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HomeMy Public PortalAbout2001-13 Sewage Works BondsAMENDED AND RESTATED ORDINANCE NO. / 3 An Amended and Restated Ordinance of the City of Greencastle authorizing the advance refunding by the City of its Sewage Works Revenue Bonds of 1994; authorizing the issuance of sewage works revenue bonds for the purpose ofproviding funds to pay the cost of certain additions, extensions and improvements to the municipal sewage works of said City; providing for the safeguarding of the interests of the owners of said bonds, other matters connected therewith, including the issuance of notes in anticipation of bonds, and repealing ordinances inconsistent herewith WHEREAS, the City of Greencastle, Indiana (the "City") has heretofore established, constructed and financed a municipal sewage works and now owns and operates the sewage works pursuant to IC 36 -9 -23, and other applicable laws; and WHEREAS, the Common Council finds that certain hereinafter described outstanding bonds of the sewage works should be refunded to obtain a reduction in interest payments and effect a ® savings to the City; that the refunding of said outstanding bonds, together with redemption premium and accrued interest thereon and including all costs related to the refunding cannot be provided for out of funds of the sewage works now on hand and the refunding should be accomplished by the issuance of revenue bonds of the sewage works; and WHEREAS, the Common Council finds that there are now outstanding bonds issued to finance the construction of additions and improvements to the sewage works and payable out of the revenues therefrom designated "Sewage Works Revenue Bonds of 1994," dated October 1, 1994 (" 1994 Bonds "), originally issued in the amount of $1,640,000, now outstanding in the amount of $1,330,000, and maturing annually over a period ending January 1, 2015, which 1994 Bonds constitute a first charge upon the Net Revenues (as hereinafter defined) of the sewage works; and 1�1 637635.2 " WHEREAS, the Common Council finds that the 1994 Bonds ('Refunded Bonds ") should be refunded pursuant to the provisions of IC 5 -1 -5 to enable the City to obtain a reduction in interest payments and effect a savings to the City; and WHEREAS, pursuant to Ordinance No. 2000 -6 ( "2000 Ordinance "), the City issued its "Sewage Works Revenue Bonds, Series 2000" dated June 2, 2000 (the "2000 Bonds ") upon findings that certain improvements and extensions to said works were necessary; and that preliminary plans, specifications and estimates had been prepared and filed by the engineers employed by the City for the construction of said improvements and extensions, as more fully described on Exhibit A attached hereto (the "Project "), which preliminary plans and specifications and incorporated herein by reference and open for inspection at the office of the Clerk- Treasurer as required by law; and WHEREAS, the City advertised for and received bids for the construction of the Project and is has begun construction of the Project; due to an increase in construction costs and the insufficiency of the contingencies, the City has determined that the cost of said Project, as defined in IC 36- 9 -1 -8, including estimated incidental expenses, will include an additional $350,000, and that the estimated maximum amount to be financed under this Ordinance, including the refunding of the Refunded Bonds, is $2,179,456; and WHEREAS, the Common Council now finds that there are funds on hand to apply to the refunding of the Refunded Bonds and the cost of said Project in the amount of $179,456, leaving a balance of $2,000,000 to be financed by the issuance of sewage works revenue and refunding revenue bonds in an amount not to exceed Two Million Dollars ($2,000,000), and, if necessary, bond anticipation notes (the "BANS "); and s -2- 837635.2 ® WHEREAS, the Common Council finds that the 2000 Bonds are now outstanding in the amount ofTwelve Million Dollars ($12,000,000), and mature annually over a period ending January 1, 2022, which 2000 Bonds constitute a first charge against the Net Revenues; and WHEREAS, the 2000 Bonds were sold to the Indiana State Revolving Loan Fund Program ( "SRF Program ") and are now owned by the Indiana Bond Bank, but the State of Indiana, acting through its Budget Agency ('State "), has rights concerning the 2000 Bonds as if the State were the owner of the 2000 Bonds; and WHEREAS, the City entered into a Financial Assistance Agreement ('FAA ") pertaining to the Project and the 2000 Bonds; and WHEREAS, the 2000 Ordinance, as amended herein in Section 20, with the consent of the State, permits the issuance of additional bonds ranking on a parity with said 2000 Bonds provided ® certain conditions can be met, and the City finds that the finances of said sewage works will enable the City to meet the conditions for the issuance of additional panty bonds and that, accordingly, the revenue bonds authorized herein shall be on a parity with the now outstanding 2000 Bonds; and WHEREAS, the Common Council has been advised that it will be cost efficient to purchase a municipal bond insurance policy ('Municipal Bond Insurance Policy ") from MBIA Insurance Corporation ( "MBIA "); and WHEREAS, the bonds to be issued pursuant to this ordinance are to be issued subject to the provisions of the laws of the State of Indiana, including, without limitation, IC 5 -1 -5 and IC 36 -9 -23, each as in effect on the issue date of the bonds issued hereunder (collectively, the "Act "), and the terms and restrictions of this ordinance; and 837635.2 - 3 - 0 WHEREAS, the City desires to authorize the issuance of BANs hereunder, if necessary, payable solely from the proceeds of the sewage works revenue bonds issued to finance the aforementioned costs of the Project and to authorize the refunding of said BANS, if issued; and WHEREAS, the Common Council now finds that all conditions precedent to the adoption of an ordinance authorizing the issuance of revenue bonds and BANS have been complied with in accordance with the provisions of the Act; NOW THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF GREENCASTLE, INDIANA, THAT: Sec. 1. Project and Refunding Authorization (a) The City shall continue with the construction of the Project in accordance with the plans and specifications heretofore prepared and filed by Hannum, Wagle & Cline, Inc., the consulting engineers employed by the City, which plans 0 and specifications are now on file in the office of the Clerk- Treasurer of the City, and have been adopted and approved, and by reference made a part of this ordinance as fully as if the same were attached hereto and incorporated herein. Two copies of the plans and specifications and the additional costs estimates are on file and are open for public inspection pursuant to IC 36- 1 -5 -4. The estimated cost of refunding the Refunded Bonds and the construction of said Project shall not exceed the sum of $2,179,456, plus investment earnings on the bond and BAN proceeds, without further authorization from this Common Council. Based upon a report of the City's financial advisor Crowe Chizek and Company, LLP, the refunding will allow the City to obtain a reduction in interest payments to effect a savings to the City. The terms "sewage works," "sewage works system," "system," "works," and other like terms where used in this ordinance shall be construed to mean and include the existing structures and property of the Treatment Works, as defined in the FAA, and all -4- 837635.2 0 enlargements, extensions, additions, and improvements thereto and replacements thereof now or subsequently constructed or acquired. The Project shall be constructed in accordance with the plans and specifications heretofore mentioned. Said Project shall be constructed and the bonds herein authorized shall be issued pursuant to and in accordance with the Act. (b) The City now finds it necessary to provide funds for refunding the Refunded Bonds thereby reducing its interest payments and effecting a savings, as reported by the City's financial advisor, Crowe Chizek & Company, LLP. Sec. 2. Issuance of Bonds and BANS (a) The City shall issue, if necessary, its BANS for the purpose of procuring interim financing to apply to the cost of said Project and refunding of the Refunded Bonds. The City shall issue its BANS in an amount not to exceed Two Million Dollars ($2,000,000) to be designated "Sewage Works Bond Anticipation Notes." Said BANS shall be sold at a price not less than 99% of their par value, shall be numbered consecutively from 1 upward, shall be in multiples of $1,000, as designated in the hereinafter defined Purchase Agreement, shall be dated as of the date of delivery thereof, and shall bear interest at a rate not to exceed 6.5% per annum (the exact rate or rates to be negotiated with a financial institution or the Indiana Bond Bank) payable upon maturity. The BANS will mature no later than two years after their date of delivery. The BANS are subject to renewal or extension at an interest rate or rates not to exceed 6.5% per annum (the exact rate or rates to be negotiated with a financial institution or the Indiana Bond Bank). The term of the BANS and all renewal BANS may not exceed five years from the date of delivery of the initial BANS. The BANS shall be registered in the name of the purchasers thereof. The BANs shall be issued pursuant to IC 5- 1.5 -8 -6.1 if sold to the Indiana Bond Bank or ® pursuant to IC 5- 1 -14 -5 if sold to a financial institution or any other purchaser. The principal of and 837635.2 -5 " interest on the BANS shall be payable solely from the issuance of revenue bonds pursuant to and in the manner prescribed by the Act. The revenue bonds will be payable solely out of and constitute a first charge against the Net Revenues (defined in the 2000 Ordinance as gross revenues of the sewage works of the City after deduction only for the payment of the expenses for Operation and Maintenance (as defined in the FAA)) of the sewage works of the City, including all such Net Revenues from the existing works, the Project and all additions and improvements thereto and replacements thereof subsequently constructed or acquired, on a parity with the 2000 Bonds. (b) The City shall issue its "Sewage Works Revenue and Refunding Revenue Bonds of 2001," (the "Bonds ") in an aggregate principal amount not to exceed $2,000,000 for the purpose of advance refunding the Refunded Bonds, procuring funds to be applied on the cost of the Project, the payment of costs of issuance, including a premium for municipal bond insurance, refunding the � BANs, if issued, and all other costs related to the Project. The Bonds shall be sold at a price not less than 99% of the par value thereof, shall be issued in the denomination of Five Thousand Dollars ($5,000) each or integral multiples thereof, numbered consecutively from 1 upward, dated as of the first day of the month in which they are sold or the date of delivery as determined by the Clerk- Treasurer with the advice of the City's financial advisor, and shall bear interest at a rate or rates not exceeding 6.5% per annum (the exact rate or rates to be determined by bidding or by negotiation) payable semiannually on January 1 and July 1 of each year, commencing on January 1, 2002. The Bonds shall mature annually on January 1 of each year over a period ending no later than January 1, 2021, and in such amounts as will result in as level annual debt service as practicable with $5,000 denominations and taking into account the annual debt � service on the 2000 Bonds. -6- 837635.2 " All or a portion of the Bonds may be issued as one or more term bonds, upon election of the successful bidder or the Underwriter, as hereinafter defined. Such term bonds shall have a stated maturity or maturities in the years or dates as determined by the successful bidder, but in no event later than the final serial maturity date of the Bonds as hereafter determined in accordance with the above paragraph. The term bonds shall be subject to mandatory sinking fund redemption and final payment(s) at maturity at 100% of the principal amount thereof, plus accrued interest to the redemption date, on principal payment dates which are hereinafter determined in accordance with the above paragraph. Sec. 3. Registrar and Paving Agent, Book -Entry Provisions; PaMents under the Municipal Bond Insurance Policv The Clerk- Treasurer is hereby authorized to contract with a qualified financial institution to serve as Registrar and Paying Agent for the Bonds (the "Registrar" or "Paying " Agent "). The Registrar is hereby charged with the responsibility of authenticating the Bonds. The Clerk- Treasurer is hereby authorized to enter into such agreements or understandings with the Registrar as will enable the institution to perform the services required of a registrar and paying agent. The Clerk- Treasurer is further authorized to pay such fees as the Registrar may charge for the services it provides as Registrar and Paying Agent and such fees may be paid from the Sewage Works Sinking Fund established to pay the principal of and interest on the Bonds as fiscal agency charges. In the alternative, the Clerk- Treasurer of the City may serve as Registrar and Paying Agent, as determined by the Mayor, the Clerk- Treasurer and the successful bidder for the Bonds. As to the BANs, the Clerk- Treasurer shall serve as Registrar and Paying Agent and is hereby charged with the duties of Registrar and Paying Agent. C 837635,2 O The principal of the Bonds shall be payable at the principal corporate trust office of the Paying Agent. All payments of interest on the Bonds shall be paid by check, mailed one business day prior to the interest payment date to the registered owners thereof as the names appear as of the fifteenth day of the month preceding the interest payment date (the 'Record Date ") and at the addresses as they appear on the registration books kept by the Registrar or at such other address as is provided to the Paying Agent in writing by such registered owner. If payment of principal or interest is made to a depository, payment shall be made by wire transfer on the payment date in same -day funds. If the payment date occurs on a date when financial institutions are not open for business, the wire transfer shall be made on the next succeeding business day. The Paying Agent shall be instructed to wire transfer payments by 1:00 p.m. (New York City time) so such payments are received at the depository by 2:30 p.m. (New York City time). All payments on the Bonds and G BANS shall be made in any coin or currency of the United States of America, which on the date of such payment, shall be legal tender for the payment of public and private debts. Each Bond shall be transferable or exchangeable only upon the books of the City kept for that purpose at the principal corporate trust office of the Registrar by the registered owner in person, or by its attorney duly authorized in writing, upon surrender of such Bond together with a written instrument of transfer or exchange satisfactory to the Registrar duly executed by the registered owner, or its attorney duly authorized in writing, and thereupon a new fully registered Bond or Bonds in an authorized aggregate principal amount and of the same maturity, shall be executed and delivered in the name of the transferee or transferees or the registered owner, as the case may be, in exchange therefor. The costs of such transfer or exchange shall be borne by the City except for any ® tax or governmental charge required to be paid with respect to the transfer or exchange, which taxes 837635.2 - g - ® or governmental charges are payable by the person requesting such transfer or exchange. The City and the Registrar and Paying Agent for the Bonds may treat and consider the person in whose name such Bonds are registered as the absolute owner thereof for all purposes including for the purpose of receiving payment of, or on account of, the principal thereof and interest due thereon. The Registrar and Paying Agent may at any time resign as Registrar and Paying Agent upon giving 30 days' notice in writing to the City and by first class mail to each registered owner of the Bonds then outstanding, and such resignation will take effect at the end of such 30 day period or upon the earlier appointment of a successor registrar and paying agent by the City. Any such notice to the City may be served personally or sent by registered mail. The Registrar and Paying Agent may be removed at any time as Registrar and Paying Agent by the City, in which event the City may appoint a successor registrar and paying agent. The City shall notify each registered owner of the IM Bonds then outstanding by first class mail of the removal of the Registrar and Paying Agent. Notices to the registered owners of the Bonds shall be deemed to be given when mailed by first class mail to the addresses of such registered owners as they appear on the registration books kept by the Registrar. Upon the appointment of any successor registrar and paying agent by the City, the Clerk- Treasurer is authorized and directed to enter into such agreements and understandings with such successor registrar and paying agent as will enable the institution to perform the services required of a registrar and paying agent for the Bonds. The Clerk- Treasurer is further authorized to pay such fees as the successor registrar and paying agent may charge for the services it provides as registrar and paying agent and such fees may be paid from the Sewage Works Sinking Fund continued in ® Section 15 hereof. Any predecessor registrar and paying agent shall deliver all of the Bonds and any 837635.2 - 9 ® cash or investments in its possession with respect thereto, together with the registration books, to the successor registrar and paying agent. Interest on the Bonds shall be payable from the interest payment date to which interest has been paid next preceding the authentication date of the Bonds unless the Bonds are authenticated after the Record Date and on or before such interest payment date in which case they shall bear interest from such interest payment date, or unless the Bonds are authenticated on or before the Record Date preceding the first interest payment date, in which case they shall bear interest from the original date until the principal shall be fully paid. The City has determined that it may be beneficial to the City to have the Bonds held by a central depository system pursuant to an agreement between the City and The Depository Trust Company, New York, New York ( "Depository Trust Company ") and have transfers of the Bonds effected by book -entry on the books of the central depository system ('Book Entry System "). The Bonds may be initially issued in the form of a separate single authenticated fully registered Bond for the aggregate principal amount of each separate maturity of the Bonds. In such case, upon initial issuance, the ownership of such Bonds shall be registered in the register kept by the Registrar in the name of CEDE & CO., as nominee of the Depository Trust Company. With respect to the Bonds registered in the register kept by the Registrar in the name of CEDE & CO., as nominee of the Depository Trust Company, the City and the Paying Agent shall have no responsibility or obligation to any other holders or owners (including any beneficial owner ('Beneficial Owner ")) of the Bonds with respect to (i) the accuracy of the records of the Depository Trust Company, CEDE & CO., or any Beneficial Owner with respect to ownership questions, (ii) the delivery to any bondholder (including any Beneficial Owner) or any other person, other than the 8376352 _10- ® Depository Trust Company, of any notice with respect to the Bonds including any notice of redemption, or (iii) the payment to any bondholder (including any Beneficial Owner) or any other person, other than the Depository Trust Company, of any amount with respect to the principal of, or premium, if any, or interest on the Bonds except as otherwise provided herein. No person other than the Depository Trust Company shall receive an authenticated Bond evidencing an obligation of the City to make payments of the principal of and premium, if any, and interest on the Bonds pursuant to this ordinance. The City and the Registrar and Paying Agent may treat as and deem the Depository Trust Company or CEDE & CO. to be the absolute bondholder of each of the Bonds for the purpose of (i) payment of the principal of and premium, if any, and interest on such Bonds; (ii) giving notices of redemption and other notices permitted to be given to bondholders with respect to such Bonds; (iii) registering transfers with respect to such Bonds; (iv) O obtaining any consent or other action required or permitted to be taken of or by bondholders; (v) voting; and (vi) for all other purposes whatsoever. The Paying Agent shall pay all principal of and premium, if any, and interest on the Bonds only to or upon the order of the Depository Trust Company, and all such payments shall be valid and effective fully to satisfy and discharge the City's and the Paying Agent's obligations with respect to principal of and premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. Upon delivery by the Depository Trust Company to the City of written notice to the effect that the Depository Trust Company has determined to substitute a new nominee in place of CEDE & CO., and subj ect to the provisions herein with respect to consents, the words "CEDE & CO." in this ordinance shall refer to such new nominee of the Depository Trust Company. Notwithstanding any other provision hereof to the contrary, so long as ® any Bond is registered in the name of CEDE & CO., as nominee of the Depository Trust Company, 11- 837635.2 © all payments with respect to the principal of and premium, if any, and interest on such Bonds and all notices with respect to such Bonds shall be made and given, respectively, to the Depository Trust Company as provided in a representation letter from the City to the Depository Trust Company. Upon receipt by the City of written notice from the Depository Trust Company to the effect that the Depository Trust Company is unable or unwilling to discharge its responsibilities and no substitute depository willing to undertake the functions of the Depository Trust Company hereunder can be found which is willing and able to undertake such functions upon reasonable and customary terms, then the Bonds shall no longer be restricted to being registered in the register of the City kept by the Registrar in the name of CEDE & CO., as nominee of the Depository Trust Company, but may be registered in whatever name or names the bondholders transferring or exchanging the Bonds shall designate, in accordance with the provisions of this ordinance. • If the City determines that it is in the best interest of the bondholders that they be able to obtain certificates for the fully registered Bonds, the City may notify the Depository Trust Company and the Registrar, whereupon the Depository Trust Company will notify the Beneficial Owners of the availability through the Depository Trust Company of certificates for the Bonds. In such event, the Registrar shall prepare, authenticate, transfer and exchange certificates for the Bonds as requested by the Depository Trust Company and any Beneficial Owners in appropriate amounts, and whenever the Depository Trust Company requests the City and the Registrar to do so, the Registrar and the City will cooperate with the Depository Trust Company by taking appropriate action after reasonable notice (i) to make available one or more separate certificates evidencing the fully registered Bonds of any Beneficial Owner's Depository Trust Company account or (ii) to arrange for another securities ® depository to maintain custody of certificates for and evidencing the Bonds. 837635.2 -12- ® If the Bonds shall no longer be restricted to being registered in the name of a Depository Trust Company, the Registrar shall cause said Bonds to be printed in blank in such number as the Registrar shall determine to be necessary or customary; provided, however, that the Registrar shall not be required to have such Bonds printed until it shall have received from the City indemnification for all costs and expenses associated with such printing. In connection with any notice or other communication to be provided to bondholders by the City or the Registrar with respect to any consent or other action to be taken by bondholders, the City or the Registrar, as the case may be, shall establish a record date for such consent or other action and give the Depository Trust Company notice of such record date not less than fifteen (15) calendar days in advance of such record date to the extent possible. So long as said Bonds are registered in the name of the Depository Trust Company or CEDE ® & CO. or any substitute nominee, the City and the Registrar and Paying Agent shall be entitled to request and to rely upon a certificate or other written representation from the Beneficial Owners of the Bonds or from the Depository Trust Company on behalf of such Beneficial Owners stating the amount of their respective beneficial ownership interests in the Bonds and setting forth the consent, advice, direction, demand or vote of the Beneficial Owners as of a record date selected by the Registrar and the Depository Trust Company, to the same extent as if such consent, advice, direction, demand or vote were made by the bondholders for purposes of this ordinance and the City and the Registrar and Paying Agent shall for such purposes treat the Beneficial Owners as the bondholders. Along with any such certificate or representation, the Registrar may request the Depository Trust Company to deliver, or cause to be delivered, to the Registrar a list of all Beneficial Owners of the s 8376351 - 13 - ® Bonds, together with the dollar amount of each Beneficial Owner's interest in the Bonds and the current addresses of such Beneficial Owners. Payments made by MBIA: A. In the event that, on the second Business Day, and again on the Business Day, prior to the payment date on the Bonds, the Paying Agent has not received sufficient moneys to pay all principal of and interest on the Bonds due on the second following or following, as the case may be, Business Day, the Paying Agent shall immediately notify MBIA or its designee on the same Business Day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the deficiency. B. If the deficiency is made up in whole or in part prior to or on the payment date, the Paying Agent shall so notify MBIA or its designee. • C. In addition, if the Paying Agent has notice that any bondholder has been required to disgorge payments of principal or interest on the Bonds to a trustee in bankruptcy or creditors or others pursuant to a finaljudgment by a court of competent jurisdiction that such payment constitutes a voidable preference to such bondholder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify MBIA or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. D. The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney -in -fact for holders of the Bonds as follows: (i) If and to the extent there is a deficiency in amounts required to pay interest on the Bonds, the Paying Agent shall (a) execute and deliver to State Street ® Bank and Trust Company, N.A., or its successors under the Municipal Bond 637635.2 -14- " Insurance Policy (the "Insurance Paying Agent'), inform satisfactory to the Insurance Paying Agent, an instrument appointing MBIA as agent for such holders in any legal proceeding related to the payment of such interest and an assignment to MBIA of the claims for interest to which such deficiency relates and which are paid by MBIA, (b) receive as designee of the respective holders (and not as Paying Agent) in accordance with the tenor of the Municipal Bond Insurance Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (c) disburse the same to such respective holders; and (ii) If and to the extent of a deficiency in amounts required to pay principal of the Bonds, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an " instrument appointing MBIA as agent for such holder in any legal proceeding relating to the payment of such principal and an assignment to MBIA of any of the Bonds surrendered to the Insurance Paying Agent of so much of the principal amount thereof as has not previously been paid or for which moneys are not held by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received), (b) receive as designee of the respective holders (and not as Paying Agent) in accordance with the tenor of the Municipal Bond Insurance Policy payment therefor from the Insurance Paying Agent, and (c) disburse the same to such holders. E. Payments with respect to claims for interest on and principal of Bonds disbursed by " the Paying Agent from proceeds of the Municipal Bond Insurance Policy shall not be considered to 837635.2 - 15 - O discharge the obligation of the City with respect to such Bonds, and MBIA shall become the owner of such unpaid Bonds and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise. F. Irrespective of whether any such assignment is executed and delivered, the City and the Paying Agent hereby agree for the benefit of MBIA that: (i) They recognize that to the extent MBIA makes payments, directly or indirectly (as by paying through the Paying Agent), on account of principal of or interest on the Bonds, MBIA will be subrogated to the rights of such holders to receive the amount of such principal and interest from the City, with interest thereon as provided and solely from the sources stated in this ordinance and the Bonds; and (ii) They will accordingly pay to MBIA the amount of such principal and ® interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the Municipal Bond Insurance Policy, which principal and interest shall be deemed past due and not to have been paid), with interest thereon as provided in this ordinance and the Bonds, but only form the sources and in the manner provided herein for the payment of principal of and interest on the Bonds to holders, and will otherwise treat MBIA as the owner of such rights to the amount of such principal and interest. Sec. 4. Redemption of BANS and Bonds (a) The BANs are prepayable by the City, in whole or in part, at any time upon 7 days' notice to the owner of the BANs without any premium. ® (b) The Bonds of this issue are redeemable at the option of the City, but no earlier than 837635.2 -16- January 1, 2011, and on any date thereafter, on thirty (30) days' notice, in whole or in part, in the order of maturity as determined by the City and by lot within a maturity, at face value, with a premium not to exceed 2 %, plus in each case accrued interest to the date fixed for redemption. The exact redemption dates and premiums, if any, will be established by the Mayor, with the advice of the City's financial advisor, prior to the sale of the Bonds. (c) If any Bond is issued as a term bond, the Paying Agent shall credit against the mandatory sinking fund requirement for the Bonds maturing as term bonds, and corresponding mandatory redemption obligation, in the order determined by the City, any Bonds maturing as term bonds which have previously been redeemed (otherwise than as a result of a previous mandatory redemption requirement) or delivered to the Registrar for cancellation or purchased for cancellation by the Paying Agent and not theretofore applied as a credit against any redemption obligation. Each Bond maturing as a term bond so delivered or canceled shall be credited by the Paying Agent at 100% of the principal amount thereof against the mandatory sinking fund obligation on such mandatory sinking fund date, and any excess of such amount shall be credited on future redemption obligations, and the principal amount of the Bonds to be redeemed by operation of the mandatory sinking fund requirement shall be accordingly reduced; provided, however, the Paying Agent shall credit only such Bonds maturing as term bonds to the extent received on or before forty-five (45) days preceding the applicable mandatory redemption date as stated above. Each Five Thousand Dollars ($5,000) principal amount shall be considered a separate bond for purposes of optional and mandatory redemption. If less than an entire maturity is called for redemption, the Bonds to be called shall be selected by lot by the Registrar. If some Bonds are to be redeemed by optional redemption and mandatory sinking fund redemption on the same date, the 837635.2 - 17- O Registrar shall select by lot the Bonds for optional redemption before selecting the Bonds by lot for the mandatory sinking fund redemption. (d) In either case, notice of such redemption shall be given at least thirty (30) days prior to the date fixed for redemption by mail unless the notice is waived by the registered owner of a Bond. Such notice shall be mailed to the address of the registered owners as shown on the registration records of the City as of the date which is forty-five (45) days prior to such redemption date. The notice shall specify the date and place of redemption and sufficient identification of the Bonds called for redemption. The place of redemption shall be determined by the City. Interest on the Bonds so called for redemption shall cease on the redemption date fixed in such notice if sufficient funds are available at the principal office of the Paying Agent to pay the redemption price on the date so named. Coincidentally with the payment of the redemption price, the Bonds so called for redemption 0 shall be surrendered for cancellation. Sec. 5. Execution and Negotiability Each of the BANS and Bonds shall be executed in the name of the City by the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of its Clerk- Treasurer, and the seal of the City shall be affixed, imprinted or impressed to or on each of the BANS and Bonds manually, by facsimile or any other means; and these officials, by the execution of a Signature and No Litigation Certificate, shall adopt as and for their own proper signatures the facsimile signatures appearing on the Bonds or BANS. In case any officer whose signature or facsimile signature appears on the Bonds or BANS shall cease to be such officer before the delivery of the Bonds or BANS, the signature of such officer shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such is delivery. -18- 837635.2 The BANS and Bonds shall have all of the qualities and incidents of negotiable instruments under the laws of the State of Indiana, subject to the provisions for registration herein. The Bonds shall also be authenticated by the manual signature of the Registrar, and no Bond shall be valid or become obligatory for any purpose until the certificate of authentication thereon has been so executed. Sec. 6. Form of Bonds The form and tenor of the Bonds shall be substantially as follows, all blanks to be filled in properly prior to delivery: UNITED STATES OF AMERICA STATE OF INDIANA COUNTY OF PUTNAM Interest Maturity Original Authentication Rate Date Date Date CUSIP CITY OF GREENCASTLE SEWAGE WORKS REVENUE AND REFUNDING REVENUE BOND OF 2001 REGISTERED OWNER: PRINCIPAL SUM: The City of Greencastle, in Putnam County, State of Indiana, for value received, hereby promises to pay to the Registered Owner named above or registered assigns, solely out of the special revenue fund hereinafter referred to, the Principal Sum set forth above on the Maturity Date set forth above (unless this bond be subject to and be called for redemption prior to maturity as hereinafter provided), and to pay interest hereon at the Interest Rate per annum stated above from the interest payment date to which interest has been paid next preceding the Authentication Date of this bond unless this bond is authenticated after the fifteenth day of the month preceding an interest payment date and on or before such interest payment date in which case it shall bear interest from such interest payment date or unless this bond is authenticated on or before December 15, 2001, in which 837635.2 - 19 case it shall bear interest from the Original Date, until the principal is paid, which interest is payable semiannually on the first days of January and July of each year, beginning on January 1, 2002. The principal of this bond is payable at the principal office of (the "Registrar" or "Paying. Agent "), in the City of , Indiana. All payments of interest on this bond shall be paid by check, mailed one business day prior to the interest payment date to the registered owner hereof as of the fifteenth day of the month preceding such interest payment date at the address as it appears on the registration books kept by the Registrar or at such other address as is provided to the Paying Agent in writing by the registered owner. If payment of principal or interest is made to a depository, payment shall be made by wire transfer on the payment date in same -day funds. If the payment date occurs on a date when financial institutions are not open for business, the wire transfer shall be made on the next succeeding business day. The Paying Agent shall wire transfer payments by 1:00 p.m. (New York City time) so such payments are received at the depository by 2:30 p.m. (New York City time). All payments on the bond shall be made in any coin or currency of the United States of America, which on the dates of such payment, shall be legal tender for the payment of public and private debts. THE CITY SHALL NOT BE OBLIGATED TO PAY THIS BOND OR THE INTEREST HEREON EXCEPT FROM THE HEREINAFTER DESCRIBED SPECIAL FUND, AND NEITHER THIS BOND NOR THE ISSUE OF WHICH IT IS A PART SHALL IN ANY RESPECT CONSTITUTE A CORPORATE INDEBTEDNESS OF THE CITY WITHIN THE PROVISIONS AND LIMITATIONS OF THE CONSTITUTION OF THE STATE OF INDIANA. The City has designated the bonds as qualified tax- exempt obligations to qualify the bonds for the $10,000,000 exception from the provisions of Section 265(b)(3) of the Internal Revenue Code of 1986 relating to the disallowance of the deduction for interest expense allocable to tax - exempt obligations. The terms and provisions of this bond are continued on the reverse side hereof and such terms and provisions shall for all purposes have the same effect as though fully set forth at this place. It is hereby certified and recited that all acts, conditions and things required to be done precedent to and in the execution, issuance and delivery of this bond have been done and performed in regular and due form as provided by law. This bond shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been executed by an authorized representative of the Registrar. 837635.2 -20- " IN WITNESS WHEREOF, the City of Greencastle, in Putnam County, Indiana, has caused this bond to be executed in its corporate name by the manual or facsimile signature of its Mayor, its corporate seal to be hereunto affixed, imprinted or impressed by any means and attested manually or by facsimile by its Clerk- Treasurer. CITY OF GREENCASTLE, INDIANA By Mayor [SEAL] Attest: Clerk- Treasurer REGISTRAR'S CERTIFICATE OF AUTHENTICATION " This bond is one of the bonds described in the within- mentioned Ordinance. as Registrar By Authorized Representative (To be printed on Reverse Side) This bond is one of an authorized issue of bonds of the City of Greencastle, of like date, tenor and effect, except as to rates of interest and dates of maturity; aggregating Dollars ($ ) ; numbered consecutively from 1 up; issued for the purpose of advance refunding certain Refunded Bonds (as defined in the hereinafter defined Ordinance); providing funds to be applied on the cost of additions, extensions and improvements to the City's sewage works (the "Project "), [to refund interim notes issued in anticipation of the bonds] and to pay issuance expenses including a premium for municipal bond insurance. This bond is issued pursuant to an Ordinance adopted by the Common Council of said " City on the _ day of , 2001, entitled "An Amended and Restated Ordinance of the City 837635.2 -21- of Greencastle authorizing the advance refunding by the City of its Sewage Works Revenue Bonds of 1994; authorizing the issuance of sewage works revenue bonds for the purpose of providing funds to pay the cost of certain additions, extensions and improvements to the municipal sewage works of said City; providing for the safeguarding of the interests of the owners of said bonds; other matters connected therewith, including the issuance of notes in anticipation of bonds, and repealing ordinances inconsistent herewith" (the "Ordinance "), and in accordance with the provisions of Indiana law, including without limitation Indiana Code 5 -1 -5 and Indiana Code 36 -9 -23 each as in effect on the date of delivery of the bonds of this issue (the "Act "), the proceeds of which bonds are to be applied to said advance refunding of the Refunded Bonds and the costs of the Project, [the payment ofnotes issued in anticipation of the bonds,] and expenses incurred in connection therewith, including a premium for municipal bond insurance. The City has previously issued its 2000 Bonds (as defined in the Ordinance) to finance the Project and the City and the State of Indiana have entered into a Financial Assistance Agreement ('FAA ") pertaining to the Project and the 2000 Bonds. Pursuant to the provisions of the Act and the Ordinance, the principal of and interest on this bond and all other bonds of said issue, and any bonds hereafter issued on a panty therewith are payable solely from the Sewage Works Sinking Fund continued by the Ordinance (the "Sinking Fund ") to be provided from the Net Revenues (defined as gross revenues of the sewage works of the City after deduction only for the payment of the expenses for Operation and Maintenance (as defined in the FAA)) of the sewage works of the City, including all such Net Revenues from the existing works, the Project and all additions and improvements thereto and replacements thereof subsequently constructed or acquired, on a parity with the 2000 Bonds. Pursuant to the Ordinance and the Escrow Agreement defined therein, the City of Greencastle has set aside securities (purchased from proceeds of the bonds of this issue and funds on hand of the City) and certain cash in a Trust Account to provide payment of principal of and interest and redemption premium on the Refunded Bonds by the purchase of obligations of the United States of America. The City of Greencastle irrevocably pledges the entire Net Revenues of the sewage works to the prompt payment of the principal of and interest on the bonds authorized by the Ordinance, of which this is one, and any bonds ranking on a parity therewith, including the 2000 Bonds, to the extent necessary for that purpose, and covenants that it will cause to be fixed, maintained and collected such rates and charges for services rendered by the utility as are sufficient in each year for the payment of the proper and reasonable expenses of Operation and Maintenance of the sewage works and for the payment of the sums required to be paid into the Sinking Fund under the provisions of the Act and the Ordinance. If the City or the proper officers thereof shall fail or refuse to so fix, maintain and collect such rates or charges, or if there be a default in the payment of the interest on or principal of this bond, the owner of this bond shall have all of the rights and remedies provided for in the Act, including the right to have a receiver appointed to administer the works and to charge and collect rates sufficient to provide for the payment of this bond and the interest hereon. 837635.2 -22- The City of Greencastle further covenants that it will set aside and pay into its Sinking Fund monthly, as available, or more often if necessary, a sufficient amount of the Net Revenues of the works for payment of (a) the interest on all bonds which by their terms are payable from the revenues of the sewage works, as such interest shall fall due, (b) the necessary fiscal agency charges for paying bonds and interest, (c) the principal of all bonds which by their terms are payable from the revenues of the sewage works, as such principal shall fall due, and (d) an additional amount as a margin of safety to [create and] maintain the debt service reserve required by the Ordinance. Such required payments shall constitute a first charge upon all the Net Revenues of the sewage works, on a parity with the 2000 Bonds. The bonds of this issue maturing on and after January 1, , are redeemable at the option of the City on 1, , or any date thereafter, on thirty (30) days' notice, in whole or in part, in the order of maturity as determined by the City and by lot within a maturity, at face value, without] [any premium] [the following premiums:] if redeemed on ^ 1, _ or thereafter on or before if redeemed on _ 1, _ or thereafter on or before 0% if redeemed on _ 1, or thereafter prior to maturity; plus accrued interest to the date fixed for redemption. [The bonds maturing on January 1, ^ are subject to mandatory sinking fund redemption prior to maturity, at a redemption price equal to the principal amount thereof plus accrued interest on the January I in the years and in the amounts set forth below: Year Amount * Final Maturity] Each Five Thousand Dollars ($5,000) principal amount shall be considered a separate bond for purposes of optional [and mandatory] redemption. If less than an entire maturity is called for redemption, the bonds to be redeemed shall be selected by lot by the Registrar. [If some bonds are to be redeemed by optional redemption and mandatory sinking fund redemption on the same date, the Registrar shall select by lot the bonds for optional redemption before selecting the bonds by lot for the mandatory sinking fund redemption.] 837635.2 -23 - ® Notice of such redemption shall be mailed to the address of the registered owner as shown on the registration records of the City, as of the date which is forty-five (45) days prior to such redemption date, not less than thirty (30) days prior to the date fixed for redemption unless the notice is waived by the registered owner of this bond. The notice shall specify the date and place of redemption and sufficient identification ofthe bonds called for redemption. The place of redemption may be determined by the City. Interest on the bonds so called for redemption shall cease on the redemption date fixed in such notice if sufficient funds are available at the place of redemption to pay the redemption price on the date so named. If this bond shall not be presented for payment or redemption on the date fixed therefor, the City may deposit in trust with its depository bank an amount sufficient to pay such bond or the redemption price, as the case may be, and thereafter the registered owner shall look only to the funds so deposited in trust with said bank for payment and the City shall have no further obligation or liability in respect thereto. This bond is transferable or exchangeable only upon the books of the City kept for that purpose at the principal corporate trust office of the Registrar by the registered owner hereof in person, or by his attorney duly authorized in writing, upon surrender of this bond together with a written instrument of transfer or exchange satisfactory to the Registrar duly executed by the registered owner, or his attorney duly authorized in writing, and thereupon a new fully registered bond or bonds in an authorized aggregate principal amount and of the same maturity, shall be executed and delivered in the name of the transferee or transferees or to the registered owner, as the ® case may be, in exchange therefor. This bond may be transferred without cost to the registered owner except for any tax or governmental charge required to be paid with respect to the transfer. The City, the Registrar, the Paying Agent and any other registrar or paying agent for this bond may treat and consider the person in whose name this bond is registered as the absolute owner hereof for all purposes including for the purpose of receiving payment of, or on account of, the principal hereof and interest due hereon. [The bonds shall be initially issued in a Book Entry System (as defined in the Ordinance). The provisions of this bond and of the Ordinance are subject in all respects to the provisions of the Letter of Representations between the City and The Depository Trust Company, or any substitute agreement, effecting such Book Entry System.] This bond is subject to defeasance prior to redemption or payment as provided in the Ordinance referred to herein. THE OWNER OF THIS BOND, BY THE ACCEPTANCE HEREOF, HEREBY AGREES TO ALL THE TERMS AND PROVISIONS CONTAINED IN THE ORDINANCE. The Ordinance may be amended without the consent of the owners of the bonds as provided in the Ordinance if the Common Council determines, in its sole discretion, that the amendment shall not adversely affect the rights of any of the owners of the bonds. The bonds maturing in any one year are issuable only in fully registered form in the denomination of $5,000 or any integral multiple thereof. 837675.2 -24- STATEMENT OF INSURANCE MBIA Insurance Corporation (the "Insurer ") has issued a policy containing the following provisions, such policy being on file at the corporate trust department of of, The Insurer, in consideration of the payment of the premium and subject to the terms of this policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of the following described obligations, the full and complete payment required to be made by or on behalf of the Issuer to , or its successor (the "Paying Agent ") of an amount equal to (i) the principal of (either at the stated maturity or by any advancement of maturity pursuant to a mandatory sinking fund payment) and interest on, the Obligations (as that term is defined below) as such payments shall become due but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, the payments guaranteed hereby shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered from any owner pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii) of the preceding sentence shall be referred to herein collectively as the "Insured Amounts." "Obligations" shall mean: City of Greencastle, Indiana Sewage Works Revenue and Refunding Revenue Bonds of 2001 Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer from the Paying Agent or any owner of an Obligation the payment of an Insured Amount for which is then due, that such required payment has not been made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with State Street Bank and Trust Company, N.A., in New York, New York, or its successor, sufficient for the payment of any such Insured Amounts which are then due. Upon presentment and surrender of such Obligations or presentment of such other proof of ownership of the Obligations, together with any appropriate instruments of assignment to evidence the assignment of the Insured Amounts due on the Obligations as are paid by the Insurer, and appropriate instruments to effect the appointment of the Insurer as agent for such owners of the Obligations in any legal proceeding related to payment of Insured Amounts on the Obligations, such instruments being in a form satisfactory to State Street Bank and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall disburse to such owners or the Paying Agent payment of the Insured Amounts due on such Obligations, less any 837635.2 -25- amount held by the Paying Agent for the payment of such Insured Amounts and legally available therefor. This policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Obligation. As used herein, the term 'owner" shall mean the registered owner of any Obligation as indicated in the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer for such purpose. The term owner shall not include the Issuer or any parry whose agreement with the issuer constitutes the underlying security for the Obligations. .Any service of process on the Insurer may be made to the Insurer at its offices located at 113 King Street, Armonk, New York 10504 and such service of process shall be valid and binding. This policy is non - cancelable for any reason. The premium on this policy is not refundable for any reason including the payment prior to maturity of the Obligations. MBIA INSURANCE CORPORATION ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto this bond and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney, to transfer the within bond in the books kept for the registration thereof with full power of substitution in the premises. Dated: NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution participating in a Securities Transfer Association recognized signature guarantee program. NOTICE: The signature to this assignment must correspond with the name as it appears on the face of the within bond in every particular, without alteration or enlargement or any change whatsoever. 837635.2 -26- ® Sec. 7. Authorization for Preparation and Sale of the BANS and the Bonds; Municipal Bond Insurance (a) The Clerk- Treasurer is hereby authorized and directed to have the BANs and the Bonds prepared, and the Mayor and Clerk- Treasurer are hereby authorized and directed to execute and attest the BANS and the Bonds in the form and manner provided herein. If the Bonds issued to refund the Refunded Bonds are sold on a negotiated basis, the Clerk- Treasurer is hereby authorized and directed to deliver said Bonds to a purchaser to be selected by either the Mayor, the Clerk- Treasurer, or both, with the advice of the City's financial advisor ( "Underwriter ") in accordance with a Purchase Contract ( "Purchase Contract ") between the City and the Underwriter. The Mayor and the Clerk- Treasurer are authorized to execute the Purchase Contract and deliver said Bonds to the Underwriter so long as their terms are consistent with this ordinance. Such Purchase Contract shall establish a final principal amount, purchase price, interest rates, maturity schedule, optional • redemption features, and term bond mandatory redemptions, if any. (b) The Clerk - Treasurer is hereby authorized to appoint a financial institution to serve as escrow trustee ( "Escrow Trustee ") for the Bonds in accordance with the terms of the Escrow Agreement between the City and the Escrow Trustee ( "Escrow Agreement "). The substantially final form of Escrow Agreement attached hereto is hereby approved by the Common Council, and the Mayor and the Clerk- Treasurer are hereby authorized and directed to complete, execute and attest the same on behalf of the City so long as its provisions are consistent with this ordinance and the Purchase Contract. (c) If the Bonds issued to refund the Refunded Bonds are sold at a competitive sale with the Bonds issued to fund additional costs of the Project, the Clerk - Treasurer is hereby authorized and e directed to deliver the BANS and the Bonds to the respective purchasers thereof. At the time of -27- 837635.2 a delivery of the BANS and the Bonds, the Clerk- Treasurer shall collect the full amount which the respective purchasers have agreed to pay therefor, which amount shall not be less than 99% of the face value of said BANs and not less than 99% of the face value of said Bonds, as the case may be, plus accrued interest to the date of delivery. Payment for the BANs may be made in installments. The Bonds, when fully paid for and delivered to the purchaser, shall be the binding special revenue obligations of the City payable out of the Net Revenues of the sewage works, on a panty with the 2000 Bonds. The proper officers of the City are hereby directed to sell the Bonds, to draw all proper and necessary warrants, and to do whatever acts and things which may be necessary to carry out the provisions of this ordinance. (d) The execution, by either the Mayor, the Clerk- Treasurer, the Underwriter, or the City's financial advisor, of a subscription for United States Treasury Obligations — State an Local 1 9 Government Series for investments of proceeds ofthe Bonds to be held under the Escrow Agreement in a manner consistent with this ordinance is hereby approved. (e) Distribution of an Official Statement (preliminary and final) prepared by Crowe Chizek and Company, LLP, on behalf of the City, is hereby approved and the Mayor or the Clerk- Treasurer are authorized and directed to execute the Official Statement on behalf of the City in a form consistent with this ordinance. The Mayor or the Clerk- Treasurer are hereby authorized to designate the preliminary Official Statement as "nearly final" for purposes of Rule 15c2 -12 promulgated by the Securities and Exchange Commission. (f) The Common Council authorizes the purchase of the Municipal Bond Insurance Policy guaranteeing the payment of the Bonds from MBIA. The cost of obtaining the Municipal 837635.2 -28- 0 Bond Insurance Policy shall be considered as apart of the cost of the issuance of the Bonds and shall be paid out of the proceeds of the Bonds or out of other funds of the sewage works system. Sec. 8. RefundinP of the Refunded Bonds Concurrently with the delivery of the Bonds, the Clerk- Treasurer shall acquire, with the proceeds of a portion of the Bonds and cash on hand, direct obligations of or obligations the principal and interest on which are unconditionally guaranteed by, the United States of America ( "Government Obligations ") to be used, together with certain cash from the proceeds of the Bonds and cash on hand as set forth in the Escrow Agreement, to refund and legally defease the Refunded Bonds all as set forth in the Escrow Agreement. In order to refund the Refunded Bonds, the Clerk- Treasurer shall deposit Government Obligations and certain cash with the Escrow Trustee under the Escrow Agreement in an amount sufficient to provide money for payment of the principal of and interest and redemption premium on the Refunded Bonds until January 1, 2005, the earliest date upon which the Refunded Bonds may be called for redemption. The Clerk- Treasurer shall obtain a verification of an accountant as to the sufficiency of the funds deposited in the Trust Account under the Escrow Agreement to accomplish said refunding and legal defeasance of the Refunded Bonds. Sec. 9. Bond Sale Notice If the Bonds will be sold at a competitive bond sale, prior to the sale of said Bonds, the Clerk- Treasurer shall cause to be published either (i) a notice of bond sale in the Banner - Graphic the only newspaper published in the City of Greencastle, Indiana, two times, at least one week apart, the first publication made at least fifteen (15) days before the date of the sale and the second publication being made at least three (3) days before the date of the sale, or (ii) a notice of intent to sell in the Banner- Graphic and the Court & Commercial Record all in accordance ® with IC 5 -1 -11 and IC 5 -3 -1. A notice of sale may also be published one time in the Court & 837635.2 -29- ® Commercial Record and a summary notice may also be published in The Bond Buyer in New York, New York. The notice shall state the character and amount of the Bonds, the maximum rate of interest thereon, the terms and conditions upon which bids will be received and the sale made, and such other information as the Clerk- Treasurer and the attorneys employed by the City shall deem advisable and any summary notice may contain any information deemed so advisable. The notice may provide, among other things, that each bid shall be accompanied by a certified or cashier's check or a financial surety bond in an amount equal to 1% of the principal amount of the Bonds described in the notice to guarantee performance on the part of the bidder. If a financial surety bond is used, it must be from an insurance company licensed to issue such bond in the State of Indiana, and such bond must be submitted to the City prior to the opening of the bids. The financial surety bond must identify each bidder whose good faith deposit is guaranteed by such financial surety bond. If the ® Bonds are awarded to a bidder utilizing a financial surety bond, then that purchaser is required to submit to the City a certified or cashier's check (or wire transfer such amount as instructed by the City) not later than 3:30 p.m. (Greencastle Time) on the next business day following the award. In the event the successful bidder shall fail or refuse to accept delivery of the Bonds and pay for the same as soon as the Bonds are ready for delivery, or at the time fixed in the notice of sale, then said check and the proceeds thereof shall be the property of the City and shall be considered as its liquidated damages on account of such default. Bidders for said Bonds will be required to name the rate or rates of interest which the Bonds are to bear, not exceeding the maximum rate hereinbefore fixed, and such interest rate or rates shall be in multiples of one-eighth (1/8) or one - twentieth (1/20) of one percent (1 %). The rate bid on a maturity shall be equal to or greater than the rate bid on the o immediately preceding maturity. No conditional bid or bid for less than 99% of the face amount of 637635.2 -30- the Bonds will be considered. The City reserves the right to adjust the maturity schedule based upon the rates bid by the successful bidder following the sale in order to accomplish as level annual debt service as practicable pursuant to Section 2(c). The opinion of Ice Miller, bond counsel of Indianapolis, Indiana, approving the legality of said Bonds, will be furnished to the purchaser at the expense of the City. The Bonds shall be awarded by the Clerk - Treasurer to the best bidder who has submitted his bid in accordance with the terms of this ordinance, IC 5 -1 -I 1 and the notice of sale. The best bidder will be the one who offers the lowest net interest cost to the City, to be determined by computing the total interest on all of the Bonds to their maturities and adding thereto the discount bid, if any, and deducting the premium bid, if any. The right to reject any and all bids shall be reserved. If an acceptable bid is not received on the date of sale, the sale may be continued from day to day Is thereafter without further advertisement for a period of thirty (30) days, during which time no bid which provides a higher net interest cost to the City than the best bid received at the time of the advertised sale will be considered. Sec. 10. Use of Proceeds for Proiect and Costs of Issuance Any accrued interest and any premium received at the time of the delivery of the Bonds shall be deposited in the Sewage Works Sinking Fund hereinafter defined. The remaining proceeds from the sale of the Bonds, after allocating the amount needed to accomplish the refunding ofthe Refunded Bonds in accordance with Section 8 and to the extent not used to refund BANS, and BAN proceeds shall be deposited in a bank or banks which are legally designated depositories for the funds of the City, in a special account or accounts to be designated as "City of Greencastle, Sewage Works Construction Account" (the "Construction Account "). All funds deposited to the credit of the Sewage Works Sinking Fund or 837635.2 -31 - the Construction Account shall be deposited, held, secured or invested in accordance with the laws of the State of Indiana relating to the depositing, holding, securing or investing of public funds, including particularly IC 5 -13, as amended and supplemented. The funds in the Construction Account shall be expended only for the purpose of paying the cost of the Project, refunding the BANS, if issued, or as otherwise required by the Act and for the expenses of issuance of the Bonds. The cost of obtaining the legal services of Ice Miller, shall be considered as a part of the cost of the refunding and the Project on account of which the BANS and Bonds are issued. Any balance or balances remaining unexpended in such special account or accounts after completion of the Project and the funding of the Trust Account, which are not required to meet unpaid obligations incurred in connection with such Project, shall either (1) be paid into the Sinking Fund and used solely for the purposes of said Sinking Fund or (2) be used for the same purpose or type of project for which the Bonds were originally issued, all in accordance with IC 5 -1 -13, as amended and supplemented. Sec. 11. Financial Records and Accounts; Continuing Disclosure The City shall keep proper records and books of account, separate from all of its other records and accounts, in which complete and correct entries shall be made showing all revenues received on account of the operation of the sewage works and all disbursements made therefrom and all transactions relating to the utility. Copies of all such statements and reports shall be kept on file in the office of the Clerk - Treasurer. The substantially final form of Continuing Disclosure Undertaking Agreement (the "Agreement') attached hereto is hereby approved by the Common Council, and the Mayor or the Clerk- Treasurer are hereby authorized and directed to complete and execute the same on behalf of the City. Notwithstanding any other provisions of this ordinance, failure of the City to comply with the Agreement shall not be considered an event of default under the Bonds or this ordinance. -32- 837635.2 Sec. 12. Pledge of Net Revenues The interest on and the principal of the Bonds issued pursuant to the provisions of this ordinance, and any bonds hereafter issued on a panty therewith, shall constitute a first charge on all the Net Revenues, on a parity with the 2000 Bonds, and such Net Revenues are hereby irrevocably pledged to the payment of the interest on and principal of such Bonds, to the extent necessary for that purpose. Sec. 13. Revenue Fund All revenues derived from the operation of the sewage works and from the collection of sewer rates and charges shall be deposited in the Revenue Fund, hereby continued, and segregated and deposited as set forth in this ordinance. Of these revenues the proper and reasonable expenses of operation, repair and maintenance of the works shall be paid, the principal and interest of all bonds and fiscal agency charges of registrars or paying agents shall be paid, the reserve shall be funded, and the costs of replacements, extensions, additions and improvements shall be paid. No moneys derived from the revenues of the sewage works shall be transferred to the general fund of the City or to be used for any purpose not connected with the sewage works so long as any bonds payable from the revenues of the sewage works are outstanding. Sec. 14. Operation and Maintenance Fund There is hereby continued a fund known as the Operation and Maintenance Fund (the "Operation and Maintenance Fund "). On the last day of each calendar month there shall be credited from the Revenue Fund to the Operation and Maintenance Fund a sufficient amount of the revenues of the sewage works so the balance in said fund shall be sufficient to pay the expenses of operation, repair and maintenance for the then next succeeding two calendar months. The moneys credited to this Fund shall be used for the payment of the reasonable and proper operation, repair and maintenance expenses of the sewage works on a day -to -day basis, but none of the monies in such fund shall be used for depreciation, replacements, improvements, C -33 - 837635.2 extensions or additions. Any balance in said Fund in excess of the expected expenses of operation, replacements and maintenance for the next succeeding month may be transferred to the Sewage Works Sinking Fund if necessary to prevent a default in the payment of principal of or interest on the outstanding bonds. Sec. 15. Sewage Works Sinking Fund (a) There is hereby continued a special fund designated the Sewage Works Sinking Fund (herein, "Sewage Works Sinking Fund" or "Sinking Fund "). There shall be deposited from the Revenue Fund into said Sinking Fund for the payment of the principal of and interest on revenue bonds which by their terms are payable from the Net Revenues of the sewage works and the payment of any fiscal agency charges in connection with the payment of the bonds and interest thereon a sufficient amount of the Net Revenues of said sewage works to meet the requirements of the Bond and Interest Account and Debt Service Reserve Account 0 hereby continued in the Sinking Fund. Such payments shall continue until the balance in the Bond and Interest Account, plus the balance in the Debt Service Reserve Account equal the principal of and interest on all of the then outstanding bonds of the sewage works to their final maturity. (b) Bond and Interest Account The Bond and Interest Account is hereby continued. Any moneys heretofore accumulated to pay principal and interest for the Refunded Bonds shall be credited to and become a part of the Trust Account under the Escrow Agreement and shall be applied on the first payments made from the Trust Account. There shall be credited on the last day of each calendar month from the Revenue Fund to the Bond and Interest Account an amount of the Net Revenues equal to at least one - twelfth (1/12) of the principal of and at least one -sixth (1/6) of the interest on all then outstanding bonds payable on the then next succeeding principal and interest payment dates until the amount of principal and interest payable on the then next succeeding 837635.2 -34- ® principal and interest payment dates shall have been so credited. There shall similarly be credited to the Account any amount necessary to pay the bank fiscal agency charges for paying principal and interest on the bonds as the same become payable. The City shall, from the sums deposited in the Sinking Fund and credited to the Bond and Interest Account, remit promptly to the registered owner or to the bank fiscal agency sufficient moneys to pay the interest and principal on the due dates thereof together with the amount of bank fiscal agency charges. (c) Debt Service Reserve Account The Debt Service Reserve Account (Reserve Account ") is hereby continued. On the date of delivery of the Bonds, funds on hand of the sewage works, Bond proceeds or a combination thereof may be deposited into the Reserve Account. The balance in the Reserve Account shall equal but not exceed the least of (i) the maximum annual debt service on the Bonds, the 2000 Bonds and any other parity bonds of the City payable from the Net Revenues of the • sewage works hereafter issued ('Panty Bonds "), (ii) 125% of average annual debt service on the Bonds, the 2000 Bonds and any Parity Bonds, or (iii) 10% of the proceeds of the Bonds, the 2000 Bonds and any Parity Bond (the 'Reserve Requirement "). If no initial deposit is made or the initial deposit does not cause the Reserve Account to equal the Reserve Requirement, the City shall deposit a sum of Net Revenues into the Reserve Account on the last day of each calendar month until the balance therein equals the Reserve Requirement. The monthly deposits shall be equal in amount and sufficient to accumulate the Reserve Requirement within five (5) years of the date of delivery of the Bonds. The Reserve Account shall constitute the margin for safety and protection against default in the payment of principal of and interest on the 2000 Bonds, the Bonds and any Parity Bonds, and the e moneys in the Reserve Account shall be used to pay current principal and interest on the 2000 877675.2 -35 - Bonds, the Bonds and any Parity Bonds to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. Any deficiency in the balance maintained in the Reserve Account shall be made up from the next available Net Revenues remaining after credits into the Bond and Interest Account. In the event moneys in the Reserve Account are transferred to the Bond and Interest Account to pay principal and interest on the Bonds, the 2000 Bonds or any Panty Bonds, then such depletion of the balance in the Reserve Account shall be made up from the next available Net Revenues after the credits into the Bond and Interest Account hereinbefore provided for. Any moneys in the Reserve Account in excess of the Reserve Requirement shall be transferred to the Sewage Works Improvement Fund and in no event shall excess moneys be held in the Reserve Account. Sec. 16. Sewage Works Improvement Fund There is hereby continued a special fund designated the "Sewage Works Improvement Fund." On the last day of each calendar month, after meeting requirements for the operation, repair and maintenance, and the Sinking Fund, all available revenues shall be credited to the Sewage Works Improvement Fund. Said Fund shall be used for improvements, replacements, additions and extensions of the sewage works. Moneys in the Sewage Works Improvement Fund shall be transferred to the Sinking Fund if necessary to prevent a default in the payment of principal and interest on the then outstanding Bonds or 2000 Bonds, or, if necessary to eliminate any deficiencies in credits to or minimum balance in the Reserve Account of the Sinking Fund or may be transferred to the Operation and Maintenance Fund to meet unforeseen contingencies in the operation, repair and maintenance of the sewage works. The City may also elect to use Net Revenues on deposit in the Sewage Works Improvement Fund to pay interest on the BANS. 837635.2 -36- Sec. 17. Maintenance of Funds The Sinking Fund shall be deposited in and maintained as a separate account or accounts from all other accounts of the City. The Operation and Maintenance Fund and the Improvement Fund may be maintained in a single account, or accounts, but such account, or accounts, shall likewise be maintained separate and apart from all other accounts of the City and apart from the Sinking Fund account or accounts. All moneys deposited in the accounts shall be deposited, held and secured as public funds in accordance with the public depository laws of the State of Indiana; provided that moneys therein may be invested in obligations in accordance with the applicable laws, including particularly Indiana Code, Title 5, Article 13, as amended or supplemented, and in the event of such investment the income therefrom shall become a part of the funds invested and shall be used only as provided in this ordinance. Nothing in this section or elsewhere in this ordinance shall be construed to require that separate bank accounts be established and maintained for the Funds and Accounts continued by this ordinance. Sec. 18. Defeasance of the Bonds If, when the Bonds or a portion thereof shall have become due and payable in accordance with their terms or shall have been duly called for redemption or irrevocable instructions to call the Bonds or a portion thereof for redemption shall have been given, and the whole amount of the principal and the interest and the premium, if any, so due and payable upon all of the Bonds or a portion thereof then outstanding shall be paid; or (i) cash (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in (ii) below), or (ii) direct obligations of (including obligations issued or held in book entry form on the books of) the Department of the Treasury of the United States of America, the principal of and the interest on which when due will provide sufficient moneys for such purpose, shall be held in trust for such purpose, and provision shall also be made for paying all fees and 937635.2 -37- 0 expenses for the redemption, then and in that case the Bonds or any designated portion thereof issued hereunder shall no longer be deemed outstanding or entitled to the pledge of the Net Revenues of the City's sewage works. Sec. 19. Rate Covenant The City covenants and agrees that it will establish and maintain just and equitable rates or charges for the use of and the service rendered by the works, to be paid by the owner of each and every lot, parcel of real estate or building that is connected with and uses said sewage works by or through any part of the sewage system of the City, or that in any way uses or is served by such works, at a level adequate to produce and maintain sufficient revenue (including user and other charges, fees, income, or revenues available to the City) to provide for the proper Operation and Maintenance of the works, to comply with and satisfy all covenants contained in this ordinance and the FAA and for the payment of the sums required to be paid into the Sewage Works ® Sinking Fund by the Act and this ordinance. Such rates or charges shall, if necessary, be changed and readjusted from time to time so that the revenues therefrom shall always be sufficient to meet the expenses of Operation and Maintenance of the sewage works and the requirements of the Sinking Fund. The rates and charges so established shall apply to any and all use of such works by and service rendered to the City and all departments thereof, and shall be paid by the City or the various departments thereof as the charges accrue. Sec. 20. Additional Bond Provisions The City reserves the right to authorize and issue additional BANs at any time ranking on a parity with the BAN. The City also reserves the right to authorize and issue additional Parity Bonds payable out of the Net Revenues of its sewage works ranking on a parity with the Bonds for the purpose of financing the cost of future additions, 837635.2 -38- extensions and improvements to its sewage works, and to refund obligations subject to the following conditions: (a) All required payments into the Sinking Fund shall have been made in accordance with the provisions of this ordinance, and the interest on and principal of all bonds payable from the Net Revenues of the sewage works shall have been paid in accordance with their terms. The Reserve Requirement shall be satisfied for the additional Parity Bonds either at the time of delivery of the additional Parity Bonds or over a five (5) year or shorter period in a manner that is commensurate with the requirement established in Section 15(c) of this ordinance. (b) The Net Revenues of the sewage works in the fiscal year immediately preceding the issuance of any such Panty Bonds shall be not less than one hundred twenty -five percent (125 %) of the maximum annual interest and principal requirements of the then outstanding bonds and the additional Parity Bonds proposed to be issued; or, prior to the issuance of the Panty Bonds the sewage rates and charges shall be increased sufficiently so that the increased rates and charges applied to the previous fiscal year's operations would have produced Net Revenues for said year equal to not less than one hundred twenty -five percent (125 %) of the maximum annual interest and principal requirements of all bonds payable from the revenues of the sewage works, including the additional Panty Bonds proposed to be issued. For purposes of this subsection, the records of the sewage works shall be analyzed and all showings prepared by a certified public accountant or nationally recognized firm of professionals experienced in analyzing financial records of municipal utilities employed by the City for that purpose. 637635.2 -39- (c) The interest on the additional parity bonds shall be payable semiannually on the first days of January and July and the principal on, or mandatory sinking fund redemption dates for, the additional parity bonds shall be payable annually on January 1. (d) So long as the 2000 Bonds are outstanding, (i) the City has obtained the consent of the State, (ii) the City has faithfully performed and is in compliance with each of its obligations, agreements, and covenants contained in the FAA and this ordinance, and (iii) the City is in compliance with its National Pollutant Discharge Elimination System permits, except for non- compliance for which the Parity Bonds are issued including refunding bonds prior to, but part of, the overall plan to eliminate non - compliance. The authority to issue Parity Bonds to refund obligations shall be included in the 2000 Ordinance and the City has received the consent of the State to add such provision to Section 17 of the 2000 Ordinance. Sec. 21. Further Covenants of the City: Maintenance, Insurance, Pledge Not To Encumber, Subordinate Indebtedness and Contract with Bondholders For the purpose of further safeguarding the interests of the owners of the BANS and the Bonds, it is hereby specifically provided as follows: (a) All contracts let by the City in connection with the construction of the Project shall be let after due advertisement as required by the laws of the State of Indiana, and all contractors shall be required to furnish surety bonds in an amount equal to 100% of the amount of such contracts, to insure the completion of said contracts in accordance with their terms, and such contractors shall also be required to carry such employers' liability and public liability insurance as are required under the laws of the State of Indiana in the case of public contracts, and shall be governed in all respects by the laws of the State of Indiana relating to public contracts. 0 40 - 8376352 ® (b) The Project shall be constructed under plans and specifications approved by a competent engineer designated by the City. All estimates for work done or material furnished shall first be checked by the engineer and approved by the City. (c) So long as any of the Bonds or BANs are outstanding, the City shall maintain insurance on the insurable parts of the system, of a kind and in an amount such as is usually carried by private corporations engaged in a similar type of business. All insurance shall be placed with responsible insurance companies qualified to do business under the laws of the State of Indiana. All insurance proceeds shall be used either in replacing or restoring the property destroyed or damaged unless, if the Bonds or BANs are sold to the SRF Program, the State of Indiana consents to a different use. All insurance proceeds shall be used either in replacing or restoring the property destroyed or damaged, or shall be deposited in the Sinking Fund. (d) So long as any of the BANs or Bonds are outstanding, the City shall not mortgage, pledge or otherwise encumber the property and plant of its sewage works system, or any part thereof, and shall not sell, lease or otherwise dispose of any part of the same, excepting only such machinery, equipment or other property as may be replaced, or shall no longer be necessary for use in connection with said utility, provided that the City shall obtain the prior written Consent of the State of Indiana if such BANs or Bonds are sold to the SRF Program. (e) If the BANs or Bonds are sold to the SRF Program, the City shall not borrow any money, enter into any contract or agreement or incur any other liabilities in connection with the sewage works, other than for normal operating expenditures, without the prior written consent of the State of Indiana if such undertaking would involve, commit or use the revenues of the sewage works. 837635.2 -41- ® (f) Except as otherwise specifically provided in Section 20 of this ordinance, so long as any of the Bonds are outstanding, no additional bonds or other obligations pledging any portion of the revenues of the system shall be authorized, issued or executed by the City, except such as shall be made junior and subordinate in all respects to the Bonds, unless all of the Bonds are redeemed or defeased coincidentally with the delivery of such additional bonds or other obligations. (g) The City shall take all actions or proceedings necessary and proper, to the extent permitted by law, to require connection of all property where liquid and solid waste, sewage, night soil or industrial waste is produced with available sanitary sewers. The City shall, insofar as possible, and to the extent permitted by law, cause all such sanitary sewers to be connected with said sewage works. (h) The provisions of this ordinance shall constitute a contract by and between the City • and the owners of the Bonds and BANs herein authorized, all the terms of which shall be enforceable by any bondholder by any and all appropriate proceedings in law or in equity. After the issuance of the Bonds or BANS, this ordinance shall not be repealed, amended or modified in any respect which will adversely affect the rights or interests of the owners of the Bonds or BANs, nor shall the Common Council or any other body of the City adopt any law, ordinance or resolution in any way adversely affecting the rights of such owners so long as any of the Bonds, BANs, or the interest thereon, remain outstanding or unpaid. Except in the case of changes described in Section 22(a) -(f), this ordinance may be amended, however, without the consent of the owners of the Bonds or BANS, if the Common Council determines, in its sole discretion, that such amendment would not adversely affect the owners of the Bonds or BANS. O -42- 837635.2 " (i) The provisions of this ordinance shall be construed to create a trust in the proceeds of the sale of the Bonds and BANS herein authorized for the uses and purposes herein set forth, and the owners of the Bonds and BANS shall retain a lien on such proceeds until the same are applied in accordance with the provisions of this ordinance and said governing Act. The provisions of this ordinance shall also be construed to create a trust in the Net Revenues herein directed to be set apart and paid into the Sinking Fund for the uses and purposes of that Fund as in this ordinance set forth. The owners of the Bonds shall have all the rights, remedies and privileges set forth in the provisions of the governing Act, including the right to have a receiver appointed to administer the sewage works in the event the City shall fail or refuse to fix and collect sufficient rates and charges for those purposes, or shall fail or refuse to operate and maintain said system and to apply properly the revenues derived from the operation thereof, or if there be a default in the payment of the interest " on or principal of the Bonds. Sec. 22. Amendments with Consent of Bondholders Subject to the terms and provisions contained in this section, and not otherwise, the owners of not less than sixty -six and two- thirds percent (66 2/3 %) in aggregate principal amount of the Bonds issued pursuant to this ordinance and then outstanding shall have the right from time to time; to consent to and approve the adoption by the Common Council of the City of such ordinance or ordinances supplemental hereto or amendatory hereof, as shall be deemed necessary or desirable by the City for the purpose of modifying, altering, amending, adding to or rescinding in any particular any of the terms or provisions contained in this ordinance, or in any supplemental ordinance; provided, however, that nothing herein contained shall permit or be construed as permitting: " 43 - 837635.2 ® (a) An extension of the maturity of the principal of or interest on, or any mandatory sinking fund redemption date for, any Bond issued pursuant to this ordinance; or (b) A reduction in the principal amount of any Bond or the redemption premium or the rate of interest thereon; or (c) The creation of a lien upon or a pledge of the revenues or Net Revenues ofthe sewage works ranking prior to the pledge thereof created by this ordinance; or (d) A preference or priority of any Bond or Bonds issued pursuant to this ordinance over any other Bond or Bonds issued pursuant to the provisions of this ordinance; or (e) A reduction in the aggregate principal amount of the Bonds required for consent to such supplemental ordinance; or (0 A reduction in the Reserve Requirement. If the owners of not less than sixty-six and two - thirds percent (66 2/3 %) in aggregate principal amount of the Bonds outstanding at the time of adoption of such supplemental ordinance shall have consented to and approved the adoption thereof by written instrument to be maintained on file in the office of the Clerk- Treasurer of the City, no owner of any Bond issued pursuant to this ordinance shall have any right to obj ect to the adoption of such supplemental ordinance or to obj ect to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the Common Council of the City from adopting the same, or from taking any action pursuant to the provisions thereof. Upon the adoption of any supplemental ordinance pursuant to the provisions of this section, this ordinance shall be, and shall be deemed, modified and amended in accordance therewith, and the respective rights, duties and obligations under this ordinance of the City and all owners of Bonds then 837635.2 -44- 0 outstanding, shall thereafter be determined, exercised and enforced in accordance with this ordinance, subj ect in all respects to such modifications and amendments. Notwithstanding anything contained in the foregoing provisions of this ordinance, the rights and obligations of the City and of the owners of the Bonds authorized by this ordinance, and the terms and provisions of the Bonds and this ordinance, or any supplemental or amendatory ordinance, may be modified or altered in any respect with the consent of the City and the consent of the owners of all the Bonds then outstanding. Sec. 23. Investment of Funds (a) The Clerk- Treasurer is hereby authorized to invest moneys pursuant to the provisions of this ordinance and IC 5- 1 -14 -3 (subject to applicable requirements of federal law to insure such yield is then current market rate) to the extent necessary or advisable to preserve the exclusion from gross income of interest on the Bonds and BANs under federal law. • (b) The Clerk- Treasurer shall keep full and accurate records of investment earnings and income from moneys held in the funds and accounts created or referenced herein. In order to comply with the provisions ofthe ordinance, the Clerk- Treasurer is hereby authorized and directed to employ consultants or attorneys from time to time to advise the City as to requirements of federal law to preserve the tax exclusion. The Clerk- Treasurer may pay any fees as operation expenses of the sewage works. Sec. 24. Tax Covenants In order to preserve the exclusion of interest on the Bonds and BANS from gross income for federal tax purposes under Section 103 of the Internal Revenue Code of 1986 as existing on the date of issuance of the Bonds or BANs, as the case may be (the "Code "), and as an inducement to purchasers of the Bonds and BANS, the City represents, covenants and agrees that: is -45- S37635.2 S (a) The sewage works will be available for use by members of the general public. Use by a member of the general public means use by natural persons not engaged in a trade or business. No person or entity other than the City or another state or local governmental unit will use more than 10% of the proceeds of the Bonds or BANs or property financed by the Bond or BAN proceeds other than as a member of the general public. No person or entity other than the City or another state or local governmental unit will own property financed by Bond or BAN proceeds or will have any actual or beneficial use of such property pursuant to a lease, a management or incentive payment contract, arrangements such as take -or -pay or output contracts or any other type of arrangement that conveys other special legal entitlements and differentiates that person's or entity's use of such property from use by the general public, unless such uses in the aggregate relate to no more than 10% of the proceeds of the Bonds or BANs, as the case may be. If the City enters into a management ® contract for the sewage works, the terms of the contract will comply with IRS Revenue Procedure 97 -13, as it may be amended, supplemented or superseded for time to time, so that the contract will not give rise to private business use under the Code and the Regulations, unless such use in aggregate relates to no more than 10% of the proceeds of the Bonds or BANS, as the case may be. (b) No more than 10% of the principal of or interest on the Bonds or BANS is (under the terms of the Bonds or BANS, this ordinance or any underlying arrangement), directly or indirectly, secured by an interest in property used or to be used for any private business use or payments in respect of any private business use or payments in respect of such property or to be derived from payments (whether or not to the City) in respect of such property or borrowed money used or to be used for a private business use. C'J 337635.2 -46- ® (c) No more than 5% of the Bond or BAN proceeds will be loaned to any person or entity other than another state or local governmental unit. No more than 5% of the Bond or BAN proceeds will be transferred, directly or indirectly, or deemed transferred to a nongovernmental person in any manner that would in substance constitute a loan of the Bond or BAN proceeds. (d) The City reasonably expects, as of the date hereof, that the Bonds and BANs will not meet either the private business use test described in paragraph (a) and (b) above or the private loan test described in paragraph (c) above during the entire term of the Bonds or BANS, as the case may be. (e) No more than 5% of the proceeds of the Bonds or BANS will be attributable to private business use as described in (a) and private security or payments described in (b) attributable to unrelated or disproportionate private business use. For this purpose, the private business use test is ® applied by taking into account only use that is not related to any government use of proceeds of the issue (Unrelated Use) and use that is related but disproportionate to any governmental use of those proceeds (Disproportionate Use). (f) The City will not take any action nor fail to take any action with respect to the Bonds or BANS that would result in the loss of the exclusion from gross income for federal tax purposes on the Bonds or BANS pursuant to Section 103 of the Code, nor will the City act in any other manner which would adversely affect such exclusion. The City covenants and agrees not to enter into any contracts or arrangements which would cause the Bonds or BANS to be treated as private activity bonds under Section 141 of the Code. (g) It shall be not an event of default under this ordinance if the interest on any Bond or BAN is not excludable from gross income for federal tax purposes or otherwise pursuant to any El -47- 837635.2 ® provision of the Code which is not currently in effect and in existence on the date of issuance of the Bonds or BANs, as the case may be. (h) These covenants are based solely on current law in effect and in existence on the date of delivery of such Bonds or BANs, as the case may be. (i) The City represents that it will rebate any arbitrage profits to the United States of America in accordance with the Code. 0) The City represents that: (1) The Bonds and the BANS are not private activity bonds as defined in Section 141 of the Code; (2) The City hereby designates the Bonds and the BANS as qualified tax- exempt obligations for purposes of Section 265(b) of the Code; (3) The reasonably anticipated amount of qualified tax- exempt obligations (including qualified 501(c)(3) obligations and tax - exempt leases but excluding other private activity bonds) which will be issued by the City, and all entities subordinate to the City during 2001 does not exceed $10,000,000; and (4) The City will not designate more than $10,000,000 of qualified tax- exempt obligations during 2001. Therefore, the Bonds and the BANS qualify for the exception in the Code from the disallowance of 100% of the deduction by financial institutions of interest expense allocable to newly acquired tax- exempt obligations. Sec. 25. Issuance of BANs (a) The City, having satisfied all the statutory requirements for the issuance of its Bonds, may elect to issue its BAN or BANS to a financial institution, the Indiana -48- 837635.2 Bond Bank or any other purchaser pursuant to a Bond Anticipation Note Purchase Agreement (the "Purchase Agreement ") to be entered into between the City and the purchaser of the BAN or BANS. The Common Council hereby authorizes the issuance and execution of the BAN or BANS in lieu of initially issuing the Bonds to provide interim financing for the refunding or the Project until permanent financing becomes available. It shall not be necessary for the City to repeat the procedures for the issuance of its Bonds, as the procedures followed before the issuance of the BAN or BANs are for all purposes sufficient to authorize the issuance of the Bonds and the use of the proceeds to repay the BAN or BANS. (b) The Mayor and the Clerk- Treasurer are hereby authorized and directed to execute a Purchase Agreement in such form or substance as they shall approve acting upon the advice of counsel. The Mayor and the Clerk- Treasurer may also take such other actions or deliver such other certificates as are necessary or desirable in connection with the issuance of the BANS or the Bonds and the other documents needed for the financing as they deem necessary or desirable in connection therewith. Sec. 26. Noncompliance with Tax Covenants Notwithstanding any other provisions of this ordinance, the covenants and authorizations contained in this ordinance (the "Tax Sections ") which are designed to preserve the exclusion of interest on the Bonds and BANS from gross income under federal law (the "Tax Exemption ") need not be complied with if the City receives an opinion of nationally recognized bond counsel that any Tax Section is unnecessary to preserve the Tax Exemption. Sec. 27. MBIA Requirements As long as the Municipal Bond Insurance Policy is in effect, the City shall: 837635.2 (a) Provide to MBIA any notice which is required to be given to any other party pursuant to this ordinance; all notices required to be given to MBIA hereunder shall be in writing and shall be sent by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504 Attention: Insured Portfolio Management. (b) Provide to MBIA notice of any amendment to this ordinance permitted by Section 21 hereof which amendment does not require consent of the holders of the Bonds, (c) Request and receive consent from MBIA prior to amending or supplementing this ordinance to the extent that the amendment or supplement requires consent of the holders of the Bonds pursuant to Section 22 hereof, (d) Send a copy of any amendment to this ordinance to Standard & Poor's Corporation, provided such amendment requires the consent of MBIA pursuant to this Section 27(c) hereof, (e) MBIA shall receive notice of the resignation or removal of the Paying Agent and the appointment of a successor thereto, (f) MBIA shall receive copies of all notices required to be delivered to bondholders and, on an annual basis, copies of the City's audited financial statements and annual budget. (g) If the City shall fail to comply with any provision under this ordinance which noncompliance shall provide a holder of the Bonds to pursue any available legal remedy against the City, MBIA, acting alone, shall have the right to direct all remedies. MBIA shall be recognized as the registered owner of each Bond which it insures for the purposes of exercising all rights and privileges available to bondholders. In addition, MBIA shall have the same rights as the owners of the Bonds which it insures to pursue all legal remedies. 837635.2 -50- ® Sec. 28. Rates and Charges The estimate of the rates and charges of the sewage works are set forth in Ordinance Noa V 3 to be adopted on 19 , 2001. Said ordinance is hereby incorporated herein by reference. Sec. 29. Conflicting Ordinances All ordinances and parts of ordinances in conflict herewith except the ordinance authorizing the 2000 Bonds, are hereby repealed, provided, however, that the adoption of this ordinance shall (i) amend Section 17 of the 2000 Ordinance as described in Section 20 of this ordinance and (2) not adversely affect the owners of the 2000 Bonds. Sec. 30. Headings The headings or titles of the several sections shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this ordinance. See. 31. Effective Date This ordinance shall be in full force and effect from and after its passage and execution by the Mayor. E E -51- 837635.2 ® Passed and adopted by the Common Council of the City of Greencastle this � day of 2001. Att Clerk- Treasurer COMMON COUNCIL Pres ding Officer Presented by me to the Mayor of the City of Greencastle this/4fMay of 2001 a &r Clerk- Treasurer ® Signed and approved by me, the Mayor of the City of Greencastle, this ay of & 2001 44'K—.111. e Mayor -52- 837635.2 837635.2 EXHIBIT A Description of Project