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Home My WebLink About10052-10 Sewage Works Revenue BondsORDINANCE No. ,oos~,o Passed by the Common Council of the City of South Bend, Indiana November 8, Attest: Attest: Presented by me to the Mayor of the City of Sorrtla Bend, Indiana November 9, 20 10 City Clerk President of Common Council City Clerk Approved and signed by me d`~ `~~Y'~' ~ q 20 ~~ ~ ~~ •r~ ~~ ~ ~,~`-~-c~t- p May~vr 20 10 ORDINANCE NO. ~, ~~ S ~ -~~ AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA AUTHORIZING THE ACQUISITION, CONSTRUCTION AND INSTALLATION OF CERTAIN ADDITIONS, EXTENSIONS AND IMPROVEMENTS TO THE CITY'S SEWAGE WORKS, THE ISSUANCE AND SALE OF ADDITIONAL REVENUE BONDS TO PROVIDE FUNDS FOR THE PAYMENT OF THE COSTS THEREOF, AND THE COLLECTION, SEGREGATION AND DISTRIBUTION OF THE REVENUES OF SUCH SEWAGE WORKS AND OTHER RELATED MATTERS STATEMENT OF PURPOSE AND INTENT The City of South Bend, Indiana (the "City"), presently owns and operates a sewage works by and through its Board of Public Works (the "Board") for the collection and treatment of sewage and other wastes (the "Sewage Works" or the "Works"), pursuant to the provisions of Indiana Code 36-9-23, as amended (the "Act''). The Board has determined and recommended to the Common Council of the City (the "Common Council") that certain additions, extensions and improvements to the Sewage Works, as described herein, are necessary. The Board has employed McCormick Engineering, LLC, Lawson-Fisher Associates, P.C., Jones and Henry Engineers, Ltd., The Troyer Group, Inc., Gary A. Gilot and Carl P. Littrell as professional engineers (the "Engineers"), to prepare and file plans, specifications, and detailed descriptions and estimates of the costs of the necessary .additions, extensions and improvements to the Sewage Works, which plans, specifications, descriptions and estimates, to the extent required by law, have been duly submitted to and approved or will be approved by all governmental authorities having jurisdiction thereover (the improvements and extensions to the Sewage Works as described in the Engineers' plans and specifications and below are referred to herein as the "Project"), including; without limitation, the Indiana Department of Environmental Management (the "Department"). The Common Council finds that the estimates prepared and delivered by the Engineers with respect to the costs (as defined in Indiana Code 36-9-23-11) of acquisition, construction and installation of such improvements and extensions to the Sewage Works, and including all authorized costs relating thereto, including the costs of issuance of bonds on account of the financing of all or a portion thereof, will be in the estimated amount not to exceed Nine Million Three Hundred Forty-Five Thousand and 00/100 Dollars ($9,345,000.00). The Common Council finds that to provide funds necessary to pay for the costs of the Project, it will be necessary for the City to issue sewage works revenue bonds in an amount not to exceed Nine Million Three Hundred Forty-Five Thousand and 00/100 Dollars ($9,345,000.00). Pursuant to Ordinance No. 8919-98 adopted by the Common Council on June 22, 1998 (the "1998 Ordinance"), the City has heretofore issued revenue bonds payable from the Net Revenues (as defined below) of the Sewage Works, such bonds being designated as "Sewage Works Refunding Revenue Bonds of 1998" (the "1998 Bonds"), outstanding after December 1, 2009, in the amount of $13,590,000, and maturing on December 1, 2018. Pursuant to Ordinance No. 9523-04 adopted by the Common Council on August 10, 2004 (the "2004 Ordinance"), the City has heretofore issued sewage works bonds payable from the Net Revenues of the Sewage Works, designated as "Sewage Works Revenue Bonds of 2004'' (the "2004 Bonds"), outstanding after December 1, 2009, in the amount of $9,380,000, and maturing on December 1, 2024 Pursuant to Ordinance No. 9672-06 adopted by the Common Council on April 11, 2006, as amended by Ordinance No. 9767-07 adopted by the Common Council on June 25, 2007 (collectively, the "2006 Ordinance"), the City has heretofore issued revenue bonds payable from the Net Revenues of the Sewage Works, such bonds being designated as (i) "Sewage Works Revenue Bonds of 2006" (the "2006 Bonds"), outstanding after December 1, 2009, in the amount of $7,345,000, and maturing on December 1, 2026; (ii) "Sewage Works Revenue Bonds of 2007" (the "2007 Bonds"), outstanding after December 1, 2009, in the amount of $15,500,000, and maturing on December 1, 2027; and (iii) "Sewage Works Revenue Bonds of 2007 B" (the " 2007B Bonds"), outstanding after December 1, 2009, in the amount of $15,425,000, and maturing on December 1, 2027. Pursuant to Ordinance No. 9951-09 adopted by the Common Council on August 10, 2009, as amended by Ordinance No. 9971-09 adopted by the Common Council on October 26, 2009 (collectively, the "2009 Ordinance" and with the 1998 Ordinance, the 2004 Ordinance and the 2006 Ordinance, the "Prior Ordinances"), the City has heretofore issued revenue bonds payable from the Net Revenues of the Sewage Works, designated as "Sewage Works Revenue Bonds of 2009" (the "2009 Bonds" and with the 1998 Bonds, 2004 Bonds, 2006 Bonds, 2007 Bonds, 2007B Bonds and 2009 Bonds, the "Prior Bonds"), outstanding after December 1, 2009, in the amount of $3,297,000, and maturing on December 1, 2028. The Prior Ordinances permit the issuance of additional revenue bonds ranking on a parity basis with the Prior Bonds for the purpose of financing the costs of future additions, extensions and improvements to the Sewage Works, so long as certain conditions are met. Crowe Horwath LLP, Financial Advisor to the City (the "Financial Advisor"), has been employed by the Board for the purpose of analyzing the records and finances of the Sewage Works, and has submitted preliminary evidence and findings demonstrating compliance with the conditions set forth in the Prior Ordinances for the issuance of additional revenue bonds payable out of the revenues of the Sewage Works and ranking on a parity with the Prior Bonds. Subject to the provisions of the immediately preceding paragraph, this Council now finds that all conditions precedent to the adoption of an ordinance, authorizing the issuance of additional bonds ranking on a parity with the Prior Bonds for the purpose of financing the cost of the Project and the authorized costs relating thereto, have been complied with in accordance with the provisions of the Prior Ordinances and the Act. The Common Council consequently seeks to authorize the issuance of revenue bonds to finance the acquisition, construction and installation of the Project pursuant to the Act and the sale of such revenue bonds at public sale pursuant to the provisions of Indiana Code 5-1-11, subject to and dependent upon the terms and conditions hereinafter set forth. -2- NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: SECTION 1. Acquisition Construction and Installation of the Project. The City, acting by and through the Board and as the owner and operator of the Sewage Works for the collection and treatment of sewage and other wastes, hereby orders, authorizes and directs the Board to proceed with the acquisition, construction and installation of additions, extensions and improvements to the Sewage Works, pursuant to the Act and in accordance with the plans, specifications and cost estimates prepared and filed with the Board by the Engineers, which plans, specifications and cost estimates are hereby adopted and approved and, by reference, incorporated fully into this Ordinance, and two copies of which are now on file in the office of the Board and are open for public inspection. The actions of the Board in connection with the acquisition, installation, and financing of such improvements to the Sewage Works are hereby authorized, approved, ratified and confirmed. Where used in this Ordinance, the term "City" shall be construed also to include any department, board, commission or officer or officers of the City or of any City department, board or commission. The terms "Sewage Works," "sewage works," "works" and similar terms used in this Ordinance shall be construed to mean and include the existing structures and property of the Sewage Works and all enlargements, improvements, extensions and additions thereto, and replacements thereof, now or subsequently constructed or acquired, from the proceeds of the bonds authorized herein or otherwise. Such additions, extensions and improvements shall be constructed and the bonds herein authorized shall be issued pursuant to the provisions of this Ordinance and the Act. SECTION 2. Description of the Project. The Project consists of the improvements described in Appendix A attached hereto and incorporated herein. The City, acting by and through the Board, shall proceed with the acquisition, construction and installation of the Project and shall enter into all contracts necessary or appropriate for such purpose, in conformity with and subject to the requirements and conditions set forth in this Ordinance and in the Act and in accordance with the plans and specifications previously prepared for and on behalf of the City. SECTION 3. Authorization for Bonds. In accordance with the Act and for the purpose of providing funds with which to pay the costs of the Project, together with all authorized costs relating thereto including the costs of the issuance of the 2010 Bonds (defined below) on account thereof, the City shall issue and sell its sewage works revenue bonds, in one or more series, in an amount not to exceed Nine Million Three Hundred Forty-Five Thousand Dollars ($9,345,000), to be designated "Sewage Works Revenue Bonds of 2010" (the "2010 Bonds"). Such 2010 Bonds shall be signed in the name of the City by the manual or facsimile signatures of the Mayor of the City (the "Mayor") and the Controller of the City (the "Controller") and attested by the Clerk of the City (the "Clerk"), who shall affix the seal of the City to each of the 2010 Bonds manually or shall have the seal imprinted or impressed thereon by facsimile or other means. In case any officer whose signature appears on the 2010 Bonds shall cease to be such officer before the delivery of such 2010 Bonds, such signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in office until delivery thereof. The 2010 Bonds shall -3- also be authenticated by the manual signature of the Registrar (as defined below). Subject to the provisions of this Ordinance regarding the registration of the 2010 Bonds, the 2010 Bonds shall be fully negotiable instruments under the laws of the State of Indiana (the "State"). Any other provisions of this Ordinance to the contrary notwithstanding, the 2010 Bonds shall be issued on a parity with the outstanding Prior Bonds, and none of the provisions of this Ordinance shall be construed to affect the rights of the holders of the outstanding Prior Bonds. The Board shall instruct the Financial Advisor to perform any and all computations necessary to confirm the preliminary evidence and findings demonstrating compliance with the conditions set forth in the Prior Ordinances for issuance of additional revenue bonds on parity with the outstanding Prior Bonds. The City shall not issue the 2010 Bonds without first receiving a certificate from the Financial Advisor in form and substance satisfactory to the Controller regarding compliance with certain conditions set forth in the Prior Ordinances for the issuance of additional revenue bonds on parity with the outstanding Prior Bonds. The 2010 Bonds shall be on a parity with the Prior Bonds, and shall be sold at a price not less than 99% of the par value thereof, shall be issued in fully registered form in denominations of Five Thousand Dollars ($5,000) or any integral multiple thereof, shall be numbered consecutively from R-1 up, shall be originally dated as of the first day of the month in which the 2010 Bonds are sold or as otherwise determined by the Controller, and shall bear interest at a rate or rates not exceeding eight percent (8.0 %) per annum (the exact rate or rates to be determined pursuant to Section 8 hereof) payable on the first (1st) day of June and December in each year, following the original date of the 2010 Bonds as determined by the Controller, with the advice of the Financial Advisor and as set forth in the notice of intent to sell bonds or notice of bond sale as set forth in Section 8 herein. Interest shall be calculated on the basis of a 360-day year comprised of twelve 30-day months. The 2010 Bonds shall mature annually on December 1 as finally determined by the Mayor and the Controller with the advice of the Financial Advisor and as set forth in the notice of intent to sell referred to herein and as evidenced by delivery of the executed initial issue of the 2010 Bonds to the Registrar for authentication; provided that the original aggregate principal amount does not exceed the amount authorized above, and that the final maturity shall. be no later than December 1, 2030. All payments of interest on the 2010 Bonds shall be paid by check or draft mailed one business day prior to the interest payment date to the registered owners thereof as of the fifteenth (15th) day of the month preceding the interest payment date at the addresses as they appear on the registration books kept by the Registrar (the "Registration Record") or at such other address as is provided to the Paying Agent (as defined below) in writing by such registered owner. All principal payments and premium, if any, on the 2010 Bonds shall be made upon surrender thereof at the principal corporate trust office of the Paying Agent in any coin or currency of the United States of America which on the date of such payment shall be legal tender for the payment of public and private debts. Interest on 2010 Bonds shall be payable from the interest payment date to which interest has been paid next preceding the authentication date thereof unless such 2010 Bonds are authenticated after the fifteenth (15th) day of the month preceding an interest payment date and on or before such interest payment date in which case they shall bear interest from such interest payment date, or unless authenticated on or before the fifteenth (15th) day of the month -4- immediately preceding the first interest payment date, in which case they shall bear interest from the original date, until the principal shall be fully paid. The 2010 Bonds and any bonds ranking on a parity therewith, as to principal, premium and interest, shall be payable from and are hereby secured by an irrevocable pledge of and shall constitute a charge upon all the Net Revenues, herein defined as the gross revenues of the Sewage Works after deduction only for payment of the reasonable expenses of operation, repair and maintenance but not including depreciation and payments in lieu of taxes (the "Net Revenues"), of the Sewage Works of the City, which bonds constitute a first charge on said Net Revenues. The City shall not be obligated to pay said bonds or the interest or premium, if any, thereon except from the Net Revenues of the Works, and said bonds shall not constitute an indebtedness of the City within the meaning of the provisions and limitations of the constitution of the State of Indiana. Each 2010 Bond shall be transferable or exchangeable only upon the Registration Record by the Registrar, by the registered owner thereof in person, or by his attorney duly authorized in writing, upon surrender of such 2010 Bond together with a written instrument of transfer or exchange satisfactory to the Registrar duly executed by the registered owner or his attorney duly authorized in writing, and thereupon a new fully registered bond or bonds in the same aggregate principal amount, and of the same maturity, shall be executed and delivered in the name of the transferee or transferees or the registered owner, as the case may be, in exchange therefor. The costs of such transfer or exchange shall be borne by the City, except for any tax or governmental charge required to be paid in connection therewith, which shall be payable by the person requesting such transfer or exchange. The City, Registrar and Paying Agent may treat and consider the persons in whose name such 2010 Bonds are registered as the absolute owners thereof for all purposes including for the purpose of receiving payment of, or on account of, the principal thereof and interest and premium, if any, due thereon. In the event any 2010 Bond is mutilated, lost, stolen or destroyed, the City may execute and the Registrar may authenticate a new bond of like date, maturity and denomination as that mutilated, lost, stolen or destroyed, which new bond shall be marked in a manner to distinguish it from the bond for which it was issued, provided that, in the case of any mutilated bond, such mutilated bond shall first be surrendered to the Registrar, and in the case of any lost, stolen or destroyed bond there shall be first furnished to the Registrar evidence of such loss, theft or destruction satisfactory to the City and the Registrar, together with indemnity satisfactory to them. In the event any such bond shall have matured, instead of issuing a duplicate bond, the City and the Registrar may, upon receiving indemnity satisfactory to them, pay the same without surrender thereof. The City and the Registrar may charge the owner of such 2010 Bond with their reasonable fees and expenses in this connection. Any bond issued pursuant to this paragraph shall be deemed an original, substitute contractual obligation of the City, whether or not the lost, stolen or destroyed 2010 Bond shall be found at any time, and shall be entitled to all the benefits of this Ordinance, equally and proportionately with any and all other 2010 Bonds issued hereunder. -5- SECTION 4. Terms of Redemption. (a) The Mayor and the Controller, upon consultation with the Financial Advisor, may designate maturities of the 2010 Bonds (or a portion thereof in integral multiples of $5,000 of principal amount each) that shall be subject to optional redemption and/or mandatory sinking fund redemption, and the corresponding redemption dates, amounts and prices (including premium, if any). Except as otherwise set forth in this Ordinance, the Mayor and the Controller, upon consultation with the Financial Advisor, is hereby authorized and directed to determine the terms governing any such redemption, provided that any redemption premium shall not exceed two percent (2%) of the par amount of the 2010 Bonds to be redeemed. (b) Notice of redemption shall be given not less than 30 days prior to the date of redemption and shall be mailed by first-class mail or by registered or certified mail to the address of each registered owner of a 2010 Bond to be redeemed as shown on the Registration Record 45 days prior to the date fixed for redemption, except to the extent such redemption notice is waived by owners of 2010 Bonds redeemed; provided, however, that failure to give such notice by mailing, or any defect therein, with respect to any 2010 Bond shall not affect the validity of any proceedings for the redemption of any other 2010 Bonds. The notice shall specify the date and place of redemption, the redemption price and the CUSIP numbers of the 2010 Bonds called for redemption. The place of redemption may be determined by the City. Interest on the 2010 Bonds so called for redemption shall cease on the redemption date fixed in such notice if sufficient funds are available at the place of redemption to pay the redemption price on the date so named, and thereafter, such 2010 Bonds shall no longer be protected by this Ordinance and shall not be deemed to be outstanding hereunder, and the holders thereof shall have the right only to receive the redemption price. (c) The 2010 Bonds may be subject to mandatory sinking fund redemption as set forth herein. At the option of the successful bidder for each series of the 2010 Bonds, all or a portion of the 2010 Bonds of a particular series may be aggregated into one or more term bonds payable from mandatory sinking fund redemption payments (the "Term Bonds") required to be made as set forth below. The Term Bonds shall have a stated maturity or maturities on December 1 of the years in which the 2010 Bonds are outstanding as determined pursuant to Section 3 hereof or as determined by the successful bidder. In the event that the successful bidder opts to aggregate certain 2010 Bonds into Term Bonds, such Term Bonds shall be subject to mandatory sinking fund redemption prior to maturity at a redemption price equal to 100% of the principal amount thereof, plus accrued interest to the redemption date, but without premium, on December 1 of each year and in the principal amounts corresponding to and consistent with the maturity schedule for the 2010 Bonds set forth in the bond sale notice. The Registrar and Paying Agent shall credit against the current mandatory sinking fund requirement for a Term Bond of a particular maturity, any 2010 Bonds of such maturity delivered to the Registrar and Paying Agent for cancellation or purchased for cancellation by the Registrar and Paying Agent and cancelled by the Registrar and Paying Agent and not theretofore applied as a credit against any mandatory sinking fund requirement. Each 2010 Bond so delivered or purchased shall be credited by the Registrar and Paying Agent at 100% of the -6- principal amount thereof against the mandatory sinking fund redemption requirements for the applicable Term Bond in order of mandatory sinking fund redemption (or final maturity) dates determined by the Clerk, and the principal amount of such Term Bond to be redeemed on such mandatory sinking fund redemption dates by operation of the mandatory sinking fund requirements shall be reduced accordingly; provided, however, the Registrar and Paying Agent shall only credit 2010 Bonds against the mandatory sinking fund requirements to the extent such 2010 Bonds are received on or before 45 days preceding the applicable mandatory sinking fund redemption date. The Registrar shall determine by lot (treating each $5,000 principal amount of each 2010 Bond as a separate 2010 Bond for such purpose) the 2010 Bonds within a Term Bond of a particular maturity to be redeemed pursuant to the mandatory sinking fund redemption requirements on December 1 of each year. Notice of any such mandatory sinking fund redemption shall be given in the same manner as notice of optional redemption is required to be given pursuant to this Section 4 of this Ordinance. If 2010 Bonds are to be redeemed by optional redemption and mandatory sinking fund redemption on the same date, the Registrar shall select by lot the 2010 Bonds for optional redemption before selecting the 2010 Bonds by lot for the mandatory sinking fund redemption. In the event any of the 2010 Bonds are issued as Term Bonds, the form of the 2010 Bond set forth in Appendix B to this Ordinance shall be modified accordingly. Any reference to payment of principal on the 2010 Bonds shall include payment of scheduled mandatory sinking fund redemption payments described in this Section 4. (d) All 2010 Bonds which have been redeemed shall be canceled and shall not be reissued; provided, however, that one or more new registered 2010 Bonds shall be issued for the unredeemed portion of any 2010 Bond without charge to the holder thereof. (e) No later than the date fixed for redemption, funds shall be deposited with the Paying Agent to pay, and the Paying Agent is hereby authorized and directed to apply such funds to the payment of, the 2010 Bonds or portions thereof called for redemption, including accrued interest thereon to the redemption date. No payment shall be made upon any 2010 Bond or portion thereof called for redemption until such 2010 Bond shall have been delivered for payment or cancellation or the Registrar shall have received the items required by this Ordinance with respect to any mutilated, lost, stolen or destroyed 2010 Bond. SECTION 5. Appointment of Registrar and Payin A ent. The Controller is hereby authorized to appoint a registrar and a paying agent for the 2010 Bonds ("Registrar" or "Paying Agent"). The Registrar is hereby charged with the responsibility of authenticating the 2010 Bonds, and shall keep and maintain books for the registration and transfer of the 2010 Bonds. The Mayor is hereby authorized to enter into such agreements or understandings with any institution serving as Registrar and Paying Agent as will enable the institution to perform the services required of the- Registrar and Paying Agent. The Controller is authorized to pay such fees as the institution may charge for the services it provides as Registrar and Paying Agent, and -7- such fees may be paid as fiscal agency charges from the Sinking Fund described herein to pay the principal of and interest on the 2010 Bonds. The Registrar and Paying Agent may at any time resign as Registrar and Paying Agent by giving thirty (30) days written notice to the City and by first-class mail to each registered owner of the 2010 Bonds then outstanding, and such resignation will take effect at the end of such thirty (30) days or upon the earlier appointment of a successor Registrar and Paying Agent by the City. Such notice to the City may be served personally or be sent by registered mail. The Registrar and Paying Agent may be removed at any time as Registrar and Paying Agent by the City, in which event the City may appoint a successor Registrar and Paying Agent. The City shall notify each registered owner of the 2010 Bonds then outstanding by first-class mail of the removal of the Registrar and Paying Agent. Notices to registered owners of the 2010 Bonds shall be deemed to be given when mailed by first-class mail to the addresses of such registered owners as they appear on the bond register. Any predecessor Registrar and Paying Agent shall deliver all the 2010 Bonds and cash in its possession and the bond register to the successor Registrar and Paying Agent. At all times, the same entity shall serve as Registrar and as Paying Agent. SECTION 6. Form of Bonds. The form and tenor of the 2010 Bonds shall be substantially as set forth in Appendix B, with all blanks to be filled in properly and all necessary additions and deletions to be made prior to delivery thereof. SECTION 7. Authorization for Book-Entr,~, sy tem. The 2010 Bonds may, in compliance with all applicable laws, initially be issued and held in book-entry form on the books of the central depository system, The Depository Trust Company, its successors, or any successor central depository system appointed by the City from time to time (the "Clearing Agency"), without physical distribution of 2010 Bonds to the purchasers. The following provisions of this section apply in such event. One definitive 2010 Bond of each maturity shall be delivered to the Clearing Agency (or its agent) and held in its custody. The City, the Registrar and the Paying Agent may, in connection therewith, do or perform or cause to be done or performed any acts or things not adverse to the rights of the holders of the 2010 Bonds as are necessary or appropriate to accomplish or recognize such book-entry form 2010 Bonds. During any time that the 2010 Bonds remain and are held in book-entry form on the books of a Clearing Agency: (l) any such 2010 Bond may be registered upon the books kept by the Registrar in the name of such Clearing Agency, or any nominee thereof, including Cede & Co., as nominee of The Depository Trust Company; (2) except as otherwise described in the Continuing Disclosure Contract described below, the Clearing Agency in whose name such 2010 Bond is so registered shall be, and the City, the Registrar and the Paying Agent may .deem and treat such Clearing Agency as, the absolute owner and holder of such 2010 Bond for all purposes of this Ordinance, including, without limitation, the receiving of payment of the principal of and interest on such 2010 Bond, the receiving of notice and giving of consent; (3) except as otherwise described in the Continuing Disclosure Contract, neither the City nor the Registrar or Paying Agent shall have any responsibility or obligation hereunder to any direct or indirect participant, within the meaning of Section 17A of the Securities Exchange Act of 1934, as amended, of such Clearing Agency, or any person on behalf of which, or otherwise in respect of -8- which, any such participant holds any interest in any 2010 Bond, including, without limitation, any responsibility or obligation hereunder to maintain accurate records of any interest in any 2010 Bond or any responsibility or obligation hereunder with respect to the receiving of payment of principal of or interest or premium, if any, on any 2010 Bond, the receiving of notice or the giving of consent; and (4) the Clearing Agency is not required to present any 2010 Bond called for partial redemption prior to receiving payment so long as the Registrar, the Paying Agent and the Clearing Agency have agreed to the method for noting such partial redemption. If either the City receives notice from the Clearing Agency which is currently the registered owner of the 2010 Bonds to the effect that such Clearing Agency is unable or unwilling to discharge its responsibility as a Clearing Agency for the 2010 Bonds, or the City elects to discontinue its use of such Clearing Agency as a Clearing Agency for the 2010 Bonds, then the City, the Registrar and the Paying Agent each shall do or perform or cause to be done or performed all acts or things, not adverse to the rights of the holders of the 2010 Bonds, as are necessary or appropriate to discontinue use of such Clearing Agency as a Clearing Agency for the 2010 Bonds and to transfer the ownership of each of the 2010 Bonds to such person or persons, including any other Clearing Agency, as the holders of the 2010 Bonds may direct in accordance with this Ordinance. Any expenses of such discontinuance and transfer, including expenses of printing new certificates to evidence the 2010 Bonds, shall be paid by the City. During any time that the 2010 Bonds are held in book-entry form on the books of a Clearing Agency, the Registrar shall be entitled to request and rely upon a certificate or other written representation from the Clearing Agency or any direct or indirect participant with respect to the identity of any beneficial owner of 2010 Bonds as of a record date selected by the Registrar. For purposes of determining whether the consent, advice, direction or demand of a registered owner of a 2010 Bond has been obtained, the Registrar shall be entitled to treat the beneficial owners of the 2010 Bonds as the bondholders and any consent, request, direction, approval, objection or other instrument of such beneficial owner may be obtained in the fashion described in this Ordinance. During any time that the 2010 Bonds are held in book-entry form on the books of~ a Clearing Agency, the Mayor, the Controller and/or the Registrar are authorized to execute and deliver a Letter of Representations agreement with the Clearing Agency or a Blanket Issuer Letter of Representations (the "DTC Letter of Representations"), and the provisions of any such DTC Letter of Representations or any successor agreement shall control on the matters set forth therein. The Registrar, by accepting the duties of Registrar under this Ordinance, agrees that it will (i) undertake the duties of agent required thereby and that those duties to be undertaken by either the agent or the issuer shall be the responsibility of the Registrar, and (ii) comply with all requirements of the Clearing Agency, including, without limitation, same day funds settlement payment procedures. Further, during any time that the 2010 Bonds are held in book-entry form, the provisions of this section shall control over conflicting provisions in any other section hereof. SECTION 8. Sale of Bonds. (a) The Controller is hereby authorized and directed to have the 2010 Bonds prepared, and the Mayor, Controller and the Clerk are hereby authorized and directed to execute the 2010 Bonds in substantially the form and the manner herein provided. -9- (b) The 2010 Bonds shall be sold in a competitive sale. The Controller shall cause to be published either (i) a notice of sale once each week for two consecutive weeks in accordance with I.C.§5-3-1-2, in which case the date fixed for the sale shall not be earlier than fifteen (15) days after the first of such publications and not earlier than three (3) days after the second of such publications, or (ii) a notice of intent to sell bonds once each week for two weeks in accordance with I.C. §5-1-11-2 and I.C. §5-3-1-4 and in a newspaper of general circulation published in the State capital. Said sale notice shall state the time and place of sale, the purpose for which the 2010 Bonds are being issued, the total amount thereof, the amount and date of each maturity, the maximum rate or rates of interest thereon, their denominations, the time and place of payment, the terms and conditions upon which bids will be received and the sale made and such other information as is required by law or as the Controller shall deem necessary. The Controller is designated as the officer responsible for the sale of the 2010 Bonds, and shall provide or cause to be provided all notices required by law. All bids for the 2010 Bonds shall be sealed and shall be presented to the Controller in accord with the terms set forth in the sale notice. Bidders for the 2010 Bonds shall be required to name the rate or rates of interest which the 2010 Bonds are to bear, which shall be the same for all 2010 Bonds maturing on the same date and the interest rate bid on any maturity of 2010 Bonds must be no less than the interest rate bid on any and all prior maturities, not exceeding eight percent (8%) per annum, and such interest rate or rates shall be in multiples of one-one hundredth (1/100) of one percent (1%). The Controller shall award the 2010 Bonds to the bidder who offers the lowest interest cost, to be determined by computing the total interest on all the 2010 Bonds to their maturities and deducting therefrom the premium bid, if any, or adding thereto the amount of the discount, if any. No bid for less than nine percent (99%) of the par value of the 2010 Bonds, plus accrued interest, shall be considered. The Controller may require that all bids be accompanied by certified or cashier's checks payable to the order of the City, or a surety bond, in an amount not to exceed one percent (1 %) of the aggregate principal amount of the 2010 Bonds as a guaranty of the performance of said bid, should it be accepted. If a financial surety bond is used, it must be from an insurance company licensed to issue such bond in the State, and such bond must be submitted to the City prior to the opening of the bids. The financial surety bond must identify each bidder whose good faith deposit is guaranteed by such financial surety bond. If the 2010 Bonds are awarded to a bidder utilizing a financial surety bond, then the purchaser is required to submit to the City a certified or cashier's check (or wire transfer such amount as instructed by the City) not later than 3:30 p.m. (local time) on the next business day following the award. In the event the successful bidder shall fail or refuse to accept delivery of the 2010 Bonds and pay for the same as soon as the 2010 Bonds are ready for delivery or at the time fixed in the notice of sale, then such good faith deposit and the proceeds thereof shall be the property of the City and shall be considered as its liquidated damages on account of such default. In the event no satisfactory bids are received on the day named in the sale notice, the sale may be continued from day to day thereafter for a period of thirty (30) days without readvertisement; provided, however, that if said sale is continued, no bid shall be accepted which offers an interest cost which is equal to or higher than the best bid received at the time fixed for sale in the bond sale notice. The Controller shall have full right to reject any and all bids. The opinion of bond counsel to the City approving the legality of the 2010 Bonds will be furnished to the purchaser at the expense of the City. -10- (c) Upon the consummation of the sale of the 2010 Bonds, the Controller is hereby authorized and directed to (i) to collect from the purchaser the purchase price for the 2010 Bonds; (ii) deliver the 2010 Bonds to the purchaser; and (iii) take the purchaser's receipt for the 2010 Bonds. The amount to be collected from the purchaser shall be the full amount which the purchaser has agreed to pay therefor, which shall be not less than 99% of the par value of the 2010 Bonds plus accrued interest to the date of delivery. (d) The 2010 Bonds, when fully paid for and delivered to the purchasers, shall be the binding special revenue obligations of the City, payable out of the Net Revenues of the City's Sewage Works to be set aside into the Sinking Fund as herein provided. SECTION 9. Use of Bond Proceeds. Any accrued interest and premium received at the time of delivery of the 2010 Bonds shall be deposited in the Debt Service Account of the Sinking Fund described below and shall be applied to the payment of interest on the 2010 Bonds on the earliest interest payment dates. The remaining proceeds received from the sale of the 2010 Bonds shall be deposited in a bank or banks which are legally qualified depositories of the funds of the City, in a special account to be designated as the "City of South Bend, Indiana, 2010 Sewage Works Construction Account" (the "Project Fund"). The proceeds deposited in the Project Fund shall be expended only for the purpose of paying the cost of the Project and the costs of issuance of the 2010 Bonds. Any balance remaining in the Project Fund after the completion of the Project, which is not required to meet unpaid obligations incurred in connection therewith or to pay the costs of issuance of the 2010 Bonds, may be used as provided in Indiana Code 5-1-13, as amended, or as otherwise permitted by law. SECTION 10. Official Statement and Continuing Disclosure Contract. (a) The Mayor and the Controller each are hereby authorized to deem final an official statement with respect to the 2010 Bonds, as of its date, in accordance with the provisions of Rule 15c2-12 of the U.S. Securities and Exchange Commission, as amended (the "Rule"), subject to completion as permitted by the Rule, and the City further authorizes the distribution of the deemed final official statement, and the execution, delivery and distribution of such document as further modified and amended with the approval of the Mayor or the Controller in the form of a final official statement. (b) If necessary in order for the purchaser or the underwriter of the 2010 Bonds to comply with the Rule, the Mayor and/or the Controller are hereby authorized to execute and deliver, in the name and on behalf of the City, (i) an agreement by the City to comply with the requirements for a continuing disclosure undertaking of the City pursuant to subsection (b)(5) or (d)(2) of the Rule, and (ii) amendments to such agreement from time to time in accordance with the terms of such agreement (the agreement and any amendments. thereto are collectively referred to herein as the "Continuing Disclosure Contract"). The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Contract. The remedies for any failure of the City to comply with and carry out the provisions of the Continuing Disclosure Contract shall be as set forth therein. SECTION 11. Collection of Revenues; Funding Operation, Repair and Maintenance. All revenues derived from the operation of the Sewage Works and from the collection of sewage rates and charges shall be deposited in the Sewage Works Revenue Fund (the "Revenue Fund"), as set forth in the Prior Ordinances and continued hereby, and such revenues shall be segregated and kept separate and apart from all other funds and bank accounts of the City. Out of said revenues the proper and reasonable expenses of operation, repair and maintenance of the Sewage Works shall be paid, the principal and interest of all bonds and fiscal agency charges of bank paying agents shall be paid, and the costs of replacements, extensions, additions and improvements shall be paid as hereinafter provided. On the last day of each calendar month there shall be credited from the Revenue Fund to the Sewage Works Operations and Maintenance Fund (the "Operations Fund"), as set forth in the Prior Ordinances and continued hereby, a sufficient amount of the revenues of the Sewage Works so that the balance in said fund shall be sufficient to pay the expenses of operation, repair and maintenance for the then next succeeding two calendar months. The moneys credited to this fund shall be used for the payment of the reasonable and proper operation, repair and maintenance expenses of the Sewage Works on a day-to-day basis, but none of such moneys in such fund shall be used for deprecation, replacements, improvements, extensions or additions. Any balance in the Operations Fund in excess of the expected expenses of operation, repair and maintenance for the then next succeeding month may be transferred to the Sinking Fund referred to below if necessary to prevent a default in payment of principal or interest on outstanding bonds. SECTION 12. Sewage Works Sinking Fund. (a) There shall be deposited from the Revenue Fund into the Sewage Works Sinking Fund (the "Sinking Fund") previously established and continued hereby for the payment of the interest on and principal of revenue bonds which by their terms are payable from the Net Revenues of the Sewage Works, and the payment of any fiscal agency charges in connection with the payment of such bonds and interest thereon, a sufficient amount of the Net Revenues of said Sewage Works to meet the requirements of the Bond and Interest Account and the Reserve Account previously established and continued hereby in said Sinking Fund. Such payments shall continue until the balance in the Bond and Interest Account, plus the balance in the Reserve Account, equals the principal of and interest on all of the then outstanding bonds of the Sewage Works to the final maturity thereof. (b) Bond and Interest Account. There shall be transferred, on or before the last day of each calendar month, from the Revenue Fund and credited to the Bond and Interest Account, an amount equal to the sum of one-sixth (1/6) of the interest on all then outstanding bonds of the Sewage Works payable on the then next succeeding Interest Payment Date, and one-twelfth (1/12) of the amount of principal payable on all then outstanding bonds of the Sewage Works payable on the then next succeeding principal payment date, until the amount of interest and principal payable on the next succeeding respective interest and principal payment dates shall have been so credited; provided that such fractional amounts shall be appropriately increased, if necessary, to provide for the first interest and first principal payments on the 2010 Bonds. There shall similarly be credited to the Bond and Interest Account any amount necessary to pay the bank fiscal agency charges, if any, for paying the principal of and interest on outstanding bonds of -12- the Sewage Works as the same become payable. The City shall, from the sums deposited in the Sinking Fund and credited to the Bond and Interest Account, remit promptly to the registered owners of the outstanding bonds of the Sewage Works or to the bank fiscal agency sufficient moneys to pay the principal and interest on the due dates thereof together with the amount of any bank fiscal agency charges. (c) Reserve Account. On the date of delivery of the 2010 Bonds or any other bonds payable from the Reserve Account, funds on hand of the Sewage Works, proceeds of the 2010 Bonds or such other bonds or a combination thereof may be deposited into the Reserve Account. Except as otherwise required by the Prior Ordinances, the balance to be maintained in the Reserve Account shall equal but not exceed an amount (the "Reserve Requirement") equal to the least of (i) maximum annual debt service on the 2010 Bonds and any other bonds payable from the Reserve Account, (ii) one hundred twenty-five percent (125%) of average .annual debt service on the 2010 Bonds and any other bonds payable from the Reserve Account, or (iii) ten percent (10%) of the proceeds of the 2010 Bonds and any other bonds payable from the Reserve Account, plus if and to the extent the amount set forth above is less than maximum annual debt service on the 2010 Bonds and any other bonds payable from the Reserve Account, a minor portion of the proceeds thereof under Section 148(e) of the Internal Revenue Code of 1986, as amended (the "Code"). Notwithstanding such Reserve Requirement, certain of the Prior Ordinances require a Reserve Requirement in an amount equal to the maximum annual debt service on the sewage works revenue bonds payable from the Reserve Account (including the 2010 Bonds and the Prior Bonds) so long as the Prior Bonds with such a Reserve Requirement are outstanding. If the initial deposit into the Reserve Account does not equal the Reserve Requirement, or if no deposit is made, the City shall deposit a sum of Net Revenues into the Reserve Account on the last day of each calendar month until the balance equals the Reserve Requirement. The monthly deposits shall be equal in amount and sufficient to accumulate the Reserve Requirement within five (5) years of the date of delivery of the 2010 Bonds. The Reserve Account shall constitute the margin for safety and protection against default in the payment of principal of and interest on the 2010 Bonds and any other bonds payable from the Reserve Account, and the moneys in the Reserve Account shall be used to pay current principal and interest on the 2010 Bonds and any other bonds payable from the Reserve Account to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. Any deficiency in the balance maintained in the Reserve Account shall be made up from the next available Net Revenues remaining after credits into the Bond and Interest Account. Any moneys in the Reserve Account in excess of the Reserve Requirement shall either be transferred to the Sewage Works Improvement Fund (as described herein) or be used for the purchase of outstanding bonds or installments of principal of fully registered bonds at a price not exceeding par and accrued interest, and redemption premium, if any. As an alternative to holding cash funds in the Reserve Account, the City, with the advice of the Financial Advisor and the City's bond counsel, may satisfy all or any part of its obligation to maintain any amount in the Reserve Account by depositing a Credit Facility (as defined in the next sentence) therein, provided that such deposit does not adversely affect any then existing rating on the 2010 Bonds. Notwithstanding the prior sentence, certain of the Prior Ordinances require the City to additionally give notice to (and/or seek the consent of) the holder of certain of -13- the Prior Bonds so long as such Prior Bonds are outstanding prior to any deposit of a Credit Facility in the Reserve Account. A "Credit Facility" is hereby defined as a letter of credit, liquidity facility, insurance policy or comparable instrument furnished by a bank, insurance company, financial institution or other entity pursuant to a reimbursement agreement or similar instrument between such entity and the City. As long as any such Credit Facility is in full force and effect, any valuation of the Reserve Account shall treat the maximum amount available under such Credit Facility as its value. To the extent that any 2010 Bonds are insured, and the Credit Facility is not being provided by the insurer of such 2010 Bonds, such insurance policy shall be subject to the insurer's prior written consent. The Mayor and the Controller are hereby authorized to obtain such a Credit Facility for each series of 2010 Bonds being sold, and are authorized to enter into any agreements with such Credit Facility provider that they deem necessary with the advice of the Financial Advisor. Prior to applying any funds held in any debt service reserve accounts securing any obligations payable out of the revenues of the sewage works of the City to the payment of such obligation, the City shall cause all funds held in the Sinking Fund (or any like fund or account from which debt service has been structured to be paid) to be applied in full before any such reserve accounts are so applied. SECTION 13. Sewage Works Improvement Fund. On the first day of each calendar month after the 2010 Bonds are issued, after meeting the requirements for operation, repair, and maintenance and the Sinking Fund, all available net revenues shall be credited to the Sewage Works Improvement Fund as set forth in the Prior Ordinances and continued hereby. Said fund shall be used for improvements, replacements, additions and extensions of the Sewage Works. Moneys in the Sewage Works Improvement Fund shall be transferred to the Sinking Fund if necessary to prevent a default in the payment of principal of and interest on the then outstanding bonds or if necessary to eliminate any deficiencies in credits to or minimum balance in the Debt Service Reserve Account of the Sinking Fund. SECTION 14. Investments. The moneys in any of such funds or accounts shall be invested in accordance with the laws of the State of Indiana relating to the depositing, holding, securing or investing of public funds, and in accordance with the arbitrage certificate delivered at the time of delivery of any bonds payable from such funds and accounts. All revenues derived from the operation of the Sewage Works and from the collection of sewage rates and charges and from the investment of moneys in the funds herein created shall be segregated and kept separate and apart from all other funds and accounts of the City. No moneys derived from the revenues of the Sewage Works (including investment income) shall be transferred to the general fund of the City or be used for any purpose not connected with the Sewage Works if such transfer or use would interfere with the flow of funds set forth herein. Investment income from such funds and accounts shall, except as otherwise provided herein,. be treated as revenues of the Sewage Works, and shall be used as provided in this Ordinance. SECTION 15. Books and Records. The City shall keep proper books of records and accounts, separate from all of its other records and accounts, in which complete and correct -14- entries shall be made showing all revenues collected from the Works and deposited in said funds, all disbursements made therefrom on account of the operation of the Works and to meet the requirements of the Sinking Fund, and all other transactions relating to the Works, including the cash balances in each of the funds and accounts described herein as of the close of the preceding fiscal year. Upon written request, there shall be prepared and furnished to the original purchasers of the 2010 Bonds and to any subsequent owner of the bonds at the time then outstanding, not more than four (4) months after the close of each fiscal year, operating income and expense and balance sheet statements of the Works, covering the preceding fiscal year, which annual statements shall be certified by the Controller, or the person charged with the duty of auditing the books and records relating to the Works, or such statements may be prepared by an independent certified public accountant retained by the City for the purpose of preparing such statements. Copies of all such statements and reports shall be kept on file in the office of the Controller. Any owner or owners of the 2010 Bonds then outstanding shall have the right at all reasonable times to inspect the Works and all records, accounts and data of the City relating thereto. Such inspections may be made by representatives duly authorized by written instrument. SECTION 16. Rate Covenant. The City shall, to the fullest extent permitted by law, establish; maintain and collect just and equitable rates and charges for the use of and the services rendered by said Sewage Works, to be paid by the owner of each and every lot, parcel of real estate or building that is connected with and uses said Sewage Works by or through any part of the sewage system of the City, or that in any way uses or is served by such Works. Such rates or charges shall be sufficient in each year for the payment of the proper and reasonable expenses of operation, repair and maintenance of the Works, for depreciation and improvement, and for the payment of the sums required to be paid into the Sinking Fund. Such rates or charges shall, if necessary, be changed and readjusted from time to time so that the revenues therefrom shall always be sufficient to meet the expenses of operation, repair and maintenance, depreciation and improvement, and the requirements of the Sinking Fund; and such rates or charges shall be in an amount sufficient in each year to produce Net Revenues at least equal to 1.1 times the greater of the average annual debt service on the Prior Bonds, the 2010 Bonds and all bonds on a parity therewith or the debt service payable during the next succeeding twelve calendar months on the Prior Bonds, the 2010 Bonds and all bonds on a parity therewith. For these purposes, the interest rate on variable rate debt shall be assumed to be the average interest rate thereon in the preceding calendar year. SECTION 17. Defeasance. If, when the 2010 Bonds or a portion thereof shall have become due and payable in accordance with their terms or shall have been duly called for redemption or irrevocable instructions to call the 2010 Bonds or a portion thereof for redemption shall have been given, and the whole amount of the principal, premium, if any, and the interest so due and payable upon such 2010 Bonds or any portion thereof then outstanding shall be paid, or (i) cash, (ii) direct non-callable obligations of (including obligations issued or held in book- entry form on the books of) the U.S. Department of the Treasury, the principal of and the interest on which when due without reinvestment will provide sufficient money, or (iii) any combination of the foregoing, shall be held irrevocably in trust for such purpose, and provision shall also be made for paying all fees and expenses for the payment, then and in that case the 2010 Bonds or such designated portion thereof shall no longer be deemed outstanding or secured by this Ordinance or entitled to the pledge of the Net Revenues. -15- SECTION 18. Additional Bonds. The City reserves the right to authorize and issue additional bonds, payable out of the revenue of its Sewage Works, ranking on a parity with the 2010 Bonds for the purpose of financing the cost of future additions, extensions and improvements to the Sewage Works or to provide for a complete or partial refunding of the 2010 Bonds or other bonds payable out of the revenues of the Sewage Works, subject to the following conditions: (a) The interest on and principal of all bonds payable from the revenues of the Sewage Works shall have been paid to date in accordance with the terms thereof, provided, this condition shall be deemed satisfied if any required amount is to be provided from the proceeds of the parity bonds or other funds of the City. (b) All required deposits to the Sinking Fund shall have been made in accordance with the provisions of the Ordinance. (c) The Net Revenues of the Sewage Works in the fiscal year immediately preceding the issuance of any such bonds ranking on a parity with the 2010 Bonds shall be not less than one hundred twenty-five percent (125%) of the maximum annual interest and principal requirements of the then outstanding 2010 Bonds, any then outstanding parity. bonds and the additional parity bonds proposed to be issued; or, prior to the issuance of said parity bonds, the sewage rates and charges shall be increased sufficiently so that said increased rates and charges applied to the previous fiscal year's operations would have produced Net Revenues for said year equal to not less than one hundred twenty-five percent (125%) of the maximum annual interest and principal requirements of the then outstanding 2010 Bonds, any then outstanding parity bonds and the additional parity bonds proposed to be issued. For purposes of this subsection, the records of the Sewage Works shall be analyzed and all showings shall be prepared by a certified public accountant or independent financial advisor employed by the City for that purpose. (d) The principal of the additional parity bonds shall be payable annually on December 1 and the interest shall be payable semiannually on June 1 and December 1 during the periods in which principal and interest are payable. SECTION 19. Additional Covenants of the City. For the purpose of further safeguarding the interests of the holders of the 2010 Bonds, it is specifically provided as follows: (a) All contracts let by the City in connection with the construction of said additions and improvement to the Sewage Works in connection with the Project shall be let after due advertisement as required by the laws of the State of Indiana, and all contractors shall be required to furnish surety bonds in an amount equal to one hundred percent (100%) of the amount of such contracts, to insure the completion of said contracts in accordance with their terms, and such contractors shall also be required to carry such employers liability and public liability insurance as are required under the laws of the State of Indiana in the case of public contracts, and shall be governed in all respects by the laws of the State of Indiana relating to public contracts. -16- (b) All additions and improvement to the Sewage Works in connection with the Project shall be constructed under the supervision and subject to the approval of the Engineers or such other competent engineer as shall be designated by the Board. All estimates for work done or material furnished shall first be checked by the Engineers or such other competent engineer as shall be designated by the Board and approved by the Board. (c) The City shall at all times maintain its Sewage Works in good condition and operate the same in an efficient manner and at a reasonable cost. (d) So long as any of the 2010 Bonds are outstanding, the City shall maintain insurance on-the insurable parts of the Works of a kind and in an amount such as would normally be carried by private companies engaged in a similar type of business. All insurance shall be placed with responsible insurance companies qualified to do business under the laws of the State of Indiana. In addition to or in lieu of the foregoing, the City may provide for coverage on all or part of the Works comparable to that described above through aself-insurance program. Insurance proceeds shall be used in replacing or repairing the property destroyed or damaged; or if not used for that purpose shall be treated and applied as Net Revenues of the Works. (e) So long as any of the 2010 Bonds are outstanding, the City shall not mortgage, pledge or otherwise encumber such Works, or any part thereof, nor shall it sell, lease or otherwise dispose of any portion thereof except replace equipment which may become worn out or obsolete or other property not required for proper operation and maintenance of the Works. (f) So long as any Prior Bonds are held by the Indiana Finance Authority (the "Authority") and remain outstanding: (i) the City shall not mortgage, pledge or otherwise encumber such Works, or any part thereof, nor shall it sell, lease or otherwise dispose of any portion thereof except replace equipment which may become worn out or obsolete or other property not required for proper operation and maintenance of the Works, without the prior written consent of the Authority, and (ii) the City shall not borrow any money, enter into any contract or agreement or incur any other liabilities in connection with the Sewage Works, other than for normal operating expenditures, without the prior written consent of the Authority if such undertaking would involve, commit, or use the revenues of the Sewage Works. (g) Except as provided in Section 18 hereof, so long as any of the 2010 Bonds are outstanding, no additional bonds or other obligations pledging any portion of the revenues of the Sewage Works shall be authorized, executed, or issued by the City except such as shall be made subordinate and junior in all respects to the 2010 Bonds, unless all of the 2010 Bonds are redeemed, retired, or defeased coincidentally with the delivery of such additional bonds or other obligations. (h) The City shall take all action or proceedings necessary and proper to require connection of all property where liquid and solid waste, sewage, night soil, or -17- industrial waste is produced with available sanitary sewers. The City shall, insofar as possible, cause all such sanitary sewers to be connected with the Sewage Works. (i) This Ordinance shall not be repealed or amended in any respect which will adversely affect the rights of the owners of any 2010 Bonds, nor shall the Common Council adopt any law, ordinance or resolution which in any way adversely affects the rights of such owners so long as any of said bonds or the interest thereon remains unpaid. (j) The provisions of this Ordinance shall be construed to create a trust in the proceeds of the sale of the 2010 Bonds for the uses and purposes herein set forth. The provisions of this Ordinance shall also be construed to create a trust in the portion of the Net Revenues herein directed to be set apart and paid into the Sinking Fund and for the uses and purposes of said Fund as set forth in this Ordinance. The owners of the 2010 Bonds shall have all of the rights, remedies and privileges set forth under the Act in the event of default in the payment of the principal of or interest on any of the 2010 Bonds or in the event of default with respect to any of the provisions of this Ordinance or the Act. SECTION 20. Tax Covenants. In order to preserve the exclusion of interest on the 2010 Bonds from gross income for federal income tax purposes and as an inducement to purchasers of the 2010 Bonds, the City represents, covenants and agrees that: (a) No person or entity, other than the City or another state or local governmental unit, will use proceeds of the 2010 Bonds or property financed by the 2010 Bond proceeds other than as a member of the general public. No person or entity other than the City or another state or local governmental unit will own property financed by 2010 Bond proceeds or will have actual or beneficial use of such property pursuant to a lease, a management or incentive payment contract, an arrangement such as take-or-pay or output contract, or any other type of arrangement that differentiates that person's or entity's use of such property from the use by the public at large. (b) No 2010 Bond proceeds will be loaned to any entity or person other than a state or local governmental unit. No 2010 Bond proceeds will be transferred, directly or indirectly, or deemed transferred to anon-governmental person in any manner that would in substance constitute a loan of the 2010 Bond proceeds. (c) The City will not take any action or fail to take any action with respect to the 2010 Bonds that would result in the loss of the exclusion from gross income for federal income tax purposes of interest on the 2010 Bonds pursuant to Section 103 of the Code, including, without limitation, the taking of such action as is necessary to rebate or cause to be rebated arbitrage profits on 2010 Bond proceeds or other monies treated as 2010 Bond proceeds to the federal government as provided in Section 148 of the Code, and will set aside such monies, which may be paid from investment income on funds and accounts, in trust for such purposes. (d) The City will file an information report Form 8038-G with the Internal Revenue Service as required by Section 149 of the Code. -18- (e) The City will not make any investment or do any other act or thing during the period that any 2010 Bond is outstanding hereunder which would cause any 2010 Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code and the regulations applicable thereto as in effect on the date of delivery of the 2010 Bonds. The City will not take any action or fail to take any action with respect to the 2010 Bonds that would result in the loss of the exclusion from gross income for federal income tax purposes of interest on the 2010 Bonds pursuant to Section 103(a) of the Code, and the City will not act in any manner which would adversely affect such exclusion. Notwithstanding any other provisions of this Ordinance, the foregoing covenants and authorizations (the "Tax Covenants") which are designed to preserve the exclusion of interest on the 2010 Bonds from gross income under federal income tax law (the "Tax Exemption") need not be complied with if the City receives an opinion of nationally recognized bond counsel that any Tax Covenant is unnecessary to preserve the Tax Exemption. SECTION 21. Amendments. Subject to the terms and provisions contained in this section, and not otherwise, the owners of not less than sixty-six and two-thirds per cent (66- 2/3%) in aggregate principal amount of the 2010 Bonds then outstanding shall have the right, from time to time, anything contained in this Ordinance to the contrary notwithstanding, to consent to and approve the adoption by the City of such ordinance or ordinances supplemental hereto as shall be deemed necessary or desirable by the City for the purpose of modifying, altering, amending, adding to or rescinding in any particular any of the terms or provisions contained in this Ordinance, or in any supplemental ordinance; provided, however, that nothing herein contained shall permit or be construed as permitting: (a) An extension of the maturity of the principal of or interest or premium, if any, on any 2010 Bond or an advancement of the earliest redemption date on any 2010 Bond; or (b) A reduction in the principal amount of any 2010 Bond or the redemption premium or the rate of interest thereon, or a change in the monetary medium in which such amounts are payable; or (c) The creation of a lien upon or a pledge of the revenues of the Sewage Works ranking prior to the pledge thereof created by this Ordinance; or (d) A preference or priority of any 2010 Bond or 2010 Bonds over any other 2010 Bond or 2010 Bonds; or (e) A reduction in the aggregate principal amount of the 2010 Bonds required for consent to such supplemental ordinance. If the City shall desire to obtain any such consent, it shall cause the Registrar to mail a notice, postage prepaid, to the addresses appearing on the registration books held by the Registrar. Such notice shall briefly set forth the nature of the proposed supplemental ordinance and shall state that a copy thereof is on file at the office of the Registrar for inspection by all owners of the 2010 Bonds. The Registrar shall not, however, be subject to any liability to any -19- owners of the 2010 Bonds by reason of its failure to mail such notice, and any such failure shall not affect the validity of such supplemental ordinance when consented to and approved as herein provided. Whenever at any time within one year after the date of the mailing of such notice, the City shall receive any instrument or instruments purporting to be executed by the owners of the 2010 Bonds of not less than sixty-six and two-thirds per cent (66-2/3%) in aggregate principal amount of the 2010 Bonds then outstanding, which instrument or instruments shall refer to the proposed supplemental ordinance described in such notice, and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such notice as on file with the Registrar, thereupon, but not otherwise, the City may adopt such supplemental ordinance in substantially such form, without liability or responsibility to any owners of the 2010 Bonds, whether or not such owners shall have consented thereto. No owner of any 2010 Bond shall have any right to object to the adoption of such supplemental ordinance or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain the City or its officers from adopting the same, or from taking any action pursuant to the provisions thereof. Upon the adoption of any supplemental ordinance pursuant to the provisions of this section, this Ordinance shall be, and shall be deemed, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Ordinance of the City and all owners of 2010 Bonds then outstanding, shall thereafter be determined exercised and enforced in accordance with this Ordinance, subject in all respects to such modifications and amendments. Notwithstanding anything contained in the foregoing provisions of this Ordinance, the rights and obligations of the City and of the owners of the 2010 Bonds, and the terms and provisions of the 2010 Bonds and this Ordinance, or any supplemental ordinance, may be modified or altered in any respect with the consent of the City and the consent of the owners of all the 2010 Bonds then outstanding. Without notice to or consent of the owners of the 2010 Bonds, the City may, from time to time and at any time, adopt such ordinances supplemental hereto as shall not be inconsistent with the terms and provisions hereof (which supplemental ordinances shall thereafter form a part hereof), (a) to cure any ambiguity or formal defect or omission in this Ordinance or in any supplemental ordinance; or (b) to grant to or confer upon the owners of the 2010 Bonds any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the owners of the 2010 Bonds; or (c) to procure a rating on the 2010 Bonds from a nationally recognized securities rating agency designated in such supplemental ordinance, if such supplemental ordinance will not adversely affect the owners of the 2010 Bonds; or (d) to make any other change which is not to the prejudice of the owners of the 2010 Bonds; or -20- (e) to provide for the refunding or advance refunding of the 2010 Bonds. SECTION 22. Defaults. In the event available moneys hereunder, subject to the restrictions on use of money held under this Ordinance as set forth herein, are insufficient to pay debt service on all bonds payable from the revenues of the Sewage Works when due, available moneys shall be applied, after payment of all costs and expenses associated therewith, to the 2010 Bonds and any bonds issued on parity with the 2010 Bonds as follows: First - To the payment to the persons entitled thereto of all installments of interest then due, including interest on any past due principal at the rate borne by such bond, in the order of the maturity of the installments of such interest and, if the amount available shall not be sufficient to pay in full any particular installment, then to such payment ratably, according to the amounts due on such installments, to the persons entitled thereto, without any discrimination or privilege; and Second - To the payment to the persons entitled thereto of the unpaid principal of and premium on any of such bonds which shall have become due either at maturity or pursuant to a call for redemption (other than bonds called for redemption for the payment of which other moneys are held), in the order of their due dates, and, if the amount available shall not be sufficient to pay in the amounts due on any particular date, then to such payment ratably, according to the amount due on such date, to the persons entitled thereto without any discrimination or privilege. During the continuance of any default in the payment of either principal of or interest or premium on any 2010 Bond or bonds issue on parity with the 2010 Bonds, no payment shall be made with respect to any subordinate and junior bonds ("Junior Bonds"). Moneys available for payment to holders of Junior Bonds shall, in the event of an insufficient amount being available to pay all debt service with respect to the Junior Bonds when due, be applied to the Junior Bonds in accordance with the sequence and other terms set forth above with respect to payments regarding bonds issued on parity with the 2010 Bonds unless otherwise provided in the ordinance authorizing the Junior Bonds. SECTION 23. Bank Qualification. The City hereby designates the 2010 Bonds as "qualified tax-exempt obligations" under the provisions of Section 265(b)(3) of the Code, relating to the disallowance of 100% of the deduction of interest expense allocable to tax-exempt obligations. The 2010 Bonds qualify for the exception in Section 265 of the Code from the disallowance of 100% of the deduction by financial institutions of interest expense allocable to tax-exempt obligations, and are so designated, because: (a) the 2010 Bonds are not private activity bonds as defined in Section 141 of the Code; (b) the City has herein designated the 2010 Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of qualified tax-exempt obligations (excluding private activity bonds) which will be issued by or on behalf of the City, all entities which issue obligations on behalf of the City and all subordinate entities during the current calendar year will not exceed $30,000,000; and (d) the City, all entities which issue obligations on behalf of the City and all -21- subordinate entities have not designated more than $30,000,000 of qualified tax-exempt obligations during the current calendar year. SECTION 24. No Conflict. Except as described below, all ordinances and parts of ordinances in conflict herewith are hereby repealed. SECTION 25. Severability. If any section, paragraph or provision of this Ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such section, paragraph or provision shall not affect any of the remaining provisions of this Ordinance. SECTION 26. Bond Insurance. In connection with the sale of the 2010 Bonds, the Mayor, the Controller and the Clerk are each authorized to execute and deliver such agreements and instruments as they deem advisable to secure bond insurance for the 2010 Bonds, and the execution and delivery of such agreements and instruments are hereby approved. The premium, if any, for such bond insurance shall be payable from the proceeds of the 2010 Bonds. SECTION 27. Rates and Charges. The estimate of rates and charges which will be needed and charged to the general classes of users of property to be served by the Sewage Works in order to provide sufficient moneys to make payments of principal and interest on the 2010 Bonds, along with the other payments identified in this Ordinance, is set forth in Ordinance No. 10019-10, adopted by the Common Council on June 28, 2010. SECTION 28. Holiday If the date of making any payment or the last date for performance of any act or the exercising of any right, as provided in this Ordinance, shall be a legal holiday or a day on which banking institutions in the City or the city in which the Registrar or Paying Agent is located are typically closed, such payment may be made or act performed or right exercised on the next succeeding day not a legal holiday or a day on which such banking institutions are typically closed, with the same force and effect as if done on the nominal date provided in this Ordinance, and no interest shall accrue for the period after such nominal date. SECTION 29. Effectiveness. This Ordinance shall be in full force and effect from and after its passage, provided, the provisions of the ordinances pursuant to which the Prior Bonds were issued shall remain in effect and shall supersede the provisions of this Ordinance in the event of any conflict with this Ordinance until such time as the Prior Bonds are all defeased on paid in full. SECTION 30. Notice of Adoption and Purport of this Ordinance. Upon passage of this Ordinance, the Clerk of the City shall immediately cause to be published in accordance with Indiana Code 5-3-1, a notice of the adoption and purport of this Ordinance in accordance with Indiana Code Section 36-9-23-10. In the event that any objecting petition is filed in accordance with Indiana Code Section 36-9-23-12, no further proceedings shall be taken by the City relating to the Project until the later of (i) the date on which the court having jurisdiction over such matter confirms the decision of the City to issue bonds relating to the Project, or (ii) if an appeal is taken, the date on which the appropriate court of last resort confirms the decision of the City to issue bonds relating to the Project, except as permitted by Indiana Code Section 36-9-23-12(fj. -22- SECTION 31. Actions and Agreements. Each of the Mayor, the Controller and any other officer or employee of the City is hereby authorized and directed to execute any instruments or agreements or take any other actions necessary or desirable to effect the transactions contemplated by this Ordinance, such necessity or desirability to be conclusively evidenced by the execution of such instruments or agreements or the taking of such action. PASSED AND ADOPTED by the Common Council of the City of South Bend, Indiana, this ~ day of tur~~~cn/ , 2010. I st READING ~ ~ ~"l0 PUSLlC HEARING ~ l-g-~~ 3 rd READING ~ `-_~ ~l C> .JOT APPRQVfsD REFERRED ,y PASSF~ '~~ .. 4 ' ~ `~~ ' ~~ '.w+5..~d~* COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIAN Member of the Common Council - 23 - OCT?.02010 J!~13N VCOnDE CITY CLEiiK, S0. EEi~4D, I~1. TO THE COMMON COUNCIL OF THE CITY OF SOUTH BEND: Your Committee of the Whole, to whom was referred: BILL NO. 66-10 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA AUTHORIZING THE ACQUISITION, CONSTRUCTION AND INSTALLATION OF CERTAIN ADDITIONS, EXTENSIONS AND IMPROVEMENTS TO THE CITY'S SEWAGE WORKS, THE ISSUANCE AND SALE OF ADDITIONAL REVENUE BONDS TO PROVIDE FUNDS FOR THE PAYMENT OF THE COSTS THEREOF, AND THE COLLECTION, SEGREGATION AND DISTRIBUTION OF THE REVENUES OF SUCH SEWAGE WORKS AND OTHER RELATED MATTERS Respectfully report that they have examined the matter and that in their opinion, this bill is being recommended to the full Council with a favorable recommendation. Ann Puzzello Chairperson, Committee of the Whole APPENDIX A PROJECT DESCRIPTION The Project consists of the acquisition, construction and installation of certain additions, extensions and improvements to the Sewage Works, including: 1. , Pleasant Street Phase 2 -Sewer separation improvements along Pleasant Street from 29`n Street to 36`n Street. 2. East Bank Sewer Separation Phase 1 -Sewage separation improvements for Combined Sewage Overflow ("CSO") separation along the East Race waterway within the City. 3. Sewage Lift Station Rehabilitation -Repair and rehabilitation of sewage lift stations. 4. Diamond Avenue Phase 1 -Sewer separation improvements along Angela Boulevard/Riverside Drive to Woodward Avenue within the City. 5. Preparation of CSO Long-Term Control Plan Designs. 6. Making any and all additional improvements related to the foregoing. A-1 APPENDIX B FORM OF 2010 BOND No. R- UNITED STATES OF AMERICA STATE OF INDIANA COUNTY OF ST. JOSEPH CITY OF SOUTH BEND SEWAGE WORKS REVENUE BOND OF 2010 Interest Maturity Original Authentication Rate Date Date Date CUSIP 1 , 20_ , 20_ , 20_ REGISTERED OWNER: Cede & Co. PRINCIPAL SUM: Dollars ($ ) The City of South Bend, in St. Joseph County, State of Indiana, for value received, hereby promises to pay to the Registered Owner set forth above, solely out of the special fund hereinafter referred to, the Principal Sum set forth above on the Maturity Date set forth above (unless this bond is subject to and is called for redemption prior to maturity as hereinafter provided), and to pay interest thereon until the Principal Sum shall be fully paid at the Interest Rate per annum specified above from the interest payment date to which interest has been paid next preceding the Authentication Date of this bond unless this bond is authenticated after the fifteenth day of the month preceding an interest payment date and on or before such interest payment date in which case interest shall be paid from such interest payment date, or unless this bond is authenticated on or before 15, 20 in which case it shall bear interest from the Original Date, which interest is payable semi-annually on the first day of June and December of each year, beginning on 1, 20 The principal of this bond is payable at the office of , (the "Registrar" or "Paying Agent"), in ,Indiana. All payments of interest on this bond shall be paid by check or draft mailed one business day prior to the interest payment date to the registered owner hereof as of the fifteenth day of the month preceding the interest payment date at the address as it appears on the registration books kept by the Registrar or at such other address as is provided to the Paying Agent in writing by the registered owner. All payments of principal of this bond shall be made upon surrender thereof at the principal corporate trust office of the Paying Agent in any coin or currency of the United States of B-1 America which on the dates of such payment shall be legal tender for the payment of public and private debts. This bond is one of an authorized issue of bonds (the "Bonds") of the City of South Bend, Indiana, of like original date, tenor and effect, except as to denomination, numbering, interest rates, redemption terms and dates of maturity, in the total amount of Dollars ($ ), numbered from R-1 up, issued for the purpose of providing funds to be applied to the cost of certain additions, extensions and improvements to the sewage works of the City (the "Sewage Works" or the "Works"), and to pay all expenses necessarily incurred in connection with the issuance of such bonds, as authorized by Ordinance No. adopted by the Common Council of the City of South Bend on the day of , 2010, entitled "An Ordinance of the Common Council of the City of South Bend, Indiana Authorizing the Acquisition, Construction and Installation of Certain Additions, Extensions and Improvements for the City's Sewage Works, the Issuance and Sale of Revenue Bonds to Provide Funds for the Payment of the Costs Thereof, and the Collection, Segregation and Distribution of the Revenues of Such Sewage Works, and Other Related Matters" (the "Ordinance"), and in strict compliance with the provisions of I.C. 36-9-23, as amended (collectively, the "Act"). Pursuant to the provisions of the Act and said Ordinance, the principal of and interest on (i) this bond and all other bonds of this issue, (ii) all Prior Bonds (as defined in the Ordinance), which Prior Bonds are on a parity with this bond and all other bonds of this issue, and (iii) all bonds hereafter issued on a parity with this bond and all other bonds of this issue, are payable solely from the Sewage Works Sinking Fund, as described in the Ordinance, to be provided from the Net Revenues (defined as the gross revenues of the Sewage Works of the City after deduction only for the payment of the reasonable expenses of operation, repair and maintenance but not including depreciation and payments in lieu of taxes). This bond and the issue of which it is a part, together with the Prior Bonds and any parity bonds hereafter issued constitute a first charge against said Net Revenues. The City of South Bend irrevocably pledges the entire Net Revenues of said Sewage Works to the prompt payment of the principal of and interest on the bonds authorized by the Ordinance, of which this is one, and any bonds ranking on a parity therewith (including the Prior Bonds), to the extent necessary for that purpose, and covenants that it will cause to be fixed, maintained and collected such rates and charges for service rendered by the Works as are sufficient in each year for the payment of the proper and reasonable expenses of operation, repair and maintenance of the Works, to provide for proper depreciation and for the payment of the sums required to be paid into said Sewage Works Sinking Fund under the provisions of the Ordinance. In the event the City or the proper officers thereof shall fail or refuse to so fix, maintain and collect such rates or charges, or if there be a default in payment of the interest on or principal of this bond, the owner of this bond shall have all of the rights and remedies provided for under Indiana law. The City of South Bend further covenants that it will set aside and pay into its Sewage Works Sinking Fund a sufficient amount of the Net Revenues of the Works to (a) pay the principal and interest payments on all bonds payable from the Net Revenues of the Sewage Works, as such principal and interest shall fall due, (b) pay the necessary fiscal agency charges for paying all bonds and interest as required by the Ordinance, and (c) an additional amount B-2 necessary to maintain the reserve required by the Ordinance. Such required payments shall constitute a first charge upon all the Net Revenues of the Works. [The Bonds maturing on and after 1, 20 ,are redeemable at the option of the City on 1, 20 , or any date thereafter, on thirty (30) days' notice, in whole or in part, in inverse order of maturity and by lot within a maturity, at face value, together with the following premiums: if redeemed on 1, 20_ or thereafter on or before , 20_; _% if redeemed on , 20_ or thereafter prior to maturity; plus in each case accrued interest to the date fixed for redemption.] [Notice of redemption shall be mailed to the address of the Registered Owner as shown on the registration record of the City, as of the date which is forty-five (45) days prior to such redemption date, not less than thirty (30) days prior to the date fixed for redemption. The notice shall specify the date and place of redemption and sufficient identification of the Bonds called for redemption. The place of redemption may be determined by the City. Interest on the Bonds so called for redemption shall cease on the redemption date fixed in such notice, if sufficient funds are available at the place of redemption to pay the redemption price on the date so named.] [The Bonds shall be called for redemption in multiples of $5,000. The Bonds in denominations of more than $5,000 shall be treated as representing the number of Bonds obtained by dividing the denomination of the Bond by $5,000 within a maturity. The Bonds may be redeemed in part. In the event of the redemption of the Bonds in part, upon surrender of the Bond to be redeemed, a new Bond or Bonds in an aggregate principal amount equal to the unredeemed portion of the Bond surrendered shall be issued to the Registered Owner.] This bond is subject to defeasance prior to payment as provided in the Ordinance and the owner of this bond, by the acceptance hereof, hereby agrees to all the terms and provisions contained in the Ordinance. This bond is transferable or exchangeable only upon the books of the City kept for that purpose at the office of the Registrar by the Registered Owner in person, or by his attorney duly authorized in writing, upon surrender of this bond together with a written instrument of transfer or exchange satisfactory to the Registrar duly executed by the Registered Owner or his attorney duly authorized in writing, and thereupon a new fully registered bond or bonds in the same aggregate principal amount, and of the same maturity, shall be executed and delivered in the name of the transferee or transferees or the Registered Owner, as the case may be, in exchange therefor. The City, any registrar and any paying agent for this bond may treat and consider the person in whose name this bond is registered as the absolute owner hereof for all purposes including for the purpose of receiving payment of, or on account of, the principal hereof and interest due hereon. B-3 The bonds maturing in any one year are issuable only in fully registered form in the denomination of $5,000 or any integral multiple thereof not exceeding the aggregate principal amount of the bonds maturing in such year. [This bond has been designated as a qualified tax-exempt obligation for purposes of Section 265(b) of the Internal Revenue Code of 1986, as amended.] [A Continuing Disclosure Contract from the City to each registered owner or holder of any bond, dated as of the date of initial issuance of the bonds of this issue (the "Contract"), has been executed by the City, a copy of which is available from the City and the terms of which are incorporated herein by this reference. The Contract contains certain promises of the City to each registered owner or holder of this bond and all other bonds of this issue, including a promise to provide certain continuing disclosure. By its payment for and acceptance of this bond, the registered owner or holder of this bond assents to the Contract and to the exchange of such payment and acceptance for such promises.] THIS BOND SHALL NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY WITHIN THE MEANING OF THE PROVISIONS AND LIMITATIONS OF THE CONSTITUTION OF THE STATE OF INDIANA, AND THE CITY SHALL NOT BE OBLIGATED TO PAY THIS BOND OR THE INTEREST THEREON EXCEPT FROM THE SPECIAL FUND, ENTITLED "SEWAGE WORKS SINKING FUND" AS DESCRIBED HEREIN, PROVIDED FROM THE NET REVENUES OF THE CITY'S SEWAGE WORKS UTILITY. It is hereby certified and recited that all acts, conditions and things required to be done precedent to and in the preparation and complete execution, issuance and delivery of this bond have been done and performed in regular and due form as provided by law. This bond shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been executed by an authorized representative of the Registrar. B-4 IN WITNESS WHEREOF, the City of South Bend, in St. Joseph County, Indiana, has caused this bond to be executed in its corporate name by the manual or facsimile signatures of the Mayor and Controller, its corporate seal to be hereunto affixed, imprinted or impressed by any means and attested manually or by facsimile by its City Clerk. (SEAL OF CITY) ATTEST: City Clerk CITY OF SOUTH BEND, INDIANA By By Mayor Controller CERTIFICATE OF AUTHENTICATION It is hereby certified that this bond is one of the bonds described in the within-mentioned Ordinance duly authenticated by the Registrar. as Registrar By Authorized Representative B-5 (Form of Assignment) FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please Print or Typewrite Name and Address) $ principal amount (must be a multiple of $5,000) of the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within bond on the books kept for the registration thereof with full power of substitution in the premises. NOTICE: The signature to this assignment must correspond with the name as it appears on the face of the within bond in every particular, without alteration or enlargement or any change whatsoever. Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution participating in a Securities Transfer Association recognized signature guarantee program. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship, and not as tenants in common UNIF TRANS MIN ACT - Custodian (Gust) (Minor) under Uniform Transfers to Minors Act of (State) Additional abbreviations may also be used though not in the list above. SBDS02 PFACCENDA 410419v4 B-6 BARNES &THORNBURG LLP Philip J. Faccenda, Jr. (574) 237-1148 philip.faccendaC~sbtlaw.com 600 1st Source Bank Center 100 North Michigan South Bend, IN 46601 U.S.A. (574)233-1171 Fas(574) 237-1125 w~cw.btlaw.com October 20, 2010 HAND DELIVERED Mr. John Voorde Clerk of the City of South Bend 455 County-City Building 227 West Jefferson Boulevard South Bend, Indiana 46601 Re: City of South Bend, Indiana Sewage Works Revenue Bonds of 2010 Dear Mr. Voorde: Enclosed for filing are multiple copies of the Ordinance for the above-referenced City of South Bend, Indiana Sewage Works Revenue Bonds of 2010 for financing sewage works projects in the City of South Bend as described in the Ordinance for first reading before the Common Council on October 25, 2010 and second reading on November 8, 2010. Please call me with any questions you may have. Very truly yours, BARNES & THORNBURG LLP ~/~ Philip J. Faccenda, Jr. PJF:ske Enclosures cc: John E. Broden, Esq. (w/enc.) SBDS02 PFACCENDA 411269v1 O CT ?. 0 2010 ~C:ifl UGG1iGE CITY C!._i?K, S9. B~ttG,1N. Atlanta Chicago Delaware Indiana Michigan Minneapolis Ohio Washington, D.C.