HomeMy WebLinkAboutResolution No. 2012-083
CITY OF THE COLONY, TEXAS
RESOLUTION NO. 2012- (-,,1 1
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
THE COLONY, TEXAS, AUTHORIZING THE MAYOR TO
EXECUTE AN ENGAGEMENT LETTER WITH PIPER JAFFRAY
& CO. AS UNDERWRITER TO MANAGE THE ISSUANCE AND
SALE OF BONDS TO FINANCE THE NEBRASKA FURNITURE
MART OF TEXAS LOCATED IN THE COLONY, TEXAS;
PROVIDING AN EFFECTIVE DATE
WHEREAS, The Colony City Council desires to enter into an agreement with
Piper Jaffray & Co. for the purpose of managing the issuance and sale of bonds to
finance the Nebraska Furniture Mart project located in The Colony, Texas; and,
WHEREAS, the City Council has determined it to be in the City's best interest to
enter into such an agreement under the terms as stated in the Engagement Letter.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF THE COLONY, TEXAS:
Section 1. That the City Council of the City of The Colony, Texas hereby
authorizes the Mayor to execute an Engagement Letter with Piper Jaffray & Co. for the
purpose of managing the issuance and sale of bonds for the Nebraska Furniture Mart
project, a copy of which is attached as Exhibit A, wider the terms as specified therein.
Section 2. That this resolution shall take effect immediately from and after its
passage.
PASSED AND APPROVED by the City Council of the City of The Colony,
Texas, this 20th day of November, 2012.
J /eMcCourjry Mayor'
~6ity of The Colony, Texas
A TjTES .
~ I ( ( f c
Christie Wilson, TRMC, City Secretary
- APPROVED AS TO FORM:
Jeff Moore, City Attorney
345 California St., Suite 2400, San Francisco, CA
Piperjaffray. 94104
Tel: 415-616-1616 Fax 41516-1620
Piper Jaffray & Co. Since 1895. Member SIPC and NYSE
November 19, 2012
Mr. Troy Powell, City Manager
Tod Maurina, ACM - Operations
City of the Colony
6800 Main Street
The Colony, TX 75056
Re: Engagement of Piper Jaffray & Co. as Underwriter
Dear Mssrs. Powell and Maurina:
Piper Jaffray is pleased to be selected as senior managing underwriter for the Nebraska Furniture Mart of
Texas financing. We are excited to be part of the team for this unique and important financing. The
balance of this letter sets forth some pertinent information about the process of underwriting and will
serve as an agreement regarding the terms of this engagement between The City of the Colony (the
"City") and The Colony Local Development Corporation, The Colony Economic Development
Corporation and The Colony Community Development Corporation (collectively the "Issuers") and Piper
Jaffray & Co. ("Piper" or the "Underwriter") for the proposed issuance of the following Bonds (the "Bonds"
or "Bond Issue"):
Bond/Improvement Type Approximate Amount (1)
Private Improvements - Credit Enhanced $93,000,000
Public Improvements - Unenhanced $80,000,000
(1) Current stmcture as of November 19, 2012.
Although the Underwriter intends to work closely with you during the period preceding the pricing and
sale of the proposed Bond Issue with the aim of timely completion of the financing, we are not herein
making a final commitment to underwrite bonds until certain events have occurred. Such a commitment is
subject to, among other things, satisfactory completion and execution of all final documentation for an
offering (including a Bond Purchase Agreement containing all provisions necessary to satisfy federal
securities laws and the rules of the Municipal Securities Rulemaking Board, and all other applicable rules
and regulations); absence of any material adverse change in the financial markets or in the financial
condition, operations or prospects of the Issuer; receipts of all required governmental approvals and
appropriate legal opinions; an underwriter's review ("due diligence") of the offering documents, as required
under federal securities laws; the negotiation of appropriate indemnification; state blue sky reviews, as
appropriate; and credit approval by the Underwriter. This Agreement is therefore not a final commitment
by the Underwriter, express or implied, to underwrite or purchase any securities, nor does it obligate the
Underwriter to enter into a Bond Purchase Agreement. While we do not anticipate difficulties in the
course of the proposed financing, and look forward to a successful conclusion to this engagement, we
prefer to identify these conditions to our final commitment at the outset.
During the course of the engagement, Piper will:
• participate in discussions with bond counsel, finance officials or internal legal counsel of the Issuer
to assist the Issuer, as part of the underwriting process, respecting various financial structures for
the proposed offering and their probable reception in the municipal bond markets.
• assist in the preparation of presentations and "road shows" and such other marketing materials
that Issuer may find useful in connection with the offering of the Bonds.
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• perform due diligence as required respecting any offering documents as part of their obligation
under federal securities laws.
• If a final commitment to underwrite the Bonds is approved by the Underwriter, and subject to the
conditions described above, the Underwriter will underwrite the Bonds and manage a public
offering of the Bonds. Further details regarding the underwriting will be set forth in a Bond
Purchase Agreement to be executed at the time of pricing of the Bonds. The Issuer and its chosen
counsel agree to cooperate with and assist the Underwriter in connection with such duties.
As compensation for the Underwriter's services, the Issuer will pay the Underwriter a fee to be determined
by the nature of the offering (but not more than the amounts set forth in Schedules A and B hereto). Fees
will be payable to the Underwriter in the form of an underwriter's discount on the Bond Issue as set forth
therein.
Unless earlier terminated pursuant to the provisions of this Agreement, the Underwriter's engagement
hereunder shall extend from the date of this letter through the financial closing of the underwriting. The
Underwriter's engagement hereunder may be terminated by the Issuer or the Underwriter at any time
upon written notice to that effect to the other party. In the event that the Underwriter is terminated for
any reason other than cause, the Issues- authorizes Piper Jaffray to work with Nebraska Furniture Mart
("NFM") to pay the expenses of the Underwriter incurred up to the date of termination of this Agreement
and expenses will be invoiced directly to NFM and not be payable in the form of an underwriter's
discount.
Issuer acknowledges and agrees that: (i) the purchase and sale of the securities is an arm's length,
commercial transaction between the Issuer and the Underwriter, (ii) in connection with such transaction,
the Underwriter is acting solely as a principal and is not acting as a municipal advisor, financial advisor or
fiduciary to the Issuer; (iii) the Underwriter has not assumed any advisory or fiduciary responsibility to the
Issuer with respect to the transaction contemplated hereby and the discussions, undertakings and
proceedings leading thereto (irrespective of whether Piper Jaffray has provided other services or is
currently providing other services to the Issuer on other matters) or any other obligation to the Issuer
except the obligations expressly set forth in this Agreement and (iv) the Issuer has consulted its own legal,
accounting, tax, financial and other advisors, as applicable, to the extent it has deemed appropriate in
connection with the transaction contemplated herein. -
This Agreement will be governed by, and construed in accordance with, the laws of the State of Texas,
without regard to principles of conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby. The Issuer and the Underwriter each hereby irrevocably waive
any right they may have to a trial by jury in respect of any claim based upon or arising out of this
Agreement or the transactions contemplated hereby.
This Agreement may not be assigned by either party without the prior written consent of the other party.
This Agreement embodies the entire agreement and understanding between the parties hereto and
supersedes all prior agreements and understandings relating to the subject matter hereof. If any provision
of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not
affect such provision in any other respect or any other provision of this Agreement, which will remain in
full force and effect. This Agreement may not be amended or otherwise modified or waived except by an
instrument in writing signed by both the Underwriter and Issuer except that to the extent that any term
of an executed Bond Purchase Agreement conflicts with the terms of this Agreement, in which case the
terms of the Bond Purchase Agreement shall have precedence.
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This letter agreement may be executed in any number of counterparts, each of which shall be an original and
all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a
signature page of this letter agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart of this letter agreement.
Please confirm that the foregoing correctly sets forth our agreement by signing and returning to Piper
Jaffray & Co., the enclosed original copy of this Agreement.
Very truly yours,
Piper Jaffray & Co.
A`
By
-Name: Mark A. Curran
Title: Managing Director
Accepted and agreed to as of the date first written above:
By: r'r
me: Joe I &ourry
ZL
/Title: May r
City of The Colony, Texas
,Page 4
Schedule A
The fee table below is based on our best estimates at this time, applies to any applicable series of credit
enhanced bonds with a total estimated par amount of $93.0 million and may be negotiated, as
circumstances warrant, prior to the sale of the Bonds.
Underwriting Fees - Taxable Credit Enhanced Bonds
° 1 1
° oJeq -e
'e 111 111
i 9 e 1 o e l e
Average Takedown ($/bond) $ 4.5000 $ 418,500.00
Management Fee $ - $ -
Reimbursable Expenses $ 0.2500 $ 23,250.00
Gross Underwriter's Discount $ 4.7500 $ 441,750.00
•1.1 ® 6/ee 1 e
Travel $ 0.0370 $ 3,437.83
CUSIP Fee $ 0.0039 $ 363.00
TX Mac $ 0.1043 $ 9,700.00
i-Deal - Municipal Syndicate Services $ 0.0764 $ 7,105.00
Interest on Day Loan @ .25% $ 0.0181 $ 1,679.17
DTC Charges $ 0.0054 $ 500.00
Clearance $ 0.0050 $ 465.00
Total Expenses $ 0.2500 $ 23,250.00
Assumes institutional bond marketing
I
I
III
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Schedule B -
The fee table below is based on our best estimates at this time, applies to any applicable series of unrated
bonds with a total estimated par amount of $79.7 million and may be negotiated, as circumstances
warrant, prior to the sale of the Bonds.
Underwriting Fees - Taxable Unrated Bonds
' o e
' ' 11 111
e
1 i Per:Bond:
Average Takedown ($/bond) $ 10.5000 $ 836,850.00
Management Fee $ - $ -
Reimbursable Expenses $ 0.2500 $ 19,925.00
Gross Underwriter's Discount $ 10.7500 $ 856,775.00
Travel $ 0.0338 $ 2,689.97
CUSIP Fee $ 0.0053 $ 420.00
TX Mac $ 0.1050 $ 8,370.00
i-Deal - Municipal Syndicate Services $ 0.0766 $ 6,107.50
Interest on Day Loan @ .25% $ 0.0181 $ 1,439.03
DTC Charges $ 0.0063 $ 500.00
Clearance $ 0.0050 $ 398.50
Total Expenses $ 0.2500 $ 19,925.00
Assumes institutional bond marketing