HomeMy WebLinkAboutOrdinance 4684 ORDINANCE NO, 4684
AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF THE
CITY'S $3,725,000 TAX INCREMENT INTEREST ACCRETION BONDS
(HIGHWAY 71 EAST SQUARE REDEVELOPMENT DISTRICT NO. 1
PROJECT), SERIES 2005, FOR THE PURPOSE OF FINANCING
CERTAIN IMPROVEMENTS WITHIN THE DISTRICT; AUTHORIZING
THE EXECUTION AND DELIVERY OF A TRUST INDENTURE
PURSUANT TO WHICH THE BONDS WILL BE ISSUED AND
SECURED; AUTHORIZING THE EXECUTION AND DELIVERY OF AN
OFFICIAL STATEMENT PURSUANT TO WHICH THE BONDS WILL
BE OFFERED; AUTHORIZING THE EXECUTION AND DELIVERY OF
A BOND PURCHASE AGREEMENT PROVIDING FOR THE SALE OF
THE BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A
CONTINUING DISCLOSURE AGREEMENT; PRESCRIBING OTHER
MATTERS RELATING THERETO; AND DECLARING AN
EMERGENCY
WHEREAS, the City Council of the City of Fayetteville, Arkansas (the "City") has
previously stated its determination in Resolution No. 19-05 adopted February 1 , 2005, that there
is a great need for a source of revenue to finance the costs of alleviating blight and encouraging
development and redevelopment within the City and in furtherance of such purposes has created
the Highway 71 East Square Redevelopment District No. 1 (the "District') pursuant to
Ordinance No. 4608 adopted on August 17, 2004, as amended by Ordinance No. 4662 adopted
on December 28, 2004, and by Ordinance No. 4673 adopted on January 25, 2005 ; and
WHEREAS, it has been determined that the specific actions needed to alleviate such
blight and encourage such development and redevelopment consist of (i) the acquisition of
certain real property, the demolition of existing structures thereon and site preparation in
connection therewith, which property is located within the District and consists of the former
Mountain Inn property, the former Niblock Law Offices, the former Red Bird Restaurant and the
former Washington County Courts Building, and (ii) the construction of certain sidewalk and
crosswalk improvements within the District (collectively, the "Project'); and
WHEREAS, upon completion of the Project and upon satisfaction of certain conditions,
the City intends to sell the cleared property to a private developer for the purpose of constructing
a hotel, meeting place, condominium and parking deck development thereon; and
WHEREAS, the City is authorized and empowered under the provisions of the
Constitution and laws of the State of Arkansas, including particularly Amendment 78 to the
Constitution of the State of Arkansas ("Amendment 78") and Arkansas Code Annotated (2003
Supp.) Sections 14- 168-301 et seq. (as from time to time amended, the "Act'), to issue and sell
its bonds to finance the costs of various capital improvements within the District such as those
comprising the Project, which bonds are to be secured by and payable from the ad valorem tax
increment described in and authorized by the Act; and
WHEREAS, as authorized under the provisions of Amendment 78 and the Act, the City
has now determined to issue and sell its Tax Increment Interest Accretion Bonds (Highway 71
East Square Redevelopment District No. 1 Project), Series 2005, in the principal amount of
$3,725,000 (the "Bonds"), in order to provide financing for the costs of the Project and to pay
related costs of issuance; and
WHEREAS, the City has made arrangements for the sale of the Bonds to Crews &
Associates, Inc., Little Rock, Arkansas (the "Underwriter"), such sale to be made pursuant to the
terms of a Bond Purchase Agreement between the City and the Underwriter (the "Bond Purchase
Agreement") in substantially the form presented to and before this meeting; and
WHEREAS, the terms of the Bonds are consistent with the financing terms described in
the District's project plan originally adopted on December 7, 2004, pursuant to Ordinance No.
4646, and amended on December 28, 2004 and March 15, 2005, pursuant to Ordinance No. 4663
and Ordinance No. 4683 , respectively.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS THAT:
Section 1 : Under the authority of the Constitution and laws of the State of Arkansas,
including particularly Amendment 78 and the Act, there is hereby authorized the issuance of
bonds of the City to be designated as "City of Fayetteville, Arkansas Tax Increment Interest
Accretion Bonds (Highway 71 East Square Redevelopment District No. 1 Project), Series 2005."
The Bonds shall be issued at one time or from time to time in the original aggregate principal
amount of Three Million Seven Hundred Twenty-Five Thousand Dollars ($3 ,725,000). The
Bonds shall mature on August 1 , 2029 and shall bear interest at the rate of 6.50% per annum, as
specified in the Bond Purchase Agreement presented to this meeting.
The proceeds of the Bonds will be utilized to finance the costs of acquisition, demolition,
and site preparation relating to Project and to pay publication, legal, underwriting and other
expenses incidental to the issuance of the Bonds. The City Council hereby finds that the real
property within the District will be benefited upon completion of the Project.
The Bonds shall be issued in minimum denominations of $5,000 and in increments of
$5,000 in excess thereof. The Bonds shall be dated, shall be in the form, shall be numbered,
shall be subject to redemption prior to maturity, and shall contain such other terms, covenants
and conditions, all as set forth in that certain Trust Indenture to be dated as of April 15, 2005 (the
"Indenture"), by and between the City and The Bank of Fayetteville, as trustee (the "Trustee"), to
be entered into by the City and the Trustee in substantially the form submitted to this meeting.
The Mayor is hereby authorized and directed to execute and deliver the Bonds in
substantially the form thereof contained in the Indenture submitted to this meeting, and the City
Clerk is hereby authorized and directed to execute and deliver the Bonds and to affix the seal of
the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the
Bonds to be accepted and authenticated by the Trustee. The Mayor is hereby authorized to
confer with the Trustee, the Underwriter and Kutak Rock LLP, Little Rock, Arkansas ("Bond
Counsel"), in order to complete the Bonds in substantially the form contained in the Indenture
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submitted to this meeting, with such changes as shall be approved by such persons executing the
Bonds, their execution to constitute conclusive evidence of such approval.
Section 2 : In order to pay the principal of and interest on the Bonds as they mature or
are called for redemption prior to maturity, the Act provides that the District's tax increment, as
defined in the Act (the "Tax Increment"), shall be calculated annually and any positive amount
distributed to the City for deposit into the Highway 71 East Square Redevelopment District No. 1
Tax Increment Fund created in Ordinance No. 4608. Pursuant to the Indenture, such fund will be
assigned to and held by the Trustee for the benefit of the holders of the Bonds. The City
covenants and agrees that all receipts relating to the Tax Increment will be accounted for
separately as special funds on the books of the City, and receipts of said Tax Increment will be
deposited and will be used solely as provided in the Indenture.
Section 3 : To prescribe the terms and conditions upon which the Bonds are to be
executed, authenticated, issued, accepted, held and secured, the Mayor is hereby authorized and
directed to execute and acknowledge the Indenture, and the 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 the City Clerk are hereby authorized and directed to cause the Indenture to be
accepted, executed and acknowledged by the Trustee. The Indenture is hereby approved in
substantially the form submitted to this meeting, including, without limitation, the provisions
thereof pertaining to the Tax Increment and the terms of the Bonds. The Mayor is hereby
authorized to confer with the Trustee, the Underwriter and Bond Counsel in order to complete
the Indenture in substantially the form submitted to this meeting, with such changes as shall be
approved by such persons executing the Indenture, their execution to constitute conclusive
evidence of such approval.
(Advice is given that a copy of the Indenture in substantially the form authorized to be
executed is on file with the City Clerk and is available for inspection by any interested person.)
Section 4: There is hereby authorized and approved a Preliminary Official Statement
of the City, including the cover page and appendices attached thereto, relating to the Bonds. The
Preliminary Official Statement is hereby "deemed final" within the meaning of U.S. Securities
and Exchange Commission Rule 15c2- 12. The prior distribution of the Preliminary Official
Statement is hereby ratified and approved. The Preliminary Official Statement, as amended to
conform to the terms of the Bond Purchase Agreement, including Exhibit A thereto, and with
such other changes and amendments as are mutually agreed to by the City, the Underwriter and
Bond Counsel, is herein referred to as the "Official Statement", and the Mayor is hereby
authorized to execute the Official Statement for and on behalf of the City. The Official
Statement is hereby approved in substantially the form of the Preliminary Official Statement
submitted to this meeting, and the Mayor is hereby authorized to confer with the Underwriter and
Bond Counsel in order to complete the Official Statement in substantially the form of the
Pr6liminary Official Statement submitted to this meeting with such changes as shall be approved
by such persons, the Mayor's execution to constitute conclusive evidence of such approval.
(Advice is given that a copy of the Preliminary Official Statement is on file with the City
Clerk and is available for inspection by any interested person.)
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Section 5 : In order to prescribe the terms and conditions upon which the Bonds are to
be sold to the Underwriter, the Mayor is hereby authorized and directed to execute the Bond
Purchase Agreement on behalf of the City, to be dated as of the date of its execution (the "Bond
Purchase Agreement'), by and between the City and the Underwriter, and said Bond Purchase
Agreement is hereby approved in substantially the form submitted to this meeting, and the
Mayor is hereby authorized to confer with the Underwriter and Bond Counsel in order to
complete the Bond Purchase Agreement in substantially the form submitted to this meeting, with
such changes as shall be approved by such persons executing the Bond Purchase Agreement,
their execution to constitute conclusive evidence of such approval.
(Advice is given that a copy of the Bond Purchase Agreement in substantially the form
authorized to be executed is on file with the City Clerk and is available for inspection by any
interested person.)
Section 6: In order to provide for continuing disclosure of certain financial and
operating information with respect to the City, the District and the Tax Increment in compliance
with the provisions of Rule 15c2- 12 of the U. S. Securities and Exchange Commission, the
Mayor is hereby authorized and directed to execute a Continuing Disclosure Agreement (the
"Continuing Disclosure Agreement'), by and between the City and the Trustee, and the Mayor is
hereby authorized and directed to cause the Continuing Disclosure Agreement to be executed by
the Trustee. The Continuing Disclosure Agreement is hereby approved in substantially the form
submitted to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the
Underwriter and Bond Counsel in order to complete the Continuing Disclosure Agreement in
substantially the form submitted to this meeting with such changes as shall be approved by such
persons executing the Continuing Disclosure Agreement, their execution to constitute conclusive
evidence of such approval.
(Advice is given that a copy of the Continuing Disclosure Agreement in substantially the
form authorized to be executed is on file with the City Clerk and is available for inspection by
any interested person.)
Section 7: The Mayor and City Clerk, for and on behalf of the City, are hereby
authorized and directed to do any and all things necessary to effect the issuance, sale, execution
and delivery of the Bonds and to effect the execution and delivery of the Indenture, the Bond
Purchase Agreement, the Continuing Disclosure Agreement and a Tax Regulatory Agreement
relating to the tax exemption of interest on the Bonds, and to perform all of the obligations of the
City under and pursuant thereto. The Mayor and the City Clerk are further authorized and
directed, for and on behalf of the City, to execute all papers, documents, certificates and other
instruments that may be required for the carrying out of such authority or to evidence the
exercise thereof.
Section 8: The provisions of this Ordinance are hereby declared to be severable, and
if any section, phrase or provision shall for any reason be declared to be illegal or invalid, such
declaration shall not affect the validity of the remainder of the sections, phrases or provisions of
this Ordinance.
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Section 9: All ordinances, resolutions and parts thereof in conflict herewith are
hereby repealed to the extent of such conflict.
Section 10: There is hereby found and declared to be an immediate need for certain
infrastructure improvements within the District, which improvements will benefit the public
health, safety and welfare of the City and its inhabitants, and the issuance and sale of the Bonds
approved hereby for the purpose of financing the Project and the taking of the other actions
authorized herein are immediately necessary in connection with such improvements. It is,
therefore, declared that an emergency exists and this Ordinance being necessary for the
immediate preservation of the public health, safety and welfare shall be in force and take effect
immediately upon and after its passage.
PASSED and APPROVED this 15`h day of March, 2005.
GTYpSGP: APPROVED:
c ; FAYETTEVILLE ;
:� a By:
%9so9. 'kANs?c J, A/ � COO Mayor
ATTEST: '%,�SjN . . . . •G () N
� ��ON�����.
By: &mA424
SO DRA SMITH, City Clerk
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EXECUTION COPY
BOND PURCHASE AGREEMENT
March 15, 2005
City of Fayetteville
City Administration Building
113 West Mountain
Fayetteville, Arkansas 72701
$3,725,000
City of Fayetteville, Arkansas
Tax Increment Interest Accretion Bonds
(Highway 71 East Square Redevelopment District No. I Project)
Series 2005
Ladies and Gentlemen:
On the basis of the representations, warranties and agreements and upon the terms and
conditions contained herein, the undersigned, Crews & Associates, Inc. (the "Underwriter"),
hereby offers to enter into this Bond Purchase Agreement (this "Bond Purchase Agreement")
with the City of Fayetteville, Arkansas (the "City") which, upon your acceptance of this offer,
will be binding upon you and upon the Underwriter. Terms not otherwise defined herein shall
have the same meanings as set forth in the Indenture defined and described below.
This offer is made subject to your acceptance of this Bond Purchase Agreement on or
before midnight on March 15, 2005.
1 . General. Upon the terms and conditions and in reliance upon the City's
representations, warranties and covenants herein, the Underwriter hereby agrees to purchase
from the City, and the City hereby agrees to sell to the Underwriter, all (but not less than all) of
$3,725,000 City of Fayetteville, Arkansas Tax Increment Interest Accretion Bonds (Highway 71
East Square Redevelopment District No. 1 Project), Series 2005 (the "Bonds"), at the purchase
price (the "Purchase Price") of $3,576,000.00 (equal to the par amount of the Bonds less
underwriter' s discount of $ 149,000.00).
The Bonds shall be issued by the City pursuant to the provisions of the Constitution and
laws of the State of Arkansas, including, particularly, Amendment 78 to the Constitution and
Arkansas Code Annotated (2003 Supp.) §§ 14- 168-301 et seq. (the "Act").
The Bonds will constitute special and limited obligations of the City, secured solely by
and payable solely from ( 1 ) a pledge of and lien on the receipts from the Tax Increment (as
defined below) of the City's Highway 71 East Square Redevelopment District No. 1 (the
"District") authorized under the Act, and (2) moneys on deposit in the Revenue Fund, Bond
Fund, Project Fund and Redemption Fund established by a Trust Indenture to be dated as of
April 15, 2005 (the "Indenture"), by and between the City and The Bank of Fayetteville,
Fayetteville, Arkansas, as trustee (the "Trustee"), all as more particularly described in the
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Indenture. The Tax Increment has the meaning set forth in the Act and is determined by
multiplying the incremental increase in value of the real property within the District following its
creation by the maximum applicable ad valorem rate permitted pursuant to the Act.
The Bonds shall be issued and secured pursuant to Ordinance No. 4684 of the City
Council of the City which was adopted on March 15, 2005 (the "Authorizing Ordinance"), and
pursuant to the Indenture. The Bonds shall be issued in $5,000 denominations and integral
multiples of $5,000 in excess thereof, shall mature on August 1 , 2029 and shall bear interest at
the rate of 6.50% per annum. Interest on the Bonds will accrete, compounded semiannually, as
shown on Exhibit A hereto. The Bonds shall be subject to redemption as set forth in the
Indenture and in the Official Statement (hereinafter defined).
The proceeds of the Bonds will be utilized (i) to pay the costs of the 2005 Project (as
defined in the Indenture), and (ii) to pay the costs of issuance of the Bonds.
The City will undertake, pursuant to a Continuing Disclosure Agreement to be dated as of
the date of delivery of the Bonds (the "Continuing Disclosure Agreement"), to provide certain
annual financial and operating information and notices of the occurrence of certain events, if
material, as required by Section (b)(5)(i) of Rule 15c2-12 under the Securities Exchange Act of
1934, as amended (the "Rule"). A description of this undertaking is set forth in the Preliminary
Official Statement and will also be set forth in the Official Statement (each hereinafter defined).
The City is not in default with respect to any of its obligations under previous undertakings
pursuant to the Rule.
In order to ensure compliance with the provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), the City will enter into a Tax Regulatory Agreement dated as _of the
date of delivery of the Bonds (the "Tax Regulatory Agreement').
2. Bona Fide Public Offering. The Underwriter agrees to make a bona fide public
offering of all of the Bonds at the offering prices set forth on the cover of the final Official
Statement described below.
3 . Delivery of Official Statement. (a) The City has previously provided the
Underwriter with copies of its Preliminary Official Statement, including the cover page
and the appendices thereto, dated March 11 , 2005, relating to the Bonds (the "Preliminary
Official Statement'). As of its date, the Preliminary Official Statement is "deemed final"
by the City for purposes of SEC Rule 15c2- 12(b)( 1 ). The Preliminary Official Statement,
as amended to conform to the terms of this Bond Purchase Agreement, including
Exhibit A hereto, and with such other changes and amendments as are mutually agreed to
by the City and the Underwriter, is herein referred to as the "Official Statement."
(b) The City agrees to deliver to the Underwriter, at such address as the
Underwriter shall specify, as many copies of the final Official Statement dated March 15,
2005, relating to the Bonds as the Underwriter shall reasonably request as necessary to
comply with paragraph (b)(4) of the Rule (as defined above) and with Rule G-32 and all
other applicable rules of the Municipal Securities Rulemaking Board. The City agrees to
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deliver such final Official Statement within seven (7) business days after the execution
hereof.
(c) The City hereby authorizes and approves the Preliminary Official
Statement and the final Official Statement, consents to their distribution and use by the
Underwriter and authorizes the execution of the final Official Statement by a duly
authorized officer of the City.
(d) The Underwriter shall give notice to the City on the date after which no
participating underwriter, as such term is defined in the Rule, remains obligated to deliver
final Official Statements pursuant to paragraph (b)(4) of the Rule.
4. City's Representation and Warranties. The City represents and warrants to the
Underwriter that:
(a) The City is a duly organized and existing political subdivision under the
Constitution and laws of the State of Arkansas (the "State"). The City is authorized by
the provisions of the Act to issue the Bonds for the purpose of financing the 2005 Project.
(b) The City has the full legal right, power and authority (i) to adopt
Ordinance Nos. 4608 and 4662 creating the District (collectively, the "Creation
Ordinances"), (ii) to adopt Ordinance Nos. 4646, 4663 and 4683 approving the project
plan for the District (collectively, the "Project Plan Ordinances"), (iii) to adopt the
Authorizing Ordinance authorizing the issuance of and sale of the Bonds, (iv) to enter
into this Bond Purchase Agreement, the Indenture, the Continuing Disclosure Agreement
and the Tax Regulatory Agreement, (v) to issue, sell and deliver the Bonds to the
Underwriter as provided herein, (vi) to pledge irrevocably the receipts of the Tax
Increment to the payment of the principal of, premium, if any, and interest on the Bonds,
and (vii) to carry out and consummate all other transactions contemplated by each of the
aforesaid documents, and the City has complied with all provisions of applicable law,
including the Act, in all matters relating to such transactions.
(c) The City has duly authorized (i) the execution and delivery of the Bonds
and the execution, delivery and due performance of this Bond Purchase Agreement, the
Indenture, the Continuing Disclosure Agreement and the Tax Regulatory Agreement,
(ii) the distribution and use of the Preliminary Official Statement and the execution,
delivery and distribution of the final Official Statement, and (iii) the taking of any and all
such actions as may be required on the part of the City to carry out, give effect to and
consummate the transactions contemplated by such instruments. All consents or
approvals necessary to be obtained by the City in connection with the foregoing have
been received, and the consents or approvals so received remain still in full force and
effect.
(d) The Creating Ordinances, the Project Plan Ordinances and the Authorizing
Ordinance have been duly adopted by City Council of the City, are each in full force and
effect and each constitutes the legal, valid and binding act of the City; and this Bond
Purchase Agreement, the Indenture, the Continuing Disclosure Agreement and the Tax
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Regulatory Agreement, when executed and delivered, will constitute legal, valid and
binding obligations of the City, and this Bond Purchase Agreement, the Indenture, the
Continuing Disclosure Agreement and the Tax Regulatory Agreement are enforceable
against the City in accordance with their respective terms, except as enforceability
thereof may be limited by bankruptcy, insolvency or other laws affecting creditors' rights
generally.
(e) When delivered to or at the direction of the Underwriter, the Bonds will
have been duly authorized, executed, authenticated, issued and delivered and will
constitute legal, valid and binding obligations of the City in conformity with the laws of
the State of Arkansas, including the Act, and will be entitled to the benefit and security of
the Authorizing Ordinance and the Indenture.
(f) The City has duly approved and authorized the distribution and use of the
Preliminary Official Statement and the execution, delivery and distribution of the Official
Statement.
(g) The information contained in the Preliminary Official Statement is, and as
of the Closing Date such information in the final Official Statement will be, true and
correct in all material respects, and the Preliminary Official Statement does not and the
final Official Statement will not contain any untrue or misleading statement of a material
fact or omit to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(h) If, at any time prior to the earlier of (i) receipt of notice from the
Underwriter pursuant to Section 3(d) hereof that Official Statements are no longer
required to be delivered under the Rule or (ii) 25 days after the Closing Date, any event
occurs as a result of which the Official Statement, as then amended or supplemented,
might include an 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, the City shall promptly notify the Underwriter in writing of
such event. Any information supplied by the City for inclusion in any amendments or
supplements to the Official Statement will not contain any untrue or misleading statement
of a material fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
Upon the request of the Underwriter therefor, the City shall prepare and deliver to the
Underwriter, at the City's expense, as many copies of an amendment or supplement to the
Official Statement which will correct any untrue statement or omission therein as the
Underwriter may reasonably request.
(i) Neither the adoption of the Authorizing Ordinance, the Creating
Ordinances or the Project Plan Ordinances, the execution and delivery of this Bond
Purchase Agreement, the Bonds, the Indenture, the Continuing Disclosure Agreement or
the Tax Regulatory Agreement, nor the consummation of the transactions contemplated
herein or therein or the compliance with the provisions hereof or thereof will conflict
with, or constitute on the part of the City a violation of, or a breach of or default under, (i)
any statute, indenture, mortgage, commitment, note or other agreement or instrument to
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which the City is a party or by which it is bound, (ii) any provision of the Constitution of
the State of Arkansas, or (iii) any existing law, rule, regulation, ordinance, judgment,
order or decree to which the City (or the members of its City Council or any of its
officers in their respective capacities as such) is subject. All consents, approvals,
authorizations and orders of governmental or regulatory authorities, if any, which are
required for the City's execution and delivery of, consummation of the transactions
contemplated by, and compliance with the provisions of this Bond Purchase Agreement,
the Authorizing Ordinance, the Creating Ordinances, the Project Plan Ordinances, the
Bonds, the Indenture, the Continuing Disclosure Agreement and the Tax Regulatory
Agreement have been obtained.
0) Except as is specifically disclosed in the Official Statement, there is no
action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, pending or, to the best knowledge of the City, threatened,
which in any way questions the powers of the City referred to in subparagraph 4(b)
above, or the validity of any proceeding taken by the City in connection with the issuance
of the Bonds or the pledge of the Tax Increment, or wherein an unfavorable decision,
ruling or finding could materially adversely affect the transactions contemplated by this
Bond Purchase Agreement, or of any other document or instrument required or
contemplated by the Bond financing, or which, in any way, could adversely affect the
validity or enforceability of the Authorizing Ordinance, the Creating Ordinances, the
Project Plan Ordinances, the Bonds, the Indenture, the Continuing Disclosure Agreement,
the Tax Regulatory Agreement or this Bond Purchase Agreement or, to the knowledge of
the City, which in any way questions the exclusion from gross income of the recipients
thereof of the interest on the Bonds for federal income tax purposes or in any other way
questions the status of the Bonds under federal or State of Arkansas tax laws or
regulations.
(k) Any certificate signed by any official of the City and delivered to the
Underwriter shall be deemed a representation and warranty by the City to the
Underwriter as to the truth of the statements therein contained.
(1) The City has not been notified of any listing or proposed listing by the
Internal Revenue Service to the effect that it is a bond issuer whose arbitrage
certifications may not be relied upon.
(m) The City will not knowingly take or omit to take any action, which action
or omission will in any way cause the proceeds from the sale of the Bonds to be applied
in a manner other than as provided in the Indenture, or which would cause the interest on
the Bonds to be includable in gross income for federal income tax purposes.
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5 . City's Covenants. The City covenants with the Underwriter as follows:
(a) The City will cooperate with the Underwriter in qualifying the Bonds for
offer and sale under the securities or Blue Sky laws of such jurisdictions of the
United States as the Underwriter may request; provided, however, that the City shall not
be required to consent to suit or to service of process in any jurisdiction. The City
consents to the use by the Underwriter in the course of its compliance with the securities
or Blue Sky laws of the various jurisdictions of the documents relating to the Bonds,
subject to the right of the City to withdraw such consent for cause by written notice to the
Underwriter.
(b) Prior to the earlier of (i) receipt of notice from the Underwriter pursuant to
Section 3(d) hereof that final Official Statements are no longer required under the Rule or
(ii) 25 days after the Closing Date, the City shall provide the Underwriter with such
information regarding the City, Tax Increment receipts, and the current financial
condition and valuation of property within the District, all as the Underwriter may
reasonably request.
6. Closing. At 10:00 a.m. Little Rock time on April 19, 2005, or at such other time
and/or date as shall have been mutually agreed upon by the City and the Underwriter (the
"Closing Date"), the City will deliver the Bonds, or cause the Bonds to be delivered, to or at the
direction of the Underwriter, said Bonds to be in definitive form duly executed by the City and
authenticated by The Bank of Fayetteville, Fayetteville, Arkansas, as trustee (the "Trustee"),
together with the other documents hereinafter mentioned; and the Underwriter will accept such
delivery and pay the Purchase Price of the Bonds by making a wire transfer of federal funds
payable to the order of the Trustee for the account of the City.
The Bonds shall be delivered to The Depository Trust Company in New York,
New York, and the activities relating to the final execution and delivery of the Authorizing
Ordinance, the Creating Ordinances, the Project Plan Ordinances, the Indenture, the Continuing
Disclosure Agreement and the Tax Regulatory Agreement and the other documents related to the
Bonds and the payment for the Bonds and the delivery of the certificates, opinions and other
instruments as described in Section 8 of this Bond Purchase Agreement shall occur in the offices
of Kutak Rock LLP, 425 West Capitol Avenue, Suite 1100, Little Rock, Arkansas ("Bond
Counsel") or at such other place as shall have been mutually agreed upon between the City and
the Underwriter. The payment for the Bonds and simultaneous delivery of the Bonds to or at the
direction of the Underwriter is herein referred to as the "Closing."
7. Underwriter's Right to Cancel. The Underwriter shall have the right to cancel
its obligation to purchase the Bonds hereunder by notifying the City in writing or by telegram of
its election to do so between the date hereof and the Closing, if at any time hereafter and prior to
the Closing:
(i) the House of Representatives or the Senate of the Congress of the
United States, or a committee of either, shall have pending before it, or shall have passed or
recommended favorably, legislation introduced previous to the date hereof, which
legislation, if enacted in its form as introduced or as amended, would have the purpose or
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effect of imposing federal income taxation upon revenues or other income of the general
character to be derived by the City or by any similar body under the Authorizing Ordinance
or the Indenture or similar documents or upon interest received on obligations of the general
character of the Bonds or the Bonds, or of causing interest on obligations of the general
character of the Bonds, or the Bonds, to be includable in gross income for purposes of
federal income taxation, and such legislation, in the Underwriter's opinion, materially
adversely affects the market price of the Bonds; or
(ii) 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 or rereported 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 be enacted or a decision by a federal court of the
United States or the United States Tax Court shall have been rendered, or a ruling, release,
order, regulation or official statement by or on behalf of the United States Treasury
Department, the Internal Revenue Service or other governmental agency shall have been
made or proposed to be made having the purpose or effect, or any other action or event shall
have occurred which has the purpose or effect, directly or indirectly, of adversely affecting
the federal income tax consequences of owning the Bonds or of any of the transactions
contemplated in connection herewith, including causing interest on the Bonds to be included
in gross income for purposes of federal income taxation, or imposing federal income
taxation upon revenues or other income of the general character to be derived by the City or
by any similar body under the Authorizing Ordinance or the Indenture or similar documents
or upon interest received on obligations of the general character of the Bonds, or the Bonds
which, in the opinion of the Underwriter, materially adversely affects the market price of or
market for the Bonds; or
(iii) legislation shall have been enacted, or actively considered for enactment
with an effective date prior to the Closing, or a decision by a court of the United States shall
have been rendered, the effect of which is that the Bonds, including any underlying
obligations, or the Indenture, as the case may be, is not exempt from the registration,
qualification or other requirements of the Securities Exchange Act of 1933, as amended and
as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or
the Trust Indenture Act of 1939, as amended and as then in effect; or
(iv) a stop order, ruling, regulation or official statement by the Securities and
Exchange Commission or any other governmental agency having jurisdiction of the subject
matter shall have been issued or made or any other event occurs, the effect of which is that
the issuance, offering or sale of the Bonds, including any underlying obligations, or the
execution and delivery of the Indenture as contemplated hereby or by the Official Statement,
is or would be in violation of any provision of the federal securities laws, including the
Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of
1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and
as then in effect; or
7
10-106556.1