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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