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HomeMy WebLinkAboutNo. 2153 authorizing issuance of bonds of the SB redevelopment district for purpose of raising money for certain local public improvements in downtown medical services district allocation area0 RESOLUTION NO. 2253 A BOND RESOLUTION OF THE SOUTH BEND REDEVELOPMENT COMMISSION AUTHORIZING THE ISSUANCE OF BONDS OF THE SOUTH BEND REDEVELOPMENT DISTRICT FOR THE PURPOSE OF RAISING MONEY FOR CERTAIN LOCAL PUBLIC IMPROVEMENTS IN THE DOWNTOWN MEDICAL SERVICES DISTRICT ALLOCATION AREA WHEREAS, the South Bend Redevelopment Commission (the "Commission "), the governing body of the City of South Bend, Indiana, Redevelopment District (the "Redevelopment District "), exists and operates under Indiana Code 36 -7 -14, as amended from time to time (the "Act "); and WHEREAS, the Commission did, on May 10, 1985, adopt Resolution No. 737 (the "Declaratory Resolution ") declaring the South Bend Central Development Area (the "Area "), an area in the City of South Bend, Indiana (the "City "), to be a blighted area within the meaning of Ind. Code § 36 -7--14 (the "Act ") and approving a Redevelopment Plan for the Area (the "Plan ") pursuant to the Act; and WHEREAS, the Declaratory Resolution was confirmed by the Commission on June 14, 1985 by Resolution 739; and WHEREAS, the Commission has adopted various resolutions amending the Area and the Plan to include certain real estate located in the Redevelopment District; and WHEREAS, Section 17.5 of the Act provides for the means for amending a resolution or plan in a way that enlarges the boundaries of a redevelopment area by not more than twenty percent (20 %) of the original redevelopment area; and WHEREAS, Section 39 of the Act permits the creation of an allocation area within a blighted area to provide for the allocation and distribution, as provided by the Act, of the proceeds of taxes levied on property situated in the allocation area; and WHEREAS, the Commission, by Resolution No, 1737 (the "Amending Resolution ") adopted on February 18, 2000, expanded the Area by adding Expansion Area No. 4 (as described in the Amending Resolution) and designated Expansion Area No. 4 as an allocation area for purposes of Section 39 of the Act, which allocation area is known as the Downtown Medical Services District Allocation Area (the "Allocation Area ") and established an allocation fund for the Allocation Area designated the "City of South Bend, Department of Redevelopment, South Bend Central Development Area, Downtown Medical Services District Allocation Fund" (the "Allocation Fund "); and BDDB01 40102160 WHEREAS, pursuant to the terms of the Amending Resolution, the allocation provision for the Allocation Area shall expire on December 31, 2015; and WHEREAS, the Commission and Memorial Hospital and Health Systems ( "Memorial ") have entered into a development agreement (the "Agreement ") whereby the Commission has agreed to undertake certain public improvements to provide for the continued expansion of Memorial's hospital and medical facilities located near the southwest corner of the intersection of Bartlett and Michigan Streets in the City to meet the increasing medical and health needs of the citizens in and around the City; and WHEREAS, pursuant to the Agreement, the Commission desires to issue bonds of the Redevelopment District (the "Bonds ") payable from tax increment financing revenues produced within the Allocation Area and any other revenues available to the Commission and pledged for such purpose to procure funds to finance certain local public improvements consisting of the relocation of Bartlett Street beginning from Michigan Street and continuing west to Lafayette Boulevard to a location beginning just south of the current intersection of Michigan Street and Park Lane and continuing southwest to a location just north of the current intersection of Lafayette Boulevard and Bartlett Street, which includes the construction, installation and equipping of a new intersection involving Bartlett Street and Park Lane, and the relocation, equipping and expansion of the intersections of Bartlett Street and Michigan Street and of Bartlett Street and Lafayette Boulevard, and other related infrastructure improvements (collectively, the "Project ") pursuant to the Act, subject to and dependent upon the terms and conditions hereinafter set forth; and WHEREAS, with regard to taxes levied on real property in the Allocation Area, property tax proceeds in excess of those attributable to (i) the proceeds of taxes attributable to property that is assessed as residential property under the rules of the Department of Local Government Finance for those areas added to the Area after June 30, 1995, and (ii) the lesser of: (a) The assessed value of the property for the assessment date with respect to which the allocation and distribution is made; or (b) The base assessed value as defined in the Act; shall be allocated to the Redevelopment District and, when collected, paid into the Allocation Fund, and may be used by the Commission only to do one or more of the following: (a) pay the principal of and interest on any obligations payable solely from allocated tax proceeds which are incurred by the Redevelopment District for the purpose of financing or refinancing the redevelopment of the Allocation Area; (b) establish, augment, or restore the debt service reserve for bonds payable solely or in part from allocated tax proceeds in the Allocation Area; -2- BDDBOI 40102160 (c) pay the principal of and interest on bonds payable from allocated tax proceeds in the Allocation Area and from the special tax levied under Section 27 of the Act; (d) pay the principal of and interest on bonds issued by the City to pay for local public improvements in or serving the Allocation Area; (e) pay premiums on the redemption before maturity of bonds payable solely or in part from allocated tax proceeds in the Allocation Area; (f) make payments on leases payable from allocated tax proceeds in the Allocation Area under Section 25.2 of the Act; (g) reimburse the City for expenditures made by it for local public improvements (which include buildings, parking facilities, and other items described in Section 25.1(a) of the Act) in or serving the Allocation Area; (h) reimburse the City for rentals paid by it for a building or parking facility in or serving the Allocation Area under any lease entered into under Indiana Code 36 -1 -10; (i) pay all or a portion of a property tax replacement credit to taxpayers in the Allocation Area as determined by the Commission, pursuant to Section 39 of the Act; (j) pay expenses incurred by the Commission for local public improvements that are in the Allocation Area or serving the Allocation Area. Public improvements include buildings, parking facilities, and other items described in Section 25.1(a) of the Act; or (k) reimburse public and private entities for expenses incurred in training employees of industrial facilities that qualify under the Act; provided however, that if further uses of property tax proceeds allocated to the Allocation Fund are authorized or permitted by amendment to the Act, including Indiana Code 36- 7- 14 -39, those uses shall also be authorized or permitted for property tax proceeds allocated to the Allocation Fund; and WHEREAS, the Act authorizes the issuance of bonds of the Redevelopment District payable solely from allocated tax proceeds; and WHEREAS, the Commission finds that, in order to provide funds for the payment of the cost of redevelopment and economic development in the Allocation Area it will be necessary and in the best interest of the Redevelopment District and the property and inhabitants thereof to issue bonds of the Redevelopment District which shall be payable from taxes on real property located in the Allocation Area and from proceeds from the sale or leasing of property in the Allocation Area, under Ind. Code § 36- 7 -14 -22 deposited in the Allocation Fund as required by Indiana Code 36- 7 -14 -26 (the "Tax Increment ") (with such other revenues that may be made -3- nooso1 4oro2160 available to the Commission and pledged for such purpose being defined for all purposes herein as Tax Increment) and deposited in the Allocation Fund, in an aggregate principal amount not to exceed Two Million Five Hundred Thousand and 00 /100 Dollars ($2,500,000.00) and which amount does not exceed the cost of the redevelopment and economic development in the Allocation Area, together with a sum sufficient to pay the estimated cost of all expenses reasonably incurred in connection with the redevelopment and economic development of the Allocation Area, including the total cost of all reasonable and necessary architectural, engineering, legal, financing, accounting, advertising, bond discount and supervisory expenses, capitalized interest and a debt reserve for the bonds to the extent the Commission determines that a reserve is reasonably required, together with the expenses in connection with or on account of the issuance of bonds therefor; and WHEREAS, the Commission now desires to issue revenue bonds of the Redevelopment District in an aggregate principal amount not to exceed Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00); NOW THEREFORE, BE IT RESOLVED by the South Bend Redevelopment Commission as follows: SECTION 1. For the purpose of procuring funds to pay for the cost of the redevelopment and economic development of the Allocation Area, including the Project, together with a sum sufficient to pay the estimated cost of all expenses reasonably incurred in connection with the redevelopment and economic development of the Allocation Area, including the total cost of all reasonable and necessary architectural, engineering, legal, financing, accounting, advertising, bond discount and supervisory expenses, capitalized interest and a debt service reserve for said bonds as set forth herein, together with the expenses in connection with or on account of the issuance of said bonds, the City acting for and on behalf of the Redevelopment District, shall make a loan in the aggregate principal amount not to exceed Two Million Five Hundred and 00 /100 Dollars ($2,500,000.00). In order to procure funds for said loan, the Controller is hereby authorized and directed to have prepared and to issue and sell the negotiable bonds of the Redevelopment District, which bonds shall be issued in the name of the City, for and on behalf of the Redevelopment District and which shall be designated "City of South Bend, Indiana, Redevelopment District Revenue Bonds of 2005 (Bartlett Street Relocation Project)" in an aggregate principal amount not to exceed Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00) (the 'Bonds "), and which amount (together with investment earnings thereon in the estimated amount of Fifty Thousand and 00/100 Dollars ($50,000.00)) does not exceed the cost, as estimated by the Commission, of the redevelopment and economic development of the Allocation Area, together with a sum sufficient to pay the estimated cost of all expenses reasonably incurred in connection with the redevelopment and economic development of the Allocation Area, including the total cost of all reasonable and necessary architectural, engineering, legal, financing, accounting, advertising, bond discount and supervisory expenses, capitalized interest and a debt service reserve for the Bonds as provided herein, together with the expenses in connection with or on account of the issuance of the Bonds therefor. -4- BDDB01 4010216v3 The Bonds shall not constitute a corporate obligation or indebtedness of the City, but shall constitute an obligation of the Redevelopment District. The Bonds, together with interest thereon, shall be payable out of the Tax Increment and such other revenues that may be available to the Commission and pledged for such purpose. The Bonds shall be issued in fully registered form in the denomination of Five Thousand Dollars ($5,000) or an integral multiple thereof in the event they are publicly sold and otherwise in the denomination of One Hundred Thousand Dollars ($100,000) or any integral multiple of $1,000 in excess thereof (the "Authorized Denomination ") not exceeding the aggregate principal amount of Bonds maturing in any one (1) year. The Bonds shall be numbered consecutively from 2005R -1 upwards and shall bear interest payable semiannually commencing August 1, 2005, or such later date as may be set forth in the Issuer's Certificate, defined herein, and each February 1 and August I thereafter, at a rate or rates not to exceed eight percent (8 %) (the exact rate or rates of interest to be determined by negotiated sale as set forth in Section 9 hereof) or such lower rate or rates for such maturities as may be determined by the President of the Commission and the Controller and set forth in a certificate of the City executed by the President of the Commission and the Controller prior to the sale of the Bonds, establishing certain provisions and details with respect to the Bonds (hereinafter referred to as the "Issuer's Certificate "). Interest shall be calculated on the basis of twelve (12) thirty (30) -day months for a three hundred sixty (360) -day year. The Bonds shall mature annually beginning on February 1, 2006, or such later date as may be set forth in the Issuer's Certificate, and thereafter on each February 1 through and including February 1, 2016, or such earlier final maturity date and in such annual principal amounts set forth in the Issuer's Certificate. A Registrar and Paying Agent (the "Registrar" or the "Paying Agent" or in both such capacities as the "Registrar and Paying Agent ") shall be appointed by the Controller. The Controller is hereby authorized to solicit and receive proposals with regard to the services of a registrar and paying agent. The Registrar and Paying Agent is hereby charged with and shall by appropriate agreement undertake the performance of all of the duties and responsibilities customarily associated with each such position, including without limitation authenticating the Bonds. The Registrar shall keep and maintain at its principal office books for the registration and for the transfer of the Bonds (the "Bond Register "). The President of the Commission and the Controller are hereby authorized and directed, on behalf of the Commission, to enter into such agreements or understandings with the Registrar and Paying Agent as will enable the Registrar and Paying Agent to perform the services required of a registrar and a paying agent, and is authorized and directed to pay the Registrar and Paying Agent for its services out of available funds. The principal of and premium, if any, on the Bonds shall be payable at the principal office of the Paying Agent for the Bonds. Interest on the Bonds shall be paid by check or draft mailed or delivered to the registered owners thereof at the address as it appears on the Bond Register as of the last day of the month immediately preceding the interest payment date or at such other address as is provided to the Paying Agent in writing by such registered owners. All payments on the Bonds shall be made in any coin or currency of the United States of America which on the dates of such payments shall be legal tender for the payment of public and -5- BDDB0140102160 private debts. The President of the Commission and the Controller are hereby authorized and directed, on behalf of the Commission, to enter into such agreements or understandings with the Paying Agent as will enable the Paying Agent to perform the services required of a paying agent, and is directed to pay reasonable and customary fees to the Paying Agent for its services out of available funds. Unless as otherwise provided herein, the Bonds shall, in compliance with all applicable laws, be initially issued and held in book -entry form and registered in the name of Cede & Co., as nominee for The Depository Trust Company without physical distribution of Bonds to the purchasers thereof. The President of the Commission is hereby authorized to take such action as may be necessary to provide for the Bonds to be issued in book - entry -only form, including without limitation executing a Blanket Issuer Letter of Representations. At the determination of the President of the Commission and the Controller to be set forth in the Issuer's Certificate, the Bonds may be initially issued in certificate form and be physically delivered to the purchaser of the Bonds. The Bonds shall bear an original date which shall be the date upon which the Bonds are to be delivered (the "Original Date") and each Bond shall also bear the date of its authentication. Bonds authenticated on or before July 15, 2005, shall be paid interest from the Original Date. Bonds authenticated after July 15, 2005, shall pay interest from the interest payment date immediately preceding the date of authentication of such Bonds unless the Bonds are authenticated between the fifteenth day of the month preceding an interest payment date and the interest payment date, in which case interest thereon shall be paid from such interest payment date. Each Bond shall be transferable or exchangeable only upon the Bond Register by the registered owner thereof in person, or by his attorney duly authorized in writing, upon surrender of such 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. Bonds may be transferred or exchanged without cost to the registered owner, except for any tax or governmental charge required to be paid with respect to the exchange. The Registrar shall not be required to transfer or exchange any Bond called for redemption or during the period from the fifteenth day of any calendar month immediately preceding an interest payment date to such interest payment date. The City, the Commission, the Registrar and the Paying Agent may treat and consider the person in whose name such Bonds are registered as the absolute owner thereof for all purposes including for the purpose of receiving payment of, or on account of, the principal thereof and interest due thereon. In the event any Bond is mutilated, lost, stolen or destroyed, the City may execute on behalf of the Redevelopment District 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 -6- BDDB01 40102160 the City and 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 lost, stolen or destroyed 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 Bond with their reasonable fees and expenses in connection with the above. Every substitute Bond issued by reason of any Bond being lost, stolen or destroyed shall, with respect to such Bonds, constitute a substitute contractual obligation of the City, acting for and on behalf of the Redevelopment District, whether or not the lost, stolen or destroyed Bond shall be found at any time, and shall be entitled to all the benefits of this Resolution, equally and proportionately with any and all other Bonds duly issued hereunder. The Registrar or the Paying Agent may at any time resign as Registrar or Paying Agent by giving thirty (3 0) days' written notice to the Commission and by first -class mail to each registered owner of 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 or Paying Agent, as the case may be, by the Commission. Such notice to the Commission may be served personally or be sent by registered mail. The Registrar or Paying Agent may be removed at any time as Registrar or Paying Agent by the Commission, in which event the Commission may appoint a successor Registrar or Paying Agent as the case may be. The Commission shall notify each registered owner of Bonds then outstanding by first -class mail of the removal of the Registrar or Paying Agent. Notices to registered owners of 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 00 Bond Register. Any predecessor Registrar shall deliver all the Bonds in its possession and the Bond Register to the successor Registrar and any predecessor Paying Agent shall deliver all the cash in its possession to the successor Paying Agent. The Bonds shall be executed in the name of the City, acting for and on behalf of the Redevelopment District, by the manual or facsimile signature of the Mayor of the City and attested by the manual or facsimile signature of the Controller, who shall cause the official seal of the City to be impressed or a facsimile thereof to be printed on each of the Bonds. Subject to the provisions for registration, the Bonds shall be negotiable under the laws of the State of Indiana. The Bonds shall be authenticated with the manual signature of an authorized representative of the Registrar, and no Bonds shall be valid or obligatory for any purpose or be entitled to any security or benefit under this Resolution until the certificate of authentication on such Bond shall have been so executed. SECTION 2. a. Optional Redemption. The Bonds may be subject to redemption at the option of the Commission at the times determined by President of the Commission and the Controller, upon the advice of the Commission's financial advisor, and set forth in the Issuer's Certificate, only in Authorized Denominations, as a whole or in part from time to time (with the maturities and amounts of the Bonds to be redeemed to be selected by the Commission), at face value plus interest accrued on the Bonds so redeemed to the -7- BDDB01 40102160 date fixed for redemption, and according to the premiums, if any, determined by the President of the Commission and the Controller as set forth in the Issuer's Certificate. Unless waived by any holder of Bonds to be redeemed, official notice of any such redemption shall be given by the Registrar on behalf of the Commission identifying the Bonds, by mailing a copy of an official redemption notice by registered or certified mail at least thirty (30) days and not more than sixty (60) days prior to the date fixed for redemption to the registered owner of the Bond or Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such registered owner to the Registrar; provided, however, that failure to give such notice by mailing, or any defect therein, with respect to any Bond shall not affect the validity of any proceedings for the redemption of other Bonds. All official notices of redemption shall be dated and shall state: (1) the redemption date, (2) the redemption price, (3) if less than all outstanding Bonds are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed, (4) that on the redemption date the redemption price will become due 40 and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and (5) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the place provided for the payment of the principal of and premium, if any, on the Bonds. Prior to any redemption date, the Commission shall deposit with the Paying Agent an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date. Official notice of redemption having been given as aforesaid, the Bonds or portions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the Commission shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Paying Agent at the redemption price. Bonds redeemed in part may be exchanged for a Bond or Bonds of the same maturity in Authorized Denominations equal to the remaining principal amount. In addition to the foregoing notice, further notice may be given by the Registrar as it deems appropriate by mail, publication or otherwise to registered securities depositories, national information services or others containing the above information and such further -8- BDDB01 4oro2160 information as the Registrar may deem appropriate, but no defect in said further notice, nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above described. b. Mandatory Sinking Fund Redemption. At the option of the purchaser for the Bonds, all or a portion of the Bonds may be aggregated into one (1) 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 February 1 of the years 2007 through and including 2016, or such other years as may be set forth in the Issuer's Certificate or as determined by the successful bidder. In the event that the successful bidder opts to aggregate certain 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 February 1 of each year and in the principal amounts corresponding to and consistent with the maturity schedule for the Bonds set forth in the Issuer's Certificate. The Registrar and Paying Agent shall credit against the current mandatory sinking fund requirement for a Term Bond of a particular maturity, any 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 Bond so delivered or purchased shall be credited by the Registrar and Paying Agent at 100% of the 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 Board, 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 Bonds against the mandatory sinking fund requirements to the extent such 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 Bond as a separate Bond for such purpose) the Bonds within a Tenn Bond of a particular maturity to be redeemed pursuant to the mandatory sinking fund redemption requirements on February 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 2 of this Resolution. If Bonds are to be redeemed by optional redemption and mandatory sinking fund redemption on the same date, the Registrar shall select by lot the Bonds for optional redemption before selecting the Bonds by lot for the mandatory issinking fund redemption. -9- BDDBOI 4O102I60 In the event any of the Bonds are issued as Term Bonds, the form of the Bond set forth in Section 3 of this Resolution shall be modified accordingly. Any reference to payment of principal on the Bonds shall include payment of scheduled mandatory sinking fund redemption payments described in this Section 2. SECTION 3. The form and tenor of the Bonds shall be substantially as follows (all blanks to be properly completed prior to the preparation of the Bonds): UNITED STATES OF AMERICA STATE OF INDIANA ST. JOSEPH COUNTY No. 2005R- $ CITY OF SOUTH BEND, INDIANA, REDEVELOPMENT DISTRICT REVENUE BOND OF 2005 (BARTLETT STREET RELOCATION PROJECT) Interest Rate Maturity Date Original Date Authentication Date 40 Registered Owner: Principal Sum: The City of South Bend, Indiana (the "City"), acting for and on behalf of the City of South Bend, Indiana, Redevelopment District (the "Redevelopment District"), for value received, hereby promises to pay to the Registered Owner stated above, or registered assigns, but solely from (i) taxes on real property located in the Downtown Medical Services District Allocation Area ("the Area") allocated and deposited in the City of South Bend, Department of Redevelopment, South Bend Central Development Area, Downtown Medical Services District Allocation Fund created for the Area (the "Allocation Fund") pursuant to Indiana Code 36-7-14-39, and proceeds from the sale or leasing of property in the Area under Indiana Code 36-7-14-22 deposited in the Allocation Fund as required by Indiana Code 36-7-14-26 (the "Tax Increment") and (ii) such other revenues that may be made available to the City of South Bend, Indiana, Redevelopment Commission (the "Commission") for such purpose (collectively with the Tax Increment, the "Revenues"), the Principal Sum stated above, on the Maturity Dates stated above and to pay interest on said Principal Sum to the Registered Owner of this bond until the City's obligation with respect to the payment of said Principal Sum shall be discharged, at the rate per annum specified above from the interest payment date next preceding the date of authentication of this bond, unless this bond is authenticated on or before July 15, 2005, in which case the interest shall be paid from the Original Date stated above or unless this bond is authenticated between the fifteenth day of the month preceding an interest payment date and the interest payment date, in which case interest shall be paid from such interest payment date. Interest is payable on August 1, 2005, and semiannually thereafter on February I and August 1 of each year by check or draft. Interest shall be calculated on the basis of twelve (12) thirty-day months for a three hundred sixty (360)-day year. The principal of and premium, if any, on this bond are payable at the principal office of — in , Indiana, as Paying Agent (which term shall include any successor Paying Agent). Interest on this bond shall be paid by check or draft mailed or delivered to the Registered Owner hereof at the is address as it appears on the books kept by — in , Indiana, as Registrar (which term shall -10- BDDB01 40102160 include any successor Registrar), for the registration and for the transfer of the bonds (the 'Bond Register ") as of the fifteenth day of the month immediately preceding the interest payment date or at such other address as is provided to the Paying; Agent in writing by the Registered Owner. All payments on this bond shall be made in lawful money of the United States of America. This bond, together with interest thereon, does not constitute a corporate obligation or indebtedness of the City, but the same is an obligation of the Redevelopment District, which is a special taxing district having the same boundaries as the City. Subject to the provisions for registration, this bond is negotiable under the laws of the State of Indiana. This bond is one of an authorized issue of bonds of the City of South Bend, Indiana, Redevelopment District in the aggregate principal amount of Two Million Five Hundred Thousand Dollars ($2,500,000), numbered consecutively from 2005R -1 upwards, issued pursuant to a resolution entitled "A BOND RESOLUTION OF THE SOUTH BEND REDEVELOPMENT COMMISSION AUTHORIZING THE ISSUANCE OF BONDS OF THE SOUTH BEND REDEVELOPMENT DISTRICT FOR THE PURPOSE OF RAISING MONEY FOR CERTAIN LOCAL PUBLIC IMPROVEMENTS IN THE DOWNTOWN MEDICAL SERVICES DISTRICT ALLOCATION AREA" (the "Resolution ") adopted by the Commission on March 18, 2005, and in strict compliance with Indiana Code 36 -7 -14, for the purpose of procuring funds to pay for the cost of the redevelopment and economic development of the Area, together with a sum sufficient to pay the estimated cost of all expenses reasonably incurred in connection with the redevelopment and economic development of the Area, including the total cost of all reasonable and necessary architectural, engineering, legal, financing, accounting, advertising, bond discount and supervisory expenses, and capitalized interest for the bonds as set forth in the Resolution, together with the expenses in connection with or on account of the issuance of the bonds, all as described in the Resolution. Reference is hereby made to the Resolution for a description of the nature and extent of the rights, duties and obligations of the owners of the bonds, the City and the Commission and the terms on which this bond is issued, and to all the provisions of the Resolution to which the owner hereof by the acceptance of this bond assents. Bonds of this issue maturing on , and thereafter, are redeemable on and on any date thereafter at the option of the Commission in whole or in part (only in authorized denominations of Five Thousand Dollars ($5,000) or integral multiples thereof), with the maturities and amounts of bonds to be redeemed to be selected by the Commission. Bonds so redeemed shall be redeemed on such redemption date at a price of 100% of the principal amount of the bonds outstanding to be redeemed plus interest accrued on the bonds so redeemed to the date fixed for redemption, and with the following premium:[ .] In addition, and subject to the provisions of the Resolution permitting amounts to be credited toward a part or all of mandatory sinking fund requirements in order of mandatory redemption dates determined by the Commission, the Bonds maturing February 1, , and (the "Term Bonds "), are subject to redemption in part through application of mandatory sinking fund payments as provided in the Resolution beginning on February I in the years and respectively, and on each February 1 thereafter 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 the dates and in the principal amounts indicated below: Date * Final Maturity Bonds Due Principal Amount is Unless waived by any holder of bonds to be redeemed, official notice of any such redemption shall be given by the Registrar on behalf of the Commission by mailing a copy of an official redemption notice by -11- BDDB01 40102160 registered or certified mail at least thirty (30) days and not more than sixty (60) days prior to the date fixed for redemption to the registered owner of the bond or bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such registered owner to the Registrar; provided, however, that failure to give such notice, or any defect therein, with respect to any bond shall not affect the validity of any proceedings for the redemption of other bonds. Official notice of redemption having been given as aforesaid, the bonds, or portions of bonds so to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the Commission shall default in the payment of the redemption price) such bonds or portions of bonds shall cease to bear interest. Upon surrender of such bonds for redemption in accordance with said notice, such bonds shall be paid by the Paying Agent at the redemption price. Bonds redeemed in part may be exchanged for a bond or bonds of the same maturity in Authorized Denominations equal to the remaining principal amount. The principal of and premium, if any, and interest on this bond and all other bonds of the issue of which this bond is a part are payable out of the Revenues. This bond is transferable or exchangeable only upon the Bond Register by the Registered Owner hereof 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. Bonds shall not be sold or transferred in principal amounts of less than $100,000 without the opinion of counsel that the sale or transfer conforms to securities laws. This bond may be transferred or exchanged without cost to the Registered Owner, except for any tax or governmental charge required to be paid with respect to the exchange. The Registrar shall not be required to transfer or exchange this bond if it has been called for redemption or during the period from the fifteenth day of any calendar month immediately preceding an interest payment date to such interest payment date. The City, the Commission, the Registrar and Paying Agent 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. In the manner provided in the Resolution, the Resolution and the rights and obligations of the Commission and of the owners of the bonds may (with certain exceptions as stated in the Resolution) be modified or amended with the consent of the owners of at least sixty percent (60 %) in aggregate principal amount of outstanding bonds exclusive of bonds, if any, owned by the Commission or the City. In the event this 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 this bond, which new bond shall be marked in a manner to distinguish it from this bond; provided, that in the case of this bond being mutilated, this bond shall first be surrendered to the City and the Registrar, and in the case of this bond being lost, stolen, or destroyed, there shall first be furnished to the City and 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 that this bond, being lost, stolen or destroyed, shall have matured, instead of issuing a duplicate bond the City and the Registrar may, upon receiving indemnity satisfactory to them, pay this bond without surrender hereof. The City and the Registrar may charge the owner of this bond with their reasonable fees and expenses in connection with the above. Every substitute bond issued by reason of this bond being lost, stolen or destroyed shall, with respect to this bond, constitute a substitute contractual obligation of the City, acting for and on behalf of the South Bend Redevelopment District, whether or not this bond, being lost, stolen or destroyed shall be found at any time and shall be entitled to all the benefits of the Resolution, equally and proportionately with any and all other bonds duly issued thereunder. The Registrar or Paying Agent may at any time resign as Registrar or Paying Agent by giving thirty (30) days' written notice to the Commission and by first -class mail to the registered owners of 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 or Paying Agent, as the case may be, by the Commission. Such notice to the Commission -12- BDDB01 40102160 may be served personally or be sent by registered mail. The Registrar or the Paying Agent may be removed at any time as Registrar or Paying Agent by the Commission, in which event the Commission may appoint a successor Registrar or Paying Agent, as the case may be. The Commission shall cause the registered owner of this bond to be notified, if then outstanding, by first -class mail, of the removal of the Registrar or Paying Agent. Notices to registered owners of bonds shall be deemed to be given when mailed by first -class mail to the addresses of such registered owners as they appear in the registration books kept by the Registrar. If this bond or a portion thereof shall have become due and payable in accordance with its terms or shall have been duly called for redemption or irrevocable instructions to call this bond or a portion thereof for redemption shall have been given, and the whole amount of the principal or and premium, if any, and interest, so due and payable upon all of this bond or a portion thereof then outstanding shall be paid or (i) sufficient monies for such purpose, or (ii) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, the principal of and the interest on which when due will provide sufficient monies for such purpose, or (iii) time certificates of deposit fully secured as to both principal and interest by obligations of the kind described in (ii) above of a bank or banks, the principal of and interest on which when due will provide sufficient monies for such purpose, shall be held in trust for such purpose, and provision shall also have been made for paying all fees and expenses in connection with the redemption, then and in that case this bond or such portion thereof shall no longer be deemed outstanding or an indebtedness of the Redevelopment District. It is hereby certified and recited that all acts, conditions and things required by law and the Constitution of the State of Indiana to be done precedent to and in the execution, issuance, sale and delivery of this bond have been properly done, happened and performed in regular and due form as prescribed by law, and that the issuance of this bond by the Redevelopment District does not cause any constitutional or statutory limitation of indebtedness to be exceeded. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolution authorizing this Bond until the certificate of authentication hereon shall have been duly executed by an authorized representative of the Registrar. IN WITNESS WHEREOF, the South Bend Redevelopment Commission has caused this bond to be executed in the name of the City, acting for and on behalf of the City of South Bend, Indiana, Redevelopment District, by the manual or facsimile signature of the Mayor of the City and attested by the manual or facsimile signature of the Controller, who has caused the seal of the City to be impressed or a facsimile thereof to be printed hereon. (Seal of the City) ATTEST: Controller CITY OF SOUTH BEND, INDIANA, ACTING FOR AND ON BEHALF OF THE SOUTH BEND REDEVELOPMENT DISTRICT Mayor Registrar's Certificate of Authentication This bond is one of the bonds described in the within mentioned Resolution. -13- BDDB01 40102160 0 AS REGISTRAR, Authorized Representative The following abbreviations, when used in the inscription of 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 rights of survivorship and not as tenants in common UNIF GIFT MIN ACT Custodian (Gust.) (Minor) under Uniform Gifts to Minors Act of (State) 10 Additional abbreviations may also be used although not in the above list, 11 ASSIGNMENT For value received, the undersigned hereby sells and transfers unto (Please print or typewrite name and address of transferee) this bond and all rights hereunder and hereby irrevocably constitutes and appoints , attorney, to transfer this bond on the books kept for the registration hereof with full power of substitution in the premises. Date: Signature Guaranteed: BDDB01 40102160 NOTICE: The signature to this assignment must correspond with the name of the Registered Owner as it appears on the face of the within bond in every particular, without alteration or enlargement or any change whatsoever. NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution participating in a Securities Transfer Association recognized signature guarantee program. (End of Bond Form) SECTION 4. There are hereby created and established in the Allocation Fund (i) a Tax Increment Revenue Account, into which all Tax Increment received (including any Tax Increment on deposit in the Allocation Fund as of the date of delivery of the Bonds and any other revenues of the Commission available and pledged for such purpose) shall be deposited and held in reserve for payment of debt service on the Bonds pursuant to this Resolution and Indiana Code 36- 7- 14 -39, (ii) a Bond Principal and Interest Account, (iii) a Reserve Account, and (iv) a General Account, each of which the Controller and the Commission hereby covenant and agree to cause to be kept and maintained. On July 15, 2005, and each January 15 and July 15 thereafter, all monies in the Tax Increment Revenue Account shall be set aside in the following accounts within the Allocation Fund, in the following order of priority: (a) Bond Principal and Interest Account. There shall be set aside within the Allocation Fund and deposited into the Bond Principal and Interest Account from the Tax Increment Revenue Account, to the extent available, an amount of money which, together with any money contained therein, is equal to the aggregate amount of the principal and interest due during that bond year with respect to the Bonds. For this purpose, a "bond year" shall be deemed to be a year from February 2 to and including the following February 1. No deposit need be made into the Bond Principal and Interest Account if the amount contained therein is at least equal to the aggregate amount of principal and interest due and payable with respect to the Bonds during the remainder of that bond year. All money in the Bond Principal and Interest Account shall be used and withdrawn solely for the purpose of paying the interest on and the principal of the Bonds as it shall become due and payable to the extent it is required therefor (including accrued interest on any Bonds purchased or redeemed prior to maturity). (b) Reserve Account. There shall be set aside from the Allocation Fund and deposited in the Reserve Account from the Tax Increment Revenue Account an amount of money that shall be required to maintain the Reserve Account in the full amount of the Debt Service Reserve Requirement (as defined below). The Commission may determine to fund the Debt Service Reserve Requirement over a period not to exceed five (5) years from the date of delivery of the Bonds by causing to be set aside from the Allocation Fund and deposited in the Reserve Account from the Tax Increment Revenue Account a sufficient amount of revenue so that the amount of the deposit together with any funds previously deposited into the Reserve Account shall be sufficient to satisfy the Debt Service Requirement within such period. Such determination of the Commission shall be set forth in the Issuer's Certificate. The Debt Service Reserve Requirement shall be deemed to be satisfied if there is on deposit in the Debt Service Reserve Account any surety bond, insurance policy, guaranty, letter of credit or other credit facility in any amount equal to such portion , the issuer of which credit facility is rated at least "AAA" -15- BDDB01 40102160 by Standard & Poor's Ratings Group or "Aaa" by Moody's Investor Service. No deposit need be made in the Reserve Account so long as there shall be on deposit a sum equal to the least of (i) the maximum annual debt service on the bonds, or (ii) one and one - quarter (1' /d) times the average annual debt service on the Bonds, or (iii) ten percent (10 %) of the proceeds of the Bonds within the meaning of Section 148(d) of the Internal Revenue Code of 1986, as amended (the "Code ") (the "Debt Service Reserve Requirement "). All money in the Reserve Account shall be used and withdrawn by the City solely for the purpose of making deposits into the Bond Principal and Interest Account, in the event of any deficiency at any time in such account, or for the purpose of paying the interest on or principal of or redemption premiums, if any, on the Bonds in the event that no other money is lawfully available therefor, except that so long as there is no default hereunder, any amount in the Reserve Account in excess of the Debt Service Reserve Requirement shall be withdrawn from the Reserve Account and deposited in the General Account. Money in the Reserve Account shall also be available to the final payments of interest and principal on the Bonds. (c) General Account. The remaining amounts in the Tax Increment Revenue Account shall be deposited into the General Account of the Allocation Fund and available only to do one (1) or more of the following: (1) pay the principal of and interest on any obligations (including the Bonds) payable solely from allocated tax proceeds which are incurred by the Redevelopment District for the purpose of financing or refinancing the redevelopment or economic development of the Allocation Area; (2) establish, augment, or restore the debt service reserve for bonds (including the Bonds) payable solely or in part from allocated tax proceeds in the Allocation Area; (3) pay the principal of and interest on bonds payable from allocated tax proceeds in the Allocation Area; (4) pay the principal of and interest on bonds issued by the City to pay for local public improvements in or serving the Allocation Area; (5) pay premiums on the redemption before maturity of bonds payable solely or in part from allocated tax proceeds in the Allocation Area; (6) make payments on leases payable from allocated tax proceeds in the Allocation Area under Section 25.2 of the Act; (7) reimburse the City for expenditures made by the City for local public improvements (which include buildings, parking facilities, and other items described in Section 25.1(a) of the Act) within or serving the Allocation Area; -16- BDDBOI 40102160 (8) reimburse the City for rentals paid by the City for a building or parking facility within or serving the Allocation Area under any lease entered into under IC 36 -1 -10; (9) pay all or a portion of a property tax replacement credit to taxpayers in the Allocation Area as determined by the Commission pursuant to Section 39 of the Act; (10) pay expenses incurred by the Commission for local public improvements that are in the Allocation Area or serving the Allocation Area. Public improvements include buildings, parking facilities, and other items described in Section 25.1(a) of the Act; or (11) reimburse public and private entities for expenses incurred in training employees of industrial facilities that qualify under the Act; provided however, that if further uses of property tax proceeds allocated to the Allocation Fund are authorized or permitted by amendment to the Act, including Section 39 of the Act, those uses shall also be authorized or permitted for property tax proceeds allocated to the Allocation Fund. (d) When the money in the Allocation Fund is sufficient to pay when due all principal and interest payments for that year on bonds (including the Bonds) described in subsection (c), and is not needed for that year for the other purposes described in subsection (c) (including without limitation the maintaining of property taxes collected in a given year in the Allocation Fund as a reserve to pay principal and interest on the Bonds payable in the year following such year of collection in the manner and at the times specified herein), money in the Allocation Fund in excess of that amount (the "Excess Funds ") shall be paid to the Controller who shall, during the time a part of the Allocation Area is located in an enterprise zone created under IC 4- 4 -6.1, deposit such Excess Funds in a special fund created for the enterprise zone and used as required by law; provided, however, to the extent portions of the Allocation Area are not within the enterprise zone, the Excess Funds deposited into the special fund shall be reduced on a pro rata basis based on the percentage of the enterprise zone contained in the Allocation Area as provided in Section 39(g) of the Act. When no part of the Allocation Area is located in an enterprise zone then the Excess Funds shall be deposited as provided in subsection (e). (e) Except as provided in subsection (d), before July 15 of each year, the Commission shall (1) determine the amount, if any, of Excess Funds in the following year; and (2) notify the Auditor of St. Joseph County of the amount, if any, of the Excess Funds that the Commission has determined may be paid to the respective taxing units entitled thereto, provided that the Commission may not authorize a payment to the respective taxing units under this subsection if to do so would endanger the interests of the holders of the bonds (including the Bonds) described in subsection (c) of this Section 4. -17- BDDB01 4010216x3 (f) The Tax Increment, other than the excess funds shall be irrevocably pledged for the purpose set forth in this Section 4. (g) All money in each of the accounts in the Allocation Fund shall be held in trust for the benefit of the holders of the Bonds and shall be applied, used and withdrawn only for the purposes authorized in this Section 4. The proceeds of the Allocation Fund shall be deposited with a legally qualified depository or depositories for funds of the City as now provided by law and shall be segregated and kept separate and apart from all other funds of the City and may be invested as permitted by law. Interest earned in each account or fund established under this Resolution shall be credited thereto. (a) The Redevelopment District reserves the right to authorize and issue additional bonds ( "Parity Bonds "), payable out of the Tax Increment, ranking on a parity with the Bonds authorized by this Resolution and payable ratably from the Tax Increment for the purpose of raising money for future property acquisition, redevelopment and economic development in or serving the Allocation Area. In the event any Parity Bonds are issued pursuant to this Section 5(a), the term "Bonds" in this Resolution shall, unless the context otherwise requires, be deemed to refer to the bonds authorized to be issued by this Resolution and such Parity Bonds. The authorization and issuance of Parity Bonds shall be subject to the following conditions precedent: (i) All interest and principal payments with respect to all obligations payable from the Tax Increment shall be current to date with no payment in arrears. (ii) The balance in the Reserve Account shall equal the Debt Service Reserve Requirement. (iii) The Commission shall have received a certificate prepared by an independent certified public accountant or an independent financial consultant ( "Certifier ") certifying that the Tax Increment estimated to be received in each succeeding year, adjusted as provided below, is estimated to be equal to at least 110% of the principal and interest requirements of all obligations of the Commission payable from Tax Increment for each respective year during the term of the bonds with respect to the Bonds and the Parity Bonds. In estimating the Tax Increment to be received in any future year, the Certifier shall base his calculation on assessed valuation actually assessed or to be assessed as of the assessment date immediately preceding the issuance of the Parity Bonds; provided, however, the Certifier shall adjust such assessed values for the current and future reductions of real property tax abatements granted to property owners in the Allocation Area. No increase in the Tax Increment to be received in any future year shall be assumed which results from projected inflation in property values. -18- BDDBOI 40102160 (iv) All principal payments on the Parity Bonds shall be payable on February 1, and all interest payments on the Parity Bonds shall be payable on February 1 and August 1. The Commission shall approve and confirm the findings and estimates set forth in the above - described certificate in any supplemental resolution authorizing the issuance of the Parity Bonds. (b) Except as otherwise provided in this Section, so long as any of the Bonds are outstanding, no additional bonds or other obligations pledging any portion of the Tax Increment shall be authorized, executed or issued by the City acting for and on behalf of the Redevelopment District except such as shall be made subordinate and junior in all respects to the Bonds, unless all of the Bonds are redeemed and retired coincidentally with the delivery of such additional bonds or other obligations, or, as provided in Section 15, funds sufficient to effect such redemption are available and set aside for that purpose at the time of issuance of such additional bonds. SECTION 6. Proceeds received from the sale of the Bonds shall be deposited as follows: (a) All accrued interest received at the time of the delivery of the bonds plus such additional amount, if any, as the Commission shall determine with the advice of its financial advisor to be used for capitalized interest shall be placed in the Bond Principal and Interest Account; and (b) For the Bonds, an amount equal to the Debt Service Reserve Requirement shall be placed in the Reserve Account unless the Commission determines to (i) fund the Debt Service Reserve Requirement over a five (5) year period or (ii) satisfy the Debt Service Requirement with a surety bond or other credit facility as provided by Section 4(b) hereof; and (c) The remaining proceeds from the sale of the Bonds shall be deposited in a special fund to be designated as the "South Bend Redevelopment District DMSD Allocation Area Capital Fund" (the "Capital Fund "). SECTION 7. Proceeds of the Capital Fund shall be deposited with a legally qualified depository or depositories for funds of the City as now provided by law and shall be segregated and kept separate and apart from all other funds of the City and may be invested as permitted by law. The proceeds in the Capital Fund shall be expended only for the purpose of paying the cost of redevelopment and economic development in the Allocation Area, together with a sum sufficient to pay the estimated cost of all expenses reasonably incurred in connection with the redevelopment and economic development of the Allocation Area, including the total cost of all reasonable and necessary architectural, engineering, legal, financing, accounting, advertising, bond discount and supervisory expenses, and expenses the Commission may be required, together with the expenses in connection with or on account of the issuance of the Bonds. Any balance or balances remaining in the Capital Fund after the completion of redevelopment and economic development in the Allocation Area which are not required to meet -19- 13DDB01 40102160 unpaid obligations incurred in connection with the redevelopment and economic development in the Allocation Area and issuance of the Bonds shall be deposited into the Bond Principal and Interest Account and used solely for the purposes of that account. SECTION 8. As soon as can be done after the adoption of this Resolution, the President and the Secretary of the Commission are hereby directed to deliver on behalf of the Commission a certified copy of this Resolution to the Controller. SECTION 9. a. The Bonds may be sold (i) at public sale in accordance with I.C. 5- 3-1 or (ii) at a negotiated, private sale upon terms acceptable to the President of the Commission and the Controller. In no event shall the Bonds be sold at a purchase price of less than ninety-seven percent (97%) of the par value of the Bonds or such higher purchase price as may be set forth in the Issuer's Certificate. If the President of the Commission and the Controller determine to proceed with a negotiated sale of the Bonds, they shall set forth such determination in the Issuer's Certificate. The President of the Commission and the Controller are hereby authorized to enter into a bond purchase agreement for the sale of the Bonds on the terms and conditions set forth therein, consistent with the provisions of this Resolution. b. In the event that the Bonds are not sold via a negotiated sale, prior to the sale of the Bonds, the Controller shall cause to be published a notice of intent to sell bonds two times at least one week apart in the South Bend Tribune, the Tri-County News, and the Court and Commercial Record. The notice of such sale or a summary thereof may also be published in such other publications, in the discretion of the Controller. The notice must state that any person interested in submitting a bid for the Bonds may furnish in writing, at the address set forth in the notice, the person's name, address, and telephone number, and that any such person may also furnish a telex number. The notice must also state: (1) the amount of the Bonds to be offered; (2) the denominations; (3) the dates of maturity; (4) the maximum rate or rates of interest; (5) the place of sale; and (6) the time within which the name, address and telephone number must be furnished, which must not be less than seven (7) days after the last publication of the notice. Each person so registered shall be notified of the date and time bids will be received not less than twenty-four (24) hours before the date and time of sale. The notification shall be made by telephone at the number furnished by the person, and also by telex if the person furnishes a telex number. Such notice may also include such other information as the Controller shall deem necessary. Such notice shall also provide, among other things, that each bid shall be accompanied by a certified or cashier's check or a financial surety bond in an amount equal to one percent (M) of the principal amount of the Bonds to guarantee performance on the part of the bidder. Such notice shall provide further that, if a financial surety bond is used by the successful bidder, such bidder must submit the amount of the financial surety bond in the form of a certified or cashier's check or a wire transfer consisting of immediately available funds not later than 3:00 p.m. (local time) on the next business day following the award to the successful bidder by the City. Such notice shall provide further that, in the event the successful bidder shall fail or refuse to accept delivery of and pay for the Bonds as soon as the -20- BDDB01 40102160 Bonds are ready for delivery, or at the time fixed in the notice of intent to sell, then such amount deposited with the City shall become the property of the City and shall be considered as the City's liquidated damages on account of such default. All bids for Bonds shall be sealed and shall be presented to the Controller at the Controller's office, and the Controller shall continue to receive all bids offered until the hour fixed for the sale of the Bonds, at which time and place the Controller shall open and consider each bid. Bidders for the Bonds shall be required to name the rate or rates of interest which the Bonds are to bear, not exceeding seven percent per annum (or such lesser rate as the Controller, with the advice of the financial advisor of the Commission, shall determine prior to the publication of the notice of intent to sell). Such interest rate or rates shall be in multiples of one - eighth (1/8) or one - twentieth (1/20) of one percent (1 %). Bids specifying more than one interest rate shall also specify the amount and maturities of the Bonds bearing each rate, and all Bonds maturing on the same date shall bear the same rate of interest. The interest rate on Bonds of a given maturity must be at least as great as the interest rate on Bonds of any earlier maturity. Subject to the provisions set forth below, the Controller shall award the Bonds to the bidder offering the lowest net interest cost to the City, to be determined by computing the total interest on all of the Bonds from the date thereof to their maturities and deducting therefrom the premium bid, if any, or adding thereto the amount of any discount. No bid for less than ninety -seven percent (97 %) of the par value of the Bonds (or such higher percentage of the par value of the Bonds as the Controller, with the advice of the financial advisor to the Commission, shall determine prior to the publication of the notice of intent to sell), plus accrued interest at the rate or rates named to the date of delivery, will be considered. The Controller shall have full right to reject any and all bids. In the event no acceptable bid is received at the time fixed for the sale of the Bonds, the Controller shall be authorized to continue to receive bids from day to day thereafter for a period not to exceed thirty (30) days, without readvertising, pursuant to Indiana law. C. If sold publicly, the Bonds shall be offered and sold pursuant to an Official Statement with respect to the Bonds (the "Official Statement "), to be made available and distributed in such manner, at such times, for such periods and in such number of copies as may be required pursuant to Rule 15c2 -12 promulgated by the United States Securities and Exchange Commission (the "Rule "). The Commission hereby authorizes the Controller to approve the form of the Preliminary Official Statement upon the advice of counsel with such approval to be conclusively evidenced by signature of the Controller thereon. The Commission hereby authorizes the Controller to deem "final" the Preliminary Official Statement, as of its date, in accordance with the provisions of the Rule, subject to completion as permitted by the Rule, and the Commission further authorizes the distribution of the deemed final Official Statement. The Commission hereby authorizes and directs the Controller, upon the advice of the counsel to place into final form and distribute and cause to be delivered the final Official Statement in accordance with the Rule, and further authorizes the Controller to execute the final Official Statement. -21- BDDBor 40102160 If the Bonds are sold at a negotiated, private sale, the Commission hereby authorizes the Controller to approve an offering document and to execute and deliver such offering document, with such approval to be conclusively evidenced by such execution. The Commission covenants and agrees that it will comply with and carry out the continuing disclosure requirements of Section (b)(5) of the Rule. The President and Secretary are further authorized on behalf of the Redevelopment District to enter into a continuing disclosure agreement, if necessary or appropriate under the Rule, for the benefit of the holders of the Bonds to be dated as of the date of issuance and delivery of the Bonds evidencing the covenants and agreements of the City and the Commission to comply with the continuing disclosure requirements of the Rule. SECTION 10. The Controller is hereby authorized and directed to obtain a legal opinion as to the validity of the Bonds from Baker & Daniels, bond counsel, of South Bend, Indiana, and to furnish such opinion to the purchaser of the Bonds. The cost of said opinion shall be considered as part of the costs incidental to these proceedings and shall be paid out of the proceeds of the Bonds. SECTION 11. Any Bonds issued under this Resolution may be initially issued in temporary form exchangeable for definitive Bonds. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Commission, shall be in fully registered form and may contain such reference to any of the provisions of this Resolution as may be appropriate. Every temporary Bond shall be executed, sealed and attested by the President of the Commission and the Controller in substantially the same manner as provided in Section 1 hereof. If temporary Bonds are issued, definitive Bonds will be executed and furnished without delay and thereupon the temporary bonds may be surrendered for cancellation at the principal office of the Registrar and the Registrar shall deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of the same interest rates and maturities. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Resolution as definitive Bonds issued hereunder. SECTION 12. The Mayor of the City is hereby authorized to execute the Bonds with his manual or facsimile signature and the Controller is hereby authorized and directed to have the definitive Bonds prepared, attest the Bonds with his manual or facsimile signature, and cause the seal of the City to be impressed or a facsimile thereof to be printed on the Bonds, all in the form and manner herein provided. In the case any officer whose signature appears on the Bonds shall cease to hold that office before the delivery of the Bonds, the signature of such officer shall nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until the delivery of the Bonds. After the Bonds have been properly executed, the Controller shall certify the amount the purchaser is to pay, together with the name and address of the purchaser, and upon receipt of the amount of payment certified, deliver the Bonds to the purchaser. The Controller shall take a receipt for the Bonds delivered to the purchaser, pay the purchaser's payment into the respective funds described above, and report the proceedings to the Commission and the Common Council of the City. -22- BDDB01 4010216v3 SECTION 13. In order to preserve the exclusion from gross income of interest on the Bonds under federal law and as an inducement to the purchasers of the Bonds, the Commission on behalf of the Redevelopment District represents, covenants and agrees that: a. No person or entity or any combination thereof, other than the Redevelopment District or the City, will use proceeds of the Bonds or property financed by said proceeds other than as a member of the general public. No person or entity or any combination thereof, other than the Redevelopment District will own property financed by 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 a take - or -pay or other type of 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 of such property; b. No Bond proceeds will be lent to any entity or person. No Bond proceeds will be transferred directly, or indirectly transferred or deemed transferred to a person other than a governmental unit in a fashion that would in substance constitute a loan of said Bond proceeds; C. The Redevelopment District will not take any action or fail to take any action with respect to, the Bonds that would result in the loss of the exclusion from gross income for federal tax purposes of interest on the Bonds pursuant to Section 103(a) of the Internal Revenue Code of 1986, as amended and as in effect on the date of delivery of the Bonds (the "Code "), and the Commission will not act in any manner which would adversely affect such exclusion. The Commission further covenants that it will not make any investment or do any other act or thing during the period that any Bond is outstanding hereunder which would cause any 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 Bonds. The Commission shall comply with the arbitrage rebate requirements under Section 148 of the Code to the extent applicable; and d. All officers, members, employees and agents of the Commission and the City are authorized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the Commission as of the date the Bonds are issued and to make and enter into covenants on behalf of the Commission evidencing the Commission's recognition of and compliance with the covenants and commitments made herein. In particular and without limiting the foregoing, any and all appropriate officers, members, employees and agents of the Commission the City are authorized to certify and/or enter into covenants for the Redevelopment District regarding the facts and circumstances and reasonable expectations of the Commission on the date the Bonds are issued and the representations, covenants and commitments made by the Commission herein regarding the amount and use of the proceeds of the Bonds. SECTION 14. Notwithstanding any other provisions of this Resolution, the covenants and authorizations contained in this Resolution (the "Tax Sections ") which are designed to preserve the exclusion of interest on the Bonds from gross income under federal law Is (the "Tax Exemption ") need not be complied with if the Redevelopment District receives an - 23 - BDDB01 40102160 opinion of nationally recognized bond counsel that any Tax Section is unnecessary to preserve the Tax Exemption. SECTION 15. If, when the 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 Bonds or a portion thereof for redemption shall have been given, and the whole amount of the principal of and premium, if any, and interest so due and payable upon all of the Bonds or a portion thereof then outstanding shall be paid or (i) sufficient monies for such purpose, or (ii) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, the principal of and the interest on which when due will provide sufficient monies for such purpose, or (iii) time certificates of deposit fully secured as to both principal and interest by obligations of the kind described in (ii) above of a bank or banks the principal of and interest on which when due will provide sufficient monies for such purpose, shall be held in trust for such purpose, and provision shall also have been made for paying all fees and expenses in connection with the redemption, then and in that case the Bonds or such portion thereof issued hereunder shall no longer be deemed outstanding or an indebtedness of the Redevelopment District. SECTION 16. If any section, paragraph or provision of this Resolution 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 Resolution. SECTION 17. All resolutions and orders, or parts thereof, in conflict with the provisions of this Resolution are, to the extent of such conflict, hereby repealed, and this Resolution shall be in immediate effect from and after its adoption. SECTION 18. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Resolution, shall be a legal holiday or a day on which banking institutions in the City or the city in which the 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 Resolution, and no interest shall accrue for the period after such nominal date. SECTION 19. The Commission may, from time to time and at any time, without the consent of, or notice to, any of the owners of the Bonds, adopt resolutions supplemental hereto (which supplemental resolutions shall thereafter form a part hereof) for any one or more of the following purposes: a. To cure any ambiguity or formal defect or omission in this Resolution or in any supplemental resolution; b. To grant to or confer upon the owners of the Bonds any additional benefits, rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the owners of the Bonds, or to make any change which, in the judgment of the Commission, is not to the prejudice of the owners of the Bonds; -24- 13DDB01 40102160 C. To modify, amend or supplement this Resolution to permit the qualification of the Bonds for sale under the securities laws of the United States of America or of any of the states of the United States of America or to obtain or maintain bond insurance with respect to payments of principal of and interest on the Bonds; d. To provide for the refunding or advance refunding of the Bonds; e. To procure a rating on the Bonds from a nationally recognized securities rating agency designated in such supplemental resolution, if such supplemental resolution will not adversely affect the owners of the Bonds; or f. Any other purpose which in the judgment of the Commission does not adversely affect the interests of the owners of the Bonds. SECTION 20. This Resolution and the rights and obligations of the Commission and the owners of the Bonds may be modified or amended at any time by supplemental resolutions adopted by the Commission with the consent of the owners of the Bonds holding at least sixty percent (60 %) in aggregate principal amount of the outstanding Bonds (exclusive of Bonds, if any, owned by the Commission or the City); provided, however, that no such modification or amendment shall, without the express consent of the owners of the Bonds affected, reduce the principal amount of any Bond, reduce the interest rate or premium payable thereon, advance the earliest redemption date, extend its maturity or the times for paying interest thereon, permit a privilege or priority of any Bond or Bonds over any other Bond or Bonds, create a lien securing any Bonds other than a lien ratably securing all of the Bonds outstanding, or change the monetary medium in which principal and interest are payable, nor shall any such modification or amendment reduce the percentage of consent required for amendment or modification. Any act done pursuant to a modification or amendment so consented to shall be binding upon all the owners of the Bonds and shall not be deemed an infringement of any of the provisions of this Resolution or of the Act, and may be done and performed as fully and freely as if expressly permitted by the terms of this Resolution, and after such consent relating to such specified matters has been given, no owner shall have any right or interest to object to such action or in any manner to question the propriety thereof or to enjoin or restrain the Commission or any officer thereof from taking any action pursuant thereto. If the Commission shall desire to obtain any such consent, it shall cause the Registrar to mail a notice, postage prepaid, to the respective owners of the Bonds at their addresses appearing on the registration books held by the Registrar. Such notice shall briefly set forth the nature of the proposed supplemental resolution and shall state that a copy thereof is on file at the office of the Registrar for inspection by all owners of the Bonds. The Registrar shall not, however, be subject to any liability to any owners of the Bonds by reason of its failure to mail the notice described in this Section 20, and any such failure shall not affect the validity of such supplemental resolution when consented to and approved as provided in this Section 20. Whenever at any time within one year after the date of the mailing of such notice, the Commission shall receive an instrument or instruments purporting to be executed by the - 2s - BDDB01 40102160 go owners of the Bonds of not less than sixty percent (60 %) in aggregate principal amount of the Bonds then outstanding (exclusive of Bonds, if any, owned by the Commission or the City), which instrument or instruments shall refer to the proposed supplemental resolution 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 Commission may adopt such supplemental resolution in substantially such form, without liability or responsibility to any owners of the Bonds, whether or not such owner shall have consented thereto. Upon the adoption of any supplemental resolution pursuant to the provisions of this Section 20, this Resolution shall be, and be deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Resolution shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such modifications and amendments. SECTION 21. The appropriate officers are hereby authorized to take all actions required to obtain a rating for the Bonds, if economically feasible and desirable, and to enter into a guaranty agreement with a corporate guarantor for the purpose of further securing the payment of the principal of and interest on the Bonds. ADOPTED at a meeting of the South Bend Redevelopment Commission held on the 18th day of March, 2005, at Room 1308, County -City Building, 227 West Jefferson Boulevard, South Bend, Indiana. SOUTH BEND REDEVELOPMENT COMMISSION President Marcia I. Jones ATTEST: Se retary Greg S. Downes -26- BDDB01 44102160