11329RESOLUTION NO. 11,329
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A RESOLUTION IMPLEMENTING THE TERMS OF
ORDINANCE NO. 18,714, ADOPTED JULY 2, 2002,
BEING AN ORDINANCE AUTHORIZING THE ISSUANCE
AND SALE OF CAPITAL IMPROVEMENT REVENUE BONDS,
AND FOR RELATED PURPOSES.
WHEREAS, the Board of Directors of the City has, on
July 2, 2002, adopted Ordinance No. 18,714 (the "Basic Ordinance ") ,
for the purpose of authorizing and securing the payment of the
City's Capital Improvement Junior Lien Revenue Bonds, Series 2002,
in the principal amount of $3,630,000 (the "Series 2002 Bonds "),
and
WHEREAS, as provided in the Basic Ordinance, the Series
2002 Bonds have been offered for sale and the details of the Series
2002 Bonds are now available and have been presented to the City;
and
WHEREAS, the details and terms of the Series 2002 Bonds,
based upon the offering of the Series 2002 Bonds, are in the
interest of the City; and
WHEREAS, this Resolution implements the Basic Ordinance
and the term "Authorizing Ordinance" herein refers to the Basic
Ordinance, together with this Resolution; and
WHEREAS, capitalized terms in this Resolution, unless
otherwise defined, have the meanings assigned in the Basic
Ordinance;
NOW THEREFORE, BE IT RESOLVED by the Board of Directors
of the City of Little Rock, Arkansas.
Section 1. As provided in the Basic Ordinance,
particularly Section 5 thereof, the Series 2002 Bonds shall mature,
on October 1 of each year, and bear interest, payable on each
April 1 and October 1, commencing April 1, 2003, as follows:
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Year
(October 1) Principal Amount Interest Rate
2003
$140,000
3.50
2004
180,000
3.50
2005
185,000
3.50
2006
190,000
3.50
2007
195,000
3.50
2008
200,000
3.50
2009
210,000
4.00
2010
215,000
4.00
2011
225,000
4.00
2012
235,000
4.00
2013
245,000
4.15
2014
255,000
4.25
2015
270,000
4.35
2016
280,000
4.45
2017
295,000
4.55
2018
310,000
4.65
The Series 2002 Bonds shall be subject to redemption prior to
maturity at a price equal to the principal amount being redeemed
plus accrued interest (a) from surplus proceeds as set forth in the
Basic Ordinance and (b) at the option of the City, as set forth in
the Basic Ordinance, in whole at any time and in part (in inverse
order of maturity and by lot within a maturity) on any interest
payment date on and after October 1, 2012,
The Trustee for the Series 2002 Bonds, which shall also
be the paying agent and registrar, shall be Metropolitan National
Bank, Little Rock, Arkansas.
Section 2. In accordance with Section 11 of the Basic
Ordinance, there shall be established, from the proceeds of the
Series 2002 Bonds, a Debt Service Reserve in an amount equal to
$363,000, which is hereby found to be the "Required Level" provided
for in the Basic Ordinance. The Debt Service Reserve will be
constituted of a Surety Bond issued by Ambac Assurance Corporation
( "Ambac Assurance" or "Ambac ").
Section 3. For the purpose of Section 19(f) of the Basic
Ordinance, the "Bond Year" is determined to be the twelve -month
period ending on April 30.
Section 4. For the purpose of Section 4 of the Basic
Ordinance, the "Bond Insurer" for the Series 2002 Bonds is Ambac
Assurance, the "Bond Insurance Policy" is the Financial Guaranty
Insurance Policy of Ambac Assurance; and, in accordance with
Section 5 of the Basic Ordinance, the Bond Insurer is accorded, and
is recognized to have the rights set forth as follows:
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A. Consent of Ambac Assurance. Any provision of the
Authorizing Ordinance expressly recognizing or granting rights in
or to Ambac Assurance may not be amended in any manner which
affects the rights of Ambac Assurance hereunder without the prior
written consent of Ambac Assurance.
B. Consent of Ambac Assurance in Addition to Holder
Consent. Unless otherwise provided in this Section, Ambac
Assurance's consent shall be required in addition to Bondholder
consent, when required, for the following purposes: (i) execution
and delivery of any amendment, supplement or change to or
modification of the Authorizing Ordinance; (ii) removal of the
Trustee or Paying Agent and selection and appointment of any
successor trustee or payment agent; and (iii) initiation or
approval of any action not described in (i) or (ii) above which
requires Holder consent.
C. Consent of Ambac Assurance in the Event of
Insolvency. Any reorganization or liquidation plan with respect to
the City must be acceptable to Ambac Assurance. In the event of
any reorganization or liquidation, Ambac Assurance shall have the
right to vote on behalf of all Holders who hold Ambac Assurance -
insured Bonds absent a default by Ambac Assurance under the
applicable Bond Insurance Policy insuring such Bonds.
D. Consent of Ambac Assurance Upon Default. Any in the
Authorizing Ordinance to the contrary notwithstanding, upon the
occurrence and continuance of an event of default as defined
herein, Ambac Assurance shall be entitled to control and direct the
enforcement of all rights and remedies granted to the Holders or
the Trustee for the benefit of the Holders under the Authorizing
Ordinance.
E. Notices to be Sent to the Attention of the
Surveillance Department:
1. While the Bond Insurance Policy is in effect,
the Trustee shall furnish to Ambac Assurance (to the
attention of the Surveillance Department, unless
otherwise indicated):
(a) as soon as practicable after the
filing thereof, a copy of any financial
statement of the City and a copy of any audit
and annual report of the City;
(b) such additional information it may
reasonably request.
2. A copy of any notice to be given to the
registered owners of the Bonds, including, without
limitation, notice of any redemption of or defeasance of
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Bonds, and any certificate rendered pursuant to the
Authorizing Ordinance relating to the securing for the
Bonds.
3. To the extent that the City has entered into a
continuing disclosure agreement with respect to the
Bonds, Ambac Assurance shall be included as a party to be
notified.
F. Notices to be Sent to the Attention of the General
Counsel Office:
1. The Trustee shall notify Ambac Assurance of any
failure of the City to provide relevant notices,
certificates, etc.
2. Notwithstanding any other provision of the
Authorizing Ordinance, the City shall immediately notify
Ambac Assurance if at any time there are insufficient
moneys to make any payments of principal and /or interest
as required and immediately upon the occurrence of any
event of default under the Authorizing Ordinance.
G. Other Information to be Given to Ambac Assurance.
The City will permit Ambac Assurance to discuss the affairs,
finances and accounts of the City or any information Ambac
Assurance may reasonably request regarding the security for the
Bonds with appropriate officers of the City. The City will permit
Ambac Assurance to have access to the Improvements and have access
to and to make copies of all books and records relating to the
Bonds at any reasonable time.
H. Defeasance. Notwithstanding anything in Section 15
of the Basic Ordinance to the Contrary, in the event that the
principal and /or interest due on the Series 2002 Bonds shall be
paid by Ambac Assurance pursuant to its Financial Guaranty
Insurance Policy, the Series 2002 Bonds shall remain outstanding
for all purposes, not be defeased or otherwise satisfied and not be
considered paid by the City, and the assignment and pledge of the
Pledged Revenues and all covenants, agreements and other
obligations of the City to the registered owners shall continue to
exist and shall run to the benefit of Ambac Assurance, and Ambac
Assurance shall be subrogated to the rights of such registered
owners.
I. Payment Procedure Pursuant to the Financial Guaranty
Insurance Policy. As long as the Bon Insurance shall be in full
force and effect, the City, the Trustee and any Paying Agent agree
to comply with the following provisions:
(1) At least one (1) day prior to all interest
payment dates the Trustee will determine whether there
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will be sufficient funds in the Bond Fund to pay the
principal of or interest on the Series 2002 Bonds on such
interest payment date. If the Trustee or Paying Agent,
if any, determines that there will be insufficient funds
in such Funds or Accounts, the Trustee or Payment Agent,
if any, shall so notify Ambac Assurance. Such notice
shall specify the amount of the anticipated deficiency,
the Series 2002 Bonds to which such deficiency is
applicable and whether such Series 2002 Bonds will be
deficiency as to principal or interest, or both. If the
Trustee or Paying Agent, if any, has not so notified
Ambac Assurance at lease one (1) day prior to an interest
payment date, Ambac Assurance will make payments of
principal or interest due on the Series 2002 Bonds on or
before the first (1st) day next following the date on
which Ambac Assurance shall have received notice of
nonpayment from the Trustee or Paying Agent, if any.
(2) The Trustee or Paying Agent, if any, shall,
after giving notice to Ambac Assurance as provided in (1)
above, make available to Ambac Assurance and, at Ambac
Assurance's direction, to The Bank of New York, in New
York, New York, as insurance trustee for Ambac Assurance
or any successor insurance trustee (the "Insurance
Trustee "), the registration books of the City maintained
by the Trustee or Paying Agent, if any, and all records
relating to the Funds and Accounts maintained under the
Authorizing Ordinance.
(3) The Trustee or Paying Agent, if any, shall
provide Ambac Assurance and the Insurance Trustee with a
list of registered owners of Series 2002 Bonds entitled
to receive principal or interest payments from Ambac
Assurance under the terms of the Financial Guaranty
Insurance Policy, and shall make arrangements with the
Insurance Trustee (i) to mail checks or drafts to the
registered owners of Series 2002 Bonds entitled to
receive full or partial interest payments from Ambac
Assurance and (ii) to pay principal upon Series 2002
Bonds surrendered to the Insurance Trustee by the
registered owners of Series 2002 Bonds entitled to
receive full or partial principal payments from Ambac
Assurance.
(4) The Trustee or Paying Agent, if any, shall, at
the time it provides notice to Ambac Assurance pursuant
to (1) above, notify registered owners of Series 2002
Bonds entitled to receive the payment of principal or
interest thereon from Ambac Assurance (i) as to the fact
of such entitlement, (ii) that Ambac Assurance will remit
to them all or a part of the interest payments next
coming due upon proof of Holder entitlement to interest
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payments and delivery to the Insurance Trustee, in form
satisfactory to the Insurance Trustee, of an appropriate
assignment of the registered owner's right to payment,
(iii) that should they be entitled to receive full
payment of principal from Ambac Assurance, they must
surrender their Series 2002 Bonds (along with an
appropriate instrument of assignment in form satisfactory
to the Insurance Trustee to permit ownership of such
Series 2002 Bonds to be registered in the name of Ambac
Assurance) for payment to the Insurance Trustee, and not
the Trustee or Paying Agent, if any, who shall note on
such Series 2002 Bonds the portion of the principal paid
by the Trustee or Paying Agent, if any, and then, along
with an appropriate instrument of assignment in form
satisfactory to the Insurance Trustee, to the Insurance
Trustee, which will then pay the unpaid portion of
principal.
(5) In the event that the Trustee or Paying Agent,
if any, has notice that any payment of principal of or
interest on a Series 2002 Bond which has become Due for
Payment and which is made to a Holder by or on behalf of
the City has been deemed a preferential transfer and
theretofore recovered from its registered owner pursuant
to the United States Bankruptcy Code by a trustee in
bankruptcy in accordance with the final, nonappealable
order of a court having competent jurisdiction, the
Trustee or Paying Agent, if any, shall, at the time Ambac
Assurance is notified pursuant to (1) above, notify all
registered owners that in the event that any registered
owner's payment is so recovered, such registered owner
will be entitled to payment from Ambac Assurance to the
extent of such recovery if sufficient funds are not
otherwise available, and the Trustee or Paying Agent, if
any, shall furnish to Ambac Assurance its records
evidencing the payments of principal of and interest on
the Series 2002 Bonds which have been made by the Trustee
or Paying Agent, if any, and subsequently recovered from
registered owners and the dates on which such payments
were made.
(6) In addition to those rights granted Ambac
Assurance under the Authorizing Ordinance, Ambac
Assurance shall, to the extent it makes payment of
principal of or interest on Series 2002 Bonds, become
subrogated to the rights of the recipients of such
payments in accordance with the terms of the Financial
Guaranty Insurance Policy, and to evidence such
subrogation (i) in the case of subrogation as to claims
for past due interest, the Trustee or Paying Agent, if
any, shall note Ambac Assurance's rights as subrogee on
the registration books of the City maintained by the
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Trustee or Paying Agent, if any, upon receipt from Ambac
Assurance of proof of the payment of interest thereon to
the registered owners of the Series 2002 Bonds, and (ii)
in the case of subrogation as to claims for past due
principal, the Trustee or Paying Agent, if any, shall
note Ambac Assurance's rights as subrogee on the
registration books of the City maintained by the Trustee
or Paying Agent, if any, upon surrender of the Series
2002 Bonds by the registered owners thereof together with
proof of the payment of principal thereof.
J. Trustee.
(1) The Trustee (or Paying Agent) may be removed at
any time, at the request of Ambac Assurance, for any
breach of the trust set forth in the Authorizing
Ordinance.
(2) Ambac Assurance shall receive prior written
notice of any Trustee (or Paying Agent) resignation.
(3) Every successor Trustee appointed pursuant to
this Section shall be a trust company or bank in good
standing located in or incorporated under the laws of the
State of Arkansas, duly authorized to exercise trust
powers and subject to examination by federal or state
authority, having a reported capital and surplus of not
less than $75,000,000 and acceptable to Ambac Assurance.
Any successor Paying Agent, if applicable, shall not be
appointed unless Ambac approves such successor in
writing.
(4) Notwithstanding any other provision of the
Authorizing Ordinance, in determining whether the rights
of the Holders will be adversely affected by any action
taken pursuant to the terms and provisions of the
Authorizing Ordinance, the Trustee (or Paying Agent)
shall consider the effect on the Holders as if there were
no Financial Guaranty Insurance Policy.
(5) Notwithstanding any other provision of the
Authorizing Ordinance, no removal, resignation or
termination of the Trustee (or Paying Agent) shall take
effect until a successor, acceptable to Ambac, shall be
appointed.
K. Interested Parties. To the extent the Authorizing
Ordinance confers upon or gives or grants to Ambac any right,
remedy or claim under or by reason of the Authorizing Ordinance,
Ambac is hereby explicitly recognized as being a third -party
beneficiary hereunder and may enforce any such right, remedy or
claim conferred, given or granted hereunder and thereunder.
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Nothing in the Authorizing Ordinance expressed or implied
is intended or shall be construed to confer upon, or to give or
grant to, any person or entity, other than the City, the Trustee,
Ambac Assurance, the Paying Agent, if any, and the registered
owners of the City, any right, remedy or claim under or by reason
of the Authorizing Ordinance or any covenant, condition or
stipulation hereof, and all covenants, stipulations, promises and
agreements in the Authorizing Ordinance contained by and on behalf
of the City shall be for the sole and exclusive benefit of the
City, the Trustee, Ambac Assurance, the Paying Agent, if any, and
the registered owners of the Series 2002 Bonds.
L. Bond Legend. Each Series 2002 Bond shall contain a
legend substantially as follows:
"Financial Guaranty Insurance Policy No.
(the "Policy ") with respect to payments due
for principal of and interest on this Series
2002 Bond has been issued by Ambac Assurance
Corporation ( "Ambac Assurance "). The Policy
has been delivered to The Bank of New York,
New York, New York, as the Insurance Trustee
under said Policy and will be held by such
Insurance Trustee or any successor insurance
trustee. The Policy is on file and available
for inspection at the principal office of the
Insurance Trustee and a copy thereof may be
secured from Ambac Assurance or the Insurance
Trustee. All payments required to be made
under the Policy shall be made in accordance
with the provisions thereof. The owner of
this Series 2002 Bond acknowledges and
consents to the subrogation rights of Ambac
assurance as more fully set forth in the
Policy."
M. Surety Bond. As long as the Surety Bond shall be in
full force and effect, the City, Trustee and Paying Agent, if
appropriate, agree to comply with the following provisions:
(1) In the event and to the extent that moneys on
deposit in the Bond Fund, plus all amounts on deposit in
and credited to the Debt Service Reserve in excess of the
amount of the Surety Bond, are insufficient to pay the
amount of principal and interest coming due, then upon
the later of: (i) one (1) day after receipt by the
General Counsel of Ambac of a demand for payment in the
form attached to the Surety Bond as Attachment 1 (the
"Demand for Payment "), duly executed by the Trustee
certifying that payment due has not been made to the
Trustee; or (ii) the payment date of the Series 2002
Bonds as specified in the Demand for Payment presented to
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the Trustee to the General Counsel of Ambac, Ambac will
make a deposit of funds in an account with the Trustee or
its successor, in New York, New York, sufficient for the
payment to the Trustee, of amounts which are then due to
the Trustee under the Authorizing Ordinance (as specified
in the Demand for Payment) up to but not in excess of the
Surety Bond Coverage, as defined in the Surety Bond;
provided, however, that in the event that the amount on
deposit in, or credited to, the Debt Service Reserve, in
addition to the amount available under the Surety Bond,
includes amounts available under a letter of credit,
insurance policy, Surety Bond or other such funding
instrument (the "Additional Funding Instrument "), draws
on the Surety Bond and the Additional Funding Instrument
shall be made on a pro rata basis to fund the
insufficiency.
(2) The Trustee, or Paying Agent, if appropriate,
shall, after submitting to Ambac the Demand for Payment
as provided in (1) above, make available to Ambac all
records relating to the Funds and Accounts maintained
under the Authorizing Ordinance.
(3) The Trustee, or Paying Agent, if appropriate,
shall, upon receipt of moneys received from the draw on
the Surety Bond, as specified in the Demand for Payment,
credit the Debt Service Reserve to the extent of moneys
received pursuant to such Demand.
(4) The Debt Service Reserve shall be replenished
in the following priority: (i) principal and interest on
the Surety Bond shall be paid from first available
Pledged Revenues; (ii) after all such amounts are paid in
full, amounts necessary to fund the Debt Service Reserve
to the required level, after taking into account the
amounts available under the Surety Bond shall be
deposited from next available Pledged Revenues.
N. Pledge of Pledged Revenues. The City represents,
warrants and covenants as follows:
(1) The Authorizing Ordinance creates a valid and
binding Pledge of the Pledged Revenues in favor of the
Trustee as security for payment of the Series 2002 Bonds,
enforceable by the Trustee in accordance with the terms
hereof and thereof.
(2) Under the laws of the State of Arkansas, such
pledge and each pledge, assignment, lien or other
security interest made to secure any Prior Bonds is and
shall be prior to any judicial lien hereafter imposed on
such collateral to enforce a judgment against the City on
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a simple contract. The pledge of Pledged Revenues is
exempt from the filing requirement of the Arkansas
Uniform Commercial Code for perfection against third
parties.
(3) Except as set forth in the Authorizing
Ordinance, the City has not heretofore made a pledge of,
granted a lien on or security interest in, or made an
assignment or sale of such collateral that ranks on a
parity with or prior to the pledge effected by the
Authorizing Ordinance. Except as set forth in the
Authorizing Ordinance, the City shall not hereafter make
or suffer to exist any pledge or assignment of, lien on,
or security interest in such collateral that ranks prior
to or on a parity with the pledge effected by the
Authorizing Ordinance, or file any financing statement
describing any such pledge, assignment, lien or security
interest, except as expressly permitted hereby.
Section 5. The Mayor of the City, the City Manager and
the officers of the City are authorized to execute and delivery an
agreement in favor of Ambac Assurance with respect to reimbursement
for draws on the Surety Bond and otherwise to carry out the terms
hereof, in accordance with their respective offices and
responsibilities.
Section 6. The provisions of this Resolution are
severable. If any provision should be held to be invalid or to be
inapplicable to any person or circumstance, such holding shall not
affect the validity or applicability of the remainder hereof.
Section 7. This Resolution shall be in effect upon its
adoption.
ADOPTED this 16th day of July, 2002.
APPROVED:
- By - --
Mayor
City Jerk
(SEAL)
,•�� 1.IYT�'%
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CERTIFICATE
The undersigned, City Clerk of the City of Little Rock,
Arkansas (the "City ") , hereby certifies that the foregoing pages
are a true and correct copy of Resolution No. 113_4, adopted at a
session of the Board of Directors of the City, held at the
refular meeting place of the Board of Directors at G:oO , p.m.,
on July _a 2002.
2002.
(SEAL)
GIVEN under my hand and seal this ast�day of July,
UITrl
Ik • ��``
G(/
ity Clerk
caG\�y CLEq /r
�Ty `r
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BOND PURCHASE AGREEMENT
$3,630,000
City of Little Rock, Arkansas
Capital Improvement Junior Lien Revenue Bonds,
Series 2002
City of Little Rock, Arkansas
Gentlemen:
July 10, 2002
The undersigned, Morgan Keegan & Company, Inc. (the
"Underwriter ") , hereby offers to enter into this Bond Purchase
Agreement ( "Agreement ") with you, the City of Little Rock, Arkansas
(the "Issuer ") , for the purchase by the Underwriter and the sale by
the Issuer of the Bonds of the Issuer more particularly described
below. Upon acceptance and approval by you this Agreement shall be
in full force and effect in accordance with its terms and shall be
binding upon both the Issuer and the Underwriter. The further
terms of this Agreement are:
1. Upon the terms and conditions and upon the basis of
the representations herein set forth, the Underwriter hereby agrees
to purchase from the Issuer and the Issuer hereby agrees to sell to
the Underwriter the entire principal amount of an issue of bonds
designated "City of Little Rock, Arkansas Capital Improvement
Junior Lien Revenue Bonds, Series 2002" (the "Bonds ") to be issued
under and secured by Ordinance No. of the Issuer (the "Basic
Ordinance ") in the form heretofore delivered to us, with only such
changes therein as shall be mutually agreed upon between the Issuer
and the Underwriter, as implemented by a Resolution of
substantially the form and content of Exhibit A hereto (the
"Implementing Resolution. "). The Basic Ordinance and the
Implementing Resolution are referred to herein, collectively, as
the "Authorizing Ordinance." The Bonds shall be subject to
extraordinary and optional redemption prior to maturity as set
forth in the Authorizing Ordinance.
2. The Bonds are being issued for the purpose of
financing certain fixtures, equipment and improvements, with
related facilities, for the conservation of energy (the
"Improvements "). The Bonds will secure a pledge of the "Pledged
Revenues," as defined in the Authorizing Ordinance, which pledge is
subject to the pledges in favor of the "Prior Bonds," as defined in
the Authorizing Ordinance.
3. The Bonds shall be dated August 1, 2002. Interest on
the Bonds shall be payable on April 1 and October 1 of each year,
commencing April 1, 2003. The Bonds shall be authorized in the
principal amount of $3,630,000 bearing interest at the rates per
annum and maturing on October 1 in each of the years and in the
amounts as set forth in the schedule attached hereto, Exhibit B.
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Metropolitan National Bank, Little Rock, Arkansas, shall be trustee
for the Bondholders and paying agent (the "Trustee ").
4. The parties hereto intend that the Bonds be issued
pursuant to the Internal Revenue Code of 1986, as amended (the
"Code "), so that the interest on the Bonds will not be includable
in the gross income of the recipients for federal income tax
purposes and that the Bonds will be exempt from registration under
the Securities Act of 1933, as amended.
5. The Underwriter hereby agrees to purchase all of the
Bonds from the Issuer and the Issuer hereby agrees to sell all of
the Bonds to the Underwriter at a price of 100.904% of the
principal amount of the Bonds, plus interest accrued thereon from
the date of the Bonds to the date of Closing as hereinafter
defined. The sale and purchase of the Bonds shall take place at a
closing (the "Closing ") at 10:00 a.m., prevailing local time, on
August 6, 2002, or at such other time or on such earlier or later
date as is mutually agreed upon, and at the offices of Friday,
Eldredge & Clark, LLP, Little Rock, Arkansas or at such other place
as is mutually agreed upon. The Issuer will cause the Trustee to
authenticate and deliver one Bond certificate per maturity
registered in the name of Cede & Co. with a CUSIP number to The
Depository Trust Company, New York, New York ( "DTC "), with
instructions to place the Bonds in safekeeping and await further
instructions from the Trustee. The Bonds shall be received by DTC
not later than 1:15 P.M. Eastern Time on the last business day
preceding the date of Closing. At the Closing, and subject to
satisfaction (or proper waiver by the Underwriter) of the
conditions to its obligations to purchase the Bonds, the
Underwriter will pay the purchase price of the Bonds in federal
reserve funds payable to the order of the Trustee for the account
of the Issuer. Upon receipt of the purchase price the Trustee shall
authorize DTC to release the Bonds to the Underwriter. If the
Issuer fails to cause the Trustee to deliver the Bonds to DTC as
provided herein, or if at the Closing any of the conditions
specified in paragraph 8 hereof shall not have been fulfilled to
the satisfaction of the Underwriter, the Underwriter may elect to
be relieved of any further obligations under this Agreement without
thereby waiving any other rights the Underwriter may have by reason
of such failure or nonfulfillment. The Underwriter and the Issuer
understand that in any of such events the actual respective
expenses, costs or damages of such parties may be unequal, and any
such amounts incurred by any party may be greater or may be less
than those amounts incurred by any other. Accordingly, and subject
to paragraph 12 hereof, such parties hereby waive any right to
claim that their actual expenses, costs or damages are or will be
greater than the actual expenses, costs or damages incurred or
suffered by any such party, and no such party shall be entitled to
claim any damages from the other.
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6. The Issuer will sell the Bonds to the Underwriter and
the Underwriter will make a public offering thereof in reliance
upon representations and agreements herein set forth solely
pursuant to the Official Statement hereinafter described at the
initial offering price or yields set forth in the Official
Statement, reserving, however, the right to change such initial
offering prices as the Underwriter shall deem necessary in
connection with the marketing of the Bonds. The Issuer shall
deliver or cause to be delivered to the Underwriter, within seven
business days after acceptance of this Agreement, copies of the
Official Statement in such number as the Underwriter shall
reasonably request, substantially in the form of the Preliminary
Official Statement, heretofore presented to the Underwriter,
relating to the Bonds (the "Preliminary Official Statement ") with
only such changes therein as shall be accepted by us (such Official
Statement with such subsequent modifications and changes, if any,
and including the cover page and all appendices, exhibits, reports
and statements included therein or attached thereto being herein
called the "Official Statement "), signed on behalf of the Issuer by
its Mayor. The Issuer authorizes the use of copies of the Official
Statement and Authorizing Ordinance in connection with the public
offering and sale of the Bonds. The Issuer ratifies the lawful use
by the Underwriter prior to the date hereof of the Preliminary
Official Statement.
The obligations of the Issuer and the Underwriter
hereunder are subject to adoption of the Implementing Resolution on
or before July 16, 2002.
7. In order to induce the Underwriter to enter into this
Agreement and to make an offering of the Bonds, the Issuer
represents to and agrees with the Underwriter that:
A. The Issuer is and will be at the Closing a duly
organized and existing municipality under the Constitution and laws
of the State of Arkansas (the "State ") and has, and at the date of
Closing will have, full legal right, power and authority (i) to
enter into this Agreement and the Disclosure Agreement (identified
below) , (ii) to adopt the Authorizing Ordinance, (iii) to issue,
sell and deliver the Bonds to the Underwriter as provided herein,
(iv) to acquire, construct and equip the Improvements, and (v) to
carry out and consummate the transactions contemplated by this
Agreement, the Disclosure Agreement (defined below), the
Authorizing Ordinance and the Official Statement;
B. The Bonds will be issued pursuant to and in full
compliance with the Constitution and laws of the State;
C. Both on the date hereof and at the Closing, the
statements and information contained in the Official Statement will
be true, correct and complete in all material respects and shall
not and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
D. The execution and delivery of this Agreement and the
compliance with the provisions hereof under the circumstances
contemplated hereby, will not in any respect conflict with, or
constitute on the part of the Issuer a breach or default under any
agreement or other instrument to which the Issuer is a party, or
any existing law, administrative regulation, court order or consent
decree to which the Issuer is subject;
E. The Issuer will not 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 Authorizing Ordinance;
F. When delivered to and paid for by the Underwriter,
the Bonds will have been duly authorized, executed, authenticated,
issued and delivered, and will constitute valid and legally binding
special obligations of the character referred to in the statutes
under which issued;
G. The Issuer will immediately notify the Underwriter of
any adverse change of a material nature in the financial condition
of the System;
H. Between the date of this Agreement and the Closing,
the Issuer will not, without the prior written consent of the
Underwriter, issue any bonds, notes, or other obligations for
borrowed money and secured by or payable from Pledged Revenues;
I. The Issuer shall enter into a Continuing Disclosure
Agreement (the "Disclosure Agreement ") with the Trustee as required
by the Securities and Exchange Commission Rule 15c2 -12 and as
described in the Official Statement;
J. Except as may be disclosed in the Official
Statement, there is no action, suit, proceeding, or investigation
which has not been disclosed in the Official Statement involving
the Issuer before or by any court, public board, or body pending
or, to the knowledge of the Issuer, threatened wherein an
unfavorable decision, ruling, or finding would: (i) affect the
existence or powers of the Issuer or the titles of its officers to
their respective offices, (ii) enjoin or restrain the issuance,
sale, and delivery of the Bonds or the collection of any Pledged
Revenues or the pledge thereof, (iii) in any way question or affect
any of the rights, powers, duties, or obligations of the Issuer
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with respect to the moneys and assets pledged or to be pledged to
pay the principal of and premium, if any, and interest on the
Bonds, (iv) in any way question or affect any authority for the
issuance of the Bonds or the validity or enforceability of the
Bonds, or (v) in any way question or affect this Agreement or the
transactions contemplated hereby or by the Official Statement, the
documents referred to in the Official Statement, or any other
agreement or instrument to which the Issuer is a party and relating
to the Bonds, the Improvements or the System; and
K. The Issuer will furnish such information, execute
such instruments, and take such other action in cooperation with
the Underwriter, as the Underwriter may reasonably request, to
qualify the Bonds for offer and sale under the Blue Sky or other
securities laws and regulations of such states and other
jurisdictions of the United States of America as the Underwriter
may designate, and the Issuer will assist, if necessary therefor,
in the continuance of such qualifications in effect so long as
required for the distribution of the Bonds; provided, however, that
the Issuer shall not be required to qualify as a foreign
corporation or to file any general consent to service of process
under the laws of any state.
S. The Underwriter has entered into this Agreement in
reliance upon the representations and agreements of the Issuer
herein and the performance by the Issuer of its obligations
hereunder, both as of the date hereof and as of the Closing. The
Underwriter's obligations under this Agreement are and shall be
subject to the following further conditions:
A. At the Closing, the Authorizing Ordinance shall be in
full force and effect, and the Authorizing Ordinance and the
Official Statement shall not have been amended, modified or
supplemented except as may have been agreed to by the Underwriter,
and the Issuer shall have duly adopted and there shall be in full
force and effect such other ordinances and resolutions as, in the
opinion of Friday, Eldredge & Clark, LLP, Little Rock, Arkansas
(the "Bond Counsel ") shall be necessary in connection with the
transactions contemplated hereby;
B. At the Closing the Underwriter shall receive the
approving opinion, dated as of the Closing, of Bond Counsel, in
customary form and content satisfactory to the Underwriter, plus
all other documents, opinions and certificates reasonably required
by Bond Counsel or the Underwriter to evidence (i) compliance by
the Issuer with legal requirements, (ii) the truth and accuracy, as
of the date of Closing, of the representations of the Issuer
contained herein, (iii) the due performance or satisfaction by the
Issuer at or prior to the Closing of all agreements to be performed
and all conditions to be satisfied by the Issuer, (iv) the validity
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of the Bonds and this Agreement, and (v) the tax - exempt status of
the interest on the Bonds under the Code;
C. At the Closing, the Disclosure Agreement shall have
been executed by the Issuer and the Trustee, with only such
amendments as may have been agreed to by the Underwriter;
D. At the Closing, the Underwriter shall receive a
certificate, dated the date of the Closing, signed by the Issuer's
Mayor and Finance Director, in form and substance satisfactory to
the Underwriter, to the effect that
(1) Each of the representations and
warranties of the Issuer set forth herein is
true and correct in all material respects as
of the Closing and the Issuer has complied
with each of its covenants and agreements
required in this Agreement to be complied with
at or prior to the Closing;
(2) There has been no material adverse change
in the business, property or financial
condition of the Issuer as described in the
official Statement and, except as provided for
or contemplated or described in the Official
Statement, the Issuer has not incurred any
material liabilities other than in the normal
course of business; and
(3) They have examined the Official Statement
and, in their opinion, with respect to the
Pledged Revenues and the Issuer, the Official
Statement, as of the date of Closing, does not
include any untrue statement of a material
fact or omit to state a material fact required
to be stated therein or necessary in order to
make the statements therein, in light of the
circumstances under which they were made, not
misleading;
E. At or prior to the closing, the Underwriter shall
receive evidence that payment of debt services on the Bonds, as
due, has been insured by Ambac Assurance Corporation; and
F. At or prior to the Closing, the Underwriter shall
receive evidence that the Bonds have received a rating of "AA" from
Standard & Poor's Ratings Services.
9. The Underwriter shall have the right to cancel and
terminate its obligations under this Agreement at any time before
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Closing, in which even the Issuer shall be relieved of its
obligations hereunder, if any of the following occurs:
(a) Legislation shall have been enacted by the Congress
of the United States, or adopted by or introduced in either House
or any committee thereof, or a decision shall have been rendered by
a court of the United States or the Tax Court of the United States,
or a ruling shall have been made or regulations shall have been
proposed or made by the Treasury Department of the United States,
the Internal Revenue Service or any other governmental agency with
respect to federal taxation upon revenues or other income of the
general character to be derived by the Issuer or by any similar
body, or upon interest received on obligations of the general
character of the Bonds which, in the opinion of the Underwriter,
materially adversely affects the market price of the Bonds or the
market price generally of obligations of the general character of
the Bonds; or
(b) Any legislation, ordinance, rule or regulation shall
be enacted or be actively considered for enactment by any
governmental body, department or agency of the State, or a decision
by any court of competent jurisdiction within the State shall be
rendered which, in the opinion of the Underwriter, materially
adversely affects the market price of the Bonds; or
(c) A stop order, ruling, regulation or official
statement by or on behalf of the Securities and Exchange Commission
shall be issued or made to the effect that the issuance, offering
or sale of the Bonds, or of obligations of the general character of
the Bonds, as contemplated hereby, is in violation of any
provisions of the Securities Act of 1933, or the Trust Indenture
Act of 1939; or
(d) (i) Any restriction on, or general suspension of,
trading in securities on the New York Stock Exchange or any banking
moratorium, or the establishment by the New York Stock Exchange, by
the Securities and Exchange Commission, by any Federal or state
agency, or by the decision of any court, of any limitation on
prices for such trading or (ii) any new outbreak of hostilities or
other national or international calamity or crisis, the effect of
which on the financial markets of the United States shall be such
as to make it impracticable, in the reasonable judgment of the
Underwriter, for the Underwriter to enforce contracts for the sale
of the Bonds; or
(e) Any event or condition which, in the judgment of the
Underwriter, renders untrue or incorrect, in any material respect
as of the time the same purports to speak, the information,
including the financial statements, contained in the Official
Statement, or which requires that information not reflected in the
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Official Statement should be reflected therein in order to make the
statements and information contained therein not misleading in any
material respect as of such time; provided the Issuer and the
Underwriter will use its best efforts to amend or supplement the
Official Statement to reflect, to the satisfaction of the
Underwriter, such changes in or additions to the information
contained in the Official Statement; or
(f) The Board of Directors of the Issuer shall fail to
adopt the Implementing Resolution on or before July 16, 2002.
10. All notices, demands and formal actions hereunder
will be in writing mailed, telegraphed or delivered to:
The Issuer: City of Little Rock, Arkansas
500 West Markham, Room 208
Little Rock, Arkansas 72201
Attention: Finance Director
The Underwriter: Morgan Keegan & Company, Inc.
100 Morgan Keegan Drive, Suite 400
Little Rock, Arkansas 72202
Attention: James Fowler
11. All representations, warranties and covenants of the
Issuer contained herein shall remain operative and in full force
and shall survive (a) the execution and delivery of this Agreement,
(b) any investigation made by or on behalf of the Underwriter, (c)
the purchase of the Bonds hereunder, and (d) any disposition of or
payment for the Bonds.
12. The Underwriter shall be under no obligation to pay
and the Issuer shall pay any expenses incident to the performance
of its obligations hereunder including, but not limited to: (i) the
cost of the preparation and distribution of this Agreement and the
Authorizing Ordinance, the cost of the preparation, printing and
delivery of the Bonds, and the cost of printing of the Official
Statement (in such reasonable quantities as may be requested by the
Underwriter); (ii) the fees and disbursements of Bond Counsel and
any counsel to the Issuer; (iii) the fees and disbursements of any
accountants and any other experts or consultants retained by the
Issuer; (iv) the charges for obtaining CUSIP numbers for the Bonds;
(v) legal publication costs; (vi) the Trustee's authentication fee
and expenses; (vii) the Underwriter's fees payable to DTC relating
to the underwriting of the Bonds; and (viii) rating agency fees.
The Underwriter shall pay: (i) the cost of the
preparation and printing of any amendment or supplement to the
Official Statement resulting from a determination by the
Underwriter to change the initial offering prices or yields set
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forth in the Official Statement; (ii) all advertising expenses in
connection with the public offering of the Bonds; (iii) the cost of
preparation of Blue Sky and Legal Investment Memoranda; and (iv)
all other expenses incurred by us in connection with our public
offering and distribution of the Bonds except as described above.
13. The Issuer covenants and agrees with the Underwriter
that:
(a) It will advise the Underwriter promptly of any
proposal to amend or supplement the Official Statement or any part
thereof. If between the date of this Agreement and ninety (90)
days after the end of the underwriting period an event occurs which
is materially adverse to the purpose for which the Official
Statement is to be used and is not disclosed in the Official
Statement, or if there shall exist any event which in the
reasonable judgment of the Underwriter makes untrue or incorrect in
any material respect any statement or information contained in the
Official Statement, or is not reflected in the Official Statement
but should be reflected therein in order to make the statements
and information contained therein not misleading in any material
respect, the Issuer will supplement or amend the Official Statement
in a form and in a manner approved by the Underwriter, the expense
of which shall be paid by the Issuer. The "end of the underwriting
period" shall mean the later of (i) the Closing date, or (ii) the
date the Underwriter no longer retains (directly or as a syndicate
member) an unsold balance of the securities for sale to the public.
The Underwriter agrees to notify the Issuer in writing when the
underwriting period has ended and if no such notification is given
within ninety (90) days after the Closing date, the Issuer may
assume that the underwriting period ended on the Closing date;
(b) It will indemnify and hold harmless the Underwriter
and each person, if any, who controls (as such term is defined in
Section 15 of the Securities Act of 1933, as amended) the
Underwriter against any and all losses, claims, damages and
liabilities of any kind, including the expenses of defense thereof,
(i) arising out of any statement or information contained in the
Official Statement relating to the Issuer, the Authorizing
Ordinance, the Bonds, the Pledged Revenues and use of Bond proceeds
that is untrue or incorrect in any material respect or the omission
from the Official Statement of any statement or information
relating to the Issuer, the Bonds, the Pledged Revenues, use of
Bond proceeds and the Authorizing Ordinance, which is necessary to
make the statements therein not misleading in any material respect,
and (ii) to the extent of the aggregate amount paid in settlement
of any litigation commenced or threatened arising from a claim
based upon any such untrue statement or omission if such settlement
is effected with the written consent of the Issuer (which consent
shall not be unreasonably withheld). In case any claim shall be
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made or action brought against the Underwriter or any controlling
person (as aforesaid) based upon the Official Statement, in respect
of which indemnity may be sought against the Issuer, the
Underwriter shall promptly notify the Issuer in writing, setting
forth the particulars of such claim or action, and the Issuer shall
assume the defense thereof, including the retaining of counsel and
the payment of all expenses. The Underwriter or any such
controlling person shall have the right to retain separate counsel
in any such action and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the Underwriter's
expense or the expense of such controlling person unless the
retaining of such counsel has been specifically authorized by the
Issuer. The obligations of the Issuer hereunder are limited to
Pledged Revenues.
14. This Agreement may be executed in any number of
counterparts with each executed counterpart constituting an
original but all of which together shall constitute one and the
same instrument.
15. This Agreement will inure to the benefit of and be
binding upon the parties thereto and their successors and will not
confer any rights upon any other person. This Agreement shall be
governed by and construed in accordance with the laws of the State.
MORGAN KEEGGAANN(& /COMPANY, INC.
By
Authorized Signature
APPROVED AND RECOMMENDED to the City this day of July, 2002.
ACCEPTED this day of July, 2002.
CITY OF LITTLE K, ARKAN S
By
Title �/(ef
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10.093:I&M-11
Implementing Resolution
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Ll
EXHIBIT B
Ll
Year
(October 1)
Principal Amount
Interest Rate
2003
$140,000
3.50
2004
180,000
3.50
2005
185,000
3.50
2006
190,000
3.50
2007
195,000
3.50
2008
200,000
3.50
2009
210,000
4.00
2010
215,000
4.00
2011
225,000
4.00
2012
235,000
4.00
2013
245,000
4.15
2014
255,000
4.25
2015
270,000
4.35
2016
280,000
4.45
2017
295,000
4.55
2018
310,000
4.65
12