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HomeMy WebLinkAboutD-1567-02 2002 Water Rev. BondSponsor: Councilor Snyder ORDINANCE NO. D-1567-02 AS AMENDED AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF CARMEL, INDIANA CONCERNING THE CONSTRUCTION OF ADDITIONS AND IMPROVEMENTS TO THE WATERWORKS OF THE CITY OF CARMEL, INDIANA; AUTHORIZING THE ISSUANCE OF REVENUE BONDS FOR SUCH PURPOSE; ADDRESSING OTHER MATTERS CONNECTED THEREWITH, AND REPEALING ORDINANCES INCONSISTENT HEREWITH WHEREAS, the City of Carmel, Indiana (the "City") has heretofore established, constructed and financed a municipal waterworks and now owns and operates said works pursuant to I.C. 8-1.5, as amended, and other applicable laws (together, the "Act"); and WHEREAS, the Common Council of the City (the "Council") now finds that certain improvements and extensions to said works are necessary; and that plans, specifications and estimates have been prepared for and on behalf of the City for the construction of said improvements and extensions (as more fully set forth in Exhibit A attached hereto) (the "Project"); and WHEREAS, the Council finds that there are not available sufficient funds of the works to expend on the Project, and that revenue bonds shall be issued to pay for costs of the Project, including incidental expenses; and WHEREAS, the Council finds that there are now outstanding bonds issued on account of the works and payable out of the revenues therefrom designated "City of Carmel Waterworks Revenue Bonds of 1993, Series B" (the "1993 Bonds") and bonds that are contemplated to be issued before the issuance of the bonds authorized hereunder to be known as the "City of Carmel Waterworks Revenue Bonds of 2002, Series A (the "2002 Series A Bonds") (the 1993 Bonds and the 2002 Series A Bonds collectively referred to as the "Parity Bonds"), which 1993 Bonds were originally authorized by Ordinance No. A-67, adopted by the Council on December 7, 1992 (the "1993 Bond Ordinance"), and which 2002 Series A Bonds were originally authorized by Ordinance No. D-1550-01, adopted by the Council on December 17, 2001 (the "2002 Series A Bond Ordinance") (where appropriate, the 1993 Bond Ordinance and the 2002 Series A Bond Ordinance shall collectively be referred to as the "Parity Ordinance"); and WHEREAS, the Parity Bonds constitute a first charge upon the Net Revenues (as hereinafter defined); and WHEREAS, the Parity Ordinance provides that the City may authorize and issue additional bonds payable out of the Net Revenues ranking on a parity with the Parity Bonds for the purpose of financing the cost of furore additions, extensions and improvements to the works, or to refund obligations, subject to the provisions of Section 20 of the Parity Ordinance; and WHEREAS, the conditions precedent to the issuance of additional parity bonds set forth in the Parity Ordinance, as described above, have been satisfied; and WHEREAS, the Council now finds that all conditions precedent to the adoption of an ordinance authorizing the issuance of revenue bonds have been complied with in accordance with the applicable provisions of the Act. NOW, THEREFORE, BE IT ORDAINED by the Common Council of the City of Carmel, Indiana, as follows: SECTION 1. Project. The City shall proceed with the Project for the construction of said improvements and extensions. The actions of the Board of Public Works of the City taken in connection with the Project are hereby approved, ratified, and confirmed. The Project shall be constructed and the bonds herein authorized shall be issued pursuant to and in accordance with the Act. The terms "works" and "utility" and other like terms where used in this Ordinance shall be construed to mean and include all structures and property of the City's waterworks utility. SECTION 2. Authorization of Obligations. (a) The City shall issue its "City of Carmel, Indiana Waterworks Revenue Bonds of 2002, Series B" (the "2002 Series B Bonds"), in one or more series, in an original principal amount not to exceed Five Million Four Hundred Thousand Dollars ($5,400,000) (the "Authorized Amount"), as negotiable, fully registered bonds, for the purpose of procuring funds to be applied to the costs of the Project, including without limitation reimbursement of preliminary expenses related thereto and all incidental expenses incurred in connection therewith (all of which are deemed to be a part of the Project), and the costs of selling and issuing the 2002 Series B Bonds. The 2002 Series B Bonds shall rank on a parity for all purposes with the Parity Bonds. The 2002 Series B Bonds shall be issued in denominations of Five Thousand Dollars ($5,000) or any integral multiple thereof, numbered consecutively from I upward, and dated as of the first day of the month in which they are sold or the date of delivery, as evidenced by the execution thereof. The 2002 Series B Bonds shall bear interest at a rate or rates not exceeding seven percent (7%) per annum (the exact rate or rates to be determined by bidding), and interest shall be payable semiannually on May 1 and November 1 in each year, beginning on May 1, 2003. Interest on the 2002 Series B Bonds shall be calculated according to a 360-day calendar year containing twelve 30-day months. The 2002 Series B Bonds shall mature beginning May 1, 2003 or May 1, 2004, and on May 1 of each year thereafter over a period ending not later than May 1, 2023 and in such amounts which will achieve as level debt service as practicable with authorized denominations, substantially as set forth on the schedule on Exhibit B, as finally "Fiscal Officer") as evidenced by delivery of the executed initial issue of the 2002 Series B Bonds to the Registrar for authentication. All or a portion of the 2002 Series B Bonds may be aggregated into and issued as one or more term bonds. The term bonds will be subject to mandatory sinking fund redemption with sinking fund payments and final maturities corresponding to the serial maturities described above. Sinking fund payments shall be applied to retire a portion of the term bonds as though it were a redemption of serial bonds, and, if more than one term bond of any maturity is outstanding, redemption of such maturity shall be made by lot. Sinking fund redemption payments shall be made in a principal amount equal to such serial maturities, plus accrued interest to the redemption date, but without premium or penalty. For all purposes of this Ordinance, such mandatory sinking fund redemption payments shall be deemed to be required payments of principal which mature on the date of such sinking fund payments. Appropriate changes shall be made in the definitive form of 2002 Series B Bonds, relative to the form of 2002 Series B Bonds contained in this Ordinance, to reflect any mandatory sinking fund redemption terms. SECTION 3. Pledge of Net RevenuesI Payment of Principal and Interest. The 2002 Series B Bonds, and any bonds ranking on a parity therewith, including the Parity Bonds, as to principal, premium, if any, and interest, shall be payable solely from and are hereby secured by an irrevocable pledge of and shall constitute a charge upon all the net revenues (defined as gross revenues of the works after deduction only for the payment of the reasonable expenses of operation, repair and maintenance) of the works (the "Net Revenues"). The City shall not be obligated to pay the 2002 Series B Bonds or the interest thereon except from the Net Revenues, and the 2002 Series B 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. All payments of interest on the 2002 Series B Bonds shall be paid by check mailed one business day prior to the interest payment date to the registered owners thereof as of the fifteenth (15th) day of the month preceding the interest payment date (the "Record Date") at the addresses as they appear on the registration and transfer books of the City kept for that purpose by the Registrar (the "Registration Record") or at such other address as is provided to the Paying Agent in writing by such registered owner. Each registered owner of $1,000,000 or more in principal amount of 2002 Series B Bonds shall be entitled to receive interest payments by wire transfer by providing written wire instructions to the Paying Agent before the Record Date for any payment. All principal payments and premium payments, if any, on the 2002 Series B Bonds shall be made upon surrender thereof at the principal office of the Paying Agent, in any U.S. coin or currency which on the date of such payment shall be legal tender for the payment of public and private debts, or in the case of a registered owner of $1,000,000 or more in principal amount of 2002 Series B Bonds, by wire transfer on the due date upon written direction of such owner provided at least fifteen (15) days prior to the maturity date or redemption date. Interest on 2002 Series B Bonds shall be payable from the interest payment date to which interest has been paid next preceding the authentication date thereof unless such 2002 Series B Bonds are authenticated after the Record Date for 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 authenticated on or before the Record Date for the first interest payment date, in which case they shall bear interest from the original date, until the principal shall be fully paid. SECTION 4. Transfer and Exchange of Bonds. Each 2002 Series B Bond shall be transferable or exchangeable only upon the Registration Record, by the registered owner thereof in writing, or by the registered owner's attorney duly authorized in writing, upon surrender of such 2002 Series B Bond together with a written insmunent of transfer or exchange satisfactory to the Registrar duly executed by the registered owner or such attorney, and thereupon a new fully registered 2002 Series B Bond or Bonds in the same aggregate principal amount, and of the same maturity, shall be executed and delivered in the names 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 or governmental charges are payable by the person requesting such transfer or exchange. The City, the Registrar and the Paying Agent may treat and consider the persons in whose names such 2002 Series B Bonds are registered as the absolute owners thereof for all purposes including for the purpose of receiving payment of, or on account of, the principal thereof and interest and premium, if any, due thereon. In the event any 2002 Series B Bond is mutilated, lost, stolen or destroyed, the City may execute and the Registrar may authenticate a new bond of like date, maturity and denomination as that mutilated, lost, stolen or destroyed, which new bond shall be marked in a manner to distinguish it from the bond for which it was issued, provided that, in the case of any mutilated bond, such mutilated bond shall first be surrendered to the Registrar, and in the case of any lost, stolen or destroyed bond there shall be first furnished to the Registrar evidence of such loss, theft or destruction satisfactory to the Fiscal Officer and the Registrar, together with indemnity satisfactory to them. In the event any such bond shall have matured, instead of issuing a duplicate bond, the City and the Registrar may, upon receiving indemnity satisfactory to them, pay the same without surrender thereof. The City and the Registrar may charge the owner of such 2002 Series B Bond with their reasonable fees and expenses in this connection. Any 2002 Series B Bond issued pursuant to this paragraph shall be deemed an original, substitute contractual obligation of the City, whether or not the lost, stolen or destroyed 2002 Series B Bond shall be found at any time, and shall be entitled to all the benefits of this Ordinance, equally and proportionately with any and all other 2002 Series B Bonds issued hereunder. SECTION 5. Registrar and Payine A~ent. The Fiscal Officer is hereby authorized to serve as, or to appoint a qualified financial institution to serve as, Registrar and Paying Agent for the 2002 Series B Bonds (together with any successor, the "Registrar" or "Paying Agent"). The Registrar is hereby charged with the responsibility of authenticating the 2002 Series B Bonds, and shall keep and maintain the Registration Record at its office. The Fiscal Officer is hereby authorized to enter into such agreements or understandings with any such institution as will enable the institution to perform the services required of a Registrar and Paying Agent. The Fiscal Officer is further authorized to pay such fees and the institution may charge for the services its provides as Registrar and Paying Agent and such fees may be paid from the Sinking 4 Fund established to pay the principal of and interest on the 2002 Series B Bonds as fiscal agency charges. The Registrar and Paying Agent may at any time resign as Registrar and Paying Agent by giving thirty (30) days written notice to the City and by first-class mail to each registered owner of the 2002 Series B Bonds then outstanding, and such resignation will take effect at the end of such thirty (30) days or upon the earlier appointment of a successor Registrar and Paying Agent by the City. Such notice to the City may be served personally or sent by first-class or 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 2002 Series B Bonds then outstanding of the removal of the Registrar and Paying Agent. Notices to the registered owners of the 2002 Series B 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 Record. Any predecessor Registrar and Paying Agent shall deliver all the 2002 Series B Bonds, cash and investments related thereto in its possession and the Registration Record to the successor Registrar and Paying Agent. SECTION 6. Terms of Redemption. The 2002 Series B Bonds may be made redeemable at the option of the City on thirty (30) days' notice, in whole or in part, in any order of maturities selected by the City and by lot within a maturity, on dates and with premiums, if any, and other terms as determined by the Executive and Fiscal Officer with the advice of the City's financial advisor, as evidenced by delivery of the executed initial issue of the 2002 Series B Bonds to the Registrar for authentication. Notice of redemption shall be mailed by first-class mail to the address of each registered owner of a 2002 Series B Bond to be redeemed as shown on the Registration Record not more than sixty (60) days and not less than thirty (30) days prior to the date fixed for redemption except to the extent such redemption notice is waived by owners of 2002 Series B Bonds redeemed, provided, however, that failure to give such notice by mailing, or any defect therein, with respect to any 2002 Series B Bond shall not affect the validity of any proceedings for the redemption of any other 2002 Series B Bonds. The notice shall specify the date and place of redemption, the redemption price and the CUSI~ numbers of the 2002 Series B Bonds called for redemption. The place of redemption may be determined by the City. Interest on the 2002 Series B 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, and thereafter, such 2002 Series B Bonds shall no longer be protected by this Ordinance and shall not be deemed to be outstanding hereunder, and the holders thereof shall have the right only to receive the redemption price. All 2002 Series B Bonds which have been redeemed shall be canceled and shall not be reissued; provided, however, that one or more new registered bonds shall be issued for the unredeemed portion of any 2002 Series B Bond without charge to the holder thereof. No later than the date fixed for redemption, funds shall be deposited with the Paying Agent or another paying agent to pay, and such agent is hereby authorized and directed to apply such funds to the payment of, the 2002 Series B Bonds or portions thereof called for redemption, including accrued interest thereon to the redemption date. No payment shall be made upon any 2002 Series B Bond or portion thereof called for redemption until such 2002 Series B Bond shall have been delivered for payment or cancellation or the Registrar shall have received the items required by this Ordinance with respect to any mutilated, lost, stolen or destroyed bond. SECTION 7. Execution and Negotiability. The 2002 Series B Bonds shall be signed in the name of the City by the manual or facsimile signature of the Executive, and attested by the manual or facsimile signature of the Fiscal Officer, who also shall affix the seal of the City manually or shall have the seal imprinted or impressed thereon by facsimile or other means. In case any officer whose signature or facsimile signature appears thereon shall cease to be such officer before the delivery of the 2002 Series B Bonds, such signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in office until such delivery. The 2002 Series B Bonds shall also be authenticated by the manual signature of the Registrar, and no 2002 Series B Bond shall be valid or become obligatory for any purpose until the certificate of authentication thereon has been so executed. The 2002 Series B 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. SECTION 8. Authorization for Book-Entry System. The 2002 Series B Bonds may, in compliance with all applicable laws, initially be issued and held in book-entry form on the books of the central depository system, The Depository Trust Company, its successors, or any successor central depository system appointed by the City from time to time (the "Clearing Agency"), without physical distribution of bonds to the purchasers. The following provisions of this Section apply in such event. One definitive 2002 Series B Bond of each maturity shall be delivered to the Clearing Agency (or its agent) and held in its custody. The City and Registrar may, in connection herewith, do or perform or cause to be done or performed any acts or things not adverse to the rights of the holders of the 2002 Series B Bonds as are necessary or appropriate to accomplish or recognize such book-entry form 2002 Series B Bonds. During any time that the 2002 Series B Bonds are held in book-entry form on the books of a Cleating Agency, (1) any such 2002 Series B Bond may be registered upon Registration Record in the name of such Cleating Agency, or any nominee thereof, including Cede & Co.; (2) the Clearing Agency in whose name such 2002 Series B Bond is so registered shall be, and the City and the Registrar and Paying Agent may deem and treat such Clearing Agency as, the absolute owner and holder of such 2002 Series B Bond for all purposes of this Ordinance, including, without limitation, the receiving of payment of the principal of and interest and premium, if any, on such 2002 Series B Bond, the receiving of notice and the giving of consent; (3) neither the City nor the Registrar or Paying Agent shall have any responsibility or obligation hereunder to any direct or indirect participant, within the meaning of Section 17A of the Securities Exchange Act of 1934, as amended, of such Cleating Agency, or any person on behalf of which, or otherwise in respect of which, any such participant holds any interest in any 2002 Series B Bond, including, without limitation, any responsibility or obligation hereunder to maintain accurate records of any interest in any 2002 Series B Bond or any responsibility or obligation hereunder with respect to the receiving of payment of principal of or interest or premium, if any, on any 2002 Series B Bond, the receiving of notice or the giving of consent; and (4) the Clearing Agency is not required to present any 2002 Series B Bond called for partial redemption, if any, prior to receiving payment so long as the Registrar and Paying Agent and the Cleating Agency have agreed to the method for noting such partial redemption. If either the City receives notice from the Clearing Agency which is currently the registered owner of the 2002 Series B Bonds to the effect that such Cleating Agency is unable or unwilling to discharge its responsibility as a Cleating Agency for the 2002 Series B Bonds, or the City elects to discontinue its use of such Clearing Agency as a Cleating Agency for the 2002 Series B Bonds, then the City and the Registrar and Paying Agent each shall do or perform or cause to be done or performed all acts or things, not adverse to the fights of the holders of the 2002 Series B Bonds, as are necessary or appropriate to discontinue use of such Cleating Agency as a Cleating Agency for the 2002 Series B Bonds and to transfer the ownership of each of the 2002 Series B Bonds to such person or persons, including any other Cleating Agency, as the holder of the 2002 Series B Bonds may direct in accordance with this Ordinance. Any expenses of such discontinuance and transfer, including expenses of printing new certificates to evidence the 2002 Series B Bonds, shall be paid by the City. During any time that the 2002 Series B Bonds are held in book-entry form on the books of a Clearing Agency, the Registrar shall be entitled to request and rely upon a certificate or other written representation from the Cleating Agency or any participant or indirect participant with respect to the identity of any beneficial owner of the 2002 Series B Bonds as of a record date selected by the Registrar. For purposes of determining whether the consent, advice, direction or demand of a registered owner of a 2002 Series B Bond has been obtained, the Registrar shall be entitled to treat the beneficial owners of the 2002 Series B Bonds as the bondholders and any consent, request, direction, approval, objection or other instrument of such beneficial owner may be obtained in the fashion described in this Ordinance. During any time that the 2002 Series B Bonds are held in book-entry form on the books of a Cleating Agency, the Executive, the Fiscal Officer and/or the Registrar are authorized to execute and deliver a Letter of Representations agreement with the Cleating Agency, or a Blanket Issuer Letter of Representations, and the provisions of any such Letter of Representations or any successor agreement shall control on the matters set forth therein. The Registrar, by accepting the duties of Registrar under this Ordinance, agrees that it will (i) undertake the duties of agent required thereby and that those duties to be undertaken by either the agent or the issuer shall be the responsibility of the Registrar, and (ii) comply with all requirements of the Cleating Agency, including without limitation same day funds settlement payment procedures. Further, during any time that the 2002 Series B Bonds are held in book- entry form, the provisions of Section 8 of this Ordinance shall control over conflicting provisions in any other section of this Ordinance. 7 SECTION 9. Form of 2002 Series B Bonds. The form and tenor of the 2002 Series B Bonds shall be substantially as follows, all blanks to be filled in properly and all necessary additions and deletions to be made prior to delivery: R- UNITED STATES OF AMERICA STATE OF INDIANA COUNTY OF HAMILTON CITY OF CARMEL, INDIANA WATERWORKS REVENUE BOND OF 2002, SERIES B Interest Maturity Original Authentication Rate Date Date Date CUSIP REGISTERED OWNER: PRINCIPAL SUM: Dollars ($.__.) The City of Carmel, in Hamilton, County, State of Indiana (the "City"), for value received, hereby promises to pay to the Registered Owner set forth above, solely out of the special revenue fund hereinafter referred to, the Principal Sam 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 hereafter provided), and to pay interest thereon until the Principal Sum shall be fully paid at the Interest Rate per annum specified above fi.om the interest payment date to which interest has been paid next preceding the Authentication Date of this bond unless tins bond is authenticated after the fifteenth day of the month preceding the interest payment date (the "Record Date") and on or before such interest payment date in which case it shall bear interest from such interest payment date, or unless tins bond is authenticated on or before April 15, 2003, in which case it shall bear interest from the Original Date, winch interest is payable semiannually on May 1 and November 1 of each year, beginning on May 1, 2003. Interest shall be calculated on the basis ora 360-day year comprised of twelve 30-day months. The principal of and premium, if any, on this bond are payable at the principal office of the Clerk-Treasurer of the City of Carmel [or the principal office of the ftnancial institution so appointed] (the "Registrar" or "Paying Agent"), in Carmel, 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 as of the Record 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. Each Registered Owner of $1,000,000 or more in principal amount of bonds shall be entitled to receive interest payments by wire transfer by providing written wire instructions to the Paying Agent before the Record Date for any payment. All payments of principal of, and premium, if any, on this bond shall be made upon surrender thereof at the principal office of the Paying Agent, in any U.S. coin or currency which on the date of such payment shall be legal tender for the payment of public and private debts, or in the case of a Registered Owner of $1,000,000 or more in principal amount of 2002 Series B Bonds, by wire transfer on the due date upon written direction of such owner provided at least fifteen (15) days prior to the maturity date or redemption date. 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 lin'fitations of the constitution of the State of Indiana. 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 Regisl~'ar. The terms and provisions of this bond are continued below and such terms and provisions shall for all purposes have the same effect as though fully set forth at this place. 1N WITNESS WHEREOF, the City of Carmel, in Hamilton 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 CARMEL, INDIANA By Mayor (SEAL) ATTEST: Clerk-Treasurer REGISTRAR'S CERTIFICATE OF AUTHENTICATION It is hereby certified that this bond is one of the bonds described in the within-mentioned Ordinance duly authenticated by the Registrar. as Registrar By: Authorized Representative This bond is one of an authorized issue of bonds of the City of Carmel of Hamilton County, Indiana, of like date, tenor and effect, except as to denomination, numbering, rates of interest, redemption terms and dates of maturity, aggregating Dollars ($ ), numbered consecutively from 1 upward (the "Bonds"), issued for the purpose of providing funds to be applied for the purchase of certain assets of Hamilton Western Utilities in accordance with a certain purchase agreement (the "Project"), and to pay incidental expenses and costs of issuance of the Bonds. This bond is issued pursuant to an ordinance adopted by the Common Council of said City on the __ day of ,20__, entitled "An Ordinance of the Common Council of the City of Carmel, Indiana Concerning the Construction of Additiuns and Improvements to the Waterworks of the City of Carmel, Indiana; Authorizing the Issuance of Revenue Bonds for Such Purpose; Addressing other Matters Connected Therewith, and Repealing Ordinances Inconsistent Herewith" (the "Ordinance"), and in accordance with the provisions of Indiana law, including without limitation Indiana Code 8-1.5, and other applicable laws, as amended (the "Act"), all as more particularly described in the Ordinance. The owner of 9 this bond, by the acceptance hereof, agrees to all the terms and provisions contained in the Ordinance and the Act. 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, the Parity Bonds (as hereinafter defined), and any bonds hereafter issued on a parity therewith are payable solely from the Sinking Fund (the "Sinking Fund") maintained under the Ordinance to be provided from the Net Revenues (defined as the gross revenues of the works remaining after the payment of the reasonable expenses of operation, repair and maintenance) of the works, including all additions and improvements thereto and replacements thereof subsequently constructed or acquired. The City irrevocably pledges the entire Net Revenues of the works to the prompt payment of the principal of and interest on the Bonds and any bonds ranking on a parity therewith, including the City of Carmel Waterworks Revenue Bonds of 1993, Series B and the City of Carmel Waterworks Revenue Bonds of 2002, Series A (collectively, the "Parity Bonds"), each authorized by an Ordinance referred to collectively herein as the Parity Ordinance, to the extent necessary for such purposes, and covenants that it will establish proper 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, repair and maintenance of the 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 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. The City covenants that for so long as the Bonds and any bonds issued on a parity therewith, including the Parity Bonds, remain outstanding it will set aside and pay into the Sinking Fund a sufficient amount of the Net Revenues for the payment of (a) the principal of and interest on all bonds which by their terms are payable from the Net Revenues, as such principal and interest shall fall due, (b) the necessary fiscal agency charges for paying bonds and (c) an additional amount as a margin of safety to accumulate and maintain the reserve required by the Ordinance. Such required payments shall constitute a fkst charge upon all the Net Revenues. Reference is made to the Ordinance for a more complete statement of the revenues from which and conditions under which this bond is payable, a statement of the conditions on which obligations may hereafter be issued on parity with this bond, the manner in which the Ordinance may be amended and the general covenants and provisions pursuant to which this bond has been issued. The bonds of this issue maturing on and after __ 1, __ are redeemable at the option of the City on, , or any date thereafter, on thirty (30) days' notice, in whole or in part, in any order of maturities selected by the City and by lot within a maturity, at 100% of face value, together with the following premiums: % if redeemed on __. 1, or thereafter before 1, ; % if redeemed on .... or thereafter before 1, ; % if redeemed on 1, , or thereafter prior to maturity; plus accrued interest to the date fixed for redemption. Each minimum authorized denomination in principal amount shall be considered a separate bond for purposes of partial redemption. Notice of such redemption shall be mailed by frrst-class mail not more than sixty (60) days and not less than thirty (30) days prior to the date fixed for redemption to the address of the registered owner of each bond to be redeemed as shown on the registration record of the City except to the extent such redemption notice is waived by owners of the bond or bonds redeemed, provided, however, that failure to give such notice by mailing, or any defect therein, with respect l0 to any bond shall not affect the validity of any proceedings for the redemption of any other bonds. The notice shall specify the date and place of redemption, the redemption price and the CUSIP numbers 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, and thereafter, such bonds shall no longer be protected by the Ordinance and shall not be deemed to be outstanding thereunder. This bond is subject to defeasance prior to payment or redemption as provided in the Ordinance. If this bond shall not be presented for payment or redemption on the date fixed therefor, the City may deposit in trust with the Paying Agent or another paying agent, 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 for payment and the City shall have no further obligation or liability in respect thereto. This bond is transferable or exchangeable only upon the registration record kept for that purpose at the office of the Registrar by the Registered Owner in person, or by his attorney duly authorized in writing, upon surrender of this bond together with a wrilten instrument of transfer or exchange satisfactory to the Registrar duly executed by the Registered Owner or such attorney, 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 the Registered Owner, as the case may be, in exchange therefor. This bond may be transferred or exchanged without cost to the Registered Owner except for any tax or governmental charge required to be paid with respect to the transfer or exchange. 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 and premium, if any, due hereon. The bonds maturing on any maturity date are issuable only in the denomination of $5,000 or any integral multiple thereof. A Continuing Disclosure Contract fi.om the City to each registered owner or holder of any bond, dated as of the date of initial issuance of the Bonds (the "Contract"), has been executed by the City, a copy of which is available fi.om the City and the terms of which are incorporated herein by this reference. The Contract contains certain promises of the City to each registered owner or holder of any Bond, including a promise to provide certain continuing disclosure. By its payment for and acceptance of this bond, the registered owner or holder of this bond assents to the Contract and to the exchange of such payment and acceptance for such promises. [LEGAL OP1NION] The following abbreviations, when used in the inscription of the face of this bond, shall be construed as through they were written out in full according to applicable laws or regulations: TEN. COM. TEN. ENT. as tenants by the entireties JT. TEN. as joint tenants with right of survivorship and not as tenants in UNIF. TRAN. MIN. ACT Custodian __ (Cust.) (Minor) under Uniform Transfer to Minors Act of (State) Additional abbreviations may also be used although not in the above list. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please Print or Typewrite Name and Address and Social Security or Other Identifying Number) $ principal amount (must be a multiple of $ ) of 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: Signature Guaranteed: 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. NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution participating in a Securities Transfer Association recognized signature guarantee program. 12 SECTION 10. Sale of Bonds. (a) The 2002 Series B Bonds shall be sold in a competitive sale. The Fiscal Officer shall cause to be published either (i) a notice of sale once each week for two consecutive weeks in accordance with I.C. §5-3-1-2, in which case the date fixed for the sale shall not be earlier than fifteen (15) days after the first of such publications and not earlier than three (3) days after the second of such publications, or (ii) a notice of intent to sell bonds once each week for two weeks in accordance with I.C. §5-1-11~2 and I.C. §5-3-1-4 and in a newspaper of general circulation published in the State capital, in which case bids may not be received more than ninety (90) days after the first of such publications. Said sale notice shall state the time and place of sale, the purpose for which the 2002 Series B Bonds are being issued, the total amount thereof, the amount and date of each maturity, the maximum rate or rates of interest thereon, their denominations, the time and place of payment, the terms and conditions upon which bids will be received and the sale made and such other information as is required by law or as the Fiscal Officer shall deem necessary. All bids for the 2002 Series B Bonds shall be sealed and shall be presented to the Fiscal Officer in accord with the terms set forth in the sale notice. Bidders for the 2002 Series B Bonds shall be required to name the rate or rates of interest which the 2002 Series B Bonds are to bear, which shall be the same for all 2002 Series B Bonds maturing on the same date and the interest rate bid on any maturity of 2002 Series B Bonds must be no less than the interest rate bid on any and all prior maturities, not exceeding seven percent (7%) per annum, and such interest rate or rates shall be in multiples of one hundredth of one pement. The Fiscal Officer shall award the 2002 Series B Bonds to the bidder who offers the lowest interest cost, to be determined by computing the total interest on all the 2002 Series B Bonds to their maturities and deducting therefrom the premium bid, if any, or adding thereto the amount of the discount, if any. No bid for less than ninety-eight and one-half percent (98.5%) of the par value of the 2002 Series B Bonds, plus accrued interest, shall be considered. The Fiscal Officer may require that all bids be accompanied by certified or cashier's checks payable to the order of the City, or a surety bond, in an amount not to exceed one pement of the aggregate principal amount of the 2002 Series B Bonds as a guaranty of the performance of said bid, should it be accepted. In the event no satisfactory bids are received on the day named in the sale notice, the sale may be continued from day to day thereafter for a period of thirty (30) days without readvertisement; provided, however, that if said sale is continued, no bid shall be accepted which offers an interest cost which is equal to or higher than the best bid received at the time fixed for sale in the bond sale notice. The Fiscal Officer shall have full right to reject any and all bids. After the 2002 Series B Bonds have been properly sold and executed, the Fiscal Officer shall receive from the purchasers payment for the 2002 Series B Bonds and shall provide for delivery of the 2002 Series B Bonds to the purchasers. (b) The 2002 Series B 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. The proper officers of the City are hereby directed to sell the 2002 Series B Bonds to the purchaser, 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. (c) The Executive and the Fiscal Officer each are hereby authorized to deem final an official statement with respect to the 2002 Series B Bonds, as of its date, in accordance with the provisions of Rule 15c2-12 of the U.S. Securities and Exchange Commission, as amended (the "SEC Rule"), subject to completion as permitted by the SEC Rule, and the City further authorizes the distribution of the deemed final official statement, and the execution, delivery and distribution of such document as further modified and amended with the approval of the Executive or the Fiscal Officer in the form ora final official statement. In order to assist any underwriter of the 2002 Series B Bonds in complying with paragraph (b)(5) of the SEC Rule by undertaking to make available appropriate disclosure about the City and the 2002 Series B Bonds to participants in the municipal securities market, the City hereby covenants, agrees and undertakes, in accordance with the SEC Rule, unless excluded from the applicability of the SEC Rule or otherwise exempted from the provisions of paragraph (b)(5) of the SEC Rule, that it will comply with and carry out all of the provisions of the continuing disclosure contract. "Continuing disclosure contract" shall mean that certain continuing disclosure contract executed by the City and dated the date of issuance of the 2002 Series B Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof. The execution and delivery by the City of the continuing disclosure contract, and the performance by the City of its obligations thereunder by or through any employee or agent of the City, are hereby approved, and the City shall comply with and carry out the terms thereof. (d) The Fiscal Officer is hereby authorized and directed to obtain a legal opinion as to the validity of the 2002 Series B Bonds from Barnes & Thomburg, and to furnish such opinion to the purchasers of the 2002 Series B Bonds or to cause a copy of said legal opinion to be printed on each 2002 Series B Bond. The cost of such opinion shall be paid out of the proceeds of the 2002 Series B Bonds. (e) In connection with the sale of the 2002 Series B Bonds, the Executive and the Fiscal Officer each are authorized to take such actions and to execute and deliver such agreements and instruments as they deem advisable to obtain a rating and/or to obtain bond insurance for the 2002 Series B Bonds, and the taking of such actions and the execution and delivery of such agreements and instruments are hereby approved. 14 SECTION 11. Use of Proceeds. The accrued interest received at the time of delivery of the 2002 Series B Bonds, if any, and premium, if any, shall be deposited in the Principal and Interest Account of the Sinking Fund (as hereafter defined) and applied to payments on the 2002 Series B Bonds on the first interest payment date. The remaining proceeds from the sale of the 2002 Series B Bonds, shall be deposited in a fund of the utility hereby created and designated as "City of Carmel, Indiana 2002 Series B Bond Project Fund" (the "Project Fund"). The proceeds deposited in the Project Fund, together with all investment earnings thereon, shall be expended only for the purpose of paying the costs of the Project, and the costs of selling and issuing the 2002 Series B Bonds, including the premium for any bond insurance obtained for the 2002 Series B Bonds. Any balance remaining in the Project Fund after the completion of the Project which is not required to meet unpaid obligations incurred in connection therewith and on account of the sale and issuance of the 2002 Series B Bonds shall be paid into the Principal and Interest Account of the Sinking Fund and used solely for the purposes of such Account or used for the same purpose or type of project for which the 2002 Series B Bonds were originally issued, all in accordance with I.C. 5-1-13, as amended or as otherwise permitted by law. SECTION 12. Revenue Fund. There is hereby continued a fund of the utility designated as the Revenue Fund (the "Revenue Fund"), into which there shall be deposited upon receipt all revenues of the works for application as set forth below. SECTION 13. Operation and Maintenance Fund. There is hereby continued an operating fund of the utility designated as the Operation and Maintenance Fund (the "Operation and Maintenance Fund"). There shall be transferred from the Revenue Fund and credited to the Operation and Maintenance Fund, on the last day of each calendar month, a sufficient amount to meet 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 works on a day-to-day basis, but none of the moneys in the Operation and Maintenance Fund shall be used for depreciation, replacements, improvements, extensions or additions. Any balance in Operation and Maintenance Fund in excess of the expected expenses of operation, repair and maintenance for the next succeeding month may be transferred to the Sinking Fund if necessary to prevent a default in the payment of principal of or interest on the outstanding bonds of the works. SECTION 14. Sinking Fund. There is hereby continued a fund of the utility designated as the Sinking Fund (the "Sinking Fund"), to be used for the payment of the principal of and interest on bonds which by their terms are payable from the Net Revenues, and the payment of any fiscal agency charges in connection with such payment. The Sinking Fund is divided into two accounts designated as the Principal and Interest Account and the Debt Service Reserve Account, which are pledged for the purposes set forth below. (a) Principal and Interest Account. There shall be transferred, on the last day of each calendar month, from the Revenue Fund and credited to the Principal and Interest Account an amount equal to the sum of at least one-twelfth (1/12) of the principal and at least one-sixth (1/6) of the interest on all then outstanding bonds payable from Net Revenues on the next succeeding principal and interest payment dates, until the amount available therein shall equal the principal payable during the next succeeding twelve (12) calendar months and the interest payable dnring the next succeeding six (6) calendar months. There shall similarly be credited to the account any amount necessary to pay when due the bank fiscal agency charges for paying principal of 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 Principal and Interest Account, remit promptly to the registered owner or to the bank fiscal agency sufficient moneys to pay the principal and interest on the due dates thereof together with the amount of bank fiscal agency charges. (b) Debt Service Reserve Account. There shall be transferred, on the last day of each calendar month, after making any required transfer to the Principal and Interest Account, from the Revenue Fund and credited to the Debt Service Reserve Account an amount to constitute an appropriate reserve to facilitate the marketing of the 2002 Series B Bonds, which monthly deposits shall be in an amount sufficient to build the balance in the Debt Service Reserve Account to an amount equal to such required reserve within no more than five (5) years on a level monthly basis (after accounting for earnings thereon), which reserve amount shall not exceed the lesser often pement (10%) of the proceeds of the 2002 Series B Bonds, the maximum annual debt service on the 2002 Series B Bonds, and 125% of the average annual debt service on the 2002 Series B Bonds. After the issuance of the 2002 Series B Bonds, the City shall maintain the balance in the Debt Service Reserve Account in an amount equal to the Reserve Requirement, subject to the provisions of this Ordinance or any ordinance authorizing parity bonds which allows the Reserve Requirement to be accumulated over time. For these purposes, "Reserve Requirement" means the lesser often percent (10%) of the proceeds of the 2002 Series B Bonds and any bonds ranking on a parity therewith (including the Parity Bonds), the maximum annual debt service on the 2002 Series B Bonds and such parity bonds, and 125% of the average annual debt service on the 2002 Series B Bonds and such parity bonds. All money in the Debt Service Reserve Account shall be used and withdrawn solely for the purpose of making deposits into the Principal and Interest Account, in the event of and to the extent of any deficiency in the Principal and Interest Account with respect to the payments then due on the 2002 Series B Bonds and any such parity bonds, or to make the final payments on such bonds when the Debt Service Reserve Account, together with other funds available for such purpose, is sufficient to make all remaining payments thereon to final maturity. Any amount in the Debt Service Reserve Account in excess of the Reserve Requirement shall be withdrawn from time to time, and at least as frequently as annually, and deposited in the Principal and Interest Account. Any deficiency in the balance required to be held in the Debt Service Reserve Account shall be promptly made up from the next available Net Revenues after credits to the Principal and Interest Account. SECTION 15. Improvement Fund. After meeting the requirements of the Operation and Maintenance Fund and the Sinking Fund, any excess revenues may be transferred from the Revenue Fund and credited to the special utility fund, to be expended in making good depreciation in the works and new construction, hereby continued and designated as the "Improvement Fund" (the "Improvement Fund"). Said Fund shall be used for replacements, improvements, extensions and additions to the works. Moneys in the Improvement Fund shall be transferred to the Sinking Fund if necessary to prevent a default in the payment of principal of and interest on the then outstanding bonds of the works, or may be transferred to the Operation and Maintenance Fund to meet unforeseen contingencies in the operation, repair and maintenance of the works. SECTION 16. Investment of Funds. The funds and accounts described herein shall be accounted for separate and apart from each other and from all other funds and accounts of the City. All moneys deposited in the funds and 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, Axticle 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 17. Financial Records and Accounts. 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 utility and all disbursements made therefrom and all transactions relating to the utility. The City shall maintain on file the audited financial statements of the utility prepared by the State Board of Accounts. There shall be furnished, upon written request, to any owner of the 2002 Series B Bonds, the most recent copy of the audited financial statements of the utility prepared by the State Board of Accounts. Copies of all such statements and reports shall be kept on file in the office of the Fiscal Officer. SECTION 18. Rate Covenant. The City covenants and agrees that, by ordinance of the Council, it will establish just and equitable rates and 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 works by or through any part of the utility, or that in any way uses or is served by such 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 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 of the works and the requirements of the Sinking Fund. 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 19. Defeasance. If, when the 2002 Series B Bonds or a portion thereof shall have become due and payable in accordance with their terms or shall have been duly called for 17 redemption or irrevocable instructions to call the 2002 Series B Bonds or a portion thereof for redemption shall have been given, and the whole amount of the principal, premium, if any, and the interest so due and payable upon such 2002 Series B Bonds or any portion thereof then outstanding shall be paid, or (i) sufficient moneys or (ii) 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 for such purpose, shall be held in trust for such purpose, and provision shall also be made for paying all fees and expenses for the redemption, then and in that case the 2002 Series B Bonds issued hereunder or any designated portion thereof shall no longer be deemed outstanding or entitled to the pledge of the Net Revenues of the works. SECTION 20. Additional Bonds. The City reserves the right to authorize and issue additional bonds payable out of the Net Revenues ranking on a parity with the 2002 Series B Bonds for the purpose of financing the cost of future additions, extensions and improvements to the works, or to provide for a complete or partial refunding of obligations, subject to the following conditions precedent: (a) The interest on and principal of all bonds payable from the Net Revenues shall have been paid to date in accordance with the terms thereof, provided, this condition shall be satisfied if any required amount is to be provided from the proceeds of such additional bonds or other funds. (b) The balance in the Debt Service Reserve Account shall be equal to the amount required herein, provided, this condition shall be satisfied if any required amount is to be provided from the proceeds of such additional bonds or other funds. (c) The Net Revenues in the fiscal year immediately preceding the issuance of any such bonds ranking on a parity with the 2002 Series B Bonds shall be not less than one hundred twenty-five percent (125%) of the annual principal and interest requirements of the then outstanding parity bonds (including the 2002 Series B Bonds and the Party Bonds) and the additional parity bonds proposed to be issued for each respective year during the term of such outstanding parity bonds and the proposed additional bonds; or, prior to the issuance of the additional bonds, the rates and charges shall be increased sufficiently so that said 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 such annual principal and interest requirements for each respective year during the term of such outstanding parity bonds and the proposed additional bonds. For purposes of this subsection, the records of the works shall be analyzed and all showings shall be prepared by a certified public accountant (the "Certifier") employed by the City for that purpose. (d) The principal of said additional parity bonds shall be payable on May 1 and the interest shall be payable on May 1 and November 1 during the periods such principal and interest are payable. SECTION 21. Further Covenants of the City.. For the purpose of further safeguarding the interests of the owners of the 2002 Series B Bonds, it is hereby specifically provided as follows: (a) The City shall at all times maintain the works in good condition, and operate the same in an efficient manner and at a reasonable cost. (b) So long as any of the 2002 Series B Bonds are outstanding, the City shall maintain insurance on the insurable parts of the works, of a kind and in an amount such as would normally be carried by private entities 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. Insurance proceeds shall be used in replacing or repairing the property destroyed or damaged, or if not used for that purpose, shall be treated and applied as Revenues of the Sinking Fund. (c) So long as any of the 2002 Series B Bonds are outstanding, the City shall not mortgage, pledge or otherwise encumber the works, 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. (d) Except as otherwise specifically provided in Section 20 of this Ordinance and in Section 20 of the Parity Ordinance, so long as any of the 2002 Series B Bonds are outstanding, no additional bonds or other obligations pledging any portion of the revenues of the works shall be issued by the City, except such as shall be made junior and subordinate in all respects to the 2002 Series B Bonds and the Parity Bonds, unless all of the 2002 Series B Bonds and Parity Bonds are defeased, redeemed or retired coincidentally with the delivery of such additional bonds or other obligations. Such subordinate obligations shall be subject to the provisions of Section 20(d). (e) The provisions of this Ordinance shall constitute a contract by and between the City and the owners of the 2002 Series B Bonds, all the terms of which shall be enforceable by any such owner by any and all appropriate proceedings in law or in equity. After the issuance of the 2002 Series B Bonds and so long as any of the principal thereof or interest or premium, if any, thereon remains unpaid, except as expressly provided herein, this Ordinance shall not be repealed or amended in any respect which will adversely affect the rights of such owners, nor shall the 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. (f) The provisions of this Ordinance shall be construed to create a trust in the proceeds of the sale of the 2002 Series B Bonds for the uses and purposes herein set forth, and the owners of the 2002 Series B Bonds shall retain a lien on such proceeds until the same are applied in accordance with the provisions of this Ordinance and the 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 set forth in this Ordinance. The owners of the 2002 Series B Bonds shall have all the rights, remedies and privileges set forth in the Act. SECTION 22. Amendments With Consent of Bondholders. Subject to the terms and provisions contained in this section and Sections 21 and 23, the owners of not less than sixty-six and two-thirds percent (66 2/3%) in aggregate principal amount of the 2002 Series B Bonds and then outstanding shall have the right, from time to time, to consent to and approve the adoption by the Council of such ordinance or ordinances supplemental hereto, as shall be deemed necessary or desirable by the City for the purpose of amending 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 or premium, if any, on any 2002 Series B Bond or an advancement of the earliest redemption date on any 2002 Series B Bond, without the consent of the holder of each 2002 Series B Bond so affected; or (b) A reduction in the principal amount of any 2002 Series B Bond or the redemption premium or the rate of interest thereon, or a change in the monetary medium in which such amounts are payable, without the consent of the holder of each 2002 Series B Bond so affected; or (c) The creation of a lien upon or a pledge of the Net Revenues ranking prior to the pledge thereof created by this Ordinance, without the consent of the holders of all 2002 Series B Bonds then outstanding; or (d) A preference or priority of any 2002 Series B Bond over any other 2002 Series B Bond, without the consent of the holders of all 2002 Series B Bonds then outstanding; or (e) A reduction in the aggregate principal amount of the 2002 Series B Bonds required for consent to such supplemental ordinance, without the consent of the holders of all 2002 Series B Bonds then outstanding; or (f) A reduction in the Reserve Requirement. 2O If the City shall desire to obtain any such consent, it shall cause the Registrar to mail a notice, postage prepaid, to the addresses appearing on the Registration Record. Such notice shall briefly set forth the nature of the proposed supplemental ordinance and shall state that a copy thereof is on file at the office of the Registrar for inspection by all owners of the 2002 Series B Bonds. The Registrar shall not, however, be subject to any liability to any owners of the 2002 Series B Bonds by reason of its failure to mail such notice, and any such failure shall not affect the validity of such supplemental ordinance when consented to and approved as herein provided. Whenever at any time within one year after the date of the mailing of such notice, the City shall receive any instrument or instruments purporting to be executed by the owners of the 2002 Series B Bonds of not less than sixty-six and two-thirds per cent (66-2/3%) in aggregate principal mount of the 2002 Series B Bonds then outstanding, which instrument or instruments shall refer to the proposed supplemental ordinance described in such notice, and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such notice as on file with the Registrar, thereupon, but not otherwise, the City may adopt such supplemental ordinance in substantially such form, without liability or responsibility to any owners of the 2002 Series B Bonds, whether or not such owners shall have consented thereto. No owner of any 2002 Series B Bond 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 Council 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 his 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 2002 Series B Bonds then outstanding shall thereafter be determined, exercised and enforced in accordance with this Ordinance, subject 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 2002 Series B Bonds, and the terms and provisions of the 2002 Series B Bonds and this Ordinance, or any supplemental ordinance, may be modified or amended in any respect with the consent of the City and the consent of the owners of all the 2002 Series B Bonds then outstanding. SECTION 23. Amendments Without Consent of Bondholders. The Council may, from time to time and at any time, and without notice to or consent of the owners of the 2002 Series B Bonds, adopt such ordinances supplemental hereto as shall not be inconsistent with the terms and provisions hereof (which supplemental ordinances shall thereafter form a part hereof): (a) To cure any ambiguity or formal defect or omission in this Ordinance or in any supplemental ordinance; 21 (b) To grant to or confer upon the owners of the 2002 Series B Bonds any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the owners of the 2002 Series B Bonds; (c) To procure a rating on the 2002 Series B Bonds from a nationally recognized securities rating agency designated in such supplemental ordinance, if such supplemental ordinance will not adversely affect the owners of the 2002 Series B Bonds; (d) To obtain or maintain bond insurance with respect to the 2002 Series B Bonds; (e) To provide for the refunding or advance refunding of the 2002 Series B Bonds; (f) To provide for the issuance of additional bonds as provided in Section 20 hereof; or (g) To make any other change which, in the determination of the Council in its sole discretion, is not to the prejudice of the owners of the 2002 Series B Bonds. SECTION 24. Tax Matters. In order to preserve the exclusion of interest on the 2002 Series B Bonds from gross income for federal income tax purposes and as an inducement to purchasers of the 2002 Series B Bonds, the City represents, covenants and agrees that: (a) No person or entity, other than the City or another state or local governmental City, will use proceeds of the 2002 Series B Bonds or property financed by the 2002 Series B Bond proceeds other than as a member of the general public. No person or entity other than the City or another state or local governmental City will own property financed by 2002 Series B 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 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. (b) No 2002 Series B Bond proceeds will be loaned to any entity or person other than a state or local governmental City. No 2002 Series B Bond proceeds will be transferred, directly or indirectly, or deemed transferred to a non- governmental person in any manner that would in substance constitute a loan of the 2002 Series B Bond proceeds. (c) The City will not take any action or fail to take any action with respect to the 2002 Series B Bonds that would result in the loss of the exclusion from gross income for federal income tax purposes of interest on the 2002 Series 22 B Bonds pursuant to Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder as applicable to the 2002 Series B Bonds, including, without limitation, the taking of such action as is necessary to rebate or cause to be rebated arbitrage profits on 2002 Series B Bond proceeds or other monies treated as 2002 Series B Bond proceeds to the federal government as provided in Section 148 of the Code, and will set aside such monies, which may be paid from investment income on funds and accounts notwithstanding anything else to the contrary herein, in trust for such purposes. (d) The City will file an information report on Form 8038-G with the Internal Revenue Service as required by Section 149 of the Code. (e) The City will not make any investment or do any other act or thing during the period that any 2002 Series B Bond is outstanding hereunder which would cause any 2002 Series B Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code and the regulations thereunder as applicable to the 2002 Series B Bonds. Notwithstanding any other provisions of this Ordinance, the foregoing covenants and authorizations (the "Tax Sections") which are designed to preserve the exclusion of interest on the 2002 Series B Bonds from gross income under federal law (the "Tax Exemption") need not be complied with to the extent the City receives an opinion of nationally recognized bond counsel that compliance with such Tax Section is unnecessary to preserve the Tax Exemption. SECTION 25. Non-Business Days. If the date of making any payment or the last date for performance of any act or the exercising of any right, as provided in this Ordinance, shall be a legal holiday or a day on which banking institutions in the City or the jurisdiction in which the Registrar or Paying Agent is located are typically closed, such payment may be made or act performed or right exercised on the next succeeding day not a legal holiday or a day on which such banking institutions are typically closed, with the same force and effect as if done on the nominal date provided in this Ordinance, and no interest shall accrue for the period after such nominal date. SECTION 26. No Conflict. The Council hereby finds and determines that the adoption of this Ordinance and the issuance of the 2002 Series B Bonds is in compliance with the Parity Ordinance. The Parity Ordinance shall remain in full force and effect. All ordinances and resolutions and parts thereof in conflict herewith, except the Parity Ordinance, are to the extent of such conflict hereby repealed. None of the provisions of this Ordinance shall be construed to adversely affect the rights of the owners of the Parity Bonds. SECTION 27. Severabilit¥. If any section, paragraph or provision of this Ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of 23 such section, paragraph or provision shall not affect any of the remaining provisions of this Ordinance. SECTION 28. Interpretation. Unless the context or laws clearly require otherwise, references herein to statutes or other laws include the same as modified, supplemented or superseded from time to time. SECTION 29. Effectiveness. This Ordinance shall be in full force and effect from and after its passage and signing by the Mayor. PASSED by the Common Council of the City of Carmel, Indiana this '~0¢Aday of ,~ )~t2 ~/) 2002, by a vote of e/ ayes and C) nays. COMMON COUNCIL FOR THE CITY OFCA~RMEL ~ / tiding Office~ \ ~ ' / Wayne wilson, President Pro Tempore ~;~/~ '9 //R~ald E. Carter ATTEST: Diana L. Cordray, IAMC, 24 Presented by me to the Mayor of the City of Carmel, Indiana thisr-~ day of~ 2002, at ~.~5' ~.M. Diana L. ~er Approved by me, Mayor of the City of Carmel, Indiana, this ~/~day of 2002, at rainard, Mayor ATTEST: Diana L. Cordray, IAMC, Clerk-T~as}arer Prepared by: Richard C. Starkey Barnes & Thomburg 11. S. Meridian Street Indianapolis, Indiana 46204 EXHIBIT A The Project consists of the following construction: East Side Water Main Project--146th Street to US 31; West Side Water Main Projects as follows: 12 inch--141st Street Extension; Centex Extension--141 st to 131 st Street; 20 inch from Centex to Shelboume; Upgrade HWU Booster Station; Water Tower; 141st Street from Centrex to West Park; 12 inch South on Shelboume to School. 26 EXHIBIT B MATURITY SCHEDULE Proposed Principal payable annually, on May 1: Year Approximate Principal Amount [TO BE DETERMINED] INDS01 RCS 499234vl 27