities Risk Retention Pool (HARRP) COMPANY LETTER B COVERED ENTITY YAKIMA HOUSING AUTHORITY P.O. BOX 2910 YAKIMA, WASHINGTON 98907-2910 COMPANY LETTER C COMPANY LETTER D COMPANY LETTER E COVERAGES THIS IS TO CERTIFY THATTHE POLICIES LISTED BELOW HAVE BEEN ISSUED TO THE COVERED ENTITY NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACTOR OTHER DOCUMENTS WITH RESPECTTO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN.THE INSURANCE AFFORDED BYTHE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. co LTR TYPE OF COVERAGE POLICY NUMBER POLICY E1,FECTIVE DATE (MM/DD/YY) POLICY EXPIRATION DATE (MM/DD/YY) ALL LIMITS A GENERAL LIABILITY COMMERCIAL GENERAL LIABILITY 060-PLEAF 02/01/00 02/01/01 GENERAL AGGREGATE $3,000,000 EACH OCCURRENCE $3,000,000 CLAIMS MADE OCCUR. FIRE DAMAGE (ANY ONE FIRE) $3,000,000 OWNER'S & CONTRACTOR'S PROT MEDICAL EXP. (ANY ONE PERSON) EXCLUDED AUTOMOBILE LIABILITY ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS HIRED AUTOS NON -OWNED AUTOS GARAGE LIABILITY COMBINED SINGLE LIMIT $ 2,000,000 BODILY INJURY (PER PERSON) $ BODILY INJURY (PER ACCIDENT) $ PROPERTY DAMAGE $ A OTHER BLANKET ALL PROPERTY 060-PLEAF 02/01/00 02/01/01 $3,000,000 Blanket Loss Limit / Per Occurrence / All Risk / Replacement Cost / $1,000 Deductible (Subject to Policy Terms & Conditions) DESCRIPTION AS RESPECTS: OF OPERATIONS / LOCATIONS / VEHICLES / RESTRICTIONS NUEVA PRIMAVERA, / SPECIAL ITEMS 810 NORTH GTH AVENUE, YAKIMA, WA Per the interest of the CERTIFICATE HOLDER / PARTY / LOSS PAYEE As shown below: ADDITIONAL COVERED CERTIFICATE HOLDER CANCELLATION YAKIMA CITY HALL DICK ZAIS, Yakima City Manager 129 N 2ND STREET YAKIMA, WA 98901 Phone: (509) 575-6113 .SHOULD ANY OF THE ABOVE DESCRIBED COVERAGE BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO KIND UPONTHE LEFT, BUT FALURE TO MAIL SUCH THE COMPANY, FFS AGENTS OR REPRESENTTA' IVE LIMPOSE NO OBLIGATION OR LIABILITY OF ANY AUTHORIZED REPRESENTATIVE / �' y _ JULIUS C SCOGGINS EXECUTIVE DIRECTOR Z:\ENDRSMNf\2000-0I \YAKI-005.WPD i ENDORSEMENT COVERED ENTITY: YAKIMA HOUSING AUTHORITY P.O. BOX 2910 YAKIMA, WASHINGTON 98907-2910 MEMBER NO.: 060-PLEAF COVERAGE PERIOD: 02/01/00 - 02/01/01 LOCATION: AS RESPECTS: NUEVA PRIMAVERA 810 NORTH 6TH AVENUE YAKIMA, WASHINGTON CONTRACT NO . 5-94-491-25B LIABILITY/E&O: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS ADDITIONAL COVERED PARTY(IES) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN: DICK ZAIS, CITY MANAGER LOSS PAYEE / F&C: IT IS HEREBY AGREED THAT THE FOLLOWING IS INCLUDED AS LOSS PAYEE(S) AS RESPECTS THEIR INTEREST IN THE PROPERTY(IES) NAMED ABOVE: YAKIMA CITY HALL 129 N. 2ND STREET OLYMPIA, WASHINGTON 98901 ATTN• DICK ZAIS, CITY MANAGER ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED 01/16/00 Date Housing Authorities Risk Retention Pool Julius C. Scoggins, Executive Director Z:\ENDRS MNT\200401 \YAKIMA.005 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No.: For Meeting of: May 19. 1998 ITEM TITLE: Nueva Primavera Housing Project SUBMITTED BY: Glenn Rice, Acting Director of Community and Economic Development (575-6040) CONTACT PERSON/PHONE: William Cook, Neighborhood Development Services Manager (575-6101) SUMMARY EXPLANATION: Originally scheduled for the Council meeting on April 21, 1998, the attached packet has been expanded and updated to include the draft documents prepared for the Nueva Primavera Project closing. Please note, that these documents are "drafts" subject to additional information that will only be available immediately prior to closing, (i.e. dates, interests rates, etc.) and inconsistencies between documents that will be adjusted to conform to the Contingent Loan Agreement. With your approval of this resolution, the City Manager will withhold execution of the Contingent Loan Agreement until all documents are complete and consistent. The Yakima Housing Authority has requested the City's support for their new mixed income, mixed use residential and office complex to be built on North 6th Avenue at Fruitvale Boulevard. The City's participation would be in the form of a Contingent Loan Agreement with the Housing Authority guaranteeing to loan funds to the Authority to maintain sufficient debt service reserve requirements. The Housing Authority has made this request of the City to: • Lower the interest rate of the bonds to be sold by the Housing Authority to fund, in part, the cost of this project thereby making the project economically feasible. Note: The Housing Authority is new to the Bond markets and unlike the City, unable to place a rated Bond Issue and, • Assist the housing authority to establish a "track record" with this project which should allow them to access private capital markets in the future without City guarantees. City staff, with assistance from our Bond Council, the law firm of Preston, Gates and Ellis, have worked to structure the Contingent Loan Agreement to be as protective of the City's interests as possible. Our number one goal has been to minimize the chances that the City's "full faith and credit" will be called upon and to ensure that the project is a success. As in any real estate transaction, however, there remains a risk to the City (see the attached Risk/Remedy analysis). However, we feel the commitments established herein are reasonable and secure to protect the City's interests/liability and will still enable the project to proceed. Any further limitations or requirements by the City (such as a higher debt service coverage requirement) would effectively negate the fiscal viability of the project. Other than copies in the Council members' packet, copies of the Deed of Trust and Trust Bond Indenture, are available in the City Clerk's office for review. Resolution X Ordinance Contract Other Specify Funding Source: Counity Development Block Grant Funds APPROVAL FOR SUBMITTAL: City Manger STAFF RECOMMENDATION: Accept proposal and authorize City Manager to ensure all necessary documentation has been completed prior to executing Contingent Loan Agreement. BOARD/COMMISSION RECOMMENDATION: The Council Economic Development Committee reviewed the proposal on April 10, 1998 and concurred with staff recommendation. COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-98-67 TD -18 Nueva Primavera Agenda 5/19/98 Nueva Primavera Analysis Risk Remedy 1. Bid bust 2. Cost overruns 3. Quality of construction management 4. Delay in rent -up 5. Rent structure above market 6. Vacancy rate too high 7. Fire or other property damage 8. Violation of tax exempt bond restrictions 9. Inadequate cash flow to make debt service 10. Default No project or Housing Authority secures additional funds Construction contingency (approx. $300,000) Experience and resume; city approves 24 months of principal and interest payments built into project financing including $67,000 Housing Authority pledge. Highest chance of revenue short -fall would be in the third year Request HUD approval to contract 23 units of Section 8 project based authority at Nueva Primavera and/or Request approval to restructure $1,000,000 State loan See #5 above Please note, project cash flows at 91% occupancy Fire, property and loss of revenue insurance required 60 day cure period for Housing Authority to fix the problem (City and bond holders to be notified if this problem occurs) Housing Authority general revenues pledged, but may not be sufficient. City makes up difference utilizing CDBG funds as available or other City funds City could pay off $2.7 million of bonds. City may then take over and run project or foreclose on property and sell. Current estimate of value of completed project is $3.8 million MEMORANDUM MAY 19,1998 TO: The Honorable Mayor and Member of the City Council Dick Zais, City Manager - FROM: '� ohn Hanson, Director of Finance and Budget Cook, Neighborhood Development Services Manager SUBJECT: Nueva Primavera Housing Project We have completed our negotiations with the Yakima Housing Authority and analysis of their proposed Nueva Primavera Project. At Council's request this item has been rescheduled for your consideration at the May 19, 1998 meeting. Attached for Council review and consideration are the following documents: 1. Agenda Statement 2. City Resolution 3. Risk and Remedy Analysis 4. Contingent Loan Agreement 5. Trust Bond Indenture 6. Deed of Trust Project Summary Proposal -- The Yakima Housing Authority has requested the City's participation in the development of their Nueva Primavera affordable housing project, to be located on North 6th Avenue at Fruitvale. The City has been asked to guarantee repayments on a $2.7 million bond issue of the Housing Authority, which together with a $1 million loan from the State of Washington, a $300,000 grant and $950,000 of Housing Authority equity will finance this development. The City's guarantee would be triggered if cash flow from the project were insufficient to pay the annual principal and interest payments on the bonds of approximately $175,000. Project -- The Nueva Primavera Project is a mixed -income, mixed-use project, which will provide 54 units of affordable housing in the City of Yakima. In addition to a new administrative office, the project will consist of 16 replacement HUD units, and 38 three-bedroom conventional housing units. The Housing Authority of the City of Yakima is the developer for this project. This project will be: • First Yakima Housing Authority tax-exempt bond issue • First financing in partnership with the City of Yakima • First mixed income development owned and operated by the Yakima Housing Authority TD -18 Nueva Primavera Memo 5/19/98 -- 1 General Overview -- • Preston Gates & Ellis, the City's bond counsel, has reviewed and negotiated with counsel for the Authority regarding language in the Contingent Loan Agreement (see attached letter). • Current estimate of the size of the bond issue is approximately $2.7 million. This estimate could change as a result of interest rate fluctuations and actual bid amount. Staff recommends a cap on City guarantee of $2.7 million. • City would be obligated to loan money to the Housing Authority if there are insufficient reserves to meet debt service requirements. The annual debt service is estimated to be $174,861 (based on current interest rates). We recommend that CDBG funds be the source of funds to cover this financial exposure, as long as the City receives an annual entitlement. • City's interests will be included in a Deed of Trust, which will include the ability to foreclose in the event of a Housing Authority default. Foreclosure, however, means the City would have to pay off the bond holders. • Project completion is scheduled for summer 1999. The first three interest and principal payments are going to be capitalized and paid with bond proceeds. This carries the project through December 1999. The Housing Authority is willing to designate fund balance sufficient to pay the next due interest payment. This means the project has sufficient funds identified to cover debt service for the first 24 months. As long as the project is at 91% occupancy by the beginning of the third year (approximately June 2000) rent income of this mixed income project (average rent of $596.96 per unit) should cover future debt service requirements. Note: The success of this project is heavily dependent on the project being completed on time and on budget. • The Housing Authority has pledged all unobligated revenues ahead of the City requirement to commit funds if project revenues are inadequate to meet debt service. (Please note: amount and source of unobligated revenues will vary over time). • At their meeting on Friday, April 10, 1998, the Council Economic Development Committee recommended this item be forwarded for Council Action. • Prior to closing and delivery of the Contingent Loan Agreement, the City Manager will ensure all necessary steps for successful completion of the project and all necessary documentation has been completed, including but not limited to: TD -18 Nueva Primavera Memo 5/19/98 -- 2 -- Verification of bids to construct project within budget. -- Final project proforma with a debt coverage ratio of not less than 1.15, consistent with the Contingent Loan Agreement, and conforming to the bond covenants. Yakima Housing Authority Board Resolution pledging reserves. Assurance of compliance with federal Davis Bacon bidding requirements. Written confirmation from the U.S. Department of Housing and Urban Development that all necessary steps have been taken by the Authority to assure the eligibility of City Community Block Grant expenditures for reserves if needed in the future. Status of sale of Yakima Housing Authority property on North 10th Street or if not under contract, an appraisal of value. Final Contingent Loan Agreement documents committing the City to a guarantee of Housing Authority revenue bonds in the aggregate principal amount of not more than $2.7 million. City Resolution This document authorizes the City Manager and City Clerk to execute the Contingent Loan Agreement but only after all documents associated with the transaction are complete to the City Manager s satisfaction. Risk and Remedy Analysis This staff analysis outlines the primary potential risks associated with a real-estate transaction of this kind and in particular a residential development project owned and operated by a Housing Authority. Each risk is accompanied by a brief description of at least one remedy available for addressing the identified potential problem. Contingent Loan Agreement The proposed Contingent Loan Agreement includes provisions clarifying the City's right to take certain actions should there be a request for a loan from the Housing Authority. Likewise, these provisions increase the seriousness of such a request and therefore, hopefully, focus all efforts on alternative actions within the control of the Authority to avoid such an event. TD -18 Nueva Primavera Memo 5/19/98 -- 3 Protections provided to the City in the Contingent Loan Agreement include: 1. Separate Deed of Trust for the City, junior to, but in substantially the same form as the Bond Holders Deed of Trust attached. 2. A requirement for monthly construction and operations reports from date of closing on the Bonds through the critical rent -up period (estimated to be approximately 24 months). 3. City authority to approve project construction manager. 4. Quarterly and annual financial reports throughout the life of the Contingent Loan Agreement. 5. A provision that treats the advancement of a loan by the City as an event triggering the availability of all remedies provided to the City including taking over operational management of the project and/or foreclosure or debt assumption. 6. Restrictions on the use of project revenues to the project itself (including funding debt service repayment reserve levels) unless otherwise approved in writing by the City. This restriction to be reviewed after five years if requested by the Housing Authority. Trust Bond Indenture The Trust Indenture has been drafted by the Housing Authority's bond counsel Foster Pepper and Shefelman. This document will include references from the Contingent Loan Agreement. It will be updated just shortly before debt is issued and will conform with final Contingent Loan Agreement requirements. The City Manager, before signing the Contingent Loan Agreement will review the two documents for consistency. Deed of Trust Similar to the Trust Bond Indenture, the Deed of Trust will be updated to conform with the final Contingent Loan Agreement, final dollar figures, final interest rate, etc. This document will also be reviewed in its final form by the City Manager before he executes the Contingent Loan Agreement. Please note, as discussed earlier above, there will be a separate Deed of Trust prepared for the City which will include remedies available to the City as discussed in the Contingent Loan Agreement. TD -18 Nueva Primavera Memo 5/19/98 -- 4 RESOLUTION NO. R-98-67 A RESOLUTION providing for a Contingent Loan Agreement with the Housing Authority of Yakima, Washington, to provide assistance in securing bonds to be issued by the Authority to finance the construction of the Nueva Primavera Project of the Authority. WHEREAS, RCW 35.83.050 provides that a city may lend or donate money to a housing authority or agree to take such action; and WHEREAS, the Housing Authority of the City of Yakima (the "Authority") has requested that the City of Yakima (the "City") enter into a Contingent Loan Agreement, evidencing the City's commitment to make loans to the Authority if and to the extent necessary to replenish the reserve account maintained by the trustee for the Authority's proposed Housing Revenue Bonds, 1998 (Nueva Primavera Project) (the "Bonds") and to make up deficiencies in the amounts provided by the Authority to make payments of the principal of and interest on the bonds when due; and WHEREAS, BancAmerica Robertson Stephens (the "Bank"), as underwriter for the bonds, has requested additional assurances that the principal of and interest on the bonds will be paid when due; and WHEREAS, the City Council finds that it is in the best interest of the citizens of Yakima, particularly low-income citizens, to assist the Authority in its issuance of the Bonds; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: Section 1. Approval of Contingent Loan Agreement. The City Council declares its intent to enter into a Contingent Loan Agreement, substantially in the form attached hereto as Exhibit A (the "Agreement"), with the Authority. The City Manager and City Clerk are authorized to execute the Agreement on behalf of the City at or before the time the bonds are issued by the Authority. The City Manager is authorized to deliver the signed agreement to the Authority upon his determination that all steps necessary for the successful completion of the Nueva Primavera Project and all necessary documentation have been completed or such completion has been reasonably assured. The interest rate applied to each advance under the Agreement shall be set by the City in accordance with the Agreement at such time as funds are advanced, but shall not exceed 12% per annum. The total amount of funds to be lent by the City pursuant to the Agreement shall not exceed the principal amount of the bonds approved by the City plus interest due Page 1 of 2 (1k)res/Nueva Primavera -pm and unpaid by the Authority. Upon execution of the Agreement, the full faith, credit and resources of the City shall be pledged irrevocably for the payment of the amounts described in the Agreement. Section 2. Effective Date. This Resolution shall be effective from and after its date of final passage. ADOPTED BY THE CITY COUNCIL this 19th day of May , 1998. ATTEST: John Puccinelli, Mayor City Clerk Page 2 of 2 (]k)res/Nueva Primavera -pm PRESTON GATES & ELLIS L L P ATTORNEYS April27, 1998 VIA FACSIMILE: ORIGINAL TO BE MAILED Timothy Jensen Finance Department City of Yakima 129 North 2nd Street Yakima, WA 98901 Re: Nueva Primavera Dear Tim. Following our conference call of last week, I reviewed the Contingent Loan Agreement ("CLA"), the Indenture and Deed of Trust. I offer the following suggestions in response to the concerns then expressed. Additional Property Security One objective discussed was to secure any loans by the City by obtaining a security interest in all real and personal property of the Authority. The present draft of the Deed of Trust is quite comprehensive already in its coverage but, as to real or personal property (other than General Revenues) it does not, or course, extend beyond the Nueva Primavera project. I understand that there are several other projects in which the Authority has an interest. I suggest that the City receive a deed of trust separate from that running favor of the Trustee. The City's deed of trust would vary from the Trustee's in that it would cover whatever interest the Authority has in any parcel of land (not just Nueva Primavera) subject to existing encumbrances. The lien of the city's deed of trust would be junior to that of the Trustee so the bond holders would still be secured no matter what the City did with its interest. The City could move to enforce its security interests without affecting the Trustee's position. The existing deed of trust language extends it's lien to all personal property located on the listed real property to the extent of the Authority's interest in such property. The City's deed of trust could also extend the default provisions to include advancement as opposed to non-payment of any loan by the City under the CLA. Having a separate deed of trust should give the City greater flexibility and clarify the City's position vis-a-vis the Trustee. A LIMITED LIABILITY PARTNERSHIP INCLUDING OTHER LIMITED LIABILITY ENTITIES ANCHORAGE • COEUR D'ALENE • HONG KONG • LOS ANGELES • ORANGE COUNTY • PORTLAND • SAN FRANCISCO • SEATTLE • SPOKANE • WASHINGTON, D C. 701 FIFTH AVENUE SUITE 5000 SEATTLE, WASHINGTON 98104-7078 206-623-7580 Fx 206-623-7022 www prestongates.Com Timothy Jensen April 27, 1998 Page 2 In order that the City can be assured that the Authority will apply all available resources to funding the project reserve account before asking for a loan from the City for that purpose, 1 suggest adding to Section 2.05 immediately preceding the last sentence the following "Such accounting shall review all funds or other resources of the Authority legally available to fund the Reserve Account. The Authority shall be obligated to apply all legally available fiends or other resources, and the Authority shall certify that all legally available funds or other resources have been previously applied, to meet the Reserve Account requirements " The reference in the preceding sentence to "certificate" should be changed to "notice" Indenture and Deed of Trust as Exhibits The Deed of Trust and Indenture should be attached as exhibits to the CLA as provided in Section 1 01. This seems lesscumbersome and more informative than trying to set forth selected portions of those documents in the CLA. Additional Covenants and Payment of City Costs We discussed adding additional covenants similar to bond holder covenants to the CLA. Attached is a set of suggested covenants. The covenants relating to insurance include business interruption insurance With reference to payment by the Authority of the City's costs in connection with the Project, we could clarify Section 2 08 of the CLA by adding immediately following "Agreement" the following: "and all related documents (including, but not limited to, attorney fees and costs), the financing of the Project. " Also, add to that section "Such costs shall be payable at closing or thereafter at the City's option." Project Supervision Concerns were expressed regarding the extent of the City's ability to supervise the Project. Possible additions include requiring in Article III of the CLA that the Authority provide quarterly and annual financial statements and copies of all information provided pursuant to SEC Rule 15c2-12. We can include the right to inspect the premises and the books, files and records of the Authority at any time. We could require an annual report from an independent property manager concerning the management and operation of the Project evaluated according to the prevailing customs and practices in the industry. Please let me know the City's preference. Remedies Under the Deed of Trust It should be noted that Articles III and VI, as well as Section 5.2, of the Deed of Trust give extensive enforcement powers to the Beneficiary (the Trustee and the City) subject to the intercreditor preference given to the Trustee under Section 8 10. With separate deeds of trust it Timothy Jensen April 27, 1998 Page 3 may be possible for the City to have more discretion without the Trustee's consent although the underwriter may have some concern here. It may be that Article III can be revised to treat advancement of a loan by the City as an event triggering the availability of all remedies which the City has (usable at the City's option) A subsection (d) could be added as follows "(d) The City may pursue any remedy available to it under the Deed of Trust or this Agreement as if an Event of Default has occurred." I believe that the forgoing addresses the major points we discussed. If I have omitted any thing please let me know I have discussed these issues in general terms with Karen Boyle at Foster Pepper but have not, as yet, provided her with written comments to the Authority's documents addressing them. I have also discussed these issues with Diane Stokke, one of our commercial transaction attorneys she is reviewing the documents and may have additional comments I hope the foregoing is helpful. Please call with any questions. Very truly yours, PRESTON GATES & ELLIS LLP By G„ ua4 W.We.l,00 Forrest W Walls G�`— FWW ja Enclosure cc: John Hanson Ray Paolella Bill Cook Dick Zais k:\25739\00039\FWW\FWW L2002 Additional Comments Accounting. The Authority shall establish accounting procedures and systems and maintain its accounting books and records in a manner satisfactory to the Auditor of the State of Washington and the City Finance Director and shall allow each of them access thereto for audit purposes, Promptly upon the City's request for information (whether oral or written), the Authority shall provide the City with all financial information concerning the Project and all funds and accounts established pursuant to this Agreement. Sale of Project. Any property constituting a part of the Project may not be sold or otherwise encumbered or disposed of by the Authority unless (i) the proceeds thereof (in an amount approved by the City), is deposited in the Bond Fund; and (ii) the Authority receives the express written permission of the City. Deed of Trust. Upon the issuance of the Bonds, the Authority shall execute a Deed of Trust in favor of the City in substantial conformance with Exhibit B hereto, and immediately deliver the Deed of Trust to the City. Refinance. From and after the first date upon which the Bonds may be redeemed at par (other than pursuant to extraordinary redemption), the City may request the Authority to redeem the Bonds if the City reasonably determines that in order to provide funds with which to redeem the Bonds, the Authority is (i) able to issue and sell refunding bonds or to obtain other refinancing, in either case without the unconditional guarantee of the City; and (ii) financially able to pay the debt service on such refunding bonds or other refinancing. If the City makes such request, the Authority shall use its best efforts to obtain a contract for the purchase of such bonds or obtain other refinancing, in either case without the unconditional guarantee of the City, bearing an effective net interest rate that is not more than the effective net interest rate on the Bonds. If the Authority is able to obtain such a bond purchase contract, the Authority shall issue and sell such refunding bonds, shall call the Bonds for redemption and shall pay and redeem the Bonds. insurance. Subject to review and approval by the City, the Authority shall procure and maintain at all times a policy of public liability insurance naming the City as an insured, protecting and holding the City harmless from any and all damages which may arise or are alleged to arise in connection with the services to be provided hereunder, whether or not such damages are alleged to arise or result from acts or omissions which are the sole negligence of the City, its officers, agents and/or employees or the combined negligence of the City and others, in at least the principal amount of a combined single limit of $2,000,000 each occurrence, personal injury and/or property damage. The Authority will insure the Project against loss or theft in the amount of replacement costs of the Project, and shall, include the City as an insured thereunder. The Authority will procure and maintain a policy of business interruption insurance providing for maintenance of income from the Project in the event of loss or damages to it. The City shall be entitled to review and must approve such insurance policies. The terms of any insurance policy required under this section shall provide that the insurer shall notify the City at least thirty (30) days before any reduction or cancellation of insurance. No such insurance shall be reduced or canceled without the City's prior written agreement. Unless the City authorizes a different application of insurance proceeds, such proceeds shall be applied to repair or replace damaged property. City Approval. All decisions of the City hereunder shall be deemed to be made by action of the City Manager. Make Only Economically Sound Improvements. The Authority will not expend any of the Project Revenues or the proceeds of Bonds or other obligations for any extensions, betterments and improvements to the Project or other purposes which will not properly and advantageously contribute to the conduct of the business of the Project. K:125739100039\ FWVVIFWW02010 npini IIC tcr:n OrI oPTIOI I Y TDD 1-(800)545-1833 Ext 560 YAKIMA HOUSING AUTHORITY P.D. Box 2910, Yakima, WA 98907 Operations Offices * 110 South Fair Ave * Yakima,WA 98901 * Voice:(509)453-3106 * Fax: (509)453-3111 April 16, 1998 Mr. Dick Zais Yakima City Manager 129 N. 2nd Street Yakima, WA 98901 Dear Mr. Zais: The Yakima Housing Authority is requesting the City of Yakima to guarantee bonding in the amount of $2.7 million dollars. The sell of bonds is expected to be approximately 52% of the total project development cost of Nueva Primavera. This project consists of 54 units which will provide housing for low and moderate income families - the type of housing so badly needed in the City of Yakima. Several years has lapsed since 1994 when YHA requested, the City staff endorsed, and the City council agreed to provide a loan contingency agreement to secure the credit enhancement needed to protect the funding of this project. Because of the lapse of time due to many delaying factors, the fact that we are now able to go forward brings us once again to request your support of this project by guaranteeing the bonds. Your support to secure the credit enhancement needed to protect the funding of this project recognizes the "partnership" necessary between local housing authorities and the cities in which they exist if we wish to be a serious contender for consideration of state and federal funds. This "partnership" was responsible for the award of $1. million dollars from the Washington State Housing Trust Fund, the largest single award made to the Yakima Valley. The credit enhancement received by this contingent loan agreement entitles YHA to inherit the city's bond rating of "A". This rating is necessary to reduce interest rates on the bonds allowing YHA to maintain rent levels affordable to low and moderate income families. Currently YHA has over 800 families on our waiting list (with an additional 700 families waiting for rental assistance in the private market) with an anticipated assistance of 24 months from date of application. For your information, 1 have attached a narrative concept of the project description as prepared by Mr. Timothy Monahan, Group M Architect, for our agency. Previously this project was submitted to Council, as originally conceptualized, and received Council approval. It is with great hope that the Council will once again give its approval. Sincerely your/s/,, r`tea'-_ Alice Sells E::ecutive Director PRESTON GATES & ELLIS L L P A T T U R\ El 5 April 13, 1998 Timothy Jensen Finance Department City of Yakima 129 North 2nd Street Yakima, WA 98901 Re Nueva Primavera Contingent Loan Agreement Dear Tim As you requested, I have reviewed the form of Contingent Loan Agreement with respect to the Nueva Primavera Project of the Housing Authonty of the City of Yakima ("Authority"), which agreement the Authority has requested the City to execute I have also reviewed other documents prepared by the Authority and its counsel with respect to this project, including the Trust Indenture between the Authonty and U S Bank and the Deed of Trust made by the Authority with the trustee and the City as beneficiaries I have discussed and negotiated with counsel for the Authority regarding these documents and have requested and obtained a number of revisions in them I have also reviewed the statutory and decisional law basis for this transaction Based on such reviet\, I believe that the City is authorized by law to enter into the Contingent Loan Agreement, and that the form and substance of the draft agreement are appropriate to this transaction Some aspects of the transaction such as the term and interest rate applicable to the repayment of a loan by the City to the Authonty are necessarily left to future determination However, the City is given substantial authonty in making such determinations While the form of the documents provide a security interest in the project, in the revenues there from and in other available general revenues for repayment of City loans, the perfection of these security interests will depend on the necessary steps being taken at and prior to the closing of this transaction With your authorization, I will continue to participate in that process Also, while I have reviewed some financial information regarding the project, I have not done a full due diligence investigation of it's economics and express no opinion thereon \ L1\11111) 1 I \HIM 111 P \R1\I RCIIII' IN( I I 01\(, (Mit R 1_1\1111 1) LI 11411 IT E\IITII \ • \I I \I • 11,1\f. k \c, • \\l,I I I . • Ptipii \\II • 11 \1111 • iPloA \\I \\ D C Hill! a\) \I I SI 111 5(H)(7 SI \T1l l \\ \sIII\(DTII\ 981(14.7011; 2O6.621•75$0 F\ 206.621•7022 \\\\\\ p e.I(Ing,lle, com Timothy Jensen April 13, 1998 Page 2 I hope the foregoing is helpful If any questions arise, please call Very truly yours, PRESTON GATES & ELLIS LLP o, 5 W o, By Forrest W. Walls FWW.ja k \25739‘800015FWW1FWW_L200A CERTIFICATE I, the undersigned, City Clerk of the City Council of the City of Yakima, Washington, (the, "City") and keeper of the records of the City Council (the "Council"), DO HEREBY CERTIFY 1 That the attached resolution is a true and correct copy of Resolution No — of the City (the "Resolution"), duly passed at a regular meeting thereof held on the day of April, 1998 2 That such meeting was duly convened and held in all respects in accordance with law, and to the extent required by law, due and proper notice of such meeting was given, that a legal quorum was present throughout the meeting and a legally sufficient number of members of the Council voted in the proper manner for the passage of such Resolution, that all other requirements and proceedings incident to the proper passage of such Resolution have been duly fulfilled, carried out and otherwise observed, and that I am authorized to execute this certificate IN WITNESS WHEREOF, I have hereunto set my hand this day of April, 1998 City Clerk NUEVA PRIMAVERA / YAKIMA, WA 54 TWO- AND THREE-BEDROOM APARTMENTS PLUS FRUITVALE HOUSE AND OFFICE SI !DEVELOPMENT BUDGET NUMBERS FOR CALC ACQUISITION LAND/BUILDING COST ORIGINAL SIZE ADDITIONAL PARKING AREA PURCHASE OFFER LEGAL APPRAISAL TITLE INSURANCE/RECORDING/ESCROW SUBTOTAL 574,000 55.000 629,000 1,000 1,400 3.500 ESTIMATE 634,900 CONSTRUCTION/REPAIRS NEW CONSTRUCTION 16 2 -BED 750 SF 12,000 $45.94 551,280 38 3 -BED 1,041 SF 39,559 $45.94 1,817,295 NEW CONSTRUCTION HARD COSTS SUBTOTAL CONTRACTOR'S OH&P @ 11.0% CONTRACTOR COSTS SUBTOTAL PER SQUARE FOOT AMOUNT $50.99 50% WSST @ 790% TOTAL CONTRACT COSTS CONSTRUCTION CONTINGENCY @ 11 1% TOTAL AVAILABLE FOR CONSTRUCTION PER SQUARE FOOT AMOUNT 858.90 FURNISHINGS & EQUIPMENT MAIN? EQUIPMENT & OFFICE FURNITURE 16,080 A&E FEES ARCHITECTURAL DESIGN FEE 92,500 SOILS 5'000 PRINTING, REIMBURSABLES 2,000 PROJECT MANAGEMENT COMMERCIAL SPACE YHA OFFICE SPACE 6.960 SF 860.00 414,000 CON-IIlrGEt. Y 10% 41,400 SUBTOTAL NEW CONSTRUCTION AND REHABILITATION OTHER SOFT COSTS LIABILITY INSURANCE RENT UP/VACANCY LOSS RENT -LP- MONTHS TO LEASE = OPERATING RESERVE MARKETING SUBTOTAL 2 2,368,575 260,543 2,629,118 103,850 2,732,968 303,796 3,036, 764 16,080 99,500 100.000 455,400 3,707,744 SF COST FROM ARC SF COST FROM ARC INCLUDES GENERAL INCL SITE WORK, OI ALLOWANCE 3.5% FEE A INCL SIZE WORK, GI 12,000 3,750 12,000 28,842 10,000 54,592 INTERIM AND PERMANENT FINANCING COSTS UNDERWI211ER'S DISCOUNT @ ORIGINAL ISSUE DISCOUNT CAPITALIZED INTEREST COST OF ISSUANCE BOND ISSUANCE FEES LEGAL STATE DCIED LOAN FEE @ LENDER APPRAISAL TITLE, RECORDING, ESCROW TRUSTEE LEGAL TRUSTEE ACCEPTANCE TRUSTEE FEE (FIRST YEAR) RATING AGENCY FEE FINANCIAL ADVISOR BOND PRINTING, MISCELLANEOUS SUBTOTAL 2.00% 1% 15,000 10,000 5.000 10,000 2,500 2.500 2,500 6,000 10.000 3,000 51,900 2,595.000) 47,529 173,940 66.500 339,869 FOSTER PEPPER AN v 1,000.0W DEBT SERVICE RESERVE 179,005 TOTAL DEVELOPMENT COSTS 4,916,110 SMA/LEVIIIE AS>C'CIA1ES 0i/03/98 YAKIMA HOUSING AUTHORITY 54 TWO- AND THREE-BEDROOM APARTMENTS PWS FRUITVALE HOUSE AND OFFICE SPACE PROJECT FINANCING SOURCES DEBT FINANCING (SFE DETAIL ro RIG✓ar) GPANI� AHP 300.000 CTHE2 0 EQUIi ( HUD CIAP 650.000 SALE CF LAND 300.000 IrJTERESTEARNINGS (PESFRVESAND FUNDS) 71,110 LOW INCOME HOUSING TAX CREDITS @ 0 0% 0 HISTORIC TAX CREDITS @ 0.0% 0 TOTAL SOURCES OF CAPITAL ' 4,916,110 FINANCING GAP / ADDITIONAL EQUITY REQUIRED ' 0 ,CAP RATE VALUE ©' NCALC UNIT TSF PCT 3.55.000 66,574 61.50 73% 3C0.'_CG0 5,556 CZn, CC0 17,593 5.13 6% 16.25 19% 1,317 1.22 O 0.00 O 0.00 91,039 84.10 1% 0% 0% 100% DEVELOPMENT BUDGET USES LAN: /BUILDING ACQUISITION OTHER ACQUISITION COSTS CONSTRUCTION/REPAIRS PLUS A&E 58,458 TSF FINANCING COSTS 51,558 HSF REPLACEMENT RESERVE OTHER SCFT COSTS OPERATING RESERVE/RENT-UP/MARKETING DEBT SERVICE RESERVE DEVELOPER FEE + PROJECT MANAGEMENT TOTAL DEVELOPMENT COSTS 1TDC PER UNIT/PER TSF COST 126,054 84.70 HTF PER UNIT/PER HSF COST 25,641 19.40 UNIT TSF PCT 629 000 11,648 10.76 5.900 109 0.10 3.607 744 66,810 61.72 339,869 6.294 5.81 0 0 0.00 3.750 69 0.06 50,8412 942 0.87 179 CC5 3,315 3.06 100,CC0 1,852 1.71 4,916,110 91.039 84.10 13% 0% 73% 7% 0% 0% 1% 4% 2% 100% OPERATING BUDGET REVENUES RENTAL INCOME OTHER REVENUE (LAUNDRY, VENDING. LATE CHARGES, ETC.) PARKING OFFICE/COMMERCIAL SPACE INVESTMENT/INTEREST INCOME LESS HOUSING VACANCY LOSS @ 5% LESS PARKING LOSS LESS OFFICE/COMMERCIAL LOSS LESS OTHER REVENUE LOSS TOTAL REVENUES (EFFECTIVE GROSS INCOME) Average Per Unit Monthly Housing Rent Per Square Foot Housing Rent (Gross) EXPENSES MANAGEMENT/ADMINISTRATIVE UTILITIES OPERATING AND MAINTENANCE TAXES AND INSURANCE FINANCIAL RESERVES LEASE PAYMENTS DEBT SERVICE FULLY AMORTIZING LOANS (FIRST YEAR) TOTAL EXPENSES Average Per Unit Annual Operating Expense Per Square Foot Operating Expense 279,252 0 0 40.500 8.950 (13.963) 0 0 0 314,240 597 0.45 37.130 21.500 26.00'0 2.650 2.000 7.800 0 174.861 271,941 2,489 0.44 UNIT HSF PCT 688 0.72 14% 398 0.42 8% 481 0.50 10% 49 0.05 1% 37 0.04 1% 144 0.15 3% O 0.00 0% 3,238 3.39 64% 5,036 5.27 100% SIVIA/CEVRE ASSOCIATES 04/03/'15 FIRST MORTGAGE TAX-EXELIPT LOAN/ECNDS P&I AMORTIZATION PAID CFF ("E 4R) 2029 AMOUNT 774.367 R4TE 360 TERM DEBT COVE.? 2,595,0001 5.40% 3601 1.247 SECOND MORTGAGE AMOUNT 1,000,000 HTF LOAN P&1 0 RATE T.COa' AMORTIZATION DEFERRED TERM 600 CE3T CCL'ER 1.2421 P410 OFF(vE.AR) 2C4o NET OPERATING INCOME (NOI) 1ST YEAR'S CASH FLOW BEFORE ADDITIONAL PAYMENTS ASSET MANAGEMENT FEE ADDITIONAL DEPOSITS TO RESERVES ADDITIONAL PRINCIPAL/INTEREST PAYMENTS CASH FLOW PROFIT (LOSS) $$2000$$ CASH -ON -CASH RETURN 217,160 42.299 0 15,600 0 26,699 NA SCHED INCOME VACANCY EGI EXPENSES NOl DEBT SERVICE DEBT COVER RATIO ASSET MGMT FEE RESERVE CEPCSIT CASH FLOW' OUTSTANDING DEBT Year 1 Year 2 Year 3 328.202 328.602 333.195 (13,963) (13,963) (14,172) 314,240 314,640 319,023 97,080 99.416 101,815 217,160 215.224 217,208 174.861 174.861 174.861 1.24 1.23 1.24 0 0 0 19,503 19,578 19,658 26,699 24,278 25,709 3.569.397 3,541,923 3.512.469 Year 4 337.855 (14.385) 323,470 104,280 219,191 174.861 1.25 Year 5 342582 (14.600) 327,982 106,811 221,170 174,861 1.26 0 0 19,739 19.821 27,073 28,371 3.480.923 3,447,163 ' CURRENT OCCURS SCHED INCOME VACANCY EGI EXPENSES NOI DEBT SERVICE DEBT COVER RATIO ASSET MGMT FEE RESERVE DEPOSIT CASH FLOW' OUTSTANDING DEBT Year 10 367,273 (15, 729) 351,544 120.557 230,987 184,861 1.32 0 20.261 25,543 3.189,441 Year 20 422352 (18.254) 404,098 154,475 249,623 189.861 1 43 0 21.282 30,314 2382557 Year 30 486.018 (21.184) 464,833 199.585 265,249 194,861 1.52 0 22.526 30,852 932.621 Year 40 550,671 (24,585) 526,086 260,167 265,919 51,682 5.15 Year 50 635,779 (28,532) 607,247 342.326 264,921 61.682 5.13 0 0 24,043 25,891 87,141 71,108 489,491 0 • CuRAErrr ooctARS NUEVA PRIMAVERA / YAKIMA, WA 38 TWO- AND THREE-BEDROOM APARTMENTS PLUS FRUITVALE HOUSE AND OFFICE SPACE IOPERATING BUDGET (FIRST YEAR) AAF/ INFL 2000 NOTES SIVI4;15VINE /.SSOCIA1CS Un/UJ':P REVENUE RENTAL INCOME SUBTOTAL RESIDENTIAL (TENANT RENIS & ANY SUBSIDIES) 1.5% 279.252 AVERAGE MONTHLY RENT $597 COMMERCIAL 1.0% 40,000 OFFICE SPACE SUBTOTAL RENTAL INCOME 319,252 VACANCIES APARTMENTS @ 5.00% (13,963) SUBTOTAL VACANCIES (13,963) FINANCIAL REVENUE INVEST INCOME - DEBT SERVICE RESERVE 8.950 RESERVE FOR LOAN #1 @ 5.00% 8,950 SUBTOTAL FINANCIAL REVENUE 8,950 OTHER REVENUE LAUNDRY AND VENDING 1.5% 0 SUBTOTAL OTHER REVENUE 0 328,202 SCHEDULED GROSS INCOME VACANCY LOSS (13,963) EFFECTIVE GROSS INCOME 314,240 PUMA EXPENSES ADMINISTRATIVE ADVERTISING 2% 750 19 MANAGEMENT FEE PCT EGI = 5.0% PUPM = 534 2% 15,590 400 MANAGER SALARY 2% 12,000 308 RENT FREE UNIT(S) = 1 @ 595 2% 7,140 183 LEGAL 2% 900 23 TELEPHONE. COP PING, SUPPLIES 2% 750 19 SUBTOTAL ADMINISTRATIVE 37,130 UTILITIES ALL UTILITIES 4% 21.500 551 SUBTOTAL UTILITIES 21,500 OPERA1ING & MAINTENANCE REPAIRS. JANITORIAL GROUNDS 2% 26,000 667 SUBTOTAL OPERATING AND MAINTENANCE 26,000 TAXES AND INSURANCE PROPERTY AND LIABILITY 2% 2,650 68 SUBTOTAL TAXES AND INSURANCE 2,650 FINANCIAL EXPENSES MISC FINANCIAL EXPENSES 2,000 51 TRUSTEE FEE 2,000 2% SUBTOTAL FINANCIAL EXPENSES 2,000 RESERVES REPLACEMENT RESERVE 2% 3,900 58 PUM 100 OPERATING RESERVE 2% 3,900 100 SUBTOTAL RESERVES 7,800 TOTAL EXPENSES NET MORTGAGE INTEREST 97,080 PER UNIT PER YEAR EXPENSES NET MORTGAGE INTEREST 2,489 NET OPERATING INCOME 217,160 DEBT SERVICE '174,861 DEBT COVER = 124.19% FIRST YEAR CASH FLOW BEFORE ADDITIONAL PAYMENTS 42,299 ADDITIONAL P+I PAYMENTS AND DEPOSITS TO RESERVES 15,600 FIRST YEAR CASH FLOW PROFIT (LOSS) NET RESERVES + PAYMENTS 26,699 SIVI4;15VINE /.SSOCIA1CS Un/UJ':P ( NUEVA PRIMAVERA / YAKIMA, WA PROJECT RENT SCHEDULE EL Z NUMBER OF UNITS W Q N W Z Z " c Z < Z W i7)D 03 03 (1) UTILITY ALLOWANCE OR COST TOTAL HOUSING COST) HOUSEHOLD SIZE TARGETED MAX INCOME ADJUSTED FOR HOUSEHOLD SIZE TENANT SHARE RENT/INCOME RENT + UTILITIES/ INCOME MONTHLY SUBTOTAL ANNUAL SUBTOTAL 2 -BED 30% Median Income 16 0 245 PUBLIC HOUSING 35 280 4 11,200 26.3% 30 0% 0 0 664 450 HAP SECTION 8 54 504 5 20,150 26.8% 30.0% 5,976 71,712 . 3 -BED 31-50% Median Income 09 3 -BED 31-50% Median Income 08 420 420 NONE 54 474 5 20,150 25.0% 28.2% 3,360 40,320 3 -BED 51-80% Median Income 21 625 625 NONE 625 5 32,250 23.3% 23.3% 13,125 157,500 4 -BEG (FRUITVALE HOUSE) 81%-100%+ Median Income 01 \ 810 810 NONE 810 8 48,600 20.0% 20.0% 810 9,720 NUMBER OF NON -HUD UNITS MONTHLY GROSS RENT SCHEDULED GROSS RENT .. ,_... ..,,W ( TOTAL NUMBER OF UNITS = 55 ) 39 23,271 279,252 596.69 c SNI. 'LEVINE ASSOCIATES 04/03/98 NUEVA PRIMAVERA / YAKIMA, WA 50 -YEAR CASH FLOW PROJECTION DEBT SERVICE 91 TAX-EXEMPT LOAN/BONDS DEBT COVERAGE DEBT SERVICE 92 HTF LOAN DEBT COVERAGE (REGULAR PAYMENTS DEFERRED 30 YEARS) CASH FLOW BEFORE ADDITIONAL PAYMENTS AVAILABLE FOR ADDITIONAL RESERVES + PRINCIPAL 9MIS ADDITIONAL RESERVES (GOAL - 15.600 /YR) ADDITIONAL 9.1 PAYMENT LOAN 92 DE8717 BALANCE DEBT 92 BALANCE CASH FLOW PROFIT (L055) 520005 1/wntvHt ASSOC TS 0.41/04 174.861 124 0 124 42,299 12,299 15.600 0 2,559,397 1.070,000 26.699 26,699 174,861 1.23 174.861 174.861 1.24 1.25 0 0 0 1.23 1.24 1.25 40,363 42,347 4,330 40,363 42.347 44.330 15,600 15,600 15,600 0 0 0 2,521,873 1,020,100 24,763 24,278 2,482,168 1,030.301 26.747 25,709 2,440.319 1.040.604 28.730 27,073 174,861 1.26 0 126 46,310 46,310 15,600 0 2.396,153 1.051,010 30,710 28,371 174,841 174,861 1.28 1.29 174,861 174,861 1.30 1.31 0 0 0 0 1.28 1.29 1.30 1.31 48.286 48.286 15,600 10,000 2.349.542 1,051,520 22.686 20.547 50.257 50.257 15,600 10,000 2.300.351 1,052.035 24,657 21,894 52,221 52.221 15,600 10,000 2.248,437 1.052.556 26,621 23.175 54.178 54,178 15,600 10,000 2.193.649 1.053,081 28,578 24,391 174,861 1.32 0 1.32 56,127 56,127 15.600 10.000 2,135.829 1.053,612 30,527 25.543 174,861 1.33 174,861 174.861 174,861 1.34 1.35 1.36 0 0 0 0 1.33 1.34 1.35 1.36 58,065 58.065 15.600 10.000 2.074.807 1.054,148 32.465 26.632 59,990 59,990 15,600 10,000 2.010.407 1,054,690 34,390 27.659 61,903 61.903 15.600 10,000 1,94243 1,055237 36.303 28.625 63,800 63.800 15,600 10,000 1,870,716 1,055.789 38.200 29,530 174,861 1.33 0 1.38 65,681 65481 15,600 10,000 1,795,019 1,056.347 40,081 30.376 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 REVENUE 17191. REQ ITA( INCOME SUBTCTAI r,E:CENTIAL TENANT GE:7r3 as ANY SUBOIC!ES) 1 5% 279,252 279 252 293 441 287 692 292.008 296.388 300 834 305 346 309.026 314575 319.294 324.083 329.045 333.379 338.987 AVERAGE MONTHLY RENT 507 597 606 615 624 633 643 652 662 672 682 692 70.3 773 724 CCMMEOCtAI 1.0% 40.000 40,400 .70.894 41 212 41.624 42.040 42.461 42,995 43.374 43.747 44,795 44.627 45.073 45.524 45,979 SUBTOTAL RENTAL INCOME 319,252 319,652 324 245 322,904 333.632 338.428 343,1195 348,232 353.241 358,323 363,179 368,710 374,018 379,402 384,866 VACANC:ES APAPTMENTS4 5C0% (13.963) (13.963) (74.772) (14 .285) (14.600) (14.8101 (15.042) (15.267) (15.496) (15.729) (15.965) (16.204) (16.447) (16.694) (16.944) SUBTOTALVACANCIES (13.963) (13,963) (14,172) (14.385) (14,600) (14819) (15.042) (15,267) (15.496) (15.729) (15,965) (16.204) (16,447) (16.694) (16.944) FINANCIAL REVENUE !NV E3T INCOME 0(51 SERVICE RESE71VE 8.950 8,9E0 8 980 8 080 8.950 8.950 8.950 8.950 8.950 8.950 8.950 8.050 8.050 8.950 8.950 SUBTOTAL FINANCIAL REVENUE 8,950 8,950 8.950 8.950 8.950 8.950 8.950 8,950 8,950 8,950 8.950 8.950 8,950 8.950 8.950 OTHER REVENUE LAIR:DP'? AND VENDING 1.5% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 SUBTOTAL OTHER REVENUE 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 SCHEDULED GROSS INCOME 328.202 328,602 333.195 337.855 342,582 347.379 352.245 357,182 362.191 367,273 372,429 377,660 382,968 388,353 393,816 VACANCY 1053 (13,963) (13,963) (14,172) (14.385) (14,600) (14.819) (15,042) (10,267) (15,496) (15,729) (15,965) (16,204) (16.447) (16,694) (16,94) EFFECTIVE GROSS INCOME 314240 314,640 319,023 323.470 327,982 332.559 337,203 341,915 346.695 351.544 356,464 361,456 366,521 371,659 376,872 EXPENSES UTIUr" COSTS INCPEASE 4%. OTHER CCSS 25 SUBTOTAL ADMINISTRA17VE 37.130 37.537 38,557 39291 40,040 40.803 41,581 42,373 43.181 44,004 44,844 45.699 46.571 47,460 48.366 SUBTOTAL UTILITIES 21.507 12,360 23.254 24.185 25.152 26.158 27.204 28,293 19424 30.601 31.825 33.098 34,422 35,799 37.231 SUBTOTAL OPERATING AND MAINTENANCE 26,000 26,520 27,050 27.591 28,143 28,706 29.280 29,866 30.463 31,072 31,694 32,328 32,974 33.634 34.306 SUBTOTAL TAXES AND INSURANCE 2,650 2703 2.757 2.812 2,868 2,926 2984 3,044 3.105 3.167 3.230 3.295 3,361 3,428 3.497 SUBTOTAL FINANCIAL EXPENSES 2,000 2,040 2.081 2.122 2165 2.208 2,252 Z297 2343 2.390 2.438 2.447 2,536 2,587 2639 SUBTOTAL RESERVES 7,800 7,956 8115 8,277 8,443 8,612 8,784 8,960 9,139 9.322 9,508 9,698 9.892 10.090 10.292 TOTAL EXPENSES NET MORTGAGE INTEREST 97,080 99,416 101,815 104,280 106,811 109,413 112,086 114,833 117,655 120,557 123.539 126,605 129,757 132,998 136.331 PER UNIT PER YEAR EXPENSES NET MORTGAGE INTEREST 2.489 2,549 2.611 2,674 2.739 2,805 2,874 2,944 3,017 1091 3,168 3.216 3,327 3,410 3.496 NET OPERATING INCOME 217,160 215,224 217.208 219.191 221,170 223,146 225,117 227,082 229.039 _ 230,987 232.925 234,851 236.764 228.661 240,541 LAND/BUILDING ACQUISITION 634,900 TOTAL DEVELOPMENT COSTS 4,976,110 CONSTRUCTION/REPAIRS 3,607,744 FIRST MORTGAGE SECOND MORTGAGE AMOUNT FINANCED 3,595,000 SOFT COSTS/LEASE-UP/PROJECT MGMT/DEVELOPER FEE 154.592 AMOUNT 2,595,000 AMOUNT 1,000,000 GRANTS 300,000 FINANCING COSTS 339.869 RATE 5.403. RATE 1.007. EQUITY 950.000 DEBT SERVICE RESERVE 179,005 AMORT 360 AMORT DEFERRED INTEREST EARNINGS CN BOND FUNDS ANO RESERVES 71,110 REPLACEMENT RESERVE 0 TERM 360 TERM 600 ADDITIONAL BONO PROCEEDS 764 TOTAL DEVELOPMENT COSTS 4,916,110 Ph1 174,861 Ph1 0 TDC PER UNIT/PFR TSF COST 126,054 84.10 PAID OFF 2029 PAID OFF 2049 HTF PER UNIT/PER 145F COST 25 647 19 40 DEBT SERVICE 91 TAX-EXEMPT LOAN/BONDS DEBT COVERAGE DEBT SERVICE 92 HTF LOAN DEBT COVERAGE (REGULAR PAYMENTS DEFERRED 30 YEARS) CASH FLOW BEFORE ADDITIONAL PAYMENTS AVAILABLE FOR ADDITIONAL RESERVES + PRINCIPAL 9MIS ADDITIONAL RESERVES (GOAL - 15.600 /YR) ADDITIONAL 9.1 PAYMENT LOAN 92 DE8717 BALANCE DEBT 92 BALANCE CASH FLOW PROFIT (L055) 520005 1/wntvHt ASSOC TS 0.41/04 174.861 124 0 124 42,299 12,299 15.600 0 2,559,397 1.070,000 26.699 26,699 174,861 1.23 174.861 174.861 1.24 1.25 0 0 0 1.23 1.24 1.25 40,363 42,347 4,330 40,363 42.347 44.330 15,600 15,600 15,600 0 0 0 2,521,873 1,020,100 24,763 24,278 2,482,168 1,030.301 26.747 25,709 2,440.319 1.040.604 28.730 27,073 174,861 1.26 0 126 46,310 46,310 15,600 0 2.396,153 1.051,010 30,710 28,371 174,841 174,861 1.28 1.29 174,861 174,861 1.30 1.31 0 0 0 0 1.28 1.29 1.30 1.31 48.286 48.286 15,600 10,000 2.349.542 1,051,520 22.686 20.547 50.257 50.257 15,600 10,000 2.300.351 1,052.035 24,657 21,894 52,221 52.221 15,600 10,000 2.248,437 1.052.556 26,621 23.175 54.178 54,178 15,600 10,000 2.193.649 1.053,081 28,578 24,391 174,861 1.32 0 1.32 56,127 56,127 15.600 10.000 2,135.829 1.053,612 30,527 25.543 174,861 1.33 174,861 174.861 174,861 1.34 1.35 1.36 0 0 0 0 1.33 1.34 1.35 1.36 58,065 58.065 15.600 10.000 2.074.807 1.054,148 32.465 26.632 59,990 59,990 15,600 10,000 2.010.407 1,054,690 34,390 27.659 61,903 61.903 15.600 10,000 1,94243 1,055237 36.303 28.625 63,800 63.800 15,600 10,000 1,870,716 1,055.789 38.200 29,530 174,861 1.33 0 1.38 65,681 65481 15,600 10,000 1,795,019 1,056.347 40,081 30.376 NUEVA PRIMAVERA / YAKIMA, WA 50 -YEAR CASH FLOW PROJECTION 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 333.970 349 130 354,267 359.5.92 365.077 370.354 376.112 381 754 387 48.0 393.72 399 192 405.179 411,257 417 426 735 746 757 769 780 792 804 816 828 840 85J 866 879 892 46.439 46.903 47.372 47.846 48.324 45 808 49.296 49 789 50.257 50.759 51.297 51.810 52.328 52-852 390,409 396,033 401.739 407,528 413,402 419,361 425,408 4.31,542 437,766 444,082 450.489 456.990 463.585 470.278 (17 199) (17,199) (17 456) (17,456) (17.718) (17 984) (18.254) (18 529) ('5.806) (19.088) (19.374) (19.565) (19 960) (770.259) (20.563) (20.871) (17,718) (17.984) (18.254) (18,528) (18,806) (19,088) (19,37 a) (19,665) (19.960) (20,259) (20.563) (20.871) 8.950 8.950 8,950 8.950 8.950 8.950 8.950 8.950 8.950 8.950 8.950 8.950 8.950 8.950 8,950 0 0 8,950 8.950 0 0 0 0 8.950 8,950 0 0 0 0 8,950 8.950 8,950 8.950 8.950 8.950 8.950 8,950 8,950 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2029 423.687 905 53.380 477,067 (21,184) (21.184) 8.950 8,950 0 0 2034 456.432 975 56.103 512,535 (22822) (22.822) 0 0 0 0 2039 491.706 1,051 58.965 550,671 (24585) (24585) 0 0 0 0 2044 529 707 1,132 61.973 591,680 (26.485 (26.485 0 0 0 0 2049 570.645 1.219 65,134 635,779 (28.532) (28.532) 0 0 0 0 399,359 404.983 410,689 416.478 422.352 428.312 434.358 440.493 446.717 453.032 459 439 465.940 472,536 479.228 486,018 512,535 550,671 591680 635,779 (17,199) (17,456) (17,718) (17,984) (18.254) (18,528) (18,806) (79,088) (19,374) (19,665) (19.960) (20.259) (20.563) (20,871) (21.184 (22.822) (24.585) 06,485) (28,532) 382.161 387,527 392,971 398.494 404.098 409.784 415,552 421,405 427,343 433.367 439,479 445,661 451,973 458,357 464,833 489,713 526.086 565,195 607.217 49,289 50.230 51,189 52.167 53,164 54,180 55,215 56.271 57,347 58.41.3 59.561 60,701 61,862 63,046 38,720 40.269 41,880 43.555 45.297 47,100 48.994 50,953 52991 55.111 57,315 59,608 61,992 64.472 34,993 35.692 36,406 37,134 37,877 38,635 39,407 40.195 40999 41,819 42.656 43,509 44,379 45.267 3,567 3,636 3,711 3,785 3.661 3.938 4,017 4.097 4,179 4252 4.348 4,435 4,523 4,614 2692 2746 2800 2856 2914 2.972 3,031 3,092 3,154 3.217 3.281 3,347 3.414 3,482 10,498 10.708 10.922 11,140 11,363 11,590 11.822 12,059 12.300 12.546 12,797 13,053 13,314 73,580 64253 67,051 46,172 4,706 .1552 13.852 70,645 81.578 50,978 5,196 3,927 15,293 77.687 99,252 56,283 5,737 4,329 14885 85.424 720,755 62,147 6.334 4780 18,642 93.947 146.917 68.609 4993 5.278 20.583 139.758 3,564 242.403 143,283 3,674 244,244 146,908 3,767 246.062 150,638 3,863 247,856 154,475 158,424 162,486 166,667 170,970 175,399 179.958 184,652 189.484 194,460 199,585 3,961 4,062 4,166 4,274 4384 4,497 4614 4,735 4,859 4.986 5,118 249,623 251.360 253,066 254,738 256.373 257 968 259.522 261,029 262,489 263,896 265,249 227,611 5,836 262.102 260,167 6.671 265.919 298.077 7,643 267,118 342,326 8.778 264,921 174,861 174.861 174,861 174,861 174,867 174.861 174,861 174.861 174.861 174.361 174.861 174,861 174,861 174.861 1.39 1 40 1 41 1.42 1 43 1.44 1 45 1.46 1 47 1 48 7.48 1.49 1.50 1.51 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1.39 1.40 1.41 1,42 143 1 44 1.45 1 46 1.47 1.48 1 48 1 49 1.50 1.51 67,542 67.542 15.600 15.000 1,715,131 1,051,910 36,942 27,449 69,353 69.383 15,600 15.000 1,630.821 1,047,429 38.783 28,252 71,202 71.202 15.600 15.000 1.541,844 1,042,904 40,602 28,996 72.995 72,995 15,600 15.000 1,47,942 1.038,333 42.395 29.683 74,762 74,762 15.600 15,000 1,348.841 1,033,716 4,162 30.314 76.500 76,500 15.600 20.000 1.244 254 1,024.053 40.900 27.524 78,205 78.205 15.600 20.000 1,133.878 1.014.294 42.605 28.110 79,877 79,877 15,600 20,000 1.017.392 1.004437 44,277 28.640 81,512 81,512 15,600 20,000 894,457 994,481 45,912 29.116 83.108 83,108 15,600 20.000 764.718 984,426 47.508 29,537 84,661 84661 15,600 20,000 627,796 974270 49.061 29.904 86.169 86,169 15.600 20.000 463,294 964,013 50.569 30.219 87,628 87,628 15,600 20,000 330,794 953.653 52.028 30.481 89,036 89,036 15.600 20,000 169,852 943,189 53,436 30,692 174,861 1.52 0 152 90,388 90.388 15.600 20,000 0 932,621 54788 30,852 0 0.00 51,682 5.07 210.420 210,420 15,600 0 0 716,567 184.820 94.264 0 0.00 51.682 5.15 214,237 214,237 15,600 0 0 489,491 188,637 87.141 0 0.00 51.682 5.17 215,437 215,437 15,600 0 0 250.833 189.837 79.428 0 0.00 51,682 5.13 213.240 213.240 15,600 10,000 0 0 187.640 71,108 V Atv.4 aauoa 1998 YAKIMA MSA MEDIAN INCOME (1m77-/ 30% AND 27% OF INCOME FOR RENT CALCULATIONS) FAMILY SIZE 1 2 3 4 5 6 7 8 FAMILY SIZE 2 3 4 5 6 7 8 (Calculations Based on HUD Methodology; 60% Rents Based on Tax -Credit and Home Program Methodology) 100% MEDIAN INCOME ANNUAL MO 30% 27% 95% MEDIAN INCOME (BMIR) ANNUAL MO 30% 27% 80% MEDIAN INCOME ANNUAL MO 30% 27% 1,305 644 579 24,550 2,046 614 552 20,900 1,742 523 470 25,750 2,146 29,450 2,454 736 663 28,050 2,338 701 631 23,850 1,988 596 537 33,100 2,758 828 745 31,550 2,629 789 710 26.850 2,238 671 604 36,800 3,067 920 828 35,050 2,921 876 789 29,850 2,488 746 672 39,750 3,313 994 894 37,850 3,154 946 852 32,250 2.688 806 726 42,700 3,558 1,068 961 40,650 3,388 1,016 915 34,600 2,883 865 779 45,650 - 3,804 1,141 1,027 43,450 3,621 1,086 978 37,000 3,083 925 833 48,600 4,050 1,215 1,094 46,300 3,858 1,158 1,042 39,400 3,283 985 887 70% MEDIAN INCOME 65% MEDIAN INCOME ANNUAL MO 30% 27% ANNUAL MO 30% 27% 18,300 1,525 458 412 16,950 1,413 424 381 20,900 1,742 523 470 19,400 1,617 485 437 23,500 1,958 588 529 21,800 1,817 545 491 26,100 2,175 653 587 24,250 2,021 606 546 28,200 2,350 705 635 26,200 2,183 655 590 30,300 2,525 758 682 28,100 2,342 703 632 32,400 2,700 810 729 30,050 2,504 751 676 34,450 2,871 861 775 32.000 2,667 800 72 75% MEDIAN INCOME ANNUAL MO 30% 27% 19,600 1,633 490 441 22,400 1,867 560 504 25,200 2,100 630 567 28,000 2,333 700 630 30.200 2,517 755 680 32,450 2,704 811 730 34,700 2,892 868 781 36,950 3,079 924 831 60% MEDIAN INCOME ANNUAL MO 30% 0 27% 50% MEDIAN INCOME ANNUAL MO 30% 27% 15,660 1,305 392 352 13,050 1,088 326 294 17,880 1,490 447 402 14,900 1,242 373 335 ' 20,160 1,680 504 454 16,800 1,400 420 378 22,380 1,865 559 504 18,650 1,554 466 420 24,180 2,015 604 544 20,150 1,679 504 453 25,980 2,165 649 585 21,650 1,804 541 487 27,780 2,315 694 625 23,150 1,929 579 521 29,520 2,460 738 664 24,600 2,050 615 554 FAMILY SIZE 45% MEDIAN INCOME ANNUAL MO 30% 27% 40% MEDIAN INCOME ANNUAL MO 30% 27% 35% MEDIAN INCOME ANNUAL MO 30% 27% 30% MEDIAN INCOME ANNUAL MO 30% 27% 177 1 2 3 4 5 6 7 8 11,750 13,450 15,100 16,800 18,150 19,450 20,800 22,150 9 /9 1,121 1,258 1,400 1,513 1,621 1,733 1,846 294 336 378 420 454 486 520 554 264 303 340 378 408 438 468 498 10,450 11,950 13,450 14,900 16,100 17,300 18,500 19,700 871 996 1,121 1,242 1,342 1,442 1,542 1,642 261 299 336 373 403 433 463 493 235 269 303 335 362 389 416 443 9,150 10.450 11,750 13,050 14,100 15,150 16,200 17,250 76.3 871 979 1,088 1,175 1,263 1,350 1,438 229 261 294 326 353 379 405 431 206 235 264 294 317 341 365 388 7,850 8,950 10,050 11,200 12,100 13,000 13,900 14,750 654 746 838 933 1,008 1,083 1,158 1,229 196 224 251 280 303 325' 348 369 201 226 252 272 293 313 332 US DEPARTMENT OF HUD FY 1998 INCOME LIMITS FER PDR 98-02. EFFECTIVE JANUARY 7. 1998; CALL HUD USER HOTLINE FOR NUMBERS FOR OTHER PMSAs. MSAs AND COUNTIES (1-800-245.2691); CALCULATIONS OTHER THAN 50% AND 80% MEDIAN INCOME BY MIKE SIVIA (206) 443-4457 PURSUANT TO HUD INSTRUCTIONS NOTE THAT LOCAL MEDIAN INCOME IS LESS THAN STATE MEDIAN INCOME SO BMIR AND 80% AND LESS NUMBERS ADJUSTED PER STATE NONMETROPOUTAN MEDIAN INCOME Yakima Housing Authority Nueva Primavera Project 810 N 6th Avenue 0 Scale -1 in = 200ft 100 200 City of Yakima, Washington May 13, 1998 Yakima Housing Authority Draft of 5/12/98 Changes from previous draft are blacklined CONTINGENT LOAN AGREEMENT THIS CONTINGENT LOAN AGREEMENT (this "Agreement") dated as of , 1998, by and between the CITY OF YAKIMA, WASHINGTON (the "City"), and the HOUSING AUTHORITY OF THE CITY OF YAIUMA, a public body corporate and politic of the State of Washington (the "Authority"); WITNESSETH: WHEREAS, Revised Code of Washington ("RCW") Section 35.83.050 provides that a city may lend or donate money to a housing authority or agree to take such action; and WHEREAS, the Authority, by its Resolution No. , adopted , 1998, authorized the issuance of the Authority's revenue bonds (the "Bonds") in the aggregate principal amount of not to exceed $34)00,0002,700,000 for the purpose of providing part of the funds with which to finance the construction of a 54 -unit apartment complex to be known as the Nueva Primavera Apartments (the "Project"); and WHEREAS, BancAmerica Robertson Stephens, as underwriter for the Bonds, has requested additional assurances that the principal of and interest on the Bonds will be paid when due; and WHEREAS, the City has declared its intent to enter into a contingent loan agreement with the Authority to evidence the City's commitment to make loans to the Authority if and to the extent necessary to replenish the Reserve Account maintained by the trustee for the Bonds and to make up any deficiencies in the amounts provided by the Authority to make payments of the principal of and interest on the Bonds when due, and approved the form and execution of this Agreement; NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the parties hereto covenant and agree as follows. ARTICLE I Incorporation of Documents; Definitions Section 1.01. Incorporation of Documents. Copies of the Trust Indenture (including any amendments or supplements thereto, the "Indenture") dated as of , 1998, between the Authority and U.S. Bank Trust National Association, as Trustee, relating to the Bonds, and the Deed of Trust (as defined herein) are attached hereto as Exhibits A and B, respectively. The Authority shall not amend the Indentureor the Deed of Trust without the prior j written consent of the City so long as this Agreement is in effect. Section 1.02. Definitions. Unless the context clearly requires otherwise, the following terms shall have the respective meanings set forth below for all purposes of this Agreement. Deed of Trust means the Deed of Trust, Assignment of Rents and Leases and Security Agreement under which the Authority is the Grantor and the City is the Beneficiary, relating to the Project. than Project the Authority from General Revenues means air revenues (other Revenues) of •__� • ��_•-�-•-� any source, but only to the extent that those revenues are available to pay debt service on the Bonds and are not pledged, by law, regulation, contract, covenant, resolution, deed of trust or otherwise, solely to another particular purpose. Indenture means the Trust Indenture between the Housing Authority of the City of Yakima -and- , as -the Trustee, dated , relating to the Project. Investment Earnings means all earnings derived from the investment of money held in any of the Funds held by the TrustPe under the Indenture. Net Revenues means Project Revenues less Operation and Maintenance Costs and Trustee fees and expenses, if any. Operation and Maintenance Costs means all necessary costs to the Authority of operating and maintaining the Project, including but not limited to administrative and general expenses, costs of insurance (including reasonable contributions for self-insurance reserves, if any), consulting technical services and repairs and replacements (to the extent not properly classifiable as capital costs) and reasonable reserves therefor, but excluding depreciation (or reserves therefor), amortization of intangibles or other bookkeeping entries of a similar nature and debt service on the Bonds or any other obligations of the Authority relating to the Project. Project Revenues means all amounts due to or received by the Authority or by the Trustee for the account of the Authority pursuant or with respect to the Project, including without limitation all lease payments, Insurance Proceeds, Condemnation Awards, and proceeds resulting from foreclosure of the Deed of Trust, and all Investment Earnings. -2- Refunding Bonds means any bonds issued to refund the Bonds, but only if the required debt service on those bonds does not exceed the Required Debt Service on the Bonds in any year and if the maturity of those bonds does not extend beyond the maturity of the Bonds. Required Debt Service means, for any Fiscal Year, with respect to the Bonds, the amount required to make scheduled payments of principal of (including mandatory redemption payments with respect to term bonds) and interest on the Bonds in that Fiscal Year. Reserve Account means the Reserve Account established by the Indenture. Reserve Requirement means, with respect to the Bonds, $ [maximum annual debt service on the Bonds, estimated not to exceed $188,648], subject to reduction at the times and in the manner described in the Indenture. Trustee means the entity serving as trustee under the Indenture, initially U.S. Bank Trust National Association, a national banking association organized and existing under the laws of the United States of America and having a place of business in Seattle, Washington, or its successor, as trustee under the Indenture. All other capitalized terms used but not defined in this Agreement shall have the meanings assigned to them in the Indenture. ARTICLE II Loans to the Authority; Repayment Terms; Interest Rate; Limitation of Liability Section 2.01. Loans to the Authority. The City agrees to lend to the Authority the principal amount equal to (1) the amount sufficient, together with Net Revenues deposited with the Trustee, to replenish the Reserve Account maintained by the Trustee pursuant to the Indenture to the Reserve Requirement for the Bonds, and (2) upon an extraordinary mandatory redemption of the Bonds pursuant to paragraphs (a) or (c) of Section 3.2(3) of the Indenture, the amount sufficient, together with Net Revenues and other money available therefore, including money in the Reserve Account, on deposit with the Trustee, to pay the principal of and interest on the Bonds when due. The Authority agrees to borrow the amounts described above from the City pursuant to this Agreement for the purpose of meeting its obligations under the Bonds and the Indenture. The total amount of funds to be lent by the City pursuant to this Agreement shall not exceed the principal amount of the Bonds plus interest due and unpaid by the Authority. -3- Section 2.02. Time of Loan. The loan shall be made at such time or times, if any; as the of lack sufficient Reven es and General Revenues. to Authority is unable, uci,aiisc ta�,.l. of Ju11141�ai1 Net .�.-.-------- ^--- - - replenish the Reserve Account to the Reserve Requirement for the Bonds or if the money available under the Indenture to the Trustee is insufficient to pay the principal of and interest on The loan may made series principal advances the Bonds when due. � ��� be in a series of r.... --r»- �- � Section 2.03. Repayment Terms. The loan shall be repaid on reasonable terms established by the City at such time as funds are advanced. Such terms shall require the repayment of principal of such advance and interest thereon from the first available Net Revenues in excess of the amounts needed to pay the interest and principal payments then due under the Bonds or from the Authority's General Revenues. Section 2.04. Interest Rate. The rate of interest borne by each advance hereunder shall be the rate that represents the documented actual cost •(including opportunity cost) to the City of making the loan to the Authority (as determined by the City), but in no event shall the rate of interest on any loan hereunder exceed 12 % per annum. The City may in its discretion charge a lower rate of interest. Section 2.05. Procedures. The Authority, or the Trustee on behalf of the Authority, shall, within two Business Days of any withdrawals from the Reserve Account, give written notice to the City of such withdrawals, which notice shall state the amount, if any, required to restore the Reserve Account to the Reserve Requirement for the Bonds. By [April 15] of the following year the City shall deliver to the Trustee for deposit into the Reserve Account the greater of one-half of the amount(s) specified (to the extent not previously replenished by the Authority from the sources identified in the Indenture) or the amount, together with other funds held by the Trustee under the Indenture for the purpose, required to pay debt service on the Bonds on the following [May 1], and shall deliver to the Trustee no later than the following [October 15] the greater of the balance of the amount(s) so specified (to the extent not previously replenished by the Authority from the sources identified in the Indenture) or the amount, together with other funds held by the Trustee under the Indenture for the purpose, required to pay debt service on the Bonds on the following [November 1]. The Authority also shall provide, with or prior to the submission to the City of the notice requesting funds, an accounting of its operation of the Project, including cash flow projections and a loan repayment plan. Such accounting shall review all funds or other resources of the Authority legally available to fund the Reserve Account. The Authority shall be obligated to apply all legally available funds or other resources, and the Authority shall certify that all legally available funds or other resources have been previously applied, to meet the Reserve Account Requirements. Pursuant to the Indenture, the Trustee shall notify the City in writing of the amount(s), if any, required to be delivered to the Trustee by the City on each [April 15] and [October 15]. -4- Section 2.06. Nature of Authority's Obligation. The obligation of the Authority to make the loan payments 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 Authority's obligations under this Agreement shall continue in effect and shall survive the satisfaction of the Authority's obligations under the Bonds, the Indenture and the Deed of Trust until such time as principal and interest due to the City pursuant to any loan or loans made hereunder have been repaid, together with any costs owed to the City pursuant to Sections 2.08 and 4.05. Section 2.07. Nature of City's Obligation. The obligation of the City to advance funds to the Trustee on behalf of the Authority in the amounts, at the times and in the manner described 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 City are pledged irrevocably for the payment to the Trustee, on behalf of the Authority, of the amounts described herein. The City agrees that it will include in its budget, for each fiscal year following the receipt by the City of notice under Section 2.05 that a deposit to the Reserve Account is required, an amount equal to the deficiency in the Reserve Account to be made up by the City pursuant to this Agreement. The obligations of the City hereunder shall terminate upon payment in full of the principal of and interest on all outstanding Bonds. Section 2.08. Payment of City's Costs. Upon request by the City, the Authority shall reimburse the City for all out-of-pocket costs incurred by the City (including, but not limited to , attorneys fees and costs) in connection with the preparation, drafting, negotiation and administration of this Agreement, the financing of the Project and any loans made by the City to the Authority hereunder. Such costs shall be payable at closing or thereafter at the City's option. ARTICLE III Rights of City Upon Making Loans Section 3.01 If the City has made any loan to the Authority under this Agreement (whether or not the loan is in default), the City may take any one or more of the following steps: (a) The City may require that the Trustee call the Bonds for redemption in accordance with Section 3.2(3) of the Indenture; (b) The City may, but shall not be required to, appoint a manager (which may be the City) or a receiver for the Project. -5- (c) The City may pursue any remedy provided to it under the Deed of Trust as if an event of default has occurred thereunder or hereunder; provided that if the Deed of Trust is foreclosed, the City shall first assume all liability for payment of the principal of and interest on the Bonds when due and shall have pledged its full faith and credit to such payment. Any manager or receiver appointed pursuant to paragraph (b) above shall have, in addition to all the rights and powers customarily given to and exercised by managers or receivers, the right and authority to enter upon and take and maintain full control of the Project in order to perform all acts necessary and appropriate for the operation and maintenance thereof in the same manner and to the same extent that the Authority could do, including without limitation the execution, enforcement, cancellation and modification of leases, the collection of all rents of the Project, the removal and eviction of tenants and other occupants, the making of alterations and repairs Project and the execution and termination of contracts providing for repairs to the Project _� _ management or maintenance of the Project, all on such terms as are deemed best by the City to protect its interests under this Agreement. The City or the manager or receiver appointed by the City shall be entitled to receive a reasonable fee for managing the Project. ARTICLE IV Remedies Upon Default Section 4.01. Remedies of City on Default. Upon the occurrence of a default by the Authority in its obligations hereunder, or upon the occurrence of an event of default under the Indenture the City may take one or more of the following steps: (a) If, and only if, the Bonds are no longer Outstanding, the City may declare the entire principal balance of any loans made to the Authority by the City hereunder (if not then due and payable) to be due and payable immediately, and upon any such declaration the principal of the loan shall become and be immediately due and payable, together with all interest accrued thereon to the date of such acceleration, anything in this Agreement to the contrary notwithstanding; (b) The City 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 City may deem most effectual to protect and enforce any of its rights or interests hereunder; and (c) The City may exercise any of its rights under this Agreement including, without limitation, all of its rights under Article III. Section 4.02. Remedies of Authority on Default. Upon the occurrence of a default by the City in its obligations to make loans to the Authority hereunder, the Authority 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 -6- appropriate legal or equitable remedy, as the Authority may deem most effectual to protect and enforce any of its rights or interests hereunder. Section 4.03. No Remedy Exclusive. No remedy conferred upon or reserved to either party by this 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 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 Agreement, or otherwise. Section 4.04. 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 4.05. Agreement to Pay Attorneys' Fees and Expenses. If a default arises under any of the provisions of this Agreement and either party hereto should employ attorneys or incur other expenses for the collection of amounts due under this Agreement or the enforcement of performance or observance of any obligation or agreement on the part of the other party contained in this 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. ARTICLE V Indemnification As between the City and the Authority, the Authority shall assume the risk of, be liable for, and pay all damage, loss, cost and expense of any party, including its employees, arising out of the performance of this Agreement, except that caused by negligence and/or willful misconduct solely of the City and its employees acting within the scope of their employment. The Authority shall hold harmless from and indemnify the City and its officers, elected officials, agents, and employees against, all claims, losses, suits, actions, costs, counsel fees, litigation costs, expenses, damages, judgments, or decrees by reason of damage to any property or business and/or any death, injury or disability to or of any person or party, including any employee, arising out of or suffered, directly, or indirectly by reason of or in connection with the performance of this Agreement or any act, error or omission of the Authority or the Authority's employees, agents, or subcontractors, whether by negligence or otherwise. The Authority's obligation shall include, but not be limited to, investigating, adjusting, and defending all claims against the City alleging loss from action, error or omission or breach of any common law, statutory or other delegated duty by the Authority, the Authority's employees, agents, or subcontractors. -7- ARTICLE VI Compliance with Continuing Disclosure Requirements. of paragraph iExchange To meet the conditions (d)(2) of United States Securities and Exchange Commission Rule 15c2-12 (the "Rule"), as applicable to a participating underwriter for the Bonds, the City undertakes for the benefit of holders of the Bonds to provide to the Trustee, with instructions to deliver the same to each NRMSIR and the SID (as those terms are defined in l statements: Section 6.6 of the Indenture), annual financial statements for the City, which J (a) Shall be prepared in accordance with applicable generally accepted accounting principles promulgated by the Government Accounting Standards Board ("GASB"), as such principles may be changed from time to time by GASB or its successor; (b) Need not be audited, except, however, that if and when audited financial statements are otherwise prepared and available to the City they will be provided; (c) Shall be provided to the Trustee, not later than the last day of the ninth month after the end of each fiscal year of the City (currently, a fiscal year ending December 31), as such fiscal year may be changed as required or permitted by State law, commencing with the City's fiscal year ending December 31, [1998]; and (d) May he provided in a single or multiple documents, and may be incorporated by reference to other documents that have been filed with each NRMSIR and the SID, or, if the document incorporated by reference is a "final official statement" with respect to other obligations of the City, that has been filed with the MSRB. The City's obligations under this undertaking shall terminate upon the legal defeasance of all of the Bonds. In addition, the City' s obligations under this undertaking shall terminate if those provisions of the Rule which require the City 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 City and the Authority, and the Authority provides timely notice of such termination to each NRMSIR or the MSRB and the SID. ARTICLE VII Miscellaneous Section 7.01. Governing Law; Venue. This Agreement is governed by and shall be tr. d ince the substantive laws of the State of Washington and shall be construed ucd in accordance with liberally construed so as to carry out the purposes hereof. Except as otherwise required by applicable law, any action under this Agreement shall be brought in the Superior Court of the State of Washington in and for Yakima County and/or in the United States District Court for the Western District of Washington. -8- Section 7.02. 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 mailed by first-class, certified or registered mail, postage prepaid and return receipt requested, as follows: To the City: City of Yakima 129 N. 2nd Street Yakima, Washington 98901 Attention: Director of Finance To the Authority: Housing Authority of the City of Yakima 110 Fair Avenue Yakima, Washington 98901 Attention: Executive Director The City or the Authority may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates, requests or other communications shall be sent. Notices shall be deemed served upon deposit of such notices in the United States mail in the manner provided above. Section 7.03. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the City and the Authority and their successors. This Agreement may not be assigned, except that the Authority shall have the right to assign to the Trustee its right to obtain funds from the City hereunder for the benefit of the owners of the Bonds. Section 7.04. Severability. In the event any provision of this 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 7.05. Amendments. This Agreement may not be effectively amended, changed, modified or altered, except by an instrument in writing duly executed by the City and the Authority (or their successors in title). If the Bonds are rated by a rating agency, then no such amendment shall be permitted unless the Authority, or the Trustee on behalf of the Authority, has received written confirmation from the rating agency that such amendment will not result in a reduction or withdrawal of the rating on the Bonds. If the Bonds are not rated by a rating agency, then no such amendment will be permitted unless in the opinion of the Trustee such amendment will not materially adversely affect the owners of the Bonds. This Agreement may not be terminated until the Bonds have been paid in full or defeased, unless the City has assumed -9- all liability for payment of the principal of and interest on the Bonds when d1e and shall have r faith and credit ,7:a t., such payment. ifs lull faith credit to such Section 7.06. Waiver of Breach. No waiver of any breach of any covenant or agreement herein _hall operate waiver of same covenant or contained I1CIC111 shall opciaw as a .,. any subsequent breach of the - agreement or as a waiver of any breach of any other covenant or agreement, and in case of a breach by either party of any covenant, agreement or undertaking, the nondefaulting party may nevertheless accept from the other any payment or payments or performance hereunder without in any way waiving its right to exercise any of its rights and remedies provided for herein or otherwise with respect to any such default or defaults that were in existence at the time such payment or payments or performance were accepted by it. Section 7.07. No Rights Created in Third Parties. The terms of this Agreement are not intended to establish nor to create any rights in any persons or entities other than the City, the Authority and the respective successors and assigns of each. Section 7.08. Time of Essence. Time and all terms and conditions shall be of the essence of this Agreement. Section 7.09. Termination of Agreement. Except as provided in Section 7.10, this Agreement shall terminate upon payment in full of all principal of and interest on the Bonds (or defeasance thereof pursuant to Article IX of the Indenture). Section 7.10. Refunding Bonds. Except as provided in section 7.11 hereof, if the Authority issues Refunding Bonds at any time, all references in this Agreement to "Bonds" shall be deemed to be references to "Refunding Bonds" for all purposes. Section 7.11. Refinance. F-r-em and aftttc ' ' - ` • " ' • '-. t r fir: i ary redemption).At any time. the City may 1 request the Authority to redeem refinance the Bonds if the City reasonably determines that in order to provide funds with which to pav and redeem the Bonds, the Authority is (i) able to issue and sell refinancing bonds or to obtain other refinancing, in either case without the guarantee of the City as provided herein; and (ii) financially able to pay the debt service on such refinancing bonds or other refinancing. If the City makes such request, the Authority shall use its best efforts to obtain a contract for the purchase of such bonds or obtain other refinancing, in either case without the guarantee of the City, bearing an effective net interest rate that is not more than the effective net interest rate on the Bonds. If the Authority is able to obtain such a bond purchase contract, the Authority shall issue and sell such refinancing bonds, shall call the Bonds for redemption and shall pay and redeem or defease the Bonds, whereupon the City's obligation under this Agreement shall terminate. Section 7.12. Accounting. The Authority shall establish accounting procedures and systems and maintain its accounting books and records in a manner satisfactory to the Auditor of the State of Washington and shall allow the City Finance Director access thereto for audit purposes. -10- Promptly upon the City's request for information (whether oral or written), the Authority shall provide the City with all financial information readily available to the Authority concerning the Project and all funds and accounts established pursuant to this Agreement. The Authority shall provide to the City monthly progress reports during construction through rent -up, in a form approved by the City, and thereafter shall provide quarterly and annual financial statements in the form normally prepared by the Authority and copies of all information provided to the Trustee or any NRMSIR pursuant to Article VI of the Indenture. The City shall have the right to have access to and to inspect the premises (upon reasonable notice) and to examine and make copies of the books, files and records of the Authority at any time during business hours. The designation of the Project construction manager shall be subject to the approval of the City. Section 7.13. Sale of Project. No property constituting a part of the Project may be sold or otherwise encumbered or disposed of by the Authority unless (i) the proceeds thereof (in an amount approved by the City), are deposited in the Bond Fund; and (ii) the Authority receives the express written permission of the City. Notwithstanding the previous sentence, the Authority may sell or otherwise dispose of any of the properties of the Project, other than any real property, which shall have become unserviceable, inadequate, obsolete or unfit to be used in the operation of the Project or no longer necessary, material to or useful in such operation. The proceeds of any such sale or disposition shall be deposited in the property reserve account maintained by the Authority except that any such proceeds shall be transferred to the Reserve Account to the extent that such transfer shall be necessary to make up any deficiency in said Reserve Account. Section 7.14. Deed of Trust. Upon the issuance of the Bonds, the Authority shall execute a Deed of Trust in favor of the City in substantial conformance with Exhibit B hereto, and immediately deliver the Deed of Trust to the City. The City acknowledges that the Deed of Trust will be subordinate to the Deed deed of Trust trust given by the Authority to the Trustee to secure payment of the Bonds. Section 7.15. Insurance. Subject to review and approval by the City, the Authority shall procure and maintain at all times a policy of public liability insurance naming the City as an insured, protecting and holding the City harmless from any and all damages which may arise or are alleged to arise in connection with the Project on the services to be provided hereunder, whether or not such damages are alleged to arise or result from acts or omissions which are the sole negligence of the City, its officers, agents and/or employees or the combined negligence of the City and others, in at least the principal amount of a combined single limit of $2,000,000 each occurrence, personal injury and/or property damage. The Authority will insure the Project against loss or theft in the amount of replacement costs of the Project, and shall include the City as an insured thereunder. The Authority will procure and maintain a policy of business interruption insurance providing for maintenance of income from the Project in the event of loss or damage to it. The City shall be entitled to review and must approve such insurance policies. The terms of any insurance policy required under this section shall provide that the insurer shall notify the City at least thirty (30) days before any reduction or cancellation of insurance. No such insurance shall be reduced or canceled without the City's prior written agreement. Unless -11- the City authorizes a different application of insurance proceeds, such proceeds shall be applied to restore repair or repiace damaged property or to pay and redeem outstanding Bonds. Section 7.16. City Approval. All decisions of the City hereunder shall be deemed to be made by action of the City Manager. Section 7.17. Make Only Economically Sound Improvements. The Authority will not expend any of the Project Revenues or the proceeds of Bonds or other obligations for any extensions, betterments or improvements to the Project, or any other purposes, which will not properly and advantageously contribute to the conduct of the business of the Project without the City's written consent. Within five years from the date of this Agreement, upon request by the Authority the City agrees to review the financial status of the Project and determine if part or all of that portion of the Net Revenues which exceeds such coverage requirement may be expended for Authority purposes other than the Project without materially diminishing the security of the City. Such a determination will not be unreasonably withheld. Section 7.18. Rate Covenant— Debt Service Coverage. The Authority shall establish, maintain and collect rates or charges in connection with the ownership and operation of the Project sufficient to provide Net Revenues in any Fiscal Year hereafter in an amount that is at least equal to the coverage requirement provided by the Indenture, but not less than 1.15 times the Required Debt Service for such Fiscal Year. 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 City and the Authority have caused this Agreement to be executed in their respective names by their duly authorized officers, and have caused this Agreement to be dated as of the date set forth on the first page hereof. CITY OF YAKIMA, WASHINGTON ATTEST: HOUSING AUTHORITY OF THE CITY OF YAKIMA, WASHINGTON -12- ATTEST: Executive Director K 1257 391000391E WVNF W W_A201O By Chair, Board of Commissioners -13- DRAFT OF MAY 12,1998 RECORDED AT THE REQUEST OF AND AFTER RECORDING RETURN TO: Deborah S. Winter Foster Pepper & Shefelman PLLC 1111 Third Avenue, Suite 3400 Seattle, Washington 98101 DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT Grantor: Housing Authority of the City of Yakima Additional names on pg. N/A Grantee: Legal Description: Assessor's Tax Parcel ID#: U S. Bank Trust National Association, as Bond Trustee Valley Title Guarantee, as deed of trust trustee Additional names on pg. N/A Official legal description on Exhibit A attached. Reference # (If applicable): N/A Additional number on pg. N/A DEED TTr re,T A C. nrf-�1. 7T ATTTT` C.0 T ' 10-1., T C' A'A rr T T rn A n DEED 'jrVI 1I�lJJ 1, ,1114.J.IN1VLGIN 1 'JF 1'U 1N 1 J r1.111-/ LL'l1JL J AND SECURITY AGREEMENT (NUEVA PRIMAVERA) THIS DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT (this "Deed of Trust") is made as of 1, 1998, by Housing Authority of the City of Yakima, a public body corporate and politic of the State of Washington, as Grantor ("Grantor" or the "Authority"), caLLose mailing address is 110 Fair Avenue, Yakima, Washington 98901 The Trustee is Valley Title Guarantee, whose mailing address is P. O. Box 1625, Yakima, Washington 98904. The beneficiary is U.S. Bank Trust National Association ("Beneficiary"), as trustee for the Bonds referred to below, whose mailing address is 601 Union St., Suite 2120, Seattle, Washington 98101. For purposes of Article 9 of the Uniform Commercial Code (RCW 62A.9) (the "UCC"), the Grantor is the Debtor, the Beneficiary is the Secured Party and this Deed of Trust constitutes a Financing Statement. Grantor hereby irrevocably GRANTS, TRANSFERS, CONVEYS and ASSIGNS to Trustee, IN TRUST, WITH POWER OF SALE, all of Grantor's present and future estate, rights, title, claim, interest and demand, either in law or in equity, of, in and to the following properly (the "Property"). (a) The real property and all rights to the alleys, streets and roads adjoining or abutting the real property described on Exhibit "A" attached hereto (the "Realty"); (b) All buildings, improvements and tenements now or hereafter located on the Realty; (c) All fixtures and articles of property now or hereafter attached to, or used or adapted for use in the ownership, development, operation or maintenance of the buildings, improvements, and Realty (whether such items be owned absolutely or subject to any title -retaining or security instrument, or be otherwise used or possessed, but excluding leased property located on the Realty), including without limitation all heating, cooling, air conditioning, ventilating, refrigerating, plumbing, generating, power, lighting, laundry, maintenance, incinerating, lifting, cleaning, fire prevention and extinguishing, security and access control, cooking, gas, electric and communication fixtures, equipment and apparatus, all engines, motors, conduits, pipes, pumps, tanks, ducts, compressors, boilers, water heaters and furnaces, all ranges, stoves, disposers, refrigerators and other appliances, all escalators and elevators, baths, sinks, all cabinets, partitions, mantels, built-in mirrors, window shades, blinds, screens, awnings, storm doors, windows and sashes, all carpeting, underpadding, floor covering, paneling and draperies, all furnishings of public spaces, halls and lobbies, and all shrubbery and plants; all of which items shall be deemed part of the real property and not severable wholly or in part without material injury to the freehold; (d) All assessments, all access, air and development rights, all minerals and oil, gas and other hydrocarbon substances, all royalties, all water, water rights and water stock, and all 1 50012193.02 other rights, hereditaments, privileges, permits, licenses, franchises and appurtenances now or hereafter belonging or in any way appertaining to the Realty; (e) All of the rents, revenues, issues, profits and income of the Property, and all rights, title and interests of Grantor in and to all present and future leases and other agreements for the occupancy or use of all or any part of the Realty, and all right, title and interest of Grantor thereunder, including without limitation all cash or security deposits, advance rentals and deposits or payments of similar nature; SUBJECT, HOWEVER, to the assignment of rents and other property to Beneficiary herein contained; (f) All of Grantor's rights, title and interests in all intangible personal property used or useful in connection with the ownership, development, operation or maintenance of the buildings, improvements and Realty, including without limitation all permits, licenses and franchises with respect to the Property, the exclusive right to use of any trade names, all contract rights (including, but not limited to, architectural, engineering and management agreements), all accounts receivable, leases and rental agreements, escrow accounts, insurance policies, deposits (including but not limited to tenant deposits), instruments, documents of title, general intangibles and business records pertaining to the buildings, improvements and Realty excluding only cash on hand and in bank accounts; (g) All of Grantor's rights, title and interests in materials, supplies and other goods, collectively referred to as "materials" now owned or hereafter acquired, wherever located, whether in the possession of Grantor or any warehouseman or bailee, or any other person, purchased for use in the construction or furnishing of improvements on the Realty, but excluding leased property located on the Realty, together with any documents covering such materials, all contract rights and general intangibles relating to such materials and proceeds of such materials, documents, contract rights and general intangibles; (h) All other rights and privileges of every kind included within the Property, and all present and future contracts and policies of insurance which insure the Property or any part thereof, real or personal (whether or not Beneficiary is a loss payee thereof); and (i) All products and proceeds of the foregoing property. TO SECURE THE FOLLOWING (collectively the "Secured Obligations"): (1) Payment of the principal of and premium, if any, and interest on the Authority's $ Housing Revenue Bonds, 1998 (Nueva Primavera Project) (the "Bonds") issued pursuant to Resolution No. of the Authority adopted on , 1998 (the "Resolution"), and the Trust Indenture dated as of 1, 1998, between the Authority and Beneficiary (the "Indenture"); (2) The performance of the other covenants and agreements of Grantor contained in the Resolution, the Indenture and the other Bond Documents (as defined below); 2 50012193.02 l advanced t protcct the security of *his Deed of Trust (3) Payment of all sums aUvcLLtccu w tui. ... ..�..,--�..-- together with interest thereon as herein provided, (4) P_ of _l other s which are which become awing under the. Payment all sun -is or r...-..... may ..-•-•---_-- --••---c ---___ Indenture and the other Bond Documents; and (5) Performance of all of Grantor's other obligations under the Indenture and the Bond Documents. As used herein, the term "Bond Documents" means this Deed of Trust, the Indenture, the Resolution, any UCC Financing Statements executed in connection herewith, and any other instrument or document (other than the Hazardous Substances Agreement) securing the Bonds or otherwise executed in connection therewith, together with all modifications, extensions, renewals and replacements thereof. This Deed of Trust shall be effective, from the date of its recording, as a financing statement filed as a fixture filing with respect to all items of property described above that are or are to become fixtures. With respect to such security interest or interests, Beneficiary shall have all rights and remedies provided for in this Deed of Trust or otherwise available to Beneficiary and all rights and remedies of a secured party on default of a debtor under the UCC (whether or not the UCC applies to the affected property). If Beneficiary shall so require, Grantor in the event of default shall make such collateral available to Beneficiary at a place designated by Beneficiary that is reasonably convenient to all parties. Grantor shall execute such instruments and documents as Beneficiary from time to time may require to evidence further or perfect any rights or security interests. GRANTOR HEREBY REPRESENTS, WARRANTS, COVENANTS AND AGREES AS FOLLOWS ARTICLE I. TITLE AND USE I,1 Warranty of Title. Grantor covenants that it is lawfully seized of the estate hereby conveyed and has the right to grant, convey and assign the Property; that no other liens or encumbrances superior to this Deed of Trust will be created or suffered to be created by Grantor during the life of this Deed of Trust without the prior written consent of Beneficiary; and that Grantor will forever warrant and defend the Property unto Beneficiary against all claims and demands of any other person whomsoever. As to any mortgages, deeds of trust, real estate contracts or other liens presently existing or hereafter permitted by Beneficiary to be recorded against the Property (the "Liens"), Grantor expressly covenants and agrees as follows: (a) Complete and current copies of the agreements relating to the Liens have been or will be furnished to Beneficiary, and none of them has been or will be modified in any way without Beneficiary's prior written consent. 3 50012193.02 (b) Grantor is not and shall not be in default with respect to the Liens and the outstanding balance of the Liens, as set forth in agreements relating thereto delivered to Beneficiary, is and shall be accurate. (c) Grantor will fully comply with the terms of all agreements relating to the Liens and will deliver a copy of any notice of default or notice of non-performance with respect to those agreements to Beneficiary. (d) Beneficiary has the right to contact the holder of the Liens to confirm the status of the agreements pertaining to the Liens, and Grantor will, from time to time, at the request of Beneficiary, request of those lienholders certificates stating that the agreements pertaining to the Liens are in full force and effect and are unmodified and that no notice of default thereunder has been served on Grantor, and specifying any defaults thereunder, if any. 1.2 Non -Agricultural Use. Grantor represents and warrants to Beneficiary that the Property is not used principally for agricultural or farming purposes. ARTICLE II. GRANTOR'S COVENANTS, REPRESENTATIONS AND WARRANTIES 2 1 Payment and Performance of Secured Obligations. Grantor will pay when due all sums which are now or which may become owing under the Bond Documents, and will pay and perform all other Secured Obligations, including all covenants contained therein, in accordance with their terms. 2.2 Transfer of Title. If the Property is sold pursuant to Article VIII or if Beneficiary otherwise acquires title to the Property, Beneficiary shall have all of the rights, title and interests of Grantor in and to any insurance policies and unearned premiums thereon and in and to the proceeds resulting from any damage to the Property prior to such sale or acquisition. 2.3 Protection of Beneficiary's Security. Grantor will give notice to Beneficiary of and will, at its expense, appear in and defend any action or proceeding that might affect the Property or title thereto or the interests of Beneficiary or Trustee therein or the rights or remedies of Beneficiary or Trustee hereunder. If any such action or proceeding is commenced or if Beneficiary or Trustee is made a party to any such action or proceeding by reason of this Deed of Trust, or if Grantor fails to perform any obligation on its part to be performed hereunder, then Beneficiary and/or Trustee, each in its own discretion, may make any appearances, disburse any sums, make any entries upon the Property and take any actions that may be necessary or desirable to protect or enforce the security of this Deed of Trust, to remedy Grantor's failure to perform its covenants (without, however, waiving any default by Grantor) or otherwise to protect Beneficiary's or Trustee's interests Grantor agrees to pay all loss, damage, costs and expenses, including reasonable attorneys' fees, of Beneficiary and Trustee thus incurred. This section shall 4 5c012193.02 LIVE be LUL1JLIUGU to require Beneficiary U1 Trustee: LV i':a,iir or take any actions anyvvnannon ma 1.' anv annnaranr•oe r16rvii.,w, ...�.. •—J ,.t.t.........�...... 2 A Do:.,.l.,,rsernent cf Benn n:ary'n and Trustee's Expenses All amounts dichursed L.T Reimbursement o Beneiicia Beneficiary's and arzteV �s ysa�s..ns -.+• --- ^------- ---- --- - by Beneficiary and Trustee pursuant to Section 2.3 or any other provision of the Secured Obligations or this Deed of Trust to protect the security provided hereby, with interest thereon, shall be additional indebtedness of Grantor secured by this Deed of Trust. All such amounts shall be immediately due and payable and shall bear interest from the date of disbursement at an interest rate of 8% per annum, or at the maximum rate which may be collected from Grantor on such amounts by the payee thereof under applicable law if that is less. 2.5 Hazardous Substances. As used herein, the term "Environmental Laws" means all local, state and federal laws, ordinances, regulations, orders and reported state or federal court decisions thereunder related to: environmental protection; the use, storage, generation, production, treatment, emission, discharge, remediation, removal, disposal or transport of any Hazardous Substance; or any other environmental matter, including but not limited to any of the following statutes: (i) Federal Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Sections 69001-6991k; (ii) Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601-9675; (iii) Federal Clean Air Act, 42 U.S.C. Sections 7401-7642; (iv) Federal Hazardous Material Transportation Control Act of 1970, as amended, 49 U.S.C. Sections 1801-1812; (v) Federal Clean Water Act of 1977, as amended, 33 U.S.C. Sections 1251- 1387; (vi) Federal Insecticide, Fungicide, and Rodenticide Act, as amended, 7 U.S.C. Sections 136-136y; (vii) Federal Toxic Substances Control Act, 15 U.S.C. Sections 2601-2671; (viii) Federal Safe Drinking Water Act, 42 U.S.C. Sections 300f -300i-26; (ix) Washington Water Pollution Control Act, chapter 90.48 RCW; (x) Washington Clean Air Act, chapter 70.94 RCW; (xi) Washington Solid Waste Management Act, chapter 70.95 RCW; 5 5c012193.02 (xii) Washington Nuclear Energy and Radiation Act, chapter 70.98 RCW; (xiii) Washington Radioactive Waste Storage and Transportation Act, chapter 70.99 RCW; (xiv) Washington Hazardous Waste Disposal Act, chapter 70.105 RCW; and (xv) Washington Model Toxics Control Act, chapter 70.105D RCW. The term "Hazardous Substance" means any substance or material defined or designated as hazardous or toxic waste, hazardous or toxic material, a hazardous, toxic or radioactive substance, or other similar term, by any Environmental Laws, and shall include any such substance or material as may hereafter become defined or designated as a hazardous or toxic material by any Environmental Laws. (a) No Litigation. There is no claim, action, suit, proceeding, arbitration, investigation or inquiry pending or, to the knowledge of Grantor, threatened against Grantor before any federal, state, municipal, foreign or other court, or any governmental, administrative or self-regulatory body or agency, or any private arbitration tribunal, and to the knowledge of Grantor there neither is nor has been any complaint, order, directive, claim, citation, notice of lien by or in favor of any governmental authority or private person with respect to (1) air emissions; (2) spills, releases or discharges of Hazardous Substances on, in or to the Property or surface water or groundwater affected by the Property or the sewer, septic system or waste water treatment system servicing the Property; (3) solid or liquid waste disposal; (4) the use, storage, generation, treatment, transportation or disposal of Hazardous Substances; (5) exposure to airborne or friable asbestos; (6) violation of any Environmental Law; or (7) any other environmental, health or safety matters affecting or pertaining to Grantor or the Property (b) No Existing Hazardous Substances. Except as to circumstances, matters or things that have been disclosed in writing to Beneficiary prior to the date hereof and as to which Grantor previously has completed, or is proceeding diligently and in the ordinary course of Grantor's activities to complete, cleanup, removal or other remedial action that has fully remedied, or will fully remedy, all effects of any Hazardous Substances, (1) Grantor has no knowledge of any circumstance, matter or thing existing with respect to the Property which might give rise to any of the claims, actions or proceedings, without limitation, discussed in paragraph (a) of this section; (2) neither Grantor nor to the knowledge of Grantor any other Person has stored, disposed or released in, on or about the Property any Hazardous Substances the removal or remediation of which is or could be required, or the maintenance of which is prohibited or penalized, by any applicable Environmental Laws, and the Property is free from all such Hazardous Substances; (3) Grantor has not at any time disposed or caused to be disposed at any location any Hazardous Substances generated or existing as a result of Grantor's operation of the Property in a manner which will or could cause Grantor to be or become liable for a fine or penalty or a monetary or performance obligation arising from or related to such disposal; (4) to 6 50012193.02 . ,:..L:t:e...: connection with the release from the knowledge of Cirantor, Grantor has no contingent liability ill connection the Property of any Hazardous Substances into the environment; (5) Grantor has not given any release or waiver of liability that would waive or impair any claim based on Hazardous of Property, (B) the owner or any prior C1i owner or Substances to (A) a prior owner or occupant the Property, prior occupant of any property leased by Grantor, or (C) any party who may be potentially responsible for the presence of Hazardous Substances on the Property. (c) No Future Hazardous Substances. Grantor will not knowingly cause or permit the Property to be used to generate, manufacture, refine, transport, treat, store, handle, dispose of, transfer, produce or process any Hazardous Substance, except for Hazardous Substances used in the ordinary course of business in compliance with all applicable Environmental Laws, nor shall Grantor cause or permit, as a result of any intentional or tet_.... contractors, act or omission on the part of Grantor or any of its agents, einapioyees, contractors, tenants, subtenants, invitees or other users or occupants of the Property, in the operation of the Property, a release of any Hazardous Substance onto the Property or onto any other property. (d) Compliance With Environmental Laws. Grantor will at all times in all t_. �„ and other users and respects comply, and will use its best efforts to cause all tenants, subtenants and occupants of the Property to comply, with all Environmental Laws including, without limitation, the duty to undertake the following specific actions: (1) Grantor will, at its own expense, procure, maintain in effect, and comply with all conditions of any and all permits, licenses and other governmental and regulatory approvals required by all Environmental Laws, including, without limitation, permits required for discharge of (appropriately treated) Hazardous Substances into the ambient air or any sanitary sewers serving the Property; and (2) except as discharged into the ambient air or a sanitary sewer in strict compliance with all applicable Environmental Laws, all Hazardous Substances from or on the Property to be treated and/or disposed of by Grantor will be removed and transported solely by duly licensed transporters to a duly licensed treatment and/or disposal facility for final treatment and/or disposal (except when applicable Environmental Laws permit on-site treatment or disposal in a sanitary landfill). (e) Cleanup of Property. If the presence, release, threat of release, placement on or in the Property, or the generation, transportation, storage, treatment or disposal at the Property of any Hazardous Substance (1) gives rise to liability (including but not limited to a response action, remedial action or removal action) under any Environmental Law, (2) causes a significant public health effect, or (3) pollutes or threatens to pollute the environment, Grantor shall, at its sole expense, promptly take any and all remedial and removal action necessary to clean up the Property and mitigate exposure to liability arising from the Hazardous Substance, whether or not required by law. (f) Notification of Beneficiary. Grantor shall promptly give Beneficiary (1) written notice and a copy of any notice or correspondence it receives from any federal, state or other government authority regarding Hazardous Substances on the Property or Hazardous Substances which affect or will affect the Property, (2) written notice of any knowledge or information Grantor obtains regarding Hazardous Substances on the Property or Hazardous 7 50012193 02 Substances which will affect the Property or expenses or losses incurred or expected to be incurred by Grantor or any government agency to study, assess, contain or remove any Hazardous Substances on or near the Property, and (3) written notice of any knowledge or information Grantor obtains regarding the release or discovery of Hazardous Substances on the Property. Grantor acknowledges that, as between itself and Beneficiary, Grantor will be solely responsible for all costs and expenses relating to the cleanup of Hazardous Substances as a result of activities on or the contamination of the Property. Grantor's obligations under this Section 2.5 are unconditional, and the covenants of Grantor in this Section 2.5 shall continue in effect and shall survive the satisfaction of the obligations of Grantor under this Deed of Trust, including without limitation the transfer of the Property pursuant to foreclosure proceedings (whether judicial or nonjudicial), by deed in lieu of foreclosure or otherwise. Nothing in this Section 2.5 shall prejudice or impair the rights or claims of Grantor against any Person other than Beneficiary with respect to the presence of Hazardous Substances as set forth above. 2.6 Maintenance of Property; Insurance. Grantor will maintain the buildings and other improvements which are part of the Property in such condition as will not impair its operating unity or character as a multifamily residential facility, and will neither commit nor suffer any waste on the Property. Grantor will at all times maintain such insurance on the Property, with such insurers and in such amounts, as is normally maintained by prudent owners of similar property in the area in which the Property is located. ARTICLE III. RESERVES 3.1 Deposits If Beneficiary so requires, and subject to Section 3.4, Grantor will deposit with Beneficiary a monthly sum, as estimated by Beneficiary, equal to (a) the rents under any ground lease, (b) the taxes and special assessments next due on the Property, and (c) the premiums that will next become due on insurance policies required hereunder, less all sums already deposited therefor, divided by the number of months to elapse before two months prior to the date when such rents, taxes, special assessments and premiums will become delinquent. Beneficiary may require Grantor to deposit with Beneficiary, in advance, such other sums for other taxes, assessments, premiums, charges and impositions in connection with Grantor or the Property as Beneficiary reasonably deems necessary to protect Beneficiary's interests (herein "Other Impositions"). Such sums for Other Impositions shall be deposited in a lump sum or in periodic installments, at Beneficiary's option. If requested by Beneficiary, Grantor will promptly deliver to Beneficiary all bills and notices with respect to any rents, taxes, assessments, premiums and Other Impositions. Unless Grantor and Beneficiary otherwise agree in writing, Beneficiary shall not be required to pay Grantor any interest, earnings or profits on any sums deposited with Beneficiary. All sums deposited with Beneficiary under this Section 3.1 are hereby pledged as additional security for the Secured Obligations. 8 50012193.02 3.2 Application of Deposits. All such deposited sums shall be held by Beneficiary and applied in such order as Beneficiary elects to pay such rents, taxes, assessments, premiums ,� of default hereunder, L...applied :.. whole or in part, Other Impositions or, in the event default may be in to indebtedness secured hereby. The arrangement provided for in this Article III is solely for the added protection of Beneficiary and entails no responsibility on Beneficiary's part beyond the allowing of due credit, without interest, for the sums actually received by it. Upon any assignment of this Deed of Trust by Beneficiary, any funds on hand shall be turned over to the assignee and any responsibility of Beneficiary with respect thereto shall terminate. Each transfer of the Property shall automatically transfer to the grantee all rights of Grantor with respect to any funds accumulated hereunder. Upon payment in full of the Secured Obligations, Beneficiary shall promptly refund to Grantor the remaining balance of any deposits then held by Beneficiary. 3.3 Adjustments to Deposits. If the total amount deposited by Grantor under Section 3.1 exceeds the amount deemed necessary by Beneficiary to provide for the payment of such rents, taxes, assessments, premiums and Other Impositions as the same fall due, then such excess shall, provided no event of default then exists hereunder, be credited by Beneficiary on the next due installment or installments of such deposits. If at any time the total amount deposited with Beneficiary is less than the amount deemed necessary by Beneficiary to provide for the payment thereof as the same fall due, then Grantor will deposit the deficiency with Beneficiary within 30 days after written notice to Grantor stating the amount of the deficiency 3.4 Conditional Waiver. Notwithstanding any other provision of this Deed of Trust, Beneficiary agrees that it will not require the payment of reserves as provided in this Article III, so long as there is no delinquency in the payment of any taxes or assessments levied or assessed against the Property, nor any delinquency in the payment of the premiums for any insurance required hereunder, and there is no other event of default under this Deed of Trust. ARTICLE IV. RESTRICTIONS ON TRANSFER OR ENCUMBRANCE 4.1 Restrictions on Transfer or Encumbrance of the Property. Neither the Property nor any part thereof or interest therein shall be encumbered, sold (by contract or otherwise), conveyed or otherwise transferred by Grantor without Beneficiary's prior written consent. Any such action without Beneficiary's prior written consent shall be void and, at the option of Beneficiary, may constitute an event of default hereunder and shall be deemed to increase the risk of Beneficiary, and Beneficiary may declare all sums secured hereby immediately due and payable or may at its sole option consent to such change in title, occupancy or ownership. ARTICLE V. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT 5.1 Grant to Beneficiary. This Deed of Trust constitutes a security agreement pursuant to the UCC with respect to: 9 50012193 02 (a) Any of the Property which, under applicable law, is not real property or effectively made part of the real property by the provisions of this Deed of Trust; and (b) Any and all other property now or hereafter described on any UCC Financing Statement naming Grantor as Debtor and Beneficiary as Secured Party and affecting property in any way connected with the use and enjoyment of the Property (any and all such other property constituting "Property" for purposes of this Deed of Trust); and Grantor hereby grants Beneficiary a security interest in all property described in clauses (a) and (b) above as security for the Secured Obligations. Grantor and Beneficiary agree, however, that neither the foregoing grant of a security interest nor the filing of any such financing statement shall ever be construed as in any way derogating from the parties' hereby stated intention that everything used in connection with the production of income from the Property or adapted for use therein or which is described or reflected in this Deed of Trust is and at all times shall be regarded for all purposes as part of the Realty. 5.2 Beneficiary's Rights and Remedies. With respect to Property subject to the foregoing security interest, Beneficiary has all of the rights and remedies (i) of a secured party under the UCC, (ii) provided herein, including without limitation the right to cause such Property to be sold by Trustee under the power of sale granted by this Deed of Trust, and (iii) provided in any other Bond Document or by law. In exercising its remedies, Beneficiary may proceed against the items of real property and any items of personal property separately or together and in any order whatsoever, without in any way affecting the availability of Beneficiary's remedies. Upon demand by Beneficiary following an event of default hereunder, Grantor will assemble any items of personal property and make them available to Beneficiary at the Property, a place which is hereby deemed to be reasonably convenient to both parties. Beneficiary shall give Grantor at least five days' prior written notice of the time and place of any public sale or other disposition of such Property or of the time of or after which any private sale or any other intended disposition is to be made. Any person permitted by law to purchase at any such sale may do so. Such Property may be sold at any one or more public or private sales as permitted by applicable law. All expenses incurred in realizing on such Property shall be borne by Grantor. ARTICLE VI. ASSIGNMENT OF RENTS AND LEASES; LEASES OF PROPERTY; APPOINTMENT OF RECEIVER; BENEFICIARY IN POSSESSION 6.1 Assignment of Rents and Leases. As part of the consideration for the indebtedness evidenced by the Bonds, and not as additional security therefor, Grantor hereby absolutely and unconditionally assigns and transfers to Beneficiary all right, title and interest of Grantor in and to: (a) any and all present and future leases and other agreements for the occupancy or use of all or any part of the Property, and any and all extensions, renewals and replacements thereof (collectively "Leases"); (b) all cash or security deposits, advance rentals and deposits of a similar nature under the Leases; (c) any and all guarantees of tenants' or 10 50912193.02 . ,. ., ..�+� and revenues occupants' performances under any and all Leases, and (d) aai renis, issues, profit:, and revenues (collectively "Rents") now due or which may become due or to which Grantor may now or shall hereafter become entitled or may demand or claim (including Rents coming due during any _r all Leases, including without redemption period), arising or issuing from or out of any and all Lases, -_ithou_ limitation minimum, additional, percentage and deficiency rents and liquidated damages. 6 2 Collection of Rents. Prior to written notice given by Beneficiary to Grantor of an event of default hereunder, Grantor shall have a license to, and will, collect and receive all Rents, if any, as trustee for the benefit of Beneficiary and Grantor, to apply the Rents so collected first to the payment of taxes, assessments and other charges on the Property prior to delinquency, second to the cost of insurance, maintenance and repairs required by the terms of the Bond Documents, third to the costs of discharging any obligation or liability of Grantor under the Leases, and fourth to the indebtedness secured hereby, with the balance, if any, so long as no such event of default has occurred, to the account of Grantor. Upon delivery of written notice by Beneficiary to Grantor of an event of default hereunder and stating that Beneficiary exercises its rights to the Rents, and without the necessity of Beneficiary entering upon and taking and maintaining full control of the Property in person, by agent or by a court-appointed receiver, Beneficiary shall immediately be entitled to possession of all Rents as the same become due and payable, including without limitation Rents then due and unpaid, and all such Rents shall immediately upon delivery of such notice be held by Grantor as trustee for the benefit of Beneficiary only. Upon delivery of such written notice by Beneficiary, Grantor hereby agrees to direct each tenant or occupant of the Property to pay all Rents to Beneficiary on Beneficiary's written demand therefor, without any liability on the part of such tenant or occupant to inquire further as to the existence of a default by Grantor; Grantor hereby authorizes Beneficiary as Grantor's attorney-in-fact to make such direction to tenants and occupants upon Grantor's failure to do so as required herein. Payments made to Beneficiary by tenants or occupants shall, as to such tenants and occupants, be in discharge of the payors' obligations to Grantor Beneficiary may exercise, in Beneficiary's or Grantor's name, all rights and remedies available to Grantor with respect to collection of Rents. Nothing herein contained shall be construed as obligating Beneficiary to perform any of Grantor's obligations under any of the Leases. 6 3 Grantor's Representations and Warranties. Grantor hereby represents and warrants to Beneficiary that Grantor has not executed and will not execute any other assignment of the Leases or Rents, if any (except in the Bond Documents), that Grantor has not performed and will not perform any acts and has not executed and will not execute any instrument which would prevent Beneficiary from exercising its rights under this Article VI, and that at the time of execution of this Deed of Trust there has beer no anticipation or prepayment of any Rents for more than two months prior to the due dates thereof. Grantor will execute and deliver to Beneficiary such further assignments of rents and leases of the Property as Beneficiary may from time to time request. 6 4 Leases of the Property. Grantor will comply with and observe its obligations as landlord under all Leases and will do all that is necessary to preserve all Leases in force and free from any right of counterclaim, defense or setoff. At Beneficiary's request, Grantor will furnish 11 50012193.02 Beneficiary with executed copies of all Leases now existing or hereafter made. Without Beneficiary's written consent, Grantor will not collect or accept payment of any Rents more than two months prior to the due dates thereof; will not execute, modify, surrender or terminate any Lease now existing or hereafter made providing for a term (including any renewal term(s)) of five years or more, will not in any manner waive, discharge, release or modify the obligations of any tenant or other occupant of the Property under any Lease, or request or consent to the subordination of any Lease to any lien subordinate to this Deed of Trust. 6.5 Beneficiary in Possession; Appointment of Receiver. Upon any event of default hereunder, Beneficiary may, in person, by agent or by a court-appointed receiver, regardless of the adequacy of Beneficiary's security, enter upon and take and maintain full control of the Property in order to perform all acts necessary and appropriate for the operation and maintenance thereof in the same manner and to the same extent that Grantor could do, including without limitation the execution, enforcement, cancellation and modification of Leases, the collection of all Rents, the removal and eviction of tenants and other occupants, the making of alterations and repairs to the Property and the execution and termination of contracts providing for management or maintenance of the Property, all on such terms as are deemed best by Beneficiary to protect the security of this Deed of Trust. From and after the occurrence of any such event of default, if any owner of the Property shall occupy the Property or part thereof such owner shall pay to Beneficiary in advance on the first day of each month a reasonable rental for the space so occupied, and upon failure so to do Beneficiary shall be entitled to remove such owner from the Property by any appropriate action or proceedings. Following an event of default hereunder, Beneficiary shall be entitled (regardless of the adequacy of Beneficiary's security) to the appointment of a receiver, Grantor hereby consenting to the appointment of such receiver, and the receiver shall have, in addition to all the rights and powers customarily given to and exercised by such receivers, all the rights and powers granted to Beneficiary in this Article VI. Beneficiary or the receiver shall be entitled to receive a reasonable fee for so managing the Property 6.6 Application of Rents. All Rents collected subsequent to delivery of written notice by Beneficiary to Grantor of an event of default hereunder shall be applied first to the costs, if any, of taking control of and managing the Property and collecting the Rents, including without limitation attorneys' fees, receiver's fees, premiums on receiver's bonds, costs of maintenance and repairs to the Property, premiums on insurance policies, taxes, assessments and other charges on the Property, and the costs of discharging any obligation or liability of Grantor under the Leases, and then to the indebtedness secured hereby. Beneficiary or the receiver shall be liable to account only for those Rents actually received. Beneficiary shall not be liable to Grantor, anyone claiming under or through Grantor or anyone having an interest in the Property by reason of anything done or left undone by Beneficiary under this Article VI. 6.7 Deficiencies. To the extent, if any, that the costs of taking control of and managing the Property, collecting the Rents, and discharging obligations and liabilities of Grantor under the Leases exceed theRents, st. the excess sums Such excess sumsshall be payable upon demand by ended for such purposes shall be indebtedness secured by this Deed of 12 50012193.02 the date disbursement rate of R% per annum, or Beneficiary and shall bear interest from li1C ua�o of disbursement at the ____ _ , the maximum rate which may be collected from Grantor therefor under applicable law if that is less. 6.8 Beneficiary a the Property, - Y .' =S s Beneficiary. Beneficiary Not Mortgagee in Possession. Nothing herein shall constitute "mortgagee in possession" prior to its actual entry upon and taking possession of entry upon and taking possession by a receiver not constituting possession by 6.9 Enforcement. Beneficiary may enforce this assignment without first resorting to or exhausting any security or collateral for the indebtedness. This assignment shall terminate at such time as this Deed of Trust ceases to secure payment of the Secured Obligations. ARTICLE VII. EVENTS OF DEFAULT 7.1 Events of Default. The occurrence of any one or more of the following shall constitute an event of default hereunder: (a) Failure by Grantor to make any payment when due under any of the other Bond Documents, if not cured within any applicable grace period set forth in such documents, or under this Deed of Trust, if not cured within 10 days after written notice thereof given to Grantor by Beneficiary. (b) Failure by Grantor to perform any other covenant, agreement or obligation under any of the Bond Documents, if not cured within 60 days after written notice thereof given to Grantor by Beneficiary (or if such cure cannot be completed within such 60 -day period through the exercise of diligence, the failure by Grantor to commence the required cure within such 60 -day period and thereafter to continue the cure with diligence and to complete the cure within 120 days following Beneficiary's notice of default) 7.2 Form of Notice At Beneficiary's option, any written notice of default required to be given to Grantor under Section 8.1 may be given in the form of a statutory notice of default under the Washington Deed of Trust Act or any other form Beneficiary may elect. ARTICLE VIII. REMEDIES 8.1 Acceleration Upon Default; Additional Remedies. In the event of default hereunder, Beneficiary may, at its option and without notice to or demand upon Grantor but subject to the terms of the indenture, exercise any one or more of the following actions: (a) Declare any or all indebtedness secured by this Deed of Trust to be due and payable immediately; 13 50012193 02 (b) Bring a court action to enforce the provisions of this Deed of Trust or any of the indebtedness or obligations secured by this Deed of Trust; (c) Foreclose this Deed of Trust as a mortgage; (d) Cause any or all of the Property to be sold under the power of sale granted by this Deed of Trust in any manner permitted by applicable law; (e) Elect to exercise its rights with respect to the Leases and the Rents (notice of exercising this right will be given by Beneficiary to Grantor); (f) Exercise any or all of the other rights and remedies provided for herein in the event of default hereunder; or (g) Exercise any other right or remedy available under law or in equity. 8.2 Exercise of Power of Sale. For any sale under the power of sale granted by this Deed of Trust, Beneficiary or Trustee shall record and give all notices required by law and then, upon the expiration of such time as is required by law, Trustee may sell the Property upon any terms and conditions specified by Beneficiary and permitted by applicable law. Trustee may postpone any sale by public announcement at the time and place noticed for the sale. If the Property includes several lots or parcels, Beneficiary in its discretion may designate their order of sale or may elect to sell all of them as an entirety. The Property, real, personal and mixed, may be sold in one parcel To the extent any of the Property sold by the Trustee is personal property, then Trustee shall be acting as the agent of Beneficiary in selling such Property. Any person permitted by law to do so may purchase at any sale. Upon any sale, Trustee will execute and deliver to the purchaser or purchasers a deed or deeds conveying the Property sold, but without any covenant or warranty, express or implied, and the recitals in the Trustee's deed showing that the sale was conducted in compliance with all the requirements of law shall be prima facie evidence of such compliance and conclusive evidence thereof in favor of bona fide purchasers and encumbrancers for value. 8.3 Application of Sale Proceeds. The proceeds of any sale under this Deed of Trust will be applied in the following manner: FIRST: Payment of the costs and expenses of the sale, including without limitation Trustee's fees, legal fees and disbursements, title charges and transfer taxes, and payment of all expenses, liabilities and advances of Trustee, together with interest on all advances made by Trustee from the date of disbursement at an interest rate of 8% per annum or at the maximum rate permitted to be charged by Trustee under applicable law if that is less. SECOND: Payment of all sums expended by Beneficiary under the terms of this Deed of Trust and not yet repaid, together with interest on such sums from date of disbursement 14 30012193.02 .� „a L. ....1: „l.l., law iftl.nt is at an interest rate oI 8% per annum or the maximum late periaitted by applicable that is less. TURD l I-lil�iJ rdV_ IiCill of all other indebtedness secured by this need of Trust any order that Beneficiary chooses. FOURTH: The remainder, if any, to the person or persons legally entitled to it. 8 4 Waiver of Order of Sale and Marshalling. Beneficiary shall have the right to determine the order in which any or all portions of the secured indebtedness are satisfied from the proceeds realized upon the exercise of any remedies provided herein. Grantor, any party who consents to this Deed of Trust and any party who now or hereafter acquires a security interest in the Property and who has actual or constructive notice hereof, hereby waives any and all right to require marshalling of assets in connection with the exercise of any of the remedies permitted by applicable law or provided herein, or to direct the order in which any of the Property will be sold in the event of any sale under this Deed of Trust. 8 5 Non -Waiver of Defaults The entering upon and taking possession of the Property, the collection of Rents or the proceeds of fire and other insurance policies or compensation or awards for any taking or damage of the Property, and the application or release thereof as herein provided, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. 8 6 Expenses During Redemption Period. If this Deed of Trust is foreclosed as a mortgage and the Property sold at a foreclosure sale, the purchaser may during any redemption period allowed, make such repairs or alterations on the Properly as may be reasonably necessary for the proper operation, care, preservation, protection and insuring thereof. Any sums so paid together with interest thereon from the time of such expenditure at the rate of 8% per annum or the highest lawful rate if that is less shall be added to and become a part of the amount required to be paid for redemption from such sale. 8 7 Foreclosure Subject to Tenancies. Beneficiary's right at its option to foreclose this Deed of Trust is subject to the rights of any tenant or tenants of the Property. 8.8 Remedies Cumulative. To the extent permitted by law, every right and remedy provided in this Deed of Trust is distinct and cumulative to all other rights or remedies under this Deed of Trust or afforded by law or equity cr any other agreement between Beneficiary and Grantor, and may be exercised concurrently, independently or successively, in any order whatsoever. Beneficiary may exercise any of its rights and remedies at its option without regard to the adequacy of its security. 8.9 Beneficiary's and Trustee's Expenses. Grantor will pay all of Beneficiary's and Trustee's expenses incurred in any efforts to enforce any terms of this Deed of Trust, whether or not any suit is filed, including without limitation legal fees and disbursements, foreclosure costs 15 50012193.02 and title charges. All such sums, with interest thereon, shall be additional indebtedness of Grantor secured by this Deed of Trust. Such sums shall be immediately due and payable and shall bear interest from the date of disbursement at an interest rate of 8% per annum, or the maximum rate which may be collected from Grantor under applicable law if that is less. ARTICLE IX. GENERAL 9.1 Application of Payments. Except as applicable law or this Deed of Trust may otherwise provide, all payments received by Beneficiary under the Bond Documents shall be applied by Beneficiary pursuant to the Indenture. 9.2 Reconveyance. Upon payment of all sums secured by this Deed of Trust, Beneficiary shall request Trustee to reconvey the Property and shall surrender this Deed of Trust and all notes evidencing indebtedness secured by this Deed of Trust to Trustee. Trustee shall reconvey the Property without warranty to the person or persons legally entitled thereto. The grantee in any reconveyance may be described as the "person or persons legally entitled thereto," and the recitals therein of any matters or facts shall be conclusive proof of the truthfulness thereof. Such person or persons shall pay Trustee's reasonable costs incurred in so reconveying the Property. 9.3 Successor Trustee. In accordance with applicable law, Beneficiary may from time to time appoint a successor trustee to any Trustee appointed hereunder. Without conveyance of the Property, the successor trustee shall succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. 9.4 Beneficiary's Powers. Without affecting the liability of any person for payment or performance of the Secured Obligations, Beneficiary, at its option but only if not prohibited by the Resolution or the Indenture, may extend the time for payment of the indebtedness secured hereby or any part thereof, reduce payment thereon, release anyone liable on any of such indebtedness, accept a renewal note or notes thereof, modify the terms and time of payment of the indebtedness, release the lien of this Deed of Trust on any part of the Property, take or release other or additional security, release or reconvey or cause to be released or reconveyed all or any part of the Property, or consent and/or cause Trustee to consent to the making of any map or plat of the Property, consent or cause Trustee to consent to the granting of any easement or the creating of any restriction on the Property, or join or cause Trustee to join in any subordination or other agreement affecting this Deed of Trust or the lien or charge hereof. Grantor shall pay Beneficiary a reasonable service charge, together with such title insurance premiums and attorneys' fees as may be incurred at Beneficiary's option, for any such action if taken at Grantor's request. 9.5 No Violation of Usury Laws. Interest, fees and charges collected or to be collected in connection with the indebtedness secured hereby shall not exceed the maximum, if any, permitted by any applicable law. If any such law is interpreted so that such interest, fees 16 50012193.02 and/nr charges wynrtld exceed any Ruch maximum and Grantor is entitled to the benefit of such law, then: (a) such interest, fees and/or charges shall be reduced by the amount necessary to reduce the same to the permitted maximum, and (b) any sums already paid to Beneficiary which exceeded the permitted maximum will be refunded. Beneficiary may choose to make the refund either by treating the payments, to the extent of the excess, as prepayments of principal or by making a direct payment to the person(s) entitled thereto. No prepayment premium shall be assessed on prepayments under this section. The provisions of this section shall control over any inconsistent provision of this Deed of Trust, the Bonds or any other Bond Documents. 9.6 Additional Documents; Power of Attorney. Grantor, from time to time, will execute, acknowledge and deliver to Beneficiary upon request, and hereby irrevocably appoints BBeneficiary its attorney-in-fact execute acknr,wledgP deliver and if appropriate file and eneficiary 1W 6666V11a d.y-al.a-luad to v�vvt..bv, u.vau.... .......D.., ..��_. _. �'- ---y-r__s___-_ record, such security agreements, assignments for security purposes, absolute assignments, financing statements, affidavits, certificates and other documents, in form and substance satisfactory to Beneficiary, as Beneficiary may request in order to perfect, preserve, continue, extend or maintain the assignments contained herein, the lien and security interest under this of Trust and priority thereof. Grantor will pay to Beneficiary upon request therefor all Deed the Grantor costs and expenses incurred in connection with the preparation, execution, recording and filing of any such document. 9.7 Forbearance by Beneficiary Not a Waiver. Any forbearance by Beneficiary in exercising any right or remedy hereunder, or otherwise afforced by applicable law, shall not be a waiver of or preclude the exercise of any right or remedy, and no waiver by Beneficiary of any particular default by Grantor shall constitute a waiver of any other default or of any similar default in the future. Without limiting the generality of the foregoing, the acceptance by Beneficiary of payment of any sum secured by this Deed of Trust after the due date thereof shall not be a waiver of Beneficiary's right either to require prompt payment when due of all other sums so secured or to declare a default for failure to make prompt payment. The procurement of insurance or the payment of taxes or other liens or charges by Beneficiary shall not be a waiver of Beneficiary's right to accelerate the maturity of the indebtedness secured by this Deed of Trust, nor shall Beneficiary's receipt of any condemnation awards or damages or insurance proceeds operate to cure or waive Grantor's default in payment of sums secured by this Deed of Trust. 9.8 Indemnity. Grantor agrees to defend and hold Beneficiary harmless from any claims made against Beneficiary which arise as a result of actions taken by Grantor This indemnity shall survive foreclosure or other acquisition of the Property by Beneficiary. 9.9 Modifications and Waivers. This Deed of Trust cannot be waived, changed, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of any waiver, change, discharge or termination is sought. 17 50012193.02 9.10 Notice. Except as applicable law may otherwise require, all notices and other communications shall be in writing and shall be deemed given when delivered by personal service or when mailed, by certified or registered mail, postage prepaid, addressed to the address set forth at the beginning of this Deed of Trust. Any party may at any time change its address for such purposes by delivering or mailing to the other parties hereto as aforesaid a notice of such change 9.11 Governing Law; Severability; Captions. This Deed of Trust shall be governed by the laws of the State of Washington without regard to the conflict of laws provisions thereof. If any provision or clause of this Deed of Trust conflicts with applicable law, such conflicts shall not affect other provisions or clauses hereof which can be given effect without the conflicting provision, and to this end the provisions hereof are declared to be severable. The captions and headings of the sections and articles of this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof. If any provision herein is inconsistent with any provision in the Indenture and the provisions cannot be reconciled, then the terms of the Indenture shall control. 9.12 Definitions As used herein, the term "Grantor" means Grantor herein named, together with any subsequent owner of the Property or any part thereof or interest therein, the term "Trustee" means the Trustee herein named, together with any successor Trustee, and the term "Beneficiary" means the Beneficiary herein named, together with any assignee of the Beneficiary. 9 13 Successors and Assigns Bound; Joint and Several Liability; Agents. This Deed of Trust shall bind and inure to the benefit of the parties hereto and their respective heirs, devisees, legatees, administrators, executors, successors and assigns, subject to the provisions of Article IV. All obligations of Grantor hereunder are joint and several. In exercising any rights hereunder or taking actions provided for herein, Beneficiary and Trustee may act through their respective employees, agents or independent contractors as authorized by Beneficiary and Trustee 9.14 Number; Gender. This Deed of Trust shall be construed so that wherever applicable the use of the singular number shall include the plural number, and vice versa, and the use of any gender shall be applicable to all genders. 9.15 Time. Time is of the essence in connection with all obligations of Grantor herein. 9.16 Request for Notice. Grantor hereby requests that a copy of any notice of default and notice of sale hereunder be mailed to it at its address set forth at the beginning of this Deed of Trust. 18 50012193.02 ITT VITTTT.T "CC NIM=13rcer i.nc exec teri this Deeri of Trnlct aR of the date first 1.1N VY 111VLJJ YY la.t_.1v...vt v1 CL111,a../1 above written. unr TQTNCT AT TTT-TORTTY OF THE CITY OF YAKIMA Rv• . 50012193.02 Alice Sells Executive Director 19 STATE OF WASHINGTON ) ) ss. COUNTY OF ) On this day before me personally appeared Alice Sells, known or proved to me to be the Executive Director of the Housing Authority of the City of Yakima, the entity that executed the within and foregoing instrument, and acknowledged that instrument to be the free and voluntary act and deed of that entity, for the uses and purposes mentioned therein, and on oath stated that she was authorized to execute such instrument. IN WITNESS WHEREOF I have hereunto set my hand and official seal this day of , 1998. (Signature of Notary) (Legibly Print or Stamp Name of Notary) Notary public in and for the state of Washington, residing at My appointment expires 20 50012193.02 DRAFT OF MAY 12, 1998 TRUST INDENTURE BETWEEN HOUSING AUTHORITY OF THE CITY OF YAKIMA AND U.S. BANK TRUST NATIONAL ASSOCIATION as Trustee Dated as of 1, 1998 RELATING TO $[3,700,000] HOUSING AUTHORITY OF THE CITY OF YAKIMA HOUSING REVENUE BONDS, 1998 (NUEVA PRIMAVERA PROJECT) This document was prepared by Foster Pepper & Shefelman PLLC 1111 Third Avenue; Suite 3400 Seattle, Washington 98101 5000090 01 TART ,F, OF CONTENTS ARTICLE I 3 DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS 3 1.1 DEFINITIONS 3 1.2 CONTENT OF CERTIFICATES AND OPINIONS 9 1.3 TN'T'FRPRFTATTON -_ 9 ARTICLE II 11 THE BONDS -. 11 2.1 AUTHORIZATION OF BONDS 11 2.2 TRANSFER OF BONDS 1 1 2.3 FORM .AND EXECUTION OF BONDS 12 2.4 MUTILATED, LOST, STOLEN AND DESTROYED BONDS 13 2.5 OTHER SECURED OBLIGATIONS 13 2.6 OWNERSHIP OF BONDS 13 2.7 NATURE OF SECURITY, ADDITIONAL BONDS 13 2 8 REDEMPTION OF BONDS .. 14 2 9 CANCELLATION.... 14 2,10 OPEN MARKET PURCHASES......... t4 2 11 DESTRUCTION OF BONDS ................. 15 ARTICLE III .... .. 15 FORM AND DETAIL OF THE BONDS 15 3.1 AUTHORIZED AMOUNT, INTEREST RATES AND PAYMENT 15 (1) Authorized Amount 15 (2) Payment of Bond Principal and Interest 15 3 2 REDEMPTION OF BONDS 16 (1) Optional Redemption . 17 (2) Mandatory Redemption 17 (3) Extraordinary Mandatory Redemption 17 (4) Notice and Effect of Call for Redemption 18 ARTICLE IV 19 APPLICATION OF BOND PROCEEDS; 19 4 1 APPLICATION OF BOND PROCEEDS 19 4.2 CREATION OF FUNDS AND ACCOUNTS 20 4.3 BOND FUND 20 (1) Principal andlnterestAccount 20 (2) Reserve Account 22 (3) Investment ofMoney in Bond Fund 23 4.4 PROJECT FUND 23 (1) Maintenance of Project Fund 23 (2) Payments From Project Fund 24 (3) Establishment of Completion 24 (4) Application of Balance in Project Fund 24 (5) Investment of Money in the Project Fund 24 ARTICLE V 25 INVESTMENT OF FUNDS, REBA I FUND 25 50012090 -1- 5.1 INVESTMENT OF FUNDS 25 5.2 ALLOCATION OF L`COME AND LOSSES . 26 5.3 REBATE FUND 26 5 4 SEGREGATION OF MONEY 28 ARTICLE VI 28 AUTHORITY COVENANTS 28 6.1 PERFORMANCE OF AND AUTHORITY FOR COVENANTS 28 6.2 [RESERVED) 28 6 3 CONDEMNATION AWARDS AND INSURANCE PROCEEDS 29 6.4 EXTENSIONS OF PAYMENT OF BONDS 30 6.5 TAX-EXEMPT STATUS OF BONDS 30 6.6 COMPLIANCE WITH CONTLNUING DISCLOSURE REQUIREMENTS 30 30 (1) Undertaking to Provide Annual Financial Information and Notice of Material Events (2) Type ofAnnual Financial Information Undertaken to be Provided.... 31 (3) Amendment of Undertaking 31 (4) Beneficiaries 31 (5) Termination of Undertaking 31 (6) Remedy for Failure to Comply with Undertaking 31 (7) Designation of Oficial Responsible to Administer Undertaking 32 (8) Concerning the Dissemination Agent 32 (9) Trustee to Forward Information 32 6 7 CONTINGENT LOAN AGREEMENT 33 ARTICLE VII 33 EVENTS OF DEFAULT AND REMEDIES OF BONDOWNERS 33 7.1 EVENTS OF DEFAULT 33 7 2 ACCELERATION OF MATURITY ............... 34 7 3 REMEDIES UPON DEFAULT 34 7 4 APPLICATION OF PROJECT REVENUES AND OTHER FUNDS AFTER DEFAULT 35 7.5 TRUSTEE TO REPRESENT BONDOWNERS 36 7.6 BONDOWNERS' DIRECTION OF PROCEEDINGS 37 7 7 LIMITATION ON BONDOWNERS' RIGHT TO SUE 37 7 8 ABSOLUTE OBLIGATION OF AUTHORITY 38 7.9 TERMINATION OF PROCEEDINGS 38 7 10 REMEDIES NOT EXCLUSIVE 38 7.11 NO WAIVER OF DEFAULT 38 ARTICLE VIII 39 CONCERNING THE TRUSTEE 39 8 1 ACCEPTANCE OF TRUST AND PRUDENT PERFORMANCE THEREOF 39 8.2 TRUSTEE MAY RELY UPON CERTAIN DOCUMENTS AND OPINIONS 40 8.3 TRUSTEE NOT RESPONSIBLE FOR INDENTURE STATEMENTS, VALIDITY 41 8 4 LIMITS ON DUTIES AND LIABILITIES OF TRUSTEE 41 8.5 MONEY HELD IN TRUST 42 8 6 COSTS FOR MAINTENANCE OF SUIT; INDEMNIFICATION 42 8.7 INTERVENTION IN JUDICIAL PROCEEDINGS 43 8.8 TRUSTEE TO RETAIN REBATE RECORDS 43 8.9 REPORTS OF ACTIVITIES 43 8.10 COMPENSATION OF TRUSTEE 43 8.11 TRUSTEE MAY HOLD BONDS 44 8 12 QUALIFICATIONS OF TRUSTEE 44 8.13 RESIGNATION OF TRUSTEE 44 8 14 REMOVAL OF TRUSTEE . 45 50012090 -11- 8.15 APPOINTMENT OF SUCCESSOR TRUSTEE 45 8.16 MERGER OF TRUSTEE AA 8.17 TRANSFER OF RIGHTS AND PROPERTY TO SUCCESSOR TRUSTEE 46 8.18 SURVIVAL OF RIGHTS 46 8.19 APPOINTMENT OF A CO -TRUSTEE .... ........ 46 ARTICLE IX 47 DISCHARGE OF OBLIGATIONS TO BONDOWNERS 47 9.1 DEFEASANCE OF BONDS 47 9.2 DISCHARGE OF INDENTURE 48 9.3 NONPRESENTMENT OF BONDS 49 49 ARTICLE X e N PN IIM NT (lF IN F.NTI IRE _ 49 10.1 AMENDMENTS TO INDENTURE 49 10.2 NOTICE OF AIvfENDME*IT 52 53 ARTICLE XI MISCELLANEOUS 53 11.1 SEVERABILITY. 53 11.2 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS 53 11.3 SUCCESSOR IS DEEMED INCLUDED IN ALL REFERENCES TO PREDECESSOR 53 11 4 LIMITATION OF RIGHTS TO PARTIES AND BONDOWNERS 53 11.5 WAIVER OF NOTICE 53 11.6 NOTICES 54 11 7 WAIVER OF PERSONAL LIABILITY 54 11 8 APPLICABLE PROVISIONS OF LAW .. 54 11.9 EXECUTION IN SEVERAL COUNTERPARTS . 54 11.10 NOTICE TO RATING AGENCY ... 54 Exhibit A - Bond Form Exhibit B - Permitted Investments 50012090 TRUST INDENTURE THIS TRUST INDENTURE, made and dated as of 1, 1998, by and between the Housing Authority of the City of Yakima (the "Authority"), a public body corporate and politic organized and existing under the Constitution and laws of the State of Washington (the "State"), and U.S. Bank Trust National Association, a national banking association organized and existing under the laws of the United States of America and having a principal place of business in Seattle, Washington, as Trustee, WITNESSETH: WHEREAS, the Authority is authorized and empowered by chapter 35.82 of the Revised Code of Washington (the "Act") to issue bonds for the purposes provided in the Act; and WHEREAS, the Authority has authorized the issuance of its Housing Revenue Bonds, 1998 (Nueva Primavera Project) (the "Bonds"), in the aggregate principal amount of $[3,700,000] to pay all or part of the costs of constructing the Nueva Primavera Apartments located in the City of Yakima, Washington, to provide a housing project of the Authority (the "Project"); and WHEREAS, U.S. Bank Trust National Association has agreed to accept the duties and responsibilities of the Trustee and Bond Registrar hereunder according to the terms hereof; and WHEREAS, to provide for the authentication, issuance and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof and premium, if any, and interest thereon, the Authority has authorized the execution and delivery of this Indenture; and WHEREAS, all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Bond Registrar, and duly issued, the valid, binding and legal obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes set forth herein in accordance with its terms, have been done and taken, and the execution and delivery of the Indenture have been in all respects duly authorized; 50012090 -1- NOW, THEREFORE, THIS INDENTURE WITNESSETH: GRANTING CLAUSES The Authority, in consideration of the premises and the acceptance by the Trustee of hereby and the and acceptance of the Bonds by the Owners the trusts created of u purchase thereof, and for other good and valuable consideration, the receipt of which is hereby acknowledged, to secure the payment of the principal of and premium, if any, and interest on the Bonds according to their tenor and effect and to secure the performance and observance by the Authority of all the covenants expressed or implied herein and in the Bonds, does hereby bargain, sell, convey, mortgage, assign, pledge and grant, without recourse, all of the Authority's right, title and interest (whether now or hereafter existing) in and to the Trust Estate and a security interest in the Trust Estate to the Trustee and its successors in trust and assigns forever, for the securing of the performance of the obligations of the Authority hereinafter set forth, as follows: i . Ali Net Operating Income and, if the Trustee appoints a receiver or exercises its rights under the Deed of Trust pursuant to Section 7.3, all Project Revenues; 2. All General Revenues of the Authority; 3. The lien on the real property and improvements thereon and personal property therein conveyed by the Deed of Trust; 4. All funds and accounts established under this Indenture and all investment Earnings thereon and money, securities and obligations therein (subject to disbursements from any such fund or account upon the conditions set forth in this Indenture); 5. All rights of the Authority to obtain advances made by the City to or on behalf of the Authority under the terms of the Contingent Loan Agreement; 6. All money and securities from time to time held by the Trustee under the terms of this Indenture and any and all other real or personal property of every name and nature concurrently herewith or from time to time hereafter by delivery or by writing of any kind conveyed, mortgaged, pledged, assigned or transferred as and for additional security hereunder by the Authority or by anyone in its behalf, or with its written consent, to the Trustee, which is hereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof; and 7. To the extent not covered hereinabove, all proceeds of all of the foregoing; 50012090 -2- TO HAVE AND TO HOLD all and singular the Trust Estate, whether now owned or hereafter acquired, to the Trustee and its respective successors in trust and assigns forever; IN TRUST NEVERTHELESS, upon the terms and trusts set forth herein for the equal and proportionate benefit, security and protection of the City and all present and future Owners of the Bonds issued under and secured by this Indenture without privilege, priority or distinction as to the lien or otherwise of any of the Bonds over any other Bonds except as expressly provided herein; PROVIDED, HOWEVER, that if the Authority, its successors or its assigns shall well and truly pay, or cause to be paid, the principal of and premium, if any, and interest on the Bonds due or to become due thereon, at the times and in the manner mentioned in the Bonds and as provided in Article IX according to the true intent and meaning thereof, and shall cause the payments to be made as required under Article IV, or shall provide, as permitted hereby, for the payment thereof in accordance with Article IX, and shall well and truly keep, perform and observe all the covenants and conditions pursuant to the terms of this Indenture to be kept, performed and observed by it, and shall pay or cause to be paid to the Trustee all sums of money due or to become due in accordance with the terms and provisions hereof and of the Deed of Trust and the other Bond Documents (as defined in the Deed of Trust), then upon such final payments or deposits as provided in Article IX, this Indenture and the rights hereby granted shall, except as otherwise provided herein, cease, terminate and be void and the Trustee shall thereupon cancel and discharge this Indenture and execute and deliver to the Authority such instruments in writing as shall be requisite to evidence the discharge hereof. THIS INDENTURE FURTHER WITNESSETH, that the Authority covenants to and agrees with the Trustee, for the benefit of the City and the respective Owners from time to time of the Bonds, as follows: ARTICLE I DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS 1.1 Definitions. Unless the context requires otherwise, the terms defined in this section shall, for all purposes of this Indenture and of any indenture supplemental hereto and of any certificate, opinion or other document mentioned herein, have the meanings specified herein, to be equally applicable to both the singular and plural forms of any of the terms defined herein. Accountant means any firm of independent certified public accountants selected by the Authority. Act means chapter 35.82 of the Revised Code of Washington, as amended. Additional Bonds means any bonds or notes issued pursuant to Section 2.7. 50012090 -3- Authority means the Housing Authority of the City of Yakima, a public body corporate and politic of the State of Washington, Authorized Denomination means $5,000 or any integral multiple thereof within a single maturity. Authorized Investments means any investment that is lawful for housing authorities in the State. A list of investments that are lawful on the Date of Issue is attached hereto as Exhibit B. Authorized Representative means, with respect to the Trustee, any trust officer thereof; and with respect to the Authority, the Chair of its Board of Commissioners or its Executive Director or any other person(s) designated by resolution of the Board of Commissioners as the authorized representative of the Authority. Bond or Bonds means one or more of the $[3,700,000] Housing Authority of the City of Yakima Housing Revenue Bonds, 1998 (Nueva Primavera Project), or any replacement thereof authorized by, and at any time outstanding pursuant to, this Indenture. Bond Counsel means the firm of Foster Pepper & Shefelman PLLC, of Seattle, Washington, or any other firm of nationally recognized bond counsel, designated by the Authority as its bond counsel for the Bonds. Bond Fund means the fund of that name established pursuant to Section 4.2. Bond Register means the books for registration of the Bonds kept for the Authority by the Bond Registrar as provided in Section 2.2. Bond Registrar means the paying agent and bond registrar for the Bonds, initially the Trustee. Bond Year means, as to the first Bond Year, the period from the Date of issue to 30/31, 1999, and, thereafter, the annual period ending on 30/31 of each year. Bondowner means the Owner of any Bond. Business Day means any day, other than a Saturday or a Sunday, on which banking institutions are open in the State of Washington and in the states in which the principal corporate trust office of the Trustee and any of the offices of the Bond Registrar designated from time to time by the Bond Registrar for the transfer or exchange of Bonds are located. 50012090 .4. City means the City of Yakima, Washington. Code means the Internal Revenue Code of 1986, as amended, or any successor federal income tax statute or code. Any reference to a provision of the Code shall include the applicable regulations of the Department of the Treasury promulgated or proposed with respect to such provision. Computation Period means each period for which the Rebate Amount is determined. Condemnation Award means the total condemnation proceeds actually paid by the condemnor as a result of the condemnation of all or any part of the property subject to the Deed of Trust, less the actual costs and expenses, including attorneys' fees, incurred by the Authority and/or the Trustee in obtaining such award. Contingent Loan Agreement means the Contingent Loan Agreement dated as of , 1998, between the Authority and the City. Costs of Issuance means all expenses of issuing the Bonds or this Indenture, including but not limited to legal, fiscal and printing expenses, the initial fees of the Trustee (including any fees of counsel to the Trustee) under this Indenture, or the initial fee of any bank or other agency for collection or administration of the Bonds, advertising expenses, any underwriter's discount on or placement fee for the Bonds, financial advisor fees and expenses, and any and all other similar out-of-pocket expenses incurred for the purpose of issuing the Bonds. Date of Issue means the date the Bonds are issued and delivered to the initial purchaser thereof. Declaration of Acceleration means a declaration given in accordance with the provisions of Section 7.2 that all principal of and interest on the Bonds are due and payable immediately. Deed of Trust means the Deed of Trust, Assignment of Rents and Leases and Security Agreement under which the Authority is grantor and the Trustee is beneficiary, constituting a lien on the real property and improvements constituting the Project. Determination of Taxability means the receipt by the Trustee of (1) a copy of written notice from the Commissioner or any District Director of the Internal Revenue Service or a determination by any court of competent jurisdiction, or (2) an opinion of Bond Counsel, in either case to the effect that interest on the Bonds is not excludable from gross income for regular federal income tax purposes under Section 103(a) of the Code from gross income of any Owners of the Bonds. Event of Default means any of the events specified in Section 7.1. 50012090 -5- Fiscal Year means the fiscal year of the Authority, initially the 12 -month period ending on 31 of each year. Funds means the Funds created and established pursuant to this Indenture, including, but not limited to, the Bond Fund and the Project Fund, but excluding the Rebate Fund. General Revenues means all revenues (other than Project Revenues) of the Authority from any source, but only to the extent that those revenues are available to pay debt service on the Bonds and are not pledged, by law, regulation, contract, covenant, resolution, deed of trust or otherwise, solely to another particular purpose. Government Obligations means (1) direct obligations of the United States of America (including obligations issued or book -entry on hooks of the Department of the 11I1C1UUlI1� VUf1�tlltouD held in vvvae-v...ea) form..•- the .-,-�__.. - _�_ Treasury of the United States of America) or obligations the timely payment of the principal of and interest on which are fully guaranteed by the United States of America, including instruments evidencing an ownership interest in securities described in this clause (1); and (2) obligations, debentures, notes or other evidences of indebtedness issued or guaranteed by any Export -Import rW�.. Bank United States, the following: Federal Home Loan Bank System, Expolt-Impoft of the United States, Federal Financing Bank, Federal Land Banks, Government National Mortgage Association, Federal Home Loan Mortgage Corporation, Federal National Mortgage Association or Federal Housing Administration. Hazardous Substances Agreement means the Hazardous Substances Warranty/Indemnity Agreement between the Authority and the Trustee dated as of , 1998. Indenture means this Trust Indenture, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture. Insurance Proceeds means the total proceeds of casualty insurance actually paid or payable in respect of insurance on the Project, less the actual costs and expenses, including attorneys' fees, incurred by the Authority and/or the Trustee in collecting such proceeds. Interest Payment Date means the first day of each and after the Date of Issue. In the case of payment of defaulted interest, "Interest Payment Date" also means the date of such payment established pursuant to Section 3.1(2). Investment Earnings means all net earnings derived from the investment of money held in any of the Funds. Net Operating Income means Project Revenues other than Investment Earnings, less Operation and Maintenance Costs. Operation and Maintenance Costs means all necessary costs to the Authority of operating and maintaining the Project, including but not limited to administrative and general expenses, costs of ir-urance (including reasonable contributions for self-insurance reserves, if 50012090 -6- any), consulting and technical services and repairs and replacements (to the extent not properly classifiable as capital costs) and reasonable reserves therefor, but excluding depreciation (or reserves therefor), amortization of intangibles or other bookkeeping entries of a similar nature and debt service on the Bonds and any other obligations of the Authority relating to the Project. Outstanding, when used as of any particular time with reference to Bonds, means all Bonds theretofore, or thereupon being, authenticated and delivered by the Bond Registrar under this Indenture except (1) Bonds theretofore cancelled by the Bond Registrar or surrendered to the Bond Registrar for cancellation; (2) Bonds with respect to which all liability of the Authority shall have been discharged in accordance with Section 9.1 or as described in Section 9.3, and (3) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Bond Registrar pursuant to this Indenture. Owner, whenever used herein with respect to a Bond, means the Person in whose name such Bond is registered on the Bond Register. Person means an individual, corporation, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. Principal and Interest Account means the account of that name in the Bond Fund. Project means, depending on the context (1) the construction by the Authority of the Nueva Primavera Apartments on real property legally described in Exhibit A to the Deed of Trust and located in the City of Yakima, Washington, which construction and the rental of at least 50% of the dwelling units of which to low-income persons was declared by the Resolution to be a housing project of the Authority, or (2) the Nueva Primavera Apartments. Project Fund means the fund of that name created pursuant to Section 4.2. Project Revenues means all amounts due to or received by the Authority or by the Trustee for the account of the Authority pursuant or with respect to the Project, including without limitation all lease payments, Insurance Proceeds and Condemnation Awards and proceeds resulting from foreclosure of the Deed of Trust, and all Investment Earnings. Rating Agency means the nationally recognized rating agency or agencies, if any, at the time rating the Bonds at the request of the Authority. Rebate Amount means an amount equal to the sum of (1) the excess of (a) the aggregate amount earned from the Date of Issue on all nonpurpose investments in which gross proceeds of the Bonds are invested (not including income attributable to the excess amount described in this clause (1)) over (b) the amount that would have been earned if the yield on such nonpurpose investments (not including income attributable to the excess amount described in 50012090 -7- this clause (1)) had been equal to the yield on the Bonds, plus (2) all income attributable to the excess amount described in clause (1) whether or not that income exceeds the yield or, thc Bonds (i.e., whether or not that income was earned at a yield higher than the yield on the Bonds), all as determined in accordance with Section 148 of the Code. Rebate Fund means the fund of that name, the creation of which is provided for in Section 5.3. Record Date means the 15th day of the month preceding each Interest Payment Date. Required Debt Service means the amount required to pay principal of and interest on the Bonds when due, including amounts required for the mandatory redemption of Bonds pursuant to Section 3.2(2). Reserve Account means the account of that name in the Bond Fund. Reserve Requirement means, with respect to the Bonds, $[ ], and with respect to �, � �r rT..,.., the optional or any Additional Bonds, the amount described in Section 2. . Upon extraordinary mandatory redemption, open market purchase, or defeasance of a portion of the Bonds or any Additional Bonds, the Reserve Requirement shall be reduced to an amount equal to the average annual debt service on the Bonds or Additional Bonds, as applicable, Outstanding immediately after such redemption, purchase or defeasance. Resolution means Resolution No. adopted by the Authority on 1998, authorizing the issuance of the Bonds. Special Record Date means the date established by the Trustee pursuant to Section 3.1(2) as a record date for the payment of defaulted principal of or interest on the Bonds. State means the State of Washington. Supplemental Indenture means any indenture hereafter duly authorized and entered into between the Authority and the Trustee, supplementing, modifying or amending this Indenture; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. Trust Estate means the trust estate pledged by the Authority and described in the Granting Clauses of this Indenture. Trustee means U.S. Bank Trust National Association, a national banking association organized and existing under the laws of the United States of America and having a principal place of business in Seattle, Washington, or its successor, as trustee hereunder. UCC means the Uniform Commercial Code (chapter 62A.9 RCW). 50012090 -8- 1.2 Content of Certificates and Opinions. Every certificate or opinion provided for in this Indenture with respect to compliance with any provision hereof made or given by an officer of the Authority may be based, insofar as it relates to legal or accounting matters, upon a certificate or opinion or representation given by counsel or an Accountant, unless such officer knows, or in the exercise of reasonable care should have known, that the certificate, opinion or representation with respect to the matters upon which such certificate or statement is based is erroneous. Any such certificate or opinion made or given by counsel or an Accountant may be based, insofar as it relates to factual matters with respect to which information is in the possession of the Authority, upon a certificate or opinion of or representation by an officer of the Authority, unless such counsel or Accountant knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which such certificate, opinion or representation is based is erroneous. The same officer of the Authority, or the same counsel or Accountant, as the case may be, need not certify to all of the matters required to be certified under any provision of this Indenture, but different officers, counsel or Accountants may certify to different matters. 1.3 Interpretation. Unless otherwise clear from the context of the terms, words or phrases, the following principles govern the interpretation of terms, words and phrases used in this Indenture: (1) Articles, sections, paragraphs and clauses mentioned by number only without reference to another document are those so numbered which are contained in this Indenture. (2) Captions, titles or headings preceding any article, section or subsection herein, and any table of contents or index attached hereto, are solely for convenience of reference and are not part of this Indenture and shall not affect its meaning, construction or effect. (3) Terms such as "herein," "hereunder," "hereby," "hereto" and "hereof" refer to this Indenture as a whole and not to any particular section hereof unless so indicated; "heretofore" and "hereafter" mean before and after the date of adoption of this Indenture. (4) Words importing any gender include masculine, feminine and neuter genders, where applicable. (5) Words importing the maturity of a Bond do not include or connote the becoming due of such Bond upon redemption thereof prior to maturity or the payment of the redemption price thereof. (6) Words importing the redemption or redeeming or calling for redemption of a Bond do not include or connote the payment of such Bond at its stated maturity. 50012090 -9- (7) Words importing the singular number include the plural number, and vice versa, where applicable. (8) If not otherwise specifically provided for herein, and subject to Section 8.1(2), any notice required or permitted to be given shall be deemed given where addressed (if address is necessary to transmission) as provided in Section 11.6, (a) on the day on which it is given by messenger or telecopy or other electronic means capable of producing a written notice (provided, however, that if notice is given by telecopy or other electronic means the Person sending the notice shall promptly mail or deliver the original or print of the notice to the recipient, and if the notice is received (i) on a day other than a Business Day or (ii) after the close of the recipient's business on a Business Day, such notice shall be deemed given on the first Business Day following the day on which it is received); (b) on the Business Day following the day on which it is given by telegraphic means; or (c) on the fifth day following its mailing by certified or registered mail, return receipt requested. Notwithstanding the foregoing, any notice required or permitted to be given by the Trustee to any Bondowner shall be deemed effective at the time of its mailing or transmission by telegraphic or other electronic means. (9) All references herein to particular sections of the Code include any and all successor sections to the referenced sections. (10) Unless the context indicates otherwise, all references to rating categories shall be deemed to be without regard to any refinement or gradation of such categories by numerical modifiers or otherwise. (11) If the Trustee is also the Bond Registrar hereunder, all references herein to transfers of funds from the Trustee to the Bond Registrar shall be of no effect. (12) All references herein to "counsel fees," "attorney fees" or the like include fees and disbursements of in-house or outside counsel, whether or not suit is instituted, and including fees and disbursements preparatory to and during trial and appeal and in any bankruptcy or arbitration proceeding. 50012090 -10- ARTICLE II THE BONDS 2.1 Authorization of Bonds. The Bonds are authorized to be issued hereunder to obtain money to carry out the purposes of the Resolution. The Bonds are designated "Housing Authority of the City of Yakima Housing Revenue Bonds, 1998 (Nueva Primavera Project)." The aggregate principal amount of Bonds that may be issued and Outstanding under this Indenture shall not exceed $[3,700,000]. This Indenture constitutes a continuing agreement with the Trustee and the Owners from time to time of the Bonds to secure the full payment of the principal of and premium, if any, and interest on all such Bonds subject to the covenants, provisions and conditions contained herein. 2.2 Transfer of Bonds. (1) The Authority shall cause books (the Bond Register) for the registration and for the transfer of the Bonds as provided in the Bonds, this Indenture and chapter 43.80 RCW to be kept by the Bond Registrar. (2) Upon surrender for transfer of any Bonds at an office of the Bond Registrar designated by the Bond Registrar for that purpose, the Bond Registrar shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds of the same interest rate and maturity and for the aggregate principal amount the Owner is entitled to receive. No transfer of any Bond shall be binding upon the Bond Registrar, the Authority or the Trustee unless made at such office and shown on the Bond Register. (3) Bonds to be exchanged shall be surrendered at an office of the Bond Registrar designated by the Bond Registrar for that purpose, and the Bond Registrar shall authenticate and deliver in exchange therefor the Bond or Bonds that the Bondowner making the exchange shall be entitled to receive. (4) Any Bond presented for transfer or payment (if so required by the Bond Registrar) shall be accompanied by a written instrument or instruments of transfer or authorization for payment, in form and with guaranty of signature satisfactory to the Bond Registrar, duly executed by the Owner thereof or by its attorney duly authorized in writing. (5) The costs of printing any new Bonds and any services rendered or expenses incurred by the Bond Registrar or the Authority in connection with any exchange or transfer of Bonds (including the exchange or transfer of a Bond redeemed only in part) shall be paid by the Authority, except that as a condition to a transfer of a particular Bond, the Bond Registrar may require payment by the Bondowner of a sum sufficient to cover any tax, fee or other governmental charge that the Bond Registrar is required to pay in relation thereto. (6) Each Bond delivered upon transfer of or in lieu of any other Bond shall be a valid obligation of the Authority evidencing the same debt as the Bond surrendered, and 50012090 -11- except as otherwise provided herein shall be entitled to all of the security and benefits hereof to , , _ti ..11 al.., ..:,-.1-,*.. to interest arrnlPlj A11(� the same extent as the Bond surrendered, shall carry all the rights accr_____ unpaid, and to accrue, which were carried by such other Bond, and shall be so dated that neither gain nor loss of interest shall result from such transfer or exchange. (7) The Bond Registrar shall not be required to exchange or transfer any Bond or portion thereof that has been selected for redemption and also shall not be required to transfer or exchange any Bond or portion thereof during the period in which the Bond Registrar is selecting Bonds for redemption or during the 15 days preceding any principal payment or redemption date. 2.3 Form and Execution of Bonds. (1) The Bonds shall be in Authorized Denominations and shall be in substantially the form attached as Exhibit A. The Bonds shall be executed on behalf of the Authority by the facsimile or manual signatures of the Chair of the Board of Commissioners and Executive Director of the Authority and shall be sealed with an impression or a facsimile of the seal of Authority and authenticated as provided in Section 2,3(2) below. The Bonds LiiC the r.., may be typed or printed on good bond paper. Neither the death nor infirmity nor the failure of such officers to hold such office subsequent to the date of this Indenture and prior to the execution and delivery of the Bonds or any transferred Bond certificates shall affect the validity or enforceability of such Bonds. (2) No Bond shall be valid or obligatory for any purpose or entitled to any security or benefit under this Indenture unless a Certificate of Authentication on such Bond, substantially in the form set forth below, shall have been executed by an authorized officer or signatory of the Bond Registrar, and such executed Certificate of Authentication upon any such Bond shall be conclusive evidence that such Bond has been duly executed, registered, authenticated and delivered under this Indenture: 50012090 Date of Authentication: CERTIFICATE OF AUTHENTICATION This bond is one of the fully registered Housing Authority of the City of Yakima Housing Revenue Bonds, 1998 (Nueva Primavera Project), described in the Indenture. U.S. BANK TRUST NATIONAL ASSOCIATION BOND DtLVTQTR{u? By Authorized Signer -12- Certificates of Authentication on different Bonds need not be signed by the same person. 2.4 Mutilated. Lost, Stolen and Destroyed Bonds. In case any Bond issued hereunder shall become mutilated or be destroyed, stolen or lost, the Authority shall, if not then prohibited by law, cause to be executed and delivered a new Bond of like amount, interest rate, maturity date and tenor in exchange and substitution for and upon cancellation of such mutilated Bond, or in lieu of and in substitution for such destroyed, stolen or lost Bond, upon payment by the Owner thereof of any applicable tax or governmental charge and the reasonable expenses and charges of the Authority and the Bond Registrar in connection therewith, and in the case of a Bond destroyed, stolen or lost, the filing with the Bond Registrar of evidence satisfactory to it that such Bond was destroyed, stolen or lost, and of the ownership thereof, and furnishing the Authority and the Bond Registrar with indemnity satisfactory to each of them. If the mutilated, destroyed, stolen or lost Bond already has matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Bond prior to payment. 2.5 Other Secured Obligations. Nothing contained in this Indenture shall prohibit or prevent, or be deemed or construed to prohibit or prevent, the Authority from issuing, without regard to the provisions of this Indenture, bonds, notes, certificates, warrants or other evidences of indebtedness which are (1) payable as to principal and interest and redemption premium solely from revenues, proceeds and earnings which are not Project Revenues or Bond proceeds, and (2) not payable, in whole or in part, from money in any of the Funds or in the Rebate Fund. 2.6 Ownership of Bonds. The Authority, the Bond Registrar and the Trustee may deem and treat the Person in whose name any Bond is then registered on the Bond Register or its nominee, whether or not such Bond shall be overdue, as the Owner of such Bond for the purpose of receiving payment of the principal of and premium, if any, and interest on such Bond and for all other purposes whatsoever, and the Authority, the Bond Registrar and the Trustee shall not be affected by any notice to the contrary. 2.7 Nature of Security; Additional Bonds. The Bonds are special obligations of the Authority payable solely from Net Operating Income and Investment Earnings and from the General Revenues of the Authority, and from the money and investments held in the Funds held by the Trustee hereunder until disbursed as provided herein. The Bonds also are secured by the Deed of Trust. The Bonds are not a debt of the City of Yakima, the State or any political subdivision thereof. Neither the City of Yakima, the State nor any political subdivision thereof (except the Authority from the sources described herein) shall be liable for payment of the Bonds nor in any event shall the principal of, premium, if any, on or interest on the Bonds be payable out of any funds or assets other than those pledged to that purpose by the Authority herein and in the Resolution. The Authority does not have taxing power. 50012090 -13- The Authority reserves the right and option to issue Additional Bonds [in an aggregate .1 Bonds _ �.. the Project rt principal amount not to exceed $ J on a parity of lien with the Bonds on the 1 loje� 1. and Project Revenues and the Reserve Account for the purpose of financing all or a part of the costs of constructing additional improvements or further rehabilitating existing improvements on the property on which the Project is located, but only if the following conditions are met: (1) if the Contingent Loan Agreement is in effect, the Trustee has received the prior written consent of the City to the issuance of such Additional Bonds; (2) there shall not have occurred and be continuing any Event of Default; (3) there shall not have occurred and be continuing an event of default under the Deed of Trust; and (4) the amount in the Reserve Account has been increased by an 1 debt for the Additional Rnnrjc amount equal to the average annual debt service for - (5) the Authority shall have entered into an undertaking for the benefit of the holders of the Additional Bonds if and as required by SEC Rule 15c2-12. Unless the Trustee has received notice or has knowledge to the contrary, the Trustee may rely on a certificate from an Authorized Representative of the Authority in determining whether an Event of Default or an event of default under the Deed of Trust has occurred and is continuing. 2 8 Redemption of Bonds. The Bonds shall be redeemable as provided in Section 3.2. Under certain circumstances, on the conditions, in the manner and with the effect set forth in this Indenture, the principal of all Bonds issued and then outstanding may become or may be declared due and payable before the stated maturity thereof, together with interest accrued thereon. 2.9 Cancellation. All Bonds that have been redeemed shall be cancelled and destroyed by the Bond Registrar and shall not be reissued. 2.10 Open Market Purchases. Notwithstanding anything in this Indenture to the contrary, the Authority may at any time purchase Bonds in the open market. The Authority shall notify the Trustee of any such purchase and, if the Bonds are in certificated form, shall immediately deliver such Bonds to the Bond Registrar for cancellation, together with a certificate specifying the date(s) of such purchase. If the Bonds are not in certificated form, any such purchase shall be deemed to be a redemption of such Bonds upon notice to the Trustee of such purchase, whether or not such Bonds are otherwise subject to redemption at the time of such purchase. Such Bonds shall not be considered Outstanding for the purposes of Section 10.1 from and after the date of any such purchase. 50012090 -14- 2.11 Destruction of Bonds. Whenever any Bonds shall be delivered to the Bond Registrar for cancellation pursuant to this Indenture or if received by the Bond Registrar pursuant to Section 2.4, such Bonds shall be cancelled promptly, held by the Bond Registrar for its retention period then in effect, and thereafter destroyed by the Bond Registrar in accordance with its general practices and procedures in effect from time to time after payment, if applicable, of the principal amount and premium, if any, and interest accrued thereon, in each case after a reasonable period of time, and counterparts of a certificate of destruction evidencing such destruction shall be furnished by the Bond Registrar to the Trustee and the Authority. ARTICLE III FORM AND DETAIL OF THE BONDS 3.1 Authorized Amount, Interest Rates and Payment. (1) Authorized Amount. The Bonds shall be datect , 1998, and shall be subject to redemption as provided in Section 3.2. The Bonds shall be in the aggregate principal amount of $[3,700,000] and shall be in Authorized Denominations. The Bonds shall be fully registered as to principal and interest and shall be numbered separately in the manner and with any additional designation as the Bond Registrar deems necessary for the purpose of identification. The Bonds shall mature on in the years and amounts and shall bear interest at the rates per annum set forth below: Maturity Year Amount Interest Rate [INSERT MATURITY SCHEDULE] (2) Payment of Bond Principal and Interest. The principal of and interest on the Bonds are payable in lawful money of the United States of America. Payments of interest on each Bond shall be paid by the Bond Registrar on each Interest Payment Date, commencing , 19 , by check mailed by first class mail, postage prepaid, on the Interest Payment Date to the Owner of such Bond as shown on the Bond Register at the close of business on the applicable Record Date at the address of the Owner as it appears on the Record Date in the Bond Register or, at the written request of an Owner[ of $1,000,000 or more in aggregate principal amount of Bonds], by wire transfer of immediately available funds to an account within the United States designated in writing by the Owner not less than 15 days 50012090 -15- prior to the Record Date. Payments of principal of any Bond shall be made upon presentation and surrender of the Bond to an office of the Bond Registrar designated by the Bond Registrar for that purpose Interest on the Bonds shall be computed on the basis of a 360 -day year consisting of twelve 30 -day months. Interest on the Bonds from their date or from the most recent date to which interest has been paid shall be payable on each Interest Payment Date until the Bonds mature or are duly called for redemption prior to maturity. Any principal or interest not punctually paid or duly provided for hereunder shall forthwith cease to be payable to the Owners as of the applicable Record Date and shall be paid to the Persons in whose names the Bonds are registered at the close of business on a Special Record Date for the payment of such defaulted principal or interest, such Special Record Date and the date of such payment to be L__ _ behalf fixed by the Trustee in its sole discretion and notice thereof to be given by or on behal of the Trustee to the Owners not less than 10 days prior to such Special Record Date. The interest payable on each redemption date or Interest Payment Date shall be that interest which has accrued through the last day preceding the Interest Payment Date or, in the case of the maturity or redemption of the Bonds, the last day preceding the date of such maturity or the date fixed for redemption, as the case may be. 3.2 Redemption of Bonds. The Bonds are subject to redemption prior to maturity as provided in this section. In the case of a redemption of fewer than all of the Outstanding Bonds of a particular maturity pursuant to this Section 3.2, the Trustee shall call or cause to be called Bonds of that maturity for redemption randomly in the manner determined by the Bond Registrar in its sole discretion. No Bond shall remain Outstanding having a principal amount that is not an Authorized Denomination. The Bond Registrar shall notify the Authority and the Trustee promptly in writing of any Bonds selected for redemption and, in the case of any Bond selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Bonds shall relate, in the case of any Bond redeemed or to be redeemed only in part, to the portion of the principal of such Bond that has been or is to be redeemed, Notice of redemption shall be given in accordance with the further provisions of paragraph (4) of this Section 3.2. On each redemption date the Trustee shall transfer to the Bond Registrar, but only from and to the extent of funds held by the Trustee hereunder available for that purpose, an amount sufficient to pay the redemption price of all Bonds or portions thereof to be redeemed on that date. 50012090 -16- (1) Optional Redemption. The Bonds maturing on or before , are not subject to optional redemption prior to their maturity. Bonds maturing [on or after /in the years ] are subject to redemption on any date on or after , at the option and written direction of the Authority given to the Trustee at least 45 days prior to the redemption date, in whole or in part with maturities selected by the Authority, at a price of par plus accrued interest to the date of redemption. The Authority shall not cause the optional redemption of Bonds under this Section 3.2(1) if amounts are owed to the City under the terms of the Contingent Loan Agreement. (2) Mandatory Redemption. The Bonds maturing in the year are subject to mandatory redemption at par plus accrued interest to the date of redemption on in years and amounts as follows: Year Amount [INSERT MANDATORY REDEMPTION SCHEDULE] If Bonds maturing in the year have been redeemed other than as required by the schedules set forth above, the principal amount of Bonds previously redeemed shall be credited against such scheduled redemptions in [inverse] chronological order. If Bonds maturing in the years] [and ] have been defeased or redeemed pursuant to an extraordinary redemption provision hereof, the principal amount of such Bonds so defeased or redeemed shall be credited against the scheduled redemptions set forth above on a pro -rata basis within each maturity. (3) Extraordinary Mandatory Redemption. The Bonds are subject to extraordinary mandatory redemption prior to maturity at a redemption price equal to the principal amount to be redeemed plus accrued interest thereon to the date of redemption, (a) as a whole or in part within maturities selected by the Authority, on the first Interest Payment Date for which timely notice of redemption may be given, with the Insurance Proceeds or a Condemnation Award (and, if necessary, other money legally available therefor) if so required by Section 6.3, (b) as a whole or in part within maturities selected by the Authority, on the first date for which timely notice of redemption can be given upon receipt by the Trustee of an opinion of Bond Counsel to the effect that such redemption is required to prevent a Determination of Taxability, or (c) as a whole if the City gives written notice to the Trustee of its election to cause the extraordinary redemption of the Bonds pursuant to the Contingent Loan Agreement and deposits with the Trustee the amount necessary, together with other money held by the Trustee hereunder and available to the purpose, to pay the principal of and interest on the Bonds coming due as a result of such redemption[, or (d) as a whole or in part, on the first Interest Payment Date for which timely notice can be given in accordance with the provisions of Section 3.2(4), after completion of the Project, in accordance with the provisions 50012090 -17- of Section 4 4(4) 1 The Trustee shall not be required to obtain any such opinion of Bond Counsel described in (b) above, and the expense of obtaining any such opinion shall be paid by the Authority or from the Trust Estate. (4) Notice and Effect of Call for Redemption. The Trustee, or the Bond Registrar on behalf of the Trustee, shall give notice of redemption by first class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the redemption date to each Owner of Bonds to be redeemed at the address of such Owner appearing in the Bond Register, and also to the Rating Agency, if any, at its office in New York, New York (or its successor), to BancAmerica Robertson Stephens at its principal office in Seattle, Washington (or its successor), and to such other Persons as the Authority shall specify to the Trustee in writing, including all Persons then required by law or regulation to receive notice of redemption of the Bonds. The failure of the Trustee to mail notice of redemption to Persons other than the Owners of Bonds to be redeemed shall not affect the sufficiency of the proceedings for redemption. The Trustee shall be entitled to request, as an expense of the Trust Estate, receive and rely upon an opinion of counsel (which may be Bond Counsel) in determining who is required to receive such notice. Notwithstanding the foregoing, notice of the mandatory redemption of Bonds to prevent a Determination of Taxability shall be given by the Trustee, or by the Bond Registrar on behalf of the Trustee, within five Business Days of receipt by the Trustee of the opinion of Bond Counsel described in Section 3.2(3) to the effect that such redemption is required, and the redemption date shall be not more than 10 days after the notice of such redemption is mailed by the Trustee or the Bond Registrar. 50012090 All notices of redemption shall state: (a) the redemption date; (b) the redemption price; (c) the name of the Bonds to be redeemed, the principal amount of Bonds to be redeemed, and, if less than all Outstanding Bonds are to be redeemed, the CUSIP numbers or other identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed; (d) that on the redemption date the redemption price of each such Bond will become due and payable to the extent of funds on deposit with the Trustee for that purpose, and that interest on the principal amount of each such Bond to be redeemed shall cease to accrue on and after such date; (e) the place or places where such Bonds must be surrendered for payment of the redemption price thereof; and (f) such additional information as the Trustee or the Authority shall deem appropriate. -18- Notice of redemption having been given as aforesaid, the principal amount of the Bonds so to be redeemed shall become due and payable on the redemption date at the redemption price specified, and on and after such date (unless the Authority shall default in the payment of the redemption price) such principal amount of the Bonds shall cease to bear interest. Upon surrender of any such Bond for redemption in accordance with such notice, such Bond shall be paid at the redemption price thereof to the extent that money is on deposit with the Bond Registrar for that purpose. Neither the failure of an Owner to receive such notice nor any defect in any notice shall affect the sufficiency of the proceedings for such redemption. If any Bond called for redemption shall not be so paid on the redemption date upon proper surrender of the Bond for redemption, the redemption price and, to the extent lawful, interest thereon shall, until paid, bear interest from the redemption date at the rate borne by the Bond immediately before the redemption date. Notwithstanding the foregoing, with respect to optional redemptions only, if the Bond Registrar does not have funds in its possession on the redemption date sufficient to pay the redemption price (including interest accruing to the redemption date) of all of the Bonds to be optionally redeemed for any reason (including, but not limited to, failure to issue any refunding obligations intended for such purpose on or prior to the redemption date), then the purported optional redemption and such notice of redemption shall be void, and the Bond Registrar shall so notify the Trustee. Such event shall not constitute an Event of Default hereunder. If any Bond is to be redeemed only in part, it shall be surrendered to the Bond Registrar (with, if the Bond Registrar so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Bond Registrar duly executed by, the Owner thereof or its attorney duly authorized in writing) and the appropriate officers of the Authority shall execute and the Bond Registrar shall authenticate and deliver to the Owner of such Bond, without service charge, a new Bond or Bonds of the same maturity and interest rate and of any Authorized Denomination or Authorized Denominations, as requested by such Owner, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Bond surrendered. ARTICLE IV APPLICATION OF BOND PROCEEDS; CREATION OF FUNDS AND ACCOUNTS 4.1 Application of Bond Proceeds. All of the accrued interest on and proceeds of the Bonds received by the Authority from the purchaser thereof shall be paid to the Trustee on the Date of Issue. Immediately upon receipt thereof, the Trustee shall deposit $ of Bond proceeds in the Reserve Account in the Bond Fund, $ , representing accrued interest, in the Principal and Interest Account in the Bond Fund and the remainder in the Project Fund. 50012090 -19- 4.2 Creation of Funds and Accounts. The following Funds and accounts shall be created and established with the Trustee as needed to comply with the provisions of this Indenture: (1) the Bond Fund, consisting of the Principal and interest Account and the Reserve Account; and (2) the Project Fund. Each Fund and account shall be maintained by the Trustee as a separate and distinct trust fund or account to be held, managed, invested, disbursed and administered as provided in this Indenture. All money deposited in the Funds and accounts created hereunder shall be used solely the purposes forth in this Indenture- The Trustee shall keep and maintain for 6116. set ........ ... ..�..,- -- - adequate records pertaining to each Fund and account, and all disbursements therefrom, in accordance with its general practices and procedures in effect from time to time. The Trustee shall, at the written direction of an Authorized Representative of the Authority, and may, in its discretion, establish such additional accounts within any Fund, and subaccounts within any of the accounts, as the Authority or the Trustee may deem necessary or useful for the purpose of identifying more precisely the sources of payments into and disbursements from that Fund and its accounts, or for the purpose of complying with the requirements of the Code relating to arbitrage, but the establishment of any such account or subaccount shall not alter or modify any of the requirements of this Indenture with respect to a deposit or use of money in the Funds or the Rebate Fund, or result in commingling of funds not permitted hereunder. In establishing such accounts or subaccounts, the Trustee may request, receive and rely upon an opinion of Bond Counsel, addressed to the Trustee and the Authority, that the establishment of such accounts or subaccounts will not cause any of the Bonds to become "arbitrage bonds" within the meaning of the Code. 4.3 Bond Fund. (1) Principal and Interest Account. The Trustee shall deposit in or transfer to the Principal and Interest Account, to the extent funds are available for that purpose, and, if applicable, the Authority shall deliver to the Trustee: (a) all amounts derived from accrued interest required to be deposited therein pursuant to Section 4.1; (b) (i) on or before the 25th day of each month, commencing 25, , from Net Operating Income of the Project and, if necessary, other Authority funds available for the purpose, one= sixth of the amount required to pay interest on the Bonds on the next Interest Payment Date, except that such deposits for the months of through , , shall equal one-fifth of the amount required to pay interest on the Bonds on 50012090 -20- ; and (ii) on or before the 25th day of each month, commencing 25, , from Net Operating Income of the Project and, if necessary, other Authority funds available for the purpose, one -twelfth of the amount required to pay the principal of the Bonds maturing or to be redeemed in accordance with Section 3.2(2) on the next , except that such deposits for the months of through shall equal one - eleventh of the amount required to pay the principal of the Bonds maturing on 1, ; in each case taking into account on the 25th day of the month prior to the interest or principal payment date, as applicable, other amounts on deposit in the Project Fund, the Revenue Fund or the Principal and Interest Account in the Bond Fund available for that purpose; (c) on or before any optional redemption date, an amount equal to the principal amount of Bonds, if any, to be redeemed in accordance with Section 3.2(1) on that date, taking into account other amounts on deposit in the Principal and Interest Account available for that purpose; (d) on or before any extraordinary mandatory redemption date, the principal of and interest on the Bonds to be redeemed on that date, taking into account other amounts on deposit in the Project Fund or the Bond Fund available for that purpose; (e) all amounts required by this Indenture to be transferred to the Principal and Interest Account from the Reserve Account; (f) the net earnings on investments of money in the Principal and Interest Account and the Reserve Account (except as otherwise provided in Section 4.3(3)); and (g) all other money required to be transferred to or deposited in the Principal and Interest Account pursuant to any provision of this Indenture. The money and investments in the Principal and Interest Account are irrevocably pledged and shall be used by the Trustee, from time to time, to the extent required, in the following order of priority: (A) for the payment of the principal of and/or interest on Bonds coming due on the next Interest Payment Date or mandatory or extraordinary mandatory redemption date; (B) for the payment of the redemption price of Bonds called for optional redemption; and 500t2090 -21- (C) for transfer to the Rebate Fund, if any, to the extent the Authority determines pursuant to Section 5.2(1)(b) or Section 5.3 that a Rebate Amount must be deposited in the Rebate Fund. The Trustee shall deliver to the Bond Registrar on each redemption date or Interest Payment Date money from the Principal and Interest Account, to the extent available therein, in an amount sufficient to pay the principal of and premium, if any, and interest on all Bonds corning due on that date. (2) Reserve Account. Promptly upon receipt thereof, the Trustee shall deposit into the Reserve Account: (a) all amounts derived from Bond prot..ucc6 required to bedeposited therein pursuant to Section 4.1; (b) On each 15 and 15, commencing from Net Operating Income of the Project and, if necessary, other Authority funds available for the purpose, the amount, if any, required to restore the balance in the Reserve Account to the Reserve Requirement for all Outstanding Bonds and Additional Bonds; and (c) all other money required to be transferred to or deposited in the Reserve Account pursuant to any provision of this Indenture or the Contingent Loan Agreement. The money and investments in the Reserve Account are irrevocably pledged and shall be used by the Trustee, from time to time, to the extent required, in the following order of priority: 50012090 (A) for transfer to the Principal and Interest Account on each redemption or Interest Payment Date to the extent that the amount in the Principal and Interest Account on that date, after all transfers to that Account from the Project Fund have been made as provided herein, is insufficient to pay the principal of, premium, if any, on and/or interest on the Bonds coming due on that date; (B) for transfer to the Rebate Fund, if any, to the extent the Authority determines pursuant to Section 5.3 that a Rebate Amount must be deposited in the Rebate Fund; and (C) for transfer to the Principal and Interest Account or to the trust account described in Section 9.1 to pay or defease the last installment(s) of principal of and/or interest on the Bonds. -22- The Reserve Account shall be valued pursuant to Section 5.1(5) on each and . If on any valuation date the amount in the Reserve Account exceeds the Reserve Requirement, the Trustee shall transfer any excess to the Rebate Fund, if any, to the extent the Authority determines pursuant to Section 5.3 that a Rebate Amount must be deposited in the Rebate Fund, and then to the Principal and Interest Account. The Trustee shall notify the City and the Authority within two Business Days of any withdrawals from the Reserve Account, which notice shall state the amount, if any, required to restore the Reserve Account to the Reserve Requirement for the Bonds [and any Additional Bonds] and shall request that the Authority provide to the City an accounting of its operation of the Project, as required by the Contingent Loan Agreement. Pursuant to the Contingent Loan Agreement, by 15 of the following year the City shall deliver to the Trustee for deposit into the Reserve Account the greater of one-half of the amount(s) certified or the amount, together with other funds held by the Trustee under this Indenture for the purpose, required to pay Required Debt Service on the Bonds and any Additional Bonds on the following 1 (to the extent that the Authority has not previously replenished the Reserve Account), and shall deliver to the Trustee no later than the following 15 the greater of the balance of the amount(s) so specified or the amount, together with other funds held by the Trustee under this Indenture for the purpose, requirLd to pay Required Debt Service on the Bonds and any Additional Bonds on the following (to the extent that the Authority has not previously replenished the Reserve Account). In the event of a deficiency in the amount available to the Trustee to pay principal of and interest on the Bonds when due as a result of the extraordinary mandatory redemption of Bonds, the Trustee shall give notice to the City of such event by, and shall request from the City pursuant to Section 3.2(3) the amount required to make up such deficiency. (3) Investment of Money in Bond Fund. Pending application of money in the Bond Fund as set forth in this Section 4.3, such money shall be invested and reinvested by the Trustee in Authorized Investments pursuant to Section 5.1. All net earnings on money and investments in the accounts in the Bond Fund shall be deposited in the Principal and Interest Account, except that net earnings on money and investments in the Reserve Account shall remain in that account if and to the extent necessary to cause the balance therein to equal the Reserve Requirement. 4.4 Project Fund. (1) Maintenance of Project Fund. Promptly upon receipt thereof, the Trustee shall deposit into the Project Fund all amounts derived from Bond proceeds required to be deposited therein pursuant to Section 4.1, all net earnings on investments of money in the Project Fund and all amounts received by the Trustee from the Authority or from any other source for purposes of paying Costs of Issuance or costs of completing the Project. The money and investments in the Project Fund shall be held in trust by the Trustee and applied in accordance with and subject to the provisions of this Section 4.4 and, pending such 50012090 -23- application, shall be held for the further security of the Owners of the Bonds until applied as provided herein. Immediately upon giving a Declaration of Acceleration pursuant to Section 7.2, the Trustee shall transfer all funds in the Project Fund to the Principal and interest Account, until the amount on deposit in the Principal and Interest Account equals the amount necessary to pay the principal of and interest on the Bonds coming due by reason of such acceleration. (2) Payments From Project Fund. Costs of Issuance and costs of the Project, including[ interest on the Bonds and other] expenses of the Authority relating to the Bonds or the Project, shall be paid by the Trustee from the Project Fund, but only to the extent of the balance therein, within five Business Days following receipt by the Trustee of a written forrequest payment from an Authorized Representative of the Authority, provided, however, that the Authority may pay such costs directly, in which case the Trustee shall reimburse the Authority from the Project Fund, but only to the extent of the balance therein, within five Business Days of the Trustee's receipt of the written request of an Authorized Representative of the Authority. [Notwithstanding the foregoing, unless otherwise directed by the Authority Trustee , transfer from Project Fund to the Principal and Interest in writing, the shall money the • ••,•,, Account in the Bond Fund to pay interest on the Bonds through and including , without the need of a request from the Authority.] All payments made from the Project Fund pursuant to a written request for payment from an Authorized Representative of the Authority shall be presumed to be made properly and the Trustee shall not be required to see to the application of any payments made from the Project Fund or to make any investigation or inquiry into the purposes for which withdrawals are being made from the Project Fund. (3) Establishment of Completion. The deemed completion date of the Project shall be the earliest of (a) the date when the Trustee shall have received a certificate of an Authorized Representative of the Authority to the effect that all Costs of Issuance and all costs of completing the Project have been paid in full, (b) the date on which no money remains in the Project Fund, (c) the date when the Trustee shall have received a certificate of an Authorized Representative of the Authority to the effect that all of the Bonds are to be redeemed in accordance with Section 3.2(3) or (d) , 1999. (4) Application of Balance in Project Fund. Within five Business Days of the deemed completion date of the Project described in Section 4.4(3), the Trustee shall transfer any money and investments remaining in the Project Fund to the Principal and Interest Account of the Bond Fund. Such funds shall be used to make the payment of principal of or interest on Bonds due on the next Interest Payment Date(s). (5) Investment of Money in the Project Fund. Pending application of money in the Project Fund as set forth in this Section 4.4, such money shall be invested and reinvested by the Trustee in accordance with the requirements of Section 5.1. All investment earnings on money in the Project Fund shall be deposited in that Fund, subject to the provisions of Section 5.2(1)(b). 50012090 -24- ARTICLE V INVESTMENT OF FUNDS; REBATE FUND 5.1 Investment of Funds. (1) Except as otherwise provided herein, money on deposit in the Project Fund or the Bond Fund shall be invested and reinvested by the Trustee in Authorized Investments, as directed in writing by an Authorized Representative of the Authority at least two Business Days in advance of the investment, which direction shall certify that such investment is an Authorized Investment; but in the event of the failure of the Authority to provide timely written directions as to such investment or reinvestment, the Trustee shall invest or reinvest any or all money held by it in the Project Fund or the Bond Fund in the sweep investment vehicle identified by an Authorized Representative of the Authority in writing at least one Business Day in advance of the investment. The Trustee may deem such investments as Authorized Investments without independent investigation thereof. If no such investment is available or specified by the Authority, the Trustee shall hold the money uninvested without liability for interest thereon. Money in the Principal and Interest Account shall be invested only in Authorized Investments approved by the Rating Agency, if any, as evidenced by the certificate of the Authority described in the preceding paragraph, maturing no later than the date money in such account is needed to make the payments authorized to be made therefrom. [Money in the Reserve Account shall be invested in the Investment Repurchase Agreement among the Authority, the Trustee and relating to the Bonds.] (2) Pending application of the money in the Rebate Fund as required pursuant to Section 5.3(4), such money shall be invested and reinvested, without regard to yield, in such Government Obligations maturing on or before the date the money invested therein is required to be paid to the United States pursuant to Section 5.3(4) as an Authorized Representative of the Authority shall direct in writing at least two Business Days prior to the date of investment. However, if no such investment is available or if no such direction is given, the Trustee shall invest such money in the sweep investment vehicle identified by an Authorized Representative of the Authority in writing at least one Business Day in advance of the investment. (3) The Trustee may invest in any Authorized Investment under this Indenture by or through its own or any affiliate's investment department. (4) For the purpose of valuing Authorized Investments held in any Fund hereunder, the Trustee shall value all investments at cost. 50012090 -25- 5.2 Allocation of Income and Losses. (1) The interest and income received with respect to the investments in any Fund or account held by the Trustee hereunder, and any profit or loss resulting from the sale of any such investments, shall be deposited and credited upon receipt, or charged, as follows: (a) All interest, income and profit received from the investment of money in the Rebate Fund shall be deposited and credited; upon receipt, to the Rebate Fund; (b) All earnings received from the investment of money in any Fund or account that has been determined to be a Rebate Amount for any Period, determined in with Section 5.3(2), shall be Computation rGliVlS, as +.. accordancedeposited in and credited to the Rebate Fund (to the extent such money has not been previously disbursed to any Person pursuant to the terms of this Indenture); and (c) All loss resulting from the sale of any investments in any specified Fund or account shall be charged to such Fund or such account, and all earnings received from the investment of money in any Fund or account shall be credited as described in Article IV. (2) The Trustee may rely on the written instructions of the Authority in investing money in any Fund or account, and shall not be accountable for any depreciation in the value of the investments made in accordance with the provisions of this Article V or for any losses incurred upon any authorized disposition thereof. 5.3 Rebate Fund. (1) The Authority hereby authorizes the Trustee to establish a separate special fund designated as the "Rebate Fund" if at any time there is determined, pursuant to Section 5.3(2), to be a Rebate Amount, which fund shall be segregated from all other funds and accounts held by the Trustee. If such a fund is established, the Trustee shall maintain the Rebate Fund until the expiration of 60 days after the retirement of the last outstanding Bond. (2) Within 30 days after the end of each Computation Period, the Authority shall determine or cause to be determined, by an Accountant or other qualified Person selected by the Authority, in accordance with Section 148 of the Code and applicable Treasury Regulations promulgated under Section 148(f) of the Code and written instructions of Bond r . the Rebate Amount Counsel delivered to the Trustee and the Authority from time to time, attributable to each account and/or fund for each Computation Period (initially, a five-year period) on such determination date or dates as may be permitted by Section 148 of the Code and written instructions of Bond Counsel delivered to the Authority and the Trustee, and shall notify the Trustee in writing of any Rebate Amount so determined. The Trustee and the 50012090 -26- Authority may rely upon the opinions, calculations, determinations, directions and advice of such Accountant or other Person without further investigation or inquiry, copies of all of which opinions, calculations, determinations, directions and advice shall be given to the Trustee by the Authority. If a Rebate Amount is determined to exist, the Trustee shall notify the Authority of the amount in the Rebate Fund available to pay the Rebate Amount, and the Authority shall deliver an amount equal to any deficiency in the Rebate Fund to the Trustee, with instructions to deposit that amount in the Rebate Fund. If for any Computation Period the amount of money and investments held in the Rebate Fund exceeds the Rebate Amount for that Computation Period, the Trustee shall deposit such excess to the Principal and Interest Account of the Bond Fund. The Trustee shall not be responsible for calculating Rebate Amounts or for the adequacy or correctness of any rebate report. (3) The Trustee shall deposit in and credit to the Rebate Fund all amounts described in Sections 5.2(1)(a) and 5.2(1)(b), as determined in accordance with Section 5.3(2), and all earnings received from the investment of those amounts. (4) The Trustee shall make the following payments from the money and investments in the Rebate Fund to the United States Treasury when and as indicated below (or on such other payment date or dates as may be specified in written instructions of Bond Counsel delivered to the Trustee), and shall file with the Internal Revenue Service such forms and/or reports as the Authority provides to the Trustee for such purpose: (a) not later than the 60th day following the end of each fifth Bond Year, an amount equal to 90% of the Rebate Amount for the Computation Period ending immediately prior to the date of payment; and (b) not earlier than the date of payment of the last outstanding Bond, nor later than the 60th day thereafter, the amount, if any, which, when added to amounts previously paid to the United States as Rebate Amounts, will equal 100 percent of the Rebate Amount with respect to the Bonds. (5) The Trustee shall retain all records that have been delivered to it regarding the source and determination of the Rebate Amounts required to be deposited and credited to the Rebate Fund, the proceeds of any investments of money in the Rebate Fund, and the amounts paid to the United States Treasury from the Rebate Fund for six years after the retirement of the last outstanding Bond, or such shorter period as may be permitted by Section 148 of the Code. (6) The Trustee may, in its discretion, establish such accounts within the Rebate Fund established under this Indenture, and subaccounts within any of such accounts, as the Trustee may deem necessary or useful for the purpose of identifying more precisely the sources of payments into and disbursements from such accounts or subaccounts, but the establishment of any such additional account or subaccount shall not alter or modify any of the requirements of this Indenture with respect to the deposit or use of money in the Rebate Fund established hereunder or result in commingling of funds not permitted hereunder. 50012090 -27- (7) The Trustee shall have no responsibility or liability, independent of the specific duties set forth in this Article V, resulting from its failure to enforce the Authority's compliance with anv rebate requirements. 5.4 Segregation of Money. All money paid to the Trustee pursuant to this Indenture for deposit and all investments purchased with money so deposited shall at all times be accounted for separately and shah not be commingled with any other funds of the Authority and the Trustee, and shall be held in trust by the Trustee. ARTICLE VI AUTHORITY COVENANTS 6.1 Performance of and Authority for Covenants. The Authority covenants and represents: (1) that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Indenture, the Deed of Trust and the Hazardous Substances Agreement, in any and every Bond executed, authenticated and delivered hereunder and in all proceedings of its Board of Commissioners pertaining thereto; (2) that it will proceed with due diligence to complete the Project; (3) that it is duly authorized under the Constitution and laws of the State, including particularly and without limitation the Act, to issue the Bonds and to pledge, grant and/or assign a security interest in the Project, the Project Revenues, the General Revenues of the Authority, Bond proceeds and Investment Earnings in the manner and to the extent set forth herein; (4) that all action on its pari for the issuance of the Bonds and for the execution and delivery thereof will be duly and effectively taken; and (5) that the Bonds in the hands of the Owners thereof will be valid and enforceable special obligations of the Authority according to the terms thereof. The Authority acknowledges and agrees that all covenants contained in this Indenture and the Deed of Trust are with and for the benefit of all Bondowners and can be enforced by the Trustee, in its discretion or at the direction of the Bondowners as provided herein, or by the Bondowners, in accordance with the provisions of Article VII. 6.2 [Reserved] 50012090 -28- 6.3 Condemnation Awards and Insurance Proceeds. (1) The Authority shall deliver to the Trustee and the City at least annually on or before June 30 of each year acerticate of an intained as requiredtunder thzed epresentative of the e Deed of Trust and Authority providing evidence of insurance ma specifically describing the amounts and types of insurance maintained. If Insurance Proceeds or a Condemnation Award is paid, the Authority shall forthwith notify the Trustee of such fact and of the amount of Insurance Proceeds or Condemnation Award received by the Authority. The Trustee shall not be required to hold or maintain any insurance policies in connection with the Project or be a named insured on any insurance policy. (2) Money in the amount of such Condemnation Award or Insurance Proceeds shall be held by the Authority in trust for a period not exceeding 120 days for the purposes set forth in Section 6.3(3) or (4). The Trustee shall not be responsible for such Condemnation Award or Insurance Proceeds during such 120 -day period. (3) If the Authority determines to restore the Project (such determination to be made in accordance with the standards set forth in Section 6.3(4) within 120 days after receipt of such Condemnation Award or Insurance Proceeds), such Condemnation Award or Insurance Proceeds shall be used exclusively for such purpose, and the Authority shall so certify to the Trustee in writing and shall cause such Condemnation Award or Insurance Proceeds to be transferred to the Trustee for deposit in the Project Fund. The Trustee shall disburse such funds to pay the costs of the reconstruction of the Project in accordance with the procedures set forth in Section 4.4(2). In such event, the deemed completion date of the Project set forth in Section 4.4(3) shall be adjusted to reflect a reasonable date for completion of such restoration, as determined by the Authority, but in no event later than three years from the date of receipt by the Authority of the Condemnation Award or Insurance Proceeds. (4) If the Authority determines not to restore the Project (the Authority shall make such determination if, in the opinion of the Authority, repair could not be completed within six months or the restoration and repair of the Project would not be economically practical or desirable), the Authority shall immediately transfer such Condemnation Award or Insurance Proceeds to the Trustee, with instructions to deposit such funds in the Principal and Interest Account in the Bond Fund and apply them to the payment or mandatory redemption of Bonds as follows: If the Project has been condemned or destroyed only in part and the Authority determines that the Project Revenues will continue to provide funds sufficient to pay Required Debt Service on the BondspBonds eceivedbby the Trustee part OtherwiseXthe Bonds tent of the Condemnation Award or Insurance roce shall be redeemed as a whole. (5) In the event of a conflict between the provisions of this section and those of the Deed of Trust, this section shall control. 50012090 -29- 6.4 Extensions of Payment of Bonds. The Authority shall not directly or indirectly the Bonds �� n, rhe time of payment of extend or assent to the extension of the maturity of any of Bonds o- _.._ , the interest thereon without the consent of the Owners of all Outstanding Bonds. The Authority covenants and agrees use or 6.5 Tax -Exempt Status of Bonds. The Authority not to __ permit the use of any of the proceeds of the Bonds in such manner, and not to take or omit to take any other action in such manner, as will impair the exclusion of interest on the Bonds from gross income for federal income tax purposes, The Authority further covenants and agrees to comply with applicable arbitrage rebate requirements under Section 148 of the Code, and to provide to the Trustee written directions pursuant to Section 5.1 as to the investment of funds held by the Trustee hereunder. 6.6 Compliance with Continuing Disclosure Requirements. (1) Undertaking to Provide Annual Financial Information and Notice of Material Events. To meet the conditions of paragraph (d)(2) of United States Securities and Exchange Commission ("SEC") Rule 15c2-12 (the "Rule") as required to qualify for the limited from )( the Rule, as applicable to a participating underwriter for exemption paragraph (b)(5) of the Bonds, the Authority undertakes (the "Undertaking") for the benefit of holders of the Bonds to provide or cause to be provided, either directly or through a designated agent: (a) To any person upon request or annually to a state information depository, if any, established in the state of Washington and recognized by the SEC (the "SID"), annual financial information and operating data of the type included in the final official statement for the Bonds and described in Section 6.6(2) ("annual financial information") that is customarily prepared by the Authority and is otherwise publicly available; and (b) To each nationally recognized municipal securities information repository designated by the SEC in accordance with the Rule ("NRMSIR") or the Municipal Securities Rulemaking Board ("MSRB"), and to the SID timely notice of the occurrence of any of the following events with respect to the Bonds, if material: (i) principal and interest payment delinquencies; (ii) non-payment related defaults; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions or events affecting the tax-exempt status of the Bonds; (vii) modifications to rights of holders of the Bonds; (viii) Bond calls (other than scheduled mandatory redemptions of Term Bonds, if any); (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Bonds; and (xi) rating changes. 50012090 -30- (2) Type of Annual Financial Information Undertaken to be Provided. The annual financial information that the Authority undertakes to provide (a) Shall consist of (i) a statement of operating income and expenses for the Project for the prior Fiscal Year (the "Project Operating Statement"), including a summary of the occupancy levels of the Project as of the end of the prior Fiscal Year; and (ii) annual financial statements for the Authority (the "Authority Financial Statements"); and (b) Shall be available from the Director of Finance of the Authority, whose current address and telephone number shall be identified in the final official statement for the Bonds. (3) Amendment of Undertaking. The Undertaking is subject to amendment after the primary offering of the Bonds without the consent of any holder of any Bond, or of any broker, dealer, municipal securities dealer, participating underwriter, rating agency, NRMSIR, the SID or the MSRB, under the circumstances and in the manner permitted by the Rule. The Authority will give notice to each NRMSIR or the MSRB, and the SID, if any, of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of the reasons for the amendment. If the amendment changes the type of annual financial information to be provided, the notice also will include a narrative explanation of the effect of that change on the type of information to be provided. (4) Beneficiaries. The Undertaking evidenced by this Indenture shall inure to the benefit of the Authority and any holder of Bonds, and shall not inure to the benefit of or create any rights in any other person. (5) Termination of Undertaking. The Authority's obligations under this Undertaking shall terminate upon the legal defeasance of all of the Bonds. In addition, the Authority's obligations under this Undertaking ith thisUndertaking become legally inapplicable all terminate if those rovisions of the ule in which require the Authority to comply 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 Authority, and the Authority provides timely notice of such termination to each NRMSIR or the MSRB and the SID. (6) Remedy for Failure to Comply with Undertaking. As soon as practicable after the Authority learns of any failure to comply with o bbe correctedthe ng, the Noo failureority by the will Athoproceed with due diligence to cause such noncompliance y or other obligated person to comply with the Undertaking shall constitute tsuchactionsasthat respect the Bonds. The sole remedy of any holder f a Bond shall be to take holder deems necessary and appropriate, including seeking a writ of mandate or order of 50012090 -31- specific performance from an appropriate court, to compel the Authority or other obligated person to comply with the Undertaking. (7) Designation of Official Responsible to Administer Undertaking. The [Director of Finance/Executive Director] of the Authority or his or her designee is authorized and directed in his or her discretion to take such further actions as may be necessary, appropriate or convenient to carry out the Undertaking of the Authority in respect of the Bonds set forth herein and in accordance with the Rule, including, without limitation, the following actions: (a) Preparing, filing and/or making available upon request the annual financial information undertaken to be provided; ,,_ whether event in paragraph (1)(b) of (b) Determining any ........ specified paragraph v this Section 6.6 has occurred, assessing its materiality with respect to the Bonds, and, if material, preparing and disseminating notice of its occurrence; (c) Determining whether any person other than the Authority is an the Rule to the Bonds, person" within the meaning of Rule with respect and obtaining from such person an undertaking to provide any annual financial information and notice of material events for that person in accordance with the Rule; (d) Selecting, engaging and compensating designated agents and consultants, including but not limited to financial advisors and legal counsel, to assist and advise the Authority in carrying out the Undertaking; and Undertairing. (e) Effecting any necessary amendment of the va� (8) Concerning the Dissemination Agent. Upon written direction of the Authority hereby given to the Trustee, the Trustee agrees to act as dissemination agent and to forward information as set forth in Section 6.6(9). In addition, the Trustee shall forward copies of all such information to the City. Either the Authority or the Trustee may elect to terminate the p Trustee's responsibilities as dissemination agent, in either case upon prior written notice to the other party. The dissemination agent shall have only such duties as are specifically set forth in this Section 6.6, and no further duties shall be implied. The Authority shall pay compensation to the dissemination agent for its services, as agreed by the Authority and dissemination agent from time to time, and its reasonable out-of-pocket expenses, which fees and expenses shall be in addition to and separate from its fees and expense as Trustee. The dissemination agent shall have no duty to review any information provided to it hereunder and shall not be deemed to be acting in a fiduciary capacity. All information provided to the dissemination agent shall be in a form suitable for filing. (9) Trustee to Forward Information. The Trustee shall provide notice to the Authority of any of the events listed in Section 6.6(1)(b) of which the officer of the Trustee responsible for administering this Indenture has actual notice (including notice from the 50012090 -32- Authority) or knowledge and, upon a written determination by the Authonty given to the Trustee that any such event is material, shall he Trusteede sce of such event shall forward toto each each NRMSIRRthe or to the MSRB, and to the SID. In addition, MSRB and the SID, as applicable, all information delivered to the Trustee by the Authority with instructions to forward that information to those entities pursuant to this section, it being understood that the Trustee has no responsibility for the content, format or timeliness of such information. Notwithstanding the foregoing, the Trustee shall have no duty or obligation hereunder to the Authority, any holder of Bonds or any other Person (including without limitation any underwriter of the Bonds) to monitor the Authority's compliance with the Undertaking or the City's obligations under Article VI of the Contingent Loan Agreement. 6.7 Contingent Loan Agreement. The Authority covenants that it will not terminate the Contingent Loan Agreement at any time that the Bonds or any Additional Bonds are Outstanding and that it will amend the Contingent Loan Agreement only in the manner described therein. The Authority further allants that amountslt will ebyrcise its the Citylghts under the thereunder are Contingent Loan Agreement to ensure thatpayable paid. ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF BONDOWNERS 7.1 Events of Default. The following events shall be Events of Default: (1) default in the due and punctual payment of the principal of, premium, if any, or interest on any Bond when and as the same shall become due and payable, whether on any Interest Payment Date, at maturity as expressed therein, by proceedings for redemption (except as otherwise provided in Section 3.2(4)), by acceleration, or otherwise; or (2) default by the Authority in the observance of any of the other covenants, agreements or conditions on its part contained in this Indenture, the Resolution, the Deed of Trust, the Hazardous Substances Agreement or the Bonds, if such default shall have continued beyond any applicable cure period and for a period of 60 days (or such longer period, if any, as is specified herein for particular defaults) after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the Authority by the Trustee, or to the Authority and the Trustee by the Owners of not less than 25% in aggregate principal amount of the Bonds at the time Outstanding (or, if cure cannot be completed within such 60 -day period through the exercise of diligence and the Authority commences the required cure within such 60 - day period and continues the cure with diligence and the Authority reasonably 50012090 -33- anticipates that the default could be cured within 120 days, the Authority shall have 120 days following receipt of such notice to effect the cure). 7.2 Acceleration of Maturity. If any Event of Default described in Section 7.1(1) r shall occur, then, and in each and every such case during the continuance of such Event of Default, the Trustee shall be entitled, upon written notice to the Authority, or the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding Trustee, o to declare the shall be entitled, upon notice in writing to the Authority and the >, iustee, principal of all of the Bonds then Outstanding and the interest accrued thereon to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything contained in this Indenture or in the Bonds to the contrary notwithstanding. The Trustee shall give or cause to be given notice of any such Declaration of Acceleration to the City and to the respective Owners of the Bonds at their addresses appearing on the Bond Register. Notice of such Declaration of Acceleration having been given as aforesaid, anything to the contrary contained in this Indenture or in the Bonds notwithstanding, interest shall cease to accrue on such Bonds from and after the date established for payment of the Bonds pursuant to the Declaration of Acceleration if and to the extent that money to make such payment is on hand with the Trustee in any of the Funds on that date, as determined under Section 7.4. 7.3 Remedies Upon Default. Upon the occurrence and during the continuance of an Event of Default, then and in every such case the Trustee in its discretion may, and upon the written direction of the Owners of not less than a majority in principal amount of the Bonds then Outstanding and receipt of indemnity against anticipated expenses, including counsel fees, and liability satisfactory to the Trustee in its sole discretion (which indemnity is a condition precedent to its duties hereunder) shall, in its capacity as the Trustee of an express trust, pursue any one or more of the following remedies to the extent permitted by applicable law: (1) by mandamus, or other suit, action or proceeding at law or in equity, enforce all rights of the Owners and require the Authority to carry out any agreements, including the Contingent Loan Agreement, with or for the benefit of the Bondowners and to perform its duties under the Act, the Resolution and this Indenture, provided that any such remedy may be taken only to the extent permitted under the applicable provisions of those agreements, the Act, the Resolution or this Indenture, as the case may be; (2) bring suit upon. the Bonds; (3) foreclose the Deed of Trust or exercise any remedies thereunder, but only with the consent of the City so long as the City is not in default in its obligations under the Contingent Loan Agreement; 50012090 -34- (4) by action or suit in equity require the Authority to account as if it were the trustee of an express trust for the Owners of the Bonds; or (5) by action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the Owners of the Bonds. Upon instituting any such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Project Revenues and other assets pledged under this Indenture or the Deed of Trust, pending resolution of such proceeding. The Trustee shall have the right to decline to follow any direction of Bondowners that in the sole discretion of the Trustee would be unjustly prejudicial to the Trustee or to Bondowners not parties to such direction, that would expose the Trustee to unreasonable liability or financial exposure or that is not in accordance with law or the provisions of this Indenture, shall be entitled to rely without further investigation or inquiry upon any direction given by the Owners of a majority in aggregate principal amount of the Bonds Outstanding, and shall not be responsible for the propriety of or liable for the consequences of following any such direction. Notwithstanding anything to the contrary contained herein, the Trustee shall not be required to foreclose the Deed of Trust or bid on behalf of Bondowners at any foreclosure sale (a) if, in the Trustee's sole discretion, such action would subject the Trustee to personal liability for the cost of investigation, removal and/or other remedial activity with respect to Hazardous Substances (as defined in the Deed of Trust) or (b) if the presence of any Hazardous Substance on the property subject to the Deed of Trust results in such property having no or nominal value. It is acknowledged and agreed that the Trustee has no authority to manage, own or operate the Project, or any portion thereof, except as necessary to exercise remedies upon default. Nothing in this Section 7.3 shall in any manner prevent the City from exercising any of its rights under the Contingent Loan Agreement so long as the City is not in default in its obligations thereunder. 7.4 Application of Project Revenues and Other Funds After Default. If an Event of Default shall occur and be continuing, all Project Revenues and any other funds then held or thereafter received by the Trustee under any of the provisions of this Indenture (subject to Sections 5.3 and 9.2) or the Deed of Trust shall be applied by the Trustee as follows and in the following order: (1) To the payment of any expenses necessary in the sole discretion of the Trustee to protect the interests of the Owners of the Bonds and reimbursement of the Trustee for any advances made by the Trustee for such purposes, and payment of reasonable fees, charges and expenses of the Trustee (including reasonable fees of its counsel) incurred in and about the performance of its powers and duties under this Indenture, the Hazardous Substances Agreement and the Deed of Trust; (2) If the Trustee appoints a receiver or exercises remedies under the Deed of Trust, to the payment of Operation and Maintenance Costs; 50012090 -35- �,,, the Bonds (3) To the payment of the principal of and interest then due on Bonds ,. of .i,,, payment if only (upon presentation of the Bonds to be paid, and stamping ineieon he partially paid, or surrender thereof if fully paid) subject to the provisions of this Indenture, as follows: (a) Unless the principal of all of the Bonds shall have become or have been declared due and payable, First: To the payment to the Persons entitled thereto of all installments of interest then due in the order of the maturity of such installments and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to thereof ratably, amounts due thereon, to the the payment ui�lcva. according to the --- Persons entitled thereto, without any discrimination or preference; and Second: To the payment to the Persons entitled thereto of the unpaid principal of any Bonds which shall have become due, whether at maturity or by call for redemption, with interest on the overdue principal at the rate borne by the respective Bonds, and, if the amount available shall not be sufficient to pay in full all of the principal due on the Bonds, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the Persons entitled thereto, without any discrimination or preference, or (b) If the principal of all of the Bonds shall have become or have been declared due and payable, to the payment of the principal and interest then with interest overdue principal at the rate due and unpaid upon the Bonds, on the overdue �---� r borne by the Bonds, and, if the amount available shall not be sufficient to pay in full the whole amount so due and unpaid, then to the payment thereof ratably, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, according to the amounts due respectively for principal and interest, to the Persons entitled thereto without any discrimination or preference; (4) To the City, to the extent that the City certifies to the Trustee that arnounts are owed to the City pursuant to the Contingent Loan Agreement; and (5) To the Authority. 7.5 Trustee to Represent Bondowners. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the Bonds, by taking and holding the same, shall be deemed to have so appointed the Trustee) as trustee for and true and lawful attorney-in-fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to such Owners under the provisions of the Bonds, this 50012090 -36- Indenture, the Deed of Trust and applicable provisions of any law. All rights of action under this Indenture, the Deed of Trust or the Bonds or he Bonds oerwise rythe production y be prosecuted and enforced by thereof in any the Trustee without the possession of any of t proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of all Owners of Bonds, subject to the provisions of this Indenture. The foregoing notwithstanding, the Trustee shall not be entitled to vote in favor of any plan of rea extent ion or thsuch similara votrestructure the Tran in any bankruptcy or other insolvency proceeding, to the ee would alter this Indenture, or the rights of the Owners of any outstanding Bonds, in any manner not permitted by Article X. 7.6 Bondowners' Direction of Proceedings. No Owner of any Bond shall have the right to institute any proceeding, judicial or otherwise, for the enforcement of the covenants contained herein, without the written concurrence of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding; but the Owners of this principal amount of Bonds may, subject to the limitations of and upon compliance with Section 7.7, either at law or in equity, by suit, action, mandamus, application for appointment of a receiver or other proceeding, protect and enforce the rights of all Owners of Bonds, and may enforce the performance of all covenants and duties of the Authority and its officials as set forth in this Indenture, including but not .limited to foreclosure of the Deed of Trust and the collection and proper segregation and application of all Project Revenues. Nothing herein shall be construed as limiting or otherwise modifying the rights of the Owners and the Trustee under this Indenture, nor shall anything herein impair the absolute and unconditional right of the Owner of each Bond to receive payment of the principal institute sthereof ua foreor thetthereon at the enforcement of times provided in such Bond and in this Indenture, any such payment. Before the Owners may take any action hereunder, the Trustee may require that it be furnished an indemnity bond satisfactory to it in its sole discretion for the reimbursement of all expenses to which it may be put (including the reasonable expenses and disbursements of its in-house and outside counsel, independent appraisers, accountants, consultants, agents and other experts) and to protect it against all liability by reason of any action so taken by the Owners, except liability which is adjudicated to have resulted from the negligence or willful default of the Trustee. 7.7 Limitation on Bondowners' Right to Sue. No Owner of any Bond shall have the right to institute any suit, action or proceeding at law or in equity, or nforcement of any right oake r remedyany tunder this action described in Section 7.6, for the protection or Indenture, the Deed of Trust or any applicable law with respect to such Bond, unless (1) the Owner shall have given to the Trustee written notice of the occurrence of an Event of Default; (2) the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in their names; (3) such Owner or Owners shall have tendered to the Trustee indemnity satisfactory to the Trustee in its sole discretion against the costs, expenses and liabilities to be incurred in compliance with such request (including the reasonable fees of its counsel, cops ldtant e agents and other experts); reasonable expenses and disbursements of independent appraisers, accountants, 50012090 -37- and (4) the Trustee shall have refused or failed to comply with such request for a period of 60 ,.a and such tender of indemnity shall days after such written request shall have been ieceiYcu by, e have been made to, the Trustee. _ ___ and refusal or are hereby Such notification, request, tender of indemnity refusal failure_ declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder or under law; it being understood and intended that no one or more t inany manner whatever byhis or their action to affect, Bondowners shah have any right �- Trust .... the of any disturb or prejudice the security of this Indenture or the Deed of or rights other Bondowners, or to enforce any right under this Indenture or applicable law with respect to the Bonds, except in the manner provided herein, and that all proceedings at law or in equity to enforce any such right shall be instituted, had and maintained in the manner provided for the of all Owners of Outstanding Bonds, subject to the herein, and ua� benefit and protectionprovisions of this Indenture. her 7.8 Absolute Obligation of Authority. yshall or Nothing impair the obligationin ection 7.7 or in yoftthe provision of this Indenture, or in the Bonds, Authority, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the respective Owners of the Bonds at the times stated therein out of the Net Operating Income, General Revenues and other fiends and assets pledged therefor in this Indenture, or affect or impair the rights of such O e o trrs, act which are ed in also o absolute and unconditional, to enforce such payment by virtue of 7.9 Termination of Proceedings. In case any proceedings taken by the Trustee or any one or more Bondowners on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Owners, then in every such case the Authority, the Trustee and the Owners, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers and duties of the Authority, the Trustee and the Owners mance continuel neach fundoraccount h no sucho rtsproclevdings el priorcto the been taken. The Trustee shall restore the b occurrence of the Event of Default from and to the extent of money transferred from such fund or account as a result of the occurrence of such Event of Default and not disbursed in accordance herewith. 7.10 Remedies Not Exclusive. Except with respect to the limitations on Owners' rights to sue set forth in Section 7.7, no remedy herein conferred upon or reserved to the remedies, and each and every such rem Trustee or the Owners of the Bonds �� intended he extent permitted by law, shall be cumulative y, and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise. 7.11 No Waiver of Default. No delay or omission of the Trustee or of any Owner of the Bonds to exercise any right or power arising upon the occurrence of any default shall impair any such right or power or shall be construed to be a waiver of any such default or an 50012090 -38- given by acquiescence therein, and every power andremedy as often asmaythis Indenture be deemed expedient, or to the Owners may be exercised from time to time and ARTICLE `'III CONCERNING THE TRUSTEE 8.1 Acceptance of Trust and Prudent Performance Thereof. (1) The Trustee, as evidenced by its due execution of this Indenture, hereby accepts the conveyance set forth in the preamble, in trust, and agrees to keep, perform and observe faithfully all of the duties, conditions and requirements imposed upon it in this Indenture. Except during the continuance of an Event of Default, the Trustee undertakes to perform such functions and duties and only such functions and duties as are specifically set forth in this Indenture, and no implied duties Default hasgations shl be read into oc occurred and is continuing,1s thenTrustee re against the Trustee. In case an Event ee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, asap� affaent irs, subject to the limitations on liability on would exercise or use under the circumstances in the conduct of such person's s o set forth in Sections 7.3, 8.1(3) and 8.2, and subject to the provisions of Section 8.6. (2) All notices or other instruments required by this Indenture to be delivered in writing to the Trustee, in order to be effective, must be delivered at the address for notices to the Trustee set forth in Section 11.6, or at such other location as the Trustee may designate to the Authority in writing. With respect to an Event of Default pursuant to Section 7.1(2), the Trustee shall not be deemed to have notice of any such Event of Default unless and until it shall have received actual notice thereof, and in the absence of such notice so received, the Trustee may conclusively assume that there such an EventEvent ofDefault. Default wrthoutNonetheless, specific Trustee may in its sole discretion take notice of notification thereof. In such case, the Trustee shall proceed as if it had received such specific notification. (3) The Trustee shall not be liable with respect to any action taken or omitted to be taken hereunder except for its own negligence or willful misconduct; provided that: (a) The duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture; the Trustee shall be obligated to take only such actions as are specifically set forth herein or as are specifically required to be taken by the Trustee when requested in writing from time to time in accordance with this Indenture by the Authority or by the Owners of not less than the aggregate principal amount of Outstanding Bonds specified herein with respect to the action in question (subject to the restrictions set forth in Section 7.3); and 50012090 -39- (b) in the absence of bad faith on the part of the Trustee, the Trustee _ investigation inquiry. as to the truth of the statements may rely, without any independent ii=���=1���•�•• or inquiry; and to the correctness of the opinions expressed therein, upon any certificate or opinion furnished to the Trustee conforming to the procedural requirements of this Indenture; but in the h ct.. any provision specifically required to be case of any such certificate or opinion w=►=4== by µ,., provision ______ is furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not it conforms to the procedural requirements of this Indenture; and (c) The Trustee shall not be liable for any error of judgment made in good faith by the Trustee unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and (d) Notwithstanding the restrictions on the Trustee's duty to act set forth in Section 7.3, the Trustee shall not be liable with respect to any action taken or ornitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority in aggregate principal amount of the Bonds Outstanding (or such lesser amount as may be specified herein) or otherwise in accordance with the express provisions of this indenture. 8.2 Trustee Mav Rely Upon Certain Documents and Opinions. (1) Subject to Section 8.1(3)(b), the Trustee may rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. (2) Any request, direction, election, order, certification or demand of the Authority shall be sufficiently evidenced by an instrument signed by an Authorized Representative of the Authority (unless specifically prescribed otherwise in this Indenture), and any resolution of the Authority may be evidenced to the Trustee by a certified resolution. (3) The Trustee may, in its sole discretion and at the expense of the Authority, consult with its counsel or Bond Counsel, and the legal advice or opinion of such counsel or Bond Counsel shall be full and complete e herauthorization in good protection and in a cordance any action taken, suffered or omitted by the Trustee with such legal advice or opinion of counsel or Bond Counsel: (4) Whenever, in the administration of the trust created by this Indenture, the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof is specifically prescribed herein) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be proved and established by a certificate of an Authorized Representative of the Authority; and, in theabsence full abuhority forof nligence ranylful action taken, suffered on the part of the Trustee, such certificate shall constitute or omitted by the Trustee under the provisions of this Indenture in reliance thereon. 50012090 -40- (5) The Trustee shall not be concerned with or accountable to anyone for the subsequent use or application of any money which shall be released or withdrawn in accordance with the provisions hereof. rm (6) The Trustee may execute any °� the rne tac ountantss or s afaffiliates,ageand ts or the e duties required of it hereunder by or through a ys, receivers and may, in all cases, pay, and be reimbursed for, the reasonable fees and expenses, thereof. (7) Any action taken or omitted to be taken by the Trustee in good faith pursuant to this Indenture upon the request or authority or consent of any Person who at the time of making such request or giving such authority or consent is the Owner of any Bond, shall be conclusive and binding upon all future Owners of the same Bond and upon Bonds executed and delivered in exchange therefor or in place thereof. 8.3 Trustee Not Responsible for Indenture Statements, Validity. The Trustee shall not be responsible for any recital or statement herein, in the Bonds distributed the edConne ton with of Trust, or in any official statement or other disclosure document prepared or the Bonds or for the validity of the execution by the Authority of this Indenture or the Bonds, or for the validity of the execution of any other or supplemental instrument by the Authority, or for the validity or sufficiency of the security for ohthBonds he TrustsEstate.sued eT ExdCept aser or notherwise tended to be secured hereby, or for the value of or title expressly provided herein, the Trustee shall have no duty to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein, or as to the existence of an Event of Default hereunder, but the Trustee may require of the Authority full information and advice as to the performance of such d in the Trust covenants, conditions and agreements and of the condition of the physical property tate. The Trustee makes no representation or warranty, express or implied, as to the tit,title, value, design, compliance with specifications or legal requirements, quality, operation, condition, merchantability or fitness for any particular purpose for the use contemplated by the Authority of the Project. Ins°ri vent Gonne shth ortari eenglfrom the for incidental, indirect, special or consequential damage Deed of Trust or this Indenture for the existence, furnishing or use of the Project. 8.4 Limits on Duties and Liabilities of Trustee. The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty of the Trustee and the Trustee shall be answerable only for its own negligence or willful misconduct. The Trustee shall not be required to give any bond or surety in respect of the execution of its trusts and powers hereunder or otherwise in respect of the premises. Nothing contained herein, in the Bonds, the Deed of Trust or the Hazardous Substance Agreement shall be construed to impose any duties upon the Trustee beyond those expressly contained in this Indenture. All immunities, indemnities and other provisions of this Indenture 50012090 -41- as related to the duties and liabilities of the Trustee shall apply to the Bonds and the Deed of , • ili�y in respect of any investment advice rendered to any Trust. The Trustee shall have no liability resr..... �- --._, investment _ Bondowner, or for the management of the Project or any portion thereof. Ali _ _. the Trustee hereunder is held in trust 8.5 Money Held in Trust. Ilsoile; held by �__..-.-__- for the purposes set forth herein and shall be segregated and kept apart from other funds held by it in accordance with its general practices and procedures in effect from time to time. , t:_Li,. its individual capacity for the Under no circumstances shall the Trustee be Liable in obligations evidenced by the Bonds. In accepting the trust hereby created, the Trustee acts ity solely as Trustee for the Owners and not �n its nmitation rhedividual s Owners eand except thes Authority,y erwise provided herein, all Persons, including ithout lihaving claim Trustee arising from this Indenture shall look for payment only to having any e,.au.... against the Trustee _ the funds and accounts held by the Trustee hereunder. 8.6 Costs for Maintenance of Suit; Indemnification. (1) Other than to the extent described herein with respect to making the payments of principal of and interest on the Bonds when due from money held by the Trustee hereunder, and with respect to the redemption (other than optional redemption) or acceleration of payment of the Bonds, the Trustee shall be under no obligation to institute any suit, to take any proceeding under this Indenture or the Deed of Trust, to enter any appearance in or in any way defend any suit in which it may be defendant, or to take any steps in the execution of the trusts hereby created or in the enforcement of any rights and powers hereunder, until it shall be assured to its satisfaction that repayment of all costs and expenses, including the reasonable fees of its counsel, will occur in a timely manner, and until adeg11ate indemnity against all risk and liability is assured to it to its satisfaction However, the Trustee may begin suit, or appear in and defend suit, or do anything else in its judgment andp n such done Case bhey itas such Trustee shallTrustee, be without assurance of reimbursement indemnity, reimbursed or indemnified by the Owners for all counsel fees and other reasonable disbursements properly incurred in connection therewith, unless such liability or disbursement is adjudicated to have resulted from the negligence or willful misconduct of the Trustee. If the Owners shall fail to make such reimbursement or indemnification, the Trustee may reimburse itself from any money in its possession under the provisions of this Indenture subject only to the prior lien of the Bonds for the payment of the principal thereof and interest thereon, except as otherwise provided in Section 7.4. (2) The Authority shall indemnify the Trustee for any loss, liability, outlays, counsel fees, disbursements, expenses or advances reasonably incurred or made, without negligence or willful misconduct on the part of the Trustee, arising out of or in connection with its acceptance or administration of the trust or performance of its duties hereunder, and shall reimburse the Trustee for any amounts paid to the Trustee by the Owners pursuant to Section 8.6(1) which the Trustee has spent for the purposes of that section and which the Trustee has subsequently been required to return to the Owners. 50012090 -42- (3) None of the provisions contained in Deed of Trust shall require the Trustee to expend or risk individual financial liability in the performance of any of its its rights or powers hereunder. (4) All indemnifications and releases from liability granted to the Trustee hereunder shall extend to its directors, officers, employees, officials, affiliates and agents. 8.7 Intervention in Judicial Proceedings•In any l judicialproceeding e discretion, hasa which the Authority is a party and which, in the opinion of the Trustee inits substantial bearing on the interest of the Owners of the Bonds, the Trustee may intervene on behalf of the Owners, and must do so if requested in writing by the Owners of not less than a majority in aggregate principal amount of Outstanding Bonds upon written assurance from such Owners satisfactory to the Trustee of indemnity and reimbursement for costs and expenses, including reasonable fees of its counsel, incurred in so intervening. The rights and obligations of the Trustee under this Section 8.7 are subject to the approval of the court having jurisdiction in the premises. ely to 8.8 Trustee to Retain Rebate Records. The to thetee shall retain l determination andepaymsentolof the the extent such records are provided to it) relating Rebate Amount to the United States in connection with any Bonds for six years after the last Outstanding Bond is retired, or for such shorter period as may be permitted by Section 148 of the Code. 8.9 Reports of Activities. The Trustee shall keep and maintain accurate and complete records of fund balances, any investments thereof this Ind nturenandttonfurnishvmonthly ing any part of the Trust Estate held by the Trustee pursuant to reports thereof to the Authority. The Authority oother her applicable regulatory agency grantes that to the extent tthe regulations of the Comptroller of the Currency a pP Authority the right to receive brokerage confirmations of security transactions as they occur, the Authority specifically waives receipt of such confirmations. The Authority and its agents shall have the right to inspect all such records at all reasonable times during regular business hours and upon reasonable notice and to make such copies and extracts, at their expense, as they may desire. 8.10 Compensation of Trustee. All advances, counsel fees and other expenses reasonably made or incurred by the Trustee or its agents, directors, officials, officers, affiliates and employees in and about the execution of the trust hereby created; any all n clad ims, reasonable da compenation to the Trustee for its services in the premises; any and demands, expenses, liabilities and taxes of any character or nature whatsoever (including but not limited to claims for loss or damage to any property or injury to or death of any person) asserted by or on behalf of any Person arising out resultingof, theon conveyed by the Deed from, or in any way ted of with the Project or the real property and improvements Trust; and any and all costs and expenses (including ee inonaefending any such ble fees of its uclnaimssel, a damgage and other experts) incurred by or on behalf of the Trus te this Indenture, the Bonds or the its own funds or otherwise incur duties or in the exercise of any of 50012090 -43- demands, liabilities or claims for taxes of any character whatsoever (unless such claims, ,, _, c___., the negligence or w-illful damages, demands or liabilities are adjudicated to have resulted Loin misconduct of the Trustee), shall be paid by the Authority in accordance herewith. The compensation of the Trustee shall not be limited to or by any provision of law in regard to the . , a i:,,..money compensation of trustees of an express trust. The Trustee shah have iicn against all ___o__. and other property or security held pursuant to this Indenture, with right of payment therefrom, subject only to the prior lien of the Bonds for the payment of the principal thereof ? 4 1 ), for f l) the Trustee's interest thereon when due (except as provided in Section(1) and reasonable compensation, expenses, advances and exercise ercscounsel andfees, incurred on performance of thea powers and execution of the trusts created hereby and the duties of the Trustee hereunder; and (2) any and all claims, damages, demands, expenses, liabilities and taxes incurred ,by�the ^Truste orP„�ets genrSLrrdirectors, ed by or onbehalfofcials, affiliates, Truofficers eeein and employees, and any and all costs and expenses incurred defending against the same, of any character whatsoever (unless such damage or liability is adjudicated to have resulted from the negligence or willful misconduct of the Trustee). 8.11 Trustee Mav Hold Bonds. The Trustee and its officers and directors may Bonds..�a other obligations of the Authority and acquire and hold or become pledgees of and a otherwise may deal with the Authority in the same manner and to the same extent and with like effect as though it were not Trustee hereunder, and may act as depository for and permit any of its officers and directors to act as members of, or in any other capacity with respect to, any committee formed to protect the rights of Bondowners, whether or not such committee represents the Owners of the majority in aggregate principal amount of the Bonds then Outstanding. 8.12 Qualifications of Trustee. There shall at all times be a Trustee hereunder which a and doing business under the laws of the shall be an association or a corporation organized United States or any state thereof, authorized under such laws to exercise corporate trust powers. Any successor Trustee shall have a combined capital and surplus of at least $50,000,000 (or shall be a wholly-owned subsidiary of an association or corporation that has such combined capital and surplus), and be subject to supervision or examination by federal or state authority, or shall have been appointed by a court of competent jurisdiction pursuant to Section 8.15(2). If such association or corporation publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority referred to above, then for the purposes of this Section 8.12, the combined capital and surplus of such association or corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time any successor Trustee shall cease to be eligible in accordance with the provisions of this Section 8.12 and another association or corporation is eligible, the Trustee shall resign immediately in the manner and with the effect specified in Section 8.13. 8.13 Resignation of Trustee. The Trustee may resign and be discharged from the trusts created by this Indenture by giving to the Authority at least 60 days' advance written notice. Such resignation shall take effect on the day specified a successor Trustee in tice, but e has been e Trustee shall not be discharged from the trusts hereby duntil 50012090 -44- approved and appointed. Subsequent to such date, the Trustee shall have no further duties and obligations under this Indenture. 8.14 Removal of Trustee. (1) The Trustee may be removed at any time, either with or without cause, by the Authority so long as there has been no Event of tthatefault areare due whichthen owing pursuant to and provided that all fees and expenses of the Trustee Section 8.10 and that are not disputed shall first be paid. (2) The Trustee may be removed at any time, either with or without cause, by the Authority at the written requestthe Owners event oofnot Defaultthan has occurred majority and in g regte emains principal amount of Outstanding Bonds if an ent uncured, provided that all fees and expenses of the Trustee that are due and owing pursuant to Section 8.10 and that are not disputed shall first be paid. (3) Any removal of the Trustee pursuant to this Section 8.14 shall be effected by delivery to the Trustee of a written instrument to that effect signed by an Authorized Representative of the Authority. (4) Such removal shall take effect on the day specified in such notice, but the Trustee shall not be discharged from the trusts suchhereby dat crtheeTrustee shallsuccessor have nostee has further been approved and appointed. Subsequent to duties and obligations under this Indenture. 8.15 Appointment of Successor Trustee. (1) In case at any time the Trustee shall resign, be removed or otherwise become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver of the Trustee or of its property shall be appointed, or if a public supervisory office shall take charge or control of the Trustee or of its property or affairs, a vacancy shall forthwith and ipso facto be created in the office of such Trustee hereunder, and the Authority shall promptly appoint a successor trustee. Any such appointment shall be made by a written instrument executed by an Authorized Representative of the Authority. The Authority shall direct the successor Trustee to mail notice by first class mail, postage prepaid, at least once within 30 days of such appointment, to the Owners of all Outstanding Bonds at their addresses on the Bond Register. (2) If, in a proper case, no appointment of a successor Trustee shall be made pursuant to Section 8.15(1) within 90 days after e8the 13 oreipt by the Authority ofremoval of the Trust f the pursuantto notice of resignation given pursuant to Sect _ may apply Section 8.14, the retiring Trustee, at the expense a successoruthority, Trustee.o The Owner ourt may thereupon, any court of competent jurisdiction to appoint after such notice, if any, as such court may deem proper and prescribe, appoint a successor Trustee. 50012090 -45- 8.16 Merger of Trustee. Any Personsinto which the Trustee may be converted or ___ consolidated or to which it may sell or transfer its corporate merged, or with which ii may bc ��•���••�--___, _ _ trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to r shall and become trustee hereunder and shall be which it is a party, ipSO facto, be �.... successorOwers, discretions, vested with all of the title to the Trust Estate and all the trusts, p immunities, privileges and all other matters as was its predecessor, without the execution or of instrumentor any further act, deed or conveyance on the part of any of the parties filing any iiista+a..��••� •.i,r« n �n but only if such resulting entity is hereto, anything herein to the contrary notwithstanding, entitled under state or federal law to exercise corporate trust powers. 8.17 Transfer of Rights and Pro.ert to Successor Trustee. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the and thereupon such such ent Authority a written instrument accepting or conveyance, shallebe omen fully vestedwiththe successor, without any further act, deedY Trust Estate and the rights, powers, trusts, duties andobligations frm uthoriof its zeddecessor; but such d Representative of predecessor shall, nevertheless, on the written request from its successor execute and deliver a written instrument transferring to the Authority or of �..�'' such successor all the Trust Estate and the rights, powers, trusts, duties and obligations such predecessor hereunder, and every predecessor trustee shall deliver all funds held by it as Trustee hereunder to its successor. Should any assignment, conveyance anodr wricertainly vesting instrument from the Authority be required by any successor Trustee for more duties and obligations in such successor Trustee the Trust Estate and rights, powers,and all such hereby vested or intended to be vested in the predecessor Trustee, any assignments, conveyances and written irsac'ents shall, Trustee shallrequest, give, or causetthe acknowledged and delivered by the Authority. Each successor Bond Registrar to give, notice of its appointment to all Owners appearing on the Bond Register as of the date of appointment. The successor Trustee shall reimburse the predecessor Trustee for any expenses (including counsel fees) incurred under this Section 8.17. 8.18 Survival of Rights. The Trustee's rights to immunity and protection from liability hereunder, its right to receive payment of ts Trusts and expenses and and the Hazardouss rights Substances indemnification hereunder and under the Deeddefeasance shall survive its removal or resignation and the final payment, defeasa ce or discharge of the Bonds and the termination of the lien of this Indenture. 8.19 A ointment of a Co -Trustee. It is the intent of the Authority and the Trustee jurisdiction (including particularly the law of that there shall be no violation of any law of any j orations or associations to transact the State) denying or restricting the right of banking corp business as Trustee in such jurisdiction. It is recognized hat in case remedies onf ltdefault, oration a n case er this Indenture and, in particular, in case of theenforcementany the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies granted s actioherein ton which e tee or may beldesirabletitle to tor properties in trust, as granted herein, or take any other necessary in connection therewith, it may be necessary that the Trustee appoint, with the 50012090 -46- consent of the Authority, an additional individual or institution as a separate trustee or co - trustee. The following provisions of this Section 8.19 are adopted to these ends. In the event that the Trustee appoints an additional individual or institution as a separate trustee or co -trustee, in the event of the incapacity or lack of authority of the Trustee, by reason of any present or future law of any jurisdiction, to exercise any of the rights, powers, trusts and remedies granted to the Trustee herein or oin�onnectionthe therewithEeach and every te or to take any other action which may be necessary or desirable remedy, power, right, obligation, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be imposed upon, exercised by or vested in or conveyed to the Trustee with respect thereto shall be imposed upon, exercisable by and vest in such separate trustee or co -trustee, but only to the extent necessary to enable such separate trustee or co -trustee to exercise such powers, rights, trusts and remedies, and every covenant and obligation necessary to the exercise thereof by such separate trustee or co -trustee shall run to and be enforceable by either of them. Such separate trustee or co -trustee shall deliver an instrument in writing acknowledging and accepting its appointment hereunder to the Authority and the Trustee. Should any instrument in writing from the Authority be required by the separate trustee or co -trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to him or it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority. If the Authority shall fail to deliver the same with 15 days of such request, the Trustee is hereby appointed attorney-in-fact for the Authority to execute, acknowledge and deliver such instruments in the Authority's name and stead. In case any separate trustee or co - trustee, or a successor to either, shall die, become incapable of acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and obligations of such separate trustee or co -trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new trustee or successor to such separate trustee or co -trustee. ARTICLE IX DISCHARGE OF OBLIGATIONS TO BONDOWNERS 9.1 Defeasance of Bonds. In the event that, in accordance with a refunding or defeasance plan, the Authority shall issue refunding bonds or have money available from any other lawful source to pay the principal of and interest on the Bonds or such portion thereof included in the refunding or defeasance plan as the same become due and payable and to refund or defease such then Outstanding Bonds and to pay the costs of refunding or defeasance y in a and any fees and expenses then due to �eTrustee, rend shall funding orve set aside defeasance,lrmone gland/or special fund for and pledged to suchpayment, of the definition of Government Government Obligations described in paragraph (1) Obligations in Section 1.1 that are not subject to redemption prior to maturity sufficient in amount, together with known earned income from the investments thereof, to make such 50012090 -47- payments and to accomplish the refunding or defeasance as scheduled (the "trust account"), redemption of such Bonds; if applicable, then in that and shall make irrevocable provisions forrede � ption o such Bonds; applicable, all right and interest of the Owners of the Bonds to be so retired, refunded or defeased (collectively, the "defeased Bonds") in the covenants of this Indenture, in the Trust Estate, and payment of ,.,,,.�. defeased Bonds, other than the right in the funds and accounts obligated to the such to receive the funds so set aside and pledged, thereupon shall cease and become void, except that such Owners shall have the right to receive payment of the principal of and premium, if any, and interest on the defeased Bonds from the trust account and, in the event the funds in the trust account are not available for such payment, shall have the residual right to receive payment of the principal of and premium, if any, and interest on the defeased Bonds from the Trust Estate (but only if this Indenture has not been discharged as described in Section 9.2) without any priority of lien or charge against the Trust Estate or those covenants with respect except to be therefrom (except that such rights as exist with respect to payment, thereto 6., ,,., paid _------ (except and transfer of such Bonds under the pertinent provisions of this Indenture shall continue in full force and effect). The Authority shall include in the refunding or defeasance m plan such provisions as the Authorityall deems of particular maturihy of theoBondse for n notice of of any defeased Bonds that constitute less thana the defeasance to be given to the Owners of the defeased Bonds and to such other Persons as the Authority shall determine, and for any required replacement of Bond certificates for defeased defeased Bonds. After the establishing a d the Authorid full gof ty thencmay apply any money in any Bonds shall be deemed to be discharge other fund or account established for the payment or redemption of the defeased Bonds to such lawful purposes as it shall determine, subject only to the rights of the Owners of any other Bonds then Outstanding and the rights of the Trustee hereunder. Notwithstanding the foregoing, no Bonds shall be defeased unless the Authority has delivered to the Trustee written confirmation from the Rating Agency, if any, that such defeasance will not result in a of therating thedefeased Bonds. reduction or witndra�va, or. The Authority shall notify the Trustee of the defeasance of any Bonds. The Trustee may rely on any notice provided to it by the Authority pursuant to this Section 9.1. However, the Trustee may in its discretion request that the Authority provide to the Trustee (a) an opinion of Bond Counsel stating that the defeased Bonds are no longer deemed Outstanding under this indenture and/or (b) verification by an Accountant acceptable to the Trustee of the conformity of the trust account with the provisions of this section. 9.2 Discharge of Indenture. The obligations of the Trustee hereunder shall remain in effect with respect to all Bonds until the principal of and premium, if any, and interest on all Bonds shall have been paid in full or discharged,some of the Bonds pursuant tot the en of Section,9 l�enture Any may have been discharged with respect to money held by the Trustee after payment or discharge of principal of and interest on all of the Bonds and all amounts due to the Trustee hereunder shall be free from the trust hereof and, except for any money held in the Rebate Fund, shall promptly thereafter be transferred to the City to the extent certified to the Trustee thy the e Yie Authot City ri ase and theamounts Trustee shallthe beireleased and under the Contingent Loan Agreement, and then to 50012090 -48- discharged with respect thereto. Upon payment or discharge of the Bonds ir. full, the Trustee shall release its interest in Deed of Trust. ting for, or Neither the Trustee nor the Bondon Registrar sbenefit shall fromresponsible held for thenpay payment of paying to, any Bondowner any returnor unredeemed Bonds or outstanding checks, and ntcalculation f the _ the Bond Registraraffect underresult this in any offset against fees and expenses due to the Indenture. be ted for 9.3 Nonpresentment of Bonds. In the event any Bond shall either at maturity or at tthe dates fnxed for payment when the principal thereof becomes due, redemption thereof or otherwise, if funds sufficient to pay the principal and interest accrued thereon to such date shall have been made available to the Bond Registrar for the benefit of the Owner thereof, the Bond Registrar shall hold such principal and interest accrued thereon to such date, without liability to the Owner for further theinterest su h Bondthereon, shall have becobenefit me due, of such Bond, for a period of one year from either at maturity or upon earlier redemption or otherwise, and thereafter the Bond Registrar shall remit such funds to the Authority unless otherwise required by the Uniform Unclaimed Property Act, RCW 63.29, as amended, or its successor. In the event the Uniform Unclaimed Property Act, as amended, or its successor, should require by law other action to be taken by the Bond Registrar, then the Bond Registrar shall comply with such law and this section shall be deemed amended. After remittance as ovided herein, forthwith cease,e tBond erminategand Registrar'sliability lcobmp completely payment to the Owner of such Bond shall discharged and thereafter the Owner shall be restricted exclusively to his or her rights of recovery provided under the Uniform Unclaimed Property Act. ARTICLE X AMENDMENT OF INDENTURE 10.1 Amendments to Indenture. (1) This Indenture shall not be supplemented or amended in any respect subsequent to the initial issuance of the Bonds, except as provided in and in accordance with and subject to the provisions of this section. The Authority and the Trustee may from time to time and at any time, of or notice to the Owners of the Bonds but with the consent of the City if Contingent Loan Agreement, enter into Supplemental Indentures for the (2) without the consent so required by the following purposes: (a) to cure any formal defect, omission, inconsistency or ambiguity in this Indenture in a manner not materially adverse to the Owner of any Bond; 50012090 -49- (b) to impose upon the Trustee (with its consent) for the benefit of remedies, eo powerc authority, security, liabilities the Owners of the Bonds any addiiioliat ttgtato, tc.at.......�, r.- �, ___> authority, or duties which may lawfully be granted, conferred or imposed and which are not contrary to or inconsistent with this Indenture or the rights of the Trustee hereunder as theretofore in effect; (c) to add to the covenants and agreements of, and limitations and Authority in this Indenture other covenants, agreements, limitations and restrictions upon, the y or inconsistent restrictions to be observed by the Authority which are not contrary to ons t with this Indenture as theretofore in effect; (d) to confirm, as further assurance, any pledge under, and the subjection to any claim, lien or pledge created or to be created by, this Indenture of any other money, securities or funds; (e) to comply with any future federal law, regulation or interpretation to prevent the occurrence of an event that in the opinion of Bond Counsel would lead to a Determination of Taxability; j to authorize different denominations of the Bonds and to make correlative amendments and modifications to this Indenture regarding exchangeability of Bonds of different Authorized Denominations, redemptions of portions of Bonds of particular Authorized Denominations and similar amendments and modifications of a technical nature; (g) to make such changes as are required to provide for the conversion of the Bonds to fully immobilized form; (h) to make changes required in connection with the issuance of Additional Bonds; (i) to make such changes as are required by the Rating Agency to obtain or maintain a rating for the Bonds; (j) to make such changes as are elsewhere expressly permitted by this Indenture, including but not limited to amendments to the continuing disclosure undertaking of the Authority made in Section 6.6; and (k) to modify, alter, amend or supplement this indenture in any other respect which is not materially adverse to the Owners of the Bonds and which does not involve a change described in Section 10.1(3). Before the Authority and the Trustee shall adopt any such Supplemental Indenture pursuant to this subsection or simultaneously with such adoption, there shall be or have been delivered to the Authority and the Trustee an opinion of Bond Counsel, stating that such Supplemental Indenture is authorized or permitted by this Indenture and will, upon the 50012090 -50- execution and delivery thereof, be valid and binding upon the Authority in accordance with its terms and will not cause the interest on the Bonds to be included in gross income of the Owners for federal income tax purposes. (3) (a) Except for any Supplemental Indenture entered into pursuant to Section 10.1(2), subject to the terms and provisions contained in this Section 10.1(3) and not otherwise, the Owners of not less than a majority in aggregate principal amount of Bonds then Outstanding shall have the right from time to time to consent to and approve the entering into by the Authority and the Trustee of any Supplemental Indenture deemed necessary or desirable by the Authority for the purpose of modifying, altering, amending, supplementing or rescinding, in any particular, any of the terms or provisions contained in this Indenture; except that, unless approved in writing by the Owners of all Bonds then outstanding, nothing contained in this section shall permit, or be construed as permitting: (i) a change in the times, amounts or currency of payment of the principal of or interest on any outstanding Bond, or a reduction in the principal amount or redemption price of any outstanding Bond or a change in the method of redemption or redemption price of any outstanding Bond, or (ii) a preference or priority of any Bond over any other Bond, or (iii) a reduction in the aggregate principal amount of Bonds, the consent of the Owners of which is required for any such Supplemental Indenture, or (iv) the creation of any lien or pledge of Project Revenues (other than the lien of any Additional Bonds or any bonds issued to defease Bonds pursuant to Section 9.1) ranking prior to or on a parity with the lien of the Bonds, or (v) the modification of any of the provisions of this Section 10.1. (b) If at any time the Authority shall notify the Trustee in writing of its desire to enter into any Supplemental Indenture for any of the purposes of this Section 10.1(3), the Trustee shall, within 30 days of its receipt of such notice, cause notice of the proposed Supplemental Indenture to be given by first class mail, postage prepaid, to the City, if the consent of the City is required by the Contingent Loan Agreement, and to all Owners of the then outstanding Bonds and to the Rating Agency, if any. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture, shall request the consent of each Bondowner and shall state that a copy of the proposed Supplemental Indenture is on file at the office of the Trustee for inspection by all Owners of outstanding Bonds. 50012090 -51- (c) Within four weeks after the date of the mailing of such notice, the such �____,,..,..�.,+tet T„�P„t„rP substantially in the form Authority and the Trustee may enter into Supplemental _..________ _ described in such notice, but only if there shall have first been or is simultaneously delivered to the Trustee (i) the required consents, in writing, of the ^Ownelsof at t, least majority ond yCofithe aggregate principal amount of the Bonds Outstanding, and (ii) an opinion of stating that such Supplemental Indenture is authorized or permitted by this Indenture and, upon the execution and delivery thereof, will be valid and binding upon the Authority in accordance with its terms and will not cause interest on the Bonds to be includable in gross income of the Owners for federal income tax purposes. (d) If the Owners of not less than the percentage of Bonds required by this Section 10.1(3) shall have consented to and approved the execution and delivery thereof herein, of Bond shall have any right to object to the adoption of as provided ,1,C�c�,a, no Owner.,_ any such Supplemental Indenture, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the Authority or the Trustee from entering into the same or from taking any action pursuant to the provisions thereof. Any written consent to a permitted amendment one any number of concurrent written instruments of may be embodied in and evidenced by „�.., or substantially similar tenor signed by Bondowners in person or by an agent duly appointed in writing, and such consent shall become effective when such instrument or instruments are delivered to the Authority or the Trustee. (4) Proof of the execution of any such consent or of a writing appointing any such agent shall be sufficient for any purpose and shall be conclusive in favor of the Authority if made in the following manner: the fact and date of the execution by any Person of any such consent or appointment may be proved by the affidavit of any witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgements of deeds, certifying that thef signing date of execution of suchp onsenteor nt acknowledged to him the execution thereof. The fact and appointment may also be proved in any other manner which the Authority may deem sufficient; but the Authority may nevertheless, in its discretion, require further proof in cases where it deems further proof desirable. Any consent by the Owner of any Bond shall bind any future Owner of the same Bond with respect to any Supplemental Indenture executed by the Authority pursuant to such consent. (5) Upon the execution and delivery of any Supplemental Indenture pursuant to the provisions of this Section 10.1, this Indenture shall be, and be deemed to be, modified and amended in accordance therewith, and the lOwners respective Orights, of Bontdssand then Outstaandi�ng shall s under this Indenture of the Authority, the Trustee anda thereafter be determined, exercised and enforced under this Indenture subject in all respects to such modifications and amendments. 10.2 Notice of Amendment. The Trustee shall notify or cause the Bond Registrar to notify the Bondowners and the Rating Agency, if any, by mail of all amendments made to this Indenture whether or not such amendment required the consent of Bondowners. 50012090 -52- ARTICLE XI MISCELLANEOUS 11.1 Severabilitv. If any provision of this Indenture shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any provisions of any constitution or statute or rule of public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions contained herein invalid, inoperative or unenforceable to any extent whatsoever. The invalidity of any one or more phrases, sentences, clauses or paragraphs Indenture or any part the�eofined in the Indenture shall not affect the remaining portio 11.2 Payments Due on Saturdays, andSundays Holidays. maturity thereof, ona datefixeere d date of payment of principal of the Bonds, whether at the for redemption or otherwise, or payment of interest,is not a the next sBusiness Day then such cceeding Business Day payment need not be made on such date but may be made on with the same force and effect as if made on the date of maturity or redemption or the date such interest was due, as the case may be, and no interest shall accrue for the period from and after such date. ecessor. Whenever in 11.3 Successor Is Deemed Included stee its named ores to referPeddto, such reference shall this Indenture either the Authority or the Tr be deemed to include the successors or assigns thereof, and all the covenants and agreements contained in this Indenture by or on behalf of the Authority and the Trustee shall bind and inure to the benefit of the 'respective successors and assigns thereof whether so expressed or not. 11.4 Limitation of Rights to Parties and Bondowners. Nothing expressed or implied in this Indenture or in the Bonds is intended or shall be construed to give to any Person other than the Authority, the Trustee and the Owners of the Bonds any legal or equitable right, remedy or claim under or in respect of this Indenture or any covenant, condition or provision contained herein or in the Bonds, and all sucht,conditions and provisions are andt shall be held to be for the sole and exclusive benefit of the Authority, the Trustee and the Owners of the Bonds. 11.5 Waiver of Notice. Except as otherwise provided herein, whenever in this Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the Person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. 50012090 -53- 11.5 Notices, All notices to Bondowners shall be given by first class mail. Any notice to or demand upon the following parties shall be given by registered or certified mail, return receipt requested, or overnight express delivery, as follows, or to such other address as is specified by the Authority, the City, the Rating Agency or the Trustee to the others in writing: 1 If to the Authority, to: If to the Trustee, to: If to the City, to: If to the Rating Agency, to: Housing Authority of the City of Yakima 110 Fair Avenue Yakima, Washington 98901 Attn: Executive Director U.S. Bank Trust National Association 2120 601 Union St., Suite 6,+�-" Seattle, Washington 98101 Attn: City of Yakima 129 N 2nd Street Yakima, Washington 98901 Attn: Director of Community and Economic Development Moody's Investors Service, Inc. 99 Church Street, 10th Floor New York, New York 10007 Attn: Nicole Johnson 11.7 Waiver of Personal Liability. No commissioner, officer, agent or employee of the Authority or the Trustee nor any person executing the Bonds shall be individually or personally liable for the payment of the principal of or premium, if any, or interest on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof; but nothing contained herein shall relieve any such commissioner, officer, agent, employee or other person from the performance of any official duty provided by law or by this Indenture. 11.8 Applicable Provisions of Law. This Indenture shall be governed by and construed in accordance with the laws of the State of Washington without regard to the conflict or choice of laws provisions thereof. 11,9 Execution in Several Counterparts. This Indenture may be executed in counterparts and each such counterpart shall for all purposes be deemed to be an original, and all such counterparts, or as many of them as the Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. 11.10 Notice to Rating Agency. The Trustee shall give written notice to the Rating Agency, if any, within 10 days after the Trustee receives notice of their occurrence, of the 50012090 -54- replacement of the Trustee, (such notice to be given by the successor trustee) and any redemption or defeasance of all the Bonds, and shall give prior written notice to the Rating Agency of any change in this Indenture. Unless otherwise directed by the Rating Agency, notice shall be mailed to the address provided in Section 11.6. IN WITNESS WHEREOF, the Housing Authority of the City of Yakima has caused this Indenture to be signed in its name by the Chair of its Board of Commissioners and attested by its Executive Director and U.S. Bank Trust National Association, as Trustee and Bond Registrar hereunder and in acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name and by its officer thereunder duly authorized, all as of the day and year first above written. HOUSING AUTHORITY OF THE CITY OF YAKIMA ATTEST: Executive Director 50012090 By Chair, Board of Commissioners U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee and Bond Registrar By Title: -55 EXHIBIT B PERMITTED INVESTMENTS FOR OF WASHINGTON HOUSING AUTHORITIES IN THE STATE Or Housing authorities may invest their funds in any investments that are legal for savings banks. RCW 35.82.070(6). Savings banks may invest in any of the following: • In bonds or other obligations of or guaranteed by the United States of America or the Dominion of Canada (if payable in the United States in U.S. funds). T) r' 1 T 12 1,1 lid rr JJ,h T.'J L,• v, Except as limited by regulation, in obligations of the United States either directly or in the form of securities of, or other interests in, an open-end or closed-end management -type investment company or investment trust registered Company Act of 1 94n if the portfolio of the under the Federal Investment �.otiipaiij% ��� A� �, __ (1) r investment company or investment trust is limited to obligations of the United States and to repurchase agreements full -y collateralized by such obligations, and (2) the investment company or investment trust takes delivery of the collateral for any repurchase agreement either directly or through an authorized custodian. RCW 33.24.025; 50012090 • In bonds or other interest-bearing obligations of the State of Washington or any agency thereof. RCW 33.24.030; • In bonds or other interest-bearing obligations of any other state of the United States, upon which there is no existing default and upon which there has been no default for more than ninety days within ten years immediately preceding the investment. RCW 33.24.040; • In valid general obligation warrants or bonds of any city, town, county, school district, port district or other municipal corporation in the State of Washington. RCW 33.24.050; • In valid general obligation warrants or bonds of any city, county, school district, port district or other municipal corporation in the United States, having a population of not less than 50,000, that has not defaulted in the payment of interest or principal on any general obligation within the last ten years, and which warrants or bonds are rated not less than Baa by Moody's Investors Service, Inc. or the equivalent. RCW 33.24.060; • In obligations issued or guaranteed by any multi -lateral development bank in which the United States Government formally participates. RCW 33.24.065; B-1 50012090 • In revenue bonds of any city, town, district or political subdivision of the State of Washington for which the revenues of a utility or revenue-producing facility are irrevocably pledged. RCW 33.24.070; • In the light, water or sewer revenue bonds of any city or other municipal corporation in the United States having a population of at least 50,000, which has not defaulted in the payment of interest or principal within the last ten years and for the payment of which the entire revenue of the issuer's light, water or sewer system, less maintenance and operating costs, is irrevocably pledged. RCW 33.24.070; • In the bonds of any local improvement district of any city in the State of Washington (except bonds issued for an improvement consisting of grading only), the ultimate payment of which is guaranteed by the municipality, but only if one-half of the lots in the district are improved with revenue-producing houses or other improvements. RCW 33.24.080; • In obligations of any federal home loan bank, the Homeowners' Loan Corporation, any federal land bank, the Federal Savings & Loan Insurance Corporation, the Federal Housing Administration, the Federal National Mortgage Association, or any other instrumentality of the federal government or any state or federal agencies organized under the laws of the United States or the State of Washington authorized to lend to or act as a fiscal agency for or insurer of a savings and loan association. RCW 33.24.090; • In loans, mortgages or other obligations secured by real property. RCW 33.24.100; • In the bonds or other obligations of a metropolitan municipal corporation ("Metro"). RCW 35.58.510; • In bonds and other obligations issued by a municipality of the State of Washington which are secured by an agreement between the issuer and the federal government under which the federal government agrees to lend to the issuer, prior to the maturity of such obligations, money in an amount sufficient to pay the principal of and interest on those obligations to maturity. RCW 35.81.110; • In designated qualified public depositories or in certificates notes or bonds of the United States or other obligations of the United States or its agencies or of any corporation wholly owned by the government of the United States. RCW 36.29.020; • In time deposits, money market deposits, savings deposits and other investment B-2 deposits in qualified public depositories. RCW 39.58.010; RCW 36.29.020; RCW 39.58.130. In bankers' acceptances purchased on the secondary market, in Federal Home Loan Bank notes and bonds, Federal Land Bank bonds, and Federal National Mortgage Association notes, debentures and guaranteed certificates of participation, or the obligations of any other government-sponsored corporation whose obligations are or may become eligible as collateral for advances to member banks as determined by the Board of Governors of the Federal Reserve System. RCW 36.29.020; and • In notes or bonds secured by FHA -insured mortgages, in FHA debentures, in bonds of any other the bonds of the Homeowners Loan Corporation, and in the other corporation which is or may be created by the United States as a governmental agency or instrumentality. RCW 39.60.010. 50012090 B-3 { c PRELIMINARY OFFICIAL STATEMENT DATED 1998 E co -m NEW ISSUE MOODY'S RATING: Applied For ti NEGOTIATED (See the caption "BOND RATING" herein) o In the opinion of Bond Counsel, assuming compliance by the Authority with applicable requirements of the Internal Revenue Code of 1986, as amended, including `o .p existing federal law and is not an item of tax preference for purposes of the altemative minimum tax applicable to individuals. However, while interest on the Bonds also F.D. also is not an item of tax preference for purposes of the alternative minimum fax applicable to corporations, interest on the Bonds received by corporations is taken ointo account in the computation of adjusted current earnings for purposes of the alternative minimum tax applicable to corporations, interest on the Bonds received 0..2.-- by certain corporations may be subject to an environmental tax, interest on the Bonds received by certain S corporations may be subject to fax and interest on the 0a co uBonds received by foreign corporations with United States branches may be subject to a foreign branch profits tax. Receipt of interest on the Bonds may have other o 0 federal tax consequences for certain taxpayers. See the captions "TAX EXEMPTION" and "CERTAIN OTHER FEDERAL TAX CONSEQUENCES." co .q °c -0� YAKIMA HOUSING AUTHORITY to at 0 Yakima County, Washington oc $�as N E° 0 0 u HOUSING REVENUE BONDS, 1998 `°.. (NUEVA PRIMAVERA PROJECT) a._ o0 CA h DATED: 1, '1998 DUE: , as shown below co doom `o `o m The Yakima Housing Authority Nueva Primavera Housing Revenue Bonds, 1998 (the "Bonds"), construction of 38 units of multi -family housing c a�:and 3,600 square feet of office space and renovation of an existing single family residence are being issued to finance the iD N Z E0a arbitrage and arbitrage rebate requirements, interest on the Bonds is excluded from gross income of registered owners for federal income tax purposes under co a `m m The Bonds will be issued as fully registered bonds in denominations of $5,000 and integral multiples thereof Principal of the Bonds will be m0 m paid on 1 of each year, commencing upon presentation and surrender of the Bonds, at maturity or early redemption, at m c a the principal office of the Paying Agent, currently U.S. Bank Trust National Association. Interest on the Bonds will be paid commencing m and semiannually thereafter on each 1 and 1 until maturity or earlier redemption. Interest on the Bonds will be paid o c by check or draft of the Paying Agent mailed or, at the written request of the owner of $1,000,000 or more in principal amount of Bonds given m � -2 to the Bond Registrar in accordance with the Indenture, by wire transfer, on the payment date to the registered owners at the addresses RS Eo ` appearing on the Bond Register on the fifteenth day of the month preceding each interest payment date. c -- Fs E E cr MATURITY SCHEDULE* .9.? o Due Interest Due Interest o =° c 1 Amount Rate Price 1 Amount Rate Price cci) ° —m `0 1999 Z., h 2004 . oZ' .0, 2000 2005 E U i:• 0 2001 2006 0 2002 2007 15 ;a°: m 2003 2008 „', o_' $ Current Interest Term Bond due _ 1, 2018 %. (priced at) E.c �o $ Current Interest Term Bond due 1, 2028, %. (priced at) ro— 3 E .`0e ,a The principal of, and interest on the Bonds will be payable from, and will be secured by a pledge of, certain revenues and receipts available r h -o from the Project as more fully described under the heading "SOURCES OF PAYMENT AND SECURITY FOR THE BONDS" herein. In ti u o addition, the Bonds are payable from and are secured by a pledge of the General Revenues of the Authority c m m The Bonds maturing on or before 1, 2008 will not be subject to optional redemption prior to their scheduled maturity. The Bonds maturing c 67 E h on _ 1, 2018 and _ 1, 2028 will be subject to optional redemption at par in whole or in part on any interest payment date on or after _ oc $ 1, 2008 as outlined herein under the heading "OPTIONAL REDEMPTION." o o The Bonds due _ 1, 2018 and _ 1, 2028 are also subject to mandatory redemption. See "MANDATORY REDEMPTION" herein. 78 c m The Authority has designated the Bonds as "qualified tax-exempt obligations" under the Internal Revenue Code of 1986, as amended. See E a'= "CERTAIN OTHER FEDERAL TAX CONSEQUENCES" herein. j0 The Bonds are offered by the Underwriter when, as and if issued, subject to the approving legal opinion of Foster Pepper & Shefelman PLLC, Seattle, Washington, Bond Counsel. It is expected that the Bonds in definitive form will be ready for delivery in Seattle, Washington, or at a o o the facilities of The Depository Trust Company in New York, New York on or about , 1998. �o u This cover page contains certain information for quick reference only It is not a summary of this issue. Investors must read m the entire Official Statement to obtain information essential to making an informed investment decision. .GU m`ti c :4 `?mo c `.B 5.c c * Preliminary; subject to change li E BancAmerica y(l).c ROBERTSON STEPHENS =oaz Representations Neither the Authority nor the Underwriter has authorized any dealer, broker, salesperson or other person to give any information or make any representations other than those made in this Preliminary Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the Authority or the Underwriter. This Preliminary Official Statement does not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information contained in this Preliminary Official Statement has been obtained from Authority Preliminary Officials and other sources believed to be reliable. Neither a representation, warranty nor guarantee is made by the Underwriter as to the accuracy or completeness of any information in this Preliminary Official Statement and nothing contained in this Preliminary Official Statement is or shall be relied upon as a promise or representation by the Underwriter. The delivery of this Preliminary Official Statement does not imply that the information contained herein is correct as of any time subsequent to the date of the Preliminary Official Statement as shown on the cover page. Disclosure Statement The Authority will deliver to the Underwriter at the time of delivery of the Bonds a signed statement substantially to the effect that this Preliminary Official Statement, as of its date and as of the date of the Bonds, neither contains any untrue statement of a material fact nor omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading in any material respect and that there has not been any material adverse change in the normal operations or financial condition of the Authority since the date of the Preliminary Official Statement. Secondary Market It has been the practice of the Underwriter to maintain a secondary market in municipal bonds which it sells. The Underwriter intends to engage in secondary market trading of the Bonds, subject to applicable securities laws. The Underwriter, however, is neither obligated to engage in secondary trading nor to repurchase any of the Bonds at the request of the registered owners thereof and no assurance can be given that a secondary market for the Bonds will be available. In connection with the offering of the Bonds, the Underwriter may over -allot or effect transactions that stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. 2 YAKIMA HOUSING AUTHORITY YAKIMA COUNTY, WASHINGTON BOARD OF COMMISSIONERS Jean Allan Chair Brian V. Johnson Vice -Chair Francis Badu Member Barry G. Laws Member Michael Delgado Member AUTHORITY MANAGEMENT Alice Sells Sharon Wandler Roger Whittlesey Dawn Rodrigues Executive Director Finance Director Maintenance Supervisor Section 8 Housing and Accounting Specialist FINANCIAL CONSULTANT TO THE AUTHORITY Sivia/Levine Associates LLC Seattle, Washington BOND COUNSEL Foster Pepper & Shefelman PLLC Seattle, Washington UNDERWRITER BancAmerica Robertson Stephens Seattle, Washington TRUSTEE, REGISTRAR AND PAYING AGENT U.S. Bank Trust National Association TABLE OF CONTENTS Page Summary Statement v Yakima Housing Authority 1 Introduction 1 Description of the Bonds 1 Mandatory Redemption 1 Optional Redemption 2 Extraordinary Redemption 2 Trustee 2 Sources of Payment and Security for the Bonds 3 Estimated Sources and Uses of Funds 4 Debt Service Requirements for the Bonds 6 Table 2 7 Risks to the Bondholders 8 The Authority 12 Financial Information 13 General and Economic 14 Summary of Principal Documents 15 Litigation 17 Legal Opinion 17 Conflicts of Interest 18 Tax Exemption 18 Certain Other Federal Tax Consequences 19 Continuing Disclosure 19 Bond Rating 21 Underwriting Agreement 21 Concluding Statement 21 City of Yakima, Washington 5 Net Direct Debt and Estimated Overlapping General Obligation Debt 5 Bonded Debt Ratios of the City 5 Statutory Debt Limit Calculation for the City 6 Tax Collection Record of the City 7 Representative Ad Valorem District Property Tax Rates 7 Audited Financial Statement for the Period Ending March 31, 1997 Appendix A Information Chart About the City of Yakima Appendix B 4 SUMMARY STATEMENT THE FOLLOWING SUMMARY STATEMENT IS FURNISHED SOLELY TO PROVIDE LIMITED INTRODUCTORY INFORMATION REGARDING THE BONDS AND DOES NOT PURPORT TO BE COMPREHENSIVE. ALL SUCH INFORMATION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE DETAILED DESCRIPTION APPEARING IN THE PRELIMINARY OFFICIAL STATEMENT THE OFFERING OF THE BONDS TO POTENTIAL INVESTORS IS MADE ONLY BY MEANS OF THE ENTIRE PRELIMINARY OFFICIAL STATEMENT The Bonds: The Bonds are being issued by the Yakima Housing Authority, Yakima County, Washington (the "Authority") in the principal amount of $ * . The Bonds will be dated and bear interest from 1, 1998. Interest on the Bonds will be payable on and semiannually thereafter on each succeeding and 1 and 1. The Bonds will be issued as fully registered bonds in denominations of $5,000 and integral multiples thereof. Purpose: Proceeds of the Bonds will be used to construct 38 units of multi -family housing and 3,600 square feet of office space to be used by the Authority, renovate an existing single family residence, fund a debt service reserve (the "Reserve Account") and pay costs of issuance. Mandatory Redemption: Bonds due 1, 2018 and 1, 2028 (the "Term Bonds") are subject to mandatory redemption as set forth under "MANDATORY REDEMPTION" herein. Optional Redemption: The Bonds maturing on or before 1, 2008 will not be subject to optional redemption prior to their scheduled maturity. The Term Bonds will be subject to optional redemption in whole or in part on any interest payment date on or after 1, 2008 at a price of par plus accrued interest as described herein under the heading "OPTIONAL REDEMPTION." Extraordinary Redemption: The Bonds shall be subject to redemption as a whole or in part at a redemption price equal to the principal amount thereof without premium plus accrued interest to the redemption date (1) if any of the properties in the Nueva Primavera project (the "Project") shall have been condemned, damaged or destroyed to the extent that, in the opinion of the Authority, repair could not be completed within six months, or the restoration and repair would not be economically practical or desirable, (2) if, and to the extent, necessary to preserve the tax- exempt status of interest payable on the Bonds, (3) from any balance remaining in the Project Fund upon completion of the Project, or (4) upon notice by the City pursuant to terms of the Loan Agreement. Security: The principal of and interest on the Bonds will be payable from, and will be secured by a pledge of, certain revenues and receipts available from the Project as more fully described under "SOURCES OF PAYMENT AND SECURITY FOR THE BONDS" herein. In addition, the Bonds will be payable from the General Revenues of the Authority and the Reserve Account. The Bonds will additionally be secured by a Deed of Trust on the properties comprising the Project. The Bonds are further secured by an agreement between the Authority and the City of Yakima under which the City will agree to loan funds to the Authority to maintain the required minimum balance in the Reserve Account if money in that account is used to pay debt service on the Bonds. Tax Exemption: In the opinion of Foster Pepper & Shefelman PLLC, Seattle, Washington, Bond Counsel, interest on the Bonds is excluded from gross income for federal income tax purposes. Interest on the Bonds is not an item of tax preference for purposes of the alternative minimum tax applicable to individuals or corporations; however, interest on the Bonds is taken into account in the computation of the alternative minimum tax applicable to corporations. See "TAX EXEMPTION" herein. Rating: The Authority has applied for a rating on the Bonds from Moody's Investors Service. See "BOND RATING" herein. * Preliminary; subject to change 5 PRELIMINARY OFFICIAL STATEMENT YAKIMA HOUSING AUTHORITY NUEVA PRIMAVERA HOUSING REVENUE BONDS, 1998 INTRODUCTION The Yakima Housing Authority (the "Authority"), a public body corporate and politic duly organized and existing under and by virtue of the laws of the State of Washington, furnishes this Preliminary Official Statement in connection with the offering of $ * principal amount of Nueva Primavera Housing Revenue Bonds, 1998, dated 1, 1998. This Preliminary Official Statement provides information concerning the Authority and the Bonds. DESCRIPTION OF THE BONDS Authorization for Issuance The Board of Commissioners of the Authority authorized the issuance of the Bonds by Resolution No. , adopted on , 1998. Principal Amount, Dates, Interest Rates, and Maturities The Bonds will be issued in the principal amount of $ * and will be dated and bear interest from 1, 1998. The Bonds will mature on the dates and in the principal amounts and will bear interest (payable on 1, and semiannually thereafter on each succeeding 1 and 1) at the respective rates set forth on the cover page of the Official Statement. Registrar and Paying Agent Principal of the Bonds will be paid upon presentation and surrender of the Bonds, at maturity or early redemption, at the principal office of the Paying Agent, currently U.S. Bank Trust National Association, Seattle, Washington. Interest on the Bonds will be paid by check or draft of the Paying Agent mailed or, at the written request of the owner of $1,000,000 or more in principal amount of Bonds given to the Bond Registrar in accordance with the Indenture, by wire transfer, on the payment date to the registered owners at the addresses appearing on the Bond Register on the fifteenth day of the month preceding each interest payment date. Delivery of Bonds The expected date for delivery of the Bonds is , 1998. MANDATORY REDEMPTION The Term Bonds are subject to mandatory redemption at par plus accrued interest according to the schedule set forth in the Preliminary Official Statement. Preliminary; subject to change. 6 OPTIONAL REDEMPTION The Bonds maturing on or before 1, 2008 will not be subject to optional redemption prior to their scheduled maturity. The Bonds maturing on _ 1, 2018 and _1, 2028 will be subject to optional redemption in whole or in part by lot as selected by the Bond Registrar on any interest payment date on or after 1, 2008 at par plus accrued interest to the date of redemption. No optional redemption shall occur if amounts are owed to the City of Yakima under the Loan Agreement. EXTRAORDINARY REDEMPTION The Bonds shall be subject to redemption as a whole or in part at a redemption price equal to the principal amount thereof without premium plus accrued interest to the redemption date 1) if any property in the Project shall have been condemned or damaged or destroyed to the extent that, in the opinion of the Authority, repair could not be completed within six months, or the restoration and repair would not be economically practical or desirable, 2) if, and to the extent, necessary to preserve the tax-exempt status of interest paid on the Bonds, or 3) from any balance remaining in the Project Fund upon completion of the Project, or 4) upon notice from the City of Yakima of its election to cause extraordinary redemption if a loan has been made under the Loan Agreement and the City of Yakima deposits with the Trustee the amount necessary to redeem the Bonds. Form and Denomination The Bonds will be issued in fully registered form as to both principal and interest in denominations of $5,000 and integral multiples thereof within a single maturity. TRUSTEE The Authority has appointed U.S. Bank Trust National Association as Trustee. The Trustee is to carry out such duties as are assigned to it under the Indenture, which provides that the Trustee is undertaking no duties except in accordance with the terms of the Indenture. In entering into and negotiating the terms of the Indenture, the Trustee is not acting in any fiduciary capacity; the Trustee acts solely for itself and in its own interests rather than on behalf of the bondholders or prospective bondholders. After issuance of the Bonds, the Trustee acts pursuant to the specific terms of the Indenture. In doing so, the Trustee is a fiduciary only for the limited purposes of carrying out those responsibilities explicitly described in the Indenture. (See "SUMMARY OF PRINCIPAL DOCUMENTS" for a description of certain terms of the Indenture.) The Trustee does not at any time assume any other duties or become or agree to act as a general fiduciary with respect to the bondholders. Except for the contents of this paragraph, the Trustee has not reviewed or participated in the preparation of this Preliminary Official Statement and assumes no responsibility for the nature, contents, accuracy, or completeness of the information set forth in this Preliminary Official Statement or for the recitals contained in the Indenture or the Bonds, or for the validity, sufficiency, or legal effect of any of such documents. The Trustee has no oversight responsibility, and is not accountable, for the use or application by the Authority of any of the Bonds authenticated or delivered pursuant to the Indenture or for the use or application of the proceeds of such Bonds by the Authority. The Trustee has not evaluated the risks, benefits, or propriety of any investment in the Bonds and makes no representation and has reached no conclusions regarding the value or condition of any assets pledged or assigned as security for the Bonds, the technical or financial feasibility of the Project, or the investment quality of the Bonds, about all of which the Trustee expresses no opinion and expressly disclaims the expertise to evaluate. 7 SOURCES OF PAYMENT AND SECURITY FOR THE BONDS DEFINITIONS The following is a definition of terms used in the official statement. "Net Operating Income" means Project Revenues other than Investment Earnings, less Operation and Maintenance Costs. "Net Revenues" means Project Revenues less Operation and Maintenance Costs and Trustee fees and expenses, if any. "Operation and Maintenance Costs" means all necessary costs to the Authority of operating and maintaining the Project, including but not limited to administrative and general expenses, costs of insurance (including reasonable contributions for self-insurance reserves, if any), consulting and technical services and repairs and replacements (to the extent not properly classifiable as capital costs) and reasonable reserves therefor, but excluding depreciation (or reserves therefor), amortization of intangibles or other bookkeeping entries of a similar nature and debt service on the Bonds and any other obligations of the Authority relating to the Project. "Project" means, depending on the context (1) the construction by the Authority of the Nueva Primavera Apartments on real property legally described in Exhibit A to the Deed of Trust and located in the City of Yakima, Washington, which construction and the rental of at least 50% of the dwelling units of which to low-income persons was declared by the Resolution to be a housing project of the Authority, or (2) the Nueva Primavera Apartments. "Project Revenues" means all amounts due to or received by the Authority or by the Trustee for the account of the Authority pursuant or with respect to the Project, including without limitation all lease payments, Insurance Proceeds and Condemnation Awards and proceeds resulting from foreclosure of the Deed of Trust, and all Investment Earnings. "Required Debt Service" means the amount required to pay principal of and interest on the Bonds when due, including amounts required for the mandatory redemption of Bonds pursuant to Section 3.2(2). Priority of Payment Net Operating Income will be applied in the following manner: First, to pay scheduled principal and interest on the Bonds, including mandatory redemption, and to pay Trustee fees. Second, to pay, as required, any amounts needed to restore the balance in the Reserve Account. Third, to pay any Extraordinary Maintenance Expense as defined in the Indenture. Fourth, to make payments, if any, to the City of Yakima pursuant to the Loan Agreement. Fifth, to any other lawful purposes of the Authority. General Revenue Pledge The Authority has pledged all of its revenues that are not pledged to any other purpose ("General Revenues") as security for payment of the principal of and interest on the Bonds. However, nothing in the Bond Resolution or the Indenture prevents the Authority from pledging specific revenues, other than Project revenues, to a purpose other than payment of the Bonds at any time after the date of the Official Statement. 8 The City of Yakima Loan Agreement As of the date of Bond issuance, there will have been executed between the City of Yakima (the "City") and the Authority an agreement (the "Loan Agreement") whereby the City agrees to loan funds to the Authority, at the times and in the amounts as described below, to restore the Reserve Account to the Reserve Requirement as necessary or to pay debt service on the Bonds, as the same shall come due, if Authority funds are insufficient for this purpose. The City, upon execution of the Loan Agreement, irrevocably pledges its full faith, credit and resources for the payment of such amounts, if necessary. The City's obligation under the Loan Agreement is absolute and unconditional and will not be subject to diminution by setoff, counterclaim, abatement or otherwise. The obligations of the City under the Loan Agreement will terminate upon payment in full of the principal of and interest on all outstanding Bonds. Excerpts from the Loan Agreement are provided below. Loans to the Authority. Pursuant to the Loan Agreement, the City agrees to make advances to the Authority ("Loans") equal to the greater of 1) the amount sufficient, together with Net Revenues from the Project deposited with the Trustee, to replenish the Reserve Account to the Reserve Requirement for the Bonds or 2) the amount sufficient, together with Net Revenues from the Project and other money, including money in the Reserve Account, on deposit with the Trustee, to pay the principal of and interest on the Bonds when due. The Authority agrees to borrow the amounts described above from the City pursuant to the Loan Agreement for the purpose of meeting its obligations under the Bonds and the Indenture. The total amount of funds to be lent by the City pursuant to the Loan Agreement will not exceed the principal amount of the Bonds plus interest due and unpaid by the Authority. Time of Loans. Loans will be made at such times, if any, as the Authority is unable to replenish the Reserve Account to the Reserve Requirement for the Bonds or if the money available under the Indenture to the Trustee is insufficient to pay the principal of and interest on the Bonds when due. The Loans may be made in a series of principal advances. Loan Procedure. The Authority, or the Trustee on behalf of the Authority, will, within two business days of any withdrawals from the Reserve Account, deliver to the City a certificate stating the amount, if any, required to restore the Reserve Account to the Reserve Requirement. By of the following year, the City shall deliver to the Trustee for deposit in the Reserve Account the greater of one-half of the amount certified in such notice(s) or the amount necessary to make up any deficiency in the amount available to make the required debt service payment on the Bonds on of such year and shall deliver to the Trustee no later than of that year the greater of the balance of the amounts so specified or the amount necessary to make up any deficiency in the amount available to pay debt service on the Bonds on of such year. Repayment Terms. Loans will be repaid on terms established by the city at such times as funds are advanced. Such terms will require the repayment of the principal amount of Loans and interest thereon from the General Revenues of the Authority and from first available Net Revenues from the Project after payment of debt service on the Bonds. Deed of Trust As security for the Bonds, the Authority has irrevocably granted to the Trustee, as beneficiary under the Deed of Trust, a first lien security interest in the land and improvements which comprise the Project, along with the equipment, furniture, fixtures, and other articles of property therein owned by the Authority. Under the Deed of Trust the Authority covenants, among other things, to keep the Project free from liens senior to the Bonds and to maintain the properties in the Project in rentable and tenantable condition, to maintain property insurance coverage on the improvements comprising the Project and to take such other action as may be necessary to maintain the value of the properties. As beneficiary under the Deed of Trust, the Trustee has the 9 power, upon default by the Authority, to require the Authority to create an insurance reserve, to collect rents directly from tenants and to foreclose the Deed of Trust. A copy of the form of the Deed of Trust is available from the Trustee. Reserve Account Under the provisions of the Indenture, there is created a Reserve Account in an amount equal to $ (the "Reserve Requirement"). Should there be insufficient funds in the Principal and Interest Account created under the Indenture for the payment of debt service on the Bonds, the Trustee is instructed to take the necessary funds from the Reserve Account to make such debt service payments. Under the Loan Agreement with the City, the City will make Loans to the Authority to the extent necessary to replenish the Reserve Account if any withdrawals are made. SOURCES USES ESTIMATED SOURCES AND USES OF FUNDS Par Amount Less: Origmal Issue Discount Plus: Accrued Interest Total Sources $ Deposit to Project Fund Deposit to Reserve Account Accrued Interest Total Uses $ 10 PROJECTED DEBT SERVICE COVERAGE The following tables show the estimated annual debt service and debt service coverage of the Bonds. Table 1, "DEBT SERVICE REQUIREMENTS FOR THE BONDS," displays the expected debt service costs, including mandatory sinking fund payments, for the Bonds. It is based on estimated interest rates, and is subject to change. Table 2, "ESTIMATED DEBT SERVICE COVERAGE" contains the Authority's estimate of Project net operating income and the ratio of estimated Project net operating income to estimated net debt service on the Bonds. 11 TABLE 1 DEBT SERVICE REQUIREMENTS FOR THE BONDS1 Serial Bonds Term Bonds Year Ending Interest Interest Total Annual 1 Principal _/1 & _/1 Principal /1 & _/1 Debt Service 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 1 Estimated and subject to change. 12 TABLE 2 ESTIMATED DEBT SERVICE COVERAGE (a) (b) (c)=(a)-(b) (d)=(c)/(d) Estimated Operation and Net Debt Service Year Ending Project Maintenance Operating Net Debt Coverage for _ 1 Revenues Costs Income Servicel the Bonds2 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Assumptions • Annual increase in Project Revenues = % • Annual increase in Operation and Maintenance Costs = • Project is completed and fully leased by • Average interest rate on the Bonds is %. • The Reserve Account is invested at %. 1 Gross debt service minus interest on Reserve Account plus Trustee Fees. 2 Net Operating Income divided by Net Debt Service. 13 RISKS TO THE BONDHOLDERS In General Prospective purchasers of the Bonds should consider carefully all possible factors which may affect both the operations and revenues of the Project and consequently create the possibility that payment on the Bonds will not be made or that the Bonds will be redeemed prior to maturity or that interest on the Bonds might be taxable from their date of issuance. The Bonds may not be a suitable investment for all prospective purchasers. Prospective purchasers should consult their investment advisors before making any decisions as to the purchase of the Bonds. The following discussion, while not setting forth all the factors which must be considered, contains some of the factors which should be considered prior to purchasing the Bonds. Revenue Projections Although Net Operating Income generated by the Project is expected to be adequate to repay the Bonds, a number of factors could cause that not to be the case. For instance, Net Operating Income levels are based upon certain assumptions regarding current and future rent and occupancy levels. Various conditions could cause actual rent and occupancy levels to be less favorable than currently forecast by the Authority. For instance, if there is a significant downturn in the economy of the City of Yakima, rents might drop and vacancies might increase. If competing multi -family housing units are built close to any of the properties comprising the Project, the increased competition could also cause rents to be less than projected, and vacancies to be higher than projected. The Authority will be responsible, either directly or by contracting with another entity, for management of the Project. If adequate property management is not provided, revenues could be less than projected and expenses could be higher than projected, resulting in lower Net Operating Income than forecast levels. Prospective purchasers of the Bonds should understand that it is the Authority's intention and expectation that the Bonds will be repaid from Net Operating Income of the Project. As a basis for this, the Authority is making its best estimate of future rent, occupancy, and expense levels. Although the Authority believes that the assumptions made are prudent and reasonable, factors such as, but not limited to, those described above could cause these assumptions to be incorrect. Hence, future revenues from the Project may vary from these forecasts, and could vary materially. Obligation of the City of Yakima The process by which the City makes loans to the Authority, as described herein under the heading "SOURCES OF PAYMENT AND SECURITY FOR THE BONDS - City of Yakima Loan Agreement", is contingent upon the Authority's failure to maintain the Reserve Account at the Reserve Requirement and, therefore, the Bonds are not a debt of the City. The City has not pledged its full faith and credit to the payment of the Bonds and its only obligation relating to the Bonds is to make Loans to the Authority in accordance with the Loan Agreement. Although the City's obligation to advance funds to the Authority is contingent upon the occurrence of a shortfall in the Reserve Account, the Loan Agreement provides that the City's obligation to make Loans when necessary is "absolute and unconditional, and will not be subject to diminution by setoff, counterclaim, abatement or otherwise." The full faith, credit and resources of the City have been pledged to its obligations under the Loan Agreement. Loans to the Authority pursuant to the Loan Agreement may be made from any resources of the City legally available therefor, including the issuance of limited tax general obligation debt within the statutory limitation as provided by law applicable to non -voted general obligations and certain restrictions with regard to the City's regular tax levy. (See the section entitled "COMPUTATION OF LIMITATION OF INDEBTEDNESS" IN APPENDIX B ) There is no guarantee that such funds or resources will be available from the City, if necessary, or that the City will have any non -voted general obligation 14 debt capacity available for that purpose, if necessary, and the City is not setting aside or segregating any funds or debt capacity in anticipation of such purpose. Additional information about the City may be found in Appendix B. Other Risk Factors Potential purchasers should also consider the following factors prior to purchasing the Bonds: 1. Special Obligations. The Bonds are special obligations of the Authority, payable solely from available resources of the Authority. UNDER THE CIRCUMSTANCES AND AT THE TIMES EXPRESSLY AGREED TO BY THE CITY OF YAKIMA IN THE LOAN AGREEMENT, THE CITY HAS OBLIGATED ITSELF TO LOAN MONIES TO THE AUTHORITY FOR THE PURPOSES OF REPLENISHING THE RESERVE ACCOUNT AND PAYING PRINCIPAL OF AND INTEREST ON THE BONDS. THE BONDS DO NOT CONSTITUTE A DEBT OF THE CITY OF YAKIMA, THE STATE OF WASHINGTON OR ANY POLITICAL SUBDIVISION THEREOF. EXCEPT AS SPECIFIED ABOVE, NEITHER THE CITY OF YAKIMA NOR THE STATE OF WASHINGTON NOR ANY POLITICAL SUBDIVISION THEREOF (EXCEPT THE AUTHORITY AS SET FORTH IN THE INDENTURE) SHALL BE LIABLE FOR PAYMENT OF THE BONDS. NOR IN ANY EVENT SHALL THE PRINCIPAL OF, OR INTEREST ON THE BONDS BE PAYABLE OUT OF ANY FUNDS OR ASSETS OTHER THAN THOSE PLEDGED TO THAT PURPOSE BY THE AUTHORITY IN THE INDENTURE AND THE BOND RESOLUTION. THE AUTHORITY HAS NO TAXING POWER. 2. Federal Housing Programs. The willingness of the U. S. Government to subsidize low- income housing has varied since the adoption of the Housing Act of 1937 and there is no assurance that such rent subsidies will be provided in the future. Congress can adversely affect housing authority revenues in other ways, including but not limited to, failing to create further programs administered by housing authorities and permitting existing programs to expire; decreasing the administrative fee for the administration of the Section 8 Certificate and Voucher Programs; and directing federal resources through other channels. Activities of local housing authorities are closely monitored and regulated by the United State Department of Housing and Urban Development ("HUD"). Regulation can take the form of limitations in spending or compulsory spending in areas that could adversely affect the General Revenues available to the Bondholders. HUD is required to review housing authorities' budgets to the extent of federal involvement. The State Auditor's Office and HUD regularly audit local housing authorities and can compel the repayment to the United States of funds that have been found to be improperly spent. Such required reimbursement can be withheld from operating subsides, thereby depriving housing authorities of resources. 3. Effects on Exemption of Interest from Federal Income Taxes. The exemption of interest on the Bonds from Federal income taxes is dependent on continuing compliance by the Authority with the requirements of the Internal Revenue Code. 4. Secondary Market and Prices. It has been the practice of the Underwriter to maintain a secondary market in municipal securities which it sells. The Underwriter presently intends to engage in secondary market trading of the Bonds, subject to applicable securities laws. The Underwriter, however, is not obligated to engage in secondary trading or to repurchase any of the Bonds at the request of the owners thereof. No assurance can be given that a secondary market for the Bonds will be available and no assurance can be given that the initial offering prices for the Bonds will continue for any period of time. 5. Loss of Premium From Early Redemption. Any person who purchases a Bond at a price in excess of its principal amount should consider the fact that the Bonds are subject to 15 redemption at a redemption price equal to the principal amount of such Bond plus accrued interest under certain circumstances as described in more detail under the headings "Mandatory Redemption," "Optional Redemption" and "Extraordinary Redemption." 6. Enforceability of Remedies. The remedies available to the Bondholders are in many respects dependent upon regulatory and judicial actions which are often subject to discretion and delay. Under existing law and judicial decisions, the remedies provided for may not be readily available or may be limited. The bond opinion to be delivered concurrently with the initial delivery of the Bonds by Bond Counsel is qualified as to enforceability of the various legal instruments by limitations imposed by bankruptcy, reorganization, insolvency, or other similar laws affecting the rights of creditors generally, and by equitable remedies and proceedings generally. 7. State Foreclosure Laws. Foreclosure laws permit a secured party to foreclose upon mortgaged property such as the property in the Project. Although the Bondholders have a security interest in the Project, legal procedures connected with the exercise of remedies available may cause delays in the collection of funds available for payment of debt service on the Bonds. There can be no assurance that amounts realized from the foreclosure of the Project will be sufficient to pay the debt service on the Bonds. Potential purchasers of Bonds should consult legal counsel or otherwise familiarize themselves with the relevant Washington laws. 8. Environmental Matters. Under the federal Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") and under comparable Washington law, a secured party which takes a deed in lieu of foreclosure, purchases a mortgaged property at a foreclosure sale or operates a mortgaged property may become liable in certain circumstances for the cost of remedial action ("Remedial Action Costs") if hazardous waste or hazardous substances have been released or disposed of on the property. Such Remedial Action Costs could subject the Project to a lien and reduce or eliminate the amounts otherwise available to pay the holders of the Bonds if such Remedial Action Costs were incurred. See "THE PROJECT" herein for a discussion of the hazardous substance inspections which have been conducted on the properties subject to the Deed of Trust. 9. Conflicts. Some or all of the fees of the Underwriter, the Trustee and Bond Counsel are contingent upon the sale of the Bonds. Furthermore, from time to time Bond Counsel may serve as counsel to the Underwriter and to other parties involved with the Bonds with respect to transactions other than the issuance of bonds of the Authority. None of the Commissioners or other officers of the Authority have interest in the issuance of the Bonds that are prohibited by applicable law. The list above is not, and is not intended to be, all inclusive. 16 THE PROJECT Project Description The Nueva Primavera Apartments consist of 38 units of rent restricted apartments, a single family residence and 16 public housing units, for a total of 55 units. The 16 public housing units are in the process of being legally segregated from the remainder of the site via a lot line adjustment. The Project is the 38 apartment units, the adjoining single family residence and a 3,600 square foot office building adjacent to the apartment units, which will be occupied by the Authority. The Project is located at 810 North 6th Avenue and 1118 Fruitvale Boulevard in Yakima, Washington. The location is north and west of the downtown area of Yakima, west of the main railroad tracks that bisect the city. The majority of the downtown core, including the retail district (anchored by the Yakima Mall shopping center) and the City Hall and County Courthouse buildings, is located on the east side of the tracks. The subject property is located Y2 block south and one block west of the southwest corner of the intersection of N. 6`" Ave. and Fruitvale Boulevard. Fruitvale Blvd contains a mix of automotive and service related businesses catering to travelers. Fruitvale also contains a heavy commercial and light industrial component and effectively is the northern terminus of the downtown commercial district on the west side of the railroad tracks. Land use patterns in the subject neighborhood are primarily commercial along the arterials, with a mix of residential uses located off the arterial streets. The Project includes improvements to an existing 1,275 square foot single family home and construction of a single story 3,600 square foot office building along the N. 6`'' Ave. frontage and 38 apartment units located to the west and south. The apartment units will be located in two- story, townhouse style, wood frame, walk-up buildings containing a total of 38 units in 7 buildings. All units will be the same and will consist of 3 BR/1.5 BA townhouse units of 1,069 square feet. Each unit will include a deck or patio and an exterior accessed lockable storage closet off the deck/patio. The single family residence was built in 1924 and is a 3 BR/1BA home with a detached 2 -car garage of 756 SF. The house also has a full, partially finished basement. The total rentable area of the Project is estimated to be 41,897 square feet. Recreational amenities are limited to two children's play areas. Subordinate Financing As of the date of Bond issuance, the Authority will have obtained $1,000,000 in additional long term financing for the Project from the Washington State Housing Trust Fund. This financing has an interest rate of 1.00% p.a. and a final maturity in 2049. No payment is due on this loan until November 30, 2004. From that date through November 30, 2013, the Authority will pay $10,000 per year, from November 30, 2014 through November 30, 2023 the payment will be $15,000 per year, and from November 30, 2024 through November 30, 2033 the payment will be $20,000 per year. Thereafter the annual payment will be $51,682 due and payable beginning on the last day of the eleventh month after the Bonds have been fully repaid. The Housing Trust fund loan will be subordinated to the Bonds on a cashflow basis. No advance will be made under the Loan Agreement to fund payments on the Housing Trust Fund loan and the Deed of Trust will not be foreclosed in the absence of an Event of Default under the Indenture, notwithstanding any event of default with respect to the Housing Trust Fund loan. Project Appraisal The Authority engaged the firm of Palmer, Groth & Pietka, Inc. to appraise the Nueva Primavera Apartments. In its appraisal dated November 18, 1997, Palmer, Groth & Pietka estimated that the prospective stabilized property value for the Project, taking into account the rent restrictions and favorable financing, was $3,800,000. Prospective purchasers of the Bonds should note that, although the above estimate is from professional appraisers, it represents only the judgment of those appraisers based on information available to them. There is no guarantee that the project could be sold for this amount, if required, and no such representation is made. 17 TABLE 3 YAKIMA HOUSING AUTHORITY HOUSING REVENUE BONDS, 1998 (NUEVA PRIMAVERA PROJECT) PROJECT INCOME AND EXPENSE ESTIMATE 1 Estimated Rental Income Revenue & Expense2 Average Average No. Type Size (sq. ft2) Rent 38 3 Bed/1.5 Bath 1,069 $ 588 $ 268,344 1 4 Bed/ 1,275 810 9,720 Potential Rental Income $ 278,064 Other Project Income $ 40,000 Less: Rental Unit Vacancy, bad debt and concessions @ 5% (13,417) Effective Gross Income $ 304,647 Less Expenses: Administrative salaries and misc. expenses Maintenance & repair Utilities Insurance and taxes Miscellaneous Replacement reserves Total Operation and Maintenance Costs Net Operating Income Net Debt Service $ 37,130 26,000 21,500 2,650 2,000 7,800 $ 97,080 $ 207,567 $ 170,0003 Estimated Debt Service Coverage 1.22x Excess Cashflow $ 37,567 1 Figures provided by the Authority, and have not been independently verified by the Underwriter. 2 For the first twelve months of stabilized operation. 3 Estimated net debt service based on average Bond yield of 5.58%. 18 THE AUTHORITY The Housing Authority of the City of Yakima is a public corporation created by resolution of the Yakima City Council and derives its powers from Washington State Law (RCW 35.82). The Authority is not a department of the City of Yakima, but works closely with the Office of Housing and Neighborhood Conservation in carrying out the City of Yakima's Comprehensive Housing Assistance Strategy. The Authority has contractual relationships with the U.S. Department of Housing and Urban Development (HUD) to provide low rent public housing and Section 8 assistance payments. A similar contractual agreement is with the Rural Economic and Community Development (RECD) to provide financing for development and rental assistance for agricultural worker family housing. The Authority was formed on May 21, 1978 to provide housing to low income residents of the City of Yakima. The Authority owns and manages 150 units of low income public housing and 147 units of farm worker housing. Through intergovernmental agreements with upper Yakima Valley communities, the area served by the Authority has expanded and the 297 units are located on 42 sites from Granger, 20 miles southeast of Yakima, to Tieton, 15 miles northwest. The Authority also provides Section 8 rental assistance to about 500 households in the upper Yakima Valley. In total the Authority provides housing for approximately 800 families (3,200 people) in the Yakima Valley, many of whom derive their income from the local agriculture industry. In addition to providing low income and farm worker housing, the Authority administers the Comprehensive Improvement Assistance Program (CIAP) and HUD's Youthbuild Program. The City of Yakima appoints the five members of the Authority's Board, which serve five-year terms. The Board appoints the Authority's director. Currently the Authority employs a staff of 31, including 13 in administration and operation and 18 in maintenance. The Authority's administrative office is located at 412 South 3rd Street. The current members of the Board are as follows: Name Position Term Expires Occupation Francis Badu Barry G. Laws Brian V. Johnson Jean Allen Michael Delgado Francis Badu, Commissioner A resident of Yakima for over nine years, he has been active in several community projects during that time. He has served as a loan executive for the United Way, in a member and former treasurer of the Apple Valley Kiwanis Club and is a graduate of the Leadership Yakima class of 1996. Currently Mr. Badu works as an accountant for Snokist Growers. Barry G. Laws, Commissioner Mr. Laws is a Commercial Loan Officer of Home Security Bank in Yakima. His prior experience includes loan officer and other positions at banks and private businesses. He has completed banking and financial analysis training and is a graduate of Western Agricultural Credit School of Washington State University. Examples of his civic and community service include Heart Fund Treasurer, United Way Allocations Committee, Kiwanis Club Kiwanian of the Year and Leadership Yakima Class. Michael L. Delgado, Commissioner Mr. Delgado is the Clinic Administrator at the Yakima Valley Farmworkers Clinic, and has served in other positions there and at other community health centers. He received a B.A. in health services administration from Eastern Washington University. He has been active in community programs such as the American Cancer Society, Ambu-Qual and SAFE Steering Committee. 19 Brian V. Johnson, Commissioner Mr. Johnson is an Assistant Vice President in business banking with U.S. Bank. He has held positions as loan and credit officer with financial institutions in eastern Washington. Mr. Johnson has an Associate of Science degree in computer science. He is a graduate of a Leadership Yakima class and has been active in the United Way, the Chamber of Commerce committees, Boy Scout leadership and other church and community activities. Jean Allen, Chairman Mr. Allen has had 22 years of experience with Pacific, Gamble and Robertson, Inc. as a manager and vegetable broker. He has a B.A. in Business Administration from Washington State University, and is a member of the Yakima Rotary. Mr. Allen has been named coach of the year for the Catholic Youth Organization. The Administrative staff of the Authority is as follows: Alice Sells, Executive Director Ms. Sells served as Interim Director for the Authority between July 1995 and , when she was appointed Executive Director. Prior to that time, she served as Assistant Director to the Authority and during her 15 years with the Authority has served in progressively more responsible positions. Ms. Sells is certified in HUD Program Training for Public Housing and Section 8 and has received Public Housing Manager Certification from NAHRO. She is a member of Pacific Northwest Regional Chapter of NAHRO and the National Association of Housing & Development Officials. [Resumes of the Staff Members] FINANCIAL INFORMATION Financial Statements. The most recent audited Compiled Financial Statement of the Authority covers the period from April 1, 1996 to March 31, 1997. Selected excerpts from this financial statement are attached hereto as Appendix A. Auditing of Housing Authority Finances. The State Auditor is required to examine the affairs of housing authorities. The examination must include, among other things, the financial condition and resources of the authority, whether the laws and constitution of the State are being complied with, and the methods and accuracy of the accounts and reports of the housing authority. Reports of the auditor's examinations are required to be filed in the office of the State auditor and in the auditing department of the housing authority. Outstanding Debt of the Authority. The outstanding debt of the Authority is outlined in its Financial Statements attached as Appendix A to this Official Statement. The Authority has always promptly met principal and interest payments on all debts when due. No refunding bonds have been issued for the purpose of preventing an impending default. 20 SUMMARY OF PRINCIPAL DOCUMENTS The following is a summary of certain provisions of the Indenture and the Deed of Trust and is qualified in its entirety by reference to those documents. For a description of certain other provisions of the Indenture relating to the Bonds, see the captions "DESCRIPTION OF THE BONDS" and "SOURCES OF PAYMENT AND SECURITY FOR THE BONDS." Copies of the Indenture and the Deed of Trust are available from the Trustee at the following address: The Indenture Creation of Fund and Accounts. The Indenture directs the Trustee to create two separate funds in connection with the Bonds: 1) the Bond Fund, consisting of the Principal and Interest Account and the Reserve Account and 2) the Project Fund. All net Bond proceeds, except the money deposited in the Reserve Account and the accrued interest deposited in the Principal and Interest Account, will be deposited in the Project Fund and used to pay for acquiring the Projects and costs of issuing the Bonds. From Net Operating Income of the Project and, if necessary, other available Authority funds, the Authority will deliver to the Trustee for deposit into the Bond Fund amounts required to pay regularly scheduled debt service on the Bonds and, if necessary, to restore the balance in the Reserve Account. The Trustee will use money in the Principal and Interest Account in the Bond Fund at the times and in the amounts necessary to make payments of principal of and interest on the Bonds when due. Money in the Reserve Account will be used to pay debt service on the Bonds if there is insufficient money in the Principal and Interest Account to make such payments. Under the Loan Agreement, the City will make Loans to the Authority if, and to the extent, necessary to replenish the Reserve Account after any such withdrawals. Authority Covenants The Authority has covenanted: 1. In General: that it will comply with the terms of the Indenture and of the Bonds; 2. Condemnation Awards and Insurance Proceeds: that it will maintain insurance on the Project as required by the Deed of Trust. If the Authority receives insurance proceeds or a condemnation award with respect to the Project, it will use such proceeds or award either to restore the Project or to redeem the Bonds as described in the Indenture; 3. No Extension of Maturity: that it will not directly or indirectly extend the maturity of any Bond without the consent of the owners of all outstanding Bonds; 4. No Other Liens: that it will not issue any other obligations, the payment of which is secured by a lien senior to the Bonds; 5. Tax Exempt Status of the Bonds: that it will use the proceeds of the Bonds in the manner, and will take other actions, if any, necessary to retain the exclusion of interest on the Bonds from gross income for federal income tax purposes, and that it will comply with the arbitrage rebate requirements of Section 148 of the Code; and 6. Loan Agreement: that it will not terminate the Loan Agreement with the City of Yakima at any time that the Bonds are Outstanding and that it will exercise its rights under the Loan Agreement. 22 Events of Default The following constitute events of default under the Indenture: 1. Failure to pay principal of or interest on the Bonds when due; 2. Continued failure to comply with any covenant beyond a cure period of 60 days after notice of the default has been given to the Authority by the Trustee, or to the Authority and the Trustee by the owners of at least 25% in aggregate principal amount of Bonds outstanding. Acceleration If an Event of Default occurs (other than a covenant default as described in item 2 above), then the Trustee or the owners of a majority in aggregate principal amount of the Bonds then outstanding can, upon written notice to the Trustee and the Authority, declare the principal of and accrued interest on all Bonds then outstanding to be immediately due and payable. Other Remedies The Trustee may, in its discretion, or will, at the written direction of the owners of a majority in aggregate principal amount of Bonds then outstanding, if those owners have provided the Trustee with indemnity against its anticipated expenses and liability, take any other action legally available to it, including foreclosure of the Deed of Trust or the exercise of other rights thereunder. No individual Bondowner may take any action with respect to the Bonds unless the Trustee has failed to act after notice and offer of indemnity as described above, but the owners of a majority in aggregate principal amount of the Bonds may together take any such action. The Trustee The Trustee under the Indenture is initially U.S. Bank Trust National Association. The Trustee may resign upon 90 days' written notice, and may be removed by the Authority at any time if there is no then continuing Event of Default, or at the written request of the owners of a majority in aggregate principal amount of Bonds, at any time. The Authority will cause notice of the appointment of any successor Trustee after the resignation or removal of the current Trustee to be given to the owners of all outstanding Bonds. Defeasance The Authority has reserved the right to defease any or all of the Bonds by setting aside in a trust account money and/or direct government obligations sufficient in amount to pay the principal of and premium, if any, and interest on the Bonds in accordance with the defeasance plan. After any such defeasance, the owners of the defeased Bonds will have no further rights under the Indenture, except the right to receive payment of principal of and interest on their Bonds from the trust account. Amendments to Indenture The Authority and the Trustee may amend or supplement the Indenture without the consent of or prior notice to the owners of the Bonds for the following purposes: 1. To cure any formal defect, omission, inconsistency or ambiguity in a manner that is not adverse to the owner of any Bonds; 2. To impose additional duties or confer additional powers on the Trustee that are not inconsistent with the Indenture as then in effect; 3. To impose additional restrictions upon or add to the covenants of the Authority that are not inconsistent with the Indenture as then in effect; 4. To confirm any pledge under or lien created by the Indenture; 5. To prevent the occurrence of a Determination of Taxability; 23 6. To authorize changes in the denominations or exchangeability of Bonds and similar technical changes; 7. To make changes necessary to provide for the issuance of additional bonds; 8. To make changes necessary to maintain the rating on the Bonds; 9. To provide for the issuance of the Bonds in book entry only form; and 10. To make other changes not materially adverse to the owners of any Bonds. The Authority and the Trustee can amend or supplement the Indenture in any other manner with the consent of the owners of a majority in aggregate principal amount of Bonds then outstanding, except that the following changes may be made only with the consent of the owners of all of the Bonds then outstanding: 1. A change in the times, amounts or currency of payment of, principal of, interest on or redemption price of any Bond or in the method of redeeming any Bond; 2. A change creating a preference or priority of any Bond over any other Bond; 3. A reduction in the aggregate principal amount of Bonds, the owners of which are required to amend or supplement the Indenture; 4. The modification of any other provisions relating to the amendment or supplementing of the Indenture; or 5. The creation of any lien ranking prior to the lien of the Bonds. Any supplement to or amendment of the Indenture in accordance with the above procedures will be binding on all then and future owners of the Bonds. Deed of Trust The Deed of Trust provides additional security for payment of the Bonds. The Deed of Trust conveys to the Trustee an interest in the land, improvements and fixtures comprising the Project and also creates a security interest in equipment, furniture and other personal property owned by the Authority and located at the properties comprising the Project. Under the Deed of Trust, the Authority covenants to keep the Project free from liens and to maintain it in rentable and tenantable condition, to maintain property insurance coverage on the Project and to take such other action as may be necessary to maintain the value of the property. As beneficiary under the Deed of Trust, the Trustee has the power, upon certain events of default by the Authority as defined in the Indenture to require the Authority to create an insurance reserve, to collect rents directly from tenants and to foreclose the Deed of Trust. LITIGATION There is no controversy or litigation of any nature now pending or threatened against the Authority restraining or enjoining any of the transactions of the Authority related to the Bonds or the Project or which, if determined adversely to the Authority, would have a material, adverse effect on the Authority, its financial condition, the validity of the Bond Resolution or the Indenture or the ability of the Authority to perform its obligations under the Bond Resolution or the Indenture, including its ability to pay the debt service on the Bonds. 24 LEGAL OPINION Legal matters incident to the authorization, issuance and sale of the Bonds by the Authority are subject to the approving legal opinion of Foster Pepper & Shefelman PLLC, Seattle, Washington, Bond Counsel. A copy of the opinion of Bond Counsel will be printed on the Bonds. Bond Counsel expresses no opinion on the completeness or accuracy of any Preliminary Official Statement, offering circular or other sales or disclosure material relating to the Bonds. CONFLICTS OF INTEREST Some or all of the fees of the underwriter, Bond Counsel and financial advisor are contingent upon the issuance and sale of the Bonds. Furthermore, Bond Counsel from time to time serves as counsel to the Underwriter with respect to issuers other than the Authority and transactions other than the issuance of the Bonds. None of the Commissioners or other officers of the Authority have interests in the issuance of the Bonds that are prohibited by applicable law. TAX EXEMPTION In the opinion of Bond Counsel, assuming compliance by the Authority with applicable requirements of the Internal Revenue Code of 1986, as amended (the "Code"), including arbitrage and arbitrage rebate requirements under Section 148 of the Code, interest on the Bonds is excluded from gross income of registered owners for federal income tax purposes under existing federal law and is not an item of tax preference for purposes of the alternative minimum tax applicable to individuals. Corporate Alternative Minimum Tax While interest on the Bonds also is not an item of tax preference for purposes of the alternative minimum tax applicable to corporations, under Section 55 of the Code, tax-exempt interest, including interest on the Bonds, received by corporations is taken into account in the computation of adjusted current earnings for purposes of the alternative minimum tax applicable to corporations (as defined for federal income tax purposes). Under the Code, alternative minimum taxable income of a corporation will be increased by 75 percent of the excess of the corporation's adjusted current earnings (including any tax-exempt interest) over the corporation's alternative minimum taxable income determined without regard to such increase. A corporation's alternative minimum taxable income, so computed, that is in excess of an exemption of $40,000, which exemption will be reduced (but not below zero) by 25 percent of the amount by which the corporation's alternative minimum taxable income exceeds $150,000, is then subject to a 20 percent minimum tax. Corporate Environmental Tax Section 59A of the Code imposes, for tax years beginning before January 1, 1996, an environmental tax of 0.12 percent ($1.20 per $1,000) on the amount of a corporation's alternative minimum taxable income (increased for certain book income and adjusted current earnings, including any tax-exempt interest, as described in the preceding paragraph) that exceeds $2,000,000. Tax on Certain Passive Investment Income of S Corporations Under Section 1375 of the Code, certain excess net passive investment income, including interest on the Bonds, received by an S Corporation (a corporation treated as a partnership for most federal tax purposes) that has Subchapter C earnings and profits at the close of the taxable year may be subject to federal income taxation at the highest rate applicable to corporations if more than 25% of the gross receipts of such S corporation is passive investment income. 25 Foreign Branch Profits Tax Interest on the Bonds may be subject to the foreign branch profits tax imposed by Section 884 of the Code when the Bonds are owned by, and effectively connected with a trade or business of, a United States branch of a foreign corporation. CERTAIN OTHER FEDERAL TAX CONSEQUENCES Bonds are "Qualified Tax -Exempt Obligations" for Financial Institutions Section 265 of the Code provides that 100 percent of any interest expense incurred by banks and other financial institutions for interest allocable to tax-exempt obligations acquired after August 7, 1986, will be disallowed as a tax deduction. However, if the tax-exempt obligations are obligations other than private activity bonds, are issued by a governmental unit that, together with all entities subordinate to it, reasonably anticipates issuing less than $10,000,000 of tax- exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) in the current calendar year, and are designated by the governmental unit as "qualified tax-exempt obligations," then only 20 percent of any interest expense deduction allocable to those obligations will be disallowed. The Authority is a governmental unit that, together with all subordinate entities, reasonably anticipates issuing less than $10,000,000 of tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) during the current calendar year. The Authority has designated the Bonds as "qualified tax-exempt obligations" for purposes of the 80 percent financial institutions interest expense deduction. Therefore, 80% of the interest expense of a financial institution allocable to the Bonds is deductible for federal income tax purposes. Reduction of Loss Reserve Deductions for Property and Casualty Insurance Companies Under Section 832 of the Code, interest on the Bonds received by property and casualty insurance companies will reduce tax deductions for loss reserves otherwise available to such companies by an amount equal to 15 percent of tax-exempt interest received during the taxable year. Effect of Certain Social Security and Retirement Benefits Section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take receipts or accruals of interest on the Bonds into account in determining gross income. Other Possible Federal Tax Consequences Receipt of interest on the Bonds may have other federal tax consequences as to which prospective purchasers of the Bonds may wish to consult their own tax advisors. Preliminary Official Statement Certificate At the time of delivery of the Bonds, one or more Preliminary Officials of the Authority will furnish a Certificate stating that to the best of his, her or their knowledge, this Preliminary Official Statement, as of its date and as of the date of delivery of the Bonds, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained herein, in light of the circumstances under which they were made, not misleading. The Yakima Housing Authority has authorized the delivery of this Preliminary Official Statement. 26 CONTINUING DISCLOSURE Basic Undertaking to Provide Annual Financial Information and Notice of Material Events To meet the requirements of United States Securities and Exchange Commission ("SEC") Rule 15c2 -12(b)(5) (the "Rule"), as applicable to a participating underwriter for the Bonds, the Authority will undertake (the "Undertaking") for the benefit of holders of the Bonds to provide or cause to be provided, either directly or through a designated agent, to each nationally recognized municipal securities information repository ("NRMSIR") designed by the SEC in accordance with the Rule and to a state information depository, if any (the "SID"), established in the state of Washington, annual financial information and operating data of the type included in this Preliminary Official Statement as generally described below ("annual financial information"); and to each NRMSIR or the Municipal Securities Rulemaking Board ("MSRB"), and to the SID, timely notice of the occurrence of any of the following events with respect to the Bonds, if material: (i) principal and interest payment delinquencies; (ii) non-payment related defaults; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions or events affecting the tax-exempt status of the Bonds; (vii) modifications to rights to holders of the Bonds; (viii) Bond calls (other than scheduled mandatory redemptions of Term Bonds); (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Bonds; and (xi) rating changes. The Authority also will provide to each NRMSIR or to the MSRB, and to the SID, timely notice of a failure by the Authority to provide required annual financial information on or before the date specified below. Type of Annual Financial Information Undertaken to be Provided The annual financial information that the Authority undertakes to provide will consist of (i) an operating statement for the Project for the prior fiscal year showing Project Revenues, Project Operating and Maintenance Costs, Project Net Operating Income; (ii) the occupancy levels of the Project; and (iii) the annual financial statements of the Authority; will be prepared in accordance with applicable generally accepted accounting principles promulgated by the Government Accounting Standards Board ("GASB"), as such principles may be changed from time to time by GASB or its successor; will not be audited, except that if and when audited financial statements are otherwise prepared and available to the Authority they will be provided; and will be provided to each NRMSIR and the SID, not later than the last day of the ninth month after the end of each fiscal year of the Authority (currently, a fiscal year ending March 31, as such fiscal year may be changed as required or permitted by State law, commencing with the Authority's fiscal year ending March 31, 1999. The annual financial information may be provided in a single or multiple documents, and may be incorporated by reference to other documents that have been filed with each NRMSIR and the SID, or, if the document incorporated by reference is a "final Preliminary Official statement" with respect to other obligations of the Authority, that has been filed with the MSRB. Amendment of Undertaking The Undertaking is subject to amendment after the primary offering of the Bonds without the consent of any holder of any Bond, or of any broker, dealer, municipal securities dealer, participating underwriter, rating agency, NRMSIR, the SID or the MSRB, under the circumstances and in the manner permitted by Rule. The Authority will give notice to each NRMSIR or the MSRB, and the SID, of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of the reasons for the amendment. If the amendment changes the type of annual financial information to be provided, the notice also will include a narrative explanation of the effect of that change on the type of information to be provided. 27 Termination of Undertaking The Authority's obligations under the Undertaking shall terminate upon the legal defeasance of all of the Bonds. In addition, the Authority's obligations under the Undertaking shall terminate if those provision of the Rule which require the Authority to comply with the 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 Authority, and the Authority provided timely notice of such termination to each NRMSIR or the MSRB and the SID. The City of Yakima's Obligation The City is an obligated person for the purposes of the Rule, and will provide annual financial information, and audited financial reports, when available, to each NRMSIR and the SID, not later than the last day of the ninth month after the end of each fiscal year of the City (currently, December 31) beginning with the year ending December 31, 1998. Remedy for Failure to Comply with Undertaking If the Authority or any other obligated person fails to comply with the Undertaking, the Authority will proceed with due diligence to cause such noncompliance to be corrected as soon as practicable after the Authority learns of that failure. No failure by the Authority or other obligated person to comply with the Undertaking will constitute a default in respect of the Bonds. The sole remedy of any holder of a Bond will be to take such actions as that holder deems necessary, including seeking an order of specific performance from an appropriate court, to compel the Authority or other obligated person to comply with the Undertaking. BOND RATING The Authority has applied for a rating from Moody's Investors Service on the Bonds. A municipal bond rating reflects a rating agency's current assessment of a number of factors relating to the issuer of any debt, including the likelihood of repayment of such debt, the perceived quality of management and administration of the entity, the nature and relative health of the local economy in which the issuer exists and the overall financial condition and operational controls which exist for the issuer. The existence of a bond rating does not imply a recommendation by a rating agency to purchase, sell or hold any such security, inasmuch as it does not take into account a number of subjective variables, including the market price of any such security or suitability of such security for any particular investor. A credit rating is based on current information furnished by the issuer or obtained by a rating agency from sources which it considers to be reliable. Moody's Investors Service does not perform an audit in connection with any credit rating it may assign and may, on occasion, rely on unaudited financial information. A bond rating may be changed, suspended or withdrawn as a result of changes in, or unavailability of, such information, or for other circumstances. UNDERWRITING AGREEMENT The Bonds are being purchased by BancAmerica Robertson Stephens acting as the Underwriter. The purchase contract provides that the Underwriter will purchase all of the Bonds, if any are purchased, at a price aggregating % of the par value of the Bonds, plus accrued interest. The Bonds will be reoffered at plus accrued interest resulting in an underwriting spread of %. After the initial public offering, the public offering prices may be varied from time to time. 28 CONCLUDING STATEMENT All estimates, assumptions, statistical information and other statements contained herein, while taken from sources considered reliable, are not guaranteed by the Authority or the Underwriter. So far as any statement herein includes matters of opinion, or estimates of future expenses and income, whether or not expressly so stated, they are intended merely as such and not as representations of fact. The information contained herein should not be construed as representing all conditions affecting the Authority or the Bonds. Additional information may be obtained directly from the Authority or the Underwriter. The foregoing statements relating to the Indenture and other documents are in all respects subject to and qualified in their entirety by provisions of such documents. This Preliminary Official Statement, starting with the cover page and all subsequent pages, including the appendices, comprise the entire Preliminary Official Statement, which has been approved by the Authority. The Authority has represented to the Underwriter that the portions of this Preliminary Official Statement directly pertaining to the Authority and the Project neither contain any misrepresentation of material fact nor omit any material fact necessary to understand the information presented herein. 29 Nueva Primavera Project Status Report November 23,1998 NUEVA PRIMAVERA PROJECT STATUS SUMMARY November 23,1998 Nueva Primavera is a fifty-four (54) unit new construction project being developed by the Yakima Housing Authority. It consists of sixteen two-bedroom units and thirty-eight three-bedroom units. An existing four-bedroom home is also part of the project. Minor renovation of it has already been completed. Financing is being provided by a bond issue underwritten by Seafirst Bank, with support from the City of Yakima; a loan from the Washington Housing Trust Fund; a grant from the Federal Home Loan Bank through Pioneer Bank; and funding from the U.S. Department of Housing and Urban Development. The final parcel of property was purchased by the Yakima Housing Authority on July 20, 1998. The bond issue financing was closed on October 7,1998, Through a competitive bidding process Cargile Construction Group, Inc. from Spokane, Washington was awarded the general construction contract on August 26,1998. Cargile was given notice to proceed on October 5, 1998. Completion is projected for August 9, 1999. A list of the subcontractors is attached. Don Poston from Group M Architecture, Inc. is the project architect. The construction contract totals $2,932,920: 5623,168 for the sixteen (16) HUD -funded units and 52,309,752 for the thirty-eight (38) non - HUD units and office space. As of the date of this report construction is 16% complete and is on schedule. A copy of Cargile's construction schedule follows as do photographs from the October draw inspection. WORK STATUS Condition: During excavation for the administrative building, a minor water infiltration problem was discovered. Solution: It was determined by the soils engineer that back filling with drain rock and with the use of geo-textile fabric as specified in the details will handle the water infiltration problem. Condition: There was a discrepancy between survey bench marks causing further discrepancies between the building site surveys and the grading surveys. Solution: Andreotti Engineers will reset the bench marks on the power poles because they did the original site plan. Condition: During a site visit the building inspector determined that the rebar specified for the foundations is inadequate. Solution: Rebar was added per the building inspector's requirement. This initiated COP #6. COP #6 has been approved. NF Status Report #1 November 23,1998 Faget Condition: The attached sheds (tenant storage) on buildings #4C and #41) may create a problem meeting the 15 -foot setback requirements. Solution: Don Poston will meet with the city to discuss the option of building detached sheds at another location. Condition: An existing irrigation line and a gas line were discovered during excavation for the side sewers. These lines interfere with the original design of the side sewers. Solution: The placement of the side sewers was redesigned. Some reconfiguring of the sewers and hand digging was required. Initiated Change Order Proposal (COP) #1. C012#1 for $2,827.44 has been approved. Condition: A second water service loop was required. Solution: An 8" water loop to Willow Street was added. Initiated COP #2. COP#2 for $26,243.58 has been approved. Condition: Minor revisions to the administration building were required. Solution: COP#3 for $243.35 has been approved. Condition: A gas main found at the southeast property corner interferes with the location of a light pole and dimensions of the street frontage sidewalks. Solution: Cascade National Gas is aware of the problem. The project is waiting for their response. COP # 4 pending. Condition: The grade at Building #2B is too high. Solution: YHA asked for COP #5 to increase the height of the concrete stem wall by 10". Approval of COP #5 is pending. Condition: Cargile Construction suggested changing the 4" Zurn drain at the exterior administrative stairway to a 10" drain. This will allow for easier clean-out of the dry well at a latter date. Solution: YHA approved COP #7. BUILDING STATUS Building #1 - Administration Office: Concrete footings are in place. The forms for the basement walls are in place. Walls are scheduled to be poured on November 24th. Building #2A - HUD -funded eight 2 -bedroom flats: Foundation is complete. Framing for the flooring of the first story is complete. Building #213 - HUD -funded eight 2 -bedroom flats: Second floor framing started. Some windows installed. NF Status Report #1 November 23,1998 Page 2 Building #4A - Five 3 -bedroom townhouses: Concrete footings and stem walls completed. Building #413 - Five 3 -bedroom townhouses: Concrete footings and stem walls completed. Building #3A - Four 3 -bedroom townhouses: Concrete footings and stem walls completed. Building #4C - Five 3 -bedroom townhouses: Excavation for footings started. Building #41) - Five 3 -bedroom townhouses: Excavation for footings started. Building #4E - Five 3 -bedroom townhouses: Excavation for footings started. Building #313 - Four 3 -bedroom townhouses: Excavation for footings started. Building #4F - Five 3 -bedroom townhouses: Excavation for footings started. BUDGET STATUS The development budget includes a construction contingency of $178,929. Seven (7) change orders have been proposed. $29,314.37 has been approved for three (3) COF's, leaving a budgeted balance of $149,641.63. Copies of the current development budget and project financial summary follow. NF Status Report #1 November 23,1998 Page 3 NUEVA PRIMAVERA CONSTRUCTION SITE 10/98 NUEVA PRIMAVERA CONSTRUCTION SITE 10/98 NUEVA PRIMAVERA / YAKIMA, WA YAKIMA HOUSING AUTHORITY 54 TWO- AND THREE-BEDROOM APARTMENTS PLUS FRUITVALE HOUSE AND OFFICE SPACE PROJECT FINANCING SOURCES DEBT FINANCING (SEE DETAIL To RIGHT) GRANTS: AHP OTHER EQUITY: HUD CTAP SALE OF LAND INTEREST EARNINGS (RESERVES AND FUNDS) LOW INCOME HOUSING TAX CREDITS @ HISTORIC TAX CREDITS @ TOTAL SOURCES OF CAPITAL 300,000 0 596,439 338,753 0.0% 0.0% 3,600,000 300,000 935,192 2,253 0 0 4,837,445 UNIT TSF PCT 66,667 61.60 74% 5,556 5.13 6% 17,318 16.00 19% 42 0 0 89,582 0.04 0.00 0.00 82.77 0% 0% 0% 100% FINANCING GAP / ADDITIONAL EQUITY REQUIRED * 0 CAP RATE VALUE @ NCALC DEVELOPMENT BUDGET USES LAND/BUILDING ACQUISITION OTHER ACQUISITION COSTS CONSTRUCTION/REPAIRS PLUS A&E 58,442 FINANCING COSTS REPLACEMENT RESERVE OTHER SOFT COSTS OPERATING RESERVE/RENT-UP/MARKETING DEBT SERVICE RESERVE DEVELOPER FEE + PROJECT MANAGEMENT TOTAL DEVELOPMENT COSTS * TDC PER UNIT/PER TSF COST 124,037 82.77 HTF PER UNIT/PER HSF COST 25,641 19.40 51,542 TSF HSF 632,950 23,484 3,373,032 293,089 0 5,750 67,400 178,340 263,400 4,837,445 UNIT TSF PCT 11,721 435 62,464 5,428 0 106 1,248 3,303 4,878 89,582 10.83 0.40 57.72 5.02 0.00 0.10 1.15 3.05 4.51 82.77 13% 0% 70% 6% 0% 0% 1% 4% 5% 100% OPERATING BUDGET REVENUES RENTAL INCOME OTHER REVENUE (LAUNDRY, VENDING, LATE CHARGES, ETC.) PARKING OFFICE/COMMERCIAL SPACE INVESTMENT/INTEREST INCOME LESS HOUSING VACANCY LOSS @ 5% LESS PARKING LOSS LESS OFFICE/COMMERCIAL LOSS LESS OTHER REVENUE LOSS TOTAL REVENUES (EFFECTIVE GROSS INCOME) Average Per Unit Monthly Housing Rent Per Square Foot Housing Rent (Gross) EXPENSES MANAGEMENT/ADMINISTRATIVE UTILITIES OPERATING AND MAINTENANCE TAXES AND INSURANCE FINANCIAL RESERVES LEASE PAYMENTS DEBT SERVICE FULLY AMORTIZING LOANS (FIRST YEAR) TOTAL EXPENSES Average Per Unit Annual Operating Expense Per S • uare Foot 0 • erating Expense 279,252 0 0 35,000 8,917 (13,963) 0 0 0 309,206 597 0.45 37,130 25,000 26,000 2,650 2,000 7,800 0 175,200 275,780 2,579 0.45 UNIT HSF PCT 688 463 481 49 37 144 0 3,244 5,107 0.72 049 0.50 0.05 0.04 0.15 0.00 3.40 5,35 13% 9% 9% 1% 3% 0% 64% 100% SIVIA/LEVINE ASSOCIATES 11/23/98 FIRST MORTGAGE TAX-EXEMPT LOAN / BONDS PAID OFF (YEAR) 2028 P&I AMORTIZATION AMOUNT 2,600,000 171,323 RATE 5.20% 360 TERM 360 DEBT COVER 1 197 SECOND MORTGAGE HTF LOAN PAID OFF (YEAR) 2049 AMOUNT P&I 51,682 RATE AMORTIZATION DEFERRED TERM DEBT COVER 1,000,000 1.00% 600 1.197 NET OPERATING INCOME (NOI) 1ST YEAR'S CASH FLOW BEFORE ADDITIONAL PAYMENTS ASSET MANAGEMENT FEE ADDITIONAL DEPOSITS TO RESERVES ADDITIONAL PRINCIPAL/INTEREST PAYMENTS CASH FLOW PROFIT (LOSS) $$2000$$ CASH -ON -CASH RETURN 208,626 33A26 0 15,600 0 17,826 NA Year 1 Year 2 Year 3 Year 4 Year 5 SCHED INCOME 323,169 323,519 328,061 332,670 337,346 VACANCY (13,963) (13,963) (14,172) (14,385) (14,600) EGI 309,206 309,556 313,889 318,285 322,746 EXPENSES 100,580 103,056 105,601 108,217 110,906 NOI 208,626 206,501 208,289 210,069 211,840 DEBT SERVICE 175,200 178,120 175,780 173,440 176,100 DEBT COVER RATIO 1 19 1 16 1.18 1.21 1.20 ASSET MGMT FEE 0 0 0 0 0 RESERVE DEPOSIT 19,500 19,578 19,658 19,739 19,821 CASH FLOW* 17,826 12,530 16,252 19,816 18,606 OUTSTANDING DEBT 3,570,000 3,535,100 3,500,301 3,465,604 3,426,010 • CURRENT DOLLARS Year 10 Year 20 Year 30 Year 40 Year 50 SCHED INCOME 361,771 416,278 470,395 543,301 627,638 VACANCY (15,729) (18,254) (21,184) (24,585) (28,532) EGI 346,043 398,024 449,211 518,715 599,105 EXPENSES 125,538 161,849 210,500 276,324 366,243 NOI 220,504 236,175 238,710 242,391 232,863 DEBT SERVICE 186,800 189,680 198,340 51,682 51,682 DEBT COVER RATIO 1.25 1.35 0.00 4.69 4.51 ASSET MGMT FEE 0 0 0 0 0 RESERVE DEPOSIT 20,261 21,282 22,526 24,043 25,891 CASH FLOW* 15,149 21,207 114,374 80,892 62,748 OUTSTANDING DEBT 3,138,612 2,268,716 932,621 489,491 0 • CURRENT DOLLARS 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 NUEVA RRIMAVERA,/ YAKIMA, WA 54 'TWO— AND THREE-BEDROOM APARTMENTS PLUS FRUITVALE HOUSE. AND OFFICE SPACE g ...,....:::::.'e.�eid:d xdf osP�:Piee.xii DEFT e� fof � - �� — _.'- d _. .,o. d'Fd' d3 v :+ ::.::9.:!:: ai �9v . o 'f' �o is �ie Y.".'sig � di?riiof eitidfiiJepP2:i, "nna::a�:::xi;:.:::-::e'v " d !! i.,11!,L.,Yd; ,:r;: .I. ,..,. @::Eg !6 i yp €s.:.x:-.a:::1 ::» ::.::::.:::::a, .._ _.;.._. .. ,; .........:,.,: -- _ — ..: _!, pp I ..:v+. ......:.:8 .. S ..:-��:,:.,..,pp...,...P.....:. :.::::..�:..-max a.>_;::.::..... ! r� s :�: a ¢.S.ld: d8:.n:.::.a:....::.a. x.:..,.:::.�:.d:;h:!,:36 i II ..:: [r=�:+a:.:: :: ..e......dfP I p e<fi.. .r s 6 !DEVELOPMENT:BUD..GETnxx:n�;h�III:�mW �e������:;L:,:.� €xI,, Idi=d d f PP'fsP::af-ne'NUMBERSiF.ORCALCULATIONS NOTES I:—.I!;;EB�€!ISI?! !@Id@;.:., Ij I ILI .v ..e.. ,.v...:..! ..f{p ..IP.....:_ . ........... . .. �.. P.....:. .... .. e.. �.:.. :.:�..:e:.-:::a�::.'_—:v_n�:ax?:?f3_e.34: f:.f. ... 3. 3d n::Enx :. , f.........e..._.:.mv.. _...u.._.._......_ ..... E6... d4!€nee: . I6 ....mRoiFifl:':°E.3 €ee4 i :::: m.... .:: g; :s1�. .. .... sE.:....._,__:...._3•..-_ ..__,_.._..._x___x_.......... . . ...: � nu:.: .! :I :_...�— .._..... . ..,:..� ...!@€.. ddd,, dl : 5jf 41 I !EEg4:n@€1439„_ .'e� 6,..:: —nn:€ d ! Il g.,. ..St,i......afE. :::fv.v....__...._.., v..._,.a..___._._.x<r.... r..::e.:::e.,q... f....... B .Pvf?d?. .:1,1:.... I d �s 6.:€f�: v:.:. .............I €I €4 ::r:::F?'F ii iP ': i:{,7:'vs:eh a3P l:E i..11..i... 61 P 3 .::: a@,Iii: �a::ee„p.;,;,.nef4n: v:.af:,e::a:: �: n:r:=2.—z:rs::s:.s::;.m.__s._.._....-3:�:e.. , el :@� �::: �e � !: 99 a::::: ... .v.,.. .. { , i I e., ."...x.. :. of a€: x: .a..:,......_ 9y v.d ,._.., x.vf...e.aoe..e........E..._.__.......�.._.....IF_.xa:::-e-n::::::::::..a.E..e: E3v311.e. of .f,. .: !! xldd€l �iIHI_fi�:TO TALC:: ��x .. .:x.� ..d!e?eff4fA@Il4i : 9 dg 1 fl l:� @i I �@ @.P. ..� ?. � 1 9 €,[ !f ...,.,. :a.i:�:n:Iv € €3 f i 3 ..I.:.... 1 .1.. ...! gg sggEyp .. ....: ... .. ....._.s_... ._ _... __...... _............... .._...,.. ... pp ..-..>391€ ..:.g ....., p{pIP{{gg �jeP�fde:€:I:!:::F:f?_.:f.1. e..?v.3:i:i$dEii!fi a@�f!IR: :�dfll ill I@@d 64 II :.,. .. lfElde:l... ..:.e..�n�Iieliidve9,_:. .. :.sniSi:.e.feamme_:nee.e............_.r.:..a.._._�nrv. .v..,a:.mee.a..en411eenll:<A .. ...............:.:e�9..:.e.In..._......,......___�..,,._.............:.. ..:::::.:ni':..:casae:edeeeiee166n16Plll..::..__.....v.:�.::.:....:.e:.::nn:n:nn:a:e...x :.f:€nn�l1l il,ee: fe l�e ACQUISITION LAND/BUILDING, COST 632,950.00 ' ORIGINAL SITE 573,950.00 ADDIT PARKING SF 15,645 59,000.00 PER SF $$$ = $3.77 INCLUDES $5000 FOR DEMOLITION TOTAL SF 174,907 ^ PURCHASE OFFER LEGAL ' 3,052.20 LYON LAW OFFICES SURVEY 2;160.50 ENVIRONMENTAL 4,000.00 ADDITIONAL PARKING AREA APPRAISAL 10,500.00 s LOW AND ASSOCIATES 1,500.00 , PALMER GROTH 9,000.00 TITLE INSURANCE/RECORDING/ESCROW 3,771.30 PROPERTY ACQUISITION ORIGINAL PROPERTY PURCHASE 2,771.25 PARKING AREA PURCHASE 1,000.05 ESTIMATE MISCELLANEOUS 500.00 FORFEITED EARNEST MONEY DEPOSIT SUBTOTAL 656,934.00 CONSTRUCTION/REPAIRS NEW CONSTRUCTION HUD Units SITE WORK 160,169 STORAGE SHEDS 12,128 NEW CONSTRUCTION 16 2 -BED 749 SF 11,984 $37.62. 450,871 HUD UNITS SUBTOTAL 623,168.00 CONSTRUCTION CONTINGENCY @ 6.8% 42,204.00 HUD UNITS TOTAL . 665,372.00 NON -HUD UNITS SITE WORK 380,418 STORAGE SHEDS 28,803 NEW CONSTRUCTION 38 3—BED 1,041 SF 39,558 $39.51 1,562,811 ALTERNATE NO. 1 57,044 NON -HUD UNITS SUBTOTAL 2,029,076.00 CONSTRUCTION CONTINGENCY @ 6.0% 120,740.00 NON -HUD UNITS TOTAL 2,149,816.00 CONTRACTOR COSTS SUBTOTAL 2,815,188.00 FURNISHINGS & EQUIPMENT 135,683.02 MAINT EQUIPMENT, OFFICE FURNITURE, TELEPHONES 135,683 A&E FEES 125,000.00 ARCHITECTURAL DESIGN FEE '125,000 4.1% FEE AS PERCENTAGE OF CONTRACTOR COSTS PROJECT MANAGEMENT 263,400.00 COMMERCIAL SPACE 296,661.00 SITE WORK 12,048 YHA OFFICE SPACE 6,900 SF $36.34 250,752 ALTERNATE NO. 2 17,876 CONTINGENCY® 6.0% 15,985 PER SQUARE FOOT AMOUNT $42.99 SUBTOTAL NEW CONSTRUCTION AND REHABILITATION 3,635,932.02 OTHER SOFT COSTS LIABILITY INSURANCE 3,750.00 RELOCATION 2,000.00 RENT UP/VACANCY LOSS 12,000.00 MANAGEMENT SET-UP 6,400.00 OPERATING RESERVE 39,000.00 MARKETING 10,000.00 SUBTOTAL 73,150.00 INTERIM AND PERMANENT FINANCING COSTS UNDERWRITER'S DISCOUNT @ 2.00% 52,000.00 2,600,000 ORIGINAL ISSUE DISCOUNT 19,656.00;. 'T CAPITALIZED INTEREST 123,933.33 COST OF ISSUANCE 97,500.00 BOND ISSUANCE FEES LEGAL 15,000.00 FOSTER PEPPER AND SHEFELMAN STATE DCTED LOAN FEE @ 1% 10,000.00 1,000,000 OTHER ACQUISITION OR FINANCE LEGAL 36,000.00 TITLE, RECORDING, ESCROW 10,000.00 TRUSTEE LEGAL 2,500.00 TRUSTEE ACCEPTANCE 2,500.00 TRUSTEE FEE (FIRST YEAR) 2,500.00 RATING AGENCY FEE 6,000.00 FINANCIAL ADVISOR 10,000.00 BOND PRINTING, MISCELLANEOUS , 3,000.00 SUBTOTAL 293,089.33 DEBT SERVICE RESERVE 178,340.00 .., xe:x— ..... ..... ... ::::��.:::3... _E..._e ..e. f .... ..:. .:Ev..dP::3P6 BP15i.oPx” , :.--�� ; :_....._... ...�.._._..._.,._ �... ,,,,........�x._.�,........: : .. .. . .... .. ........._..ex..._ n.s_.e... ......f d .4 ..v. .....:v_..@...N "''.. .......,_......ln e.; n;.{..:y.,-,.—:;u a: 5i:e:—...:��ii a':?'' -e. n11;<: :n C!p P:.::.,:: . :::::.._s:::iel°vv .E3E E! i' :ee:5� ::n:�:�xeefr..::�::: m.ep::—::��::{v P:n?I: yEv ! ::..::_.—_...........:..:... — :::�B�:�m: �: v::ef::..... . ... -............._....._....................3. ..e.: €4. e,..; E..4e, 4 IOTALDE.VELOP:MENT,COSTS.. .....:.:L..,. .:.I. n..P..4,f : iv}I{�I €P=dn::—axxxl::::::::.::4837445.35:::::!,::::=?,:::: �:�:...,,:,,._,_�::.�:—:::......::.��::nn....„,�..:n,x,,!�.I�PId:Px:P.. ���:I::I:I!@'= :1911 __........_.........._........_............._..........................................e.,.:.e......c.,m_:.e.,.,he:..,.:3..4.,..6e.nvnd:1.eP��1�16161I��fll9lle...!€@I..ilx....es>._._.._......x....... ,. .,_.._._............,.......ln....f..e91.....ea...n..................._x_.........�..e_..............::.:v::....vin€:::P@n.:::........_::n..:xr.:nanefadllflld�4ll€4:IIIIIe@i SIVIA/LEVINE ASSOCIATES. 11 /23/98 .. NUEVA PRIMAVERA / YAKIMA, WASHINGTON PROJECT STATUS REPORT DEVELOPER: YAKIMA HOUSING AUTHORITY JANUARY 2Z1999 NUEVA PRIMAVERA PROJECT STATUS SUMMARY January 27,1998 Nueva Primavera is a fifty-four (54) unit new construction project being developed by the Yakima Housing Authority. It consists of sixteen two-bedroom units and thirty-eight three-bedroom units. An existing four-bedroom home is also part of the project. Minor renovation of it has already been completed. Financing is being provided by a bond issue underwritten by Seafirst Bank, with support from the City of Yakima; a loan from the Washington Housing Trust Fund; a grant from the Federal Home Loan Bank through Pioneer Bank; and funding from the U.S. Department of Housing and Urban Development. The final parcel of property was purchased by the Yakima Housing Authority on July 20, 1998. The bond issue financing was closed on October 7, 1998. Through a competitive bidding process Cargile Construction Group, Inc. from Spokane, Washington was awarded the general construction contract on August 26, 1998. Cargile was given notice to proceed on October 5, 1998. Completion is projected for August 9, 1999. Don Poston from Group M Architecture, Inc. is the project architect. The construction contract totals $2,932,920: $623,168 for the sixteen (16) HUD - funded units and $2,309,752 for the thirty-eight (38) non -HUD units and office space. As of the date of this report construction is 32% complete and is on schedule. Photographs from the January draw inspection are included with this report. WORK STATUS Condition: The proposed tenant storage sheds on buildings #4C and #4D are within the 15 -foot setback (easement) of the adjacent property line. Solution: A solution acceptable to the City could not be found. The storage sheds will not be built. Condition: A gas main at the southeast corner of the property interferes with the location of a light pole. Solution: Don Poston will look into the feasibility of placing the site lighting fixture on an existing pole. This would eliminate the work described in COP #4. Feasibility pending. Condition: Due to conflicting survey data, the finish grade at Building #213 would have been too high. Solution: YHA asked for COP #5 to increase the height of the concrete stem wall by 10". COP #5 has been approved at a cost of $2,951.50. NI' Status Report #3 January 27,1999 Faget Condition: Cargile Construction suggested changing the 4" Zurn drain at the exterior administrative stairway to a 10" drain. This will allow for easier clean-out of the dry well at a latter date. Solution: COP #7 proposes to change the 4" drain to 10". YHA approved COP #7 at a cost of $327.24 Condition: An existing power pole interferes with the proposed route of a new water line. Solution: The water line will be routed around the power pole. This work was initiated through COP # 8 at a cost of $402.82. COP #8 has been approved. Condition: YHA plans on constructing a maintenance shop on the site at a -future date. It would be more economical to stub in the sewer now before the pavement and sidewalks are placed. Solution: YHA has requested a cost estimate for stubbing in an additional side sewer. This request was initiated through COP #10. COP #10 has been approved at a cost of $1,634.62. Condition: YHA has requested a credit clue to the 6" waterline connection on the west side of 6`" Avenue. Solution: The request was made through COP #11. Approval of COP #11 15 pending. Condition: The grade level surrounding the buildings on the south side of the project is approximately 2' higher than the adjacent alley. There may not be enough area to slope for this grade difference. Solution: Ted Layton of YHA requested that Cargile get a bid -for building a retaining wall with key stone block. Pricing is pending. BUILDING STATUS Building #1 - Administration Office: Concrete footings are in place. The forms for the basement walls are in place. Work on this building has been put on -hold clue to significant design changes. The revised plans have been approved by YHA. Don Poston of Group M submitted the revised drawings to the City and is waiting for the review to be completed. A set of drawings was also submitted to Cargile for pricing. The design changes increased the amount of occupied square footage. This increase will not require additional parking. Building #2A - HUD -funded eight 2 -bedroom flats: First floor framing is complete. Some windows installed. Building #213 - HUD -funded eight 2 -bedroom flats: Framing and roofing is complete. Windows installed. Rough -in plumbing and electrical 15 complete. Exterior siding 50% complete. Building #4A - Five 3 -bedroom townhouses: Second floor framing has been started. Some windows installed. NI' Status Report #3 January 27,1999 Page 2 Building #413 - Five 3 -bedroom townhouses: Second floor framing complete. Some windows installed. Exterior siding started. Building #3A - Four 3 -bedroom townhouses: Concrete footings and stem walls completed. Building #4C - Five 3 -bedroom townhouses: Concrete footings and stem walls completed. Building #40 - Five 3 -bedroom townhouses: Concrete footings and stem walls completed. Building #4E - Five 3 -bedroom townhouses: Concrete footings and stem walls completed. Building #313 - Four 3 -bedroom townhouses: Concrete footings and stem walls completed. The width of the footing needs to be measured at some areas to verify a minimum width of 16 inches. Location of the stem wall on the footing needs to be measured at some areas to verify centering. Building #4F - Five 3 -bedroom townhouses: Concrete footings and stem walls completed. The width of the footing needs to be measured at some areas to verify a minimum width of 16 inches. Location of the stem wall on the footing needs to be measured at some areas to verify centering. BUDGET STATUS The development budget includes a construction contingency of $178,929. Ten (10) change orders have been proposed. $39,011.21 has been approved for eight (8) COI's, leaving a budgeted balance of $139,917.79. NP Status Report #3 January 27,1999 Rage 3 NUEVA PRIMAVERA CONSTRUCTION SITE 1/99 NUEVA PRIMAVERA PROJECT STATUS SUMMARY December 30,1998 Nueva Primavera is a fifty-four (54) unit new construction project being developed by the Yakima Housing Authority. It consists of sixteen two-bedroom units and thirty-eight three-bedroom units. An existing four-bedroom home is also part of the project. Minor renovation of it has already been completed. Financing 15 being provided by a bond issue underwritten by Seafirst Bank, with support from the City of Yakima; a loan from the Washington Housing Trust Fund; a grant from the Federal Home Loan Sank through Pioneer Bank; and funding from the U.S. Department of Housing and Urban Development. The final parcel of property was purchased by the Yakima Housing Authority on July 20, 1998. The bond issue financing was closed on October 7,1998. Through a competitive bidding process Cargile Construction Group, Inc. from Spokane, Washington was awarded the general construction contract on August 26,1998. Cargile was given notice to proceed on October 5,1998. Completion 15 projected for August 9,1999. A list of the subcontractors follows this report. Don Poston from Group M Architecture, Inc. 15 the project architect. The construction contract totals $2,932,920: $623,168 for the sixteen (16) HUD -funded units and $2,309,752 for the thirty-eight (38) non - HUD units and office space. A5 of the date of this report construction is 24% complete and on schedule. The cold temperatures during December caused minor delays on some of the work in progress but has not changed the completion date. Photographs from the December draw inspection are included with this report. WORK STATUS Condition: The tenant storage sheds on buildings #4C and #41) are within the 15 -foot setback (easement) of the adjacent property line. Solution: Don Poston and Tim Monahan of Group M Architecture proposed two alternatives to the City's engineering and water departments: One to place the sheds on individual slabs separate from the buildings and the second to place the sheds on skids which would allow them to be moved if necessary with a fork lift. Neither was accepted by the City. Don and Tim are still working with the City to find a solution. Condition: A gas main at the southeast corner of the property interferes with the location of a new light pole. Solution: Don Poston will look into the feasibility of placing the site lighting fixture on an existing pole. NI' Status Report #2 December 30,1998 Page1 Condition: Due to conflicting survey data, the finish grade at Building #213 would have been too high. Solution: The height of the concrete stem wall for Building #213 was increased by 10". The work was initiated through COP #5. In order to prevent any delays YHA authorized Cargile to proceed with the work without agreeing to a price for the work. YHA and Cargile are still negotiating the amount of the COP. Condition: An existing power pole interferes with the proposed route of a new water line. Solution: The water line will be routed around the power pole. This work was initiated through C017 # 8 at a cost of $402.82. Condition: There are additional permit and plan review fees for the second water service loop required by the City. Solution: These fees are covered in COP #9 at a cost of $2,016.75. Condition: The finish grade level at the buildings on the south side of the property is approximately 2 feet higher than the adjacent alley. The slope between the buildings and the alley may be too steep for proper drainage and easy maintenance of this area. Solution: Ted Layton of YHA requested that Cargile obtain a bid for building a retaining wall with key stone block. BUILDING STATUS Building #1 — Administration Office Building: Concrete footings and the forms for the basement walls are in place, but further work was put on -hold due to potential design changes. Once YHA staff began the actual layout of individual offices and work areas it was evident that the space would not accommodate both present needs and future expansion. Because the construction was at a stage where changes would not impact work already completed, YHA decided that now was the best time to consider design changes. The new design locates the board room and the kitchen on the lower level. This requires the installation of an elevator and interior wall changes. The revised plans will be ready for final review by YHA during the week of January 4. In the preliminary plan review the City approved the changes with the requirement of adding more parking. Cargile and Group M estimate the cost of the changes will not exceed $100,000. The cost will be covered by use of the contingency and adjustment of the project management fee. Building #2A — HUD -funded eight 2 -bedroom flats: Framing is complete. Some windows are installed. Building #213 — HUD -funded eight 2 -bedroom flats: Framing and roofing is complete. Windows are installed. Building #4A — Five 3 -bedroom townhouses: Concrete footings, stem walls and pony walls are in place. NP status Report #2 December 30,1998 Page 2 Building #4B - Five 3 -bedroom townhouses: Concrete footings and stem walls are in place. Building #3A - Four 3 -bedroom townhouses: Concrete footings and stem walls are in place. Building #4C - Five 3 -bedroom townhouses: Concrete -footings and stem walls are in place. Building #4130 - Five 3 -bedroom townhouses: Stem walls forms are in place ready for concrete pour. Building #4E - Five 3 -bedroom townhouses: Stem walls forms are in place ready for concrete pour. Building #3B - Four 3 -bedroom townhouses: Excavation for footings started. Building #4F - Five 3 -bedroom townhouses: Excavation for footings started. BUDGET STATUS The development budget includes a construction contingency of $178,929. Nine (9) change orders have been proposed. $29,314.37 has been approved for three (3) CCPs, leaving a budgeted balance of $149,641.63. NP Status Report #2 December 30,1998 Page 3 11.171111.11 Iwai 1111 NUEVA PRIMAVERA CONSTRUCTION SITE 1/99 12-16-1998 03:13PM FROM GROUP M CONSTRUCTION, INC TO NUEVA PRIMAVERA Jab No. 9803.01 Subcontractor information 9803.01-01 Site Ciao rinp/arthwork urns Water Distribution/Sewerage 5260 liwy 24 Moxee, WA 98936 Contact Gluck Durand 9$03,01-02 Asphalt Pity Ing 9602.01-03 Irrigation Systems Landscape Wank 9603.01-04 Chain Link Fences 98x3 01-05 Masonry 9M13.01-06 Archltecturat Woodwork 9003.01-0? Building Insulation 9803.01-08 Asphalt Shingles el-• - 13603.01-09 Reslttent foorin8 Carpeting 9803.01-10 Painting Gypsum Board Columbia Asphalt & Gravel, Inc. 3307 River Road Yakima, WA 98902 Contact: Daniel Hague Park Place Landscape, Ino, P.O. Box 1811 G00ur d'Alene, ID 83814 Contact: Mike Rich 12064431542 P.02 (509) 452-4612 FAX 457159 (509) 4S3-2093 FAX 453-2483 x)785-0916 FAX 665-9558 Fencing &Awning 1-800-S10-0805 4810 Beauchen0 Rd. (S#9) 246.5117 Moxee, WA 98938-9734 FAX 248-8070 Contact: J R, von Gohren Mttje$tiO Maaanty 3316 E. 38th Spokane, WA 99223 Canlac1: Jeff Gregory Artiatic Dosign Cabinets 3819 E Springfield Spokane+, WA 99202 Contact- Steve Weitz (509) 44841430 No FAX (509) 5$2-9667 FAX 532-9449 MOD. 9904009 Pro Insulation, LLC 1400-359-6402 308 South 2nd Avenue (W9) 452-8124 PO Box 10582 FAX 4574576 Yakima. WA 98909 Contact: Mark Brown Dittman Constrottian 2269 Jericho Road Richland, WA 99352 Contact; Art Distiman A Carpet Shop 6621 E. Sprague Spokane, WA 99212 Contact: Bud Green Esstom Washington Industrial Commercial Painting, Inc. 1730 E. Mallon Spokane. vvA 99202 contact: Dave 1-trrrichs (509) 943-6345 FAX 9433-8348 (509) 533-0810 FAX 533-1004 (508) 534-0746 FAX 534-0753 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 12-16-1998 03:14PM FROM GROUP M CONSTRUCTION, INC TO 12864431542 P.03 •1403,31-11 Plumbing 9863.01-12 Electrical '9603.01-13 Misc. Motais Competitive Plumbing 571 N. Galloway Drive Yakima, WA 98906 Contact: Michael Hafer Stewart Electric 23604 E. Henry Road Greenacros, WA 99018 Contact: Ma Stuart ASAP Motel Fabricators, Inc. 315 S. Sid Ave. Yakima, WA 98902 Contact: Teny ;9803.01-14 Heating; and Air Conditia ning THAWS Sheet Metal P.O. Box 454 1907 SW Court PI Pew/kW, OR 97801 9803.Q1-15 Concrete IB Concrete 4402 W. Payette Kennewick, WA 99336 Contact Oilier Vir9en (509) 597.5530 FAX 898.5023 Celt 981-8862 (509) 892-1684 Cell 981-8112 (509) 453-9143 FAX 575-7956 (541) 285-3751 FAX 276-7840 (509) 947-0446 TOTAL P.03 NUEVA PRIMAVERA CONSTRUCTION SITE 12/98 NUEVA PRIMAVERA CONSTRUCTION SITE 12/98 Nnoo ;um 30170 666t dtiN VVIIiti.A 40 A110 CRAF3021-3