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WHEREAS, the Commission anticipates that the City will loan the proceeds of <br />the Bonds to the Borrower pursuant to a loan agreement to be entered into by and between the <br />City and the Borrower; and <br />WHEREAS, the Commission anticipates that sufficient Project Tax Increment <br />Revenues will be available to the Commission to pay the principal of and interest on the Bonds <br />and desires to pledge Project Tax Increment Revenues to the payment of principal of and interest <br />on the Bonds (the 'Pledge "); and <br />WHEREAS, the Pledge shall be junior and subordinate to the Senior Bonds, but <br />senior to all other obligations or indebtedness, if any, secured by Project Tax Increment <br />Revenues; and <br />WHEREAS, neither the City nor the Commission shall have any obligation with <br />respect to the payment of principal of or interest on the Bonds other than the payment of the <br />Project Tax Increment Revenues; <br />NOW, THEREFORE, BE IT RESOLVED, by the City of South Bend, Indiana, <br />Redevelopment Commission as follows: <br />1. The Commission hereby pledges the Project Tax Increment Revenues to <br />the payment of the principal of and interest on the Bonds for a period up to but not exceeding <br />twenty -five (25) years from the date of the issuance of the Bonds. Such Pledge shall terminate at <br />the earliest of the final payment on the Bonds or the conclusion of said twenty -five (25) year <br />period and shall be junior and subordinate to the Senior Bonds. <br />2. The principal and interest account of the Allocation Fund, previously <br />established by the Senior Resolution, is hereby continued with respect to the Pledge. <br />3. Project Tax Increment Revenues received by the Commission shall be <br />deposited into the Principal and Interest Account, as set forth in the Senior Resolution, and the <br />remaining amounts, after payment of principal of and interest on the Senior Bonds, shall be <br />appropriated for the payment of the principal of and interest on the Bonds. The Pledge shall be <br />junior and subordinate to the Senior Bonds, but senior to all other obligations or indebtedness <br />payable from Project Tax Increment Revenues, if any. Only Project Tax Increment Revenues are <br />hereby pledged for payment of the Bonds. This resolution shall not be construed as pledging tax <br />increment revenues of the Area generally. Project Tax Increment Revenues received in any year <br />in excess of the amount necessary (i) to pay the principal of and interest on the Senior Bonds and <br />the Bonds currently or scheduled to be due and expected to be paid from such revenues and <br />(ii) to pay any amount of principal which was not previously paid when due or interest accruing <br />thereon as a result of an insufficiency in Project Tax Increment Revenues in a prior year or years, <br />do not remain pledged and may be used by the Commission, in accordance with the Senior <br />Resolution, for any purpose set forth in Ind. Code § 36- 7- 14 -39. <br />SBIMANI 189256v1 - 2 - <br />