Ord 93-172
ORDINANCE NO. 93-172
AN ORDINANCE of the City Council of Federal Way,
Washington, providing for the issuance of
limited tax general obligation refunding
bonds of the City in the aggregate principal
amount of $l2,105,000 to refund certain
outstanding general obligation bonds of the
City; fixing the date, form, terms,
maturities and covenants of said bonds;
authorizing the purchase of certain
obligations with the bond proceeds and the
appointment of a refunding agent to hold such
obligations in escrow; and authorizing the
sale of such bonds.
WHEREAS,
the City of Federal Way, Washington
(the "City")
issued its $12,500,000 principal amount of Limited Tax General
Obligation Bonds, 1991
(the "199l Bonds") pursuant to Ordinance
No. 91-83 of the City, and $l2,500,OOO principal amount of such
bonds are currently outstanding; and
WHEREAS, for the purpose of realizing a savings to the City
and its taxpayers, the City deems it necessary and advisable to
advance refund the 1991 Bonds maturing on and after December 1,
2002
(the "Refunded Bonds"), by calling such bonds for payment
and redemption on December l,
200l,
and to issue a series of
refunding bonds for such purpose; and
WHEREAS,
in order to effect such refunding in the manner
that will be most advantageous to the City and its taxpayers, it
is hereby found necessary and advisable that certain "Acquired
Obligations"
(hereinafter identified)
be purchased out of the
proceeds of sale of said refunding bonds and that a Refunding
COpy
Agent be appointed to hold the Acquired Obligations in escrow for
the purposes authorized herein; and
WHEREAS,
in order to
refund the Refunded Bonds
the Ci ty
intends to issue limited tax general obligation refunding bonds
in the amount of $12,l05,OOO; and
WHEREAS, the city has received an offer from Piper Jaffray
Inc. to purchase such bonds;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
WASHINGTON ORDAINS as follows:
Section l.
Definitions.
As used in this ordinance, unless
a different meaning clearly appears from the context:
"Acquired Obligations" means the Government Obligations now
or hereafter acquired by the City to effect the refunding of the
Refunded Bonds.
"Arbitrage
Rebate
and
Accounting
Certificate"
means
the
document of that name, executed and delivered by the City on the
date of closing and delivery of the Bonds.
"Bond
Fund"
means
the
Limited
Tax
General
Obligation
Refunding
Bond
Fund,
1993
established
pursuant
to
Section 4
hereof.
"Bond Register"means the records maintained on behalf of
the City containing the name and mailing address of each owner of
the
Bonds
or
the
nominee
of
such
owner,
and
such
other
information as the Bond Registrar shall determine.
"Bond Registrar" means the fiscal agency of the State of
Washington in either Seattle, Washington, or New York, New York,
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for the purposes of registering and authenticating the Bonds,
maintaining the Bond Register, effecting transfer of ownership of
the Bonds, and paying interest on and principal of the Bonds.
"Bond Year" means each one-year period
(or shorter period
from the date of issue)
that ends at the close of business on
November 30.
"Bonds" means the $l2,lOS,OOO Limited Tax General Obligation
Refunding
Bonds,
1993
of
the
City
issued
pursuant
to
this
ordinance.
"Code" means the Internal Revenue Code of 1986, as amended,
and shall include all applicable regulations and rulings relating
thereto.
"Computation Date" means the Installment Computation Date or
the Final Computation Date.
"Council"
means
the
general
legislative
authority of
the
Ci ty as the same shall be duly and regularly constituted from
time to time.
"Escrow Agreement" means the Agreement between the City and
the Refunding Agent pursuant to which the Refunded Bonds will be
refunded.
"Final Computation Date" means the date that the last Bond
is discharged.
A Bond is discharged on the date that all amounts
due under the terms of the Bond are actually and unconditionally
due if cash is available at the place of payment and no interest
accrues with respect to the Bonds after such date.
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"Government Obligations" has the meaning given to such term
in RCW Chapter 39.53,
as the same may be amended from time to
time.
"Installment Computation Date" means
the last day of the
fifth Bond Year and of each succeeding fifth Bond Year.
"l991
Bonds"
means
the
$12,500,000
City
of
Federal
Way
Limited Tax General Obligation Bonds, 1991, issued under date of
February l, 1991, pursuant to Ordinance No. 9l-83 of the City.
"1993 Advance Refunding Fund" means the fund of that name
created by Section 9 of this ordinance.
"Nonpurpose Receipts" means,
in general,
any receipt with
respect to an investment allocated to the Bonds.
types of receipts are specifically included:
The following
1.
Actual
Receipts.
Any
amount
actually
or
constructively received with respect to an investment.
Actual
receipts may not be reduced by sales commissions, administrative
expenses or similar expenses.
2.
Disposition Receipts.
An
amount
determined by
treating an investment that ceases to be allocated to the Bonds
(other than by reason of a sale or retirement)
as if sold for
fair market value on the date that the investment ceases to be
allocated to the Bonds.
3.
Installment Date Receipts.
The fair market value
(or,
for
fixed
rate
investments,
present
value)
of
all
investments allocated to the Bonds at the close of business on
any Computation Date.
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4.
Imputed Receipts.
Any receipts that are required
to be imputed and taken into account pursuant to Section l.148-5T
of
the
Temporary
Income
Tax
Regulations
or
any
successor
Temporary or Final Income Tax Regulations.
"Nonpurpose Payments" means,
in general,
any payment with
respect to an investment allocated to the Bonds.
The following
types of payments are specifically included:
1.
Direct Payments.
The amount of gross proceeds of
the
Bonds
directly used
to
purchase
the
investment.
Direct
payments
do
not
include
brokerage
commissions,
administrative
expenses or similar expenses.
2.
Constructive Payments.
The fair market value (as
of the date of allocation to the Bonds)
of any investment that
was not directly purchased with gross proceeds of the Bonds, but
which is allocated to the Bonds.
3.
Payments of Rebatable Arbitrage.
Any payment of
rebatable arbitrage if such payment is made no later than the due
date for such payment.
"Refunded Bonds" means the 1991 Bonds maturing on and after
December l,
2002
to
be
called
for
redemption
and
paid
and
redeemed pursuant to this ordinance.
"Refunding
Agent"
means
the
refunding
agent
appointed
pursuant to Section 9 of this ordinance.
Section
2.
Authorization
of
Bonds.
For
the
purpose
of
providing funds necessary to. advance refund on December l, 2001,
the 1991 Bonds maturing on and after December l, 2002, the City
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shall issue and sell the Bonds in the aggregate principal amount
of $l2,lO5,OOO.
The Bonds
shall be
designated
the
"ci ty of
Federal Way, Washington, Limited Tax General Obligation Refunding
Bonds,
1993,"
shall
be
dated May 1,
1993,
shall
be
in
the
denomination of $5,000 each or any integral multiple of $5,000,
provided that no Bond shall represent more than one maturity,
shall be registered as to both principal and interest, and shall
bear
interest
from May l,
1993,
until
the
Bond bearing
such
interest has been paid or its payment duly provided for, payable
December 1, 1993, and semiannually on the first days of each June
and December thereafter.
The Bonds shall be numbered separately
in the manner and with any additional designation as the Bond
Registrar deems necessary for purposes
of
identification,
and
shall mature on December 1 of the years and in the amounts and
bear interest at the rates set forth below:
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Maturity Dates Amounts Interest Rates
1994 $35,000 2.70%
1995 40,000 3.45
1996 40,000 3.95
1997 40,000 4.30
1998 45,000 4.50
1999 45,000 4.70
2000 45,000 4.90
200l 50,000 5.10
2002 310,000 SolO
2003 325,000 5.20
2004 350,000 5.30
2005 375,000 5.40
2006 400,000 5.45
2007 420,000 5.60
2008 445,000 5.65
2009 475,000 5.70
2010 510,000 5.70
2011 540,000 5.70
20l7 4,050,000 5.90
202l 3,565,000 5.85
Upon surrender thereof to the Bond Registrar, the Bonds are
interchangeable for other Bonds in any authorized denomination of
an equal aggregate principal amount and of the same interest rate
and maturity.
The Bonds may be transferred only if endorsed in
the
manner
provided
thereon
and
surrendered
to
the
Bond
Registrar. Such exchange or transfer shall be without cost to the
owner or transferee.
The owner of any Bond redeemed in part will receive, upon
surrender of such Bond, a new Bond in principal amount equal to
the unredeemed portion of the Bond so surrendered.
The
City
hereby
specifies
and
adopts
the
system
of
registration approved by the State Finance Committee of the State
of Washington and appoints the fiscal agency of the State of
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Washington as the Bond Registrar.
The City shall cause the Bond
Register to be maintained by the Bond Registrar.
So long as any
Bonds
remain
outstanding,
the
Bond
Registrar
shall
make
all
necessary provisions to permit the exchange or registration or
transfer of Bonds at its principal office.
The Bonds shall be
transferable only upon the Bond Register by the registered owner
thereof in person or by his or her attorney duly authorized in
writing,
upon
surrender
thereof,
together
with
a
written
instrument of transfer satisfactory to the Bond Registrar duly
executed by the registered owner or his or her duly authorized
attorney.
Upon the transfer of any such Bond, the Bond Registrar
shall
issue
in the name
of the
transferee,
in an authorized
denomination or denominations,
a new Bond or Bonds of the same
aggregate principal amount and maturity as the surrendered Bonds.
Both principal of and interest on the Bonds shall be payable
in lawful money of the United States of America.
Interest on the Bonds
shall be paid by checks or drafts
mailed
to
owners
of
Bonds
at
the
addresses
for
such
owners
appearing on the Bond Register on the 15th day of the calendar
month preceding the interest payment date.
Principal
of
the
Bonds shall be payable at maturity or on such dates as may be
fixed for prior redemption upon presentation and surrender of the
Bonds
by
the
owners
at
ei ther principal
office
of
the
Bond
Registrar in Seattle, Washington, or New York, New York, at the
option of such owners.
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Section 3.
Redemption Prior to Maturity.
A.
Optional Redemption.
The City hereby reserves the
right
to
redeem
the
outstanding
Bonds
maturing
on
or
after
December l, 2004,
in whole at any time on or after December 1,
2003, or in part (maturities to be selected by the City and by
lot within each maturity in such manner as the Bond Registrar
shall determine) on December l, 2003, or on any interest payment
date thereafter,
at par plus accrued interest to the date of
redemption.
B.
Mandatory Redemption.
If not redeemed under the
optional
redemption
provisions
set
forth
above,
the
Bonds
maturing on December 1, 20l7
(which shall be deemed to be term
bonds), shall be redeemed prior to maturity by lot (or paid at
maturity), not later than December 1 in the years 20l2 through
20l7, inclusive, and in the principal amounts as set forth below,
upon
written
notice
as
provided
below,
by
payment
of
the
principal
amount
thereof,
together wi th
the
interest
accrued
thereon to the date fixed for redemption.
Year
Amount
20l2
2Ðl3
20l4
20l5
2016
2017*
$570,000
610,000
650,000
695,000
740,000
785,000
*Maturity
If
not
redeemed
under
the
optional
redemption
provisions set forth above,
the Bonds maturing on December 1,
202l (which shall be deemed to be term bonds), shall be redeemed
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prior to maturity by lot
(or paid at maturity), not later than
December 1 in the years 2018 through 2021, inclusive, and in the
principal amounts as set
forth below,
upon written notice as
provided below,
by payment
of
the principal
amount
thereof,
together with the interest accrued thereon to the date fixed for
redemption.
Year
Amount
2018
20l9
2020
2021*
$835,000
890,000
945,000
895,000
*Final Maturity
c.
Notice of Redemption.
Unless waived by any owner
of Bonds to be redeemed, official notice of any such redemption
shall be given by the Bond Registrar on behalf of the City by
mailing a copy of an official redemption notice by first class
mail, postage prepaid, at least 30 days and not more than 60 days
prior to the date fixed for redemption to the registered owner(s)
of the Bond or Bonds to be redeemed at the address shown on the
Bond Register or at such other address as is furnished in writing
by such registered owner to the Bond Registrar.
All official notices of redemption shall be dated and shall
state:
(l)
(2)
the redemption date,
the redemption price,
(3)
if less than all outstanding Bonds are to be
redeemed,
the
identification
(and,
in
the
case
of
partial
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redemption, the respective principal amounts) of the Bonds to be
redeemed,
(4 )
that on the redemption date the redemption
price will become due and payable upon each such Bond or portion
thereof called for redemption,
and that interest thereon shall
cease to accrue from and after said date, and
(5)
the
place
where
such
Bonds
are
to
be
surrendered for payment of the redemption price, which place of
payment shall be the principal office of the Bond Registrar.
On or prior to any redemption date, the City shall deposit
with the Bond Registrar an amount of money sufficient to pay the
redemption price of all or portions of Bonds which are to be
redeemed on that date.
The requirements of this section shall be
deemed to be complied with when notice is mailed as provided,
whether or not it is actually received by the owner of any Bond.
D.
Effect of Call.
Official
notice
of
redemption
having been given as aforesaid, the Bonds or portions of Bonds to
be redeemed shall, on the redemption date, become due and payable
at the redemption price therein specified,
and from and after
such date
(unless the City shall default in the payment of the
redemption price) such Bonds or portions of 'Bonds shall cease to
bear interest.
Upon surrender of such Bonds for redemption in
accordance with said notice, such Bonds shall be paid by the Bond
Registrar at the redemption price.
Installments of interest due
on or prior to the redemption date shall be payable as herein
provided for payment of interest.
All Bonds which have been
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redeemed shall be canceled and destroyed by the Bond Registrar
and shall not be reissued.
E.
Additional Redemption Notice.
In addition to the
foregoing notice,
further notice
shall be
gi ven by the Bond
Registrar on behalf of the City as set forth below, but no defect
in said further notice nor any failure to give all or any portion
of
such
further
notice
shall
in
any
manner
defeat
the
effectiveness of a call for redemption if notice thereof is given
as above described.
(1 )
Each
further
notice
of
redemption
given
hereunder shall contain the information required above for an
official notice of redemption plus (i) the CUSIP numbers, if any,
of all Bonds being redeemed;
(ii) the date of issue of the Bonds
as originally issued;
(iii) the rate of interest borne by each
Bond being redeemed;
(iv) the maturity date of each Bond being
redeemed;
and
(v) any other descriptive information needed to
identify accurately the Bonds being redeemed.
(2)
Each further notice of redemption may be sent
at least 35 days before the redemption date by registered or
certified mail or overnight deli very service to all registered
securities
depositories
then
in
the
business
of
holding
substantial amounts of obligations of types comprising the Bonds
and shall be sent to Moody's Investors Service at its office in
New York,
New York and to
one
or more
national
information
services that disseminate notices of redemption of obligations
such as the Bonds.
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(3)
Upon the payment of the redemption price of
Bonds
being
redeemed,
each
check
or
other
transfer
of
funds
issued for such purpose
shall bear the CUSIP number
(if any)
identifying, by issue and maturity, the Bonds being redeemed with
the proceeds of such check or other transfer.
The foregoing notice provisions of this section,
including
but not limited to the information to be included in redemption
notices and the persons designated to receive notices,
may be
amended by additions, deletions and changes in order to maintain
compliance with duly promulgated regulations and recommendations
regarding notices of redemption of municipal securities.
F.
Open Market
Purchases.
The
City
reserves
the
right
to
purchase
any
of
the
Bonds
in
the
open market
for
retirement.
Section
4.
Bond
Fund.
There
is
hereby
created
in
the
office of the Finance Director of the City a special fund to be
known as the "Limited Tax General Obligation Refunding Bond Fund,
1993"
(the
"Bond Fund")
to be drawn upon
for
the purpose
of
paying the principal of and interest on the Bonds.
The accrued
interest on the Bonds shall be deposited in the Bond Fund at the
time of delivery of the<Bonds and shall be applied to the payment
of interest on the Bonds.
The taxes hereafter levied for the
purpose of paying principal of and interest on the Bonds and
other funds to be used to pay the Bonds shall be deposited in the
Bond Fund no later than the date such funds are required for the
payment of principal of and interest on the Bonds.
Money in the
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Bond Fund not needed to pay the interest or principal next coming
due may temporarily be deposited in such institutions or invested
in such obligations as may be lawful for the investment of City
money.
Section 5.
Pledge of Taxation and Credit.
The City hereby
irrevocably covenants and agrees for as long as any of the Bonds
are outstanding and unpaid that each year it will include in its
budget and levy an ad valorem tax upon all the property within
the
City
subject
to
taxation
in
an
amount
which
will
be
sufficient,
together with all other revenues and money of the
City legally available for such purposes, to pay the principal of
and interest on the Bonds as the same shall become due.
All of
such taxes so collected and any other money to be used for such
purposes shall be paid into the Bond Fund.
The City hereby irrevocably pledges
tha t the
annual
tax
provided
for
herein
to
be
levied
for
the
payment
of
such
principal and interest shall be within and as a part of the tax
levy permitted to cities without a vote of the people, and that a
sufficient portion of each annual levy to be levied and collected
by the City prior to the full payment of the principal of and
interest on the Bonds will be and is hereby irrevocably set
aside, pledged and appropriated for the payment of the principal
of and interest on the Bonds.
The full faith, credit and resources of the City are hereby
irrevocably pledged for the annual levy and collection of said
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taxes and for the prompt payment of the principal of and interest
on the Bonds as the same shall become due.
Section 6.
Tax-Exemption.
The City shall comply with the
provisions of this section unless,
in the written opinion of
nationally-recognized bond counsel to the City, such compliance
is
not
required
in
order
to
maintain
the
exemption
of
the
interest on the Bonds from federal income taxation.
The City hereby covenants that it will not make any use of
the proceeds from the sale of the Bonds or any other funds of the
City which may be deemed to be proceeds of such Bonds pursuant to
Section 148 of the Code and the applicable regulations thereunder
which will cause the Bonds to be "arbitrage bonds" wi thin the
meaning of said Section and said regulations.
The City will
comply with the applicable requirements of Section 148 of the
Code (or any successor provision thereof applicable to the Bonds)
and the applicable regulations thereunder throughout the term of
the Bonds.
The City further covenants that it will not take any action
or permit any action to be taken that would cause the Bonds to
constitute
"private activity bonds"
under Section 141
of the
COdé.
Section 7.
Arbitrage Rebate.
A.
General Rule.
The City will pay to the United
States of America
in accordance wi th the provisions
of
this
section at least 90% of the rebatable arbitrage with respect to
the Bonds as of each Installment Computation Date,
100% of the
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rebatable arbitrage with respect to the Bonds as of the Final
Computation Date and any income attributable to such rebatable
arbitrage, unless the City otherwise meets the arbitrage rebate
requirements of the United States of America.
B.
Computation of Rebatable Arbitrage.
The rebatable
arbitrage with respect to the Bonds computed in accordance with
the Arbitrage Rebate and Accounting Certificate and, as of each
Computation Date, will be the excess of:
1.
The future value of all Nonpurpose Receipts
with respect to the Bonds; over
2.
The future value of all Nonpurpose Payments
with respect to the Bonds.
The future value will be computed as of each Computation Date.
C.
Payment Procedure.
1.
The payment of rebatable arbitrage due as of
each Installment Computation Date will be paid no later than the
date that is 60 days after the Installment Computation Date.
2.
The payment of rebatable arbitrage due as of
the Final Computation Date will be paid no later than the latest
of (a) the date that is 60 days after the Final Computation Date,
(b) the date that is 8 months after the date of issuance of the
Bonds, or (c) the date 60 days after the earlier of (i) the date
that the City no longer expects to spend gross proceeds of the
Bonds within six months of the date of issuance of the Bonds or
(ii) l2 months after the date of issuance of the Bonds.
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3.
Each payment of rebatable arbitrage will be
made
to
the
Internal
Revenue
Service
Center,
Philadelphia,
Pennsylvania 19225 and will be accompanied by IRS Form 8038-T.
D.
Other
Methodology.
Notwithstanding
this
Section 7,
payments
of
rebatable
arbitrage
will
be
made
in
accordance with instructions provided by bond counsel to the City
if necessary to maintain the federal income tax exemption for
interest payments made on the Bonds.
Section
8.
Defeasance.
In
the
event
that money and/or
Government Obligations maturing or having guaranteed redemption
prices at the option of the holder at such time or times and
bearing interest to be earned thereon in amounts
(together with
such money, if any) sufficient to redeem and retire part or all
of
the
Bonds
in
accordance
with
their
terms
are
hereafter
irrevocably set aside in a special account and pledged to effect
such redemption and retirement, then no further payments need be
made into the Bond Fund or any account therein for the payment of
the principal of and interest on the Bonds so provided for,
and
such Bonds shall then cease to be entitled to any lien, benefit
or security of this ordinance,
except the right to receive the
funds so set aside and pledged, and such Bonds shall no longer be
deemed to be outstanding hereunder.
Section 9.
Advance Refunding Fund and Disposition of Bond
Proceeds.
There is hereby created a special fund of the City to
be held by the Refunding Agent to be known as the "1993 Limited
Tax General Obligation Advance Refunding Fund," which fund is to
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93105/04
be drawn upon for the sole purpose of paying the principal of and
interest of the Refunded Bonds and of paying costs related to the
refunding of the Refunded Bonds, including the costs of issuance
of the Bonds.
The proceeds of sale of the Bonds
(exclusive of accrued
interest thereon, if any, which shall be paid into the Bond Fund)
shall be credited to the 1993 Advance Refunding Fund.
Money in
the 1993 Advance Refunding Fund shall be used immediately upon
receipt thereof to defease the Refunded Bonds by providing for
the
payment
of
the
principal
of
and
interest
thereon
as
hereinafter set forth in this section.
The City shall defease
the Refunded Bonds and discharge such obligations by the use of
money in the 1993 Advance Refunding Fund to purchase Acquired
Obligations bearing such interest and maturing as to principal
and interest in such amounts and at such times which, together
with any necessary beginning cash balance, will provide for the
payment of:
(a)
Interest that will become due and payable on or
before December l, 200l, on the Refunded Bonds;
(b)
The
redemption
price,
including
any
applicable
premium, payable on December 1, 200l,
for the principal of the
Refunded Bonds.
Such Acquired Obligations shall be purchased at a yield not
greater
than
the
yield permitted by provisions
of
the
Code
relating to acquired obligations in connection with refunding
bond issues.
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In order to carry out the advance refunding and defeasance
of the Refunded Bonds, the Finance Director is hereby authorized
to appoint as Refunding Agent a bank or trust company qualified
by law to
beginning
perform the
duties
of
the
Refunding Agent.
cash
balance
and
Acquired
Obligations
shall
Any
be
irrevocably deposited with the Refunding Agent.
Any amounts
described in subparagraphs (a) and (b) of this section that are
not provided for in full by such beginning cash balance and the
purchase and deposit of the Acquired Obligations described in
this section shall be provided for by the irrevocable deposit of
the necessary amount out of the proceeds of sale of the Bonds or
any other money of the City legally available therefor with the
Refunding Agent.
The proceeds of the Bonds remaining in the 1993
Advance
Refunding
Fund
after
acquisition
of
the
Acquired
Obligations
and
provision
for
the
necessary
beginning
cash
balance shall be utilized to pay expenses of the acquisition and
safekeeping of
the Acquired Obligations
and
expenses
of
the
issuance
of
the
Bonds.
The
Ci ty may,
from
time
to
time,
transfer,
or cause
to be transferred,
from the
1993 Advance
Refunding Fund any money not thereafter required for the purposes
set forth in subparagraphs (a) and (b) above or for the payment
of expenses.
The City reserves the right to substitute other
securities for the Acquired Obligations, in the event it may do
so pursuant
to
the Code,
upon compliance with
the
following
conditions:
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93I05IO<
(1 )
Such
substitution
is
accomplished
pursuant
to
resolution of the Council, which may be adopted either before or
after the delivery of the Bonds.
(2)
The
securities
to
be
substituted
are
direct
obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by,
the United States of
America
and
bank
certificates
of
deposit
secured
by
such
obligations.
(3)
Such securities bear such interest and mature at
such times and in such amounts as to fully replace the Acquired
Obligations
for which they are
substituted,
and
to provide,
together with Acquired Obligations and cash remaining,
for the
payment of the amounts specified in subparagraphs (a)
and
(b)
above.
(4)
Prior to effecting any such substitution, the City
shall have obtained and delivered to the Refunding Agent:
(i)
A letter addressed to the City and to the
Refunding Agent by a nationally recognized firm of certified
public accountants verifying the computations that indicate that
the Acquired Obligations,
the Substitute Obligations and other
money to be held by' the Refunding Agent for purposes of making
the payments described in this section will be adequate,
after
the proposed substitution, to make all payments described in this
section; and
(ii)
An opinion
addressed to
the
City and
the
Refunding Agent from nationally recognized bond counsel that such
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930'05104
substitution of obligations will not cause the interest on the
Bonds to become subject to federal income taxes and will not
cause
any Bond to become
an
"arbitrage bond"
as
defined
in
Section l48 of the Code.
Section 10.
Redemption of the Refunded Bonds.
The Ci ty
shall irrevocably set aside sufficient funds out of the purchase
of Acquired Obligations from proceeds of the Bonds, together with
any necessary beginning cash balance,
to pay interest due and
payable on the Refunded Bonds on and before December l, 200l and
redeem the Refunded Bonds on December 1, 2001.
The
City
hereby
irrevocably
calls
for
redemption
on
December l,
200l,
the
Refunded Bonds
in
accordance
with
the
provisions of Ordinance No. 91-83 of the City,
authorizing the
redemption and retirement of the Refunded Bonds prior to their
fixed maturities.
Such defeasance and call
for redemption of the Refunded
Bonds shall be irrevocable after the final establishment of the
1993
Advance
Refunding
Fund
and
delivery
of
the
Acquired
Obligations
to
the
Refunding
Agent,
except
as
provided
in
Section 9 hereof relating to the substitution of securities.
The Refunding Agent is hereby authorized and directed to
provide
for
the
giving
of
notice
of
the
redemption
of
the
Refunded Bonds in accordance with Ordinance No. 9l-83.
The costs
of giving such notice shall be an expense of the City.
The Refunding Agent is hereby authorized and directed to pay
to the fiscal agency or agencies of the State of Washington sums
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sufficient
to
pay,
when
due,
the
payments
specified
in
subparagraphs (a)
and
(b)
of Section 9 of this ordinance.
All
such sums shall be paid from the money and Acquired Obligations
deposited with the Refunding Agent pursuant to Section 9 of this
ordinance and the income therefrom and proceeds thereof.
All
such sums so paid shall be credited to the 1993 Advance Refunding
Fund.
All
money
and Acquired
Obligations
deposited
with
the
Refunding Agent and any income therefrom shall be held, invested
and applied in accordance with the provisions of this ordinance
and with the laws of the State of Washington for the benefit of
the City and owners of the Refunded Bonds.
The City will take such actions as are found necessary to
see that all necessary and proper fees, compensation and expenses
of the Refunding Agent for refunding the Refunded Bonds shall be
paid when due.
The proper officers and agents of the City are
directed to obtain from the Refunding Agent an agreement setting
forth
the
duties,
obligations
and
responsibilities
of
the
Refunding Agent in connection with the redemption and retirement
of the Refunded Bonds as provided herein and stating that such
provisions for the payment of the fees, compensation and expenses
of such Refunding Agent are satisfactory to it.
In order to carry out the purposes of the preceding section
of
this
ordinance
and
this
section,
the
Finance
Director
is
authorized and directed to execute and deliver to the Refunding
Agent a copy of such agreement when the provisions thereof have
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93.<>5104
been fixed and determined.
A form of such agreement is attached
hereto as Exhibit A and incorporated herein.
Section
11.
Findings
of
Savings
and
Defeasance.
The
Council hereby finds and determines that the issuance and sale of
the Bonds at this time will effect a savings to the City and its
taxpayers. In making such finding and determination, the Council
has
given
consideration
to
the
interest
on
and
the
fixed
maturities of the Bonds
and the Refunded Bonds,
the costs of
issuance
of
the
Bonds
and
the
known
earned
income
from
the
investment
of
the
proceeds
of
sale
of
the
Bonds
pending
redemption and payment of the Refunded Bonds.
The
Council
hereby
also
finds
and
determines
that
the
Acquired Obligations to be deposited with the Refunding Agent and
the income therefrom, together with any necessary beginning cash
balance,
are sufficient to redeem the Refunded Bonds and will
discharge and satisfy the obligations of the City under Ordinance
No. 9l-83 of the City authorizing the issuance of the 1991 Bonds
and
the
pledges
of
the
City
therein.
Immediately upon
the
delivery of such Acquired Obligations to the Refunding Agent and
the deposit of any necessary beginning cash balance, the Refunded
Bonds
shall
be
deemed not
to be
outstanding
under
Ordinance
No. 9l-83 of the City and shall cease to be entitled to any lien,
benefi t or
securi ty under
such ordinance
except
the
right
to
receive payment from the Acquired Obligations and beginning cash
balance so set aside and pledged.
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93I05IO4
Section 12.
Lost, Stolen or Destroyed Bonds.
In case any
Bond or Bonds
shall
be
lost,
stolen or destroyed,
the
Bond
Registrar may execute and deliver a new Bond or Bonds of like
date, number and tenor to the owner thereof upon the owner paying
the expenses and charges of the City and the Bond Registrar in
connection therewith and upon his or her filing with the Bond
Registrar evidence satisfactory to the Bond Registrar that such
Bond was actually lost,
stolen or destroyed and of his or her
ownership thereof,
and upon furnishing the City with indemnity
satisfactory to the City.
Section
l3.
Form of Bonds
and Registration Certificate.
The Bonds shall be in substantially the following form:
UNITED STATES OF AMERICA
NO.
$
STATE OF WASHINGTON
CITY OF FEDERAL WAY
LIMITED TAX GENERAL OBLIGATION REFUNDING BOND, 1993
Maturity Date:
CUSIP No.
Interest Rate:
Registered Owner:
Principal Amount:
THE CITY OF FEDERAL WAY, a municipal corporation organized
and existing under and by virtue of the laws of the State of
Washington (the "City"), hereby acknowledge itself to owe and for
value received promises to pay, but only from the sources and as
hereinafter provided, to the Registered Owner identified above,
or registered assigns, on the Maturity Date identified above, the
Principal Amount indicated above and to pay interest thereon from
the Bond Fund from May l, 1993, or the most recent date to which
interest has been paid or duly provided for, at the Interest Rate
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03I05IO<
set forth above, payable December 1, 1993, and semiannually
thereafter on the first days of each June and December until such
principal sum is paid or payment has been duly provided for.
Both principal of and interest on this bond are payable in
lawful money of the United States of America. Interest shall be
paid by mailing a check or draft to the Registered Owner or
assigns at the address shown on the Bond Register as of the 15th
day of the month prior to the interest payment date. Principal
shall be paid to the Registered Owner or assigns upon
presentation and surrender of this bond at the principal office
of the fiscal agency of the State of Washington in either
Seattle, Washington, or New York, New York (collectively the
"Bond Registrar").
Reference is hereby made to additional provisions of this
bond set forth on the reverse side hereof and such additional
provisions shall for all purposes have the same effect as if set
forth on this space. Capitalized terms used on the face and the
reverse side hereof have the meanings given such terms in the
Bond Ordinance (as hereinafter defined).
This bond shall not be valid or become obligatory for any
purpose or be entitled to any security or benefit under the Bond
Ordinance until the Certificate of Authentication hereon shall
have been manually signed by the Bond Registrar or its duly
authorized agent.
It is hereby certified and declared that this bond and the
bonds of this issue are issued pursuant to and in strict
compliance with the Constitution and laws of the State of
Washington and ordinances of the City and that all acts,
conditions and things required to be done precedent to and in the
issuance of this bond have happened, been done and performed.
IN WITNESS WHEREOF, the City of Federal Way, Washington, has
caused this bond to be executed by the facsimile signature of its
Mayor and attested by the city Clerk, and a facsimile corporate
seal of the City to be imprinted hereon 'as of the 1st day of May,
1993.
CITY OF FEDERAL WAY, WASHINGTON
By
Mayor
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03I05IO<
ATTEST:
City Clerk
CERTIFICATE OF AUTHENTICATION
Date of Authentication:
This bond is one of the bonds described in the within
mentioned Bond Ordinance and is one of the Limited Tax General
Obligation Refunding Bonds, 1993 of the City of Federal Way,
Washington, dated May 1, 1993.
WASHINGTON STATE FISCAL
AGENCY, Bond Registrar
By
Authorized Signer
ADDITIONAL BOND AND REDEMPTION PROVISIONS
This bond is one of an authorized issue of bonds of the City
of like date, tenor and effect, except as to number, amount, rate
of interest and date of maturity in the aggregate principal
amount of $12,105,000 and is issued pursuant to Ordinance No.
of the City passed May 4, 1993 (the "Bond Ordinance") to refund
certain outstanding limited tax general obligation bonds of the
City.
This bond and the bonds of this issue are payable solely
from the special fund of the City known as the Limited Tax
General Obligation Refunding Bond Fund, 1993 (the "Bond Fund")
created by the Bond Ordinance. The City has irrevocably
obligated and bound itself to levy taxes, in an amount permitted
to cities without a vote, upon all of the taxable property within
the City in amounts sufficient, together with other money legally
available therefor, to pay and secure the payment of the
principal and interest on such bonds.
The City hereby covenants and agrees with the owner of this
bond that it will keep and perform all the covenants of this bond
and the Bond Ordinance to be kept and performed by the City, and
reference is hereby made to the Bond Ordinance for a complete
statement of such covenants.
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93/05104
The pledge of taxes and other revenues of the City under the
Bond Ordinance may be discharged at or prior to the maturity or
redemption of the bonds of this issue upon the making of
provision for the payment thereof on the terms and conditions set
forth in the Bond Ordinance.
The City has reserved the right to redeem the outstanding
bonds maturing on or after December 1, 2004, in whole at any time
on or after December l, 2003, or in part (maturities to be
selected by the District and by lot within each maturity), on
December 1, 2003, or on any interest payment date thereafter, at
par plus accrued interest to the date of redemption.
If not redeemed under the optional redemption provisions set
forth above, the Bonds maturing on December l, 20l7, shall be
redeemed prior to maturity by lot (or paid at maturity), not
later than December 1 in the years 2012 through 20l7, inclusive,
and in the principal amounts as set forth below, by payment of
the principal amount thereof, together with the interest accrued
thereon to the date fixed for redemption.
Year
Amount
20l2
2013
20l4
20l5
2016
2017*
$570,000
610,000
650,000
695,000
740,000
785,000
*Maturity
If not redeemed under the optional redemption provisions set
forth above, the Bonds maturing on December l, 2021, shall be
redeemed prior to maturity by lot (or paid at maturity), not
later than December 1 in the years 2018 through 2021, inclusive,
and in the principal amounts as set forth below, by payment of
the principal amount thereof, together with the interest accrued
thereon to the date fixed for redemption.
Year
Amount
2018
20l9
2020
202l*
$835,000
890,000
945,000
895,000
*Final Maturity
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Notice of any call for redemption shall be given not less
than 30 nor more than 60 days prior to the date fixed for
redemption by first class mail, postage prepaid, to the
registered owner of any bond to be redeemed at the address
appearing on the Bond Register. The requirements of the Bond
Ordinance shall be deemed to have been complied with when notice
is mailed as herein provided, regardless of whether or not it is
actually received by the owner of any bond.
Interest on any bonds so called for redemption shall cease
on such redemption date unless the same shall not be paid in full
upon presentation made pursuant to such call. The Bond Registrar
shall not be required to register, transfer or exchange any bond
called for redemption wi thin l5 days next preceding the date
fixed for such redemption.
Portions of any bond, in installments of $5,000 or any
integral multiple of $5,000, may also be redeemed in accordance
with the schedule set forth above. If less than all of the
principal amount of any bond is redeemed, upon surrender of such
bond at the principal office of the Bond Registrar there shall be
issued to the registered owner, without charge therefor, for the
then unredeemed balance of the principal amount thereof, a new
bond or bonds, at the option of the registered owner, of like
maturity and interest rate in any of the denominations authorized
by the Bond Ordinance.
This bond is transferable only on the records maintained by
the Bond Registrar for that purpose upon the surrender of this
bond by the registered owner hereof or his/her duly authorized
agent and only if endorsed in the manner provided hereon, and
thereupon a new fully registered bond of like principal amount,
maturity and interest rate shall be issued to the transferee in
exchange therefor. Such exchange or transfer shall be without
cost to the registered owner or transferee. The City and Bond
Registrar may deem the person in whose name this bond is
registered to be the absolute owner hereof for the purpose of
receiving payment of the principal of and interest on the bond
and for any and all other purposes whatsoever.
The Bond Registrar is not required to issue, register,
transfer or exchange any of the bonds during a period beginning
at the opening of business on the 15th day of the month next
preceding any interest payment date and ending at the close of
business on the interest payment date, or, in the case of any
proposed redemption of the bonds, after the mailing of notice of
the call of such bonds for redemption.
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NMNO1LDOC
""""""
The following abbreviations, when used in the inscription on
the face of the within bond, shall be construed as though they
were written out in full according to applicable laws or
regulations.
TEN COM -
TEN ENT -
JT TEN -
as tenants in common
as tenants by the entireties
as joint tenants with right of
tenants in common
(TRANSFER)
survivorship and not as
UNIF GIFT
MIN ACT -
(Cust)
under Uniform Gifts (Transfer) to Minors Act
Custodian
(Minor)
(State)
Additional
listed above.
abbreviations
may
also
be
used
although
not
(Form of Assignment)
ASSIGNMENT
FOR VALUE RECEIVED,
and transfers unto
the undersigned hereby sells,
assigns
PLEASE INSERT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
OF TRANSFEREE
(Please print or typewrite name and address, including zip code
of Transferee)
the within bond and all rights
irrevocably constitute and appoint
of
transfer said bond on
registration thereof,
premises.
thereunder
and
does
hereby
, or its successor, as Agent to
the books kept by the Bond Registrar for
wi th full power of substitution in the
DATED:
SIGNATURE GUARANTEED:
NOTE: The signature of this
Assignment must correspond with the
name of the registered owner as it
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NMNO'lDOC
.3105/04
appears upon the face of the within
bond in every particular, without
alteration or enlargement or any
change whatever.
Section
14.
Execution.
The
Bonds
shall
be
executed on
behalf of the City with the manual or facsimile signature of its
Mayor, shall be attested by the manual or facsimile signature of
the City Clerk and shall have the seal of the City impressed or a
facsimile thereof imprinted thereon.
Only
such Bonds
as
shall
bear
thereon
a
Certificate
of
Authentication
in
the
form
hereinbefore
recited,
manually
executed by the Bond Registrar or its designated agent, shall be
valid or obligatory for any purpose or entitled to the benefits
of this ordinance.
Such Certificate of Authentication shall be
conclusive evidence that the Bonds
so authenticated have been
duly
executed,
authenticated
and
delivered
hereunder
and
are
entitled to the benefits of this ordinance.
In case either of the officers of the City who shall have
executed the Bonds shall cease to be such officer or officers of
the City before the Bonds so signed shall have been authenticated
or delivered by the Bond Registrar, or issued by the City, such
Bonds may nevertheless be authenticated, delivered and issued and
upon
such
authentication,
delivery and
issuance,
shall
be
as
binding upon the City as though those who signed the same had
continued to be such officers of the City.
Any Bond may also be
signed and attested on behalf of the City by such persons as at
the actual date of execution of such Bond shall be the proper
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03I05IO4
officers of the City although at the original date of such Bond
any such person shall not have been such officer.
Section 15.
Bond Registrar.
The Bond Registrar shall keep,
or cause to be kept,
at its principal corporate trust office,
sufficient records for the registration and transfer of the Bonds
that shall at all times be open to inspection by the City.
The
Bond
Registrar
is
authorized,
on
behalf
of
the
City,
to
authenticate
and
deliver
Bonds
transferred
or
exchanged
in
accordance with the provisions of such Bonds and this ordinance
and to carry out all of the Bond Registrar's powers and duties
under this ordinance.
The
Bond
Registrar
shall
be
responsible
for
its
representations contained in the Certificate of Authentication on
the Bonds. The Bond Registrar may become the owner of Bonds with
the same rights it would have if it were not the Bond Registrar,
and to the extent permitted by law, may act as depositary for and
permit any of its officers or directors to act as a member of, or
in any other capacity with respect to, any committee formed to
protect the rights of registered owners of the Bonds.
Section l6.
Sale of Bonds.
The sale of the Bonds to Piper
Jaffray Inc.
in accordance with its offer dated May 4,
1993,
a
copy of which
is
attached hereto
and incorporated herein,
is
hereby authorized and approved.
Section 17.
Approval
of
Preliminary
Official
Statement.
The
City
hereby
approves
the
Preliminary
Official
Statement
presented herewith to the Council and authorizes the distribution
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NMNO1LOOC
03105.<>4
of
the
Preliminary
Official
Statement
by
the
underwriter
in
connection
with
the
offering
of
the
Bonds.
Pursuant
to
Securities and Exchange Commission Rule l5c2-l2 ("Rule 15c2-l2"),
the City hereby deems the Preliminary Official Statement as final
as of its date except for the omission of information dependent
upon
the
pricing
of
the
issue
and
the
completion
of
the
underwriting agreement, such as offering prices, interest rates,
selling
compensation,
aggregate
principal
amount,
principal
amount per maturity, delivery date, and other terms of the Bonds
dependent on the foregoing matters. The City agrees to cooperate
with the underwriter to deliver or cause to be delivered, within
seven business days from the date of the purchase contract and in
sufficient
time
to
accompany
any
confirmation
that
requests
payment from any customer of the underwriter, copies of a final
official
statement
in
sufficient
quantity
to
comply
with
paragraph (b) (4)
of Rule l5c2-12 and the rules of the Municipal
Securities Rulemaking Board.
Section 18.
Authorization of Temporary Bond.
Until the
definitive Bonds are prepared, the City may, if deemed necessary
by the Finance Director, utilize a temporary Bond, which shall be
typewritten and shall be delivered to the purchaser or purchasers
of the Bonds in lieu of definitive Bonds, but subject to the same
provisions,
limi tations and conditions as the defini ti ve Bonds.
The temporary Bond shall be dated May l,
1993,
shall be in the
denomination of $l2,lO5,OOO, shall be substantially of the tenor
of such definitive Bonds, but with such omissions, insertions and
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03I05IO4
variations as may be appropriate to temporary bonds, and shall be
signed by the Mayor and City Clerk.
Upon surrender to the City of a temporary Bond,
the City,
wi thout charge to the holder,
shall execute and deliver to the
holder of such temporary Bond,
in exchange therefor, definitive
Bonds
of
the
same
maturities,
interest
rates,
redemption
provisions and aggregate principal amount as the temporary Bond,
if any, surrendered. Until so exchanged, a temporary Bond shall
be in all respects entitled to the same benefit and security as
definitive Bonds executed and issued pursuant to this ordinance.
Section
19.
Severability.
If
any
one
or
more
of
the
covenants
or
agreements
provided
in
this
ordinance
to
be
performed on the part of the City shall be declared by any court
of
competent
jurisdiction
to
be
contrary
to
law,
then
such
covenant or covenants, agreement or agreements, shall be null and
void and shall be deemed separable from the remaining covenants
and agreements in this ordinance and shall in no way affect the
validi ty of the other provisions of this ordinance or of any
Bonds.
Section
20.
Effective
Date.
This
ordinance
shall
be
effective from and after its passage, approval and publication as
required by law.
-33-
NMNO1LDOC
03I05IO<
PASSED by the Council of the City of Federal Way, Washington
at a regular meeting held this 4th day of May, 1993.
CITY OF FEDERAL WAY, WASHINGTON
~âf? ~1Q
fAT;L' b
I~ty Clerk
APPROVED 1\5 TO FORM, .
~ 0,\)/\
. . orney ~
r~ Co~
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EXHIBIT A
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, made and entered into as of the lst
day of May 1993, by and between the City of Federal Way,
Washington (the "City") and
Washington (the "Refunding Agent");
WIT N E SSE T H:
Section 1. Recitals. The City has heretofore issued and
sold its limited tax general obligation bonds under date of
February l, 1991, pursuant to Ordinance No. 9l-83 of the City
(the "l99l Bonds"). The City by Ordinance No. , passed by
the City Council on , 1993 (the "Ordinance"), has
determined to pay and redeem on December l, 200l the 1991 Bonds
maturing on and after December 1, 2002 (the "Refunded Bonds") by
the issuance of a series of refunding bonds in the aggregate
principal amount of $ to be issued under date of
May 1, 1993 (the "Bonds"). Reference is made to the Ordinance
for a detailed description of the plan of refunding.
Section 2. provisions for Refunding the Refunded Bonds. To
accomplish the refunding of the Refunded Bonds in the manner set
forth in the Ordinance, the City hereby agrees that,
simultaneously with the issuance and delivery of the Bonds, it
will irrevocably deposit with the Refunding Agent (subject to the
right to substitute obligations under the conditions provided in
the Ordinance and hereunder), in trust for the security and
benefit of the owners of the Refunded Bonds, and the Refunding
Agent hereby acknowledges receipt of such obligations or evidence
thereof or subscription rights thereto ("Acquired Obligations")
as described in Annex A attached hereto, and a beginning cash
balance of $------, to provide for the payment of:
(a) Interest that will become due and payable on or
before December 1, 2001 on the Refunded Bonds.
(b) The redemption price payable for the principal of
the Refunded Bonds on December 1, 2001.
The sufficiency of such Acquired Obligations and cash has
been verified by independent certified public
accountants.
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NMNO1L.DOC
03I05IO4
Such Acquired Obligations shall be paid for out of the
proceeds of sale of the Bonds, and out of other money of the City
now on hand and available.
On or before the delivery of the Bonds to the initial
purchasers thereof, the City agrees that it will cause to be
delivered to the Refunding Agent statements setting forth the
maturity schedule of the Refunded Bonds by CUSIP number, amount,
date of maturity and interest rates, the amount of interest to be
paid on each semiannual interest payment date, and the amount of
the principal to be paid on the date that the Refunded Bonds are
to be redeemed.
The City by the Ordinance has directed to be set aside
sufficient money to purchase Acquired Obligations that will be
used to pay interest on the Refunded Bonds, as the same falls
due. The City by the Ordinance has irrevocably called the
Refunded Bonds for redemption and prepayment on December 1, 2001.
Said provisions for defeasance, payment, redemption and
prepayment of the Refunded Bonds shall be irrevocable upon the
final establishment of the escrow account and delivery of the
Acquired Obligations to the Refunding Agent. The Refunding
Agent, in concert with the Finance Director of the City, shall
provide for publication and mailing of the proper notices of such
redemption and prepayment in accordance with the provisions of
the Ordinance. The cost of such publication and mailing shall be
paid by the City.
Section 3. Investments and Disbursements. The City
reserves the right at or prior to delivery of the Bonds to
substitute for a temporary period until receipt of Acquired
Obligations on Annex A other direct United States obligations or
cash for any of the Acquired Obligations if (a) in the opinion of
Preston Thorgrimson Shidler Gates & Ellis, bond counsel for the
City, the Bonds will remain exempt from federal income taxation
under Section 103 of the Internal Revenue Code of 1986, as
amended, and (b) such substitution shall not impair the timely
payment of the amounts required to be paid under the plan of
refunding specified in Section 2 hereof. Acquired Obligations
substituting for securities held, when received, will be received
free with income accrued from the date of closing and delivery of
the Bonds. Upon that event, the substituted securities will be
returned to the supplier with accrued interest or any interest
received. The Refunding Agent shall present for payment on the
due dates thereof any Acquired Obligations so deposited with it
and shall apply the proceeds derived therefrom and the interest
paid thereon in accordance with the provisions of the Ordinance
and this agreement. Moneys shall be transferred, in a timely
manner, by the Refunding Agent to the fiscal agency or agencies
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of the state of Washington, as paying agent and registrar of the
Refunded Bonds (the "Bond Registrar"), in amounts sufficient for
the payment specified in subparagraphs (a) and (b) of Section 2
of this agreement.
Section 4. Substitution of Different Acquired Obligations
or Other Investments. The City reserves the right to substitute
from time to time for the Acquired Obligations initially
purchased in accordance with Section 2 hereof, or for obligations
purchased under this section, other direct obligations of the
United states of America (the "Substitute Obligations"). Prior
to effecting any such substitution, the City shall have obtained
and delivered to the Refunding Agent:
(a) A letter addressed to the City and to the
Refunding Agent by a nationally recognized firm of certified
public accountants verifying the computations which indicate that
the Acquired Obligations, the Substitute Obligations and other
money to be held by the Refunding Agent for purposes of making
the payments described in Section 2 will be adequate, after the
proposed substitution, to make all payments described in
Section 2; and
(b) An opinion addressed to the City and the Refunding
Agent from nationally recognized bond counsel that such
substitution of obligations will not cause the interest on the
Bonds to become subj ect to federal income taxes and will not
cause any Bond to become an "arbitrage bond" as defined in
Section 148 of the Internal Revenue Code of 1986, as amended, and
the applicable regulations and rulings promulgated thereunder (as
the same may be amended to the extent such amendments apply to
the Bonds) .
Section 5. Reinvestment of Proceeds of Acquired and/or
Substi tute Obligations. The proceeds (principal and interest)
and reinvestment proceeds of any Acquired Obligations and/or
Substitute Obligations purchased by the Refunding Agent in
accordance with this agreement that are not needed wi thin five
business days of the receipt thereof to make a payment described
in Section 2 shall be reinvested by the Refunding Agent (on such
date of receipt), subject to the following conditions:
(a) Except as provided in subsection (c) below, the
proceeds of Acquired Obligations and/or Substitute Obligations
shall be reinvested in direct obligations of the United States of
America, at not to exceed 0% yield rate, or such higher yield as
may be directed by letter of instructions from the City to the
Refunding Agent, but if the composite yield on the directed
investment together with past investments made pursuant to this
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subsection would exceed 0%, such letter of instructions shall be
based upon and accompanied by the opinion of nationally
recognized bond counsel approving reinvestment of such proceeds
at such higher yield. The letter of instructions shall contain a
verification of such composite yield.
(b) The obligations in which such proceeds are
reinvested shall mature on the date or dates directed by the
City, but not later than the next succeeding date the principal
thereof is needed to make one or more payments described in
Section 2.
(c) If such proceeds, together with other funds
remaining in trust, are insufficient to reinvest in the smallest
denomination of such obligations or are required sooner than the
shortest maturity available for such obligations, then those
proceeds and funds shall be converted to United states currency
and retained until required to make a payment described in
Section 2, or until sufficient money is accumulated to permit the
investment thereof.
(d) "Yield," as used in paragraphs (a) and (b) of this
section means that yield computed in accordance with and
permitted by the Internal Revenue Code and regulations and ruling
promulgated thereunder applicable to the Bonds and the trust
under this agreement so as to retain the exemption from federal
income taxation of the interest on the Bonds.
When and if interest from such investment is received by the
Refunding Agent it shall be disbursed to the City for deposit in
the 1993 Advance Refunding Fund; provided that at all times there
shall remain cash and direct obligations of the United States
maturing at such times and bearing interest at such rates to
provide for timely payment of the redemption price of and
interest on the Refunded Bonds in accordance with Section 2
hereof.
Section 6. Custody and Safekeeping of Obligations and
Notice of Insufficiency. On or before July l5 and January 15 of
each year, the Refunding Agent shall render a statement as of the
first day of the month to the Bond Registrar and City, which
statement shall set forth the cash and Acquired Obligations
and/or Substitute Obligations held by the Refunding Agent, any of
such Acquired Obligations and/or Substitute Obligations that have
matured and the amounts received by the Refunding Agent by reason
of such maturity, the interest earned on any of such Acquired
Obligations or Substitute Obligations, a list of any investments
or reinvestments made by the Refunding Agent in other obligations
and the interest and/or principal derived therefrom, the amounts
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of cash delivered to the Bond Registrar and the dates of the use
thereof for the payment of the principal of and interest on the
Refunded Bonds as the same shall become due and payable, and any
other transactions of the Refunding Agent pertaining to its
duties and obligations as set forth herein.
All Acquired Obligations, Substitute Obligations, money and
investment income deposited with or received by the Refunding
Agent pursuant to this agreement shall be trust funds for the
specific purposes set forth herein and may not be used for any
other purpose. The Refunding Agent shall be liable for the
preservation and safekeeping thereof; provided, however, it shall
not be responsible for any depreciation in value of any of the
Acquired Obligations or Substitute Obligations.
In the event the maturing principal of and interest on the
Acquired Obligations, any Substitute Obligations and other money
held by the Refunding Agent pursuant to this agreement shall be
insufficient or shall be projected to become insufficient at any
time in the future to make a payment described in Section 2, the
Refunding Agent shall give the City prompt notice of such
insufficiency or projected insufficiency.
Section 7. Duties and Obligations of the Refunding Agent.
The duties and obligations of the Refunding Agent shall be as
prescribed by the provisions of this agreement and the Ordinance,
and the Refunding Agent shall not be liable except for the
performance of its duties and obligations as so specifically set
forth and to act in good faith in the performance thereof, and no
implied duties or obligations shall be incurred by the Refunding
Agent other than those specified herein.
The Refunding Agent may consult with counsel of its choice,
and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or
not taken or suffered by it hereunder in good faith and in
accordance with the opinion of such counsel.
Section 8. Compensation of Refunding Agent. The
arrangements heretofore made for the payment to the Refunding
Agent of the sum of $ for services rendered by it
(except for costs of publication of redemption notices) pursuant
to the provisions of this agreement are satisfactory to it and
such payment is inclusive of all fees, compensation and expenses
of the Refunding Agent. Such arrangement for compensation and
expenses is intended as compensation for the ordinary services as
contemplated by this agreement, and in the event that the
Refunding Agent renders any service hereunder not provided for in
this agreement, or the Refunding Agent is made a party to or
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intervenes in any litigation pertaining to this agreement or
institutes interpleader proceedings' relative hereto, the
Refunding Agent shall be compensated reasonably by the City for
such extraordinary services and reimbursed for all fees, costs,
liability and expenses (including reasonable attorneys' fees)
occasioned thereby.
Section 9. Surplus Money in Escrow. If at any time during
the term of the escrow created pursuant to this agreement, there
are Acquired Obligations, Substitute Obligations and/or money
held by the Refunding Agent in excess of that required to make
all of the payments described in Section 2 in accordance with the
initial verification or any subsequent verification furnished to
the Refunding Agent pursuant to Section 4 (a) hereof, when due,
considering the earnings to be realized on the investment of such
obligations, and the City requests that such surplus obligations
or the proceeds thereof or such surplus money be returned by the
Refunding Agent to the city or requests that such surplus be
applied to any fees of the Refunding Agent, then the Refunding
Agent shall do so at the times requested by the City. Before the
return of any surplus to the City, the Refunding Agent may
require the City to furnish the Refunding Agent a verification or
opinion of the amount of such surplus satisfactory to the
Refunding Agent.
Section lO. Amendments to Agreement. The Refunding Agent
and the City recognize that the owners from time to time of the
Refunded Bonds have a beneficial interest in the Acquired
Obligations, the Substitute Obligations and money to be held by
the Refunding Agent as herein provided. Therefore, this
agreement shall not be subject to revocation or amendment except
for the purpose of (a) clarifying any ambiguity herein; or (b)
making a change requested by the City, and except if accompanied
by:
(l) For purpose of clarifying an ambiguity, an opinion
addressed to the City and the Refunding Agent from nationally
recognized bond counsel to the effect that such requested change
does not detrimentally affect the owners of the Refunded Bonds;
(2)
For purpose of making a change requested by the
City:
(i) A letter addressed to the City and the
Refunding Agent by a nationally recognized firm of certified
public accountants verifying the computations which indicate that
the Acquired Obligations, Substitute Obligations and other money
to be retained by the Refunding Agent for the purpose of making
the payments described in section 2 will be adequate, after
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making the change
payments; and
requested by
the
city,
to
make
all
such
(ii) An opinion addressed to the city and the
Refunding Agent from nationally recognized bond counsel to the
effect that the change requested by the city will not cause the
interest on the Bonds to become subject to federal income
taxation and will not cause any Bond to become an "arbitrage"
bond, as defined in the Internal Revenue Code of 1986, as
amended, and the applicable rulings and regulations promulgated
thereunder (as the same may be amended, to the extent such
amendments apply to the Bonds).
Section ll. Limitation of Refunding Agent Duties. None of
the provisions contained in this agreement shall require the
Refunding Agent to use or advance its own funds in the
performance of any of its duties or the exercise of any of its
rights or powers hereunder. The Refunding Agent shall be under
no liability for the payment of interest on any funds or other
property received by it hereunder except to the extent the
Refunding Agent is required by the express terms of this
agreement to invest such funds.
The Refunding Agent's liabilities and obligations in
connection with this agreement are confined to those specifically
described herein. The Refunding Agent is authorized and directed
to comply with the provisions of this agreement and is relieved
from all liability for so doing notwithstanding any demand or
notice to the contrary by any party hereto. The Refunding Agent
shall not be' responsible or liable for the sufficiency,
correctness, genuineness or validity of the Acquired Obligations
or the Substitute Obligations deposited with it; the performance
or compliance by any party other than the Refunding Agent with
the terms or conditions of any such instruments; or any loss
which may occur by reason of forgeries, false representations or
the exercise of the Refunding Agent's discretion in any
particular manner unless such exercise is negligent or
constitutes willful misconduct.
Section l2. City Deposit of Additional Sums.
agrees that it will promptly deposit with the Refunding
additional sum or sums of money specified in the
Agent's notice of insufficiency given pursuant to
hereof.
The City
Agent the
Refunding
section 6
Section l3. Remission of Funds When Refunded Bonds are Paid
in Full. At such time as the Refunding Agent shall have received
the representation of the city that all of the payments described
in Section 2 have been made and the confirmation of such
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representation by the Bond Registrar, together with such other
evidence of such payment as shall be satisfactory to the city and
the Refunding Agent, the Refunding Agent shall deliver forthwith
or remit to the city any remaining Acquired Obligations, any
Substitute Obligations and money held pursuant to this agreement.
Section l4. Successor Refunding Agent. The obligations
assumed by the Refunding Agent pursuant to this agreement may be
transferred by the Refunding Agent to a successor if (a) the
Refunding Agent has presented evidence satisfactory to the City
and its nationally recognized bond counsel that the successor
meets the requirements of RCW 39.53.070, as now in effect or
hereafter amended; (b) the successor has assumed all the
obligations of the Refunding Agent under this agreement; and (c)
all the Acquired Obligations, Substitute Obligations and money
then held by the Refunding Agent pursuant to this agreement have
been duly transferred to such successor.
Section l5. Notices. All notices, requests or reports
required or permitted to be given hereunder shall, until further
notice in writing, be given in writing at the following
addresses:
To the City:
city of Federal Way
33530 First Way South
Federal Way, Washington 98003
Attention: Finance Director
To the Refunding Agent:
Section 16. Miscellaneous. This agreement is governed by
Washington law and may not be modified except in writing signed
by the parties. In the event any one or more of the provisions
contained in this agreement shall for any reason be held invalid,
illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other
provision of this agreement, but this agreement shall be
construed as if such invalid or illegal or unenforceable
provision had never been contained herein.
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IN WITNESS WHEREOF, the parties have executed and delivered
this agreement pursuant to due and proper authorization, all as
of the date and year first above written.
CITY OF FEDERAL WAY, WASHINGTON
By Finance Director
Refunding Agent
, as
By
Trust Officer
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CERTIFICATE
I,
the
undersigned,
Clerk
of
the
City
of
Federal
Way,
Washington (herein called the "City"), DO HEREBY CERTIFY:
1.
That
the
attached
ordinance
numbered
93-172
(herein
called
the
"Ordinance" )
is
a
true
and
correct
copy
of
an
ordinance of the City, as finally passed at a regular meeting of
the Council held on the 4th day of May,
1993, and duly recorded
in my office.
2.
That said meeting was duly convened and held in all
respects in accordance with law,
and to the extent required by
law,
due and proper notice of such meeting was given;
tha t a
quorum of the Council was present throughout the meeting and a
legally sufficient number of members of the Council voted in the
proper manner for the passage of said Ordinance; that all other
requirements and proceedings incident to the proper passage of
said
Ordinance
have
been
duly
fulfilled,
carried
out
and
otherwise observed,
and that
I
am authorized to
execute
this
certificate.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the official seal of the City of Federal Way,
Washington this
~ day of
May
, 1993.
[City Seal]
Y ..í
/ .~/J d
lJif~ /