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HomeMy WebLinkAboutCOW 2003-09-08 Item 4C - Contract - Limited Tax GO Bonds with Lehman BrothersCAS Number: Ref: 03-086 Agenda Item Title: Original Sponsor: Timeline: Sponsor's Summary: Recommendations: Sponsor: Committee: Administration: I Cost Impact (if known): Fund Source (if known): Meeting Date 1 06 I Discussed. 09 -08 -03 1 Meeting Date 09 -08 -03 Meeting Date 09 -08 -03 Prepared by ARD I Initials 1 or's review 1 Cputncil review IC2, I I I I I I ITEM No. Original Agenda Date: 09 Proposed 2003 Bond Issue Authorize Mayor to sign a Bond Purchase Contract between Lehman Brothers Inc. and the City of Tukwila, for $9,850,000 Limited Tax General Obligations Bonds, Series 2003A; and $2,200,000 Limited Tax General Obligation Bonds Series 2003T (Taxable) Council Admin. X Bond Purchase Contract to be signed immediately after motion carries, while Council stands at ease. The proposed contract relates to the bond issue for the Foster Golf Course project, payment to King County to turn over South Park Bridge and funding for Arterial Street projects. Authorize Mayor to sign the contract. At 6/16/03 Finance Safety Committee meeting. Forwarded to 6/23/03 COW meeting. Same as sponsor. Debt Service for future payments. Golf Course revenues and General Taxes per Planning Model Action Move forward when final bond issue is ready. Attachments Staff report to Council from Alan Doerschel, dated September 4, 2003 Draft agreement with Lehman Brothers, Inc. To: Mayor & City Council From: Alan R. Doerschel ~ ~ Date: September 4, 2003 Subject: Proposed Bond Issue We are ready to actually issue the Bonds approved by the Council on June 23. Attached are the original draft ordinance and a draft contract with Lehman Brothers, Inc. The final ordinance will be available on Monday along with the contract when the financial numbers are determined. This is the same procedure as previous bond issues. Concurrent with the adoption of the Bond Ordinances, the Council would authorize the Mayor to sign a contract with Lehman Brothers, Inc. to purchase the bonds. CITY OF TUKWILA, WASHINGTON $9,850,000 Limited Tax General Obligation Bonds, Series 2003A $2,200,000 Limited Tax General Obligation Bonds, Series 2003T (Taxable) BOND PURCHASE CONTRACT September 8, 2003 City of Tukwila, Washington 6200 Southcenter Boulevard Tukwila, Washington 98188 Ladles and Gentlemen: The undersigned, Lehman Brothers Inc., as underwriter (the "Underwriter") hereby offers to enter into this bond purchase contract (the "Purchase Contract") with the City of Tukwila, Washington (the "City"), which upon the City's acceptance of this offer, shall be in full force and effect in accordance with its terms and shall be binding upon the City and the Underwriter. This offer is made subject to the City's acceptance by execution of this Purchase Contract and its delivery to the Underwriter on or before 11:59 P.M., Pacific Daylight Time, on September 8, 2003, and, if not so accepted, shall be subject to withdrawal by the Underwriter upon notice delivered by the Underwriter to the City at any time before the acceptance hereof by the City. All capitalized terms not otherwise defined herein shall be as defined in Ordinance No. , passed by the City Council on the date hereof (the "Bond Ordinance"). 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 $9,850,000 aggregate principal amount of the City's Limited Tax General Obligation Bonds, Series 2003A (the "2003A Bonds") and all (but not less than all) of $2,200,000 aggregate principal amount of the City's Limited Tax General Obligation Bonds, Series 2003T (Taxable) (the "2003T Bonds" and together with the 2003A Bonds, the "Bonds"). The aggregate purchase price of the Bonds shall be the purchase price set forth in Exhibit A hereto, plus interest accrued (as described in Exhibit A) on the Bonds from their date to the Closing Date (as hereinafter defined) computed on the basis of a 360-day year consisting of twelve 30-day months. The Bonds shall be issued and secured pursuant to the terms of the Bond Ordinance. The Bonds shall be dated their date of delivery, and shall have the maturities, bear interest at the rates and be subject to redemption as set forth in Exhibit A attached hereto and incorporated herein by this reference. Interest on the Bonds is payable semiannually on each June 1 and December 1, commencing December 1, 2003. C TY OF WILA BPC 9-2-03 C1TY OF ~.JK':?.LA EPC FPS CO.~.{.ME."[Tg (9 2 ~2).~:: [ 2. The Official Statement and Authorizing Instruments. The Bonds shall be otherwise as described in the Official Statement of the City, dated the date hereof, relating to the Bonds, which, together with the appendices attached thereto, and with such changes therein and supplements thereto that are consented to in writing by the Underwriter, is herein called the "Official Statement." The City authorizes and ratifies the use by the Underwriter of the Official Statement in connection with the public offering and sale of the Bonds. The City also consents to the use by the Underwriter, before the date hereof, of the Preliminary Official Statement, dated August 28, 2003, relating to the Bonds, which together with the appendices attached thereto, is herein referred to as the "Preliminary Official Statement", in connection with the public offering of the Bonds. Promptly after the acceptance hereof by the City, the City shall cause to be delivered to the Underwriter copies of the final Official Statement (together with appendices attached thereto) dated the date hereof. 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 of the Securities Exchange Commission promulgated under the Securities Exchange Act of 1934, as amended ("Rule 15c2-12") and with the requirements of Rule G-32 of the Municipal Securities Rulemaking Board ("MSRB"), 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. The City further covenants and agrees that if, after the date of this Purchase Contract 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 undera~iting period" for purposes of Rule 15c2-12 shall be 25 days from 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. 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 and two copies of the Official Statement (with any required forms) to the MSRB or its designee pursuant to Rule G-36 no later than seven business days following the date hereof. -2- 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) no higher than those shown on the cover page of the Official Statement, provided that the initial public offering prices (or yields) may be changed, from time to time, by the Underwriter as it deems necessary in connection with the marketing of the Bonds. The Underwriter also reserves the right to offer and sell the Bonds to certain dealers (including the Underwriter and other dealers depositing such Bonds into investment trusts) at prices lower than such initial public offering prices. On the Closing Date, the Underwriter shall provide to the City a certificate stating the initial offering prices (or yields) at which a substantial mount of the Bonds of each maturity were sold or are reasonably expected to be sold to the general public. 4. Delivery of Documents. The City shall deliver to the Underwriter three copies of the final Official Stat~aent manually executed on behalf of the City by an authorized officer of the City no later than the Closing Date, and, as promptly as practicable thereafter, such reasonable number of certified or conformed copies of the foregoing as the undersigned may request. 5. Representations, Covenants and Warranties. The City represents, covenants and warrants to the Underwriter that as of the date hereof: (a) The City is a non-charter code city duly created and validly existing under the Constitution and laws of the state of Washington (the "State"), with full legal right, power and authority (i) to pass the Bond Ordinance and to perform the agreements on its part contained therein, (ii) to enter into this Purchase Contract, and (iii) to issue, sell and deliver the Bonds to the Underwriter as provided herein and in the Official Statement. (b) The Bond Ordinance has been duly passed by the City and no other authorization or approval is required for the execution and delivery of this Purchase Contract or the issuance of the Bonds. (c) The execution and delivery of the Bond Ordinance and this Purchase Contract, the approval by the City of the Bonds, and the application of the proceeds of the 2003A Bonds and the 2003T Bonds for the various purposes described in the Official Statement do not and will not conflict with or result in the breach of any of the terms, ennditions or provisions of, or constitute a default under, any existing law, charter, enurt or administrative regulation, decree or order, or any other agreement, indenture, mortgage, lease or instrument by which the City or any of its respective properties is or may be bound. (d) No authorization or approval is required for the execution and delivery of the Bond Ordinance and this Purchase Contract by the City, except such authorizations or approvals as shall have been obtained on or before the Closing Date, copies of which shall be delivered to the Underwriter on the Closing Date. -3- (e) The City is in compliance with the provisions of the Bond Ordinance and no default exists thereunder and no event has occurred which, with the passing of time or the delivery of notice, would or could constitute a default thereunder. (0 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 Rule 15c2-12, the Preliminary Official Statement was, as of its date, tree 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. (g) The Official Statement is and at all times subsequent hereto, up to and including the Closing Date, will be true and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements and information therein contained, in light of the circumstances under which they were made, not misleading. (h) The City has duly authorized and approved the execution of the Official Statement by its Mayor or the City's Finance Director, as the Mayor's designee, including any amendments thereto under the terms of this Purchase Contract. (i) The City shall advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and shall not effect any such amendment or supplement without the written consent of the Undem, riter, which consent shall not be unreasonably withheld. The City shall advise the Underwriter promptly of the institution of any proceedings known to it by any gnvemmental agency prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. (j) The financial information with respect to the City contained in the Official Statement fairly presents the financial position and results of operations of the City as of the dates and for the periods therein set forth, in accordance with generally accepted accounting principles applicable to Washington municipal corporations. Except as otherwise disclosed in the Official Statement, there has been no material adverse change since December31, 2002, in the financial position, results of operations or condition, financial or otherwise, of the City, other than changes in the ordinary course of business or in the normal operation of the City or as otherwise disclosed in the Official Statement. (k) When delivered to The Depository Trust Company for the account of the Underwriter and paid for in full in accordance with the terms of this Purchase Contract, the Bonds (i) will have been duly authorized, executed, issued and delivered by the City, (ii) will constitute valid, legally binding obligations of the City enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights or contractual obligations generally to the extent constitutionally applicable and by the exercise of judicial discretion in appropriate cases, and (iii)will conform to the descriptions thereof contained in the Official Statement. (1) The proceeds of the sale of the Bonds shall be applied as described in the Official Statement under the caption "SOURCES AND USES OF BOND PROCEEDS." (m) Between the time of acceptance hereof and the Closing Date, the City will not, without the prior written consent of the Underwriter, issue any other limited tax general obligation bonds, securities or obligations. (n) No litigation is pending against the City in any court that (i) in any way challenges the rifles of any principal officer of the City or any member of the City Council to such member's position, (ii) seeks to restrain or enjoin the issuance, sale or delivery of any of the Bonds or the collection of ad valorem taxes pledged or to be pledged to pay the principal of, premium, if any, and interest on the Bonds, (iii) in any way contests or affects the validity of the Bonds, the Bond Ordinance, this Purchase Contract or the collection of such ad valorem taxes or the pledge thereof, (iv) contests in any way the powers of the City or any authority for the issuance of the Bonds or the passage of the Bond Ordinance, (v) contests or affects in any way the ability of the City to establish rates and charges for the use of its golf course facilities, (vi) contests in any way the completeness, accuracy or fairness of the Official Statement, (vii) would, in the event of a final adverse decision, materially adversely affect the financial condition or operations of the City, or (viii) in any material respect might affect adversely the transactions contemplated herein; except for any such litigation, even if determined adversely to the City, that will not materially affect the collection of ad valorem taxes of the City pledged or to be pledged to pay the principal of, premium, if any, and interest on the Bonds and will not materially affect the ability of the City to establish rates and charges for the use of its golf course facilities as contemplated herein, in the Bond Ordinance or in the Official Statement. The City has described to the Underwriter in writing all matters known to the City that create a probability that litigation of the type described in clauses (i) through (viii) of the previous sentence will be commenced against the City. (o) 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 performance by the City of its obligations under the Bonds have been obtained or will be obtained on a timely basis; provided, that no representation or warranty is made by the City with regard to any approvals that may be required for qualification of the Bonds under Blue Sky or other similar laws of any judsdicrion. (p) The City holds ritle to the properties constituting its golf course facilities described in the Official Statement free and clear of all liens and encumbrances which would unduly interfere with the use of such facilities and the -5- collection of revenues of such facilities and the collections of ad valorem taxes by the City, except as otherwise disclosed in the Official Statement. (q) 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 therein made. 6. The Closing. At 8:30 ^.M., Pacific Daylight Time, on September 25, 2002, or at such other time or on such earlier or later business day as will have been agreed upon by the City and the Underwriter (the "Closing Date"), the City will deliver or cause to be delivered to the Underwriter the Bonds, duly executed and authenticated, through the facilities of The Depository Trust Company in New York, New York or such other place to be mutually agreed upon by the City and the Underwriter, and will deliver to the Underwriter the documents mentioned in Section 7 hereof, at such place in Seattle, Washington as may be agreed upon by the City and the Underwriter. The Undenvriter will accept such delivery and pay the Purchase Price of the Bonds as set forth in Exhibit A hereto, by wire transfer to the City in immediately available federal funds. The documents mentioned in Section 7 shall be made available for inspection in Seattle, Washington, or at such other location as is mutually agreeable, by the Underwriter on the business day immediately before the Closing Date. 7. Closing Conditions. The Underwriter has entered into this Purchase Contract 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 Underwfiter's obligations under this Purchase Contract 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 7, on or before the Closing Date, and also shall be subject to the following conditions: (a) the representations and warranties of the City contained herein, shall be true, enmplete 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) on the Closing Date (i) the Bond Ordinance shall be in full force and effect, and shall not have been amended, modified or supplemented, except as shall have been agreed by the Underwriter in writing, (ii) the Official Statement shall not have been amended, modified or supplemented, except in such manner as may have beenagreed 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 Purchase Contract, the Official Statement and the Bond Ordinance; (c) on the Closing Date, no default shall have occurred or be existing under the Bond Ordinance, nor shall any event have occurred which, with the passage of time or the giving of notice, shall constitute a default under the Bond Ordinance, nor shall the City be in default in the payment of principal or interest on any of its obligations for borrowed money; and -6- (d) on or before the Closing Date, the Underwriter shall receive the following documents relating to the issuance of the Bonds: (1) copies of the Bond Ordinance certified by the City Clerk as having been duly passed or authorized by the City and as being in full force and effect, together with all changes or amendments so certified; (2) the approving legal opinions of Foster Pepper & Shefelman PLLC, Bond Counsel to the City, as to the Bonds, dated the Closing Date and substantially in those forms included in the Official Statement as Appendix B; (3) a supplemental opinion of Bond Counsel, addressed to the Underwriter and the City, substantially in the form of Exhibit B attached, to the effect that, among certain other matters, that it is not necessary, in connection with the public offering and sale of the Bonds by the Undema-iter, to register any of the Bonds under the Securities Act of 1933, as amended, or to qualify the Bond Ordinance under the Trust Indenture Act of 1939, as amended; (4) a certificate, dated the Closing Date, signed by the City Finance Director, to the effect that (i) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the Closing Date as if made on the Closing Date; and (ii) to the best of such person's knowledge, no event materially adversely affecting the City has occurred since the date of the Official Statement which has not been disclosed therein or by supplement or amendment and which should be disclosed in the Official Statement for the purpose for which it is to be used or for which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (5) an opinion, dated the Closing Date and addressed to the Underwriter, of Lukins & Annis, P.S., counsel to the Underwriter, to the effect that the Purchase Contract is binding and enforceable upon the Underwriter; (6) evidence, satisfactory to the Underwriter, that the Bonds are rated .... by Moody's Investors Service and rated .... by Fitch, Inc.; (7) a policy of municipal bond insurance insuring the payment of principal and interest on the Bonds by along with an opinion of counsel to that such policy is enforceable; and (8) such additional certificates, instruments and other documents as the Underwriter may reasonably deem necessary to evidence the truth and accuracy as of the Closing Date of the representations of the City and the due performance or satisfaction by the City at or before such time of all agreements then to be performed and all conditions then to be satisfied by the City. -7- 8. Termination of Contract. In recognition of the desire of the City and the Underwriter to effect a successful public offering of the Bonds, and in view of the potential adverse impact of any of the following events on such public offering, the Underwriter shall have the absolute right to terminate this Purchase Contract by notification to the City if at any time on or before the Closing Date: (a) An amendment to the Constitution of the United States or the State shall have been adopted which materially adversely affects the marketability of the Bonds. (b) Legislation is introduced or adopted by the House of Representatives or the Senate of the United States Congress or the State Legislature, or a decision by a Court of the United States, the United States Tax Court or a State Court shall be rendered, or a ruling, regulation or official statement by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency shall be made, with respect to federal or State taxation upon revenues or other income of the general character of the revenues pledged to the payment of the Bonds or upon interest received on bonds of the general character of the Bonds or which would, in the reasonable judgment of the Underwriter, have the effect of changing, directly or indirectly, the federal or State income tax consequences of interest on bonds of the general character of the Bonds in the hands of the holders thereof, which 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. (c) Legislation shall be introduced, by amendment or otherwise, in, or be enacted by, the House of Representatives or the Senate of the United States Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be made or proposed, to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, as contemplated hereby or by the Official Statement, is or would be in violation of any provision of the Securities Act of 1933, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect, or with the purpose or effect of otherwise prohibiting the issuance, offering or sale of obligations of the general character of the Bonds, or the Bonds, as contemplated hereby or by the Official Statement. (d) Any legislation, ordinance, rule or regulation shall be introduced in, or be enacted or promulgated by, any governmental body, department or agency of the United States or in the State, or a decision by any court of competent jurisdiction within the United States or within the State shall be rendered which, 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. -8- (e) There shall have occurred any outbreak of hostilities or any national or international calamity or crisis, the effect of such outbreak, calamity or crisis, in the reasonable judgment of the Under~vriter, being such as would materially and adversely affect (i) the market price or marketability of the Bonds or (ii) the ability of the Underwriter to enfome contracts for sale of the Bonds. (f) There shall be in full force a general suspension of trading on the New York Stock Exchange or minimum or maximum prices for trading shall have been fixed and be in force or maximum ranges for prices for securities shall have been required and be in force on the New York Stock Exchange, whether by virtue of a determination by the New York Stock Exchange or by order of the Securities and Exchange Commission or any other governmental authority having jurisdiction. (g) A general banking moratorium shall have been declared by federal, New York or State authorities having jurisdiction over banking matters and shall be in force. (h) The Official Statement shall have been amended, modified or supplemented other than as may be agreed to by the Underwriter. (i) Any event shall occur which shall affect the market price or marketability of the Bonds and in the reasonable judgment of the Underwriter, results in the Official Statement containing any untrue statement of a material fact or omitting to state a material fact necessary to make the statements and information therein contained, in light of the circumstances under which they were made, not misleading. (j) There shall have occurred, after the signing hereof, a default with respect to the debt obligations of the City or proceedings under the federal or State bankruptcy laws shall have been instituted by or against the City, the effect of which, in the reasonable judgment of the Underwriter, is such as to materially and adversely affect (i) the market price or marketability of the Bonds or (ii) the ability of the Underwriter to enforce contracts for sale of the Bonds. (k) The ratings of the City by either Moody's Investors Service or Fitch, Inc. in effect as of the date hereof shall be withdrawn or lowered. If the City shall be unable to satisfy the conditions contained in this Purchase Contract or if the obligations of the Underwriter shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriter nor the City shall be under a further obligation hereunder, except as set forth in Sections 1 and 9 hereof. 9. 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: (i) the fees and disbursements of the Bond Registrar in connection with the issuance of the Bonds; (ii) the fees and disbursements of Bond Counsel, special counsel to the City, if any, and any other financial advisors, experts or consultants retained by the City in connection with the transactions contemplated hereby; (iii) -9- the cost of obtaining ratings and municipal bond insurance on the Bonds; (iv) the cost of preparing and printing the Preliminary Official Statement and the final Official Statement, and (v) the fees and expenses of Underwriter's counsel. Furthermore, as a fee for performing the services of Underwriter in connection with the issuance and sale of the Bonds, the Underwriter shall deduct from the purchase price of the Bonds the sums described on Exhibit A as an underwriter's discount. All out-of-pocket expenses of the Underwriter, except for expenses of the City advanced by the Underwriter for which the Underwriter will be reimbursed by the City, including travel and other expenses of the Underwriter, shall be paid by the Underwriter. 10. Transcripts. When available, the City shall cause to be delivered to the Underwriter (for the Underwriter and its counsel) three bound transcripts of all proceedings relating to the issuance of the Bonds. 11. Notice. Any notice or other communication to be given to the City under this Purchase Contract may be given by delivering the same in writing to the City, City Hall 6200 Southcenter Boulevard, Tuk-~ila, Washington, Attention: Alan R. Doerschel, and any notice or other communication to be given to the Underwriter under this Purchase Contract may be given by delivering the same in writing to Scan Keatts, Vice-President Lehman Brothers Inc., Bank of America Tower, 701 Fifth Avenue, Suite 7101, Seattle, Washington 98104-7016. 12. Entire Agreement. This Purchase Contract 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 Purchase Contract 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 Purchase Contract shall remain operative and in full force and effect, regardless of (a) any investigation made by or on behalf of the Underwriter, (b) delivery of and payment for the Bonds hereunder, and (c) any termination of this Purchase Contract. 13. Governing Law and Venue. The validity, interpretation and performance of this Purchase Contract shall be governed by the laws of the State. Any action concerning the enforcement of this contract shall be commenced in the Superior Court of the State of Washington for King County or in the United States District Court for Westem Washington in Seattle, Washington. 14. Counterparts. This Purchase Contract may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document. LEHMAN BROTHERS INC. By: Sean Keatts Vice President Accepted and agreed to as of the date first above written: CITY OF TUKWILA, WASHINGTON By: Steven Mullet Mayor -11- EXHIBIT A DESCRIPTION OF CERTAIN TERMS OF THE 2003A BONDS City of Tukwila, Washington $9,850,000 Limited Tax General Obligation Bonds, Series 2003A Aggregate Principal Amount: $9,850,000.00 tess aggregate original issue discount: 0 less aggregate underwriter's discount: 0 plus aggregate original issue premium Aggregate Purchase Price: _ Maturity Dates, Principal Amounts, Interest Rates, Yields and Prices: Interest Due June 1 Principal Amount Rate Yield Price 2004 2005 2006 2007 2002 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 __% Term Bonds due December 1, , to yield % Redemption Provisions: OptionalRedemption of the 2003A Bonds. The 2003A Bonds maturing on .... I TUKWILA BPC (9 2-03]CITY O~: .r~ ~-,~,-.m ~. hr, t, 'cr, o r,~-.,,a',,Aex~'r<. (r~ ,'. r.'~) a^~ I Mandatory Redemption of the 2005A Bonds. In addition to optional redemption, the 2003A Bonds ..... Partial Redemption of the 2003A Bonds. In accordance with the preceding two paragraphs, portions of the principal amount of any 2003A Bond, ..... DESCRIPTION OF CERTAIN TERMS OF THE 2003T BONDS City of Tukwila, Washington $2,200,000 Limited Tax General Obligation Bonds, Series 2003T (Taxable) Aggregate Principal Amount: $2,200,000.00 less aggregate original issue discount: 0 less aggregate underwn2er's discount: 0 plus aggregate original issue premium Aggregate Purchase Price: $ Maturity Dates, Principal Amounts, Interest Rates, Yields and Prices: $ __% Term Bonds due December 1,. , to yield % Redemption Provisions: OptionalRedemption of the2003TBonds. The 2003T Bonds maturing on .... Mandatory Redemption of the 2003T Bonds. In addition to optional redemption, the 2003T Bonds ..... Partial Redemption of the 2003T Bonds. In accordance with the preceding two paragraphs, portions of the principal amount of any 2003T Bond, ..... EXHIBIT B [Letterhead of Foster Pepper & Shefelman PLLC] September 25, 2003 City of Tukwila, Washington 6200 Southcenter Boulevard Tukwila, Washington 98188 Lehman Brothers Inc. 701 Fifth Avenue, Suite 7101 Seattle, Washington 98104 Re: City of Tukwila, Washington $9,850,000 Limited Tax General Obligation Bonds, Series 2003A and $2,200,000 Limited Tax General Obligation Bonds, Series 2003T {Taxable) Dear Ladies and Gentlemen: At the request of the City of Tukwila, Washington (the "City"), we have served as bond counsel to the City in connection with the issuance of $9,850,000 aggregate principal amount of the City's Limited Tax General Obligation Bonds, Series 2003A (the "2003A Bonds") and $2,200,000 aggregate principal amount of the City's Limited Tax General Obligation Bonds, Series 2003T (Taxable) (the "2003T Bonds" and together with the 2003A Bonds, the "Bonds"). All capitalized terms used but not defined herein shall have the respective meanings ascribed thereto in Ordinance No.__ of the City (the "Bond Ordinance") passed by the City Council on September 8, 2003, or in the bond purchase contract, dated September 8, 2003 (the "Purchase Contract"), between the City and Lehman Brothers Inc., as Underwriter for the Bonds. In such connection we have examined a certified transcript of proceedings relating to the issuance of the Bonds and such letters, documents and materials relating to the Bonds, including the Bond Ordinance, certain portions (referred to hereinafter) of the Preliminary Official Statement dated August 28, 2003 and the Official Statement dated September __, 2003 and such other documents and materials as we have deemed relevant and necessary in order to enable us to express the opinions set forth below. This opinion is being delivered to each of you pursuant to the requirements of Section 7(d)(3) of the Purchase Contract. Based upon such examination, it is our opinion that: 1. The City has the requisite right and power under the Constitution and the laws of the state of Washington (the "State") to pass the Bond Ordinance and the Bond Ordinance has been duly and lawfully passed by the City, is in full force and effect, is valid and binding on the City and is enforceable in accordance with its terms except to the extent that the enforceability thereof may be limited by bankruptcy, insolvency, or other similar laws affecting the rights and remedies of creditors and principles of equity if equitable principles are sought. 2. The City has all requisite fight, power and authority to execute and deliver the Purchase Contract, to perform its obligations thereunder and to carry out the transactions described therein; the Purchase Contract has been duly and lawfully authorized, executed and delivered by the City, is in full force and effect, and, assuming due authorization, execution and delivery by the Underwriter, is the legal, valid and binding obligation of the City enforceable against it in accordance with its terms except to the extent that the enforceability thereof may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights and remedies of creditors or as to the availability of any particular equitable remedy. 3. All authorizations, approvals or other actions required for the valid execution and delivery by the City of the Bond Ordinance and the Purchase Contract have been obtained and no authorization, approval or other action of the United States of America, the State or any other governmental authority or agency is required therewith, except as otherwise disclosed in the Official Statement. The execution and delivery by the City of the Purchase Contract and the Bonds, and the passage by the City of the Bond Ordinance does not conflict with any existing law of the State or of the United States or the Bond Ordinance. 4. The City has duly ratified the distribution of the Preliminary Official Statement and has duly authorized the execution and delivery of the Official Statement and the distribution thereof by the Underwriter. 5. The statements contained in the Official Statement under the captions "THE BONDS;" "SOURCES AND USES OF BOND PROCEEDS;" "TAXING POWER AND LIMITATIONS - 'Levy Limitation' and 'Initiatives and Referenda;' "and "LEGAL AND TAX INFORMATION- 'Tax Exemption of the Series 2003A Bonds,' 'Certain Other Federal Tax Consequences Relating to the Series 2005A Bonds,' 'Tax Treatment of the Series 2003T Bonds' and 'Continuing Disclosure'," insofar as the statements under these captions purport to describe certain provisions of the Bonds, the Bond Ordinance, the laws of the State of Washington, or federal securities and federal tax laws, are true and correct in all material respects; provided, however, that no opinion is expressed as to any statistical or financial information contained therein or information regarding [Insurance Company] or The Depository Trust Company. 6. Although we have not verified and are not passing upon, and do not assume any responsibility for, the accuracy, completeness or fairness of the information contained in the Official Statement, including the appendices thereto (except to the extent expressly set forth in paragraph 5 above), we have participated in the preparation of the Official Statement with representatives of the City's Finance Department and, in the course of such participation, but without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Official Statement no facts have come to our attention that caused us to believe that the Official Statement (except for financial and statistical data contained therein, as to which we express no view) as of its date, or as of the date hereof, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact required to be stated therein for the purposes for which the Official Statement is to be used or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. 7. The Bond Ordinance, the Purchase Contract, the 2003A Bonds and the 2003T Bonds conform in all material respects as to form and tenor with the terms and provisions thereof as summarized and set out in the Official Statement. 8. The Bonds are exempt securities within the meaning of Section 3(a)(2) of the Securities Act of 1933, as amended, and of Section 304(a)(4) of the Trust Indenture Act of 1939, as amended; and it is not necessary in connection with the sale of the Bonds to the public to register the Bonds under the Securities Act of 1933, as amended, or to qualify the Bond Ordinance under the Trust Indenture Act of 1939, as amended. The foregoing opinion is being delivered solely to you in connection with the execution and delivery of the Bonds and may not be relied on by you for any other purpose or by any other person for any purpose without our written consent. No attorney-client relationship has existed or exists between our firm and any addressee hereof other than the City in connection with the Bonds or by virtue of this letter. We consent to the references to us contained in the Official Statement. Respectfully submitted, FOSTERPEPPER & SHEFELMANPLLC