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HomeMy WebLinkAboutGilroy Gardens - Bond Purchase and Sale Agreement (Putman) Execution Copy BOND PURCHASE AND SALE AGREEMENT AGREEMENT dated as of January 31, 2008 by and between Putnam High Yield Municipal Income Trust, Putnam Municipal Opportunities Trust, Putnam Tax Free High Yield Fund, Putnam Investment Funds Municipal Income Trust and Putnam Managed Municipal Income Trust (collectively, the "Sellers") and the City of Gilroy, California (the "Buver"). Recitals The Buyer is the issuer of $27,920,000 City of Gilroy Senior Lien Project Revenue Bonds (Bonfante Gardens Theme Park Project), Series 2000 (the "2000 Bonds"), currently outstanding in the aggregate principal amount of$12,045,000. The Sellers collectively are the beneficial owners of outstanding 2000 Bonds in the aggregate principal amount of$6,525,000. The proceeds of the Bonds were used to finance capital costs of Gilroy Gardens Family Theme Park, Inc., formerly known as Bonfante Gardens, Inc., a non-profit Delaware corporation (the "Borrower"), which owns and operates a botanical theme park in Gilroy, California. The Buyer has determined to acquire all of the real property assets and certain of the personal property assets of the Borrower (the "Borrower Sale Transaction") and, to that end, has offered to acquire the 2000 Bonds beneficially owned by the Sellers and tender them to the bond trustee for cancellation and to defease the remaining 2000 Bonds. The Sellers are willing to cause the 2000 Bonds to be sold to the Buyer, subject to the terms and conditions set forth in this Agreement. The Sellers and the Buyer hereby agree as follows: 1. Purchase and Sale of 2000 Bonds. The Buyer hereby agrees to purchase from the Sellers, and the Sellers hereby agree to sell to the Buyer, in accordance with the terms and conditions of this Agreement, 2000 Bonds in the aggregate principal amount of $6,525,000 (the "Subiect 2000 Bonds"). The Subject 2000 Bonds bear interest at 8% per annum and mature on November 1, 2025 (CDSIP 376058AB9). The purchase price for the Subject 2000 Bonds shall be par plus accrued interest to, but not including, the settlement date. Settlement will be through delivery of the Subject 2000 Bonds through the book-entry system against payment of the purchase price in immediately available funds. Settlement will occur on February 26, 2008, or on such later date (but not later than March 14,2008) as the Buyer shall identify to the Sellers by written notice to the address of the Sellers appearing in the signature pages of this Agreement not later than five business days prior to such alternative purchase date. As the Subject 2000 Bonds are book-entry bonds registered in the name of the nominee of The Depository Trust Company, the parties will arrange for the purchase and sale through their respective custodians and, if applicable, other intermediaries. Each party will be responsible for the fees and expenses of its own custodian, other intermediaries and legal counsel and other out-of-pocket expenses incurred by it in connection herewith. As used in this Agreement, the term "party" means on the one hand the Sellers collectively and on the other hand the Buyer. 108683975DOC 2. Terms. The agreement of the parties to purchase and sell the Subject 2000 Bonds will expire on March 14, 2008 if such purchase and sale (sometimes hereinafter referred to as the "Transaction") shall not have taken place by the close of business on that date. In the event that the Transaction does not take place on or before that date because of the failure to meet any term or condition of this Agreement or because the parties fail to arrange a mutually satisfactory method of transfer, then neither party shall have any further obligation or liability to the other on account of the failure of the Transaction to be consummated. 3. Conditions. The obligation of each party to purchase or sell the Subject 2000 Bonds shall be subject to the additional condition that the Buyer shall have made arrangements reasonably satisfactory to the Sellers to achieve not later than three business days following the consummation of the Transaction (a) the surrender and cancellation of the Subj ect 2000 Bonds and (b) the defeasance of all of the outstanding 2000 Bonds other than the Subject 2000 Bonds in accordance with Article X of the Senior Lien Bond Trust Indenture dated as of December 1, 2000 between the Buyer, as issuer of the 2000 Bonds, and U.S. Bank National Association, as successor indenture trustee (the "Trustee"). In addition, the obligation of the Sellers under this Agreement to sell the Subject 2000 Bonds shall be subject to receipt of a confirmation from the Trustee satisfactory in form and substance to the Sellers that, upon the cancellation of the Subject 2000 Bonds and the defeasance of the remaining 2000 Bonds as contemplated by this Agreement, the indemnity obligation of the Sellers to the Trustee under the letter agreement dated May 3,2005 between the Sellers and the Trustee shall terminate in the manner and to the extent provided in Section 3 of such letter agreement. The Sellers acknowledge that the Buyer has agreed to purchase the Subject 2000 Bonds in order to accomplish the Borrower Sale Transaction and that, should the Buyer determine in the Buyer's sole discretion not to proceed with the Borrower Sale Transaction, the Buyer will not be obligated under this Agreement to purchase the Subject 2000 Bonds. In the event that either the Sellers or the Buyer shall determine not to proceed with the purchase and sale of the Subject 2000 Bonds on account of the failure of any condition referred to in this paragraph to be met, then, as provided in Section 2, such party shall not thereby incur any obligation or liability to the other party. 4. Representations of Sellers. The Sellers represent and warrant that they are the beneficial owners ofthe Subject 2000 Bonds, that the Subject 2000 Bonds are not subject to any ownership or security rights of any third party that prohibit or restrict the sale of the Subject 2000 Bonds and that the Sellers have the power and authority to enter into this Agreement and to sell the Subject 2000 Bonds as provided herein. Other than as provided in the preceding sentence, the Sellers make no representations or warranties with respect to the Transaction or the Subject 2000 Bonds and the sale under this Agreement of the Subject 2000 Bonds shall be without recourse or warranty. 5. Representations of Buyer. The Buyer represents and warrants that it has the power and authority to enter into this Agreement, to purchase the Subject 2000 Bonds and to carry out the other actions contemplated by this Agreement, that it is purchasing the Subject 2000 Bonds as principal, with the intention of surrendering the Subject 2000 Bonds to the Trustee for cancellation in order to facilitate the Borrower Sale Transaction, -2- and that its purchase of the Subject 2000 Bonds is funded from legally available funds of the Buyer and not from funds received from or borrowed on the credit of the Borrower. 6. Non-Public Information. Each of the Sellers and the Buyer acknowledges that each party may possess material, non-public information concerning the 2000 Bonds and/or the Borrower, its financial condition, results of operations, properties, assets, liabilities, management, projections, plans, or prospects (collectively, "Non-Public Information") that is not known to the other party hereto. Each of the parties acknowledges that Non-Public Information not known to it and possessed by the other party may be material to a determination of a fair value for the Subject 2000 Bonds and that value may be substantially different from the purchase price reflected in the Transaction. Each of the parties understands the disadvantage that may result from selling or purchasing the Subject 2000 Bonds without knowledge of all of the Non-Public Information. Each of the parties believes, by reason of its business or financial experience or its own independent investigations that it is capable of evaluating the merits and risks of the Transaction and of protecting its own interest in connection with the Transaction. The Sellers expressly release the Buyer, and the Buyer expressly releases the Sellers, from any and all liabilities arising from the inability or failure of the Sellers or the Buyers, respectively, to review Non-Public Information held by the Buyer or the Sellers, respectively. Each of the Seller and the Buyer agrees to make no claim against the Buyer or the Sellers, respectively, any of their affiliates or any of their respective officers, employees, agents and controlling persons in respect of the Transaction based on failure to disclose Non-Public Information. 7. Governing Laws; Jurisdiction. This Agreement and any issue arising out of or relating to the Transaction shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to principles of conflicts oflaw. Each party hereto consents specifically to the exclusive jurisdiction of the federal courts of the United States sitting in the Southern District of New York, or if such federal court declines to exercise jurisdiction over any action filed pursuant to this Agreement, the courts of the State of New York sitting in the County of New York, and any court to which an appeal may be taken in connection with any action filed pursuant to this Agreement, for the purposes of all legal proceedings arising out of or relating to this Agreement. In connection with the foregoing consent, each party irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the court's exercise of personal jurisdiction over each party to this Agreement or the laying of venue of any such proceeding brought in such a court has been brought in an inconvenient forum. Each party further irrevocably waives its right to a trial by jury and consents that service of process may be effected in any manner permitted under the laws of the State of New York. 8. Severability. In the event any of the terms or provisions of this Agreement shall be held to be unenforceable, the remaining terms and provisions shall be unimpaired and the unenforceable term or provision shall be replaced by such enforceable term or provision as comes closest to the intention underlying the unenforceable term or provIsIon. -3- 9. Third Party Beneficiaries; Successors and Assigns. The Buyer understands that each affiliate of the Sellers is an intended third party beneficiary of this Agreement and is entitled to rely hereon. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of each of the Sellers; provided that the right of the Buyer to purchase the Subject 2000 Bonds hereunder may not be assigned to any third party. 10. Counterparts. This Agreement may be executed in counterparts, which shall together form one and the same instrument. 11. Personal Liability. Certain of the Sellers are Massachusetts business trusts or portfolios specifically allocated to a series of shares of a registered investment company (a "series company") as contemplated by Rule 18F-2(a) promulgated under the Investment Company Act of 1940, as amended. Copies of the Declarations of Trust of such parties, or copies of the Articles of Incorporation of such parties' series companies are on file with the Secretary of State of The Commonwealth of Massachusetts. This Agreement is executed on behalf of the trustees of the Sellers, and the obligations of this Agreement are not binding upon any of the Sellers' respective trustees, officers, or shareholders but are binding only upon the respective assets and property of the Sellers. The Buyer agrees that the liability of the Sellers under this Agreement shall be limited to the assets specifically allocated to the Sellers under their charter documents and not to any assets specifically allocated to another series of shares of their series companies or to any other assets of their series companies. 12. Nature of Obligation. The obligations of the Sellers under this Agreement are several and not joint and several. -4- IN WITNESS WHEREOF, the Sellers and the Buyer have caused this Agreement to be executed in their respective names as of the date first above written. PUTNAM HIGH YIELD MUNICIPAL TRUST By. ~~ Name: ~ OfWr-") Title: fv(J PUTNAM MUNICIPAL OPPORTUNITIES TRUST f .J( By: Name: PM $ Title: Nf PUTNAM TAX FREE HIGH YIELD FUND By: fJ ~ Name: p~... (L- O/t.Jlf.rJ Title: Sv~ PUTNAM INVESTMENT GRADE MUNICIP AL INCOME TRUST By: Name ;:_ ~ Title: ~(I -5- PUTNAM MANAGED MUNICIPAL INCOME TRUST By: rJ JL Name: (/tv\.. .t--O~ Title: fv(? c/o Putnam Investment Management, Inc. One Post Office Square Boston, Massachusetts 02109 Attn: Stephen P. O'Connell Senior Vice President Tel: (617) 760-1419 Fax: (617) 760-8728 Email: Stephen_O.Connell@putnam.com CITY OF GILROY, CALIFORNIA By: Name: Anna Jatczak Title: Interim City Administrator 7351 Rosanna Street Gilroy, California 95020-6197 Tel: (408) 846-0212 Fax: (408) 846-0500 Email: anna.iatczak@ci.gilrov.ca.us -6-