HomeMy WebLinkAbout1997-38 Flood Bonds RESOLUTION NO. ~:~ 7 '",_~ ff
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF ASHLAND, JACKSON COUNTY, OREGON,
BE IT RESOLVED by the City Council of the City of Ashland that
1. Findings
The City Council finds as follows:
1.1. In May of 1997 a majority of the registered voters of the City cast ballots and a
majority of those casting.ballots authorized the City to issue up to $1,250,000 of
general obligation bonds to finance flood restoration projects for the City.
1.2. The City's outstanding General Obligation Water Bonds, Series 1992 (the "Series
1992 Bonds") bear interest at rates that are higher than the rates currently available to
the City in the bond market. The City and its tax and ratepayers may reduce debt
service costs by advance refunding the Series 1992 Bonds.
1.3. The City is authorized by Article XI, Section 11 of the Oregon Constitution and
ORS 288.605 to 288.695 to issue general obligation bonds to advance refund
outstanding general obligation bonds of the City.
1.4. The approval of the State Treasurer is required before such Bonds may be issued,
and a refunding plan must be submitted to the State Treasurer demonstrating that the
refunding will produce debt service savings before the State Treasurer may approve the
refimding.
2. Plan Submission.
The Finance Director or the City's financial advisor are hereby authorized, on behalf
of the City, to submit a refunding plan for the Series 1992 Bonds to the State
Treasurer for review and approval.
Section 3. Bonds Authorized.
The City is hereby authorized to issue its General Obligation Flood Restoration and
Refunding Bonds, Series 1997 (the "Bonds"). Bond proceeds may be used for the
purposes specified in the ballot approved by the voters in May, 1997, to refund the
Series 1992 Bonds, and to pay costs of issuing the Bonds. The Director of Finance
(the "City Official"), on behalf of the City and without further action by the City
Council, may:
3.1. Participate in the preparation and authorize the distribution of a preliminary
official statement or other disclosure document for the Bonds;
3.2. Appoint a paying agent (the "Paying Agent")iiiand an escrow agent to provide
services in connection with the Bonds;
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3.3. Prepare a notice of sale and advertise for bids for the Bonds, or select one or
more underwriters and negotiate the terms of, and execute, a Bond purchase agreement
with the those underwriters;
3.4. Determine whether the Bonds will be issued in one or more series, and establish
the principal amount, interest rates, redemption terms, payment dates and other terms
of the Bonds, provided that the Bonds issued to refund the Series 1992 Bonds shall
produce debt service savings having a present value of not less than three percent of
the principal amount of the Bonds which are allocable to the refunding, and the Bonds
which are issued to finance flood restoration shall not bear interest at an effective rate
of more than eight percent per annum;
3.5. The principal amount of Bonds issued for flood restoration costs (including costs
of issuance), shall not exceed $1,250,000.
3.6. Execute and deliver an escrow deposit agreement (the "Escrow Deposit
Agreement"), in substantially the form attached as Exhibit B, with such changes as the
City Official finds are in the best interests of the City, and authorize the purchase of
securities to be held under the Escrow Deposit Agreement;
3.7. Undertake to provide continuing disclosure relating to the Bonds pursuant to
Section (b)(5) of Rule 15c2-12, as amended of the Securities Exchange Act of 1934;
and
3.8.i?iilssue, sell and deliver the Bonds, and execute and deliver any related certificates
or documents which are reasonably required to refund the Series 1992 Bonds in
accordance with this resolution.
Section 4. Security For Bonds.
The Bonds shall be general obligations of the City, and the full faith and credit of the
City are pledged to the successive owners of each of the Bonds for the punctual
payment of such obligations, when due. The City shall levy annually, as provided by
law, a direct ad valorem tax upon all of the taxable property within the City in
sufficient amount, after taking into consideration discounts taken and delinquencies
that may occur in the payment of such taxes and other moneys available for the
payment of debt service on the Bonds, to pay the Bonds promptly as they mature. The
City covenants with the owners of the Bonds to levy such a tax annually during each
year that any of the Bonds are outstanding.
Section 5. Bond Book-Entry Form.
5.1. The Bonds shall be initially issued in book-entry form, with no Bonds being
made available to the Bondowners in accordance with the City's blanket letter of
representations to The Depository Trust Company, New York, New York ("DTC").
So long as the Bonds are in book-entry form:
5.1.1. Ownership of the Bonds shall be recorded through entries on the books of
banks and broker-dealer participants and correspondents that are related to entries
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on the DTC system. The Bonds shall be initially issued in the form of a global
bond for each maturity. Each global bond shall be registered in the name of
Cede & Co. as nominee of DTC as the owner of the Bond, and such global bonds
shall be lodged with DTC until early redemption or maturity of the Bond issue.
5.1.2. The Registrar shall remit payment for the maturing principal and interest on
the Bonds to DTC as owner of the Bonds for distribution by the nominee to the
beneficial owners by recorded entry on the books of DTC participants and
correspondents. While the Bonds are in book-entry form, the Bonds will be
available in denominations of $5,000 or any integral multiple thereof.
5.2. Upon the resignation of any institution acting as depository hereunder, or if the
City determines that continuation of any institution in the role of depository is not in
the best interests of the beneficial owners, the City shall attempt to identify another
institution qualified to act as depository hereunder or shall discontinue maintaining the
Bonds in book-entry form by resolution or ordinance. If the City is unable to identify
such successor depository prior to the effective date of the resignation, the City shall
discontinue maintaining the Bonds in book-entry form as provided above.
5.3. While the Bonds are in book-entry only form, the City and the Paying Agent
shall have no responsibility or obligation to any participant or correspondent of the
depository or to any beneficial owner on behalf of which such participants or
correspondents act as agent for the beneficial owner with respect to:
5.3.1. the accuracy of the records of the depository, the Nominee or any
participant or correspondent with respect to any beneficial owner's interest in the
Bonds;
5.3.2. the delivery to any participant or correspondent or any other person of any
notice with respect to the Bonds, including any notice of prepayment;
5.3.3. the selection by the depository of the beneficial interest in Bonds to be
redeemed prior to maturity; or
5.3.4. the payment to any participant, correspondent, or any other person other
than the registered owner of the Bonds as shown in the registration books
maintained by the Paying Agent, of any amount with respect to principal or interest
on the Bonds.
5.4. So long as the Bonds are in book-entry form, the Paying Agent will give any
notice of redemption or any other notices required to be given to registered owners of
Bonds only to the depository or its nominee registered as the registered owner thereof.
Any failure of the depository to advise any of its participants, or of any participant to
notify the beneficial owner, of any such notice and its content or effect will not affect
the validity of the redemption of the Bonds called for redemption or of any other
action premised on such notice. Neither the City nor the Paying Agent is responsible
or liable for the failure of the depository or any participant to make any payment or
give any notice to a beneficial owner in respect of the Bonds or any error or delay
relating thereto.
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5.5. The City shall pay or cause to be paid all principal and interest on the Bonds
only to or upon the order of the owner, as shown in the registration books maintained
by the Paying Agent, or their respective attorneys duly authorized in writing, and all
such payments shall be valid and effective to fully satisfy and discharge the City's
obligation with respect to payment thereof to the extent of the sum or sums so paid.
5.6. The provisions of this Section may be modified without the consent of the
beneficial owners in order to conform this Section to the standard practices of DTC for
bonds issued in book-entry form.
Section 6. Notice of Redemption of Bonds.
6.1. Notice of Redemption (DTC). So long as the Bonds arc in book-entry form, the
Paying Agent shall notify DTC of any early redemption not less than 30 days prior to
the date fixed for redemption, and shall provide the information required under the
blanket letter of representations.
6.2. Notice of Redemption (No DTC). During any period in which the Bonds are
not in book-entry form, unless waived by any Owner of the Bonds to be redeemed,
official notice of any redemption of Bonds shall be given by the Paying Agent on
behalf of the City by mailing a copy of an official redemption notice by first class
mail postage prepaid at least 30 days and not more than 60 days prior to the date fixed
for redemption to the Owner of the Bond or Bonds to be redeemed at the address
shown on the bond register or at such other address as is furnished in writing by such
owner to the Paying Agent. The City shall notify the Paying Agent of any intended
redemption not less than 45 days prior to the redemption date. All such official
notices of redemption shall be dated and shall state:
6.2.1. the redemption date,
6.2.2. the redemption price,
6.2.3. if less than all outstanding Bonds are to be redeemed, the identification
(and, in the case of partial redemption, the respective principal amounts) of the
Bonds to be redeemed,
6.2.4. that on the redemption date the redemption price will become due and
payable upon each such Bond or portion thereof called for redemption, and that
interest thereon shall cease to accrue from and after said date, and
6.2.5. the place where such Bonds are to be surrendered for payment of the
redemption price, which place of payment shall be the principal office of the
Paying Agent.
6.2.6. Prior to any redemption date, the City shall deposit with the Registrar an
amount of money sufficient to pay the redemption price of all the Bonds or
portions of Bonds which are to be redeemed on that date.
6.2.7. Official notice of redemption having been given as aforesaid, the Bonds or
portions of Bonds so to be redeemed shall, on the redemption date, become due
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and payable at the redemption price therein specified, and from and after such date
(unless the City shall default in the payment of the redemption price) such Bonds
or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds
for redemption in accordance with said notice, such Bonds shall be paid by the
Registrar at the redemption price. Installments of interest due on or prior to the
redemption date shall be payable as herein provided for payment of interest. Upon
surrender for any partial redemption of any Bond, there shall be prepared for the
registered owner a new Bond or Bonds of the same maturity in the amount of the
unpaid principal. All Bonds which have been redeemed shall be canceled and
destroyed by the Registrar and shall not be reissued.
Section 7. Authentication, Registration And Transfer.
7.1. No Bond shall be entitled to any right or benefit under this resolution unless it
shall have been authenticated by an authorized officer of the Paying Agent. The
Paying Agent shall authenticate all Bonds to be delivered at closing of the Bonds, and
shall additionally authenticate all Bonds properly surrendered for exchange or transfer
pursuant to this resolution.
7.2. The ownership of all Bonds shall be entered in the bond register maintained by
the Paying Agent, and the City and the Paying Agent may treat the person listed as
owner in the bond register as the owner of the Bond for all purposes.
7.3. While the Bonds are in book-entry form, the Paying Agent shall transfer Bond
principal and interest payments in the manner required by DTC.
7.4. If the Bonds cease to be in book-entry form, the Paying Agent shall mail each
interest payment on the interest payment date (or the next business day if the payment
date is not a business day) to the name and address of the Bondowners as they appear
on the bond register as of the fifteenth day of the month preceding an interest payment
date (the "Record Date"). If payment is so mailed, neither the City nor the Paying
Agent shall have any further liability to any party for such payment.
7.5. Bonds may be exchanged for an equal principal amount of Bonds of the same
maturity which are in different denominations, and Bonds may be transferred to other
owners if the Bondowner submits the following to the Paying Agent:
7.5.1. written instructions for exchange or transfer satisfactory to the Paying
Agent, signed by the Bondowner or attorney in fact and guaranteed or witnessed in
a manner satisfactory to the Paying Agent; and
7.5.2. the Bonds to be exchanged or transferred.
7.6. The Paying Agent shall not be required to exchange or transfer any Bonds
submitted to it during any period beginning with a Record Date and ending on the
next following payment date; however, such Bonds shall be exchanged or transferred
promptly following that payment date.
7.7. The Paying Agent shall note the date of authentication on each Bond. The date
of authentication shall be the date on which the Bondowner's name is listed on the
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bond register.
7.8. For purposes of this section, Bonds shall be considered submitted to the Paying
Agent on the date the Paying Agent actually receives the materials described in
Section 7.5.
7.9. The City may alter these provisions regarding registration and transfer by mailing
notification of the altered provisions to all Bondowners. The altered provisions shall
take effect on the date stated in the notice, which shall not be earlier than 45 days
after notice is mailed.
Section 8. Bond Insurance.
The City Official may apply for municipal bond insurance for the Bonds, and may
expend Bond proceeds to pay any bond insurance premium.
Section 9. Form of Bonds; Execution.
The Bonds shall be in substantially the form attached hereto as Exhibit A, with such
changes as may be approved by the City Official. The Bonds may be printed or
typewritten, and may be issued as one or more temporary Bonds which shall be
exchangeable for definitive Bonds when definitive Bonds are available. The Bonds
shall be executed on behalf of the City with the facsimile signatures of the Mayor and
City Recorder.
Section 10. Tax-Exempt Status.
10.1. The City covenants to use the proceeds of the Bonds, and the facilities financed
with the Series 1992 Bonds and the Bonds, and to otherwise comply with the
provisions of the Internal Revenue Code of 1986, as amended (the "Code"), so that
interest paid on the Bonds will not be includable in gross income of the Bondowners.
The City specifically covenants:
10.1.1. to comply with the "arbitrage" provisions of Section 148 of the Code, and
pay any rebates due to the United States on the gross proceeds of the Bonds;
10.1.2. to yield restrict and pay any rebates due to the United States on any
unexpended proceeds of the Series 1992 Bonds and the proceeds of the Bonds; and
10.1.3. to operate the facilities which were financed with the proceeds of the
Series 1992 Bonds, any facilities which are financed with the unexpended proceeds
of the Series 1992 Bonds, and any facilities financed with the proceeds of the
Bonds, so that the Bonds are not "private activity bonds" under Section 141 of the
Code.
10.2. The City Official may enter into covenants on behalf of the City to protect the
tax-exempt status of the Bonds.
Section 11. Designation of Bonds as Qualified Tax-Exempt Obligations.
The City designates the Bonds as qualified tax-exempt obligations pursuant to
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Section 265(b)(3) of the Code. The City covenants not to so designate tax-exempt
obligations in the current calendar year in an aggregate amount of more than
$10,000,000. The City (and all subordinate entities thereof, if any) does not
reasonably expect to issue more than $10,000,000 of tax-exempt obligations during the
current calendar year.
Section 12. Escrow.
The net proceeds of the Bonds which will be used to pay the Series 1992 Bonds shall
be placed in irrevocable escrow, pursuant to the Escrow Deposit Agreement. The
escrow agent or the City Official are hereby authorized to subscribe for and purchase
the government obligations to be placed in the escrow, on behalf of the City.
Section 13. Defeasance.
If the City:
14.1. irrevocably deposits money or noncallable, direct obligations of the United
States or obligations the principal of and interest on which are fully and
unconditionally guaranteed by the United States ("Government Obligations") in escrow
with an independent trustee or escrow agent which are calculated to be sufficient for
the payment of Bonds which are to be defeased; and,
14.2. files with the escrow agency or trustee an opinion from an independent, certified
public accountant to the effect that the money and the principal and interest to be
received from the Government Obligations are calculated to be sufficient, without
further reinvestment, to pay the defeased Bonds when due; and,
14.3. files with the escrow agent or trustee an opinion of nationally recognized bond
counsel that the proposed defeasance will not cause the interest component of the
Bonds to be includable in gross income under the Code;
then the City shall be obligated to pay the defeased Bonds solely from the money and
Government Obligations deposited with the escrow agent or trustee, and the City shall
have no further obligation to pay the defeased Bonds from any source except the
amounts deposited in the escrow.
This resolution was read by title only in accordance with Ashland
Municipal Code §2.04.090 duly PASSED and ADOPTED this 18th day of November,
1997.
Barbara Christcnscn, City Recorder
SIGNED and APPROVED this//~ day of/ff~gd/~--~-
,19~7
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Reviewed as to form:
Pa~ul N~o te,~City AI~t~ ney
Catherine Golden, Mayor
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EXHIBIT A
(Form of Bond)
No. R-1
$
United States of America
State of Oregon
City of Ashland
Jackson County, Oregon
General Obligation Flood Restoration and Refunding Bonds
Series 1997
Dated Date: , 1997
Interest Rate Per Annum: CouponRate-%
Maturity Date: October 1, MaturityYear-
CUSIP Number: CUSIPNumbr-
Registered Owner: ..... CEDE & CO.- ....
Principal Amount:
..... PrincipalAmtSpelled- DOLLARS .....
The City of Ashland, Jackson County, Oregon (the City"), for value received,
acknowledges itself indebted and hereby promises to pay to the Registered Owner hereof, or registered
assigns, the Principal Amount indicated above on the Maturity Date indicated above together with
interest thereon from the date hereof at the Interest Rate Per Annum indicated above, computed on the
basis of a 360-day year of twelve 30-day months. Interest is payable semiannually on the first day of
__ and the first day of__ in each year until maturity or prior redemption, commencing___, 1998.
Payment of each installment of principal or interest shall be made to the Registered Owner hereof whose
name appears on the registration books of the City maintained by the City's paying agent and registrar,
which is currently , in Portland, Oregon (the "Registrar") as of the close of business on the
fifteenth day of the calendar month immediately preceding the applicable interest payment date. For so
long as this Bond is subject to a book-entry-only system, principal and interest payments shall be paid
on each payment date to the nominee of the securities depository for the Bonds. On the date of
issuance of this Bond, the securities depository for the Bonds is The Depository Trust Company,
New York, New York, and Cede & Co. is the nominee of The Depository Trust Company. Such
payments shall be made payable to the order of "Cede & Co."
This Bond is one of the City's duly authorized series of $__ aggregate principal
amount of General Obligation Flood Restoration and Refunding Bonds, Series 1997 (the "Bonds"), and
is issued by the City for the purpose of financing flood restoration projects and refunding a portion of
the City's General Obligation Water Bonds, Series 1992 in full and strict accordance and compliance
with all of the provisions of the Constitution and Statutes of the State of Oregon and the Charter of the
City.
This Bond is a general obligation of the City, and the full faith and credit of the City
are pledged to the successive owners of each of the Bonds for the punctual payment of such obligations,
when due. The City shall levy annually, as provided by law, a direct ad valorem tax upon all of the
taxable property within the City in sufficient amount, after taking into consideration discounts taken and
delinquencies that may occur in the payment of such taxes and other moneys available for the payment
of debt service on the Bonds, to pay the Bonds promptly as they mature. The City has covenanted with
the owners of the Bonds to levy such a tax annually during each year that any of the Bonds are
outstanding.
The Bonds are initially issued as a book-entry-only security issue with no certificates
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provided to the beneficial owners. Records of ownership of beneficial interests in the Bonds will be
maintained by The Depository Trust Company and its participants.
Should the book-entry only security system be discontinued, the Bonds shall be issued
in the form of registered Bonds without coupons in denominations of $5,000 or any integral multiple
thereof. Such Bonds may be exchanged for Bonds of the same aggregate principal amount, interest rate
and maturity date, but different authorized denominations, as provided in the Resolution.
The Bonds shall mature and be subject to redemption as provided in the final official
statement for the Bonds which is dated , 1997.
Unless the book-entry-only system is discontinued, notice of any call for redemption
shall be given as required by the Blanket Issuer Letter of Representations to The Depository Trust
Company, as referenced in the Resolution. Interest on any Bond or Bonds so called for redemption
shall cease on the redemption date designated in the notice. The Registrar will notify The Depository
Trust Company of any Bonds called for redemption not less than 30 days prior to the date fixed for
redemption. Notice of redemption shall be published as provided by law. If the book-entry-only system
is discontinued, notice of redemption shall be given by certified or registered mail not less than thirty
days nor more than sixty days prior to the date fixed for redemption to the Registered Owner of each
Bond to be redeemed at the address shown on the Bond register; however, any failure to give notice
shall not invalidate the redemption of the Bonds..
Any exchange or transfer of this Bond must be registered, as provided in the
Resolution, upon the Bond register kept for that purpose by the Registrar. The exchange or transfer of
this Bond may be registered only by surrendering it, together with a written instrument of exchange or
transfer which is satisfactory to the Registrar and which is executed by the registered owner or duly
authorized attorney. Upon registration, a new registered Bond or Bonds, of the same series and maturity
and in the same aggregate principal amount, shall be issued to the transferee as provided in the
Resolution. The City and the Registrar may treat the person in whose name this Bond is registered on
the Bond register as its absolute owner for all purposes, as provided in the Resolution.
IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all conditions, acts,
and things required to exist, to happen, and to be performed precedent to and in the issuance of this
Bond have existed, have happened, and have been performed in due time, form, and manner as required
by the Constitution and Statutes of the State of Oregon and the Charter of the City; that the issue of
which this Bond is a part, and all other obligations of such City, are within every debt limitation and
other limits prescribed by such Constitution, Statutes and Charter.
IN WITNESS WHEREOF, the City Council has caused this Bond to be signed by
facsimile signature of its Mayor and attested by facsimile signature of its Recorder as of the date
indicated above.
City of Ashland,
Jackson County, Oregon
Mayor
Recorder
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THIS BOND SHALL NOT BE VALID UNLESS PROPERLY AUTHENTICATED
BY THE REGISTRAR IN THE SPACE INDICATED BELOW.
CERTIFICATE OF AUTHENTICATION
This is one of the $ aggregate principal amount of City of Ashland, Oregon
General Obligation Flood Restoration and Refunding Bonds, Series 1997, issued pursuant to the
Resolution described herein.
Date of authentication: , 1997.
, as Registrar
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
(Please insert social security or other identifying number of assignee)
this Bond and does hereby irrevocably constitute and appoint
as attorney to transfer this Bond on the books kept for registration thereof with the full power of
substitution in the premises.
Dated:
NOTICE: The signature to this assignment must correspond with the name of the registered owner as it
appears upon the face of this Bond in every particular, without alteration or enlargement or any change
whatever.
NOTICE: Signature(s) must be guaranteed by a member Signature Guaranteed
of the New York Stock Exchange or a commercial bank or
trust company (Bank, Trust Company or Brokerage Finn)
Authorized Officer
The following abbreviations, when used in the inscription on the face of this Bond,
shall be construed as though they were written out in full according to applicable laws or regulations.
TEN COM -- tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship
and not as tenants in common
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OREGON CUSTODIANS use the following CUST UL OREG
as custodian for (name of minor)
OR UNIF TRANS MIN ACT
under the Oregon Uniform Transfer to Minors Act
MIN
Additional abbreviations may also be used though not in the list above.
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Exhibit B to Resolution
FORM OF
ESCROW DEPOSIT AGREEMENT
$
City of Ashland
Jackson County, Oregon
General Obligation Flood Restoration and Refunding Bonds, Series 1997
THIS ESCROW AGREEMENT, dated as of , 1997 (herein, together with any
amendments or supplements hereto, called the "Agreement") is entered into by and between the City of
Ashland (herein called the "Issuer") and __, as escrow agent (herein, together with any successor
in such capacity, called the "Escrow Agent"). The notice addresses of the Issuer and the Escrow Agent
are shown on Exhibit A attached hereto and made a part hereof.
WITNESSETH:
WHEREAS, the Issuer heretofore has issued and there presently remain outstanding
the obligations described in Exhibit B attached hereto (the "Refunded Bonds"); and
WHEREAS, Pursuant to a resolution adopted on , 1997, (the "Authorizing
Action"), the Issuer has determined to issue its General Obligation Flood Restoration and Refunding
Bonds, Series 1997 (the "Refunding Bonds") for the purpose of providing funds to pay the costs of
refunding the Refunded Bonds; and
WHEREAS, the Escrow Agent has reviewed the Authorizing Action and this
Agreement, and is willing to serve as Escrow Agent hereunder.
WHEREAS, , Certified Public Accountants, have prepared a verification
report which is dated __, 1997 (the "Verification Report") relating to the source and use of funds
available to accomplish the refunding of the Refunded Bonds, the investment of such funds and the
adequacy of such funds and investments to provide for the payment of the debt service due on the
Refunded Bonds.
WHEREAS, pursuant to the Authorizing Action, the Refunded Bonds have been
designated for redemption prior to their scheduled maturity dates and, after provision is made for such
redemption, the Refunded Bonds will come due in such years, bear interest at such rates, and be payable
at such times and in such amounts as are set forth in Exhibit C attached hereto and made a part hereof;
and
WHEREAS, when Escrowed Securities have been deposited with the Escrow Agent for
the payment of all principal and interest of the Refunded Bonds when due, then the Refunded Bonds
shall no longer be regarded as outstanding except for the purpose of receiving payment from the funds
provided for such purpose; and
WHEREAS, the Issuer's Authorizing Action authorizes the Issuer to issue Refunding
Bonds and to deposit the proceeds from the sale thereof, and any other available funds or resources,
with the Escrow Agent for the discharge and final payment of the Refunded Bonds; and
WHEREAS, the Authorizing Action further authorizes the Issuer to enter into an
escrow agreement with the Escrow Agent with respect to the holding, investment, administration and
disposition of any such deposit, upon such terms and conditions as the Issuer and the Escrow Agent may
agree, provided that such deposits may be invested only in direct obligations of the United States of
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America, including obligations the principal of and interest on which are unconditionally guaranteed by
the United States of America, and which may be in book entry form, and which shall mature and/or
bear interest payable at such times and in such amounts as will be sufficient to provide for the scheduled
payment of the principal of, interest and redemption premium (if any) on the Refunded Bonds when
due; and
WHEREAS, the issuance, sale, and delivery of the Refunding Bonds have been duly
authorized to be issued, sold, and delivered for the purpose of obtaining the funds required to provide
for the payment of the principal of, interest on and redemption premium (if any) on the Refunded Bonds
when due as shown on Exhibit C attached hereto; and
WHEREAS, the Issuer desires that, concurrently with the delivery of the Refunding
Bonds to the purchasers thereof, certain proceeds of the Refunding Bonds, together with certain other
available funds of the Issuer, shall be applied to purchase certain direct obligations of the United States
of America hereinafter defined as the "Escrowed Securities" for deposit to the credit of the Escrow Fund
created pursuant to the terms of this Agreement and to establish a beginning cash balance (if needed) in
such Escrow Fund; and
WHEREAS, the Escrowed Securities shall mature and the interest thereon shall be
payable at such times and in such amounts so as to provide moneys which, together with cash balances
from time to time on deposit in the Escrow Fund, will be sufficient to pay interest on the Refunded
Bonds as it accrues and becomes payable and the principal of the Refunded Bonds as it becomes due
and payable; and
WHEREAS, to facilitate the receipt and transfer of proceeds of the Escrowed
Securities, particularly those in book entry form, the Issuer desires to establish the Escrow Fund at the
corporate trust office of the Escrow Agent; and
WHEREAS, the Escrow Agent is a party to this Agreement to acknowledge its
acceptance of the terms and provisions hereof;
NOW, THEREFORE, in consideration of the mutual undertakings, promises and
agreements herein contained, the sufficiency of which hereby are acknowledged, and to secure the full
and timely payment of principal of and the interest and redemption premium (if any) on the Refunded
Bonds, the Issuer and the Escrow Agent mutually undertake, promise and agree for themselves and their
respective representatives and successors, as follows:
Article 1. Definitions and Interpretations.
Section 1.1. Definitions.
Unless the context clearly indicates otherwise, the following terms shall have the
meanings assigned to them below when they are used in this Agreement:
"Escrow Fund" means the fund created by this Agreement to be established, held and
administered by the Escrow Agent pursuant to the provisions of this Agreement.
"Escrowed Securities" means the noncallable Government Obligations described in
Exhibit D attached to this Agreement, or cash or other Government Obligations substituted therefor
pursuant to Section 4.2 of this Agreement.
"Government Obligations" means (a) direct, noncallable United States Treasury
Obligations, (b) United States Treasury Obligations - State and Local Government Series, (c) direct,
noncallable, non-prepayable obligations which are unconditionally guaranteed as to full and timely
payment of principal and interest by the United States of America or (d) direct, noncallable REFCORP
debt obligations including STRIPS from noncallable REFCORP debt obligations or STRIPS (stripped by
the Federal Reserve Bank of New York).
Page 14 - Appendix A (Notice of Redemption)
"Paying Agent" means , as the paying agent for the Refunded Bonds.
Section 1.2. Other Definitions.
The terms "Agreement", "Issuer", "Escrow Agent", "Authorizing Action", "Verification
Report", "Refunded Bonds", and "Refunding Bonds" when they are used in this Agreement, shall have
the meanings assigned to them in the preamble to this Agreement.
Section 1.3. Interpretations.
The titles and headings of the articles and sections of this Agreement have been
inserted for convenience and reference only and are not to be considered a part hereof and shall not in
any way modify or restrict the terms hereof. This Agreement and all of the terms and provisions hereof
shall be liberally construed to effectuate the purposes set forth herein and to achieve the intended
purpose of providing for the refunding of the Refunded Bonds in accordance with applicable law.
Article 2. Deposit of Funds and Escrowed Securities.
Section 2.1. Deposits in the Escrow Fund.
Concurrently with the sale and delivery of the Refunding Bonds the Issuer shall
deposit, or cause to be deposited, with the Escrow Agent, for deposit in the Escrow Fund, the funds and
Escrowed Securities described in Exhibit D attached hereto, and the Escrow Agent shall, upon the
receipt thereof, acknowledge such receipt to the Issuer in writing.
Article 3. Creation and Operation of Escrow Fund.
Section 3.1. Escrow Fund.
The Escrow Agent has created on its books a special trust fund and irrevocable escrow
to be known as the City of Ashland General Obligation Flood Restoration and Refunding Bonds, Series
1997, Escrow Fund (the "Escrow Fund"). The Escrow Agent hereby agrees that upon receipt thereof it
will deposit to the credit of the Escrow Fund the funds and the Escrowed Securities described in Exhibit
"D" attached hereto. Such deposit, all proceeds therefrom, and all cash balances from time to time on
deposit therein (a) shall be the property of the Escrow Fund, (b) shall be applied only in strict
conformity with the terms and conditions of this Agreement, and (c) are hereby irrevocably pledged to
the payment of the principal of and interest on the Refunded Bonds, which payment shall be made by
timely transfers of such amounts at such times as are provided for in Section 3.2 hereof. When the final
transfers have been made for the payment of such principal of and interest on the Refunded Bonds, any
balance then remaining in the Escrow Fund shall be transferred to the Issuer, and the Escrow Agent
shall thereupon be discharged from any further duties hereunder.
Section 3.2. Payment of Principal and Interest.
The Escrow Agent is hereby irrevocably instructed to transfer to the Paying Agent
from the cash balances from time to time on deposit in the Escrow Fund, the amounts required to pay
the principal of the Refunded Bonds at their respective maturity or redemption dates and interest thereon
to such maturity or redemption dates together with any redemption premium in the amounts and at the
times shown in Exhibit C attached hereto.
Section 3.3. Sufficiency of Escrow Fund.
The Issuer represents that, based upon the information provided in the Verification
Report, the successive receipts of the principal of and interest on the Escrowed Securities will assure
that the cash balance on deposit from time to time in the Escrow Fund will be at all times sufficient to
provide moneys for transfer to the Paying Agent at the times and in the amounts required to pay the
interest on the Refunded Bonds as such interest comes due and the principal of the Refunded Bonds as
the Refunded Bonds are redeemed, all as more fully set forth in Exhibit E attached hereto. If, for any
reason, at any time, the cash balances on deposit or scheduled to be on deposit in the Escrow Fund shall
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be insufficient to transfer the amounts required by the Paying Agent to make the payments set forth in
Section 3.2. hereof, the Issuer shall timely deposit in the Escrow Fund, from any funds that are lawfully
available therefor, additional funds in the amounts required to make such payments. Notice of any such
insufficiency shall be given promptly as hereinafter provided, but the Escrow Agent shall not in any
manner be responsible for any insufficiency of funds in the Escrow Fund or the Issuer's failure to make
additional deposits thereto.
Section 3.4. Trust Fund.
The Escrow Agent shall hold at all times the Escrow Fund, the Escrowed Securities
and all other assets of the Escrow Fund, wholly segregated from all other funds and securities on deposit
with the Escrow Agent; it shall never allow the Escrowed Securities or any other assets of the Escrow
Fund to be commingled with any other funds or securities of the Escrow Agent; and it shall hold and
dispose of the assets of the Escrow Fund only as set forth herein. The Escrowed Securities and other
assets of the Escrow Fund shall always be maintained by the Escrow Agent as trust funds for the benefit
of the owners of the Refunded Bonds; and a special account thereof shall at all times be maintained on
the books of the Escrow Agent. The owners of the Refunded Bonds shall be entitled to the same
preferred claim and first lien upon the Escrowed Securities, the proceeds thereof, and all other assets of
the Escrow Fund to which they are entitled as owners of the Refunded Bonds. The amounts received by
the Escrow Agent under this Agreement shall not be considered as a banking deposit by the Issuer, and
the Escrow Agent shall have no right to title with respect thereto except as a trustee and Escrow Agent
under the terms of this Agreement. The amounts received by the Escrow Agent under this Agreement
shall not be subject to warrants, drafts or checks drawn by the Issuer or, except to the extent expressly
herein provided, by the Paying Agent.
Section 3.5. Security for Cash Balances.
Cash balances from time to time on deposit in the Escrow Fund shall, to the extent not
insured by the Federal Deposit Insurance Corporation or its successor, be continuously secured by a
pledge of direct obligations of, or obligations unconditionally guaranteed by, the United States of
America, having a market value at least equal to such cash balances.
Article 4. Limitation on Investments.
Section 4.1. Investments.
Except for the initial investment in the Escrowed Securities, and except as provided in
Section 4.2 hereof, the Escrow Agent shall not have any power or duty to invest or reinvest any money
held hereunder, or to make substitutions of the Escrowed Securities, or to sell, transfer, or otherwise
dispose of the Escrowed Securities.
Section 4.2. Substitution of Securities.
At the written request of the Issuer, and upon compliance with the conditions
hereinafter stated, the Escrow Agent shall utilize cash balances in the Escrow Fund, or sell, transfer,
otherwise dispose of or request the redemption of the Escrowed Securities and apply the proceeds
therefrom to purchase Refunded Bonds or Government Obligations which do not permit the redemption
thereof at the option of the obligor, and in connection therewith the issuer reserves the right to call for
redemption prior to maturity any of the Refunded Bonds to the extent permitted by their authorizing
order. Any such transaction may be effected by the Escrow Agent only if (a) the Escrow Agent shall
have received a written opinion from a nationally recognized firm of certified public accountants that
such transaction will not cause the amount of money and securities in the Escrow Fund to be reduced
below an amount sufficient to provide for the full and timely payment of principal of, redemption
premium on and interest on all of the remaining Refunded Bonds as they become due, taking into
account any optional redemption thereof exercised by the Issuer in connection with such transaction;
(b) the Escrow Agent shall have received the unqualified written legal opinion of nationally recognized
Page 16 - Appendix A (Notice of Redemption) ~PTLI~BOND~HWR\CITIES~ASHLAND\GO'97,,~R~,S.~:,~D,.OiC~9,
bond counsel or tax counsel to the effect that such transaction will not cause any of the Refunding
Bonds or Refunded Bonds to be an "arbitrage bond" within the meaning of Section 148 of the Internal
Revenue Code of 1986, as amended or, if applicable, Section 103(c) of the Internal Revenue Code
of 1954, as amended and (c) notice of such transaction is provided to the rating agencies, if any, which
have rated the Refunded Bonds.
Article 5. Application of Cash Balances.
Section 5.1. In General.
Except as provided in Section 3.2 and 4.2 hereof, no withdrawals, transfers, or
reinvestment shall be made of cash balances in the Escrow Fund. Cash balances shall be held by the
Escrow Agent as cash and as cash balances as shown on the books and records of the Escrow Agent and
shall not be reinvested by the Escrow Agent.
Article 6. Redemption of Refunded Bonds.
Section 6.1. Call for Redemption.
The Issuer hereby irrevocably calls the Refunded Bonds for redemption on their
earliest redemption dates, as shown in the Verification Report and on Appendix "A" attached hereto.
Section 6.2. Notice of Redemption.
The Escrow Agent agrees to give notice of the redemption of the Refunded Bonds
pursuant to the terms of the Refunded Bonds and in substantially the form attached hereto as
Appendix A attached hereto.
Article 7. Records and Reports.
Section 7.1. Records.
The Escrow Agent will keep books of record and account in which complete and
accurate entries shall be made of all transactions relating to the receipts, disbursements, allocations and
application of the money and Escrowed Securities deposited to the Escrow Fund and all proceeds
thereof, and such books shall be available for inspection during business hours and after reasonable
notice.
Section 7.2. Reports.
While this Agreement remains in effect, the Escrow Agent annually shall prepare and
send to the Issuer a written report summarizing all transactions relating to the Escrow Fund during the
preceding year, including, without limitation, credits to the Escrow Fund as a result of interest payments
on or maturities of the Escrowed Securities and transfers from the Escrow Fund for payments on the
Refunded Bonds or otherwise, together with a detailed statement of all Escrowed Securities and the cash
balance on deposit in the Escrow Fund as of the end of such period.
Article 8. Concerning the Paying Agents and Escrow Agent
Section 8.1. Representations.
The Escrow Agent hereby represents that it has all necessary power and authority to
enter into this Agreement and undertake the obligations and responsibilities imposed upon it herein, and
that it will carry out all of its obligations hereunder.
Section 8.2. Limitation on Liability.
The liability of the Escrow Agent to transfer funds for the payment of the principal of
and interest on the Refunded Bonds shall be limited to the proceeds of the Escrowed Securities and the
cash balances from time to time on deposit in the Escrow Fund. Notwithstanding any provision
contained herein to the contrary, the Escrow Agent shall have no liability whatsoever for the
Page 17 - Appendix A (Notice of Redemption)
insufficiency of funds from time to time in the Escrow Fund or any failure of the obligors of the
Escrowed Securities to make timely payment thereon, except for the obligation to notify the Issuer
promptly of any such occurrence.
The recitals herein and in the proceedings authorizing the Refunding Bonds shall be
taken as the statements of the Issuer and shall not be considered as made by, or imposing any obligation
or liability upon, the Escrow Agent.
The Escrow Agent makes no representations as to the value, conditions or sufficiency
of the Escrow Fund, or any part thereof, or as to the title of the Issuer thereto, or as to the security
afforded thereby or hereby, and the Escrow Agent shall not incur any liability or responsibility in
respect to any of such matters.
It is the intention of the parties hereto that the Escrow Agent shall never be required to
use or advance its own funds or otherwise incur personal financial liability in the performance of any of
its duties or the exercise of any of its rights and powers hereunder.
The Escrow Agent shall not be liable for any action taken or neglected to be taken by
it in good faith in any exercise of reasonable care and believed by it to be within the discretion or
power conferred upon it by this Agreement, nor shall the Escrow Agent be responsible for the
consequences of any error of judgment; and the Escrow Agent shall not be answerable except for its
own action, neglect or default, nor for any loss unless the same shall have been through its negligence
or want of good faith.
Unless it is specifically otherwise provided herein, the Escrow Agent has no duty to
determine or inquire into the happening or occurrence of any event or contingency or the performance
or failure of performance of the Issuer with respect to arrangements or contracts with others, with the
Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund, to dispose of and deliver the
same in accordance with this Agreement. lf, however, the Escrow Agent is called upon by the terms of
this Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be
obligated, in making such determination, only to exercise reasonable care and diligence, and in event of
error in making such determination the Escrow Agent shall be liable only for its own misconduct or its
negligence. In determining the occurrence of any such event or contingency the Escrow Agent may
request from the lssuer or any other person such reasonable additional evidence as the Escrow Agent in
its discretion may deem necessary to determine any fact relating to the occurrence of such event or
contingency, and in this connection may make inquiries of, and consult with, among others, the Issuer at
any time.
Section 8.3. Compensation.
The Issuer shall pay to the Escrow Agent fees for performing the services hereunder
and for the expenses incurred or to be incurred by the Escrow Agent in the administration of this
Agreement pursuant to the terms of its fee schedule. The Escrow Agent hereby agrees that in no event
shall it ever assert any claim or lien against the Escrow Fund for any fees for its services, whether
regular or extraordinary, as Escrow Agent, or in any other capacity, or for reimbursement for any of its
expenses as Escrow Agent or in any other capacity.
Section 8.4. Successor Escrow Agents.
If at any time the Escrow Agent or its legal successor or successors should become
unable, through operation or law or otherwise, to act as escrow agent hereunder, or if its property and
affairs shall be taken under the control of any state or federal court or administrative body because of
insolvency or bankruptcy or for any other reason, a vacancy shall forthwith exist in the office of Escrow
Agent hereunder. In such event the Issuer, by appropriate action, promptly shall appoint an Escrow
Agent to fill such vacancy. If no successor Escrow Agent shall have been appointed by the Issuer
within 60 days, a successor may be appointed by the owners of a majority in principal amount of the
Page 18 - Appendix A (Notice of Redemption) \kPTLI~BOND~HWR\CIT[ES~'SItLAND\GO'97~L~,~SJ~DT~C~,
Refunded Bonds then outstanding by an instrument or instruments in writing filed with the Issuer,
signed by such owners or by their duly authorized attorneys-in-fact. If, in a proper case, no
appointment of a successor Escrow Agent shall be made pursuant to the foregoing provisions of this
section within three months after a vacancy shall have occurred, the owner of any Refunded Obligation
may apply to any court of competent jurisdiction to appoint a successor Escrow Agent. Such court may
thereupon, after such notice, if any, as it may deem proper, prescribe and appoint a successor Escrow
Agent.
Any successor Escrow Agent shall be a corporation organized and doing business
under the laws of the United States or any state, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $25,000,000 and subject to the supervision or
examination by federal or state authority. If the Escrow Agent consolidates with, merges or converts
into, or transfers all or substantially all of its assets, or in the case of a bank or trust company, its
corporate trust assets, to another corporation, the resulting, surviving or transferee corporation without
any further act shall be the successor Escrow Agent.
Any successor Escrow Agent shall execute, acknowledge and deliver to the Issuer and
the Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall
execute and deliver an instrument transferring to such successor Escrow Agent, subject to the terms of
this Agreement, all the rights, powers and trusts of the Escrow Agent hereunder. Upon the request of
any such successor Escrow Agent, the Issuer shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor Escrow Agent all such rights, powers
and duties.
The obligations assumed by the Escrow Agent pursuant to this Agreement may be
transferred by the Escrow Agent to a successor Escrow Agent if (a) the requirements of this Section 8.4
are satisfied; (b) the successor Escrow Agent has assumed all the obligations of the Escrow Agent under
this Agreement; and (c) all of the Escrowed Securities and money held by the Escrow Agent pursuant to
this Agreement have been duly transferred to such successor Escrow Agent.
Article 9. Miscellaneous
Section 9.1. Notice.
Any notice, authorization, request, or demand required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or
certified mail, postage prepaid addressed to the Issuer or the Escrow Agent at the address shown on
Exhibit A attached hereto. The United States Post Office registered or certified mail receipt showing
delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto
may change the address to which notices are to be delivered by giving to the other parties not less than
ten (10) days prior notice thereof.
Section 9.2. Termination of Responsibilities.
Upon the taking of all the actions as described herein by the Escrow Agent, the
Escrow Agent shall have no further obligations or responsibilities hereunder to the Issuer, the owners of
the Refunded Bonds or to any other person or persons in connection with this Agreement.
Section 9.3. Binding Agreement.
This Agreement shall be binding upon the Issuer and the Escrow Agent and their
respective successors and legal representatives, and shall inure solely to the benefit of the owners of the
Refunded Bonds, the Issuer, the Escrow Agent and their respective successors and legal representatives.
Section 9.4. Severability.
In case any one or more of the provisions contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
Page 19 - Appendix A (Notice of Redemption)
unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall be
construed as if such invalid or illegal or unenforceable provision had never been contained herein.
Section 9.5. Oregon Law Governs.
This Agreement shall be governed exclusively by the provisions hereof and by the
applicable laws of the State of Oregon.
Section 9.6. Time of the Essence.
Time shall be of the essence in the performance of obligations from time to time
imposed upon the Escrow Agent by this Agreement.
Section 9.7. Notice to Rating Agency.
In the event that this agreement or any provision thereof is severed, amended or
revoked, the Issuer shall provide written notice of such severance, amendment or revocation to [insert
address of Rating Agency rerating bonds (if Refunded Bonds are rerated at the request of the City).
Section 9.8. Amendments.
This Agreement shall not be amended except to cure any ambiguity or formal defect or
omission in this Agreement. No amendment shall be effective unless the same shall be in writing and
signed by the parties thereto. No such amendment shall adversely affect the rights of the holders of the
Refunding Bonds or the Refunded Bonds. No such amendment shall be made without first receiving
written confirmation from the rating agencies, (if any) which have rated the Refunded Bonds that such
administrative changes will not result in a withdrawal or reduction of its rating then assigned to the
Refunded Bonds. If this Agreement is amended, prior written notice and copies of the proposed changes
shall be given to the rating agencies which have rated the Refunded Bonds.
EXECUTED as of the date first written above.
City of Ashland
Authorized Officer
as Escrow Agent
Authorized Officer
(note: all exhibits and appendices to the Escrow Deposit Agreement will be prepared after the bond
resolution is adopted and the Refunding Bonds are sold)
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