HomeMy WebLinkAboutCAG2001-0565 - Original - Bank of America - LID 351 Bonds - 04/17/2001 Bank of America
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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"A I"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,
(3) 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 & R
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