Authorizing the Issurance $7,800,000 Economic development Revenue Notes

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ORDINANCE NO. AN ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $7,800,000 ECONOMIC DEVELOPMENT REVENUE NOTES OF THE CITY OF SOUTH BEND, INDIANA, FOR THE PURPOSE OF MAKING A LOAN TO BRETHREN CARE OF SOUTH BEND, INC. IN ORDER TO FINANCE CERTAIN COSTS OF ACQUISITION AND CONSTRUCTION OF CERTAIN ECONOMIC DEVELOPMENT FACILITIES; IN ORDER TO PARTIALLY REFUND CERTAIN OUTSTANDING REVENUE BONDS OF THE CITY OF SOUTH BEND, INDIANA; AUTHORIZING EXECUTION OF A LOAN AGREEMENT; PROVIDING FOR THE DELIVERY OF.A PROMISSORY NOTE AND THE ASSIGNMENT THEREOF AS SECURITY FOR SAID NOTES; AND AUTHORIZING AN INDENTURE OF TRUST. BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: Section 1. Preliminary Statement. The following recitals establish the background for the financing authorized hereby: (a) The City of South Bend, Indiana (hereinafter called the "City "), by virtue of Indiana Code 36 -7 -12, as amended (hereinafter called the "Act "), is authorized and empowered to make direct loans to users for the purpose of financing economic development facilities as defined in the Act to overcome insufficient employment opportunities and insufficient diversification of business, commerce and industry in and near the City and to issue its economic development revenue bonds to obtain funds to make such loan and to secure said bonds pursuant to an indenture of trust by the pledge of a mortgage of the user. (b) The City by virtue of the Act is authorized and enpowered to issue its revenue bonds to refund all or any part of outstanding revenue bonds issued under the Act. (c) Brethren Care of South Bend, Inc. (the "Company "), a nonprofit corporation organized and existing under and by virtue of the laws of Indiana, has incurred certain indebtedness, with respect to which it is in default, to pay a portion of the cost of acquisition and construction of a residential retirement community (the "Project ") which is a health facility licensed and regulated by the Indiana Health Facilities Council under Indiana Code 16 -10 -4 and by virtue thereof an "economic development facility" as defined in the Act. (d) To finance a portion of the cost of acquisition of the Project the City issued $8,000,000 of its Economic Development Revenue Bonds, Series A (Brethren Care of South Bend, Inc. Project), dated October 1, 1978 (the "Series A Bonds ") and there currently exist defaults in the payment of principal of and interest on the Series A Bonds. (e) The Project is located in the City and will further the purposes and policies of the Act by maintaining employment opportunities and diversification of business, commerce and trade in and near the City. (f) The City proposes to loan to the Company the proceeds of sale of the revenue notes hereinafter authorized pursuant to the loan payment approved in Section 6 hereof (the "Loan Agreement "), and the Company has agreed to make payments on its promissory note (the "Promissory Note ") evidencing its loan obligation in an amount sufficient to pay the principal of and interest and premium, if any, on such revenue notes. (g) The South Bend Economic Development Commission (the "Commission "), which is functioning and operating under the Act, (1) has found by written resolution that because of existing insufficient employment opportunities and insufficient diversification of business, commerce and industry, the economic