Construction of Additions and Improvements to the Sewage Works Bonds

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(Reverse of Bond) This bond is one of an authorized issue of bonds of the City of South Bend, Indiana aggregating Nine Million Five Hundred Thousand Dollars ($9, 500, 000) , numbered consecutively from 89R-1 upwards, issued pursuant to an Ordinance adopted by the Common Council of said City on December 12 , 1988 entitled "An Ordinance Concerning The Construction of Additions and Improvements to the Sewage Works Owned and Operated by the City of South Bend, Indiana, the Issuance of Additional Revenue Bonds to Provide the Cost Thereof, the Collection, Segregation and Distribution of the Revenues of said Works, the Safeguarding of the Interests of the Holders of said Bonds, and Other Matters Connected Therewith" (the "Ordinance") and in strict compliance with the provisions of IC 36-9-23, and the acts amendatory thereof and supplemental thereto (the "Series 1989 Bonds") . Reference is hereby made to the Ordinance for a description of the nature and extent of the rights, duties and obligations of the owners of the Series 1989 Bonds and the City and the terms on which this bond is issued, and to all the provisions of the Ordinance to which the holder hereof by the acceptance of this bond assents. The City reserves the right pursuant to the terms and conditions of the Ordinance to authorize and issue additional bonds hereafter payable out of the revenues of the sewage works, ranking on a parity herewith or junior hereto for the purpose of financing the cost of completion of the project for which the Series 1989 Bonds were issued and future extensions and improvements to the sewage works. Series 1989 Bonds maturing on or after February 1, 1998, shall be subject to prior redemption on and after February 1, 1997, at the option of the City (to be exercised by the Board of Public Works), on any date, in whole or in part, only in authorized denominations in inverse order of maturity and by lot (in such manner as the Registrar and Paying Agent shall determine) , within a maturity. Series 1989 Bonds so redeemed shall be redeemed on such redemption date at a price of 100% of the principal amount of the Series 1989 Bonds outstanding to be redeemed plus accrued interest to the redemption date on the principal amount to be redeemed, and without premium. Unless waived by any holder of Series 1989 Bonds to be redeemed, official notice of any such redemption shall be given by the Registrar and Paying Agent on behalf of the City identifying the Series 1989 Bonds, by mailing a copy of an official redemption notice by registered or certified mail at least thirty (30) days and not more than sixty (60) days prior to the date fixed for redemption to the registered owner of the Series 1989 Bond or Series 1989 Bonds to be redeemed at the address shown on the Series 1989 Bond Register or such other address as is furnished in writing by such registered owner to the Registrar and Paying Agent; provided, however, that failure to give such notice by mailing, or any defect therein, with respect to any Series 1989 Bond shall not affect the validity of any proceedings for the redemption of other Series 1989 Bonds. -12-