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HomeMy WebLinkAboutFI04-136 - Original - Lehman Brothers, Inc. - Limited Tax General Obligation Refunding Bonds, 2004 - 03/30/2004 CITY OF KENT,WASHINGTON Limited Tax General Obligation Refunding Bonds,2004 $2392809000 BOND PURCHASE AGREEMENT City of Kent March 16, 2004 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 March 16, 2004; 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. 3682, passed by the City Council of the City on March 16, 2004 (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 $23,280,000 principal amount of Limited Tax General Obligation Refunding Bonds, 2004 (the `Bonds"). The Bonds shall be dated their date of initial 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 E payable commencing December 1, 2004, 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 k 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 March 5, 2004, relating to the Bonds (together with the appendices attached thereto, 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, 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 ISc2-12") (and except for information in "APPENDIX D - BOOK- ENTRY SYSTEM") 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 (except the information under the caption BOND INSURANCE and the information in"APPENDIX D—BOOK-ENTRY SYSTEM," as to which the City makes no representation) 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. 2 (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 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 3 generally to the extent constitutionally applicable and by the exercise of judicial discretion in appropriate cases. 0) 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 March 30, 2004, or at such other time or on such earlier or later business day as shall have been mutually agreed upon by the City 4 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 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. 5 (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 Lukins& Annis,P.S., 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 Financial Guaranty Insurance Company (the "Insurer") insuring the payment of the principal of and interest on the Bonds, together with an opinion of counsel to the Insurer regarding (i) the enforceability of the municipal bond insurance policy and (ii) the adequacy of the information regarding the Insurer 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 govenimental 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. 6 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 a the cost of delivering the purchase rice of the Bonds in PY g P P 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 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. 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) 7 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. "N A� —�-.'K'. Richard B. King, Senior a resident Accepted and agreed to as of the date first above written: CITY OF KENT, King County, Washington Ji 'te, Mayor ATTEST: Brenda Jacober, Clerk ( SEAL) l II I EXHIBIT A DESCRIPTION OF CERTAIN TERMS OF THE BONDS Aggregate Principal Amount: $23,280,000.00 plus original issue premium: 2,192,871.60 Less original issue discount (128,364.10) less aggregate underwriter's discount: (164,822.40) Aggregate Purchase Price: $25.179.685.10 Maturity Dates and Interest Rates: Due Interest December 1 Principal Amount Rate Yield Price 2004 $ 550,000 2.000% 1.10% 100.598 2005 210,000 2.000 1.25 101.234 2006 855,000 5.000 1.46 109.233 2007 1,135,000 4.000 1.82 107.702 2008 1,155,000 4.000 2.17 108.082 2009 820,000 4.000 2.45 108.155 2010 1,225,000 5.000 2.71 113.882 2011 1,650,000 5.000 2.97 113.827 2012 1,480,000 5.000 3.18 113.691 2013 1,605,000 5.000 3.32 113.793 2014 1,875,000 5.000 3.47 113.011 2015 1,750,000 5.250 3.58 114.125 2016 1,625,000 5.250 3.66 113.395 2017 1,445,000 5.250 3.76 112.490 2018 1,265,000 5.250 3.84 111.772 2019 1,28%000 4.000 4.20 97.716 2020 2,030,000 4.000 4.28 96.682 2021 1,325,000 4.125 4.32 97.602 Redemption Provisions: The Bonds maturing in the years 2004 through 2013, inclusive, are not subject to redemption prior to their stated dates of maturity. The Bonds maturing on and after December 1, 2014, are subject to optional redemption prior to their stated maturities at the option of the City, on June 1, 2014, 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.