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EXHIBIT (b)(7)
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 1 of 16
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KEYBANK NATIONAL ASSOCIATION
International Division
700 Fifth Avenue, 52nd Floor
Mailstop: WA 31-10-5260
Seattle, Washington 98104
IRREVOCABLE LETTER OF CREDIT
No. WSL 092425
December 12, 2000
To: U.S. Bank Trust National Association,
a national banking association
1420 Fifth Avenue, 7th Floor, WWH1022
Seattle, Washington 98101
Attention: Corporate Trust Division
Re: Washington Economic Development Finance Authority Nonrecourse
Revenue Bonds, 1997 (Lindal Cedar Homes, Inc. Project),
Series A-Taxable and Nonrecourse Revenue Bonds, 1997 (Lindal
Cedar Homes, Inc. Project), Series B-Tax-Exempt (the "Bonds")
Ladies and Gentlemen:
We hereby establish our Irrevocable Letter of Credit ("Letter of
Credit") in your favor, as Trustee for the Bonds, in the aggregate stated amount
of Three Million Five Hundred Thirty Six Thousand Eight Hundred Seventy Eight
and 95/100 Dollars ($3,536,878.95) ("Credit") of which Credit a maximum of Three
Million Four Hundred Twenty Five Thousand and No/100 Dollars ($3,425,000.00)
shall be available with respect to principal of Bonds ("Principal") and a
maximum amount of One Hundred Eleven Thousand Eight Hundred Seventy Eight and
95/100 Dollars ($111,878.95) shall be available with respect to interest on
Bonds ("Interest"). The Bonds are issued by the Washington Economic Development
Finance Authority ("Issuer") pursuant to an Indenture of Trust dated as of
November 1, 1997 between you and the Issuer ("Indenture"). The proceeds of the
Bonds are being used to make a loan to Lindal Cedar Homes, Inc., a Delaware
corporation (the "Account Party").
Funds under this Letter of Credit are available to you against your
sight draft(s) drawn on us stating on their face: "Drawn under KeyBank National
Association Irrevocable Letter of Credit No. WSL 092425 dated December 12, 2000"
and presentation to us of your written
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 2 of 16
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certificate(s) in the forms attached and incorporated herein as Annex A (an "A
Drawing") and/or an Annex B (a "B Drawing").
Demand for payment may be made by you at any time during our business
hours at KeyBank National Association, International Division, 700 Fifth Avenue,
52nd Floor, Mailcode WA-31-10-5260, Seattle, Washington 98104, Attention:
Sharlene Sauders (or such other person as we may from time to time specify), on
a Business Day (a day which is not a Saturday or Sunday or a day on which you,
as Trustee, and banking institutions in Seattle, Washington, are authorized or
required by law to close). Communications with respect to this Letter of Credit
shall be in writing and shall be addressed to us at KeyBank National
Association, International Division, 700 Fifth Avenue, 52nd Floor, Mailcode
WA-31-10-5260, Seattle, Washington 98104, Attention: Sharlene Sauders,
specifically referring thereon to KeyBank National Association Irrevocable
Letter of Credit No. WSL 092425. We will honor a telefax drawing sent to us at
(206) 343-6921 with the original drawing to be deposited in the United States
mail addressed to us on the same day as the telefax drawing.
If a demand for payment made by you hereunder does not, in any instance,
conform to the terms and conditions of this Letter of Credit, we shall give you
immediate notice that the purported negotiation was not effected in accordance
with this Letter of Credit, stating the reasons therefor and that we are holding
any documents at your disposal or are returning them to you, as we may elect.
Upon being notified that the purported negotiation was not effected in
conformity with this Letter of Credit, you may attempt to correct any such
nonconforming demand for payment if and to the extent that you, as Trustee, are
entitled and able to do so and provided such corrections are presented prior to
the expiry date of this Letter of Credit.
Our payments to you will be made in U.S. dollars and immediately
available funds. All payments under this Letter of Credit shall be made strictly
from our own funds and not in reliance upon the receipt of any funds from any
other source, including the Account Party. Any time of day specified in this
Letter of Credit is considered to be local time in Seattle, Washington. If a
drawing conforms to the terms and conditions hereof, payment shall be made to
you of the amount specified in your drawing, as follows:
Drawing If Received By Will Be Honored By
------- -------------- ------------------
A Drawing 12:00 noon 11:00 a.m. (next Business Day)
B Drawing 12:00 noon 11:00 a.m. (next Business Day)
If any drawing is received by us after the time specified above, the
drawing will be deemed to be received at the appropriate time on the following
Business Day.
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 3 of 16
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Multiple and partial drawings are permitted under this Letter of Credit.
The Credit shall be reduced and reinstated as described in the following
paragraphs. The Credit shall be reduced automatically upon our payment of any
drawing, in the following amounts:
Type of Drawing Type and Amount of Credit Reduction
- --------------- -----------------------------------
A Drawing Interest in the $ amount of the A Drawing
B Drawing Principal in the $ amount of the B Drawing, plus Interest
with respect to a B Drawing for Bonds in $ amount equal to
the Principal reduction x (interest rate coverage)
In addition, the Credit will be permanently reduced upon our receipt
from you of (and as provided in) your certificate in the form of Annex D
attached and incorporated herein.
Provided that you have not received written notice from us in the form
of Annex C hereto on or before the Interest Payment Date with respect to the
applicable A Drawing , the Credit shall be reinstated under the following
circumstances:
Drawing Reinstatement Date Reinstatement Amount
------- ------------------ --------------------
A Drawing On the same Business Day on $ amount paid by us under the
which an A Drawing is honored A Drawing
B Drawing No reinstatement
This Letter of Credit shall terminate at our close of business in
Seattle, Washington, on the earliest to occur of the following dates: (i)
December 22, 2005 (the "Expiration Date"); (ii) 25 days (or if such 25th day is
not a Business Day, on the preceding Business Day) after you have received
notice from us in the form of Annex C hereto; (iii) the date you surrender this
Letter of Credit to us for cancellation; or (iv) the date of our receipt of a
certificate from you in the form of Annex F hereto to that effect.
This Letter of Credit is transferable in the amount of the full
unutilized balance hereof and not in part to any transferee who has succeeded
you as trustee under the Indenture and such transferred Letter of Credit may be
successively transferred. Transfer of the available drawings(s) under this
Letter of Credit to such transferee shall be effected by the presentation to us
of the original of this Letter of Credit and any subsequent amendments
accompanied by the transfer form attached hereto as Annex E, and the payment of
$500 as a transfer fee by the Account Party.
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 4 of 16
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This Letter of Credit shall be governed by the International Chamber of
Commerce Uniform Customs and Practice for Documentary Credits, Publication No.
500 (1993 Revision), (and including any amendments, modifications, or revisions
thereof) (together, the "UCP") and the laws of the State of Ohio. In addition,
notwithstanding the provisions of Article 41 of the UCP to the contrary, this
Letter of Credit is intended to remain in full force and effect until it expires
in accordance with its terms.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds), except for the certificates and
sight drafts referred to herein; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except for
such certificates and such drafts.
KEYBANK NATIONAL ASSOCIATION, a
national banking association
By
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Authorized Officer
By
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Authorized Officer
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 5 of 16
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ANNEX A
CERTIFICATE FOR A DRAWING
KeyBank National Association
International Division, 700 Fifth Avenue, 52nd Floor
Mailcode WA-31-10-5260
Seattle, Washington 98104
Attention: Sharlene Sauders
Re: Irrevocable Letter of Credit No. WSL 092425
Issued by KeyBank Bank National Association
The undersigned, a duly authorized officer of U.S. Bank Trust National
Association in its capacity as bond trustee (the "Trustee") hereby certifies to
KeyBank National Association (the "Bank"), with reference to the Irrevocable
Letter of Credit referred to above (the "Letter of Credit") issued in favor of
the Trustee pursuant to the Reimbursement Agreement dated as of December 1, 2000
(the "Reimbursement Agreement") between the Bank and Lindal Cedar Homes, Inc., a
Delaware corporation (the "Account Party") with respect to the Washington
Economic Development Finance Authority Nonrecourse Revenue Bonds, 1997 (Lindal
Cedar Homes, Inc. Project), Series A-Taxable and Nonrecourse Revenue Bonds, 1997
(Lindal Cedar Homes, Inc. Project), Series B-Tax-Exempt (the "Bonds") and an
Indenture of Trust dated as of November 1, 1997 by and between the Washington
Economic Development Finance Authority and the Trustee (the "Indenture"), that:
(1) The Trustee is making a drawing under the Letter of Credit in the
amount of $_________ with respect to the payment of interest due or to become
due on outstanding Bonds, on __________, 200___ for a period which begins on
________, 200___ and continues through __________, 200___.
(2) The amount demanded hereunder does not exceed the Interest available
on the date hereof to be drawn under the Letter of Credit or the amount which
the Trustee is required to draw on the date hereof under the Indenture.
(3) The undersigned requests that the payment hereby demanded be made no
later than 11:00 a.m., Seattle time on __________ [if this Certificate is
presented at or before 12:00 noon, Seattle time on a Business Day, then insert a
date which is a Business Day and is after the date on which this Certificate is
delivered; if this Certificate is delivered after 12:00 noon, Seattle time on a
Business Day, then insert a date which is a Business Day and which is no earlier
than the second Business Day following the date this Certificate is delivered].
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 6 of 16
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Unless otherwise agreed to in a writing signed by you and us, please wire
transfer the amount hereby demanded to the Corporate Trust Division of U.S. Bank
Trust National Association.
(4) If this Certificate is delivered by telefax, we undertake to deposit
in United States Mail the original executed copy of this Certificate addressed
to you on the date of this telefax demand. The date on which payment is demanded
is the date on which the amount drawn hereby is due and payable on the Bonds.
The undersigned will apply the same, or cause the same to be applied, directly
to the payment when due of the interest owing on account of the Bonds pursuant
to the Indenture. No portion of said amount shall be applied for any other
purpose, and no portion of said amount shall be commingled with other funds.
Any capitalized term used herein and not defined shall have the meaning
assigned to such term in the Letter of Credit or, if not therein defined, as
defined in the Reimbursement Agreement.
The individual signing below hereby represents that he or she is an
officer of the undersigned and is duly authorized to execute and deliver this
Certificate.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ______ day of _______________, 200___.
Very truly yours,
U.S. BANK TRUST NATIONAL ASSOCIATION, a
national banking association, as Trustee
By
-----------------------------------
Name
-----------------------------------
Title
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 7 of 16
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ANNEX B
CERTIFICATE FOR B DRAWING
KeyBank National Association
International Division, 700 Fifth Avenue, 52nd Floor
Mailcode WA-31-10-5260
Seattle, Washington 98104
Attention: Sharlene Sauders
Re: Irrevocable Letter of Credit No. WSL 092425
Issued by KeyBank National Association
The undersigned, a duly authorized officer of U.S. Bank Trust National
Association, a national banking association in its capacity as bond trustee (the
"Trustee") hereby certifies to KeyBank National Association (the "Bank"), with
reference to the Irrevocable Letter of Credit referred to above (the "Letter of
Credit") issued in favor of the Trustee pursuant to the Reimbursement Agreement
dated as of December 1, 2000 (the "Reimbursement Agreement") between the Bank
and Lindal Cedar Homes, Inc., a Delaware corporation (the "Account Party") with
respect to the Washington Economic Development Finance Authority Nonrecourse
Revenue Bonds, 1997 (Lindal Cedar Homes, Inc. Project), Series A-Taxable and
Nonrecourse Revenue Bonds, 1997 (Lindal Cedar Homes, Inc. Project), Series
B-Tax-Exempt (the "Bonds") and an Indenture of Trust dated as of November 1,
1997 by and between the Washington Economic Development Finance Authority and
the Trustee (the "Indenture"), that:
(1) The Trustee is making a drawing under the Letter of Credit in the
amount of $___________ with respect to the payment of principal of outstanding
Bonds due at maturity or upon redemption or acceleration prior to maturity.
(2) The amount demanded hereby does not exceed the Principal available
on the date hereof to be drawn under the Letter of Credit or the amount which
the Trustee is required to draw on the date hereof under the Indenture.
(3) The undersigned requests that the payment hereby demanded be made no
later than 11:00 a.m., Seattle time on __________ [if this Certificate is
presented at or before 12:00 noon, Seattle time on a Business Day, then insert a
date which is a Business Day and is after the date this Certificate is
delivered; if this Certificate is delivered after 12:00 noon, Seattle
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 8 of 16
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time on a Business Day, then insert a date which is a Business Day and which is
no earlier than the second Business Day following the date this Certificate is
delivered]. Unless otherwise agreed to in a writing signed by you and us, please
wire transfer the amount hereby demanded to the Corporate Trust Division of U.S.
Bank Trust National Association.
(4) If this Certificate is delivered by telefax, we undertake to deposit
in the United States mail the original executed copy of this Certificate
addressed to you on the date of this telefax demand. The date on which payment
is demanded is the date on which the amount drawn hereby is due and payable on
the Bonds. The undersigned will apply the same, or cause the same to be applied,
directly to the payment when due of the Principal owing on account of the Bonds
pursuant to the Indenture. No portion of said amount shall be applied for any
other purpose, and no portion of said amount shall be commingled with other
funds.
The individual signing below hereby represents that he or she is an
officer of the undersigned and is duly authorized to execute and deliver this
Certificate.
Any capitalized term used herein and not defined shall have its
respective meaning as set forth in the Letter of Credit or, if not therein
defined, as defined in the Reimbursement Agreement.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ____ day of ___________________, 200__.
U.S. BANK TRUST NATIONAL ASSOCIATION, a
national banking association, as Trustee
By
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Name
-----------------------------------
Title
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 9 of 16
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ANNEX C
NOTICE OF DIRECTION TO TRUSTEE TO MAKE
A DRAWING UNDER LETTER OF CREDIT
Date: _________________
To: U.S. Bank Trust National Association,
a national banking association
1420 Fifth Avenue, 7th Floor, WWH1022
Seattle, Washington 98101
Attention: Corporate Trust Division
Re: Irrevocable Letter of Credit No. WSL 092425 Issued by KeyBank
National Association regarding the Washington Economic
Development Finance Authority Nonrecourse Revenue Bonds, 1997
(Lindal Cedar Homes, Inc. Project), Series A-Taxable and
Nonrecourse Revenue Bonds, 1997 (Lindal Cedar Homes, Inc.
Project), Series B-Tax-Exempt (the "Bonds")
Ladies and Gentlemen:
Reference is made to the Reimbursement Agreement dated as of December 1,
2000 (the "Reimbursement Agreement") between Lindal Cedar Homes, Inc., a
Delaware corporation (the "Account Party") and KeyBank National Association
pursuant to which there exists an Event of Default (as defined in the
Reimbursement Agreement) under Section 8.01 thereof.
Please be advised (i) that in accordance with the Reimbursement
Agreement and Section 6.01 of the Indenture, we are directing you, as Trustee,
to accelerate the Bonds for redemption; and as the beneficiary of the Letter of
Credit, to make a drawing under the Letter of Credit for the redemption price of
all outstanding Bonds pursuant to Section 6.02 of the
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 10 of 16
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Indenture and (ii) THAT AS A CONSEQUENCE OF SUCH DIRECTION YOU MAY MAKE A
DRAWING UNDER THE LETTER OF CREDIT NO LATER THAN 25 DAYS (OR IF SUCH 25TH DAY IS
NOT A BUSINESS DAY, ON THE PRECEDING BUSINESS DAY) AFTER YOUR RECEIPT OF THIS
NOTICE, AFTER WHICH DAY THE LETTER OF CREDIT WILL EXPIRE.
Very truly yours,
KEYBANK NATIONAL ASSOCIATION, a
national banking association
By
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Name
-----------------------------------
Title
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cc: Lindal Cedar Homes, Inc.
ACKNOWLEDGMENT:
The undersigned, a _______________________ of U.S. Bank Trust National
Association, a national banking association, Trustee for the above-referenced
Bonds, hereby acknowledges receipt of the foregoing Annex C, and understands
that the Letter of Credit is required to be drawn upon by the Trustee within 25
days (or if such 25th day is not a Business Day, on the preceding Business Day)
of the receipt of this Annex C.
Dated this ____ day of ____________, 200__.
U.S. BANK TRUST NATIONAL ASSOCIATION,
a national banking association, Trustee
Name
-----------------------------------
Title:
-----------------------------------
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 11 of 16
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ANNEX D
NOTICE OF REDUCTION OF STATED AMOUNT
Date: _____________
KeyBank National Association
International Division, 700 Fifth Avenue, 52nd Floor
Mailcode WA-31-10-5260
Seattle, Washington 98104
Attention: Sharlene Sauders
Re: Irrevocable Letter of Credit No. WSL 092425
Issued by KeyBank National Association
Ladies and Gentlemen:
This is to notify you that on the date hereof _____________________
Dollars ($___________) have been defeased, paid, redeemed and/or cancelled in
principal amount of the Washington Economic Development Finance Authority
Nonrecourse Revenue Bonds, 1997 (Lindal Cedar Homes, Inc. Project), Series
A-Taxable and Nonrecourse Revenue Bonds, 1997 (Lindal Cedar Homes, Inc.
Project), Series B-Tax-Exempt (the "Bonds") in accordance with the terms of an
Indenture of Trust dated as of November 1, 1997 by and between the Washington
Economic Development Finance Authority and U.S. Bank Trust National Association
(f/k/a First Trust National Association), a national banking association as
trustee (the "Indenture"). In accordance with the Letter of Credit, we confirm
that the Principal component of the Letter of Credit is reduced to
_____________________ Dollars ($______________) and the Interest component of
the Letter of Credit is reduced to __________________ Dollars ($__________).
Following the redemption or cancellation referred to above, the
aggregate Principal amount of all the Bonds which are Outstanding within the
meaning of the Indenture is $___________. Said amount does not exceed the
Principal component of the Letter of Credit following the reduction thereof
pursuant to the reduction confirmed by this notice.
Any capitalized term used herein and not defined shall have its
respective meaning as set forth in the Letter of Credit or, if not defined
therein, as such term is defined in the Reimbursement Agreement.
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 12 of 16
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The individual signing below hereby represents that he or she is
authorized to sign this document on behalf of the Trustee.
Yours very truly,
U.S. BANK TRUST NATIONAL ASSOCIATION, a
national banking association, as Trustee
By
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Name
-----------------------------------
Title
-----------------------------------
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 13 of 16
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ANNEX E
FORM OF TRANSFER INSTRUCTION
Date: ____________________
KeyBank National Association
International Division, 700 Fifth Avenue, 52nd Floor
Mailcode WA-31-10-5260
Seattle, Washington 98104
Attention: Sharlene Sauders
Re: Irrevocable Letter of Credit No. WSL 092425
Issued by KeyBank National Association
Ladies and Gentlemen:
For value received, the undersigned beneficiary (the "Transferor")
hereby irrevocably transfers to:
(Name of Transferee)
(Address)
(the "Transferee") all rights of the Transferor with respect to the
above-referenced irrevocable Letter of Credit (the "Letter of Credit") including
the right to draw under said Letter of Credit in the amount of the full
unutilized balance thereof. Said Transferee has succeeded the Transferor as
Trustee under that certain Indenture of Trust dated as of November 1, 1997, by
and between the Washington Economic Development Finance Authority and U.S. Bank
Trust National Association (f/k/a First Trust National Association), a national
banking association, as Trustee.
By virtue of this transfer, the Transferee shall have the sole right as
beneficiary of said Letter of Credit, including sole rights relating to any past
or future amendments thereof, whether increases or extensions or otherwise. All
amendments are to be advised directly to the Transferee without necessity of any
consent of or notice to the Transferor.
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 14 of 16
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By its signature below, the Transferee acknowledges that it has duly
succeeded the Transferor as Trustee under the Indenture, and agrees to be bound
by terms of the Indenture as if it were the original Trustee thereunder.
We are delivering herewith the original Letter of Credit and any
subsequent amendments and we ask you to endorse the Letter of Credit and remit
it directly to the Transferee with your customary advice of transfer.
Very truly yours,
U.S. BANK TRUST NATIONAL ASSOCIATION, a
national banking association, as Trustee
By
-----------------------------------
Name
-----------------------------------
Title
-----------------------------------
Signature of the above party, duly authorized
to act on behalf of U.S. Bank Trust National Association,
a national banking association
Authenticated by:
----------------------------------------
[Name and Title]
Acknowledged by [Insert Name of Transferee]
as Transferee and Successor Trustee
By
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[Insert Name and Title of Authorized Officer]
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 15 of 16
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ANNEX F
NOTICE OF ALTERNATE CREDIT FACILITY
Date: ____________________
KeyBank National Association
International Division, 700 Fifth Avenue, 52nd Floor
Mailcode WA-31-10-5260
Seattle, Washington 98104
Attention: Sharlene Sauders
Re: Irrevocable Letter of Credit No. WSL 092425 issued by KeyBank
National Association regarding the Washington Economic Development
Finance Authority Nonrecourse Revenue Bonds, 1997 (Lindal Cedar
Homes, Inc. Project), Series A-Taxable and Nonrecourse Revenue
Bonds, 1997 (Lindal Cedar Homes, Inc. Project), Series B-Tax-Exempt
(the "Bonds")
Ladies and Gentlemen:
Reference is made to the above-referenced irrevocable Letter of Credit
and an Indenture of Trust dated as of November 1, 1997 by and between the
Washington Economic Development Finance Authority and U.S. Bank Trust National
Association (f/k/a First Trust National Association), a national banking
association (the "Indenture").
The undersigned hereby certifies to KeyBank National Association with
respect to the above Letter of Credit, that Lindal Cedar Homes, Inc., a Delaware
corporation, has satisfied the conditions precedent in the Indenture regarding
the acceptance of an Alternate Credit Facility, and that we have accepted such
Alternate Credit Facility in replacement and termination of your Letter of
Credit No. WSL 092425.
We are delivering herewith the original Letter of Credit for
cancellation.
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KeyBank National Association
Irrevocable Letter of Credit No. WSL 092425
Page 16 of 16
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The individual signing below hereby represents that he or she is an
officer of the undersigned and is duly authorized to execute and deliver this
document.
U.S. BANK TRUST NATIONAL ASSOCIATION, a
national banking association (Trustee
and Beneficiary)
By
-----------------------------------
Name
-----------------------------------
Title
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THIS IS THE FINAL PAGE OF
LETTER OF CREDIT NO. S001345