HomeMy WebLinkAboutOrdinance 2679 FILED FOR RECORD
1900 DEC - 3 All 11 : 48
Y41ASHINGTO1,11 COUNTY, ARK .
ALMA KOLLMEYER
ORDINANCE NO . CIRCUIT CLERK
AN ORDINANCE AUTHORIZING THE ISSUANCE OF A BOND
ANTICIPATION NOTE AND INDUSTRIAL DEVELOPMENT REVENUE
BONDS UNDER ACT NO . 9 OF THE FIRST EXTRAORDINARY
SESSION OF THE SIXTY- SECOND GENERAL ASSEMBLY OF THE
STATE OF ARKANSAS , APPROVED JANUARY 21 , 1960 , AS
AMENDED , FOR THE PURPOSE OF PROVIDING INTERIM AND
PERMANENT FINANCING OF THE COSTS OF SECURING AND
DEVELOPING INDUSTRY ( THE PARTICULAR INDUSTRIAL
PROJECT IS DESCRIBED IN THE ORDINANCE ) ; AUTHORIZING
THE EXECUTION AND DELIVERY OF A TRUST INDENTURE
SECURING THE NOTE AND BONDS ; AUTHORIZING AND
PRESCRIBING OTHER MATTERS PERTAINING TO THE ACQUI -
SITION , CONSTRUCTION , RECONSTRUCTION AND EQUIPPING
( THEREOF ; AND DECLARING AN EMERGENCY .
WHEREAS , the City of Fayetteville , Arkansas ( the " City " )
is authorized by Act No . 9 of the First Extraordinary Session
of the Sixty- Second General Assembly of the State of Arkansas ,
approved January 21 , 1960 , as amended ( " Act No . 9 " ) , to acquire
lands , construct and equip facilities and to incur other costs
and expenses and make other expenditures incidental to and for
the implementing and accomplishing of the conduct of manufact -
uring operations ; and
WHEREAS , the City is' authorized by . Act No . 9 to issue a
Bond Anticipation Note and Industrial Development Revenue
Bonds payable from revenues derived from such industrial
project so acquired and constructed and secured by a lien
thereon and security interest therein ; and
WHEREAS , the necessary arrangements have been made with
Baldwin Piano & Organ Company , an Ohio corporation ( the
" Company " ) , for the acquisition , construction , reconstruction
and equipping of a manufacturing plant consisting of lands ,
buildings , improvements , machinery , equipment and facilities
which will be utilized for the manufacturing of such products
as the Company shall elect to manufacture ( the " Project " ) and
to lease the Project to the Company pursuant to the terms of a
Lease and Agreement subsequently identified herein and referred
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to as the " Lease Agreement " ; and MICROFILMED
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WHEREAS , the City is providing interim financing through
the issuance of a Bond Anticipation Note in the principal
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amount of $ 1 , 200 , 000 ( " Note " ) under the Act for the Project
costs , necessary costs and expenses incidental thereto and
expenses of authorizing and issuing the Note , if required by
the Company , and permanent financing of the Project costs ,
necessary costs and expenditures incidental thereto and
expenses of authorizing and issuing bonds by retirement of the
Note , is being furnished by the City issuing Industrial Develop-
ment Revenue Bonds under the provisions of Act No . 9 ( the
" Bonds " ) ; and
WHEREAS , the Note will be in the principal amount , bear-
ing interest and maturing as hereinafter set forth in the form
of a Trust Indenture authorized by this Ordinance ; and
WHEREAS , the Bonds are to be sold and issued in series ,
with there being issued at an appropriate time to retire the
Note Series 1980 Bonds in the principal amount , bearing inter-
est , maturing and subject to redemption as hereinafter set
forth in the form of a Trust Indenture authorized by this
Ordinance ;
NOW , THEREFORE , BE IT ORDAINED by the Council of the City
of Fayetteville , Arkansas :
Section 1 . That there be , and there is hereby authorized
and directed the following :
( a ) The sale of the Note by the City for the sum
of $ 1 , 200 , 000 in accordance with the terms of
a Note Purchase Agreement to be executed by
the City and the purchaser of the Note ( " Note
Purchase Agreement " ) on terms recommended by
the Company , and sale of the Series 1980
Bonds by Edward D . Jones & Co . , Maryland
Heights , Missouri , or other qualified person
and the execution by the Mayor and City Clerk
of an Underwriting Agreement ( " Underwriting
Agreement " ) with such broker-dealer or other
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qualified person for the price and pursuant to the
terms recommended ' by the Company ( copies of
which Note Purchase Agreement and Underwriting .
Agreement , when prepared by the Company and
presented to the City for signing shall be so
signed and shall be filed in the office of
the City Clerk ) ;
( b ) The acquisition , construction , reconstruction
and equipping of the Project , and in con-
nection therewith , the execution of contracts ,
and the acceptance of assignments of contracts ,
for the acquisition , construction , reconstruc -
tion and equipping of the Project ; and
( c ) The performance of all obligations of the
City under the Lease Agreement pertaining to
the acquisition , construction , reconstruction
and equipping of the Project and the perfor-
mance of all obligations of the City under
the contracts referred to in ( b ) above .
Section 2 . That the issuance of the Note and Bonds from
time to time is hereby authorized , and the immediate delivery
of the Note is hereby authorized . To prescribe the terms and
conditions upon which the Note and Bonds are to be executed ,
authenticated , issued , accepted , held and secured , the Mayor
is hereby authorized and directed to execute and acknowledge a
Trust Indenture ( the " Indenture " ) , and the City Clerk is
hereby authorized and directed to execute and acknowledge the
Indenture and to affix the seal of the City thereto , and the
Mayor and City Clerk are hereby authorized and directed to
cause the Indenture to be accepted , executed and acknowledged
by the Trustee . The Indenture , which constitutes and is
hereby made a part of this Ordinance , shall be in substant-
ially the following form , to wit :
( Advice is hereby given that a copy of the Trust
Indenture is on file in the office of the City
Clerk of the City and is available for inspection
by any interested person . )
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TRUST INDENTURE
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by and between
CITY OF FAYETTEVILLE , ARKANSAS
and
BANKERS TRUST COMPANY
New York , New York
Dated as of 1980
This Instrument was Prepared By :
DAVIDSON , PLASTIRAS , HORNE ,
HOLLINGSWORTH & ARNOLD , Ltd ,
211 National Investors Life Bldg .
Post Office Box 3363
Little Rock , Arkansas 72203
THIS INSTRUMENT ALSO CONSTITUTES A SECURITY AGREEMENT
UNDER THE ARKANSAS UNIFORM COMMERCIAL CODE
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TABLE OF CONTENTS
Parties 1
Recitals 2
Note Form 2 ( a )
Bond Form 3
Granting Clauses 4
ARTICLE I
DEFINITIONS
Section 101 Definitions 20
Section 102 Use of Words 25
ARTICLE II
THE BONDS
Section 201 Authorized Amount of Bonds 26
Section 202 Details of Bonds ; Issuance of
Additional Series 26
Section 203 Execution of Bonds ; Limited Obligation 28
Section 204 . Authentication 29
Section 205 . Form of Bonds 30
Section 206 Delivery of Bonds 30
Section 207 Indenture Superior to Laborer ' s ,
Etc . Liens 30
Sjection 208 Mutilated , Destroyed or Lost Coupons
or Bonds 31
Section 209 Registration of Principal and Interest 31
Section 210 Cancellation 33
ARTICLE III
REDEMPTION OF BONDS BEFORE MATURITY
Section 301 Redemption of Series 1980 Bonds 34
Section 302 Notice 38
Section . 303 Redemption of Subsequent Series 39
Section 304 Unpaid Coupons 39
Section 305 Redemption of Note 41
ARTICLE IV
GENERAL COVENANTS
Section 401 Payment of Principal and Interest 42
Section 402 Performance of Covenants 42
Section 403 City Warrants Title ; Instruments
of Further Assurance 43
Section 404 Payments of Taxes , Charges , Etc . 43
Section 405 Obligations to Maintain and Repair 44
Section 406 Recordation of Trust . Indenture and
Lease Agreement 45
Section 407 Books of Record and Account ;
Inspection 45
Section 408 List of Bondholders 46
Section 409 Lease Agreement Reference ; Lien of
Trust Indenture Subordinate to Lease
Agreement ; Enforcement Obligations
and Rights ; Guaranty Agreement
Reference 47
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Section 410 Covenant not to Sell or Dispose of
Interest in Trust Estate and Not to
Encumber Except in Accordance with
Lease Agreement and Trust Indenture 48
Section 411 Obligation to Insure 49
Section 412 Covenant of Filings Under Section
103 ( b ) ( 6 ) ( D ) of the IRC 49
Section 413 Covenant Not to Violate Section
103 ( b ) of the IRC 49
ARTICLE V
REVENUES AND FUNDS
Section 501 Creation of Bond Fund 50
Section 502 Payments into Bond Fund 50
Section 503 Use of Moneys in Bond Fund 51
Section 504 Custody of Bond Fund and Withdrawals
Therefrom by Trustee 51
Section 505 Non-presentment of Bonds or Coupons 52
Section 506 Fees , Charges and Expenses of
Trustee , Paying Agent and Bond
Registrar 53
Section 50.7 Moneys to be Held in Trust 53
Section 5.08.. Taxable Interest Account 55
Y
Section 509 Refund to Lessee of Excess Payments 55
ARTICLE VI
CUSTODY AND APPLICATION OF
PROCEEDS OF BONDS
Section 601 Deposits Into the Construction Fund 56
Section 602 Disbursements from Construction Fund 56
Section 603 When all Project Costs are Paid
Balance Used or Transferred to
Bond Fund 57
Section 604 When the Series 1980 Bonds are Issued 58
ARTICLE VII
INVESTMENTS
Section 701 Investment of Moneys in Construction
Fund and Other Funds 59
ARTICLE VIII
POSSESSION , USE AND RELEASE OF
MORTGAGED PROPERTY
Section 801 City ' s Right to Possess , Use and Enjoy 60
Section 802 Trustee Authorized , Pursuant to
Specified Conditions , in Joining with
City to Release Lien in Event of
Partial Condemnation 60
Section 803 Release of Certain Lands to be Used
in Expansion Program From Lien of
Indenture 60
Section 804 Release of Items of Project Machinery ,
Equipment and Fixtures 62
ARTICLE IX
DISCHARGE OF LIEN
Section 901 Discharge of Lien 63
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ARTICLE X
DEFAULT PROVISIONS ; REMEDIES
OF TRUSTEE AND BONDHOLDERS
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Section 1001 Events of Default 65
Section 1002 Acceleration 66
Section 1003 Trustee ' s Right to Enter and Take
Possession 67
Section 10'04 Other Remedies ; Rights and Obligations .
with Reference to Remedies 68
Section 1005 Rights of Majority of Bondholders to
Take Charge 69
Section 1006 Appointment of Receiver 69
Section 1007 Waiver by City of Benefit of Laws and
Rights of Appraisement and Redemption 70
Section 1008 Application of Available Moneys 70
Section 1009 Remedies Vested In Trustee 72
Section 1010 Rights and Remedies of Bondholders 72
Section 1011 Termination of Proceedings 74
Section 1012 Waiver of Events of Default 74
Section 1013 Notice of Default ; Opportunity of
Lessee to Correct 75
Section 1014 Rights and Remedies of Trustee and
Bondholders Subject and Subordinate
to Rights of Lessee Under Lease
Agreement 76
ARTICLE XI
THE TRUSTEE
Section 1101 Acceptance of Trusts 77 .
Se �tion 1102 Fees , Charges and Expenses of
Trustee 81
Section 1103 Notice of Bondholders of Default 82
Section 1104 Intervention by Trustee 83
Section 1105 Successor Trustee 83
Section 1106 Resignation by Trustee 83
Section 1107 Removal of Trustee 84
Section 1108 Appointment of Successor Trustee ;
Temporary Trustee 84
Section 1109 Acceptance by Successor Trustee 85
Section 1110 Right of Trustee to Pay Taxes and
Other Charges 85
Section 1111 Trustee Protected in Relying Upon
Resolutions , etc . 86
Section 1112 Trustee Which has Resigned or Been
Removed Ceases to be Paying Agent
and Bond Registrar 86
Section 1113 Paying Agent ' s and Bond Registrar ' s
Fees and Charges 87
Section 1114 Appointment of Co-Trustee or
Separate Trustee 87
ARTICLE XII
SUPPLEMENTAL INDENTURES
Section 1201 Supplemental Indentures Not Requiring
Consent of Bondholders 89
Section 1202 Supplemental Indentures Requiring
Consent of Bondholders 89
Section 1203 Consent of Lessee to Supplemental
Indentures 91
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ARTICLE XIII
AMENDMENT TO LEASE AGREEMENT
Section 1301 Amendments to Lease Agreement Not
Requiring Consent of Bondholders 92
Section 1302 Amendments to Lease Agreement Requiring
Consent of Bondholders 92
ARTICLE XIV
MISCELLANEOUS
Section 1401 Consents , etc . of Bondholders 94
Section 1402 Limitation of Rights 95
Section 1403 Severability 95
Section 1404 Notice 96
Section 1405 Arkansas Substantive Law Governs 96
Section 1406 Counterparts 96
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TRUST INDENTURE
This TRUST INDENTURE executed as of the day of r
1., 1980 , by and between the City of Fayetteville ,
Arkansas a city of the first class , duly existing under the
laws of the State of Arkansas ( the " City " ) , as party of the
first part , and Bankers Trust Company , an institution organ-
ized under and existing by virtue of the laws of the State of
New York , with its principal office , domicile and post office
address in New York , New York, ( the " Trustee " ) , as party of
the second part ;
WITNESSETH :
WHEREAS , the City is authorized by Act No . 9 of the First
Extraordinary Session of the Sixty-Second General Assembly of
the State of Arkansas , approved January 21 , 1960 , as amended
( " Act No . 9 " ) , to acquire lands , construct and equip facili -
ties and to incur other costs and expenses and make other
expenditures incidental to and for the implementing and accom-
plishing of the conduct of manufacturing operations ; and
WHEREAS , the City is authorized by Act No . 9 to issue
Bond Anticipation Notes and Industrial Development Revenue
Bonds payable from revenues derived from the industrial pro-
ject so acquired and constructed and secured by a lien . thereon
and security interest therein ; and
WHEREAS , the necessary arrangements have been made with
Baldwin Piano & Organ Company , an Ohio corporation . ( sometimes
herein referred to as the " Company " ) , for the acquisition ,
construction and equipment of a manufacturing plant consisting
of lands , buildings , improvements , machinery , equipment and
facilities which will be utilized for the manufacturing of
such products as the Company shall elect to manufacture ( the
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" Project " ) and to lease the Project to the Company , pursuant
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to the terms of a Lease and Agreement subsequently identified
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herein and referred to as the " Lease Agreement " ; . and
WHEREAT , interim financing of the Project Costs , neces -
sary costs and expenditures incidental thereto and expenses of
authorizing and issuing a note and bonds , is being furnished
by the City issuing a bond anticipation note in the principal
amount of $ 1 , 200 , 000 under the provisions of Act No . 9 ( the
" Note " ) ; and ,
WHEREAS , permanent financing of the Project costs , neces -
sary costs and expenditures incidental thereto and expenses of
authoriz,ing•..and issuing the Note and the Bonds by retirement
9f the principal of the Note is being furnished by the City
i$ suing Industrial Development Revenue Bonds under the provis -
ions of Act No . 9 within two years from the date of the
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Note , with there to be initially sold and issued Series 1980
Bonds in the principal amount of not to exceed $ 1 , 200 , 000 ( the
" Series 1980 Bonds " ) ; and
WHEREAS , the execution and delivery of this Trust Inden-
ture ( the " Trust Indenture " or the " Indenture " ) and the issu-
ance of the Note and Series 1980 Bonds have been in all res -
pects duly and validly authorized by ordinance of the City
Council of the City adopted and approved on the day of
1980 ; and
WHEREAS , the Note and the Series 1980 Bonds , interest
coupons to be attached thereto and the Trustee ' s Certificate
to be endorsed thereon are all to be in substantially the
following form , with necessary and appropriate variations ,
omissions and insertions as permitted or required by this
Indenture , to wit ( the Bond form is set up for Series 1980
Bonds and there shall be necessary, conforming changes in the
case of any subsequent series ) :
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CITY OF FAYETTEVILLE , ARKANSAS
BOND ANTICIPATION NOTE
BALDWIN PIANO & ORGAN COMPANY PROJECT
KNOW ALL MEN.. BY THESE PRESENTS :
That the City of Fayetteville , Washington County , Ark-
ansas , a municipality under the laws of the State of Arkansas
( the " City " ) , for value received , promises to pay to the order
of Bankers Trust Company ( " Payee " ) , on or before
the principal sum of
ONE MILLION TWO HUNDRED THOUSAND DOLLARS
in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of
• public and private debts , and to pay in like coin or currency
interest on said principal amount from the date hereof until
paid at the rate of * ; but the interest payable
on this Note shall not exceed , and in no event shall the City
be required' = to pay more than 108 per annum interest on the
amount received by it , which the City acknowledges to be One
Million Two Hundred Thousand Dollars ( $ 1 , 200 , 000 ) or on such
lesser amount as may be outstanding at any time , for any
period during which this Note is outstanding , .such interest to
b2 payable quarterly on the day of ,
and of each year
commencing 19 Principal and interest
shal'1 be payable in federal or other immediately available
funds at the principal office of Bankers Trust Company , New
York , New York ( the " Trustee " and Bond Registrar and the
" Paying Agent " ) . If any payment of interest with respect to
this Note becomes due and payable on a day which is not a
Business Day , ( as defined in the Indenture referred to below ) ,
then such payment shall be made on the next succeeding Busi-
ness Day , except that interest shall continue to accrue on the
unpaid principal .
This Note , designated " City of Fayetteville , Arkansas
Bond Anticipation Note - Baldwin Piano & Organ Company Pro-
ject " , is issued for the purpose of providing interim financ-
ing and in anticipation of the issuance of permanent and
definitive bonds for the payment of Project costs . The Note
is issued and is secured and entitled to the protection given
by a Trust Indenture ( the " Indenture " ) , dated as of
, 1980 , duly executed and delivered by the City to
the Trustee , which Indenture is recorded in the office of the
Circuit Clerk and Ex-Officio Recorder of Washington County ,
Arkansas , and reference is hereby made to the Indenture and
all indentures supplemental thereto for the provisions , among
others , with respect to the conditions for the issuance of
this Note , the definitive bonds , the nature and extent of the
security , the rights , duties and obligations of the City , the
*An amount to be negotiated by and between Baldwin Piano
& Organ Company and the purchaser of the Note , which
interest rate may fluctuate ( subject to the limitation
that it shall not exceed 108 per annum ) .
TI - 2 ( a )
Trustee and the holder of the Note , and the terms upon which
the Note is issued and secured .
The Note is issued pursuant to and in full compliance
with the Constitution and laws of the State of Arkansas , r
particularly Act No . 9 of the First Extraordinary Session of
the Sixty- Second General Assembly of the State of Arkansas ,
approved Jah'uary 21 , 1960 , as amended ( " Act No . 9 " ) , and
pursuant to Ordinance No . of the City , passed and
approved on the day of , 1980 , which ordinance
authorized the execution and delivery of the Indenture . The
Note is not a general obligation of the City , but is a special
obligation payable solely from lease rentals and revenues
derived from the Project . The Project , consisting of lands ,
buildings , improvements , machinery , equipment and facilities ,
has been leased to Baldwin Piano & Organ Company , an Ohio
corporation , ( the " Company " ) under a Lease and Agreement which
provides for lease rental and mandatory purchase payments
sufficient to pay the principal of , premiums , if any , and
' interest on the Note . Provision has been made in the Lease
and Agreement for the lease rentals and mandatory purchase
payments to be paid directly to the Trustee and deposited in a
special account of the City designated " Fayetteville , Arkansas
Industrial. Development Revenue Bond Fund - Baldwin Piano and
Organ Company Project " ( the " Bond Fund " ) . Project revenues
( including particularly rentals under the Lease and Agreement )
have been duly pledged by the Indenture to the payment of the
principal of , premiums , if any , and interest on the Note , and
the Note is secured by a lien on and security interest in the
Project , subject to an outstanding first mortgage , the Lease
and \Agreement and encumbrances permitted by the Indenture .
The Note does not constitute an indebtedness of the City
within the meaning of any constitutional or statutory limit-
ation .
Modifications or alterations of the Indenture , or of any
indenture supplemental thereto , may be made only to the extent
and in the circumstances permitted by the Indenture .
The Note shall be subject to redemption by the Issuer
prior to maturity at any time upon not less than five ( 5 )
Business Days notice as provided herein . Notice of redemption
shall be mailed by registered or certified mail to the Payee
and placed in the mail not less than five ( 5 ) Business Days
prior to the date fixed for redemption . After the date speci-
fied in such Notice , the Note so called will cease to bear
interest provided funds for its payment have been deposited
with the Trustee , and , except for the purpose of payment ,
shall no longer be protected by the Indenture and shall not be
deemed to be outstanding under the provisions of the Indenture .
The principal and interest of this Note are guaranteed by
D . H . Baldwin Company under a Guaranty and Indemnification
Agreement between D . H . Baldwin Company and Bankers Trust
Company dated December , 1980 ( the " Guaranty " ) .
Nothing contained in this Note or in the Indenture shall
affect or impair the negotiability of this Note and as declar-
ed in Act No . 9 , this Note shall be deemed to be a negotiable
instrument under the laws of the State of Arkansas . This Note
is issued with the intent that the laws of the State of Ark-
ansas will govern its construction .
TI - 2 ( b )
