HomeMy WebLinkAboutFI04-184 - Original - Lehman Brothers Inc. - United Tax General Obligation Refunding Bonds - 05/04/2004 {
CITY OF KENT,WASHINGTON
Unlimited Tax General Obligation Refunding Bonds, 2004 (Taxable)
$394659000
BOND PURCHASE AGREEMENT
City of Kent May 4, 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 May 4, 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. 3689, passed by the City Council of the City on May 4, 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 $3,465,000 principal amount
of Unlimited Tax General Obligation Refunding Bonds, 2004 (Taxable) (the `Bonds"). The
Bonds shall be dated their date of initial delivery, shall have the maturity, shall bear interest at
the rate and shall be subject to redemption as set forth in Exhibit A attached hereto, such interest
being 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
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 April 23, 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 15c2-12") (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.
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(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
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 fonn 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 May 19, 2004, 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 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 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 and have underlying
ratings of Aa3 and AA-, respectively.
(h) At or prior to the Closing, the Underwriter shall receive an Escrow
Verification Report by The Arbitrage Group, Inc. as to the sufficiency of the Escrow
Agreement relating to the Bonds.
(i) 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 pnor
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
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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 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 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) any investigation made by or on behalf of the
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Underwriter, (b) delivery of and payment for the Bonds hereunder, and (c) any
termination of this Bond Purchase Agreement.
LEHMAN BROTHERS INC.
e4 --D,
KS
Richard B. King, Senior Vic sident
Accepted and agreed to as of the date first above written:
CITY OF KENT,
Kin unty,Washington
Jim)�ffite, Mayor
ATTEST:
Brenda Jacober, Clerk
( SEAL)
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EXHIBIT A
DESCRIPTION OF CERTAIN TERMS
OF THE BONDS
Aggregate Principal Amount: $3,465,000.00
less aggregate underwriter's discount: (32,917.50)
Aggregate Purchase Price: $3.432.082.50
Maturity Date and Interest Rate:
Due Interest
December 1 Principal Amount Rate Yield Price
2009 $3,465,000 3.46% 3.46% 100%
No Optional Redemption
The Bonds are not subject to optional redemption prior to their fixed dates of maturity.
Mandatory Sinking Fund Redemption Provisions:
The Bonds are Term Bonds and are subject to mandatory sinking fund redemption prior to
maturity, in part, by lot in such manner as the Registrar shall determine on December 1 in the
years 2004 through 2008, inclusive, at 100 percent of the principal amounts set forth in the
following schedule, plus accrued interest, if any, to the date of redemption, from mandatory
sinking fund deposits into the Bond Fund in the principal amounts set forth below:
Mandatory Sinking Fund Mandatory Sinking Fund
Redemption Dates Redemption Amounts
December 1, 2004 $590,000
December 1, 2005 560,000
December 1,2006 580,000
December 1, 2007 560,000
December 1, 2008 575,000
December 1,2009* 600,000
*Maturity
KENT
W A S H I N G T O N
= , ADMINISTRATION May 10, 2004
Mice Martin
Chief Administrative Offer'
CITY CLERK hli gill Tonkin
Brenda Jacaber,CMG
220 Fourth Ave.S. Foster Pepper & Shefelman
Kent,WA WW2_SM 1111 Third Avenue
Phone: 253-8W5725 Suite 3400
Faw=-SW4700 Seattle, WA 98101
Dear Mr. Tonkin:
Enclosed please find a signed copy of the Bond Purchase
Agreement relating to the City of Kent Unlimited Tax General
Obligation Refunding Bonds, 2004 (Taxable)
$3,4659000.
I have retained a copy for the City and will send one to Lehman
Brothers.
If I can be of further assistance, please feel free to call.
Sincerely,
Brenda Jacober, CMC
City Clerk
•
KEN T
WASHINGTON
ADMINISTRATION May 10, 2004
Mike Martin
Chie(Aftinistratim Oftora
a,
CITY CLERK '
Brenda Jacotw,CMC, Mr. Richard King
220 Fourth Ave.S. 701 5 h Avenue
Kent,WA 9eo32-5s95 Suite 7100
Phone. 253-85t3.5725 Seattle, WA 98104
Fax:253-85"700
Dear Mr. King:
Enclosed please find a signed copy of the Bond Purchase
Agreement relating to the City of Kent Unlimited Tax General
Obligation Refunding Bonds, 2004 (Taxable)
$3,465,000.
I have retained a copy for the City and will send one to Foster
Pepper & Shefelman.
If I can be of further assistance, please feel free to call.
Sincerely,
Brenda Jacober, MC
City Clerk