10963-23-Ordinance Authorizing the Acquisition and Construction of Certain Additions and Improvements to the Municipal Waterworks of the City of South Bend

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(b) Debt Service Reserve Account. The 2009A Subaccount in the Debt Service Reserve Account established pursuant to the 2009 Ordinance for the 2009A Bonds (the "2009A Subaccount") is hereby continued. In the event the Bonds or any series thereof authorized hereunder (for purposes of this Section XV such Bonds or series thereof are referred to as the "2023 Bonds"and the term"Bonds"means the 2023 Bonds issued hereunder and all Parity Bonds) are sold to the Authority as part of its IFA Program,the 2009A Subaccount shall serve as a reserve subaccount also for the 2023 Bonds and any Parity Bonds hereafter issued by the City (and as such, the 2009A Bonds Subaccount shall hereinafter be known as the "Common Reserve Subaccount"). Upon the issuance of the 2023 Bonds, the City may deposit Bond proceeds, funds on hand, or a combination thereof into the Common Reserve Subaccount to satisfy the Reserve Requirement(as defined herein). The Debt Service Reserve Account(excluding any subaccounts established or continued for any of the Bonds (each, a "Subaccount", and collectively, the "Subaccounts")) shall constitute the margin for safety and as protection against default in the payment of principal of and interest on the Bonds (as hereinafter defined) (excluding any Bonds for which a Subaccount was established or continued),and the moneys in the Debt Service Reserve Account (excluding any Subaccounts) shall be used to pay current principal and interest on the Bonds (excluding any Bonds for which a Subaccount was established or continued) to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. The Common Reserve Subaccount shall constitute the margin for safety and as protection against default in the payment of principal of and interest on the 2023 Bonds, the 2009A Bonds, and any Parity Bonds hereafter issued by the City, and the moneys in such Common Reserve Subaccount shall be used to pay current principal and interest on the outstanding 2023 Bonds, the 2009A Bonds, or any Parity Bonds hereafter issued by the City to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. (c) No amounts in the Common Reserve Subaccount shall be available to pay any principal of or interest or redemption premium, if any, on any Bonds, except the 2023 Bonds, the 2009A Bonds and any Parity Bonds hereafter issued by the City. (d) No amounts in the Debt Service Reserve Account shall be available to pay any principal of or interest or redemption premium, if any, on any of the 2023 Bonds, the 2009A Bonds and any Parity Bonds hereafter issued by the City, except that any amounts in the Common Reserve Subaccount of the Debt Service Reserve Account shall be available to pay the principal of or interest or redemption premium, if any, on the 2023 Bonds,the 2009A Bonds,and any Parity Bonds hereafter issued by the City. (e) In this Ordinance the term"Parity Bonds"means any and all bonds ranking on a parity with the 2023 Bonds issued hereunder (including the Prior Bonds) which are (i) now outstanding or issued in the future by the City on a parity with the 2023 Bonds in accordance with the restrictions imposed by this Ordinance and (ii) payable from the Net Revenues of the Waterworks. (f) In this Ordinance, the term "Reserve Requirement" for the Bonds (excluding any Bonds for which a Subaccount was established) means the least of: (i) the maximum annual debt service on the Bonds (excluding any Bonds for which a Subaccount was established), (ii) 125% of the average annual debt service on the Bonds (excluding any Bonds for which a Subaccount was established), or (iii) 10% of the proceeds of the Bonds (excluding any Bonds for which a Subaccount was established); provided, however, that the "Reserve Requirement"for the Bonds(excluding any Bonds for which a Subaccount was established)which are sold to the Authority through the IFA Program means the maximum annual debt service on the Bonds, the Prior Bonds, and any Parity Bonds (excluding any Bonds for which a subaccount was established). In this Ordinance,the term"Reserve Requirement"for the 2023 Bonds of each series means the least of: (i) the maximum annual debt service on the 2023 Bonds of such series, (ii) 125% of the average annual debt service on the 2023 Bonds of such Series, or (iii) 10% of the proceeds of the 2023 Bonds of such series; provided, however, that the "Reserve Requirement" for the 2023 Bonds of each series which are sold to the Authority through the IFA Program means the maximum annual debt service on the 2023 Bonds of such series, the 2009A Bonds and any Parity Bonds hereafter issued by the City. (g) Subject to Section XV(i) and Section XV(j)below, the City shall maintain in the Debt Service Reserve Account(excluding any Subaccounts)an amount equal to the Reserve Requirement for the Bonds (excluding any Bonds for which a Subaccount was established). Subject to Section XV(h)and Section XV(i)below,the City shall maintain in the Common Reserve Subaccount of the Debt Service Reserve Account for the 2023 Bonds or each series thereof an - 17 -