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HomeMy WebLinkAbout25-20 Sewage Works Refunding Bond Ordinance 1200N COUNTY-CITY BUILDING o45° BF4� PHONE 574.235.9216 227 W. JEFFERSON BLVD. 4" FAX FAX 574.235.9928 SOUTH BEND,INDIANA 46601-1830 UO tax. e PE cE > 1865 CITY OF SOUTH BEND,IN JAMES MUELLER,MAYOR DEPARTMENT OF ADMINISTRATION AND FINANCE Filed in Clerk's Office June 2, 2020 F____ JUN 0 3 2020 Mr. Tim Scott President, South Bend Common Council DAWN M.JONES CITY CLERK,SOUTH BEND,IN 4th Floor, County-City Building South Bend, IN 46601 Re: AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA AUTHORIZING THE REFUNDING OF CERTAIN OUTSTANDING SEWAGE WORKS REVENUE BONDS,AUTHORIZING THE ISSUANCE OF REVENUE BONDS IN ONE OR MORE SERIES FOR SUCH PURPOSE IN THE AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED TWENTY-TWO MILLION DOLLARS ($22,000,000),AND ADDRESSING OTHER MATTERS CONNECTED THEREWITH Dear President Scott, Attached for filing,please find the above-referenced ordinance to be considered by the Common Council for first reading at its June 8,2020 meeting,and for public hearing on June 22, 2020. This ordinance authorizes the issuance of revenue bonds for the purpose of refunding certain outstanding Sewage Works revenue bonds. I will present this bill to the Common Council at the appropriate committee and council meetings. Attorneys Randy Rompola and Phil Faccenda will be in attendance to answer any legal or technical questions you may have. Thank you for your attention to this request. If you should have any questions,please feel to contact me at 574-235-9822. Sincerely, 54L4s7F) Daniel T. Parker City Controller IFiled in Clerk's Office BILL NO. 25-20 JUN 0 3 2020 DAWN M.JONES ORDINANCE NO. I CITY CLERK,SOUTH BEND,IN AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA AUTHORIZING THE REFUNDING OF CERTAIN OUTSTANDING SEWAGE WORKS REVENUE BONDS, AUTHORIZING THE ISSUANCE OF REVENUE BONDS IN ONE OR MORE SERIES FOR SUCH PURPOSE IN THE AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED TWENTY-TWO MILLION DOLLARS ($22,000,000), ESTABLISHING A SEWAGE WORKS REFUNDING FUND, AND ADDRESSING OTHER MATTERS CONNECTED THEREWITH 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," "Works" or "works"), pursuant to the provisions of Indiana Code 36-9-23, as amended (the"Act"). The Common Council of the City(the"Common Council"or"Council")hereby finds that certain hereinafter described outstanding bonds of the Sewage Works should be refunded to obtain a reduction in interest payments and effect a savings to the City; that the refunding of those outstanding bonds, together with redemption premium and accrued interest thereon and including all costs related to the refunding cannot be provided for out of funds of the Sewage Works now on hand and the refunding should be accomplished by the issuance of refunding revenue bonds of the Sewage Works. The Council previously adopted Ordinance No. 9951-09 on August 10, 2009, which was amended by Ordinance No. 9971-09 adopted by the Council on October 26, 2009 (collectively, the "2009 Ordinance"), and pursuant to which the City issued its Sewage Works Revenue Bonds of 2009 (the "2009 Bonds") in the original principal amount of$3,297,000 which 2009 Bonds constitute a first charge on the Net Revenues (as hereinafter defined) of the Sewage Works, are now outstanding in the amount of$1,748,401, and have a final maturity of December 1, 2028. The Council previously adopted Ordinance No. 10052-10 on November 8,2010(the"2010 Ordinance"), and pursuant to which the City issued its Sewage Works Revenue Bonds of 2010 (the"2010 Bonds") in the original principal amount of$9,345,000 which 2010 Bonds constitute a first charge on the Net Revenues of the Sewage Works, are now outstanding in the amount of $5,925,000, and have a final maturity of December 31, 2030. The Council previously adopted Ordinance No. 10118-11 on September 12, 2011, (the "2011 Ordinance"), and pursuant to which the City issued its Sewage Works Revenue Bonds of 2011 (the "2011 Bonds") in the original principal amount of $21,500,000 which 2011 Bonds constitute a first charge on the Net Revenues of the Sewage Works, are now outstanding in the amount of$14,535,000, and have a final maturity of December 1, 2031. The Council previously adopted Ordinance No. 10187-12 on October 8, 2012 (the "2012 Ordinance"), and pursuant to which the City issued its Sewage Works Revenue Bonds of 2012 (the"2012 Bonds") in the original principal amount of$25,000,000 which 2012 Bonds constitute a first charge on the Net Revenues of the Sewage Works, are now outstanding in the amount of $17,660,000, and have a final maturity of December 1, 2032. The Council previously adopted Ordinance No. 10226-13 adopted by the Council on April 8, 2013 (the "2013A Ordinance"), and pursuant to which the City issued its Sewage Works Refunding Revenue Bonds of 2013A (the "2013A Bonds") in the original principal amount of $14,765,000 which 2013A Bonds constitute a first charge on the Net Revenues of the Sewage Works, are now outstanding in the amount of$3,450,000, and have a final maturity of December 1, 2024. The Council previously adopted Ordinance No. 10406-15 on November 23, 2015 (the "2015 Ordinance" and collectively with the 2009 Ordinance, the 2010 Ordinance, the 2011 Ordinance, the 2012 Ordinance, the 2013A Ordinance, the "Prior Ordinances"), and pursuant to which the City issued its Sewage Works Refunding Revenue Bonds of 2015 (the "2015 Bonds" and collectively with the 2009 Bonds, the 2010 Bonds, the 2011 Bonds, the 2012 Bonds, and the 2013A Bonds, the "Prior Bonds") in the original principal amount of$27,440,000 which 2015 Bonds constitute a first charge on the Net Revenues of the Sewage Works, are now outstanding in the amount of$17,200,000, and have a final maturity of December 1, 2025. The 2009 Bonds may be redeemed presently but with a redemption premium;however,the 2009 Bonds may be redeemed without a premium on or after December 1, 2021, at the option of the City, in whole or in part at a redemption price equal to the principal amount to be redeemed, plus accrued interest to the date of redemption. The 2010 Bonds may be redeemed on or after December 1, 2020, at the option of the City, in whole or in part at a redemption price equal to the principal amount to be redeemed, plus accrued interest to the date of redemption and without any premium. The 2011 Bonds may be redeemed on or after December 1, 2021, at the option of the City, in whole or in part at a redemption price equal to the principal amount to be redeemed, plus accrued interest to the date of redemption and without premium. The Prior Ordinances allow for the issuance of additional bonds payable from the revenues of the City's Sewage Works and ranking on parity any Prior Bonds that remain outstanding. Baker Tilly Municipal Advisors, LLC (the "Municipal Advisor"),has been employed by the City 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. The Council has determined, after being duly advised, that it is beneficial to refund all or a portion of the outstanding 2009 Bonds, 2010 Bonds and/or 2011 Bonds (the portion determined to be refunded, the "Refunded Bonds") pursuant to the provisions of Indiana Code 5-1-5 and the Act to enable the City to obtain a reduction in interest payments and effect a savings to the City - 2 - (the"Refunding") and hereby authorizes the same by issuance of refunding revenue bonds in one (1) or more series as more fully described herein(the"Refunding Bonds"). The Refunding Bonds will constitute a first charge against the Net Revenues of the Sewage Works on a parity with the Prior Bonds that remain outstanding and are to be issued pursuant to the provisions Indiana Code 5-1-5 and the Act and the terms and restrictions of this Ordinance. The Cityanticipates that,if necessary,the Indiana Finance Authority(the"Authority")will P rY consent to the issuance of the Refunding Bonds ranking on a parity with any outstanding Bonds. The Council now finds that all conditions precedent to the adoption of an ordinance authorizing the issuance of the Refunding Bonds have been complied with in accordance with the applicable provisions of Indiana Code 5-1-5 and the Act. NOW THEREFORE,BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AS FOLLOWS: SECTION 1. Refunding the Refunded Bonds. The Council hereby determines, after being duly advised, that it is beneficial to refund the Refunded Bonds thereby reducing its interest payments and effecting a savings to the City, as will be reported after the sale of the Refunding Bonds issued hereunder by the Municipal Advisor. 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,""system,""utility"and other like terms used in this Ordinance shall be construed to mean and include the City's existing sewage works system together with all the real estate, equipment and appurtenances thereto used in connection therewith, and all improvements, extensions and additions thereto, and replacements thereof, now or subsequently constructed or acquired as well as the drainage of storm and surface water to relieve the sewage works system of such water. SECTION 2. Authorization of Obligations. In accordance with Indiana Code 5-1-5 and the Act and for the purpose of providing funds for the refunding the Refunded Bonds, together with authorized expenses relating thereto including the costs of issuance of the Refunding Bonds, and all other costs related to the Refunding, the City shall issue in one or more series, its sewage works refunding revenue bonds designated "City of South Bend, Indiana Sewage Works Refunding Revenue Bonds of 20_"(with the blank to be completed with the last two(2)digits of the calendar year in which such bonds are issued and with an appropriate additional series designation in the event more than one (1) series of the Bonds is expected to be issued in such calendar year) in the aggregate principal amount of not to exceed Twenty-two Million Dollars ($22,000,000) (the "Refunding Bonds"). The Refunding Bonds which may be issued to refund the 2011 Bonds may be issued as taxable bonds based upon the advice of the Municipal Advisor and if so issued as taxable bonds, the designation of such series of Refunding Bonds shall include reference to being taxable bonds. The principal of, redemption premium, if any, and interest on the Refunding Bonds shall be payable solely out of the Sewage Works Sinking Fund as referred to below. The Refunding Bonds shall rank on parity with any outstanding Prior Bonds. The City reasonably expects to reimburse expenditures for the Refunding with the proceeds of the - 3 - Refunding Bonds and this constitutes a declaration of official intent to reimburse expenditures under Treas. Reg. 1.150-2(e) and Indiana Code 5-1-14-6(c). The Refunding Bonds (or each series thereof if sold in multiple series) shall be issued and sold at a price not less than ninety-nine percent (99.00%) of the principal amount thereof. The Bonds shall be sold as provided in Section 10 hereof. The Refunding Bonds shall be issued in denominations of Five Thousand Dollars ($5,000) or any integral multiple thereof, or as determined by the Mayor of the City (the "Mayor") and the Controller of the City (the "Controller"), with the advice of the Municipal Advisor as evidenced by delivery of a certificate executed in conjunction with the issuance of the Refunding Bonds (the "Closing Certificate"), in denominations of One Hundred Thousand Dollars ($100,000) or any integral multiple of$1,000 in excess thereof, in either case not exceeding the aggregate principal amount of the Refunding Bonds maturing any one (1) year, shall be numbered consecutively from R-1 upward (with the addition of a letter designation if the Refunding Bonds issued in one (1) year are issued in more than one (1) series, and shall bear interest at a rate not to exceed six percent (6.00%) per annum. Interest on the Refunding Bonds shall be payable semiannually on June 1 and December 1 in each year (each an"Interest Payment Date"), with the initial Interest Payment Date for the Refunding Bonds (or each series of the Refunding Bonds if issued in more than one (1) series) being finally determined by Mayor Ma or and the Controller, with the advice of the Municipal Advisor, as evidenced by delivery of the Closing Certificate. Interest on the Refunding Bonds shall be calculated according to a 360-day calendar year containing twelve 30-day months. The Refunding Bonds shall mature on December 1 of each year beginning in the year and in such amounts as is deemed appropriate by the Mayor and the Controller, with the advice of the Municipal Advisor, as evidenced by delivery of the Closing Certificate, and over a period ending not later than December 1, 2031. The Refunding Bonds shall bear an original issue date which shall be the date of delivery and each Refunding Bond shall also bear the date of its authentication. Any Refunding Bond authenticated on or before the fifteenth(15th)day of the month preceding the first Interest Payment Date (the "Record Date"), shall pay interest from its original date. Any Refunding Bond authenticated thereafter shall pay interest from the Interest Payment Date next preceding the date of authentication of such RefundingBond to which interest thereon has beenpaid or dulyprovided the month precedingan for,unless such Refunding Bond is authenticated after the Record Date of Interest Payment Date and on or before such Interest Payment Date, in which case interest thereon shall be paid from such Interest Payment Date. All payments of interest on the Refunding Bonds shall be paid by check mailed one business day prior to the interest payment date to the registered owners thereof as of the Record Date at the addresses as they appear on the registration and transfer books of the City kept for that purpose by the Registrar(the"Registration Record")or at such other address as is provided to the Paying Agent in writing by such registered owner. Each registered owner of$1,000,000 or more in principal amount of Refunding Bonds shall be entitled to receive interest payments by wire transfer by providing written wire instructions to the Paying Agent before the Record Date for any payment. All principal payments and premium payments,if any, on the Refunding Bonds shall be made upon surrender thereof at the principal office of the Paying Agent, in any U.S. coin or currency which on the date of such payment shall be legal tender for the payment of public and private debts, or in the case of a registered owner of$1,000,000 or more in principal amount of - 4 - Refunding Bonds, by wire transfer on the due date upon written direction of such owner provided at least fifteen(15) days prior to the maturity date or redemption date. SECTION 3. Pledge of Net Revenues; Payment of Principal and Interest. The Refunding Bonds, together with any outstanding Prior Bonds, and any bonds hereafter issued 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. SECTION 4. Transfer and Exchange of Bonds. Each Refunding Bond shall be transferable or exchangeable only upon the Registration Record, by the registered owner thereof in writing,or by the registered owner's attorney duly authorized in writing,upon surrender of such Refunding Bond together with a written instrument of transfer or exchange satisfactory to the Registrar duly executed by the registered owner or such attorney, and thereupon a new fully registered Refunding Bond or Bonds in the same aggregate principal amount, and of the same maturity, shall be executed and delivered in the names 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 with respect to the transfer or exchange,which taxes or governmental charges are payable by the person requesting such transfer or exchange. The Registrar shall not be obligated to make any transfer or exchange of any Refunding Bond(i)during the fifteen(15)days immediately preceding an Interest Payment Date or(ii) after the mailing of notice calling such Refunding Bond for redemption. The City, the Registrar and the Paying Agent may treat and consider the persons in whose names such RefundingBonds are registered as the absolute owners thereof for all purposes includingfor the g p rP purpose of receiving payment of, or on account of,the principal thereof and interest and premium, if any, due thereon. In the event any Refunding 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 Controller and the Registrar,together with indemnity satisfactory to them. In the event that any such mutilated, lost, stolen or destroyed Refunding Bond shall have matured or been called for redemption,instead of causing to be issued a duplicate Refunding Bond, the Registrar and Paying Agent may pay the same upon surrender of the mutilated Refunding Bond or satisfactory indemnity and proof of loss, theft or destruction in the case of a lost, stolen or destroyed Refunding Bond. The City and the Registrar may charge the owner of such Refunding Bond with their reasonable fees and expenses in this connection. Any Refunding Bond issued pursuant to this paragraph shall be deemed an original,substitute contractual obligation of the City, - 5 - whether or not the lost, stolen or destroyed Refunding 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 Refunding Bonds issued hereunder. In the event that any Refunding Bond is not presented for payment or redemption on the date established therefor, the City may deposit in trust with the Paying Agent an amount sufficient to pay such Refunding Bond or the redemption price thereof, as appropriate, and thereafter the owner of such Refunding Bond shall look only to the funds so deposited in trust with the Paying Agent for payment and the City shall have no further obligation or liability with respect thereto. SECTION 5. Registrar and Paying Agent. The Controller is hereby authorized to appoint a qualified financial institution to serve as Registrar and Paying Agent for the Refunding Bonds (together with any successor, the "Registrar" or"Paying Agent"). The Registrar is hereby charged with the responsibility of authenticating the Refunding Bonds,and shall keep and maintain the Registration Record at its office. The Controller is hereby authorized to enter into such agreements or understandings with such institution as will enable the institution to perform the services required of a Registrar and Paying Agent. The Controller is further authorized to pay such fees and the institution may charge for the services it provides as Registrar and Paying Agent and such fees may be paid from the Sinking Fund established to pay the principal of and interest on the Refunding Bonds as fiscal agency charges. 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 Refunding 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 sent by first-class or 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 Refunding Bonds then outstanding by first-class mail of the removal of the Registrar and Paying Agent. Notices to the registered owners of the Refunding 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 Registration Record. Any predecessor Registrar and Paying Agent shall deliver all the Refunding Bonds, cash or investments related thereto in its possession and the Registration Record to the successor Registrar and Paying Agent. SECTION 6. Terms of Redemption. The Refunding Bonds will not be subject to optional redemption prior to maturity. p p All or a portion of the Refunding Bonds may be aggregated into and issued as one or more term bonds. The term bonds will be subject to mandatory sinking fund redemption with sinking fund payments and final maturities corresponding to the serial maturities described in the Closing Certificate. Sinking fund payments shall be applied to retire a portion of the term bonds as though it were a redemption of serial bonds and,if more than one term bond of any maturity is outstanding, redemption of such maturity shall be made by lot. Sinking fund redemption payments shall be made in a principal amount equal to such serial maturities,plus accrued interest to the redemption date,but without premium or penalty. For all purposes of this Ordinance, such mandatory sinking fund redemption payments shall be deemed to be required payments of principal which mature on - 6 - the date of such sinking fund payments. Appropriate changes shall be made in the definitive form of Refunding Bonds, relative to the form of Refunding Bonds contained in this Ordinance, to reflect any mandatory sinking fund redemption terms. If any Refunding Bond is issued as a term bond, the Paying Agent shall credit against the mandatory sinking fund requirement for the Refunding Bonds maturing as term bonds, and corresponding mandatory redemption obligation, in the order determined by the City, any Refunding Bonds maturing as term bonds which have previously been redeemed (otherwise than as a result of a previous mandatory redemption requirement) or delivered to the Registrar for cancellation or purchased for cancellation by the Paying Agent and not theretofore applied as a credit against any redemption obligation. Each Refunding Bond maturing as a term bond so delivered or cancelled shall be credited by the Paying Agent at 100% of the principal amount thereof against the mandatory sinking fund obligation on such mandatory sinking fund date, and any excess of such amount shall be credited on future redemption obligations, and the principal amount of the Refunding Bonds to be redeemed by operation of the mandatory sinking fund requirement shall be accordingly reduced; provided, however, the Paying Agent shall credit only such Refunding Bonds maturing as term bonds to the extent received on or before forty-five (45) days preceding the applicable mandatory redemption date. Each Five Thousand Dollars($5,000)principal amount shall be considered a separate bond for purposes of mandatory redemption. If less than an entire maturity is called for redemption,the Refunding Bonds to be called shall be selected by lot by the Registrar. Notice of redemption shall be mailed by first-class mail to the address of each registered owner of a Refunding Bond to be redeemed as shown on the Registration Record not more than sixty (60) days and not less than thirty (30) days prior to the date fixed for redemption except to the extent such redemption notice is waived by owners of the Refunding Bonds redeemed, provided, however, that failure to give such notice by mailing, or any defect therein, with respect to any Refunding Bond shall not affect the validity of any proceedings for the redemption of any other Refunding Bonds. The notice shall specify the date and place of redemption,the redemption price and the CUSIP numbers of the Refunding Bonds called for redemption. The place of redemption may be determined by the City. Interest on the Refunding 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 Refunding 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. All Refunding Bonds which have been redeemed shall be canceled and shall not be reissued; provided, however, that one or more new registered bonds shall be issued for the unredeemed portion of any Refunding Bond without charge to the holder thereof. No later than the date fixed for redemption, funds shall be deposited with the Paying Agent or another paying agent to pay, and such agent is hereby authorized and directed to apply such funds to the payment of,the Refunding Bonds or portions thereof called for redemption, including accrued interest thereon to the redemption date. - 7 - SECTION 7. Execution and Negotiability. The Refunding Bonds shall be signed in the name of the City by the manual or facsimile signature of the Mayor and attested by the manual or facsimile signature of the City Clerk (the "Clerk"), who also shall affix the seal of the City manually or shall have the seal imprinted or impressed thereon by facsimile or other means. In case any officer whose signature or facsimile signature appears thereon shall cease to be such officer before the delivery of the Refunding Bonds, such signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in office until such delivery. The Refunding Bonds shall also be authenticated by the manual signature of the Registrar, and no Refunding Bond shall be valid or become obligatory for any purpose until the certificate of authentication thereon has been so executed. The Refunding Bonds shall have all of the qualities and incidents of negotiable instruments under the laws of the State of Indiana, subject to the provisions for registration herein. SECTION 8. Authorization for Book-Entry System. The Refunding 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 bonds to the purchasers. The following provisions of this Section apply in such event. One definitive Refunding Bond of each maturity shall be delivered to the Clearing Agency (or its agent) and held in its custody. The Cityand Registrar may, in connection herewith, do or g ) Y g Y> perform or cause to be done or performed any acts or things not adverse to the rights of the holders of the Refunding Bonds as are necessary or appropriate to accomplish or recognize such book-entry form Refunding Bonds. During any time that the Refunding Bonds are held in book-entry form on the books of a Clearing Agency, (1) any such Refunding Bond may be registered upon Registration Record in the name of such Clearing Agency,or any nominee thereof,including Cede&Co.;(2)the Clearing Agency in whose name such Refunding Bond is so registered shall be, and the City and the Registrar and Paying Agent may deem and treat such Clearing Agency as, the absolute owner and holder of such Refunding Bond for all purposes of this Ordinance, including, without limitation, the receiving of payment of the principal of and interest and premium, if any, on such Refunding Bond, the receiving of notice and the giving of consent; (3) 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 which, any such participant holds any interest in any Refunding Bond, including, without limitation, any responsibility or obligation hereunder to maintain accurate records of any interest in any Refunding 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 Refunding Bond, the receiving of notice or the giving of consent; and (4) the Clearing Agency is not required to present any Refunding Bond called for partial redemption, if any, prior to receiving payment so long as the Registrar and Paying Agent and the Clearing Agency have agreed to the method for noting such partial redemption. - 8 - If either the City receives notice from the Clearing Agency which is currently the registered owner of the Refunding Bonds to the effect that such Clearing Agency is unable or unwilling to discharge its responsibility as a Clearing Agency for the Refunding Bonds, or the City elects to discontinue its use of such Clearing Agency as a Clearing Agency for the Refunding Bonds, then the City and the Registrar and 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 Refunding Bonds, as are necessary or appropriate to discontinue use of such Clearing Agency as a Clearing Agency for the Refunding Bonds and to transfer the ownership of each of the Refunding Bonds to such person or persons, including any other Clearing Agency, as the holder of the Refunding Bonds may direct in accordance with this Ordinance. Any expenses of such discontinuance and transfer, including expenses of printing new certificates to evidence the Refunding Bonds, shall be paid by the City. During any time that the Refunding 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 participant or indirect participant with respect to the identity of any beneficial owner of the Refunding 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 Refunding Bond has been obtained, the Registrar shall be entitled to treat the beneficial owners of the Refunding 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 Refunding 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, and the provisions of any such 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 Refunding Bonds are held in book-entry form, the provisions of Section 8 of this Ordinance shall control over conflicting provisions in any other section of this Ordinance. SECTION 9. Form of Refunding Bonds. The form and tenor of the Refunding Bonds shall be substantially as set forth in Appendix A hereto, all blanks to be filled in properly and all necessary additions and deletions to be made prior to delivery thereof. SECTION 10. Issuance, Sale and Delivery of the Refunding Bonds. (a) The Mayor and Controller are authorized to provide for the sale of the Refunding Bonds either through a competitive bid sale or by a negotiated sale based upon the advice provided by the Municipal Advisor with such determination to be set forth in the Closing Certificate. (b) If any of the Refunding Bonds are sold by competitive bid, the Controller shall cause to be published either(i)a notice of such sale two(2)times, at least one(1)week apart, - 9 - with the first publication made at least fifteen(15)days before the date of such sale and the second publication at least three(3) days before the date of the sale in accordance with Indiana Code 5-3- 1-2 in one(1)newspaper,as defined in and in accordance with Indiana Code 5-3-1-4 or(ii)a notice of intent to sell bonds once each week for two (2) weeks in accordance with Indiana Code 5-1-11- 2 and Indiana Code 5-3-1-4 and in a newspaper of general circulation published in the State capital, in which case bids may not be received more than ninety(90)days after the first publication. Such notice, or a summary thereof,may also be published in any other publications deemed appropriate in the discretion of the Controller. The bond sale notice shall state the time and place of sale, the purpose for which the Refunding Bonds are being issued, the total amount and maturities thereof, the maximum rate of interest thereon and any limitations as to the number of interest rates and the setting of such rates, the terms and conditions upon which bids will be received and the sale made, and such other information as the Controller and the attorneys employed by the City shall deem necessary or advisable. Such notice shall provide, among other things, that the successful bidder shall provide to the City a good faith deposit in the form of cash, a certified or cashier's check payable to the order of the City, or wire transfer (as instructed by the City) (the "Deposit") in an amount of one percent (1.0%) of the par amount of the Refunding Bonds being sold to guarantee performance on the part of said bidder. The successful bidder shall be required to submit to the City the Deposit not later than 3:30 p.m. (local time)on the next business day following the award. In the event that the successful bidder shall fail or refuse to accept delivery of and pay for the Refunding Bonds as soon as the Refunding Bonds are ready for delivery, or at the time fixed in the notice of sale,then such Deposit and the proceeds thereof 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 the Refunding Bonds shall be sealed and shall be presented to the Controller or her designee at the physical or electronic address identified in the notice. Bidders for the Refunding Bonds shall be required to name the rate or rates of interest which the Refunding Bonds are to bear, not exceeding six percent (6.00%) per annum. Such interest rate or rates shall be in multiples of one-eighth(1/8), one-twentieth(1/20),or one-hundredth(1/100)of one percent. Bids specifying more than one interest rate shall also specify the amount and maturities of the Refunding Bonds bearing each rate, and all Refunding Bonds maturing on the same date shall bear the same rate. The Refunding Bonds shall be awarded by the Controller to the best bidder who has submitted a bid in accordance with the terms of this Ordinance and the notice of sale. The best bidder will be the bidder who offers the lowest net interest cost to the City, to be determined by computing the total interest on all of the Refunding Bonds being sold from the date thereof to their respective maturities and deducting therefrom the premium bid, if any. No bid for less than the minimum percentage of the principal amount of the Refunding Bonds set forth in Section 2 hereof, plus accrued interest to the date of delivery, if any, shall be considered. The City shall have the right to reject any and all bids. In the event an acceptable bid is not received on the date fixed in the notice, the Controller shall be authorized to continue the sale from day to day for a period of not to exceed thirty(30)days without readvertising. During the continuation of the sale,no bid shall be accepted which offers an interest cost which is equal to or higher than the best bid received at the time originally fixed for the sale of the Refunding Bonds in the bond sale notice. (c) As an alternative to a competitive bid sale, the Controller is authorized to negotiate the sale of any of the Refunding Bonds at an interest rate or rates not exceeding six percent (6.00%) per annum. The Mayor and the Clerk are hereby authorized to (i) execute and attest, respectively, a purchase agreement with the purchaser, and (ii) sell such Refunding Bonds - 10 - upon such terms as are acceptable to the Mayor and the Controller consistent with the terms of this Ordinance. The final form of the purchase contract shall be determined by the Mayor and Clerk, upon advice of the City's bond counsel and Municipal Advisor and the Mayor and the Clerk are hereby authorized and directed to complete, execute and attest the same on behalf of the City so long as its provisions are consistent with this Ordinance. (d) The Controller is hereby authorized to appoint one or more financial institutions to serve as Escrow Agent (each an "Escrow Agent") for the Refunded Bonds in accordance with the terms of one or more escrow agreements to be entered into between the City and the Escrow Agent (collectively, the "Escrow Agreement"). The Mayor and the Clerk are hereby authorized and directed to complete, execute and attest the same on behalf of the City so long as its provisions are consistent with this Ordinance. (e) The execution, by either the Mayor, Controller, or the purchaser of the Refunded Bonds, of a subscription for investments of proceeds of the Refunding Bonds to be held under the Escrow Agreement in a manner consistent with this Ordinance is hereby approved. (f) Distribution of an Official Statement (Preliminary and Final), if necessary, when and if prepared by the Municipal Advisor, on behalf of the City, is hereby authorized and approved, and the Mayor is authorized and directed to execute the Official Statement on behalf of the City in a form consistent with this Ordinance. The Mayor or the Controller is authorized to deem the Preliminary Official Statement as "final" for purposes of Rule 15c2-12 promulgated by the United States Securities and Exchange Commission(the"SEC Rule"). (g) After the Refunding Bonds have been properly sold and executed, the Controller shall receive from the purchasers thereof payment for the Refunding Bonds and shall provide for delivery of the Refunding Bonds to the purchasers. Proceeds derived from the sale of the Refunding Bonds shall be and are hereby set aside for the application to the costs of refunding the Refunded Bonds and the expenses necessarily incurred in connection therewith including the expenses incurred in the issuance of the Refunding Bonds on account of the financing thereof. (h) The Refunding Bonds, as and to the extent paid for and delivered to the purchaser shall be the binding special revenue obligations of the City, payable out of the Net Revenues. The proper officers of the City are hereby directed to sell the Refunding Bonds to the purchaser, to draw all proper and necessary warrants, and to do whatever acts and things which may be necessary to carry out the provisions of this Ordinance. (i) The Mayor and the Controller each are hereby authorized to deem final an official statement or official statements with respect to the Refunding Bonds,as of the date of such official statement or official statements,in accordance with the provisions of the SEC Rule,subject to completion as permitted by the SEC Rule, and the City further authorizes the distribution of the deemed final official statement or official statements, and the execution, delivery and distribution of such document or documents as further modified and amended with the approval of the Mayor or the Controller in the form of a final official statement or official statements. 0) In order to assist any underwriter of the Refunding Bonds in complying with paragraph (b)(5) of the SEC Rule by undertaking to make available appropriate disclosure about - I1 - the City and the Refunding Bonds to participants in the municipal securities market, the City hereby covenants, agrees and undertakes, in accordance with the SEC Rule,unless excluded from the applicability of the SEC Rule or otherwise exempted from the provisions of paragraph (b)(5) of the SEC Rule, that it will comply with and carry out all of the provisions of a continuing disclosure contract from the City to each registered owner or holder of any Refunding Bonds (the "Continuing Disclosure Contract"). The execution and delivery by the City of a Continuing Disclosure Contract, and the performance by the City of its obligations thereunder by or through any employee or agent of the City with respect to the Refunding Bonds, are hereby approved, and the City shall comply with and carry out the terms thereof. (k) The Controller is hereby authorized and directed to obtain a legal opinion as to the validity of the Refunding Bonds from Barnes & Thornburg LLP, and to furnish such opinion to the purchasers of the Refunding Bonds or to cause a copy of said legal opinion to be printed on each Refunding Bond. The cost of such opinion shall be paid out of the proceeds of the Refunding Bonds. (1) In connection with the sale of the Refunding Bonds, the Mayor and the Controller each are authorized to take such actions and to execute and deliver such agreements and instruments as they deem advisable to obtain a rating and/or to obtain bond insurance or a Credit Facility (as defined herein) for the Refunding Bonds, and the taking of such actions and the execution and delivery of such agreements and instruments are hereby approved. The costs of obtaining any such insurance,Credit Facility,and/or credit ratings in preparing and delivering such opinion and in the performance of related services in connection with the issuance, sale and delivery of the Refunding Bonds, shall be considered as a part of the cost of issuance of the Refunding Bonds and shall be paid out of the proceeds of the sale of the Refunding Bonds. SECTION 11. Use of Proceeds. The accrued interest received at the time of delivery of the Refunding Bonds, if any, and premium, if any, shall be deposited in the Bond and Interest Account of the Sinking Fund (as hereafter defined) and applied to payments on the Refunding Bonds on the first interest payment date. An amount of proceeds from the sale of the Refunding Bonds may be deposited into the related Refunding Subaccount, if any, of the Reserve Account (as defined herein), for the Refunding Bonds and applied as described below as determined by the Controller. An amount of proceeds from the sale of the Refunding Bonds equal to the estimated costs of issuance of the Refunding Bonds and other fees and charges associated with the issuance of the Refunding Bonds,including the premium for any bond insurance obtained for the Refunding Bonds, shall be deposited into a fund of the utility hereby created and designated as"City of South Bend, Indiana Sewage Works 2020 Costs of Issuance Fund" (the"Costs of Issuance Fund"). The proceeds deposited in the Costs of Issuance Fund, together with all investment earnings thereon, shall be expended only for the purpose of paying the costs of issuance of the Refunding Bonds and other fees and charges associated with the issuance of the Refunding Bonds,including the premium for any bond insurance obtained for the Refunding Bonds by the City. The remaining proceeds from the sale of the Refunding Bonds shall be deposited into a fund of the utility hereby created and designated as"City of South Bend, Indiana Sewage Works Refunding Fund" (the"Refunding Fund"). The proceeds deposited in the Refunding Fund, together with all investment earnings thereon, shall be expended only for the purpose of paying the costs of the Refunding. - 12 - Each of the funds and accounts of the Sewage Works shall be deposited, held, secured or invested in accordance with the laws of the State of Indiana relating to the depositing, holding, securing or investing of public funds, including, particularly, applicable provisions of Indiana Code 5-13, Indiana Code 4-4-11 and the acts amendatory thereof and supplemental thereto. Any interest or income derived from any such investments shall become a part of the moneys in the fund or account so invested. Upon issuance of the Refunding Bonds, moneys held and on deposit in the existing funds and accounts established under the Prior Ordinances shall remain on deposit therein. SECTION 12. Revenue Fund. 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. SECTION 13. Operation and Maintenance Fund. 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 payments in lieu of taxes, depreciation, 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. - 13 - SECTION 14. 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(the"Bond and Interest Account")and the Reserve Account(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 Refunding 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 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. (i) For purposes of this Section 14(c), the term "Bonds" means the Refunding Bonds issued hereunder and any and all bonds ranking on a parity with the Refunding Bonds issued hereunder (including the outstanding Prior Bonds) which are (i) now outstanding or issued in the future by the City and(ii)which are payable from the Net Revenues of the Sewage Works. (ii) The Reserve Account (excluding any subaccounts established for any of the Bonds (each, a "Subaccount", and collectively, the "Subaccounts")) shall constitute the margin for safety and as protection against default in the payment of principal of and interest on the Bonds (excluding any Bonds for which a Subaccount was established), and the moneys in the Reserve Account(excluding any Subaccounts)shall be used to pay current principal and interest on the Bonds (excluding any Bonds for which a Subaccount was established) to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. - 14 - (iii) The City may, upon the issuance of the Refunding Bonds, establish within the Reserve Account a refunding subaccount for the Refunding Bonds (or separate subaccounts for each series of the Refunding Bonds with each containing the year and series designation of the corresponding Refunding Bonds) (as used herein, each a "Refunding Subaccount"). Each Refunding Subaccount shall constitute the margin for safety and as protection against default in the payment of principal of and interest on the corresponding series of Refunding Bonds, and the moneys in each such Refunding Subaccount shall be used to pay current principal and interest on the corresponding series of Refunding Bonds to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. (iv) No amounts in each of the Refunding Subaccounts shall be available to pay any principal of or interest or redemption premium, if any,on any Bonds, except the corresponding series of Refunding Bonds. (v) The balance to be maintained in each of the Refunding Subaccounts shall equal but not exceed an amount(the"Reserve Requirement") equal to the least of(i) the maximum annual debt service on the Refunding Bonds, (ii) one hundred twenty-five percent(125%)of average annual debt service on the Refunding Bonds, or(iii)ten percent (10%) of the proceeds of the Refunding Bonds. (vi) If a Refunding Subaccount is established,and the initial deposit into the Refunding Subaccount does not equal the Reserve Requirement, or if no deposit is made, the City shall deposit a sum of Net Revenues into each such Refunding Subaccount on the last day of each calendar month until the balance therein equals the Reserve Requirement. The monthly deposits shall be equal in amount and sufficient to accumulate the Reserve Requirement in each Refunding Subaccount within five (5) years of the date of delivery of the corresponding series of Refunding Bonds. (vii) Any deficiency in the balance maintained in each Refunding Subaccount shall be made up from the next available Net Revenues remaining after credits into the Bond and Interest Account. Any moneys in each Refunding Subaccount 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 of each corresponding series at a price not exceeding the par amount thereof and accrued interest. (viii) As an alternative to holding cash funds in each Refunding Subaccount, the City, with the advice of the Municipal Advisor and the City's bond counsel, may satisfy all or any part of its obligation to maintain any amount in each Refunding Subaccount by depositing a Credit Facility(as defined below)therein,provided that such deposit does not adversely affect any then existing rating on the corresponding series of Refunding Bonds. 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 each Refunding Subaccount shall treat the - 15 - maximum amount available under such Credit Facility as its value. To the extent that any Refunding Bonds are insured, and such Credit Facility is not being provided by the insurer of such Refunding Bonds,such Credit Facility 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 Refunding 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 Municipal Advisor. (ix) 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 15. Sewage Works Improvement Fund. On the first day of each calendar month after the Refunding 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 payments in lieu of taxes, 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 Reserve Account of the Sinking Fund. SECTION 16. Investment of Funds. 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 17. Financial Records and Accounts. The City shall keep proper records and books of account, separate from all of its other records and accounts, in which complete and correct entries shall be made showing all revenues received on account of the operation of the utility and all disbursements made therefrom and all transactions relating to the utility. The City shall maintain on file the audited financial statements of the utility prepared by the State Board of Accounts. There shall be furnished, upon written request, to any owner of the Refunding Bonds, the most recent copy of the audited financial statements of the utility prepared by the State Board - 16 - of Accounts. Copies of all such statements and reports shall be kept on file in the office of the Controller. SECTION 18. 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, for payments in lieu of taxes, 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 Y p p p 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 Refunding Bonds and all bonds on a parity therewith or the debt service payable during the next succeeding twelve (12) calendar months on the Prior Bonds, the Refunding 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 19. Defeasance. If, when the Refunding 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 Refunding 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 Refunding Bonds or any portion thereof then outstanding shall be paid,or(i) sufficient moneys, (ii) direct non-callable obligations of(including obligations issued or held in book-entry form on the books of) the United States of America, 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 Refunding 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. SECTION 20. 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 Refunding Bonds and any outstanding Prior 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 Refunding 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. - 17 - (b) All required deposits to the Sinking Fund shall have been made in accordance with the provisions of this 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 Refunding Bonds shall be not less than one hundred twenty-five percent (125%) of the maximum annual interest and principal requirements of the then outstanding Refunding 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 Refunding 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 municipal 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 21. Further Covenants of the City. For the purpose of further safeguarding the interests of the holders of the Refunding Bonds, it is specifically provided as follows: (a) 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. (b) So long as any of the Refunding 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 a self-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. (c) So long as any of the Refunding 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. (d) So long as any Prior Bonds are held by 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, - 18 - without the prior written consent of the Authority if such undertaking would involve, commit, or use the revenues of the Sewage Works. (e) Except as provided in Section 20 hereof, so long as any of the Refunding 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 Refunding Bonds, unless all of the Refunding Bonds are redeemed, retired, or defeased coincidentally with the delivery of such additional bonds or other obligations. (f) 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 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. (g) This Ordinance shall not be repealed or amended in any respect which will adversely affect the rights of the owners of any Refunding 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. (h) The provisions of this Ordinance shall be construed to create a trust in the proceeds of the sale of the Refunding 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 Sinking Fund as set forth in this Ordinance. The owners of the Refunding 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 Refunding Bonds or in the event of default with respect to any of the provisions of this Ordinance or the Act. SECTION 22. Amendments With Consent of Bondholders. Subject to the terms and provisions contained in this section, and not otherwise, the owners of not less than sixty-six and two-thirds percent (66-2/3%) in aggregate principal amount of the Refunding 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 Refunding Bond or an advancement of the earliest redemption date on any Refunding Bond; or (b) A reduction in the principal amount of any Refunding 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 - 19 - (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 Refunding Bond or Refunding Bonds over any other Refunding Bond or Refunding Bonds; or (e) A reduction in the aggregate principal amount of the Refunding 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 Refunding Bonds. The Registrar shall not, however, be subject to any liability to any owners of the Refunding Bonds by reason of its failure to mail such notice, and any such failure shall not affect the validityof such supplemental ordinance when consented to and approved as herein pp PP provided. Whenevert a any time me 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 Refunding Bonds of not less than sixty-six and two-thirds per cent (66-2/3%) in aggregate principal amount of the Refunding 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 Refunding Bonds, whether or not such owners shall have consented thereto. No owner of any Refunding 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 Refunding 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 Refunding Bonds, and the terms and provisions of the Refunding 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 Refunding Bonds then outstanding. SECTION 23. Amendments Without Consent of Bondholders. Without notice to or consent of the owners of the Refunding 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), - 20 - (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 Refunding Bonds any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the owners of the Refunding Bonds; or (c) to procure a rating on the Refunding 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 Refunding Bonds; or (d) to make any other change which is not to the prejudice of the owners of the Refunding Bonds; or (e) to provide for the refunding or advance refunding of the Refunding Bonds. SECTION 24. Tax Matters. In order to preserve the exclusion of interest on the Refunding Bonds which may be issued on a tax-exempt basis (the "Tax-Exempt Bonds") from gross income for federal income tax purposes and as an inducement to purchasers of the Tax- Exempt 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 Tax-Exempt Bonds or property financed by the Tax- Exempt 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 Tax- Exempt 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 Tax-Exempt Bond proceeds will be loaned to any entity or person other than a state or local governmental unit. No Tax-Exempt Bond proceeds will be transferred,directly or indirectly, or deemed transferred to a non-governmental person in any manner that would in substance constitute a loan of the Tax-Exempt Bond proceeds. (c) The City will not take any action or fail to take any action with respect to the Tax-Exempt Bonds that would result in the loss of the exclusion from gross income for federal income tax purposes of interest on the Tax-Exempt Bonds pursuant to Section 103 of the Code, and the regulations thereunder as applicable to the Tax-Exempt Bonds, including, without limitation,the taking of such action as is necessary to rebate or cause to be rebated arbitrage profits on Tax-Exempt Bond proceeds or other monies treated as Tax-Exempt 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 notwithstanding anything else to the contrary herein, in trust for such purposes. (d) The City will file an information report on Form 8038-G with the Internal Revenue Service as required by Section 149 of the Code. - 21 - (e) The City will not make any investment or do any other act or thing during the period that any Tax-Exempt Bond is outstanding hereunder which would cause any Tax- Exempt Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code and the regulations thereunder as applicable to the Tax-Exempt Bonds. Notwithstanding any other provisions of this Ordinance, the foregoing covenants and authorizations(the"Tax Sections")which are designed to preserve the exclusion of interest on the Tax-Exempt Bonds from gross income under federal law (the "Tax Exemption") need not be complied with to the extent the City receives an opinion of nationally recognized bond counsel that compliance with such Tax Section is unnecessary to preserve the Tax Exemption. SECTION 25. Rate and Charges. The rates and charges of the Works are set forth or described in Chapter 17 of the South Bend Municipal Code as the same has been amended by Ordinance No. 10688-19 adopted by the Council at a meeting held on October 28, 2019 which has been re-affirmed by Ordinance No. 10705-20 adopted by the Council on February 24, 2020. Such chapter and ordinances are hereby incorporated by reference as if set forth in full at this place,two copies of which are on file and available for public inspection in the office of the City Clerk pursuant to Indiana Code 36-1-5-4. SECTION 26. Non-Business Days. 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 jurisdiction 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 27. No Conflict. The Council hereby finds and determines that the adoption of this Ordinance and the issuance of the Refunding Bonds are in compliance with the Prior Ordinances. The Prior Ordinances shall remain in full force and effect. All ordinances and resolutions and parts thereof in conflict herewith, except the Prior Ordinances, are to the extent of such conflict hereby repealed. None of the provisions of this Ordinance shall be construed to adversely affect the rights of the owners of any bonds ranking on parity with the Refunding Bonds. SECTION 28. 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 29. Interpretation. Unless the context or laws clearly require otherwise, references herein to statutes or other laws include the same as modified, supplemented or superseded from time to time. SECTION 30. Payment on Bonds in the Event of Default. In the event available moneys are insufficient to pay debt service on the Refunding Bonds and bonds ranking on parity with the Refunding Bonds when due, available moneys shall be applied, after payment of all costs and expenses associated therewith, to the Refunding Bonds and any such parity bonds as follows: - 22 - to the payment to the persons entitled thereto of all unpaid installments of interest then due on, and the unpaid principal of,the Refunding Bonds and any such parity bonds,including interest on any past due principal of any Refunding Bond or such parity bonds at the rate borne by such Refunding Bond or such parity bonds, in the order of the maturity of the installments of such interest and the due dates of such principal and, if the amount available shall not be sufficient to pay in full any particular installment of interest or maturity of principal, then to such payment ratably, according to the amounts so due, to the persons entitled thereto, without any discrimination or privilege or any preference of or priority of interest over principal or principal over interest. During the continuance of any default in the payment of either principal of or interest or premium on any Refunding Bonds or bonds ranking on parity with the Refunding Bonds, no payment shall be made with respect to any subordinate obligations issued pursuant to Section 21(e). Moneys available for payment to holders of such subordinate obligations shall, in the event of an insufficient amount being available to pay all debt service with respect to the subordinate obligations when due, be applied to the subordinate obligations in accordance with the sequence and other terms set forth above with respect to payments regarding Refunding Bonds and such parity bonds unless otherwise provided in the ordinance authorizing the subordinate obligations. SECTION 31. Actions and Agreements. Each of the Mayor, the Controller, and the Clerk 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. - 23 - SECTION 32. This Ordinance shall be in full force and effect from and after its passage by the Common Council and approval by the Mayor and compliance with the procedures required by law. Tim Scott, Council President South Bend Common Council Attest: Dawn M. Jones, City Clerk Office of the City Clerk Presented by me, the undersigned Clerk of the City of South Bend, to the Mayor of the City of South Bend, Indiana on the day of , 2020, at o'clock . m. Dawn M. Jones, City Clerk Office of the City Clerk Approved and signed by me on the day of , 2020, at o'clock .m. James Mueller, Mayor City of South Bend, Indiana - 24 - APPENDIX A FORM OF REFUNDING BOND R- UNITED STATES OF AMERICA STATE OF INDIANA COUNTY OF ST. JOSEPH CITY OF SOUTH BEND, INDIANA SEWAGE WORKS REVENUE REFUNDING BOND OF 202[_] Interest Maturity Original Authentication Rate Date Date Date CUSIP No. , 20_ , 202_ , 202_ REGISTERED OWNER: PRINCIPAL SUM: Dollars ($ ) The City of South Bend, in St. Joseph, County, State of Indiana (the "City"), for value received,hereby promises to pay to the Registered Owner set forth above, solely out of the special revenue fund hereinafter referred to, the Principal Sum set forth above on the Maturity Date set forth above (unless this bond be subject to and be called for redemption prior to maturity as hereafter 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 the interest payment date (the "Record Date") and on or before such interest payment date in which case it shall bear interest from such interest payment date,or unless this bond is authenticated on or before ,20_, in which case it shall bear interest from the Original Date, which interest is payable semiannually on June 1 and December 1 of each year,beginning on 1, 20_. Interest shall be calculated on the basis of a 360-day year comprised of twelve 30-day months. [The principal of and premium, if any, on this bond are payable at the principal office of (the "Registrar" or "Paying Agent"), in , Indiana.] All payments of interest on this bond shall be paid by check mailed one business day prior to the interest payment date to the Registered Owner as of the Record 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. Each Registered Owner of$1,000,000 or more in principal amount of bonds shall be entitled to receive interest payments by wire transfer by A-1 providing written wire instructions to the Paying Agent before the Record Date for any payment. All payments of principal of, and premium, if any, on this bond shall be made upon surrender thereof at the principal office of the Paying Agent, in any U.S. coin or currency which on the date of such payment shall be legal tender for the payment of public and private debts, or in the case of a Registered Owner of $1,000,000 or more in principal amount of the Bonds (as hereinafter defined), by wire transfer on the due date upon written direction of such owner provided at least fifteen (15) days prior to the maturity date or redemption date. THIS BOND SHALL NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY WITHIN THE MEANING OF THE PROVISIONS AND LIMITATIONS OF THE CONSTITUTION OF THE STATE OF INDIANA, AND THE CITY SHALL NOT BE OBLIGATED TO PAY THIS BOND OR THE INTEREST THEREON EXCEPT FROM THE SPECIAL FUND, ENTITLED "SEWAGE WORKS SINKING FUND" AS DESCRIBED HEREIN, PROVIDED FROM THE NET REVENUES OF THE CITY'S SEWAGE WORKS UTILITY. It is hereby certified and recited that all acts, conditions and things required to be done precedent to and in the execution,issuance and delivery of this bond have been done and performed in regular and due form as provided by law. This bond shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been executed by an authorized representative of the Registrar. This bond is one of an authorized issue of bonds of the City of South Bend, Indiana,of like date, tenor and effect, except as to denomination, numbering, rates of interest, redemption terms and dates of maturity, aggregating Dollars ($ ), numbered consecutively from 1 upward (the "Bonds"), issued for the purpose of providing funds to be applied to the cost of refunding the outstanding City of South Bend, Indiana Sewage Works Revenue Bonds of 201_ (the "Refunding") and to pay incidental expenses and costs of issuance of the Bonds. This bond is issued pursuant to an ordinance adopted by the Common Council of said City on the day of , 2020, entitled "An Ordinance of the Common Council of the City of South Bend, Indiana, Authorizing the Refunding of Certain Outstanding Sewage Works Revenue Bonds, Authorizing the Issuance of Revenue Bonds in One or More Series for Such Purpose in the Aggregate Principal Amount Not to Exceed Dollars ($ ), and Addressing Other Matters Connected Therewith" (the "Ordinance"), and in accordance with the provisions of Indiana law, including without limitation Indiana Code 36-9-23, and other applicable laws, as amended (the "Act"), all as more particularly described in the Ordinance. The owner of this bond,by the acceptance hereof, agrees to all the terms and provisions contained in the Ordinance and the Act. Pursuant to the provisions of the Act and the 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 A-2 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 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 said Sewage Works as are sufficient in each year for the payment of the proper and reasonable expenses of operation, repair and maintenance of said Sewage 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 covenants that for so long as the Bonds and any bonds issued on a parity therewith, including the Prior Bonds, remain outstanding it will set aside and pay into the Sinking Fund a sufficient amount of the Net Revenues for the payment of(a) the principal of and interest on all bonds which by their terms are payable from the Net Revenues, as such principal and interest shall fall due and (b) the necessary fiscal agency charges for paying bonds. Such required payments shall constitute a first charge upon all the Net Revenues. Reference is made to the Ordinance for a more complete statement of the revenues from which and conditions under which this bond is payable, a statement of the conditions on which obligations may hereafter be issued on parity with this bond, the manner in which the Ordinance may be amended and the general covenants and provisions pursuant to which this bond has been issued. This bond is subject to defeasance prior to payment or redemption as provided in the Ordinance. If this bond shall not be presented for payment or redemption on the date fixed therefor, the City may deposit in trust with the Paying Agent or another paying agent, an amount sufficient to pay such bond or the redemption price, as the case may be, and thereafter the Registered Owner shall look only to the funds so deposited in trust for payment and the City shall have no further obligation or liability in respect thereto. This bond is transferable or exchangeable only upon the registration record 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 such attorney, 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. 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 transfer or exchange. The City, the Registrar, the Paying Agent and any other registrar or 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 A-3 purpose of receiving payment of, or on account of, the principal hereof and interest and premium, if any, due hereon. The bonds maturing on any maturity date are issuable only in the denomination of$5,000 or any integral multiple thereof [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 (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 any Bond, 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.] 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 signature of the Mayor, and its corporate seal to be hereunto affixed, imprinted or impressed by any means and attested manually or by facsimile by its Clerk. CITY OF SOUTH BEND, INDIANA By: Mayor (SEAL) ATTEST Clerk A-4 REGISTRAR'S 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 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 right of survivorship and not as tenants in common UNIF. TRAN. MIN. ACT Custodian (Cust.) (Minor) under Uniform Transfer to Minors Act of (State) Additional abbreviations may also be used although not in the above list. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please Print or Typewrite Name and Address and Social Security or Other Identifying Number) $ principal amount (must be a multiple of $1,000) 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. A-5 Dated: 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. DMS 17445313v.2 A-6