Loading...
HomeMy WebLinkAboutD-1969-09 $26 Million COIT Bond Issue Sponsor: Councilor Snyder ORDINANCE D- 1969 -09 AS AMENDED AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF CARMEL, INDIANA, APPROVING A LEASE BETWEEN THE CITY OF CARMEL REDEVELOPMENT AUTHORITY AND THE CITY OF CARMEL REDEVELOPMENT COMMISSION, PLEDGING COUNTY OPTION INCOME TAX REVENUES OF THE CITY TO PAY CERTAIN OBLIGATIONS AND TAKING OTHER ACTIONS RELATED THERETO WHEREAS, the City of Cannel Redevelopment Authority (the "Authority has been created pursuant to IC 36 -7 -14.5 as a separate body corporate and politic, and as an instrumentality of the City of Carmel, Indiana (the "City to finance local public improvements for lease to the City of Cannel Redevelopment Commission (the "Commission and WHEREAS, the Authority has adopted a resolution indicating its intent to issue its county option income tax lease rental revenue bonds, in the maximum original issued amount of $26,630,000 (the "Bonds for purposes of financing (i) the acquisition by the Authority from the City of a portion of the existing Keystone Avenue right -of -way between 96' Street and U.S. 31 in the City (the "Keystone Corridor and the use by of the City of the proceeds of such sale to finance the projects described in Exhibit A hereto (collectively, the "Projects and distributed in the manner therein specified, (ii) a debt service reserve fund, (iii) capitalized interest on the Bonds, and (iv) the costs of issuance of the Bonds; and WHEREAS, the Authority and the Commission have adopted resolutions approving a proposed Lease Agreement in the form presented at this meeting (the "Lease for the purpose of paying the principal and interest on the Bonds issued pursuant to IC 36 -7 -14.5 to finance the acquisition and construction of the Projects, and the Commission scheduled a public hearing regarding the Lease pursuant to IC 36 -7 -14 -25.2 and published a notice of such public hearing pursuant to IC 5 -3 -1; and WHEREAS, said public hearing has been held and all interested parties were provided the opportunity to be heard at the hearing; and WHEREAS, pursuant to IC 36- 7- 14.5 -14 and 1C 36 -7 -14 -25.2, the Commission has adopted a resolution finding that the lease rental payments to be paid by the Commission to the Authority pursuant to the Lease are fair and reasonable, and that the terns of the Lease are based upon the value of the Leased Premises (as defined in the Lease) and the use of the Projects throughout the term of the Lease will serve the public purpose of City of Cannel and is in the best interests of its residents; and WHEREAS, the Common Council of the City (the "Common Council desires to approve the Lease pursuant to IC 36 -7 -14 -25.2, which provides that any lease approved by a resolution of the Commission must be approved by an ordinance of the fiscal body of the unit; and VERSION A 12/07/09 WHEREAS, the annual rentals payable by the Commission under the Lease will be pledged by the Authority to pay debt service on the Bonds; and WHEREAS, the Hamilton County Income Tax Council has imposed a county option income tax (the "CO1T pursuant to Indiana Code 6 -3.5 -6 on the adjusted gross income of Hamilton County (the "County taxpayers; and WHEREAS, Indiana Code 6 -3.5 -6 provides that revenue derived from the imposition of the COIT shall be distributed to the County monthly on the first day of each month (the City's share of each such monthly distribution, a "Monthly Distribution and WHEREAS, pursuant to IC 36 -7 -14 -25.5, the City of Cannel, Indiana (the "City is authorized to pledge its Monthly Distributions of COIT revenues to pay lease obligations incurred under IC 36 -7 -14 -25.2; and WHEREAS, on July 7, 1997, the Common Council adopted its Ordinance No. D- 1302 -97 (the "COIT Ordinance pursuant to which the Common Council, on behalf of the City, pledged and assigned the City's Monthly Distributions of COIT revenues for the payment of any bond, note, warrant or other evidence of indebtedness, any lease or any other obligation (any bond, note, warrant or other evidence of indebtedness, any lease or any other obligation, individually, an "Obligation" and, collectively, the "Obligations identified by ordinance of the Common Council as an obligation secured by the COIT Ordinance (any Obligation so identified as an obligation secured by the COIT Ordinance, individually, a "Secured Obligation" and, collectively, the "Secured Obligations if certain conditions are satisfied, and such conditions have been satisfied; and WHEREAS, the proceeds of the sale of a portion of the Keystone Corridor to the Authority (the "Sales Proceeds have not been included in the existing budget for the City, and the City now desires to appropriate the Sales Proceeds to the payment of the costs of the Projects; and WHEREAS, notice of a hearing on said appropriation has been duly given by publication as required by law, and the hearing on said appropriation has been held, at which all taxpayers had an opportunity to appear and express their views as to such appropriation. NOW, THEREFORE, BE IT ORDAINED BY THE COMMON COUNCIL OF THE CITY OF CARMEL, INDIANA, as follows: Section 1. Approval of Lease. The Common Council hereby approves the Lease, as approved by the Commission, pursuant to IC 36 -7 -14 -25.2, on the following conditions: (a) the maximum original issued amount of the Bonds shall not exceed $26,630,000, (b) the awarding of all construction bids for the various portions of the Projects shall be subject to the procedures set forth in Exhibit B hereto; (c) any change orders for the Project that exceed S49,999 shall be subject to the procedures set forth in Exhibit B hereto; and (d) the Common Council shall approve the use of any surplus construction proceeds of the Bonds remaining after completion of the Projects. VERSION A 12/07/09 2 Section 2. Sale of Right -of -Way; Appropriation of Sales Proceeds. The Common Council hereby authorizes the sale to the Authority of the portion of the Keystone Corridor that will comprise the Leased Premises under the Lease, for a price sufficient to cover the costs of the Projects, but not to exceed 526,630,000. The Mayor, Clerk Treasurer and other officers of the City are hereby authorized to take such actions and execute such documents as may be necessary to effectuate such sale. There is hereby appropriated a sum not to exceed 526,630,000 out of the Sales Proceeds, together with all investment earnings thereon, for the purpose of providing funds to be applied to the Projects. Such appropriation shall be in addition to all appropriations provided for in the existing budget and shall continue in effect until the completion of the described purposes. The Mayor and the Clerk- Treasurer are hereby authorized to take all such actions and execute all such instruments as are necessary or desirable to effectuate this appropriation, including the tiling of a report of this appropriation with the Indiana Department of Local Government Finance. Section 3. Pledge of Pledged Revenues. The Common Council hereby approves the issuance of the Bonds. Pursuant to IC 36 -7 -14 -25.5, the Common Council, on behalf of the City, hereby pledges and assigns the City's Monthly Distributions of COIT revenues for the payment of the Secured Obligations, including the Lease. The Common Council hereby identifies the Lease as an obligation secured by the COIT Ordinance. Section 4. Creation of Contract; Amendment of Ordinance. (a) The provisions of this Ordinance shall constitute a contract by and between the City and the obligees of the Secured Obligations (including the Lease). After the issuance of any Secured Obligations, the Common Council shall not, except as specifically provided in Section 4(b) or 4(c) hereof, repeal, modify or amend this Ordinance. (b) The Common Council may, from time to time and at any time, without the consent of or notice to any obligees under any Secured Obligations, adopt a supplemental ordinance to modify or amend this Ordinance for any one or more of the following purposes: (i) To cure any ambiguity or formal defect or omission in this Ordinance or in any supplemental ordinance; (ii) To grant to or confer upon any obligees under any Secured Obligations any additional benefits, rights, remedies, powers, authority or security that may lawfully he granted to or conferred upon such obligees under such Secured Obligations; (iii) To modify or amend this Ordinance to permit the qualification of any Secured Obligations for sale under the securities laws of the United States of America or any of the states of the United States of America; (iv) To provide for the refunding or advance refunding of any Secured Obligations; VERSION A 12/07/09 3 (v) To procure a rating on any Secured Obligations from a nationally recognized securities rating agency, designated in such supplemental ordinance, if such supplemental ordinance will not materially adversely affect the interests of any obligees under any Secured Obligations; (vi) To make changes to reflect the identification of any Obligation as an obligation secured by the COIT Ordinance in accordance with Section 3 thereof; or (vii) Any other purpose which, in the judgment of the Common Council, does not materially adversely affect the interests of any obligees under any Secured Obligations. (c) This Ordinance, and the rights and obligations of the City and any obligees under any Secured Obligations, may be modified or amended from time to time at any time by a supplemental ordinance adopted by the Common Council with the consent of the obligees under the Secured Obligations affected by such modification or amendment, holding at least a majority in aggregate principal amount of such Secured Obligations then outstanding (exclusive of Secured Obligations, if any, owned by the City); provided, however, that no such modification or amendment shall, without the express consent of all of the obligees under the Secured Obligations affected by such modification or amendment, permit a privilege or priority of any of such Secured Obligations over any other of such Secured Obligations, or create a lien securing any of such Secured Obligations other than a lien ratably securing all of such Secured Obligations, nor shall any such modification or amendment reduce the percentage of consent required for amendment or modification of this Ordinance. Any act done pursuant to a modification or amendment so consented to shall be binding upon all the obligees under the Secured Obligations and shall not be deemed an infringement of any of the provisions of this Ordinance, and may be done and performed as fully and freely as if expressly permitted by the teens of this Ordinance, and, after such consent relating to such specified matters has been given, no obligees under the Secured Obligations shall have any right or interest to object to such action or in any manner to question the propriety thereof or to enjoin or restrain the City or any officer thereof from taking any action pursuant thereto. If the City shall desire to obtain any such consent to any modification or amendment of this Ordinance, it shall mail or cause to be mailed a notice, postage prepaid, to the respective obligees under the Secured Obligations affected by such modification or amendment. Such notice shall briefly set forth the nature of the proposed supplemental ordinance and shall state that a copy thereof is on file for inspection by all obligees under such Secured Obligations. The City shall not, however, be subject to any liability to any obligees under any Secured Obligations by reason of its failure to mail the notice described in this Section 4, and any such failure shall not affect the validity of such supplemental ordinance when consented to and approved as provided in this Section 4. Whenever, at any time within one year after the date of the mailing of such notice, the City shall receive an instrument or instruments purporting to be executed by the obligees under VERSION A 12/07/09 4 such Secured Obligations of not less than a majority in aggregate principal amount of such Secured Obligations then outstanding (exclusive of Secured Obligations, if any, owned by the City), which instrument or instruments shall refer to the proposed supplemental ordinance described in such notice, and shall specifically consent to and approve the adoption thereof in substantially the form of the copy thereof referred to in such notice as on file, thereupon, but not otherwise, the Common Council may adopt such supplemental ordinance in substantially such form, without liability or responsibility to any obligees under the Secured Obligations, whether or not such obligee shall have consented thereto. (d) Upon the adoption of any supplemental ordinance pursuant to the provisions of this Section 4, this Ordinance shall be, and is deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Ordinance shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such modifications and amendments. Section 5. Severability. If any part of this Ordinance shall be adjudged to be invalid by a court of proper jurisdiction, it shall be conclusively presumed that the Common Council would have passed the remainder of this Ordinance without such invalid part. Section 6. Authorization of Other Actions. Each of the Mayor, any member of the Common Council and the Clerk Treasurer, and any other officer, employee or agent of the City is hereby authorized and directed, for and on behalf of the City, to execute and deliver any contract, agreement, certificate, instrument or other document and to take any action as such person determines to be necessary or appropriate to accomplish the purposes of this Ordinance, such determination to be conclusively evidenced by such person's execution of such contract, agreement, certificate, instrument or other document or such person's taking of such action. Section 7. Effectiveness. This Ordinance shall be in full force and effect from and after its adoption by the Common Council and upon compliance with the procedures required by law. The COIT Ordinance shall remain in full force and effect and shall apply to the Lease. PASSED by the Common Council of the City of Cannel, this 7 oflo,e2i74)e)( 2009, by a vote of 7 ayes and Q nays. VERSION A 12/07/09 5 Z6/±7'-- COMMON COUNCIL OF THE CITY Of CARMEL n1ANA� Presiding Off' r Ar a. 'IC C 1 a. r Eric Seid er, P sident P-ro 1 empore Kevin Ride/ V I 1 1 o In Accetturo di. Richa�L. Sharp onald E. Carter uci yder ATT ST: y Diana L. Corclray, IAMC, Cler 'Tr surer y� Presented by me to the Mayor of the City of Carmel this S day of IRimA( 2009, at 1:3o P.M. t a L L L X i Diana L. Cordray. IAMC, I: k- Treasurer Approved by me, Mayor of the City of Carmel, Indiana, this //-L day w o,, 2009, at li.M. 6 i James Brainard, Mayor ATTES :j i AP il A O Nam' -i `a�i l D iana L. Contra AMC. Clerk- Treasurer Prepared by: Bruce D. Donaldson Barnes Thornburg LLP 11 South Meridian Street Indianapolis, IN 46204 VERSION A 12/07/09 6 EXHIBIT A LIST OF PROJECTS The Projects are listed below and shall be contracted for in the following order of priority, unless a different order of priority is approved by resolution of the Common Council: 1. The acquisition of Brookshire Golf Course by the direct retirement of outstanding bond anticipation notes of the Carmel Redevelopment District. ESTIMATED COST: $3,000.000 Z. Improvements to the intersection of Keystone Avenue and 131' Street consisting of construction, inspection, utility relocation and land acquisition costs. ESTIMATED COST: $11,000,000 3. Drainage projects in the Village of Mt. Carmel and Chesterton. ESTIMATED COST: $2,000,000 4. Drainage projects in the Southwest Clay Township neighborhoods of Larkspur, Walnut Creek, Kings Mill, Bridlebome, Windemere, Crooked Stick and Crooked Stick West, to satisfy obligations under annexation agreement. ESTIMATED COST: $1,000,000 5. Multi -use path along 106 Street from Ditch Road to Michigan Road. ESTIMATED COST: $1.500,000 6. Intersection improvements consisting of roundabouts at 106 Street and Ditch Road, 96' Street and Towne Road. and 106' Street and Shelbourne. ESTIMATED COST: $1,500.000 VERSION A I2 /07/09 7 EXHIBIT B CONSTRUCTION BIDDING AND CHANGE ORDER PROCEDURES 1. Whenever the Board of Public Works. and Safety of the City (the "Works Board (i) awards a construction bidding contract relating to the Projects, or (ii) approves a change order relating to the Projects that individually or in the aggregate exceeds $49,999 (each, a "BPW Decision the Works Board shall deliver written notice of the BPW Decision to the Clerk Treasurer, together with instructions to deliver a copy of such notice to each member of the Common Council by the close of business on the next business day after the date the Clerk Treasurer receives such notice. 2. Subject to Section 3 below, the Common Council shall have the right to review and approve, reject or modify the BPW Decision. 3. The Common Council shall be deemed to have approved the BPW Decision at the close of business on the fifth (5 business day after the date on which the Clerk- Treasurer received the notice of the BPW Decision from the Works Board (the "Effective Date unless: (a) by the close of business on the Effective Date, any member of the Council who disputes the BPW Decision provides to the Clerk Treasurer a written request to place such dispute on the agenda for the next meeting of the Common Council, and (b) at such meeting, the Common Council disapproves the BPW Decision by a vote of a majority of the elected members of the Common Council. INI)SUI 131)1) 115526]'2 VERSION A 12/07/09 8 LEASE AGREEMENT THIS LEASE AGREEMENT, made and dated as of this day of 2009, by and between the CITY OF CARMEL REDEVELOPMENT AUTHORITY, as lessor (the "Lessor a separate body corporate and politic organized and existing under Indiana Code 36 -7 -14.5 as an instrumentality of the City of Carmel, Indiana (the "City and the CITY OF CARMEL REDEVELOPMENT COMMISSION, as lessee (the "Lessee the governing body of the City of Cannel Department of Redevelopment acting for and on behalf of the City. WITNESSETH: WHEREAS, the City has created the Lessor under and in pursuance of the provisions of Indiana Code 36 -7 -14, Indiana Code 36 -7 -14.5 and Indiana Code 36 -7 -25 (collectively, the "Act for the purpose of financing, constructing, acquiring and leasing to the Lessee certain local public improvements and economic development projects; and WHEREAS, the City has created the Lessee to undertake redevelopment and economic development in the City in accordance with the Act; and WHEREAS, the Hamilton County Income Tax Council has imposed a county option income tax "COIT pursuant to Indiana Code 6 -3.5 -6 on the adjusted gross income of county taxpayers; and WHEREAS, to foster economic development in the City, the City, the Lessor, and the Lessee desire to provide for the acquisition and construction of the projects set forth on Exhibit A hereto (collectively, the "Projects and WHEREAS, the Act authorizes the Lessor to issue bonds for the purpose of obtaining money to pay Ole cost of acquiring property or constructing, improving, reconstructing or renovating public improvements; and WHEREAS, the costs of the acquisition and construction of the Projects will be paid from proceeds of bonds to be issued by the Lessor in a maximum original issued amount not to exceed 526,630,000 (the "Bonds and WHEREAS, the annual rentals to he paid under this Lease by the Lessee will be pledged by the Lessor to pay debt service on and other necessary incidental expenses of the Authority relating to the Bonds to be issued by the Lessor to finance the Projects; and WHEREAS. Indiana Code 36 -7 -14 -25.5 authorizes the Common Council of the City (the "Common Council to pledge the City's distributive share of COIT revenues to pay rentals under leases between the Lessor and the Lessee under the Act; and WHEREAS, pursuant to Ordinance D- 1969 -09, adopted by the Common Council on 2009, the City has pledged to the Lessee a portion of the City's distributive share of COIT, for the payment of the lease rentals owed by the Lessee under this Lease (such pledged portion, the `COIT Revenues and WHEREAS, the Lessor will acquire interests in the real estate described in Exhibit B (such real estate, together with any roads or other improvements that, on the date of acquisition thereof, are located thereon, collectively, the "Real Estate" or the "Leased Premises and such interests shall be for a term no less than the term of this Lease; and WHEREAS, the total cost of the Project, including, but not limited to, costs of acquisition, construction, improvements, architects' and engineers' fees, consultants' services, legal and financing expenses, certain expenses of operation of the Lessor during construction, interest during construction, debt service reserves and repayment of any funds advanced by the City or Lessee to meet preliminary expenses necessary to be paid prior to the issuance of bonds by the Lessor, is estimated to be not greater than 526,630,000; and WHEREAS, the Lessee has determined, after a public hearing held pursuant to the Act after notice given pursuant to IC 5 -3 -I, that the lease rentals provided for in this Lease are fair and reasonable, that the execution of this Lease is necessary and that the service provided by the Projects will serve the public purpose of the City and is in the best interests of its residents, and the Common Council has by ordinance approved this Lease, and the ordinance has been entered in the official records of the Common Council; and WHEREAS, the Lessor has determined that the lease rentals provided for in this Lease are fair and reasonable, that the execution of this Lease is necessary and that the service provided by the Projects will serve the public purpose of the City and is in the best interests of its residents, and the Lessor has duly authorized the execution of this Lease by resolution, and the resolution has been entered in the official records of the Lessor. THIS AGREEMENT WITNESSETH THAT: 1. Acquisition of Real Estate. The date by which the Lessor acquires the Real Estate and the Leased Premises are available for use shall be endorsed on this Lease at the end hereof by the parties to this Agreement, and such endorsement shall be recorded as an addendum to this Lease. 2. Premises, Term and Warranty. The Lessor does hereby lease, demise and let to Lessee all of the Lessor's right, title and interests in and to the Leased Premises. TO HAVE AND TO HOLD the Leased Premises with all rights, privileges, easements and appurtenances thereunto belonging, unto the Lessee, beginning on the date on which the Lessee begins to make lease rental payments hereunder and ending on the day prior to a date not more than twenty -two (22) years thereafter. However, the term of this Lease will terminate at the earlier of (a) the exercise by the Lessee of the option to 3 purchase the Leased Premises pursuant to Section 12 and the payment of the option price, or (b) the payment or defcasance of all bonds issued (i) to finance the cost of the Leased Premises, (ii) to refund all or a portion of such bonds, (iii) to refund all or a portion of such refunding bonds, or (iv) to improve the Leased Premises; provided that no bonds or other obligations of the Lessor issued to finance the Leased Premises remain outstanding at the time of such payment or defeasance. The Lessor hereby represents that it is possessed of, or will acquire, the Leased Premises and the Lessor warrants and will defend the Leased Premises against all claims whatsoever not suffered or caused by the acts or omissions of the Lessee or its assigns. Notwithstanding the foregoing, the Leased Premises may be amended to add additional property to the Leased Premises or remove any portion of the Leased Premises, provided however, following such amendment, the rental payable under this Lease shall be based on the value of the portion of the Leased Premises which is available for use, and the rental payments due under this Lease shall be in amounts sufficient to pay when due all principal of and interest on all outstanding Bonds. 3. Lease Rental. (a) Fixed Rental Payments. The Lessee agrees to pay fixed annual rental for the use and occupancy of the Leased Premises at a maximum annual rate of $3,579,000 (the "Fixed Annual Rentals The Fixed Annual Rentals shall be payable in advance in semi annual installments on the dates set forth in Section 4 hereof. After the sale of the Bonds issued to finance the acquisition and construction of the Leased Premises, the semi- annual installment of the Fixed Annual Rentals for the Leased Premises for each six -month period ending on each June 15 or December 15 (each a "Semi- annual Period shall be reduced to an amount equal to the multiple of $1,000 next higher than the suns of principal and interest due on the Bonds in such Semi- annual Period, plus Five Thousand Dollars ($5,000). Payment of the Fixed Annual Rentals shall commence on the later of (i) the date the Real Estate is acquired by the Lessor, or (ii) a date to be determined at the time of the sale of the Bonds, but no earlier than June 15, 2010. Such date and the amount of each semi annual installment of such reduced Fixed Annual Rentals shall be endorsed on this Lease by the parties hereto at the time of issuance of the Bonds and recorded as an addendum. If more than one series of Bonds is issued, the addendum shall be executed and recorded upon issuance of the final series of Bonds. (b) Additional Rental Payments. (i) The Lessee shall pay as further rental in addition to the rentals paid under Section 3(a) for the Leased Premises "Additional Rentals the amount of all taxes and assessments levied against or on account of the Leased Premises or the receipt of lease rental payments and the amount required to reimburse the Lessor for any insurance payments made by it under Section 7. Any and all such payments shall be made and satisfactory evidence of such payments in the form of receipts shall be furnished to the Lessor by the Lessee, at least three (3) days before the last day upon which such payments must be paid to avoid delinquency. If the Lessee shall in good faith desire to contest the validity of any such tax or assessment, the Lessee shall so notify the Lessor and shall furnish bond with surety to the approval of the 4 Lessor conditioned for the payment of the charges so desired to be contested and all damages or loss resulting to the Lessor from the nonpayment thereof when due, the Lessee shall not be obligated to pay the contested amounts until such contests shall have been determined. The Lessee shall also pay as Additional Rentals the amount calculated by or for the Lessor as the amount required to be rebated, or paid as a penalty, to the United States of America under Section 148(1) of the Internal Revenue Code of 1986, as amended and in effect on the date of issue of the Bonds "Code after taking into account other available moneys, to prevent the Bonds from becoming arbitrage obligations under Section 148 of the Code. (ii) The Lessee may by resolution pay Additional Rentals to enable the Lessor to redeem or purchase Bonds prior to maturity. Rental payments due under this Section 3 shall be reduced to the extent such payments are allocable to the Bonds redeemed or purchased by the Lessor with such Additional Rentals. The Lessee shall be considered as having an ownership interest in the Leased Premises valued at an amount equal to the amount of the Additional Rentals paid pursuant to this subsection (b)(ii). (c) Source of Payment of Rentals. The Fixed Annual Rentals and the Additional Rentals shall be payable solely from the COIT Revenues received by the Lessee from the City, and the Lessee shall be under no obligation to pay any Fixed Annual Rentals or Additional Rentals from any moneys or properties of the Lessee except the COIT Revenues received by the Lessee from the City. 4. Payment of Rentals. (a) The first lease rental payment shall be due on the later of (1) the date the Real Estate is acquired by the Lessor, or (ii) a date to be determined at the time of the sale of the Bonds, but no earlier than June 15, 2010, as set forth in the addendum referred to in Section 3(a) above. If the first rental payment date on the Leased Premises is other than June 15 or December 15, the first rental payment shall be for an amount calculated at the rate for that Semi annual Period from the date of payment to the next June 15 or December 15. Thereafter, rentals on the Leased Premises shall be payable in advance in semi annual installments on June 15 and December 15 of each year. The last semi annual rent payment on the Leased Premises due shall be adjusted to provide for a rental payment at the rate specified above from the date such installment is due to the expiration of this Lease. (b) All rentals payable under the terms of this Lease shall be paid by the Lessee to the bank designated as trustee ("Trustee") under the Trust Indenture between it and the Lessor (`Indenture or to such other bank or trust company as may from time to time succeed such bank as Trustee under the Indenture securing the bonds to be issued by the Lessor to finance the acquisition and construction of the Leased Premises. Any successor trustee under the Indenture shall be endorsed on this Lease at the end hereof by the parties hereto as soon as possible after selection, and such endorsement shall be recorded as an addendum to this Lease. All payments so made by the Lessee shall be considered as payment to the Lessor of the rentals payable hereunder. 5. Abatement of Rent. (a) If any part of the Leased Premises is taken under the exercise of the power of eminent domain, so as to render it unfit, in whole or part, for 5 use or occupancy by the Lessee, it shall then be the obligation of the Lessor to restore and rebuild that portion of the Leased Premises as promptly as may be done, unavoidable strikes and other causes beyond the control of the Lessor excepted; provided. however, that the Lessor shall not be obligated to expend on such restoration or rebuilding more than the condemnation proceeds received by the Lessor. (b) If any part of the Leased Premises shall be partially or totally destroyed, or is taken under the exercise of the power of eminent domain, so as to render it unfit, in whole or part, for use or occupancy by the Lessee, the rent shall be abated for the period during which the Leased Premises or such part thereof is unfit or unavailable for use or occupancy, and the abatement shall be in proportion to the percentage of the Leased Premises which is unfit or unavailable for use or occupancy. 6. Maintenance, Alterations and Repairs. The Lessee may enter into agreements w ith one or more other parties for the operation, maintenance, repair and alterations of all or any portion of the Leased Premises (the "Maintenance and Use Agreements Such other parties may assume all responsibility for operation, maintenance, repairs and alterations to the Leased Premises. At the end of the terns of this Lease, the Lessee shall deliver the Leased Premises to the Lessor in as good condition as at the beginning of the term, reasonable wear and tear only excepted. 7. Insurance. During the full term of this Lease, the Lessee shall, at its own expense, carry combined bodily injury insurance, including accidental death, and property damage insurance with reference to the Leased Premises in an amount not Tess than One Million Dollars ($1,000,000) on account of each occurrence with one or more good and responsible insurance companies. Such public liability insurance may be by blanket insurance policy or policies. The proceeds of the public liability insurance required herein (after payment of expenses incurred in the collection of such proceeds) shall be applied toward extinguishment or satisfaction of the liability with respect to which such insurance proceeds are paid. Such policies shall be for the benefit of persons having an insurable interest in the Leased Premises, and shall be made payable to the Lessor, the Lessee, and the Trustee and to such other person or persons as the Lessor may designate. Such policies shall be countersigned by an agent of the insurer who is a resident of the State of Indiana and deposited with the Lessor and the Trustee. If, at any time, the Lessee fails to maintain insurance in accordance with this Section, such insurance may be obtained by the Lessor and the amount paid therefor shall be added to the amount of rentals payable by the Lessee under this Lease; provided, however, that the Lessor shall be under no obligation to obtain such insurance and any action or non action of the Lessor in this regard shall not relieve the Lessee of any consequence of its default in failing to obtain such insurance. The insurance policies described in this Section 7 may be acquired by another party and shall satisfy this Section as long as the Lessor, the Lessee and the Trustee are named as additional insureds under such policies. Such coverage may be provided by scheduling it under a blanket insurance policy or policies. 6 8. Eminent Domain. If title to or the temporary use of the Leased Premises, or any part thereof, shall be taken under the exercise or the power of eminent domain by any governmental body or by any person, tine or corporation acting under governmental authority, any net proceeds received from any award made in such eminent domain proceedings (after payment of expenses incurred in such collection) shall be paid to and held by the Trustee under the Indenture. Such proceeds shall be applied in one or more of the following ways: (a) The restoration of the Leased Premises to substantially the same condition as it existed prior to the exercise of that power of eminent domain, or (h) The acquisition, by construction or otherwise, of other improvements suitable for the Lessee's operations on the Leased Premises and which are in furtherance of the purposes of the Act (the improvements shall be deemed a part of the Leased Premises and available for use and occupancy by the Lessee without the payment of any rent other than as herein provided, to the same extent as if such other improvements were specifically described herein and demised hereby). Within ninety (90) days from the date of entry of a final order in any eminent domain proceedings granting condemnation, the Lessee shall direct the Lessor and the Trustee in writing as to which of the ways specified in this Section the Lessee elects to have the net proceeds of the condemnation award applied. Any balance of the net proceeds of the award in such eminent domain proceedings not required to be applied for the purposes specified in subsections (a) or (b) above shall be deposited in the sinking fund held by the Trustee under the Indenture and applied to the repayment of the Bonds. The Lessor shall cooperate fully with the Lessee in the handling and conduct of any prospective or pending condemnation proceedings with respect to the Leased Premises or any part thereof and will to the extent it may lawfully do so permit the Lessee to litigate in any such proceedings in its own name or in the name and on behalf of the Lessor. In no event will the Lessor voluntarily settle or consent to the settlement of any prospective or pending condemnation proceedings with respect to the Leased Premises or any part thereof without the written consent of the Lessee, which consent shall not be unreasonably withheld. 9. General Covenant. The Lessee shall not assign this Lease or mortgage, pledge or sublet the Leased Premises herein described, except as provided in Section 6, without the written consent of the Lessor. The Lessee shall contract with the other parties pursuant to the Maintenance and Use Agreements to use and maintain the Leased Premises in accordance with the laws, regulations and ordinances of the United States of America, the State of Indiana, the City and all other proper governmental authorities. I0. Tax Covenants. In order to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes and as an inducement to purchasers of the Bonds, the Lessee and the Lessor represent, covenant and agree that neither the Lessor nor the Lessee will take any action or fail to take any action with 7 respect to the Bonds, this Lease or the Leased Premises that will result in the loss of the exclusion from gross income for federal tax purposes of interest on the Bonds under Section 103 of the Code, nor will they act in any other manner which will adversely affect such exclusion; and it will not make any investment or do any other act or thing during the period that the Bonds are outstanding which will cause any of the Bonds to be "arbitrage bonds" within the meaning of Section 143 of the Code. The covenants in this Section are based solely on current law in effect and in existence on the date of issuance of the Bonds. It shall not be an event of default under this Lease if interest on any 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 the Bonds. All officers, members, employees and agents of the Lessor and the Lessee are authorized to provide certifications of facts and estimates that are material to the reasonable expectations of the Lessor and the Lessee as of the date the Bonds are issued and to enter into covenants on behalf of the Lessor and the Lessee evidencing the Lessor's and the Lessee's commitments made herein. In particular, all or any members or officers of the Lessor and the Lessee are authorized to certify and enter into covenants regarding the facts and circumstances and reasonable expectations of the Lessor and the Lessee on the date the Bonds are issued and the commitments made by the Lessor and the Lessee herein regarding the amount and use of the proceeds of the Bonds. 1 1. Option to Renew. The Lessor hereby grants to the Lessee the right and option to renew this Lease for a further like or lesser term upon the same or like conditions as herein contained, and applicable to the portion of the premises for which the renewal applies, and the Lessee shall exercise this option by written notice to the Lessor and to the other parties to the Maintenance and Use Agreements at the addresses set forth in the respective Maintenance and Use Agreements given upon any rental payment date prior to the expiration of this Lease. 12. Option to Purchase. The Lessor hereby grants to the Lessee the right and option, on any rental payment date, upon sixty (60) days' written notice to the Lessor, to purchase the Leased Premises, or any portion thereof, at a price equal to the amount required to pay all indebtedness incurred on account of the Leased Premises, or such portion thereof (including indebtedness incurred for the refunding of that indebtedness), including all premiums payable on the redemption thereof and accrued and unpaid interest, and including the proportionate share of the expenses and charges of liquidation, if the Lessor is to be then liquidated. 111 no event, however, shall such purchase price exceed the capital actually invested in such property by the Lessor represented by outstanding securities or existing indebtedness plus the cost of transferring the property and liquidating the Lessor. The phrase "capital actually invested" as used herein shall be construed to include, but not by way of limitation, the following amounts expended by the Lessor in connection with the acquisition and financing of the Leased Premises: organization expenses, financing costs, carry charges, legal fees, architects' fees and reasonable costs and expenses incidental thereto. 8 Upon request of the Lessee made not less than sixty (60) days prior thereto, the Lessor agrees to furnish an itemized statement setting forth the amount required to be paid by the Lessee on the next rental payment date in order to purchase the Leased Premises in accordance with the preceding paragraph. Upon the exercise of the option to purchase granted herein, the Lessor will upon payment of the option price deliver, or cause to be delivered, to the Lessee documents conveying to the Lessee, or any entity (including the City and any other party to the Maintenance and Use Agreements) designated by the Lessee, all of the Lessor's title to the property being purchased, as such property then exists, subject to the following: (1) those liens and encumbrances (if any) to which title to the property was subject when conveyed to the Lessor; (ii) those liens and encumbrances created by the Lessee and to the creation or suffering of which the Lessee consented, and liens for taxes or special assessments not then delinquent; and (iii) those liens and encumbrances on its part contained in this Lease. In the event of purchase of the Leased Premises by the Lessee or conveyance of the Leased Premises to the Lessee or the Lessee's designee, the Lessee shall procure and pay for all surveys, title searches, abstracts, title policies and legal services that may be required, and shall furnish at the Lessee's expense all documentary stamps or tax payments required for the transfer of title. Nothing contained herein shall be construed to provide that the Lessee shall be under any obligation to purchase the Leased Premises, or under any obligation respecting the creditors, members or security holders of the Lessor. 13. Transfer to Lessee. If the Lessee has not exercised its option to renew in accordance with the provisions of Section 1 1, and has not exercised its option to purchase the Leased Premises, or any portion thereof. in accordance with the provisions of Section 12, and upon the full discharge and performance by the Lessee of its obligations under this Lease, the Leased Premises, or such portion thereof remaining, shall thereupon become the absolute property of the Lessee, subject to the limitations, if any, on the conveyance of the site for the Leased Premises to the Lessor and, upon the Lessee's request the Lessor shall execute proper instruments conveying to the Lessee, or to any entity (including the City and any other party to the Maintenance and Use Agreements) designated by the Lessee, all of Lessor's title to the Leased Premises, or such portion thereof. 14. Defaults. If the Lessee shall default (a) in the payment of any rentals or other sums payable to the Lessor hereunder, or in the payment of any other sum herein required to be paid for the Lessor; or (b) in the observance of any other covenant, agreement or condition hereof, and such default shall continue for ninety (90) days after written notice to correct such default; then, in any or either of such events, the Lessor may proceed to protect and enforce its rights by suit or suits in equity or at law in any court of competent jurisdiction, whether for specific performance of any covenant or agreement contained herein, or for the enforcement of any other appropriate legal or equitable remedy; or the Lessor, at its option, without further notice, may terminate the estate and interest of the Lessee hereunder, and it shall be lawful for the Lessor forthwith to resume possession of the Leased Premises and the Lessee covenants to surrender the 9 same forthwith upon demand. The Lessor shall simultaneously furnish to any other party to the Maintenance and Use Agreements, at their respective addresses set forth in the Maintenance and Use Agreements, a copy of any notice of default sent to the Lessee. The exercise by the Lessor of the above right to terminate this Lease shall not release the Lessee from the performance of any obligation hereof maturing prior to the Lessor's actual entry into possession. No waiver by the Lessor of any right to terminate this Lease upon any default shall operate to waive such right upon the same or other default subsequently occurring. 15. Notices. Whenever either party shall be required to give notice to the other under this Lease, it shall be sufficient service of such notice to deposit the same in the United States mail, in an envelope duly stamped, registered and addressed to the other party or parties at the following addresses: (a) to Lessor: City of Carmel Redevelopment Authority, Attention: President, One Civic Square, Cannel, Indiana 46032; (b) to Lessee: City of Carmel Redevelopment Commission, Attention: President, One Civic Square, Carmel, Indiana 46032. The Lessor, the Lessee and the Trustee may by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates, requests or other communications shall be sent. 16. Successors or Assigns. All covenants of this Lease, whether by the Lessor or the Lessee, shall be binding upon the successors and assigns of the respective parties hereto. 17. Construction of Covenants. The Lessor was organized for the purpose of acquiring, constructing, acquiring, equipping and renovating local public improvements and leasing the same to the Lessee under the provisions of the Act. All provisions herein contained shall be construed in accordance with the provisions of the Act, and to the extent of inconsistencies, if any, between the covenants and agreements in this Lease and the provisions of the Act, the Act shall be deemed to be controlling and binding upon the Lessor and the Lessee; provided, however, any amendment to the Act after the date hereof shall not have the effect of amending this Lease. 10 EXHIBIT A DESCRIPTION OF THE PROJECTS The Projects consist of the acquisition by the Authority of the Real Estate from the City, and the use by the City of the proceeds of such sale to finance the following projects in the City, which shall be constructed in the following order of priority unless a different order of priority is approved by the Common Council of the City: 1. The acquisition of Brookshire Golf Course by the direct retirement of outstanding bond anticipation notes of the Carmel Redevelopment District. ESTIMATED COST: $3,000,000 2. Improvements to the intersection of Keystone Avenue and 131" Street consisting of construction, inspection, utility relocation and land acquisition costs. ESTIMATED COST: $11,000,000 3. Drainage projects in the Village of Mt. Carmel and Chesterton. ESTIMATED COST: $2,000,000 4. Drainage projects in the Southwest Clay Township neighborhoods of Larkspur, Walnut Creek, Kings Mill, Bridleborne, Windemere, Crooked Stick and Crooked Stick West, to satisfy obligations under annexation agreement. ESTIMATED COST: $1,000,000 5. Multi -use path along 106` Street from Ditch Road to Michigan Road. ESTIMATED COST: $1,500,000 6. intersection improvements consisting of roundabouts at 106 Street and Ditch Road, 96" Street and Towne Road, and 106` Street and Shelbourne. ESTIMATED COST: $1,500,000 A -1 EXHIBIT B DESCRIPTION OF REAL ESTATE The Real Estate consists of a portion of the existing Keystone Avenue right -of -way between 96 Street and U.S. 31 in the City. This general description shall be replaced with formal legal description of the Real Estate when all of the Real Estate has been acquired by the Lessor. INDS01 [3DD 1 155303%2 B -1