HomeMy WebLinkAbout2003-OR-34ORDiNANCE NO. 2003-OR-34
An Ordinance of the City of Jeffersonville authorizing the issuance of sewage
works and storm water revenue bonds for the purpose of providing funds to pay
the cost of certain additions, extensions and improvements to the municipal
sewage works of said City, providing for the safeguarding of the interests of the
owners of said bonds, other matters connected therewith, including the issuance
of notes in anticipation of bonds, and repealing ordinances inconsistent herewith
WHEREAS, the City of Jeffersonville, Indiana (the "City") has heretofore established,
constructed and financed a municipal sewage works and now owns and operates the sewage
works pursuant to IC 36-9-23, and other applicable laws; and
WHEREAS, the Common Council of the City now finds that certain storm water
improvements, additions and extensions to said works are necessary; and that plans,
specifications and estimates have been prepared and filed by the engineers employed by the City
for the construction of said improvements and extensions, as more fully described on Exhibit A
attached hereto (the "Project"), which plans and specifications have been or will be approved by
said Common Council and by all governmental authorities having jurisdiction, including,
particularly, the Indiana Department of Environmental Management; and
WHEREAS, the City has obtained engineer's estimates of the costs for the construction
of said Project and will advertise for and receive bids therefor, which bids will be subject to the
City's obtaining funds to pay for said Project; that on the basis of said estimates, the cost of the
Project, including incidental expenses, will not exceed $3,200,000; and
WHEREAS, the Common Council now finds there are no funds on hand for application
on the costs of the Project and that the cost shall be financed by the issuance of sewage works
revenue bonds, in one or more series, in an aggregate amount not to exceed Three Million Two
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Hundred Thousand Dollars ($3,200,000), and, if necessary, bond anticipation notes (the
"BANs"); and
WHEREAS, the Common Council finds that there are outstanding bonds payable out of
the revenues of the City's sewage works designated (i) "Sewage Works Revenue Refunding
Bonds of 1995," dated November 1, 1995 (the "1995 Bonds"), now outstanding in the amount of
Five Million Twenty Thousand Dollars ($5,020,000), and maturing annually over a period
ending January 1,2011, (ii) "Sewage Works Revenue Bonds, Series 1998," dated December 1,
1998 (the "1998 Bonds"), now outstanding in the amount of Five Million Five Hundred Ninety
Thousand Dollars ($5,590,000), and maturing annually over a period ending January 1, 2019,
and (iii) "Sewage Works Revenue Bonds, Series 1999," dated December 30, 1999 (the "1999
Bonds"), now outstanding in the amount of Three Million One Hundred Forty-four Thousand
Seventy Dollars ($3,144,070), and maturing annually over a period ending January 1, 2020,
which 1995 Bonds, 1998 Bonds and 1999 Bonds constitute a first charge against the Net
Revenues (as hereinafter defined) of the sewage works; and
WHEREAS, the ordinances authorizing the 1995 Bonds, the 1998 Bonds and the 1999
Bonds (collectively, the "Outstanding Bonds") permit the issuance of additional bonds ranking
on a parity with said Outstanding Bonds provided certain conditions can be met, and the City
finds that the finances of said sewage works will enable the City to meet the conditions for the
issuance of additional parity bonds and that, accordingly, the revenue bonds authorized herein, to
be issued in one or more series, shall rank on a parity with the now Outstanding Bonds; and
WHEREAS, the bonfis to be issued pursuant to this ordinance are to be issued subject to
the provisions of the laws of the State of Indiana, including, without limitation, IC 36-9-23, as in
effect on the issue date of the bonds issued hereunder (the "Act"), and the terms and restrictions
of this ordinance; and
WHEREAS, the City desires to authorize the issuance of BANs hereunder, if necessary,
payable solely from the proceeds of the sewage works revenue bonds issued to finance the
aforementioned costs of the Project and to authorize the refunding of said BANs, if issued; and
WHEREAS, the City has been advised that it may be cost efficient to obtain municipal
bond insurance; and
WHEREAS, the Common Council now finds that all conditions precedent to the adoption
of an ordinance authorizing the issuance of revenue bonds and BANs have been complied with
in accordance with the provisions of the Act;
NOW THEREFORE, BE IT ORDAiNED BY THE COMMON COUNCIL OF THE
CITY OF JEFFERSONVILLE, iNDIANA, THAT:
Sec. 1. Proiect Authorization; Sewer Tap Fees. (a) The City proceed with the
construction of the Project in accordance with the cost estimates, and the plans and specifications
heretofore prepared and filed by the consulting engineers employed by the City, which cost
estimates, plans and specifications are by reference made a part of this ordinance as fully as if the
same were attached hereto and incorporated herein and two copies of which are now on file in
the office of the Clerk-Treasurer of the City and are open for public inspection pursuant to IC 36-
I-5-4. The cost of construction of said Project shall not exceed the sum of $3,200,000, plus
investment earnings on the bond and BAN proceeds, without further authorization from this
Common Council. The terms "sewage treatment works," "works," and other like terms where
used in this ordinance shall be construed to mean and include all structures and property of the
City's sewer utility, including items defined at IC 36-9-1~8. The Project shall be constructed in
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accordance with the plans and specifications heretofore mentioned, which plans and
specifications are hereby approved. Said Project shall be constructed and the bonds herein
authorized shall be issued pursuant to and in accordance with the Act.
(b) The Common Council hereby determines that all sewer tap fees collected in
accordance with IC 36-9-23-29 are to be treated and used as Net Revenues of the sewage works.
Sec. 2. Issuance of Bonds and BANs. (a) The City shall issue, if necessary, its BANs for
the purpose of procuring interim financing to apply to the cost of said Project. The City shall
issue its BANs in an amount not to exceed Three Million Two Hundred Thousand Dollars
($3,200,000) to be designated "Sewage Works Bond Anticipation Notes." Said BANs shall be
sold at a price not less than 99.5% of their par value, shall be numbered consecutively from 1
upward, shall be in multiples of $1,000, as designated in the hereinafter defined Purchase
Agreement, shall be dated as of the date of delivery thereof, and shall bear interest at a rate not to
exceed 7% per annum (the exact rate or rates to be negotiated) payable upon maturity. The
BANs will mature no later than three years after their date of delivery. The BANs are subject to
renewal or extension at an interest rate or rates not to exceed 7% per annum (the exact rate or
rates to be negotiated). The term of the BANs and all renewal BANs may not exceed five years
from the date of delivery of the initial BANs. The BANs shall be registered in the name of the
purchasers thereof.
The BANs shall be issued pursuant to IC 5-1.5-8-6.1 if sold to the Indiana Bond Bank or
pursuant to IC 5-1-14-5 if sold to a financial institution or any other purchaser. The principal of
and interest on the BANs shall be payable solely from the issuance of revenue bonds pursuant to
and in the manner prescribed by the Act. The revenue bonds will be payable solely out of and
constitute a first charge against the Net Revenues (herein defined as gross revenues of the
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sewage works of the City remaining after the payment of the reasonable expenses of operation,
repair and maintenance) of the sewage works of the City, including the works herein authorized
to be acquired and constructed and all additions and improvements thereto and replacements
thereof subsequently constructed or acquired, on a parity with the Outstanding Bonds.
(b) The City shall issue in one or more series its "Sewage Works Revenue Bonds, Series
__.," to be completed with the year in which the bonds are issued (the "Bonds"), in an
aggregate principal mount not to exceed $3,200,000 for the purpose of procuring funds to be
applied on the cost of the Project, the payment of costs of issuance, refunding the BANs, if
issued, and all other costs related to the Project, including a premium for municipal bond
insurance.
The Bonds shall be sold at a price not less than 97.5% of the par value thereof, shall be
issued in the denomination of Five Thousand Dollars ($5,000) each or integral multiples thereof,
numbered consecutively from 1 upward, dated as of the first day of the month in which they are
sold or the date of delivery as determined by the Clerk-Treasurer with the advice of the City's
financial advisor, and shall bear interest at a rate or rates not exceeding 7% per annum (the exact
rate or rates to be determined by bidding or by negotiation with the Indiana Bond Bank) payable
semiannually on January 1 and July 1 in each year, commencing on the first January 1 or the first
July 1 following delivery of the Bonds as designated by the Clerk-Treasurer, with the advice of
the City's financial advisor. Each series of the Bonds shall mature annually on January 1 of each
year over a period ending no later than twenty years from the first principal payment date, and in
such amounts as will result in as level annual debt service on all Bonds issued hereunder.
All or a portion of the Bonds may be issued as one or more term bonds, upon election of
the successful bidder. Such term bonds shall have a stated maturity or maturities in the years as
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determined by the successful bidder, but in no event later than the final serial maturity date of the
Bonds as determined in the above paragraph. The term bonds shall be subject to mandatory
sinking fund redemption and final payment(s) at maturity at 100% of the principal amount
thereof, plus accrued interest to the redemption date, on principal payment dates which are
hereinafter determined in accordance with the above paragraph.
Each series of Bonds issued hereunder shall rank on a parity with the others for all
purposes, including the pledge of Net Revenues.
Sec. 3. Registrar and Paving Agent; Book-Entry Provisions. The Clerk-Treasurer is
hereby authorized to contract with a qualified financial institution to serve as Registrar and
Paying Agent for the Bonds (the "Registrar" or "Paying Agent"). The Registrar is hereby
charged with the responsibility of authenticating the Bonds. The Clerk-Treasurer is hereby
authorized to enter into such agreements or understandings with the Registrar as will enable the
institution to perform the services required of a registrar and paying agent. The Clerk-Treasurer
is further authorized to pay such fees as the Registrar may charge for the services it provides as
Registrar and Paying Agent and such fees may be paid from the Sewage Works Sinking Fund
established to pay the principal of and interest on the Bonds as fiscal agency charges. In the
altemative, the Clerk-Treasurer of the City may serve as Registrar and Paying Agent, as
determined by the Mayor and the Clerk-Treasurer. As to the BANs, the Clerk-Treasurer shall
serve as Registrar and Paying Agent and is hereby charged with the duties of Registrar and
Paying Agent.
The principal of the Bonds shall be payable at the principal corporate trust office of the
Paying Agent. All payments of interest on the Bonds shall be paid by check, mailed one
business day prior to the interest payment date to the registered owners thereof as the names
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appear as of the fifteenth day of the month preceding the interest payment date (the "Record
Date") and at the addresses as they appear on the registration books kept by the Registrar or at
such other address as is provided to the Paying Agent in writing by such registered owner. If
payment of principal or interest is made to a depository, payment shall be made by wire transfer
on the payment date in same-day funds. If the payment date occurs on a date when financial
institutions are not open for business, the wire transfer shall be made on the next succeeding
business day. The Paying Agent shall be instructed to wire transfer payments by 1:00 p.m. (New
York City time) so such payments are received at the depository by 2:30 p.m. (New York City
time). All payments on the Bonds shall be made in any coin or currency of the United States of
America, which on the date of such payment, shall be legal tender for the payment of public and
private debts.
Each Bond shall be transferable or exchangeable only upon the books of the City kept for
that purpose at the principal corporate trust office of the Registrar by the registered owner in
person, or by its attorney duly authorized in writing, upon surrender of such Bond together with a
written instrument of transfer or exchange satisfactory to the Registrar duly executed by the
registered owner, or its attorney duly authorized in writing, and thereupon a new fully registered
Bond or Bonds in an authorized aggregate principal amount and of the same maturity, shall be
executed and delivered in the name of the transferee or transferees or the registered owner, as the
case may be, in exchange therefor. The costs of such transfer or exchange shall be borne by the
City except for any tax or governmental charge required to be paid with respect to the transfer or
exchange, which taxes or governmental charges are payable by the person requesting such
transfer or exchange. The City, Registrar and Paying Agent for the Bonds may treat and
consider the person in whose name such Bonds are registered as the absolute owner thereof for
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all purposes including for the purpose of receiving payment of, or on account of, the principal
thereof and interest due thereon.
The Registrar and Paying Agent may at any time resign as Registrar and Paying Agent
upon giving 30 days' notice in writing to the City and by first class mail to each registered owner
of the Bonds then outstanding, and such resignation will take effect at the end of such 30 day
period or upon the earlier appointment of a successor registrar and paying agent by the City.
Any such notice to the City may be served personally or sent by registered mail. The Registrar
and Paying Agent may be removed at any time as Registrar and Paying Agent by the City, in
which event the City may appoint a successor registrar and paying agent. The City shall notify
each registered owner of the Bonds then outstanding by first class mail of the removal of the
Registrar and Paying Agent. Notices to the registered owners of the Bonds shall be deemed to be
given when mailed by first class mail to the addresses of such registered owners as they appear
on the registration books kept by the Registrar.
Upon the appointment of any successor registrar and paying agent by the City, the Clerk-
Treasurer is authorized and directed to enter into such agreements and understandings with such
successor registrar and paying agent as will enable the institution to perform the services
required of a registrar and paying agent for the Bonds. The Clerk-Treasurer is further authorized
to pay such fees as the successor registrar and paying agent may charge for the services it
provides as registrar and paying agent and such fees may be paid from the Sewage Works
Sinking Fund continued in Section 14 hereof. Any predecessor registrar and paying agent shall
deliver all of the Bonds and any cash or investments in its possession with respect thereto,
together with the registration books, to the successor registrar and paying agent.
Interest on the Bonds shall be payable from the interest payment date to which interest
has been paid next preceding the authentication date of the Bonds unless the Bonds are
authenticated after the Record Date and on or before such interest payment date in which case
they shall bear interest from such interest payment date, or unless the Bonds are authenticated on
or before the Record Date preceding the first interest payment date, in which case they shall bear
interest from the original date until the principal shall be fully paid.
The City has determined that it may be beneficial to the City to have the Bonds held by a
central depository system pursuant to an agreement between the City and The Depository Trust
Company, New York, New York ("Depository Trust Company") and have transfers of the Bonds
effected by book-entry on the books of the central depository system ("Book Entry System").
The Bonds may be initially issued in the form of a separate single authenticated fully registered
Bond for the aggregate principal amount of each separate maturity of the Bonds. In such case,
upon initial issuance, the ownership of such Bonds shall be registered in the register kept by the
Registrar in the name of CEDE & CO., as nominee of the Depository Trust Company.
With respect to the Bonds registered in the register kept by the Registrar in the name of
CEDE & CO., as nominee of the Depository Trust Company, the City and the Paying Agent
shall have no responsibility or obligation to any other holders or owners (including any
beneficial owner ("Beneficial Owner")) of the Bonds with respect to (i) the accuracy of the
records of the Depository Trust Company, CEDE & CO., or any Beneficial Owner with respect
to ownership questions, (ii) the delivery to any bondholder (including any Beneficial Owner) or
any other person, other than the Depository Trust Company, of any notice with respect to the
Bonds including any notice of redemption, or (iii) the payment to any bondholder (including any
Beneficial Owner) or any other person, other than the Depository Trust Company, of any amount
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with respect to the principal of, or premium, if any, or interest on the Bonds except as otherwise
provided herein.
No person other than the Depository Trust Company shall receive an authenticated Bond
evidencing an obligation of the City to make payments of the principal of and premium, if any,
and interest on the Bonds pursuant to this ordinance. The City and the Registrar and Paying
Agent may treat as and deem the Depository Trust Company or CEDE & CO. to be the absolute
bondholder of each of the Bonds for the purpose of (i) payment of the principal of and premium,
if any, and interest on such Bonds; (ii) giving notices of redemption and other notices permitted
to be given to bondholders with respect to such Bonds; (iii) registering transfers with respect to
such Bonds; (iv) obtaining any consent or other action required or permitted to be taken of or by
bondholders; (v) voting; and (vi) for all other purposes whatsoever. The Paying Agent shall pay
all principal of and premium, if any, and interest on the Bonds only to or upon the order of the
Depository Trust Company, and all such payments shall be valid and effective fully to satisfy
and discharge the City's and the Paying Agent's obligations with respect to principal of and
premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. Upon
delivery by the Depository Trust Company to the City of written notice to the effect that the
Depository Trust Company has determined to substitute a new nominee in place of CEDE &
CO., and subject to the provisions heroin with respect to consents, the words "CEDE & CO." in
this ordinance shall refer to such new nominee of the Depository Trust Company.
Notwithstanding any other provision hereof to the contrary, so long as any Bond is registered in
the name of CEDE & CO., as nominee of the Depository Trust Company, all payments with
respect to the principal of and premium, if any, and interest on such Bonds and all notices with
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respect to such Bonds shall be made and given, respectively, to the Depository Trust Company
as provided in a representation letter from the City to the Depository Trust Company.
Upon receipt by the City of written notice from the Depository Trust Company to the
effect that the Depository Trust Company is unable or unwilling to discharge its responsibilities
and no substitute depository willing to undertake the functions of the Depository Trust Company
hereunder can be found which is willing and able to undertake such functions upon reasonable
and customary terms, then the Bonds shall no longer be restricted to being registered in the
register of the City kept by the Registrar in the name of CEDE & CO., as nominee of the
Depository Trust Company, but may be registered in whatever name or names the bondholders
transferring or exchanging the Bonds shall designate, in accordance with the provisions of this
ordinance.
If the City determines that it is in the best interest of the bondholders that they be able to
obtain certificates for the fully registered Bonds, the City may notify the Depository Trust
Company and the Registrar, whereupon the Depository Trust Company will notify the Beneficial
Owners of the availability through the Depository Trust Company of certificates for the Bonds.
In such event, the Registrar shall prepare, authenticate, transfer and exchange certificates for the
Bonds as requested by the Depository Trust Company and any Beneficial Owners in appropriate
amounts, and whenever the Depository Trust Company requests the City and the Registrar to do
so, the Registrar and the City will cooperate with the Depository Trust Company by taking
appropriate action after reasonable notice (i) to make available one or more separate certificates
evidencing the fully registered Bonds of any Beneficial Owner's Depository Trust Company
account or (ii) to arrange for another securities depository to maintain custody of certificates for
and evidencing the Bonds.
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If the Bonds shall no longer be restricted to being registered in the name of a Depository
Trust Company, the Registrar shall cause said Bonds to be printed in blank in such number as the
Registrar shall determine to be necessary or customary; provided, however, that the Registrar
shall not be required to have such Bonds printed until it shall have received from the City
indemnification for all costs and expenses associated with such printing.
In connection with any notice or other communication to be provided to bondholders by
the City or the Registrar with respect to any consent or other action to be taken by bondholders,
the City or the Registrar, as the case may be, shall establish a record date for such consent or
other action and give the Depository Trust Company notice of such record date not less than
fifteen (15) calendar days in advance of such record date to the extem possible.
So long as said Bonds are registered in the name of the Depository Trust Company or
CEDE & CO. or any substitute nominee, the City and the Registrar and Paying Agent shall be
entitled to request and to rely upon a certificate or other written representation from the
Beneficial Owners of the Bonds or from the Depository Trust Company on behalf of such
Beneficial Owners stating the amount of their respective beneficial ownership interests in the
Bonds and setting forth the consent, advice, direction, demand or vote of the Beneficial Owners
as of a record date selected by the Registrar and the Depository Trust Company, to the same
extent as if such consent, advice, direction, demand or vote were made by the bondholders for
purposes of this ordinance and the City and the Registrar and Paying Agent shall for such
purposes treat the Beneficial Owners as the bondholders. Along with any such certificate or
representation, the Registrar may request the Depository Trust Company to deliver, or cause to
be delivered, to the Registrar a list of all Beneficial Owners of the Bonds, together w/th the
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dollar amount of each Beneficial Owner's interest in the Bonds and the current addresses of such
Beneficial Owners.
Sec. 4. Redemption of BANs and Bonds. (a) The BANs are prepayable by the City, in
whole or in part, at any time upon 7 days' notice to the owner of the BANs without any
premium.
(b) Each series of the Bonds of this issue are redeemable at the option of the City, but no
earlier than ten (10) years after the date of delivery of the Bonds, and on any date thereafter, on
thirty (30) days' notice, in whole or in part, in the order of maturity as determined by the City
and by lot within a maturity, at face value, together with a premium no greater than 2%, plus in
each case accrued interest to the date fixed for redemption. The exact redemption features shall
be determined by the Clerk-Treasurer with the advice of the City's financial advisor prior to the
sale of the Bonds.
(c) If any Bond is issued as a term bond, the Paying Agent shall credit against the
mandatory sinking fund requirement for the Bonds maturing as term bonds, and corresponding
mandatory redemption obligation, in the order determined by the City, any Bonds maturing as
term bonds which have previously been redeemed (otherwise than as a result of a previous
mandatory redemption requirement) or delivered to the Registrar for cancellation or purchased
for cancellation by the Paying Agent and not theretofore applied as a credit against any
redemption obligation. Each Bond maturing as a term bond so delivered or canceled shall be
credited by the Paying Agent at 100% of the principal amount thereof against the mandatory
sinking fund obligation on such mandatory sinking fund date, and any excess of such amount
shall be credited on future redemption obligations, and the principal amount of the Bonds to be
redeemed by operation of the mandatory sinking fund requirement shall be accordingly reduced;
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provided, however, the Paying Agent shall credit only such Bonds maturing as term bonds to the
extent received on or before forty-five (45) days preceding the applicable mandatory redemption
date as stated above.
Each Five Thousand Dollars ($5,000) principal mount shall be considered a separate
bond for purposes of optional and mandatory redemption. If less than an entire maturity is called
for redemption, the Bonds to be called shall be selected by lot by the Registrar. If some Bonds
are to be redeemed by optional redemption and mandatory sinking fund redemption on the same
date, the Registrar shall select by lot the Bonds for optional redemption before selecting the
Bonds by lot for the mandatory sinking fund redemption.
(d) In either case, notice of such redemption shall be given at least thirty (30) days prior
to the date fixed for redemption by mall unless the notice is waived by the registered owner of a
Bond. Such notice shall be mailed to the ad&ess of the registered owners as shown on the
registration records of the City as of the date which is forty-five (45) days prior to such
redemption date. The notice shall specify the date and place of redemption and sufficient
identification of the Bonds called for redemption. The place of redemption shall be determined
by the City. Interest on the Bonds so called for redemption shall cease on the redemption date
fixed in such notice if sufficient funds are available at the principal office of the Paying Agent to
pay the redemption price on the date so named. Coincidentally with the payment of the
redemption price, the Bonds so called for redemption shall be surrendered for cancellation.
Sec. 5. Execution and Negotiability. Each of the BANs and Bonds shall be executed in
the name of the City by the manual or facsimile signature of the Mayor and attested by the
manual or facsimile signature of its Clerk-Treasurer, and the seal of the City shall be affixed,
imprinted or impressed to or on each of the BANs and Bonds manually, by facsimile or any other
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means; and these officials, by the execution of a Signature and No Litigation Certificate, shall
adopt as and for their own proper signatures the facsimile signatures appearing on the Bonds or
BANs. In case any officer whose signature or facsimile signature appears on the Bonds or BANs
shall cease to be such officer before the delivery of the Bonds or BANs, the signature of such
officer shall nevertheless be valid and sufficient for all purposes the same as if such officer had
remained in office until such delivery.
The BANs and Bonds shall have all of the qualities and incidents of negotiable
instruments under the laws of the State of Indiana, subject to the provisions for registration
herein.
The Bonds shall also be authenticated by the manual signature of the Registrar, and no
Bond shall be valid or become obligatory for any purpose until the certificate of authentication
thereon has been so executed.
Sec. 6. Form of Bonds. The form and tenor of the Bonds shall be substantially as
follows, all blanks to be filled in properly prior to delivery:
[Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to the City of Jeffersonville or its agent for
registration of transfer, exchange, or payment, and any certificate issued is registered in the name
of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein].
UNITED STATES OF AMERICA
STATE OF INDIANA
Interest Maturity Original Authentication
Rate . Date Date Date CUSIP
COUNTY OF CLARK
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CITY OF JEFFERSONVILLE
SEWAGE WORKS REVENUE
BOND, SERIES
REGISTERED OWNER:
PRINCIPAL SUM:
The City of Jeffersonville, in Clark County, State of Indiana, for value received, hereby
promises to pay to the Registered Owner named above or registered assigns, solely out of the
special revenue fund hereinafter referred to, the Principal Sum set forth above on the Maturity
Date set forth above (unless this bond be subject to and be called for redemption prior to
maturity as hereinafter provided), and to pay interest hereon at the Interest Rate per annum stated
above from the interest payment date to which interest has been paid next preceding the
Authentication Date of this bond unless this bond is authenticated after the fifteenth day of the
month preceding an interest payment date and on or before such interest payment date in which
case it shall bear interest from such interest payment date or unless this bond is authenticated on
or before 15, 20__, in which case it shall bear interest from the Original Date, until
the principal is paid, which interest is payable semiannually on the first days of January and July
in each year, beginning on 1, 20__.
The principal of this bond is payable at the principal office of
(the "Registrar" or "Paying Agent"), in the __ of , Indiana. All
payments of interest on this bond shall be paid by check, mailed one business day prior to the
interest payment date to the registered owner hereof as of the fifteenth day of the month
preceding such interest payment date at the address as it appears on the registration books kept
by the Registrar or at such other address as is provided to the Paying Agent in writing by the
registered owner. If payment of principal or interest is made to a depository, payment shall be
made by wire transfer on the payment date in same-day funds. If the payment date occurs on a
date when financial institutions are not open for business, the wire transfer shall be made on the
next succeeding business day. The Paying Agent shall wire transfer payments by 1:00 p.m.
(New York City time) so such payments are received at the depository by 2:30 p.m. (New' York
City time). All payments on the bond shall be made in any coin or currency of the United States
of America, which on the dates of such payment, shall be legal tender for the payment of public
and private debts.
THE CITY SHALL NOT BE OBLIGATED TO PAY THIS BOND OR THE INTEREST
HEREON EXCEPT FROM THE HEREINAFTER DESCRIBED SPECIAL FUND, AND
NEITHER THIS BOND NOR THE ISSUE OF WHICH IT IS A PART SHALL IN ANY
RESPECT CONSTITUTE A CORPORATE INDEBTEDNESS OF THE CITY WITHIN THE
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PROVISIONS AND LIMITATIONS OF THE CONSTITUTION OF THE STATE OF
INDIANA.
[The City has designated the bonds as qualified tax-exempt obligations to qualify the
bonds for the $10,000,000 exception from the provisions of Section 265(b)(3) of the Internal
Revenue Code of 1986 relating to the disallowance of the deduction for interest expense
allocable to tax-exempt obligations.]
The terms and provisions of this bond are continued on the reverse side hereof and such
terms and provisions shall for all purposes have the same effect as though fully set forth at this
place.
It is hereby certified and recited that all acts, conditions and things required to be done
precedent to and in the execution, issuance and delivery of this bond have been done and
performed in regular and due form as provided by law.
This bond shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been executed by an authorized representative of the Registrar.
1N WITNESS WHEREOF, the City of Jeffersonville, in Clark County, Indiana, has
caused this bond to be executed in its corporate name by the manual or facsimile signature of its
Mayor, its corporate seal to be hereunto affixed, imprinted or impressed by any means and
attested manually or by facsimile by its Clerk-Treasurer.
CITY OF JEFFERSONVILLE, INDIANA
[SEAL]
Attest:
By
Mayor
Clerk-Treasurer
REGISTRAR'S CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds described in the within-mentioned Ordinance.
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as Registrar
By
Authorized Representative
(To be primed on Reverse Side)
This bond is one of an authorized issue of bonds of the City of Jeffersonville, of like date,
tenor and effect, except as to rates of interest and dates of maturity; aggregating
Dollars ($_ ) [for this series]; numbered
consecutively from 1 up; issued for the purpose of providing funds to be applied on the cost of
storm water additions, extensions and improvements to the City's sewage works (the "Project"),
[to refund interim notes issued in anticipation of the bonds] and to pay issuance expenses [,
including a premium for municipal bond insurance]. This bond is issued pursuant to an
Ordinance adopted by the Common Council of said City on the day of _ ,2003,
entitled "An Ordinance of the City of Jeffersonville authorizing the issuance of sewage works
and storm water revenue bonds for the purpose of providing funds to pay the cost of certain
additions, extensions and improvements to the municipal sewage works of said City, providing
for the safeguarding of the interests of the owners of said bonds, other matters connected
therewith, including the issuance of notes in anticipation of bonds, and repealing ordinances
of Indiana law,
~nconslstent nerew~r (the "Ordinance"), and in accordance with the provisions
including without limitation Indiana Code 36-9-23 as in effect on the date of delivery of the
bonds of this issue (the "Act"), the proceeds of which bonds are to be applied to the costs of the
Project, [the payment of notes issued in anticipation of the bonds,] and expenses incurred in
connection therewith [, including a premium for municipal bond insurance].
pursuant to the provisions of the Act and the Ordinance, the principal of and interest on
this bond and ail other bonds of said issue, [including the Sewage Works Revenue Bonds, Series
~ (the "Series Bonds")] and any bonds hereafter issued on a parity therewith are
payable solely from the S--'~wage Works Sinking Fund continued by the Ordinance (the "Sinking
Fund") to be provided from the Net Revenues (defined as the gross revenues of the sewage
works of the City remaining after the payment of the reasonable expenses of operation, repair
and maintenance) of the sewage works of the City, including ail additions and improvements
thereto and replacements thereof subsequently constructed or acquired.
The City of Jeffersonville irrevocably pledges the entire Net Revenues of the sewage
works to the prompt payment of the principal of and interest on the bonds authorized by the
Ordinance, of which this is one, and any bonds ranking on a parity therewith, including the
Outstanding Bonds [and the Series Bonds] (as defined in the Ordinance) to the extent
necessary for that purpose, and covenants that it will cause to be fixed, maintained and collected
such rates and charges for services rendered by the utility as are sufficient in each year for the
payment of the proper and reasonable expenses of operation, repair and maintenance of the
sewage works and for the payment of the sums required to be paid into the Sinking Fund under
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the provisions of the Act and the Ordinance. If the City or the proper officers thereof shall fail or
refuse to so fix, maintain and collect such rates or charges, or if there be a default in the payment
of the interest on or principal of this bond, the owner of this bond shall have all of the rights and
remedies provided for in the Act, including the right to have a receiver appointed to administer
the works and to charge and collect rates sufficient to provide for the payment of this bond and
the interest hereon.
The City of Jeffersonville further covenants that it will set aside and pay into its Sinking
Fund monthly, as available, or more often if necessary, a sufficient amount of the Net Revenues
of the works for payment of (a) the interest on all bonds which by their terms are payable from
the revenues of the sewage works, as such interest shall fall due, (b) the necessary fiscal agency
charges for paying bonds and interest, (c) the principal of all bonds which by their terms are
payable from the revenues of the sewage works, as such principal shall fall due, and (d) an
additional amount as a margin of safety to [create and] maintain the debt service reserve required
by the Ordinance. Such required payments shall constitute a first charge upon all the Net
Revenues of the sewage works, on a parity with [the Series _ Bonds,] the Outstanding Bonds.
The bonds of this issue maturing on and after January 1, 20 , are redeemable at the
option of the City on i, 20 , or any date thereafter, on thirty (30) days' notice,
in whole or in part, in the order of maturity as determined by the City and by lot within a
maturity, at face value, together with the following premiums:
% if redeemed on 1, 20 or thereafter
on or before ,20 ,
% if redeemed on 1, 20 . or thereafter
on or before ._, 20__;
% if redeemed on 1, 20 or thereafter
- prior to maturity;
plus accrued interest to the date fixed for redemption.
[The bonds maturing on January 1, __ are subject to mandatory sinking fund redemption
prior to maturity, at a redemption price equal to the principal amount thereof plus accrued
interest on January 1 in the years and amounts set forth below:
Year
Amount
* Final Maturity]
Each Five Thousand Dollars ($5,000) principal amount shall be considered a separate
bond for purposes of optional [and mandatory] redemption. If less than an entire maturity is
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called for redemption, the bonds to be redeemed shall be selected by lot by the Registrar. [If
some bonds are to be redeemed by optional redemption and mandatory sinking fund redemption
on the same date, the Registrar shall select by lot the bonds for optional redemption before
selecting the bonds by lot for the mandatory sinking fund redemption.]
Notice of such redemption shall be mailed to the address of the registered owner as
shown on the registration records of the City, as of the date which is forty-five (45) days prior to
such redemption date, not less than thirty (30) days prior to the date fixed for redemption unless
the notice is waived by the registered owner of this bond. The notice shall specify the date and
place of redemption and sufficient identification of the bonds called for redemption. The place
of redemption may be determined by the City. Interest on the bonds so called for redemption
shall cease on the redemption date fixed in such notice if sufficient funds are available at the
place of redemption to pay the redemption price on the date so named.
If this bond shall not be presented for payment or redemption on the date fixed therefor,
the City may deposit in trust with its depository bank an amount sufficient to pay such bond or
the redemption price, as the case may be, and thereafter the registered owner shall look only to
the funds so deposited in trust with said bank for payment and the City shall have no further
obligation or liability in respect thereto.
This bond is transferable or exchangeable only upon the books of the City kept for that
purpose at the principal corporate trust office of the Registrar by the registered owner hereof in
person, or by his attorney duly authorized in writing, upon surrender of this bond together with a
written instrument of transfer or exchange satisfactory to the Registrar duly executed by the
registered owner, or his attorney duly authorized in writing, and thereupon a new fully registered
bond or bonds in an authorized aggregate principal amount and of the same maturity, shall be
executed and delivered in the name of the transferee or transferees or to the registered owner, as
the case may be, in exchange therefor. This bond may be transferred without cost to the
registered owner except for any tax or governmental charge required to be paid with respect to
the transfer. The City, the Registrar, the Paying Agent and any other registrar or paying agent
for this bond may treat and consider the person in whose name this bond is registered as the
absolute owner hereof for all purposes including for the purpose of receiving payment of, or on
account of, the principal hereof and interest due hereon.
[The bonds shall be initially issued in a Book Entry System (as defined in the Ordinance).
The provisions of this bond and of the Ordinance are subject in all respects to the provisions of
the Letter of Representations between the City and DTC, or any substitute agreement, effecting
such Book Entry System.]
This bond is subject to defeasance prior to redemption or payment as provided in the
Ordinance referred to herein. THE OWNER OF THIS BOND, BY THE ACCEPTANCE
HEREOF, HEREBY AGREES TO ALL THE TERMS AND PROVISIONS CONTAINED IN
THE ORDINANCE. The Ordinance may be amended without the consent of the owners of the
bonds as provided in the Ordinance if the Common Council determines, in its sole discretion,
that the amendment shall not adversely affect the rights of any of the owners of the bonds.
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The bonds maturing in any one year are issuable only in fully registered form in the
denomination of $5,000 or any integral multiple thereof.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
this bond and all rights thereunder, and hereby irrevocably
constitutes and appoints attorney, to transfer the within bond in the
books kept for the registration thereof with full power of substitution in the premises.
Dated:
NOTICE: Signature(s) must be
guaranteed by an eligible guarantor
institution participating in a Securities
Transfer Association recognized
signature guarantee program.
NOTICE: The signature to this assignment must
correspond with the name as it appears on the
face of the within bond in every particular,
without alteration or enlargement or any change
whatsoever.
[STATEMENT OF INSURANCE]
Sec. 7. Authorization for Preparation and Sale of the BANs and the Bonds; Municipal
Bond Insurance.. (a) The Clerk-Treasurer is hereby authorized and directed to have the BANs
mid the Bonds prepared, and the Mayor and Clerk-Treasurer are hereby authorized and directed
to execute and attest the BANs and the Bonds in the form and manner provided herein. The
Clerk-Treasurer is hereby authorized and directed to deliver the BANs and the Bonds to the
respective purchasers thereof. At the time of delivery of the BANs and the Bonds, the Clerk-
Treasurer shall collect the full amount which the respective purchasers have agreed to pay
therefor, which amount shall not be less than 99.5% of the face value of said BANs and not less
than 97.5% of the face value of said Bonds, as the case may be, plus accrued interest to the date
of delivery, if any. Payment for the BANs may be made in installments. The Bonds, when fully
paid for and delivered to the purchaser, shall be the binding special revenue obligations of the
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City payable out of the Net Revenues of the sewage works, on a parity with the Outstanding
Bonds. The proper officers of the City are hereby directed to sell the Bonds, to draw all proper
and necessary warrants, and to do whatever acts and things which may be necessary to carry out
the provisions of this ordinance.
(b) Distribution of an Official Statement (preliminary and final) prepared by Crowe
Chizek and CompanY, LLP, on behalf of the City, is hereby approved and the Mayor or the
Clerk-Treasurer are authorized and directed to execute the Official Statement on behalf of the
City in a form consistent with this ordinance. The Mayor or the Clerk-Treasurer are hereby
authorized to designate the Official Statement as "nearly final" for purposes of Rule 15c2-12
promulgated by the Securities and Exchange Commission.
(c) In the event the financial advisor to the City certifies to the City that it would be
economically advantageous for the City to acquire a municipal bond insurance policy for the
Bonds, the City hereby authorizes and directs the Mayor and Clerk-Treasurer to obtain such an
insurance policy. The acquisition of a municipal bond insurance policy is hereby deemed
economically advantageous in the event the difference between the present value cost of (a) the
total debt service on the Bonds if issued without municipal bond insurance and (b) the total debt
service on the Bonds if issued with municipal bond insurance, is greater than the cost of the
premium on the municipal bond insurance policy. If such an insurance policy is purchased, the
Mayor and the Clerk-Treasurer are hereby authorized to execute and deliver all agreements with
the provider of the policy to the extent necessary to comply with the terms of such insurance
policy and the commitment to issue such policy.
Sec. 8. ~Bond Sale_. If the Bonds will be sold at a competitive sale, prior to the sale of said
Bonds, the Clerk-Treasurer shall cause to be published either (i) a notice of bond sale in ~The
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~, two times, at least one week apart, the first publication made at least fifteen (15)
days before the date of the sale and the second publication being made at least three (3) days
before the date of the sale, or (ii) a notice of intent to sell in .The Evening News. and the _Court &_
Commercial Record all in accordance with IC 5-1-11 and IC 5-3-1. A notice of sale may also be
published one time in the Court & Commercial Record, and a summary notice may also be
published in ~ in New York, New York. The notice shall state the character and
mount of the Bonds, the maximum rate of interest thereon, the terms and conditions upon which
bids will be received and the sale made, and such other information as the Clerk-Treasurer and
the attorneys employed by the City shall deem advisable and any summary notice may contain
any information deemed so advisable. The notice may provide, among other things, that each
bid shall be accompanied by a certified or cashier's check or a financial surety bond in an
amount equal to 1% of the principal amount of the Bonds described in the notice to guarantee
performance on the part of the bidder. If a fmancial surety bond is used, it must be from an
insurance company licensed to issue such bond in the State of Indiana, and such bond must be
submitted to the City prior to the opening of the bids. The financial surety bond must identify
each bidder whose good faith deposit is guaranteed by such financial surety bond. If the Bonds
are awarded to a bidder utilizing a financial surety bond, then that purchaser is required to submit
to the City a certified or cashier's check (or wire transfer such amount as instructed by the City)
not later than 3:30 p.m. (Jeffersonville Time) on the next business day following the award. In
the event the successful bidder shall fall or refuse to accept delivery of the Bonds and pay for the
same as soon as the Bonds are ready for delivery, or at the time fixed in the notice of sale, then
said check and the proceeds thereof shall be the property of the City and shall be considered as
its liquidated damages on account of such default. Bidders for said Bonds will be required to
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name the rate or rates of interest which the Bonds are to bear, not exceeding the maximum rate
hereinbefore fixed, and such interest rate or rates shall be in multiples of one-eighth (1/8) or one-
twentieth (1/20) of one percent (1%). The rate bid on a maturity shall be equal to or greater than
the rate bid on the immediately preceding maturity. No conditional bid or bid for less than
97.5% of the face amount of the Bonds will be considered. The opinion of Ice Miller, bond
counsel of Indianapolis, Indiana, approving the legality of said Bonds, will be furnished to the
purchaser at the expense of the City.
The Bonds shall be awarded by the Clerk-Treasurer to the best bidder who has submitted
his bid in accordance with the terms of this ordinance, IC 5-1-11 and the notice of sale. The best
bidder will be the one who offers the lowest net interest cost to the City, to be determined by
computing the total interest on all of the Bonds to their maturities and adding thereto the discount
bid, if any, and deducting the premium bid, if any. The right to reject any and all bids shall be
reserved. If an acceptable bid is not received on the date of sale, the sale may be continued from
day to day thereafter without further advertisement for a period of thirty (30) days, during which
time no bid which provides a higher net interest cost to the City than the best bid received at the
time of the advertised sale will be considered.
As an alternative to public sale, the Clerk-Treasurer may negotiate the sale of said Bonds
to the Indiana Bond Bank at an interest rate or rates not exceeding 7% per amxum. The Mayor
and the Clerk-Treasurer are hereby authorized to: (i) submit an application to the Indiana Bond
Bank; (ii)execute a Bond purchase Agreement with the Indiana Bond Bank with terms
conforming to this ordinance; and (iii) sell such Bonds upon such terms as are acceptable to the
Mayor and the Clerk-Treasurer consistent with the terms of this ordinance.
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Sec. 9. Use of Proceeds and Costs of Issuance. Any accrued interest and any premium
received at the time of the delivery of the Bonds shall be deposited in the Sewage Works Sinking
Fund hereinafter defined. The remaining proceeds from the sale of the Bonds, to the extent not
used to refund BANs, and BAN proceeds shall be deposited in a bank or banks which are legally
designated depositories for the funds of the City, in a special account or accounts to be
designated as "City of Jeffersonville, Sewage Works Construction Account" (the "Construction
Account"). All funds deposited to the credit of the Sewage Works Sinking Fund or the
Construction Account shall be deposited, held, secured or invested in accordance with the laws
of the State of Indiana relating to the depositing, holding, securing or investing of public funds,
including particularly IC 5-13, as amended and supplemented. The funds in the Construction
Account shall be expended only for the purpose of paying the cost of the Project, refunding the
BANs, if issued, or as otherwise required by the Act or for the expenses of issuance of the
Bonds. The cost of obtaining the legal services of Ice Miller, shall be considered as a pan of the
cost of the Project on account of which the BANs and Bonds are issued. Any balance or
balances remaining unexpended in such special account or accounts after completion of the
Project, which are not required to meet unpaid obligations incurred in connection with such
Project, shall either (1) be paid into the Sinking Fund and used solely for the purposes of said
Sinking Fund or (2) be used for the same purpose or type of project for which the Bonds were
originally issued, all in accordance with IC 5-1-13, as amended and supplemented.
Sec. 10. Financial Records and Accounts; Continuing Disclosure. The City shall
keep proper records and books of account, separate from all of its other records and accounts, in
which complete and correct entries shall be made showing all revenues received on account of
the operation of the sewage works and all disbursements made therefrom and all transactions
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relating to the utility. Copies of all such statements and reports shall be kept on file in the office
of the Clerk-Treasurer. The substantially final form of Continuing Disclosure Undertaking
Agreement (the "Agreement") attached hereto is hereby approved by the Common Council, and
the Mayor and the Clerk-Treasurer are hereby authorized and directed to complete and execute
the same on behalf of the City. Notwithstanding any other provisions of this ordinance, failure
of the City to comply with the Agreement shall not be considered an event of defauk under the
Bonds or this ordinance. If the Bonds are sold to the Indiana Bond Bank, the Mayor and the
Clerk-Treasurer are hereby authorized to enter into a continuing disclosure agreement with the
Indiana Bond Bank with terms conforming to this ordinance.
Sec. 11. Pledge of Net Revenues. The interest on and the principal of the Bonds
issued pursuant to the provisions of this ordinance, and any bonds hereafter issued on a parity
therewith, shall constitute a first charge on all the Net Revenues, on a parity with the 1995 Bonds
and the 1998 Bonds, and such Net Revenues are hereby irrevocably pledged to the payment of
the interest on and principal of such Bonds, to the extent necessary for that purpose.
Sec. 12. Sewage Works Revenue Fund. All revenues derived from the operation of
the sewage works and from the collection of sewer and storm water rates and charges shall be
deposited in the Revenue Fund (the "Revenue Fund"), segregated and deposited as set forth in
the ordinances authorizing the 1995 Bonds (''1995 Ordinance"), the 1998 Bonds and 1999 Bonds
("1998 Ordinance") and continued herein. Of the revenues in the Revenue Fund, the proper and
reasonable expenses of operation, repair and maintenance of the works shall be paid, the
principal and interest of all bonds and fiscal agency charges of registrars or paying agents shall
be paid, and the costs o£ replacements, extensions, additions and improvements shall be paid. So
long as the Outstanding Bonds are outstanding, no moneys derived from the revenues of the
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sewage works shall be transferred to any other fund of the City or be used for any purposes not
connected with the sewage works so long as any bonds payable from the revenues of the sewage
works are outstanding.
Sec. 13. Sewage Works Operation and Maintenance Fund. There is hereby
continued the Operation and Maintenance Fund (the "Operation and Maintenance Fund"). On the
last day of each calendar month, revenues of the sewage works shall be transferred from the
Revenue Fund to the Operation and Maintenance Fund. The balance maintained in the
Operation and Maintenance Fund shall be sufficient to pay the expenses of operation, repair and
maintenance for the then next succeeding two (2) calendar months. The moneys credited to this
Operation and Maintenance Fund shall be used for the payment of the reasonable and proper
operation, repair and maintenance expenses of the sewage works on a day-to-day basis, but none
of the moneys in the Operation and Maintenance Fund shall be used for depreciation,
replacements, improvements, extensions or additions. Any monies in the Operation and
Maintenance Fund may be transferred to the Sewage Works Sinking Fund if necessary to prevent
a default in the payment of principal of or interest on the outstanding bonds of the sewage works.
Sec. 14. ~ Fund (a) There is hereby continued a sinking fund for the
payment of the principal of and interest on revenue bonds which by their terms are payable from
the Net Revenues of the sewage works and the payment of any fiscal agency charges in
connection with the payment of bonds, which fund shall be designated the "Sewage Works
Sinking Fund" (herein, "Sewage Works Sinking Fund" or "Sinking Fund"). There shall be set
aside and deposited in the Sinking Fund, as available, and as hereinafter provided, a sufficient
amount of the Net Revenues of the sewage works to meet the requirements of the Bond and
Interest Account (hereinafter defined) and Debt Service Reserve Account (hereinafter defined) in
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the Sinking Fund. Such payments shall continue until the balances in the Bond and Interest
Account and the Debt Service Reserve Account equal the principal of and interest on all of the
then outstanding bonds of the sewage works to their final maturity.
(b) Bond and Interest Account. There shall be credited on the last day of each calendar
month from the Revenue Fund to the Bond and Interest Account of the Sinking Fund an amount
of the Net Revenues equal to (i) one-sixth (1/6) of the interest of all then outstanding bonds
payable on the next succeeding interest payment date and (ii) at least one-twelfth (1/12) of the
principal on all then outstanding bonds payable on the then next succeeding respective interest
and principal payment dates until the amount of interest and principal payable on the then next
succeeding interest and principal payment dates shall have been so credited. There shall
similarly be credited to the account any amount necessary to pay the bank fiscal agency charges
for paying interest on outstanding bonds as the same become payable. The City shall, from the
sums deposited in the Sinking Fund and credited to the Bond and Interest Account, remit
promptly to the registered owner or to the bank fiscal agency sufficient moneys to pay the
interest and principal on the due dates thereof together with the amount of bank fiscal agency
charges.
(c) D_Debt Service Reserve Account. Funds representing the margin of safety for the
Bonds established and maintained pursuant to this ordinance shall be deposited into the Debt
Service Reserve Account of the Sinking Fund (the "Debt Service Reserve Account"). On the
date of delivery of the Bonds, the City may deposit Bond proceeds, funds on hand, or a
combination thereof into the Debt Service Reserve Account. The balance accumulated in the
Debt Service Reserve Account shall not exceed the least of (i) the maximum annual debt service
on the Bonds and the Outstanding Bonds, (ii) 125% of average annual debt service on the Bonds
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and the Outstanding Bonds, or (iii) 10% of the stated principal mount of the Bonds and the
Outstanding Bonds (the "Reserve Requirement"). If the initial balance in the Debt Service
Reserve Account is less than the Reserve Requirement, an amount of Net Revenues shall be
credited to the Debt Service Reserve Account on the last day of each calendar month until the
balance therein equals the Reserve Requirement. The monthly deposits shall be equal in amount
and sufficient to accumulate the Reserve Requirement within five (5) years of the date of
delivery of the Bonds. The Debt Service Reserve Account shall constitute the margin for safety
and protection against default in the payment of principal of and interest on the Outstanding
Bonds and the Bonds, and the moneys in the Debt Service Reserve Account shall be used to pay
current principal and interest on the Outstanding Bonds and the Bonds to the extent that moneys
in the Bond and Interest Account are insufficient for that purpose. Any deficiency in the balance
maintained in the Debt Service Reserve Account shall be made up from the next available Net
Revenues remaining after credits into the Bond and Interest Account. Any moneys in the Debt
Service Reserve Account in excess of the Reserve Requirement shall either be transferred to the
Sewage Works Improvement Fund or be used for the purchase of outstanding bonds or
installments of principal of fully registered bonds.
Sec. 15. Sewage Works Improvement Fund. Any excess revenues over and above
the requirements of the Operation and Maintenance Fund and Sinking Fund may be transferred
or credited from the Revenue Fund to the Sewage Works Improvement Fund hereby continued
(the "Improvement Fund"), and the Improvement Fund shall be used for improvements,
replacements, additions and extensions of the sewage works. Moneys in the Improvement Fund
shall be transferred to the Sinking Fund if necessary to prevent a 'default in the payment of
principal and interest on the then outstanding bonds or, if necessary, to eliminate any deficiencies
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in credits to or minimum balance in the Debt Service Reserve Account of the Sinking Fund or
may be transferred to the Operation and Maintenance Fund to meet unforeseen contingencies in
the operation, repair and maintenance of the sewage works.
Sec. 16. Maintenance of Funds. The Sinking Fund shall be deposited in and
maintained as a separate account or accounts from ail other accounts of the City. The Operation
and Maintenance Fund and the Improvement Fund may be maintained in a single account, or
accounts, but such account, or accounts, shail likewise be maintained separate and apart from all
other accounts of the City and apart from the Sinking Fund account or accounts. All moneys
deposited in the accounts shall be deposited, held and secured as public funds in accordance with
the public depository laws of the State of Indiana; provided that moneys therein may be invested
in obligations in accordance with the applicable laws, including particularly Indiana Code, Title
5, Article 13, as amended or supplemented, and in the event of such investment the income
therefrom shall become a part of the funds invested and shall be used only as provided in this
ordinance. Nothing in this section or elsewhere in this ordinance shall be construed to require
that separate bank accounts be established and maintained for the Funds and Accounts continued
by this ordinance.
Sec. 17. Defeasance of the Bonds. If, when the Bonds or a portion thereof shall
have become due and payable in accordance with their terms or shail have been duly called for
redemption or irrevocable instructions to call the Bonds or a portion thereof for redemption shall
have been given, and the whole amount of the principai and the interest and the premium, if any,
so due and payable upon all of the Bonds or a portion thereof then outstanding shall be paid; or
(i) cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise
collateralized with obligations described in (ii) below), or (ii) direct obligations of (including
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obligations issued or held in book entry form on the books of) the Department of the Treasury of
the United States of America, the principal of and the interest on which when due will provide
sufficient moneys for such purpose, shall be held in trust for such purpose, and provision shall
also be made for paying all fees and expenses for the redemption, then and in that case the Bonds
or any designated portion thereof issued hereunder shall no longer be deemed outstanding or
entitled to the pledge of the Net Revenues of the City's sewage works.
Sec. 18. Rate Covenant. The City covenants and agrees that, by ordinance of the
Common Council, it will establish just and equitable rates or charges for the use of and the
service rendered by the works, to be paid by the owner of each and every lot, parcel of real estate
or building that is connected with and uses said sewage works by or through any part of the
sewage system of the City, or that in any way uses or is served by such works; that such rates or
charges shall be sufficient in each year to provide for the payment of the proper and reasonable
expenses of operation, repair and maintenance of the works, and for the payment of the sums
required to be paid into the Sinking Fund by the Act and this ordinance. Such rates or charges
shall, if necessary, be changed and readjusted from time to time so that the revenues therefrom
shall always be sufficient to meet the expenses of operation, repair and maintenance of the
sewage works, and the requirements of the Sinking Fund. The rates or charges so established
shall apply to any and all use of such works by and service rendered to the City and all
departments thereof, and shall be paid by the City or the various departments thereof as the
charges accrue.
Sec. 19. Additional Bond Provisions. The City reserves the right to authorize and
issue additional BANs at any time ranking on a parity with the BANs. The City reserves the
right to authorize and issue additional bonds payable out of the Net Revenues of its sewage
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works ranking on a parity with the Bonds for the purpose of financing the cost of future
additions, extensions and improvements at its sewage works, or to refund obligations, subject to
the following conditions:
(a) The interest on and principal of all bonds payable from the Net Revenues of the
sewage works shall have been paid in accordance with their terms.
(b) The net operating revenues of the sewage works in the fiscal year immediately
preceding the issuance of any such bonds ranking on a parity with the Bonds shall be not less
than one hundred twenty-five pement (125%) of the maximum annual interest and principal
requirements of the then outstanding bonds and the additional parity bonds proposed to be
issued; or, prior to the issuance of the parity bonds, the sewage rates and charges shall be
increased sufficiently so that increased rates and charges applied to the previous year's
operations would have produced net operating revenues for said year equal to not less than one
hundred twenty-five percent (125%) of the maximum annual interest and principal requirements
of all bonds payable from the revenues of the sewage works, including the additional parity
bonds proposed to be issued.
For purposes of this subsection, the records of the sewage works shall be analyzed and all
showings prepared and certified by a certified public accountant employed by the City for that
purpose, who shall certify that he has no pecuniary interest in said additions, extensions, and
improvements or the financing thereof in any way whatsoever other than to analyze the records
of said sewage works and to prepare said showings.
(c) The principal of, or mandatory sinking fund redemption dates for, such parity
bonds shall be payable annually on January 1 and the interest shall be payable semiannually on
January 1 and July 1 in the years in which principal and interest are payable.
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Parity bonds may also be issued to refund less than all of the then outstanding Bonds
issued pursuant to this ordinance or ranking on a parity therewith but any such refunding bonds
shall be subject tO the conditions in this section unless the bonds being refunded mature within
three (3) months of the date of such refunding and no other funds are available to pay such
maturing bonds.
(d) A debt service reserve for the additional parity bonds commensurate with and
proportional to the reserve established for the Bonds shall be created and maintained. Such
reserve may be funded from bond proceeds or by Net Revenues over time.
Sec. 20. Further Covenants of the City; Maintenance~ Insurance, Pledge Not To
Encumber, Subordinate Indebtedness, and Contract with Bondholders. For the purpose of
further safeguarding the interests of the owners of the BANS and the Bonds, it is hereby
specifically provided as follows:
(a) All contracts let by the City in connection with the construction of the Project
shall be let after due advertisement as required by the laws of the State of Indiana, and ail
contractors shall be required to furnish surety bonds in an amount equal to 100% of the amount
of such contracts, to insure the completion of said contracts in accordance with their terms, and
such contractors shall also be required to carry such employers' liability and public liability
insurance as are required under the laws of the State of Indiana in the case of public contracts,
and shall be governed in all respects by the laws of the State of Indiana relating to public
contracts.
(b) The Project shall be constructed under plans and specifications approved by a
competent engineer designated by the City. All estimates for work done or material furnished
shall first be checked by the engineer and approved by the City.
33
(c) The City shall at ail times maintain the sewage works system in good condition,
and operate the same in an efficient manner and at a reasonable cost.
(d) So long as any of the Bonds and BANs are outstanding, the City shall maintain
insurance on the insurable parts of said work, of a kind and in an amount, including fidelity
bonds, such as would normally be carried by private corporations engaged in a similar type of
business. All insurance shall be placed with responsible insurance companies quaiified to do
business under the laws of the State of Indiana.
As an aiternative to maintaining such insurance, the City may maintain a self-insurance
program with catastrophic or similar coverage so long as such program meets the requirements
of any applicable laws or regulations and is maintained in a manner consistent with programs
maintained by similarly situated municipaiities.
Insurance proceeds or self-insurance proceeds shail be used in replacing or repairing the
property destroyed or damaged, or if not used for that purpose, shail be treated and applied as
Net Revenues of the works.
(e) So long as any of the BANs or Bonds are outstanding, the City shail not
mortgage, pledge or otherwise encumber the property and plant of its sewage works system, or
any part thereof, nor shail it sell, lease or otherwise dispose of any part of the same, excepting
only such machinery, equipment or other property as may be replaced, or shall no longer be
necessary for use in connection with said utility.
(f) Except as otherwise specificaily provided in Section 19 of this ordinance, so long
as any of the Bonds are outstanding, no additional bonds or other obligations pledging any
portion of the revenues of the system shail be authorized, issued or executed by the City, except
such as shail be made junior and subordinate in all respects to the Bonds, unless all of the Bonds
34
are redeemed or retired coincidentally with the delivery of such additional bonds or other
obligations.
(g) The City shall take all actions or proceedings necessary and proper, to the extent
permitted by law, to require connection of all property where liquid and solid waste, sewage,
night soil or industrial waste is produced with available sanitary sewers. The City shall, insofar
as possible, and to the extent permitted by law, cause all such sanitary sewers to be connected
with said sewage works.
(h) The provisions of this ordinance shall constitute a contract by and between the
City and the owners of the Bonds and BANs herein authorized, all the terms of which shall be
enforceable by any bondholder by any and all appropriate proceedings in law or in equity. After
the issuance of the Bonds and BANs, this ordinance shall not be repealed, amended or modified
in any respect which will adversely affect the rights or interests of the owners of the Bonds and
BANs, nor shall the Common Council or any other body of the City adopt any law, ordinance or
resolution in any way adversely affecting the rights of such owners so long as any of the Bonds,
BANs, or the interest thereon, remain outstanding or unpaid. Except in the case of changes
described in Section 21(a)-(f), this ordinance may be amended, however, without the consent of
the owners of the Bonds or BANs, if the Common Council determines, in its sole discretion, that
such amendment would not adversely affect the owners of the Bonds or BANs.
(i) The provisions of this ordinance shall be construed to create a trust in the
proceeds of the sale of the Bonds and BANs herein authorized for the uses and purposes herein
set forth, and the owners of the Bonds and BANs shall retain a lien on such proceeds until the
same are applied in accordance with the provisions of this ordinance and said governing Act.
The provisions of this ordinance shall also be construed to create a trust in the Net Revenues
35
herein directed to be set apart and paid into the Sinking Fund for the uses and purposes of that
Fund as in this ordinance set forth. The owners of the Bonds shall have all the rights, remedies
and privileges set forth in the provisions of the governing Act, including the right to have a
receiver appointed to administer the sewage works in the event the City shall fail or refuse to fix
and collect sufficient rates and charges for those purposes, or shall fail or refuse to operate and
maintain said system and to apply properly the revenues derived from the operation thereof, or if
there be a default in the payment of the interest on or principal of the Bonds.
(j) None of the provisions of this ordinance shall be construed as requiring the
expenditure of any funds of the City derived from any sources other than the proceeds of the
Bonds and the operation of the sewage works system.
Sec. 21. Amendments with Consent of Bondholders. Subject to the terms and
provisions contained in this section, and not otherwise, the owners of not less than sixty-six and
two-thirds percent (66 2/3%) in aggregate principal amount of the Bonds issued pursuant to this
ordinance and then outstanding shall have the right from time to time, to consent to and approve
the adoption by the Common Council of the City of such ordinance or ordinances supplemental
hereto or amendatory hereof, as shall be deemed necessary or desirable by the City for the
purpose of modifying, altering, amending, adding to or rescinding in any particular any of the
terms or provisions contained in this ordinance, or in any supplemental ordinance; provided,
however, that nothing herein contained shall permit or be construed as permitting:
(a) An extension of the maturity of the principal of or interest on, or any mandatory
sinking fund redemption date for, any Bond issued pursuant to this ordinance; or
(b) A reduction in the principal amount of any Bond or the redemption premium or
the rate of interest thereon; or
36
(c) The creation of a lien upon or a pledge of the revenues or Net Revenues of the
sewage works ranking prior to the pledge thereof created by this ordinance; or
(d) A preference or priority of any Bond or Bonds issued pursuant to this ordinance
over any other Bond or Bonds issued pursuant to the provisions of this ordinance; or
(e) A reduction in the aggregate principal amount of the Bonds required for consent
to such supplemental ordinance; or
(f) A reduction in the Reserve Requirement.
If the owners of not less than sixty-six and two-thirds percent (66 2/3%) in aggregate
principal amount of the Bonds outstanding at the time of adoption of such supplemental
ordinance shall have consented to and approved the adoption thereof by written instrument to be
maintained on file in the office of the Clerk-Treasurer of the City, no owner of any Bond issued
pursuant to this ordinance shall have any right to object to the adoption of such supplemental
ordinance or to object to any of the terms and provisions contained therein or the operation
thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or
restrain the Common Council of the City from adopting the same, or from taking any action
pursuant to the provisions thereof. Upon the adoption of any supplemental ordinance pursuant to
the provisions of this section, this ordinance shall be, and shall be deemed, modified and
amended in accordance therewith, and the respective rights, duties and obligations under this
ordinance of the City and all owners of Bonds then outstanding, shall thereafter be determined,
exercised and enforced in accordance with this ordinance, subject in all respects to such
modifications and amendments. Notwithstanding anything contained in the foregoing provisions
of this ordinance, the rights and obligations of the City and of the owners of the Bonds
authorized by this ordinance, and the terms and provisions of the Bonds and this ordinance, or
37
any supplemental or amendatory ordinance, may be modified or altered in any respecf with the
consent of the City and the consent of the owners of all the Bonds then outstanding.
Sec. 22. Investment of Funds. (a) The Clerk-Treasurer is hereby authorized to
invest moneys pursuant to the provisions of this ordinance and IC 5-I-14,3 (subject to applicable
requirements of federal law to insure such yield is then current market rate) to the extent
necessary or advisable to preserve the exclusion from gross income of interest on the Bonds and
BANs under federal law.
(b) The Clerk-Treasurer shall keep full and accurate records of investmerlt earnings
and income from moneys held in the funds and accounts created or referenced herein, in order to
comply with the provisions of the ordinance, the Clerk-Treasurer is hereby anth~rized and
directed to employ consultants or attorneys from time to time to advise the City as to
requirements of federal law to preserve the tax exclusion. The Clerk-Treasurer may pay any fees
as operation expenses of the sewage works.
Sec. 23. Tax Covenants. In order to preserve the exclusion of interest og the Bonds
and BANs from gross income for federal tax purposes under Section 103 of the Internal Revenue
Code of 1986 as existing on the date of issuance of the Bonds or BANs, as the case maY be (the
"Code"), and as an inducement to purchasers of the Bonds and BANs, the City represents,
covenants and agrees that:
(a) The sewage works will be available for use by members of the general public.
Use by a member of the general public means use by natural persons not engaged !n a trade or
business. No person or entity other than the City or another state or local governmental unit will
use more than 10% of the proceeds of the Bonds or BANs or property financed by the Bond or
BAN proceeds other than as a member of the general public. No person or entity other than the
38
City or another state or local governmental unit will own property financed by Bond or BAN
proceeds or will have any actual or beneficial use of such property pursuant to a lease, a
management or incentive payment contract, arrangements such as take-or-pay or output contracts
or any other type of arrangement that conveys other special legal entitlements and differentiates
that person's or entity's use of such property from use by the general public, unless such uses in
the aggregate relate to no more than 10% of the proceeds of the Bonds or BANs, as the case may
be. If the City enters into a management contract for the sewage works, the terms of the contract
will comply with IRS Revenue Procedure 97-13, as it may be amended, supplemented or
superseded for time to time, so that the contract will not give rise to private business use under
the Code and the Regulations, unless such use in aggregate relates to no more than 10% of the
proceeds of the Bonds or BANs, as the case may be.
(b) No more than 10% of the principal of or interest on the Bonds or BANs is (under
the terms of the Bonds or BANs, this ordinance or any underlying arrangement), directly or
indirectly, secured by an interest in property used or to be used for any private business use or
payments in respect of any private business use or payments in respect of such property or to be
derived from payments (whether or not to the City) in respect of such property or borrowed
money used or to be used for a private business use.
(c) No more than 5% of the Bond or BAN proceeds will be loaned to any person or
entity other than another state or local governmental unit. No more than 5% of the Bond or BAN
proceeds will be transferred, directly or indirectly, or deemed transferred to a nongovernmental
person in any manner that would in substance constitute a loan of the Bond or BAN proceeds.
(d) The City reasonably expects, as of the date hereof, that the Bonds and BANs will
not meet either the private business use test described in paragraph (a) and (b) above or the
39
private loan test described in paragraph (c) above during the entire term of the Bonds or BANs,
as the case may be.
(e) No more than 5% of the proceeds of the Bonds or BANs will be attributable to
private business use as described in (a) and private security or payments described in (b)
attributable to unrelated or disproportionate private business use. For this purpose, the private
business use test is applied by taking into account only use that is not related to any government
use of proceeds of the issue (Unrelated Use) and use that is related but disproportionate to any
governmental use of those proceeds (Disproportionate Use).
(f) The City will not take any action nor fail to take any action with respect to the
Bonds or BANs that would result in the loss of the exclusion from gross income for federal tax
purposes on the Bonds or BANs pursuant to Section 103 of the Code, nor will the City act in any
other manner which would adversely affect such exclusion. The City covenants and agrees not
to enter into any contracts or arrangements which would cause the Bonds or BANs to be treated
as private activity bonds under Section 141 of the Code.
(g) It shall be not an event of default under this ordinance if the interest on any Bond
or BAN is not excludable from gross income for federal tax purposes or otherwise pursuant to
any provision of the Code which is not currently in effect and in existence on the date of issuance
of the Bonds or BANs, as the case may be.
(h) These covenants are based solely on current law in effect and in existence on the
date of delivery of such Bonds or BANs, as the case may be.
(i)
The City represents that:
(1) The Bonds and the BANs are not private activity bonds as defined in
Section 141 of the Code;
40
(2) The Mayor and Clerk-Treasurer shall determine, prior to the sale of any
Bonds or BANs, whether it is possible to designate the Bonds or the BANs as qualified
~x-exempt obligations for purposes of Section 265(b) of the Code;
(3) The Mayor and Clerk-Treasurer shall determine the amount of qualified
tax-exempt obligations (including qualified 501(c)(3) obligations and tax-exempt leases
but excluding other private activity bonds) which will be issued by the City, and all
entities subordinate to the City during the calendar year in which the Bonds and BANs
~are issued to measure if such amount will not exceed $10,000,000.
Therefore, upon the proper designation by the Mayor and the Clerk-Treasurer, the Bonds
and the BANs may qualify for the exception in the Code from the disallowance of 100% of the
deduction by financial institutions of interest expense allocable to newly acquired tax-exempt
obligations.
(j) The City represents that it will rebate any arbitrage profits to the United States of
America to the extent required by the Code.
Sec. 24. Issuance of BANs. (a) The City, having satisfied all the statutory
requirements for the issuance of its Bonds, may elect to issue its BAN or BANs to a financial
institution, the Indiana Bond Bank or any other purchaser pursuant to a Bond Anticipation Note
Purchase Agreement (the "purchase Agreement") to be entered into between the City and the
purchaser of the BAN or BANs. The Common Council hereby authorizes the issuance and
execution of the BAN or BANs in lieu of initially issuing the Bonds to provide interim financing
for the Project until permanent financing becomes available. It shall not be necessary for the
City to repeat the procedures for the issuance of its Bonds, as the procedures followed before the
41
issuance of the BAN or BANs are for all purposes sufficient to authorize the issuance of the
Bonds and the use of the proceeds to repay the BAN or BANs.
(b) The Mayor and the Clerk-Treasurer are hereby authorized and directed to execute a
Purchase Agreement in such form or substance as they shall approve acting upon the advice of
counsel. The Mayor and the Clerk-Treasurer may also take such other actions or deliver such
other certificates as are necessary or desirable in connection with the issuance of the BANs or the
Bonds and the other documents needed for the financing as they deem necessary or desirable in
connection therewith.
Sec. 25. Non_~compliance with Tax Covenants. Notwithstanding anY other
provisions of this ordinance, the covenants and authorizations contained in this ordinance (the
"Tax Sections") which are designed to preserve the exclusion of interest on the Bonds and BANs
from gross income under federal law (the "Tax Exemption") need not be complied with if the
City receives an opinion of nationally recognized bond counsel that any Tax Section is
unnecessary to preserve the Tax Exemption.
Sec. 26. ~. The sewage rates and charges are set forth in
Ordinance No. 99-OR-69 adopted on December 13, 1999. The storm water rates and charges are
set forth in Ordinance No. 2000-OR-40 adopted on April 16, 2001. Said ordinances are hereby
incorporated herein by reference.
Sec. 27. Conflicting Ordinances. All ordinances and parts of ordinances in conflict
herewith except the 1995 Ordinance and the 1998 Ordinance, are hereby repealed, provided,
however, that the adoption of this ordinance shall not adversely affect the owners of the
Outstanding Bonds.
42
Sec. 28. Headings. The headings or titles of the several sections shall be solely for
convenience of reference and shall not affect the meaning, construction or effect of this
ordinance.
Sec. 29.
Effective Date. This ordinance shall be in full force and effect from and
after its passage and execution by the Mayor.
43
of.
Passed and adopted by the Common Council of the City of Jeffersonville this
,2003.
COMMON COUNCIL
day
Attest:
Clerk-Treasurer
Presiding Officer
Presemed by me to the Mayor of the City of Je£fersonville this
2003 at _.m.
day of.
Clerk-Treasurer
Signed and approved by me, the Mayor of the City of Jeffersonville, this
., 2003 at .m.
. day of
Mayor
44
(1)
(2)
(3)
EXHIBIT A
Description of Proiect
Drainage improvements in Bonenberger Subdivision which include the construction of
approximately 10,000 feet of 12 to 36 inch storm sewers, 75 catch basins, 20,000 feet of
curb and gutter, street resurfacing, and other improvements.
Stormwater and drainage improvements in the Meadows Subdivision, which include the
construction of a large detention basin, 1,500 feet of channel improvements, the
replacement of a large culvert on Bishop Lane, and miscellaneous rear yard ditches and
swales.
If funds permit, the existing ditch behind the Winn-Dixie Supermarket on Tenth Street
and Kehoe Lane will be enclosed with approximately 900 feet of large storm sewer pipe,
and the remaining 1,400 feet of ditch will be cleared and graded to provide positive
drainage.
INDY647185v3
45
CONTINUING DISCLOSURE
UNDERTAKING AGREEMENT
This CONTINUING DISCLOSURE UNDERTAKiNG AGREEMENT (the
"Agreement") is made as of , 200__ between the City of Jeffersonville,
Indiana (the "Obligor") and ., , Indiana (the
"Counterparty"), for the purpose of permitting ., as underwriter (the
"Underv~iter") of the Bonds to purchase the Bonds in compliance with the Securities and
Exchange Commission ("SEC") Rule 15c2-12 (the "SEC Rule") as published in the Federal
Register on November 17, 1994.
Section 1. Definitions. The words and terms defined in this Agreement shall have
the meanings herein specified unless the context or use clearly indicates another or different
meaning or intent. Those words and terms not expressly defined herein and used herein with
initial capitalization where rules of grammar do not otherwise require capitalization, shall have
the meanings assigned to them in the SEC Rule.
(1)
"Bondholder" or "holder" or any similar term, when used with
reference to a Bond or Bonds, means any person who shall be the
registered owner of any outstanding Bond, including the holders of
beneficial interests in the Bonds.
(2)
"Final Official Statement" means the Official Statement, dated as
of ,200__, relating to the Bonds, including
any document or set of documents included by specific reference
to such document or documents previously provided to each
NRMSIR and to the SID, or filed with the Municipal Securities
Rulemaking Board ("MSRB").
(3)
"NRMSIR" means, at any point in time, a nationally recognized
municipal securities information repository which is then
recognized as such by the SEC, initially including but not limited
to each of those entities listed on the attached Exhibit A.
(4)
"Obligated Person" means any person, including an issuer of
municipal securities, who is either generally or through an
enterprise, fund, or account of such person committed by contract
or other arrangement to support payment of the obligations on the
Bonds (other than providers of municipal bond insurance, letters of
credit, or other liquidity facilities), for which Annual Information
(as defined in Section 5 hereof) is presented in the Official
Statement. All Obligated Persons with respect to the Bonds are
identified in Section 4 below.
(5) "SID" means the Indiana state information depository, if any, in
existence from time to time.
Section 2. Bonds. This Agreement applies to the Sewage Works Revenue Bonds,
Series __ in the principal amount of $ (the "Bonds").
Section 3. Term. The term of this Agreement is from the date of delivery of the
Bonds by the Obligor to the earlier of (i) the date of the last payment of principal or redemption
price, if any, of, and interest to accrue on, all the Bonds, (ii) the date the Bonds are defeased
under Section 17 of the Ordinance adopted by the Obligor on , 2003 (the
"Ordinance"), or (iii) the date of rescission as described in Section 14.
Section 4. Obligated Persons. The Obligor hereby represents and warrants as of the
date hereof that it is the only Obligated Person with respect to the Bonds. If the Obligor, at its
sole discretion, determines that it is no longer an Obligated Person, this Agreement shall no
longer apply to the Obligor.
Section 5. Provision of Annual Information. (a) The Obligor hereby undertakes to
provide the following financial information:
To each NRMSIR and to the SID, when and if available, the
audited financial statements of the Obligor as prepared and
examined by the State Board of Accounts for each twelve-month
period ending December 31, beginning with the twelve month
period ending December 31,200__, together with the opinion of
such accountants and all notes thereto, within sixty (60) days of
receipt from the State Board of Acconnts; and
(2)
To each NRMSIR and to the SID, within 180 days of each
December 31, beginning with the calendar year ending
December 31, 200__, unaudited annual financial information for
the Obligor for such calendar year including (i) unaudited financial
statements of the Obligor if audited financial statements are not
available, and (ii) operating data of the type included under the
following headings in Appendix A to the Final Official Statement
(collectively, the "Annual Information"):
(b) If any Annual Information or audited financial statements relating to the Obligor
referred to in paragraph (a) of this Section 5 no longer can be generated because the operations to
which they related have been materially changed or discontinued, a statement to that effect,
provided by the Obligor to each NRMSIR and to the SID, along with any other Annual
Information or audited financial statements required to be provided under this Agreement, shall
satisfy the undertaking to provide such Annual Information or audited financial statements. To
the extent available, the Obligor slmll cause to be filed along with the other Annual Information
or audited financial statements operating data similar to that which can no longer be provided.
(c) The disclosure may be accompanied by a certificate of an authorized
representative of the Obligor in the form of Exhibit B attached hereto.
(d) The Obligor agrees to make a good faith effort to obtain Annual Information.
However, failure to provide audited financial statements or Annual Information because it is not
available to the Obligor shall not be deemed to be a breach of this Agreement. The Obligor
further agrees to supplement the Annual Information filing when such data is available.
(e) Annual Information or audited financial statements required to be provided
pursuant to this Section 5 may be provided by a specific reference to such Annual Information or
audited financial statements already prepared and previously provided to each NRMSIR and the
SID, or filed with the SEC; however, if such document is a final official statement, it must also
be available from the MSRB.
Section 6. Accounting Principles. The financial information will be prepared on a
cash basis as prescribed by the State Board of Accounts, as in effect from time to time, as
described in the auditors' report and notes accompanying the audited financial statements of the
Obligor or those principles mandated by state law from time to time. The audited financial
statements of the Obligor, as described in Section 5(a)(1) hereof, will be prepared in accordance
with generally accepted accounting standards and Government Auditing Standards issued by the
Comptroller General of the United States.
Section 7. Material Events. The Obligor undertakes to disclose in a timely manner
the occurrence of only the following events, if material (which determination of materiality shall
be made by the Obligor in accordance with the standards established by federal securities laws),
to each NRMSIR or to the MSRB, and to the SID:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
(3) unscheduled draws on debt service reserves reflecting financial
difficulties;
(4) unscheduled draws on credit enhancements reflecting financial
difficulties;
(5) substitution of credit or liquidity providers, or their failure to
perform;
(6) adverse tax opinions or events affecting the tax-exempt status of
the Bonds;
(7) modifications to the rights of Bondholders;
(8) Bond calls (other than scheduled mandatory sinking fund
redemptions for which notice is given in accordance with the
Ordinance);
3
(9) defeasances;
(10) release, substitution or sale of property securing repayment of the
Bonds; and
(11) rating changes.
The Obligor may from time to time choose to provide notice of the occurrence of any
other event, in addition to those listed above, if, in the judgment of the Obligor, such other event
is material with respect to the Bonds and should be disclosed, but the Obligor does not commit to
provide any such notice of the occurrence of any material event except those events set forth
above. The disclosure may be accompanied by a certificate of an authorized representative of the
Obligor in the form of Exhibit C attached hereto.
Section 8. Notice to Counterparty. The Obligor hereby agrees to provide to the
Counterparty a copy of any Annual Information, audited financial statements, material event
notice, or notice of failure to disclose Annual Information which it files or causes to be filed
pursuant to Sections 5, 7 and 10 hereof, respectively, concurrently with or prior to such filing.
Section 9. Use of Agent. The Obligor may, at its sole discretion, utilize an agent (the
"Dissemination Agent") in connection with the dissemination of any information required to be
provided by the Obligor pursuant to the terms of the SEC Rule and this Agreement. If a
Dissemination Agent is selected for these purposes, the Obligor shall provide prior written notice
thereof (as well as notice of replacement or dismissal of such agent) to the Connterparty and to
each NRMSIR, the SID, and the MSRB.
Further, the Obligor may, at its sole discretion, retain counsel or others with expertise in
securities matters for the purpose of assisting the Obligor in making judgments with respect to
the scope of its obligations hereunder and compliance therewith, all in order to further the
purposes of this Agreement as set forth in the preamble and Section 11 hereof.
Section 10. Failure to Disclose. If, for any reason, the Obligor fails to provide the
audited financial statements or Annual Information as required by this Agreement, the Obligor
shall provide notice of such failure in a timely manner to each NRMSIR or to the MSRB, and to
the SID.
Section 11. Remedies.
(a) The purpose of this Agreement is to enable the Underwriter to purchase the Bonds
by providing for an undertaking by the Obligated Persons in satisfaction of the SEC Rule. This
Agreement is solely for the benefit of the Bondholders and creates no new contractual or other
rights for, nor can it be relied upon by, the SEC, underwriters, brokers, dealers, municipal
securities dealers, potential customers, other Obligated Persons or any other third party. The sole
remedy against the Obligor for any failure to carry out any provision of this Agreement shall be
for specific performance of the Obligor's disclosure obligations hereunder and not for money
damages of any kind or in any amount or for any other remedy. The Obligor's failure to honor
4
its covenants hereunder shall not constitute a breach or default of the Bonds, the Ordinance or
any other agreement to which the Obligor is a party.
(b) Subject to paragraph (e) of this Section 11, in the event the Obligor fails to
provide any information required of it by the terms of this Agreement, any Bondhblder may
pursue the remedy set forth in the preceding paragraph in any court of competent jurisdiction in
the county in which the Obligor is located. An affidavit to the effect that such Person is a
Bondholder supported by reasonable documentation of such claim shall be sufficient t? evidence
standing to pursue this remedy.
(c) Subject to paragraph (e) of this Section 11, any challenge to the adequacy of the
information provided by the Obligor by the terms of this Agreement may be pursued only by
holders of not less than 25% in principal amount of Bonds then outstanding in any court of
competent jurisdiction in the county in which the Obligor is located. An affidavit to the effect
that such persons are Bondholders supported by reasonable documentation of such claim shall be
sufficient to evidence standing to pursue the remedy set forth in the preceding paragraph.
demandrthb those
(d) The Counterparty, upon satisfactory indemnification and y
persons it reasonably believes to be Bondholders, may also pursue the remedy set fo above in
any court of competent jurisdiction in the county in which the Obligor is located. The
Counterparty shall have no obligation to pursue any remedial action in the absence of a valid
demand from Bondholders and satisfactory indemnification. .
(e) Prior to pursuing any remedy under this Agreement, a Bondholder shall give
notice to the Obligor, via registered or certified mail, of such breach and its intent to pursue such
remedy. Fifteen (15) days after the mailing of such notice, and not before, a Bondholder may
pursue such remedy under this Agreement. The Obligor's failure to honor itsl covenants
hereunder shall not constitute a breach or default of the Bonds, the Ordinance or any other
agreement to which the Obligor is a party. I
Section 12. Counterpart¥'s Obligations. The Counterparty hereto shail have no
obligation to take any action whatsoever with respect to information provided by the Obligor
under this Agreement (or by any Obligated Persons covered hereby), except (i) as set forth in this
Section 12 and (ii) any obligations arising from the Counterparty serving as a Di§semination
Agent, and no implied covenants or obligations shall be read into this Agreement lagainst the
Counterparty. Further, except as set forth in this Section 12, the Counterparty heret6 shall have
no responsibility to ascertain the truth, completeness, accuracy, or timeliness of the information
provided as required hereunder by the Obligor or any Obligated Person, nor as to its sufficiency
for purposes of compliance with the SEC Rule or the requirements of this Agreement.
The Counterparty may, at its sole discretion, retain counsel or others with ,expertise in
continuing disclosure matters for the purpose of assisting the Counterparty in making judgments
with respect to the scope of its obligations hereunder and compliance therewith.
If the Counterparty has not received the Annual Information by the date which is ten (10)
days before the date set forth in Section 5(a)(2) of this Agreement, the Counterparty shall notify
the Obligor, via registered or certified mall, that it has not received such Annual Information.
However, a failure by the Counterparty to provide (or any delay in providing) any notice
required by this paragraph shall not: (i) operate to relieve the Obligor of its obligation to provide
the Annual Information in the manner and within the time specified in this Agreement; or (ii)
constitute a defense for the Obligor, or the basis for any claim, counterclaim, cross-claim or
third-party claim by the Obligor, in any action brought pursuant to Section 11 of this Agreement
or otherwise. Nothing contained in this paragraph shall operate to grant any additional rights or
remedies to any holder of Bonds.
The Counterparty hereto shall be obligated to, and hereby agrees that it will, on the fifth
business day after the date required by Section 5(a)(2) of this Agreement, forward to those
persons or entities scheduled to receive Annual Information a notice substantially in the form of
Exhibit D attached hereto in the event that the Counterparty has not received a copy of such
~M'mual Information; provided, however, that the Connterparty shall not give such notices as
described in this paragraph and the immediately preceding paragraph if the Obligor has provided
the Counterparty with notice that the Obligor has issued notice pursuant to Section 10 hereof.
Section 13. Resignation and Removal of Counterpart~. The Counterparty may resign
in its capacity under this Agreement at any time by giving written notice thereof to the Obligor.
So long as the Obligor has not failed to honor its obligations as set forth in Sections 5, 7 and 10
hereof, the Obligor may remove the Counterparty in its capacity under this Agreement at any
time by giving written notice thereof to the Counterparty. Upon such resignation or removal, the
Obligor shall promptly appoint a successor Counterparty.
Section 14. Modification of Ag~reement. The Obligor and the Counterparty may, from
time to time, amend or modify this Agreement without the consent of or notice to the
Bondholders if either (a)(i) such amendment or modification is made in connection with a
change in circumstances that arises from a change in legal requirements, change in la~ or change
in the identity, nature or status of the Obligor, or type of business conducted, (ii) this Agreement,
as so amended or modified, would have complied with the requirements of the SEC Rule on the
date hereof, after taking into account any amendments or interpretations of the SEC Rule, as well
as any change in circumstances, and (iii) such amendment or modification does not materially
impair the interests of the Bondholders, as determined either by (A) the Counterparty or
nationally recognized bond counsel or (B) an approving vote of the holders of the requisite
percentage of outstanding Bonds as required under Section 21 of the Ordinance at the time of
such amendment or modification; or (b) such amendment or modification (including an
amendment or modification which rescinds this Agreement) is permitted by the SEC Rule, as
then in effect.
Section 15. Interpretation Under Indiana Law. It is the intention of the parties hereto
that this Agreement and the rights and obligations of the parties hereunder shall be governed by
and construed and enforced in accordance with, the law of the State of Indiana.
6
Section 16. Severability_ Clause. In case any provision in this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 17. Successors and Assigns. All covenants and agreements in this Agreement
made by the Obligor and the Counterparty shall bind their successors, whether so expressed or
not.
Section 18. Notices. All notices required to be given under this Agreement shall be
made at the following addresses:
If to the Obligor:
City of Jeffersonville
c/o Clerk-Treasurer
City Hall
501 East Court Avenue
Jeffersonville, Indiana 47130-4029
If to the Counterparty:
1N WITNESS WHEREOF, the Obligor and the Counterparty have caused this Agreement
to be executed as 6fthe a2 ~- .dayof OC~'Ol]~ ,200~_.
ATTEST:
CITY OF JEFFERSONVILLE, INDIANA, as
Obligor
Clerk-Treast~'el"
8
as Counterparty
9
EXHIBIT A
NATIONALLY RECOGNIZED MUNICIPAL
SECURITIES INFORMATION REPOSITORIES
Bloomberg Municipal Repository
100 Business Park Drive
Skillman, New Jersey 08558
Phone: (609) 279-3225
Fax: (609) 279-5962
E-Mail: Munis~Bloomberg.com
FT Interactive Data
Atto: NRMSIR
100 Williams Street
New York, New York 10038
Phone: (212) 771-6999
Fax: (212) 771-7390 (Secondary Market Information)
(212) 771-7391 (Prima~ Market Information)
Email: NRMSIR~FTID.com
Standard & Poor's J. J. Kenny Repository
55 Water Street, 45th Floor
New York, New York 10041
Phone: (212) 438-4595
Fax: (212) 438-3975
Email: nrmsir_rep°sit°ry~sandP'C°m
DPC Data, Inc.
One Executive Drive
Fort Lee, NJ 07024
Phone: (201) 346-0701
Fax: (201) 947-0107
E-Mail: nrmsir~dpcdata.com
EXHIBIT B
CERTIFICATE RE: ANNUAL FiNANCIAL iNFORMATION DISCLOSURE
The undersigned, on behalf of the City of Jeffersonville, Indiana, as the Obligor under the
200 (the
Continuing Disclosure Undertaking Agreement, dated ,asCounterparty,~tereby~ertifies
"Agreement"), between the Obligor and
that the information enclosed herewith constitutes the Annual Information (as defined in the
Agreement) which is required to be provided pursuant to Section 5(a)(2) of the Agreement.
Dated:
CITY OF JEFFERSONVILLE, iNDIANA
By:
Printed:
Title:
EXHIBIT C
CERTIFICATE RE: MATERIAL EVENT DISCLOSURE
The undersigned, on behalf of the City of Jeffersonville, Indiana, as the Obligor under the
Continuing Disclosure Undertaking Agreement, dated , 200__ (the
as Co~unterparty, hereby
"Agreement"), between the Obligor and -, -
certifies that the information enclosed herewith constitutes notice of the occurrence of a material
event which is required to be provided pursuant to Section 7 of the Agreement.
Dated:
CITY OF JEFFERSONVILLE, INDIANA
By:
Printed:
Title:
EXItlBIT D
NOTICE TO REPOSITORIES OF FAILURE TO FILE INFORMATION
Notice is hereby given that the City of Jeffersonville, Indiana (the "Obligor") has not
provided to ., as Counterparty to the Continuing Disclosure
Undertaking Agreement, dated ,200__ (the "Agreement"), between the
Obligor and the Counterparty, the Annual Information as required by Section 5(a)(2) of the
Agreement.
Dated:
By:
Printed:
Title:
INDY657372vl