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HomeMy WebLinkAboutAuthorizing Issurance $6,000,000 Economic Development First Mortgage Revenue Bonds - South Bend Forge IncORDINANCE No 6622 -79 Passed by the Common Council of the City of South Bend, Indiana_ st 13 19 79 IRENE K. GAMMON City Clerk of Common Council Presented by me to the Mayor of the City of South Bend, Indiana - August 14 zg 79 IRENE K. GAMMON Approved and signed by me 6L, e, I,--, X- , --, /'71 City Clerk GENERAL ORDINANCE NO. 642 .79 AN ORDINANCE AUTHORIZING THE ISSUANCE OF $6,000,000 ECONOMIC DEVELOPMENT FIRST MORTGAGE REVENUE BONDS OF THE CITY OF SOUTH BEND, INDIANA, FOR THE PURPOSE OF MAKING A LOAN TO ASSIST SOUTH BEND FORGE, INC. IN ACQUIRING, CONSTRUCTING AND EQUIPPING REAL AND PERSONAL PROPERTY COMPRISING ECONOMIC DEVELOPMENT FACILITIES LOCATED WITHIN THE BOUNDARIES OF THE 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; AUTHORIZING THE ISSUANCE OF ADDITIONAL BONDS; PROVIDING FOR THE PLEDGE OF REVENUES AND RECEIPTS FOR THE PAYMENT OF SAID BONDS; AUTHORIZING A TRUST INDENTURE APPROPRIATE FOR THE PROTECTION AND DISPOSITION OF SUCH REVENUES AND RECEIPTS AND TO FURTHER SECURE THE PAYMENT OF AND ANY PREMIUM AND INTEREST ON SAID BONDS; AND AUTHORIZING THE ACCEPTANCE OF A MORTGAGE AND SECURITY AGREEMENT AND AN ASSIGNMENT THEREOF TO PROVIDE FURTHER SECURITY FOR THE PAYMENT OF SAID BONDS. STATEMENT OF PURPOSE AND INTENT: 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 "economic development facilities" as those words are defined in the Act to be owned and operated by the Company; and WHEREAS, the Issuer proposes to finance the costs of economic development facilities as authorized facilities under said Act by the issuance of revenue bonds of the Issuer; and WHEREAS, pursuant to and in accordance with the provisions of the Act, the Issuer has agreed to enter into a loan agreement with the Company for the purpose of providing funds to assist in the financing of the cost of acquiring, constructing and equipping economic development facilities, including all machinery and other equipment required for said facilities all to be located within the City of South Bend, Indiana; and WHEREAS, the execution and delivery of a Trust Indenture (hereinafter referred to as the "Indenture "), and the issuance of revenue bonds under said Act as herein provided have been in all respects duly and validly authorized by proceedings duly passed on and approved by the Issuer; and WHEREAS, it has been determined that the estimated amount necessary to finance the costs of such facilities, including necessary expenses incidental thereto, will require the issuance, sale and delivery of the Issuer's Economic Development First Mortgage Revenue Bonds (South Bend Forge, Inc. Project) (ABS Industries, Inc. - Guarantor) in the aggregate principal amount of six million dollars ($6,000,000) (herein referred to as the "Project Bonds ") all as set forth and declared in the Bond Legislation; and WHEREAS, the Act further authorizes the Issuer to (a) enter into a loan agreement and to accept security interests to evidence and secure such indebtedness and to provide for 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, (b) to secure such revenue bonds by a trust indenture and by a pledge and assignment of revenues, as provided for herein, and (c) to enact this Bond Legislation and enter into the Trust Indenture, the Loan Agreement and the acceptance and assignment of the Mortgage, all as hereinafter defined, upon the terms and conditions provided therein; 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 - 2 - Company concerning the providing of funds to assist in the acquisition, construction and equipping of economic development facilities (hereinafter called the "Project ") to be owned and operated by the Company and in connection therewith has prepared a report describing the Project estimating any public services which would be made necessary or desirable by the Project and the expense thereof, the number of jobs and estimated payroll on account of the operation of the Project, and the total project costs of the Project; and stating the need for the 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 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 Project, including the form and terms of the Loan Agreement, the Project Bonds and the Trust Indenture, all as hereinafter defined, and such resolution has been received by this Common Council; 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 real and personal property to be acquired, constructed and equipped with the proceeds of the Project Bonds herein authorized is now and will be useful to the Project hereinafter identified and that the utilization of the property in the creation and location of the Project is economically sound, will promote employment - 3 - 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 Project Bonds for the purpose of financing the costs of said 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 addition to the words and terms elsewhere defined in this Bond Legislation, the following words and terms as used in this Bond Legislation and in the Indenture shall have the following meanings unless the context or use indicates another or different meaning or intent: "Act" means the Municipal Economic Development Act of 1965, as amended (Indiana Code of 1971, Title 18, Article 6, Chapter 4.5). "Additional Bonds" means Bonds of the Issuer which may be issued under Section 10 of this Bond Legislation and pursuant to Section 2.08 of the Indenture. "Agreement" means the Loan Agreement between the Issuer and the Company, dated as of July 1, 1979, as it may be amended, modified or supplemented in accordance with the applicable provisions thereof. "Bond" or "Bonds" means the Project Bonds and any Additional Bonds. "Bond Fund" means the Bond Fund created by Section 9 hereof. "Bondholder" or "holder" or "holder of Bonds" means the person in whose name a registered Bond is registered. - 4 - "Bond Legislation" means (i) when used with reference to the Project Bonds, this ordinance; (ii) when used with reference to an issue of Additional Bonds, this ordinance to the extent applicable and the legislation providing for the issuance of such Additional Bonds; and (iii) when used with reference to Bonds when Additional Bonds are outstanding, this ordinance and the legislation providing for the issuance of Additional Bonds; all as the same may from time to time be lawfully amended, modified or supplemented. "Bond service charges" for any time period means the principal, interest, and redemption premium, if any, required to be paid by the Issuer on the Bonds for such time period. "Commission" means the South Bend Economic Development Commission, created by Ordinance No. 5240 -70 of the Legislative Authority passed on October 26, 1970. "Company" means South Bend Forge, Inc., a corporation duly organized and existing under the laws of the State of Indiana, and its lawful successors and assigns. "Construction Fund" means the Construction Fund created by Section 8 hereof. "Eligible Investments" means (i) obligations issued or guaranteed by the United States or by any person controlled or supervised by and acting as an instrumentality of the United States pursuant to the authority granted by Congress, (ii) obligations issued or guaranteed by any state or political subdivision thereof rated A or higher by Moody's Investors Service, Inc. or by Standard & Poor's Corporation, both of New York, New York, or their successors; (iii) commercial or finance paper, including that of an affiliate of the Trustee, which is rated either P -1 or A -1 or an equivalent by Moody's Investors Service, Inc. or Standard & Poor's Corporation, both of New York, New York, or their successors; (iv) bankers' acceptances drawn on and - 5 - accepted by commercial banks; (v) certificates of deposit of banks or trust companies, including the Trustee or any commercial bank affiliated with the Trustee, organized under the laws of the United States of America or any state thereof, having a reported capital and surplus of at least $10,000,000 in dollars of the United States of America; and (vi) repurchase agreements, including those purchased from and through the Trustee, fully secured by obligations of the type specified in (i) above; provided that any such investment or deposit is not prohibited by applicable law. "Executive" means the Mayor of the Issuer. "Fiscal Officer" means the Clerk of the Issuer. "Guarantor" means ABS Industries, Inc., an Ohio corporation, and its lawful successors and assigns, including surviving, resulting or transferee corporations. "Guaranty" means the Guaranty Agreement between the Guarantor and the Trustee on behalf of the Bondholders, dated as of July 1, 1979 with respect to the Project Bonds, as the same may be duly amended, modified or supplemented in accordance with the provisions thereof. "Indenture" means the Trust Indenture between the Issuer and the Trustee, dated as of July 1, 1979, including this Bond Legislation as part thereof, as the same may be duly amended, modified or supplemented in accordance with the provisions thereof. "Interest Payment Date" means the first day of each October, January, April and June, commencing October 1, 1979. "Issuer" means the City of South Bend, a municipal corporation and Political subdivision organized and existing under the Constitution and laws of the State of Indiana, and its lawful successors. "Legal Officer" means the Counsel to the Issuer. "Legislative Authority" means the Common Council of the Issuer. "Loan" means the loan by the Issuer to the Company of the proceeds from the sale of the Project Bonds. "Loan Payments" means the amounts required to be paid by the Company pursuant to the provisions of Section 4.1 of the Agreement in repayment of the Loan. "Mortgage" means the Mortgage and Security Agreement, dated as of July 1, 1979, executed and delivered by the Company to the Issuer and assigned by the Indenture to the Trustee, as the same may be duly amended, modified or supplemented from time to time in accordance with the provisions thereof. "Original Purchasers" means, as to the Project Bonds, Morgan Guaranty Trust Company of New York, New York, New York, National City Bank, Cleveland, Ohio, Central National Bank of Cleveland, Cleveland, Ohio, First Bank and Trust Company of South Bend and Farmers Bank and Trust Company of Ashtabula, Ohio and as to Additional Bonds the person or persons identified as such in the applicable Bond Legislation providing for the issuance of such Additional Bonds. "Outstanding Bonds" or "Bonds outstanding" or "outstanding" as applied to Bonds, means, as of any date, all Bonds which have been authenticated and delivered by the Trustee under the Indenture except: (a) Bonds surrendered for and replaced upon exchange or transfer, or cancelled because of payment or redemption prior to maturity, at or prior to such date; (b) Bonds for the payment, redemption or purchase for cancellation of which sufficient moneys have been deposited prior to such date with the Trustee (whether upon or prior to the maturity or redemption date of any such Bonds), or which are deemed to have been paid and discharged pursuant to the provisions of the Indenture; provided that if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given or arrangements to the reasonable satisfaction of the - 7 - Trustee shall have been made therefor, or waiver of such notice satisfactory in form to the Trustee shall have been filed with the Trustee; and (c) Bonds in lieu of which others have been authenticated (or payment, when due, of which is made without replacement) under Section 2.05 of the Indenture. "Paying Agent" means, as to the Project Bonds, the Trustee and, as to Additional Bonds, any bank or trust company designated as such by or pursuant to the applicable Bond Legislation, and their successors designated pursuant to the Indenture. "Person" means a natural person, firm, association, corporation or a public body. "Pledged Receipts" means (a) the Loan Payments, (b) subject to the provisions of Sections 3.04 and 8.02 of the Indenture with respect to the Trustee holding moneys for the benefit of the holders of particular Bonds, all other moneys received by the Issuer, or the Trustee for the account of the Issuer, in respect of repayment of the Loan, (c) unexpended moneys in the Construction Fund and (d) the income and profit from the investment of the Loan Payments and such other moneys. "Project" means, collectively, (a) the real estate at the time comprising the "Project Site ", as defined in the Agreement and (b) the real, personal, or real and personal property at the time comprising the "Project Facilities" as defined in the Agreement. "Project Bonds" means the Economic Development First Mortgage Revenue Bonds authorized in Section 5 hereof. "Project Purpose" means constructing, equipping and improving real and personal property comprising a manufacturing facility to be used as a hot forging press facility such related or subsequent uses as are permitted by the Agreement. "Registered Bonds" means Bonds without coupons registered as to both principal and interest. "State" means the State of Indiana. "Trustee" means the trustee under the Indenture, originally First Bank and Trust Company of South Bend, and any successor Trustee as determined or designated under or pursuant to the Indenture. Any reference herein to the Issuer, to the Legislative Authority, or to any officers thereof, shall include those which succeed 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, provision or chapter of the Indiana Code shall include such section or provision or chapter as from time to time amended, modified, revised, supplemented, or superseded, provided that no such amendment, modification, revision, supplementation, or supersession shall alter the obligation to pay the Bond service charges in the amount and manner, at the times, and from the sources provided in the Bond Legislation and the Indenture, except as otherwise herein permitted. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. 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 Bond Legislation and the Indenture. Section 4. Determinations of Legislative Authority. It is hereby determined that (a) the Project is an economic development facility as defined in the Act; (b) the utilization of the 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 constructing, equipping and improving - 9 - the Project, including the financing thereof, will require the issuance, sale and delivery of the Project Bonds in the principal amount of $6,000,000, and hereafter may require the Issuer's best efforts to issue, sell and deliver Additional Bonds on a parity therewith, all of which Bonds shall be equally and ratably payable and secured as provided herein and in the Indenture. Section 5. Authorization and Terms of Project Bonds. It is hereby determined to be necessary to, and the Issuer shall, issue, sell and deliver, as provided and authorized herein and pursuant to the authority of the Act, $6,000,000 aggregate principal amount of Project Bonds for the purpose of making a loan to assist the Company in the financing of costs of constructing, equipping and improving the Project for the Project Purpose. The Project Bonds shall be designated "Economic Development First Mortgage Revenue Bonds (South Bend Forge, Inc. Project) (ABS Industries, Inc. - Guarantor) ". The Issuer may also issue, sell and deliver Additional Bonds on a parity with the Project Bonds for the purposes and in the manner provided in Section 10 of this Bond Legislation. The Project 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 July 1, 1979 with interest paid from the date of their delivery and shall be numbered as determined by the Fiscal Officer. Project Bonds in fully registered form shall be in the denomination of $20,000 or any integral multiple thereof. The Project Bonds shall mature, bear interest and be payable as to principal and interest as set forth in such form of the Project Bond attached hereto. The Project Bonds are subject to special mandatory redemption upon a final determination that interest on the Project Bonds is wholly includable for federal income tax purposes in the gross income of the holders of the Project Bonds (other than because a holder is a "substantial user" of the - 10 - Project or a "related person" as those terms are used in Section 103(b)(8) 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 participted 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 Project 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 Project Bonds outstanding at the time of such failure. All of the Project Bonds outstanding on the redemption date selected shall be redeemed by the Issuer on such date, except that Project 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 Project Bonds for the payment or 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 Project Bonds are subject to optional 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 Project Bonds are called for - 11 - redemption at one time, such Project Bonds, or portions of fully registered Project 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 Project 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 Project Bonds. Bond service charges on the Project 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 Project 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. Section 6. Terms of all Bonds. All Bonds shall bear such designations as may be necessary to distinguish them from Bonds of any other series. Bond service charges on all Bonds shall be payable in lawful money of the United States of America. All Bonds shall be negotiable instruments, subject to applicable provisions for transfer and registration, and shall express on their faces the purpose for which they are issued and such other statements or legends as may be required by law. All Bonds shall be executed in the manner provided in the Bond Legislation authorizing their issuance or in the manner provided by the - 12 - applicable law in effect at the time of their issuance. In case any officer whose signature or a facsimile of whose signature shall appear on any Bonds shall cease to be such officer before the issuance, authentication or delivery of such Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes, the same as if he had remained in office until that time. Unless otherwise provided in the Bond Legislation authorizing the issuance of Additional Bonds, notice of call for redemption of all Bonds shall be given in the manner provided in Section 5 hereof for the notice of call for redemption of the Project Bonds. If Bonds or portions of fully registered Bonds are duly called for redemption and if on such redemption date moneys for the redemption of all the Bonds to be redeemed, together with accrued interest to the redemption date, shall be held by the Trustee or Paying Agents so as to be available therefor, then from and after such redemption date such Bonds or portions of fully registered Bonds shall cease to bear interest. As provided herein, the Bonds shall be equally and ratably (i) payable solely from the Pledged Receipts and (ii) secured by a pledge of and lien on moneys deposited in the Bond Fund, a pledge and assignment of other moneys constituting Pledged Receipts and by the Indenture, including the assignment of the Agreement and the mortgage lien credited by the Mortgage. Anything in the Bond Legislation, the Bonds or the Indenture to the contrary notwithstanding, neither the Bond Legislation, the Bonds, nor the Indenture shall constitute a debt or a pledge of the faith and credit of the Issuer, and the Bonds shall contain on the face thereof a statement to that effect and that such Bonds are payable solely from the aforesaid Bond Fund and Pledged Receipts; provided, that nothing herein shall be deemed to prohibit the Issuer, of its own volition, from using to the extent lawfully authorized to do so any other resources for the fulfillment of any of the terms, conditions or obligations of the Indenture, the Bond Legislation or any of the Bonds. - 13 - Section 7. Sale of Project Bonds. The Project Bonds are hereby sold and awarded to the Original Purchasers, in accordance with their written offers therefor. The Executive and the Fiscal Officer are authorized and directed to make the necessary arrangements with the Original Purchasers to establish the date, location, procedure and conditions for the delivery of the Project Bonds to the Original Purchasers and to take all steps necessary to effect due execution, authentication and delivery to the Original Purchasers of the Project Bonds under the terms of this Bond Legislation and the Indenture to the extent not provided for in said written offer. It is hereby determined that the price for and the terms of the Project Bonds, and sale thereof, all as provided in this Bond Legislation, are in the best interest of the Issuer and in compliance with all legal requirements. Section 8. Allocation of Proceeds of Project Bonds - Construction Fund. All of the proceeds from the sale of the Project Bonds shall be allocated, deposited and credited to the Construction Fund. 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 in the name of the Issuer to be designated "City of South Bend - South Bend Forge, Inc. Construction Fund" (the "Construction Fund "). Moneys in the Construction Fund may be invested as provided in Section 12 hereof and shall be disbursed in accordance with the provisions of the Agreement. The Trustee is authorized and directed to make any such disbursement from the Construction Fund in accordance with the provisions of the Agreement. The moneys to the credit of the Construction Fund shall, pending disbursement as above set forth, be subject to a lien and charge in favor of the holders of the Project Bonds. Section 9. Source of Payment - Bond Fund. As provided in the Agreement, Loan Payments, sufficient in time and amount to pay the Bond - 14 - service charges as they come due, are to be paid by the Company directly to the Trustee for the account of the Issuer and deposited in the Bond Fund. 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. Revenue Bond Fund" (the "Bond Fund "). The Bond Fund (and accounts therein provided for in the Indenture or in the Agreement) and the moneys and investments therein are hereby pledged to and shall be used solely and exclusively for the payment of Bond service charges as they fall due at stated maturity or by redemption, all as provided herein and in the Indenture and the Agreement, provided that no part thereof (except as may otherwise be provided for herein, in the Indenture or the Agreement) shall be used to redeem, prior to maturity, any Bonds. No later than one business day prior to a date when Bond service charges are due and payable, the Trustee shall transmit from moneys in the Bond Fund applicable thereto to any other Paying Agents, as appropriate, amounts sufficient to meet payments to be made by them of Bond service charges to be then due and payable; provided that to the extent that the amount needed by any other Paying Agent is not sufficiently predictable, the Trustee may make such credit arrangements with such Paying Agent as to permit meeting such payments. There shall be deposited into the Bond Fund (and credited, if required by the Indenture or Agreement, to appropriate accounts therein), as and when received, (a) all Loan Payments and (b) all other Pledged Receipts. The Issuer hereby covenants and agrees that so long as any of the Bonds are outstanding it will deposit, or cause to be deposited, in the Bond Fund, Pledged Receipts sufficient in time and amount to pay the Bond service charges as the same become due and payable, and to this end the Issuer covenants and agrees that, so long as any Bonds are outstanding, - 15 - it will diligently and promptly proceed in good faith and use its best efforts to enforce the Agreement, and that, should there be an event of default under the Agreement, the Issuer shall fully cooperate with the Trustee and with the Bondholders to fully protect the rights and security of the Bondholders hereunder. Nothing herein shall be construed as requiring the Issuer to use or apply to the payment of Bond service charges any funds or revenues from any source other than Pledged Receipts. The Issuer covenants and agrees, whenever the moneys and investments in the Bond Fund (or otherwise held by the Trustee for such purpose) are sufficient in amount to redeem all of the Bonds then outstanding and to pay interest to accrue thereon to the date or dates of such redemption, to take and cause to be taken the necessary steps to redeem all of said Bonds on the next succeeding redemption date or dates for which the required notice of call for redemption may be given. Section 10. Additional Bonds. The Issuer, at the request of the Company if the Company is not then in default under the Agreement with the consent of all the bondholders, to the extent then permitted by law and for purposes consistent with the Act: (a) shall to the extent reasonably deemed necessary by the Issuer to create or maintain the character or significance of the Project as furthering the purpose of the Act use its best efforts to issue Additional Bonds from time to time to provide a loan of the proceeds thereof to the Company for its use for: (i) completion of the Project, or (ii) the acquisition for the Project of additional real estate or interests therein within the boundaries of the Issuer, repairs to the Project of a major nature arising from casualty or unanticipated conditions, or the acquisition, construction, enlargement, improvement, equipping and furnishing of property to be used in connection with the Project and to be located on the Project Site as defined in the Agreement, or any combination thereof, or (iii) any combination of (i) and (ii), and (b) may issue Additional Bonds from time to time to provide for its use for: - 16 - (i) the acquisition for the Project of additional real estate or interests therein within the boundaries of the Issuer, or the acquisition, construction, enlargement, improvement, equipping and furnishing of property to be used in connection with the Project and to be located on said Project Site, or any combination thereof, or (c) may issue Additional Bonds from time to time to provide for (i) refunding outstanding Bonds, or (ii) any combination of the purposes recorded in (i) and in clause (a) and (b) hereof; provided, that the proceeds of any Additional Bonds shall be used by the Company solely to pay permissible costs under the Act and that the issuance of such Additional Bonds shall not result in the interest on the Bonds outstanding immediately prior to such issuance becoming subject to federal income tax. Such Additional Bonds shall be on a parity with the Project Bonds and any Additional Bonds theretofore or thereafter issued. Before any Additional Bonds are authenticated there shall be delivered to the Trustee the items required by Section 2.08 of the Indenture and any necessary amendment of the Agreement to provide for increased Loan Payments so that the aggregate of the Loan Payments thereafter payable under the Agreement shall be sufficient in amount to make all required payments into the Bond Fund in order to pay when due Bond service charges on all Bonds then to be outstanding, and for all Additional Payments (as defined in the Agreement) by the Company under the provisions of the Agreement and the Bond Legislation. Section 11. Covenants of Issuer. In addition to other covenants of the Issuer in this Bond Legislation and the Indenture contained, the Issuer further covenants and agrees as follows: (a) Payment of Bond Service Charges. The Issuer will, solely from the sources herein provided, pay or cause to be paid the Bond service charges on each and all Bonds on the dates, at the places and in the manner provided herein, in the applicable Bond Legislation and in the Bonds. - 17 - (b) Performance of Covenants, Authority and Actions. The Issuer will at all times faithfully observe and perform all agreements, covenants, undertakings, stipulations and provisions contained in the Agreement, the Bond Legislation, the Indenture and in any and every Bond executed, authenticated and delivered under the Indenture, and in all proceedings of its Legislative Authority pertaining thereto, on its part to be performed or observed. The Issuer covenants that it is, and upon delivery of the Project Bonds will be, duly authorized by the laws of the State, including particularly and without limitation the Act, to issue the Project Bonds, to execute the Indenture and the Agreement, to accept and assign the Mortgage and to provide the security for payment of the Bond service charges in the manner and to the extent herein and in the Indenture set forth; that all actions on its part for the issuance of the Project Bonds and execution and delivery of the Indenture and the Agreement and the acceptance and assignment of the Mortgage have been or will be duly and effectively taken; and that the Project Bonds in the hands of the holders thereof will be valid and enforceable special obligations of the Issuer according to the terms thereof. Each obligation of the Issuer required to be undertaken pursuant to the Bond Legislation, the Indenture, the Agreement, and the Bonds is binding upon the Issuer, and such officer or employee thereof as may from time to time have the authority under law to take such actions as may be necessary to perform all or any part of such obligation. (c) Pledged Receipts. Except as otherwise provided in the Bond Legislation, Indenture, and Agreement, the Issuer will not pledge or assign the Pledged Receipts or create or suffer to be created any debt, lien or charge thereon other than the pledge and assignment thereof under this Bond Legislation and the Indenture. (d) Recordings and Filings. The Issuer will, at the expense of the Company, cause the Agreement, the Mortgage and the Indenture and any amendments or supplements thereto and all necessary financing statements, amendments thereto, continuation statements and instruments of similar character relating to the pledges made by it to secure the Bonds, to be recorded and filed in such manner and in such places as may be required by law in order to fully preserve and protect the security of the holders of the Bonds and the rights of the Trustee under the Mortgage and the Indenture. Prior to the end of the month succeeding each anniversary of the Indenture, the Issuer will, at the expense of the Company, deliver, or cause the Company to deliver to the Trustee, an opinion of counsel, who may be counsel for the Issuer or for the Company, addressed to the Trustee stating that no filing, registration or recording and no re- filing, re- registration or re- recording, of any such instrument is or will be necessary during the twelve calendar months immediately succeeding the date of such opinion, or if such filing, registration, recording, re- filing, re- registration or re- recording is necessary, setting forth the requirements in respect thereto. Promptly after any filing, recording, re- filing or re- recording of any financing statement or amendment thereto or continuation statement or instrument of similar character relating to any of the pledges made in the Bond Legislation, the Mortgage or the Indenture, or any filing, registration, recording, re- filing, re- registration or re- recording of the Agreement, the Mortgage or the Indenture, or any amendment or supplement thereto, the Issuer will deliver, or cause to be delivered, to the Trustee an opinion of counsel, who may be counsel for the Issuer or for the Company, to the effect that such filing, registration, recording, re- filing, re- registration or re- recording has been duly accomplished and setting forth the particulars thereof. (e) Inspection of Project Books. All books and documents in the Issuer's possession relating to the Project and the Pledged Receipts shall at all times be open to inspection by such accountants or other agents of the Trustee as the Trustee may from time to time designate. (f) List of Bondholders. To the extent that such information shall be made known to the Issuer under the terms of this subsection, the Issuer - 19 - will keep or arrange to have kept on file at the corporate trust office of the Trustee a list of names and addresses of the holders of Bonds. Neither the Issuer nor the Trustee shall be under any responsibility with regard to the accuracy of said list. At reasonable times and under reasonable regulations established by the Trustee, said list may be inspected and copied by the Company, or by holders (or a designated representative thereof) of twenty -five percent or more in principal amount of Bonds then outstanding, such holding and the authority of any such designated representative to be evidenced to the satisfaction of the Trustee. (g) Rights under Agreement. The Trustee, in its name or in the name of the Issuer, may, for and on behalf of the Bondholders, enforce all rights of the Issuer and all obligations of the Company under and pursuant to the Agreement, whether or not the Issuer is in default of the pursuit or enforcement of such rights and obligations. (h) Enforcement of Agreement. The Issuer shall do all things and take all actions on its part necessary to comply with obligations, duties and responsibilities on its part under the Agreement, and will take all actions within its authority to keep the Agreement in effect in accordance with the terms thereof and to enforce and protect the rights of the Issuer thereunder, including actions at law and in equity, as may be appropriate. (i) Arbitrage Provisions. The Issuer will restrict the use of the proceeds of the Project Bonds in such manner and to such extent, if any, as may be necessary, after taking into account reasonable expectations at the time the Project Bonds are delivered to the Original Purchasers, so that they will not constitute arbitrage bonds under Section 103(c) of the Internal Revenue Code and the regulations prescribed under that Section. The Fiscal Officer or any other officer having responsibility with respect to the issuance of the 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 with the Company or any employee, - 20 - consultant or agent of the Company, to give an appropriate certificate on behalf of the Issuer, for inclusion in the transcript of proceedings for the Project Bonds, setting forth the reasonable expectations of the Issuer regarding the amount and use of the proceeds of the Project Bonds and the facts and estimates on which they are based, such certificate to be premised on the reasonable expectations and the facts and estimates on which they are based as provided by the Company, all as of the date of delivery of and payment for such Project Bonds. The Clerk of the Legislative Authority, or other appropriate officer of the Issuer, shall furnish to the Original Purchasers a true transcript of proceedings, certified by said Clerk or officer, of all proceedings had with reference to the issuance of the Project Bonds along with such information for the records as is necessary to determine the regularity and validity of the issuance of said Bonds. (j) Federal Tax Election. 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 Project 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 12. Investment of Bond Fund and Construction Fund. Moneys in the Bond Fund and the Construction Fund shall be invested and reinvested by the Trustee in any Eligible Investments at the oral request and written confirmation of the Authorized Company Representative (as defined in the Agreement), provided that investments of moneys in the Bond Fund shall mature or be redeemable at the option of the holder at the times and in the amounts necessary to provide moneys applicable hereunder thereto to pay Bond service charges as they fall due at stated maturity or by redemption and that each investment of moneys in the Construction Fund shall in any event mature or be redeemable at the option of the holder at such time as may be necessary - 21 - to make payments from said Fund. Subject to any such orders with respect thereto, the Trustee may from time to time sell such investments and reinvest the proceeds therefrom in Eligible Investments maturing or redeemable as aforesaid. Any such investments may be purchased from or through the Trustee. The Trustee shall sell or redeem investments standing to the credit of the Bond Fund to produce sufficient moneys applicable hereunder to and at the times required for the purposes of paying Bond service charges when due as aforesaid, and shall do so without necessity for any order on behalf of the Issuer and without restriction by reason of any such order. An investment made from moneys credited to the Bond Fund or the Construction Fund shall constitute part of that respective Fund and such respective Fund shall be credited with all proceeds of sale and income from such investment. For purposes of this Indenture and the Bond Legislation, such investments shall be valued at face amount or market value, whichever is less. Section 13. Indenture; Agreement and Mortgage. In order to secure the payment of the Bond service charges as the same shall become due and payable, the Executive and the Fiscal Officer of the Issuer are hereby authorized and directed to execute, acknowledge and deliver, in the name and on behalf of the Issuer, an Indenture and an Agreement and to accept and assign a Mortgage in substantially the forms submitted to this Legislative Authority, which instruments are hereby approved, with such changes therein not inconsistent with this 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 substantially adverse to the Issuer, shall be conclusively evidenced by the execution of such instruments. This Bond Legislation shall constitute a part of the Indenture as therein provided and for all purposes of said Indenture, including, without limitation thereto, application to this Bond Legislation of the provisions in the Indenture relating to amendment, modification and supplementation, and provisions for severability. - 22 - Section 14. Other Documents. The Legislative Authority, or any one or more members thereof, the Executive, the Fiscal Officer, and the Clerk of the Legislative Authority, as appropriate, are hereby further authorized and directed to execute such certifications, financing statements, assignments and instruments as are in the opinion of the Legal Officer and bond counsel necessary or appropriate to perfect the pledges set forth in the Indenture and the Mortgage and to consummate the transactions provided for in the Indenture, the Mortgage and the Agreement. Section 15. Effective Date. This Bond Legislation shall be in full force and effect from and after its passage by the Common Council and approved by the Mayor. Councilmen: 1st READING *.1.3 " ? F PUBLIC HEARING P. / a. 7 C 2nd READING► „ /p NOT APPROVED REFERRED - 23 - PASSED �� � 3 • � � �V �, • � �a� AUG 7 1979 Irene Gammon C!T' C-' [ S, Sam! BE?tD, In. VOOR, McMICHAEL, ALLEN, FEDDER & HERENDEEN WILLIAM E.VOOR ATTORNEYS 8 COUNSELORS AT LAW AREA CODE 219 GUY H. M. ALLEN EL LLOYD M 300 FIRST BANK BUILDING 234 -6061 KENNETH P. FEDDER SOUTH BEND, INDIANA 46601 GEORGE E. HERENDEEN ANTHONY D. KOWALS OF COUNSEL: WILLIAM O. JACKSON Members of the South Bend Common Council County -City Building South Bend, Indiana 46601 RE: Industrial Development Revenue Bond SOUTH BEND FORGE, INC. PROJECT Dear Gentlemen: The South Bend Economic Development Commission has received an application from SOUTH BEND FORGE, INC., for the issuance of a revenue bond in the amount of Six Million ($6,000,000.00) Dollars for the acquisition, construction and equipping of real and personal property to be located in Block 2 Phase III of the Airport Industrial Park, South Bend, Indiana. The new facility, which will contain approximately 54,000 square feet, will produce hot forge components, and will create approximately 67 new jobs with an estimated payroll of approximately $1,000,000.00. This is new industry for South Bend. KPF /mb Respectfully yours, TH P. FEDDER ATTORNEY FOR THE SOUTH BEND ECONOMIC DEVELOPMENT COMMISSION AUG 71G7a Irene ,k .ti L