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BOND PURCHASE AGREEMENT® BOND PURCHASE AGREEMENT Avon Urban Renewal Authority, Colorado Tax Increment Adjustable Rate Revenue Bonds (Town Center West Area Urban Renewal Project) Series 2008 February 20, 2008 Avon Urban Renewal Authority 400 Benchmark Road Avon, Colorado 816207 Ladies and Gentlemen: Upon the terms and conditions, and on the basis of the representations set forth in this Bond Purchase Agreement (this "Agreement"), in the Official Statement as described herein, and in the term sheet attached hereto as Exhibit A, Stifel, Nicolaus & Company, Incorporated (the "Underwriter") agrees to purchase $25,000,000 aggregate principal amount of the "Avon Urban Renewal Authority, Colorado, Tax Increment Adjustable Rate Revenue Bonds (Town Center West Area Urban Renewal Project), Series 2008" (the "Bonds") issued by the Avon Urban Renewal Authority, Colorado (the "Authority") under and pursuant to an Indenture of ® Trust dated as of February 15, 2008 (the "Indenture") between the Authority and UMB Bank, n.a., as trustee (the "Trustee"). The Bonds and the interest on the Bonds are payable from the Trust Estate, as defined in the Indenture, and such other amounts as described in the Indenture. Payment of the principal of and interest on the Bonds, and the purchase price of Bonds tendered for purchase, will be secured by an irrevocable direct pay letter of credit (the "Initial Letter of Credit") to be delivered to the Trustee by DEPFA BANK plc, acting through its New York Branch (the "Bank") pursuant to a Letter of Credit Reimbursement Agreement dated as of February 15, 2008 (the "Initial Reimbursement Agreement") between the Authority and the Bank. The Underwriter agrees to purchase the Bonds for an aggregate purchase price of $24,850,000 (which amount represents the par amount of the Bonds less an underwriting discount of $150,000). The Authority's obligation to execute and deliver the Bonds shall be conditioned upon the acceptance of and payment for the entire $25,000,000 principal amount of the Bonds by the Underwriter at the Closing (as defined in Section 2 hereof), and the Underwriter's obligation to purchase and accept delivery of the Bonds shall be conditioned upon the tender for sale and delivery of the entire $25,000,000 principal amount of the Bonds. All capitalized terms used but not defined herein shall have the meanings assigned to them in the Indenture. There has been prepared an Official Statement dated February 20, 2008 concerning the Bonds (together with any and all supplements and amendments which may be ® approved by the Authority and the Underwriter, the "Official Statement"), which was final as of ® its date for purposes of allowing the Underwriter to comply with Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"). Prior to the purchase of the Bonds by the Underwriter, the Authority shall authorize and approve the use of, and shall make available, the Official Statement in connection with the offering of the Bonds. The Underwriter shall, within seven business days of this Agreement, be provided with sufficient copies of the Official Statement to allow it to comply with the Rule. Additional copies of the Official Statement may be obtained at the expense of the Underwriter. Section 1. The Authority, by its acceptance of this Agreement, represents to the Underwriter that: (a) the Authority is a public body corporate and politic duly established by the Town of Avon, Colorado (the "Town"), under and pursuant to the laws of the State of Colorado (the "State") and is authorized to transact business and exercise its powers as an urban renewal authority, all under and pursuant to the Colorado Urban Renewal Law, constituting part 1 of article 25 of title 31, Colorado Revised Statutes (the "Act"); (b) the Authority has full legal right, power and authority to consummate all transactions contemplated to be consummated by it under (i) the resolution passed and approved by the Board of Commissioners of the Authority (the "Board") on February 12, ® 2008 (the "Resolution") authorizing the issuance of the Bonds, the execution and delivery of the Indenture and other matters related thereto; (ii) the Bonds, the Indenture, the Initial Reimbursement Agreement, the Remarketing Agreement between the Authority and the Underwriter, as remarketing agent (the "Remarketing Agreement'), the Amended and Restated Cooperation Agreement between the Authority and the Town (the "Cooperation Agreement") and this Agreement (collectively with the Resolution, the "Principal Documents"); and (iii) all certificates and other documents executed and delivered by the Authority in connection with the execution and delivery of the Principal Documents; (c) the Authority has, or prior to the Closing Time (as defined in Section 2 hereof) will have, duly authorized and taken all necessary action to be taken by it for: the execution, delivery, receipt and due performance of the Principal Documents and the carrying out, giving effect to and consummation of the transactions contemplated to be consummated by it under the Principal Documents; (d) there are no legal or governmental actions, suits, proceedings, inquiries or investigations pending or threatened in writing against the Authority in which an unfavorable decision, ruling or finding would adversely affect the validity of or the transactions contemplated by the Principal Documents, the ability of the Authority to assign the Trust Estate to the Trustee pursuant to the Indenture, or the ability of the Authority otherwise to comply with its obligations under the Principal Documents, except as disclosed in the Official Statement; ® (e) no approval, authorization, consent or other order of any public board or body which has not been obtained, other than registration under and compliance with the -2- ® securities laws of the various states as to which no representation is made by the Authority, is legally required for the consummation of the provisions of the Principal Documents by the Authority or any other transaction by the Authority contemplated by the Principal Documents; (f) the execution, delivery and due performance of and compliance with the Principal Documents by the Authority and the consummation of the transactions contemplated by the Principal Documents by the Authority do not conflict with or result in a breach of or default under any existing administrative or court order or decree or the terms, conditions or provisions of any restriction or any agreement or instrument to which the Authority is now a party or by which the Authority is bound, or constitute a default under any of the foregoing in a manner which affects the validity or enforceability of the provisions of the Principal Documents; (g) the Principal Documents shall, at the Closing Time, have been duly authorized, executed, received and delivered by the Authority and, assuming their enforceability against the other parties thereto, as applicable, constitute valid, legal and binding obligations of the Authority, enforceable in accordance with their terms, subject only to bankruptcy, insolvency, moratorium or other laws affecting creditors' rights generally and equitable principles, whether considered at law or in equity; and (h) any certificate signed by any of the Authority's authorized officials or ® officers and delivered to the Underwriter shall be deemed a representation and warranty by the Authority to the Underwriter as of the Closing Time as to the statements made therein. Section 2. At 9:00 a.m., local time, on February 22, 2008 (or such other business day as shall be mutually agreed upon by the Underwriter and the Authority), the Bonds shall be delivered to The Depository Trust Company on behalf of the Underwriter, in form satisfactory to the Underwriter, and the Underwriter will accept delivery and pay the purchase price in immediately available funds to the order of the Trustee. The delivery of and payment for the Bonds is referred to as the "Closing," the date of the Closing is referred to as the "Closing Date" and the time of the Closing is referred to as the "Closing Time." The delivery of the Bonds shall be made as fully registered Bonds (in the denominations the Underwriter shall specify in writing at least 48 hours prior to the Closing Time). The Bonds shall be available for examination at least 24 hours prior to the Closing Time. Section 3. The obligations of the Underwriter under this Agreement shall be subject to the due performance by the Authority, the Town and the Trustee of their respective obligations and agreements to be performed at or prior to the Closing Time, to the execution and delivery of the Bonds by the Authority and to the accuracy of and compliance with the Authority's representations contained in this Agreement as of the date of this Agreement and as of the Closing Time. The Underwriter's obligations under this Agreement also are subject to the Underwriter's receipt of each of the following in form and substance satisfactory to the Underwriter: • -3- (a) A certified copy of the Resolution of the Authority dated as of February 12, 2008 (the "Bond Resolution") approving the issuance of the Bonds; (b) A certified copy of the resolution (the "Replenishment Resolution") adopted by the Town on February 12, 2008, declaring its present intent to make certain annual appropriations to pay the Bonds and reimburse the Bank for draws under the Initial Letter of Credit, and approving the Cooperation Agreement; (c) Executed copies of the Indenture, the Initial Reimbursement Agreement, the Remarketing Agreement, and the Cooperation Agreement; (d) The approving opinion of Sherman & Howard L.L.C., as bond counsel to the Authority ("Bond Counsel"), to the effect that (A) the Bonds are valid and binding, special, limited obligations of the Authority payable solely from the Pledged Revenues and from funds and accounts pledged therefor under the Indenture; (B) the Indenture constitutes a valid and binding obligation of the Authority; (C) the Indenture creates a valid lien on the Pledged Revenues pledged therein for the security of the Bonds on a parity with the Authority's obligations to the Bank under the Reimbursement Agreement; and (D) interest on the Bonds is excluded from gross income for federal income tax purposes, from alternative minimum taxable income (except to the extent required to be included in adjusted current earnings) for federal income tax purposes, and from all taxes by the State; • (e) The letter of Sherman & Howard L.L.C., as special disclosure counsel to the Authority in connection with the Official Statement ("Special Disclosure Counsel"), to the effect that in their assistance in the preparation of the Official Statement nothing has come to their attention which would lead them to believe that the Official Statement (except for any financial statements, demographic, economic, engineering, financial or statistical data, any statements of trends, forecasts, estimates, projections, assumptions or any expressions of opinion, information concerning the Initial Letter of Credit and the Bank, and information concerning The Depository Trust Company and its procedures contained in the Official Statement and its appendices, as to which no view need be expressed) contained any untrue statement of a material fact or omitted any material fact required to be stated therein or necessary to make the statements in the Official Statement, in light of the circumstances under which they were made, not misleading; (f) A certificate signed by the Chairman and Executive Director/Secretary of the Authority to the effect that: (A) the Authority has duly performed all of its obligations to be performed at or prior to the Closing, and each of its representations and warranties in this Agreement are true as of the Closing Date; (B) the Authority has authorized, by all necessary action, the execution, delivery, receipt and due performance of the Principal Documents; (C) to the Authority's knowledge, no litigation is pending or threatened in writing against the Authority to restrain or enjoin or in any way affecting any authority for or the validity of the Principal Documents or the Authority's existence, except as disclosed in the Official Statement; (D) to the Authority's knowledge, the ® execution, delivery, receipt and due performance of the Principal Documents, and the Authority's compliance with the provisions of those documents, will not conflict with or -4- constitute on its part a breach of or default under any existing administrative or court order or decree against the Authority or any agreement, indenture, mortgage, lease or other instrument to which the Authority is subject or by which it is bound; and (E) the information set forth in the Official Statement (other than the information concerning The Depository Trust Company, the Initial Letter of Credit, the Bank and information set forth therein under any caption where a source other than the Authority is indicated, as to which no belief need be expressed) as of its date does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (g) The legal opinion of Sherman & Howard L.L.C. acting as counsel to the Authority, that the Authority is a body corporate and politic, duly organized and existing as an urban renewal authority under the Act; that the execution and delivery of the Principal Documents have been duly authorized by all necessary corporate action of the Authority and the Principal Documents have been duly executed on behalf of the Authority and constitute valid and binding obligations of the Authority; that to its knowledge, the execution and delivery of the Principal Documents, the fulfillment of or compliance with the terms and conditions thereof and the performance of the obligations of the Authority thereunder do not conflict with or result in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the Authority is now a party or by which the Authority is bound, or constitute a default under any of the foregoing and do not conflict with or constitute a violation of any order, rule, ® regulation, decree or ordinance of any court, government or governmental authority having jurisdiction over the Authority or its property and which conflict or violation will have a material adverse effect on the Authority or the Pledged Revenues; that there is no litigation or proceeding pending for which the Authority has been duly served or, to his knowledge, threatened against the Authority affecting the right of the Authority to execute and deliver the Principal Documents or to comply with its obligations thereunder, except as disclosed in the Official Statement; (h) The legal opinion of the Town's Attorney that the Replenishment Resolution and Reimbursement Agreement have been duly adopted and are in full force and effect on the date of Closing; and that the execution and delivery of the Cooperation Agreement has been duly authorized and has been duly executed on behalf of the Town and constitutes a valid and binding obligation of the Town; (i) . A certificate of the Trustee, executed by an authorized officer of the Trustee, to the effect that: (A) the Trustee has duly executed and delivered the Indenture, has duly accepted the duties and obligations imposed upon it pursuant to the Indenture, and has duly authenticated the Bonds pursuant to the Indenture; and (B) to the knowledge of the Trustee, there is no litigation or proceeding pending or threatened against the Trustee or any other person affecting the right of the Trustee to authenticate the Bonds, to execute and deliver any of the Principal Documents to which the Trustee is a party, or the ability of the Trustee otherwise to comply with its obligations under the Principal Documents; -5- ® 0) The opinion of Chapman & Cutler LLP and Irish in-house counsel to the Bank, dated the Closing Date, in a form and substance satisfactory to the Underwriter and Bond Counsel; (k) Evidence that the Bonds have been rated by Moody's Investors Service, Inc.; (1) Evidence that the originally executed Initial Letter of Credit has been delivered to the Trustee; (m) A certificate or certificates from the Bank with respect to such matters as Bond Counsel or the Underwriter may reasonably request, including, without limitation, the accuracy and completeness of the description of the Reimbursement Agreement, the Initial Letter of Credit and the Bank in the Official Statement; and (n) Such additional certificates, opinions, instruments and other documents as the Underwriter or Bond Counsel may reasonably request to evidence performance of or compliance with the transactions and requirements contemplated by this Agreement and by the Official Statement. (o) All proceedings and related matters in connection with the Principal Documents shall have been satisfactory to Bond Counsel, and Bond Counsel shall have been furnished with all papers, certificates and information as it may have reasonably s requested to enable it to pass upon the matters referred to in its opinion. If any condition stated in this Section is not satisfied at or prior to the Closing Time, this Agreement may be terminated by the Underwriter by notifying the Authority in writing, and in that event, neither the Underwriter nor the Authority shall have any further obligation under or by virtue of this Agreement, except for the obligations of the parties to pay expenses as specified in Section 6 hereof. The Underwriter may waive compliance by the Authority with or extend the time for performance of any one or more of the conditions stated in this Section; and, by accepting delivery of the Bonds, shall be deemed to have waived compliance by the Authority with any condition stated in this Section that has not been complied with. Section 4. The Underwriter shall have the right to cancel its obligation to purchase the Bonds (and such cancellation shall not constitute a default) by notifying the Authority in writing of its election to cancel between the date of this Agreement and the Closing Time, if any of the following events occurs prior to the Closing: (a) Except as may be described in the Official Statement, a tentative decision with respect to legislation shall be reached by a committee of the House of Representatives or the Senate of the Congress of the United States, or legislation shall be favorably reported by such a committee or be introduced, by amendment or otherwise, in, or be passed by the House of Representatives or the Senate, or recommended to the Congress of the United States for passage by the President of the United States, or a decision by a court established under Article III of the Constitution of the United States, or the Tax Court of the United States, shall be rendered, or a ruling, regulation or order of -6- ® the Treasury Department of the United States or of the Internal Revenue Service shall be made or proposed having the purpose or effect of imposing federal income taxation, or any other event shall have occurred which results, or if enacted or adopted would result, in the inclusion in gross income or alternative minimum taxable income (other than as part of adjusted current earnings), for federal income tax purposes, of revenues or other income of the general character to be derived by the Authority or any similar body or upon interest received on the Bonds or obligations of the general character of the Bonds, which, in the opinion of the Underwriter, materially adversely affects the market price of the Bonds. (b) Any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by, any governmental body, department or agency of the State, or a decision by any court of competent jurisdiction within the State shall be rendered which, in the opinion of the Underwriter, materially adversely affects the market price of the Bonds. (c) A stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offer or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all the underlying obligations, as contemplated by this Agreement or the Official Statement, is in violation of or would be in violation of any provision of the federal securities laws, the Securities Act of 1933, as amended and as ® then in effect, or the provisions of the Securities Exchange Act of 1934, as amended and as then in effect, or the qualification provisions or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect. (d) Legislation shall be enacted by the Congress of the United States of America, or a decision by a court of the United States of America shall be rendered, to the effect that obligations of the general character of the Bonds, or the Bonds, including all the underlying obligations, are not exempt from registration under or other requirements of the federal securities laws, the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect. (e) Any event shall have occurred or information becomes known which, in the opinion of the Underwriter, makes untrue in any material respect any statement or information contained in the Official Statement or the Official Statement as originally circulated contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (f) Additional material restrictions not in force as of the date of this Agreement shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange. L~ -7- ® (g) The New York Stock Exchange or other national securities exchange, or any governmental authority, shall impose, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or a change to the net capital requirements of, the Underwriter. (h) A general banking moratorium shall have been established by federal, New York or Colorado authorities. (1) A war involving the United States shall have been declared, or any conflict involving the armed forces of the United States shall have escalated, or any other national emergency relating to the effective operations of government or the financial community shall have occurred which, in the opinion of the Underwriter, materially adversely affects the market price of the Bonds. Section 5. The Authority's obligations under this Agreement are subject to the performance by the Underwriter of its obligations and agreements under this Agreement and are also subject to the following conditions: (a) As of the Closing Time, the opinions and other items referred to in Section 3 of this Agreement shall have been executed and delivered. (b) All opinions, certificates and other documents relating to the Authority's participation in the transactions contemplated by this Agreement shall be satisfactory in form and substance to the Authority. The Authority may waive compliance by the Underwriter with or extend the time for performance of any one or more of the conditions stated in this Section; and, by accepting payment for the Bonds, shall be deemed to have waived compliance by the Underwriter with any condition stated in this Section that has not been complied with. Section 6. All expenses incident to the issuance of the Bonds, including, without limitation, the costs of printing of the Bonds, advertising costs, the costs of printing, duplicating and mailing the Official Statement, the fees of consultants and rating agencies, the initial fees of the Trustee in connection with the Bonds, the initial fees of the Bank required to be paid at Closing, the fees and expenses of the Bank's counsel, the fees and expenses of Bond Counsel and Special Disclosure Counsel, and the fees and expenses of counsel for the Town and the Authority, shall be paid from proceeds of the Bonds. All out-of-pocket expenses of the Underwriter, including travel and other expenses, shall be paid by the Underwriter. If the Underwriter terminates this Agreement for a reason other than a reason permitted hereunder, and if at the time of such termination the Authority has satisfied the conditions to the Underwriter's obligations contained herein, the Underwriter agrees to pay all out-of-pocket expenses incurred by the Authority, including reasonable attorney's fees and disbursements, which relate to the financing. Such payment by the Underwriter shall constitute full liquidated damages for such termination and for any and all defaults on the part of the Underwriter and shall constitute a full ® release and discharge of all claims and damages for such termination and for any and all such defaults. -8- ® Section 7. Any notice or other communication to be given to the Authority under this Agreement may be given by mailing or delivering the notice or communication in writing to Avon Urban Renewal Authority, Colorado, 400 Benchmark Road, Avon, Colorado 81620; Attention: Executive Director; any notice or other communication to be given to the Underwriter under this Agreement may be given by mailing or delivering the notice or communication in writing to Stifel, Nicolaus & Company, Incorporated, 1125 Seventeenth Street, Suite 1600, Denver, Colorado 80202. Colorado. Section 8. This Agreement shall be governed by the laws of the State of Section 9. This Agreement may be executed in several counterparts, each of which shall be regarded as an original document and all of which shall constitute one and the same document. Section 10. The Underwriter proposes to offer the Bonds for sale to the public (which may include selected dealers and special purchasers) during the initial offering period. Concessions from the public offering price may be allowed to selected dealers and special purchasers. The Bonds may be offered to the public at other than par value or at prices lower or higher than those set forth on the cover page of the Official Statement. Section 11. No official, officer, agent or employee of the Authority or member of its Board shall be charged personally or in his or her official capacity by the Underwriter with any liability, or held liable to the Underwriter under any term or provision of this Agreement, or because of its execution or attempted execution, or because of any breach, or attempted or alleged breach, of this Agreement. Section 12. This Agreement shall become effective upon the execution of the acceptance by the Authority as specified below and shall be valid and enforceable as of the time of acceptance. Section 13. Time shall be of the essence in this Agreement. Very truly yours, STIFEL, NICOLAUS & COMPANY, INCORPORATED By: Managing Director -9- ® Accepted as of p.m. on February 20, 2008; such execution having been authorized by a resolution of the Board of the Authority passed and adopted on February 12, 2008. AVON URBAN RENEWAL AUTHORITY, COLORADO By: Executive Director/Secretary E -10- ® EXHIBIT A (Attach Term Sheet) 11 E A-1