Authorizing Issuance of Revenue Bonds concerning construction of Improvements to Waterworks, not to exceed $2,050,000

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Therefore, the 1999 Bonds and BANS qualify for the exception in the Code from the disallowance of 100% of the deduction by financial institutions of interest expense allocable to newly acquired tax-exempt obligations. Notwithstanding any otherprovisions ofthis Ordinance, the foregoing covenants and authorizations (the "Tax Sections") which are designed to preserve the exclusion of interest on the 1999 Bonds from gross income under federal law (the "Tax Exemption")need not be complied with to the extent the City receives an opinion of nationally recognized bond counsel that compliance with such Tax Section is unnecessary to preserve the Tax Exemption. SECTION 25. Issuance of BANS; Other Actions. (a) The City, having satisfied all the statutory requirements for the issuance of the 1999 Bonds, has the authority to elect to issue a bond anticipation note or notes, repayable from the proceeds received from the sale of the 1999 Bonds (defined herein as the "BANs"). This Council hereby authorizes the issuance and sale of the BANS pursuant to I.C. §5-1-14-5 in one or more series, ranking on a parity with each other, in original aggregate principal amount not to exceed Two Million Fifty Thousand Dollars ($2,050,000) to provide interim financing until permanent financing becomes available and to pay for costs of issuing the BANS, and the BANS also may fund capitalized interest thereon. The designation of the BANs shall be "City of South Bend, Indiana Waterworks Bond Anticipation Note of 1999". The BANs shall be issued in fully registered form in denominations of One Dollar ($1.00) or integral multiples thereof, shall be originally dated the date of delivery, shall be numbered consecutively from 1 upward, shall mature not more than two (2) years from the date of issuance, may be renewed or extended from time to time, over a period not exceeding five (5) years from the date of the original issuance of the BANS, shall be prepayable on seven (7) days' notice in whole or in part in any authorized denomination without premium or penalty, shall bear interest at a rate not exceeding two and nine-tenths percent (2.9%) per annum (the exact rate or rates to be determined through negotiations with the purchaser of the BANs), and shall be sold at a discount not exceeding one percent (1 %) of the principal amount thereof. Interest on the BANS shall be payable at maturity. The BANS shall be issued pursuant to I.C. 13-18-13 if sold to the State of Indiana, pursuant to I.C. 5-1.5-8-6.1 if sold to the Indiana Bond Bank or pursuant to I.C. 5-1-14-5 if sold to a financial institution or any other purchaser. It shall not be necessary for the City to repeat the procedures for the issuance of the 1999 Bonds as the procedures followed before the issuance of the BANS are for all purposes sufficient to authorize the issuance of the 1999 Bonds and to use proceeds thereof to repay the BANS. The principal of the BANS herein authorized is payable solely from proceeds received from the sale of the 1999 Bonds, and the interest thereon may be paid from such proceeds or from the Net Revenues or a combination thereof, and the proceeds received by the City from the sale of the 1999 Bonds and such Net Revenues are hereby irrevocably pledged to the payment of the principal of and interest on the BANS. The Executive is hereby authorized to determine the form of the BANS and to execute the BANS, the Fiscal Officer is hereby authorized to have the BANS prepared, and to attest to the BANS and affix the seal the City or cause a facsimile of the seal of the City to be imprinted or impressed on the BANS. The Fiscal Officer is hereby authorized and directed to obtain the legal opinion as to the validity of the BANS from Barnes & Thornburg. After the BANs -28-