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5326
D.A. DAVIDSON & C0.
Bond Purchase Agreement
Finance
LEG 12-1
5/7/2013
12/1/2036
12/1/2015
Comments:
D.A. Davidson & Co.
member SIPC
David Trageser
Senior Vice Pres�dent Publ�c Finance
Seattle Office
$8,590,000
CITY OF BREMERTON, WASHINGTON
LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, 2013A
$5,175,000
LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, 2013B (TAXABLE)
BOND PURCHASE AGREEMENT
May 7, 2013
Ms Becky Hasart, Du�ector of Financial Services
City of Bremerton
345 6�' Street — Suite 600
Bremerton, WA 98337
On Apnl 17, 2013, the City Council of the City of Bremerton, Washmgton (the "City") passed
Ordmance No. 5214 (the "Bond Ordmance") authorizmg the issuance and sale of the Crty's Lunited
Tax General Obligat�on Refundmg Bonds, 2013A (the "2013A" Bonds) and the Limrted Tax General
Obligation Refunding Bonds, 2013B (Ta�cable) (the "2013B Bonds") (together, the "Bonds"), and
delegating to the Mayor and/or Director of Financial Services the authonty to execute and deliver
this Bond Purchase Agreement (the "Agreement"), subject to certam parameters. In light of such
authonty, D.A. Davidson & Co. (the "Underwriter") hereby offers to enter mto this Agreement wrth
the Crty on May 7, 2013. Upon your acceptance, this Agreement shall be in full force and effect in
accordance with rts terms and shall be bindmg upon the City and the Underwriter. Reference is made
to the Bond Ordinance for defmitaons of capitalized terms used and not otherwise defined herein
1) Upon the terms and conditions and in reliance upon the representations set forth herein, the
Underwriter hereby agrees to purchase from the City, and the City hereby agrees to sell to the
Underwnter, all (but not less than all) of the 2013A Bonds m the aggregate principal amount
of $8,590,000 at an aggregate purchase price of $8,934,379.20 (representing the par amount
of the Bonds, plus a net original issue premium of $401,073.20, less Undervvcyter's Discount
of $56,694.00) and the 2013B Bonds in the aggregate principal amount of $5,1'75,000 at an
aggregate purchase pnce of $5,140,845.00 (representmg the par amount of the Bonds, less
Underwriter's Discount of $34,155.00). The Bonds shall be issued and secured under and
pursuant to the Bond Ordinance, shall be dated their Date of Delivery (as defined herein), and
shall mature, bear interest and be subject to redemption as set forth in Exhibit A hereto. 'The
Underwriter agrees to make a public offermg of the Bonds at the initial offering prices set
forth in the Official Statement referred to in Section 2 herein, which prices may be changed
from time to time by the Underwriter The Underwriter's offer to purchase the Bonds will
expire at 11:59 Pivt (PT) on Thursday, May 7, 2013.
Fixed Income Capital Markets
Columbia Center • 701 Sth Avenue, Suite 3100 • Seattle, WA 98104 •(206) 903-8699 • 1-888-389-8001 • FAX (206� 389-4040
www dawdsoncomqanies com/ficm/
2) The City shall deliver or cause to be delivered to the Underwriter, promptly after acceptance
hereof, five copies of the Official Statement, substantially m the form of the Prelimmary Offic�al
Statement dated April 30, 2013 (the "Preliminary Official StatemenY') with only such changes
therein as shall have been accepted by us (such Prelimmary OfFicial Statement with such changes,
if any, and includmg the cover page, the mside cover pages and all appendices, exhibits and
statements included therem or attached thereto being called the "Official Statement"). The
Of�cial Statement is to be dated May 7, 2013. By the Bond Ordinance, the Crty has authorized
the distnbution by the Underwriter of the Preliminary Official Statement and the Official
Statement, when available, in offering the Bonds for sale to prospective purchasers of the Bonds.
T'he Undeiwnter agrees to file the Official Statement with the MSRB or its destgnee (mcluding
the MSRB's Electronic Municipal Market Access System)
3) On May 23, 2013, or on such other date as the Underwriter and the City may mutually agree (the
"Closmg Date" or "Date of Delrvery"), the Underwriter will accept delivery of the Bonds and pay
the purchase price thereof as set forth in Section 1 herein by Federal Reserve System wire transfer
in immediately available Federal funds or by any other form of immediately available Federal
funds. The Bonds shall be delivered through The Depository Trust Company, New York, New
York ("DTC") m definitive form, bearing CUSIP numbers and issued under a book-entry system.
4) The City makes the following representations and warranties:
a) The City is a municipal corporation organized and existing under the laws of the State of
Washington and is authonzed to issue the Bonds, to enter into this Agreement and all
other agreements contemplated hereby and to pass the Bond Ordinance
b) The City has complied to date with all applicable provisions of the laws of the State of
Washington in connection with the execution and �ssuance of the Bonds.
c) The Bond Ordinance and this Agreement have been duly and validly authonzed and
executed by the City.
d) T'he City has authorized all necessary action to be taken by it for (i) the issuance and sale
of the Bonds upon the terms set forth herein, in the Official Statement and m the Bond
Ordinance, (ii) the execution, delivery, receipt and due performance of this Agreement,
the Bonds and the Bond Ordinance and all other agreements contemplated hereby or
required in order to carry out, give effect to and consummate the transactions described m
this Agreement, and (iii) the carrying out, givmg effect to and consummation of the
transactions described m this Agreement.
e) The Bonds when issued, delivered and paid for as provided for herein and m the Bond
Ordinance, will have been duly and validly authorized and issued and will constitute
limited tax general obligations of the City secured as provided m the Bond Ordmance and
as described in the Official Statement
� To the best knowledge of the City, there are no legal or governmental proceedmgs
pending or threatened, or any basis therefor, wherein an unfavorable decision, ruling or
finding would have a material adverse effect on the validity or securrty of the Bonds, the
Bond Ordinance, this Agreement or the transactions described herem or the authority of
the Crty to execute and deliver the Bonds or this Agreement, or pass the Bond Ordinance
g) As of the date hereof, the Preliminary Official Statement does not contam any untrue
statement of a matenal fact or omit to state a matenal fact requued to be stated therem or
necessary to malce the statements therein, in hght of the circumstances under which they
were made, not misleading (except for such information that may be omitted from a
prelimmary official statement pursuant to Rule 15c2-12), except that the Crty makes no
representation or warranty wrth respect to mformat�on within the Prelunmary Official
Statement or Offic�al Statement relating to DTC, the book entry system, or the
Underwnter
h) The Preliminary Official Statement is "deemed final" m accordance wrth Rule 15c2-
12(b)(1) under the Securities Exchange Act of 1934.
5) The Underwriter enters into this Agreement in reliance upon the representations and warranties of
the City contained herein and in the Bond Ordinance and m reliance upon the representations and
warranties to be contau►ed in the documents and instruments to be delivered at the Closing Date
and upon the performance by the Crty and its obligations hereunder both on and as of the date
hereof and as of the Closing Date Accordingly, the Underwriter's obligation under this
Agreement to accept delivery of and to pay for the Bonds shall be condrtioned upon the
performance by the Crty of its obligations to be performed hereunder and under such documents
and mstruments at or pnor to the Closing Date, and shall also be subject to the followmg
additional conditions.
a) the representations and warranties of the City contamed herein shall be true and correct on the
date hereof and as of the Closing Date, as if made on and at the Closing Date;
b) at or prior to the Closing Date, the Underv�mter shall receive the following documents.
i)
ii)
iii)
a certified copy of the Bond Ordinance;
the opinion of Foster Pepper PLLC, as Bond Counsel, dated the Closmg Date,
substant�ally in the form of Appendix C to the Official Statement;
evidence satisfactory to the Underwriter that Moody's Investor Service
("Moody's") has assigned its underlymg ratmg of "A1" to the Bonds,
iv) such add�tional legal opinions, certificates, proceedmgs, instruments and other
documents as the Underwriter or Bond Counsel may reasonably request.
If the conditions to the Underwnter's obligations contained in this Agreement are not satisfied
(unless otherwise waived in wnting by the Underwriter) or if the Underwriter's obligations shall
be terminated for any reason permitted herem, this Agreement shall terminate and neither the
Underwriter nor the City shall have any further obl�gation hereunder except to reimburse the
Underwriter for expenses related to the preparation, printing and mailing of the preliminary and
final official statements
6) During the initial public offenng of the Bonds (a period concludmg the final date the Underwnter
is charged with furnishmg a copy of the Of�icial Statement to a potential customer under SEC
Rule 15c2-12 but no later than 25 days after the Issue Date), the City will (a) not consent to the
distribution of any amendment of or supplement to the Offcial Statement to which, after having
been furnished with a copy, the Undervvriter shall object in writing or which shall be disapproved
by counsel for the Underwnter and (b) if any event shall occur as a result of which it is necessary,
in the opinion of the Underwriter, to amend or supplement the Official Statement m order to make
the Official Statement not misleading in light of the circumstances existing at the time rt is
delivered to a purchaser, consent to the distribution of an amendment of or supplement to the
Official Statement, prepared without expense to the City (in form and substance satisfactory to the
Underwriter) in a reasonable number of copies which will amend or supplement the O�cial
Statement so that it will not contain an untrue statement of a material fact or omit to state a
matenal fact necessary in order to make the statements therein, m the light of the circumstances
ex�sting at the tune the Official Statement is delivered to a purchaser, not misleadmg
7) The Undeiwnter shall have the right to cancel rts obligation to purchase the Bonds (or the 2013A
Bonds only in the case of (i)) if between the date hereof and the Date of Issue any of the followmg
shall have occurred, which, in the sole opinion of the Underwriter, materially and adversely
affects the market pnce or marketabilrty of the Bonds or the ability of the Underwriter to enforce
contracts for sale of such Bonds, (i) legislation shall have been enacted by the Congress of the
Umted Sta.tes or the legislature of the State of Washington or legislation shall have been reported
out of committee of either body, or a decision shall have been rendered by a court of the United
States or of the State of Washington or the Tax Court of the Umted States, or a ruling shall have
been made or a regulation or temporary regulation shall have been proposed or made or any other
release or announcement shall have been made by the Treasury Department of the United States or
the Internal Revenue Service, with respect to federal taxation upon revenues or other income of
the general character of the Bonds which, in the reasonable judgment of the Underwriter,
matenally adversely affects the mazket for the Bonds, or (ii) there shall exist any event which, in
the reasonable judgment of the Underwriter, either (a) makes untrue or mcorrect m any material
aspect as of such time any statement or information contained in the Official Statement or (b) is
not reflected in the Official Statement but should be reflected therein in order to make the
statements and information contained therein not misleading in any matenal respect, or (iii) there
shall have occw7ed an outbreak or escalation of hostilrties or any other national or international
calamity or crisis, the effect of which outbreak, escalation, calamity or crisis on the financial
markets of the United States is such as, m the reasonable judgment of the Underwnter, would
make it impracticable for the Underwriter to market or enforce contracts for the sale of the Bonds,
or (iv) there shall be in force a general suspension of trading on the New York Stock Exchange or
minunum or ma�cimum prices for trading shall have been fixed and in force, or maxunum ranges
for prices for securities shall have been required and be in force on the New York Stock
Exchange, whether by virtue of a determmation by that Exchange or by order of the SEC or any
other governmental authonty having jurisdiction, or (v) a general banking moratonum shall have
been declazed by either Federal, State of Washington or New York authorities having �urisdiction
and be in force, or (vi) there shall be established any new restriction on transactions in municipal
securities materially affectmg the free market for municipal securities (mcluding the imposition of
any limitation on interest rates) or extension of credrt by, or charge to the net capital requirements
of, Undervvriter established by the New York Stock Exchange, the SEC, any other federal or state
agency or the Congress of the United States, or by Executive Order
8) The Crty acknowledges and agrees that the purchase and sale of the Bonds pursuant to this
Agreement is an arm's-length commercial transaction between the City and the Underwnter,
actmg solely as a principal and not as a financial advisor or agent of the City, and that the
Underwnter does not have a fiduciary duty to the Crty and has not assumed a fmancial advisory
responsibility in favor of the City with respect to the offering of the Bonds or the process leading
thereto (whether or not the Underwnter, or any affiliate of the Underwriter, has advised or is
currently advising the City on other matters) or any other obligation to the Crty except the
obligations expressly set forth in this Agreement, it being the City's understanding that a financial
advisory relationship shall not be deemed to exist when, in the course of acting as an underwriter,
a broker, dealer or municipal securities dealer, a person renders advice to an issuer, mcluding
advice with respect to the structure, timing, terms and other similar matters concerning a new
issue of municipal securities. The Underr�mter agrees to comply with all applicable laws and
regulations governmg the underwriting of the Bonds.
9) Sub�ect to the provisions of Section 1, all fees, expenses and costs incident to the execution and
performance of this Agreement and to the authorization, issuance and sale of the Bonds to the
4
Underwriter, includmg, but not limited to: the cost of prinhng the Bonds, if any (and full
execution thereo�, the fees of the Bond Registrar; fees and charges of Moody's, and fees and
expenses of Bond Counsel related to these Bonds shall be paid by the Crty All expenses to be
paid by the City pursuant to this Agreement may be paid from Bond proceeds to the extent
permitted by the Bond Ordmance. The obligation of the City under this Section 8 shall survive
the payment of the Bonds The Underwriter shall pay the costs of qualifying the Bonds for sale m
the various states chosen by the Underwnter, all advertismg expenses m connection with the
public offeruig of the Bonds, the fees and disbursements of underv�rriter's counsel, if any, and all
other expenses incurred by the Underwriter in connection with the public offering and d�stribution
of the Bonds
10) Any notice or other communication to be given to the City under this Agreement may be grven by
delivering the same in writing at the address set forth above and any such notice or other
communications to be grven to the Underwriter may be given by delivenng the same m writing to
D.A Davidson & Co , Columbia Center, 701 5�' Avenue, Suite 4050, Seattle, Washington 98104,
Attention• Mr. David Trageser The approval of the Underwmter when requ�red hereunder or the
determination of rts satisfaction as to any document referred to herein shall be m writing signed by
the Underwriter and delrvered to you.
11) This Agreement is made solely for the benefit of the City and the Underv�mter (includmg
successors or assigns of the Underwnter, but excluding any purchaser, as such purchaser, of
Bonds from the Underr�mter) and, to the extent expressed herein, controllmg persons thereof, and
no other persons, partnership, association or corporation shall acquire to have any nght hereunder
or by virtue hereof. This Agreement may not be changed or terminated orally All
understandings and agreements previously existmg between the City and the Underwnter, if any,
are merged into this Agreement, which alone fully expresses the agreement of the parhes All
representations and agreements of the parties to this Agreement shall remam operative and in full
force and effect regardless of any investigation made by or on behalf of the Underwnter and shall
survive the delivery of and payment for the Bonds Time shall be of the essence of this
Agreement. This Agreement shall be governed by, construed and enforced in accordance wrth the
laws of the State of Washmgton. This Agreement may be executed m any number of counterparts
each of wh�ch shall be an original but all of which together will constitute one and the same
instrument.
12) The Underv�mter represents that it is duly organized, validly existmg and m good standing under
the laws of the junsdiction of its organization and it is licensed by and registered with the
Financial Industry Regulatory Authonty as a broker-dealer and wrth the MSRB as a mumcipal
bonds dealer.
The Underwnter shall execute and dehver on the Closing Date an issue price or similaz certificate,
m form and substance reasonable satisfactory to the Distnct and Bond counsel, (i) confurnmg the
mrtial reoffering prices ("Inrtial Reofferuig Pnces") at which each matunty of the Bonds was
reasonably expeeted on the sale date to be sold to the public, exclusive of bond houses, brokers,
and sumlar persons or orgamzations actmg m the capacrty of underwriters or wholesalers ("Public
Buyers"); (ii) certifying that a bona fide offering of the Bonds has been made to Public Buyers;
(iii) statmg the first price at which a substantial amount (at least 10%) of each maturity of the
Bonds was sold to Public Buyers; and (iv) if the first pnce at which a substantial amount of any
maturity of the Bonds does not conform to the Initial Reoffenng Pnce of that matunty, providmg
an explanation of the facts and circumstances that resulted in that non-conformrty.
Very truly yours,
D A DAVIDSON & CO
/ `�
Accepted and Agreed to
CITY OF BREMERTON, WASHINGTON
By•
Ms ecky Director of Financial Services
Tune ���VI
:
David Trageser, Semor Vice President
6
Ezhibit A
$8,590,000
City of Bremerton, Washington
Limited Tag General ObGgation Refunding Bonds, 2013A
Matuetity Principal
(Dec.l) Amount Coupon Yield Price
2013 $155,000 2 00% 0 48% 100 791
2014 190,000 2 00 0 66 102 026
2015 200,000 2 00 0 86 102 838
2016 215,000 2 00 1 04 103 311
2017 230,000 2 00 1 25 103 287
2018 245,000 2.00 1 43 103 016
2019 260,000 2.00 1 67 102 031
2020 275,000 2 00 1 89 100 767
2021 290,000 2.00 2 04 99 688
2022 305,004 3 00 216 107 194
2023 330,000 3 25 2 29 108 553
2024 350,000 3 25 2 42 107 346
2025 370,000 3 50 2 63 107 620
2026 385,000 3 75 2 75 108 707
2027 400,000 4 00 2 90 109 507
2028 415,000 4 00 3 00 108 600
2033' 2,340,000 4 00 3 30 105 931
2034 525,000 4 00 3 35 105 494
2036' 1,110,000 3 70 3 80 98 453
Total $8,590,000
� Term bonds
' Prtced to the call date ofJune 1, 2023
Exhibrt A
$5,175,000
City of Bremerton, Washington
Limited Taz General Obligation Refunding Bonds, 2013B (Tazable)
Maturity Principal
(Dec.l) Amount Coupon Yield Price
2013 $190,000 0 50% 0 50% 100 000
2014 230,000 0 60 0 60 100 000
2015 245,000 0 85 0 85 100 000
2016 285,000 1 10 1 10 100 000
2017 300,000 1 40 1 40 100 000
2018 315,000 1 70 1 70 100 000
2019 320,000 2 OS 2 OS 100 000
2020 325,000 2 30 2 30 100 000
2021 330,000 2 65 2 65 100 000
2022 340,000 2 90 2 90 100 000
2023 350,000 3 OS 3 OS 100 000
2025' 735,000 3 50 3 50 100 000
2028' 1,210,000 3 90 3 90 100 000
Total $5,175,000
' Term bonds
Description of the Bonds
The Bonds will be dated their Date of Del�very, expected to be May 23, 2013. The Bonds will mature on
December 1, in the years and amounts set forth above and the pnor page. The Washington State Fiscal Agent,
currently The Bank of New York Mellon, New York, New York, will serve as registrar, paymg agent and
transfer agent for the Bonds
The Bonds will bear interest from the Date of Delivery, or the most recent interest payment date to which
interest has been paid or duly provided for, whichever is later, at the rates per annum set above and the pnor
page. Interest will be calculated on the basis of a 360-day year consistmg of twelve 30-day months, and will
be payable semi-annually on December 1 and June l, commencmg December 1, 2013 until the stated dates of
maturity of the Bonds or date of prior redemption.
E�chibit A
�
Redemption
Optional Redemption. Bonds maturing on or before December 1, 2022, shall be issued wrthout the right or
option of the Crty to redeem those Bonds prior to their stated maturity dates. The Crty reserves the right and
option to redeem the Bonds maturmg on or after December 1, 2023 pnor to their stated matunty dates at any
tune on or after June l, 2023, as a whole or in part (withm one or more maturities selected by the Crty) at par
plus accrued mterest to the date fixed for redemption
Mandatory Redemption. Unless redeemed pursuant to the foregoing optional redemption provisions, the
2013A Bonds maturing m 2033 and 2036 are Term Bonds subject to mandatory smking fund redemption at a
pnce of par plus accrued interest to the date of redemption on December 1 of the followmg years in the
followmg principal amounts:
2013A Term Bonds
2033 2036
Year Amount Year Amount
2029 $ 430,000 2035 $ 545,000
2030 450,000 2036* 565,000
2031 470,000 Tota l$ 1,110,000
2032 485,000
2033* 505,000
Total $ 2,340,000
* Maturity
The 2013B Bonds maturing in 2025 and 2028 are Term Bonds sub�ect to mandatory sinkmg fund redemption
at a pnce of par plus accrued interest to the date of redemption on December 1 of the following years m the
followmg princ�pal amounts:
2013B Term Bonds
2025 2028
Year Amount Year Amount
2024 360,000 2026 385,000
2025* 375,000 2027 405,000
Total $ 735,000 2028* 420,000
Total $ 1,210,Q00
• Maturiry
E�chibit A