6c Reso 3648
PORT OF SEATTLE
______________________________________
RESOLUTION NO. 3648
A RESOLUTION of the Port Commission of the Port of Seattle, authorizing
the sale and issuance of limited tax general obligation refunding bonds of
the Port in the aggregate principal amount of not to exceed $117,000,000,
for the purpose of refinancing capital improvements to Port facilities and
providing financing for Port activities and costs of issuance; authorizing
preliminary and final official statements; authorizing a Des ignated Port
Representative to approve the sale date or dates, final principal amounts,
interest rates, payment dates, redemption provisions, maturity dates and
principal maturities for the bonds, appoint an escrow agent and execute an
escrow agreement; providing for continuing disclosure; and providing for
a negotiated sale of the bonds to Barclays Capital Inc., Siebert Brandford
Shank & Co., LLC, Goldman, Sachs & Co. and Morgan Stanley & Co.
Incorporated.
ADOPTED: FEBRUARY __, 2011
Prepared by:
K&L GATES LLP
Seattle, Washington
PORT OF SEATTLE
RESOLUTION NO. 3648
TABLE OF CONTENTS*
Page
Section 1. Definitions................................................................................................................. 3
Section 2. Plan of Finance ......................................................................................................... 7
Section 3. Authorization of Bonds ............................................................................................. 8
Section 4. Redemption ............................................................................................................... 9
Section 5. Registration, Exchange and Payments .................................................................... 12
Section 6. Bond Fund ............................................................................................................... 17
Section 7. Defeasance .............................................................................................................. 18
Section 8. Tax Covenants ........................................................................................................ 18
Section 9. Lost, Stolen or Destroyed Bonds ............................................................................ 18
Section 10. Form of Bonds and Registration Certificate ......................................................... 19
Section 11. Execution .............................................................................................................. 22
Section 12. Ongoing Disclosure............................................................................................... 23
Section 13. Sale of Bonds ........................................................................................................ 23
Section 14. Application of Bond Proceeds .............................................................................. 26
Section 15. Redemption of Refunded Bonds ........................................................................... 28
Section 16. Effective Date ....................................................................................................... 29
Exhibit A Form of Escrow Agreement
* This Table of Contents and the Cover Page are for convenience of reference and are not
intended to be a part of this resolution.
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RESOLUTION NO. 3648
A RESOLUTION of the Port Commission of the Port of Seattle, authorizing
the sale and issuance of limited tax general obligation refunding bonds of
the Port in the aggregate principal amount of not to exceed $117,000,000,
for the purpose of refinancing capital improvements to Port facilities and
financing for Port activities and costs of issuance; authorizing preliminary
and final official statements; authorizing a Designated Port Representative
to approve the sale date or dates, final principal amounts, interest rates,
payment dates, redemption provisions, maturity dates and principal
maturities for the bonds, appoint an escrow agent and execute an escrow
agreement; providing for continuing disclosure; and providing for a
negotiated sale of the bonds to Barclays Capital Inc., Siebert Brandford
Shank & Co., LLC, Goldman, Sachs & Co. and Morgan Stanley & Co.
Incorporated.
WHEREAS, the Port of Seattle (the "Port"), a municipal corporation of the State of
Washington, owns and operates a system of marine terminals and properties and Seattle-Tacoma
International Airport; and
WHEREAS, the Port is authorized by RCW 53.36.030 and ch. 39.46 to issue general
obligation bonds payable from, inter alia, regular tax levies of the Port; and
WHEREAS, the Port has issued its Limited Tax General Obligation Bonds, Series 2000B
dated April 18, 2000, pursuant to Resolution No. 3393, as amended (the "2000 Bond
Resolution") in the original principal amount of $107,305,000, whichremain outstanding as
follows:
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Maturity Year Principal Interest
(December 1) Amounts Rates
2011 $ 3,495,000 6.00%
2012 3,705,000 6.00
2013 3,925,000 6.00
2014 4,165,000 6.00
2015 4,410,000 6.00
2016 4,675,000 6.00
2017 4,955,000 5.70
2018 5,240,000 5.75
2019 5,540,000 5.80
2020 5,860,000 5.85
2021 6,205,000 5.90
2025 28,640,000 5.75
(the "2000B Bonds"); and
WHEREAS, the 2000B Bonds maturing on and after December 1, 2011 (the "Refunding
Candidates") are subject to redemption at the option of the Port on and after December 1, 2010 in
whole or in part, and if in part, with maturities to be selected by the Port at the price of par, plus
accrued interest to the date fixed for redemption; and
WHEREAS, after due consideration it appears to the Port that all or a portion of the
Refunding Candidates may be defeased and refunded, thereby saving substantial amounts of debt
service, through the issuance of a series of limited tax general obligation refunding bonds
authorized herein; and;
WHEREAS, the Port has held a public hearing on the issuance of the 2011 Refunding
Bonds (hereinafter defined) as required by Section 147(f) of the Internal Revenue Code, as
amended; and
WHEREAS, in 2008, the Port executed a purchase agreement and a donation agreement
with BNSF Railway Company to acquire a rail corridor in King and Snohomish counties (the
"Corridor"); and
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WHEREAS, the Port expects that local agencies and other entities will acquire a portion
of the Port's interests in the Corridor; and
WHEREAS, in order to replenish a portion of the Port funds expended in 2009 in
connection with the acquisition of the Corridor, the Port shall issue a taxable series of limited tax
general obligation bonds; and
WHEREAS, the bonds authorized herein shall be sold pursuant to a negotiated sale as
herein provided; and
WHEREAS, the Commission wishes to delegate authority to the Designated Port
Representative to approve the sale date or dates, the final principal amounts of the bonds, interest
rates, designations of the bonds, principal maturities, redemption provisions, and the true interest
cost of such bonds to be fixed under such terms and conditions as are approved by this
resolution;
NOW, THEREFORE, BE IT RESOLVED BY THE PORT COMMISSION OF THE
PORT OF SEATTLE, as follows:
Section 1. Definitions. Unless otherwise defined herein, the terms used in this
resolution shall have the following meanings:
Acquired Obligations means the Government Obligations acquired by the Port under the
terms of this resolution and the Escrow Agreement, if any, to effect the defeasance and refunding
of the Refunded Bonds.
Bond Fund means the Port of Seattle Limited Tax General Obligation Redemption Bond
Fund, 2011 created in the office of the Treasurer of the Port by Section 6 of this resolution.
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Bond Purchase Contract means the Bond Purchase Contract for one or both series of the
Bonds, providing for the purchase of Bonds by the Underwriters and setting forth certain terms
approved by the Designated Port Representative as provided in Section 13 of this resolution.
Bond Register means the registration books maintained by the Registrar containing the
name and mailing address of the owner of each Bond or nominee of such owner and the principal
amount and number of Bonds held by each owner or nominee.
Bonds mean, together, the 2011 Taxable Bonds and the 2011 Refunding Bonds.
Code means the Internal Revenue Code of 1986, as amended, and shall include all
applicable regulations and rulings relating thereto.
Commission means the Commission of the Port, or any successor thereto as provided by
law.
Designated Port Representative means the Chief Executive Officer of the Port, the
Deputy Chief Executive Officer of the Port or the Chief Financial and Administrative Officer of
the Port (or the successor in function to such person(s)) or such other person as may be directed
by resolution of the Commission.
DTC means The Depository Trust Company, New York, New York, a limited purpose
trust company organized under the laws of the State of New York, as depository for the Bonds
pursuant to Section 5 hereof.
Escrow Agent means the Escrow Agent for the Refunded Bonds appointed by the
Designated Port Representative pursuant to this resolution if the Designated Port Representative
determines that an escrow will be necessary or required to carry out the plan of refunding.
Escrow Agreement means the Escrow Deposit Agreement, if any, dated as of the date of
the closing and delivery of the 2011 Refunding Bonds between the Port and the Escrow Agent to
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be executed in connection with the refunding of the Refunded Bonds, substantially in the form
attached hereto as Exhibit A.
Federal Tax Certificate means the certificate of that name executed and delivered by the
Port at the time of issuance and delivery of the 2011 Refunding Bonds.
Government Obligations has the meaning given such term in RCW Ch. 39.53, as now or
hereafter amended.
Letter of Representations means the blanket issuer letter of representations from the Port
to DTC.
MSRB means the Municipal Securities Rulemaking Board or any successors to its
functions. Until otherwise designated by the MSRB or the SEC, any information, reports or
notices submitted to the MSRB in compliance with the Rule are to be submitted through the
MSRB's Electronic Municipal Market Access system ("EMMA"), currently located at
www.emma.msrb.org.
Port means the Port of Seattle, a municipal corporation of the State of Washington, as
now or hereafter constituted, or the corporation, authority, board, body, commission, department
or officer succeeding to the principal functions of the Port or to whom the powers vested in the
Port shall be given by law.
Refunded Bonds means the Refunding Candidates designated by the Designated Port
Representative pursuant to Section 13 of this resolution.
Refunding Candidates mean the 2000B Bonds maturing on and after December 1, 2011.
Registered Owner means the person named as the registered owner of a Bond in the Bond
Register.
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Registrar means, the fiscal agency of the State of Washington appointed by the Treasurer
for the purposes of registering and authenticating the Bonds, maintaining the Bond Register and
effecting transfer of ownership of the Bonds. The term Registrar shall include any successor to
the fiscal agency, if any, hereafter appointed by the Treasurer.
Rule means the SEC's Rule 15c2-12 under the Securities Exchange Act of 1934, as the
same may be amended from time to time.
SEC means the United States Securities and Exchange Commission.
Savings Target means a dollar amount equal to at least three and seventy-five onehundredths
percent (3.75%) of the outstanding principal of the Refunded Bonds.
Treasurer means the Chief Financial Officer of the Port, or any other public officer as
may hereafter be designated pursuant to law to have the custody of Port funds.
2000 Bond Resolution means Resolution No. 3393, as amended, adopted by the
Commission on April 6, 2000 and authorizing the 2000B Bonds.
2000B Bonds mean the Port of Seattle Limited Tax General Obligation Bonds,
Series 2000B issued pursuant to the 2000 Bond Resolution, which remain outstanding in the
aggregate amount of $80,815,000 as shown in the recitals to this resolution.
2011 Refunding Bonds mean the Port of Seattle Limited Tax General Obligation
Refunding Bonds, 2011 (AMT), authorized to be issued in Section 3(b) of this resolution.
2011 Taxable Bonds mean the Port of Seattle Limited Tax General Obligation Bonds,
2011 (Taxable), authorized to be issued in Section 3(a) of this resolution.
Underwriters mean Barclays Capital Inc., Siebert Brandford Shank & Co. LLC,
Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated.
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Rules of Interpretation. In this resolution, unless the context otherwise requires:
(a) The terms "hereby," "hereof," "hereto," "herein, "hereunder" and any similar
terms, as used in this resolution, refer to this resolution as a whole and not to any particular
article, section, subdivision or clause hereof, and the term "hereafter" shall mean after, and the
term "heretofore" shall mean before, the date of this resolution;
(b) Words of the masculine gender shall mean and include correlative words of the
feminine and neuter genders and words importing the singular number shall mean and include
the plural number and vice versa;
(c) Words importing persons shall include firms, associations, partnerships (including
limited partnerships), trusts, corporations and other legal entities, including public bodies, as well
as natural persons;
(d) Any headings preceding the text of the several articles and Sections of this
resolution, and any table of contents or marginal notes appended to copies hereof, shall be solely
for convenience of reference and shall not constitute a part of this resolution, nor shall they affect
its meaning, construction or effect; and
(e) All references herein to "articles," "sections" and other subdivisions or clauses are
to the corresponding articles, sections, subdivisions or clauses hereof.
Section 2. Plan of Finance. As described in the recitals to this resolution, the
Port has expended funds for the acquisition of the Corridor. The Port shall issue a series of
taxable general obligation bonds (hereinafter identified as the "2011 Taxable Bonds") to
replenish a portion of the funds previously expended by the Port for the acquisition of the
Corridor.
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The Refunding Candidates are callable in whole or in part prior to their scheduled
maturities and may be selected for refunding depending upon market conditions. The final
selection of the Refunding Candidates to be designated as Refunded Bonds and to be refunded by
the general obligation refunding bonds (hereinafter identified as the "2011 Refunding Bonds")
shall be made by the Designated Port Representative pursuant to the authority granted in Section
13 of this resolution.
Section 3. Authorization of Bonds.
(a) 2011 Taxable Bonds. The Port shall issue its limited tax general
obligation bonds in order to (1) replenish a portion of the Port funds used to pay costs of the
Corridor; and (2) pay all or a portion of costs of issuance (the "2011 Taxable Bonds"). The 2011
Taxable Bonds shall be designated as the "Port of Seattle Limited Tax General Obligation Bonds,
2011 (Taxable)" with such additional designations for identification purposes as approved may
be by the Designated Port Representative at the time of marketing and sale of the 2011 Taxable
Bonds.
(b) 2011 Refunding Bonds. The Port shall issue its limited tax general
obligation refunding bonds in order to (1) refund the Refunded Bonds and (2) pay all or a portion
of costs of issuance. The 2011 Refunding Bonds shall be designated as the "Port of Seattle,
Limited Tax General Obligation Refunding Bonds, 2011 (AMT)" with such additional
designations for identification purposes as may be approved by the Designated Port
Representative at the time of marketing and sale of the 2011 Refunding Bonds.
(c) Bond Terms. The 2011 Taxable Bonds and the 2011 Refunding Bonds shall be
referred to together as the "Bonds". The Bonds of each seriesshall be dated as of the date of
their delivery, shall be fully registered as to both principal and interest; shall be in the
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denomination of $5,000 or any integral multiple thereof, provided that no Bond shall represent
more than one series and maturity within a series; shall be numbered separately and in the
manner and with any additional designation as the Registrar deems necessary for purposes of
identification and control, and shall bear interest from their date of delivery until the Bonds
bearing such interest have been paid or their payment is duly provided for. The Bonds shall be
issued in the aggregate principal amount, shall bear interest at the per annum rates, payable
semiannually on the dates and in the principal amounts set forth in the Bond Purchase Contract
and as approved by the Designated Port Representative pursuant to Section 13 of this resolution;
provided that the aggregate principal amount of Bonds issued pursuant to this resolution shall not
exceed $117,000,000.
Section 4. Redemption.
(a) Optional Redemption. The Bonds of each series may be subject to optional
redemption on the dates, and under the terms set forth in the Bond Purchase Contract relating to
such series and as approved by the Designated Port Representative pursuant to Section 13.
(b) Mandatory Redemption. The Bonds of each series may be subject to mandatory
redemption if and to the extent, if any, set forth in the Bond Purchase Contract relating to such
series and as approved by the Designated Port Representative pursuant to Section 13.
(c) Selection of Bonds for Redemption. The manner of selection of Bonds of each
series for redemption shall be set forth in the Bond Purchase Contract relating to such series and
as approved by the Designated Port Representative pursuant to Section 13.
(d) Notice of Redemption. Written notice of any redemption of Bonds prior to
maturity (which notice, in the case of an optional redemption, may be conditional) shall be given
by the Registrar on behalf of the Port by first class mail, postage prepaid, not less than 20 days
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nor more than 60 days before the date fixed for redemption to the Registered Owners of Bonds
that are to be redeemed at their last addresses shown on the Bond Register. This requirement
shall be deemed complied with when notice is mailed to the Registered Owners at their last
addresses shown on the Bond Register, whether or not such notice is actually received by the
Registered Owner.
So long as the Bonds are in book-entry only form, notice of redemption shall be given to
beneficial owners of bonds to be redeemed in accordance with the operational arrangements then
in effect at DTC, and neither the Port nor the Registrar shall be obligated or responsible to
confirm that any notice of redemption is, in fact, provided to beneficial owners.
Each notice of redemption prepared and given by the Registrar to Registered Owners of
Bonds shall contain the following information: (1) the date fixed for redemption, (2) the
redemption price, (3) if fewer than all outstanding Bonds are to be redeemed, the identification
by maturity and series (and, in the case of partial redemption, the principal amounts) of the
Bonds to be redeemed, (4) that (unless the notice of redemption is a conditional notice, in which
case the notice shall state that such Bond will become due and payable and interest shall cease to
accrue on the date fixed for redemption if and to the extent that funds have been provided to the
Registrar for the redemption of Bonds) on the date fixed for redemption the redemption price
will become due and payable upon each Bond or portion called for redemption, and that interest
shall cease to accrue from the date fixed for redemption, (5) that the Bonds are to be surrendered
for payment at the principal office of the Registrar, (6) the CUSIP numbers of all Bonds being
redeemed, (7) the dated date of the Bonds being redeemed, (8) the rate of interest for each Bond
being redeemed, (9) the date of the notice, and (10) any other information deemed necessary by
the Registrar to identify the Bonds being redeemed.
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Upon the payment of the redemption price of Bonds being redeemed, each check or other
transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and
maturity, the Bonds being redeemed with the proceeds of such check or other transfer.
(e) Effect of Redemption. Unless the Port has revoked a notice of optional
redemption (or unless the Port provided a conditional notice and the conditions for redemption
set forth therein are not satisfied), the Port shall transfer to the Registrar amounts that, in addition
to other money, if any, held by the Registrar, will be sufficient to redeem, on the date fixed for
redemption, all the Bonds to be redeemed. If and to the extent that funds have been provided to
the Registrar for the redemption of Bonds then from and after the date fixed for redemption for
such Bond, interest on each such Bond shall cease to accrue.
(f) Amendment of Notice Provisions. The foregoing notice provisions of this section,
including but not limited to the information to be included in redemption notices and the persons
designated to receive notices, may be amended by additions, deletions and changes in order to
maintain compliance with duly promulgated regulations and recommendations regarding notices
of redemption of municipal securities.
(g) Purchase. The Port reserves the right to purchase any of the Bonds offere d to the
Port at any price deemed reasonable by the Designated Port Representative at any time. To the
extent the Port purchases for cancellation or optionally redeems any Bonds that are term Bonds,
the Port may reduce the mandatory sinking fund requirements of such Bonds of the same
maturity, in like aggregate principal amount for the year specified by the Designated Port
Representative.
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Section 5. Registration, Exchange and Payments.
(a) Registrar/Bond Register. The Port hereby specifies and adopts the system of
registration and transfer for the Bonds approved by the Washington State Finance Committee
from time to time through the appointment of state fiscal agencies. The Port shall cause a bond
register to be maintained by the Registrar. So long as any Bonds remain outstanding, the
Registrar shall make all necessary provisions to permit the exchange and registration of transfer
of Bonds at its principal corporate trust office. The Registrar may be removed at any time at the
option of the Designated Port Representative upon prior notice to the Registrar, DTC, each party
entitled to receive notice pursuant to Section 12 and a successor Registrar appointed by the
Designated Port Representative. No resignation or removal of the Registrar shall be effective
until a successor shall have been appointed and until the successor Registrar shall have accepted
the duties of the Registrar hereunder. The Registrar is authorized, on behalf of the Port, to
authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of
such Bonds and this resolution and to carry out all of the Registrar's powers and duties under this
resolution. The Registrar shall be responsible for its representations contained in the Certificate
of Authentication on the Bonds.
(b) Registered Ownership. The Port and the Registrar, each in its discretion, may
deem and treat the Registered Owner of each Bond as the absolute owner thereof for all purposes
(except as provided in Section 12 of this resolution), and neither the Port nor the Registrar shall
be affected by any notice to the contrary. Payment of any such Bond shall be made only as
described in Section 5(h) hereof, but such Bond may be transferred as herein provided. All such
payments made as described in Section 5(h) shall be valid and shall satisfy and discharge the
liability of the Port upon such Bond to the extent of the amount or amounts so paid.
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(c) DTC Acceptance/Letter of Representations. To induce DTC to accept the Bonds
as eligible for deposit at DTC, the Port has executed and delivered to DTC a Letter of
Representations.
Neither the Port nor the Registrar will have any responsibility or obligation to DTC
participants or the persons for whom they act as nominees (or any successor depository) with
respect to the Bonds in respect of the accuracy of any records maintained by DTC (or any
successor depository) or any DTC participant, the payment by DTC (or any successor depository)
or any DTC participant of any amount in respect of the principal of or interest on Bonds, any
notice which is permitted or required to be given to Registered Owners under this resolution
(except such notices as shall be required to be given by the Port to the Registrar or to DTC (or
any successor depository), or any consent given or other action taken by DTC (or any successor
depository) as the Registered Owner. For so long as any Bonds are held in fully immobilized
form hereunder, DTC or its successor depository shall be deemed to be the Registered Owner for
all purposes hereunder, and all references herein to the Registered Owners shall mean DTC (or
any successor depository) or its nominee and shall not mean the owners of any beneficial interest
in such Bonds.
If any Bond shall be duly presented for payment and funds have not been duly provided
by the Port on such applicable date, then interest shall continue to accrue thereafter on the unpaid
principal thereof at the rate stated on such Bond until such Bond is paid.
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(d) Use of Depository.
(1) The Bonds shall be registered initially in the name of "Cede & Co.," as
nominee of DTC, with one Bond for each series maturing on each of the maturity dates for the
Bonds in a denomination corresponding to the total principal therein designated to mature on
such date. Registered ownership of such immobilized Bonds, or any portions thereof, may not
thereafter be transferred except (A) to any successor of DTC or its nominee, provided that any
such successor shall be qualified under any applicable laws to provide the service proposed to be
provided by it; (B) to any substitute depository appointed by the Designated Port Representative
pursuant to subsection (2) below or such substitute depository's successor; or (C) to any person
as provided in subsection (4) below.
(2) 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 Designated Port
Representative to discontinue the system of book-entry transfers through DTC or its successor
(or any substitute depository or its successor), the Designated Port Representative may hereafter
appoint a substitute depository. Any such substitute depository shall be qualified under any
applicable laws to provide the services proposed to be provided by it.
(3) In the case of any transfer pursuant to clause (A) or (B) of subsection (1)
above, the Registrar shall, upon receipt of all outstanding Bonds, together with a written request
on behalf of the Designated Port Representative, issue a single new Bond for each series and
maturity of the Bonds then outstanding, registered in the name of such successor or such
substitute depository, or their nominees, as the case may be, all as specified in such written
request of the Designated Port Representative.
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(4) In the event that (A) DTC or its successor (or substitute depository or its
successor) resigns from its functions as depository, and no substitute depository can be obtained,
or (B) the Designated Port Representative determines that it is in the best interest of the
beneficial owners of the Bonds that such owners be able to obtain such bonds in the form of
Bond certificates, the ownership of such Bonds may then be transferred to any persons or entities
as herein provided, and shall no longer be held in fully immobilized form. The Designated Port
Representative shall deliver a written request to the Registrar, together with a supply of definitive
Bonds for each series, to issue Bonds as herein provided in any authorized denomination. Upon
receipt by the Registrar of all then outstanding Bonds together with a written request on behalf of
the Designated Port Representative to the Registrar, new Bonds shall be issued in the appropriate
denominations and registered in the names of such persons or entities as are requested in such
written request.
(e) Registration of Transfer of Ownership or Exchange; Change in Denominations.
The transfer of any Bond may be registered and Bonds may be exchanged, but no transfer of any
such Bond shall be valid unless such Bond is surrendered to the Registrar with the assignment
form appearing on such Bond duly executed by the Registered Owner or such Registered
Owner's duly authorized agent in a manner satisfactory to the Registrar. Upon such surrender,
the Registrar shall cancel the surrendered Bond and shall authenticate and deliver, without charge
to the Registered Owner or transferee therefor, a new Bond (or Bonds at the option of the new
Registered Owner) of the same series, date, maturity and interest rate and for the same aggregate
principal amount in any authorized denomination, naming as Registered Owner the person or
persons listed as the assignee on the assignment form appearing on the surrendered Bond, in
exchange for such surrendered and canceled Bond. Any Bond may be surrendered to the
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Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds of
the same series, date, maturity and interest rate, in any authorized denomination or
denominations. The Registrar shall not be obligated to register the transfer or to exchange any
Bond during the 15 days preceding the date any such Bond is to be redeemed.
(f) Registrar's Ownership of Bonds. The Registrar may become the Registered
Owner of any Bond with the same rights it would have if it were not the Registrar, and to the
extent permitted by law, may act as depository for and permit any of its officers or directors to
act as member of, or in any other capacity with respect to, any committee formed to protect the
right of the Registered Owners of Bonds.
(g) Registration Covenant. The Port covenants that, until all of the 2011 Refunding
Bonds have been surrendered and canceled, it will maintain a system for recording the ownership
of the Bonds that complies with the provisions of Section 149 of the Code.
(h) Place and Medium of Payment. Both principal of and interest on the Bonds shall
be payable in lawful money of the United States of America. Interest on the Bonds shall be
calculated on the basis of a 360-day year, consisting of twelve 30-day months. For so long as all
Bonds are in fully immobilized form, payments of principal and interest shall be made as
provided in accordance with the operational arrangements of DTC referred to in the Letter of
Representations.
In the event that the Bonds are no longer in fully immobilized form, interest on the Bonds
shall be paid by check mailed to the Registered Owners at the addresses for such Registered
Owners appearing on the Bond Register on the 15th day of the month preceding the interest
payment date, and principal and premium, if any, of the Bonds shall be payable by check upon
presentation and surrender of such Bonds by the Registered Owners at the principal office of the
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Registrar; provided, however, that if so requested in writing prior to the opening of business on
the 15th day of the month preceding any interest payment date by the Registered Owner of at
least $1,000,000 aggregate principal amount of Bonds, interest will be paid thereafter by wire
transfer on the date due to an account with a bank located within the United States.
Section 6. Bond Fund. A special fund of the Port designated the "Port of Seattle
Limited Tax General Obligation Bond Redemption Fund, 2011" (the "Bond Fund") is hereby
authorized to be created in the office of the Treasurer of the Port for the purpose of paying and
securing the payment of the Bonds. The Bond Fund may be maintained as a single account or
multiple accounts at the option of the Port and may be re-designated in accordance with the
accounting procedures then followed by the Port. The Bond Fund shall be held separate and
apart from all other funds and accounts of the Port and shall be a trust fund for the owners, from
time to time, of the Bonds. The taxes levied for the purpose of paying principal of and interest
on the Bonds and other legally available funds to be used to pay the Bonds shall be deposited in
the Bond Fund no later than the date such funds are required for the payment of principal of and
interest on the Bonds.
The Port hereby further irrevocably covenants that it will budget and make annual levies
of ad valorem taxes upon all of the taxable property within the boundaries of the Port subject to
taxation within and as a part of the tax levy permitted to be levied by the Port without a vote of
the electors, in amounts sufficient (together with other legally available funds) to pay the
principal of and interest on the Bonds as the same shall become due. The full faith, credit and
resources of the Port are hereby irrevocably pledged for the annual levy and collection of such
taxes and for the prompt payment of such principal and interest. The Bonds are general
obligations of the Port.
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Section 7. Defeasance. In the event that money and/or Government Obligations
maturing at such time or times and bearing interest to be earned thereon in amounts (together
with such money, if necessary) sufficient to redeem and retire part or all of the Bonds authorized
hereunder in accordance with their terms, are set aside in a special account of the Port to effect
such redemption and retirement, and such moneys and the principal of and interest on such
obligations are irrevocably set aside and pledged for such purpose, then no further payments need
be made into the Bond Fund of the Port for the payment of the principal of and interest on the
Bonds so provided for, and such Bonds shall cease to be entitled to any lien, benefit or security of
this resolution except for the right to receive the moneys so set aside and pledged, and such
Bonds shall be deemed not to be outstanding hereunder.
The Registrar shall provide notice of defeasance of Bonds to registered owners and to
each party entitled to receive notice pursuant to Section 12.
Section 8. Tax Covenants.
(a) The 2011 Refunding Bonds. The Port shall comply with the terms of the Federal
Tax Certificate.
(b) No Designation under Section 265(b) of the Code. The Bonds are not "qualified
tax-exempt obligations" under Section 265(b)(3) of the Code for banks, thrift institutions and
other financial institutions.
Section 9. Lost, Stolen or Destroyed Bonds. In case any Bond or Bonds shall be lost,
stolen or destroyed, the Registrar may execute and deliver a new Bond or Bonds of like series,
date, number and tenor to the Registered Owner thereof upon the owner's paying the expenses
and charges of the Port in connection therewith and upon his/her filing with the Port evidence
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satisfactory to the Port that such Bond was actually lost, stolen or destroyed and of his/her
ownership thereof, and upon furnishing the Port with indemnity satisfactory to the Port.
Section 10. Form of Bonds and Registration Certificate. The Bonds of each series
shall be in substantially the following form:
[DTC Legend]
UNITED STATES OF AMERICA
NO. ______ $____________
STATE OF WASHINGTON
PORT OF SEATTLE
LIMITED TAX GENERAL OBLIGATION [REFUNDING] BOND, 2011[TAXABLE][AMT]
Maturity Date: CUSIP No. _______
Interest Rate:
Registered Owner: CEDE & Co.
Principal Amount:
THE PORT OF SEATTLE, a municipal corporation organized and existing under and by
virtue of the laws of the State of Washington (the "Port"), promises to pay to the Registered
Owner identified above, or registered assigns, on the Maturity Date identified above the Principal
Amount indicated above and to pay interest thereon from the Bond Fund from ______, 2011, or
the most recent date to which interest has been paid or duly provided for or until payment of this
bond at the Interest Rate set forth above, payable on __________, and semiannually thereafter on
the first days of each ______ and _________. The principal of, premium, if any, and interest on
this bond are payable in lawful money of the United States of America. Principal and interest on
this bond shall be paid as provided in the Blanket Issuer Letter of Representations (the "Letter of
Representations") from the Port to The Depository Trust Company ("DTC"). The Port has
specified and adopted the registration system for the bonds of this issue specified by the State
Finance Committee, and the fiscal agency of the State will act as the registrar, authenticating
agent and paying agent (the "Registrar"). Capitalized terms used in this bond which are not
specifically defined have the meanings given such terms in the Resolution No. 3648 of the Port
Commission (the "Bond Resolution").
This bond is one of a series of bonds of the Port in the aggregate principal amount of
$__________, of like date, tenor and effect, except as to number, amount, rate of interest and
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date of maturity and is issued pursuant to the Bond Resolution to [fund Port operations][ refund
certain outstanding Port obligations]. [Simultaneously herewith, the Port is issuing one other
series of general obligation bonds: its Limited Tax General Obligation [Refunding] Bonds
[Taxable][AMT] in the principal amount of $_________].
The bonds of this issue maturing on and prior to ____________ are not subject to
redemption in advance of their scheduled maturity. The bonds of this issue maturing on and after
_____________ are subject to redemption at the option of the Port on and after ___________ [in
whole or in part on any date, and if in part, with maturities to be selected by the Port at the price
of par plus accrued interest to the date fixed for redemption][as described in the Bond Purchase
Contract for the bonds of this issue/___________].
[Unless previously redeemed pursuant to the foregoing optional redemption provisions,
the bonds of this issue maturing in the year ____ are subject to mandatory redemption on
______________ of the following years at a price of par plus accrued interest to the date fixed
for redemption:
Year Amount
$
*
* Final maturity
[The interest on this bond is not exempt from federal income taxation.][The bonds of this
issue are private activity bonds and are not "qualified tax exempt obligations" eligible for
investment by financial institutions within the meaning of Section 265(b) of the Internal Revenue
Code of 1986, as amended.]
The Port hereby covenants and agrees with the owner and holder of this bond that it will
keep and perform all the covenants of this bond and the Bond Resolution.
The Port has irrevocably covenanted in the Bond Resolution that it will budget and make
annual levies of ad valorem taxes upon all of the taxable property within the boundaries of the
Port subject to taxation within and as a part of the tax levy permitted to be levied by the Port
without a vote of the electors, in amounts sufficient (together with other legally available funds)
to pay the principal of and interest on the bonds of this issue as the same shall become due. The
full faith, credit and resources of the Port are irrevocably pledged for the annual levy and
collection of such taxes and for the prompt payment of such principal and interest. The bonds of
this issue are general obligations of the Port. The pledge of tax levies may be discharged prior to
maturity of the bonds of this by making provision for the payment thereof on the terms and
conditions set forth in the Bond Resolution.
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This bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Bond Resolution until the Certificate of Authentication hereon shall
have been manually signed by or on behalf of the Registrar.
It is hereby certified and declared that this bond and the bonds of this issue are issued
pursuant to and in strict compliance with the Constitution and laws of the State of Washington
and resolutions of the Port and that all acts, conditions and things required to be done precedent
to and in the issuance of this bond have happened, been done and performed.
IN WITNESS WHEREOF, the Port of Seattle has caused this bond to be executed by the
manual or facsimile signatures of the President and Secretary of the Port Commission, and the
corporate seal of the Port to be impressed, imprinted or otherwise reproduced hereon as of the
____ day of _____, 2011.
PORT OF SEATTLE
By /s/
President, Port Commission
[SEAL]
ATTEST:
/s/
Secretary, Port Commission
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The Certificate of Authentication printed on the Bonds shall be substantially in the
following form:
CERTIFICATE OF AUTHENTICATION
Date of Authentication: ____________________
This bond is one of the bonds described in the within mentioned Bond Resolution and is
one of the Limited Tax General Obligation [Refunding ]Bonds, 2011[Taxable][AMT] of the Port
of Seattle, dated __________, 2011.
WASHINGTON STATE FISCAL AGENCY,
Registrar
By
Authorized Signer
Section 11. Execution. The Bonds shall be executed o n behalf of the Port with the
manual or facsimile signature of the President of its Commission, shall be attested by the manual
or facsimile signature of the Secretary thereof and shall have the seal of the Port impressed,
imprinted or otherwise reproduced thereon.
Only such Bonds as shall bear thereon a Certificate of Authentication in the form
hereinbefore recited, manually executed by the Registrar, shall be valid or obligatory for any
purpose or entitled to the benefits of this resolution. Such Certificate of Authentication shall be
conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and
delivered hereunder and are entitled to the benefits of this resolution.
In case either of the officers of the Port who shall have executed the Bonds shall cease to
be such officer or officers of the Port before the Bonds so signed shall have been authenticated or
delivered by the Registrar, or issued by the Port, such Bonds may nevertheless be authenticated,
delivered and issued and upon such authentication, delivery and issuance, shall be as binding
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upon the Port as though those who signed the same had continued to be such officers of the Port.
Any Bond may also be signed and attested on behalf of the Port by such persons as at the actual
date of execution of such Bond shall be the proper officers of the Port although at the original
date of such Bond any such person shall not have been such officer.
Section 12. Ongoing Disclosure. The Designated Port Representative is authorized
to, in his or her discretion, execute and deliver an agreement for ongoing disclosure providing for
an undertaking by the Port to assist the Underwriters in complying with Rule 15c2-12
promulgated by the SEC.
Section 13. Sale of Bonds.
(a) Designation of Refunded Bonds. As outlined in Section 2 of this resolution,
the Refunding Candidates may be called for redemption prior to their scheduled maturities. All
or some of the Refunding Candidates may be refunded with the proceeds of the 2011 Refunding
Bonds authorized by this resolution. The Designated Port Representative may select some or all
of the Refunding Candidates and designate those Refunding Candidates as the "Refunded
Bonds" in the Bond Purchase Contract for the 2011 Refunding Bonds if and to the extent that the
net present value aggregate savings with respect to Refunded Bonds to be realized as a result of
the refunding of the Refunded Bonds, after payment of all costs of issuance of the allocable
Bonds), is at least equal to the Savings Target.
(b) Bond Sale. The Bonds shall be sold at negotiated sale to the Underwriters
pursuant to the terms of one or more Bond Purchase Contracts. The Designated Port
Representative is hereby authorized to negotiate terms for the purchase of the Bonds and to
execute the Bond Purchase Contract for each series, with such terms (including the designation
of the Refunded Bonds) as are approved by the Designated Port Representative pursuant to this
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section and consistent with this resolution. The Commission has been advised by the Port's
financial advisor that market conditions are fluctuating and, as a result, the most favorable
market conditions may occur on a day other than a regular meeting date of the Commission. The
Commission has determined that it would be in the best interest of the Port to delegate to the
Designated Port Representative for a limited time the authority with respect to each series to
approve the series designations, the date of sale, final interest rates, maturity dates, aggregate
principal amount, principal amounts and prices of each maturity, redemption rights, and other
terms and conditions of the Bonds. The Designated Port Representative is hereby authorized to
approve with respect to each series, the series designations, the date of sale, the final interest
rates, maturity dates, aggregate principal amount, principal amounts of each maturity and
redemption rights for the Bonds in the manner provided hereafter (A) so long as the aggregate
principal amount of the Bonds does not exceed $117,000,000, (B) (with respect to the 2011
Taxable Bonds) so long as the true interest cost for the 2011 Taxable Bonds does not exceed
4.5% per annum, and (C) (with respect to the 2011 Refunding Bonds) so long as the Savings
Target is met (as described in subsection (a) of this Section 13).
In determining the series designations, date or dates of sale, the final interest rates,
maturity dates, aggregate principal amount, principal maturities, redemption rights of the Bonds,
the Designated Port Representative, in consultation with Port staff and the Port's financial
advisor, shall take into account those factors that, in his judgment, will result in terms favorable
to the Port considering financial market conditions, interest rates and terms for obligations
comparable in terms, tenor and quality to the Bonds of each series. Subject to the terms and
conditions set forth in this section, the Designated Port Representative is hereby authorized to
execute the final form of one or more Bond Purchase Contracts, upon the Designated Port
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Representative's approval of the series designation, date of sale, the final interest rates, maturity
dates, aggregate principal amount, principal maturities and redemption rights set forth therein.
Following the execution of a Bond Purchase Contract, the Designated Port Representative shall
provide a report to the Commission, describing the final terms of the Bonds approved pursuant to
the authority delegated in this section. The authority granted to the Designated Port
Representative and the Designated Port Representative by this section shall expire six months
from the date of adoption of this resolution. If a Bond Purchase Contract for the Bonds of a
series has not been executed within such six month period, the authorization for the issuance of
the Bonds of that series shall be rescinded, and the Bonds of that series shall not be issued nor
their sale approved unless such Bonds shall have been re-authorized by resolution of the
Commission. The resolution reauthorizing the issuance and sale of the Bonds may be in the form
of a new resolution repealing this resolution in whole or in part (only with respect to the Bonds
not issued) or may be in the form of an amendatory resolution approving a bond purchase
contract or establishing terms and conditions for the authority delegated under this section.
Upon the adoption of this resolution, the proper officials of the Port including the
Designated Port Representative, are authorized and directed to undertake all other actions
necessary for the prompt execution and delivery of the Bonds to the Underwriters thereof and
further to execute all closing certificates and documents required to effect the closing and
delivery of the Bonds in accordance with the terms of the Bond Purchase Contract.
The Designated Port Representative is authorized to deem final and to approve for
purposes of the Rule, on behalf of the Port, any Preliminary Official Statement and Official
Statement (as such terms are defined in the Bond Purchase Contract) and any supplement thereto
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relating to the issuance and sale of the Bonds and the distribution of the Bonds pursuant thereto
with such changes, if any, as may be deemed by him/her to be appropriate.
The Designated Port Representative and other Port officials, agents and representatives
are hereby authorized and directed to do everything necessary for the prompt issuance, execution
and delivery of the Bonds to the Underwriters and for the proper application and use of the
proceeds of sale of the Bonds. In furtherance of the foregoing, the Designated Port
Representative is authorized to approve and enter into agreements for the payment of costs of
issuance, including Underwriters' discount, the fees and expenses specified in the Bond Purchase
Contract, including fees and expenses of Underwriters and other retained services, including
bond counsel, rating agencies, fiscal agency, escrow agent, financial advisory services, escrow
structuring services and other expenses customarily incurred in connection with issuance and sale
of bonds.
Section 14. Application of Bond Proceeds.
(a) Application of Bond Proceeds. The net proceeds of the 2011 Taxable Bonds
(exclusive of any amounts that may be designated by the Designated Port Representative in a
closing certificate to be allocated to pay costs of issuance, shall be remitted to the Port to be used
for Port purposes. The net proceeds of the 2011 Refunding Bonds (exclusive of any amounts that
may be designated by the Designated Port Representative in a closing certificate to be allocated
to pay costs of issuance, together with other available funds of the Port in the amount specified
by the Designated Port Representative, shall be used at the direction of the Designated Port
Representative to pay and redeem the Refunded Bonds or to effect a defeasance of the Refunded
Bonds.
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(b) Defeasance of Refunded Bonds. If the Port determines to defease the Refunded
Bonds, the net proceeds of the 2011 Refunding Bonds shall be deposited with an Escrow Agent
and shall be utilized to purchase the Government Obligations specified by the Designated Port
Representative (which obligations so purchased, are herein called "Acquired Obligations") and to
maintain such necessary beginning cash balance to defease the Refunded Bonds and to discharge
the other obligations of the Port relating thereto under the 2000 Bond Resolution authorizing
their issuance, by providing for the payment of the interest on the Refunded Bonds to the date
fixed for redemption and the redemption price (the principal amount) on the date fixed for
redemption of the Refunded Bonds. When the final transfer has been made for the payment of
such redemption price and interest on the Refunded Bonds, any balance then remaining with the
Escrow Agent shall be transferred to the account designated by the Port and used for the purposes
specified by the Designated Port Representative.
(c) Acquired Obligations. The Acquired Obligations, if any, shall be payable in such
amounts and at such times that, together with any necessary beginning cash balance, will be
sufficient to provide for the payment of:
(1) the interest on the Refunded Bonds as such becomes due on and before the
date fixed for redemption of the Refunded Bonds; and
(2) the price of redemption of the Refunded Bonds on the date fixed for
redemption of the Refunded Bonds.
(d) Authorizing Appointment of Escrow Agent. The Commission hereby authorizes
and directs the Designated Port Representative (if the Designated Port Representative determines
that an escrow would be necessary or desirable to effect the defeasance of the Refunded Bonds)
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to select a financial institution to act as the escrow agent for the Refunded Bonds (the "Escrow
Agent").
Section 15. Redemption of Refunded Bonds. Conditioned upon the issuance, closing
and delivery of the 2011 Refunding Bonds, the Commission hereby calls the Refunded Bonds for
redemption on the redemption date specified by the Designated Port Representative in
accordance with the provisions of the 2000 Bond Resolution authorizing the issuance,
redemption and retirement of the Refunded Bonds, respectively, prior to their stated maturities.
Said call for redemption of the Refunded Bonds shall be irrevocable after the closing and
delivery of the 2011 Refunding Bonds.
The Designated Port Representative may cause to be disseminated a conditional notice of
redemption prior to the closing and delivery of the 2011 Refunding Bonds. If so appointed, the
Escrow Agent shall be authorized and directed in the Escrow Agreement to provide for the
giving of irrevocable notice of the redemption of the Refunded Bonds in accordance with the
terms of 2000 Bond Resolution authorizing the issuance of the Refunded Bonds and as described
in the Escrow Agreement. The Treasurer is authorized and directed to provide whatever
assistance is necessary to accomplish such redemption and the giving of notice therefor. The
costs of mailing of such notice shall be an expense of the Port.
The Port or the Escrow Agent on behalf of the Port shall be authorized and directed to
pay to the fiscal agency or agencies of the State of Washington, sums sufficient to pay, when due,
the payments specified in Section 14 (c) of this resolution. All such sums shall be paid from the
moneys and the Acquired Obligations pursuant to the previous section of this resolution, and the
income therefrom and proceeds thereof.
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If an Escrow Agent is appointed, the Port will cause all necessary and proper fees,
compensation and expenses of the Escrow Agent for the Refunded Bonds to be paid when due.
If an Escrow Agent is appointed, the Designated Port Representative is authorized and directed to
execute and deliver the Escrow Agreement to the Escrow Agent when the provisions thereof
have been fixed and determined for closing and delivery of the 2011 Refunding Bonds. The
Escrow Agreement, if any, shall be substantially in the form of Exhibit A attached to this
resolution and by this reference hereby made a part of this resolution.
Section 16. Effective Date. This resolution shall be effective immediately upon its
adoption.
ADOPTED by the Commission of the Port of Seattle at a meeting thereof, held this
_____ day of February, 2011, and duly authenticated in open session by the signatures of the
Commissioners present and voting in favor thereof.
PORT OF SEATTLE
Commissioners
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CERTIFICATE
I, the undersigned, Secretary of the Port Commission (the "Commission") of the Port of
Seattle (the "Port"), DO HEREBY CERTIFY:
1. That the attached resolution numbered 3648 (the "Resolution") is a true and
correct copy of a resolution of the Port, as finally adopted at a meeting of the Commission held
on the ___ day of February, 2011, and duly recorded in my office.
2. That said meeting was duly convened and held in all respects in accordance with
law, and to the extent required by law, due and proper notice of such meeting was given; that a
quorum of the Commission was present throughout the meeting and a legally sufficient number
of members of the Commission voted in the proper manner for the adoption of said Resolution;
that all other requirements and proceedings incident to the proper adoption of said Resolution
have been duly fulfilled, carried out and otherwise observed, and that I am authorized to execute
this certificate.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of February, 2011.
Secretary
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EXHIBIT A
E S C R O W D E P O S I T A G R E E M E N T
PORT OF SEATTLE
LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, 2011 (AMT)
THIS ESCROW AGREEMENT, dated as of ___________, 2011 (herein, together with
any amendments or supplements hereto, called the "Agreement") is entered into by and between
THE PORT OF SEATTLE (herein called the "Port") and __________________, as escrow agent
(herein, together with any successor in such capacity, called the "Escrow Agent"). The notice
addresses of the Port and the Escrow Agent are shown on Annex A attached hereto and made a
part hereof.
W I T N E S S E T H :
WHEREAS, the Port heretofore has issued and there presently remain outstanding the
obligations described in Annex B attached hereto (the "Refunded Bonds"); and
WHEREAS, pursuant to Resolution No. _______ adopted on February ____, 2011 (the
"Bond Resolution"), the Port has determined to issue its Limited Tax General Obligation
Refunding Bonds, 2011B (the "Bonds"); and
WHEREAS; a portion of the proceeds of the Bonds are being used for the purpose of
providing funds to pay the costs of refunding the Refunded Bonds; and
WHEREAS, the Escrow Agent has reviewed the Bond Resolution and this Agreement,
and is willing to serve as Escrow Agent hereunder; and
WHEREAS, pursuant to the Bond Resolution, the Refunded Bonds have been designated
for redemption prior to their scheduled maturity dates and, after provision is made for such
redemption, the Refunded Bonds will come due in such years, bear interest at such rates, and be
payable at such times and in such amounts as are set forth in Annex C attached hereto and made
a part hereof; and
WHEREAS, when Escrowed Securities have been deposited with the Escrow Agent for
the payment of all principal and interest of the Refunded Bonds when due, then the Refunded
Bonds shall no longer be regarded as outstanding except for the purpose of receiving payment
from the funds provided for such purpose; and
WHEREAS, to facilitate the receipt and transfer of proceeds of the Escrowed Securities,
particularly those in book entry form, the Port desires to establish the Escrow Fund at the
principal corporate trust office of the Escrow Agent; and
WHEREAS, the Escrow Agent is a party to this Agreement to acknowledge its
acceptance of the terms and provisions hereof;
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NOW, THEREFORE, in consideration of the mutual undertakings, promises and
agreements herein contained, the sufficiency of which hereby are acknowledged, and to secure
the full and timely payment of principal of and the interest on the Refunded Bonds, the Port and
the Escrow Agent mutually undertake, promise and agree for themselves and their respective
representatives and successors, as follows:
Article 1. Definitions
Section 1.1. Definitions.
Unless the context clearly indicates otherwise, the following terms shall have the
meanings assigned to them below when they are used in this Agreement:
Treasurer means the Chief Financial Officer of the Port, or any other public officer as
may hereafter be designated pursuant to law to have the custody of Port funds.
Escrow Fund means the fund created by this Agreement to be established, held and
administered by the Escrow Agent pursuant to the provisions of this Agreement.
Escrowed Securities means the noncallable government obligations described in
Annex D attached to this Agreement, or cash or other noncallable obligations substituted therefor
pursuant to Section 4.2 of this Agreement. Escrowed Securities shall consist solely of direct,
noncallable (a) United States Treasury Obligations, (b) United States Treasury Obligations - State
and Local Government Series, (c) non-prepayable obligations which are unconditionally
guaranteed as to full and timely payment of principal and interest by the United States of
America or (d) REFCORP debt obligations unconditionally guaranteed by the United States.
Paying Agent means the fiscal agency of the State of Washington, as the paying agent for
the Refunded Bonds.
Section 1.2. Other Definitions.
The terms "Agreement," "Port," "Escrow Agent," "Bond Resolution," "Refunded Bonds"
and "Bonds" when they are used in this Agreement, shall have the meanings assigned to them in
the preamble to this Agreement.
Section 1.3. Interpretations.
The titles and headings of the articles and sections of this Agreement have been inserted
for convenience and reference only and are not to be considered a part hereof and shall not in any
way modify or restrict the terms hereof. This Agreement and all of the terms and provisions
hereof shall be liberally construed to effectuate the purposes set forth herein and to achieve the
intended purpose of providing for the refunding of the Refunded Bonds in accordance with
applicable law.
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Article 2. Deposit of Funds and Escrowed Securities
Section 2.1. Deposits in the Escrow Fund.
Concurrently with the sale and delivery of the Bonds the Port shall deposit, or cause to be
deposited, with the Escrow Agent, for deposit in the Escrow Fund, the funds sufficient to
purchase the Escrowed Securities and pay costs of issuance described in Annex D attached
hereto, and the Escrow Agent shall, upon the receipt thereof, acknowledge such receipt to the
Port in writing.
Article 3. Creation and Operation of Escrow Fund
Section 3.1. Escrow Fund.
The Escrow Agent has created on its books a special trust fund and irrevocable escrow to
be known as the Refunding Account (the "Escrow Fund"). The Escrow Agent hereby agrees that
upon receipt thereof it will deposit to the credit of the Escrow Fund the funds and the Escrowed
Securities described in Annex D attached hereto. Such deposit, all proceeds therefrom, and all
cash balances from time to time on deposit therein (a) shall be the property of the Escrow Fund,
(b) shall be applied only in strict conformity with the terms and conditions of this Agreement,
and (c) are hereby irrevocably pledged to the payment of the principal of and interest on the
Refunded Bonds, which payment shall be made by timely transfers of such amounts at such times
as are provided for in Section 3.2 hereof. When the final transfers have been made for the
payment of such principal of and interest on the Refunded Bonds, any balance then remaining in
the Escrow Fund shall be transferred to the Port, and the Escrow Agent shall thereupon be
discharged from any further duties hereunder.
Section 3.2. Payment of Principal and Interest.
The Escrow Agent is hereby irrevocably instructed to transfer to the Paying Agent from
the cash balances from time to time on deposit in the Escrow Fund, the amounts required to pay
the principal of the Refunded Bonds on their redemption date and interest thereon to such
redemption date in the amounts and at the times shown in Annex C attached hereto.
Section 3.3. Sufficiency of Escrow Fund.
The Port represents that, based upon the information provided by the Underwriters, the
successive receipts of the principal of and interest on the Escrowed Securities will assure that the
cash balance on deposit from time to time in the Escrow Fund will be at all times sufficient to
provide moneys for transfer to the Paying Agent at the times and in the amounts required to pay
the interest on the Refunded Bonds as such interest comes due and the principal of the Refunded
Bonds as the Refunded Bonds are paid on an optional redemption date prior to maturity, all as
more fully set forth in Annex E attached hereto. If, for any reason, at any time, the cash balances
on deposit or scheduled to be on deposit in the Escrow Fund shall be insufficient to transfer the
amounts required by the Paying Agent to make the payments set forth in Section 3.2. hereof, the
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Port shall timely deposit in the Escrow Fund, from any funds that are lawfully available therefor,
additional funds in the amounts required to make such payments. Notice of any such
insufficiency shall be given promptly as hereinafter provided, but the Escrow Agent shall not in
any manner be responsible for any insufficiency of funds in the Escrow Fund or the Port's failure
to make additional deposits thereto.
Section 3.4. Trust Fund.
The Escrow Agent shall hold at all times the Escrow Fund, the Escrowed Securities and
all other assets of the Escrow Fund, wholly segregated from all other funds and securities on
deposit with the Escrow Agent; it shall never allow the Escrowed Securities or any other assets
of the Escrow Fund to be commingled with any other funds or securities of the Escrow Agent;
and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The
Escrowed Securities and other assets of the Escrow Fund shall always be maintained by the
Escrow Agent as trust funds for the benefit of the owners of the Refunded Bonds; and a special
account thereof shall at all times be maintained on the books of the Escrow Agent. The amounts
received by the Escrow Agent under this Agreement shall not be considered as a banking deposit
by the Port, and the Escrow Agent shall have no right to title with respect thereto except as a
trustee and Escrow Agent under the terms of this Agreement.
Article 4. Limitation on Investments
Section 4.1. Investments.
Except for the initial investment in the Escrowed Securities, the Escrow Agent shall not
have any power or duty to invest or reinvest any money held hereunder, or to make substitutions
of the Escrowed Securities, or to sell, transfer, or otherwise dispose of the Escrowed Securities.
Article 5. Application of Cash Balances
Section 5.1. In General.
Except as provided in Sections 2.1 and 3.2 hereof, no withdrawals, transfers, or
reinvestment shall be made of cash balances in the Escrow Fund.
Article 6. Redemption of Refunded Bonds
Section 6.1. Call for Redemption.
The Port hereby irrevocably calls the Refunded Bonds for redemption on their earliest
redemption date, as shown on Appendix A attached hereto.
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Section 6.2. Notice of Redemption.
The Escrow Agent agrees to give a notice of defeasance and a notice of the redemption of
the Refunded Bonds to the Paying Agent for dissemination in accordance with the terms of
Resolution No. 3393 of the Commission and in substantially the form attached hereto as
Appendix A attached hereto and as described on said Appendix Ato the Paying Agent for
distribution as described therein. The Escrow Agent hereby certifies that provision satisfactory
and acceptable to the Escrow Agent has been made for the giving of notice of redemption of the
Refunded Bonds.
Article 7. Records and Reports
Section 7.1. Records.
The Escrow Agent will keep books of record and account in which complete and accurate
entries shall be made of all transactions relating to the receipts, disbursements, allocations and
application of the money and Escrowed Securities deposited to the Escrow Fund and all proceeds
thereof, and such books shall be available for inspection during business hours and after
reasonable notice.
Section 7.2. Reports.
The Escrow Agent annually shall prepare and send to the Port a written report
summarizing all transactions relating to the Escrow Fund promptly following the final
redemption of the Refunded Bonds.
Article 8. Concerning the Paying Agent and Escrow Agent
Section 8.1. Representations.
The Escrow Agent hereby represents that it has all necessary power and authority to enter
into this Agreement and undertake the obligations and responsibilities imposed upon it herein,
and that it will carry out all of its obligations hereunder.
Section 8.2. Limitation on Liability.
The liability of the Escrow Agent to transfer funds for the payment of the principal of and
interest on the Refunded Bonds shall be limited to the proceeds of the Escrowed Securities and
the cash balances from time to time on deposit in the Escrow Fund. Notwithstanding any
provision contained herein to the contrary, the Escrow Agent shall have no liability whatsoever
for the insufficiency of funds from time to time in the Escrow Fund or any failure of the obligors
of the Escrowed Securities to make timely payment thereon, except for the obligation to notify
the Port promptly of any such occurrence.
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The recitals herein and in the proceedings authorizing the Bonds shall be taken as the
statements of the Port and shall not be considered as made by, or imposing any obligation or
liability upon, the Escrow Agent.
The Escrow Agent is not a party to the proceedings authorizing the Bonds or the
Refunded Bonds and is not responsible for and is not bound by any of the provisions thereof
(except to the extent that the Escrow Agent may be a place of payment and paying agent and/or a
paying agent/registrar therefor). In its capacity as Escrow Agent, it is agreed that the Escrow
Agent need look only to the terms and provisions of this Agreement.
The Escrow agent makes no representations as to the value, conditions or sufficiency of
the Escrow Fund, or any part thereof, or as to the title of the Port thereto, or as to the security
afforded thereby or hereby, and the Escrow Agent shall not incur any liability or responsibility in
respect to any of such matters.
It is the intention of the parties hereto that the Escrow Agent shall never be required to
use or advance its own funds or otherwise incur personal financial liability in the performance of
any of its duties or the exercise of any of its rights and powers hereunder.
The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in
good faith in any exercise of reasonable care and believed by it to be within the discretion or
power conferred upon it by this Agreement, nor shall the Escrow Agent be responsible for the
consequences of any error of judgment; and the Escrow Agent shall not be answerable except for
its own action, neglect or default, nor for any loss unless the same shall have been through its
negligence or want of good faith.
Unless it is specifically otherwise provided herein, the Escrow Agent has no duty to
determine or inquire into the happening or occurrence of any event or contingency or the
performance or failure of performance of the Port with respect to arrangements or contracts with
others, with the Escrow Agent'ssole duty hereunder being to safeguard the Escrow Fund, to
dispose of and deliver the same in accordance with this Agreement. If, however, the Escrow
Agent is called upon by the terms of this Agreement to determine the occurrence of any event or
contingency, the Escrow Agent shall be obligated, in making such determination, only to exercise
reasonable care and diligence, and in event of error in making such determination the Escrow
Agent shall be liable only for its own misconduct or its negligence. In determining the
occurrence of any such event or contingency the Escrow Agent may request from the Port or any
other person such reasonable additional evidence as the Escrow Agent in its discretion may deem
necessary to determine any fact relating to the occurrence of such event or contingency, and in
this connection may make inquiries of, and consult with, among others, the Port at any time.
Section 8.3. Compensation.
The Port shall pay to the Escrow Agent fees for performing the services hereunder and for
the expenses incurred or to be incurred by the Escrow Agent in the administration of this
Agreement pursuant to the terms of the Fee Schedule attached hereto as Appendix C. The
Escrow Agent hereby agrees that in no event shall it ever assert any claim or lien against the
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Escrow Fund for any fees for its services, whether regular or extraordinary, as Escrow Agent, or
in any other capacity, or for reimbursement for any of its expenses as Escrow Agent or in any
other capacity.
Section 8.4. Successor Escrow Agents.
If at any time the Escrow Agent or its legal successor or successors should become
unable, through operation or law or otherwise, to act as escrow agent hereunder, or if its property
and affairs shall be taken under the control of any state or federal court or administrative body
because of insolvency or bankruptcy or for any other reason, a vacancy shall forthwith exist in
the office of Escrow Agent hereunder. In such event the Port, by appropriate action, promptly
shall appoint an Escrow Agent to fill such vacancy. If no successor Escrow Agent shall have
been appointed by the Port within 60 days, a successor may be appointed by the owners of a
majority in principal amount of the Refunded Bonds then outstanding by an instrument or
instruments in writing filed with the Port, signed by such owners or by their duly authorized
attorneys-in-fact. If, in a proper case, no appointment of a successor Escrow Agent shall be made
pursuant to the foregoing provisions of this section within three months after a vacancy shall
have occurred, the owner of any Refunded Bond may apply to any court of competent
jurisdiction to appoint a successor Escrow Agent. Such court may thereupon, after such notice, if
any, as it may deem proper, prescribe and appoint a successor Escrow Agent.
Any successor Escrow Agent shall be a corporation organized and doing business under
the laws of the United States or the State of Washington, authorized under such laws to exercise
corporate trust powers, having its principal office and place of business in the State of
Washington, having a combined capital and surplus of at least $100,000,000 and subject to the
supervision or examination by federal or state authority.
Any successor Escrow Agent shall execute, acknowledge and deliver to the Port and the
Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall
execute and deliver an instrument transferring to such successor Escrow Agent, subject to the
terms of this Agreement, all the rights, powers and trusts of the Escrow Agent hereunder. Upon
the request of any such successor Escrow Agent, the Port shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor Escrow Agent all
such rights, powers and duties.
The obligations assumed by the Escrow Agent pursuant to this Agreement may be
transferred by the Escrow Agent to a successor Escrow Agent if (a) the requirements of this
Section 8.4 are satisfied; (b) the successor Escrow Agent has assumed all the obligations of the
Escrow Agent under this Agreement; and (c) all of the Escrowed Securities and money held by
the Escrow Agent pursuant to this Agreement have been duly transferred to such successor
Escrow Agent.
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Article 9. Miscellaneous
Section 9.1. Notice.
Any notice, authorization, request, or demand required or permitted to be given hereunder
shall be in writing and shall be deemed to have been duly given when mailed by registered or
certified mail, postage prepaid addressed to the Port, the Port Treasurer or the Escrow Agent at
the address shown on Annex A attached hereto. The United States Post Office registered or
certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date
and fact of delivery. Any party hereto may change the address to which notices are to be
delivered by giving to the other parties not less than ten days prior notice thereof.
Section 9.2. Termination of Responsibilities.
Upon the taking of all the actions as described herein by the Escrow Agent, the Escrow
Agent shall have no further obligations or responsibilities hereunder to the Port, the owners of
the Refunded Bonds or to any other person or persons in connection with this Agreement.
Section 9.3. Binding Agreement.
This Agreement shall be binding upon the Port and the Escrow Agent and their respective
successors and legal representatives, and shall inure solely to the benefit of the owners of the
Refunded Bonds, the Port, the Escrow Agent and their respective successors and legal
representatives.
Section 9.4. Severability.
In case any one or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall
be construed as if such invalid or illegal or unenforceable provision had never been contained
herein.
Section 9.5. Washington Law Governs.
This Agreement shall be governed exclusively by the provisions hereof and by the
applicable laws of the State of Washington.
Section 9.6. Time of the Essence.
Time shall be of the essence in the performance of obligations from time to time imposed
upon the Escrow Agent by this Agreement.
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EXECUTED as of the date first written above.
PORT OF SEATTLE
Treasurer
[TBD]
Annex A - Addresses of the Port and the Escrow Agent
Annex B - Description of the Refunded Bonds
Annex C - Schedule of Debt Service on Refunded Bonds
Annex D - Description of Beginning Cash Deposit (if any) and Escrowed Securities
Annex E - Escrow Fund Cash Flow
Appendix A - Notice of Redemption for the 2000B Bonds
Appendix C - Fee Schedule
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ANNEX A
Addresses of the Port and Escrow Agent
Port: Port of Seattle
2711 Alaskan Way
Pier 69
Seattle, WA 98121
Attention: Chief Financial Officer
Escrow Agent: TBD
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-ANNEX B
Description of the Refunded Bonds
Port of Seattle
Limited Tax General Obligation Bonds, 2000B
Maturity Year Principal Interest
(December 1) Amounts Rates
2011 $ 3,495,000 6.00%
2012 3,705,000 6.00
2013 3,925,000 6.00
2014 4,165,000 6.00
2015 4,410,000 6.00
2016 4,675,000 6.00
2017 4,955,000 5.70
2018 5,240,000 5.75
2019 5,540,000 5.80
2020 5,860,000 5.85
2021 6,205,000 5.90
2025 28,640,000 5.75
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ANNEX C
Schedule of Debt Service on Refunded Bonds
Principal/
Date Interest Redemption Price Total
$ -- $
--
--
--
$
Total $ $ $
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ANNEX D
Escrow Deposit
I. Cash $
II. Other Obligations
Principal
Description Maturity Date Amount Interest Rate Total Cost
$ % $
$ $
TOTAL $ $
III. Costs of Issuance
Escrow Agent Fee () $
Bond Counsel Fee (K&L Gates)
Financial Advisor ()
Rating Agency
POS/OS Printing & Mailing
Contingency
TOTAL: $
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ANNEX E
Escrow Fund Cash Flow
Escrow Net Escrow Cash
Date Requirement Receipts Disbursements Balance
$ $ $
$ $ $
$ $ $
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APPENDIX A-1
Notice of Redemption*
Port of Seattle
Limited Tax General Obligation Bonds, Series 2000B
NOTICE IS HEREBY GIVEN that Port of Seattle has called for redemption on
________, 2011, its then outstanding Limited Tax General Obligation Bonds, Series 2000B (the
"Bonds").
The Bonds will be redeemed at a price of one hundred percent (100%) of their principal
amount, plus interest accrued to ____________, 2011. The redemption price of the Bonds is
payable on presentation and surrender of the Bonds at the office of:
The Bank of New York Wells Fargo Bank, National
Mellon Association
Worldwide Securities -or- Corporate Trust Department
Processing 14th Floor - M/S 257
2001 Bryan Street, 9th Floor 999 Third Avenue
Dallas, TX 75201 Seattle, WA 98104
Interest on all Bonds or portions thereof which are redeemed shall cease to accrue
on________, 2011. .
The following Bonds are being redeemed:
Maturity Dates Original
(December 1) Principal Amounts Interest Rates CUSIP Nos.
2011 $ 3,495,000 6.00% 735371FY7
2012 3,705,000 6.00 735371FZ4
2013 3,925,000 6.00 735371GA8
2014 4,165,000 6.00 735371GB6
2015 4,410,000 6.00 735371GC4
2016 4,675,000 6.00 735371GD2
2017 4,955,000 5.70 735371GE0
2018 5,240,000 5.75 735371GF7
2019 5,540,000 5.80 735371GG5
2020 5,860,000 5.85 735371GH3
2021 6,205,000 5.90 735371GJ9
2025 28,640,000 5.75 735371GK6
* This notice shall be given not more than 60 nor less than 30 days prior to __________, 2011. by first class mail
to each registered owner of the Refunded Bonds. In addition notice shall be mailed at least 20 days prior to The
Depository Trust Company of New York, New York; UBS; Moody's Investors Service; Standard and Poors and
Fitch Ratings; and the MSRB.
Page 1 - Appendix A-1
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By Order of the Port of Seattle
The _______________, as Paying Agent
Dated: .
Withholding of 28% of gross redemption proceeds of any payment made within the
United States may be required by the Jobs and Growth Tax Relief Reconciliation Act of 2003
(the "Act") unless the Paying Agent has the correct taxpayer identification number (social
security or employer identification number) or exemption certificate of the payee. Please furnish
a properly completed Form W-9 or exemption certificate or equivalent when presenting your
Bonds.
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Page 1- Appendix C
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