OFFICIAL BOND SALE NOTICE

Sealed proposals will be received by the Treasurer of the Damon Run Conservancy District ("District"), at the office of the District's financial advisor, H.J. Umbaugh & Associates, Certified Public Accountants, LLP, 8365 Keystone Crossing, Suite 300, P.O. Box 40458, Indianapolis, IN 46240-0458, up to the hour of 11:00 a.m. (Indianapolis time) on the 19th day of November, 2010, for the purchase of the bonds of the District designated as "Conservancy District Bonds of 2010, Series A and Series B" in the aggregate amount of $14,000,000. Bidders may bid a discount not to exceed 1% of the par value of the bonds. The bonds will bear interest at a rate or rates not to exceed 8% per annum (the exact interest rate or rates will be determined by bidding). Interest will be payable semiannually on January 1 and July 1 of each year beginning on July 1, 2011. Interest will be calculated on a 360-day year consisting of twelve 30-day months. Said bonds will be dated as of the date of delivery of the bonds, will be in the denominations of $5,000 or integral multiples thereof and will mature semiannually on January 1 and July 1 on the dates and in the amounts listed in the schedule to be provided at least twenty-four (24) hours prior to the sale.

All or a portion of the bonds may be issued as one or more term bonds, upon election of the successful bidder. Such term bonds shall have a stated maturity or maturities of January 1 and July 1, on the dates as determined by the successful bidder through the final maturity as described schedule provided prior to the sale. The term bonds shall be subject to mandatory sinking fund redemption and final payment(s) at maturity at 100% of the principal amount thereof, plus accrued interest to the redemption date, on dates consistent with the schedule provided prior to the sale.

The bonds of this issue maturing on or after January 1, 2020 are redeemable at the option of the District on July 1, 2019, or any date thereafter, on thirty (30) days’ notice, in whole or in part, in the order of maturity determined by the District and by lot within a maturity, at face value, with no premium, plus in each case accrued interest to the date fixed for redemption.

Principal is payable at the office of a registrar and paying agent to be designated by the District. Interest shall be paid by check mailed to the registered owners or by wire transfer to depositories. The bonds will be issued in fully registered form.

Each bid must be for all of said bonds and must state the rate or rates of interest in multiples of 1/8 or 1/20 of 1%. Any bids specifying two or more interest rates shall also specify the amount and maturities of the bonds bearing each rate, but all bonds maturing on the same date shall bear the same single interest rate. The rate on any maturity shall be equal to or greater than the rate on the immediately preceding maturity. The award will be made to the best bidder complying with the terms of sale and offering the lowest net interest cost to the District, to be determined by computing the total interest on all of the bonds to their maturities and adding thereto the discount bid, if any, and deducting therefrom the premium bid, if any. Although not a term of sale, it is requested that each bid show the net dollar interest cost to final maturity and the net effective average interest rate on the entire issue. No conditional bid or bids for less than 99% of the par value of the bonds will be considered. The right is reserved to reject any and all bids. In the event no satisfactory bids are received at the time of the sale, the sale will be continued from day to day thereafter, without further advertisement for a period of thirty (30) days during which time no bid which provides a higher net interest cost to the District than the best bid received at the time of the advertised sale will be considered.

Each bid must be on a customary bid form which shall be enclosed in a sealed envelope addressed to the undersigned Treasurer and marked "Bid for Damon Run Conservancy District Conservancy District Bonds of 2010, Series A and Series B." The winning bidder will be notified and instructed to submit a good faith deposit which may consist of either a certified or cashier's check or a wire transfer in the amount of $140,000 ("Deposit"). If a check is submitted, it shall be drawn on a bank or trust company which is insured by the Federal Deposit Insurance Corporation and shall be submitted to the District (or shall wire transfer such amount as instructed by the District) not later than 3:30 p.m. (Local Time) on the next business day following the award. In either case, the Deposit shall be payable to the "Damon Run Conservancy District," and shall be held as a guaranty of the performance of the bid. No interest on the Deposit will accrue to the successful bidder. In the event the successful bidder fails to honor its accepted bid, the Deposit will be retained by the District. The successful bidder will be required to make payment for such bonds in Federal Reserve funds or other immediately available funds and accept delivery of the bonds within five days after being notified that the bonds are ready for delivery, at such bank in the City of Indianapolis, Indiana, or the District, as the purchaser shall designate, or at such other location which may be mutually agreed to by the District and such bidder. It is anticipated that the bonds will be ready for delivery within thirty days after the date of the sale and if not ready for delivery within forty-five days after the sale date, the purchaser shall be entitled to rescind the sale and obtain the return of the Deposit. The successful bidder is expected to apply to a securities depository registered with the SEC to make such bonds depository-eligible. The successful bidder will also be required to certify as to the price at which a substantial amount of bonds of each maturity was reoffered to the public. The opinion of Ice Miller LLP, bond counsel of Indianapolis, Indiana, approving the legality of said bonds, together with a transcript of the bond proceedings, and closing certificates in the usual form showing no litigation, will be furnished to the successful bidder at the expense of the District.

The bonds may be issued, at the option of the successful bidder, by means of a book-entry-only system with no physical distribution of bond certificates made to the public. In this case, one bond certificate for each maturity will be issued to and registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), and immobilized in its custody. The successful bidder, as a condition of delivery of the bonds, shall be required to deposit the bond certificates with DTC, registered in the name of Cede & Co., nominee of DTC.

It is anticipated that CUSIP identification numbers will be printed on the bonds, but neither the failure to print such numbers on any bond nor any error with respect thereto shall constitute cause for failure or refusal by the successful bidder therefor to accept delivery of and pay for the bonds in accordance with the terms of its bid. No CUSIP identification number shall be deemed to be a part of any bond or a part of the contract evidenced thereby and no liability shall hereafter attach to the District or any of its officers or agents because of or on account of such numbers. All expenses in relation to the printing of CUSIP identification numbers on the bonds shall be paid for by the District; provided, however, that the CUSIP Service Bureau charge for the assignment of said numbers shall be the responsibility of and shall be paid for by the successful bidder. The successful bidder will also be responsible for any other fees or expenses it incurs in connection with the resale of the bonds.

The bonds are being issued under the provisions of Indiana Code 14-33 for the purpose of providing funds to be applied on the costs of refunding outstanding notes of the District, and the expansion of the District, including pipe relocation and the purchase of capacity from the City of Portage, Indiana ("Project"). The bonds will be payable out of a special benefits tax to be levied on all real property within the District and, once the Project is revenue producing, to the extent available, from net revenues of the Project. In the opinion of bond counsel, under the federal statutes, decisions, regulations and rulings existing on this date, the interest on the bonds is excludable from gross income for purposes of federal income taxation.

The bonds are subject to the Internal Revenue Code of 1986 as in effect on the date of their issuance ("Code") which imposes limitations on the issuance of obligations like the bonds under federal tax law. The District has covenanted to comply with those limitations to the extent required to preserve the exclusion of interest on the bonds from gross income for federal income tax purposes. The District has designated the bonds for purposes of Section 265(b) of the Code to qualify for the $30,000,000 annual exception from the 100% disallowance, in the case of banks and other financial institutions, of the deduction for interest expense allocable to tax-exempt obligations.

The District has prepared an Official Statement relating to the bonds which it deems to be nearly final. A copy of the nearly final Official Statement may be obtained from the District's Financial Advisor, H.J. Umbaugh & Associates, Certified Public Accountants, LLP, 8365 Keystone Crossing, Suite 300, P.O. Box 40458, Indianapolis, IN 46240-0458.

Within seven (7) business days of the sale, the District will provide the successful bidder with 100 copies of the final Official Statement at the District’s expense and such additional copies as may be requested, within five (5) business days of the sale, by the successful bidder at the expense of the successful bidder. Inquiries concerning matters contained in the nearly final Official Statement must be made and pricing and other information necessary to complete the final Official Statement must be submitted by the successful bidder within two (2) business days following the sale to be included in the final Official Statement.

In the ordinance approving the bonds and pursuant to a Continuing Disclosure Undertaking to be delivered by the District upon delivery of the bonds, the District will covenant to comply with Securities and Exchange Commission Rule 15c2-12, as in effect of the date of delivery of the bonds ("Rule 15c2-12"). The District will covenant to provide the most recent annual financial information and operating data relating to the District as described in the Preliminary Official Statement prepared in connection with the sale of the bonds. Further, with respect to the bonds, the District will undertake to provide notice of those material events required by Rule 15c2-12.

Dated this 4th day of November, 2010.

TREASURER, DAMON RUN

CONSERVANCY DISTRICT

(November 4, 11, 2010)