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Home My WebLink About1992-09-10 Resolution 64 RESOLUTION NO. 64 RESOLUTION OF THE SOUTH BEND REDEVELOPMENT AUTHORITY AUTHORIZING THE ISSUANCE OF THE SOUTH BEND REDEVELOPMENT AUTHORIT PRO ECT) AND REGARDING O HER RELATED MATTERS GOLF COURSE WHEREAS, the South Bend Redevelopment Authority (the "Authority") has been created pursuant to I.C. 36-7-14.5 as a separate body, corporate and politic, and as an instrumentality of the City of South Bend to finance local public improvements for lease to the South Bend Redevelopment Commission (the "Commission"); and WHEREAS, the Authority intends to issue bonds in the aggregate amount of Five Million Six Hundred Eighty Thousand Dollars ($5,680,000) pursuant to I.C. 36-7-14.5-19 to be known as • the "South Bend Redevelopment Authority Lease Rental Revenue Bonds .(Blackthorn Golf Course Project)" (the "Bonds"), the proceeds of which are to be used to finance the construction of Blackthorn Golf Course (the "Project") and to pay the cost of issuance of the Bonds; and WHEREAS, the Authority intends to lease the Project to the Commission pursuant to a lease dated as of July 1, 1992 (the "Lease"), which Lease was heretofore approved and executed by this Authority; and WHEREAS, the Authority desires to appoint a Trustee for the Bonds; and WHEREAS, there has been prepared and submitted to the Authority a form of Trust Agreement to be dated as of September 1, 1992, between the Authority and Norwest Bank Indiana, N.A., South Bend, Indiana, as Trustee (the "Trust Agreement") which Trust Agreement provides for, among other things, the issuance of such Bonds to finance the Project; and WHEREAS, an Official Statement dated September 10, 1992, relating to the issuance of the Bonds (the "Official Statement") has been prepared by H. J. Umbaugh & Associates, as financial advisor to the Authority, and presented to the Authority; NOW, THEREFORE, BE IT RESOLVED, by this South Bend Redevelopment Authority as follows: Section 1. In order to pay and finance the costs of the Project and to pay costs of issuance, there is hereby authorized and there shall be executed, issued, and delivered by and on behalf of the Authority, pursuant to I.C. 36-7-14.5 et sea., the Bonds in the aggregate principal sum of Five Million Six Hundred Eighty Thousand Dollars ($5,680,000). Section 2. The Bonds shall bear interest at a rate or rates not exceeding an average of seven percent (7%) per annum i with no individual rate or rates exceeding seven and one-half percent (7.5%) per annum (or such lesser per annum interest rate as the Authority may establish with the advice of its financial advisor at the time of the publication of the notice of intent to sell the Bonds) and shall mature serially on March 1 in the years and in the amounts as follows: i• -2- Year Amount Year Amount • 1999 $ 40,000 2007 $450,000 2000 90,000 2008 470,000 2001 140,000 2009 505,000 2002 205,000 2010 535,000 2003 270,000 2011 570,000 2004 340,000 2012 605,000 2005 395,000 2013 645,000 2006 420,000 Section 3. The Bonds maturing on or after March 1, 2002, may be redeemed prior to maturity, at the option of the Authority in whole or in part in whole multiples of $5,000, in inverse. order of maturity and by lot within maturities, on any date not earlier than March 1, 2001, from any moneys made available for that purpose, at face value plus accrued interest to the date fixed for redemption together with a premium of two percent (2%) if redeemed on March 1, 2001, or thereafter on or before February 28, 2002; one percent (1%) if redeemed on March 1, 2002, or thereafter on or before February 28, 2003; and without premium thereafter. Section 4. Norwest Bank Indiana, N.A., South Bend, Indiana, is hereby appointed to serve as trustee (the "Trustee") in connection with the issuance of the Bonds to finance the Project. The Trustee shall be charged with and shall by the Trust Agreement undertake the duties and responsibilities customarily associated with such position, as evidenced by the Trust Agreement. Section 5. Said Bonds shall be issued in accordance with and shall be secured by a trust agreement substantially in the form of a Trust Agreement as submitted to this meeting, with such changes as the President and the Secretary of the Authority deem i• -3- necessary or appropriate to effectuate these resolutions and to • consummate the sale of the Bonds, said officers' execution and attestation thereof to be conclusive evidence of their approval of such changes. Section 6. The Secretary is authorized and directed to place a copy of the Trust Agreement in the minute book immediately following the minutes of this meeting and said Trust Agreement is made a part of this Resolution as if the same were fully set forth herein. Section 7. The Official Statement is hereby approved in the form presented to the Authority at this meeting, and the Official Statement in the form presented at this meeting is hereby deemed final for purposes of the provisions of Rule 15c2-12 of the Securities and Exchange Commission. H. J. Umbaugh & Associates is • hereby authorized and directed to cause to be distributed such statement substantially in the form presented to this meeting, with such changes which are approved by the Authority's legal counsel as H. J. Umbaugh & Associates might recommend to describe adequately the Bonds and information related thereto, to all parties who in their judgment may be interested in bidding on such Bonds; and the Authority shall place a copy of such Official Statement as presented to this meeting with the minutes of this meeting. Section 8. Prior to the sale of the Bonds, the Secretary of the Authority shall cause to be published a notice of intent to sell once each week for two weeks in the Tri-County News, i• -4- the South Bend Tribune and The Indianapolis Commercial. The notice • of such sale or a summary thereof may be published in Credit Markets, a financial journal published in the City and State of New York and/or in other newspapers, in the discretion of the Secretary. The notice must state that any person interested in submitting a bid for the Bonds may furnish in writing at the address set forth in the notice, the person's name, address, and telephone number, and that any such person may also furnish a telex or facsimile number. The notice must also state: (1) the amount of the Bonds to be offered; (2) the denominations; (3) the dates of maturity; (4) the maximum rate or rates of interest; (5) the place of sale; and (6) the time within which the name, address and telephone number must be furnished, which must not be less than • seven days after the last publication of the notice. Each person so registered shall be notified of the date and time bids will be received not less than twenty-four (24) hours before the date and time of sale. The notification shall be made by telephone at the number furnished by the person, and also by telex or facsimile if the person furnishes a telex or facsimile. number. All bids for Bonds shall be sealed and shall be presented to the Secretary at the principal office of the Authority, and the Secretary shall continue to receive all bids offered until the hour fixed for the sale of the Bonds, at which time and place he shall open and consider each bid. Bidders for the Bonds shall be required to name the rate or rates of interest which the Bonds are to bear, not exceeding the maximum rate set forth herein. The interest rate on • -5- • Bonds of a given maturity must be at least as great as the interest rate on Bonds of any earlier maturity. Bids specifying more than one interest rate shall also specify the amount and maturities of the Bonds bearing each rate, and all Bonds maturing on the same date shall bear the same single rate of interest. Such rate or rates of interest shall be in multiples of one-eighth (1/8) or one- twentieth (1/20) of one percent (1%). Subject to the provisions contained below, the Secretary shall award the Bonds to the bidder offering the lowest net interest cost to the Authority, to be determined by computing the total interest on all of the Bonds from the date thereof to their maturities and deducting therefrom the premium bid, if any, or adding thereto the amount of any discount, if any. No bid for less than $5,594,800, plus accrued interest at the rate or rates named to the date of delivery, will be considered. The Secretary shall have full right to reject any and all bids. In the event no acceptable bid is received at the time fixed for the sale of said Bonds, the Secretary shall be authorized to continue to receive bids from day to day thereafter for a period not to exceed thirty (30) days, without readvertising; provided, however, that if said sale be continued, no bid shall be accepted which offers an interest cost which is equal to or higher than the best bid received at the time fixed for the sale of the Bonds. Prior to the delivery of the Bonds the Secretary shall be authorized to obtain a legal opinion as to the validity of the Bonds from Baker & Daniels, bond counsel for the Authority, and to -6- • furnish such opinion to the purchaser or purchasers of the Bonds. The cost of such opinion shall be considered as part of the costs incidental to the issuance of the Bonds and shall be paid out of proceeds of said Bonds. Section 9. If the President and the Treasurer, with the advice of the financial advisor to the Authority, determine that market conditions at the time of the sale of the Bonds are such that the Authority is able to finance the Project by issuing Bonds in an aggregate principal amount which is less than $5,680,000, then the Authority shall issue such lesser principal amount of Bonds. Section 10. After the sale of the Bonds, the President and the Secretary are authorized to complete the Trust Agreement • and then to execute the same on behalf of the Authority. Section 11. The President, Vice President, and Secretary-Treasurer of this Authority and each of them is hereby authorized to take all such actions and to execute all such instruments as are desirable to carry out the transactions contemplated by this Resolution, in such forms as the President, Vice President, and Secretary-Treasurer executing the same shall deem proper, to be evidenced by the execution thereof. Section 12. The provisions of this Resolution and the Trust Agreement shall constitute a contract between the Issuer and the holders of the Bonds, and, after the issuance of the Bonds, this Resolution shall not be repealed or amended in any respect -7- • which would adversely affect the rights of such holders so long as the Bonds or the interest thereon remains unpaid. ADOPTED at a meeting of the Authority held on September 10, 1992, in the .offices of the Authority, 1200 County- City Building, 227 West Jefferson Boulevard, South Bend, Indiana 46601. CITY OF SOUTH BEND REDEVELOPMENT AUTHORITY BY : ' "~ J se W. Wroblewski, President A ST: ~ `~.,,~ Donald K. Fewell, Secretary-Treasurer \rrrompol\sthbend\golfcour.se\lubond.ra;tmg;9/9/92 -$- r. TRUST AGREEMENT Between SOUTH BEND REDEVELOPMENT AUTHORITY AND NORWEST BANK INDIANA, N.A., South Bend, Indiana, Trustee Dated as of September 1, 1992 (Blackthorn Golf Course Project) ~ t r l INDEX Paae Parties, Recitals . 1 Granting Clauses . 1 ARTICLE I. Definitions 3 ARTICLE II. Maturities, Form, Issuance, Delivery and Registration of Bonds 5 ARTICLE III. Funds 12 ARTICLE IV. Redemption of Bonds 15 ARTICLE V. Covenants of the Authority 18 ARTICLE VI . Insurance 2 6 ARTICLE VII. Remedies in Case of Default 30 ARTICLE VIII. Defeasance, Payment, Release 35 ARTICLE IX. Concerning the Trustee 36 ARTICLE X. Supplemental Agreements 40 ARTICLE XI. Miscellaneous Provisions 43 t TRUST AGREEMENT THIS AGREEMENT (the "Agreement"), executed and dated as of the 1st day of September, 1992, made and entered into between SOUTH BEND REDEVELOPMENT AUTHORITY, a public body corporate and politic, organized and existing under Indiana Code 36-7-14.5, as amended (hereinafter called the "Authority"), and NORWEST BANK, INDIANA, N.A., having its principal office in the City of South Bend, Indiana (hereinafter called the °'Trustee"), W I T N E S S E T H: WHEREAS, the Authority was created under and pursuant to the provisions of Indiana Code 36-7-14.5 (hereinafter referred to as the "Act"), for the purpose of financing local public improvements for lease to the South Bend Redevelopment Commission (hereinafter referred to as the °'Commission"); and WHEREAS, the Authority has determined to borrow the sum of Five Million Six Hundred Eighty Thousand Dollars ($5,680,000) for the purpose of procuring funds to pay the cost of the Project (as hereinafter defined) and to execute and issue its Lease Rental Revenue Bonds in the form and terms as hereinafter provided; and WHEREAS, the Authority intends to lease said Project to the Commission pursuant to a lease dated as of July 1, 1992; and WHEREAS, in order to secure the principal of and premium, if any, and interest on all of said Bonds and the performance of the covenants herein contained, the Authority has in like manner determined to execute and deliver this Agreement; and WHEREAS, all acts, proceedings and things necessary and required by law to make said Bonds, when executed by the Authority and authenticated by the Trustee, the valid, binding and legal obligations of the Authority and to constitute and make this Agreement a valid agreement to secure the payment of the principal of and premium, if any, and interest on the Bonds, have been done, taken and performed, and the issuance, execution and delivery of said Bonds, and the execution, acknowledgment and delivery of this Agreement have, in all respects, been duly authorized by the Authority in the manner provided and required by law; now therefore, SOUTH BEND REDEVELOPMENT AUTHORITY, in consideration of the premises and the acceptance of such Bonds by the holders thereof, and the sum of One Dollar ($1) in hand paid by the Trustee, receipt of which is hereby acknowledged, and especially in order to secure -1- the punctual payment of the principal of, premium, if any, and interest on the Bonds to be issued and at any time outstanding hereunder as the same shall become due, according to the tenor hereof and thereof, and the faithful performance of all the covenants and agreements contained in said Bonds and in this Agreement, and in performance of the authority of every kind and nature which said Authority has or may have, has executed and delivered this Agreement and has pledged and assigned and by these presents does hereby pledge and assign unto Norwest Bank Indiana, N.A. , as Trustee and to its successors in said trust and to its assigns, the Lease (as hereinafter defined) and the Pledged Funds (as hereinafter defined) subject to the provisions of this Agreement requiring or permitting the application thereof for the purposes and on the terms set forth in this Agreement. The pledge herein made is and shall be subject to the provisions of this Agreement for the equal and proportionate benefit, security and protection of all holders of the Bonds issued or to be issued under and secured by this Agreement, without preference, priority or distinction as to lien or otherwise by reason of the date of maturity thereof, or for any other reason whatsoever, subject to the provisions of this Agreement. PROVIDED, HOWEVER, that if the Authority, its successors or its assigns, shall well and truly pay, or cause to be paid, the principal of the Bonds and the premium, if any, and the interest due or to become due thereon, at the times and in the manner as set forth in said Bonds in accordance with the terms hereof, and shall well and truly keep, perform and observe .all covenants and conditions pursuant to the terms of this Agreement to be kept, performed and observed by the Authority, and shall pay to the Trustee all sums. of money due, or to become due to it, in accordance with the terms and provisions hereof, then this Agreement and the rights hereby granted shall cease, determine and be void, but otherwise, this Agreement shall remain in full force and effect. All Bonds issued and secured hereunder are to be issued, authenticated and delivered, and all property hereby pledged is to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed; and the Authority has agreed and covenanted, and does hereby agree and covenant, with the Trustee and with the respective owners, from time to time, of the said Bonds or any part thereof, as follows: -2- ARTICLE I. Definitions Sec. 1.01. The terms defined in this Article I shall, for all purposes of this Agreement, and any agreement supplemental hereto, have the meanings herein specified, unless the context otherwise requires: (a) "Agreement11 or "this Agreement" means this instrument, either as originally executed or as it may from time to time be supplemented, modified or amended by any supplemental agreement entered into pursuant to the provisions of this Agreement. (b) t1Arbitrage Regulations" means the Treasury Regulations under Section 148 of the Code, as the same may be amended or supplemented or proposed to be amended or supplemented from time to time. (c) "Authority" means the South Bend Redevelopment Authority, a body corporate and politic, or any successor entity. Authority. (d) "Board" means the Board of Directors of the (e) "Bond" or "Bonds" (unless the context shall otherwise require) means any Bond or Bonds, or all the Bonds, as the case may be, authenticated and delivered under this Agreement. (f) "Bondholder," "holder," "owner" and "registered owner" means the registered owner of a Bond. (g) "Code" means the Internal Revenue Code of 1986, as amended. (h) 11Commission" means the South Bend Redevelopment Commission, or if said commission shall be abolished, the commission, board, body or agency succeeding to the principal functions thereof. (i) "Construction Fund" means the Construction Fund created and established by Section 3.01. (j) "Government Obligations" means bonds, notes, certificates of indebtedness, treasury bills or other securities constituting direct obligations of, or obligations the timely payment of the principal of and the interest on which are fully and unconditionally guaranteed by, the United States of America or any -3- / ) t 1 agency or instrumentally thereof when such obligations are backed by the full faith and credit of the United States of America. (k) "Lease" means the lease by .the Authority to the Commission, dated as of July 1, 1992, as the same may be amended or supplemented. (1) "Operation and Reserve Fund" means the Operation and Reserve Fund created and established by Section 3.03. (m) "Pledged Funds" means (i) the proceeds from the sale of Bonds; (ii) the rentals to be received under the Lease; and (iii) all moneys and securities from time to time held by the Trustee under the terms of this Agreement (except moneys or securities held in accounts to pay for Bonds called for redemption or with respect to which irrevocable instructions to redeem have been given to the Trustee), including without limitation the moneys held in trust funds. (n) "Project" means the real estate (including all right-of-way easements contained therein) in South Bend, Indiana, and improvements to be made thereon by the Authority or its agent, all as described in Exhibit A hereto, which Project is to be financed with the proceeds of the Bonds and leased to the Commission, pursuant to the Lease. (o) "Qualified Securities" means investments in: (i) Government Obligations; (ii) certificates of deposit issued by banks and mutual savings banks incorporated under the laws of the State of Indiana and in national banking associations having their principal banking offices in the State of Indiana, including the Trustee, provided such certificates of deposit do not exceed in the aggregate ten percent (10%) of the combined capital, surplus and undivided profits of any such bank or association and that each such bank or association has a combined capital and surplus of at least $25,000,000; and provided further that such certificates of deposit are insured by the Federal Deposit Insurance Authority or the Federal Savings and Loan Insurance Authority or, to the extent not so insured, collateralized by interest-bearing obligations described in clause (i) above in which the Trustee has a perfected security interest; or (iii) repurchase agreements, entered into with banks and mutual savings banks incorporated under the laws of the State of Indiana and in national banking associations having their principal banking offices in the State of Indiana, including the Trustee, that are fully collateralized by interest-bearing obligations described in clause (i) above based upon the market value of such obligations on the day such agreement becomes effective, in which the Trustee has a perfected security interest. -4- ~ r ~ + (p) "Redemption Price," with respect to the Bonds outstanding under this Agreement, means the price at which the Bonds are redeemable as set forth in Article IV of this Agreement. (q) "Sinking Fund" means the Sinking Fund created and established by Section 3.02. (r) "Trustee" means and includes not only the Trustee but also its successor or successors in trust. (s) Unless the context shall clearly otherwise indicate, words importing the singular number shall include the plural number in each case, and vice versa, and words importing persons shall include firms and corporations, and terms employed in the disjunctive form shall be deemed to be employed .also in the conjunctive form and vice versa. ARTICLE II. Maturities, Form, Issuance, Deliverer and Registration of Bonds Sec. 2.01. The principal amount of all Bonds which may be issued and outstanding under this Agreement shall be Five Million Six Hundred Eighty Thousand Dollars ($5,680,000) face value. The Bonds shall be originally dated as of the first day of the month in which they are to be originally delivered, shall be issued in the denomination of Five Thousand Dollars ($5,000) each, or any integral multiple thereof and shall be numbered consecutively. The Bonds shall mature serially on March 1 in the years. and amounts and bear interest at the rates as follows: Year Amount Year Amount 1999 $ 40,000 2007 $450,000 2000 90,000 2008 470,000 2001 140,000 2009 505,000 2002 205,000 2010 535,000 2003 270,000 2011 570,000 2004 340,000 2012 605,000 2005 395,000 2013 645,000 2006 420,000 The interest on all of the Bonds is payable semiannually on March 1 and September 1 of each year, beginning March 1, 1993. Interest shall be calculated on the basis of twelve 30-day months for a 360-day year. -5- The interest on the Bonds shall be payable by check or draft mailed one business day prior to the interest payment date to the person in whose name each Bond is registered on the fifteenth day of the month preceding such interest payment date. The principal of, and premium on, the Bonds shall be payable upon presentment and surrender thereof in lawful money of the United States of America, at the principal office of the Trustee in the City of South Bend, Indiana. All Bonds shall be cancelled upon their payment by the Trustee. The Trustee shall dispose of such Bonds as permitted by law and furnish to the Authority a certificate of their disposal, signed by an authorized officer of the Trustee. Sec. 2.02. The Bonds shall be executed in the name of the Authority by the facsimile signature of the President of its Board and attested by the facsimile signature of the Secretary-Treasurer of the Board. In case any official whose facsimile signature appears on the Bonds, shall cease to be such officer before the Bonds shall be duly issued and delivered, such Bonds shall, nevertheless, be the Bonds of the Authority and in all respects binding and obligatory upon it to the same extent as if signed by the officers of the Authority at the date of the actual issuance and delivery thereof. Sec. 2.03. Each of the Bonds shall be authenticated by a certificate of the Trustee endorsed thereon substantially in the form hereinafter set forth. Only such Bonds as shall bear thereon the certificate of the Trustee shall be secured by this Agreement or entitled to any lien or benefit hereunder, and the certificate of the Trustee upon any such Bond executed by the Authority shall be conclusive evidence that the Bond so authenticated has been duly issued hereunder and is entitled to the benefits of the trust hereby created. Sec. 2.04. The form of said Bonds, the Trustee's certificate to be endorsed thereon, and the registration endorsement (with appropriate insertions of amounts and distinguishing numbers and letters), shall be substantially as followse -6- (Form of Bond) UNITED STATES OF AMERICA State of Indiana County of St. Joseph Registered No. SOUTH BEND REDEVELOPMENT AUTHORITY LEASE RENTAL REVENUE BOND (BLACKTHORN GOLF COURSE PROJECT) Interest Maturity Original Authentication Rate Date Date Date CUSIP Registered Owner: Principal Sum: SOUTH BEND REDEVELOPMENT AUTHORITY, a body corporate and politic, duly organized and existing under the laws of the State of Indiana (hereinafter called the "Authority"), for value received, hereby promises to pay to the Registered Owner (named above) or registered assigns, solely out of the Pledged Funds (hereinafter referred to) the Principal Sum set forth above on the Maturity Date set forth above (unless this Bond is subject to and shall have been duly called for prior redemption and payment made as provided for herein), and to pay interest hereon solely from such Pledged Funds until the Principal Sum shall be fully paid at the rate per annum stated above from the interest payment date next preceding the Authentication Date of this Bond unless this Bond is authenticated after the fifteenth day of the month preceding an interest payment date and on or before such interest payment date in which case it shall bear interest from such interest payment date, or unless this Bond is authenticated on or before February 15, 1993, in which case it shall bear interest from the Original Date, which interest is payable on September 1 and March 1 of each year, beginning on March 1, 1993. Interest shall be calculated on the basis of twelve 30-day months for a 360-day year. Interest on this Bond is payable by check or draft mailed one business day prior to the interest payment date to the person in whose name this Bond is registered on the fifteenth day of the month preceding such interest payment date. Principal and premium, if any, of this Bond are payable upon presentment and surrender hereof in lawful money of the United States of America at the principal office of Norwest Bank Indiana N.A., South Bend, Indiana 46601. -7- ~ i 1 R This Bond shall not be a valid obligation until duly authenticated by the Trustee, or its successors intrust, by the execution of the certificate endorsed hereon. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF WHICH SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF DULY SET FORTH HEREIN. IN WITNESS WHEREOF, the SOUTH BEND REDEVELOPMENT AUTHORITY has caused this Bond to be executed in its name and on its behalf by the facsimile signature of the President of its Board of Directors .and attested by the facsimile signature of the Secretary-Treasurer of its Board of Directors. SOUTH BEND REDEVELOPMENT AUTHORITY By (facsimile) President, Board of Directors ATTEST: (facsimile) Secretary-Treasurer, Board of Directors TRUSTEE'S CERTIFICATE a This Bond is one of the Bonds described in the within-mentioned Trust Agreement. Trustee By Authorized Officer (Reverse of Bond) This Bond is one of an authorized issue of Bonds of the South Bend Redevelopment Authority, all of like date, tenor and effect (except as to numbering, denomination, interest rates and dates of maturity), in the aggregate principal amount of Five Million Six Hundred Eighty Thousand Dollars ($5,680,000), issued under and in accordance with, and all equally and ratably entitled to the benefits of, and ratably secured by, a Trust Agreement (hereinafter called the "Agreement"), dated as of September 1, 1992, executed by the Authority and Norwest Bank Indiana, N.A., as Trustee, to which reference is hereby made for a description of the rentals and other income (the "Pledged Funds") pledged as security for the payment of the Bonds and interest thereon and the rights under said Agreement of the Authority, the holders of the Bonds and the Trustee, to all of which the holders hereof, by the acceptance of this Bond, agree. The Authority covenants that one business day prior to September 1 and March 1 in each year, beginning with March 1, 1993, it will pay to the Trustee, prior to the due date, solely out of the Pledged Funds, an amount sufficient to -8- ~ f pay the principal and all interest as it becomes due until all of the Bonds of this issue shall have been retired. The Bonds of this issue maturing on or after March 1, 2002, may be redeemed prior to maturity at the option of the Authority in whole or in part in whole multiples of $5,000, in inverse order of maturities and by lot within maturities, on any date not earlier than March 1, 2001, from any monies made available for that purpose, at face value plus accrued interest to the date fixed for redemption together with a premium of two percent (2%) if redeemed on March 1, 2001, or thereafter on or before February 28, 2002; one percent (1%) if redeemed on March 1, 2002, or thereafter on or before February 28, 2003, and without premium thereafter; provided notice has been given by first-class mail to the registered owners of all Bonds to be redeemed. If this Bond is so called for redemption, and payment is made to the Trustee in accordance with the terms of the Agreement, this Bond shall cease to bear interest or to be entitled to the lien of the Agreement from and after the date fixed for the redemption in the call. In case an event of default, as defined in the Agreement, occurs, the principal of this Bond may become or may be declared due and payable prior to the stated maturity hereof, in the manner, and with the effect, and subject to the conditions provided in the Agreement. This Bond is transferable by the registered owner hereof at the principal office of Norwest Bank Indiana, N.A., upon surrender and cancellation of this Bond and on presentation of a duly executed written instrument of transfer and thereupon a new Bond or Bonds of the same aggregate principal amount and maturity and in authorized denominations will be issued to the transferee or transferees in exchange therefor. This Bond may be exchanged upon surrender hereof at the principal office of Norwest Bank Indiana, N.A., duly endorsed by the owner for the same aggregate principal amount of Bonds of the same maturity in authorized denominations as the owner may request. The Authority and the Trustee may deem and treat the person in whose name this Bond is registered as the absolute owner hereof. The following abbreviations, when used in the inscription on the face of the within 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 GIFT MIN ACT - _ Custodian (Gust) under Uniform Gifts to Minors Ac (Minor) -9- ~ 1 (State) Additional abbreviations may also be used though not in the list above. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto please insert social security or other identifying number of assignee (please print or typewrite name and address of Transferee) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints Attorney, to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed NOTICE: Signature(s) must be guaranteed by a broker-dealer or a commercial bank or trust company. REGISTERED OWNER NOTICE: The signature to this assignment must correspond with the name of the Registered Owner as it appears upon the face of the within Bond in every particular, without alternation or enlargement or any change whatever. (End of Bond Form) Sec. 2.05. The Bonds so executed by the Authority and authenticated by the Trustee shall be delivered by the Trustee to the purchasers thereof in the amount, at the time, and upon the payment of the purchase price thereof, as requested in writing by the Authority. Sec. 2.06. In case any Bond issued under this Agreement shall become mutilated or be destroyed, stolen or lost, the Authority, in its discretion, may issue, and thereupon said Trustee shall certify and deliver in exchange for and in place and upon cancellation of the mutilated Bond, or in lieu of and substitution -10- f / ~ for the same if destroyed, stolen or lost, a new Bond of like denomination and tenor, but which,. in the discretion of the Authority or the Trustee, may bear the same or a different serial number, be marked "Duplicate," or be otherwise distinguished. In case of destruction, theft or loss, the applicant for a substituted Bond shall furnish to the Authority and said Trustee evidence of the destruction of such Bond so destroyed, which evidence must be satisfactory to the Authority and said Trustee, in their discretion, and said applicant shall also furnish indemnity satisfactory to both of them in their discretion. The Authority shall have the right to require the payment of the expense of issuing such replacement prior to the delivery of a new Bond. Sec. 2.07. The Trustee shall keep, at its principal office, a record for the registration of Bonds issued hereunder which shall, at all reasonable times, be open for inspection by the Authority. Each registered Bond shall be transferable only on such record at the principal office of the Trustee, at the written request of the registered owner thereof or his attorney duly authorized in writing, upon surrender thereof, together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his duly authorized attorney. Sec. 2.08. The Authority and the Trustee may deem and treat the person in whose name any Bond issued hereunder shall be registered as the absolute owner of such Bond for the purpose of receiving payment of or on account of the principal of said Bond, and for all other purposes whatsoever. Sec. 2.09. Registered owners of Bonds may, upon surrender thereof at the principal office of the Trustee with a written instrument of transfer satisfactory to the Trustee, exchange a Bond or Bonds for a Bond or Bonds of equal aggregate principal amount of the same maturity and interest rate of any authorized denominations. For every exchange or transfer of Bonds, the Trustee may make a charge sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer, which shall be paid by the person requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer. The cost of preparing each new Bond upon each exchange or transfer, and any other expenses of the Trustee incurred in connection therewith (except any applicable tax, fee or other governmental charge) shall be paid by the Authority. The Trustee shall not be obliged to make any transfer or exchange of any Bond called for redemption within thirty days of the redemption date. -11- ARTICLE III. Funds Sec. 3.01. There is hereby established and created a fund designated as the "South Bend Redevelopment Authority Blackthorn Golf Course Project Construction Fund." The Construction Fund shall consist of the following accounts: Construction Account and Bond Interest Account. The Trustee shall deposit in the Bond Interest Account the accrued interest paid by the purchaser and any unused discount and an amount equal to $ from the Bond proceeds. The Trustee shall, without other or further authority than is hereby given, pay from the Bond Interest Account, or if the Bond Interest Account is not sufficient, then from the Construction Account, or if the Bond Interest Account and the Construction Account are not sufficient, then from the Operation and Reserve Fund created below, interest accruing on all obligations of the Authority until the filing of the Affidavit of Project Completion referred to below. The Trustee shall deposit all Bond proceeds not required to be deposited in another account into the Construction Account. The Trustee shall pay the cost of issuance of the Bonds from such account upon the presentation of an affidavit executed by any. two officers of the Authority, stating the character of the expenditure, the amount thereof, and to whom due, together with a statement of the creditor as to the amount owing. The Trustee shall also pay obligations incurred for labor and to contractors, vendors, builders and materialmen, and for acquiring real estate and improvements thereto and equipment for the Project, the fees and expenses of architects, engineers and construction managers and any costs of construction and land acquisition and any other incidental costs incurred in connection with the cost of construction and equipment of the Project and land acquisition, including the audit referred to in Section 5.07(c). Such payments shall be made on presentation of a certificate of an architect or engineer of work completed and materials or items furnished, approved in writing by any two officers of the Authority (or, alternatively, by any two members of the Board of Public Works of the City of South Bend, Indiana (the "Board of Public Works"), so long as the Agency Agreement (the "Agency Agreement") dated 1992 between the Authority and the Board of Public Works is in effect; the Authority has provided the Trustee with a copy of such Agency Agreement and hereby covenants to provide the Trustee copies of any amendments to such Agency Agreement), or in the case of any items not subject to certification by the architect or engineer, then upon the presentation of an affidavit executed by any two officers of the Authority (or, alternatively, by any two members of the Board of Public Works, as set forth above), stating -12- the character of the expenditure, the amount thereof, and to whom due, together with the statement of the creditor as to the amount owing. Upon the filing with the Trustee of such Affidavit of Project Completion, which Affidavit of Project Completion shall be set forth on AIA Form No. G704, the Trustee shall: (a) Transfer from the Bond Interest Account of the Construction Fund to the Sinking Fund created by Section 3.02 an amount sufficient to pay principal and interest on the Bonds which the lease rental received pursuant to the Lease hereof will not be sufficient to pay when due; and (b) Transfer the balance, if any, in the Bond Interest Account to the Construction Account. After the filing of said Affidavit of Project Completion, the Trustee shall hold in the Construction Account an amount equal to one hundred fifty percent (150%) of the amount of any disputed claims of contractors and work to be repaired as identified in writing by the Authority to the Trustee, and transfer the unobligated balance of the Construction Account, if any, to the Sinking Fund referred to in Section 3.02 hereof. Any balance remaining in the Construction Account after payment of all disputed claims, claims for repair work, and obligations authorized by Subsection (Third) of Section 5.12 shall be transferred to the Sinking Fund within ten (10) days after the last payment of such obligations. The Trustee shall have no responsibility to see that the Construction Fund is properly applied, except as herein specifically provided. Sec. 3.02. There is hereby established and created a fund designated as the "South Bend Redevelopment Authority Blackthorn Golf Course Project Sinking Fund." The Trustee shall deposit in such Sinking Fund from each rental payment received by the Trustee pursuant to the Lease, an amount equal to the following whichever is less: (a) All of such rental payment; or (b) An amount which, when added to the amount in the Sinking Fund on the deposit date equals the sum of the following amounts: (i) Unpaid interest on the Bonds due on, before or within forty-five (45) days after the date such rental payment becomes due; and -13- (ii) Unpaid principal on the Bonds due on, before or within eight (8) months from the date such rental payment becomes due. Any portion of a rental payment remaining after such deposit shall be deposited by the Trustee in the Operation and Reserve Fund provided for in Section 3.03. The Trustee shall from time to time withdraw from such Sinking Fund, or if-the Sinking Fund is not sufficient, then from the Construction Account of the Construction Fund, or if the Sinking Fund and the Construction Account of the Construction Fund are not sufficient, then from the Operation and Reserve Fund created below, and shall deposit in a special trust fund and make available to itself, sufficient moneys for paying the principal of the Bonds at maturity and to pay the interest on the Bonds as the same falls due. Sec. 3.03. There is hereby established and created a fund designated as the 'South Bend Redevelopment Authority Blackthorn Golf Course Project Operation and Reserve Fund." The Operation and Reserve Fund shall be used only to pay necessary incidental expenses of the Authority (e.g. required audits, appraisals, meetings and reports), the payment of principal, interest and redemption premiums of the Bonds herein described upon redemption as authorized by Article IV hereof or the purchase price of Bonds purchased as authorized by Sec. 3.07, and if the amount in the Sinking Fund at any time is less than the required amount, the Trustee shall, without any further authorization, transfer funds from the Operation and Reserve Fund to the Sinking Fund in an amount sufficient to raise the amount in the Sinking Fund to the required amount. Such action by the Trustee shall not constitute a waiver of any other right or remedy the Trustee may have under this Agreement. Incidental expenses shall be paid by the Trustee upon the presentation of an affidavit executed by any two (2) officers of the Authority, stating the character of the expenditure, the amount thereof, and to whom due, together with the statement of the creditor as to the amount owing. The Operation and Reserve Fund may also be used for purposes stated in Section 5.11. Sec. 3.04. Pursuant to the written instructions of the Authority, the Trustee shall establish and maintain such fund or funds and take such other actions as may be necessary to enable the Authority to satisfy the requirements of Section 148(f) of the Code and the Arbitrage Regulations; provided, however, that the Trustee shall be under no obligation to make computations of the amount of arbitrage required to be rebated to the federal government of the United States of America. Sec. 3.05. The Trustee shall, at the written direction of the Authority, and subject to Section 5.14, invest all or so much -14- of the funds as is practicable in Qualified Securities, to the extent and in the manner permitted by law. Investment earnings shall be deposited into the Construction Account until receipt by the Trustee of an Affidavit of Project Completion as provided in Article III, and thereafter, shall be credited to the fund from which the investments were made. The Trustee is authorized to sell any securities so acquired from time to time in order to make the payments authorized in this Agreement. Investment of the Sinking Fund shall mature prior to the time the funds invested will be needed for payment of principal of and interest on the Bonds. Sec. 3.06. Whenever the amounts contained in the Sinking Fund and the Operation and Reserve Fund are sufficient, together with any other funds deposited with the Trustee by the Authority, to redeem, upon the next redemption date, all Bonds secured hereby then outstanding, the Trustee shall apply the amounts in such Funds to the redemption of such Bonds pursuant to Article IV hereof. Sec. 3.07. At the request of the Authority, expressed by a resolution of the Board of Directors, or a copy thereof certified by the Secretary-Treasurer and delivered to the Trustee, the Trustee may remove funds from the Operation and Reserve Fund to be used for the redemption of Bonds, or for the purchase of Bonds if the Authority determines that redemption or purchase of Bonds would be advantageous to the Authority. Sec. 3.08. A pledge of all moneys paid or deposited into the Sinking Fund, and of all rentals paid pursuant to the Lease other than pursuant to Section 3(b) thereof, is hereby made, and the same are hereby pledged to the Trustee to secure the payment of the principal and redemption price of and interest on the Bonds, all to the extent herein provided. The rentals so pledged and hereafter received by the Trustee or Authority, shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act; and the lien of such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Authority, irrespective of whether such parties have notice thereof. ARTICLE IV. Redemption of Bonds Sec. 4.01. The Authority shall have the right, at its option, to redeem, according to the procedure hereinafter provided, all or any part of the Bonds secured by this Agreement maturing on or after March 1, 2002, in whole multiples of $5,000, in inverse order of maturities and by lot within maturities, on any date not earlier than March 1, 2001, from any moneys made available for that -15- purpose, at face value plus accrued interest to the date fixed for redemption together with a premium of two percent (20) if redeemed on March 1, 2001, or thereafter on or before February 28, 2002; one percent (1~) if redeemed on March 1, 2002, or thereafter on or before February 28, 2003; and without premium thereafter. Sec. 4.02. To evidence its intention to exercise the right of redemption, the Authority shall, not less than forty-five (45) days prior to the date selected for redemption, file with the Trustee written notice of its intention to redeem, designating the date fixed for redemption, and if less than all of the outstanding Bonds are to be redeemed stating the aggregate principal amount of Bonds which the Authority desires to redeem. If less than all of the outstanding Bonds are to be redeemed, then the Bonds shall be redeemed in inverse order of maturity and by lot (in such manner as the Trustee shall determine) within maturities. No. defect in such notice by the Authority to the Trustee shall affect the validity of the redemption of any Bonds. Sec. 4.03. Official notice of such redemption shall be sent first-class mail by the Trustee to the registered owners of all Bonds to be redeemed, not less than thirty (30) days prior to the date fixed for redemption. Said official notice shall be dated and shall, with substantial accuracy: (a) Designate the date and places of redemption, said places to be the offices of the Trustee; (b) If the Bonds to be redeemed are less than the whole amount outstanding, designate the Bonds (or portions thereof) to be redeemed; and (c) State that on the designated date fixed for said redemption said Bonds shall be redeemed by the payment of the applicable redemption price hereinbefore set forth, and that from and after the date so fixed for such redemption interest on the Bonds so called for redemption shall cease. In all cases, the cost and expenses of the preparation and mailing of said official notices of redemption shall be paid by the Authority. In addition to the foregoing notice, further notice may be given by the Trustee as it deems appropriate by mail, publication or otherwise to registered securities depositories, national information services or others containing the above information and such further information as the Trustee may deem appropriate, but no defect in said further notice, nor any failure to give all or any portion of such further notice shall in any manner defeat the -16- effectiveness of a call for redemption if notice thereof is given as above described. Sec. 4.04. Such notice having been mailed as above provided, the Bonds designated for redemption shall, on the date specified in such notice, become due and payable at the then applicable redemption price, and on presentation and surrender of such Bonds in accordance with such notice, at the place at which the same are expressed in such notice to be redeemable, such Bonds shall be redeemed by the Trustee on behalf of the Authority by the payment of such redemption price to the registered owners out of funds held by the Trustee for that purpose. From and after the date of redemption so designated, unless default shall be made in the redemption of the Bonds upon presentation, interest on Bonds designated for redemption shall cease. If not so paid on presentation thereof, the Bonds shall continue to bear interest at the rate therein specified. Sec. 4.05. All Bonds so redeemed (or purchased as authorized by Sec. 3.07) shall be cancelled and disposed of as provided in Section 2.01. Bonds so redeemed or purchased shall not be reissued, nor shall any Bonds be issued in lieu thereof. Sec. 4.06. If the amount necessary to redeem any Bonds called for redemption, as aforesaid, shall have been deposited with the Trustee for the account of the owner or owners of such Bonds on or before the date specified for such redemption, and if the notice hereinbefore mentioned shall have been duly mailed or provision satisfactory to the Trustee shall have been made for the mailing of such notice, and if all proper charges and expenses of the Trustee in connection with such redemption shall have been paid or provided for, the Authority shall be released from all liability on such Bonds and such Bonds shall no longer be deemed to be outstanding hereunder, and interest thereon shall cease at the date specified for such redemption; and thereafter such Bonds shall not be secured by the lien of this Agreement. The Trustee shall be privileged to give notice of any call for redemption, but shall not be required to do so unless the amount necessary to redeem the Bonds called and to pay all proper charges of the Trustee shall have been deposited with, paid to, or otherwise made available to the Trustee, as aforesaid. In case any question shall arise as to whether any such notice shall have been sufficiently given or any such redemption shall be effective, such question shall be decided by the Trustee, and the decision of the Trustee shall be final and binding upon all parties in interest. -17- ARTICLE V. Covenants of the Authority Sec. 5.01. The Authority covenants and agrees that it will faithfully do and perform, and at all times faithfully observe, any and all covenants, undertakings, stipulations and provisions contained in each and every Bond issued hereunder, and will duly and punctually pay or cause to be paid the principal of said Bonds and the premium, if any, and interest thereon, at the times and places, and in the manner mentioned in said Bonds, according to the true intent and meaning thereof.. Except as in this Agreement otherwise provided, the principal, interest and premiums are payable solely from Pledged Funds including the rental derived from the Project, which Pledged Funds are hereby pledged to the payment thereof in the manner and to the extent provided in this Agreement and in said Bonds. Sec. 5.02. The Authority covenants that it will promptly make, execute and deliver all agreements. supplemental hereto, or otherwise, and take all such action as may be reasonably be deemed, by the Trustee or by its counsel, necessary or advisable for the better securing of any Bonds issued hereunder, or as may be required to carry out the purposes of this Agreement. Sec. 5.03. The Authority covenants that, except as to that part of the Project which may hereafter be acquired by it, the Authority has heretofore acquired the Project, subject only to Permitted Encumbrances, defined in the Lease, and such other encumbrances as shall be permitted by the Trustee, and has good right, full power and lawful authority to make this Agreement and to pledge the lease rentals of the Project as herein provided, and that it has and will preserve all of its interest in all. such property, subject to Permitted Encumbrances, as such term is defined in the Lease, and such other encumbrances as shall be permitted by the Trustee, and will warrant and defend the same to the Trustee against the claims of all persons whatsoever. Sec. 5.04. The Authority covenants that it will promptly, and before they shall become delinquent, pay or cause to be paid all lawful taxes, charges and assessments at any time levied or assessed upon or against the Project, or any part thereof, or upon the use of the same, or upon the income or profits thereof, and all license fees, franchise taxes and other like statutory charges; provided, however, that no such tax, charge or assessment shall be required to be paid so long as the validity of the same shall be in good faith contested by the Authority; further, that it will not suffer any lien or charge to be enforced or to exist against the Project or any part thereof, or upon the Lease or the Pledged Funds, except the lien and charge of the Bonds secured hereby upon -18- such Lease and Pledged Funds, and except for Permitted Encumbrances, as such term is defined in the Lease, and such other encumbrances as shall be permitted by the Trustee; that it will not commit or suffer any waste of said property; and that ].t will at all times, directly or through .other appropriate governmental entities, operate the property and keep and maintain said property and all buildings, structures, apparatus and appurtenances thereon or thereof in good repair, working order and condition, and will from time to time make, or cause to be made, all needful and proper repairs, renewals and replacements. Sec. 5.05. The Authority covenants that until all indebtedness secured by this .Agreement is fully paid, it will faithfully observe and comply with the terms of all applicable laws and ordinances of the State of Indiana and any political or municipal subdivision thereof. Sec. 5.06. If the Authority should at any time fail to pay in apt season any tax, assessment or other charge upon the Project, or any part thereof, or fail to pay promptly when payable any license fee, franchise or corporation tax, or like statutory charge, the Trustee may, without obligation to inquire into the validity thereof, pay such tax, assessment, fee or other charge, but without prejudice to the rights of the Trustee arising hereunder in consequence of such default, and the amount of every payment so made at any time by the Trustee, with interest thereon at the highest rate of interest on any one of the Bonds when sold, whether or not then outstanding, from the date of payment, shall constitute an additional indebtedness of the Authority secured by the lien of this Agreement, prior or paramount to the lien hereunder of any of said Bonds and the premium and interest thereon. Sec. 5.07. The Authority covenants that proper books of record and account will be kept in which full, true and correct entries will be made of all dealings or transactions of or in relation. to the properties, business affairs of the Authority, and that it will: (a) At such times as the Trustee shall reasonably request, furnish statements in reasonable detail showing the earnings, expenses and financial condition of the Authority. (b) From time to time furnish to the Trustee such information as to the property of the Authority as the Trustee shall reasonably request. (c) On or before the expiration of one hundred twenty (120) days after the Affidavit of Project Completion is filed with the Trustee pursuant to Article TII, furnish to the Trustee a full -19- audit and report, certified by independent certified public accountants, covering the operations of the Authority to the completion of construction, and showing the receipts and disbursements for such period, and the assets and liabilities of the Authority at the expiration of such period. Such financial statements and reports shall be available at all reasonable times for the inspection of any Bondholder or his authorized agent. If the Authority shall fail to obtain and furnish such audit and report, the Trustee shall procure such audit and report, and pay for the same from the Operation and Reserve Fund, unless there are not sufficient funds in said Fund, in which case all moneys paid by the Trustee for such audit and report, together with interest thereon at the highest rate of interest on any of the Bonds when sold, whether or not then outstanding, shall be repaid by the Authority upon demand, and shall constitute an additional indebtedness of the Authority secured by the lien of this Agreement, prior and paramount to the lien hereunder of said Bonds and premium and interest thereon. The Trustee, however, shall not be obligated to obtain such audit and report unless fully indemnified against the expense thereof and furnished with means therefor. (d) On or before the expiration of ninety (90) days after the end of each calendar year, file with the Trustee a certificate signed by its President or Vice President, and its Secretary-Treasurer, stating that all taxes then due on the Project have been duly paid (unless the Authority shall, in good faith, contest any of said taxes, in which event the facts concerning such contest shall be set forth); also stating that all insurance premiums required by the terms of the Agreement to be paid by the Authority upon the Project have been duly paid. The Authority further covenants that all books, documents and vouchers relating to the properties, business and affairs of the Authority shall at all times be open to the inspection of such accountants or other agents as the Trustee may from time to time designate. Sec. 5.08. In order to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes and as an inducement to purchasers of the Bonds, the Authority represents, covenants and agrees that, to the extent necessary: (a) No person or entity or any combination thereof, other than the Authority or a governmental unit (other than the federal government) will use proceeds of the Bonds or property financed by said proceeds other than as a member of the general public. No person or entity or any combination thereof, other than the Authority or a governmental unit (other than the federal -20- i government) will own property financed by Bond proceeds or will have actual or beneficial use of such property pursuant to a lease, a management or incentive payment contract, an arrangement such as a take-or-pay or other type of output contract or any other type of arrangement that differentiates that person's or entity's use of such property from use by the public at large of such property. (b) No Bond proceeds will be loaned to any entity or person. No Bond proceeds will be transferred, directly or indirectly, or deemed transferred to a nongovernmental person in any manner that would in substance constitute a loan of the Bond proceeds. (c) The Authority will not take any action or fail to take any action with respect to the Bonds that would result in the loss of the exclusion from gross income for federal tax purposes of interest on the Bonds pursuant to Section 1o3(a) of the Code, as in effect on the date of delivery of the Bonds, nor will the Authority act in any manner which would adversely affect such exclusion. The Authority further covenants that it will not make any investment or do any other act or thing during the period that any Bond is outstanding hereunder which would cause any Bond to be an "arbitrage bond" within the meaning of Section 148 of the Code and the Arbitrage Regulations as in effect on the date of delivery of the Bonds. The Authority shall comply with the arbitrage rebate requirements under Section 148 of the Code to the extent applicable. (d) All officers, employees and agents of the Authority are authorized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the Authority as of the date the Bonds are .issued and to enter into covenants on behalf of the Authority evidencing the Authority's commitment's made herein. In particular, all or any officers, members, employees and agents of the Authority are authorized to certify and/or enter into covenants for the Authority regarding the facts and circumstances and reasonable expectations of the Authority on the date the Bonds are issued and the commitments made by the Authority herein regarding the amount and use of the proceeds of the Bonds. (e) The Authority will not take any action nor fail, to take any action with respect to the Bonds that would result in the loss of the exclusion from gross income for federal income tax purposes of interest on the Bonds pursuant to Section 103 of the Code, nor will the Authority act in any other manner which would adversely affect such exclusion. (f) The Authority covenants that, so long as any of the Bonds remain outstanding, no investment of Bond proceeds will be -21- made, directly or indirec~l.y which would cause the Bonds to be classified as "arbitrage bonds" within the meaning of Section 148 of the Code or the Arbitrage Regulations. The Authority has furnished to the Trustee concurrently with the execution and delivery of this Agreement, signed copies of the arbitrage certificate of the kind contemplated by the Arbitrage Regulations. The Trustee shall have the right in connection with any investment of money in the Construction Fund, the Sinking Fund or the Operation and Reserve Fund to be made by it to require that the Authority furnish the Trustee an opinion of counsel, experienced in matters relating to the tax exemption of interest payable on obligations of states and their instrumentalities and political subdivisions, to the effect that the proposed investment will not cause the Bonds to be classified as "arbitrage bonds" within the meaning of Section 148 of the Code or the Arbitrage Regulations. The Authority. covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest on the Bonds under Section 103 of the Code. The Authority will not directly or indirectly use or permit the use of any proceeds of the Bonds or any other funds of the Authority, or take or omit to take any action that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148(a) of the Code. To that end, the Authority will comply with all requirements of Section 148 of the Code to the extent applicable to the Bonds. In the event that at any time the Authority is of the opinion that for purposes of this .Section it is necessary to restrict or limit the yield on the investment of any moneys held by the Trustee under this Agreement, the Authority shall so instruct the Trustee in writing, and the Trustee shall take such action as may be necessary in accordance with such instructions. Without limiting the generality of the foregoing, the Authority agrees that there shall be paid from time to time all amounts required to be rebated to the United States pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applicable to the Bonds from time to time. This covenant shall survive payment in full or defeasance of the Bonds.. Notwithstanding any provision of this Section, if the Authority shall provide to the Trustee an opinion of nationally recognized Bond counsel to the effect that any action required under this Section is no longer required, or to the effect that some further action is required, to maintain the exclusion from gross income of the interest on the Bonds pursuant to Section. 103 -22- of the Code, the Authority may rely conclusively on such opinion in complying with the provisions hereof. Sec. 5.09. The Authority covenants that it will not guarantee, endorse or otherwise become surety for or upon the indebtedness of others except by endorsement of negotiable instruments for deposit or collection in the ordinary course of business, and that it will not sell its accounts receivable. Sec. 5.10. The Authority covenants that it will not acquire any property, real or personal, subject to an existing mortgage or other encumbrance, except as permitted by Sec. 5.11. Sec. 5.11. The Authority covenants that it will not incur any indebtedness secured by this Agreement other than the Bonds unless either (a) the Project cannot be completed without unreasonable delay which would threaten a default in the payment of principal or interest on the Bonds without such additional indebtedness, and such additional indebtedness is payable only from the Operation and Reserve Fund (to the extent that such Fund is not needed to pay necessary incidental expenses of the Authority) and from property and income of the Authority remaining or received after all Bonds authorized herein have become due and payable and sufficient funds have been provided to pay all principal and interest due on such Bonds and all fees of the Trustee then due and payable, or (b) such additional indebtedness is payable solely from income of the Authority-other than the rental payments provided for in the Lease as long as any of the Bonds are outstanding. This section shall not be construed to prohibit the issuance of refunding Bonds and the pledging of lease rentals to be received after the redemption of the Bonds. Sec. 5.12. The Authority covenants that the proceeds of the Bonds deposited in the Construction Account shall be used for the following purposes: (First) The payment of the balance, if any, of the purchase price of the real estate herein specifically described; (Second) The payment of the cost of construction of the Project on said real estate in accordance with the provisions of Section 5.13 hereof. The cost of erection shall include but not be limited to the items set forth in Sec. 3.01 hereof. (Third) Any balance in excess of one hundred fifty percent (150%) of the amount of any disputed claims of contractors and work to be repaired remaining after the completion of the Project in accordance with Sec. 5.13 hereof may be obligated within a period of one (1) year thereafter for any one or more of the following purposes upon written request of the Lessee: -23- (a) For the purchase of equipment for said Project; or (b) For the improvement of said Project. (Fourth) Any balance in excess of one hundred fifty percent (150%) of the amount of any disputed claims of construction and work to be repaired remaining unobligated after one (1) year from the filing of the affidavit referred to in Sec. 3.01 shall be transferred to the Sinking Fund as provided in Sec. 3.01. (Fifth) Any balance remaining after payment of all obligations authorized by Subsection (Third) above, shall be transferred to the Sinking Fund within ten (10) days after the last payment of such obligations. Sec. 5.13. The Authority covenants that it has entered into a valid and binding Lease of the Project to the Commission, and that a full, true and correct copy of said Lease is on file with the Trustee. The Authority covenants further that it will bring suit to mandate the governing board or officials of the Lessee to levy a tax to pay the rental provided in said Lease, or take such other action to enforce the Lease as is reasonably requested by the Trustee, if such rental is more than sixty (60) days in default. The Authority further covenants that, upon the receipt by the Trustee of the proceeds of the Bonds secured hereby, it will forthwith proceed to construct the Project in accordance with such plans and specifications referred to in said Lease, and will complete such construction with all expedition practicable in accordance with the plans and specifications, together with such changes therein as may be authorized by the Authority pursuant to this Section. The Authority further covenants that it will not authorize, approve or permit any changes to be made in such plans and specifications unless all of the following conditions exist: (a) the proposed changes in the plans and specifications are approved in writing by the South Bend Redevelopment Commission, as Lessee, and, if such proposed changes, together with all other changes previously made, will increase the original cost of the Project in an amount exceeding Four Hundred Thousand Dollars ($400,000), then by the original purchaser of the Bonds, or if the purchaser is more than one investment house, by the manager of such syndicate; (b) the proposed changes in the plans and specifications will not alter the character of the Project nor reduce the value thereof; and -24- (c) the proposed cYianges in the plans and specifications will not result in an increase in the cost of construction of said Project exceeding the .amount of the uncommitted funds of the Authority on hand which are not required for the completion of the Project in accordance with the plans and specifications adopted prior to the execution of said Lease, interest on the Bonds during the construction period, and the payment of the incidental expenses incurred in connection with said Project. Prior to the completion of the Project in accordance with the provisions of this section, performance of additional construction work or the purchase of equipment not specified in the above-mentioned Lease or incorporated therein by reference to the plans and specifications shall be deemed a change or modification in the plans and specifications subject to the requirements of this Section. Except for changes made in the plans and specifications pursuant to this Section, the. Authority covenants that it will not agree to any modification of the terms of said Lease which would substantially impair or reduce the security of the holders of the Bonds described herein or agree to a termination thereof, or agree to a reduction of the lease rental provided for therein which would inhibit payment of debt service on the Bonds until all indebtedness secured by this Agreement is fully paid, except .upon compliance with the provisions of Sec. 10.02. The Authority further covenants that any modification permitted by this paragraph will be made only after a copy thereof has been filed with the Trustee. Sec. 5.14 The Authority covenants that the proceeds from the sale of the Bonds, proceeds received from lease rentals payable according to the Lease, any other amounts received by the Authority in respect to property directly or indirectly financed with any proceeds of such Bonds, and proceeds from interest earned on the investment and reinvestment of such proceeds and amounts, shall not be invested or otherwise used in a manner which would cause such Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code and the Arbitrage Regulations. Any such investment or other use by the Trustee shall comply with Section 148 of the Code and such regulations or rules adopted pursuant to said Section 148, as may be applicable and any restrictions stated in the arbitrage certificate of the Authority. Sec. 5.15. The Authority covenants that whenever there are sufficient funds held by the Trustee in the Sinking Fund and/or Operation and Reserve Fund to pay the principal, redemption premiums and interest to the next interest payment date on all outstanding Bonds, it will call all outstanding Bonds for redemption and hereby consents and directs the Trustee to call all outstanding Bonds for redemption. -25- Sec. 5.16. (a) The Authority, at its cost and expense, shall obtain on the date of original issuance of the Bonds a commitment for an owner's policy of title insurance insuring the marketable indefeasible fee simple title or right-of-way easement of the Authority in the Project in an amount equal to the costs of construction of the Project. (b) The Authority hereby assigns to the Trustee all proceeds payable under the owner's policies referred to in this Section 5.16 and all of the insured's rights thereunder, the full amount of which proceeds shall be paid directly to the Trustee by the title insurers referred to above. The Trustee is hereby authorized to demand, collect and receipt for and recover any and all insurance moneys which may become due and payable under the owner's policies and to prosecute all necessary actions in the courts to recover any such insurance moneys. The Trustee may, however, accept any settlement or adjustment which the Trustee may deem it advisable to make with such title insurers. The Trustee may reimburse itself from any such insurance money for the costs and expenses incurred by the Trustee in connection with (i) demanding, collecting and recovering the insurance moneys and (ii) any related court action, settlement or adjustment, including without limitation, attorney fees (the "Collection Costs"). All insurance moneys collected or recovered under the owner's policies referred to above, less Collection Costs, shall be used, at the Trustee's option, either (i) to cure title defects and/or obtain marketable, indefeasible fee simple title or a right-of-way easement to the Project or (ii) redeem the Bonds or portions thereof on the earliest possible redemption date. ARTICLE VI. Insurance Sec. 6.01. The Authority covenants that during the construction of the Project, it will carry or will cause other persons to carry for its benefit the following kinds of insurance: (a) Builder's risk insurance in the amount of one hundred percent (100%) of the insurable value of the Project against physical loss or damage thereto, however caused, with such exceptions as are ordinarily required by insurers of buildings or facilities of a similar type. Such insurance shall be carried in completed value form. (b) Bodily injury and property damage insurance naming the Authority as an insured against claims for damages for bodily injury, including accidental death, as well as claims for property -26- damages which may arise fibrin such construction. Such insurance shall be carried for not less than the following limits of liability for the policies indicated: Combined bodily injury insurance, including accidental death, and property damage insurance in an amount not less than One Million Dollars ($1,000,000) on account of one occurrence; or, in the alternative: Bodily injury insurance in an amount not less than One Million Dollars ($1,000,000) for injuries, including accidental death, to any one (1) person, and in an amount not less than One Million Dollars on account of one (1) accident; and Property damage insurance in an amount not less than Five Hundred Thousand Dollars on account of any one (1) accident and in an amount not less than Five Hundred Thousand Dollars ($500,000) in the aggregate during each policy period, each of which shall be not longer than one year. The Authority further covenants that all contracts for the construction of said Project will or do require the contractor to carry such insurance as will protect the contractor from liability under the Indiana Workers' Compensation and Workers' Occupational Diseases Acts. Certificates of the insurance coverage required under Subsections (a) and (b) of this section and the preceding sentence shall be furnished to the Trustee. Sec. 6.02. The Authority covenants that, after the completion of the Project, it will carry or cause to be carried: (a) Insurance on the Project against physical loss or damage thereto, however caused, with such exceptions as are ordinarily required by insurers of buildings or facilities. of a similar type, which insurance shall be in an amount at least equal to the greater of (i) the option to purchase price under the Lease, or (ii) one hundred percent (100%) of the full replacement cost of the Project as certified by a registered architect, a registered engineer, or a professional appraisal engineer selected by the Authority with the approval of the Trustee, on the effective date of such insurance and on or before April 1 of each year thereafter (such appraisal may be based on a recognized index of conversion factors); provided that such certification shall not be required so long as the amount of such insurance shall be in an amount at least equal to the option to purchase price under the Lease; such insurance may contain a provision for a deductible in an amount not exceeding $25,000; a blanket public institutional property insurance form may be used if: •(i) the insurance on the Project is not less than the amount required by this Section 6.02; (ii) the Commission subordinates its claim for damage or destruction to -27- other buildings or improvements to claims for damage or destruction of the Project; and (iii) the insurance proceeds related to damage to or destruction of the Project are payable to the Trustee; and (b) Rent or rental value insurance in an amount least equal to the full rental value of the Project for a period of two (2) years against physical loss or damage of the type insured against under Sec. 6.02 (a) above; and (c) Public liability and property damage insurance in amounts customarily carried for similar properties; provided however, that, notwithstanding Sec. 6.03, such insurance may be provided under the public liability self insurance program of the City of South Bend. Sec. 6.03. Except as provided in Sec. 6.02(c), such insurance policies shall be maintained in insurance companies rated B+ or better by A.M. Best Company (or a comparable rating service if A.M. Best Company ceases to exist or rate insurance companies), and shall be countersigned by an agent of the insurer who is a resident of the State of Indiana. A copy of such policies referred to in Sec. 6.02 and the architect's or engineer's certificates referred to in Sec. 6.02 (a) shall be deposited with the Trustee. A schedule of such policies shall be deposited with the Trustee. Such schedule shall contain the names of the insurers, the amounts of each policy, the character of the risk insured against, the expiration date of each policy, the premium paid thereon, and any other pertinent data. Sec. 6.04. In case the Authority shall at any time refuse, neglect or fail to obtain and furnish such certificate or to effect insurance as aforesaid, the Trustee may, in its discretion, procure such certificate and/or such insurance, and all moneys paid by the Trustee for such certificate and/or insurance, together with interest thereon at the highest rate of interest on any of the Bonds when sold, whether or not then outstanding, shall be repaid by the Authority upon demand, and shall constitute an additional indebtedness of the Authority secured by the lien of this Agreement, prior and paramount to the lien hereunder of said Bonds and interest thereon. The Trustee, however, shall not be obligated to effect such insurance unless fully indemnified against the expense thereof and furnished with means therefor. Sec. 6.05. The insurance policies required by Section 6.01 and Section 6.02 shall be for the benefit, as their interests shall appear, of the Trustee, the Authority, and other persons having an insurable interest in the insured property. Such policies shall clearly indicate that any proceeds under the policies shall be payable to the Trustee, and the Trustee is hereby authorized to demand, collect and receipt for and recover any and all insurance -2$- moneys which may become due aril payable under any of said policies of insurance and to prosecute all necessary actions in the courts to recover any such insurance moneys. The Trustee may, however, accept any settlement or adjustment which the officers of the Authority may deem it advisable to make with the insurance companies. Any proceeds of rent or rental value insurance received by the Trustee representing the annual rentals payable under the Lease shall be deposited by it forthwith to the credit of the Sinking Fund. Sec. 6.06. The proceeds of such insurance received by the Trustee shall be applied to the repair, replacement or reconstruction of the damaged or destroyed property, if in the opinion of an independent registered architect, registered engineer, construction manager or contractor, which architect, engineer, construction manager or contractor shall be acceptable to the Trustee (i) the cost of such repair, replacement or reconstruction shall not exceed the amount of insurance proceeds to be received by reason of such damage or destruction and other amounts available therefor, and (ii) such repair, replacement or reconstruction can be completed within the period covered by the rental value insurance. Such proceeds shall be held and disbursed by the Trustee in the manner and upon the showings provided for in Sec. 3.01 hereof, except that the Trustee may release such proceeds, or a part thereof, upon a showing satisfactory to the Trustee that repairs have been made and paid for. If either or both conditions shall not exist, the proceeds of such insurance received by the Trustee shall be used to redeem Bonds. Sec. 6.07. In the event the Authority shall not commence to repair or replace the portion of the Project so damaged or destroyed within ninety (90) days after any such loss or damage,. or the Authority, having commenced such work of repair or replacement, shall abandon or fail diligently to prosecute the same, the Trustee may, in its discretion, make or complete such repairs or replacements, and if it shall elect so to do, may enter upon said premises to any extent necessary for the accomplishment of such purposes, but nothing herein contained shall obligate the Trustee to make or complete any such repairs or replacements unless it shall have been requested to do so by the holders of not less than twenty-five percent (25%) in aggregate principal amount of all Bonds outstanding hereunder, and shall have been indemnified to its satisfaction against all loss, damage and expense which it might thereby incur. Sec. 6.08. In case the Authority shall neglect, fail or refuse to proceed forthwith in good faith with the repair or replacement of the Project which shall have been so destroyed or damaged, and such negligence, failure or refusal shall continue for one hundred twenty (120) days, the Trustee, upon receipt of the -29- insurance moneys, shall (unless the Trustee proceeds to make the repairs or replacements of the destroyed or damage property as above provided) transfer such proceeds to the Sinking Fund. Sec. 6.09. If, at any time, the Project is totally or substantially destroyed and the amount of insurance money received on account thereof by the Trustee is sufficient to redeem all of the then outstanding Bonds hereunder and such Bonds are then subject to .redemption, the Authority, with the written approval of the Commission, may direct the Trustee to use said moneys for the purpose of calling for redemption all of the Bonds issued and then outstanding under this Agreement at the then current redemption price. Sec. 6.10. In the event of any reconstruction of all or a portion of the Project after substantially total destruction of all or a portion thereof, a new building, buildings or improvements or portions thereof may be constructed on the site by the Authority in accordance with plans and specifications which must be satisfactory to the Trustee and the Lessee of such Project, and such new building or buildings or improvements or portions thereof may be wholly different in design or construction. Sec. 6.11. The Trustee may accept the statements, affidavits and certificates hereinabove in this Article VI provided to be filed with the Trustee, as conclusive evidence of the facts therein stated, but the Trustee (although under no obligation so to do) may, at the expense of the Authority, require further or other evidence of such matters and may rely on the report or opinion of such architect, engineer, other person, or counsel, as it may select for the purpose of making an investigation thereof. ARTICLE VII. Remedies in Case of Default Sec. 7.01. If any of the following events occurs, it is hereby defined as and is declared to be and to constitute an "event of default": (a) default in the due and punctual payment of the interest on any Bonds hereby secured and outstanding; (b) default in the due and punctual payment of the principal and premium, if any, of any Bond hereby secured, whether. at the stated maturity thereof, or upon proceedings for the redemption thereof, or upon the maturity thereof by declaration as hereinafter provided; -30- (c) default in the pe~fo~mance or observance of any other of the covenants or agreements of the Authority in this Agreement or in any supplemental agreement, or in the Bonds., contained, and the continuance thereof for a period of sixty (60) days after written notice thereof to the Authority by the Trustee; (d) if the Authority: (1) admits in writing its inability to pay its debts generally as they become due; (2) files a petition in bankruptcy; (3) makes an assignment for the benefit of its creditors; or (4) consents to or fails to contest the appointment of a receiver or trustee for itself or of the whole or any substantial part of the Project or any income therefrom; (e) if the Authority: (1) be adjudged insolvent by a court of competent jurisdiction; (2) on a petition in bankruptcy filed against the Authority be adjudged a bankrupt; or (3) if an order, judgment or decree be entered by any court of competent jurisdiction appointing, without the consent of the Authority, a receiver or trustee of the Authority or of the whole or any substantial part of the Project or any income therefrom, and any of the aforesaid adjudications, orders, judgments or decrees shall not be vacated or set aside or stayed within sixty (60) days from the date of entry thereof; (f) if any judgment shall be recovered against the Authority or any attachment or other court process issue that shall become or create a lien upon the Lease or the Pledged Funds, and such judgment, attachment, or court process shall not be discharged or effectually secured within sixty (60) days; (g) if the Authority shall file a petition under the provisions of the U.S. Bankruptcy Code, as amended ("Bankruptcy Code"), or file answer seeking the relief provided in said Bankruptcy Code; (h) if a court of competent jurisdiction shall enter an order, judgment or decree approving a petition filed against the Authority under the provisions of said Bankruptcy Code, and such judgment, order or decree shall not be vacated or set aside or stayed within one hundred twenty (120) days from the date of the entry thereof; (i) if, under the provisions of any other. law now or hereafter existing for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Authority or of the whole or any substantial part of the Project or the income therefrom, and such custody or control shall not be terminated within one hundred twenty (120) days from the date of assumption of such custody or control; -31- (j ) failure of the ~YutYiority tcs bring suit to mandate the governing board or officials of the Lessee to levy a tax to pay the rental provided in the Lease referred to in Article V, or take such other action to enforce the Lease as is reasonably requested by the Trustee, if such rental is more than sixty (60) days in default; (k) if the lease rental provided for in said Lease is not paid within sixty (60) days after each date it is due; or (1) any event of default as defined in Section 15 of the Lease shall occur and be continuing. Sec. 7.02. In the case of the happening and continuance of any of the events of default specified in Section 7.01, then in any such case the Trustee, by notice in writing mailed to the Authority, may, and upon written request of the holders of twenty-five percent (25%) in principal amount of the Bonds then outstanding hereunder shall, declare the principal of all Bonds hereby secured and then outstanding, and the interest accrued thereon, immediately due and payable, and upon such declaration such principal and interest shall thereupon become and be immediately due and payable; subject, however, to the right of the holders of a majority in principal amount of all such outstanding Bonds, by written notice to the Authority and to .the Trustee, to annul each declaration and destroy its effect at any time if all agreements with respect to which default shall have been made shall be fully performed and all such defaults be cured, and all arrears of interest upon all Bonds outstanding hereunder and the reasonable expenses and charges of the Trustee, its agents and attorneys, and all other indebtedness secured hereby, except the principal of any Bonds not then due by their terms and interest accrued thereon since the then last interest payment date, shall be paid or the amount thereof shall be paid to the Trustee for the benefit of those entitled thereto. Sec. 7.03. All moneys received by the Trustee pursuant to any right given or action taken under the provisions of this Article VII shall, after payment of the cost and expenses of the proceedings resulting in the collection of such moneys and of the expenses, liabilities and advances incurred or made by the Trustee, be deposited in a fund to be created and designated as the "South Bend Redevelopment Authority Lease Revenue Bond (Blackthorn Golf Course Project) Default Fund" and all moneys in such fund shall be applied as follows: (a) Unless the principal of all the Bonds shall have become or have been declared due and payable, all such moneys shall be applied: -32- First--To the payment of 'the persons entitled thereto of all installments of interest then due on the Bonds, in the order of the maturity of the installments of such interest and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, of the persons entitle thereto, without any discrimination or privilege; and Second--To the payment of the persons entitled thereto of the unpaid principal of any of the Bonds which shall have become due (other than Bonds previously called for redemption for the payment of which moneys are held pursuant to the provisions of this Agreement), in the order of their due dates, and if the amount available shall not be sufficient to pay in full all Bonds due on any particular date, then to the payment ratably, according to the amount of principal due on such date, to the persons entitled thereto without any discrimination or privilege. (b) If the principal of the Bonds shall have become due or shall have been declared due and payable, all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds, without preference or priority of principal over interest or of interest over principal, or of any installment of interest or of preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond over any other Bond, ratably, according to the amount due respectively for principal and interest, to the persons entitled thereto without any discrimination or privilege. Sec. 7.04. If default occurs with respect to the payment of principal or interest due hereunder, interest shall be payable on overdue principal and overdue interest both at the highest rate of interest on any of the Bonds when sold, whether or not then outstanding. Sec. 7.05. In case of the happening and continuance of any of the events of default specified in Section 7.01, the Trustee may, and shall upon the written request of the holders of at least twenty-five percent (25%) in principal amount of the Bonds then outstanding hereunder and upon being indemnified to its reasonable satisfaction, proceed to protect and enforce its rights and the rights of the holders of the Bonds by suit or suits in equity or at law, or in any court of competent jurisdiction, whether for specific performance of any covenant or agreement contained herein or in aid of any power herein granted, or for the enforcement of any other appropriate legal or equitable remedy. -33- No remedy by the terms of this Agreement conferred upon or reserved to the Trustee or to the Bondholders is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power, or shall be construed to be a waiver of any such default or acquiescence therein; and every such right or power may be exercised from time to time and as often as may be deemed expedient. Sec. 7.06. In case of an event of default hereunder and upon the filing of judicial proceedings to enforce the rights of the Trustee and of the Bondholders hereunder, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the rents, revenues, issues, earnings, income and proceeds thereof pending such proceedings, with such powers as the court making such appointment shall confer. Sec. 7.07. All rights of action under this Agreement or under any of the Bonds, including the right to file and prove a claim in any receivership, insolvency, bankruptcy, or other similar proceedings for the entire amount due and payable by the Authority under this Agreement, may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any trial or other proceeding relating thereto, and any suit or proceeding instituted by the Trustee shall be brought in its name as Trustee, and any recovery shall be for the equal benefit of the holders of the outstanding Bonds. Sec. 7.08. It is hereby declared and agreed, as a condition upon which each successive holder of all or any such Bonds receives and holds the same, that no holder or holders of any such Bond shall have the right to institute any proceeding at law or in equity, or for the appointment of a receiver, or (except for filing of claims with the Treasurer of the State of Indiana) for any other remedy under this Agreement, without first giving notice in writing to the Trustee of the occurrence and continuance of an event of default as aforesaid, and unless the holders of at least twenty-five percent (25%) in principal amount of the then outstanding Bands shall have made written request to the Trustee and shall have offered it reasonable opportunity either to proceed to exercise. the powers hereinbefore granted or to institute such action, suit or proceeding in its own name, and without also having offered to the Trustee adequate security and indemnity against the costs, expenses and liabilities to be by the Trustee incurred therein or thereby; and such notice, request, and offer of indemnity may be required by the Trustee as conditions precedent -34- to the execution of the powers and trusts of this Agreement or to the institution of any suit, action or proceeding at law or in equity or for the appointment of a receiver, or for any other remedy hereunder, or otherwise, in case of any such default as aforesaid; it being understood and intended that no one or more holders of the Bonds shall have any right in any manner whatsoever, to affect, disturb or prejudice the lien of this Agreement by his or their action, or to enforce any right hereunder except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided, and for the equal benefit of all holders of outstanding Bonds. Notwithstanding any other provisions of this Agreement, the right of any holder of any Bond to receive payment of the principal of and premium, if any, and interest on such Bond on or after the respective due dates therein expressed, or to institute suit for the recovery of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such holder. ARTICLE VIII. Defeasance Payment, Release Sec. 8.01. If, when the Bonds secured hereby shall have become due and payable in accordance with their terms or shall have been duly called for redemption or irrevocable instructions to call the Bonds for redemption shall have been given by the Authority to the Trustee, the whole amount of the principal and the interest and the premium, if any, so due and payable upon all of the Bonds then outstanding shall be paid or (i) sufficient moneys, or (ii) direct obligations of, or obligations the principal of any interest on which are unconditionally guaranteed by, the United States of America the principal of and the interest on which when due will provide sufficient moneys, or (iii) time certificates of deposit fully secured as to both principal-and interest by obligations of the kind described in (ii) above of a bank or banks the principal of and interest on which when due will provide sufficient moneys, or (iv) any combination of (i), (ii) or (iii) above which will provide sufficient moneys, shall be held by the Trustee for such purpose under the provisions of this Agreement, and provision shall also be made for paying all Trustee's fees and expenses and other sums payable hereunder by the Authority, then and in that case the right, title and interest of the Trustee shall thereupon cease, determine and become void. Upon any such termination of the Trustee's title, on demand of the Authority, the Trustee shall release this Agreement and shall execute such documents to evidence such release as may be reasonably required by the Authority, and shall turn over to the -35- Authority or to such officer, board or body as may then be entitled by law to receive the same any surplus in the Sinking Fund created by Sec. 3.02 hereof and in the Operation and Reserve Fund created by Sec. 3.03 hereof and all balances remaining in any other fund or accounts other than moneys and obligations held for the redemption or payment of Bonds; provided, however, that in the event that sufficient moneys, direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America or time certificates of deposits shall be deposited with and held by the Trustee as hereinabove provided, in addition to the requirements set forth in. Article IV of this Agreement, the Trustee shall within thirty (30) days after such obligations or time certificates of deposits shall have been deposited with it, cause a notice signed by the Trustee to be published once in the Bond Buyer, in the City of New York, New York, or, if the Bond Buyer is not published, then in a newspaper or financial journal published, and of general circulation in the City of New York, New York, or the City of Chicago, Illinois, setting forth (a) the date designated for the redemption of the Bonds, (b) a description of the obligations so held by it, and (c) that this Agreement has been released in accordance with the provisions of this Section. All moneys, and obligations and time certificates of deposit held by the Trustee pursuant to this Section shall be held in trust and said moneys and the principal and interest of said obligations and time certificates of deposit when received, applied to the payment, when due, of the principal and the interest and the premium, if any, of the Bonds so called for redemption. Sec. 8.02. Any Bond not presented at the proper time and place for payment shall, within the meaning of this Agreement, be deemed to be fully paid when due if the money necessary to discharge the principal amount thereof and all interest then accrued and unpaid thereon (and the premium required in case of redemption before maturity) is held by the Trustee when or before the same become due. The holder of any such Bond shall not be entitled to any interest thereon after the maturity thereof nor to any interest upon money so held by the Trustee. ARTICLE IX. Concerning the Trustee Sec. 9.01. The Trustee hereby accepts the trusts of this Agreement upon the following terms and conditions, to which the parties and the registered holders of said Bonds agree: -36- (a) After completion of construction of the Project, the Trustee shall annually prepare a financial report covering disbursements and receipts of all funds of the Authority held by the Trustee hereunder and shall furnish a copy to the Authority. (b) The Trustee shall be under no obligation to see to any filing or recording of this Agreement or any agreement supplemental hereto, and may authenticate and deliver the Bonds in accordance with the provisions hereof prior to any filing or recording of this Agreement. (c) The Trustee shall be entitled to reasonable compensation for all services rendered in the execution of the trusts hereby created, and. may employ agents, attorneys and counsel in the execution of such trusts; and the compensation of the Trustee, as well as the reasonable compensation of its attorneys and counsel and of such persons as it may employ in the administration or management of the trusts hereunder, and all other reasonable expenses necessarily incurred or actually disbursed hereunder, the Authority agrees to pay to the Trustee on demand, and for such payment the Trustee shall have a lien on all funds in the hands of the Trustee not held in trust for any specific purpose in priority to the rights and claims of the holders of said Bonds. (d) The Trustee shall not be responsible in any manner for: (1) the validity, execution, acknowledgment, filing or recording of this Agreement or any agreement supplemental hereto, or the refiling or rerecording thereof; (2) for any recitals, covenants or agreements of the Authority in the Bonds or herein contained, except to pay from the Operation and Reserve Fund expenses incurred by the Authority to enable it to comply with its covenants contained herein; (3) for the default or misconduct. of any agent or employee appointed by it, if such agent or employee shall have been selected with reasonable care, or for anything done by it in connection with this trust, except for its willful misconduct or gross negligence; (4) for the consequence of any act done in good faith; or (5) for any actions taken by the Trustee in accordance with the opinion of counsel employed by the Trustee. (e) The Trustee shall be under no obligation to keep advised or informed as to whether the Authority is in default under any of the terms or covenants of this Agreement; and unless and until the -37- Trustee shall have received written notice to the contrary from the holders of at least five percent (5%) in principal. amount of the Bonds then outstanding hereunder, the Trustee may, for all purposes of this Agreement, assume that the Authority is not in default hereunder and that none of the events hereinbefore defined as "events of default" has happened. (f) The Trustee shall not be required to appear in or defend any suit which may be brought against it respecting the Project, or by reason of being Trustee hereunder, or to institute any suit or proceeding to enforce any covenant or remedy herein provided, or to take any action toward the execution or enforcement of the trusts hereby created, which, in the opinion of the Trustee, will be likely to involve the Trustee in expense or liability, unless the holders of said Bonds or some part thereof shall furnish the Trustee with reasonable security and indemnity against such expense or liability. (g) The Trustee shall be fully protected in acting upon or in accordance with any notice or request, consent, certificate, demand, resolution or other instrument or document believed by the Trustee to be genuine and to have been signed, authorized, executed, certified or sealed by the proper person or persons; and the Trustee is authorized to accept the certificate of the Secretary-Treasurer of the Authority, under its corporate seal, if any, to any resolution of the board of directors of the Authority as conclusive evidence that such resolution was duly and lawfully adopted and is binding upon the Authority. (h) The Trustee, or any officer or director of the Trustee, may acquire and hold Bonds issued hereunder or may engage in or be interested in any financial or other transaction in which the Authority may be interested, and the Trustee may be depository, trustee, transfer agent, registrar or agent of the Authority, or for any committee or other body in respect to the bonds, notes, debentures, obligations or securities of the Authority, whether or not issued pursuant hereto. (i) The Trustee may, in relation to any powers or duties imposed upon it by this Agreement, act upon the opinion or advice of an attorney, surveyor, engineer or accountant, whether retained by the Trustee or by the Authority, and shall not be responsible for any loss resulting from any action or non-action in accordance with any such opinion or advice. (j) The Trustee is relieved from filing any inventory, or qualifying under the jurisdiction of any court, or otherwise complying with the provisions of the Uniform Trustees° Accounting Act of 1945, or with any laws amendatory thereof or supplemental thereto, and the provisions of said law are hereby waived. -38- Sec. 9.02. The Tr'izstee agrees to invest funds (subject to Sec. 5.14 hereof) from time to time held by it as Trustee under this Agreement, and apply the interest earned thereon as provided in Article III, but shall not be under any duty or obligation to pay interest on any funds held by it which cannot practicably be so invested either to the Authority or to the holder of any Bond, or to any other person; any and all such liability for the payment of such interest being hereby expressly waived. Sec. 9.03. In the event that the Trustee, or any successor trustee, shall become legally consolidated or merge with another banking association or corporation, the banking association or corporation. resulting from such consolidation or merger shall thereupon become and be the Trustee hereunder with the same titles, rights, powers, benefits, duties. and limitations, without the execution or filing or recording of any instrument, and without any action on the part of the Authority or the holders of Bonds hereunder. A purchase of the assets and assumption of the liabilities of the Trustee by another banking association or corporation shall be deemed to be consolidation or merger for the purposes of this section. Sec. 9.04. The Trustee, or any successor trustee, may be removed at any time by an instrument or concurrent instruments in writing filed with the Trustee and signed by the holders of a majority in principal amount of the Bonds then outstanding hereunder, or by their attorneys-in-fact thereunto duly authorized. Sec. 9.05. The Trustee, or any successor trustee, may resign the trust created by this Agreement upon first giving notice of such proposed resignation and specifying the date when such resignation shall take effect, which notice shall be given to the Authority in writing at least twenty (20) days prior to the date when such resignation shall take effect, and shall be given to the Bondholders by mail at least twenty (20) days prior to the date when such resignation shall take effect. Such resignation shall take effect on the day so designated in such notice, unless previously a successor trustee shall be appointed as hereinafter provided, in which event such resignation shall take effect immediately upon the appointment of such successor trustee. Sec. 9.06. In case at any time the Trustee shall become incapable of acting, or shall be removed, a successor trustee may be appointed by the holders of at least a majority in principal amount of the Bonds hereby secured and then outstanding, by an instrument or instruments in writing signed by such Bondholders or by their duly constituted attorneys-in-fact; but until a new trustee shall be so appointed by the Bondholders, the Authority, by an instrument executed by order of its board of directors, may -39- appoint a trustee to fill such vacancy until a new trustee shall be appointed by the Bondholders as aforesaid, and when any such new trustee shall be appointed by the Bondholders, any trustee theretofore appointed by the Authority shall thereupon and thereby be superseded and retired. Each such successor trustee appointed by any of such methods shall be a bank or trust company authorized by law so to act, and having a capital and surplus of not less than Five Million Dollars-($5,000,000). Sec. 9.07. Any successor trustee appointed hereunder shall execute, acknowledge and deliver to the Authority, and to its predecessor, an instrument accepting such appointment; and thereupon, upon the execution of the same, such successor trustee, without any further act or instruments or deeds of conveyance, shall become vested with all of the assets, powers, rights, duties, trusts and obligations of its predecessor in trust hereunder with like effect as if originally named as trustee herein; but nevertheless, on the written request of the successor trustee, the trustee ceasing to act shall execute and deliver to such successor trustee all conveyances and instruments proper to evidence the vesting in the new trustee of the interest and title of the retiring trustee in the trusts hereby created, subject, however, to any lien which the retiring trustee may have pursuant to any provision hereof; and upon request in writing. of any successor trustee, the Authority covenants to make, execute, acknowledge and deliver any and all deeds, conveyances, assignments, or instruments in writing for the more fully and certainly vesting in and confirming to such successor trustee all such assets, property, rights, powers and trusts. ARTICLE X. Supplemental Agreements .Sec. 10.01. Without notice to or the consent of any Bondholders, the Authority and the Trustee may, from time to time and at any time, enter into such agreements supplemental hereto as shall not be inconsistent with the terms and provisions hereof (which supplemental agreements shall thereafter. form a part hereof): (a) To cure any ambiguity or formal defect or omission in this Agreement, or in any supplemental agreement, which does not adversely affect the rights of the Bondholders; (b) to grant to or confer upon the Trustee, for the benefit of the Bondholders, any additional benefits, rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Bondholders or the Trustee; -40- (c) to modify, amend or supplement this Agreement to permit the qualification of the .Bonds for sale under the securities laws of the United States of America or of any of the states of the United States of America or to obtain or maintain bond insurance with respect to payments of principal of and interest on the Bonds; (d) to provide for the refunding or advance refunding of the Bonds in whole or in part; and (e) to procure or maintain a rating on the Bonds from a nationally recognized securities rating agency designated in such supplemental agreement, if such supplemental agreement will not adversely affect the owners of the Bonds. Sec. 10.02. Subject. to the terms and provisions contained in this section, and not otherwise, the holders of not less than sixty-six and two-thirds percent (66-2/3%) in aggregate principal amount of the Bonds then outstanding shall have the right from time to time, anything contained in this Agreement to the contrary. notwithstanding, to consent to and approve the execution by the Authority and the Trustee of such agreement or agreements supplemental hereto as shall be deemed necessary or desirable by the Authority for the purpose of modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Agreement or in any supplemental agreement; provided, however, that nothing herein contained shall permit or be construed as permitting: (a) an extension of the maturity of the principal or interest on any Bond issued hereunder; or (b) a reduction in the principal amount of any Bond or the redemption premium or the rate of interest thereon; or (c) a preference or priority of any Bond or Bonds over any other Bond or Bonds; or (d) a reduction in the aggregate principal amount of the Bonds required for consent to such supplemental agreement. Nothing herein contained, however, shall be construed as making necessary the approval by the Bondholders of the execution of any supplemental agreement or agreements as authorized in Section 10.01 of this Article. If at any time the Authority shall request the Trustee to enter into any supplemental agreement for any of the purposes of this section, the Trustee shall, at the expense of the Authority, give notice by first-class mail, postage prepaid, to all registered -41- owners of Bonds. Such notice shall briefly set forth the nature of the proposed supplemental agreement and shall state that a copy thereof is on file at the office of the Trustee for inspection by all Bondholders. The Trustee. shall not, however, be subject to any liability to any Bondholder by reason of its failure to mail the notice required by this section, and any such failure shall not affect the validity of such supplemental agreement when consented to and approved as provided in this section. Whenever, at any time within one (1) year after mailing of such notice, the Authority shall deliver to the Trustee an instrument or instruments purporting to be executed by the holders of not less than sixty-six and two-thirds percent (66-2/3~) in aggregate principal amount of the Bonds then outstanding, which instrument or instruments shall refer to the proposed supplemental agreement described in such notice and shall specifically consent to and approve the execution thereof in substantially the form of the copy thereof referred to in such notice as on file with the Trustee; thereupon, but not otherwise, the Trustee may execute such supplemental agreement in substantially such form, without liability or responsibility to any holder of any Bond, whether or not such holder shall have consented thereto. If the holders of not less than sixty-six and two-thirds percent (66-2/3%) in aggregate principal amount of the Bonds outstanding at the time of the execution of such supplemental agreement shall have consented to and approved the execution thereof as herein provided, no holder of any Bond shall have any right to object to the execution of such supplemental agreement 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 execution thereof, or to enjoin or restrain the Trustee or the Authority from executing the same, or from taking any action pursuant to the provisions thereof. Upon the execution of any supplemental agreement pursuant to the provisions of this section, this Agreement shall be, and shall be deemed, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Agreement of the Authority, the Trustee, and all holders of Bonds then outstanding shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such modifications and amendments. Sec. 10.03. The Trustee is authorized to join with the Authority in the execution of any such supplemental agreement and to make the further agreements and stipulations which .may be contained therein. Any supplemental agreement executed in accordance with the provisions of this Article shall thereafter form a part of this Agreement, and all the terms and conditions -42- ' s contained in any such supplemental agreement as to any provision authorized to be contained therein shall be, and shall be deemed to be, part of the terms and conditions of this Agreement for any and all purposes. Sec. 10.04. The Trustee shall be entitled to receive, and shall be fully protected in relying upon, the opinion of any counsel approved by it who may be counsel for the Authority, as conclusive evidence that any such proposed supplemental agreement complies with the provisions of this Agreement, and that it is proper for the Trustee, under the provisions of this Article, to join in the execution of such supplemental agreement. Sec. 10.05. Notwithstanding anything contained in the foregoing provisions of this Agreement, the rights and obligations of the Authority and of the holders of the Bonds,. and the terms and provisions of the Bonds and this Agreement, or any supplemental agreement, may be modified or altered in any respect with the consent of the Authority and the consent of the holders of all the Bonds then outstanding. ARTICLE XI. Miscellaneous Provisions Sec. 11.01. Any covenant of the Authority set forth in this Agreement may be waived or modified in whole or in part with the written consent of the Authority and the Trustee without the necessity of obtaining the consent of the Bondholders and without the execution and delivery of a supplemental agreement, provided that the Trustee determines, upon the advice of legal counsel, that any such waiver or modification will not adversely impact the interests of the Bondholders. Sec. 11.02. Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the Trustee on the Authority shall be deemed to have been sufficiently given or served for all purposes, by being deposited, postage prepaid, in a United States Post Office letter box, addressed (until another address is filed in writing by the Authority with the Trustee for that purpose) as follows: South Bend Redevelopment Authority 1200 County-City Building 227 West Jefferson Boulevard South Bend, Indiana 46601 Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the Authority on -43- ' i ~ . the Trustee shall be deemed to have been sufficiently given or served for all purposes, by being deposited, postage prepaid, in a United States Post Office letter box, addressed (until another address is filed in writing by the Trustee with the Authority for that purpose) as follows: Norwest Bank Indiana, N. A. 112 West Jefferson Boulevard P.O. Box 112 South Bend, Indiana 46634 Attn: Warren G. Ransom Sec. 11.03. In any case where the date of payment of interest on or principal of the Bonds or the date fixed for redemption of any Bonds shall be in the city of payment a Saturday, Sunday or a legal holiday or a day on which banking institutions are authorized by law to close, then payment of interest or principal or the redemption price may be made on the succeeding business day with the same force and effect as if made on the established date of payment of interest or principal or the date fixed for redemption. Sec. 11.04. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original, and all of which shall constitute but one and the same instrument. Sec. 11.05. With the exception of rights herein expressly conferred, nothing expressed or mentioned in or to be implied from this Agreement or the Bonds is intended or shall be construed to give to any person or company other than the parties hereto and the Bondholders, any legal or equitable right, remedy or claim under or in respect to this Agreement, or any covenants, conditions and provisions herein contained; this Agreement and all of the covenants, conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto and the owners of the Bonds as herein provided. Sec. 11.06. If any provisions of this Agreement shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative or unenforceable to any extent whatever. Sec. 11.07. No member, officer or employee of the Authority or of any department or board thereof, shall be individually or personally liable for the payment of the principal of or interest or redemption premium on any Bond. Nothing herein contained shall, however, relieve any such member, officer or employee from the performance of any duty provided or required by law. -44- ~, . Sec. 11.08. This Agreement shall be construed and enforced in accordance with the laws of the State of Indiana. Sec. 11.09. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction, interpretation or effect of this Agreement. Sec. 11.10. The provisions of this Agreement shall constitute a contract between the Authority and the holders of the Bonds, and after the issuance of any Bonds no change or alteration of any kind in the provisions of this Agreement may be made until all of the Bonds have been paid in full as to both principal and interest, or provision for such payment has been made in accordance with Article VIII hereof, except in accordance with Article X hereof. -45- ,, ~ f ~ ~ IN WITNESS WHEREOF, ,SOUTH BEND REDEVELOPMENT AUTHORITY has caused its corporate naii~ to be hereunto subscribed by the President of its Board of Directors, and attested by the Secretary-Treasurer of its Board of Directors, and as Trustee, has likewise caused these presents to be executed in said Trustee's name and behalf by its Vice President and Trust Officer, and its .corporate seal to be hereunto affixed and attested by its in token of its acceptance of said trust, as of the day and year first hereinabove written. By: SOUTH BEND REDEVELOPMENT AUTHORITY (Written Signature) (Printed Signature.) President, Board of Directors ATTEST: (Written Signature) (Printed Signature) Secretary-Treasurer, Board of Directors (SEAL) ATTEST: (Written Signature) (Printed Signature) (Title) (Written Signature) (Printed Signature) (Title) -46- ^ d w r STATE OF INDIANA ) SSe ST. JOSEPH COUNTY ) Before me, the undersigned, a Notary Public in and for said State, personally appeared Joseph Wroblewski and Donald Fewell, personally known to me to be the President and Secretary-Treasurer, respectively, of the Board of Directors of the South Bend Redevelopment Authority, and acknowledged the execution of the foregoing Agreement for and on behalf of said Authority on this day of , 1992. Witness my hand and notarial seal. (SEAL) (Written Signature) My Commission Expires: My County of Residence is STATE OF INDIANA ) SS: ST. JOSEPH COUNTY ) Before me, the undersigned, a Notary Public in and for said State, personally appeared and personally known to me to be the and ,respectively, of Norwest Bank Indiana, N.A., and acknowledged the execution of the foregoing Agreement for and on behalf of said Bank on this day of , 1992. Witness my hand and notarial seal. (SEAL) My Commission Expires: My County of Residence is This instrument was prepared by Randolph R. Rompola, BAKER & DANIELS, 205 West Jefferson Boulevard, South Bend, Indiana 46601. \rrrompol\sthbend\golfcour.se\trustagr;tmg;9/2/92 (Printed Signature) Notary Public (written Signature) (Printed Signature) Notary Public -47-