Preliminary Approval of the Issuance of Bonds for Noble Americas South Bend Ethanol, LLC

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227 W. JEFFERSON BOULEVARD SMITE 1400 S. SOUTH BEND, IN 46601 -1830 CITY OF SOUTH BEND PETE BUTTIGIEG, MAYOR COMMUNITY INVESTMENT SCOTT FORD, EXECUTIVE DIRECTOR May 20, 2015 Mr. Tim Scott, President South Bend Common Council 4111 Floor County -City Building South Bend IN 46601 Dear President Scott: PHONE: 574/235.9371 FAX: 574/235 -9021 Attached are the forms of Inducement Resolution for consideration by the Economic Development Commission and the Common Council relating to the Noble Americas Project. This resolution constitutes the initial action that the EDC and the Council will be required to take with respect to the proposed financing by Noble Americas. This resolution indicates that the Company is going to request that the EDC and the Council give preliminary approval to increase the issuance of revenue bonds. Previously, the EDC and Common Council approved an aggregate principal amount not to exceed $25,000,000. This resolution would allow the Company to increase a revenue bond issuance to an aggregate principal amount not to exceed $50,000,000. The proceeds would be used for the improvements as described in the resolution and are applicable to portions of the project at the Ethanol Plant that would qualify for tax - exempt pollution control facility bond financing. In order for the Company to qualify for tax - exempt financing, the governmental issuer must issue revenue bonds and loan the proceeds from the sale of the bonds to the Company. The City, through Indiana Code 36 -7 -12, would serve as the conduit issuer of the bonds and loan the proceeds following the issuance thereof to the Company for expenditure on qualifying project costs. The Company would have sole responsibility for paying the debt service on the bonds. As evidenced in the resolutions, the City's credit rating would not be affected by the issuance of these bonds, the City would bear no responsibility to pay the debt service on the bonds, and in the event of a default by the Company, and only the Company would bear the risk of that default. Once the issuance process has been completed, the City would have no involvement with the bonds or the payment of the debt service on the bonds. Typically, these bonds are secured by a bank letter of credit in which the bank would make payments on the bonds in the event the Company failed to do so. At such time, the bank would then seek reimbursement from the Company under the letter of credit reimbursement agreement. Alternatively, it is possible these bonds may be purchased directly by a bank which would take security interests in the Company and/or the project financed. PLANNING NEIGHBORIIOOD ENGAGEMENT BUSINESS DEVELOPMENT ECONOMIC RESOURCES JITIN KAIN PAMELA C. MEYER CHRIS FIELDING BROCK ZEEB �I'