Approving Economic Development Bonds - South Bend Forge Inc

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The Series 1980 Bonds are issued pursuant to the Constitution and to the laws of the State, particularly Indiana Code of 1971, Title 18, Article 6, Chapter 4.5 and the authorities therein mentioned, and an ordinance duly passed by the Issuer. The Bonds are special obligations of the Issuer, and the principal of and interest and any premium on the Bonds (hereinafter collectively called "Bond service charges) are payable solely from, and such payment is secured by a pledge of an lien on, the Bond Fund established by and as provided in the Indenture and the "Pledged Receipts" as defined and as provided for in the Indenture (being, generally, the payments and other amounts payable under the Agreement and the income and profit from the invest- ment of such payments), and are not otherwise an obligation of the Issuer. The Bonds do not represent or constitute a debt, liability or general obliga- tion of the Issuer, the State or any political subdivision thereof, or a pledge of the faith and credit or taxing power of the Issuer or of the State or of any such political subdivision. Payments sufficient for the prompt payment when due of the Bond service charges is required by the Agreement to be paid by the Company to the Trustee for the account of the Issuer and deposited in a special account created by the Issuer and designated "City of South Bend - South Bend Forge, Inc. Revenue Bond Fund ", and have been duly pledged for that purpose. The Series 1980 Bonds are issuable as fully registered bonds in denominations of $20,000 and any integral multiple thereof. This Bond is transferable by the registered holder hereof in person or by his attorney duly authorized in writing at the corporate trust office of the Trustee as Bond Registrar, upon presentation hereof to the Trustee, all subject to the terms and conditions provided in the Indenture. The holder hereof agrees with the Company not to transfer this Bond without obtaining the prior written consent hereon of any such transferee, whereby such transferee accepts the terms and conditions hereof. This Bond is subject to mandatory redemption upon a final determination that, interest on the Series 1980 Bonds is wholly includable for Federal income tax purposes in the gross income of the holders of the Series 1980 Bonds (other than because a holder is a "substantial user" of the Project or a "related person ", as those terms are used in Section 103(b)(9) of the Internal Revenue Code of 1954). As used herein, "final determination" shall be deemed to have occurred upon the receipt by the Trustee of a ruling or technical advice by the Internal Revenue Service in which the Company has participated or a written opinion by any attorney or firm of attorneys of recognized standing on the subject of municipal bonds selected by the Trustee, and approved by the Company, which approval shall not be unreasonably withheld. Following such final determination the Series 1980 Bonds shall be redeemed in whole by the Issuer at a redemption price of 100% of the aggregate principal amount outstanding, plus accrued interest, at the earliest practicable date selected by the Trustee, after consultation with the Company, but in no event later than 180 days following the Trustee's notification of such final determination. In the event that such redemption is a result of the Company's failure to observe its agreement in Section 6.4 of the Agreement, the redemption price shall be increased by an additional amount equal to 10% of the aggregate principal amount of the Series 1980 Bonds outstanding at the time of such failure. This Bond and any principal installment hereof is subject to optional redemption at the request of the Company prior to the date due and payable on any interest payment date from and after issuance. If called for redemption the entire outstanding balance of the principal sum of this Bond or any install- ment of principal shall be subject to redemption by the Issuer on any interest payment date, at a redemption price of 100% of the principal amount to be so redeemed, plus accrued interest to the redemption date. If less than all of the outstanding Series 1980 Bonds are called for redemption at one time, the Series 1980 Bonds or portions of fully registered Series 1980 Bonds shall be called on a pro rate basis among the bondholders shall be in inverse order of principal installments due. - 3 -