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HomeMy WebLinkAbout2812 Issuance and Sale of Limited Tax General Obligation Bonds to Finance Renovations of Historic City Hall, Construction of City Hall Annex and Various Capital ImprovementsORDINANCE NO. 2812 An ordinance of the City of Port Townsend, Washington, providing for the issuance and sale of limited tax general obligation bonds of the City in the aggregate principal amount of $3,465,000 to finance the renovation of an historic city hall and construction of a new City Hall Annex, and various capital improvements; providing the form and terms of the bonds; and authorizing the sale of such bonds. WHEREAS, the City Council of the City of Port Townsend, Washington (the "City") has determined that it is in the best interest of the City to renovate an historic city hall and construction of a new City Hall Annex, and various other capital improvements to city facilities; and WHEREAS, in order to provide the funds required for such purposes and to pay the costs of issuing the bonds, the City now desires to authorize the issuance of limited tax levy general obligation bonds in the principal amount of $3,465,000 and to authorize the sale of such bonds; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PORT TOWNSEND, WASHINGTON, DO ORDAIN AS FOLLOWS: SECTION 1. Definitions. As used in this ordinance, the following words shall have the following meanings, unless a different meaning clearly appears from the context: "Bond Account" means the "City of Port Townsend Limited Tax General Obligation Bond Redemption Account, 2002" authorized to be created within the City's Bond Fund by Section 6 of this ordinance. "Bond Insurance Policy" means the municipal bond insurance policy issued by the Insurer insuring the payment when due of the principal of and interest on the Bonds as provided therein. organized and Washington. "Code" corresponding "Bond Register" means the registration records for the Bonds maintained by the Bond Registrar. "Bond Registrar" 'means the fiscal agency of the State of Washington, in New yOrk, New York, for the purposes of registering and authenticating the Bonds, maintaining the Bond Register, effecting transfer of ownership of the Bonds and paying principal of and interest on the Bonds. "Bonds" means the $3,465,000 principal amount of the City of Port Townsend, Washington, Limited Tax General Obligation Bonds, 2002, issued pursuant to this ordinance. "City" means the City of Port Townsend, Washington, a municipal corporation duly existing under and by virtue of the Constitution and laws of the State of means the Internal Revenue Code of 1986, as amended, together with and applicable final, temporary or proposed regulations and revenue rulings issued or amended with respect thereto by the United States Treasury Department of the Internal Revenue Service, to the extent applicable to the Bonds. "Council" means the legislative authority of the City as the same shall be duly and regularly constituted from time to time. "DTC" means The Depository Trust Company of New York, as depository for the Bonds, or any successor or substitute depository for the Bonds. "Insurer" means Ambac Assurance Corporation, a Wisconsin-domiciled stock insurance company. "Letter of Representations" means the Blanket Letter of Representations from the City to DTC. -2- P:\NMN\NMN208 02/09/16 "MSRB" means the Municipal Securities Rulemaking Board or any successor to its functions. "NRMSIR" means a nationally recognized municipal securities information repository. "Registered Owner" means the person in whose name a Bond is registered on the Bond Register. For so long as the City utilizes the book-entry system for the Bonds, DTC shall be deemed to be the Registered Owner. "Rule" means the SEC's Rule 15c2-12 under the Securities Exchange Act of 1934. "SEC" means the U.S. Securities and Exchange Commission. SECTION 2. Findings and Authorization of Improvements. The City Council hereby finds that it is in the public interest for the City to undertake renovation of the city hall and construction of a new City Hall Annex and various other capital improvements to city facilities. The estimated cost of those projects and all costs incidental thereto and the issuance of the Bonds is $3,465,000, which shall be provided from the proceeds of sale of the Bonds. SECTION 3. Authorization of Bonds. The City shall issue and sell the Bonds in the aggregate principal amount of $3,465,000 to provide money to finance the projects described in Section 2, and all costs incidental thereto and to the issuance of the Bonds. The Bonds shall be general obligations of the City; shall be designated "City of Port Townsend, Washington, Limited Tax General Obligation Bonds, 2002"; shall be dated October 1, 2002; shall be issued in fully registered form in the denomination of $5,000 or any integral multiple thereof, provided that no Bond shall represent more than one maturity; shall be numbered separately and in such manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification and control; shall bear interest (calculated based on a 360-day year of 12 30-day months) at the rates set forth below from their date, until the Bonds have been paid or their -3 - P:\NMN\NMN208 02/09/t6 payment duly provided for, payable on June 1, 2003, and semiannually thereafter on December 1 and June 1, and shall mature on December 1 of each year as follows: Maturity Year (December 1) Principal Amount Interest Rates 2005 $ 110,000 1.95% 2006 110,000 2.35 2007 115,000 2.70 2008 120,000 3.00 2009 120,000 3.20 2010 125,000 3.45 2011 130,000 3.55 2012 135,000 3.65 2013 140,000' 3.75 2014 145,000 3.90 2015 235,000 4.00 2016 245,000 4.15 2017 255,000 4.30 2022 1,480,000 4.70 SECTION 4. Registration, Exchange and Payments. (a) Registrar/Bond Register. The City hereby adopts the system of registration approved by the Washington State Finance Committee, which utilizes the fiscal agencies of the State of Washington in New York, New York, as registrar, authenticating agent, paying agent and transfer agent (the "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 (the "Bond Register"), which shall 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. (b) Registered Ownership. The City and the Bond. Registrar may deem and treat the Registered Owner of each Bond as the absolute owner for all purposes, and neither the -4- P:\NMN\NMN208 02/09/16 City nor the Bond Registrar shall be affected by any notice to the contrary. Payment of any such Bond shall be made only as described in Section 4(h) hereof, but such registration may be transferred as herein provided. All such payments made as described in Section 4(h) shall be valid and shall satisfy the liability of the City upon such Bond to the extent of the amount or amounts so paid. (c) DTC Acceptance/Letter of Representations. The Bonds shall initially be held in fully immobilized form by DTC acting as depository. To induce DTC to accept the Bonds as eligible for deposit at DTC, the City has executed and delivered to DTC a Blanket Issuer Letter of Representations (the "Letter of Representations"). Neither the City nor the Bond Registrar will have any responsibility or obligation to DTC participants or the persons for whom they act as nominees with respect to the Bonds for the accuracy of any records maintained by DTC or any DTC participant, the payment by DTC or any DTC participant of any amount in respect of the principal of or interest on Bonds, any notice that is permitted or required to be given to Registered Owners under this ordinance (except such notices as shall be required to be given by the City to the Bond Registrar or to DTC), the selection by DTC or any DTC participant of any person to receive payment in the event of a partial redemption of the Bonds, or any consent given or other action taken by DTC as the Registered Owner. For so long as any Bonds are held in fully immobilized form hereunder, DTC or its successor depository shall be deemed to be the Registered Owner for all purposes, and all references in this ordinance to the Registered Owners shall mean DTC or its nominee and shall not mean the owners of any beneficial interest in any Bonds. -5- P:\NMN\NMN208 02/09/16 (d) Use of Depository. (i) The Bonds shall be registered initially in the name of CEDE & Co., as nominee of DTC, with a single Bond for each maturity in a denomination equal to the total principal amount of such maturity. Registered ownership of such immobilized Bonds, or any portions thereof, may not thereafter be transferred except (A) to any successor of DTC or its nominee, provided that any such successor shall be qualified under any applicable laws to provide the service proposed to be provided by it; (B) to any substitute depository appointed by the City pursuant to subsection (ii) below or such substitute depository's successor; or (C) to any person as provided in subsection (iv) below. (ii) Upon the resignation of DTC or its successor (or any substitute depository or its successor) from its functions as depository or a determination by the City to discontinue the system of book entry transfers through DTC or its successor (or any substitute depository or its successor), the City may appoint a substitute depository. Any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it. (iii) In the case of any transfer pursuant to clause (A) or (B) of subsection (i) above, the Bond Registrar shall, upon receipt of all outstanding Bonds, together with a written request on behalf of the City, issue a single new Bond for each maturity then outstanding, registered in the name of such successor or substitute depository, or its nominee, all as specified in such written request of the City. (iv) In the event that (A) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained, or (B) the City determines that it is in the best interest of the beneficial owners of the -6- P:\NMN\NMN208 02/09/16 Bonds that the Bonds be provided in certificated form, the ownership of such Bonds may then be transferred to any person or entity as herein provided, and shall no longer be held in fully immobilized form. The City shall deliver a written request to the Bond Registrar, together with a supply of definitive Bonds in certificated form, to issue Bonds in any authorized denomination. Upon receipt by the Bond Registrar of all then outstanding Bonds, together with a written request on behalf of the City to the Bond Registrar, new Bonds shall be issued in the appropriate denominations and registered in the names of such persons as are provided in such written request. (e) Transfer or Exchange of Registered Ownership; Change in Denominations. The registered ownership of any Bond may be transferred or exchanged, but no transfer of any Bond shall be valid unless it is surrendered to the Bond Registrar with the assignment form appearing on such Bond duly executed by the Registered Owner or such Registered Owner's duly authorized agent in a manner satisfactory to the Bond Registrar. Upon such surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate and deliver, without charge to the Registered Owner or transferee, a new Bond (or Bonds at the option of the new Registered Owner) of the same date, maturity and interest rate and for the same aggregate principal amount in any authorized denomination, naming as Registered Owner the person or persons listed as the assignee on the assignment form appearing on the surrendered Bond, in exchange for such surrendered and canceled Bond. Any Bond may be surrendered to the Bond Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds of the same date, maturity and interest rate, in any authorized denomination. The Bond Registrar shall not be obligated to transfer or exchange any Bond during a period beginning at the opening of business on the 15th day of the month next preceding any interest payment date -7- P:~NMN~NMN208 02/09116 and ending at the close of business on such 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. (f) Bond Registrar's Ownership of Bonds. The Bond Registrar may become the Registered Owner of any Bond with the same rights it would have if it were not the Bond Registrar, and to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as member of, or in any other capacity with respect to, any committee formed to protect the rights of the Registered Owners of the Bonds. (g) Registration Covenant. The City covenants that, until all Bonds have been surrendered and canceled, it will maintain, or cause to be maintained, a system for recording the ownership of each Bond that complies with the provisions of Section 149 of the Code. (h) Place and Medium of Payment. Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America. For so long as all Bonds are in fully immobilized form, payments of principal and interest shall be made as provided in accordance with the operational arrangements of DTC referred to in the Letter of Representations. In the event that the Bonds are no longer in fully immobilized form, interest on the Bonds shall be paid by check or draft mailed to the Registered Owners at the addresses for such Registered Owners appearing on the Bond Register on the 15th day of the month preceding the interest payment date, and principal of the Bonds shall be payable upon presentation and surrender of such Bonds by the Registered Owners at the principal office of the Bond Registrar; provided, however, that if so requested in writing by the Registered Owner of at least $1,000,000 principal amount of Bonds, interest will be paid by wire transfer on the date due to an account with a bank located within the United States. -8- P:\NMN\NMN208 02/09/16 SECTION 5. Redemption and Purchases. (a) Optional Redemption. The City hereby reserves the right to redeem the outstanding Bonds maturing on and after December 1, 2013 in whole or in part (maturities to be selected by the City and by lot within a maturity in such manner as DTC or the Bond Registrar, as appropriate, shall determine) on December 1, 2012, and on any date thereafter, at par, plus accrued interest to the date of redemption. (b) Mandatory Redemption. The Bonds maturing on December 1, 2022 shall be redeemed prior to maturity by lot (or paid at maturity), not later than December 1 in the years 2018 through 2022 (to the extent such Bonds have not been previously redeemed or purchased) and in the principal amounts set forth below, without premium, together with the interest accrued to the date fixed for redemption. * Final Maturity Year Amount 2018 $ 270,000 2019 280,000 2020 295,000 2021 310,000 2022* 325,000 (c) Partial Redemption. 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, for the then unredeemed balance of the principal amount, a new Bond or Bonds, at the option of the registered owner, of like maturity and interest rate in any authorized denomination. (d) Notice of Redemption. Written notice of any redemption of Bonds shall be given by the Bond Registrar on behalf of the City by first class mail, postage prepaid, not less than 30 days nor more than 60 days before the redemption date to the registered owners of Bonds -9- P:\NMN\NMN208 02/09116 that are to be redeemed at their last addresses shown on the Bond Register. So long as the Bonds are in book-entry form, notice of redemption shall be given as provided in the Letter of Representations. The requirements of this section shall be deemed complied with when notice is mailed, whether or not it is actually received by the owner. Each notice of redemption shall contain the following information: (1)the redemption date, (2)the redemption price, (3)if less than all outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the Bonds to be redeemed, (4)that on the redemption date the redemption price will become due and payable upon each Bond or portion called for redemption, and that interest shall cease to accrue from the redemption date, (5) that the Bonds are to be surrendered for payment at the principal office of the Bond Registrar, (6) the CUSIP numbers of all Bonds being redeemed, (7) the dated date of the Bonds, (8) the rate of interest for each Bond being redeemed, (9) the date of the notice, and (10) any other information needed to identify the Bonds being redeemed. 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 identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. (e) Effect of Redemption. Unless the City has revoked a notice of redemption, the City shall transfer to the Bond Registrar amounts that, in addition to other money, if any, held by the Bond Registrar, will be sufficient to redeem, on the redemption date, all the Bonds to be redeemed. From the redemption date interest on each Bond to be redeemed shall cease to accrue. (f) Amendment of Notice Provisions. The foregoing notice provisions of this section; including but not limited to the information to be included in redemption notices and the - l 0- P:\NMN\NMN208 02/09/16 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. (g) Purchase on Open Market. The City reserves the right to purchase any of the Bonds in the open market at any time and at any price. SECTION 6. Creation of Bond Account and Provision for Tax Levy Payments. A special fund of the City known as the "City of Port Townsend Limited Tax General Obligation Bond Redemption Account, 2002" (the "Bond Account"), is hereby authorized and directed to be created in the office of the Finance Director of the City within the City's Bond Fund. The Bond Account shall be drawn upon for the sole purpose of paying the principal of and interest on the Bonds. The City hereby irrevocably covenants 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, within and as a part of the tax millage levy permitted to cities without a vote of the people, upon all the property within the City subject to taxation in an amount which will be sufficient to pay the principal of and interest on the Bonds as the same shall become due. All of such taxes and any of such other money so collected shall be paid into the Bond Account. None of the money in the Bond Account shall be used for any other purpose than the payment of the principal of and interest on the Bonds. Money in the Bond Account 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. Any interest or profit from the investment of such money shall be deposited in the Bond Account. - l ] - P:\NMN\NMN208 02109116 The City hereby irrevocably pledges 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 such taxes and for the prompt payment of the principal of and interest on the Bonds as the same shall become due. SECTION 7. Bonds Deemed To Be No Longer Outstanding. In the event that the City, in order to effect the payment, retirement or redemption of any Bond, sets aside in the Bond Account or in another special account, held in trust by a trustee, cash or noncallable government obligations, as such obligations are now or hereafter defined in RCW 39.53, or any combination of cash and/or noncallable government obligations, in amounts and maturities which, together with the known earned income therefrom, are sufficient to redeem or pay and retire such Bond in accordance with its terms and to pay when due the interest and redemption premium, if any, thereon, and such cash and/or noncallable government obligations are irrevocably set aside and pledged for such purpose, then no further payments need be made into the Bond Account for the payment of the principal of and interest on such Bond. The owner of a Bond so provided for shall cease to be entitled to any lien, benefit or security of this ordinance except the right to receive payment of principal, premium, if any, and interest from such special account, and such Bond shall be deemed to be not outstanding under this ordinance. SECTION 8. Tax Covenant; Special Designation. The City covenants to undertake all actions required to maintain the tax-exempt status of interest on the Bonds under Section 103 of the Code. The City hereby designates the Bonds as "qualified tax-exempt obligations" under Section 265(b)(3) of the Code for banks, thrift institutions and other financial institutions. The - 12- P:\NMN\NMN208 02/09/16 City does not expect to issue more than $10,000,000 in qualified tax-exempt obligations during calendar year 2002. SECTION 9. Lost or Destroyed Bonds. If any Bonds are lost, stolen or destroyed, the Bond Registrar may authenticate and deliver a new Bond or Bonds of like amount, maturity and tenor to the Registered Owner upon the owner paying the expenses and charges of the Bond Registrar and the City in connection with preparation and authentication of the replacement Bond or Bonds and upon his or her filing with the Bond Registrar and the City evidence satisfactory to both that such Bond or Bonds were actually lost, stolen or destroyed and of his or her ownership, and upon furnishing the City and the Bond Registrar with indemnity satisfactory to both. SECTION 10. Form of the Bonds. The Bonds shall be in substantially the following STATEMENT OF INSURANCE Financial Guaranty Insurance Policy No. __ (the "Policy") with respect to payments due for principal of and interest on this bond has been issued by Ambac Assurance Corporation ("Ambac Assurance"). The Policy has been delivered to The Bank of New York, New York, New York, as the Insurance Trustee under said Policy and will be held by such Insurance Trustee or any successor insurance trustee. The Policy is on file and available for inspection at the principal office of the Insurance Trustee and a copy thereof may be secured from Ambac Assurance or the Insurance Trustee. All payments required to be made under the Policy shall be made in accordance with the provisions thereof. The owner of this bond acknowledges and consents to the subrogation rights of Ambac Assurance as more fully set forth in the Policy. - 1 3- P:\NMN\NMN208 02/09/16 UNITED STATES OF AMERICA NO. STATE OF WASHINGTON CITY OF PORT TOWNSEND LIMITED TAX GENERAL OBLIGATION BOND, 2002 INTEREST RATE: MATURITY DATE: CUSIP NO: REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS The City of Port Townsend, Washington, a municipal corporation organized and existing under and by virtue of the laws and Constitution of the State of Washington (the "City"), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount specified above, unless redeemed prior thereto as provided herein, together with interest on such Principal Amount from the date hereof or the most recent date to which interest has been paid or duly provided for at the Interest Rate set forth above payable June 1, 2003, and semiannually thereafter on each December 1 and June 1 until payment of the principal sum has been made or duly provided for. Both principal of and interest on this bond are payable in lawful money of the United States of America. For so long as the bonds of this issue are held in fully immobilized form, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of DTC referred to in the Blanket Issuer Letter of Representations from the City to The Depository Trust Company. In the event that the bonds of this issue are no longer held in fully immobilized form, interest on this bond shall be paid by check or draft mailed to the Registered Owner at the address appearing on the Bond Register on the 15th day of the month preceding the interest payment date, and principal of this bond shall be payable upon presentation and surrender of this bond by the Registered Owner at the principal office of the fiscal agency of the State of Washington in New York, New York (the "Bond Registrar"). This bond is one of an issue of limited tax gene. ral obligation bonds of the City of like date and tenor, except as to number, interest rate and date of maturity, in the aggregate principal amount of $3,465,000, issued pursuant to Ordinance No. 2812 of the City, passed on September 16, 2002 (the "Bond Ordinance"), to provide financing for renovation of an historic city hall and construction of a new City Hall Annex, and various other capital improvements. The City has reserved the right to redeem the bonds of this issue maturing on and after December 1, 2013, on or after December 1, 2012 in whole or in part (maturities to be selected by the City and by lot within a maturity in such manner as DTC or the Bond Registrar shall determine) on any date thereafter, at par plus accrued interest to the date of redemption. - 1 4- P:\NMN\NMN208 02/09/16 The bonds of this issue maturing on December 1, 2022 shall be redeemed prior to maturity by lot (or paid at maturity), not later than December 1 in the years 2018 through 2022 (to the extent such Bonds have not been previously redeemed or purchased) and in the principal amounts set forth below, without premium, together with the interest accrued to the date fixed · for redemption. Year Amount * Final Maturity 2018 $ 270,000 2019 280,000 2020 295,000 2021 310,000 2022* 325,000 Notice of any such intended redemption shall be given not less than 30 nor more than 60 days prior to the redemption date by first class mail, postage prepaid, to the Registered Owner of any bond to be redeemed at the ad&ess appearing on the Bond Register. The requirements of the Bond Ordinance shall be deemed to be 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 all such bonds so called for redemption shall cease to accrue on the date fixed for redemption unless such bond or bonds so called for redemption are not redeemed upon presentation made pursuant to such call. Portions of the principal sum of this bond in installments of $5,000 or any integral multiple thereof may also be redeemed in accordance with the schedule set forth above, and if less than all of the principal sum hereof is to be redeemed, upon the surrender of this 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 sum hereof, at the option of the owner, a bond or bonds of like maturity and interest rate in any of the denominations authorized by the Bond Ordinance. The City has designated the bonds of this issue as "qualified tax-exempt obligations" for purchase by financial institutions. The City has irrevocably covenanted with the owner of this bond that it will annually include in its budget and levy taxes, within and as a part of the tax levy permitted to cities without a vote of the electorate, upon all the property subject to taxation in amounts sufficient, together with other money legally available therefor, to pay the principal of and interest on this bond as the same shall become due. The full faith, credit and resources of the City are hereby irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of such principal and interest. The pledge of tax levies for payment of principal of and interest on the bonds may be discharged prior to maturity of the bonds by making provision for the payment thereof on the terms and conditions set forth in the Bond Ordinance. - 1 5- P:\NMN\NMN208 02/09/16 The bonds of this issue are issued in fully registered form in the denomination of $5,000 each or any integral multiple thereof, provided that no bond shall represent more than one maturity. Upon surrender to the Bond Registrar, bonds are interchangeable for bonds in any authorized denomination of an equal aggregate principal amount and of the same interest rate and maturity. 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 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 this bond and for any and all other purposes whatsoever. Reference also is made to the Bond Ordinance as more fully describing the covenants with and the rights of Registered Owners of the bonds or registered assigns and the meanings of capitalized terms appearing on this bond which are defined in such ordinance. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance (as hereinafter defined) until the Certificate of Authentication hereon shall have been manually signed by the Bond Registrar. It is hereby certified and declared that this bond is issued pursuant to and in strict compliance with the Constitution and laws of the State of Washington and ordinances of the City, that all acts, conditions and things required to be done precedent to and in the issuance of this bond and the bonds of this issue have happened, been done and performed, and that this bond and the bonds of this issue do not exceed any constitutional or statutory limitations. IN WITNESS WHEREOF, the City of Port Townsend, Washington, has caused this bond to be signed on behalf of the City with the manual or facsimile signature of the Mayor, to be attested by the manual or facsimile signature of the Clerk of the City, and the seal of the City to be reproduced or impressed hereon, as of this October 1, 2002. (SEAL) CITY OF PORT TOWNSEND, WASHINGTON By /s/manual or facsimile [Mayor/Manager] ATTEST: /s/manual or facsimile Clerk of the City - 16- P:~NMN\NMN208 02/09/16 The Certificate of Authentication for the Bonds shall be in substantially the following form and shall appear on each Bond: CERTIFICATE OF AUTHENTICATION Date of Authentication: This bond is one of the City of Port Townsend, Washington, Limited Tax General Obligation Bonds, 2002, dated October 1, 2002. WASHINGTON STATE FISCAL AGENCY, as Bond Registrar By Authorized Signer ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto 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 thereunder and does hereby irrevocably constitute and appoint of , or its successor, as Agent to transfer said bond on the books kept by the Bond Register for registration thereof, with full power of substitution in the premises. DATED: SIGNATURE GUARANTEED: NOTICE: Signature(s) must be guaranteed pursuant to law. - 1 7- P:\NMN\NMN20§ 02/09/~6 NOTE: The signature on this Assignment must correspond with the name of the Registered Owner as it appears upon the face of the within bond in every particular, without alteration or enlargement or any change whatever. SECTION 11. Execution of the Bonds. The Bonds shall be executed on behalf of the City with the manual or facsimile signature of the Manager or Mayor, attested by the manual or facsimile signature of the City Clerk, and shall have the seal of the City impressed or imprinted thereon. In case either or both of the officers who have signed or attested any of the Bonds cease to be such officer before such Bonds have been actually issued and delivered, such Bonds shall be valid nevertheless and may be issued by the City with the same effect as though the persons who had signed or attested such Bonds had not ceased to be such officers, and any Bond may be signed or attested on behalf of the City by officers who at the date of actual execution of such Bond are the proper officers, although at the nominal date of execution of such Bond such officer was not an officer of the City. Only Bonds that bear a Certificate of Authentication in the form set forth in Section 10, manually executed by the Bond Registrar, 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 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 - ] 8- P:\NMN\NMN208 02/09/16 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 officers of the City although at the original date of such Bond any such person shall not have been such officer. SECTION 12. Project Fund; Application of Proceeds of Bonds. A special account is hereby created in the City Hall Project Fund of the City (the "Project Fund"). The Project Fund shall be used to pay the costs of the acquisition and capital improvements described in Section 2. 'At the time of delivery of the Bonds, the proceeds of the Bonds shall be deposited as follows: (a) The accrued interest, if any, to the date of delivery shall be deposited to the Bond Account and used to pay a portion of the interest on the Bonds on June 1, 2003. (b) The remaining proceeds shall be deposited into the Project Fund and used to pay the costs of the projects described in Section 2 hereof and all costs incidental thereto and to the issuance of the Bonds. Money remaining in the Project Fund after all of such costs have been paid or reimbursed, or the Council determines not to construct portions of such projects, may be used to pay costs of other legally authorized capital expenditures of the City or shall be deposited in the Bond Account. Money in the Project Fund may be invested as permitted by law. All interest earned and profits derived from such investments shall be retained in and become a part of the Project Fund or deposited into the Bond Account. SECTION 13. Sale of the Bonds. The Council finds that the purchase contract that has been distributed to the Council is reasonable and that it is in the best interest of the City that the Bonds shall be sold upon the conditions set forth in the purchase contract. The City accepts the - 1 9- P:\NMN~NMN208 02/0~/16 purchase contract and authorizes the Finance Director, Mayor or City Manager to execute the purchase contract and deliver it to Martin Nelson & Company, Inc. (the "Underwriter"). The Bonds shall be issued and delivered to the Underwriter upon payment of the purchase price specified in the purchase contract. SECTION 14. Official Statement. The City approves the preliminary official statement presented to the Council and ratifies the Underwriter's distribution of the preliminary official statement in connection with the offering of the Bonds. Pursuant to the Rule, the City deems the preliminary official statement final as of its date except for the omission of information dependent upon the pricing of the Bonds and the completion of the bond purchase contract. The City agrees to cooperate with the Underwriter to deliver or cause to be delivered, within seven business days from the date of the sale of the Bonds 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 the Rule and the rules of the MSRB. The City authorizes the Underwriter to use the official statement, substantially in the form of the preliminary official statement, in connection with the sale of the Bonds. The Finance Director, Mayor and City Manager are hereby authorized to review and approve on behalf of the City the final official statement relative to the Bonds with such additions and changes as may be deemed necessary or advisable to them. SECTION 15. Undertaking to Provide Ongoing DisclOsure. (a) Contract/Undertaking. This section constitutes the City's written undertaking for the benefit of the owners of the Bonds as required by Section (b)(5) of the Rule. The City is an obligated person with respect to less than $10,000,000 of municipal securities, including the Bonds. -20- P:\NMN\NMN208 02/09/16 (b) Financial Statements/Operating Data. The City agrees to provide or cause to be provided to each person upon request or to the SID, if any, a copy of its latest publicly available annual financial statements prepared in accordance with the Budget Accounting and Reporting System prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any successor statute). Such annual statements shall be available upon request to the office of the City Finance Director. (c) Material Events. The City agrees to provide or cause to be provided, in a timely manner, to the SID, if any, to the Insurer, and to each NRMSIR or to the MSRB notice of the occurrence of any of the following events with respect to the Bonds, if material: · Principal and interest payment delinquencies; · Non-payment related defaults; · Unscheduled draws on debt service reserves reflecting financial difficulties; · Unscheduled draws on credit enhancements reflecting financial difficulties; · Substitution of credit or liquidity providers, or their failure to perform; · Adverse tax opinions or events affecting the tax-exempt status of the Bonds; · Modifications to the rights of Bond owners; · Bond calls (optional, contingent or unscheduled Bond calls other than scheduled sinking fund redemptions for which notice is given pursuant to Exchange Act Release 34-238560); · Defeasances; · Release, substitution or sale of property, securing repayment of the Bonds; and · Rating changes. -2 1- P:\NMN~NMN208 02/09/16 Solely for purposes of disclosure, and not intending to modify this undertaking, the City advises that no debt service reserves or property secure payment of the Bonds. (d) Termination/Modification. The City's obligations to provide notices of material events shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. Any provision of this section shall be null and void if the City (1) obtains an opinion of nationally recognized bond counsel to the effect that the portion of the Rule that requires that provision is invalid, has been repealed retroactively or otherwise does not apply to the Bonds and (2) notifies each NRMSIR, the Insurer, and the SID, if any, of such opinion and the cancellation of this section. The City may amend this section with an approving opinion of nationally recognized bond counsel in accordance with the Rule. (e) Bond Owner's Remedies Under This Section. The right of any bondowner or beneficial owner of Bonds to enforce the provisions of this section shall be limited to a right to obtain specific enforcement of the City's obligations under this section, and any failure by the City to comply with the provisions of this undertaking shall not be an event of default with respect to the Bonds. For purposes of this section, "beneficial owner" means any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds, including persons holding Bonds through nominees or depositories. SECTION 16. Bond Insurance. (a) Acceptance of Insurance. In accordance with the offer of the Underwriter to purchase the Bonds, the City Council hereby approves the commitment of the Insurer to provide a bond insurance policy guaranteeing the payment when due of principal of and interest on the Bonds (the "Bond Insurance Policy"). The City Council further authorizes and directs all proper officers, agents, attorneys and employees of the City Council to cooperate with the -22- P:\NMN\NMN208 02109/16 Insurer in preparing such additional agreements, certificates, and other documentation on behalf of the City Council as shall be necessary or advisable in providing for the Bond Insurance Policy. (b) Payments Under the Bond Insurance Policy. As long as the Bond Insurance Policy shall be in full force and effect, the City and the Bond Registrar agree to comply with the following provisions: (1) If, at least one day prior to an interest payment date, the City or the Bond Registrar determines that there will be insufficient funds in the Bond Account to pay the principal of or interest on the Bonds on such interest payment date, the City or the Bond Registrar shall so notify the Insurer. Such notice shall specify the amount of the anticipated deficiency, the Bonds to which such deficiency is applicable and whether such Bonds will be deficient as to principal or interest, or both. If the City or the Bond Registrar has not so notified the Insurer at least one day prior to an interest payment date, the Insurer will make payments of principal or interest due on the Bonds on or before the first business day next following the date on which the Insurer shall have received notice of nonpayment from the City or the Bond Registrar. (2) The City or the Bond Registrar shall, after giving notice to the Insurer as provided in subsection (1) above, make available to the Insurer and, at the Insurer's direction, to The Bank of New York, as insurance trustee for the Insurer or any successor insurance trustee (the "Insurance Trustee"), the registration books of the City maintained by the Bond Registrar, and all records relating to the Bond Account maintained under this ordinance. (3) The City or the Bond Registrar shall provide the Insurer and the Insurance Trustee with a list of registered owners of Bonds entitled to receive principal or -23- P:\NMN\NMN208 02/09/16 interest payments from the Insurer under the terms of the Bond Insurance Policy, and shall make arrangements with the Insurance Trustee (i) to mail checks or drafts to the registered owners of Bonds entitled to receive full or partial interest payments from the Insurer, and (ii)to pay principal on Bonds surrendered to the Insurance Trustee by the registered owners of Bonds entitled to receive full or partial principal payments from the Insurer. (4) The City or the Bond Registrar shall, at the time it provides notice to the Insurer pursuant to subsection (1) above, notify registered owners of Bonds entitled to receive the payment of principal or interest thereon from the Insurer (i) as to the fact of such entitlement, (ii)that the Insurer will remit to them all or a part of the interest payments next coming due upon proof of Bond holder entitlement to interest payments and delivery to the Insurance Trustee, in form satisfactory to the Insurance Trustee, of an appropriate assignment of the registered owner's right to payment, (iii) that should they be entitled to receive full payment of principal from the Insurer, they must surrender their Bonds (along with an appropriate instrument of assignment satisfactory to the Insurance Trustee to permit ownership of such Bonds to be registered in the name of the Insurer) for payment to the Insurance Trustee, and not the Bond Registrar, and (iv) that should they be entitled to receive partial payment of principal from the Insurer, they must surrender their Bonds for payment thereon first to the Bond Registrar, who shall note on such Bonds the portion of the principal paid by the Bond Registrar, and then, along with an appropriate instrument of assignment satisfactory to the Insurance Trustee, to the Insurance Trustee, which will then pay the unpaid portion of principal. (5) In the event that the Bond Registrar has notice that any payment of principal of or interest on a Bond which has become due for payment and which is made to a Bond holder by or on behalf of the City has been deemed a preferential transfer and theretofore -24- P:\NMN\NMN208 02/09/16 recovered from its registered owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of a court having competent jurisdiction, the Bond Registrar shall, at the time the Insurer is notified pursuant to subsection (1) above, notify all registered owners that in the event that any registered owner's payment is so recovered, such registered owner will be entitled to payment from the Insurer to the extent of such recovery if sufficient funds are not otherwise available, and the Bond Registrar shall furnish to the Insurer its records evidencing the payments of principal of and interest on the Bonds which have been made by the Bond Registrar and subsequently recovered from registered owners and the dates on which such payments were made. (6) In addition to those rights granted the Insurer under this ordinance, the Insurer shall, to the extent it makes payment of principal of or interest on Bonds, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Bond Insurance Policy, and to evidence such subrogation (i) in the case of subrogation as to claims for past due interest, the Bond Registrar shall note the Insurer's rights as subrogee on the registration books of the City maintained by the Bond Registrar upon receipt from the Insurer of proof of the payment of interest thereon to the registered owners of the Bonds, and (ii) in the case of subrogation as to claims for past due principal, the Bond Registrar shall note the Insurer's rights as subrogee on the registration books of the City maintained by the Bond Registrar upon surrender of the Bonds by the registered owners thereof together with proof of the payment of principal thereof. (7) While the Bond Insurance Policy is in effect, the City shall furnish to the Insurer: -2 5- P:\NMN\NMN208 02/09/16 (a) as soon as practicable after the filing thereof, a copy of any financial statement and a copy of any audit and annual report of the City at no cost to the Insurer; (b) a copy of any notice to be given to the ~registered owners of the Bonds, including, without limitation, notice of any redemption of or defeasance of Bonds, and any certificate rendered pursuant to this ordinance relating to the security for the Bonds at no cost to the Insurer; and (c) such additional information it may reasonably request. (8) The City shall notify the Insurer of any failure of the City to provide relevant notices and certificates. (9) The City will permit the Insurer to discuss the affairs, finances and accounts of the City or any information the Insurer may reasonably request regarding the security for the Bonds with appropriate officers of the City. The City will permit the Insurer to have access to and to make copies of all books and records relating to the Bonds at any reasonable time. (10) The Insurer shall have the right to direct an accounting at the City's expense, and the City's failure to comply with such direction within 30 days after receipt of written notice of the direction from the Insurer shall be deemed a default hereunder; provided, however, that if compliance cannot occur within such period, then such period will be extended so long as compliance is begun within such period and diligently pursued, but only if such extension would not materially adversely affect the interests of any registered owner of the Bonds. (11) Notwithstanding any other provision, of this ordinance, the City shall immediately notify the Insurer if at any time there are insufficient moneys to make any -26- P:\NMN\NMN208 02/09/16 payments of principal and/or interest as required and immediately upon the occurrence of any event of default hereunder. (c) Rights of Insurer. (1) Any provision of this ordinance expressly recognizing or granting rights in or to the Insurer may not be amended in any manner which affects the rights of the Insurer without the prior written consent of the Insurer. (2) Unless otherwise provided in this section, the Insurer's consent shall be required in addition to Bond holder consent, when required, for the following purposes: (i) execution and delivery of any amendment, supplement or change to or modification of this ordinance; (ii)removal of the Bond Registrar and selection and appointment of any successor Bond Registrar other than a successor state fiscal agent; and (iii) any initiation or approval of any action not described in (i) or (ii) above which requires Bond holder consent. (3) Any reorganization or liquidation plan with respect to the City must be acceptable to the Insurer. In the event of any reorganization or liquidation, the Insurer shall have the right to vote on behalf of all Bond holders who hold Ambac Assurance-insured Bonds absent a default by the Insurer under the Bond Insurance Policy. (4) Anything in this ordinance to the contrary notwithstanding, upon the occurrence and continuance of an event of default as defined herein, the Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the Bond holders or the Bond Registrar for the benefit of the Bond holders. (5) Notwithstanding anything herein to the contrary, in the event that the principal and/or interest due on the Bonds shall be paid by the Insurer pursuant to the Bond Insurance Policy, the Bonds shall remain outstanding for all purposes, not be defeased or -27- P:~uuNxuMN208 02~09/16 otherwise satisfied and not be considered paid by the City and all covenants, agreements and other obligations of the City to the registered owners shall continue to exist and shall run to the benefit of the Insurer, and the Insurer shall be subrogated to the rights of such registered owners. (6) To the extent that this ordinance confers upon or gives or grants to the Insurer any right, remedy or claim under or by reason of this ordinance, the Ifisurer is hereby explicitly recognized as being a third-party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder. SECTION 17. General Authorization; Ratification of Prior Acts. The Finance Director, Mayor and City Manager and other appropriate officers of the City are authorized to take any actions and to execute documents as in their judgment may be necessary or desirable in order to carry out the terms of, and complete the transactions contemplated by, this ordinance. All acts taken pursuant to the authority of this ordinance but prior to its effective date are hereby ratified. SECTION 18. Severability. If any provision in this ordinance is declared by any court of competent jurisdiction to be contrary to law, then such provision shall be null and void and shall be deemed separable from the remaining provisions of this ordinance and shall in no way affect the validity of the other provisions of this ordinance or of the Bonds. -28- P:\NMN\NMN208 02/09/16 SECTION 19. Effective Date. This publication as provided by law. ADOPTED by the City Council of September 16, 2002. ATTEST: City Clerk ordinance shall be effective five days after its the City of Port Townsend, Washington, this CITY OF PORT TOWNSEND, WASHINGTON ~>r APPROVED AS TO FORM: CERTIFICATE I, the undersigned, Clerk of the City of Port Townsend, Washington (herein called the "City") and keeper of the records of the City Council of the City (herein called the "Council"), DO HEREBY CERTIFY: 1. That the attached ordinance is a true and correct copy of Ordinance No. 2812 of the City (herein called the "Ordinance"), as finally passed at a regular meeting of the City Council of the City held on September 16, 2002 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; that a quorum of the Council was present throughout the meeting and a legally sufficient nUmber of members of the City Council voted in the proper manner for the passage of said Ordinance; that all other requirements and proceedings incident to the proper adoption or passage of said Ordinance have been duly fulfilled, carried out and otherwise observed, and that I am authorized to execute this certificate. DATED this September 16, 2002. ity Clerk P:\NMN~NMN208 02/09116