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Cost Share - 2001 - Issue Non Recourse Revenue Bonds - 3/16/2001 INDEMNIFICATION AND COMPENSATION AGREEMENT THIS AGREEMENT, entered into as of the 16th day of March, 2001, between THE INDUSTRIAL DEVELOPMENT CORPORATION OF THE CITY OF EAGLE, IDAHO (the IIpublic Corporation"), created and maintained by the City of Eagle, Ada County" Idaho (the "City") under the provisions of Title 50, Chapter 27, Idaho Code, as amended (herein called the "Public Corporation II ), and ROSE COTTAGE LLC (herein called the "Applicant"), in connection with an application submitted by the Applicant to the Public Corporation. Section 1. Backqround. The Public Corporation has been established by the City to issue non recourse revenue bonds and other permitted obligations. Section 2. Services to be Provided by the Public Corporation. The Public Corporation has received the Applicant's application for the financing of an industrial development facility (the "Project"), and has approved the application by resolution of the Public Corporation (the "0fficial Action Resolution") . Subsequent to the adoption of the Official Action Resolution, the City and the Public Corporation will cooperate with the Applicant, its underwriter, banker, and Bond Counsel in arranging for the financing of the Project through the issuance of non recourse industrial development bonds or other obligations of the Public Corporation (the "Bonds"). Section 3. Payment and Expenses. The Applicant shall be responsible for all reasonable and necessary costs, expenses and fees incurred by the Public Corporation and/or the City directly in connection with the issuance of the Bonds or in connection with the Project, including but not limited to the out-of-pocket expenses incurred by the Public Corporation's and/or the City's personnel; fees for legal services and out-of -pocket expenses of the City's and the Public Corporation's counsel, if necessary to participate in the Applicant's plan of financing; fees and expenses of the City/Public Corporation required in connection with the underwriting or placement of the Bonds; fees and out-of-pocket expenses of Bond Counsel; and all incidental expenses, costs and charges relating to the Project and the issuance of Bonds not enumerated above within thirty (30) days of being billed for the same. Applicant shall receive a credit for any amounts previously deposited with the Public Corporation for such expenses. In addition to the foregoing, the Applicant shall pay such amounts as shall be sufficient in an a er all actual out-of-pocket expenditures of the Public Corporatl including but not limited to the cost of an annual audit of the Public Corporation's books and accounts. Such annual audit expense shall be prorated amongst the Applicant and all other companies with respect to which industrial development revenue -------- INDEMNIFICATION AND COMPENSATION AGREEMENT - PAGE -1- ~~ bonds or other obligations have been issued by the Public Corporation and which remain wholly or partially outstanding during any such year. The City shall submit its billing for the administrative fee, if any, to the Applicant on an annual basis, and such fee shall be payable with thirty (30) d~ys ther~after. ~II r~~h~ t.Dj,.~_e.it'VIIS'S ,::r' n#5. oft, JJi.. PM.e! b1 .,.,., Afp/'trM4-. 41C s,,~,,1 h Mlu""fL r~lhe.J ~ 1I11tr1n4/ 0'1"'''' Mht A" d' f .. h 1 . ct:.~on 't. In emn~ ~cat~on. T e App ~cant agrees that it will at all times indemnify and hold harmless the Public Corporation and the City against losses, costs, damages, expenses, and liabilities of whatsoever nature (including but not limited to attorneys' fees, litigation and court costs, amounts paid ~n settlement, and amounts to discharge judgments) directly or indirectly resulting from, arising out of, or related to one or more Claims (as hereinafter defined) . In the event that the Public Corporation determines to issue the Bonds prior to the expiration of the thirty-day contest period provided for in Section 50-2718, Idaho Code, the Applicant agrees that it will at all times indemnify and hold harmless the Public Corporation and the City against losses, costs, damages, expenses, and liabilities of whatsoever nature (including but not limited to attorneys' fees, litigation and court costs, amounts paid in settlement and amounts to discharge judgments) directly or indirectly resulting from, arising out of, or related to such issuance of the Bonds prior to the expiration of said contest period. The term II Claims II as used herein shall mean all claims, lawsuits, causes of action, and other legal actions and proceedings of whatsoever nature, including but not limited to claims, lawsuits, causes of action, and other legal actions and proceedings involving bodily or personal injury or death of any person or damage to any property (including but not limited to persons employed by the Public Corporation and/or the City, the Applicant or any other person and all property owned or claimed by the Public Corporation and/or t:he City, the Applicant, any affiliate of the Applicant or any other person) or involving damages relating to the issuance, offering, sale, or delivery of the Bonds brought against the Public Corporation and/or the City or to which the Public Corporation and/or the City is a party, even if groundless, false or fraudulent, that directly or indirectly result from, arise out of or relate to the design, construction, operation, use, occupancy, maintenance, or ownership of the Project or any part thereof or from the issuance, offering, sale, or delivery of the Bonds or terms or covenants thereof. The obligations of the Applicant shall apply to all losses or claims, or both, that result from, arise out of, or are related to any event, occurrence, condition or relationship, whether such losses or claims, or both, are asserted. Neither the Public Corporation nor the City will be liable to the Applicant for, and the Applicant hereby releases the Public Corporation and the City from all liability for, all or any part or parts of any property owned or claimed by the Applicant that directly or indirectly result INDEMNIFICATION AND COMPENSATION AGREEMENT - PAGE -2- from, arise out of or relate to the design, construction, operation, use, occupancy, maintenance, or ownership of the Project or any part thereof, even if such injuries, damages, or destruction directly or indirectly result from, arise out of, or relate to, in whole or in part, one or more negligent acts or omissions of the Public Corporation and/or the City or its or their officers, directors, employees, agents, servants, or any other party acting for or on behalf of the Public Corporation and/or the City. The Public Corporation and/or the City shall reimburse the Applicant for payments made by the Applicant to the extent of any proceeds, net of all expenses of collection, actually received by the Public Corporation and/or the City from any insurance with respect to any such Loss sustained. The Public Corporation and/or the City shall have the duty to claim any such insurance proceeds and the Public Corporation and/or the City shall assign its or their rights to such proceeds, to the extent of such required reimbursement, to the Applicant. In case any action shall be brought against the Public Corporation and/or the City in respect of which indemnity may be sought against the Applicant, the Public Corporation and/or the City shall promptly notify the Applicant in writing, and the Applicant shall have the right to assume the investigation and defense thereof including the employment of counsel and the payment of all expenses. The Public Corporation and/or the City shall have the right to employ separate counsel in any such action and participate in the investigation and defense thereof, but the fees and expenses of such counsel shall be paid by the Public Corporation and/or the City unless the employment of such counsel has been authorized by the Applicant, which authorization shall not be unreasonably withheld. The Applicant shall not be liable for any settlement of any such action without its consent but, if any such action is settled with the consent of the Applicant or if there be final judgment for the plaintiff of any such action, the Applicant agrees to indemnify and hold harmless the Public Corporation and the City from and against any Losses by reason of such settlement or judgment. The provisions of this section shall survive the expiration or termination of this l~greement. Section 5. Tax Payment and Indemnification. The Applicant hereby agrees to pay directly and/or to reimburse the Public Corporation for any and all taxes, assessments, licenses, fees, charges or other impositions levied, assessed or imposed by local, state or federal authorities against the Applicant or the Public Corporation based upon the activity of issuing the Bonds or which are measured by such Bond financing. Further, Applicant agrees to pay in full before delinquency all taxes, assessments, licenses, fees, charges, or other impositions that may now or hereafter be levied, assessed or imposed by local, state, or federal authorities against the Applicant, the Applicant I s activities in Idaho, the Project or against the Application or the Public Corporation resulting from administration or payment or service of the Bonds including without limitation the current business and occupation tax of the State of Idaho and its INDEMNIFICATION AND COMPENSATION AGREEMENT - PAGE -3- IN WITNESS WHEREOF, the Industrial Development Corporation of the City of Eagle, Idaho, acting pursuant to resolution of its Board of Directors has caused its name to be hereunto subscribed and have caused their names to be subscribed hereunto by a duly authorized officer the day and year hereinabove first written. THE INDUSTRIAL DEVELOPMENT CORPORATION OF THE CITY OF EAGLE, ID 0 ATTEST: By: ROSE COTTAGE LLC I BY'~ ". Title: MCI"~lll'\a ~tM'oe,/' INDEMNIFICATION AND COMPENSATION AGREEMENT - PAGE -5- EXHIBIT nA" ADDRESS OF PUBLIC CORPORATION: Industrial Development Corporation of The City of Eagle, Idaho P.O. Box 1520 Eagle, Idaho 83616 ADDRESS OF APPLICANT: INDEMNIFICATION AND COMPENSATION AGREEMENT - PAGE -6-