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HomeMy WebLinkAboutApproving Economic Development Bonds - South Bend Forge IncORDINANCE No 6781 -80 Passed by the Common Council of the City of South Bend, Indiana May 27, 1980 IRENE K. GAMMON Presented by me to the Mayor of the City of South Bend, Indiana City Clerk ident of Common Council 2 rq 80 IRENE K. GAMMON Approved and signed by me — q ed I Clerk ORDINANCE NO. ' 791-940 AN ORDINANCE APPROVING THE FORM AND TERMS OF FIRST SUPPLEMENTAL LOAN AGREEMENT, FIRST SUPPLEMENTAL TRUST INDENTURE, FIRST SUPPLE- MENTAL MORTGAGE AND SECURITY AGREEMENT, • ECONOMIC DEVELOPMENT BONDS FOR PRINCIPAL AMOUNT OF $3,000,000.00, ASSIGNMENTS, ELECTIONS, AUTHORIZING EXECUTION THEREOF AND APPROVING SOUTH BEND ECON014IC DEVELOPMENT RESOLUTION NO. 4 -80 FOR SOUTH BEND FORGE, INC. PROJECT An ordinance authorizing the issuance of $3,000,000 additional economic development first mortgage revenue bonds of the City of South Bend, Indiana, in the aggregate principal amount of $3,000,000 in order to assist South Bend Forge, Inc. in the financing of costs of acquisition, construction and installation of additional economic development facilities located within the boundaries of said City, in order to carry out the public purposes of the City, as set forth in the Municipal Economic Development Act of 1965, as amended; providing for the pledge of additional revenues for the payment of said additional bonds; authorizing a First Supplemental Loan Agreement, amending and supple- menting the Loan Agreement dated as of July 1, 1979, with respect to the proceeds derived from the sale of said additional bonds; and authorizing a First Supplemental Trust Indenture, amending and supplementing the Trust Indenture dated as of July 1, 1979, for the protection and disposition of such revenues and further to secure the payment of said additional bonds; and authorizing the acceptance of a First Supplemental Mortgage and Security Agreement amending and supplementing the Mortgage and Security Agreement, dated as of July 1, 1979 and an assignment thereof to provide further security for said additional bonds. WHEREAS, the City of South Bend (herein called the "Issuer ") is a municipal corporation and political subdivision of the State of Indiana and by virtue of the Municipal Economic Development Act of 1965, as amended, Indiana Code of 1971, Title 18, Article 6, Chapter 4.5 (hereinafter called the "Act ") is authorized and empowered to issue its revenue bonds for the purpose of making a loan to the Company to assist in the financing to acquire, construct and equip real and personal property comprising additional "economic development facilities" as those words are defined in the Act to be owned and operated by the Company; and WHEREAS, the Act further authorizes the Issuer to (a) issue revenue bonds of the Issuer in order to assist in the financing of costs of economic develop- ment facilities as defined in the Act, (b) issue additional bonds on a parity with bonds originally issued when so authorized and empowered by ordinance of the Issuer, (c) enter into a supplemental loan agreement and to accept security interests to evidence and secure such indebtedness and to provide for additional revenues, as described in Title 18, Article 6, Chapter 4.5 -18 of the Act, sufficient to pay the principal of and premium, if any, and interest on such revenue bonds, (d) secure such revenue bonds by a supple- mental trust indenture and by a pledge and assignment of revenues, as provided for herein, and (e) enact this Bond Legislation and enter into the First Supplemental Trust Indenture, the First Supplemental Loan Agreement, the First Supplemental Mortgage and the acceptance and assignment of the First Supplemental Mortgage, all as hereinafter defined, upon the terms and conditions provided therein; WHEREAS, by Ordinance duly passed on August 1, 1979 (hereinafter called the "Original Bond Legislation "), the Issuer authorized the aggregate principal amount of $6,000,000 City of South Bend Economic Development First Mortgage Revenue Bonds, (South Bend Forge, Inc. Project) (ABS Industries, Inc. - Guarantor), for the purpose of making a loan to assist the Company in the financing of costs of acquiring, constructing and equipping real and personal property, comprising economic development facilities to be owned and operated by the Company, for the Project Purpose, including costs incidental thereto and to the financing thereof; and WHEREAS, in order to provide revenues sufficient to pay the principal of and premium, if any, and interest on such Bonds (hereinafter and in the Original Bond Legislation called the "Project Bonds "), the Issuer and the Company entered into a Loan Agreement dated as of July 1, 1979 (hereinafter called the `Original Agreement "); and WHEREAS, in order to secure the Project Bonds, the Issuer and First Bank and Trust Company of South Bend, South Bend, Indiana, as Trustee, entered into a Trust Indenture dated as of July 1, 1979 (hereinafter called the `Original Indenture "); and -2- WHEREAS, at the time the Original Bond Legislation was adopted, it was provided in Section 8 thereof and in Section 2.08 of the Original Indenture that one or more series of economic development revenue bonds in addition to the Project Bonds (hereinafter and in the Original Bond Legislation and Original Indenture called "Additional Bonds ") may be authenticated and delivered from time to time under the Indenture when authorized by resolu- tion of the Issuer, subject to certain provisions set forth in said Original Indenture; and WHEREAS, the Company has requested that the Issuer issue a series of Additional Bonds in the amount of $3,000,000 (hereinafter called the "Series 1980 Bonds ") for the purpose of paying costs of the acquisition, construction and equipment of additional economic development facilities to be located within the boundaries of the Issuer; and WHEREAS, the Company is a corporation duly organized under the laws of the State of Indiana; and WHEREAS, the Common Council of the Issuer (hereinafter called the "Legislative Authority ") has heretofore by Ordinance No. 5240 -70 passed on October 26, 1970 and pursuant to the Act, created the South Bend Economic Development Commission (hereinafter called the "Commission ") and the members of the Commission have been duly appointed and qualified and the Commission has organized and undertaken the duties imposed upon it by the Act; and WHEREAS, the Commission has entered into negotiations with the Company concerning the providing of funds to assist in the acquisition, construc- tion and equipping of additional economic development facilities (herein- after called the "Series 1980 Project ") to be owned and operated by the Company and in connection therewith has prepared a report describing the Series 1980 Project estimating any public services which would be made necessary or desirable by the Series 1980 Project and the expense thereof, the number of jobs and estimated payroll on account of the operation of the Series 1980 Project, and the total project costs of the Series 1980 Project; -3- and stating the need for the Series 1980 Project and the capacity thereof; and WHEREAS, the Commission has submitted the .aforesaid report to the Chairman of the Commission who has formulated written comments concerning such report and within five (5) days from the receipt thereof has transmitted said comments to the Commission; and WHEREAS, the Commission has held a public hearing on the Series 1980 Project after giving not less than five (5) days notice by publication in one newspaper published or in general circulation in the City of South Bend and by posting in three (3) public places in the City of South Bend, and by resolution has theretofore found that the Project constitutes "economic development facilities" as defined in Section 2 of the Act and thus complies with the purposes and provisions of the Act and has approved the financing of the Series 1980 Project, including the form and terms of the First Supplemental Loan Agreement, the First Supplemental Mortgage, the Series 1980 Bonds and the First Supplemental Trust Indenture, all as hereinafter defined, and such resolution has been received by this Common Council; WHEREAS, the Issuer and the Company are willing to cause the Original Agreement to be amended and supplemented by the First Supplemental Agreement as hereinafter defined for the purpose of evidencing that the amounts payable under the Agreement are increased to the extent that the aggregate of the amounts payable under the Agreement shall be sufficient to make all required payments into the Bond Fund as created by said Original Bond Legislation and redesignated hereinafter for the Series 1980 Bonds; NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, that: Section 1. Public Benefits. The Legislative Authority of the Issuer hereby finds and determines that the additional real and personal property to be acquired, constructed and equipped with the proceeds of the Series 1980 Bonds herein authorized is now and will be useful to the Series 1980 -4- Project hereinafter identified and that the utilization of the property in the creation and location of the Series 1980 Project is economically sound, will promote employment opportunities within and affecting the Issuer, improve and benefit the health,. prosperity, economic stability and general welfare of the Issuer, and will encourage and promote the expansion of industry, trade and commerce within the Issuer and the State of Indiana. Section 2. Findings. The Legislative Authority hereby finds that the issuance of the Series 1980 Bonds for the purpose of financing the costs of said Series 1980 Project will be of benefit to the health, prosperity, economic stability and general welfare of the Issuer, by assisting in the reduction of the deficiency previously found to exist, to wit: insufficient employment opportunities. Section 3. Definitions. In this Series 1980 Bond Legislation and in the First Supplemental Indenture words and terms defined in the Original Bond Legislation and in the Original Indenture shall have the meanings therein prescribed unless the context otherwise indicates. The following terms shall have the meanings hereinbefore specified: Original Agreement Original Bond Legislation Original Indenture Original Mortgage In addition, the following words and terms as used in this Series 1980 Bond Legislation and in the First Supplemental Indenture shall have the following meanings unless the context or use clearly indicates another or different meaning or intent: "Bond Fund" means the Bond Fund created by Section 9 of the Original Bond Legislation. "First Supplemental Agreement" shall mean the First Supplemental Agreement, dated as of May 1, 1980, by and between the Issuer and the Company, amending and supplementing the Agreement. "First Supplemental Guaranty" means the First Supplemental Guaranty Agreement, dated as of May 1, 1980, between the Guarantor and the Trustee -5- on behalf of the bondholders, under which the Guarantor unconditionally guarantees for the benefit of the holders of the Series 1980 Bonds, the full and prompt payment of principal of and premium, if any, and interest on the Series 1980 Bonds. "First Supplemental Indenture" shall mean the First Supplemental Trust Indenture, dated as of May 1, 1980, by and between the Issuer and the Trustee, including this Series 1980 Bond Legislation as a part thereof, amending and supplementing the Indenture. "First Supplemental Mortgage" shall mean the First Supplemental Mortgage and Security Agreement dated as of May 1, 1980, from the Company to the Issuer and assigned by the First Supplemental Indenture, amending and supplementing the Mortgage. "Interest Payment Date" means, as to the Series 1980 Bonds, the first day of May, August, November and February of each year during which the Series 1980 Bonds are outstanding under the provisions of the Indenture, commencing August 1, 1980. "Original Purchasers" means, as to the Series 1980 Bonds, American Securities Bank N.A. "Project Purpose" means, as to the Series 1980 Project, a manufacturing facility to be used as a hot forging press facility. "Series 1980 Bond Legislation" means this Ordinance, as the same may be amended, modified or supplemented by any amendments or modifications hereof and supplements thereto. "Series 1980 Bonds" means the $3,000,000 aggregate principal amount of economic development revenue bonds designated "Economic Development First Mortgage Revenue Bonds, Series 1980 (South Bend Forge, Inc. Project) (ABS Industries, Inc. - Guarantor) ". "Series 1980 Construction Fund" means the trust fund created as a separate account by Section 6 hereof for the deposit of the proceeds of the Series 1980 Bonds. "Series 1980 Project" means the real, personal, or real and personal property, including undivided or other interests therein, identified in Exhibits A and B to the First Supplemental Agreement, in or pursuant to any amendments to the Agreement, and in the certificate of the Project Supervisor given pursuant to Section 3.3 of the Agreement, and acquired, constructed or installed as replacement or substitution therefor or addition thereto, and as may result from a revision of the Plans and Specifications (as defined in the Agreement) in accordance with the provisions of the Agreement. Unless the context otherwise indicates, all references to "Project" in the Original Agreement shall include the Series 1980 Project for purposes of this First Supplemental Indenture. Any reference herein to the State, to the Issuer, or to any officers thereof, shall include those succeeding to their functions, duties or responsibilities pursuant to or by operation of law or who are lawfully performing their functions. Any reference to a section or provision of the Ohio Constitution or to a section, provision or chapter of the Ohio Revised Code shall include such section or provision or chapter as from time to time amended, modified, revised, supplemented, or superseded; provided, however, that no such change in the Constitution or laws (a) shall alter the obligation to pay the Bond service charges in the amounts and manner, at the times, and from the sources provided in the Original Bond Legisla- tion, the Series 1980 Bond Legislation and the Indenture, except as other- wise herein permitted or (b) shall be deemed applicable by reason of this provision if such change would in any way constitute an impairment of the rights of the Issuer or the Company under the Agreement or the Indenture. Unless the context shall otherwise indicate, words importing the singular number shall include the plural number, and vice versa, and the terms "hereof ", "hereby ", "hereto ", "hereunder ", and similar terms, mean this Series 1980 Bond Legislation and the First Supplemental Indenture. -7- Section 4. Determinations of Legislative Authority. It is hereby determined that (a) the Series 1980 Project is an economic development facility as defined in the Act; (b) the utilization of the Series 1980 Project is in furtherance of the purposes of the Act and will benefit the people of the State by promoting the health, prosperity, economic stability and general welfare of the people of the Issuer and the State by assisting in the reduction of insufficient employment opportunities; and (c) the provision of loan assistance in the financing of costs of acquiring, constructing and equipping the Series 1980 Project, including the financing thereof, will require the issuance, sale and delivery of the Series 1980 Bonds in the principal amount of $3,000,000. Section 5. Authorization and Terms for the Series 1980 Bonds. It is hereby determined to be necessary to issue, sell and deliver, as provided and authorized herein and pursuant to the authority of the Act, $3,000,000 in aggregate principal amount of City of South Bend economic development revenue bonds, designated "Economic Development First Mortgage Revenue Bonds, Series 1980 (South Bend Forge, Inc. Project) (ABS Industries, Inc. - Guarantor) on a parity with the $6,000,000 aggregate principal amount of Project Bonds heretofore authorized by the Original Bond Legislation, for the purpose of making a loan to assist the Company in the financing of the costs of the acquisition, construction and equipping of the Series 1980 Project to be operated by the Company for the Project Purpose including costs incidental thereto and to the financing thereof. The Series 1980 Bonds shall be only issued in fully registered form in the form attached hereto as Exhibit A (which form is incorporated herein by reference and made a part hereof as if set forth in full herein) and shall be dated as of May 1, 1980 with interest paid from the date of their delivery and shall be numbered as determined by the Fisacl Officer. Series 1980 Bonds in fully registered form shall be in the denomination of $20,000 or any integral multiple thereof. The Series 1980 Bonds shall mature, bear interest and be payable as to principal and interest as set forth in such form of the Series 1980 Bond attached hereto. The Series 1980 Bonds are subject to special mandatory redemption upon a final determination that interest on the Series 1980 Bonds is wholly includable for federal income tax purposes in the gross income of the holders of the Series 1980 Bonds (other than because a holder is a "substantial user" of the Series 1980 Project or a "related person" as those terms are used in Section 103(b)(9) of the Internal Revenue Code of 1954). As used herein, "final determination" shall be deemed to have occurred upon the receipt by the Trustee of a ruling or technical advice by the Internal Revenue Service in which the Company has participated or a written opinion by an attorney or firm of attorneys of recognized standing on the subject of municipal bonds selected by the Trustee, and approved by the Company, which approval shall not be unreasonably withheld. Following a final determination the Series 1980 Bonds shall be redeemed in whole by the Issuer at a redemption price of 100% of the aggregate principal amount outstanding plus accrued interest, at the earliest practicable date selected by the Trustee, after consultation with the Company, but in no event later than 180 days following the Trustee's notification of such final determination. In the event that such redemption is a result of the Company's failure to observe its agreement in Section 3.2 of the First Supplemental Agreement, the redemption price shall be increased by an additional amount equal to 10% of the aggregate principal amount of the Series 1980 Bonds outstanding at the time of such failure. All of the Series 1980 Bonds outstanding on the redemption date selected shall be redeemed by the Issuer on such date, except that Series 1980 Bonds maturing on or prior to such redemption date, but after the aforesaid selection of a redemption date, shall be retired on their maturity date at the same redemption price as if they had been called for redemption on such redemption date, and Series 1980 Bonds for the payment of redemption of which sufficient moneys or investments are held by the Trustee as provided in Section 8.02 of the Indenture shall be redeemed on the redemption date, or paid at earlier maturity, in accordance with this paragraph and not otherwise. The Series 1980 Bonds are subject to original redemption by the Issuer at the request of the Company, prior to stated maturity in whole, on any Interest Payment Date at a redemption price of 100% of the principal amount to be so redeemed plus accrued interest to the redemption date. If less than all of the outstanding Series 1980 Bonds are called for redemption at one time, such Series 1980 Bonds, or portions of fully registered Series 1980 Bonds, shall be called on a pro rata basis among the bondholders in inverse order of the principal installments due. Notice of the call for redemption of Series 1980 Bonds, or portions thereof, identifying the amount to be redeemed, the redemption price to be paid, the date fixed for redemption and the place where the amounts due upon such redemption are payable, shall be given by the Trustee on behalf of the Issuer by mailing a copy of the redemption notice by certified mail at least five (5) days prior to the date fixed for redemption to the registered holders of the Series 1980 Bonds. Bond service charges on the Series 1980 Bonds shall be payable to the bondholders, without deduction for services of any Paying Agent by check mailed by the Trustee to the registered bondholders at the address shown on the list of bondholders maintained pursuant to Section 11(f) hereof. The Series 1980 Bonds shall be executed on behalf of the Issuer with the manual or facsimile signature of the Executive of the Legislative Authority of the Issuer, shall bear the seal of the Issuer or a facsimile thereof and shall be attested to with the manual or facsimile signature of the Fiscal Officer of the Legislative Authority, provided that at least one of such signatures shall be manual. - 10 - Section 6. Sale of Series 1980 Bonds and Allocation of Purchase Price; Construction Fund. The Executive and Fiscal Officer are hereby authorized and directed to offer for sale the Series 1980 Bonds to the Original Purchasers in accordance with their written offers therefor. The Executive further is hereby authorized and directed to make the necessary arrangements on behalf of the Issuer with the Original Purchasers to establish the date, location, procedure and conditions for the delivery of the Series 1980 Bonds to the Original Purchasers. The Executive and Fiscal Officer further are hereby authorized and directed to take all steps necessary to effect due authentication, delivery and security of the Series 1980 Bonds under the terms of this Series 1980 Bond Legislation and the Indenture and it is hereby determined that the price for and the terms of the Series 1980 Bonds and the manner of sale, as provided in this Bond Legislation are in the best interest of the Issuer and consistent with all legal requirements. The Fiscal Officer shall furnish to the Trustee a true transcript, certified by him, of all proceedings had with reference to the issuance of the Series 1980 Bonds along with such information for the records as is necessary to determine the regularity and validity of the issuance of the Series 1980 Bonds. There is hereby created by the Issuer and ordered maintained as a separate deposit account (except when invested as hereinafter provided) in the custody of the Trustee a trust fund to be designated "City of South Bend - South Bend Forge, Inc. Series 1980 Construction Fund" (herein called the "Series 1980 Construction Fund "). All of the proceeds of the Series 1980 Bonds shall be allocated, deposited, and credited to the Series 1980 Construction Fund. Moneys in the Series 1980 Construction Fund may be invested as provided Eligible Investments, as defined in the Original Indenture. Moneys in the Series 1980 Construction Fund shall be disbursed by the Trustee in accordance with the provisions of the Agreement. - 11 - The moneys to the credit of the Series 1980 Construction Fund shall, pending application thereof as set forth, be subject to a lien and charge in favor of the holders of the Series 1980 Bonds, but only to the extent of their interest therein. Section 7. Source of Payment - Terms and Conditions. Pursuant to the provisions of this Series 1980 Bond Legislation and the Original Bond Legislation the Pledged Receipts shall be set aside, deposited and expended in ,;the manner provided in the Original Bond Legislation. The Series 1980 Construction Fund and Bond Fund shall be maintained, invested and used as provided in said Original Bond Legislation and this Series 1980 Bond Legislation. Section 8. Covenants of the Issuer. The Issuer will restrict the use of the proceeds of the Series 1980 Bonds in such manner and to such extent, if any, as may be necessary, after taking into account reasonable expectations at the time of the delivery of and payment for such Series 1980 Bonds, so that the Series 1980 Bonds will not constitute arbitrage bonds under Section 103(c) of the Code and the regulations prescribed under that Section. The Fiscal Officer, or any other officer having responsi- bility for issuing the Series 1980 Bonds, is authorized and directed, alone or in conjunction with any of the foregoing or with any other officer, employee, consultant or agent of the Issuer, or any officer of the Company, to give an appropriate certificate of the Issuer, for inclusion in the transcript of proceedings for the Series 1980 Bonds, setting forth the reasonable expectations of the Issuer regarding the amount and use of the proceeds of the Series 1980 Bonds and the facts and estimates on which they are based, such certificate to be premised on the reasonable expectations of the Company and the facts and estimates on which they are based as certified by the Company, all as of the date of delivery and payment for such Series 1980 Bonds, pursuant to said Section 103(c) and regulations thereunder. - 12 - It is further determined and acknowledged that the Series 1980 Bonds are being issued pursuant to the terms of the Original Bond Legislation and the terms of this Series 1980 Bond Legislation are subject to all the terms and conditions of the Original Bond Legislation; and all terms and conditions, and covenants and warranties contained in the Original Bond Legislation except as otherwise provided herein shall apply with like force and effect to the Series 1980 Bonds as if originally made in connection therewith. This Legislative Authority hereby elects to have the limitation on capital expenditures specified in Section 103(b)(6) of the Internal Revenue Code of 1954 applied to the Series 1980 Bonds, and the execution and filing with the Internal Revenue Service of a statement regarding such election, as provided by the rules and regulations of the Internal Revenue Service, by the Executive, the Fiscal Officer or the Clerk of this Legislative Authority is hereby authorized, approved, ratified and affirmed. Section 9. First Supplemental Indenture and First Supplemental Agreement. In order to better secure the payment of the Bond service charges as the same shall become due and payable, the Executive and the Fiscal Officer are hereby authorized and directed to execute, acknowledge and deliver the First Supplemental Indenture and the First Supplemental Agreement and to accept and assign the First Supplemental Mortgage, in substantially the forms submitted to the Issuer, which instruments are hereby approved, with such changes therein not inconsistent with this Series 1980 Bond Legislation and not substantially adverse to the Issuer, as may be permitted by the Act and approved by the officers executing the same on behalf of the Issuer. The approval of such changes by said officers, and that such are not substantailly adverse to the Issuer, shall be conclusively evidenced by the execution of the First Supplemental Indenture and the First Supplemental Agreement, respectively, by such officers. - 13 - This Series 1980 Bond Legislation shall constitute a part of the First Supplemental Indenture and the Indenture, as amended and supplemented by the First Supplemental Indenture as therein provided, and for all purposes of the Indenture, including, without limitation thereto, application to this Series 1980 Bond Legislation of the provisions in the Indenture, relating to amendment, modification and supplementation, and provisions for severability. Section 10. Other Documents. The Executive and Fiscal Officer, as appropriate, are further authorized and directed to execute such certificates, financing staetments, assignments and instruments as are in the opinion of the Legal Officer and bond counsel necessary to perfect the pledges set forth in the Indenture, and to consummate the transactions provided for in the First Supplemental Indenture, the First Supplemental Mortgage and the First Supplemental Agreement. Section 11. Effective Date. This Series 1980 Bond Legislation shall be in full force and effect from and after its passage by the Common Council and approved by the Mayor. 1st READING ''-'— PUBLIC HEARING 2nd READING NOT APPROVED REFERRED PASSED - 14 - LOUnciiman Irene Gammon CITY CLERK, SOUTH BEND, IND. EXHIBIT A State of Indiana City of South Bend Economic Development First Mortgage Revenue Bond, Series 1980 (South Bend Forge, Inc. Project) (ABS Industries, Inc. - Guarantor) The City of South Bend (hereinafter called the "Issuer "), a municipal corporation and political subdivision in the County of St. Joseph and the State of Indiana (hereinafter referred to as the "State "),for value received, promises to pay to American Securities Bank N.A., or registered assigns, but solely from the sources and in the manner hereinafter re- ferred to, the.principal sum of Three Million Dollars and to pay from said sources interest on the unpaid balance of the princi- pal sum hereof from and after the date of initial delivery of this Bond at the rate or rates hereinafter provided, on the first day of each August, November, February, and May, commencing August 1, 1980. Principal shall be payable in eighteen (18) consecutive installments on the first day of each August, November, February, and May, commencing November 1, 1980 until paid in full, with the final installment due and payable on May 1, 1985, subject to the conditions hereinafter set forth with respect to mandatory and optional redemption by the Issuer prior to payment in full of said principal sum. Principal of and interest on this Bond are payable in lawful money of the United States of America, without deduction for the services of the paying agent, by check or draft to the registered holders at the addresses as they appear on the registration books of the Issuer and upon presentation and surrender upon the final payment of principal and interest at the principal corporate trust office of the Trustee, presently First Bank and Trust Company of South Bend. The Series 1980 Bonds will bear interest at a rate of eighteen percent (18 %) per annum, provided that with the consent of the holder of this Bond, interest payable on the principal sum from time to time outstanding shall be adjusted from time to time so that such rate is at all times equal to sixty -eight percent (68 %) of National City Bank's Prime Rate. As used herein, National City Bank's "Prime Rate" shall mean the base rate, by whatever name then denoted, as announced and generally applied from time to time by National City Bank for 90 days commercial loans in Cleveland, Ohio, to borrowers of the highest credit standing, which base rate of interest shall be adjusted automatically as of the opening of business on the effective date of any change therein. Interest shall be calculated on the basis of a 360 day year, but computed on the actual number of days outstanding. On the tenth business day next preceding an Interest Payment Date (as that term is defined in the First Supplemental Agreement) (the "Notice Date "), the Trustee shall give the Company and all registered holders of the Series 1980 Bonds written notice of the amount of interest payable on such Interest Payment Date. Such written notice shall state the various rates of interest applied during the preceding quarter and the number of days to which each of the respective rates of interest were applied. Interest for the period commencing on any Notice Date and ending on such subsequent Interest Payment Date shall be fixed and calculated at the aforementioned tax - exempt interest rate then in effect on such Notice Date. This Bond is one of a duly authorized issue of Economic Development First Mortgage Revenue Bonds, Series 1980 (South Bend Forge, Inc. Project) (ABS Industries, Inc. - Guarantor) (hereinafter called the "Series 1980 Bonds "), issuable under the Trust Indenture described below, aggregating in principal amount $3,000,000 and issued for the purpose of making a loan to assist South Bend Forge, Inc. (hereinafter called the "Company ") in the financing of costs of constructing, equipping and improving real and personal property comprising a manufacturing facility within the boundaries of the Issuer to be constructed and owned by the Company to be used as a hot forging press facility and related uses (hereinafter, and in the Indenture, called the "Series 1980 Project "), pursuant to a Loan Agreement duly made and entered into between the Issuer and the Company dated-as of July 1, 1979, as amended and supplemented by the First Supplemental Loan Agreement, dated as of May 1, 1980 (hereinafter referred to as the "First Supplemental Agreement" and collectively with said Loan Agreement, as amended and supplemented, as the "Agreement "), in order to promote the health, prosperity, economic and general welfare of the Issuer. The loan made pursuant to the Agreement, as originally funded with the proceeds of an issue of Economic Development First Mortgage Revenue Bonds (South Bend Forge, Inc. Project) (ABS Industries, Inc. - Guarantor) aggregating in principal amount of $6,000,000 (hereinafter referred to as the "Project Bonds "), and additionally funded with the proceeds of the Series 1980 Bonds, is hereinafter referred to as the "Loan ". Pursuant to the First Supplemental Agreement, the Company has agreed to make payments in the amounts and at the times necessary to meet the principal, premium and interest requirements on the Series 1980 Bonds. Payment of the principal of and premium, if any, and interest on the Series 1980 Bonds has been unconditionally guaranteed by ABS Industries, Inc., (hereinafter, together with its successors and assigns, referred to as the "Guarantor ") pursuant to a Guaranty Agreement dated as of July 1, 1979, as amended and supplemented by a First Supplemental Guaranty Agreement, duly made and entered into between the Guarantor and the Trustee for the benefit of the holders of the Project Bonds and the Series 1980 Bonds. The Series 1980 Bonds, together with any outstanding Project Bonds and any further additional Bonds as may be issued on a parity therewith under the Indenture (the Project Bonds, the Series 1980 and any such additional Bonds are hereinafter collectively called the "Bonds "), are issued or to be issued under and are to be equally and ratably secured and entitled to the protection given by the Trust Indenture, dated as of July 1, 1979, as amended and supplemented by the First Supplemental Trust Indenture, dated as of May 1, 1980 (hereinafter, as amended and supplemented, collectively referred to as the "Indenture ") between the Issuer and the above -named Trustee. The term "Trustee" as used herein refers to said Trustee or any successor Trustee appointed pursuant to the Indenture. The Indenture and the Mortgage hereafter described are on file in the offices of the Issuer and the Trustee, and are recorded with the Recorder of St. Joseph County, Indiana, and reference is hereby made to both for a more complete 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 Trustee and the holders of the Bonds and the terms and conditions upon which the Bonds are issued and secured, to all of the provisions of which Indenture and Mortgage, each holder, by the acceptance hereof, assents. The Company's obligations under the Agreement are further secured by the Mortgage and Security Agreement, dated as of July 1, 1979, as amended and supplemented by the First Supplemental Mortgage and Security Agreement, dated as of May 1, 1980 (hereinafter referred to as the "First Supplemental Mortgage" and collectively with said Mortgage and Security Agreemnet, as amended and supplemented, as the "Mortgage ") between the Company, as mortgagor, and the Issuer, as mortgagee. By the Indenture, the Issuer has assigned all of its rights, title and interest in and to the Mortgage to the Trustee as security for the payment of the principal of and premium, if any, and interest on the Bonds. - 2 - The Series 1980 Bonds are issued pursuant to the Constitution and to the laws of the State, particularly Indiana Code of 1971, Title 18, Article 6, Chapter 4.5 and the authorities therein mentioned, and an ordinance duly passed by the Issuer. The Bonds are special obligations of the Issuer, and the principal of and interest and any premium on the Bonds (hereinafter collectively called "Bond service charges) are payable solely from, and such payment is secured by a pledge of an lien on, the Bond Fund established by and as provided in the Indenture and the "Pledged Receipts" as defined and as provided for in the Indenture (being, generally, the payments and other amounts payable under the Agreement and the income and profit from the invest- ment of such payments), and are not otherwise an obligation of the Issuer. The Bonds do not represent or constitute a debt, liability or general obliga- tion of the Issuer, the State or any political subdivision thereof, or a pledge of the faith and credit or taxing power of the Issuer or of the State or of any such political subdivision. Payments sufficient for the prompt payment when due of the Bond service charges is required by the Agreement to be paid by the Company to the Trustee for the account of the Issuer and deposited in a special account created by the Issuer and designated "City of South Bend - South Bend Forge, Inc. Revenue Bond Fund ", and have been duly pledged for that purpose. The Series 1980 Bonds are issuable as fully registered bonds in denominations of $20,000 and any integral multiple thereof. This Bond is transferable by the registered holder hereof in person or by his attorney duly authorized in writing at the corporate trust office of the Trustee as Bond Registrar, upon presentation hereof to the Trustee, all subject to the terms and conditions provided in the Indenture. The holder hereof agrees with the Company not to transfer this Bond without obtaining the prior written consent hereon of any such transferee, whereby such transferee accepts the terms and conditions hereof. This Bond is subject to mandatory redemption upon a final determination that, interest on the Series 1980 Bonds is wholly includable for Federal income tax purposes in the gross income of the holders of the Series 1980 Bonds (other than because a holder is a "substantial user" of the Project or a "related person ", as those terms are used in Section 103(b)(9) of the Internal Revenue Code of 1954). As used herein, "final determination" shall be deemed to have occurred upon the receipt by the Trustee of a ruling or technical advice by the Internal Revenue Service in which the Company has participated or a written opinion by any attorney or firm of attorneys of recognized standing on the subject of municipal bonds selected by the Trustee, and approved by the Company, which approval shall not be unreasonably withheld. Following such final determination the Series 1980 Bonds shall be redeemed in whole by the Issuer at a redemption price of 100% of the aggregate principal amount outstanding, plus accrued interest, at the earliest practicable date selected by the Trustee, after consultation with the Company, but in no event later than 180 days following the Trustee's notification of such final determination. In the event that such redemption is a result of the Company's failure to observe its agreement in Section 6.4 of the Agreement, the redemption price shall be increased by an additional amount equal to 10% of the aggregate principal amount of the Series 1980 Bonds outstanding at the time of such failure. This Bond and any principal installment hereof is subject to optional redemption at the request of the Company prior to the date due and payable on any interest payment date from and after issuance. If called for redemption the entire outstanding balance of the principal sum of this Bond or any install- ment of principal shall be subject to redemption by the Issuer on any interest payment date, at a redemption price of 100% of the principal amount to be so redeemed, plus accrued interest to the redemption date. If less than all of the outstanding Series 1980 Bonds are called for redemption at one time, the Series 1980 Bonds or portions of fully registered Series 1980 Bonds shall be called on a pro rate basis among the bondholders shall be in inverse order of principal installments due. - 3 - Unless a written waiver of such notice is received by the Trustee, notice of the call for redemption of this Bond, or portions thereof, identifying the amount to be redeemed, the redemption price to be paid, the date fixed for redemption and the place where the amounts due upon such redemption are payable, shall be given by the Trustee on behalf of the Issuer by mailing a copy of the redemption notice by certified mail at least five (5) days prior to the date fixed for redemption to the registered holders of the Series 1980 Bonds. Except as provided in the Indenture, the holders or registered owners of the Bonds are not entitled to enforce the provisions of the Indenture or to institute, appear in or defend any suit, action or proceeding to enforce any provisions of the Indenture or to take any action with respect to any event of default under the Indenture. The Indenture permits certain amendments, changes or modifications of the Agreement, the Indenture and the Mortgage not prejudicial to the holders of the Bonds, to be made with the consent of the Trustee, but without the consent of or notice to the holders of the Bonds and other amendments, changes or modifications thereof (with certain exceptions as provided in the Indenture) to be made with the consent of the holders as provided for in the Indenture. If an event of default, as defined in the than an event of default as defined in Section the principal of Bonds then outstanding may be the manner and with the effect provided by the waiver of such event of default or rescission provided in the Indenture. Indenture, shall occur (other 6.01(c) of the Indenture), declared due and payable in Indenture, but subject to if such declaration as This Bond shall not constitute the personal obligation, either jointly or severally, of the members of the Common Council, or the officers, of the Issuer. This Bond shall not be entitled to any security or benefit under the Indenture or become valid or obligatory for any purpose until the certificate of authentication hereon shall have been signed by the Trustee. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things necessary to be done or performed by the Issuer or to have happened precedent to and in the issuing of the Series 1980 Bonds in order to make them legal, valid and binding special obligations of the Issuer in accordance with their terms, and precedent to and in the execution and delivery of the Indenture and Agreement have been done and performed and have happened in regular and due form as required by law; that payment in full for the Series 1980 Bonds has been received; and that the Series 1980 Bonds do not exceed or violate any constitutional or statutory limitation. IN WITNESS WHEREOF, the City of South Bend, in the County of St. Joseph and the State of Indiana has caused this Bond to be executed in the name of the Issuer by the manual signature of its Mayor and of the corporate seal of the Issuer to be affixed hereto or impressed hereon and attested by the manual signature of the Clerk of the said City, all as of the lst day of May, 1980. Attest: Clerk [Seal] CITY OF SOUTH BEND, INDIANA Bv: Mayor VOOR, MCMICHAEL, ALLEN, FEDDER 8 HERENDEEN WILLIAM E.VOOR ATTORNEYS 8 COUNSELORS AT LAW GUY H. MC MICHAEL LLOYD M. ALLEN 300 FIRST BANK BUILDING KENNETH P. FEDDER SOUTH BEND, INDIANA 46601 GEORGE E.HERENDEEN ANTHONY D. KOWALS May 7, 1980 Members of the South Bend Common Council County -City Building South Bend, Indiana 46601 RE: Revenue Bond Application (South Bend Forge Inc.) Dear Councilmen: AREA CODE 219 234 -6061 OF COUNSEL: WILLIAM O. JACKSON The South Bend Economic Development Commission has received an application from SOUTH BEND FORGE INC., for a Revenue Bond in the amount of Three Million Dollars ($3,000,000.00), to finance the expansion of its existing Economic Development facility locat- ed at South Bend Airport Industrial Park, South Bend, Indiana, and to purchase and install certain machinery therein. It :is anticipated that the new facility will create and additional employment of approximately 13 jobs with an estimated payroll in excess of $170,000.00. It is properly zoned and it will be a further expansion of business facilities in our South Bend area. spectfu y, K NNETH P. EDDER ATTORNEY FOR THE SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION KPF,Ilb� p� r0 b ® f0n