18. DA Davidson Engagement Letter - Tax Increment Urban Renewal BondsTune 24, 1996
City Council
City of Kalispell
F.O. Box 1997
Kalispell, MT 59901
Re: City of Kalispell, Montana
Tax Increment Urban Renewal Bonds
Honorable Mayor and Council Members:
DLA. Davy & Ca
Member SIPC a DADCO company
Fixed -Income Department
Davidson Building
8 Third St. No.
P.O. Box 5015
Great Falls, MT 59403
(406) 727-4200
1-800-332-5915
FAX (406) 791-7315
The City of Kalispell (the "City") is considering the issuance of tax increment urban renewal
bonds (the "Bonds") to finance certain improvements within the district. D.A. Davidson & Co.
has provided services to the City in the capacity of underwriter ("Underwriter") dating back to
1959. You have asked us to provide you with this letter to formalize the aforementioned
arrangement.
Subject to certain conditions contained herein, it is the intention of the City to sell to Davidson,
and Davidson to purchase from the City, the Bond's.
The City's intention to sell the Bonds to Davidson is subject to conditions customary to this type
of transaction including a formal offer from Davidson to purchase the Bonds at a price no less
than 97.5 % of par on or by August 15, 1996 or such later date as is mutually agreed upon by
the parties.
Davidson's intention to purchase the Bonds is subject to conditions customary to this type of
transaction including:
a) the receipt of an unqualified legal opinion of Dorsey & Whitney regarding
conformance with all applicable federal and state requirements and the exemption of
interest from state and federal individual income taxation; and
b) the receipt of an Official Statement which is in compliance with the requirements of
the Securities and Exchange Commission rule 15c2-12, approved by the appropriate
City officials who shall authorize its use by Davidson.
c) An opinion of counsel to the City to the effect that the City has the authority to issue
the Bonds and execute all necessary financing documents.
OFFICES • MONTANA • WASHINGTON • IDAHO • WYOMING • C.z! lPnPN
Page Two
City Council
June 24, 1996
In the capacity of Underwriter we intend to provide the following services:
• Structuring Analytics, including sizing, cash flow analysis, capitalized cost estimates,
maturity schedules and funding sources.
• Investment Earnings Analysis
• Overview of Disclosure Document Preparation and Dissemination
• Review of all resolutions and necessary governmental actions
• Preparation of Financing Time and Responsibility Schedule
• Bond Market Monitoring and Sale Timing
• Administration and Coordination of Closing
r We will do all things reasonable and necessary to successfully complete the sale of the Bonds
within the time constraints of the City. As is customary in these transactions, all costs and
expenses of issuing the Bonds, including all legal fees and expenses, will be payable by the City,
whether or not the Bonds are issued. It is understood and agreed that D.A. Davidson & Co.
will be paid only from the proceeds of the Bonds except its travel expenses which shall not
exceed $2,500.
If the foregoing omits or misstates any item of our engagement or if our estimate raises any
questions, please call. Otherwise we will assume our engagement as Underwriter is acceptable
to you. We look forward to our continued work with you.
Very truly yours,
Kreg A. Jones
Senior Vice President
KAJ: Ida