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1 b <br /> CONFIRMATION AGREEMENT <br /> THIS CONFIRMATION AGREEMENT (this "Agreement") is dated August_, 2005, <br /> by and among THE CITY OF EVERETT, WASHINGTON (the "City"), the HOUSING <br /> AUTHORITY OF THE CITY OF EVERETT (the "Authority") and BANK OF AMERICA, <br /> N.A. (together with its successors and assigns, the"Bank"). <br /> RECITALS <br /> A. The City and the Authority entered into that certain City of Everett and Everett <br /> Housing Authority Agreement on Cleanup and Redevelopment of Asarco Property dated July 22, <br /> 2004 (as amended, restated, supplemented or otherwise modified from time to time, the <br /> "City/EHA Agreement"), pursuant to which the City agreed to take and did take certain actions <br /> to support the Authority's activities in an area in Northeast Everett in the vicinity of the former <br /> Asarco Smelter("Redevelopment Area") <br /> B. The Authority issued that certain Tax Exempt Non Revolving Line of Credit <br /> Revenue Note, 2004 (Everett Smelter Site Project) (the"Note"), in the amount of$5,700,000 and <br /> entered into a Loan Agreement, Tax-Exempt Non-Revolving Line of Credit (Everett Smelter Site <br /> Project) (as amended, restated, supplemented or otherwise modified from time to time, the "Loan <br /> Agreement") with the Bank, pursuant to which and subject to the terms and conditions set forth <br /> therein, the Bank agreed to permit and did permit draws on the Note for the purpose of providing <br /> the funds to finance the purchase, cleanup, rehabilitation and preparation for redevelopment of a <br /> portion of the Redevelopment Area. <br /> C. Pursuant to the terms of the Loan Agreement, and as a material condition <br /> precedent to the agreement of the Bank to permit draws on the Note, the City, the Authority and <br /> the Bank entered into that certain Contingent Funding Agreement dated July 22, 2004 (as <br /> amended, restated, supplemented or otherwise modified from time to time, the "Contingent <br /> Funding Agreement"), pursuant to which the City agreed, subject to the terms and conditions set <br /> forth therein, to make advances to the Authority in an amount equal to the principal amount of <br /> and accrued interest on the Note and to pay such advances directly to the Bank. <br /> D. The agreement of the Bank to permit draws on the Note is conditioned, among <br /> other things, upon the absence of any breach or default (howsoever defined) under that certain <br /> Purchase and Sale Agreement dated June 16, 2004 among ASARCO Incorporated ("Asarco"), <br /> Domestic Realty Company ("DRC") and the Authority (as amended, restated, supplemented or <br /> otherwise modified from time to time, the "Purchase Agreement") or under that certain <br /> Remediation Agreement dated July 22, 2004 among Asarco, DRC and the Authority (as <br /> amended, restated, supplemented or otherwise modified from time to time, the "Remediation <br /> Agreement"). <br /> E. The Authority notified Asarco by letter dated August 15, 2005 (the "Notice of <br /> Default") that Asarco is in default under the Purchase Agreement and the Remediation <br /> SEA 1685103v24900000-605 1- <br /> I I 9 <br /> - <br />