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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. • 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 4 - 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 r ;1 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, -2- 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 -3- 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. -4- (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. -5- (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. -6- 11 12 13 1 1 (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 1 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. -8- (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 -9- 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 -10- 11 • ty 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; -11- 11 12 13 14 16 (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. • 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: -12- 1! (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 -13- 11 .•f • 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; -14- Col _ • (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; -15- • • (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 -16- • 11 •.• 1 12 13 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 -17- • 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 -18- • • I 11 1 a i 12 c 13 14 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. •