No. 2394 approving a Development Agreement with Douglas Road Retail Partners L.P., Douglas Road Partners L.P. and the City of South Bend, Indiana and other related matters

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~~ ~_ J interest) for a draw on the debt service reserve fund. After the debt service reserve has been fully funded to the Debt Service Reserve Amount, any excess available TIF Revenues will first be used to pay the City interest on the City Obligation (as calculated in accordance with Section II(C) and then be used to build a reserve in the Area's general account of One Hundred Thousand Dollars ($100,000.00) for the benefit of the holders of the Bonds and available for paying debt service on the Bonds is no other funds are available for such purpose (which reserve will be yield restricted to the arbitrage yield of the Bonds) (the "General Account Reserve"). The Commission's obligations set forth in this paragraph are as set forth in Resolution No. 2390 adopted by the Commission on November 8, 2007 (the "Bond Resolution"), and to the extent this section is inconsistent with the Bond Resolution, the Bond Resolution shall control. B. Developer Bond Obligations. The Developer shall secure and pledge a letter of credit from Wells Fargo Bank, N.A. or similar consideration to act as a debt service reserve for the Bonds, for the benefit of the holders of the Bonds and in a form acceptable to the holders of the Bonds (the "Debt Service Reserve Obligation"). The security must be sufficient to secure an anticipated interest rate of approximately five and three-quarters percent (5.75%) on the Bonds. The Debt Service Reserve Obligation shall be equal to the least of the following: (i) the maximum annual debt service on the bonds, or (ii) one and one-quarter (1'/4) times the average annual debt service on the Bonds, or (iii) ten percent (10%) of the proceeds of the Bonds within the meaning of Section 148(d) of the Internal Revenue Code of 1986, as amended (the "Code") (the "Debt Service Reserve Amount"). Subject to the provisions of the following sentence, the Developer and DRP, each individually, agree to continue to maintain said security until the Bonds are retired or until sufficient funds are placed on deposit with the Commission or the registrar and paying agent of the Bonds to replace said Debt Service Reserve Obligation. Neither the Developer nor the DRP are obligated to replenish the debt service reserve fund (or any security fulfilling the Debt Service Reserve Obligation) in the event that a draw is made on the debt service reserve fund (or any security fulfilling the Debt Service Reserve Obligation). If the Developer desires to purchase a security to fulfill its Debt Service Reserve Obligation, the Developer shall reduce principal amount of the security, if and when necessary, to insure that the security does not cause the debt service reserve to exceed the Debt Service Reserve Amount, as such amount is determined under the Code and its accompanying regulations. C. City Obligation. The Board hereby commits to using an amount not to exceed One Million and 00/100 Dollars ($1,000,000.00) appropriated by the South Bend Common Council Ordinance No. 9801-07 for the Project (the "City Funds"). In consideration for inducing the City's use of the City Funds for the Project, the Commission hereby commits to reimbursing •