HomeMy WebLinkAboutCAG2000-0391 - Original - Lehman Brothers Inc. - $20,145,000 Limited Tax General Obligation Various Purpose and Refunding Bonds, 2000 - 09/19/2000 $2091459000
CITY OF KENT, WASHINGTON
LIMITED TAX GENERAL OBLIGATION VARIOUS PURPOSE AND REFUNDING
BONDs, 2000
BOND PURCHASE AGREEMENT
September 19, 2000
City of Kent
220 Fourth Avenue South
Kent, Washington 98032
Ladies and Gentlemen:
The undersigned (the "Underwriter") hereby offers to enter into this Bond Purchase
Agreement (the "Bond Purchase Agreement") with City of Kent, Washington (the "City"),
which upon the City's acceptance hereof will be binding upon the City and the Underwriter.
This offer is made subject to the City's acceptance by execution of this Bond Purchase
Agreement and its delivery to the Underwriter on or before 10:38 P.M., Pacific Daylight Time,
on September 19, 2000; and, if not so accepted, will be subject to withdrawal by the
Underwriter upon written notice delivered by the Underwriter to the City at any time prior to
the acceptance hereof by the City. All capitalized terms not otherwise defined herein shall be
as defined in Ordinance No. 3524, passed by the City Council on September 19, 2000 (the
"Ordinance"), and the Official Statement(as hereafter defined).
1. Purchase and Sale. Subject to the terms and conditions and upon the basis of
the representations, warranties and agreements hereinafter set forth, the Underwriter hereby
agrees to purchase from the City for offering to the public, and the City hereby agrees to sell to
the Underwriter for such purpose, all (but not less than all) of the City's $20,145,000 Limited
Tax General Obligation Various Purpose and Refunding Bonds, 2000 (the "Bonds"). The
Bonds shall be dated October 1, 2000, shall have the maturities, shall bear interest at the rates
and shall be subject to redemption as set forth in Exhibit A attached hereto, such interest being
payable commencing December 1, 2000, and semiannually thereafter on each June 1 and
December 1 to the date such Bonds mature or are redeemed. The aggregate purchase price of
the Bonds shall be the purchase price set forth in Exhibit A hereto, plus interest accrued (as
described in Exhibit A) on the Bonds from their date to the Closing Date (as hereinafter
defined).
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2. The Official Statement and Authorizing Instruments. The Bonds shall be
otherwise as described in the Official Statement of the City, dated the date hereof, relating to
the Bonds which, together with all appendices thereto and with such changes therein and
supplements thereto that are consented to in writing by the Underwriter, is herein called the
"Official Statement"; and shall be issued and secured under the Ordinance. The City
authorizes the use of the Official Statement in connection with the public offering and sale of
the Bonds. The City also approves the use by the Underwriter, before the date hereof, of the
preliminary Official Statement, dated September 6, 2000, relating to the Bonds, which
together with the appendices attached thereto, is herein referred to as the "Preliminary Official
Statement," in connection with the public offering of the Bonds.
The City hereby authorizes the Underwriter, and the Underwriter agrees at its own
expense, to file one copy of the Official Statement, together with any supplement or
amendment thereto, with at least one of the nationally recognized municipal securities
information repositories designated by the Securities and Exchange Commission (the "SEC")
and two copies of the Official Statement(with any required forms) to the Municipal Securities
Rulemaking Board ("MSRB") or its designee pursuant to MSRB Rule G-36 no later than ten
business days following the date hereof.
3. Public Offering. The Underwriter agrees to make a bona fide public offering
of all the Bonds initially at the public offering prices (or yields) set forth on the inside cover
page of the Official Statement, provided that the initial public offering prices (or yields) may
be changed, from time to time, by the Underwriter as it deems necessary in connection with
the marketing of the Bonds.
4. Representations, Covenants and Warranties. The City represents,
covenants and warrants to the Underwriter that:
(a) The Ordinance and this Bond Purchase Agreement are legal, valid and
binding obligations of the City enforceable against the City in accordance with their
terms except that enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors' rights or
contractual obligations generally and by the exercise of judicial discretion in
appropriate cases and no authorization or approval is required for the execution and
delivery of the Ordinance or this Bond Purchase Agreement by the City, except such
authorizations or approvals as shall have been obtained at or prior to the Closing,
copies of which shall be delivered to the Underwriter at the Closing.
(b) Except for the omission of such information that is dependent upon the
final pricing of the Bonds for completion, all as permitted to be excluded by SEC Rule
15c2-12 ("Rule 15c2-12"), the Preliminary Official Statement was, as of its date, true
and correct in all material respects and did not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the statements and
information therein contained, in light of the circumstances under which they were
made, not misleading.
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(c) The Official Statement is and at all times subsequent hereto up to and
including the Closing Date will be, true and correct in all material respects and does
not and will not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements and information therein contained, in
light of the circumstances under which they were made, not misleading.
(d) The City has duly authorized and approved the execution of the Official
Statement by the Mayor or his designee, including any amendments thereto under the
terms of this Bond Purchase Agreement.
(e) The City covenants and agrees to cause sufficient quantities of the
Official Statement to be delivered to the Underwriter to enable the Underwriter to
comply with the requirements of Rule 15c2-12 and of MSRB Rule G-32, without
charge, within seven business days of the date hereof and, if the Closing Date is less
than seven business days after the date hereof, upon request of the Underwriter, in
sufficient time to accompany any confirmation requesting payment from any
customers of the Underwriter.
(f) The City further covenants and agrees that if, after the date hereof and
until 25 days after the "end of the underwriting period" (as described below), any event
shall occur as a result of which it is necessary to amend or supplement the Official
Statement to make the statements therein, in the light of the circumstances under which
they were made when the Official Statement is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Official Statement to
comply with law, the City shall notify the Underwriter and provide the Underwriter
with such information as it may from time to time request, and to forthwith prepare
and furnish, at its own expense (in a form and manner approved by the Underwriter), a
reasonable number of copies of either amendments or supplements to the Official
Statement so that the statements in the Official Statement as so amended and
supplemented will not, in light of the circumstances under which they were made when
the Official Statement is delivered to a purchaser, be misleading or so that the Official
Statement will comply with applicable law. Unless otherwise notified in writing by the
Underwriter, the City can assume that the "end of the underwriting period" for
purposes of Rule 15c2-12 shall be the Closing Date. If such notice is so given in
writing by the Underwriter, the Underwriter agrees to notify the City in writing
following the occurrence of the "end of the underwriting period" as defined in Rule
15c2-12.
(g) The City will advise the Underwriter promptly of the institution of any
proceedings known to it by any governmental agency prohibiting or otherwise
affecting the use of the Official Statement in connection with the offering, sale or
distribution of the Bonds.
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(h) When delivered to The Depository Trust Company ("DTC") for the
account of the Underwriter and paid for in full in accordance with the terms of this
Bond Purchase Agreement, the Bonds (i) will have been duly authorized, executed,
issued and delivered by the City, and (ii) will constitute valid, legally binding
obligations of the City except that enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting creditors'
rights or contractual obligations generally to the extent constitutionally applicable and
by the exercise of judicial discretion in appropriate cases.
(i) As of the time of acceptance hereof and as of the CIosing, and except as
disclosed in the Official Statement, to the knowledge of the City, no litigation is
pending or is threatened in any court that (i) seeks to restrain or enjoin the issuance,
sale or delivery of any of the Bonds, (ii) contests or affects the validity of the Bonds,
the Ordinance, this Bond Purchase Agreement or the pledge of the City's full faith and
credit to the payment of the Bonds, (iii) contests in any way, the completeness,
accuracy or fairness of the Official Statement, or (iv) in any material respect might
affect adversely the transactions contemplated herein, in the Ordinance or in the
Official Statement.
0) The City will furnish such information, execute such instruments and
take such other action in cooperation with the Underwriter as it may reasonably request
to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and
regulations of such states and other jurisdictions of the United States as the
Underwriter may designate, except the City shall not be required in connection
therewith or as a condition thereof to execute a general consent to service of process or
to qualify to do business as a foreign corporation in any state.
5. The Closing. At 8:00 A.M., Pacific Daylight Time, on October 10, 2000, or at
such other time or on such earlier or later business day as shall have been mutually agreed
upon by the City and the Underwriter (the "Closing Date"), the City will deliver to the
Underwriter the Bonds, duly executed and authenticated, through the facilities of DTC in New
York, New York, or such other place to be mutually agreed upon by the City and the
Underwriter, and shall deliver to the Underwriter the documents mentioned in Section 6
hereof, at such place in Seattle, Washington, as may be mutually agreed upon by the City and
the Underwriter. The Underwriter will accept such delivery and pay the purchase price of the
Bonds as set forth in Exhibit A attached hereto by certified check or by wire in immediately
available federal funds. The payment and delivery of the Bonds, together with the delivery of
the aforementioned documents, is herein called the "Closing". The Bonds shall be made
available to the Underwriter at the offices of DTC at least one business day before the Closing
for purposes of inspection, and are to be left with DTC for safekeeping until release at
Closing. The Underwriter acknowledges that the City is to have no responsibility for such
safekeeping of the Bonds.
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6. Closing Conditions. The Underwriter has entered into this Bond Purchase
Agreement in reliance upon the representations and warranties herein and the performance by
the City of its obligations hereunder, both as of the date hereof and as of the Closing Date.
The Underwriter's obligations under this Bond Purchase Agreement are and shall be subject to
the performance by the City of its obligations to be performed hereunder and under the
documents mentioned in this Section 6, at or prior to the Closing, and also shall be subject to
the following conditions:
(a) The representations and warranties of the City contained herein shall be
true, complete and correct in all material respects at the date hereof and on the Closing
Date, as if made on and as of the Closing Date.
(b) At or prior to the Closing, the Underwriter shall receive three copies of
the final Official Statement manually executed on behalf of the City by the Mayor,
provided, that as promptly as practicable after the Closing Date, such reasonable
number of certified or conformed copies of the foregoing as the Underwriter may
request.
(c) At or prior to the Closing, the Underwriter shall receive the approving
opinions of Foster Pepper & Shefelman, PLLC, Bond Counsel to the City, as to the
Bonds, dated the Closing Date and substantially in the form included in the Official
Statement as Appendix A, and an opinion, dated the Closing Date and addressed to the
Underwriter, of Perkins Coie LLP, counsel to the Underwriter, in a form acceptable to
the Underwriter.
(d) At or prior to the Closing, the Underwriter shall receive a municipal
bond insurance policy issued by MBIA Insurance Corporation ("MBIA") insuring the
payment of the principal of and interest on the Bonds, together with an opinion of
counsel to MBIA regarding (i) the enforceability of the municipal bond insurance
policy and (ii) the adequacy of the information regarding and the municipal bond
insurance policy set forth in the Official Statement.
(e) At or prior to the Closing, the Underwriter shall receive evidence,
satisfactory to the Underwriter, that the Bonds are rated "Aaa" by Moody's Investors
Service, Inc. and "AAA" by Standard &Poor's Ratings Group.
(f) At or prior to the Closing, the Underwriter shall receive verification,
satisfactory to the Underwriter, that the anticipated receipts from the United States
Treasury Obligations -- State and Local Government Series, together with an initial
cash deposit to the escrow, will be sufficient to pay, when due, the principal and
interest on the Refunded Bonds(as described in the Ordinance).
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(g) At or prior to the Closing, the Underwriter shall receive such additional
certificates, instruments and other documents as the Underwriter may reasonably deem
necessary to evidence the truth and accuracy as of the time of the Closing of the
representations of the City and the due performance or satisfaction by the City at or
prior to such time of all agreements then to be performed and all conditions then to be
satisfied by the City.
7. Termination of Contract. In recognition of the desire of the City and the
Underwriter to effect a successful public offering of the Bonds, the Underwriter shall have the
absolute right to terminate this Bond Purchase Agreement by notification to the City if at any
time at or prior to the Closing an "event" (as defined below) occurs that, in the reasonable
judgment of the Underwriter, materially and adversely affects (i) the market price or
marketability of the Bonds or(ii) the ability of the Underwriter to enforce contracts for sale of
the Bonds. If the City is unable to satisfy the conditions contained in this Bond Purchase
Agreement or if the obligations of the Underwriter shall be terminated for any reason
permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate
and neither the Underwriter nor the City shall be under a further obligation hereunder, except
as set forth in Section 8 hereof. For purposes of this Section 7, an "event" shall mean any of
the following: legislation is introduced or enacted by a governmental body with authority over
the City; a court decision is rendered; a local, national or international calamity or crisis
occurs; a general banking moratorium is declared anywhere in the United States of America;
trading is suspended or materially restricted on any national securities exchange;the ratings on
any City obligations, including the Bonds, are lowered or the possibility of such action is
publicly announced; the Official Statement is amended without the Underwriter's consent; a
material misstatement or omission in the Official Statement is discovered after the Official
Statement is distributed; or any other event of similar consequence or nature.
8. Expenses. The City shall pay or cause to be paid from the proceeds of the
Bonds or other funds of the City available to it, the expenses incident to the performance of its
obligations hereunder, including, but not limited to: (a) the fees and disbursements of the Bond
Registrar in connection with the issuance of the Bonds; (b) the fees and disbursements of
Bond Counsel and any other experts or consultants retained by the City in connection with the
transactions contemplated hereby; (c) the cost of obtaining ratings on the Bonds; (d) the cost
of obtaining bond insurance; and (e) the cost of printing the Preliminary Official Statement
and the final Official Statement.
The Underwriter shall pay the cost of delivering the purchase price of the Bonds in
immediately available federal funds and all other expenses it incurs in connection with their
public offering and distribution of the Bonds, including the fees and disbursements of its
counsel.
9. Notice. Any notice or other communication to be given to the City under this
Bond Purchase Agreement may be given by delivering the same in writing to City of Kent,
220 Fourth Avenue South, Kent, Washington 98032, Attention: Finance Division Director
with a copy to the City Attorney, and any notice or other communication to be given to the
Underwriter under this Bond Purchase Agreement may be given by delivering the same in
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writing to Richard B. King, Senior Vice President, Lehman Brothers, 701 Fifth Avenue,
Suite 7101, Seattle, Washington 98104.
10. Entire Agreement. This Bond Purchase Agreement shall constitute the entire
agreement between the City and the Underwriter and is made solely for the benefit of the City
and the Underwriter (including the successors or assigns of the Underwriter). This Bond
Purchase Agreement shall become effective when accepted by the City in writing as heretofore
specified, shall constitute the entire agreement between the City and the Underwriter and may
not be amended or modified except in writing. No other person shall acquire or have any right
hereunder by virtue hereof. All the City's representations, warranties and agreements in this
Bond Purchase Agreement shall remain operative and in full force and effect,regardless of(a)
any investigation made by or on behalf of the Underwriter, (b) delivery of and payment for the
Bonds hereunder, and (c) any termination of this Bond Purchase Agreement.
LEHMAN BROTHERS INC.
a.tip II.I�a,
Richard B. King
Senior Vice President
Accepted and agreed to as of the date first above written:
CITY OF KENT
King County, Washington
......�.�-mayor Ae4
ATTEST:
cLetJ G�z/-end
Brenda Jacober, Cl
( SEAL)
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.
Exhibit A
DESCRIPTION OF CERTAIN TERMS
OF THE BONDS
Aggregate Principal Amount: $20,145,000.00
plus aggregate original issue premium: 85,939.90
less aggregate underwriter's discount: (140,410.65)
Aggregate Purchase Price: $20.090.529.25*
*plus accrued interest from October 1, 2000, to the Closing Date.
Maturity Dates and Interest Rates:
Due Interest
December 1 Principal Amount Rate Yield Price
2000 $ 130,000 4.50% 4.30% 100.018
2001 450,000 4.40 4.45 99.940
2002 475,000 4.50 4.54 99.914
2003 495,000 4.50 4.57 99.792
2004 1,810,000 5.00 4.62 101.411
2005 1,905,000 5.00 4.66 101.532
2006 2,010,000 5.25 4.71 102.844
2007 1,665,000 5.25 4.76 102.931
2008 1,570,000 5.00 4.82 101.194
2009 1,000,000 5.00 4.88 100.870
2009 1,145,000 5.50 4.88 104.521
2010 1,015,000 5.50 4.93 104.499
$6,475,000, 5.375% Term Bonds due December 1, 2020 @ yield of 5.63%
Redemption Provisions:
Optional Redemption. The Bonds maturing in the years 2001 through 2010, inclusive,
are not subject to redemption prior to their stated dates of maturity. Bonds maturing on and
after December 1, 2011, are subject to optional redemption prior to their stated maturities at
the option of the City, at any time on December 1, 2010 or thereafter, in whole or in part
(maturities to be selected by the City and randomly within a maturity as the Bond Registrar
shall determine) at the following prices (expressed as a percentage of the principal amount of
the Bonds to be redeemed),plus accrued interest to the date of redemption:
Redemption Dates Redemption Prices
December 1, 2010 through November 30, 2011 101%
December 1, 2011 and thereafter 100
A-1
Mandatory Redemption. The Bonds maturing on December 1, 2020, are Term Bonds
and are subject to mandatory redemption prior to maturity, in part, by lot in such manner as
the Bond Registrar shall determine, at 100 percent of the principal amount thereof plus
accrued interest to the date of redemption, from mandatory deposits into the Bond Fund in the
years and principal amounts set forth below:
Mandatory Sinking Fund Mandatory Sinking Fund
Redemption Dates Redemption Amounts
December 1, 2011 $505,000
December 1, 2012 535,000
December 1, 2013 560,000
December 1, 2014 590,000
December 1, 2015 625,000
December 1, 2016 655,000
December 1, 2017 695,000
December 1, 2018 730,000
December 1, 2019 770,000
December 1, 2020(maturity) 810,000
A-2