HomeMy WebLinkAbout52-85 RESOLUTION454.
RESOLUTION NO. 52-85
SCANNED -I'
A RESOLUTION AUTHORIZING THE MAYOR AND CITY CTPRK
TO EXECUTE A CONTRACT WITH A.G. EEWARDS & SONS,
INC. TO PROVIDE MANAGING UNDERWRITERS SERVICES
ON THE CITY'S $19,000,000 SALES AND USE TAX CAPITAL
IMPROVEMENT BONDS FOR WASTEWATER TREATMENT SYSTEM
IMPROVEMENTS.
BE IT RESOLVED BY ME BOARD OF DIRECTOFS OF THE CITY OF FAYETTEVILLE,
ARKANSAS:
That the Mayor and City Clerk are hereby authorized and directed
to execute a contract with A.G. Edwards & Sons, Inc. to provide managing
underwriters services on the City's $19,000,000 Sales and Use Tax
Capital Improvement Bonds for Wastewater Treatment System improvements.
A copy of the contract authorized for execution hereby is attached
hereto marked Exhibit "PL" and made a part hereof.
PASSED AND APPROVED this 4th day of June
APPR7Eti:
BYL.Yd--Z61
Mayor
, 1985.
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McIlroy Bank & Trust (the "Trustee"). The Bonds are to be
$21,725,000
City of Fayetteville, Arkansas
Sales and Use Tax Capital Improvement Bonds
$10,000,000 1985 Series A
Subordinated Sales and Use Tax Capital
Improvement Bonds
$11,725,000 1985 Series B
July 18, 1985
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BOND PURCHASE AGREEMENT
On the basis of the representations, warranties and
agreements and upon the terms and conditions contained
herein, the undersigned, A. G. Edwards & Sons, Inc. (the
"Underwriter"), hereby offers to purchase $21,680,000 aggre-
gate principal amount of $10,000,000 Sales and Use Tax
.:Capital Improvement Bonds, 1985 Series A (the "Series A
Bonds") and $11,725,000 Subordinated Sales and Use Tax
Capital Improvement Bonds, 1985 Series B (the "Series B
Bonds") (collectively, the Series A Bonds and the Series B
,Bonds shall be referred to as the "Bonds") to be issued by
the City of Fayetteville, Arkansas (the "City"), a political
Subdivision organized and existing under the laws of the
State of Arkansas, under and pursuant to Ordinances adopted
by the City on February 5, 1985 and July 18, 1985 (collec-
tively, the "Ordinance") and a Trust Indenture, dated as of
August 15, 1985 (the "Trust Indenture"), between the City and
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issued by the City pursuant to and in accordance with the
provisions of Amendment No. 62 to the Constitution of the
state of Arkansas, as implemented by Act No. 871 of the
General Assembly of Arkansas for the year 1985 (the "Act").
The Bonds will constitute special obligations of the City,
payable as to principal and interest from the amounts
received by the City from its one percent (1%) sales and use
tax (the "Pledged Revenues"). The Ordinance irrevocably
pledges such Pledged Revenues to the payment of the principal
of and interest on the Bonds. The Bonds do not constitute an
indebtedness of the City within the meaning of any constitu-
tional or statutory limitation. The proceeds from the sale
of the Bonds are to be used to provide funds to pay a portion
of the cost of acquiring, constructing and equipping addi-
tions and improvements to the City's wastewater collection
and treatment facilities.
SECTION 1. REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS.
By execution hereof, the City hereby represents to, and
agrees with, the Underwriter that:
(a) The City is a political subdivision, duly
organized and existing under the Constitution and laws
of the State of Arkansas. The City is authorized by the
provisions of the Act and the Ordinance to issue, sell
and deliver the Bonds for the purposes specified above,
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adopt and perform its obligations under the Ordi-
ance, the Trust Indenture and this Bond Purchase
greement (this "Agreement") and to irrevocably pledge
he Pledged Revenues to the payment of the principal of
nd interest on the Bonds.
(b) The City has full power and authority to
=summate all transactions contemplated by this Agree-
ent, the Bonds, the Ordinance, the Trust Indenture and
ny and all other agreements relating thereto to which
he City is a party.
(c) The City has duly authorized all action neces-
ary under the Act or otherwise to be taken by it or on
ts behalf for: (i) the issuance and delivery of the
onds upon the terms set forth in the Act, the Ordi-
ance, the Trust Indenture, this Agreement and the
fficial Statement (as hereinafter defined); (ii) the
lcecution and delivery by it of the Trust Indenture and
his Agreement; (iii) the pledge 'of the Pledged Reve-
mes; and (iv) the adoption of the Ordinance and the
lerformance of its duties thereunder.
(d) There is no action, suit, proceeding, inquiry
)r investigation at law or in equity or before or by any
:ourt, public board or body pending or, to the knowledge
)f the City, threatened against or affecting it (or, to
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its knowledge, any basis therefor) wherein an unfavor-
able decision, ruling or finding would adversely affect
the transactions contemplated by this Agreement or would
adversely affect the validity of the Bonds, the Ordi-
nance, the Trust Indenture, this Agreement or any
agreement or instrument to which the City is a party and
which is used or contemplated for use in the consumma-
tion of the transactions contemplated hereby.
(e) The financial statements of the City referred
to and contained in Appendix A to the Preliminary
Official Statement dated July 9, 1985, and the final
Official Statement, dated July 18, 1985 (the Preliminary
Official Statement, the final Official Statement, the
Appendices thereto and any and all supplements and
amendments thereto are hereinafter referred to collec-
tively as the "Official Statement"), present fairly the
financial position of the City as of the dates indicated
therein and the results of operations for the periods
specified therein, and the financial statements therein
have been prepared in conformity with generally accepted
accounting principles consistently applied, except as
may be noted in said Official Statement, in all material
respects with respect to the periods involved.
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(f) The descriptions and information contained in
the Official Statement relating to the City, its organ-
ization, properties, operations and financial condition
and the descriptions of the Bonds, the Ordinance, the
Trust Indenture and the Pledged Revenues are, and at the
Closing Date (as defined in this Agreement and used
hereinafter) will be true and do not contain, and at the
Closing Date will not contain, any untrue statement of a
material fact or omit to state a material fact necessary
in order to make the statements made therein, in light
of the circumstances under which they were made, not
misleading.
(g) Since December 31, 1984, there has not been
any material adverse change in the properties, financial
position or results of operations of the City, whether
or not arising from transactions arising in the ordinary
course of business, other than any such changes which
are disclosed in the Official Statement and since such
date the City has not entered into any transaction or
incurred any liability material as to the City, except
as disclosed in the Official Statement.
(h) The City will not take, or omit to take, any
action which will in any way result in the proceeds from
the sale of the Bonds being applied in a manner incon-
sistent with the provisions of the Ordinance.
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(i) The Bonds, when executed and delivered by the
City, will constitute special obligations of the City
enforceable in accordance with their respective terms,
except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally.
(3) The Ordinance, the Trust Indenture
Agreement, when executed and delivered by the
be the legal, valid and binding obligation of
and this
City, will
the City
enforceable in accordance with their respective terms,
except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights generally.
(k) The execution and delivery of the Bonds, the
Trust Indenture and this Agreement, and the adoption of
[the Ordinance, and the performance by the City of its
obligations under the aforementioned, do not and will
:.not violate the Act or any court'order by which the City
is bound, and such actions do not and will not consti-
tute a default under any existing resoluion, agreement,
indenture, mortgage, lease, note or other obligation or
instrument to which the City is a party, and no approval
or other action by any governmental authority or agency
is required in connection therewith.
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(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.
PURCHASE, SALE AND DELIVERY OF THE BONDS.
On the basis of, and in reliance upon, the warranties,
representations and agreements of the City contained herein
in the other documents and agreements referred to herein
the terms and conditions herein set
and
and subject to
the Closing Time, the Underwriter agrees to purchase from the
1 City and the City agrees to sell to the Underwriter the Bonds
At Sat4aa8/6/2.75 (qS.01% of the principal amount thereof), plus
of the Bonds to the date of
forth, at
(=rued interest from the
payment and delivery thereof.
The Bonds shall be issued
date
in the Ordinance and
bave the maturities and interest rates and be subject to
todemption as set forth in the Trust indenture.
Payment for the Bonds shall be made by
official bank check or draft, wire transfer or otherwise in
funds immediately available payable to the City on the same
dal'. at the offices of Rose Law Firm, in Little Rock,
the Trust
under and secured as provided
Indenture and the Bonds shall
certified or
Arkansas, at 9:00 a.m., on August 22, 1985, or at such
place and/or date and hour as shall be mutually agreed
between the City and the Underwriter. The date of such
other
upon
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ry and payment is herein called the "Closing Date," and
ur and date of such delivery and payment is herein
the "Closing Time."
g 3. CONDITIONS TO THE UNDERWRITER'S OBLIGATIONS.
ae Underwriter's obligations hereunder shall be subject
due performance by the City of its obligations and
flats to be performed hereunder at or prior to the
1 Time and to the accuracy of and compliance with the
!ntations and warranties of the City contained herein,
:he date hereof and as of the Closing Time, and the
7iter's obligations hereunder are also subject to the
.ng conditions:
(a) A policy of insurance issued by AMBAC
idemnity Corporation, dated the date of Closing, shall
me been delivered, which policy shall guarantee
tyment when due of principal of and interest on the
!ries B Bonds and shall be in substantially the same
!rm
and substance as that attached as Exhibit A.
(b) The City shall have received from Moody's
vvestors Service a rating of "A" on the Series A Bonds
Id from Standard & Poor's Corporation the rating of
AA" on the Series B Bonds and letters evidencing such
ttings shall have been delivered to the Underwriter.
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(c) The Bonds shall have been duly authorized,
executed and delivered in the form heretofore approved
by the Underwriter with only such changes therein as the
Underwriter and the City shall mutually agree upon.
(d) At the Closing Time, the Underwriter shall
receive:
(1) The opinions dated as of the Closing Date
of (A) General Counsel to AMBAC Indemnity Corpora-
tion, in substantially the form and substance as
that attached hereto as Exhibit B; (B) James N.
McCord, City Attorney, in substantially the form
• and substance as that attached hereto as Exhibit C;
(C) Rose Law Firm, a Professional Association, Bond
Counsel, in substantially the form and substance as
that attached hereto as Exhibit D, a supplemental
opinion of Bond Counsel in form and substance as
that attached hereto as Exhibit E and a no arbi-
trage opinion of Bond Counsel in form and substance
as that attached hereto as Exhibit F; and (D) Kutak
Rock & Campbell, Counsel to the Underwriter, in
substantially the form and substance as attached
hereto as Exhibit G;
(2) A certificate, in form and substance
satisfactory to the Underwriter and its counsel, of
the Mayor of the City or any duly authorized
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officer or official of the City satisfactory to the
Underwriter and its counsel, dated as of the Clos-
ing Date, to the effect that: (i) each of the
City's representations contained herein are true
and correct as of the Closing Time; (ii) the City
has authorized, by all action necessary under the
Act, the adoption of the Ordinance and the execu-
tion, delivery and due performance of the Boncth,
the Trust Indenture, the Agreement and the pledging
of the Pledged Revenues; (iii) no litigation is
pending, or to his knowledge threatened, to
restrain or enjoin the issuance or sale of the
Bonds or in any way affecting any authority for or
the validity of the Ordinance, the Trust Indenture,
this Agreement or the pledge of the Pledged Reve-
nues; (iv) the Bonds, as executed by the City, are
in the form or in substantially the form approved
for such execution by appropriate proceedings of
the City; (v) since December 31, 1984 there has not
been any material adverse change in the properties,
financial position or results of operations of the
City, whether or not arising from transactions in
the ordinary course of business, other than such
changes which are disclosed in the Official State-
ment and since such date the City has not entered
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into any
material
Official
transaction or incurred any liability
as to the City except as disclosed in the
Statement; (vi) there are not pending or,
to his knowledge, threatened legal proceedings
which are not disclosed in the Official Statement,
and which are material as to the City, or to which
the City is a party, or of which property of the
City is the subject, or which will adversely affect
the transactions contemplated hereby or by the
Official Statement; (vii) the information contained
in the Official Statement relating to the City, its
organization,
condition and
Ordinance and
properties, operations and financial
the descriptions of the Bonds, the
the Pledged Revenues are true and
correct in all material respects and do not contain
any untrue or incorrect statement of a material
fact and do not omit to state a material fact
necessary in order to make the statements made
therein, in light of the circumstances under which
they were made, not misleading; and (viii) the City
has duly authorized by all necessary action the
signing of the Official Statement by its Mayor;
(3) An arbitrage certificate of the City, in
form satisfactory to Bond Counsel, signed by the
Mayor and Director of Finance of the City;
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(4) A certificate of AMBAC Indemnity
Corporation in substantially the form and substance
as that attached hereto as Exhibit.H;
(5) A letter dated July 9, 1985 addressed to
the City (with copy to the Underwriter) from Arthur
Young & Company, independent certified public
accountants to the City, consenting to the use of
the City's audited financial statements prepared by
them and reference to such firm in the Official
Statement; and
(6) Such additional certificates and other
documents as the Underwriter may reasonably request
to evidence performance of or compliance with the
provisions of this Agreement and the transactions
contemplated hereby and by the Official Statement,
all such certificates and other documents to be
satisfactory in form and substance to the Under-
writer and its counsel.
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N.4. THE UNDERWRITER'S RIGHT TO CANCEL.
he Underwriter shall have the right to cancel its
tion to purchase the Bonds hereunder by'notifying the
n writing or by telegram of its election to do so
n the date hereof and the Closing Time, if at any time
ter and prior to the Closing Time:
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(a) A decision with respect to legislation shall
be reached by a committee of the House of Representa-
tives or the Senate of the Congress of the United States
or legislation shall be favorably reported by such a
committee or be introduced, by amendment or otherwise,
or be enacted by, the House of Representatives or
the Senate, or be recommended to the Congress of the
United States for passage by the President of the United
States, or a decision by a court established under
Article III of the Constitution of the United States, or
a decision by the Tax Court of the United States, shall
be rendered or a ruling, regulation or order of the
Treasury Department of the United States or the Internal
Revenue Service shall be made
purpose or effect of imposing
or any other event shall have
or proposed having the
federal income taxation,
occurred which results in
the imposition of federal income taxation, upon revenues
or other income of the general character to be derived
by the City or upon interest received on obligations of
the general character of the Bonds, or the Bonds, which,
in the Underwriter's opinion, materially adversely
affects the market price of the Bonds;
(b) Any legislation, ordinance, rule or regulation
shall be introduced in, or be enacted by, any govern-
mental body, department or agency in the State of
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Arkansas, or a decision by any court of competent
jurisdiction within the State of Arkansas shall be
rendered which, in the Underwriter's opinion, materially
adversely affects the market price of the Bonds;
(c) Legislation shall be introduced, by amendment
or otherwise, in, or be enacted by the House of Repre-
sentatives or the Senate of the Congress of the United
States, or a decision by a court of the United States
shall be rendered, or a stop order, ruling, regulation
or official statement by, or on behalf of, the Securi-
ties and Exchange Commission or other governmental
agency having jurisdiction of the subject matter shall
be made or proposed, to the effect that the issuance,
offering or sale of obligations of the general character
of the Bonds, or the Bonds as contemplated hereby or by
the Official Statement, is or would be in violation of
any provision of the Securities Act of 1933, as amended
and as then in effect, or 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 with the purpose or effect of otherwise prohibiting
the issuance, offering or sale of obligations of the
general character of the Bonds, or the Bonds as contem-
plated hereby or by the Official Statement;
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(d) Any event shall have occurred, or information
become known, which, in the Underwriter's opinion, makes
untrue, incorrect or misleading in any material respect
any statement or information contained in the Official
Statement (or any Appendices thereto) as originally
circulated, or has the effect that the Official State-
ment (or any Appendices thereto) as originally circu-
lated, contains an untrue, incorrect or misleading
statement of a material fact or omits to state a mate-
rial fact necessary to be stated therein in order to
make the statements made therein, in light of the cir-
cumstances under which they were made, not misleading;
(e) Additional material restrictions not in force
as of the date hereof shall have been imposed upon
trading in securities generally by any governmental
authority or by any national securities exchange;
(f) The New York Stock Exchange or other national
securities exchange, or any govefnmental authority,
shall impose, as to the Bonds, or obligations of the
general character of the Bonds, any material restric-
tions not now in force, or increase materially those now
in force, with respect to the extension of credit by, or
the charge to the net capital requirements of, the
Underwriter;
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(g) A general banking moratorium shall have been
established by federal or Arkansas authorities;
(h) A default shall have occurred with respect to
the obligations of, or proceedings have been instituted
under, the federal bankruptcy laws or any similar state
laws by or against any state of the United States or any
city located in the United States having a population in
excess of one million persons or any entity issuing
obligations on behalf of such a city or state which, in
the Underwriter's opinion, materially adversely affects
the market price of the Bonds;
• (i) Any rating of the Bonds shall have been down-
graded or withdrawn by a national rating service; or
(3) A war involving the United States shall have
been declared, or any conflict involving the armed
forces of the United States shall have escalated, or any
other national emergency relating to the effective
operation of government or the financial community shall
have occurred, which, in the Underwriter's opinion,
materially adversely affects the market price of the
Bonds.
ECTION 5. CONDITIONS OF OBLIGATIONS OF THE CITY.
The obligations of the City hereunder are subject to the
aderwriter's performance of its obligations hereunder, and
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Jim further condition that at the Closing Time the Under-
witer shall receive the opinions described in Section 3(d)
atreof.
SECTION 6. INDEMNIFICATION.
To the extent permitted by law, the City agrees to
indemnify and hold harmless the Underwriter, any member,
)fficer, official or employee of the Underwriter, and each
Arson, if any, who controls the Underwriter within the
soaning of Section 15 of the Securities Act of 1933, as
mended (collectively the "Indemnified Parties"), against any
Ind all losses, claims, damages, liabilities or expenses
thatsoever caused.by any untrue statement or misleading
statement or allegedly misleading statement of a material
tact contained in the Official Statement or caused by any
Smission or alleged omission from the Official Statement of
Any material fact necessary in order to make the statements
aade therein, in light of the circumstances under which they
were made, not misleading, except insofar as such losses,
Claims, damages, liabilities or expenses are caused by any
ouch untrue or misleading statement or omission or allegedly
untrue or misleading statement or omission in the information
contained under the caption "LEGAL MATTERS --Tax Exemption."
In case any action shall be brought against one or more
Of the Indemnified Parties based upon the Official Statement
and n
respect of which indemnity may be sought against the
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ty, the Indemnified Parties shall promptly notify the City
writing, and, to the extent permitted by law, the City
all.promptlY assume the defense thereof, including the
ployment of counsel, the payment of all expenses and the
ght to negotiate and consent to settlement. Any one or
re of the Indemnified Parties shall have the right to
ploy separate counsel in any such action and to participate
the defense thereof, but the fees and expenses of such
unsel shall be at the expense of such Indemnfied Party or
demnified Parties unless employment of such counsel has
en specifically authorized by the City. The City shall not
liable for any settlement of any such action effected
thout its consent by any of the Indemnified Parties, but if
ttled with the consent of the City or if there be a final
tgment for the plaintiff in any such action against the
ty or any of the Indemnified Parties, with or without the
'arment of the City, the City agrees to indemnify and hold
umless the Indemnified Parties to the extent provided in
tie Agreement and to the extent permitted
=ION 7. REPRESENTATIONS AND AGREEMENTS
DELIVERY.
' All representations and agreements of the City shall
main operative and in full force and effect, regardless of
lY investigations made by or on the Underwriter's behalf,
Id shall survive delivery of the Bonds to the Underwriter.
by law.
TO :SURVIVE
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SECTION 8. PAYMENT OF EXPENSES.
If the Underwriter accepts delivery of and pays for the
lands as set forth herein, all expenses and costs to effect
the authorization, preparation, issuance, delivery and sale
of the Bonds (including, without limitation, the fees and
disbursements of Rose Law Firm, rating agency fees and
expenses incurred in connection therewith and the expenses
and costs for the preparation, printing, photocopying, exe-
eUtion and delivery of the Bonds, the Official Statement, the
Ordinance and all other agreements and documents contemplated
the proceeds of the Bonds.
not accept delivery of and pays
hereby) shall be paid out of
If the Underwriter does
FAS
for the Bonds as set forth herein, all
effect the authorization, preparation,
expenses and costs to
issuance, delivery and
gale of the Bonds (including, without limitation, the dis-
-bursements of Rose Law Firm, rating agency fees and the
',,,)11xpenses and costs
for the preparation, printing, photocopy-
ing, execution and delivery of the Bodds, the Official State -
Plant, the Ordinance and all other agreements and documents
contemplated
Whether
pays for the
thereby) shall be paid by the City.
or not the Underwriter accepts delivery of and
Bonds as set forth herein, the Underwriter shall
pay all costs and disbursements incurred by it in connection
With the transaction including, without limitation, fees and
expenses of counsel for the Underwriter.
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SECTION 9•
NOTICE.
Any notice or other communication to be given to the
t.
City under this Agreement may be given by mailing or deliv-
eying the same in writing to the Director of Finance, City of
Fayetteville, City Hall, Fayetteville, Arkansas 72702,
Attention: Mr. Scott Linebaugh; and any notice or other
communication to be given to the Underwriter under this
Agreement may be given by delivering the same in writing to
A. G. Edwards & Sons, Inc., Public Finance Department, One
North Jefferson, St. Louis, Missouri 63103, Attention:
Mr. Charles H. Devers.
SECTION 10. APPLICABLE LAW; NONASSIGNABILITY.
This Agreement shall be governed by the laws of the
State of Arkansas and shall not be assigned by the City.
SECTION 11. EXECUTION OF COUNTERPARTS.
This Agreement may be executed in several counterparts,
Iach of which shall be regarded as an original and all of
which shall constitute one and the sathe document.
'SECTION 12. SEVERABILITY.
In the event any provision of this Agreement shall be
held invalid or unenforceable by any court of competent
F
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a�jurisdiction, such holding shall not invalidate or render
,'unenforceable any other provision hereof.
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SEAL] : CITY OF FAYETTEVILLE, ARKANSAS
.,
;Attest:
By tii�!S nn_.n ___' d24I_?4CA, _/
Assistant ayor/
y lerk
j, A. G. EDWARDS & SONS, INC.
;4 n
6
[,R
By
en.
r
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fl. wisconsln SJ2D1
— Municipal Bond Insurance
New York. New York 10004
Policy Number.
Premium:
AMDAC INDEMNITY CORPORATION
(AMBAC) -
A Stock Insurance Company
tlr payment of the premium and subject to the terms of this Policy hereby agrees to pay to the United Sttes Trust
ark, as tutee. or Its successor(th ' "Insurance Trustee" L for the benefit of Bondholders, that portion of the principal
r abovedescribed debt obligatians (thy' Scnda'D which shall become Due for Payment but shall be unpaid by reason
tM Issuer. a
1 itch payments to the Insurance Trustee within S days following n,
Son and surrender to the Insurance Trustee of such unpaid Bonds
tiny advent claim. the Insurance Trustee will disburse to the a
fat Payment but is unpaid Upon such disbursement, AMBAC
I be fully subrogated to all of the Bondholder, rights to n
ViA, .:iJ:icLI\L1
of Nonpayment Upon a Boric.
Otis, uncanceled and in bearer
count of principal and interest
of the surrendered Bonds and
LWdtknor their assigns. the In.
othe Insurance Trustee of
rm satisfactory to the In-
s to permit ownership.of
a form whereby interest
Bondholder as aforesaid onh upon
ment of interest on the Bond and
Insurance Tnntee. duly executed by the
AMBAC all rights under such Bond to receive
subrogated to all of the Bondholders' rights to
hssn I ns pe n o er t t>I,4r who, at the time of Non
Ntsinn a '• o C w n Y9r a to the principal of Bonds. rs whrrn the stated maturity date or a
Ann d e p 'iCbI a ed si in ad installment has been reached and does not refer to any earlier
siam d a for n other than by a lication of
dvanc a - tu Bo rettestad sulking fund installments)of int. ac. d, txh. et a to interest on the Bonds, is when the stated date for payment interest
M npi ire' me th lure of saver to have provided wffirient funds to the paving agent for pavn+ent it
A we Due for Payment
Mtc'etabk. o s Policy i not refundable fm any reason. includin does not rn re I t coca of any redemption R payment of the Bonds prior to
Oct Of art nor gowp, Prepayment or acceleration premium which at any time may
ainst-risk other than Nonpayment.
AMBAC has caused than Policy to he affixed with a facsimile of it% ?orporare seal and to be signed by its duty
a facsimile to become effective as its original seat and signatures and binding upon AMBAC by virtue of the counter-
�n'onzed representative. 0��0
o i a'sEALfl
President
Ui
g0s�'- • fa Secretary
Authorized Representative
COMPANY OF NEW YORK acknowledges that it has agreed to perform the duties of Insurance Tnastee urt: y
.rn
EXHIBIT B
[AMBAC Letterhead]
t
.:.
ht..:
August 22, 1985
i]
'c
I s
City of Fayetteville
• City Hall• AR 72702
Fayetteville,
L... nose Law Firm
;z'?120 East Fourth Street
4..: ,
";Little Rock, AR 72201
Kutak Rock & Campbell
1650 Farnam Street
Omaha, NE 68102
A. G. Edwards & Sons,
One North Jefferson
St. Louis, MO 63103
$11,725,000 City of Fayetteville, Arkansas
Subordinated Sales andBUse
Capital Imp
onds
1985 series B
Inc.
„� oentiemen:
a
requested of the undersigned,
This opinion has been
g Vice President and AssistWisconsinal stocknsel of insuran eBcompany
: Indemnity Corporation, a
41. AMBAC Indemnity"), in connection with the issuanceand
th
w::delivery by the City of Fayetteville (e "Issuer")
'1 $11,725,000 in aggregate principal amount of its Subordinated
rovement Bonds, 1985 Series B,
Sales and Use Tax Capital Imp „ and the issuance by
dated August 15, 1985 (the Bonds"),
Ad1SAC Indemnity of a certain Municipal Bond Insurance Policy,
effective as of the date hereof (the "Policy"), providing for
the payment of that portion of the principal of and interest
payment but shall be
on the Bonds which shall become due for p Ym
Unpaid by reason of nonpayment by the Issuer.
In connection with the issuance o£ the Policy, I have
examined such statutes, documents and proceedings as I have
• Considered necessary or appropriate in the circumstances to
tender the following opinion, including, without limiting the
generality of the foregoing, certain statements contained in
the Official Statement of
relating to the Bonds (the
dix C, entitled "INSURANCE
the Issuer, dated July 18, 1985,
"Official Statement") under Appen-
ON THE 1985 SERIES B BONDS."
In reliance upon the foregoing, I am of the opinion that:
1. AMBAC Indemnity is a stock insurance company
duly organized and validly existing under the laws of
the State of Wisconsin and is duly qualified to do
business in the State of Texas.
2. AMBAC Indemnity has full corporate power and
authority to execute and deliver the Policy, and the
Policy has been duly authorized, executed and delivered
by AMBAC Indemnity and constitutes a legal, valid and
binding obligation of AMBAC Indemnity enforceable in
accordance with its terms. The execution and delivery
by AMBAC Indemnity of the Policy will not, and the
consummation of the transactions contemplated thereby
and the satisfaction of the terms thereof will not,
conflict with or result in a breach of any of the terms,
conditions or provisions of the Charter or Bylaws of
AMBAC Indemnity, any decree, order, statute, rule or
governmental regulation applicable to AMBAC Indemnity or
any restriction contained in any contract, agreement or
instrument to which AMBAC Indemnity is a party or by
which it is bound or constitute a default under any of
the foregoing.
3. The Policy guarantees the full and complete
payment of the principal of and all interest on the
Bonds as such payments shall become due.
4. All proceedings Legally required for the
issuance of the Policy have been taken by AMBAC Indem-
nity and all licenses, orders, consents or other author-
izations or approvals of any governmental boards or
bodies legally required for the validity of the Policy
have been obtained.
S. The statements contained in the Official
Statement under Appendix C, entitled "INSURANCE ON THE
1985 SERIES B BONDS," insofar as such statements con-
stitute summaries of the matters referred to therein,
accurately reflect and fairly present the information
purported to be shown and, insofar as such statements
purport to describe AMBAC Indemnity, fairly and
accurately describe AMBAC Indemnity.
B-2
In rendering the opinion hereinabove set forth in para-
rraph 2 I wish to advise you that the enforceability (but
pt the validity) of the Policy may be limited by any appli-
:able bankruptcy, insolvency or other similar law or enact -
lent now or hereafter enacted affecting the enforcement of
Creditors' rights.
Fr, Very truly yours,
#E•
13
4 -It
I
s B-3
f w
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4
EXHIBIT C
[Letterhead of Counsel to the City]
August 22, 1985
SI
.;City of Fayetteville
City Hall
`.;,.fayetteville, AR 72702
',A. G. Edwards & Sons, Inc.
'`:Otto North Jefferson
.Sftt. Louis, MO 63103
$21,725,000
City of Fayetteville, Arkansas
Sales and Use Tax Capital Improvement Bonds
$10,000,000 1985 Series A
Subordinated Sales and Use Tax Capital
Improvement Bonds
$11,725,000 1985 Series B
I am counsel to the City of Fayetteville, Arkansas (the
•City") and have acted in that capacity, in connection with
tic issuance and sale by the City of its $10,000,000 Sales
and Use Tax Capital Improvement Bonds, 1985 Series A and
$11,725,000 Subordinated Sales and Use Tax Capital Improve-
Slnt Bonds, 1985 Series B (the "Bonds") by the` City, which
Bonds are being sold pursuant to a Bond Purchase Agreement
fitted July 18, 1985 (the "Bond Purchase Agreement") between
A. C. Edwards .& Sons, Inc. (the "Underwriter") and the City.
The terms defined in this Bond Purchase Agreement are used in
thi$ letter with the meaning assigned to them in the Bond
ltttchase Agreement.
In this connection, I have reviewed certain documents
respect to the Bonds, and such records, certificates and
11
-
J
her documents as I have considered necessary or appropriate
r the purposes of this opinion, including the Ordinances
opted by the City on February 5, 1985 and on July 20, 1985
ollectively, the "Ordinance") and the Trust Indenture
tween the District and Mcllroy Bank & Trust; and the final
'facial Statement dated July 18, 1985 with respect to the
ids and a closing certificate of the District. Based on
,ch review and such other considerations of law and fact as
believe to be relevant, I am of the opinion that:
1. The City has been properly formed and is
_ K�rf5
"?s ,"° validly existing as a political subdivision of the State
of Arkansas with full power and authority to adopt the
Ordinance, to execute and deliver the Bonds, the Trust
Indenture, the Official Statement and the Bond Purchase
Y " Agreement.
ke 2. The adoption by the City of the Ordinance, the
issuance of the Bonds, the execution and delivery of the
Trust Indenture and the Bond Purchase Agreement and the
�...,� performance of the City's obligations thereunder do not
,. .� and will not result in a violation of any provision of,
y tz or in default under, any other resolution, any agreement
. .•o or any other instrument to which the City is a party or
y*;w, by which it or its properties are bound.
to
3. Except as may be described in the Official
Statement, the City is not in violation of any provision
of any agreement or other instrument the violation of or
default under which would materially and adversely
affect the business, properties, assets, liabilities or
conditions (financial or other) of the City.
4. Except as may be described in the Official
• Statement, there are no legal or' governmental actions,
proceedings, inquiries or investigations pending or
threatened by governmental authorities or to which the
City is a party or of which any property of the City is
subject, except as described in the Official Statement,
which, if determined adversely, would individually or in
the aggregate (i) have a material adverse effect on the
financial position or results of operations of the City,
(ii) materially and adversely affect the validity or the
enforceability of the Bonds, the Trust Indenture or the
Bond Purchase Agreement, (iii) otherwise materially or
adversely affect the ability of the City to comply with
its obligations on the Bonds or under the Ordinance, the
Trust Indenture or the Bond Purchase Agreement, or
C-2
j
materially and adversely affect the transactions con-
templated by the Official Statement to be engaged in by
the City.
4 5. The aggregate amount which may reasonably be
expected to be recovered in litigation pending or
.1 threatened against the City, taking into account
s: •insurance coverage, is not material.
We hereby consent to the references made to us in the
,,Official Statement.
Respectfully yours,
ill
C-3
EXHIBIT D
(Letterhead of Rose Law Firm]
August 22, 1985
Ncl1roy Bank & Trust, as Trustee
Eayetteville, AR
G. Edwards & Sons, Inc.
One North Jefferson
Ct. Louis, MO 63103
k
Ladies and Gentlemen:
We have examined a certified copy of proceedings
City of Fayetteville, Arkansas (the "City") and other
cents pertaining to the issuance by the City of its
$10.000,000 Sales and Use Tax Capital Improvement Bonds, 1985
Series A (the "Series A Bonds") and its $11,725,000 Subordi-
6ated Sales and Use Tax Capital Improvement Bonds, 1985
Caries B (the "Series B Bonds") (collectively, the "Bonds").
The Bonds are being issued for the purpose of financing the
Acquisition, construction and equipping of improvements to
the City's wastewater collection and treatment facilities
(the "Project"), funding certain reserves, paying the premium
for a policy of municipal bond insurance issued by AMBAC
Indemnity Corporation (the "Insurance. Policy") and paying
'Costs of issuance.
The Bonds are issued under the authority of Amendment 62
to the Constitution of the State of Arkansas, as implemented
by Act 871 of the General Assembly of the State of Arkansas
for the year 1985 (the "Act"), pursuant to Ordinance
Of the City adopted July 18, 1985 and a Trust Indenture dated
ASof August 15, 1985 (the "Indenture") between the City and
McIlroy Bank & Trust, of Fayetteville, Arkansas, as Trustee
.(the "Trustee"). In accordance with the Act, and pursuant to
Ordinance No. 3065 adopted February 5, 1985, the City has
levied a one percent (1%) local sales and use tax (the "Sales
_1") to provide funds for the repayment of the Bonds.
of the
docu-
2• 4.
The Bonds are being issued in fully registered form, in
Ldenominations of $5,000 each or any integral multiple
thereof. The Bonds are initially dated August 15, 1985 and
mature serially on August 15 in each of the years 1986 to
1997, inclusive. Interest is payable on the Bonds from their
iodate semiannually on each February 15 and August 15, commenc-
ing February 15, 1986, by check or draft mailed by the Trus-
tee to the registered owners thereof.
The Bonds are subject to redemption prior to maturity as
poet forth in the Indenture and the Bonds.
The City is authorized to issue additional series of
@ales and use tax capital improvement bonds in aggregate
principal amount, including the Bonds, not to exceed
$28,000,000 upon the terms and conditions set forth in the
Indenture. Such additional series of bonds, when and if
issued, will be subordinate to the Series A Bonds but will
issued on parity with the Series B Bonds and shall be enti-
tled to the equal benefit, protection and security of the
provisions, covenants and agreements of the Indenture.
�,.
The Series B Bonds are entitled to the benefits
Insurance Policy. As to matters pertaining thereto,
'once is made to such policy, the original of which is
at the principal corporate office of the Trustee.
Based on the
}
above, we are of the opinion that:
M
of the
refer -
on file
1. The Bonds have been duly authorized and issued
by the City and are the valid, binding special obliga-
tions of the City in accordance with their terms.
2. The Series A Bonds are, secured by an irrevo-
cable pledge of and first lien oft the proceeds of the
Sales Tax as provided in the Indenture. The Series B
Bonds are secured by an irrevocable pledge of and lien
on the proceeds of the Sales Tax, subordinate only to
the lien securing the Series A -Bonds, as provided by the
Indenture. The Bonds are not secured by a lien on or
security interest in the Project or the revenues thereof.
3. The Indenture has been duly executed and
delivered by the City to the Trustee and is legally
binding and enforceable in accordance with its terms.
D-2
4.
4. Interest on the Bonds is not includable in
federal gross income and is therefore exempt from
federal income taxation under existing laws, regula-
tions, judicial decisions and rulings. No opinion is
expressed as to the effect of any pending or future
federal legislation.
5. The Bonds and interest thereon are exempt from
all Arkansas state, county and municipal taxation under
existing laws.
With regard to matters expressed in this opinion, please
advised that the enforceability of rights and remedies
h respect to the Bonds may be limited by bankruptcy,
atorium, insolvency or other laws affecting creditors'
its or remedies heretofore or hereafter enacted and their
orcement may also be subject to the exercise of judicial
eretion in appropriate cases.
Very truly yours,
11
D-3
EXHIBIT E
[Letterhead of Rose Law Firm]
August 22, 1985
A.O. Edwards & Sons, Inc.
One North Jefferson
It. Louis, MO 63103
s- �-
$21,725,000
City of Fayetteville, Arkansas
• Sales and.Use Tax Capital Improvement Bonds
$10,000,000 1985 Series A
fix4*1;
Subordinated Sales and Use Tax Capital
Improvement Bonds
$11,725,000 1985 Series B
.
and Gentlemen:
I:1a I On the date hereof, we rendered to the City of 11
.60tteville (the "City") an opinion approving the validity
4-) t ty's $10,000,000 Sales and Use Tax Capital Improvement
hIn
do, 1985 Series A and its $11,725,000 Subordinated Sales
1'AAd Use Tax Capital Improvement Bonds,. 1985 Series B
'ft011ectively, the "Bonds") . You are authorized to rely upon
6ild opinion as if the same were addressed to you.
In connection with the issuance of the Bonds, we have
dined (a) the Ordinances adopted by the City on
• Mary 5, 1985 and July 18, 1985 authorizing the issuance
Adtnthe Bonds (collectively, the "Ordinance"), (b) the Trust
o
dated as of August 15, 1985 (the "Indenture")
ten the City and Mcllroy Bank & Trust (the "Trustee"), -_�? executed Bond No. R-1 of said issue of Bonds and (d) such
'lest opinions, documents, certificates and letters as we
relevant and necessary in -rendering this opinion.
'� prom such examination, we are of the opinion that:
Ai
(1) the Bonds
uirements of the
the Indenture is
st Indenture Act
are not subject to the registration
Securities Act of 1933, as amended,
exempt from qualification under the
of 1939, as amended; and
(2) the descriptions contained in the Official
tement dated July 18, 1985 relating to the Bonds (the
ficial Statement") under the captions "THE BONDS" and
CURITY FOR THE BONDS" and in "APPENDIX B" have been
pared or reviewed by such counsel and such present a
r and accurate summary of such provisions; and the
tements of law made in the Official Statement under
caption "LEGAL MATTERS --Tax Exemption" have been
pared or reviewed by such counsel and are fair and
urate descriptions thereof.
Very truly yours,
E-2
EXHIBIT F
[Letterhead of Rose Law Firm]
August 22, 1985
NCllroy Bank & Trust, as Trustee
Fayetteville, AR
A. C. Edwards & Sons, Inc.
One North Jefferson
St. Louis, MO 63103
$21,725,000
City of Fayetteville, Arkansas
} = Sales and Use Tax Capital Improvement Bonds
.�4 $10,000,000 1985 Series A
Subordinated Sales and Use Tax Capital
Improvement Bonds
$11,725,000 1985 Series B
•.Ldies and Gentlemen:
i�yhS:m
r�{i.a,zY"
'`?.. We have served as Bond Counsel to the City of
Fayetteville, Arkansas (the "City") in connection with the
hhouance of the referenced bonds (the "Bonds"). In this
Connection, we have examined the Arbitrage Certificate
OEOcuted by the Mayor and the Director of Finance of the City
Of even date (the "Arbitrage Certificate").
r1a
(ta Based on our examination of law and overall familiarity
!With the transaction, we are of the opinion that the facts,
.Sttimates, circumstances and expectations set forth in the
Atbitrage Certificate are sufficient to satisfy the criteria
:ceder Section 103(c) of the Internal Revenue Code of 1954, as
oflded 'tt10 (the CSections land n
income tax regulations pursuant thereto, as amended, to
apport the conclusion that the Bonds will not be arbitrage
within the meaning of Section 103(c) of the Code. No
Otters have come to our attention which make unreasonable or
;Aeerrect the representations made in the Arbitrage
rificate.
Very truly yours,
fr
Th
121
Jp •e
EXHIBIT G
(Letterhead of Kutak Rock & Campbell]
August 22, 1985
)fP
f4V
• i
4
A. G. Edwards & Sons, Inc.
One North Jefferson Avenue
.St. Louis, MO 63103
• $21,725,000
City of Fayetteville, Arkansas
• Sales and Use Tax Capital Improvement Bonds
$10,000,000 1985 Series A
Subordinated Sales and Use Tax Capital
ry ` Improvement Bonds
��- $11,725,000 1985 Series B
This letter is being delivered to you pursuant to the
:"Bond Purchase Agreement dated July 18, 1985 (the.
"Bond
purchase Agreement") between A. G. Edwards & Sons, Inc. and
tha City of Fayetteville (the "City") relating to the
leauance and sale by the City of its $10,000,000 Sales and
Use Tax Capital Improvement Bonds, 1985 Series A and its
*11,725,000 Subordinated Sales and Use Tax Capital Improve -
bent Bonds (collectively, the "Bonds"). The terms defined in
the Bond Purchase Agreement are used in this letter with the
beaning assigned to them in the Bond Purchase Agreement.
We have acted as your special.counsel in connection with
the issuance and sale of the Bonds to you, and in that
Capacity have examined an executed counterpart of the Bond
purchase Agreement, the Trust Indenture and the Ordinance.
We have also examined the originals or copies, certified or
Otherwise identified to our satisfaction, of such other
documents, records and other instruments as we have deemed
pecessary or advisable for purposes of this letter.
In connection with the preparation of the Preliminary
Official Statement dated July 9, 1985 and the final Offi-
cial Statement dated July 18, 1985 (collectively, the
"Official Statement"), we have generally reviewed information
furnished to us by, and have participated in conferences
with, representatives of the City, its counsel, independent
certified public accountants, representatives of Arthur Young
& Company, your representatives and Rose Law Firm, Bond
Counsel. We have also reviewed other records relating to the
authorization, issuance and sale of the Bonds and have relied
upon certificates of officials of the City and of public.
officials and upon written opinions and letters received from
the City, its attorneys and independent certified public
accountants.
We have considered the information contained in the
Official Statement and, based upon our review and discussions
and in reliance upon the accuracy of the information con-
tained in the aforementioned certificates, written opinions
and letters, nothing has come to our attention which leads us
to believe that the Official Statement contains any untrue
statement of a material fact or omits to state a material
fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not
misleading. We express no opinion as to the statements con-
tained in. the Official Statement in Appendix B and Appen-
dix C, nor do we express an opinion as to the financial
statements included as Appendix A to the Official Statement,
and we express no opinion as to any other financial or
statistical data included in the Official Statement or the
Appendices thereto.
Further, we are of the opinion that the offer, sale and
delivery of the Bonds under the circumstances contemplated do
not require registration of the Bonds under the Securities
Act of 1933, as amended, and do not require qualification of
the Indenture under the Trust Indenture Act of 1939, as
amended.
Very truly yours,
G-2
EXHIBIT H
[Letterhead of AMBACI
August 22, 1985
City of Fayetteville
City Hall
Fayetteville, AR 72702
Rose Law Firm, a Professional Association
120 East Fourth Street
Little Rock, AR 72201
tt21, 725, 000
City of Fayetteville, Arkansas
Sales and Use Tax Capital Improvement Bonds
$10,000,000 1985 Series A
Subordinated Sales and Use Tax Capital
Improvement Bonds
$11,725,000 1985 Series B
Ladies and Gentlemen:
We provide this letter in connection with the issuance
by the City of Fayetteville, Arkansas .(the "City") of the
above referenced bonds (the "Bonds"). 'As you know, we have
issued a policy of municipal bond insurance (the "Bond
Insurance") which guarantees the payment of principal of and
interest on the 1985 Series B Bonds. We note that the City
has levied a one percent (1%) local sales and use tax (the
"Sales Tax") to provide funds for the repayment of the Bonds
and that the Bonds are subject to redemption on or after
August 15, 1990 (the "Call Date") from accumulated surplus
Sales Tax receipts.
We hereby certify that:
(1) We are generally familiar with the facts and
circumstances surrounding the issuance of the Bonds.
(2) The amount to be maintained in the Series B
Account in the Debt Service Reserve Fund created in
connection with the issuance of the Bonds is, before
August 15, 1994, an amount equal to the annual principal
and interest requirements on the Series B Bonds for the
succeeding bond year and is, on or after August 15,
1994, an amount equal to the lesser of (i) one million
seven hundred fifty-two thousand dollars ($1,752,000) or
(ii) average annual principal and interest require-
ments on the Series B Bonds for all succeeding bond
years (the "Required Level").
(3) The debt service on the Series B Bonds has
been scheduled so that expected Sales Tax receipts,
assuming no growth in collections, will generally equal
120% of debt service on the Bonds during each year.
(4) We have required funding of the Series A
Account in the Debt Service Reserve Fund to the Required
Level. In addition, we have required that expected
Sales Tax receipts, assuming no growth in collections,
be equal to at least 1.2 times debt service on the
Bonds. These requirements are based upon similar
special tax bond issues that have been sold within the
last year, past tax collection experience by the City,
and our internal requirements for acceptable coverage
and reserve requirements.
(5) Based upon these considerations, it is our
opinion that the amount to be maintained in the Series A
Account in the Debt Service Reserve Fund is reasonably
required. It is our further opinion that the City has
scheduled as much debt service on the Bonds as is
practicable prior to the Call Date.
(6) Defined terms used herein have the meanings
ascribed in the Indenture or Official Statement prepared
for use in connection with the issuance of the Bonds, as
applicable.
Very truly yours.,
AMBAC INDEMNITY CORPORATION
By
Authorized Signature
H-2