$ ____________
____________
VARIABLE RATE DEMAND REVENUE BONDS
( ____________ PROJECT),
SERIES 20 ___
_______ _______ ___ , 20 ___
BOND PLACEMENT AGREEMENT
____________
____________ ,
____________
____________ , ______________ ______
____________
____________
____________ , ______________ ______
Ladies and Gentlemen:
The undersigned, ______________ , a division of ___________________ (the
"Placement Agent"), offers to enter into the following agreement with the
___________________ (the "Issuer") and ______________ (the "Borrower"), which, upon your
acceptance of this offer, will be binding upon you and upon the Placement Agent. The offer is
made subject to your written acceptance of this Bond Placement Agreement (this "Agreement")
on or before ___ : ___ ___ .m, on _______ ___ , 20 ___ , and, if not so accepted, will be subject to
withdrawal by the Placement Agent upon written notice delivered to the office of the Executive
Director of the Issuer and the Vice President of Finance of the Borrower at the above addresses,
at any time prior to the acceptance hereof by you. Unless other defined herein, all capitalized
terms used and not defined herein shall have the meanings ascribed to them in the Indenture (as
defined herein).
1. BACKGROUND
Certain understandings of the Placement Agent with respect to the transaction
contemplated by this Agreement are set forth below:
(a) The Issuer will issue and sell $ ____________ principal amount of its
Variable Rate Demand Revenue Bonds ( ____________ Project), Series 20 ___ (the
"Bonds") to provide funds for the purpose of making a loan to the Borrower to (i)
currently refund certain indebtedness (the "Refunding Project") incurred by the
Borrower to ____________ Bank, ____________ , _________________ , in connection
with the construction and improvement of the student center located on the Borrower's
campus (the "Prior Loan"), (ii) construct and equip a new visual arts and dance building,
(iii) renovate various buildings, and (iv) demolish the existing fine arts building, all of
which are located on the Borrower's campus (the foregoing items (ii), (iii) and (iv) are
collectively referred to as the "Series 20 ___ Project"), and (v) pay costs of issuance of
the Bonds. The Issuer and the Borrower will enter into a Loan Agreement, dated as of
_______ ___ , 20 ___ (the "Loan Agreement"), providing, among other things, for
payments at times and in amounts sufficient to pay when due principal, premium, if any,
purchase price payments and interest on the Bonds.
(b) The Bonds will be issued pursuant to the provisions of Sections ______
et seq., __________ Code of ____ , as amended and supplemented (the "Act"),
resolutions of the Issuer, adopted on _______ ___ , 20 ___ and _______ ___ , 20 ___
(collectively, the "Resolution"), and a Trust Indenture, dated as of _______ ___ , 20 ___
(the "Indenture"), by and between ____________ , a national banking association, as
Trustee (the "Trustee"), and the Issuer. The Bonds will be limited obligations of the
Issuer, payable solely and exclusively from payments to be made by the Borrower
pursuant to the Loan Agreement, payments to be made by the Borrower to the Issuer
pursuant to a Promissory Note, dated the date of issuance of the Bonds (the "Note"), and
payments to be made by the Bank (as defined herein) pursuant to the Letter of Credit (as
defined herein). Payment of the Bonds will be secured by the lien of the Indenture on the
Trust Estate created thereunder which consists generally of (i) money deposited in the
funds and accounts established under the Indenture and income from the investment of
such money as required by the Indenture, the Loan Agreement and the Note, and (ii) the
Letter of Credit and sums drawn thereon. Although the Trustee and the Bondholders will
have a first priority lien with respect to the Trust Estate created under the Indenture,
neither the Trustee nor the Bondholders will have a mortgage on or security interest in
the Series 20 ___ Project, the Prior Project (as defined herein) or any other collateral.
(c) Concurrently with the issuance of the Bonds, the Borrower will cause
_________________ (the "Bank") to issue its irrevocable, direct-pay Letter of Credit
(the "Letter of Credit") in favor of the Trustee that will authorize the Trustee to draw an
amount not exceeding $ _________ (such amount as reduced from time to time and as
reinstated from time to time is referred to in the Letter of Credit and herein as the "Stated
Amount"). Of the Stated Amount, $ _________ , which is an amount equal to the
principal amount of the Bonds (the "Principal Component"), may be drawn with respect
to payment of the unpaid principal amount of the Bonds and the purchase price
payments, and $ _________ , which is an amount equal to interest on the Bonds (based
upon a maximum interest rate of ______ percent ( ___ %) per annum for a period of
______ ( ___ ) days computed on the basis of a 365-day year) (the "Interest Component"),
may be drawn with respect to payment of accrued but unpaid interest on the Bonds.
(d) The Bonds will mature on _______ ___ , 20 ___ , will contain the terms and
provisions as described in the Indenture and will bear interest initially at the Weekly Rate
to be established at the closing of the issuance of the Bonds (the "Closing") by the
Placement Agent, as Remarketing Agent, for the initial Weekly Rate Period.
(e) The terms and provisions of the Bonds have been or will be approved by
the Borrower when it enters into this Agreement in order to induce the Placement Agent
to serve as agent of the Issuer and to offer the Bonds for sale as described herein.
(f) A Private Placement Memorandum (including the Appendices thereto),
dated, _______ ___ , 20 ___ (the "Private Placement Memorandum"), with respect to the
Bonds has been delivered to the Placement Agent on or before the date hereof
(g) It is intended that interest on the Bonds will be excluded from gross
income for federal income tax purposes under existing statutes, regulations, rulings and
court decisions and will not be treated as an item of tax preference for purposes of the
alternative minimum tax imposed on individuals and corporations and, in reliance
thereon, the Placement Agent may offer the Bonds without registration under the
Securities Act of 1933, as amended, or qualification of the Indenture under the Trust
Indenture Act of 1939, as amended.
(h) The proceeds of the Bonds will be applied as provided in the Indenture.
(i) Pursuant to the Indenture and the Blanket Issuer Letter of Representations,
dated _______ ___ , 20 ___ , from the Issuer to ________________ (the "Letter of
Representations"), the Bonds are being issued in book-entry only form, and the parties
acknowledge that, where appropriate, references herein to Bonds shall mean the interests
of Beneficial Owners (as defined in the Indenture).
(j) The Letter of Credit will be issued pursuant to a Reimbursement
Agreement, dated as of _______ ___ , 20 ___ (the "Letter of Credit Agreement"), by and
between the Borrower and the Bank. Pursuant to the Letter of Credit Agreement, the
Borrower will reimburse the Bank for amounts drawn on the Letter of Credit.
(k) The Issuer has not applied for a rating for the Bonds from any nationally-
recognized rating agency and does not intend to do so.
2. JOINT REPRESENTATIONS OF THE ISSUER AND THE BORROWER
(a) The Issuer and the Borrower intend that substantially all of the proceeds of
the Bonds will be expended for the purposes described in Section 145 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations promulgated and
proposed thereunder, and that the Refunding Project and the Series 20 __ Project will
constitute the "project of an eligible business" within the meaning of the Act.
(b) The Board of Directors of the Issuer (the "Board"), on behalf of the Issuer,
and the Borrower represent and agree that they have not knowingly participated in and
will not knowingly participate in, and are not aware of any offering or sale of any tax-
exempt obligations that (i) has been, is being or will be conducted during the period
commencing fifteen (15) days prior to the date hereof and ending fifteen (15) days after
the date hereof (ii) has been, is being or will be paid from the same source of funds as the
Bonds, determined without regard to guarantees from unrelated parties, and (iii) was, is
being or will be made pursuant to the same plan of financing. For purposes of the
foregoing sentence, tax-exempt obligations issued pursuant to the same plan of financing
means tax-exempt obligations (other than the Bonds) issued to finance a single facility or
related facilities.
3. REPRESENTATIONS AND WARRANTIES OF THE ISSUER
The Board, on behalf of the Issuer, makes the following representations and warranties to
the Placement Agent, all of which will survive the purchase and offering of the Bonds:
(a) The Issuer is a public corporation duly created and validly existing
pursuant to and in good standing under the Constitution and laws of the State of
Mississippi (the "State"). The Board is duly organized and existing under the
Constitution and laws of the State with the powers and authority, among others, set forth
in the Act, and is authorized to issue the Bonds and otherwise to act on behalf of the
Issuer in connection with the sale and issuance of the Bonds.
(b) The Board, on behalf of the Issuer, is authorized by the provisions of the
Act to issue the Bonds, to loan the proceeds of the Bonds to the Borrower pursuant to the
Loan Agreement to be used to provide funding for the Refunding Project and the Series
20 ___ Project and to pledge and assign the Loan Agreement, the Note and the payments
to be received by the Issuer pursuant thereto and the funds established pursuant to the
Indenture (except the Rebate Fund) and certain rights reserved under the provisions of the
Indenture and the Loan Agreement) and investment earnings and amounts therein as
security for the payment of the principal of purchase price payments and interest on the
Bonds, all pursuant to the Indenture.
(c) The Board and the Issuer have complied with all provisions of the
Constitution of the State and the laws of the State pertaining to the sale and issuance of
the Bonds, including the Act, and have full power and authority to authorize and
thereafter consummate all transactions contemplated by this Agreement, the Bonds, the
Indenture, the Loan Agreement and any and all other agreements relating thereto.
(d) The Board, on behalf of the Issuer, has duly adopted the Resolution and
has duly authorized the execution and delivery of this Agreement, the Loan Agreement,
the Indenture, the Remarketing Agreement, the Private Placement Memorandum and the
sale and issuance of the Bonds, and has taken all actions and obtained all approvals
necessary and appropriate to carry out the same.
(e) The information contained in the Private Placement Memorandum under
the sections captioned "THE ISSUER", "LITIGATION" as it relates to the Issuer,
"VALIDATION", "LEGAL MATTERS" as it relates to the Issuer, "PLACEMENT" and
"OTHER MATTERS" does not contain any untrue or misleading statement of a material
fact as of the date hereof and does not omit to state any material fact that should be
included therein for the purpose for which the Private Placement Memorandum is being
used or that is necessary to make such information, in light of the circumstances under
which such information was given, not misleading.
(f) The Board, on behalf of the Issuer, has duly authorized all necessary
actions to be taken by the Issuer for (i) the sale and issuance of the Bonds upon the terms
set forth herein and in the Indenture, (ii) the use of the Private Placement Memorandum
by the Placement Agent and the execution of the Private Placement Memorandum by the
Issuer, (iii) the execution, delivery, receipt and due performance of this Agreement, the
Bonds, the Indenture, the Loan Agreement, the Remarketing Agreement and any and all
other agreements and documents as may be required to be executed, delivered and
received by the Issuer in order to carry out, give effect to and consummate the
transactions contemplated hereby and by the Private Placement Memorandum, and (iv)
the carrying out, giving effect to and consummation of the transactions contemplated
hereby and by the Indenture and the Private Placement Memorandum. Executed
counterparts of the Private Placement Memorandum, the Loan Agreement, the
Remarketing Agreement and the Indenture will be delivered to the Placement Agent by
the Issuer on the Closing Date (as defined herein).
(g) To the best of the Board's and the Issuer's knowledge, there is no action,
suit, proceeding, inquiry or investigation at law or in equity or before or by any court,
public board or body pending or threatened against or affecting the Board or the Issuer
(or any basis therefor), in which an unfavorable decision, ruling or finding would
adversely affect the transaction contemplated hereby or by the Private Placement
Memorandum or the validity of the Bonds, the Indenture, the Loan Agreement, this
Agreement, the Remarketing Agreement or any agreement or instrument to which the
Board or the Issuer is or is expected to be a party and which is used or contemplated for
use in the consummation of the transaction contemplated hereby or by the Private
Placement Memorandum.
(h) The execution and delivery by the Issuer of the Private Placement
Memorandum, this Agreement, the Bonds, the Indenture, the Loan Agreement, the
Remarketing Agreement and other agreements contemplated hereby and by the Private
Placement Memorandum and compliance with the provisions thereof will not conflict
with or constitute, on the part of the Board or the Issuer, a breach of or a default under
any existing law, court or administrative regulation, decree or order or any agreement,
indenture, mortgage, lease or other instrument to which the Board or the Issuer is subject
or by which the Board or the Issuer is or may be bound.
(i) Any certificate signed by any of the Board's or the Issuer's authorized
officers and delivered to the Placement Agent shall be deemed a representation and
warranty by the Board or the Issuer to the Placement Agent as to the statements made
therein.
(j) To the knowledge of the Board and the Issuer, the Board and the Issuer are
not currently in default in the payment of principal of premium, if any, interest on, or
otherwise in default with publicly held bonds, notes or other obligations that the Issuer
has issued, assumed or guaranteed as to the payment of principal, premium, if any, or
interest.
(k) The Bonds are being sold under one or more exemptions from Rule 15c2-
12) promulgated by the Securities and Exchange Commission under Section 15 of the
Securities Exchange Act of 1934, as amended ("Rule 15c2-12").
(1) The Board, on behalf of the Issuer, has duly authorized, approved and will
execute the Private Placement Memorandum on or prior to the Closing Date and deems
the Private Placement Memorandum "final" as required by Rule 15c2-12.
4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower makes the following representations and warranties, all of which will
survive the purchase and offering of the Bonds:
(a) The Borrower is a non-profit corporation duly organized and validly
existing under the laws of the State.
(b) The Borrower is an organization exempt from federal income taxation as
provided in Section 501(a) of the Code by virtue of being an organization described in
Section 501(c)(3) of the Code and not a "private foundation" within the meaning of
Section 509 (a) of the Code.
(c) Except as disclosed in the Private Placement Memorandum, the purposes,
character, activities and methods of operation of the Borrower have not changed
materially since its organization and are not materially different from the purposes,
character, activities and methods of operation at the time of the determination by the
Internal Revenue Service in the applicable Section 501 (c) (3) determination letter (the
"Determination").
(d) The Borrower has not diverted a substantial part of its corpus or income
for a purpose or purposes other than the purpose or purposes (i) for which it is organized
or operated or (ii) disclosed to the Internal Revenue Service in connection with the
Determination.
(e) The Borrower has not operated, as of the date hereof in a manner that
would result in it being classified as an "action" organization within the meaning of
Section 1.501 (c) (3)-(l)(c)(3) of the Regulations promulgated under the Code including,
but not limited to, promoting or attempting to influence legislation by propaganda or
otherwise as a substantial part of its activities.
(f) With the exception of the payment of compensation (and the payment or
reimbursement of expenses) that is not excessive and is for personal services which are
reasonable and necessary to carrying out the purposes of the Borrower, no individual who
would be a "foundation manager" within the meaning of Section 4946(b) of the Code
with respect to the Borrower, nor any person controlled by any such individual or
individuals or any of their affiliates, nor any person having a personal or private interest
in the activities of the Borrower has acquired or received, directly or indirectly, any
income or assets, regardless of form, of the Borrower other than as reported to the
Internal Revenue Service by the Borrower.
(g) The Borrower has not received any indication or notice whatsoever to the
effect that its exemption under Section 501(c)(3) of the Code pursuant to the
Determination has been revoked or modified, or that the Internal Revenue Service is
considering revoking or modifying such exemption, and such exemption is still in full
force and effect.
(h) The Borrower has timely fled with the Internal Revenue Service all
requests for determination, reports and returns required to be fled by it and such requests
for determination, reports and returns have not omitted or misstated any material fact and
has timely notified the Internal Revenue Service of any changes in its organization and
operation since the date of the application for the Determination.
(i) The Borrower has not devoted more than an insubstantial part of its
activities in furtherance of a purpose other than an exempt purpose within the meaning of
Section 501 (c)(3) of the Code.
(j) The Borrower has not taken any action, nor does it know of any action that
any other person has taken, nor does it know of the existence of any condition which
would cause the Borrower to lose its exemption from taxation under Section 501(a) of the
Code or cause interest on the Bonds to be includable in the income of the recipients
thereof for federal income tax purposes.
(k) The Borrower has or will have prior to the Closing Date full power and
authority to authorize and thereafter consummate all transactions contemplated by this
Agreement, the Loan Agreement, the Remarketing Agreement, the Letter of Credit
Agreement, the Note, the Indenture and any and all other agreements relating thereto.
(l) The Borrower has duly authorized or will authorize prior to the Closing
Date all necessary actions to be taken by the Borrower for (i) the execution, delivery,
receipt and due performance of this Agreement, the Loan Agreement, the Remarketing
Agreement, the Letter of Credit Agreement and the Note and any and all other
agreements and documents as may be required to be executed, delivered and received by
the Borrower in order to carry out, give effect to and consummate the transaction
contemplated hereby and by the Private Placement Memorandum, (ii) the carrying out,
giving effect to and consummation of the transaction contemplated hereby and (iii) this
Agreement, the Loan Agreement, the Remarketing Agreement, the Letter of Credit
Agreement, the Note, the Indenture and the Private Placement Memorandum to constitute
valid and binding obligations of the Borrower (to the extent applicable to the Borrower)
enforceable in accordance with their respective terms except to the extent that the
enforceability thereof may be limited by (A) bankruptcy, reorganization or similar laws
limiting the enforceability of creditors' rights generally or (B) the availability of any
discretionary equitable remedies.
(m) The execution and delivery by the Borrower of this Agreement, the Loan
Agreement, the Remarketing Agreement, the Letter of Credit Agreement and the Note
and the other documents contemplated hereby and by the Private Placement
Memorandum and compliance with the provisions thereof do not as of the date hereof
and will not, on or after the Closing Date, conflict with or constitute on the Borrower's
part a breach of or a default under any existing law, court or administrative regulation,
decree or order or any agreement, indenture, mortgage, lease or other instrument to which
the Borrower is subject or by which the Borrower is or may be bound.
(n) Any certificate signed by any of the Borrower's authorized officers and
delivered to the Placement Agent shall be deemed a representation and warranty by the
Borrower to the Placement Agent as to the statements made therein.
(o) The Borrower has obtained or will obtain, as and when required by
applicable law, all approvals required in connection with the execution and delivery of
and performance by the Borrower of its obligations under this Agreement, the Loan
Agreement, the Remarketing Agreement, the Letter of Credit Agreement and the Note
and in relation to the Refunding Project and the Series 20 ___ Project.
(p) The Borrower has not sustained any material loss or interference with its
business from fire, explosion, flood or other calamity whether or not covered by
insurance or from any labor dispute or court or governmental action, order or decree that
is material to the Borrower other than as set forth or contemplated in the Private
Placement Memorandum and there has not been any material change or development
known to the Borrower involving a prospective material adverse change in or affecting
the financial position or the business of the Borrower.
(q) The information contained in the Private Placement Memorandum does
not contain any untrue or misleading statement of a material fact as of the date hereof and
does not omit to state any material fact that should be included therein for the purpose for
which the Private Placement Memorandum is being used or that is necessary to make
such information, in light of the circumstances under which such information was given,
not misleading; provided that the representations and warranties contained in this
paragraph do not extend to the sections captioned "THE ISSUER", "THE LETTER OF
CREDIT", "SUMMARY OF CERTAIN PROVISIONS OF THE REIMBURSEMENT
AGREEMENT", "VALIDATION", "PLACEMENT", "RATING" and "TAX
EXEMPTION", to information with regard to the Issuer under the section captioned
"LITIGATION" or to the information set forth in APPENDIX C to the Private Placement
Memorandum.
(r) To the best of the Borrower's knowledge, there is no action, suit,
proceeding, inquiry, investigation at law or in equity or before or by any court, public
board or body pending or threatened against or affecting the Borrower (or any basis
therefor), in which an unfavorable decision, ruling or finding would adversely affect the
transaction contemplated hereby or by the Private Placement Memorandum or the
validity of the Bonds, the Loan Agreement, the Remarketing Agreement, the Letter of
Credit Agreement, the Note, the Indenture, this Agreement or any agreement or
instrument to which the Borrower is or is expected to be a party and which is used or
contemplated for use in the consummation of the transaction contemplated hereby or by
the Private Placement Memorandum.
(s) The Prior Loan will be currently refunded or retired, as applicable, on the
Closing Date and, to the best of Borrower's knowledge, all required notices in connection
therewith have been properly given or waived.
5. COVENANTS OF THE ISSUER
The Board, on behalf of the Issuer, covenants and agrees, for the benefit of the Placement
Agent, to the following covenants, all of which will survive the purchase and offering of the
Bonds and any investigations made by or on behalf of the Placement Agent:
(a) The Issuer agrees to refrain from taking or permitting to be taken any
action, with regard to which the Issuer may exercise control that results in the loss of the
tax-exempt status of the interest on the Bonds.
(b) If requested, the Issuer agrees to cooperate in qualifying the Bonds for
offer and sale under the securities laws of the states designated by the Placement Agent;
provided that the Issuer shall not be required to qualify to do business or consent to
service of process in any state or jurisdiction in which it is not now so qualified or subject
or take any other action which would subject the Issuer to service of process in any such
jurisdiction.
(c) The Issuer (at the cost of the Borrower) shall furnish or cause to be
furnished to the Placement Agent, in such quantities as shall be requested by the
Placement Agent, copies of the Private Placement Memorandum and all amendments
and supplements thereto in each case as soon as available.
(d) If prior to the Closing Date, any event occurs which might or would
cause the Private Placement Memorandum under the sections captioned "THE ISSUER",
"LITIGATION" as it relates to the Issuer, "VALIDATION", "LEGAL MATTERS" as it
relates to the Issuer, "PLACEMENT" and "OTHER MATTERS", as any of them may be
then supplemented or amended, to contain any untrue statement of a material fact or to
omit to state a material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they were made, not
misleading, the Board or the Issuer shall notify the Placement Agent and, if in the
opinion of the Issuer or the Placement Agent, such event requires the preparation and
publication of a supplement or amendment, the Issuer will supplement or amend the
Private Placement Memorandum in a form and manner approved by the Placement
Agent.
(e) The Board, on behalf of the Issuer, hereby authorizes the use of the
Private Placement Memorandum and the information therein contained by the
Placement Agent in connection with the private placement of the Bonds. If required, the
Placement Agent shall deliver the Private Placement Memorandum to a "nationally
recognized municipal securities information repository," as such term is defined in Rule
15c2-12. The Board, on behalf of the Issuer, hereby approves of and ratifies the use by
the Placement Agent on or before the date hereof of the Private Placement
Memorandum in connection with the prospective offering of the Bonds prior to the date
hereof.
6. COVENANTS OF THE BORROWER
The Borrower covenants and agrees, for the benefit of the Placement Agent, to the
following covenants, all of which will survive the purchase and offering of the Bonds and any
investigations made by or on behalf of the Placement Agent:
(a) The Borrower agrees to refrain from taking or permitting to be taken any
action, with regard to which the Borrower may exercise control that results in the loss of
the tax-exempt status of the interest on the Bonds.
(b) The Borrower agrees to take whatever steps are necessary to retain its
status as an organization exempt from federal income taxation as provided in Section
501(a) of the Code by virtue of being an organization described in Section 501 (c)(3) of
the Code.
(c) If requested, the Borrower agrees to cooperate in qualifying the Bonds for
offer and sale under the securities laws of the states designated by the Placement Agent;
provided that the Borrower shall not be required to qualify to do business or consent to
service of process in any state or jurisdiction in which it is not now so qualified or subject
or take any other action which would subject the Borrower to service of process in any
such jurisdiction.
(d) All written information with respect to the Series 20 ___ Project, the
project funded with the proceeds of the Prior Loan (the "Prior Project"), and the
Refunding Project to be supplied at the Closing to establish the tax-exempt status of
interest on the Bonds will be correct and complete.
(e) The Borrower shall indemnify and hold harmless the. Issuer, its counsel,
_____________________ ("Bond Counsel"), the Placement Agent, its counsel, the
Trustee, its counsel, the Bank, its counsel, and any of their officers, agents or employees
and each person, if any, who controls any of the foregoing within the meaning of Section
15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange
Act of 1934, as amended (individually referred to as an "Indemnified Party" and
collectively referred to herein as the "Indemnified Parties"), against any and all losses,
claims, damages, liabilities or expenses whatsoever caused by or in any way related to
any untrue or misleading statement or alleged untrue or alleged misleading statement of a
material fact contained in the Private Placement Memorandum (except statements
pertaining to the Issuer, the Bank or the Placement Agent), or caused by any omission or
alleged omission from the Private Placement Memorandum of any material fact
necessary to be stated therein in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading; provided, however, such
indemnity shall not extend to an Indemnified Party with respect to any information
provided in writing by such Indemnified Party for inclusion in the Private Placement
Memorandum or to claims resulting from the gross negligence of or willful misconduct
of or bad faith by such Indemnified Party. As to the Placement Agent only, the Borrower
shall not be liable to the Placement Agent under this Section 6(e) (provided the Borrower
has complied fully with Section 6(s) of this Agreement) if the person asserting such loss,
claim, damage, liability or expense against the Placement Agent for which indemnity is
sought purchased Bonds offered by the Placement Agent, if (i) delivery to such person of
any amendment of or supplement to the Private Placement Memorandum that was
previously prepared and supplied to the Placement Agent by the Borrower would have
been a valid defense to the action from which such loss, claim, damage or liability arose,
and (ii) such previously prepared and supplied amendment or supplement was not
delivered to such person by or on behalf of the Placement Agent. In case any action shall
be brought against an Indemnified Party based upon the information described in the
preceding paragraph and in respect of which indemnity may be sought against the
Borrower, such Indemnified Party shall promptly notify the Borrower in writing and the
Borrower shall promptly assume the defense thereof including the employment of
counsel acceptable to such Indemnified Party (which consent shall not be unreasonably
withheld), the payment of all reasonable expenses, and the right to negotiate and consent
to settlement. An Indemnified Party has the right, at its own expense, to employ separate
counsel in any such action and to participate in the defense thereof The Borrower shall
not be liable for any settlement of any such action effected without its consent, but if
settled with the consent of the Borrower, or if there be a final judgment for the plaintiff in
any such action with or without its consent, the Borrower agrees to indemnify and hold
harmless the Indemnified Parties from and against any loss or liability by reason of such
settlement or judgment.
(f) The Borrower will not take or omit to take, as may be applicable, any
action which would, in any way, cause the proceeds of the Bonds to be applied in a
manner contrary to the requirements of the Indenture, the Loan Agreement, the Note and
the Code.
(g) Whether or not the sale of the Bonds by the Issuer to the Placement Agent
is consummated, the Borrower agrees that the Placement Agent shall have no obligation
to pay any costs or expenses incident to the performance of the obligations of the Issuer
or the Placement Agent under this Agreement. All costs and expenses to affect the
preparation, sale, issuance and delivery of the Bonds, including the preparation, printing,
execution and delivery of the Private Placement Memorandum (together with any
amendments thereto and supplements thereto), the Indenture, the Loan Agreement, the
Remarketing Agreement, the Letter of Credit, the Letter of Credit Agreement and the
Note, any rating agency fees, the fees and expenses of the Placement Agent, the fees and
expenses of the Placement Agent's counsel, the fees and expenses of the Bank, the fees
and expenses of the Bank's counsel, the fees and expenses of Bond Counsel, the fees and
expenses of counsel to the Issuer, the fees and expenses of the Trustee, the fees and
expenses of the Trustee's counsel and the expenses, if any, incurred in qualifying the
Bonds for sale under the securities laws of various jurisdictions and in preparing any
"Blue Sky" memorandum and any legal investment memorandum shall be paid by the
Borrower unless the Bonds are not sold and issued by the Issuer. The amount of the costs
of issuance of the Bonds, including any fee paid to the Placement Agent, in excess of ___
percent ( ___ %) of the face amount of the Bonds will be paid by the Borrower with funds
other than the proceeds of the sale of the Bonds. In no event shall any of such costs be
paid by the Issuer or the Placement Agent. [In addition, all interest owed on the Prior
Loan shall be paid by the Borrower with funds other than the proceeds of the sale of the
Bonds.]
(h) If, prior to the Closing Date, any event occurs with respect to the
Borrower, the Refunding Project, the Series 20 ___ Project or the Bonds that might or
would cause the Private Placement Memorandum, as it may be then supplemented or
amended, to contain any untrue statement of a material fact or to omit to state a material
fact required to be stated therein or necessary to make the statements therein in light of
the circumstances under which they were made, not misleading, the Borrower shall notify
the Placement Agent and the Issuer and, if in the opinion of the Placement Agent, such
event requires the preparation and publication of a supplement or amendment, the
Borrower will use its best efforts to cause the Issuer to supplement or amend the Private
Placement Memorandum in a form and manner approved by the Placement Agent.
(i) The Series 20 ___ Project and the Prior Project will not be operated in
violation of the Act, the Code and any laws, ordinances, governmental rules or
regulations to which it, the Series 20 ___ Projector the Prior Project, is subject. The
Borrower will obtain any licenses, permits, franchises or other governmental
authorizations necessary to the ownership, acquisition, repair, rehabilitation and use of
the Series 20 ___ Project and the Prior Project.
(j) The Borrower will cause the Bank to deliver the Letter of Credit to the
Trustee on the Closing Date.
7. PLACEMENT OF THE BONDS
On the basis of the representations, warranties and covenants contained herein, and in the
other agreements referred to herein and subject to the terms and conditions herein set forth, the
Placement Agent agrees to offer the Bonds in denominations of $ _______ and any integral
multiple of $ _______ in excess thereof for sale, or solicit offers to buy the Bonds or otherwise
negotiate with any person with respect to the sale of the Bonds, subject to any and all applicable
requirements of the laws of the United States of America or any state, including without
limitation, the State. As compensation for its services hereunder, the Borrower shall
(a) Cause the Issuer to pay to the Placement Agent from the proceeds of the
Bonds or otherwise a placement agent's fee of $ _______ together with its reasonable
expenses to be payable by wire transfer of immediately available funds on the Closing
Date.
(b) The Bonds have been or will be offered for a period beginning on and
ending on the Closing Date.
(c) Each purchaser of the Bonds solicited by the Placement Agent (each, a
"Purchaser" and collectively, the "Purchasers") shall be provided by the Placement Agent
with a copy of the Private Placement Memorandum.
(d) The Issuer will deliver the Bonds to or for the account of the Purchasers or
the Placement Agent against payment of the purchase price therefor by wire transfer of
immediately available funds to the Trustee at or prior to 10:00 a.m., Central Daylight
Time, on _______ ___ , 20 ___ , or such other place, time or date as shall be mutually
agreed upon by the Issuer, the Borrower and the Placement Agent (the "Closing Date").
The Bonds will be delivered in definitive and fully registered form in such denominations
and registered in the name of _______ as provided in the Indenture. The Purchasers and
the Placement Agent shall have the opportunity to review the Bonds at least one (1) day
prior to such delivery.
(e) The Bonds shall initially bear interest at the Weekly Rate and mature on
the date and have such other terms as described in the Indenture and the Private
Placement Memorandum.
(f) In connection with the purchase, sale and delivery of the Bonds, the
Placement Agent represents and warrants to the Issuer and the Borrower the following:
(i) The Bonds will initially be offered and sold as set forth in Section
7(a) hereof through a private placement to not more than _______ ( ___ ) persons
and in compliance with Rule 15c2-12;
(ii) The Placement Agent is registered under the Securities Exchange
Act of 1934, as amended, as a municipal securities dealer;
(iii) No Bonds will be sold except pursuant to offering materials duly
approved by the Issuer, the Bank and the Borrower and in compliance with all
applicable state and federal securities laws; and
(iv) On or before the Closing Date, the Bonds shall have been sold and
payment therefor made in accordance with Section 7(d) hereof
8. BOND DOCUMENTS
On or prior to the Closing Date, the Placement Agent shall have received the following:
(a) The Private Placement Memorandum of the Issuer relating to the Bonds,
as amended and supplemented, duly executed on behalf of the Issuer; and
(b) A copy of each of the following documents duly executed by all parties
thereto as certified to the satisfaction of the Placement Agent:
(i) the Indenture,
(ii) the Loan Agreement,
(iii) the Note,
(iv) the Letter of Credit,
(v) the Letter of Credit Agreement,
(vi) the Remarketing Agreement, and
(vii) the Letter of Representations.
The foregoing documents are hereinafter collectively referred to as the "Bond
Documents". The Board, on behalf of the Issuer, and the Borrower hereby authorize the
Placement Agent to use the Private Placement Memorandum in connection with the
private placement of the Bonds.
9. CONDITIONS TO OBLIGATIONS OF THE PLACEMENT AGENT
The Placement Agent has entered into this Agreement in reliance upon the
representations, warranties, covenants and agreements of the Issuer and the Borrower contained
herein and to be contained in the documents and instruments to be delivered on the Closing Date
and upon the performance by the Issuer and the Borrower of their obligations hereunder, both as
of the date hereof and as of the Closing Date. Accordingly, the Placement Agent's obligations
under this Agreement to arrange for the sale of the Bonds shall be subject to the performance by
the Issuer and the Borrower of their respective obligations to be performed hereunder and under
such documents and instruments at or prior to the Closing Date, and shall also be subject to the
following conditions:
(a) The Borrower shall have performed all of its obligations hereunder and the
representations and warranties of the Borrower herein and the representations and
warranties made in each of the Bond Documents by the respective parties thereto shall be
true, correct and complete on the date hereof and on the Closing Date, as if made on the
Closing Date, and each such party to the Bond Documents shall deliver a certificate to
such effect. The Issuer shall have performed all of its obligations hereunder and the
representations and warranties of the Issuer herein shall be true, correct and complete on
the date hereof and on the Closing Date, as if made on the Closing Date, and the Issuer
shall deliver a certificate to such effect. The Private Placement Memorandum (as the
same may be amended or supplemented with the written approval of the Placement
Agent) on the date thereof and on the Closing Date shall be true, correct and complete in
all material respects and shall not contain any untrue statement of a material fact, or omit
to state any material fact necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not misleading.
(b) The representations and warranties of the Issuer contained herein shall be
true, complete and correct as of the date hereof and on and as of the Closing Date with
the same effect as if made on the Closing Date.
(c) Except as may have been agreed to by the Placement Agent, as of the
Closing Date, each of the Bond Documents, the Resolution and all other official action of
the Board and the Issuer relating thereto shall be in full force and effect and shall not
have been amended, modified or supplemented, and the Private Placement Memorandum
shall not have been amended or supplemented without the written approval of the
Placement Agent.
(d) The Issuer shall have received the approving opinion of Bond Counsel in
form and substance acceptable to the Placement Agent, and the Placement Agent shall
have received a letter from Bond Counsel, dated the Closing Date and addressed to the
Placement Agent, to the effect that the Placement Agent may rely upon such firm's
opinion as if it were addressed to the Placement Agent, and a supplemental opinion of
Bond Counsel in form and substance acceptable to the Placement Agent, dated the
Closing Date and addressed to the Placement Agent, in connection with the Private
Placement Memorandum.
(e) The Placement Agent shall have received the opinion of counsel to the
Issuer, dated the Closing Date and addressed to the Placement Agent, in form and
substance acceptable to the Placement Agent.
(f) No default or event of default (as defined in any of the Bond Documents)
shall have occurred and be continuing, and no event shall have occurred and be
continuing which, with the lapse of time or the giving of notice or both, would constitute
such a default or event of default.
(g) No material adverse change shall have occurred, nor shall any
development involving a prospective material and adverse change in, or affecting the
affairs, business, financial condition, results of operations, prospects or properties
(including the Series 20 ___ Project and the Prior Project) of the Issuer, the Bank or the
Borrower shall have occurred, between the date hereof and the Closing Date.
(h) On or prior to the Closing Date, all actions required to be taken as of the
Closing Date in connection with the Bonds, the Resolution and the Bond Documents by
the Issuer and the Borrower shall have been taken, and the Issuer and the Borrower shall
each have performed and complied with all agreements, covenants and conditions
required to be performed or complied with by this Agreement, the Bonds, the Resolution
and the Bond Documents, and each party shall deliver a certificate to such effect insofar
as the foregoing actions, agreements, covenants and conditions apply to each such party,
and each of such agreements shall be in full force and effect and shall not have been
amended, modified or supplemented, except as has been agreed to in writing by the
Placement Agent.
(i) Each of the Bond Documents shall have been executed and delivered by
each of the respective parties thereto, all such documents shall be in forms exhibited to
the Placement Agent on the date hereof with only such changes as the Placement Agent
may approve in writing, and each of the Bond Documents shall be in full force and effect.
(j) None of the events referred to in Section 10 of this Agreement shall have
occurred. The Placement Agent shall have received a certificate dated the Closing Date
and signed on behalf of the Board, acting on behalf of the Issuer, to the effect that:
(i) Except as disclosed in the Private Placement Memorandum, the
Issuer has not received notice of any pending, nor to the Issuer's knowledge is
there any threatened, action, suit, proceeding, inquiry or investigation against the
Issuer, at law or in equity, by or before any court, public board or body, nor to the
Issuer's knowledge is there any basis therefor, affecting the existence of the Issuer
or the titles of its officials to their respective offices, or seeking to prohibit,
restrain or enjoin the sale, issuance or delivery of the Bonds or the pledge of
revenues or assets of the Issuer pledged or to be pledged to pay the principal of
purchase price payments and interest on the Bonds, or in any way materially
adversely affecting or questioning (A) the territorial jurisdiction of the Issuer, (B)
the use of the Private Placement Memorandum, (C) the use of the proceeds of the
Bonds to fund the Refunding Project or the Series 20 ___ Project, (D) the validity
or enforceability of the Bonds, any proceedings of the Issuer taken with respect to
the Bonds, or any of the Bond Documents to which it is a party, (E) the exclusion
of interest on the Bonds from gross income for purposes of federal income
taxation, (F) the accuracy or completeness of the Private Placement
Memorandum, (G) the execution and delivery of this Agreement or the Bonds,
(H) the current refunding of the Prior Loan, or (I) the power of the Issuer to carry
out the transactions contemplated by this Agreement, the Bonds, the Indenture,
the Private Placement Memorandum or any of the Bond Documents to which the
Issuer is a party;
(ii) The sections of the Private Placement Memorandum captioned
"THE ISSUER", "LITIGATION" as it relates to the Issuer, "VALIDATION",
"LEGAL MATTERS " as it relates to the Issuer, "PLACEMENT" and "OTHER
MATTERS" do not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not misleading; and
(iii) The Issuer has complied with all the covenants and satisfied all of
the conditions on its part to be performed or satisfied at or prior to the Closing
Date, and the representations and warranties of the Issuer contained herein and in
each of the Bond Documents to which it is a party are true and correct as of the
Closing Date.
(k) The Placement Agent shall have received an opinion of counsel to the
Borrower, dated the Closing Date and addressed to the Placement Agent, in form and
substance acceptable to the Placement Agent.
(l) The Placement agent shall have received an opinion of counsel to the
Borrower, dated the Closing Date and addressed to the Placement Agent, in form and
substance acceptable to the Placement Agent.
(m) The Placement Agent shall have received a certificate, dated the Closing
Date from the Borrower, to the effect that.
(i) The Private Placement Memorandum does not contain any untrue
statement of a material fact or omit to state any material fact necessary in order to
make the statements contained therein concerning the Borrower, the Refunding
Project, the Series 20 ___ Project, the Prior Loan and the Bonds, in light of the
circumstances under which they were made, not misleading; and
(ii) The Borrower has complied with all of the covenants and satisfied
all of the conditions to be performed or satisfied by it on or prior to the Closing
Date, and the representations and warranties of the Borrower contained in this
Agreement and in each of the Bond Documents to which it is a party are true,
correct and complete as of the Closing Date, and it has full legal right, power and
authority to enter into and carry out the transactions contemplated by the Bond
Documents and the Private Placement Memorandum.
(n) The Placement Agent shall have received a certificate, dated the Closing
Date and signed by an authorized officer of the Trustee, in form and substance acceptable
to the Placement Agent.
(o) The Placement Agent shall have received verification satisfactory to the
Placement Agent and counsel to the Placement Agent of the use of the proceeds of the
Bonds the extent they are used to reimburse the Borrower for costs of acquiring,
constructing, renovating and repairing the Series 20 ___ Project.
(p) The Placement Agent shall have received a certificate of the Issuer, dated
the Closing Date, with respect to the facts, estimates and circumstances and reasonable
expectations pertaining to Section 148 of the Code to support the conclusion that none of
the Bonds will be "arbitrage bonds".
(q) Evidence, satisfactory in form and substance to the Placement Agent and
its counsel, of a satisfactory and favorable conclusion to a bond validation proceeding
under the laws of the State with respect to the Bonds shall have been received.
(r) The Placement Agent shall have received an opinion of its counsel, dated
the Closing Date and addressed to the Placement Agent, in form and substance acceptable
to the Placement Agent.
(s) The Placement Agent, the Issuer and the Borrower shall have received an
opinion of counsel to the Bank, dated the Closing Date and addressed to the Placement
Agent, the Issuer and the Borrower, in form and substance acceptable to the Placement
Agent and the Issuer.
(t) The Placement Agent and the Issuer shall have received a certificate
acceptable in form and substance to the Placement Agent and the Issuer, dated the Closing
signed by an authorized officer of the Bank, to the effect that (i) he or she is an authorized
officer of the Bank, (ii) the Letter of Credit has been duly executed and delivered by the
Bank and (iii) to the best of said authorized officer's knowledge, the financial information
with respect to the Bank set forth in the Private Placement Memorandum is true and
correct in all material respects as of the date of such information.
(u) The Placement Agent shall have received a certified copy of a transcript of
all proceedings taken by the Issuer relating to the authorization and issuance of the
Bonds.
(v) The Placement Agent shall have received a certificate acceptable in form
and substance to the Placement Agent and the Issuer, dated the Closing Date and signed
by an authorized officer of the Bank, to the effect that all of the requirements of the Letter
of Credit Agreement to be satisfied prior to the Closing Date have been satisfied.
(w) Evidence satisfactory in form and substance to the Placement Agent that
the Prior Loan has been currently refunded on the Closing Date.
(x) Such additional certificates, opinions and other documents as the
Placement Agent, its counsel or Bond Counsel may reasonably request to evidence
performance of or compliance with the provisions of this Agreement and the transaction
contemplated hereby and by the Private Placement Memorandum, all such certificates and
other documents to be satisfactory in form and substance to the Placement Agent and its
counsel, shall have been received.
(y) If any conditions to the obligations of the Placement Agent or the Issuer
contained in this Agreement are not satisfied and the satisfaction of such conditions shall
not be waived by the Placement Agent and the Issuer, then, in the opinion of the
Placement Agent and the Issuer, (i) the Closing Date shall be postponed for such period
as may be necessary for such conditions to be satisfied or (ii) without limiting the
generality of Section 15 hereof the obligations of the Placement Agent and the Issuer
under this Agreement shall terminate, neither the Placement Agent nor the Issuer shall
have any further obligations or liabilities hereunder, and the Borrower shall have no
further obligations or liabilities hereunder other than its obligations under Sections 6 and
II hereof
(z) All of the legal opinions, certificates, proceedings, instruments and other
documents mentioned above or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions hereof if but only if they are in form and substance
satisfactory to the Placement Agent and the Issuer.
10. TERMINATION
The Placement Agent may terminate its obligations hereunder by written notice to the
Issuer and the Borrower if at any time subsequent to the date hereof and on or prior to the
Closing Date, any of the following shall occur:
(a) (i) Legislation shall have been enacted by the Congress, or recommended
to the Congress for passage by the President of the United States or the Department of the
Treasury of the United States or the Internal Revenue Service or any member of the
United States Congress or favorably reported for passage to either House of the Congress
by any Committee of such House to which such legislation has been referred for
consideration, or (ii) a decision shall have been rendered by a court established under
Article III of the Constitution of the United States, or the United States Tax Court, or (iii)
an order, ruling, regulation or communication (including a press release) shall have been
issued by the Department of the Treasury of the United States or the Internal Revenue
Service, in each case referred to in clauses (i), (ii) and (iii), with the purpose or effect,
and reasonable likelihood, directly or indirectly, of imposing federal income taxation
upon interest to be received by any owner of the Bonds.
(b) Legislation shall have been enacted or a decision by a court of the United
States shall be rendered or any action taken by the Securities and Exchange Commission
which, in the opinion of counsel to the Placement Agent, has the effect of requiring the
offer or sale of the Bonds to be registered under the Securities Act of 1933, as amended,
or the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, or
any event shall have occurred that, in the judgment of the Placement Agent, makes
untrue or incorrect in any material respect any statement or information contained in the
Private Placement Memorandum or that, in the judgment of the Placement Agent, should
be reflected therein in order to make the statements contained therein not misleading in
any material respect.
(c) (i) In the judgment of the Placement Agent, the market price of the
Bonds is adversely affected because (A) additional material restrictions not in force as
of the date hereof shall have been imposed upon trading in securities generally by any
governmental authority or by any national securities exchange, (B) the New York Stock
Exchange or other national securities exchange, or any governmental authority, shall
impose, as to the Bonds or similar obligations, any material restrictions not now in
force, or increase materially those now in force, with respect to the extension of credit
by, or the charge to the net capital requirements of placement agents, (C) a general
banking moratorium shall have been established by federal, New York or State
authorities, or (D) a war involving the United States of America shall have been
declared, or any other national or international calamity shall have occurred, or any
conflict involving the armed forces of the United States of America shall have escalated
to such a magnitude, in any such case so as to materially affect the ability of the
Placement Agent to market the Bonds, or (ii) any litigation shall be instituted, pending
or threatened to restrain or enjoin the issuance or sale of the Bonds or in any way
contesting or affecting any authority or security for or the validity of the Bonds, or the
existence or powers of the Issuer.
(d) There shall have occurred any change that, in the reasonable judgment of
the Placement Agent, makes unreasonable or unreliable any of the assumptions upon
which (i) yield on the Bonds for purposes of compliance with the Code, (ii) payment of
principal, purchase price payment and interest on the Bonds, or (iii) the basis for the
exclusion from gross income for federal income tax purposes of interest on the Bonds, is
predicated.
(e) There shall have occurred any material change in the business or affairs of
the Issuer, the Bank or the Borrower or any material change in the Refunding Project or
the Series ____ Project which, in the reasonable judgment of the Placement Agent,
materially adversely affects the investment quality of the Bonds.
(f) Any legislation, ordinance, rule or regulation shall be enacted or be
actively considered for enactment by any governmental body, department or agency of
the State or a decision by any court of competent jurisdiction within the State shall be
rendered, which, in the reasonable opinion of the Placement Agent, materially or
adversely affects the market price of the Bonds.
(g) A stop order, ruling, regulation or memorandum by or on behalf of the
Office of the Secretary of State of the State shall be issued or made to the effect that the
issuance, offering or sale of the Bonds, or of obligations of the general character of the
Bonds as contemplated hereby, is a violation of any provisions of the Blue Sky laws of
the State.
(h) Any condition to the Placement Agent's obligations hereunder is not
satisfied or because of any refusal, inability or failure on the part of the Borrower or the
Issuer to comply with any of the terms or to fulfill any of the conditions provided for or
contemplated by this Agreement, or if for any reason the Borrower
