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HomeMy WebLinkAboutCAG1999-0160 - Original - Lehman Brothers Inc. - (LTGO) Limited Tax General Obligation Bonds, 1999 - 03/16/1999 $21,205,000 CITY OF KENT,WASHINGTON LIMITED TAX GENERAL OBLIGATION BONDS, 1999 BOND PURCHASE AGREEMENT March 16, 1999 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 11:59 P.M., Pacific Standard Time, on March 16, 1999; and, if not so accepted, will be subject to withdrawal by the Underwriter upon 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. 3444, adopted by the City Council on March 16, 1999 (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 $21,205,000 Limited Tax General Obligation Bonds, 1999 (the 'Bonds"). The Bonds shall be dated March 15, 1999, 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, 1999, 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). 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 RME ENTBPA 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 March 3, 1999, 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. Promptly after the acceptance hereof by the City, the City shall cause to be delivered to the Underwriter 100 copies of the final Official Statement (together with the appendices attached thereto) dated the date hereof. 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 as 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 2 the statements and information therein contained, in light of the circumstances under which they were made, not misleading. (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. 3 (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. (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 as 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 Closing, 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 they 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 Standard Time, on March 31, 1999, 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 Section 1 hereof by certified check or 4 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. 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 MBIA 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. 5 (f) 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; and (d) 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. 6 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 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. �t-i Richard B. King Senior Vice President Accepted and agreed to as of the date first above written: CITY OF KENT Kin County, Washington 4&L PK ite, Mayor ATTEST: Brenda Jacober, Cle �/ ( SEAL ) 7 Exhibit A DESCRIPTION OF CERTAIN TERMS OF THE BONDS Aggregate Principal Amount: $21,205,000.00 less aggregate original issue discount: (76,853.25) less aggregate underwriter's discount: (149,071.15) Aggregate Purchase Price: $20.979.075.60* *plus accrued interest from March 15, 1999, to the Closing Date. Maturity Dates and Interest Rates: Due Interest December 1 Principal Amount Rate Yield Price 2000 $1,205,000 4.000% 3.350% 101.041 2001 1,250,000 4.000 3.650 100.877 2002 1,300,000 4.000 3.780 100.742 2003 1,345,000 4.000 3.880 100.503 2004 1,400,000 4.000 3.980 100.096 2005 1,455,000 4.000 4.080 99.532 2006 1,525,000 4.100 4.180 99.475 2007 1,145,000 4.200 4.280 99.420 2008 1,195,000 4.300 4.375 99.408 2009 1,245,000 4.400 4.450 99.573 2010 655,000 4.500 4.550 99.545 2011 685,000 4.600 4.650 99.519 2012 715,000 4.700 4.750 99.495 2013 750,000 4.750 4.830 99.159 2019* 5,335,000 5.000 5.100 98.724 *Term Bond - See Mandatory Redemption provisions below. Redemption Provisions: Optional Redemption. The Bonds maturing in the years 2000 through 2009 are not subject to redemption prior to their stated dates of maturity. Bonds maturing on and after December 1, 2010, are subject to optional redemption prior to their stated maturities at the option of the City, on December 1, 2009, or thereafter, in whole or in part (maturities to be selected by the City and by lot within a maturity as the Bond Registrar shall determine) at any time, at the following prices (expressed as a percentage A-1 of the principal amount of the Bonds to be redeemed), plus accrued interest to the date of redemption: Redemption Dates Redemption Prices December 1, 2009 through November 30, 2010 101.00% December 1, 2010 through November 30, 2011 100.50 December 1, 2011 and thereafter 100.00 Mandatory Redemption. The Bonds maturing on December 1, 2019, 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, 2014 $ 785,000 December 1, 2015 825,000 December 1, 2016 865,000 December 1, 2017 905,000 December 1, 2018 955,000 December 1, 2019 (maturity) 1,000,000 A-2