Ordinance - 2013 - 701 - General Obiligation Bonds City Hall - 07/23/2013 ORDINANCE NO. 701
AN ORDINANCE OF THE CITY OF EAGLE, ADA COUNTY, IDAHO, AUTHORIZING
THE ISSUANCE AND SALE OF GENERAL OBLIGATION BONDS, SERIES 2013, IN A
PRINCIPAL AMOUNT NOT TO EXCEED $1,200,000; PROVIDING FOR THE DATE,
FORM, MATURITIES, DESIGNATION, REGISTRATION, AUTHENTICATION, AND
REDEMPTION OF THE BONDS; FIXING THE MAXIMUM RATE OF INTEREST ON THE
BONDS; DESCRIBING THE PROJECT TO BE FINANCED WITH THE PROCEEDS OF
THE BONDS; PROVIDING FOR THE DATE, TIME, AND PLACE OF SALE OF THE
BONDS; PROVIDING FOR THE PAYMENT OF PRINCIPAL OF AND INTEREST ON THE
BONDS BY THE ANNUAL LEVY OF TAXES; ESTABLISHING FUNDS; PROVIDING
COVENANTS WITH RESPECT TO THE TAX-EXEMPT STATUS OF INTEREST ON THE
BONDS; PROVIDING FOR RELATED MATTERS; AND PROVIDING AN EFFECTIVE
DATE
WHEREAS, the City of Eagle, Ada County, Idaho (the "City"), is a municipal
corporation duly organized and operating under and pursuant to the laws of the State of Idaho;
and
WHEREAS, the Mayor and Council (the "Council") of the City, by adoption of
Ordinance No. 692 on February 26, 2013, ordered a special election to be held within the City on
May 21, 2013, for the purpose of submitting to the electors of the City the question of whether or
not the City should be authorized to incur an indebtedness and issue its general obligation bonds
in the principal amount not to exceed $1,200,000 for the purpose of financing the cost of
acquisition of City Hall, together with related improvements and costs incident thereto, as set
forth in Ordinance No. 692; and
WHEREAS, at the special election, duly noticed, held, and conducted within the
City on May 21, 2013, the requisite two-thirds majority of the qualified electors of the City
voting at the special election approved the incurring of indebtedness in the amount and for the
purpose specified in Ordinance No. 692, and the issuance of general obligation bonds of the City
therefor; and
WHEREAS, the Council now desires to provide for the issuance and sale of the general
obligation bonds of the City in an aggregate principal amount not to exceed $1,200,000 for the
aforesaid purposes.
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND COUNCIL OF
CITY OF EAGLE, ADA COUNTY, IDAHO, as follows:
Section 1: DEFINITIONS
As used in this Ordinance, the following words shall have the following meanings:
Act means, collectively, Title 50, Chapter 10, Title 57, Chapters 2 and 9, and Title 67,
Chapter 87, Idaho Code.
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Annual Debt Service means the amount required in a given Fiscal Year of the City for the
payment of the principal of and interest on the Bond.
Average Annual Debt Service means the average annual amount required over the term
of the Bond from the time of calculation for the payment of the principal of and interest on the
Bond.
Authority means the Idaho Bond Bank Authority, an independent body corporate and
politic created and operating pursuant to Title 67, Chapter 87, Idaho Code.
Bond means the City of Eagle General Obligation Bond, Series 2013, herein authorized
to be issued, sold, and delivered in the form of a single, fully registered, amortized bond in a
principal amount not to exceed $1,200,000.
Bond Counsel means Moore Smith Buxton & Turcke, Chartered, Boise, Idaho, or another
attorney at law or a firm of attorneys of nationally recognized standing in matters pertaining to
the tax-exempt status of interest on obligations issued by states and their political subdivisions,
duly admitted to the practice of law before the highest court of any state of the United States.
Bond Fund means the Bond Fund established by Section 7 of this Ordinance.
Bond Register means the registration books on which are maintained the names and
addresses of the owners or nominees of the owners of the Bond.
Bond Registrar means the bond registrar, transfer agent, and authenticating and paying
agent appointed and designated in Section 5 of this Ordinance, and any successor Bond
Registrar.
Business Day means any day other than (i) a Saturday or Sunday, on which banks located
in the State of Idaho and in the state where the Bond Registrar's Principal Corporate Trust Office
is located, are open for the purpose of conducting commercial banking business.
City means the City of Eagle, Ada County, Idaho.
City Clerk means the Clerk of the City, or other officer of the City who is the custodian
of the seal of the City and of the records of the proceedings of the City, or his/her successor in
functions, if any.
Code means the Internal Revenue Code of 1986, as amended.
Cost of Issuance Fund means the fund created by Section 7 of this Bond Ordinance for
the payment of the costs of issuance of the Bond.
Cost of Project means all or any part designated by the Council of the cost of acquisition
and purchase of a building for city hall facilities.
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Council means the City Council of the City.
Fiscal Year means the annual fiscal year of the City, currently commencing on October 1
of each year and ending on September 30 of the following year.
Interest Payment Date(s) means the payment date(s) on the Bond set forth in the Loan
Agreement.
Loan Agreement means the loan agreement between the Authority and the City,
substantially in the form which is annexed hereto as Exhibit "C," and referred to and authorized
in Section 12 of the Ordinance.
Mayor means the Mayor of the City, or his/her successor in functions, if any.
Ordinance means this Ordinance No. 701, adopted on July 23, 2013.
Project means the acquisition and purchase of city hall facilities, and related
improvements and costs.
Project Fund means the fund by that name referred to in Section 7 of this Ordinance.
Record Date means in the case of each interest payment date, the Bond Registrar's close
of business on the fifteenth day next preceding such interest payment date falls.
Registered Owner means the purchaser of the Bond and any subsequent transferee or
purchaser of the Bond.
Regulations means the Treasury Regulations issued or proposed under Section 103,
Section 148, Section 149, or Section 150 of the Code (26 CFR Part 2) or other sections of the
Code relating to "arbitrage bonds" or rebate, including without limitation Sections 1.148-0
through 1.148-11 and 1.150-1 of the Treasury Regulations, to the extent applicable, and includes
amendments thereto or successor provisions.
Treasurer means the Treasurer of the City, or his/her successor in functions, if any.
Treasury Regulations means the Treasury Regulations issued or proposed under Section
103, Section 148, Section 149, or Section 150 of the Code (26 CFR Part 2) or other sections of
the Code relating to "arbitrage bonds" or rebate, including without limitation Sections 1.148-0
through 1.148-11 and 1.150-1 of the Treasury Regulations, to the extent applicable, and includes
amendments thereto or successor provisions.
Trustee means the Bank of New York Mellon Trust Company, N.A. or such other trustee
designated by the Authority pursuant to the Master Trust Agreement and latest Supplemental
Trust Agreement between the Authority and the Bank of New York Mellon Trust Company,
N.A., as such agreements may be amended from time to time (collectively the "Trust
Agreement").
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Written Certificate means an instrument in writing on behalf of the City executed by an
authorized officer of the City.
Section 2: THE BOND
A. The Series 2013 Bond, designated "City of Eagle General Obligation Bond,
Series 2013" (the "Series 2013 Bond"), in an aggregate principal amount not to exceed
$1,200,000, is hereby authorized to be issued, sold, and delivered pursuant to the Act. The
Series 2013 Bond shall consist of a single, transferrable, amortized revenue bond, substantially in
the form annexed hereto as Exhibit`B," shall be issued in fully registered form, shall be dated as
of its date of delivery, and shall bear interest on its unpaid principal balance at such rate or rates,
shall be payable at such times and in such amounts, and shall mature, as shall be set forth in the
Loan Agreement.
Section 3: EXECUTION
The Bond shall be executed by the manual signature of the Mayor, countersigned by the
manual signature of the Treasurer, and attested by the manual signature of the City Clerk, and the
seal of the City shall be impressed thereon.
Section 4: PLACE AND MANNER OF PAYMENT
Both principal of and interest on the Bond shall be payable in lawful money of the United
States of America to the Registered Owners thereof, at the address of such Registered Owners as
shown on the registration records of the City, or at such other address as shall be designated in
writing to the City by the Registered Owners.
Section 5: BOND REGISTRAR
The Treasurer is hereby appointed as bond registrar, transfer agent and paying agent, and
is herein referred to as the "Bond Registrar." The Bond Registrar shall keep, or cause to be kept,
sufficient books for the registration and transfer of the Bond. The Bond Registrar is authorized,
on behalf of the City, to carry out all of the Bond Registrar's powers and duties under this
Ordinance.
The Bond may be transferred only upon the books for the registration and transfer of
bonds (the "Bond Register"), upon the surrender thereof to the Bond Registrar, together with a
form of transfer duly executed by the Registered Owner or its attorney duly authorized in
writing. Upon the transfer of a Bond, there shall be issued in the name of the transferee or
transferees a new fully registered bond or bonds of any authorized denomination or
denominations and of the same maturity and interest rate, and of the same aggregate principal
amount, as the surrendered Bond. The new bond or bonds shall bear the same date as the date of
the surrendered bond, but shall bear interest from the immediately preceding interest payment
date to which interest has been paid or fully provided for.
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This Section is intended to provide the system of registration required by Chapter 9, Title
57, Idaho Code.
Section 6: PRE-PAYMENT; DEFEASANCE
The City shall have the option to prepay the Bond, in whole or in part, in accordance with
the prepayment provisions of the Loan Agreement.
In the event that money and/or government obligations, maturing or having guaranteed
redemption prices at the option of the owner at such time or times and bearing interest to be
earned thereon in such amounts as are sufficient (together with any resulting cash balances) to
redeem and retire part or all of the Bond in accordance with its terms, are hereafter irrevocably
set aside in a special account and pledged to effect such redemption and retirement, then no
further payments need be made into the Bond Fund for the payment of the principal of and
interest on the Bond so provided for, and the Bond and interest accrued thereon shall then cease
to be entitled to any lien, benefit, or security of this Ordinance, except the right to receive the
funds so set aside and pledged, and the Bond and interest accrued thereon shall no longer be
deemed to be outstanding hereunder.
Section 7: FUNDS AND ACCOUNTS —REDEMPTION OF REFUNDED
BONDS
A. Establishment of Funds and Accounts. The following funds and accounts are
created or confirmed with respect to the Bond.
(1) Bond Fund, to be held by the City.
(2) Cost of Issuance Fund, to be held by the Trustee.
(3) Project Fund, to be held by the City.
B. Delivery of Bond; Application of Proceeds. The Trustee is hereby instructed to
receive payment therefor in accordance with the terms of this Bond Ordinance and the Loan
Agreement and deposit the proceeds of sale as follows:
1. A portion of the proceeds of sale of the Bond, as shall be designated by
Written Certificate of the City, shall be deposited in the Cost of Issuance
Fund to be used as provided in the Loan Agreement.
2. Accrued interest on the Bond from its date to the date of delivery, if any,
shall be deposited into the Bond Fund.
3. The remaining proceeds of the Bond shall be deposited into the Project
Fund and applied to the Cost of Project.
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(C) Project Fund. There has heretofore been created a special fund known as the
"City of Eagle Project Capital Improvement Fund (the "Project Fund"), into which shall be
deposited all of the net proceeds (gross proceeds less amounts deposited into the Cost of
Issuance Fund) of the Bond, to be used and applied for the payment of a portion of the Cost of
the Project. Any interest earnings on moneys invested from the Project Fund shall remain in the
Project Fund and be used for the purposes of the Project Fund. When the Project has been
completed and all costs related thereto have been paid in full, any balance remaining in the
Project Fund shall be deposited in to the Bond Fund.
D. Cost of Issuance Fund. There is hereby established in the hands of the Trustee a
separate fund designated as the "Cost of Issuance Fund." At the time of the delivery of the Bond
the City shall deposit into the Cost of Issuance Fund such amount as shall be required to pay the
reasonable and necessary costs of issuance of the Bond. Moneys in the Cost of Issuance Fund
shall be used for the payment of costs of issuance of the Bond. Any moneys remaining in the
Cost of Issuance Fund on the date of the full and final payment of all costs of issuance of the
Bond shall be transferred to the City and deposited into the Bond Fund.
E. Bond Fund. General funds of the City, including but not limited to the proceeds
of taxes levied without limitation as to rate or amount to pay the principal of and interest on the
Bond, as set forth in Section 8 of this Resolution, shall be kept by the Treasurer of the City in a
special fund, which is hereby created, separate and apart from all other funds of the City which is
hereby designated the "City of Eagle, Idaho General Obligation Bond, Series 2013, Bond Fund"
(the "Bond Fund") or such other designation as shall conform to banking requirements and good
accounting practices, which Bond Fund shall be used for no other purpose than the payment of
the principal of and interest on the Bond, on each payment date as the same fall due. Monies in
the Bond Fund may be invested in lawful investments until needed for the purposes of the Bond
Fund, and all investment earnings shall accrue to and be used solely for the purposes of the Bond
Fund. The Bond Fund shall be maintained by the Treasurer until the principal of and interest on
the Bond has been paid in full.
Section 8: COVENANTS AND UNDERTAKINGS
A. Levy of Taxes. In accordance with the provisions of Section 57-222, Idaho Code,
as amended, there shall be levied on all taxable property in the City, in addition to all other taxes,
a direct annual ad valorem tax in an amount, together with other available funds of the City,
sufficient to meet the payment of the principal and interest on the Bond as the same mature, and
to constitute a sinking fund for the payment of the principal thereof.
If taxes are levied, said taxes in each of said years shall be levied, assessed, certified,
extended, and collected by the proper officers and at the times, all as fixed by law, and as other
taxes are levied, assessed, certified, extended, and collected in, for and by the City and by the
same officers thereof and are hereby appropriated for the purpose of paying any of the Bond until
the Bond shall be fully paid.
Principal of or interest on the Bond falling due at any time when the proceeds of said tax
levy may not be available shall be paid from other funds of the City and shall be reimbursed
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from the proceeds of said taxes when said taxes shall have been collected. Said taxes in each of
the several years shall be and are hereby certified as being taxes necessary to be levied on all of
the taxable property in the City for the purpose of paying the principal of and the interest on the
Bond as the same become due. Said taxes when collected shall be placed in the Bond Fund and
shall be used for no other purpose than for the payment of the principal of and the interest on the
Bond as the same become due, so long as any of the Bond remain outstanding and unpaid, but
nothing herein contained shall be construed to prevent the City from paying the interest on or the
principal of the Bond from any other funds in its hands and available for that purpose, or to
prevent the City from levying any further or additional taxes which may be necessary to fully
pay the interest on or the principal of the Bond.
The full faith and credit of and all taxable property in the City are hereby pledged for the
prompt payment of the principal of and the interest on the Bond as the same become due, and the
tax levies to that end herein provided shall be in full force and effect, and forever remain so until
the indebtedness hereby incurred, principal and interest, shall have been fully paid, satisfied and
discharged, except as hereinbefore provided, and any collection fees or charges made in
connection with the payment of the Bond and interest thereon are to be paid by the City.
B. Arbitrage Covenant; Covenant to Maintain Tax Exemption.
(1) The Treasurer and other appropriate officials of the City are each hereby
authorized and directed to execute a Tax Certificate as shall be necessary to establish that the
Bond is not an "arbitrage bonds" within the meaning of Section 148 of the Code and the
Regulations and to establish that interest on the is not and will not become subject to taxation
under the Code and applicable regulations. The City covenants and certifies to and for the
benefit of the Registered Owners and Beneficial Owners that no use will be made of the proceeds
of the issue and sale of the Bond, or any funds of the City which may be deemed to be proceeds
of the Bond, pursuant to Section 148 of the Code and the Regulations which use, if it had been
reasonably expected on the date of issuance of the Bond, would have caused the Bond to be
classified as an "arbitrage bond" within the meaning of Section 148 of the Code. Pursuant to this
covenant, the City obligates itself to comply throughout the term of the Bond with the
requirements of Section 148 of the Code and the Regulations proposed or promulgated
thereunder.
(2) The City further covenants and agrees to and for the benefit of the
Registered Owners and Beneficial Owners that the City (i) will not take any action that would
cause interest on the Bond to be or to become ineligible for the exclusion from gross income of
the Registered Owners and Beneficial Owners as provided in Section 103 of the Code, (ii) will
not omit to take or cause to be taken, in timely manner, any action, which omission would cause
interest on the Bond to be or to become ineligible for the exclusion from gross income of the
Registered Owners and Beneficial Owners as provided in Section 103 of the Code and (iii)
without limiting the generality of the foregoing, a) will not take any action which would cause
the Bond to be a "private activity bond" within the meaning of Section 141 of the Code or to fail
to meet any applicable requirement of Section 149 of the Code and (b) will not omit to take or
cause to be taken, in timely manner, any action, which omission would cause the Bond, or any
Bond, to be a"private activity bond" or to fail to meet any applicable requirement of Section 149
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of the Code. The Mayor, Clerk, and Treasurer of the City and other appropriate officials of the
City are each hereby authorized and directed to execute from time to time such Tax Certificates
as shall be necessary to establish that the Bond is not and will not become a "private activity
bond," that all applicable requirements of Section 149 of the Code are and will be met, and that
the covenants of the City contained in this Section 8 will be complied with.
(3) The City covenants and certifies to and for the benefit of the Registered
Owners and Beneficial Owners that will at all times comply with the provisions of any Tax
Certificate.
(4) A Tax Certificate, in the form acceptable to Bond Counsel, is hereby
authorized and approved to be delivered in connection with the initial delivery of the Bond. The
Mayor, Clerk, or Treasurer of the City is hereby authorized to execute such Tax Certificate.
Approval of the Tax Certificate by any such officer shall be conclusively established by their
execution of the Tax Certificate in its final form.
The City hereby covenants to adopt, make, execute, and enter into (and to take such
actions, if any, as may be necessary to enable it to do so) any resolution or Tax Certificate
necessary to comply with any changes in Regulations in order to preserve the exclusion of
interest on the Bond from gross income of the Registered Owners and Beneficial Owners thereof
for purposes of the federal income tax to the extent that it may lawfully do so. The City further
covenants to (a) impose such limitations on the investment or use of moneys or investment
related to the Bond, (b) make such payments to the United States Treasury, (c) maintain such
records, (d) perform such calculations and (e) perform such other acts as may be necessary to
preserve the exclusion of interest on the Bond from gross income of the Registered Owners and
Beneficial Owners thereof for purposes of the federal income tax and which it may lawfully do.
The City hereby covenants that it will take all steps to comply with the requirements of
the Code to the extent necessary to maintain the exclusion of interest on the Bond from gross
income and alternative minimum taxable income (except to the extent of certain adjustments
applicable to corporations) under present federal income tax laws.
Pursuant to these covenants, the City obligates itself to comply throughout the term of the
issue of the Bond with the requirements of Section 103 of the Code and the Regulations.
D. Bond in Registered Form. The City recognizes that Section 149(a) of the Code
requires the Bond to be issued and to remain in fully registered form in order that interest thereon
is exempt from federal income taxation under laws in force at the time the Bond is delivered. In
this connection, the City agrees that it will not take any action to permit the Bond to be issued in,
or converted into, bearer form.
E. Continuing Disclosure. The City will comply with the requirements of Rule
15c2-12(a)(5) of the U.S. Securities and Exchange Commission with respect to the continuing
disclosure of financial information and operating data and of certain material events with respect
to the Bond, as more fully set forth in the Loan Agreement.
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F. Reimbursement. None of the proceeds of the Bond will be used to reimburse the
City for capital expenditures made prior to the date of delivery of the Bond unless the City, not
later than 60 days after the payment of such expenditure, shall have adopted an official intent
resolution as provided by Section 1.150-2 of the Treasury Regulations.
Section 9: LOAN AGREEMENT
The Loan Agreement, substantially in the form annexed hereto as Exhibit "C," is hereby
approved. The Mayor and City Clerk, or such officer's designee, are each hereby authorized and
directed, on behalf of the City, to execute and attest, respectively, and to deliver the Loan
Agreement; provided, however, that (i) the term of the Loan Agreement shall end no later than
September 15, 2028; (ii) the principal amount set forth in the Loan Agreement shall not exceed
$1,200,000; and (iii) the true interest cost on the Bond shall not exceed 5.5%. The sale of the
Bond to the Authority in accordance with the Loan Agreement is hereby approved. The City
shall comply with all terms and provisions of the Loan Agreement, and, in the event that any
provision of this Ordinance or the Bond is inconsistent with the provisions of the Loan
Agreement, the provisions of the Loan Agreement shall control.
Section 10: AMENDMENTS
A. The City from time to time and at any time may adopt an ordinance or ordinances
supplemental hereto, which ordinance or ordinances thereafter shall become a part of this
Ordinance, for any one or more of all of the following purposes:
1. To add to the covenants and agreements of the City in this Ordinance,
other covenants and agreements thereafter to be observed, which shall not
adversely affect the interest of the Registered Owners of the Bond, or to
surrender any right or power herein reserved.
2. To make such provisions for the purpose of curing any ambiguities or of
curing, correcting, or supplementing any defective provisions contained in
this Ordinance, or any ordinance authorizing future bonds in regard to
matters or questions arising under such ordinances as the Council may
deem necessary or desirable and not inconsistent with such ordinances and
which shall not adversely affect, in any material respect, the interest of the
Registered Owners of the Bond.
Any such supplemental ordinance may be adopted without the consent of the Registered
Owners of the Bond at any time outstanding, notwithstanding any of the provisions of subsection
B of this Section.
B. With the consent of the Registered Owners of not less than 75% in aggregate
principal amount of the Bond at the time outstanding, the Council may adopt an ordinance or
ordinances supplemental hereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Ordinance or of any supplemental ordinance;
provided, however, that no such supplemental ordinance shall:
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1. Extend the fixed maturities of the Bond, or reduce the rate of interest
thereon, or extend the time of payments of interest from their due date, or
reduce the amount of the principal thereof, or reduce any premium payable
on the redemption thereof, if applicable, without the consent of the
Registered Owners of the Bond so affected; or
2. Reduce the aforesaid percentage of the Registered Owners required to
approve any such supplemental ordinance.
It shall not be necessary for the consent of the Registered Owners under this subsection B
to approve the particular form of any proposed supplemental ordinance, but it shall be sufficient
if such consent shall approve the substance thereof
C. Upon the adoption of any supplemental ordinance pursuant to the provisions of
this Section, this Ordinance shall be deemed to be modified and amended in accordance
therewith, and the respective rights, duties, and obligations of the City under this Ordinance and
the Registered Owners of the Bond outstanding hereunder shall thereafter be determined,
exercised, and enforced thereunder, subject in all respects to such modification and amendments,
and all terms and conditions of any such supplemental ordinance shall be deemed to be part of
the terms and conditions of this Ordinance for any and all purposes.
D. Any Bond executed and delivered after the execution of any supplemental
ordinance adopted pursuant to the provisions of this Section may have a notation as to any matter
provided for in such supplemental ordinance, and if such supplemental ordinance shall so
provide, new bonds so modified as to conform, in the opinion of the Council, to any modification
of this Ordinance contained in any such supplemental ordinance, may be prepared and delivered
without cost to the Registered Owner of the Bond then outstanding, upon surrender for
cancellation of the Bond.
Section 11: FURTHER AUTHORITY
The Mayor, the Clerk and Treasurer, and other officers of the City are, and each of them
is, hereby authorized to do or perform all such acts and to execute all such certificates,
documents, and other instruments as may be necessary or advisable to provide for the issuance,
sale, and delivery of the Bond and the fulfillment of the covenants and obligations of the City
contained herein and therein.
Section 12: ORDINANCE A CONTRACT
The provisions of this Ordinance shall constitute a contract between the City and the
Registered Owners so long as the Bond hereby authorized remain unpaid.
Section 13: SEVERABILITY
If any one or more of the covenants or agreements provided in this Ordinance to be
performed on the part of the City shall be declared by any court of competent jurisdiction to be
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contrary to law, then such covenant or covenants, agreement or agreements, shall be null and
void and shall be deemed separable from the remaining covenants and agreements in this
Ordinance and shall in no way affect the validity of the other provisions of this Ordinance or of
the Bond.
Section 14: REPEALER
All other ordinances or parts thereof, to the extent inconsistent herewith, are hereby
repealed and shall, to the extent of such inconsistency, have no further force or effect.
Section 15: PUBLICATION
This Ordinance, or a summary thereof in compliance with Section 50-901A, Idaho Code,
substantially in the form annexed hereto as Exhibit "A," shall be published once in the official
newspaper of the City, and shall take effect immediately upon passage, approval, and
publication.
DATED this 23r1 day of July, 2013.
CITY OF EAGLE
Ada County, Idaho
ATTEST: Ai`�
Mayor '
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Page 11 of 11
EXHIBIT A
SUMMARY OF
ORDINANCE NO. 701
AN ORDINANCE OF THE CITY OF EAGLE, ADA COUNTY, IDAHO, AUTHORIZING
THE ISSUANCE AND SALE OF GENERAL OBLIGATION BONDS, SERIES 2013, IN A
PRINCIPAL AMOUNT NOT TO EXCEED $1,200,000; PROVIDING FOR THE DATE,
FORM, MATURITIES, DESIGNATION, REGISTRATION, AUTHENTICATION, AND
REDEMPTION OF THE BONDS; FIXING THE MAXIMUM RATE OF INTEREST ON THE
BONDS; DESCRIBING THE PROJECT TO BE FINANCED WITH THE PROCEEDS OF
THE BONDS; PROVIDING FOR THE DATE, TIME, AND PLACE OF SALE OF THE
BONDS; PROVIDING FOR THE PAYMENT OF PRINCIPAL OF AND INTEREST ON THE
BONDS BY THE ANNUAL LEVY OF TAXES; ESTABLISHING FUNDS; PROVIDING
COVENANTS WITH RESPECT TO THE TAX-EXEMPT STATUS OF INTEREST ON THE
BONDS; PROVIDING FOR RELATED MATTERS; AND PROVIDING AN EFFECTIVE
DATE
A summary of the principal provisions of Ordinance No. 701 of the City of Eagle, Ada
County, Idaho, adopted on July 23, 2013, is as follows:
Section 1: Defines the terms and phrases used in the Ordinance.
Section 2: Describes the City of Eagle General Obligation Bond, Series 2013 (the
"Bond").
Section 3: Provides for the manner and method of execution of the Bond.
Section 4: Provides for the place and manner of payment of the Bond.
Section 5: Appoints the County Treasurer as Bond Registrar.
Section 6: Provides for the prepayment and defeasance of the Bond.
Section 7: Establishes funds and provides for the Bond.
Section 8: Provides special covenants for the Bond.
Section 9: Approves a Loan Agreement with, and provides for the sale of the Bond
to, the Idaho Bond Bank Authority.
Section 10: Provides for amendments to the Ordinance.
Section 11: Authorizes the Chairman, County Clerk, and County Treasurer to execute
any additional documents necessary to sell and deliver the Bond.
Section 12: States that the Ordinance constitutes a contract with the Registered
EXHIBIT "A"
Page 1
Owners of the Bond.
Section 13: Provides for severability.
Section 14: Repeals prior inconsistent ordinances, to the extent of any inconsistency.
Section 15: Provides for the publication of the Ordinance or a summary thereof and
the effective date of the Ordinance.
The full text of Ordinance No. 701 is available at the City Clerk's office and will be
provided to any citizen upon personal request during normal office hours.
DATED this 23rd day of July, 2013.
CITY OF EAGLE, IDAHO
Mayor
ATTEST:
Clerk
EXHIBIT "A"
Page 2
CERTIFICATION OF ATTORNEY
I, the undersigned attorney at law and City Attorney for the City of Eagle, Idaho, hereby
certify that I have read the attached summary of Ordinance No. 701 of City of Eagle and that the
same is true and complete and provides adequate notice to the public of the contents of said
Ordinance.
Dated as of the 23`d day of July, 2013.
Attorney at Law
EXHIBIT "A"
Page 3
EXHIBIT B
[Form of Bond]
UNITED STATES OF AMERICA
Registered Registered
No. One $
STATE OF IDAHO
CITY OF EAGLE
ADA COUNTY, IDAHO
GENERAL OBLIGATION BOND, SERIES 2013
THE CITYOF EAGLE, Idaho (the "City"), for value received, promises to pay from the
special fund hereinafter described and in the manner hereinafter set forth, and not otherwise, to
THE IDAHO BOND BANK AUTHORITY (the "Authority"), as the registered owner hereof, the
principal sum of
($ ), together with interest on the unpaid balance of this Bond from its date or from the
date of the most recent interest payment at the following rates. Said principal and interest shall
be payable in accordance with the following schedule:
Payment Date Principal Interest Rate Interest Total Payment
This Bond shall be registered as to principal and interest in the name of the original
owner and any subsequent owners in a registration book in the office of the City Treasurer, who
shall be the Bond Registrar. This Bond is transferable only upon said book, by notation thereon,
by the registered owner hereof in person or by its attorney duly authorized in writing.
Both principal of and interest on this Bond shall be payable in lawful money of the United
States of America, to the registered owner hereof whose name and address shall appear on the
registration books of the City maintained by the City Treasurer (the "Bond Registrar"). Each
installment of interest, or principal and interest, shall be paid to the registered owner whose name
appears on the Bond Register on the fifteenth day next preceding the payment date, at the address
appearing on the Bond Register, and shall be paid by check or draft of the Bond Registrar mailed
to such registered owner on the due date at the address appearing on the Bond Register, or at
Page 1 - EXHIBIT "B"
such other address as may be furnished in writing by such registered owner to the Bond
Registrar. Any owner of this Bond subsequent to its original owner is hereby placed on notice of
all payment of both principal of and interest on this Bond prior to its transfer to him and all
subsequent owners hereof hereby acknowledge that they have ascertained the actual unpaid
principal amount of this Bond as of the date of transfer to them and hereby release the City from
all obligations as to all principal and interest paid by the City prior to such date.
The City has reserved the right, at its option, to prepay the principal amount outstanding,
as provided in the Loan Agreement dated as of August 1, 2013, between the City and the
Authority(the "Loan Agreement").
Interest on this Bond shall cease to accrue as to the amount of principal being prepaid
after the date fixed for prepayment if notice has been properly given and funds equal to the
amount of prepayment have been deposited at the place of payment at that time.
This Bond is issued for the purpose of paying the costs of the purchase of city hall
facilities, pursuant to Idaho Code, Title 50, Chapter 10, and Title 57, Chapters 2 and 9, and also
pursuant to Ordinance No. 701 of the City, adopted on July 23, 2013 (the "Bond Ordinance").
This Bond further evidences the City's payment obligations under the Loan Agreement.
This Bond is issued pursuant to and in full compliance with the Constitution and statutes
of the State of Idaho, particularly Chapter 10 of Title 50, Chapters 2 and 9 of Title 57, and Title
67, Chapter 87, Idaho Code, the election proceedings of May 21, 2013, and proceedings duly
adopted and authorized by the City Council acting for and on behalf of the City, more
particularly the Bond Ordinance. The Bond is payable from ad valorem taxes levied and to be
levied upon all the taxable property within said City and from other lawfully available funds of
the City.
IT IS HEREBY CERTIFIED AND DECLARED that all acts, conditions, and things
required by the Constitution and statutes of the State of Idaho to exist, to have happened, been
done, and performed precedent to and in the issuance of this Bond have happened, been done,
and performed, and that the issuance of this Bond does not violate any Constitutional, statutory,
or other limitation upon the amount of bonded indebtedness that the City may incur.
IN WITNESS WHEREOF, the Mayor of the City of Eagle, Idaho, has caused this Bond
to be executed by the manual signature of the Mayor and countersigned by the manual signature
of its Treasurer, and attested by the manual signature of its Clerk, and the seal of the City to be
impressed hereon, as of this 20th day of August, 2013.
Page 2 - EXHIBIT "B"
CITY OF EAGLE, IDAHO
Mayor
ATTEST:
City Clerk
Page 3 -EXHIBIT "B"
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
Name of Transferee:
Address:
Tax Identification No.
the within Bond and hereby irrevocably constitutes and appoints
of
to transfer said Bond on the books kept for registration thereof with full power of substitution in
the premises.
Dated:
Registered Owner
NOTE: The signature on this Assignment must
correspond with the name of the registered owner as
it appears upon the face of the within Bond in every
particular, without alteration or enlargement or any
change whatever.
SIGNATURE GUARANTEED:
Bank, Trust Company or Member
Firm of the New York Stock
Exchange
Authorized Officer
Page 4 - EXHIBIT`B"
EXHIBIT
SF DRAFT 6/25/13
Refunding Financing Form
General Obligation Bonds, Intercept
LOAN AGREEMENT
Between
IDAHO BOND BANK AUTHORITY
And
THE CITY OF EAGLE, IDAHO
Dated as of June 1, 2013
Relating to
Idaho Bond Bank Authority
Revenue Bonds
Series 2013B
Table of Contents
Page
ARTICLE I DEFINITIONS
Section 1.1 Definition of Terms 1
Section 1.2 Number and Gender 3
Section 1.3 Articles, Sections, Etc. 3
ARTICLE II REPRESENTATIONS
Section 2.1 Representations of the Municipality 4
Section 2.2 Representations of the Authority 4
ARTICLE III LOAN TO MUNICIPALITY; REPAYMENT PROVISIONS
Section 3.1 Loan to Municipality 5
Section 3.2 Repayment and Payment of Other Amounts Payable 5
Section 3.3 Unconditional Obligation 6
Section 3.4 Assignment of Authority's Rights 6
Section 3.5 Amounts Remaining In Funds 6
Section 3.6 Timeliness of Payments; Consent to State Intercept; Repayment. 7
ARTICLE IV SECURITY
Section 4.1 Pledge of Full Faith and Credit and Tax Revenues 8
Section 4.2 Levy of Taxes. 9
ARTICLE V SPECIAL COVENANTS AND AGREEMENTS
Section 5.1 Punctual Payment 9
Section 5.2 Legal Existence 9
Section 5.3 Tax Exempt Status Of Bonds 9
Section 5.4 Notices To Trustee And Authority 10
Section 5.5 Continuing Disclosure 11
Section 5.6 Books of Record and Accounts; Financial Statements. 16
Section 5.7 Delivery of Closing Documents. 17
Section 5.8 Authority Fees 17
ARTICLE VI EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Events of Default 17
Section 6.2 Remedies on Default 18
Section 6.3 Agreement To Pay Attorneys' Fees and Expenses 19
Section 6.4 No Remedy Exclusive 19
Section 6.5 No Additional Waiver Implied By One Waiver 19
Section 6.6 No Cross Default. 19
ARTICLE VII PREPAYMENT
Section 7.1 Redemption of Bonds With Prepayment Moneys 19
Section 7.2 Options To Prepay Installments 19
Section 7.3 Reserved 19
Section 7.4 Reserved 20
-i-
ARTICLE VIII DISCHARGE OF OBLIGATIONS
Section 8.1 Discharge Of Obligations 20
ARTICLE IX NON-LIABILITY OF AUTHORITY; EXPENSES; INDEMNIFICATION
Section 9.1 Non-Liability of Authority 21
Section 9.2 Indemnification 21
ARTICLE X MISCELLANEOUS
Section 10.1 Notices 21
Section 10.2 Severability 21
Section 10.3 Execution of Counterparts 21
Section 10.4 Amendments, Changes and Modifications 22
Section 10.5 Governing Law 22
Section 10.6 Authorized Municipality Representative 22
Section 10.7 Term of The Loan Agreement 22
Section 10.8 Binding Effect 22
Section 10.9 Post Issuance Tax Compliance Procedures of the Authority
Signature Page 23
Schedule 1 24
EXHIBIT A Description of the Project 25
EXHIBIT B Repayment Installments and Repayment Installment Dates 26
EXHIBIT C Municipality Closing Documents 27
EXHIBIT D-1 Certificate Regarding Annual Financial Information 28
EXHIBIT D-2 Notice to Repositories of Failure to File Annual Report 29
EXHIBIT E Fees Charged by Authority for Failure to Comply with
Continuing Disclosure Requirements 30
EXHIBIT F Post Issuance Tax Compliance Procedures 33
-ii-
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of 1, 2013, by and between the CITY
OF EAGLE, IDAHO, a municipal corporation duly organized, existing and operating under the
laws and Constitution of the State of Idaho and thereby a "Municipality" under the "Act" as
defined below (the "Municipality"), and IDAHO BOND BANK AUTHORITY, an independent
public body corporate and politic (the "Authority"),
WITNESSETH:
WHEREAS, pursuant to Idaho Code, Title 57, Section 57-504, Idaho Code the
Municipality conducted an election to authorize the issuance of its General Obligation Bond,
Series 2013 (the "Municipal Bond") in order to finance the purchase of its city hall facilities and
related improvements and costs as more fully described in Exhibit A hereto (the "Project");
WHEREAS, the Idaho Bond Bank Authority is an independent public body corporate and
politic duly created and operating pursuant to Idaho Code, Title 67, Chapter 87 as amended or
supplemented from time to time(the "Act");
WHEREAS, the Act authorizes and empowers the Authority to issue bonds for the purpose
of purchasing municipal bonds, including loans undertaken by municipalities for any purpose
authorized by law;
WHEREAS, the Authority intends to issue Idaho Bond Bank Authority Revenue Bonds,
Series 2013B (the"Bonds");
WHEREAS, pursuant to an Ordinance, adopted on , 2013 (the "Bond
Ordinance"), the Municipality authorized the Municipal Bond and approved this Loan Agreement
by and between the Municipality and the Authority (the "Loan Agreement"), under which the
proceeds of the Loan shall finance the Project; and
NOW, THEREFORE, in consideration of the premises and the respective representations
and covenants herein contained, the parties hereto agree as follows:
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ARTICLE 1—DEFINITIONS
Section 1.1 Definition of Terms. Unless the context otherwise requires, the capitalized terms
used in this Loan Agreement not otherwise defined herein shall have the meanings specified in
Section 1.01 of the Master Trust Agreement, dated as of December 1, 2004 as amended between
the Authority and U.S. Bank National Association (which trustee has been replaced by The Bank
of New York Mellon Trust Company, N.A.) relating to the Bonds (the "Master Trust
Agreement"), and all subsequent supplemental trust agreements, including the Twenty-First
Supplemental Trust Agreement which is dated as of August 1, 2013 (the "Twenty-First
Supplemental Trust Agreement") both by and between the Authority and The Bank of New York
Mellon Trust Company, N.A., as trustee (the "Trustee"), as originally executed or, as previously
supplemented and amended or as it may from time to time be supplemented or amended as
provided therein with the Master Trust Agreement and all Supplemental Trust Agreements
including the Twenty-First Supplemental Trust Agreement referred to herein collectively as the
"Trust Agreement."
"Annual Expense Charges" means the annual charges for Trustee fees, continuing
disclosure dissemination agent fees, audit fees, rebate calculation expenses or other expenses
related to the Bonds or Loan and which shall be paid by the Municipality as provided in Section
3.2(a) hereof upon receipt of invoice from the Trustee as well as any late fees or charges related
to continuing disclosure or audit submission.
"Authority Fee" means the one-time fee payable by the Municipality to the Authority
upon issuance and delivery of the Bonds in the amount set forth in Schedule 1 equal to 1/10 of
one percent (.10%) of the total debt service to be paid on the Loan. The amount of any
application fee previously paid by the Municipality to the Authority may be credited against the
Authority Fee.
"Authorized Municipality Representative" means the Mayor or Municipality Clerk, or
any other officer of the Municipality duly authorized by the Municipality.
"Bond Fund" means the Bond Fund created under the Bond Resolution.
"Bond Ordinance" means the Ordinance of the Municipality authorizing the Municipal
Bond and this Loan Agreement.
"Certificate of the Municipality" means an instrument in writing signed by an Authorized
Municipality Representative, such authorization to be evidenced by a certificate verifying the
specimen signatures of such officers at the request of the Trustee.
"Fiscal Year" means the fiscal year of the Municipality, beginning October 1 and ending
September 30 each year.
"Generally Accepted Accounting Principles" means the uniform accounting and reporting
procedures set forth in publications of the American Institute of Certified Public Accountants or its
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successor, or by any other generally accepted authority on such procedures, and includes, as
applicable, the standards set forth by the Governmental Accounting Standards Board or its
successor.
"Independent Certified Public Accountant" means any firm of certified public accountants
appointed by the Municipality, which is independent of the Municipality and the Authority
pursuant to the Statement on Auditing Standards No. 1 of the American Institute of Certified
Public Accountants.
"Loan" means the loan of proceeds of the Bonds as described in Section 3.1 hereof.
"Maximum Annual Debt Service" means, as of any date of calculation, the largest
Annual Debt Service during the period from the date of such calculation through the final
maturity date of all Parity Debt.
"Municipal Bond" or "Municipal Bonds" means the tax-exempt general obligation bonds
or other evidence of indebtedness issued and delivered by the Municipality to evidence the Loan
as provided in Section 3.1 hereof.
"Municipality" means The City of Eagle, Idaho, a municipal corporation of the State of
Idaho and thereby a "Municipality" under the Act.
"Net Proceeds" means, when used with respect to any casualty insurance or condemnation
award, the proceeds from such insurance or condemnation award remaining after payment of all
expenses (including attorneys' fees) incurred in the collection of such proceeds.
"Project" means the financing of the acquisition of city hall facilities including related
improvements and costs described in Exhibit A hereto.
"Repayment Amount"means the amount specified in Schedule 1 attached hereto.
"Repayment Installment" means any amount that the Municipality is required to pay
directly to the Trustee pursuant to Section 3.2(a) of this Loan Agreement as a repayment of the
loan made to the Municipality under the Loan Agreement, which amount is determined in
accordance with Section 4.2(a)thereof.
"Repayment Installment Date" means the dates corresponding to the Repayment
Installments, as set forth in Exhibit B, however, payments must be transmitted to the Trustee at
least fifteen (15) days prior to the Repayment Installment Dates on Exhibit B.
Section 1.2 Number and Gender. The singular form of any word used herein, including the
terms defined in Section 1.01 of the Trust Agreement, shall include the plural, and vice versa. The
use herein of a word of any gender shall include all genders.
Section 1.3 Articles, Sections, Etc. Unless otherwise specified, references to Articles, Sections
and other subdivisions of this Loan Agreement are to the designated Articles, Sections and other
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subdivisions of this Loan Agreement as originally executed. The words "hereof," "herein,"
"hereunder" and words of similar import refer to this Loan Agreement as a whole. The headings
or titles of the several articles and sections, and the table of contents appended to copies hereof,
shall be solely for convenience of reference and shall not affect the meaning, construction or effect
of the provisions hereof.
ARTICLE II—REPRESENTATIONS
Section 2.1 Representations of The Municipality. The Municipality makes the following
representations as the basis for its undertakings herein contained:
(a) The Municipality is a duly organized municipal corporation in the State of Idaho.
Under the provisions of the Act, the Municipality has the power to enter into the
transactions contemplated by this Loan Agreement and to carry out its obligations
hereunder. By proper action, the Municipality has authorized the Municipal Bond
evidencing its obligations under the Loan Agreement in accordance with Section 57-504 of
the Idaho Code, as amended, and has been duly authorized to execute, deliver and duly
perform this Loan Agreement.
(b) The Municipality is not in default under any of the provisions of the laws of the
State of Idaho which default would affect its existence or its powers referred to in
subsection(a) of this Section 2.1.
(c) The Municipality has found and determined and hereby finds and determines that
all requirements of the Act with respect to the execution of this Loan Agreement have been
complied with and that financing the Project by entering into this Loan Agreement will be
in furtherance of the purposes of the Act.
(d) The Project consists and will consist of the financing of those facilities described in
Exhibit A hereto, and the Municipality shall make no changes to any portion of said
facilities or to the operation thereof which would impair the exemption from gross income
of the interest on the Bonds or the Municipal Bond for federal income tax purposes. In
particular, the Municipality shall comply with all requirements of the Tax Certificate, dated
the Issue Date(the "Tax Certificate"), which is hereby incorporated by reference herein.
Section 2.2 Representations of the Authority. The Authority makes the following
representations as the basis for its undertakings herein contained:
(a) The Authority is an independent public body corporate and politic duly formed
under the laws of the State of Idaho and has the power to enter into and has duly authorized
the execution and delivery of the Trust Agreement, this Loan Agreement and all other
documents contemplated hereby to be executed by the Authority.
(b) The execution and delivery of the Bonds, this Loan Agreement, and the Trust
Agreement and the consummation of the transactions contemplated hereby and thereby do
not conflict with or constitute a breach of or default under the Act or, to the best knowledge
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of the Authority, under the terms and conditions of any agreement or commitment to which
the Authority is a party or by which the Authority is bound.
(c) The Authority will issue, execute and deliver the Bonds upon the terms and
conditions set forth in the Trust Agreement and will use a portion of proceeds of the
issuance of the Bonds for the Loan to finance the Project in accordance with this Loan
Agreement.
(d) The Authority sold the Bonds in a bona-fide public offering through which, to the
best of the Authority's knowledge acting in good faith, the Bonds were sold at rates and
prices that represent market terms available on the date of the sale.
ARTICLE III - LOAN TO MUNICIPALITY; REPAYMENT PROVISIONS
Section 3.1 Loan to Municipality. The Authority covenants and agrees, upon the terms and
conditions in this Loan Agreement, to make a Loan of the amount specified in Schedule 1
attached hereto to the Municipality for the purpose of financing the Project. The Loan is
evidenced by a Municipal Bond of the Municipality in the par amount of $1,200,000.00
designated by the Bond Ordinance as the City of Eagle, Idaho General Obligation Bond, Series
2013 (the "Municipal Bond"). The Loan is based on the purchase price of the Municipal Bond at
the par amount thereof plus a premium or less a discount as described in Schedule 1 hereto. Said
Loan shall be disbursed as described in Schedule 1. Pursuant to said covenant and agreement,
the Authority will issue the Bonds upon the same terms and conditions contained in this Loan
Agreement and the Trust Agreement and will cause the Bond proceeds to be applied as provided
in Article III thereof. The Municipality shall issue and sell its Municipal Bond to the Authority
as evidence of its Loan obligation hereunder and the payments due on the Municipal Bond shall
equal the Repayment Installments hereunder.
Section 3.2 Repayment and Payment of Other Amounts Payable.
(a) The Municipality covenants and agrees to pay to the Trustee the Repayment
Installments together with the Annual Expense Charges and all other amounts then due
hereunder on the Loan to the Municipality pursuant to Section 3.1 hereof, at least fifteen
(15) days prior to the Repayment Installment Dates as set forth in Exhibit B hereto. The
Trustee shall transmit the Annual Expense Charges to the Authority.
Any amount held by the Trustee in the Revenue Fund on the Municipality's behalf
on any Repayment Installment Date hereunder shall be credited against the Repayment
Installment due on such date to the extent available for such purpose; and provided further
that, subject to the provisions of this paragraph, if at any time the amounts held by the
Trustee in the Revenue Fund on the Municipality's behalf are sufficient to pay all of the
Repayment Installments, the Municipality shall be relieved of any obligation to make any
further payments under the provisions of this Section. Notwithstanding the foregoing, if
on any date the amount held by the Trustee in the Revenue Fund on the Municipality's
behalf is insufficient to make any required Repayment Installment on any Repayment
LOAN AGREEMENT—PAGE 5
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Installment Date, the Municipality shall forthwith pay such deficiency as a Repayment
Installment hereunder.
(b) Upon written request of the Trustee, the Municipality shall pay any Repayment
Installment directly to the Trustee.
Section 3.3 Unconditional Obligation. The obligations of the Municipality to make the
payments required by Section 3.2 hereof and to perform and observe the other agreements on its
part contained herein shall be absolute and unconditional, irrespective of any defense or any
rights of set-off, recoupment or counterclaim it might otherwise have against the Authority, and
during the term of this Loan Agreement, the Municipality shall pay absolutely net the payments
to be made on account of the loan as prescribed in Section 3.2 and all other payments required
hereunder, free of any deductions and without abatement, diminution or set-off; provided, that
the Municipality's obligation to make payments under this Loan Agreement is a general
obligation of the Municipality and the full faith and credit and all taxes to be levied pursuant to the
Bond Ordinance are hereby pledged to make the payments due and to become due hereunder,
provided that the State Intercept under Section 3.6 hereof shall apply if the Municipality receives
any revenues subject to State Intercept. Until such time as the Repayment Installments shall have
been paid in full (or provision for the payment thereof shall have been made pursuant to Article
VIII of this Loan Agreement), the Municipality (i) will not suspend or discontinue any payments
provided for in Section 3.2 hereof; (ii) will perform and observe all of its other covenants contained
in this Loan Agreement; and (iii) will not terminate this Loan Agreement for any cause, including,
without limitation, the occurrence of any act or circumstances that may constitute failure of
consideration, destruction of or damage to the facilities financed with Prior Bonds, commercial
frustration of purpose, any change in the tax or other laws of the United States of America or of the
State of Idaho or any political subdivision of either of these, or any failure of the Authority or the
Trustee to perform and observe any covenant, whether express or implied, or any duty, liability or
obligation arising out of or connected with this Loan Agreement or the Trust Agreement, except to
the extent permitted by this Loan Agreement.
Section 3.4 Assignment of Authority's Rights. As security for the payment of the Bonds, the
Authority will assign to the Trustee the Authority's rights, but not its obligations, under this Loan
Agreement, including the right to receive payments hereunder (except (i)the rights of the
Authority to receive notices under this Loan Agreement, (ii)the right of the Authority to receive
certain payments, if any, with respect to fees, expenses and indemnification and certain other
purposes under Sections of this Loan Agreement, and (iii)the right of the Authority to give
approvals or consents pursuant to this Loan Agreement) and the Authority hereby directs the
Municipality to make the payments required hereunder (except such payments for fees, expenses
and indemnification) directly to the Trustee. The Municipality hereby assents to such assignment
and agrees to pay the Repayment Installments directly to the Trustee (subject to the provisions of
Section 3.2(b)) without defense or set-off by reason of any dispute between the Municipality and
the Authority or the Trustee.
Section 3.5 Amounts Remaining in Funds. It is agreed by the parties hereto that after payment
in full of(i)the Repayment Installments, or after provision for such payment shall have been made
as provided in Article VIII of this Loan Agreement, (ii)the fees and expenses of the Authority in
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accordance with this Loan Agreement, (iii)the fees, charges and expenses of the Trustee, the
Registrar and Paying Agent in accordance with the Trust Agreement and this Loan Agreement and
(iv) all other amounts required to be paid under this Loan Agreement and the Trust Agreement, any
amounts remaining in any fund held by the Trustee under the Trust Agreement shall belong,
subject to the requirements of Section 7.03 of the Trust Agreement, to the Authority and be paid to
the Authority by the Trustee, provided that any earnings on payments by the Municipality to the
Trustee under Section 3.2(a) prior to the Repayment Installment Dates shall be deducted from
said remaining amounts and credited to the Municipality.
Section 3.6 Timeliness of Payments; Consent to State Intercept; Repayment.
(a) The Municipality understands that the State intercept and repayment procedures
contained in and required by Section 67-8727, Idaho Code, as amended, and as set forth
herein operate as a matter of law with respect to the Loan covered by this Loan
Agreement without the need for consent thereto by the Municipality. The Municipality
also understands that said intercept procedures will provide funds to pay the Authority
Bonds (not the Loan obligations).
(b) If the Municipality is unable to transfer all of its Repayment Installment to the
Trustee at least 15 days before the Repayment Installment Date, the Municipality shall
immediately notify the Trustee, the Authority and the State Treasurer by: (i) telephone;
(ii) a writing sent by facsimile transmission; and (iii) a writing sent by first-class United
States mail. If sufficient funds are not transferred to the Trustee for the Bonds of the
Authority that are secured by this Loan Agreement at least ten (10) days before the
scheduled debt service payment date of the Bonds, the Trustee shall transfer any available
funds pledged to secure payment of the Bonds in sufficient amounts to make up any
shortfall in the amount necessary to pay debt service on the Bonds on the scheduled
payment date and deposit such amount in the debt service payment fund for those Bonds.
(c) If, as a result of the failure of the Municipality to make Repayment Installments in
a timely manner, the Trustee shall transfer funds pursuant to paragraph (b) of this section
to pay debt service on the Bonds or if there are not sufficient funds available pursuant to
paragraph (b) of this section to make up for any shortfall in the amount necessary to pay
debt service on the Bonds, at least ten (10) days before the scheduled debt service
payment date of the Bonds, the Trustee shall notify the Authority and the State Treasurer
by: (i) telephone; (ii) a writing sent by facsimile transmission; and (iii) a writing sent by
first-class United States mail.
(d) To the extent provided and required by Section 67-8727, Idaho Code, as
amended, and upon the notice provided in subsection (c) of this section, the State
Treasurer shall (i) immediately intercept to the extent permitted by law any payments
available from: (A) the receipts of any payment of property taxes; or (B) sales tax
moneys that would be distributed pursuant to section 63-3638, Idaho Code; or (C) liquor
tax moneys that would be distributed pursuant to Section 23-404, Idaho Code, as
amended; or (D) any other source of operating moneys provided by the State to the
Municipality that would otherwise be paid to the Municipality by the State.
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(e) If the State has made all or part of a Repayment Installment on behalf of the
Municipality from moneys representing sales tax receipts transferred from the State
general fund pursuant to Section 67-8716, Idaho Code, the Municipality shall: (a)
reimburse all moneys drawn by the State Treasurer on its behalf; (b) pay interest to the
State on all moneys paid by the State from the date the moneys are drawn to the date they
are repaid at a rate not less than the average prime rate for national money center banks
plus five percent (5%); and (c) pay all penalties required by the Act.
(f) The State Treasurer shall establish the reimbursement interest rate after
considering the circumstances of any prior draws by the Municipality on the State,
market interest and penalty rates, and the cost of funds, if any, that were required to be
borrowed by the State to make Repayment Installments.
(g) The State Treasurer may, after considering the circumstances giving rise to the
failure of the Municipality to make its Repayment Installments in a timely manner,
impose on the Municipality a penalty of not more than five percent (5%) of the amount
paid by the State for each instance in which a payment by the State is made.
(h) (i) If the State Treasurer determines that amounts obtained under this section
will not reimburse the State in full within one (1) year from the State's payment
of the Municipality's scheduled Repayment Installments, the State Treasurer
shall, subject to clause (ii) hereof, pursue any legal action, including mandamus,
against the Municipality to compel it to take any action required by the Act,
including:
(1) To the extent permitted by law to levy ad valorem taxes to pay the
Repayment Installments and to provide other legally available funds to
pay Repayment Installments when due; and
(2) Meet its repayment obligations to the State.
(ii) In pursuing its rights under paragraph (i) of this subsection (h), the State
shall have the same substantive and procedural rights as would a holder of this
Loan Agreement.
(iii) The attorney general shall assist the State Treasurer in these duties.
(iv) The Municipality shall pay the attorney's fees, expenses and costs of the
State Treasurer and the State attorney general.
ARTICLE IV—SECURITY
Section 4.1 Pledge of Full Faith and Credit and Tax Revenues. The full faith and credit and
the proceeds of the taxes levied upon all taxable property in the Municipality are hereby pledged
for the prompt payment of the Repayment Installments and other amounts due hereunder as the
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same become due and the tax levies to that end provided in Section 4.2 hereof shall be in full force
and effect, and forever remain so until the Repayment Installments shall have been fully paid,
satisfied and discharged, except as hereinbefore provided, and any collection fees or charges made
in connection with the Repayment Installments are to be paid by the Municipality.
Notwithstanding this Section, the Municipality also consents to the sales tax and property tax
intercept set forth in Section 3.6 herein and in Section 67-8727, Idaho Code, as amended.
Section 4.2 Levy of Taxes. In accordance with the provisions of applicable law, including the
Bond Resolution, there shall be levied on all taxable property in the Municipality, in addition to all
other taxes, a direct annual ad valorem tax in an amount sufficient together with other legally
available funds to meet the payment of the Repayment Installments as the same mature and other
amounts due under this Agreement and to constitute a sinking fund for the payment thereof.
Said taxes in each of said years shall be levied, assessed, certified, extended, and collected
by the proper officers and at the times, all as fixed by law, and as other taxes are levied, assessed,
certified, extended, and collected in, for and by the Municipality and by the same officers thereof
and are hereby appropriated for the purpose of paying the Repayment Installments and other
amounts due hereunder until the Repayment Installments and other amounts due hereunder shall be
fully paid.
Repayment Installments falling due at any time when the proceeds of said tax levy may not
be available shall be paid from other funds of the Municipality and shall be reimbursed from the
proceeds of said taxes or other legally available funds or revenues when said taxes or revenues
shall have been collected. Said taxes in each of the several years shall be certified as being taxes
necessary to be levied on all of the taxable property in the Municipality for the purpose of paying
the Repayment Installments as the same become due. Said taxes when collected shall be placed in
the Bond Fund and shall be used for no other purpose than for the payment of the Repayment
Installments as the same become due, so long as any of the Repayment Installments remain
outstanding and unpaid, but nothing herein contained shall be construed to prevent the
Municipality from paying the Repayment Installments from any other funds in its hands and
available for that purpose, or to prevent the Municipality from levying any further or additional
taxes which may be necessary to fully pay the Repayment Installments.
ARTICLE V - SPECIAL COVENANTS AND AGREEMENTS
Section 5.1 Punctual Payment. The Municipality will punctually pay all Repayment
Installments in strict conformity with the terms hereof and will faithfully satisfy, observe and
perform all agreements, conditions, covenants and terms hereof.
Section 5.2 Legal Existence. The Municipality will use all means legally available to maintain
its existence.
Section 5.3 Tax Exempt Status of Bonds.
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(a) It is the intention of the parties hereto that interest on the Bonds shall be and remain
excluded from gross income for federal income tax purposes. To that end, the covenants
and agreements of the Authority and the Municipality in this Section and in the Tax
Certificate are for the benefit of the Trustee and each and every person who at any time will
be a holder of the Bonds. Without limiting the generality of the foregoing, the
Municipality and the Authority agree that there shall be paid from time to time the
"Municipality's Share of all amounts required to be rebated to the United States pursuant
to the rebate requirement (the "Rebate Requirement") under Section 148 of the Code and
the Tax Certificate. The "Municipality's Share" means the amount of the Rebate
Requirement relating to the Municipal Bond, determined as specified in the Tax
Certificate, including (i) treating as the yield on the Municipal Bond the yield on the
Authority's "Series 2013 Bonds" allocated to the Municipal Bond and (ii) treating any
amounts held by the Authority and allocable to the Municipal Bond as proceeds of the
Municipal Bond. This covenant shall survive payment in full or defeasance of the Bonds.
The Municipality specifically covenants to pay or cause to be paid for and on behalf of
the Authority to the United States at the times and in the amounts determined under
Section 7.03 of the Trust Agreement the Municipality's Share of the Rebate Requirement
as described in the Tax Certificate and the Trust Agreement. The Authority shall not be
liable to make any such payment except from funds provided by the Municipality for
such purpose.
(b) The Authority covenants and agrees that it has not taken and will not take any
action which results in interest to be paid on the Bonds being included in gross income of
the holders of the Bonds for federal income tax purposes, and the Municipality covenants
and agrees that it has not taken or permitted to be taken and will not take or permit to be
taken any action which will cause the interest on the Bonds to become includable in gross
income for federal income tax purposes. The Municipality acknowledges having read
Section 7.03 of the Trust Agreement and agrees to perform all duties imposed on it by
such Section, by this Section and by the Tax Certificate. Insofar as Section 7.03 of the
Trust Agreement and the Tax Certificate impose duties and responsibilities on the
Authority or the Municipality, they are specifically incorporated herein by reference.
(c) Notwithstanding any provision of this Section 5.3 or Section 7.03 of the Trust
Agreement, if the Municipality shall provide to the Authority and the Trustee an Opinion
of Bond Counsel to the effect that any specified action required under this Section 5.3 and
Section 7.03 of the Trust Agreement is no longer required or that some further or different
action is required to maintain the exclusion from federal income tax of interest on the
Bonds or Municipal Bonds, the Municipality, the Trustee and the Authority may
conclusively rely on such opinion in complying with the requirements of this Section, and
the covenants set forth in this Section 5.3 shall be deemed to be modified to that extent.
(d) The Municipality agrees to comply with the Authority's Post Issuance Tax
Compliance Procedures, the current form of which is attached hereto as Exhibit F.
Section 5.4 Notices to Trustee and Authority. The Municipality hereby agrees to provide the
Trustee and the Authority with notice of any event of which it has knowledge which, with the
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passage of time or the giving of notice, would be an Event of Default, such notice to include a
description of the nature of such event and what steps are being taken to remedy such Event of
Default.
Section 5.5 Continuing Disclosure. The Municipality hereby covenants and agrees to comply
with the continuing disclosure requirements for the Bonds as promulgated under Rule 15c2-12,
as it may from time to time hereafter be amended or supplemented, including those requirements
set forth below (hereafter the "Disclosure Agreement"). Notwithstanding any other provision of
this Loan Agreement, failure of the Municipality to comply with the requirements of Rule 15c2-
12 applicable to the Bonds, as it may from time to time hereafter be amended or supplemented,
shall not be considered an Event of Default hereunder or under the Trust Agreement; however, any
Bondholder or beneficial owner of any Bonds may take such actions as may be necessary and
appropriate, including seeking mandate or specific performance by court order, to cause the
Municipality to comply with its obligations pursuant to this Section 5.5.
(a) Definitions. In addition to the definitions set forth in the Trust Agreement, which
apply to any capitalized term used in this Section unless otherwise defined in this Section,
the following capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the Municipality
pursuant to, and as described in, Sections 5.5(b) and 5.5(c).
"Beneficial Owner" shall mean any person who has the power, directly or
indirectly, to vote or consent with respect to, or dispose of ownership of, any of the
Bonds (including persons holding Bonds through nominees, depositories or other
intermediaries).
"Disclosure Representative" shall mean the Treasurer of the Municipality or his or
her designee, or such other officer or employee as the Municipality shall designate
in writing to the Trustee from time to time.
"Dissemination Agent" shall mean the Trustee, acting in its capacity as
Dissemination Agent hereunder, or any successor Dissemination Agent designated
in writing by the Municipality and which has filed with the Trustee a written
acceptance of such designation.
"EMMA" shall mean the Electronic Municipal Market Access System of the
Municipal Securities Rule Making Board as provided for by the SEC, found at
www.emma.msrb.org.
"Listed Events" shall mean any of the events listed in Section 5.5(d)hereof.
"Owner" means an owner of the Bonds and includes Beneficial Owners.
"Participating Underwriter" shall mean any of the original underwriters of the
Bonds required to comply with the Rule in connection with offering of the Bonds.
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"Repository" shall mean the Municipal Securities Rulemaking Board ("MSRB")
or any other entity designated or authorized by the SEC to receive reports
pursuant to the Rule. Until otherwise designated by the MSRB or the SEC, filings
with the MSRB are to be made through EMMA.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as the same may be
amended from time to time.
"SEC" means the Securities and Exchange Commission.
(b) Provision of Annual Reports.
(i) The Municipality shall, with the assistance of the Dissemination Agent,
not later than six months after the end of the Municipality's fiscal year (presently
September 30) commencing with the report for the 2013 Fiscal Year and all
subsequent Fiscal Years, provide to the Repository and the Authority an Annual
Report which is consistent with the requirements of Section 5.5(c) hereof. The
filing shall be transmitted by the Dissemination Agent to the Repository and each
Annual Report must be submitted in electronic format, accompanied by such
identifying information as is prescribed by the Repository, and may include by
reference other information as provided in Section 5.5(c) hereof; provided that the
audited financial statements of the Municipality may be submitted separately from
the balance of the Annual Report and later than the date required above for the
filing of the Annual Report if they are not available by that date. If the
Municipality's fiscal year changes, it shall give notice of such change in the same
manner as for a Listed Event under Section 5.5(d)(vi).
(ii) Not later than fifteen (15) Business Days prior to the date specified in
subsection (b)(i) for providing the Annual Report to the Repository, the
Municipality shall provide the Annual Report, to the Dissemination Agent, to the
Trustee (if the trustee is not the Dissemination Agent) and to the Authority. If by
fifteen (15) Business Days prior to the date specified in subsection (b)(i), the
Dissemination Agent has not received a copy of the Annual Report, the
Dissemination Agent shall contact the Municipality to determine if the
Municipality is unable to provide or cause to be provided the Annual Report to the
Dissemination Agent in compliance with the first sentence of this subsection (ii).
Failure to provide the Annual Report to the Dissemination Agent by said date
may subject the Municipality to late fees in the amount as listed on Exhibit E and
payment of any expenses of the Trustee or the Authority in enforcing this
provision. If the Municipality has prior loans with the Authority, then those loans
shall be subject to the same provisions.
(iii) If the Dissemination Agent is unable to verify that an Annual Report has
been provided to the Repository by the date required in subsection (i) the
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Dissemination Agent shall send a notice to the Repository in substantially the
form as Exhibit D2 attached.
(iv) The Dissemination Agent(currently the Trustee) shall:
(1) determine each year prior to the date for providing the Annual
Report the name and address of the Repository; and
(2) file a report with the Municipality, the Authority and the Trustee
(if the Dissemination Agent is not the Trustee) certifying that the Annual
Report has been provided pursuant to this Disclosure Agreement, stating
the date it was provided to the Repository.
(c) Content of Annual Reports. The Municipality's Annual Report shall contain or
include by reference the following:
(i) The audited financial statements for the Municipality for the most recently
ended fiscal year, currently prepared, to the extent feasible, in substantial
conformance with Generally Accepted Accounting Principles applicable from time
to time to governmental entities, with any permitted exception and an adopted
budget for the then current fiscal year.
(ii) An Annual Report in the form attached hereto as Exhibit D1 as to
outstanding debt, litigation, compliance with regulatory matters and related items.
(d) Reporting of Significant Events.
(i) Pursuant to the provisions of this Section 5, the Municipality shall give or
cause to be given, notice of the occurrence of any of the following Events with
respect to the Bonds in a timely manner not more than ten (10) Business Days
after the event:
(1) Principal and interest payment delinquencies.
(2) Unscheduled draws on debt service reserves reflecting financial
difficulties;
(3) Unscheduled draws on credit enhancements reflecting financial
difficulties;
(4) Substitution of credit or liquidity providers, or their failure to
perform;
(5) Adverse tax opinions or the issuance by the Internal Revenue
Service of proposed or final determinations of taxability, Notices of
Proposed Issue (IRS Form 5701-TEB) or other material notices or
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determinations with respect to the tax status of the Bonds;
(6) Defeasances;
(7) Tender offers;
(8) Bankruptcy, insolvency, receivership or similar proceedings;
(9) Rating changes;
(ii) Pursuant to the provisions of this Section 5.5, the Municipality shall give
or cause to be given, notice of the occurrence of any of the following Events with
respect to the Bonds in a timely manner not more than ten (10) Business Days
after the event, if material:
(1) Mergers, consolidations, acquisitions, the sale of all or
substantially all of the assets of the obligated persons or their termination.
(2) Appointment of a successor or additional trustee or the change of
the name of trustee;
(3) Non-payment related defaults;
(4) Modifications to the rights of the owners of the Bonds;
(5) Bond calls;
(6) Release, substitution or sale of property securing repayment of the
Bonds.
(iii) The Dissemination Agent shall, within one (1) Business Day of obtaining
actual knowledge of the occurrence of any of the Listed Events, contact the
Disclosure Representative, inform such person of the event, and request that the
Municipality promptly notify the Dissemination Agent in writing whether or not
to report the event pursuant to subsection (vii). The Dissemination Agent shall
have no duty or obligation to determine whether such Listed Events reflect
financial difficulty or to determine the materiality of such Listed Events when
informing the Disclosure Representative of such Listed Event.
(iv) Whenever the Municipality obtains knowledge of the occurrence of a
Listed Event under (ii) whether because of a notice from the Dissemination Agent
pursuant to subsection (iii) or otherwise, the Municipality shall as soon as
possible determine if such event would be material under applicable federal
securities laws.
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(v) If the Municipality has determined that knowledge of the occurrence of a
Listed Event under (ii) would be material under applicable federal securities laws,
the Municipality shall promptly notify the Dissemination Agent in writing. Such
notice shall instruct the Dissemination Agent to report the occurrence pursuant to
subsection(vii).
(vi) If in response to a request under subsection (iii), the Municipality
determines that the Listed Event would not be material under applicable federal
securities laws, the Municipality shall so notify the Dissemination Agent in
writing and instruct the Dissemination Agent not to report the occurrence
pursuant to subsection (vii).
(vii) If the Dissemination Agent has been instructed by the Municipality to
report the occurrence of a Listed Event, the Dissemination Agent shall file a
notice of such occurrence with the Repository.
(e) Termination of Reporting Obligation. The Municipality's obligations under this
Disclosure Agreement shall terminate upon the legal defeasance or discharge of this Loan
Agreement in accordance with Section 8.1. If such termination occurs prior to the final
maturity of the Municipal Bonds, the Municipality shall give notice of such termination in
the same manner as for a Listed Event under Section 5.5(d)(vi).
(f) Dissemination Agent. The Municipality may, from time to time, appoint or engage
a Dissemination Agent to assist it in carrying out its obligations under this Disclosure
Agreement and shall pay the fees and costs thereof, and may discharge any such Agent,
with or without appointing a successor Dissemination Agent. The Dissemination Agent
shall not be responsible in any manner for the content of any notice or report prepared by
the Municipality pursuant to this Disclosure Agreement. The initial Dissemination Agent
shall be the Trustee. It is understood and agreed that any information that the
Dissemination Agent may be instructed to file with the Municipal Securities Rulemaking
Board and the Repository shall be prepared and provided to it by the Municipality. The
fact that the Dissemination Agent or any affiliate thereof may have any fiduciary or
banking relationship with the Municipality shall not be construed to mean that the
Dissemination Agent has actual knowledge of any event or condition except as may be
provided by written notice from the Municipality or the Authority.
(g) Amendment; Waiver. Notwithstanding any other provision of this Section 5.5,
the Municipality and the Authority (or upon assignment of this Loan Agreement by the
Authority, the Trustee) may amend this Section 5.5 (and the Trustee shall agree to any
amendment so reasonably requested by the Municipality, to the extent that such
amendment does not adversely affect the Trustee's or Dissemination Agent's rights,
protections or duties), and any provision of this Section 5.5 may be waived, provided that
the following conditions are satisfied:
(i) If the amendment or waiver relates to the provisions of Section 5.5(b)(i),
Section 5.5(c), or Section 5.5(d)(i), it may only be made in connection with a
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change in circumstances that arises from a change in legal requirements, change in
law, or change in the identity, nature or status of an obligated person with respect to
the Bonds, or the type of business conducted;
(ii) The undertaking, as amended or taking into account such waiver, would, in
the opinion of nationally recognized bond counsel, have complied with the
requirements of the Rule at the time of the original issuance of the Bonds, after
taking into account any amendments or interpretations of the Rule, as well as any
change in circumstances; and
(iii) The amendment or waiver either (1) is approved by the Owners of the
Bonds in the same manner as provided in the Trust Agreement for amendments to
the Trust Agreement with the consent of Owners, or (2) does not, in the opinion of
nationally recognized bond counsel, materially impair the interests of the Owners
and Beneficial Owners of the Bonds.
In the event of any amendment or waiver of a provision of this Section 5.5, the
Municipality shall describe such amendment in the next Annual Report, and shall include, as
applicable, a narrative explanation of the reason for the amendment or waiver and its impact on
the type (or, in the case of a change of accounting principles, on the presentation) of financial
information or operating data being presented by the Municipality. In addition, if the amendment
relates to the accounting principles to be followed in preparing financial statements, (1) notice of
such change shall be given in the same manner as for a Listed Event under Section 5.5(d)(vi), and
(2) the Annual Report for the year in which the change is made should present a comparison (in
narrative form and also, if feasible, in quantitative form) between the financial statements as
prepared on the basis of the new accounting principles and those prepared on the basis of the
former accounting principles.
(h) Additional Information. Nothing in this Section 5.5 shall be deemed to prevent the
Municipality from disseminating any other information, using the means of dissemination
set forth in this Section 5.5 or any other means of communication, or including any other
information in any Annual Report or notice of occurrence of a Listed Event, in addition to
that which is required by this Section 5.5. If the Municipality chooses to include any
information in any Annual Report or notice of occurrence of a Listed Event in addition to
that which is specifically required by this Section 5.5, the Municipality shall have no
obligation under this Section 5.5 to update such information or include it in any future
Annual Report or notice of occurrence of a Listed Event.
(i) Duties, Immunities and Liabilities of Trustee and Dissemination Agent. The
Dissemination Agent (if other than the Trustee or the Trustee in its capacity as
Dissemination Agent) shall have only such duties as are specifically set forth in this Section
5.5, and the Municipality agrees to indemnify and save the Dissemination Agent, its
officers, directors, employees and agents, harmless against any loss, expense and liabilities
which it may incur arising out of or in the exercise or performance of its powers and duties
hereunder, including the costs and expenses (including attorneys fees and expenses) of
defending against any claim of liability, but excluding liabilities due to the Dissemination
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Agent's negligence or willful misconduct. The obligations of the Municipality under this
Section shall survive resignation or removal of the Dissemination Agent and payment of
this Loan Agreement. The Dissemination Agent shall have the same rights and protections
as afforded to it in its role as trustee under the Trust Agreement.
(j) Notices. Any notices or communications to or among any of the parties to this
Section 5.5 may be given at their addresses as set forth in the Trust Agreement and this
Loan Agreement.
(k) Beneficiaries. This Section 5.5 shall inure solely to the benefit of the Municipality,
the Authority, the Trustee, the Dissemination Agent, the Participating Underwriters,
Beneficial Owners and Owners from time to time of the Bonds, and shall create no rights in
any other person or entity.
Section 5.6 Books of Record and Accounts; Financial Statements. The Municipality will keep
proper books of record and accounts in which complete and correct entries shall be made of all
transactions relating to the Repayment Installments and the Bond Fund, and upon request will
provide information concerning such books of record and accounts to the Trustee.
The Municipality will prepare annually, not later than one hundred eighty (180) days
after the close of each Fiscal Year, so long as any Repayment Installments remain unpaid, an
audited financial statement of the Municipality relating to the Bond Fund and all other accounts or
funds established pursuant hereto for the preceding Fiscal Year prepared by an Independent
Certified Public Accountant, showing the balances in each such account or fund as of the
beginning of such Fiscal Year and all deposits in and withdrawals from each such account or fund
during such Fiscal Year and the balances in each such account or fund as of the end of such Fiscal
Year, which audited financial statement shall include a statement as to the manner and extent to
which the Municipality has complied with the provisions hereof. Failure to furnish said audited
financial statements within said time may subject the Municipality to late charges by the
Authority. The Municipality will furnish a copy of such audited financial statement to the
Trustee upon request, and will furnish such reasonable number of copies thereof to investment
bankers, security dealers and others interested in the Bonds.
Section 5.7 Delivery of Closing Documents. The Municipality agrees to execute and deliver
on the Closing Date the certificates attached hereto as Exhibit C.
Section 5.8 Authority Fees. The Municipality is paying to the Authority an Application Fee of
$500.00 which may be credited against the Authority Fee. The Municipality shall pay to the
Authority the Authority Fee at the closing of the Loan and Annual Expense Charges each year.
ARTICLE VI -EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Events of Default. Any one of the following which occurs and continues shall
constitute an Event of Default pursuant to this Loan Agreement:
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(a) failure by the Municipality to transmit to the Trustee any Repayment Installment by
the 15th day prior to the respective Repayment Installment Date; or
(b) failure of the Municipality to observe and perform any covenant, condition or
agreement on its part required to be observed or performed by this Loan Agreement,
other than making the payments referred to in (a) above, which continues for a period of
60 days after written notice, which notice shall specify such failure and request that it be
remedied, given to the Municipality by the Authority or the Trustee, unless the Authority
and the Trustee (at the direction of the Authority) shall agree in writing to an extension of
such time; provided, however, that if the failure stated in the notice cannot be corrected
within such period, the Authority and the Trustee (at the direction of the Authority) will not
unreasonably withhold their consent to an extension of such time if corrective action is
instituted within such period and diligently pursued until the default is corrected
The provisions of subsection(b) of this Section are subject to the limitation that the
Municipality shall not be deemed in default if and so long as the Municipality is unable to carry
out its agreements hereunder by reason of strikes, lockouts or other industrial disturbances; acts
of public enemies; orders of any kind of the government of the United States or of the State of
Idaho or any of their departments, agencies, or officials, or any civil or military authority;
insurrections, riots, epidemics, landslides; lightning; earthquake; fire; hurricanes; storms; floods;
washouts; droughts; arrests; restraint of government and people; civil disturbances; explosions;
breakage or accident to machinery, transmission pipes or canals; partial or entire failure of
utilities; or any other cause or event not reasonably within the control of the Municipality; it
being agreed that the settlement of strikes, lockouts and other industrial disturbances shall be
entirely within the discretion of the Municipality, and the Municipality shall not be required to
make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands
of the opposing party or parties when such course is, in the judgment of the Municipality,
unfavorable to the Municipality. This limitation shall not apply to any default under subsection
(a) of this Section.
Section 6.2 Remedies On Default. Whenever any Event of Default shall have occurred and shall
continue, the following remedies may be pursued (with respect to the Trustee, subject to its rights
and protections under the Trust Agreement):
(a) The Trustee shall have access to and the right to inspect, examine and make copies
of the books and records and any and all accounts and data of the Municipality.
(b) The Authority or the Trustee may take whatever action at law or in equity as may
be necessary or desirable to collect the payments and other amounts then due and
thereafter to become due or to enforce performance and observance of any obligation,
agreement or covenant of the Municipality under this Loan Agreement including without
limitation taking the actions under Section 3.6 hereof.
In case the Trustee or the Authority shall have proceeded to enforce its rights under this
Loan Agreement and such proceedings shall have been discontinued or abandoned for any
reason or shall have been determined adversely to the Trustee or the Authority, then, and in
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every such case, the Municipality, the Trustee and the Authority shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and powers of the
Municipality, the Trustee and the Authority shall continue as though no such action had been
taken (provided, however, that any settlement of such proceedings duly entered into by the
Authority, the Trustee or the Municipality shall not be disturbed by reason of this provision).
In case the Municipality shall fail forthwith to pay amounts due by reason of this
Section 6.2 upon demand of the Trustee, the Trustee shall be entitled and empowered to institute
any action or proceeding at law or in equity for the collection of the sums so due and unpaid, and
may prosecute any such action or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Municipality and collect in the manner provided by law
the moneys adjudged or decreed to be payable.
In case proceedings shall be pending for the bankruptcy or for the reorganization of the
Municipality under the federal bankruptcy laws or any other applicable law, or in case a receiver
or trustee shall have been appointed for the property of the Municipality or in the case of any
other similar judicial proceedings relative to the Municipality, or the creditors or property of the
Municipality, then the Trustee shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole amount owing and
unpaid pursuant to this Loan Agreement and, in case of any judicial proceedings, to file such
proofs of claim and other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee allowed in such judicial proceedings relative to the Municipality, its
creditors or its property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute such amounts as provided in the Trust Agreement
after the deduction of its charges and expenses. Any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized to make such payments to the Trustee, and to pay to the
Trustee any amount due it for compensation and expenses, including expenses and fees of counsel
incurred by it up to the date of such distribution.
Section 6.3 Agreement to Pay Attorneys' Fees and Expenses. In the event the Municipality
should default under any of the provisions of this Loan Agreement and the Authority or the
Trustee should employ attorneys or incur other expenses for the collection of the payments due
under this Loan Agreement or the enforcement of performance or observance of any obligation
or agreement on the part of the Municipality herein contained, the Municipality agrees to pay to
the Authority or the Trustee the reasonable fees and expenses of such attorneys and such other
expenses so incurred by the Authority or the Trustee.
Section 6.4 No Remedy Exclusive. No remedy herein conferred upon or reserved to the
Authority or the Trustee is intended to be exclusive of any other available remedy or remedies, but
each and every such remedy shall be cumulative and shall be in addition to every other remedy
given under this Loan Agreement or now or hereafter existing at law or in equity or by statute. No
delay or omission to exercise any right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In order to entitle the
Authority or the Trustee to exercise any remedy reserved to it in this Article, it shall not be
necessary to give any notice, other than such notice as may be herein expressly required. Such
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rights and remedies as are given the Authority hereunder shall also extend to the Trustee, and the
Trustee and the holders of the Bonds shall be deemed third party beneficiaries of all covenants and
agreements herein contained.
Section 6.5 No Additional Waiver Implied by One Waiver. In the event any agreement or
covenant contained in this Loan Agreement should be breached by the Municipality and thereafter
waived by the Authority or the Trustee, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other breach hereunder.
Section 6.6 No Cross Default. The Municipality shall not be liable for the failure of any other
municipality to make payments with respect to the Bonds. The occurrence of any Event of
Default of any other municipality under such municipality's loan agreement shall not constitute
an Event of Default of the Municipality under this Loan Agreement.
ARTICLE VII - PREPAYMENT
Section 7.1 Redemption of Bonds with Prepayment Moneys. By virtue of the assignment of
certain of the rights of the Authority under this Loan Agreement to the Trustee as is provided in
Section 3.4 hereof, the Municipality agrees to and shall pay directly to the Trustee any amount
permitted or required to be paid by it under this Article VII. The Trustee shall use the moneys so
paid to it by the Municipality to effect redemption of the Bonds as set forth in this Article on the
date specified for such redemption pursuant to Section 7.4 hereof. The principal component of
the Repayment Installments to be prepaid shall correspond in amount and maturity date to the
Bonds related to this Loan Agreement.
Section 7.2 Options to Prepay Installments. The Repayment Installments specified in
Schedule 1 attached hereto are subject to prepayment at the option of the Municipality on the
dates and in the amounts as set forth in Schedule 1 which shall be consistent with the terms for
redemption of the Authority's Bonds.
Section 7.3 Amount of Prepayment. In the case of a prepayment, of the entire amount due
hereunder pursuant to Section 7.2 hereof, the amount to be paid shall be a sum sufficient,
together with other funds (as such sufficiency is evidenced by a verification report of an
Independent Certified Public Accountant) and the yield on any securities deposited with the
Trustee and available for such purpose, to pay all Repayment Installments thereafter due. In any
event, any prepayment of Repayment Installments shall include sufficient funds to pay all
principal, accrued interest, premium, if any, and other costs related to the redemption of the
Authority's Bonds to be redeemed as a result of such prepayment.
Section 7.4 Notice of Prepayment. The Municipality shall give sixty days' prior written notice
to the Authority and the Trustee specifying the date upon which any prepayment pursuant to this
Article VII will be made. The Authority and the Trustee, at the request of the Municipality, shall
forthwith take all steps necessary under the applicable provisions of the Trust Agreement (except
that the Authority shall not be required to make payment of any money required for such
redemption) to effect redemption of the part of the then outstanding Bonds related to this Loan
Agreement, as the case may be, on the earliest practicable date thereafter, on or after the
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proposed prepayment date, on which such redemption may be made under applicable provisions
of the Trust Agreement.
Notwithstanding anything to the contrary in this Loan Agreement, each notice
contemplated in this Section 7.4 that is given with respect to an optional prepayment pursuant to
Section 7.2 hereof may state that it is subject to and conditional upon receipt by the Trustee on or
prior to the proposed prepayment date of amounts sufficient to effect such prepayment and, if a
notice so states, such notice shall be of no force and effect and the prepayment need not be made
and the Repayment Installments will not become due and payable on the proposed prepayment
date unless such amounts are so received on or prior to the proposed prepayment date.
ARTICLE VIII -DISCHARGE OF OBLIGATIONS
Section 8.1 Discharge and Defeasance of Obligations.
(a) The Repayment Installments shall be discharged to the extent the Bonds are
discharged under the Trust Agreement. The principal components of the Repayment
Installments to be discharged shall correspond in amount and maturity date to the Bonds
related to this Loan Agreement.
(b) If the Municipality shall pay or cause to be paid or there shall otherwise be paid to
the Trustee all of the Repayment Installments at the times and in the manner stipulated
herein, and the Municipality shall pay in full all other amounts due hereunder, then all
agreements, covenants and other obligations of the Municipality hereunder shall
thereupon cease, terminate and become void and be discharged and satisfied. In such
event, the Trustee shall execute and deliver to the Municipality all such instruments as
may be necessary or desirable and prepared by or on behalf of the Municipality to
evidence such discharge and satisfaction.
(c) Any Repayment Installments shall prior to the Repayment Installment Date or
prepayment date thereof be deemed to have been paid within the meaning of and with the
effect expressed in subsection (b) of this Section if (1) in case any of such Repayment
Installments are to be prepaid, the Municipality shall have given to the Authority and
Trustee in form satisfactory to it irrevocable instructions to provide notice in accordance
with this Loan Agreement, (2) there shall have been deposited with the Trustee (A)
money in an amount which shall be sufficient and/or (B) Government Securities, the
interest on and principal of which when paid will provide money which, together with the
money, if any, deposited with the Trustee at the same time, shall be sufficient, in the
opinion of an Independent Certified Public Accountant, to transmit and pay when due the
Repayment Installments on and prior to the Repayment Installment Dates or prepayment
date thereof, as the case may be, and the prepayment premiums, if any, on such
Repayment Installments, and (3) an Opinion of Counsel to the effect that such treatment
will not adversely affect the tax-exempt status of interest on any Bonds hereunder,
provided that this Agreement shall not be discharged and satisfied until all Repayment
Installments have been paid or are deemed to have been paid as provided above.
LOAN AGREEMENT—PAGE 21
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ARTICLE IX -NON-LIABILITY OF AUTHORITY;
EXPENSES; INDEMNIFICATION
Section 9.1 Non-Liability of Authority. The Authority shall not be obligated to pay the principal
of, or premium, if any, or interest on the Bonds, or to discharge any other financial liability
(including but not limited to financial liability under Section 5.6 hereof) in connection herewith,
except from, and to the extent of, payments made by the Municipality under this Loan
Agreement, or through the State intercept provided under Section 3.6 of this Loan Agreement
and Section 67-8727, Idaho Code, as amended. The Municipality hereby acknowledges that the
Authority's sole source of moneys to repay the Bonds will be provided by the payments made by
the Municipality pursuant to this Loan Agreement (excluding payments to the Authority or the
Trustee pursuant to Section 5.8 of this Loan Agreement) and payments from other participating
Municipalities and the State intercept provided under Section 67-8727, Idaho Code, as amended.
Section 9.2 Indemnification. The Municipality releases the Authority and the Trustee from, and
covenants and agrees that neither the Authority nor the Trustee shall be liable for, and covenants
and agrees, to the extent permitted by law, to indemnify, defend and hold harmless the Authority
and the Trustee and their officers, directors, elected officials, employees and agents from and
against, any and all losses, claims, damages, liabilities or expenses, of every conceivable kind,
character and nature whatsoever arising out of, resulting from or in any way connected with the
financing or refinancing of the Project, or the conditions, occupancy, use, possession, conduct or
management of, or work done in or about, or from the planning, design, acquisition, installation or
construction of the Project or any part thereof.
ARTICLE X - MISCELLANEOUS
Section 10.1 Notices. All notices, certificates or other communications shall be deemed
sufficiently given on the second day following the day on which the same have been mailed by
first class mail, postage prepaid, addressed to the Authority, the Municipality or the Trustee, as the
case may be. Notices for the Municipality shall be sent to the address specified in Schedule 1
attached hereto. Notices for the Authority and the Trustee shall be sent to the addresses set forth
in the Trust Agreement. A duplicate copy of each notice, certificate or other communication
given hereunder by either the Authority or the Municipality to the other shall also be given to the
Trustee. The Authority, the Municipality and the Trustee may, by notice given hereunder,
designate any different addresses to which subsequent notices, certificates or other
communications shall be sent.
Section 10.2 Severability. If any provision of this Loan Agreement shall be held or deemed to
be, or shall in fact be, illegal, inoperative or unenforceable, the same shall not affect any other
provision or provisions herein contained or render the same invalid, inoperative, or unenforceable
to any extent whatever.
Section 10.3 Execution of Counterparts. This Loan Agreement may be simultaneously
executed in several counterparts, each of which shall be an original and all of which shall constitute
but one and the same instrument.
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Section 10.4 Amendments, Changes and Modifications. Subsequent to the initial issuance of
Bonds and prior to their payment in full, or provision for such payment having been made as
provided in the Trust Agreement, this Loan Agreement may be amended, changed or modified as
set forth in Article X of the Trust Agreement.
Section 10.5 Governing Law. This Loan Agreement shall be governed exclusively by and
construed in accordance with the applicable laws of the State of Idaho.
Section 10.6 Authorized Municipality Representative. Whenever under the provisions of this
Loan Agreement the approval of the Municipality is required or the Authority or the Trustee is
required to take some action at the request of the Municipality, such approval or such request
shall be given on behalf of the Municipality by an Authorized Municipality Representative, and
the Authority and the Trustee shall be authorized to act on any such approval or request and
neither party hereto shall have any complaint against the other or against the Trustee as a result of
any such action taken.
Section 10.7 Term of the Loan Agreement. This Loan Agreement shall be in full force and
effect from the date hereof and shall continue in effect as long as the Municipal Bond is
outstanding; provided, however, that the rights of the Trustee and the Authority under Section 9.2
hereof shall survive the termination of this Loan Agreement, the retirement of the Bonds and the
removal or resignation of the Trustee. All representations and certifications by the Municipality as
to all matters affecting the tax-exempt status of the Bonds or the Municipality Bond shall survive
the termination of this Loan Agreement.
Section 10.8 Binding Effect. This Loan Agreement shall inure to the benefit of and shall be
binding upon the Authority, the Municipality, the Trustee and their respective successors and
assigns.
Section 10.9. Post Issuance Tax Compliance Procedures of the Authority. The parties hereto
both acknowledge the Post Issuance Tax Compliance Procedures of the Authority attached hereto
as Exhibit F and agree that they will follow and comply with said procedures including without
limitation Borrower's agreement to retention of various records relating to the Loan as set forth in
the said Procedures for the term of the Loan plus three years.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the City of Eagle, Idaho has caused this Loan Agreement to
be executed in its name by its duly authorized officers, and the Idaho Bond Bank Authority has
caused this Loan Agreement to be executed in its name and attested by its duly authorized
officers, all as of the date first above written.
THE CITY OF EAGLE, IDAHO
By
Mayor
[SEAL]
Attest:
Clerk
IDAHO BOND BANK AUTHORITY
By
Executive Director
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SCHEDULE 1: THE CITY OF EAGLE
Prior Obligations N.A.
Date:
Prior Bonds
Amount: N.A.
Municipal Bonds Municipal Bond par amount of $ plus a premium of
Purchase Price: $ less Underwriter's Discount of $ for a
total purchase price of$
Repayment Amount: $ , plus interest.
Prepayment The Repayment Installments coming due on or prior to September 15,
Provisions: 2023, are not subject to prepayment. The Repayment Installments
coming due on and after September 15, 2024, are subject to prepayment,
at the written direction of the Municipality and with the consent of the
Authority, from any moneys deposited with the Trustee, as a whole or in
part on any date on or after September 15, 2023, among such payment
dates as designated by the Authority to the Trustee, at the price of par,
plus accrued interest, if any, to the date of prepayment.
Municipality address: The City of Eagle
660 E. Civic Ln. City of Eagle, ID 83616
Disbursement of 1. $ to the Series 2013B Cost of Issuance Account held
Loan: by the Trustee under the Trust Agreement to pay various costs of
issuance for the Series 2013B Bonds.
2. $ representing the Authority Fee shall be paid to the
Authority from the Series 2013B Cost of Issuance Account.
3. $ to the Project Fund held by the Municipality.
Reserve Fund: Not Applicable.
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EXHIBIT A
Description of the Project
This project consists of the issuance of a Municipal Bond, in the principal amount of
$1,200,000, for the purpose of financing the acquisition of the Municipality's city hall facilities
including related improvements and costs.
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EXHIBIT B
REPAYMENT INSTALLMENTS AND REPAYMENT DATES
(to come)
*Payments must be transmitted to the Trustee 15 days prior to the payment dates listed.
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EXHIBIT C
Municipality Closing Documents
a. Bond Ordinance authorizing the Municipal Bonds and execution of the Loan Agreement.
b. Bond of the Municipality.
c. Loan Agreement, dated as of 1, 2013 between the Municipality and the
Authority.
d. Loan Application.
e. Opinion of Bond Counsel.
f. Tax Certificate of Municipality.
g. General Certificate.
h. Signature and No Litigation Certificate.
i. Receipt for Bond.
j. IRS Form 8038-G.
k. Receipt of Proceeds of Bond.
1. Cash Flows.
m. Certificate of Investigation.
n. Disclosure Certificate.
o. Written Certificate and Request to Trustee.
LOAN AGREEMENT—PAGE 28
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EXHIBIT D-1
Certificate Regarding Annual Financial Information
The undersigned on behalf of the City of Eagle, Idaho (the"Municipality")hereby certifies
in connection with the Loan Agreement dated as of 1, 2013 between the Municipality
and the Idaho Bond Bank Authority(the "Authority")that:
1. The attached financial statements are the true and correct audited financial statements of
the Municipality for the Municipality's fiscal year ended September 30, (the
"Prior Fiscal Year").
2. Unless already stated in the attached financial statements, the debt, and the amount of
debt, of the Municipality (including any debt to the Authority), as of the end of the Prior
Fiscal Year, is as follows:
. (Attach
separate sheet if needed)
3. Except as stated below or on a separate attached sheet, there is not now, and has not been
during the Prior Fiscal Year: (1) any default on the Loan Agreement or other debt of the
Municipality; (2) any litigation filed against the Municipality challenging the validity of
the Loan Agreement; or (3) any citations of non-compliance by any regulatory authority
with respect to the Municipality or city hall facilities:
(Attach separate sheet if needed)
4. There are, and have been during the Prior Fiscal Year, no material "Listed Events," as
referenced in Section 5.5(d) of the Loan Agreement.
Dated this day of , 20_.
THE CITY OF EAGLE, IDAHO
By
Its:
(Treasurer or Finance Director)
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EXHIBIT D-2
Notice to Repository of Failure to File Annual Report
Name of Municipality: The City of Eagle, Idaho
Name of Bond Issue: Idaho Bond Bank Authority Revenue Bonds, Series 2013B
Date of Issuance: June 21, 2013
NOTICE IS HEREBY GIVEN that The City of Eagle, Idaho has not provided an Annual
Report with respect to the above-named Bonds as required by Section 5.5 of the Loan Agreement
dated as of 1, 2013, between the Municipality and the Idaho Bond Bank
Authority. [The Municipality anticipates that the Annual Report will be filed by
.]
Dated:
On behalf of the City of Eagle, Idaho
cc: The City of Eagle, Idaho
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EXHIBIT E
Fees charged by Authority for failure to comply with
Continuing Disclosure Requirements
Due date—3 months after: Lesser of$7,500 or 0.50% of issued amount
3 —6 months after due date: Lesser of$500 or 0.20% of issued amount
6 months —9 months after due date: Lesser of$500 or 0.20% of issued amount
9 months — 1 year after due date: Lesser of$500 or 0.20% of issued amount
Every 3 months after 1 year: Lesser of$500 or 0.20% of issued amount
This schedule will pertain to every outstanding borrowing of the Municipality from the Idaho
Bond Bank Authority.
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EXHIBIT F
Post Issuance Tax Compliance Procedures
(attached)
LOAN AGREEMENT—PAGE 32
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Idaho Bond Bank Authority
Post-Issuance Tax Compliance Procedures
For Tax-Exempt Bonds
February 13, 2013
The purpose of these Post-Issuance Tax Compliance Procedures is to establish policies and
procedures in connection with tax-exempt bonds ("Bonds") issued by the Idaho Bond Bank
Authority (the "Authority") so as to ensure that the Authority complies with all applicable post-
issuance requirements of federal income tax law needed to preserve the tax-exempt status of
the Bonds. The Authority reserves the right to use its discretion as necessary and appropriate to
make exceptions or request additional provisions as circumstances warrant. The Authority also
reserves the right to change these policies and procedures from time to time.
General
Inasmuch as the Authority is a responsible conduit issuer authorizing the issuance of Bonds for
eligible borrowers (each, a "Borrower"), the Authority now identifies post- issuance tax
compliance procedures for all Bonds issued by the Authority for Borrowers, as well as the
Authority's expectations of and requirements for all Borrowers concerning these procedures.
For tax-exempt bonds issued by the Authority, each loan ("Loan") to each Borrower will be a
tax-exempt obligation, as evidenced by an unqualified opinion of bond counsel to each
Borrower. Ultimate responsibility for all matters relating to Authority financings and
refinancings rests with the Authority Executive Director (the "Executive Director"). Ultimate
responsibility for all matters relating to Loans rests with the corresponding officer at each
Borrower.
Post-Issuance Compliance Requirements
External Advisors I Documentation
The Executive Director and other appropriate Authority personnel and the corresponding
personnel of each Borrower shall consult with bond counsel and other legal counsel and
advisors, as needed, throughout the Bond issuance process to identify requirements and to
establish procedures necessary or appropriate so that the Bonds will continue to qualify for the
appropriate tax status. Those requirements and procedures shall be documented in an Authority
and Borrower resolutions, Tax Certificates and / or other documents finalized at or before
issuance of the Bonds. Those requirements and procedures shall include future compliance with
applicable arbitrage rebate requirements and all other applicable post-issuance requirements of
federal tax law throughout (and in some cases beyond) the term of the Bonds or the Loan, as
appropriate.
The Executive Director and other appropriate Authority personnel and the corresponding
personnel of each Borrower also shall consult with bond counsel and other legal counsel and
LOAN AGREEMENT—PAGE 33
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advisors, as needed, following issuance of the Bonds to ensure that all applicable post-issuance
requirements in fact are met. This shall include, without limitation, consultation in connection
with future contracts with respect to the use of Bond-financed assets and future contracts with
respect to the use of output or throughput of Bond- financed assets.
Whenever necessary or appropriate, the Authority shall engage expert advisors (each a "Rebate
Service Provider") to assist in the calculation of arbitrage rebate payable in respect of the
investment of Bond proceeds.
Role of the Authority as Bond Issuer
Unless otherwise provided by Authority resolutions, unexpended Bond proceeds shall be held
by the Authority, and the investment of Bond proceeds shall be managed by the Executive
Director. The Executive Director shall maintain records regarding the investments and
transactions involving Bond proceeds held by the Authority or the Trustee for the bonds.
Funds transferred to the Borrower shall constitute expending Bond proceeds for the purposes of
the Authority. Any investment of funds by the Borrower or Borrower's Trustee is the
responsibility of the Borrower. As such, all record retention and other responsibilities
associated with Borrower proceeds is the sole responsibility of the Borrower.
If an Authority resolution provides for Bond proceeds to be administered by a trustee, the
trustee shall provide regular, periodic (monthly) statements regarding the investments and
transactions involving Bond proceeds.
Arbitrage Rebate and Yield
The Authority will loan out all proceeds to underlying Borrowers at issue. As such, the
requirement for arbitrage rebate and yield calculations will not be applicable.
The Authority will consult annually with bond counsel and tax counsel to confirm the
applicability of arbitrage rebate and yield calculations. If at any time it is determined that these
requirements are applicable, the Authority shall do the following:
• the Authority shall engage the services of a Rebate Service Provider, and the Authority
or the Bond trustee shall deliver periodic statements concerning the investment of Bond
proceeds to the Rebate Service Provider on a prompt basis;
• upon request, the Executive Director and other appropriate Authority personnel shall
provide to the Rebate Service Provider additional documents and information reasonably
requested by the Rebate Service Provider;
• the Executive Director and other appropriate Authority personnel shall monitor efforts
of the Rebate Service Provider and assure payment of required rebate amounts, if any, no later
LOAN AGREEMENT—PAGE 34
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than 60 days after each 5-year anniversary of the issue date of the Bonds, and no later than 60
days after the last Bond of each issue is redeemed; and
• during the construction period of each capital project financed in whole or in part by
Bonds, the Executive Director and other appropriate Authority personnel shall monitor the
investment and expenditure of Bond proceeds and shall consult with the Rebate Service
Provider to determine compliance with any applicable exceptions from the arbitrage rebate
requirements during each 6-month spending period up to 6 months, 18 months or 24 months, as
applicable, following the issue date of the Bonds.
For working capital financings, if any, the Authority shall follow procedures set forth in
the applicable Tax Certificate and/or instructions delivered at bond or note closing.
The Authority shall retain copies of all arbitrage reports and trustee statements as described
below under "Record Keeping Requirements".
Use of Bond Proceeds
Except for the obligation of the Authority to maintain records regarding the Loans made for
Bond proceeds, it is the Authority's policy that the Borrower shall be responsible for:
• monitoring the use of Loan proceeds and the use of Loan-financed assets (e.g.,
facilities, furnishings or equipment) and the use of output or throughput of Loan-financed
assets throughout the term of the Loan (and in some cases beyond the term of the Loan)
to ensure compliance with covenants and restrictions set forth in applicable Authority and
Borrower resolutions and Tax Certificates;
• maintaining records identifying the Loan and the assets or portion of assets that are
financed or refinanced with proceeds of each Loan;
• consulting with Bond Counsel and other professional expert advisers in the review of the
Loan and any contracts or arrangements involving use of Loan-financed facilities to ensure
compliance with all covenants and restrictions set forth in applicable Authority and Borrower
resolutions and Tax Certificates;
• maintaining records regarding the Loan and for any contracts or arrangements involving
the use of Loan-financed facilities as might be necessary or appropriate to document compliance
with all covenants and restrictions set forth in applicable Authority and Borrower resolutions
and Tax Certificates;
• meeting or conferring at least annually with personnel responsible for the Loans and
Loan-financed assets to identify and discuss any existing or planned use of Loan- financed,
assets or output or throughput of Loan-financed assets, to ensure that the Loan and those uses
LOAN AGREEMENT—PAGE 35
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are consistent with all covenants and restrictions set forth in applicable Authority and Borrower
resolutions and Tax Certificates.
• taking timely remedial actions under section 1.141-12 of the Treasury Regulations (or
other remedial actions authorized by the Commissioner of the IRS under Section 1.141-12(h)
of the Regulations) to prevent from being considered "deliberate actions" any actions of the
Borrower which cause the conditions of the private business tests or the private loan financing
test to be met resulting in the Loan becoming a private activity bond.
All relevant records and contracts shall be maintained as described below and in the applicable
Tax Certificate. The Borrower, in the Tax Certificate relating to the Loan and/or other
documents finalized at or before the issuance of the Bonds, shall designate an officer or
employee responsible for the tasks listed above.
Investment of Bond Proceeds
Investment of bond proceeds maintained by the Authority shall remain in compliance with
the arbitrage bond rules and rebate of arbitrage as supervised by the Executive Director.
• Guaranteed investment contracts ("GIC") will be purchased only using the three-
bid "safe harbor" of applicable Treasury regulations, in compliance with fee
limitations on GIC brokers in the regulations.
• Other investments will be purchased only in market transactions.
• Calculations of rebate liability will be performed annually by outside
consultants.
• Rebate payments will be made with Form 8038-T no later than 60 days after
(a) each fifth anniversary of the date of issuance and (b) the final retirement of
the issue. Compliance with rebate requirements will be reported to the bond
trustee and the issuer.
• Identify date for first rebate payment at time of issuance. Enter in records for the
issue.
The investment of all proceeds received by the Borrower is the responsibility of the Borrower to
supervise and maintain compliance with the arbitrage bond rules and rebate of arbitrage.
Record Keeping Requirements
Unless otherwise specified in applicable Authority resolutions or Tax Certificates, the Authority
shall maintain the following documents for the term of each issue of Bonds (including refunding
Bonds, if any) plus at least three years:
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• a copy of the Bond closing transcript(s) and other relevant documentation delivered to
the Authority at or in connection with closing of the issue of Bonds; and
• copies of all records of investments, investment agreements, arbitrage reports and
underlying documents, including trustee statements.
Unless otherwise specified in applicable Authority resolutions or Tax Certificates, it is the
Authority's policy that the Borrower shall be responsible for maintaining the following
documents for the term of each Loan(including refunding obligations, if any) plus at least three
years:
• a copy of all material documents relating to capital expenditures financed or refinanced
by Loan proceeds, including (without limitation) loan documents for the Authority's pooled
loans to municipalities and construction contracts, purchase orders, invoices, trustee
requisitions and payment records, as well as documents relating to costs reimbursed with Loan
proceeds and records identifying the assets or portion of assets that are financed or refinanced
with Loan proceeds;
• a copy of all contracts and arrangements involving private use of Loan-financed assets
or for the private use of output or throughput of Loan-financed assets; and
• copies of all records of investments, investment agreements, arbitrage reports and
underlying documents, including trustee statements.
The Borrower, in the Tax Certificate relating to the Loan and/or other documents finalized at or
before the issuance of the Bonds, shall designate an officer or employee responsible for
retaining the records listed above.
LOAN AGREEMENT—PAGE 37
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SUMMARY OF
ORDINANCE NO. 701
AN ORDINANCE OF THE CITY OF EAGLE, ADA COUNTY, IDAHO, AUTHORIZING
THE ISSUANCE AND SALE OF GENERAL OBLIGATION BONDS, SERIES 2013, IN A
PRINCIPAL AMOUNT NOT TO EXCEED $1,200,000; PROVIDING FOR THE DATE,
FORM, MATURITIES, DESIGNATION, REGISTRATION, AUTHENTICATION, AND
REDEMPTION OF THE BONDS; FIXING THE MAXIMUM RATE OF INTEREST ON THE
BONDS; DESCRIBING THE PROJECT TO BE FINANCED WITH THE PROCEEDS OF
THE BONDS; PROVIDING FOR THE DATE, TIME, AND PLACE OF SALE OF THE
BONDS; PROVIDING FOR THE PAYMENT OF PRINCIPAL OF AND INTEREST ON THE
BONDS BY THE ANNUAL LEVY OF TAXES; ESTABLISHING FUNDS; PROVIDING
COVENANTS WITH RESPECT TO THE TAX-EXEMPT STATUS OF INTEREST ON THE
BONDS; PROVIDING FOR RELATED MATTERS; AND PROVIDING AN EFFECTIVE
DATE
A summary of the principal provisions of Ordinance No. 701 of the City of Eagle, Ada
County, Idaho, adopted on July 23, 2013, is as follows:
Section 1: Defines the terms and phrases used in the Ordinance.
Section 2: Describes the City of Eagle General Obligation Bond, Series 2013 (the
"Bond").
Section 3: Provides for the manner and method of execution of the Bond.
Section 4: Provides for the place and manner of payment of the Bond.
Section 5: Appoints the County Treasurer as Bond Registrar.
Section 6: Provides for the prepayment and defeasance of the Bond.
Section 7: Establishes funds and provides for the Bond.
Section 8: Provides special covenants for the Bond.
Section 9: Approves a Loan Agreement with, and provides for the sale of the Bond
to, the Idaho Bond Bank Authority.
Section 10: Provides for amendments to the Ordinance.
Section 11: Authorizes the Chairman, County Clerk, and County Treasurer to execute
any additional documents necessary to sell and deliver the Bond.
Section 12: States that the Ordinance constitutes a contract with the Registered
Owners of the Bond.
Page 1
Section 13: Provides for severability.
Section 14: Repeals prior inconsistent ordinances, to the extent of any inconsistency.
Section 15: Provides for the publication of the Ordinance or a summary thereof and
the effective date of the Ordinance.
The full text of Ordinance No. 701 is available at the City Clerk's office and will be
provided to any citizen upon personal request during normal office hours.
DATED this 23rd day of July, 2013.
CITY OF EAGLE, I i AHO
ayor
ATTEST:
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Clerk
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CERTIFICATION OF ATTORNEY
I, the undersigned attorney at law and City Attorney for the City of Eagle, Idaho, hereby
certify that I have read the attached summary of Ordinance No. 701 of City of Eagle and that the
same is true and complete and provides adequate notice to the public of the contents of said
Ordinance.
Dated as of the 23rd day of July, 2013.
Attorney at Law —
Page 3
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Valley Times
P.O. Box 1790-Eagle, Idaho 83616 Route to
LEGAL ADVERTISING PROOF OF PUBLICATION
Account: l t.4J Q f Ea Identification: 6wrn rr,,ti oR 0 to%\i .&.. l(o. 70 I
Address: G t,� E. Cc'v �/Luna Run Dates: 7 - a-ft A-0 t 3
Legal Notices
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SUMMARY OF ORDINANCE NO.701
AN ORDINANCE OF THE CITY OF EAGLE,ADA COUNTY,IDAHO,AUTHORIZING THE ISSUANCE I
AND SALE OF GENERAL OBLIGATION BONDS,SERIES 2013,IN A PRINCIPAL AMOUNT NOT TO
EXCEED 41,200,000; PROVIDING FOR THE DATE, FORM, MATURITIES, DESIGNATION, ►eing duly sworn, deposes
REGISTRATION,AUTHENTICATION AND REDEMPTION OF THE BONDS;FIXING THE MAXIMUM le is the Principal Clerk of
RATE OF INTEREST ON THE BONDS; DESCRIBING THE PROJECT TO BE FINANCED WITH THE y newspaper published at
PROCEEDS OF THE BONDS;PROVIDING FOR THE DATE,TIME AND PLACE OF SALE OF THE BONDS; ate of Idaho; that the said
PROVIDING FOR THE PAYMENT OF PRINCIPAL OF AND INTEREST ON THE BONDS BYTHE ANNUAL eral circulation in the said
LEVY OF TAXES;ESTABLISHING FUNDS;PROVIDING COVENANTS WITH RESPECT TO THE TAX-
EXEMPT STATUS OF INTEREST ON THE BONDS; PROVIDING FOR RELATED MATTERS;AND in the vicinity of Meridian,
PROVIDING AN EFFECTIVE DATE. has been uninterruptedly
County during a period of
A summary of the principal provisions of Ordinance No. 701 of the City of Eagle,Ada ve weeks prior to the first
County,Idaho,adopted on July 23, 2013,is as follows: copy of which is attached
e notice was published in
Section 1: Defines the terms and phrases used in the Ordinance. cfiity with Section 60-108,
tilended, for time(s)
Section 2: Describes the City of Eagle General Obligation Bond, Series 2013 (the o1 issue of said paper, and
"Bond"); aper proper, and not in a
aid notice was published
Section 3:Provides for the manner and method of execution of the Bond. on the following dates:
Section 4: Provides for the place and manner of payment of the Bond.
Section 5:Appoints the County Treasurer as Bond Registrar. aal 260
Section 6: Provides for the prepayment and defeasance of the Bond. i
Section 7:Establishes funds and provides for the Bond. STATE OF IDAHO)
)SS
Section 8:Provides special covenants for the Bond. COUNTY OF ADA)
in the year of 2013
Section 9:Approves a Loan Agreement with,and provides for the sale of the Bond to, Public, personally appeared
the Idaho Bond Bank Authority. Itified to me to be the person
bed to the within instrument,
Section 10:Provides for amendments to the Ordinance. luly sworn, declared that the
id acknowledged to me that
Section:Authorizes the Chairman, County Clerk and County Treasurer to execute any the executed the same.
additional documents necessary to sell and deliver the Bond. �- '"
Notary Public for Idaho
Section 12:States that the Ordinance constitutes a contract with the Registered Owners Residing at Boise, ID
of the Bond. i expires: r`' '/ /
Section 13:Provides for severability.
Section 14: Repeals prior inconsistent ordinances,to the extent of any inconsistency.