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HomeMy WebLinkAbout3362 CITY OF BR~MERTON, WASHINGTON AN ORDINANCE of the City of Bremerton, Washington, providing for the issuance of $295,000.00 par value of "General Obligation Refunding Bonds, 1977," for the purpose of providing a part of the funds to redeem $295,000.00 par value of its outstanding "General Obligation Bonds, 1976," dated April 1, 1976; fixing the date, form, denominations, maturities, interest rate, terms and covenants of such refunding bonds; providing for and authorizing the purchase of certain obligations of the United States of America out of the proceeds of the sale of such refunding bonds and other money of the City available therefor and for the use and application of the money to be derived from such investment; providing for the redemption of the outstanding bonds to be refunded on April 1, 1986; authorizing the execution of an agreement with Seattle-First National Bank, Seattle, Washington, as Refunding Trustee; confirming the sale and pro- viding for the delivery of the refunding bonds to First Washington Corporation, Seattle, Washington; and declaring an emergency. WHEREAS, the City of Bremerton, Washington (hereinafter called the "City"), now has outstanding $450,000.00 principal amount of its "General Obligation Bonds, 1976" (hereinafter called the "Outstanding Bonds"), issued under date of April 1, 1976, which Outstanding Bonds mature serially on April 1 in. each of the years 1978 to 1996, inclusive, and bear interest at var.iqus rates from 6% to 8% per annum; and WHEREAS, under the provisions of Ordinance No. 3273 passed and approved January 28, 1976, authorizing the issuance of the Outstanding Bonds and in such bonds, the City reserved the right to redeem any or all of the Outstanding Bonds in inverse numerical order, highest numbers first, on any semiannual interest payment date from April 1, 1986, through October 1, 1989, at $100.50 per each $100.00 par value thereof, plus accrued interest, and on April 1, 1990, or on any semiannual interest payment date thereafter, at par plus accrued interest, and after April 1, 1986, there will be outstanding $295,000.00 par value of such Outstanding Bonds, being bonds numbered 32 to 90, inclusive; and WHEREAS, after due consideration it appears to the City Council that such $295,000.00 par value of the Outstanding Bonds may be refunded on April 1, 1986, by the issuance and sale of refunding bonds so that a saving will be effected by the difference between the principal and interest cost over the life of the refunding bonds and the principal and interest cost over the life of such Outstanding Bonds; and WHEREAS, in order to effect such refunding in the manner that will be most advantageous to the City and its taxpayers, it is hereby found necessary and advisable that certain obligations of the United States of America bearing interest at such time or times as necessary to pay interest on the refunding bonds until the Outstanding Bonds are refunded and retired and to pay the principal of and call premium on such Outstanding Bonds on April 1, 1986, the date when such bonds are to be called for such redemption, be purchased out of the proceeds of the sale of the refunding bonds herein authorized and other moneys of the City available therefor; and WHEREAS, under date of May 4, 1977, First Washington Corporation presented its written offer to purchase $295,000.00 par value of refunding bonds under the terms and conditions set forth in such offer whereby a reduction in interest costs of approximately $13,847.50 (which expressed in terms of present value dollars is approximately $5,714.54) may be realized by the City, which offer was duly accepted by the City Council on May 4, 1977; NOW, THEREFORE, THE CITY OF BREMERTON DOES ORDAIN: Section 1. Refunding Bonds Authorized. For the purpose of providing a part of the money required to redeem and retire on April 1, 1986, all of the then Outsta~ding Bonds numbered 32 to 90, inclusive, of a total par value of $295,000.00, and to pay a part of the cost of such refunding, the City shall now issue the refunding bonds in the principal amount of $295,000.00. -2- Section 2. Description of Refunding Bonds. The refunding bonds herein authorized to be issued and referred to herein as the Refunding Bonds shall be designated "General Obligation Refunding Bonds, 1977," of the City; shall be dated April 1, 1977; shall be in denominations of $5,000.00 each, except for Refunding Bonds numbered 1, 6, 12, 13 and 19 which shall be in the denomination of $1,000.00; shall bear interest at the rate of 5.75% per annum payable on October 1, 1977, and semiannually thereafter on April 1 and October 1 of each succeeding year, interest to maturity being evidenced by coupons to be attached to the Refunding Bonds with full obligation on the part of the City to pay interest at the bond rate from and after the bond maturity dates until the Refunding Bonds with interest are paid in full or funds sufficient to pay such Refunding Bonds with interest in full are on deposit in the bond redemption fund hereinafter referred to and the Refunding Bonds have been called for redemption. The Refunding Bonds shall be numbered and shall mature on April 1 of each year as follows: Bond Numbers ( In cl us ive) Amounts Maturi ti es 1 to 5 $ 21,000 April 1, 1987 6 to 11 26,000 April 1, 1988 12 to 18 27,000 April 1, 1989 19 to 24 26,000 April 1, 1990 25 to 30 30,000 April 1, 1991 31 to 36 30,000 April 1, 1992 37 to 42 30,000 April 1, 1993 43 to 49 35,000 April 1, 1994 50 to 56 35,000 April 1, 1995 57 to 63 35,000 April 1, 1996 Both principal of and interest on the Refunding Bonds shall be payable in lawful money of the United States of America at the office of the Treasurer of the City or, at the option of the holder, at either fiscal agency of the State of Washington in the Cities of Seattle, Washington, or New York, New York, solely out of the "General Obligation Refunding Bond Fund, 1977" (herein called the "Bond Fund"), hereinafter created in the office of the Treasurer of the City. The interest on the Refunding Bonds will be payable solely out of the investment income from certain United States government obligations purchased out of the proceeds of the sale of the Refunding Bonds and other money of the City available therefor until April 1, 1986, and thereafter both principal and interest on the Refunding Bonds shall be payable out of annual property tax levies as hereinafter set forth. Section 3. Right of Prior ..Redemption. The City hereby reserves the right to redeem the Refunding Bonds outstanding as a whole, or in part in inverse numerical order, highest numbers first, on any semiannual interest payment date from April 1, 1986, through October 1, 1989, at $100.50 per each $100.00 par value thereof, plus accrued interest, and on April 1, 1990, or on any semiannual interest payment date thereafter, .at par plus accrued interest to the date of redemption. Notice of any such intended redemption shall be given by one publication thereof in the official newspaper of the City at least once not less than 30 nor more than 45 days prior to the call date, and a copy of such notice shall be mailed within the same period to First Washington Corporation at its main office in Seattle, Washington, or its successor, if any. In addition, such redemption notice shall also be sent to Moody's Investors Service, Inc., and Standard & Poor's Corporation at their offices in New York, New York, but the mailing of such notice to such corporations shall not be a condition precedent to the redemption of such Refunding Bonds. Interest on any Refunding Bond or Refunding Bonds so called for redemption shall cease on the payment of the redemption price into the Bond Fund. Section 4. F.orm of Refunding Bonds and C?upons. The Refunding Bonds shall be in substantially the following form: -4- No. $5,000.00 ($1,000.00 on bonds -. numbered 1, 6, 12, 13 and 19) UNITED STATES OF AMERICA STATE OF WASHINGTON CITY OF BREMERTON GENERAL OBLIGATION REFUNDING BOND, 1977 5.75% The City of Bremerton, Washington, a municipal corporation of the State of Washington (hereinafter called the "City"), is justly indebted to and for value received hereby promises to pay to bearer on the FIRST DAY OF APRIL, 19 ., the principal sum of FIVE THOUSAND DOLLARS ($1,000.00 on bonds numbered 1, 6, 12, 13 and 19) together with interest thereon at the rate of 5.75% per annum until fully paid, payable on October 1, 1977, and semiannually thereafter on the first days of April and October of each year, with interest to maturity being evidenced by and payable upon the presentation and surrender of the attached interest coupons as t~ey severally become due, with full obligation on the part of the City to pay interest at the same rate from and after the maturity date, in the absence of coupons, until this bond with interest is paid in full. This bond is payable, both principal and interest, in lawful money of the United States of America at the office of the Treasurer of the City or, at the option of the holder, at either fiscal agency of the State of Washington in the cities of Seattle, Washington, or New York, New York. The City reserves the right to redeem the bonds outstanding as a whole, or in part in inverse numerical order, highest numbers first, on any semiannual interest payment date from April 1, 1986, through October 1, 1989, at $100.50 per each $100..00 par value thereof, plus accrued interest, and on April 1, 1990, or on any semiannual interest payment date thereafter, at par plus accrued interest to the date of redemption. Notice of any such intended redemption shall be given by one publication thereof in the official newspaper of the City at least once not less than 30 nor more than 45 days prior to the call date, and a copy of such notice shall be mailed within the same period to First Washington Corporation at its main office in Seattle, Washington, or its successor, if any. In addition, such redemption notice shall also be sent to Moody's Investors Service, Inc., and Standard & Poor's Corporation at their offices in New York, New York, but the mailing of such notice to such corporations shall not be a condition precedent to the redemption of such bonds. Interest on any bonds so called for redemption shall cease on the payment of the redemption price into the bond redemption fund. -5- This bond is one of a issue of $295,000.00 of bonds of like date, tenor and effect, except as to denomina- tions and maturities, and is issued by the City pursuant to the provisions of Chapter 138, Laws of 1965, Ex. Ses., of the Legislature of the State of Washington, as amended, known as the "Refunding Bond Act" (RCW Chapter 39.53), for the purpose of refunding a part of its outstanding "General Obligation Bonds, 1976," originally issued by the City for capital purposes only, other than the replacement of equipment, pursuant to an election authorizing the same and under and in accordance with the laws of the State of Washington and the ordinances of the City. The interest on this bond is payable until April 1, 1986, solely out of the investment income from certain United States government obligations purchased out of the proceeds of the sale of the bonds of this issue and certain other money of the City available therefor, and the City hereby irrevocably covenants that it will thereafter levy taxes annually upon all of the taxable property within the City without limitation as to rate or amount and in amounts sufficient to pay the principal of and interest on the bonds of this issue as the same shall become due from and after April 1, 1986. 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. It is hereby certified that all acts, conditions and things required to be done precedent to and in the issuance of this bond have been done, have happened and have been performed as required by law, and that the total indebtedness of the City, including this bond issue, does not exceed any constitutional or statutory 1 imitations. IN WITNESS WHEREOF, the City has caused this bond to be signed by the facsimile signature of its Mayor and attested by the manual signature of its City Clerk, and its corporate seal to be hereto affixed, and the interest coupons attached to be signed with the facsimile signatures of said officials this first day of April, 1977. CITY OF BREMERTON, WASHINGTON By (facsimile signature) Mayor ATTEST: City Clerk The interest coupons shall be in substantially the following form: -6- Coupon No. $143.75 ($28.75 on bonds numbered 1, 6, 12, 13 and 19) (Unless the bond referred to below has been previously redeemed) On the FIRST DAY OF (APRIL)(OCTOBER), 19 , the CITY OF BREMERTON, WASHINGTON, upon presentation an---~ surrender of the this coupon will pay to the bearer at the office of the Treasurer of the City or, at the option of the holder, at either fiscal agency of the State of Washington in the cities of Seattle, Washington, or New York, New York, the amount shOWn hereon in lawful money of the United States of America, said sum being the interest due that date on its "General Obligation Refunding Bond, 1977," dated April 1, 1977, and numbered . CITY OF BREMERTON, WASHINGTON By (facsimile signature) Mayor ATTEST: (facsimile signature) City Clerk Section 5. E~.ecut. iq.n of Refundin'~ Bonds. The Refunding Bonds shall be printed or lithographed on good bond paper and shall be signed by the facsimile signatures of the Mayor and attested by the manual signature of the City Clerk under the seal of the City, and the coupons shall bear the facsimile signatures of the Mayor and the City Clerk. Section 6. Bond Fund Created. There is hereby created and established in the office of the Treasurer of the City a special fund to be known and designated as the "General Obligation Refunding Bond Fund, 1977," for the payment of the principal and interest on the Refunding Bonds, into which fund shall be paid the accrued interest received from the sale of the Refunding Bonds, together with all taxes collected for the payment of the principal of and interest on the Refunding Bonds and the investment income from the United States government obligations to be purchased out of the proceeds of the issuance and sale of the Refunding Bonds and other money of the City available therefor to pay interest on the Refunding Bonds to and including April 1, 1986, as hereinafter set forth. -7- Section 7. Dis~osition of Refunding Bonds Proceeds. So much of the proceeds of the sale of the Refunding Bonds as found to be necessary, exclusive of the accrued interest thereon which shall be paid into the Bond Fund, together with the s~a of $996.53 presently on hand in the" Fund" of the City and available therefor, shall be used immediately upon the receipt thereof to purchase from the United States government certain United States Treasury Certificates of Indebtedness, Notes and Bonds -- state and local government series (commonly called "book entry" obligations), in the principal amount of $283,000.00 due April 1, 1986, and bearing interest at the rate of ~ per annum and one United States Treasury Bond in the principal amount of $1,000.00 due August ~, 1984, and bearing interest at the rate of 6-3/8% per annum. The balance of the principal proceeds received shall be used toward payment of such costs of the refunding operation as hereinafter set forth. Such United States government obligations to be so purchased shall be irrevocably deposited with Seattle-First National Bank, Seattle, Washington (hereinafter called the "Refunding Trustee"). All of the money received as principal and interest on such obligations shall be held by the Refunding Trustee in trust, and shall be used for the sole purpose of paying the interest on the Refunding Bonds until the Outstanding Bonds shall have been called, paid and retired on April 1, 1986, and for the purpose of paying the principal of and call premium on said Outstanding Bonds on the date they are to be called for redemption as aforesaid. Section 8. Call for Redemption of Outstanding Bonds -- Refunding Trustee. The City hereby irrevocably calls for redemption on April 1, 1986, all of the Outstanding Bonds maturing after April 1, 1986, being bonds numbered 32 to 90, inclusive, at a redemption price of $100.50 per each $100.00 par value thereof, plus accrued interest to such date of redemption. Such call for redemption shall be irrevocable after the delivery of the Refunding Bonds to the initial purchaser thereof. -8- The City Clerk is hereby authorized and directed to give notice of the redemption of such Outstanding Bonds in accordance with the provisions of Ordinance No. 3273 pertaining to the Outstanding Bonds and in such bonds. The Refunding Trustee is hereby authorized and directed to pay interest on the Refunding Bonds until the Outstanding Bonds shall have been called, retired and paid on April 1, 1986, and to pay the principal and the redemption premium on the Outstanding Bonds on the date they are to be called for redemption as aforesaid. The payment of such interest on the Refunding Bonds and the principal and redemption premium on the Outstanding Bonds shall be made from the United States government obligations and investment income therefrom deposited with the Refunding Trustee pursuant to the previous section of this ordinance. All of such United States government obligations deposited With the Refunding Trustee and any income therefrom shall be held, invested and applied in accordance with the provisions of Ordinance No. 3273 pertaining to the Outstanding Bonds, this ordinance and with the statutes of the State of Washington. Such United States government obligations and the earnings therefrom and proceeds thereof shall be held in trust and shall be used for no other purpose nor may any of such investments be liquidated prior to maturity. All necessary and proper fees, compensation and expenses of the Refunding Trustee for the Refunding Bonds and all other costs incidental to the setting up of the escrow to accomplish the refunding of the Outstanding Bonds as herein provided including, but not limited to, an allocable portion of bond counsel's fees (60%) chargeable to such escrow and an escrow computation fee to First Washington Corporation, shall be paid out of the principal proceeds received from the issuance of the Refunding Bonds. The costs relating to the issuance and delivery of the Refunding Bonds including bond printing, rating service fees and an allocable portion of bond counsel's fees (40%) chargeable to the legal proceedings and furnishing an approving legal -9- opinion covering the Refunding Bonds, shall be paid by First Washington Corporation as purchaser of the Refunding Bonds. The proper officers and agents of the City are directed to obtain from the Refunding Trustee an agreement setting forth the duties, obligations and responsibilities of the Refunding Trustee in connection with the redemption and retirement of the Outstanding Bonds as provided herein and stating that such provisions for the payment of the fees, compensation and expenses of such Refunding Trustee are satisfactory to it. In order to carry out the purposes of the preceding section of this ordinance and this section, the Mayor and Clerk of the City are authorized and directed to execute and deliver to Seattle-First National Bank, .Seattle, Washington, as Refunding Trustee, an agreement substantially in the form attached hereto marked Exhibit "A" and by this reference made a part of this ordinance. Section 9. Defeasance. In the event the City shall issue advance refunding bonds pursuant to the laws of the State of Washington, or have money available from any other source, to pay the principal of and interest on the Refunding Bonds or such portion thereof included in the refunding plan as the same become due and payable and to refund all such then outstanding Refunding Bonds and to pay the costs of refunding, and shall have irrevocably set aside for and pledged to such payment and refunding, money and/or direct obligations of the United States of America or other legal investments sufficient in amount, together with known earned income from the investments thereof, to make such payments and to accomplish the refunding as scheduled (hereinafter called the "trust account"), and shall irrevocably make provisions for redemption of such Refunding Bonds, then in that case all right and interest of the owners or holders of the Refunding Bonds to be so retired or refunded and the appurtenant coupons (hereinafter collectively called the "defeased Refunding Bonds") in the covenants of this ordinance and funds and accounts obligated to the payment of such Refunding Bonds shall -10- thereafter cease and become void, except such owners and holders shall have the right to receive payment of the principal of and interest on the defeased Refunding Bonds from the trust account and, in the event the funds in the trust account are not available for such payment, shall have the residual right to receive payment of the principal of and interest on the defeased Refunding Bonds from the funds and accounts obligated to the payment of such Refunding Bonds without any priority of lien or charge against those funds and accounts or covenants with respect thereto except to be paid therefrom. After the establishing and full funding of such trust account, the City may then apply any money in any other fund or account established for the payment or redemption of the defeased Refunding Bonds to any lawful purposes as it shall determine, subject only to the rights of the holders of any other bonds then outstanding. Section 10. Non-Arbitra~.e Covenant and Finding of Savings. The City hereby covenants that it will not make any use of the proceeds of the sale of the Refunding Bonds or any other funds of the City which may be deemed to be proceeds of such Refunding Bonds pursuant to Section 103(c) of the Internal Revenue Code, as amended, and the applicable Regulations thereunder which, if such use had been reasonably expected on the date of delivery of the Refunding Bonds to the initial purchaser thereof, would have caused such Refunding Bonds to be "arbitrage bonds" within the meaning of said section and said Regulations. The City Council hereby finds and determines that the issuance and sale of the Refunding Bonds at this time will effect a saving to the City and its taxpayers. In making such finding and determination the City Council has given consideration to the interest to the fixed maturities of the Refunding Bonds and the Outstanding Bonds being refunded, the costs of issuance of the Refunding Bonds and the known earned income from the investment of the proceeds of sale of the Refunding Bonds pending redemption of the Outstanding Bonds. -11- The City Council hereby further finds and determines that the money and United States government obligations to be deposited with the Refunding Trustee for the Outstanding Bonds in accordance with Section 7 of this ordinance will discharge and satisfy the obligations of the City under Ordinance No. 3273 authorizing the issuance of the Outstanding Bonds and the pledges, charges, trusts, covenants and agreements of the City therein made or provided for as to said Outstanding Bonds and that said Outstanding Bonds shall no longer be deemed to be outstanding under said Ordinance No. 3273 immediately upon the deposit of such money and United States government obligations with the Refunding Trustee. Section 11. Sale of Refunding Bonds. The action of the City Council in accepting the written offer of First Washington Corporation of Seattle, Washington, dated May 4, 1977, to purchase the Refunding Bonds under the terms, conditions and covenants thereof as set forth herein and at the price set forth in said offer is hereby in all respects ratified and confirmed. The City officials are hereby authorized and directed to do all things necessary for the prompt issuance, execution and delivery of the Refunding Bonds to the purchaser thereof and for the proper use and application of the money derived from such sale. Section 12. Temporary Re'funding Bond. Pending the printing, execution and delivery to the purchaser of the definitive Refunding Bonds, the City may cause to be executed and delivered to such purchaser a single temporary Refunding Bond in the principal amount of $295,000.00. Such temporary Refunding Bond shall bear the same date of issuance, interest rate, principal payment dates and terms and covenants as the definitive Refunding Bonds, and shall be issued as a fully registered bond in tl~e name of such purchaser, and shall be in such form as acceptable to such purchaser. Such temporary Refunding Bond shall be exchanged for the definitive Refunding Bonds as soon as the same are printed, executed and available for delivery. m12- Section 13. Effective Date. For the reason that it is necessary that the City obtain the proceeds of sale of the Refunding Bonds as soon as possible in order to purchase the United States government obligations and maximize the savings to the City from the refunding operation, an emergency is hereby declared to exist, and it is hereby found necessary for the public health, welfare and safety that this ordinance become effective immediately upon its passage, approval and publication. PASSED UNANIMOUSLY by the City Council of the City of Bremerton, Washington, at a regular open public meeting thereof, signed by the Mayor, and attested by the City Clerk in authentication of such passage, this 18th day of May, 1977. CITY OF BREMERTON, WASHINGTON · Cit~Cl'erk ~ ' APPROVED AS TO FORM: -13- AGREEMENT THIS AGREEMENT made and entered into as of the 3~--~ day of May, 1977, by and between the CITY OF BREMERTON, WASHINGTON, a municipal corporation of the State of Washington (the "City"), and SEArLE-FIRST NATIONAL BANK, Seattle, %~ashington (the "Refunding Trustee" ); W I T N E S S E T H: SECTION 1. Recitals. The City heretofore issued and sold its "General'Obligation Bonds, 1976," dated April 1, 1976 (the "Outstanding Bonds"), pursuant to Ordinance No. 3273 of the City. Pursuant to said Ordinance No. 3273 tl~e City in the manner provided therein may provide for the refunding prior to maturity of the Outstanding Bonds on any semiannual interest pal~nent date from April 1, 1986, through October 1, 1989, at $100.50 per each $100.00 par value thereof, plus accrued interest, and on April 1, 1990, or on any semiannual interest payment date thereafter, at par, plus accrued interest. The City. by Ordinance No. ~~passed by the City Council and approved by the Mayor on May 18, 1977, has determined to refund on April 1, .1986, .all of the Outstanding Bonds maturing after April 1, 1986, being bonds numbered 32 to 90, inclUsive, in accordance with the terms of said Ordinance No. 3273, out of the proceeds of the sale of its "General Obligation Refunding BOnds, 1977" ~the "Refunding Bonds") and other money of the City available therefor , - SECTION 2. Provisions for Refunding the Outstanding Bonds. To accoiaplish the refunding of the Outstanding Bonds, the City, simultaneously with the delivery of the Refunding Bonds issued pursuant to said Ordinance No. ~Q, does hereby agree to irrevocably deposit with the Refunding Trustee in trust for the security and benefit of the holders and owners of the Outstanding Bonds and the Refunding Bonds certain obligations of the United States of America ~"Obligations")', being $283,000.00 par value of United States Treasury Certificates of Indebtedness, Notes and Bonds -- state and local governmen' series (commonly called "book entry" obligations) due April 1, 1986, and bearing interest at the rate of ~ per annum and $1,000.00 par /$ value of one United States Treasury Bond due August ~ 1984, and bearing interest at the rate of 6-3/8% per annum, which, together with the investment income therefrom, will be sufficient to provide for the payment of (1) the interest on the Refunding Bonds becoming due and payable on or before April 1, 1986, and '(2) the redemption price, including the call premium, payable on April 1, 1986, upon the redemption of the Outstanding Bonds maturing after such date. On or before the delivery of the Refunding Bonds the City agrees that it will cause to be delivered to the Refunding Trustee a statement setting forth the amount of interest to be paid on each semiannual interest payment date on the Refunding Bonds up through April 1, 1986, and the amount of the principal and call premiu~a required on April 1, 1986, to pay and redeem all then Outstanding Bonds then outstanding, being bonds numbered 32 to 90, inclusive. The City by said Ordinance No. ~b~ has irrevocably called for redemption or prepayment on April 1, 1986, the Outstanding Bonds maturing after such date, being bonds numbered 32 to 90, inclusive. Said call for redemption or prepayment shall be irrevocable upon the delivery of the Refunding Bonds. The Refunding Trustee, through the City Clerk, shall provide for publication and mailing of the proper notice of such redemption or prepayment in ac.cordance with the applicable provisions of Ordinance No. 3273 pertaining to the Outstanding Bonds. Provision for the giving of such notice of redemption or prepayraent has irrevocably been made by the City. SECTION 3. Disbursements by the Refunding Trustee. The Refunding Trustee shall present for payment on the due date thereof the Obligations so deposited and shall apply the proceeds derived therefrora in accordance with the provisions of this se. ction. -2- Money shall be transferred by the Refunding Trustee to the City Treasurer in amounts sufficient to pay the interest on the Refunding Bonds becoming due and payable on or before April 1, 1986. Money shall be transferred by the Refunding Trustee to the City Treasurer in amounts sufficient to pay on April 1, 1986, the redemption price with respect to the Outstanding Bonds maturing after such date. SECTION 4. NonreinvestJnent of Funds; Custody and Safekeeping of Obligations. All money deposited with the Refunding Trustee or received by the Refunding Trustee as maturing principa1 or interest On obligations prior to the time required to n~ake the payments hereinbefore set forth shall be held by the Refunding Trustee and shall not be reinvested. All income derived from the Obligations and any money deposited with the Refunding Trustee pursuant to Section 2 hereof in the hands of the Refunding Trustee (which money is not required to make the payments hereinbefore required to be made) shall be paid to either fiscal agency of the State of Washington in the cities of Seattle, Washington, or New York, New York, for the credit of the "General Obligation Refunding Bond Fund, 1977, as and when realized and collected for use and application as other money deposited in such bond fund. For as long as any of the Outstanding Bonds are outstanding, on or before the 10th day of each month, co~m~encing with the month of June, 1977, the Refunding Trustee shall render a statement as of the last day of the preceding month to the Treasurer of the City, which statement shall set forth the Obligations which have matured and the amounts received by the Refunding Trustee by reason of such maturity, the amounts paid to either fiscal agency of the State of Washington in the cities of Seattle, %~;ashington, or New York, New York, on behalf of such Treasurer for credit to the "General Obligation Refunding Bond Fund, 1977," the ~]ount of cash delivered to either fiscal agency and the dates of such delivery for the payment of the ~3-- interest on the Refunding Bonds as the same shall become due and/or payable up to and including April 1, 1986, and the amounts paid to either fiscal agency of the State of Washington in the cities of Seattle, Washington, or New York, New York, on behalf of such Treasurer, for credit to the "General Olbigation Bond Fund, 1976," for the payment of the redemption price for the Outstanding Bonds on April 1, 1986, and any other transactions of the Refunding Trustee pertaining to its duties and obligations as set· forth herein. All Obligations, moneys and investment income' deposited with and received by the Refunding Trustee pursuant to this Agreement shall be subject to the trust created by this Agreement and the Refunding Trustee shall be liable for the preservation and safekeeping thereof. SECTION 5. Duties 'and ©bligations 'of Refunding Trustee. The duties and obligations of the Refunding Trustee shall be as prescribed by the provisions of this Agreement,~ and the Refunding Trustee shall not be liable except for the performance of'its duties and obligations as specifically set forth herein and to act in good faith in the performance thereof and no implied duties or obligations shall be incurred by such Refunding Trustee other than those specified herein. The Refunding Trustee may consult with co%u~sel of its choice and %he opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or not taken or suffered by it hereunder in good faith and in accordance wit]] the opinion of such counsel. -4- Provisions for the fees, compensation and expenses of the Refunding Trustee satisfactory to it have been made. CITY OF BREMERTON, WASHINGTON ATTEST-. Cij~y Clerk ' SEATTLE-FIRST NATIONAL BANK Trust officer AGREEMENT THIS AGREEMENT made and entered into as of the /~ ~ day of May, 1977, by and between the CITY OF BREMERTON, WASHINGTON, a municipal corporation of the State of Washington (the "City"), and SEATTLE-FIRST NATIONAL BANK, Seattle, Washington (the "Refunding Trustee" ); W I TNE S SETH: SECTION 1. Recitals. The City heretofore issued and sold its "General Obligation Bonds, 1976," dated April 1, 1976 (the "Outstanding Bonds"), pursuant to Ordinance No. 3273 of the City. Pursuant to said Ordinance No. 3273 the City in the manner provided therein may provide for the refunding prior to maturity of the Outstanding Bonds on any semiannual interest payment date from April 1, 1986, through October 1, 1989, at $100.50 per each $100.00 par value thereof, plus accrued interest, and on April 1, 1990, or on any semiannual interest payment date thereafter, at par, plus accrued interest. The City by Ordinance No.33~ passed by the City Council and approved by the Mayor on May 18, 1977, has determined to refund on April 1, 1986, .all of the Outstanding Bonds maturing after April 1, 1986, being bonds numbered 32 to 90, inclusive, in accordance with the terms of said Ordinance No. 3273, out of the proceeds of the sale of its "General Obligation Refunding Bonds, 1977" (the "Refunding Bonds"), and other money of the City available therefor. SECTION 2. Provisions for Refunding the Outstanding Bonds. To accomplish the refunding of the Outstanding Bonds, the City, simultaneously with the delivery of the Refunding Bonds issued pursuant to said Ordinance No. 3~ , does hereby agree to irrevocably deposit with the Refunding Trustee in trust for the security and benefit of the holders and owners of tt~e Outstanding Bonds and the Refunding Bonds certain obligations of the United States of America ("Obligations"), being $283,000.00 par value of United States Treasury Certificates of Indebtedness, Notes and Bonds -- state and local government series (con~nonly called "book entry" obligations) due April 1, 1986, and bearing interest at the rate of 5.75% per annum and $1,000.00 par value of one United States Treasury Bond due August 1, 1984, and bearing interest at the rate of 6-3/8% per annum, which, together with the investment income therefrom, will be sufficient to provide for the payment of (1) the interest on the Refunding Bonds becoming due and payable on or before April 1, 1986, and (2) the redemption price, including the call premium, payable on April 1, 1986, upon the redemption of the Outstanding Bonds maturing after such date. On or before the delivery of the Refunding Bonds the City agrees that it will cause to be delivered to the Refunding Trustee a statement setting forth the amount of interest to be paid on each semiannual interest payment date on the Refunding Bonds up through April 1, 1986, and the amount of the principal and call premium required on April 1, 1986, to pay and redeem all then Outstanding Bonds then outstanding, being bonds numbered 32 to 90, inclusive. The City by said Ordinance No.~~ has irrevocably called for redemption or prepayment on April 1, 1986, the Outstanding Bonds maturing after such date, being bonds numbered 32 to 90, inclusive. Said call for redemption or prepayment shall be irrevocable upon the delivery of the Refunding Bonds. The Refunding Trustee, through the City Clerk, shall provide for publication and mailing of the proper notice of such redemption or prepayment in accordance with the applicable provisions of Ordinance No. 3273 pertaining to the Outstanding Bonds. Provision for the giving of such notice of redemption or prepayment has irrevocably been made by the City. SECTION 3. Disbursements by the Refunding Trustee. The Refunding Trustee shall present for payment on the due date thereof the Obligations so deposited and shall apply the proceeds derived therefrom in accordance with the provisions of this section. -2- Money shall be transferred by the Refunding Trustee to the City Treasurer in amounts sufficient to pay the interest on the Refunding Bonds becoming due and payable on or before April 1, 1986. Money shall be transferred by the Refunding Trustee to the City Treasurer in amounts sufficient to pay on April 1, 1986, the redemption price with respect to the Outstanding Bonds maturing after such date. SECTION 4. Nonreinvestment of Funds; Custody and Safekee~in~ of Obligations. All money deposited with the Refunding Trustee or received by the Refunding Trustee as maturing principal or interest on Obligations prior to the time required to make the payments hereinbefore set forth shall be held by the Refunding Trustee and shall not be reinvested. All income derived from the Obligations and any money deposited with the Refunding Trustee pursuant to Section 2 hereof in the hands of the Refunding Trustee (which money is not required to make the payments hereinbefore required to be made) shall be paid to either fiscal agency of the State of Washington in the cities of Seattle, Washington, or New York, New .York, .for the credit of the "General Obligation Refunding Bond Fund, 1977," as and when realized and collected for use and application as other money deposited in such bond fund. For as long as any of the Outstanding Bonds are outstanding, on or before the 10th day of each month, corm~encing with the month of June, 1977, the Refunding Trustee shall render a statement as of the last day of the preceding month to the Treasurer of the City, which statement shall set fortt~ the Obligations which have matured and the amounts received by the Refunding Trustee by reason of such maturity, the amounts paid to either fiscal agency of the State of Washington in the cities of Seattle, Washington, or New York, New York, on behalf of such Treasurer for credit to the "General Obligation Refunding Bond Fund, 1977," the amount of cash delivered to either fiscal agency and the dates of such delivery for the payment of the interest on the Refunding Bonds as the same shall become due and/or payable up to and including April 1, 1986, and the amounts paid to either fiscal agency of the State of Washington in the cities of Seattle, Washington, or New York, New York, on behalf of such Treasurer, fo~ credit to the "General Olbigation Bond Fund, 1976," for the payment of the redemption price for the Outstanding Bonds on April 1, 1986, and any other transactions of the Refunding Trustee pertaining to its duties and obligations as set forth herein. All Obligations, moneys and investment income deposited with and received by the Refunding Trustee pursuant to this Agreement shall be subject to the trust created by this Agreement and the Refunding Trustee shall be liable for the preservation and safekeeping thereof. SECTION 5. Duties and Obligations of R. efundlin~ Trustee. The duties and obligations of the Refunding Trustee shall be as prescribed by the provisions of this Agreement, and the Refunding Trustee shall not be liable except for the performance of its duties and obligations as specifically set forth herein and to act in good faith in the performance thereof and no implied duties or obligations shall be incurred by such Refunding Trustee other than those specified herein. The Refunding Trustee may consult with counsel of its choice and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or not taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel. -4- Provisions for the fees, compensation and expenses of the Refunding Trustee satisfactory to it have been made. CITY OF BREMERTON, WASHINGTON ATTEST: City SEATTLE-FIRST NATIONAL BANK -5-