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HomeMy WebLinkAboutFI05-380 - Original - Banc of America Securities LLC - Parks LTGO Bonds - 12/13/2005 Banc of America Securities David Trageser Vice President Pacific Public Finance Honorable City Councilmembers December 13, 2005 City of Kent, Washington 220 Fourth Avenue South Kent, WA 98032-5895 RE: City of Kent, Washington LTGO Bonds, 2006 Honorable City Councilmembers: Banc of America Securities LLC (the "Underwriter") offers to purchase from the City of Kent, Washington (the "Issuer" or the "City") all of the LTGO Bonds, 2006 (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, maturities, interest rates, purchase price, redemption provisions, 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, the Issuer will approve an Official Statement (defined hereinafter) and will pass an Ordinance authorizing the issuance and sale of the Bonds (the "Bond Ordinance") with such changes as are requested by the Issuer and Underwriter and their respective counsel. The Underwriter is authorized by the Issuer to use these documents and the information contained in them in connection with the public offering of the Bonds and the Official Statement in connection with the sale and delivery of the Bonds. 2. The 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 this Purchase Agreement, to pass the Bond 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 the Issuer is subject; (C) Other than the Bond Ordinance, no governmental approval or authorization is required to be obtained by the City in connection with the sale of the Bonds to the Underwriter; (D) The Issuer has complied with all prior undertakings to provide ongoing disclosure information pursuant to paragraph (b)(5) of the United States Securities and Exchange Commission ("SEC") Rule 15c2-12 (the "Rule") as required under paragraph (b)(5) of the Rule and will have made an undertaking to provide continuing disclosure to meet the conditions of paragraph (b)(5)of the Rule as provided in the Bond Ordinance; Banc of America Securities LLC,member NYSEINASD/SIPC,is a subsidiary of Bank of America Corporation 800 Fifth Avenue Suite 3400 Seattle,WA 98104,Tel 20&358-6922/Fax 206-35&8818,david trages r®bankofamenp mm City of Kent, Washington December 13, 2005 Page 2 (E) The Issuer hereby ratifies and approves the distribution of the Preliminary Official Statement, dated December 5, 2005 (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 of the Bonds by the Underwriter and deems such Preliminary Official Statement final as of its date for purposes of paragraph(b)(1) of the Rule; except for the omission of maturity amounts, interest rates, redemption dates and prices, ratings, terms relating to the Bond Insurance Policy, underwriter's discount and related terms of the Bonds dependent on such matters; (F) The Issuer agrees to deliver or cause to be delivered to the Underwriter within seven business days after the date of 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 (the "Official Statement") in sufficient quantity to permit the Underwriter to comply with the requirements of paragraph (b)(4) of the Rule and the rules of the Municipal Securities Rulemaking Board ("MSRB"); (G) If, between the date of this Purchase Agreement and 25 days after the end of the underwriting period, any event shall occur or any preexisting fact shall become known by the Issuer which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Issuer shall promptly notify the Underwriter, and if, in the reasonable opinion of the Underwriter, such event requires the preparation and distribution of a supplement or amendment to the Official Statement, the Issuer will at its expense supplement or amend the Official Statement in a form and in a manner approved by the Underwriter, which approval shall not be unreasonably withheld. The end of the underwriting period shall be the date of Closing unless the Issuer is informed otherwise in writing by the Underwriter and, in any event, the end of the underwriting period shall be no later than 25 days following the Closing; 3. The Underwriter agrees to deliver the appropriate number of copies of the Official Statement to each of the nationally recognized municipal securities information repositories on the business day on which the Official Statement is available, and in any event no later than seven business days after the date hereof 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 City of Kent, Washington December 13, 2005 Page 3 (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 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 Bond 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 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, the Issuer will deliver, make available to the Underwriter, or have adopted (i) The Bonds, fully registered in book-entry form only in the name of Cede & Co., as bond owner and nominee for The Depository Trust Company("DTC"); (d) A certificate from an authorized officer of the Issuer, in form and substance acceptable to the Issuer and the Underwriter, stating that execution of the Certificate shall constitute execution of the Official Statement by the Issuer, that the Official Statement (except for information concerning the Bond Insurer (hereafter defined), the Underwriter, the Bond Registrar and DTC), 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, and that the representations of the Issuer contained in this Purchase Agreement were true and correct when made and are true and correct as of the Closing; and that there has not been any material adverse change in the normal operations or financial condition of the City since the date of the Preliminary Official Statement; City of Kent, Washington December 13, 2005 Page 4 (iii) The approving opinion of Bond Counsel dated the day of Closing in the form attached to the Official Statement; (iv) The Underwriter's obligations are subject to the issuance of a municipal bond insurance policy on the Bonds by MBIA Insurance Corporation (the `Bond Insurer"); the assignment to the Bonds of a rating of "Aaa/AAA" and underlying ratings of "Al"/"AA-"by Moody's Investors Service and Standard and Poor's; and (v) The following documents executed by authorized officers of the Issuer: (a) 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, except as identified in the Official Statement; (b) 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; (c) Such additional certificates, instruments, or other documents 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 Bond Ordinance with the terms thereof as summarized in the Official Statement, and to cover such other matters as it reasonably requests; and (d) A certified copy of the Bond Ordinance. 6. The Issuer will pay the cost of preparing, printing and executing the Bonds if any, the fees and disbursements of Bond Counsel, bond rating, bond insurance, bond registration, and other expenses of the Issuer. The Underwriter will pay fees and disbursements of the Underwriter's travel expenses, Underwriter's Counsel, preliminary and final official statement preparation and printing fees, and other expenses of the Underwriter. As a convenience to the Issuer, the Underwriter may from time to time make arrangements for certain items for which the Issuer is responsible hereunder. The Underwriter also may advance for the Issuer's account when approved or authorized by the Issuer the cost of the items for which the Issuer is responsible by making payments to third-party vendors. In such cases, the Issuer shall pay such costs or expenses directly, upon submission of appropriate invoices by the Underwriter, or promptly reimburse the Underwriter in the event the Underwriter has advanced such costs or expenses for the Issuer's account. It is understood that the Issuer shall be primarily responsible for payment of all such items and that the Underwriter may agree to advance the cost of such items from time to time solely as an accommodation to the Issuer and on the condition that it shall be reimbursed in full by the Issuer. City of Kent, Washington December 13, 2005 Page 5 7. This Purchase Agreement is intended to benefit only the parties hereto, and the 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 hereof. 8. This offer expires on the date, and at the time, set forth on Appendix A. Respectfully submitted, BANC OF AMERICA SECURITIES LLC by: David Trageser, Vice President Accepted City of K ashington By: Title: C APPENDIX A DESCRIPTION OF TAX-EXEMPT BONDS (a) Purchase Price: $11,845,747 00($98.714558 per$100) (b) Dated: January 4,2006 (c) Par: $12,000,000 (d) Denominations $5,000 or any integral multiple thereof within a single maturity (e) Form: Book Entry only (f) Interest Payment Dates: June 1 and December 1,commencing June 1,2006 (g) Maturity Schedule LTGO Bonds,2006 Maturity Table Due Yield or Due Yield or Dec,1 Amount Rate Price Dec.1 Amount Rate Price 2008 $200,000 4 000% 3 390% 2017 $800,000 4 000% 4 280% 2009 400,000 4 000 3 480 2018 800,000 4 250 4 350 2010 300,000 4 000 3 590 2019 700,000 4 250 4 420 2011 300,000 4 000 3 710 2020 800,000 4 375 4 500 2012 300,000 4 000 3.810 2021 1,100,000 4 250 4 560 2013 300,000 4 000 3 930 2022 1,200,000 4 375 4 600 2014 800,000 4 500 4 040 2023 1,400,000 4 500 4 630 2015 800,000 5.000 4140 2024 1,000,000 4500 4.660 2016 800,000 4 000 4 220 (h) Optional Redemption: The Bonds maturing on and prior to December 1, 2015 are not subject to optional redemption in advance of their scheduled maturity The Bonds maturing on and after December 1, 2016 are subject to redemption at the option of the City at any time on or after December 1,2015 as a whole or in part (within one or more maturities selected by the City and randomly within a maturity in such manner as the Bond Registrar shall determine) at a price of par plus accrued interest to the date of redemption, (i) Closing Date January 4,2006 (j) Offer Expires 1159 p m December 13,2005 (k) Bond Counsel: Foster Pepper&Shefelman PLLC For Information Purposes Only: Gross Interest Cost $6,825,516 67 Plus Original Issue Discount 70,493 00 Plus Underwriter's Discount 83,760 00 Estimated Net Interest Cost($) $6,979,769 67 Estimated Net Interest Cost(%) 4 448547%