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HomeMy WebLinkAboutA2951 - STONE & YOUNGBERG AD 159 IMPROVEMENT BONDS Stone & Youngberg iAD #159 Improvement Bonds AGREEMENT #2951 R17420, 2-6-91 STONE & YOUNGBERG - ----- MEMBERS PACIFIC STOCK EXCHANGE 4350 La Jolla Village Drive Suite 840 San Diego, California 92122 $147,322.62 Telephone (619) 452-0504 LIMITED OBLIGATION IMPROVEMENT BONDS Facsimile (619) 4 52-051 CITY OF PALM SPRINGS ASSESSMENT DISTRICT NO. 159 PURCHASE CONTRACT THIS PURCHASE CONTRACT is made and entered into this 5th day of February, 1991 by and between the CITY OF PALM SPRINGS, a municipal corporation (the "Issuer") , and STONE & YOUNGBERG (the "Underwriter") . RECITALS WHEREAS, the Issuer has undertaken and completed proceedings for the formation of Assessment District No. 159 (the "Assessment District") , pursuant to the "Municipal Improvement Act of 1913", being Division 12 of the Streets and Highways Code of the State of California, for the acquisition of certain works and improvements generally described as follows: Certain public improvements identified in the Engineer's Report on file with the City together with appurtenances and appurtenant work, acquisition if necessary and incidental expenses in connection therewith. (the "Improvements") , WHEREAS, the Issuer intends to finance the Improvements by the issuance of Limited Obligation Improvement Bonds (the "Bonds") , pursuant to the "Improvement Act of 1915", being Division 10 of the Streets and Highways Code of the State of California; and WHEREAS, the Issuer desires to sell all, but not less than all, of the Bonds to the Underwriter and the Underwriter desires to purchase all, but not less than all, of the Bonds from the Issuer: COVENANTS IN CONSIDERATION of the mutual convenants hereinafter contained and for other valuable consideration, the ,parties agree as follows: Section 1. Obligation to Purchase. The Underwriter agrees to purchase and the Issuer agrees to execute and deliver Bonds to the Underwriter in the aggregate principal amount specified and designated as follows: SAN FRANCISCO (415) 981-1314 • LOS ANGELES (818) 789-2663 $147,322.62 LIMITED OBLIGATION IMPROVEMENT BONDS CITY OF PALM SPRINGS ASSESSMENT DISTRICT NO. 159 Section 2. Denomination; Interest Rate; Maturity. The Bonds shall be dated February 2, 1991 and shall be serial bonds and shall be in the denomination of $5,000 each or integral multiples thereof (except for one Bond in an odd amount due in 1992) . The Bonds shall bear interest at the annual rates and shall mature in the principal amounts on the maturity dates set forth on Exhibit "A" attached hereto and made a part hereof. Section 3. Acceptance of Purchase Contract. This Purchase Contract shall be accepted by the governing body, or designee, of the Issuer on: February 6, 1991 subject to the conditions contained herein. Section 4. Purchase Price. The purchase price for the Bonds shall be: 97.00% of the aggregate principal amount thereof plus accrued interest thereon (calculated on the basis of 360-day year) from the Original Date of the Bonds to the Date of Delivery. The purchase price shall be tendered to the Issuer on the Date of Delivery in clearinghouse funds. Section 5. Delivery of Bonds. Delivery of the Bonds shall be made to the Underwriter on or about: February 20, 1991 (the Delivery Date") . If the Bonds are not tendered for delivery to the Underwriter on the Delivery Date, the Underwriter shall have the right, at its option, to cancel this Purchase Contract; provided that the Delivery date may be extended by mutual agreement of the parties. Section 6. Expenses. The Underwriters shall be under no obligation to pay, and the City shall pay the following expenses incident to the performance of the City's obligations hereunder: the cost of the preparation and printing of the Preliminary Official Statement, Official Statement and the Bonds, the fees and disbursements of its Bond Counsel, accountants, advisors and of any other experts or consultants retained by the City, including the fees and expenses of the Engineer responsible for the preparation of the Report relating to the District, and the Appraiser. The Underwriters shall pay all expenses (including out-of-pocket expenses, in-state travel and regulatory expenses) incurred by them in connection with the public offering and distribution of the Bonds, including the fees and disbursements of any counsel retained by them. -2- Section 7. Obligation of Issuer. This Purchase Contract shall be subject to the terms and conditions specified as follows: (a) The proceedings for formation of the Assessment District, confirmation of the assessments and ordering of the Improvements have been conducted pursuant to the "Municipal Improvement Act of 1913". (b) The Bonds shall be issued pursuant to and secured as provided by the "Improvement Bond Act of 1915", the Resolution of Issuance adopted on February 6, 1991 (the "Resolution") and the Bond Indenture dated as of Feburary 6, 1991 (the "Indenture") . (c) The proceeds from the sale of the Bonds shall be used solely to pay the costs and expenses of the Improvements specified in the Engineer's Report and Assessment Roll for the Assessment District, as confirmed. (d) The Bonds shall be subject to advanced retirement as described in the Resolution, pursuant to the "Improvement Bond Act of 1915". (e) The Issuer shall commence an action in the Superior Court of the state of California to foreclose the lien of such unpaid assessment, as authorized by Part 14, Division 10, of the Streets and Highways Code within 150 days following any delinquency. In such action, the real properties subject to the unpaid assessments shall be sold at judicial foreclosure. (f) The Issuer shall create a Reserve Fund to provide available funds from which the Issuer can advance and make payment on the amount of any delinquent assessments levied for these proceedings. Payment from the Reserve Fund shall be an advance to be reimbursed from the proceeds of redemption or sale of the properties. The Reserve Fund shall be maintained as a separate trust account distinct from all other funds of the Issuer. The Reserve Fund shall be in an amount approximately equal to: Eight percent (8.0%) of the Bonds issued to and purchased by the Underwriter. The Reserve Fund shall be administered and payments shall be made pursuant to the Resolution and the "Improvement Bond Act of 1915". (g) The Issuer shall notify the Underwriter prior to any reapportionment of assessments to ensure that such reapportionment will be approved only if security of the Bonds is not reduced or impaired. Section 8. Adverse Affect on Bonds; Cancellation of Contract. The Underwriter shall have the right, at its option, to cancel this Purchase Contract if between the date of acceptance of the Purchase Contract and the Delivery Date of the Bonds, the price of the Bonds has been materially adversely affected, in the judgment of the Underwriter (evidenced by a written notice to the Issuer terminating the obligation of the Underwriter to accept delivery and pay for the Bonds under the terms of this Purchase Contract) , by reason of any of the following: -3- (a) Legislation introduced in or enacted by the Congress or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation has been referred for consideration, or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed) , press release or other form of notice issued or made by or on behalf of the Treasury Department of the United States of America or the Internal Revenue Service, with the purpose or effect, directly or indirectly, of imposing Federal income taxation upon such assessments and the interest thereon as would be received by the Issuer or upon such interest as would be received by any owner of the Bonds; (b) Legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree or injunction issued by any court of competent jurisdication, or an order, ruling, regulation (final, temporary or proposed) , press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirement of the Securities Act of 1933, as amended, or that the Resolution of Issuance is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligation of the general character of the Bonds, or of the Bonds, including any or all underlying arrangement is or would be in violation of the Federal Securities Laws as amended and then in effect; (c) A general suspension of trading in securities on the New York Stock Exchange, or a general banking moratorium declared by the Federal government or State of California officials authorized to do so, or a war or other national calamity; (d) The withdrawl, suspension or downgrading of any rating of any securities of the Issuer by a national rating agency; (e) Any amendment to the Federal or California Constitution or action by any Federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the Issuer, its property, income, securities (or interest thereon) , the validity or enforceability of the assessments or the ability of the Issuer to acquire and construct the Improvements; (f) Any event occurring or information becoming known which, in the judgment of the Underwriter, makes untrue in any material respect any statement or information relied upon by the Underwriter in the submission of this Purchase Contract and the payment for the Bonds; -4- (g) The Issuer is, and at the Delivery Date, will be, in breach of or default under any law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, division, agency or instrumentality of either thereof, of any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, contract, agreement or other instruments to which the Issuer is a party or is otherwise subject or bound; the execution and delivery of the Bonds, this Purchase Contract, the contract or contracts (if any) for the acquisition of the Improvements which will be financed with the proceeds from the sale of the Bonds, any other applicable agreement and other instruments contemplated by any of such documents to which the Issuer is a party, and compliance with the provisions of each thereof, will conflict with or constitute a breach of or default under any applicable law of administrative rule or regulation of the state of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, of any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Issuer is a party or is otherwise subject or bound; or (h) An event of hostile or warlike action in time of peace or war, or insurrection, rebellion, revolution, civil war, usurped power or other acts of civil strife and commotion such that the stability of the national economy or the confidence of the investment community is greatly impaired. Section 9. Conditions of Closing. At the Closing, the Issuer shall deliver to the Underwriter, as a condition to payment of the purchase price, the documents specified as follows: (a) The unqualified approving legal opinion of: Brown, Harper, Burns & Hentschke (the "Bond Counsel") as to the validity of the assessment proceedings and the exclusion from gross income for federal income tax purposes of interest on the Bonds and exemption of such interest from personal income taxation imposed by the State of California which opinion shall also be printed on the Bonds at the expense of the Issuer. (b) A Certificate or Certificates of an officer of the Issuer: (i) That no litigation is pending or threatened challenging the validity of the assessment proceedings or office of any appointed or elected officer of the Issuer (the "No Litigation Certificate") . -5- (ii) That the proceeds from the sale of the Bonds will not be used in manner that would cause the Bonds to be "arbitrage bonds" within the meaning of the Internal Revenue Code of 1956, as amended, and regulations thereunder (the "Non-Arbitrage Certificate") . (iii) That the appointed and elected officers of the Issuer are duly qualified and acting in their respective capacities (the "Incumbency and Signature Certificate") . (iv) That, although no opinion is expressed with respect to financial or statistical information not provided by the Issuer, the information provided to the Underwriter for inclusion in the official Statement or any amendment or supplement thereto does not contain any untrue statement of a material fact or omits to state any material fact required to be stated or necessary to make the statements, in light of the circumstances under which they were made, not misleading. (v) That no assessment was originally levied upon any parcel in the Assessment District owned by the United States, State of California, County, City, Special District or any other public entity. (vi) That all improvements have been or will be constructed within public rights-of-way or upon lands owned by or to which the Issuer has the right of possession. (c) The Bonds in substantially the form specified in the "Improvement Bond Act of 1915". (d) Receipt for the Purchase Price for the Bonds. (e) Such other opinions of Bond counsel, certificates and documents as are customary in financings of this nature. Section 10. The Resolution. The Issuer's obligation to deliver the Bonds as described herein is subject in all respects to the adoption of the Resolution by the City Council on February 6, 1991. The Issuer or the Underwriter may terminate this Purchase Contract if the City Council fails to adopt the Resolution. If so terminated, the Underwriter shall make no claim against the Issuer, other than to seek repayment of any expenses described in the first paragraph of Section 6 above incurred on behalf of the Issuer. -6- Section 11. Modification. Nothwithstanding the foregoing, it is expressly understood by the parties that the terms and conditions of this Purchase Contract may be amended or modified in writing signed by both parties. IN WITNESS WHEREOF, the parties have executed this Purchase Contract by their officers duly authorized as of the date and year first written above. STONE & YOUNGBErRG CITY OF PALM SPRINGS ATTEST: % Acting City Manager ` ---� City Clerk (SEAL) -7- EXHIBIT "A" $147,322.62 Limited obligation Improvement Bonds City of Palm Springs Assessment District No. 159 Maturity Date Principal Interest September 2 Amount Rate 1992 $ 2,322.62 6.25% 1993 5,000.00 6.25 1994 5,000.00 6.50 1995 5,000.00 6.75 1996 10,000.00 7.00 1997 10,000.00 7.20 1998 10,000.00 7.40 1999 10,000.00 7.50 2000 10,000.00 7.60 2001 10,000.00 7.70 2002 10,000.00 7.80 2003 15,000.00 7.90 2004 15,000.00 7.90 2005 15,000.00 7.90 2006 15,000.00 7.90 The net interest cost of the bonds based on the above maturity schedule and a discount of 3.00% is 7.99%. The weighted average coupon rate is 7.69%. -8-