HomeMy WebLinkAboutTax Revenue Bonds Report New Issue Book-Ennn. my
NOT RATED
THIS PRELIMINARY OFFERING MEMORANDUM IS DATED FEBRUARY 12, 1998
In the opinion of Ice Miller Donadio&Ryan, Indianapolis, Indiana, under existing laws, regulations,judicial decisions and rulings, interest on the Bonds is
excludable from gross income under Section 103 of the Internal Revenue Code of 1986, as amended, (the Code'),for federal income tax purposes. Such exclusion
is conditioned on continuing compliance with the Tax Covenants (as defined in Appendix E). In the opinion of Ice Miller Donadio&Ryan, under existing
laws, regulations, judicial decisions and rulings, interest on the Bonds is exempt from income taxation in the State of Indiana , See 'TAX
a a MATTERS"in Appendix E. The Bonds have not been designated as qualified tax-exempt obligations for purposes of Section 265 (b)(3)of the Code.
T N
o = $2,655,000
N CARMEL (INDIANA) REDEVELOPMENT DISTRICT
O b-
Tax Increment Revenue Bonds of 1998
oa Original Date: February 1, 1998 Due: February 1 as shown below
0 0 ° The Carmel Redevelopment Commission(the"Commission"), acting on behalf of the City of Carmel, Indiana(the"City"), is issuing$2,655,000
o 5 y of Redevelopment District Tax Increment Revenue Bonds of 1998 (the"Bonds")to provide funds for the acquisition and construction of certain
2 5
a� .__ public road and drainage improvements and traffic signals(the"Project") in or serving the Merchants Square Economic Development Area(the
"' o L "EDA"
E 'CO s ), to fund a debt service reserve and pay capitalized interest, and to pay issuance costs.
C TU N
m O
y• i° The Bonds will be issued under, and are secured by,a Bond Resolution,adopted by the Commission on February 2, 1998. The Bonds are payable
a 3 solely from the Trust Estate as described in the Bond Resolution which includes Tax Increment (as defined herein) collected in the EDA and
▪ ° Ld Taxpayer Payments(as defined herein)payable from the Taxpayer(The Linder Company of Indiana, Inc. and certain affiliated entities as defined
8 y
a ° d in Appendix F). All funds and accounts which comprise the Trust Estate will be held by National City Bank of Indiana, as Trustee, Registrar and
m i 5 Paying Agent, for the benefit of the owners of the Bonds.
O N
I g 2 THE BONDS DO NOT CONSTITUTE A CORPORA'T'E OBLIGATION OF THE CITY,BUT CONSTITUTE A LIMITED OBLIGATION OF THE CARMEL
2 5 ° REDEVELOPMENT DISTRICT(THE"DISTRICT")AS A SPECIAL TAXING DISTRICT,1N THE NAME OF THE CITY.PAYABLE SOLELY FROM THE
.t, 1 TRUST ESTATE,INCLUDING THE TAX INCREMENT AND TAXPAYER PAYMENTS,AS PROVIDED IN THE BOND RESOLUTION AND DESCRIBED
8 m IN THIS OFFERING MEMORANDUM. THE DISTRICT IS NOT OBLIGATED TO PAY THE DEBT SERVICE ON THE BONDS FROM ANY SOURCE
T ; 8 OTHER THAN THE TRUST ESTATE. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE DISTRICT OR THE CITY IS
`m 7 PLEDGED TO THE PAYMENT OF THE BONDS. See"SECURITY AND SOURCES OF PAYMENT OF THE BONDS." See"RISKS TO OWNERS OF THE
o ° 8 BONDS"contained herein for a discussion of certain factors that should be considered by a prospective purchaser in connection with an investment
r E
• 6 in the Bonds.
2
.8 Q• To
NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL OR STATE AGENCY HAS PASSED
0 o UPON THE ACCURACY OR ADEQUACY OF THIS OFFERING MEMORANDUM OR THE INVESTMENT MERITS OF THE SECURITIES OFFERED
t o HEREBY. ANY REPRESENTATIONS TO THE CONTRARY IS UNLAWFUL. THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
`o E y ACT OF 1933, AS AMENDED (THE"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE
'c a, o, OFFERED OR SOLD EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
E a '- REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. ACCORDINGLY,THE UNDERWRITER AGREES,IN
S t g CONNECTION WITH THE INITIAL OFFERING AND SALE OF THE BONDS,THAT IT WILL NEITHER OFFER OR SELL BONDS TO PERSONS OTHER
% " o
E t E. THAN A LIMITED NUMBER OF "ACCREDITED INVESTORS" (AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT) IN MINIMUM
c ° s DENOMINATIONS OF$100,000. THE UNDERWRITER FURTHER AGREES,IN CONNECTION WITH ANY SECONDARY MARKET RESALE OF THE
r, 8 m BONDS, THAT THE BONDS WILL BE OFFERED AND SOLD TO A LIMITED NUMBER OF"ACCREDITED INVESTORS" (AS DEFINED IN THE
n N = SECURITIES ACT)WHO WILL EXECUTE AND DELIVER AN INVESTOR SUITABILITY LEITER CONTAINING CERTAIN REPRESENTATIONS AND
8 g . AGREEMENTS IN THE FORM OF APPENDIX 0, THE"FORM OF INVESTOR SUITABILITY LETTER,"ATTACHED HERETO. See"NOTICE TO
o ` a PURCHASERS."
1 g ° 3
11 mi y The Bonds will be issued in fully registered form in the minimum denomination of$100,000 and in any integral multiples of$5,000 thereafter.
„ P o The Bonds will be registered in the name of Cede&Co.,as nominee for The Depository Trust Company("DTC"). Purchases of beneficial interests
—m € o in the Bonds will be made in book-entry form and purchasers will not receive physical delivery of certificates representing their beneficial interests
2 7,, 7, in the Bonds. See "BOOK-ENTRY SYSTEM." Interest on the Bonds will he payable semi-annually on each February 1 and August 1,
ate —
y commencing August 1, 1998. Principal and semi-annual interest will be disbursed on behalf of the Commission by National City Bank of Indiana
._ i (the"Registrar"or"Paying Agent"), located in Indianapolis, Indiana. Interest on, together with the principal of,the Bonds will be paid directly
2to DTC by the Paying Agent so long as DTC or its nominee is the registered owner of the Bonds,as further described herein. Interest on the Bonds
`s mis not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations,however, interest
E 3-2 on the Bonds will be considered for purposes of calculating the federal alternative minimum tax imposed on corporations. Bonds maturing on or
7E , $ after February 1,2009 will be subject to optional redemption beginning October 1,2007, and will be subject to Extraordinary Redemption as more
2 g c- fully described herein. The Bonds will also be subject to mandatory sinking fund redemption prior to maturity as more fully described herein.
c E o
e m a $605,000* of'Term Bonds % due February 1, 2008*
a $2,050,000* of Term Bonds 0 % due February 1, 2018*
o43, C
dos The Bonds are being offered when, as and if issued and received by the Underwriter as described in this Offering Memorandum and subject to the
L y
� °' approval of legality by Ice Miller Donadio & Ryan, Indianapolis, Indiana, Bond Counsel. Certain legal matters will be passed upon orthe
Commission and the City by Douglas Haney, City Attorney; for the Taxpayer by
Dann Pecar Newman&Kleiman, Professional Corporation,
0W al
0 ; Indianapolis, Indiana; and for the Underwriter by Johnson, Smith, Pence, Densborn, Wright&.Heath, Indianapolis, Indiana. The Bonds are
c , expected to be available for delivery to The Depository Trust Company, in New York, New York, on or about March 3, 1998.
E a o
McDONALD & COMPANY SECURITIES, INC.
a B. m
This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read this Offering
Memorandum in its entirety to obtain information essential to the making of an informed investment decision.
*Preliminary, subject to change
IN THE BOND PURCHASE AGREEMENT, TO BE EXECUTED BETWEEN THE COMMISSION AND
McDONALD & COMPANY SECURITIES, INC. (THE "UNDERWRITER"), THE UNDERWRITER HAS
COVENANTED AND AGREED THAT DURING THE INITIAL OFFERING OF THE BONDS,THE BONDS WILL
BE OFFERED AND SOLD ONLY IN MINIMUM DENOMINATIONS OF $100,000 TO "ACCREDITED
INVESTORS" AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OF 1933, AS AMENDED(AND
DESCRIBED UNDER"INVESTOR SUITABILITY STANDARDS" HEREIN)WHO HAVE RECEIVED AND HAD
AN OPPORTUNITY TO REVIEW THIS OFFERING MEMORANDUM IN ITS ENTIRETY AND ANY OTHER
INFORMATION REQUESTED FOR DUE DILIGENCE, AND WHO INTEND TO ACQUIRE THE BONDS FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH,
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT. EACH POTENTIAL PURCHASER OF
BONDS MUST COMPLY WITH THESE REQUIREMENTS PRIOR TO THE TIME OF ANY PURCHASE OF ANY
ONE OR MORE BONDS.
THE BONDS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT IF REGISTERED UNDER THE APPLICABLE FEDERAL SECURITIES
LAWS AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION FROM SUCH LAWS. FOR ANY RESALE OF THE BONDS IN A SECONDARY MARKET,
PURCHASERS WILL BE REQUIRED TO COMPLETE,EXECUTE AND DELIVER AN INVESTOR SUITABILITY
LETTER CONTAINING CERTAIN REPRESENTATIONS AND WARRANTIES TO ESTABLISH HIS/HER STATUS
AS AN ACCREDITED INVESTOR AS DESCRIBED UNDER"INVESTOR SUITABILITY STANDARDS." EACH
POTENTIAL PURCHASER OF BONDS MUST COMPLY WITH THESE REQUIREMENTS PRIOR TO THE TIME
OF ANY PURCHASE OF ANY ONE OR MORE BONDS. PROSPECTIVE PURCHASERS SHOULD BE AWARE
THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF AN INVESTMENT IN THE BONDS
FOR AN INDEFINITE PERIOD OF TIME. SEE"INVESTOR SUITABILITY STANDARDS."
In making an investment decision regarding the Bonds, prospective investors must rely upon their own examination of
the Commission, the City, the District and the Taxpayer, as applicable, the Taxpayer's business, and the terms of the
offering, including the merits and risks involved. Prospective investors are not to construe the contents of this Offering
Memorandum as investment, legal or tax advice. Each investor should consult its own counsel, accountant and other
advisors as to legal, tax, business, financial and related aspects of an investment in the Bonds. The Commission, the
City,the District and the Taxpayer are not making any representation to any offeree or purchaser of the Bonds regarding
the legality of an investment in the Bonds by such offeree or purchaser under the federal securities laws and appropriate
legal investment and similar laws. The offering of the Bonds is being made solely on the basis of this Offering
Memorandum. Any decision to purchase bonds in this offering must be based upon the information contained herein.
Each respective purchaser of the Bonds must comply with all applicable laws and regulations enforced in any jurisdiction
which it purchases, offers or sells the Bonds or possesses or distributes this Offering Memorandum and must obtain any
consent, approval or permission required by it for the purchase, offer or sale by it of the Bonds under the laws and
regulations enforced in any jurisdiction to which it is subject or in which it makes such purchases, offers or sales, and
the Commission, the City, the District and the Taxpayer shall have no responsibility therefor.
No person is authorized in connection with this offering to give any information or to make any representation not
contained herein and, if given or made, such other information or representation must not be relied upon as having been
authorized by the Commission, the City, the District or the Taxpayer. The information contained in this Offering
Memorandum is as of the date of this Offering Memorandum and is subject to change,completion or amendment without
notice. Neither the delivery hereof at any time nor any subsequent commitment to enter into any financing shall, under
any circumstances, create any implication that there has been no change in the information set forth in this Offering
Memorandum or in the affairs of the Commission, the City, the District or the Taxpayer since the date hereof.
THIS OFFERING MEMORANDUM CONTAINS FORWARD LOOKING INFORMATION BASED UPON
NUMEROUS ASSUMPTIONS OF THE COMMISSION, THE CITY, THE DISTRICT, THE TAXPAYER AND
OTHERS, WHICH ARE SUBJECT TO RISKS AND UNCERTAINTIES, MANY OF WHICH ARE NOT IN THE
CONTROL OF SUCH PERSONS AND OTHERS. SUCH FORWARD LOOKING INFORMATION MAY WELL
DIFFER FROM ACTUAL EVENTS IN THE FUTURE. SEE"SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS."
This Page Intentionally Left Blank
t
TABLE OF CONTENTS
Fuels)
INTRODUCTION 1 - 3
SECURITIES BEING OFFERED 4
Authorization 4
Project Description 4
Estimated Project Costs and Funding
Schedule of Amortization of$2,655,000 Principal Amount of Redevelopment 5
I District Tax Increment Revenue Bonds of 1998
Security and Sources of Payment 6-7
Definition of Tax Increment 78
The Merchants Square EDA and Tax Increment 8
The Taxpayer
Funds and Accounts 9- 11-1
Investments 12
Additional Bonds
Redemption Provisions 12- 13
Book-Entry System 14 - 15
NOTICE TO PURCHASERS 15
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 16
RISKS TO OWNERS OF THE BONDS 16- 18
INVESTOR SUITABILITY STANDARDS 19-20
CONTINUING DISCLOSURE 20
UNDERWRITING 20
PROCEDURES FOR PROPERTY ASSESSMENT, TAX LEVY AND COLLECTION 21 -23
LITIGATION 23
CERTAIN LEGAL MATTERS 23
LEGAL OPINION AND ENFORCEABILITY OF REMEDIES 23
APPENDICES (As Tabbed)
A The Taxpayer
The Linder Company of Indiana, Inc. and Certain Affiliated Entities
Compiled Financial Statements for the Taxpayer
B The City - General Information
C Accounting Report
D Bond Resolution
E Legal Opinion and Tax Matters
F Form of Taxpayer Agreement
G Form of Investor Suitability Letter(for Resale of Bonds in Secondary Market)
Appendix B contains certain general information regarding the City; however, the Bonds are payable solely from
the Trust Estate which includes Tax Increment collected from the EDA and distributed to the Allocation Fund of
the Commission and Taxpayer Payments, as provided in the Bond Resolution in Appendix D. NO OTHER
SOURCE OF COMMISSION OR CITY FUNDS ARE PLEDGED TO THE REPAYMENT OF THE BONDS;NO
UNLIMITED AD VALOREM TAXES NOR INCOME TAXES ARE PLEDGED TO THE PAYMENT OF THE
BONDS.
(This page intentionally left blank.)
4
OFFERING MEMORANDUM
$2,655,000
CARMEL (INDIANA) REDEVELOPMENT DISTRICT
Tax Increment Revenue Bonds of 1998
INTRODUCTION
This Offering Memorandum sets forth certain information concerning the issuance of $2,655,000 of the Carmel
Redevelopment District(the"District")Tax Increment Revenue Bonds of 1998(the"Bonds")by the Carmel Redevelopment
Commission(the"Commission"), acting on behalf of the City of Carmel, Indiana(the "City").
PURPOSE OF ISSUANCE
The Commission is issuing the Bonds to provide funds for the acquisition and construction of certain public road and
drainage improvements and traffic signals(the "Project") in or serving the Merchants Square Economic Development Area
(the"EDA")and to pay incidental expenses in connection with the Project, to fund a debt service reserve and pay capitalized
interest, and to pay costs associated with issuance of the Bonds.
SECURITY AND SOURCES OF PAYMENT
The Bonds will be issued under, and are secured by, a Bond Resolution, adopted by the Commission on February 2, 1998
(the"Bond Resolution"). The Bonds are payable solely from the Trust Estate as described in the Bond Resolution which
includes Tax Increment (as defined in APPENDIX D) collected in the EDA and Taxpayer Payments (as defined in
APPENDIX D) payable from the Taxpayer (The Linder Company of Indiana, Inc. and certain affiliates as defined in
APPENDIX F). All funds and accounts which comprise the Trust Estate will be held by National City Bank of Indiana,
located in Indianapolis, Indiana, as Trustee, Registrar and Paying Agent(the "Trustee, "Registrar" and"Paying Agent"),
for the benefit of the Owners of the Bonds (as defined in APPENDIX D).
The Bonds are limited obligations of the Commission and are payable solely from the Trust Estate. Security for and sources
of payment of the Bonds are described under"SECURITY AND SOURCES OF PAYMENT OF THE BONDS"herein.
THE BONDS DO NOT CONSTITUTE A CORPORATE OBLIGATION OF THE CITY, BUT CONSTITUTE A
LIMITED OBLIGATION OF THE DISTRICT AS A SPECIAL TAXING DISTRICT, IN THE NAME OF THE CITY,
PAYABLE SOLELY FROM THE TRUST ESTATE, INCLUDING THE TAX INCREMENT AND TAXPAYER
PAYMENTS, AS PROVIDED IN THE BOND RESOLUTION AND DESCRIBED IN THIS OFFERING
MEMORANDUM. THE DISTRICT IS NOT OBLIGATED TO PAY THE DEBT SERVICE ON THE BONDS FROM
ANY SOURCE OTHER THAN THE TRUST ESTATE. NEITHER THE FULL FAITH AND CREDIT NOR THE
TAXING POWER OF THE DISTRICT OR THE CITY IS PLEDGED TO THE PAYMENT OF THE BONDS.
Information about the Taxpayer(including the Taxpayer's compiled financial statements) is provided in APPENDIX A to
this Offering Memorandum. Information about the City is provided in APPENDIX B to this Offering Memorandum.
The Tax Increment and the Taxpayer Payments are subject to certain risks. Investment in the Bonds involves certain risks,
many of which are described in this Offering Memorandum. See"SPECIAL NOTE REGARDING FORWARD LOOKING
STATEMENTS" and "RISKS TO OWNERS OF THE BONDS."
DESCRIPTION OF THE BONDS
Book Entry System
The Bonds will be registered in the name of Cede & Co., as nominee for the Depository Trust Company ("DTC").
Purchases of beneficial interests in the Bonds will be made in book-entry form and purchasers will not receive physical
delivery of certificates representing their interests in the Bonds. See "BOOK-ENTRY SYSTEM."
-1-
DESCRIPTION OF THE BONDS (Cont'd)
Denominations
The Bonds are being issued in minimum denominations of$100,000 and in integral multiples of$5,000 thereafter.
Transfer and Exchange Features
The Registrar shall keep at its principal corporate office a record for the registration of the Bonds. Each Bond shall be
transferable or exchangeable only upon the books of the Commission kept for that purpose at the corporate trust office of
the Registrar, National City Bank of Indiana, located in Indianapolis, Indiana, by the registered owner in person, or by its
attorney duly authorized in writing, upon surrender of such Bond together with a written instrument of transfer or exchange
satisfactory to the Registrar. A further description of the registration and exchange features of the Bonds can be found in
the Bond Resolution.
Provisions for Payment
The principal of the Bonds shall be payable at the corporate trust office of the Paying Agent, National City Bank of Indiana,
located in Indianapolis, Indiana. All payments of interest on the Bonds shall be paid by check, mailed one business day
prior to the interest payment date to the registered owners as the names appear as of the fifteenth day preceding the interest
payment date and at the addresses as they appear on the registration books kept by the Registrar or at such other address
as is provided to the Paying Agent. If payment of principal or interest is made to a depository, payment shall be made by
wire transfer on the payment date in same-day funds. If the payment date occurs on a date when financial institutions are
not open for business, the wire transfer shall be made on the next succeeding business day. The Paying Agent shall be
instructed to wire transfer payments by 1:00 p.m. (New York City time) so such payments are received at the depository
by 2:30 p.m. (New York City time). All payments on the Bonds shall be made in lawful money of the United States of
America, which on the date of such payment, shall be legal tender.
So long as DTC or its nominee is the registered owner of the Bonds, principal of and interest on the Bonds will be paid
directly to DTC by the Paying Agent. (The final disbursement of such payments to the Beneficial Owners of the Bonds
will be the responsibility of the DTC Participants and Indirect Participants, all as defined and more fully described herein.)
Redemption Provision,£
The Bonds maturing on February 1, 2009 and thereafter are redeemable at the option of the Commission beginning on
October 1, 2007 as more fully described herein, and are subject to Extraordinary Redemption as more fully described
herein. The Term Bonds will be subject to mandatory sinking fund redemption as more fully described herein.
Notices
Thirty days' notice to the registered owners is required for the redemption of the Bonds or the resignation of the Trustee.
TAX MATTERS
In the opinion of Ice Miller Donadio & Ryan, Bond Counsel, interest on the Bonds is excludable from gross income for
federal income tax purposes. Such exclusion is conditioned on continuing compliance with the Tax Covenants as described
under "Tax Matters" contained in Appendix E. In the opinion of Ice Miller Donadio & Ryan, interest on the Bonds is
exempt from income taxation in the State of Indiana. See Appendix E.
The City and the Commission have not designated the Bonds as qualified tax-exempt obligations to qualify the Bonds
for the$10,000,000 exception from the provisions of Section 265(b)(3)of the Internal Revenue Code of 1986 relating
to the disallowance of 100% of the deduction for interest expense allocable to tax-exempt obligations.
-2-
AUTHORIZATION
The Bonds are to be issued under the authority of Indiana law, including, without limitation, IC 36-7-14 and IC 36-7-25,
and all the laws amendatory thereof and supplemental thereto as in effect on the issue date of the Bonds (collectively the
"Act") and pursuant to the Bond Resolution adopted on February 2, 1998, as more fully described herein. (Refer to
"SECURITIES BEING OFFERED"- "AUTHORIZATION"herein and APPENDIX D to this Offering Memorandum.)
111 The Bonds are anticipated to be available for delivery to The Depository Trust Company in New York, New York, on or
about March 3, 1998.
MISCELLANEOUS
The references, excerpts and summaries of all documents referred to herein do not purport to be complete statements of
the provisions of such documents, and reference is directed to all such documents for full and complete statements of all
matters of fact relating to the Bonds, the security for the payment of the Bonds and the rights and obligations of the owners
thereof. Additional information may be requested from the Office of the Mayor of the City of Carmel on behalf of the
Carmel Redevelopment Commission and from Craig Hessee of The Linder Company of Indiana, Inc. on behalf of the
Taxpayer.
The information contained in this Offering Memorandum has been compiled from City officials and the Taxpayer and other
sources deemed to be reliable, and while not guaranteed as to completeness or accuracy, it is believed to be correct as of
this date. However, the Offering Memorandum speaks only as of its date, and the information contained herein is subject
to change. The Commission,the City and the Taxpayer believe that this Offering Memorandum does not contain any untrue
statement of a material fact or omit to state a material fact in order to make the statements made herein, in light of the
circumstances under which they were made, not misleading.
Any statements made in this Offering Memorandum involving matters of opinion or of estimates, whether or not so
expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the
estimates will be realized. Neither this Offering Memorandum nor any statement which may have been made verbally or
in writing is to be construed as a contract with the Owners of the Bonds.
This Introduction contains certain information for quick reference only. It is not a summary of the Project, the Taxpayer,
the Bonds, the security for the Bonds or the offering of the Bonds. Investors must read this entire Offering Memorandum
to obtain information essential to the making of an informed investment decision.
The references, excerpts and summaries of all laws and legal and other papers referred to in this Offering Memorandum
do not purport to be complete statements of the provisions thereof and reference is directed to all such laws and papers for
full and complete statements of all matters of fact relating to the Bonds, the security for and sources of payment of the
Bonds and the rights and obligations of the Owners of the Bonds, as well as the Taxpayer and the Project.
-3-
SECURITIES BEING OFFERED
AUTHORIZATION
The Bonds are being issued by the Commission created under and pursuant to the provisions of the Act and pursuant to the
Bond Resolution adopted on February 2, 1998. The Bond Resolution secures the payment of principal and interest on the
Bonds through the Commission's pledge and assignment of the Trust Estate to the Trustee for the benefit of the Owners
of the Bonds. The entire Bond Resolution is provided in APPENDIX D of this Offering Memorandum. See "SECURITY
AND SOURCES OF PAYMENT OF THE BONDS"herein for a description of the Trust Estate.
The five-member Carmel Redevelopment Commission, the governing body of the Carmel Redevelopment District, exists
and operates under IC 36-7-14 and IC 36-7-25. On February 18, 1997, the Commission adopted a Declaratory Resolution
(confirmed on April 21, 1997 and amended on February 2, 1998) which established the Merchants Square Economic
Development Area(the "EDA") and designated the EDA as an Allocation Area for purposes of capturing Tax Increment.
PROJECT DESCRIPTION
Bond proceeds will be used to fund the acquisition and construction of certain public road and drainage improvements and
traffic signals(the "Project") in or serving the EDA and to pay incidental expenses in connection with the Project, to fund
a debt service reserve and pay capitalized interest, and to pay costs associated with issuance of the Bonds (the "Costs of
the Project"). The Project consists of(1)improvements to AAA Way from 116th Street to Carmel Drive, (2) a ring road,
(3) relocation of the Medical Drive intersection with AAA Way, (4) relocation of the intersection of Keystone Way and
the ring road, and (5) the widening of 116`h Street. The roads will be constructed to meet City specifications, including
utility relocation, drainage, landscaping and lighting. If sufficient Bond proceeds are available, the proceeds will also be
used to pay the costs of installing two traffic signals.
ESTIMATED PROJECT COSTS AND FUNDING
ESTIMATED PROJECT ND BOND-RELATED COSTS:
Estimated Project costs $1,910,000
Capitalized interest(through 8/1/99) 254,381
Less: estimated interest earnings (10.751)
Estimated net capitalized interest(1) 243,630
Debt service reserve 265,500
Estimated bond issuance costs 182,122
Underwriting discount
70.000
Total Estimated Project and Bond-Related Costs $2.671.252
ESTIMATED PROJECT FUNDING
Tax Increment Revenue Bonds of 1998 $2,655,000
Accrued interest through 3/3/98 16.251
Total Estimated Project Funding $2.671.252
(1) Assumes capitalized interest is net funded from estimated$10,751 of interest earnings at 4% on$243,630. Assumes
capitalized interest is reduced by Debt Service Reserve earnings in the Tax Increment Subaccount of$19,856 at 5.3%
on$265,500 from 3/3/98 through 8/1/99.
-4-
CARMEL(INDIANA) REDEVELOPMENT COMMISSION
SCHEDULE OF AMORTIZATION OF$2.655.000 PRINCIPAL AMOUNT
OF REDEVELOPMENT DISTRICT TAX INCREMENT REVENUE BONDS OF 1998
Debt Service
Payment Principal
Assumed Bond Year
Date Balance Principal Interest Rate Interest Debt Service Total
( In$1,000's ) (%)
08/01/98 $2,655
02/01/99 2,655
08/01/99 2,655
02/01/00 2,655
08/01/00 2,655
02/01/01 2,655
08/01/01 2,655
02/01/02 2,655
08/01/02 2,655
02/01/03 2,655 $100
08/01/03 2,555
02/01/04 2,555 100
08/01/04 2,455
02/01/05 2,455 100
08/01/05 2,355
02/01/06 2,355 100
08/01/06 2,255
02/01/07 2,255 100
08/01/07 2,155
02/01/08 2,155 105
08/01/08 2,050
02/01/09 2,050 100
08/01/09 1,950
02/01/10 1,950 150
08/01/10 1,800
02/01/11 1,800 160
08/01/11 1,640
02/01/12 1,640 170
08/01/12 1,470
02/01/13 1,470 180
08/01/13 1,290
02/01/14 1,290 195
08/01/14 1,095
02/01/15 1,095 210
08/01/15 885
02/01/16 885 225
08/01/16 660
02/01/17 660 240
08/01/17 420
02/01/18 420 420
Totals $2.655
-5-
SECURITY AND SOURCES OF PAYMENT
THE BONDS DO NOT CONSTITUTE A CORPORATE OBLIGATION OF THE CITY, BUT CONSTITUTE A
LIMITED OBLIGATION OF THE DISTRICT AS A SPECIAL TAXING DISTRICT IN THE NAME OF THE
CITY, PAYABLE SOLELY FROM THE TRUST ESTATE, INCLUDING THE TAX INCREMENT AND
TAXPAYER PAYMENTS, AS PROVIDED IN THE BOND RESOLUTION AND DESCRIBED IN THIS OFFERING
MEMORANDUM. THE DISTRICT IS NOT OBLIGATED TO PAY THE DEBT SERVICE ON THE BONDS
FROM ANY SOURCE OTHER THAN THE TRUST ESTATE. NEITHER THE FULL FAITH AND CREDIT NOR
THE TAXING POWER OF THE DISTRICT OR THE CITY IS PLEDGED TO TILE PAYMENT OF THE BONDS.
Trust Estate
The Commission, to secure the payment of the debt service on the Bonds will pledge and assign the Trust Estate, as described
below, to the Trustee for the benefit of the Owners of the Bonds, including:
(1) all cash and securities held in the Capital Fund and the Allocation Fund and the investment earnings
thereon and all proceeds thereof(except to the extent transferred or disbursed from such funds and accounts from
time to time in accordance with the Bond Resolution);
(2) all Tax Increment and Taxpayer Payments required to be deposited for the benefit of the Bonds; and
(3) any money pledged to the Trustee after the date of issue of the Bonds as security to the extent of that
pledge.
All funds and accounts which comprise the Trust Estate will be held by the Trustee for the benefit of the Owners of the
Bonds.
Tax Increment consists of all real property tax proceeds from assessed value in the EDA in excess of the base assessed value
(as defined in IC 36-7-14-39(b)(1)) as reduced by the Additional Credit provided for in IC 36-7-14-39.5(c) (referred to
throughout this Offering Memorandum as the "Tax Increment"). The forecasted Tax Increment is shown in the
ACCOUNTING REPORT contained in APPENDIX C of this Offering Memorandum, and is based on assumptions and
information described therein. It should be noted that two different Tax Increment forecasts are provided therein, (i)based
on assessed value estimates provided by the Property Tax Consultant (as defmed and identified therein) (upper range) and,
(ii)based on the assessed value estimates provided by the Clay Township Assessor (lower range). Both assessment estimates
are based on construction plans, construction schedules and construction cost information provided by the Taxpayer regarding
the real property improvements to be constructed in the EDA.
The actual assessments will be made by the Clay Township Assessor based on real property improvements completed as of
each March 1 assessment date, which may differ significantly from the estimates. In the Taxpayer Agreement, the Taxpayer
has covenanted, upon receipt of the March 1, 1999 assessments of the improvements to the Taxpayer's property in the EDA,
to appeal initially to the Hamilton County Board of Review for an increase of its assessment to an amount which, when
combined with the other real property assessments in the EDA (less the base assessed value of the EDA) and multiplied by
the net property tax rate (as assumed in the Accounting Report in Appendix C), will produce sufficient Tax Increment to
cover the maximum annual debt service due on the Bonds.
(For additional information about the Tax Increment as it relates to the Bonds, please refer to "DEFINITION OF TAX
INCREMENT", "THE MERCHANTS SQUARE EDA AND TAX INCREMENT","RISKS TO OWNERS OF THE
BONDS"and "PROCEDURES FOR PROPERTY ASSESSMENT, TAX LEVY AND COLLECTION" herein, and the
ACCOUNTING REPORT contained in APPENDIX C to this Offering Memorandum.)
Taxpayer Payments
The Commission and the Taxpayer will enter into the Taxpayer Agreement dated as of February 1, 1998 pursuant to which
the Taxpayer agrees to make Taxpayer Payments if the funds available in the Tax Increment Subaccount are less than the
Minimum Tax Increment due. The Minimum Tax Increment is equal to 125% of the sum of the interest payment due on the
next February 1 or August 1 and half of the principal due on the next February 1 until the Supplemental Reserve Requirement
(defmed hereinafter)is fully funded, and 100% of the sum thereafter. On or before each July 1 and January 2, beginning July
1, 1999, the Trustee is to determine whether the funds available in the Tax Increment Subaccount equal or exceed the
Minimum Tax Increment. If it is less, the Trustee is to notify the Underwriter, the Commission, and the Taxpayer on or
before July 10 and January 10, respectively, of the amount of the deficiency(the "Taxpayer Payment"). After receipt of such
notice by the Trustee, the Taxpayer shall pay the Taxpayer Payment on or before the immediately succeeding July 15 or
January 15 to the Trustee for the Owners of the Bonds. If the notice is not received by the Taxpayer from the Trustee by July
15 or January 15, the Taxpayer Payment shall be due within two business days after receipt of such notice by the Taxpayer
from the Trustee. The Trustee shall deposit the Taxpayer Payment into the Taxpayer Payment Subaccount and the Taxpayer
Payment Reserve Subaccount created under the Bond Resolution. See "FUNDS AND ACCOUNTS" and "RISKS TO
OWNERS OF THE BONDS"herein, and refer also to the Bond Resolution in APPENDIX D and the Taxpayer Agreement
in APPENDIX F to this Offering Memorandum. For information about the Taxpayer, see APPENDIX A.
-6-
SECURITY AND SOURCES OF PAYMENT(Cont'd)
A Debt Service Reserve Account will be funded from Bond proceeds in an amount equal to the Debt Service Reserve
Requirement (as defined in the Bond Resolution) which is anticipated to be equal to 10% of the par amount of the
Bonds. A Supplemental Reserve will be built-up from surplus Tax Increment and/or Taxpayer Payments until it equals
twice the amount of the Debt Service Reserve Requirement until January 1, 2009 (at which time, certain amounts
therein will be utilized to fund on February 1, 2009 a partial redemption of the Bonds), and will be maintained in an
amount equal to the Debt Service Reserve Requirement after January 1, 2009 (the "Supplemental Reserve
Requirement"). (Refer also to the "FUNDS AND ACCOUNTS" section herein.)
DEFINITION OF TAX INCREMENT
The debt service is payable from Tax Increment resulting from property taxes paid by owners of real property (the
"Tax Increment") within the EDA, all of which is an allocation area within the meaning of the Act, and collected in
the Allocation Fund of the Commission pursuant to the Bond Resolution. All Tax Increment must be paid into the
Allocation Fund under IC 36-7-14-39 and the Bond Resolution. The base assessed value for purposes of this allocation
means the net assessed value of all the property in the allocation area as finally determined for the assessment date
immediately preceding the effective date of a declaratory resolution adopted pursuant to IC 36-7-14-39 establishing the
allocation area. The base assessment date for the real property in the EDA is March 1, 1996, except for the parcels
added in the expansion of the EDA, the base assessment date of which is March 1, 1997.
The incremental assessed value is determined by subtracting the base assessed value from the current assessed value
as of the assessment date. The incremental assessed value is then multiplied by the current property tax rate to
determine the Tax Increment. IC 36-7-14-39.5 entitles taxpayers within an allocation area to credit(the "Additional
Credit") payable from Tax Increment equal to the State Property Tax Replacement Credit (the "PTRC") unless a
redevelopment commission recommends that the municipal legislative body pass a resolution to deny the Additional
Credit. At this time, the Commission has taken no action to deny the Additional Credit in the EDA. The Taxpayer
Agreement provides that the Commission will consider recommending that the municipal legislative body pass a
resolution to deny the Additional Credit if so requested by the Taxpayer if the collection of Tax Increment is less than
the annual debt service due on the Bonds.
On February 3, 1998,the Indiana Senate passed SB 352, which would eliminate the school general fund from
the property tax levy imposed by school corporations in Indiana. The effect of this legislation would be to
eliminate the property tax rate attributable to the school general fund from the combined tax rates used to
calculate tax increment. Neither the City,the Commission nor the District can predict the likelihood of further
action by the Indiana House of Representatives on SB 352,nor the ultimate enactment of SB 352 into law. Such
legislation, if enacted,could cause a 36%reduction in annual Tax Increment which would increase the likelihood
that Taxpayer Payments would be needed to pay debt service on the Bonds.
Pursuant to Indiana law, property taxes are due and payable to the County Treasurer each May 10 and November 10.
Before July 15 of the preceding calendar year, the Commission must determine and notify the County Auditor of the
amount by which Tax Increment payable to the Allocation Fund is expected to exceed the amount of Tax Increment
obligations which maybe legally paid with such Tax Increment, including debt service on the
necessary to meet the g
ne ry g
Bonds and debt service on any parity obligations. Excess Tax Increment may be used as provided in the Bond
Resolution. After property taxes are paid to the County Treasurer as described above, on or before each June 30 and
December 31, such taxes are paid over to the County Auditor who, based on the previous year's certification, pays
thePo property rtion of ro erty tax receipts which represents Tax Increment into the Allocation Fund. See "PROCEDURES
FOR PROPERTY ASSESSMENT, TAX LEVY AND COLLECTION."
Pursuant to the Bond Resolution, Tax Increment collected in the EDA will be paid immediately into the Tax Increment
Subaccount of the Bond Principal and Interest Account of the Allocation Fund held by the Trustee. Excess Tax
Increment will be used to replenish the Debt Service Reserve Account, if needed, and then flow into the Supplemental
Reserve Subaccount and the Improvement Subaccount of the General Account as described the Bond Resolution.
See "FUNDS AND ACCOUNTS"herein and the BOND RESOLUTION contained in APPENDIX D.
-7-
THE MERCHANTS SQUARE EDA AND TAX INCREMENT
On February 18, 1997, the Commission adopted a Declaratory Resolution (which was confirmed on April 21, 1997)
which established the Merchants Square Economic Development Area and designated the EDA as an"Allocation Area"
for purposes of capturing Tax Increment. The EDA and the Allocation Area were expanded on February 2, 1998. The
EDA lies within the City of Carmel in Hamilton County, Indiana. The EDA is located just west of Keystone Avenue
between Carmel Drive and 116`h Street in the heart of Carmel. Ben Mar, LLC (one of the entities comprising the
Taxpayer) is undertaking a major rehabilitation of a shopping center called Keystone Square. The renovated shopping
center, known as Merchants Square, will include an upscale Marsh Supermarket store, and numerous retail and specialty
stores, including a Paul Harris and Old Navy, and certain outlot developments (all together referred to throughout the
Offering Memorandum as the "Merchants Square Development"). The Merchants Square Development will be the
primary contributor of Tax Increment in the EDA. With the exception of Marsh and certain outlots who will own their
own stores, the remainder of the stores in the shopping mall will be owned by Ben Mar, LLC who will lease the stores
to the tenants. The road improvements (the Project) to be funded with the Bonds will facilitate traffic flow into and
through the EDA. Please refer to "THE TAXPAYER" section herein and to APPENDIX A for additional information
on the Taxpayer and the Merchants Square Development.
A part of the Merchants Square Development, the West building, a newly constructed 26,200 square foot building located
adjacent to the main mall building, has been open since the summer of 1997 and is currently leased to five tenants. The
West building was assessed as 35% complete as of the March 1, 1997 assessment date. Presently, construction is
underway on the Marsh store and the Merchants Square mall complex, which are anticipated to be partially assessed as
of the March 1, 1998 assessment date. The entire Merchants Square shopping center, including the Marsh store and the
outlot developments, are anticipated to be substantially completed and open by the end of 1998 and 100% assessed as
of March 1, 1999.
THE TAXPAYER
The following summaries are qualified in their entirety by, and should be read in conjunction with, the more detailed
information and compiled financial statements (including the notes thereto) contained in APPENDIX A of this Offering
Memorandum. Prospective purchasers should carefully review those financial statements to evaluate the
Taxpayer's ability to make Taxpayer Payments.
The Linder Company(the predecessor of Linder Group, Inc.)was formed in 1982 as a two-person real estate brokerage
company headed by founder Gary I. Linder in Indianapolis, Indiana. Over the last decade and a half, the Linder
Company of Indiana Inc. and certain of its affiliated entities have been engaged in real estate brokerage and property
management in Indiana, Ohio, and Michigan.
The Linder Company of Indiana, Inc. and its affiliated entities presently employ 13 full-time brokers and 25 additional
employees with offices in Indianapolis, Cincinnati, Dayton and Detroit, and may soon add an office in Columbus, Ohio.
The firm leases or manages over seven million square feet of retail property. Retail clients have included Target, Office
Max, Sears Hardware, Champps, Houlihan's, Planet Hollywood, Walgreen's and many others.
Ben Mar, LLC (one of the affiliates of the Taxpayer)is undertaking the$24 million redevelopment and remerchandising
of the existing Keystone Square Mall in Carmel, Indiana, called "Merchants Square" (the Merchants Square
Development). Merchants Square will be owned by Ben Mar, LLC (excluding the Marsh store and certain outlots) and
leased and managed by The Linder Company of Indiana, Inc.. The Merchants Square Development is the first major
development undertaken by affiliates of the Taxpayer. The success of the Merchants Square Development will affect
the Taxpayer's ability to make Taxpayer Payments.
Additional information about the Taxpayer is provided in APPENDIX A. Refer also to"RISKS TO OWNERS OF THE
BONDS" herein.
-8-
FUNDS AND ACCOUNTS
The Bond Resolution establishes certain funds and accounts and the flow of funds. (This information is presented in
summary form. For greater detail, refer to sections 10 and 11 of the Bond Resolution in APPENDIX D of this Offering
Memorandum).
Upon delivery of the Bonds, the Bond proceeds and accrued interest will be deposited into the following funds and
accounts held by the Trustee as further described hereinafter. Bond proceeds equal to the Debt Service Reserve
Requirement will be deposited in the Debt Service Reserve Account. An amount of Bond proceeds and accrued interest,
together with anticipated interest earnings, sufficient to pay interest on the Bonds through August 1, 1999, will be
deposited in the Capitalized Interest Subaccount. The remaining proceeds of the Bonds will be deposited in the
Redevelopment District Capital Fund(the"Capital Fund") and will be used to pay the Costs of the Project and issuance
expenses of the Bonds.
Capital Fund: The Capital Fund will be created and established pursuant to Indiana Code 36-7-14-26. Proceeds of the
Bonds deposited in the Capital Fund will be deposited in a separate bank account of the Commission, and kept separate
and apart from all other funds of the City, the Commission and the District and may be invested only in Qualified
Investments. The Trustee will administer the Capital Fund in accordance with the Bond Resolution. The proceeds in
the Capital Fund and investment earnings on amounts in the Capital Fund may be expended only to pay the Costs of the
Project and debt service on the Bonds.
Before the 11th day of each calendar month, the Trustee will notify the Commission of the amount in the Capital Fund
at the close of business on the last day of the preceding month. The Trustee will disburse from the Capital Fund the
amount or amounts required for the payment of the Costs of the Project upon the receipt of one or more duly authorized
claims filed in accordance with State law and approved by the Commission. If, after payment of all such claims, any
funds remain in the Capital Fund, the Trustee will transfer all moneys then in the Capital Fund(except moneys reserved
to pay any disputed or unpaid claims), as directed by the Commission, to the Bond Principal and Interest Account to pay
debt service on the Bonds or, as directed by the Commission, for the same purpose or type of project for which the
Bonds were issued.
Allocation Fund. An Allocation Fund will be established, and in the Allocation Fund there will be established(i)a Bond
Principal and Interest Account (consisting of a Capitalized Interest Subaccount, a Tax Increment Subaccount, and a
Taxpayer Payment Subaccount), (ii) a Debt Service Reserve Account, and (iii) a General Account (consisting of a
Supplemental Reserve Subaccount, a Taxpayer Payment Reserve Subaccount, and an Improvement Subaccount). The
Allocation Fund and the accounts established thereunder will be held by the Trustee.
All Tax Increment will immediately, upon receipt by the City, be deposited with the Trustee and set aside in the
following accounts, in the following order of priority:
,i (a) Tax Increment Subaccount of the Bond Principal and Interest Account;
(b) Debt Service Reserve Account;
(c) Supplemental Reserve Subaccount of the General Account; and
(d) Improvement Subaccount of the General Account.
i All Taxpayer Payments will immediately, upon receipt by the Trustee, be deposited in the following accounts in the
following order of priority:
(a) Taxpayer Payment Subaccount of the Bond Principal and Interest Account;
(b) Debt Service Reserve Account; and
(c) Taxpayer Payment Reserve Subaccount of the General Account.
The Tax Increment and any Taxpayer Payments will be held as part of the Trust Estate and pledged for the benefit of
the Owners of the Bonds and will be applied, used and withdrawn only for the purposes described under Section 11,
"Flow of Funds" of the Bond Resolution. Tax Increment, Taxpayer Payments, and amounts in the Allocation Fund shall
be invested in Qualified Investments as directed by the Clerk-Treasurer. Investment earnings in the Allocation Fund and
in each account will be credited to such fund or account. Funds in the Supplemental Reserve Subaccount and the
Taxpayer Payment Subaccount will be invested in Qualified Investments at a yield not in excess of the yield on the
Bonds.
-9-
FUNDS AND ACCOUNTS (Cont'd)
Bond Principal and Interest Account:
Capitalized Interest Subaccount: Bond proceeds deposited in the Capitalized Interest Subaccount of the Bond Principal
and Interest Account,and investment earnings on such proceeds,will be used only to pay interest on the Bonds beginning
on August 1, 1998 and on each August 1 and February 1 thereafter until the Capitalized Interest Subaccount is depleted.
The initial amount to be deposited in the Capitalized Interest Subaccount at closing,to be funded from Bond proceeds and
accrued interest, will be equal to the interest due on the Bonds through August 1, 1999 reduced by the amount of
anticipated interest earnings on the initial capitalized interest from the Bond closing date through August 1, 1999. The
initial amount to be deposited in the Capitalized Interest Subaccount will take into consideration the estimated Debt Service
Reserve interest earnings from the Bond closing date through August 1, 1999 anticipated to be available in the Tax
Increment Subaccount.
Tax Increment Subaccount: There will immediately be set aside from the Allocation Fund and deposited into the Tax
Increment Subaccount of the Bond Principal and Interest Account,upon receipt of Tax Increment by the City,an amount
of money which, after taking into account moneys already in the Capitalized Interest Subaccount, is equal to the debt
service on the Bonds due and payable on the immediately succeeding February 1 and August 1 until the amount on deposit
in the Bond Principal and Interest Account is sufficient to pay debt service payable through the next February 1. If the
funds in the Tax Increment Subaccount are not sufficient to pay debt service payable through the next February 1 on the
applicable dates, Taxpayer Payments in an amount sufficient to make up the shortfall allocable to the Bonds will be
deposited in the Taxpayer Payment Subaccount of the Bond Principal and Interest Account as provided below. No deposit
need be made to the Tax Increment Subaccount to the extent that the available amount in the Bond Principal and Interest
Account is at least equal to the amount of debt service becoming due and payable on all outstanding Bonds through the
next February 1. All money in the Tax Increment Subaccount will be used and withdrawn solely for the purpose of paying
debt service as it becomes due and payable (including accrued interest on any Bonds purchased or redeemed prior to
maturity).
Taxpayer Payment Subaccount: If,on any January 2 or July 1,the amount in the Tax Increment Subaccount is less than
the Minimum Tax Increment(125%of the debt service until the Supplemental Reserve is fully funded,and 100%of the
debt service thereafter)for that date,the Trustee is directed to implement the procedures in the Taxpayer Agreement for
collecting the Taxpayer Payments from the Taxpayer to be applied toward the Bonds. All Taxpayer Payments so collected
will be deposited immediately into the Taxpayer Payment Subaccount and used to pay the principal of and interest due on
the Bonds on the immediately succeeding February 1 or August 1. Taxpayer Payments will be deposited in the Taxpayer
Payment Subaccount until the balance,together with funds in the Tax Increment Subaccount, is sufficient to pay debt
service due on the Bonds through the next February 1. Any excess amount will be transferred to the Debt Service Reserve
Account, if needed,and then to the Taxpayer Payment Reserve Subaccount of the General Account.
Debt Service Reserve Account: Initially, an amount of Bond proceeds equal to the Debt Service Reserve Requirement
(anticipated to be $265,500)will be deposited into the Debt Service Reserve Account at closing. If the balance in the
Debt Service Reserve Account is ever less than the Debt Service Reserve Requirement, all Tax Increment and Taxpayer
Payments not required for the Bond Principal and Interest Account will be deposited in the Debt Service Reserve
Account until the balance equals the Debt Service Reserve Requirement. Moneys deposited and maintained in the Debt
Service Reserve Account will be applied to the payment of the principal of and interest on the Bonds to the extent that
amounts in the Bond Principal and Interest Account and the General Account are insufficient. If moneys in the Debt
Service Reserve Account are ever depleted, the Debt Service Reserve Account will be replenished from any moneys in
the General Account and from the next available Tax Increment and Taxpayer Payments after the required deposits to
the Tax Increment Subaccount and the Taxpayer Payment Subaccount, respectively, of the Bond Principal and Interest
Account are made. Any moneys in the Debt Service Reserve Account in excess of the Debt Service Reserve
Requirement(including investment earnings)will be deposited into the Tax Increment Subaccount.
General Account:
Supplemental Reserve Subaccount: After making the deposits described above into the Tax Increment Subaccount of
the Bond Principal and Interest Account and into the Debt Service Reserve Account, the Trustee will deposit any
remaining Tax Increment into the Supplemental Reserve Subaccount of the General Account of the Allocation Fund until
the balance in this Subaccount, together with the balance in the Taxpayer Payment Reserve Subaccount, equals the
Supplemental Reserve Requirement.
-10-
FUNDS AND ACCOUNTS (Cont'd)
Improvement Subaccount: After making the required deposits into the Supplemental Reserve Subaccount,and subject to
"Extraordinary Redemption" (described below), the Trustee will deposit any remaining Tax Increment into the
Improvement Subaccount to be applied in the following order of priority:
(i) to pay debt service due on the Bonds;
(ii) to fund or replenish the Debt Service Reserve Account or the Supplemental Reserve Subaccount;
(iii) at the option of the Commission,to redeem or purchase the Bonds prior to maturity;or
(iv) to pay debt service due on any subordinate obligations;
(v) at the option of the Commission,to pay,or reimburse the City for,the costs of acquiring or constructing
additional local public improvements in the EDA;
(vi) for any other purposes permitted by the Act,including distributions to the taxing units as provided under
the Act.
Taxpayer Payment Reserve Subaccount: After making the deposits described above into the Taxpayer Payment
Subaccount of the Bond Principal and Interest Account and into the Debt Service Reserve Account,the Trustee will deposit
any remaining Taxpayer Payments in the Taxpayer Payment Reserve Subaccount of the General Account until the balance
in this Subaccount,together with the balance in the Supplemental Reserve Subaccount,equals the Supplemental Reserve
Requirement. Upon retirement of all of the Bonds,any balance in the Taxpayer Reserve Subaccount will be returned to
the Taxpayer.
Monies deposited and maintained in the Supplemental Reserve Subaccount and the Taxpayer Payment Reserve Subaccount
will be applied on a pro rata basis(based on their respective subaccount balances)in the following order of priority: (i)
to pay debt service on the Bonds to the extent that other funds are insufficient;and(ii)to fund or replenish the Debt Service
Reserve Account(after the Improvement Subaccount is depleted).
Extraordinary Redemption: If the collective balance in the Supplemental Reserve Subaccount and the Taxpayer Payment
Reserve Subaccount exceeds the Supplemental Reserve Requirement,the Commission will direct the Trustee either to
redeem a portion of the Bonds solely from funds in the Supplemental Reserve Subaccount, or to return funds in the
Taxpayer Payment Reserve Subaccount to the Taxpayer to the extent thereafter that the moneys on deposit in the
Supplemental Reserve Subaccount and the Taxpayer Payment Reserve Subaccount exceed the Supplemental Reserve
Requirement or there are no longer Bonds outstanding. On February 1,2009 after the Supplemental Reserve Requirement
is reduced on January 1, 2009, the Trustee will, without further direction, redeem the Bonds solely from funds in the
Supplemental Reserve Subaccount at face value plus interest accrued to the redemption date in an amount equal to(within
authorized denominations)the excess amount above the reduced Supplemental Reserve Requirement to the extent that
funds are available in the Supplemental Reserve Subaccount.
INVESTMENTS
The proceeds of the Bonds are to be invested in accordance with the laws of the State of Indiana relating to the
depositing, holding, securing or investing of public funds, including particularly Indiana Code 5-13, and the acts
amendatory thereof and supplemental thereto. The City Clerk-Treasurer shall direct the investment of Bond proceeds.
-11-
ADDITIONAL BONDS
Parity Obligations: The Commission has reserved the right to issue additional bonds or enter into leases on a parity with
the Bonds payable from the Tax Increment("Parity Obligations")to pay for additional public improvements or economic
development projects in or serving the EDA, or to refund the Bonds or other Parity Obligations, subject to certain
conditions precedent including(i)all principal and interest payments are current, (ii)an independent certifier has certified
that the estimated Tax. Increment is equal to at least 150% of debt service or lease rental due on the Bonds and on any
Parity Obligations, and (iii) the same payment dates are used as on the Bonds. Except as provided in the Bond
Resolution, the terms and conditions of such Parity Obligations will be set forth in a resolution authorizing their issuance.
The Taxpayer Payments shall be calculated, as provided in the Taxpayer Agreement, as if the Parity Obligations had
not been issued. (See Section 12 of the Bond Resolution.)
Subordinate Obligations: The Commission may issue bonds or other obligations or enter into leases which are junior
and subordinate to the Bonds payable from the Tax Increment. The terms and conditions of such Subordinate Obligations
will be set forth in a resolution adopted by the Commission. (See Section 12 of the Bond Resolution.)
REDEMPTION PROVISIONS
Optional Redemption:
The Bonds maturing on February 1, 2009 and thereafter, are redeemable at the option of the Commission on October
1, 2007, or any date thereafter, on 30 days' notice, in whole or in part, in order of maturity determined by the
Commission and by lot within maturities, at face value, together with the following premiums:
2% if redeemed on October 1, 2007, or thereafter
on or before September 30, 2008;
1% if redeemed on October 1, 2008, or thereafter
on or before September 30, 2009;
0% if redeemed on October 1, 2009, or thereafter prior to maturity;
plus accrued interest to the date fixed for redemption.
If fewer than all of the Bonds are called for redemption at one time, the Bonds shall be redeemed within a maturity or
maturities selected by the Commission. The Registrar will select the particular Bonds within a maturity or portion to
be redeemed in principal amounts of whole multiples of$5,000 by lot in such a manner as it deems fair and appropriate.
If some Bonds are to be redeemed by optional redemption and mandatory sinking fund redemption on the same date, the
Registrar shall select by lot the Bonds for optional redemption before selecting the Bonds by lot for the mandatory sinking
fund redemption.
Extraordinary Redemption:
The Bonds maturing after February 1, 2009 are subject to redemption solely from amounts in the Supplemental Reserve
Subaccount. If the collective balance in the Supplemental Reserve Subaccount and the Taxpayer Payment Reserve
Subaccount equals or exceeds the Supplemental Reserve Requirement,the Commission will direct the Trustee to use any
excess to redeem Bonds solely from amounts in the Supplemental Reserve Subaccount(and not the Taxpayer Payment
Reserve Subaccount) under the optional redemption provisions described above, or to return funds in the Taxpayer
Payment Reserve Subaccount to the Taxpayer to the extent thereafter that the moneys on deposit in the Supplemental
Reserve Subaccount and the Taxpayer Payment Reserve Subaccount exceed the Supplemental Reserve Requirement or
there are no longer Bonds outstanding. After the Supplemental Reserve Requirement is reduced on January 1,2009,then,
on February 1,2009,the Trustee will without further direction,redeem a portion of the Bonds at face value plus interest
accrued to the redemption date in an amount equal to (within authorized denominations)the excess amount above the
reduced Supplemental Reserve Requirement to the extent that funds are available in the Supplemental Reserve Subaccount
(and not from the Taxpayer Payment Reserve Subaccount).
-12-
REDEMPTION PROVISIONS (Cont'd)
Mandatory Sinking Fund Redemption:
The Bonds maturing on February 1, 2008*and February 1, 2018* (the "Term Bonds") are subject to mandatory sinking
fund redemption prior to maturity at a redemption price equal to the principal amount thereof plus accrued interest on
the date and in the amounts in accordance with the following schedule:
Term Bonds due February 1. 2008* Term Bonds due February 1. 2018*
Date Amount Date Amount
2/1/03 $100,000 2/1/09 $ 100,E
2/1/04 100,000 2/1/10 150,000
2/1/05 100,000 2/1/11 160,000
2/1/06 100,000 2/1/12 170,000
2/1/07 100,000 2/1/13 180,000
2/1/08 Final maturity 105.000 2/1/14 195,000
2/1/15 210,000
Total $605.000 2/1/16 225,000
2/1/17 240,000
2/1/18 Final maturity 420.000
Total $2.050.000
The Paying Agent shall credit against the mandatory sinking fund requirement for the Bonds maturing as term bonds,
and corresponding mandatory redemption obligation, in the order determined by the Commission, any Bonds maturing
as term bonds which have previously been redeemed (otherwise than as a result of a previous mandatory redemption
requirement) or delivered to the Registrar for cancellation or purchased for cancellation by the Commission and not
theretofore applied as a credit against any redemption obligation. Each Bond maturing as a term bond so delivered or
canceled shall be credited by the Paying Agent at 100% of the principal amount thereof against the mandatory sinking
fund obligation on such mandatory sinking fund date, and any excess of such amount shall be credited on future
redemption obligations, and the principal amount of the Bonds to be redeemed by operation of the mandatory sinking
fund requirement shall be accordingly reduced; provided, however, the Paying Agent shall credit such Bonds maturing
as term bonds only to the extent received on or before 45 days preceding the applicable mandatory redemption date.
Notwithstanding anything in this Offering Memorandum to the contrary, no Bond or portion thereof shall be redeemed
if, as a result, such Bond or portion thereof would be outstanding under the Bond Resolution in less than the minimum
authorized denomination of$100,000. In such event, such Bond shall be redeemed in whole or that portion of such Bond
outstanding in a principal amount in excess of such minimum authorized denomination shall be redeemed, the Registrar
being authorized and directed to select the particular Bonds or portions thereof to be redeemed in such manner as it
deems fair and appropriate.
*Preliminary, subject to change.
Notice of Redemption:
Notice of redemption shall be given at least 30 days prior to the date fixed for redemption by mail unless the notice is
waived by the registered owner of a Bond. Such notice shall be mailed to the address of the registered owners as shown
on the registration records of the Registrar. Interest on the Bonds so called for redemption shall cease on the redemption
date fixed in such notice if sufficient funds are available at the principal office of the Paying Agent to pay the redemption
price on the date so named.
See Section 3(C),(D), and (E) and Section 11(D)(4) of the Bond Resolution for a complete description of redemption
provisions.
-13-
BOOK-ENTRY SYSTEM
The Depository Trust Company, New York, New York, will act as securities depository for the Bonds and the Bonds
will be issued as fully-registered securities in the name of Cede & Co., DTC's nominee. One fully-registered Bond
certificate will be issued for each maturity of the Bonds, each in the principal amount of such maturity. See "BOOK-
ENTRY SYSTEM."
DTC is a limited-purpose trust company organized under the State of New York Banking Law, a "banking organization"
within the meaning of the New York State Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds securities
that its participants (the "Participants") deposit with DTC. DTC also facilitates the settlement among Participants of
securities transactions, such as pledges and transfers, in deposited securities through electronic computerized book-entry
changes in accounts of the Participants, thereby eliminating the need for physical movement of securities certificates.
Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other
organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system
is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly (the "Indirect Participants"). The Rules applicable
to DTC and its Participants are on file with the Securities and Exchange Commission.
Purchases of Bonds under the DTC system must be made by or through Direct Participants which will receive a credit
for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond (the "Beneficial
Owners")is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the
Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership interest in the Bonds, except in the event
that use of the Book-Entry System for the Bonds is discontinued.
To facilitate subsequent transfers, Bonds deposited by Participants with DTC are registered in the name of DTC's
partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede &Co.
effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's
records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf
of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory and regulatory requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to Bonds. Under its usual procedures, DTC mails an
Omnibus Proxy to the Commission as soon as possible after the record date. The Omnibus Proxy assigns Cede &Co.'s
consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Debt Service on the Bonds will be paid to DTC. DTC's practice is to credit the accounts of the Direct Participants in
accordance with their respective holdings shown on the records of DTC unless DTC has reason to believe that it will
not receive payment on payable date. Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is now the case with municipal securities held for the accounts of customers in
bearer form or registered in "street name," and will be the responsibility of such Participants and not of DTC, the
Commission, the City, the District, the Taxpayer, the Trustee or the Paying Agent. Payment of principal and interest
to DTC is the responsibility of the Commission or the Trustee and the Paying Agent; disbursement of such payments
to Direct Participants shall be the responsibility of DTC; and disbursement of such payments to the Beneficial Owners
shall be the responsibility of Direct and the Indirect Participants.
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BOOK-ENTRY SYSTEM (Cont'd)
DTC may determine to discontinue providing its service with respect to the Bonds at any time by giving reasonable
notice to the Commission. Under such circumstances, in the event that a successor securities depository is not obtained,
security certificates are required to be printed and delivered.
The Commission may determine that continuation of the system of book-entry transfer through DTC (or a successor
securities depository) is not in the best interest of the Beneficial Owners. In such event, Bond certificates will be
delivered as described in the Bond Resolution.
The information under"BOOK-ENTRY SYSTEM"concerning DTC and DTC's book-entry system has been obtained
from sources that the Commission,
the City and the Taxpayer believe to be reliable, but the Commission, the City and
the Taxpayer take no responsibility for the accuracy thereof.
In the event that either(1)the Commission receives notice from DTC to the effect that DTC is unable or unwilling to
discharge its responsibilities as a clearing agency for the Bonds or (2) the Commission elects to discontinue its use of
DTC as a clearing agency for the Bonds, then the Commission and the Paying Agent will do or perform or cause to be
done or performed all acts or things, not adverse to the rights of the holders of the Bonds, as are necessary or
appropriate to discontinue use of DTC as a clearing agency for the Bonds and to transfer the ownership of each of the
Bonds to such person or persons, including any other clearing agency, as the holder of such Bonds may direct in
accordance with the Bond Resolution. Any expenses of such a discontinuation and transfer, including any expenses of
printing new certificates to evidence the Bonds will be paid by the Commission.
AS PROVIDED IN THE BOND RESOLUTION,THE RIGHTS OF THE BENEFICIAL OWNERS OF THE BONDS,
INCLUDING WITHOUT LIMITATION THE RIGHT OF BENEFICIAL OWNERS TO RECEIVE NOTICES AND
TO CONSENT TO CERTAIN ACTIONS OR OMISSIONS UNDER THE BOND RESOLUTION, ARE IN CERTAIN
CASES SUBJECT TO AND DEPENDENT UPON THE ACTIONS AND PROCEDURES OF AND AGREEMENTS
AND ARRANGEMENTS AMONG DTC AND THE DTC PARTICIPANTS. BENEFICIAL OWNERS OF THE
BONDS ARE ADVISED TO CLARIFY AND CONFIRM SUCH ACTIONS,PROCEDURES, AGREEMENTS AND
ARRANGEMENTS DIRECTLY WITH THE APPLICABLE DTC PARTICIPANTS.
WITH RESPECT TO THE BONDS REGISTERED IN THE NAME OF DTC OR CEDE&CO., AS NOMINEE OF
DTC, THE COMMISSION, THE CITY, THE DISTRICT, THE TAXPAYER, THE UNDERWRITER, THE
TRUSTEE AND THE PAYING AGENT WILL NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY
DTC PARTICIPANT, INDIRECT PARTICIPANT OR BENEFICIAL OWNER OF THE BONDS WITH RESPECT
TO: (1)THE ACCURACY OF THE RECORDS MAINTAINED BY DTC,CEDE&CO.,ANY DTC PARTICIPANT
OR INDIRECT PARTICIPANT WITH RESPECT TO OWNERSHIP QUESTIONS; (2) THE PAYMENT BY DTC,
ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL
OWNER IN RESPECT OF THE BONDS; (3)THE DELIVERY OR TIMELINESS OF DELIVERY BY DTC, ANY
DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH
IS REQUIRED OR PERMITTED UNDER THE BOND RESOLUTION; (4) THE SELECTION OF BENEFICIAL
OWNERS TO RECEIVE PAYMENTS IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR
(5)ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC OR ITS NOMINEE, CEDE&CO., AS THE
OWNER OF THE BONDS.
NOTICE TO PURCHASERS
The Bonds have not been registered pursuant to the Securities Act of 1933, as amended(the "Securities Act"), or the
securities laws of any state. Further, the Bond Resolution limits the initial offering of the Bonds, or any sale thereof
in the secondary market, to persons who are "Accredited Investors" as defined under Rule 501(a)of Regulation D of
the Securities Act. See "INVESTOR SUITABILITY STANDARDS" herein. Neither the Commission nor the
Underwriter has agreed or is required to register the Bonds under the Securities Act. A restrictive legend will be
placed on the Bonds stating that they have not been registered under the Securities Act and setting forth restrictions
to ownership and transferability. See "INVESTOR SUITABILITY STANDARDS" herein. In connection with any
resale of the Bonds in the secondary market,purchasers must execute and deliver to the Trustee an investor suitability
letter containing certain representations and agreements in the form attached in APPENDIX G.
See "RISKS TO OWNERS OF THE BONDS".
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Offering Memorandum under "INTRODUCTION," "SECURITY AND SOURCES OF
PAYMENT OF THE BONDS," "TAX INCREMENT," "THE TAXPAYER," "RISKS TO OWNERS OF THE
BONDS" and APPENDIX C --Accounting Report, among others, constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the
Taxpayer, the Merchants Square Development, and the Project, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking statements. Such factors include, among
others, the following: competition; substantial leverage; changes in government regulations; proposed legislation;
pending litigation; acquisition of permits, licenses and approvals; actual assessments of the Merchants Square
Development; success of construction and operating initiatives; and other factors described in this Offering
Memorandum.
RISKS TO OWNERS OF THE BONDS
Prospective purchasers of the Bonds should consider carefully the following risk factors, in addition to the other
information contained in this Offering Memorandum.
Risk Factors Related to the Tax Increment, the Bonds and the Security for the Bonds
1. Limited Liability of the City. The Bonds are payable solely from the Trust Estate, including the Tax Increment and
the Taxpayer Payments. The Commission has no source of moneys from which to pay the Bonds other than Tax
Increment and Taxpayer Payments and potential moneys and investments(together with interest and other earnings)
which are held as part of the Trust Estate.
2. General Risks of Tax Increment. Tax Increment available to pay debt service due on the Bonds is based on assessed
valuation of completed and proposed developments in the EDA since the base assessment date. There are certain
risks associated with the Tax Increment estimates such as, but not limited to, the following: (i) destruction of
property in the EDA caused by natural disaster; (ii) delinquent taxes or adjustments of or appeals on assessments
by property owners in the EDA (although Ben Mar, LLC (one of the entities constituting the Taxpayer) will own
the majority of the property in the EDA, Ben Mar, LLC is not the only taxpayer in the EDA, and neither Ben Mar,
LLC or the other taxpayers in the EDA have covenanted not to appeal to reduce their assessments), (iii) the Clay
Township Assessor may assess the real property improvements in the EDA below the estimated assessed values
set forth in the Accounting Report attached to this Offering Memorandum as Appendix C (the projections of Tax
Increment set forth in the Accounting Report are based solely on construction plans, construction schedules and
construction cost information provided by the Taxpayer about the Merchants Square Development and assessed
value estimates prepared by the Property Tax Consultant and the Clay Township Assessor); (iv) delayed billing,
collection or distribution of Tax Increment by the Hamilton County Auditor; (v) a decrease in property tax rates
or increase in the State Property Tax Replacement Credit(the "PTRC")which would increase the Additional Credit
applied to the Tax Increment and reduce the Tax Increment available to pay Debt Service; (vi) the General
Assembly, the courts, the State Board of Tax Commissioners or other administrative agencies with jurisdiction in
the matter could enact new laws or regulations or interpret, amend, alter, change or modify the laws or regulations
governing the calculation, collection, definition or distribution of Tax Increment including, laws or regulations
relating to reassessment, the Additional Credit or a revision in the property tax system that could affect the Tax
Increment(see paragraphs about pending litigation and proposed legislation below); (vii)a decrease in the assessed
value of property in the EDA due to increases in depreciation or obsolescence or other factors by the Clay
Township Assessor; (viii) acquisition of property in the EDA by a tax-exempt entity; or(ix) removal or demolition
of real property improvements by Ben Mar, LLC or other property owners in the EDA, would reduce the Tax
Increment available to pay the Bonds.
3. Reduction of Tax Rates or Tax Collection Rates. Any substantial increase in State or federal aid or other sources
of local revenues which would reduce local required fiscal support for certain public programs or any substantial
increase in assessments outside the EDA could reduce the rates of taxation by the taxing bodies levying taxes upon
property within the EDA and have an adverse effect on the amount of Tax Increment received by the Commission.
Economic conditions or administrative action could reduce the collection rate achieved by the City within its
jurisdiction, including the EDA.
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RISKS TO OWNERS OF THE BONDS (Cont'd)
4. Pending Litigation. On December 22, 1997, the Indiana Tax Court ruled that the true tax value method of
valuing property for purposes of levying property taxes was unconstitutional and ordered the State Board
of Tax Commissioners and the Indiana General Assembly to develop a valuation system based on an objective
measure of property wealth. The Tax Court will determine how long the State Board of Tax Conunissioners
and the Indiana General Assembly will have to develop a new valuation system. Meanwhile,the old valuation
system will continue in effect. The State Board of Tax Commissioners has indicated that it will appeal this
ruling. The Commission cannot predict the impact on property tax collections, or the timing of, future
judicial actions in this case, or of legislation, regulations or rulings enacted to implement any subsequent
ruling.Moreover,the Commission cannot predict the outcome, or timing, of any subsequent actions by the
Tax Court or the Indiana Supreme Court.
5. Pending Legislation. On February 3, 1998, the Indiana Senate passed SB 352, which would eliminate the
school general fund from the property tax levy imposed by school corporations in Indiana. The effect of this
legislation would be to eliminate the property tax rate attributable to the school general fund from the
combined tax rates used to calculate tax increment. Neither the City, the Commission nor the District can
predict the likelihood of further action by the Indiana House of Representatives on SB 352,nor the ultimate
enactment of SB 352 into law. Such legislation, if enacted, could cause a 36% reduction in annual Tax
Increment which would increase the likelihood that Taxpayer Payments would be needed to pay debt service
on the Bonds.
6. Reassessment. The next general reassessment of property in the State is scheduled to be effective for taxes
assessed March 1, 2001, for taxes payable in 2002. Reassessments are scheduled to occur every four years
thereafter. The State Board of Tax Commissioners is required by law to make a one-time adjustment to neutralize
the effect of a reassessment on property within tax increment allocation areas so that owners of obligations secured
by tax increment revenues will not be adversely affected. Delays in the reassessment process, the inability to
neutralize the effect of reassessment, or appeals of reassessments could adversely affect the owners of the Bonds.
7. Tax Increment Projections Based on Estimated Assessed Value for the Merchants Square Development. The
forecasts of Tax Increment set forth in the Accounting Report in APPENDIX C contain certain forecasts of
revenue which are dependent upon assumptions as to future events the occurrence of which cannot be guaranteed.
If the Merchants Square Development is not completed or is changed in size or scope, or if the actual assessed
values are less than estimated,the Tax Increment may not meet the forecasts shown in the Accounting Report. The
forecasted Tax Increment relies on the estimated assessed value of the proposed Merchants Square Development,
including the mall renovation, the Marsh store, and certain outlot developments, the majority of which are
currently under construction. The estimated incremental assessed value for purposes of calculating the forecasted
Tax Increment is based on construction plans, construction schedules and construction cost information provided
by the Taxpayer and preliminary assessed value estimates provided by the Property Tax Consultant (as defined
and identified in Appendix C) (upper range) and the Clay Township Assessor (lower range). The actual
assessments will be made by the Clay Township Assessor based on actual real property improvements completed
as of each March 1 assessment date, which may differ significantly from the estimates. If the Merchants Square
Development is not completed or not occupied, or if the actual assessed values are less than the estimates provided
by the Property Tax Consultant and by the Clay Township Assessor, the Tax Increment may not meet the forecasts
shown in the Accounting Report contained in APPENDIX C of this Offering Memorandum. If the Tax Increment
is less than the "upper range"forecast, the Tax Increment may not be sufficient to pay the debt service on the
Bonds as it becomes due and payable. However, the Taxpayer has covenanted to provide Taxpayer Payments as
set forth in the Taxpayer Agreement. See "Risk Factors Related to the Taxpayer" herein and APPENDIX A.
8. Additional Credit and Tax Rates Assumed in the Forecast. The forecasts also assume that the City of Carmel gross
property tax rate and PTRC (on which the calculation of the Additional Credit is based) will remain at
approximately the same level throughout the term of the Bonds. The amount of the PTRC could change if, among
other things, property taxes are levied to pay debt service on bonds issued by any taxing units overlapping the
EDA. The General Assembly could also enact legislation changing the method of calculating, or the size of, the
PTRC. Any decrease in the tax rate or increase in the PTRC could result in a decrease in the amount of Tax
Increment available to pay debt service. See "PROCEDURES FOR PROPERTY ASSESSMENT, TAX LEVY
AND COLLECTION." See "Risks to Owners of the Bonds" (4) "Pending Litigation" and (5) "Pending
Legislation".
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RISKS TO OWNERS OF THE BONDS (Cont'd)
9. Lack of Diversity of the Tax Base of the EDA. The tax base of the EDA is not diverse. Ben Mar, LLC (one of
the entities constituting the Taxpayer) will be the owner of the majority of real estate in the EDA, except for the
Marsh store and certain outlot developments.
10. Limited Market for the Bonds. There is a limited trading market for the Bonds, and there can be no assurance
regarding the future development of a market for the Bonds, or the ability of Owners of the Bonds to sell their
Bonds or the price at which Owners may be able to sell their Bonds. If such a market were to develop, the Bonds
could trade at prices that may be higher or lower than the initial offering price depending on many factors,
including prevailing interest rates, the Taxpayer's operating results and the market for similar securities.
11. No Rating on the Bonds. No application has been filed for a credit rating with respect to the Bonds and, it is not
likely that a rating would be assigned if one were so requested. Accordingly, there will be no recognized credit
rating assigned to the Bonds at the time of issuance, and it is not anticipated that such a rating will be assigned
at any time thereafter.
12. No Registration of the Bonds. The Bonds have not been registered under the Securities Act or any state securities
laws and, unless so registered, may not be offered or sold except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
See "NOTICE TO PURCHASERS" and "INVESTOR SUITABILITY STANDARDS."
Risk Factors Related to the Taxpayer
1. Limited Liability. The legal entities referred to herein as the Taxpayer are organized as either limited liability
companies or corporations and the members and shareholders thereof, respectively, will have no liability with
respect to Taxpayer Payments, but instead, only the assets of those entities will be available to satisfy any
obligation to make Taxpayer Payments.
2. No Audited Financial Statements for Taxpayer. In the Taxpayer Agreement, the Taxpayer has agreed to provide
reviewed annual financial statements for fiscal years 1998 and thereafter while the Bonds are outstanding, which
statements will be prepared by an independent certified public accountant. Further, for fiscal year 1997, the
Taxpayer has provided compiled financial statements for the first nine months of the year which have been
prepared by a certified public accountant who is not independent of the Taxpayer. Although the reviewed annual
fmancial statements will be provided to the Trustee, the Underwriter and the City no later than the first day of the
fifth month following the end of the Taxpayer's fiscal year, reviewed annual financial statements will not provide
the detail and analysis of the Taxpayer's financial condition that would otherwise be available if such financial
statements were audited. Further, although such financial statements will be made available to the purchasers of
the Bonds upon their request, neither the Trustee, the Underwriter nor the City are any under any obligation to
review or analyze the financial data contained in such financial statements or to take any action with respect thereto
as a result of the deterioration in the financial position of the Taxpayer.
3. Taxpayer's ability to make Taxpayer Payments. The Taxpayer may not have sufficient cash flows to make
Taxpayer Payments. The ability of the Taxpayer to make Taxpayer Payments is dependent in part on the success
of the Merchants Square Development. This project is the largest project of this type that the Taxpayer has
undertaken to date. See Appendix A. Although Ben Mar, LLC is a single purpose entity, bankruptcy of one of
the affiliates comprising the Taxpayer could give rise to Taxpayer Payments or a portion thereof being treated as
a voidable preference under Section 547 of the Bankruptcy Code to the extent that such payments are not treated
as property taxes. See "LEGAL OPINIONS AND ENFORCEABILITY OF THE REMEDIES"herein.
4. General Risks of Real Estate Ownership. The Taxpayer is involved in the ownership and operation of commercial
real estate, which business is highly competitive and involves numerous risks. Commercial real estate projects
are subject to risks of fluctuations in occupancy rates and operating expenses, which in turn may be affected
adversely by changes in general local economic conditions, adverse changes in interest rates and availability of
permanent mortgage funds that may render refinancing of real property difficult or unattractive, adverse changes
in real estate zoning laws and land use regulations, environmental issues, acts of God and other factors beyond
the control of any Taxpayer. Any real estate development is subject to the risk of inability to attract tenants or
retain tenants or of default by tenants. Any adverse impact on the operations of the Taxpayer may adversely affect
the ability of the Taxpayer to make Taxpayer Payments. Ben Mar, LLC is a single purpose entity and the
Merchants Square Development constitutes the first major development by such entity.
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RISKS TO OWNERS OF THE BONDS(Cont'd)
5. Competition with the Development. There are other retail developments available in the vicinity of or otherwise
competitive with the Merchants Square Development. To the extent these competing projects are more successful
than the Merchants Square Development, whether because of location, amenities, better management, lower rents,
or other factors, it will be difficult for the Merchants Square Development to achieve and maintain occupancy
levels sufficient to generate adequate revenues to profitably operate the Merchants Square Development and
maintain the value of such property.
INVESTOR SUITABILITY STANDARDS
The Bonds are being offered in reliance upon certain exemptions from registration under the Securities Act of 1933,
as amended(the "Securities Act"), including Section 4(2)of the Securities Act.
Pursuant to the Bond Purchase Agreement, the Underwriter will covenant and agree, that during the initial offering
of the Bonds, the Bonds will be offered in minimum denominations of$100,000 and only to purchasers that qualify
as "Accredited Investors" as defmed under Rule 501(a) of Regulation D of the Securities Act (and summarized
below). The Underwriter will represent that each purchaser has knowledge and experience in financial and business
matters such that it is capable of evaluating the merits and risks of the prospective investment and that it is acquiring
the Bonds for investment for its own account and not with a view to distribution. The Underwriter will further
represent that each purchaser has had an opportunity to review this Offering Memorandum in its entirety and any
other information requested for due diligence.
Pursuant to the Bond Resolution, in connection with any secondary market resale of the Bonds, the Underwriter may
offer the Bonds to an "Accredited Investor" (as defmed in the Securities Act and summarized below) who must
execute and deliver an investor suitability letter containing certain representations and agreements in the form(Exhibit
C to the Bond Purchase Agreement) attached hereto as APPENDIX G.
Accredited Investors are those investors that fall within at least one of the following categories set forth in Rule 501(a)
of Regulation D:
(a) Any bank as defmed in Section 3(a)(2) of the Securities Act, or any savings and loan association or other
institution as defmed in Section 3(a)(5)(A)of the Securities Act whether acting in its individual or fiduciary capacity;
broker or dealer registered pursuant to Section 15 of the Securities Act of 1934; insurance company as defined in
Section 2(13) of the Securities Act; investment company registered under the Investment Company Act of 1940 or
a business development company as defined in Section 2(a)(48) of the Securities Act; Small Business Investment
Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; any plan established and maintained by a State, its political subdivisions, or any agency or
instrumentally of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; employee benefit plan within the meaning to Title I of the Employee Retirement Income
Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21)of such Act,
which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of$5,000,000 or, if a self-directed plan, with investment decisions
made solely by persons that are Accredited Investors. (Rule 501(a)(1).)
(b) Any private business development company as defined in Section 202(a)(22)of the Investment Advisers Act
of 1940. (Rule 501(a)(2)).
(c) Any organization described in section 501(c)(3)of the Internal Revenue Code, corporation, Massachusetts or
similar business trust,or partnership,not formed for the specific purpose of acquiring the securities offered,with total
assets in excess of$5,000,000. (Rule 501(a)(3)).
(d)Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any
director, executive officer, or general partner of a general partner of that issuer.
(e)Any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his
purchase exceeds$1,000,000.
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INVESTOR SUITABILITY STANDARDS(Cont'd)
(f)Any natural person who had an individual income in excess of$200,000 in each of the two most recent years or
joint income with that person's spouse in excess of$300,000 in each of those years and has a reasonable expectation
of reaching the same income level in the current year;
(g) Any trust, with total assets in excess of$5,000,000 not formed for the specific purpose of acquiring the securities
offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii). (Rule 501(a)(7)).
(h)Any entity in which all of the equity owners are accredited investors.
The suitability standards referred to above represent minimum requirements for an investor. The satisfaction of such
standards by an investor does not necessarily mean that the Bonds are a suitable investment for an investor. The
Commission and the Underwriter reserve the right to modify the suitability standards at any time to comply with any
applicable federal state or local laws, rules, regulations or otherwise.
None of the Bonds has been registered under the Securities Act or the securities laws of any state and, as a result, there
are significant restrictions imposed upon the distribution or transfer of the Bonds. ACCORDINGLY,INVESTMENT
IN THE BONDS IS SUITABLE ONLY FOR ACCREDITED INVESTORS OF ADEQUATE FINANCIAL
MEANS THAT HAVE NO NEED FOR LIQUIDITY WITH RESPECT TO THEIR INVESTMENT AND CAN
BEAR THE ECONOMIC RISKS OF THEIR INVESTMENT UNTIL STATED MATURITY.
See APPENDIX D--BOND RESOLUTION AND "RISKS TO OWNERS OF THE BONDS" HEREIN.
CONTINUING DISCLOSURE
The Bonds are exempt from Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") pursuant to
paragraph (d)(1)(i) of the Rule, and therefore, are also exempt from the continuing disclosure requirements of
paragraph(b)(5)of the Rule. Neither the Commission, the City, the District nor the Taxpayer has undertaken in any
agreement or contract to provide to any Owners of any Bond, any information repository or depository, the Municipal
Securities Rulemaking Board or any other source available to the public in connection with the offering of the Bonds,
on a periodic basis or otherwise, any financial information, operating data, audited financial statements or other
information or any notice of any event with respect to the Bonds. However, the Taxpayer has agreed to provide
reviewed annual financial statements prepared by an independent certified public accountant to the Trustee, the
Underwriter, and the Commission commencing with calendar year 1998. See APPENDIX F--"Form of Taxpayer
Agreement".
UNDERWRITING
Subject to the terms and conditions set forth in the Bond Purchase Agreement, the Bonds are being purchased for limited
reoffering to"Accredited Investors"by the Underwriter, McDonald&Company Securities, Inc. (the "Underwriter")
at a purchase price of$ , including accrued interest. The Bond Purchase Agreement provides that all of the
Bonds will be purchased by the Underwriter if any of such Bonds are purchased.
The Underwriter intends to limit the offering of the Bonds to the "Accredited Investors" at the offering prices set forth
on the cover page of this Offering Memorandum. The Underwriter may allow concessions to certain dealers(including
dealers in a selling group of the Underwriter and other dealers depositing the Bonds into investment trusts), who may
reallow concessions to other dealers. After the initial public offering, the public offering price may be varied from time
to time by the Underwriter.
The Underwriter will limit the offering of the Bonds so as to qualify the Bonds for exemption from certain requirements
for registration under the Securities Act or applicable state securities laws. In addition, the Underwriter has agreed to
indemnify the Commission and the City, among others, against certain liabilities, including liabilities under the
Securities Act and other liabilities incurred in connection with the initial offering of the Bonds and with secondary
market resale of the Bonds in which it participates. See "RISKS TO OWNERS OF THE BONDS," "NOTICE TO
PURCHASERS," "INVESTOR SUITABILITY STANDARDS," APPENDIX D - BOND RESOLUTION and
APPENDIX G- FORM OF INVESTOR SUITABILITY LETTER.
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PROCEDURES FOR PROPERTY TAX ASSESSMENT, TAX LEVY AND COLLECTION
Real Property. Real property in Indiana is assessed each year as of March 1. On or before August 1 each year, each
County Auditor must submit to each taxing unit a statement of(i) the estimated assessed value of the taxing units as of
March 1 of that year, and (ii) an estimate of the taxes to be distributed to the unit during the last six months of the
current budget year. The estimated value is based on statements delivered to the County Auditor by the township
assessor or its designee on or before July 15.
The estimated value is used when the governing body of a local taxing unit(such as a county) meets to establish its
budget for the next fiscal year (January 1 through December 31), and to set tax rates and levies. By State law, the
budget, tax rate and levy must be established for the taxing unit no later than September 20. The budget, tax rate and
levy are subject to review and revision by the State Board of Tax Commissioners, which can lower, but not raise, the
tax rate or levy (with the exception for increasing any debt service or levy as may be required).
On February 3, 1998, the Indiana Senate passed SB 352, which would eliminate the school general fund from
the property tax levy imposed by school corporations in Indiana. The effect of this legislation would be to
eliminate the property tax rate attributable to the school general fund from the combined tax rates used to
calculate tax increment. Neither the City,the Commission nor the District can predict the likelihood of further
action by the Indiana House of Representatives on SB 352, nor the ultimate enactment of SB 352 into law. Such
legislation, if enacted, could cause a 36% reduction in annual Tax Increment which would increase the likelihood
that Taxpayer Payments would be needed to pay debt service on the Bonds.
On or before December 31, each County Auditor prepares and delivers the final abstract of property taxes. Each
County Treasurer mails tax statements the following April (but mailing may be delayed as a result of reassessment or
other factors). Property taxes are due and payable from taxpayers in two installments, on May 10 and November 10,
unless the State Board of Tax Commissioners determines that an emergency has occurred and establishes a later date.
If an installment of taxes is not completely paid on or before the due date, a penalty of 10 percent of the amount
delinquent is added to the amount due. On May 10 and November 10 of each year thereafter, an additional penalty
equal to 10 percent of any taxes remaining unpaid is added. The penalties are imposed only on the principal amount
of the delinquency. Property becomes subject to tax sale procedures after 15 months of delinquency.
Commission Rights. The Commission has certain rights against the Taxpayer under Indiana law and the
Taxpayer Agreement in the event the Taxpayer does not pay its property taxes or Taxpayer Payments. See
"SECURITY AND SOURCES OF PAYMENT OF THE BONDS." Under the Taxpayer Agreement and under
IC 36-7-25-6,the Taxpayer's obligation to make Taxpayer Payments under the Taxpayer Agreement (only up to
the amount needed to cover debt service due on the Bonds)will be treated in the same manner as property taxes
for purposes of IC 6-1.1-22-13 (relating to liens on real property for all property taxes levied and all subsequent
penalties and costs resulting from the taxes)if, and to the extent that, the Taxpayer Agreement provides for such
treatment. The Taxpayer Agreement so provides. See APPENDIX F--Taxpayer Agreement. To the best of
the Commission's, the City's and the District's knowledge, IC 36-7-25-6 has not been tested in a court of
competent jurisdiction. If a taxpayer files for bankruptcy, property taxes would become a claim against the
bankruptcy estate. Real property taxes would be treated as an administrative expense or would have the lien
rights provided under the State law as described below.
On or before July 1 of each year, each County Treasurer must certify to the County Auditor a list of real property for
which property taxes from the prior year's spring installment or before are delinquent. Each County Auditor prepares
a notice of a tax sale and must publish the notice,post it in the County Courthouse and mail it by certified mail to any
mortgagee who has requested the notice must be made at least 21 days prior to the date scheduled for the sale and must
include the date on or after which the County Auditor and County Treasurer will apply for a court judgment against the
tracts of real property. On that date the Auditor will apply to the court for a judgment. The court must hold a hearing
at least seven days before the advertised tax sale date and enter a judgment at least three days before the tax sale date.
If the delinquent taxes, penalties and assessments are paid prior to the sale date, the property may not be sold. The
County Treasurer will sell the property to the highest bidder at public auction but the property cannot be sold for an
amount which is less than the sum of the delinquent taxes, taxes due and payable in the year of the sale, and all other
penalties and costs incurred as a result of the sale. The purchaser must pay the sale price immediately to the County
Treasurer who applies the payment(1)to delinquent property taxes, penalties and costs, (2)to other delinquent property
taxes (such as personal property taxes) and (3) to a tax sale surplus fund, which would be paid to the owner upon
delivery of the tax deed to purchaser. The Tax Increment and Taxpayer Payments, to the extent that IC 36-7-25-6 is
effective, would be paid as described in clauses (1) and(2)of the immediately preceding sentence.
-21-
PROCEDURES FOR PROPERTY TAX ASSESSMENT, TAX LEVY AND COLLECTION(Cont'd)
In addition to the levy and sale procedures, at least 60 days after the demand is made, the County Treasurer must
prepare a record of the delinquencies for which written demand has been made and file it with the Clerk of the Circuit
Court. When the record is so filed the amount of delinquent taxes, penalties and expenses stated in the record becomes
a debt of the taxpayer and has the same force and effect as a judgment in favor of the County for the benefit of all taxing
units having an interest in it. The County Treasurer notifies the delinquent taxpayer of the judgment and that the County
Treasurer is going to execute on the judgment. If the judgment is not paid within ten days, the County Treasurer files
for execution of the judgment and if the judgment has not been satisfied within 60 days after the judgment, the County
Treasurer may levy upon the taxpayer's property held by a financial institution, garnish accrued earnings and wages
and withhold the amount of the judgment from any payment due to the taxpayer from the County.
Assessment. Pursuant to State law, real property is valued for assessment purposes at its True Tax Value as defined
in rules and regulations promulgated by the State Board of Tax Commissioners. True Tax Value does> mean fair
market value. Currentregulations define the True Tax Value, generally, as the market value of land determined by
the County Land Valuation Commission, as approved by the State Board of Tax Commissioners, and as the reproduction
value of improvements based on actual labor and material costs prevalent in the State in 1991. Each local assessor is
to subtract from the reproduction value, an amount for normal depreciation, as provided in State regulations, and may,
for commercial properties, subtract amounts for functional or economic obsolescence, as such assessor deems
appropriate in accordance with such regulations. Each local assessor is required to assess annually projects under
construction to allow taxes to be levied on partial assessment. Gross Assessed Value is equal to 33-1/3 percent of the
True Tax Value. Net Assessed Value represents the Gross Assessed Value less certain deductions for, among other
things, mortgages, veterans, the aged, the blind, economic revitalization, resource recovery systems and tax-exempt
property. The Net Assessed Value is the value used for taxing purposes in the determination of tax rates.
If a change in assessed value occurs, a written notification is sent by either the township assessor or the County Board
of Review to the affected property owner. Upon notification, if the owner wishes to appeal an assessment, the owner
may file a petition requesting a review of the assessment. For any change in assessment to be effective in the current
year, the petition must be filed with the County Auditor within 45 days after the written notification is given or the
deadline, whichever is later. A petition for review of an assessment may be filed in any year. If the petition is filed
after the deadline in a year in which the taxpayer has not received a notice of an increase, a change in the assessment
becomes effective in the following year. While the appeal is pending, any taxes on real property which become due
on the property in question must be paid in an amount based on the immediately preceding year's assessment.
On December 22, 1997, the Indiana Tax Court ruled that the true tax value method of valuing property for
purposes of levying property taxes was unconstitutional and ordered the State Board of Tax Commissioners and
the Indiana General Assembly to develop a valuation system based on an objective measure of property wealth.
The Tax Court will determine how long the State Board of Tax Commissioners and the Indiana General Assembly
will have to develop a new valuation system. Meanwhile, the old valuation system will continue in effect. The
State Board of Tax Commissioners has indicated that it will appeal this ruling. The Commission cannot predict
the impact on property tax collections, or the timing of, future judicial actions in this case, or of legislation,
regulations or rulings enacted to implement any subsequent ruling. Moreover, the Commission cannot predict
the outcome, or timing, of any subsequent actions by the Tax Court or the Indiana Supreme Court.
Tax Abatement. Indiana Code 6-1.1-12.1 provides a mechanism by which a governmental unit may authorize a
property tax deduction for real property and for new manufacturing equipment within an economic revitalization area.
A city, town or county may grant the tax abatement of real property for a period of three, six or ten years. A city, town
or county may grant the tax abatement of personal property for a period of five or ten years. The deduction is equal
to the increase in assessed value resulting from the rehabilitation or new development, or the assessed value of the
eligible equipment, multiplied by certain prescribed percentages.
Property Tax Replacement Credit. Indiana Code 6-1.1-21-5 provides that taxpayers will receive a credit for property
tax replacement, the Property Tax Replacement Credit, up to 20 percent of their tax liability for taxes under the IC 6-
1.1-22-9 which are due and payable in May and November of each year. The PTRC is applied to each installment of
taxes. However, the tax liability of a taxpayer does not include the amount of any property tax owed by the taxpayer
attributable to certain specified components of the tax levy. Among the tax levy components not receiving the PTRC
are the property taxes that will be used to pay principal and interest due on debt entered into after December 31, 1983.
-22-
PROCEDURES FOR PROPERTY TAX ASSESSMENT, TAX LEVY AND COLLECTION(Cont'd)
Although the State Board of Tax Commissioners has determined that a PTRC will not be allowed on gross tax
increment, IC 36-7-14-39.5 allows a credit equal to the PTRC and payable from the gross tax increment to compensate
taxpayers in an allocation area unless the Commission and the Common Council take action to deny the Additional
Credit. At this time, each property taxpayer in the EDA is to receive such an Additional Credit payable from the Tax
Increment.
Excess Tax Increment. Before July 15 of each year, the Commission must determine and notify the Hamilton County
Auditor of the amount, if any, by which Tax Increment is expected to exceed the amount of property taxes necessary
to meet the obligations which may be legally paid with Tax Increment. Excess Tax Increment may be used as provided
in the Bond Resolution. See "FUNDS AND ACCOUNTS" herein and APPENDIX D --Bond Resolution.
LITIGATION
To the best knowledge of the Commission, officials of the City and the City Attorney, there is no litigation pending,
or threatened, against the Commission, the City or the District which in any way questions or affects the validity of the
Bonds, or any proceedings or transactions relating to the issuance, sale, placement or delivery thereof or the collection
of Tax Increment and the pledge of Tax Increment to the payment of the Bonds. The Commission, acting on behalf
of the City, will certify at the time of delivery of the Bonds that there is no litigation pending or in any way threatened
questioning the validity of the Bonds, or any of the proceedings held relating to the authorization, issuance, sale, and
placement of the Bonds or the Bond Resolution.
CERTAIN LEGAL MATTERS
Legal matters incident to the authorization and issuance of the Bonds are subject to the unqualified approving opinion
of Ice Miller Donadio &Ryan, Indianapolis, Indiana, Bond Counsel. Copies of such opinion will be available at the
time of the delivery of the Bonds, and the form of such opinion is APPENDIX E of this Offering Memorandum. Bond
Counsel has not undertaken to review the accuracy or completeness of any representation contained in this Offering
Memorandum and expresses no opinion thereon nor assumes any responsibility in connection with the Offering
Memorandum. Certain legal matters will be passed upon for the Commission and the City by Douglas Haney, City
Attorney; for the Taxpayer by Dann Pecar Newman&Kleiman, Professional Corporation, Indianapolis, Indiana; and
for the Underwriter by Johnson, Smith, Pence, Densborn, Wright&Heath, Indianapolis, Indiana.
LEGAL OPINIONS AND ENFORCEABILITY OF REMEDIES
The legal opinions to be delivered upon the issuance and sale of the Bonds express the professional judgment of the
attorneys rendering the opinion as to the legal issues explicitly addressed therein. By rendering a legal opinion, the
opinion giver does not become an insurer or guarantor of that expression of professional judgment, of the transactions
opined upon, or of the future performance of parties to such transactions. Nor does the rendering of an opinion
guarantee the outcome of any legal dispute that may arise out of such transactions.
The remedies available to the Owners upon default under the Bond Resolution and the Taxpayer Agreement are in many
respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional
and statutory law and judicial decisions, including specifically Title 11 of the United States Code(the federal bankruptcy
code), the remedies provided in the Bond Resolution or the Taxpayer Agreement may not be readily available or may
be limited. Under federal and State environmental laws certain liens may be imposed on property in the EDA from time
to time, but the District has no reason to believe, under existing law, that any such lien would have priority over the
lien on the Tax Increment pledged to Owners of the Bonds.
The various legal opinions to be delivered upon the delivery, issuance and sale of the Bonds will be qualified as to the
enforceability of the various legal instruments by limitations imposed by the valid exercise of the constitutional powers
of the Commission, the City, the District, the State and the United States and bankruptcy, reorganization, insolvency
or other similar laws affecting the rights of creditors generally, and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law.)
These exceptions would encompass any exercise of the federal, State or local police powers(including the police powers
of the City), in a manner consistent with the public health and welfare. Enforceability of the Bond Resolution or the
Taxpayer Agreement in a situation where such enforcement may adversely impact public health and welfare may be
subject to such police powers.
-23-
The execution of this Offering Memorandum is duly authorized by:
City of Carmel Redevelopment Commission
By: /s/ Richard A. Roesch
President
Attest: Is/Amy Boldt
Secretary
The Linder Company of Indiana, Inc.
By: /s/Gary I. Linder
- Title President
Linder Group, Inc.
By: /s/ Gary I. Linder
Title President
Ohio Retail Services, Ltd.
By: /s/Gary I. Linder
Title Member
J. L. Henry Company
By: /s/ Gary I. Linder
Title President
Ben Mar, LLC
By: /s/ Gary I. Linder
Title Manager
-24-
APPENDIX A
The Taxpayer
THE TAXPAYER
(The Carmel Redevelopment District$2,655,000 Tax Increment Revenue Bonds of 1998 are payable
solely from the Trust Estate which includes Tax Increment and Taxpayer Payments as provided in
the Bond Resolution contained in Appendix D. The following information was provided by the The
Linder Company of Indiana, Inc. on behalf of the Linder Entities (as defined below) which comprise
the Taxpayer (as defined in Appendix D).
The Taxpayer consists of five (5) separate entities-The Linder Company of Indiana,Inc.,
Linder Group, Inc., Ohio Retail Services, Ltd., J.L. Henry Company and Ben Mar, LLC
(collectively,the "Linder Entities").
Gary Linder founded The Linder Company(which later became Linder Group,Inc.)in 1982.
The Linder Entities presently have thirteen(13)full time brokers and approximately twenty-five(25)
additional employees with offices in Indianapolis, Indiana, Cincinnati, Ohio, Dayton, Ohio and
Detroit, Michigan. The Linder Entities provide property management services to, among others,
Aetna Life Insurance Company. Retail clients have included Target, Office Max, Sears Hardware,
Champps,Houllhan's, Planet Hollywood, Walgreen's and Follett's Bookstores.
The Linder Company of Indiana,Inc. is primarily engaged in the real estate brokerage and
property management business,providing brokerage and property management services in Indiana.
The Linder Company of Indiana,Inc.currently has six(6)full time brokers and employs twelve(12)
people. It currently manages approximately 1,000,000 square feet of space in Indiana.
Linder Group, Inc. is primarily engaged in the real estate brokerage and property
management business,providing brokerage and property management services in Michigan. Linder
Group, Inc. currently has three (3) full time brokers and employs approximately eight(8)people.
It currently manages approximately 900,000 square feet in Michigan.
Ohio Retail Services, Ltd. is primarily engaged in the real estate brokerage and property
management business,providing brokerage and property management services in Ohio. Ohio Retail
Services, Ltd. currently has four (4) full time brokers and employs approximately five (5)people.
It currently manages approximately 400,000 square feet in Ohio, of which approximately 156,000
square feet is owned by DCS,an Indiana general partnership,an affiliate of the Linder Entities. DCS
has filed for protection under the bankruptcy code as discussed in more detail, infra.
J.L. Henry Company was formed to provide office leasing and brokerage services. J.L.
Henry Company is currently not operating and is not expected to resume operations. It is expected
that J.L. Henry Company will be merged into another entity constituting Taxpayer and will cease
to exist as a separate entity.
Ben Mar, LLC is the owner of the Merchants Square Development (excluding the Marsh
store and certain outlots). Ben Mar, LLC has no assets or interests in any other projects other than
its interest in the Merchants' Square Development.
A-1
Ben Mar,LLC is undertaking a major redevelopment of the shopping center located in the
Merchants Square Development. The shopping center, formerly known as Keystone Square
Shopping Center, lost its major tenant, Target. This gave Ben Mar, LLC the opportunity to re-
configure and rehabilitate the shopping center. Ben Mar, LLC is in the process of doing this.
Several tenants have been relocated and the shopping center is being de-malled, i.e., there will be
no interior mall with public entrances to the stores. Additionally, one new building, the West
Building,was constructed, and two(2) existing buildings will be demolished and replaced with new
buildings. Furthermore, Marsh Supermarkets is in the process of constructing a building that will
be part of the Merchants Square Development. Construction is ongoing and the renovation of the
former mall portion of the shopping center will not be completed until the summer of 1998. At that
time, certain tenants will commence their construction work to complete their stores. At the present
time,there are leases with approximately thirty-seven(37)tenants, including two (2) ground leases.
Tenants include Old Navy, Cost Plus and Paul Harris. Leasing activities will be ongoing.
Construction of the outlots is anticipated to be completed by the end of 1999.
The construction is being financed by LaSalle National Bank ("LaSalle") pursuant to a
Construction Loan Agreement. Pursuant to the Construction Loan Agreement, LaSalle has a first
mortgage lien on all of the Merchants Square Development owned by Ben Mar, LLC.
On February 3, 1998,DCS,an Indiana general partnership,filed for protection under Chapter
11 of the United States Bankruptcy Code (U.S. Code Title 11) under Case No. 98-1252-AJM-11.
DCS is composed of two general partners, Gemstone Properties I Limited Partnership ("Gemstone
I") and Gemstone Properties II Limited Partnership ("Gemstone II"). Gary I. Linder is the sole
shareholder of Fiesta Ohio Centers, Inc., the sole general partner of Gemstone I, and GIL, Inc., the
sole general partner of Gemstone II, and is individually a limited partner in both Gemstone I and
Gemstone II. The properties owned by DCS are managed and leased by Ohio Retail Services, Ltd.
Ohio Retail Services,Ltd. is an unsecured creditor of DCS in the bankruptcy proceeding. The major
secured creditor is General Electric Capital Corporation ("GECC") and the loan from GECC is
nonrecourse. No entity which constitutes part of the Taxpayer has any direct ownership of DCS.
In connection with the redevelopment of the Merchants Square Development,a former tenant,Bunch
A Nuts, Inc. has filed an action in Hamilton County Superior Court captioned Bunch A Nuts, Inc.
V. Keystone Square Shopping Center Company, an Indiana general partnership and the Linder
Company, under Cause No. 29D02-9704-CP-199, seeking damages in an unspecified amount. The
Linder Company of Indiana, Inc. has agreed to indemnify Keystone Square Shopping Center
Company for certain costs and expenses, including a portion of any judgement, in connection with
the litigation. The matter is currently set for trial May 19, 1998.
A-2
Richard E. Hennessey
Certified Public Accountant
January 21, 1998
The Board of Directors and Shareholders
The Linder Companies
Indianapolis, Indiana
I am not independent with respect to The Linder Companies and the accompanying
balance sheets as of September 30, 1997 and December 31,1996, and the related
• statements of income and retained earnings and of cash flows for the years then ended
were not audited by me and accordingly I do not express an opinion on them.
CPA
A-3
Market Square Center • 151 North Delaware Street • Suite 1168 • Indianapolis, Indiana 46
The Linder Companies
Consolidated Balance Sheet as of September 30, 1997 and
December 31,1996
9/30/97 12/31/96
ASSETS:
Current Assets:
Cash 23,747 208.698
Accounts Receivable 1,449,787 1,457,938
Loan Receivable 776,462 1,011,353
Interest Receivable 16,021 42,085
Total Current Assets: 2,266,017 2,720,074
Fixed Assets:
Land 797,505
Land Improvements 385,187
Building Improvements 3,837,405
Tenant Improvements 338,621
Capitalized Construction Costs 165,355
Office Furniture 117,232 81,895
Equipment 65,377 65,377
Less: Accum. Depreciation (118,179) (99,297)
Total Fixed Assets: 5,588,503 47,975
Other Assets:
Subscription Receivable 1,000
Organizational Costs 103,095 3,712
Deposits 200,818 818
Total Other Assets: 304,913 4,530
TOTAL ASSETS: 8,159,433 2,772,579
LIABILITIES:
Current Liabilities:
Accounts Payable 1,262,851 211,132
Commissions Payable 1,116,489 924,023
Employee Withholdings 6,340 6,251
Loan 630,607 265,700
Deposits in Escrow 1,405,000
Line of Credit-Fifth Third Bank 1,515,000
Notes Payable 790,000
Total Current Liabilities: 6,726,287 1,407,106
Long-Term Liabilities:
Deferred Income Tax 37,492 37,492
SHAREHOLDERS EQUITY:
Capital/Common Stock 3,000 2,000'
Paid in Surplus 471 471
Retained Earnings 1,325,510 928,187
Net Profit/(Loss) 66,673 397,323
Total Shareholders Equity: 1,395,654 1,327,981
TOTAL LIABILITIES&EQUITY: 8,159,433 2,772,579
•
See accompanying notes to consolidated financial statements.
See Accountant's Compliation Report
A-4
The Under Companies
Consolidated Profit and Loss Statements
For the Period Ending September 30, 1997and December 31, 1996
9130197 12131/96
INCOME: 2,455,930 3,270,027
Commissions 333,477 572,673
Management Fees 48,10477 87,807
Other Income ,525
Rental Income 67 7525
Reimbursed Expenses 12,916,682- 14 3,830,507
TOTAL INCOME:
COST OF INCOME: 1,355,038 2,114,657
Commission Expense 1,355,038- 2,114,657
TOTAL COST OF INCOME:
GROSS INCOME:
1,561,644 1,815,850
EXPENSES: 556,723 777,407
Wages 2,085 (21,837)
Rent Payroll Taxes 98,585 126,382
16,313 4,413
Tel33,150 49,549
Telephone85,596 58,310
Advertising 7,111
Management Fees 17,00400 27,111
Dues/Subscriptions 20,20,22551 34
Travel and Entertainment 95 952 103,172
Legal and Accounting 4067 22,847383
License/Fees 15,739 22,060
Postage/Shipping 102,970 88,316
Insurance g 774 13,201
55,392 3,1,1962 01
Leasing/Site Plans
Conventions/Seminars 8140
,192
0
192
Personal Property Tax
Real Estate Taxes 5,373
State Income Tax 23,9113,9
Repairs and Maintenance 1 868
68 -
Landscaping -
Security 514 1,731
Bank Fees 832907 2,603 556
Pension/Profit Sharing 4,907
742
18,326
Amortization Expense 24,435
Depreciation Expense12 ,435
Office Expense 69,959
TOTAL EXPENSES:
1,262,725 1,450,863
1441 . 40,572
Interest Income 101 882 1,895
Interest Expense
31,805 6,341
Federal Income Taxes 166,673 397.323
NET PROFITl(LOSS):
See accompanying notes to consolidated financial statements.
See Accountant's Compliation Report
A-5
The Linder Companies
Consolidated Statement of Cash Flows
For the Period Ending September 30, 1997 and December 31, 1996
INCREASE (DECREASE) IN CASH: / g/ 1 31/96
Cash Flows Froni Operating Activities:
Net Income
Adjustments to reconcile net income to 66,673 397,323
net cash provided by operating activities:
Depreciation and amortization
Changes in assets and liabilities: 18,882 25,177
(Increase)Decrease in Accounts Receivable
(Increase)Decrease in Loan Receivable8,151 • (7334,268)
(Increase)Decrease in Interest Receivable 234,8916 (724,670)
2
(Increase)Decrease in Other Assets 00,3883)4 (22,670)
Increase(Decrease) in Accounts Payable 1,051,808
907
Increase(Decrease) in Commisions Payable 71,214
Increase in Deposits in Escrow 192,466 271,214
1,405,000
Net cash from operating activities -
Cash Flows From Investing Activities: 2'7 552
(172,540)
Investment in Commercial Real Estate
Purchase of Office Furniture (5,524,073)
Net cash used for investing activities (— ,5(35 337) (191)
Cash Flows From Financing Activiites: (5,559,410) (191)
Proceeds from Common Stock Issued
Proceeds from Loan Payable 1,000
Proceeds From Line of Credit 364,907 227,000
Proceeds From Notes Payable 1,515,000 -
Net cash provided by financing activities 790,000 -
2,670,907 227,000
NET INCREASE(DECREASE) IN CASH
CASH, BEGINNING OF YEAR (184,951) 54,269
CASH, END OF YEAR 208,698 154,429
2_ 3,747 208,698
See accompanying notes to consolidated financial statements.
See Accountant's Compliation Report
A-6
The Linder Companies
Notes to Consolidated Financial Statements
Note 1 - Summary of Significant
Accounting Policies
Principles of Consolidation:
The accompanying consolidated financial statements have been prepared on an accrual
basis and include the accounts of The Linder Group, Inc., The Linder.Company of
Indiana, Inc., J.L. Henry Company, Ohio Retail Services, Ltd. and Ben Mar, LLC. All
significant intercompany balances and transactions have been eliminated in the
consolidated financial statements.
The Linder Group, Inc. was incorporated under the laws of the state of Indiana on
September 1, 1985 and is owned 90% by Gary I. Linder and 10% by Mark A. Perlstein.
Both owners are active in the business. The Linder Group, Inc., is primarily in the
business of leasing and third party management of retail properties located in the state of
Michigan.
The Linder Company of Indiana, Inc., a S-Corporation, was organized on January 7, 1992
and is owned 90%by Gary I. Linder and 10%by Mark A. Perlstein. Both owners are
active in the business. The Linder Company of Indiana, Inc. is primarily in the business
of leasing and third party management of retail properties located in the state of Indiana.
J.L. Henry Company was incorporated on January 1, 1992 and is owned 67.5% by Gary I.
Linder, 25%by Jeff L. Henry and 7.5%by Mark A. Perlstein. The Company was
organized to provide office leasing and brokerage services. The J.L. Henry Company is
currently inactive.
Ohio Retail Services, Ltd. is a limited liability company formed on December 1, 1995
pursuant to the Ohio Revised Code Chapter 1705 and is owned 81%by Gary I. Linder,
10% by Steve A. Brandt and 9%by Mark A. Perlstein. The owner/members are active in
the business of leasing and third party management of retail properties in the state of
Ohio.
Ben Mar, LLC, a limited liability company, was formed on October 25, 1996 under the
Indiana Business Flexibility Act and is owned 64%by Gary I. Linder, 30% by Merchants
Square Associates, LLC and 6%by Mark A. Perlstein. Gary I. Linder is the manager. Ben
Mar, LLC was formed to acquire and re-develop a shopping center located in Carmel,
Indiana.
See Accountant's Compilation Report
A-7
Revenue and Cost Recognition:
Revenue from commissions is recognized at the time of lease execution by the tenant.
Receipt of the commission generally occurs at the time the tenant occupies the leased
premises.
Management fee income is accrued each month based upon the prior month's cash
collections.
Rental income and expense reimbursements are accrued the first day of each month at the
same time the tenant's lease obligation becomes due and payable.
Commission expense is recognized at the time of lease execution by the tenant. Actual
payment of the commission expense generally occurs at the time the tenant occupies the
leased premises.
Accounts Receivable:
Accounts Receivable are carried at cost. No bad debt reserve is maintained as the
company generally controls the collection of the rents and the payment of expenses.
Loan Receivable:
Loan receivable is carried at cost. No valuation reserve is maintained as the loans have
been made to key employees as draws against future compensation and to affiliated but
unconsolidated joint ventures.
Fixed Assets:
Fixed assets are carried at cost. The costs relating to the purchase and re-development of
commercial real estate are capitalized and will be depreciated using an appropriate
method and useful life as the project is placed in service.
Organizational Costs:
Organizational costs are carried at cost. These costs will be amortized over sixty(60)
months beginning November, 1997.
Deposits:
Deposits are carried at cost and represent earnest monies deposited toward the purchase
of the commercial real estate and utility deposits.
A-8
Income Taxes:
The Linder Group, Inc. and J.L. Henry Company are C-corporations which file separate
federal and state income tax returns. Current taxes are provided as appropriate. The
remaining entities are pass through entities and therefore no income taxes are provided.
Note 2 - Loan Receivable
Loan Receivable is summarized as follows:
9/30/97 12/31/96
Key Employees $122,946 $ -0-
Affiliated Joint Ventures 653.516 1.011.353
Total $776,462 $1,011,353
The loans are payable upon demand and bear interest at the same rate as The Linder
Group, Inc.'s borrowing rate, approximately prime rate plus 1/2%, or 9%. The Affiliated
Joint Ventures are separate joint ventures with
mercial real estate propertieselated joint venture ae n which The
s. Generally
each joint venture consists of one or more
Linder Companies have been contracted to provide leasing and management services.
Note 3 -Deposits in Escrow
Ben Mar, LLC has entered into a contract to purchase and re-develop the Keystone
Shopping Center located in Cannel, Indiana. Excepted from the purchase is
approximately five(5) acres which will be sold to an unrelated third party to build a large
upscale grocery store. Since the grocery
will Mar, LLC to relocatee attached to the pping center, the
tenants from the
third party has entered into an agreement with Be
existing structure, demolish the structure and prepare the site for construction of the
grocery store.
The third party provided funds to Ben Mar,LLC for completion of the above. In addition
funds were also provided by Keystone Shopping Center from a lease termination payment
which is to be used exclusively for re-development costs for the shopping center. As of
September 30, 1997 virtually all of the requirements have been completed. These will be
reflected as appropriate adjustments at the closing of the transaction on November
13,1997. The remaining balance was a tenant deposit held against certain leased premises
in Ohio.
9/30/97 12/31/96
000,000 $ -0-
Site Preparation Escrow $1,400,000 -0-
Lease Termination Escrow 5.000 -0-
Tenant Deposits
Total $1,405,000 $ -0-
A-9
Note 4 - Line of Credit
The Linder Group, Inc. maintains a general line of credit which was extended to the
company by Fifth-Third Bank in the amount of$400,000. The line of credit is renewable
annually and expires on March 31, 1998. The interest rate charged is the prime rate plus
1/4% and requires the company and affiliated companies to maintain accounts receivable
of at least $1,400,000. As of September 30, 1997, $215,000 had been drawn against the
line. -
Ben Mar, LLC, as part of its re-development of the Keystone Shopping Center, entered
into a construction loan agreement with Fifth-Third Bank in the amount of$1,300,000 for
the construction of a free standing 26,200 square foot retail center. The new building was
used to relocate existing tenants from Keystone Shopping Center. The construction loan
was for a period of twelve (12) months with interest payable monthly at the prime rate
plus 1/2%. This loan is secured by the land (2.856 acres) and Ben Mar, LLC's contract to
acquire the Keystone Shopping Center. This loan will be repaid upon closing of the
Keystone Shopping Center transaction on November 13, 1997. As of September 30,
1997, the outstanding balance of the construction loan was $1,300,000.
Note 5-Note Payable
On January 12,1997 Ben Mar, LLC entered into a land contract with Ralph L. Wilfong
Charitable Remainder Unitrust to acquire approximately five (5)acres of land that was
incorporated into the re-development of the Keystone Shopping Center. The contract
amount is $547,000 for a period of thirty- six (36)months with monthly interest
payments of$2260.50. No principal amortization is required. This contract will be
subordinated to the LaSalle National Bank construction loan.
On February 23,1997 Ben Mar, LLC entered into a land contract with Ralph L. Wilfong
Charitable Remainder Unitrust to acquire 2.856 acres in order to construct a new 26,200
square foot retail center to be used to relocate existing tenants from the Keystone
Shopping Center. The contract amount was $243,000 for a period of thirty-six (36)
months with monthly interest payments of$1,029.17. No principal amortization is
required. This contract will be subordinated to the LaSalle National Bank construction
loan.
Note 6 - Significant Subsequent Event
On November 13, 1997 Ben Mar, LLC closed on its contract to acquire Keystone
Shopping Center from Keystone Shopping Center Company (`KSSCC"), an Indiana
partnership. The transaction was consummated through a contribution of KSSCC's
interest in the Keystone Shopping Center plus outstanding debt in the amount of
$4,909,425 in exchange for a preferred interest in Ben Mar, LLC valued at $3,500,000.
Ben Mar, LLC entered into a construction loan agreement with LaSalle National Bank up
A-10
to an amount of$20,000,000. The construction loan is for a period of twenty- four(24)
months with interest payable monthly at the prime the $4 909,425 oftclosing assumed debt4the 0
was drawn against the construction loan to payoff
payoff of The Fifth-Third Bank construction construction costs$1, incu000 with rred to the e.balance to pay
for accrued interest, closing costs and
A-11
(This page intentionally left blank.)
APPENDIX B
The City - General Information
TABLE OF CONTENTS
page(s1
General Physical and Social Information
Location and General Characteristics B-1
Population B-1
Government B-1
Planning and Zoning B-1
Transportation B-2
Police and Fire Protection B-2
Health Care B-2
Education B-2
Communication B-2
Utilities B-3
Recreation/Culture/Library B-3
General Economic and Financial Information
Financial Institutions B-3
1 Employment B-4
B-4 - B-6
Industry
Large Employers B-7
Miscellaneous Economic Information B-8 - B-9
Building Permits B-9
Appendix B contains certain general information regarding the City; however, the Bonds are payable solely
from the Trust Estate which includes Tax Increment collected from the EDA and distributed to the
Allocation Fund of the Commission and the Taxpayer Payments, as provided in the Bond Resolution
. contained in Appendix D. NO OTHER SOURCE OF COMMISSION OR CITY FUNDS ARE PLEDGED
TO THE REPAYMENT OF THE BONDS; NO UNLIMITED AD VALOREM TAXES NOR INCOME
TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS.
GENERAL. PHYSICAL AND SOCIAL INFORMATION
LOCATION AND GENERAL CHARACTERISTICS
The City of Carmel is located in Hamilton County directly north of Indianapolis. The City has experienced
tremendous growth within the past few decades as represented in the population statistics presented below.
The City serves mainly as a residential and commercial area for both Carmel and Indianapolis
professionals. The unemployment rate in Hamilton County has been substantially lower than state and
national levels, and currently Hamilton County has the lowest unemployment rate in Indiana. The City
is recognized for its sound corporate environment, high quality residential neighborhoods, outstanding
public schools, well-developed infrastructure and its strong economy. The proximity of Carmel to
Indianapolis provides increased employment, recreation, cultural and higher education opportunities for
local residents.
POPULATION
The population of the City of Carmel and Hamilton County for the last five census dates, the special census
taken for the City of Carmel for 1997, and two subsequent projections for Hamilton County is as follows,
according to the U.S. Bureau of Census:
City of Carmel Hamilton County
Percentage Percentage
Year Population Increase Population Increase
1950 1,009 30.9% 28,491 15.7%
1960 1,442 42.9% 40,132 40.9%
1970 6,691 364.0% 54,532 35.9%
1980 18,272 173.1% 82,027 50.4%
1990 25,380 38.9% 108,936 32.8%
1997 31,808 25.3% N/A N/A
2000* N/A N/A 127,800 17.3%
2010* N/A N/A 136,900 7.1%
* Projections
GOVERNMENT
The City government of Carmel is comprised of an executive, fiscal, legislative and judicial branches. The
Mayor serves as the head of the executive branch and is elected to a four-year term. The Clerk-Treasurer
serves as the head of the fiscal branch and is also elected to a four-year term. The City's seven-member
Common Council serves as the legislative branch, and the City Judge and City Court Clerk serve as the
judicial branch.
PLANNING AND ZONING
The Cannel Plan Commission promotes orderly growth throughout the City of Cannel and other areas of
Clay Township. The 13-member Commission is appointed by the Mayor of the City of Carmel and the
Clay Township Trustee. The Board of Zoning Appeals has five members and is also appointed by the
Mayor and the Clay Township Trustee.
THE BONDS ARE PAYABLE SOLELY FROM THE TRUST ESTATE
WHICH INCLUDES TAX INCREMENT AND TAXPAYER PAYMENTS,
as provided in the Bond Resolution in Appendix D.
B-1
TRANSPORTATION
Major interstates are easily accessible with Interstate 465 located at the southern edge of Carmel which
connects four major interstates (I-65, I-69, 1-70 and 1-74). In addition, U.S. Highway 31 and State Roads
234 and 431 transverse the area. Over 20 interstate and intrastate trucking lines provide carrier services.
The Indianapolis International Airport, approximately 20 miles southwest of the City, is the nearest
international airport. Several airports throughout the Carmel-Indianapolis area provide charter air service.
POLICE AND FIRE PROTECTION
The Carmel Police Department, the Indiana State Police and the Hamilton County Sheriff's Department
provide police protection throughout the City.
The Carmel-Clay Fire Department with five stations provides fire and emergency medical services to the
residents of Carmel and Clay Township.
HEALTH CARE
St. Vincent's Carmel Hospital provides health care services to residents of the City. The 50-bed facility
was completed in 1985 and offers emergency services, surgical suites and a shared medical staff with St.
Vincent Hospital located eight miles southwest of Carmel. Departments within the Hospital include
radiology, laboratory, intensive and coronary care, physical and occupational therapy, among others. A
professional office building for physicians is also located on Hospital grounds. Additionally, a 50-bed
long-term acute health care facility, St. Elizabeth Ann Seton Hospital, is located on the second floor of the
facility.
EDUCATION
The Carmel Clay Schools serves the residents of the City of Carmel and surrounding Clay Township.
Currently, the school system has one high school, two junior high schools, and eight elementaries. Total
enrollment is reported at 10,382 for the 1997/98 school year. A certified staff of 818 and a non-certified
staff of 721 provide educational opportunities for school-aged children.
Carmel's central Indiana location and proximity to Indianapolis provides students with a wide range of
opportunities for higher education and vocational training. Located within a 70-mile radius are several
institutions for higher learning, including Anderson University, Marian College, Ball State University,
Purdue University, Butler University, University of Indianapolis, DePauw University, Indiana University,
Indiana University/Purdue University at Indianapolis, and Wabash College. Vocational training is included
in the high school curriculum. Vocational centers are located in Indianapolis with Indiana Vocational
Technical College offering classes in Hamilton County. According to school administrators, approximately
90% of graduating Carmel Clay students pursue higher education at a university level.
COMMUNICATION
Subscription newspapers include the Indianapolis Star, Indianapolis News, and the Noblesville Daily
Ledger. Indianapolis area radio stations provide news and music to a variety of listeners. All major
television networks (originating in Indianapolis) and cable television are available to the Carmel residents.
THE BONDS ARE PAYABLE SOLELY FROM THE TRUST ESTATE
WHICH INCLUDES TAX INCREMENT AND TAXPAYER PAYMENTS,
as provided in the Bond Resolution in Appendix D.
B-2
TILITIFS
Residents of Carmel receive natural gas from the Indiana
Gas
Ene�gy and Indianapolis Power and Light
mpany and telephone services from
Ameritech Telephone Company. Electricity is provided by PSI
Company. Water and sewage services are provided by the municipal utilities of the City.
RECREATION/ ULTURE/LIBRARY
Proximity to Indianapolis provides residents of Carmel athe Children'soMuseum, the Indianapolis
f leisure time activities.
Participatory and spectator activities include the Indianapolis Zoo
500 Mile Race, the Museum of Art, professional athletic events,
Natatorium,
Velodrome,
numerous other recreational facilities. Locally, Carmel te wide range
including a racquet club, several golf courses, an ice skating facility, the Carmel Community Pool, and
several fitness centers.
as the
el
ny
stra
Cultural activities are provided by several local organizations
fiatw deas rangel of cultural att actions�ncludingeart,
which was organized in 1976. Indianapolis provides
theater, symphonic productions and ballet.
The Carmel Clay Public Library offers a variety
r 52,000 library cardholdeooks, magazines, rLibrary provides
and pamphlets. The
Library has approximately 160,000 volumes and ove
two meeting rooms, group study rooms and a children's reading area, as well as other reading areas for
youth and adults. The computerization of card catalog and �uihsCarmel Clay Schools which provides
ition services are also provided. The
Carmel Clay Public Library has a shared computersystem w
students, teachers and residents of the Townships �ion�ks anThetwo-storym116 385 sq.ft other ites located in the
ibraryDis
A new Carmel Clay Library is currently under ®nstruc
expected to be completed in Spring, 1999. The new library will provide state-of-the-art technology, group
study rooms and two technology centers.
• • :N) 4 IL _ • 'M a •
�h. I I I•
The following financial institutions are located within the City of Carmel and nearby Indianapolis. Total
resources are given as of June 30, 1997, as reported by bank personnel. Total
Resources
$27,812,911,000*
Key Bank, N.A. 9,671,494,000
NBD Bank, N.A. 3,000
8,9 ,3232
Bank One, Indianapolis, NA 138,933, 3,000
National City Bank, Indiana 2,415,565,000
Union Federal Savings Bank of Indianapolis 1,497,266,000
E
First Indiana Bank 717
,
1,335 ,000*
1,044,3235,717
First of America Bank, N.A. ,000
The Huntington National Bank of Indiana 1,1 , 2
4,000
Fifth Third Bank of Central Indiana 1,165
First National Bank 51 ,093,000
445,775,000
Harrington Bank ,766,000
STAR Financial Bank of Indianapolis 333333,766,000
MetroBank
*Assets as of December 31, 1996.
THE BONDS ARE PAYABLE SOLELY
WHICH INCLUDES TAX INCREMENT AND TAXPAYER PAYMENTS,
as provided in the Bond Resolution in Appendix D.
B-3
EMPLOYMENT
Unemployment percentages for Hamilton County (Indianapolis MSA) are reported as provided by the
Indiana Employment Security Division.
Unemplovment Rate Hamilton County
Year Hamilton County Indiana
Labor For e
1988 2.8%
1989 5.3% 53,940
2.5% 4.7%
1990 2.3%
57,890
1991 5.3% 60,550
2.5% 5.9% '
1992 2.7% 62,400
1993 6.5% 65,230
2.3% 5.3%
1994 2.2% 70,810 .
1995 4.9% 76,540
2.1% 4.7%
1996 1.7% 81,650
4.1% 80,940
1997, November*
1.1% 3.4% 82,540
*Not seasonally adjusted.
Note: Hamilton County has the lowest unemployment rate (1.1%) in Indiana as of November, 1997.
INDUSTRY
Carmel has experienced extensive residential, commercial and industrial development in recent years and
has recently been the fastest growing area in the Indianapolis Metropolitan Area. According to the Indiana
Business Journal, the City of Carmel has over 4.1 million square feet of office space.
Along U.S. 31, known as the Meridian Corridor, several modern multi-story office complexes have been t
built in recent years. The offices of major corporations such as Thompson Consumer Electronics,
MacMillan Publishing Company, N.C.R. Corporation, Conseco, Inc., and Delta Faucet Company are
among the many office complexes which form the Meridian Corridor. `
According to the Hamilton County Alliance, F.I.R.E. (finance, insurance and real estate) proved to be the
fastest growing segment of the economy within the City with a 91 percent increase from 1990 to 1995. F
Evidence of this increase is the employment gains of Conseco, Inc. and the addition of Indiana Insurance
to the City of Carmel.
Conseco, Inc. is a life insurance holding company founded in 1979. Security National of Indiana Corp.,
was Conseco's original name. Security's first acquisition was Consolidated National Life Insurance Co.,
and the name Conseco was formed from those two names. In 1985, Consolidated was sold in order to
finance the acquisition of Lincoln American General Company. Lincoln Income Life Insurance Co. and
Bankers National Life Insurance Co. were acquired in 1986. Company management reports employment
currently at 2,686 employees. According to Company personnel, the Company recently built a new
100,000 square foot office building which has been occupied since March, 1997. Additionally, it was
reported that an existing 105,000 square foot office building was purchased in September, 1996. Company
personnel reports that they presently own a total of ten office buildings and recently opened a new building
in December, 1997. The building consists of 80,000 square feet of office space and a 20,000 square foot
conference/training center.
THE BONDS ARE PAYABLE SOLELY FROM THE TRUST ESTATE
WHICH INCLUDES TAX INCREMENT AND TAXPAYER PAYMENTS,
as provided in the Bond Resolution in Appendix D.
B-4
INDUSTRY (Cont'd)
Employees of Thompson Consumer Electronics moved into a new $50 million administration and technical
center located in Carmel in 1994. The facility houses the North America and South America corporate
headquarters, marketing and sales, customer service and customer relations, legal and administrative, and
engineering departments. Company management reports that approximately 1,500 employees are presently
located in the facility and, according to Company personnel, this employment level is expected to remain
stable.
According to Company personnel, Delta Faucet Company completed construction of a new building last
year which nearly doubled available space. The idang to company personnelition consists of new , employment is reportedspace and exercise aty
s
as well as expansion of an existing gy
steady.
According to Company personnel, MacMillan Publishing Center employs approximately 950 at the
corporate headquarters office in Carmel. Company personnel further reported that employment increased
within the past year and is expected to remain steady or increase slightly within the next year.
CNA (formerly known as Continental Insurance) was established in the area in 1989. According to
Company personnel, the commercial division currently employs approximately 275 and the personnel
division employs approximately 240 for a total of approximately 515 employees. Company personnel
further reports that employment is expected to remain steady.
Meijer, Inc. built a mega-store in the Carmel area in 1994 which, according to Company personnel,
presently employs 550.
One Call Long Distance, a telecommunications company which has both sales and marketing offices at its
location, reports that employment has grown considerably within the past few years. According to
Company personnel, the current 500 employees will increase to approximately 575 within the next year.
Ritron, Inc., a manufacturer of two way communicators reports a total employment of 130. According
to Company personnel, that figure is expected to increase within the next year.
Woods Wire Products located in the Carmel area in the 1960's. The company manufactures electric cord
sets and, according to Company personnel, they presently employ 275. Personnel also reports that the
employment trend within the next year is expected to remain steady.
THE BONDS ARE PAYABLE SOLELY FROM THE TRUST ESTATE
WHICH INCLUDES TAX INCREMENT AND TAXPAYER PAYMENTS,
as provided in the Bond Resolution in Appendix D.
B-5
INDUSTRY (Cont'd)
Additionally, many Carmel residents commute to nearby Indianapolis. According to the Indianapolis
Chamber of Commerce, the following are the largest employers in the Indianapolis Metropolitan Area:
Name
Employment
City-County Government
Includes: 62,700
Indianapolis City Government
County Government 4,500
Township Schools 2,850
Indianapolis Public Schools 6,865
Wishard Hospital 6,100
3,300
State Government
Federal Government 28,800
I.U.P.U.I 18,200
Eli Lilly and Company 8,250
Marsh Supermarkets Inc./Village Pantry Markets 7,000
6,000
St. Vincent Hospital and Health Care Center
6,000
Methodist Hospital
The Kroger Company 5,200
Community Hospitals of Indianapolis 5,200
Allison Transmissions/Div. Of GMC 5,000
Allison Engine Co. 4,200
Meijer, Inc. 4,000
Indiana University Medical Center 3,735
Ford Motor Company 3,500
3,255
THE BONDS ARE PAYABLE SOLELY FROM THE TRUST ESTATE
WHICH INCLUDES TAX INCREMENT AND TAXPAYER PAYMENTS,
as provided in the Bond Resolution in Appendix D.
B-6
LARGE EMPLOYERS
Below is a list of the largest employers in the City of Carmel based upon information provided by company
personnel. Reported
Year
Nam Established Type of Business Employment
Conseco, Inc. 1979 Life insurance holding co. 2,686
Thompson Consumer Electronics 1994 Corporate headquarters 1,500
and technical center for RCA,
Proscan and GE home
entertainment products
Carmel Clay Schools Public education facilities 1,431
MacMillan Publishing Company N/A Corporate headquarters of 950
reference book publisher
Meijer, Inc. 1994 Mega-store 550 (1)
CNA (formerly Continental Personal and commercial 515
Insurance) insurance
One Call Long Distance 1982 Telecommunications corp.
headquarters 500
Indiana Insurance Company 1993 Property and casualty insurance 500
St. Vincent Carmel Hospital 1985 Acute health care facility 360
City of Carmel 1976 Governmental services 330
Woods Wire Products 1960's Mfg. of electric cord sets 275
Delta Faucet Company 1980 Headquarters of faucet
manufacturer 250
Indiana Farmers Mutual
Insurance Company 1970 Property and casualty insurance 180
Ritron, Inc. 1977 Mfg. two-way communications 130
Hewlett Packard 1984 Designer and manufacturer of
electronic products and systems 110
Leatherite Manufacturing, Inc. 1975 Mfg. collars and leashes for 100
cats and dogs
(1) Includes full and part-time employees.
THE BONDS ARE PAYABLE SOLELY FROM THE TRUST ESTATE
WHICH INCLUDES TAX INCREMENT AND TAXPAYER PAYMENTS,
as provided in the Bond Resolution in Appendix D.
B-7
i
MISCELLANEOUS ECONOMIC INFORMATION
The following information concerning the City of Carmel, Hamilton County, the State of Indiana and the United States
has been obtained from the Bureau of Census Reports and the Indiana State Library.
United
Carmel Hamilton County* Indiana States
Per capita money income in 1995 N/A $33,163
Median family income in 1990 $ ,0 $35,22
$62,686** $51,167 $334,08822 $35,2 5
25
0
Average weekly earnings in manufacturing
(1st qtr. of 1997) $742.0
Population per square mile in 1990 $752.9 N/A
2,015.4 273.7 154.6 70.3
Retail sales in 1992:
Total retail sales $884,520,000 $42,373,476,000 N/A
Sales per capita $7,307 $7,497 N/A
Sales per establishment $1,457,199 $1,266,846 N/A
* Hamilton County has the highest per capita income and median family income in the State of Indiana.
** The City of Carmel has the highest median family income in the State of Indiana.
Total Adjusted Gross Income
(For Hamilton County)
1986 $1,324,808,464
1987 1,560,653,617
1988 1,916,684,320
1989 2,044,941,990
1990 2,310,625,472
1991 2,460,218,518
1992 2,797,122,459
1993 3,059,483,506
1994 3,394,162,443
1995 3,718,111,751
Hamilton County ranks fifth highest among Indiana counties for total adjusted gross income.
THE BONDS ARE PAYABLE SOLELY FROM THE TRUST ESTATE
WHICH INCLUDES TAX INCREMENT AND TAXPAYER PAYMENTS,
as provided in the Bond Resolution in Appendix D.
B-8
MISCELLANEOUS ECONOMIC INFORMATION (Cont'd)
Earnings and distribution of labor force by major employment divisions in 1995 for Hamilton County are as follows:
Percent of Distribution of
Industry Earnings Earnings Labor Force
(In $1,000's)
Services
$ 593,640 24.2% 25.3%Wholesale and retail trade 541,192 22.1% 25.8%
Manufacturing
381,050 15.6% 11.4%Finance, insurance and real estate 348,146 14.2% 14.8%
9.4% 7.3%
Contract construction 228,7967.5% 8.1%
Government 184,975
Transportation, communication and 5.4% 4.1%
public utilities 133,139
1% 1.8%1.
Agriculture services, forestry 27,238 4% .5%
Mining 10,126
Farming 2.069 —1% —,2%
Totals $2.450.371 100.0% 100.0%
BUILDING PERMITS
The following schedule presents the number of building permits issued for Carmel-Clay Township as provided
by the Carmel Department of Community Development.
Single Two- Multi- Business/ Public/
Year Family Cluster Family Family Commercial Church Office Industrial Inst. Total
1987 587 15 22 21 26 1 14 1 687
1988 522 96 - - 20 - 12 - 1 651
1989 516 105 3 4 17 - 8 - - 653
1990 417 122 2 - 16 - 2 - 5 564
1991 353 120 4 2 5 1 2 - 2 489
1992 440 110 8 1 5 1 2 - - 567
1993 642 - 11 11 10 1 1 - 1 677
1994 761 - 11 9 11 - 2 - - 794
1995 822 - 11 - 17 1 6 - - 857
1996 1,096 - 8 1 13 1 3 - 1 1,123
THE BONDS ARE PAYABLE SOLELY FROM THE TRUST ESTATE
WHICH INCLUDES TAX INCREMENT AND TAXPAYER PAYMENTS,
as provided in the Bond Resolution in Appendix D.
B-9
This Official Statement and its execution is duly authorized.
City of Carmel Redevelopment Commission
By: /s/ Richard A. Roesch
President
Attest:
/s/Amy Boldt
Secretary
B-10
APPENDIX C
Accounting Report
HJU
H.J.Umbaugh & Associates
Certified Public Accountants, LLP sal
&Princip
Herschell J. Umbaugh,CPA Suite 100 9100 Meridian Square 20 East 91st Street P.O.Box 40458 Partnerer s Umbaupal CPA
(1915-1989) Indianapolis,Indiana 46240-0458 Telephone 317 844-7288 Facsimile 317 848-3604 Edward W.Guntz,CPA
Myron H.Frasier,CPA February 12, 1998 Gerald G.Malone,CPA
(Retired) Charles A.Dalton,CPA
David C.Frederick,CPA
John D.Julien,CPA
John M.Seever,CPA
Colette J. Irwin-Knott
Carmel Redevelopment Commission Todd A. Samuelson,CPA
City of Carmel
One Civic Square
Carmel, Indiana 46032
Members of the Redevelopment Commission:
In connection with the issuance of$2,655,000 principal amount of Redevelopment District Tax
Increment Revenue Bonds of 1998, we have, at your request, compiled this special purpose report
and the following schedules for inclusion in the Preliminary Offering Memorandum dated
February 12, 1998.
Page(s)
C-2 - C-8 General Comments
C-9 Summary of Estimated Project Costs and Funding
C-10 Schedule of Amortization of$2,655,000 of Tax Increment Revenue Bonds
of 1998
C-11 - C-12 Estimated Assessed Value and Forecasted Tax Increment from Proposed
Real Property Improvements
C-13 - C-14 Estimated Revenue Requirements for Annual Debt Service and the
Supplemental Reserve
In the preparation of these schedules, assumptions were made as noted regarding certain future
events. As is the case with such assumptions regarding future events and transactions, some or
all may not occur as expected and the resulting differences could be material. We have not
examined the underlying assumptions nor have we audited or reviewed the historical data.
Consequently, we express no opinion thereon nor do we have a responsibility to prepare
subsequent reports.
-
Plymouth Office 219 935-5178
CARMEL (INDIANA) REDEVELOPMENT DISTRICT
GENERAL COMMENTS
The Carmel Redevelopment Commission (the "Commission"), acting on behalf of the City of
Carmel (the "City") is issuing $2,655,000 of Redevelopment District Tax Increment Revenue
Bonds of 1998 (the "Bonds") to provide funds for the acquisition and construction of certain road
and drainage improvements and traffic signals (the "Project") in or serving the Merchant Square
Economic Development Area (the "EDA") and to pay incidental expenses in connection with the
Project, to fund a debt service reserve and capitalized interest, and to pay bond issuance costs.
Security and Sources of Payment
The Bonds will be issued under, and are secured by, a Bond Resolution, adopted by the
Commission on February 2, 1998 (the "Bond Resolution"). The Bonds are payable solely from
the Trust Estate as described in the Bond Resolution which includes Tax Increment (as defined in
Appendix D) collected in the EDA and Taxpayer Payments (as defined in Appendix D) payable
from the Taxpayer (The Linder Company of Indiana, Inc. and certain affiliated entities as defined
in Appendix F). All funds and accounts which comprise the Trust Estate will be held by National
City Bank of Indiana, located in Indianapolis, Indiana, as Trustee, Registrar and Paying Agent
(the "Trustee"), for the benefit of the Owners of the Bonds (as defined in Appendix D).
THE BONDS DO NOT CONSTITUTE A CORPORATE OBLIGATION OF THE CITY, BUT CONSTITUTE A
LIMITED OBLIGATION OF THE CARMEL REDEVELOPMENT DISTRICT AS A SPECIAL TAXING
DISTRICT, IN THE NAME OF THE CITY, PAYABLE SOLELY FROM THE TRUST ESTATE, INCLUDING
THE TAX INCREMENT AND TAXPAYER PAYMENTS, AS PROVIDED IN THE BOND RESOLUTION AND
DESCRIBED IN THE OFFERING MEMORANDUM. THE DISTRICT IS NOT OBLIGATED TO PAY THE
DEBT SERVICE ON THE BONDS FROM ANY SOURCE OTHER THAN THE TRUST ESTATE. NEITHER
THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE DISTRICT OR THE CITY IS
PLEDGED TO THE PAYMENT OF THE BONDS. See "Security and Sources of Payment of the Bonds"
in the Preliminary Offering Memorandum dated February 12, 1998.
Information about the Taxpayer is provided in Appendix A of the Preliminary Offering
Memorandum.
The Tax Increment and the Taxpayer Payments are subject to certain risks. Investment in the
Bonds involves certain risks, many of which are described in the Preliminary Offering
Memorandum. See "Special Note Regarding Forward Looking Statements" and "Risks to Owners
of the Bonds."
A Debt Service Reserve Account will be funded from Bond proceeds in an amount equal to the
Debt Service Reserve Requirement (as defined in the Bond Resolution) which is anticipated to be
equal to 10% of the par amount of the Bonds. A supplemental reserve will be built-up from
surplus Tax Increment and/or Taxpayer Payments until it equals twice the amount of the Debt
Service Reserve Requirement until January 1, 2009, and will be maintained in an amount equal
to the Debt Service Reserve Requirement thereafter (the "Supplemental Reserve Requirement").
(Refer also to the "Funds and Accounts" section in the Preliminary Offering Memorandum and to
the Bond Resolution in Appendix D.)
(Continued on next page)
C-2
CARMEL (INDIANA) REDEVELOPMENT DISTRICT
GENERAL COMMENTS (Cont'd)
Security and Sources of Payment (Cont'd)
Bonds maturing on February 1, 2009 are subject to optional redemption beginning October 1,
2007. If the collective balance in the Supplemental Reserve Subaccount and the Taxpayer Payment
Reserve Subaccount exceeds the Supplemental Reserve Requirement, the Commission will direct
the Trustee to either redeem a portion of the Bonds solely from excess funds in the Supplemental
Reserve Subaccount, or return funds in the Taxpayer Payment Reserve Subaccount to the
Taxpayer to the extent that the funds in the aforementioned Subaccounts exceed the Supplemental
Reserve Requirement. On February 1, 2009, after the Supplemental Reserve Requirement is
reduced on January 1, 2009, the Trustee will, without further direction, redeem a portion of the
•
Bonds at face value plus interest accrued to the redemption date in an amount equal to (within
authorized denominations) the excess amount above the reduced Supplemental Reserve
Requirement to the extent that funds are available in the Supplemental Reserve Subaccount (and
not from funds in the Taxpayer Payment Reserve Subaccount) (referred to herein as the
"Extraordinary Redemption"). Refer to Section 3(C)(1) and (2) and Section 11(D)(4) of the Bond
Resolution in Appendix D.
Tax Increment: Definition and Procedures
The debt service is payable from Tax Increment resulting from property taxes paid by owners of
real property (the "Tax Increment") within the EDA, all of which is an allocation area within the
meaning of the Act, and collected in the Allocation Fund of the Redevelopment Commission
pursuant to the Bond Resolution. All Tax Increment must be paid into the Allocation Fund under
IC 36-7-14-39 and the Bond Resolution. The base assessed value for purposes of this allocation
means the net assessed value of all the property in the allocation area as finally determined for the
assessment date immediately preceding the effective date of a declaratory resolution adopted
pursuant to IC 36-7-14-39 establishing the allocation area. The base assessment date for the real
property in the EDA is March 1, 1996, except for the parcels in the expansion of the EDA, the
base assessment date of which is March 1, 1997.
The incremental assessed value is determined by subtracting the base assessed value from the
current assessed value as of the assessment date. The incremental assessed value is then multiplied
by the current property tax rate to determine the Tax Increment. IC 36-7-14-39.5 entitles
taxpayers within an allocation area to credit (the "Additional Credit") payable from Tax Increment
equal to the State Property Tax Replacement Credit (the "PTRC") unless a redevelopment
commission recommends that the municipal legislative body pass a resolution to deny the
Additional Credit. At this time, the Commission has taken no action to deny the Additional Credit
in the EDA. The Taxpayer Agreement provides that the Commission will consider recommending
that the City Common Council pass a resolution to deny the Additional Credit if so requested by
the Taxpayer if the collection of Tax Increment is less than the annual debt service due on the
Bonds.
(Continued on next page)
C-3
CARMEL (INDIANA) REDEVELOPMENT DISTRICT (Cont'd)
GENERAL COMMENTS
Tax Increment: Definition and Procedures (Cont'd)
Pursuant to Indiana law, property taxes are due and payable to the County Treasurer each May
10 and November 10. Before July 15 of-the preceding calendar year, the Redevelopment
Commission must determine and notify the County Auditor of the amount by which Tax Increment
payable to the Allocation Fund is expected to exceed the amount of Tax Increment necessary to
meet the obligations which may be legally paid with such Tax Increment, including debt service
on the Bonds and debt service on any parity obligations. Excess Tax Increment may be used as
provided in the Bond Resolution. After property taxes are paid to the County Treasurer as
described above, on or before each June 30 and December 31, such taxes are paid over to the
County Auditor who, based on the previous year's certification, pays the portion of property tax
receipts which represents Tax Increment into the Allocation Fund. See "Procedures for Property
Assessment, Tax Levy and Collection."
Pursuant to the Bond Resolution, Tax Increment collected in the EDA will be paid immediately
into the Tax Increment Subaccount of the Principal and Interest Account of the Allocation Fund
held by the Trustee. Excess Tax Increment will be used to replenish the Debt Service Reserve
Account, if needed, and then flow into the Supplemental Reserve Subaccount and the Improvement
Subaccount of the General Account, subject to the Extraordinary Redemption provision as
prescribed in the Bond Resolution. See "Funds And Accounts" and "Optional Redemption" and
"Extraordinary Redemption" in the Preliminary Offering Memorandum and the Bond Resolution
contained in Appendix D.
The Merchants Square EDA and Tax Increment
= On February 18, 1997, the Commission adopted a Declaratory Resolution (which was confirmed
on April 21, 1997) which established the Merchants Square Economic Development Area and
designated the EDA as an "Allocation Area" for purposes of capturing Tax Increment. The EDA
and the Allocation Area were expanded on February 2, 1998. The EDA lies within the City of
Carmel in Hamilton County, Indiana. The EDA is located just west of Keystone Avenue between
Carmel Drive and 116`h Street in the heart of Carmel. Ben Mar, LLC (one of the entities
comprising the Taxpayer) is undertaking a major rehabilitation of a shopping center called
Keystone Square. The renovated shopping center, known as Merchants Square, will include an
upscale Marsh supermarket store, and numerous retail and specialty stores, including a Paul Harris
and Old Navy, and certain outlot developments (all together referred to throughout this Appendix
and the Preliminary Offering Memorandum as the "Merchants Square Development"). The
Merchants Square Development will be the primary contributor of Tax Increment. Marsh and the
owners of certain outlots will own their own stores, but the remainder of the stores in the shopping
mall will be owned by Ben Mar, LLC, who will lease the stores to the tenants. The road
improvements (the Project) to be funded with the Bonds will facilitate traffic flow into and through
the Area. Please refer to "The Taxpayer" section in the Preliminary Offering Memorandum and
to Appendix A for additional information on the Taxpayer and the Merchants Square
Development.
(Continued on next page)
C-4
CARMEL (INDIANA) REDEVELOPMENT DISTRICT
GENERAL COMMENTS (Cont'd)
The Merchants Square EDA and Tax Increment (Cont'd)
A part of the Merchants Square Development, the West building, a newly constructed 26,200 square
foot building located adjacent to the main mall building, has been open since the summer of 1997 and
is currently leased to five tenants. The West building was assessed as 35% complete as of the March
1, 1997 assessment date. Presently, construction is underway on the Marsh store and the Merchants
Square mall complex which are anticipated to be partially assessed as of the March 1, 1998
assessment date. The entire Merchants Square shopping center, including the Marsh store and the
outlot developments, are anticipated to be substantially completed and open by the end of 1998 and
100% assessed as of March 1, 1999.
Taxpayer Payments
The Commission and the Taxpayer will enter into the Taxpayer Agreement dated as of February 1,
1998 pursuant to which the Taxpayer agrees to make Taxpayer Payments if funds available in the Tax
Increment Subaccount are less than the Minimum Tax Increment due. The Minimum Tax Increment
is equal to 125% of the sum of the interest payment due on the next February 1 or August 1 and half
of the principal due on the next February 1 until the Supplemental Reserve Requirement (defined in
the Bond Resolution) is fully funded, and 100% of the sum thereafter. On or before each July 1 and
January 2, beginning July 1, 1999, the Trustee is to determine whether the funds available in the Tax
Increment Subaccount equal or exceed the Minimum Tax Increment. If it is less, the Trustee is to
notify the Underwriter, the Commission, and the Taxpayer on or before July 10 and January 10,
respectively, of the amount of the deficiency (the "Taxpayer Payment"). After receipt of such notice
by the Trustee, the Taxpayer shall pay the Taxpayer Payment on or before the immediately
succeeding July 15 or January 15 to the Trustee for the Owners of the Bonds. If the notice is not
received by the Taxpayer from the Trustee by July 15 or January 15, the Taxpayer Payment shall be
due within two business days after receipt of such notice by the Taxpayer from the Trustee. The
Trustee shall deposit the Taxpayer Payment into the Taxpayer Payment Subaccount and the Taxpayer
Payment Reserve Subac:count created under the Bond Resolution. See "Funds and Accounts" in the
Preliminary Offering Memorandum, and refer also to the Bond Resolution in Appendix D and the
Taxpayer Agreement in Appendix F of the Preliminary Offering Memorandum. For information
about the Taxpayer, see Appendix A.
Summary of Estimated Project Costs and Funding - Page C-9
This schedule presents estimated project costs and estimated bond-related costs. An amount of
$1,910,000 of Bond proceeds will be used to fund infrastructure costs. Approximately $243,630 will
be used to net fund capitalized interest. In addition, $265,500 of Bond proceeds will be used to fund
a debt service reserve. Also, $182,122 will be used to pay Bond issuance costs and contingencies
and $70,000 will be used to pay the underwriter discount. The primary funding source for these costs
will be the $2,655,000 of bond proceeds. Additional funding will come from the accrued interest on
the Bonds.
(Continued on next page)
C-5
CARMEL (INDIANA) REDEVELOPMENT DISTRICT (Cont'd)
GENERAL COMMENTS
Schedule of Amortization of$2.655.000 of Tax Increment Revenue Bonds of 1998 - Page C-10
The amortization of the $2,655,000 Tax Increment Revenue Bonds is presented in this schedule. The
Bonds, dated February 1, 1998, are anticipated to be issued as two term bonds with $605,000
maturing on February 1, 2008 and $2,050,000 maturing on February 1, 2018 and subject to
mandatory sinking fund redemption (the "Term Bonds") as shown in this schedule. The amount and
maturity date of the Term Bonds and the interest rates shown in this schedule are preliminary and
subject to change. In this schedule, the 2008 Term Bonds are assumed to accrue interest from the
issue date at a rate of 6.50% per annum, and the 2018 Term Bonds are assumed to accrue interest
from the issue date at a rate of 7.00% per annum. The final terms and interest rate will be
determined through a negotiated sale with McDonald & Company Securities, Inc. Interest is payable
semiannually, on February 1s` and August ls`, beginning August 1, 1998, on a basis of twelve thirty-
day months for a 360-day year.
Estimated Assessed Value and Forecasted Tax Increment from Proposed Real Property Improvements
- Pages C-11 and C-12
These schedules show the forecasted Tax Increment based upon estimated assessed values of the
Merchants Square Development, which includes the Marsh Supermarket store, the West Building,
the renovated mall and certain outlot developments. Refer to the "The Merchants Square EDA and
Tax Increment" section herein.) The upper range of preliminary assessed value estimates on page C-
11 were provided by The J.E. Beres Company (the "Property Tax Consultant"), while the lower range
assessed value estimates shown on page C-12 were provided by the Clay Township Assessor using
the current "True Tax Valuation" method. (Refer to the section "Procedures for Property Tax
Assessment, Tax Levy, and Collection" contained in the Preliminary Offering Memorandum.) The
J. E. Beres Company prepared all of the property reassessments in Hamilton County (including Clay
Township) during the last statewide general reassessment. The Property Tax Consultant takes actual
= cost into consideration when estimating true tax value, while the Clay Township Assessor does not.
Both the Property Tax Consultant and the Clay Township Assessor relied solely upon information
about the proposed Merchants Square Development provided by The Linder Company of Indiana,
Inc., including construction plans, construction schedules and construction cost information.
The actual assessments will be made by the Clay Township Assessor based on actual real property
improvements completed as of each March 1 assessment date, which may differ significantly from
the range of preliminary assessed value estimates shown in these schedules and which form the basis
for the Tax Increment forecast. Neither the Taxpayer, or any other taxpayers in the EDA, have
covenanted not to file an appeal to reduce their assessments, with the following exception. In the
Taxpayer Agreement, the Taxpayer has covenanted, upon receipt of the March 1, 1999 assessments
of the improvements to the Taxpayer's properly in the EDA, to initially appeal to the Hamilton County
Board of Review for an increase of its assessment to an amount which, when combined with the other
real property assessments in the EDA (less the base assessed value of the EDA) and, multiplied by
the net property tax rate (as assumed in the schedules provided in this Appendix), will produce
sufficient Tax Increment to cover the maximum annual debt service due on the Bonds. In addition,
the Taxpayer has covenanted to provide Taxpayer Payments as set forth in the Taxpayer Agreement.
In the event that the appeal is unsuccessful, the Tax Increment could be expected to be closer to the
lower range shown on the schedule on page C-12 and the required Taxpayer Payments may reach the
level shown on the schedule on page C-14.
(Continued on next page)
C-6
CARMEL (INDIANA) REDEVELOPMENT DISTRICT
GENERAL COMMENTS (Cont'd)
Estimated Assessed Value and Forecasted Tax Increment from Proposed Real Property Improvements
(Cont'd)
On December 22, 1997, the Indiana Tax Court ruled that the true tax value method of valuing
property for purposes of levying property taxes was unconstitutional and ordered the State
Board of Tax Commissioners and the Indiana General Assembly to develop a valuation system
based on an objective measure of property wealth. The Tax Court will determine how long the
State Board of Tax Commissioners and the Indiana General Assembly will have to develop a
new valuation system. Meanwhile, the old valuation system will continue in effect. The State
Board of Tax Commissioners has indicated that it will appeal this ruling. The Commission
cannot predict the impact on property tax collections, or the timing of, future judicial actions
in this case, or of legislation, regulations or rulings enacted to implement any subsequent ruling.
Moreover, the Commission cannot predict the outcome, or timing, of any subsequent actions by
the Tax Court or the Indiana Supreme Court.
The incremental assessed value was determined by subtracting the Base Net Assessed Value (provided
by the Property Tax Consultant) from the estimated net assessed value of the EDA for each of the
years shown in this schedule. The incremental assessed value is multiplied by the preliminary 1998
gross tax rate of$8.0998 (per $100 assessed value) less the Additional Credit equal to the 1997 State
PTRC factor for the City of Cannel to determine the forecasted Tax Increment shown in this
schedule. The City's gross tax rate and PTRC were assumed to remain the same throughout the term
of the Bonds. No attempt was made to factor in the effect of future annexations or statewide
reassessments.
On February 3, 1998, the Indiana Senate passed SB 352, which would eliminate the school
general fund from the property tax levy imposed by school corporations in Indiana. The effect
of this legislation would be to eliminate the property tax rate attributable to the school general
fund from the combined tax rates used to calculate tax increment. Neither the City, the
Commission nor the District can predict the likelihood of further action by the Indiana House
of Representatives on SB 352, nor the ultimate enactment of SB 352 into law. Such legislation,
if enacted, could cause a 36% reduction in annual Tax Increment which would increase the
likelihood that Taxpayer Payments would be needed to pay debt service on the Bonds.
See "Risks to Owners of the Bonds" contained in the Preliminary Offering Memorandum dated
February 12, 1998.
(Continued on next page)
C-7
CARMEL (INDIANA) REDEVELOPMENT DISTRICT
(Cont'd)
GENERAL COMMENTS
Estimated Revenue Requirements for Annual Debt Service and the Supplemental Reserve - Page C-13
and C-14
These schedules demonstrate how the forecasted Tax Increment, together with the required Taxpayer
Payments are estimated to be sufficient to pay the annual debt service due on the Bonds and to
accumulate surplus revenues to meet the Supplemental Reserve Requirement as prescribed in the
Bond Resolution. (See Appendix D and refer to "Security and Sources of Payment" and "Taxpayer
Payments" herein.) These schedules each begin with the annual "Net Debt Service" as calculated in
the "Schedule of Amortization of$2,655,000 of Tax Increment Revenue Bonds of 1998" on page C-
10. The forecasted Tax Increment revenues shown on the schedule on pages C-13 and C-14 are based
on the preliminary estimated assessed value of the Merchants Square Development provided by the
Property Tax Consultant (upper range) and the Clay Township Assessor (lower range) per the
schedules of"Estimated Assessed Value and Forecasted Tax Increment from Proposed Real Property
Improvements" on pages C-11 and C-12, respectively. In accordance with the Bond Resolution, the
surplus Tax Increment and surplus Taxpayer Payments are to be accumulated in the Supplemental
Reserve Subaccount and the Taxpayer Payment Reserve Subaccount (both Subaccounts within the
General Account of the Allocation Fund held by the Trustee) until the combined surplus in these
subaccounts reaches the Supplemental Reserve Requirement (equal to two times the Debt Service
Reserve Requirement, and then equal to 100% of the Debt Service Reserve Requirement after January
1, 2009).
When the upper range Tax Increment forecast is assumed, the Supplemental Reserve would reach an
amount equal to two times the Debt Service Reserve Requirement by February 1, 2005, and the
Supplemental Reserve would be considered "fully funded" for purposes of reducing the minimum Tax
Increment requirement to 100% of the annual debt service due on the Bonds (beginning with the bond
year ending February 1, 2006) as shown on the schedule on page C-13. Assuming the upper range
Tax Increment forecast, no additional Taxpayer Payments would be required after the February 1,
2005 bond payment date, as shown in the schedule on page C-13. Both the schedule on page C-13
and the schedule on page C-14 assume that by the February 1, 2009 bond payment date (having met
the Supplemental Reserve Requirement), the funds in the Supplemental Reserve Subaccount (rounded
to the highest $5,000 multiple) would be used to redeem a portion of the Bonds, and funds in the
Taxpayer Payment Reserve Subaccount would be returned to the Taxpayer, to the extent that such
funds exceed the minimum $265,500 of surplus funds which must remain in the Supplemental
Reserve Subaccount as long as the Bonds remain outstanding. Assuming the upper range Tax
Increment forecast shown on the schedule on page C-13, the Bonds could be fully redeemed by
February 1, 2015. Assuming the lower range Tax Increment forecast on the schedule on page C-14,
after the partial redemption of the Bonds and reimbursement of the Taxpayer shown on February 1,
2009, the Taxpayer would continue to make Taxpayer Payments as shown in the schedule and as
required by the Taxpayer Agreement.
C-8
CARMEL (INDIANA)REDEVELOPMENT DISTRICT
Merchants Square Project
SUMMARY OF ESTIMATED PROJECT COSTS AND FUNDING
Estimated Project Costs:
Public infrastructure costs $1,910,000
Estimated bond-related costs
Capitalized interest $254,381
Less: est. interest earnings (10,751)
Net capitalized interest(1) 243,630
Debt service reserve 265,500
Bond issuance costs and contingencies 182,122
0
O
f1
Underwriter's discount 70,000
sn
TOTAL ESTIMATED COSTS $2,671,252
_ T
m
Estimated Project Funding:
0
Proposed Tax-Exempt Tax Increment Revenue Bonds $2,655,000
Accrued interest(2) 16,251
TOTAL ESTIMATED FUNDING $2,671,251
(1) Assumes capitalized interest is net funded from an estimated$10,751 of
interest earnings at 4%on$243,630. Assumes capitalized interest is
reduced by Debt Service Reserve earnings in the Tax Increment
Subaccount of$19,856 at 5.3%on$265,500 from 3/3/98 through
8/1/99.
(2) Assumes bond closing March 3, 1998.
(Subject to comments in the attached letter
dated February 12, 1998 of H.J Umbaugh&Associates.)
C-9
CARMEL (INDIANA)REDEVELOPMENT DISTRICT
Merchants Square Project
SCHEDULE OF AMORTIZATION OF$2,655,000 OF TAX INCREMENT REVENUE BONDS OF 1998
Interest payable semiannually beginning August 1,1998.
Principal payable annually beginning February 1,2001.
Assumes Bonds dated February 1,1998.
Assumed Estimated Estimated Bond Year
Payment Principal Interest Semiannual Semiannual Capitalized Reserve Trustee Net Debt Net Debt
Dates Balance Principal Rates Interest Debt Service Interest Earnings(1) Fee Service Service
(--In$1,000's--) (%)
08/01/98 $2,655 $91,412.50 $91,412.50 $85,627.55 ($5,784.95) $1,500.00 $1,500.00
02/01/99 2,655 91,412.50 91,412.50 84,376.75 (7,035.75) 1,500.00 1,500.00 $3,000.00
08/01/99 2,655 91,412.50 91,412.50 84,376.75 (7,035.75) 1,500.00 1,500.00
02/01/00 2,655 91,412.50 91,412.50 0.00 (7,035.75) 1,500.00 85,876.75 87,376.75
08/01/00 2,655 91,412.50 91,412.50 0.00 (7,035.75) 1,500.00 85,876.75
02/01/01 2,655 91,412.50 91,412.50 0.00 (7,035.75) 1,500.00 85,876.75 171,753.50
08/01/01 2,655 91,412.50 91,412.50 0.00 (7,035.75) 1,500.00 85,876.75
02/01/02 2,655 91,412.50 91,412.50 0.00 (7,035.75) 1,500.00 85,876.75 171,753.50
08/01/02 2,655 91,412.50 91,412.50 0.00 (7,035.75) 1,500.00 85,876.75
02/01/03 2,655 $100 (2) 6.50 91,412.50 191,412.50 0.00 (7,035.75) 1,500.00 185,876.75 271,753.50
08/01/03 2,555 88,162.50 88,162.50 0.00 (7,035.75) 1,500.00 82,626.75
5 02/01/04 2,555 100 (2) 6.50 88,162.50 188,162.50 0.00 (7,035.75) 1,500.00 182,626.75 265,253.50
- 08/01/04 2,455 84,912.50 84,912.50 0.00 (7,035.75) 1,500.00 79,376.75
g 02/01/05 2,455 100 (2) 6.50 84,912.50 184,912.50 0.00 (7,035.75) 1,500.00 179,376.75 258,753.50
08/01/05 2,355 81,662.50 81,662.50 0.00 (7,035.75) 1,500.00 76,126.75
02/01/06 2,355 100 (2) 6.50 81,662.50 181,662.50 0.00 (7,035.75) 1,500.00 176,126.75 252 253.50
u• 08/01/06 2,255 78,412.50 78,412.50 0.00 (7,035.75) 1,500.00 72,876.75
< 02/01/07 2,255 100 (2) 6.50 78,412.50 178,412.50 0.00 (7,035.75) 1,500.00 172,876.75 245,753.50
m08/01/07 2,155 75,162.50 75,162.50 0.00 (7,035.75) 1,500.00 69,626.75
E 02/01/08 2,155 105 (2) 6.50 75,162.50 180,162.50 0.00 (7,035.75) 1,500.00 174,626.75 244,253.50
W 08/01/08 2,050 71,750.00 71,750.00 0.00 (7,035.75) 1,500.00 66,214.25
02/01/09 2,050 100 (3) 7.00 71,750.00 171,750.00 0.00 (7,035.75) 1,500.00 166,214.25 232,428.50
u 08/01/09 1,950 68,250.00 68,250.00 0.00 (7,035.75) 1,500.00 62,714.25
02/01/10 1,950 150 (3) 7.00 68,250.00 218,250.00 0.00 (7,035.75) 1,500.00 212,714.25 275,428.50
vi
08/01/10 1,800 63,000.00 63,000.00 0.00 (7,035.75) 1,500.00 57,464.25
t 02/01/11 1,800 160 (3) 7.00 63,000.00 223,000.00 0.00 (7,035.75) 1,500.00 217,464.25 274,928.50
08/01/11 1,640
57,400.00 57,400.00 0.00 (7,035.75) 1,500.00 51,864.25
w
a 02/01/12 1,640 170 (3) 7.00 57,400.00 227,400.00 0.00 (7,035.75) 1,500.00 221,864.25 273,728.50
= 08/01/12 1,470 51,450.00 51,450.00 0.00 (7,035.75) 1,500.00 45,914.25
D 02/01/13 1,470 180 (3) 7.00 51,450.00 231,450.00 0.00 (7,035.75) 1,500.00 225,914.25 271,828.50
m 08/01/13 1,290 45,150.00 45,150.00 0.00 (7,035.75) 1,500.00 39,614.25
02/01/14 1,290 195 (3) 7.00 45,150.00 240,150.00 0.00 (7,035.75) 1,500.00 234,614.25 274,228.50
▪ 08/01/14 1,095 38,325.00 38,325.00 0.00 (7,035.75) 1,500.00 32,789.25
' 02/01/15 1,095 210 (3) 7.00 38,325.00 248,325.00 0.00 (7,035.75) 1,500.00 242,789.25 275,578.50
08/01/15 885 30,975.00 30,975.00 0.00 (7,035.75) 1,500.00 25,439.25
02/01/16 885 225 (3) 7.00 30,975.00 255,975.00 0.00 (7,035.75) 1,500.00 250,439.25 275,878.50
08/01/16 660 23,100.00 23,100.00 0.00 (7,035.75) 1,500.00 17,564.25
02/01/17 660 240 (3) 7.00 23,100.00 263,100.00 0.00 (7,035.75) 1,500.00 257,564.25 275,128.50
08/01/17 420 14,700.00 14,700.00 0.00 (7,035.75) 1,500.00 9,164.25
02/01/18 420 420 (3) 7.00 14,700.00 434,700.00 0.00 (272,535.75) 1,500.00 163,664.25 172,828.50
Totals $2,655 $2,658,950.00 $5,313,950.00 $254,381.05 ($545,679.20) $60,000.00 $4,573,889.75 $4,573,889.75
(1) Assumes Reserve Earnings interest rate at 5.3%. Assumes Reserve Earnings from 3/3/98 through 8/1/99 are deposited into the Tax Increment Subaccount
and used to reduce the capitalized interest due through 8/1/99. Assumes Bond Reserve of$265,500 is used to make final bond payment in 2018.
(2) Represents$605,000 of Term Bonds.(subject to change)
(3) Represents$2,050,000 of Term Bonds.(subject to change)
(Subject to comments in the attached letter
dated February 12,1998 of H.J Umbaugh&Associates.)
C-10
CARMEL(INDIANA)REDEVELOPMENT COMMISSION
Merchants Square Project
ESTIMATED ASSESSED VALUE AND TAX INCREMENT FROM PROPOSED REAL PROPERTY IMPROVEMENTS
(Upper range of assessments as determined by Property Tax Consultant.)
1996 pay 1997 1997 pay 1998 1998 payable 1999 1999 payable 2000
ACTUAL ACTUAL % Estimated % Estimated
Net Assessed Net Assessed Assessed Net Assessed Assessed Net Assessed
Identifier Value(1) Value(1) for Remodel Value(5) for Remodel Value(5)
East stores $103,930 $113,500 65% $183,570 100% $281,700
Land 34,570 34,570 34,570 100% 43,200 -
Bank,Theater,part of Mall 1,851,200 1,855,170 (3) 80% 1,878,700 100% 2,289,370
MARSH 90% 981,270 100% 1,090,300
First Federal Bank(2) 99,230 (2) 99,230 100% 131,880
Land next to West Building 119,000 13,330 13,330 100% 55,500
Outlot-steakhouse(2) 34,130 (2) 34,130 100% 233,780
Remainder of Mall-Improvements 1,055,870 1,055,870 (3) 75% 1,743,010 100% 2,324,000
Land 316,630 316,630 (3) 316,630 458,270
West building 403,300 (4) 100% 403,300 100% 403,300
Land 187,500 (4) 187,500 100% 187,500
Land 7,330 7,330 100% 30,500 mr
Land 13,330 13,330 100% 55,500
Total Assessed Value $3,481,200 $4,133,890 $5,895,900 $7,584,800
Less: Base Net Assessed Value (3,481,200) (3,614,560)(2) (3,614,560) (3,614,560)
Total Incremental Assessed Value 0 519,330 2,281,340 3,970,240
Times Net Tax Rate(6) 7.1125 7.1685 7.1685 7.1685
1 Forecasted Tax Increment $0 $37,230 $163,540 $284,6101
(1) Based on assessment records provided by the Clay Township Assessor's office.
(2) The EDA and the Allocation Area were expanded on February 2, 1998 to add two parcels.
(3) The previous mall owner has made an appeal to lower the mall assessment and is awaiting a Board of Review judgement.
(4) The Taxpayer has made an appeal to increase the assessment on the West Building to the estimated values shown above.
(5) Assessed value estimates were provided on 12/5/97 by the Property Tax Consultant,based on construction plans
and schedules provided by the Taxpayer,for the proposed Merchants Square Development.
(6) Based on the preliminary 1998 City of Carmel gross tax rate of$8.0998 less the Additional Credit equal to the 1997 State
PTRC of.114976 for the City of Carmel.
(Subject to comments in the attached letter
dated February 12, 1998 of H.J Umbaugh&Associates.)
C- 11
CARMEL(INDIANA)REDEVELOPMENT COMMISSION
Merchants Square Project
ESTIMATED ASSESSED VALUE AND TAX INCREMENT FROM PROPOSED REAL PROPERTY IMPROVEMENTS
(Lower range of assessments as determined by the Clay Township Assessor.)
1996 pay 1997 1997 pay 1998 1998 payable 1999 1999 payable 2000
ACTUAL ACTUAL Estimated Estimated
Net Assessed Net Assessed Percent Net Assessed Percent Net Assessed
Identifier Value(1) Vah_jelp Assessed Value(11 Assessed Value(11
East stores $103,930 $113,500 100% $212,400 100% $212,400
Land 34,570 34,570 100% 34,570 100% 34,570
Bank,Theater,part of Mall 1,851,200 1,855,170 (3) 100% 1,741,870 100% 1,741,870
MARSH 100% 799,570 100% 799,570
First Federal Bank(2) 99,230 (2) 100% 99,230 100% 129,600
Land next to West Building 119,000 13,330 100% 13,330 100% 13,330
Oudot-steakhouse(2) 34,130 (2) 100% 202,130 100% 202,130
Remainder of Mall-Improvements 1,055,870 1,055,870 (3) 100% 1,452,430 100% 1,452,430
Land 316,630 316,630 (3) 100% 316,630 100% 316,630
West building 202,470 (4) 100% 342,900 100% 342,900
Land 141,000 (4) 100% 141,000 100% 141,000
Land 7,330 100% 7,330 100% 7,330
Land 13,330 100% 13,330 100% 13,330
Total Assessed Value $3,481,200 $3,886,560 $5,376,720 $5,407,090
Less: Base Net Assessed Value (3,481,200) (3,614,560)(2) (3,614,560) (3,614,560)
.
Total Incremental Assessed Value 0 272,000 1,762,160 1,792,530
Times Net Tax Rate(5) 7.1125 7.1685 7.1685 7.1685
1 Forecasted Tax Increment $0 $19,500 $126,320 $128,5001
(1) Based on current assessment records and estimates provided by the Clay Township Assessor's office,which are based on
construction plans and schedules provided by the Taxpayer,for the proposed Merchants Square Development.
(2) The EDA and the Allocation Area were expanded on February 2,1998 to add two parcels.
(3) The previous mall owner has made an appeal to lower the mall assessment and is awaiting a Board of Review judgement.
(4) The Taxpayer has made an appeal to increase the assessment on the West Building to the estimated values shown above.
(5) Based on the preliminary 1998 City of Carmel gross tax rate of$8.0998 less the Additional Credit equal to the 1997 State
PTRC of.114976 for the City of Carmel.
(Subject to comments in the attached letter
dated February 12, 1998 of H.J Umbaugh&Associates.)
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APPENDIX D
Bond Resolution
CARMEL REDEVELOPMENT COMMISSION
RESOLUTION NO. 6-1998
BOND RESOLUTION
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 3
SECTION 2. GRANTING CLAUSES 6
SECTION 3. THE NOTES AND THE 1998 BONDS. 7
SECTION 4. FORM OF THE NOTES AND 1998 BONDS. 15
SECTION 5. SALE OF THE NOTES AND THE 1998 BONDS 22
SECTION 6. DELIVERY OF INSTRUMENTS 23
SECTION 7. PURCHASE AGREEMENT 23
SECTION 8. OFFERING MEMORANDUM AND CONTINUING DISCLOSURE. 24
SECTION 9. EXECUTION OF THE NOTES AND THE 1998 BONDS 24
SECTION 10. REDEVELOPMENT DISTRICT CAPITAL FUND 25
SECTION 11. FLOW OF FUNDS 26
SECTION 12. ISSUANCE OF ADDITIONAL BONDS 30
SECTION 13. TAX COVENANTS 31
SECTION 14. CONTRACTUAL NATURE OF THIS RESOLUTION. 33
SECTION 15. DEFEASANCE OF THE BONDS. 34
SECTION 16. AMENDING SUPPLEMENTAL RESOLUTION 34
SECTION 17. CONSENT TO SUPPLEMENTAL RESOLUTIONS 35
SECTION 18. EVENTS OF DEFAULT 36
SECTION 19. THE TRUSTEE 40
SECTION 20. THE REGISTRAR AND PAYING AGENT 45
SECTION 21. NOTICES.
45
SECTION 22. BUSINESS DAYS. 45
SECTION 23. SEVERABILITY 46
SECTION 24. REPEAL OF CONFLICTING PROVISIONS 46
SECTION 25. EFFECTIVE DATE 46
CARMEL REDEVELOPMENT COMMISSION
RESOLUTION NO. 6-1998
BOND RESOLUTION
WHEREAS,IC 36-7-14 and IC 36-7-25 and all related and supplemental statutes as in effect
on the issue date of the Notes(defined below)and the Bonds(defined below)including IC 5-1-5 and
IC 5-1-14 (collectively, "Act") authorize the Redevelopment Commission("Commission") of the
City of Carmel, Indiana ("City"), to establish an economic development area and to establish an
allocation area within an economic development area providing for the distribution of property tax
revenues generated within the allocation area;
WHEREAS, the Commission adopted a declaratory resolution("Declaratory Resolution")
on February 18, 1997, and the Declaratory Resolution was confirmed by a Confirmatory Resolution
adopted on April 21, 1997 ("Confirmatory Resolution") and amended by an amendatory resolution
adopted on February 2, 1998 ("Amendatory Resolution");
WHEREAS, the Commission, by the Declaratory Resolution as confirmed by the
Confirmatory Resolution and amended by the Amendatory Resolution (collectively "Area
Resolution"), established the boundaries of the Merchants Square Economic Development Area
("Area") and declared this area to be an economic development area, and the Area is more
particularly described in the map attached to and incorporated in the Declaratory Resolution;
WHEREAS,pursuant to the Area Resolution,the economic development plan("Plan") for
the Area was approved;
WHEREAS, pursuant to the Area Resolution and the Economic Development Plan of the
Area, the Commission designated the entire Area as an allocation area ("Allocation Area") for
purposes of capturing incremental ad valorem property tax revenues levied and collected in the
Allocation Area (as further defined in Section 1 "Tax Increment ) to pay debt service on bonds
issued to finance the economic development project described below and to pay certain other costs
permitted by the Act and this Resolution;
WHEREAS, IC 36-7-14-39.5 provides for an additional credit for property taxes in the
Allocation Area payable from Tax Increment, which credit may be eliminated or reduced by
resolution of the Common Council("Common Council")upon recommendation of the Commission;
WHEREAS,the Common Council has taken no action to provide that the additional credit
under IC 36-7-14-39.5 does not apply in the Allocation Area;
WHEREAS,the Commission has found and determined that: (i)the planning,replanning,
development, and redevelopment of the Area is a public and governmental function that cannot be
accomplished through the ordinary operations of private enterprise; (ii) the planning, replanning,
development and redevelopment of the Area would benefit the public health, safety, morals, and
welfare in, increase and economic well-being of, and serve to protect and increase property values
in, the City and the State of Indiana and would be of public utility and benefit;and(iii)the planning,
replanning, development and redevelopment of the Area are public uses and purposes for which
money may be spent;
WHEREAS,the Commission finds and determines that in order to proceed with the planning,
replanning, development and redevelopment of the Area, it is necessary for the Commission to issue
special taxing district bonds of the Carmel Redevelopment District (the "District"), in the name of
the City,payable solely out of Tax Increment allocated and deposited as provided in this Resolution
and from Taxpayer Payments (as defined in Section 1), in the aggregate principal amount not to
exceed Two Million Six Hundred Fifty-five Thousand Dollars ($2,655,000) ("1998 Bonds"), and,
if necessary to issue the Notes to provide interim financing for the purpose of procuring funds to be
applied on the cost of economic development and redevelopment in the Area and the acquisition and
construction of certain local public improvements in the Area (as described in Exhibit A)
("Projects"), including the repayment of the Notes, incidental expenses incurred in connection with
the Projects as provided in the Act, capitalized interest on the 1998 Bonds, a debt service reserve for
the 1998 Bonds, and costs associated with issuance of the Notes and the 1998 Bonds ("Costs of the
Projects");
WHEREAS, the Commission estimates that the total Costs of the Projects will not exceed
$2,655,000;
WHEREAS,the Commission hereby finds that it is in the best interests of the District to sell
the Notes at a negotiated, private sale to a sophisticated investor or investors and to sell the 1998
Bonds at a negotiated sale through an underwriter to a sophisticated investor or investors;
WHEREAS, the 1998 Bonds to be issued under Section 3 of this Resolution are issued
pursuant to the authority granted in the Act;
WHEREAS, the Commission on January 15, 1998, adopted a preliminary bond resolution
authorizing issuance of the 1998 Bonds in an amount not to exceed $2,655,000 and has published
and posted a notice of determination to issue bonds and the objecting period has expired without the
filing of an objecting petition;
WHEREAS, the Commission has notified the State Board of Tax Commissioners of the
creation of the Area, will report to the State Board of Tax Commissioners the appropriation of the
Bond and Note proceeds, and has obtained all approvals required by law for the issuance of the
Notes and the 1998 Bonds;
NOW, THEREFORE, BE IT RESOLVED BY THE REDEVELOPMENT COMMISSION
OF THE CITY OF CARMEL, INDIANA, AS FOLLOWS:
SECTION 1. DEFINITIONS. All terms defined herein and all pronouns used in this
Resolution shall be deemed to apply equally to singular and plural and to all genders. All terms
defined elsewhere in this Resolution shall have the meaning given in such definition. In this
Resolution, unless a different meaning clearly appears from the context:
"Act" means IC 5-1-5, IC 5-1-14-4, IC 36-7-14 and IC 36-7-25 and all related and
supplemental acts in effect on the issue dates of the Notes and the 1998 Bonds.
"Allocation Fund" means the special fund established under the Act for the Tax Increment
collected in the Allocation Area.
D-2
"Area" means the Merchants Square Economic Development Area.
"Bond Principal and Interest Account" means the account established under Section 11.
"Bond Resolution" or"Resolution"means thishe 1998 Bonds
BondResolution,as t may be supplemented and Commission
on February 2, 1998,and authorizing the issuance of
amended from time to time in accordance with its provisions.
"Bonds" means the 1998 Bonds and any Parity Obligations.
"Capital Fund" means the Redevelopment District Capital Fund established under the Act.
"City" means the City of Carmel,Indiana.
"Code" means the Internal Revenue Code of 1986, as amended and in effect on the date of
issuance of the 1998 Bonds and the applicable judicial decisions and published rulings and any
applicable regulations promulgated thereunder.
"Commission" means the Carmel Redevelopment Commission.
"Costs of the Projects" means all costs of the Projects as set forth in the recitals of this
Resolution and in Exhibit A.
"Debt Service" means the principal of and interest on the Bonds, lease rentals on any Parity
Obligations which are leases and any fiscal agency charges associated with the Bonds and the
collection of Tax Increment and Taxpayer Payments.
"Debt Service Reserve Account" means the Debt Service Reserve Account created under
Section 11.
"Debt Service Reserve Requirement" means the least of(i) maximum principal and interest
due on the 1998 Bonds; (ii) 125% of average annual debt service on the 1998 Bonds; or(iii) 10%
of the proceeds of the 1998 Bonds.
"District" means the Carmel Redevelopment District.
"General Account" means the General Account established under Section 11.
"Improvement Subaccount" means the Improvement Subaccount of the General Account
established under Section 11 of this Bond Resolution.
"Minimum Tax Increment"means an amount equal to 125%of the sum of(i)the interest due
on the 1998 Bonds on the next February 1 or August 1 and(ii) one-half of the principal due on the
1998 Bonds on the next February 1 until the Supplemental Reserve Requirement is fully funded and
100% of such sum thereafter.
"1998 Bonds" means the Bonds described in Section 3.
D-3
"Note Purchase Agreement" means the purchase agreement for the Notes authorized by
Section 7.
"Note Purchaser" means the original purchaser of the Notes.
"Notes" means the notes authorized by Section 3.
"Notice Address" means with respect to the City and the Taxpayer:
City and Commission:
Carmel Redevelopment Commission
One Civic Square
Carmel, IN 46032
Attention: Department of Community Services
City Attorney:
Douglas Haney
City Attorney
One Civic Square
Carmel, IN 46032
Taxpayer:
The Linder Company of Indiana, Inc.
Keystone at the Crossing
8555 North River Road, Suite 375
Indianapolis, IN 46240-4905
The notice addresses of the Trustee, Registrar and Paying Agent shall be set forth in the
Acceptance attached hereto.
"Owner" means a registered owner of the Bonds.
"Parity Obligations" means any obligations (including leases) of the Commission issued on
a parity with the 1998 Bonds under Section 12.
"Paying Agent" means the Paying Agent so designated under Section 3(F) or any successor
Paying Agent appointed under this Resolution.
"Projects" means the construction of certain road and drainage improvements and traffic
signals as described in Exhibit A.
"Purchase Agreement" means the Bond Purchase Agreement for the 1998 Bonds.
D-4
"Purchaser" means the McDonald& Company Securities,Inc.,the underwriter for the 1998
Bonds.
"Qualified Investments means any direct obligation of the United States of America or other
investment in which the Commission is permitted by Indiana law to invest at the time of investment.
"Registrar" means the Registrar so designated under Section 3(F)or any successor Registrar
appointed under this Resolution.
"State" means the State of Indiana.
"Supplemental Reserve Requirement" means an amount equal to twice the amount of the
Debt Service Reserve Requirement until January 1, 2009 and the amount of the Debt Service
Reserve Requirement thereafter.
"Supplemental Reserve Subaccount" means the Supplemental Reserve Subaccount of the
General Account established under Section 11 of this Bond Resolution.
"Tax Increment means all real property tax proceeds from the assessed valuation of real
property in the Allocation Area in excess of the assessed valuation described in IC 36-7-14-39(b)(1)
minus the additional credit under IC 36-7-14-39.5, as such statutory provision exists on the date of
the issuance of the 1998 Bonds.
"Tax Increment Subaccount"means the Tax Increment Subaccount established under Section
11 of this Resolution.
"Taxpayer" shall mean collectively and jointly and severally,Linder Group,Inc., an Indiana
corporation, The Linder Company of Indiana, Inc., an Indiana corporation, Ohio Retail Services,
LLC, an Ohio limited liability company, J.L. Henry Company, an Indiana corporation, Ben Mar,
LLC, an Indiana limited liability company and their respective assigns or successors in interest.
"Taxpayer Agreement" shall mean the Taxpayer Agreement, dated as of February 1, 1998,
between the Commission and the Taxpayer.
"Taxpayer Payment Subaccount" means the Taxpayer Payment Subaccount established in
the Bond Principal and Interest Account under Section 11 of this Resolution.
"Taxpayer Payment Reserve Subaccount"means the Taxpayer Payment Reserve Subaccount
established in the General Account under Section 11 of this Resolution.
"Taxpayer Payments" shall mean the payments made by the Taxpayer under the Taxpayer
Agreement, securing the 1998 Bonds.
"Trustee" means the trustee as appointed pursuant to Section 3(F) or any successor Trustee
appointed under this Resolution.
SECTION 2. GRANTING CLAUSES
D-5
(A) The Commission,in consideration of the premises and of the purchase and acceptance
of the 1998 Bonds by the Owners, in order to secure the payment of the Debt Service on the Bonds
according to their tenor and effect and to secure the performance and observance by the Commission
of all covenants expressed or implied herein and in the Bonds, does hereby pledge the rights,
interests,properties,money and other assets described below("Trust Estate")to the Trustee for the
benefit of the Owners of the 1998 Bonds for the securing of the performance of the obligations of
the Commission set forth in this Resolution, such pledge to be effective as set forth in IC 5-1-14-4
without the recording of this Resolution or any other instrument:
(1) All cash and securities now or hereafter held in the Capital Fund and the
Allocation Fund and the investment earnings thereon and all proceeds thereof(except to the
extent transferred or disbursed from such funds and accounts from time to time in accordance
with this Resolution);
(2) All Tax Increment and Taxpayer Payments required to be deposited for the
benefit of the 1998 Bonds under this Resolution; and
(3) Any money hereinafter pledged to the Trustee as security to the extent of that
pledge;
provided, however, that if the Commission shall pay or cause to be paid, or there shall otherwise be
paid or made provision for payment of Debt Service on the 1998 Bonds due, or to become due
thereon, at the times and in the manner mentioned in the Bonds, and shall pay or cause to be paid
or there shall otherwise be paid or made provision for payment to the Owners of the outstanding
1998 Bonds of all sums of money due or to become due according to the provisions hereof,then this
Resolution and the rights hereby granted shall cease, terminate and be void; otherwise this
Resolution shall be and remain in full force and effect.
(B) The Commission,in consideration of the premises and of the purchase and acceptance
of the Notes by the Note Purchaser according to their tenor and effect and to secure the performance
and observance by the Commission of all covenants expressed or implied herein and in the Notes,
does hereby pledge the proceeds of the 1998 Bonds to the repayment of the Notes for the benefit of
the owners of the Notes for the securing of the performance of the obligations of the Commission
set forth in this Resolution, such pledge to be effective as set forth in IC 5-1-14-4 without recording
of this Resolution or any other instrument; provided, however, that if the Commission shall pay or
cause to be paid, or there shall otherwise be paid or made provision for payment of debt service on
the Notes due,or to become due thereon,at the times and in the manner mentioned in the Notes, and
shall pay or cause to be paid or there shall otherwise be paid or made provision for payment to the
owners of the outstanding Notes of all sums of money due or to become due according to the
provisions hereof, then this Resolution and the rights hereby granted shall cease, terminate and be
void; otherwise this Resolution shall be and remain in full force and effect.
(C) This Resolution further witnesseth, and it is expressly declared, that all Notes and
Bonds issued and secured hereunder are to be issued, authenticated and delivered, and all these
properties, rights and interests, including, without limitation, the amounts hereby pledged, are to be
dealt with and disposed of, under, upon and subject to the terms, conditions, stipulations, covenants,
agreements, trusts, uses and purposes hereinafter expressed, and the Commission has agreed and
covenanted, and does hereby agree and covenant, with the respective Owners, from time to time, of
the Notes and the Bonds, or any part thereof, as provided in this Resolution.
D-6
SECTION 3. THE NOTES AND THE 1998 BONDS.
(A) (1) The Commission, acting in the name of the City,may issue the Notes
for the purpose of procuring interim financing to apply to the Costs of the Projects. The
Commission shall issue the Notes in an aggregate amount not to exceed Two Million Six
Hundred Fifty-five Thousand Dollars($2,655,000)to be designated"Redevelopment District
Bond Anticipation Notes of 199 " (to be completed with the year in which the Notes are
issued). The Notes shall be dated as of the date of delivery and shall bear interest at a rate
or rates not to exceed seven percent(7%)per annum payable at maturity or upon redemption
prior to maturity. The Notes shall be sold at no less than the par value thereof. The term of
the Notes, including any renewals or extensions,may not exceed five(5)years from the date
of the original issuance of the Notes. The Notes are subject to prepayment in whole or in
part at the option of the Commission on any date after the date that is one hundred twenty
(120) days after the issue date of the Notes upon 7 days' written notice to the registered
owners of the Notes at their face value plus interest accrued to the redemption date. The
Notes shall be issued in fully registered form and shall be lettered and numbered separately
from 1 consecutively upward and with such further or alternate designation as the Registrar
may determine and shall be issued in minimum denominations of$5,000 and in integral
multiples of$5,000 thereafter. The principal of and interest on the Notes are payable solely
from the proceeds of the 1998 Bonds, and the Commission, acting in the name of the City,
shall have no obligation to repay the principal of or interest on the Notes except from
proceeds of the 1998 Bonds. The Commission may receive payment on the Notes in
installments.
(2) The Commission further finds that all or a portion of the Costs of the Projects
may be paid from proceeds of the Notes and from proceeds of the 1998 Bonds under the Act
and that the Projects will provide special benefits to property owners in the Area and will be
of public use and benefit. The Commission further finds that in order to proceed with the
planning,replanning, development and redevelopment of the Area and the repayment of the
Notes, it is necessary for the Commission to borrow funds by issuing special taxing district
bonds of the District, in the name of the City, payable out of Tax Increment, allocated and
deposited as provided in this Resolution and from Taxpayer Payments in the aggregate
principal amount not to exceed Two Million Six Hundred Fifty-five Thousand Dollars
($2,655,000)to procure funds to be applied to the Costs of the Projects.
(3) The 1998 Bonds shall be sold at a purchase price of not less than the par value
thereof minus a discount of$70,000 plus accrued interest. The 1998 Bonds shall be issued
by the Commission in the name of the City,and shall be designated"Redevelopment District
Tax Increment Revenue Bonds of 1998." The President of the Commission and the Mayor
are hereby authorized and directed to negotiate with the Purchaser the terms of the sale of
the 1998 Bonds consistent with this Resolution. The Clerk-Treasurer of the City is hereby
authorized and directed to have prepared and to issue and sell to the Purchaser the 1998
Bonds,payable solely out of the Trust Estate, as set forth herein. The purchase price of the
1998 Bonds,together with investment earnings on the proceeds of the 1998 Bonds, does not
exceed the total as estimated by the Commission of all Costs of the Projects.
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(B) (1) The 1998 Bonds shall be issued in fully registered form and shall be
lettered and numbered "R-1" and shall be issued in a minimum denomination of$100,000
and multiples of five thousand dollars ($5,000)thereafter.
(2) The 1998 Bonds shall be dated as of the first day of the month in which sold
and shall accrue interest from that date at a rate or rates not to exceed seven percent(7%)per
annum. The actual rates to be determined by negotiation with a final maturity not later than
twenty (20) years from the first February 1 after the 1998 Bonds are delivered and with
principal payable annually on February 1 on a schedule that will retire the 1998 Bonds as
quickly as possible based on reasonable projections of available Tax Increment and allowing
for sufficient coverage to market the 1998 Bonds. The 1998 Bonds may be subject to
mandatory sinking fund redemption as determined upon sale of the 1998 Bonds.
(3) Interest on the 1998 Bonds shall be payable on each February 1 and August 1
beginning on August 1, 1998,and shall accrue on a basis of twelve 30-day months for a 360-
day year.
(C) (1) The 1998 Bonds maturing on or after February 1, 2009 are redeemable at the
option of the Commission on any date, on thirty (30) days' notice, in whole or in part, in order of
maturity determined by the Commission and by lot within maturities at face value, together with the
following premiums, plus accrued interest to the date fixed for redemption:
2% if redeemed on October 1, 2007 or thereafter
on or before September 30, 2008;
1% if redeemed on October 1, 2008 or thereafter
on or before September 30, 2009;
0% if redeemed on October 1, 2009 or thereafter
prior to maturity.
(2) The 1998 Bonds maturing after February 1, 2009 are also subject to
redemption as provided in Section 11(D)(4).
(3) Any 1998 Bonds that are subject to mandatory sinking fund redemption shall
be redeemed at a price equal to the principal amount plus accrued interest to the date of
redemption in accordance with the schedule established upon sale of the 1998 Bonds
pursuant to subsection (B)(2).
The Paying Agent shall credit against the mandatory sinking fund requirement for
the 1998 Bonds, and corresponding mandatory redemption obligation, in the order
determined by the City,any 1998 Bonds maturing on the same date and subject to mandatory
sinking fund redemption which have previously been redeemed (other than as a result of a
previous mandatory redemption requirement) or delivered to the Registrar for cancellation
or purchased for cancellation by the Paying Agent and not previously applied as a credit
against any redemption obligation. Each 1998 Bond so delivered or cancelled shall be
credited by the Paying Agent at 100%of its principal amount against the mandatory sinking
fund obligation on such mandatory sinking fund date, any excess of such amount shall be
credited on future redemption obligations, and the principal amount of 1998 Bonds to be
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redeemed by operation of the mandatory sinking fund requirement shall be accordingly
reduced. However, the Paying Agent shall credit the 1998 Bond subject to mandatory
sinking fund redemption only to the extent received by the Paying Agent at least forty-five
(45) days preceding the applicable mandatory redemption date as stated above.
(D) Notice of any redemption identifying the 1998 Bonds to be redeemed in whole or in
part pursuant to subsection(C)shall be given by the Commission to the Trustee at least 45 days prior
to the date final for redemption. Notice of any redemption identifying the 1998 Bonds to be
redeemed in whole or in part shall be given by the Trustee at least 30 days prior to the date fixed for
redemption (unless this notice is waived by the Owner) by sending written notice by certified or
registered mail to the Owner of each 1998 Bond to be redeemed in whole or in part at the address
shown on the registration books of the Registrar. Failure to give such notice by mailing, or any
defect therein with respect to any 1998 Bond, shall not affect the validity of any proceeding for the
redemption of other 1998 Bonds. Such notice shall state the redemption date,the redemption price,
the amount of accrued interest, if any, payable on the redemption date, the place at which 1998
Bonds are to be surrendered for payment and,if less than the entire principal amount of a 1998 Bond
is to be redeemed, the portion thereof to be redeemed. By the date fixed for redemption, due
provision shall be made with the Registrar for the payment of the redemption price of the 1998
Bonds to be redeemed,plus accrued interest,if any,to the date fixed for redemption. When the 1998
Bonds have been called for redemption, in whole or in part, and due provision has been made to
redeem same as herein provided, the 1998 Bonds or portions thereof so redeemed shall no longer
be regarded as outstanding except for the purpose of receiving payment solely from the funds so
provided for redemption, and the rights of the Owners of such 1998 Bonds to collect interest which
would otherwise accrue after the redemption date on any 1998 Bond or portion thereof called for
redemption shall terminate on the date fixed for redemption,provided that funds for their redemption
are on deposit at the place of payment at that time.
(E) If fewer than all of the 1998 Bonds of a maturity are to be redeemed, the Registrar
will select the particular 1998 Bonds to be redeemed by lot in such manner as it deems fair and
appropriate. Each five thousand dollars ($5,000) principal amount shall be considered a separate
bond for purposes of redemption and no redemption shall result in 1998 and remaining outstanding
for any amount less than $100,000. If any of the 1998 Bonds are subject to both optional and
mandatory sinking fund redemption on the same date,the 1998 Bonds to be redeemed by optional
redemption shall be selected first.
(F) (1) The Clerk-Treasurer of the City may serve as the Registrar and the Paying
Agent for the Notes. The Mayor shall appoint a duly qualified bank as Trustee,Registrar and Paying
Agent for the 1998 Bonds, which Trustee, Registrar and Paying Agent will be charged with the
performance of the duties and responsibilities of Trustee, Registrar and Paying Agent as set forth
herein. The Trustee, Registrar and Paying Agent shall signify its acceptance of its duties by
executing the acceptance attached to this Resolution. The Commission is further authorized to pay
such fees as the Trustee, Registrar and Paying Agent may charge for the services provided as
Trustee,Registrar and Paying Agent and such fees may be paid from the Bond Principal and Interest
Account as Debt Service in addition to paying the principal of and interest on the Bonds or from the
General Account.
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(2) The Clerk-Treasurer is hereby authorized and directed, on behalf of the
Commission, to enter into such agreements or understandings with the Trustee,Registrar and
Paying Agent as will enable it to perform the services required of it.
(G) (1) The Notes and the 1998 Bonds shall be authenticated with the manual or
facsimile signature of an authorized representative of the Registrar. No Note or 1998 Bond shall be
valid or become obligatory for any purpose until the Certificate of Authentication on such Note or
1998 Bond, respectively, shall have been so executed. Subject to the provisions hereof for
registration,the Notes and the 1998 Bonds shall be negotiable under the laws of the State of Indiana.
(2) Each Note or 1998 Bond shall be transferable or exchangeable only upon the
books of the Commission kept for that purpose at the office of the Registrar by the owner
thereof in person, or by its attorney duly authorized in writing, upon surrender of such Note
or 1998 Bond together with a written instrument of transfer or exchange satisfactory to the
Registrar duly executed by the owners or its attorney duly authorized in writing, and
thereupon a new fully registered Note,Notes, 1998 Bond or 1998 Bonds,as the case may be,
in the same principal amount and of the same maturity, shall be executed and delivered in
the name of the transferee or transferees or the owners, as the case may be, in exchange
therefor. The Registrar shall not be obligated to make any exchange or transfer of 1998.
Bonds following the fifteenth day immediately preceding an interest payment date on any
1998 Bonds until such interest payment date. The Registrar shall not be obligated (a) to
register, transfer or exchange any 1998 Bond during a period of fifteen (15) days next
preceding mailing of a notice of redemption of the 1998 Bonds, or(b)to register,transfer or
exchange the Note or 1998 Bond selected, called or being called for redemption in whole or
in part after mailing notice of such call. The City and the Registrar for the Notes and 1998
Bonds may treat and consider the person in whose name such Note or 1998 Bond is
registered as the absolute owner thereof for all purposes including for the purpose of
receiving payment of, or on account of, the principal thereof. The Notes and 1998 Bonds
may be transferred or exchanged without cost to the owners except for any tax or
governmental charge required to be paid with respect to the transfer or exchange,which taxes
or governmental charges are payable by the person requesting such transfer or exchange.
(3) If any Note or 1998 Bond is mutilated, lost, stolen or destroyed,the City may
execute and the Registrar may authenticate a new Note or 1998 Bond, respectively, which
in all respects shall be identical to the Note or 1998 Bond which was mutilated, lost, stolen
or destroyed including like date, maturity, series and denomination, except that such new
Note or 1998 Bond,respectively, shall be marked in a manner to distinguish it from the Note
or 1998 Bond for which it was issued; provided that in the case of any Note or 1998 Bond,
as the case may be, being mutilated, such mutilated Note or 1998 Bond shall first be
surrendered to the City and the Registrar; and in the case of 1998 Bonds being lost, stolen
or destroyed,there shall be first furnished to the City and the Registrar evidence of such loss,
theft or destruction satisfactory to the City and the Registrar, together with indemnity
satisfactory to them. If any such lost, stolen or destroyed Note or 1998 Bond shall have
matured and be payable in accordance with its terms, instead of issuing a duplicate Note or
1998 Bond, respectively, the City and the Registrar may, upon receiving indemnity
satisfactory to them,pay the same without surrender thereof. The City and the Registrar may
charge the owner of the Note or owner of the 1998 Bond, as the case may be, with their
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reasonable fees and expenses in connection with the above. Every substitute Note or 1998
Bond issued by reason of the Note or 1998 Bond being lost, stolen or destroyed shall, with
respect to such Note or 1998 Bond, constitute a substitute contractual obligation of the City,
whether or not the lost, stolen or destroyed Note or 1998 Bond shall be found at any time,
and every such Note or 1998 Bond shall be entitled to all the benefits of this Resolution,
equally and proportionately with any and all other Notes or 1998 Bonds, respectively, duly
issued hereunder.
(H) The principal of and interest on the Notes and the principal of the 1998 Bonds shall
be payable in lawful money of the United States of America upon presentation at the office of the
Paying Agent. Interest on the 1998 Bonds shall be paid by check mailed to each owner at the
address as it appears on the registration books kept by the Registrar as of the fifteenth day
immediately preceding the interest payment date or at such other address as provided to the Registrar
in writing by such owner. If payment of principal or interest is made to a depository, payment shall
be made by wire transfer on the payment date in same-day funds. If the payment date occurs on a
date when financial institutions are not open for business,the wire transfer shall be made on the next
succeeding business day. The Trustee shall be instructed to wire transfer payments by 1:00 p.m.
(New York City time) so that such payments are received at the depository by 2:30 p.m. (New York
City time).
(I) The Commission has determined that it may be beneficial to the Commission to have
the 1998 Bonds held by a central depository system pursuant to an agreement between the
Commission and The Depository Trust Company, New York, New York ("Depository Trust
Company") and have transfers of the 1998 Bonds effected by book-entry on the books of the central
depository system("Book Entry System"). The 1998 Bonds may be initially issued in the form of
a separate single authenticated fully registered 1998 Bond for the aggregate principal amount of each
separate maturity of the 1998 Bonds. In such case,upon initial issuance,the ownership of such 1998
Bonds shall be registered in the register kept by the Registrar in the name of CEDE & CO., as
nominee of the Depository Trust Company.
With respect to the 1998 Bonds registered in the register kept by the Registrar in the name
of CEDE & CO., as nominee of the Depository Trust Company, the Commission and the Paying
Agent shall have no responsibility or obligation to any other holders or owners (including any
beneficial owner ("Beneficial Owner")) of the 1998 Bonds with respect to (i) the accuracy of the
records of the Depository Trust Company, CEDE & CO., or any Beneficial Owner with respect to
ownership questions, (ii) the delivery to any bondholder (including any Beneficial Owner) or any
other person,other than the Depository Trust Company,of any notice with respect to the 1998 Bonds
including any notice of redemption,or(iii)the payment to any bondholder(including any Beneficial
Owner) or any other person, other than the Depository Trust Company, of any amount with respect
to the principal of,or premium, if any, or interest on the 1998 Bonds except as otherwise provided
herein.
No person other than the Depository Trust Company shall receive an authenticated 1998
Bond evidencing an obligation of the Commission to make payments of the principal of and
premium, if any, and interest on the 1998 Bonds pursuant to this Resolution. The Commission and
the Registrar and Paying Agent may treat as and deem the Depository Trust Company or CEDE &
CO. to be the absolute bondholder of each of the 1998 Bonds for the purpose of(i)payment of the
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principal of and premium, if any, and interest on such 1998 Bonds; (ii)giving notices of redemption
and other notices permitted to be given to bondholders with respect to such 1998 Bonds; (iii)
registering transfers with respect to such 1998 Bonds; (iv) obtaining any consent or other action
required or permitted to be taken of or by bondholders; (v) voting; and (vi) for all other purposes
whatsoever. The Paying Agent shall pay all principal of and premium, if any, and interest on the
1998 Bonds only to or upon the order of the Depository Trust Company, and all such payments shall
be valid and effective fully to satisfy and discharge the Commission's and the Paying Agent's
obligations with respect to principal of and premium, if any, and interest on the 1998 Bonds to the
extent of the sum or sums so paid. Upon delivery by the Depository Trust Company to the
Commission of written notice to the effect that the Depository Trust Company has determined to
substitute a new nominee in place of CEDE& CO., and subject to the provisions herein with respect
to consents, the words "CEDE & CO." in this Resolution shall refer to such new nominee of the
Depository Trust Company. Notwithstanding any other provision hereof to the contrary, so long as
any 1998 Bond is registered in the name of CEDE & CO., as nominee of the Depository Trust
Company, all payments with respect to the principal of and premium, if any, and interest on such
1998 Bonds and all notices with respect to such 1998 Bonds shall be made and given, respectively,
to the Depository Trust Company as provided in a representation letter from the Commission to the
Depository Trust Company.
Upon receipt by the Commission of written notice from the Depository Trust Company to
the effect that the Depository Trust Company is unable or unwilling to discharge its responsibilities
and no substitute depository willing to undertake the functions of the Depository Trust Company
hereunder can be found which is willing and able to undertake such functions upon reasonable and
customary terms,then the 1998 Bonds shall no longer be restricted to being registered in the register
of the Commission kept by the Registrar in the name of CEDE&CO.,as nominee of the Depository
Trust Company, but may be registered in whatever name or names the bondholders transferring or
exchanging the 1998 Bonds shall designate, in accordance with the provisions of this Resolution.
If the Commission determines that it is in the best interest of the bondholders that they be
able to obtain certificates for the fully registered 1998 Bonds, the Commission may notify the
Depository Trust Company and the Registrar,whereupon the Depository Trust Company will notify
the Beneficial Owners of the availability through the Depository Trust Company of certificates for
the 1998 Bonds. In such event, the Registrar shall prepare, authenticate, transfer and exchange
certificates for the 1998 Bonds as requested by the Depository Trust Company and any Beneficial
Owners in appropriate amounts, and whenever the Depository Trust Company requests the
Commission and the Registrar to do so, the Registrar and the Commission will cooperate with the
Depository Trust Company by taking appropriate action after reasonable notice (i)to make available
one or more separate certificates evidencing the fully registered 1998 Bonds of any Beneficial
Owner's Depository Trust Company account or (ii) to arrange for another securities depository to
maintain custody of certificates for and evidencing the 1998 Bonds.
If the 1998 Bonds shall no longer be restricted to being registered in the name of the
Depository Trust Company,the Registrar shall cause said 1998 Bonds to be printed in blank in such
number as the Registrar shall determine to be necessary or customary; provided, however, that the
Registrar shall not be required to have such 1998 Bonds printed until it shall have received from the
Commission indemnification for all costs and expenses associated with such printing.
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In connection with any notice or other communication to be provided to bondholders by the
Commission or the Registrar with respect to any consent or other action to be taken by bondholders,
the Commission or the Registrar, as the case may be, shall establish a record date for such consent
or other action and give the Depository Trust Company notice of such record date not less than
fifteen (15) calendar days in advance of such record date to the extent possible.
So long as said 1998 Bonds are registered in the name of the Depository Trust Company or
CEDE& CO. or any substitute nominee,the Commission and the Registrar and Paying Agent shall
be entitled to request and to rely upon a certificate or other written representation from the Beneficial
Owners of the 1998 Bonds or from the Depository Trust Company on behalf of such Beneficial
Owners stating the amount of their respective beneficial ownership interests in the 1998 Bonds and
setting for the consent,advice,direction,demand or vote of the Beneficial Owners as of a record date
selected by the Registrar and the Depository Trust Company, to the same extent as if such consent,
advice, direction, demand or vote were made by the bondholders for purposes of this Resolution and
the Commission and the Registrar and Paying Agent shall for such purposes treat the Beneficial
Owners as the bondholders. Along with any such certificate or representation, the Registrar may
request the Depository Trust Company to deliver, or cause to be delivered,to the Registrar a list of
all Beneficial Owners of the 1998 Bonds,together with the dollar amount of each Beneficial Owner's
interest in the 1998 Bonds and the current addresses of such Beneficial Owners.
(J) THE NOTES DO NOT CONSTITUTE A CORPORATE OBLIGATION OF THE
CITY, BUT CONSTITUTE AN OBLIGATION OF THE DISTRICT AS A SPECIAL TAXING
DISTRICT,PAYABLE SOLELY FROM THE PROCEEDS OF THE 1998 BONDS WHEN, AS,
AND IF ISSUED. THE DISTRICT IS NOT OBLIGATED TO PAY THE PRINCIPAL OF OR
INTEREST ON THE NOTES FROM ANY SOURCE OTHER THAN THE PROCEEDS OF THE
1998 BONDS.
(K) THE 1998 BONDS DO NOT CONSTITUTE A CORPORATE OBLIGATION OF
THE CITY, BUT CONSTITUTE AN OBLIGATION OF THE DISTRICT AS A SPECIAL
TAXING DISTRICT, IN THE NAME OF THE CITY, PAYABLE SOLELY FROM THE TRUST
ESTATE. THE DISTRICT IS NOT OBLIGATED TO PAY THE DEBT SERVICE ON THE 1998
BONDS FROM ANY SOURCE OTHER THAN THE TRUST ESTATE. NEITHER THE FAITH
AND CREDIT NOR THE TAXING POWER OF THE DISTRICT OR THE CITY IS PLEDGED
TO THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON THE 1998 BONDS.
SECTION 4. FORM OF THE NOTES AND 1998 BONDS.
(A) Form of the 1998 Bonds. The form and tenor of the 1998 Bonds shall be substantially
as follows (all blanks to be properly completed prior to the preparation of the 1998 Bonds):
D-13
UNITED STATES OF AMERICA
STATE OF INDIANA
HAMILTON COUNTY
CARMEL REDEVELOPMENT DISTRICT
No. R- $
TAX INCREMENT REVENUE
BONDS OF 1998
INTEREST MATURITY ORIGINAL AUTHENTICATION
RATE DATE DATE DATE CUSIP
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The Carmel Redevelopment Commission(the"Commission"),acting in the name of the City
of Carmel, Indiana (the "City"), for value received, hereby acknowledges itself indebted and
promises to pay, but solely out of the Tax Increment and Taxpayer Payments (each as defined in the
Bond Resolution defined below) and the funds held under the Bond Resolution to the registered
owner (named above) or registered assigns, the Principal Amount set forth above on the Maturity
Date set forth above (unless redeemed earlier as hereinafter provided), and to pay interest thereon
at the rate per annum stated above from the date to which interest has been paid next preceding the
date of authentication of this Bond from the interest payment date immediately preceding the date
of authentication of this Bond unless this Bond is authenticated on or before July 16, 1998, in which
case interest shall be paid from the Original Date, or unless this Bond is authenticated between the
fifteenth day preceding an interest payment date and the interest payment date, in which case interest
shall be paid from such interest payment date. Interest shall be payable on February 1 and August
1 of each year, commencing August 1, 1998. Interest shall be calculated on the basis of twelve 30-
day months for a 360-day year.
The principal of this Bond is payable at the principal office of National City Bank of Indiana
(the "Trustee", "Registrar" or "Paying Agent"), in the City of Indianapolis, Indiana. All payments
of interest on this Bond shall be paid by check mailed one business day prior to the interest payment
date to the registered owner hereof, as of the fifteenth day preceding such payment, at the address
as it appears on the registration books kept by the Registrar or at such other address as is provided
to the Paying Agent in writing by the registered owner. If payment of principal or interest is made
to a depository, payment shall be made by wire transfer on the payment date in same-day funds. If
the payment date occurs on a date when financial institutions are not open for business, the wire
transfer shall be made on the next succeeding business day. The Paying Agent shall be instructed
to wire transfer payments so such payments are received at the depository by 2:30 p.m. (New York
City time). All payments on this Bond shall be made in lawful money of the United States of
America, which on the dates of such payment, shall be legal tender for the payment of public and
private debts.
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The Bonds shall be initially issued in a Book Entry System (as defined in the Bond
Resolution). The provisions of this Bond and of Bond Resolution are subject in all respects to the
provisions of the Letter of Representations between the City and The Depository Trust Company,
or any substitute agreement, effecting such Book Entry System.
THIS BOND DOES NOT CONSTITUTE A CORPORATE OBLIGATION OF THE CITY
OF CARMEL,BUT CONSTITUTES AN OBLIGATION OF THE CARMEL REDEVELOPMENT
DISTRICT (THE "DISTRICT") AS A SPECIAL TAXING DISTRICT, IN THE NAME OF THE
CITY, PAYABLE SOLELY FROM THE TRUST ESTATE AS DESCRIBED IN THE BOND
RESOLUTION. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE
DISTRICT OR THE CITY IS PLEDGED TO PAY THE PRINCIPAL OF OR INTEREST ON
THIS BOND.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH
ON THE REVERSE HEREOF WHICH SHALL FOR ALL PURPOSES HAVE THE SAME
EFFECT AS IF DULY SET FORTH ON THE FACE HEREOF.
(Reverse of Bond)
This Bond is one of an authorized issue of bonds of the Redevelopment District of the City
of Carmel with an aggregate principal amount of$2,655,000 designated "Redevelopment District
Tax Increment Revenue Bonds of 1998" ("Bonds"). The Bonds are numbered consecutively from
R-1 upwards and are issued pursuant to the Bond Resolution adopted by the Carmel Redevelopment
Commission (the "Commission") on February 2, 1998 (the "Bond Resolution") and in strict
compliance with IC 5-1-5,IC 5-1-14-4,IC 36-7-14,IC 36-7-25 and all related and supplemental acts
as in effect on the issue date of the Bonds (collectively the "Act"), to procure funds to be applied to
the Costs of the Projects (as defined in the Bond Resolution), including issuance expenses of the
Bonds, capitalized interest on the Bonds, and funding a debt reserve for the Bonds. The Projects
consist of the construction of certain road and drainage improvements and traffic signals in or
serving the Merchants Square Economic Development Area, an economic development area under
the Act.
The Bonds are all equally and ratably secured by and entitled to the protection of the Bond
Resolution. Additional bonds and Parity Obligations (as defined in the Bond Resolution) may be
issued as described in the Bond Resolution. To secure payment of the Debt Service (as defined in
the Bond Resolution) on the Bonds and performance of all other covenants of the City and the
District under the Bond Resolution, the Commission, acting in the name of the City,pursuant to the
Bond Resolution, has pledged the Trust Estate. Reference is hereby made to the Bond Resolution
for a description of the rights,duties and obligations of the Commission,the District,and the owners
of the Bonds, the terms and conditions upon which the Bonds are issued and the terms and
conditions upon which the Bonds will be paid at or prior to maturity, or will be deemed to be paid
and discharged upon the making of provisions for payment therefor. Copies of the Bond Resolution
are on file at the office of the Commission. THE OWNER OF THIS BOND, BY ACCEPTANCE
OF THIS BOND, HEREBY AGREES TO ALL OF THE TERMS AND PROVISIONS IN THE
BOND RESOLUTION. The Underwriter(as defined in the Bond Resolution) has covenanted and
agreed that during the initial offering of the Bonds, no Bonds will be offered or sold to person who
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are not "accredited investors" as such term is delivered in the Securities Act of 1933, as amended,
and that any sales of Bonds in a secondary market shall be pursuant an investment letter wherein a
purchaser shall represent to the District, the City and any Trustee, Registrar or Paying Agent, as
follows:
(1) It is an accredited investor under the Securities Act of 1933, as amended, and
is familiar with securities such as the Bonds.
(2) It is familiar with the City,the Commission,the District and the Taxpayer(as
defined in the Bond Resolution). It has received such information concerning the City, the
Commission,the District,the Bonds,the Tax Increment and Taxpayer Payments as it deems
to be necessary in connection with investment in the Bonds. It has received, read and
commented upon a copy of this Resolution and the Taxpayer Agreement. Prior to the
purchase of the Bonds, it has been provided with the opportunity to ask questions of and
receive answers from the representatives of the City, the District, the Commission and the
Taxpayer concerning the terms and conditions of the Bonds and the tax status of the Bonds,
legal opinions and enforceability of remedies and the security therefor, and to obtain any
additional information needed in order to verify the accuracy of the information obtained to
the extent that the City, the District, the Commission or the Taxpayer possesses such
information or can acquire it without unreasonable effort or expense. It is not relying on Ice
Miller Donadio &Ryan or H. J. Umbaugh&Associates, L.L.P. for information concerning
the financialstatus of the Commission or the Taxpayer or the ability of the Commission or
the Taxpayer to honor their respective obligations or other covenants under this Bond
Resolution and the Taxpayer Agreement. It is also not relying on the City, the Commission
or the District for information concerning the financial status of the Taxpayer or the ability
of the Taxpayer to honor its obligations under the Taxpayer Agreement.
(3) It is acquiring the Bonds for its own account with no present intent to resell,
and that it will not sell, convey, pledge or otherwise transfer the Bonds without compliance
with federal and state securities laws including laws concerning disclosure and registration.
(4) It has investigated the security for the Bonds,including the availability of Tax
Increment and Taxpayer Payments to its satisfaction, and it understands that the Bonds are
payable solely from Tax Increment and Taxpayer Payments and funds held under this Bond
Resolution and that neither the City, the District nor the Commission has the authority to
levy a tax to pay the principal of or interest on the Bonds.
The Bonds maturing on or after February 1, 2009, are redeemable at the option of the
Commission on any date not earlier than October 1, 2007, in whole or in part, in order of maturity
determined by the Commission and by lot within maturities at face value, plus accrued interest to
the date fixed for redemption plus the following premiums:
2% if redeemed on October 1, 2007 or thereafter
on or before September 30, 2008;
1% if redeemed on October 1, 2008 or thereafter
on or before September 30, 2009;
0% if redeemed on October 1, 2009 or thereafter
prior to maturity.
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The Bonds maturing after February 1, 2009 are also subject to redemption on February 1,
2009 from amounts in the Supplemental Reserve Subaccount and the Taxpayer Payment Reserve
Subaccount (both as defined in the Bond Resolution) in excess the Supplemental Reserve
Requirement(as defined in the Bond Resolution) at face value plus accrued interest.
[The Bonds maturing on February 1, _are subject to mandatory sinking fund redemption
prior to maturity, at a redemption price equal to the principal amount thereof plus accrued interest,
on February 1 in the years and amounts set forth below:
Year Amount
*
* Final Maturity]
Each Five Thousand Dollars($5,000)principal amount shall be considered a separate Bond
for purposes of optional and mandatory redemption provided that no redemption shall result in any
Bond remaining outstanding for any amount less than $100,000. If less than an entire maturity is
called for redemption,the bonds to be redeemed shall be selected by lot by the Registrar. If some
Bonds are to be redeemed by optional redemption and mandatory sinking fund redemption on the
same date, the Registrar shall select by lot the bonds for optional redemption before selecting the
Bonds by lot for the mandatory sinking fund redemption.
Notice of any redemption shall be given by the Registrar at least 30 days prior to the date
fixed for redemption(unless notice is waived by the owners of the Bonds) as provided in the Bond
Resolution.
The Commission may,without the consent of,or notice to,the registered owner of this Bond,
adopt a supplemental resolution to the Bond Resolution for certain purposes as described in the Bond
Resolution.
The owners of not less than fifty-one percent (51%) in aggregate principal amount of the
Bonds then outstanding shall have the right, from time to time, anything contained in the Bond
Resolution to the contrary notwithstanding, to consent to and approve the adoption by the
Commission of such supplemental resolutions as shall be deemed necessary and desirable by the
Commission for the purpose of modifying, altering, amending, adding to or rescinding, in any
particular, any of the terms or provisions contained in the Bond Resolution or in any supplemental
resolution other than those provisions covered by the paragraph above.
This Bond is transferable or exchangeable only upon the books of the Commission kept for
that purpose at the office of the Registrar by the Registered Owners, as provided in the Bond
Resolution.
This Bond shall be issued in fully registered form in the minimum denomination of one
hundred thousand dollars ($100,000) or in any integral multiples of$5,000 thereafter.
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If this Bond shall have become due and payable in accordance with its terms or shall have
been duly called for redemption or irrevocable instructions to call this Bond or a portion thereof for
redemption shall have been given, and the whole amount of the principal of and interest so due and
payable on this Bond or portion thereof then outstanding shall be paid or(i) sufficient moneys, or
(ii) noncallable, direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America, the principal of and the interest on
which when due will provide sufficient moneys for such purpose, or(iii) obligations of any state of
the United States of America or any political subdivision thereof, the full payment of principal of
and interest on which(a)are unconditionally guaranteed or insured by the United States of America,
or (b) are provided for by an irrevocable deposit of securities described in clause (ii) and are not
subject to call or redemption by the issuer thereof prior to maturity or for which irrevocable
instructions to redeem have been given, shall be held in trust for such purpose, and provision shall
also have been made for paying all fees and expenses in connection with the redemption, then and
in that case this Bond shall no longer be deemed outstanding or an indebtedness of the District.
It is hereby certified,recited and declared that all acts, conditions and things required to be
done precedent to and in the execution, issuance, sale and delivery of this Bond have been properly
done, happened and performed in regular and due form as prescribed by law, and that the total
indebtedness of the District, including the Bonds, does not exceed any constitutional or statutory
limitation of indebtedness.
This Bond shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been duly executed by the authorized representative of the
Registrar.
(front of bond)
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IN WITNESS WHEREOF, the Carmel Redevelopment Commission has caused this Bond
to be executed by the manual or facsimile signature of the Mayor of the City, in the name of the City
of Carmel for and on behalf of the Redevelopment District of the City, and attested by the manual
or facsimile signature of the Clerk-Treasurer of the City, who has caused the seal of the City of
Carmel to be impressed or a facsimile thereof to be printed hereon.
CITY OF CARMEL, INDIANA
By:
Mayor
(SEAL)
Attest:
Clerk-Treasurer
REGISTRAR'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within mentioned Bond Resolution.
, as Registrar
Authorized Representative
4
The following abbreviations, when used in the inscription on the face of the within bond,
shall be construed as though they were written out in full according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with
right of survivorship and
not as tenants in common
UNIF TRANS MIN ACT - Custodian
(Cust) (Minor)
under Uniform Transfers to Minors
Act
(State)
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Additional abbreviations may also be used though not in list above.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
(insert name, address and federal tax identification number)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
, attorney to transfer the within Bond on the books kept for the registration
thereof with full power of substitution in the premises.
NOTICE: Signature(s)must be guaranteed by NOTICE: The signature to this assignment
an eligible guarantor institution participating must correspond with the name as it appears
in a Securities Transfer Association on the face of the within Bond in every
recognized signature guarantee program. particular, without alteration or enlargement
or any change whatsoever.
(End of Bond Form)
(B) Form of Notes. The form of the Notes shall be set forth in the Note Purchase
Agreement.
(C) Form of Parity Obligations. The form of any Parity Obligations shall be set forth in
the resolution approving the issuance of such Parity Obligations.
SECTION 5. SALE OF THE NOTES AND THE 1998 BONDS.
(A) The Clerk-Treasurer is hereby authorized and directed to sell each series of the Notes
to the Note Purchaser at a negotiated sale upon receipt of the purchase price and immediately
available funds.
Prior to the delivery of the Notes,the Clerk-Treasurer shall obtain a legal opinion addressed
to the Commission as to the validity of the Notes from Ice Miller Donadio & Ryan of Indianapolis,
Indiana, bond counsel, and shall furnish such opinion to the Note Purchaser. The cost of such
opinion shall be considered as a part of the cost incidental to these proceedings and shall be paid out
of the proceeds of the Notes.
All proceeds of the Notes shall be deposited in the Capital Fund and applied to the Costs of
the Projects.
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(B) After completion of all the necessary legal requirements for the marketing of the 1998
Bonds,the Clerk-Treasurer is hereby authorized and directed to sell the 1998 Bonds to the Purchaser
at a negotiated sale, upon receipt of the purchase price, including interest accrued to the date of
delivery, in immediately available funds, pursuant to the terms of the Purchase Agreement. The
1998 Bonds shall be sold to the Purchaser at a price of not less than par with a discount not to exceed
$70,000.
Prior to the delivery of the 1998 Bonds, the Clerk-Treasurer shall obtain a legal opinion
addressed to the Commission as to the validity of the 1998 Bonds from Ice Miller Donadio & Ryan
of Indianapolis, Indiana,bond counsel, and shall furnish such opinion to the Purchaser. The cost of
such opinion shall be considered as part of the costs incidental to these proceedings and shall be paid
out of proceeds of the 1998 Bonds.
Accrued interest and capitalized interest received from the sale of the 1998 Bonds shall be
deposited in the Bond Principal and Interest Account. An amount not to exceed the Debt Service
Reserve Requirement shall be deposited in the Debt Service Reserve Account. The remaining
proceeds of the 1998 Bonds shall be deposited in the Capital Fund. If the Notes are issued,upon sale
of the 1998 Bonds,the Paying Agent is directed to notify the owners of the Notes of the redemption
of the Notes in accordance with Section 3(A)(1).
SECTION 6. DELIVERY OF INSTRUMENTS. The Commission hereby authorizes and
directs the Mayor,the Clerk-Treasurer and the President or Vice President of the Commission, and
each of them,for and on behalf of the City,the Commission and the District,to prepare,execute and
deliver any and all instruments, letters, certificates, agreements and documents as the executing
official, the City Attorney or Ice Miller Donadio & Ryan determines is necessary or appropriate to
consummate the transactions contemplated by this Resolution, including the Note Purchase
Agreement,the Purchase Agreement and the Taxpayer Agreement and such determination shall be
conclusively evidenced by the execution thereof. The instruments, letters, certificates, agreements
and documents, including the Notes and the Bonds, necessary or appropriate to consummate the
transactions contemplated by this Resolution shall, upon execution, as contemplated herein,
constitute the valid and binding obligations or representations and warranties of the Commission,
acting in the name of the City, the full performance and satisfaction of which by the Commission
are hereby authorized and directed.
SECTION 7. PURCHASE AGREEMENT, NOTE PURCHASE AGREEMENT AND
TAXPAYER AGREEMENT.
(A) The Commission hereby approves the form of Purchase Agreement substantially in
the form presented at the meeting at which this Resolution is adopted,by which the 1998 Bonds are
to be sold to the Purchaser. The President or Vice President of the Commission and the Mayor are
hereby authorized and directed to execute, and the Secretary of the Commission and the Clerk-
Treasurer of the City are hereby authorized and directed to attest and affix the seal of the City to,the
Purchase Agreement,with such changes and revisions thereto as they deem necessary or appropriate
to consummate the transactions contemplated thereby. Such execution and attestation shall be
conclusive evidence of their approval of such changes and revisions. The Purchase Agreement in
the form executed shall constitute the valid and binding obligation of the Commission, acting in the
name of the City, the full performance and satisfaction of which by the Commission is hereby
authorized and directed.
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(B) The Commission hereby approves the Note Purchase Agreement substantially in the
form presented at the meeting at which this Resolution is adopted,by which the Notes are to be sold
to the Note Purchaser. The President or Vice President of the Commission and the Mayor are hereby
authorized and directed to execute, and the Secretary of the Commission and the Clerk-Treasurer of
the City are hereby authorized and directed to attest and affix the seal of the City to, the Note
Purchase Agreement,with such changes and revisions thereto as they deem necessary or appropriate
to consummate the transactions contemplated thereby. Such execution and attestationshall be
conclusive evidence of their approval of such changes and revisions. Each Note Purchase
Agreement in the form executed shall constitute the valid and binding obligation of the Commission,
acting in the name of the City, the full performance and satisfaction of which by the Commission
is hereby authorized and directed.
(C) The Commission,as authorized by the Act,hereby approves the Taxpayer Agreement
by which the Taxpayer agrees to pay the Trustee,the Taxpayer Payments to secure the 1998 Bonds,
substantially in the form presented to the meeting at which this Resolution was adopted. The
President or Vice President of the Commission is authorized and directed to execute, and the
Secretary of the Commission is hereby authorized and directed to attest the Taxpayer Agreement
with such changes and revisions thereto as they deem necessary or appropriate, upon advice of
counsel, to consummate the transactions contemplated thereby and such execution and attestation
shall be conclusive evidence of their approval of such changes and revisions. The Taxpayer
Agreement in the form executed shall constitute the valid and binding obligation of the Commission,
acting in the name of the City, the full performance and satisfaction of which by the Commission
is hereby authorized and directed.
SECTION 8. OFFERING MEMORANDUM AND CONTINUING DISCLOSURE.
(A) The distribution of an offering memorandum prepared for and on behalf of the
Commission, is hereby authorized and approved and the President of the Commission or the Mayor
is authorized and directed to execute the final Offering Memorandum on behalf of the Commission
in a form consistent with this Resolution and the Purchase Agreement. If necessary, the President
of the Commission or the Mayor is hereby authorized to designate the placement memorandum as
"nearly final" for purposes of Rule 15c2-12, as amended and as adopted by the Securities and
Exchange Commission ("Rule 15c2-12").
(B) If the Notes or 1998 Bonds are subject to Rule 15c2-12,then with respect to the Notes
or 1998 Bonds, respectively, the President or Vice President of the Commission or the Mayor are
hereby authorized to execute and deliver a continuing disclosure undertaking agreement upon
delivery of the Notes or the 1998 Bonds,respectively ("Continuing Disclosure Agreement"). If the
1998 Bonds are subject to Rule 15c2-12,the President or Vice-President of the Commission or the
Mayor are hereby authorized and directed to obtain a continuing disclosure undertaking agreement
from the Taxpayer. Notwithstanding any other provisions of this Resolution, failure of the City to
comply with the Continuing Disclosure Agreement shall not be considered an event of default
hereunder.
D-22
SECTION 9. EXECUTION OF THE NOTES AND THE 1998 BONDS. The Mayor is
hereby authorized and directed to execute the Notes (if issued) and the 1998 Bonds with his manual
or facsimile signature and the Clerk-Treasurer is hereby directed to have the Notes and the 1998
Bonds prepared, attest the Notes and the 1998 Bonds with her manual or facsimile signature, and
cause the seal of the City to be impressed or a facsimile thereof to be printed on the Notes and the
1998 Bonds, all in the form and manner herein provided. If any officers whose signature or
facsimile signature shall appear on the Notes or the Bonds shall cease to be such officer before the
delivery of the Notes and the Bonds such signature shall nevertheless be used and sufficient for all
purposes the same as if such officer had remained in office until the date of delivery of the Notes or
the Bonds even though such officer may not have been so authorized or have held such office. Upon
the consummation of the sale of the Notes (if issued), the Clerk-Treasurer shall receive from the
Note Purchaser the amount to be paid for the Notes and deliver the Notes to the Note Purchaser.
Upon consummation of the sale of the 1998 Bonds,the Trustee shall receive from the Purchaser the
amount to be paid for the 1998 Bonds and deliver the 1998 Bonds to the Purchaser.
SECTION 10. REDEVELOPMENT DISTRICT CAPITAL FUND.
(A) The Redevelopment District Capital Fund is established pursuant to IC 36-7-14-26.
Proceeds of the Notes and the 1998 Bonds deposited in the Capital Fund shall be deposited in a
separate account of the Commission,acting in the name of the City,and kept separate and apart from
all other funds of the City,the Commission and the District and may be invested only in Qualified
Investments as permitted by law. The Trustee shall administer the moneys in the Capital Fund in
accordance with this Resolution. The proceeds in the Capital Fund and investment earnings on
amounts in the Capital Fund shall be expended only to pay the Costs of the Projects and Debt
Service on the 1998 Bonds. Upon issuance of the 1998 Bonds, the Notes, if issued, shall be called
for redemption as provided in Section 3 and proceeds of the 1998 Bonds in the Capital Fund shall
be immediately set aside and used for the repayment of the principal of and interest on the Notes.
The remaining proceeds of the Notes and the 1998 Bonds shall be applied to pay remaining Costs
of the Projects.
(B) Before the eleventh day of each calendar month, the Trustee shall notify the
Commission of the amount in the Capital Fund at the close of business on the last day of the
preceding month.
(C) The Trustee shall disburse from the Capital Fund the amount required for the payment
of the remaining Costs of the Projects upon the receipt of duly authorized claims filed in accordance
with Indiana law and approved by the Commission.
(D) If,after payment of all claims tendered under the provisions of this Section,any funds
shall remain in the Capital Fund, the Trustee shall transfer all moneys then in the Capital Fund
(except moneys reserved to pay any disputed or unpaid claims), as directed by the Commission, to
the Bond Principal and Interest Account to pay principal and interest on the Notes, Debt Service on
the 1998 Bonds or,as directed by the Commission,for the same purpose or type of project for which
the 1998 Bonds were issued, in accordance with IC 5-1-13, as amended from time to time.
D-23
SECTION 11. FLOW OF FUNDS.
(A) Creation of Funds and Accounts.
(1) There is hereby created in the Allocation Fund the following accounts: (i) a
Bond Principal and Interest Account(consisting of a Capitalized Interest Subaccount, a Tax
Increment Subaccount and a Taxpayer Payment Subaccount); (ii) a Debt Service Reserve
Account; and(iii) a General Account (consisting of a Supplemental Reserve Subaccount, a
Taxpayer Payment Reserve Subaccount and an Improvement Subaccount). The Allocation
Fund and the accounts created thereunder shall be held by the Trustee. All Tax Increment
shall immediately upon receipt by the City,be deposited with the Trustee and set aside in the
following accounts, in the following order of priority:
(a) Bond Principal and Interest Account;
(b) Debt Service Reserve Account; and
(c) General Account.
Tax Increment shall be held in trust and pledged for the benefit of the Owners of the Bonds
shall be applied, used and withdrawn only for the purposes authorized in this Section 11.
(2) All Taxpayer Payments shall immediately upon receipt by the Trustee be
deposited in the following accounts in the following order of priority:
(a) Taxpayer Payment Subaccount;
(b) Debt Service Reserve Account; and
(c) Taxpayer Payment Reserve Subaccount.
Taxpayer Payments shall be held in trust and pledged for the benefit of the Owners of the
1998 Bonds and shall be applied, used and withdrawn only for the purposes authorized in
this Section 11.
(3) The Tax Increment,Taxpayer Payments and amounts in the Allocation Fund
shall be invested in Qualified Investments at the direction of the Clerk-Treasurer. Interest
earned in each fund or account shall be credited to such fund or account. Funds in the
Supplemental Reserve Subaccount and the Taxpayer Payment Reserve Subaccount shall be
invested in Qualified Investments at a yield not in excess of the yield on the 1998 Bonds.
(B) Bond Principal and Interest Account.
(1) Capitalized Interest Subaccount. Proceeds of the 1998 Bonds deposited in
the Capitalized Interest Subaccount of the Bond Principal and Interest Account, and
investment earnings on such proceeds, shall be used only to pay interest on the 1998 Bonds
beginning on the August 1, 1998 and on each August 1 and February 1 thereafter until the
D-24
Capitalized Interest Subaccount is depleted. Interest on the 1998 Bonds shall be paid first
from amounts in the Capitalized Interest Subaccount, before using funds on deposit in the
Tax Increment Subaccount, the Taxpayer Payment Subaccount, the Debt Service Reserve
Account or the General Account.
(2) Tax Increment Subaccount. There shall immediately be set aside from the
Allocation Fund and deposited into the Tax Increment Subaccount of the Bond Principal and
Interest Account, upon receipt of Tax Increment by the City, an amount of money which,
after taking into account moneys already in the Capitalized Interest Subaccount, is equal to
the Debt Service on the Bonds due and payable on the immediately succeeding February 1
and August 1 until the amount on deposit in the Bond Principal and Interest Account is
sufficient to pay Debt Service payable through the next February 1. If Tax Increment is not
sufficient to pay Debt Service payable through the next February 1, Taxpayer Payments in
an amount sufficient to make up the shortfall allocable to the 1998 Bonds shall be deposited
in the Taxpayer Payment Subaccount of the Bond Principal and Interest Account as provided
below. No deposit need be made to the Tax Increment Subaccount to the extent that the
available amount in the Bond Principal and Interest Account is at least equal to the amount
of Debt Service becoming due and payable on all outstanding Bonds through the next
February 1. All money in the Tax Increment Subaccount shall be used and withdrawn solely
for the purpose of paying Debt Service as it shall become due and payable(including accrued
interest on any Bonds purchased or redeemed prior to maturity).
(3) Taxpayer Payment Subaccount. If on any January 2 or July 1, the Tax
Increment collected in the Allocation Area on or about the immediately preceding
December 31 or June 30,respectively,is less than the Minimum Tax Increment for that date,
the Trustee is hereby directed to implement the procedures in the Taxpayer Agreement for
collecting the Taxpayer Payments from the Taxpayer to be applied toward the 1998 Bonds.
All Taxpayer Payments so collected shall immediately be deposited in the Taxpayer Payment
Subaccount and shall be used to pay the principal of and interest due on the 1998 Bonds on
the immediately succeeding February 1 or August 1. Taxpayer Payments shall be deposited
in the Taxpayer Payment Subaccount until the balance, together with funds in the Tax
Increment Subaccount, is sufficient to pay Debt Service due on the 1998 Bonds through the
next February 1. Any excess amount shall be transferred to the Debt Service Reserve
Account,if necessary,and then to the Taxpayer Payment Reserve Subaccount of the General
Account.
(C) Debt Service Reserve Account. After making the deposits to the Tax Increment
Subaccount described in(B)(2) and the Taxpayer Payment Subaccount as described in(B)(3), the
Trustee shall deposit Tax Increment and Taxpayer Payments, respectively, in the Debt Service
Reserve Account until the balance equals the Debt Service Reserve Requirement. If the balance in
the Debt Service Reserve Account is ever less than the Debt Service Reserve Requirement, all Tax
Increment and Taxpayer Payments not required for the Bond Principal and Interest Account shall
be deposited in the Debt Service Reserve Account until the balance equals the Debt Service Reserve
Requirement. Moneys deposited and maintained in the Debt Service Reserve Account shall be
applied to the payment of the principal of and interest on the 1998 Bonds to the extent that amounts
in the Bond Principal and Interest Account and the General Account are insufficient to pay Debt
Service when due and payable. If moneys in the Debt Service Reserve Account are transferred to
D-25
the Bond Principal and Interest Account to pay Debt Service on the 1998 Bonds, the depletion of
the balance in the Debt Service Reserve Account shall be made up from any moneys in the General
Account (as provided in (D)) and from the next available Tax Increment and Taxpayer Payments
after the required deposits to the Tax Increment Subaccount and the Taxpayer Payment Subaccount,
respectively, of the Bond Principal and Interest Account are made. Any moneys in the Debt Service
Reserve Account in excess of the Debt Service Reserve Requirement (including investment
earnings) shall be deposited in the Tax Increment Subaccount and applied as set forth in (B)(2) of
this Section.
The Commission,upon the advice of its financial advisor,hereby finds that funding the Debt
Service Reserve Account is reasonably required and that the Debt Service Reserve Requirement is
no larger than necessary to market the 1998 Bonds. The Commission further finds that the Debt
Service Reserve Requirement is directly related to the Projects because the 1998 Bonds could not
be issued to fund the Projects without the Debt Service Reserve Account.
The debt service reserve requirement, if any, for any Parity Obligations shall be set forth in
the resolution authorizing the Parity Obligations.
(D) General Account. (1) After making the deposits described in (A), (B) and (C), the
Trustee shall deposit any remaining Tax Increment in the Supplemental Reserve Subaccount of the
General Account of the Allocation Fund until the balance in this Subaccount, together with the
balance in the Taxpayer Payment Reserve Subaccount, equals the Supplemental Reserve
Requirement. After making the deposit described in the preceding sentence, subject to (D) (4)
below, the Trustee shall deposit any remaining Tax Increment in the Improvement Subaccount to
be applied in the following order of priority:
(a) to pay Debt Service due on the 1998 Bonds;
(b) to fund or replenish the Debt Service Reserve Account or the
Supplemental Reserve Account;
(c) at the option of the Commission, to redeem or purchase the 1998
Bonds prior to maturity; or
(d) to pay debt service due on any subordinate obligations;
(e) at the option of the Commission,to pay,or reimburse the City for,the
costs of acquiring or constructing additional local public improvements in the Area;
(f) for any other purposes permitted by the Act, including distributions
to the taxing units as provided under the Act.
(2) After making the deposits described in (B)(3) and (C), the Trustee shall
deposit any remaining Taxpayer Payments in the Taxpayer Payment Reserve Subaccount of
the General Account until the balance in this Subaccount, together with the balance in the
Supplemental Reserve Subaccount, equals the Supplemental Reserve Requirement„ Upon
D-26
retirement of all of the 1998 Bonds, any balance in the Taxpayer Payment Reserve
Subaccount shall be returned to the Taxpayer.
(3) Monies deposited and maintained in the Supplemental Reserve Subaccount
and the Taxpayer Payment Reserve Subaccount shall be applied on a pro rata basis (based
on their respective subaccount balances) in the following order of priority:
(a) to pay Debt Service on the 1998 Bonds to the extent that amounts in
the Bond Principal and Interest Account and the Improvement Subaccount are
insufficient to pay Debt Service when due and payable; and
(b) to fund or replenish the Debt Service Reserve Account (after the
Improvement Subaccount is depleted).
(4) If the collective balance in the Supplemental Reserve Subaccount and the
Taxpayer Payment Reserve Subaccount exceeds the Supplemental Reserve Requirement,the
Commission shall direct the Trustee to use any excess to redeem a portion of the 1998 Bonds
as provided in Section 3(C) (1)solely from funds in the Supplemental Reserve Subaccount
or to return funds in the Taxpayer Payment Reserve Subaccount to the Taxpayer. On
February 1, 2009 after the Supplemental Reserve Requirement is reduced on January 1,
2009, the Trustee shall without further direction, redeem 1998 Bonds at face value plus
interest accrued to the redemption date in an amount equal to (within authorized
denominations) the excess amount above the reduced Supplemental Reserve Requirement
to the extent that funds for such redemption are available in the Supplemental Reserve
Subaccount.
(5) The Commission,upon the advice of its financial advisor and the Purchaser,
hereby finds that the funding of the Supplemental Reserve Subaccount and the Taxpayer
Payment Reserve Subaccount is no larger than necessary to market the 1998 Bonds. The
Commission further finds that the Supplemental Reserve Requirement is directly related to
the Projects because the 1998 Bonds could not be issued to fund the Projects without the
Supplemental Reserve Requirement.
(E) No Prior Liens. The Commission, acting in the name of the City, represents and
warrants that,there are no prior liens, encumbrances or other restrictions on the Tax Increment,the
Taxpayer Payments or on the City's ability to pledge the Tax Increment or the Taxpayer Payments
for the benefit of the Owners of the 1998 Bonds.
SECTION 12. ISSUANCE OF ADDITIONAL BONDS.
(A) Parity Notes. The Commission reserves the right to authorize and issue Notes on a
parity with the Notes for the purpose of raising money to complete the Projects,to refund the Notes
or for any other purposes permitted by the Act. Except as provided in this Resolution,the terms and
conditions of any parity notes shall be set forth in the resolution authorizing the issuance of such
parity notes.
D-27
(B) Parity Obligations. The Commission reserves the right to authorize and issue Parity
Obligations of the Commission, acting in the name of the City,payable from Tax Increment for the
purpose of raising money for future local public improvements or economic development projects
in the Allocation Area or to refund the Bonds or other Parity Obligations. If any Parity Obligations
are issued pursuant to this Section 12, the term "Bonds" in this Bond Resolution shall, unless the
context otherwise requires, be deemed to refer to the 1998 Bonds and such Parity Obligations. The
authorization and issuance of such Parity Obligations, which shall be payable from Tax Increment,
shall be subject to the following conditions precedent:
(1) All principal and interest payments with respect to all obligations payable
from Tax. Increment shall be current to date in accordance with the terms thereof, with no
payment in arrears.
(2) For Parity Obligations payable from Tax Increment without a special benefits
tax levy under IC 36-7-14-27 or a pledge of local income taxes, the Commission and the
Trustee shall have received a certificate prepared by an independent, qualified accountant or
feasibility consultant(the "Certifier") certifying the amount of the Tax Increment estimated
to be received in each succeeding year,adjusted as provided below, which estimated amount
shall be at:least equal to one hundred fifty percent(150%) of the lease rental and debt service
requirements with respect to the outstanding Bonds and the proposed Parity Obligations, for
each year during the term of the outstanding Bonds. In estimating the Tax Increment to be
received in any future year, the Certifier shall base the calculation on assessed valuation
actually assessed or estimated to be assessed as of the assessment date immediately
preceding the issuance of the Parity Obligations;provided,however,the Certifier shall adjust
such assessed values for the current and future reductions of real property tax abatements
granted to property owners in the Allocation Area. If the Parity Obligations are also payable
from a special benefits tax under IC 36-7-4-27 or an income tax, the test in this paragraph
(2) does not need to be met.
(3) Principal on any Parity Obligations shall be payable annually on February 1,
interest on any Parity Obligations shall be payable semiannually on February 1 and August 1
and lease rentals on Parity Obligations which are leases shall be payable semi-annually in
approximately equal installments on February 1 and August 1.
Except as provided in this Resolution, the terms and conditions of any Parity Obligations
shall be set forth in the resolution authorizing the issuance of such Parity Obligations. The Taxpayer
Payments shall be calculated, as provided in the Taxpayer Agreement, as if the Parity Obligations
had not been issued.
(C) Subordinate Obligations. The Commission,acting in the name of the City,may issue
bonds or other obligations or enter into leases which are junior and subordinate to the Bonds. The
terms and conditions of such subordinate obligations will be set forth in a resolution adopted by the
Commission. Principal of and interest on any subordinate obligations and lease rentals shall be
payable out of Tax Increment as set forth in Section 11 on the dates set forth in Section 12(B)(3).
D-28
SECTION 13. TAX COVENANTS. (A) In order to preserve the exclusion from gross
income of interest on the Notes and the 1998 Bonds under the Code and as an inducement to the
Note Purchaser and the Purchaser,the Commission represents, covenants and agrees that:
(1) The Projects will be available for use by members of the general public. Use
by a member of the general public means use by natural persons not engaged in a trade or
business. No person or entity, other than the Commission,the City or another state or local
governmental unit, will use more than 10% of the proceeds of the Notes or the 1998 Bonds
or property financed by proceeds of the Notes or the 1998 Bonds other than as a member of
the general public. The Projects consist of the construction of certain road and drainage
improvements and traffic signals in or serving the Area and will be available for general
public use. No person or entity,other than the Commission,the City or another state or local
governmental unit,will own property financed by Note or 1998 Bond proceeds or will have
actual or beneficial use of such property pursuant to a lease, a management or incentive
payment contract, an arrangement such as a take-or-pay or output contract or any other type
of arrangement that conveys other special legal entitlements and differentiates that person's
or entity's use of such property from the use by the general public, unless such uses in the
aggregate relate to no more than 10%of the proceeds of the Notes or the 1998 Bonds. If the
City or the Commission enters into a management contract for the Projects, the terms of the
contract will comply with IRS Revenue Procedure 97-13, as it may be amended,
supplemented or superseded for time to time, so that the contract will not give rise to private
business use under the Code and the Regulations,unless such use in aggregate relates to no
more than 10%of the proceeds of the Notes or the 1998 Bonds.
(2) No more than 5%of the Note or 1998 Bond proceeds will be loaned to any
entity or person. No more than 5% of the Note or 1998 Bond proceeds will be transferred,
directly or indirectly, or deemed transferred to any person or entity other than another state
or local governmental unit in any manner that would in substance constitute a loan of the
Note or 1998 Bond proceeds.
(3) No more than 5% of the proceeds of the 1998 Bonds will be attributable to
private business use as described in paragraph (1) attributable to unrelated or
disproportionate private business use. For this purpose, the private business use test is
applied by taking into account only use that is not related to any government use of proceeds
of the issue (Unrelated Use)and use that is related but disproportionate to any governmental
use of those proceeds (Disproportionate Use).
(4) The Commission reasonably expects that the Notes or 1998 Bonds will not
meet either the private business use test described in paragraph (1) or the private loan test
described in paragraph(2) above during the entire term of the Notes and the 1998 Bonds.
(5) The Commission and the City will not take any action or fail to take any
action with respect to the Notes or the 1998 Bonds that would result in the loss of the
exclusion from gross income for federal tax purposes of interest on the Notes or the 1998
Bonds under Section 103 of the Code, nor will it act in any other manner which would
adversely affect such exclusion; and the Commission and the City will not make any
investment or do any other act or thing during the period that Notes or the 1998 Bonds are
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outstanding which would cause any of Notes or the 1998 Bonds, respectively, to be
"arbitrage bonds" within the meaning of Section 148 of the Code. The Commission and the
City covenant and agree not to enter into any contracts or arrangements which would cause
the Notes or the 1998 Bonds to be treated as private activity bonds under Section 141 of the
Code.
(6) Neither the Notes or the 1998 Bonds are private activity bonds as defined in
Section 141 of the Code.
(7) Neither the Notes or the 1998 Bonds are federally guaranteed under Section
149(b) of the Code.
(8) The covenants in this Section 13 are based solely on current law in effect and
in existence on the date of issuance of the Notes or the 1998 Bonds. It shall not be an event
of default under this Resolution if interest on the Notes or the 1998 Bonds is not excludable
from gross income pursuant to any provision of the Code which is not in existence and in
effect on the issue date of such Notes or such 1998 Bonds.
(9) All officers,members,employees and agents of the Commission and the City
are authorized and directed to provide certifications of facts and estimates that are material
to the reasonable expectations of the Commission as of the date the Notes or the 1998 Bonds
are issued, and to enter into covenants evidencing the Commission's commitments made in
this Resolution. In particular, all or any officers of the Commission and the City are
authorized to certify and enter into covenants for the Commission regarding the facts and
circumstances and reasonable expectations of the Commission on the date the Notes or the
1998 Bonds are issued and the commitments made by the Commission regarding the amount
and use of the proceeds of the 1998 Bonds.
(B) Notwithstanding any other provisions of this Resolution, the covenants and
authorizations contained in this Resolution ("Tax Sections") which are designed to preserve the
exclusion of interest on the Notes and the 1998 Bonds from gross income for federal tax purposes
("Tax Exemption")need not be complied with if the Commission receives an opinion of nationally
recognized bond counsel satisfactory to the Commission that any Tax Section is unnecessary to
preserve the Tax. Exemption.
(C) Any Parity Obligations will be subject to the tax covenants set forth in the resolution
authorizing the issuance of such Parity Obligations.
SECTION 14. CONTRACTUAL NATURE OF THIS RESOLUTION.
(A) The provisions of this Resolution shall constitute a contract by and between the
Commission,acting in the name of the City,and the owners of the Notes and the Owners o f the 1998
Bonds. After the issuance of the 1998 Bonds, this Resolution, and the definition of, or the manner
of determining, allocating or collecting the Tax Increment or the lien created by this Resolution,
shall not be repealed, amended or impaired in any respect which will adversely affect the rights of
Owners of the Bonds (except as specifically permitted in Sections 16 and 17), nor shall the
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Commission
such adoptso anylong lawasany, ordiofthenanceBonds or resolution
remains whichunpaid.in.any way adversely affects the rights
Owners
(B) (1) The Commission, acting in the name of the City, covenants not to impair the
pledge of the Tax Increment and Taxpayer Payments to the payment of the 1998 Bonds so long as
any of the 1998 Bonds are outstanding, or to impair any other pledge or covenant under this
Resolution during that period.
(2) The Commission further covenants not to change, alter or diminish the Area
in any way that would adversely affect the Owners of the 1998 Bonds so long as any of the
1998 Bonds remain outstanding or to grant any tax abatements on property in the Allocation
Area on any property used in the projections of Tax Increment prepared at the time of the
issuance of the 1998 Bonds other than tax abatements shown in those projections.
SECTION 15. DEFEASANCE OF THE BONDS.
(A) If, when the Bonds or a portion thereof shall have become due and payable in
accordance with their terms or shall have been duly called for redemption or irrevocable instructions
to call the Bonds or a portion thereof for redemption shall have been given, and the whole amount
of the Debt Service so due and payable upon the Bonds or a portion thereof then outstanding shall
be paid or(i) sufficient moneys, or(ii)noncallable, direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United States of America, the
principal of and the interest on which when due will provide sufficient moneys for such purpose, or
(iii) obligations of any state of the United States of America or any political subdivision thereof, the
full payment of principal of, and interest on which(a)are unconditionally guaranteed or insured by
the United States of America,or(b)are provided for by an irrevocable deposit of securities described
in clause (ii) and are not subject to call or redemption by the issuer thereof prior to maturity or for
which irrevocable instructions to redeem have been given, shall be held in trust for such purpose,
and provision shall also have been made for paying all fees and expenses in connection with the
redemption, then and in that case the Bonds or such portion thereof shall no longer be deemed
outstanding or an indebtedness of the Commission, acting in the name of the City. If no principal
of or interest on the Bonds or any subordinate obligations is outstanding, any remaining funds
(including Tax Increment) shall be used as provided in IC 36-7-14-39 or any successor provision.
(B) No deposit under this Section shall be made or accepted under this Section and no
use made of any such deposit unless the Commission shall have received a verification from an
accountant or firm of accountants appointed by the Clerk-Treasurer and acceptable to the
Commission verifying the sufficiency of the deposit to pay the principal of the Bonds to the due date,
whether such due date be by reason of maturity or upon redemption.
SECTION 16. AMENDING SUPPLEMENTAL RESOLUTION. The Commission may,
without the consent of, or notice to, the owners of the Notes or the Owners of the Bonds, adopt a
supplemental resolution for any one or more of the following purposes:
(A) To cure any ambiguity or formal defect or omission in this Resolution;
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ers of the Ntes or the
wners of the
nds
any
(B) To grant to or confer upon the Owers or aut oi°ties that mOay lawfully be go
ranted to
additional benefits, security,rights,remedies,p
or conferred upon the owners of the Notes or the Owners of the Bonds, respectively;
(C) To modify, amend or supplement this Resolution to permit the qualification of the
Notes or the Bonds for sale under the securities laws of the United States of America or of any of
the states of the United States of America or the qualification of this Resolution under the Trust
Indenture Act of 1939, as amended, or any similar federal statute hereafter in effectif such
modification,amendment or supplement will not have a material adverse effect on the owners of the
Notes or the Owners of the Bonds;
(D) To provide for the refunding or advance refunding of all or a portion of the Notes or
the Bonds;
(E) To amend the Resolution to permit the Commission, acting in the name of the City,
to comply with any future federal tax law or any covenants contained in any supplemental resolution
with respect to compliance with future federal tax law;
(F) To provide for the issuance of parity Notes, Parity Obligations or subordinate
obligations;
(G) To subject to the Bond Resolution additional revenues, security, properties or
collateral; and
he judgment of the
(H) To amend the Resolution for nany other purpose
ssof thench in Notestor the Owners of the
Commission does not adversely affect the interests of theow
Bonds in any material way.
SECTION 17. CONSENT TO SUPPLEMENTAL RESOLUTIONS.
(A) The owners of the Notes or the Owners of not less than fifty-one percent (51%) in
aggregate principal amount of the Bonds then outstanding shall have the right, from time to time,
anything contained in the Resolution to the contrary notwithstanding,to consent to and approve the
adoption by the Commission of such supplemental resolutions as shall be deemed necessary and
desirable by the Commission for the purpose of modifying, altering, amending, adding to or
rescinding, in any particular, any of the terms or provisions contained in this Resolution or in any
supplemental resolution other than those provisions covered by Section 16; provided however,that
nothing in this Section contained shall permit,or be construed as permitting, without the consent of
the Owners of all the then outstanding Bonds affected, (a) an extension of the maturity of the
principal of and interest on any Bonds payable from Tax Increment, or (b) a reduction in the
principal amount of any Bond or change in the rate of interest or (c) a privilege or priority of any
Bond or Bonds over any other Bond or Bonds,or(d) a reduction in the aggregate principal amount
of the Bonds required for consent to such supplemental resolution, or(e) a change in the provisions
regarding the collection, deposit, and allocation of Tax Increment as set forth in IC 36-7-14-39, as
in effect on the date of the issuance of each series of the 1998 Bonds and in the Bond Resolution or
in the lien on the Tax Increment and Taxpayer Payments, or(f)the creation of any lien securing any
Bonds other than a lien ratably securing all of the Bonds at any time outstanding hereunder, or(g)
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a change in the method of accrual of interest on any Bonds, or(h) a reduction in the Debt Service
Reserve Requirement or the Supplemental Reserve Requirement.
(B) If at any time the Commission desires to adopt a supplemental resolution for any of
the purposes permitted in this Section,the Commission shall cause notice of the proposed adoption
of such supplemental resolution to be mailed by registered or certified mail to each owner of the
Notes or Owners of the Bonds at the address shown on the registration books maintained by the
Registrar. Such notice shall briefly set forth the nature of the proposed supplemental resolution and
shall state that copies of it are on file at its office for inspection by all owners of the Notes or the
Owners of the Bonds. If, within 60 days, or such longer period as shall be prescribed by the
4 Commission, following the mailing of such notice, the owners of the Notes and the Owners of not
less than fifty-one percent(51%)in aggregate principal amount of the Bonds outstanding at the time
4 of the execution of any such supplemental resolution shall have consented to and approved the
execution of such supplemental resolution,no note owner or subsequent Owners of the Bonds shall
have any right to object to any of the terms and provisions contained therein, or the operation
thereof, or in any manner to question the propriety of the adoption thereof, or to enjoin or restrain
the Commission from adopting the same or from taking any action pursuant to the provisions
thereof Upon the adoption of any such supplemental resolution as is permitted and provided by this
Section, this Resolution shall be and be deemed to be modified and amended in accordance
therewith.
(C) Any consent,request,direction, approval, objection or other instrument required by
this Resolution to be signed and executed by the owners of the Notes or the Owners of the Bonds,
4 may be in any number or concurrent writings of similar tenor and may be signed or executed by the
owners of the Notes or the Owners of the Bonds, respectively, in person or by agent appointed in
writing. Proof of the execution of any such consent,request,direction, approval, objection or other
instrument or of the writing appointing any such agent and of the ownership of Notes or the Bonds,
if made in the following manner, shall be sufficient for any of the purposes of this Resolution, and
shall be conclusive in favor of the City with regard to any action taken by it or them under such
request or other instrument, namely:
(1) The fact and date of the execution by any person of any such writing may be
proved(a)by the certificate of any officer in any jurisdiction who by law has power to take
acknowledgments within such jurisdiction that the person signing such writing
acknowledged before him the execution thereof,or(b)by an affidavit of any witness to such
execution.
(2) The fact of ownership of the Notes and the Bonds or the amount or amounts,
numbers and other identification of the Notes or the Bonds, and the date of holding the same
shall be proved by the registration books maintained by the Registrar.
SECTION 18. EVENTS OF DEFAULT
(A) If any of the following events occur, it is hereby defined as and declared to be and
to constitute an "Event of Default":
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(1) Default in the due and punctual payment of any interest on any Note or Bond;
or
(2) Default in the due and punctual payment of the principal of any Note or Bond
at its stated maturity or mandatory redemption date.
(B) (1) Upon the occurrence of an Event of Default, the Trustee shall notify the
owners of the Notes or the Owners of all Bonds, as the case may be,then outstanding of such Event
of Default by registered or certified mail, and will have the following rights and remedies:
(a) The Trustee may pursue any available remedy at law or in equity or
by statute to enforce the payment of the principal of and interest on the Notes or the
Bonds then outstanding, including enforcement of the Taxpayer Agreement.
(b) Upon the filing of a suit or other commencement of judicial
proceedings to enforce any rights of the Trustee and of the owners under this
Resolution, the Trustee will be entitled, as a matter of right, to the appointment of a
receiver or receivers of the Trust Estate and of the revenues, issues,earnings,income,
products and profits thereof,pending such proceedings,with such powers as the court
making such appointment shall confer.
(c) If the Trustee certifies that there is sufficient money on deposit in the
funds and accounts under this Resolution to pay Debt Service on all the Notes or the
outstanding Bonds,the Trustee may declare the principal of and accrued interest on
all Notes or Bonds, respectively, to be due and payable immediately in accordance
with.this Resolution.
(d) The Trustee may use any money in the Capital Fund or the Allocation
Fund to pay debt service on the Notes or Debt Service if there is an Event of Default.
(2) No right or remedy by the terms of this Resolution conferred upon or reserved
to the Trustee or to the owners of the Notes or the Owners is intended to be exclusive of any
other right or remedy, but each and every such right or remedy shall be cumulative and shall
be in addition to any other right or remedy given to the Trustee, the owners of the Notes or
to the Owners hereunder or now or hereafter existing at law or in equity or by statute. The
assertion or employment of any right or remedy shall not prevent the concurrent or
subsequent assertion or employment of any other right or remedy.
(3) No delay or omission to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or shall be construed to be a waiver
of any such Event of Default or acquiescence therein, and every such right or remedy may
be exercised from time to time and as often as may be deemed expedient.
(4) No waiver of any Event of Default,whether by the Trustee, the owners of the
Notes or by the Owners, shall extend to or shall affect any subsequent Event of Default or
shall impair any rights or remedies consequent thereon.
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(C) Anything in this Resolution to the contrary notwithstanding,the owners of a majority
in aggregate principal amount of outstanding Notes and the Owners of a majority in aggregate
principal amount of the outstanding Bonds shall have the right, at any time during the continuance
of an Event of Default, by an instrument or instruments in writing executed and delivered to the
Trustee,to direct the time,method and place of conducting all proceedings to be taken in connection
with the enforcement of the terms and conditions of this Resolution, or for the appointment of a
receiver or any other proceedings hereunder;provided that such direction shall not be otherwise than
in accordance with the provisions of law and of this Resolution.
(D) (1) All money received hereunder pursuant to any right or remedy given or action
taken upon occurrence of an Event of Default under this Resolution shall,after payment of the costs
and expenses of the proceedings resulting in the collection of such money and of the expenses,
liabilities and advances incurred or made hereunder,be deposited in the Bond Principal and Interest
Account and all such money shall be applied to the Notes or the Bonds, as the case may be, as
follows:
FIRST, to the payment to the persons entitled thereto of all installments of
interest then due on the Notes or the Bonds, including interest on any past due
principal of any Note or Bond at the rate borne by such Note or Bond, in the order
of the maturity of the installments of such interest and, if the amount available shall
not be sufficient to pay in full any particular installment, then to such payment
ratably, according to the amounts due on such installments, to the persons entitled
thereto without any discrimination or privilege;
SECOND, to the payment to the persons entitled thereto of the unpaid
principal of any of the Notes or the Bonds which shall have become due at maturity,
in the order of their due dates, and, if the amount available shall not be sufficient to
pay in full the principal of the Notes or the Bonds due on any particular date,together
with such interest,then to such payment ratably,according to the amount of principal
due on such date, to the persons entitled thereto without any discrimination or
privilege; and
THIRD,to be held for the payment to the persons entitled thereto as the same
shall become due of the principal of and interest on the Notes or the Bonds which
may thereafter become due at maturity and, if the amount available shall not be
sufficient to pay in full the principal of and interest on the Notes or the Bonds due on
any particular date, such payment shall be made ratably according to the amount of
principal and interest due on such date to the persons entitled thereto without any
discrimination or privilege.
(2) Whenever money is to be applied pursuant to the provisions of this
subsection, such money shall be applied at such times,and from time to time,as the Trustee
shall determine, having due regard for the amount of such money available for application
and the likelihood of additional money becoming available for such application in the future.
Whenever the Trustee shall apply such funds, it shall fix the date upon which such
application is to be made and upon such date interest on the amounts of principal to be paid
on such dates shall cease to accrue. The Trustee shall establish a special record date for such
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payments and shall mail, at least 15 days prior to such special record date, such notice as it
may deem appropriate of the deposit with it of any such money and of the fixing of any such
date. The Trustee shall not be required to make payment of principal to the owner of any
Note or the Owner of any Bond until such Note or Bond shall be presented to the Trustee for
appropriate endorsement or for cancellation if fully paid.
(3) Whenever all principal of and interest on all Notes and all Bonds have been
paid under the provisions of this subsection and all expenses and charges of the Trustee have
been paid, any balance remaining in the Bond Principal and Interest Account, the Debt
Service Reserve Account or the General Account shall be paid as provided in Section 11,
except that any funds remaining the Taxpayer Payment Subaccount or the Taxpayer Payment
Reserve Subaccount shall be returned to the Taxpayer.
(E) All rights of action(including the right to file proof of claims)under this Resolution
or under any of the Notes or the Bonds may be enforced by the Trustee without the possession of
any of the Notes or the Bonds or the production thereof in any trial or other proceeding related
thereto and any such suit or proceeding instituted by the Trustee shall be brought in its name as
Trustee without the necessity of joining as plaintiffs or defendants any owners of the Notes or
Owners of the Bonds, and any recovery of judgment shall be for the equal and ratable benefit of the
owners of all outstanding Notes or the Owners of all the outstanding Bonds, respectively.
(F) No owner of any Note or Owner of any Bond shall have any right to institute any suit,
action or proceeding at law or in equity for the enforcement of this Resolution or for the execution
of any trust hereof or for the appointment of a receiver or any other remedy hereunder unless such
owner previously shall have given to the Trustee written notice of an Event of Default as provided
above, and unless also the Note owner or owners or the Owner or Owners of a majority in principal
amount of the Notes or Bonds,respectively,then outstanding shall have made written request of the
Trustee after the right to exercise such powers, or right of action, as the case may be, shall have
accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise
the powers granted in this Resolution,or to institute such action, suit, or proceeding in its name; and
unless, also, there shall have been offered to the Trustee security and indemnity satisfactory to it
against the costs,expenses and liabilities to be incurred therein or thereby,and the Trustee shall have
refused or neglected to comply with such request within a reasonable time. Such notification,
request and offer of indemnity are hereby declared in every such case, at the option of the Trustee,
to be conditions precedent to the execution of the powers and trusts of this Resolution or for any
other remedy hereunder; it is understood and intended that no one or more owners of the Notes or
Owners of the Bonds shall have any right in any manner whatever by its or their action to affect,
disturb or prejudice the security of this Resolution, or to enforce any right hereunder, except in the
manner herein provided, and that all proceedings at law or in equity shall be instituted, had and
maintained in the manner herein provided and for the equal benefit of all owners of the outstanding
Notes or all Owners of the outstanding Bonds, respectively.
Nothing in this Section contained shall, however, affect or impair the right of any Owner,
which is absolute and unconditional, to enforce the payment of the principal of and redemption
premium, if any, and interest on its Notes or Bonds out of the Trust Estate, or the obligation of the
Commission to pay the same, out of the Trust Estate or special funds and accounts, at the time and
place expressed in the Notes or the Bonds.
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(G) If the Trustee shall have proceeded to enforce any right under this Resolution by the
appointment of a receiver or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely,then and in every such case the
City, the Commission, the District, the Trustee and the owners shall be restored to their former
positions and rights hereunder, respectively, and with regard to the property subject to this
Resolution, and all rights, remedies and powers of the Trustee and the owners of Notes or Bonds
shall continue as if no such proceedings had been taken.
(H) The Trustee shall not waive (a)any Event of Default in the payment of the principal
of any outstanding Note or Bond at the date of maturity specified therein or(b)any Event of Default
in the payment when due of the interest on any outstanding Note or Bond unless prior to such waiver
all arrears of interest or all arrears of payments of principal when due, as the case may be, with
interest on overdue principal at the rate borne by such Note or Bond, and all expenses of the Trustee
in connection with such Event of Default shall have been paid or provided for. In case of any such
waiver,or if any proceeding taken by the Trustee on account of any such Event of Default shall have
been discontinued or abandoned or determined adversely, then and in every such case the City, the
Commission,the District,the Trustee and the Owners shall be restored to their former positions and
rights hereunder,respectively,but no such waiver shall extend to any subsequent or other Event of
Default, or impair any rights consequent thereon.
SECTION 19. THE TRUSTEE
(A) The Trustee hereby accepts the trusts and duties imposed upon it by this Resolution,
upon and subject to the express terms and conditions set forth in this Resolution. Except during the
continuance of an Event of Default (i) the Trustee undertakes to perform only such duties as are
specifically set forth in this Resolution, and no implied covenants or obligations shall be read into
this Resolution against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may
rely, as to the truth of the statements and correctness of the opinions expressed therein, upon the
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Resolution; but in the case of any such certificates or opinions which by any provision of this
Resolution are specifically required to be furnished to the Trustee,the Trustee shall be under a duty
to examine them to determine whether or not they conform to the requirements of this Resolution.
If an Event of Default has occurred and is continuing,the Trustee shall exercise the rights and power
as vested in it by this Resolution and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of his or her own
affairs.
(1) The Trustee may execute any of the trusts or powers hereof and perform any
of its duties by or through attorneys, agents,receivers or employees but shall be answerable
for the conduct of the same in accordance with the standard specified above, and shall be
entitled to advice of counsel concerning all matters of trusts hereof and the duties hereunder,
and may in all cases pay such reasonable compensation to all such attorneys, agents,
receivers and employees as may reasonably be employed in connection with the trusts
hereof. The Trustee may act upon the opinion or advice of any attorneys (who may be the
attorney or attorneys for the City or the Commission), approved by the Trustee in the
exercise of reasonable care. The Trustee shall not be responsible for any loss or damage
resulting from any action or nonaction in good faith in reliance upon such opinion or advice.
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(2) The Trustee shall not be responsible for any recital herein or in the Notes or
the Bonds,except for the Certificate of Authentication required by this Resolution, or for the
validity of the execution by the Commission of this Resolution or of any supplements hereto
or instruments of further assurance, or for the sufficiency of the security for the Notes or the
Bonds issued hereunder or intended to be secured hereby.
(3) The Trustee shall not be accountable for the use of any Bond authenticated
or delivered hereunder. The Trustee may become the owner of any Note or the Owner of any
Bond secured hereby with the same rights which it would have if not the Trustee and any
Bond owned by the Trustee shall be deemed outstanding unless cancelled pursuant to the
provisions hereof.
(4) The Trustee shall be protected in acting upon any notice, request, consent,
certificate, order, affidavit, letter, telegram or other paper or document reasonably believed
to be genuine and correct and to have been signed or sent by the proper person or persons.
The Trustee shall not withhold unreasonably its consent,approval or action to any reasonable
request of the City. Any action taken by the Trustee pursuant to this Resolution upon the
request or consent of any person who at the time of making such request or giving such
consent is the owner of any of the Notes or the Owner of any of the Bonds, shall be
conclusive and binding upon all future owner of the Notes or Owners of the Bonds,
respectively, and upon owners of the Notes or Owners of any Bonds issued in exchange
therefor or in place thereof, respectively.
(5) As to the existence or nonexistence of any fact or as to the sufficiency or
validity of any instrument,paper or proceeding,the Trustee shall be entitled in good faith to
rely upon a certificate signed by an Authorized Representative as sufficient evidence of the
facts therein contained and prior to the occurrence of an Event of Default of which the
Trustee has become aware shall also be at liberty to accept a similar certificate to the effect
that any particular dealing, transaction or action is necessary or expedient but may at its
discretion secure such further evidence deemed necessary or advisable, but shall in no case
be bound to secure the same. The Trustee may accept a certificate of an Authorized
Representative to the effect that a resolution or ordinance in the form therein set forth has
been adopted by the City as conclusive evidence that such resolution or ordinance has been
duly adopted and is in full force and effect.
(6) The permissive right of the Trustee to do things enumerated in this Resolution
shall not be construed as a duty and it shall not be answerable for other than its negligence
or willful default.
(7) At any and all reasonable times the Trustee and its duly authorized agents,
attorneys, experts, engineers, accountants and representatives shall have the right to inspect
any and all of the books, papers and records of the City and the Commission pertaining to
the revenues and receipts pledged to the payment of the Notes or the Bonds,and to take such
memoranda from and in regard thereto as may be desired.
(8) The Trustee shall not be required to give any bond or surety in respect of the
execution of such trusts and powers or otherwise in respect of the premises.
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(9) Notwithstanding anything elsewhere in this Resolution,the Trustee shall have
the right, but shall not be required,to demand, in respect of the authentication of any Bonds,
the withdrawal of any cash,or any action whatsoever within the purview of this Resolution,
any showings, certificates, opinions, appraisals or other information, or corporate action or
evidence thereof, in addition to that by the terms hereof required as a condition of such
action,deemed desirable by the Trustee for the purpose of establishing the right of the City
to the authentication of the Bonds, the withdrawal of any cash or the taking of any other
action by the Trustee.
(10) Before taking the action referred to in Section 18(B),the Trustee may require
that a satisfactory indemnity bond be furnished for the reimbursement of all expenses to
which it may be put and to protect it against all liability, except liability which is adjudicated
to have resulted from its negligence or willful default,by reason of any action so taken. No
provision of this Resolution shall require the Trustee to expend or risk its own funds in the
performance of any of its duties hereunder, or in the exercise of any of its rights and powers
if it has reasonable grounds for believing that repayment of these funds or adequate
indemnity against this risk or liability is not reasonably assured to it.
(11) All money received by the Trustee shall, until used, applied or invested as
herein provided, be held in trust for the purposes for which they were received segregated
from other funds to the extent required by law. The Trustee may contract with the Registrar
and Paying Agent as to the investment of funds held under this Resolution as long as all such
investments are made in Qualified Investments as required by Indiana law and this
Resolution and as long as the Commission is not charged any additional fees or charges for
such arrangement. The Trustee shall not be under any liability for interest on any money
received hereunder except such as may be agreed upon.
(12) The Trustee for all purposes of this Resolution shall be deemed to be aware
of any Event of Default.
(B) The Trustee shall be entitled to payment and reimbursement for reasonable fees for
its services rendered hereunder and all advances, counsel fees and other expenses reasonably and
necessarily made or incurred by the Trustee in connection with such services,but solely from money
available therefor under the Resolution. Upon any Event of Default, but only upon an Event of
Default, the Trustee shall have a first lien with right of payment prior to payment on account of
principal of or interest on any Bond upon the Trust Estate for the foregoing fees, charges and
expenses incurred by it.
(C) In any judicial proceeding to which the Commission, acting in the name of the City,
is a party and which in the opinion of the Trustee and its counsel has a substantial bearing on the
interests of the owners of the Notes or the Owners of the Bonds,the Trustee may intervene on behalf
of the owners.
(D) Any corporation or association into which the Trustee may be converted or merged,
or with which it may be consolidated, or to which it may sell or transfer its trust business and assets
as a whole or substantially as a whole, or any corporation or association resulting from any such
conversion, sale, merger, consolidation or transfer to which it is a party ("Reorganization"), ipso
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facto shall be and become successor Trustee hereunder, if legally qualified to serve as such, and
vested with all of the title to the Trust Estate and all the trusts, powers, discretion, immunities,
privileges and all other matters as was its predecessor, without the execution or filing of any
instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided that within thirty (30) days of the effective date of
such Reorganization, the Mayor or the Commission may object to such corporation or association
becoming successor Trustee by filing written notice of such objection with the Trustee and by
mailing such notice to the Owners whereupon a successor or temporary Trustee shall be appointed
in accordance with subsection (G).
(E) The Trustee and any successor Trustee may at any time resign from the trusts hereby
created by giving 30 days' written notice by registered or certified mail to the Mayor, the Clerk-
Treasurer, the Commission, and the owners of the Notes or the Owners of the Bonds, and such
resignation shall take effect upon the appointment of a successor Trustee in accordance with
subsection (G) and acceptance of such appointment by the successor Trustee. If the Commission
fails to appoint a successor Trustee within 60 days of receipt of notice of the Trustee's resignation,
the Trustee may petition a court of competent jurisdiction to appoint a successor Trustee.
(F) The Trustee may be removed at any time with or without cause by an instrument or
concurrent instruments in writing delivered to the Trustee and to the Mayor,the Clerk-Treasurer and
the Commission and signed by the owners of a majority of the aggregate principal amount of the
outstanding Notes or the Owners of a majority of the aggregate principal amount of the outstanding
Bonds or their attorneys-in-fact duly authorized. Notice of the removal of the Trustee shall be given
in the same manner as provided in subsection(E) with respect to the resignation of the Trustee and
such removal shall take effect upon the appointment of a successor Trustee. The Commission shall
appoint a successor. Trustee immediately upon the removal of the Trustee. So long as no Event of
Default, or an event which with the passage of time would become an Event of Default, shall have
occurred and be continuing, the Trustee may be removed at any time, upon appointment of a
successor Trustee, by resolution of the Commission filed with the Trustee.
(G) If the Trustee shall resign or be removed, or be dissolved, or shall be in course of
dissolution or liquidation, or otherwise become incapable of acting hereunder, or in case it shall be
taken under the control of any public officer or officers, or of a receiver appointed by a court, a
successor may be appointed by the owners of a majority of the aggregate principal amount of the
outstanding Notes or the Owners of a majority of the aggregate principal amount of all Bonds then
outstanding by an instrument or concurrent instruments in writing signed by the owners of a majority
of the aggregate principal amount of the outstanding Notes or the Owners or by their attorneys-in-
fact duly authorized, a copy of which shall be delivered personally or sent by registered or certified
mail to the City and the Commission. Nevertheless, in case of such vacancy the Commission by
resolution may appoint a temporary Trustee to fill such vacancy. Within ninety (90) days after such
appointment, the owners may appoint a successor Trustee; and any such temporary Trustee so
appointed by the Commission shall become the successor Trustee if no appointment is made by the
owners within such period but if an appointment is made by the owners, such appointment shall
immediately and without further act be superseded by any Trustee so appointed by such owners.
Notice of the appointment of a temporary or successor Trustee shall be given in the same manner
as provided by subsection (E) with respect to the resignation of a Trustee. Every such Trustee
appointed pursuant to the provisions of this Section shall be a trust company or a commercial bank
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with trust powers and having a reported capital and surplus of not less than$50,000,000, if there be
such an institution willing,qualified and able to accept the trust upon reasonable or customary terms.
(H) Every successor or temporary Trustee appointed hereunder shall execute,
acknowledge and deliver to its predecessor and also to the Mayor, the Clerk-Treasurer and the
Commission an instrument in writing accepting such appointment hereunder, and thereupon such
successor,without any further act,deed or conveyance, shall become fully vested with all the estates,
properties, rights, powers, trusts, duties and obligations of its predecessors; but such predecessor
shall,nevertheless,on the written request of the Mayor,the Clerk-Treasurer or the Commission,after
the payment of all fees, charges and expenses which may be due and owing to such predecessor
pursuant to the provisions of subsection(B),execute and deliver an instrument transferring to such
successor Trustee all the estates,properties,rights,powers and trusts of such predecessor hereunder;
and every predecessor Trustee shall deliver all securities, money and other property or documents
held by it as Trustee hereunder to its successor hereunder. Should any instrument in writing from
the Commission, the Mayor or the Clerk-Treasurer be required by any successor or temporary
Trustee for more fully and certainly vesting in such successor the estate, rights, powers and duties
hereby vested or intended to be vested in the predecessor any and all such instruments in writing
shall, on request, be executed, acknowledged and delivered by the Commission, the Mayor or the
Clerk-Treasurer. The resignation of any Trustee and the instrument or instruments removing any
Trustee and appointing a successor or temporary Trustee hereunder, together with all other
instruments provided for in this Section, shall be filed or recorded by the successor or temporary
Trustee in each office where this Resolution shall have been filed.
SECTION 20. THE REGISTRAR AND PAYING AGENT
(A) The Commission may appoint a separate Registrar or Paying Agent.
(B) Each and every remedy, power, right, claim, demand, cause of action, immunity,
estate,title, interest and lien expressed or intended by this Resolution to be exercised by or vested
in or conveyed to the Trustee with respect to this Resolution and shall be exercisable by and vested
in Registrar or Paying Agent but only to the extent necessary to enable the Registrar and Paying
Agent,to exercise such powers, rights and remedies, and every covenant and obligation necessary
to the exercise thereof by the Registrar and Paying Agent, shall run to and be enforceable by it.
(C) Should any instrument in writing from the City or the Commission or agreement be
required by the Registrar and Paying Agent for more fully and certainly vesting in and confirming
to it such properties, rights, powers, trusts, duties and obligations, any and all such instruments in
writing shall, on request,be executed, acknowledged and delivered by the Commission,the Mayor
or the Clerk-Treasurer. If the Registrar and Paying Agent, or a successor to either, shall become
incapable of acting,resign or be removed,all the estates,properties,rights,powers,trusts,duties and
obligations of the Registrar and Paying Agent so far as permitted by law, shall vest in and be
exercised by the Trustee until the appointment of a new Registrar and Paying Agent.
SECTION 21. NOTICES. Any notice,request,complaint,demand,communication or other
paper shall be sufficiently given when delivered or mailed by registered or certified mail, postage
prepaid, or sent by telegram, addressed to the appropriate Notice Addresses. The City, the
Commission, or the Registrar and Paying Agent may, by notice given hereunder, designate any
further or different addresses to which subsequent notices,certificates or other communications shall
be sent.
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SECTION 22. BUSINESS DAYS. In any case where the date of a principal payment of the
Notes or Bonds or the date fixed for redemption of any portion of the Notes or the Bonds shall be
a Saturday, Sunday or a day on or the city in which the office of the Registrar and Paying Agent is
located are required or authorized by law to close, then payment of principal may be made on the
succeeding business day with the same force and effect as if made on the date of maturity or the date
fixed for redemption.
SECTION 23. SEVERABILITY. If any section,paragraph or provision of this Resolution
shall be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such
section,paragraph or provision shall not affect any of the remaining provisions of this Resolution.
SECTION 24. REPEAL OF CONFLICTING PROVISIONS. All resolutions, ordinances
and orders, or parts thereof, in conflict with the provision of this Resolution, are, to the extent of
such conflict, hereby repealed or amended.
SECTION 25. EFFECTIVE DATE. This Resolution shall be in full force and effect
immediately upon its passage and signing. The Secretary of the Commission is hereby directed to
deliver a certified copy of this Resolution to the Clerk-Treasurer of the City.
Adopted at the meeting of the Carmel Redevelopment Commission held on the 2nd day of
February, 1998, at Carmel, Indiana.
CARMEL REDEVELOPMENT COMMISSION
President
Attest:
Secretary
Exhibit A Description of Projects and Costs of the Projects
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ACCEPTANCE OF OFFICE OF TRUSTEE, REGISTRAR AND PAYING AGENT
The undersigned hereby accepts the duties and obligations of Trustee, Registrar and Paying
Agent imposed by the foregoing Resolution.
National City Bank of Indiana, as Trustee,
Registrar and Paying Agent
By:
Title:
4
ATTEST:
I
Date: , 1998
(SEAL)
Notice Address of Trustee, Registrar and Paying
Agent
National City Trust
101 West Washington Street, Suite 410E
Indianapolis, IN 46255
Attention:
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EXHIBIT A
Description of Projects
Road Improvements (1) AAA Way from 116th Street to Carmel Drive
(2) Ring road in Economic Development Area
(3) Relocation of Medical Drive at intersection with AAA Way
(4) Relocation of intersection of Keystone Way and ring road
(5) Widening of 116th Street
Costs include bringing roads up to City specifications, utility relocation, drainage, landscaping and
lighting. If there are sufficient proceeds available, cost may also include traffic signals at
intersections of Carmel Drive and AAA Way and 116th Street and AAA Way.
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APPENDIX E
Legal Opinion
and
Tax Matters
[Upon issuance of the Bonds, Bond Counsel proposes to issue its approving opinion
substantially in the form presented below]
, 1998
McDonald& Company Securities, Inc.
Cleveland, Ohio
Re: Carmel Redevelopment District
Tax Increment Revenue Bonds of 1998
Total Issue: $2,655,000
Dated: February 1, 1998
Ladies and Gentlemen:
We have acted as bond counsel in connection with the issuance by the Carmel
Redevelopment Commission ("Commission"), acting in the name of the City of Carmel, Indiana
("Issuer"), of its $2,655,000 Redevelopment District Tax Increment Revenue Bonds of 1998, dated
February 1, 1998 ("Bonds"), issued pursuant to a resolution of the Commission adopted on February
2, 1998 ("Bond Resolution"). We have examined the law and the certified transcript of proceedings
of the Issuer had relative to the authorization, issuance and sale of the Bonds and such other papers
as we deem necessary to render this opinion.
We have relied upon the certified transcript of proceedings and certificates of public officials
of the Issuer furnished to us, including the Issuer's tax covenants and representations ("Tax
Representations"), and we have not undertaken to verify any facts by independent investigation.
Based upon our examination, we are of the opinion, as of the date hereof, as follows:
1. The Bonds are the valid and binding limited obligations of the Redevelopment
District of the Issuer, and together with any additional obligations on a parity therewith hereafter
issued,are payable solely from the Trust Estate (as defined in the Bond Resolution). The Bonds are
not a corporate obligation of the Issuer but constitute limited obligations of the Redevelopment
District of the Issuer. Neither the faith and credit nor the taxing power of the Issuer or the
Redevelopment District of the Issuer is pledged to the payment of principal of or interest on the
Bonds.
2. Under statutes,decisions,regulations and rulings existing on this date,interest on the
Bonds is exempt from income taxation in the State of Indiana("State"). This opinion relates only
to the exemption of interest from State income taxation.
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I
3. Under federal statutes,decisions,regulations and rulings existing on this date,interest
on the Bonds is excludable from gross income for federal income tax purposes under Section 103
of the Internal Revenue Code of 1986 ("Code"). This opinion relates only to the exclusion from
gross income of interest on the Bonds for federal income tax purposes under Section 103 of the Code
and is conditioned on continuing compliance by the Issuer with its Tax Representations. Failure to
comply with the Tax Representations could cause interest on the Bonds to lose the exclusion from
gross income for federal income tax purposes retroactive to their date of issue.
We have not been engaged nor have we undertaken to review the accuracy, completeness or
sufficiency of the Offering Memorandum or any other offering material relating to the Bonds, and
we express no opinion thereon.
We are not expressing an opinion on the investment quality of the Bonds, and we have not
investigated or examined the facts, figures or financial statements or other representations made to
the purchasers of the Bonds respecting the Issuer by its representatives, or by the Taxpayer (as
defined in the Bond Resolution) by its representatives. Furthermore, we are not expressing an
opinion as to whether the facts, figures, financial statements or other representations made to the
purchasers of the Bonds respecting the Issuer by its representatives, or by the Taxpayer by its
representatives,contained any untrue statements of material fact or omitted to state any material facts
necessary to make the statements made not misleading.
We have not opined on any matters relating to the validity, binding nature or enforceability
of the Taxpayer Agreement, dated as of February 1, 1998 (the"Taxpayer Agreement"), between the
Commission and the Taxpayer. We have received, and we assume you are relying on, an opinion
of counsel to the Issuer as to the validity, binding nature and enforceability of the Taxpayer
Agreement against the Issuer and an opinion of counsel to the Taxpayer as to the validity, binding
nature and enforceability of the Taxpayer Agreement against the Taxpayer.
It is to be understood that the rights of the owner of the Bonds and the enforceability of the
Bonds,the Taxpayer Agreement and the Bond Resolution,may be subject to bankruptcy,insolvency,
reorganization,moratorium and other similar laws affecting creditors' rights heretofore or hereafter
enacted and that their enforcement may be subject to the exercise of judicial discretion in accordance
with general principles of equity. It is to be understood that the rights of the owner of the Bonds and
the enforceability of the Bonds, the Taxpayer Agreement and the Bond Resolution may be subject
to the valid exercise of the constitutional powers of the Issuer, the Commission,the State of Indiana
and the United States of America.
The opinions in numbered paragraphs 1 through 3 express the professional judgment of the
attorneys participating in the transaction as to the legal issues addressed herein. By rendering such
opinions,the undersigned does not become an insurer or guarantor of that expression of professional
judgment or of the transaction opined upon. Nor does the rendering of this opinion guarantee the
outcome of any legal dispute that may arise out of the transaction.
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We express no opinion with respect to the laws of any jurisdiction other than the internal
laws of the State of Indiana and the federal
United
we expressly disclaim any undertaking
on is
based upon such laws as are in effect on the date hereof and
to advise you of any subsequent changes therein.
This opinion is being furnished to you for your sole use only in connection with this
transaction, and no other party is entitled to rely on it without our written consent.
Capitalized terms not defined herein shall have the definitions set forth in the Bond
Resolution.
Very truly yours,
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4
TAX MATTERS
In the opinion of Ice Miller Donadio & Ryan, Indianapolis, Indiana, Bond Counsel, under
existing laws, regulations,judicial decisions and rulings, interest on the Bonds is excludable from
gross income under Section 103 of the Internal Revenue Code of 1986, as amended and in effect on
the issue date of the Bonds (the "Code") for federal income tax purposes. This opinion relates only
to the exclusion from gross income of interest on the Bonds for federal income tax purposes under
Section 103 of the Code and is conditioned on continuing compliance by the Carmel Redevelopment
Commission with the Tax Covenants (hereinafter defined). Failure to comply with the Tax
Covenants could cause interest on the Bonds to lose the exclusion from gross income for federal
income tax purposes retroactive to the date of issue. In the opinion of Ice Miller Donadio & Ryan,
Indianapolis,Indiana,Bond Counsel,under existing laws,regulations,judicial decisions and rulings,
interest on the Bonds is exempt from income taxation in the State of Indiana (the "State"). This
opinion relates only to the exemption of interest on the Bonds for State income tax purposes. See
the form of opinion of Bond Counsel.
The Code imposes certain requirements which must be met subsequent to the issuance of the
Bonds as a condition to the exclusion from gross income of interest on the Bonds for federal income
tax purposes. The Carmel Redevelopment Commission will covenant not to take any action, within
its power and control, nor fail to take any action with respect to the Bonds that would result in the
loss of the exclusion from gross income for federal income tax purposes of interest on the Bonds
pursuant to Section 103 of the Code(collectively, the "Tax Covenants"). The Bond Resolution and
certain certificates and agreements to be delivered on the date of delivery of the Bonds establish
procedures to permit compliance with the requirements of the Code. It is not an event of default
under the Bond Resolution if interest on the Bonds is not excludable from gross income for federal
tax purposes or otherwise pursuant to any provision of the Code which is not in effect on the issue
date of the Bonds.
The interest on the Bonds is not a specific preference item for purposes of the federal
individual or corporate alternative minimum taxes. However, interest on the Bonds is included in
adjusted current earnings in calculating corporate alternative minimum taxable income for purposes
of the corporate alternative minimum tax.
IC 6-5.5 imposes a franchise tax on certain taxpayers (as defined in IC 6-5.5) which, in
general, include allcorporations which are transacting the business of a financial institution in
Indiana. The franchise tax is measured in part by interest excluded from gross income under Section
103 of the Code minus associated expenses disallowed under Section 265 of the Code.
Although Bond Counsel will render an opinion that interest on the Bonds is excluded from
federal gross income and exempt from State income tax, the accrual or receipt of interest on the
Bonds may otherwise affect a bondholder's federal income tax or state tax liability. The nature and
extent of these other tax consequences will depend upon the bondholder's particular tax status and
a bondholder's other items of income or deduction. Taxpayers who may be affected by such other
tax consequences include, without limitation, financial institutions, certain insurance companies,
S corporations, certain foreign corporations, individual recipients of Social Security or railroad
retirement benefits and taxpayers who may be deemed to have incurred(or continued) indebtedness
E-4
other
to purchase or carry the Bonds. Bond Counsel expresses no opinion egarding any
tax advisors with
such tax
consequences. Prospective purchasers of the Bonds should consult
their regard to the federal and State tax consequences of owning the Bonds other than those consequences
set forth in the form of opinion of Bond Counsel.
Under existing laws,judicial decisions, regulations and rulings, the Bonds haveanot been
designated as "qualified tax-exempt obligations" for purposes of Section 265 b 3 of the Code
relating to the disallowance of the deduction for interest expense allocable to interest on tax-exempt
obligations acquired by financial institutions.
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I
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APPENDIX F
Form of Taxpayer Agreement
I
TAXPAYER AGREEMENT
This Taxpayer Agreement(the "Agreement") is made as of this 1st day of February, 1998,
by and between the Carmel Redevelopment Commission (the "Commission") and Linder Group,
Inc., an Indiana corporation, The Linder Company of Indiana, Inc., an Indiana corporation, Ohio
Retail Services, Ltd., an Ohio limited liability company, J. L. Henry Company, an Indiana
corporation and Ben Mar, LLC, an Indiana limited liability company (the "Project Owner")
(collectively and jointly and severally,the "Taxpayer") (collectively,the "Parties").
WHEREAS,the Commission, being the governing body of the Redevelopment District of
the City of Carmel, Indiana ("City"), pursuant to the provisions of IC 36-7-14 and IC 36-7-25
(collectively the "Act") adopted its Declaratory Resolution No. 1-1997, as confirmed by its
Confirmatory Resolution No. 2-1997 and amended by an Amendatory Resolution No. 5-1998
(collectively, the "Area Resolution") by which Area Resolution the Commission declared the
Merchants Square Economic Development Area(the "Area")to be an economic development area
under the Act and adopted an Economic Development Plan(the "Plan")providing for the economic
development of the Area;
WHEREAS,pursuant to the Area Resolution, the Commission established within the Area
an allocation area for the purpose of the distribution and allocation of property taxes under the Act
with boundaries coterminous with the boundaries of the Area(the"Allocation Area")and established
a special fund into which allocated property taxes are to be deposited in accordance with and for the
purposes stated in the Act and the Area Resolution;
WHEREAS, the Project Owner is the owner of the real estate described in Exhibit A (the
"Real Estate");
WHEREAS,the Real Estate is in the Area;
WHEREAS, in order to encourage the Taxpayer to improve the Real Estate and to provide
economic development in the Area, it is necessary for the Commission to undertake a financing of
certain infrastructure improvements in or serving the Area,as more particularly described in Exhibit
B (collectively the "Projects");
WHEREAS, in order to provide long term financing for the Projects, the Commission
adopted its Preliminary Bond Resolution No. 1-1998 and published notice of the determination to
issue the hereinafter defined Bonds, and the statutory period for objection to the issuance of the
Bonds has run; and has also adopted its Final Bond Resolution No. 6-1998 (collectively,the "Bond
Resolution") and will issue, in the name of the City, its Redevelopment District Tax Increment
Revenue Bonds of 1998 to finance a portion of the costs of the Projects (the "Bonds");
WHEREAS, the Bonds will be payable from real property tax proceeds from assessed
valuation in the Area in excess of the assessed valuation described in IC 36-7-14-39(b)(1)as reduced
by the credit provided for in IC 36-7-14-39.5(c)("Tax Increment")and payments received under this
+I Agreement(as defined below, "Taxpayer Payments");
WHEREAS, the Project Owner is a major taxpayer in the Allocation Area;
WHEREAS, in order to assure the Commission that Tax Increment and Taxpayer Revenues
(collectively, "Revenues")will be sufficient to pay debt service on the Bonds when due and payable
("Debt Service"),the Commission has determined that it is necessary to enter into an agreement with
the Taxpayer to assure that there will be sufficient Revenues available to pay Debt Service if Tax
Increment collected in the Allocation Area on or about each June 30 and December 31 ("Collected
Tax Increment") after taking into account amounts already on deposit in the Tax Increment
Subaccount (as defined in the Bond Resolution) (including earnings on the Debt Service Reserve
Account that have been transferred to the Tax Increment Subaccount) ("Prior Balance") is less than
the Minimum Tax Increment due on that date as shown on Exhibit C ("Minimum Tax Increment");
WHEREAS, in order to induce the Commission to proceed with the Projects and issue the
Bonds, the Taxpayer is willing to guarantee payment of the Minimum Tax Increment;
WHEREAS, the Act authorizes the Commission to enter into this Agreement; and
WHEREAS, the Taxpayer has the authority to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals and the agreements
contained below, and for other good and valuable consideration,the receipt and sufficiency of which
are hereby acknowledged, the Commission and the Taxpayer agree as follows:
1. Determination of Taxpayer Payment. (a) On or before each July 1 and.January
2,beginning July 1, 1999, National City Bank of Indiana, as trustee for the Bonds (the "Trustee")
shall determine whether the amount in the Tax Increment Subaccount, after taking into account
Collected Tax Increment, equals or exceeds the Minimum Tax Increment. If such amounts in the
Tax Increment Subaccount equal or exceed the Minimum Tax Increment, no action shall be taken
pursuant to subsection (b).
(b) If the amount in the Tax Increment Subaccount, after taking into account the
collected Tax Increment, is less than the Minimum Tax Increment, the Trustee shall notify
McDonald&Company Securities, Inc. (the "Underwriter"), the Commission and the Taxpayer on
or before July 10 and January 10, respectively, of the amount of the deficiency ("Taxpayer
Payment"). The notice shall be in the form set forth in Exhibit D.
2. Payment of Taxpayer Payment. Upon receipt of the notice described in
Section 1(b),the Taxpayer shall pay the Taxpayer Payment to the Trustee at its principal corporate
trust office on or before the immediately succeeding July 15 or January 15. The Trustee shall
deposit the Taxpayer Payment in separate subaccounts created under the Bond Resolution referred
to as the Taxpayer Payment Subaccount (the "Taxpayer Payment Subaccount") and the Taxpayer
Payment Reserve Subaccount (the "Taxpayer Payment Reserve Subaccount"). If notice from the
Trustee is not received by July 15 or January 15, the Taxpayer Payment shall be due within two (2)
business days after receipt of such notice from the Trustee. Upon receipt of such notice, the
obligation of the Taxpayer to pay the Taxpayer Payments shall be absolute and unconditional and
shall not be subject to diminution by setoff, counterclaim, abatement or otherwise. Funds in the
F-2
3. Extent of Guaranty. The Taxpayer's guaranty under this Agreement shall be limited
to the Minimum Tax Increment and secure only the Bonds.
4. Commission Representation. (a) The Commission has the authority to execute,
deliver and perform this Agreement.
(b) The Commission agrees to comply with the provisions of the Bond Resolution.
(c) If the Tax Increment is not sufficient to pay Debt Service, the Commission will
consider recommending to the Carmel Common Council that the additional credit provided for in
IC 36-7-14-39.5 not apply in the Allocation Area.
5. Taxpayer Covenants.Warranties and Representations. (a)The Taxpayer has the
authority to execute, deliver and perform this Agreement.
(b) This Agreement is duly authorized, has been validly executed and delivered, and is
legal,valid,binding and enforceable against the Taxpayer in accordance with its terms.
(c) The Taxpayer will pay, or cause to be paid, all property tax bills for property in the
Allocation Area(including the Real Estate) owned by the Taxpayer,its affiliates and its subsidiaries
before the tax bills are delinquent. The Taxpayer shall have the right to contest or appeal such tax
or assessment only to the extent the tax or assessment exceeds the Minimum Tax Increment as set
forth in Exhibit C.
(d) The Project Owner expressly acknowledges that this Agreement touches and concerns
the Real Estate and that this Agreement is intended to be and shall be a covenant running with the
Real Estate,binding upon and enforceable against the Taxpayer, its successors and assigns and all
persons claiming under or through Taxpayer.
(e) The Project Owner covenants and warrants that it is lawfully seized of the Real Estate
in fee simple, has valid and indefeasible title to the Real Estate.
(f) The obligation to make Taxpayer Payments up to the amount at which the balance
in the Bond Principal and Interest Account (as defined in the Bond Resolution) equals the Debt
Service due on the Bonds on the next February 1 or August 1 shall constitute a lien on the Real
Estate,which lien shall be a property tax lien, and the obligations subject to the lien(including the
obligation to make Taxpayer Payments) shall be treated in the same manner as property taxes for
purposes of IC 6-1.1-22-13. The Taxpayer expressly agrees that its obligation to pay each Taxpayer
Payment under this Agreement includes its obligations to pay interest on delinquent payments and
costs of collection, including all expenses which may be paid or incurred by or on behalf of the
Commission in connection with the foreclosure of any lien for unpaid property taxes, such as
reasonable attorneys' fees and expenses, appraisers' fees, outlays for documentary and expert
evidence, stenographers' charges,publication costs and costs of procuring all title searches,policies
and examinations and similar data and assurances with respect to title as the Commission reasonably
may deem necessary to prosecute such suit. As permitted by IC 36-7-25-6, any Taxpayer Payment
shall be treated in the same manner as property taxes for purposes of IC 6-1.1-22-13.
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(g) The Taxpayer shall by the first day of the fifth month following the end of its fiscal
year provide the Trustee, the Underwriter and the Mayor of the City with copies of its reviewed
annual financial statements for the immediately preceding fiscal year prepared by an independent
certified public accountant, or such other financial information as will enable the City and the
Commission to comply with State and federal securities laws and will enable the City and its
financial advisors to evaluate the financial condition of the Taxpayer.
(h) The Taxpayer hereby agrees to indemnify,protect and save the Commission and the
City harmless from all liability, obligations, losses, claims, damages, actions, suits, proceedings,
costs and expenses, including attorneys' fees and expenses arising out of, connected with, or
resulting directly or indirectly from the Taxpayer's actions, inactions or omissions with respect to
this Agreement or the Bonds, including the dissemination of any information provided by the
Taxpayer concerning the Taxpayer, Tax Increment or the Project to the owners of the Bonds or
potential purchasers of the Bonds. The indemnification arising under this subsection shall continue
in full force and effect, notwithstanding the full payment of all obligations under this Agreement.
(i) The Taxpayer hereby agrees to indemnify,protect and save the Underwriter harmless
from all liability, obligations, losses, claims, damages, actions, suits, proceedings, costs and
expenses,including attorneys' fees and expenses arising out of, connected with, or resulting directly
or indirectly from the Taxpayer's actions, inactions or omissions with respect to this Agreement or
the Bonds. The indemnification arising under this subsection shall continue in full force and effect,
notwithstanding the full payment of all obligations under this Agreement.
(j) The Taxpayer represents and warrants that the information contained in the Offering
Memorandum as it relates to the Taxpayer and the Project as of the date of the Offering
Memorandum and issue date of the Bonds will be complete and correct in all material respects and
does not and will not contain any untrue statement of a material fact and does not and will not omit
a material fact required or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(k) The Taxpayer hereby agrees that upon receipt of their March 1, 1999 assessments of
the improvements to the Real Estate it will appeal initially to the Hamilton County Board of Review
for an increase in the assessment of the Real Estate to an amount which, when combined with the
other real property assessment in the Allocation Area(less the base assessed value) and multiplied
by the net tax rate (as described in the projections of Tax Increment prepared by H. J. Umbaugh&
Associates, LLP and delivered upon issuance of the Bonds) will produce sufficient Tax Increment
to cover the maximum annual Debt Service due on the Bonds.
6. Termination. The Taxpayer's obligation under this Agreement shall terminate and
be deemed fully performed and all liability hereunder shall cease upon the payment, redemption or
defeasance of the Bonds in accordance with their terms. The Taxpayer's obligations under this
Agreement shall continue and remain enforceable against the Taxpayer as described in the preceding
sentence if the Project Owner sells or otherwise conveys all or any portion of the Real Estate unless
assigned in accordance with Section 17 of this Agreement.
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ilure to
ay when
ue any
yer
7. Defaults and Remedies. (a)her ceder shallaconstitupe an eventdof defaultyathe
Payment that the Taxpayer has agreed to pay
Taxpayer under this Agreement. The Commission, the City and the Trustee may pursue any
available remedy at law or in equity to enforce payment of such Taxpayer Payments.
(b) If any Taxpayer Payment owed by the Taxpayer is not paid in full by the Taxpayer
when due,any unpaid amount shall bear interest at the rate of 12 percent per annum from its due date
until paid.
(c) The remedies of the Commission under this Agreement are cumulative and the
exercise of any one or more of the remedies shall not be construed as a waiver of any of the other
remedies available to the Commission unless specifically so provided.
(d) All payments due by the Taxpayer hereunder shall be due without relief from
valuation and appraisement laws and subject to collection fees and reasonable attorneys' fees and
expenses in the event of default.
(e) The Taxpayer waives presentment for payment,protest, notice of protest and notice
of nonpayment of the Taxpayer Payments due under this Agreement(after delivery of the notice to
the Taxpayer required in Section 2).
8. Amendment. This Agreement may be amended only after the adoption of a
resolution of the Commission approving the amendment, as provided by law, and upon the
execution of the amendment by the Parties or their successors in interest. In the judgment of the
Trustee, no amendment may impair or materially alter the contract with purchasers of the Bonds.
9. No Other Agreements. Except as otherwise expressly provided herein, this
Agreement supersedes all prior agreements, negotiations and discussions relative to the subject
matter of this Agreement and is a full integration of the agreement of the Parties.
10. Consent. Whenever consent or approval of either party is required under this
Agreement, such consent or approval shall not be unreasonably withheld.
11. Mutual Assistance. The Parties agree to take such actions, including the execution
and delivery of such documents, instruments, petitions and certifications, as may be necessary or
appropriate to carry out the terms,provisions and intent of this Agreement. The Parties have entered
into this Agreement in reliance upon their respective representations and agreements herein, the
performance by the Parties of their respective obligations hereunder,both as of the date hereof and
as of the date of issuance and sale of the Bonds issued by the Commission to finance the Projects
(the "Closing"), and the opinions of counsel to the Commission and to the Taxpayer.
12. Closing Requirements. At or prior to the Closing,the Commission shall receive the
following documents, in each case satisfactory in form and substance to it and its counsel:
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(i) the opinion of counsel to the Commission, dated the date of Closing,
addressed to the Commission,the Trustee,the Taxpayer and the Underwriter,
as to the enforceability of this Agreement against the Commission in
accordance with its terms.
(ii) the opinion of counsel to the Taxpayer, dated the date of Closing, addressed
to the Taxpayer, the Trustee, the Commission and the Underwriter,
substantially in the form attached as Exhibit E.
(iii) a certificate of the Commission as to due authorization, validity, binding
nature and enforceability of this Agreement against the Commission.
(iv) a certificate of the Taxpayer as to due authorization, validity, binding nature
and enforceability of this Agreement.
(v) an executed copy of this Agreement.
(vi) such additional legal opinions, certificates, proceedings, instruments and
other documents as Ice Miller Donadio&Ryan, bond counsel,counsel to the
Commission, or counsel to the Taxpayer or counsel to the Underwriter, may
reasonably request to evidence compliance by the Commission, the City or
the Taxpayer with legal requirements, the truth and accuracy, as of the time
of Closing, of the representations contained herein and the due performance
or satisfaction by the Commission, the City or the Taxpayer, at or prior to
such time,of all agreements then to be performed and all conditions then to
be satisfied.
13. Disclaimer. Nothing contained in this Agreement nor any act of the Commission
shall be deemed or construed by any of the Parties, or by third persons,to create any relationship of
third party beneficiary, of principal or agent, of limited or general partnership, of joint venture, or
of any association or relationship involving the Commission.
14. Notices. All notices, certificates, approvals, consents or other communications
desired or required to be given under this Agreement shall be in writing and shall be sufficiently
given on the day of personal delivery by messenger or courier service, or on the second day
following the day on which the same shall have been mailed by registered or certified mail, postage
and fees prepaid, return receipt requested addressed as follows:
If to the Commission: Cannel Redevelopment Commission
c/o City Attorney
One Civic Square
Cannel, Indiana 46032
If to the Trustee: National City Bank of Indiana
One National City Center
Suite 655S
Indianapolis, Indiana 46255
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If to the Taxpayer: The Linder Company of Indiana, Inc.
Keystone at the Crossing
8555 North River Road, Suite 375
Indianapolis, Indiana 46240-4905
Attention: Craig Hessee
The Parties by notice given under this Agreement, may designate any further or different
addresses to which subsequent notices, certificates, approvals, consents or other communications
shall be sent.
15. Paragraph Headings. The paragraph headings and references are for the
convenience of the Parties and are not intended to limit, vary, define or expand the terms and
provisions contained in this Agreement and shall not be used to interpret or construe the terms and
provisions of this Agreement.
16. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the same agreement.
17. Successors and Assignees. The terms and conditions of this Agreement are to apply
to and bind the successors and assigns of the Commission and the successors and assigns of the
Taxpayer. However, the Commission may not assign this Agreement to any party other than the
Trustee without the prior written consent of the Taxpayer, and after assignment to the Trustee,the
Trustee may not assign this Agreement to any party without the prior written consent of the
Taxpayer (except to any successor Trustee appointed in accordance with the Resolution) and the
Taxpayer may not assign this Agreement to any party without the prior written consent of the
Commission and such assignment by the Taxpayer shall not,in the judgment of the Trustee, impair
or materially alter the contract with the purchasers of the Bonds.
18. Severability. If any provision of this Agreement,or any paragraph,sentence,clause,
phrase or word, or the application thereof, in any circumstance,is held invalid,the remainder of the
Agreement shall be construed as if such invalid part were never included herein and the Agreement
shall be and remain valid and enforceable to the fullest extent permitted by law.
19. Applicable Law and Venue. This Agreement shall be governed by the laws of the
State of Indiana. Any action to enforce or remedy a breach of this Agreement shall be brought in
or venued to a court of competent jurisdiction in the State of Indiana, and the Parties hereto,on their
behalf and on behalf of their successors and assigns, consent to personal jurisdiction in the State of
Indiana.
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IN WITNESS WHEREOF, the Commission and the Taxpayer have caused this Agreement
to be executed as of the day and year first written above.
THE LINDER COMPANY OF INDIANA, INC.
By:
Name:
Title:
LINDER GROUP, INC.
By:
Name:
Title:
OHIO RETAIL SERVICES, LTD.
By:
Name:
Title:
J. L. HENRY COMPANY
By:
Name:
Title-
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BEN MAR, LLC
By:
Name:
Title:
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CARMEL REDEVELOPMENT COMMISSION
President
ATTEST:
Secretary
Exhibit A- Description of Real Estate
Exhibit B - Description of Project
Exhibit C - Schedule of Minimum Taxpayer Payments
Exhibit D - Form of Notice of Payment Amount Due
Exhibit E - Form of Opinion of Counsel to Taxpayer
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STATE OF INDIANA )
) SS:
COUNTY OF MARION )
Before me, a Notary Public in and for this County and State, personally appeared
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the of The Linder Company of Indiana, Inc., who executed
( ,
this Taxpayer Agreement on behalf of the company.
Witness my hand and Notarial Seal this day of , 1998.
11,
Signature:
Printed:
NOTARY PUBLIC
My Commission Expires: County of Residence:
STATE OF INDIANA )
) SS:
COUNTY OF MARION )
Before me, a Notary Public in and for this County and State, personally appeared
4 ,the of the Linder Group, Inc.,who executed this Taxpayer
Agreement on behalf of the corporation.
Witness my hand and Notarial Seal this day of , 1998.
Signature:
Printed:
NOTARY PUBLIC
My Commission Expires: County of Residence:
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STATE OF INDIANA )
) SS:
COUNTY OF MARION )
Before me, a Notary Public in and for this County and State, personally appeared
_, the of the Ohio Retail Services, Ltd., who executed this
Taxpayer Agreement on behalf of the company.
Witness my hand and Notarial Seal this day of 1998.
Signature:
Printed.
NOTARY PUBLIC
My Commission Expires: County of Residence:
STATE OF INDIANA )
) SS:
COUNTY OF MARION )
Before me, a Notary Public in and for this County and State, personally appeared
, the of the J. L. Henry Company, who executed this Taxpayer
Agreement on behalf of the company.
Witness my hand and Notarial Seal this day of , 1998.
Signature:
Printed:
NOTARY PUBLIC
My Commission Expires: County of Residence:
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STATE OF INDIANA )
) SS:
COUNTY OF MARION )
Before me, a Notary Public in and for this County and State, personally appeared
, the of Ben Mar, LLC, who executed this Taxpayer
Agreement on behalf of the company.
Witness my hand and Notarial Seal this day of , 1998.
Signature:
Printed:
NOTARY PUBLIC
My Commission Expires: County of Residence:
STATE OF INDIANA )
) SS:
COUNTY OF HAMILTON )
Before me, a Notary Public in and for this County and State, personally appeared
,President of the Carmel Redevelopment Commission,who executed
this Taxpayer Agreement and ,the Secretary of the Carmel Redevelopment
Commission,who acknowledged the execution of the foregoing Taxpayer Agreement on behalf of
the Commission.
Witness my hand and Notarial Seal this day of , 1998.
Signature:
•
Printed:
NOTARY PUBLIC
My Commission Expires: County of Residence:
This document prepared by Lucy A. Emison, Ice Miller Donadio & Ryan, One American
Square, Box 82001, Indianapolis, Indiana 46282-0002, telephone (317) 236-2473.
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II
EXHIBIT A
DESCRIPTION OF REAL ESTATE
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EXHIBIT B
tr/
DESCRIPTION OF PROJECTS
Road Improvements (1) AAA Way from 116th Street to Carmel Drive
(2) Ring road in Economic Development Area
(3) Relocation of Medical Drive at intersection with AAA Way
(4) Relocation of intersection of Keystone Way and ring road
(5) Widening of 116th Street
Costs include bringing roads up to City specifications,utility relocation, drainage, landscaping and
lighting. If there are sufficient proceeds available, cost may also include traffic signals at
intersections of Carmel Drive and AAA Way and 116th Street and AAA Way.
�i.
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EXHIBIT C
SCHEDULE OF MINIMUM TAXPAYER PAYMENTS
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EXHIBIT D
NOTICE OF PAYMENT AMOUNT DUE
To: The Linder Company of Indiana, Inc.
Carmel Redevelopment Commission
McDonald & Company Securities, Inc.
From: National City Bank of Indiana, Trustee
of Indianapolis, Indiana
Attached hereto is the calculation of the amount of the Taxpayer Payment due under the
Taxpayer Agreement, dated as of February 1, 1998, between Linder Group, Inc. an Indiana
corporation, The Linder Company of Indiana, Inc., an Indiana corporation, Ohio Retail Services,
Ltd.,an Ohio limited liability company,J.L.Henry Company,an Indiana corporation,and Ben Mar,
LLC, an Indiana limited liability company (collectively the "Taxpayer"), and the Carmel
Redevelopment Commission showing that a Taxpayer Payment of$ is due on
15,
Under the terms of the Taxpayer Agreement the Taxpayer is required to pay the Taxpayer
Payment to National City Bank of Indiana, as Trustee, at its principal corporate trust office on or
before 15,
Capitalized terms not defined herein shall have the meanings set forth in the Taxpayer
Agreement.
Trustee,
ti
CERTIFIED MAIL/
RETURN RECEIPT REQUESTED
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CALCULATION OF TAXPAYER PAYMENT
Prior balance in Tax Increment
Subaccount* $
Plus Collected Tax Increment
Minus Minimum Tax Increment $
(Taxpayer Payment Due) ($ )
Excess -No payment due $ _
* Including earnings on the Debt Service Reserve Account actually transferred to, and on deposit
in, the Tax Increment Subaccount.
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APPENDIX G
Form of Investor Suitability Letter
(For Resale of Bonds in Secondary Market)
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EXHIBIT C
FORM OF SOPHISTICATED INVESTOR LETTER
We are this day purchasing from the Carmel Redevelopment Commission (the
"Commission")acting on behalf of the City of Carmel,Indiana(the"City")$2,655,000 of the Carmel
Redevelopment District Tax Increment Revenue Bonds of 1998 (the "Bonds") issued pursuant to
Resolution No. 6-1998 adopted on February 2, 1998 (the "Resolution"), IC 5-1-14, IC 36-7-14 and
IC 36-7-25. In consideration of the agreement of the Commission,on behalf of the City,to issue and
sell the Bonds, and as an inducement thereto, we hereby make the following representations and
warranties upon which you may rely in connection with this transaction:
1. We are an accredited investor(as defined in Rule 501(a)under the Securities Act of
1933,as amended(the "Securities Act")), purchasing Bonds for our own account or
for the account of another such"accredited investor",and we are acquiring the Bonds
for investment purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act. We have such knowledge
and experience in financial and business matters as to be capable of evaluating the
merits and risk of our investment in the Bonds and invest in or purchase securities
similar to the Bonds in the normal course of our business, and we, and any investor
accounts for which we are acting are able to bear the economic risk of our or its
investment for an indefinite period of time. We confirm that neither the
Commission, the City nor any person acting on their behalf has offered to sell the
Bonds by,and that we have not been made aware of the offering of the Bonds by,any
form of general solicitation or general advertising, including, but not limited to, any
advertisement, article, notice or other communication published in any newspaper,
magazine or similar media or a broadcast over television or radio.
2. We acknowledge on our behalf and on behalf of any investor for which we are
purchasing Bonds that neither the Commission,the City nor any person representing
the Commission or the City has made any representation to us with respect to the
Commission, the City of the offering or sale of Bonds other than the information
II contained in the Offering Memorandum dated February 12, 1998 (the "Offering
Memorandum") which has been delivered to us and upon which we and they are
relying in making our investment decision with respect to the Bonds.
3. We understand that the Bonds have not been registered under the Securities Act and,
unless so registered,may not be sold without registration under the Securities Act or
an exemption therefrom. We are purchasing the Bonds for our own account, for
investment and not with a view to resale or distribution except in compliance with
federal and state securities laws, including the Securities Act and laws concerning
disclosure.
4. We are familiar with the City,Merchants Square Economic Development Area(the
"Area")including the Allocation Area described in the Offering Memorandum,the
Commission, and the Taxpayer (as defined in the Resolution). We have received
such information concerning the City,the Commission,the Carmel Redevelopment
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District(the "District"),the Taxpayer, the Bonds, the Trust Estate (as defined in the
Resolution), including the Tax Increment (as defined in the Resolution) and the
payments under the Taxpayer Agreement dated as of February 1, 1998 between the
Commission and the Taxpayer(the "Taxpayer Agreement"), and the Taxpayer as we
deemed to be necessary in connection with investment in the Bonds, and consent to
all the terms and conditions of the Resolution and the Taxpayer Agreement; we have
received, read and commented upon, or have had the opportunity to read and
comment upon, the Resolution, the Taxpayer Agreement and the Offering
Memorandum prior to the purchase of the Bonds. We have been provided with the
opportunity to ask questions of and receive answers from the representatives of the •
City, the Commission, the District and the Taxpayer concerning the terms and
conditions of the Bonds, the tax status of the Bonds, and legal opinions and
enforceability of remedies as described in the Offering Memorandum, and to obtain
any additional information needed in order to verify the accuracy of the information
obtained to the extent the City, the Commission, the District, or the Taxpayer
possesses such information or can acquire it without unreasonable effort or expense.
We are not relying on Ice Miller Donadio & Ryan or H.J. Umbaugh& Associates,
L.L.P. for information concerning the financial status of the Commission, the City
or the Taxpayer or the availability of Tax Increment or payments due under the
Taxpayer Agreement, or the ability of the Commission to honor its obligations or
other covenants under the Resolution or the Taxpayer Agreement,or the ability of the
Taxpayer to honor its obligations or other covenants under the Taxpayer Agreement.
We understand that the projection of Tax Increment prepared in connection with the
issuance of the Bonds has been based on assessed value estimates prepared by The
J.E. Beres Company and the Clay Township Assessor based on construction plans,
construction schedules and construction cost information provided by the Taxpayer
regarding the real property improvements to be constructed in the Allocation Area
(as defined in the Resolution). We are not relying on the City, the Commission or
the District for information concerning the financial status of the Taxpayer or the
ability of the Taxpayer to honor its obligations under the Taxpayer Agreement.
5. We have investigated the security for the Bonds, including the Trust Estate and the
availability of Tax Increment and Taxpayer Payments, to our satisfaction, and we
understand that the Bonds are payable solely from the Trust Estate, including the Tax
Increment and Taxpayer Payments and that neither the City nor the Commission has
the authority to levy a tax to pay debt service on the Bonds.
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