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HomeMy Public PortalAbout05920 O R D I N A N C E NO. 5920 AN ORDINANCE, authorizing and directing the Executive Director and Secretary-Treasurer on behalf of The Metropolitan St. Louis Sewer District to enter into an Escrow Trust Agreement with Mercantile Trust Company National Association in connection with the issuance of the District's $8,600,000 Adjustable Rate Limited lender Option Clean Water Revenue Bonds. BE IT ORDAINED BY THE BOARD OF TRUSTEES OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT: Section One. The Executive Director and Secretary- Treasurer are hereby authorized and directed on behalf of The Metropolitan St. Louis Sewer District to enter into an Escrow Trust Agreement with Mercantile Trust Company National Association in connection with the issuance of the District's $8,600,000 Adjustable Rate Limited Tender Option Clean Water Revenue Bonds. Ordinance No. 5920 ESCROW TRUST AGREEMENT BETWEEN THE METROPOLITAN ST. LOUIS SEWER DISTRICT AND Mercantile Trust Company National Association, St. Louis, Missouri DATED AS OF APRIL 1, 1985 Entered in Connection with the Issuance of $8,600,000 ADJUSTABLE RATE LIMITED TENDER OPTION CLEAN WATER REVENUE BONDS OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT SERIES A 1985 ESCROW TRUST AGREEMENT THIS ESCROW TRUST AGREEMENT, dated as of April 1, 1985 (the "Agreement"), by and between THE METROPOLITAN ST. LOUIS SEWER DISTRICT, a municipal corporation organized and existing under the laws of the State of Missouri (the "District"). and Mercantile Trust Company National Association, a national banking institution located in the City of St. Louis, Missouri, and having full trust powers, as Escrow Agent (the "Escrow Agent"). WITNESSETH: WHEREAS, The Metropolitan St. Louis Sewer District, a body corporate, a municipal corporation and a political subdivision of the State of Missouri (herein called the "District"), now owns and operates a revenue producing sewerage system serving the District and its inhabitants; and WHEREAS, the District is subject to the provisions of the Federal Water Pollution Control Act as amended, 33 U.S.C. 466 et seq., commonly referred to as the Clean Water Act (the "Clean Water Act") the stated objective of which is to restore and maintain the chemical, physical, and biological integrity of the nation's waters; and WHEREAS, the District desires to make extensions and improvements to its sewerage system to bring the District into compliance with the Clean Water Act; and WHEREAS, the District is authorized under the provisions of Article VI, Section 30 of the Missouri Constitution and the Plan of the District adopted by the voters within the District for its government (the "Plan"), to issue and sell revenue bonds for the purpose of paying all or part of the cost of acquiring, constructing, improving or extending sewer or drainage facilities (collectively the "sewerage system" or "system") of the District, provided that the cost of operation and maintenance thereof and the principal of and interest on such revenue bonds shall be payable solely from the revenues derived by the District from the operation of such system; and WHEREAS, pursuant to such authority, a special election was held in the District on Tuesday, August 7, 1984, for the purpose of submitting to the qualified electors of the District the question whether to issue the Clean Water Revenue Bonds of the District in the amount of $60,000,000 for the purpose of extending and improving the sewerage system of the District, the cost of operation and maintenance of said system and the principal of and interest on said revenue bonds to be payable solely from the revenues derived by the District from the operation of its sewerage system, including all future extensions and improvements thereto; and 2 WHEREAS, said special election was held in the District on Tuesday, August 7, 1984, pursuant to the Plan of the District and the Constitution and laws of the State of Missouri and it was found and determined that more than four-sevenths of the qualified electors of the District voting on the question had voted in favor of the issuance of said revenue bonds for the purpose of aforesaid, the vote on said question having been 154,168 votes for said question to 81,764 votes against said question; and WHEREAS, the Board of Trustees of the District has caused plans for a five year capital improvement program to be prepared to bring the District into compliance with the Clean Water Act (the "Clean Water Capital Improvement Program"); and WHEREAS, the estimated cost of the first phase of the Clean Water, Capital Improvement Program is $99,350,000, to be funded $45,551,000 from federal grants, $17,922,000 from state grants, and $35,877,000 from funds to be provided by the District; and WHEREAS, none of the bonds so authorized by the voters of the District have heretofore been issued, and it is hereby found and determined that it is necessary that the District issue and deliver forthwith its Adjustable Rate Limited Tender Option Clean Water Revenue Bonds in the principal amount of $8,600,000 for the purpose of paying a portion of the cost of said Clean Water Capital Improvement Program; and WHEREAS, pursuant to Ordinance No. 5919, adopted on March 13, 1985 (the "Bond Ordinance"), the District has heretofore authorized the issuance and delivery of $8,600,000 principal amount of its Adjustable Rate Limited Tender Option Clean Water Revenue Bonds, Series A 1985, dated April 1, 1985 (the "Bonds"), for the purpose of providing funds, together with other funds of the District which are or will become available to pay the cost of said extensions and improvements; and WHEREAS, a lawsuit has been filed against the District challenging the validity of the August 7, 1984 bond election of the District and the District's authority to issue the bonds and to satisfy its covenants under the Bond Ordinance; and WHEREAS, said lawsuit has been dismissed with prejudice by the trial court and the trial court's decision has been appealed; and WHEREAS, the District is under order by the Environ-mental Protection Agency to proceed with said extensions and improvements of its sewerage system and it is necessary that the District issue the Bonds at this time to obtain financing for and to obtain the release of federal grants for said extensions and 3 improvements; and WHEREAS, the District is also desirous of issuing the Bonds at this time because of favorable market conditions; and WHEREAS, the financial advisor to the District has advised that the provisions of this Escrow Trust Agreement are desirable to protect the holders of the Bonds in the event of an adverse ruling in the litigation and to induce their purchase of the Bonds, and the District is desirous of entering into this Escrow Trust Agreement to protect the interest of the holders of the Bonds pending resolution of the litigation, NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree as follows: 1. Definitions. The following words and terms used in this Escrow Trust Agreement shall have the following meanings: "Agreement" means this Escrow Trust Agreement. "Board" means the Board of Trustees of The Metropolitan St. Louis Sewer District. "Bond Ordinance" means Ordinance No. 5919 of the District adopted on March 13, 1985. authorizing the Bonds. "Bond Payment Date" means any date on which any principal of or interest on any of the Bonds is due and payable. "Bonds" means the Adjustable Rate Limited Tender Option Clean Water Revenue Bonds of The Metropolitan St. Louis Sewer District, Series A 1985, in the principal amount of $8,600,000. "District" means The Metropolitan St. Louis Sewer District. "Escrow Fund" means the Escrow Fund for The Metro-politan St. Louis Sewer District Adjustable Rate Limited Tender Option Clean Water Revenue Bonds, Series A 1985, dated April 1, 1985. created by Section 3 of this Agreement. "Escrow Agent" means Mercantile Trust Company, National Association, St. Louis, Missouri, and its successor or successors at the time acting as the Escrow Agent under this Agreement. "Escrowed Securities" means the direct obligations of the United States of America listed on Schedule II attached hereto and any Substitute Escrowed Securities. 4 "Paying Agent and Bond Registrar" means the Paying Agent and Bond Registrar for the Bonds as designated in the Bond Ordinance, and any successor or successors at the time acting as Paying Agent and Bond Registrar for the Bonds. "Redemption Date" means any date established for redemption of the Bonds pursuant to the provisions of Article III of the Bond Ordinance. "Substitute Escrowed Securities" means direct obligations of, or obligations guaranteed by, the United States of America which have been acquired by the Escrow Agent and substituted for Escrowed Securities in accordance with Section 7(e) of this Agreement. 2. Receipt of Bond Ordinance. Receipt of a true and correct copy of the Bond Ordinance is hereby acknowledged by the Escrow Agent, and reference herein to or citation herein of any provision of said document shall be deemed to incorporate the same as a part hereof in the same manner and with the same effect as if it was fully set forth herein. 3. Creation of the Escrow Fund. There is hereby created and established with the Escrow Agent a special and irrevocable escrow trust fund designated "The Escrow Fund for The Metropolitan St. Louis Sewer District Adjustable Rate Limited Tender Option Clean Water Revenue Bonds, Series A 1985, dated April 1, 1985" (the "Escrow Fund") to be held in the custody of the Escrow Agent as trustee for the benefit of the holders of the Bonds and the District as their respective interests may appear under the terms of this Agreement. 4. Verification of Certified Public Accountants. Ernst & Whinney, Certified Public Accountants, have verified that there will always be, on any date of calculation, sufficient cash in the Escrow Fund to pay interest on the Bonds on the respective Bond Payment Dates on and prior to February 15, 1988, and principal of the Bonds in the event of a redemption of the Bonds pursuant to Sections 301(A) and (B) and Section 304 of the Bond Ordinance. 5. Deposits to the Escrow Fund. Concurrently with the execution and delivery of this Agreement, and pursuant to the provisions of the Bond Ordinance, the District herewith deposits, or causes to be deposited, with the Escrow Agent, and the Escrow Agent acknowledges receipt and deposit into the Escrow Fund of, the Escrowed Securities and cash in the amount of $ . 6. Creation of Lien. The escrow created hereby shall be irrevocable. The holders of the Bonds and the District, as their respective interests may appear under the terms of this 5 Agreement, are hereby given an express lien on and security interest in the Escrowed Securities and the cash in the Escrow Fund and all earnings thereon until used and applied in accordance with this Agreement. The matured principal of and earnings on the Escrowed Securities and any cash in the Escrow Fund are hereby pledged and assigned and shall be applied for the purposes specified herein in accordance with the terms of this Agreement. 7. Escrowed Securities and Moneys in the Escrow Fund. Except as otherwise expressly provided in this Section 7, the Escrow Agent shall have no power or duty to invest any moneys held hereunder or to sell, transfer or otherwise dispose of any Escrowed Securities. (a) On or prior to each Bond Payment Date the Escrow Agent shall withdraw from the Escrow Fund an amount equal to the principal of, redemption premium, if any, and interest on the Bonds becoming due and payable on such Bond Payment Date, as set forth in Schedule I attached hereto, and shall forward such amount to the office of the Paying Agent and Bond Registrar, so that such funds will reach the office of the Paying Agent and Bond Registrar in immediately available funds on or before such Bond Payment Date. (b) In the event of receipt of notice from the Paying Agent and Bond Registrar of a redemption of the Bonds pursuant to Article III of the Bond Ordinance, on or prior to the Redemption Date, the Escrow Agent shall withdraw from the Escrow Fund an amount equal to the principal of, redemption premium, if any, and interest on the Bonds being redeemed on such Redemption Date, and shall forward such amount to the office of the Paying Agent and Bond Registrar, so that such funds will reach the office of the Paying Agent and Bond Registrar on or before such Redemption Date. (c) Upon receipt by the Escrow Agent (i) from the District of a certificate of the Board and an opinion from the District's general counsel that there is no litigation pending or, to the knowledge of the District. threatened in any Court (State or Federal) seeking to restrain or enjoin the issuance or delivery of the Bonds, or questioning the proceedings under which the Bonds are to be issued. the validity of the Bonds, or the pledge by the Board of the moneys pledged under the Ordinance, and the unqualified approving legal opinion of attorneys nationally recognized on the subject of municipal bonds as to the validity of the Bonds and as to the tax exempt status of interest on the Bonds under State and Federal law, or (ii) written consent of the holders of 100% of the principal amount of the Bonds at the time outstanding, all moneys and Escrowed 6 Securities in the Escrow Fund, together with any interest thereon, shall be transferred to the Secretary-Treasurer of the District for deposit into the District's Sewerage System Construction Fund established and maintained pursuant to the provisions of the Bond Ordinance. (d) In order to make the payments required by Section 7(a)-(c) of the Agreement, the Escrow Agent is hereby authorized to redeem or otherwise dispose of Escrowed Securities in which moneys of the Escrow Fund are invested. The liability of the Escrow Agent to make the payments required by this Section 7(a)-(c) shall be limited to the moneys and Escrowed Securities in the Escrow Fund. (e) At the written request of the District and upon compliance with the conditions hereinafter stated, the Escrow Agent shall have the power to sell, transfer or otherwise dispose of or request the redemption of the Escrowed Securities acquired hereunder and to sub-stitute for the Escrowed Securities other direct obligations of or obligations guaranteed by the United States of America (the "Substitute Escrowed Secur-ities"), which are not subject to redemption prior to maturity except at the option of the holder thereof. The District hereby covenants and agrees that it will not request the Escrow Agent to exercise any of the powers described in the preceding sentence in any manner which, if reasonably expected on the date of issuance hereof, would cause any of the Bonds to be an "arbitrage bond" within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended. and the regulations thereunder in effect on the date of such request and applicable to obligations issued on the issue date of the Bonds. The Escrow Agent shall purchase such Substitute Escrowed Securities with the proceeds derived from the sale, transfer, disposition or redemption of the Escrowed Securities together with any other funds available for such purpose. The fore-going transactions may be effected only if: (i) an independent certified public accountant shall certify that after such transaction the principal amount of and interest income on the Substitute Escrowed Securities will, together with any other moneys available for the purpose, be sufficient to pay interest on the Bonds on the respective Bond Payment Dates on and prior to February 15, 1988, and principal of the Bonds in the event of a redemption of the Bonds pursuant to Sections 301(A) and (B) and Section 304 of the Bond Ordinance; and (ii) the amounts and dates of the anticipated 7 transfers from the Escrow Fund to the Paying Agent and Bond Registrar of the Bonds will not be diminished or postponed thereby; and (iii) the Escrow Agent shall receive an unqualified opinion of attorneys nationally recognized on the subject of municipal bonds to the effect that such disposition and substitution or purchase would not cause any of the Bonds to be an "arbitrage bond" within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, and the regulations thereunder in effect on the date of such disposition, substitution or purchase and applicable to obligations issued on the issue date of the Bonds. (f) Notwithstanding any other provisions of this Agreement, the District hereby covenants that no part of the proceeds of the Bonds or of the moneys or funds in the Escrow Fund shall be used, at any time, directly or indirectly, in a manner which, if such use had been reasonably anticipated on the date of issuance of the Bonds would have caused any of the Bonds to be an "arbitrage bond" under Section 103(c) of the Internal Revenue Code of 1954, as amended, and the regulations of the Treasury Department thereunder proposed or in effect at the time of such use and applicable to obligations issued on the date of issuance of the Bonds. (g) Upon the payment in full of the principal of, redemption premium, if any, and interest on the Bonds, or upon termination of this Agreement, all remaining moneys and Escrowed Securities in the Escrow Fund, together with any interest thereon, shall be transferred to the Secretary-Treasurer of the District for deposit into the District's Sewerage System Revenue Fund created and maintained for the purpose of handling the revenues of the District's Sewerage System. (h) Cash held from time to time in the Escrow Fund shall, to the extent practicable, be invested in direct obligations of the United States of America maturing not later than the next Bond Payment Date. 8. Reports of the Escrow Agent. As long as this Agreement continues, the Escrow Agent shall, at least 60 days prior to each Bond Payment Date, determine the amount of money which will be available in the Escrow Fund to pay the principal of redemption premium, if any, and interest on the Bonds on the next Bond Payment Date and certify in writing to the District (i) the amount so determined, and (ii) a list of the moneys and Escrowed Securities held by it in the Escrow Fund on the date of such 8 certification, including all moneys held by it which were received as interest or profit from Escrowed Securities. 9. Liability of Escrow Agent. (a) The Escrow Agent shall not be liable for any loss resulting from any investment, sale. transfer or other disposition made pursuant to this Agreement and in compliance with the provisions hereof. The Escrow Agent shall have no lien whatsoever on any of the moneys or Escrowed Securities on deposit in the Escrow Fund for the payment of fees and expenses for services rendered by the Escrow Agent under this Agreement or otherwise. (b) The Escrow Agent shall not be liable for the accuracy of the calculations as to the sufficiency of the Escrowed Securities and moneys to pay the Bonds. So long as the Escrow Agent applies the Escrowed Securities and moneys as provided herein, the Escrow Agent shall not be liable for any deficiencies in the amounts necessary to pay the Bonds caused by such calculations. Notwithstanding the foregoing, the Escrow Agent shall not be relieved of liability arising from and proximate to its failure to comply fully with the terms of this Agreement. (c) In the event of the Escrow Agent's failure to account for any of the Escrowed Securities or moneys received by it, said Escrowed Securities or moneys shall be and remain the property of the District in trust for the holders of the Bonds and the District as their respective interests may appear under the terms of this Agreement, and, if for any reason such Escrowed Securities or moneys are not applied as herein provided, the assets of the Escrow Agent shall be impressed with a trust for the amount thereof until the required application shall be made. 10. Fees and Costs of the Escrow Agent. The aggregate amount of the costs, fees and expenses of the Escrow Agent in connection with the creation of the escrow described in and created by this Agreement and in carrying out any of the duties, terms or provisions of this Agreement is $1,000.00 per year for each year or portion of a year, which amount shall be paid annually by the District to the Escrow Agent. Notwithstanding the preceding paragraph, the Escrow Agent shall be entitled to reimbursement from the District of out-of-pocket, legal or extraordinary expenses incurred in carrying out the duties, terms or provisions of this Agreement. Claims for such reimbursement may be made to the District and in no event shall such reimbursement be made from funds held by the Escrow 9 Agent pursuant to this Agreement. 11. Resignation or Removal of Escrow Agent. Successor Escrow Agent. The Escrow Agent at the time acting hereunder may at any time resign and be discharged from its duties and responsibilities hereby created by giving written notice to the District not less than 60 days prior to the date when the resignation is to take effect. Such resignation shall take effect immediately upon the acceptance of the District of the resignation, the appointment of a successor Escrow Agent (which may be a temporary Escrow Agent), the acceptance of such successor Escrow Agent of the terms, covenants and conditions of this Agreement, the transfer of the Escrow Fund, including the moneys and Escrowed Securities held therein, to such successor Escrow Agent and the completion of any other actions required for the principal of and interest on the Escrowed Securities to be made payable to such successor Escrow Agent rather than the resigning Escrow Agent. The Escrow Agent may be removed at any time by an instrument or concurrent instruments in writing, delivered to the Escrow Agent and to the District and signed by the holders of a majority in principal amount of the Bonds then outstanding. The Escrow Agent may also be removed by the District if the Escrow Agent fails to make timely payment of the amounts required to be paid by it by Section 7(a)-(c) of this Agreement to the persons specified in said Section 7(a)-(c). Any removal pursuant to this paragraph shall become effective upon the appointment of a successor Escrow Agent (which may be a temporary successor Escrow Agent), the acceptance of such successor Escrow Agent of the terms. covenants and conditions of this Agreement, the transfer of the Escrow Fund, including the moneys and Escrowed Securities held therein, to such successor Escrow Agent and the completion of any other actions required for the principal of and interest on the Escrowed Securities to be made payable to such successor Escrow Agent rather than the Escrow Agent being removed. In the event the Escrow Agent shall resign or be removed, or be dissolved, or shall be in the course of dissolution or liquidation, or otherwise become incapable of acting hereunder, or in case the Escrow Agent shall be taken under the control of any public officer or officers, or of a receiver appointed by a court, the District shall, upon the written consent of the holders of a majority in principal amount of the Bonds then outstanding, appoint a successor Escrow Agent to fill such vacancy. In the event that no appointment of a successor Escrow Agent shall have been made by such holders and the District pursuant to the foregoing provisions of this Section within 60 days after written notice of resignation of the Escrow Agent has been given to the District, the holder of any of the Bonds or any 10 retiring Escrow Agent may apply to any court of competent jurisdiction for the appointment of a successor Escrow Agent, and such court may thereupon, after such notice, if any, as it shall deem proper, appoint a successor Escrow Agent. No successor Escrow Agent shall be appointed unless such successor Escrow Agent shall be a corporation with trust powers authorized to do business in the State of Missouri and organized under the banking laws of the United States or the State of Missouri and shall have at the time of appointment capital and surplus of not less than $25,000,000. Every successor Escrow Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the District an instrument in writing accepting such appointment hereunder, and thereupon such successor Escrow Agent without any further act, deed or conveyance shall become fully vested with all the rights, immunities, powers, trusts, duties and obligations of its predecessor, but such predecessor shall, nevertheless, on the written request of such successor Escrow Agent or the District, execute and deliver an instrument transferring to such successor Escrow Agent all the estates, properties, rights, powers and trusts of such predecessor hereunder, and every predecessor Escrow Agent shall deliver all securities and moneys held by it to its successor. Should any transfer, assignment or instrument in writing from the District be required by any successor Escrow Agent for more fully and certainly vesting in such successor Escrow Agent the estates, rights, powers and duties hereby vested or intended to be vested in the predecessor Escrow Agent, any such transfer, assignment and instruments in writing shall, on request, be executed, acknowledged and delivered by the District. Any corporation into which the Escrow Agent, or any successor to it of the duties and responsibilities created by this Agreement, may be merged or converted or with which it or any successor to it may be consolidated, or any corporation resulting from any merger, conversion, consolidation or reorganization to which the Escrow Agent or any successor to it shall be a party shall, if satisfactory to the District, be the successor Escrow Agent under this Agreement without the execution or filing of any paper or any other act on the part of the parties hereto, anything herein to the contrary notwithstanding. 12. Termination. This Agreement shall terminate when all transfers required to be made by the Escrow Agent under the provisions hereof shall have been made. 13. Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the District or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such 11 covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement. 14. Successors and Assigns. All of the covenants. promises and agreements in this Agreement contained by or on behalf of the District or by or on behalf of the Escrow Agent shall be binding upon and inure to the benefit of their respective successors and assigns whether so expressed or not. 15. Governing Law. This Agreement shall be governed by the applicable law of the State of Missouri. 16. Headings. Any headings preceding the text of the several Sections hereof, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect. 17. Counterparts. This Agreement may be executed in several counterparts, all or any of which shall be rewarded for all purposes as one original and shall constitute and be but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized officers or appointed officials and their corporate seals to be hereunder affixed and attested as of the date first above written. THE METROPOLITAN ST. LOUIS SEWER DISTRICT By_____ (Seal) Executive Director of the District ATTEST: Secretary-Treasurer of the District 12 MERCANTILE TRUST COMPANY NATIONAL ASSOCIATION (Seal) By Title: ATTEST: Title: SCHEDULE I SCHEDULE I TO ESCROW TRUST AGREEMENT, DATED AS OF APRIL 1, 1985. BETWEEN THE METROPOLITAN ST. LOUIS SEWER DISTRICT, AND MERCANTILE TRUST COMPANY NATIONAL ASSOCIATION, ST. LOUIS, MISSOURI. =============================================================== Bonds Total Yearly Bond Payment Date Principal Interest Payment Payment August 15, 1985 $ $ $ $ February 15, 1986 August 15, 1986 February 15. 1987 August 15, 1987 February 15, 1988 $8,600,000* *Principal due by mandatory redemption. 13 SCHEDULE II SCHEDULE II TO ESCROW TRUST AGREEMENT, DATED AS OF APRIL 1, 1985. BETWEEN THE METROPOLITAN ST. LOUIS SEWER DISTRICT, AND MERCANTILE TRUST COMPANY NATIONAL ASSOCIATION, ST. LOUIS, MISSOURI. =============================================================== ESCROWED SECURITIES I. United States Treasury Obligations - State and Local Government Series: Principal Interest Maturity Amount Rate Certificates of Indebted- ness (Dated / / ): Notes (Dated / / ): Bonds (Dated / / ): 14 2. United States Treasury Obligations - Open Market Securities: TOTAL $ The foregoing Ordinance was adopted March 13, 1985.