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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t the City the City Funds, plus interest at a rate of three percent (3.00%) per annum (the "City Obligation"), from TIF Revenues of the Area in excess of those necessary to meet the Commission's obligations with respect to the Bonds set forth in the Bond Resolution. Interest shall be payable annually on February 1 and August 1 of each year commencing February 1, 2009 and shall be calculated based upon athirty-day (30-day) month and three hundred sixty day (360-day) year. Principal payments shall be made on the dates and in the amounts set forth on the schedule attached hereto as Appendix I (the "Debt Service Schedule"). The City Obligation shall be guaranteed by the Developer and DRP in accordance with Section II(D). The City Obligation shall be junior and subordinate to the Bonds with respect to pledge of TIF Revenues from the Area and the principal of the City Obligation shall not be scheduled to be paid until after the Bonds are scheduled to be repaid. The Debt Service Schedule shall be developed after the sale of the Bonds and provide for the City Obligation's repayment as allowable under the terms of this Agreement and under the projected TIF Revenues for the Area with additional coverage of ten percent (10%), as reflected on the consultant's report prepared for the Bonds, but rounded down to the nearest Five Thousand Dollar ($5,000) Denomination. In addition to the City Obligation, the Commission will reimburse the City for additional financing charges (including additional interest) related to the City Obligation amounting to an additional two and one-half percent (2.5%) of the principal amount of the City Obligation (collectively, the "Additional Financing Charges") with available TIF Revenues of the Area after the Commission has satisfied in full the City Obligation. The City will also expend the Utility Funds on the Project. D. Developer and DRP Obligations Re~ardin~ City Obligation. The Developer and DRP, each hereby guaranty, joint and severally, to pay the debt service payments on the City Obligation (but not the Additional Financing Charges or the Utility Funds), to the extent that TIF Revenues are insufficient for such purpose until the Investment Threshold (as defined in Section II(E)) is met provided that no principal payment be scheduled on the City Obligation until after the Bonds are scheduled to be paid off. Developer and DRP (collectively referred to herein as the "Guarantor") hereby recognize and acknowledge that the City Obligation will be junior and subordinate to Commission's obligations with respect to the Bonds as set forth in the Bond Resolution. In the event that the Commission determines that available TIF Revenues are insufficient to meet the debt service payment on the City Obligation, the Commission shall notify the Guarantor of the deficiency of the available TIF Revenues, and the Guarantor shall place on deposit with the Commission the amount necessary for the Commission to meet its debt service on the City Obligation after the application of the available TIF Revenues in accordance • 6