Loading...
HomeMy WebLinkAboutCAG2001-0981 - Original - Banc of America Securities LLC - LID No. 351 - 04/17/2001Bank ofAmerica . ,,,,,� Banc of America Securities LLC 10101� Dave Trageser Vice President NW Public Finance April 17, 2001 Honorable Mayor and City of Kent Council Members City of Kent 220 Fourth Avenue South Kent, Washington 98032-5895 RE: City of Kent, Washington $5,367,216.50 Local Improvement District No. 351 Bonds Honorable Mayor and City Council Members: Banc of America Securities LLC (the "Underwriter") offers to purchase from the City of Kent, Washington (the "Issuer") all of the above-described Bonds (the "Bonds") on the terms and based upon the covenants, representations and warranties set forth below and in Appendix A, which is incorporated into this agreement (the "Purchase Agreement") by reference, and contains a brief description of the Bonds, including principal amounts, maturity, interest rates, purchase price, and the proposed date and place of delivery and payment (the "Closing"). Other provisions of this Purchase Agreement are as follows: 1. Prior to the Closing, Issuer will approve a Preliminary Official Statement (hereinafter defined) and will pass an ordinance authorizing the Bonds (the "Ordinance"), with such changes as are requested by the Issuer, Underwriter and Bond Counsel. The Underwriter is authorized by Issuer to use these documents and the information contained in them in connection with the public offering of the Bonds and the final Official Statement in connection with the sale and delivery of the Bonds. 2. Issuer, to the best of its knowledge, represents and covenants to the Underwriter that: (a) It has, and will have at the Closing, the power and authority to enter into and perform the Purchase Agreement, to pass the Ordinance and to deliver and sell the Bonds to the Underwriter; (b) This Purchase Agreement and the Bonds do not and will not conflict with, or constitute or create a breach or default under, any existing law, regulation, order or agreement to which Issuer is subject; (c) Other than the Ordinance, no governmental approval or authorization is required in connection with the sale of the Bonds to the Underwriter; (d) The Preliminary Official Statement, defined hereinafter, with corrections, if any, noted by the Issuer and its counsel, as of its date and (except as to matters corrected or added in the final Official Statement) as of the Closing, is accurate and complete in all Honorable Mayor and City Council Members City of Kent April 17, 2001 Page 2 material respects as of its date to the knowledge and belief of the officers and employees of the Issuer, after due review; (e) The Issuer hereby ratifies, approves and confirms the distribution of the Preliminary Official Statement with respect to the Bonds, dated March 27, 2001 (together with the Appendices thereto, any documents incorporated therein by reference, and any supplements or amendments thereto, the "Preliminary Official Statement'), in connection with the public offering and sale of the Bonds by the Underwriter prior to the availability of the Official Statement and deems such Preliminary Official Statement final as of its date for purposes of SEC Rule 15c2 -12(b)(1); (f) The Issuer agrees to cooperate with the Underwriter to permit the Underwriter to deliver or cause to be delivered, within seven business days after this Purchase Agreement and in sufficient time to accompany any confirmation that requests payment from any customer of the Underwriter, copies of a final Official Statement in sufficient quantity to comply with paragraph (b)(4) of the Securities and Exchange Commission Rule 15c2-12 and the rules of the Municipal Securities Rulemaking Board ("MSRB"); (g) The Issuer will have made an undertaking to provide continuing disclosure to meet the conditions of paragraph (d)(2) of the United States Securities and Exchange Commission ("SEC") Rule 15c2-12 (the "Rule") as required under paragraph (b)(5) of the Rule as provided in the Ordinance. 3. The Underwriter agrees to deliver three copies of the final Official Statement to each of the nationally recognized municipal securities information repositories on the business day on which the final Official Statement is available, and in any event no later than seven business days after the date thereof. 4. The Underwriter shall have the right to cancel this Purchase Agreement by notifying the Issuer of its election to do so if, after the execution of this Purchase Agreement and prior to the Closing: (a) A decision by a court of the United States or the United States Tax Court shall be rendered, or a ruling or a regulation (final, temporary, or proposed) by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency shall be issued and in the case of any such regulation, published in the Federal Register, or legislation shall have been introduced in, enacted by or favorably reported to either the House of Representatives or the Senate of the United States with respect to federal taxation upon interest received on bonds of the type and character of any of the Bonds which, in the reasonable judgment of the Underwriter, materially adversely affects the marketability of the Bonds or their sale by the Underwriter, at the contemplated public offering prices; or (b) The United States shall have become engaged in hostilities which have resulted in declaration of war or national emergency, or other national or international calamity or other event shall have occurred or accelerated to such an extent as, in the reasonable Honorable Mayor and City Council Members City of Kent April 17, 2001 Page 3 opinion of the Underwriter, to have a materially adverse affect on the marketability of the Bonds; or (c) There shall have occurred a general suspension of trading on the New York Stock Exchange; or (d) A general banking moratorium shall have been declared by United States, New York State or Washington State authorities; or legislation shall hereafter be enacted, or actively considered for enactment, with an effective date prior to the date of the delivery of the Bonds, or a decision by a court of the United States shall hereafter be rendered, or a ruling or regulation by the Securities and Exchange Commission or other governmental agency having jurisdiction on the subject matter shall hereafter be made, the effect of which is that: (i) The Bonds are not exempt from the registration, qualification or other requirements of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and then in effect, or (ii) The Ordinance is not exempt from the registration, qualification or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect; or (e) A stop order, ruling or regulation by the Securities and Exchange Commission shall hereafter be issued or made, the effect of which is that the issuance, offering or sale of the Bonds, as contemplated herein or in the final Official Statement, is in violation of any provision of the Securities Act of 1933, as amended and as then in effect, and which, in its reasonable judgment, adversely affects the marketability of the Bonds or the market price thereof. 5. The Underwriter's obligations hereunder are also subject to the following conditions: (a) At or prior to the Closing, Issuer will deliver, make available to the Underwriter, or have adopted: (i) The Bonds, fully registered form; (ii) A certificate from an authorized officer of Issuer, in form and substance acceptable to the Issuer and the Underwriter, stating that execution of the Certificate shall constitute execution of the final Official Statement by the Issuer, that the final Official Statement, to the knowledge and belief of such officer, after due review, as of its date, did not, and as of the date of Closing does not contain any untrue statement of a material fact or omit any statement or information which is necessary to make the statements therein, in the light of the circumstances under which made, not misleading, that there has not been any material adverse change in the normal operations or financial condition, nor to the best of the City's knowledge, to LID No. 351 and the general economy of the City except as described in the final Official Statement, and that the representations and warranties of the Issuer contained in this Purchase Agreement were true and correct when made and are true and correct as of the Closing; Honorable Mayor and City Council Members City of Kent April 17, 2001 Page 4 (iii) The approving opinion of Bond Counsel dated the day of Closing in the form attached to the Official Statement; (iv) The Underwriters obligations are subject to the assignment of an underlying rating of "A1" by Moody's Investor Service. (v) The following documents executed by authorized officers of the Issuer: (i) A certificate, dated the day of the Closing to the effect that no litigation or other proceedings are pending or threatened in any way affecting the issuance, sale or delivery of, or security for, any of the Bonds, (z) A certificate setting forth the facts, estimates and circumstances in existence on the date of Closing which establish that it is not expected that the proceeds of the Bonds will be used in a manner that could cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code and any applicable regulations thereunder, (s) Such additional certificates, instruments or opinions or other evidence as the Underwriter may deem reasonably necessary or desirable to evidence the due authorization, execution, authentication and delivery of the Bonds, the truth and accuracy as of the time of the Closing of the Issuer's representations and warranties, and the conformity of the Bonds and the Ordinance with the terms thereof as summarized in the Official Statement, and to cover such other matters as it reasonably requests, and (4) A certified copy of the Ordinance. 6. Issuer will pay the cost of preparing, printing and executing the Bonds, if any, the fees and disbursements of Bond Counsel, bond registration, rating fees (if any) and expenses, travel and lodging expenses of Issuer's employees, and other expenses of Issuer. The Underwriter will pay fees and disbursements of Underwriter's travel expenses, and other expenses of the Underwriter. The Underwriter will be reimbursed for the costs of preparation, printing, and distribution of The Preliminary and Final Official Statements. Honorable Mayor and City Council Members City of Kent April 17, 2001 Page 5 7. This Purchase Agreement is intended to benefit only the parties hereto, and Issuer's representations and warranties shall survive any investigation made by or for the Underwriter, delivery and payment for the Bonds, and the termination of this Purchase Agreement. Should the Issuer fail to satisfy any of the foregoing conditions or covenants, or if the Underwriter's obligations are terminated for any reasons permitted under this Purchase Agreement, then neither the Underwriter nor the Issuer shall have any further obligations under this Purchase Agreement, except that any expenses incurred shall be borne in accordance with Section 6. 8. This offer expires on the date, and at the time, set forth on Appendix A. Respectfully submitted, Banc of America Securities LLC `�- By: Dave Trageser Vice President Accepted April 17, 2001 CITY O ENT, WASHI T N By: Its: Wk U wI & iL Banc of America Securities LLC APPENDIX A DESCRIPTION OF BONDS (a) Purchase Price: $5,313,454.50 ($98.9983262 per $100) plus accrued interest from the dated date to date of Closing. Purchase price includes $9.70 per $000 of underwriting spread and $1,700.00 Preliminary and Final Official Statement printing and mailing reimbursement. (b) Par: $5,367,216.50 (c) Dated Date: April 15, 2001. (c) Denominations: $5,000 each. (d) Form: Fully -Registered (e) Interest Payment Dates: November 1, commencing November 1, 2001. (17 Maturity Schedule: Due: November 1, 2017 ESTIMATED REDEMPTION SCHEDULE OF BONDS Estimated Estimated Redemption Principal Bond Redemption Principal Bond November 1 Amount Numbers Rate Price November 1 Amount Numbers Rate Price 2001 $ 357,216 50 1-71 3.75% 100 2009 $ 360,000.00 576-647 5.00% 100 2002 360,000.00 72-143 3.85 100 2010 360,000.00 648-719 510 100 2003 360,000 00 144-215 405 100 2011 360,000.00 720-791 5.15 100 2004 360,000 00 216-287 420 100 2012 360,000.00 792-863 525 100 2005 360,000 00 288-359 4.40 100 2013 350,000.00 864-933 530 100 2006 360,000.00 360431 460 100 2014 350,000 00 934-1,003 540 100 2007 360,000.00 432-503 4.70 100 2015 350,000 00 1,004-1,073 550 100 2008 360,000 00 504-575 485 100 (g) Optional Redemption: The amount of Bonds to be retired each year is only an estimate. Bonds may be called earlier (but subject to the redemption provisions below) or later than the years shown above depending on the receipt of such payments. The City reserves the right to redeem the Bonds prior to their stated maturity on any interest payment date, in numerical order, lowest numbers first, at par plus accrued interest to the date fixed for redemption, whenever there shall be sufficient money in the Bond Fund to pay the Bonds so called and all earlier numbered Bonds over and above the amount required for the payment of the interest payable on that interest payment date on all unpaid Bonds. PROVIDED, HOWEVER, that the principal amount of Bonds called for prior redemption shall not exceed the following maximum annual retirement schedule. Maximum Principal Bond Nos. (Inclusive) Retirement Schedule and Permitted Call Dates $ 717,216 50 1-143 On any interest payment date 2,157,216 50 1-431 On November 1, 2002, and any interest payment date thereafter 3,237,216 50 1-647 On November 1, 2004, and any interest payment date thereafter 4,667,216 50 1-933 On November 1, 2006, and any interest payment date thereafter 5,367,216 50 1 - 1,073 On November 1, 2008, and any interest payment date thereafter (h) Closing Date: April 30, 2001. (i) Offer Expires: 11:59 p.m. April 17, 2001. 0) Bond Counsel: Foster Pepper & Shefelman PLLC For Information Purposes Only: Average Coupon 5.050653% True Interest Cost (TIC) 5 131255% Total Underwriter's Discount $ 53,762