Ordinance 3460CITY OF EDMONDS, WASHINGTON
ORDINANCE NO. 3460
AN ORDINANCE of the City of Edmonds, Washington, relating to
contracting indebtedness; providing for the issuance, specifying the maturities,
interest rates, terms and covenants of $7,000,000 par value of Unlimited Tax
General Obligation Refunding Bonds, 2003, to provide part of the funds with which
to pay the cost of advance refunding a portion of the City's outstanding Unlimited
Tax General Obligation Bonds, 1996, and paying the administrative costs of such
refunding and the costs of issuance and sale of such bonds; establishing a bond
redemption fund; providing for and authorizing the purchase of certain obligations
out of the proceeds of the sale of the bonds herein authorized and for the use and
application of the money derived from those investments; authorizing the execution
of an agreement with U.S. Bank National Association of Seattle, Washington, as
refunding trustee; providing for the call, payment and redemption of the outstanding
bonds to be refunded; providing for bond insurance; and approving the sale and
providing for the delivery of the bonds to Seattle - Northwest Securities Corporation.
of Seattle, Washington.
Passed June 24, 2003
This document prepared by:
Foster Pepper & Shefelman PLLC
1111 Third Avenue, Suite 3400
Seattle, Washington 98101
(206) 447 -4400
50384285.03
Section 1
Section 2
Section 3.
Section 4.
Section 5.
Section 6.
Section 7.
Section 8.
TABLE OF CONTENTS
Definitions............................................................................. ...............................
Authorization and Description of Bonds ............................. :.......................
Registration and Transfer of Bonds .............................. ...............................
Paymentof Bonds ......................................................... ...............................
Redemption Provisions and Open Market Purchase of Bonds ...................
Noticeof Redemption ................................................... ...............................
Failure to Redeem Bonds .............................................. ...............................
Pled e of Taxes
Page
2
4
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g................................................................... ...............................
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Section 9.
Form and Execution of Bonds ........................................................... ..............................9
Section10.
Bond Registrar .................................................................................. .............................10
Section 11.
Preservation of Tax Exemption for Interest on Bonds ..................... .............................11
Section 12.
Designation of Bonds as "Qualified Tax- Exempt Obligations." ..... .............................11
Section 13.
Refunding or Defeasance of the Bonds ............................................ .............................12
Section14.
Bond Fund ......................................................................................... .............................13
Section 15.
Refunding of Refunded Bonds ......................................................... .............................14
Section 16.
Call for Redemption of the Refunded Bonds ................................... .............................17
Section 17.
City Findings with Respect to Refunding ......................................... .............................17
Section 18.
Approval of Bond Purchase Contract ................:.............................. .............................18
Section 19.
Preliminary Official Statement Deemed Final ................................. .............................18
Section 20.
Undertaking to Provide Continuing Disclosure ............................... .............................19
Section 21.
Bond Insurance ................................................................................. .............................21
Section 22.
Payment Procedures Under Financial Guaranty Policy ................... .............................22
Section 23.
Parties Interested Herein ................................................................... .............................24
Section 24.
Effective Date of Ordinance .............................................................. .............................26
50384285.03
CITY OF EDMONDS, WASHINGTON
ORDINANCE NO. 3460
AN ORDINANCE of the City of Edmonds, Washington, relating to contracting
indebtedness; providing for the issuance, specifying the maturities, interest rates,
terms and covenants of $7,000,000 par value of Unlimited Tax General Obligation
Refunding Bonds, 2003, to provide part of the funds with which to pay the cost of
advance refunding a portion of the City's outstanding Unlimited Tax General
Obligation Bonds, 1996, and paying the administrative costs of such refunding and
the costs of issuance and sale of such bonds; establishing a bond redemption fund;
providing for and authorizing the purchase of certain obligations out of the proceeds
of the sale of the bonds herein authorized and for the use and application of the
money derived from those investments; authorizing the execution of an agreement
with U.S. Bank National Association of Seattle, Washington, as refunding trustee;
providing for the call, payment and redemption of the outstanding bonds to be
refunded; providing for bond insurance; and approving the sale and providing for the
delivery of the bonds to Seattle- Northwest Securities Corporation of Seattle,
Washington.
WHEREAS, pursuant to Ordinance No. 3106, the City of Edmonds, Washington (the
"City ") heretofore issued its $9,275,000 par value Unlimited Tax General Obligation Bonds,
1996 (the "1996 Bonds "), for the purpose of paying the cost of constructing public safety
facilities, and by that ordinance reserved the right to redeem the 1996 Bonds maturing on or after
December 1, 2007, prior to their maturity at any time on or after December 1, 2006, as a whole
or in part (within one or more maturities selected by the City and by lot within a maturity in such
manner as the Bond Registrar shall determine), at a price of par plus accrued interest to the date
fixed for redemption; and
WHEREAS, after due consideration, it appears to the City Council that a portion of the
1996 Bonds (hereinafter defined as the "Refunded Bonds ") may be refunded by the issuance and
sale of the unlimited tax general obligation refunding bonds authorized herein (the "Bonds "), so
that a substantial savings will be effected by the difference between the principal and interest
50384285.03
cost over the life of the Bonds and the principal and interest cost over the life of the Refunded
Bonds but for such refunding, which refunding will be effected by the Refunding Plan
(hereinafter defined); and
WHEREAS, to effect that refunding in the manner that will be most advantageous to the
City it is found necessary and advisable that certain Acquired Obligations (hereinafter defined)
bearing interest and maturing at such time or times as necessary to accomplish the refunding as
aforesaid be purchased out of a portion of the proceeds of the Bonds and other money of the
City; and
WHEREAS, the City Council deems it to be in the best interests of the City to issue and
sell the Bonds to pay part of the cost of advance refunding the Refunded Bonds and to pay the
administrative costs of such refunding and the costs of issuance and sale of the Bonds; and
WHEREAS, Ambac Assurance Corporation, a Wisconsin - domiciled stock insurance
company ( "Ambac Assurance" or the 'Bond Insurer "), has made a commitment to issue an
insurance policy (the "Financial Guaranty Insurance Policy ") insuring the payment when due of
the principal of and interest on the Bonds as provided therein, and the City Council deems that
the purchase of such Financial Guaranty Insurance Policy is in the best interest of the City; and
WHEREAS, Seattle- Northwest Securities Corporation of Seattle, Washington, has offered
to purchase the Bonds under the terms and conditions hereinafter set forth in the form of a bond
purchase agreement, and the City Council has determined it is in the best interest of the City to
accept that offer; NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DO ORDAIN
AS FOLLOWS:
Section 1. Definitions. As used in this ordinance the following words shall have the
following meanings:
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"Acquired Obligations" means those United States Treasury Certificates of Indebtedness,
Notes, and Bonds - -State and Local Government Series and other direct, noncallable obligations
of the United States of America purchased to accomplish the refunding of the Refunded Bonds
as authorized by this ordinance.
"Bond Insurer" or " Ambac Assurance" means Ambac Assurance Corporation, a
Wisconsin - domiciled stock insurance company.
"Bond Fund" means the Unlimited Tax General Obligation Refunding Bond Fund, 2003,
"Bond Register" means the registration books of the Bond Registrar on which are recorded
the names of the owners of the Bonds.
"Bond Registrar" means, collectively, the fiscal agent and co -fiscal agent of the State of
Washington as the same may be designated from time to time.
"Bonds" means the $7,000,000 par value Unlimited Tax General Obligation Refunding
Bonds, 2003, of the City authorized to be issued by this ordinance.
"City" means the City of Edmonds, Washington, a duly organized and existing noncharter
code city under the laws of the State of Washington.
"Code" means the Internal Revenue Code of 1986, as amended.
"DTC" means The Depository Trust Company.
"Letter of Representations" means the Blanket Issuer Letter of. Representations dated
August 6, 1996, between DTC and the City.
"Financial Guaranty Insurance Policy" means the financial guaranty insurance policy issued
by the Bond Insurer insuring the payment when due of the principal of and interest on the Bonds as
provided herein.
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"Refunded Bonds" means the following outstanding Unlimited Tax General Obligation
Bonds, 1996, of the City, issued pursuant to Ordinance No. 3106, the refunding of which has
been provided for by this ordinance:
Maturity Year
Refunded
Interest
(December 1)
Principal
Rate
2008
$ 170,000'
5.15%
20102
1,135,000
5.40
2011
645,000
5.50
2012
700,000
5.55
20162
3,465,000
5.60
'Represents a portion of 2008 maturity
2Tenn Bonds
"Refunding Plan" means:
(a) the placement of sufficient proceeds of the Bonds which, with other
money of the City, if necessary, will acquire the Acquired Obligations to be
deposited, with cash, if necessary, with the Refunding Trustee;
(b) the payment of the interest on the Refunded Bonds when due up to
and including December 1, 2006, and the call, payment, and redemption on
December 1, 2006, of all of the outstanding Refunded Bonds at a price of par; and
(c) the payment of the costs of issuing the Bonds and the costs of
carrying out the foregoing elements of the Refunding Plan.
"Refunding Trust Agreement" means a Refunding Trust Agreement between the City and
the Refunding Trustee substantially in the form of that which is on file with the City Clerk and by
this reference incorporated herein.
"Refunding Trustee" means U.S. Bank National Association of Seattle, Washington,
serving as trustee or escrow agent or any successor trustee or escrow agent.
Section 2. Authorization and Description of Bonds. The City shall issue the Bonds for
the purpose of carrying out the Refunding Plan. The Bonds shall be called Unlimited Tax
General Obligation Refunding Bonds, 2003, of the City; shall be in the aggregate principal
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amount of $7,000,000; shall be dated July 1, 2003; shall be in the denomination of $5,000 or any
integral multiple thereof within a single maturity; shall be numbered separately in the manner
and with any additional designation as the Bond Registrar deems necessary for purposes of
identification; shall bear interest (computed on the basis of a 360 -day year of twelve 30 -day
months) payable semiannually on each June 1 and December 1, commencing December 1, 2003,
to the maturity or earlier redemption of the Bonds; and shall mature on December in years and
amounts and bear interest at the rates per annum as follows:
Maturity
Interest
Years
Amounts
Rates
2003
$ 70,000
2.000%
2004
90,000
2.000
2005
90,000
2.000
2006
95,000
2.000
2007
90,000
2.250
2008
265,000
2.375
2009
640,000
2.500
2010
670,000
3.000
2011
715,000
3.125
2012
755,000
3.250
2013
800,000
3.100
2014
855,000
3.150
2015
905,000
3.400
2016
960,000
3.500
$885,000 of principal of the Bonds shall constitute nonvoted debt of the City.
Section 3. Registration and Transfer of Bonds. The Bonds shall be issued only in
registered form as to both principal and interest and shall be recorded on the Bond Register. The
Bond Register shall contain the name and mailing address of the owner of each Bond and the
principal amount and number of each of the Bonds held by each owner.
Bonds surrendered to the Bond Registrar may be exchanged for Bonds in any authorized
denomination of an equal aggregate principal amount and of the same interest rate and maturity.
Bonds may be transferred only if endorsed in the manner provided thereon and surrendered to
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the Bond Registrar. Any exchange or transfer shall be without cost to the owner or transferee.
The Bond Registrar shall not be obligated to exchange or transfer any Bond during the 15 days
preceding any principal payment or, redemption date.
The Bonds initially shall be registered in the name of Cede & Co., as the nominee of
DTC. The Bonds so registered shall be held in fully immobilized form by DTC as depository in
accordance with the provisions of a Letter of Representations. Neither the City nor the Bond
Registrar shall have any responsibility or obligation to DTC participants or the persons for whom
they act as nominees with respect to the Bonds regarding accuracy of any records maintained by
DTC or DTC participants of any amount in respect of principal of or interest on the Bonds, or
any notice that is permitted or required to be given to registered owners hereunder (except such
notice as is required to be given by the Bond Registrar to DTC).
For as long as any Bonds are held in fully immobilized form, DTC, its nominee or its
successor depository shall be deemed to be the registered owner for all purposes hereunder and
all references to registered owners, bondowners, bondholders or the like shall mean DTC or its
nominee and shall not mean the owners of any beneficial interests in the Bonds. Registered
ownership of such Bonds, or any portions thereof, may not thereafter be transferred except: (i) to
any successor of DTC or its nominee, if that successor shall be qualified under any applicable
laws to provide the services proposed to be provided by it; (ii) to any substitute depository
appointed by the City or such substitute depository's successor; or (iii) to any person if the
Bonds are no longer held in immobilized form.
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 that it no longer
wishes to continue 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
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substitute depository shall be qualified under any applicable laws to provide the services
proposed to be provided by it.
If (i) DTC or its successor (or substitute depository or its successor) resigns from its
functions as depository, and no substitute depository can be. obtained, or (ii) the City determines
that the Bonds are to be in certificated form, the ownership of Bonds may be transferred to any
person as provided herein and the Bonds no longer shall be held in fully immobilized form.
Section 4. Payment of Bonds. Both principal of and interest on the Bonds shall be
payable in lawful money of the United States of America. Interest on the Bonds shall be paid by
checks or drafts of the Bond Registrar mailed on the interest payment date to the registered
owners at the addresses appearing on the Bond Register on the 15th day of the month preceding
the interest payment date. Principal of the Bonds shall be payable upon presentation and
surrender of the Bonds by the registered owners at either of the principal offices of the Bond
Registrar at the option of the owners. Notwithstanding the foregoing, as long as the Bonds are
registered in the name of DTC or its nominee, payment of principal of and interest on the Bonds
shall be made in the manner set forth in the Letter of Representations.
Section 5. Redemption Provisions and Open Market Purchase of Bonds. Bonds
maturing in the years 2003 through 2013, inclusive, shall be issued without the right or option of
the City to redeem those Bonds prior to their stated maturity dates. The City reserves the right
and option to redeem the Bonds maturing on or after December 1, 2014, prior to their stated
maturity dates at any time on or after December 1, 2013, as a whole or in part (within one or
more maturities selected by the City and randomly within a maturity in such manner as the Bond
Registrar shall determine), at par plus accrued interest to the date fixed for redemption.
Portions of the principal amount of any Bond, in installments of $5,000 or any integral
multiple thereof, may be redeemed. If less than all of the principal amount of any Bond is
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redeemed, upon surrender of that Bond at either of the principal offices of the Bond Registrar,
there shall be issued to the registered owner, without charge therefor, a new Bond (or Bonds, at
the option of the registered owner) of the same maturity and interest rate in any of the
denominations authorized by this ordinance in the aggregate principal amount remaining
unredeemed.
The City further reserves the right and option to purchase any or all of the Bonds in the
open market at any time at any price plus accrued interest to the date of purchase.
All Bonds purchased or redeemed under this section shall be cancelled.
Notwithstanding the foregoing, for as long as the Bonds are registered in the name of
DTC or its nominee, selection of Bonds for redemption shall be in accordance with the Letter of
Representations.
Section 6. Notice of Redem tp ion. The City shall cause notice of any intended
redemption of Bonds to be given not less than 30 nor more than 60 days prior to the date fixed
for redemption by first -class mail, postage prepaid, to the registered owner of any Bond to be
redeemed at the address appearing on the Bond Register at the time the Bond Registrar prepares
the notice, and the requirements of this sentence shall be deemed to have been fulfilled when
notice has been mailed as so provided, whether or not it is actually received by the owner of any
Bond. Interest on Bonds called for redemption shall cease to accrue on the date fixed for
redemption unless the Bond or Bonds called are not redeemed when presented pursuant to the
call. In addition, the redemption notice shall be mailed within the same period, postage prepaid,
to Moody's Investors Service, Inc., and Standard & Poor's at their offices in New York, New
York, or their successors, to Seattle- Northwest Securities Corporation at its principal office in
Seattle, Washington, or "its successor, to the Bond Insurer at its principal office in New York,
New York, or its successor, to each NRMSIR or the MSRB and to such other persons and with
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such additional information as the Administrative Services Director of the City shall determine,
but these additional mailings shall not be a condition precedent to the redemption of Bonds.
Notwithstanding the foregoing, for as long as the Bonds are registered in the name of DTC or its
nominee, notice of redemption shall be given in accordance with the Letter of Representations.
Section 7. Failure to Redeem Bonds. If any Bond is not redeemed when properly
presented at its maturity or call date, the City shall be obligated to pay interest on that Bond at
the same rate provided in the Bond from and after its maturity or call date until that Bond, both
principal and interest, is paid in full or until sufficient money for its payment in full is on deposit
in the Bond Fund hereinafter created and the Bond has been called for payment by giving notice
of that call to the registered owner thereof.
Section 8. Pledge of Taxes. For as long as any of the Bonds are outstanding, the City
irrevocably pledges to levy taxes annually without limitation as to rate or amount on all of the
taxable property within the City in an amount sufficient, together with other money legally
available and to be used therefor, to pay when due the principal of and interest on the Bonds, and
the full faith, credit and resources of the City are pledged irrevocably for the annual levy and
collection of those taxes and the prompt payment of that principal and interest.
Section 9. Form and Execution of Bonds. The Bonds shall be prepared in a form
consistent with the provisions of this ordinance and state law, shall be signed by the Mayor and
City Clerk, either or both of whose signatures may be manual or in facsimile, and the seal of the
City or a facsimile reproduction thereof shall be impressed or printed thereon.
Only Bonds bearing a Certificate of Authentication in the following form, manually
signed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the
benefits of this ordinance:
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CERTIFICATE OF AUTHENTICATION
This Bond is one of the fully registered City of Edmonds, Washington,
Unlimited Tax General Obligation Refunding Bonds, 2003, described in the Bond
Ordinance.
WASHINGTON STATE FISCAL AGENT
Bond Registrar
Authorized Signer
The authorized signing of a Certificate of Authentication shall be conclusive evidence that the Bond
so authenticated has been duly executed, authenticated and delivered and is entitled to the benefits
of this ordinance.
If any officer whose facsimile signature appears on the Bonds ceases to be an officer of
the City authorized to sign bonds before the Bonds bearing his or her facsimile signature are
authenticated or delivered by the Bond Registrar or issued by the City, those Bonds nevertheless
may be authenticated; issued and delivered and, when authenticated, issued and delivered, shall
be as binding on the City as though that person had continued to be an officer of the City
authorized to sign bonds. Any Bond also may be signed on behalf of the City by any person
who, on the actual .date of signing of the Bond, is an officer of the City authorized to sign bonds,
although he or she did not hold the required office on the date of issuance of the Bonds.
Section 10. Bond Registrar. The Bond Registrar shall keep, or cause to be kept, at its
principal corporate trust office, sufficient books for the registration and transfer of the Bonds,
which shall be open to inspection by the City at all times. The Bond Registrar is authorized, on
behalf of the City, to authenticate and deliver Bonds transferred or exchanged in accordance with
the provisions of the Bonds and this ordinance, to serve as the City's paying agent for the Bonds
and to carry out all of the Bond Registrar's powers and duties under this ordinance and City
Ordinance No. 2451 establishing a system of registration for the City's bonds and obligations.
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The Bond Registrar shall be responsible for its representations contained in the Bond
Registrar's Certificate of Authentication on the Bonds. The Bond Registrar may become the
owner of Bonds with the same rights it would have if it were not the Bond Registrar and, to the
extent permitted by law, may act as depository for and permit any of its officers or directors to
act as members of, or in any other capacity with respect to, any committee formed to protect the
rights of Bond owners.
Section 11. Preservation of Tax Exemption for Interest on Bonds. The City covenants
that it will take all actions necessary to prevent interest on the Bonds from being included in
gross income for federal income tax purposes, and it will neither take any action nor make or
permit any use of proceeds of the Bonds or other funds of the City treated as proceeds of the
Bonds at any time during the term of the Bonds, which will cause interest on the Bonds to be
included in gross income for federal income tax purposes. The City also covenants that it will, to
the extent the arbitrage rebate requirement of Section 148 of the Internal Revenue Code of 1986,
as amended (the "Code "), is applicable to the Bonds, take all actions necessary to comply (or to
be treated as having complied) with that requirement in connection with the Bonds, including the
calculation and payment of any penalties that the City has elected to pay as an alternative to
calculating rebatable arbitrage, and the payment of any other penalties if required under Section
148 of the Code to prevent interest on the Bonds from being included in gross income for federal
income tax purposes. The City certifies that it has not been notified of any listing or proposed
listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage
certifications may not be relied upon.
Section 12. Designation of Bonds as "Qualified Tax - Exempt Obligations." The City has
determined and certifies that (a) the Bonds are not "private activity bonds" within the meaning of
Section 141 of the Code; (b) the reasonably anticipated amount of tax - exempt obligations (other
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than private activity bonds and other obligations not required to be included in such calculation)
which the City and any entity subordinate to the City (including any entity which the City
controls, which derives its authority to issue tax - exempt obligations from the City or which
issues tax - exempt obligations on behalf of the City) will issue during the calendar year in which
the Bonds are issued will not exceed $10,000,000; and (c) the amount of tax - exempt obligations,
including the Bonds, designated by the City as "qualified tax - exempt obligations" for the
purposes of Section 265(b)(3) of the Code during the calendar year in which the Bonds are
issued does not exceed $10,000,000. The City designates the Bonds as "qualified tax- exempt
obligations" for the purposes of Section 265(b)(3) of the Code.
Section 13. Refunding or Defeasance of the Bonds. The City may issue refunding bonds
pursuant to the laws of the State of Washington or use money available from any other lawful
source to pay when due the principal of and interest on the Bonds, or any portion thereof
included in a refunding or defeasance plan, and to redeem and retire, refund or defease all such
then - outstanding Bonds (hereinafter collectively called the "defeased Bonds ") and to pay the
costs of the refunding or defeasance. If money and /or "government obligations" (as defined in
chapter 39.53 RCW, as now or hereafter amended) maturing at a time or times and bearing
interest in amounts (together with money, if necessary) sufficient to redeem and retire, refund or
defease the defeased Bonds in accordance with their terms are set aside in a special trust fund or
escrow account irrevocably pledged to that redemption, retirement or defeasance of defeased
Bonds (hereinafter called the "trust account "), then all right and interest of the owners of the
defeased Bonds in the covenants of this ordinance and in the funds and accounts obligated to the
payment of the defeased Bonds shall cease and become void. The owners of defeased Bonds
shall have the right to receive payment of the principal of and interest on the defeased Bonds
from the trust account. The City shall include in the refunding or defeasance plan such
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provisions as the City deems necessary for the random selection of any defeased Bonds that
constitute less than all of a particular maturity of the Bonds, for notice of the defeasance to be
given to the owners of the defeased Bonds and to such other persons as the City shall determine,
and for any required replacement of Bond certificates for defeased Bonds. The defeased Bonds
shall be deemed no longer outstanding, and the City may apply any money in any other fund or
account established for the payment or redemption of the defeased Bonds to any lawful purposes
as it shall determine.
Notwithstanding anything in this section to the contrary, if the principal of and/or interest
due on the Bonds is paid by the Bond Insurer pursuant to the Financial Guaranty Insurance Policy,
the Bonds shall be treated as remaining outstanding for all purposes and shall not be considered paid
by the City, and the covenants, agreements and other obligations of the City to the registered owners
of the Bonds shall continue to exist and run to the benefit of the Bond Insurer, and the Bond Insurer
shall be subrogated to the rights of the registered owners.
If the Bonds are registered in the name of DTC or its nominee, notice of any defeasance
of Bonds shall be given to DTC in the manner prescribed in the Letter of Representations for
notices of redemption of Bonds.
Section 14. Bond Fund. There is created and established in -the office of the
Administrative Services Director of the City a special fund designated as the Unlimited Tax
General Obligation Refunding Bond Fund, 2003 (the "Bond Fund "). Accrued interest on the
Bonds, if any, received from the sale and delivery of the Bonds shall be paid into the Bond Fund.
All taxes collected for and allocated to the payment of the principal of and interest on the Bonds
shall be deposited in the Bond Fund.
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"(a) At least one (1) day prior to all Interest Payment Dates the Trustee
or Paying Agent [the Bond Registrar], if any, will determine whether there will be
sufficient funds in the Funds and Accounts to pay the principal of or interest on
the Obligations on such Interest Payment Date. If the Trustee or Paying Agent, if
any, determines that there will be insufficient funds in such Funds or Accounts,
the Trustee or Paying Agent, if any, shall so notify Ambac Assurance. Such
notice shall specify the amount of the anticipated deficiency, the Obligations to
which such deficiency is applicable and whether such Obligations will be
deficient as to principal or interest, or both. If the Trustee or Paying Agent, if
any, has not so notified Ambac Assurance at least one (1) day prior to an Interest
Payment Date, Ambac Assurance will make payments of principal or interest due
on the Obligations on or before the first (1st) day next following the date on
which Ambac Assurance shall have received notice of nonpayment from the
Trustee or Paying Agent, if any.
"(b) the Trustee or Paying Agent, if any, shall, after giving notice to
Ambac Assurance as provided in (a) above, make available to Ambac Assurance
and, at Ambac Assurance's direction, to The Bank of New York in New York,
New York, as insurance trustee for Ambac Assurance or any successor insurance
trustee (the "Insurance Trustee "), the registration books of the Obligor maintained
by the Trustee or Paying Agent, if any, and all records relating to the Funds and
Accounts maintained under this ordinance.
"(c) the Trustee or Paying Agent, if any, shall provide Ambac
Assurance and the Insurance Trustee with a list of registered owners of
Obligations entitled to receive principal or interest payments from Ambac
Assurance under the terms of the Financial Guaranty Insurance Policy, and shall
make arrangements with the Insurance Trustee (i) to mail checks or drafts to the
registered owners of Obligations entitled to receive full or partial interest
payments from Ambac Assurance and (ii) to pay principal upon Obligations
surrendered to the Insurance Trustee by the registered owners of Obligations
entitled to receive full or partial principal payments from Ambac Assurance.
"(d) the Trustee or Paying Agent, if any, shall, at the time it provides
notice to Ambac Assurance pursuant to (a) above, notify registered owners of
Obligations entitled to receive the payment of principal or interest thereon from
Ambac Assurance (i) as to the fact of such entitlement, (ii) that Ambac Assurance
will remit to them all or a part of the interest payments next coming due upon
proof of 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 Ambac Assurance, they must
surrender their Obligations (along with an appropriate instrument of assignment in
form satisfactory to the Insurance Trustee to permit ownership of such
Obligations to be registered in the name of Ambac Assurance) for payment to the
Insurance Trustee, and not the Trustee or Paying Agent, if any, and (iv) that
should they be entitled to receive partial payment of principal from Ambac
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50384285.03
Assurance, they must first surrender their Obligations for payment thereon first to
the Trustee or Paying Agent, if any, who shall note on such Obligations the
portion of the principal paid by the Trustee or Paying Agent, if any, and then,
along with an appropriate instrument of assignment in form satisfactory to the
Insurance Trustee, to the Insurance Trustee, which will then pay the unpaid
portion of principal.
"(e) in the event that the Trustee or Paying Agent, if any, 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 Holder by or on behalf of the Obligor has been
deemed a preferential transfer and theretofore 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 Trustee or Paying Agent, if any, shall, at the time Ambac
Assurance is notified pursuant to (a) 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 Ambac Assurance to the extent of such recovery
if sufficient funds are not otherwise available, and the Trustee or Paying Agent, if
any, shall furnish to Ambac Assurance its records evidencing the payments of
principal of and interest on the Obligations which have been made by the Trustee
or Paying Agent, if any, and subsequently recovered from registered owners and
the dates on which such payments were made.
"(f) in addition to those rights granted Ambac Assurance under this
ordinance, Ambac Assurance shall, to the extent it makes payment of principal of
or interest on Obligations, become subrogated to the rights of the recipients of
such payments in accordance with the terms of the Financial Guaranty Insurance
Policy, and to evidence such subrogation (i) in the case of subrogation as to
claims for past due interest, the Trustee or Paying Agent, if any, shall note Ambac
Assurance's rights as subrogee on the registration books of the Obligor maintained
by the Trustee or Paying Agent, if any, upon receipt from Ambac Assurance of
proof of the payment of interest thereon to the registered owners of the
Obligations, and (ii) in the case of subrogation as to claims for past due principal,
the Trustee or Paying Agent, if any, shall note Ambac Assurance's rights as
subrogee on the registration books of the Obligor maintained by the Trustee or
Paying Agent, if any, upon surrender of the Obligations by the registered owners
thereof together with the proof of the payment of principal thereof."
Section 23. Parties Interested Herein. To the extent that this ordinance confers upon or
gives or grants to the Bond Insurer any right, remedy or claim under or by reason of this
ordinance, the Bond Insurer is explicitly recognized as being a third -party beneficiary hereunder
and may enforce any such right, remedy or claim conferred, given or granted hereunder.
Nothing expressed or implied in this ordinance is intended or shall be construed to confer upon,
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50384285.03
or to give or grant to, any person or entity, other than the City, the Bond Insurer and the
registered owners of the Bonds, any right, remedy or claim under or by reason of this ordinance
or any covenant, condition or stipulation hereof, and all covenants, stipulations, promises and
agreements in this ordinance contained by and on behalf of the City shall be for the sole and
exclusive benefit of the City, the Bond Insurer and the registered owners of the Bonds.
Notwithstanding any other provision of this ordinance, the City shall notify the Bond
Insurer immediately if at any time there are insufficient funds to make any payments of principal
and/or interest as required and immediately upon the occurrence of any event of default
hereunder. Anything in this ordinance to the contrary notwithstanding, upon the occurrence and
continuance of an event of default, the Bond Insurer shall be entitled to control and direct the
enforcement of all rights and remedies granted to the Bond owners for the benefit of the Bond
owners pursuant to state law.
Any provision of this ordinance expressly recognizing or granting rights in or to the Bond
Insurer may not be amended in any manner which affects the rights of the Bond Insurer
hereunder without the prior written consent of the Bond Insurer. Unless otherwise provided in
this section, the Bond Insurer's consent shall be required, in addition to Bond owner consent,
when required, for the following purposes: (i) execution and delivery of any supplemental
ordinance, and (ii) initiation or approval of any other action which requires Bond owner consent.
Any reorganization or liquidation plan with respect to the City must be acceptable to the
Bond Insurer. In the event of any reorganization or liquidation, the Bond Insurer shall have the
right to vote on behalf of all Bond owners who hold Ambac Assurance - insured bonds absent a
default by the Bond Insurer under the applicable Financial Guaranty Insurance Policy insuring
such bonds.
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50384285.03
Section 24. Effective Date of Ordinance. This ordinance shall take effect and be in
force from and after its passage and five days following its publication as required by law.
PASSED by the City Council and APPROVED by the Mayor of the City of Edmonds,
Washington, at a regular open public meeting thereof this 24h day of June, 2003.
CITY OF EDMONDS, WASHINGTON
By
May
•0U :"►•
X 6 �`,I (e
Bond Couns6f o
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50384285.03
SUMMARY OF ORDINANCE NO. 3460
of the City of Edmonds, Washington
On the 24th day of June, 2003, the City Council of the City of Edmonds, passed
Ordinance No. 3460. A summary of the content of said ordinance, consisting of the
title, provides as follows:
AN ORDINANCE of the City of Edmonds, Washington, relating to
contracting indebtedness; providing for the issuance, specifying the
maturities, interest rates, terms and covenants of $7,000,000 par value of
Unlimited Tax General Obligation Refunding Bonds, 2003, to provide part of
the funds with which to pay the cost of advance refunding a portion of the
City's outstanding Unlimited Tax General Obligation Bonds, 1996, and
paying the administrative costs of such refunding and the costs of issuance
and sale of such bonds; establishing a bond redemption fund; providing for
and authorizing the purchase of certain obligations out of the proceeds of
the sale of the bonds herein authorized and for the use and application of
the money derived from those investments; authorizing the execution of an
agreement with U.S. Bank National Association of Seattle, Washington, as
refunding trustee; providing for the call, payment and redemption of the
outstanding bonds to be refunded; providing for bond insurance; and
approving the sale and providing for the delivery of the bonds to Seattle -
Northwest Securities Corporation of Seattle, Washington.
The full text of this Ordinance will be mailed upon request.
DATED this 25th day of June, 2003.
,Qw«- �c�,- -mil • C�
CITY CLERK, SANDRA S. CHASE
CERTIFICATION
Deputy
I, the undersigned, City Clerk of the City of Edmonds, Washington (the "City "), hereby
certify as follows:
1. The attached copy of Ordinance No. 3460 (the "Ordinance ") is a full, true and.correct
copy of an ordinance duly passed at a regular meeting of the City Council of the City held at the
regular meeting place thereof on June 24, 2003, as that ordinance appears on the minute book of
the City; and the Ordinance will be in full force and effect five days after the publication of its
summary in the City's official newspaper; and
2. A quorum of the members of the City Council was present throughout the meeting
and a majority of those members present voted in the proper manner .for the passage of the
Ordinance.
.IN WITNESS WHEREOF, I have hereunto set my hand this 3�,i...day of
2003. '
CITY OF EDMONDS, WASHINGTON
r
LINDA C. HYND., Deputy City Clerk
50384285.03
Affidavit of Publication
STATE OF WASHINGTON,
COUNTY OF SNOHOMISH S.S.
SUMMARY nE0Rr)INANCE- NO_3460
of the City of Edmonds, Washington
On the 24th day of June, 2003, the Cillyy Council of the City
of Edmonds, passed Ordinance No. 346b. A summary of the
content of said ordinance, consisting of the title, provides as
follows:
AN ORDINANCE of the City of Edmonds, Washington,
relating to contracting indebtedness; providing for the is-
suance, specifying the maturities, interest rates, terms
and covenants of $7,000,000 par value of Unlimited Tax
General Obligation Refunding Bonds, 2003, to provide
Fart of the funds with which to pay the cost of advance re-
funding a portion of the City's outstanding Unlimited Tax
General Obligation Bonds, 1996, and paying the adminis-
trative costs of such refunding and the costs of issuance
and sale of such bonds; establishing a bond redemption
fund; providing for and authorizing the purchase of cer-
tain obligations out of the proceeds of the sale of the
bonds herein authorized and for the use and application
of the money derived from those Investments; authoriz-
ing the execution of an agreement with U.S. Bank Nation-
al Association of Seattle, Washington, as refunding trust-
ee; providing for the call, payment and redemption of the
outstanding bonds to be refunded; providing for bond in-
surance; and approving the sale and providing for the de-
livery of the bonds to Seattle- Northwest Securities Corpo-
ration of Seattle, Washington.
The full text of this Ordinance will be mailed upon request.
DATED this 25th day of June, 2003.
Published: June 29, 2003. CITY CLERK, SANDRA S. CHASE
T
RECEIVED
J u L 0 7 2003
EDMONDS CITY CLERK
The undersigned, being first duly sworn on oath deposes and says that she is Principal Clerk
of THE HERALD, a daily newspaper printed and published in the City of Everett, County of
Snohomish, and State of Washington; that said newspaper is a newspaper of general
circulation in said County and State; that said newspaper has been approved as a legal
newspaper by order of the Superior Court of Snohomish County and that the notice
City of Edmonds
Summary of Ordinance No. 3460
a printed copy of which is hereunto attached, was published in said newspaper proper and not
in supplement form, in the regular and entire edition of said paper on the following days and
times, namely:
,Tune 29, 2003
and that said
Subscribed
day of
was regularly distributed to its subscribers during all of said period.
to before me this
Notary Public in and for the State of
County.
30th
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a e t, Tftrlmstish
A : 'PUBLIC •�?
I, ,VVWA�c�,�=
Account Name: City Of Edmonds Edmonds, City Of Account Number: 101416 Order Number: 0001054275