CITY OF EAST LANSING Publication of Ordinance No 1551 Continued

 

EXHIBIT A

FORM OF SERIES 2025 BONDS

UNITED STATES OF AMERICA

STATE OF MICHIGAN

COUNTIES OF INGHAM AND CLINTON

CITY OF EAST LANSING

SEWAGE DISPOSAL SYSTEM REVENUE BONDS, SERIES 2025

 

Interest Rate	Maturity Date	Date of Original Issue
_____%	See Schedule I	____________, 2025

                                                                                                                        

Registered Owner:       Michigan Finance Authority

Principal Amount:        _______________________________________ Dollars ($__________)

                                                                                                                        

The City of East Lansing, Counties of Ingham and Clinton, Michigan (the “Issuer”), acknowledges itself indebted and, for value received, hereby promises to pay to the Registered Owner specified above, or registered assigns, out of the net revenues of the Sewage Disposal System of the Issuer (the “System”), including all appurtenances, additions, extensions and improvements thereto after provision has been made for reasonable and necessary expenses of operation, maintenance and administration of the System (the “Net Revenues”), the amounts and on the Dates of Maturity set forth on Schedule I hereto, or such adjusted Schedule I provided by the Michigan Finance Authority (the “Authority”) if less than the Principal Amount stated above is disbursed to the City or if principal is forgiven, together with interest thereon from the dates of receipt of such funds, or such later date to which interest has been paid, at the Interest Rate per annum specified above, first payable on __________ 1, 20__, and semiannually thereafter on the first day of April and October of each year, except as the provisions hereinafter set forth with respect to redemption of this Bond prior to maturity may become applicable hereto.

The Issuer promises to pay to the Authority the principal amount of this Bond or so much thereof as shall have been advanced to the Issuer pursuant to a Purchase Contract between the Issuer and the Authority and a Supplemental Agreement by and among the Issuer, the Authority and the State of Michigan acting through the Department of Environment, Great Lakes, and Energy.

During the time funds are being drawn down by the Issuer under this Bond, the Authority will periodically provide the Issuer a statement showing the amount of principal that has been advanced and the date of each advance, which statement shall constitute prima facie evidence of the reported information; provided that no failure on the part of the Authority to provide such a statement or to reflect a disbursement or the correct amount of a disbursement shall relieve the Issuer of its obligation to repay the outstanding principal amount actually advanced, all accrued interest thereon, and any other amount payable with respect thereto in accordance with the terms of this Bond.

Notwithstanding any other provision of this Bond, so long as the Authority is the owner of this Bond, (a) this Bond is payable as to principal, premium, if any, and interest at U.S. Bank Trust Company, National Association, or at such other place as shall be designated in writing to the Issuer by the Authority (the “Authority’s Depository”); (b) the Issuer agrees that it will deposit with the Authority’s Depository payments of the principal of, premium, if any, and interest on this Bond in immediately available funds by 12:00 noon at least five business days prior to the date on which any such payment is due whether by maturity, redemption or otherwise; in the event that the Authority’s Depository has not received the Issuer’s deposit by 12:00 noon on the scheduled day, the Issuer shall immediately pay to the Authority as invoiced by the Authority an amount to recover the Authority’s administrative costs and lost investment earnings attributable to that late payment; and (c) written notice of any redemption of this Bond shall be given by the Issuer and received by the Authority’s Depository at least 40 days prior to the date on which such redemption is to be made.

This Bond, being one fully registered manuscript bond, is issued in accordance with the provisions of Act 94, Public Acts of Michigan, 1933, as amended and City of East Lansing Ordinance No. 1296, as supplemented by Ordinance No. 1345, Ordinance No. 1410, Ordinance No. 1452, Resolution No. 2021-11, and Ordinance No. ____ (collectively the “Ordinance”), for the purpose of paying the cost of acquiring and constructing improvements to the System.  This Bond is a self-liquidating Bond, and is not a general obligation of the Issuer within any applicable constitutional, statutory, or charter limitation, but is payable, both as to principal and interest, solely from the Net Revenues of the System.  The principal of and interest on this Bond are secured by a statutory lien on the Net Revenues.

The Issuer hereby covenants and agrees to fix, and maintain at all times while any of the Bonds shall be outstanding, such rates for service furnished by the System as shall be sufficient to provide for payment of the principal of and interest upon all such Bonds as and when the same become due and payable, to maintain a bond and interest Redemption Account and to provide for the payment of expenses of administration and operation and such expenses for maintenance of the System as are necessary to preserve the same in good repair and working order, and to provide for such other expenditures and funds for the System as are required by the Ordinance.  The Bonds of this series shall have equal standing and priority of lien as to the Net Revenues of the System with the City’s Sewage Disposal System Revenue Bond, Series 2013, Sewage Disposal System Revenue Bond, Series 2015, Sewage Disposal System Revenue Bond, Series 2017, Sewage Disposal System Revenue Bond, Series 2019 and Sewage Disposal System Revenue Bonds, Series 2021 (Junior Lien). Additional Revenue Bonds (as defined in the Ordinance) of equal or superior standing and priority of lien may be issued pursuant to the Ordinance.  For a complete statement of the revenues from which, and the conditions under which, this Bond is payable, a statement of the conditions under which additional bonds of equal and superior standing may hereafter be issued, and the general covenants and provisions pursuant to which this Bond is issued, reference is made to the Ordinance.

Bonds of this series may be subject to redemption prior to maturity by the Issuer only with the prior written consent of the Authority and on such terms as may be required by the Authority.

In the event of a default in the payment of principal or interest hereon when due, whether at maturity, by redemption or otherwise, the amount of such default shall bear interest (the “additional interest”) at a rate equal to the rate of interest which is two percent above the Authority’s cost of providing funds (as determined by the Authority) to make payment on the bonds of the Authority issued to provide funds to purchase this Bond but in no event in excess of the maximum rate of interest permitted by law.  The additional interest shall continue to accrue until the Authority has been fully reimbursed for all costs incurred by the Authority (as determined by the Authority) as a consequence of the Issuer’s default.  Such additional interest shall be payable on the interest payment date following demand of the Authority.  In the event that (for reasons other than the default in the payment of any municipal obligation purchased by the Authority) the investment of amounts in the reserve account established by the Authority for the bonds of the Authority issued to provide funds to purchase this Bond fails to provide sufficient available funds (together with any other funds which may be made available for such purpose) to pay the interest on outstanding bonds of the Authority issued to fund such account, the Issuer shall and hereby agrees to pay on demand only the Issuer’s pro rata share (as determined by the Authority) of such deficiency as additional interest on this Bond.

It is hereby certified and recited that all acts, conditions and things required by law, precedent to and in the issuance of this Bond, exist and have been done and performed in regular and due time and form as required by law and that the total indebtedness of the Issuer including this Bond, does not exceed any applicable constitutional, statutory, or charter limitation.

IN WITNESS WHEREOF, the City of East Lansing, Ingham and Clinton Counties, Michigan, by its City Council, has caused this Bond to be signed, by the manual or facsimile signatures of its Mayor and Interim City Clerk, all as of the _____ day of ____________, 2025.

                                                          

George Bookover, Mayor

                                                          

Amy Gordon, Interim Clerk

 

TRANSFER

For value received, the undersigned hereby sells, assigns and transfers unto ______________________________________________________________________________ (Tax Identification or Social Security No. __________________) the within Bond and all rights thereunder, and hereby constitutes and appoints _______________________________________ attorney, to transfer the within Bond on the books kept for registration thereof by the Paying Agent, with full power of substitution in the premises.

Dated:                                                      

Notice:      The signature to this assignment must correspond with the name as it appears on the registration books every particular, without alteration or enlargement or any change whatever.

 

Name of Issuer                        CITY OF EAST LANSING

DEQ Project No:                     __________________

DEQ Approved Amount:          $_________________

Loan amount Forgiven             $_________________

Loan amount to be Repaid        $_________________

SCHEDULE I

Based on the schedule provided below, unless revised as provided in this paragraph, repayment of principal of the Bond shall be made until the full amount advanced to the Issuer is repaid.  In the event the Order of Approval issued by the Department of Environment, Great Lakes, and Energy (the “Order”) approves a principal amount of assistance less than the amount of the Bond delivered to the Authority, the Authority shall only disburse principal up to the amount stated in the Order.  In the event (1) that the payment schedule approved by the Issuer and described below provides for payment of a total principal amount greater than the amount of assistance approved by the Order or (2) that less than the principal amount of assistance approved by the Order is disbursed to the Issuer by the Authority, the Authority shall prepare a new payment schedule, which shall be effective upon receipt by the Issuer.

 

Due Date	Amount of Principal Installment Due

 

Interest on the Bond shall accrue on that portion of principal disbursed by the Authority to the Issuer pursuant to the Order from the date such portion is disbursed, until paid, at the rate of _____% per annum, payable __________ 1, 20__, and semiannually thereafter.

The Issuer agrees that it will deposit with U.S. Bank Trust Company, National Association, or at such other place as shall be designated in writing to the Issuer by the Authority (the “Authority’s Depository”) payments of the principal of, premium, if any, and interest on this Bond in immediately available funds by 12:00 noon at least five business days prior to the date on which any such payment is due whether by maturity, redemption or otherwise.  In the event that the Authority’s Depository has not received the Issuer’s deposit by 12:00 noon on the scheduled day, the Issuer shall immediately pay to the Authority as invoiced by the Authority an amount to recover the Authority’s administrative costs and lost investment earnings attributable to that late payment.

*Not to exceed amount.  Loan reductions at close out will result in a proportional decrease.

 

CP#25-237