Supporting and Amend Ordinance No. 8318-92, as amended by ordinance 8419-93, Additions and Improvements to Waterworks

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The State has reviewed this supplemental ordinance and has approved and consented in writing to supplementing and amending the 2000 Bonds and the 2000 Ordinance as provided herein, in accordance with Section 3.02A(c) of the Finance Assistance Agreement: NOW THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BENDS INDIANA AS FOLLOWS: SECTION 1. SUPPLEMENT AND AMENDMENT TO ORDINANCES -SINKING FUND. Section 15 of the 1992 Ordinance, as amended by Section 1 of the 1993 Ordinance, more specifically Ordinance No. 8318-92, as amended by Ordinance No. 8419-93; Section 14 of the 1997 Ordinance, more specifically Ordinance No. 8801-97; Section 14 of the 2000 Ordinance, more specifically Ordinance No. 9095-00; and Section 14 of the 2001 Ordinance, more specifically Ordinance No. 9247-01 are hereby supplemented and amended by adding the following paragraphs to each section: "As an alternative to holding the Reserve Requirement in the Debt Service Reserve Account in cash funds, the City may purchase one or more insurance policies to provide for payment of principal and interest on the Bonds in the event that funds in the Bond and Interest Account are insufficient to pay the principal and interest on the Bonds when due. To the extent that the Bonds are insured, and the insurance policy to be deposited into the Debt Service Reserve Account is not being provided by the insurer of such Bonds, such insurance policy shall be subject to the insurer's prior written consent. In the event a draw is made against the Debt Service Reserve Account insurance policy(s) (the "Reserve Policy") the City shall repay the amount of the draw and related expenses incurred by the issuer(s) of the Reserve Policy (the "Insurer") together with interest thereon at the rate specified in the Reserve Policy and/or the related Reserve Policy Agreement (as defined below). The repayment of the draw amount, related expenses and accrued interest (the "Policy Costs") shall be paid from the funds that would have been set aside above to replenish the Debt Service Reserve Account. Repayment of the Policy Costs shall commence in the first month following each draw, in an amount equal to no less than one twelfth (1/12) of the aggregate Policy Costs related to such draw ("Monthly Installments"). Each Monthly Installment shall be deposited by the City into the Debt Service Reserve Account, and then payments shall be made from the Debt Service Reserve Account to pay Policy Costs. If and to the extent cash has been deposited to the Debt Service Reserve Account (other than Monthly Installments to pay Policy Costs), all such cash (or permitted investments) shall be used prior to any drawing under the Reserve Policy and repayment of any Policy Costs under the Reserve Policy, and repayment of any Policy Costs shall be made prior to replenishment of any such cash amounts. -3-