Loading...
HomeMy WebLinkAbout1990-OR-59L:BONDS:J:Jeffersonville SW B l12490:3:APH OR/90-OR- An Ordinance ORDINANCE NO. 90-OR-59 concerning the construction by the City of Jeffersonsville, Indiana, of improvements and extensions of its Sewage Works, the issuance of additional revenue bonds to provide the cost thereof, the collection, segregation and distribution of the revenues of the Sewage Works, the safeguarding of the interests of the owners of the revenue bonds, other matters connected therewith and repealing ordinances inconsistent herewith. W~EREAS, the City of Jeffersonville, Indiana (the "City") has heretofore established, constructed and financed sewage works, and now owns and operates the sewage works pursuant to IC 36-9-23; and WHEREAS, the Common Council of the City (the "Common Council") finds that certain improvements and extensions to said works are necessary; that plans, specifications and estimates have been prepared and filed by the engineers employed by the Common Council for the acquisition and construction of said improvements and extensions (as more fully set forth in Exhibit A hereto and made apart hereof, the "Project"), which plans and specifications have been submitted to all governmental authorities having jurisdiction and have been approved by the aforesaid governmental authorities; and WHEREAS, the City has advertised for and received bids for the construction of the additions and extensions to the Project; that the bids are subject to the City's determination to add to and extend the Project and subject to the City obtaining funds to pay for the Project; that on the basis of the bids the cost of the L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- Project, as defined in IC 36-9-1-8, including estimated incidental expenses, is in the amount of approximately Twenty Million Five Hundred Eleven Thousand Six Hundred Sixty-Three Dollars ($20,511,663); and WHEREAS, the Common Council finds that (i) a federal grant in the estimated amount of Eight Million Four Hundred Forty-Two Thousand Five Hundred Dollars ($8,442,500); (ii) a state grant in the estimated amount of Three Million Seventy Thousand Dollars ($3,070,000); and (iii) City funds in the estimated amount of Nine Hundred Ninety-Nine Thousand One Hundred Sixty-Three Dollars ($999,163); will be made available to apply to the costs of the Project, leaving a balance of approximately Seven Million Five Hundred Thousand Dollars ($7,500,000) (together with an estimated Five Hundred Thousand Dollars ($500,000) in interest earnings during the period of construction of the Project on the available proceeds of any revenue bonds issued by the City in connection with the Project) which is to be financed by the issuance of revenue bonds of the City (the "Improvement Bonds"); and WHEREAS, pursuant to Ordinance Nos. 69-OR-12 and 69-OR-16, adopted by the Common Council on July 14, 1969 and August 25, 1969, respectively, the City has heretofore issued and now has outstanding revenue bonds payable from the revenues of the sewage works, designated "Sewage Works Revenue Bonds of 1969" dated June 1, 1969 (the "1969 Bonds"), now outstanding in the amount of $1,035,000, bearing interest at the rate of seven percent (7%) per -2- L:BONDS:J:JeffersonVille SW B l12190:2:APH OR/90-OR- annum, maturing annually over a period ending December 1, 2008, which 1969 Bonds constitute a first charge upon the Net Revenues of the sewage works; that the ordinances authorizing the issuance of the 1969 Bonds require that any bonds subsequently issued be junior and subordinate thereto with respect to the application of the Net Revenues of the sewage works; and WHEREAS, the Common Council of the City pursuant to Ordinance No. 90-OR-53, adopted on October 25, 1990, has authorized the issuance of its #$1,075,000 Sewage Works Refunding Revenue Bonds of 1990, Series A# (the "Series A Bonds") to advance refund and defease the 1969 Bonds, which Series A Bonds are scheduled to close on November 29, 1990. The Series A Bonds will be payable from the revenues of the sewage works and will bear interest in serial maturities of from 6.2% to 7.35% per annum, maturing annually through January 1, 2011, which Series A Bonds, upon the defeasance of the 1969 Bonds, will constitute a first lien upon the Net Revenues of the sewage works; and WHEREAS, the ordinance authorizing the issuance of the Series A Bonds permits the issuance of additional bonds ranking on a parity with the Series A Bonds provided certain conditions can be met, and the City finds that the finances of the sewage works are such as will enable the sewage works to satisfy the conditions for the issuance of additional parity bonds and that, accordingly, the Improvement Bonds to be issued hereunder shall be on a parity -3- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- with the Series A Bonds upon their issuance, sale and delivery; and WHEREAS, the City desires to authorize the issuance of the Improvement Bonds hereunder to finance the costs of the Project; and WHEREAS, the City desires to take all actions necessary or desirable to preserve the exclusion of interest on the Improvement Bonds from gross income of the owner thereof under federal law; and WHEREAS, the Common Council now finds that all conditions precedent to the adoption of any ordinance authorizing the issuance of the Series B Bonds have been complied with in accordance with the provisions of IC 5-1-6 and IC 36-9-23 (collectively, "Act"); now therefore, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF JEFFERSONVILLE, INDIANA: Section 1. Authorization of Improvement Bonds. That the City proceed with the Project, in accordance with the plans and specifications heretofore prepared and filed by Proctor/Davis/Ray Engineers, Inc., of Lexington, Kentucky, which plans and specifications are by reference made a part of this ordinance as fully as if the same were attached hereto and incorporated herein; and that the cost of the Project shall not exceed the sum of Twenty Million six Hundred Thousand Dollars ($20,600,000) without further authorization from this Common Council. The terms "sewage -4- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- treatment works,~ "works," #sewage works" and other like terms where used in this ordinance shall be construed to mean and include all structures and property of the City's sewer utility, including the Project and the items defined at IC 36-9-1-8. The Project shall be acquired and constructed and the Improvement Bonds herein authorized shall be issued pursuant to and in accordance with the provisions of the Act. Section 2. Designation of Improvement Bonds. The City shall issue its sewage works revenue bonds in an aggregate amount not to exceed Seven Million Five Hundred Thousand Dollars ($7,500,000) in Series as set forth below, for the purpose of procuring funds to apply to the cost of the Project and issuance costs. The Improvement Bonds shall be issued in two Series to be respectively designated "Sewage Works Revenue Bonds, Series B" ("Series B Bonds") and "Sewage Works Revenue Bonds, Series C# (Series C Bonds, which together with the Series B Bonds are hereinafter collectively referred to as the "Improvement Bonds"). The Series B Bonds and the Series C Bonds shall be on a parity with each other. Any provisions of this ordinance to the contrary notwithstanding, the Improvement Bonds shall rank on a parity with the Series A Bonds upon their issuance, sale and delivery. The Improvement Bonds shall be issued in the denomination of Five Thousand Dollars ($5,000) or integral multiples thereof, numbered consecutively from R-i, dated as of the first day of the -5- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- month in which sold, and shall bear interest at a rate or rates not exceeding eight and one-half percent (8.5%) per annum (the exact rate or rates to be determined by bidding), payable on the first days of January and July in each year, beginning July 1, 1991. The Improvement Bonds shall be payable in lawful money of the United States of America, at the principal corporate trust office of the Paying Agent (as hereinafter defined) and the Improvement Bonds shall mature serially in numerical order on January 1 in the years and amounts as follows: SERIES B BONDS Year Amount Year Amount 1992 $150,000 2002 1993 160,000 2003 1994 175,000 2004 1995 185,000 2005 1996 200,000 2006 1997 215,000 2007 1998 230,000 2008 1999 250,000 2009 2000 270,000 2010 2001 290,000 L011 SERIES C BONDS Year Amount Year 1992 $25,000 2002 1993 25,000 2003 1994 25,000 2004 1995 30,000 2005 1996 30,000 2006 1997 35,000 2007 1998 35,000 2008 1999 40,000 2009 2000 40,000 2010 2b01 45,000 2011 $310 000 335 000 355 000 385 000 415 000 445 000 475 000 510 000 550 000 595000 $6,500,000 Amount $45,000 50,000 55,000 60,000 60,000 70,000 75,000 80,000 85,000 90~000 $1,000,000 L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90 - OR- A qualified institution shall be selected by the Mayor and shall serve as Registrar and Paying Agent for the Improvement Bonds (#Registrar" or "Paying Agent") and is hereby charged with the responsibility of authenticating the Improvement Bonds. The Mayor 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 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 Sinking Fund hereof to pay the principal of and interest on the Improvement Bonds as fiscal agency charges. The principal of the Improvement Bonds shall be payable at the principal corporate trust office of the Paying Agent. Ail payments of interest on the Improvement Bonds shall be paid by check or draft, mailed or delivered to registered owners thereof at the address 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. All payments on the Improvement Bonds shall be made in any coin or currency of the United States of America, which on the date of such payment, shall be legal tender for the payment of public and private debts. Each Improvement Bond shall be transferable or exchangeable only upon the books of the city kept for that purpose at the principal office of the Registrar by the registered owner thereof -7- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- in person, or by his attorney duly authorized in writing, upon surrender of such Improvement Bonds 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 Improvement Bond or Improvement 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. The Registrar shall not be obliged to make any exchange or transfer of Improvement Bonds during the fifteen (15) days immediately preceding an interest payment date on the Improvement Bonds. The city, Registrar and Paying Agent for the Improvement Bonds may treat and consider the person in whose name the Improvement 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. Improvement Bonds authenticated on or subsequent to the first interest payment date thereon shall be dated as of the interest payment date to which interest has been paid as of the date on which such Improvement Bonds are authenticated. Interest on such Improvement Bonds shall be payable from the interest payment date to which interest has been paid next preceding the authentication date of the Improvement Bonds unless the Improvement Bonds are -8- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90 -OR- authenticated after the fifteenth day of the month preceding an interest payment date and on or before such interest payment date in which case they shall bear interest from such interest payment date, or unless the Improvement Bonds are authenticated on or before June 15, 1991, in which case the Series B Bonds and the Series C Bonds shall bear interest from their respective original dates until the principal shall be fully paid. Section 3. Optional Redemption. The Series B Bonds and the Series C Bonds, respectively, maturing on January 1, 2000, and thereafter, are redeemable at the option of the City on January 1, 1999, or on any interest payment date thereafter, on thirty (30) days' notice, in whole or in part, in inverse chronological order of maturity and by lot within a maturity, at face value, together with the following premiums: 2% if redeemed on January 1, 1999 or thereafter on or before December 31, 1999; 1% if redeemed on January 1, 2000 or thereafter on or before December 31, 2000; 0% if redeemed on January 1, 2001, or thereafter prior to maturity; plus accrued interest to the date of redemption. If less than all of the Series B Bonds or the Series C Bonds, respectively, are called for redemption at one time, the Series B Bonds or the Series C Bonds, as applicable, shall be redeemed in inverse order of maturity and by lot within a maturity. Each Five Thousand Dollars ($5,000) principal amount shall be considered a separate bond for purposes of optional redemption. -9- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- 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 an Improvement Bond. Such notice shall be mailed to the address of the registered owners as shown on the registration records of the City. The notice shall specify the date and place of redemption and sufficient identification of the Improvement Bonds called for redemption. The place of redemption shall be determined by the city. Interest on the Improvement Bonds so called for redemption shall cease on the redemption date fixed in such notice if sufficient funds are available at the principal corporate trust office of the Paying Agent to pay the redemption price on the date so named. Coincidentally with the payment of the redemption price, the Improvement Bonds so called for redemption shall be surrendered for cancellation. Section 4. Execution and Negotiability. Each of the Improvement Bonds shall be executed in the name of the City by the manual or facsimile signature of the Mayor of the City, 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 Improvement Bonds manually, by facsimile or any other means; and these officials, by the execution of an Incumbency, Signature and No Litigation Certificate, shall adopt as and for their own proper signatures the facsimile signatures appearing on the Improvement Bonds. In case any officer whose -10- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- signature or facsimile signature appears on the Improvement Bonds shall cease to be such officer before the delivery of either the Series B Bonds or the Series C Bonds, the signature of such officer shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. The Improvement 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 Improvement Bonds shall also be authenticated by the manual signature of the Registrar and no Improvement Bond shall be valid or become obligatory for any purpose until the certificate of authentication thereon has been so executed. The Series A Bonds, the Series B Bonds, the Series C Bonds and any bonds hereafter issued on a parity therewith, as to both principal and interest, shall be payable from and secured by an irrevocable pledge of and shall constitute a charge upon all the Net Revenues (herein defined as gross revenues after deduction only for the payment of the reasonable expenses of operation, repair and maintenance) of the sewage works of the City, including the existing works, the improvements and extensions herein authorized to be acquired and constructed, and all additions and improvements thereto and replacements thereof subsequently constructed or acquired. The City shall not be obligated to pay the Improvement Bonds or the interest thereon except from the Net -11- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90 -OR- Revenues of the sewage works, and the Improvement Bonds shall not constitute an indebtedness of the City, within the meaning of the provisions and limitations of the constitution of the State of Indiana. Section 5. (a) Series B Bond Form. The form and tenor of the Series B Bonds, shall be substantially as follows, all blanks to be filled in properly or changes to be made prior to delivery thereof: UNITED STATES OF AMERICA STATE OF INDIANA, COUNTY OF CLARK No. R- Interest Maturity Original Authentication Rate Date Date Date CUSIP CITY OF JEFFERSONVILLE SEWAGE WORKS REVENUE BOND OF 1990, SERIES B REGISTERED OWNER: PRINCIPAL SUM: The City of Jeffersonville, in Clark County, State of Indiana, for value received, hereby promises to pay to the Registered Owner named above or registered assigns, solely out of the special revenue fund hereinafter referred to, the Principal Sum set forth above on the Maturity Date set forth above (unless this bond be subject to and be called for redemption prior to maturity as hereinafter provided), and to pay interest thereon until the Principal Sum is paid at the Interest Rate per annum specified above, fro~ 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 -12- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- on or before June 15, 1991, in which case it shall bear interest from the Original Date, which interest is payable semiannually on the first days of January and July of each year, beginning on July 1, 1991. The principal on this bond is payable at the principal corporate trust office of INB National Bank (the #Registrar" or "Paying Agent"), in the City of Indianapolis, Indiana. All payments of interest on this bond shall be paid by check or draft mailed or delivered to the registered owner hereof 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. 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. THIS BOND SHALL NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY OF JEFFERSONVILLE WITHIN THE MEANING OF THE PROVISIONS AND LIMITATIONS OF THE CONSTITUTION OF THE STATE OF INDIANA, AND THE CITY SHALL NOT BE OBLIGATED TO PAY THIS BOND OR THE INTEREST THEREON EXCEPT FROM THE SPECIAL FUND PROVIDED FROM SAID NET REVENUES. 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 preparation and complete 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. IN WITNESS WHEREOF, the City of Jeffersonville, in Clark County, Indiana, has caused this bond to be executed in its corporate name by the manual or facsimile signature of the Mayor of the City, its corporate seal to be hereunto affixed, imprinted or impressed by any means and attested manually or by facsimile by its Clerk-Treasurer. CITY OF JEFFERSONVILLE -13- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- By: Mayor [SEAL] Attest: Clerk-Treasurer REGISTRAR'S CERTIFICATE OF AUTHENTICATION This bond is one of the bonds described in the within- mentioned Ordinance. INB NATIONAL BANK, 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 Jeffersonville, of like date, tenor and effect, except as to numbering, interest rates and dates of maturity, in the total amount of Dollars ($ .), numbered from R-i; issued for the purpose of providing funds to be applied to the cost of extension and improvement for the sewage works and costs of issuance in connection with the bonds as authorized by an ordinance adopted by the Common Council of the city of Jeffersonville on the day of , 1990, entitled "An Ordinance concerning the construction by the City of Jeffersonville, Indiana, of improvements and extensions of its Sewage Works, the issuance of additional revenue bonds to provide the cost thereof, the collection, segregation and distribution of the revenues of the Sewage Works, the safeguarding of the interests of the owners of the revenue bonds, other matters connected therewith and repealing ordinances inconsistent herewith,# (the #Ordinance#) and in strict compliance with the provisions of IC 5-1-6 and IC 36-9-23 (collectively, the "Act#). Pursuant to the provisions of the Act and the Ordinance, the principal and interest of this bond and all other bonds of the issue and any bonds hereafter issued on a parity therewith, are payable solely from the Sewage Works Sinking Fund (heretofore created by Ordinance No. 90-OR-53, adopted October 25, 1990) to be -14- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90 -OR- provided from the Net Revenues (herein defined as gross revenues after deduction only for the payment of the reasonable expenses of operation, repair and maintenance) of the sewage works of the City of Jeffersonville, including the existing works, the improvements and extensions constructed or acquired by the use of the proceeds of this bond and the issue of which it is a part, and all additions and improvements thereto and replacements thereof subsequently constructed or acquired. This bond and the issue of which it is a part are equal in priority and on a parity with respect to the application of the Net Revenues with the Series A Bonds (as defined in the Ordinance) and the Series B Bonds to be issued in accordance with the terms thereof. The city of Jeffersonville irrevocably pledges the entire Net Revenues of the sewage works to the prompt payment of the principal of and interest on the bonds authorized by the Ordinance, of which this is one, and any bonds ranking on a parity therewith, including the Series A Bonds and the Series B Bonds to be issued, to the extent necessary for that purpose, and covenants that it will cause to be fixed, maintained and collected such rates and charges for service rendered by the sewage works as are sufficient in each year for the payment of the proper and reasonable expenses of operation, repair and maintenance of the sewage works, to provide for proper depreciation, and for the payment of the sums required to be paid into the Sinking Fund under the provisions of the Act and the Ordinance. In the event 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 IC 36-9-23, including the right to have a receiver appointed to administer the sewage works and to charge and collect rates sufficient to provide for the payment of this bond and the interest hereon. The City of Jeffersonville further covenants that it will set aside and pay into its Sinking Fund monthly, as available, or more often if necessary, a sufficient amount of the Net Revenues of the works for payment of (a) the interest on all bonds which by their terms are payable from the revenues of the sewage works, as such interest shall fall due, (b) the necessary fiscal agency charges for paying bonds and interest, (c) the principal of all bonds which by their terms are payable from the revenues of the sewage works, as such principal shall fall due, and (d) an additional amount as a margin of safety to maintain the debt service reserve required by the Ordinance. Such required payments shall constitute a first charge upon all the Net Revenues of the sewage works on a parity with the Series A Bonds and the Series B Bonds to be issued. -15- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- The bonds of this issue maturing on and after January 1, 2000, and thereafter are redeemable at the option of the City on January 1, 1999, or on any interest payment date thereafter, on thirty (30) days' notice, in whole or in part, in inverse chronological order of maturity and by lot within a maturity, at face value, together with the following premiums: 2% if redeemed on January l, 1999 or thereafter on or before December 31, 1999; 1% if redeemed on January 1, 2000 or thereafter on or before December 31, 2000; 0% if redeemed on January 1, 2001, or thereafter prior to maturity plus accrued interest to the date fixed for redemption. If less than all of the bonds are called for redemption at one time, the bonds shall be redeemed in inverse order of maturity and by lot within a maturity. Each Five Thousand Dollars ($5,000) principal amount shall be considered a separate bond for purposes of optional redemption. Notice of such redemption shall be mailed to the address of the registered owner as shown on the registration records of the City not less than thirty (30) days prior to the date fixed for redemption unless the notice is waived by the registered owner of this bond. The notice shall specify the date and place of redemption and sufficient identification of the bonds called for redemption. The place of redemption may be determined by the City. Interest on the bonds so called for redemption shall cease on the redemption date fixed in such notice if sufficient funds are available at the place of redemption to pay the redemption price on the date so named. If this bond shall not be presented for payment or redemption on the date fixed therefor, the City may deposit in trust with its depository bank, an amount sufficient to pay such bond or the redemption price, as the case may be, and thereafter the registered owner shall look only to the funds so deposited in trust with said bank for payment and the City shall have no further obligation or liability in respect thereto. This bond is transferable or exchangeable only upon the books of the city kept for that purpose at the principal corporate trust office of the Registrar, by the registered owner hereof in person, or by his attorney duly authorized in writing, upon surrender of this bond together with a written instrument of transfer or exchange satisfactory to the Registrar duly executed by the registered owner or his attorney duly authorized in writing, and thereupon a new fully registered bond or bonds in the same -16- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- 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. THE REGISTRAR SHALL NOT BE OBLIGED TO MAKE ANY EXCHANGE OR TRANSFER OR THIS BOND DURING THE FIFTEEN (15) DAYS IMMEDIATELY PRECEDING AN INTEREST PAYMENT DATE. The City, the Registrar and any 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. 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 not exceeding the aggregate principal amount of the bonds maturing in such year. -17- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto the within bond and all rights thereunder and hereby irrevocably constitutes and appoints , attorney to transfer the within bond on the books kept for the registration thereof with full power of substitution in the premises. Dated: NOTICE: Signature(s) must be guaranteed by a broker- dealer or a commercial bank or trust company. 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. Section (b) Series C Bond Form. The form and tenor of the Series C Bonds, shall be substantially as follows, all blanks to be filled in properly or changes to be made prior to delivery thereof: UNITED STATES OF AMERICA STATE OF INDIANA, COUNTY OF CLARK No. R- Interest Maturity Original Authentication Rate Date Date Date CITY OF JEFFERSONVILLE SEWAGE WORKS REVENUE BOND OF 1990, SERIES C CUSIP -18- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- REGISTERED OWNER: PRINCIPAL SUM: The City of Jeffersonville, in Clark County, State of Indiana, for value received, hereby promises to pay to the Registered Owner named above or registered assigns, solely out of the special revenue fund hereinafter referred to, the Principal Sum set forth above on the Maturity Date set forth above (unless this bond be subject to and be called for redemption prior to maturity as hereinafter provided), and to pay interest thereon until the Principal Sum is paid at the Interest Rate per annum specified 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 June 15, 1991, in which case it shall bear interest from the Original Date, which interest is payable semiannually on the first days of January and July of each year, beginning on July 1, 1991. The principal on this bond is payable at the principal corporate trust office of INB National Bank (the "Registrar" or "Paying Agent"), in the City of Indianapolis, Indiana. All payments of interest on this bond shall be paid by check or draft mailed or delivered to the registered owner hereof 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. 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. THIS BOND SHALL NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY OF JEFFERSONVILLE WITHIN THE MEANING OF THE PROVISIONS AND LIMITATIONS OF THE CONSTITUTION OF THE STATE OF INDIANA, AND THE CITY SHALL NOT BE OBLIGATED TO PAY THIS BOND OR THE INTEREST THEREON EXCEPT FROM THE SPECIAL FUND PROVIDED FROM SAID NET REVENUES. 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 preparation and complete execution, issuance and delivery of this bond have -19- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90 -OR- 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. IN WITNESS WHEREOF, the City of Jeffersonville, in Clark County, Indiana, has caused this bond to be executed in its corporate name by the manual or facsimile signature of the Mayor of the City, its corporate seal to be hereunto affixed, imprinted or impressed by any means and attested manually or by facsimile by its Clerk-Treasurer. CITY OF JEFFERSONVILLE By: Mayor [SEAL] Attest: Clerk-Treasurer REGISTRAR'S CERTIFICATE OF AUTHENTICATION This bond is one of the bonds described in the within- mentioned Ordinance. INB NATIONAL BANK, as Registrar Authorized Representative (To be printed on Reverse Side) This bond is one of an authorized issue of bonds of the City of Jeffersonville, of like date, tenor and effect, except as to numbering, interest rates and dates of maturity, in the total amount of Dollars ($ ), numbered from R-I; issued for the purpose of providing funds to be applied to the cost of extension and improvement for the sewage works and costs of issuance in connection with the bonds as authorized by an -20- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- ordinance adopted by the Common Council of the City of Jeffersonville on the __ day of , 1990, entitled "An Ordinance concerning the construction by the City of Jeffersonville, Indiana, of improvements and extensions of its Sewage Works, the issuance of additional revenue bonds to provide the cost thereof, the collection, segregation and distribution of the revenues of the Sewage Works, the safeguarding of the interests of the owners of the revenue bonds, other matters connected therewith and repealing ordinances inconsistent herewith," (the "Ordinance") and in strict compliance with the provisions of IC 5-1-6 and IC 36-9-23 (collectively, the "Act"). Pursuant to the provisions of the Act and the Ordinance, the principal and interest of this bond and all other bonds of the issue and any bonds hereafter issued on a parity therewith, are payable solely from the Sewage Works Sinking Fund (heretofore created by Ordinance No. 90-0R-53, adopted October 25, 1990) to be provided from the Net Revenues (herein defined as gross revenues after deduction only for the payment of the reasonable expenses of operation, repair and maintenance) of the sewage works of the City of Jeffersonville, including the existing works, the improvements and extensions constructed or acquired by the use of the proceeds of this bond and the issue of which it is a part, and all additions and improvements thereto and replacements thereof subsequently constructed or acquired. This bond and the issue of which it is a part are equal in priority and on a parity with respect to the application of the Net Revenues with the Series A Bonds (as defined in the Ordinance) and the Series B Bonds in accordance with the terms thereof. The City of Jeffersonville irrevocably pledges the entire Net Revenues of the sewage works to the prompt payment of the principal of and interest on the bonds authorized by the Ordinance, of which this is one, and any bonds ranking on a parity therewith, including the Series A Bonds and the Series B 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 service rendered by the sewage works as are sufficient in each year for the payment of the proper and reasonable expenses of operation, repair and maintenance of the sewage works, to provide for proper depreciation, and for the payment of the sums required to be paid into the Sinking Fund under the provisions of the Act and the Ordinance. In the event 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 IC 36- 9-23, including the right to have a receiver appointed to administer the sewage works and to charge and collect rates sufficient to provide for the payment of this bond and the interest hereon. -21- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- The City of Jeffersonville further covenants that it will set aside and pay into its Sinking Fund monthly, as available, or more often if necessary, a sufficient amount of the Net Revenues of the works for payment of (a) the interest on all bonds which by their terms are payable from the revenues of the sewage works, as such interest shall fall due, (b) the necessary fiscal agency charges for paying bonds and interest, (c) the principal of all bonds which by their terms are payable from the revenues of the sewage works, as such principal shall fall due, and (d) an additional amount as a margin of safety to maintain the debt service reserve required by the Ordinance. Such required payments shall constitute a first charge upon all the Net Revenues of the sewage works on a parity with the Series A Bonds and the Series B Bonds. The bonds of this issue maturing on and after January 1, 2000, and thereafter are redeemable at the option of the city on January 1, 1999, or on any interest payment date thereafter, on thirty (30) days' notice, in whole or in part, in inverse chronological order of maturity and by lot within a maturity, at face value, together with the following premiums: 2% if redeemed on January 1, 1999 or thereafter on or before December 31, 1999; 1% if redeemed on January 1, 2000 or thereafter on or before December 31, 2000; 0% if redeemed on January 1, 2001, or thereafter prior to maturity plus accrued interest to the date fixed for redemption. If less than all of the bonds are called for redemption at one time, the bonds shall be redeemed in inverse order of maturity and by lot within a maturity. Each Five Thousand Dollars ($5,000) principal amount shall be considered a separate bond for purposes of optional redemption. Notice of such redemption shall be mailed to the address of the registered owner as shown on the registration records of the City not less than thirty (30) days prior to the date fixed for redemption unless the notice is waived by the registered owner of this bond. The notice shall specify the date and place of redemption and sufficient identification of the bonds called for redemption. The place of redemption may be determined by the city. Interest on the bonds so called for redemption shall cease on the redemption date fixed in such notice if sufficient funds are available at the place of redemption to pay the redemption price on the date so named. If this bond shall not be presented for payment or redemption on the date fixed therefor, the City may deposit in trust with its -22- L:BONDS:J:Jeffersonville SW B 112190:2:APH OR/90-OR- 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 the same 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. THE REGISTRAR SHALL NOT BE OBLIGED TO MAKE ANY EXCHANGE OR TRANSFER OR THIS BOND DURING THE FIFTEEN (15) DAYS IMMEDIATELY PRECEDING AN INTEREST pAYMENT DATE. The city, the Registrar and any 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. 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 not exceeding the aggregate principal amount of the bonds maturing in such year. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto the within bond and all rights thereunder and hereby irrevocably constitutes and appoints , attorney to transfer the within -23- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90 - OR- bond on the books kept for the registration thereof with power of substitution in the premises. Dated: full NOTICE: Signature(s) must be guaranteed by a broker- dealer or a commercial bank or trust company. 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. Section 6. Authorization to Execute and Deliver Improvement Bonds. The Mayor is hereby authorized and directed to have the Improvement Bonds prepared, and the Mayor and Clerk-Treasurer are hereby authorized and directed to execute the Improvement Bonds in the form and manner herein provided. The Mayor is hereby authorized and directed to deliver the Series B Bonds or the Series C Bonds, as applicable, to the respective purchasers thereof after sales made in accordance with the provisions of this ordinance, provided that at the time of the delivery the Clerk- Treasurer shall collect the full amount which such respective purchasers have agreed to pay therefor, which shall not be less than 98.5% of the face value of the (i) Series B Bonds, plus accrued interest from the date thereof to the date of their delivery, and (ii) Series C Bonds, plus accrued interest from the date thereof to the date of their delivery. The Series B Bonds and the Series C Bonds, respectively, when fully paid for and delivered to their respective purchasers, shall be the binding -24- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- special and limited revenue obligations of the City, payable out of the Net Revenues of the City's sewage works to be set aside into the Sewage Works Sinking Fund as herein provided, on a parity with the Series A Bonds upon the issuance, sale and delivery thereof, and the proceeds derived from the sale of each of the Series B Bonds and the Series C Bonds shall be and are hereby set aside for application to the costs of the Project. The proper officers of the City are hereby directed to execute all proper and necessary certificates, and to do whatever acts and things which may be necessary to carry out the provisions of this ordinance. Section 7. Notice of Intent to Sell. Prior to the sale of each of the Series B Bonds and the Series C Bonds, the Mayor shall cause to be published a notice of intent to sell in the The Evening News and the Clark County Journal, both newspapers of general circulation in the City of Jeffersonville, 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, all in accordance with IC 5-1-11 and IC 5-3-1. A notice may also be published one time in The Indianapolis Commercial and a notice may also be published in The Bond Buyer in New York, New, York. The notice of intent to sell the Series B Bonds and the Series C Bonds shall state the places of sale, the character and principal amount of the Series B Bonds and the Series C Bonds, as applicable, maturing on each maturity date, the -25- L:BONDS:J:Jeffersonville SW B 112190:2:AP~ OR/90-OR- maximum rates of interest for each of the Series B Bonds and the Series C Bonds, the terms and conditions upon which bids will be received and the sales made, the time within which the name, address and telephone number of each bidder must be furnished to the City, and such other information as the Mayor and the attorneys employed by the City shall deem advisable, and any summary notice may contain any information deemed so advisable. The notice of intent to sell shall provide, among other things, that each bid for (i) the Series B Bonds shall be accompanied by a certified or cashier's check in the amount of Sixty-Five Thousand Dollars ($65,000), and (ii) the Series C Bonds shall be accompanied by a certified or cashier's check in the amount of Ten Thousand Dollars ($10,000) to guarantee performance on the part of the bidder, and that in the event the successful bidder shall fail or refuse to (i) accept delivery of the Series B Bonds or the Series C Bonds, as applicable, and (ii) pay for the same as soon as the Series B Bonds and the Series C Bonds, as applicable, are ready for delivery, or at the time fixed in the notice of intent to sell, then the applicable 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; that bidders for the Series B Bonds and the Series C Bonds will be required to name the rate or rates of interest which the Series B Bonds and the Series C Bonds are to bear, not exceeding the maximum rate hereinbefore fixed, and that such interest rate or rates shall be -26- L:BONDS:J:Jeffersonville l12190:2:APH OR/90-OR- SW B in multiples of one-eighth (1/Sth) or one-twentieth (1/20th) of one percent (1%). The rate bid on a maturity for each of the Series B Bonds and the Series C Bonds shall be equal to or greater than the rate bid on the immediately preceding maturity. The minimum price to be bid for the Series B Bonds and the Series C Bonds shall not be less than 98.5% of the par amount of the aggregate principal amount of the Series B Bonds and the Series C Bonds. No conditional bids will be considered. The opinions of Stites & Harbison, bond counsel, approving the legality of the Series B Bonds and the Series C Bonds, as applicable, will be furnished to the purchaser at the expense of the City upon the respective closings of the Series B Bonds and the Series C Bonds. The Series B Bonds and the Series C Bonds shall be awarded by the Mayor to the best bidder who has submitted its bid in accordance with the terms of this ordinance and the notices of intent to sell. 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 Series B Bonds and the Series C Bondsto their maturities and deducting therefrom the premium bid, if any and adding thereto the discount bid, if any. The right to reject any and all bids is hereby reserved. If an acceptable bid is not received on the date of sale, the sale may be continued from day to day thereafter without further advertisement for a period of thirty (30) days, during which time no bid which provides a higher or equal net interest cost to the City in -27- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90 -OR- comparison to the best bid received at the time of the advertised sale will be considered. Section 8. Deposit of Improvement Bonds Proceeds. (a) The accrued interest and premium received at the time of the delivery of the Improvement Bonds, if any, shall be deposited in the Sewage Works Sinking Fund (the "Sinking Fund") hereinafter referred to. The balance of the proceeds from the sale of the Improvement Bonds 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, separate and apart from other bank accounts of the City, to be designated as "Sewage Works Construction and Acquisition Accounts" ("Accounts"). All moneys deposited to the credit of said Accounts 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 5-13-1, as amended and supplemented. Subject to the provisions hereof regarding rebate to the federal government, any income from such investment shall be deposited in the Accounts. Subject to the provisions hereof regarding rebate to the federal government, the funds in said Accounts shall be expended only for the purpose of paying the costs of the Project, the incidental expenses incurred in connection with the Project or the issuance of the Improvement Bonds, including the -28- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- necessary engineering and legal expenses, and to provide for necessary equipment all in accordance with the Act. (b) Subject to subsection (c) of this Section, any balance or balances remaining unexpended in such Accounts, after completion of the Project, which are not required to meet unpaid obligations incurred in connection with such Project, may, within fifteen (15) days after completion of the Project, be deposited in the Sewage Works Sinking Fund' Account, and may be used solely for the purposes of said Sewage Works Sinking Fund Account and as set forth in IC 5- 1-13. (c) Any balance or balances remaining unexpended in such Accounts may be used to prepay or redeem either the Series B Bonds or the Series C Bonds, such Improvement Bonds to be redeemed to be selected in accordance with Section 3 hereof, or may be used to rebate funds to the federal government, to the extent required by other provisions of this ordinance and necessary to preserve the exclusion of interest on the Improvement Bonds from gross income, under federal law. Section 9. Deposit of Sewage Works Revenues. All revenues derived from the operation of the sewage works and from the collection of sewage rates and charges shall be deposited in the Sewage Works Revenue Fund ("Revenue Fund") hereby established, which Revenue Fund shall include the hereinafter defined O & M -29- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- Account, the Bond Account and the Improvement Account. The Revenue Fund shall be segregated and kept separate and apart from all other funds and bank accounts of the City. Out of the Revenue Fund the proper and reasonable expenses of operation, repair and maintenance of the works shall be paid, the principal and interest of all bonds and fiscal agency charges of bank paying agents shall be paid, and the costs of replacements, extensions, additions and improvements shall be paid as hereinafter provided. No moneys derived from the revenues of the sewage works shall be transferred to any other fund of the City or 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. Section 10. Operation and Maintenance Account. There is hereby created an account of the Revenue Fund to be known as the "Operation and Maintenance Account," ("O & M Account") to which O & M Account there shall be credited as of the last day of each calendar month a sufficient amount of the revenues of the sewage works so that the balance in the O & M Account shall be sufficient to pay the expenses of operation, repair and maintenance thereof for the then next succeeding two (2) calendar months. The moneys credited to this O & M Account 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. Any balance in the O & M Account in excess of the expected expenses of -30- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- operation, repair and maintenance for the next succeeding month may be transferred to the Sewage Works Sinking Fund Account if necessary to prevent a default in the payment of principal or interest on the Improvement Bonds. Section 11. Sewage Works Sinking Fund. The special fund designated #Sewage Works Sinking Fund," created by Ordinance No. 90-OR-53, adopted on October 25, 1990, for the payment of the principal of and interest on the Series A Bonds when issued, sold and delivered, is hereby designated and constituted the Sinking Fund for the payment of the principal of and interest on the Series B Bonds, the Series C Bonds and any bonds hereafter issued on a parity therewith, or subordinated thereto, and the payment of any fiscal agency charges in connection with the payment of bonds. There shall be set aside and paid into the Sinking Fund monthly, as available, a sufficient amount of Net Revenues of the sewage works to meet the requirements of the Bond and Interest Account and Reserve Account hereby created in the Sinking Fund. Such payments shall continue until the balance in the Bond and Interest Account and the Reserve Account, equal the principal of and interest on all of the then outstanding bonds of the sewage works to the final maturity and provide for payment of all fiscal agency charges. Section 12. (a) Sinking Fund - Bond and Interest Account. Beginning as of the date of issuance of the Series B Bonds, there shall be credited on the last day of each calendar month from the -31- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- Revenue Fund to the Bond and Interest Account an amount of the Net Revenues equal to (i) one-sixth (1/6) of the interest on all then outstanding Series B Bonds payable on the then next succeeding interest payment date and (ii) one-twelfth (1/12) of the principal of all then outstanding Series B Bonds payable on the then next succeeding principal payment date until the amount of interest and principal payable on the then next succeeding respective interest and principal payment dates shall have been so credited. There shall similarly be credited to the account any amount necessary to pay the bank fiscal agency charges for paying interest on outstanding Series B Bonds as the same become payable. Beginning as of the date of issuance of the Series C Bonds, 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 (i) one-sixth (1/6) of the interest on all then outstanding Series C Bonds payable on the then next succeeding interest payment date and (ii) one-twelfth (1/12) of the principal of all then outstanding Series C Bonds payable on the then next succeeding principal payment date until the amount of interest and principal payable on the then next succeeding respective interest and principal payment dates shall have been so credited. There shall similarly be credited to the account any amount necessary to pay the bank fiscal agency charges for paying interest on outstanding Series C Bonds as the same become payable. The City shall, from the sums deposited in the Sinking Fund and credited to -32- L:BONDS:J:Jeffersonville SW B ll2190:2:APH OR/90-OR- the Bond and Interest Account, remit one business day prior to any interest and/or principal payment date immediately available funds to the Paying Agent in amounts sufficient to pay the interest and principal on the due dates thereof together with the amount of bank fiscal agency charges. (b) Sinking Fund - Reserve Account. Upon issuance of the Series B Bonds, the City shall deposit from available Net Revenues into the Reserve Account an amount equal to the least of (i) maximum annual debt service on the series B Bonds (ii) 125% of average annual debt service on the Series B Bonds or (iii) 10% of the proceeds of the Series B Bonds ("the Series B Reserve Requirement"). Upon issuance of the Series C Bonds, the City shall deposit from available Net Revenues into the Reserve Account an amount equal to the the Series C Bonds (ii) Series C Bonds or (iii) least of (i) maximum annual debt service on 125% of average annual debt service on the 10% of the proceeds of the Series C Bonds (the "Series C Reserve Requirement,# which together with the Series B Reserve Requirement is hereinafter collectively referred to as the #Reserve Requirement"). The balance in the Reserve Account shall never exceed the Reserve Requirement. The Reserve Account shall constitute the margin for safety and protection against default in the payment of principal of and interest on the Improvement Bonds, and the moneys in the Reserve Account shall be used to pay current principal and interest on the Improvement Bonds to the extent the moneys in the Bond and Interest Account -33- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- 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. Any moneys in the Reserve Account in excess of the Reserve Requirement may, in the discretion of the Board of Public Works and Safety, be transferred to the Improvement Fund or be used for the purchase of outstanding bonds or installments of principal of fully registered Improvement Bonds at a price not exceeding par and accrued interest. Section 13. Sewage Works Improvement Fund. Any excess revenues may be transferred or credited from the Revenue Fund to a fund designated the "Sewage Works Improvement Fund," (so designated in Ordinance No. 90-0R-53, adopted on October 25, 1990) and said Fund shall be used for improvements, replacements, additions and extensions of the sewage works. As of the dates of the delivery of the Series B Bonds and the Series C Bonds, respectively, any other available and unrestricted moneys of the sewage works not otherwise deposited pursuant to the terms of this ordinance shall be transferred to the Improvement Fund and used for sewage works capital improvements or for any other lawful purpose. Moneys in the Sewage Works Improvement Fund shall be transferred to the Sewage Works Sinking Fund if necessary to prevent a default in the payment of principal of and interest on the then outstanding Improvement Bonds or, if necessary, to -34- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- eliminate any deficiencies in credits to or minimum balance in the Reserve Account of the Sewage Works Sinking Fund. Section 14. Investment 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 O&M Account and the Sewage Works 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. Section 15. Books and Records. The City shall keep proper books of records and accounts, separate from all of its other records and accounts, in which complete and correct entries shall be made showing all revenues collected from the sewage works and all disbursements made on account of the sewage works, also all transactions relating to the sewage works. Copies of all operating income and expense statements of the sewage works, together with all audits of the sewage works made available to the L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- city by the Indiana State Board of Accounts or any successor body authorized by law to audit municipal accounts, shall be kept on file in the office of the Clerk-Treasurer. Any owner or owners of the Improvement Bonds then outstanding shall have the right at all reasonable times to inspect the works and all records, accounts, statements, audits, reports and data of the City relating to the sewage works. Such inspections may be made by representatives duly authorized by written instrument. Section 16. 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 sewage works, to be paid by the owner of each and every lot, parcel of real estate or building that is connected with and uses the sewage works by or through any part of the sewage system of the City, or that ~n any way uses or is served by such sewage works; that such rates or charges shall be sufficient in each year for the payment of the proper and reasonable expenses of operation, repair and maintenance of the sewage works, and for the payment of the sums required to be paid into the Sinking Fund by the Act and this ordinance. Such rates or charges shall, if necessary, be changed and readjusted from time to time so that the revenues therefrom shall always be sufficient to meet the expenses of operation, repair and maintenance, and the requirements of the Sinking Fund. The rates or charges so established shall apply to any and all use of such sewage works by and service rendered to the City and all -36- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- departments thereof as the charges accrue. The rates and charges will be maintained at a level sufficient to produce Net Revenues equal to at least 115% of annual debt service on the Series A Bonds, the Series B Bonds, the Series C Bonds to be issued and any additional parity bonds. The rates or charges so established shall apply to any and all use of such works by and service rendered to the City and all departments thereof, and shall be paid by the City or the various departments thereof as the charges accrue. Section 17. Defeasance of Improvement Bonds. If, when all outstanding Series B Bonds or Series C Bonds, as applicable, issued hereunder shall have become due and payable in accordance with their terms, or shall have been duly called for redemption or irrevocable instruction to call such Series B Bonds or Series C Bonds, as applicable, for redemption shall have been given, and (i) the whole amount of the principal of, interest on and premium, if any, so due and payable upon such Series B Bonds or Series C Bonds, as applicable, shall be paid or, (ii) (a) sufficient moneys, or (b) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, the principal of and the interest on which when due will provide sufficient moneys, shall be held in trust for the purpose of paying the whole amount of the principal of, interest on and premium, if any, to become due at maturity or upon such redemption of such Series B Bonds or Series C Bonds, as -37- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- applicable, and provision shall also be made for paying all fees and expenses for the redemption, then and in that case, the Series B Bonds or Series C Bonds, as applicable, issued hereunder shall no longer be deemed outstanding or entitled to the pledge of the Net Revenues of the City's sewage works. Section 18. Parity Bonds. The City reserves the right to authorize and issue additional bonds, payable out of the Net Revenues of its sewage works, ranking on a parity with the Series B Bonds and the Series C Bonds, for the purpose of financing the cost of future additions, extensions and improvements to the or to refund obligations, subject to the following sewage works, conditions: (a) Ail 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 to date in accordance with the terms thereof. (b) The Net Revenues of the sewage works in the fiscal year immediately preceding the issuance of any such bonds ranking on a parity with the Series B Bonds and the Series C Bonds shall be not less than one hundred twenty-five percent (125%) of the maximum annual interest and principal requirements of all the then outstanding bonds payable from the revenues of the sewage works and the additional parity bonds proposed to be issued; or, prior to the issuance of the -38- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- parity 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 such year equal to not less than one hundred twenty-five percent (125%) of the maximum annual interest and principal requirements of all the then outstanding bonds payable from the revenues of the sewage works and the additional parity bonds proposed to be issued. For purposes of this subsection, the records of the sewage works shall be analyzed and all showings shall be prepared by a certified public accountant employed by the City for that purpose. (c) The principal of the additional parity bonds shall be payable annually on January 1 and the interest on the additional parity bonds shall be payable semiannually on January 1 and July 1 in the years in which such principal and interest are payable. Section 19. 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 Improvement Bonds, it is specifically provided as follows: (a) All contracts let by the City in connection with the construction of said improvements and extensions to the sewage works 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 -39- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- to One Hundred Percent (100%) of the amount of such contracts to insure the completion of the contracts in accordance with their terms, and such contractors shall also be required to carry such employer's liability and public liability insurance as are required in the laws of the State of Indiana in the case of a public contract, and shall be governed in all respects by the laws of Indiana relating to public contracts. (b) The improvements and extensions shall be constructed under the supervision and subject to the approval of such competent engineer as shall be designated by the Common Council. All estimates for work done or material furnished shall first be checked by the engineers and approved by the Common Council. (c) The City shall at all times maintain its sewage works in good condition and operate the same in an efficient manner and at a reasonable cost. (d) So long as any of the Improvement Bonds are outstanding, the City shall maintain insurance on the insurable parts of the sewage works of a kind and in an amount such as would normally be carried by private companies 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. As an alternative to maintaining such insurance, the City may -40- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- maintain a self-insurance program with catastrophic or similar coverage so long as such program meets the requirements of any applicable laws or regulations and is maintained in a manner consistent with programs maintained by similarly situated municipalities. All insurance or self- insurance proceeds shall be used in either replacing or repairing the property destroyed or damaged; or shall be deposited in the Sinking Fund. (e) So long as any of the Improvement Bonds are outstanding, the City shall not mortgage, pledge or otherwise encumber the sewage works, or any part thereof, nor shall it sell, lease or otherwise dispose of any portion thereof except for machinery, equipment or other property as may be replaced, or shall no longer be necessary for use in connection with the sewage works. (f) Except as hereinbefore provided in Section 16 hereof, so long as any of the Improvement Bonds are outstanding, no additional bonds or other obligations pledging any portion of the revenues of the sewage works shall be authorized, executed or issued by the City except such as shall be made subordinated and junior in all respects to the Improvement Bonds, unless all of the Improvement Bonds are redeemed, retired or defeased pursuant to Section 15 hereof coincidentally with the delivery of such additional bonds or other obligations. -41- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- (g) The City shall take all actions or proceedings necessary and proper 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 the sewage works. (h) The provisions of this ordinance shall constitute a contract by and between the City of Jeffersonville and the owners of the Series B Bonds and the Series C Bonds, respectively, all the terms of which shall be enforceable by any bondholder by any and all appropriate proceedings at law or in equity. After the issuance of the Series B Bonds and the Series C Bonds, as applicable, this ordinance shall not be repealed, amended or modified in any respect which will adversely affect the rights of the owners of the Series B Bonds and the Series C Bonds, as applicable, nor shall the Common Council or any other body of the city adopt any law, ordinance or resolution which in any way adversely affects the rights of such owners so long as any of the Series B Bonds and the Series C Bonds, as applicable, or the interest thereon remain unpaid. Except in the case of changes described in Section 22(a)-(f), this ordinance may be amended, however, without the consent of bondowners, if the Common Council determines, in its sole discretion, that such -42- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- amendment would not adversely affect the owners of the Series B Bonds and the Series C Bonds, as applicable. (i) The provisions of this ordinance shall be construed to create a trust in the proceeds of the sale of the Series B Bonds and the Series C Bonds, as applicable, for the uses and purposes herein set forth, and the owners of the Series B Bonds and the Series C Bonds, as applicable, shall each retain a lien on such proceeds until the same are applied in accordance with the provisions of this ordinance and of the Act. The provisions of this ordinance shall also be construed to create a trust in the portion of the Net Revenues herein directed to be set apart and paid into the Sinking Fund for the uses and purposes of said fund as in this ordinance set forth. The owners of the Series B Bonds and the Series C Bonds, respectively, shall have all of 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 the sewage works 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 Series B Bonds or the Series C Bonds, respectively. L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- Moneys held in the Rebate Account are not subject to the L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- consultants or attorneys from time to time to advise the City as to the requirements of federal law to preserve the tax exclusion. Any investment earnings on amounts held in the Rebate Account shall be similarly accounted for and shall be held in the Rebate Account to be rebated, if necessary, to the federal government. The Clerk-Treasurer may transfer any moneys held in the Rebate Account to any other fund or account created by this ordinance or referenced herein for the purposes thereof upon receipt of an opinion of nationally recognized bond counsel that such transfer will not adversely affect the exclusion from gross income of interest on the Series B Bonds and the Series C Bonds, respectively, under federal law. (c) In order to comply with this Section 20 and Section 21 hereof, officers of the City may sign such closing certificates and make such covenants and representations therein as shall be reasonable, necessary or advisable to assure bond purchasers and bond counsel that the exclusion from gross income of interest on the Series B Bonds and the Series C Bonds, respectively, under federal law will exist at the time of the delivery and sale of the Series B Bonds and the Series C Bonds, respectively, and at any time during their respective terms. It is the intent of the Common Council that bond purchasers and bond counsel may rely on such certifications, representations and covenants. -45- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- amendment would not adversely affect the owners of the Series B Bonds and the Series C Bonds, as applicable. (i) The provisions of this ordinance shall be construed to create a trust in the proceeds of the sale of the Series B Bonds and the Series C Bonds, as applicable, for the uses and purposes herein set forth, and the owners of the Series B Bonds and the Series C Bonds, as applicable, shall each retain a lien on such proceeds until the same are applied in accordance with the provisions of this ordinance and of the Act. The provisions of this ordinance shall also be construed to create a trust in the portion of the Net Revenues herein directed to be set apart and paid into the Sinking Fund for the uses and purposes of said fund as in this ordinance set forth. The owners of the Series B Bonds and the Series C Bonds, respectively, shall have all of 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 the sewage works 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 Series B Bonds or the Series C Bonds, respectively. -43- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- Section 21. Tax Covenants. In order to preserve the exclusion from gross income of interest on the Series B Bonds and the Series C Bonds, respectively, under Sections 103 and 148 of the Internal Revenue Code of 1986, as amended and as it exists on the dates of issuance of the Series B Bonds and the Series C Bonds, respectively, (the #Code") and as an inducement to the purchasers of the Series B Bonds and the Series C Bonds, respectively, the City represents, covenants and agrees: (a) No person or entity other than the City or another state or local governmental unit will use proceeds of the Series B Bonds and the Series C Bonds, respectively, or property financed by such 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 ~ill own property financed by Series B Bond or Series C Bond proceeds or will have actual or beneficial use of such property pursuant to a lease, a management or incentive payment contract, an arrangement such as take-or-pay or other type of output contract or any other type of arrangement that differentiates that person's or entity's use of such property from the use by the public at large of such property. (b) No portion of the principal of or interest on the Series B Bonds or the Series C Bonds, respectively, is (under the terms of the Series B Bonds or the Series C Bonds, respectively, this ordinance or any underlying arrangement), -46- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- directly or indirectly, secured by an interest in property ~used or to be used for any private business use or payments in respect of any private business use or payments in respect of such property or to be derived from payments (whether or not to the City) in respect of such property or borrowed money used or to be used for a private business use. (c) No Series B Bond or Series C Bond proceeds, respectively, will be loaned to any person or entity other than another state or local governmental unit. No Series B Bond or Series C Bond 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 Series B Bond or Series C Bond proceeds, respectively. (d) The City will not take any action nor fail to take any action with respect to the Series B Bonds or the Series C Bonds, respectively, that would result in the loss of the exclusion from gross income for federal tax purposes on the Series B Bonds or the Series C Bonds, respectively, pursuant to Sections 103 and 148 of the Code, nor will the city act in any other manner which would adversely affect such exclusion. (e) It shall not be an event of default under this ordinance if the interest on any Series B Bond or the Series C Bonds, respectively, is not excludable from gross income for federal tax purposes or otherwise pursuant to any -47- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- provision of the Code which is not currently in effect and in existence on the dates of issuance of the Series B Bonds and the Series C Bonds, respectively. (f) In accordance with Section 20 hereof, the City hereby covenants that it will rebate any arbitrage profits to the United States to the extent required by the Code and the regulations promulgated thereunder. (g) These covenants are based solely on current law in effect and in existence on the date of delivery of such Series B Bonds. (h) The City represents that: (1) The Series B Bonds and the Series C Bonds, respectively, are not private activity bonds as defined in Section 141 of the Code; (2) The City hereby designates the Series B Bonds and the Series C Bonds, respectively, 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 1990 does not exceed $10,000,000 when including the Series B Bonds; -48- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- (4) The City has not designated and will not designate more than $10,000,000 of qualified tax- exempt obligations during 1990; (5) The reasonably anticipated amount of qualified tax-exempt obligations (including qualified 501(c)(3) obligations and tax-exempt leases but excluding other provate activity bonds) which will be issued by the City and all entities subordinate to the City during 1991 does not exceed $10,000,000 when including the Series C Bonds; and (6) The city has not designated and will not designate more than $10,000,000 of qualified tax- exempt obligations during 1991. Therefore, the Series B Bonds during 1990 and the Series C Bonds during 1991 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. Section 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 Series B Bonds and the Series C Bonds, respectively, and then outstanding shall have the right, from time to time (anything contained in this ordinance to the contrary notwithstanding) to consent to and -49- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- approve the adoption by the Common Council of the city of such ordinance or ordinances supplemental hereto as shall be deemed necessary or desirable by the City for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this ordinance, or in any supplemental ordinance; provided, however, that nothing herein contained shall permit or be construed as permitting: (a) An extension of the maturity of the principal of or interest on any Series B Bond or Series C Bond, respectively, issued pursuant to this ordinance; or (b) A reduction in the principal amount of any Series B Bond or Series C Bond, respectively, the redemption premium or the rate of interest thereon; or (c) The creation of a lien upon or a pledge of the revenues of the sewage works ranking prior to the pledge thereof created by this ordinance; or (d) A preference or priority of any Series B Bond or Series B Bonds, or Series C Bond or Series C Bonds, respectively, issued pursuant to this ordinance over any other Series B Bond or Series B Bonds, or Series C Bond or Series C Bonds, respectively; or (e) A reduction in the aggregate principal amount of the bonds required for consent to such supplemental ordinance; or (f) A reduction in the Reserve Requirement. -50- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- If the owners of not less than sixty-six and two-thirds percent (66-2/3%) in aggregate principal amount of the Series B Bonds and the Series C Bonds, respectively, 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 Series B Bond or Series C Bond, respectively, shall have any right to object to the adoption of such supplemental ordinance or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the City or its officers 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 Series B Bonds and the Series C Bonds, respectively, then outstanding, shall thereafter be determined exercised and enforced in accordance with this ordinance, subject in all respect 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 Series B Bonds and the Series C Bonds, respectively, and the terms and provisions of the Series B -51- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- Bonds and the Series C Bonds, respectively, 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 Series B Bonds and the Series C Bonds, respectively, then outstanding. Section 23. Rate Ordinance. The estimate of the rates and charges are set forth in the ordinance introduced by the Common Council on this date and attached hereto as Exhibit B. This ordinance is incorporated herein by reference. Section 24. Bond Insurance. (a) The Common Council authorizes the insurance of the Series B Bonds and the Series C Bonds, respectively, with a municipal bond insurance company if the Mayor, with the advice of H.J. Umbaugh & Associates, finds such insurance advisable. The cost of obtaining the insurance shall be considered as a part of the cost of the Project on account of which the Series B Bonds and the Series C Bonds, respectively, are issued, and shall be paid out of the proceeds of the Series B Bonds and the Series C Bonds, respectively, or out of other funds of the sewage works. (b) The City covenants that it will not invest the proceeds of the Series B Bonds and the Series C Bonds, respectively, or any moneys treated as proceeds by the Internal Revenue Service, in any manner, or take or fail to take any other action, which would result in the Series B -52- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90 - OR- Bonds or the Series C Bonds, respectively, constituting #arbitrage bonds" within the meaning of Section 103 and Section 148 of the Code, or the Treasury Regulations or any Revenue Rulings promulgated thereunder, or as determined by any court of competent jurisdiction. Section 25. Noncompliance with Tax Covenants. Notwithstanding any other provision of this ordinance, the covenants and authorizations contained in this ordinance ("Tax Sections#) which are designed to preserve the exclusion of interest on the Series B Bonds and the Series C Bonds, respectively, from gross income under federal law ("Tax Exemption") need not be complied with if the City receives an opinion of bond counsel that any Tax Section is unnecessary to preserve the Tax Exemption. The Tax Sections relating to the utilization and segregation of the Bond Account and the utilization of the Rebate Account are subject to this Section 25. Section 26. Conflicting Ordinances. All ordinances and parts of ordinances in conflict herewith are hereby repealed; provided, however, that this ordinance shall not be construed as adversely affecting the rights of the holders of the Series A Bonds. The Common Council hereby finds that the provisions of this ordinance, to the extent they may be construed as amending Ordinance No. 90-OR-53, will not adversely affect the rights of the holders of the Series A Bonds when issued, sold and delivered. -53- L:BONDS:J:JeffersonVille SW B l12190:2:APH OR/90-OR- Section 27. 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. Section 28. Effective Date. This ordinance shall be in full force and effect from and after its passage. Section 29. Effective Date. This ordinance shall be in full force and effect from and after its passage. Passed and adopted by the Common Council of the City of Jeffersonville this ~7 day of . '~F~, , 1990. '~ -~obe~t ~. Waiz~ ~ President, Common Council ATTEST: -54- L:BONDS:J:Jeffersonville SW B l12190:2:APH OR/90-OR- Presented by me as Clerk-Treasurer to the Mayor of the City of Jeffersonville, Indiana, this ~? day of ~&/. , 1990. Approved and signed by me this~ day of .~_/~'~-/~-'---,' 1990. ~Mayo.~~~~- -55-