HomeMy WebLinkAboutCAG2002-417 - Original - Lehman Brothers Inc. - Limited Tax General Obligation Bonds, 2002 - 07/16/2002 CITY OF KENT,WASHINGTON
Limited Tax General Obligation Bonds, 2002
$13,685,000
BOND PURCHASE AGREEMENT
City of Kent July 16, 2002
220 Fourth Avenue South
Kent,Washington 98032
Ladies and Gentlemen:
The undersigned, Lehman Brothers Inc. (the "Underwriter") hereby offers to enter into
this Bond Purchase Agreement (the "Bond Purchase Agreement") with the 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 9:00 P.M., Seattle
Time, on July 16, 2002; 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. 3607, passed by the City Council of the City on July 16, 2002 (the "Ordinance")
and the Official Statement(as hereinafter 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 $13,685,000 principal
amount of Limited Tax General Obligation Bonds, Series 2002 (the "Bonds"). The Bonds shall
be dated their date of delivery, 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, 2002, 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.
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 (together with all appendices thereto and with such changes therein and supplements
thereto that are consented to in writing by the Underwriter, 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
July 8, 2002, relating to the Bonds (together with the appendices attached thereto, the
"Preliminary Official Statement") in connection with the public offering of the Bonds.
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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,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.
(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.
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(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 any proposal to amend
or supplement the Official Statement and will not effect any such amendment without the
consent of the Underwriter.
(h) 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.
(i) 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.
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(j) 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.
(k) The City has described to the Underwriter all matters known to the City
that create a probability that litigation of the type described in the previous paragraph
will be commenced against the City.
(1) 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.
(m) Except as may be set forth in the Official Statement, all approvals,
consents, authorizations, certifications and other orders of any governmental authority,
board, agency, instrumentality or commission having jurisdiction, or filings with any
such entities, which are necessary for the acquisition, construction and operation of the
projects to be financed with the proceeds of the Bonds, other than permits that cannot
reasonably be obtained prior to Closing, have been obtained or will be obtained prior to
Closing.
(n) Any certificate or copy of any certificate signed by any official of the City
and delivered to the Underwriter pursuant hereto or in connection herewith shall be
deemed a representation by the City to the Underwriter as to the truth of the statements
made therein.
(o) The City will enter into a written agreement or contract, constituting an
undertaking to provide ongoing disclosure about the City for the benefit of the holders of
the Bonds on or before the Closing Date as required by Section (b)(5)(i) of Rule 15c2-
12; which undertaking shall be part of the Ordinance and in the form and substance as
summarized in the Preliminary Official Statement, with such changes as may be agreed
to in writing by the Underwriter.
5. The Closing. At 8:00 A.M., Seattle Time, on July 30, 2002, 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
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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 documents mentioned in Section 6 hereof shall be made available for inspection
in Seattle, Washington, or at such other location as is mutually agreeable, by the Underwriter at
least one full business day before 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 the time of Closing: (i) the Ordinance shall be in full force and effect
and shall not have been amended, modified or supplemented, except as disclosed or
contemplated by the Official Statement; (ii) the Official Statement shall not have been
amended, modified or supplemented, except in such manner as may have been agreed to
in writing by the Underwriter; and(iii)the City shall perform or shall have performed all
of its obligations required under or specified in this Bond Purchase Agreement, the
Official Statement, and the Ordinance to be performed at or before Closing.
(c) On the Closing Date, no event of default shall have occurred or be
existing under the Ordinance, nor shall any event have occurred which, with the passage
of time or the giving of notice, shall constitute an event of default under the Ordinance,
nor shall the City be in default in the payment of principal or interest on any of its
obligations for borrowed money.
(d) 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; and
as promptly as practicable after the Closing Date, such reasonable number of certified or
conformed copies of the foregoing as the Underwriter may request.
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(e) 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.
(f) 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.
(g) 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.
(h) 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.
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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 and distributing the Preliminary Official
Statement and the 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 writing to Richard
B. King, Senior Vice President, Lehman Brothers Inc., 701 Fifth Avenue, Suite 7101, Seattle,
Washington 98104.
[The remainder of this page has been left blank intentionally]
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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.
Richard B. King, Senior ice President
Accepted and agreed to as of the date first above written:
CITY OF KENT,
County, Washington
or PRO
ATTEST:
Brenda Jacober, Cler
( SEAL)
0A�? t
of wr►s
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EXHIBIT A
DESCRIPTION OF CERTAIN TERMS
OF THE BONDS
Aggregate Principal Amount: $13,685,000.00
plus net original issue premium: 105,556.20
less aggregate underwriter's discount: (98,942.55)
Aggregate Purchase Price: 13.691.613.65
Maturity Dates and Interest Rates:
Due Interest
December 1 Principal Amount Rate Yield Price
2003 $565,000 3.000% 1.700% 101.708
2004 575,000 3.000 1.980 102.315
2005 595,000 4.000 2.470 104.868
2006 620,000 4.000 2.800 104.864
2007 640,000 4.000 3.100 104.391
2008 670,000 4.000 3.410 103.332
2009 695,000 4.000 3.630 102.360
2010 720,000 4.000 3.830 101.199
2011 750,000 4.000 3.960 100.305
2012 785,000 4.000 4.060 99.493
2013 570,000 4.125 4.170 99.592
2014 595,000 4.250 4.300 99.520
$5,905,000, 5.000% Term Bonds due December 1, 2022 @ yield of 5.060%
Redemption Provisions:
Optional Redemption. The Bonds maturing in the years 2003 through 2012, inclusive,
are not subject to redemption prior to their stated dates of maturity. The Bonds maturing on and
after December 1, 2013, are subject to optional redemption prior to their stated maturities at the
option of the City, on December 1, 2012, 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
any time, at par,plus accrued interest to the date of redemption.
A-1
Mandatory Redemption. The Bonds maturing on December 1, 2022, are Term Bonds
and are subject to mandatory redemption prior to maturity, in part, randomly in such manner as
the Bond Registrar shall determine, at 100% of the principal amount thereof plus accrued
interest to the date of redemption, from mandatory sinking fund deposits into the Bond Fund in
the years and principal amounts set forth below:
Mandatory Redemption Dates Mandatory Redemption Amounts
December 1, 2015 $620,000
December 1, 2016 650,000
December 1, 2017 680,000
December 1, 2018 715,000
December 1, 2019 750,000
December 1, 2020 790,000
December 1, 2021 830,000
December 1, 2022 (maturity) 870,000
A-2