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SERIES 2023 PURCHASE AGREEMENT
by and between
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Seller
and
CITY OF CHANDLER, ARIZONA,
as Purchaser
Dated as of _______ 1, 2023
(i)
TABLE OF CONTENTS
Page
Section 1.
Term and Payments.....................................................................................................2
Section 2.
Pledge; Limited Obligations. ......................................................................................3
Section 3.
Surplus and Deficiency of Revenues From Excise Taxes ..........................................4
Section 4.
Additional Parity Obligations. ....................................................................................4
Section 5.
City Control over Revenue Collection ........................................................................4
Section 6. Certain Matters with Respect to Project .....................................................................4
Section 7.
Providing for Payment ................................................................................................5
Section 8.
Term of Agreement .....................................................................................................6
Section 9.
Default; Remedies Upon Default ................................................................................6
Section 10. Assignment. ................................................................................................................8
Section 11. Federal Law Provisions...............................................................................................8
Section 12. Covenant as to Conflict of Interest; Other Statutory Restrictions ............................12
Section 13. Reserve Fund ............................................................................................................13
Section 14. Miscellaneous. ..........................................................................................................13
SERIES 2023 PURCHASE AGREEMENT
THIS SERIES 2023 PURCHASE AGREEMENT, dated as of ______ 1, 2023
(this “Agreement”), by and between the CITY OF CHANDLER, ARIZONA, a municipal
corporation under the laws of the State of Arizona (“City”), as purchaser hereunder, and U.S.
BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association
(“Trustee”), in its capacity as trustee under the Series 2023 Trust Agreement, dated as of even date
herewith (the “Trust Agreement”), by and between Trustee and City, in its capacity as seller
hereunder,
W I T N E S S E T H:
WHEREAS, the Mayor and Council of City have determined that it will be
beneficial to the citizens of City for City to finance the costs of the Project (as such term and all
other undefined terms used herein are defined in the Trust Agreement); and
WHEREAS, pursuant to the Trust Agreement, Trustee has executed and delivered
the Obligations to provide for deposits to the Acquisition Fund and the Delivery Costs Fund; and
WHEREAS, City is a municipal corporation duly incorporated and validly existing
under the laws of the State; the Constitution and the laws of the State authorize City to enter into
this Agreement and the transactions contemplated by this Agreement; City has duly authorized
and executed this Agreement; this Agreement is a lawful, valid and binding obligation of City,
enforceable against City in accordance with its terms; all required procedures for execution and
performance of this Agreement have been or will be complied with in a timely manner; the
Payments will be paid when due out of funds which are legally available for such purposes; neither
the execution and delivery of this Agreement or the Trust Agreement, nor the fulfillment of or
compliance with the terms and conditions hereof or thereof nor the consummation of the
transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms,
conditions or provisions of any restriction or any agreement or instrument to which City is now a
party or by which City is bound, or constitutes a default under any of the foregoing, or results in
the creation or imposition of any lien, charge or encumbrance whatsoever upon any of the property
or assets of City; and the Project complies with all applicable environmental laws, rules and
regulations (including, without limitation, all federal, state and local laws) and with Title III of the
Americans with Disabilities Act and the regulations issued thereunder by the United States
Department of Justice concerning accessibility of places of public accommodation and commercial
facilities if and to the extent such Act and regulations apply to the Project; and
WHEREAS, Trustee has full legal authority and is duly empowered to enter into
this Agreement and has taken all actions necessary to the execution and delivery hereof;
NOW THEREFORE, PURSUANT TO LAW AND FOR
AND
IN
CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER CONTAINED, IT IS
HEREBY AGREED AS FOLLOWS:
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Section 1.
Term and Payments.
(a)
In order to finance the costs of the Project, City hereby sells and
conveys any interests it has in the Project to Trustee, without recourse, representation or warranty,
for the sum of $10.00 and other valuable consideration had and received. For the amounts payable
pursuant hereto (including the Payments), Trustee in turn hereby sells and conveys back to City,
without recourse, representation or warranty, and City hereby purchases and accepts, from Trustee,
any interests Trustee has in the Project. In order to evidence such sale, Trustee has executed and
delivered to City a bill of sale on the date of original execution and delivery of the Obligations.
(b)
Trustee shall have no further obligation to provide funds for the
Project, and City shall be entitled to sole and exclusive possession of the Project.
(c)
As the purchase price, City shall pay the Payments to Trustee on the
dates and in the amounts set forth in the Schedule hereto. (The Interest Portion is interest for
purposes of the Code.) This Agreement shall be deemed and construed to be a “net purchase
agreement,” and the Payments shall be an absolute net return to Trustee, free and clear of any
expenses or charges whatsoever, except as otherwise specifically provided herein.
City shall also pay all amounts necessary for compliance with the Continuing Disclosure
Undertaking.
As applicable, City shall also pay all amounts necessary to fund the Reserve Fund as described
herein and in the Trust Agreement.
City shall further also pay to Trustee its fees and expenses in accordance with the provisions of
the Trust Agreement and to the United States of America any amounts required by
Section 11(b)(ii).
City shall receive a credit against amounts so due, equal to any amounts held in the Payment Fund
in excess of the amount then required to be in the Payment Fund. If the balance available in the
Payment Fund after a Payment is insufficient to make the next required payments of principal and
interest due on the Obligations on the next date for payment thereof, City shall pay any such
deficiency in sufficient time to prevent default in the payment of principal of or interest on the
Obligations falling due on such date.
(d)
The obligation of City to pay the amounts described in paragraph (c)
hereof (including the Payments) from the sources described herein and to comply with the other
provisions hereof shall be absolute and unconditional and shall not be subject to any defense or
any right of set-off, abatement, counterclaim, or recoupment arising out of any breach by Trustee
of any obligation to City or otherwise, or out of indebtedness or liability at any time owing to City
by Trustee. Until such time as all of the payments described in paragraph (c) hereof (including the
Payments) shall have been fully paid or provided for, City (i) shall not suspend or discontinue the
same, (ii) shall comply with the other provisions hereof, and (iii) shall not terminate this
Agreement for any cause, including, without limiting the generality of the foregoing, the
occurrence of any acts or circumstances that may constitute failure of consideration, eviction or
constructive eviction, destruction of or damage to the Project or the taking by eminent domain of
title to or temporary use of any or all of the Project, commercial frustration of purpose,
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abandonment of the Project by City, any change in the tax or other laws of the United States of
America or of the State or any political subdivision of either or any failure of Trustee to perform
and observe any agreement, whether express or implied, or any duty, liability or obligation arising
out of or connected with the Trust Agreement or this Agreement. Nothing contained in this Section
shall be construed to release Trustee from the performance of any of the agreements on its part
herein or in the Trust Agreement contained, and, in the event Trustee shall fail to perform any such
agreements on its part, City may institute such action against Trustee as City may deem necessary
to compel performance so long as such action does not abrogate the obligations of City contained
in the first sentence of this paragraph.
(e)
Any of the payments described in paragraph (c) hereof (including
the Payments) due on a day which is not a Business Day may be made on the next Business Day
and will be deemed to have been made on the date due.
(f)
Amounts payable to Trustee shall be paid by the means specified by
Trustee in writing to City.
Section 2.
Pledge; Limited Obligations.
(a)
Revenues from Excise Taxes are hereby pledged by City to the
payment of all amounts described in Section 1(c) hereof (including the Payments), and such
amounts shall be secured by a paramount and first lien on and pledge of revenues from Excise
Taxes, on parity with the pledge and lien hereby granted by City for the payment and security of
the 2015 Agreement, the 2016 Refunding Agreement, the 2017 Agreement, the 2019 Agreement,
the 2021 Taxable Agreement and any Additional Parity Obligations hereafter incurred. City shall
make said payments from revenues from Excise Taxes (first making the Payments and thereafter
making the other required payments). All of such payments are coequal as to the pledge of and
lien on revenues from Excise Taxes pledged for the payment thereof and share ratably, without
preference, priority or distinction, as to the source or method of payment from revenues from
Excise Taxes or security therefor.
(b)
City shall remit to Trustee from revenues from Excise Taxes all
amounts due under this Agreement in the amounts and at the times and for the purposes as required
herein. The obligation of City to make payments of any amounts due under this Agreement,
including amounts due after default or termination hereof, is limited to payment from revenues
from Excise Taxes and shall under no circumstances constitute a general obligation or a pledge of
the full faith and credit of City, the State or any of its political subdivisions, or require the levy of,
or be payable from the proceeds of, any ad valorem property taxes.
(c)
City may, at the sole option of City, make payments due pursuant to
Section 1 hereof from its other funds as permitted by law and as City shall determine from time to
time, but Trustee acknowledges that it has no claim hereunder to such other funds. No part of the
purchase price payable pursuant to this Agreement shall be payable out of any ad valorem property
taxes imposed by City or from bonds or other obligations, the payment of which City’s general
taxing authority is pledged, unless (i) the same shall have been duly budgeted by City according
to law, (ii) such payment or payments shall be within the budget limitations of the statutes of the
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State, and (iii) any such bonded indebtedness or other obligation is within the debt limitations of
the Constitution of the State.
Section 3.
Surplus and Deficiency of Revenues From Excise Taxes .
Revenues from Excise Taxes in excess of amounts, if any, required to be deposited with or held
by Trustee for payments due under this Agreement shall constitute surplus revenues and may be
used by City for any lawful purpose for the benefit of City, including the payment of obligations
to which revenues from Excise Taxes may from time to time be pledged on a basis subordinate
hereto. If at any time the moneys in the funds held for payment of amounts due under this
Agreement are not sufficient to make the deposits and transfers required, any such deficiency shall
be made up from the first moneys thereafter received and available for such transfers under the
terms of this Agreement and, with respect to payment from revenues from Excise Taxes, pro rata,
as applicable, with amounts due with respect to the 2015 Agreement, the 2016 Refunding
Agreement, the 2017 Agreement, the 2019 Agreement, the 2021 Taxable Agreement, this
Agreement and any Additional Parity Obligations hereafter incurred, and the transfer of any such
sum or sums to said fund as may be necessary to make up any such deficiency shall be in addition
to the then-current transfers required to be made pursuant hereto.
Section 4.
Additional Parity Obligations. Additional Parity Obligations may
be incurred but only if revenues from Excise Taxes in the most recently completed Fiscal Year,
shall have amounted to at least three (3) times the Maximum Annual Debt Service, including the
Additional Parity Obligations proposed to be incurred. The calculation of Maximum Annual Debt
Service may be subject to certain adjustments as described in the Trust Agreement.
Section 5.
City Control over Revenue Collection. To the extent permitted by
applicable law, Excise Taxes shall be retained and maintained so that revenues from Excise Taxes,
all within and for the next preceding Fiscal Year, shall be equal to at least three (3) times the
Maximum Annual Debt Service payable hereunder, and under any Outstanding Parity Obligations,
for the current Fiscal Year. If revenues from Excise Taxes for any such Fiscal Year shall not have
been equal to at least three (3) times the Maximum Annual Debt Service for the current Fiscal
Year or if at any time it appears that revenues from Excise Taxes will not be sufficient to meet
such requirements, City shall, to the extent permitted by applicable law, impose new exactions of
the type of the excise taxes which will be part of the Excise Taxes or increase the rates for the
excise taxes currently imposed fully sufficient at all times, after making allowance for
contingencies and errors, in each Fiscal Year in order that (i) revenues from Excise Taxes will be
sufficient to meet all current requirements hereunder, and (ii) revenues from Excise Taxes will be
reasonably calculated to attain the level as required by the first sentence of this paragraph.
Notwithstanding the foregoing, the amount of State-shared revenues is determined by the
provisions of the Arizona Revised Statutes and City has not covenanted to, and has no power to,
set or maintain rates or otherwise impose taxes to increase, replace or supplement State-shared
revenues to provide for the payment of the amounts due hereunder or any other Parity Obligations.
Section 6.
Certain Matters with Respect to Project.
(a)
Except with respect to its power and authority to enter into this
Agreement and to perform its covenants hereunder, Trustee has made and makes no representation
or warranty, express or implied, and assumes no obligation with respect to the Project. Except
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with respect to any acts by Trustee which are not undertaken at the request of City or with the prior
approval of City, City waives all claims against Trustee growing out of financing the costs of the
Project. Trustee is entering into this Agreement solely as Trustee, shall not be personally liable
hereunder and shall be afforded the same rights, protections, immunities and indemnities acting
hereunder as afforded to it as Trustee under the Trust Agreement. Notwithstanding anything to
the contrary herein, at no time shall Trustee be listed in the chain of title to the Project.
(b)
Trustee hereby irrevocably appoints City as its sole and exclusive
agent to act for and on behalf of Trustee in financing the costs of the Project. As such agent, City
shall have full authority to do all things necessary to accomplish such purposes. Trustee shall not
be liable, responsible or accountable for the acts of City as its agent hereunder, and City hereby
assumes all responsibility for the performance of such duties.
(c)
City, by keeping and performing the covenants and agreements
herein contained, shall at all times during the term of this Agreement, peaceably and quietly, have,
hold and enjoy the Project, without suit, trouble or hindrance from Trustee. City hereby grants
and conveys to Trustee, and all persons claiming by, through or under Trustee, including its
successors and assigns under the Trust Agreement and the Owners for whom it acts, a nonexclusive
easement upon, in and to the Project for the purpose of permitting the Project to be maintained
upon the premises.
(d)
Notwithstanding any other terms or provisions of this Agreement,
the interest of Trustee in the Project is solely in its capacity as Trustee for the purpose of facilitating
the financing of the Project, and Trustee shall not have the power, authority or obligation to assume
any responsibility for the Project.
Section 7.
Providing for Payment. City may provide for the payment of any
of the Payments in any one or more of the following ways:
(a)
by paying such Payment as provided herein as and when the same
becomes due and payable at its scheduled due date pursuant to Section 1 hereof or on a date on
which it can be prepaid;
(b)
by depositing with a Depository Trustee, in trust for such purposes,
money which, together with the amounts then on deposit with Trustee and available for such
Payment is fully sufficient to make, or cause to be made, such Payment at its scheduled due date
or on a date on which it can be prepaid; or
(c)
by depositing with a Depository Trustee, in trust for such purpose,
any Defeasance Obligations which are noncallable, in such amount as shall be certified to Trustee
and City, by a national firm of certified public accountants acceptable to City, as being fully
sufficient, together with the interest to accrue thereon and moneys then on deposit with Trustee
and available for such Payment, to make, or cause to be made, such Payment at its scheduled due
date or on a date on which it can be prepaid.
Upon any partial payment of a Payment resulting in a redemption of Obligations, each installment
of interest which shall thereafter be payable as a part of the subsequent Payments shall be reduced,
taking into account the interest rate or rates on the Obligations remaining outstanding after the
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partial payment or redemption of Obligations from the proceeds of such payment so that the
interest remaining payable as a part of the subsequent Payments shall be sufficient to pay the
interest on such outstanding Obligations when due.
Section 8.
Term of Agreement. This Agreement shall not terminate so long
as any payments are due and owing pursuant to the Obligations. Subject to Section 7 hereof, upon
full payment or provision for payment and in consideration of the timely payment of all of the
amounts described in Section 1(c) hereof (including the Payments) and provided that City has
performed all the covenants and agreements required by City to be performed, this Agreement
shall cease and expire. The obligations of City under this Agreement, including, without
limitation, its obligation to pay the Payments, shall survive any action brought as provided in the
next Section hereof, and City shall continue to pay the Payments and perform all other obligations
provided in this Agreement; provided, however, that City shall be credited with any amount
received by Trustee pursuant to actions brought under the next Section hereof.
Section 9.
Default; Remedies Upon Default.
(a)
(i)
Upon (A) the nonpayment of the whole or any part of any of
the amounts described in Section 1(c) hereof (including the Payments) at the time when
the same are to be paid as provided herein or in the Trust Agreement, (B) the violation by
City of any other covenant or provision of this Agreement or the Trust Agreement, (C) the
occurrence of an event of default with respect to the 2015 Agreement, the 2016 Refunding
Agreement, the 2017 Agreement, the 2019 Agreement, 2021 Taxable Agreement or any
Additional Parity Obligations hereafter incurred, or (D) City becomes insolvent or admits
in writing its inability to pay its debts as they mature or applies for, consents to, or
acquiesces in the appointment of a trustee or receiver for the City or a substantial part of
its property; or in the absence of such application, consent or acquiescence, a trustee or
receiver is appointed for the City or a substantial part of its property; or any bankruptcy,
reorganization, debt arrangement, moratorium, or any proceeding under any bankruptcy or
insolvency law, or any dissolution or liquidation proceeding, is instituted by or against the
City and, if instituted against the City, is consented to or acquiesced in by the City, and
(ii)
if such default has not been cured (A) in the case of
nonpayment of any of the amounts described in Subsection 1(c) hereof (including the
Payments) as required hereunder or under the Trust Agreement on the due date or the
nonpayment of principal of or interest on the 2015 Agreement, the 2016 Refunding
Agreement, the 2017 Agreement, the 2019 Agreement, the 2021 Taxable Agreement or
any Additional Parity Obligations hereafter incurred on their due dates, (B) in the case of
the breach of any other covenant or provision of the Trust Agreement or this Agreement
not cured within twenty (20) days after notice in writing from Trustee specifying such
default; provided, however, that if the breach cannot be corrected within the applicable
time period, the Trustee will not unreasonably withhold its consent to an extension of one
hundred eighty (180) days from the date of delivery of such written notice to the City by
the Trustee if corrective action is instituted by the City within the applicable period and
diligently pursued until the default is corrected, and provided further that if the failure
cannot be corrected within the initial one hundred eighty (180) day extension, the City may
request, and the Trustee will not unreasonably withhold its consent to, successive
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additional one hundred eighty (180) day extensions so long as the City is diligently
pursuing corrective action, and the Trustee shall be entitled to receive and shall be protected
in relying upon one or more certificates of a City Representative in support of any request
by the City for such extension, (C) in the case of any insolvency or bankruptcy as described
above not discharged or dismissed within sixty (60) days and (D) in the case of any other
default under the 2015 Agreement, the 2016 Refunding Agreement, the 2017 Agreement,
the 2019 Agreement, the 2021 Taxable Agreement or any Additional Parity Obligations
hereafter incurred after any notice and passage of time provided for under the proceedings
under which such obligations were issued then,
(iii)
subject to the limitations of the Trust Agreement, Trustee
may take whatever action at law or in equity, including the remedy of specific performance,
may appear necessary or desirable to collect the Payments and any other amounts payable
by City under the Trust Agreement or this Agreement then due (but not the Payments and
such other amounts accruing), or to enforce performance and observance of any pledge,
obligation, agreement or covenant of City under the Trust Agreement or this Agreement,
and with respect to revenues from Excise Taxes, without notice and without giving any
bond or surety to City or anyone claiming under City, seek and obtain injunctive relief;
provided, however, that under no circumstances may the Payments be accelerated.
Each right, power and remedy of Trustee provided for in this Agreement shall be cumulative and
concurrent and shall be in addition to every other right, power or remedy provided for herein, or,
unless prohibited by the terms hereof, now or hereafter existing at law or in equity or by statute or
otherwise, in any jurisdiction where such rights, powers and remedies are sought to be enforced,
and the exercise or beginning of the exercise by Trustee of any one or more of the rights, powers
or remedies provided for herein or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise by either party of any or all of such
other rights, powers or remedies. The failure to insist upon strict performance of any of the
covenants or agreements herein set forth shall not be considered or taken as a waiver or
relinquishment for the future of the rights of Trustee to insist upon a strict compliance by City with
all the covenants and conditions hereof. City shall, upon not less than 10 days’ prior request by
Trustee, execute, acknowledge and deliver to Trustee a statement in writing certifying that this
Agreement is unmodified and in full force and effect (or, if this Agreement has been modified, that
it is in full force and effect except as modified, and stating the modification), and the dates to which
the amounts payable hereunder have been paid in advance, if any.
(b)
Trustee shall in no event be in default in the performance of any of
its obligations hereunder unless and until Trustee shall have failed to perform such obligation
within thirty (30) days or such additional time as is reasonably required to correct any such default
after notice by City properly specifying wherein Trustee has failed to perform any such obligation.
No default by Trustee shall relieve City of its obligations to make the various payments herein
required, so long as any of the Obligations remain outstanding; however, City may exercise any
other remedy available at law or in equity to require Trustee to remedy such default so long as
such remedy does not interfere with or endanger the payments required to be made to Trustee
under the Trust Agreement.
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Section 10.
Assignment.
(a)
Except as otherwise provided herein, City shall not assign, transfer,
pledge or hypothecate or otherwise dispose of this Agreement or any interest therein, and any
assignment in contravention hereof shall be void.
(b)
Subject to the terms of the Trust Agreement, all and every part of
the right, title and interest in and to this Agreement and all payments of any kind due or which
become due to Trustee hereunder are sold, pledged, assigned and transferred pursuant to the Trust
Agreement.
Section 11.
Federal Law Provisions.
(a)
(i)
As described in further detail in the Tax Certificate, no
direction for the making of any investment or other use of the proceeds of any of the Obligations
or of the Project shall be made, permitted to be made or omitted from being made which would
cause the Obligations to be “arbitrage bonds” as that term is defined in Section 148 (or any
successor provision thereto) of the Code or “private activity bonds” as that term is defined in
Section 141 (or any successor provision thereto) of the Code, and the requirements of such sections
and related regulations of the Code shall be complied with throughout the term of the Obligations.
Particularly, City shall be the owner of the Project for federal income tax purposes. City shall not
enter into any management or service contract with any entity other than a governmental entity for
the operation of any portion of the Project unless the management or service contract complies
with the requirements of such authority as may control at the time, or any lease or other
arrangement with any entity other than a governmental entity that gives such entity special legal
entitlements with respect to any portion of the Project. Also, the payment of principal and interest
with respect to the Obligations shall not be guaranteed (in whole or in part) by the United States
or any agency or instrumentality of the United States. The proceeds of the Obligations, or amounts
treated as proceeds of the Obligations, shall not be invested (directly or indirectly) in federally
insured deposits or accounts, except to the extent such proceeds may be so invested for an initial
temporary period until needed for the purpose for which the Obligations are being executed and
delivered, may be so used in making investments in a bona fide debt service fund or may be
invested in obligations issued by the United States Treasury. City shall comply with the procedures
and covenants contained in any arbitrage rebate provision or separate agreement executed in
connection with the execution and delivery of the Obligations (initially those in subsection (b) and
the Tax Certificate) for so long as compliance is necessary in order to maintain the exclusion from
gross income for federal income tax purposes of the Interest Portion. In consideration of the
purchase and acceptance of the Obligations by the owners from time to time thereof and of
retaining such exclusion and as authorized by Title 35, Chapter 3, Article 7, Arizona Revised
Statutes, as amended, City shall, and the appropriate officials of City are hereby directed, to take
all action required to retain such exclusion or to refrain from taking any action prohibited by the
Code which would adversely affect in any respect such exclusion.
(ii)
(A)
City shall take all necessary and desirable steps, as
determined by the Mayor and Council of City, to comply with the requirements hereunder in order
to ensure that the Interest Portion is excluded from gross income for federal income tax purposes
under the Code; provided, however, compliance with any such requirement shall not be required
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in the event City receives a Special Counsel’s Opinion that either compliance with such
requirement is not required to maintain the exclusion from gross income of the Interest Portion or
compliance with some other requirement will meet the requirements of the Code relating to such
exclusion. In the event City receives such a Special Counsel’s Opinion, the parties agree to amend
this Agreement to conform to the requirements set forth in such opinion.
(B)
If for any reason any requirement hereunder is not
complied with, City shall take all necessary and desirable steps, as determined by City, to correct
such noncompliance within a reasonable period of time after such noncompliance is discovered or
should have been discovered with the exercise of reasonable diligence and City shall pay any
required interest or penalty under hereinafter described Regulations Section 1.148-3(h) with
respect to the Code.
(iii)
Written procedures have been established for City to ensure
that all nonqualified obligations are remediated according to the requirements under the Code and
related Regulations and to monitor the requirements of Section 148 of the Code relating to
arbitrage, with which City will comply.
(b)
(i)
Undefined terms used in this Subsection shall have the
meanings given to them in the Code and the Regulations.
(ii)
Unless an exception is available to the satisfaction of a City
Representative, within 60 days after the end of each Bond Year, City shall cause the Rebate
Requirement to be calculated and shall pay to the United States of America:
(A)
not later than 60 days after the end of the fifth Bond
Year and every fifth Bond Year thereafter, an amount which, when added to the future value of all
previous Rebate Payments with respect to the Obligations (determined as of such Computation
Date), is equal to at least 90% of the sum of the Rebate Requirement (determined as of the last day
of such Bond Year) plus the future value of all previous Rebate Payments with respect to the
Obligations (determined as of the last day of such Bond Year); and
(B)
not later than 60 days after the retirement of the last
Obligation, an amount equal to 100% of the Rebate Requirement (determined as of the date of
retirement of the last Obligation).
Each Rebate Payment required to be made under this Subsection shall be filed on or before the
date such payment is due, with the Internal Revenue Service at the appropriate location and with
required forms and other materials, currently by addressing it to IRS Service Center, Ogden, Utah
84201, and accompanying it with IRS Form 8038-T.
(iii)
No Nonpurpose Investment shall be acquired for an amount
in excess of its fair market value. No Nonpurpose Investment shall be sold or otherwise disposed
of for an amount less than its fair market value.
(iv)
For purposes of paragraph (iii), whether a Nonpurpose
Investment has been purchased or sold or disposed of for its fair market value shall be determined
as follows:
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(A)
The fair market value of a Nonpurpose Investment
generally shall be the price at which a willing purchaser would purchase the Nonpurpose
Investment from a willing seller in a bona fide arm’s length transaction. Fair market value shall
be determined on the date on which a contract to purchase or sell the Nonpurpose Investment
becomes binding.
(B)
Except as provided in Subsections (v) or (vi), a
Nonpurpose Investment that is not of a type traded on an established securities market, within the
meaning of Code Section 1273, is rebuttably presumed to be acquired or disposed of for a price
that is not equal to its fair market value.
(C)
If a United States Treasury obligation is acquired
directly from or sold or disposed of directly to the United States Treasury, such acquisition or sale
or disposition shall be treated as establishing the fair market value of the obligation.
(v)
The purchase price of a certificate of deposit that has a fixed
interest rate, a fixed payment schedule and a substantial penalty for early withdrawal is considered
to be its fair market value if the yield on the certificate of deposit is not less than:
(A)
the
yield
on
reasonably
comparable
direct
obligations of the United States; and
(B)
the highest yield that is published or posted by the
provider to be currently available from the provider on reasonably comparable certificates of
deposit offered to the public.
(vi)
A guaranteed investment contract shall be considered
acquired and disposed of for an amount equal to its fair market value if:
(A)
A bona fide solicitation in writing for a specified
guaranteed investment contract, including all material terms, is timely forwarded to all potential
providers. The solicitation must include a statement that the submission of a bid is a representation
that the potential provider did not consult with any other potential provider about its bid, that the
bid was determined without regard to any other formal or informal agreement that the potential
provider has with City or any other person (whether or not in connection with the Obligations),
and that the bid is not being submitted solely as a courtesy to City or any other person for purposes
of satisfying the requirements in the Regulations that City receive bids from at least one reasonably
competitive provider and at least three providers that do not have a material financial interest in
the Obligations.
(B)
All potential providers have an equal opportunity to
bid, with no potential provider having the opportunity to review other bids before providing a bid.
(C)
At least three reasonably competitive providers (i.e.,
having an established industry reputation as a competitive provider of the type of investments
being purchased) are solicited for bids. At least three bids must be received from providers that
have no material financial interest in the Obligations (e.g., a lead underwriter within 15 days of
the issue date of the Obligations or a financial advisor with respect to the investment) and at least
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one of such three bids must be from a reasonably competitive provider. If City uses an agent to
conduct the bidding, the agent may not bid.
(D)
The highest-yielding guaranteed investment contract
for which a qualifying bid is made (determined net of broker’s fees) is purchased.
(E)
The determination of the terms of the guaranteed
investment contract takes into account as a significant factor the reasonably expected deposit and
drawdown schedule for the amounts to be invested.
(F)
The terms for the guaranteed investment contract are
commercially reasonable (i.e. have a legitimate business purpose other than to increase the
purchase price or reduce the yield of the guaranteed investment contract).
(G)
The provider of the investment contract certifies the
administrative costs (as defined in Regulations Section 1.148-5(e)) that it pays (or expects to pay)
to third parties in connection with the guaranteed investment contract.
(H)
City retains until three years after the last outstanding
Obligation is retired, (1) a copy of the guaranteed investment contract, (2) a receipt or other record
of the amount actually paid for the guaranteed investment contract, including any administrative
costs paid by City and a copy of the provider’s certification described in (G) above, (3) the name
of the person and entity submitting each bid, the time and date of the bid, and the bid results and
(4) the bid solicitation form and, if the terms of the guaranteed investment contract deviate from
the bid solicitation form or a submitted bid is modified, a brief statement explaining the deviation
and stating the purpose of the deviation.
(vii)
Such experts and consultants shall be employed by City to
make, as necessary, any calculations in respect of rebates to be made to the United States of America
in accordance with Section 148(f) of the Code with respect to the Obligations.
(c)
City shall comply with and carry out all of the provisions of the
Continuing Disclosure Undertaking, provided that such costs of compliance shall be payable solely
from revenues from Excise Taxes. Notwithstanding any other provision of this Agreement, failure
of City to comply with the Continuing Disclosure Undertaking shall not be considered an event of
default; however, Trustee may (and, at the request of the original purchaser of the Obligations or
the owners of at least 25% aggregate principal amount in outstanding Obligations and receipt of
indemnity to its satisfaction, shall) take such actions as may be necessary and appropriate,
including seeking specific performance by court order, to cause City to comply with its obligations
under the Continuing Disclosure Undertaking.
(d)
Trustee has no duty or obligations under this Section 11 and has no
duty to monitor compliance by City with this Section 11.
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Section 12.
Covenant as to Conflict of Interest; Other Statutory
Restrictions.
(a)
To the extent applicable by provision of law, Trustee acknowledges
that this Agreement is subject to cancellation pursuant to Section 38-511, Arizona Revised
Statutes, as amended, the provisions of which are incorporated herein and which provides that City
may within three (3) years after its execution cancel any contract (including this Agreement)
without penalty or further obligation made by City if any person significantly involved in initiating,
negotiating, securing, drafting or creating the contract on behalf of City is at any time while the
contract or any extension of the contract is in effect, an employee or agent of any other party to
the contract in any capacity or a consultant to any other party to the contract with respect to the
subject matter of the contract. The cancellation shall be effective when written notice is received
by all other parties to the contract unless the notice specifies a later time. Trustee covenants not
to employ as an employee, an agent or, with respect to the subject matter of this Agreement, a
consultant, any person significantly involved in initiating, negotiating, securing, drafting or
creating this Agreement on behalf of City within three years from the execution of this Agreement,
unless a waiver of Section 38-511, Arizona Revised Statutes, as amended, is provided by City. No
basis exists for City to cancel this Agreement pursuant to Section 38-511, Arizona Revised
Statutes, as amended, as of the date hereof.
(b)
To the extent applicable under Section 41-4401, Arizona Revised
Statutes, as amended, Trustee shall comply with all federal immigration laws and regulations that
relate to its employees and its compliance with the “e-verify” requirements under Section
23-214(A), Arizona Revised Statutes, as amended. The breach by Trustee of the foregoing shall
be deemed a material breach of this Agreement and may result in the termination of the services
of Trustee by City. City retains the legal right to randomly inspect the papers and records of
Trustee to ensure that Trustee is complying with the above-mentioned warranty. Trustee shall
keep such papers and records open for random inspection during normal business hours by City.
Trustee shall cooperate with the random inspections by City including granting City entry rights
onto its property to perform such random inspections and waiving its rights to keep such papers
and records confidential.
(c)
To the extent applicable under Section 35-393 et seq., Arizona
Revised Statutes, as amended, Trustee hereby certifies it is not currently engaged in, and for the
duration of this Agreement shall not engage in, a boycott of Israel. The term “boycott” has the
meaning set forth in Section 35-393, Arizona Revised Statutes, as amended. If City determines
that Trustee’s certification above is false or that it has breached such agreement, City may remove
Trustee hereunder as provided by law.
(d)
To the extent applicable under Section 35-394, Arizona Revised
Statutes, as amended, Trustee hereby certifies it does not currently, and for the duration of this
Agreement shall not use: (i) the forced labor of ethnic Uyghurs in the People’s Republic of China,
(ii) any goods or services produced by the forced labor of ethnic Uyghurs in the People’s Republic
of China, and (iii) any contractors, subcontractors or suppliers that use the forced labor or any
goods or services produced by the forced labor of ethnic Uyghurs in the People’s Republic of
China. The foregoing certification is made to the best knowledge of Trustee without any current
independent investigation or without any future independent investigation for the duration of this
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Agreement. If Trustee becomes aware during the duration of this Agreement that it is not in
compliance with such certification, Trustee shall take such actions as provided by law, including
providing the required notice to City. If City determines that Trustee is not in compliance with the
foregoing certification and has not taken remedial action, City shall terminate Trustee’s role as
Trustee hereunder pursuant to Article VII of the Trust Agreement.
Section 13.
Reserve Fund. If a Reserve Fund is required by the Trust
Agreement, then City shall deposit, or cause to be deposited, to the Reserve Fund moneys,
investments, a Reserve Fund Guaranty, or any combination thereof, equal to the Reserve Fund
Requirement in accordance with the Reserve Fund funding schedule described in the Trust
Agreement as additional amounts due under this Agreement. In the event the amount on deposit
in the Reserve Fund is less than the Reserve Fund Requirement, no amount of revenues from
Excise Taxes shall be considered surplus revenues or available to City until the Reserve Fund has
been restored to the Reserve Fund Requirement.
Section 14.
Miscellaneous.
(a)
No covenant or obligation herein to be performed by City may be
waived except by the written consent of Trustee, and a waiver of any such covenant or obligation
or a forbearance to invoke any remedy on any occasion shall not constitute or be treated as a waiver
of such covenant or obligation as to any other occasion and shall not preclude Trustee from
invoking such remedy at any later time prior to the cure by City of the condition giving rise to such
remedy.
(b)
This Agreement shall be construed and governed in accordance with
the laws of the State in effect from time to time.
(c)
The recitals set forth at the beginning of this Agreement are
incorporated in this Agreement by this reference. This Agreement constitutes the entire agreement
between the parties and shall not be modified, waived, discharged, terminated, amended,
supplemented, altered or changed in any respect except by a written document signed by both
Trustee and City, subject to the restrictions with regard thereto provided by the Trust Agreement.
(d)
Any term or provision of this Agreement found to be prohibited by
law or unenforceable or which would cause this Agreement to be invalid, prohibited by law or
unenforceable shall be ineffective to the extent of such prohibition or unenforceability without, to
the extent reasonably possible, causing the remainder of this Agreement to be invalid, prohibited
by law or unenforceable.
(e)
The captions set forth herein are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.
(f)
Except as otherwise provided herein, this Agreement shall be
binding upon and inure to the benefit of the parties and their respective heirs, successors, assigns
and personal representatives, as the case may be. Any person or entity acquiring any interest in or
to the right, title or interest of Trustee herein shall be and have the rights of a third-party beneficiary
hereunder.
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(g)
This Agreement may be executed in any number of counterparts,
each of which shall be regarded as an original and all of which shall constitute but one and the
same instrument.
[Signature page follows.]
[Signature page to Series 2023 Purchase Agreement]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
Trustee:
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Seller
By ...............................................................................
Authorized Representative
City:
CITY OF CHANDLER, ARIZONA, a municipal
corporation under the laws of the State of
Arizona, as Purchaser
By ...............................................................................
Mayor
ATTEST:
........................................................................
City Clerk
Page 1 of Schedule
SCHEDULE
Payment
Date
Principal
Interest
Total
Payment
TOTAL