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HomeMy WebLinkAboutAuthorizing $1,550.000 Economic Development Technologies Corp ProjectORDINANCE No. 7405 -84 Passed by the Common .Council of the City of South Bend, Indiana. A - -u•- GWVIW ;. —�-e_- � 04_- �-:..f .� City y Clerk !.( IRENE K. GAMMON Presented by me to the Mayor of the City of South Bend, Ind*ana I- -u.- a a F . /. Approved and signed by of Common Council YV--1 City Clerk IRENE K. GAMMON a, ILI 19 ORDINANCE NO. 740_) —;g T AN ORDINANCE PROVIDING FOR THE FINANCING BY THE CITY OF SOUTH BEND, INDIANA OF AN ECONOMIC DEVELOPMENT FACILITIES PROJECT; AUTHORIZING THE ISSUANCE OF A $1,550,000 ECONOMIC DEVELOP- MENT REVENUE BOND, SERIES 1984 (CLARK INFORMATION TECHNOLOGIES CORPORATION PROJECT) AND CONFIRMING THE SALE THEREOF; AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREE- MENT, A MORTGAGE AND SECURITY AGREEMENT, AN ASSIGNMENT AND AGREEMENT, A BOND PURCHASE AGREEMENT AND RELATED DOCUMENTS; AND RELATED MATTERS. STATEMENT OF PURPOSE OF INTENT: The City of South Bend, Indiana, a municipal corporation and political subdivision of the State of Indiana (the "Issuer ") is authorized.by Indiana Code Section 36 -7 -12, as supplemented and amended (the "Act "), to finance "economic development facilities ", as that term is defined in the Act, in order to further the public purposes of the Act; and As a result of negotiations between the Issuer and Clark Information Technologies Corporation, a Michigan corporation (the "Company "), contracts have been or will be entered into by the Company for the construction of an approxi- mately 16,000 square -foot building and the acquisition of machinery, equipment and related property to be installed therein (the "Project "), which Project is to be owned and used by the Company as a computer facility for the data processing, voice transfer and related functions and to be located at Landmark Business Park, South Bend, Indiana, and it is proposed that the Issuer shall enter into a Loan Agreement with the Company (the "Agreement "), pursuant to which the Issuer shall lend the Company a sum sufficient, together with other moneys of the Company, to accomplish such acquisition, construction and installation, and the Issuer is willing to issue its revenue bond to finance the Project upon terms which will be sufficient to pay a portion of the cost of the acquisition, construction and installation of the Project as evidenced by such revenue bond, all as set forth in the details and provisions of the Agreement; and It is estimated that the costs of the Project, including costs relating to the preparation and issuance of the revenue bond, will be at least $1,550,000; and The Project will be of the character and will accomplish the purposes provided by the Act, will increase job opportunities and retain existing jobs in South Bend, Indiana; and The. Issuer proposes to sell the revenue bond hereinafter authorized and designated "Economic Development Revenue Bond, Series 1984 (Clark Information Technologies Project)" upon a negotiated basis to Harris Trust and Savings Bank, Chicago, Illinois; Pursuant to the provisions of Section 103(k) of the Internal Revenue Code of 1954, as amended, a public hearing on the proposed plan of financing of the Project was held by the Economic Development Commission of the City of South Bend, Indiana, prior to the adoption of this Ordinance, pursuant to notice duly published in the South Bend Tribune on September 28, 1984 and in the Tri- County News on October 5, 1984, newspapers of general circulation in the City of South Bend, Indiana; NOW, THEREFORE, BE IT ORDAINED By the members of the COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA AS FOLLOWS: DEFINITIONS Section 1. The following words and terms as used in this Ordinance shall have the following meanings unless the con- text or use indicates another or different meaning or intent: "Act" means Indiana Code 36 -7 -12, as supplemented and amended. "Agreement" means the Loan Agreement dated as of November 1, 1984, by and between the Issuer and the Company, as from time to time supplemented and amended. "Assignment" means the Assignment and Agreement dated as of November 1, 1984, by and between the Issuer and the Bank, as from time to time supplemented and amended. "Authorized Company Representative" means such person at the time and from time to time designated to act on behalf of the Company by written certificate furnished to the Issuer and the Bank, containing the specimen signature of such person, signed on behalf of the Company by the president, any vice president, the treasurer or the secretary of the Company. Such certificate may designate an alternate or alternates. "Bank" means Harris Trust and Savings Bank, Chicago, Illinois, a banking corporation duly organized and validly -2- existing under the laws of the State of Illinois, its successors and assigns, and any subsequent registered owner of the Bond. "Bond" means the Economic Development Revenue Bond, Series 1984 (Clark Information Technologies Corporation Project) of the Issuer, in the principal amount of $1,550,000 authorized to be issued hereunder. "Bond Counsel" means a firm of attorneys of ,nationally recognized standing on the subject of bonds of states and their political subdivisions. "Bond Purchase Agreement" means the Bond Purchase Agreement dated as of November 1, 1984, by and among the Issuer, the Company and the Bank, as from time to time supplemented and amended. "Building" means the approximately 16,000 square -foot building to be constructed by the Company on the Land, comprising a portion of the Project. "Code" means the Internal Revenue Code of 1954, as amended. "Company" means Clark Information Technologies Corpora- tion, a corporation duly organized and validly existing under the laws of the State of Michigan, and any surviving, resulting or transferee corporation as permitted by Section 5.2 of the Agree- ment. "Construction Fund" means the City of South Bend, Indiana, Economic Development Revenue Bond Construction Fund (Clark Information Technologies Corporation Project) created and established in Section 5 hereof. The term "default" means those defaults, exclusive of any period of grace, specified in and defined in Section 11 hereof. "Determination of Taxability" means (i) the receipt by the Company of a written notice from the Bank or any other owner of the Bond of the issuance.of a preliminary letter regarding a proposed deficiency or a statutory notice of deficiency by the Internal Revenue Service which holds, in effect, that the interest payable on the Bond, or any installment thereof, is includible in the Federal gross income of the taxpayer named therein (other than a taxpayer who is a "substantial user" or a "related person ", within the meaning of Section 103 of the Code), (ii) the delivery to the Company of an opinion of Bond Counsel to the effect that the interest payable on the Bond, or any install- -3- ment thereof, is includible in the Federal gross income of the taxpayer named therein (other than a taxpayer who is a "sub- stantial user" or "related person ", within the meaning of Section 103 of the Code), or (iii) any amendment, modification, addition or change shall be made in Section 103 or any other provision of the Code or in any regulation or proposed regulation thereunder; or any ruling shall be issued or revoked by the Internal Revenue Service; or any other action shall be taken by the Internal Revenue Service, the Department of Treasury or any other governmental agency, authority or instrumentality; or any opinion of any Federal court or of the United States Tax Court shall be rendered; and the Bank or any other owner of the Bond shall have notified the Company in writing, that, as a result of any such event or condition, Bond Counsel is unable to give an unqualified opinion that the interest payable on the Bond, or any installment thereof, made on or after a date specified in said notice is excludible from the Federal gross income of the tax- payer named therein (other than a taxpayer who is a "substantial user" or a "related person ", within the meaning of Section 103 of the Code). "Equipment" means the machinery, equipment, apparatus, equipment fittings, readily removable fixtures and related property described in Exhibit B attached to and made a part of the Agreement, comprising a portion of the Project. The term "event of default" means those events specified in and defined in Section 11 hereof. "Event of Taxability" means the date of the occurrence of the event which results in the interest payable on the Bond, or any installment thereof, becoming includible in the Federal gross income of the taxpayer as set forth in as Determination of Taxability or the date of the Determination of Taxability, which- ever is earlier. "Guarantor" means Clark Equipment Company, a corpora- tion duly organized and validly existing under the laws of the State of Delaware, and any surviving, resulting or transferee entity as permitted by the Guaranty. "Guaranty" means the Guaranty Agreement dated as of November 1, 1984 from the Guarantor to the Bank, as from time to time supplemented and amended. The words "hereof ", "herein ", "hereunder" and other words of similar import refer to this Resolution as a whole. "Improvements" means the improvements, fixtures and related property to be constructed on the Land, comprising a portion of the Project. "Issuer" means the City of South Bend, Indiana, a municipal corporation and political subdivision of the State of Indiana, and any successor body to the duties or functions of the Issuer. "Land" means the real estate more particularly des- cribed in Exhibit A attached to and made a part of the Agreement, on which the Project is to be located. "Mortgage" means the Mortgage and Security Agreement dated as of November 1, 1984, by and between the Company and the Issuer, as from time to time supplemented and amended. "Note" means the promissory note of the Company made payable to the Issuer and endorsed by the Issuer to the Bank, pursuant to Section 4.2(a) of the Agreement, in order to evidence the obligation of the Company to repay the loan made thereunder, payments on which Note are provided to be sufficient to pay the principal installments of, premium, if any, and interest on the Bond when due. "Ordinance" means this Ordinance, as from time to time supplemented and amended. "Premises" means the Project and the Land. "Project" means the Building, the Improvements and the Equipment to be acquired, constructed and installed by the Company and financed in part with the proceeds of the Bond, as defined and described in the Agreement. AUTHORIZATION AND APPROVAL OF THE PROJECT Section 2. That in order to increase job opportunities and retain existing jobs in the City of South Bend, Indiana, the Project, as described in the preamble hereto shall be and is hereby approved and authorized to be financed through the issuance of the Bond as described herein. The estimated cost of the acquisition, construction and installation of the Project will be at least $1,550,000, of which $1,550,000 will be provided by the issuance of the Bond hereinafter authorized and the loan of the proceeds thereof to the Company. It is hereby found and declared that the financing of the Project and the use thereof by the Company as hereinbefore provided is necessary to accomplish the public purposes described in the preamble hereto, and complies with purposes and provisions of the Act. In order to further secure the Bond, the assignment and pledge of the right, title and interest of the Issuer in and to the Agreement, the Note and the Mortgage (except certain expense and indemnification payments), pursuant to the Assignment, are necessary and proper. -5- AUTHORIZATION AND PAYMENT OF BOND Section 3. That for the purpose of financing a portion of the cost of the Project there shall be and there is hereby authorized to be issued by the Issuer its Bond to be designated "Economic Development Revenue Bond, Series 1984 (Clark Information Technologies Corporation Project) ". The Bond shall be in the principal amount of $1,550,000, dated the date of its delivery, lettered R and numbered 1, issued in fully registered form, registered in the name of Harris Trust and Savings Bank, or its registered assigns, maturing as to principal in fifteen (15) consecutive annual principal installments, the first fourteen (14) installments in the amount of $103,333.33 each, payable on December 1, 1985, and on the first day of each December thereafter with a final installment of $103,333.42 on December 1, 1999, except as the provisions hereinafter set forth with respect to redemption prior to maturity may become applicable thereto, and bearing interest on the unpaid principal amount of the Bond from the date of the Bond at the Applicable Rate (as defined in the form of Bond hereinafter set forth) in effect from time to time, payable on March 1, 1985, and on the first day of each March, June, September and December thereafter until said principal amount is paid. Interest on the Bond shall be computed on the basis of a calendar year consisting of 360 days, and charged on the basis of the actual number of days elapsed. The Bond shall bear interest (payable solely and only from the source therein identified) on any overdue installment of principal of, premium, if any, and interest on the Bond (to the extent legally enforceable) at a rate equal to the Applicable Rate in effect from time to time plus two percent (2 %) per annum (other than the portion of any installment of interest which exceeds the amount of interest estimated to be due in accordance with the next following paragraph). The Bank shall provide the Issuer and the Company with written notice at least five (5) Business Days (as defined in the form of Bond) in advance of each date on which interest shall be payable on the Bond of the Applicable Rate in effect from time to time during the applicable interest payment period, the Prime Rate (as defined in the form of Bond) in effect from time to time during the applicable interest payment period to the extent that the Applicable Rate is calculated on the basis of the Prime Rate, and the amount of interest estimated to be so due and payable on the Bond on such interest payment date. Notwithstanding any other provision of the Bond or this Ordinance to the contrary, payment of such amount of interest as so estimated shall satisfy the obligation of payment of interest due on such interest pay- ment date and shall not constitute an event of default hereunder if such amount of interest as so estimated is less than the actual amount of interest due on such interest payment date. Any deficiency between the amount of interest so estimated and paid and the amount of interest actually due on such interest payment date shall be paid on the next succeeding interest payment date, and any overpayment shall be credited against the amount of interest due and payable on the next succeeding interest payment date. The principal installments of, premium, if any, and interest on the Bond shall be payable to the Bank in lawful money of the United States of America in Federal or other immediately available funds at the principal office of the Bank in the City of Chicago, Illinois. The Bank or any other owner of the Bond shall note on the Payment Record attached as Schedule A to the Bond the date and amount of payment of any principal installment paid (whether at maturity or upon acceleration or call for prior redemption) and interest paid, and, upon request of the Company or the Issuer, the Bond shall be available for inspection by the Company or the Issuer during regular banking hours at the prin- cipal office of the Bank in the City of Chicago, Illinois. The Bond, together with interest thereon, shall be a special, limited obligation of the Issuer secured by the Agree- ment, the Note made payable to the Issuer and endorsed to the Bank and payments thereon being made directly to the Bank on behalf of the Issuer and an assignment and pledge of the right, title and interest of the Issuer in and to the Agreement, the Note, the Guaranty and the Mortgage (except certain expense and indemnification payments), pursuant to the Assignment, and shall be payable solely from the revenues and income derived from the Agreement and the Note (except to the extent paid out of moneys attributable to the Bond proceeds, the income from the temporary investment thereof or moneys derived from the Guaranty or the Mortgage), and shall be a valid claim of the owner thereof only against the revenues and income derived from the Agreement and the Note (except as otherwise provided aforesaid), which revenues and income shall be used for no other purpose than to pay the principal installments of, premium, if any, and interest on the Bond, except as may be otherwise expressly authorized in this Ordinance or in the Agreement. The Bond and the obligation to pay interest thereon do not now and shall never constitute an indebtedness or an obligation of the Issuer, the State of Indiana or any political subdivision thereof, within the purview of any constitutional limitation or provision, but shall be secured as aforesaid, and are payable solely from the revenues and income derived from the Agreement and the Note (except as otherwise provided aforesaid). No owner of the Bond shall have the right to compel the taxing powers, if any, of the Issuer, the State of Indiana or any political subdivision thereof to pay any principal installment of, premium, if any, or interest on the Bond. -7- The principal installments of the Bond shall be subject to redemption prior to maturity by the Issuer in the event that the Company shall exercise its option to prepay the principal installments of the Note upon a Determination of Taxability, as a whole, and not in part, on any date within sixty ( 60 ) days of a Determination of Taxability, at a redemption price of 100% of the outstanding principal amount thereof being redeemed and accrued interest to the date fixed for redemption, all as provided in Section 7.1 of the Agreement, together wittl any amounts due and owing under Sections 5.9(a) and 7.7 of the Agreement. The principal installments of the Bond shall also be subject to redemption prior to maturity at the option of the Issuer from any available funds, including funds derived from the prepayment of the principal installments of the Note (or a portion thereof) at the option of the Company pursuant to Section 7.2 of the Agreement or borrowed funds, as a whole, or in part in the inverse order of maturity of the principal install- ments of the Bond, on any date during which the Bond bears interest at a rate calculated on the basis of the Prime Rate (as defined in the form of Bond in this Ordinance), at a redemption price of 100% of the principal amount thereof being redeemed plus accrued interest to the date fixed for redemption. The principal installments of the Bond shall be further subject to redemption prior to maturity by the Issuer in the event the Company shall elect to exercise its option to prepay the principal installments of the Note and to cause the principal installments of the Bond to be redeemed prior to maturity as provided in Section 7.3 of the Agreement in the event of damage to or destruction of or condemnation of the Premises or certain other events described therein. As a result of any such event, the principal installments of the Bond shall be subject to redemption prior to maturity on any date, as a whole, and not in part, at a redemption price of 1000 of the principal amount thereof being redeemed plus accrued interest to the date fixed for redemption, together with any amounts due and owing under Section 7.7 of the Agreement. The principal installments of the Bond shall be further subject to redemption prior to maturity by the Issuer in the event that any moneys remain in the Construction Fund upon receipt by the Bank of a completion certificate pursuant to Section 3.4 of the Agreement (other than moneys withheld and used to pay costs of the Project, as set forth in Section 3.4 of the Agreement) or any moneys remain from any insurance proceeds after the completion of the repair, rebuilding or restoration of the Premises pursuant to Section 4 of the Mortgage or any moneys remain from any condemnation proceeds after the completion of the restoration or acquisition of substitute property pursuant to Section 5 of the Mortgage. In any such event, the principal installments of the Bond shall be subject to redemption prior to maturity on any date within ten (10) days of the receipt by the Bank of such completion certificate or of the completion of such repair, rebuilding, restoration or acquisition, in part in the inverse order of maturity of the principal installments thereof, at a redemption price of 100% of the principal installments thereof being redeemed and accrued interest to the date fixed for redemption, together with any amounts due and owing under Section 7.7 of the Agreement. The principal installments of the Bond shall be further subject to redemption prior to maturity by the Issuer at the option of the owner of the Bond on December 1, 1994, upon at least sixty (60) days' written notice from the owner of the Bond to the Issuer and the Company of its election to cause the principal installments of the Bond to be so redeemed. As a result of such event, the principal installments of the Bond shall be subject to redemption prior to maturity from funds derived from the prepayment of the principal installments of the Note by the Company pursuant to Section 7.5 of the Agreement, as a whole, and not in part, on the aforesaid date, at a redemption price of 100% of the principal amount thereof being redeemed plus accrued interest to the date fixed for redemption, together with any amounts due and owing under Section 7.7 of the Agreement. Upon receipt by the Issuer and the Bank of at least five (5) days' prior written notice from the Company specifying a date for the prior redemption of the principal installments of the Bond (or a portion thereof), the Bank shall, to the extent that amounts are or become available therefor, apply such amounts on behalf of the Issuer to the redemption of the principal installments of the Bond (or a portion thereof) in accordance with the preceding paragraphs. The principal installments of the Bond (or a portion thereof), if designated for prior redemption, will cease to bear interest on the specified redemption date, provided sufficient funds for their redemption are paid to the Bank on behalf of the Issuer at the principal office of the Bark on such date. The Bond shall be prepared in typewritten form. The Mayor of the Issuer is hereby authorized, empowered and directed to execute the Bond by his manual or facsimile signature, and the City Clerk of the Issuer is hereby authorized, empowered and directed to attest the Bond by her manual signature, and the official seal of the Issuer shall be affixed thereto, and the Mayor and the City Clerk of the Issuer shall cause the Bond, as so executed and attested, to be delivered to the Bank. In case any official whose signature shall appear on the Bond shall cease to be such official before the delivery of the Bond, such signature shall nevertheless be valid and suffi- cient for all purposes, the same as if he had remained in office until delivery: The Bond shall be transferable only as a whole as provided herein. Upon surrender for transfer of the Bond at the principal office of the Bank, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or his attorney duly authorized in writing, the Issuer shall execute and deliver in the name of the transferee a sub- stitute fully registered Bond of the same series, in the denomination of the unpaid principal amount thereof, with the same maturities and interest rate, dated the first day of the March, June, September, or December (to which interest has been paid) next preceding the date of its issuance, or if issued on the first day of a March, June, September, or December (to which interest has been paid), as of such date. The owner of the Bond shall give written notice to the Company of any proposed transfer of the Bond at least thirty (30) days prior to the date of such proposed transfer. The Issuer shall cause books for the registration and for the transfer of the Bond as provided in this Ordinance to be kept by the Bank which is hereby constituted and appointed the Bond Registrar of the Issuer. The Bank, as Bond Registrar, shall keep and maintain, on behalf of the Issuer, registration books indicating the name and address of the owner from time to time of the Bond. The Bond shall never be registered in the name of bearer. The Bank shall not be required to transfer the Bond during the period of ten (10) days next preceding any interest payment date of the Bond nor to transfer the Bond after the mailing of notice calling the principal installments of the Bond (or a portion thereof) for prior redemption has been given as herein provided. The person in whose name the Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal installments of, premium, if any, or interest on the Bond shall be made only to or upon the written order of the registered owner thereof or his legal representative, but such registration may be changed as hereinabove provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. In each case the Issuer shall require the payment by the owner of the Bond requesting transfer of any tax or other government charge required to be paid with respect to such transfer. In the event the Bond is mutilated, lost, stolen or destroyed, the Issuer may execute a substitute Bond of like date, tenor and maturities as the Bond mutilated, lost, stolen or destroyed; provided, that, in the case the Bond is mutilated, the -10- mutilated Bond shall first be surrendered to the Issuer, and in the case the Bond is lost, stolen or destroyed, there shall be first furnished to the Issuer evidence of such loss, theft or destruction satisfactory to the Issuer, together with indemnity satisfactory to the Issuer. The Issuer shall duplicate on the Payment Record of the substitute Bond replacing the mutilated, lost, stolen or destroyed Bond all payments of principal install- ments (whether at maturity or upon acceleration or call for prior redemption) and interest which the records of the Issuer indicate as having appeared on the mutilated, lost, stolen or destroyed Bond. In the event all of the principal installments of the Bond shall have matured, instead of issuing a duplicate Bond the Issuer may pay the same without surrender thereof. The Issuer may charge the owner of the Bond with reasonable fees and expenses in this connection. BOND FORM Section 4. That the . Bond, and the Payment Record -- Schedule "A ", shall be in substantially the following forme -11- UNITED STATES OF AMERICA STATE OF INDIANA CITY OF SOUTH BEND, INDIANA Economic Development Revenue Bond, Series 1984 (Clark Information Technologies Corporation Project) PAYABLE BY THE ISSUER SOLELY AND ONLY FROM REVENUES AND INCOME DERIVED FROM THE LOAN AGREEMENT AND THE PROMISSORY NOTE REFERRED TO HEREIN No. R -1 $1,550,000 KNOW ALL MEN BY THESE PRESENTS that the City of South Bend, Indiana, a municipal corporation and political subdivision of the State of Indiana (the "Issuer "), for value received, promises to pay solely and only from the source and as herein- after provided, to HARRIS TRUST AND SAVINGS BANK, Chicago, Illinois, or its registered assigns (the "Bank "), the principal sum of: ONE MILLION FIVE HUNDRED FIFTY THOUSAND DOLLARS ($1,550,000) maturing as to principal in fifteen (15) consecutive annual principal installments, of $103,333.33 each, payable on December 1, 1985, and on the first day of each December thereafter with a final installment of $103,333.42 on December 1, 1999, except as the provisions hereinafter set forth with respect to redemption prior to maturity may become applicable hereto, together with interest on the unpaid principal amount hereof from the date hereof at the Applicable Rate (as hereinafter defined) in effect from time to time, payable on March 1, 1985, and on the first day of each March, June, September and December thereafter until said principal amount is paid. Interest on this Bond shall be computed on the basis of a calendar year consisting of 360 days, and charged on the basis of the actual number of days elapsed. The principal installments hereof and premium, if any, and interest hereon are payable in lawful money of the United States of America in Federal or other immediately available funds at the principal office of the Bank in the City of Chicago, Illinois. The following terms, as used in this Bond, shall have the following meanings: "Applicable Rate" shall mean seventy percent (700) of the Prime Rate in effect from time to time, plus eight and -12- one - quarter percent (8.250) per annum, or, in the event the Company (as hereinafter defined) gives written notice of a request pursuant to Section 4.2(c) of the Loan Agreement herein- after referred to as hereinafter provided, the Fixed Rate plus eight and one - quarter percent (8.25 %) per annum, from the date of this Bond when initially issued by the Issuer to the ninetieth day following such date of this Bond, on which date "Applicable Rate" shall mean seventy percent (70 %) of the Prime Rate in effect from time to time, but, in the event said Company gives written notice of its request that its promissory note issued under said Loan Agreement bear interest at a specified Fixed Rate for an Interest Period selected by said Company as set forth in Section 4.2(c) of said Loan Agreement, the Applicable Rate shall be equal to such Fixed Rate for such Interest Period; provided, that in the event there is a change in either the Federal Tax Rate or the State Tax Rate, the Applicable Rate shall automati- cally be adjusted as of and on the effective date of any such change by multiplying the Applicable Rate then in effect by a fraction equal to [ (1 - Federal Tax Rate as so adjusted) x (l - State Tax Rate as so adjusted) x [(1 - State Tax Rate as pre- viously in effect) + (Federal Tax Rate as previously in effect x State Tax Rate as previously in effect)]] divided by [(1 - Federal Tax Rate as previously in effect) x (1 - State Tax Rate as previously in effect) x [(1 - State Tax Rate as so adjusted) + (Federal Tax Rate as so adjusted x State Tax Rate as so adjusted)]] provided further, that in the event there is a change in the TEFRA Disallowance Deduction (the "Change "), the Applicable Rate shall automatically be adjusted as of and on the effective date of any such Change, as follows: (a) if the Applicable Rate from time to time in effect is calculated on the basis of the Prime Rate, the Applicable Rate shall automatically be adjusted by adding thereto [90 x (TEFRA Disallowance Deduction in effect after such Change - TEFRA Disallowance Deduction in effect prior to such Change) x [(State Tax Rate + Federal Tax Rate) - (Federal Tax Rate x State Tax Rate)] - [(1 - State Tax Rate) + (State Tax Rate x Federal Tax Rate)]]% of the Prime Rate, with the TEFRA Disallowance Deduction, the State Tax Rate and the Federal Tax Rate all to be expressed as decimals, and (b) if the Applicable Rate then in effect is calculated on the basis of a Fixed Rate, the Applicable Rate shall automatically be adjusted by recalculating the Fixed Rate in accordance with the formulae used to- originally calculate the Fixed Rate and the Base Rate, but using in such formulae (i) the TEFRA Disallowance Deduction in effect after such Change, (ii) the Federal Tax Rate in effect on the date of such Change, and (iii) the State Tax Rate in effect on the date of such Change, and without changing any of the other variables used in originally calculating the Fixed Rate and the Base Rate. Each determination of the Prime Rate, the Fixed Rate and the Applicable Rate shall be conclusive and binding on said Company, the Issuer and the owner hereof absent manifest error. -13- "Adjusted LIBOR Rate" shall mean, with respect to each Interest Period, the per annum rate of interest determined pur- suant to the following formula: Adjusted LIBOR Rate = LIBOR 1 - LIBOR Reserve Percentage "LIBOR" shall mean, with respect to each Interest Period, the per annum rate of interest (to be expressed as a decimal for purposes of calculation) as determined by the Bank [rounded upwards, if necessary, to the nearest whole multiple of one - sixteenth of one percent (1/16 %)] at which deposits of United States dollars in immediately available and freely transferable funds would be readily offered at 11:00 A.M., London time, two (2) London Banking Days prior to the day on which such Interest Period commences, by the London offices of major banks to other major banks in the London interbank market in an amount equal to $1,000,000 to be outstanding during such Interest Period, adjusted to reflect any maturities of this Bond during such Interest Period. "LIBOR Reserve Percentage" shall mean, with respect to each Interest Period, the reserve requirement (to be expressed as a decimal for purposes of calculation) imposed by the Board of Governors of the Federal Reserve System (or any successor thereto) under Regulation D on Eurocurrency liabilities (as such term is defined in Regulation D) for the applicable Interest Period as of the day on which such Interest Period commences, but taking into account any transitional adjustments thereto becoming effective during such Interest Period. "London Banking Day" means a day on which banks are open for business and quoting interest rates for United States dollar deposits in the London interbank market. "Base Rate" shall be determined as of the day on which any Interest Period commences, as follows: [Adjusted LIBOR Rate] + [Adjusted LIBOR Rate x TEFRA Disallowance Deduction x [Federal Tax Rate + State Tax Rate - (Federal Tax Rate x State Tax Rate)] divided by [(1 - State Tax Rate) x (1 - Federal Tax Rate)]]. "Business Day" shall mean a day on which banks in the City of Chicago, Illinois, are open for the general conduct of business, provided, that when used with respect to Fixed Rates based upon the Adjusted LIBOR Rate, such day shall also be one on which banks are dealing in dollar deposits in London, England, and banks are open for business in the City of New York, New York. "Federal Tax Rate" shall mean the maximum incremental percentage rate (to be expressed as a decimal for purposes of calculation) from time to time applicable to the taxable income of any ordinary business corporation imposed under Section 11 of the Internal Revenue Code of 1954, as amended (the "Code "), or any successor thereto. -14- "Fixed Rate" shall be determined as of the first day of any Interest Period as follows: [(.036 + Base Rate) x (1 - Federal Tax Rate) x (1 - State Tax Rate)] divided by [(1 - State Tax Rate) + (State Tax Rate x Federal Tax Rate)]. "Interest Period" shall mean the period commencing on the date selected by said Company specified in its notice required by Section 4.2(c) of said Loan Agreement with respect to selecting a Fixed Rate applicable to the Promissory Note of said Company and ending on a date which is an interest payment date on this Bond not .less than twelve (12) months, nor more than sixty (60) months, after the date of commencement thereof; provided, that the foregoing provision relating to Interest Periods is subject to the following: (i) if any Interest Period would otherwise end on a day which is not a Business Day, that Interest Period shall be extended to the next succeeding Business Day, unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day; and (ii) no Interest Period shall extend beyond December 1, 1999; and (iii) each Interest Period must end on the first day of a March, June, September, or December (except as provided for in clause (i) above). "Prime Rate" shall mean the per annum rate of interest from time to time announced by Harris Trust and Savings Bank as its prime commercial rate, with any change in said Prime Rate to be and become effective on and as of the date of any change in said prime commercial rate. "State Tax Rate" shall percentage rate (to be expressed calculation) from time to time ordinary business corporation imp principal office of the Bank is State tax is deductible by the purposes. mean the maximum incremental as a decimal for purposes of applicable to income of any osed by the State in which the located, the amount of which Bank for Federal income tax "TEFRA Disallowance Deduction" shall mean the percent- age of reduction (to be expressed as a decimal for purposes of calculation) set forth in Section 291(a)(3) of the Code or any successor thereto with respect to any financial institution pre- ference item. -15- This Bond shall bear interest (payable solely and only from the source hereinafter identified) on any overdue install- ment of principal hereof, premium, if any, and interest hereon (to the extent legally enforceable) at a rate equal to the Applicable Rate in effect from time to time plus two percent (2 %) per annum (other than the portion of any installment of interest which exceeds the amount of interest estimated to be so due and payable in accordance with the next following paragraph). The Bank shall provide the Issuer and the Company (as hereinafter defined) with written notice at least five (5) Business Days in advance of each date on which interest shall be payable on this Bond of the Applicable Rate in effect from time to time during the applicable interest payment period, the Prime Rate in effect from time to time during the applicable interest payment period to the extent that the Applicable Rate is cal - culated on the basis of the Prime Rate, and the amount of interest estimated to be so due and payable on this Bond on such interest payment date. Notwithstanding any other provision of this Bond to the contrary, payment of such amount of interest as so estimated shall satisfy the obligation of payment of interest due on such interest payment date and shall not constitute an event of default hereunder or under the Bond Resolution herein- after referred to.if such amount of interest as so estimated is less than the actual amount of interest due on such interest payment date. Any deficiency between the amount of interest so estimated and paid and the amount of interest actually due on such interest payment date shall be paid on the next succeeding interest payment date, and any overpayment shall be credited against the amount of interest due and payable on the next succeeding interest payment date. The date and amount of payments of principal install- ments (whether at maturity or upon acceleration or call for prior redemption) and payments of interest shall be noted by the Bank or any other owner of this Bond on the Payment Record -- Schedule "A ", made a part of this Bond, as provided in the Bond Ordinance hereinafter identified pursuant to which this Bond is issued. The Bank or any other owner of this Bond shall make this Bond available for inspection during regular banking hours at the principal office of the Bank in the City of Chicago, Illinois, at the request of the Issuer or the Company (as hereinafter defined). This Bond is issued in the principal amount of $1,550,000 designated "Economic Development Revenue Bond, Series 1984 (Clark Information Technologies Corporation Project) ", pursuant to the hereinafter described Act and to a Bond Ordinance duly adopted by the members of the Issuer on December 3, 1984 (the "Bond Ordinance "), for the purpose of providing funds to finance a portion of the cost of constructing a building and the -16- acquisition of certain machinery, equipment and related property to be installed therein (the "Project ") to be used as a computer facility and to be located in the City of South Bend, Indiana, and paying expenses incidental thereto and to the issuance of this Bond, to the end that the Issuer may be able to increase employment opportunities and retain jobs in the State of Indiana. The proceeds of this Bond will be used by the Issuer to pay or reimburse Clark Information Technologies Corporation, a corporation incorporated and existing under the laws of the State of Michigan (the "Company "), for a portion of the costs of the acquisition, construction and installation of the Project, under the terms of a Loan Agreement dated as of November 1, 1984, by and between the Issuer and the Company (which agreement, as from time to time supplemented and amended, is hereinafter referred to as the "Agreement "). This Bond is secured by an assignment and pledge of the revenues and income derived by the Issuer from the repayment of the loan by the Company and other revenues and income derived pursuant to the Agreement and the Promissory Note issued by the Company thereunder (the "Note "), and is further secured by an assignment and pledge of the right, title and interest of the Issuer in and to the Agreement, the Note and the Mortgage and Security Agreement dated as of November 1, 1984, by and between the Company and the Issuer (except certain expense and indemnifi- cation payments), as more fully described in the Bond Ordi- nance. Reference is made to the Bond Ordinance for a description of the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Issuer, the rights, duties and obligations of the owner of this Bond, and the terms on which this Bond is or may be issued and to all of the provisions of which the owner hereof by the acceptance of this Bond assents. This Bond is issued pursuant to and in full compliance with the Constitution and the laws of the State of Indiana, and particularly Indiana Code Section 36 -7 -12, as supplemented and amended (the "Act "). This Bond and the obligation to pay interest hereon are special, limited obligations of the Issuer, secured as aforesaid and payable solely out of the revenues and income derived from the Agreement and the Note and as otherwise provided in the Bond Ordinance and the Agreement. This Bond and the obligation to pay interest hereon shall not be deemed to constitute an indebtedness or an obligation of the Issuer, the State of Indiana or any political subdivision thereof, within the purview of any constitutional limitation or provision. No owner of this Bond shall have the right to compel the taxing powers, if any, of the Issuer, the State of Indiana or any political sub- division thereof to pay any principal installments of, premium, if any, or interest on this Bond. Pursuant to the provisions of the Agreement, payments sufficient for the prompt payment when -17- due of the principal installments of, premium, if any, and interest on this Bond are to be paid by the Company at the principal office of the Bank, and all revenues and income accruing from the repayment of the loan by the Company under the Agreement and the Note have been duly assigned and pledged to the Bank for that purpose, under the Bond Ordinance, to secure pay- ment of the principal installments of, premium, if any, and interest on this Bond. The principal installments of this Bond are subject to redemption prior to maturity by the Issuer in the event that the Company shall exercise its option to prepay the principal installments of the Note upon a Determination of Taxability (as defined in the Bond Ordinance) , as a whole, and not in part, on any date within sixty (60) days of such a Determination of Tax- ability, at a redemption price of 100% of the outstanding .principal amount hereof being redeemed and accrued interest to the date fixed for redemption, all as provided in Section 7.1 of the Agreement, together with any amounts due and owing under Sections 5.9(a) and 7.7 of the Agreement. The principal installments of this Bond are also subject to redemption prior to maturity at the option of the Issuer from any available funds, including funds derived from the prepayment of the principal installments of the Note (or a portion thereof) at the option of the Company pursuant to Section 7.2 of the Agreement or borrowed funds, as a whole, or in part in the inverse order of the maturity of the principal installments hereof, on any date during which this Bond bears interest at a rate calculated on the basis of the Prime Rate, at a redemption price of 100% of the principal amount hereof being redeemed plus accrued interest to the date fixed for redemption. The principal installments of this Bond are further subject to redemption prior to maturity by the Issuer in the event the Company shall elect to exercise its option to prepay the principal installments of the Note and to cause the principal installments of this Bond to be redeemed prior to maturity as provided in Section 7.3 of the Agreement in the event of damage to or destruction of or condemnation of the Premises (as defined in the Bond Ordinance) or certain other events described therein. As a result of any such event, the principal install- ments of this Bond shall be subject to redemption prior to maturity on any date, as a whole, and not in part, at a redemp- tion price of 100% of the principal amount hereof being redeemed plus accrued interest to the date fixed for redemption, together with any amounts due and owing under Section 7.7 of the Agree- ment. 0:E The principal installments of this Bond are further subject to redemption prior to maturity by the Issuer in the event that any moneys remain in the Construction Fund referred to in the Bond Ordinance upon receipt by the Bank of a completion certificate pursuant to Section 3.4 of the Agreement (other than moneys withheld and used to pay costs of the Project, as set forth in Section 3.4 of the Agreement) or any moneys remain from any insurance proceeds or condemnation proceeds after the completion of the repair, rebuilding, restoration or acquisition of said Premises after certain events of damage to, destruction of or condemnation of said Premises. In any such event, the principal installments of this Bond shall be subject to redemp- tion prior to maturity on any date within ten (10) days of the receipt by the Bank of such completion certificate or of the completion of such repair, rebuilding, restoration or acquisi- tion, in part in the inverse order of maturity of the principal installments' thereof, at a redemption price of 1000 of the principal installments hereof being redeemed and accrued interest to the date fixed for redemption, together with any amounts due and owing under Section 7.7 of the Agreement. The principal installments of this Bond are further subject to redemption prior to maturity by the Issuer at the option of the owner of this Bond on December 1, 1994, upon at least sixty (60) days' written notice from the owner of this Bond to the Issuer and the Company of its election to cause the principal installments of this Bond to be so redeemed. As a result of such event, the principal installments of this Bond are subject to redemption prior to maturity from funds derived from the prepayment of the principal installments of the Note by the Company pursuant to Section 7.5 of the Agreement, as a whole, and not in part, on the aforesaid date, at a redemption price of 1000 of the principal amount hereof being redeemed plus accrued interest to the date fixed for redemption, together with any amounts due and owing under Section 7.7 of the Agreement. Upon receipt by the Issuer and the Bank of at least five (5) days' prior written notice from the Company specifying a date for the prior redemption of the principal installments of this Bond (or a portion hereof), the Bank shall, to the extent that amounts are or become available therefor, apply such amounts on behalf of the Issuer to the redemption of the principal installments of this Bond (or a portion hereof) in accordance with the preceding paragraphs. The principal installments of this Bond (or a portion hereof), if designated for prior redemp- tion, shall cease to bear interest on the specified redemption date, provided sufficient funds for their redemption have been paid to the Bank on such date. -19- This Bond is transferable only as a whole by the registered owner hereof in person or by his attorney duly authorized in writing at the principal office of the Bank but only in the manner, subject to the limitations and upon payment of the charges provided in the Bond Ordinance, and upon surrender and cancellation of this Bond.. Upon such transfer a substitute fully registered Bond of the same series, the same outstanding maturities and interest rate, in the denomination of the unpaid principal amount hereof, dated as provided in the Bond Ordinance, will be issued to the transferee in exchange herefor. The Issuer and the Company may deem and treat the registered owner hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal installments hereof and premium, if any, hereon and interest due hereon and for all other purposes and neither the Issuer nor the Company shall be affected by any notice to the contrary. The owner of this Bond shall give written notice to the Company of any proposed transfer of this Bond at least thirty (30) days prior to the date of such proposed transfer. In certain events, on the conditions, in the manner and with the effect set forth in the Bond Ordinance, the principal installments of this Bond may become or may be declared due and payable before the stated maturity thereof, together with interest accrued thereon. Modifications, alterations or amendments of the pro- visions of the Bond Ordinance may be made only to the extent and in the circumstances permitted by the Bond Ordinance. This Bond is issued with intent that the laws of the State of Indiana will govern its construction. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by the Act and the Consti- tution and the laws of the State of Indiana to happen, exist and be performed precedent to and in the issuance of this Bond have happened, exist and have been performed in due time, form and manner as required by law. -20- IN WITNESS WHEREOF, the City of South Bend, Indiana, has caused this Bond to be signed on its behalf by its Mayor by his manual or facsimile signature, and attested manually by its City Clerk, and the official seal of the Issuer to be affixed hereto, all as of , 19840 (SEAL) ATTEST: City Clerk CITY OF SOUTH BEND, INDIANA By Mayor -21- SCHEDULE A PAYMENT RECORD Principal Balance Interest Authorized Date Payment Due Payment Official and Title -22- CUSTODY AND APPLICATION OF PROCEEDS OF BOND: CONSTRUCTION FUND Section 5. There is hereby created and established with the Bank, which is hereby constituted and appointed as depositary for the Issuer, a special fund in the name of the Issuer to be designated "City of South Bend, Indiana Ecomonic Development Revenue Bond Construction Fund (Clark Information Technologies-Corporation Project) ". The proceeds received by the Issuer upon the sale of the Bond shall be deposited in the Con- struction Fund which shall be held in a separate account by the Bank, as depositary. Moneys in the Construction Fund shall be expended in accordance with the provisions of the Agreement, and particularly Section 3.3 thereof. The Bank, as depositary, shall keep and maintain adequate records pertaining to the Construction Fund and all disbursements therefrom, and after the Project has been completed and a certificate of payment of all costs filed as provided in this Section 5, the Bank, as depositary, shall deliver copies of such records to the Issuer and the Company. The completion of the Project and payment of all costs and expenses incident thereto shall be evidenced by the filing with the Issuer and the Bank of a certificate of the Authorized Company Representative required by Section 3.4 of the Agree- ment. Any moneys thereafter remaining in the Construction Fund shall be applied in accordance with Section 3.4 of the Agreement. ACQUISITION, CONSTRUCTION AND INSTALLATION OF PROJECT AND PAYMENT OF AMOUNTS UNDER THE AGREEMENT Section 6. It is the declared intention of the Issuer to authorize the disbursement of the proceeds of the Bond in order to finance a portion of the cost of the acquisition, construction and installation of the Project by the Company, pursuant to the Agreement in substantially the form which has been presented to and is hereby approved by the members of the Issuer. The Agreement and the revenues and income thereof, including all moneys received under its terms and conditions and the Note therein authorized, are provided to be sufficient to pay the principal installments of, premium, if any, and interest on the Bond hereby authorized when due, and are hereby pledged and ordered paid to the Bank on behalf of the Issuer as specified in Section 7 hereof. The Agreement provides that the Company shall remit the required payments in repayment of the loan under the terms and conditions of the Agreement directly to the Bank on -23- behalf of the Issuer for application by the Bank to the payment of the principal installments of (whether at maturity, by acceleration, upon redemption prior to maturity or otherwise), premium, if any, and interest on the Bond, and such provision is hereby expressly approved. REVENUES Section 7. The Bond and all payments required of the Issuer hereunder are not general obligations of the Issuer, but are special, limited obligations secured by an assignment and pledge of the right, title and interest of the Issuer in and to the Agreement, the Note and the Mortgage (except certain expense and indemnification payments), pursuant to the Assignment, and shall be payable by the Issuer solely and only out of the revenues and income derived from the Agreement and the Note and as otherwise provided herein. The Bank is authorized and directed to apply all amounts available for payment of the principal installments of, premium, if any, and interest on the Bond to the direct payment when due of the principal installments of (whether at maturity, by acceleration, upon redemption prior to maturity or otherwise), premium, if any, and interest on the Bond, including without limitation payments as follows: (a) any amount remaining in the Construction Fund to the extent provided in Section 3.4 of the Agreement; (b) all payments made on the Note; (c) all prepayments of principal installments of the Note (or a portion thereof) as specified in Article VII of the Agreement; and (d) all other moneys received by the Bank under and pursuant to any of the provisions of the Agreement, the Note, the Mortgage or the Assignment which are required or are accompanied by directions that such moneys are to be applied to the payment of the principal installments of, premium, if any, and interest on the Bond. The Issuer covenants and agrees that should there be a default under the Agreement, the Issuer shall fully cooperate with the Bank, as the owner of the Bond, or any other owner of the Bond to the end of fully protecting the rights and security of the Bank or such other owner of the Bond. Nothing herein shall be construed as requiring the Issuer to operate the Project or to use any funds or revenues from any source other than funds and revenues derived from the Agreement and the Note (except as otherwise provided herein). Any amounts remaining in any fund or paid to the Bank under the Agreement, the Note, the Mortgage or the Assignment, after payment in full of the principal installments of, premium, -24- if any, and interest on the Bond and the charges and expenses of the Bank shall be paid to the Company, as provided herein and in Section 9.5 of the Agreement. ASSIGNMENT AND MORTGAGE Section 8. As security for the due and punctual payment of the principal installments of, premium, if any, and interest on the Bond hereby authorized, the Issuer hereby assigns and pledges to the Bank all of its right, title and interest in and to, including without limitation its rights to all revenues and income derived by the Issuer pursuant to, the Agreement, the Note and the Mortgage (except any payment made pursuant to Section 4.2(b) of the Agreement, relating to the obligation of the Company to pay reasonable and necessary expenses of the Issuer, Section 5.3 of the Agreement, relating to indemnification of the Issuer by the Company, and Section 6.3 of the Agreement, relating to the obligation of the Company to pay attorneys' fees and expenses incurred by the Issuer upon a default thereunder) and all rights and remedies of the Issuer under the Agreement, the Note and the Mortgage to enforce payment thereof, and as evidence of such assignment, pledge and security interest. INVESTMENTS; ARBITRAGE Section 9. Any moneys held as part of the Construc- tion Fund created pursuant to Section 5 hereof may be invested or reinvested on the direction of the Authorized Company Repre- sentative, in accordance with the provisions of Section 3.5 of the Agreement. Any such investment shall be held by or under control of the Bank, as depositary, and shall be deemed at all times a part of the Construction Fund for which the investment was made, and the interest accruing thereon and any profit realized from such investments shall be credited to the Con- struction Fund, and any loss resulting from such investments shall be charged to such Construction Fund, which loss shall be an obligation of the Company as provided in the Agreement. As and when any amount invested pursuant to this Section 9 may be needed for disbursement, the Authorized Company Representative may direct the Bank to cause a sufficient amount of the investments to be sold and reduced to cash to the credit of such funds regardless of the loss on such liquidation. With respect to Section 103 of the Code, the Company has made certain covenants with the Issuer in Section 3.6 of the Agreement, and the Company will make certain certifications and representations with respect to Section 103 of the Code on the -25- date of delivery of the Bond, which the Issuer shall accept and adopt, and the Issuer, acting in reliance on such covenants, certifications and representations, hereby covenants with the Bank and any other owner of the Bond that so long as any prin- cipal installment of, premium, if any, or interest on the Bond remains unpaid, the members of the Issuer will not take or authorize the taking of any action which will cause the Bond to be classified as an "arbitrage bond" within the meaning of Section 103 of the Code and any regulations promulgated or proposed thereunder, including without limitation Section 1.103 -13, Section 1.103 -14 and Section 1.103 -15 of the Income Tax Regulations (26 C.F.R., Part 1) as the same presently exist or may from time to time hereafter be amended, supplemented or revised, or within the meaning of any Federal legislation and any regulations promulgated or proposed pursuant thereto. GENERAL COVENANTS Section 10. The Issuer covenants that it will promptly cause to be paid solely and only from the source mentioned in the Bond, the principal installments of, premium, if any, and interest on the Bond hereby authorized at the place, on the dates and in the manner provided herein and in the Bond according to the true intent and meaning hereof and thereof. The Bond and the obligation to pay interest thereon are special, limited obligations of the Issuer, secured by the Note of the Company, the Mortgage and the Assignment and payable as set out in Section 3 hereof. The Issuer covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Ordinance, the Bond, the Agreement, the Mortgage, the Assignment and the Bond Purchase Agreement, and in all proceedings of the members of the Issuer pertaining thereto. The Issuer covenants that it is duly authorized under the Constitution and the laws of the State of Indiana, including particularly and without limitation the Act, to issue the Bond authorized hereby and to assign and pledge the revenues and income hereby assigned and pledged in the manner and to the extent herein set forth; that all action on its part for the issuance of the Bond has been or will, before delivery of the Bond, have been duly and effectively taken, and that the Bond, when issued and delivered to the Bank, will be a valid and enforceable special, limited obligation of the Issuer according to the true intent and meaning thereof. The Issuer covenants that it will execute, acknowledge and deliver such instruments, financing statements and other documents as the Bank or any other owner of the Bond may reason- -26- ably require for the better assuring, granting, pledging and assigning unto the Bank (or such other owner) the right, title and interest of the Issuer in and to the Agreement, the Note and the Mortgage, as well as the rights of the Issuer in and to the required payments of revenues and income pursuant to Section 4.2(a) of the Agreement and the Note hereby assigned and pledged to the payment of the principal installments of, premium, if any, and interest on the Bond. The Issuer covenants and agrees that, except as herein and in the Agreement provided, it will not sell, convey, mortgage, encumber or otherwise dispose of any part of the revenues and income derived from the Agreement and the Note, or of its right, title and interest in and to the Agreement, the Note and the Mortgage. The Issuer covenants and agrees that all books and documents in its possession relating to the Project and the pay- ments on the Note and under the Agreement shall at all reasonable times be open to inspection by the Bank or any other owner of the Bond or such accountants or other agencies as the Bank or such owner may from time to time designate. The Issuer covenants and agrees that it shall, through the Bank or any other owner of the Bond, enforce all of its rights and all of the obligations of the Company under the Agree- ment and the Mortgage for the benefit of the Bank or any other owner of the Bond. The Issuer shall protect the rights of the Bank or any other owner of the Bond hereunder with respect to the assignment and pledge of the revenues and income coming due under the Agreement and the Note. EVENTS OF DEFAULT AND REMEDIES Section 11. If any of the following events occurs it is hereby defined as and declared to be and to constitute an "event of default" hereunder: (a) Default in the due and punctual payment of any interest on the Bond; provided, however, that the payment of less than the full amount of interest due on the Bond on any quarterly interest payment date shall not constitute an event of default hereunder if the amount of interest paid shall be the amount of interest which the Bank has advised the Issuer and the Company is the amount of interest estimated to be due on such interest payment date. (b) Default in the due and punctual payment of any principal installment of or premium, if any, on the Bond, whether at the stated maturity thereof or upon redemption prior to maturity or proceedings for the acceleration thereof. -27- (c) An "Event of Default" shall have occurred and be continuing under the Agreement. Upon the occurrence of an event of default hereunder and so long as such event of default is continuing, the Bank or any other owner of the Bond, by notice in writing delivered to the Company and the Issuer, may declare the principal install- ments of the Bond and the interest accrued thereon immediately due and payable, and such principal installments and interest shall thereupon become and be immediately due and payable. Upon any such declaration all payments under the Agreement and the Note from the Company shall become immediately due and payable as provided in Section 6.2 of the Agreement. While any principal installment interest on the Bond remains unpaid, exercise any of the remedies available up, specified in Section 6.2 of the Agreement the prior written consent of the Bank or Bond. of, premium, if any, or the Issuer shall not :)n an "Event of Default" without first obtaining any other owner of the Upon the occurrence of an event of default hereunder, the Bank or any other owner of the Bond may exercise such rights as exist under the Agreement, the Note, the Mortgage, the Guaranty, the Assignment or this Ordinance, and may pursue any available remedy at law or in equity by suit, action, mandamus or other proceeding to enforce the payment of the principal install- ments of, premium, if any, and interest on the Bond and to enforce and compel the performance of the duties and obligations of the Company as herein and in the Agreement, the Note and the Mortgage set forth. No remedy by the terms of this Ordinance conferred upon or reserved to the Bank (or any other owner of the Bond) 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 to the Bank or any other owner of the Bond hereunder or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right, power or remedy accruing upon any event of default hereunder shall impair any such right, power or remedy or shall be construed to be a waiver of any such event of default hereunder or acquiescence therein; and every such right, power or remedy may be exercised from time to time as often as may be deemed expedient. All moneys received pursuant to any right given or action taken under the provisions of this Section 11 or under the provisions of Article VI of the Agreement (after payment of the costs and expenses of the proceedings resulting in the collection of such moneys and of the expenses, liabilities and advances incurred or made by the Issuer or the Bank or any other owner of the Bond) or under the Assignment or the Mortgage, and all moneys in the Construction Fund at the time of the occurrence of an event of default hereunder, shall be paid to the Bank on behalf of the Issuer, and shall be applied to the payment of the prin- cipal installments, premium, if any, and interest due and unpaid upon the Bond to the person or persons entitled thereto. Whenever moneys are to be applied pursuant to the pro- visions of -this Section 11, such moneys shall be applied to the payment of the principal installments of, premium, if any, or interest on the Bond upon payment of such moneys to the Bank. Whenever all principal installments of, premium, if any, and interest on the Bond have been paid under the provisions of this Section 11 and all expenses of the Bank and the Issuer have been paid, any amounts paid to the Bank and not so applied shall be paid to the Company pursuant to Section 9.5 of the Agreement. The Bank (or any other owner of the Bond) may in its discretion waive any event of default hereunder and its con- sequences and rescind any declaration of acceleration of principal, and in cases of any such waiver or rescission, or in case any proceeding taken by the Bank on account of any such event of default shall have been discontinued or abandoned or determined adversely, then and in every such case the Issuer, the Company, the Bank and any other owner of the Bond shall be restored to their former positions and rights hereunder, respectively, but no such waiver or rescission shall extend to any subsequent or other event of default hereunder, or impair any right consequent thereon. With regard to any default concerning which notice is given to the Company under the provisions of this Section 11, the Issuer hereby grants the Company full authority for account of the Issuer to perform or observe any covenant or obligation alleged in said notice not to have been performed or observed, in the name and stead of the Issuer with full power to do any and all things and acts to the same extent that the Issuer could do in order to remedy such default. -29- SALE OF THE BOND: EXECUTION OF DOCUMENTS Section 12. (a) The sale of the Bond hereby authorized to the Bank at a price of $1,550,000 and payment pursuant to the Bond Purchase Agreement in substantially the form which has.been presented to the members of the Issuer, is hereby approved by said members, and the Bond Purchase Agreement in substantially the form which has been presented to the members of the Issuer is hereby in all respects authorized, approved and confirmed. The Mayor of the Issuer is hereby authorized, empowered and directed to execute the Bond Purchase Agreement for and on behalf of the Issuer, and the City Clerk of the Issuer is hereby authorized, empowered and directed to attest the same and to affix the official seal of the Issuer thereto, and the Mayor and the City Clerk are hereby authorized, empowered and directed to deliver the Bond Purchase Agreement, such Bond Purchase Agreement to be in substantially the same form as presented to and approved by the members of the Issuer, or with such changes therein as shall be approved by the officers of the Issuer executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of a Bond Purchase Agreement presented to and approved by the members of the Issuer. (b) The Agreement, the Mortgage and the Assignment in substantially the form in which the same have been presented to the members of the Issuer are hereby approved by such members, and are in all respects authorized, approved and confirmed. The Mayor of the Issuer is hereby authorized, empowered and directed to execute the Agreement, the Mortgage and the Assignment for and on behalf of the Issuer, and the City Clerk of the Issuer is hereby authorized, empowered and directed to attest the same and to affix the official seal of the Issuer thereto, and the Mayor and the City Clerk are hereby authorized, empowered and directed to deliver the Agreement, the Mortgage and the Assignment, such Agreement, Mortgage and Assignment to be in substantially the same form as presented to and approved by the members of the Issuer, or with such changes therein as shall be approved by the officers of the Issuer executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of Agreement, Mortgage and Assignment presented to and approved by the members of the Issuer. -30- PERFORMANCE PROVISIONS Section 13. The Mayor and the City Clerk, for and on behalf of the Issuer be, and each of them hereby is, authorized and directed to do any and all things necessary to effect the performance of all obligations of the Issuer under and pursuant to this Ordinance, the advancement of the loan, the execution and delivery of the Bond and the performance of all other acts of whatever nature necessary to effect and carry out the authority conferred by this Ordinance. The Mayor and the City Clerk of the Issuer be, and they are hereby, further authorized and directed for and on behalf of the Issuer, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of the authority conferred by this Ordinance or to evidence said authority and to exercise and otherwise take all necessary action to the full realization of the rights, accomplishments and purposes of the Issuer under the Agreement, the Mortgage, the Assignment and the Bond Purchase Agreement and to discharge all of the obligations of the Issuer thereunder. DOCUMENTS ON FILE Section 14. Pursuant to th.e provisions of Indiana Code 36- 1 -5 -4, two copies of all documents incorporated in this Ordinance by reference are on file in the office of the City Clerk for public inspection. NOTICES Section 15. All notices, certificates or other communications shall be sufficiently given and shall be deemed given when the same are (i) deposited in the United States mail and sent by first class mail, postage prepaid, or (ii) delivered, in each case to the parties at the following addresses or such other address as a party may designate by notice to the other parties: if to the Issuer, ,at County -City Building, South Bend, Indiana 46601, Attention: Mayor; if to the Bank, at P.O. Box 755, 111 West Monroe Street, Chicago, Illinois 60690, Attention: Sharon P. Walsh, Vice President; and if to the Company at 1200 Niles /Buchanan Road, Buchanan, Michigan 49107, Attention: Robert L. Barrett. -31- RESOLUTION A CONTRACT; PROVISIONS FOR MODIFICATIONS, ALTERATIONS AND AMENDMENTS Section 16. The provisions of this Ordinance shall constitute a contract between the Issuer and the owner of the Bond hereby authorized; and after the issuance of the Bond, no modification, alteration, amendment or supplement to the pro- visions of this Ordinance shall be made in any manner except with the written consent of the Bank or any other owner of the Bond until such time as all principal installments of, premium, if any, and interest on the Bond shall have been paid in full. SATISFACTION AND DISCHARGE Section 17. All rights and obligations of the Issuer and the Company under the Bond, this Ordinance, the Agreement, the Note, the Mortgage, the Assignment and the Bond Purchase Agreement shall terminate and such instruments shall cease to be of further effect, and the Bank or any other owner of the Bond shall surrender the Bond, cancel the Bond, deliver the cancelled Bond to the Issuer, deliver a copy of the cancelled Bond to the Company and assign and deliver to the Company any moneys required to be paid to the Company under Section 7 hereof when: (a) all expenses of the Issuer and the Bank required or permitted to be paid pursuant to this Ordinance, the Agreement, the Note, the Mortgage, the Assignment and the Bond Purchase Agreement shall have been paid; (b) the Issuer and the Company shall have performed all of their covenants and promises in the Bond, this Ordinance, the Agreement, the Note, the Mortgage, the Assignment and the Bond Purchase Agreement; and (c) all principal installments of, premium, if any, and interest on the Bond have been paid. SEVERABILITY Section 18. If any section, paragraph, clause or provision of this Ordinance shall be ruled by any court of competent jurisdiction to be invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the remaining sections, paragraphs, clauses or provisions hereof. -32- CAPTIONS Section 19. The captions or headings of this Ordinance are for convenience only and in no way define, limit or describe the scope or intent of any provision of this Ordinance. PROVISIONS IN CONFLICT SUPERSEDED Section 20. All other ordinances, resolutions and orders, or parts thereof, in conflict with the provisions of this Ordinance are, to the extent of such conflict, hereby super- seded. This Ordinance shall be in full force and effect upon its adoption. APPROVAL Section 21. We hereby approve the issue of the Bond in compliance with the Tax Equity and Fiscal Responsibility Act of 1982. tuber of the Co Council FILED IN mars omm NOV 1 4 1984 Irene Gammon OTY QUK, SOUTH BEND, IND. ist READING //—/y PUBLIC HEARING IQ__?_ 2nd READING /C9-.7- d* V NOT APPROVED -33- REFERRED PASSED,