HomeMy WebLinkAboutSmith Barney, Harris Upham & Co; 1988-07-27;VITE IT - DON’T §AY Q!
Date 7/27
To Jim Elliott, Finance Director 0 Reply Wanted
From Karen Kundtz, Deputy City Clerk UNO Reply Necessary
Re:
Attached is one of the original agreements with Smith Barney which you provide(
for signature.
returned to you per your request.
Bond Purchase Contract - Palomar Airport Rd. Assessment District 86-1
We have kept one original for our files. The second is
Karen
PI AIGNER FORM NO. 55032
. 0 0
BOND PURCHASE CONTRACT
The Honorable Members of the City Council
of the City of Carlsbad 1200 Elm Avenue Carlsbad, CA 92008
Re: Offer to Purchase Limited Obligation Improvement Bond City of Carlsbad
Assessment District No. 86-1 (Palomar Airport Road)
Members of the Council:
Pursuant to discussions with City staff and the City's financi
advisor and bond counsel, and our investigation and analysis o the captioned bond issue, Smith Barney, Harris Upham st Co., In
(the Underwriter) hereby offers to purchase all of said Bonds subject to the following conditions:
1. The Bonds shall be issued pursuant to the Municipal Improvement Act of 1913 and the Improvement Bond Act of
1915 (the "Bond Law").
2. The Bonds shall be in the aggregate principal amount of
3. The Bonds shall be issued in denominations of $5,000, or integral multiples thereof as may be requested by the Underwriter, except one bond in an amount to be determin
4. All Bonds shall be issued in registered form in accordan with instructions to be determined by the Underwriter pr
to the Closing Date.
otherwise approved by us, shall be delivered on or about
1O:OO a.m. California time on or about August 18, 1988 a in no event later than 1O:OO a.m. California time
August 31, 1988 (The delivery date is herein referred to "Closing Date," and the time of delivery is herein refer to as the I1Closing."). The Bonds shall be made availabl to the Underwriter not later than one (1) business day
before the Closing Date for purposes of inspection and packaging.
$4,720,471.00.*
5. The Bonds shall be dated August 17, 1988 and, unless
* Preliminary, subject to change.
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6. The Bonds shall mature in each of the years and in the amounts and at the rates of interest set forth on the attached maturity schedule marked Exhibit A.
The City shall establish from the proceeds of the Bonds ( reserve fund equal to 10% of the principal amount of the Bonds. The reserve fund shall be administered pursuant .
the Bond Indenture for the Bonds (the 'tIndenture"), as wc
as pursuant to applicable federal laws and regulations. The reserve fund balance shall be shown as a separately- stated item in the City's annual financial report.
8. The City shall covenant to commence judicial foreclosure
delinquent assessments within 150 days after any delinquency.
9. The City shall covenant in the Indenture that in the eve any court of competent jurisdiction shall declare the assessment or lien against any parcel or properties with the Assessment District invalid, the City shall undertak every reasonable action within the law to reassess such parcels and perfect a valid lien against them.
meeting on July 19, 1988.
1.7%), plus accrued interest, if applicable.
7.
10. The City shall award the sale of the Bonds to us at thei
11. The purchase price shall be 98.3% of par (a discount of
12. The City will deliver or cause to be delivered to the
Underwriter copies of its Official Statement with respec
to the Bonds, substantially in the form of the Prelimina Official Statement currently on file with the Underwrite
with only such changes therein as have been accepted by
Underwriter and signed on behalf of the City by the City
Manager or other authorized officer of the City. The Ci
hereby ratifies, confirms and approves the use of distribution by the Underwriter prior to the date hereof the Preliminary Official Statement, and hereby authorize the Underwriter to use and distribute the Official
Statement in connection with the offer and sale of the Bonds.
13. The purchase price of the Bonds shall be paid in cash,
Federal Reserve Bank funds, or other funds immediately available to the City made payable to the City upon
delivery to the Underwriter of the Bonds accompanied by:
(a) The unqualified approving legal opinion of Brown an Diven, Rancho Santa Fe, California, Bond Counsel, i substantially the form attached hereto as Exhibit B The legal opinion shall be printed on the Bonds at charge to us.
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(b) The supplemental opinion of Bond Counsel in form anc substance satisfactory to the Underwriter, dated as the Closing Date and addressed to the City and the Underwriter, to the effect that:
(1) Based upon their participation as Bond Counse the information in the Official Statement on. cover page relating to tax exemption,
description of the Bonds and security for the
Bonds and statements under the captions
IIPreliminary Statement!! , "The Bonds",
l!Bondowners I Risks" , "Legal Opinion" and "Tax
Exemption" are, to the extent they relate to
Bonds, the Indenture, the Bond Law and the Internal Revenue Code of 1986, as amended, an the transactions contemplated by the Official Statement, true and correct in all material
respects and do not omit to state a material
fact necessary to make the statements contain therein not misleading (except such counsel n express no view as to financial statements an the statistical data contained in the Officia Statement).
(2) The Indenture and all other resolutions relat to the proceedings for Assessment District No
86-1 have been duly adopted by the City and t Bond Purchase Contract has been duly authoriz executed and delivered by the respective part
thereto.
(3) The Bonds are exempt from registration pursua to the Securities Act of 1933, as amended, an
the Resolution is exempt from qualification a
an indenture pursuant to the Trust Indenture
of 1939, as amended.
(c) The opinion of the City Attorney, dated as of the Closing Date, in form and substance satisfactory to
the Underwriter and addressed to the Underwriter, t the effect that:
(1) The City is a municipal corporation duly organized and validly existing under the laws the State of California.
(2) The statements in the Official Statement unde the captions "The Bonds", "The Improvement Project" , "The District" and "NO Litigation" true and correct in all material respects.
(3) Nothing has come to such counsel's attention that would lead such counsel to believe that Official Statement, as of the Closing Date,
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contains an untrue statement of a material fa or omits to state a material fact required to stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not
misleading (except such counsel need express view as to financial statements and the
statistical data contained in the Official Statement).
(4) The Indenture and other resolutions of the Ci
relating to Assessment District No. 86-1 and
issuance of the Bonds were duly adopted at meetings of the City Council which were calle and held pursuant to law and with all public notice required by law and at which a quorum present and acting throughout; such resolutio are in full force and effect and have not bee amended, modified or rescinded since the respective dates of their adoption.
(5) After reasonable investigation, there is no
action, suit, proceeding, inquiry or investigation at law or in equity before or b any court, regulatory agency, public board or body, pending or, to the best of such counsel
knowledge, threatened against or affecting th existence of the City or the titles of its
officers to their respective offices or seeki to restrain or to enjoin the sale or delivery the Bonds, the application of the proceeds
thereof in accordance with the Indenture or t
collection or application of any assessment installments or interest thereon provided for the payment of the Bonds, or in any way
contesting or affecting the validity or enforceability of the Bonds, the Indenture or any action of the City contemplated by any of said documents.
(d) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter may reasonably request to evidence compliance by the City with legal requirements, the truth and accuracy, as of the Closing Date, of the
representations of the City contained herein, and t due performance or satisfaction by the City at or prior to such time of all agreements then to be performed and all conditions then to be satisfied k
the City.
14. The obligation of the Underwriter to accept delivery of
pay for the Bonds on the Closing Date shall be subject, the option of Underwriter, to the following additional conditions:
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(a) At the Closing Date, the Indenture and any other applicable agreements shall be in full force and effect, and shall not have been amended, modified 0:
supplemented except as may have been agreed in writ.
by Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bond: and with the transactions contemplated thereby and 1 this Bond Purchase contract, all such actions as, ii the opinion of Bond Counsel for the City, shall be
necessary and appropriate.
market price or marketability of the Bonds shall no.
have been materially adversely affected, in the judgment of Underwriter (evidenced by a written not to the City terminating the obligation of Underwrit1
to accept delivery of and pay for the Bonds) by rea of any of the following:
(1) Legislation enacted (or resolution passed) by
the Congress of the United States of America c a decision rendered by a court established unc Article I11 of the Constitution of the United
States of America, or an order, ruling, regulation (final, temporary or proposed), prl release or other form of notice issued or mad! by or on behalf of the Treasury Department of the Internal Revenue Service of the United
States of America, with the purpose or effect
directly or indirectly, of imposing federal
income taxation upon the interest as would be received by the owners of the Bonds or the owners of municipal obligations similar to th Bonds.
(b) Between the date hereof and the Closing Date, the
(2) Legislation enacted (or resolution passed) by the Congress of the United States of America, an order, decree or injunction issued by any
court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form or not issued or made by or on behalf of the Securit and Exchange Commission or any other
governmental agency having obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under or 0th
requirements of the Securities Act of 1933, a amended, or that the Resolution is not exempt from qualification under or other requirement
of the Trust Indenture Act of 1939, as amende or that the issuance, offering or sale of obligations of the general character of the
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Bonds, or of the Bonds, including any or all underwriting arrangements, as contemplated hereby or by the Official Statement or otherw is or would be in violation of the federal securities laws as amended and then in effect
The withdrawal or downgrading of any rating o any securities of the City by a national municipal bond rating agency.
constitution or action by any Federal or California court, legislative body, regulator body or other authority materially adversely affecting the tax status of the City, its property, income, securities (or interest
thereon), the validity or enforceability of t assessments or the ability of the City to construct the improvements as contemplated by the Resolution and the Official Statement.
(3)
(4) Any amendment to the Federal or California
(5) Any event occurring, or information becoming known which, in the judgment of Underwriter
makes untrue or misleading in any material respect any statement or information containe in the Official Statement concerning the Bond
the City, the Assessment District, the Projec the landowners, developers, or the properties assessed.
(6) The declaration of a general banking moratori
by Federal, New York or California authoritie
or the general suspension of trading on any
national securities exchange;
(7) The imposition by the New York Stock Exchange other national securities exchange, or any
governmental authority, of any material
restrictions not now in force with respect to
the Bonds or obligations of the general character of the Bonds or securities general1 or the material increase of any such restrictions now in force, including those
relating to the extension of credit by, or th charge to the net capital requirements of,
underwriters.
(8) An order, decree, or injunction of any court competent jurisdiction, or order, ruling, regulation or official statement by the
Securities and Exchange Commission, or any ot
governmental agency having jurisdiction of tk subject matter, issued or made to the effect
that the issuance, offering or sale of
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obligations of the general character of the
Bonds, or the issuance, offering or sale of t Bonds, including any or all underlying obligations, as contemplated hereby or by the Official Statement, is or would be in violati
of the Federal Securities laws as amended and then in effect.
15. The Underwriter has delivered to the City a good faith
$25,000.00. In the event the offer made hereby is not accepted, such check shall be immediately returned to th
Underwriter. If the offer made hereby is accepted, the
City agrees to hold the check uncashed until the Closing security for the performance by the Underwriter of its
obligation to accept and pay for the Bonds at the Closin
and, in the event of its compliance with such obligation such check shall be returned uncashed to the Underwriter the Closing. In the event of the failure by the City to
deliver the bonds at the Closing, or the failure by the
City to satisfy the conditions of the obligations of the Underwriter contained herein, or if the obligations of t Underwriter shall be terminated for any reason permitted
this Bond Purchase Contract, such check shall be immediately returned to the Underwriter and such return
shall constitute a full release and discharge of all cla by the Underwriter arising out of the transactions
contemplated hereby. In the event that the Underwriter fails (other than for a reason permitted hereunder) to accept and pay for the Bonds at the Closing, such check
shall be retained by the City (as and for full) liquidat
damages for such failure and for any defaults hereunder the part of the Underwriter and such retention shall constitute a full release and discharge of all claims by
the City against the Underwriter arising out of the
transactions contemplated hereby.
16. This offer is conditioned upon the successful consummati of the assessment district proceedings and the performan of the conditions specified herein and should said proceedings or conditions for any reason fail to be
successfully consummated, there shall be no obligation o the part of the City or the Underwriter hereunder.
17. Expenses and costs of the City incident to the performan of its obligations in connection with the authorization, issuance and sale of the Bonds to the Underwriter, including fees and expenses of consultants, fees and
expenses of the City's financial advisor (if any) and fe and expenses of bond counsel, counsel to the Underwriter and counsel for the City, shall be paid by the City.
18. Notices. Any notice or other communication to be given the City under this Bond Purchase Contract may be given
. check in the form of a bank check in the amount of
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delivering the same in writing at the City's address set
forth above and any such notice or other communications
be given to the Underwriter may be given by delivering t same in writing to Smith Barney, Harris Upham & Co., Inc
401 B Street, Suite 2300, San Diego, California 92101, Attention: Public Finance Department.
This Bond Purchase Contract is made solely for the benef
of the City, the Underwriter and any persons controlling the Underwriter and no other persons, partnership, association or corporation shall acquire or have any rig hereunder or by virtue hereof. This Bond Purchase Contr shall be governed by the laws of the State of California
20. Counterparts. This Bond Purchase Contract may be signed two or more counterparts; all such counterparts, when signed by all parties, shall constitute but one single
agreement.
Respectfully submitted,
SMITH BARNEY
19.
Agreed To And Accepted:
LLf2diL a- ALETHA RAUTENKRANZ, CITY CkRK
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@ %, 720,471 m
Palmar Airport Road, Asseasment bietrict Udwr 86-1
Rcviacd bate$ and betivery Detes
DEBT SERVICE SCHEDULE
========t==f=="'C'=~
l===f=-att-t==='=CfCa
DATE PRINCfPAL COUPON IUTEREST PERIOD TOTAL FISCAL TOTAL
I....... .....*........ ....*....-- -------------- -------------- ------------.-
5i 2/09 185,186.17 185,186.17
9/ 2/89 190,471.00 5.500000 170,941.08 361,412.08 546,598.24 31 2/90 165, IUJ. 13 165,703.13
9/ 2/90 205,000.00 6.000000 165,703.13 370,703.13 536,406-25 31 2/91 159,555.15 lW,S53.13
9/ 2/91 215,000.00 6.100000 159,553.13 374,553.13 534,106.25 3/ 2/92 152,888.13 15'C,UBX.15
9/ 2/02 230,000.00 6.4OpOOQ 152,888.13 382,888.13 535.776.25 3/ 2/93 145,528.13 145,528.13
9/ 2/93 2L5.000.00 6.600000 145,528.13 390,528.13 536,056.25 cc
3/ 2/91 137, d43.13 137,W13.13
91 2/94 260,600.00 6.800000 137,443.13 397,643.13 53f1.886.25 3/ 2/95 128, 603. IJ iza, 693.13
91 2/93 2a0,000.00 7.oooooo 128,603.13 40a,603.13 537,206.25 3/ 2/96 iia,a03.13 118,803.13
9/ 2/96 295,000.00 7.125000 118,803.13 413,803.13 532,606.25 3/ 2/97 108,293.75 108.293.75
9/ 2/97 320,000.00 7.250000 108,293.75 428,293.75 536,587.50
3/ 2/98 ' 96,693.75 96,693.75
9f 2/90 340,000.00 7.375000 96,693.75 436,693.75 533 , 387.50
31 2/99 84,156.ZS 84,156.25
9/ 2/99 365,000.00 7.625000 81,156.25 449,156.25 533,312.50 31 a/ 0 70 , 240.63 70,240.63
9/ 2/ 0 39~,000.00 7.750000 70,2/10.63 465,240.43 535,L81.25 31 2/ 1 54,934.38 54,934.38
3/ .?I 2 JB, 200.00 38,200.00
3/ 2/ 3 19,800.00 19,800.00
%9.
9/ 2/ 1 425,000.00 7.875000 5'1,934.38 479,934.3a 53/l,e60. 75
P/ 2/ 2 460,000.00 8.000000 3t1,200.00 r,9~,200.00 536,~oo .oa
9/ 2/ 3 495,000.00 8.000000 19,800.0o 5 14 , 800.00 531, boa. 00 -------------- ________-____- _-_____-_____-
C,72O12~1.O0 3,317,808.49 8,038,270.4
ACCRUED 949.67 949.67
4,120,4/1.0U 3,516,X58.XZ X,UjI,ILY.8L . .. c------cI---.." _____+_____--_ --------------
DATED 8/17/88 WlTH DELIVERY OF 8/18/88
BOND YEARS 43,892.157 AVERAGE COUPON 7.559
AVERAGE LIFE 9.298
WIC % 7.559001 % USING fb6.000600b
SMITH BARWEY - PUBLIC FINANCE DIVIEIQM, SAW FRANCISCO, CALIFORUIA OLIO4
RUMDATE: 07-18-1988 a 10:13:35 FILENAME: PARI KEY: 88
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EXHIBIT A
$4,720,471 Aggregate Principal Amount
CITY OF CARLSBAD IMPROVEMENT BONDS
Assessment District No. 86-1 (Palomar Airport Road)
Maturity Date Principal Intc
Amount , Ra-
9/2/89 $190,471.00 5.!
9/2/90 205,000.00 6.(
9/2/91 215,000.00 6.2
9/2/92 230,000.00 6.1
9/2/93 245,000.00 6.6
9/2/94 260,000.00 6.E
9/2/95 280,000.00 7.c
9/2/97 320,000.00 7.;
9/2/98 340,000.00 7.:
9/2/99 365,000.00 7.t
9/2/00 395,000.00 7.;
9/2/01 425,000.00 7.t
9/2/96 ^_I 295,000.00 7.1
9/2/02 460,000.00 8.0
9/2/03 495,000.00 8.C
The following notation is for information purposes only apd is
not a part of this bid.
The net interest cost of the Bonds based on the above maturity
schedule and a discount of 1.7 % is %. The average
coupon rate is 7.559 %.
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