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HomeMy WebLinkAboutResolution - 121373A - Proposal - TX Commerce Bank - Certificates Of Obligations For Memorial Civic Cen - 12_13_1973Office of the City Secretary- . _ PORTER 2-6411 -. - Treasurer BOX 2000 - LUBBOCK. TEXAS 7040E . December 14, 1973 Mr. C. B. Carter President, Texas Commerce Bank 1314 Avenue K Lubbock, Texas 79401 Dear Mr. Carter: Enclosed is an executed copy of proposal of Texas Commerce Bank, and acceptance by the City, pursuant to motion adopted by the City Council December 13, 1973, in regard to Certificates of Obligation, concerning construction of Memorial Civic Center, Yours very truly,` `r P� (Mr .) Lavenia Lowe City Secretary -Treasurer. LL:tp Encl. To the Honorable Mayor and City Council City of Lubbock Lubbock, Texas. December 13, 1973 Gentlemen: We understand that you are contemplating the authorization and issuance of legally issued Certificates of Obligation in payment of a portion of the cost of constructing a civic center for the City of Lubbock_ Such Certificates of Obligation would be delivered to a Contractor based on construction estimates authorized by your architects and approved by you, and could be retained by him - or assigned to others, such election to be made by him at the time his proposal is made to the City. In connection with these Certificates of Obligation, we propose as follows: A. We will accept delivery of not to exceed $3,500,000 legally issued Certificates of Obligation from the Contractor at the price of par flat (face value, no accrued interest), such assignment to by made in writing without recourse within 30 days after the receipt of each installment of Certificates. of Obligation by the Contractor. Each installment of Certi- ficates is to be accompanied by a signature and no -litigation certificate executed by the Mayor and City Secretary relating to each installment of Certificates delivered. B . Our acceptance of the Certificates of Obligation is strictly subject to the following conditions: 1. That the Certificates of Obligation will be approved by Dumas, Suguenin, Boothman and Morrow, Bond Attorneys, Dallas, Texas, and that we will be furnished with a copy of their unqualified approving opinion when (a) All of the Certificates of Obligation that will be issued have .. been del vered to the Contractor and assigned to us by the Contractor upon payment of par flat; (b) The project has been completed and payment to the Contractor ` of all Certificates of Obligation and cash due him has been made. It is further understood that we will be furmished with an interim opinion of Dumas,. Huguenin, Boothman and Morrow exhibiting and stating the intention of that firm to issue their final opinion described ` above under the conditions described in (a) and (b). It is understood and agreed that if the Certificates of Obliga- tion are refunded into General Obligation bonds as set forth in Section C below prior to the completion of the project, that Dumas, Huguenin, Boothman and Morrow, Dallas, Texas, will not be required to furnish a copy of their unqualified approving opinion as described above. 2. That the Certificates of Obligation are`oelivered to us at par flat (face value, no accrued interest) at no additional expense to us including the expense of any litigation. 3. That the Certificates of Obligation will be set mip as follows: $3,500,000 City of Lubbock, Texas•Certtificates of Obligation, Series 1974; dated January 15, 1974; all Certificates to bear interest at the rates of 5-5/87 from their date to maturity or to January 1591979, whichever is earlier and at trhe rate of 6% after January 15, 1979: first interest payment :f^ date January 15, 1975 and each July 15 and January 15 thereafter; interest to be evidenced by coupons; principal due January 15 of each year as follows: equal principal (1/20 of final principal r amount authorized) due each year 1975 through 1994; denomination - $1,000; the Certificates to be optional at any time at par and accrued interest subject to 30 days notice to the Paying Agent; Paying Agent to be Texas Commerce Bank, N. A., - Lubbock, Texas. We understand that the Certificates of Obligation will be used in payment of a portion of the cost of the construction of the project and that their issuance will be followed by payment of cash to the Contractor until the project is finally completed and accepted by the City. As stated above, we agree to accept Certifi- cates of Obligation on assignment from the Contractor in even $1,000 amounts up to $3,500,000. 4. It is understood and agreed that each installment of Certificates of Obligation will bear interest to us from the date of their delivery to the" Contractor. Since interest will be paid by coupon, it will be necessary to adjust the interest due on the interest payment date immediately following the date of delivery of each Certificate. It is agreed that adjustmalt may be made by either of the two following methods, with all calculations based on standard interest tables using a 360 day year: Alternative No. 1 The City may pay the full amount of the coupon that is due, to the Paying Agent, and the Paying Agent will remit to the City an _ amount representing the difference between (1) interest for the -full period and (2) interest from the date of delivery of the Certificate to the Contractor to the interest payment date.. As an example:- A $1,000, 5-5/87, Certificate of Obligation dated January 15, 1974, is delivered to the Contractor on•March 15, 1974. The next interest payment date is January 15, 1975. On January 15, 1975, the interest would be settled as follows: (1) City pays to Paying Agent interest coupon due 1-15-1975, 5-5/8%, 12 months, $1,000---------- $ 56.25 Less: (2) Interest due 3-15-1975 (delivery date), to 1-15-1975, 10 months, @ 5-5/8i, $1,000, factor 46.875-------------------------------------------- 46.88 Paying Agent remits to City -------------------------------- L2.37 Alternative No. 2 The Paying Agent and the City may mutually agree that the City will pay the net amount of interest due; thus in the above example the City would simply remit $46.88 to the Paying Agent. .It is also agreed that any coupons that have matured prior to the delivery of a Certificate to the Contractor will be detached and cancelled prior to delivery. C. It is understood and agreed that the City will use its best efforts, following issuance and delivery of the entire authorized amount of Certificates to a Contractor and their subsequent assignment to us, to refund the Certificates into refunding bonds which would be delivered to a purchaser in exchange for the Certificates held by us. We understand that in no event can the City effect refunding of the Certificates until all of the authorized Certificates have been issued and it is also possible that refunding may not be accomplished until the entire project has been completed. 3 - D. This agreement shall be terminated by: 1. Failure of the City to award a valid contract to a Contractor within Ninety (90) days from the date of the adoption of this agreement by the City Council; or 2. The election of the Contractor at the time he bids to retain the Certificates of Obligation; 3. If the Contractor has elected to assign the Certificates of Obligation to us, the final delivery of the last installment of Certificates of Obligation to the Contractor and their assignment to us followed by our receipt of the final approving opinion of Dumas, Huguenin, Boothmau and Morrow upon completion and acceptance of the project as referred to in Section B above, or by the re- funding of the Certificates of Obligation prior to final completion of the project. Respectfully submitted, Tetras Commerce Bank, N A. Lubbock, Texas v By Y e� thorize Representative ACCEPTANCE ACCEPTED pursuant to a motion adopted by the City Council, City of Lubbock, Texas. ' on this the 13th day of �pcember , 19 7� Mayor, City of Lubbock, Texas ATTEST: City Secretary, City 0 -Lubbock, Texas December 13, 1973 To the Honorable Mayor and City Council City of Lubbock Lubbock, Texas Gentlemen: We understand that you contemplate the authorization and issuance of legally issued Certificates of Obligation in payment of a portion of the cost of constructing a civic center for the City of Lubbock. Such Certificates of Obligation would be delivered to a Contractor based on construction estimates authorized by your architect and approved by you, and could be retained by him or assigned to others, such election to be made by him at the time his proposal is made to the City. In connection with these Certificates of Obligation, we propose as follows: ' 1. We will assist you in the authorization and legal issuance of the Certificates of Obligation with the legal proceedings throughout the entire program to be prepared and directed by Dumas, Huguenin, Boothman and Morrow, Bond Attorneys, Dallas, Texas, whom the City will employ. Dumas, Huguenin, Boothman and Morrow will be directed"to look to us for payment of their fees and charges on this matter in every respect. When the Certificates of Obligation have been issued and the project has been fully completed with full payment to the Contractor having been made by Certificates and cash, Dumas, Huguenin, Boothman and Morrow will issue their final unqualified approving opinion on the Certificates of Obligation for the benefit of the Contractor, or, if the Contractor elected to assign the Certificates of Obligation, the assignee referred to above. 2. We will attend to and pay for the printing of the Certificates of Obligation. 3. We agree to direct and coordinate the entire program of financing contemplated through the issuance of Certificates of Obligation and to assume and pay the expenses above enumerated. We will also pay any travel and communication expenses incurred by us in connection with this program. It is specifically understood and agreed, however, that this obligation on our part shall not cover the cost of publica- tion of notices in newspapers or other publications or the expenses of any litigation. 4. As consideration for the services rendered by us and as reim- bursement for the expenses which we are to incur, it is understood and agreed that the City is to pay and we are to accept a cash fee to be computed as follows:, the recommended minimum fee of the Municipal Advisory Council of Texas on general obliga- tion bonds as of April 1, 1970, based on the final'amount of Certificates of Obligation issued plus an amount equal to additional legal fees charged by Dumas, Huguenin, Boothman and Morrow over and above their usual and regular charge for general obligation bonds. This fee will be due and payable when: (1) Dumas, Huguenin, )oothman a -id Morrow issue their unqualified- approving opinion on the Certificates of Obligation; or 2 (2) the Certificates of Obligation are refunded into bonds, whichever first occurs. 5. If for any reason the program contemplated under this plan of financing should not materialize so that no Certificates of Obligation are issued and delivered to a Contractor, the City would owe us nothing. 6. This agreement shall be terminated by the final issuance and delivery of the Certificates of Obligation to the Contractor, their assignment to the purchaser, if the Contractor has elected to do so, and the issuance by Dumas, Huguenin, Boothman and Morrow of their final unqualified approving opinion upon final completion of the project; or by the refunding of the Certificates into bonds in advance of project completion; or by the lapse of 36 months from date of your acceptance hereof during which period no delivery of Certificates of Obligation to a Contractor was made under this agreement; however, if the Certificates of Obligation have not been so delivered within the period specified, this agreement may be extended by mutual consent. 7. This proposal is submitted in duplicate originals. Your acceptance will be indicated by the signature of your Mayor, attested by your City Secretary, on both copies and returning one executed copy to us. Respectfully submitted, ACCEPTANCE ACCEPTED pursuant to a motion adopted by the City Council, City of Lubbock, Texas, on this the 13th day of December , 19 73 Mayor, City of Lubbock, Texas ATTEST: