UNIVERSITY OF SOUTH ALABAMA
BOARD OF TRUSTEES MEETING
December 14, 2006
10:00 a.m.
A meeting of the University of South Alabama Board of Trustees was duly convened by
Mr. Donald L. Langham, Chair Pro Tempore, on Thursday, December 14, 2006, at 10:04 a.m. in the
Board Room of the Frederick P. Whiddon Administration Building.
Members Present:
Trustees Steven Furr, Cecil Gardner, Samuel Jones, Donald Langham,
Bettye Maye, Christie Miree, Mayer Mitchell, Bryant Mixon, James Nix,
John Peek, Steven Stokes, Larry Striplin, and James Yance.
Members Absent:
Trustees J. L. Chestnut, Joseph Morton, and Bob Riley.
Administration
and Others:
President Gordon Moulton; Drs. Dale Adams, Joseph Busta, Pat Covey,
Lamar Duffy (COM Alumni Assn.), Miriam Fearn, Irene McIntosh
(Faculty Senate), Robert Shearer, and Sam Strada; Messrs. Louis Cardinal
(Thornton Farish), Ken Davis, Wayne Davis, Robert Galbraith,
Stan Hammack, Will Jackson (SGA), and Bob Young (Frazer Lanier); and
Mss. Diana Laier (Alumni Assn.), Vicki Tate (Faculty Senate), and
Jean Tucker.
Press:
Mr. George Altman (Press-Register).
Upon the call to order and an invocation by Dr. Adams, Chairman Langham called for consideration
of ITEM 1, the minutes of the September 14, 2006, meeting of the Board of Trustees. On motion
by Mayor Nix, seconded by Sheriff Mixon, the minutes were unanimously adopted.
Chairman Langham read aloud RESOLUTION 1 of ITEM 1.A as follows. On motion by
Sheriff Mixon, seconded by Mayor Nix, the resolution was unanimously approved. Senator Lindsey
made brief remarks about his tenure as a Board member and expressed appreciation for the
opportunity to serve.
RESOLUTION
COMMENDATION OF USA TRUSTEE W. H. LINDSEY
WHEREAS, W. H. “Pat” Lindsey was appointed to the Board of Trustees of the University of South Alabama in
1993, and
WHEREAS, during his tenure as a member of the Board, Senator Lindsey served on the Executive and the
Endowment and Investments Committees, and served continuously as a member of the Long-Range Planning Steering
Committee from the time of his appointment to the Board to the end of his term as Trustee, and
WHEREAS, Senator Lindsey has served the University with distinction, graciously contributing his time, energy,
wisdom, and guidance to the growth and development of higher education in the state of Alabama, the region, and to the
students, alumni, faculty, and administration of the University of South Alabama,
USA Board of Trustees
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December 14, 2006
NOW, THEREFORE, BE IT RESOLVED the University of South Alabama Board of Trustees expresses its deep
appreciation and gratitude to Senator W. H. Lindsey for his devotion, service, and commitment to advancing the interests
of the Institution and its constituencies.
Chairman Langham read aloud RESOLUTION 2 of ITEM 1.A as follows. On motion by Ms. Maye,
seconded by Mayor Nix, the resolution was unanimously approved.
RESOLUTION
COMMENDATION OF USA TRUSTEE E. CRUM FOSHEE
WHEREAS, E. Crum Foshee was appointed to the Board of Trustees of the University of South Alabama in 1993,
and
WHEREAS, Mr. Foshee served as Secretary of the Board from 2001 to 2004, and
WHEREAS, during his tenure as a member of the Board, he served on the Executive, the Academic and Student
Affairs, the Budget and Finance, the Endowment and Investments, the Health Affairs, and the Long-Range Planning
Steering Committees, and
WHEREAS, Mr. Foshee, as a member of the Board of Directors of the University of South Alabama Foundation,
served as a steward of the University endowment, and
WHEREAS, Mr. Foshee has served the University with distinction, graciously contributing his time, energy,
wisdom, and guidance to the growth and development of higher education in the state of Alabama, the region, and to the
students, alumni, faculty, and administration of the University of South Alabama,
NOW, THEREFORE, BE IT RESOLVED the University of South Alabama Board of Trustees expresses its deep
appreciation and gratitude to Mr. E. Crum Foshee for his devotion, service, and commitment to advancing the interests
of the Institution and its constituencies.
President Moulton presented ITEM 2, the President’s Report. He welcomed new Trustees
Dr. Steve Furr and Messrs. John Peek and Jim Yance. Also introduced were Dr. Irene McIntosh and
Ms. Vicki Tate - Faculty Senate; Mr. Will Jackson - President, SGA; Ms. Diana Laier - President,
USA National Alumni Association; and Dr. Miriam Fearn - Associate Professor and Chair,
Department of Earth Sciences.
President Moulton called upon Dr. Covey for a report on academic programs. Dr. Covey reported
that the Doctor of Nursing Practice, one of only 20 offered nationwide, would be implemented in
Spring 2007. She said that the Alabama Commission on Higher Education (ACHE) had approved
a Master of Science in Civil Engineering. She discussed an agreement recently completed with
Auburn University to offer a Doctor of Pharmacy program, and reported that 1,434 students received
degrees during Fall Commencement on December 9.
The Board viewed a new television commercial for student recruitment featuring USA students,
including Mr. Will Jackson, SGA President. President Moulton reminded the Board that upcoming
events included the Coors Classic basketball doubleheader on December 16 and the next regular
meeting of the Board of Trustees on March 22, 2007.
President Moulton called upon Dr. Busta for a report on USA Campaign Leadership goals.
Dr. Busta welcomed Dr. Lamar Duffy - President, Medical Alumni Association. He reported that
USA Board of Trustees
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December 14, 2006
the largest gift by an alumni couple in University history had been announced at a press conference
on December 13, and thanked Dr. and Mrs. Steven Stokes for their recent gift of $2 million in
support of the creative writing program and the College of Medicine, bringing their total giving to
the University to $2.42 million including University matching gifts. He recognized Ms. Miree for
a recent pledge to endow the USA National Alumni Association’s outstanding employee awards
program. He said the campaign has reached the $45 million level, and added that the USA
Campaign Leadership Team and the Development staff are working diligently to attain a goal of
$48 million by March 2007. He noted that copies of the publication entitled Honor Roll of Donors
had been placed on the Board table.
Chairman Langham called for consideration of health affairs items. Dr. Stokes, Health Affairs
Committee Chair, moved approval of ITEM 3 resolutions as follows. Ms. Miree seconded, and the
resolutions were unanimously approved.
RESOLUTION
USA HOSPITALS MEDICAL STAFF APPOINTMENTS AND REAPPOINTMENTS
FOR AUGUST, SEPTEMBER AND OCTOBER 2006
OCTOBER 27, 2006
WHEREAS, the Medical Staff appointments and reappointments for August, September, and October 2006, and
October 27, 2006, for the University of South Alabama Hospitals are recommended for approval by the Medical Executive
Committees of the University of South Alabama Hospitals,
THEREFORE, BE IT RESOLVED, that the appointments and reappointments be approved as submitted.
RESOLUTION
USA HOSPITALS MEDICAL STAFF BYLAWS AND RULES AND REGULATIONS
REVISIONS OF NOVEMBER 9, 2006
WHEREAS, revisions of the USA Hospitals Medical Staff Bylaws and USA Medical Center’s Medical Staff Rules and
Regulations were approved by the Medical Staffs of the University of South Alabama Hospitals at their November 9, 2006,
Medical Staff meeting and recommended to the Board of Trustees for approval,
THEREFORE, BE IT RESOLVED, that the revisions be approved as presented.
Mr. Wayne Davis reported on the USA Mitchell Cancer Institute, ITEM 4. He said construction is
proceeding smoothly and reminded Trustees to log onto the USA Web site for live viewing of
construction progress. The anticipated completion date is November 2007.
Mr. Hammack presented ITEM 5, a report on the USA / IHS Strategic Health Alliance. He said that,
with the lease of Knollwood Hospital complete, the coordination of clinical services delivery and
resident education continues to progress positively.
Chairman Langham called for a report of academic and student affairs items. Ms. Miree, Academic
and Student Affairs Committee Chair, moved approval of ITEM 6 as follows. Ms. Maye seconded
and the resolution was unanimously approved.
USA Board of Trustees
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December 14, 2006
RESOLUTION
SABBATICAL AWARDS
WHEREAS, in accordance with University policy, proposals for Sabbatical Awards have been reviewed and
recommended by the respective faculty committees, Departmental Chair, College Dean, and by the Senior Vice President
for Academic Affairs and President,
THEREFORE, BE IT RESOLVED, that the University of South Alabama Board of Trustees approves said Sabbatical
Awards on this date, December 14, 2006, for the 2007-2008 academic year.
NAME
DISCIPLINE
Dr. David A. Bowers, Jr.
Dr. Martha J. Brazy
Dr. Phillip J. Carr
Dr. Nicole T. Flynn
Dr. Greg L. Gruner
Dr. Fred W. McKenna
Dr. Henry M. McKiven
Dr. David H. Nelson
Dr. J. Steven Picou
Dr. Daniel S. Silver
Dr. Michelle L. Slagle
Dr. Susan G. Williams
Ms. Ameina Summerlin
Dr. Mary Ann Robinson
Political Science/Criminal Justice
History
Anthropology
Sociology
Music
Finance
History
Biological Sciences
Sociology/Anthropology/Social Work
Mathematics/Statistics
Management
Mathematics/Statistics
Mathematics/Statistics
Professional Studies
TIME PERIOD
Spring 2008
Academic Year 2007-2008
Spring 2008
Fall 2007
Spring 2008
Fall 2007
Spring 2008
Fall 2007
Spring 2008
Academic Year 2007-2008
Academic Year 2007-2008
Academic Year 2007-2008
Fall 2007
Spring 2008
Ms. Miree moved approval of ITEM 7 as follows. Mr. Peek seconded and the resolution was
unanimously approved.
RESOLUTION
PROFESSORS EMERITUS
WHEREAS, the following faculty members have retired from the University of South Alabama:
and,
Terry G. Cronis, Ph.D., Professor of Special Education
Dorothy Jean P. McIver, Ph.D., Professor of English
WHEREAS, in recognition of their contributions to the University through extraordinary accomplishments in
teaching and in the generation of new knowledge through research and scholarship, and for serving as a consistently
inspiring influence to students for a period of time, and
WHEREAS, the faculty and chairpersons from their departments, academic dean, the Senior Vice President for
Academic Affairs, and the President have duly recommended the aforementioned retirees from the University faculty, and
NOW THEREFORE, BE IT RESOLVED that the Board of Trustees of the University of South Alabama in a seated
meeting held on December 14, 2006, hereby appoints the aforenamed individuals to the rank of Professor Emeritus with
the rights and privileges thereunto appertaining, and
FURTHER, BE IT RESOLVED that the Board of Trustees of the University of South Alabama in recognition of their
extraordinary accomplishments and dedicated service to the University of South Alabama wishes to convey its deep
appreciation to these individuals.
USA Board of Trustees
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December 14, 2006
Ms. Miree moved approval of ITEM 8 as follows (refer to APPENDIX A for copies of policies and
other authorized documentation). Ms. Maye seconded and the resolution was unanimously
approved.
RESOLUTION
AMENDMENTS TO FACULTY SENATE CONSTITUTION
WHEREAS, pursuant to Article III of the USA Faculty Senate Constitution, (as set forth in the USA Faculty
Handbook, Chapter 2, Section 2.31) amendments thereto require approval of the University’s Board of Trustees, and
WHEREAS, the Faculty Senate and the University Faculty at large have voted to approve amendments relating
to scheduled senate meetings and the Mentoring Committee’s charge and function as described in the documents
accompanying this resolution,
NOW, THEREFORE, BE IT RESOLVED the Board of Trustees approves the amendments to the Faculty Senate
Constitution as proposed.
Dr. Adams presented ITEM 9, a report on student affairs. Concerning a new student recreation
center, he said that the administration had made site visits to other centers, and that a consulting firm
with considerable experience in this type of facility had been engaged to develop a concept that is
right for the University. The firm has surveyed USA students for feedback on the components they
would like in a recreation center. A program document should be complete before the next meeting
of the Board in March 2007.
Chairman Langham called for a report of budget and finance items. Mayor Nix, Budget and Finance
Committee Chair, noted receipt by Trustees of ITEM 10, the University’s Monthly Fund Accounting
Reports for July, August, and September 2006. He called upon Mr. Wayne Davis to discuss
ITEM 10, as well as ITEM 11, the KPMG Audit Reports and Letters for the year ended September 30,
2006. Mr. Davis provided highlights from the publication entitled University of South Alabama
2006 Financial Report, saying that the University is in excellent financial condition. He said net
assets total $311 million, up from $234 million in 2004. He noted that in the last five years, net
assets had increased in excess of $100 million. He noted that one factor that significantly
contributed to the University’s healthy financial condition was the commitment of major gifts to
Campaign USA.
Concerning ITEM 11, Mr. Wayne Davis reported that Mr. Mark Peach and Ms. Ashley Willson of
the firm of KPMG, met with the Audit Committee on December 13, 2006, to deliver the required
communications. He said KPMG rendered an unqualified opinion of the University’s financial
statements, and called upon Mr. Ken Davis to discuss the University’s response to the KPMG
management letter. Mr. Ken Davis reported that KPMG had outlined recommendations for the
University to modify internal controls, and said the University is putting methods into practice to
comply with the recommendations.
Mr. Ken Davis presented ITEM 12, a report of the Alabama Department of Examiners of Public
Accounts audit of disproportionate share hospital funds managed by the USA Foundation for the
USA Board of Trustees
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December 14, 2006
five-year period ended June 2005. He said that no instances of noncompliance with applicable laws
and regulations were reported.
Mr. Wayne Davis presented ITEM 12.A as follows. He said the bids outlined relate to site
preparation; opening of bids will take place in April 2007. On motion by Mayor Nix, seconded by
Ms. Miree, the resolution was unanimously approved.
RESOLUTION
CONSTRUCTION CONTRACT
ALLIED HEALTH PROFESSIONS AND NURSING BUILDING
WHEREAS, the Board of Trustees by a resolution on September 2, 2004, authorized the University President
to enter into a contract with Barganier, Davis, Sims Architects Associates for Architectural Services to design the Allied
Health and Nursing Building, and
WHEREAS, the overall general contractor construction bids are expected to be received in February 2007, and
WHEREAS, bids for the initial site work and soil surcharge and for high-voltage power equipment and equipment
installation have been received, and it has been determined that the following bidders are the lowest responsive and
responsible bidders for the specified packages listed below, totaling $998,965.77:
Initial Site Work and Soil Surcharge
McConnell Contractors
$281,957.77
High-Voltage Power Equipment
Stuart C. Irby Company
$137,225.00
High-Voltage Power Equipment Installation
Bagby and Russell Electric Co., Inc.
$579,783.00
NOW, THEREFORE, BE IT RESOLVED, that the Board of Trustees of the University of South Alabama hereby
authorizes the University President to award the contract for initial site work and soil surcharge and for high-voltage power
equipment and equipment installation as specified above for the dollar amounts specified above, as well as any other minor
contracts necessary to complete the site-preparation phase of the project, in accordance with the bid laws of the State
of Alabama.
Mr. Wayne Davis presented ITEM 12.B resolutions as follows. On motion by Mr. Striplin, seconded
by Dr. Stokes, the resolutions were unanimously approved.
RESOLUTION
TRANSFER OF HEALTH SERVICES BUILDING
TO THE USA RESEARCH AND TECHNOLOGY CORPORATION
WHEREAS, the University of South Alabama owns a building known as the Health Services Building, and
WHEREAS, the creation of the USA Research and Technology Corporation (Corporation) was authorized by the
University of South Alabama Board of Trustees at its June 6, 2002, meeting and duly incorporated with the State of
Alabama on June 14, 2002, as a supporting organization of the University of South Alabama to, among other functions,
“create, develop, construct, operate, manage, and finance one or more research and technology parks, technology
enterprise centers, and other facilities and operations which further scientific research activities of the University, and
contribute to the development of high-technology businesses in the State of Alabama,” and
USA Board of Trustees
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December 14, 2006
WHEREAS, the Board of Trustees of the University deems it to be in the best interest of the University and the
Corporation to transfer the Health Services Building to the Corporation for the purposes stated in the Articles of
Incorporation of the USA Research and Technology Corporation cited in the preceding paragraph,
THEREFORE, BE IT RESOLVED, that the Board of Trustees approves and authorizes the President to proceed
with the transfer of the subject building to the Corporation for the sum of FIVE MILLION, FIVE HUNDRED SIXTY-SIX
THOUSAND, FOUR HUNDRED FORTY FOUR AND NO/100 DOLLARS ($5,566,444.00) to be leased by the Corporation to
tenants who meet the required qualifications of the Corporation.
RESOLUTION
GROUND LEASE OF HEALTH SERVICES BUILDING LAND
TO THE USA RESEARCH AND TECHNOLOGY CORPORATION
WHEREAS, the University of South Alabama (“University”) owns certain real property which it utilizes to further
its educational mission, and
WHEREAS, the USA Research and Technology Corporation (“Corporation”), a not-for-profit, supporting
organization of the University, was incorporated to further the educational and scientific mission of the University, to
promote the University and its schools and departments, to promote the development of and to facilitate funding for the
infrastructure and services in Mobile, Alabama, and to attract high technology and scientific enterprises, and
WHEREAS, in order for said Corporation to fulfill its above-stated mission, it is recommended that the University
lease approximately 13.2 acres of land known as the Health Services Building Land (shown on the attached Exhibit “A”
as Lot 7 of the USA Technology & Research Park Master Plan) to the Corporation for the development, construction, and
support of the park and its buildings for the sum of ONE DOLLAR AND NO/100 ($1.00) per annum, and a term that expires
on July 1, 2048, and
WHEREAS, the Corporation will use the property only for the purposes stated in the Articles of Incorporation
governing the Corporation, such purposes to be set forth in the lease document, and
WHEREAS, should said Corporation cease to exist for any reason, land and improvements thereon will revert
to the University consistent with the terms of the lease, and
WHEREAS, the University has determined that leasing the real property described above is in the best interest
of the University in that it will allow the University to continue and enhance its valued missions of education, research, and
service,
THEREFORE, BE IT RESOLVED, that the Board of Trustees of the University of South Alabama authorizes the
President of the University to proceed with finalizing a land lease agreement with the USA Research and Technology
Corporation for the lease of approximately 13.2 acres of real property known as the Health Services Building Land to the
Corporation for development, support, and operation of the Corporation.
Mr. Wayne Davis called for consideration of a bond issue, ITEM 13. He reminded Trustees that, at
the September 14, 2006, Board meeting, the University administration was granted authorization
to proceed with due diligence and planning for a proposed $65 million bond issue to fund
completion of Mitchell Cancer Institute construction, a building for the colleges of Allied Health
and Nursing, a student recreation center, and infrastructure and campus beautification
improvements, including campus entrance portals and construction of a bell tower. He reported that,
as a result of the due diligence process, an additional $10 million in capital projects had been
identified. Also proposed is the use of bond proceeds to pay off debt remaining from the 1996 bond
USA Board of Trustees
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December 14, 2006
issue estimated at approximately $25 million, for a total recommended bond issue of $100 million.
The newly identified projects include construction of an athletics field house and a softball field,
and renovation of the Administration, Alpha South, and Student Center buildings. Aerial photos of
the campus and artists renderings of the campus master plan were shown.
Mr. Davis introduced the University’s financial advisor for the bond issue, Mr. Louis Cardinal of
the firm of Thornton Farish, Inc. Mr. Cardinal briefly discussed the bond documents. He said that
market conditions are currently at their most favorable in many months, an indication that the time
is ideal for the University to consider a bond issue. Mr. Cardinal introduced Mr. Bob Young of the
Frazer Lanier Company, the University’s senior bond underwriter, who reported a successful sale
of bonds on December 12, 2006. He said that the average interest rate on the sale was 4.74 percent.
He commended the University for an excellent presentation to Moody’s Investors Service during
a recent site visit to campus. On motion by Mayor Nix, seconded by Ms. Maye, the following
resolutions were unanimously approved.
RESOLUTION
BE IT RESOLVED by the Board of Trustees (herein called the “Board”) of UNIVERSITY OF SOUTH ALABAMA
(herein called the “University”) as follows:
Section 1. Findings. The Board hereby finds and recites that the University has heretofore issued, pursuant
to a resolution adopted October 31, 1996 (herein called the “Authorizing Resolution”), its $31,680,000 original principal
amount of University Tuition Revenue Refunding and Capital Improvement Bonds, Series 1996, dated as of February 15,
1996 (the “Series 1996 Bonds”), and (b) the University is not in default in the payment of the principal of and interest
on any of the Series 1996 Bonds. The Series 1996 Bonds were issued pursuant to the provisions of a Tuition Revenue
Trust Indenture, dated as of February 15, 1996 (the “Indenture”), from the University to The Bank of New York Trust
Company, N.A., Birmingham, Alabama.
Section 2. Call for Redemption. Acting pursuant to the provisions of Article VI of the Indenture, the University
does hereby elect to redeem and pay, and does hereby call for redemption and payment, on February 18, 2007, all of
the outstanding Series 1996 Bonds (herein called the “Called Bonds”), the redemption of each Called Bond to be effected
at a redemption price equal to the 102.00% of the face or par amount of each Bond so called for redemption.
Section 3. Provisions for Notice. The Bank of New York Trust Company, N.A., Birmingham, Alabama, is hereby
directed, in its capacity as paying agent for the Series 1996 Bonds, to cause written notice of such redemption and
prepayment to be given in the manner and at the time prescribed in Article VI of the Indenture.
Section 4. Actions Authorized. The President of the University is hereby authorized and directed to take or
cause to be taken, in the name and behalf of the University, all of the actions required by the provisions of the Indenture
to be taken in order to effect the redemption on February 18, 2007, of the Called Bonds herein called for redemption.
Section 5. No Repeal. The Board agrees that it will not repeal this resolution calling the Called Bonds for
redemption on February 18, 2007.
RESOLUTION
ISSUANCE OF $100,000,000 PRINCIPAL AMOUNT OF UNIVERSITY TUITION REVENUE REFUNDING
BONDS AND CAPITAL IMPROVEMENT SERIES 2006
BE IT RESOLVED by the Board of Trustees (herein called the “Board”) of UNIVERSITY OF SOUTH ALABAMA
(herein called the “University”) as follows:
USA Board of Trustees
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December 14, 2006
Section 1. (a) Findings. The Board has determined and hereby finds and declares that the following facts are
true and correct:
(1) It is necessary, advisable, in the interest of the University and in the public interest that the University
refund and retire the University’s outstanding Tuition Revenue Refunding and Capital Improvement Bonds, Series 1996,
dated as of February 15, 1996 (the "Refunded 1996 Bonds"), which bonds were originally issued in the aggregate
principal amount of $31,680,000;
(2) It is necessary, advisable, in the interest of the University and in the public interest that the University issue
the Bonds hereinafter authorized for the purpose of refunding the Refunded 1996 Bonds; and
(3) It is necessary, advisable, in the interest of the University and in the public interest that the costs of issuing
the Bonds and the costs of certain capital improvements representing a portion of the University’s five and ten-year capital
improvement program including, without limitation, construction of the Mitchell Cancer Institute, the Colleges of Nursing
and Allied Health Professions building, a Student Recreation Center, the Bell Tower, the Engineering and Sciences building,
a softball field, athletics field house, and improvements to campus entrances to include new portals; renovation of the
Administration, Student Center and Alpha South buildings and other capital improvements throughout the campus of the
University (collectively, the "Improvements") be financed with proceeds of the Bonds.
(b) Bonds to be Issued as Additional Parity Bonds Under the Indenture; Special Findings Under Section 8.2(b)
of the Indenture. The Bonds shall be issued as additional parity bonds under Article VIII of the Indenture hereinafter
referred to. In accordance with the provisions of Section 8.2(b) of the Indenture, the Board hereby finds and declares
as follows:
(1) the University is not now in default under the Indenture and no such default is imminent;
(2) the Bonds shall be designated Series 2006;
(3) the persons to whom the Bonds are to be delivered are set forth in Section 6 hereof;
(4) all of the Bonds are to be issued by sale in accordance with Section 6 hereof;
(5) the sale price of the Bonds is set forth in Section 6 hereof;
(6) (a) the only bonds that have previously been issued by the University under the Indenture are its
$31,680,000 original principal amount of University Tuition Revenue Refunding and Capital Improvement Bonds, Series
1996, dated February 15, 1996 (the “Series 1996 Bonds”), its $7,055,000 original principal amount of University Tuition
Revenue Refunding Bonds, Series 1996B, dated October 15, 1996 (the “Series 1996B Bonds”), its $40,130,000.70
original principal amount of University Tuition Revenue Bonds, Series 1999, dated March 1, 1999 (the “Series 1999
Bonds”), and its $51,080,000 original principal amount of Tuition Revenue Refunding and Capital Improvement Bonds,
Series 2004, dated March 15, 2004 (the “Series 2004 Bonds”); and (b) in Article VIII of the Indenture, the University has
reserved the right to issue additional bonds, secured by a pledge of the Pledged Revenues on a parity with the Series
1996 Bonds (initially issued thereunder and which are to be refunded with proceeds of the Series 2006 Bonds hereinafter
referred to), the Series 1996B Bonds (which bonds have been paid and retired), the Series 1999 Bonds, the Series 2004
Bonds and with such additional parity bonds as shall have thereafter been issued hereunder, upon compliance with the
applicable provisions of said Article VIII; and
(7) the Bonds are being issued for the purpose of refunding the Series 1996 Bonds, paying costs of the
Improvements, and paying the expenses of issuing the Bonds, including the premium of the Bond Insurer for the Financial
Guaranty Insurance Policy.
The Trustee is hereby requested to authenticate and deliver the Bonds to the purchasers specified in Section 6 hereof
upon payment of the purchase price designated therein.
Section 2. Authorization of Bonds. For the purposes specified in Section 1 of this resolution, there are hereby
authorized to be issued by the University $100,000,000 aggregate principal amount of University Tuition Revenue
Refunding and Capital Improvement Bonds, Series 2006, dated December 1, 2006 (herein called the “Bonds”), all under
the terms, conditions and provisions set out in the Fifth Supplemental Trust Indenture dated as of December 1, 2006,
between the University and The Bank of New York Trust Company, N.A., as trustee (herein called the “Trustee”), which is
supplemental to the Trust Indenture between the University and the Trustee dated as of February 15, 1996 (the said Trust
Indenture, as supplemented by the said Fifth Supplemental Trust Indenture, herein called the “Indenture”). All the
provisions of the Indenture respecting the Bonds are hereby adopted as a part of this resolution as fully as if set out at
length herein.
USA Board of Trustees
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December 14, 2006
Section 3. Source of Payment of the Bonds. The principal of and the interest on the Bonds shall be payable
solely from the Pledged Revenues as defined in the Indenture. Nothing contained in this resolution, in the Bonds or in the
Indenture shall be deemed to impose any obligation on the University to pay the principal of or the interest on the Bonds
except from the Pledged Revenues. The Bonds shall not represent or constitute obligations of any nature whatsoever of
the State of Alabama and shall not be payable out of moneys appropriated to the University by the State. The agreements,
covenants or representations contained in this resolution, in the Bonds and in the Indenture do not and shall never
constitute or give rise to any personal or pecuniary liability or charge against the general credit of the University, and in
the event of a breach of any such agreement, covenant or representation, no personal or pecuniary liability or charge
payable directly or indirectly from the general revenues of the University shall arise therefrom. Neither the Bonds, nor the
pledge or any agreement contained in the Indenture or in this resolution shall be or constitute an obligation of any nature
whatsoever of the State of Alabama, and neither the Bonds nor any obligation arising from the aforesaid pledge or
agreements shall be payable out of any moneys appropriated to the University by the State of Alabama. Nothing contained
in this section shall, however, relieve the University from the observance and performance of the several covenants and
agreements on its part herein contained.
Section 4. Bonds Payable at Par. All remittances of principal of and interest on the Bonds to the holders thereof
shall be made at par without any deduction for exchange or other cost, fees or expenses. The bank or banks at which the
Bonds shall at any time be payable shall be considered by acceptance of their duties hereunder to have agreed that they
will make or cause to be made remittances of principal of and interest on the Bonds, out of the moneys provided for that
purpose, in bankable funds at par without any deduction for exchange or other cost, fees or expenses. The University will
pay to such bank or banks all reasonable charges made and expenses incurred by them in making such remittances in
bankable funds at par.
Section 5. Authorization of Indenture. The Board does hereby authorize and direct the President of the
University to execute and deliver, for and in the name and behalf of the University, to The Bank of New York Trust Company,
N.A., as Trustee under the aforesaid Trust Indenture, a Fifth Supplemental Trust Indenture in substantially the form
presented to the meeting at which this resolution is adopted and attached as Exhibit I to the minutes of said meeting
(which form is hereby adopted in all respects as if set out in full in this resolution) and does hereby authorize and direct
the Secretary of the Board to affix to the Fifth Supplemental Trust Indenture the corporate seal of the University and to
attest the same.
Section 6. Sale of the Bonds. The Bonds are hereby sold and awarded to The Frazer Lanier Company,
Incorporated, Merchant Capital, LLC, Gardnyr Michael Capital, Inc., Compass Bank, Raymond James and Associates, Inc.,
and Protective Securities, a Division Of Proequities (herein called the “Underwriters”), at and for a purchase price equal
to $106,305,086.85 (reflecting an underwriting discount of $475,000 and original issue premium in the amount of
$6,780,086.85) plus accrued interest on the Bonds from December 1, 2006, to the date of delivery thereof.
Section 7. Authorization of the Official Statement. The Board does hereby authorize and direct the President
of the University to execute, for and in the name and behalf of the University, an Official Statement with respect to the
Bonds, to be dated the date of the adoption of this resolution, in substantially the form presented to the meeting at which
this resolution is adopted and attached as Exhibit II to the minutes of said meeting (which form is hereby adopted in all
respects as if set out in full in this resolution), with such changes as shall be necessary to conform to the provisions of
this resolution. The Board does hereby declare that the Official Statement so executed by the President of the University
shall be the Official Statement of the University with respect to the Bonds. The actions of the Underwriters in circulating,
on behalf of the University, a Preliminary Official Statement respecting the Series 2006 Bonds, dated December 7, 2006,
and attached hereto as Exhibit III, is hereby ratified and confirmed and the said Preliminary Official Statement is hereby
adopted as the Preliminary Official Statement of the University and the Board hereby deems the said Official Statement
"final" within the meaning of SEC Rule 15c2-12(b)(1) for the purposes of such rules.
Section 8. Authorization of Continuing Disclosure Agreement. The President of the University is hereby
authorized and directed to execute and deliver, on behalf of the University, a Continuing Disclosure Agreement for the
benefit of the beneficial owners of the Bonds, in substantially the form presented to the meeting at which this resolution
is adopted (which form shall be attached as Exhibit IV to the minutes of said meeting and which is hereby adopted in all
USA Board of Trustees
Page 11
December 14, 2006
respects as if set out in full in this resolution). The said Continuing Disclosure Agreement is to be entered into
contemporaneously with the issuance of the Bonds in order to assist the Underwriters of the Bonds in complying with Rule
15c2-12 of the Securities and Exchange Commission. The rights of enforcement of the said Continuing Disclosure
Agreement shall be as provided therein, and in no event shall a default by the University thereunder constitute a default
hereunder or under the Indenture.
Section 9. Execution and Delivery of Bonds. The Board does hereby authorize and direct the President of the
University to execute the Bonds, in the name and behalf of the University, by causing a manual or facsimile of his signature
to be imprinted thereon, and does hereby authorize and direct the Secretary of the Board to cause the corporate seal of
the University to be imprinted or impressed on each of the Bonds and to attest the same by causing a manual or facsimile
of the signature of said Secretary to be imprinted thereon, all in the manner provided in the Indenture, and the President
of the University is hereby authorized and directed to deliver the Bonds, subsequent to their execution as provided herein
and in the Indenture, to the Trustee under the Indenture, and to direct the Trustee to authenticate all the Bonds and to
deliver them to the Underwriters, upon payment to the University of the purchase price therefor in accordance with the
provisions of Section 6 hereof.
Section 10. Application of Proceeds. The entire proceeds derived by the University from the sale of the Bonds
shall be paid to said Trustee under the Indenture, which is thereupon authorized and directed to apply and disburse such
moneys for the purposes and in the order specified in Section 1.5 of the Fifth Supplemental Trust Indenture herein
authorized.
Section 11. Resolution Constitutes Contract. The provisions of this resolution shall constitute a contract between
the University and each holder of the Bonds.
Section 12. Severability. The various provisions of this resolution are hereby declared to be severable. In the
event any provision hereof shall be held invalid by a court of competent jurisdiction, such invalidity shall not affect any
other portion of this resolution.
Section 13. General Authorization. The President of the University, the Vice- President for Financial Affairs and
the Secretary of the Board are hereby authorized to execute such further certifications or other documents and to take
such other action as any of them may deem appropriate or necessary for the consummation of the matters covered by
this resolution, to the end that the Bonds may be executed and delivered as promptly as practicable.
Chairman Langham called for a report of endowment and investments items. Mr. Mitchell, Chair,
Endowment and Investments Committee, Presented performance for the total endowment and each
money manager for fiscal year 2006: Commonfund, Arlington Partners, Gerber/Taylor, Oakmark
Select, and Private Advisors. He stated that the endowment had outperformed its relative index for
the year (11.31 percent vs. 8.76 percent) and since inception in March 2000 (5.74 percent vs. 2.51
percent). The University’s endowment totals $19.8 million. Mr. Mitchell said there are no plans
to make investment changes at the present time.
Following a short recess, Chairman Langham read aloud ITEM 14 as follows, and moved for
approval. Ms. Miree seconded and the resolution was unanimously approved. Dr. and Mrs. Stokes
were presented a framed resolution. Dr. Stokes expressed gratitude for the opportunity to serve and
provide support to his and Mrs. Stokes’ alma mater.
UNIVERSITY OF SOUTH ALABAMA
COLLEGE OF EDUCATION
DEPARTMENT OF
PROFESSIONAL STUDIES
UCOM 3600 .MOBILE,
ALABAMA 36688-0002
TEL: (251) 380-2861 .FAX:
(251) 380-2713
E-mail: coepsfYusouthal.edu
November28, 2006
v. Gordon Moulton, President
Unjversity of SouthAlabama
Presjdent's Office
AD 122
CAMPUS MAIL
Dear President Moulton:
In its March 2006 meeting the Senateunanimouslyapproved two amendmentsto the
Senateconstitution. The first amendmentdeals with changesin language to better define
the USA Faculty SenateMentoring,Committee's charge and function. The secondchange
provides changed meeting dates during months when classesare not in sessionat the time
of the regularly scheduledmeeting.
After the Senate approval, the measureswere presentedto the faculty at large for a vote.
Three-hundred and eighty-two (382) faculty membersvoted. Three-hundredand seventythree (373) members of the faculty voted to approvethe first changewhiJe nine (9)
members of the faculty voted againstapproval. Three-hundredand eighty-one (381)
members of the facuJtyvoted to approvethe secondchangeand one (I) faculty member
voted against approval. The results indicate that a majority of the faculty approved both
amendments.
At this time I ask you to requestthe Board of Trusteesof the University of South
Alabama to formally adopt these changesto the SenateConstitution at the Board of
Trustees' Decembermeeting. I thank you very much for your assistaJ1ce
in this matter
and I will be happy to answer any questionspertaining to thesechanges.
Sincerelyyours.
P~!l<-l..A~
-cm9,~~;~:>
P. Irene McIntosh
USA Faculty SenateChair
enclosure
Community Counseling
Rehabilitation Counseling
School Counseling
School Psychometry
Educational Media
AN AFFIRMATIVEACTION/EQUAL OPPORTUNITYEDUCATIONAL INSTITUTION
9
Instructional
Design and Det'elop,nent
Proposed Constitutional Chanees
Words in Bold Italics are the proposedchanges in wording to the present USA Faculty Senate
Constitution.
I. In order to better define the USA Faculty SenateMentoring Committee's
charge and function, the Senatevoted to rewrite the Mentoring
Committee's description at its March 22, 2006 meeting. The following paragraph in
italics is the text that is currently in the USA Faculty Handbook
followed by the proposed changes,which are in bold:
This Committee will coordinate the Senate mentoring program for new
faculty. It will recommendpolicies for the mentoring program,
identify and recruit faculty mentors, and establish operating
procedures. The Committee will also representfaculty in matters
related to academic developmentat the university level (Faculty
Handbook, Article 1; Section 4B6, Chap2, pg. 38)
This Committee will represent the Faculty in matters related to
academic development and faculty mentoring at the university level.
It will function to advance the mission of the Faculty Senate by
providing collaborative planning and consultation on matters as they
relate to the teaching, research, and service activities of the
faculty; to provide input into University policy concerning academic
development and faculty mentoring; and assesspolicy approaches to,
and delivery of Faculty mentoring within the University.
2. The Faculty Senatehas scheduledmeetings every third
Wednesdayof the month except in May, August, and December. As it
reads currently, the Faculty Handbook (Article II, Section 1, Chap. 2,
pg 39) makes no provision for scheduling of meetings which happento
fall on the Wednesdayswhen classesare not in session. This
occasionally affects the March meeting of the Senate when students are
on Spring Break, and the November meeting which sometimes falls on the Wednesday
immediately before Thanksgiving.
We propose that the following language in bold be added to Article II:
Section I Chap. 2., p. 39 in order to eliminate confusion as to
scheduled Senatemeetings:
In the event that a regular meeting falls on a day when classesare
not in session, the meeting will be held on the following Wednesday at
3:00 p.m.
10
FIFTH SUPPLEMENTAL TRUST INDENTURE
between
UNIVERSITY OF SOUTH ALABAJ\iA
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.
$100,000,000
University Tuition RevenueRefunding
And CapitalImprovementBonds
Series2006
Dated:December1, 2006
FIFTH SUPPLEMENTAL
TRUST INDENTURE between the UNIVERSITY OF
SOUTH ALABAMA,
public body corporate under the laws of Alabama (herein called the
"University"), and THE BANK OF NEW YORK TRUST COMPANY, N.A. (as successor
Trustee to AmSouth Bank of Alabama), a banking corporation in its capacity as Trustee under
the Trust Indenture of the University dated as of December 1, 2006 as supplemented (said
banking association in said capacity being herein called the "Trustee"),
RECITALS
The University makes the following findings as a basis for the undertakingsherein
contained:
(a)
Pursuant to the provisions of the aforesaid Indenture (herein called the
"Indenture"), the University has heretofore issued and sold its $31,680,000 original principal
amount of University Tuition Revenue Refunding and Capital Improvement Bonds, Series1996,
dated February 15, 1996 (the "Series 1996 Bonds"), its $7,055,000 University Tuition Re\'enue
Refunding Bonds, Series 1996B, dated October IS, 1996 (the "Series 1996B Bonds"),
$40,130,00.70 University Tuition Revenue Bonds, Series 1999, dated March 1, 1999 (the "Series
1999 Bonds"), and its $51,080,000 Tuition Revenue Refunding and Capital Improvement Bonds,
Series 2004, dated March 15, 2004 (the "Series 2004 Bonds"). In Article VIII of the Indenture,
the University has reserved the right to issue additional bonds, secured by a pledge of the
Pledged Revenues on a parity \\'ith the Series 1996 Bonds (initially issued thereunder andwhich
are to be refunded with proceeds of the Series 2006 Bonds hereinafter referred to), the Series
1996B Bonds (which bonds have been paid and retired), the Series 1999 Bonds, the Series2004
Bonds and with such additional parity bonds as shall have thereafter been issued hereunder,upon
compliance with the applicable provisions of said Article VIII. The University now desiresto
issue additional bonds, in the principal amount of $100,000,000, for the purpose of providing
funds to pay costs of capital improvements at the University and to refund and retire theSeries
1996 Bonds. The University has duly adopted a resolution authorizing the issuance of such
additional bonds. This Fifth Supplemental Trust Indenture is executed in order to specifythe
details with respectto such additional bonds.
(b)
This Fifth SupplementalTrust Indenture is being executed to provide for the
issuance of the Series 2006 Bonds (hereinafter referred to) as Additional Bonds underthe
Indenture.
Additional Definitions
The following definitions are in addition to thosecontainedin the Indenture:
"Ambac Assurance Corporation" or the "Bond Insurer" means Ambac Assurance
Corporation, a Wisconsin-domiciledstockinsurancecompany.
2
2(b) hereof.
"DTC" has the meaning given in Section
poljcy
""Financial Guaranty Insurance Policy" shall mean the financial guaranty insurance
issued by Ambac Assurance jnsuring the payment when due of the principal of and
interest on theSeries2006 Bonds asprovidedtherein.
"Improvements"
means the costs of capital improvements at the University tobe paid
from proceeds of the Series 2006 Bonds, consisting generally of the construction of the Mitchell
Cancer Institute, the Colleges of Nursing and Allied Health Professions building, a Student
Recreation Center, the Bell Tower, the Engineering and Sciences building, a softball field,
athletics field house, and improvements to campus entrances to include new portals; renovation
of the Administration Building, the Student Center and Alpha South buildings~ and othercapital
improvements throughout the campus.
"Interest
Payment Date" means each June 1 and December 1, commencing June
2007
"Record Date," as used in the Indenture, shall be, with respect to the Series 2006Bonds,
the May 15 and November 15 preceding each Interest Payment Date.
"Refunded Bonds" means the University Tuition Revenue Refunding and Capital
Improvement Bonds, Series 1996, dated as of February 15, 1996, originally issued in the
aggregate principal amount of $31 ,680,000
"Series 2006 Bonds" meansthose of the Bonds bearingthe designationSeries2006,as
authorized to be issued in the principal amountof $100,000,000.
NOW, THEREFORE,THIS SUPPLEMENTALINDENTURE
WITNESSETH:
It is herebyagreedamongthe University, the Trusteeand its successorsin trust underthe
Indenture andthe holders at any time of the Series2006 Bonds hereinafterreferred to (thesaid
holders evidencingtheir consenthereto by their acceptanceof the said Series2006 Bonds),each
with each of theothers,asfollows:
ARTICLE I
SERIES 2006 BONDS
Section 1.1
(a)
Authorization and Description of the Series 2006 Bonds. There
is hereby authorized to be issued by the University under the Indenture an issue or seriesof
Bonds designed Tuition Revenue Refunding and Capital Improvement Bonds, Series2006,
dated as of December 1, 2006, which shall be issued in the aggregate principal amountof
$100,000,000. The Series 2006 Bonds shall mature and become payable on December 1in the
years and amounts shown below. Interest shall be payable on June 1, 2007, and each Interest
Payment Date thereafter, and shall bear interest at the per annum rates set forth below:
3
Maturity Date
(December 1)
Principal
Amount
Interest
Rate
2024
2025
2026
2027
2028
2029
2030
2031
2036
$ 5,600,000
5,885,000
6,190,000
6,505,000
6,840,000
7,190,000
7,560,000
7,945,000
46,285,000
5.00%
5.00
5.00
5.00
5.00
5.00
5.00
5.00
5.00
The Series 2006 Bonds shall be issued in denominations of $5,000 or any multiple thereof. The
Series 2006 Bonds shall be initially issued in the Authorized Denominations and registered in the
names of the Holders as shall be designated by the purchaser of the Series 2006 Bonds from the
University .
Section 1.2 Redemption Provisions. (a) Optional Redemption. Those of theSeries
2006 Bonds having statedmaturities in 2017 and thereaftershall be subject to redemptionprior
to their respectivematurities,at the option of the University, in whole or in part (but, if in part,in
multiples of $5,000with those of the maturities to be redeemedto be se1ectedby the University
at its discretion, and if less than all the Series 2006 Bonds having the same maturity areto be
redeemed,thoseto be redeemedto be se1ectedby the Trusteeby lot), on December 1,2016,and
on any date thereafter,at and for a redemptionprice for eachSeries2006 Bond redeemed
equa1
to the par or faceamountthereofplus accrued interestthereonto the date fixed for redemption.
(b)
Scheduled Mandatory Redemption of Series 2006 Term Bond due
2036 The Series 2006 Bonds due 2036 shall be subject to mandatory redemption and pa}'tnent,
and the University shall redeem and pay such Series 2006 Bonds, at and for a redemptionprice,
with respect to each such Series 2006 Bond or portion thereof redeemed, equal to the principal
amount thereof plus accrued interest to the Redemption Date (those to be redeemed to be
selected by the Trustee by lot) but only in the following aggregate principal amounts on
December I in the following years:
Amount
Year
Redeemed
2032
2033
2034
2035
2036 (final maturity)
$ 8,355,000
8,785,000
9,235,000
9,705,000
10,205,000
d
The Trustee will, no later than sixty (60) days preceding each December I of the years shown
above, take such action as may be necessary to effect the redemption, on the next succeeding
December I, of the respective principal amounts shown above of the Series 2006 Bondsdue
December I, 2036. In the event that less than the entire principal of the Series 2006 Bondsof a
maturity is redeemed and prepaid, the Trustee shall select by lot that portion of the principal of
the Series 2006 Bonds of such maturity to be redeemed and prepaid, such redemption tobe in
increments of$5,000 or any multiple thereof
(c)
Payments into Bond Fund. The University will pay into the Bond Fund created
in the Tuition Revenue Trust Indenture dated as of February 15, 1996, in addition to all other
payments required to be paid therein, an amount sufficient to pay the principal of and intereston
the Series 2006 Bonds when due and to redeem Series 2006 Bonds required to be redeemed
pursuant to the provisions for scheduled mandatory redemption required by the provisions of
Section 1.2(b)hereof.
Section 1.3 Method of Payment. (a)
The principal of the Series 2006 Bondsshall
be payable at maturity at the designated office of the Trustee in Bin11ingham, Alabama. Interest
on the Series 2006 Bonds shall be payable by check or draft mailed or otherwise delivered by the
Trustee to the respective Holders thereof at their addresses as they appear on the registrybooks
of the Trustee pertaining to the registration of the Series 2006 Bonds; provided that thefinal
payment of such interest shall be made only upon surrender of the appropriate Series 2006Bond
to the Trustee. The principal and the interest on the Series 2006 Bonds shall be payableonly
upon maturity and only upon surrender of such Series 2006 Bonds of the Trustee. All
installments of principal of and interest on each Series 2006 Bond shall bear interest afterthe
respective maturities of such principal and interest until paid or until moneys sufficient for
payment thereof shall have been deposited for that purpose with the Trustee, whichever first
occurs, at the rate of interest borne by such Series 2006 Bond.
(b)
Issued in Book-Entry Form. The Series2006 Bonds shall be initially
issued in book-entry only fonD, registeredin the name of Cede & Co., the nomineeof The
Depository Trust Company ("DTC"). So long as the said book-entry only systemremainsin
effect, the provisions of this First SupplementalIndenture, including the provisions governing
the registration and exchangeof Series2006 Bonds, places and mannerof payment ofSeries
2006 Bonds, requirementsfor presentmentof Series2006 Bonds shallbe subjectto the standard
procedures of the DepositoryTrustCompany.
(c)
Book-Entry Only System; Payment Provisions.
The Series2006 Bondswill be issuedas fully-registeredSeries2006 Bondsin the
name of Cede & Co., as nominee of DTC, as registered owner of the Series 2006 Bonds.
Purchasers of such Series 2006 Bonds will not receive physical delivery of Series2006Bond
certificates. For purposesof this Official Statement,so long as all of the Series2006 Bondsare
in the custodyof DTC, referencesto Series2006 Bondholdersor Owners shall meanDTCor its
nominee.
5
DTC will act as securities depository for the Series 2006 Bonds. The Series2006
Bonds will be issued as fully-registered securities in the name of Cede & Co., DTC's partnership
nominee ("Cede") or such other nominee as may be requested by an authorized representativeof
DTC. One fully-registered Series 2006 Bond certificate will be issued for each maturity of the
Series 2006 Bonds, in the aggregate principal amount of such maturity, and will be deposited
with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a memberof
the Federal Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of
Section 17 A of the Securities Exchange Act of 1934, as amended. DTC holds securities thatits
participants (the "Direct Participants") deposit with DTC. DTC also facilitates post-trade
settlement amDng Direct Participants of sales and other securities transactions in deposited
securities, through electronic computerized book-entry transfers and pledges between Direct
Participants' accounts. This eliminates the need for physical movement of securities certificates.
Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks,trust
companies, clearing corporations and certain other organizations. DTC is a wholly-owned
subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, isowned
by a number of Direct Participants of DTC and members of the Natjonal Securities Clearing
Corporation, Fixed Income Clearing Corporation, and Emerging Markets Clearing Corporation
(NSCC, FICC, and EMCC, also subsidiaries of DTCC), as well as by the New York Stock
Exchange, Inc., the American Stock Exchange, LLC, and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as both U.S. andnonU.S. securities brokers and dealers, banks, trust companies and clearing corporations thatclear
through or maintain a custodial relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). DTC has Standard & Poor's highest Rating: AAA. The DTC Rules
applicable to its Direct and Indirect Participants are on file with the Securities and Exchange
Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.
Purchasesof Series2006 Bonds, in the denominationof $5,000 principal amount
or any integralmultiple of $5,000 in excessthereof, underthe DTC system must be madeby or
through Direct Participants,which will receive a credit for the Series 2006 Bonds on DTC's
records. The ownershipinterest of eachactual purchaserof eachSeries2006 Bond ("Beneficial
Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial
Owners will not receivewritten confirmation from DTC of their purchase. BeneficialOwners
are expected,however,to receive written confirmations providing details of the transaction,
as
well as periodic statementsof their holdings, from the Direct or Indirect Participantthrough
which the BeneficialOwnerenteredinto the transaction. Transfersof ownership interestsin the
Series 2006 Bondsareto be accomplishedby entriesmade on the books of Direct and Indirect
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representingtheir ownershipinterests in Series2006 Bonds, except in the eventthat
use of the book-entrysystemfor the Series2006 Bondsis discontinued.
To facilitate subsequenttransfers, all Series 2006 Bonds deposited by Direct
Participants with DTC are registeredin the name of DTC's partnershipnominee, Cede,orsuch
6
other nominee as may be requested by an authorized representative of DTC. The depositof
Series 2006 Bonds with DTC and their registration in the name of Cede or such otherDTC
nominee does not effect any change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Series 2006 Bonds; DTC's records reflect only the identityof
the Direct Participants to whose accounts such Series 2006 Bonds are credited, which mayor
may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible
for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them, subjectto any
statutory or regulatory requirements as may be in effect from time to time.
Redemptjon notices shall be sent to DTC. If less than all of the Series2006
Bonds are bejng redeemed, DTC's practice is to deten11jne by Jot the amount of the jnterestof
each Djrect Partjcjpant in such Series 2006 Bonds to be redeemed.
Neither DTC nor Cede (nor any other DTC nominee) will consent or volewith
respect to Series 2006 Bonds unless authorized by a Direct Participant in accordance witbDTC's
Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the University assoon
as possible after the record date. The Omnibus Proxy assigns Cede's consenting or voting rights
to those Direct Participants to whose accounts the Series 2006 Bonds are credited on therecord
date (identified in a listing attachedto the Omnibus Proxy).
Principal, redemptionprice and interest paymentson the Series2006 BondswiII
be made by the Trustee to Cedeor suchother nominee as may be requestedby an authorized
representativeof DTC. DTC's practice is to credit Direct Participants' accounts,uponDTC's
receipt of fundsand correspondingdetail information from the University or The Trustee,on a
payment date in accordancewith their respectiveholdings shownon DTC's records. Payments
by Direct and Indirect Participants to Beneficial Owners wiII be governed by standing
instructions and customary practices,as in the case with securitiesheld for the accounts
of
customers in bearerforn1 or registeredin "streetname," and wiII be the responsibilityof such
Direct and Indirect Participant and not of DTC, the Trustee or the University, subjectto any
statutory or regulatoryrequirementsas maybe in effect from time to time. Paymentof principal,
redemption price and interest to Cede (or such other nominee as may be requestedby an
authorized representative of DTC) is the responsibility of the University or the Trustee,
disbursementof such paymentsto Direct Participants will be the responsibility of DTC,and
disbursementof suchpaymentsto the BeneficialOwners will be the responsibilityof Directand
Indirect Participants.
NEITHER THE UNIVERSITY NOR THE TRUSTEE WILL HA VE ANY
RESPONSIBILITY OR OBLIGATION TO SUCH PARTICIPANTS, OR TO THE PERSONS
FOR WHOM THEY ACT AS NOMINEES WITH RESPECTTO THE SERIES2006 BONDS,
OR TO ANY BENEFICIAL OWNER IN RESPECT OF THE ACCURACY OF ANY
RECORDS MAINTAINED BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT
PARTICIPANT, THE PAYMENT BY DTC OR ANY DIRECT PARTICIPANT OR
7
INDIRECT PARTICIPANT OF ANY AMOUNT IN RESPECT OF THE PRINCIPAL OR
REDEMPTION PRICE OF OR INTEREST ON THE SERIES 2006 BONDS, ANY NOTICE
WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO SERIES 2006 BONDHOLDERS
UNDER THE FIFTH SUPPLEMENTAL INDENTURE, THE SELECTION BY DTC ORANY
DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY PERSON TO RECEIVE
PAYMENT IN THE EVENT OF PARTIAL REDEMPTION OF THE SERIES 2006BONDS
WITH RESPECTTO LESS THAN ALL OF THE SERIES 2006 BONDS, OR ANY OTHER
ACTION TAKEN BY DTC AS REGISTERED SERIES 2006 BONDHOLDER.
For every transfer and exchange of the Series 2006 Bonds, the Beneficial Owner
may be charged a sum sufficient to cover any tax, fee or other governmental charge thatmaybe
imposed in relation thereto, and any reasonable fees and expenses of the Trustee and thecosts
incurred in preparing Series 2006 Bond certificates.
DTC may discontinue providing its services as securities depository with respect
to the Series 2006 Bonds at any time by giving reasonable notice to the University. In theevent
of the discontinuance of the book-entry system for the Series 2006 Bonds, Series 2006Bond
certificates will be printed and delivered and the following provisions of the Indenture will
apply: (i) principal of the Series 2006 Bonds will be payable upon surrender of the Series2006
Bonds at the designated office of the Trustee; (ii) Series 2006 Bonds may be transferredor
exchanged for other Series 2006 Bonds of authorized denominations as set forth in the next
succeeding two paragraphs; and (iii) Series 2006 Bonds will be issued in denominations as
described in the front portion of the Official Statement under "THE SERIES 2006 BONDS".
In the event of "the discontinuanceof the use of the system of book-entry-only
transfers throughDTC (or a successordepository), Series2006 Bond certificates will beprinted
and delivered to DTC.
Section 1.4 Form of Series 2006 Bonds. The Series 2006 Bonds and the Trustee's
Authentication Certificate applicable thereto shall be in substantially the following forms,
respectively, with such insertions, omissions and other variations as may be necessary
to
confonn to theprovisionshereof:
8
No.
[FORM OF CAPTION FOR BONDS
HELD IN BOOK ENTRY FORM]
UNITED STATES OF Al\.1ERICA
STATE OF ALABAMA
UNIVERSITY OF SOUTH ALABAl\1A
University Tuition RevenueRefunding and Capital Improvement Bobds
Series 2006
Interest Rate
Maturity Date
,.,
CUSIP Number
Subjectto the provisions ashereinstated
For value received, UNIVERSITY OF SOUTH ALABAMA, a public body
corporate underthe laws of the Stateof Alabama (herein called the "University"), will pay,
solely from thesourceshereinafterreferredto, to
or registered assigns,the principal sumof
DOLLARS on the date specified above, with interest thereon from the date hereof until the
maturity hereofat the per annumrate of interest specifiedabove,payableon June 1,2007,and
semiannually thereafteron each DecemberI and June I until and at the maturity hereof.The
principal of this bond are payable only upon presentationand surrenderof this bond at the
9
designated corporate trust office of The Bank of New York Trust Company, N.A. Birn1ingham,
Alabama, or its successor as trustee under the Indenture hereinafter referred to. I tereston this
bond is payable by check or draft mailed by the Trustee on the interest payme t dateto the
registered holder hereof and at the address shown on the registry books of the Tru tee penaining
to the Bonds asof the close of business on the May 14 or November 15, as the cas may be,next
preceding the date of payment of such interest. Interest payments that are due ith respectto
this bond and that are made by check or draft shall be deemed timely made if such heckor draft
is mailed by the Trustee on or before the due date of such interest. Both theprinci al ofandthe
interest on this bond sha]] bear interest after their respecti,'e maturities until paid 0 until moneys
sufficient for payment thereof have been deposited with the Trustee at the per ann m ratestated
above. The Indenture provides that a]] payments by the University or the Trustee t the personin
whose name aBond is registered sha]] to the extent thereoffu]]y discharge and sati fy all liability
for the same. Any transferee of this bond takes it subject to all payments of princip I andinterest
in fact made with respect hereto.
I
THIS
REFERENCE
2006
SERIES
PROVISIONS
FORTH
SHALL
IS
BONP
HEREBY
FORTH
SET
FOR
ALL
MADE
ON
TO
REVERSE
THE
PURPOSES
HAVE
THE
FURTHER
HEREOF,
THE
SAME
PRO
WHIC
EFFECT
f
SIONS
FURTHER
AS
OF
IF
SET
HERE.
This bond is one of a duly authorizedissueof bonds (hereincalJedthe "Bonds")
issuable in serieswithout expresslimit as to principal amountunder a Trust Inden re datedasof
February 15, 1996, as heretoforesupplementedand as supplementedby a Fifth upplemental
Trust Indenture(the Trust Indenture, as so supplemented,being herein calJed the "Indenture"),
between the University and The Bank of New York Trust Company,N.A., New York (herein
calJed the "Trustee"). The principal of and the interest on the Bonds are payable solelyout of
and are securedby a lien uponand pledge of certain feesfrom studentslevied by t e University
(herein called the "Pledged Revenues")and shalJ not be payable from any 0 her fundsor
revenues. Paymentof the principal of and the interest on the Bonds is secured, pro rataand
without preferenceor priority of one Bond over anotheror of the Bonds of any 0 e series
over
the Bonds of anyother, by a valid pledge of the revenuesout of which theyare payable.
Reference is hereby made to the Indenture for a description of the natureand
extent of the security afforded thereby, the rights and duties of the University and tbeTrustee
with respectthereto,the rights of the holdersof the Bondsand the termsand condit onsonwhich
additional seriesof Bonds maybe issued. The Indentureprovides, inter alia, (a) th t in theevent
of default by the University in the mannerand for the time therein provided, the Trusteemay
declare the principal of and the interest accrued on this bond immediately due and payable,
whereuponthesame shall thereuponbecomeimmediatelydue and payableand the Trusteeshall
be entitled to pursuethe remediesprovided in the Indenture, (b) that the holder of t is bondshall
have no right to enforce the provisions of the Indenture exceptas provided therein nd thenonly
for the equalandpro rata benefitof the holdersof all the Bonds,and (c) that if this ondshallnot
be presentedfor paymentwhendue (whetherby maturity or otherwise)andif funds sufficientfor
such paymentshall have been made available to the Trustee therefore, all Ii bility of the
University to the holder of suchbond and all rights of suchholder againstthe Un versityunder
such bond or underthe Indentureshall ceaseand terminateand that the sole right f suchholder
10
shall thereafter be against the said funds so made available, which the Trustee is required to set
aside and hold, subject to any applicable escheat or other similar law, for the benefit of such
holder. The Indenture also provides that the University and the Trustee, with the written consent
of the holders of not less than a majority in aggregate principal amount of the Bonds then
outstanding under the Indenture, may at any time and from time to time amend the Indenture or
any indenture supplemental thereto, provided that no such amendment shall (I) without the
consent of the holder of each Bond affected, reduce the principal of, the rate of interest on any
Bond, or (2) without the consent of the holders of all the Bonds then outstanding under the
Indenture, extend the maturity of any installment of principal or interest on any of the Bonds,
make any change in the schedule of required sinking fund or other similar payments with respect
to any series of the Bonds, create a lien or charge on the Pledged Revenues ranking prior to or
(except in connection with the issuance of additional parity bonds under the Indenture) on a
parity with the lien or charge thereon contained in the Indenture, effect a preference or priority of
any Bond over any other Bond or reduce the aggregate principal amount of Bonds the holdersof
which are required to consent to any suchamendment.
;",;1;
The series of bonds of which this is one is designated Series 12006and is
authorized to be issued in the aggregate principal amount of $100,000,000.
.! 1 ,,
Those of the Series2006Bonds havinga statedmaturity on December1,2017,or
thereafter shall be subjectto redemptionand paymentby the University, at the optionof the
University, as a whole or in part on December 1, 2016, and on any date thereafter(but if
redeemed in part, (i) of suchmaturity or maturities as the University shall designate,andif less
than all the Series2006 Bondsof a single maturity are to be redeemed,thoseto be redeemed
to
be selectedby the Trusteeby lot, and (ii) only in installmentsof $5,000or any integral multiple
thereof), at and for a redemptionprice equal to the par or face amount thereof plus accrued
interest to the datefixed for redemption.
The Series 2006 Bonds having a stated maturity in 2036 shall be subjectto
scheduled mandatory redemption commencingDecember1. 2032. but only in the datesand
amounts set forth in the Indenture(with thoseto be redeemedto selectedby the Trusteebylot) at
and for a redemptionprice. with respectto each such Series 2006 Bond (or portion thereof)
redeemed, equal to the principal amount thereof plus accrued interestto the date fIXedfor
redemption, but only to the extentrequiredby the Indenture.
The Series 2006 Bonds are not generalobligations of the University, andthe
covenants and representationsherein contained or containedin the Indenture do not andshall
never constitute a personal or pecuniary liability or charge againstthe general credit of the
University. The Series2006 Bonds are not obligations or debts of the State of Alabamanorare
the faith and credit of said state pledgedfor paymentthereof, and neither the principal of nor
interest on said bonds is payable out of any moneys provided for or appropriatedto the
University by the State of Alabama.
I t is hereby certified that all conditions. actions and things required by the
Constitution and laws of Alabama to exist. be perf~nned and happenprecedentto or in the
issuance of this bond do exist. have beenperformedandhave happenedin due and legalfonn.
The Bonds are issuable only as ful1y registered bonds in the denomination of
$5,000 or any integral multiple thereof. Provision is made in the Indenture for the exchangeof
Bonds for a like aggregate principal amount of Bonds of the same maturity and interest rateand
in an authorized denomination, all as may be requested by the holder surrendering the Bond or
Bonds to be so exchanged and upon the terms and conditions specified in the Indenture.
This bond is transferable by the registered holder hereof in person, or by duly
authorized attorney, on1y on the registry books of the Trustee pertaining to the Bonds and only
upon surrender of this bond to the Trustee for cancellation, and upon any such transfera new
Bond of like tenor herewith will be issued to the transferee in exchange therefore, all asmore
particularly provided in the Indenture; Each holder, by receiving and accepting this bond,sha11
consent and agree and shall be estopped to deny that, insofar as the University and the Trustee
are concerned, this bond may be transferred on1y in accordance with the provisions of the
Indenture.
The Trustee shall not be required so to transferor exchangethis bond duringthe
period of fifteendays next precedingany interestpaymentdate with respectthereto.
Execution by the Trustee of its authentication certificate hereon is essentialto the
validity hereof and is conclusive of the due issue hereof under the Indenture.
IN WITNESS WHEREOF, the University has causedthis bond to be executed
in its name and behalf with the signature of its President,has causeda facsimile of its corporate
seal to be hereunto imprinted, has caused this bond to be attested by the signatureof the
Secretaryof itsBoard of Trustees,and hascausedthis bond to be datedas of December1,2006.
UNIVERSITY OF SOUTH ALABAl\IA
By
I
President
University of SouthAlabama
Attest:
Secretaryof the
Boardof Trustees
12
Form of Trustee's Authentication Certificate
Date of Authenticationand Registration:
The within
bond is one of those described in the within-mentioned Trust
Indenture.
THE BANK OF NEW YORK TRUST COMPANY ~N.A.,
Trustee
By
I
I
Its Authorized Officer
13
Form of Assignment
For value received, the undersigned hereby sell(s), assign(s) and transfer(s)unto
the within bond and hereby irrevocably constitute(s)
and appoint(s)
attorney, with full
power of substitution in the premises, to transfer this bond on the books of the within-mentioned
Trustee.
DATED this
NOTE: The signature on this assignment must correspond \\,ith the name of the registered owner
as it appears on the face of the within Bond in every particular, without alteration, enlargement
or change whatsoever.
Signature guaranteed:
(Bank, TrustCompanyor Finn)*
By
(AuthorizedOfficer)
Its Medallion Number:
* Signature(s)must be guaranteedby an eligible
guarantor institution which is a member of a
recognized signature guarantee program, i.e.,
Securities Transfer Agents Medallion Program
(STAMP), Stock Exchanges Medallion Program
(SEMP), or New York Stock ExchangeMedallion
Signature Program(MSP).
14
Section 1.5
Execution and Delivery of the Series 2006 Bonds. The Series2006
Bonds shall be forthwith executed and delivered to the Trustee and shall be authenticatedand
delivered by the Trustee from time to time upon receipt by the Trustee of an order signedon
behalf of the University by its President, requesting such authentication and delivery and
designating the person or persons to receive the same or any part thereof.
Section 1.6
Application of Proceeds from Sale of Series 2006 Bonds. Theentire
proceeds derived by the University from the sale of the Series 2006 Bonds shall be paidto the
Trustee and promptly thereafter applied by the Trustee for the following purposes andin the
following
order:.-
.--
(a) accrued interest on the Series 2006 Bonds shall be paid into the BondFund
and applied for payment of the interest due on the Series 2006 Bonds on June 1, 2007;
(b) the sum of $23,560,327 shall be deposited into the Bond Fund and appliedfor
the redemption of the Refunded Bonds on February] 8, 2007; and
(c) the balance of the principal proceeds derived from the sale of the Series2006
Bonds shall be paid into the Construction Fund created in Article III hereof and applied for
payment of the costs of the Improvements and the expenses of issuing the Series 2006 Bonds.
ARTICLE II
CONCERNINGTHE CODE
Section 2.1 Concerning the Code. (a) General. The University recognizesthatthe
Code imposes certain conditions to the exemption from Federal income taxation of interest
income on the Series2006 Bonds. Accordingly, the University agrees that it will continually
comply with all requirementsimposedby the Codeas a condition to the exemptionfrom Federal
income taxation of the interestincome on the Series2006 Bonds. With respectto any question
arising under this Section2.1, the University may rely upon an opinion of nationally recognized
bond counsel acceptableto it.
(b)
Bonds not to be "Private Activity Bonds". The University will not
apply the proceedsof the Series2006 Bonds in a mannerthat would causeany of the Bonds
to
be "private activitybonds" within the meaningof Section141(a) of the Code.
(c)
Concerning the Arbitrage Pro\'isions of the Code. The University
agreesthat it will comply with all provisions of the Code necessaryto precludethe Series2006
Bonds being considered"arbitragebonds" within the meaningof Section 148 of the Code.
(d)
Provisions Respecting Registration of Series 2006 Bonds to Comply
with Provisions of Code. The University and the Trustee recognize that the provisionsof the
Code require thatthe Series2006 Bondsbe in "registeredform" and that, in general,eachSeries
2006 Bond mustbe registered as to both principal and interest and any transferof anySeries
2006 Bond mustbe effected only by the surrenderof the old Bond and either by the reissuance
of
15
the old Bond to a new Holder or the issuance ofa new Bond to a new Holder. The Trusteemay
rely upon an opinion of nationally recognized bond counsel with respect to any question which
may arise pertaining to the transfer, exchange or reissuance of Series 2006 Bonds.
ARTICLE III
CONSTRUCTION FUND
Section 3.1
2006 Construction Fund. There is hereby created a special trust fund,
the full name of which shall be the"2006 Construction Fund," for the purpose of P
for acquisition and construction of the Improvemen5s. The President of the Uf iversity
Viding funds
may
designate one of more banks as the depository, custodian and disbursing agent for the 2006
Construction Fund. Moneys shall be paid into the 2006 Construction Fund in ac ordancewith
the provisions of Section 1.3 hereof. The moneys in the 2006 Construction Fun shall be paid
out
upon
order ofofthe
University.
Moneys
on deposit
in pay
the con
mayofbetime
usedtototime
pay the
expenses
issuing
the Series
2006 Bonds
and to
costf truction
of acquiring,
Fund
providing and constructing the Improvements, including reimbursement to the
amounts heretofore advanced by the University in payment of such costs.
niversity of
Section 3.2
Investment of 2006 Construction Fund. In the event of investmentof
moneys on depositin the 2006 Constructionfund, the investment,the securities or !certificates
in
which such moneysare so invested,together with all income derivedtherefrom, shall becomea
part of the 2006 Construction Fund to the same extent as if they were mon~ys originally
deposited therein. Any depository for the 2006 ConstructionFund may at any time andfrom
time to time upon the direction of the University sell or otherwise convert into dash andsuch
securities or certificateswhereuponthe net proceedstherefrom shall become a patt or the2006
Construction Fund. East depositoryshall be fully protectedin making any suchin'testment,sale
or conversion in accordancewith the provisions of this section. In any determ~nation
of the
amount of moneysat any time forming a part of the 2006 ConstructionFund, all such securities
and certificates in which any portion of the 2006 ConstructionFund is at the tim!e so invested
shall be included therein at their thenmarket value. Moneys on depositin the Cons~ction Fund
may be invested in Eligible Certificates of Federal Securities, including money
r
consisting
solely
of
Federal
Securities.
arket
funds
"
ARTICLE IV
SPECIALPROVISIONSPERTAININGTO
FINANCIAL GUARANTY INSURANCEPOLICY
Section4.1 Payment Procedure Pursuant to Financial Guaranty Insurance
Policy.
As long as the Financial Guaranty Insurance Policy shall be in full forceand
effect, the University, the Trusteeand any Paying Agent agreeto comply with the following
prOVISIons:
(a)
At least one (1) business day prior to all Interest Payment Datesthe
Trustee or Paying Agent, if any, will detennine whether there will be sufficient funds in the
Funds and Accountsto pay the principal of or intereston the Series2006 Bonds onIsuchInterest
16
Payment Date. If the Trustee or Paying Agent, if any, detennines that there will be insufficient
funds in such Funds or Accounts, the Trustee or Paying Agent, if any, shall so notify Ambac
Assurance. Such notice shall specify the amount of the anticipated deficiency, the Series2006
Bonds to which such deficiency is applicable and whether such Series 2006 Bonds will be
deficient as to principal or interest, or both. If the Trustee or Paying Agent, if any, hasnot so
notified Ambac Assurance at least one (1) business day prior to an Interest PaymentDate,
Ambac Assurance will make payments of principal or interest due on the Series 2006 Bondson
or before the first (1st) business day next following the date on which Ambac Assuranceshall
have received notice of nonpayment from the Trustee or Paying Agent, if any.
(b)
the Trustee or Paying Agent, if any, shall, after giving notice to Ambac
Assurance as provided in (a) above, make available to Ambac Assurance and, at Ambac
Assurance's direction, to The Bank of New York, in New York, New York, as insurancetrustee
for Ambac Assurance or any successor insurance trustee (the "Insurance Trustee"), the
registration books by the Trustee or Paying Agent, if any, and all records relating to theFunds
and Accounts maintained under this Fifth SupplementalIndenture.
(c)
the Trustee or Paying Agent, if any, shall provide Ambac Assuranceand
the Insurance Trustee with a list of registered owners of Series 2006 Bonds entitled to receive
principal or interestpayments from Ambac Assurance under the tenns of the Financial Guaranty
Insurance Policy, and shall make arrangements with the Insurance Trustee (i) to mail checksor
drafts to the registered owners of Series 2006 Bonds entitled to receive full or partial interest
payments from Ambac Assurance and (ii) to pay principal upon the Series 2006 Bonds
surrendered to the Insurance Trustee by the registered owners of Series 2006 Bonds entitledto
receive full or partial principal payments from Ambac Assurance.
(d)
the Trusteeor PayingAgent, if any, shall, at the time it provides noticeto
Ambac Assurancepursuantto (a) above,notify registeredowners of Series2006 Bondsentitled
to receive the paymentof principal or interestthereonfrom ArnbacAssurance(i) as to thefactof
such entitlement, (ii) that Ambac Assurancewill remit to them all or a part of the interest
payments nextcomingdue uponproof of Holderentitlementto interestpaymentsand deliveryto
the Insurance Trustee,in form satisfactoryto theInsuranceTrustee,of anappropriateassignment
of the registeredowner's right to payment, (iii) that should they be entitled to receivefull
payment of principal from Ambac Assurance,they must surrender their Series 2006 Bonds
(along with anappropriateinstrumentof assignmentin form satisfactoryto the InsuranceTrustee
to pennit ownership of such Series 2006 Bonds to be registered in the name of Ambac
Assurance) for paymentto the InsuranceTrustee,and not the Trustee or PayingAgent, if any,
and (iv) that should they be entitled to receive partial payment of principal from Ambac
Assurance, theymust surrendertheir Series2006Bonds for paymentthereonfirst to the Trustee
or Paying Agent, if any, who shall note on suchSeries2006 Bonds the portion of the principal
paid by the Trusteeor PayingAgent, if any, and then, along with an appropriateinstrument
of
assignment in form satisfactoryto the InsuranceTrustee, to the InsuranceTrustee,whichwill
then pay the unpaidportionof principal.
(e)
in the event that the Trusteeor Paying Agent, if any, has notice thatany
payment of principal of or interest on an Obligation which has become Due for Payment
and
which is madeto a Holder by or on behalf of the University has been deemeda preferential
17
transfer and theretofore recovered from its registered owner pursuant to the United States
Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable order of
a court having competent jurisdiction, the Trustee or Paying Agent, if any, shall, at thetime
Ambac Assurance is notified pursuant to (a) above, notify all registered owners that in theevent
that any registered owner's payment is so recovered, such registered owner will be entitledto
payment from Ambac Assurance to the extent of such recovery if sufficient funds are not
otherwise available, and the Trustee or Paying Agent, if any, shall furnish to Ambac Assurance
its records evidencing the payments of principal of and interest on the Series 2006 Bonds\\'hich
have been made by the Trustee or Paying Agent, if any, and subsequently recovered from
registered owners and the dates on which such payments were made.
0
(f)- _-0in- addition' to those rights granted -Ambac Assurance under this Fifth
Supplemental Indenture, Ambac Assurance shall, to the extent it makes payment of principal of
or interest on Series 2006 Bonds, become subrogated to the rights of the recipients of such
payments in accordance with the terms of the Financial Guaranty Insurance Policy, and to
evidence such subrogation (i) in the case of subrogation as to claims for past due interest,the
Trustee or Paying Agent, if any, shall note Ambac Assurance's rights as subrogee on the
registration books of the Obligor maintained by the Trustee or Paying Agent, if any, upon receipt
from Ambac Assurance of proof of the payment of interest thereon to the registered ownersof
the Series 2006 Bonds, and (ii) in the case of subrogation as to claims for past due principal, the
Trustee or Paying Agent, if any, shall note Ambac Assurance's rights as subrogee on the
registration books maintained by the Trustee or Paying Agent, if any, upon surrender of the
Series 2006 Bonds by the registered owners thereof together with proof of the paymentof
principal thereof.
Section4.2
Other Provision Pertaining to the Financial Guaranty Insurance
Policy.
(a)
Any provision oftrus Fifth Supplemental Indenture expressly recognizingor
granting rights in or to Ambac Assurance may not be amended in any manner which affectsthe
rights of Ambac Assurance hereunder without the prior written consent of Ambac Assurance.
Ambac Assurance reserves the right to charge the University a fee for any consent or amendmentto
the Fifth SupplementalIndenture while the Financial Guaranty Insurance Policy is outstanding.
(b)
Unless otheIWise provided in this Section 4.2, Arnbac Assurance's consent
shall be required in lieu of Holder consent, when required, for the following purposes: (i) execution
and delivery of any amendment, supplement. change or modification to the Fifth Supplemental
Indenture, (ii) removal of the Trustee or Paying Agent and selection and appointment of any
successortrustee or paying agent.and (iii) initiation or approval of any action not described in (i) or
(ii) above which requires Holder consent.
(c)
Any reorganizationor liquidationplan with respectto t1leUniversity mustbe
acceptable to Ambac Assurance.In the event of any reorganization or liquidation, Ambac
Assuranceshallhavethe right to vote on behalfof all Holderswho hold Ambac Assurance-insured
Series2006 Bondsabsenta defaultby Ambac Assuranceunderthe applicableFinancial Guaranty
InsurancePolicyinsuringsuchSeries2006 Bonds.
18
(d)
Anything in this Fifth Supplemental Indenture to Ithe contrary
notwithstanding, upon the occulTence and continuance of an event of default as defined herein,
Ambac Assurance shall be entitled to control and direct the enforcement of all rights and remedies
granted to the Holders or the Trustee for the benefit of the Holders under this Fifth Supplemental
Indenture.
(e)
Anything in this Fifth Supplemental Indenture to the contrary
notwithstanding, upon the occurrence and continuance of an event of default as defined herein,
Ambac Assurance shall be entitled to control and direct the enforcement of all rights and remedies
granted to the Holders or the Trustee for the benefit of the Holders under this Fifth Supplemental
Indenture, including, without limitation: (i) the right to accelerate the principal of the Series2006
Bonds as described in this Fifth SupplementalIndenture, and (ii) the right to annul any declaration
of acceleration, and Arnbac Assurance shall also be entitled to approve all \\'aivers of eventsof
default.
(f)
Upon the occurrence of an event of default, the Trustee may, with the
consent of Ambac Assurance, and shall, at the direction of Ambac Assurance or la majority in
principal amount of the Holders with the consent of Ambac Assurance, by written noticeto the
University andAmbac Assurance, declare the principal of the Series 2006 Bonds to be immediately
due and payable, whereupon that portion of the principal of the Series 2006 Bonds therebycoming
due and the interest thereon accrued to the date of payment shall, without further action, become
and be immediately due and payable, anything in this Fifth SupplementalIndenture or in theSeries
2006 Bonds to the contrary notwithstanding.
In the event that the maturity of the Series 2006 Bonds is accelerated,
the
Bond Insurer may elect, in its sole discretion, to pay all or a portion of the accelerated principaland
interest accrued on such principal to the date of acceleration (to the extent unpaid by the Obligor)
with respect to the Bonds, and the Bond Trustee shall accept such amounts. Upon payment ofall of
such accelerated principal and interest accruedto the acceleration date as provided above, theBond
Insurer's obligations under the Bond InsurancePolicy shall be ful1y discharged.
Notwithstanding anything herein to the contrary, in the event that the
principal and/or interest due on the Series 2006 Bonds shall be paid by Ambac Assurance
Corporation pursuant to the Financial Guaranty Insurance Policy, the Series 2006 Bondsshall
remain Outstanding for all purposes, not be defeased or otherwise satisfied and not be considered
paid by the Obligor, and the assignment and pledge of the Pledged Revenue and all covenants,
agreements and other Series 2006 Bonds of the University to the registered owners shall conrinueto
exist and shall run to the benefit of Ambac Assurance, and Ambac Assurance shall be subrogated
to
the rights of suchregistered owners.
19
ARTICLE V
CONCERNINGPLEDGEDREVENUES;
CONFIRl\1ATION OF INDENTURE, AS SUPPLEMENTED
Section 5.1
Confirmation of Indenture. All the tenns, covenants and conditionsof
the Indenture, as supplemented hereby, are hereby in all respects ratified and confirmed, and the
Indenture as so supplemented shall continue in full force and effect.
Section 5.2
Confirmation of Pledges. The provisions of the Indenture, whereinthe
Pledged Revenues are pledged for payment of all Bonds issued under the Indenture, are hereby
ratified
and con[lm1ed
~
+
(b)
The definition of "Pledged Revenues" as defined in the Indentureand in
each supplemental indenture heretofore executed and delivered, is hereby clarified and extended
to include, within the said definition, the application fees, the registration fees, change of course
fees and the out-of state fees received from students with respect to the registration and
attendance at the University. The definition of "Pledged Revenues" is hereby amended, with the
intent to subject to the lien of the Indenture, the new facilities fee of $50 per studentper
semester, which fee was authorized by the Board on December 4, 2003 and which fee becomes
effective in the Fall 2006. The pledge of the Pledged Revenues pledged for payment of Bonds
issued under the Indenture, as clarified and amended herein, is hereby ratified and confinned.
Section5.2 Construction of Fifth Supplemental Trust Indenture. No provisionsof
this Fifth SupplementalTrust Indenture shallbe construedto limit or restrict, either expressly
or
impliedly, the obligations of the University contained in the Indenture or the powersof the
Trustee thereunder,nor shall the provisions of this Fifth Supplemental Trust Indenturebe
construed in any mannerinconsistentwith the provisions of the Indenture or in any mannerthat
would adverselyaffectthe interestof the Holders of anyBonds.
Section 5.4 Severability. In the event that anyprovision hereofshall be held in,'alid
or unenforceableby any courtof competentjurisdiction. suchholding shall not invalidateor
render unenforceableanyotherprovision hereof.
20
IN WITNESS WHEREOF, the University has caused this Fifth Supplemental
Trust Indenture to be executed in its name and behalf by the President of the University, has
caused its corporate seal to be hereunto affixed, and has caused this Fifth SupplementalTrust
Indenture to be attested by the Secretary of its Board of Trustees, and the Trustee has causedthis
Fifth Supplemental Trust Indenture to be executed in its name and behalf, has causedits
corporate seal to be hereunto affixed and has caused this Fifth Supplemental Trust Indentureto
be attested, all by its duly authorized officers, and the University and the Trustee have caused
this Fifth Supplemental Trust Indenture to be so executed in several counterparts, each ofwhich
shall be deemed an original, and have caused this Fifth Supplemental Trust Indenture to bedated
as of December I, 2006, although actually executed and delivered on
"
UNIVERSITY OF SOUTH ALABAl\1A
By
President
Attest:
-
Secretaryof the Board of Trustees
THE BANK OF NEW YORK
TRUSTCOMPANY,N.A.
By
Its
Attest
Its
21
STATE OF ALABAMA
COUNTY OF MOBilE
I,
, a Notary Pub]ic in and for said
county in said state, hereby certify that V. Gordon Moulton, whose name as the Presidentof the
UNIVERSITY
OF SOUTH ALABAI\:1A, a public body corporate under the Jaws of Alabama,
is signed to the foregoing instrument and who is known to me, acknowledged before me on this
day that, being informed of the contents of the within instrument, he, as such officer and with fu]]
authority, executed the same vo]untarily for and as the act of said public corporation.
GIVEN--under--my--hand-and--official2006.
seal-- of- office,
this
+
Notary Public
[NOTARIAL SEAL]
1/1523857.5
22
day--of--,
_,2006.
STATE OF ALABAMA
COUNTY OF JEFFERSON
I,
, a Notary Public in and for said county in said state, hereby
certify that
, whose name as
of The Bank of Ne York Trust
Company, N. -A~ in its capacity as Trustee under that certain Trust lndentur datedas of
February 15, 1996, between it and the University of South Alabama, as suppleme ted, issigned
to the foregoing instrument and who is known to me, acknowledged before me on this daythat,
being infonned of the contents of the within instrument, as such officer and with II authority,
executed the same voluntarily for and as the act of said bank, in its capacity as trusteeas--aforesaid:--
GIVEN under my hand and official seal of office, this -day
of.
Notary Public
[NOTARIAL SEAL]
1/1523857.3
23
CONTINUING DISCLOSURE AGREEMENT
by
UNIVERSITY OF SOUTH ALABAl\1A
for the benefit of
BENEFICIAL OWNERS OF THE
UNIVERSITY OF SOUTH ALABAMA
UNIVERSITY TUITION REVENUE REFUNDING
AND CAPITAL IMPROVEMENT BONDS
SERIES 2006
DATED DECEMBER 1, 2006
1/1530012.1
CONTINUING DISCLOSUREAGREEMENT
This CONTINUING DISCLOSURE AGREEMENT (the "A reement")by
UNIVERSITY OF SOUTH ALABAI\1A, a public corporation under the laws f the Stateof
Alabama (the "University"), for the benefit of the BENEFICIAL 0 :VNERS OF
UNIVERSITY
OF SOUTH ALABAI\1A UNIVERSITY
TUITION
REVENUE
REFUNDING AND CAPITAL IMPROVEMENT BONDS, SERIES 2006, dated December
I, 2006, originally issued in the original aggregateprincipal amount of $10 ,000,000(the
"Bonds").
i
RE CI TA'LS:
The Bonds are proposed to be issued by the University on or a out April 15,
2004, and are subject to the provisions of Rule 15c2-12 (the ..Rule"), promu gated by the
Securities and Exchange Commission of the United States of America (the ..ommission")
pursuant to the Securities Exchange Act of 1934. The University understands th t a failure of
the University to comply with the provisions of this Agreement must be reported n accordance
with the Rule and must be considered by any broker, dealer or municipal securities dealerbefore
recommending the purchase or sale of the Bonds in the secondary market and that uch afailure
may adversely affect the transferability and liquidity of the Bonds and their market rice.
NOW, THEREFORE, the University does hereby undertake and Jgree with the
Beneficial O\\'I1ersof the Bonds as folJows:
I
SectionI.
Pumose. This Agreementis being executedand del veredby the
University for the benefit of the Beneficial Ownersof the Bonds and in order for th underwriter
of the Bonds to be in compliancewith SEC Rule 15c2-12(b)(5)(the "Rule"). As r quiredbythe
Rule, this Agreementis enforceableby BeneficialOwners of the Bonds pursuantto the Indenture
under which theBondsare issued(the "Indenture")and Section9 of this Agreemen.
Section2.
Statement
with~p
~o
Definitions. In addition to the definitions set forth i
the
Bonds,
which
apply
to
any
capitalized
term
used
in
t
the
thi
Official
Agreement,
1/1530012.1
1
any
di
eCtlY
,
r
a
power,
the
depositories.
ownership
has
or
of
which
dispose
to
nominees
or
person
through
to,
any
mean
respect
Bonds
with
shall
holding
consent
Owner"
or
vote
persons
to
indirectly,
including
Bonds,
or
"Beneficial
the following capitalizedterms shall have the following meanings:
I
shall
mean any of the events with respect to the ! Bonds
listed in"Listed
SectionEvents"
5(a) of this
Agreement.
"Municipal Securities Rulemaking Board" shall mean the MU nicipal
Securities Rulemaking Board, whose address is:
[
Municipal SecuritiesRulemakingBoard
1818 N Street,N.W.
Suite 800
Washington,D.C. 20036-2491
Tel: (202) 223-9347
Fax: (202) 872-0347
"National Repository" shall mean any Nationally Recognized Mupicjpal
Securities Information Repository for purposes of the Rule.
I
"Repository' shall mean each National Repository and each I State
Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the SeCUriti
~s and
ExchangeCommission("SEC") under the SecuritiesExchangeAct of 19 4 (the
"1934 Act").
"State Repository" shall mean any public or private repository or en~ity as
may be designated by the State of Alabama as a state repository for the pu~se of
the Rule. As of the date of this Agreement, there is no State Repository.
I
"University Annual Report" shall mean any Annual Report provided by
the University pursuant to, and as described in, Sections 3 and 4 ofl this
Agreement.
Section3.
Undertaking. The University hereby agrees,in accbrdancewith
the provisions of the Rule, to provide ?r ca.useto be pro~ided,?ot later than six mqnthsa~erthe
close of each fiscal year of the UnIversIty, commenCIngWIth the fiscal year that wIll end
September 30, 2007, to each Repositorya University Annual Report in compli~nce withthe
provisions of Section4 of this Agreement. The University furtheragrees,in accordancewiththe
provisions of the Rule, to file in a timely mannera notice of any failure so to provi4e or cause
to
be provided the University Annual Report or any part thereof, suchnotice to be filed witheach
National Repository or the Municipal Securities Rulemaking Board and with the State
Repository.
Section4.
UniversitYReRort. (a) The University Annual Report shall
contain or incorporateby referencethefollowing:
1/1530012.1
2
the audited financial statements of the University
(1)
thereto;
(2)
and I notes
the revenues from the general tuition fees the proceeds of
I WhiCh
are
pledged
for
payment
(3)
of
the
Bonds;
the undergraduate enrollment
by division,
and graduat
,t
professional
enrollment
by
division,
for
the
fall
term
commencing
and
with"n
the
fiscal year covered by the University Annual Report;
(4)
the schedule of undergraduate and graduate fees and ~edical
College fees;
(5)
the receipts from application fees, course fees, registratiod fees,
change course fees and out-of-state fees and the student facilities fee;
I
(6)
the number of students, by geographic classification, attendi O g the
fall tenn commencing within the fiscal year covered by the University
nnual
Report;
(7)
academic
the number of degrees awarded, by type of degree, 1
year
ending
within
the
fiscal
year
covered
by
the
University
r
the
nnual
Report;and
(8)
the
directfor
State
appropriations
andState
received,
the~State
appropriations
received
employee
benefitsauthorized
and the total
appropri
tions
received.
(b) Anyone or more of the items listed abovemay be included by r ferencefrom
other documents,including official statementsof debt issuesof the University or elatedpublic
entities, which have beensubmittedto eachof the Repositories. If the documen includedby
reference is a final official statement, it must be available from the Munici al Securities
Rulemaking Board. The University shall clearly identify each such other documen so included
by reference in the University Annual Report.
Section5.
Events. (a) The following constituteListed Events for purposes
of
this Agreement:
1/1530012.1
(1)
principal and interestpaymentdelinquencies,
(2)
non-paymentrelateddefaults,
(3)
unscheduled draws on debt service reserves reflecti g financial
difficulties,
t
3
(4)
unscheduled draws on credit enhancements reflecting financ.al difficulties,
(5)
substitution of credit or liquidity providers, or their failure td perform,
(6)
(7)
adverse tax opinions or events affecting the tax-exempt status of the
Bonds,
I
modifications to right. of holders of the Bonds,
(8)
calls for redemption, b ther than scheduled mandatory redetption, of the
l
Bonds"
I
defeasances,
release,substitution,1r sale of property securingrepaymentrf theBonds,
and
,
rating changes.
(b)
Wheneverthe University obtainsknowledge of the occurren~eora Listed
Event, the University shall as soon as possibletake suchsteps as are necessaryto detennineif
such event would constitute material infonna~ionwithin the meaningof the 1934A~t.
1
(c)
If the University has etennined that the occurrence of a Lit ted Eventis
material. the University shall file a notice 0 such occurrence with each National epositoryor
the Municipal Securities Rulemaking Board ~nd with each State Repository.
Section6.
Additional Information. Nothing in this Agreem~nt shallbe
deemed to preventthe University from disseminatingany other information, using~hemeans
of
dissemination set forth in this AgreementOf any other means of communication,
[ or including
any other informationin any University AnnJal Reportor notice of occurrenceof a istedEvent,
in addition to that which is required by this ~greement. If the University choosest~ includeany
info.~ation in any. Un.iversi~ Annual R~prrt or ~otice of occurrence ?f a .LiSt d Eventin
additIon to that whIch IS specifically requlrep by thIs Agreement,the UnIversity S all haveno
obligation underthis Agreementto updatesuchinformation or include it in any furn e University
Annual Reportor notice of occurrenceof a Listed Event.
I
,
...s~£~iQn.1.
Tenni~ati~n. Th~ University. reservesthe. right to ~enninate
its
oblIgatIon to provide annual financIal mf°"11atlonand notices of matenal events as setforth
above, if and when the University no longer remains an obligated personwith r spectto the
Bonds within the meaningof the Rule.
I
Section8.
Amendment.Waiver. Notwithstanding any other pro,*isionof this
Agreement, the University may amend this Agreement and any provision of this A~eement may
1/1530012.1
4
t
be waived, if such amendment or waiver is supported by an opinion of counsel ex ert in federal
securities laws, to the effect that such amendment or waiver wou1d not cause th undertakings
herein to vio1ate the Rule taking into account any subsequent change in or official interpretation
of the Rule.
Section 9.
Default. (a) In the event of a failure of the Univers'ty to provide
the Repositories the University Annual Report as required by this Agreement, he Beneficial
Owner of any Bond may take such actions as may be necessary and appropri te, including
seeking mandamus or specific perfomlance by court order. to cause the Univers ty to comply
with its obligations to provide lTniversity Annual Reports under this Agreement.
(b)
to
the
Bonds
under
A default under this Agreement shall not be deemed a defaU
f
the
Indenture
or
otherwise,
and
the
sole
remedy
under
this
Ag
t
with
ement
respect
in
the
event of any failure of the University to comply with this Agreement shall be an act.on to compel
perfonnance.
(c)
The University shall not be in default in any of its undertaki gs underthis
Agreement until ten days after it shall have received notice from a Beneficial 0 ner thatsuch
default has occurred;provided, that suchperiod shall be extendedto thirty days if uponreceipt
of such notice, the University has begunto comply with the provisions hereof and has takenall
steps then available to it to assuresuchcompliance but, becauseof circumstanc s beyondthe
University's control, it is unableto accomplishsuchcompliancewithin the ten-day eriod.
Section10. Certain Parties Not Liable: Expenses. None f the group
comprised of the trusteeunderthe Indenture,the paying agent for the Bonds, the re istrarfor the
Bonds, the depositoryfor any of the specialfunds with respectto the Bonds, the ndernTiterof
the Bonds, the bond counsel delivering an approving opinion with respect to t e Bonds,the
underwriter's counseland the counselfor the University shall have any liability or esponsibility
for complianceby the University with its undertakingsherein, and if the Universi obtainsfrom
any person, firm, corporation or entity assistancein complying with its undertaki gs herein,it
will compensatesuchperson, finn, corporation or entity in a reasonableand time y mannerfor
such assistanceas it may renderto the University.
r
Section11. Contract. This undertaking shall constitutea contraC betweenthe
University and the Beneficial Owners of the Bonds, but no other person, firm, c rporationor
entity shall have anyrights hereunder.
1/1530012.1
5
IN WITNESS WHEREOF, this Agreement has been duly authfrized by the
University and has been executed on behalf of the University by its President and ~ttestedby the
Secretary of its Board of Trustees, all as of the 9th day of January, 2007.
I
UNIVERSITY OF SOUTH ALABAl\tA
-I
-
By
Its President
Attest:
-
Secretaryof Its Board of Trustees
1/1530012.1
6
-
RATINGS:
Ambac
Insurance:
Mood)'
Underlying:
NEW
In
ISSUE.
the
the
BOOK-ENTRY
opinion
of
Indenture
interest
income
income
tax
on
Counsel.
to
Series
2006
the
of
the
the
2006
interest
Bonds
be
to
Bonds
see
income
continuing
pertaining
Ho)\'e\'er.
will
See
assuming
referred
purposes.
recipient
Series
Bond
herein
ONLY
on
exempt
will
"Tax
the
Series
from
compliance
certain
be
excludable
Exemption"
2006
Alabama
by
the
requirements
from
herein
Bonds.
income
of
gross
for
In
the
certain
opinion
University
the
with
Internal
income
of
other
of
Bond
the
the
herein
covenants
Code
recipient
Counsel,
Aaa
A2
"RATINGS"
Re,'enue
Federal
's:
Moody's:
selforth
of
thereof
tax
for
interest
the
Federal
consequences
the
in
1986.
to
incolne
the
on
taxation.
S100,000,000
UNIVERSITY OF SOUTH ALABAMA
University Tuition RevenueRefunding and
Capital Improvement Bonds
Series 2006
Due: December 1, as shownherein
Dated: December 1, 2006
SEE INSIDE COVER FOR SERIES, MATURITIES, INTEREST RATES AND PRICES OR YIELDS
The Series2006 bondsare issued solely as fully registeredbonds in a denominationof any integralmultiple
of $5,000. Principal is payable at the designatedcorporatetrust office of Bank of New York Trust Company,N.A.,
Bimlingham, Alabama, the Trustee. Interest (payable on June I, 2007, and on each December I andJune I
thereafter) is payableby checkmailed to the registeredholder by the Trustee.
The Series2006 Bonds are subject to redemption prior to maturity as described herein.
The Series2006 Bonds will be special obligations of the University of South Alabama securedby a
pledge of and payable solely from certain fees levied by the University against students enrolled at the
University, as provided in the Indenture. Neither the Series 2006 Bonds nor the pledge of the said revenues
and other agreements provided in the Indenture shall be or constitute a general obligation of the University
or an obligation of any nature \\'hatsoever of the State of Alabama, or be payable out of any moneys
appropriated by the State to the Universit.)'.
Paymentof the principal of and intereston the Series2006 Bonds when due will be insuredby a financial
guaranty insurancepolicy to be issued by Ambac AssuranceCorporation simultaneously with the deliveryof the
Series 2006 Bonds. See"BOND INSURANCE" herein.
(Accrued interestfrom December1~2006 to be added)
The Series 2006 Bonds are offered when, as and if issued by the University and receivedby the
Underwriters, subjectto prior sale, to withdrawal or modifications of the offer ~'ithout notice,and to theapproval
of legality of theSeries2006 Bonds by Bradley Arant Rose& WhiteUP, Birmingham. Alabama,Bond Counsel.It
is expected that the Series2006 Bonds in definitiveform will be available for delivery in New York,New York,on or
about January 9, 2007.
.THE FRAZER LANIER COMPANY
MERCHANT CAPITAL, LLC
INCORPORATED
GARDNYR MICHAEL CAPITAL, INC.
COMPASS BANK
RAYMOND JAMES AND
PROTECTIVE SECURITIES
ASSOCIATES,
INC.
A Division of ProEquities
December 14,2006
$100,000,000
UNIVERSITY OF SOUTH ALABAMA
Tuition Rt'J't'nut'Refunding and CapitallmproJ't'ment Bonds
Serit's.2006
Dated Dt'cembt'r I, .2006
Date of Maturity
(December1)
2024
2025
2026
2027
2028
2029
2030
2031
2036
Amount
$5.600,000.00
5,885,000.00
6,190,000.00
6,505,000.00
6,840,000.00
7,190,000.00
7,560,000.00
7,945,000.00
46,285,000.00
Interest
Rate
Price or
Yield
5.00%
4.09%
5.00
5.00
5.00
4.11
4.12
5.00
4.14
4.15
4.16
4.17
4.18
5.00
5.00
5.00
5.00
4.13
SummalJ' Profile of the University of South Alabama
(Pleaserefer to the entire Official Statement)
The University was founded on May 9, 1963 by an act of the Legislature of Alabama. Today, the Universityis a
major institution of higher learning in the State. The University was admitted to membcrship in theSouthern
Association of Colleges and Schools on December4, 1968. Total enrollment for Fall 2006 is 13,090.Of those
students, 9,874 areclassified asundergraduatestudentsand 3,012 are enrolled in graduateor professionalprograms.
For the academicyear ended June,2006,the University awarded 2,222 degrees,of which 1,366were Baccalaureate
Degrees,714 MastersDegrees,60 M.D. Degrees,11Ph.D. Degrees,and 71 Para-ProfessionalHcalth Degrees.
For the academic year ended June 2006, the University employed 729 full-time faculty persons. Approximately
46% of non-medicalfaculty are tenured.The University employs 5,148personsin all categories. I
The main campus in Mobile, Alabama, consists of 1I & major buildings, including
facilities.
hospital and medica! related
Those facilities include buildings providing 1,763 spaces available'for student residency on campus,
For its fiscal yearended September30, 2006,the University received from Federal,Stateand private sources,
grants
and contracts approximately$78,217,000and an additional$101,203,000 from direct State of Alabama legislative
appropriations. Tuition and fees received during fiscal 2006 (net of scholarship allowances)was $47,236,000.
Total revenues from the University's Hospital and related medical facilities were $224,105,000. (Pleaseseethe
Audited Financial StatementsJorFiscal 2006 attachedto this Ojjicial Statement).
\"~~l:il
Subsequentto theissuanceof the Series2006 Bonds,the total principal amount(including the current compounded
amount of Series 1999 Capital Appreciation Bonds) of indebtednessof the University payable from Pledge
Revenues are expectedto be approximately$213,728,392(the principal amountof the Series 2006 Bonds is subject
to change).
UNIVERSITY OF SOUTH ALABAMA
ADMINJSTRA TION
President
V. Gordon Moulton
Trustees:
0
~
J
Mr. J. L. Chestnut,Jr.
Attorney
':;~'~;
Dr. StevenP. Furr
Physician
~:"ii:~;¥[:~,
Mr. J. Cecil Gardner
Attorney
The Honorable SamuelL. Jones
Mayor,
Mr. Donald L. Langham
Labor Union Leader. Retired
Ms. Bettye R. Maye
Retired
":~c~;~
,
City
of
Mobile
I;\\;j
;:it1
(1 ~
*1',
i;;;::~
;&:;;1
Ms. Christie D. Miree
Business Administration
Mr. Mayer Mitchell
Businessman, Mitchell Brothers, Inc.
The Honorable Bryant Mixon
Sheriff, Dale County, Alabama
The Honorable JamesP. Nix
Mayor, City ofFairhope,
Mr. JohnM. Peek
Attorney
Dr. StevenStokes
Physician
Mr. Larry D. Striplin, Jr.
Businessman
Mr. JamesA. Yance
Attorney, Retired
Retired
Ex Officio:
The Honorable Bob Riley
Dr. Joseph B. Morton
Governor,State of Alabama
State Superintendentof Education
No dealer, brokrr, salesman or any other person has been authorized by the University, or the IJnder"Titers to give any inlormatiun
or to make any representations olher than as contained in this Official Statement and, "given or made, such other informationor
representations must not be relied upon as having been given or aulhorized by any of the foregoing. This Official Statemenldoesnot
constitute an offer to sell or the solicitation of an olTer to buy, nor shall there by any sale of the Series 2006 Bonds by any prrson, in
any jurisdiction in whicb it is unlawful for such person to make such olTer, sulicitation or sale. The information and exprr!5ionsof
opinion herein are subject to change ,,'itbout notice and neither the delivery of this Official Statement nor any sale made hereunder
shall, under any circumstances, creatr any inlplication that there has been no change in Ihe affairs of the University sinceIhr date
hereof.
TABLE OF CONTENTS
OFFICIAL STATEMENT
SI00,000,000
UNIVERSITY OF SOUTH ALABAMA
University Tuition Revenue Refunding and
Capital Improvement Bonds
Series 2006
Dated December I, 2006
INTRODUCTION
The purpose of this Official Statementwhich includes the cover page and the Exhibitsis to
provide infonnation to all who may become owners of the $100,000,000 University of South Alabama University
Tuition RevenueRefunding and Capital ImprovementBonds, Series 2006 (the "Series 2006 Bonds"). TheSeries
2006 Bonds are being issued pursuant to the provisions of a Trust Indenture (the "indenture") betweenthe
University of South Alabama and The Bank of New York Trust Company, N.A. (the "Trustee"), datedas of
December ], 2006. The Series 2006 Bonds, together with t\VO presently outstanding series of Bondsand any
Additiona] Bonds which may hereafter be issued under the Indenture, are herein collectively referred to as the
"Bonds."
Definitions of certain words and terms having initial capital letters used herein are definedin the
Indenture or in the instrument or document in the description of which such word or term is used. Reference
is
hereby made to the full text of the documentsand instrumentsbriefly described herein which may be obtainedfrom
the Underwriters or from the University during the period of the offering.
The Governor, the State Superintendentof Education and the appointed trusteestogether
constitute a public body corporate under the name University of SouthAlabama (the "University"). The University
is located in Mobile, Alabama,and its addressis Mobile, Alabama 36688.
PURPOSE
General
General. The proceeds of the Series2006 Bonds will be applied (a) to pay the costs of certain
capital improvements (hereinafter referred to), (b) to refund the outstanding Series 1996 Bonds (the "Refunded
Bonds"), and (c) to paythe expensesof issuing the Series2006 Bonds.
Capital Improvements. Proceedsof the Series 2006 Bonds will be used to makecapital
improvements representinga portion of the University's five and ten-year capital improvementprogram. Generally,
the capital improvementsto be funded with the Series2006 Bonds consist of constructionof the Mitchell Cancer
Institute, the Collegesof Nursing and Allied Health Professions building, a Student Recreation Center,the Bell
Tower, the Engineeringand Sciencesbuilding, a softball field, athletics fieldhouse, and improvements to campus
entrances to include newportals; renovation of the Administration, StudentCenter and Alpha South buildings;and
other capital improvementsthroughout the campus.
Refunding. A portion of the proceedsof the Series 2006 Bonds will be used to refundthe
Refunded Bonds. Contemporaneouslywith the issuanceof the Series2006 Bonds, the Board and the Bankof New
York Trust Company,N.A. will enterinto an EscrowTrust Agreementdated as of December1,2006, into whichthe
University will deposit,out of proceeds of the Series2006 Bonds, a cash amount sufficient to pay the principal,
interest and call premiumon the Refunded Bonds on the redemptiondate.
ESTIMATED
USE OF PROCEEDS
The proceeds from the sale of the Series 2006 Bonds are expectedto be applied substantiallyas
follows:
Sources
Par Amount
Original Issue Premium
$100,000,000.00
6.780.086.85
TOTAL
$106,780,086.85
Uses
$ 81,876,803.23
23,560,327.21
CapitalImprovements
Refunding
Cost of issuance(including underwriting discount,
Bondinsuranceand legal)
TOTAL
1.342.956.41
$) 06,780,086.85
THE SERIES 2006 BONDS
General Description
The Series 2006 Bonds will be datedDecember I, 2006, and will bear interest(payableonJuneI,
2007, and on eachJune 1 and December1 thereafteruntil maturity) at the rates and will mature on December
I in
the years and in the amounts set forth on the coverpageof this Official Statement. The Series 2006 Bondswill be
issuable only as fully registered bonds without coupons in the denomination of $5,000 or any integralmultiple
thereof.
Except as hereinafterdescribedunder"Book-Entry Only System",the principal of the Series
2006
Bond will be payableat the designatedcorporatetrust office of the Trustee upon presentationand surrender
of the
Series 2006 Bondsas they mature. Interest on Series2006 Bonds wiIJ be paid by the Trustee by checkor draft
mailed to the registeredowner of the Series2006 Bond at the addressshown on the registry books of theTrustee
pertaining to the Series2006 Bonds.
No charge will be made for any exchangeor transferof the Series2006 Bonds, but the registered
owner thereof shallbe responsible for paying all taxes and other governmentalchargesrelating to such transferor
exchange. In the event a Series2006 Bond is lost, stolen, destroyed or mutilated, the University and theTrustee
may require satisfactoryindemnification for the replacementthereof and may chargethe holder or ownerofsuch
bond with their feesand expensesin connectionwith the replacementthereof.
Redemption of theSeries 2006 Bonds Prior to Maturity
(a)
Optional Redemption. Those of the Series 2006 Bonds having a stated maturityon
December 1,2017,and thereafter will be subjectto redemptionprior to their respectivematurities, at the optionof
the University, asa whole or in part, on December1,2016, and on any date thereafter(and if in part,in such
maturities as the University shall select, and if less than all of a single maturity is to be redeemed thoseto be
redeemed to be selectedby the Trusteeby lot) atand for a redemptionprice with respectto eachSeries2006Bond
2
(or principal ponion thereof redeemed)equal to the par or face amountof each Series 2006 Bond redeemedplus
accrued interest to the date fixed for redemption.
(b)
Scheduled Mandatory Redemption of Term Series 2006 Bonds Due 2036. Those of
the Series 2006 Bonds having a stated maturity in 2036 shall be subject to scheduled mandatory redemption and
payment, and the University shall redeem and pay such Series 2005 Bonds, in accordance with the schedule
hereinafter set forth, at and for a redemption price, with respect to each such Series 2006 Bond redeemed, equal to
the principal amount thereof plus accrued interest thereon to the date fixed for redemption, but only in the following
aggregate principal amounts on December I in the following with those to be redeemed to be selected by theTrustee
by lot.
Redemption Date
(December 1)
Principal Amount
Required to be Redeemed
2032
2033
2034
2035
2036 (final maturity)
$ 8,355,000
8,785,000
9,235,000
9,705,000
10,205,000
Notice of Redemption. Notice of redemption is required to be mailed by United States registered
or certified mail to the registered owner of each Series 2006 Bond not more than sixty (60) nor less than thirty (30)
days prior to the date fixed for redemption at the address shown on the registry books of the Trustee. No further
interest will accrue after the date fixed for redemption on the principal of any Series 2006 Bond called for
redemption upon notice duly given as provided in the Indenture and if payment therefor has been duly providedand
in such event, any Series 2006 Bond (or portion thcreof) called for redemption will no longer be protected by the
provisions of the Indenture.
In the event that less than all of the outstanding principal of any Series 2006 Bond is to be
redeemed, the registered owner thereof shall surrenderthe Series 2006 Bond that is to be prepaid in partto the
Trustee in exchange,without expenseto the owner, for a new Series 2006 Bond of like tenor except in aprincipal
amount equal to the unredeemedportion of the Series2006 Bond.
Boon-Entry Only System
The Series 2006 Bonds will be issuedas fully-registered Bonds in the name of Cede & Co.,as
nominee of DTC, as registered owner of the Series 2006 Bonds. Purchasersof such Series 2006 Bonds will not
receive physical delivery of Series2006 Bond certificates. For purposesof this Official Statement,so long asall of
the Series 2006 Bonds are in the custodyof DTC, referencesto Series 2006 Bondholders or Owners shallmean
DTC or its nominee.
DTC will act as securities depository for the Series 2006 Bonds. The Series 2006 Bonds will be
issued as fully-registered securities in the name of Cede & Co., DTC's partnership nominee ("Cede") or suchother
nominee as may be requested by an authorized representative of DTC. One fully-registered Series 2006Bond
certificate will be issued for each maturity of the Series 2006 Bonds, in the aggregate principal amount of such
maturity, and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System,a
"clearing corporation" within the meaning of the New York Unifonn Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC
holds securities that its participants (the "Direct Participants") deposit with DTC. DTC also facilitates post-trade
settlement among Direct Participants of sales and other securities transactions in deposited securities, through
electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminatesthe
need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities
3
brokers and dealers,banks,trust companies,clearing corporationsand certain other organizations. DTC isa whollyowned subsidiaryof The Depository Trust & Clearing Corporation ("DTCC"). DTCC, in turn, is o"lled by a
number of Direct Participantsof DTC and membersof the National SecuritiesClearing Corporation, FixedIncome
Clearing Corporation,and Emerging Markets Clearing Corporation(NSCC, FICC, and EMCC, also subsidiaries
of
DTCC), as well as by the New York Stock Exchange,Inc., the American Stock Exchange, LLC, and theNational
Association of Securities Dealers,Inc. Accessto the DTC systemis also availableto others suchas bothU.S. and
non-U.S. securities brokers and dealers, banks, trust companiesand clearing corporations that clear throughor
maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants").
DTC has Standard& Poor's highest Rating:AAA. The DTC Rulesapplicableto its Direct and Indirect Pal1icipants
are on file with the Securities and Exchange Commission. More infonnation about DTC can be found at
~dtcc.com
and~~:!~9.r£.
Purchasesof Series 2006 Bonds, in the denominationof $5,000 principal amountor anyintegral
multiple of $5,000 in excessthereof, under the DTC system mustbe made by or through Direct Participants,
which
will receive a credit for the Series 2006 Bondson DTC's records. The ownershipinterest of eachactualpurchaser
of each Series 2006 Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Pal1icipants'
records. Beneficial Owners will not receive written confirmation from DTC of their purchase. BeneficialOwners
are expected, however, to receive written confirmations providing details of the transaction, as well asperiodic
statementsof their holdings, from the Direct or Indirect Participantthrough which the Beneficial Owner entered
into
the tTansaction. Transfersof ownership interestsin the Series2006 Bonds are to be accomplishedby entriesmade
on the books of Direct and Indirect Participantsacting on behalf of Beneficial Owners. Beneficial Ownerswill not
receive certificatesrepresenting their ownershipinterests in Series2006 Bonds, except in the event that useof the
book-entry systemfor the Series 2006 Bondsis discontinued.
To facilitate subsequenttransfers, all Series2006 Bonds deposited by Direct Participantswith
DTC are registeredin the name of DTC's partnershipnominee,Cede,or suchothernominee as maybe requested
by
an authorized representativeof DTC. The depositof Series 2006Bonds with DTC and their registrationin thename
of Cede or suchother DTC nominee does not effect any changein beneficial ownership. DTC hasno knowledgeof
the actual Beneficial Owners of the Series2006 Bonds; DTC's records reflect only the identity of theDirect
Participants to whose accountssuch Series2006 Bonds are credited, which mayor may not be the Beneficial
Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdingson
behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants,by Direct
Participants to Indirect Participants,and by Direct Participantsand Indirect Participantsto Beneficial O\\'nerswillbe
governed by arrangementsamong them, subjectto any statutory or regulatory requirementsas maybe in effectfrom
time to time.
Redemptionnotices shall be sent to DTC. If less than all of the Series 2006 Bonds arcbeing
redeemed, DTC's practice is to determine by lot the amount of the interest of eachDirect Participantin suchSeries
2006 Bonds to beredeemed.
Neither DTC nor Cede (nor any other DTC nominee)will consentor vote with respecttoSeries
2006 Bonds unlessauthorized by a Direct Participant in accordancewith DTC's Procedures. Under its usual
procedures, DTC mails an Omnibus Proxy to the Board as soonas possible after the record date. The Omnibus
Proxy assigns Cede's consenting or voting rights to those Direct Participantsto whose accountsthe Series2006
Bonds are creditedon the record date (identified in a listing attachedto the OmnibusProxy).
Principal, redemption price and interest paymentson the Series2006 Bonds will be madeby the
Trustee to Cede or such other nominee as may be requestedby an authorizedrepresentative of DTC. DTC's
practice is to credit Direct Participants' accounts,upon DTC's receiptof funds andcorresponding detail infonnation
from the Board or Trustee,on a payment datein accordancewith their respectiveholdings shown on DTC's records.
Payments by Direct and Indirect Participantsto Beneficia] Owners will be governedby standing instructionsand
customary practices,as in the case with securitiesheld for the accountsof customersin bearer fonT!or registeredin
"street name," and will be the responsibility of such Direct and Indirect Participantand not of DTC,the Trusteeor
the Board, subjectto any statutory or regulatoryrequirementsas may be in effect from time to time. Paymentof
principal, redemptionprice and interest to Cede (or such othernominee as may be requested by an authorized
4
reprcsentative of DTC) is the responsibility of the Board or the Trustee, disbursement of such payments 10 Dircct
Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial O\\'nerswill be
the responsibility of Direct and Indirect Participants.
NEITHER THE CITY NOR THE BANK
WILL HAVE ANY RESPONSIBILITY OR
OBLIGA TION TO SUCH PARTICIPANTS, OR TO THE PERSONS FOR WHOM THEY ACT AS NOMINEES
WITH RESPECT TO THE SERIES 2006 BONDS, OR TO ANY BENEFICIAL OWNER IN RESPECT OF THE
ACCURACY
OF ANY RECORDS MAINTAINED
BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT
PARTICIPANT, THE PAYMENT BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT
OF ANY AMOUNT IN RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE
SERIES 2006 BONDS, ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO SERIES
2006 BONDHOLDERS
UNDER THE AUTHORIZING
ORDINANCE, THE SELECTION BY DTC OR ANY
DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY PERSON TO RECEIVE PA YMENTIN THE
EVENT OF PARTIAL REDEMPTION OF THE SERIES 2006 BONDS WITH RESPECT TO LESS THAN ALL
OF THE SERIES 2006 BONDS, OR ANY OTHER ACTION TAKEN BY DTC AS REGISTERED SERIES 2006
BONDHOLDER.
For every transferand exchangeof the Series2006 Bonds,the Beneficial Owner may bechargeda
sum sufficient to cover any tax, fee or other governmentalcharge that may be imposed in relation thereto,and any
reasonablefees and expensesof the Trusteeand the costsincurred in preparing Series2006 Bond certificates.
DTC may discontinue providing its services as securities depository with respect to theSeries
2006 Bonds at any time by giving reasonablenotice to the Board. In the event of the discontinuance ofthc bookentry system for the Series 2006 Bonds, Series 2006 Bond certificates will be printed and deliveredand the
following provisions of the Indenture will apply: (i) principal of the Series 2006 Bonds will be payableupon
surrender of the Series2006 Bonds at the designatedoffice of the Trustee; (ii) Series2006 Bonds may be transferred
or exchanged for other Series 2006 Bonds of authorized denominations as set forth in the next succeedingtwo
par~graphs; and (iii) Series 2006 Bonds will be issued in denominations as described in the front portionof the
Official Statementunder "THE SERJES2006 BONDS".
The Board may decide to discontinueuse of the systemof book-entry-only transfers throughDTC
(or a successordepository). In that event,Series2006 Bond certificates will be printed and delivered to DTG.
SECURITY
General
The Series2006 Bonds will be issued under the Indenture and will constitute limited obligations
of the University payable solely from and securedby a lien on and a pledge of the Pledged Revenues(hereinafter
defined) levied and collected by the University. The term "Pledged Revenues"is defined in the Indentureto mean
the amounts received by the University from GeneralFeesand additional fees, if any, that may be subjectedto the
lien of the Indenture pursuantto a SupplementalIndenture. The term "General Fees"is defined in the Indenture
to
mean each fee now or hereafterlevied by the University as a generaltuition charge againststudentsenrolledat the
University. The SupplementalIndenture underwhich the Series 2006 Bonds are issued will clarify the definitionof
Pledged Revenuesto include the application fee,the out-of-state fee,the registration fee,and the building fee.
Excluding the Series 1996 Bonds which are to be refunded with proceeds of the Series2006
Bonds, two series of Bonds designated Series 1999 and Series 2004 (the "Outstanding Bonds") will remain
outstanding following the issuanceof the Series2006 Bonds. As of December 1,2006, the outstandingprincipalof
the Outstanding Bondswas $113,698,392.
The Series2006 Bonds are securedpro rata and on an equal lien basisone with the other,withthe
Outstanding Bonds and with any Additional Bonds that may be hereafterissued underand subject to the termsand
conditions of the Indenture,by a pledge of the PledgedRevenues(the Outstanding Bonds, the Series 2006Bonds
and any Additional Bonds issuedhereafterarehereinafterreferred to collectively as the "Bonds").
5
The Bonds shall nevcr be payable from any funds at any time provided for or appropriated by the
State of A labama. and shall not be a charge on the general credit or tax revenues of the State. Neither theStatenor
the University shall be obligated, directly or indirectly, to contribute any funds, property or resources to thepayment
of the Bonds except the Pledged Revenues.
SpecialFunds
The special funds are more fully described under the caption "Summary of Certain Provisionsof
the Indenture," below.
Additional Bonds
The Indenture authorizes the issuance of Additional Bonds, such as the Series 2006 Bonds,subject
to the provisions of the Indenture without express limit as to principal amount. See "Summary of Indenture,"
infra, for coverage and other requirements. The Additional Bonds will be secured on a parity or equallicn basis
with the pledge of the Pledged Revenues for the benefit of all of the Bonds outstanding under the Indenture.
Debt Semce Requirements
The following table sets forth the debt service on the Series 1999 Bonds and the Series2004
Bonds as of September30, 2006 (the end of Fiscal Year 2006 of the University)and the debtservice on theSeries
2006 Bonds (excludingdebt service on Series1996 Bondsto be refunded):
Outstanding
Fiscal Year
(September30)
Debt Service
Series2006
Bonds
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
$2,500,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
10,460,000
10,457,875
10,461,000
10,458,625
10,460,000
10,459,250
10,460,500
10,457,875
10,460,375
10,461,875
10,461,375
10,457,875
10,460,125
DebtService
Series 1999
Bonds
DebtService
Series2004
Bonds
$276,076.25
2,951,927.50
3,448,590.00
3,848.977.50
4,051,238.75
4,250,000.00
4,450,000.00
4,650,000.00
4,650,000.00
4,650,000.00
7,550,000.00
7,545,000.00
7,545,000.00
$3,608,230
3,601,630
3,605,880
3,611,505
2,818,755
2,638,255
2,635,880
2,495,755
2,497,880
2,496,575
2,599,720
2,599,300
2,597,215
8,670,125
8,670,000
8,671,625
8,674,000
8,666,375
t\
Total Debt
Service
$6,384,30615
11,553,557.50
12,054,470.00
12,460,482.50
11,869,993.75
11,888,255.00
12,085,880.00
12,]45,755.00
12,147,880.00
12,]46,575.00
15,]49,720.00
15,]44,300.00
15,142,215.00
13,670,125.00
13,670,000.00
13,674,000.00
13,674,000.00
13,666,375.00
10,460,000.00
]0,457,875.00
10,46],000.00
10,458,625.00
10,460,000.00
10,459,250.00
10,460,500.00
10,457,875.00
]0,460,375.00
10,461,875.00
10,461,375.00
10,457,875.00
10,460,125.00
Pledged Revenues
The following is a summaryof the annualrevenues from Pledged Revenues for the fiscalyears
ended September30 shownbelow:
Amount
FiscalYear
$ 54,077,519
47,852,645
43,183,114
39,663,135
36,284,136
2006
2005
2004
2003
2002
Tuition increases were placed into effect for certain of the years shown above. The foregoing information has been
extracted by the University from the audited financial statements of the University and is believed to bereliable;
however, because such financial information was not presented in the financial statements of the University in the
foregoing form, such information is not audited. Reference is hereby made to the audited financial statementsof the
University appearing as Exhibit A hereto and which, for the other periods, are available on request from the
Underwriters during the period of the offering made hereby.
BOND INSURANCE
Payment Pursuantto
Financial Guaranty Insurance Policy
Ambac AssuranceCorporation("Ambac Assurance")has made a commitment to issue a financial
guarantyinsurancepolicy(the "Financial GuarantyInsurancePolicy") relating to the Series 2006 Bonds,effectiveasof
the date of issuanceof the Series 2006 Bonds. Under the termsof the Financial Guaranty InsurancePolicy,Ambac
Assurancewill pay to The Bank of New York, in New York, New York, or any successorthereto(the "Insurance
Trustee"), that portionof the principal of andinterest on the Series2006 Bonds that shall becomeDue for Payment
but
shall be unpaid by reasonof Nonpaymentby the Obligor (as suchterms are defined in the Financial GuarantyInsurance
Policy). Ambac Assurancewill make suchpaymentsto the InsuranceTrustee on the later of the date on whichsuch
principal and/or interestbecomesDue for Paymentor within one business day following the date on which Ambac
Assurance shall havereceivednotice of Nonpaymentfrom theTrustee. The insurancewill extend for the termof the
Series2006 Bondsand,onceissued,cannotbe canceledby AmbacAssurance.
The Financial Guaranty Insurance Policy will insure payment only on stated maturity datesand on
mandatory sinking fund installment dates, in the case of principal, and on stated dates for payment, in the case ofinterest.
I f the Series 2006 Bonds become subject to mandatory redemption and insufficient funds are available for redemptionof
all outstanding Series 2006 Bonds, Ambac Assurance will remain obligated to pay the principal of and intereston
outstanding Series 2006 Bonds on the originally scheduled interestand principal payment dates, including mandatory
sinking fund redemption dates. In the event of any acceleration of the principal of the Series 2006 Bonds, the insured
payments will be made at such times and in such amounts aswould have been made had there not been an acceleration,
except to the extent that Ambac Assurance elects, in its sole discretion, to pay all or a portion of the acceleratedprincipal
and interest accrued thereon to the date of acceleration (to the extent unpaid by the Obligor). Upon payment of all such
accelerated principal and interest accrued to the acceleration date, Ambac Assurance's obligations under the Financial
Guaranty Insurance Policy shall be fully discharged.
In the eventthe Trustee hasnotice that anypaymentof principal of or intereston a Series2006Bond
that has becomeDue for Paymentand that is made to a holderby or on behalf of the Obligor hasbeen deemed
a
preferentialtransferandtheretoforerecoveredfrom its registered
owner pursuantto the United StatesBankruptcyCode
in accordancewith a final, non-appealableorder of a court of competentjurisdiction, such registeredownerwill be
entitled to paymentfrom AmbacAssuranceto the extentof suchrecovery if sufficientfunds are not otherwiseavailable.
7
The Financial Guaranty Insurance Policy does not insure any risk other than Nonpayment (as set forth in theFinancial
Guaranty Insurance Policy). Specifically, the Financial Guaranty Insurance Policy does not cover:
).
paymenton acceleration,as a result of a call for redemption(other than mandatory
sinking
fund redemption)or as a resultof anyother advancement
of maturity;
2.
payment of any redemption, prepaymcnt or acceleration premium; and
3.
nonpaymentof principal or interestcausedby the insolvcncyor negligenceof theTrustce,
Paying Agent or Bond Registrar,if any.
If it becomes necessary to call upon the Financial Guaranty Insurance Policy. payment ofprincipal
requires surrender of the Series 2006 Bonds to the Insurance Trustee together with an appropriate instrumentof
assignment so as to permit ownership of such Series 2006 Bonds to be registered in the name of Ambac Assuranceto the
extent of the payment under the Financial Guaranty Insurance Policy. Payment of interest pursuant to theFinancial
Guaranty Insurance Policy requires proof of holder entitlement to interest payments and an appropriate assignm:ntof the
holder's right to payment to Ambac Assurance.
Upon payment of the insurancebenefits,Ambac Assurancewill becomethe owner of theSeries
2006Bond, appurtenantcoupon, if any, or right to paymentof the principalof or intereston suchSeries2006Bondand
will be fully subrogated
to the surrenderingholder'srightsto payment.
Ambac Assurance Corporation
Ambac Assuranceis a Wisconsin-domiciledstock insurancecorporationregulated by theOfficeof
the Commissionerof Insurance of the Stateof Wisconsin,and is licensedto do businessin 50 states,the Districtof
Columbia, the Territory of Guam, the Commonwealthof Puerto Rico and the U.S. Virgin Islands, with admitted
assets of approximately $9,699,000,000 (unaudited) and statutory capital of approximately $6,223,000,000
(unaudited) as of September 30, 2006. Statutory capitalconsists of Ambac Assurance'spolicyholders' surplus
and
statutory contingencyreserve. Standard& Poor'sRatingsServices,a division of The McGraw-Hili Companies,
Inc.,
Moody's InvestorsService, Inc. and Fitch Ratingshave eachassigneda triple-A financial strengthrating 10Ambac
Assurance.
Ambac Assurancehas obtained a ruling from the Internal RevenueServiceto the effectthatthe
insuring of an obligation by Ambac Assurancewill not affect the treatment for federalincome tax purposes
of
interest on suchobligation and that insuranceproceedsrepresentingmaturing interestpaid by Ambac Assurance
under policy provisions substantially identicalto thosecontained in the Financial GuarantyInsurance Policyshallbe
treated for federalincome tax purposesin the samemanneras if suchpaymentswere madeby the ObJigor.Ambac
Assurance makesno representationregarding the Series2006 Bonds or the advisability of investing in theSeries
2006 Bonds andmakes no representationregarding, nor has it participated in the preparation of, this Official
Statement other than the information supplied by Ambac Assurance and presentedunder the heading'BOND
INSURANCE".
Available Information
The parent companyof Ambac Assurance,Ambac Financial Group, Inc. (the "Company"),is
subject to the informationalrequirementsof the SecuritiesExchangeAct of 1934,asamended(the "Exchange
Act"),
and in accordancetherewith files reports,proxy statementsand other information with the Securitiesand Exchange
Commission (the"SEC"). These reports, proxy statementsand other information can be read and copiedat the
SEC's public referenceroom at 100F Street,N.E., Room 1580, Washington,D.C. 20549. Pleasecall the SECat 1800-SEC-0330 for further information on the public reference room. The SEC maintains an internetsite at
http://www.sec.gov that contains reports, proxy and information statements and other information regarding
companies that file electronically with the SEC,including the Company. These reports,proxy statementsandother
infonnation canalsobe read at the offices of the NewYork Stock Exchange,Inc., 20 Broad Street, New York,New
York 10005.
8
7.
Copies of Ambac Assurance's financial statements prepared in accordance with statutory
accounting standardsare available from Ambac Assurance. The addressof Ambac Assurance's administrative
offices is One StateStreet Plaza, 19th Floor, New York, New York 10004,and its telephone number is (212)668-
0340.
Incorporation of Certain Documents by Reference
The following documents filed by the Company with the SEC (File No.
this Official Statement:
I.
.}0777) are incorporated by referencein
The Company's Annual Report on Fonn JO-K for the fiscal year ended December 3 J, 2005 andfiled on
March 13, 2006;
2.
The Company'sCurrent Reporton Form 8-K datedand filed on April 26, 2006;
3.
The Company'sQuarterly Reporton Form 10-Q for the fiscal quarterly period ended March 31.2006and
filed on May 10,2006;
4.
The Company'sCurrent Reporton Fonn 8-K datedJuly 25, 2006 and filed on July 26, 2006;
The Company'sCurrent Reporton Form 8-K datedand filed on July 26, 2006;
6.
The Company'sQuarterly Report on Fom1 10-Q fOTthe fiscal quarterly period ended June 30,2006and
filed on August 9,2006;
The Company'sCuTTentReporton Fonn 8-K datedand filed on October 25, 2006; and
8.
The Company'sQuarterly Reporton Fonn 10-Q for the fiscal quarterly period ended September30,2006
and filed on November8,2006.
All documents subsequentlyfiled by the Company pursuantto the requirementsof the Exchange Act afterthedate
of this Official Statementwill be availab1efor inspection in the same manner as described above in "Available
lnfonnation",
UNIVERSITY OF SOUTH ALABAMA
General
The University of SouthAlabama (the "University") was created by Act No. 157 adoptedatthe
Secondspecial Sessionof the Legislatureof Alabama of 1963(now Sections16-55-1 et seq. of the code of Alabama
of 1975) (the .,Act"). The University, with an enrollment of over 13,000 students,serves as a major centerofhighquality and accessibleundergraduate,graduate,and professionaleducation. The mission of the University actively
embraces the functions of teaching, research, public service and health care through which it pursues
the
preservation, discovery,conununicationand application of knowledge. The University was admitted to membership
jn the Southern Associationof Collegesand Schools ("SACS") in 1968and is fully accreditedby the Commission
of Colleges of SACSto award baccalaureate,
master's and doctoral degrees.
The Act provides for a Board of Trusteesas the governing body of the University with all ofthe
rights, privileges andauthorities necessaryto promote the purpose of its creation, which is to establish andprovide
for the maintenanceandoperation of a StateUniversity in Mobile County,Alabama. The Board of Trusteesconsists
of seventeenmembers.Currently, thereis one vacant position. The Governorof the State of Alabama andtheState
Superintendent of Educationare ex-officio members of the Board of Trustees. Three members of the Boardof
Trustees are appointedfrom Mobile County. Three membersare appointedfrom the state at large. One member
is
appointed from eachof the nine State Senatorial Districts as these Districts were designated at the timethe
University was organized. All Trusteesexcept ex-officio membersare appointed by the Governor by andwiththe
advice and consentof the State Senate,andhold office for a term of twelve years and until their successorsshallbe
appointed and qualified. The presentmembersof the Boardof Trusteesare as follows:
9
Nameof Trustee
Mr. J.L. Chestnut,Jr.
Dr. StevenP. Furr
Mr. J.Cecil Gardner
The HonorableSamuelL. Jones
Mr. Donald L. Langham
Ms. BettyeR. Maye
Ms. ChristieD. Miree
Mr. Mayer Mitchell
The Honorable Bryant Mixon
The HonorableJamesP. Nix
Mr. JohnM. Peek
Dr. StevenStokes
Mr. Larry D. Striplin, Jr.
Mr. JamesA. Vance
The HonorableBob Riley
Dr. JosephB. Morton
Occupation
Attorney
Physician
Attorney
Mayor, City of Mobile
Labor Union Leader, Retired
Educator, Retired
Business Administration
Businessman, Mitchell Brothers, Inc.
Sheriff, Dale County, Alabama
Mayor, City of Fairhope, Retired
Attorney
Physician
Businessman
Attorney, Retired
Governor, State of Alabama
State Superintendent of Education
Term of Office
September 30,2013
September 30,2017
September 30,2013
September 30,2013
September 30,2009
September 30,2017
September 30,2013
September 3D,2009
September 30,2013
September 30,2009
September 30,2017
September 30,2017
September 30,2017
September 30,2009
Ex Officio
Ex Officio
The Board of Trustees appoints the Presidentof the University. Mr. V. Gordon Moultonhas
served as Presidentof the University since July 29, 1998. Mr. Moulton recelved his M.B.A. from Emory University.
He joined the faculty of the College of Businessat the University in 1966. In 1968,he was appointed Directorof
University Computer Services, while continuing to serve as a faculty member. He was appointedDean of
Administrative Servicesin 1977, and, in 198O,he was instrumentalin establishingthe Departmentof Computer
and
Information Sciencesand served asits Dean. From 1983 until his appointmentas President,Mr. Moulton servedas
Vice Presidentfor Servicesand Planning.
The organization below the Board of Trustees is composed of the President and six Vice
Presidents: SeniorVice President for Academic Affairs; Vice President for Health Sciences;Vice President
for
Development andAlumni Relations; Vice Presidentfor StudentAffairs; Vice Presidentfor Health SystemsandVice
President for FinancialAffairs.
Under the present organization,the University is comprised of a College of Arts and Sciences,
College of Business,College of Education,College of Engineering,College of Medicine,College of AlliedHealth
Professions, Collegeof Nursing, a Graduate School, a School of Computer and Infomlation Sciencesand aSchool
of Continuing Education,eachheadedby anacademicdean. Departmentsoperateunderthe direction of department
chairs, who work in coordination with the faculty and report directly to the deans.
The University was admittedto membershipin the Southern Associationof Colleges andSchools
at the annual meetingon December4, 1968.
Degreesand Programs
Through its ten colleges and schools,the University awards the bachelor's degreein almostfifty
majors or areas,the master's degree in thirty-two majors or areasand the doctoratedegreein eight majors orareas.
In addition, post-secondarycertificates are offered in four areas. In the period 1998through 2006,the Universityof
South Alabama addedten new academicprogramsto meetthe needsof studentsand the state:B.S.B.A. Electronic
Commerce, B.S. Meteorology,M.S. OccupationalTherapy,Bachelorof Social Work, M.S. Instructional Design
and
Development, Doctor of Audiology, M.Ed. Reading,Doctor of Physical Therapy,M.S. Environmental Toxicology
and Doctor of NursingPractice. During that sameperiod, in orderto make the bestuse of resources,the University
closed five programs:B.A. Economics,B.S.B.A. Managerial Economics,B.M. Music Performance,B.M. Music
Theory, and B.A. Art History.
10
Sum/nary Enrolllnent Profile -Fall
2006
Number
1,347
3,741
1,731
2,260
930
313
2,065
303
394
6
Collegeof Allied HealthProfessions
Collegeof Arts andSciences
Mitchell College of Business
Collegeof Education
Collegeof Engineering
Collegeof Medicine
Collegeof Nursing
Schoolof Continuing Educationand SpccialPrograms
Schoolof Computer and Information Sciences
GraduateSchool (M.S. EnvironmentalToxicology)
Tota].
Percent
10.3
28.6
13.2
17.3
7.1
2.4
15.8
2.3
3.0
-S2J
~
100.0%
.Excludes 213 medical residents.
Enrollment and Trends
Total Enrol/ment by Head Count
Fall 2002
Undergraduate
Graduate/Professional
Unclassified
Total
Fall 2003
9,568
9,905
2,925
266
13.096
2,600
155
12.323
Fall 2004
10,136
2,990
214
~
Fall 2005
9,957
2,978
187
13.122
Fall 2006
9,874
3,0]2
204
13.090
Total Enrollment byFTE
Fall 2002
Undergraduate
Graduate/Professional
7,926
Total
~
Fall 2003
8,374
~
l.§.Q2
~
Fall 2004
Fall 2005
8,477
~
~
8,414
~
~
Fall2006
8,430
6.Q21
~
AcceptanceRate -Freshmen
Applied
Admitted
Acceptance rate
Fall 2003
Fall 2002
2,683
2,930
2,217
75.7%
2,485
92.6%
Fall 2004
Fall 2005
2,801
2,681
2,321
86.6%
2,613
93.3%
Fall 2006
2,906
2,690
92.6%
AcceptanceRate -Transfers
Applied
Admitted
Acceptance rate
Fall2002
1,708
1,437
84.1%
11
Fall 2003
1,799
1,458
81.0%
Fall 2004
1,750
1,680
96.0%
Fall 2005
1,770
1,501
84.8%
Fall2006
1,760
1,527
86.8%
Matriculation Rate-Freshmen
Fall 2002
2,683
1,437
44.5%
Applied
Matriculated
Matriculation
rate
Fall 2003
Fall 2004
2,801
2,930
\,458
Fall 2005
2,681
1,258
1,340
44.4%
47.8%
46.9%
Fall2006
2,906
1,433
49.3%
Retention-Rate
First-Time. Full-Time Freshmen
Fall 2001
Fall 2002
Fall 2003
Fall 2004
to
to
10
to
Fall 2004
Fall 2005
Fall 2003
1,003
Fall 2002
Number Entered
Number Returned
1,116
778
70%
Retention Rate
1,179
1,218
876
72%
678
68%
828
70%
Fall2005
to
Fall2006
1,152
827
72%
Cumulative GraduationRate-Freshmen
Fall
Class
Number
Matriculated
1995
1996
1997
1998
1999
1,182
1,056
1,132
1,044
2000
1,042
Four Years
Number
Percent
868
167
147
138
143
121
167
Five Years
Number
Percent
333
282
293
286
222
332
28.2%
26.7%
25.9%
27.4%
25.6%
31.9%
14.)%
13.9%
12.2%
13.7%
13.9%
16.0%
Six Years
Number
418
357
355
350
284
413
Percent
35.4%
33.8%
31.4%
33.5%
32.7%
39.6%
AverageACT Scores ofMatriculated Students
Fall 2002
Average ACT scores
22.7
Fall 2003
Fall 2004
22.8
21.7
Fall 2005
21.7
Fall 2006
21.6
Geographic Concentrationsof Students
Mobile County
Baldwin County
Other AlabamaCounties
Florida
Mississippi
Other U. S. States
International
Total
2002
2003
2004
2005
2006
6,655
1,207
1,793
520
979
352
817
12,323
7,073
1,283
1,905
559
1,047
361
868
13,096
7,546
1,260
1,634
474
7,322
7,155
1,225
1,560
12
1,110
503
813
13,340
1,244
1,575
470
1,142
555
814
13,122
446
1,209
656
839
13,090
Main Schools in Colnpetitive Group and Listed Tuition
Undergraduate
Resident
I
Non-Resident
Graduate2
Resident
Non-Resident
University of South Alabama
$4,502
$8,312
$4,700
In-State Reference Group
Alabama A&M University
Alabama State University
$4,430
4,008
$5,292
4,608
5,198
4,864
9,216
14,798
13,516
4,804
5,866
10,924
12,060
4,468
8,836
$8,708
Auburn University
University of Alabama
University of Alabama at
5,278
4,864
$8,330
8,016
14,878
13,516
Birmingham
University of Alabama in Huntsville
4,792
4,688
4,104
10,732
9,886
8,108
Mean of In-StateReferenceGroup
$4,596
$10,495
$5,014
$11,342
Regional ReferenceGroup
University of SouthernMississippi
3Universityof New Orleans
4Universityof WestFlorida
$4,310
3,810
$9,740
10,854
13,520
$4,310
3,720
4,640
$9,740
10,764
17,440
Troy State University
2,782
$ I 0,044
I Based on 30 undergraduate credit hours per academic year
2 Based on 24 graduate credit hours per academic year
3Based on 12hours per semester undergraduate and 9 hours per semester graduate
~Based on 13hours per semester undergraduate and 10 hours per semester graduate
Certain Fees andCharges
Undergraduate and Graduate. The following shows the fee schedule for the periodssho~,".
Except as otherwise indicated,course fees are per semesterhour. Graduate School does not include the Collegeof
Medicine.
Fall & Spring Summer
2001-02
Applicationfee
$25.00
2002
$ 25.00
2003-04 2004-05
2005-06
$ 25.00
$ 25.00
$25.00
2002-03
$ 25.00
Course fee, per semesterhour (in-state)
Undergraduate
Graduate
97.00
125.00
103.00
135.00
103.00
113.00
135.00
149.00
127.00
167.00
Registrationfee
33.00
50.00
50.00
60.00
60.00
Change coursefee
25.00
25.00
25.00
50.00
50.00
13
127.00
167.00
(Late Registration Fee)
Out ofstalefee.per course
206.00
270.00
194.00
Undergraduate
Graduate
254.00
206.00
270.00
226.00
298.00
254.00
334.00
254.00
334.00
Receipts from certainTuition and Feeswere for the fiscal periods shownas follows:
2002-2003 2003-2004
2001-2002
Application fee
Course fee
$
276,360 $
292,737
31,632,596 34,872,774
1.696,952 1,752,088
259,360
245,629
Registrationfee
Change of coursefee
Building Fee
Out-of-state fee
$ 312,074 $ 315,475
38,336,717 41,655,648
] ,576,289
1,546,715
]85,980
2.418.868
2.499.907
$36_284_136
2004-2005
2.772.054
$43.183.114
$39_663_135
2005-2006
$ 310,604
46,362,216
1,905,130
1,306,900
3.027.907
$47.852.645
2,202,617
3.296.952
$54.077.519
Medical College. Feesand certain chargesfor the College of Medicine were for the periods
indicated, as follows:
2002-2003 2003-2004
2001-2002
Application fee
Registration fee
$ 25.00
33.00
Coursefee
In-state
$
7,700
15,400
Out-of-state
25.00
50.00
$ 50.00
65.00
8,700
17,400
9,770
19,540
2004-2005
2005-2006
$ 75.00
$ 75.00
66.00
66.00
11,040
12,254
22,080
24,508
Degrees Awarded
The University awardedthe following degreesfor the academicyears ending June 30 of theyears
shownbelow:
2003
2004
2005
2006
,303
,365
1,366
Baccalaureate
Degrees
1,365
1,371
MasterDegrees
554
623
601
714
714
91
91
79
71
71
60
13
59
60
59
60
11
12
II
11
Certification -Health
ParaProfessionals
ProfessionalDegrees
M.D.
Ph.D.
TOTAL
2,083
2,155
14
2,055
2,264
2,222
Faculty and Staff
Facultyand staff employees for the University were asfollows at September30:
Full-time faculty by rank:
Professor
Associateprofessor
Assistantprofessor
Instructor
Lecturer
TOTAL
2002
2003
2004
2005
2006
206
166
204
75
204
158
207
161
200
213
100
201
158
241
110
252
246
117
5
3
2
656
678
712
720
146
144
124
191
196
80
93
200
720
97
3
160
6
729
Full-time faculty by length
of service:
Up to 2 years
3-4 years
5-9 years
73
10-14 years
15+ years
TOTAL
75
215
106
]]3
136
121
180
656
678
170
61
215
712
49.5%
44%
44%
47%
4,515
4,695
4,756
4,555
4,419
5,171
5,373
5,468
5,275
5,148
120
197
135
109
89
206
729
Percentof facultytenured
(University instructional
faculty only)
Non-faculty
46%
Total University
employees
Student Financial Aid
The University awarded and paid financial aid at the following levels for the yearsended
September30,asfollows:
2002
Federalgovernment:
Student loans
Grants
Student employment
University:
Loans
Scholarships
2004
2003
2005
2006
$ 40,881,443 $ 45,350,803 $ 56,010,310 $ 59,064,146 $ 57,347,790
8,647,896
9,666,417
11,007,900
10,112,792
9,320,301
503,318
658,008
421,622
595,354
343,929
39,712
4,684,794
39,712
5,248,164
39,712
5,918,944
39,712
5,907,253
39,712
7,486,296
Total financial aid awarded $ 54,757,163 $ 60,963,104 $ 73,398,488 $ 75,719,257 $ 74,538,028
15
CAMPUS
Current Facilities
FACILITIES
Details of construction/acquisitionand renovationsare as follows:
Yearsof construction
or acquisition
Prior to 1960
1960-1969
1970-1979
1980-1989
1990-1999
2000-2006
Total
Gross SquareFeet
Constructedor Acquired
1,091,119
1,348,143
1,072,407
910,706
617,968
309.296
5.349.639
]6
GrossSquareFeet
Renovated
207,676
302,671
192,963
81,712
0
.139.052
924.081
111ecampus is served by water, gas and electric utilities for the greater Mobile metro area.
Insurance
Claims for damagesto the University's campusproperty are covered by the State Insurance
Fund
of the State of Alabama's Division of Risk Management. All buildings and contents are covered by the State
Insurance Fund policy. The University usestwo self-insured trust funds to pay general liability and professional
liability claims. Injuries from work-related incidents to those employeescovered by the University's self-insured
health plan are covered by that plan. Work-related injuries to employees not covered by the health plan are
reviewed by the StateBoard of Adjustment for final resolution.
Technology
The University is continuing to implement the Banner suite of University software. In additionto
the Student Information System, the University is also live on the Alumni/Development,
Finance, andHuman
Resource modules. Imaging implementation is in progress. These products provide an integrated systemserving
students, faculty, staff, and alumni.
All academic,office, andhospital buildings havenetwork access,as does each room in thecampus
student residences. Network enhancementshave addedwirelessaccessin many locations as well as additionalfiber
trunks. Many classroomsincorporate"electronic podia" with computersand projection equipment. The University
is actively engaged in online education,and information technologyis included in all disciplines throughoutthe
University, with approximately740 computerworkstations availablefor studentuse.
Student Housing
1,763 spacesareavailable for occupancyin campusstudentresidences.Over the last five years,occupancy
rates have averaged86%,with the Fall 2006 semesterat 92%. Approximately 12% of total headcountenrollment
occupied studenthousing for the Fall 2006 semester.
The demand for student housing and the scarcity of suitable rental housing in the Mobile area promptedthe
University in the winter of 2006 to explore adding additional student housing on campus. In August 2006a land
lease was signed under \\'hich Campus Crest at Mobile, L.L.C., a Campus Crest company, will build, own, and
manage a 504-bed student apartment complex located on approximately 12 acres of campus land near the intramural
fields and other student housing. Construction began in October 2006 and it is anticipated the apartmentswill be
ready for occupancy for the Fall 2007 semester. The University is under no obligation to guarantee the financing or
occupancy or any other revenue source with respect to the apartments.
SUMMARY INFORMATION RESPECTING STATE AND PRIVATE FUNDING
State Appropriations
The University hasreceived appropriationsfrom the Stateof Alabama for certain of its operating
costs and other non-operatingcash requirements,including capital expenditures. State appropriations maynot
lawfully be used for the paymentof debt service on the Series2006 Bonds. There can be no assurancethatfuture
Legislatures will continueto make such appropriations,or if made,that they will be timely or sufficient whenadded
to operating revenuesand General Fees remaining after the payment of debt service, to cover in full, operating
expenses of the University.
The following tabulation compiled by the University staff from University accountingrecords
shows State appropriationsto the University for the fiscal yearsshown:
17
2250
Year Ended
September 30
2006
2005
2004
2003
2002
Total Appropriations
Authorized
Received
10],202,677
86,621,887
84,233,051
101,202,677
86,621,887
84,233,051
83,845,5]6
81,603,5]4
83,845,516
81,603,514
Endowment
Endowment assets for the University are deposited both in the University and in the USA
Foundation. Net endowmentassetsin the accountsof the University at September30, 2006 were $27,064,000.Of
the net endowmentassets,$12,612,000are classified as restricted,unexpendable,while the remainderare classified
as restricted, expendable.The Board of Trusteeshas an approvedendowmentmanagementand investmentpolicy
that includes anestablishedspendingrate of 5% based on the 3-year moving averagenet assetsof endowments.In
maintaining its endowment,it is the goal of the University to provide revenue while preserving principal to fund
those projects which have beenendowed for specific purposes. Net assetsof endowmentsare al]ocated asfollows
at September30,2006:
Pooled equity mutual funds
Pooledbond mutual funds
Managedincome alternative investments
Other
$11,387,000
2,116,000
6,318,000
Total
$27.064.000
7.243.000
The University of SouthAlabama Foundation(the Foundation),a legally separateentity, existsfor
the primary purposeof advancingthe purpose of the University of South Alabama in furthering, improving,and
expanding its properties,services, facilities, and activities. Its total assetsat June 30, 2006, its most recentfiscal
year-end,were $291,374,000and its net assetswere $290,502,000at the samedate. Assetsare primarily investedin
marketable securities (42%), timber and mineral properties (51%), and real estate (6%). Cash and non-cash
distributions to theUniversity over the pastfive fiscal yearsare,asreported in the audited financial statementsof the
Foundation for theyearsendedJune 30, as follows:
2006
2005
2004
2003
2002
$ 6,074,000
6,213,000
6,892,000
5,654,000
9,913,000
SUMMARYOF CERTAIN PROVISIONSOF THE INDENTURE
The following is a brief summary of certain provisions of the Indenture as amendedand
supplemented by the SupplementalIndenture, to which Indenture and SupplementalIndenture in their entirety
reference is madefor the detailed provisions thereof. Unlessthe context clearly indicates otherwise,all references
herein shan be deemedto include the Series2006 Bonds,the Series 2004 Bonds, the Series 1999 Bondsand any
Additional Bondshereafterissued underthe Indenture.
2251
Financial GuarantyInsuranceCompanyshall be deemedto be the sole holder of the Series2006
Bonds it has insuredfor so long as it has not failedto comply with its payment obligationsunder the Bond Insurance
Policy. Certain otherrights to direct remediesarereservedto Financial Guaranty InsuranceCompany in theFourth
SupplementalIndenture.
As used in the following
summary, the following definitions
shall have the following respective
meanings.
..Annual Debt Service Requirement" means, as of any date of determination, the amount of
principal and interest maturing or Maturity Amount due with respect to the then outstanding Bonds in such Bond
Year; provided, that the principal amount or Maturity Amount of any Bonds subject to a Mandatory Redemption
Requirement during such Bond Year shall, for purposes of this definition, be considered as maturing in the Bond
Year during which such redemption is required and not in the Bond Year in which their stated maturity occurs.
"Bond Year" means the period beginning December 2 in each calendar year and endingon
December 1 of thenext succeedingcalendaryear.
Special Funds
Bond Fund. The Indenturealsoprovides for the creation of a specialtrust fund called the"Bond
Principal and InterestFund." The University is requiredto pay into the Bond Fund,in addition to all otheramounts
required by the Indenture,the following:
(a)
Contemporaneouslywith the issuanceand sale of any of the Bonds and out of
the proceedsderived from such sale,the University is required to pay into the Bond Fund such
part of theproceedsfrom the sale as is allocableto premium (if any) and accruedinterest.
(b)
On or before the BusinessDay precedingeach Interest PaymentDate until the
principal and the interest on the Bondsis paid in full, the University is required to pay into the
Bond fund, out of the moneys in the RevenueAccount, an amount equal to the sum of (i) the
semiannual installment of interest that will mature on the Bonds on the then next succeeding
semiannualInterest PaymentDate with respectthereto,plus (ii) the principal or Maturity Amount
that will become due on the Bonds on the then next succeedingPrincipal PaymentDate, plus (iii)
the principal or Maturity Amount of Bonds required to be redeemed on the next succeeding
Principal PaymentDate pursuantto any Mandatory RedemptionRequirement.
(c)
In the event that the moneyspaid or transferredinto the Bond Fund with respect
to any Interest PaymentDate is less thanthe amount required to be paid therein with respectto
such Interest Payment Date, until suchtime as the paymentsinto the Bond Fund are current, the
University is required to pay into the Bond Fund, in addition to the paymentsprovided fOTwith
respectto current then required to be paid therein all moneys on deposit in the Revenue Account
until suchtime as the payments requiredto be made into the Bond Fund are in a fully current
condition.
All moneys paid into the Bond Fund are required to be used only for payment of the principalof
and the interest on the Bonds upon or after the respectivematurities of such principal and interest and to redeem
Bonds subjectto a Mandatory RedemptionRequirement.If at the final maturity of the Bonds,however suchBonds
may mature, thereare in the Bond Fund moneysin excessof what is required to pay in full the principal of and the
interest on the Bonds,then any suchexcesswill be returnedto the University.
19
2252
The Indenture authorizes the issuanceof Additional Bonds, subject to the provisions of the
Indenture. Among the conditions to the issuanceof any Additional Bondsare the following:
(a)
SupplementalIndenture. Prior to the issuanceof any Additional Bonds, there
shall be executed and delivered a supplemental indenture containing a provision that the
semiannualpayments into the Bond Fund be adjusted to provide for such additional amounts as
may be necessaryto pay the principal of and interest on such Additional Bonds provided,
however, that in making such adjustmentthe principal amount of any such Additional Bonds
required by the terms of the SupplementalIndenture to be redeemedduring any Bond Year shall
be consideredas maturing in the Bond Year during which such redemptionis required and not in
the Bond Year in which their statedmaturity occurs;
(b)
Certificate as to PledgedRevenues The item or items required by either of the
following subparagraphs(i) or (ii):
(i)
A certificate by the Vice Presidentfor Financial Affairs of the
University certifying that the amountof Pledged Revenuesreceived during the
Fiscal year next precedingthe dateof the issuanceof the Additional Bonds then
proposed to be issuedwas not less than 125% of the maximum Annual Debt
Service Requirementwith respectto the then current or any then succeeding
Bond Year, which certificate shall set forth the figures on which it is basedand
shall Tecite that the Pledged Revenuesfor such Fiscal Year specified therein
were taken from the annual audit of the University for such Fiscal Year or, if
such audit shall not have been completed for the most recent Fiscal year at the
date of such certificate,were takenfrom the official recordsof the University, or
(ii)
A Resolution or Resolutions adopted by the University after
the commencementof the Fiscal Year next preceding the issuance of the then
proposed Additional Bonds either (i) increasing the GeneralFees,or (ii) levying
new fees and chargesof a type or kind different from the General Fees,or (iii) a
combination thereof, accompaniedby a certificate of the Vice President for
Financial Affairs stating that if the increasedPledgedRevenuesor the new fees
set forth in the said Resolution or Resolutionshad beenin effect throughoutthe
Fiscal Year next precedingthe dateof issuanceof the then proposed Additional
Bonds would have been not less than 125% of the maximum Annual Debt
Service Requirementduring the then current or any then succeedingBond Year
with respect to Bonds that will be outstanding immediately following the
issuanceof the thenproposedAdditional Bonds; and
(c)
Opinion of IndependentCounsel. An opinion dated on the dateof issuance of
such Additional Bonds, signedby IndependentCounsel acceptableto the Trustee,approving the
fonns of all documentsrequiredaboveto be delivered to the Trusteeand reciting that they comply
with the applicablerequirementsset out above.
Maintenance of Pledged Revenues
The University has covenanted in the Indenture that, so long as any of the Bonds remain
outstanding and unpaid,the University will fix, levy and col1ectPledgedRevenuesfrom all students attendingthe
University during each Fiscal Year in such amountsand at such times as shall be required to produce revenues
sufficient to pay the principal of, unamortized premium,if any, and interest on the Bonds during the sameFiscal
Year.
20
1253
Supplemental Indentures
Supplemental Indentures Without Bondholder Consent. The University and the Trustee may at
any time and from time to time enter into such Supplemental Indentures (in addition to such Supplemental
Indentures as are otherwise provided for in the Indenture) as shall not be inconsistent with the terms and provisions
of the Indenture, for anyone or more of the following purposes:
(a)
to add to the covenantsand agreementsof the University contained in the
Indenture other covenants and agreementsthereafter to be observed and performed by the
University, provided that such other covenants and agreementsmay not either expressly or
impliedly limit or restrict any of the obligations of the University containedin the Indentures;or
(b)
to cure any ambiguity or to cure, correct or supplement any defect or
inconsistentprovisions contained in the Indenture or in any SupplementalIndenture or to make
any provisions with respectto mattersarising underthe Indenture or any SupplementalIndenture
for any other purpose if such provisions are necessaryor desirableand are not inconsistentwith
the provisions of the Indenture or any SupplementalIndenture and do not adversely affect the
interestsof the holders of the Bonds. Any such SupplementalIndenture will not require the
consentof any bondholders.
Supplemental Indentures Requiring Bondholders Consent. In addition to those Supplemental
Indentures describedabove, the Indenture provides that the University and the Trustee may, at any time andfrom
time to time, with the written consentof the holders of not less than sixty-six and two-thirds percent (662/3%) in
Outstanding Amount of Bonds, enter into suchSupplementalIndenturesas shall be deemednecessaryor desirable
by the University and the Trustee for the purposeof modifying, altering, amending,adding to or rescinding,in any
particular, any of the terms or provisions containedin the Indentureor in any SupplementalIndenture;providedthat
without the written consent of the Holder of eachBond affected,no reduction in the principal amountof, rate of
interest on, or the premium payable upon the redemption of, any Bond shall be made; and provided, further,that,
without the written consentof the holders of all the Bonds,none of the following shallbe permitted.
(i)
an extensionof the maturity of any installmentof principal of
or interest on any Bond;
(ii)
any changein the scheduleof required sinking fund or other
similar payments with respectto any seriesof the Bonds;
(iii)
the creation of a lien or charge on the Pledged Revenues
ranking prior to or (exceptin connectionwith the issuanceof Additional Bonds)
on a parity with the lien or chargethereoncontainedherein;
(iv)
Bonds;or
the establishmentof preferencesor priorities as between the
(v)
a reduction in the aggregateprincipal amount of Bonds the
holders of which are requiredto consentto suchSupplementalIndenture.
Upon the execution of any SupplementalIndenture under and pursuant to the provisions of this section,the
Indenture shallbedeemedto be modified andamendedin accordancetherewith,andthe respectiverights, dutiesand
obligations underthe Indenture of the University, the Trusteeand all holders of the Bonds then outstandingshall
thereafter be determined,exercised and enforced hereunder, subject in all respects to such modifications and
amendments.
21
2254
Defaults and Remedies
Events of Default under the Indenture include the following:
(a)
failure by the University to pay principal of, the interest on or the premium (if
any) on any Bond as and when the same shall become due, as provided therein and in the
Indenture(whether such shall becomedue pursuantto any Mandatory RedemptionProvisions or
otherwise);
(b)
failure by the University to perform and observe any of the agreements and
covenants on its part contained in the Indenture (other than in the manner described in (a) above)
which such failure continues for a period of not less than thirty (30) days after written notice of
such failure has been given to the University by the Trustee or by the holders of not less than
twenty-five percent (25%) in outstanding amount of Bonds, unless during such period or any
extension thereof the University has commenced and is diligently pursuing appropriate corrective
action; or
(c)
detennination by a court having jurisdiction that the University is insolvent or
bankrupt, or appointmentby a court having jurisdiction of a receiver for the University or for a
substantia! part thereof, or approval by a court of competentjurisdiction of any petition for
reorganizationof the University or rearrangementor readjustment of the obligations of the
University under anyprovisions of the bankruptcylaws of the United States.
Upon the occurrence of an Event of Default the Trustee shall have the following rights and
remedies:
(a)
Acceleration. The Trusteemay, by written notice to the University and with the
consentof the Bond Insurer,declarethe principal of all the Bonds forthwith due and payable,and
such principal shall thereuponbecomeandbe immediatelydue and payable,anything herein or in
the Bonds to the contrarynotwithstanding. If, however,the University makesgood that default
and every other default hereunder (except for those installments of principal declared due and
payablethat would, absentsuch declaration,not be due and payable), with interest on all overdue
paymentsof principal and interest, andmade reimbursementof aJ] of the reasonableexpensesof
the Trustee,then the Trustee may (and, if Tequestedin writing by the holders of a majority in
principal amount of the then outstandingBonds,shal1),by written notice to the University, waive
such defaultand its consequences,but no such waiver shall affect any subsequentdefault or right
relative thereto.
(b)
Mandamusand Other Remedies. The Trustee shall havethe right of mandamus
or other lawful remedyin any court of competentjurisdiction to enforce its rights and the rights of
the holders of the Bonds against the University and any officers, agents or employees of the
University, including but not limited to the right to require the University and its officers, agents
or employeesto perform and observe all of its or their duties under the laws of the State of
Alabama.
Concerning the Trustee
The Trustee shall be under no obligation to institute suit or to take any proceedings underthe
Indenture or to enter any appearanceor in any way defend in any suit in which it maybe made defendantorto take
!,teps in the executionof trust createdor in the enforcementof anyrights or powers underthe Indenture, until it shall
be indemnified to its satisfaction against any and all costs and expense, outlays and counsel fees andother
reasonabledisbursementsand againstal11iability.
22
22"55
The Trustee shall not be liable in connection with the performance of its duties under the Indenture
except for its gross negligence or willful misconduct.
The University has agreed to pay to the Trustee from time to time reasonable compensation for all
services rendered by it under the Indenture, including the services of bond registrar and paying agent and alsoall of
its reasonable expenses, charges, counsel fees and other disbursements and those of its attorneys and employees
incurred in and about the performance of its powers and duties under the Indenture prior to the Bonds. Nothing
contained in the Indenture or any supplemental indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties or in the exercise of any of its rights or
powers if it believes that the repayment of such funds or the making whole in respect of such liability is not
reasonably assured to it.
RA TINGS
Moody's Investors Service, Inc. has issued a rating of "Aaa" to the Series 2006 Bonds with the
understanding that, upon delivery of the Series 2006 Bonds, a policy insuring the payment when due of the principal
of and interest on the Series 2006 Bonds will be issued by Ambac Assurance Corporation. Such ratings reflect only
the views of the rating agencies at the time such rating is given and the University makes no representation asto the
appropriateness of such rating. There is no assurance that the rating on the Series 2006 Bonds will continue for any
given period of time or that such rating may not be suspended, lowered or withdrawn entirely if, in the judgment of
the rating agencies, circumstances should Bond. Any such downwaTd change in, OTwithdrawal of, the rating may
have an adverse effect on the secondary market of the Series 2006 Bonds.
The University has furnished to Moody's Investors Service,Inc. certain infonnation andmaterial
respecting the Series2006 Bonds and itself, and Moody's has given a rating of" A2" to the Series2006 Bonds. Any
explanation of the significance of any such rating may be obtained only from the rating agency. Thereis no
assurance that suchratings will remain in effect for any given period of time or that they will not berevised
downward or withdrawn entirely by Moody's. Any suchdownward revision or withdrawal of anyrating assigned
to
the Series 2006 Bonds may have an adverse effect on the market price of the Series 2006 Bonds. Neitherthe
University nor the Underwriter has undertakenany responsibility after the issuanceof the Series2006 Bondsto
assuremaintenanceof the ratings or to opposeany suchrevision or withdrawal.
LITIGATION
The University is a defendant in one suit and has been notified by the Equal Employment
Opportunity Office ("EEOC") of a chargefiled with the EEOC againstthe University. The said suit and charge
both
arise from allegednegligenceor othergrounds againstthe University and certainof its employeesin the operationof
the University or the University of South Alabama Hospitals with respectto hiring practices and personnelpolicies.
In the pending suit and charge,the University (or the named hospital)is due to be dismissedas a defendant
due to
sovereign immunity. In addition, the University has been notified of claims against it filed in the State Boardof
Adjustment but noneof these claims involve any significant sumsin excessof the sums otherwiseprovidedfor and
,,'ould not have an impact upon the collection of the PledgedRevenues. In the opinjon of the UniversityAttorney,
the aggregate exposureof the University with respectto all pending claims and suits would not be materia!to the
University's financialposition.
LEGALITY
The Series2006 Bonds will be issued subjectto the approving opinion of Bradley Arant Rose&
White, LLP, Bimringharn,Alabama, Bond Counsel. It is anticipated that the opinion of Bond Counselwill be in
substantially the fOrn1set forth in Exhibit B.
23
General
TAX EXEMPTION
Pursuantto the provisions of the Internal RevenueCode of 1986 (the "Code"), the exemptionof
the interest income on the Series 2006 Bondsfrom gross income for federalincome tax purposesis dependent
upon
compliance by the University with certain provisions of the Code subsequentto the issuanceof the Series2006
Bonds. Among the requirements of the Codeto the continued exemption of the interest income on the Series2006
Bonds from gross income for federal income tax purposesare certain requirements relating to the use and
expenditure of proceedsfrom the Series 2006 Bonds, restrictions on the investment of proceedsearnedprior to
expenditure, and the requirement that certain earnings be rebated to the United States of America. In the
proceedings under which the Series 2006 Bonds are issued, the University has made certain covenants(the
"Compliance Covenants")to the effect that it will comply with all conditions to and requirementsfor the exemption
from gross income for federal income tax purposesof the interestincome on the Series 2006 Bonds imposedby the
Code. Failure to comply with the Compliance Covenants may result in the interest income on the Series2006
Bonds being subjectto gross income for federalincome tax purposesfrom the date of issuanceof the Series2006
Bonds.
Bradley Arant Rose & White LLP, Bond Counsel, is of the opinion that, under the Code,as
presently construedand administered,and assumingcomplianceby the University with the Compliance Covenants,
the interest income on the Series 2006 Bonds will be excludable from gross income of the recipients thereoffor
federal income tax purposespursuantto the provisions of Section 103 of the Code and will not constituteanitemof
tax preference for the purpose of computing the liability of individuals or corporationsfor the alternativeminimum
tax imposed by Section 55 of the Code. Bond Counsel will expressno opinion with respectto the federaltax
consequencesto the recipients of the interestincome on the Series2006 Bondsunder any provision of the Codenot
referred to above.
Bond Counsel is further of the opinion that the interest income on the Series 2006 Bonds is
exempt from present Alabama income taxation.
CONTINUING DISCLOSURE
The University will enter into a Continuing Disclosure Agreementfor the benefit of holdersof the
Series 2006 Bonds wherein the University has agreed to provide annually certain financial infornlation and
operating data relating to the University (the "Annual Reports"),and to provide notices of the occurrenceofcertain
enumerated events,ifmaterial. The Annual Reports will be filed by the University with each nationally recognized
municipal securities infornlation repository C'NRMSIR") and with the state information depository of Alabama
("SID"), if any. The notices of material events will be filed by the University with the Municipal Securities
Rulemaking Board or each NRMSIR and with the SID, if any. The specific nature of the informationto be
contained in the Annual Reports or the notices of material events and the other provisions of the Continuing
Disclosure Agreementare summarizedin Exhibit C hereto. The Continuing DisclosureAgreementhas beenentered
into in order to assistthe Underwriters of the Series 2006 Bonds in complying with Rule 15c2-12(b)(5)of the
Securities and Exchange Commission. A failure by the University to comply with the Continuing Disclosure
Agreement must bereported in accordancewith the Rule and must be consideredby any broker, dealeror municipal
securities dealer before recommending the purchase or sale of the Series2006 Bonds in the secondarymarket.
Consequently, sucha failure may adverselyaffectthe transferability and liquidity of the Series2006 Bonds andtheir
marketprice.
STATE NOT LIABLE ON SERIES 2006 BONDS
The Series 2006 Bonds are specialobligationsof the Universitypayable solely out of, andsecured
by a pledge of, the PledgedRevenues. Neither the principal of nor the intereston the Series2006 Bondsnor the
aforesaid pledge or any other agreementcontained in the Indenture shall constitute an obligation of anynature
whatsoever of the State of Alabama, and neitherthe Series2006 Bonds nor any obligation arising from saidpledge
or agreementsshallbe payable out of anymoneysappropriatedto the University by the State of Alabama.
24
FINANCIAL INFORMATION
Exhibit A contains audited financial statementsof the University for the fiscal yearended
September30, 2006.
VERIFICATION
The arithmetical accuracy of certain computations included in the schedules providedby
Financial Advisor r on behalf of the University relating to the forecastedpayments of principal and interestto
redeem the Refunded Bonds, and computation of the yields on the Series 2006 Bonds was examinedby The
Arbitrage Group, Inc.. Such computations were based solely upon assumptions and information suppliedby
Financial Advisor on behalf of the University. The Arbitrage Group, Inc. has restricted its proceduresto examining
the arithmetical accuracyof certain computationsand has not made any study or evaluation of the assumptions
and
information uponwhich the computationsarebased and, accordingly,has not expressedan opinion on thedataused,
the reasonablenessof the assumptions,or the achievability of the forecastedoutcome.
FINANCIAL ADVISOR
Thornton Farish Inc., Montgomery, Alabama,has served as financial advisor to the Universityin
connection with the issuanceof the Series2006 Bonds.
UNDERWRITING
The Series2006 Bonds are being purchasedfor reoffering by the underwriters shown onthe front
cover hereof (the "Underwriters") at an aggregate purchase price of $106,305,086.85, reflecting underwriting
discount of $475,000and original issue premium of $6,780,086.85,plus accrued interest from DecemberI, 2006.
The public offering price of the Series 2006 Bonds as set forth on the cover page of this Official Statementmaybe
changed from time to time by the Underwriters and the Underwriters may allow a concession from thepublic
offering price to certaindealers.
MISCELLANEOUS
The referencesherein to statutory provisions, the Indenture and other documents and instruments
are summaries of certainprovisions thereof and do not purport to be complete. For full and complete statements
of
such provisions referenceis hereby made to the specific statutory provision, document or instrument to whichsuch
summary relates.
So far as any statements made in this Official Statement involve matters of opinion or of
estimates, whether or not expressly stated, they are set forth as such and not as representations of fact. No
representationis made that any of the statementswill be realized. Neither this Official Statementnor any statement
which may have beenmade verbally or in writing is to be construedas a contract with the owners of the Series2006
Bonds.
The information contained in this Official Statement has been compiled or preparedfrom
information obtainedfrom sourcesbelieved to be reliable; however,the University makesno representationasto the
accuracy or completenessof suchinformation. The information and the expressionsof opinion hereinare subject
to
change without notice. Accordingly, neither the delivery of this Official Statementnor any sale made hereunder
shall. under any circumstances,create any implication that, since the date hereof, there has been no changein the
affairs of the University or anyother governmentalagenciesor entities discussedherein.
25
UNIVERSITY OF SOUTH ALABAMA
26
EXHIBIT A
AUDITED FINANCIAL STATEMENT FOR
FISCAL YEAR ENDED SEPTEMBER 30, 2006
EXHIBIT B
PROPOSED FORM OF OPINION OF BOND COUNSEL
(FOrn1
of Opinion of Bradley Arant Rose& White LLP
(Datedthe date of deliveryof the Series2006 Bonds)
We have examined the Constitution and laws of the State of Alabama and certified copies of
proceedings of the Board of Trustees of the University of South A labama (herein called the "University") andother
documents submitted to us pertaining to the issuance and validity of
$100,000,000
UNIVERSITY OF SOUTH ALABAMA
University Tuition RevenueRefunding and
Capital ImprovementBonds
Series2006
Dated asof December I, 2006
(herein called the"Series 2006 Bonds"). The statements hereinafter made and the opinions hereinafter exprcssed
are
based upon our examination of said constitution, laws and proceedings.
The documentssubmitted show asfollows:
(1)
That the Series 2006 Bonds have been issued under a Trust Indenture dated as
February 15, 1996, as heretofore supplemented and by a Fifth Supplemental Trust Indenture, dated
as of December 1,2006 between the University and The Bank of New York Trust Company, N.A.,
as trustee (herein together called the "Indenture"), wherein there has been pledged for payment of
all bonds issued thereunder so much as may be necessary therefor of the proceeds of the general
tuition fees levied against all students attending the University (herein called the "Pledged
Revenues"); and
(2)
That the University is authorized under the Indenture to issue, without express
limit as to principal amount but only upon compliance with certain conditions precedent specified
in the Indenture. additional bonds secured by a pledge of the Pledged Revenues on a parity with
all other bonds issued under the Indenture and at any time outstanding.
We are of the following opinion: that the University exists as a public corporation under thelaws
of the State of Alabama and has corporate power to issue the Series 2006 Bonds and to execute and deliverthe
Indenture; that the Series 2006 Bonds have been duly authorized, sold, executed and issued in the manner provided
by the applicable provisions of the Constitution and laws of the State of Alabama, are in due and legal Connand
evidence valid and binding limited or special obligations of the University payable, as to principal and interest,
solely out of the Pledged Revenues; that the payment of the principal of and the interest on the Series 2006 Bondsis
secured, pro rata and without preference or priority of one over another and on a parity with Bonds previously
issued under the Indenture and with all other bonds hereafter issued under the Indenture, by a pledge of thePledged
Revenues and the provisions of the Indenture; that the said pledge is valid, subject to all lawful prior chargeson the
Pledged Revenues; that the Indenture has been duly authorized, executed and delivered on behalf of the University;
and that under existing statutes, the interest income on the Series 2006 Bonds is exempt from Alabama income
taxation.
We are of the further opinion that, under the Internal RevenueCode of 1986(herein calledthe
"Code"), as presentlyconstruedand administered,and assumingcontinuing compliance by the Universitywith its
covenants (set forth in the Indenture)pertaining to certain requirementsof the Code, (i) the interestinconx:on the
Series 2006 Bonds will be excludable from the gross income of the recipients thereof for federal incometax
purposes pursuantto the provisions of Section 103 of the Code and, therefore,will be exempt from present
federal
income taxation, and (ii) the interest income on the Series 2006 Bonds will not be treated as an itemof tax
preference in computing the alternative minimum tax for individuals and corporationsimposed by Section55 of the
Code. We call to your attention, however, that a portion of the interest income on the Series 2006 Bondswill be
inc1uded in alternative minimum taxable income of corporations for the purpose of computing the alternative
minimum tax imposedby Section 55 of the Code. We expressno opinion with respect to the federal incometax
consequencesto the recipientsof the interestincome on the Series2006 Bonds exceptas stated above.
We are of the opinion that the interest income on the Series 2006Bonds is, under existingstatutes
and regulations, exemptfrom Alabama incometaxation.
Neither the principal of nor the interest on the Series 2006 Bonds nor the aforesaid pledge or any
other agrecments contained in the Indenture constitute an obligation of any nature whatsoever of the State of
Alabama, and neither the Series 2006 Bonds nor any obligation arising from said pledge or other agreementsare
payable out of any moneys appropriated to the University by the State of Alabama.
Yours very truly,
Exhibit C
Summary of Continuing Disclosure Agreement
EXHIBITC
SUMMARY OF
CONTINUING DISCLOSURE AGREEMENT
The following is a summary of the Continuing Disclosure Agreement (the ..Agreement") entered
into by the University, for the benefit of the holders of the Series 2006 Bonds, in order to assist the Underwriters in
complying with the provisions of Rule 15c2-12 (the "Rule"), promulgated by the Securities and Exchange
Commission of the United States of America (the "Commission") pursuant to the Securities Exchange Act of 1934.
Except where otherwise defined in the Exhibit, all capitalized terms have the meaning assigned in the frontportion
of this Official Statement.
Annual Report of the University. The University agrees,in accordancewith the provisionsof
the Rule, to provide or cause to be provided to each nationally recognized municipal securities information
repository ("NRMSIR") and to the appropriate state information depository ("SID"), if any, for the Stateof
Alabama, in eachcaseas designatedby the Commissionin accordancewith the Rule,not later than six months
after
the close of eachfiscal year of the University (October I -September 30) commencingafter September30,2007,
the following annualfinancial information andoperatingdata(the "University Annual Report"):
(I)
the audited financialstatementsof the Univcrsity andnotesthcreto;
(2)
the revenuesfrom the generaltuition fees the proceedsof which arepledged for payment
(3)
the scheduleof undergraduateandgraduatefeesand MedicalCollege fees;
of the Series 2006Bonds;
(4)
out-of-statefees;
the receipts from application fees,course fees, registration fees,changecoursefeesand
(5)
the number of students,by geographicclassification, attendingthe fall term commencing
within the fiscal yearcovered by the University Annual Report;
(6)
the number of degreesawarded,by type of degree,for the academicyear endingwithin
the fiscal year coveredby the University AnnualReport; and
(7)
a statement of the direct State appropriations authorized and received, the State
appropriations receivedfor employeebenefitsand the total Stateappropriationsreceived.
Notice of Material Events. The University agreesto provide or causeto be provided, ina timely
manner, (i) to eachNRMSlR or to the Municipal SecuritiesRulemaking Board and (ii) to the SID for theStateof
Alabama, if any,notice of the occurrenceof any of the following events with respectto the Series2006 Bonds,if
material:
(i)
principal and interestpaymentdelinquencies;
(ii)
non-paymentrelateddefaults;
unscheduleddraws on debtservicereservesreflecting financialdifficulties;
unscheduleddraws on credit enhancements
reflecting financial difficulties;
(v)
substitutionof credit or liquidity providers, or their failure to perform;
(vi)
adversetax opinions or events affecting the tax-exemptstatusof the Series 2006
(vii)
modifications of the rights ofhoJders of the Series2006 Bonds;
Bonds;
(viii)
calls for redemption, other than scheduled mandatory redemption, of any of the
Series 2006 Bonds;
(ix)
defeasances;
(x)
release,substitution or sale of property securing repaymentof the Series 2006
Bonds; or
(xi)
rating changes.
Additional Information. The University may from time to time choose to provide other
infomlation in addition to the infomlation and notices listed above, but the University does not undertakein the
Agreement to commit to provide any such additional infomlation or to update or to continue to providesuch
additional infomlation or notices once provided.
Beneficiaries and Enforcement. The University agreesthat its undertakings pursuant totheRule
set forth in the Agreement are intended to be for the benefit of the holders of the Series 2006 Bonds andshall be
enforceable by suchholders. No failure by the University to comply with its obligations under the Agreementshall
constitute an eventof default underthe Indenture.
EXHIBIT D
SPECIMEN POLICY OF BOND INSURANCE
Ambac
Fin:lncial Gllaranty
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