REFUNDING ISSUE RATINGS: S&P: “AA+” Moody’s: “Aa2” Fitch: “AA+” BOOK-ENTRY ONLY: See “APPENDIX E—BOOK-ENTRY ONLY SYSTEM” See “RATINGS” herein In the opinion of Barnes & Thornburg LLP, Indianapolis, Indiana, under existing laws, interest on the Series 2015 A Bonds (as hereinafter defined) is excludable from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended, and in effect on the date of issuance of the Series 2015 A Bonds, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. Interest on the Series 2015 A Bonds is however taken into account in determining current earnings for purposes of computing the federal alternative minimum tax imposed on certain corporations. In the opinion of Barnes & Thornburg LLP, Indianapolis, Indiana, under existing laws, interest on the Series 20015 A Bonds is exempt from income taxation in the State of Indiana, in all respects except for the State (as defined herein) financial institutions tax. See “TAX MATTERS” and “APPENDIX G—FORM OF OPINION OF BOND COUNSEL.” $44,710,000 INDIANA FINANCE AUTHORITY Lease Appropriation Refunding Bonds (Convention Center Expansion Project), Series 2015 A Dated: Date of Delivery Due: As shown on the inside front cover This Official Statement has been prepared to provide information relating to the issuance by the Indiana Finance Authority (the “Finance Authority”) of its $44,710,000 Lease Appropriation Refunding Bonds (Convention Center Expansion Project), Series 2015 A (the “Series 2015 A Bonds”). The Bank of New York Mellon Trust Company, N.A. will serve as the trustee (the “Trustee”), paying agent (the “Paying Agent”) and registrar (the “Registrar”) for the Series 2015 A Bonds. The Series 2015 A Bonds are issued by the Finance Authority as fully registered bonds in denominations of $5,000 or any integral multiple thereof. The Series 2015 A Bonds will initially be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”), securities depository for the Series 2015 A Bonds. Purchases of the Series 2015 A Bonds are to be made in book‑entry form only. Purchasers will not receive certificates representing their beneficial ownership interests in the Series 2015 A Bonds. See “APPENDIX E— BOOK‑ENTRY ONLY SYSTEM.” Interest on the Series 2015 A Bonds will accrue from the date of their delivery, and will be payable on February 1 and August 1 of each year, commencing August 1, 2015, at the rates per annum set forth on the inside cover. Interest, together with the principal of and premium, if any, on the Series 2015 A Bonds will be paid directly to DTC by the Trustee, or its successor, as the Paying Agent for the Series 2015 A Bonds so long as DTC or its nominee is the registered owner of the Series 2015 A Bonds. See “DESCRIPTION OF SERIES 2015 A BONDS — General Description.” The Series 2015 A Bonds are issued by the Finance Authority pursuant to an Amended and Restated Trust Indenture, dated as of May 1, 2015, by and between the Finance Authority and the Trustee (the “Indenture”) for the principal purpose of providing funds to: (i) purchase the Promissory Note (Convention Center Expansion Project), Series 2015 A issued by the Indiana Stadium and Convention Building Authority (the “Building Authority”) in the aggregate principal amount of the Series 2015 A Bonds (the “Series 2015 A Convention Center Note”); (ii) currently refund a portion of the Finance Authority’s outstanding Lease Appropriation Bonds (Convention Center Expansion Project), Series 2008 A (the “Refunded Convention Center Bonds”); (iii) pay the termination value of the ISDA Master Agreement, dated as of December 13, 2005, as heretofore amended and supplemented through and including August 20, 2008, between the Finance Authority and Goldman Sachs Bank USA (successor to Goldman Sachs Capital Markets, L.P.); and (iv) pay the cost of issuance of the Series 2015 A Bonds, the cost of refunding the Refunded Convention Center Bonds and other expenses related thereto. The Series 2015 A Bonds are secured by payments made by the Building Authority under the Series 2015 A Convention Center Note, which note is secured by payments made under the Lease and the Sublease from the Local Revenues (each as defined herein) pledged therefor and appropriations to the extent made by the General Assembly of the State of Indiana (the “State”). See “INTRODUCTION — Plan of Finance” and “— Security and Sources of Payment for Series 2015 A Bonds” and “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS.” See also, “SOURCES AND USES OF FUNDS.” The Series 2015 A Bonds are subject to optional, mandatory sinking fund or extraordinary mandatory redemption prior to maturity as described in “DESCRIPTION OF SERIES 2015 A BONDS — Redemption Prior to Maturity.” THE SERIES 2015 A BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE FINANCE AUTHORITY, PAYABLE SOLELY FROM AND SECURED EXCLUSIVELY BY A PLEDGE TO THE TRUSTEE OF THE TRUST ESTATE (AS DEFINED HEREIN), INCLUDING PAYMENTS MADE BY THE BUILDING AUTHORITY ON THE SERIES 2015 A CONVENTION CENTER NOTE, ALL MONEYS OBLIGATED TO BE PAID TO THE TRUSTEE PURSUANT TO THE REVENUE DEPOSIT AGREEMENT (AS DEFINED HEREIN), THE LEASE AND THE SUBLEASE, AND THE EARNINGS THEREON AND ALL PROCEEDS THEREOF. NEITHER THE FINANCE AUTHORITY, THE BUILDING AUTHORITY, THE TRUSTEE NOR ANY HOLDER OF THE SERIES 2015 A BONDS MAY COMPEL FUNDS TO BE APPROPRIATED OR TO BE MADE AVAILABLE FOR SUCH PURPOSE. THE SERIES 2015 A BONDS DO NOT CONSTITUTE AN INDEBTEDNESS, LIABILITY OR LOAN OF THE CREDIT OF THE FINANCE AUTHORITY, THE BUILDING AUTHORITY, THE STATE OF INDIANA (THE “STATE”) OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OR APPLICATION OF ANY CONSTITUTIONAL PROVISION OR LIMITATION, OR A PLEDGE OF THE FAITH, CREDIT OR TAXING POWER OF THE FINANCE AUTHORITY, THE BUILDING AUTHORITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF. NEITHER THE FINANCE AUTHORITY NOR THE BUILDING AUTHORITY HAS THE POWER OF TAXATION. SEE “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS.” This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire Official Statement, including the cover page, introductory pages and appendices, to obtain information essential to the making of an informed investment decision. The Series 2015 A Bonds are being offered when, as and if issued by the Finance Authority and received by the Underwriters, subject to prior sale, to withdrawal or modification of the offer without notice, and to the approval of legality by Barnes & Thornburg LLP, Indianapolis, Indiana, Bond Counsel to the Finance Authority. Certain legal matters will be passed on for the Underwriters by Krieg DeVault LLP, Indianapolis, Indiana. It is expected that the Series 2015 A Bonds in definitive form will be available for delivery through DTC in New York, New York on or about May 21, 2015. GOLDMAN, SACHS & CO. BMO Capital Markets BofA Merrill Lynch J.P. MORGAN Citigroup US Bancorp The date of this Official Statement is May 7, 2015 Wells Fargo Securities $44,710,000 INDIANA FINANCE AUTHORITY Lease Appropriation Refunding Bonds (Convention Center Expansion Project), Series 2015 A MATURITY SCHEDULE Serial Bonds Maturity 2/1/2016 2/1/2017 2/1/2018 2/1/2019 2/1/2020 2/1/2021 2/1/2022 2/1/2023 2/1/2024 2/1/2025 2/1/2026 2/1/2027 2/1/2028 2/1/2029 2/1/2030 2/1/2031 2/1/2032 2/1/2033 2/1/2034 2/1/2035 Principal Amount $ 630,000 350,000 1,965,000 695,000 725,000 770,000 850,000 895,000 945,000 1,015,000 1,070,000 1,120,000 2,005,000 2,500,000 1,780,000 1,765,000 1,860,000 1,950,000 2,055,000 2,165,000 Interest Rate 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% 5.000% Yield 0.250% 0.750% 1.160% 1.400% 1.650% 1.900% 2.130% 2.340% 2.550% 2.690% 2.850%(2) 3.100%(2) 3.230%(2) 3.340%(2) 3.410%(2) 3.490%(2) 3.580%(2) 3.620%(2) 3.660%(2) 3.700%(2) CUSIP(1) 45506DRY3 45506DRZ0 45506DSA4 45506DSB2 45506DSC0 45506DSD8 45506DSE6 45506DSF3 45506DSG1 45506DSH9 45506DSJ5 45506DSK2 45506DSL0 45506DSM8 45506DSN6 45506DSP1 45506DSQ9 45506DSR7 45506DSS5 45506DST3 Term Bonds $17,600,000 4.000% Term Bonds due 02/01/2037 Priced to Yield 4.125% CUSIP(1) 45506DSU0 ___________________ (1) (2) The CUSIP number listed above is being provided solely for the convenience of the holders of the Series 2015 A Bonds only, and the Finance Authority does not make any representations with respect to such number or undertake any responsibility for its accuracy. The CUSIP number is subject to being changed after the issuance of the Series 2015 A Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of the Series 2015 A Bonds. Yield to first call date of August 1, 2025. INDIANA FINANCE AUTHORITY MEMBERS STATE BUDGET DIRECTOR DESIGNEE – CHRISTOPHER D. ATKINS, CHAIRMAN TREASURER OF STATE – KELLY MITCHELL, VICE CHAIRMAN OWEN B. MELTON, JR. HARRY F. MCNAUGHT, JR. KERRY M. STEMLER _________ DENNIS L. BASSETT, Public Finance Director INDIANA STADIUM AND CONVENTION BUILDING AUTHORITY INDIANA OFFICE OF MANAGEMENT AND BUDGET Executive Director John P. Klipsch Director Christopher D. Atkins TRUSTEE The Bank of New York Mellon Trust Company, N.A. BOND COUNSEL Barnes & Thornburg LLP Indianapolis, Indiana UNDERWRITERS’ COUNSEL Krieg DeVault LLP Indianapolis, Indiana REGARDING USE OF THIS OFFICIAL STATEMENT No dealer, broker, salesman or other person has been authorized by the Finance Authority or the Underwriters to give any information or to make any representations other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by either the Finance Authority or the Underwriters. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, and there shall not be any offer or sale of any of the Series 2015 A Bonds, by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth in this Official Statement has been obtained from the State of Indiana, the Finance Authority and other sources which are believed to be reliable. The information, estimates and expressions of opinion in this Official Statement are subject to change without notice, and neither the delivery of this Official Statement nor any sale of the Series 2015 A Bonds shall, under any circumstance, create any implication that there has been no change in the affairs of the Finance Authority, the State of Indiana or any other person described in this Official Statement subsequent to the date as of which such information is presented. THE SERIES 2015 A BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE STATE OF INDIANA, THE FINANCE AUTHORITY AND THE TERMS OF THE OFFERING, INCLUDING THE MERIT AND RISK INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE COVER PAGE HEREOF CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. THE COVER PAGE IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT INCLUDING ALL APPENDICES ATTACHED HERETO TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION. APPENDIX C-1 CONTAINS DEFINITIONS USED IN THIS OFFICIAL STATEMENT. The Finance Authority and the State of Indiana will enter into a Continuing Disclosure Agreement, and the Board (as defined herein) will enter into a Continuing Disclosure Agreement. See “CONTINUING DISCLOSURE” and “APPENDIX D – 1 –FORM OF STATE CONTINUING DISCLOSURE AGREEMENT” and “APPENDIX D – 2 – FORM OF BOARD CONTINUING DISCLOSURE AGREEMENT.” The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their respective responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. TABLE OF CONTENTS Page INTRODUCTION ......................................................................................................................................................... 1 Plan of Finance ......................................................................................................................................................... 1 Convention Center Expansion Project ...................................................................................................................... 3 Series 2015 A Bonds................................................................................................................................................. 4 Outstanding Stadium Bonds and Stadium Notes ...................................................................................................... 5 Security and Sources of Payment for Series 2015 A Bonds ..................................................................................... 5 Liquidity Facility and Continuing Covenant Agreement for Certain Outstanding Parity Bonds.............................. 7 Official Statement ..................................................................................................................................................... 7 SOURCES AND USES OF FUNDS ............................................................................................................................. 8 SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS ........................................................... 9 General Description .................................................................................................................................................. 9 Subsidy Payments ................................................................................................................................................... 10 Lease Rental Payments ........................................................................................................................................... 11 Sublease Rental Payments ...................................................................................................................................... 11 Debt Service Reserve Account ............................................................................................................................... 12 Moral Obligation (State Appropriations Mechanism) ............................................................................................ 12 Covenants of Board ................................................................................................................................................ 13 Revenue Deposit Agreement .................................................................................................................................. 13 Hedging Program .................................................................................................................................................... 15 No Mortgage ........................................................................................................................................................... 16 Enforceability of Rights, Remedies ........................................................................................................................ 17 DESCRIPTION OF SERIES 2015 A BONDS ............................................................................................................ 17 General Description ................................................................................................................................................ 17 Redemption Prior to Maturity ................................................................................................................................. 17 Redemption at Election or Direction of Finance Authority .................................................................................... 18 Selection of Series 2015 A Bonds for Redemption ................................................................................................ 18 Redemption Payments ............................................................................................................................................ 19 Notice of Redemption ............................................................................................................................................. 19 Account. .................................................................................................................................................................. 19 Transfer and Exchange ........................................................................................................................................... 19 Additional Bonds .................................................................................................................................................... 20 LIQUIDITY FACILITY AND CONTINUING COVENANT AGREEMENT FOR CERTAIN OUTSTANDING PARITY BONDS ........................................................................................................................... 23 General.................................................................................................................................................................... 23 Continuing Covenant Agreement ........................................................................................................................... 24 INDIANA FINANCE AUTHORITY .......................................................................................................................... 24 General.................................................................................................................................................................... 24 Organization, Membership ..................................................................................................................................... 24 OTHER PARTIES TO FINANCING.......................................................................................................................... 25 Indiana Stadium and Convention Building Authority............................................................................................. 25 Indiana Office of Management and Budget ............................................................................................................ 26 Capital Improvement Board of Managers of Marion County ................................................................................. 26 LITIGATION .............................................................................................................................................................. 27 TAX MATTERS ......................................................................................................................................................... 28 ORIGINAL ISSUE DISCOUNT ................................................................................................................................. 29 AMORTIZABLE BOND PREMIUM ......................................................................................................................... 29 ENFORCEABILITY OF REMEDIES ........................................................................................................................ 30 APPROVAL OF LEGAL PROCEEDINGS................................................................................................................ 30 UNDERWRITING ...................................................................................................................................................... 30 RELATED PARTIES .................................................................................................................................................. 32 RATINGS .................................................................................................................................................................... 32 VERIFICATION OF MATHEMATICAL COMPUTATIONS .................................................................................. 32 i CONTINUING DISCLOSURE................................................................................................................................... 32 FINANCIAL ADVISOR ............................................................................................................................................. 34 MISCELLANEOUS .................................................................................................................................................... 34 APPENDIX A APPENDIX B APPENDIX C – 1 APPENDIX C – 2 FINANCIAL AND ECONOMIC STATEMENT FOR STATE OF INDIANA ............................... A-1 SUMMARY OF LOCAL REVENUES .............................................................................................B-1 SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS.......................................................C-1 SUMMARY OF CERTAIN PROVISIONS OF LIQUIDITY FACILITY AND CONTINUING COVENANT AGREEMENT ..................................................................................C-2 APPENDIX D – 1 FORM OF STATE CONTINUING DISCLOSURE AGREEMENT ............................................... D-1 APPENDIX D – 2 FORM OF BOARD CONTINUING DISCLOSURE AGREEMENT ............................................. D-2 APPENDIX E BOOK-ENTRY ONLY SYSTEM ..................................................................................................... E-1 APPENDIX F DEBT SERVICE RELATED TO CERTAIN BOARD OBLIGATIONS ......................................... F-1 APPENDIX G FORM OF OPINION OF BOND COUNSEL ................................................................................. .G-1 ii $44,710,000 INDIANA FINANCE AUTHORITY Lease Appropriation Refunding Bonds (Convention Center Expansion Project), Series 2015 A Bonds INTRODUCTION The purpose of this Official Statement (including the cover page, introductory pages and appendices) is to provide information regarding the Indiana Finance Authority (the “Finance Authority”) and the offering of its $44,710,000 Lease Appropriation Refunding Bonds (Convention Center Expansion Project), Series 2015 A (the “Series 2015 A Bonds”). The Series 2015 A Bonds are being issued pursuant to (1) Indiana Code 4-4-10.9 and 11 (the “Finance Authority Act”), (2) the Indenture (as defined herein), and (3) a resolution adopted by the Finance Authority on February 19, 2015 (the “Resolution”). The Finance Authority Act empowers the Finance Authority to issue bonds under terms and conditions determined by the Finance Authority and to use the proceeds of the bonds to acquire obligations issued by any entity authorized to acquire, finance, construct or lease capital improvements under Indiana Code 5-1-17 (the “Building Authority Act”), which created the Indiana Stadium and Convention Building Authority (the “Building Authority”), and to refund bonds issued for such purposes. See “INDIANA FINANCE AUTHORITY.” The offering of the Series 20015 A Bonds is made only by way of this Official Statement, which supersedes any other information or materials used in connection with the offer or sale of the Series 2015 A Bonds. The following introductory material is only a brief description of and is qualified by the more complete information contained throughout this Official Statement. A full review should be made of the entire Official Statement, including the Appendices hereto. The detachment or other use of this “INTRODUCTION” without the entire Official Statement, including the cover page, insider cover page, other preliminary pages and appendices, is unauthorized. Plan of Finance Convention Center Bonds. The Finance Authority has previously issued its Lease Appropriation Bonds (Convention Center Expansion Project), Series 2008, on August 20, 2008, in the aggregate principal amount of $120,000,000, all of which are currently outstanding, such bonds having been issued in two separate series, the Series 2008 A-1 Variable Rate Demand Securities in the principal amount of $60,000,000 (the “Series 2008 A-1 Convention Center Bonds”) and the Series 2008 A-2 Variable Rate Demand Securities in the aggregate principal amount of $60,000,000 (the “Series 2008 A-2 Convention Center Bonds” and together with the Series 2008 A-1 Convention Center Bonds, the “Series 2008 A Convention Center Bonds”), its Lease Appropriation Bonds (Convention Center Expansion Project), Series 2009 A, dated June 29, 2009, in the aggregate principal amount of $17,665,000, of which $16,665,000 are currently outstanding (the “Series 2009 A Convention Center Bonds”), and its Lease Appropriation Bonds (Convention Center Expansion Project), Series 2009 B (Build America Bonds Direct Payment - Federally Taxable), dated June 29, 2009, in the aggregate principal amount of $191,565,000, all of which are currently outstanding (the “Series 2009 B Convention Center Bonds,” and together with the Series 2008 A Convention Center Bonds and the Series 2009 A Convention Center Bonds, collectively the “Original Convention Center Bonds”), pursuant to the Finance Authority Act and an Amended and Restated Trust Indenture, dated as of September 1, 2013 (the “Prior Convention Center Indenture”), by the between the Finance Authority and The Bank of New York Mellon Trust Company, N.A. Convention Center Notes. The Original Convention Center Bonds were issued for the purpose of acquiring the Promissory Note (Convention Center Expansion Project), Series 2008 A, dated August 20, 2008 (the “Series 2008 A Convention Center Note”), issued by the Building Authority in the aggregate principal amount of $120,000,000, all of which is currently outstanding, the Promissory Note (Convention Center Expansion Project), Series 2009 A, dated June 29, 2009 (the “Series 2009 A Convention Center Note”), issued by the Building Authority in the aggregate principal amount of $17,665,000, of which $16,665,000 is currently outstanding, and the Promissory Note (Convention Center Expansion Project), Series 2009 B, dated June 29, 2009 (the “Series 2009 B 1 Convention Center Note,” and together with the Series 2008 A Convention Center Note and the Series 2009 A Convention Center Note, the “Original Convention Center Notes”), issued by the Building Authority in the aggregate principal amount of $191,565,000, all of which is currently outstanding, pursuant to the Building Authority Act, the Amended and Restated Purchase Contract, dated June 10, 2009 (the “Purchase Contract”), between the Finance Authority and the Building Authority, and the Loan Agreement, dated as of August 1, 2008, as amended and supplemented by the First Supplemental Loan Agreement, dated as of June 1, 2009, the Second Supplemental and Amendatory Loan Agreement, dated as of September 1, 2010, and the Third Supplemental Loan Agreement, dated as of May 1, 2015 (collectively, the “Loan Agreement”), each between the Finance Authority and the Building Authority, for the purpose of providing loans to the Building Authority, which have been used, together with other available funds, to pay a portion of the costs of the Convention Center Expansion Project (as defined herein). Series 2015 A Bonds. The Series 2015 A Bonds are being issued pursuant to an Amended and Restated Trust Indenture between the Finance Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), dated as of May 1, 2015, which amends, restates and supersedes in its entirety the Prior Convention Center Indenture (as amended, restated and superseded, the “Indenture”) for the principal purpose of providing funds to: (i) purchase the Promissory Note (Convention Center Expansion Project), Series 2015 A issued by the Building Authority in the aggregate principal amount of the Series 2015 A Bonds (the “Series 2015 A Convention Center Note,” and together with the unrefunded portion of the Series 2008 A Convention Center Note, the Series 2009 A Convention Center Note and the Series 2009 B Convention Center Note, the “Convention Center Notes”); (ii) currently refund a portion of the Series 2008 A-1 Convention Center Bonds and a portion of the Series 2008 A-2 Convention Center Bonds (the “Refunded Convention Center Bonds,” with the then remaining outstanding Original Convention Center Bonds, together with the Series 2015 A Bonds, being the “Convention Center Bonds”); (iii) pay the $34,700,000 termination value of the transaction evidenced by a Confirmation governed by and subject to ISDA Master Agreement, dated as of December 13, 2005, as heretofore amended and supplemented through and including August 20, 2008 (the “Convention Center Swap Agreement”), between the Finance Authority and Goldman Sachs Bank USA (successor to Goldman Sachs Capital Markets, L.P.); and (iv) pay the cost of issuance of the Series 2015 A Bonds, the cost of refunding the Refunded Convention Center Bonds and other expenses related thereto. Series 2015 A Convention Center Note. The Series 2015 A Convention Center Note is being issued by the Building Authority pursuant to the Building Authority Act, the Purchase Contract and the Loan Agreement. The Finance Authority will loan the proceeds of the Series 2015 A Bonds to the Building Authority pursuant to the Loan Agreement and in consideration of the loan of the proceeds of the Series 2015 A Bonds, the Building Authority will issue to the Finance Authority the Series 2015 A Convention Center Note as security for and to evidence such loan. The Building Authority will use the proceeds of the Series 2015 A Convention Center Note to prepay $31,160,000 of the outstanding Series 2008 A Convention Center Note, thereby providing the Finance Authority with funds, together with other available funds, to finance the costs of the current refunding of the Refunded Convention Center Bonds, to pay the $34,700,000 termination value of the Convention Center Swap Agreement and to pay the cost of issuance of the Series 2015 A Bonds and other expenses related thereto. Refinancing of Series 2008 A Bonds. The moneys received by the Finance Authority from the prepayment by the Building Authority of its Series 2008 A Convention Center Note will be applied by the Finance Authority, together with other funds of the Finance Authority available for such purpose, to refund $20,925,000 of the Series 2008 A-1 Bonds (the “Refunded Series 2008 A-1 Bonds”) presently outstanding in the aggregate principal amount of $60,000,000, thereby leaving $39,075,000 outstanding upon the issuance of the Series 2015 A Bonds, and $10,235,000 of the Series 2008 A-2 Bonds (the “Refunded Series 2008 A-2 Bonds”), presently outstanding in the aggregate principal amount of $60,000,000, thereby leaving $49,765,000 outstanding upon the issuance of the Series 2015 A Bonds. A portion of the proceeds of the Series 2015 A Bonds, together with other funds of the Finance Authority available for such purpose, will be deposited or transferred into the Redemption Account of the General Fund under the Indenture in a gross amount sufficient to pay the principal of and interest on the Refunded Series 2008 A-1 Bonds on the date of issuance of the Series 2015 A Bonds. Upon such payment, the Refunded Series 2008 A-1 Bonds will no longer be outstanding under the Prior Convention Center Indenture. 2 A portion of the proceeds of the Series 2015 A Bonds will be deposited into an escrow fund (the “Escrow Fund”) established under an Escrow Deposit Agreement, dated as of May 1, 2015 (the “Escrow Deposit Agreement”) to be entered into among the Finance Authority, The Bank of New York Mellon Trust Company, N.A., as escrow trustee (the “Escrow Trustee”) and the Trustee, and will upon deposit, remain uninvested and be in a gross amount sufficient to pay when due the principal of and interest on the Refunded Series 2008 A-2 Bonds to and including the date of redemption of the Refunded Series 2008 A-2 Bonds, as established in the verification report of Crowe Horwath LLP. Upon the deposit of such funds in the Escrow Fund and compliance with the procedures set forth in the Prior Convention Center Indenture regarding the discharge thereof, the Refunded Series 2008 A-2 Bonds will be defeased and will no longer be outstanding under the Prior Convention Center Indenture. Amounts on deposit in the Escrow Fund will not be available to pay the principal of or interest on the Series 2015 A Bonds. See “VERIFICATION OF MATHEMATICAL COMPUTATIONS.” The Finance Authority will use the proceeds of Series 2015 A Bonds as set forth in “SOURCES AND USES OF FUNDS” herein. Convention Center Expansion Project The Building Authority utilized the proceeds of the Original Convention Center Bonds loaned to it pursuant to the Loan Agreement and the Original Convention Center Notes, to expand the existing Indianapolis Convention Center. See “OTHER PARTIES TO FINANCING—Indiana Stadium and Convention Building Authority.” This expansion included the demolition of the existing RCA Dome, the acquisition and construction of 254,000 square feet of additional exhibit space, 63,000 square feet of meeting rooms, 103,000 square feet of pre-function and registration space and a three-story glass enclosed entry pavilion at the intersection of Capitol and Georgia Streets, as well as an enclosed connector between such facilities and the Stadium Project (as defined herein) (the “Convention Center Expansion Project”). Demolition and other related activity began in early 2008 and construction of the Convention Center Expansion Project itself commenced in the fall of 2008 and completion of demolition and completion of construction occurred in December 2010. The Convention Center Expansion Project was designed to keep Indianapolis competitive among its peer group of cities as a major site for conventions, exhibitions and other types of meetings. The expansion, coupled with the Stadium Project, has increased the amount of space for convention/meeting uses from approximately 725,000 square feet to more than 1,200,000 square feet. The Convention Center Expansion Project raised Indianapolis from approximately 33rd to 16th place among America’s major convention cities in meeting space available and second only to Atlanta among its customary 13 peer cities. In addition, since 2008 the number of national convention events held in Indianapolis has increased from 42 events to 115 events in 2013 with the number of national convention event days increasing from 130 to 304 and attendance for national convention business increasing from 317,815 to 509,242 during this same time frame. (Remainder of Page Intentionally Left Blank) 3 INDIANA CONVENTION CENTER – OLD VS. NEW Old Space New Space Net Total 310,370 S.F. 96,566 S.F. 406,926 S.F. 254,000 S.F. 183,000 S.F. 437,000 S.F. 564,370 S.F. 183,000 S.F. (1) 747,370 S.F. MEETING ROOMS Convention Center Dome/Stadium TOTAL 52,966 S.F. 28,853 S.F. 81,819 S.F. 63,000 S.F. 13,000 S.F. 76,000 S.F. 115,966 S.F. 13,000 S.F. 128,966 S.F. BALLROOMS 66,761 S.F. 0.S.F. 66,761 S.F. PRE-FUNCTION SPACE Convention Center Dome/Stadium Exhibition Plaza Sub-Total 147,460 S.F. 21,425 S.F. 0 S.F. 168,885 S.F. 103,000 S.F. 15,000 S.F. 31,000 S.F. 149,000 S.F. 250,460 S.F. 15,000 S.F. 31,000 S.F. 296,460 S.F. TOTAL 724,391 S.F. 662,000 S.F. 1,239,557 S.F. EXHIBITION SPACE Convention Center Dome/Stadium Sub-Total (1) The RCA Dome was demolished in the fall of 2008. The space formerly utilized by the RCA Dome has been converted to exhibition space, meeting rooms and pre-function and registration space as indicated in the New Space column. Accordingly, this space in the Old Space column is not included in the Net Total column, but instead with respect to the space formerly occupied by the RCA Dome, the Net Total column reflects only the new exhibition space, meeting rooms and pre-function and registration space formerly occupied by the RCA Dome. In addition to financing the acquisition and construction of the Convention Center Expansion Project, the Building Authority undertook the development and construction of a 63,000 seat multi-purpose stadium with a retractable roof (the “Stadium Project”) which was substantially completed in August, 2008. The Stadium Project, which is also known as the Lucas Oil Stadium, is home to the National Football League’s Indianapolis Colts and is also used for the National Collegiate Athletic Association’s Basketball Tournament, other high school and collegiate sporting events and concerts, family shows and other events open to the general public. The Convention Center Expansion Project is located on the site of the former RCA Dome which was also the former home of the Indianapolis Colts. The financing program for the Convention Center Expansion Project and the Stadium Project consisted of multiple separate series of bonds totaling approximately $995,755,000. Of this amount, $666,525,000 of those bonds were issued to finance the acquisition and construction of the Stadium Project and $329,230,000 were issued to finance the acquisition and construction of the Convention Center Expansion Project. Series 2015 A Bonds The Series 2015 A Bonds are being issued by the Finance Authority as fully registered bonds in denominations of $5,000 or any integral multiple thereof. The Series 2015 A Bonds will initially be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”), securities depository for the Series 2015 A Bonds. Purchases of the Series 2015 A Bonds are to be made in book-entry form only. Purchasers will not receive certificates representing their beneficial ownership interests in the Series 2015 A Bonds. See “APPENDIX E — BOOK-ENTRY ONLY SYSTEM.” Interest on the Series 2015 A Bonds will accrue 4 from the date of their delivery, and will be payable on February 1 and August 1 of each year, commencing August 1, 2015 (each an “Interest Payment Date”), at the rates per annum set forth on the inside front cover. Interest, together with the principal of the Series 2015 A Bonds will be paid directly to DTC by the Trustee, or its successor, as the Paying Agent for the Series 2015 A Bonds so long as DTC or its nominee is the registered owner of the Series 2015 A Bonds. See “DESCRIPTION OF SERIES 2015 A BONDS.” The Series 2015 A Bonds are subject to optional, mandatory sinking fund or extraordinary mandatory redemption prior to maturity as described in “DESCRIPTION OF SERIES 2015 A BONDS — Redemption Prior to Maturity.” Outstanding Stadium Bonds and Stadium Notes The Finance Authority issued its Lease Appropriation Bonds (Stadium Project), Series 2005 A, on October 13, 2005 in the aggregate principal amount of $400,000,000, all of which are currently outstanding (the “Series 2005 A Stadium Bonds”), its Lease Appropriation Bonds (Stadium Project), Series 2007 A, on March 28, 2007, in the aggregate principal amount of $211,525,000, all of which are currently outstanding (the “Series 2007 A Stadium Bonds”), and its Lease Appropriation Bonds (Stadium Project), Series 2008 A, on July 24, 2008, in the aggregate principal amount of $55,000,000, of which $35,325,000 are currently outstanding (the “Series 2008 A Stadium Bonds,” and together with the Series 2005 A Stadium Bonds and the Series 2007 A Stadium Bonds, the “Stadium Bonds”) pursuant to an Amended and Restated Trust Indenture between the Finance Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Stadium Trustee”), dated as of September 1, 2013 (the “Prior Stadium Indenture”), as amended, restated and superseded by the Amended and Restated Trust Indenture, dated as of May 1, 2015, each between the Finance Authority and The Bank of New York Mellon Trust Company, N.A. (the Prior Stadium Indenture as amended, restated and superseded, the “Stadium Indenture”). In connection therewith, the Finance Authority loaned the proceeds of the Stadium Bonds to the Building Authority pursuant to a Loan Agreement between the Finance Authority and the Building Authority, dated as of October 1, 2005, as amended and supplemented by the First Supplemental Loan Agreement, dated as of March 1, 2007, the Second Supplemental Loan Agreement, dated as of July 1, 2008, the Third Supplemental and Amendatory Loan Agreement, dated as of September 1, 2010 and the Fourth Supplemental Loan Agreement, dated as of May 1, 2015 (collectively, the “Stadium Loan Agreement”), for the purpose of financing the costs of the Stadium Project. In consideration of the loan of the proceeds of the Stadium Bonds, the Building Authority issued to the Finance Authority its Promissory Note (Stadium Project), Series 2005 A (the “Series 2005 A Stadium Note”), its Promissory Note (Stadium Project), Series 2007 A (the “Series 2007 A Stadium Note”), and its Promissory Note (Stadium Project), Series 2008 A (the “Series 2008 A Stadium Note,” and together with the 2005 A Stadium Note and the 2007 A Stadium Note, the “Stadium Notes”). The Convention Center Bonds are not, however, on parity with and are not entitled to equal and ratable security with the Stadium Bonds and the Convention Center Notes are not, however, on parity with and are not entitled to equal and ratable security with the Stadium Notes. See “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS” Security and Sources of Payment for Series 2015 A Bonds The Series 2015 A Bonds are special, limited obligations of the Finance Authority, payable solely from and secured exclusively by a pledge to the Trustee of the Trust Estate (as defined herein), which includes payments made by the Building Authority on the Series 2015 A Convention Center Note, all moneys obligated to be paid to the Trustee pursuant to the Revenue Deposit Agreement (as defined herein), the Lease and the Sublease (each as defined herein), and the earnings thereon and all the proceeds thereof. The Series 2015 A Bonds are on parity with the Series 2009 A Bonds, the Series 2009 B Bonds and, upon the date of issuance of the Series 2015 A Bonds, the then remaining outstanding Series 2008 A-1 and Series 2008 A-2 Convention Center Bonds, equally and ratably secured by the Trust Estate. See “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS.” The Finance Authority designated the Series 2009 B Convention Center Bonds as “Build America Bonds” for purposes of the America Recovery and Reinvestment Act of 2009 (the “Recovery Act”). The Recovery Act authorized the Finance Authority to issue taxable bonds known as “Build America Bonds” to finance capital expenditures for which it could issue tax-exempt bonds and to elect to receive a payment (the “Subsidy Payments”) from the United States Treasury, contemporaneously with each interest payment date under such Bonds, equal to 35% of the interest payable on such Bonds on such date. Pursuant to the Indenture, the Finance Authority has 5 designated the Subsidy Payments as a portion of the “Revenues” which are pledged to and constitute a part of the “Trust Estate” for the payment of the Convention Center Bonds. The Budget Control Act (as defined herein) has effected a reduction in these Subsidy Payments as more fully set forth herein. See “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS — Subsidy Payments.” Pursuant to the Indenture, the Finance Authority may issue Additional Bonds (as defined herein) on parity with the Series 2015 A Bonds, the Series 2009 A Convention Center Bonds, the Series 2009 B Convention Center Bonds, the Series 2008 A-1 Convention Center Bonds and the Series 2008 A-2 Convention Center Bonds (such Additional Bonds, together with the Series 2015 A Bonds, the Series 2009 A Convention Center Bonds, the Series 2009 B Convention Center Bonds, the Series 2008 A-1 Convention Center Bonds and the Series 2008 A-2 Convention Center Bonds, the “Bonds”) for the purpose of purchasing Additional Building Authority Notes (as defined herein) issued by the Building Authority to the Finance Authority for the purpose of making loans to the Building Authority pursuant to the Loan Agreement to pay the costs of the Convention Center Expansion Project or for the refunding of such Bonds. Each Additional Building Authority Note must be payable in full from an Obligation (as defined in the Revenue Deposit Agreement) issued by the Board and from the Lease. See “DESCRIPTION OF SERIES 2015 A BONDS — Additional Bonds.” In connection with the issuance of the Convention Center Bonds, the Building Authority entered into a Lease of the Convention Center Expansion Project with the Indiana Office of Management and Budget (the “OMB”) who, in turn, has entered into a Sublease of the Convention Center Expansion Project with the Capital Improvement Board of Managers of Marion County (the “Board”). Payment of rentals under the Lease and the Sublease serve as security for payments due by the Building Authority to the Finance Authority on the Series 2015 A Convention Center Note. See “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS.” See also, “APPENDIX C-1–SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS – THE LEASE” and “– THE SUBLEASE.” Payment of rentals under the Lease are payable from (a) moneys appropriated by the General Assembly of the State (as defined herein) (the “General Assembly”) at the request of OMB on a biennial basis and (b) rental payments received by OMB from the Board pursuant to the Sublease. Rental payments received by OMB from the Board under the Sublease will act as a credit for rental payments due the Building Authority from OMB under the Lease. Under the terms of the Sublease and the Stadium Sublease (as defined herein), and pursuant to the terms of the Revenue Deposit Agreement, rental payments required to be paid by the Board to the OMB will be made from (1) the 2005 New Excise Tax Revenues, (2) PSDA Revenues, (3) certain Fees and (4) all other Revenues (each as defined in “APPENDIX B – SUMMARY OF LOCAL REVENUES”) pledged under the Revenue Deposit Agreement to the Deposit Trustee (as defined herein) (collectively, the “Local Revenues”). The Local Revenues will be deposited in the Stadium and Convention Special Fund (as defined herein) held by the Deposit Trustee. The Deposit Trustee has covenanted to transfer to the Trustee such amounts requested by the Trustee to make the required lease rental payments. Under the Revenue Deposit Agreement, the Reserve Account (as defined herein) was established to secure the lease rental payments by the Board under the Sublease and the Stadium Sublease. The Finance Authority, the Building Authority and the OMB have agreed in the Revenue Deposit Agreement that payment by the Deposit Trustee to the Trustee for the purpose of paying sublease rental payments under the Sublease and the Stadium Sublease will constitute payment of lease rentals under the Lease and the Stadium Lease (as defined herein), respectively. Any such payments with respect to the Sublease and the Stadium Sublease will also be deemed to constitute payment of amounts due under the Convention Center Notes and the Stadium Notes, respectively. See “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS” and “APPENDIX B – SUMMARY OF LOCAL REVENUES.” The Local Revenues have not been pledged for the payment of principal of or interest on the Series 2015 A Bonds. Such Local Revenues have been pledged for the payment of rental under the Sublease, the Lease, the Stadium Sublease and the Stadium Lease and, upon collection, are to be paid to the Deposit Trustee under the Revenue Deposit Agreement to be used for payment of the principal of and interest on the Convention Center Bonds and the Stadium Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS” and “APPENDIX B – SUMMARY OF LOCAL REVENUES.” 6 The Series 2015 A Bonds do not constitute an indebtedness, liability or loan of the credit of the Building Authority, the State of Indiana (the “State”) or any political subdivision thereof within the meaning or application of any constitutional provision or limitation, or a pledge of the faith, credit or taxing power of the Building Authority, the State or any political subdivision thereof. Neither the Finance Authority nor the Building Authority has the power of taxation. See “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS.” The Indenture creates a Reserve Fund (as defined herein) which serves as security for the Convention Center Bonds, but only to the extent of any insufficiency in the General Fund with which to pay the principal of and interest on the Convention Center Bonds. The Debt Service Reserve Requirement shall be equal to 35% of the maximum semi-annual interest requirements on the Series 2009 B Bonds; provided, however, that on and after any date on which the Trustee has received a Rating Confirmation Notice (as defined herein) from each Rating Agency (as defined herein) then rating the Convention Center Bonds, the Debt Service Reserve Requirement shall be equal to zero. As of the date hereof, the Debt Service Reserve Requirement is equal to $2,211,234.80 and the amount on deposit in the Debt Service Reserve Account (as defined herein) is at least equal to the Debt Service Reserve Requirement. See SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS – Debt Service Reserve Account” and “APPENDIX C-1 – SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS – THE INDENTURE.” Liquidity Facility and Continuing Covenant Agreement for Certain Outstanding Parity Bonds The Series 2009 A Convention Center Bonds, the Series 2009 B Convention Center Bonds and, upon the date of issuance of the Series 2015 A Bonds, the then remaining outstanding Series 2008 A-1 Convention Center Bonds and Series 2008 A-2 Convention Center Bonds are on parity with the Series 2015 A Bonds and are equally and ratably secured by the Trust Estate. The then remaining outstanding Series 2008 A-1 Bonds have been directly purchased by a financial institution pursuant to a Continuing Covenant Agreement. The then remaining outstanding Series 2008 A-2 Bonds are secured by a Liquidity Facility. A more detailed description of the Liquidity Facility and the Continuing Covenant Agreement is set forth under “LIQUIDITY FACILITY AND CONTINUING COVENANT AGREEMENT FOR CERTAIN OUTSTANDING PARITY BONDS.” See also, “APPENDIX C-2 — SUMMARY OF CERTAIN PROVISIONS OF LIQUIDITY FACILITY AND CONTINUING COVENANT AGREEMENT.” Official Statement This Official Statement speaks only as of its date, and the information contained in this Official Statement is subject to change. This Introduction is only a brief description and a full review should be made of this entire Official Statement (including the cover page, introductory pages and appendices), as well as the documents summarized or described in this Official Statement. The summaries of and references to all documents, statutes and other instruments referred to in this Official Statement do not purport to be complete and are qualified in their entirety by reference to the full text of each such document, statute or instrument. Terms utilized herein with initial capitalization and not otherwise defined herein have the meaning ascribed to those in “APPENDIX C-1 – SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS – DEFINITIONS.” The Finance Authority does not certify as to the accuracy or sufficiency of the disclosure practices of or content provided by DTC and is not responsible for the information under “APPENDIX E – BOOK-ENTRY ONLY SYSTEM.” (Remainder of Page Intentionally Left Blank) 7 SOURCES AND USES OF FUNDS Set forth below is a summary of the estimated sources and uses of the proceeds of the Series 2015 A Bonds and other moneys available to the Finance Authority to fund the costs of refunding the Refunded Convention Center Bonds: Sources Series 2015 A Bonds Series 2015 A Bonds Original Issue Net Premium Other Sources (1) Total $44,710,000.00 $ 3,393,365.85 $18,358,875.93 $66,462,241.78 Uses Deposit to Redemption Account for Refunded Series 2008 A-1 Bonds(2) Deposit to Escrow Fund for Refunded Series 2008 A-2 Bonds (3) Costs of Issuance (4) Swap Termination Payment (5) $20, 975,000.00 $10,330,875.93 $ 466,365.85 $34,700,000.00 Total $66,462,241.78 _____________ (1) The Finance Authority will contribute $18,358,875.93 of funds to the costs of refunding the Refunded Convention Center Bonds. (2) A portion of the proceeds of the Series 2015 A Bonds, together with other funds of the Finance Authority available for such purpose, will be deposited or transferred into the Redemption Account of the General Fund under the Indenture in a gross amount sufficient to pay the principal of and interest on the Refunded Series 2008 A-1 Bonds on the date of issuance of the Series 2015 A Bonds. Upon such payment, the Refunded Series 2008 A-1 Bonds will no longer be outstanding under the Prior Convention Center Indenture. (3) A portion of the proceeds of the Series 2015 A Bonds will be deposited into the Escrow Fund established under the Escrow Deposit Agreement, and will upon deposit, remain uninvested and be in a gross amount sufficient to pay when due the principal of and interest on the Refunded Convention Center Bonds to and including the date of redemption of the Refunded Convention Center Bonds, as established in the verification report of Crowe Horwath LLP, Indianapolis, Indiana. Upon the deposit of such funds in the Escrow Fund and compliance with the procedures set forth in the Prior Convention Center Indenture regarding the discharge thereof, the Refunded Convention Center Bonds will be defeased and will no longer be outstanding under the Prior Convention Center Indenture. Amounts on deposit in the Escrow Fund will not be available to pay the principal of or interest on the Series 2015 A Bonds. See “VERIFICATION OF MATHEMATICAL COMPUTATIONS.” (4) Includes legal, printing, underwriters’ discount, financial advisor and other miscellaneous costs of issuance and related expenses. (5) Goldman Sachs is the provider of the Convention Center Swap Agreement, which, upon the issuance of the Series 2015 A Bonds, will be terminated. In connection with such termination, Goldman Sachs will receive a termination payment, which will be paid with the proceeds of the Series 2015 A Bonds. Goldman, Sachs & Co., one of the underwriters of the Series 2015 A Bonds, is an affiliate of Goldman Sachs. See “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS–Hedging Program.” 8 SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS General Description The Bonds are special, limited obligations of the Finance Authority, payable solely from and secured exclusively by a pledge to the Trustee of the Trust Estate, which includes payments made by the Building Authority on the Building Authority Notes, all moneys obligated to be paid to the Trustee pursuant to the Revenue Deposit Agreement, the Lease and the Sublease, all Subsidy Payments and the earnings thereon and all the proceeds thereof. Upon their date of issuance, the Series 2015 A Bonds will be on parity with the then remaining outstanding Series 2008 A-1 Convention Center Bonds, and Series 2008 A-2 Convention Center Bonds, the Series 2009 A Convention Center Bonds and the Series 2009 B Convention Center Bonds, equally and ratably secured by the Trust Estate. Pursuant to the Indenture, the Finance Authority may issue Additional Bonds on parity with the Convention Center Bonds, for the purpose of purchasing Additional Building Authority Notes issued by the Building Authority to the Finance Authority for the purpose of making loans to the Building Authority pursuant to the Loan Agreement to pay the costs of the Convention Center Expansion Project or for the refunding of such Bonds. Each Additional Building Authority Note must be payable in full from an Obligation issued by the Board and from the Lease. In connection with the issuance of the Original Convention Center Bonds, the Building Authority entered into the Lease of the Convention Center Expansion Project with the OMB who, in turn, has entered into the Sublease of the Convention Center Expansion Project with the Board. Payment of rentals under the Lease and the Sublease serve as security for payments due by the Building Authority to the Finance Authority on the Series 2015 A Convention Center Note. See, “APPENDIX C-1 – SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS – THE LEASE” and “– THE SUBLEASE.” Payment of rentals under the Lease are payable from (a) moneys appropriated by the General Assembly at the request of OMB on a biennial basis and (b) rental payments received by OMB from the Board pursuant to the Sublease. Rental payments received by OMB from the Board under the Sublease will act as a credit for rental payments due the Building Authority from OMB under the Lease. Under the terms of the Sublease and the Stadium Sublease, and pursuant to the terms of the Revenue Deposit Agreement, rental payments required to be paid by the Board to the OMB will be made from the Local Revenues, which consist of (1) the 2005 New Excise Tax Revenues, (2) PSDA Revenues, (3) certain Fees and (4) all other Revenues pledged under the Revenue Deposit Agreement to the deposit trustee, The Bank of New York Mellon Trust Company, N.A. (the “Deposit Trustee”). The Local Revenues will be deposited in the Stadium and Convention Special Fund by the Deposit Trustee. The Deposit Trustee has covenanted to transfer to the Trustee such amounts requested by the Trustee to make the required lease rental payments. Under the Revenue Deposit Agreement, the Reserve Account was established to secure the lease rental payments by the Board under the Sublease and the Stadium Sublease. The Finance Authority, the Building Authority and the OMB have agreed in the Revenue Deposit Agreement that payment by the Deposit Trustee to the Trustee for the purpose of paying sublease rental payments under the Sublease and the Stadium Sublease will constitute payment of lease rentals under the Lease and the Stadium Lease, respectively. Any such payments with respect to the Sublease and the Stadium Sublease will also be deemed to constitute payment of amounts due under the Convention Center Notes and the Stadium Notes, respectively. For a more detailed description of the Local Revenues, see “APPENDIX B – SUMMARY OF LOCAL REVENUES.” The Convention Center Notes and the Convention Center Bonds are payable from lease rental under the Sublease and the Lease, but not the Stadium Sublease or the Stadium Lease. The Stadium Notes and the Stadium Bonds are payable from lease rental under the Stadium Sublease and the Stadium Lease, but not the Sublease or the Lease. The Indenture established a Debt Service Reserve Account (the “Debt Service Reserve Account”) within the Debt Service Reserve Fund (the “Reserve Fund”), which serves as security for the Convention Center Bonds, but only to the extent of any insufficiency in the General Fund with which to pay the principal of and interest on the Convention Center Bonds. The Debt Service Reserve Requirement is equal to 35% of the maximum semi-annual interest requirements on the Series 2009 B Convention Center Bonds; provided, however, that on and after any date 9 on which the Trustee has received a Rating Conformation Note from each Rating Agency then rating the Convention Center Bonds, the Debt Service Reserve Requirement shall be equal to zero (the “Debt Service Reserve Requirement”). The Convention Center Bonds are primarily secured by lease rental payments made by OMB to the Building Authority via the Lease, which will in turn be paid to the Finance Authority via the Convention Center Notes. The rentals due under the Lease and the corresponding amounts due under the Convention Center Notes are required to be in an amount sufficient to pay all Debt Service (as defined in the Trust Indenture – see “APPENDIX C-1 — SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS — THE INDENTURE”) due on the Convention Center Bonds. The rentals due under the Lease are subject to appropriation of the necessary funds by the General Assembly on a biennial basis. The Board is obligated to make rental payments to the OMB under the Sublease, solely from the Local Revenues, in the same amount that OMB is required to pay rentals under its Lease with the Building Authority. Payment of such amounts under the Sublease is made directly to the Trustee pursuant to the Revenue Deposit Agreement and works as a credit for the OMB’s rental obligations under the Lease. In the event the Local Revenues are insufficient to make a Sublease rental payment when due, the OMB is obligated to pay the amount of the insufficiency to the extent the General Assembly has appropriated funds for the payment under the Lease. In the event the General Assembly should ever fail to make a biennial appropriation for rentals due under the Lease, a termination event would be triggered under the Lease and the Lease would terminate on the first day for which funds have not been appropriated or are not available to pay any sum agreed to be paid for use and occupancy of the Convention Center Expansion Project when due pursuant to the Lease. Upon such event, the Sublease remains in full force and effect, and the Board remains obligated to pay Sublease rentals to the Building Authority, through the Deposit Trustee, in the amount that would have been due under the Lease. See “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS – Revenue Deposit Agreement.” In accordance with State law, the Convention Center Bonds are limited obligations of the Finance Authority and do not constitute a charge against the general credit or taxing power of the State. Subsidy Payments The Finance Authority covenants in the Indenture that it will take all actions required by applicable law or applicable regulations as necessary to provide for the collection to the fullest extent possible of the Subsidy Payments, and will not take any action or fail to take any action which in any way materially adversely affects the ability of the Finance Authority to collect the Subsidy Payments to the fullest extent possible. The Subsidy Payments constitute a portion of the Revenues pledged to the payment of the Convention Center Bonds as a part of the Trust Estate under the Indenture. Pursuant to the Balanced Budget and Emergency Deficit Control Act (the “Budget Control Act”), on March 1, 2013, the President of the United States (the “President”) issued a sequestration order which required automatic spending cuts (“Sequestration”) to reduce the budget deficit. The impact of the Sequestration was an 8.7% reduction of all subsidy payments owed to issuers of Build America Bonds made between March 27 and September, 30, 2013, a 7.2% reduction of all subsidy payments owed to issuers of Build America Bonds processed on or after October 1, 2013 and on or before September 30, 2014, and a 7.3% reduction of all subsidy payments owed to issuers of Build America Bonds processed on or after October 1, 2014 and on or before September 30, 2015. The impact to the Finance Authority of the reduction of the August 1, 2013, February 1, 2014, August 1, 2014, and February 1, 2015 Subsidy Payments was a reduction of those Subsidy Payments by approximately $192,377, $158,153, $159,209 and $161,420, respectively. The Sequestration reduction rate of 7.3% will be applied to all subsidy payments owed to issuers of Build America Bonds processed on or after October 1, 2014 and on or before September 30, 2015, unless and until a law is enacted that cancels or otherwise impacts the Sequestration, at which time the Sequestration reduction rate is subject to change. Assuming that no such law is enacted, the August 1, 2015 Subsidy Payment would be reduced by approximately $161,420. 10 Lease Rental Payments Pursuant to the Amended and Restated Lease, dated as of August 1, 2008, as further amended and supplemented by the First Addendum to the Amended and Restated Lease, dated as of June 1, 2009, the Second Addendum to the Amended and Restated Lease, dated as of January 1, 2010, the Third Addendum to the Amended and Restated Lease, dated as of September 1, 2010, the First Supplemental Lease, dated as of December 1, 2010, the Second Supplemental Lease, dated as of January 10, 2011, the Second Supplemental Lease, dated as of December 1, 2012, and the Third Supplemental Lease, dated as of August 1, 2014 (collectively, the “Lease”), each between the Building Authority and OMB, the Convention Center Bonds are payable on a parity basis by the Finance Authority via lease rentals received by the Building Authority from the OMB and paid to the Finance Authority through payments under the Convention Center Notes. Payment of rentals under the Lease are payable from (a) moneys appropriated by the General Assembly at the request of OMB on a biennial basis and (b) rental payments received by OMB from the Board pursuant to the Sublease. Rental payments received by OMB from the Board under the Sublease will act as a credit for rental payments due the Building Authority from OMB under the Lease and, to the extent of such credit, any appropriation of the General Assembly to make such payments will no longer be encumbered for such purpose and will revert to the fund for which the appropriation was originally made; provided, however, that under the Lease, appropriations do not automatically revert to the State when Local Revenues are available for rental payments, if rental payments may still become due and payable during the remainder of the applicable biennial for which such lease rentals are due and payable under the Lease. Payment of rentals under the Lease described in clause (a) in the immediately preceding paragraph is subject to and dependent upon funds having been appropriated by the General Assembly, as well as the Convention Center Expansion Project’s being fit for use and occupancy. With respect to rentals under the Lease to be paid from appropriations, in accordance with the State Constitution and other laws of the State, the General Assembly meets for a maximum period of 61 legislative days in every odd-numbered year and is to make appropriations for the biennium commencing on July 1 of each such year. The General Assembly also meets for a maximum period of 30 legislative days in intervening years and may make supplemental appropriations at such times. See “APPENDIX A – FINANCIAL AND ECONOMIC STATEMENT FOR STATE OF INDIANA.” Sublease Rental Payments The Amended and Restated Sublease Agreement, dated as of August 1, 2008, as amended and supplemented by the First Supplemental and Amendatory Sublease, dated as of September 1, 2010, and the Addendum to Amended and Restated Sublease Agreement, dated as of January 10, 2011 (collectively, the “Sublease”), each between OMB and the Board, provides for the payment of rentals by the Board to the OMB. The OMB owes rentals to the Building Authority under the Lease. The Board’s obligations to pay rentals under the Sublease survive any termination of the Lease due to non-appropriation or for any other reason, so long as any bonds issued to finance or refinance the Convention Center Expansion Project remain outstanding. The Board has pledged the Local Revenues as security for its obligation to make rental payments under the Sublease. See “APPENDIX B – SUMMARY OF LOCAL REVENUES.” The Local Revenues have been earmarked by the Board, the OMB, the Building Authority and the Finance Authority to meet the debt service on (i) the Convention Center Bonds by means of the Sublease, the Lease and the Convention Center Notes and (ii) the Stadium Bonds by means of the Stadium Sublease, the Stadium Lease and the Stadium Notes. These Local Revenues, except for the Colts license plate fees, will be deposited directly with the Deposit Trustee by the State Treasurer upon warrants issued by the State Auditor. The State Budget Director has directed that the Colts license plate fees be deposited directly with the Deposit Trustee. Functionally, these Local Revenues will flow to the OMB from the Board via the Sublease and the Stadium Sublease and to the Building Authority via the Lease and the Stadium Lease, respectively. An overview of these projected tax revenue streams is outlined in this section, “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS — General Description” and “APPENDIX B – SUMMARY OF LOCAL REVENUES.” It is important to note, however, that these Local Revenues are not directly pledged to the Series 2015 A Bonds, but pursuant to the legislation they cannot be used for any other purpose besides obligations owed under the Obligations, which includes the Sublease, the Stadium Sublease and any other Additional Obligations (as defined in the Revenue Deposit Agreement). See 11 “SECURITY AND SOURCES OF PAYMENT FOR SERIES 2015 A BONDS — Revenue Deposit Agreement” and “APPENDIX B — SUMMARY OF LOCAL REVENUES.” Under State law, the Board may not obligate itself to pay lease rentals under the Sublease or the Stadium Sublease for any period or periods during which the Stadium Project or the Convention Center Expansion Project, respectively, is rendered unfit for use by casualty or condemnation or by other causes. Under such circumstances, the Sublease and the Stadium Sublease provide that the lease rentals thereunder will abate for any period during which the Convention Center Expansion Project or the Stadium Project, respectively, or any portions thereof, are unfit for their intended use. The Board is obligated under the terms of the Sublease and the Stadium Sublease to purchase and maintain in effect throughout the term thereof rental value insurance for the benefit of the OMB in an amount at least equal to 24 months’ rent and 30 months’ rent, respectively, under the Sublease and the Stadium Sublease, respectively, calculated at the level of annual rentals then in effect. See “APPENDIX C-1 — SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS — THE SUBLEASE.” Debt Service Reserve Account The Indenture provides for the Debt Service Reserve Account to be maintained in an amount equal to 35% of the maximum semi-annual interest requirements on the Series 2009 B Convention Center Bonds; provided, however, that on and after any date on which the Trustee has received a Rating Confirmation Notice from each Rating Agency then rating the Convention Center Bonds, the Debt Service Reserve Requirement shall be equal to zero. As of the date hereof, the Debt Service Reserve Requirement is equal to $2,211,234.80 and the amount on deposit in the Debt Service Reserve Account is at least equal to the Debt Service Reserve Requirement. The Finance Authority has covenanted to certify to the General Assembly any projected deficiency in the Debt Service Reserve Account on or before August 1 of the Fiscal Year (ending June 30), in which the deficiency is projected to occur. The Finance Authority has also covenanted to certify any such actual deficiency immediately to the General Assembly, regardless of whether such deficiency has been projected to occur. See “APPENDIX C-1 — SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS—THE INDENTURE.” Moral Obligation (State Appropriations Mechanism) The Finance Authority Act authorizes, subject to the prior review of the State Budget Committee and the approval of the State Budget Director (which review and approval have been conducted and received, respectively, with respect to the Convention Center Bonds), the Indenture to provide that the Finance Authority or a person acting on behalf of the Finance Authority will certify to the General Assembly any deficiency in the Debt Service Reserve Account resulting from the amount on deposit therein or deemed to be on deposit therein being less than the Debt Service Reserve Requirement, or any amount necessary to restore the amount on deposit in the Debt Service Reserve Account to the Debt Service Reserve Requirement. However, nothing in these provisions or any other provision of the Finance Authority Act creates a debt or liability of the State to make any payments or appropriations to or for the use of the Finance Authority. There can be no representation or assurance (i) that a certificate from the Chairman of the Finance Authority, stating the amount of a deficiency in the Debt Service Reserve Account would be taken up for any or for early consideration by the General Assembly, or (ii) that upon consideration of any such certificate, the General Assembly would determine to appropriate funds to reduce or eliminate such deficiency, or (iii) that, in the event the General Assembly determined to make such an appropriation, the amounts thus appropriated would be forthcoming as of any particular date. In accordance with the State Constitution and other laws of the State, the General Assembly meets for a maximum period of 61 legislative days in every odd-numbered year in order to establish a budget and to make appropriations. The General Assembly also meets for a maximum period of 30 legislative days in intervening years in order to make supplemental appropriations. Because the General Assembly meets for only a portion of each year, there can be no representation or assurance that the General Assembly could, if it elected to do so, take timely action upon a certificate from the Chairman of the Finance Authority in order to provide funds to avoid a default in the payment of principal of or interest on the Convention Center Bonds. 12 Covenants of Board The Board, on behalf of Marion County, Indiana, covenants in the Revenue Deposit Agreement that neither the Marion County Admissions Tax (as defined herein), the Marion County Food and Beverage Tax (as defined herein) nor the Marion County Innkeeper’s Tax (as defined herein) will be repealed, amended or altered in any manner that would reduce or adversely affect the levy and collection of the Marion County Admissions Tax, the Marion County Food and Beverage Tax or the Marion County Innkeeper’s Tax or reduce the rates or amounts of the Marion County Admissions Tax, the Marion County Food and Beverage Tax or the Marion County Innkeeper’s Tax, so long as the Sublease and any other Obligation secured by the Revenue Deposit Agreement remains unpaid. The Board further covenants in the Revenue Deposit Agreement that it will not take or fail to take any action which would (i) reduce or adversely affect the levy and collection of the Marion County Supplemental Auto Rental Excise Tax, (ii) reduce the rates or amounts of the Marion County Supplemental Auto Rental Excise Tax, or (iii) result in a materially adverse reduction in the Revenues, so long as the Sublease and any other Obligation secured by the Revenue Deposit Agreement remains unpaid. Revenue Deposit Agreement Stadium and Convention Special Fund. The Stadium and Convention Special Fund (the “Stadium and Convention Special Fund”) is a fund created under the Restated Stadium and Convention Special Fund Revenue Deposit Agreement, dated as of December 7, 2010 (the “Revenue Deposit Agreement”), among the Board, the Building Authority, the OMB, the Finance Authority, the State Budget Director and the Deposit Trustee, and is not a fund under the Indenture, the Lease or the Sublease. Deposits to the Stadium and Convention Special Fund are governed by the Revenue Deposit Agreement. Under the Board Act (as defined herein), the Finance Authority Act and the Revenue Deposit Agreement, the Local Revenues are required to be deposited in the Stadium and Convention Special Fund. Accounts. Under the Revenue Deposit Agreement, within the Stadium and Convention Special Fund there is established: (1) the Lease Rental Payment Account; (2) the Delinquent Rental Account; (3) the Reserve Account; and (4) the Excess Revenues Account (each as defined in the Revenue Deposit Agreement). All such Accounts are held by the Deposit Trustee for the equal and ratable benefit of the Sublease and the Stadium Sublease. Lease Rental Payment Account. From amounts on deposit in the Stadium and Convention Special Fund, the Deposit Trustee will deposit to the Lease Rental Payment Account established for the purpose of paying rentals due under the Sublease and the Stadium Sublease, respectively, on the 20th day of each month, commencing on the January 20 immediately preceding each Lease Year (the 12-month period beginning on July 1 and ending on the following June 30) Local Revenues until the amounts deposited to such Account in that month equals one-tenth of the total of the rental payments due under the Sublease and the Stadium Sublease in such Lease Year. No further deposits will be made to the Lease Rental Payment Account for such Lease Year after sufficient amounts have been deposited thereto to pay the entirety of the rentals due under the Sublease and the Stadium Sublease in such Lease Year. The amount required to be deposited to the Lease Rental Payment Account in any month is defined as the “Requirement” in the Revenue Deposit Agreement. Any such deficiency in any month shall be made up in the following month from any Local Revenues on deposit in the Stadium and Convention Special Fund in excess of the Requirement for that month. Delinquent Rental Account. After making the required deposits to the Lease Rental Payment Account described in the preceding paragraph, the Deposit Trustee shall deposit portions of the remaining amounts of Local Revenues received for deposit to the Stadium and Convention Special Fund to the Delinquent Rental Account in amounts sufficient to meet the Requirements of such Account. The Requirement for the Delinquent Rental Account is equal to the amount of any lease rentals or other amounts to be paid by the Board to the OMB under the Sublease and the Stadium Sublease, which were not timely paid and remain unpaid, together with interest on any overdue amounts at a rate equal to the effective interest rate on the outstanding Convention Center Bonds and Stadium Bonds. Upon deposit in the Delinquent Rental Account, the Deposit Trustee shall transfer out of such Account to the Trustee or the Stadium Trustee the amount requested in writing by the Trustee or the Stadium Trustee to satisfy such lease rental payment obligations not timely paid and that remain unpaid; provided that if the OMB has 13 otherwise provided for payment of rental or other amounts due under the Lease or the Stadium Lease (other than from Local Revenues), then, in such event, the Deposit Trustee shall transfer (upon written direction of the OMB) moneys out of such Account to the OMB to the extent that the OMB has provided for the payment of such rental and other obligations. Because there has never been a failure of the Board to pay rent or any other obligations to the OMB under the Sublease or the Stadium Sublease, the Requirement for such Delinquent Rental Account is zero and there are no moneys on deposit in such Delinquent Rental Account. At the direction of an Authorized Officer of the Finance Authority, the Deposit Trustee shall transfer any moneys in the Delinquent Rental Account to the Lease Rental Payment Account to satisfy any deficiency in the Lease Rental Payment Account; provided that any such transfer may be made only to the extent that moneys are not then on deposit in the Reserve Account or the Excess Revenues Account. Reserve Account. After making the required deposits to the Lease Rental Payment Account and the Delinquent Rental Account described in the preceding paragraphs, the Deposit Trustee is required to deposit the remaining amounts of Local Revenues received for deposit into the Stadium and Convention Special Fund to the Reserve Account in amounts sufficient to meet the Requirement of such Reserve Account. The component Requirement for the Reserve Account allocable to the Sublease is an amount equal to the Reserve Requirement for the Convention Center Bonds. The component Requirement for the Reserve Account allocable to the Stadium Sublease is an amount equal to the Reserve Requirement for the Stadium Bonds. The Requirement for the Reserve Account is equal to the sum of such components. “Reserve Requirement” means, collectively, with respect to the Stadium Bonds and the Convention Center Bonds, upon the date of issue of each series of such Bonds, an amount equal to the least of: (i) 10% of the stated principal amount of such Bonds, provided that if any series of such Bonds has more than a de minimis amount of original issue discount or premium, the issue price of such series of Bonds (net of pre-issuance accrued interest) shall be used to measure the 10% limitation in lieu of the stated principal amount of such series of Bonds; (ii) the maximum annual Debt Service on such Bonds; or (iii) 125% of the average annual Debt Service on such Bonds, and thereafter, if less than such amount, shall be the maximum annual Debt Service on such Bonds then Outstanding in the present or any succeeding Lease Year. For purposes of this definition, “Debt Service” shall be calculated by reference to the definition of Debt Service in the Indenture or the Stadium Indenture, as applicable. The balance in the Reserve Account as of April 27, 2015 was $22,445,922. In the event that, on or immediately following a deposit to the Lease Rental Payment Account there exist any unmet Requirement for such Lease Rental Payment Account (calculated on a proportional basis for the applicable number of months for which deposits to the Lease Rental Payment Account have been required to be made as described above) or an unmet Requirement for the Delinquent Rental Account, any balances in the Reserve Account shall be transferred, at the direction of an Authorized Officer of the Finance Authority, to meet such requirements; provided that no such transfer shall be made to the Delinquent Rental Account, if on such date of transfer, there is any unmet Requirement in the Lease Rental Payment Account. Excess Revenues Account. After having made the required deposits to the Lease Rental Payment Account, the Delinquent Rental Account and the Reserve Account described above, the Deposit Trustee shall deposit the remaining amounts received for deposit into the Stadium and Convention Special Fund to the Excess Revenues Account. The funds in the Excess Revenues Account may be used by the Deposit Trustee only at the written direction of an Authorized Officer of the Finance Authority (i) to make up deficiencies (or unmet Requirements) in any year or to pay amounts then due and payable from the Lease Rental Payment Account, the Delinquent Rental Account or the Reserve Account, (ii) to prepay Obligations by making transfers therefrom to the Redemption Account of the Indenture or the Stadium Indenture, including to pay a corresponding swap termination payment relating to the redemption of Convention Center Bonds or Stadium Bonds, or (iii) to fund the obligations of the Board under the Sublease or the Stadium Sublease to pay (a) the costs of extraordinary capital improvements to the Convention Center Expansion Project or the Real Estate (as defined in the Sublease and the Lease), or the real estate and improvements which are subject to the Stadium Sublease and the Stadium Lease, or (b) obligations of the Building Authority arising out of the design, development and construction of the Convention Center Expansion Project or the Stadium Project. Any such payments to the Redemption Account of the Indenture or the Stadium Indenture held by the Trustee or the Stadium Trustee, as applicable, for the purpose of redeeming Convention Center Bonds or Stadium Bonds, including to pay a corresponding swap termination payment relating to the redemption of Convention Center 14 Bonds or Stadium Bonds, from the Excess Revenues Account shall (i) constitute a prepayment of the Board’s lease rental obligations under the Sublease or the Stadium Sublease, as applicable, and (ii) simultaneously constitute a prepayment of the OMB’s lease rental obligations under the Lease or the Stadium Lease, as applicable, and a prepayment of principal, interest, and other obligations of the Building Authority under the Convention Center Notes, the Loan Agreement, the Stadium Notes or the Stadium Loan Agreement, as applicable. Deemed Payments under the Lease and the Convention Center Notes. Under the Revenue Deposit Agreement, the Building Authority, the Finance Authority and the OMB acknowledge and agree that payments of amounts from the Stadium and Convention Special Fund to the Trustee in order to pay lease rentals under the Sublease will simultaneously constitute payments of lease rentals under the Lease and payment of principal, interest and other amounts due on the Convention Center Notes. See “APPENDIX C-1—SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS—THE REVENUE DEPOSIT AGREEMENT.” See also, “APPENDIX B - SUMMARY OF LOCAL REVENUES” for a description and history of the collection of the Local Revenues through 2013. Hedging Program In accordance with the Policy (as defined herein) and in anticipation of the issuance of the Series 2008 A Bonds, including the Refunded Convention Center Bonds, and the Stadium Bonds, the Finance Authority entered into forward floating-to-fixed interest rate swaps pursuant to ISDA Master Agreements (collectively, with respect to the Series 2008 A Bonds, the “Convention Center Swap Agreement” and with respect to the Stadium Bonds, the “Stadium Swap Agreement”) with multiple counterparties (the “Qualified Hedging Contract Providers”). The intent of the Convention Center Swap Agreement and the Stadium Swap Agreement and associated transactions was to effectively convert the Finance Authority’s variable rate exposure on all of the Hedged Convention Center Bonds (as defined herein) and the Hedged Stadium Bonds (as defined herein) to a fixed rate exposure. Convention Center Swap Agreement. In connection with and as a condition to the issuance of the Series 2015 A Bonds, the Finance Authority and Goldman Sachs (as defined herein) have entered into an agreement to terminate the Convention Center Swap Agreement for a portion of the Series 2008 A Bonds, including the Refunded Convention Center Bonds. Prior to such termination, the Convention Center Swap Agreement will be in a notional amount equal to $98,114,750, being all but $21,885,250 of the aggregate principal amount of the Series 2008 Convention Center Bonds (the “Hedged Convention Center Bonds”). The Qualified Hedging Contract Provider to the Convention Center Swap Agreement is Goldman Sachs Bank USA (successor to Goldman Sachs Capital Markets, L.P.) (“Goldman Sachs,” and sometimes herein, the “Convention Center Qualified Hedging Contract Provider”). The Finance Authority will pay a termination payment of $34,700,000 to the Convention Center Qualified Hedging Contract Provider for the purpose of terminating the Convention Center Swap Agreement concurrently with the issuance of the Series 2015 A Bonds. Goldman Sachs & Co., one of the underwriters of the Series 2015 A Bonds, is an affiliate of Goldman Sachs. See “SOURCES AND USES OF FUNDS.” Stadium Swap Agreement. The Stadium Swap Agreement is in a notional amount equal to $640,260,000, being the aggregate principal amount of the Series 2005 A Stadium Bonds, the Series 2007 A Stadium Bonds and all but $6,590,000 of the outstanding principal amount of the Series 2008 A Stadium Bonds (collectively, the “Hedged Stadium Bonds”). The Qualified Hedging Contract Providers to the Stadium Swap Agreement are Goldman Sachs, JPMorgan Chase Bank, N.A. (“JPMorgan Chase Bank”) and The Bank of New York Mellon (“BNYM”) (collectively, the “Stadium Qualified Hedging Contract Providers”). The notional principal amount of the Stadium Swap Agreement with Goldman Sachs is $269,071,000 (the “Goldman Stadium Swap Agreement”), the notional principal amount with JPMorgan Chase Bank is $342,454,000 and the notional principal amount with BNYM is $28,735,000. Pursuant to the Stadium Swap Agreement with Goldman Sachs and JPMorgan Chase Bank, the Finance Authority pays interest on the notional amount at a fixed rate per annum of 4.231%, and Goldman Sachs and JPMorgan Chase Bank pay interest on the same notional amount to the Finance Authority at a variable rate based upon the Securities Industry and Financial Markets Association Municipal Swap Index (the “SIFMA Index”). Pursuant to the Stadium Swap Agreement with the BNYM, the Finance Authority pays interest on the notional amount at a fixed per annum of 3.796%, and the BNYM pays interest on the same notional amount to the Finance Authority at a variable rate based on the SIFMA Index. Payments received under the Stadium Swap Agreement are intended to provide a source of credit and security for the Hedged Stadium Bonds. The obligation of the Finance 15 Authority to pay hedge payments under the Stadium Swap Agreement is secured by a pledge of the Trust Estate on parity with the pledge of the Trust Estate under the Indenture to the payment of debt service on the Stadium Bonds. Concurrently with the issuance of the Series 2015 A Bonds, the Finance Authority will issue its Lease Appropriation Refunding Bonds (Stadium Project), Series 2015 A (the “Series 2015 A Stadium Bonds”), for the purpose of refunding a portion of the Series 2005 A Stadium Bonds and the Series 2007 A Bonds (collectively, the “Refunded Stadium Bonds”) and to pay a termination payment to Goldman Sachs to terminate the Goldman Stadium Swap Agreement. In connection with and as a condition to the issuance of the Series 2015 A Stadium Bonds, the Finance Authority and Goldman Sachs have entered into an agreement to terminate the Goldman Stadium Swap Agreement for the Refunded Stadium Bonds. Risks. Significant terms of the Stadium Swap Agreement are described in the following paragraphs. Estimated valuations of the Stadium Swap Agreement are shown as of April 28, 2015; however such valuations are only estimates and may change due to various factors, including changes in interest rates and differences in valuation methods. The Stadium Swap Agreement, other than the Goldman Stadium Swap Agreement, with respect to (i) the Series 2005 A Stadium Bonds (a) is in the notional amount of $250,000,000, (b) has an effective date of August 15, 2008 and (c) has a termination date of February 1, 2037; (ii) the Series 2007 A Stadium Bonds (a) is in the notional amount of $92,454,000, (b) has an effective date of August 15, 2008 and (c) has a termination date of February 1, 2037; and (iii) the Series 2008 A Stadium Bonds (a) is in the notional amount of $28,735,000, (b) has an effective date of August 15, 2008 and (c) has a termination date of February 1, 2035. The Stadium Swap Agreement, other than the Goldman Stadium Swap Agreement, has an estimated aggregate fair value as of April 28, 2015 of $119,902,379.83. Arrangements between the Finance Authority and the Stadium Qualified Hedging Contract Providers do not alter the Finance Authority’s obligation to pay the principal of and interest on the Hedged Stadium Bonds. Depending on market conditions and other factors affecting the variable rates on the Hedged Stadium Bonds, the payments under the Stadium Swap Agreement may not match the interest payments on the Hedged Stadium Bonds. Under certain circumstances, including a default under the Stadium Swap Agreement by the Finance Authority or by one of the Stadium Qualified Hedging Contract Providers, or significant rating reductions with respect to either party, the transactions under the Stadium Swap Agreement may be terminated in part or in whole prior to their stated expiration. Following a termination of the Stadium Swap Agreement, either the Finance Authority or the Stadium Qualified Hedging Contract Providers will owe a termination payment to the other, depending upon market conditions at the time of termination. Under certain market conditions, the Finance Authority could owe a termination payment to the Stadium Qualified Hedging Contract Providers and that payment could be material to the Finance Authority. Termination payments to the Stadium Qualified Hedging Contract Providers under the Stadium Swap Agreement will be subordinate to the payments of the principal of and interest on the Stadium Bonds to the holders thereof and the hedge payments owed by the Finance Authority to the Stadium Qualified Hedging Contract Providers pursuant to the Stadium Swap Agreement. The Finance Authority has by resolution adopted a “Master Swap Policy” (the “Policy”) which is intended to provide guidance and direction to the Finance Authority in connection with the execution of swap transactions and related agreements. The Policy provides that a swap will be “entered into not for the purpose of speculation but solely in connection with the financing or investment activities of the Finance Authority, including, without limitation, converting interest on all or a portion of the Finance Authority’s debt from a fixed rate to a floating rate, or from a floating rate to a fixed rate or from one floating rate to a different floating rate, reducing the cost of borrowing on its outstanding debt . . . .” No Mortgage The Trust Estate does not include, and holders of the Series 2015 A Bonds will not receive, any mortgage, lien or security interest in the Convention Center Expansion Project. 16 Enforceability of Rights, Remedies The enforceability of the rights and remedies of the Trustee, the holders of the Series 2015 A Bonds, the Finance Authority, the Building Authority, the OMB and the Board are limited. See “ENFORCEABILITY OF REMEDIES.” DESCRIPTION OF SERIES 2015 A BONDS General Description The Series 2015 A Bonds will be dated the date of issuance thereof and will bear interest from such date, payable on February 1 and August 1 of each year, commencing on August 1, 2015 (each, an “Interest Payment Date”), until their maturity date or prior redemption. Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Series 2015 A Bonds will bear interest at the rates per annum set forth on the inside front cover page of this Official Statement. THE SERIES 2015 A BONDS WILL MATURE ON THE DATES, AND IN THE AMOUNTS SHOWN ON THE INSIDE COVER PAGE OF THIS OFFICIAL STATEMENT, SUBJECT TO PRIOR OPTIONAL, MANDATORY SINKING FUND OR EXTRAORDINARY MANDATORY REDEMPTION. See “DESCRIPTION OF SERIES 2015 A BONDS — Redemption Prior to Maturity.” The Series 2015 A Bonds are being initially issued and delivered in fully registered form only, in the denomination of $5,000 or any integral multiples thereof (such denominations “Authorized Denominations”), and will be registered in the name of Cede & Co., as nominee of the Depository Trust Company “DTC”). DTC will act as securities depository for the Series 2015 A Bonds. So long as the Series 2015 A Bonds are held in DTC’s bookentry only system, DTC (or a successor securities depository) or its nominee will be the registered owner of the Series 2015 A Bonds and payments of principal and interest with respect to the Series 2015 A Bonds will be made solely through the facilities of DTC. See “APPENDIX E—BOOK-ENTRY ONLY SYSTEM.” Unless otherwise provided in writing with or from the Securities Depository (presently, DTC), payments of interest on the Series 2015 A Bonds will be made by the Paying Agent on the Interest Payment Date to the registered owners thereof whose names appear on the registration books by the Trustee at the close of business on the Record Date (being the 15th day, whether or not a Business Day, of the month next proceeding each Interest Payment Date) by wire transfer of immediately available funds to an account specified by the registered owner in a writing delivered to the Paying Agent. The principal of and redemption premium, if any, on each Series 2015 A Bond will be payable on the Principal Payment Date (being any day upon which the principal amount of Series 2015 A Bonds is due, including the Maturity Date, any Redemption Date or the date of the maturity of any Series 2015 A Bonds is accelerated pursuant to the terms of the Indenture), upon surrender thereof at the office of the Paying Agent. Redemption Prior to Maturity Optional Redemption The Series 2015 A Bonds maturing on or after February 1, 2026 are subject to redemption prior to maturity on or after August 1, 2025, at the option of the Finance Authority, in whole or in part (and, if in part, in Authorized Denominations) at any time and from time to time, at a redemption price equal to 100% of the principal amount to be redeemed, plus interest accrued thereon to the date of redemption. Mandatory Sinking Fund Redemption The Series 2015 A Bonds (or any portion thereof in integral multiples of $5,000 each) maturing on February 1, 2037 (the “Term Bonds”), are also subject to mandatory sinking fund redemption prior to maturity, at a redemption price equal to the principal amount thereof plus accrued interest, in accordance with the following schedule: 17 Term Bonds due February 1, 2037 Date Principal Amount February 1, 2036 February 1, 2037* $ 1,500,000 $16,100,000 *Final maturity. Extraordinary Mandatory Redemption The Series 2015 A Bonds are subject to extraordinary mandatory redemption in whole or in part, at any time, at a redemption price equal to the principal amount thereof plus accrued interest to the redemption date, from and to the extent that moneys are deposited in the Redemption Account from a prepayment of the Series 2015 A Convention Center Note resulting from the receipt by the Building Authority of insurance or condemnation proceeds or from proceeds received upon a default on such Note pursuant to the Loan Agreement, unless such moneys can be invested at a yield calculated in accordance with the Internal Revenue Code of 1986, as amended and in effect on the date of issuance of the Series 2015 A Bonds (the “Code”), over any period of time ending on any subsequent Interest Payment Date which equals or exceeds the average interest rate on the Outstanding Series 2015 A Bonds; provided that, in the opinion of a nationally recognized firm experienced in matters relating to the tax exemption for interest payable on obligations of states and their instrumentalities and political subdivisions under federal law and acceptable to the Finance Authority and the Trustee, such investment would not cause any of the Series 2015 A Bonds to be “arbitrage bonds” as defined in the Code or otherwise cause the interest on the Series 2015 A Bonds to be included in the gross income of the owners thereof for federal income tax purposes. Redemption at Election or Direction of Finance Authority In the case of any redemption of Series 2015 A Bonds pursuant to which notice thereof must be given to the Owners of the Series 2015 A Bonds under the Indenture, the Finance Authority will give written notice to the Trustee of its election or direction so to redeem, of the redemption date, of the principal amounts of the Series 2015 A Bonds of each maturity to be redeemed (which maturities and principal amounts thereof to be redeemed will be determined by the Finance Authority in its sole discretion, subject to any limitations with respect thereto contained in the Finance Authority Act or the Indenture) and of the moneys to be applied to the payment of the Redemption Price. Such notice shall be given at least forty-five (45) days prior to the redemption date or such shorter period as is acceptable to the Trustee. In the event notice of redemption has been given as described below, the Finance Authority will, on or before the redemption date, deliver to the Trustee an amount, in (i) cash or (ii) (a) direct noncallable obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, to which direct obligation or guarantee the full faith and credit of the United States of America has been pledged, (b) Refcorp interest strips, (c) CATS, (d) TIGRS, (e) STRPS and (f) defeased municipal bonds rated AAA by S&P or Aaa by Moody’s (any obligations described in (ii), “Governmental Obligations”), in addition to other moneys, if any, available therefor held by the Trustee, which meet the requirements of the Indenture and will be sufficient to redeem, on the redemption date at the Redemption Price thereof, together with interest accrued to the redemption date, all of the Series 2015 A Bonds to be redeemed. In the event of the simultaneous prepayment of the Series 2015 A Convention Center Note and redemption of the Series 2015 A Bonds, each maturity and principal amount thereof to be prepaid and redeemed will be as nearly identical as practicable. Selection of Series 2015 A Bonds for Redemption In the event less than all of the Series 2015 A Bonds are to be redeemed, the maturity to be redeemed will be selected by the Finance Authority, and the Series 2015 A Bonds shall be redeemed by lot within a selected maturity, provided that the Series 2015 A Bonds will be redeemed only in whole multiples of $5,000. The Series 2015 A Bonds will be called for redemption in multiples of $5,000. The Series 2015 A Bonds in denominations of more than $5,000 will be treated as representing the number of Series 2015 A Bonds obtained by dividing the denomination of the Series 2015 A Bond by $5,000 within a maturity. The Series 2015 A Bonds 18 may be redeemed in part. In the event of the redemption of the Series 2015 A Bonds in part, upon surrender of the Series 2015 A Bond to be redeemed, a new Series 2015 A Bond or Series 2015 A Bonds in an aggregate principal amount equal to the unredeemed portion of the Series 2015 A Bond surrendered will be issued to the registered owner. In the event the Series 2015 A Bonds are to be redeemed by optional redemption and mandatory sinking fund redemption on the same date, the Trustee will select by lot the Series 2015 A Bonds for mandatory sinking fund redemption before selecting the Series 2015 A Bonds by lot for optional redemption. Redemption Payments Prior to the date fixed for redemption, funds will be deposited with the Trustee in an amount sufficient to pay the redemption price of the Series 2015 A Bonds or portions thereof called, together with accrued interest thereon to the redemption date. If proper notice of redemption by mailing has been given as described below and sufficient funds for redemption are on deposit with the Trustee as aforesaid, interest on the Series 2015 A Bonds or portions thereof called will no longer accrue after the date fixed for redemption. No payment will be made by the Trustee upon any Series 2015 A Bond or portion thereof called for redemption until such Series 2015 A Bond or portion thereof has been delivered for payment or cancellation or the Trustee has received the items required with respect to any mutilated, lost, stolen or destroyed Series 2015 A Bond. Notice of Redemption Notice of the call for any redemption, identifying the Series 2015 A Bonds to be redeemed, will be given by the Trustee by mailing a copy of the redemption notice by first-class, registered or certified mail at least 30 days but not more than 45 days prior to the date fixed for redemption to the registered owner of each Series 2015 A Bond to be redeemed at the address shown on the registration books. Failure to give such notice by mailing to any Bondholder, or any defect in such notice, will not affect the validity of any proceeding for the redemption of any other Series 2015 A Bonds. Notice of any redemption of the Series 2015 A Bonds will either (i) explicitly state that the proposed redemption is conditioned on there being on deposit on the redemption date sufficient money to pay the full redemption price of the Series 2015 A Bonds to be redeemed, or (ii) be sent only if sufficient money to pay the full redemption price of the Series 2015 A Bonds to be redeemed is on deposit in the Redemption Account. Transfer and Exchange The Finance Authority will cause books for the registration and for the transfer of the Series 2015 A Bonds to be kept by the Trustee at its corporate trust office. At reasonable times and under reasonable regulations established by the Trustee, said books may be inspected and copied by the Finance Authority or by owners (or a designated representative thereof) of 5% or more in aggregate principal amount of the Bonds then outstanding. Upon surrender for transfer of any Series 2015 A Bond at the corporate trust office of the Trustee, duly endorsed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Trustee and duly executed by the registered owner or his attorney duly authorized in writing, the Finance Authority will execute and the Trustee will authenticate and deliver in the name of the transferee or transferees a new Series 2015 A Bond or Series 2015 A Bonds of the same maturity for a like aggregate principal amount. The Series 2015 A Bonds may be transferred or exchanged without cost to the Bondholders, except for any tax or governmental charge required to be paid with respect to the transfer or exchange. The execution by the Finance Authority of any Series 2015 A Bond of any denomination will constitute full and due authorization of such denomination and the Trustee will thereby be authorized to authenticate and deliver such Series 2015 A Bond. The Trustee will not be required (a) to register, transfer or exchange any Series 2015 A Bonds during a period of 15 days next preceding mailing of a notice of redemption of any Series 2015 A Bonds or (b) to register, transfer or exchange any Series 2015 A Bonds selected, called or being called for redemption, in whole or in part, after mailing notice of such call has been made. The person in whose name a Series 2015 A Bond is registered will be deemed and regarded as the absolute owner thereof for all purposes under the Indenture, and payment of the principal thereof and interest thereon will be made only to or upon the order of the registered owner thereof or his legal representative, but such registration may 19 be changed as hereinabove provided. All such payments will be valid and effectual to satisfy and discharge the liability upon such Series 2015 A Bond to the extent of the sum or sums so paid. All Series 2015 A Bonds delivered upon any transfer or exchange will be valid obligations of the Finance Authority, evidencing the same debt as the Series 2015 A Bonds surrendered, will be secured by the Indenture and will be entitled to all of the security and benefits thereof to the same extent as the Series 2015 A Bond surrendered. The Series 2015 A Bonds will initially be issued and held in book-entry on the books of the Securities Depository or any successor or assign or any direct or indirect participant therein (each, a “Clearing Agency”). The Finance Authority and the Trustee may, in connection therewith, do or perform or cause to be done or performed any acts or things not adverse to the rights of the holders of the Series 2015 A Bonds, as are necessary or appropriate to accomplish or recognize such book-entry form Series 2015 A Bonds. So long as the Series 2015 A Bonds remain and are held in book-entry form on the books of a Clearing Agency, then: (1) any such Series 2015 A Bonds may be registered upon the books kept by the Trustee in the name of such Clearing Agency, or any nominee thereof, including Cede & Co., as the partnership nominee of the Securities Depository; (2) the Clearing Agency in whose names such Series 2015 A Bonds are so registered will be, and the Finance Authority and the Trustee may deem and treat such Clearing Agency as, the absolute owner and holder of such Series 2015 A Bond for all purposes of the Indenture, including, without limitation, the receiving of payment of the principal of and interest on such Series 2015 A Bond, the receiving of notice and the giving of consent; (3) neither the Finance Authority nor the Trustee will have any responsibility or obligation under the Indenture to any direct or indirect participant, within the meaning of Section 17A of the Securities Exchange Act of 1934, as amended, of such Clearing Agency, or any person on behalf of which, or otherwise in respect of which, any such participant holds any interest in any Series 2015 A Bond, including, without limitation, any responsibility or obligation under the Indenture to maintain accurate records of any interest in any Series 2015 A Bond or any responsibility or obligation under the Indenture with respect to the receiving of payment of the principal of or interest on any Series 2015 A Bond, the receiving of notice or the giving of consent; and (4) the Clearing Agency is not required to present any Series 2015 A Bond called for partial redemption prior to receiving payment so long as the Trustee and the Clearing Agency have agreed to the method for noting such partial redemption. Additional Bonds Additional Bonds may be issued on a parity with the Series 2015 A Bonds, the Series 2009 A Convention Center Bonds, the Series 2009 B Convention Center Bonds, the Series 2008 A-1 Convention Center Bonds and the Series 2008 A-2 Convention Center Bonds: (i) to purchase Additional Building Authority Notes issued by the Building Authority to the Finance Authority for the purpose of making loans to the Building Authority pursuant to the Loan Agreement, which loans may be used by the Building Authority to pay the costs of the Convention Center Expansion Project or to prepay Building Authority Notes; provided that each such Additional Building Authority Note is payable in full from an Obligation and from the Lease; or (ii) to refund, directly or indirectly, the Series 2015 A Bonds, the Series 2009 A Convention Center Bonds, the Series 2009 B Convention Center Bonds, the Series 2008 A-1 Convention Center Bonds, the Series 2008 A-2 Convention Center Bonds or any Additional Bonds issued under the Indenture. The issuance of Additional Bonds must be authorized by a Supplemental Indenture of the Finance Authority and the Additional Bonds may be issued in one or more series. All Additional Bonds, other than Refunding Bonds described in the Indenture, will be issued in a principal amount sufficient, together with other moneys available therefor, to purchase Additional Building Authority Notes and to make such deposits required by the provisions of the Finance Authority Act, the Indenture and the Supplemental Indenture authorizing such series of Additional Bonds. Each Supplemental Indenture authorizing the issuance of a series of Bonds must specify: (i) The authorized principal amount of such series of Bonds; (ii) The purpose for which such series of Bonds are being issued, which must be one or more of the following: (a) making payments into the General Account; (b) making payment of Costs of Issuance 20 or Program Expenses; (c) providing funds to complete or expand the Convention Center Expansion Project; (d) the payment of notes theretofore issued by the Finance Authority for any purposes for which Bonds may have been issued; (e) paying capitalized interest on such series of Bonds; (f) funding all or a portion of the Debt Service Reserve Requirement attributable to such series or other series of Bonds; and (g) the refunding of Bonds and related purposes, as provided in the Indenture; (iii) The date or dates of issue, Principal Payment Date or Dates and amounts of each maturity of the Bonds of such series; (iv) The interest rate or rates, or the manner of determining such interest rate or rates of the Bonds of such series, and the Interest Payment Dates therefor; (v) The denomination or denominations of, and the manner of numbering and lettering, the Bonds of such series; provided that each Bond must be issued in Authorized Denominations, except as may otherwise be specifically provided in a Supplemental Indenture, not exceeding the aggregate principal amount of the Bonds of such series maturing in the year of maturity of the Bond for which the denomination is to be specified; (vi) The Trustee and any co-trustees, and the place or places of payment of the principal of, redemption premium, if any, and interest on the Bonds of such series; provided, however, that such Trustee and any co-trustee may be appointed by resolution of the Finance Authority adopted prior to authentication and delivery of such series of Bonds; (vii) The redemption price or redemption prices, if any, and, subject to the Indenture, the redemption terms, if any, for the Bonds of such series; (viii) If so determined by the Finance Authority, provisions for the sale of the Bonds of such series; (ix) authentication; (x) The form or forms of the Bonds of such series and of the Trustee’s certificate of The manner of execution of the Bonds of such series; (xi) Except in the case of Bonds the interest on which is not excludable from gross income for federal income tax purposes, the necessary tax covenants to ensure that interest on such series of Bonds will be excludable from gross income for federal income tax purposes under the Code; (xii) The increase necessary in the amount payable under any additional Credit Enhancement or Liquidity Facility to insure the payment when due of the principal of and interest on such series of Bonds and the amount of cash or investments to be deposited in the Debt Service Reserve Fund or the appropriate increase in any Debt Service Reserve Fund Credit Facility then on deposit therein to satisfy the Debt Service Reserve Requirement; (xiii) The designation of a Qualified Hedging Contract or a Reimbursement Obligation that is being or has been entered into in connection with the issuance of such series of Bonds; and (xiv) Any other provisions deemed advisable by the Finance Authority, not in conflict with the provisions of the Indenture. Additional Bonds issued to provide funds to pay additional costs of the Convention Center Expansion Project may be authenticated and delivered only upon receipt by the Trustee of the documents described in the preceding paragraph and each of the following: 21 (i) A written legal opinion from a firm of attorneys (an “Opinion of Counsel”) to the effect that: (a) when executed for and in the name and on behalf of the Finance Authority and when authenticated and delivered by the Trustee, those Additional Bonds will be valid and binding limited obligations of the Finance Authority in accordance with their terms and will be secured under the Indenture equally and on a parity (except with respect to any moneys drawn by the Trustee under the Liquidity Facility) with all other Bonds at the time Outstanding under the Indenture as to the Trust Estate; and (b) the issuance of the Additional Bonds will not result in the interest on the Bonds Outstanding immediately prior to that issuance becoming included in gross income for federal income tax purposes, except with respect to any series of Bonds the interest on which is not excludable from gross income for federal income tax purposes pursuant to an election made by the Finance Authority pursuant to the Indenture; (ii) An Additional Building Authority Note of the Building Authority; and (iii) An original executed counterpart of the Supplemental Loan Agreement, pursuant to which the Building Authority is issuing the Additional Building Authority Note to the Finance Authority. Any Additional Bonds will be issued only upon the receipt by the Trustee of: (a) An original executed counterpart of the Indenture and any Supplemental Indenture pursuant to which such Additional Bonds are being issued; (b) An Opinion of Counsel dated as of the date of delivery thereof to the effect that: (i) the Indenture and the performance by the Finance Authority of its obligations thereunder have been duly authorized, and the Indenture has been duly executed and delivered by the Finance Authority and constitutes the legal, valid and binding agreement of the Finance Authority, enforceable in accordance with its terms; (ii) such Additional Bonds have been duly authorized, sold, executed and delivered by the Finance Authority, and are valid and binding obligations of the Finance Authority enforceable in accordance with their terms; and (iii) all resolutions and actions of the Finance Authority relating to the documents in question and all related proceedings comply with all rules and regulations of the Finance Authority, and all approvals or other actions required to be obtained or taken by the Finance Authority under the Finance Authority Act have been obtained or taken as required; (c) A written order, as to the delivery of such Additional Bonds, and as to the detailed disbursement of the proceeds in accordance with the Indenture, signed by an Authorized Officer; (d) A copy of the resolution adopted and approved by the Finance Authority, authorizing the execution and delivery of the Indenture and the issuance and sale of such Additional Bonds, certified by an Authorized Officer; (e) Such further documents, moneys and securities as are required by the Indenture; (f) With respect to each series of Additional Bonds, a Cash Flow Certificate to the effect that, immediately after the issuance of such series of Additional Bonds, Revenues reasonably expected to be received in each Fiscal Year, together with moneys expected to be held in the Funds and Accounts, will at least equal Debt Service in each such Fiscal Year; provided, however, that such Certificate will not be required in the case of Refunding Bonds, if Debt Service in each Fiscal Year after giving effect to the issuance of such Refunding Bonds is equal to or less than such requirements before giving effect to the issuance of such Refunding Bonds; (g) A certificate of an Authorized Officer that upon delivery of and payment for each series of Additional Bonds, the amount on deposit in the Debt Service Reserve Account, including any amount to be deposited therein from the proceeds of such series of Additional Bonds, is at least equal to the Debt Service Reserve Requirement; and 22 (h) A certificate of an Authorized Officer that Indiana Code 4-4-11-15(a)(9), as amended (which grants the Finance Authority the power to issue bonds), has not been repealed or amended in a manner that would adversely affect the rights of the owners of such Additional Bonds. LIQUIDITY FACILITY AND CONTINUING COVENANT AGREEMENT FOR CERTAIN OUTSTANDING PARITY BONDS General The then remaining outstanding Series 2008 A-1 Convention Center Bonds, which, following the issuance of the Series 2015 A Bonds, will be on parity with the Series 2015 A Bonds, have been directly purchased pursuant to a Continuing Covenant Agreement, as described herein. The then remaining outstanding Series 2008 A-2 Convention Center Bonds, which, following the issuance of the Series 2015 A Bonds, will be on parity with the Series 2015 A Bonds, are supported by a Liquidity Facility from a Liquidity Provider with respect to the Purchase Price thereof, as described herein: Expiration Date Principal Amount Purchased or Commitment Banc of America Preferred Funding Corporation, as Series 2008 A-1 Index Floating Rate Bank for Series 2008 A-1 Bonds under Series 2008 A-1 Continuing Covenant Agreement Interest Rate Mode: Series 2008 A-1 Index Floating Rate April 1, 2017 $39,075,000.00* BMO Harris Bank N.A., as Series 2008 A-2 Liquidity Provider for Series 2008 A-2 Liquidity Facility Interest Rate Mode: Weekly February 3, 2016 $50,370,360.55* Convention Center Bonds Liquidity Provider/Facility – Continuing Covenant Agreement Series 2008 A-1 Convention Center Bonds Series 2008 A-2 Convention Center Bonds * Expected as of the date of issuance of the Series 2015 A Bonds. Liquidity Facility Liquidity to pay the Purchase Price of the Series 2008 A-2 Convention Center Bonds while bearing interest at a Daily Rate or Weekly Rate, as described above, that are tendered for purchase but not remarketed will be provided by BMO Harris Bank N.A. (the “Series 2008 A-2 Liquidity Provider”) pursuant to the Standby Bond Purchase Agreement, dated as of February 1, 2014, between the Finance Authority, the Trustee and the Series 2008 A-2 Liquidity Provider (the “Series 2008 A-2 Liquidity Facility”). Under the Series 2008 A-2 Liquidity Facility, the Series 2008 A-2 Liquidity Provider agrees to purchase the Series 2008 A-2 Convention Center Bonds bearing interest at a Daily Rate or a Weekly Rate tendered for purchase but not remarketed, up to the amount of the Available Principal Commitment (as defined herein), plus the lesser of (i) the Available Interest Commitment (as defined herein) and (ii) interest accrued thereon to but excluding the date of purchase. As set forth above, the Series 2008 A-2 Liquidity Provider’s obligation to purchase the Series 2008 A-2 Convention Center Bonds will expire on February 3, 2016 (the “Expiration Date”), unless extended as described herein. See ‘APPENDIX C-2 – SUMMARY OF CERTAIN PROVISIONS OF LIQUIDITY FACILITY AND CONTINUING COVENANT AGREEMENT—Series 2008 A-2 Liquidity Facility.” The Finance Authority may, at any time, provide any letter of credit, line of credit, standby purchase agreement or other instrument which provides for the payment of the Purchase Price of any of the Series 2008 A-2 Convention Center Bonds upon the tender thereof in the event remarketing proceeds are insufficient therefor (any 23 such instrument, an “Alternate Liquidity Facility” and, together with the Series 2008 A-2 Liquidity Facility, each a “Liquidity Facility”), issued by any bank, insurance company, pension fund, other financial institution or public body politic or corporate of the State (any such institution or public body, a “Liquidity Provider”), in substitution for the Liquidity Facility currently in effect, upon the satisfaction of certain conditions. In addition, the Finance Authority may, at any time, provide any letter of credit, insurance policy, surety bond, line of credit or other instrument which secures or guarantees the payment of principal of and interest on the Series 2008 A-2 Convention Center Bonds (any such an instrument, a “Credit Enhancement”), issued by any bank, insurance company, pension fund, other financial institution (any such institution, a “Credit Provider”), upon the satisfaction of certain conditions. See “APPENDIX C-2 – SUMMARY OF CERTAIN PROVISIONS OF LIQUIDITY FACILITY AND CONTINUING COVENANT AGREEMENT—Alternate Liquidity Facility; Credit Enhancement.” Continuing Covenant Agreement The Series 2008 A-1 Convention Center Bonds have been directly purchased by Banc of America Preferred Funding Corporation (“Bank of America,” also defined herein as the “Series 2008 A-1 Index Floating Rate Bank”) under the terms of the Continuing Covenant Agreement, dated as of October 1, 2013, between the Finance Authority and the Series 2008 A-1 Index Floating Rate Bank (the “Series 2008 A-1 Continuing Covenant Agreement”). See “APPENDIX C-2 — SUMMARY OF CERTAIN PROVISIONS OF LIQUIDITY FACILITY AND CONTINUING COVENANT AGREEMENT—Continuing Covenant Agreement.” For a detailed description of the Series 2008 A-2 Liquidity Facility and the Series 2008 A-1 Continuing Covenant Agreement, see “APPENDIX C-2—SUMMARY OF CERTAIN PROVISIONS OF LIQUIDITY FACILITY AND CONTINUING COVENANT AGREEMENT.” INDIANA FINANCE AUTHORITY General The Finance Authority is a public body politic and corporate, not a state agency, but an independent public instrumentality under the Finance Authority Act. Though separate from the State, the exercise by the Finance Authority of its powers constitutes an essential public function. The Finance Authority has no taxing power, and any bonds issued by the Finance Authority do not constitute indebtedness of the State within the meaning or application of any constitutional provision or limitation. Organization, Membership The Finance Authority board of directors consists of the State Budget Director (or the State Budget Director’s designee), who serves as Chairman of the Finance Authority, the Treasurer of the State (or the Treasurer of State’s designee), and three members appointed by the Governor. No more than two of the Governor’s appointees may be members of the same political party. In addition, the Governor’s appointees must be residents of the State, serve for terms of four years and until their successors are appointed and qualified and may be reappointed by the Governor. The members of the Finance Authority elect one of the members to serve as Vice Chairman and other officers as they may determine. Members are entitled to reimbursement for travel expenses and other expenses actually incurred in connection with their duties as provided by law, but are not entitled to any salary per diem while performing their duties. Any three members of the Finance Authority constitute a quorum and the affirmative votes of at least three members are necessary for action to be taken by the Finance Authority. The following persons comprise the Finance Authority: Christopher D. Atkins*, Chairman of the Finance Authority. Residence: Indianapolis, Indiana. Principal occupation: Director of Indiana’s Office of Management and Budget. Kelly Mitchell, Treasurer of State and Vice Chairman of the Finance Authority. Residence: Indianapolis, Indiana. Principal occupation: Treasurer of State. 24 Harry F. McNaught, Jr., appointed member; term expired May 15, 2011**. Residence: Carmel, Indiana. Principal occupation: President and CEO, Denison Properties. Owen B. Melton, Jr., appointed member; term expired May 15, 2014**. Residence: Carmel, Indiana. Principal occupation: Retired (former Chief Executive Officer of First Indiana Bank, N.A.). Kerry M. Stemler, appointed member; term expires May 15, 2016. Residence: Sellersburg, Indiana. Principal occupation: President and CEO, KM Stemler Co. Inc. and KM Stemler Trucking Inc. The financial affairs of the Finance Authority, including the issuance of bonds, are managed by the Public Finance Director of the State and employees of the Finance Authority. Dennis L. Bassett is the Public Finance Director of the State. * Under the Finance Authority Act, the State Budget Director or the State Budget Director's designee is the Chairman of the Indiana Finance Authority. Christopher D. Atkins has been designated by the State Budget Director to serve as the Chairman of the Indiana Finance Authority for all purposes. ** Pursuant to the Act, a Finance Authority member continues to serve in such capacity until a successor member is appointed. OTHER PARTIES TO FINANCING Indiana Stadium and Convention Building Authority The Building Authority was established by the General Assembly in 2005 as a body both corporate and politic pursuant to Indiana Code 5-1-17 (the “Building Authority Act”). According to the Building Authority Act, the Building Authority was created as an instrumentality of the State, to acquire, construct, equip, own, lease and finance facilities for lease to or for the benefit of a capital improvement board. The Board of Directors of the Building Authority consists of seven members, four of whom are appointed by the Governor of the State (the “Governor”) (with the President Pro Tempore of the Senate and the Speaker of the House of Representatives each making one recommendation), two of whom are appointed by the Mayor of the City of Indianapolis (the “Mayor”) and one of whom is appointed by the Governor after having been nominated by the county fiscal body of a county that is contiguous to Marion County as further set forth in the Building Authority Act. Each member must be a resident of the State and with the exception of the member appointed by the Governor upon the nomination of the contiguous county, the members each serve a three year term. The remaining member serves a one year term. Each member may be reappointed to subsequent terms. The Governor shall nominate an Executive Director for the Building Authority, such nomination being subject to the veto power of the Mayor. Also, the Governor shall appoint a member of the Board of Directors to serve as Chair of the Board of Directors. The Board of Directors shall elect one of the members to be Vice Chair and another member to be Secretary-Treasurer. The Board of Directors may also elect an Assistant Secretary-Treasurer. A majority of the members constitutes a quorum and the consensus of a majority is necessary to authorize any action. The following persons comprise the Board of Directors of the Building Authority: David R. Frick, Chair of the Board of Directors of the Building Authority. Residence: Indianapolis, Indiana. Principal occupation: Retired (former Counsel with Faegre Baker Daniels LLP). Charles E. Golden, Secretary-Treasurer of the Board of Directors of the Building Authority. Residence: Indianapolis, Indiana. Principal occupation: Retired (former Executive Vice President and Chief Financial Officer of Eli Lilly and Company and a former member of its Board of Directors). 25 Joseph M. Perkins, Jr., Assistant Secretary-Treasurer of the Board of Directors of the Building Authority. Residence: Carmel, Indiana. Principal occupation: Senior Attorney for the Cummins Power Generation Business Unit. John M. Mutz, Member of the Board of Directors of the Building Authority. Indianapolis, Indiana. Principal occupation: Consultant and private investor. Residence: John T. Thompson, Member of the Board of Directors of the Building Authority. Residence: Indianapolis, Indiana. Principal occupation: President/CEO, Thompson Distribution Co., Inc./First Electric Supply Co., Indianapolis, Indiana. Joseph E. Loftus, Member of the Board of Directors of the Building Authority. Indianapolis, Indiana. Principal Occupation: Attorney at Barnes & Thornburg LLP. Residence: Steve Schwartz, Member of the Board of Directors of the Building Authority. Noblesville, Indiana. Principal Occupation: President, Schwartz’s, Inc. Residence: The Executive Director of the Building Authority is John P. Klipsch, who resides in Indianapolis, Indiana. Indiana Office of Management and Budget The OMB was established by the General Assembly in 2005 pursuant to Indiana Code 4-3-22 (the “OMB Act”) to provide financial oversight and a management mechanism to restore the soundness of the State’s budget process, to ensure that effective financial management policies are implemented throughout state government, to coordinate all functions related to budgeting and controlling spending in state government, to measure the performance of government activities, and to subject state laws and regulations to a rigorous cost-benefit analysis. The Director of the OMB is appointed by the Governor, reports directly to the Governor and is the Chief Financial Officer of the State. The Director of the OMB may also serve as the Director of the Budget Agency unless the Governor appoints a separate individual to serve as the Director of the Budget Agency. If the same individual holds both offices, such individual is not entitled to receive any salary or other compensation as Director of the Budget Agency. The Governor has appointed Christopher D. Atkins as the Director of the OMB. The Directors of the Budget Agency (if different from the Director of the OMB), the Department of Revenue, the Department of Local Government Finance and the Finance Authority report to the Director of the OMB and administer their offices and agencies in conformity with the fiscal management policies and procedures established by the OMB which policies and procedures have been approved by the Governor. Pursuant to Executive Order 05-02, the OMB oversees and coordinates the functions, responsibilities and duties of the Public Employees Retirement Fund (PERF), the Teachers’ Retirement Fund (TRF) and the State Board of Accounts to the fullest extent permitted by law. There is created within the OMB the Division of Government Efficiency and Financial Planning which shall conduct operational and procedural audits of state government, perform financial planning, design and implement efficiency projects, and carry out such other responsibilities as may be designated by the Director of the OMB. The Director of the OMB appoints a Director of the Division of Government Efficiency and Financial Planning, subject to the approval of the Governor, who serves at the pleasure of the Director of the OMB. Capital Improvement Board of Managers of Marion County The Board was created pursuant to the provisions of Indiana Code 36-10-9 (the “Board Act”) and is authorized thereunder, on behalf of Marion County, among other things, to acquire, construct, convey, lease, control and operate capital improvements and to issue bonds in the name of the County to finance the costs of such capital improvements. The Board is authorized to sell such capital improvements to, and to lease the same from, the 26 Building Authority and to secure its rental obligations under such leases by a pledge of certain excise taxes and other revenues, if any, deposited in the Capital Improvement Bond Fund created under the Board Act. The Board consists of nine members, six of whom are appointed by the Mayor, one of whom is appointed by the Marion County Board of Commissioners, one of whom is appointed by the Indianapolis City-County Council from its membership and one of whom is appointed jointly by majority vote of a body consisting of one member of the board of county commissioners of each county in which the Regional County Food and Beverage Tax (as defined herein) is in effect on January 1 of the year of the appointment. See “APPENDIX B”—SUMMARY OF LOCAL REVENUES.” The Board Act requires that one of the members of the Board appointed by the Mayor be engaged in the hotel or motel business in Marion County and that no more than four of the six members of the Board appointed by the Mayor and no more than one of the two members of the Board appointed by the Marion County Board of Commissioners be of the same political party. The Board Act provides that a majority of the members of the Board constitutes a quorum for the conduct of Board business and that the concurrence of a majority of the Board is necessary to authorize any action. LITIGATION At the time of delivery of the Series 2015 A Bonds, the Finance Authority will certify that there is no action, suit, proceeding, inquiry or investigation of any nature, at law or in equity, before or by any court, government agency, public board or body, pending or, to the knowledge of the Finance Authority, threatened, affecting the corporate existence of the Finance Authority or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the issuance, sale, execution or delivery of the Series 2015 A Bonds, the adoption of the Resolution, or the execution and delivery of the Indenture, the Loan Agreement, the Contract of Purchase (as defined herein), the State Continuing Disclosure Agreement (as defined herein), (collectively, the “Finance Authority Documents”), the Series 2015 A Bonds and this Official Statement or in any way contesting or affecting in any manner (1) the validity or enforceability of the Series 2015 A Bonds, the Resolution or the Finance Authority Documents, (2) the power or authority of the Finance Authority to adopt the Resolution, issue, sell, execute or deliver the Series 2015 A Bonds, or to execute or deliver the Finance Authority Documents and this Official Statement, (3) the transactions contemplated by the Resolution, the Finance Authority Documents or this Official Statement or (4) the power or authority of the Finance Authority to carry out the terms and provisions of the Series 2015 A Bonds, the Resolution or the Finance Authority Documents. At the time of delivery of the Series 2015 A Bonds, the Building Authority will certify that, to the best of its knowledge, neither the existence of the Building Authority, nor the title of any of the Building Authority’s officers to their respective offices is being contested, nor is there any litigation of any nature pending or, to its knowledge, threatened in court or before or by any public body, board or agency (either State or federal), restraining, enjoining, seeking to restrain or enjoin, or challenging the authorization, execution or delivery of the Loan Agreement, the Series 2015 A Convention Center Notes, the Lease and the Revenue Deposit Agreement (collectively, the “Building Authority Documents”), or in any manner questioning the authority or proceedings for the authorization, execution or delivery of the Building Authority Documents. At the time of delivery of the Series 2015 A Bonds, the OMB will certify that there is no action, suit, proceeding, inquiry or investigation of any nature, at law or in equity, before or by any court, government agency, public board or body, pending or, to the knowledge of the OMB, threatened, affecting the existence of the OMB or the titles of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the execution and delivery of the Lease, the Sublease and the Revenue Deposit Agreement (the “OMB Documents”) or in any way contesting or affecting in any manner (1) the validity or enforceability of the OMB Documents, (2) the power or authority of the OMB to execute or deliver the OMB Documents, (3) the transactions contemplated by the OMB Documents or (4) the power or authority of the OMB to carry out the terms and provisions of the OMB Documents. At the time of delivery of the Series 2015 A Bonds, the Board will certify that there is no action, suit, proceeding, inquiry or investigation of any nature, at law or in equity, before or by any court, governmental agency, public board or body, pending or, to the knowledge of the Board, threatened, affecting the corporate existence of the Board or contesting the rights of its officers to their respective offices, or affecting or seeking to prohibit, restrain or enjoin the execution or delivery of the Board Continuing Disclosure Agreement (as defined herein), the Sublease and the Revenue Deposit Agreement (collectively, the “Board Documents”) or in any way contesting or affecting 27 the validity or enforceability of the Board Documents, the validity, the corporate existence or the powers of the Board, or any authority, right or power of the Board for the execution or delivery of the Board Documents, nor is there any basis therefor, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Board Documents. For a discussion of litigation involving the State, see “APPENDIX A – FINANCIAL AND ECONOMIC STATEMENT FOR STATE OF INDIANA – LITIGATION.” TAX MATTERS In the opinion of Barnes & Thornburg LLP, Indianapolis, Indiana (“Bond Counsel”), under existing laws, interest on the Series 2015 A Bonds is excludable from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended and in effect on the date of issuance of the Series 2015 A Bonds (the “Code”). Concurrently with the issuance of the Series 2015 A Bonds, the Finance Authority will issue its Series 2015 A Stadium Bonds. In the opinion of Bond Counsel, pursuant to Section 1.150-1(c) of the Treasury Regulations on Income Tax, the Series 2015 A Bonds and the Series 2015 A Stadium Bonds will be treated as one issue of bonds. The opinion of Bond Counsel is based on certain certifications, covenants and representations of the Finance Authority and the Building Authority and is conditioned on continuing compliance therewith. In the opinion of Bond Counsel, under existing laws, interest on the Series 2015 A Bonds is exempt from income taxation in the State for all purposes, except the State financial institutions tax. See Appendix G for the form of opinion of Bond Counsel. The Code imposes certain requirements which must be met subsequent to the issuance of the Series 2015 A Bonds as a condition to the excludability of the interest on the Series 2015 A Bonds from gross income for federal income tax purposes. Noncompliance with such requirements may cause interest on the Series 2015 A Bonds to be included in gross income for federal income tax purposes retroactively to the date of issue, regardless of the date on which noncompliance occurs. Should the Series 2015 A Bonds bear interest that is not excludable from gross income for federal income tax purposes, the market value of the Series 2015 A Bonds would be materially and adversely affected. It is not an event of default if interest on the Series 2015 A Bonds is not excludable from gross income for federal income tax purposes pursuant to any provision of the Code which is not in effect on the date of issuance of the Series 2015 A Bonds. The interest on the Series 2015 A Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. However, interest on the Series 2015 A Bonds is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The Series 2015 A Bonds are not “qualified tax-exempt obligations” for purposes of Section 265(b)(3) of the Code. Indiana Code 6-5.5 imposes a franchise tax on certain taxpayers (as defined in Indiana Code 6-5.5) which, in general, include all corporations which are transacting the business of a financial institution in the State. 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 Series 2015 A Bonds is excludable from gross income for federal income tax purposes and exempt from State income tax, the accrual or receipt of interest on the Series 2015 A Bonds may otherwise affect an owner’s federal or state tax liability. The nature and extent of these other tax consequences will depend upon the owner’s particular tax status and the owner’s other items of income or deduction. Bond Counsel expresses no opinion regarding any other such tax consequences. Prospective purchasers of the Series 2015 A Bonds should consult their own tax advisors with regard to the other tax consequences of owning the Series 2015 A Bonds. The foregoing does not purport to be a comprehensive description of all of the tax consequences of owning the Series 2015 A Bonds. Prospective purchasers of the Series 2015 A Bonds should consult their own tax advisors with respect to the foregoing and other tax consequences of owning the Series 2015 A Bonds. 28 ORIGINAL ISSUE DISCOUNT The initial public offering price of the Series 2015 A Bonds maturing on February 1, 2037 (the “Discount Bonds”), is less than the principal amount thereof payable at maturity. As a result, the Discount Bonds will be considered to be issued with original issue discount. The difference between the initial public offering price of the Discount Bonds, as set forth on the inside front cover page of this Official Statement (assuming it is the first price at which a substantial amount of the Discount Bonds is sold) (the “Issue Price”), and the amount payable at its maturity, will be treated as “original issue discount.” The original issue discount on the Discount Bonds is treated as accruing daily over the term of the Discount Bonds on the basis of the yield to maturity determined on the basis of compounding at the end of each six-month period (or shorter period from the date of the original issue) ending on February 1 and August 1 (with straight line interpolation between compounding dates). An owner who purchases a Discount Bond in the initial public offering at the Issue Price will treat the accrued amount of original issue discount as interest which is excludable from the gross income of the owner of that Discount Bond for federal income tax purposes. Section 1288 of the Code provides, with respect to tax-exempt obligations such as the Discount Bonds, that the amount of original issue discount accruing each period will be added to the owner’s tax basis for the Discount Bonds. Such adjusted tax basis will be used to determine taxable gain or loss upon disposition of the Discount Bonds (including sale, redemption or payment at maturity). Owners of Discount Bonds who dispose of Discount Bonds prior to maturity should consult their tax advisors concerning the amount of original issue discount accrued over the period held and the amount of taxable gain or loss upon the sale or other disposition of such Discount Bonds prior to maturity. The original issue discount that accrues in each year to an owner of a Discount Bond may result in certain collateral federal income tax consequences. Owners of any Discount Bonds should be aware that the accrual of original issue discount in each year may result in a tax liability from these collateral tax consequences even though the owners of such Discount Bonds will not receive a corresponding cash payment until a later year. Owners who purchase Discount Bonds in the initial public offering but at a price different from the Issue Price should consult their own tax advisors with respect to the tax consequences of the ownership of the Discount Bonds. The Code contains certain provisions relating to the accrual of original issue discount in the case of subsequent purchasers of bonds such as the Discount Bonds. Owners who do not purchase Discount Bonds in the initial public offering should consult their own tax advisors with respect to the tax consequences of the ownership of the Discount Bonds. Owners of Discount Bonds should consult their own tax advisors with respect to the state and local tax consequences of owning the Discount Bonds. It is possible under the applicable provisions governing the determination of state or local income taxes that accrued interest on the Discount Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment until a later year. AMORTIZABLE BOND PREMIUM The initial public offering prices of the Series 2015 A Bonds maturing on February 1, 2016 through February 1, 2035 (collectively, the “Premium Bonds”), are greater than the principal amounts thereof payable at maturity or on an earlier call date. As a result, the Premium Bonds will be considered to be issued with amortizable bond premium (the “Bond Premium”). An owner who acquires a Premium Bond in the initial public offering will be required to adjust the owner’s basis in the Premium Bond downward as a result of the amortization of the Bond Premium, pursuant to Section 1016(a)(5) of the Code. Such adjusted tax basis will be used to determine taxable gain or loss upon the disposition of the Premium Bonds (including sale, redemption or payment at maturity). The amount of amortizable Bond Premium will be computed on the basis of the taxpayer’s yield to maturity, with compounding at the end of each accrual period. Rules for determining (i) the amount of amortizable Bond Premium and (ii) the amount amortizable in a particular year are set forth in Section 171(b) of the Code. No income tax deduction for the amount of amortizable Bond Premium will be allowed pursuant to Section 171(a)(2) of the Code, but amortization of Bond Premium may be taken into account as a reduction in the amount of tax-exempt income for 29 purposes of determining other tax consequences of owning the Premium Bonds. Owners of the Premium Bonds should consult their tax advisors with respect to the precise determination for federal income tax purposes of the treatment of Bond Premium upon the sale or other disposition of such Premium Bonds and with respect to the state and local tax consequences of owning and disposing of the Premium Bonds. Special rules governing the treatment of Bond Premium, which are applicable to dealers in tax-exempt securities, are found in Section 75 of the Code. Dealers in tax-exempt securities are urged to consult their own tax advisors concerning the treatment of Bond Premium. ENFORCEABILITY OF REMEDIES The enforceability of the rights and remedies of the Trustee or holders of the Series 2015 A Bonds under the Indenture, the enforceability of the rights and remedies of the Finance Authority and the Building Authority under the Loan Agreement, the enforceability of the rights and remedies of any other party under any other agreement in this financing, and the availability of remedies to any party seeking to enforce the pledge of the Trust Estate relating to the Series 2015 A Bonds, including the pledge of the rentals under the Lease and Sublease (collectively, the “Pledges”), are in many respects dependent upon regulatory and judicial actions, including specifically Title 11 of the United States Code (the United States Bankruptcy Code). The rights and remedies provided (or which may be provided) under the Indenture, the Loan Agreement, the Lease, the Sublease and any other agreement in this financing, and the rights and remedies of any party seeking to enforce the Pledges, may not be readily available or may be limited. The various legal opinions to be delivered at the time of issuance of the Series 2015 A Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights and by the exercise of judicial discretion in appropriate cases. APPROVAL OF LEGAL PROCEEDINGS Certain legal matters incidental to the authorization and issuance of the Series 2015 A Bonds are subject to the approving opinions of Barnes & Thornburg LLP, Indianapolis, Indiana, Bond Counsel to the Finance Authority. See “APPENDIX G—FORM OF OPINION OF BOND COUNSEL.” Certain legal matters will be passed upon for the Underwriters by Krieg DeVault LLP, Indianapolis, Indiana. The various legal opinions delivered at the time of issuance and delivery of the Series 2015 A 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 State of Indiana and the United States of America 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). Such legal opinions express the professional judgment of the attorneys rendering the opinions on 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 transaction opined upon or of the future performance of parties to such transaction. The rendering of an opinion does not guarantee the outcome of any legal dispute that may arise out of the transaction. See “ENFORCEABILITY OF REMEDIES.” UNDERWRITING The Underwriters have agreed, subject to certain conditions, to purchase all, but not less than all, of the Series 2015 A Bonds from the Finance Authority at a purchase price of $47,910,041.31 (which represents a par amount of $44,710,000 less an Underwriters’ discount of $193,324.54 and plus a net original issue premium of $3,393,365.85. The Underwriters will be obligated to purchase all such Series 2015 A Bonds if any of such Series 2015 A Bonds are purchased. The Series 2015 A Bonds may be offered and sold to certain dealers (including underwriters and other dealers depositing such Series 2015 A Bonds into investments trusts) at yields higher than the public 30 offering yields set forth on the insider front cover page of this Official Statement, and such public offering yields may be changed from time to time by the Underwriters. The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Certain of the underwriters and their respective affiliates have provided, and may in the future provide, a variety of these services to the issuer and to persons and entities with relationships with the issuer, for which they received or will receive customary fees and expenses. In the ordinary course of their various business activities, the underwriters and their respective affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of the issuer (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the issuer. The underwriters and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments. Also see “RELATED PARTIES”. Wells Fargo Securities is the trade name for certain securities-related capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, Wells Fargo Bank, National Association. Wells Fargo Bank, National Association ("WFBNA"), one of the underwriters of the Series 2015 A Bonds, has entered into an agreement (the "Distribution Agreement") with its affiliate, Wells Fargo Advisors, LLC ("WFA"), for the distribution of certain municipal securities offerings, including the Series 2015 A Bonds. Pursuant to the Distribution Agreement, WFBNA will share a portion of its underwriting or remarketing agent compensation, as applicable, with respect to the Series 2015 A Bonds with WFA. WFBNA also utilizes the distribution capabilities of its affiliate Wells Fargo Securities, LLC (“WFSLLC”), for the distribution of municipal securities offerings, including the Series 2015 A Bonds. In connection with utilizing the distribution capabilities of WFSLLC, WFBNA pays a portion of WFSLLC’s expenses based on its municipal securities transactions. WFBNA, WFSLLC, and WFA are each wholly-owned subsidiaries of Wells Fargo & Company. Citigroup Global Markets Inc., an underwriter of the Series 2015 A Bonds, has entered into a retail distribution agreement with each of TMC Bonds L.L.C. (“TMC”) and UBS Financial Services Inc. (“UBSFS”). Under these distribution agreements, Citigroup Global Markets Inc. may distribute municipal securities to retail investors through the financial advisor network of UBSFS and the electronic primary offering platform of TMC. As part of this arrangement, Citigroup Global Markets Inc. may compensate TMC (and TMC may compensate its electronic platform member firms) and UBSFS for their selling efforts with respect to the Series 2015 A Bonds. “US Bancorp” is the marketing name of U.S. Bancorp and its subsidiaries, including U.S. Bancorp Investments, Inc. (“USBII”), which is serving as an Underwriter of the Series 2015 A Bonds. J.P. Morgan Securities LLC (“JPMS”), one of the Underwriters of the Series 2015 A Bonds, has entered into negotiated dealer agreements (each, a “Dealer Agreement”) with each of Charles Schwab & Co., Inc. (“CS&Co.”) and LPL Financial LLC (“LPL”) for the retail distribution of certain securities offerings at the original issue prices. Pursuant to each Dealer Agreement, each of CS&Co. and LPL may purchase Series 2015 A Bonds from JPMS at the original issue price less a negotiated portion of the selling concession applicable to any Series 2015 A Bonds that such firm sells. BMO Capital Markets is the trade name for certain capital markets and investment banking services of Bank of Montreal and its subsidiaries, including BMO Capital Markets GKST Inc. which is a direct, wholly-owned subsidiary of BMO Financial Corp. which is itself a wholly-owned subsidiary of Bank of Montreal. 31 RELATED PARTIES Goldman Sachs is the provider of the Convention Center Swap Agreement, which, upon the issuance of the Series 2015 A Bonds, will be terminated. In connection with such termination, Goldman Sachs will receive a termination payment of $34,700,000, which will be paid with the proceeds of the Series 2015 A Bonds. Goldman, Sachs & Co., one of the underwriters of the Series 2015 A Bonds, is an affiliate of Goldman Sachs. The Series 2015 A Bonds are being issued in part to provide funds to currently refund a portion of the Series 2008 A-1 Convention Center Bonds. The current holder of the Series 2008 A-1 Convention Center Bonds is Banc of America Preferred Funding Corporation, an affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated, one of the underwriters of the Series 2015 A Bonds. Joseph E. Loftus, a member of the Board of Directors of the Building Authority, which constructed and owns the Convention Center Expansion Project, is a partner with Barnes & Thornburg LLP, which is serving as Bond Counsel to the Finance Authority in this financing. RATINGS Standard & Poor’s Ratings Services (“S&P”), Moody’s Investors Service (“Moody’s”) and Fitch Ratings (“Fitch”) have assigned ratings of “AA+ (Stable),” “Aa2 (Stable)” and “AA+ (Stable),” respectively, to the Series 2015 A Bonds. These ratings reflect only the views of S&P, Moody’s and Fitch. An explanation of the ratings may be obtained from S&P at 55 Water Street, New York, New York 10041, from Moody’s at 7 World Trade Center, 250 Greenwich Street, New York, New York 10007 and from Fitch at One State Street Plaza, New York, New York 10004. The ratings are not a recommendation to buy, sell or hold any of the Series 2015 A Bonds. There is no assurance that the ratings will remain in effect for any given period of time or that a rating will not be revised downward or withdrawn entirely by S&P, Moody’s or Fitch if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of a rating may have an adverse effect on the market price or marketability of the Series 2015 A Bonds. The Underwriters have undertaken no responsibility either to bring to the attention of the owners of the Series 2015 A Bonds any proposed revision or withdrawal of the rating of the Series 2015 A Bonds or to oppose any such proposed revision or withdrawal. Other than the reporting obligation of the Finance Authority pursuant to the State Continuing Disclosure Agreement, the Finance Authority has not undertaken any responsibility to bring to the attention of the owners of the Series 2015 A Bonds any proposed change in or withdrawal of such ratings once received or to oppose any such proposed revision. VERIFICATION OF MATHEMATICAL COMPUTATIONS The accuracy of certain mathematical computations: (i) showing the adequacy of the cash held in the Escrow Fund to satisfy certain requirements relating to the payment of the principal of and interest on the Refunded Series 2008 A-2 Bonds when due to and including the date of redemption; and (ii) supporting the conclusion of Barnes & Thornburg LLP, Indianapolis, Indiana, Bond Counsel, that the Series 2015 A Bonds are not arbitrage bonds under Section 148 of the Code; will be verified by Crowe Horwath LLP, Indianapolis, Indiana, independent certified public accountants. Such verifications shall be based upon certain information and assumptions supplied by the Finance Authority and the Underwriters. CONTINUING DISCLOSURE In accordance with the requirements of Rule 15c2-12 (the “ SEC Rule) adopted by the Securities and Exchange Commission under the Security Exchange Act of 1934, as amended, the Finance Authority and the State will enter into a Continuing Disclosure Underwriting Agreement (the “State Continuing Disclosure Agreement”), and the Board will enter into a Continuing Disclosure Underwriting Agreement (the “Board Continuing Disclosure Agreement”). The State Continuing Disclosure Agreement provides that so long as the Series 2015 A Bonds remain 32 outstanding, the State will annually provide certain financial information and operating data to the Municipal Securities Rulemaking Board (the “MSRB”), in an electronic format prescribed by the MSRB, in compliance with the State Continuing Disclosure Agreement. The Board Continuing Disclosure Agreement provides that the Board will annually provide certain financial information and operating data to the MSRB in an electronic format prescribed by the MSRB, in compliance with the Board Continuing Disclosure Agreement. In addition, in accordance with the Rule, the Finance Authority (and the State, but only to the extent the State has actual knowledge of such event) has committed in the State Continuing Disclosure Agreement to provide notice of certain events to the MSRB. Submissions to the MSRB will be made through its Electronic Municipal Market Access (“EMMA”) system. For a form of the State Continuing Disclosure Agreement and the Board Continuing Disclosure Agreement, see APPENDIX D – 1 – FORM OF STATE CONTINUING DISCLOSURE AGREEMENT” and “APPENDIX D – 2 – FORM OF BOARD CONTINUING DISCLOSURE AGREEMENT.” The purpose of the State Continuing Disclosure Agreement and the Board Continuing Disclosure Agreement is to enable the Underwriters to purchase the Series 2015 A Bonds by providing for an undertaking by each “obligated person” (within the meaning of the SEC Rule) in satisfaction of the SEC Rule. Such undertakings are solely for the benefit of the owners of the Series 2015 A Bonds and create no new contractual or other right for, nor can they be relied upon by, the SEC, the Underwriters, brokers, dealers, municipal securities dealers, potential customers, other obligated persons or any other third party. The sole and exclusive remedy against the State, the Finance Authority or the Board for any failure to carry out any provision of the State Continuing Disclosure Agreement or the Board Continuing Disclosure Agreement, as applicable, will be for specific performance of the State’s, the Finance Authority’s or the Board’s disclosure obligations under their respective undertakings and not for money damages of any kind or in any amount or any other remedy. The State’s, the Finance Authority’s or the Board’s failure to honor their respective covenants under such undertakings will not constitute a breach or default of the Series 2015 A Bonds, the Indenture, the Loan Agreement, the Lease, the Sublease or any other agreement to which the Finance Authority or the Board are parties. The Finance Authority and its predecessors have been in compliance with all of their continuing disclosure contracts in all material respects during the last five years, except to the extent that the following is deemed to be material. The Finance Authority filed its most recent annual financial information with the MSRB, through the EMMA system, as required by applicable continuing disclosure undertakings in a timely fashion on January 23, 2014. However, in a single isolated instance in 2014, the financial information was inadvertently not posted on the EMMA system to certain CUSIP numbers associated with a single bond issue, the Finance Authority’s Tax-Exempt Private Activity Bonds (Ohio River Bridges East End Crossing Project), Series 2013 A and B. As a result, although the required financial information was generally available with respect to the Finance Authority, it was not available on the EMMA system under the links for such CUSIP numbers. The Finance Authority caused such financial information to be posted to those CUSIP numbers through an EMMA filing on April 15, 2014, by adding the necessary bonds and their CUSIP numbers to the prior annual disclosure filing. The Finance Authority has taken appropriate steps to prevent this from occurring in the future. In the previous five years, the State has complied, in all material respects, with any previous undertakings in a written contract or agreement that it entered into pursuant to subsection (b)(5) of the SEC Rule. In the past five years, except as described in this paragraph, the Board has filed all annual financial information, including its audited financial statements, and notices of certain events, which it was required to file pursuant to any previous undertakings in a written contract or agreement specified in paragraph (b)(5)(i) of Rule 15c2-12 promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. For the continuing disclosure undertaking agreement relating to the Marion County Convention and Recreational Facilities Authority Excise Taxes Lease Rental Revenue Refunding Senior Bonds, Series 2003 A (the "2003A Bonds"), subsequent to a partial defeasance of the 2003A Bonds, with respect to the remaining outstanding June 1, 2013 maturity of the 2003A Bonds, the Board failed to file the December 31, 2011 year ended audited financial statements and operating data required by such agreement. Because the 2003A Bonds were repaid and, therefore, no longer outstanding on June 1, 2013, the Board did not upon discovery of such failure file such December 31, 2011 financial information in respect of such 2003A Bonds. It is further noted that the Board timely filed such December 31, 2011 financial information in, and it is presently available in, the MSRB's EMMA system in respect of other bonds. In addition, the Board notes that in the previous five years, it has voluntarily provided to the MSRB's EMMA system some, but not all, notices of changes in the ratings of insurers that provide bond insurance for some of the bonds with respect to which the Board has entered into a continuing disclosure 33 undertaking agreement ("CIB Related Insured Bonds"). Only one of such series of CIB Related Insured Bonds, The Indianapolis Local Public Improvement Bond Bank Taxable Bonds, Series 2007 C (Indianapolis Colts, Inc. Project) (the "2007C Bonds") remains outstanding, and the information regarding current ratings of its insurer, as on file in the MSRB's EMMA system, appears to reflect its insurer's current rating information. Because such CIB Related Insured Bonds, other than the 2007C Bonds, were repaid and, therefore, no longer outstanding as of June 1, 2013, the Board did not upon discovery of such noted circumstance file such information in respect of such CIB Related Insured Bonds. No determination of the materiality of such circumstances is made by noting the foregoing. FINANCIAL ADVISOR Public Financial Management, Inc., Minneapolis, Minnesota (“Public Financial Management”) served as financial advisor to the Finance Authority with respect to the sale of the Series 2015 A Bonds and has prepared a Cash Flow Certificate to the effect that, immediately after the issuance of the Series 2015 A Bonds, Revenues reasonably expected to be received in each Fiscal Year, together with moneys expected to be held in the Funds and Accounts, will at least equal Debt Service in each such Fiscal Year. As the Finance Authority’s financial advisor, Public Financial Management has assisted in the preparation of this Official Statement and in other matters relating to the planning, structuring, rating and issuance of the Series 2015 A Bonds. In its role as financial advisor to the Finance Authority, Public Financial Management has not undertaken either to make an independent verification of or to assume responsibility for the accuracy or completeness of the information contained in this Official Statement and the appendices hereto. Public Financial Management is an independent financial advisory firm and is not engaged in the business of underwriting, trading or distributing tax-exempt securities or other public securities. MISCELLANEOUS Information contained in this Official Statement with respect to the Finance Authority and copies of the Indenture, the Loan Agreement, the Lease, the Sublease, the Revenue Deposit Agreement, the State Continuing Disclosure Agreement and the Board Continuing Disclosure Agreement referred to in this Official Statement may be obtained from the Indiana Finance Authority, One North Capitol, Suite 900, Indianapolis, Indiana 46204; Attention: Public Finance Director of the State of Indiana. This Official Statement is submitted in connection with the issuance and sale of the Series 2015 A Bonds and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement has been duly authorized and approved by the Finance Authority and duly executed and delivered on its behalf by the officials signing below. Any statements in this Official Statement involving matters of opinion, projections or estimates, whether or not expressly so stated, are intended as such and not as representations of fact. No representation is made that any of such statements will be realized. Neither any advertisement of the Series 2015 A Bonds nor this Official Statement is to be construed as constituting a contract or agreement between the Finance Authority and the purchasers or owners of the Series 2015 A Bonds. The references herein, and in the Appendices attached hereto, to the Indenture and the other documents referred to herein and in the Appendices are brief outlines of such provisions, and reference is made to such documents. Copies of the documents mentioned under this heading are on file at the office of the Finance Authority and following delivery of the Series 2015 A Bonds will be on file at the principal corporate trust office of the Trustee. The attached APPENDICES A, B, C, D, E, F and G are integral parts of this Official Statement and should be read in their entirety together with all foregoing statements. 34 The Finance Authority has approved this Official Statement. This Official Statement has been duly approved, executed and delivered by the Finance Authority. INDIANA FINANCE AUTHORITY By: /s/ Christopher D. Atkins Christopher D. Atkins, Chairman Attest: /s/ Dennis L. Bassett Dennis L. Bassett, Public Finance Director of the State of Indiana 35 PAGE INTENTIONALLY LEFT APPENDIX A FINANCIAL AND ECONOMIC STATEMENT FOR STATE OF INDIANA TABLE OF CONTENTS INTRODUCTION............................................................................................................................................................. 5 STRUCTURE OF STATE GOVERNMENT ................................................................................................................... 5 Division of Powers.................................................................................................................................................... 5 Executive Department ............................................................................................................................................... 5 Legislative Department ............................................................................................................................................. 6 Judicial Department .................................................................................................................................................. 6 FISCAL POLICIES .......................................................................................................................................................... 6 Fiscal Years .............................................................................................................................................................. 6 Accounting System ................................................................................................................................................... 6 Fund Structure .......................................................................................................................................................... 7 Budget Process.......................................................................................................................................................... 8 State Board of Finance .............................................................................................................................................. 9 Office of Management and Budget ......................................................................................................................... 10 Cash Management and Investments ........................................................................................................................ 10 Audits...................................................................................................................................................................... 10 2014 Financial Report ............................................................................................................................................. 11 STATE BUDGET PROFILE AND FINANCIAL RESULTS OF OPERATIONS ........................................................ 11 Operating Revenue ................................................................................................................................................. 11 General Fund Revenue Sources .............................................................................................................................. 11 Lottery and Gaming Revenue ................................................................................................................................. 13 Revenue History ..................................................................................................................................................... 13 Operating Expenditures .......................................................................................................................................... 14 Fund Balances ......................................................................................................................................................... 18 Revenue Forecast for Fiscal Years 2014 and 2015 ................................................................................................. 19 Combined Balance Statements ............................................................................................................................... 19 STATE INDEBTEDNESS.............................................................................................................................................. 21 Constitutional Limitations on State Debt ................................................................................................................ 21 Other Debt, Obligations .......................................................................................................................................... 21 Obligations Payable from Possible State Appropriations ....................................................................................... 21 Contingent Obligations ........................................................................................................................................... 26 Public Private Agreements .............................................................................................................................................. 30 Other Entities Issuing Debt ............................................................................................................................................. 31 INDIANA PUBLIC RETIREMENT SYSTEM AND STATE PENSION FUNDING OBLIGATIONS ...................... 31 INPRS and State Retirement Plans ......................................................................................................................... 31 State Pension Funding Obligations ......................................................................................................................... 48 ECONOMIC AND DEMOGRAPHIC INFORMATION ............................................................................................... 50 Summary ................................................................................................................................................................. 50 Population ............................................................................................................................................................... 51 Employment ............................................................................................................................................................ 52 Income .................................................................................................................................................................... 53 Gross Domestic Product ......................................................................................................................................... 54 Exports .................................................................................................................................................................... 55 Civil Rights Litigation ............................................................................................................................................ 57 Other Contingencies ............................................................................................................................................... 58 A-2 SCHEDULE OF TABLES Table 1 State Operating Revenue 14 Table 2 Expenditures 15 Table 3 Schedule of Fee Replacement Debt 17 Table 4 General Fund and Property Tax Replacement Fund Combined Statement of Actual and Estimated Unappropriated Reserve 20 Table 5 Schedule of Long Term Debt Obligations Payable from Possible State Appropriations 24 Table 6 Scheduled Principal and Interest Payments Obligations Payable from Possible State Appropriations 25 Table 7 Ratios of Outstanding Debt Subject to Possible Appropriation to Population and Personal Income 26 Table 8 Schedule of Long Term Debt Contingent Obligations 29 Table 9 Public Employees’ Retirement Fund Schedule of Funding Progress 35 Table 10 Public Employees’ Retirement Fund Schedule of Employer Contributions 35 Table 11 TRF Pre-1996 Account Schedule of Funding Progress 36 Table 12 TRF Pre-1996 Account Schedule of Contributions from the Employers and other Contributing Entities 37 Table 13 TRF 1996 Account Schedule of Funding Progress 37 Table 14 TRF 1996 Account Schedule of Contributions from the Employers and other Contributing Entities 38 Table 15 Other State Pension Funds Summary of Results of Actuarial Valuation as of June 30, 2012 39 Table 16 1977 Police Officers’ and Firefighters’ Pension Disability Fund Schedule of Funding Progress 40 Table 17 1977 Police Officers’ and Firefighters’ Pension Disability Fund Schedule of Employer Contributions 40 Table 18 Judges’ Retirement System Schedule of Funding Progress 41 Table 19 Judges’ Retirement System Schedule of Employer Contributions 41 Table 20 Prosecuting Attorneys’ Retirement Fund Schedule of Funding Progress 42 Table 21 Prosecuting Attorneys’ Retirement Fund Schedule of Employer Contributions 43 Table 22 Legislators’ Retirement System Schedule of Funding Progress 44 Table 23 Legislators’ Retirement System Schedule of Employer Contributions 44 A-3 Table 24 State Excise Police, Gaming Agent, Gaming Control Officer and Conservation Enforcement Officer’s Retirement Plan Schedule of Funding Progress 45 Table 25 State Excise Police, Gaming Agent, Gaming Control Officer and Conservation Enforcement Officers’ Retirement Plan Schedule of Employer Contributions 45 Table 26 Indiana State Police Pension Trust Schedule of Funding Progress 46 Table 27 Indiana State Police Pension Trust Schedule of Employer Contributions 47 Table 28 Public Employees’ Retirement Fund (Active, State-Related Portion, Not Including the PERF ASA) 47 Table 29 Indiana State Teachers’ Retirement Fund Pre 1996 Budgetary Impacts 48 Table 30 Indiana State Teachers’ Retirement Fund Pre 1996 Pension Stabilization Fund Balances 49 Table 31 Population Educational Attainment, Indiana Population 25 Years & Over 50 Table 32 Population Population, including Selected Indiana MSAs 51 Table 33 Employment Indiana High Wage Subsectors 51 Table 34 Employment Indiana Non-Farm Employment by Super Sector; December 2001 to December 2011 52 Table 35 Employment Unemployment Rate 52 Table 36 Income Growth in Per Capita Personal Income 53 Table 37 Gross Domestic Product by State Indiana Gross Domestic Product by Sector: 2001 to 2011 54 Table 38 Exports Annual Percentage Change 55 Table 39 Exports Indiana’s Leading Export Industries and Destinations 55 A-4 INTRODUCTION This Financial and Economic Statement (this “Appendix A”) for the State of Indiana (the “State”) includes a description of the State’s economic and fiscal condition, the results of operations and revenue and expenditure projections through the end of the biennium ending June 30, 2013. The information is compiled on behalf of the State by the State Budget Agency (the “Budget Agency”) and the Indiana Finance Authority and includes information and data taken from the Budget Agency’s unaudited reports. It also includes information obtained from other sources the State believes to be reliable. This Appendix A should be read in its entirety, together with any supplements. STRUCTURE OF STATE GOVERNMENT Division of Powers The State constitution divides the powers of State government into three separate departments: the executive (including the administrative), the legislative and the judicial. Under the State constitution, no person in any department may exercise any function of another department, unless expressly authorized to do so by the constitution. Executive Department The Governor, Lieutenant Governor, Secretary of State, Auditor of State, Treasurer of State, Attorney General and Superintendent of Public Instruction comprise the executive department of the State. All are elected for four-year terms. The executive power of the State is vested in the Governor. The State constitution requires the Governor to take care that the laws are faithfully executed. The Governor may recommend legislation to the General Assembly of the State (the “General Assembly”), call special sessions of the General Assembly and veto any bill passed by the General Assembly (although any veto may be overridden if the bill is re-passed by a majority of all the members elected to each house of the General Assembly). The Lieutenant Governor serves as the President of the State Senate. The Lieutenant Governor also serves as Secretary of Agriculture and Rural Development, is a member of the Indiana Housing and Community Development Authority, oversees the Office of Tourism Development, oversees the Office of Energy and Defense Development and chairs the Counter-Terrorism and Security Council. The Secretary of State administers State laws regulating the chartering of new businesses, the filing of commercial liens and the issuance of trademarks, notaries public and summonses. In addition, the Secretary of State regulates the State’s securities industry and oversees the State’s elections. The Treasurer of State is responsible for the investment and safekeeping of State moneys. The Treasurer of State is Secretary-Investment Manager of the State Board for Depositories and chairs the Indiana Bond Bank and Indiana Education Savings Authority. The Treasurer of State is a member of the State Board of Finance, Indiana Finance Authority, Indiana Housing and Community Development Authority, Indiana Wireless Enhanced 911 Advisory Board, Indiana Public Retirement System and Deferred Compensation Plan and is a Trustee of the Indiana State Police Pension Trust. The Auditor of State maintains the State’s centralized financial accounting system for all State agencies. Responsibilities include accounting for State funds, overseeing and disbursing tax distributions to local governments, paying the State’s bills and paying the State’s employees. The Auditor of State is required by statute to prepare and publish annual statements of State funds, outlining receipts and disbursements of each State department and agency. The Auditor of State is the administrator of the Deferred Compensation Plan, the secretary of the State Board of Finance and a member of the Board for Depositories and the Indiana Public Retirement System. The Attorney General is the chief legal officer of the State and is required to represent the State in lawsuits in which the State is a party. The Attorney General, upon request, gives legal opinions to the Governor, members of A-5 the General Assembly and officers of the State. In addition, the Attorney General investigates and prosecutes certain consumer complaints and Medicaid fraud. The Superintendent of Public Instruction chairs the State Board of Education and directs the Department of Education. Legislative Department The legislative authority of the State is vested in the General Assembly, which is comprised of the House of Representatives and the Senate. The House of Representatives consists of 100 members who are elected for two-year terms beginning in November of each even-numbered calendar year. The Senate consists of 50 members who are elected for four-year terms, with one-half of the Senate elected biennially. The Speaker presides over the House of Representatives. The members of the House of Representatives select the Speaker from among the ranks of the House. By law, the term of each General Assembly extends for two years, beginning in November of each even-numbered calendar year. The first regular session of every General Assembly occurs in the following odd-numbered year, convening not later than the second Monday in January and adjourning not later than April 29. The second regular session occurs in the following year, convening not later than the second Monday in January and adjourning not later than March 14. Special sessions of the General Assembly may be convened by the Governor at any time. A special session of the General Assembly may not exceed 30 session days during a 40-calendar-day period. The Governor cannot limit the subject of any special session or its scope. Judicial Department The judicial power of the State is vested in a Supreme Court, a Court of Appeals, Circuit Courts and such other courts as the General Assembly may establish. The Judicial Nominating Commission (comprised of the Chief Justice or his designee, three attorneys elected by the attorneys of Indiana and three non-attorney citizens appointed by the Governor) evaluates the qualifications of potential candidates for vacant seats on the Supreme Court and Court of Appeals. When a vacancy occurs in either court, the Judicial Nominating Commission submits the names of three nominees and the Governor selects one of the three. The initial term of each newly appointed justice and judge is two years, after which the justice or judge is subject to a “yes” or “no” referendum at the time of the next general election. For justices of the Supreme Court, the entire State electorate votes on the question of approval or rejection. For Court of Appeals judges, the referendum is by district. Those justices and judges receiving an affirmative vote serve a ten-year term, after which they are again subject to referendum. FISCAL POLICIES Fiscal Years The State’s fiscal year is the twelve-month period beginning on July 1 of each calendar year and ending on June 30 of the succeeding calendar year (a “Fiscal Year”). Accounting System The State maintains a central accounting system that processes all payments for State agencies and institutions, except State colleges and universities. The Auditor of State is responsible for the pre-audit of all payments, the issuance of all warrants and the maintenance of the accounting system. Budgetary control is integrated into the accounting system. Legislative appropriations are entered into the system as an overall spending limit by account for each agency within each fund, but appropriations are not available for expenditure until allotted by the Budget Agency. Allotments authorize an agency to spend a portion of A-6 its appropriation. The Budget Agency makes quarterly allotments. Capital is allotted as projects are approved by the State Budget Committee or the Budget Agency. The accounting system is maintained using the cash basis of accounting. At year-end, accruals are recognized as necessary to convert from the cash basis of accounting. Government-wide financial statements are recognized as full accrual basis of accounting and fund statements are recognized as modified accrual basis of accounting in accordance with generally accepted accounting principles for government financial reporting purposes. Fund Structure Funds are used to record the financial activities of State government. There are three major fund types: Governmental, Proprietary and Fiduciary. Governmental Funds. Governmental Funds are used to account for the State’s general governmental activities and use the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenue is recognized when susceptible to accrual (that is, when it is “measurable and available”). Expenditures are recorded when the related fund liability is incurred, except that (i) unmatured interest on general long-term debt is recognized when due and (ii) certain compensated absences and related liabilities and claims and judgments are recognized when the obligations are expected to be liquidated. Governmental Funds include the General Fund, Special Revenue Funds, Debt Service Funds and Capital Projects Funds. General Fund. The General Fund is maintained to account for resources obtained and used for those services traditionally provided by State government that are not required to be accounted for in another fund. Special Revenue Funds. Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditure for specified purposes. Special Revenue Funds include the Motor Vehicle Highway Fund, which receives revenue from gasoline taxes motor vehicle registrations, and operator licensing fees. Revenue from this fund is distributed among the State and its counties, cities, and towns to be used for the construction, reconstruction, improvement, and maintenance of highways and secondary roads. Debt Service Funds. Debt Service Funds are used to account for the accumulation of resources and payment of bond principal and interest from special revenue component units that are bodies corporate and politic with the legal authority to issue bonds to finance certain improvements within the State. Capital Projects Funds. Capital Projects Funds are used to account for financial resources to be used by the State for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds). Capital Projects Funds include the Post War Construction Fund, Build Indiana Fund (“BIF”), Veterans Home Fund, State Police Building Commission Fund, Law Enforcement Academy Building Fund, Interstate Bridge Fund and Major Construction-Indiana Army National Guard Fund. Proprietary Funds. Proprietary Funds are used to account for a government’s business-type activities. They use the accrual basis of accounting. There are two types of Proprietary Funds: Enterprise Funds and Internal Service Funds. Enterprise Funds. Enterprise Funds are used to account for provision of services to customers outside the government. Examples are the State Lottery Commission and Inns and Concessions. Internal Service Funds. Internal Service Funds are used to account for provision of services to other funds, departments or agencies of the government. For example, the Indiana Office of Technology and the State Personnel Department provide centralized resources to state agencies. Fiduciary Funds. Fiduciary Funds are used to report assets held in a trustee or agency capacity for others and cannot be used to support government programs. They use the accrual basis of accounting. Indiana has three types of Fiduciary Funds: Pension Trust Funds, Private-purpose Trust Funds and Agency Funds. A-7 Pension Trust Funds. Pension Trust Funds are used to report resources that are required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, other post-employment benefit plans or other employee benefit plans. Examples are the State Police Pension Fund and the Employees’ Deferred Compensation Fund. Private-purpose Trust Funds. Private-purpose Trust Funds are used to report any trust arrangement not properly reported in a pension trust fund or an investment trust fund under which principal and income benefit individuals, private organizations or other governments. Examples are the Student Loan Program Fund and the Abandoned Property Fund. Agency Funds. Agency Funds are used to account for situations where the government’s role is purely custodial, such as receipt and temporary investment of fiduciary resources and their remittance to individuals, private organizations or other governments. Examples are the Child Support Fund and the Local Distributions Fund. Budget Process State Budget Agency. The Budget Agency is responsible for preparing the State budget. After the budget is enacted by the General Assembly, the Budget Agency has extensive statutory authority to administer it. The chief executive officer of the Budget Agency is the State Budget Director, who is appointed by the Governor. The Governor also appoints two Deputy Budget Directors; by law, the deputies must be of different political parties. State Budget Committee. The Budget Committee consists of the State Budget Director and four State legislators. The Budget Committee oversees the preparation of the budget and administration of capital budgets after enactment. The legislative members of the Budget Committee consist of two members of the Senate, appointed by the President pro tempore of the Senate, and two members of the House of Representatives, appointed by the Speaker of the House of Representatives. One of the two appointees from each chamber must be nominated by the minority floor leader. Four alternate members of the Budget Committee must be legislators selected in the same manner as regular members. An alternate member participates and has the same privileges as a regular member, except that an alternate member votes only if the regular member from the alternate member’s respective chamber and political party is not present. The legislators serve as liaisons between the executive and legislative departments and provide fiscal information to their respective caucuses. Budget Development. The State operates under a two-year budget; the legislature enacts one act containing two annual budgets. On or before the first day of September in each even-numbered year, all State agencies, including State-supported higher education institutions and public employee and teacher pension fund trustees, submit budget requests to the Budget Agency. The Budget Agency then conducts an internal review of each request. In the fall of each even-numbered year, the Budget Committee begins hearings on budget requests. After presentations by the agencies and the Budget Agency, the Budget Committee makes budget recommendations to the Governor. Revenue Projections. Revenue projections are prepared by the State’s Technical Forecast Committee (the “Forecast Committee”). Starting with the December 2008 forecast, Global Insight, Inc. provided the forecasted independent variables. Global Insight, Inc. was chosen following a thorough evaluation of submitted proposals based on forecasting capabilities and detailed knowledge of the State, national, and international economies. The Forecast Committee is responsible for developing econometric models used to derive the State’s revenue projections and for monitoring changes in State and federal laws that may have an impact on State revenue. Each regular member of the Budget Committee appoints a member of the Forecast Committee. Members of the Budget Committee appoint one additional member from a higher education institution for a total of six members. Members of the Forecast Committee are individuals with expertise in public finance. Budget Report. The budget report and budget bill are prepared by the Budget Committee with the Budget Agency’s assistance. The budget report and bill are based upon the recommendations and estimates prepared by the Budget Agency and the information obtained through hearings and other inquiries. If the Budget Agency and a majority of the members of the Budget Committee differ upon any item, matter or amount to be included in the budget report and bill, the recommendation of the Budget Agency is included in the bill. A-8 Before the second Monday of January in the year immediately after their preparation, the Budget Committee submits the budget report and bill to the Governor. If a gubernatorial election is held same year as budget preparation, then the submission of the budget report and budget bill are instead due by the third Monday of January. The Governor then delivers the budget bill to the Budget Committee members appointed by the Speaker of the House of Representatives for introduction in the House. Although there is no law that requires a budget bill to originate in the House, by tradition, the House passes a budget bill first and sends it to the Senate for consideration. The budget report includes (a) a statement of policy, (b) a general summary, (c) detailed data on actual receipts and expenditures for the previous budget period, (d) a description of the State capital improvement program, (e) the requests for appropriations by State agencies and (f) the Budget Agency’s recommended appropriations. Appropriations. Within 45 days following the adjournment of each regular session of the General Assembly or within 60 days following a special session of the General Assembly, the Budget Agency is required to prepare a list of all appropriations made for the budget period beginning on July 1 following such session, or for such other period as may be provided in the appropriation. The State Budget Director is required to prepare a written review and analysis of the fiscal status and affairs of the State as affected by the appropriations. The report is forwarded to the Governor, the Auditor of State, and the General Assembly. On or before the first day of June of each calendar year, the Budget Agency is required to prepare a list of all appropriations made for expenditure or encumbrance for the ensuing Fiscal Year. The Auditor of State then establishes the necessary accounts based upon the list. Intra-Agency Transfers. The Budget Agency is responsible for administering the State budget after it is enacted. The Budget Agency may, with the approval of the Governor and the State Budget Director, transfer, assign or reassign all or any part of any appropriation made to any agency for a specific use or purpose to another use or purpose, except any appropriation made to the Indiana State Teachers’ Retirement Fund. The Budget Agency may take such action only if the transfer, assignment or reassignment is to meet a use or purpose that an agency is required or authorized by law to perform. The agency whose appropriation is involved must approve the transfer, assignment or reassignment. Contingency Appropriations. The General Assembly may also make “contingency appropriations” to the Budget Agency, which are general and unrelated to any specific State agency. In the absence of other directions imposed by the General Assembly, contingency appropriations must be for the general use of any agency of the State and must be for its contingency purposes or needs, as the Budget Agency in each situation determines. The Budget Agency fixes the amount of each transfer and orders the transfer from such appropriations to the agency. The Budget Agency may make and order allocations and transfers to, and authorize expenditures by, the various State agencies to achieve the purposes of such agencies or to meet the following: (a) necessary expenditures for the preservation of public health and for the protection of persons and property that were not foreseen when appropriations were last made; (b) repair of damage to, or replacement of, any building or equipment owned by the State which has been so damaged as to materially affect the public safety or utility thereof, or which has so deteriorated as to become unusable if such deterioration was not foreseen when appropriations were last made; (c) emergencies resulting from an increase in costs or any other factor or event that was not foreseen when appropriations were last made; or (d) supplement an exhausted fund or account of any State agency, whatsoever the cause of such exhaustion, if it is found necessary to accomplish the orderly administration of the agency or the accomplishment of an existing specific State project. These provisions may not change, impair or destroy any fund previously created nor affect the administration of any contingency appropriations previously or subsequently made for specific purposes. State Board of Finance The State Board of Finance (the “Finance Board”) consists of the Governor, the Treasurer of State, and the Auditor of State. The Finance Board elects from its membership a president, who, by tradition, is the Governor. Typically, the Governor’s designee on the Finance Board is the State Budget Director. The Auditor of State is the secretary of the Finance Board. The Finance Board is responsible for supervising the fiscal affairs of the State and has advisory supervision of the safekeeping of all funds coming into the State treasury and all other funds belonging to the State coming into the possession of any State agency or officer. The Finance Board may transfer money A-9 between funds, except trust funds, and the Finance Board may transfer money between appropriations for any State board, department, commission, office or benevolent or penal institution. The Finance Board has statutory authority to negotiate loans on behalf of the State for the purpose of meeting “casual deficits” in State revenue. A loan may not be for a period longer than four years after the end of the Fiscal Year in which it is made. If sufficient revenue is not being received by the General Fund to repay the loan when due, the Finance Board may levy a tax on all taxable property in the State sufficient to pay the amount of the indebtedness. The Finance Board has never negotiated a loan to meet a deficit in State revenue. Office of Management and Budget The Office of Management and Budget (“OMB”) directs the fiscal management and budget policy of the State. The Director (“Director”) of the OMB is the chief financial officer of the State, and reports directly to the Governor. The Director is responsible for and has authority over all functions performed by the Budget Agency, the Department of State Revenue, and the Department of Local Government Finance, as well as all budgeting, accounting and spending functions within the various agencies, departments and programs of State government. The Director may also serve as the State Budget Director. By statutory designation, the State Budget Director also serves as the Chairman of the Indiana Finance Authority. Pursuant to Executive Order 05-02, the OMB oversees and coordinates the functions, responsibilities and duties of the Indiana Public Retirement System and the State Board of Accounts to the fullest extent permitted by law. The Division of Government Efficiency and Financial Planning of the OMB conducts operational and procedural audits of State government, performs financial planning, designs and implements efficiency projects, and carries out such other responsibilities as may be designated by the Director. Cash Management and Investments The Treasurer of State is responsible for the receipt, custody and deposit of all moneys paid into the State Treasury and keeps daily accounts of all funds received into the Treasury and all moneys paid out of it. The Treasurer of State is responsible for investing the General Fund and more than 60 other funds. The investments in which the Treasurer of State may invest State funds are limited to: (a) securities backed by the full faith and credit of the United States Treasury or fully guaranteed by the United States and issued by the United States Treasury, a federal agency, a federal instrumentality or a federal government sponsored enterprise; (b) obligations issued by (i) agencies or instrumentalities of the United States government, (ii) federal government sponsored enterprises or (iii) the Indiana Bond Bank that are secured by tax anticipation time warrants or notes that (A) are issued by a political subdivision of the State and (B) have a maturity date not later than the end of the calendar year following the year of issuance; (c) certain money market mutual funds, the portfolio of which is limited to (i) direct obligations of the United States, (ii) obligations issued by any federal agency, federal instrumentality or federal government sponsored enterprise or (iii) repurchase agreements fully collateralized by obligations described in (i) or (ii); (d) deposit accounts of certain designated depositories; or (e) certain other securities. Investments may be made only in securities having a maturity of up to two years, except that up to 25% of the total portfolio of funds invested by the Treasurer of State may be invested in securities having a maturity of up to five years. Audits The State Board of Accounts is the State agency responsible for (a) auditing all State and local units of government and (b) approving uniform systems of accounting for such governments. The State Board of Accounts performs its financial and compliance audits in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. The State Board of Accounts issues its opinion on the fairness of financial statements and their conformity to generally accepted accounting principles for the State agencies and local units of government it audits, including the comprehensive annual financial report (or CAFR) prepared annually by the Auditor of State. A - 10 2014 Financial Report The Indiana Comprehensive Annual Financial Report For Fiscal Year Ended June 30, 2014 (the “2014 Financial Report”), contains certain financial information about the State, including the financial statements and is available to the public on the Auditor of State’s Internet Web site (http://www.in.gov/auditor). It is included in this Appendix A by specific reference. The 2014 Financial Report speaks only as of its date. The inclusion of the 2014 Financial Report in this Appendix A does not imply that there has been no change in the information therein since the date thereof. STATE BUDGET PROFILE AND FINANCIAL RESULTS OF OPERATIONS Operating Revenue While certain revenue of the State is required by law to be credited to particular funds other than the General Fund, the requirement is primarily for accounting purposes and may be changed. Substantially all State revenue is general revenue until applied. No lien or priority is created to secure the application of such revenue to any particular purpose or to any claim against the State. All revenue not allocated to a particular fund is credited to the General Fund. The general policy of the State is to close each Fiscal Year with a surplus in the General Fund and a zero balance in all other accounts, except for certain dedicated and trust funds and General Fund accounts reimbursed in arrears. The combined State receipts in the General Fund are referred to as “State Operating Revenue” or “Operating Revenue.” Operating Revenue is defined as the General Fund and other revenue forecasted by the Technical Forecast Committee. Total Operating Revenue together with “DSH revenue” and “HAF revenue” transferred to the General Fund, plus transfers from other funds when necessary and available, are used in the determination of the State’s unappropriated balance reflected on the General Fund Unappropriated Reserve Statement. “DSH” is an acronym for “Disproportionate Share for Hospitals (federal funds),” and DSH revenue constitutes additional Medicaid reimbursements provided to the State from the federal government for hospitals that serve disproportionately large numbers of poor people. “HAF” is an acronym for “Hospital Assessment Fee,” and constitutes Medicaid reimbursements provided to the State for hospitals that have been assessed the HAF. General Fund Revenue Sources Sales and use taxes, corporate and individual income taxes and wagering taxes are the three primary sources of State Operating Revenue. Table 1 provides annual revenue by source and growth rates over time. The following is a summary of Operating Revenue by source. Sales and Use Taxes. The State’s sales and use tax rate is 7.0%. This tax is imposed on the sale and rental of tangible personal property and the sale of certain services, including the furnishing of public utility services and the rental or furnishing of public accommodations such as hotel and motel room rentals. In general, the complementary 7.0% use tax is imposed upon the storage, use or consumption of tangible personal property in the State. Some of the major exemptions from the sales and use taxes are sales of certain property to be used in manufacturing, research and development equipment, agricultural production, public transportation or governmental functions, sales for resale, food sold in grocery stores and prescription drugs. Corporate Income Taxes. Corporate Adjusted Gross Income Tax. The corporate adjusted gross income tax is applicable to corporations doing business in the State. The corporate adjusted gross income tax rate is 8.5% of apportioned Indiana adjusted gross income (AGI). P.L 172-2011 reduced the corporate AGI tax rate from 8.5% to 6.5% in 0.5% increments over four years beginning on July 1, 2012. The phase-in of the tax rate reduction will be complete on July 1, 2015. AGI is federal taxable income with certain additions and subtractions. Certain international banking facilities and insurance companies, S corporations, limited liability companies, partnerships and tax-exempt organizations (to the extent their income is exempt for federal tax purposes) are not subject to the corporate adjusted gross income tax. Corporate adjusted gross income tax collections are allocated to the General Fund. A - 11 Financial Institution Tax. This tax is applicable to a financial institution for the privilege of exercising its franchise or the corporate privilege of transacting the business of a financial institution in Indiana. It applies to any business which is primarily engaged in extending credit, or engaged in leasing. The tax base is a taxpayer’s apportioned adjusted gross income with statutory deductions and additions. Insurance companies, international banking facilities, federally chartered credit unions, and S corporations are exempt. P.L. 93-2013 reduced the tax rate from 8.5% to 6.5% in 0.5% increments over four years beginning on January 1, 2014. The rate reduction will be complete on January 1, 2017. Prior to Fiscal Year 2013, local units of government were guaranteed revenue based on the former Financial Institution Taxes in 1989. Beginning with Fiscal Year 2014, local units received 40% of what they received in the previous fiscal year. Any remaining revenue collected is deposited in the state General Fund. Utilities Receipts Tax. The utilities receipts tax is based on gross receipts from retail utility sales and is imposed at a rate of 1.4%. All revenue is deposited in the state General Fund. Utilities must also pay the corporate adjusted gross income tax. A use tax is imposed on consumers of utilities if the Utilities Receipts Tax was not paid by the seller. The use tax is imposed at the rate of 1.4% on the gross purchase price of the utilities. Individual Adjusted Gross Income Tax. Adjusted gross income (federal adjusted gross income modified by adding back certain federal adjustments and subtracting certain federal exemptions and deductions) of residents and non-residents with income derived from Indiana sources is taxed at 3.4%. Under P.L. 205-2013, the tax rate will be reduced to 3.3% for tax years 2015 and 2016 and 3.23% for subsequent tax years. All revenue derived from the collection of the adjusted gross income tax imposed on persons is credited to the General Fund. Wagering Tax. The wagering tax is applied to the adjusted gross receipts of riverboat gambling operations in Indiana. Riverboat gambling operations are permitted to implement flexible scheduling, enabling patrons to gamble while a riverboat is docked. Riverboats that adopt flexible scheduling are required to pay a graduated tax currently set at 15% of the first $25 million of adjusted gross receipts in a fiscal year, 20% of receipts between $25 million and $50 million, 25% of receipts between $50 million and $75 million, 30% of receipts between $75 million and $150 million, 35% of receipts between $150 million and $600 million, and 40% of all adjusted gross receipts exceeding $600 million. P.L. 229-2013 established an additional rate schedule applicable to a riverboat with adjusted gross receipts of less than $75 million in the previous fiscal year with the lowest rate being 5% and the highest rate being 25%. A financial penalty will apply in the event a riverboat pays based on the lower rate schedule and subsequently exceeds the $75 million limit in that same fiscal year. P.L. 229-2013 also allowed riverboats to deduct from their adjusted gross receipts the adjusted gross receipts attributable to free promotional play provided by the riverboats up to $2.5 million per riverboat in Fiscal Year 2013 and $5.0 million per riverboat in Fiscal Year 2014 and Fiscal Year 2015. In addition, the first $33 million of wagering taxes collected in the State’s fiscal year must be set aside for revenue sharing among local units of government that do not have riverboats. Of the remaining revenue, 25% is distributed to the cities and counties with riverboat operations, and 75% is deposited in the General Fund. The legislation capped the amounts that may be distributed to the cities and towns with riverboat operations at the amounts distributed in Fiscal Year 2002. All revenue in excess of the capped amounts is deposited in the General Fund. The General Fund receives 37.5% of wagering tax from the Orange County Casino. The remaining wagering tax revenue from the Orange County Casino is deposited in the local funds. From the revenue distributed to the General Fund, an amount is distributed annually to the BIF. The transfer amount is such that the total lottery and gaming revenue deposited in the BIF equals $250 million in a Fiscal Year. Interest revenue deposited in the fund does not count against the $250 million cap. The two existing licensed horse racing facilities in Indiana may maintain up to 2,000 slot machines on their premises. A graduated wagering tax is levied in the amount of 25% of the first $100 million of adjusted gross receipts in a fiscal year, 30% of receipts between $100 million and $200 million, and 35% of receipts exceeding $200 million. The graduated slot machine wagering tax applies to 99% of the adjusted gross receipts received. The wagering taxes are deposited in the General Fund. Other Operating Revenue. Other revenue (“Other Revenue”) is derived from cigarette taxes, alcoholic beverage taxes, inheritance taxes, insurance taxes, interest earnings and miscellaneous revenue. The current cigarette tax is $0.995 per pack. A - 12 Lottery and Gaming Revenue By statute, certain revenue from the Hoosier Lottery, horse racing pari-mutual wagering tax and charity gaming taxes and license fees (collectively, “Gaming Revenue”) must be deposited in the BIF. Currently, the annual distributions of wagering tax revenue to the BIF is in the amount of $250 million per year less the annual amounts distributed to the BIF from Hoosier Lottery profits, charitable gaming taxes and license fees and pari-mutuel wagering taxes. Any revenue in excess of $250 million is to remain in the General Fund. For a description of wagering taxes, see “STATE BUDGET PROFILE AND FINANCIAL RESULTS OF OPERATIONS - General Fund Revenue Sources -Wagering Tax.” Before Hoosier Lottery profits are transferred to the BIF, $60 million annually is used to fund pension liabilities—$30 million goes to the Teachers’ Retirement Fund and $30 million goes to the local Police and Firefighter Pension Fund. For Fiscal Year 2011, the Hoosier Lottery changed the revenue transfer schedule from quarterly to monthly, thus accelerating two months of profits transferred to state funds. As a result, $35 million was transferred to the Teachers’ Retirement Fund and $35 million was transferred to the local Police and Fire Pension Fund (for a total of $70 million in Fiscal Year 2011). The Hoosier Lottery continued the monthly transfer schedule in Fiscal Year 2014 and plans to do so in future years. All lottery and gaming revenue deposited to BIF is appropriated by the General Assembly, and the statute that governs deposits of that revenue also governs priority of distribution in the event that revenue falls short of appropriations. At present, the highest distribution priority (after pension account transfers) is to the State’s counties for motor vehicle excise tax replacement, providing a substantial cut in the excise tax charged on motor vehicles; $236.2 million was appropriated for both Fiscal Year 2014 and Fiscal Year 2015. As shown below, gaming revenue totaling $851.5 million was collected by the State in Fiscal Year 2014. This amount includes revenue deposited in the state and local funds but does not include riverboat admissions tax revenue distributed in Fiscal Year 2014 to state and local units in the amount of $54.7 million. The $617.3 million for wagering taxes includes $114.2 million in revenues from slot machine operations allowed at Indiana horse racing facilities under P.L. 233-2007. Type of Tax (in Millions) FY 2014 Wagering Taxes Lottery Charity Gaming Horse Racing Type II Gambling $617.3 $226.3 $5.2 $2.3 $0.4 Total $851.5 Source: State Budget Agency Revenue History Annual percentage changes for each component of Operating Revenue are reflected in Table 1. The table also includes actual revenue for prior fiscal years as well as projected revenue for Fiscal Year 2015. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK A - 13 Table 1 State Operating Revenue (Millions of Dollars) FY 2009(1) FY 2010(1) FY 2011(1) FY 2012(1) FY 2013(1) FY 2014(1) FY 2015(2) Sales Tax Changes from Prior Year 6,153.2 8.22% 5,914.7 -3.88% 6,217.5 5.12% 6,621.8 6.50% 6,795.8 2.63% 6,925.9 1.91% 7,256.7 4.78% Individual Income Change from Prior Year 4,313.8 -10.83% 3,875.6 -10.16% 4,585.6 18.32% 4,765.5 3.92% 4,977.5 4.45% 4,898.8 -1.58% 5,121.2 4.54% Corporate Income(3) Change from Prior Year 839.0 -7.75% 592.2 -29.42% 704.8 19.01% 958.8 36.04% 968.4 1.00% 1,054.4 8.88% 977.8 -7.27% Wagering Tax Change from Prior Year 608.2 4.34% 658.9 8.34% 660.3 0.21% 614.1 -7.00% 554.6 -9.70% 474.0 -14.70% 440.5 -7.08% Other(4) Change from Prior Year 1,021.1 -4.24% 1,145.4 12.17% 1,106.0 -3.44% 1,164.9 5.33% 1,165.8 0.08% 1,049.1 -10.01% 933.5 -11.02% Total(5)(6) Change from Prior Year 12,935.3 -1.12% 12,186.7 -5.79% 13,274.2 8.92% 14,125.1 6.41% 14,462.1 2.39% 14,402.2 -0.41% 14,729.7 2.27% (1) Actual, but unaudited, Operating Revenue. Revenues are as projected by the Technical Forecast Committee on December 18, 2014. Revenues exclude Disproportionate Share Hospital (DSH), Quality Assessment Fee (QAF), Hospital Assessment Fee (HAF), and other miscellaneous revenues excluded from the forecast such as dedicated statewide cost allocation plan revenues. (3) Corporate Income Tax collections were under-reported in Fiscal Year 2007 through Fiscal Year 2011 as the result of a programming error. The amounts listed above should be increased by $4.7 million for Fiscal Year 2007, $29.6 million for Fiscal Year 2008, $56.2 million for Fiscal Year 2009, $58.3 million for Fiscal Year 2010, and $139.2 million for Fiscal Year 2011. This revenue is reflected in Table 4 as “Prior Year Corporate Income Tax (e-check).” (4) See “General Fund Revenue Sources – Other Operating Revenue.” (5) ”P.L. 146-2008, the Governor’s property tax reform legislation, included the following revenue changes in Fiscal Year 2009: an increase in sales tax from 6% to 7% effective April 1, 2008; individual income impacted by state-captured miscellaneous revenues and increase in renter’s deduction; wagering tax from slots at the race tracks; and loss of reimbursement for juvenile incarceration costs. (6) Excluding P.L. 156-2008, total revenues increased by 2.4% in Fiscal Year 2008, and then decreased by 7.4% in Fiscal Year 2009. Excluding P.L. 146-2008, wagering tax revenues decreased by 6.4% in Fiscal Year 2009. Excluding P.L. 146-2008, other revenues decreased by 7.6%in Fiscal Year 2009. ____________________________________________ Source: State Budget Agency (2) Operating Expenditures Actual expenditures may differ from estimated levels as a result of a number of factors, including unforeseen expenses and executive and legislative action. The State’s five largest expenditure categories (as of Fiscal Year 2009) include local school aid, higher education, property tax relief, Medicaid and corrections. Table 2 sets forth operating expenditures and estimates for all major expenditure categories for Fiscal Years 2008 through 2014. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK A - 14 Table 2 Expenditures (Millions of Dollars) FY 2009(1) FY 2010(1) FY 2011(1) FY 2012(1) FY 2013(1) FY 2014(1) FY 2015(2) Local School Aid(3) Change from Prior Year 5,673.1 18.30% 7,147.2 25.98% 7,249.0 1.42% 7,269.4 0.28% 7,463.2 2.67% 7,624.2 2.16% 7,746.1 1.60% Property Tax Relief(4) Change from Prior Year 1,660.0 -29.25% 0.0 -100.00% 0.0 N/A 0.0 N/A 0.0 N/A 0.0 N/A 0.0 N/A Higher Education(5) Change from Prior Year 1,756.3 3.02% 1,711.7 -2.54% 1,703.1 -0.50% 1,691.1 -0.70% 1,695.4 0.25% 1,783.5 5.20% 1,805.0 1.21% Medicaid(6) Change from Prior Year 1,321.8 -16.51% 1,259.9 -4.68% 1,436.0 13.98% 1,856.4 29.28% 2,023.5 9.00% 1,975.2 -2.39% 2,162.3 9.47% Correction Change from Prior Year 634.8 3.10% 652.4 2.77% 647.5 -0.75% 638.3 -1.42% 672.4 5.34% 659.6 -1.90% 683.3 3.59% Other(7)(8)(9)(10) Change from Prior Year 2,005.9 9.37% 2,143.8 6.87% 2,001.5 -6.64% 2,123.4 6.09% 3,310.8 55.92% 2,898.6 -12.45% 2,529.6 -12.73% Total Change from Prior Year 13,051.9 1.34% 12,915.0 -1.05% 13,037.1 0.95% 13,578.6 4.15% 15,165.3 11.69% 14,941.1 -1.48% 14,926.3 -0.14% (1) Actual, but unaudited, expenditures. Estimated expenditures. (3) Fiscal Year 2009 figures exclude $536.4 million of Education Stabilization Funds provided under the American Recovery and Reinvestment Act (ARRA). Inclusion of these funds would result in a total of $6,209.5 million, an increase of 29.48% over Fiscal Year 2008, primarily attributable to P.L. 146-2008. Fiscal Year 2010 figures also exclude Education Stabilization Funds provided under ARRA. (4) P.L. 146-2008, the Governor’s property tax reform legislation, replaced Property Tax Replacement Credits with the State assuming 100% of the Tuition Support Levy and various other local levies previously borne by local government. (5) Higher education figures exclude federal stimulus finds provided under the ARRA; the vast majority of these funds have been distributed. (6) Medicaid figures for Fiscal Years 2009, 2010, and 2011 exclude federal stimulus funds provided under ARRA in the form of increased federal medical assistance percentages. (7) P.L. 146-2008 also required the State to assume a number of local levies now included under “Other,” such as the Family and Children Levy, the Children with Special Health Care Needs Levy, the State Fair Levy, the State Forestry Levy, and Public Safety Pensions costs. (8) Figures for Fiscal Year 2013 include one-time transfers for the Automatic Taxpayer Refund ($360.6M), statutory distributions of “excess” reserves to various pension funds ($360.6M), bond defeasance ($163.0M), and paying back loans to the common school fund for charter schools ($91.2M). (9) Figures for Fiscal Year 2014 include one-time transfers for the Major Moves 2020 Fund ($200.0M) and cash funded State Agency and University Capital Projects ($188.0M). (10) Figures for Fiscal Year 2015 include one-time transfers cash funded State Agency and University Capital Projects ($56.2M). (2) ____________________________________ Source: State Budget Agency Local School Aid. Prior to January 1, 2003, the State provided approximately 66% of school corporations’ general fund budgets. As a result of the tax restructuring legislation enacted in 2002, the State provided approximately 85% of the school corporations’ general fund budgets. As part of the property tax reform legislation enacted by P.L. 146-2008, the State assumed responsibility for the local share of tuition support and provides 100% of the tuition support for school corporation general funds beginning in January 2009. During Fiscal Year 2010, the state utilized $209 million of American Recovery and Reinvestment Act (ARRA) Fiscal Stabilization funds in lieu of state general fund dollars. Local school aid includes distributions for programs such as assessment and performance, as well as tuition support. The General Assembly established the State’s calendar year 1972 funding level as the base for local school aid. The K-12 tuition support for Fiscal Year 2014 totaled $6,622.8 million. In addition, $21.7 million was appropriated in Fiscal Year 2014 for educating adult learners, funding formerly part of the tuition support appropriation. For Fiscal Year 2015, K-12 tuition support increased to $6,691.6 million, and the adult education A - 15 appropriation increased to $22.8 million. Accounting for tuition support and adult education, K-12 tuition support is increased by 1.1% for 2015. Property Tax Relief. Prior to 2009, spending for property tax relief primarily consisted of Property Tax Relief Credits (“PTR Credits”) and the Homestead Credits. Prior to 2003, PTR Credits equaled 20% of property taxes charged excluding property taxes imposed for debt service or imposed in excess of the State’s levy limitations. Homestead Credits equaled 10% of property taxes charged on homesteads excluding property taxes imposed for debt service or imposed in excess of the State’s levy limitations. Appropriations for PTR Credits and Homestead Credits were made from the PTR Fund. A special legislative session in 2002 resulted in PTR Credits being increased, subject to appropriation, to 60% of property taxes imposed by school corporations for general fund purposes and 20% of all other property taxes excluding property taxes imposed for debt service or imposed in excess of the State’s levy limitations. Property taxes imposed on personal property were made ineligible to receive the 20% PTR Credits. During the same special legislative session, Homestead Credits were increased to 20%, subject to appropriation. These changes were effective January 1, 2003. Beginning with the Fiscal Years 2005-2007 biennium, the total amount of PTR Credits and Homestead Credits distributed in a Fiscal Year from the PTR Fund was limited to the amount distributed in Fiscal Year 2002 plus an amount equal to the increase in the State sales tax from 5.0% to 6.0% enacted during the 2002 special legislative session. House Enrolled Act 1835-2007 established the Property Tax Reduction Trust Fund for the purpose of providing additional property tax relief payable solely from new revenues resulting from the operation of slot machines at horse racing tracks located within the State. P.L. 146-2008 eliminated the appropriation for PTR Credits, replacing them with Homestead Credits and the State’s assumption of 100% of the tuition support for school corporation general funds beginning in January 2009. P.L. 146-2008 provided for $690 million in Homestead Credits during the Fiscal Years 2008 and 2009. Higher Education. Through the General Fund, the State supports seven higher education institutions: Ball State University, Indiana University, Indiana State University, Ivy Tech Community College of Indiana, Purdue University, University of Southern Indiana and Vincennes University. Expenditures for higher education from the General Fund for Fiscal Year 2013 were $1,699.1 million, and expenditures for higher education from the General Fund were $1,923.9 million for Fiscal Year 2014. Fiscal Year 2015 higher education expenditures are estimated to be $1,941.2 million. These figures exclude ARRA funds. Appropriations for higher education include university operating, university fee-replaced debt service, university line items, other higher education line items, university repair and rehabilitation, university capital projects, and State student aid. See “STATE BUDGET PROFILE AND FINANCIAL RESULTS OF OPERATIONS - Financial Results of Operations.” Since Fiscal Year 1976, the General Assembly has appropriated to each State university and college an amount equal to the annual debt service requirements due on qualified outstanding student fee and building facilities fee bonds and other amounts due with respect to debt service and debt reduction for interim financings (collectively, “Fee Replacement Appropriations”). The Fee Replacement Appropriations are not pledged as security for such bonds and other amounts. Under the Indiana Constitution, the General Assembly cannot bind subsequent General Assemblies to continue the present Fee Replacement Appropriations policy; however, it is anticipated that the policy will continue for outstanding bonds and notes. Table 3 sets forth the aggregate principal amount of bonds and notes outstanding as of June 30, 2014, for each State university and college eligible for Fee Replacement Appropriations and the amount of Fee Replacement Expenditures for Fiscal Year 2014 and Fee Replacement Appropriations for Fiscal Year 2015. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK A - 16 Table 3 Schedule of Fee Replacement Debt Estimated Amount of Fiscal Year 2014 Debt Outstanding Fee Replacement June 30, 2014 Expenditures Ball State University Indiana University(1) Indiana State University Ivy Tech Community College Purdue University(2) University of Southern Indiana Vincennes University Total(3) (1) (2) (3) Fiscal Year 2015 Fee Replacement Appropriations $121,910,000 $356,992,656 $55,984,133 $299,715,000 $213,239,154 $82,198,116 $42,157,000 $15,074,800 $48,856,772 $8,496,084 $33,833,923 $30,145,834 $10,404,517 $4,741,634 $14,804,007 $52,910,480 $8,533,541 $33,409,029 $29,637,224 $10,738,142 $4,789,687 $1,172,196,059 $149,553,564 $154,822,110 Includes its regional campuses other than Indiana University-Purdue University at Fort Wayne. Includes its regional campuses other than Indiana University-Purdue University at Indianapolis. Totals may not add due to rounding. Source: State Budget Agency Medicaid. Medicaid is a state/federal shared fiscal responsibility with the State supporting 33.02% of the total program through a combination of State General Fund and dedicated funds over the biennium. Federal funding accounts for the remaining 66.98%. The federal share increased during Fiscal Years 2009, 2010, and 2011 as a result of ARRA. In Fiscal Years 2011, 2012 and 2013, State General Fund Medicaid expenditures totaled $1,436.0 million, $1,856.4 million, and $2,023.5 million respectively. For Fiscal Year 2014, State General Fund Medicaid expenditures totaled $1,975.1 million. Enrollment was estimated to be 1,064,689 at the end of Fiscal Year 2014 and is expected to reach 1,207,692 by the end of Fiscal Year 2015 (these figures exclude the Children’s Health Insurance Program and the Healthy Indiana Program). Indiana’s base federal reimbursement rate equaled 66.96% for the first quarter of Fiscal Year 2013, 67.16% for the remaining three quarters of Fiscal Year 2013 and the first quarter of Fiscal Year 2014, and 66.92% for the remaining three quarters of Fiscal Year 2014. State General Fund Medicaid appropriations for Fiscal Years 2014 and 2015 were set as $1,975.4 million and $2,162.3 million, respectively. All figures above exclude ARRA funds and only represent the State General Fund expenditures or appropriations. Indiana is working with the federal government to replace the traditional Medicaid program for nondisabled adults by expanding the Healthy Indiana Plan (HIP) for 2015. HIP 2.0 is expected to provide healthcare coverage to over 450,000 Hoosiers within the next 5 years. The expanded program has been designed to improve healthcare utilization and promote personal responsibility. In addition, HIP 2.0 will maintain financial sustainability and will not increase taxes for Hoosiers. The program will be funded by enhanced federal funding, the hospital assessment fee, and existing cigarette tax revenues previously used for HIP. Corrections. Appropriations for the Department of Correction, payable almost entirely from the General Fund, include funds for incarceration and rehabilitation of adult and juvenile offenders, as well as parole programs. Corrections expenditures were $672.3 million for Fiscal Year 2013 and $659.6 million for Fiscal Year 2014. Fiscal Year 2013 expenses included over $40.6 million that was set aside for bond defeasance. General Fund appropriations for Fiscal Year 2015 total $683.3 million. Offender population is the most significant driver of corrections expenditures. The total offender population, including those in jail and contract beds, increased to 29,737 in Fiscal Year 2014 – up 0.27% from 29,655 in Fiscal Year 2013. Other. The balance of State expenditures is composed of spending for a combination of other purposes, the principal ones being the costs of institutional care and community programs for persons with mental illnesses and developmental disabilities, the State’s administrative operations, the State’s share of public assistance payments, the General Fund share of State Police costs, economic development programs and General Fund expenditures for capital improvements. Other expenditures for Fiscal Year 2013 totaled $3,310.8 million. This included one-time transfers for the Automatic Taxpayer Refund ($360.6 million), statutory distributions of “excess” reserves to various pension funds ($360.6 million), bond defeasance ($163.0 million), and paying back loans to the common school fund for charter schools ($91.2 million). One-time transfers included in the Fiscal Year 2014 Other expenditures A - 17 category are transfers and the Major Moves 2020 Trust Fund ($200.0 million) and cash-funded State Agency and University capital projects ($188.0 million). Expenditure Limits. In 2002, the General Assembly enacted a law establishing a State spending cap. The law provides that the maximum annual percentage growth in State’s spending cap from the General Fund and the PTR Fund must be the lesser of the average percentage change in Indiana non-farm personal income during the past six calendar years or 6%. At present, State expenditures are well below the spending cap. The law excludes expenditures from revenue derived from gifts, federal funds, dedicated funds, intergovernmental transfers, damage awards and property sales. Expenditures from the transfer of funds between the General Fund, the PTR Fund and the Rainy Day Fund, reserve fund deposits, refunds of intergovernmental transfers, State capital projects, judgments and settlements, distributions of specified State tax revenue to local governments and Motor Vehicle Excise Tax replacement payments are also exempt from the expenditure limit. The expenditure limit is applied to appropriations from the General Fund and Rainy Day Fund and, prior to 2009, the PTR Fund. The law directs the Budget Agency to compute a new State spending growth quotient before December 31 in each even-numbered year. The State spending growth quotient is equal to the lesser of the six-year average increase in Indiana non-farm personal income or 6%. The legislation allows the State spending cap to be increased or decreased to account for new or reduced taxes, fees, exemptions, deductions or credits adopted after June 30, 2002. The Budget Agency computed the spending growth quotient for Fiscal Years 2012 and 2013 to be 2.4% and 2.8%, respectively. The spending growth quotient computed for Fiscal Years 2014 and 2015 is 2.6% for each year. Fund Balances The State has four primary funds that build or hold unappropriated reserves: the Rainy Day Fund, the State Tuition Reserve, the Medicaid Reserve, and the General Fund. Each of these funds is described below. Rainy Day Fund. In 1982, the General Assembly established the Counter-Cyclical Revenue and Economic Stabilization Fund, commonly called the “Rainy Day Fund.” One of three primary funds into which general purpose tax revenue is deposited, the Rainy Day Fund is essentially a State savings account that permits the State to build up a fund balance during periods of economic expansion for use during periods of economic recession. Each year the State Budget Director determines calendar year Adjusted Personal Income (“API”) for the State and its growth rate over the previous year. In general, moneys are deposited automatically into the Rainy Day Fund if the growth rate in API exceeds 2.0% and moneys are withdrawn automatically from the Rainy Day Fund if API declines by more than 2.0%. An automatic withdrawal of $370.9 million from the Rainy Day Fund occurred in Fiscal Year 2010, and automatic deposits from the General Fund into the Rainy Day Fund occurred in Fiscal Years 2011, 2012, and 2013 ($53.5 million, $291.0 million, and $14.8 million respectively). In addition, the General Assembly has authorized money to be transferred from the Rainy Day Fund to the General Fund from time to time during periods of economic recession. The General Assembly has also authorized money in the Rainy Day Fund to be used to make loans to local governments from time to time. See “STATE BUDGET PROFILE AND FINANCIAL RESULTS OF OPERATIONS - Financial Results of Operations.” During a Fiscal Year when a transfer is made to the Rainy Day Fund, if General Fund revenue is less than estimated (and the shortfall cannot be attributed to a statutory change in the tax rate, tax base, fee schedules or revenue sources from which the revenue estimates were made), an amount reverts to the General Fund from the Rainy Day Fund equal to the lesser of (a) the amount initially transferred to the Rainy Day Fund during the Fiscal Year and (b) the amount necessary to maintain a positive balance in the General Fund for the Fiscal Year. All earnings from the investment of the Rainy Day Fund balance remain in the Rainy Day Fund. Money in the Rainy Day Fund at the end of a Fiscal Year does not revert to the General Fund. If the balance in the Rainy Day Fund at the end of a Fiscal Year exceeds 7.0% of total General Fund revenue for the Fiscal Year, the excess is transferred from the Rainy Day Fund to the General Fund. See Table 4 for Rainy Day Fund balances. State Tuition Reserve. The Tuition Reserve was a cash flow device intended to assure that the State had sufficient cash to make local school aid payments on time. Prior to each June 1, the Budget Agency estimated and established the Tuition Reserve for the ensuing Fiscal Year. See Table 4 for Tuition Reserve Fund balances. P.L. 146-2008 formally created the State Tuition Reserve Fund to which the balance of the Tuition Reserve was A - 18 transferred and can only be used to make local school aid payments. An additional $50 million was deposited in the Tuition Reserve Fund on June 30, 2008, two-and-a-half years before the legislative deadline of December 31, 2010. The Budget Agency transferred $536.4 million from the General Fund to the State Tuition Reserve Fund on June 30, 2009, to support tuition support appropriations from the General Fund in Fiscal Year 2010 and Fiscal Year 2011. The Budget Agency ordered net transfers of $945.7 million from the State Tuition Reserve Fund to the General Fund during Fiscal Year 2010 to support tuition support appropriations. P.L. 205-2013 directs the state to transfer $150 million from the General Fund to the State Tuition Reserve Fund on both July 1, 2013 and July 1, 2014. Medicaid Reserve. In 1995, the General Assembly established the Medicaid Reserve and Contingency Account to provide a reserve to fund timely payments of Medicaid claims, obligations and liabilities. The Medicaid Reserve was designed to represent the estimated amount of obligations that were incurred, but remained unpaid, at the end of a Fiscal Year. The Budget Agency transferred $57.6 million from the Medicaid Reserve to the General Fund during Fiscal Year 2010 to support Medicaid obligations. The Budget Agency transferred $145.0 million to the Medicaid Reserve during Fiscal Year 2013 from unspent prior year Medicaid Assistance appropriations. See Table 4 for Medicaid Reserve Fund balances. P.L. 2015-2013 directs the Budget Agency to transfer $250 million during Fiscal Year 2014 to the Medicaid Reserve from unspent Fiscal Year 2013 Medicaid Assistance appropriations. In addition, the Budget Agency transferred another $50 million from unspent Fiscal Year 2013 and Fiscal Year 2014 Medicaid Assistance appropriations to the Medicaid Reserve during Fiscal Year 2014. In Fiscal Year 2015, an additional $132.6 million of unspent prior year Medicaid Assistance appropriations were transferred to the Medicaid Reserve bringing the total balance to $577.6M. General Fund. The General Fund is the primary fund into which general purpose tax revenue, or Operating Revenue, is deposited or transferred. The State closed Fiscal Year 2014 with combined balances of $1,036.4 million in the General Fund, which was 7.1% of that Fiscal Year’s operating revenue. Fiscal Year 2014 was marked by continued fiscal restraint. The Governor caused approximately $188.1 million of reversions to the General Fund, while reducing bond debt and other liabilities. Revenue Forecast for Fiscal Years 2014 and 2015 The Forecast Committee last updated the forecast of State revenue for Fiscal Years 2014 and 2015 on December 20, 2013. Fiscal Year 2013 revenue increased by 2.4% ($337 million) over 2012 revenues, while Fiscal Year 2014 revenue decreased by 0.4% ($59.8 million) compared to 2013. Revenue growth of 3.2% is projected for Fiscal Year 2015. P.L. 146-2008 increased the sales tax from 6.0% to 7.0% effective April 1, 2008, as part of the property tax reform legislation. The increase generated $151.6 million in Fiscal Year 2008, and generated $879.0 million in Fiscal Year 2009. P.L. 146-2008 increased wagering tax collections for Fiscal Year 2009 to the General Fund by $62.8 million, caused by the elimination of the Property Tax Reduction Trust Fund on December 31, 2008. P.L. 146-2008 also increased “Other” collections for Fiscal Year 2009 by $25.8 million due to state captured miscellaneous revenues. Combined Balance Statements Table 4 sets forth the Budget Agency’s unaudited end-of-year combined balance statements and estimates and projections, including revenue and other resources, expenditures and balances at the end of each Fiscal Year. For past Fiscal Years, the balances reflect actual revenue and other resources and expenses before adjustments to the modified accrual basis of accounting. As a result, the Budget Agency’s “working” statements may differ from the results included in the 2013 Financial Report or the Auditor of State’s comprehensive annual financial reports for other Fiscal Years. Forecasted revenue is developed by the Forecast Committee, and actual revenue may be higher or lower than forecasted. Estimates of other resources and uses were developed by the Budget Agency taking into account historical resources and appropriations as well as other variables, including the budget for Fiscal Year 2014. Combined balances for Fiscal Year 2013 were maximized at $1,943.1 million. Had balances exceeded this amount, then an “excess reserve” transfer to the Pension Stabilization Fund would have been triggered – dropping the combined balances to $1,894.1 million. The Governor chose to defease the bonds for Miami Correctional Facility at a cost of $75.9 million in order to lower the State’s debt and maximize our combined balances. No “excess reserve” calculation was required at the end of Fiscal Year 2014, and total combined balances grew to $2,005.3 million. A - 19 Table 4 General Fund and Property Tax Replacement Fund Combined Statement of Actual and Estimated Unappropriated Reserve (Millions of Dollars) Resources: Working Balance on July 1 Current Year Resources: Forecast Revenue Miscellaneous Revenue DSH Revenue Hospital Assessment Fee Quality Assessment Fee Prior Year Corporate Income Tax (Echeck) FY 2001-2011 Reconciliation FY 2011 LOIT Adjustment Transfer from Medicaid Reserve to General Fund Transfer from Rainy Day Fund to General Fund Transfer from General Fund to Rainy Day Fund Transfer from General Fund to State Tuition Reserve Transfer from State Tuition Reserve to General Fund Total Current Year Resources Total Resources Uses: Appropriations, Expenditures and Reversions: Appropriations Budgeted Appropriations Pensions 13th Check Major Moves 2020 Trust Fund Non-Budget Years: As-Passed Appropriations Cash-Funded State Agency and University Capital Total Appropriations Other Expenditures and Transfers Augmentations and Expenditure Adjustments(2) Outside Acts Local Option Income Tax Distributions PTRC & Homestead Credit Adjustments Adjustment for Stadium/Convention Center Appropriation Judgments and Settlements(3) HEA 1072 Loans (Net of Repayments) Bond Defeasance Charter School Loans Indianapolis Public School Distribution for 2012 Tuition Transfer to Preneed Consumer Settlement Fund Statutory Distribution to Pension Stabilization Fund Automatic Taxpayer Refund Transfers from Mine Subsidence Fund Total Appropriations and Expenditures Reversions Total Net Uses General Fund Reserve Balance at June 30 Actual FY2011 Actual FY2012 Actual FY2013 Actual FY2014 Estimated FY2015(1) 830.7 1,124.3 1,803.4 1,428.0 1,036.4 13,274.2 12.2 58.2 39.6 - 14,125.1 18.4 10.1 154.1 23.6 288.0 14,462.1 35.7 207.3 51.1 - 14,402.2 7.2 203.3 47.2 - 14,729.7 7.2 168.8 48.3 - - -70.6 - 33.6 - - 132.6 - - - - - -53.5 -291.0 -14.8 - - - - - -150.0 -150.0 - - - - - 13,330.7 14,161.4 14,257.7 15,382.0 14,775.0 16,578.4 14,509.9 15,937.9 14,954.0 15,990.4 14,113.0 - 13,980.7 6.0 14,317.6 19.6 14,788.1 19.3 200.0 - 15,084.6 20.4 200.0 - - - - 188.0 56.2 14,113.0 13,986.7 14,337.5 15,195.4 15,161.2 33.5 17.7 143.8 20.2 33.9 1.6 -14.0 -42.0 -11.2 -112.1 -5.1 -111.0 -` -4.4 -114.3 15.2 -115.4 8.0 - 13.5 - 10.3 9.6 128.0 91.2 7.4 10.1 -7.4 - 10.1 - - 1.9 - - - 360.6 - - 14,100.1 13,894.6 360.6 15,334.8 -10.0 15,089.6 15,455.0 -1,063.0 13,037.1 1,124.3 -316.0 13,578.6 1,803.4 -184.3 15,150.5 1,428.0 -188.1 14,901.5 1,036.4 -169.4 15,285.6 704.8 A - 20 Reserved Balances Medicaid Reserve Tuition Reserve Rainy Day Fund(4) Total Combined Balances Payment Delay Liability Combined Balance as a Percent of Operating Revenue (1) (2) (3) (4) 0.0 0.0 57.2 1,181.5 0.0 8.8% 0.0 0.0 351.6 2,155.0 0.0 15.0% 145.0 0.0 370.1 1,943.1 0.0 13.1% 445.0 150.0 373.1 2,005.3 0.0 13.7% 557.6 300.0 376.9 1,959.3 0.0 13.1% Revenues are those projected by the Technical Forecast Committee on December 18, 2014; appropriations are those authorized by the 2013 General Assembly for Fiscal Year 2015. Adjustments to appropriations by augmentation, transfer, open-ended appropriations, and other reconciling adjustments made as part of the end-of-Fiscal Year closing process are shown in total. Represents the estimated cost to the State of judgments and other legal and equitable claims. No reserve fund is established for judgments or other legal or equitable claims against the State. Judgments and other such claims must be paid from appropriations or balances. See “LITIGATION.” Net of outstanding loans to local governments. The loans are authorized by the General Assembly and are illiquid. Source: State Budget Agency STATE INDEBTEDNESS Constitutional Limitations on State Debt Under Article X, Section 5 of the State constitution, the State may not incur indebtedness except: to meet casual deficits in revenue; to pay interest on State debt; or to repel invasion, suppress insurrection or, if hostilities are threatened, to provide for the public defense. The State has no indebtedness outstanding under the State constitution. See “FISCAL POLICIES—State Board of Finance.” Other Debt, Obligations Substantial indebtedness anticipated to be paid from State appropriations is outstanding, together with State university and college debt and what is described below as “contingent obligations.” In addition, the commissions and authorities described below may issue additional debt or incur other obligations from time to time to finance additional facilities or projects or to refinance such facilities or projects. The type, amount and timing of such additional debt or other obligations are subject to a number of conditions that cannot be predicted at present. See “STATE INDEBTEDNESS - Obligations Payable from Possible State Appropriations—Authorized but Unissued Debt.” In 2005, the General Assembly enacted legislation establishing the Indiana Finance Authority, a body politic and corporate, separate from the State. The Indiana Finance Authority is required to establish and periodically update a State debt management plan. Obligations Payable from Possible State Appropriations The General Assembly has created certain financing entities, including the Indiana Finance Authority and the Indiana Bond Bank, each of which is a body politic and corporate, separate from the State. These financing entities have been granted the authority to issue revenue bonds and other obligations to finance various capital projects. Certain agencies of the State, including the Department of Administration, the Department of Transportation, the Department of Natural Resources, Indiana State Fair Commission and the Indianapolis Airport Authority (under an agreement with the State), have entered into use and occupancy agreements or lease agreements with the financing entities. Lease rentals due under the agreements are payable primarily from possible appropriations of State funds by the General Assembly. However, there is and can be under State law no requirement for the General Assembly to make any such appropriations for any facility in any Fiscal Year. No trustee or holder of any revenue bonds issued by any such financing entity may legally compel the General Assembly to make any such appropriations. Revenue bonds issued by any of the financing entities do not constitute a debt, liability, or pledge of the faith and credit of the State within the meaning of any constitutional provision or limitation. Such use and occupancy agreements, lease agreements and other obligations do not constitute A - 21 indebtedness of the State within the meaning or application of any constitutional provision or limitation. Following is a description of the entities that have issued bonds and the projects that have been financed with the proceeds and which are subject to use and occupancy agreements or lease agreements. Indiana Finance Authority. Before 2005, there had been numerous bodies corporate and politic of the State, each with separate decision making and borrowing authority, that issued bonds and otherwise accessed the financial markets. On May 15, 2005, to provide economic efficiencies and management synergies and to enable the State to communicate, with a single voice, with the various participants in the financial markets, the Indiana Development Finance Authority, the State Office Building Commission, the Indiana Transportation Finance Authority, the Recreational Development Commission, the State Revolving Fund Programs, and the Indiana Brownfields Program were consolidated into the Indiana Finance Authority. Effective July 1, 2007, the Indiana Health and Educational Facility Financing Authority was also merged into the Indiana Finance Authority. As the successor entity, the Indiana Finance Authority has assumed responsibility for the financing of certain buildings, highways, aviation facilities and recreation facilities. For a description of other powers and responsibilities of the Indiana Finance Authority, including its authority to issue other debt, see “STATE INDEBTEDNESS - Contingent Obligations” and Table 8. Buildings. The Indiana Finance Authority is authorized (and its predecessor, the State Office Building Commission, had been authorized) to issue revenue bonds, payable from lease rentals under use and occupancy agreements with various State agencies, to finance or refinance the cost of acquiring, constructing or equipping buildings, structures, improvements or parking areas for the purpose of (a) housing the personnel or activities of State agencies or branches of State government; (b) providing parking for State employees or persons having business with State government; (c) providing buildings, structures or improvements for the custody, care, confinement or treatment of committed persons under the supervision of the State Department of Correction; (d) providing buildings, structures or improvements for the care, maintenance or treatment of persons with mental or addictive disorders; (e) providing buildings, structures or improvements for the care, maintenance or treatment of adults or children with mental illness, developmental disabilities, addictions or other medical or rehabilitative needs; or (f) providing the infrastructure of a State-wide wireless public safety communications system. Lease rentals under the use and occupancy agreements are payable primarily from possible State appropriations. See “Table 5— Schedule of Long Term Debt—Obligations Payable from Possible State Appropriations—STATE BUILDINGS.” The Indiana Finance Authority has the authority to provide (and its predecessor, the State Office Building Commission, had provided) short-term, or construction, financing for authorized projects through the issuance of commercial paper payable from proceeds of its revenue bonds. As of June 30, 2014, there is no commercial paper outstanding. Highways. The Indiana Finance Authority is authorized (and its predecessor, the Indiana Transportation Finance Authority, had been authorized) to issue revenue bonds pursuant to Indiana Code 8-14.5, payable from lease rentals under lease agreements with the Indiana Department of Transportation, to finance or refinance the cost of construction, acquisition, reconstruction, improvement or extension of the State’s highways, bridges, streets, roads or other public ways. Lease rentals under the lease agreements are payable primarily from possible State appropriations. Authorization pursuant to Indiana Code 8-14.5 for new money bond issues has expired, however, the Indiana Finance Authority may still issue refunding bonds thereunder. See “Table 5—Schedule of Long Term Debt—Obligations Payable from Possible State Appropriations—HIGHWAY REVENUE BONDS.” In 2005, legislation was enacted that authorizes the Indiana Finance Authority to issue grant anticipation revenue bonds to finance highway projects eligible for federal highway revenues. However, none have been issued and legislative authorization has expired Aviation Facilities. The Indiana Finance Authority is authorized (and its predecessor, the Indiana Transportation Finance Authority, had been authorized) to issue revenue bonds, payable from the revenues pledged thereto, to finance or refinance improvements related to airports or aviation-related property or facilities. Pursuant to this authority, the Indiana Transportation Finance Authority issued its revenue bonds to finance and refinance (a) improvements related to an airport and aviation-related property and facilities at the Indianapolis International Airport and (b) an aviation technology center at the Indianapolis International Airport. The bonds are A - 22 payable from lease rentals under lease agreements with the Indianapolis Airport Authority. Lease rentals under the lease agreements are payable primarily from possible State appropriations. See “Table 5—Schedule of Long Term Debt—Obligations Payable from Possible State Appropriations—AVIATION FACILITIES.” Recreation Facilities. The Indiana Finance Authority is authorized (and its predecessor, the Recreational Development Commission, had been authorized) to issue revenue bonds, payable from the revenues pledged thereto, to finance or refinance the costs of the acquisition, construction, renovation, improvement or equipping of facilities for the operation of public parks. Pursuant to this authority, the Recreational Development Commission issued its revenue bonds to finance and refinance the costs of acquisition, construction, renovation, improvement and equipping of various lodging and other facilities for public parks in the State. The bonds are payable from lease rentals under use and occupancy agreements with the State’s Department of Natural Resources or the Indiana State Museum and Historic Sites Corporation. The lease rentals under the use and occupancy agreements are payable primarily from possible State appropriations. See “Table 5—Schedule of Long Term Debt—Obligations Payable from Possible State Appropriations—RECREATIONAL FACILITIES.” Qualified Motorsports Facility. The Indiana Finance Authority is authorized to issue revenue bonds, payable from lease rentals under lease agreements with the Indiana Motorsports Commission, to finance or refinance improvements to the Indianapolis Motor Speedway, a qualified motorsports facility. Lease rentals under such lease agreements are payable primarily from possible State appropriations. No such revenue bonds have been issued pursuant to this authorization at this time. Bond Bank. The Bond Bank issued its revenue bonds, payable from possible State appropriations, to finance or refinance certain State interests or initiatives, including the Columbus Learning Center (“CLC”), an educational facility to be used by a number of State post-secondary educational institutions to provide services in South Central Indiana. See “Table 8—Schedule of Long Term Debt—Contingent Obligations—BOND BANK Special Program Pool.” For a description of other powers and responsibilities of the Bond Bank, including its authority to issue other debt, see “STATE INDEBTEDNESS - Contingent Obligations—Indiana Bond Bank” and “Table 8—Schedule of Long Term Debt—Contingent Obligations – BOND BANK Special Program Pool. Schedule of Long Term Debt. Table 5 lists, by type of financing, long-term debt that is subject to possible State appropriations as of June 30, 2014. See “Authorized but Unissued Debt”, “Public Private Agreements” and “Table 3 – Schedule of Fee Replacement Debt” for related obligations that are subject to possible State appropriations. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK A - 23 Table 5 Schedule of Long Term Debt Obligations Payable from Possible State Appropriations Type/Series Original Par Amount Ending Balance 6/30/2013 (Redeemed)/ Issued Ending Balance 6/30/14 STATE BUILDINGS Series 2003B Series 2003C Series 2004A Series 2004B Series 2004D Series 2004E Series 2008C Series 2009A Series 2009B Series 2011A Series 2011C Series 2012A Series 2012B Series 2013C Energy Savings Lease 2011 Energy Savings Lease 2012 Energy Savings Lease 2013 TOTAL STATE BUILDINGS HIGHWAY REVENUE BONDS Series 1990A Series 1992A Series 1993A Series 1998A Series 2004B Series 2004C Series 2007A Series 2010A TOTAL HIGHWAYS AVIATION FACILITIES Airport Facilities Bonds Series 2008A Subtotal 31,930,000 55,075,000 46,180,000 61,890,000 33,995,000 57,005,000 53,035,000 47,360,000 13,825,000 20,730,000 8,410,000 12,235,000 20,515,000 41,445,000 24,081,196 17,947,331 11,242,471 1,470,000 47,930,000 30,820,000 61,890,000 2,715,000 4,520,000 44,675,000 39,335,000 6,880,000 20,730,000 8,410,000 12,235,000 20,515,000 41,445,000 17,751,242 17,947,331 11,242,471 (1,470,000) (1,750,000) (30,820,000) (6,080,000) (1,325,000) (2,205,000) (44,675,000) (415,000) (6,880,000) (615,000) (10,000.00) 0 0 0 (4,290,437) (390,000) 0 0 46,180,000 0 55,810,000 1,390,000 2,315,000 0 38,920,000 0 20,115,000 8,410,000 12,235,000 20,515,000 41,445,000 13,460,804 17,557,331 11,242,471 $556,900,999 $390,511,044 ($100,925,438) $289,585,606 $72,498,391 74,035,000 193,531,298 175,360,000 147,345,000 146,080,000 642,300,000 74,040,000 $12,090,000 22,120,000 42,861,298 34,490,000 147,345,000 128,105,000 616,905,000 72,340,000 ($5,835,000) (4,990,000) (13,055,000) 0 0 (16,870,000) (1,120,000) (7,175,000) $6,255,000 17,130,000 29,806,298 34,490,000 147,345,000 111,235,000 615,785,000 65,165,000 $1,525,189,689 $1,076,256,298 ($49,045,000) $1,027,211,298 $127,655,000 $127,655,000 $103,205,000 $103,205,000 ($16,285,000) ($16,285,000) $86,920,000 $86,920,000 $4,800,000 $4,800,000 $4,010,000 $4,010,000 ($750,000) ($750,000) $3,260,000 $3,260,000 $132,455,000 $107,215,000 ($17,035,000) $90,180,000 $23,485,000 5,505,000 $28,990,000 $21,835,000 5,355,000 $27,190,000 ($1,555,000) (700,000) ($2,255,000) $20,280,000 4,655,000 $24,935,000 $2,243,535,688 $1,601,172,342 ($169,260,438) $1,431,911,904 Aviation Technology Bonds Series 2012K Subtotal TOTAL AVIATION FACILITIES RECREATIONAL FACILITIES Series 2012I Series 2012J TOTAL RECREATIONAL FACILITIES TOTAL ALL BONDS Source: Indiana Finance Authority (as of June 30, 2014). Excludes accreted value of capital appreciation bonds. A - 24 Scheduled Principal and Interest Payments. Table 6 lists principal and interest payments payable from possible State appropriations (not including debt that has been defeased) as of June 30, 2014. See “Authorized but Unissued Debt”, “Public Private Agreements” and “Table 3 – Schedule of Fee Replacement Debt” for related obligations that are subject to possible State appropriations. Table 6 Scheduled Principal and Interest Payments Obligations Payable from Possible State Appropriations Type/Series Other Facilities Series 2003C Series 2004B Series 2004D Series 2004E Series 2009A Series 2011A Series 2011C Series 2012A Series 2012B Series 2012C Energy Savings Lease 2011 Energy Savings Lease 2012 Energy Savings Lease 2013 Subtotal TOTAL STATE BUILDINGS HIGHWAY REVENUE BONDS Series 1990A Series 1992A Series 1993A Series 1998A Series 2004B Series 2004C Series 2007A Series 2010A TOTAL HIGHWAYS AVIATION FACILITIES Airport Facilities Bonds Series 2008A Subtotal Aviation Technology Bonds Series 2012K Subtotal TOTAL AVIATION FACILITIES RECREATIONAL FACILITIES Series 2012I Series 2012J TOTAL RECREATIONAL FACILITIES TOTAL ALL BONDS FY 2015 FY2016 FY2017 FY2018 Thereafter 4,151,913 9,731,669 1,422,800 2,364,194 9,247,350 1,092,975 429,000 1,969,225 798,738 1,790,213 4,512,311 2,035,385 628,018 $40,173,788 4,095,513 9,720,375 0 0 9,239,725 1,092,800 433,675 1,962,575 1,993,113 4,120,463 4,512,311 2,035,385 1,256,035 $40,461,969 4,043,513 9,709,394 0 0 9,311,925 1,093,250 2,061,325 363,950 2,008,138 4,117,963 3,767,100 2,035,385 1,256,035 $39,767,976 11,874,513 9,697,675 0 0 769,800 1,094,300 348,975 2,043,375 1,995,538 4,109,463 997,116 2,035,385 1,256,035 $36,222,173 33,148,481 27,586,863 0 0 15,505,525 22,978,000 7,313,625 9,121,800 19,956,344 41,035,363 0 11,194,618 8,164,228 $196,004,846 $40,173,788 $40,461,969 $39,767,976 $36,222,173 $196,004,846 $6,708,488 6,318,450 14,471,875 1,896,950 23,334,000 12,087,888 28,578,289 7,585,050 $0 6,308,260 21,190,000 1,896,950 22,540,863 12,080,838 28,577,245 7,269,050 $0 6,302,230 21,195,000 1,896,950 23,835,025 5,422,638 35,271,595 5,286,325 $0 0 27,500,000 1,896,950 23,816,050 8,383,900 35,295,958 2,510,300 $0 0 0 40,307,625 89,606,075 116,074,669 793,330,655 59,694,850 $100,980,989 $99,863,205 $99,209,763 $99,403,158 $1,090,013,874 $20,570,000 $20,570,000 $20,098,750 $20,098,750 $19,589,500 $19,589,500 $19,116,375 $19,116,375 $18,598,625 $18,598,625 $867,600 867,600 $863,900 863,900 $868,700 868,700 $862,750 862,750 $0 0 $21,437,600 $20,962,650 $20,458,200 $19,979,125 $18,598,625 $2,627,625 787,602 $2,652,125 801,752 $2,685,750 818,067 $2,718,000 825,843 $14,853,250 1,679,417 $3,415,227 $3,453,877 $3,503,817 $3,543,843 $16,532,667 $166,007,604 $164,741,701 $162,939,756 $159,148,299 $1,330,150,012 _____________________________________________ Source: Indiana Finance Authority (as of June 30, 2014) A - 25 Table 7 Ratios of Outstanding Debt Subject to Possible Appropriation to Population and Personal Income Fiscal Year Population(1) Personal Income(1)(2) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 6,233,007 6,278,616 6,332,669 6,379,599 6,424,806 6,459,325 6,489,856 6,516,353 6,537,334 6,570,902 192,181 197,656 209,530 217,005 224,651 217,545 223,158 236,815 249,197 255,030 Outstanding Debt Subject to Appropriation(2) Debt/Capita Debt/Income 2,467 2,518 2,460 2,466 2,362 2,245 2,137 2,013 1,944 1,601 396 401 388 387 368 348 329 309 297 244 1.3% 1.3% 1.2% 1.1% 1.1% 1.0% 1.0% 0.9% 0.8% 0.6% (1) Estimated. In millions. _____________________________________________ Source: Population and Personal Income: United States Department of Commerce, Bureau of Economic Analysis. Regional Data, GDP & Personal Income, Annual State Personal Income and Employment. Outstanding Debt: Indiana Finance Authority (2) Authorized but Unissued Debt. The General Assembly has authorized the Indiana Finance Authority (as successor to the State Office Building Commission) to issue bonds to finance additional State facilities, including: (a) (b) (c) Two additional regional mental health facilities; State-wide wireless public safety communications network; and Parking facilities in the area of the state capitol complex. In addition, legislation was enacted in 2005 that authorizes the Indiana Finance Authority to provide funds for research and technology grants and loans. The Indiana Finance Authority may initially provide short-term, or construction, financing for these facilities through its commercial paper program. As of June 30, 2014, no commercial paper was outstanding. The Indiana Finance Authority monitors refinancing opportunities for its bonds and may issue refunding bonds to restructure outstanding indebtedness or achieve debt service savings. Contingent Obligations Certain State-authorized entities, including the Bond Bank and Indiana Finance Authority, may issue obligations that, in certain circumstances, may require the entity to request an appropriation from the General Assembly to fund debt service on the obligations. The General Assembly is not required to make any such appropriations. Such obligations do not constitute an indebtedness of the State within the meaning or application of any constitutional provision or limitation. Review by the Budget Committee and approval by the Budget Director is required prior to (a) the issuance by the Bond Bank or the Indiana Finance Authority of any indebtedness that establishes a procedure for requesting an appropriation from the General Assembly to restore a debt service or other fund to required levels or (b) the execution by the Indiana Bond Bank or the Indiana Finance Authority of any other agreement that creates a moral obligation of the State to pay any indebtedness issued by the Indiana Bond Bank or the Indiana Financing Authority. Bond Bank. The Bond Bank, a body corporate and politic, is not a State agency and is separate from the State in both its corporate and sovereign capacity. The Bond Bank has no taxing power. The Bond Bank is A - 26 empowered to issue bonds or notes, payable solely from revenue and funds that are specifically allocated for such purpose, and loan the proceeds therefrom to local governments and other qualified entities. To assure maintenance of the required debt service reserve in any reserve fund established for Bond Bank bonds or notes, the General Assembly may, but is not obligated to, appropriate to the Bond Bank for deposit in any such reserve funds the sum that is necessary to restore any such reserve funds to the required debt service reserve. Bonds or notes issued by the Bond Bank for which such a debt service reserve is established are considered “moral obligation bonds.” However, bonds issued by the Bond Bank do not constitute a debt, liability or loan of the credit of the State or any political subdivision thereof under the State constitution. Particular sources are designated for the payment of and security for bonds issued by the Bond Bank, and a debt service reserve fund restoration appropriation would only be requested in the event that the particular designated sources were insufficient. The total amount of bonds and notes which the Bond Bank may have outstanding at any one time (except bonds or notes issued to fund or refund bonds or notes) is limited to $1.0 billion plus (a) up to $200 million for certain qualified entities that operate as rural electric membership corporations or as corporations engaged in the generation and transmission of electric energy and (b) up to $30 million for certain qualified entities that operate as telephone cooperative corporations. However, these limits do not apply to bonds or notes not secured by a reserve fund eligible for State appropriations. For a list of Bond Bank bonds secured by a reserve fund eligible for State appropriations, see “Table 8— Schedule of Long Term Debt—Contingent Obligations—BOND BANK Special Program Pool.” Toll Road. The Indiana Finance Authority is authorized (and its predecessor, the Indiana Transportation Finance Authority, had been authorized) to issue revenue bonds, payable from tolls and other revenues derived from the ownership and operation of toll roads, to finance or refinance the cost of any toll road projects. As of June 30, 2014, there are no bonds outstanding pursuant to this authorization. In 2006, the General Assembly enacted legislation authorizing the Indiana Finance Authority to lease the Toll Road to a private entity to operate the Toll Road for a term not to exceed 75 years. A lease agreement with ITR Concession Company LLC (“ITRCC”) was signed in April 2006, and the transaction was closed on June 29, 2006. On September 21, 2014, ITRCC filed for protection under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court in the Northern District of Illinois. ITRCC’s pre-packaged bankruptcy filing contemplated a restructuring plan whereby ITRCC would sell substantially all of its assets (including its rights under the Lease Agreement with the IFA). ITRCC’s Chapter 11 Plan was approved by the Bankruptcy Court on October 28, 2014 and ITRCC is currently in the process of soliciting bids from parties interested in purchasing its assets, including the lease rights to operate the Toll Road for the remaining term. The Toll Road has remained open to traffic through the bankruptcy and sale process and continues to be operated consistent with the requirements of the lease agreement entered into by ITRCC. Economic Development. The Indiana Finance Authority is authorized (and its predecessor, the Indiana Development Financing Authority, had been authorized) to issue revenue bonds to finance or refinance (a) industrial development projects, rural development projects, mining operations, international exports and agricultural operations; (b) educational facility projects; (c) farming and agricultural enterprises; (d) environmental pollution prevention and remediation; (e) child care facilities; and (f) broadband development projects. Pursuant to this authority, the Indiana Finance Authority (and its predecessor, the Indiana Development Finance Authority) issued its revenue bonds to finance and refinance a wide variety of projects. The bonds are payable solely from the revenues pledged thereto, are not in any respect a general obligation of the State and are not payable in any manner from revenue raised by taxation. The Indiana Finance Authority is authorized to issue revenue bonds and loan the proceeds thereof to the Indiana Stadium and Convention Building Authority for the purpose of financing the acquisition and construction of a stadium and the expansion of a convention center in Indianapolis. The legislation authorizes the Indiana Stadium and Convention Building Authority to lease such capital improvements to a State agency pursuant to a lease, which requires the State agency: (1) to seek biennial appropriations from the General Assembly in an amount sufficient to A - 27 pay rent equal to the debt service due on such bonds, only if: (a) the amount of such rent is fair and reasonable; and (b) such capital improvements are available for use and occupancy; and (2) to pay, from such appropriated amounts, rent sufficient to pay such debt service, only if certain local tax revenues expected to satisfy debt service are insufficient. In addition, the Indiana Finance Authority, in connection with the issuance of such revenue bonds, may establish a debt service reserve fund and a procedure for requesting appropriations from the General Assembly to restore the debt service reserve fund to required levels. The Indiana Finance Authority has issued $666,525,000 of such revenue bonds for the stadium project, which was completed in August 2008. The Indiana Finance Authority has issued $329,230,000 of such revenue bonds for the convention center expansion project, which was completed in January 2011. The Indiana Finance Authority is authorized to issue revenue bonds for the purpose of paying all or any part of the cost of acquisition, construction, and equipping of an industrial development project, as defined by law. The Indiana Finance Authority issued its $4,580,000 Facilities Revenue Bonds, Series 2012L and its $57,585,000 Facilities Revenue Bonds, Series 2012M to finance, acquire, construct, reconstruct, rehabilitate, remodel and renovate certain improvements at the Indiana State Fairgrounds and defease outstanding bonds of the Indiana State Fair Commission. The Indiana Finance Authority entered into a lease for such improvements with the Indiana State Fair Commission. The Indiana Finance Authority expects debt service on the bonds to be paid by or from Indiana State Fair Commission revenues and other moneys, including moneys appropriated to the Indiana State Fair Commission by the General Assembly of the State, in amounts sufficient to fully fund rental payments due under the lease. If such amounts are not sufficient to fully fund lease rental payments when due, the Indiana Finance Authority may seek an appropriation sufficient to fully fund rental payments due under the lease, which in turn are used to pay the debt service then due on the bonds. No debt service reserve fund has been established for the bonds. The improvements have been completed. In addition, legislation authorized the Indiana Finance Authority to issue up to $1.0 billion of its revenue bonds, payable from the revenues pledged thereto, to provide funds for research and technology grants and loans. The Indiana Finance Authority may establish a debt service fund or reserve fund for the bonds, to which the General Assembly may, if requested, appropriate funds necessary to pay debt service or restore the required debt service reserve. As of June 30, 2014, no such revenue bonds have been issued. Schedule of Long Term Debt. Table 8 lists the long term debt classified as contingent obligations that was outstanding on June 30, 2014. Debt classified as a contingent obligation is debt for which the issuing entity has agreed to, under certain circumstances, request an appropriation from the General Assembly to replenish a debt service reserve fund, in the case of the stadium and convention center debt, to pay rent sufficient to pay debt service only if certain local tax revenues expected to satisfy debt service are insufficient, or, in the case of Series 2012L and 2012M, to fully fund rental payments due under the lease which are in turn used to pay debt service on the bonds. See “Public Private Agreements”. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK A - 28 Table 8 Schedule of Long Term Debt Contingent Obligations Type/Series Original Par Amount Ending Balance 6/30/2013 (Redeemed)/ Issued Ending Balance 6/30/2014 BOND BANK Special Program Pool Series 2002A Series 2003C Series 2003F-1 Series 2004B Series 2004C Series 2004D Series 2005A Series 2005C Series 2005D Series 2006B-1 Series 2006B-2 Series 2006A (Ref) Series 2006C(1) Series 2006D Series 2007A (Ref) Series 2009A Series 2009C-1 Series 2009C-2(Taxable) Series 2009D Series 2010 Multi-purpose A-1 Series 2010 Multi-purpose A-2(Taxable) Series 2010 Multi-purpose A-3 Series 2011A Ref Series 2012C Ref Series 2012D Ref Series 2013A Ref $42,910,000 10,425,000 17,155,000 17,590,000 35,010,000 29,275,000 14,790,000 11,160,000 4,505,000 12,400,000 2,890,000 26,485,000 20,660,000 13,985,000 44,915,000 75,000,000 22,235,000 1,790,000 52,000,000 8,595,000 6,395,000 770,000 29,140,000 22,090,000 34,385,000 7,330,000 $13,020,000 2,645,000 5,930,000 10,570,000 29,240,000 18,555,000 10,070,000 8,185,000 3,640,000 10,875,000 1,405,000 18,295,000 16,055,000 8,390,000 43,340,000 65,180,000 20,185,000 1,535,000 46,330,000 6,005,000 2,390,000 730,000 26,925,000 21,210,000 34,385,000 7,330,000 ($13,020,000) (515,000) (2,820,000) (10,570,000) (1,020,000) (1,735,000) (610,000) (490,000) (165,000) (295,000) (320,000) (1,305,000) (1,290,000) (625,000) (1,650,000) (2,775,000) (955,000) (95,000) (1,915,000) (860,000) (685,000) (25,000) (1,940,000) (1,490,000) (1,180,000) (590,000) $0 2,130,000 3,110,000 28,220,000 16,820,000 9,460,000 7,695,000 3,475,000 10,580,000 1,085,000 16,990,000 14,765,000 7,765,000 41,690,000 62,405,000 19,230,000 1,440,000 44,415,000 5,145,000 1,705,000 705,000 24,985,000 19,720,000 33,205,000 6,740,000 $563,885,000 $432,420,000 ($48,940,000) $383,480,000 $400,000,000 211,525,000 55,000,000 120,000,000 17,665,000 191,565,000 4,580,000 57,585,000 $400,000,000 211,525,000 37,310,000 120,000,000 16,665,000 191,565,000 4,580,000 57,585,000 $0 0 (660,000) 0 0 0 (1,275,000) 0 $400,000,000 211,525,000 36,650,000 120,000,000 16,665,000 191,565,000 3,305,000 57,585,000 TOTAL INDIANA FINANCE AUTHORITY $1,057,920,000 $1,039,230,000 ($1,935,000) $1,037,295,000 TOTAL ALL BONDS $1,621,805,000 $1,471,650,000 ($50,875,000) $1,420,775,000 TOTAL BOND BANK INDIANA FINANCE AUTHORITY(2) Stadium Project Series 2005A Stadium Project Series 2007A Stadium Project Series 2008A Convention Center Expansion Project Series 2008A Convention Center Expansion Project Series 2009A Convention Center Expansion Project Series 2009B(2) Series 2012L(1) Series 2012M(1) (1) Qualified obligation revenues are expected to be sufficient to pay debt service. However, a portion of qualified obligation revenues are payable solely from General Assembly appropriations to the qualified entity. Issued under the America Recovery and Reinvestment Act of 2009 as Build America Bonds. The bonds are federally taxable, and the Indiana Finance Authority will receive a cash subsidy from the U.S. Treasury equal to 35% of the interest payable on the bonds. _____________________________________________ Source: Indiana Finance Authority (as of June 30, 2014) (2) A - 29 Public Private Agreements The Indiana Finance Authority is authorized to enter into a public-private agreement with a private sector entity to design, build, finance, operate and maintain toll roads or freeway projects. The amounts owed by the Indiana Finance Authority under a public-private agreement are payable primarily from possible State appropriations. In 2012, the Indiana Finance Authority entered into a public-private agreement with WVB East End Partners, LLC with respect to the East End Crossing of the Louisville-Southern Indiana Ohio River Bridges Project ("EEC Project"). Under the public private agreement for the EEC Project, the Indiana Finance Authority agrees to pay the developer (i) upon achievement of certain milestones, payments not to exceed $392,000,000 and (ii) commencing with substantial completion of the EEC Project, availability payments which shall not exceed a maximum established for each Fiscal Year under the agreement. That maximum is determined by adjusting the base MAP of $33,530,853 (in 2012 dollars) pursuant to a formula that, starting at the Substantial Completion Date and for each Fiscal Year thereafter, adjusts 20% of the MAP based on the change in the Consumer Price Index (All Items, BES Series ID: CUUR000SA0) and the remaining 80% of the MAP based on an annual rate of 2.5% per Fiscal Year. Availability payments are payable during the 35 year operating period of the agreement subject to EEC Project being open and available to traffic and subject to performance standards included in the agreement. In 2014, the Indiana Finance Authority entered into a public-private agreement with I-69 Development Partners LLC with respect to Section 5 of I-69 Project ("I-69 Project"). Under the public private agreement for the I-69 Project, the Indiana Finance Authority agrees to pay the developer (i) upon achievement of certain milestones, payments not to exceed $80,000,000 and (ii) commencing with substantial completion of the I-69 Project, availability payments which shall not exceed a maximum established for each Fiscal Year under the agreement. That maximum is determined by adjusting the base MAP of $20,323,123 pursuant to a formula that, starting at the Substantial Completion Date and for each Fiscal Year thereafter, adjusts 20% of the MAP based on the change in the Consumer Price Index (All Items, BES Series ID: CUUR000SA0) and the remaining 80% of the MAP based on an annual rate of 2.5% per Fiscal Year. The adjustment of the Base MAP on the Closing Date is expected to be $20,323,122.52. Availability payments are payable during the 35 year operating period of the agreement subject to the I-69 Project being open and available to traffic and subject to performance standards included in the agreement. The Indiana Finance Authority is considering entering into a public-private agreement with respect to the Indiana Portion of the Illiana Corridor and the I-65 Added Capacity Project and anticipates issuing a request for proposals in 2015. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK A - 30 Other Entities Issuing Debt The following entities, although created or designated by the State, are authorities, instrumentalities, commissions, separate bodies corporate and politic, or not-for-profit corporations separate from the State. The entities may incur debt while exercising essential governmental or public functions. Any debt incurred by the entities is secured only by specific revenue and sources pledged at the time the debt is incurred and is neither direct nor indirect debt of the State. Any such debt does not constitute an indebtedness of the State within the meaning or application of any constitutional provision or limitation. Entity Purpose of Debt Issuance Board for Depositories Provide guarantees for industrial development or credit enhancement for Indiana enterprises. Indiana Housing and Community Development Authority(1) Provide funds for construction or mortgage loans for federally assisted multi-family housing or for low and moderate income residential housing. Ports of Indiana Provide funds for ports and other projects. Indiana Secondary Market for Education Loans, Inc.(2) Provide funds for secondary market for higher education loans. Indiana State Fair Commission Provide funds for State fairgrounds. State Revolving Fund Loan Program Provide funds to assist local municipalities in financing drinking water and waste water infrastructure projects. (1) (2) Formerly, Indiana Housing Finance Authority. Authorized to issue bonds, similar to the Indiana Bond Bank, that would be eligible for General Assembly appropriations to replenish the debt service reserve funds, but has not issued and does not currently expect to issue any such bonds. A not-for-profit corporation authorized by the General Assembly. INDIANA PUBLIC RETIREMENT SYSTEM AND STATE PENSION FUNDING OBLIGATIONS INPRS and State Retirement Plans Prior to July 1, 2011, the retirement plans for public employees in the State of Indiana were administered by independent instrumentalities governed by separate boards of appointed trustees, including the Public Employees’ Retirement Fund and the Indiana State Teachers’ Retirement Fund. Legislation adopted in 2010 called for a consolidation of these entities, which began with the appointment of a joint Executive Director in May 2010, and resulted in the creation, effective July 1, 2011, of the Indiana Public Retirement System (INPRS). INPRS administers nine (9) separate public retirement plans. The State Police Pension Trust continues to be separately administered. INPRS is governed by a nine-member Board of Trustees, appointed by the Governor pursuant to the following criteria: (a) (b) (c) (d) (e) one trustee with experience in economics, finance, or investments, one trustee with experience in executive management or benefits administration, one trustee who is an active or retired member of the 1977 Fund, two trustees who are TRF members with at least 10 years of creditable service, one trustee who is a PERF member with at least 10 years of creditable service, (f) the Director of the State Budget Agency, or designee, (g) the Auditor of the State, or nominee and (h) the Treasurer of the State, or nominee. A - 31 The members of the Board of Trustees are as follows: Ken Cochran President Hamilton Southeastern Utilities, Inc. Michael Pinkham Ft. Wayne Firefighter Suzanne Crouch Auditor of the State of Indiana Deanna Oware Office of Management and Budget Sarah Beth Murphy Chief Financial Officer Private School Corporation Bret Swanson President Entropy Economics Jodi Golden Executive Director Indiana Education Savings Authority Brian Abbott Teacher Riverview Middle School Kyle Ann McKinley Rosebrough Teacher Burkhart Elementary School The Executive Director of INPRS is Steve Russo, who had previously served as TRF’s Executive Director since 2008. Russo is a graduate of Purdue University. His career has included leadership roles with the Naval Avionics Center and technology company Thomson. INPRS administers and manages the following plans: (a) Public Employees’ Retirement Fund (PERF) (b) Indiana State Teachers’ Retirement Funds (TRF) o TRF Pre-1996 Account o TRF 1996 Account (c) Prosecuting Attorneys’ Retirement Fund (PARF) (d) 1977 Police Officers’ and Firefighters’ Pension and Disability Fund (1977 Fund) (e) Legislators’ Retirement System (LRS) o Legislators’ Defined Benefit Plan (LEDB) o Legislators’ Defined Contribution Plan (LEDC) (f) Judges’ Retirement System (JRS) (g) State Excise Police, Gaming Agent, Gaming Control Officer and Conservation Enforcement Officers’ Retirement Plan (EG&C) INPRS also oversees three non-retirement funds, including the Pension Relief Fund, the Public Safety Officers’ Special Death Benefit Fund, and the State Employees’ Death Benefit Fund. Each retirement plan will continue as a separate plan under the oversight of a combined INPRS ninemember Board of Trustees. INPRS is not a merger of PERF and TRF Funds and neither the assets nor the liabilities of one fund become the assets or liabilities of the other. Individual funded status for each plan will continue to be calculated separately. Each year, INPRS will make actuarial valuations of the assets and liabilities of each of the retirement plans. At least once every five years, there will be separate actuarial investigation into the mortality, service, and compensation experience of the members of the systems and their beneficiaries. The consolidation of retirement plan administration is anticipated to enable greater efficiency, by eliminating duplication of efforts and by pooling assets together for investment purposes. The combined membership of all plans administered by INPRS is approximately 450,000 people. A - 32 Explanatory Comments Reference is made hereby to the INPRS website (www.in.gov/inprs) for access to copies of relevant plan documents. The discussions and tables which follow contain technical information for which the following explanatory comments may be helpful. (a) Certain key definitions applicable to the State’s pension plans are shown in Key Definitions below. (b) Pension plan financial reporting contains both actual historical information and actuarially determined information. Actuarially determined information is based on specific sets of assumptions. Detailed descriptions of relevant assumptions for each plan can be found in the INPRS Comprehensive Annual Financial Report (CAFR) as referenced herein. (c) Actuarially Determined Contribution (or ADC) are determined by the plan’s administrator or board to be the aggregate amount expected to be required from each participating employer based on the plan’s assumptions in various matters, in order to pay “normal costs” and payments made to amortize any “unfunded accrual actuarial liability.” The administrator will assess each participating employer a contribution requirement expressed as percentage of covered payroll which is projected to produce the desired ADC amount. Actual employer contributions reflect the application of the designated percentage to actual payroll during the period and, thus, often vary from the ADC as calculated and assessed. (d) Discussions under this Section “INPRS and State Retirement Plans” are focused primarily on financial reporting and plan descriptions for the State plans. Discussions under the following Section “State Pension Funding Obligations” are intended to highlight the actual funding requirements of State government. (e) In 2012, the Indiana General Assembly passed P.L. 160-2012, which provides that if the amount of the state general fund excess reserves is less than $50,000,000, the excess reserves shall be carried over to the next year; and that if the excess reserves are $50,000,000 or more, 50% of the excess reserves shall be transferred to certain pension funds and 50% of the excess reserves shall be used for the purposes of providing an automatic taxpayer refund. In 2012, the JRS, PARF, EG&C, as defined below, and the 1987 Plan of Indiana State Police Pension Trust received 50% of the general fund excess in order to increase their funding levels to 80%. Any money that remained after funding the JRS, PARF, EG&C, and the 1987 Plan of Indiana State Police Pension Trust to 80% went to the Pension Stabilization Fund to fund the TRF Pre-1996 Account unfunded liability. If there is an excess in the general fund in or after 2013, then 50% of the excess will go to the Pension Stabilization Fund. In November 2012, the State transferred $90.2 million to JRS, $17.4 million to PARF, $14.6 million to EG&C, $31.6 million to Indiana State Police, and $206.8 million to the TRF Pension Stabilization Fund. During Fiscal Year 2014, there were no excess reserves transferred to the Pension Stabilization Fund. Key Definitions Actuarial Accrued Liability (AAL). That portion, as determined by a particular Actuarial Cost Method, of the actuarial present value of pension plan benefits and expenses that is not provided for by future Normal Costs. Generally this means the portion of the present value of future benefits attributable to past service. Actuarial Cost Method. A method used to develop the actuarial present value of benefits and the allocations of such costs to certain periods of time in order to develop the AAL. Two common Actuarial Cost Methods are projected unit credit, or PUC, and entry age normal, or EAN. The PUC method tends to push more costs into the later part of a member’s service. The EAN method develops a level contribution as a percent of pay (Normal Cost) which, if contributed and invested through the member’s career, is expected to generate sufficient funds to equal the actuarial value of the future benefits by the time the member retires. In order to keep the costs level, EAN allocates a large Normal Cost for the earlier years and a relatively smaller Normal Cost to the later years A - 33 compared to the PUC method. All plans administered by INPRS use EAN, except the Legislators’ Defined Benefit Plan which uses PUC for funding purposes only. Actuarial Value of Assets (AVA). The value of cash, investments, and other property belonging to a pension plan, as used by the actuary for the purpose of an actuarial valuation. An Actuarial Value (in contrast to a current market value) attempts to smooth annual investment return performance over multiple years to reduce annual return volatility. Actuarially Determined Contribution (ADC). The aggregate in a particular year of (i) the Normal Cost and (ii) payments made to amortize the UAAL. Amortization Period. The period over which the UAAL (defined below) is amortized, which can be either a “fixed” (or “closed”) period of a “rolling” (or “open”) period. During a fixed period, the UAAL is amortized over a declining number of years; for example, 30 years the first year, 29 years the second year, etc. During a rolling period, the UAAL is amortized over an unchanging number of years; for example, 15 years the first year, 15 years the second year, etc. All plans administered by INPRS use closed 30-year amortization periods. Annual Pension Costs (APC). The aggregate in a particular year of (i) the ADC, (ii) one year’s interest on the NPO (defined below), and (iii) an adjustment to the ADC to offset, approximately, the amount included in item (i) for amortization of past contribution deficiencies. Assumptions. An actuarial report will utilize demographic and economic assumptions as to the occurrence of future events affecting pension costs, such as investment rate of return, inflation rate, interest credited to member contributions, salary increase rate, annual cost-of-living adjustment, rates of separation from active membership, post-retirement mortality active member mortality, and rates of retirement. Funded Ratio. The ratio of (A) the AVA or market value of assets to (B) AAL. Such valuation can be on an actuarial or a market value basis. If a plan has a funded ratio of less than 100%, then the plan has a UAAL. GASB. Governmental Accounting Standards Board of the Financial Accounting Foundation. Market Value of Assets. As of the valuation date, the value of assets as if they were liquidated on that date. Net Pension Obligation (NPO). The cumulative differences between the APC and actual employer contribution (e.g., does not include contributions by the employees or any Employer Offset) in a particular year. Normal Cost. The present value of the benefits that the pension system projects to become payable in the future that are attributable to a valuation year’s payroll. Smoothing Method. A method used in determining AVA that is intended to reduce the impact of market volatility on the assets of a pension plan. Under a Smoothing Method, the annual investment return performance is “smoothed” over multiple years to reduce annual contribution volatility. For example, by use of a “five-year smoothing” methodology, a percentage difference between the net market value and the net book value for each of the most recent five years is calculated. The resulting percentages are averaged for the five-year period and applied to the valuation’s year’s market value of assets to arrive at the actuarial value of assets, with the result that only 20% of investment gains or losses in a particular year are taken into account in the annual actuarial valuation. All INPRS-administered plans use a four-year smoothing method with a 20% corridor. Unfunded Actuarial Accrued Liability (or UAAL). The difference between (A) the AVA or market value of assets and (B) the AAL. Such valuation can be on an actuarial or a market value basis. A - 34 Public Employees’ Retirement Fund The Public Employees’ Retirement Fund (“PERF”) has been in existence since 1945 to provide retirement, disability and survivor benefits for most State and local government employees. Prior to July 1, 2011, PERF was administered by a six-member Board of Trustees, and after that date, by INPRS. All State employees and all employees of participating political subdivisions in covered positions, including elected and appointed officials, are required to join PERF. On June 30, 2014, PERF had over 288,000 members. There are two (2) tiers to the PERF Plan. The first is the Public Employees’ Defined Benefit Plan (PERF Hybrid Plan) and the second is the Public Employees’ ASA Only Plan (PERF ASA Only Plan). The PERF Hybrid Plan benefit consists of (1) a pension formula benefit based upon years of service and an average of the member’s annual compensation as defined by statute, and (2) an additional benefit based upon the member’s annuity savings account balance, derived from employee contributions. The employee contribution rate is defined by law as 3.0% of each employee’s salary. For State employees, the law requires the State to pick up the employee’s contributions to PERF. The PERF ASA Only Plan was effective March 1, 2013 so newly hired full-time employees of the state of Indiana can elect to participate in either the PERF Hybrid Plan or the PERF ASA Only Plan. The PERF ASA Only Plan maintains an Annuity Savings Account for each member. Each member’s account consists of two (2) subaccounts within the Annuity Savings Account structure. There is a member contribution subaccount (which is the same as the Annuity Savings Account in the PERF Hybrid) and an employer contribution subaccount. The member’s contribution subaccount consists of the member’s contributions, set by statue at three (3) percent of compensation. The employer contribution subaccount consists of the employer’s contributions which are set by the INPRS Board of Trustees. A member is immediately vested in the member contribution account. In order to receive contributions from the employer contribution account, a member must meet vesting requirements (full years of participation) to qualify for a distribution. Contributions are made to PERF by the State and local units determined by normal cost and amortizing the unfunded accrued liability during periods established pursuant to statute. Contribution rates are set by INPRS (and prior to July 1, 2011, by the PERF Board of Trustees) based on annual actuarial valuations. The State is responsible for making contributions for State employee members only. The State’s contribution rate effective July 1, 2014 to June 30, 2015 is 11.2%. Funding for the State’s obligation to PERF is included as part of the expenditures for fringe benefits by each State agency. The tables below highlight the funded status (Table 9) and contribution history (Table 10) for PERF for the last six (6) valuation dates. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK A - 35 Table 9 Schedule of Funding Progress (dollars in thousands) Actuarial Valuation Date Actuarial Value of Plan Assets (a) Actuarial Accrued Liability (AAL) Entry Age (b) Unfunded AAL (UAAL) (b-a) Funded Ratio (a/b) Annual Covered Payroll(1) (c) UAAL as a Percentage of Covered Payroll(1) ((b-a)/c) 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 12,569,336 12,357,199 12,000,586 12,088,225 12,947,283 13,791,261 13,506,280 14,506,052 14,913,147 15,784,240 16,145,681 16,732,223 936,944 2,148,853 2,912,561 3,696,015 3,198,398 2,940,962 93.1% 85.2% 80.5% 76.6% 80.2% 82.4% 4,850,000 4,800,000 4,500,000 4,550,000 4,700,000 4,896,635 19.0% 43.9% 60.4% 75.4% 67.1% 60.1% Table 10 Schedule of Employer Contributions (dollars in thousands) Fiscal Year Ended Valuation Date 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013(1) 6/30/2014 6/30/2008 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 Actuarially Determined Contribution 326,170 329,731 351,000 449,388 464,047 528,562 Annual Employer Contributions(1) 323,151 331,090 342,779 397,843 455,658 519,576 Percentage Contributed(1) 99.1% 100.4% 97.7% 88.5% 98.2% 98.3% (1) Annual Covered Payroll and Actuarially Determined Contribution were adjusted to reflect actual employer payroll. Previously reported amounts were based on actuarial estimates. For further information about PERF including CAFRs for the most recent fiscal years, as well as the most recent actuarial valuation report, current investment policy statement and other materials, go to www.in.gov/inprs and click “Publications”. For more information on the State’s funding obligations regarding PERF, see “INDIANA PUBLIC RETIREMENT SYSTEM AND STATE PENSION FUNDING OBLIGATIONS– State Pension Funding Obligations, 1. PERF as to State Employees.” Indiana State Teachers’ Retirement Funds The Teachers’ Retirement Funds (“TRF”) consists of two multiple-employer retirement plans, the TRF Pre1996 Account and the TRF 1996 Account and were established to provide pension benefits for teachers and their supervisors in the State’s public schools. Membership in TRF is required for all legally qualified and regularly employed public school teachers. TRF provides retirement benefits, as well as death and disability benefits. TRF’s benefits consist of (1) a defined benefit (“DB”) based upon years of service and final average salary and (2) an additional benefit based upon the member’s annuity savings account (“ASA”) balance, derived from member contributions. The mandatory member contribution rate to his or her TRF ASA is defined by law as 3.0% of each member’s salary. Each employer is authorized to elect to pick up the member contribution. A - 36 TRF Pre-1996 Account The Indiana General Assembly created the Teacher’s Retirement Fund in 1921 as a “pay-as-you-go” DB Retirement system to provide pension and disability benefits to its members and their survivors/beneficiaries who meet the statutory requirements for such benefits. Pay-as-you-go means that the State did not pre-fund the teachers’ retirements through employer contributions while the members were actively teaching. Instead, the State appropriated money for the retirement benefits as they became due for payment. To reduce the amount of future state appropriations to the TRF Pre-1996 Account, the State established the Pension Stabilization Fund in July 1, 1995, to partially pre-fund liabilities in the TRF Pre-1996 Account. The Pension Stabilization Fund has the result of limiting the peak required annual appropriations to the TRF Pre-1996 Account at a 3.0% increase over the prior year based on an assumed annual investment return of 5.0%. As of June 30, 2014, the balance of the Pension Stabilization Fund was approximately $2.9 billion. See also INDIANA PUBLIC RETIREMENT SYSTEM AND STATE PENSION FUNDING OBLIGATIONS - “State Pension Funding Obligations, 2. TRF Pre-1996 Account” for a further discussion on the State funding obligations for the TRF Pre-1996 Account. The following tables establish the six (6) year history of funding progress and contributions, respectively, for the TRF Pre-1996 Account (Tables 11 and 12), and the TRF 1996 Account (Tables 13 and 14). Table 11 TRF Pre-1996 Account Schedule of Funding Progress (dollars in thousands) Actuarial Valuation Date Actuarial Value of Plan Assets (a) 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 5,109,086 5,382,410 5,227,402 4,978,107 5,235,104 5,358,351 Actuarial Accrued Liability (AAL) Entry Age (b) Unfunded AAL (UAAL) (b-a) Funded Ratio (a/b) Annual Covered Payroll (c) 16,027,093 16,282,066 16,318,404 16,522,015 16,462,379 16,355,216 10,918,007 10,899,656 11,091,002 11,543,908 11,227,275 10,996,865 31.9% 33.1% 32.0% 30.1% 31.8% 32.8% 2,030,484 1,865,102 1,762,750 1,637,066 1,383,428 1,262,828 REMAINDER OF PAGE INTENTIONALLY LEFT BLANK A - 37 UAAL as a Percentage of Covered Payroll ((b-a)/c) 537.7% 584.4% 629.2% 705.2% 811.6% 870.8% Table 12 TRF Pre-1996 Account Schedule of Contributions From the Employers and other Contributing Entities (dollars in thousands) Fiscal Year Ended Valuation Date 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2007 6/30/2008 6/30/2009 6/30/2010 6/30/2011 6/30/2012 Actuarially Determined Contribution 700,307 850,493 894,507 866,207 873,751 879,072 Actual Employer Contributions Percentage Contributed 706,366 731,149 748,978 764,423 1,013,080 831,942 100.9% 86.0% 83.7% 88.2% 115.9%(1) 94.6% (1) The TRF Pre-1996 Account was appropriated additional monies from the excess state reserves of $206,796,000 during fiscal year 2013. TRF 1996 Account In 1995, legislation was passed that closed the pay-as-you-go plan (named the “TRF Pre-1996 Account”) to newly hired members and created a new account for teachers hired after June 30, 1995 (The “TRF 1996 Account”). The TRF 1996 account was established to be actuarially pre-funded by requiring school corporations to set aside a fixed percentage of payroll for teacher retirements. INPRS sets the contribution rate for the TRF 1996 Account based on an actuarial valuation of the TRF 1996 Account. The TRF 1996 Account was intended to be responsible not only for newly hired teachers into the schools, but also for the cost of teachers who began service before 1995 but subsequently transferred to other school corporations after 1995. The liability for these transferred teachers, which shifted from the TRF Pre-1996 Account to the TRF 1996 Account, began to cause an unfunded liability in the TRF 1996 Account. The General Assembly in 2005 addressed this growing unfunded liability in the TRF 1996 Account by stopping the transfer of liabilities— therefore transferred teachers remain part of the TRF Pre-1996 Account, which is “pay as you go”. In addition, the actuarial assumptions used for calculating the contribution rate into the TRF 1996 Account now include an assumption for a cost of living adjustment, thereby making the contribution rate for which local schools are liable more realistic. The contribution rate effective July 1, 2014 to June 30, 2015 for the TRF 1996 Account is 7.5%. Table 13 TRF 1996 Account Schedule of Funding Progress (dollars in thousands) Actuarial Valuation Date Actuarial Value of Plan Assets (a) Actuarial Accrued Liability (AAL) Entry Age (b) 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 2,920,735 3,422,554 3,664,657 3,936,455 4,453,828 5,035,232 3,135,533 3,614,559 3,996,839 4,338,309 4,749,368 5,236,993 Unfunded AAL (UAAL) (b-a) 214,798 192,005 332,182 401,854 295,540 201,761 A - 38 Funded Ratio (a/b) 93.1% 94.7% 91.7% 90.7% 93.8% 96.1% Annual Covered Payroll (c) 2,075,000 2,200,000 2,225,000 2,400,000 2,442,496 2,598,115 UAAL as a Percentage of Covered Payroll ((b-a)/c) 10.4% 8.7% 14.9% 16.7% 12.1% 7.8% Table 14 TRF 1996 Account Schedule of Contributions From the Employers and other Contributing Entities (dollars in thousands) Fiscal Year Ended Valuation Date 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2007 6/30/2008 6/30/2009 6/30/2010 6/30/2011 6/30/2012 Actuarially Determined Contribution(1) 125,330 99,000 135,057 154,800 167,300 177,711 Actual Employer Contributions 147,425 154,491 166,633 181,067 180,714 194,751 Percentage Contributed(1) 117.6% 156.1% 123.4% 117.0% 108.0% 109.6% (1) Annual Covered Payroll and Actuarially Determined Contribution were adjusted to reflect actual employer payroll. Previously reported amounts were based on actuarial estimates. For further information about either of these 2 TRF Plans including CAFRs for the most recent fiscal years, as well as the most recent actuarial valuation report, current investment policy statement and other materials, go to www.in.gov/inprs and click “Publications”. In addition, CAFRs and actuarial reports are also available for prior fiscal years at the referenced website. Other Plans INPRS also administers six other plans in addition to PERF and TRF. These include the 1977 Police Officers’ and Firefighters’ Pension and Disability Fund, the Judges’ Retirement System, the Legislators’ Retirement System (Legislators’ Defined Benefit Plan-LEDB & Legislators’ Defined Contribution Plan-LEDC), the State Excise Police, Gaming Agent, Gaming Control Officer and Conservation Enforcement Officers’ Retirement Plan, and the Prosecuting Attorneys’ Retirement Fund. Table 15 highlights the actuarial valuation results for these plans as of June 30, 2014. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK A - 39 Table 15 Other State Pension Funds Summary of Results of Actuarial Valuation as of June 30, 2014 (dollars in thousands) Judges’ Retirement System Legislators’ Defined Benefit Plan State Excise Police, Gaming Agent, Gaming Control Officer & Conservation Enforcement Officers’ Retirement Plan Prosecuting Attorneys’ Retirement Fund 1977 Police Officers’ and Firefighters’ Pension and Disability Fund Funded Status Actuarial Value of Assets Actuarial Accrued Liability (AAL) Unfunded/(Overfunded) AAL Funded Ratio Contribution History 419,568 464,855 45,287 90.3% 3,467 4,173 706 83.1% 107,563 123,600 16,037 87.0% 52,936 65,336 12,400 81.0% 4,625,475 4,706,997 81,522 98.3% 27,648 20,895 75.6% 138 138 100.00% 5,341(1) 5,359 100.3%(1) 2,345 1,174 50.1% 103,425(1) 140,119 135.5%(1) Actuarially Determined Contribution Actual Employer Contributions Percentage Contributed (1) Actuarially Determined Contribution is based on actual employer payroll. ___________________________________________ Source: Actuarial Valuation Reports, June 30, 2014 Further information about other plans including CAFRs for the most recent fiscal years, as well as the most recent actuarial valuation report, current investment policy statement and other materials, go to www.in.gov/inprs and click “Publications”. In addition, CAFRs and actuarial reports are also available for prior fiscal years. 1977 Police Officers’ and Firefighters’ Pension Disability Fund The 1977 Police Officers’ and Firefighters’ Pension and Disability Fund (“1977 Fund”) has been in existence since 1977 to provide retirement, disability and survivor benefits for Police Officers and Firefighters. Prior to July 1, 2011, the 1977 Fund was administered by a six-member Board of Trustees, and after that date, by INPRS. On June 30, 2014, the 1977 Fund had 17,711 members, survivors and beneficiaries. The pension benefit consists of a pension formula benefit based upon years of service and the first-class salary as defined by statute. The employee contribution rate is defined by law as 6% of first-class salary. Contributions are made to the 1977 Fund by the participating employer units as determined by INPRS. Contribution rates are set by INPRS (and prior to July 1, 2011, by the PERF Board of Trustees) based on annual actuarial valuations. Funding for the participating employer unit’s obligation to the 1977 Fund is included as part of the expenditures for fringe benefits by the participating unit. The tables below highlight the funded status (Table 16) and contribution history (Table 17) for the 1977 Fund for the last six (6) valuation dates. A - 40 Table 16 Schedule of Funding Progress (dollars in thousands) Actuarial Valuation Date Actuarial Value of Plan Assets (a) 12/31/2008 6/30/2009(2) 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 3,352,705 3,265,598 3,374,438 3,593,787 3,786,595 4,108,704 4,625,475 Actuarial Accrued Liability (AAL) Entry Age (b) 3,150,827 3,332,686 3,639,669 3,638,956 4,122,436 4,392,947 4,706,997 Unfunded AAL (UAAL) (b-a) (201,878) 67,088 265,231 45,169 335,841 212,243 81,522 Funded Ratio (a/b) 106.4% 98.0% 92.7% 98.8% 91.9% 95.2% 98.3% Annual Covered Payroll(1) (c) 635,000 330,000 670,000 687,000 690,000 695,000 710,581 UAAL as a Percentage of Covered Payroll(1) ((b-a)/c) (31.8)% 20.3% 39.6% 6.6% 48.7% 30.5% 11.5% Table 17 Schedule of Employer Contributions (dollars in thousands) Fiscal Year Ended Valuation Date 12/31/2008 6/30/2009(2) 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 12/31/2007 6/30/2008 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 Actuarially Determined Contribution(1) 123,825 64,285 94,135 117,820 132,549 112,590 103,425 Annual Employer Contributions 133,196 64,285 130,775 133,726 135,605 137,111 140,119 Percentage Contributed 107.6% 100.0% 138.9% 113.5% 102.3% 121.8% 135.5% (1) Annual Covered Payroll and Actuarially Determined Contribution were adjusted to reflect actual employer payroll. Previously reported amounts were based on a actuarial estimates. (2) Represents only a half year of activity The 1977 Fund provides pension and disability benefits for local police officers and firefighters hired after April 30, 1977. Benefits for the members of this plan have been funded on an actuarial basis through contributions from cities and towns and from plan members. In addition, the INPRS Board of Trustees administers a Pension Relief Fund for local police and fire units whose employees participate in the 1925 police pension fund, the 1937 firefighters’ pension fund and the 1953 police pension fund (the “Old Funds”). Benefits for the members who participate in the Old Funds have been funded on a “pay-as-you-go” basis, under which benefits are paid from current revenue of cities and towns and by plan members’ contributions. The State currently reimburses cities and towns for their entire pension benefit expenditure under the Old Funds via the Pension Relief Fund, but previously reimbursed cities and towns for only a portion of their pension benefit expenditures. To provide such pension relief, the State has dedicated a portion of the State’s cigarette tax revenue, liquor tax revenue, Hoosier Lottery profits, and investment earnings on the Public Deposit Insurance Fund. From time to time, the General Assembly has also appropriated general and dedicated funds to pension relief. During Fiscal Year 2014, $220 million was expended from the Pension Relief Fund, and on June 30, 2014, the total net assets of the Pension Relief Fund was $17 million. A - 41 Further information about the 1977 Fund including CAFRs for the most recent fiscal years, as well as the most recent actuarial valuation report, current investment policy statement and other materials, go to www.in.gov/inprs and click “Publications”. Judges’ Retirement System The first Judges’ Retirement Plan was created in 1953. In 1985, the Judges’ Retirement System (“JRS”) was formed to provide retirement, disability and survivor benefits for Judges. Prior to July 1, 2011, The Judges’ Retirement System was administered by a six-member Board of Trustees, and after that date, by INPRS. All Judges and magistrates in covered positions are required to join the JRS. On June 30, 2014, the JRS had 785 members, survivors and beneficiaries. The pension benefit consists of a pension formula benefit based upon years of service and the member’s salary as defined by statute. The employee contribution rate is defined by law as 6% of each employee’s salary. Contributions are made to the JRS by the State as determined by INPRS. Contribution amounts are set by INPRS (and prior to July 1, 2011, by the PERF Board of Trustees) based on the annual actuarial valuation. The State’s obligation to the JRS is funded by appropriations from the state general fund. The tables below highlight the funded status (Table 18) and contribution history (Table 19) for the JRS for the last six (6) valuation dates. Table 18 Schedule of Funding Progress (dollars in thousands) Actuarial Valuation Date Actuarial Value of Plan Assets (a) 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 240,954 242,143 248,623 260,096 381,240 419,568 Actuarial Accrued Liability (AAL) Entry Age (b) 330,551 364,123 400,274 437,854 453,110 464,855 Unfunded AAL (UAAL) (b-a) 89,597 121,980 151,651 117,758 71,870 45,287 Funded Ratio (a/b) Annual Covered Payroll (c) 72.9% 66.5% 62.1% 59.4% 84.1% 90.3% 36,196 36,722 45,764 45,138 47,595(1) 46,041 REMAINDER OF PAGE INTENTIONALLY LEFT BLANK A - 42 UAAL as a Percentage of Covered Payroll ((b-a)/c) 247.5% 332.2% 331.4% 393.8% 151.0%(1) 98.4% Table 19 Schedule of Employer Contributions (dollars in thousands) Fiscal Yea Ended Valuation Date 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2008 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 Actuarially Determined Contribution 16,131 16,077 18,910 19,664 25,458 27,648 Annual Employer Contributions 20,861 18,631 19,200 18,896 111,419(2) 20,895 Percentage Contributed 129.3% 115.9% 101.5% 96.1% 437.7%(2) 75.6% (1) Annual Covered Payroll was adjusted to reflect actual employer payroll. The previously reported amount, based on actuarial estimates, was 46,967 and percentage was 153.0%. (2) In accordance with Legislation passed during March 2012, the State appropriated $90,187,000 during FY 2013 to reach a funded status of 80.0 percent based on the actuarial valuations as of June 30, 2012. Further information about the JRS including CAFRs for the most recent fiscal years, as well as the most recent actuarial valuation report, current investment policy statement and other materials, go to www.in.gov/inprs and click “Publications”. Prosecuting Attorneys’ Retirement Fund (“PARF”) has been in existence since 1989 to provide retirement, disability and survivor benefits for Prosecuting Attorneys, Chief Deputy Prosecuting Attorneys and Deputy Prosecuting Attorneys. Prior to July 1, 2011, PARF was administered by a six-member Board of Trustees, and after that date, by INPRS. All Prosecuting Attorneys, Chief Deputy Prosecuting Attorneys and Deputy Prosecuting Attorneys are required to join PARF. PARF members are also required to join PERF. On June 30, 2014, PARF had 550 members, survivors and beneficiaries. The PARF benefit consists of a pension formula benefit based upon years of service and the member’s annual compensation as defined by statute. The employee contribution rate is defined by law as 6% of each employee’s salary. The employer may pick up the employee’s contributions to PARF. Contributions are made to PARF by the State determined by normal cost and amortizing the unfunded accrued liability during periods established pursuant to statute. Contribution amounts are set by INPRS (and prior to July 1, 2011, by the PERF Board of Trustees) based on annual actuarial valuations. The tables below highlight the funded status (Table 20) and contribution history (Table 21) for PARF for the last six (6) valuation dates. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK A - 43 Table 20 Schedule of Funding Progress (dollars in thousands) Actuarial Valuation Date Actuarial Value of Plan Assets (a) Actuarial Accrued Liability (AAL) Entry Age (b) 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 26,467 26,166 25,651 27,501 48,762 52,936 44,632 49,174 53,252 56,080 61,940 65,336 Unfunded AAL (UAAL) (b-a) 18,165 23,008 27,601 28,579 13,178 12,400 Funded Ratio (a/b) Annual Covered Payroll (c) 59.3% 53.2% 48.2% 49.0% 78.7% 81.0% 20,782 21,016 18,082 21,705 18,805(1) 20,608 UAAL as a Percentage of Covered Payroll ((b-a)/c) 87.4% 109.5% 152.6% 131.7% 70.1%(1) 60.2% Table 21 Schedule of Employer Contributions (dollars in thousands) Fiscal Year Ended 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 Valuation Date 6/30/2008 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 Actuarially Determined Contribution 1,340 1,663 1,960 2,037 2,542 2,345 Annual Employer Contributions 170 170 170 1,839 19,443(2) 1,174 Percentage Contributed 12.7% 10.2% 8.7% 90.3% 764.9%(2) 50.1 (1) Annual Covered Payroll was adjusted to reflect actual employer payroll. The previously reported amount, based on actuarial estimates, was 21,217 and percentage was 62.1%. (2) In accordance with Legislation passed March 2012, the State appropriated $17,363,000 during FY 2013 to reach a funded status of 80.0 percent based on the actuarial valuations as of June 30, 2012. Further information about PARF including CAFRs for the most recent fiscal years, as well as the most recent actuarial valuation report, current investment policy statement and other materials, go to www.in.gov/inprs and click “Publications”. Legislators’ Retirement System The Legislators’ Retirement System (“LRS”) has been in existence since 1989 to provide retirement, disability and survivor benefits for members of the General Assembly. Prior to July 1, 2011, the LRS was administered by a six-member Board of Trustees, and after that date, by INPRS. The LRS includes two plans: The Legislators’ Defined Benefit Plan (“LEDB”) and the Legislators’ Defined Contribution Plan (“LEDC”). The LEDB includes only legislators of the state of Indiana who were serving on April 30, 1989, and elected participation. Legislators elected or appointed after April 30, 1989 participate in the LEDC. On June 30, 2014, the LEDB had 101 members, survivors and beneficiaries. The LEDB benefit consists of a pension formula benefit based upon the lesser of $40 per month times the years of service in the General Assembly A - 44 prior to November 8, 1989 or the highest consecutive three-year average annual salary at termination, divided by twelve. Contributions are made to the LEDB by the State determined by normal cost and amortizing the unfunded accrued liability of each unit during periods established pursuant to statute. Contribution amounts are set by INPRS (and prior to July 1, 2011, by the PERF Board of Trustees) based on annual actuarial valuations. The LEDB is funded by appropriations from the State general fund. The tables below highlight the funded status of the LEDB (Table 22) and contribution history (Table 23) for the LEDB for the last six (6) valuation dates. Table 22 Schedule of Funding Progress (dollars in thousands) Actuarial Valuation Date Actuarial Value of Plan Assets (a) Actuarial Accrued Liability (AAL) Entry Age (b) Unfunded AAL (UAAL) (b-a) 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 4,730 4,075 3,634 3,377 3,428 3,467 5,087 4,909 4,621 4,503 4,295 4,173 357 834 987 1,126 867 706 Funded Ratio (a/b) Number of Active Participants (c) UAAL per Covered Participant ((b-a)/c) 33 20 7 6 24 24 11 42 141 188 36 29 93.0% 83.0% 78.6% 75.0% 79.8% 83.1% Table 23 Schedule of Employer Contributions (dollars in thousands) Fiscal Year Ended Valuation Date Actuarially Determined Contribution 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2008 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 45 63 113 113 140 138 Annual Employer Contributions 100 112 150 138 Percentage Contributed 222.2% 0.0% 0.0% 99.1% 107.1% 100.0% On June 30, 2014 the LEDC had 219 members. The LEDC employee contribution rate is defined by law as 5%. Contributions are made to the LEDC by the state based on a rate determined by the INPRS board and confirmed by the budget agency not to exceed the total contribution rate paid that year by the state to INPRS for state employees. Further information about the LEDB and LEDC plans including CAFRs for the most recent fiscal years, as well as the most recent actuarial valuation report, current investment policy statement and other materials, go to www.in.gov/inprs and click “Publications.” State Excise Police, Gaming Agent, Gaming Control Officer and Conservation Enforcement Officers’ Retirement Plan The State Excise Police, Gaming Agent, Gaming Control Officer and Conservation Enforcement Officers’ Retirement Plan (“EG&C”) has been in existence since 1972 to provide retirement, disability and survivor benefits A - 45 for Excise Police, Gaming Agents, Gaming Control Officers and Conservation Enforcement Officers. Prior to July 1, 2011, EG&C was administered by a six-member Board of Trustees, and after that date, by INPRS. All Excise Police, Gaming Agents, Gaming Control Officers and Conservation Enforcement Officers are required to join EG&C. On June 30, 2014, EG&C had 757 members, survivors and beneficiaries. The EG&C benefit consists of a pension formula benefit based upon years of service and the member’s annual compensation as defined by statute. The employee contribution rate is defined by law as 4% of each employee’s salary. The employer may pick up the employee’s contributions to EG&C. Contributions are made to EG&C by the State determined by normal cost and amortizing the unfunded accrued liability during periods established pursuant to statute. Contribution rates are set by INPRS (and prior to July 1, 2011, by the PERF Board of Trustees) based on annual actuarial valuations. Funding for the State’s obligation to EG&C is included as part of the expenditures for fringe benefits by each State agency. The tables below highlight the funded status (Table 24) and contribution history (Table 25) for EG&C for the last six (6) valuation dates. Table 24 Schedule of Funding Progress (dollars in thousands) Actuarial Valuation Date Actuarial Value of Plan Assets (a) Actuarial Accrued Liability (AAL) Entry Age (b) 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 68,170 70,327 72,599 76,007 98,608 107,563 89,296 97,862 101,534 113,283 118,097 123,600 Unfunded AAL (UAAL) (b-a) 21,126 27,535 28,935 37,276 19,489 16,037 Funded Ratio (a/b) Annual Covered Payroll (c) 76.3% 71.9% 71.5% 67.1% 83.5% 87.0% 25,500 25,300 25,000 24,300 24,675 25,825 UAAL as a Percentage of Covered Payroll ((b-a)/c) 82.8% 108.8% 115.7% 153.4% 79.0% 62.1% Table 25 Schedule of Employer Contributions (dollars in thousands) Fiscal Year Ended Valuation Date 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2008 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 Actuarially Determined Contribution(1) 5,294 4,200 4,112 4,556 4,795 5,341 Annual Employer Contributions 5,294 5,256 5,197 5,054 19,740(2) 5,359 Percentage Contributed 100.0% 125.1% 126.4% 110.9% 411.8%(2) 100.3% (1) Annual Covered Payroll and Actuarially Determined Contribution were adjusted to reflect actual employer payroll. Previously reported amounts were based on actuarial estimates. (2) In accordance with Legislation passed during March 2012, the State appropriated $14,619,000 during FY 2013 to reach a funded status of 80.0 percent based on the actuarial valuations as of June 20, 2012. Further information about EG&C including CAFRs for the most recent fiscal years, as well as the most recent actuarial valuation report, current investment policy statement and other materials, go to www.in.gov/inprs and click “Publications”. A - 46 Indiana State Police Pension Trust The Indiana State Police Pension Trust was established in 1937. The Trust consists of a two-part State Police Benefit System, the Pre-1987 Plan and the 1987 Plan, that provide retirement benefits to the employee beneficiaries. The Trust is administered by the Pension Advisory Board, which consists of the Superintendent of the Department of State Police; a representative of the pension consultants and the Trustee (Treasurer of State of Indiana), who both serve on a nonvoting basis; three active employees of the Department of State Police; and an Executive Secretary who is appointed by the Superintendent. The State Police Pension Fund shall consist of voluntary contributions from the Department, contributions deducted from the wages of employees of the Department, any other payments or contributions made by the State of Indiana in the form of appropriations from the State’s General Fund and the Motor Vehicle Highway Fund, and the income and proceeds derived from the investment of the Fund. Employees who are participating in the Pre-1987 Plan shall make contributions equal to 5% of their salary, provided that the maximum contribution shall be equal to 5% of the Six Year Trooper Salary. Employees who are participating in the 1987 Plan shall make contributions equal to 6% of their salary. The method used in determining the annual required contributions and the calculation of the unfunded actuarial accrued liability is the Entry Age Actuarial Cost Method. A smoothed basis method is used for the asset valuation. See the following tables for the funding status and a contribution history. Table 26 Schedule of Funding Progress (a) (b) Actuarial Value of Assets Actuarial Accrued Liability (AAL)* Unfunded AAL (UAAL) (b) - (a) 7/1/2008 $386,872,985 $438,460,280 $ 51,587,295 88.2% $65,421,105 78.9% 7/1/2009 $356,056,202 $453,687,692 $ 97,631,490 78.5% $68,283,255 143.0% 7/1/2010 $363,487,316 $447,063,504 $ 83,576,188 81.3% $66,603,419 125.5% 7/1/2011 $361,457,004 $470,852,078 $109,395,074 76.8% $64,947,968 168.4% 7/1/2012 $403,851,491 $504,814,363 $100,962,872 80.0% $66,083,075 152.8% 7/1/2013 $434,286,555 $523,215,958 $ 88,929,403 83.0% $64,346,657 138.2% 7/1/2014 $459,849,238 $540,797,399 $ 80,948,161 85.0% $68,490,381 118.2% Valuation Date (c) (d) Funded Ratio (a)/(b) Annual Covered Payroll UAAL as % of Payroll (c)/(d) *Determined under the Entry Age Actuarial Cost Method, as defined in Statement #27 of the Governmental Account Standards Board. Under this method, the Actuarial Present Value of the Projected Benefits of each individual is allocated on a level basis over the earnings of the individual between age at hire and assumed retirement age. Prior to July 1, 2010, the amortization of the Unfunded Actuarial Accrued Liability was based on a 40-year closed period from July 1, 1997. Effective July 1, 2010, this amortization is based on a 30-year closed period from July 1, 2010, and remains determined as a level dollar amount. A - 47 Table 27 Schedule of Employer Contributions Plan Year Ended June 30 Annual Required Contribution (ARC)* Actual Employer Contribution Percentage of ARC Contributed Net Pension Obligation (NPO) 2008 $9,173,931 $9,412,228 102.6% $8,277,546 2009 $10,361,583 $9,472,493 91.4% $9,071,870 2010 $14,229,907 $9,471,135 66.6% $13,718,223 2011 $12,266,567 $9,449,670 77.0% $16,389,890 2012 $14,517,041 $44,039,964 303.4% ($13,320,673) 2013 $14,509,454 $12,367,074 85.2% ($11,006,283) 2014 $13,869,455 $10,603,145 76.4% ($ 7,586,269) 2015 $13,886,453 *The Annual Required Contribution (ARC) is not equal to the minimum annual contribution in accordance with Indiana Code 10-12-2-2(i) but instead determined under the Entry Age Actuarial Cost Method as defined in Statement #27 of the Governmental Account Standards Board GASB#27). State Pension Funding Obligations The State is obligated to fund various components of the plans described above as follows: 1. PERF as to State Employees Table 28 below represents the historical presentation showing only the active, State-related portion. Table 28 Public Employees’ Retirement Fund (State-Related Portion, Including the PERF ASA)(1) (dollars in thousands) Funded Status Actuarial Value of Assets Actuarial Accrued Liability (AAL) Unfunded/(Overfunded) AAL Funded Ratio Contribution Rate(2) Contribution History Actuarially Determined Contribution Actual Employer Contributions Percentage Contributed June 30, 2009 June 30, 2010 June 30, 2011 June 30, 2012 June 30, 2013 June 30, 2014 4,548,409 4,869,898 321,489 93.4% 7.0% 4,374,385 5,248,752 874,367 83.3% 8.6% 4,158,786 5,264,131 1,105,345 79.0% 9.7% 4,141,524 5,542,414 1,400,890 74.7% 11.2% 4,415,371 5,690,281 1,274,910 77.6% 11.2% 4,720,699 5,889,829 1,169,130 80.2% 11.2% June 30, 2009 June 30, 2010 June 30, 2011 June 30, 2012 June 30, 2013 June 30, 2014 107,981 111,214 103.0% 118,200 111,555 94.4% 176,290 115,232 65.4% 183,389 138,328 75.4% 160,150 157,581 98.4% 188,035 188,405 100.2% (1) State-related portion does not include any information from schools. Contribution rate is the State rate for all State employers participating in the PERF plan, and is set using the most recently completed actuarial valuation that goes into effect July 1 of the next calendar year. . _____________________________________________ Source: Actuarial Valuation Report, Public Employees’ Retirement Fund of Indiana, June 30, 2014. (2) A - 48 2. TRF Pre-1996 Account The Pension Stabilization Fund is a source of State contributions to the TRF Pre-1996 Account and projections indicate the Pension Stabilization Fund will expend funds over the next approximately 12 years for this purpose at which time the State’s Obligations under the TRF Pre-1996 Account are expected to be lower each succeeding year. If the annual amount of benefit liabilities for the TRF Pre-1996 Account retirees exceeds the annual state appropriation allotted to the TRF Pre-1996 Account, the Pension Stabilization Fund supplements the shortfall. The Pension Stabilization Fund amount is impacted each year by investment earnings and monies allotted from the Lottery. Projections of future annual benefit payments from the TRF Pre-1996 Account will continue to grow from the current level of $0.9 billion annually to a peak of almost $1.2 billion annually. This funding will be provided by the annual state appropriations which are projected to grow by 3% per year with any remaining required amounts coming from the Pension Stabilization Fund. Table 29 below shows the projected value of the Pension Stabilization Fund over time and Table 30 shows the Pension Stabilization Fund Balances under the TRF Pre-1996 Account in recent years. Table 29 Projections assume (i) a 5% annual investment return on the Pension Stabilization Fund, (ii) continued annual funding of Pension Stabilization Fund from lottery revenues of $30 million, and (iii) 103% year over year appropriations from the General Fund for TRF Pre-1996 Plan benefits. Projections are subject to change. _____________________________________________ Source: Actuarial Valuation Report, Teachers’ Retirement Fund, June 30, 2014. A - 49 Table 30 TRF Pre-1996 Pension Stabilization Fund Balances (Dollars in Millions) Fiscal Year 2009 20010 2011 2012 2013 2014 PSF Balance 1,614.4 1,943.0 2,263.5 2,250.5 2,595.5 2,884.4 3. Other Plan Obligations The State’s funding obligations for each of the other components of the State pension system are small relative to PERF and TRF and can be seen in prior tables under “Annual Employer Contributions”. ECONOMIC AND DEMOGRAPHIC INFORMATION Summary Indiana is expanding the diversity of its economy while maintaining its strong tradition in the manufacturing sector. Manufacturing capacity has contributed to Indiana’s estimated 2013 State Gross Domestic Product (GDP) of approximately $317 billion (current dollars), ranking sixteenth largest in the country in terms of the value of goods and services produced. The Manufacturing sector now represents 17% of total employment in Indiana, a decrease from 20% in 2003. From 2003 to 2013, Indiana witnessed significant shifts in the distribution of employment between sectors. Employment in the Education and Health Services sector increased by 22.1%; followed by a 20.8% gain in Professional & Business Services. Trade, Transportation & Utilities is the largest employment super sector in Indiana. Indiana is rich in assets with a low cost of living, a business-friendly regulatory environment and an efficient transportation system. Well-located for goods production and distribution, Indiana is within a day’s drive of nearly two-thirds of the United States’ population. The 2006 Major Moves transportation initiative, calling for $10.6 billion invested over 10 years, will fund both maintenance and new construction for Indiana’s roadways. Coupled with the elimination of the state’s inventory tax, and the adoption of Daylight Savings Time, Indiana becomes even more attractive as a site for production, warehousing and distribution and transportation activities. In 2013 Indiana enacted into law a reduction in corporate income taxes for all businesses. According to a recent report released by the Indiana Chamber of Commerce, Indiana is at the very top for their regulatory freedom index and in the top five of the small business survival index. Separately, Indiana’s business climate was recently ranked fifth best nationally and best in the Midwest by Chief Executive Magazine. The cost of living index for Indiana’s major cities has been consistently below the national average. Indiana ranks favorably among the states in housing affordability and percent of home ownership. Electricity costs are comparatively low in Indiana due to the ready availability of ample natural resources. According to the U.S. Energy Information Administration, year-to-date average retail electric utility rates through April 2013 were 10% lower than the national average for all consumers; while residential retail electric bills were 5% below the national average. The Indiana Economic Development Corporation (IEDC) is Indiana’s lead economic development agency. Officially established in February 2005 to replace the state’s former Department of Commerce, the IEDC is a public private partnership governed by a 12-member board of directors chaired by the Governor. Since its inception, the IEDC has worked with more than 2,020 companies from across Indiana and around the globe who have collectively committed to create more than 215,191 new jobs and invest more than $41.21 billion of private capital in their Indiana operations. In 2014, the IEDC worked with 285 companies who committed to create 25,317 new jobs and A - 50 invest $4.38 billion in new or expanded Indiana operations in industries ranging from advanced manufacturing, life sciences, defense and information technology. Population Indiana is the 16th most populous state in the United States. The capital and largest city is Indianapolis. From 2003 to 2013, the Indianapolis-Carmel Metropolitan Statistical Area (“MSA”) grew by 19.2%. While Indiana’s educational attainment rate for bachelors’ degrees has lagged the nation and several neighboring states, estimates from the American Community Survey indicates that between 2003 and 2013, the number of individuals with “some college”, associates’ degrees and bachelors’ degrees were increasing at a substantially higher rate than the population 25 years and older. Table 31 Educational Attainment, Indiana Population 25 Years & Over Year Some college, no degree Assoc Degree BA/BS or Above Population 25 Yrs & Over 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2003-2013 Growth 747,449 768,437 789,952 793,292 803,293 866,304 884,767 884,028 889,391 885,742 918,646 253,224 250,762 276,886 296,052 293,297 313,410 314,491 317,235 336,181 346,595 353,657 811,771 838,435 840,876 891,489 914,471 956,371 943,472 960,164 978,796 1,001,273 1,026,468 3,863,200 3,889,833 3,956,723 4,110,754 4,143,159 4,177,420 4,193,210 4,229,798 4,255,459 4,278,945 4,312,892 23.0% 39.7% 26.4% 11.6% _____________________________________________ Sources: U.S. Bureau of Census, American Community Survey 1-year estimates, September 2014 Indiana’s excellent state colleges and universities had an undergraduate enrollment of 386,748 and 54,546 graduate students in fall 2010, according to the National Center for Education Studies. (1) These schools also serve as the focus of research and development efforts; assist in the formation of small business “incubators,” and award advanced degrees in fields as varied as engineering, economics and pharmacy. In 2009, based on a National Science Foundation (NSF) survey, among the nation’s public universities, Indiana ranked 18th in the nation in Academic Research & Development from Institutional funding (including grants and endowments) and 10th in terms of Industry (for-profit entities) funding and 17th in funding from “All Other” sources(2). In the National Science Foundation 2012 Science and Engineering State Profiles report, Indiana ranks in the top 20 for numbers of Doctoral Scientists, Science and Engineering (S&E) doctorates awarded, S&E and health post doctorates and graduate students in doctorate granting institutions. (3) Indiana University, Purdue University and the University of Notre Dame have all been included in the Financial Times rankings of the world’s top business schools. (4) According to U.S. News & World Report, Purdue University ranked 20th and Indiana University ranked 30th among 173 public universities in the U.S.(5) Section Footnotes: (1) http://nces.ed.gov/programs/state profiles (2) http://www.nsf.gov/statistics/nsf09303/content.cfm?pub_id=3871&id=2 (3) http://www.nsf.gov/statistics/states/show.cfm?stateID=53,15&year=0 (4) http://rankings.ft.com/businessschoolrankings/global-mba-rankings-2012 (5) http://colleges.usnews.rankingsandreviews.com/best-colleges/rankings/national-universities/top-public A - 51 Table 32 Population, including Selected Indiana MSAs 2003* 2013 Percentage Change 2003-2013 Indiana 6,195,643 6,570,902 6.0% Indianapolis-Carmel MSA Fort Wayne MSA Evansville-Henderson MSA (IN part) Gary PMSA South Bend-Niles MSA (IN part) 1,595,377 398,574 286,493 681,080 264,714 1,901,433 424,122 298,805 708,070 266,929 19.2% 6.4% 5.5% 4.0% 0.8% 290,809,777 316,128,839 8.7% United States * These Indiana Metropolitan Statistical Areas were reconfigured in 2005. The above population estimates are based on the areas as defined by the Office of Management and Budget as of December 2005. Consistent aggregate historical data are not yet readily available. Source: U.S. Census Bureau, June 2014. Employment During this past decade, employment in Indiana has shifted significantly between sectors, reflecting the fundamental changes taking place in the state’s economy and following larger trends at the national level. Within the Manufacturing sector, some well-paying industry components have experienced employment gains in 2013, generally mirroring the nation. While Transportation Equipment Manufacturing employment has taken some heavy losses as part of the turmoil and restructuring of that industry, Indiana’s attraction of foreign auto manufacturers has served to help buffer that somewhat in this high wage sector. In particular, Indiana’s employment in the Motor Vehicle Manufacturing sub-sector has actually grown by about 13% between 2003 and 2013. Listed on the table below are some examples of high wage subsectors in Indiana. Table 33 Indiana High Wage Subsectors NAICS Subsector 3362 3361 6113 6221 3391 Sector Description Motor Vehicle Body & Trailer Manufacturing Motor Vehicle Manufacturing Colleges, Universities & Professional Schools General Medical & Surgical Hospitals Medical Equipment & Supplies Manufacturing 2008-2013 Employment Change Indiana % Change Indiana 2013 Annual Average Wage 1,000 3% $49,000 1,600 3,100 13% 5% $74,650 $47,100 6,100 -2,000 5% -10% $48,550 $61,800 _____________________________________________ Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment & Wages, Exportable 202 database June 2014. The fastest growing super sectors overall during the last decade were Education and Health Services, which grew by 22.1% from 2003 to 2013, followed by Professional & Business Services (20.8% growth). Although Manufacturing is still the second largest super sector at 17% of total employment, it was the second slowest growing sector from 2003 to 2013 and has undergone significant diversification and acquired an international presence through the years. A - 52 Table 34 Indiana Non-Farm Employment by Super Sector; December 2003 to December 2013 (Not Seasonally Adjusted) NAICS Super Sectors Total Non Farm Education & Health Svc. Prof & Business Svc. Leisure and Hospitality Other Services Government Trade, Transport. & Util. Financial Activities Information Manufacturing Construction Services Providing Goods Producing 2003 Percentage of Total 2013 Percentage of Total Growth 2003-2013 2,902,200 359,600 254,100 270,900 111,600 422,600 574,100 141,300 41,300 575,100 144,800 2,175,400 726,800 100% 12% 9% 9% 4% 15% 20% 5% 1% 20% 5% 75% 25% 2,933,300 439,100 306,900 290,700 119,300 422,100 567,900 129,100 35,700 492,000 123,500 2,310,900 622,500 100% 15% 10% 10% 4% 14% 20% 4% 1% 17% 4% 79% 21% 0.1% 22.1% 20.8% 7.3% 6.9% -1.1% -1.1% -8.6% -13.6% -14.4% -14.7% 6.2% -14.3% _____________________________________________ Source: U.S. Bureau of Labor Statistics, Current Employment Statistics, March 2014 Table 35 Unemployment Rate (Annual Averages Data) Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Indiana U.S. 5.3% 5.3% 5.4% 5.0% 4.6% 5.8% 10.3% 10.0% 8.8% 8.1% 7.5% 6.0% 5.5% 5.1% 4.6% 4.6% 5.8% 9.3% 9.6% 8.9% 8.1% 7.4% Indiana as Percentage of U.S. 88.3% 96.4% 105.9% 108.7% 100.0% 100.0% 107.5% 104.2% 98.9% 100.0% 101.4% _____________________________________________ Source: U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics, April 2014 Income In 2013, Indiana’s per capita personal income increased to $38,812 or 1.8% from 2012. Indiana’s personal income growth ranked twenty-eighth among states in the nation last year. During the past eleven years, Indiana’s personal income grew at an average annual rate of 2.7%. A - 53 Table 36 Growth in Per Capita Personal Income (Current Dollars) Year Indiana 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 29,542 30,833 31,481 33,087 34,016 34,966 33,679 34,386 36,342 38,119 38,812 U.S. 32,676 34,300 35,888 38,127 39,804 40,873 39,357 40,163 42,298 43,735 44,543 Average Annual Growth Rate (2003-2013): Total Growth Rate (2003-2013): Indiana U.S. 2.1% 4.4% 2.1% 5.1% 2.8% 2.8% -3.7% 2.1% 5.7% 4.9% 1.8% 2.8% 5.0% 4.6% 6.2% 4.4% 2.7% -3.7% 2.1% 5.3% 3.4% 1.9% 2.7% 30.1% 3.2% 34.7% _____________________________________________ Source: U.S. Department of Commerce, Bureau of Economic Analysis, March 2014. Gross Domestic Product With an estimated 2013 Gross Domestic Product of approximately $317.1 billion, Indiana’s state economy ranks nineteenth largest in the country in terms of the value of goods and services produced. Since 2003, Indiana’s Gross Domestic Product by State has grown at an average annual rate of 3.6% (current dollars). REMAINDER OF PAGE INTENTIONALLY LEFT BLANK A - 54 Table 37 Indiana Gross Domestic Product by Sector: 2003-2013 (Millions of Current Dollars) 2013 Percentage of Total Percentage Growth 2003-2013 NAICS Industry Sectors 2003 Percentage of Total Arts, entertainment, and recreation Educational services Administrative and waste services Health care and social assistance Professional and technical services Transportation and warehousing Finance and insurance Other services, except government Government Accommodation and food services Real estate, rental, and leasing Mining Manufacturing Wholesale trade Information Construction Retail trade Utilities Management of companies and enterprises Agriculture, forestry, fishing, and hunting $ 2,890 1,682 5,241 15,328 7,944 7,317 12,831 5,723 22,263 5,306 22,471 842 65,785 11,791 5,012 9,933 15,283 3,985 2,634 2,475 1.3% 0.7% 2.3% 6.8% 3.5% 3.2% 5.7% 2.5% 9.8% 2.3% 9.9% 0.4% 29.0% 5.2% 2.2% 4.4% 6.7% 1.8% 1.2% 1.0% $ 3,532 3,050 8,829 24,496 12,462 10,589 15,607 6,942 28,800 6,925 30,362 1,318 95,313 16,686 6,104 11,373 18,250 5,759 4,034 6,673 1.1% 1.0% 2.8% 7.8% 3.9% 3.3% 4.9% 2.2% 9.1% 2.2% 9.6% 0.4% 30.0% 5.3% 1.9% 3.6% 5.8% 1.8% 1.3% 2.1% 22.2% 81.3% 68.5% 59.8% 56.9% 44.7% 21.6% 21.3% 29.4% 30.5% 35.1% 56.5% 44.9% 41.5% 21.8% 14.5% 19.4% 44.5% 53.2% 169.6% Total Gross Domestic Product by State $226,737 100.0% $317,102 100.0% 39.9% _____________________________________________ Note: Individual sectors may not sum to totals due to rounding. NAICS Industry detail is based on the 2002 North American Industry Classification System (NAICS). Source: U.S. Department of Commerce, Bureau of Economic Analysis, June 2014. Exports Since 2003, Indiana businesses have significantly increased exported output. The value of exports in calendar year 2004 jumped to $19,212 million, a 16.7% increase over 2003, in 2005 the total value increased to $21,594 million, a 12.4% growth rate, in 2006 the total value increased to $22,666 million, a 5.0% increase, in 2007 increased to $25,956 million, a 14.5% increase and in 2008 improved to $26,502 million, a 2.1% increase. After decreasing in 2009, Indiana’s exports increased by 25.6% in 2010. Since 2000, Indiana’s exports have grown at an average annual rate of 8.3% as compared to 9.3% for the United States as a whole. REMAINDER OF PAGE INTENTIONALLY LEFT BLANK A - 55 Table 38 Exports – Annual Percentage Change (Millions) Exports Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Indiana 16,468 19,212 21,594 22,666 25,956 26,502 22,907 28,764 32,332 34,399 34,162 Annual Percentage Change Indiana U.S. 10.2% 4.6% 16.7% 13.0% 12.4% 10.1% 5.0% 13.9% 14.5% 11.9% 2.1% 12.1% -13.6% -18.0% 25.6% 21.0% 12.4% 15.9% 6.4% 1.6% -0.7% 2.2% U.S. 724,771 818,775 901,082 1,025,967 1,148,198 1,287,442 1,056,042 1,278,263 1,482,508 1,545,743 1,579,592 Average Annual Growth Rate (2003-2013): Total Growth (2003-2013): 8.3% 91.0% Indiana as a Percentage of U.S. Exports 2.3% 2.4% 2.4% 2.2% 2.3% 2.1% 2.2% 2.3% 2.2% 2.3% 2.2% 8.0% 88.3% Source: Office of Trade and Industry Information (OTII), Manufacturing and Services, International Trade Administration, U.S. Department of Commerce, June 2014 Table 39 Indiana’s Leading Export Industries and Destinations (Millions) Top Export Industries Industry 2013 Exports Transportation Equipment Mfg Chemical Manufacturing Machinery Manufacturing Misc. Manufacturing Computers and Electronics Primary Metal Manufacturing Elect Equip, Appl. & Component Food Manufacturing Products Fabricated Metal Products Rubber & Plastics Products Other Total Export Destinations Country 2013 Exports $9,762.5 8,915.5 4,108.7 2,067.1 1,908.5 1,590.2 1,061.9 965.8 965.3 837.4 1,978.7 Canada Mexico Germany Japan France China Netherlands United Kingdom Brazil South Korea Other $34,161.6 $11,816 4,001 1,928 1,805 1,387 1,346 1,175 1,038 1,033 874 8,209 $34,162 Sources: Office of Trade and Industry Information (OTII), Manufacturing and Services, International Trade Administration, U.S. Department of Commerce, June 2014 and WISERTrade. A - 56 LITIGATION The following litigation liability survey is a summary of certain significant litigation and claims currently pending against the State of Indiana (“the “State”) involving amounts exceeding $10.0 million individually or in the aggregate. This summary is not exhaustive either as to the description of the specific litigation or claims described or as to all of the litigation or claims currently pending or threatened against the State. The State does not establish reserves for judgments or other legal or equitable claims against the State. Judgments and other such claims must be paid from the State’s unappropriated balances and reserves, if any. Civil Rights Litigation In 1968, in United States of America, et al. v. Board of School Commissioners, et al., a lawsuit seeking to desegregate the Indianapolis Public Schools was filed in the United States District Court for the Southern District of Indiana. Since about 1978, the State has paid several million dollars per year for inter-district busing that is expected to continue through 2016. The District Court entered its final judgment in 1981 holding the State responsible for most of the costs of its desegregation plan, and those costs have been part of the State’s budget since then. In June 1998, the parties negotiated an 18-year phase out of the desegregation plan that was approved by the court for some school corporations and a 13-year phase out of the desegregation plan for the school corporations that had already began the desegregation plan. State expenditures will be gradually reduced as the plan is phased out. Civil Litigation In October 2012, in Estate of Williams v. Indiana State Police, et al., representatives and children of a man who was shot by law enforcement officers brought claims for excessive force, wrongful death, and negligence against several law enforcement officers (including two employed Department of Natural Resources and one employed by Indiana State Police) resulting from a fatal shooting. Discovery is closed and a motion for summary judgment was filed on January 31, 2014. Plaintiffs’ liability expert alleges over $10.0 million in damages to the plaintiffs. On June 11, 2014, the court granted Defendants’ motion for summary judgment. Defendants are entitled to summary judgment on all of plaintiffs’ claims. The judgment in favor of defendants was amended on June 13, 2014. Defendants’ bill of costs was filed on June 27, 2014. Plantiffs filed a notice of appeal on July 10, 2014. Oral Argument set for January 20, 2015. In March 2013, an individual brought a putative class action in Raab v. Waddell and Indiana Bureau of Motor Vehicles in Marion County. This litigation alleges, on behalf of persons under the age of 75 who have paid a fee to obtain or renew their drivers’ licenses since March 7, 2007, that amounts were charged that were not authorized by Indiana law. A settlement has been reached that provides for credits, in a total amount of about $30 million, to be paid to class members and their attorneys. In November 2013, the court’s order and judgment approving settlement was entered. For a period of 3 years after the court’s final approval of the settlement, any refunds that have not been paid as advance payments will be available to class members as outlined. The settlement agreement was amended to remove the obligation to promulgate rules regarding certain fees. Payments are to be made under the agreement until December 2017. As of June 30, 2014, $9.8 million remained to be refunded which has been accrued as an expense and payable in the government-wide financial statements. In October 2013, an individual brought a putative class action in Raab v. Waddell and Indiana Bureau of Motor Vehicles in Marion County alleging overcharges and the alleged overcharges sought could exceed $10 million. This case is being handled by outside counsel. The State has filed a motion for partial summary judgment. The hearing on the motion for partial summary judgment was held on June 30, 2014. The matter is under advisement. Hearing is set for February 2, 2015, on motion. In June 2014, Plantiffs filed a class action lawsuit against the Department of Child Services in Moss, Debra v. Bonaventura, et al., alleging they were purportedly promised monies for adoptions, but then never paid. Mediation was held on August 15, 2014, and a tentative settlement of $15.1 million was reached. The proposed class is all individuals who entered into adoption subsidy agreements with the Department of Child Services, but have not received any payment before June 30, 2014. A settlement was reached and the settlement agreement was approved by the court on November 3, 2014. The $15.1 million has been accrued as an expense and payable in the government-wide financial statements. A - 57 Other Contingencies In May 2010, the State of Indiana on behalf of the Indiana Family and Social Services Administration, by outside counsel, and IBM (“IBM”) sued each other regarding the company's contract to fix the state's welfare system. The state filed suit against IBM for breach of contract and unjust enrichment seeking to recover more than $43.4 million in payments, indemnification, damages, costs, fees, interest, treble damages, declaratory judgment and other relief. IBM filed suit seeking deferred costs and fees alleged in the amount of $43.4 million, and costs of IBM equipment allegedly retained by the state after termination of the contract for any reason in the amount of $9.3 million. Both lawsuits were filed in Marion County Superior Court and were consolidated on June 1, 2010. Trial commenced February 2012. A decision was handed down on July 18, 2012. The State has been ordered to pay IBM an additional $12 million, for a total of $52,081,416 plus prejudgment interest and costs. The State received nothing from its complaint. The State, represented by outside counsel, filed an appeal for each case on September 12, 2012. Causes were consolidated; briefing commenced April 11, 2013. The Court of Appeals issued a decision on February 13, 2014 reversing in part and affirming in part. Both parties filed petitions for transfer on March 17, 2014 and those petitions are pending before the Indiana Supreme Court. Parties are attending mediation. A - 58 APPENDIX B SUMMARY OF LOCAL REVENUES Excise Taxes The Excise Taxes consist of the Marion County Innkeeper’s Tax, the Marion County Food and Beverage Tax, the Marion County Admissions Tax, the Marion County Supplemental Auto Rental Excise Tax and the Regional County Food and Beverage Tax. “2005 New Excise Tax Revenues” means collectively: (i) the portion of the Marion County Innkeeper’s Tax imposed pursuant to Indiana Code 6-9-8, as amended, and any successor provisions, described in Indiana Code 6-9-8-3(f) and deposited in the Stadium and Convention Special Fund pursuant to the Revenue Deposit Agreement; (ii) the portion of the Marion County Food and Beverage Tax imposed pursuant to Indiana Code 6-9-12, as amended, and any successor provisions, described in the second sentence of Indiana Code 6-9-12-8 and deposited in the Stadium and Convention Special Fund pursuant to the Revenue Deposit Agreement; (iii) the portion of the Marion County Admissions Tax imposed pursuant to Indiana Code 6-9-13, as amended, and any successor provisions, described in Indiana Code 6-9-13-2(d) and deposited in the Stadium and Convention Special Fund pursuant to the Revenue Deposit Agreement; (iv) the portion of the Marion County Supplemental Automobile Excise Tax imposed pursuant to Indiana Code 6-6-9.7, as amended, and any successor provisions, described in Indiana Code 6-6-9.7-7(d), and deposited in the Stadium and Convention Special Fund pursuant to the Revenue Deposit Agreement; and (v) the portion of the Regional County Food and Beverage Tax authorized pursuant to Indiana Code 6-9-35, as amended, and any successor provisions, described in Indiana Code 6-9-35-12(a), which are paid to the Treasurer of the Board and deposited in the Stadium and Convention Special Fund pursuant to the Revenue Deposit Agreement. Under the Revenue Deposit Agreement, the 2005 New Excise Tax Revenues are pledged to secure and pay installments of rental payments under the Sublease, the Stadium Sublease and any other Additional Obligation (each an “Obligation” and collectively, the “Obligations”) as the same become due. Additional Obligations means the Sublease, any Supplemental Subleases and any Supplemental Stadium Subleases (as set forth in the Revenue Deposit Agreement). Payment and Deposit of Amounts Received. The Excise Taxes collected by the persons required to collect them are remitted monthly to the State. The amounts collected by the State from the 2005 New Excise Tax Revenues are required to be paid monthly by the State Treasurer to the Treasurer of the Board upon warrants issued by the Auditor of the State. The Treasurer of the Board is required to apply such 2005 New Excise Tax Revenues received by it in accordance with the provisions of the Board Act and the Revenue Deposit Agreement. See “APPENDIX C-1 – SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS – THE REVENUE DEPOSIT AGREEMENT – Funds and Accounts; Flow of Funds.” Marion County Innkeeper’s Tax. Pursuant to Indiana Code 6-9-8, a tax is levied within Marion County on every person engaged in the business of renting or furnishing, for periods of less than 30 days, any lodgings in any hotel, motel, inn, tourist camp, tourist cabin or any other place in which lodgings are furnished for a consideration (such tax, the “Marion County Innkeeper’s Tax”). After August 31, 2009, the tax rate is 10% of the gross income received by the person from the renting or furnishing of such lodgings. Prior to September 1, 2009 and after June 30, 2005, the tax rate was 9%. Until June 30, 1997, the tax rate had been 5%. From July 1, 1997, to and including June 30, 2005, the tax rate had been 6% (such portion of the tax attributable to such rate, the “Original Marion County Innkeeper’s Tax Revenue”). Pursuant to an amendment to Indiana Code 6-9-8 in 2005, the City-County Council of the City of Indianapolis, Indiana, and Marion County (the “Indianapolis City-County Council”) increased the Marion County Innkeepers Tax from 6% to 9%. This 3% increase in the tax rate together with the 1% increase in the tax rate from 5% to 6% collected after December 31, 2027 (the “Innkeeper’s Tax Increase”), may be used only for payment of Obligations incurred by the Board to the Building Authority or to any state agency created under Section 26 of Indiana Code 5-1-17 (the “Building Authority Act”). In accordance with the amendment to Indiana Code 6-9-8, the Innkeeper’s Tax Increase will be used for the sublease rental payments under the Sublease, the Stadium Sublease and any other Additional Obligations. The Innkeeper’s Tax Increase will expire on January 1, 2041, and the tax rate will revert to 6% effective January 1, 2041. The Marion County Innkeeper’s Tax is collected by the person who rents or furnishes the rooms, lodgings or accommodations and is paid as a separate added amount to the consideration in the transaction. This tax is in addition to the state gross retail tax (“Indiana Gross Retail Tax”), which, pursuant to Indiana Code 6-2.5, is imposed B-1 at a rate of 7% on retail transactions in the State, including transactions subject to the Marion County Innkeeper’s Tax. The proceeds of the Indiana Gross Retail Tax are not available for payment of rentals under any Obligation. The Marion County Innkeeper’s Tax is imposed, paid and collected in the same manner as the Indiana Gross Retail Tax and is generally imposed and administered in accordance with the rights, duties, liabilities, procedures, penalties, definitions and administration that are applicable to the imposition and administration of the Indiana Gross Retail Tax. Accordingly, the person collecting the tax is acting as the agent of the State and must remit the collections to the Indiana Department of State Revenue less a collection fee currently in a range of 0.26% to 0.73% depending on the retail merchant’s Indiana Gross Retail Tax Liability accrued during the State’s fiscal year ending on June 30 of the immediately preceding calendar year (hereinafter referred to as “Collection Fees”). The following table sets forth the amount of the Marion County Innkeeper’s Tax (less Collection Fees) collected for the years indicated: Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (1) (2) (3) (4) Amount of Original Marion County Innkeeper’s Tax Revenue (1)(2) $20,980,000 20,612,000 22,997,000 23,660,000 23,214,000 19,904,000 20,277,000 24,070,000 27,113,000 26,575,000 Not Available Amount of Innkeeper’s Tax Increase (1)(3)(4) ______ $ 2,769,000 11,122,000 11,757,000 11,428,000 10,351,000 10,298,000 11,301,000 13,820,000 13,123,000 Not Available Rounded to the nearest thousand dollars. Derived from the audited financial statements of the Board and are presented on an accrual basis. Derived from internal reports of the Finance Authority and are presented on a cash basis. Tax collections for the Innkeeper's Tax Increase began in July 2005; therefore, the 2005 tax revenue distribution is for a partial year. The foregoing tables represent both the Original Marion County Innkeeper’s Tax Revenue and the Innkeeper’s Tax Increase, but do not represent a projection of Marion County Innkeeper’s Tax revenues available for the payment of rentals under any Obligations. The only Marion County Innkeeper’s Tax revenues pledged to the payment of rental payments on the Obligations are: (i) the 3% of the Innkeeper’s Tax Increase for the entire term of any Obligation, and (ii) the additional 1% of the Innkeeper’ Tax Increase after December 31, 2027, through the remaining term of any Obligation. No projections of such revenues that will be available to pay rentals on any Obligation are included in this Official Statement. Marion County Food and Beverage Tax. Pursuant to Indiana Code 6-9-12, the Indianapolis City-County Council is authorized to impose a tax within Marion County on any transaction in which food or beverage (including alcoholic beverages) is furnished, prepared or served by a retail merchant for consideration and for consumption at a location, or on equipment, provided by the retail merchant, including transactions in which food or beverage is served by a retail merchant off his premises. On April 29, 1981, the Indianapolis City-County Council adopted an ordinance imposing the Food and Beverage Tax in Marion County, such tax to apply to transactions occurring after June 30, 1981. Until July 1, 2005, the tax rate had been 1% of the gross retail income received by the retail merchant from the furnishing, preparation or serving of such food or beverage (such portion of the tax attributable to such rate, the “Original Marion County Food and Beverage Tax Revenue”). Pursuant to an amendment to Indiana Code 6-9-12, in 2005, the Indianapolis City-Council increased the Marion County Food and Beverage Tax 1% to 2%. The 1% increase in the tax rate, together with the Post-2027 Original Marion County Food and Beverage Tax (as hereinafter defined) (the “Marion County Food and Beverage B-2 Tax Increase”) may be used only for payment of Obligations entered into by the Board with the Building Authority or with any state agency created under Section 26 of the Building Authority Act. In accordance with the amendment to Indiana Code 6-9-12, the Marion County Food and Beverage Tax Increase will be used for the rental payments under the Sublease, the Stadium Sublease and any other Additional Obligations. The Marion County Food and Beverage Tax Increase will expire on January 1, 2041, and the entire Marion County Food and Beverage Tax will expire effective January 1, 2041. The Marion County Food and Beverage Tax is collected by the retail merchant who furnishes, prepares or serves the food or beverage and is paid as a separate added amount to the consideration in the transaction. This tax is in addition to the Indiana Gross Retail Tax, which tax applies to, among others, food and beverage transactions subject to the Marion County Food and Beverage Tax. The proceeds of the Indiana Gross Retail Tax are not available for the payment of the rentals under any Obligation. The Marion County Food and Beverage Tax is imposed, paid and collected in the same manner as the Indiana Gross Retail Tax and the retail merchant collecting the tax is acting as the agent of the State and the County and must remit the collections to the Indiana Department of State Revenue less Collection Fees. [Remainder of Page Intentionally Left Blank] B-3 The following table sets forth the amount of the Marion County Food and Beverage Tax (less Collection Fees) collected for the years indicated: Year Amount of Original Marion County Food and Beverage Tax Revenue (1)(2) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $17,567,000 16,960,000 18,650,000 18,499,000 18,303,000 17,246,000 18,114,000 19,457,000 21,363,000 21,003,000 Not Available (1) (2) (3) (4) Amount of Marion County Food and Beverage Tax Increase (1)(3)(4) – $4,122,000 18,082,000 18,620,000 17,920,000 17,609,000 18,383,000 18,991,000 20,891,000 21,243,000 Not Available Rounded to the nearest thousand dollars. Derived from the audited financial statements of the Board and are presented on an accrual basis. Derived from internal reports of the Finance Authority and are presented on a cash basis. Tax collections for the Marion County Food and Beverage Tax Increase began in July 2005; therefore, the 2005 tax revenue distribution is for a partial year. In addition to the 1% Marion County Food and Beverage Tax Increase, the original 1% Marion County Food and Beverage Tax collected after December 31, 2027 (the “Post-2027 Original Marion County Food and Beverage Tax”), is pledged to the payment of rentals on all Obligations. The Post-2027 Original Marion County Food and Beverage Tax has been pledged to certain Prior Board Obligations (as defined herein), all of which mature on or before June 1, 2027. In the Revenue Deposit Agreement, the Board covenants not to issue or incur any future obligations secured by a pledge of the Post-2027 Original Marion County Food and Beverage Tax. However, in the event the Board defaults in the payment of any Prior Board Obligations and the default remains uncured after December 31, 2027, the holders of the Prior Board Obligations may have a prior lien on the Post-2027 Original Marion County Food and Beverage Tax to satisfy the outstanding Prior Board Obligations. The foregoing tables represent both the Original Marion County Food and Beverage Tax Revenue and the Marion County Food and Beverage Tax Increase, but do not represent a projection of Marion County Food and Beverage Tax revenues available for the payment of rentals under any Obligation. The only Marion County Food and Beverage Tax revenues pledged to the payment of rental payments on the Obligations are: (i) the 1% of the Marion County Food and Beverage Tax Increase for the entire term of any Obligation, and (ii) the Post-2027 Original Marion County Food and Beverage Tax after December 31, 2027, for the remaining term of any Obligation (subject to potential prior claims on the Post-2027 Original Marion County Food and Beverage Tax as described below). No projections of such revenues that will be available to pay rentals on any Obligation are included in this Official Statement. Prior Board Obligations. The Board has entered into certain obligations that are secured by a pledge of tax and revenue sources existing prior to the enactment of Public Law 214-2005 by the General Assembly in 2005, which amended Indiana Code 6-9-12 (the “Prior Revenues”), or has made commitments to be met by entering into certain obligations that will be so secured (collectively, the “Prior Board Obligations”), all of which are or will be scheduled to mature on or before June 1, 2027, and includes the Prior CIB Bond Related Obligations and the Prior CIB Note Related Obligations, as defined below; provided, however, that the CIB 2007 Contractual Undertaking Obligation, as defined below, matures on June 1, 2035, but the Prior Revenues will not be available for payment thereof after December 31, 2027. The “Prior CIB Bond Related Obligations” consist of the Board’s debt service on the Board’s revenue bonds listed as “Subordinate Bonds Debt Service – Board’s 1999 Subordinate Obligations” (subject to the credit thereon listed as “Subordinate Bonds Debt Service – Call Rights Waiver Credit”), each as set forth on the table in B-4 “APPENDIX F – DEBT SERVICE RELATED TO CERTAIN BOARD OBLIGATIONS” (“CIB Bonds”) and the Board’s lease obligations related to the Marion County Convention and Recreational Facilities Authority’s (“MCCRFA”) revenue bonds listed as “Senior Bonds Debt Service” and “Subordinate Bonds Debt Service – 2011A Subordinate MCCRFA Bonds,” as set forth on the table in “APPENDIX F – DEBT SERVICE RELATED TO CERTAIN BOARD OBLIGATIONS” (“MCCRFA Bonds”). Pursuant to Indiana Code 36-10-9.1, as amended, the Board has entered into leases with MCCRFA, pursuant to which the Board has agreed to make rental payments in an amount sufficient to pay the debt service on MCCRFA’s Bonds when due, so long as the lease rental provided therein is fair and reasonable and the facilities being leased have been completed and are ready for occupancy. Such lease rental obligations related to the Prior CIB Bond Related Obligations also include additional scheduled rent in excess of such debt service on MCCRFA’s Bonds to cover certain expenses of MCCRFA. Certain of the Board’s lease obligations with respect to certain of MCCRFA’s Bonds have priority over other MCCRFA’s Bonds and the CIB Bonds. The Board has also entered into a contract obligation pursuant to which the Board is conditionally obligated to pay scheduled payments on bonds issued by The Indianapolis Local Improvement Bond Bank (related to a loan made by the City of Indianapolis to the Indianapolis Colts, Inc. (the “Colts”) in the aggregate original principal amount of approximately $74 to meet a portion of the Colts’ contribution to the cost of constructing the Stadium Project) in the event the Colts fail to make its scheduled payments or available funds are otherwise insufficient (the “CIB 2007 Contractual Undertaking Obligation”), which payment obligations (if any) are not reflected in the table set forth in “APPENDIX F – DEBT SERVICE RELATED TO CERTAIN BOARD OBLIGATIONS.” The Board has also issued notes outstanding in the aggregate principal amount of approximately $33.8 million maturing on December 31, 2017, $9.0 million maturing on December 15, 2019 and $9.0 million maturing on December 15, 2020, each with interest payable annually (such notes are herein described as the “Prior CIB Note Related Obligations” and are also Prior Board Obligations), which payment obligations are not reflected in the table set forth in “APPENDIX F – DEBT SERVICE RELATED TO CERTAIN BOARD OBLIGATIONS.” The Board has, and may, enter into additional obligations that are on a parity with or junior to the respective Prior Board Obligations, provided that, such additional obligations are by their terms to provide that any future pledge by the Board to secure such obligations will exclude revenues received by the Board after December 31, 2027, from the Marion County Food and Beverage Tax levied and collected pursuant to IC 6-9-12 and the Marion County Admissions Tax levied and collected pursuant to IC 6-9-13. The Revenue Deposit Agreement contains certain provisions to protect against dilution of the security for the Prior Board Obligations, which are further described in “APPENDIX C-1 – SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS – THE REVENUE DEPOSIT AGREEMENT—Covenants Regarding Excise Taxes, Fees, Revenues and Existing Obligations.” 6% Marion County Admissions Tax. Pursuant to Indiana Code 6-9-13, as amended, effective June 30, 1997, the Indianapolis City-County Council is authorized to impose a tax within Marion County on the privilege of attending any event (other than events sponsored by educational institutions, associations representing educational institutions, religious organizations, charitable organizations or political organizations) held in a facility financed in whole or in part by bonds or notes issued under Indiana Code 18-4-17 (before its repeal on September 1, 1981), the Board Act or the Building Authority Act. Until July 1, 2005, the tax rate had been 5% of the price of admission to any such event (such portion of the tax attributable to such rate, the “Original Marion County Admissions Tax Revenue”). The Marion County Admissions Tax is collected by the person who collects the price of admission and is paid as a separate added amount to the price of admission. Prior to the amendment effective June 30, 1997, the Marion County Admissions Tax only applied to professional sporting events held at the Indiana Convention Center, the RCA Dome and Victory Field. After December 31, 2040, the Original Marion County Admissions Tax and the Admissions Tax Increase (as defined herein) will apply only to professional sporting events which are held in a facility financed by bonds or notes as described above. On April 29, 1981, the Indianapolis City-County Council adopted an ordinance to impose the 5% Marion County Admissions Tax in Marion County, such tax to apply to admission charges to professional sporting events collected after June 30, 1981. On June 9, 1997, the Indianapolis City-County Council adopted an ordinance to apply the Marion County Admissions Tax to all events (other than events sponsored by educational institutions, B-5 associations representing educational institutions, religious organizations, charitable organizations or political organizations) held in facilities financed under Indiana Code 18-4-17 (before its repeal on September 1, 1981), the Board Act or the Building Authority Act (which presently includes Bankers Life Fieldhouse, the Indiana Convention Center, Lucas Oil Stadium and Victory Field), with such tax to apply to admission charges collected after June 30, 1997, and before January 1, 2028. Pursuant to an amendment to Indiana Code 6-9-13, in 2005, the Indianapolis City-County Council increased the Marion County Admissions Tax from 5/5 to 6%. The 1% increase in the tax rate, together with the Post-2027 Original Admissions Tax (as hereinafter defined) (the “Admissions Tax Increase”) may be used only for payment of Obligations incurred by the Board to the Building Authority or to any state agency created under Section 26 of the Building Authority Act. In accordance with the amendment to Indiana Code 6-9-13, the Admissions Tax Increase will be used for the sublease rental payments under the Sublease, the Stadium Sublease and any other Additional Obligations. Such tax is imposed on the privilege of attending, before January 1, 2041, any event and, after December 31, 2040, any professional sporting event as defined and limited in Indiana Code 6-9-13-1. In addition to the Admissions Tax Increase, the original 5% Marion County Admissions Tax collected after December 31, 2027 (the “Post-2027 Original Admissions Tax”), is pledged to the payment of rentals on all Obligations. A portion of the Post-2027 Original Admissions Tax attributable to attendance at professional sporting events has been pledged to Prior Board Obligations, all of which mature on or before June 1, 2027. In the Revenue Deposit Agreement, the Board covenants not to issue or incur any future obligations secured by a pledge of the Post-2027 Original Admissions Tax. However, in the event the Board defaults in the payment of any Prior Board Obligations and the default remains uncured after December 31, 2027, the holders of the Prior Board Obligations may have a prior lien on the portion of the Post-2027 Original Admissions Tax attributable to attendance at professional sporting events to satisfy the outstanding Prior Board Obligations. The Revenue Deposit Agreement contains certain provisions to protect against dilution of the security for the Prior Board Obligations, which are further described in “APPENDIX C-1 – SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS – THE REVENUE DEPOSIT AGREEMENT—Covenants Regarding Excise Taxes, Fees, Revenues and Existing Obligations.” [Remainder of Page Intentionally Left Blank] B-6 The following table sets forth the amount of the Marion County Admissions Tax for the years indicated: (1) (2) (3) Year Amount of Original Marion County Admissions Tax Revenue (1)(2) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $4,969,000 5,434,000 5,016,000 5,689,000 5,573,000 6,045,000 6,196,000 4,945,000 6,537,000 6,893,000 Not Available Amount of Admissions Tax Increase (1)(3) – – $1,158,000 1,110,000 1,165,000 1,151,000 1,283,000 1,157,000 1,141,000 1,332,000 Not Available Rounded to the nearest thousand dollars. Derived from the audited financial statements of the Board and are presented on an accrual basis. Derived from internal reports of the Finance Authority and are presented on a cash basis. The foregoing tables represent both the Original Marion County Admissions Tax and the Admissions Tax Increase, but do not represent a projection of Marion County Admissions Tax revenues available for the payment of rentals under any Obligations. The only Marion County Admission Tax revenues pledged to the payment of rental payments on the Obligations are: (i) the 1% of the Admissions Tax Increase for the entire term of any Obligation, and (ii) the 5% Post-2027 Original Admissions Tax after December 31, 2027, for the remaining term of any Obligation (subject to potential prior claims on the Post-2027 Original Admissions Tax as described above). No projections of such revenues that will be available to pay rentals on any Obligation are included in this Official Statement. (1) Marion County Supplemental Auto Rental Excise Tax. Pursuant to Indiana Code 6-6-9.7, the Indianapolis City-County Council is authorized to impose a tax within Marion County upon the rental of passenger motor vehicles and trucks in Marion County for periods of less than 30 days (such tax, the “Marion County Supplemental Auto Rental Excise Tax”). Certain rentals of passenger motor vehicles and trucks are exempt from the Marion County Supplemental Auto Rental Excise Tax. These are: (a) Rentals of a truck with a declared gross weight in excess of 11,000 pounds; (b) Rental of a passenger motor vehicle or truck by a funeral director licensed under state law if the rental is part of the services provided by the director for a funeral; and (c) Temporary rental of a passenger motor vehicle or truck if the rental is: (1) made or reimbursed under a contract or agreement between a provider and person given for consideration over and above the lease or purchase price of a motor vehicle that undertakes to perform or provide repair or replacement service, or indemnification for that service, or the operational or structural failure of a motor vehicle due to a defect in materials or skill of work or normal wear and tear; (2) made or reimbursed under a contract for mechanical breakdown insurance; (3) made or reimbursed under a contract for automobile collision insurance or automobile comprehensive insurance that covers the temporary lease of a vehicle to the person after the person’s vehicle is damaged or destroyed in the collision; or B-7 (4) otherwise provided to a person as a replacement vehicle: (A) while the person’s vehicle is repaired or serviced due to a defect in materials or skill of work, normal wear and tear, or other damage; or (B) until the person permanently replaces a vehicle that has been destroyed. On June 9, 1997, the Indianapolis City-County Council adopted an ordinance imposing a Marion County Supplemental Auto Rental Excise Tax, with such tax to apply to transactions occurring after June 30, 1997. Until July 1, 2005, the tax rate had been 2% of the gross retail income received by the retail merchant for the rental, and the tax is collected by the retail merchant (such portion of the tax attributable to such rate, the “Original Marion County Supplemental Auto Rental Excise Tax Revenue”). Pursuant to an amendment to Indiana Code 6-6-9.7 in 2005, the Indianapolis City-County Council increased the Marion County Supplemental Auto Rental Excise Tax from 2% to 4%. The 2% increase in the tax rate, together with the original 2% Marion County Supplemental Auto Rental Excise Tax collected after December 31, 2027 (the “Supplemental Auto Rental Excise Tax Increase”), may be used only for payment of Obligations incurred by the Board to the Building Authority or to any state agency created under Section 26 of the Building Authority Act. In accordance with the amendment to Indiana Code 6-6-9.7, the Marion County Supplemental Auto Rental Excise Tax Increase will be used for the sublease rental payments under the Sublease, the Stadium Sublease and any other Additional Obligations. The Marion County Supplemental Auto Rental Excise Tax is imposed, paid and collected in the same manner as the Indiana Gross Retail Tax, and the retail merchant collecting the tax is acting as the agent of the State and Marion County and must remit collections to the Indiana Department of State Revenue less Collection Fees. If on December 31, 2027, there are obligations owed by the Board to the Building Authority or any state agency created under Section 26 of the Building Authority Act, the original 2% rate continues to be levied after its original expiration date through December 31, 2040. The Marion County Supplemental Auto Rental Excise Tax Increase expires on January 1, 2041. [Remainder of Page Intentionally Left Blank] B-8 The following table sets forth the amount of the Marion County Supplemental Auto Rental Excise Tax (less Collection Fees) for the years indicated: (1) (2) (3) (4) Year Amount of Original Marion County Supplemental Auto Rental Excise Tax Revenue (1)(2) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $1,740,000 1,850,000 2,067,000 2,164,000 2,137,000 1,891,000 2,001,000 2,051,000 2,350,000 2,144,000 Not Available Amount of Supplemental Auto Rental Excise Tax Increase (1)(3)(4) – $ 510,000 1,945,000 2,249,000 2,133,000 1,969,000 1,994,000 2,027,000 2,349,000 2,035,000 Not Available Rounded to the nearest thousand dollars. Derived from the audited financial statements of the Board and are presented on an accrual basis. Derived from internal reports of the Finance Authority and are presented on a cash basis. Tax collections for the Supplemental Auto Rental Excise Tax Increase began in July 2005; therefore, the 2005 tax revenue distribution is for a partial year. The foregoing tables represent both the Original Marion County Supplemental Auto Rental Excise Tax and the Supplemental Auto Rental Excise Tax Increase, but do not represent a projection of Marion County Supplemental Auto Rental Excise Tax revenues available for the payment of rentals under any Obligation. The only Marion County Supplemental Auto Rental Excise Tax revenues pledged to the payment of rental payments on the Obligations are: (i) the 2% of the Supplemental Auto Rental Excise Tax Increase for the entire term of any Obligation, and (ii) the original 2% of the Marion County Supplemental Auto Rental Excise Tax after December 31, 2027, through the remaining term of any Obligation. No projections of such revenues that will be available to pay rentals on any Obligation are included in this Official Statement. Regional County Food and Beverage Tax. In 2005, the General Assembly of the Sate enacted Indiana Code 6-9-35 which provides that not later than June 30, 2005, if Marion County adopted all of its ordinances required by the Building Authority Act, Boone, Johnson, Hamilton, Hancock, Hendricks, Morgan and Shelby counties each had the option to adopt an ordinance to impose an excise tax known as the food and beverage tax (the “Regional County Food and Beverage Tax”) at the rate equal to 1% of the gross retail income on covered transactions occurring anywhere in the respective county. Marion County adopted such ordinance on June 13, 2005, thereby triggering the option for each of the aforementioned counties to adopt its ordinance. Covered transactions include any transaction in which food or beverage (including alcoholic beverages) is furnished, prepared or served by a retail merchant for consideration and for consumption at a location, or on equipment, provided by the retail merchant, including transactions in which food or beverage is served by a retail merchant off its premises. Boone, Hamilton, Hancock, Hendricks, Johnson and Shelby counties each adopted an ordinance not later than June 30, 2005, implementing the 1% Regional County Food and Beverage Tax in their respective counties. Pursuant to Indiana Code 6-9-35, the 1% Regional Food and Beverage Tax became effective on August 1, 2005. The 1% Regional County Food and Beverage Tax is collected by the retail merchant who furnishes, prepares or serves the food or beverage and is paid as a separate added amount to the consideration in the transaction. This tax is in addition to the Indiana Gross Retail Tax, which tax applies to, among others, food and beverage transactions subject to the 1% Regional County Food and Beverage Tax. The proceeds of the Indiana Gross Retail Tax are not available for the payment of the rentals under the Sublease, the Stadium Sublease and any other Additional Obligations. Except in Johnson County, the 1% Regional County Food and Beverage Tax is imposed, paid and collected in the same manner as the Indiana Gross Retail Tax and the retail merchant collecting the tax must remit the collections to the Indiana Department of State Revenue less Collection Fees. In Johnson County, the Johnson County Treasurer is responsible for collecting the 1% Regional County Food and Beverage Tax and enforcing any of the provisions set B-9 forth in the statute authorizing the Indiana Gross Retail Tax with respect to the 1% Regional County Food and Beverage Tax, and the retail merchant collecting the tax must remit the collections to the County Treasurer less Collection Fees. The 1% Regional County Food and Beverage Tax is collected by retail merchants at the time of the transaction and remitted monthly to the Indiana Department of Revenue, the state agency that administers the tax in five of the six counties, or, in Johnson County, Indiana, to the Johnson County Treasurer who remits 50% of the amounts collected to the State Treasurer monthly. Amounts received from the 1% Regional Food and Beverage Tax and dedicated to the Obligations shall be transferred monthly to the Deposit Trustee under the Revenue Deposit Agreement and may only be used for the payment of Obligations. As long as there are any obligations owed by the Board to the Building Authority or any state agency under a lease or other agreement entered into between the Board and the Building Authority or any state agency pursuant to Section 26 of the Building Authority Act, 50% of the amounts received from the 1% Regional County Food and Beverage Tax by the Indiana Department of State Revenue from each of the five counties and all of the amounts received from the 1% Regional County Food and Beverage Tax by the State Treasurer from the Johnson County Auditor, will be paid monthly by the State Treasurer to the Deposit Trustee upon warrants issued by the State Auditor. In any State fiscal year, if the total amount of the 1% Regional County Food and Beverage Taxes imposed by all of such counties and paid to the Deposit Trustee equals $5,000,000 (the “Regional County Food and Beverage Tax Cap”), the entire remainder of such taxes imposed by such counties during that State fiscal year will be retained by the Johnson County Treasurer or paid by the State Treasurer to the fiscal officer of the other five counties upon warrants issued by the State Auditor. The entire amount received by the Deposit Trustee will be deposited in the Stadium and Convention Special Fund and used only for the payment or to secure the payment of Obligations and if such moneys are not used for such purposes they will be returned by the Deposit Trustee to the State Treasurer who will return the taxes to the respective counties that contributed the taxes. The 1% Regional County Food and Beverage Tax terminates on January 1 of the year immediately following the year in which the last payment obligation of the Board is made with respect to any obligation owed by the Board to the Building Authority or any state agency under a lease or other agreement entered into between the Board and the Building Authority or any state agency pursuant to Section 26 of the Building Authority Act. [Remainder of Page Intentionally Left Blank] B-10 The following table sets forth the Regional County Food and Beverage Tax (less Collection Fees) collected for the years indicated: Amount of Regional County Food and Beverage Tax (1)(2)(3)(4) Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (1) (2) (3) (4) $ 680,000 4,699,000 5,013,000 5,027,000 5,188,000 4,975,000 5,201,000 5,158,000 5,235,000 Not Available Rounded to the nearest thousand dollars. Derived from internal reports of the Finance Authority and are presented on a cash basis. Represents 50% of the amounts received from the 1% Regional County Food and Beverage Tax by the Indiana Department of State Revenue from Boone, Hamilton, Hancock, Hendricks and Shelby Counties and by the Johnson County Treasurer of State Revenue from Johnson County. The Regional County Food and Beverage Tax applies to transactions beginning August 1, 2005; therefore, the 2005 tax revenue distribution is for a partial year. The foregoing table represents data concerning the Regional County Food and Beverage Tax, but does not represent a projection of Regional County Food and Beverage Tax revenues available for payment of rentals under the Sublease. No projections of such revenues that will be available to pay rentals on any Obligations are included in this Official Statement. Professional Sports Development Area Revenues Pursuant to Indiana Code 36-7-31, as amended, the Metropolitan Development Commission of the City of Indianapolis, Indiana, and of Marion County, Indiana (the “Commission”), may establish a professional sports development area, which area may include any facility or complex of facilities (a) used in the training of a team engaged in professional sports events, (b) financed in whole or in part by notes or bonds issued by a political subdivision or issued under the Board Act or the Building Authority Act and used to hold a professional sporting event or (c) consisting of a hotel, a motel or a multibrand complex of hotels and motels, with significant meeting space, located in a certain specified downtown area in Indianapolis (the “PSDA Addition”), none of which area is included in the PSDA (as defined herein). If an area described in clauses (a) and (b) above is established by the Commission and approved by the State Budget Agency, certain state and local taxes generated in such area are allocated to a professional sports development area fund (the “PSDA Fund”) and can be used to finance the construction and equipping of a designated capital improvement used for a professional sporting event. The taxes which may be allocated to the PSDA Fund include the Indiana Gross Retail Tax, the Indiana Use Tax, the Indiana Adjusted Gross Income Tax imposed on an individual, the County Option Income Tax and the 2% Marion County Food and Beverage Tax (the “Covered Taxes”). On June 20, 1997, the Commission adopted a resolution establishing the Marion County Professional Sports Development Area (the “PSDA”) and on July 14, 1997, the State Budget Agency approved such resolution. The PSDA includes five facilities: (1) the Bankers Life Fieldhouse, (2) the Indiana Convention Center, including the Convention Center Expansion Project, (3) Victory Field, (4) the Indianapolis Colts Practice Facility, and (5) the Stadium Project. The PSDA originally included Market Square Arena and the RCA Dome to allow for the allocation of Covered Taxes to the PSDA Fund related to the Pacers’ operations prior to their initiation of operation in Bankers Life Fieldhouse in 1999 and the holding of sporting and other events in the RCA Dome, including home games for the Colts prior to the initiation of operation of the Stadium Project in 2008, respectively. With the cessation of use of Market Square Arena for the operation of a professional sports franchise during 1999 and its B-11 demolition by implosion in 2001, such inclusion is no longer relevant to the allocation of Covered Taxes to the PSDA Fund. The RCA Dome was demolished in 2008. All Covered Taxes generated at each of the five facilities will be deposited into the PSDA Fund. However, the total amount of state revenue (i.e., Indiana Gross Retail Tax, Indiana Use Tax and Indiana Adjusted Gross Income Tax) captured by the PSDA may not exceed $5,000,000 per year for 20 consecutive years (the “State PSDA Cap”). In 2005, the General Assembly of the State amended Indiana Code 36-7-31 to provide that after May 14, 2005, the PSDA may be changed to add the site or future site of a facility that is or will be the subject of a lease or other agreement entered into between the Board and the Building Authority or any state agency created under Section 26 of the Building Authority Act and the terms governing the PSDA may be revised only with respect to such facility. Pursuant to such amendment, the budget director of the State Budget Agency determined that, commencing July 1, 2007, there will be captured in the PSDA up to $11,000,000 per year in Covered Taxes which are state taxes for up to 34 consecutive years (the “PSDA Revenues Increase”) in addition to the up to $5,000,000 in Covered Taxes which are state taxes to be captured in the PSDA under Indiana Code 36-7-31-14. The amendment further provided that the original $5,000,000 per year State PSDA Cap will be extended beyond the original 20 years (which currently expires in 2017) to January 1, 2041 (the “Post-2017 Original PSDA Revenues”), so that the maximum amount of state revenue that may be captured by the PSDA is $16,000,000 per year. On August 3, 2005, the Commission adopted a resolution expanding the existing PSDA to include the Stadium Project and on August 29, 2005, the Indianapolis City-Council adopted a resolution approving the action of the Commission in expanding the PSDA. The Post-2017 Original PSDA Revenues and the PSDA Revenues Increase are collectively referred to as “PSDA Revenues.” Pursuant to the Revenue Deposit Agreement, the PSDA Revenues will be distributed to the Deposit Trustee and are pledged to the payment of lease rentals under the Sublease, the Stadium Sublease, and any other Additional Obligations. So long as there are Obligations owed by the Board to the Building Authority or to any state agency created under Section 26 of the Building Authority Act, the Board or its designee will deposit the PSDA Revenues in a special fund which may only be used for the payment of Obligations owed by the Board to the Building Authority or to any state agency created under Section 26 of the Building Authority Act. Future PSDA Revenues are dependent, in part, upon the continued operation of professional sport franchises in one or more of the Board’s facilities described above. Currently, the major professional sport franchises operating in one or more of the Board’s facilities described above are the Pacers Basketball, LLC, successor to Pacers Basketball Corporation (the “Pacers”), the Colts and the Indians, Inc. (the “Indians”) (collectively the “Sport Franchises”). Terms of the agreements with the respective Sports Franchises are as follows: Pacers. The Board, MCCRFA and the Pacers (including certain Pacer-related parties) agreed to an Amended and Restated Operating Agreement (as amended, the “Operating Agreement”) in 2014 related to Bankers Life Fieldhouse. The initial term of the Operating Agreement expires in 2024, with the Pacers possessing a unilateral option to extend the Operating Agreement for one year. The Operating Agreement provides generally that the Pacers may terminate the agreement under certain circumstances including as follows: (i) Board’s failure to obtain, prior to any fiscal year, approval of an annual budget or other appropriation sufficient to satisfy its obligations under the Operating Agreement, including its obligation to pay certain operating expense reimbursements, pay certain Board operating expense items, pay the video/sound system license fee, fund its obligations with respect to scheduled capital repairs and replacements (aggregating $7 million) and fund its obligations with respect to refresh improvements (aggregating $26.5 million); (ii) Board’s failure to pay (after receiving a final appropriation therefor) any operating expense reimbursements, operating expense items or video/sound system license fee for which it is responsible or the amount of any final, non-appealable judgment rendered against the Board under the Operating Agreement; (iii) certain circumstances involving eminent domain, damage or destruction of the Fieldhouse; (iv) breach of the Pacers right to exclusively possess and operate the Fieldhouse; (v) default under the Fieldhouse lease related to the MCCRFA Bonds that results in termination of such lease or possession by MCCRFA; (vi) Board’s failure to honor any indemnity obligation under the Operating Agreement or Parking Agreement and such obligation is found by a court to be unenforceable; (vii) Board’s or MCCRFA’s failure to fulfill any material obligation under the Operating Agreement or the related parking agreement and such obligation is found by a court to be unenforceable; (viii) certain circumstances following the death of Herbert Simon, under which certain Pacers loans are called or matured, the Pacers are unable to obtain replacement financing on a non-recourse basis (with the assistance of the Board if it so chooses) and the Board does B-12 not successfully execute its right of first offer; (ix) certain circumstances under which the NBA ceases to exist and the Pacers do not join a successor or replacement professional basketball league. Additionally, the Operating Agreement provides that a sale of shares which would constitute a controlling interest in the Pacers, or the sale of substantially all of the assets of the Pacers, is subject to the Board’s right of first refusal and, after the sale, the Pacers (or buyer, if it is a sale of assets) will remain bound by the Operating Agreement. Colts. The Board, the City and the Colts executed a lease agreement (as amended, the “Agreement”) pursuant to which, among other things, the Colts agreed to play certain of its home National Football League games in the Stadium Project and the Board agreed to make the Stadium Project available for such purpose. The initial term of the Agreement commenced upon completion of the Stadium Project in accordance with the terms and conditions of the Development Agreement entered into in 2005 (as amended, the “Development Agreement”) by and among the Building Authority, the Board and the Colts and runs until August 31, 2038. The Agreement and the Development Agreement provide generally that the Colts may terminate such agreements under certain limited circumstances such as bankruptcy and damage or destruction of the Stadium Project, that cannot be or is not repaired or cured as specified therein. Indians. In 1994, the Board and the Indians executed a sub-lease agreement (as amended, the “SubLease”) for the use of Victory Field. The initial term of the Sub-Lease commenced in 1996 and ends in 2016, with the Indians possessing the option to extend the Sub-Lease for ten consecutive periods of five years each. The SubLease provides generally that the Indians may terminate the Sub-Lease under certain circumstances involving condemnation or eminent domain. If the facility or any portion is damaged or destroyed, neither party has a right to terminate, but the Board will use best efforts to restore or repair the facility. After the initial term of the Sub-Lease, the Board acquires a right of first refusal to match any bona fide offer received by the Indians for the sale of substantially all the assets of the Indians. The Indians may also terminate this agreement if (i) a Major League Baseball franchise locates in the Indianapolis area, (ii) the obligations of the Sub-Lease are assumed by another entity upon a transfer of the franchise, or (iii) the American Association, or other league in which the Indians are a member, ceases operations. The following table sets forth the amount of the historical revenues generated from the original PSDA (less Collection Fees) for the years indicated: Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (1) (2) Amount of original revenues from PSDA (1)(2)(3)(6) $5,696,000 (3) 5,257,000 7,351,000 (3) 6,563,000 (3) 7,274,000 (3) 8,150,000 11,054,000 7,692,000 7,213,000 7,457,000 Not Available Amount of PSDA Revenues Increase (1)(4)(5) – – – – $10,058,000 8,570,000 5,769,000 6,745,000 8,393,000 9,166,000 Not Available Rounded to the nearest thousand dollars. Since the inception of the PSDA, distributions related to Marion County Option Income Tax receipts have included periodic adjusting payments related to tax receipts associated with the prior years (with such reconciling distributions to the Board being made (a) up to 2 years after receipt of such taxes by the Indiana Department of Revenue and (b) in annual amounts ranging up to approximately $2.9 million). Commencing in 2009, Indiana taxpayers were required to report Marion County Option Income Tax separately from other State income tax on tax withholding returns filed by taxpayers, which may have reduced the occurrence of such types of delayed B-13 (3) (4) (5) (6) reconciling distributions, however, the Board does not have access to information that would be sufficient to determine if such has occurred in more recent periods. Derived from the audited financial statements of the Board and are presented on an accrual basis for the years shown. Derived from internal reports of the Finance Authority and are presented on a cash basis. The number reported in 2008 is the total tax distributed through the period ended December 31 and includes Marion County Option Income Tax receipts of $633,100 that were deducted from payments received in 2009. In 2010, the Indiana Department of Revenue determined that an additional $1,945,000 of Marion County Option Income Tax receipts were included in the 2008 PSDA distribution. As a result, $1,790,000 was deducted from the 2010 PSDA distribution and the remaining $155,000 was deducted from the 2011 PSDA distribution. Does not include any revenues derived from the PSDA Addition. The foregoing table represents historical collections of revenues from the PSDA, but does not include any data concerning the Post-2017 Original PSDA Revenues, and does not represent a projection of PSDA Revenues available for the payment of rentals on any Obligations. The only PSDA Revenues pledged to the payment of rentals on any Obligations are the Post-2017 Original PSDA Revenues and the PSDA Revenues Increase. While the maximum amount of PSDA Revenues that may be captured to pay rentals on any Obligations is $16,000,000 per year after 2017, no projections of such revenues that will be available to pay rentals on any Obligations are included in this Official Statement. Fees Ticket Fee. With respect to a capital improvement that is subject to the Marion County Admissions Tax imposed by Indiana Code 6-9-13, Section 13 of the Building Authority Act provides that, upon request of the Building Authority, the Board will impose a fee: (i) not to exceed $3, as determined by the Building Authority, for each admission to a professional sporting event described in Indiana Code 6-9-13-1; and (ii) not to exceed $1, as determined by the Building Authority, for each admission to any other event described in Indiana Code 6-9-13-1. As of the date of this Official Statement, the Building Authority has taken no official action to impose the admissions tax. The Colts, under the lease between the Board and the Colts, have the right to terminate such lease in the event the Building Authority imposes the admissions tax described in (i) above (but not (ii) above). So long as there are any Obligations owed by the Board to the Building Authority or any state agency pursuant to a Lease or other agreement entered into between the Board and the Building Authority or any state agency created under Section 26 of the Building Authority Act, including the Sublease, the Board or its designee will deposit the revenues received from the fee imposed under this subsection (if such fee is imposed) in the Stadium and Convention Special Fund to be used only for the payment of the Obligations. Specialty License Plate Fee. In 2005, the General Assembly of the State enacted Indiana Code 9-18-49, which permits the Indiana Bureau of Motor Vehicles to design, and issue after December 31, 2005, a National Football League franchised football team license plate as a specialty group recognition license plate under Indiana Code 9-18-25 featuring the name and logo of the Colts. The annual fee of $20, which will be charged for the license plate, is in addition to standard license plate fees and is collected by the Indiana Bureau of Motor Vehicles at the time the plate is sold. Fees received from the sale of the Colts’ specialty license plates (the “Specialty License Plate Fee”) are required to be deposited into a special capital projects fund administered by the Budget Director of the State of Indiana. Amounts in the capital projects fund will be transferred to the Deposit Trustee, as the designee of the Board chosen by the Budget Director. Amounts transferred to the Board or the Deposit Trustee will be used for the payment of Obligations. Pursuant to Indiana Code 9-18-49, money in the capital projects fund is continuously appropriated and, does not revert to the general fund of the State at the end of the State’s fiscal year. B-14 The following table sets forth the Specialty License Plate Fee collected for the years indicated: (1) (2) (3) Year Amount of Specialty License Plate Fee (1)(2)(3) 2006 2007 2008 2009 2010 2011 2012 2013 2014 $133,000 453,000 849,000 822,000 891,000 913,000 811,000 738,000 Not Available Rounded to the nearest thousand dollars. The Specialty License Plate Fee applies to transactions beginning January 1, 2006. Specialty License Plate Fee revenues are derived from internal reports of the Finance Authority and presented on a cash basis. The foregoing table represents data concerning the Specialty License Plate Fee, but does not represent a projection of Specialty License Plate Fee revenues available for payment of rentals on any Obligations. No projections of such revenues that will be available to pay Sublease rentals are included in this Official Statement. Neither the Board nor the MCCRFA are obligated to make payment of the principal of or interest on the Convention Center Bonds. The Board, pursuant to the Sublease, is obligated to make rental payments, but solely from the Local Revenues. Except for certain information contained in this Official Statement regarding the Board, the Board has not passed on the accuracy or completeness of this Official Statement. B-15 PAGE INTENTIONALLY LEFT APPENDIX C-1 SUMMARY OF CERTAIN PROVISIONS OF DOCUMENTS THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS CONTAINED IN THE INDENTURE, THE LOAN AGREEMENT, THE LEASE, THE SUBLEASE AND THE REVENUE DEPOSIT AGREEMENT. THIS SUMMARY DOES NOT PURPORT TO BE A COMPREHENSIVE DESCRIPTION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE INDENTURE, THE LOAN AGREEMENT, THE LEASE, THE SUBLEASE AND THE REVENUE DEPOSIT AGREEMENT. DEFINITIONS The following definitions apply throughout this Official Statement. “Accounts” means the accounts created pursuant to the Indenture. “Act” means, collectively, Indiana Code 4-4-10.9, as amended, and 4-4-11, as amended. “Additional Admissions Tax” means the portion of the Marion County Admissions Tax imposed pursuant to Indiana Code 6-9-13, as amended, and any successor provisions, described in Indiana Code 6-9-13-2(c) and deposited in the Stadium and Convention Special Fund pursuant to the Revenue Deposit Agreement. “Additional Bonds” means the additional parity Bonds and Refunding Bonds authorized to be issued by the Finance Authority pursuant to the Indenture or any Supplemental Indenture. “Additional Building Authority Notes” means promissory notes issued to the Finance Authority pursuant to Indiana Code 5-1-17, as amended, the Loan Agreement and any Supplemental Loan Agreement, subsequent to the issuance of the Series 2015 A Building Authority Note, and acquired with the proceeds of a Series of Additional Bonds for the purpose of providing loans to the Building Authority, which will be used, together with other available funds, to pay the costs of the Convention Center Expansion Project. “Additional Innkeeper’s Tax” means the portion of the Marion County Innkeeper’s Tax imposed pursuant to Indiana Code 6-9-8, as amended, and any successor provisions, described in Indiana Code 6-9-8-3(e) and deposited in the Stadium and Convention Special Fund pursuant to the Revenue Deposit Agreement. “Additional Marion County Food and Beverage Tax” means the portion of the Marion County Food and Beverage Tax imposed pursuant to Indiana Code 6-9-12, as amended, and any successor provisions, described in the second sentence of Indiana Code 6-9-12-8 and deposited in the Stadium and Convention Special Fund pursuant to the Revenue Deposit Agreement. “Additional Marion County Professional Sports Development Area Revenues” means the portion of the proceeds received by the Board from the Marion County Professional Sports Development Area in accordance with Indiana Code 36-7-31, as amended, described in Indiana Code 36-7-31-14.1 and deposited in the Stadium and Convention Special Fund pursuant to the Revenue Deposit Agreement. “Additional Obligations” means the Sublease, any Supplemental Subleases and any Supplemental Stadium Subleases. “Additional Payments” means additional amounts required to be paid by the Building Authority pursuant to the Loan Agreement. See “THE LOAN AGREEMENT – Loan from Finance Authority; Issuance of Notes – Additional Payments.” “Additional Project” means a capital improvement or a portion thereof or a modification thereto or land upon which a capital improvement is located or the Building Authority or the SU to be located, which is acquired or C-1-1 constructed by the Building Authority and leased to the OMB and subleased to the Board pursuant to the Sublease or a Supplemental Sublease, or which is otherwise financed pursuant to any Obligation. “Additional Stadium Bonds” means any bonds issued by the Finance Authority pursuant to the Stadium Trust Indenture on a parity with the Outstanding Stadium Bonds and any Additional Stadium Bonds theretofore issued and, in each case, then outstanding. “Additional Supplemental Auto Rental Excise Tax” means the portion of the Marion County Supplemental Auto Rental Excise Tax imposed pursuant to Indiana Code 6-6-9.7, as amended, and any successor provisions, described in Indiana Code 6-6-9.7-7(d), and deposited in the Stadium and Convention Special Fund pursuant to the Revenue Deposit Agreement. “Alternate Credit Enhancement” or “Alternate Liquidity Facility” means a letter of credit, insurance policy, line of credit, surety bond, standby purchase agreement or other security or liquidity instrument, as the case may be, issued in accordance with the terms hereof as a replacement or substitute for any Credit Enhancement or Liquidity Facility, as applicable, then in effect. “Alternate Rate” means, on any Rate Determination Date, for any Mode, a rate per annum equal to (a) the SIFMA Municipal Swap Index of Municipal Market Data, formerly the PSA Municipal Swap Index (as such term is defined in the 1992 ISDA U.S. Municipal Counterparty Definitions) (the “SIFMA Rate”) most recently available as of the date of determination, or (b) if such index is no longer available, or if the SIFMA Rate is no longer published, the Kenny Index (as such term is defined in the 1992 ISDA U.S. Municipal Counterparty Definitions), or if neither the SIFMA Rate nor the Kenny Index is published, the index determined to equal the prevailing rate determined by the Remarketing Agent for tax-exempt state and local government bonds meeting criteria determined in good faith by the Remarketing Agent to be comparable under the circumstances to the criteria used by the Securities Industry and Financial Markets Association to determine the SIFMA Rate just prior to when the Securities Industry and Financial Markets Association stopped publishing the SIFMA Rate. The Tender Agent will make the determinations required by this definition, upon notification from the Finance Authority, if there is no Remarketing Agent, if the Remarketing Agent fails to make any such determination or if the Remarketing Agent has suspended its remarketing efforts in accordance with the Remarketing Agreement. “Applicable Investment Securities” means with respect to funds on deposit in a subaccount related to the Stadium Sublease, Investment Securities as defined in the Stadium Trust Indenture, and with respect to funds on deposit in a subaccount related to the Sublease, Investment Securities as defined in the Indenture. “Auction Rate Securities Mode” means the Mode during which any of the Bonds bear interest at an auction rate. “Authorized Building Authority Representative” means the person designated at the time pursuant to the Loan Agreement to act on behalf of the Building Authority by written instrument furnished to the Finance Authority and the Trustee, containing the specimen signature of such person and signed by any officer of the Building Authority. Such instrument may designate an alternate or alternates. “Authorized Denominations” means (i) with respect to Bonds in a Daily Mode or Weekly Mode, $100,000 and any integral multiple of $5,000 in excess thereof, (ii) with respect to Bonds in a Flexible Mode, $100,000 and any integral multiple of $1,000 in excess thereof, (iii) with respect to Bonds in a Long-Term Mode (except the Series 2009 B Bonds), $5,000 and any integral multiple thereof, (iv) with respect to Bonds in an Auction Rate Securities Mode, $25,000 and integral multiples thereof, (v) with respect to the Series 2009 B Bonds, $1,000 and any integral multiple thereof, and (vi) with respect to the Series 2008 A-1 Bonds in the Series 2008 A-1 Index Floating Rate Mode, $100,000 and integral multiples of $5,000 in excess thereof or if the aggregate principal amount of such Subseries of Bonds Outstanding is at any time less than $100,000, the aggregate principal amount of such Subseries of Bonds Outstanding. C-1-2 “Authorized Officer” means the Chairman or the Vice Chairman of the Finance Authority, the Public Finance Director of the State or such other person or persons who are duly authorized to act on behalf of the Finance Authority. “Authorizing Statute” means Indiana Code 4-4-11, as amended, pursuant to which the Bonds are issued. “Automatic Termination Event” means an event of default set forth in the Reimbursement Agreement between the Finance Authority and the Liquidity Provider which would result in the immediate termination of the Liquidity Facility prior to its stated expiration date without prior notice from the Liquidity Provider to the Tender Agent, other than a termination upon the substitution of an Alternate Liquidity Facility. “Available Amount” means the amount available under the Credit Enhancement or Liquidity Facility, as applicable, to pay the principal of and interest on the Bonds or the Purchase Price of the Bonds, as applicable. “Available Funds” means, for any Fiscal Year, the following funds: (i) amounts then on deposit in the respective subaccounts of the Capitalized Interest Account; (ii) additional amounts that are expected to be on deposit in such subaccounts prior to or during such Fiscal Year consisting of scheduled rental payments pursuant to the Lease; and (iii) amounts that are expected to be on deposit in the General Account during such Fiscal Year consisting of regularly scheduled payments received under Qualified Hedging Contracts. “Bank Purchase Date” means (i) with respect to the Series 2008 A-1 Bonds, the Series 2008 A-1 Initial Bank Purchase Date; and (ii) with respect to the Series 2008 A-1 Bonds, during any Series 2008 A-1 Index Floating Rate Period other than the Series 2008 A-1 Initial Period, the date designated by the Finance Authority pursuant to the Indenture. “Bank Rate” shall have the meaning set forth in the Series 2008 A-1 Continuing Covenant Agreement. “Beneficial Owner” means, so long as the Bonds are negotiated in the Book-Entry System, any Person who acquires a beneficial ownership interest in a Bond held by the Securities Depository. If at any time the Bonds are not held in the Book-Entry System, Beneficial Owner means Owner for purposes of the Indenture. “Board” means the Capital Improvement Board of Managers of Marion County, created pursuant to Indiana Code 36-10-9, as amended, or any successor to its functions. “Bond Counsel” means any firm of nationally recognized municipal bond attorneys selected by the Finance Authority and experienced in the issuance of municipal bonds and matters relating to the excludability of the interest thereon from gross income for federal income tax purposes. “Bondholder” or “Owner of a Bond” or “Owner” or any similar term means the registered owner of a Bond. “Bond Issuance Expense Account” means the account by that name created by the Indenture. “Bonds” means the Series 2008 A Bonds, the Series 2009 A Bonds, the Series 2009 B Bonds, the Series 2015 A Bonds and any Additional Bonds. “Book-Entry System” means the system maintained by the Securities Depository. “Budget Director” means the Director of the State Budget Agency appointed by the Governor of the State pursuant to Indiana Code 4-12-1-3, as amended, or if said director will be abolished, the person, board, body, commission or agency succeeding to the principal functions thereof. “Building Authority” means the Indiana Stadium and Convention Building Authority, a separate body corporate and politic, created as an instrumentality of the State pursuant to Indiana Code 5-1-17, as amended, or any successor to its functions. C-1-3 “Building Authority Note Payment” means the amounts paid or required to be paid, from time to time, for the principal of and interest on a Building Authority Note held by the Trustee pursuant to the Indenture. “Building Authority Notes” means the Series 2008 A Building Authority Note, the Series 2009 Building Authority Notes, the Series 2015 A Building Authority Note and any Additional Building Authority Notes. “Business Day” means any day other than (i) a Saturday or Sunday or (ii) a day on which the Trustee, Paying Agent, Remarketing Agent or Broker-Dealer, if any, are required or authorized to be closed or (iii) a day on which the office of the Credit Provider or Liquidity Provider at which it will pay draws or advances are required or authorized to be closed or (iv) a day on which The New York Stock Exchange is closed or the payment system of the Federal Reserve is not in operation. “Calculation Agent” means (i) with respect to the Series 2008 A-1 Bonds, during the Series 2008 A-1 Initial Period, Bank of America, N.A., and thereafter any other Person appointed by the Finance Authority, with the prior written consent of the Series 2008 A-1 Index Floating Rate Bank, to serve as calculation agent for the Series 2008 A-1 Bonds, and (ii), with respect to the Series 2009 B Bonds, any independent accounting firm, investment banking firm or financial advisor retained by the Finance Authority at the Finance Authority’s expense to calculate the Make-Whole Redemption Price. “Capital Improvement Board” means the Capital Improvement Board of Managers of Marion County, Indiana, created pursuant to Indiana Code 36-10-9, as amended, or any successor to its functions. “Capitalized Interest Account” means the account by that name created by the Indenture. “Cash Flow Certificate” means a certificate prepared by an accountant, firm of accountants or other entity at the direction of the Finance Authority in accordance with the Indenture, concerning anticipated Revenues and payments. “Clearing Agency” means initially the Securities Depository, and its successors and assigns, including any surviving, resulting or transferee corporation, or any successor corporation that may be appointed in a manner consistent with the Indenture and includes any direct or indirect participants of the Securities Depository. “Code” means, with respect to each Series of Bonds, the Internal Revenue Code of 1986 in effect on the date of issuance of such Series of Bonds, and the applicable regulations or rulings promulgated or proposed thereunder, and any successor thereto. “Commencement Date” for any Facility means the date on which a Completion Certificate for such Facility is accepted by a representative of the Building Authority. “Completion Certificate” means a certificate (a) executed by a representative of the Building Authority certifying that the Construction of any Facility has been substantially completed and such Facility is available for use and occupancy by the OMB and (b) accepted by a representative of the OMB acknowledging that the Construction of the Facility has been substantially completed and the Facility is available for use and occupancy by the OMB. “Completion Date” means the date of delivery by the Building Authority to the Trustee of the certificate required by the Loan Agreement evidencing the completion of the Project. “Completion Obligations” means any Additional Bonds, Additional Stadium Bonds or Additional Obligations providing for the payment of any bonds the proceeds of which are used for the completion of a Project. “Construction” means the erection, renovation, refurbishing or alteration of any Facility, including the installation of fixtures or equipment, the landscaping of grounds, site work and providing for ancillary facilities pertinent to such Facility, as described in the Building Authority’s plans and specifications applicable thereto. C-1-4 “Contract of Purchase” means the Contract of Purchase between the Finance Authority and the Underwriters, dated May 7, 2015, entered into in connection with the Series 2015 A Bonds. “Convention Center Expansion” means the Convention Center Expansion Facilities and the Real Estate. “Convention Center Expansion Facilities” mean the design, development, construction and equipping of an expansion to the existing Indiana Convention Center, which expansion is intended to contain a combination of additional exhibit hall space and meeting room space, together with additional support spaces, which will consist of the facilities to be constructed on the Real Estate in accordance with the Development Agreement, together with such other facilities and equipment as the Building Authority, with the consent of the Finance Authority, deems necessary and appropriate in connection with the foregoing. “Convention Center Expansion Initial Term” means the period of time commencing on the date of acceptance of a Completion Certificate with respect to the Convention Center Expansion Facilities by a representative of the OMB through July 1, 2011. “Convention Center Expansion Project” means the design, acquisition, construction and equipping of the Convention Center Expansion. “Costs of Issuance” means items of expense payable or reimbursable directly or indirectly by the Finance Authority and related to the authorization, sale and issuance of the Bonds, which items of expense include, but are not limited to, printing costs, costs of reproducing documents, filing and recording fees, initial fees and charges of the Trustee, the Paying Agent, the Deposit Trustee, the Remarketing Agent, the Tender Agent, the Auction Agent and the Broker-Dealer, underwriter’s discounts, placement agent fees, legal fees and charges, professional consultants’ fees, costs of credit ratings, fees and charges for execution, transportation and safekeeping of the Bonds, bond and reserve fund insurance premiums, Credit Enhancement or Liquidity Facility fees, and other costs, charges and fees in connection with the foregoing. “Counsel” means an attorney duly admitted to practice law before the highest court of any state and approved by the Finance Authority. “Credit Enhancement” means a letter of credit, insurance policy, surety bond, line of credit or other instrument then in effect which secures or guarantees the payment of the principal of and interest on the Bonds. “Credit Facility” means any letter of credit, revolving credit agreement, surety bond, insurance policy or other agreement or instrument. “Credit Provider” means any bank, insurance company, pension fund or other financial institution which provides a Credit Enhancement or Alternate Credit Enhancement for the Bonds. “Credit Provider Failure” or “Liquidity Provider Failure” means: (i) a failure of the Credit Provider or the Liquidity Provider, as applicable, to pay a properly presented and conforming draw or request for advance under the Credit Enhancement or the Liquidity Facility, as applicable; (ii) the filing or commencement of any bankruptcy or insolvency proceedings by or against the Credit Provider or the Liquidity Provider, as applicable, and in the case of any such proceedings filed against the Credit Provider or the Liquidity Provider, such proceedings are not terminated or dismissed within 60 days of such filing; or (iii) the Credit Provider or the Liquidity Provider, as applicable, declares a moratorium on the payment of its unsecured debt obligations or repudiates the Credit Enhancement or the Liquidity Facility, as applicable. “Daily Mode” means the Mode during which the Bonds bear interest at the Daily Rate. “Daily Rate” means the per annum interest rate on any Bond in the Daily Mode determined pursuant to the Indenture. C-1-5 “Daily Rate Period” means the period during which a Bond in the Daily Mode bears a Daily Rate, which is from the Business Day upon which a Daily Rate is set to, but not including, the next succeeding Business Day. “Debt Service” for any period shall mean, as of any date of calculation and with respect to any Outstanding Series of Bonds, an amount equal to the sum of: (1) interest accruing during such period on the Bonds of such Series, except to the extent that such interest is to be paid from deposits in the Capitalized Interest Account of the General Fund from proceeds of the Bonds of such Series or a related Series, reduced by any applicable Subsidy Payments; (2) that portion of each Principal Installment for such Series of Bonds of which would accrue during such period if such Principal Installment were deemed to accrue daily in equal amounts from the next preceding Principal Installment due date for such Series of Bonds (or, if (a) there shall be no such preceding Principal Installment due date or (b) such preceding Principal Installment due date is more than one year prior to the due date of such Principal Installment, then, from a date one year preceding the due date of such Principal Installment or from the date of issuance of the Bonds of such Series, whichever date is later); (3) all amounts then owed at the beginning of such period and expected to be owed during such period by the Finance Authority to any Qualified Hedging Contract Provider or any provider of a Reimbursement Obligation pursuant to a Qualified Hedging Contract or a Reimbursement Obligation; less all amounts then owed at the beginning of such period and expected to be owed during such period by any Qualified Hedging Contract Provider or any provider of a Reimbursement Obligation to the Finance Authority; and (4) the amount then owed at the beginning of such period to: (a) the Finance Authority for unpaid Program Expenses consisting of any moneys the Finance Authority has previously remitted to the Trustee for deposit in the Capitalized Interest Account of the General Fund from a source other than proceeds of the Bonds or which immediately prior to such remittance was not part of the Trust Estate. Notwithstanding the foregoing, the following assumptions will be used when estimating Debt Service for the period applicable to the respective computation for the purpose of requesting an appropriation in accordance with the Lease and establishing maximum lease rentals under the Lease (referred to as “Maximum Debt Service”): (i) no Bonds of a Series of Bonds Outstanding at the date of calculation will cease to be Outstanding, except by reason of the payment of each Principal Installment on the due date thereof; (ii) any Bonds in the ARS Mode or a Variable Rate Mode, which are not Liquidity Provider Bonds at the time of such calculation, will be deemed to bear interest at the Maximum Bond Rate and the regularly scheduled payments to be made or received by the Finance Authority pursuant to the related Qualified Hedging Contract shall not be included in Debt Service; (iii) if any Liquidity Provider Bonds are outstanding at the date of such calculation, the principal amount due with respect to such Liquidity Provider Bonds will be deemed to accrue on the dates provided in the related Liquidity Facility or Reimbursement Agreement and such Liquidity Provider Bonds will be deemed to bear interest at the Maximum Liquidity Facility Rate, as further described in the last paragraph of this definition; and C-1-6 (iv) if any Reimbursement Obligations are outstanding at the date of such calculation, the principal amount due with respect to Reimbursement Obligations will be deemed to accrue on the dates provided in the related Reimbursement Agreement and Reimbursement Obligations will be deemed to bear interest at the Maximum Reimbursement Rate. Notwithstanding the foregoing, the following assumptions shall be used when estimating Debt Service for the period applicable to the respective computation for the purpose of establishing expected lease rentals under the Lease or establishing the Reserve Requirement under the Revenue Deposit Agreement (referred to as “Expected Debt Service”): (i) no Bonds of a Series of Bonds Outstanding at the date of calculation will cease to be Outstanding, except by reason of the payment of each Principal Installment on the due date thereof; (ii) any Bonds in the ARS Mode or a Variable Rate Mode, which are not Liquidity Provider Bonds at the time of such calculation, will be deemed to bear interest (i) if such Bonds are not Qualified Hedge Bonds for the applicable period, at the Revenue Bond Index and (ii) if such Bonds are Qualified Hedge Bonds for the applicable period, at the Qualified Hedge Rate; (iii) if any Liquidity Provider Bonds are outstanding at the date of such calculation, the principal amount due with respect to such Liquidity Provider Bonds will be deemed to accrue on the dates provided in the related Liquidity Facility or Reimbursement Agreement and such Liquidity Provider Bonds will be deemed to bear interest at the Maximum Liquidity Facility Rate, as further described in the last paragraph of this definition; and (iv) if any Reimbursement Obligations are outstanding at the date of such calculation, the principal amount due with respect to Reimbursement Obligations will be deemed to accrue on the dates provided in the related Reimbursement Agreement and Reimbursement Obligations will be deemed to bear interest at the Maximum Reimbursement Rate. For purposes of this definition, Debt Service on other types of debt instruments not described by the Indenture will be calculated in the manner and during such period of time as is specified in the Supplemental Indenture therefor. With respect to the Series 2008 A Bonds, the debt instruments described within this definition of “Debt Service” include the Series 2008 A Bonds, a Series 2008 A-1 Liquidity Facility and the Series 2008 A-2 Liquidity Facility. With respect to the Series 2009 Bonds, the debt instruments described within this definition of “Debt Service” include the Series 2009 Bonds. For purposes of this definition, if a Maximum Liquidity Facility Rate cannot be definitively determined with respect to any Liquidity Facility or Reimbursement Agreement, the Finance Authority, in its sole discretion, will assign an estimated maximum rate based on the terms of such instrument. “Debt Service Reserve Account” means the account by that name created by the Indenture. “Debt Service Reserve Fund” means the fund by that name created by the Indenture. “Debt Service Reserve Fund Credit Facility” means any letter of credit, revolving credit agreement, surety bond, insurance policy or other agreement or instrument issued or provided by a Debt Service Reserve Fund Credit Provider, (1) which may be deposited in a reserve account in the Debt Service Reserve Fund in lieu of or in partial substitution for cash or investment securities to be on deposit therein, and (2) which is payable (upon the giving of notice as required thereunder) on any due date on which moneys will be required to be withdrawn from such reserve C-1-7 account in which such Debt Service Reserve Fund Credit Facility is deposited and applied to the payment of the principal of or interest on any Bonds. “Debt Service Reserve Fund Credit Provider” means the issuer of any Debt Service Reserve Fund Credit Facility and its successor in such capacity and their assigns. To qualify under the Indenture, the Debt Service Reserve Fund Credit Provider providing such Debt Service Reserve Fund Credit Facility must be acceptable to the aSeries 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not in default thereunder, and must be either: (a) an insurer whose municipal bond insurance policies insuring the payment, when due, of the principal of and interest on municipal bond issues result in such issues being rated in a rating category that is at least as high as the rating assigned to the Bonds by the Rating Agencies; or (b) a bank or trust company which at the time of issuance of such Debt Service Reserve Fund Credit Facility has an outstanding, unsecured, uninsured and unguaranteed debt issue rated in a rating category that is at least as high as the ratings assigned to the Bonds by the Rating Agencies. “Debt Service Reserve Fund Reimbursement Obligation” means any obligation to reimburse the Debt Service Reserve Fund Credit Provider for any payment made under a Debt Service Reserve Fund Credit Facility or any other obligation to repay any amounts (including, but not limited to, fees or additional interest) to the Debt Service Reserve Fund Credit Provider. Any requirement in the Indenture to replenish the Debt Service Reserve Account includes the obligation to reimburse the Debt Service Reserve Fund Credit Provider for amounts drawn under its Debt Service Reserve Fund Credit Facility. “Debt Service Reserve Requirement” means an amount equal to the maximum annual principal and interest requirements on the Bonds through February 1, 2028, assuming that the Bonds bear interest at a rate of 5.02% per annum, which, at the time of issuance of the Series 2009 Bonds, shall mean an amount equal to $20,505,851. In any event, on and after the date on which the Convention Center Expansion Project is available for use and occupancy pursuant to the Sublease or December 1, 2010, whichever is later, the Debt Service Reserve Requirement shall be equal to 35% of the maximum semiannual interest requirements on the Series 2009 B Bonds; provided, however, that on and after any date on which the Trustee has received a Rating Confirmation Notice from each Rating Agency then rating the Bonds, the Debt Service Reserve Requirement shall be equal to zero. “Default” means an event or condition, the occurrence of which, with the lapse of time or the giving of notice or both, would become an Event of Default under the Indenture. “Delinquent Rental Account” means the Delinquent Rental Account created pursuant to the Revenue Deposit Agreement. “Deposit Trustee” means The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.), or its successors in trust as trustee under the Revenue Deposit Agreement. “Development Agreement” means the agreement between the Building Authority and the Board, dated July 31, 2006, which, among other things, describes the Convention Center Expansion Facilities and sets forth requirements relating to their design and construction. “Electronic Means” means the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services under the Indenture. “Eligible Account” means: (1) an account that is maintained with a federal or state-chartered depository institution or trust company that has a short-term debt rating of at least ‘A-2’ (or if no short-term rating has been issued for such entity, a long-term debt rating of ‘BBB+’); or (2) an account that is maintained with the corporate C-1-8 trust department of federal depository institution or state chartered depository institution, which, in either case, has corporate trust powers and is acting in its fiduciary capacity. “Escrow Account” means the Escrow Account established pursuant to the Escrow Agreement. “Escrow Agreement” means the Escrow Agreement, dated as of May 1, 2015, between the Finance Authority and The Bank of New York Mellon Trust Company, N.A., as escrow agent and the Trustee, with respect to the Series 2008 A Bonds to be refunded by the Series 2015 A Bonds. “Event of Default” means any of the events specified in the applicable document to be an Event of Default. “Excess Revenues Account” means the Excess Revenues Account created pursuant to the Revenue Deposit Agreement. “Excise Tax Revenues” means the proceeds derived by the Board from the levy and collection of the Excise Taxes. “Excise Taxes” means, collectively, the Additional Admissions Tax, the Additional Marion County Food and Beverage Tax, the Regional County Food and Beverage Tax, the Additional Innkeeper’s Tax, the Additional Supplemental Auto Rental Excise Tax and any other local excise tax pledged by the Board under any future supplement to the Revenue Deposit Agreement. “Existing Obligations” means, collectively, the following existing or future obligations of the Board under the Prior Revenue Deposit Agreement: (i) the Master Lease Agreement dated as of May 1, 1991, between the Marion County Convention and Recreational Facilities Authority (“MCCRFA”), as lessor, and the Board, as lessee, as amended to the date hereof, with a final stated lease rental payment date of June 1, 2027 (collectively, the “Senior Lease”); (ii) the Master Lease Agreement Number II dated as of December 1, 1997, between MCCRFA, as lessor, and the Board, as lessee, as amended to the date hereof, with a final stated lease rental payment date of June 1, 2027 (the “Subordinate Lease”); (iii) the Marion County, Indiana, Excise Taxes Revenue Subordinate Bonds, Series 1999 A, with a final maturity date of June 1, 2021; (iv) the Capital Improvement Board of Managers of Marion County Excise Taxes Revenue Subordinate Refunding Notes, Series 1999 A, with a final maturity date of June 1, 2008; (v) the Capital Improvement Board of Managers of Marion County, Junior Subordinate Notes, Series 1998 A and Series 2003 A (Taxable), with a maturity date of December 31, 2007, together with any 2008 Note (as defined and described in each respective Agreement of the Board dated May 1, 1998 entered into with the holders of such notes) issued to refund such notes; and (vi) any amendments to the Subordinate Lease (including amending the obligations thereunder to pay rent) in connection with the issuance of obligations by MCCRFA in 2008, in the event that KeyBank National Association (“KeyBank”) exercises its option under the ISDA Master Agreement dated as of April 20, 2005, between MCCRFA and KeyBank. “Expenses” means all reasonable expenses incurred by the OMB, the Building Authority and the Finance Authority in connection with the Stadium Project or the Convention Center Expansion Project, as applicable, including, without limitation, the fees and expenses of the applicable trustee, paying agent, registrar, tender agent, and remarketing agent, and, to the extent not included within the meaning of Debt Service, 100% of any amount owed by the Finance Authority to any Qualified Hedging Contract Provider or provider of a Reimbursement Obligation. “Expiration Date” means the stated expiration date of the Credit Enhancement or the Liquidity Facility, as it may be extended from time to time as provided in the Credit Enhancement or the Liquidity Facility, or any earlier date on which the Credit Enhancement or the Liquidity Facility terminates at the direction of the Finance Authority, expires or is cancelled. “Extraordinary Event” shall mean the modification, amendment or interpretation of Section 54AA or 6431 of the Code (as such Sections were added by Section 1531 of the American Recovery and Reinvestment Act of 2009) in a manner pursuant to which any Subsidy Payments are reduced or eliminated. C-1-9 “Extraordinary Redemption Price” of any Series 2009 B Bonds to be redeemed shall mean an amount equal to the greater of: (a) the issue price set forth on the inside cover page of the Official Statement for the Series 2009 B Bonds of the principal amount of such Series 2009 B Bonds; or (b) the sum of the present value of the remaining scheduled payments of principal and interest to the maturity date of such Series 2009 B Bonds, not including any portion of those payments of interest accrued and unpaid as of the date on which such Series 2009 B Bonds are to be redeemed, discounted to the date on which such Series 2009 B Bonds are to be redeemed on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate plus 100 basis points; plus, in each case, accrued and unpaid interest on such Series 2009 B Bonds to the redemption date. “Facilities” means the Real Estate, the Convention Center Expansion Facilities and any Additional Project. “Favorable Opinion of Bond Counsel” means, with respect to any action the occurrence of which requires such an opinion, an unqualified Opinion of Counsel, which must be a Bond Counsel, to the effect that such action is permitted under the Authorizing Statute and the Indenture and will not adversely affect the excludability of the interest on the Bonds from gross income for federal income tax purposes (subject to the inclusion of any exceptions contained in the opinion delivered upon original issuance of the Bonds). “Fees and Charges” means fees and charges established by the Finance Authority from time to time pursuant to the Act, which are payable by the Building Authority. “Fees” means (i) the revenues received from the fees imposed under Indiana Code 5-1-17-13(b)(12), and (ii) any amount of fees for National Football League franchised football team license plates on deposit in the State Capital Projects Fund, which are designated by the Budget Director to be transferred from such Fund to the designee of the Board chosen by the Budget Director pursuant to Indiana Code 9-18-49-5(d). “Finance Authority” means the Indiana Finance Authority, a body politic and corporate, not a State agency, but an independent public instrumentality of the State exercising essential public functions, created pursuant to Indiana Code 4-4-11, as amended, or any successor to its functions. “Fiscal Year” means the twelve-month period from July 1 through the following June 30. “Fitch” means Fitch, Inc., and its successors and assigns, except that if such corporation is dissolved or liquidated or no longer performs the functions of a securities rating agency, then the term “Fitch” will be deemed to refer to any other nationally recognized securities rating agency selected by the Finance Authority after consultation with the Remarketing Agent or the Broker-Dealer, as the case may be. “Fixed Rate” means the per annum interest rate on any Bond in the Fixed Rate Mode determined pursuant to the Indenture. “Fixed Rate Bond” means a Bond in the Fixed Rate Mode. “Fixed Rate Mode” means the Mode during which the Bonds bear interest at the Fixed Rate. “Fixed Rate Period” means, for the Bonds in the Fixed Rate Mode, the period from the Mode Change Date upon which the Bonds were converted to the Fixed Rate Mode to, but not including, the maturity date for the Bonds. “Flexible Rate Bond” means a Bond in the Flexible Mode. “Flexible Mode” means the Mode during which the Bonds bear interest at the Flexible Rate. C-1-10 “Flexible Rate” means the per annum interest rate on a Bond in the Flexible Mode determined for such Bond pursuant to the Indenture. The Bonds in the Flexible Mode may bear interest at different Flexible Rates. “Flexible Rate Period” means the period of from one to 397 calendar days (which period must end on a day preceding a Business Day) during which a Flexible Rate Bond bears interest at a Flexible Rate, as established by the Remarketing Agent pursuant to the Indenture. The Bonds in the Flexible Mode may be in different Flexible Rate Periods. “Funds” means the funds created pursuant to the Indenture (other than the Rebate Fund). “General Account” means the account by that name created by the Indenture. “General Fund” means the fund by that name created by the Indenture. “Governmental Obligations” means: (1) direct non-callable obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, to which direct obligation or guarantee the full faith and credit of the United States of America has been pledged; (2) Refcorp interest strips; (3) CATS; (4) TIGRS; (5) STRPS; and (6) defeased municipal bonds rated AAA by S&P or Aaa by Moody’s. Notwithstanding the foregoing, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder, Governmental Obligations, for the purposes set forth in the Indenture, may include other investments with the Series 2008 A Bank. “Ground Lease Capitalized Interest Subaccount” means the subaccount of that name created by the Indenture. “Indenture” shall mean the Amended and Restated Trust Indenture, dated as of May 1, 2015, between the Finance Authority and the Trustee, and all supplements and amendments thereto entered into pursuant thereto. “Interest Accrual Period” means the period during which a Bond accrues interest payable on the next Interest Payment Date applicable thereto. Each Interest Accrual Period will commence on (and include) the last Interest Payment Date to which interest has been paid (or, if no interest has been paid, from the date of original authentication and delivery of the Bonds) to, but not including, the Interest Payment Date on which interest is to be paid. If, at the time of authentication of any Bond, interest is in default or overdue on the Bonds, such Bond will bear interest from the date to which interest has previously been paid in full or made available for payment in full on Outstanding Bonds. Notwithstanding the foregoing, the initial Interest Accrual Period during the Series 2008 A-1 Initial Period shall commence on the Series 2008 A-1 Initial Mode Change Date. “Interest Payment Date,” means each date on which interest is to be paid and is: (1) with respect to the Bonds in the Flexible Mode, each Mandatory Purchase Date applicable thereto; (2) with respect to the Bonds in the Daily Mode or Weekly Mode, the first Business Day of each month; (3) with respect to the Bonds in a Long-Term Mode, the first day of the sixth calendar month following the month in which such Long-Term Mode takes effect, and the first day of each sixth calendar month thereafter or, upon the receipt by the Trustee of a Favorable Opinion of Bond Counsel, any other six-month interval chosen by the Finance Authority (beginning with the first such day which is at least three months after the Mode Change Date) and, with respect to a Term Rate Period, the final day of the current Interest Period if other than a regular six-month interval; (4) (without duplication as to any Interest Payment Date listed above) any Mode Change Date, other than a change between a Daily Mode and a Weekly Mode, and each maturity date; (5) with respect to any Liquidity Provider Bonds, the day set forth in the Reimbursement Agreement; (6) with respect to the Bonds in the Auction Rate Securities Mode, Interest Payment Date has the meaning set forth in the Indenture; and (7) during the Series 2008 A-1 Index Floating Rate Period, the first Business day of each calendar month. “Interest Period” means, for the Bonds in a particular Mode, the period of time that the Bonds bear interest at the rate (per annum) which becomes effective at the beginning of such period, and includes an Auction Rate C-1-11 Securities Rate Period, a Flexible Rate Period, a Daily Rate Period, a Weekly Rate Period, a Term Rate Period, a Fixed Rate Period and a Series 2008 A-1 Index Floating Rate Period. “Investment Earnings” means earnings and profits (after consideration of any accrued interest paid and/or amortization of premium or discount on the investment) on the moneys in the Funds and Accounts established under the Indenture. “Investment Securities” means any of the following, to the extent permitted by State law: (a) Direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America (“U.S. Government Securities”). (b) Direct obligations* of the following federal agencies which are fully guaranteed by the full faith and credit of the United States of America: (i) Export-Import Bank of the United States - Direct obligations and fully guaranteed certificates of beneficial interest; (ii) Federal Housing Administration - debentures; (iii) General Services Administration - participation certificates; (iv) Government National Mortgage Association (“GNMAs”) - guaranteed mortgage-backed securities and guaranteed participation certificates; (v) certificates; (vi) Small Business Administration - guaranteed participation certificates and guaranteed pool U.S. Department of Housing & Urban Development - local authority bonds; and (vii) U.S. Maritime Administration - guaranteed Title XI financings Washington Metropolitan Area Transit Authority - guaranteed transit bonds. (c) Direct obligations† of the following federal agencies which are not fully guaranteed by the faith and credit of the United States of America: (i) Federal National Mortgage Association (“FNMAs”) - senior debt obligations rated Aaa by Moody’s and AAA by S&P; * The following are explicitly excluded from the securities enumerated in clauses (b) and (c): (i) All derivative obligations, including, without limitation, inverse floaters, residuals, interest-only, principalonly and range notes; (ii) Obligations that have a possibility of returning a zero or negative yield if held to maturity; (iii) Obligations that do not have a fixed par value or those whose terms do not promise a fixed dollar amount at maturity or call date; and (iv) Collateralized Mortgage-Backed Obligations (“CMOs”). † The following are explicitly excluded from the securities enumerated in clauses (b) and (c): (i) All derivative obligations, including, without limitation, inverse floaters, residuals, interest-only, principalonly and range notes; (ii) Obligations that have a possibility of returning a zero or negative yield if held to maturity; (iii) Obligations that do not have a fixed par value or those whose terms do not promise a fixed dollar amount at maturity or call date; and (iv) Collateralized Mortgage-Backed Obligations (“CMOs”). C-1-12 (ii) Federal Home Loan Mortgage Corporation (“FHLMCs”) - participation certificates and senior debt obligations rated Aaa by Moody’s and AAA by S&P; (iii) Federal Home Loan Banks - consolidated debt obligations; (iv) Student Loan Marketing Association - debt obligations; and (v) Resolution Funding Corporation - debt obligations. (d) Direct, general obligations of any state of the United States of America or any subdivision or agency thereof whose uninsured and unguaranteed general obligation debt is rated, at the time of purchase, A2 or better by Moody’s and A or better by S&P, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose uninsured and unguaranteed general obligation debt is rated, at the time of purchase, A2 or better by Moody’s and A or better by S&P. (e) Commercial paper (having original maturities of not more than 270 days) rated, at the time of purchase, P-1 by Moody’s and A-1 or better by S&P. (f) Certificates of deposit, savings accounts, deposit accounts or money market deposits in amounts that are continuously and fully insured by the Federal Deposit Insurance Corporation (“FDIC”), including the Bank Insurance Fund and the Savings Association Insurance Fund. (g) Certificates of deposit, deposit accounts, federal funds or bankers’ acceptances (in each case having maturities of not more than 365 days following the date of purchase) of any domestic commercial bank or United States branch office of a foreign bank, provided that such bank’s (i) short-term deposits are rated P-1 by Moody’s and A-1 or better by S&P (not considering holding company ratings) or (ii) long-term ratings are in the two highest Rating Categories by Moody’s and S&P (not considering holding company ratings). (h) Investments in money-market funds rated AAAm or AAAm-G by S&P. (i) State-sponsored investment pools rated AA- or better by S&P. (j) Repurchase agreements that meet the following criteria: (i) A master repurchase agreement or specific written repurchase agreement, substantially similar in form and substance to the Bond Market Association or Securities Industry and Financial Markets Association master repurchase agreement, governs the transaction; (ii) Acceptable providers will consist of (i) registered broker/dealers subject to Securities Investors’ Protection Corporation (“SIPC”) jurisdiction or commercial banks insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed rating of A3/P-1 or better by Moody’s and A-/A-1 or better by S&P, or (ii) domestic structured investment companies approved by the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder, and rated Aaa by Moody’s and AAA by S&P; (iii) The repurchase agreement will limit acceptable securities to U.S. Government Securities and to the obligations of GNMA, FNMA or FHLMC described in clauses (b)(iv), (c)(i) and (c)(ii) above. The fair market value of the securities in relation to the amount of the repurchase obligation, including principal and accrued interest, is equal to a collateral level of at least 102% for U.S. Government Securities, GNMAs, FNMAs or FHLMCs. The repurchase agreement will require (i) the Trustee or the Agent (as defined in clause (j)(iv) below) to value the collateral securities no less frequently than weekly, (ii) the delivery of additional securities if the fair market value of the securities is below the required level on any valuation date, and (iii) liquidation of the repurchase securities if any deficiency in the required percentage is not restored within two (2) business days of such valuation; C-1-13 (iv) The repurchase securities will be delivered free and clear of any lien to the Trustee or to an independent third party acting solely as agent (“Agent”) for the Trustee, and such Agent is (i) a Federal Reserve Bank or (ii) a bank which is a member of the FDIC and which has combined capital, surplus and undivided profits or, if appropriate, a net worth, of not less than $50 million, and the Trustee will have received written confirmation from such third party that such third party holds such securities, free and clear of any lien, as agent for the Trustee; (v) The repurchase agreement will require termination thereof if the counterparty’s ratings are suspended, withdrawn or fall below A3 or P-1 from Moody’s, or A- or A-1 from S&P. Within ten (10) days, the counterparty will repay the principal amount plus any accrued and unpaid interest on the investments; (vi) A perfected first security interest in the repurchase securities will be created for the benefit of the Trustee, and the Finance Authority and the Trustee will receive an opinion of counsel as to the perfection of the security interest in such repurchase securities and any proceeds thereof; (vii) The repurchase agreement will have a term of one year or less, or will be due on demand; and (viii) The repurchase agreement will establish the following as events of default, the occurrence of any of which will require the immediate liquidation of the repurchase securities, unless the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder, directs otherwise: (A) insolvency of the broker/dealer or commercial bank serving as the counterparty under the repurchase agreement; (B) failure by the counterparty to remedy any deficiency in the required collateral level or to satisfy the margin maintenance call under clause (j)(iii) above; or (C) failure by the counterparty to repurchase the repurchase securities on the specified date for repurchase. (k) Investment agreements (also referred to as guaranteed investment contracts) that meet the following criteria: (i) A master agreement or specific written investment agreement governs the transaction; (ii) Acceptable providers of uncollateralized investment agreements will consist of (a) domestic FDIC-insured commercial banks, or U.S. branches of foreign banks, rated at least Aa2 by Moody’s and AA by S&P; (b) domestic insurance companies rated Aaa by Moody’s and AAA by S&P; and (c) domestic structured investment companies approved by the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder, and rated Aaa by Moody’s and AAA by S&P; (iii) Acceptable providers of collateralized investment agreements will consist of (a) registered broker/dealers subject to SIPC jurisdiction, if such broker/dealer has an uninsured, unsecured and unguaranteed rating of Al or better by Moody’s and A+ or better by S&P; (b) domestic FDIC-insured commercial banks, or U.S. branches of foreign banks, rated at least Al by Moody’s and A+ by S&P; (c) domestic insurance companies rated at least Al by Moody’s and A+ by S&P; and (d) domestic structured investment companies approved by the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder, and rated Aaa by Moody’s and AAA by S&P. Required collateral levels are as set forth in clause (k)(vi) below; C-1-14 (iv) The investment agreement will provide that if the provider’s ratings fall below Aa3 by Moody’s or AA- by S&P, the provider will within 10 days either: (a) repay the principal amount plus any accrued unpaid interest on the investment; or (b) deliver Permitted Collateral as provided below in clause (k)(vi); (v) The investment agreement must provide for termination thereof if the provider’s ratings are suspended, withdrawn or fall below A3 from Moody’s or A- from S&P. Within 10 days, the provider will repay the principal amount plus any accrued unpaid interest on the agreement, without penalty to the Finance Authority; (vi) The investment agreement will provide for the delivery of collateral described in clause (k)(vi)(A) or (B) below (“Permitted Collateral”), which will be maintained at the following collateralization levels at each valuation date: (A) U.S. Government Securities at 104% of principal plus accrued interest; or (B) Obligations of GNMA, FNMA or FHLMC (described in clauses (b)(iv), (c)(i) and (c)(ii) above) at 105% of principal and accrued interest; (vii) The investment agreement will require the Trustee or the Agent to determine the market value of the Permitted Collateral not less than weekly and notify the investment agreement provider on the valuation day of any deficiency. Permitted Collateral may be released by the Trustee to the provider only to the extent that there are excess amounts over the required levels. Market value, with respect to collateral, may be determined by any of the following methods: (A) the last quoted “bid” price as shown in Bloomberg, Interactive Data Systems, Inc., The Wall Street Journal or Reuters; (B) valuation as performed by a nationally recognized pricing service, whereby the valuation method is based on a composite average of various bid prices; or (C) the lower of two bid prices by nationally recognized dealers. Such dealers or their parent holding companies will be rated investment grade and will be market makers in the securities being valued; (viii) Securities held as Permitted Collateral will be free and clear of all liens and claims of third parties, held in a separate custodial account and registered in the name of the Trustee or the Agent; (ix) The provider will grant the Trustee or the Agent a perfected first security interest in any collateral delivered under an investment agreement. For investment agreements collateralized initially and in connection with the delivery of Permitted Collateral under clause (k)(vi) above, the Trustee and the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder, will receive an opinion of counsel as to the perfection of the security interest in the collateral; (x) The investment agreement will provide that moneys invested under the agreement must be payable and putable at par to the Trustee without condition, breakage fee or other penalty, upon not more than two business days’ notice, or immediately on demand for any reason for which the funds invested may be withdrawn from the applicable fund or account established under the authorizing document, as well as the following: (A) In the event of a deficiency in the General Account of the General Fund; (B) Upon acceleration after an Event of Default; C-1-15 (C) Upon refunding of the Bonds in whole or in part; (D) Reduction of the Debt Service Reserve Requirement for the Bonds; or (E) If a determination is later made by a nationally recognized bond counsel that investments must be yield-restricted. Notwithstanding the foregoing, the agreement may provide for a breakage fee or other penalty that is payable in arrears and not as a condition of a draw by the Trustee if the Finance Authority’s obligation to pay such fee or penalty is subordinate to its obligation to pay debt service on the Bonds and to make deposits to the Debt Service Reserve Fund; (xi) The investment agreement will establish the following as events of default, the occurrence of any of which will require the immediate liquidation of the investment securities: (A) Failure of the provider or the guarantor (if any) to make a payment when due or to deliver Permitted Collateral of the character, at the times or in the amounts described above; (B) agreement; Insolvency of the provider or the guarantor (if any) under the investment (C) Failure by the provider to remedy any deficiency with respect to required Permitted Collateral; (D) agreement; (E) Failure by the provider to make a payment or observe any covenant under the The guaranty (if any) is terminated, repudiated or challenged; or (F) Any representation or warranty furnished to the Trustee or the Finance Authority in connection with the agreement is false or misleading; and (xii) The investment agreement must incorporate the following general criteria: (A) “Cure periods” for payment default will not exceed two business days; (B) The agreement will provide that the provider will remain liable for any deficiency after application of the proceeds of the sale of any collateral, including costs and expenses incurred by the Trustee or the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder; (C) Neither the agreement or guaranty agreement, if applicable, may be assigned (except to a provider that would otherwise be acceptable under these guidelines) or amended without the prior consent of the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder; (D) If the investment agreement is for the Debt Service Reserve Account of the Debt Service Reserve Fund, reinvestments of funds will be required to bear interest at a rate at least equal to the original contract rate; (E) The provider will be required to immediately notify the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the C-1-16 Series 2008 A Bank is not then in default thereunder, and the Trustee of any event of default or any suspension, withdrawal or downgrade of the provider’s ratings; (F) The agreement will be unconditional and will expressly disclaim any right of set-off or counterclaim; and (G) The agreement must require the provider to submit information reasonably requested by the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder, including the balance invested with the provider, type and market value of collateral and other pertinent information. (l) Forward delivery agreements in which the securities delivered mature on or before each interest payment date (for the General Account of the General Fund or the Debt Service Reserve Account or the Debt Service Reserve Fund) or draw down date (the Proceeds Account of the Project Fund) that meet the following criteria: (i) A specific written investment agreement governs the transaction; (ii) Acceptable providers will be limited to (A) any registered broker/dealer subject to the Securities Investors’ Protection Corporation jurisdiction, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation rated A3/P-1 or better by Moody’s and A-/A-1 or better by S&P; (B) any commercial bank insured by the FDIC, if such bank has an uninsured, unsecured and unguaranteed obligation rated A3/P-l or better by Moody’s and A-/A-1 or better by S&P; and (iii) domestic structured investment companies approved by the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder, and rated Aaa by Moody’s and AAA by S&P; (iii) The forward delivery agreement will provide for termination or assignment (to a qualified provider under the Indenture) of the agreement if the provider’s ratings are suspended, withdrawn or fall below A3 or P-1 from Moody’s or A- or A-1 from S&P. Within 10 days, the provider will fulfill any obligations it may have with respect to shortfalls in market value. There will be no breakage fee payable to the provider in such event; (iv) Permitted securities include the investments listed in clauses (a), (b) and (c) above; and (v) The forward delivery agreement includes the following provisions: (A) The permitted securities must mature at least one (1) business day before a debt service payment date or scheduled draw. The maturity amount of the permitted securities must equal or exceed the amount required to be in the applicable fund on the applicable valuation date; (B) The agreement includes market standard termination provisions, including the right to terminate for the provider’s failure to deliver qualifying securities or otherwise to perform under the agreement. There is no breakage fee or penalty payable to the provider in such event; (C) Any breakage fees are payable only on debt service payment dates and are subordinated to the payment of replenishments of the General Account of the General Fund and the Debt Service Reserve Account of the Debt Service Reserve Fund; (D) The provider must submit at closing a bankruptcy opinion to the effect that upon any bankruptcy, insolvency or receivership of the provider, the securities will not be considered to be a part of the provider’s estate, and otherwise acceptable to the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder; and C-1-17 (E) The agreement may not be assigned (except to a provider that would otherwise be acceptable under these guidelines) or amended without the prior written consent of the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder. (m) Forward delivery agreements in which the securities delivered mature after the funds may be required but provide for the right of the Finance Authority or the Trustee to put the securities back to the provider under a put, guaranty or other hedging arrangement, only with the prior written consent of the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder. (n) Maturity of investments is governed by the following: (i) Investments of monies (other than the Debt Service Reserve Account of the Debt Service Reserve Fund) are in securities and obligations maturing not later than the dates on which such monies will be needed to make payments; (ii) Investments are considered as maturing on the first date on which they are redeemable without penalty at the option of the holder or the date on which the Trustee may require their repurchase pursuant to repurchase agreements; and (iii) Investments of monies in the Debt Service Reserve Account of the Debt Service Reserve Fund not payable upon demand are restricted to maturities of five years or less. “Junior Obligations” means any lease, bond, note or other indebtedness of the Board, to which the Board, pursuant to a supplement to the Revenue Deposit Agreement, pledges the funds pledged under the Revenue Deposit Agreement to the repayment of such lease, bond, note or other indebtedness, which pledge, however, is subordinate and junior to the pledge of such funds to the repayment of the Obligations. “Lease” means the Amended and Restated Lease, dated as of August 1, 2008, between the Building Authority and the OMB, and all supplements and amendments thereto. “Lease Rental Payment Account” means the Lease Rental Payment Account created pursuant to the Revenue Deposit Agreement. “Lease Year” means the twelve month period beginning on July 1 of any year and ending on the following June 30. “LIBOR” means the rate for deposit in U.S. Dollars for a period of three months which appears on the Reuters Screen LIBOR01 Page as of 11:00 a.m., London time, on the day that is two London Banking Days preceding any date of determination. “LIBOR Index Rate” means, for any day, the London interbank offered rate for U.S. dollar deposits for a one-month period, as reported on Reuters LIBOR01 Page (or any successor) as of 11:00 a.m., London time, on such day, or if such day is not a London Banking Day, on the next preceding London Banking Day; provided that, if any such rate is not reported on a London Banking Day, LIBOR Index Rate shall mean the rate as determined by the Calculation Agent from another recognized source or interbank quotation. “LIBOR Index Rate Conversion Date” means (i) the date on which the Series 2008 A-1 Bonds begin to bear interest at the LIBOR Index Rate, or (ii) if the Series 2008 A-1 Bonds have previously borne interest at the LIBOR Index Rate during a LIBOR Index Rate Period then ending, the Bank Purchase Date occurring at the end fo the then ending LIBOR Index Rate Period. C-1-18 “LIBOR Index Rate Period” means each period from and including a LIBOR Index Rate Conversion Date to but excluding the earliest of: (i) the immediately succeeding Bank Purchase Date; (ii) a Mode Change Date; and (iii) the Maturity Date. “LIBOR Index Reset Date” means Thursday of each week. “Liquidity Facility” means any letter of credit, line of credit, standby purchase agreement or other instrument then in effect which provides for the payment of the purchase price of Bonds upon the tender thereof in the event remarketing proceeds are insufficient therefor, and means, (1) with respect to the Series 2008 A-1 Bonds, a Series 2008 A-1 Liquidity Facility, and (2) with respect to the Series 2008 A-2 Bonds, the Series 2008 A-2 Liquidity Provider. “Liquidity Facility Purchase Account” means the account by that name created by the Indenture. “Liquidity Provider” means any bank, insurance company, pension fund, other financial institution, or body politic and corporate of the State which provides a Liquidity Facility or Alternate Liquidity Facility for the Bonds, and means, (1) with respect to the Series 2008 A-1 Bonds, a Series 2008 A-1 Liquidity Provider, and (2) with respect to the Series 2008 A-2 Bonds, the Series 2008 A-2 Liquidity Provider. “Liquidity Provider Bonds” means any Bonds purchased by the Liquidity Provider with funds drawn on or advanced under the Liquidity Facility. “Loan” means the loan by the Finance Authority to the Building Authority of the proceeds of the sale of the Bonds. “Loan Agreement” means the Loan Agreement, dated as of August 1, 2008, between the Finance Authority and the Building Authority, and all amendments and supplements thereto. “Loan Payments” means the amounts required to be paid by the Building Authority in repayment of the Loan pursuant to the Loan Agreement. “Long-Term Mode” means a Term Rate Mode or a Fixed Rate Mode. “Majority of Liquidity Providers” means (1) the Liquidity Providers which provide Liquidity Facilities (excluding, if the Finance Authority is the Series 2008 A-2 Liquidity Provider, the Series 2008 A-2 Liquidity Facility and the Finance Authority as the Series 2008 A-2 Liquidity Provider), which Liquidity Facilities are in full force and effect and the Liquidity Providers of which are not in default thereunder, for Bonds Outstanding, and (ii) the Series 2008 A-1 Index Floating Rate Bank owning Bonds outstanding, which collectively relate to an aggregate principal amount equal to more than 50% of the aggregate principal amount of all Bonds Outstanding under the Indenture. “Make-Whole Redemption Price” of any Series 2009 B Bonds to be redeemed shall mean an amount equal to the greater of: (a) 100% of the principal amount of such Series 2009 B Bonds; or (b) the sum of the present value of the remaining scheduled payments of principal and interest to the maturity date of such 2009 B Bonds, not including any portion of those payments of interest accrued and unpaid as of the date on which such 2009 B Bonds are to be redeemed, discounted to the date on which such 2009 B Bonds are to be redeemed on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate plus 40 basis points; plus, in each case, accrued and unpaid interest on such Series 2009 B Bonds to the redemption date. C-1-19 “Mandatory Purchase Date” means: (1) with respect to a Flexible Rate Bond, the first Business Day following the last day of each Flexible Rate Period with respect to such Bond, (2) for Bonds in the Term Rate Mode, the first Business Day following the last day of each Term Rate Period, (3) any Mode Change Date (except a change in Mode between the Daily Mode and the Weekly Mode), (4) any Substitution Date, (5) the fifth Business Day prior to the Expiration Date (other than as a result of an Automatic Termination Event), (6) the date specified by the Trustee following the occurrence of an event of default (other than an Automatic Termination Event) under the Reimbursement Agreement, which date is a Business Day not less than 20 days after the Trustee’s receipt of notice of such event of default from the Credit Provider or the Liquidity Provider and in no event later than the day preceding the termination date specified by the Credit Provider or the Liquidity Provider, (7) for Bonds in the Daily Mode or Weekly Mode, any Business Day specified by the Finance Authority not less than 20 days after the Trustee’s receipt of such notice, (8) with respect to each Series 2008 A-1 Bond, the applicable Series 2008 A-1 Bank Purchase Date, (9) with respect to each Series 2008 A-1 Bond then bearing interest at a Series 2008 A-1 Index Floating Rate, following the occurrence of an Event of Default under the Series 2008 A-1 Continuing Covenant Agreement and written direction from the Series 2008 A-1 Index Floating Rate Bank to the Trustee to call the Series 2008 A-1 Bonds for mandatory tender for purchase, the third Business Day after the Trustee receives such direction, and (10) with respect to each Series 2008 A-1 Bond then bearing interest at a Series 2008 A-1 Index Floating Rate, the date which is the last Business Day prior to the 120th day following a Taxable Date. “Market Agent” shall mean any Person appointed by the Finance Authority to serve as market agent in connection with a conversion to a new Series 2008 A-1 Index Floating Rate Period. “Maximum Federal Corporate Tax Rate” means the maximum rate of income taxation imposed on corporations pursuant to Section 11(b) of the Code, as in effect from time to time (or, if as a result of a change in the Code, the rate of income taxation imposed on corporations generally shall not be applicable to the Series 2008 A-1 Index Floating Rate Bank, the maximum statutory rate of federal income taxation which could apply to the Series 2008 A-1 Index Floating Rate Bank). “Maximum Rate” means, with respect to all Bonds, other than Liquidity Provider Bonds and the Series 2008 A-1 Bonds bearing interest at a Series 2008 A-1 Index Floating Rate, a rate of interest of 12% per annum, and with respect to Liquidity Provider Bonds, the rate specified in the Liquidity Facility, and, with respect to Series 2008 A-1 Bonds bearing interest at a Series 2008 A-1 Index Floating Rate, the Maximum Series 2008 A-1 Index Floating Rate, and in no event will such rates exceed the highest rate allowed by law. “Maximum Series 2008 A-1 Index Floating Rate” means the maximum rate permitted by law. “Mode” means, as the context may require, the Auction Rate Securities Mode, the Flexible Mode, the Daily Mode, the Weekly Mode, the Term Rate Mode, the Fixed Rate Mode or the Series 2008 A-1 Index Floating Rate Mode. “Mode Change Date” means with respect to the Bonds in a particular Mode, the day on which another Mode for the Bonds begins (including, without limitation, each date on which the then current Series 2008 A-1 Index Floating Rate Period is changed to a new Series 2008 A-1 Index Floating Rate Period). “Mode Change Notice” means the notice from the Finance Authority to the other Notice Parties of the Finance Authority’s intention to change the Mode with respect to the Bonds. “Moody’s” means Moody’s Investors Service, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and its successors and assigns, except that if such corporation is dissolved or liquidated or no longer performs the functions of a securities rating agency, then the term “Moody’s” will be deemed to refer to any other nationally recognized securities rating agency selected by the Finance Authority after consultation with the Remarketing Agent or Broker-Dealer, as the case may be. “MOU” shall mean the Memorandum of Understanding Re: Flow of Funds Interpretation and Implementation, dated as of September 1, 2010. C-1-20 “New Stadium” means the new stadium facility for amateur and professional sporting and other convention and entertainment events and all of the parking facilities constructed in connection therewith. “Note” or “Notes” means the Series 2008 A Building Authority Note, the Series 2009 A Building Authority Note, the Series 2009 B Building Authority Note, the Series 2015 A Building Authority Note and any Additional Building Authority Notes and any Notes issued in exchange therefor pursuant to the Loan Agreement. “Notice Parties” means the Trustee, the Paying Agent, the Tender Agent, the Remarketing Agent, the Auction Agent, the Broker-Dealer, the Credit Provider, the Liquidity Provider, the Series 2008 A-1 Index Floating Rate Bank and the Finance Authority. “Obligations” means the Stadium Sublease and any Additional Obligations. “Official Statement” shall mean this Official Statement. “OMB” means the Indiana Office of Management and Budget, created pursuant to Indiana Code 4-3-22, or any successor to its functions. “Opinion of Bond Counsel” means an Opinion of Counsel by a nationally recognized firm experienced in matters relating to the tax exemption for interest payable on obligations of states and their instrumentalities and political subdivisions under federal law and which is acceptable to the Finance Authority and the Trustee. “Opinion of Counsel” means a written legal opinion from a firm of attorneys experienced in the matters to be covered in the opinion. “Outstanding” or “Bonds Outstanding” means all Bonds which have been authenticated and delivered by the Trustee under the Indenture, including Bonds held by the Finance Authority, except: (a) Bonds canceled after purchase in the open market or because of payment at or redemption prior to maturity; (b) Bonds deemed paid under the Indenture; and (c) Bonds in lieu of which other Bonds have been authenticated under the Indenture. “Outstanding Stadium Bonds” means the Lease Appropriation Bonds (Stadium Project), Series 2005 A, the Lease Appropriation Bonds (Stadium Project), Series 2007 A, the Lease Appropriation Bonds (Stadium Project), Series 2008 A, and the Lease Appropriation Refunding Bonds (Stadium Project), Series 2015 A, issued by the Finance Authority under the Stadium Trust Indenture. “Owner” means the registered owner of a Bond, including the Securities Depository, if any, or its nominee. “Parity Hedging Contract Obligation” means the Finance Authority’s obligation to pay any amount under any Qualified Hedging Contract, which obligation is secured by a pledge of the Trust Estate on a parity with the lien of the pledge of the Trust Estate created by the Indenture to secure the Bonds. “Parity Reimbursement Obligation” means any Reimbursement Obligation (which may include interest calculated at a rate higher than the interest rate on the related Bonds) which is secured by a pledge of the Trust Estate on a parity with the lien of the pledge of the Trust Estate created by the Indenture to secure the Bonds and any Parity Hedging Contract Obligations. “Paying Agent” means the commercial bank, trust company or other entity which may from time to time be appointed to serve as Paying Agent as provided in the Indenture. Until such time as an alternate Paying Agent is appointed, the Paying Agent will be the Trustee. C-1-21 “Payment Date” means an Interest Payment Date, a Principal Payment Date or any other date on which the Finance Authority is required to pay Debt Service. “Permitted Encumbrances” means (1) utility, access and other easements, licenses and rights of way, covenants, conditions and restrictions, and other exceptions to title, which in each case will not materially and adversely affect the construction, development and operation of the Convention Center Expansion Project or materially impair the interest of the Building Authority or the OMB in, or its use of, the Facilities, and (2) any liens which are not prohibited under the Development Agreement, but only if, in the opinion of counsel satisfactory to the Trustee, such liens do not materially impair the interest of the Building Authority or the OMB in, or its use of, the Facilities. “Person” means an individual, a corporation, a partnership, an association, a joint venture, a trust, an unincorporated organization or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. “Pledged Property” means the following rights, interests, properties, monies and other assets, pledged by the Building Authority to secure the payment of the Notes and the performance of the obligations of the Building Authority under the Loan Agreement: (i) all rights, titles and interests of the Building Authority in the Lease, the Sublease and the Revenue Deposit Agreement; (ii) any and all other property of every kind and nature from time to time hereafter conveyed, pledged, assigned or transferred as and for additional security under the Loan Agreement by the Building Authority or by anyone on its behalf to the Finance Authority or the Trustee, including any funds of the Building Authority, other than those on deposit in the Rebate Fund, held by the Trustee as security for the Bonds; and (iii) all moneys and securities, other than those on deposit in the Rebate Fund, from time to time held by the Finance Authority or the Trustee under the terms of the Loan Agreement or the Indenture. “Principal Installment” means, as of any date of calculation and with respect to any Series of Bonds, so long as any Bonds of such Series are Outstanding, (i) the principal amount of Bonds of such Series, including the principal amount of any Put Bonds tendered for payment and purchased in lieu of redemption prior to the redemption date thereof, due (or so tendered for payment and not purchased in lieu of redemption) on a certain future date for which no mandatory sinking fund requirements have been established, or (ii) the unsatisfied balance (determined as provided in the Indenture) of any mandatory sinking fund requirements due on a certain future date for Bonds of such Series, or (iii) if such future dates coincide as to different Bonds of such Series, the sum of such principal of Bonds of such Series and of such unsatisfied balance of mandatory sinking fund requirements due on such future date. “Principal Payment Date” means any date upon which the principal amount of Bonds is due under the Indenture, including any maturity date of the Bonds, any Redemption Date or the date the maturity of any Bond is accelerated pursuant to the terms the Indenture or otherwise. “Prior Revenue Deposit Agreement” means the Third Amended and Restated Capital Improvement Bond Fund Revenue Deposit Agreement, dated as of September 1, 2007, between the Board and The Bank of New York Mellon Trust Company, N.A. (successor to J.P. Morgan Trust Company, National Association, as successor in interest to NBD Bank, N.A.), as deposit trustee, as amended and supplemented from time to time in accordance with the terms thereof. “Prior Revenues” means the revenues subject to the Prior Revenue Deposit Agreement. “Proceeds Account” means the account by that name created by the Indenture. C-1-22 “Program” means the program for purchasing Building Authority Notes by the Finance Authority pursuant to the Act and the Loan Agreement for the purpose of providing loans to the Building Authority, which will be used, together with other available funds, to pay the costs of the Convention Center Expansion Project. “Program Expenses” shall mean all of the fees and expenses of the Trustee, the Finance Authority and the Building Authority, moneys remitted by the Finance Authority to the Trustee for deposit in the Capitalized Interest Account of the General Fund from a source other than proceeds of the Bonds or which immediately prior to such remittance was not part of the Trust Estate, costs of determining the amount rebatable, if any, to the United States of America under the Original Indenture and all fees and expenses owing to the Series 2008 A Bank by the Finance Authority in connection with the Bonds pursuant to the Series 2008 A Standby Purchase Agreement or otherwise, other than any amount owing to reimburse the Series 2008 A Bank for amounts used to pay the Purchase Price or accrued interest on any Liquidity Provider Bond pursuant to the Series 2008 A Standby Purchase Agreement, all to the extent properly allocable to the Program. “Project” means the Stadium Project, the Convention Center Expansion Project and any addition or improvement thereto financed pursuant to any Additional Obligation. “Project Fund” means the fund by that name created under the Indenture. “Public Finance Director” means the public finance director of the State appointed by the Governor of the State pursuant to Indiana Code 4-4-11-9, as amended, or if, said public finance director will be abolished, the person, board, body, commission or agency succeeding to the principal functions thereof. “Purchase Account” means the account by that name created by the Indenture. “Purchase Date” means (i) for a Bond in the Daily Mode or the Weekly Mode, any Business Day selected by the Beneficial Owner of said Bond pursuant to the provisions of the Indenture, and (ii) any Mandatory Purchase Date. “Purchase Fund” means the fund by that name created by the Indenture. “Purchase Price” means an amount equal to the principal amount of any Bonds purchased on any Purchase Date, plus accrued interest to the Purchase Date (unless the Purchase Date is an Interest Payment Date, in which case the Purchase Price will not include accrued interest, which will be paid in the normal course). “Put Bonds” means Bonds which by their terms may be tendered by, and at the option of, the Owners, for payment by the Finance Authority prior to their stated maturity. “Qualified Hedging Contract” means, to the extent from time to time permitted by law, any financial arrangement (i) which is entered into by the Finance Authority with an entity that is a Qualified Hedging Contract Provider at the time the arrangement is entered into, (ii) which is a cap, floor or collar; an interest rate swap, including a forward rate or future rate swap; asset, index, price or market linked transaction or agreement; other exchange or rate protection transaction agreement; other similar transaction (however designated); or any combination thereof; or any option with respect thereto, executed by the Finance Authority for the purpose of moderating interest rate fluctuations or otherwise, and (iii) which has been designated in writing by an Authorized Officer of the Finance Authority as a Qualified Hedging Contract (which writing specifies, in the case of a Qualified Hedging Contract that is entered into in connection with any Bonds, the Bonds with respect to which such Qualified Hedging Contract is entered into). “Qualified Hedging Contract Provider” means an entity whose senior unsecured long-term debt obligations, financial program rating, counterparty rating or claims paying ability is rated, or whose payment obligations under a financial arrangement of the type referred in clause (ii) of the definition of Qualified Hedging Contract are guaranteed or insured by an entity whose senior unsecured long-term obligations, financial program rating, counterparty rating or claims paying ability is rated, on the date a Qualified Hedging Contract is entered into, at least C-1-23 as high as the third highest Rating Category of each Rating Agency, but in no event lower than any Rating Category designated by each such Rating Agency for the Bonds in the absence of any Credit Enhancement. “Rate Determination Date” means any date on which the interest rate on Bonds is determined, which, (i) in the case of the Flexible Mode, is the first day of an Interest Period; (ii) in the case of the Daily Mode, is each Business Day commencing with the first day (which must be a Business Day) the Bonds become subject to the Daily Mode; (iii) in the case of any conversion to the Weekly Mode, is no later than the Business Day prior to the Mode Change Date, and, thereafter, is each Tuesday or Wednesday, as set forth for each series of Bonds in a Supplemental Indenture or notices of any change in the Rate Determination Date given in the manner set forth in the Indenture with respect to the Series 2008 A Bonds, or if Tuesday or Wednesday, respectively, is not a Business Day, then the Business Day next succeeding such Tuesday or Wednesday, respectively; (iv) in the case of the Term Rate Mode, is a Business Day no earlier than 15 Business Days and no later than the Business Day next preceding the first day of an Interest Period, as determined by the Remarketing Agent; and (v) in the case of the Fixed Rate Mode, is a date determined by the Remarketing Agent which is at least one Business Day prior to the Mode Change Date. While in the Weekly Mode, the Rate Determination Date for the Series 2008 A Bonds is, until changed as described above, each Wednesday, or if Wednesday is not a Business Day, then the Business Day next succeeding such Wednesday. “Rating Agencies” means any of Moody’s, S&P or Fitch, which is then providing a rating on the Bonds. “Rating Category” means one of the generic rating categories of any Rating Agency without regard to any refinement or gradation of such rating by a numerical modifier or otherwise; provided, however, that for purposes of the Indenture any requirement that an obligation be rated in the highest short-term Rating Category will be deemed to be satisfied if such obligation is rated A-1 or better by S&P, VMIG 1 or better by Moody’s or F-1 or better by Fitch. “Rating Confirmation Notice” means a notice from Moody’s, S&P or Fitch, as appropriate, confirming that the rating on the Bonds will not be lowered or withdrawn (other than a withdrawal of a short-term rating upon a change to a Long-Term Mode) as a result of the action proposed to be taken. “Real Estate” means the real property subject to the Lease and the Sublease, upon which the Convention Center Expansion Facilities were constructed. “Real Estate Initial Term” means the period of time commencing on the date of execution of the Lease and ending through and including January 1, 2011. “Rebate Fund” means the fund by that name created under the Indenture. “Record Date” means (i) with respect to Bonds in a Short-Term Mode or an Auction Rate Securities Mode, the last Business Day before an Interest Payment Date; and (ii) with respect to Bonds in a Long-Term Mode, the fifteenth day (whether or not a Business Day) of the month next preceding each Interest Payment Date. “Redemption Account” means the account by that name created by the Indenture. “Redemption Date” means the date fixed for redemption of Bonds subject to redemption in any notice of redemption given in accordance with the terms of the Indenture. “Redemption Price” means an amount equal to the principal of and premium, if any, and accrued interest, if any, on the Bonds to be paid on the Redemption Date. “Refunding Bonds” means Bonds issued pursuant to the Indenture to refund all or any part of the Outstanding Bonds. “Regional County Food and Beverage Tax” means the portion of the food and beverage taxes authorized under Indiana Code 6-9-35, as amended, and any successor provisions, described in the first two sentences of C-1-24 Indiana Code 6-9-35-12(a) and deposited in the Stadium and Convention Special Fund pursuant to the Revenue Deposit Agreement. “Reimbursement Agreement” means any reimbursement agreement, credit agreement, line of credit agreement, standby bond purchase agreement or other agreement, by and between the Credit Provider or Liquidity Provider, as applicable, and the Finance Authority, and means, (1) with respect to the Series 2008 A-1 Bonds, a Series 2008 A-1 Liquidity Facility or the Series 2008 A-1 Continuing Covenant Agreement, as applicable, and (2) with respect to the Series 2008 A-2 Bonds, the Series 2008 A-2 Liquidity Facility. “Reimbursement Obligations” means all Reimbursement Obligations issued or entered into pursuant to the Indenture, including any Reimbursement Obligations hereafter delivered in lieu of or in substitution for then existing Reimbursement Obligations pursuant to the Indenture and any Supplemental Indenture authorizing such Reimbursement Obligations, and means, (1) with respect to the Series 2008 A-1 Bonds, all obligations of the Finance Authority under a Series 2008 A-1 Liquidity Facility or the Series 2008 A-1 Continuing Covenant Agreement, as applicable, and (2) with respect to the Series 2008 A-2 Bonds, all obligations of the Finance Authority, as the issuer of the Series 2008 A-2 Bonds, under the Series 2008 A-2 Liquidity Facility. “Remarketing Agent” means collectively or separately, as the context requires, J.P. Morgan Securities LLC, or any other investment banking firm which may be substituted in any of their places as provided in the Indenture. “Remarketing Agent Fee” means collectively or separately, as appropriate and where the context requires, the fee for the services performed by each Remarketing Agent under each Remarketing Agreement. “Remarketing Agreement” means collectively or separately, as the context requires, at any time, the Remarketing Agreements then in effect between the Finance Authority and each Remarketing Agent, as each may be amended or supplemented from time to time in accordance with its terms. “Remarketing Proceeds Account” means the account by that name created by the Indenture. “Representation Letter” means the Blanket Issuer Letter of Representations, dated May 15, 2005, from the Finance Authority to the Securities Depository, and the Letters of Representation from the Paying Agent, the Tender Agent, the Remarketing Agent, if any, and the Broker-Dealer, if any, to the Securities Depository in connection with the issuance of the Bonds in a book-entry system, each as supplemented and amended from time to time. “Requirement” means, as to any particular fund, account or subaccount created under the Revenue Deposit Agreement, the amount required to be deposited and maintained in such fund, account or subaccount as directed by the Revenue Deposit Agreement. “Reserve Account” means the Reserve Account created pursuant to the Revenue Deposit Agreement. “Reserve Requirement” means, collectively, with respect to the Stadium Bonds and the Bonds, upon the date of issue of each series of such bonds, an amount equal to the least of: (i) 10% of the stated principal amount of such bonds, provided that if any series of such bonds has more than a de minimis amount of original issue discount or premium, the issue price of such series of bonds (net of pre-issuance accrued interest) shall be used to measure the 10% limitation in lieu of the stated principal amount of such series of bonds; (ii) the maximum annual Debt Service on such bonds; or (iii) 125% of the average annual Debt Service on such bonds, and thereafter, if less than such amount, shall be the maximum annual Debt Service on such bonds then Outstanding in the present or any succeeding Lease Year. For purposes of this definition, “Debt Service” shall be calculated by reference to the definition of Debt Service in the Indenture or the Stadium Trust Indenture, as applicable. “Revenue Deposit Agreement” means the Restated Stadium and Convention Special Fund Revenue Deposit Agreement, dated as of December 7, 2010, by and among the Board, the Building Authority, the OMB, the Finance Authority, the Budget Director and the Deposit Trustee, and all supplements and amendments thereto. C-1-25 “Revenues” means, in the Indenture, the Funds and Accounts and all income, revenues and profits of the Funds and Accounts referred to in the granting clauses hereof, including, without limitation, all Building Authority Note Payments and any payments received pursuant to a Reimbursement Obligation (other than a Liquidity Facility) or a Qualified Hedging Contract, by the Trustee pursuant to the Sublease or by the Trustee from the Deposit Trustee pursuant to the Revenue Deposit Agreement or from the Office of Management and Budget pursuant to the Lease, and any Subsidy Payments. “Revenues” means, in the Revenue Deposit Agreement, revenues, funds or money received by the Board and pledged by the Board through the Revenue Deposit Agreement as of the date of its execution or through a supplement or amendment to the Revenue Deposit Agreement, including the Excise Tax Revenues, the Fees and the Additional Marion County Professional Sports Development Area Revenues. “S&P” means Standard & Poor’s Ratings Services, a division of McGraw-Hill, duly organized and existing under and by virtue of the laws of the State of New York, and its successors and assigns, except that if such corporation is dissolved or liquidated or no longer performs the functions of a securities rating agency, then the term “S&P” will be deemed to refer to any other nationally recognized securities rating agency selected by the Finance Authority after consultation with the Remarketing Agent or the Broker-Dealer, as the case may be. “Securities Depository” means The Depository Trust Company, and such other securities depository as the Finance Authority may designate in a certificate of the Finance Authority delivered to the Trustee. “Senior Lease” means the Senior Lease as defined in clause (i) of the definition of Existing Obligations. “Series of Bonds” or “Bonds of a Series” or “Series” or words of similar meaning means any Series of Bonds authorized by the Indenture or by a Supplemental Indenture. “Series 2008 A Bank” means, collectively or separately, as the context requires, (1) a Series 2008 A-1 Liquidity Provider and (2) the Series 2008 A-2 Liquidity Provider. “Series 2008 A Bank Fee” shall mean, as appropriate and where the context requires, the fees owed by the Finance Authority to a Liquidity Provider pursuant to the related Liquidity Facility. “Series 2008 A Bond Capitalized Interest Subaccount” means the subaccount of that name created by the Indenture. “Series 2008 A Bond Proceeds Subaccount” means the subaccount of that name created by the Indenture. “Series 2008 A Bonds” means the Lease Appropriation Bonds (Convention Center Expansion Project), Series 2008 A, dated August 20, 2008, issued by the Finance Authority in the original aggregate principal amount of $120,000,000. “Series 2008 A Building Authority Note” means the Promissory Note, issued to the Finance Authority pursuant to Indiana Code 5-1-17, as amended, and the Loan Agreement, and acquired with the proceeds of the Series 2008 A Bonds for the purpose of providing a loan to the Building Authority, which were used, together with other available funds, to pay the costs of the Convention Center Expansion Project. “Series 2008 A Standby Purchase Agreement” means, collectively or separately, as the context requires, (1) a Series 2008 A-1 Liquidity Facility and (2) the Series 2008 A-2 Liquidity Facility. “Series 2008 A-1 Applicable Factor” means (i) during the Series 2008 A-1 Initial Period, 100%, and (ii) during any other Series 2008 A-1 Index Floating Rate Period, such other percentage as may be designated in writing by the Finance Authority as the Series 2008 A-1 Applicable Factor for such Series 2008 A-1 Index Floating Rate Period pursuant to Section 2.11(a)(iii)(H) hereof. “Series 2008 A-1 Applicable Spread” means: C-1-26 (i) With respect to the Series 2008 A-1 Initial Index Rate Period, initially forty-two basis points (0.42%), which Applicable Spread is subject to the maintenance of the current ratings assigned by Moody’s, Fitch and S&P to the long-term, unenhanced debt of the Finance Authority secured by the Trust Estate. In the event of a change in the Rating (as defined below), the Applicable Spread shall be the number of basis points associated with such new rating as set forth in the following schedule: Credit Rating Applicable Spread S&P Fitch Moody’s A+ or higher A+ or higher A1 or higher 0.42% A A A2 0.52% A- A- A3 0.62% BBB+ BBB+ Baa1 0.72% In the event that a Rating is suspended or otherwise unavailable from any Rating Agency or upon the occurrence and during the continuance of an Event of Default, the Series 2008 A-1 Bonds shall bear interest at the Series 2008 A-1 Default Rate. The term “Rating” as used above shall mean the lowest unenhanced long-term rating assigned to any indebtedness of the Finance Authority secured by the Trust Estate (without regard to bond insurance or any other form of credit enhancement) by any of S&P, Fitch or Moody’s. Any change in the Series 2008 A-1 Applicable Spread resulting from a change in any Rating shall be and become effective as of and on the date of the announcement of the change in such Rating and shall apply during any related period only to the extent that it is then in effect. References to ratings above are references to rating categories as determined by the Rating Agencies on the date hereof, and in the event of adoption of any new or changed rating system by any such Rating Agency, including, without limitation, any recalibration or realignment of the long-term unenhanced rating assigned to any indebtedness of the Finance Authority secured by the Trust Estate in connection with the adoption of a “global” rating scale, each of the Ratings referred to above from the agency in question shall be deemed to refer to the rating category under the new rating system which most closely approximates the applicable rating category as currently in effect. (ii) With respect to any other Series 2008 A-1 Index Floating Rate Period, the number of basis points or schedule of basis points determined by the related Market Agent in accordance with the Indenture (which may include a schedule for the Series 2008 A-1 Applicable Spread based upon the credit rating or ratings then assigned to the long-term unenhanced rating assigned to any indebtedness of the Finance Authority secured by the Trust Estate (without regard to bond insurance or other form of credit enhancement) as described in the foregoing clause (i) in this definition) that, when added to the product of the LIBOR Index Rate or the SIFMA Index Rate, as applicable, and the Series 2008 A-1 Applicable Factor, would equal the minimum interest rate per annum that would enable the Series 2008 A-1 Bonds to be sold on such date at a price equal to the principal amount thereof, plus accrued interest, if any, thereon. “Series 2008 A-1 Bank Purchase Date” means (i) the Series 2008 A-1 Initial Bank Purchase Date and (ii) during any Series 2008 A-1 Index Floating Rate Period other than the Series 2008 A-1 Initial Period, the date designated by the Finance Authority pursuant to the Indenture. “Series 2008 A-1 Bonds” means the Series 2008 A Bonds, designated as the “Series 2008 A-1 Variable Rate Demand Securities” and issued by the Finance Authority pursuant to the Indenture. C-1-27 “Series 2008 A-1 Continuing Covenant Agreement” means, during the Series 2008 A-1 Initial Period, the Continuing Covenant Agreement, dated as of September 1, 2013, between the Finance Authority and the Series 2008 A-1 Index Floating Rate Bank, as the same may be amended from time to time, and during any Series 2008 A1 Index Floating Rate Period other than the Series 2008 A-1 Initial Period, any agreement between the Finance Authority and a Series 2008 A-1 Index Floating Rate Bank which may be designated as the Series 2008 A-1 Continuing Covenant Agreement. “Series 2008 A-1 Default Rate” means “Default Rate” as such term is defined in the Series 2008 A-1 Continuing Covenant Agreement. “Series 2008 A-1 Excess Index Interest” shall have the meaning set forth in the Indenture. “Series 2008 A-1 Index Floating Rate” means, with respect to the Series 2008 A-1 Bonds, the Series 2008 A-1 LIBOR Index Rate or the Series 2008 A-1 SIFMA Index Rate, as applicable. “Series 2008 A-1 Index Floating Rate Bank” means, during any Series 2008 A-1 Index Floating Rate Period, the Bondholder of the Series 2008 A-1 Bonds, provided, that there is a single Bondholder of all of the Series 2008 A-1 Bonds and provided, further, that the Series 2008 A-1 Bonds are not then held under the Book-Entry System. If there is more than one Bondholder of the Series 2008 A-1 Bonds, “Series 2008 A-1 Index Floating Rate Bank” shall mean Bondholders owning a majority of the aggregate principal amount of the Series 2008 A-1 Bonds then Outstanding. If the Series 2008 A-1 Bonds are then held under the Book-Entry System, “Series 2008 A-1 Index Floating Rate Bank” shall mean the Beneficial Owner of the Series 2008 A-1 Bonds, provided that there is a single Beneficial Owner of all of the Series 2008 A-1 Bonds. If there is more than one Beneficial Owner of the Series 2008 A-1 Bonds, “Series 2008 A-1 Index Floating Rate Bank” shall mean Beneficial Owners who are the beneficial owners of a majority of the aggregate principal amount of the Series 2008 A-1 Bonds then Outstanding. The initial Series 2008 A-1 Index Floating Rate Bank with respect to the Series 2008 A-1 Bonds is Banc of America Preferred Funding Corporation. “Series 2008 A-1 Index Floating Rate Mode” means the Mode during which the Series 2008 A-1 Bonds bear interest at the Series 2008 A-1 Index Floating Rate. “Series 2008 A-1 Index Floating Rate Period” means the Series 2008 A-1 Initial Period and any other period during which the Series 2008 A-1 Bonds bear interest at a Series 2008 A-1 Index Floating Rate. “Series 2008 A-1 Initial Bank Purchase Date” means April 1, 2017. “Series 2008 A-1 Initial Index Floating Rate” means a per annum rate of interest equal to the sum of the SIFMA Index Rate and the Series 2008 A-1 Applicable Spread. “Series 2008 A-1 Initial Mode Change Date” means October 1, 2013. “Series 2008 A-1 Initial Period” means the initial Series 2008 A-1 Index Floating Rate Period commencing on the Series 2008 A-1 Initial Mode Change Date and ending on the first to occur of (i) the Series 2008 A-1 Initial Bank Purchase Date and (ii) a Mode Change Date with respect to the Series 2008 A-1 Bonds. “Series 2008 A-1 LIBOR Index Rate” means a per annum rate of interest equal to the product of the sum of (i) the product of the LIBOR Index Rate and the Series 2008 A-1 Applicable Factor and (ii) the Series 2008 A-1 Applicable Spread. “Series 2008 A-1 Liquidity Facility” means any Liquidity Facility provided by a Series 2008 A-1 Liquidity Provider for the Series 2008 A-1 Bonds, and all supplements and amendments thereto and extensions thereof, and any Alternate Credit Enhancement or Alternate Liquidity Facility delivered in replacement thereof, as well as any Alternate Credit Enhancement or Alternate Liquidity Facility delivered in replacement of a prior Alternate Credit Enhancement or Alternate Liquidity Facility. C-1-28 “Series 2008 A-1 Liquidity Provider” means any provider of a Liquidity Facility for the Series 2008 A-1 Bonds, and any Credit Provider or Liquidity Provider of an Alternate Credit Enhancement or Alternate Liquidity Facility delivered in replacement thereof, as well as of any Alternate Credit Enhancement or Alternate Liquidity Facility delivered in replacement of a prior Alternate Credit Enhancement or Alternate Liquidity Facility. “Series 2008 A-1 SIFMA Index Rate” means a per annum rate of interest equal to the sum of (i) the product of the SIFMA Index Rate and the Series 2008 A-1 Applicable Factor and (ii) the Series 2008 A-1 Applicable Spread. “Series 2008 A-1 Taxable Rate” means, with respect to the Series 2008 A-1 Bonds, an interest rate per annum at all times equal to the product of the Series 2008 A-1 Index Floating Rate then in effect with respect to such Bonds multiplied by the Series 2008 A-1 Taxable Rate Factor. “Series 2008 A-1 Taxable Rate Factor” means the quotient of (a) one divided by (b) one minus the Maximum Federal Corporate Tax Rate. “Series 2008 A-1 Unremarketed Bonds” means any Series 2008 A-1 Bonds bearing interest at a Series 2008 A-1 Index Floating Rate or Bank Rate, which, on the applicable Mandatory Purchase Date, have not been successfully converted to another Mode or remarketed to a Person other than the Series 2008 A-1 Index Floating Rate Bank. “Series 2008 A-2 Bonds” means the separate series of the Series 2008 A Bonds, designated as the “Series 2008 A-2 Variable Rate Demand Securities.” “Series 2008 A-2 Liquidity Facility” means the Standby Bond Purchase Agreement, dated as of February 1, 2014, by and among the Finance Authority, the Trustee and the Series 2008 A-2 Liquidity Provider, and all supplements and amendments thereto and extensions thereof, and any Alternate Credit Enhancement or Alternate Liquidity Facility delivered in replacement thereof, as well as any Alternate Credit Enhancement or Alternate Liquidity Facility delivered in replacement of a prior Alternate Credit Enhancement or Alternate Liquidity Facility. “Series 2008 A-2 Liquidity Provider” means BMO Harris Bank, N.A., as Liquidity Provider under the Series 2008 A-2 Liquidity Facility, and any Credit Provider or Liquidity Provider of an Alternate Credit Enhancement or Alternate Liquidity Facility delivered in replacement thereof, as well as any Alternate Credit Enhancement or Alternate Liquidity Facility delivered in replacement of a prior Alternate Credit Enhancement or Alternate Liquidity Facility. “Series 2009 A Bond Capitalized Interest Subaccount” shall mean the subaccount of that name created by the Indenture. “Series 2009 A Bonds” shall mean the Lease Appropriation Bonds (Convention Center Expansion Project), Series 2009 A, issued by the Finance Authority pursuant to the Indenture. “Series 2009 A Building Authority Note” shall mean the Promissory Note (Convention Center Expansion Project), Series 2009 A, to be issued to the Finance Authority pursuant to Indiana Code 5-1-17, as amended, and the Loan Agreement, and acquired with the proceeds of the Series 2009 A Bonds for the purpose of providing a loan to the Building Authority, which was used, together with other available funds, to pay the termination values of certain Qualified Hedging Contracts. “Series 2009 B Bond Capitalized Interest Subaccount” shall mean the subaccount of that name created by the Indenture. “Series 2009 B Bond Proceeds Subaccount” shall mean the subaccount of that name created by the Indenture. C-1-29 “Series 2009 B Bonds” shall mean the Lease Appropriation Bonds (Convention Center Expansion Project), Series 2009 B (Build America Bonds – Direct Payment – Federally Taxable), to be issued by the Finance Authority pursuant to the Indenture. “Series 2009 B Building Authority Note” shall mean the Promissory Note (Convention Center Expansion Project), Series 2009 B, to be issued to the Finance Authority pursuant to Indiana Code 5-1-17, as amended, and the Loan Agreement, and acquired with the proceeds of the Series 2009 B Bonds for the purpose of providing a loan to the Building Authority, which was used, together with other available funds, to pay a portion of the costs of the Convention Center Expansion Project. “Series 2009 Bonds” shall mean the Series 2009 A Bonds and the Series 2009 B Bonds. “Series 2009 Building Authority Notes” shall mean the Series 2009 A Building Authority Note and the Series 2009 B Building Authority Note. “Series 2015 A Bond Proceeds Subaccount” means the subaccount of that name created by the Indenture. “Series 2015 A Bonds” means the Lease Appropriation Refunding Bonds (Convention Center Expansion Project), Series 2015 A, to be issued by the Finance Authority pursuant to the Indenture. “Series 2015 A Building Authority Note” means the Promissory Note (Convention Center Expansion Project), Series 2015 A, to be issued to the Finance Authority pursuant to Indiana Code 5-1-17, as amended, and the Loan Agreement, and acquired with the proceeds of the Series 2015 A Bonds for the purpose of providing a loan to the Building Authority, which is to be used, together with other available funds, to prepay a portion of the Series 2008 A Building Authority Note, thereby providing the Finance Authority with funds: (1) to finance the refunding of a portion of the Series 2008 A Bonds; and (2) to pay any amounts in connection with the termination of the 2005 Qualified Hedging Contract. “Short-Term Mode” means the Daily Mode, the Weekly Mode, the Series 2008 A-1 Index Floating Rate Mode or the Flexible Mode. “SIFMA Index” means, on any date, a rate determined on the basis of the seven-day high grade market index of tax-exempt variable rate demand obligations, as produced by Municipal Market Data and published or made available by the Securities Industry and Financial Markets Association (“SIFMA”), or any person acting in cooperation with or under the sponsorship of SIFMA and acceptable to the applicable Remarketing Agent, and effective from such date. If such index is no longer published or otherwise not available, the SIFMA Index shall mean the S&P Weekly High Grade Index. If at any time neither such index is available, the Finance Authority shall use instead an index that the Finance Authority, after consultation with the Underwriter or the applicable Remarketing Agent, determines most closely approximates the SIFMA Index. “SIFMA Index Interest Period” means, while the Series 2008 A-1 Bonds bear interest at the SIFMA Index Rate, the period from (and including) the SIFMA Index Rate Conversion Date to (but excluding) the first Thursday thereafter, and thereafter shall mean the period from (and including) Thursday of each week to (but excluding) Thursday of the following week (or, if sooner, to but excluding the Series 2008 A-1 Bank Purchase Date). “SIFMA Index Rate” means, for any Rate Determination Date, the level of the index which is issued weekly and which is compiled from the weekly interest rate resets of tax-exempt variable rate issues included in a database maintained by Municipal Market Data which meet specific criteria established from time to time by the Securities Industry and Financial Markets Association and issued on Wednesday of each week, or if any Wednesday is not a Business Day, the next succeeding Business Day. If the SIFMA Index Rate is no longer published, then “SIFMA Index Rate” shall mean the S&P Weekly High Grade Index. If the S&P Weekly High Grade Index is no longer published, then “SIFMA Index Rate” shall mean the prevailing rate determined by the Calculation Agent for tax-exempt state and local government bonds meeting criteria determined in good faith by the Calculation Agent to be comparable under the circumstances to the criteria used by the Securities Industry and Financial Markets C-1-30 Association to determine the SIFMA Index Rate immediately prior to the date on which the Securities and Financial Markets Association ceased publication of the SIFMA Index Rate. “SIFMA Index Rate Conversion Date” means (a) the date on which the Series 2008 A-1 Bonds begin to bear interest at the SIFMA Index Rate or (b) if the Series 2008 A-1 Bonds have previously borne interest at the SIFMA Index Rate during a SIFMA Index Rate Period then ending, the applicable Bank Purchase Date occurring at the end of the then ending SIFMA Index Rate Period. “SIFMA Index Rate Period” means each period from and including a SIFMA Index Rate Conversion Date to but excluding the earliest of (i) the immediately succeeding applicable Bank Purchase Date, (ii) an applicable Mode Change Date and (iii) the applicable Maturity Date. “SIFMA Rate Reset Date” means Thursday of each week. “Stadium and Convention Special Fund” means the fund by that name established under the Revenue Deposit Agreement. “Stadium Bonds” means the Outstanding Stadium Bonds and any Additional Stadium Bonds. “Stadium Bond Trustee” means the entity acting as the trustee under the Stadium Trust Indenture. “Stadium Lease” means the Amended and Restated Lease, dated as of September 1, 2005, between the Building Authority and the OMB, relating to the Stadium Project, and all supplements and amendments thereto. “Stadium Loan Agreement” means the Loan Agreement, dated as of October 1, 2005, between the Finance Authority and Building Authority, relating to the Stadium Project, pursuant to which the Building Authority has issued the Stadium Notes to the Finance Authority, and all supplements and amendments thereto. “Stadium Notes” means the promissory notes of the Building Authority issued pursuant to the Stadium Loan Agreement. “Stadium Project” means the design, acquisition, construction and equipping of the New Stadium. “Stadium Sublease” means the Amended and Restated Sublease Agreement, dated as of September 1, 2005, between the OMB and the Board, relating to the Stadium Project, and all supplements and amendments thereto. “Stadium Trust Indenture” means the Amended and Restated Trust Indenture, dated as of May 1, 2015, between the Finance Authority and the Stadium Bond Trustee, relating to the Stadium Bonds, and all supplements and amendments thereto. “State” means the State of Indiana. “Sublease” means the Amended and Restated Sublease Agreement, dated as of August 1, 2008, between the OMB and the Board, relating to the Convention Center Expansion Project, and all supplements and amendments thereto. “Subordinate Bonds” means any bonds, notes or other evidences of indebtedness, which have a lien on and security interest in the Trust Estate subordinate to the lien thereon and security interest therein of the Bonds. “Subordinate Hedging Contract Obligation” means the Finance Authority’s obligation to pay any amount under any Qualified Hedging Contract, which obligation is secured by a pledge of the Trust Estate that is subordinate in all respects to the pledge thereof created by the Indenture to secure the Bonds. “Subordinate Reimbursement Obligation” means any Reimbursement Obligation (which may include interest calculated at a rate higher than the interest rate on the related Bonds) which is secured by a pledge of the C-1-31 Trust Estate that is subordinate in all respects to the pledge thereof created by the Indenture to secure the Bonds and any Parity Hedging Contract Obligations. “Subsidy Payments” shall mean any amounts payable by the United States Treasury to the Finance Authority (or to the Trustee for the benefit of the Finance Authority) under Section 6431 of the Code with respect to any interest payments under any Bonds. “Substitution Date” means the date upon which an Alternate Credit Enhancement or Alternate Liquidity Facility is scheduled to be substituted for the Credit Enhancement or Liquidity Facility then in effect. “Supplemental Indenture” means an indenture supplemental to or amendatory of the Indenture, executed by the Finance Authority and the Trustee in accordance with the Indenture. “Supplemental Lease” means any lease supplemental to or amendatory of the Lease. “Supplemental Loan Agreement” means a loan agreement supplemental to or amendatory of the Loan Agreement. “Supplemental Revenue Deposit Agreement” means a revenue deposit agreement supplemental to or amendatory of the Revenue Deposit Agreement. “Supplemental Stadium Sublease” means any sublease supplemental to or amendatory of the Stadium Sublease. “Supplemental Sublease” means any sublease supplemental to or amendatory of the Sublease. “Taxable Date” means, with respect to the Series 2008 A-1 Bonds, such date as defined in the Series 2008 A-1 Continuing Covenant Agreement “Tax-Exempt Bonds” means any Bonds which, when initially issued and sold, were the subject of an opinion of nationally recognized bond counsel to the effect that the interest thereon was excludable from gross income for federal income tax purposes under the Code. “Tender Agent” means the commercial bank, trust company or other entity which may from time to time be appointed to serve as Tender Agent as provided in the Indenture. Until such time as an alternate Tender Agent is appointed, the Tender Agent will be the Trustee. “Tender Notice” means a notice delivered by Electronic Means or in writing that states (i) the principal amount of such Bond to be purchased pursuant to the Indenture, (ii) the Purchase Date on which such Bond is to be purchased, (iii) applicable payment instructions with respect to the Bonds being tendered for purchase and (iv) an irrevocable demand for such purchase. “Tender Notice Deadline” means (i) during the Daily Mode, 11:00 a.m. on any Business Day and (ii) during the Weekly Mode, 5:00 p.m. on the Business Day seven days prior to the applicable Purchase Date. “Term Rate” means the per annum interest rate for the Bonds in the Term Rate Mode determined pursuant to the Indenture. “Term Rate Mode” means the Mode during which the Bonds bear interest at the Term Rate. “Term Rate Period” means the period from (and including) the Mode Change Date or the date of initial issuance of the Bonds, as applicable, to (but excluding) the last day of the first period that the Bonds are in the Term Rate Mode as established by the Finance Authority for the Bonds pursuant to the Indenture and, thereafter, the period from (and including) the beginning date of each successive Interest Rate Period selected for the Bonds by the Finance Authority pursuant to the Indenture while it is in the Term Rate Mode to (but excluding) the C-1-32 commencement date of the next succeeding Interest Period, including another Term Rate Period. Except as otherwise provided in the Indenture, an Interest Period for the Bonds in the Term Rate Mode must be at least 180 days in length. “Treasury Rate” means, as of any redemption date of any Series 2009 B Bonds, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to such redemption date (excluding inflation indexed securities) (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to the maturity date of such Series 2009 B Bonds; provided, however, that, if the period from such redemption date to such maturity date is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used. “Trustee” means the commercial bank, trust company or other entity which has accepted the trusts and duties imposed upon it by the Indenture. The initial Trustee is The Bank of New York Mellon Trust Company, N.A. “Trust Estate” means the following: (i) all cash, securities and Revenues now or hereafter held in the Funds and Accounts created or established under the Indenture (other than the Purchase Fund and the Rebate Fund) and the investment earnings thereon and all proceeds thereof (except to the extent such earnings or proceeds are held in the Purchase Fund or the Rebate Fund or any amounts which are transferred from such Funds and Accounts to the Rebate Fund from time to time in accordance with the Indenture); (ii) all rights, titles and interests of the Finance Authority in the Loan Agreement, except for the Unassigned Finance Authority’s Rights, all Building Authority Notes acquired and held by the Trustee pursuant to the Indenture, the Revenue Deposit Agreement, the Sublease and the Lease, all moneys obligated to be paid to the Trustee pursuant to such documents and the earnings thereon, and all proceeds of the foregoing; and (iii) all funds, accounts and moneys hereafter pledged to the Trustee as security by the Finance Authority to the extent of that pledge. “2005 Note Indenture” means the Trust Indenture, dated as of December 1, 2005, between the Finance Authority and the 2005 Note Trustee. “2005 Notes” means the Bond Anticipation Notes (Convention Center Expansion Project), Series 2005, dated December 21, 2005, issued by the Finance Authority pursuant to the 2005 Note Indenture. “2005 Note Trustee” means The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.) “2005 Qualified Hedging Contract” means the ISDA Master Agreement, dated as of December 13, 2005, as heretofore amended and supplemented through and including August 20, 2008, between the Finance Authority and the 2005 Qualified Hedging Contract Provider, which was entered into in anticipation of the issuance of the Series 2008 A Bonds. “2005 Qualified Hedging Contract Provider” means Goldman Sachs Bank USA (successor to Goldman Sachs Capital Markets, L.P.), or any of its successors. “Unassigned Finance Authority’s Rights” means the rights of the Finance Authority to receive Additional Payments and to give or withhold consent to the execution and delivery of supplements and amendments to the Loan Agreement. C-1-33 “Underwriters” means Goldman, Sachs & Co., as representative of itself and the other underwriters identified in the Contract of Purchase. “Variable Rate Mode” means the Short-Term Mode or the Term Rate Mode. “Weekly Mode” means the Mode during which the Bonds bear interest at the Weekly Rate. “Weekly Rate” means the per annum interest rate on the Bonds in the Weekly Mode determined pursuant to the Indenture. “Weekly Rate Period” shall mean the period during which a Bond in the Weekly Mode shall bear a Weekly Rate, which shall be the period commencing on Wednesday or Thursday of each week to and including Tuesday or Wednesday, respectively, of the following week, except the first Weekly Rate Period which shall be from the Mode Change Date to and including the Tuesday or Wednesday, as applicable, of the following week and the last Weekly Rate Period which shall be from and including the Wednesday or Thursday, as applicable, of the week prior to another Mode Change Date or the maturity date to and including the day next preceding such Mode Change Date or the maturity date, as applicable. With respect to any Bond in the Weekly Mode, the Weekly Rate Period for such Bond shall commence on: (1) a Wednesday, if the Rate Determination Date for such Bond shall be each Tuesday, or if Tuesday is not a Business Day, then the Business Day next succeeding such Tuesday; or (2) a Thursday, if the Rate Determination Date for such Bond shall be each Wednesday, or if Wednesday is not a Business Day, then the Business Day next succeeding such Wednesday. THE INDENTURE The following is a brief description of certain provisions of the Indenture and does not purport to comprehensively describe that document. Trust Estate The Finance Authority, in order to secure the payment of the principal of and interest on the Bonds, and to secure the performance and observation by the Finance Authority of all covenants in the Indenture and the Bonds, grants to the Trustee, and its successors in trust, a security interest in the Trust Estate. All Bonds issued under and secured by the Indenture are without privilege, priority or distinction as to the lien or otherwise of any of the Bonds over any of the other Bonds, except as otherwise expressly provided in the Indenture. Structure of Indenture Funds Creation of Funds. The Indenture creates the following five funds: (a) the Purchase Fund; (b) the General Fund; (c) the Project Fund; (d) the Debt Service Reserve Fund; and (e) the Rebate Fund. The Indenture creates in the General Fund, a “General Account,” a “Redemption Account,” a “Bond Issuance Expense Account,” a “Purchase Account” and a “Capitalized Interest Account.” The Indenture creates, in the Project Fund, a “Proceeds Account.” The Indenture creates, in the Debt Service Reserve Fund, a “Debt Service Reserve Account.” The Indenture creates, in the Capitalized Interest Account of the General Fund, a “Series 2008 A Bond Capitalized Interest Subaccount,” a “Series 2009 A Bond Capitalized Interest Subaccount,” a “2009 B Bond Capitalized Interest Subaccount” and a “Ground Lease Capitalized Interest Subaccount.” The Indenture creates, in the Proceeds Account of the Project Fund, a “Series 2008 A Bond Proceeds Subaccount,” a “Series 2009 B Bond Proceeds Subaccount” and a “Series 2015 A Bond Proceeds Subaccount.” Deposit of Revenues and Other Receipts. (a) Upon receipt of any Revenues or other receipts (except: (i) moneys held in the Purchase Fund; (ii) the proceeds of the Bonds (other than accrued interest thereon, if any); and (iii) those funds described in paragraphs (b) through (g) below), the Trustee will deposit such amounts into the General Account. C-1-34 (b) Subject to the provisions in the Indenture relating to the application of appropriations made by the General Assembly of the State, the Trustee will deposit into the Debt Service Reserve Account, any appropriations to the Trustee or the Finance Authority from the General Assembly to replenish the Debt Service Reserve Account. (c) Moneys received upon the prepayment of the Building Authority Notes will be deposited in the Redemption Account of the General Fund and moneys received pursuant to the Revenue Deposit Agreement for deposit in the Redemption Account will be deposited therein. (d) Moneys received pursuant to the Sublease, the Lease or the Revenue Deposit Agreement for deposit in the Ground Lease Capitalized Interest Subaccount of the Capitalized Interest Account of the General Fund shall be deposited therein. (e) Insurance or condemnation proceeds received by the Trustee pursuant to the Sublease for the purpose of the reconstruction or replacement of a portion of the Convention Center Expansion Project for deposit in the Project Fund will be deposited in the Proceeds Account of the Project Fund. (f) Termination payments received pursuant to any Qualified Hedging Contract will be deposited in the Redemption Account of the General Fund. (g) Moneys received by the Trustee from the 2005 Note Trustee (see “Operation of the Project Fund”) will be deposited in the Series 2008 A Bond Proceeds Subaccount of the Proceeds Account of the Project Fund. Operation of the General Account. The Trustee will deposit in the General Account of the General Fund all moneys required to be deposited therein pursuant to the provisions of the Indenture. The Trustee will invest such funds in accordance with the Indenture and will make the following payments from the General Account on the specified dates and, if there are not sufficient funds to make all the payments required, in the following order of priority: (a) On or before 10:00 a.m., in the city in which the Trustee is located, on each Interest Payment Date, such amount as will be necessary to pay on a parity basis: (i) the Principal Installments and interest coming due on the Bonds on such Interest Payment Date (including the principal of and interest on Liquidity Provider Bonds and Series 2008 A-1 Unremarketed Bonds), together with (A) any Differential Interest and Excess Interest (as such terms are defined in the Series 2008 A Standby Purchase Agreement) owed to the Series 2008 A Bank on Liquidity Provider Bonds pursuant to the Series 2008 A Standby Purchase Agreement during the Commitment Period (as such term is defined in the Series 2008 A Standby Purchase Agreement) (but excluding the payment of Differential Interest and Excess Interest on the Liquidity Provider Bonds owed to the Series 2008 A Bank pursuant to the Series 2008 A Standby Purchase Agreement commencing after the Amortization Commencement Date (as such term is defined in the Series 2008 A Standby Purchase Agreement)); provided, however (I) any accelerated payment of a principal installment on Liquidity Provider Bonds to the provider of the Liquidity Facility with respect to such Liquidity Provider Bonds pursuant to the Series 2008 A Standby Purchase Agreement (unless the principal of all Bonds has been accelerated pursuant to the Indenture and the Series 2008 A Standby Purchase Agreement) and (II) any obligations owed to the Series 2008 A Bank pursuant to the Series 2008 A Standby Purchase Agreement (other than the principal of and interest on Liquidity Provider Bonds, including the Differential Interest and Excess Interest owed to the Series 2008 A Bank on Liquidity Provider Bonds pursuant to the Series 2008 A Standby Purchase Agreement during the Commitment Period) shall be subordinate to the payment of the principal of and interest on the Bonds described prior to the proviso in this clause (i) (A), and (B) any Series 2008 A-1 Excess Index Interest owed to the Series 2008 A-1 Index Floating Rate Bank prior to any Series 2008 A-1 Bonds becoming Series 2008 A-1 Unremarketed Bonds (but excluding the payment of Series 2008 A-1 Excess Index Interest on any Series 2008 A-1 Unremarketed Bonds owed to a Series 2008 A-1 Index Floating Rate Bank); provided, however, (I) any Series 2008 A-1 Unremarketed Bonds (unless the principal of all Bonds has been accelerated pursuant to Section 11.2 hereof) and (II) any other obligations owed to the Series 2008 A-1 Index Floating Rate Bank pursuant to the Series 2008 A-1 Continuing Covenant Agreement (other than principal of and interest on the Series 2008 A-1 Bonds, including the Series 2008 A-1 Excess Interest owed to a Series 2008 A-1 Index Floating Rate Bank prior to such Bonds becoming Series 2008 A-1 Unremarketed Bonds), the amounts of which have been provided in writing to the Trustee and the Finance Autohrity pursuant to the Series 2008 A-1 Continuing Covenant Agreement, shall be subordinate to the payment of the principal of and interest on the Bonds described prior to the proviso in this cause C-1-35 (i)(B); and (ii) any amounts owed by the Finance Authority to any Qualified Hedging Contract Provider or any provider of a Reimbursement Obligation pursuant to a Qualified Hedging Contract or a Reimbursement Obligation, but only to the extent that such Qualified Hedging Contract or Reimbursement Obligation constitutes a Parity Hedging Contract Obligation or a Parity Reimbursement Obligation, respectively, pursuant to the Indenture or any Supplemental Indenture, and, in particular, with respect to the Bonds, the Series 2008 A Standby Purchase Agreement will constitute a Parity Reimbursement Obligation to the extent of the payment of the principal of and interest on any Liquidity Provider Bonds held by the Series 2008 A Bank, as described prior to the proviso in clause (i) above; (b) As soon as funds become available, to the Debt Service Reserve Account of the Debt Service Reserve Fund, sufficient amounts to assure that the Debt Service Reserve Requirement are met from time to time; provided, however, that in the event the General Assembly makes an appropriation for the Debt Service Reserve Account, the moneys so appropriated will be deposited to such Account; (c) On or before 10:00 a.m., in the city in which the Trustee is located, on each Interest Payment Date, such amount as shall be necessary to pay on a parity basis any amounts owed by the Finance Authority to any Qualified Hedging Contract Provider or any provider of a Reimbursement Obligation pursuant to a Qualified Hedging Contract or a Reimbursement Obligation, but only to the extent that such Qualified Hedging Contract or Reimbursement Obligation constitutes a Subordinate Hedging Contract Obligation or a Subordinate Reimbursement Obligation, respectively, pursuant to this Indenture or any Supplemental Indenture; (d) As necessary, to the Finance Authority, amounts to pay Program Expenses, and, to the extent not available in the Capitalized Interest Account of the General Fund, to the Remarketing Agent, the amounts necessary to pay the Remarketing Agent Fee when due; (e) When requested by the Finance Authority, the amounts to be transferred to the Rebate Fund pursuant to the Indenture; and (f) After making such deposits and disbursements, the Trustee will retain such remaining amounts in the General Account to be used from time to time for the purposes described in paragraphs (a) through (e) above; provided, that the Trustee, at the written direction of an Authorized Officer, may transfer funds in the General Account to the Deposit Trustee for deposit in the Special Fund under the Revenue Deposit Agreement at the times, for the purposes and in the manner described in the MOU, and particularly Part A, Section 19, paragraphs (f) through (g) thereof. Upon final maturity of the Bonds, any money remaining in the General Account, which is not needed to pay any of the costs described in paragraphs (a) through (e) above in connection with the final maturity of or redemption of all the Bonds will be transferred within 30 days after such final maturity to the Building Authority. Operation of the Redemption Account. The Trustee will deposit in the Redemption Account of the General Fund all moneys received upon the prepayment of the Building Authority Notes and all other moneys required to be deposited therein pursuant to the provisions of the Indenture, will invest such funds pursuant to the Indenture and will disburse the funds held in the Redemption Account as follows: (a) On the fifteenth day of each month, to the General Account of the General Fund an amount equal to the principal of the Building Authority Notes, which would have been payable during the following month if such Building Authority Notes had not been prepaid; (b) On each Interest Payment Date, if moneys in the General Account of the General Fund are not sufficient to make the payments of principal and interest required to be made on such date, the Trustee will transfer to the General Account moneys in the Redemption Account not already committed under the Indenture to the redemption of Bonds for which notice of redemption has been given; (c) After provision has been made for the payments as described under paragraphs (a) and (b) above, moneys in the Redemption Account may be (i) used to redeem Bonds of such maturity or maturities as directed by an Authorized Officer if such Bonds are then subject to redemption, (ii) transferred to the General Account or the Proceeds Account of the Project Fund, (iii) used to purchase Bonds of such maturity or maturities as directed by an C-1-36 Authorized Officer at the most advantageous price obtainable with reasonable diligence, whether or not such Bonds will then be subject to redemption, (iv) used to make a termination payment under a Qualified Hedging Contract or pay any interest thereon in connection with any redemption of the Bonds or (v) used to make investments until the payment of Bonds at their maturity or maturities as directed by an Authorized Officer in accordance with the Indenture. Such price may not, however, exceed the Redemption Price which would be payable on the next ensuing date on which the Bonds so purchased are redeemable according to their terms, unless the Finance Authority provides the Trustee with a Cash Flow Certificate to the effect that the purchase at a price in excess of the Redemption Price will not result in Revenues, together with moneys expected to be held in the Funds and Accounts, being less than an amount equal to Debt Service (plus any Subsidy Payments), together with Program Expenses, if any. The Trustee will pay the interest accrued on the Bonds so purchased to the date of delivery thereof from the General Account and the balance of the purchase price from the Redemption Account; (d) Prior to the purchase of any Bonds pursuant to the provisions described in paragraph (c), the Trustee will also have sufficient funds to pay all termination payments that may be owed under a Qualified Hedging Contract on the purchase date in connection with such purchase and will apply those funds accordingly on such date. The Trustee will deliver any Bonds so purchased to the registrar for retirement within five days from the date of delivery to the Trustee; and (e) In the event the Trustee is unable to purchase Bonds in accordance with and under the provisions described in paragraphs (c) and (d) above, then, subject to any restrictions on redemption set forth in the Indenture, the Trustee will call for redemption on the next ensuing redemption date such amount of Bonds of such maturity or maturities as directed by an Authorized Officer as, at the Redemption Price thereof, will exhaust the Redemption Account as nearly as may be possible. Such redemption will be made pursuant to the provisions of the Indenture. The Trustee will pay the interest accrued on the Bonds so redeemed to the date of redemption from the General Account and the Redemption Price from the Redemption Account. Operation of the Bond Issuance Expense Account. The Trustee will deposit in the Bond Issuance Expense Account of the General Fund the moneys required to be deposited therein, will invest such funds pursuant to the Indenture and will disburse the funds held in the Bond Issuance Expense Account as follows: (a) Upon receipt of invoices or requisitions certified by an Authorized Officer to pay the Costs of Issuance of the Bonds or to reimburse the Finance Authority for amounts previously advanced for such costs; and (b) With respect to each Series of Bonds, any funds remaining in the Bond Issuance Expense Account constituting the proceeds of such Series of Bonds will be transferred to the General Account of the General Fund on the date six months after the date of issuance of such Series of Bonds and used to pay interest on such Series of Bonds. Operation of the Purchase Account. The Trustee will deposit in the Purchase Account of the General Fund all moneys required to be deposited therein, will invest such funds pursuant to the Indenture and will disburse the funds held in the Purchase Account to purchase Building Authority Notes in accordance with the procedures established by the Finance Authority as set forth in the Indenture, upon the submission of requisitions of the Finance Authority signed by an Authorized Officer stating that all requirements with respect to such financing set forth in the Indenture and the Loan Agreement have been or will be complied with. After the purchase of a Building Authority Note, the entire amount of the proceeds of the Bonds allocable to such Building Authority Note will be applied in accordance with the Indenture. If less than the entirety of a Building Authority Note is purchased, upon certification by the Finance Authority that a Building Authority Note eligible for purchase with the proceeds of a Series of Bonds has been purchased, the amounts remaining in the Purchase Account may be transferred to the Redemption Account of the General Fund. Any amounts remaining in the Purchase Account three years after the date of delivery of a Series of Bonds will be transferred to the Redemption Account. Operation of the Capitalized Interest Account. (a) The Trustee will deposit in the Capitalized Interest Account all moneys required to be deposited therein pursuant to the Indenture and will at all times invest such funds in an investment agreement as described and meeting the requirements set forth in clause (k) under the definition of “Investment Securities,” in money market funds meeting the requirements set forth in clause (h) under the definition of “Investment Securities” or in Governmental Obligations. C-1-37 (b) All moneys hereafter received, pursuant to the Sublease, the Lease or the Revenue Deposit Agreement for deposit in the Capitalized Interest Account will be deposited in the Ground Lease Capitalized Interest Subaccount. (c) Moneys in the Series 2008 A Bond Capitalized Interest Subaccount shall, without further authorization or direction, be transferred by the Trustee from the Series 2008 A Bond Capitalized Interest Subaccount to the General Account of the General Fund in the amounts necessary on or before each Interest Payment Date to pay: (i) through and including July 1, 2011, the interest due on the Series 2008 A Bonds on such Interest Payment Dates; (ii) through and including August 1, 2010, the Remarketing Agent Fee and the Series 2008 A Bank Fee when due; and (iii) through and including July 1, 2011, any hedge payments when due and any interest due on such payments in the event of a failure to make such payments when due under the 2005 Qualified Hedging Contract. (d) Upon depletion of moneys in the Series 2008 A Bond Capitalized Interest Subaccount, the moneys in the Ground Lease Capitalized Interest Subaccount shall, without further authorization or direction, be transferred by the Trustee from the Ground Lease Capitalized Interest Subaccount to the General Account of the General Fund in the amounts necessary on or before each Interest Payment Date through and including July 1, 2011, to pay: (i) the interest due on the Series 2008 A Bonds on such Interest Payment Dates; (ii) the Remarketing Agent Fee and the Series 2008 A Bank Fee when due; and (iii) any hedge payments when due and any interest due on such payments in the event of a failure to make such payments when due under the 2005 Qualified Hedging Contract. (e) Through and including July 1, 2011, the amounts to be transferred from either the Series 2008 A Bond Capitalized Interest Subaccount or the Ground Lease Capitalized Interest Subaccount to the General Account in order to pay interest on the Series 2008 A Bonds on any Interest Payment Date shall be reduced to the extent that (i) any hedge payments received by the Finance Authority pursuant to the 2005 Qualified Hedging Contract are available to pay interest on the Series 2008 A Bonds on such Interest Payment Date or (ii) any amount of proceeds of the Series 2009 A Bonds deposited in the General Account to pay any amounts in connection with any termination, amendment, assignment, transfer, novation or replacement of any 2005 Qualified Hedging Contracts are available after being applied to such purposes and are allocated to the Series 2008 A Bonds. (f) Any moneys remaining in the Series 2008 A Capitalized Interest Subaccount, representing the proceeds of the Series 2008 A Bonds, after the transfer for the last Interest Payment Date on or before July 1, 2011, will have been made, will be transferred, at the written direction of an Authorized Officer to the Trustee, to either the Proceeds Account of the Project Fund to pay the costs of the Convention Center Expansion Project or to the General Account of the General Fund to pay interest on the Series 2008 A Bonds, in the amount or amounts set forth in such written direction. Any moneys remaining in the Ground Lease Capitalized Interest Subaccount, representing moneys received for deposit in the Capitalized Interest Account pursuant to the Indenture, after the transfer for the last Interest Payment Date on or before August 1, 2011, will have been made, will be transferred, at the written direction of an Authorized Officer to the Trustee, to the Proceeds Account of the Project Fund to pay the costs of the Convention Center Expansion Project, to the General Account of the General Fund or to the Redemption Account of the General Fund in the amounts set forth in such written direction. (g) (i) Moneys in the Series 2009 A Bond Capitalized Interest Subaccount shall, without further authorization or direction, be transferred by the Trustee from the Series 2009 A Bond Capitalized Interest Subaccount to the General Account of the General Fund in the amounts necessary on or before each Interest Payment Date to pay through and including August 1, 2011, the interest due on the Series 2009 A Bonds on such Interest Payment Dates. (ii) Moneys in the Series 2009 B Bond Capitalized Interest Subaccount shall, without further authorization or direction, be transferred by the Trustee from the Series 2009 B Bond Capitalized Interest Subaccount to the General Account of the General Fund in the amounts necessary on or before each Interest Payment Date to pay through and including August 1, 2011, the interest due on the Series 2009 B Bonds on such Interest Payment Dates. (h) (i) Upon depletion of moneys in the Series 2009 A Bond Capitalized Interest Subaccount, the moneys in the Ground Lease Capitalized Interest Subaccount shall, without further authorization or direction, be C-1-38 transferred by the Trustee from the Ground Lease Capitalized Interest Subaccount to the General Account of the General Fund in the amounts necessary on or before each Interest Payment Date through and including August 1, 2011, to pay the interest due on the Series 2009 A Bonds on such Interest Payment Dates. (ii) Upon depletion of moneys in the Series 2009 B Bond Capitalized Interest Subaccount, the moneys in the Ground Lease Capitalized Interest Subaccount shall, without further authorization or direction, be transferred by the Trustee from the Ground Lease Capitalized Interest Subaccount to the General Account of the General Fund in the amounts necessary on or before each Interest Payment Date through and including August 1, 2011, to pay the interest due on the Series 2009 B Bonds on such Interest Payment Dates. (i) Through and including August 1, 2011, the amounts to be transferred from either the Series 2009 B Bond Capitalized Interest Subaccount or the Ground Lease Capitalized Interest Subaccount to the General Account in order to pay interest on the Series 2009 B Bonds on any Interest Payment Date shall be reduced to the extent that any amount of proceeds of the Series 2009 A Bonds deposited in the General Account to pay any amounts in connection with any termination, amendment, assignment, transfer, novation or replacement of any 2005 Qualified Hedging Contracts are available after being applied to such purposes and are allocated to the Series 2009 B Bonds. (j) (i) Any moneys remaining in the Series 2009 A Capitalized Interest Subaccount, representing the proceeds of the Series 2009 A Bonds, after the transfer for the last Interest Payment Date on or before August 1, 2011, shall have been made, shall be transferred, at the written direction of an Authorized Officer to the Trustee, to either the Series 2009 B Bond Proceeds Subaccount of the Project Fund to pay the costs of the Convention Center Expansion Project or to the General Account of the General Fund to pay interest on the Series 2009 A Bonds, in the amount or amounts set forth in such written direction. (ii) Any moneys remaining in the Series 2009 B Capitalized Interest Subaccount, representing the proceeds of the Series 2009 B Bonds, after the transfer for the last Interest Payment Date on or before August 1, 2011, shall have been made, shall be transferred, at the written direction of an Authorized Officer to the Trustee, to either the Series 2009 B Bond Proceeds Subaccount of the Project Fund to pay the costs of the Convention Center Expansion Project or to the General Account of the General Fund to pay interest on the Series 2009 B Bonds, in the amount or amounts set forth in such written direction. Operation of the Project Fund. (a) Proceeds Account. (i) Moneys held in the Proceeds Account of the Project Fund representing a portion of the proceeds of the sale of a Building Authority Note by the Building Authority to the Finance Authority pursuant to the Loan Agreement, representing insurance or condemnation proceeds received by the Trustee pursuant to the Sublease for the purpose of the reconstruction or replacement of a portion of the Convention Center Expansion Project, representing the unspent proceeds of the 2005 Notes received by the Trustee or otherwise received for deposit in the Proceeds Account pursuant to the Indenture, will be invested by the Trustee in one or more investment agreements as described and meeting the requirements set forth in clause (k) under the definition of “Investment Securities” and otherwise pursuant to the Indenture. Such moneys will be disbursed by the Trustee in accordance with the provisions of the Loan Agreement to pay the costs of the Convention Center Expansion Project and such other facilities and equipment as the Building Authority, with the consent of the Finance Authority, deems necessary and appropriate in connection with the Convention Center Expansion Project. The Trustee is authorized to make each disbursement required by the provisions of the Loan Agreement. If the unexpended proceeds of the sale of a prior Building Authority Note or unexpended insurance or condemnation proceeds remain in the Proceeds Account, into which proceeds of the sale of an Additional Building Authority Note are to be deposited upon the issuance of Additional Bonds, the Trustee will establish a separate subaccount within the Proceeds Account, for accounting purposes, for the deposit of the proceeds of the sale of such Additional Building Authority Note. If the unexpended proceeds of the sale of a Building Authority Note remain in the Proceeds Account, into which moneys representing insurance or condemnation proceeds received by the Trustee pursuant to the Sublease for the purpose of the reconstruction or replacement of a portion of the Convention Center Expansion Project are to be deposited, the Trustee shall establish a separate subaccount within the Proceeds Account, for accounting purposes, for the deposit of such insurance or condemnation proceeds. (ii) Pending disbursement pursuant to the Loan Agreement, the moneys and Investment Securities to the credit of the Proceeds Account of the Project Fund will constitute a part of the Trust Estate assigned C-1-39 to the Trustee as security for the payment of the Bonds pursuant to the granting clauses of the Indenture. Upon the occurrence and continuance of an Event of Default under the Indenture, because of which the principal amount of the Bonds has been declared to be due and payable immediately pursuant to the Indenture, any moneys remaining in the Proceeds Account will be promptly transferred by the Trustee to the General Account of the General Fund. (b) The Trustee will cause to be kept and maintained adequate records pertaining to the Project Fund and all disbursements therefrom. (c) The proceeds of the Series 2008 A Bonds to be deposited in the Series 2008 A Bond Proceeds Subaccount shall be in the amount set forth in the Indenture. (d) The proceeds of the Series 2009 B Bonds to be deposited in the Series 2009 B Bond Proceeds Subaccount shall be in the amount set forth in the Indenture. (e) All moneys on deposit in the Series 2008 A Bond Proceeds Subaccount of the Proceeds Account of the Project Fund and any investment earnings thereon shall be expended before the expenditure of any proceeds deposited in the Series 2009 B Bond Proceeds Subaccount of the Proceeds Account of the Project Fund or any investment earnings thereon. (f) Upon the date the Convention Center Expansion Project is complete and ready for use and occupancy pursuant to the Sublease, the Trustee shall transfer to the General Account all moneys then on deposit in the Series 2009 B Bond Proceeds Subaccount, except those moneys necessary to provide for the payment of the remaining costs of the Convention Center Expansion Project as then designated in writing to the Trustee by an Authorized Building Authority Representative. Any moneys so transferred to the General Account shall be applied to the payment of interest on the Series 2009 B Bonds prior to the use of any other moneys on deposit in the General Account for such purpose. Operation of the Debt Service Reserve Account. (a) The Trustee will deposit in the Debt Service Reserve Account of the Debt Service Reserve Fund all moneys required to be deposited therein pursuant to the Indenture and monies appropriated by the General Assembly of the State for such purpose to cause the Debt Service Reserve Account to be equal to the Debt Service Reserve Requirement, together with such other moneys as directed by the Finance Authority, will invest such funds pursuant to the Indenture and will disburse the funds held in the Debt Service Reserve Account to the General Account of the General Fund on each Interest Payment Date, if the moneys in the General Account are not sufficient to pay the principal of and interest on the Bonds and any Parity Hedging Contract Obligation owed to a Qualified Hedging Contract Provider, which are required to be paid on such date after taking into account available funds on deposit in the General Account after making all transfers required to be made under the Indenture. (b) The Trustee will transfer the funds held in the Debt Service Reserve Account to the General Account for the timely payment of the principal of and interest on the Bonds and any Parity Hedging Contract Obligation owed to a Qualified Hedging Contract Provider, but only in the event that moneys in the General Account are insufficient to pay such amount of principal and interest due on the Bonds and such Parity Hedging Contract Obligation after making all transfers required to be made under the Indenture. The Trustee will draw first on cash or Investment Securities on deposit in the Debt Service Reserve Account and then on the Debt Service Reserve Fund Credit Facility or Facilities, if any, in accordance with the terms thereof. (c) The Finance Authority may cause to be deposited into the Debt Service Reserve Account for the benefit of the holders of the Bonds a Debt Service Reserve Fund Credit Facility. If such deposit causes the Debt Service Reserve Account to be equal to the Debt Service Reserve Requirement, moneys in the Debt Service Reserve Account in excess of that needed for the Debt Service Reserve Account to be equal to the Debt Service Reserve Requirement will be moved in accordance with the provisions described in this subcaption, subject to the satisfaction of any Debt Service Reserve Fund Reimbursement Obligations from such excess as provided below. If a disbursement is made pursuant to a Debt Service Reserve Fund Credit Facility, the Finance Authority will be obligated (but solely from the appropriations, if any, made by the General Assembly or if otherwise available from the Trust Estate), within twelve months from the date on which such disbursement was made, to cure such deficiency, either (i) to reinstate the maximum limits of such Debt Service Reserve Fund Credit Facility or (ii) to C-1-40 deposit cash into the Debt Service Reserve Account, or a combination of such alternatives, so that the Debt Service Reserve Account is equal to the Debt Service Reserve Requirement. (d) The Trustee will include in the total amount held in the Debt Service Reserve Account an amount equal to the maximum principal amount which could be drawn by the Trustee under any such Debt Service Reserve Fund Credit Facility on deposit with the Trustee. Amounts required to be deposited in the Debt Service Reserve Account will include any amount required to satisfy a Debt Service Reserve Fund Reimbursement Obligation for any Debt Service Reserve Fund Credit Facility. The Trustee is authorized to transfer amounts from the Debt Service Reserve Account to the Debt Service Reserve Fund Credit Provider to satisfy the Debt Service Reserve Fund Reimbursement Obligations to the Debt Service Reserve Fund Credit Provider. (e) If the amount on deposit in the Debt Service Reserve Account is in excess of the Debt Service Reserve Requirement, the Trustee shall transfer the cash or Investment Securities in excess of that needed for the amount on deposit in the Debt Service Reserve Account to be equal to the Debt Service Reserve Requirement from the Debt Service Reserve Account to: (i) through and including August 20, 2010, the Series 2008 A Bond Proceeds Subaccount of the Proceeds Account of the Project Fund in amounts equal to 38.5875475% of such excess and the Series 2009 B Bond Proceeds Subaccount of the Proceeds Account of the Project Fund in amounts equal to 61.4124525% of such excess; (ii) after August 20, 2010, and until the date on which the Convention Center Expansion Project is available for use and occupancy pursuant to the Sublease or December 1, 2010, whichever is later, the Series 2009 B Bond Proceeds Subaccount; and (iii) on and after the date on which the Convention Center Expansion Project is available for use and occupancy pursuant to the Sublease or December 1, 2010, whichever is later, the General Account of the General Fund. Upon any date the Debt Service Reserve Requirement is reduced for any reason, any amount then on deposit in the Debt Service Reserve Account in excess of the Debt Service Reserve Requirement due to such reduction shall be transferred to the Series 2009 B Bond Proceeds Subaccount. Operation of the Rebate Fund. (a) The Trustee will establish and maintain, so long as any Bonds are outstanding and are subject to a requirement that arbitrage profits be rebated to the United States of America, a separate fund to be known as the “Rebate Fund.” The Trustee will make information regarding the Bonds and investments under the Indenture available to the Finance Authority and will make deposits and disbursements from the Rebate Fund in accordance with instructions received from the Finance Authority. The Trustee will invest the Rebate Fund as directed by the Finance Authority pursuant to the Indenture and will deposit income from such investments immediately upon receipt thereof in the Rebate Fund. (b) If a deposit to the Rebate Fund is required as a result of the computations made by the Finance Authority, the Trustee will upon receipt of direction from the Finance Authority accept such payment for the benefit of the Finance Authority and make transfers of moneys from the General Account of the General Fund to the Rebate Fund to comply with such direction. If amounts in excess of that required to be rebated to the United States of America accumulate in the Rebate Fund, the Trustee will upon direction from the Finance Authority transfer such amount to the General Account. Records of the determinations required by the provisions described under this subcaption and the investment instructions must be retained by the Trustee until six years after the Bonds are no longer Outstanding. (c) With respect to each Series of Bonds, not later than 60 days after the date five years after the date of issuance of such Series of Bonds, and every five years thereafter, the Finance Authority will pay to the United States of America the amount required to be paid to the United States of America as of such payment date. Not later than 60 days after the final retirement of each Series of Bonds, the Finance Authority will pay to the United States of America the amount required to be paid to the United States of America as of such retirement date. The Trustee will disburse moneys in the Rebate Fund for such purpose upon the written request of the Finance Authority. Moneys to be Held in Trust. All moneys required to be deposited with or paid to the Trustee for the account of any Fund or Account established under the Indenture: (a) will be held by the Trustee in trust and applied in accordance with the provisions of the Indenture; (b) except for moneys held in the Purchase Fund, the Rebate Fund and any accounts or subaccounts created thereunder and except for moneys deposited with or paid to the Trustee for the redemption of Bonds, notice of the redemption of which has been duly given, will, while held by the Trustee, constitute part of the Trust Estate and be subject to the security interest created by the Indenture; and (c) shall not be subject to any lien or attachment by any creditor of the Finance Authority. C-1-41 Amounts Remaining in Funds or Accounts. Any amounts remaining in any Fund or Account after full payment of the Bonds as provided in the Indenture and the fees, charges (including any required rebate to the United States of America) and expenses of the Trustee, the Paying Agent, the Tender Agent, the Remarketing Agent, the Auction Agent, the Broker-Dealer, the Credit Provider and the Liquidity Provider will be distributed to the Building Authority. Investment of Moneys General. Any moneys held as part of any Fund or Account created under or pursuant to the Indenture will be invested or reinvested by the Trustee as expressly required by the Indenture or as continuously as reasonably possible in such Investment Securities as may be directed by the Finance Authority. The Trustee may make any and all such investments through its bond department or through the bond department of any financial institution which is an affiliate of the Trustee and may trade with itself or any of its affiliates in doing so. All investments will be a part of the Fund or Account from which moneys were used to acquire such investments, and all Investment Earnings on such investments will be deposited as received in the General Account of the General Fund, except for Investment Earnings on the investment of funds in (i) the Proceeds Account of the Project Fund, which will remain in the Proceeds Account, (ii) the Rebate Fund, which will remain in the Rebate Fund, and (iii) the Debt Service Reserve Account of the Debt Service Reserve Fund, which will remain in the Debt Service Reserve Account until the balance in the Debt Service Reserve Account equals the Debt Service Reserve Requirement and thereafter to the Series 2008 A Bond Proceeds Subaccount of the Proceeds Account or such other subaccount of the Proceeds Account as may be specified by an Authorized Officer to the Trustee. However, at the end of each Fiscal Year, if the amount in the Debt Service Reserve Account exceeds the Debt Service Reserve Requirement, any Investment Earnings received on account of any money appropriated to the Debt Service Reserve Account that exceeds the expenses of the Finance Authority for such Fiscal Year will be transferred to the General Fund of the State at the written direction of an Authorized Officer. Any investment income, gains or losses will be charged to the Fund or Account in which moneys used to purchase such investment had been deposited, except as described in the preceding sentence. The Trustee will not be liable for investment losses. Moneys in any Funds or Accounts will be invested in Investment Securities with maturity dates (or redemption dates determinable at the option of the owner of such Investment Securities) coinciding as nearly as practicable with the times at which moneys in such Funds or Accounts will be required for transfer or disbursement under the Indenture. However, any such Investment Securities in the Debt Service Reserve Account will have a term to maturity of not greater than five years. The Trustee will sell and reduce to cash sufficient amounts of such Investment Securities in a Fund or Account as may be necessary to make up a deficiency in any amounts required to be distributed from such Fund or Account. Arbitrage Restrictions; Series 2008 A Bonds, Series 2009 A Bonds and Series 2015 A Bonds to Remain Tax-Exempt; Series 2009 B Bonds to Remain as “Qualified Bonds.” The Finance Authority covenants and agrees that it will not take any action or fail to take any action with respect to the investment or application of any payments under the Loan Agreement or any Building Authority Note or any other agreement or instrument entered into in connection therewith or with the issuance of the Bonds, including the obligation, if any, to rebate certain funds to the United States of America, which would result in constituting any Bonds as “arbitrage bonds” within the meaning of such term as used in Section 148 of the Code. The Finance Authority further agrees that it will not act in any other manner which would adversely affect the excludability of the interest on any Series 2008 A Bonds, Series 2009 A Bonds or Series 2015 A Bonds from gross income for federal income tax purposes. To assure the continuing qualification of the Series 2009 B Bonds as “qualified bonds” within the meaning of 54AA(g) of the Code, the Finance Authority covenants and agrees that it shall not take any action or fail to take any action with respect to the Series 2009 B Bonds that would result in the loss of the qualification of any of the Series 2009 B Bonds as a “qualified bond” within the meaning of 54AA(g) of the Code, nor shall the Finance Authority act in any other manner which would adversely affect such qualification. Notwithstanding any provision of the Indenture to the contrary, the Finance Authority may elect to issue a Series of Bonds, the interest on which is not excludable from gross income for federal income tax purposes, so long as such election does not adversely affect the excludability of the interest on any other Series of Bonds from gross C-1-42 income for federal income tax purposes, by making such election on the date of delivery of such Series of Bonds. In such case, the tax covenants in the Indenture will not apply to such Series of Bonds. General Covenants of Finance Authority Payment of Principal and Interest. In the Indenture, the Finance Authority covenants and agrees that it will promptly pay the principal of and interest on every Bond issued under the Indenture at the place, on the dates and in the manner provided therein and in the Bonds according to the Indenture and meaning thereof and that it will promptly pay any Parity Hedging Contract Obligation owed to a Qualified Hedging Contract Provider pursuant to the terms of the applicable Qualified Hedging Contract. However, the principal and interest and any Parity Hedging Contract Obligation are payable by the Finance Authority solely from the Trust Estate and any other funds or assets of the Finance Authority pledged to the Trustee, the Tender Agent and the Qualified Hedging Contract Providers as security by the Finance Authority to the extent of that pledge. Performance of Covenants. The Finance Authority covenants and agrees that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in the Indenture, in any and every Bond executed, authenticated and delivered thereunder and in all of its proceedings pertaining thereto. Instruments of Further Assurance. The Finance Authority covenants and agrees that it will do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, such indentures supplemental to the Indenture and such further acts, instruments and transfers as the Trustee may reasonably require for the better assuring, transferring, pledging, assigning and confirming unto the Trustee all and singular the rights assigned by the Indenture and the amounts and other property pledged by the Indenture to the payment of the principal of and interest on the Bonds and the obligations owed by the Finance Authority to the Qualified Hedging Contract Providers pursuant to the Qualified Hedging Contracts. Covenants Concerning Program. In order to provide for the payment of the principal of, premium, if any, and interest on the Bonds and Program Expenses, the Finance Authority will, from time to time, with all practical dispatch and in a sound and economical manner consistent in all respects with the Act, the provisions of the Indenture and sound banking practices and principles, (a) do all such acts and things as will be necessary to receive and collect the Revenues (including enforcement of the prompt collection of all arrears on Building Authority Note Payments), and (b) diligently enforce, and take all steps, actions and proceedings reasonably necessary in the judgment of the Finance Authority to protect its rights with respect to the Loan Agreement and the Building Authority Notes and to enforce all terms, covenants and conditions of the Loan Agreement and the Building Authority Notes, including the collection, custody and prompt application of all payments required by the terms of the Loan Agreement and the Building Authority Notes for the purposes for which they were made. Whenever necessary in order to provide for the payment of the Bonds, the Finance Authority will commence appropriate remedies with respect to the Loan Agreement or any Building Authority Note which is in default. Possession and Inspection of the Loan Agreement and the Building Authority Notes. The Trustee covenants and agrees to retain or cause its agent to retain possession of the Loan Agreement and the Building Authority Notes and a copy of the transcript or documents related thereto and release them only in accordance with the provisions of the Indenture. The Finance Authority and the Trustee covenant and agree that all books and documents in their possession relating to the Loan Agreement and the Building Authority Notes will at all times be open to inspection by such accountants, the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder, or other agencies or persons as the Finance Authority or the Trustee may from time to time designate. Accounts and Reports. The Finance Authority covenants and agrees to keep proper books of record and accounts (separate from all other records and accounts) in which complete and correct entries will be made of its transactions relating to the Program and the Funds and Accounts established by the Indenture. Such books, all other books and papers of the Finance Authority and such Funds and Accounts will at all reasonable times be subject to the inspection of the Trustee, the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement then remains in full force and effect, and the owners of an aggregate of not less than five percent in principal amount of the Bonds then Outstanding or their representatives duly authorized in writing. The Trustee covenants and agrees to provide to the Finance Authority and the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase C-1-43 Agreement then remains in full force and effect and the Series 2008 A Bank is not then in default thereunder, and the Series 2008 A-1 Index Floating Rate Bank, so long as the Series 2008 A-1 Continuing Covenant Agreement then remains in full force and effect, with certain reports, statements, and other documents with respect to the Funds and Accounts. The reports, statements and other documents required to be furnished to or by the Trustee pursuant to any provision of the Indenture will be provided to the owners of an aggregate of not less than five percent in principal amount of the Bonds then Outstanding who file or have filed a written request therefor with the Trustee. Finance Authority Covenants with Respect to the Loan Agreement and the Building Authority Notes. The Finance Authority covenants and agrees that it will enforce or authorize the enforcement of all remedies available to it under the Loan Agreement and as the owner of the Building Authority Notes, unless the Finance Authority provides the Trustee with a Cash Flow Certificate to the effect that if such remedies are not enforced, Revenues expected to be received in each Fiscal Year, together with moneys expected to be held in the Funds and Accounts, will at least equal Debt Service (plus any Subsidy Payments) in each such Fiscal Year. However, decisions as to the enforcement of remedies will be within the sole discretion of the Trustee. The Trustee may enforce, in its name or in the name of the Finance Authority, all rights for and on behalf of the holders of the Bonds, except for the Unassigned Finance Authority’s Rights, and may enforce all covenants, agreements and obligations of the Building Authority under and pursuant to the Loan Agreement, regardless of whether the Finance Authority is in default in the pursuit or enforcement of those rights, covenants, agreements or obligations. The Finance Authority, however, will do all things and take all actions on its part necessary to comply with covenants, agreements, obligations, duties and responsibilities on its part to be observed or performed under the Loan Agreement, and will take all actions within its authority to keep the Loan Agreement in effect in accordance with the terms thereof. Annual Budget. The Finance Authority will prepare an annual budget that allocates the expenses incurred by the Finance Authority in an equitable manner among the various financing programs administered by the Finance Authority, as required by the Act, not later than June 1 of each year, and file the same with the Trustee, upon the written request of the Trustee. Such budget will be open to inspection by any Bondholder upon reasonable notice and subject to reasonable regulations established by the Trustee. Monitoring Investments. The Finance Authority covenants and agrees to regularly review the investments held by the Trustee in the Funds and Accounts for the purpose of assuring that the Revenues derived from such investments are sufficient, together with other anticipated Revenues, to provide for the payment of the debt service on Outstanding Bonds. The sole obligation of the Trustee with respect to the investment of monies held under any fund or account created under the Indenture will be to invest such monies in accordance with instructions received by it as set forth in the Indenture. Cash Flow Certificates. At any time that the provisions of the Indenture require that a Cash Flow Certificate be prepared, such certificate will set forth: (a) the Revenues expected to be received on all Building Authority Notes purchased by the Finance Authority with the proceeds of the Bonds for the purpose of making loans to the Building Authority pursuant to the Loan Agreement or with Revenues expected to be available for the purpose of financing the purchase of Additional Building Authority Notes; (b) all other Revenues, including the interest to be earned and other income to be derived from the investment of the Funds and Accounts and the rates or yields used in estimating such amounts; (c) all moneys expected to be in the Funds and Accounts (with respect to the Debt Service Reserve Account, only to the extent described in paragraph (d) below); (d) the amount, if any, expected to be withdrawn from the Debt Service Reserve Account, but only if the amount on deposit in the Debt Service Reserve Account is expected to at least equal the Debt Service Reserve Requirement immediately after such withdrawal and such withdrawal is permitted by the Indenture; C-1-44 (e) Year; and (f) the Debt Service (plus any Subsidy Payments) expected to be due during each Fiscal the amount, if any, of Program Expenses expected to be paid from the Revenues. In making any Cash Flow Certificate, the accountant, firm of accountants or other entity preparing the Cash Flow Certificate may contemplate the payment or redemption of Bonds, for the payment or redemption of which amounts have been set aside in the Redemption Account of the General Fund. The issuance of Bonds, the making of transfers from one Fund to another and the deposit of amounts in any Fund from any other source may be contemplated in a Cash Flow Certificate only to the extent that such issuance, deposit or transfer has occurred prior to or will occur substantially simultaneously with the delivery of such Cash Flow Certificate. The accountant, firm of accountants or other entity preparing the Cash Flow Certificate will also supply supporting schedules appropriate to show the sources and application of Revenues, identifying particularly amounts to be transferred between Funds, amounts to be applied to the redemption or payment of Bonds, amounts to be paid or received pursuant to Qualified Hedging Contracts or Reimbursement Obligations and amounts to be used to provide for Costs of Issuance, the debt service reserve and capitalized interest, if any, for the respective Series of Bonds. Such amounts will be the amounts as of the last day of the month preceding the month in which the Cash Flow Certificate is delivered, but will be adjusted to give effect to scheduled payments of principal of and interest on Building Authority Notes, expected payments and receipts under Qualified Hedging Contracts and Reimbursement Obligations, expected payments or proceeds with respect to Investment Securities and expected expenditures of cash by the Finance Authority through the end of the then current month. Finance Authority’s Certification of Debt Service Reserve Fund Deficiency. The Finance Authority covenants that, if it is projected that the Debt Service Reserve Account will be less than the Debt Service Reserve Requirement during the next succeeding Fiscal Year, the Chairman of the Finance Authority will certify such projected deficiency or amount projected to be required to restore the Debt Service Reserve Account to the Debt Service Reserve Requirement, including any amounts owed or which may become due and owing to a provider of a Debt Service Reserve Fund Credit Facility, to the General Assembly of the State on or before August 1 of the Fiscal Year in which the deficiency is projected to occur. The Finance Authority covenants and agrees that it will immediately take all action required or allowed under Indiana Code 4-4-11-15(a)(9), as amended from time to time, and the Indenture, to certify to the General Assembly of the State any deficiency in the Debt Service Reserve Account resulting from the amount on deposit therein or deemed to be on deposit therein being less than the Debt Service Reserve Requirement, or any amount necessary to restore the Debt Service Reserve Account to the Debt Service Reserve Requirement, including any amounts due and owing to a provider of a Debt Service Reserve Fund Credit Facility, regardless of whether such deficiency had been projected pursuant to the above paragraph. The Finance Authority’s obligations pursuant to the Indenture with respect to the Debt Service Reserve Account and the related moral obligation of the State with respect thereto will not terminate until all amounts due and payable from the Debt Service Reserve Account have been paid in full. Events of Default and Remedies Defaults; Events of Default. If any of the following events occurs, it is hereby defined as and declared to be and to constitute an “Event of Default” under the Indenture: (i) default in the due and punctual payment of any interest on any Bond; or (ii) default in the due and punctual payment of the principal of any Bond whether at the stated maturity thereof or on any date fixed for redemption; or (iii) default in the due and punctual payment of any hedge payment owed to a Qualified Hedging Contract Provider; or C-1-45 (iv) failure of the Finance Authority to remit to the Trustee within the time limits prescribed therein any moneys which are required by the Indenture to be so remitted; or (v) default in the performance or observance of any other of the covenants, agreements or conditions on the part of the Finance Authority contained in the Indenture or in the Bonds and failure to remedy the same within the time provided in, and after notice thereof pursuant to, the Indenture (see below “Notice of and Opportunity for the Finance Authority to Cure Certain Defaults”); or (vi) any warranty, representation or other statement by or on behalf of the Finance Authority contained in the Indenture or in any instrument furnished in compliance with or in reference to the Indenture is false or misleading, when made, in any material respect, and failure to remedy the same within the time provided in, and after notice thereof pursuant to, the Indenture (see below “Notice of and Opportunity for the Finance Authority to Cure Certain Defaults”); or (vii) Agreement; or the occurrence and continuation of an Event of Default as defined in the Loan (viii) the occurrence and continuation of an Event of Default as defined in the Lease; provided, however, that if the Lease is no longer then in effect, the occurrence and continuation of an Event of Default as defined in the Sublease; or (ix) the occurrence and continuation of an Event of Default (as defined in the Series 2008 A Standby Purchase Agreement), including, without limitation, a failure to pay any commitment fees thereunder, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder; or (x) a petition is filed against the Finance Authority under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction whether now or hereafter in effect and is not dismissed within 60 days after such filing; or (xi) the Finance Authority files a voluntary petition in bankruptcy or seeking relief under any provision of any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction whether now or hereafter in effect, or consents to the filing of any petition against it under such law; or (xii) the Finance Authority is generally not paying its debts as such become due or becomes insolvent or bankrupt or makes an assignment for the benefit of creditors, or a liquidator or trustee of the Finance Authority or any of its property is appointed by court order or takes possession of such property and such order remains in effect or such possession continues for more than 60 days; or (xiii) the Finance Authority fails to restore the Debt Service Reserve Account to the Debt Service Reserve Requirement within 60 days after the end of the Fiscal Year of the Finance Authority during which a deficiency in either Account occurs; or (xiv) the Finance Authority for any reason will be rendered incapable of fulfilling its obligations under the Indenture; or (xv) the receipt by the Trustee of written notice from the Series 2008 A-1 Index Floating Rate Bank of the occurrence and continuation of an “Event of Default” (as defined in the Series 2008 A-1 Continuing Covenant Agreement). Remedies; Rights of Bondholders. Upon the occurrence of an Event of Default, the Trustee will notify each Liquidity Provider, so long as the related Liquidity Facility remains in full force and effect and such Liquidity Provider is not in default thereunder, the Series 2008 A-1 Index Floating Rate Bank and the owners of all Bonds C-1-46 then Outstanding of such Event of Default by registered or certified mail, and will have the following rights and remedies: (i) 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 Bonds then Outstanding, including enforcement of any rights of the Finance Authority or the Trustee under the Loan Agreement or any Building Authority Note. (ii) The Trustee may by action at law or suit in equity require the Finance Authority to account as if it were the trustee of an express trust for the holders of the Bonds and may take such action with respect to the Loan Agreement or any Building Authority Note as the Trustee deems necessary or appropriate and in the best interest of the Bondholders, subject to the terms of the Loan Agreement or the Building Authority Notes. (iii) Upon the filing of a suit or other commencement of judicial proceedings to enforce any rights of the Trustee and the Bondholders under the Indenture, 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 will confer; provided, however, that, for so long as the Liquidity Facility is in full force and effect and the related Liquidity Provider is not in default thereunder, in the event of any reorganization or liquidation plan with respect to the Finance Authority, such Liquidity Facility (excluding, if the Finance Authority is the Series 2008 A-2 Liquidity Provider, the Series 2008 A-2 Liquidity Provider) will have the right to vote on behalf of the holders of the Bonds of each Subseries, the purchase price of which is secured by such Liquidity Facility. (iv) The Trustee may declare the principal (iv) of and accrued interest on all Bonds to be due and payable immediately in accordance with the Indenture and the Act, by notice to the Finance Authority and the Attorney General of the State; provided, however, for so long as (A) any Liquidity Facility is in full force and effect and the related Liquidity Provider is not in default thereunder, or (B) any Series 2008 A-1 Bond bears interest at a Series 2008 A-1 Index Floating Rate or constitutes a Series 2008 A-1 Unremarketed Bond, the Trustee may, with the consent of a Majority of Liquidity Providers, and shall, at the direction of any Liquidity Provider or the Series 2008 A-1 Index Floating Rate Bank (without the consent of any other party including, without limitation, any other Liquidity Provider) or the Owners of 25% or more in aggregate principal amount of all Bonds then Outstanding, with the consent of a Majority of Liquidity Providers, by written notice to the Finance Authority, the Attorney General of the State, each such Liquidity Provider and the Series 2008 A-1 Index Floating Rate Bank, declare the principal of the Bonds to be immediately due and payable, whereupon that portion of the principal of the Bonds thereby coming due and the interest thereon accrued to the date of payment shall, without further action, become and be immediately due and payable, anything in the Indenture or the Bonds to the contrary notwithstanding; provided, further, however, that upon the occurrence of an Event of Default (as defined in any Liquidity Facility) under any such Liquidity Facility or under the Series 2008 A-1 Continuing Covenant Agreement, all obligations of the Finance Authority to each Liquidity Provider and the Series 2008 A-1 Index Floating Rate Bank thereunder and under the Liquidity Provider Bonds held by each Liquidity Provider and the Series 2008 A-1 Unremarketed Bonds held by the Series 2008 A-1 Index Floating Rate Bank shall immediately and automatically become due and payable, without demand, presentment, protest, notice of intent to accelerate, notice of acceleration or further notice of any kind, all of which are hereby expressly waived. If an Event of Default has occurred, upon the request of the Owners of 25% or more in aggregate principal amount of all Bonds then Outstanding and if indemnified as provided in the Indenture, the Trustee will, except as otherwise described in the immediately preceding and immediately following paragraphs, be obligated to exercise such one or more of the rights, remedies and powers conferred by the Indenture as the Trustee, being advised by counsel, deems most expedient in the interests of the Bondholders. If an Event of Default under the Loan Agreement occurs and is continuing, the Trustee in its discretion may, and upon the written request of the Owners of a majority in aggregate principal amount of all Bonds then Outstanding or a Majority of Liquidity Providers, for so long as the related Liquidity Facility is in full force and effect and the related Liquidity Provider is not in default thereunder, and if indemnified as provided in the Indenture, or at the direction of any Liquidity Provider or Series 2008 A-1 Index Floating Rate Bank (without the consent of any other party including without limitation any other Liquidity Provider or Series 2008 A-1 Index Floating Rate Bank) will enforce each and every right granted to it as assignee of the Loan Agreement. Upon any declaration of C-1-47 acceleration under the Indenture, the Trustee will immediately exercise such rights as it may have under the Loan Agreement and the Building Authority Notes to declare all Building Authority Note Payments immediately due and payable. As the assignee of all right, title and interest of the Finance Authority in and to the Loan Agreement (except for the Unassigned Finance Authority’s Rights), the Trustee is empowered to enforce each remedy, right and power granted to the Finance Authority under the Loan Agreement. No right or remedy by the terms of the Indenture conferred upon or reserved to the Trustee (or to the Bondholders) is intended to be exclusive of any other right or remedy, but each and every such right or remedy will be cumulative and will be in addition to any other right or remedy given to the Trustee or to the Bondholders under the Indenture or now or hereafter existing at law or in equity or by statute. The assertion or employment of any right or remedy will not prevent the concurrent or subsequent assertion or employment of any other right or remedy. No delay or omission to exercise any right or remedy accruing upon any Event of Default will impair any such right or remedy or will 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. No waiver of any Event of Default under the Indenture, whether by the Trustee or by the Bondholders, will extend to or will affect any subsequent Event of Default or will impair any rights or remedies consequent thereon. Rights of Bondholders to Direct Proceedings. Anything in the Indenture to the contrary notwithstanding, but subject to the provisions described in the following subcaption, the Owners of a majority in aggregate principal amount of Bonds then Outstanding will 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 the Indenture, or for the appointment of a receiver or any other proceedings under the Indenture. However, such direction will not be otherwise than in accordance with the provisions of law and the Indenture. Rights of Liquidity Providers and Series 2008 A-1 Index Floating Rate Bank upon Default. Notwithstanding anything to the contrary set forth in the Indenture, so long as any Liquidity Facility remains in full force and effect and the related Liquidity Provider is not in default thereunder or the Series 2008 A-1 Continuing Covenant Agreement remains in full force and effect, the following provisions will apply: (i) The Trustee will, to the extent there are no other available funds held under the Indenture, use the remaining funds in the Proceeds Account of the Project Fund to pay principal of or interest on the Bonds and regularly scheduled hedge payments owed by the Finance Authority to the Qualified Hedging Contract Providers in the event of a payment default; provided, however, that this requirement to transfer the remaining funds in the Proceeds Account may be waived in the sole discretion of a Majority of Liquidity Providers. (ii) Any acceleration of the Bonds (other than a direction by any Liquidity Provider or Series 2008 A1 Index Floating Rate Bank pursuant to subparagraph (iv) or the penultimate paragraph of “Remedies; Rights of Bondholders” above to accelerate the Bonds, for which no consent shall be required) or any annulment thereof will be subject to the prior written consent of a Majority of Liquidity Providers. (iii) The Liquidity Providers and the Series 2008 A-1 Index Floating Rate Bank will receive immediate notice of any payment default and notice of any other Event of Default known to the Trustee within 30 days of the Trustee’s knowledge thereof. (iv) For all purposes of the Indenture governing Events of Default and remedies, except the giving of notice of an Event of Default to Bondholders, related Liquidity Provider (excluding, if the Finance Authority is the Series 2008 A Liquidity Provider, the Series 2008 A Liquidity Provider) providing the Liquidity Facility for the Bonds of any Subseries shall be deemed to be the sole holder of the Bonds of such Subseries, so long as it has not failed to comply with its funding obligations under the related Liquidity Facility. (v) The Trustee may only waive of an Event of Default with prior written consent of all Liquidity Providers and the Series 2008 A-1 Index Floating Rate Bank. C-1-48 (vi) Each such Liquidity Provider and the Series 2008 A-1 Index Floating Rate Bank will be included as parties in interest and as a party entitled to (i) notify the Finance Authority, the Trustee, if any, or any applicable receiver of the occurrence of an Event of Default and (ii) request the Trustee or receiver to intervene in judicial proceedings that affect the Bonds or the security therefor. The Trustee or receiver will be required to accept notice of an Event of Default from any such Liquidity Provider or Series 2008 A-1 Index Floating Rate Bank. Application of Moneys. All moneys received by the Trustee pursuant to any right or remedy given or action taken under the Indenture (including moneys received by virtue of action taken under the provisions of the Loan Agreement or any Building Authority Note) will, after payment of the costs and expenses of the proceedings resulting in the collection of such moneys and of the expenses, liabilities and advances incurred or made by the Trustee and any other moneys owed to the Trustee, and the creation of a reasonable reserve for anticipated fees, costs and expenses, be deposited in the General Account of the General Fund. All moneys in the General Account will be applied as follows: (i) be applied: Unless the principal of all the Bonds has become due and payable, all such moneys will FIRST - To the payment to the persons entitled thereto of all installments of interest then due on the Bonds and payments then due on any Parity Hedging Contract Obligations, including interest on any past due principal of any Bond at the rate borne by such Bond, in the order of the maturity of the installments of such interest, and, if the amount available is not sufficient to pay in full any particular installment, then to such payment ratably, according to the amounts due on such installment, 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 Bonds which have become due either at maturity or pursuant to a call for redemption (other than Bonds called for redemption, for the payment of which other moneys are held pursuant to the provisions of the Indenture), in the order of their due dates, and, if the amount available will not be sufficient to pay in full the principal of Bonds due on any particular date, 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; THIRD - To be held for the payment to the persons entitled thereto as the same will become due of the principal of and interest on the Bonds which may thereafter become due either at maturity or upon call for redemption prior to maturity, and if the amount available is not sufficient to pay in full the principal of and interest on Bonds due on any particular date, such payment will 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; and FOURTH - To be held for the payment to the persons entitled thereto as the same become due of the obligations of the Finance Authority under the Indenture in the order described under “Structure of Indenture Funds – Operation of the General Account,” except as otherwise described above. (ii) Notwithstanding anything in the Indenture to the contrary, if the principal of all the Bonds has become due or has been declared due and payable, all such moneys will be applied to the payment of the principal and interest then due and unpaid upon the Bonds (including Liquidity Provider Bonds and Series 2008 A-1 Unremarketed Bonds) or Parity Hedging Contract Obligations, without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bond (including Liquidity Provider Bonds and Series 2008 A-1 Unremarketed Bond) over any other Bond (including Liquidity Provider Bond and Series 2008 A-1 Unremarketed Bond), or of any Bonds (including any Liquidity Provider Bonds and Series 2008 A-1 Unremarketed Bonds) over Parity Hedging Contract Obligations or of Parity Hedging Contract Obligations over Bonds (including Liquidity Provider Bonds and Series 2008 A-1 Unremarketed Bonds), ratably, according to the amounts due respectively for principal, interest and Parity Hedging Contract Obligations, C-1-49 to the persons entitled thereto without any discrimination or privilege. Any remaining moneys will be applied to the payment to the persons entitled thereto of the obligations of the Finance Authority under the Indenture, which will have become due, in the order described under “Structure of Indenture Funds – Operation of the General Account,” except as otherwise described above. Such moneys will be applied at such times, and from time to time, as the Trustee determines, having due regard for the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee applies such funds, it will fix the date (which must be an Interest Payment Date unless the Trustee deems another date more suitable), upon which such application is to be made, and, upon such date, interest on the amounts of principal to be paid on such dates will cease to accrue. The Trustee will give such notice as it may deem appropriate of the deposit with it of any such moneys and of the fixing of any such date and will not be required to make payment of principal to the Owner of any Bond until such Bond is presented to the Trustee for appropriate endorsement or for cancellation if fully paid. Whenever all principal of and interest on all the Bonds have been paid under these provisions and all expenses and charges of the Trustee, the Tender Agent, the Remarketing Agent, the Paying Agent, the Auction Agent, the Broker-Dealer, the Credit Provider, the Liquidity Provider and the Series 2008 A-1 Index Floating Rate Bank have been paid, any balance remaining in the General Account will be paid as further provided in the Indenture. Remedies Vested in the Trustee. All rights of action (including the right to file proof of claims) under the Indenture or under any of the Bonds may be enforced by the Trustee without the possession of any of the Bonds or the production thereof in any trial or other proceeding related thereto, and any such suit or proceeding instituted by the Trustee will be brought in its name as Trustee without the necessity of joining as plaintiffs or defendants any Owners of the Bonds, and any recovery of judgment will be for the equal and ratable benefit of the Owners of all the Outstanding Bonds. Rights and Remedies of Bondholders. No Owner of any Bond will have any right to institute any suit, action or proceeding at law or in equity for the enforcement of the Indenture or for the execution of any trust thereof or for the appointment of a receiver or any other remedy under the Indenture, unless (i) a Default has occurred, (ii) such Default has become an Event of Default and the Owners of not less than 25% in aggregate principal amount of Bonds then Outstanding have made written request to the Trustee and have offered it reasonable opportunity either to proceed to exercise the remedies granted in the Indenture or to institute such action, suit or proceeding in its own name, (iii) such Owners of Bonds have offered to the Trustee indemnity as provided in the Indenture, and (iv) the Trustee has refused, or for 60 days after receipt of such request and offer of indemnification has failed, to exercise the remedies granted by the Indenture or to institute such action, suit or proceeding in its own name. The Trustee agrees to enforce the obligations owed to any Qualified Hedging Contract Provider under the Indenture at the direction of such Qualified Hedging Contract Provider. However, the Trustee need not take any such action until such Qualified Hedging Contract Provider has provided the Trustee with a satisfactory indemnity bond pursuant to the provisions of the Indenture. Such request and offer of indemnity are declared in every case at the option of the Trustee to be conditions precedent to the execution of the powers and trusts of the Indenture, and to any action or cause of action for the enforcement of the Indenture, or for the appointment of a receiver or for any other remedy under the Indenture. No one or more Owners of the Bonds will have any right in any manner whatsoever to affect, disturb or prejudice the lien of the Indenture by its, his, her or their action or to enforce any right thereunder, except in the manner therein provided, and that all proceedings at law or in equity will be instituted, had and maintained in the manner therein provided and for the equal and ratable benefit of the Owners of all Bonds then Outstanding. However, nothing contained in the Indenture will affect or impair the right of any Bondholder to enforce the payment of the principal of and interest on any Bond at and after the maturity thereof or the limited obligation of the Finance Authority to pay the principal of and interest on each of the Bonds issued under the Indenture to the respective Owners thereof at the time and place, from the sources and in the manner expressed in the Bonds. Waivers of Events of Default. The Trustee, with the consent of all Liquidity Providers, so long as any Liquidity Facility remains in full force and effect and the related Liquidity Provider is not in default thereunder, and the Series 2008 A-1 Index Floating Rate Bank may at its discretion waive any Event of Default hereunder and its consequences, and, subject to subparagraph (v) of “Rights of Liquidity Providers upon Default” above, do so upon the written request of the Owners of (a) more than 66 2/3% in aggregate principal amount of all the Bonds then C-1-50 Outstanding, with respect to which an Event of Default in the payment of principal or interest exists, or (b) more than 50% in aggregate principal amount of all Bonds then Outstanding in the case of any other Event of Default. However, there will not be waived (x) any Event of Default in the payment of the principal of any Outstanding Bond at the date of maturity specified therein or (y) any Event of Default in the payment when due of the interest on any Outstanding 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 Bond, and all expenses of the Trustee, the Tender Agent, the Remarketing Agent, the Paying Agent, the Credit Provider, the Liquidity Provider and the Series 2008 A-1 Index Floating Rate Bank in connection with such Event of Default have been paid or provided for. In case of any such waiver or rescission, or in case any proceeding taken by the Trustee on account of any such Event of Default has been discontinued or abandoned or determined adversely, then and in every such case, the Finance Authority, the Trustee, the Bondholders, and each Liquidity Provider, so long as the related Liquidity Facility remains in full force and effect and such Liquidity Provider is not in default thereunder, and the Series 2008 A-1 Index Floating Rate Bank will be restored to their former positions and rights under the Indenture, but no such waiver or rescission will extend to any subsequent or other Event of Default, or impair any rights consequent thereon. Notice of and Opportunity for the Finance Authority to Cure Certain Defaults. Anything in the Indenture to the contrary notwithstanding, no Default under subparagraphs (v) and (vi) of the definitions of Event of Default (see “Defaults; Events of Default”) will constitute an Event of Default until actual notice of such Default by registered or certified mail has been given to the Finance Authority by the Trustee or the owners of not less than 25% in aggregate principal amount of all Bonds then Outstanding and the Finance Authority has had 30 days after receipt of such notice to correct the Default or cause the Default to be corrected and has not corrected the Default or caused the Default to be corrected within the applicable period. If a Default is cured, then it will not constitute an Event of Default. With regard to any alleged Default, concerning which notice is given to the Finance Authority, the Finance Authority grants to the Trustee full authority for the account of the Finance Authority to perform any covenant or obligation, the failure of the performance of which is alleged in such notice to constitute a Default, in the name and stead of the Finance Authority, with full power to do any and all things and acts to the same extent that the Finance Authority could do and perform any and all such things and acts and with the power of substitution therefor. Discharge of Indenture Provisions Applicable to the Bonds. Except as described below, if (i) payment or provision for payment is made, to the Trustee, of the principal of and interest due and to become due on the Bonds at the times and in the manner stipulated therein, and there is paid or caused to be paid to the Trustee all sums of money due and to become due according to the provisions hereof, and (ii) payment or provision for payment also will be made for the payment of all other sums payable under the Indenture and under the Loan Agreement and the Building Authority Notes, then the Trust Estate and rights granted by the Indenture will cease, terminate and be void, whereupon the Trustee will cancel and discharge the lien of the Indenture, and execute and deliver to the Finance Authority such instruments in writing as will be requisite to cancel and discharge the lien hereof, and release, assign and deliver unto the Finance Authority the estate, right, title and interest in and to any and all rights assigned or pledged to the Trustee hereby or otherwise subject to the lien of the Indenture, except moneys or securities held by the Trustee for the payment of the principal of and interest on the Bonds. Any Bond will be deemed to be paid within the meaning of the Indenture when (i) payment of the principal of such Bond and interest thereon to the due date thereof (whether such due date is by reason of maturity or upon redemption as provided in the Indenture or otherwise), either (A) has been made or caused to have been made in accordance with the terms thereof, or (B) have been provided for by irrevocably depositing with the Trustee, in trust and exclusively for such payment, (I) moneys (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized by Governmental Obligations) sufficient to make such payment or (II) Governmental Obligations maturing as to principal and interest in such amounts and at such times, without consideration of any reinvestment thereof, as will insure the availability of sufficient moneys to make such payment, or (III) a combination of such moneys and Governmental Obligations, and (ii) all Parity Hedging Contract Obligations, Subordinate Hedging Contract Obligations, Reimbursement Obligations and all necessary and proper fees and C-1-51 expenses of the Trustee, the Tender Agent, the Remarketing Agent, the Paying Agent, the Auction Agent, the Broker-Dealer, the Qualified Hedging Contract Providers and the providers of Reimbursement Obligations, pertaining to the Bonds, including the amount, if any, required to be rebated to the United States of America, with respect to which such deposit is made, has been paid or deposited with the Trustee. Notwithstanding the foregoing, in the case of Bonds, which are not then in the Fixed Rate Mode and which by their terms may be redeemed prior to their stated maturity, no deposit under this subsection shall be deemed a payment of such Bonds as aforesaid, unless the Trustee receives a Rating Confirmation Notice with respect to such Bonds. Notwithstanding the foregoing, in the case of Bonds which by their terms may be redeemed prior to their stated maturity, no deposit as described under the previous paragraph above will be deemed a payment of such Bonds as aforesaid until the Finance Authority has given the Trustee, in form satisfactory to the Trustee, irrevocable instructions: (i) stating the date when the principal of each such Bond is to be paid, whether at maturity or on a redemption date (which will be any redemption date permitted by the Indenture); (ii) to call for redemption pursuant to the Indenture any Bonds to be redeemed prior to maturity pursuant to the provision described in clause (i) above; and (iii) to mail, as soon as practicable, a notice to the owners of such Bonds that the deposit required by the provision described in clause (i) (B) of the previous paragraph has been made with the Trustee and that said Bonds are deemed to have been paid in accordance with the Indenture and stating the maturity or redemption date upon which moneys are to be available for the payment of the principal of or redemption price, if applicable, on such Bonds as specified in the provision described in clause (i) above. If there has been deposited with the Trustee, in trust, at or before maturity, money or Governmental Obligations in the necessary amount (i) to pay or redeem all Outstanding Bonds (whether upon or prior to their maturity or the redemption date of such Bonds), and (ii) to pay all necessary and proper fees and expenses of the Trustee, the Tender Agent, the Remarketing Agent, the Paying Agent, the Qualified Hedging Contract Providers and the providers of Reimbursement Obligations pertaining to the Bonds, including the amount, if any, required to be rebated to the United States of America, the Finance Authority will give the Trustee, in form satisfactory to the Trustee, the irrevocable instructions described above. Any moneys so deposited with the Trustee may, at the direction of the Finance Authority, also be invested and reinvested in Governmental Obligations maturing in the amounts and times as described above, and all income from all Governmental Obligations in the hands of the Trustee pursuant to the Indenture which is not required for the payment of the Bonds and interest thereon, with respect to which such moneys have been so deposited, will be deposited in the General Account of the General Fund as and when realized and collected for use and application as are other moneys deposited in that Account. No such deposit will be made or accepted under the Indenture and no use made of any such deposit unless the Trustee has received an Opinion of Bond Counsel to the effect that such deposit and use would not cause any of the Bonds to be treated as arbitrage bonds within the meaning of Section 148 of the Code, or the Series 2009 B Bonds to lose their status as “qualified bonds” within the meaning of Section 54AA(g) of the Code. Moreover, no such deposit will be deemed a payment of such Bonds, unless the Trustee has received a verification from an accountant or firm of accountants appointed by the Finance Authority and acceptable to the Trustee verifying the sufficiency of the deposit to pay the principal of, premium, if any, and interest on the Bonds to the due date. If there has been deposited with the Trustee, in trust, at or before maturity, money or Governmental Obligations in the necessary amount to pay or redeem all Outstanding Bonds as described above (whether upon or prior to their maturity or the redemption date of such Bonds), and, in the event such Bonds are to be redeemed prior to the maturity thereof, if notice of such redemption has been given or provisions satisfactory to the Trustee have been made for the giving of such notice and provisions satisfactory to the Trustee will have been made for complying with the other payment requirements of the Indenture, and an Opinion of Counsel delivered to the Trustee that any and all conditions precedent to the satisfaction and discharge of the Indenture have been complied with, then the Indenture may be discharged, but the limited liability of the Finance Authority with respect to such Bonds will continue. However, the Owners thereof will thereafter be entitled to payment only out of the moneys or direct obligations of the United States of America deposited with the Trustee as set forth above. C-1-52 Supplemental Indentures, Loan Agreements, Revenue Deposit Agreements, Subleases and Leases and Amendments to Related Documents Supplemental Indentures not Requiring Consent of Bondholders. The Finance Authority and the Trustee may, with the consent of the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not in default thereunder, and the Series 2008 A-1 Index Floating Rate Bank, but, without the consent of, or notice to, any of the Bondholders, enter into an indenture or indentures supplemental to the Indenture: (a) for any one or more of the following purposes: (i) to cure any ambiguity or formal defect or omission in the Indenture; (ii) to grant to or confer upon the Trustee for the benefit of the Bondholders any additional benefits, rights, remedies, powers or authorities that may lawfully be granted to or conferred upon the Bondholders or the Trustee, or to make any change which, in the judgment of the Trustee, does not materially and adversely affect the interest of the Owners of Outstanding Bonds and does not require the unanimous consent of the Bondholders, as described below under the subcaption “Supplemental Indentures Requiring Consent of Bondholders;” (iii) or collateral; to subject to the lien and pledge of the Indenture additional Revenues, properties (iv) to modify, amend or supplement the Indenture or any indenture supplemental thereto in such manner as to permit the qualification hereof and thereof under the Trust Indenture Act of 1939 or any similar federal statute hereafter in effect or to permit the qualification of 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, and, if they so determine, to add to the Indenture or any indenture supplemental thereto such other terms, conditions and provisions as may be permitted by the Trust Indenture Act of 1939 or similar federal statute; (v) to evidence the appointment of a separate or co-trustee or the succession of a new Trustee, registrar, Paying Agent, Tender Agent and/or Remarketing Agent; (vi) in connection with the issuance of Additional Bonds or Refunding Bonds; (vii) to provide for the refunding of all or a portion of the Bonds; (viii) to amend the Indenture to permit the Finance Authority to comply with any future federal tax law or any covenants contained in any Supplemental Indenture with respect to compliance with future federal tax law; and (ix) to evidence any succession to the Finance Authority and the assumption by its successor of the covenants, agreements and obligations of the Finance Authority under the Indenture, the Loan Agreement and the Bonds; or (b) in any way (i) on any Mandatory Purchase Date and (ii) at any time during the Daily Mode and the Weekly Mode provided that notice of such amendment is given by first-class mail to each Owner of Bonds at least 30 days prior to the effective date of such amendment. Supplemental Indentures Requiring Consent of Bondholders. Exclusive of Supplemental Indentures provided for as described above under the subcaption “Supplemental Indentures not Requiring Consent of Bondholders,” and subject to the terms and provisions described under this subcaption, and not otherwise, the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding which are affected (exclusive of Bonds held by the Finance Authority) have the right, from time to time, anything contained in the C-1-53 Indenture to the contrary notwithstanding, to consent to and approve the execution by the Finance Authority and the Trustee of such other indenture or indentures supplemental to the Indenture as is deemed necessary and desirable by the Finance Authority or the Trustee for the purpose of modifying, altering, amending, adding to, or rescinding, in any particular, any of the terms or provisions contained in the Indenture or any Supplemental Indenture, but only with the express written consent of the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder, and the Series 2008 A-1 Index Floating Rate Bank. However, nothing contained in the Indenture will permit, or be construed as permitting, without the consent of the Owners of all the Bonds then Outstanding, (i) an extension of a Principal Payment Date, an Interest Payment Date or a redemption date for any Bond, or (ii) a reduction in the principal amount of any Bond or change in the rate of interest or redemption premium, or (iii) a privilege or priority of any Bond or Bonds over any other Bond or Bonds, or (iv) a reduction in the aggregate principal amount of the Bonds required for consent to such Supplemental Indenture, or (v) the creation of any lien securing any Bonds other than a lien ratably securing all of the Bonds at any time Outstanding, or (vi) a reduction in the Debt Service Reserve Requirement, or (vii) any amendment or supplement that would materially, adversely affect a Qualified Hedging Contract Provider, which will also require the consent of any such Qualified Hedging Contract Provider, or (viii) any modification of the trusts, powers, rights, obligations, duties, remedies, immunities and privileges of the Trustee, which will also require the written consent of the Trustee. If at any time the Finance Authority requests the Trustee to enter into any such Supplemental Indenture for any of the above purposes, the Trustee will, upon being satisfactorily indemnified with respect to expenses, cause notice of the proposed execution of such Supplemental Indenture to be mailed by registered or certified mail to each Owner of a Bond at the address shown on the registration books maintained by the Trustee. Such notice will briefly set forth the nature of the proposed Supplemental Indenture and state that copies thereof are on file at the corporate trust office of the Trustee for inspection by all Bondholders. If, within 60 days or such longer period as is prescribed by the Finance Authority following the mailing of such notice, the Owners of not less than a majority in aggregate principal amount of the Bonds Outstanding at the time of the execution of any such Supplemental Indenture (exclusive of Bonds held by the Finance Authority) have consented to and approved the execution of such Supplemental Indenture, no owner of any Bond will 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 execution thereof, or to enjoin or restrain the Trustee or the Finance Authority from executing the same or from taking any action pursuant to the provisions thereof. In accordance with the provisions of paragraph (b) of “Supplemental Indentures not Requiring Consent of Bondholders” above, the holders of variable rate bonds shall be deemed to have consented to amendments adopted pursuant to the provisions of that paragraph, as well as any amendments to the Loan Agreement and the Revenue Deposit Agreement Supplemental Loan Agreements and Supplemental Revenue Deposit Agreements Not Requiring Consent of Bondholders. The Finance Authority may, with the consent of the Trustee and the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not in default thereunder, and the Series 2008 A-1 Index Floating Rate Bank, but without the consent of, or notice to, any of the Bondholders, enter into any Supplemental Loan Agreement or Supplemental Revenue Deposit Agreement acceptable to the Building Authority as may be required: (i) to cure any ambiguity or formal defect or omission, which does not adversely affect the interest of the Bondholders; (ii) to grant or pledge to the Finance Authority or the Trustee, for the benefit of the Bondholders, any additional security; or (iii) in connection with any other change therein, which, in the judgment of the Trustee acting in reliance upon an Opinion of Counsel, is not to the prejudice of the Trustee and the Bondholders. Supplemental Loan Agreements and Supplemental Revenue Deposit Agreements Requiring Consent of Bondholders. Except for supplements described in the preceding subcaption, the Finance Authority may not enter into, and the Trustee may not consent to, any other Supplemental Loan Agreement or Supplemental Revenue Deposit Agreement, nor will any such modification or amendment become effective, without the consent of the Owners of not less than a majority of the aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds held by the Finance Authority), and the consent of the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not in default thereunder, and the Series 2008 A-1 Index Floating Rate Bank. No such Supplemental Loan Agreement or C-1-54 Supplemental Revenue Deposit Agreement may, without the consent of the Owners of all the Bonds then Outstanding and the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not then in default thereunder, reduce the amounts or delay the times of payment of Building Authority Note Payments. If at any time, the Finance Authority requests the consent of the Trustee to any Supplemental Loan Agreement or Supplemental Revenue Deposit Agreement, the Trustee will cause notice of such proposed Supplemental Loan Agreement or Supplemental Revenue Deposit Agreement to be given in the same manner as notice is given with respect to Supplemental Indentures. Such notice will briefly set forth the nature of such proposed Supplemental Loan Agreement or Supplemental Revenue Deposit Agreement and will state that a copy of such Supplemental Loan Agreement or Supplemental Revenue Deposit Agreement is on file at the corporate trust office of the Trustee for inspection by all Bondholders. The Trustee will not, however, be subject to any liability to any Owner by reason of its failure to mail such notice to any particular Bondholder, if notice was generally mailed to Bondholders, and any such failure will not affect the validity of such Supplemental Loan Agreement or Supplemental Revenue Deposit Agreement when consented to and approved. If the Owners of a majority in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds held by the Finance Authority) at the time of the execution of any such Supplemental Loan Agreement or Supplemental Revenue Deposit Agreement consent to the execution thereof as therein provided, no Owner of any Bond will 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 execution thereof, or to enjoin or restrain the Trustee or the Finance Authority from executing the same or from taking any action pursuant to the provisions thereof. Amendments, Changes and Modifications to any Liquidity Facility and Building Authority Note. Except as otherwise provided in the Indenture, subsequent to the initial issuance of the Bonds and prior to payment of the Bonds in full (or provision for the payment thereof having been made in accordance with the provisions of the Indenture), any Liquidity Facility may not be amended, changed or modified without the prior written consent of the Trustee. The Trustee may, without the consent of the Owners of the Bonds, consent to any amendment of a Liquidity Facility as may be required for purposes of curing any ambiguity, formal defect or omission, which, in the Trustee’s judgment, acting in reliance upon an Opinion of Counsel, does not prejudice in any material respect the interests of the Bondholders. Except as described in the preceding paragraph, any Liquidity Facility may be amended only with the consent of the Finance Authority, the Trustee, and the Owners of a majority in aggregate principal amount of Bonds then Outstanding (exclusive of Bonds held by the Finance Authority), except that no such amendment may be made, which would reduce the amounts required to be paid thereunder, extend the time for payment of such amounts or accelerate the stated termination date of the Liquidity Facility without the written consent of the Owners of all the Bonds then Outstanding. The Trustee may, with the consent of the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not in default thereunder, and the Series 2008 A-1 Index Floating Rate Bank, but without the consent of the Owners of the Bonds, consent to any amendment of a Building Authority Note as may be required for purposes of curing any ambiguity, formal defect or omission, which, in the Trustee’s judgment, acting in reliance upon an Opinion of Counsel, does not prejudice in any material respects the interests of the Bondholders. Except for such amendments, a Building Authority Note may be amended only with the consent of the Finance Authority, the Trustee, the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not in default thereunder, the Series 2008 A-1 Index Floating Rate Bank and the Owners of a majority in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds held by the Finance Authority), except that no such amendment may be made, which would reduce the amounts required to be paid or the time for payment of such amounts under the Building Authority Note without the written consent of the Owners of all the Bonds then Outstanding. Amendments, Changes and Modifications to any Credit Facility, Debt Service Reserve Fund Credit Facility or Qualified Hedging Contract Not Requiring Consent of Bondholders. The Finance Authority may, with the consent of the Trustee and the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement C-1-55 remains in full force and effect and the Series 2008 A Bank is not in default thereunder, and the Series 2008 A-1 Index Floating Rate Bank, but without the consent of, or notice to, any of the Bondholders, consent to any amendment, change or modification of any Credit Facility, Debt Service Reserve Fund Credit Facility or Qualified Hedging Contract: (i) which may be required or permitted without Bondholder consent by the Indenture; (ii) for the purpose of curing any ambiguity or formal defect or omission; (iii) to reconcile any Credit Facility, Debt Service Reserve Fund Credit Facility or Qualified Hedging Contract with any Supplemental Indenture; or (iv) to effect any other change in any Credit Facility, Debt Service Reserve Fund Credit Facility or Qualified Hedging Contract, which, in the judgment of the Finance Authority and the Trustee, will not materially prejudice any nonconsenting Bondholder. Amendments, Changes and Modifications to any Credit Facility, Debt Service Reserve Fund Credit Facility or Qualified Hedging Contract Requiring Consent of Bondholders. Except for amendments, changes or modifications described in the preceding paragraph, neither the Finance Authority nor the Trustee may consent to any other amendment, change or modification of any Credit Facility, Debt Service Reserve Fund Credit Facility or Qualified Hedging Contract, without the consent of the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not in default thereunder, the Series 2008 A-1 Index Floating Rate Bank and the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds held by the Finance Authority). However, in no event will such amendment, change or modification relieve the Finance Authority of the obligation under any Credit Facility, Debt Service Reserve Fund Credit Facility or Qualified Hedging Contract to make when and as due any payments required for the payment of the principal, interest and any premium due or to become due on the Bonds, without the consent of the Owners of all the Bonds then Outstanding adversely affected thereby. If at any time, the Finance Authority requests the consent of the Trustee to any such proposed amendment, change or modification of any Credit Facility, Debt Service Reserve Fund Credit Facility or Qualified Hedging Contract, the Trustee will cause notice of such proposed amendment, change or modification to be given in the same manner as notice is given with respect to Supplemental Indentures. Such notice will briefly set forth the nature of such proposed amendment, change or modification and will state that copies of the instrument embodying the same are on file at the corporate trust office of the Trustee for inspection by all Bondholders. The Trustee will not, however, be subject to any liability to any Owner by reason of its failure to mail such notice to any particular Bondholder, if notice was generally mailed to Bondholders, and any such failure will not affect the validity of such amendment, change or modification when consented to and approved as provided in the Indenture. If the Owners of a majority in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds held by the Finance Authority) at the time of the execution of any such amendment, change or modification consent to the execution thereof as therein provided, no Owner of any Bond will 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 execution thereof or to enjoin or restrain the Trustee or the Finance Authority from executing the same or from taking any action pursuant to the provisions thereof. Finance Authority Covenants with respect to Supplemental Subleases and Supplemental Leases. The Finance Authority covenants that it will not consent to the execution of any Supplemental Sublease or Supplemental Lease, which would substantially impair or reduce the security of the holders of the Bonds, or agree to the termination thereof or agree to a reduction of the lease rental provided for therein, which would inhibit the payment of debt service on the Bonds or any Parity Hedging Contract Obligations owed to the Hedging Contract Providers, until all indebtedness secured by the Indenture is fully paid. The Finance Authority covenants that any Supplemental Sublease and Supplemental Lease entered into in connection with the issuance of Additional Bonds and the acquisition of Additional Building Authority Notes pursuant to a Supplemental Loan Agreement will require lease rental payments in an amount necessary to pay all principal of and interest on such Additional Bonds until fully paid, plus any additional amounts that will be owed by the Finance Authority on account of such Additional Bonds. Waivers. The Trustee will not waive on its own behalf or on behalf of the Finance Authority any obligations of the Building Authority under the Loan Agreement without the consent of the Series 2008 A Bank, so long as the Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not in default thereunder, and the Trustee will do so if directed by the Series 2008 A Bank, for so long as the C-1-56 Series 2008 A Standby Purchase Agreement remains in full force and effect and the Series 2008 A Bank is not in default thereunder and the Series 2008 A-1 Index Floating Rate Bank. Notice to Rating Agencies. The Finance Authority will send to each of the Rating Agencies for their receipt at least 15 days in advance of their execution any amendment or supplement to the Indenture, the Loan Agreement, the Revenue Deposit Agreement, any Liquidity Facility, any Building Authority Note, any Credit Facility, any Debt Service Reserve Fund Credit Facility, any Qualified Hedging Contract, the Lease or the Sublease. The Finance Authority will send notice to the Rating Agencies of: (a) any change in the Trustee, the Tender Agent or the Remarketing Agent; (b) any extension, substitution, expiration or termination of a Liquidity Facility; (c) any change in the Mode of any Bond; (d) any redemption or defeasance of all the Outstanding Bonds; (e) any mandatory tender or acceleration of the Bonds; and (f) any other information that the Rating Agencies may reasonably request in order to maintain a rating on the Bonds. THE LOAN AGREEMENT The following is a brief description of certain provisions of the Loan Agreement and does not purport to comprehensively describe that document. Pledged Property Under the Loan Agreement, in order to secure the payment of all amounts payable on the Notes and the performance of the covenants of the Building Authority in the Loan Agreement, the Building Authority has granted to the Finance Authority a security interest in the Pledged Property. Issuance of Bonds and Notes; Completion of the Stadium Project Issuance of the Bonds; Application of Proceeds. To provide funds to make a portion of the Loan for purposes of (i) the refunding of all of the Series 2008 A-1 Bonds and a portion of the Series 2008 A-2 Bonds, (ii) the payment of the termination value of the 2005 Qualified Hedging Contract and (iii) the payment of the Costs of Issuance of the Series 2015 A Bonds, the Finance Authority will issue, sell and deliver the Series 2015 A Bonds, pursuant to and subject to the terms set forth in the Indenture. Pursuant to the Loan Agreement, the Finance Authority will loan the proceeds of the Series 2015 A Bonds to the Building Authority by purchasing the Series 2015 A Building Authority Note and depositing such proceeds into the Purchase Account of the General Fund (the “Purchase Account”) as specified in the Indenture. Pursuant to the Indenture, such proceeds will be transferred from the Purchase Account to the Bond Issuance Expense Account of the General Fund, to the Redemption Account of the General Fund (the “Redemption Account”) and to the General Account of the General Fund. The proceeds of the Series 2015 A Bonds deposited in the Redemption Account shall be disbursed in accordance with the Indenture. Pending disbursement pursuant to the Indenture, the proceeds deposited in the General Fund, together with any investment earnings thereon, shall constitute a part of the Revenues assigned by the Finance Authority to the Trustee as provided in the Indenture. At the request of the Building Authority, and for the purposes and upon fulfillment of the conditions specified in the Indenture, the Finance Authority may provide for the issuance, sale and delivery of Additional Bonds and loan the proceeds from the sale thereof to the Building Authority. See “Additional Building Authority Notes” below. If the unexpended proceeds of the sale of a prior Note remain in the Project Fund into which proceeds of the sale of an Additional Building Authority Note are to be deposited upon the issuance of Additional Bonds, the Trustee will establish a separate subaccount within that Project Fund, for accounting purposes, for the deposit of the proceeds of the sale of such Additional Building Authority Note to be disbursed in accordance with the terms of the Loan Agreement or any supplement thereto. Project Fund. Pursuant to the Loan Agreement, the Building Authority agrees to acquire, construct, and equip the Convention Center Expansion Project in the manner provided in the Development Agreement. Disbursements from the proceeds of the sale of the Bonds which are deposited in the Project Fund may be used to pay (or to reimburse the Building Authority for the payment of), the costs of the Convention Center Expansion Project as permitted by the Act. C-1-57 Any moneys in the Project Fund from the proceeds of the Bonds remaining after the Completion Date, and payment, or provision for payment, of the costs of financing the Convention Center Expansion Project described above, may be used at the direction of the Building Authority: (i) to acquire, renovate, construct, install and equip such additional real or personal property in connection with the Convention Center Expansion Project, provided that any such use will be accompanied by an opinion of Bond Counsel to the effect that the acquisition of such additional property will not result in the interest on the Series 2008 A Bonds or Series 2009 A Bonds becoming included in gross income for federal income tax purposes, or for the Series 2009 B Bonds not to be “qualified bonds” within the meaning of Section 54AA(g) of the Code; (ii) for the optional redemption, or purchase in the open market for the purpose of the cancellation of the Bonds; or (iii) to accomplish a combination of the foregoing. Insurance and Condemnation Proceeds; Performance Bonds. The Trustee will deposit in the Project Fund any moneys representing insurance or condemnation proceeds received by the Trustee pursuant to the Sublease which will be used for the reconstruction or replacement of all or a portion of the Facilities, or representing the proceeds of contractors’ performance bonds related to such reconstruction or replacement. The Building Authority agrees that the Board will be entitled to receive required disbursements from such insurance or condemnation proceeds deposited in the Project Fund in connection with the repair and restoration of such Facilities which are required to be repaired and restored pursuant to the Sublease. Investment of Funds. All moneys held as part of any Fund or Account created under or held pursuant to the Indenture, including the Project Fund, will be invested or reinvested by the Trustee pursuant to the terms of the Indenture. The Trustee will invest amounts in the Project Fund in investments maturing on such dates and in such amounts as are required to timely pay the costs of the design, acquisition, construction and equipping of the Convention Center Expansion Project. Loan from Finance Authority; Issuance of Notes Purchase of Series 2015 A Building Authority Note. Upon the terms and conditions of the Loan Agreement, the Finance Authority will make a portion of the Loan to the Building Authority through the purchase of the Series 2015 A Building Authority Note. In consideration of and in repayment of the Loan, the Building Authority will make Loan Payments as more particularly provided in the Prior Notes, the Series 2015 A Building Authority Note and any Additional Note. Special and Limited Obligations of Building Authority. The Building Authority is only obligated to make Loan Payments, Additional Payments or other amounts due under the terms of the Notes to the extent that it receives payments from the OMB under the Lease. The Notes, the Loan Agreement and the obligations of the Building Authority thereunder are special and limited obligations of the Building Authority, payable solely out of the Pledged Property and do not constitute a pledge of the faith and credit of the Building Authority or an indebtedness or charge against the general credit or taxing powers of the State. Additional Payments. The Building Authority will pay or cause to be paid to the Finance Authority, as Additional Payments under the Loan Agreement: (i) all expenses incurred by the Finance Authority in connection with the Facilities, including, without limitation, the fees and expenses of the Trustee, the Paying Agent, the registrar and the Tender Agent under the Indenture and the Remarketing Agent under the Remarketing Agreements, and, to the extent not included within the meaning of Debt Service, 100% of any amount owed by the Finance Authority to any Qualified Hedging Contract Provider or provider of a Reimbursement Obligation; and (ii) any amount of principal and interest due on the Bonds which is required to be paid by any Qualified Hedging Contract Provider or provider of a Reimbursement Obligation, but is not so paid by such Qualified Hedging Contract Provider or provider of a Reimbursement Obligation as a result of a default thereby. Additional Building Authority Notes. So long as no Event of Default has occurred and is continuing under the Loan Agreement, the Building Authority from time to time may issue and sell to the Finance Authority (but only to the Finance Authority) one or more Additional Building Authority Notes pursuant to the Loan Agreement. Any Additional Building Authority Note will be (i) issued only in connection with the issuance of Additional Bonds, (ii) lettered to correspond with the Series of Additional Bonds the proceeds of which are being used to make the loan to the Building Authority evidenced by such Additional Building Authority Note, (iii) C-1-58 substantially in the form of the Notes (with appropriate variations or insertions), (iv) be pledged and assigned by the Finance Authority to the Trustee as security for a corresponding series of Additional Bonds concurrently issued and sold under the Indenture, (v) be issued in the same principal amount as such corresponding series of Additional Bonds, (vi) be issued with the same final maturity date as such corresponding series of Additional Bonds, (vii) be issued with the same rate or rates of interest payable at the same time or times as such corresponding series of Additional Bonds, and (viii) require payments of installments of principal in the same amounts and at the same time as any redemptions or payments of principal of such corresponding series of Additional Bonds. Upon the issuance and sale of any Additional Building Authority Notes, the same will, together with any other Note then outstanding, be equally and ratably secured by the lien of the Loan Agreement on the Pledged Property and any other property mortgaged or assigned as collateral for the Notes. It is the intent that the rights and remedies of the holders of the Notes be equal and pari passu and nothing contained in the Loan Agreement or any supplement thereto will be deemed to give the holders of any Notes any rights or remedies superior or inferior to the rights and remedies of the holder or holders of any other Notes. Prepayment of Notes Optional Prepayment. Provided no Event of Default has occurred and is continuing at any time and from time to time, the Building Authority may deliver moneys to the Trustee in addition to Loan Payments or Additional Payments required to be made and direct the Trustee to use the moneys so delivered for the purpose of purchasing or optionally redeeming Bonds, including the payment of any premium due on the Bonds and any corresponding termination payment related to a Qualified Hedging Contract. Extraordinary Mandatory Prepayment. The proceeds of any insurance against damage to or destruction of the Facilities or proceeds of any condemnation award with respect to all or a portion of the Facilities which are received by the Trustee pursuant to the Lease and used by the Trustee to redeem Bonds pursuant to the Indenture, including any corresponding termination payment related to a Qualified Hedging Contract, will constitute a prepayment of the Notes. Actions by Financing Authority. At the request of the Building Authority or the Trustee, the Finance Authority is required to take all steps required of it under the applicable provisions of the Indenture or the Bonds to effect the redemption of all or a portion of the Bonds. Additional Covenants of the Building Authority Under the Loan Agreement, the Building Authority covenants that it will: (i) exercise its rights under and enforce the Lease, the Sublease and the Revenue Deposit Agreement, including, but not limited to, the paying of all amounts due to the Building Authority under the Lease, the Sublease and the Revenue Deposit Agreement; (ii) use its best efforts to cause the General Assembly to appropriate to or for the benefit of the OMB the moneys sufficient to enable the OMB to comply with its obligations under the Lease; and (iii) require the OMB to comply with its obligations under the Lease and the Revenue Deposit Agreement, including, but not limited to, the obligation under the Sublease to require the Board to operate, maintain and repair the Facilities and to provide insurance with respect to the Facilities. Events of Default; Remedies Events of Default. The occurrence and continuance of any of the following events will constitute an “Event of Default” under the Loan Agreement: (i) Failure of the Building Authority to pay any Loan Payment or Additional Payment on any Note when the same becomes due and payable, whether at maturity or upon any date fixed for prepayment, by acceleration or otherwise; or (ii) Failure of the Building Authority to observe and perform any other covenant, condition or provision of the Loan Agreement for a period of 60 days after written notice, specifying such failure and requesting C-1-59 that it be remedied, given to the Building Authority by the Trustee, unless the nature of the default is such that it cannot be remedied within 60 days, and the Building Authority institutes corrective action within the 60-day period and diligently pursues such action until the default is remedied; or (iii) The Building Authority (a) applies for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or the like of the Building Authority or of all or any substantial part of its property, (b) commence a voluntary case under the United States Bankruptcy Code (as now or hereafter in effect) or (c) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment or debts; or (iv) A proceeding or case is commenced, without the application or consent of the Building Authority, in any court of competent jurisdiction, seeking (a) the liquidation, reorganization, dissolution, winding-up or composition or adjustment of debts of the Building Authority, (b) the appointment of a trustee, receiver, custodian, liquidator or the like of the Building Authority or of all or any substantial part of its property or (c) similar relief in respect of the Building Authority under any law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts; or (v) Any Event of Default under the Lease. Remedies Upon Default. Whenever an Event of Default under the Loan Agreement has occurred and is continuing, any one or more of the following remedial steps may be taken: (i) the Trustee may declare all Loan Payments and Notes to be immediately due and payable, whereupon the same will become immediately due and payable; (ii) the Finance Authority and the Trustee may have access to, inspect, examine and make copies of the books, records, accounts and financial data of the Building Authority pertaining to the Facilities; and (iii) the Finance Authority or the Trustee may pursue all remedies now or hereafter existing at law or in equity to collect all amounts then due and thereafter to become due under the Loan Agreement or the Notes or to enforce the performance and observance of any other obligation or agreement of the Building Authority under those instruments, the Lease, the Sublease and the Revenue Deposit Agreement. If the Building Authority fails to pay any on the Notes when and as the same become due and payable, whether at maturity, upon designation for prepayment, by declaration or otherwise, then, upon written demand of the Trustee, the Building Authority will pay to the Trustee the whole amount which then has become due and payable on the Notes and in addition thereto such further amount as is sufficient to cover the cost and expenses of collection. Waiver of Events of Default. The waiver by the Trustee, on its own behalf or on behalf of the Finance Authority, of any Event of Default or obligation of the Building Authority under the Loan Agreement will be subject to the terms of the Indenture. See “THE INDENTURE – Events of Default and Remedies – Waivers of Events of Default”. No such waiver, annulment or rescission will affect any subsequent default or impair any right or remedy consequent thereon. Supplements and Amendments to Loan Agreement Subject to the provisions of the Indenture, the Building Authority and the Finance Authority may, with the consent of the Trustee, from time to time enter into such supplements and amendments to the Loan Agreement to issue Additional Building Authority Notes or as to them may seem necessary or desirable. See “THE INDENTURE – Supplemental Indentures, Loan Agreements, Revenue Deposit Agreements, Subleases and Leases and Amendments to Related Documents”. Defeasance; Discharge of Lien Defeasance. Upon payment in full, in accordance with the Indenture, of the Debt Service on any series of Bonds, whether at maturity, by redemption or otherwise, or upon provision for the payment thereof having been made in accordance with the provisions of the Indenture, (i) the Notes issued concurrently with those corresponding Bonds, of the same maturity, bearing the same interest rate and in an amount equal to the aggregate principal amount of the Bonds so surrendered and canceled or for the payment of which provision has been made, will be deemed C-1-60 fully paid, the obligations of the Building Authority thereunder will be terminated, and any such Notes will be surrendered by the Trustee to the Building Authority and will be canceled by the Building Authority, or (ii) in the event there is only one of those Notes, an appropriate notation will be endorsed thereon evidencing the date and amount of the principal payment or prepayment equal to the Bonds so paid or with respect to which provision for payment has been made, and that Note will be surrendered by the Trustee to the Building Authority for cancellation if all Bonds have been paid (or provision made therefor) and canceled as aforesaid. Discharge of Lien. Upon the satisfaction and discharge of the Indenture as provided therein: (a) all property, rights and interest hereby conveyed or assigned or pledged will revert to the Building Authority, and the estate, right, title and interest of the Trustee therein will thereupon cease, terminate and become void; and (b) the Loan Agreement and the covenants of the Building Authority contained therein will be discharged, and the Trustee in such case, on demand of the Building Authority, and at the Building Authority’s cost and expense, will execute and deliver to the Building Authority a proper instrument or proper instruments acknowledging the satisfaction and termination of the Loan Agreement, and will convey, assign and transfer or cause to be conveyed, assigned or transferred, and will deliver or cause to be delivered, to the Building Authority, all property, including money, then held by the Trustee, together with the Notes marked paid or canceled. THE LEASE The following is a brief description of certain provisions of the Lease and does not purport to comprehensively describe that document. Lease Terms Under the Lease, the Building Authority leased to the OMB the Real Estate for the Real Estate Initial Term. Upon the termination of the Real Estate Initial Term, the Building Authority leased to the OMB the Convention Center Expansion for the Convention Center Expansion Initial Term. The OMB has the right to renew the Convention Center Expansion Initial Term for successive two-year periods thereafter, and the term of the Lease will be deemed to have been renewed for each such two-year period, unless the OMB delivers a termination notice to the Building Authority not more than 90 and not less than 60 days prior to the end of any two-year term. In the event the Lease is not renewed and the Sublease is then in effect, the leasehold estate under the Sublease will continue as if the Building Authority were the OMB under the Sublease. In such event, the Building Authority will succeed to and assume the rights, undertakings and obligations of the OMB, as sublessor, under the Sublease without further act or instrument, and the Facilities will continue to be leased and demised to the Board pursuant to the Sublease, as if the Building Authority were the OMB under the Sublease. The Lease will terminate upon the occurrence of the first of the following events: (i) at 12:01 a.m. on July 1, 2011, or if the Lease has been renewed by the OMB, at 12:01 a.m. on the first day of July of any succeeding odd-numbered calendar year thereafter; (ii) on the first day, on or after the date of acceptance of the Completion Certificate for the Convention Center Expansion Facilities, for which funds have not been appropriated or are not available to pay any sum agreed to be paid for use and occupancy of the Facilities when due pursuant to the Lease; (iii) the termination of the Lease by the Building Authority following an Event of Default under the Lease (see “Remedies”); or (iv) the exercise by the OMB of its option to purchase (see “Option to Purchase”). Rental Timing for Payment. The OMB is required to pay, in advance, a rental, in an amount determined in accordance with the Lease as described below, for the Facilities (or the Convention Center Expansion or an C-1-61 Additional Project) to the Building Authority by general transfer of funds from an account of the OMB to the Trustee for deposit in the General Account (or in such other manner as the Building Authority may from time to time specify in writing to the OMB), so as to assure immediately available funds in such Account on or before January 1 and July 1 of each year, commencing on the date the Convention Center Expansion Facilities or an Additional Project is available for use and occupancy or December 1, 2010, whichever is later, for the period ending on the following June 30 or December 31, during which the Facilities (or the Convention Center Expansion Facilities or an Additional Project) are available for use and occupancy by the OMB pursuant to the Lease (provided that, if such January 1 and July 1 is not a Business Day, then on or before the immediately succeeding Business Day). Rentals. The OMB is required to pay on a semiannual basis, in advance, the rental amounts set forth below at the times described above (see “Timing for Payment”). Convention Center Expansion Rentals Period Available for Use and Occupancy July 1, 2013 through December 31, 2013 January 1, 2014 through June 30, 2014 July 1, 2014 through December 31, 2014 January 1, 2015 through June 30, 2015 Date Payments Due Expected Amount* Maximum Amount† July 1, 2013 $7,705,181 $12,322,656 January 1, 2014 $7,705,181 $12,322,657 July 1, 2014 $7,901,594 $12,322,656 January 1, 2015 $7,901,594 $12,322,657 Pursuant to an executed Supplemental Lease, the parties have further set forth the semiannual rental payments to be made during the next two Fiscal Years. The OMB is required to pay on a semiannual basis, in advance, the rental amounts set forth below at the times described above (see “Timing for Payment”). Convention Center Expansion Rentals Period Available for Use and Occupancy July 1, 2015 through December 31, 2015 January 1, 2016 through June 30, 2016 July 1, 2016 through December 31, 2016 January 1, 2017 through June 30, 2017 Date Payments Due Expected Amount* Maximum Amount† July 1, 2015 $7,849,811 $12,064,132 January 1, 2016 $7,849,811 $12,064,132 July 1, 2016 $8,192,318 $12,169,906 January 1, 2017 $8,192,318 $12,169,906 * Based on Expected Debt Service as defined in the Indenture † Based on Maximum Debt Service as defined in the Indenture C-1-62 Determination of Rents. As commenced in the year 2008, on or before the first day of each August, the OMB will determine the amount of the just and reasonable rents to be paid by the OMB to the Building Authority in accordance with the Act and the Lease during the first two Fiscal Years following such date. On or before the first day of each August during an even-numbered year, commencing in the year 2010, the parties will enter into a Supplemental Lease, to provide for the specific semiannual rental payments to be made pursuant to the Lease, as determined pursuant to the preceding sentence, during the two Fiscal Years following such date. On or before the first day of each August during an odd-numbered year, commencing in the year 2009, the parties will amend the Lease or the Supplemental Lease in effect at such time if it is determined that a rental rate adjustment is necessary to charge rentals authorized by the Lease for the succeeding Fiscal Year. Amount of Rents. After receipt of the Completion Certificate for the Convention Center Expansion Facilities or an Additional Project, the Building Authority will charge, and the OMB will pay, rental payments which are reasonably expected to yield, during each Fiscal Year in which the Facilities (or the Convention Center Expansion Facilities or an Additional Project) are available for use and occupancy, an amount which, together with all other funds held or to be held under the Indenture that are or will be available therefor pursuant to the Indenture, is equal to the sum of: (1) 100% of the Debt Service for such Fiscal Year, allocable to the Facilities (or the Convention Center Expansion or an Additional Project); (2) all expenses incurred by the Building Authority and the Finance Authority in connection with the Facilities during such Fiscal Year, including, without limitation, the fees and expenses of the Trustee, the Paying Agent, the registrar and the Tender Agent under the Indenture and the Remarketing Agent under the Remarketing Agreement, and, to the extent not included within the meaning of Debt Service, 100% of any amount owed by the Finance Authority to any Qualified Hedging Contract Provider or provider of a Reimbursement Obligation; (3) any amount of principal and interest due on the Bonds during such Fiscal Year, which is required to be paid by any Qualified Hedging Contract Provider or provider of a Reimbursement Obligation, but is not so paid by such Qualified Hedging Contract Provider or provider of a Reimbursement Obligation as a result of a default thereby; and (4) any amount required to replenish the Debt Service Reserve Fund to the amount then required to be on deposit therein pursuant to the Indenture to the extent that such requirement is not met by any provider of a Reimbursement Obligation or as a result of a default thereby (collectively, the “Costs”). For purposes of determining on any date the amount of the rental payments to be charged for any Fiscal Year commencing after the Convention Center Expansion Initial Term, the phrase “together with all other funds held or to be held under the Indenture that are or will be available therefor pursuant to the Indenture” will be interpreted to include only those funds, which are or will be available therefor pursuant to the Indenture, as of the date immediately prior to the commencement of such Fiscal Year, but only to the extent such amounts represent anticipated surplus rental payments. On or after December 1, 2010, and at any time prior to the receipt of the Completion Certificate for the entirety of the Convention Center Expansion Facilities or an Additional Project, the Building Authority will charge, and the OMB is required to pay, rental payments for that portion of the Convention Center Expansion Facilities or such Additional Project, which is available for use and occupancy. However, the amount of rental payments so charged and paid will be limited to the amounts allocable to such portion of the Convention Center Expansion Facilities or the Additional Project, with respect to which a certificate (as to matters contemplated by the Completion Certificate and otherwise as contemplated by the definition of Completion Certificate) has been received. Notwithstanding the foregoing, the Building Authority is not required to charge, and the OMB is not required to pay, rental payments in an amount which is in excess of the amounts properly allocable to the Convention Center Expansion or an Additional Project as a just and reasonable lease rental considering the value of the services and the Facilities (or the Convention Center Expansion or an Additional Project) thereby afforded. The Building Authority will charge, and the OMB will pay, rental payments which are reasonably expected to yield, during each Fiscal Year in which the Facilities (the Convention Center Expansion Facilities or Additional Projects) are available for use and occupancy, an amount, which together with all other funds held or to be held under the Indenture that are or will be available therefor pursuant to the Indenture, is equal to the sum of the items in clauses (1) – (4) of the first paragraph of this section, “Amounts of Rents.” On or before the first day of each C-1-63 August during an even-numbered year, commencing in the year 2008, the Building Authority will determine the amount of the just and reasonable rents to be paid by the OMB to the Building Authority in accordance with Indiana Code 5-1-17, as amended, and the Lease during the first two full Fiscal Years following such date. On or before the first day of each August during an even-numbered year, commencing in the year 2010, in the event that the Debt Service is not a fixed amount at the time the rental amounts are required to be established under the Lease, the Supplemental Lease, in the form set forth as an exhibit to the Lease shall provide for (x) rental payments in which the Debt Service component will be established in accordance with the assumptions for Expected Debt Service set forth in the Indenture and (y) rental payments in which the Debt Service component will be established in accordance with the assumptions for Maximum Debt Service as set forth in the Indenture; provided that the Lessee shall only pay rental payments in the amounts described in clause (x) unless the actual Debt Service for the period is greater than the Expected Debt Service. In the event that the actual Debt Service is in excess of the Expected Debt Service, the OMB will execute a Supplemental Lease setting forth its obligation to pay an additional rental payment in an amount sufficient to pay actual Debt Service upon notice from the Building Authority. So long as such additional rental does not exceed the rental amount established in clause (y), the OMB will make such payment within five business days of such request. In the event that such additional rental exceeds the rental payment for the period established in clause (y) above, the Building Authority will seek a rental adjustment in accordance with the Lease. Rent Adjustment. At any time, if the rent required to be paid by the OMB during the Convention Center Expansion Initial Term as described above (see “Timing for Payment”), or during any renewal of the Lease pursuant to a Supplemental Lease, together with all other funds held or to be held under the Indenture that are or will be available therefor pursuant to the Indenture, is estimated by the Building Authority to be insufficient to pay: (i) 100% of the Debt Service, allocable to the Facilities (or the Convention Center Expansion or an Additional Project) for such period, as determined pursuant to the Indenture; (ii) all expenses incurred by the Building Authority and the Finance Authority in connection with the Facilities during such Fiscal Year, including, without limitation, the fees and expenses of the Trustee, the Paying Agent, the registrar and the Tender Agent under the Indenture and the Remarketing Agent under the Remarketing Agreement, and, to the extent not included within the meaning of Debt Service, 100% of any amount owed by the Finance Authority to any Qualified Hedging Contract Provider or provider of a Reimbursement Obligation; (iii) any amount of principal and interest due on the Bonds during such Fiscal Year, which is required to be paid by any Qualified Hedging Contract Provider or provider of a Reimbursement Obligation, but is not so paid by such Qualified Hedging Contract Provider or provider of a Reimbursement Obligation as a result of a default thereby; and (iv) any amount required to replenish the Debt Service Reserve Fund to the amount then required to be on deposit therein pursuant to the Indenture to the extent that such requirement is not met by any provider of a Reimbursement Obligation or as a result of a default thereby, then the OMB and the Building Authority will amend those provisions mandating the rental payments otherwise due pursuant to the Lease or a Supplemental Lease to provide rental payments in an amount which, together with all other funds held or to be held under the Indenture that are or will be available therefor pursuant to the Indenture, is sufficient to meet the costs set forth in clauses (i) through (iv) of this paragraph. In the event the Board makes a prepayment of its remaining rental obligations under the Sublease pursuant to the terms thereof, and the rent required to be paid by the OMB during the Convention Center Expansion Initial Term pursuant to the Lease or during any renewal of the Lease pursuant to a Supplemental Lease, together with all other funds held or to be held under the Indenture that are or will be available therefor pursuant to the Indenture, is estimated by the Building Authority to be in excess of the amount necessary to meet the costs set forth in clauses (i) through (iv) of the second preceding paragraph, then the OMB and the Building Authority will amend those provisions mandating the rental payments otherwise due pursuant to the Lease or a Supplemental Lease to provide rental payments in a lesser amount which, together with all other funds held or to be held under the Indenture that are or will be available therefor pursuant to the Indenture, is sufficient to meet the costs set forth in clauses (i) through (iv) of the second preceding paragraph. Notwithstanding the foregoing, the Building Authority is not required to charge, and the OMB is not required to pay, rental payments in an amount which is in excess of the amounts properly allocable to the Facilities (or the Convention Center Expansion or an Additional Project) as a just and reasonable lease rental considering the value of the services and the Facilities (or the Convention Center Expansion or an Additional Project) thereby afforded. C-1-64 So long as the Sublease remains in effect and the OMB directs the Board to pay all rent payable under the terms of the Sublease to the Trustee under the Indenture, all payments so made will be considered as payments to the Building Authority by the OMB on the rent payable under the Lease and the OMB will receive a credit for such payments, which will be applied to the corresponding rental payments due under the Lease. To the extent any such payments are so made and such credits are so applied, any appropriation of the General Assembly to make such Lease payments, to the extent of such payments made by the Board, may become eligible to be released from any encumbrance for such purpose and may be eligible for future reversion to the fund for which such appropriation was made; provided that such release or reversion will not occur to the extent that rental payments under the Lease may still become due and payable. To the extent the OMB is required to make payments pursuant to the Lease out of such appropriations, and thereafter the Deposit Trustee receives money for deposit in the Delinquent Rental Account established pursuant to the Revenue Deposit Agreement and there are sufficient moneys then otherwise available under the Revenue Deposit Agreement to make all payments under the Sublease and the Lease, the Deposit Trustee is required pursuant to the Revenue Deposit Agreement to transfer such moneys to the OMB. During the term of the Lease, the OMB and the Building Authority may enter into one or more Supplemental Leases for Additional Projects. The OMB is obligated to pay additional rental for Additional Projects pursuant to the Supplemental Lease at the rates set forth therein and in the manner described above. Unjust and Unreasonable Rent If it is shown that the terms and conditions of the Lease and the amount to be paid for the use and occupancy of the Facilities are unjust and unreasonable considering the factors set forth in Indiana Code 5-1-17, (a) the Building Authority and the OMB will, if authorized or permitted by law, be required to reduce such amounts so as not to be unjust and unreasonable, or (b) if clause (a) as described above is not authorized or permitted by law, the OMB will not be obligated to continue to pay for the use and occupancy of the Facilities, but will instead be required to vacate the Facilities. Damage or Destruction of Facilities So long as the Sublease is in effect: (1) the Sublease will apply in the event the Facilities or any portion thereof will be damaged or destroyed so as to render the same unfit for its intended use in the opinion of an independent registered architect, registered engineer, construction manager or contractor selected by the Board and acceptable to the Building Authority and the OMB; and (2) any proceeds of insurance against damage to or destruction of the Facilities or proceeds of any condemnation of the Facilities (or portion thereof) will be paid to and held by the Trustee pursuant to the Indenture and used to pay for reconstruction or replacement of the Facilities in accordance with plans approved by the Board with the concurrence of the OMB, unless the Board elects to exercise its option to purchase and such proceeds will be sufficient to pay the full option to purchase price under the Sublease. See “THE SUBLEASE – Damage or Destruction of Facilities; Abatement of Rent”. Notwithstanding anything contained in the Sublease to the contrary, in connection with the Board’s obligations under the Sublease to reconstruct the Facilities, the Board is not required to reconstruct any part of the Facilities that the Building Authority is responsible for under the Development Agreement. Abatement of Rent In the event the Facilities (or any portion thereof) are damaged or destroyed so as to render the same unfit for use and occupancy, the rental payments owed by the OMB to the Building Authority under the Lease will be appropriately abated for the period during which the Facilities (or any portion thereof) are unfit for use and occupancy. Net Lease The Lease is what is known as a net lease (i.e., the rent being absolutely net to the Building Authority and all other expenses in connection with the Facilities of any nature whatsoever are those of the Board under the Sublease, so long as the Sublease is in effect). During the term of the Lease and so long as the Sublease is in effect, C-1-65 the Board is solely obligated to pay as its expenses without reimbursement from the Building Authority or the OMB all cost of taxes and assessments, if any, and maintenance and use in connection with or relating to the Facilities. The Board will retain all revenues from the operation of the Facilities, and neither the OMB nor the Building Authority has any responsibility to fund the ongoing maintenance and operations of the Facilities, so long as the Sublease is in effect. Nonliability of Building Authority Except as otherwise provided in the Development Agreement, the Building Authority will not be liable for damage caused by hidden defects or failure to keep the Facilities in repair and will not be liable for any damage done or occasioned by or from plumbing, gas, water, boilers, steam or other pipes or sewage or the bursting or leaking of plumbing or heating fixtures or waste or soil pipe in connection with the Facilities, nor for damage occasioned by water, snow or ice being upon sidewalks or coming through a roof, skylight, trapdoor or otherwise. Except as otherwise provided in the Development Agreement, the Building Authority will not be liable for any injury to the OMB or the Board or any subtenant of the OMB or the Board or any other person which injury occurs on, in or about the Facilities howsoever arising, and the Building Authority will not be liable for damage to the OMB’s or the Board’s property or to the property of any subtenant of the OMB or the Board or of any other person which may be located in, upon or about the Facilities. Alteration and Repairs So long as the Sublease is in effect, the Board will have the right, without the consent of the Building Authority, to make all alterations, modifications and additions permitted under the Sublease. See “THE SUBLEASE – Alterations and Repairs; Equipment or Furnishings”. Equipment or Furnishings So long as the Sublease is in effect, the Board may at any time and from time to time after the Facilities are complete and ready for use, in its sole discretion and at its own expense, install items of moveable machinery, equipment, furnishings and other personalty in and upon the Facilities. All such personal property will remain the sole property of the Board, in which the Building Authority will have no interest, and may be modified or removed by the Board at any time provided that the Board either: (i) repairs and restores any and all damage to the Facilities resulting from the installation, modification or removal of any such property; or (ii) compensates the Building Authority for any loss in value to the Facilities resulting from the installation, modification or removal of any such property. Insurance The OMB covenants that it will require the Board to comply with its obligations under the Sublease to provide insurance with respect to the Facilities. In the event the Board fails to comply with such obligations, the OMB covenants to pursue any available remedy at law or in equity or by statute to enforce those obligations. In the event the Sublease is terminated, the OMB covenants that it will comply with the obligations of the Board to provide the insurance coverage, which is required under the Sublease, as if the OMB were the sublessee and the Sublease were still in effect. See “THE SUBLEASE – Insurance”. General Covenants Pursuant to the Lease, the Building Authority consents to, and approves the entry by the OMB into, the Sublease and will in all respects be bound by the rights and privileges granted, conveyed and conferred upon the Board under the Sublease. The OMB agrees to cause the Board to perform the undertakings and obligations established by, and imposed on the Board under, the Sublease. If for any reason the OMB fails to cause the Board to perform any undertaking and obligation established by, and imposed on the Board, under the Sublease, the Building Authority may enforce any such undertaking by seeking performance in the name, place and stead of the OMB. The OMB has assigned its rights under the Sublease to the Building Authority, so long as the Indenture is then in effect. So long as the Sublease is in effect, the Building Authority agrees that it will, at the request of the Board, execute C-1-66 and deliver to or upon the order of the Board such instrument or instruments as may be reasonably required by the Board in order to subject the Facilities, or the Building Authority’s interest therein, to such encumbrances as specified in such request and as permitted by the provisions of the Sublease or otherwise by the definition of “Permitted Encumbrances” and will also deliver, from time to time, such documents and instruments as may be requested by the Board or any tenant of the Board with respect to the OMB’s covenant of quiet enjoyment contained in the Sublease. The OMB covenants that it will do all things lawfully within its power to obtain and maintain funds from which to meet its rental payment obligations under the Lease, including, when required to do so under the Lease, making provision for such obligations under the Lease in each budget, or adjustments thereto, submitted to the General Assembly for the purpose of obtaining appropriations, using its bona fide best efforts to have such portion of its budget approved and exhausting all available reviews and appeals in the event such portion of its budget is not approved. Notwithstanding any other provision of the Lease to the contrary, the OMB covenants that it will not take any action or fail to take any action with respect to its use of the Facilities that would result in (i) the loss of the excludability of the interest on any Tax-Exempt Bonds from gross income for federal income tax purposes under the Code, or (ii) causing the Series 2009 B Bonds not to be “qualified bonds” within the meaning of Section 54AA of the Code. Any agreement entered into by the OMB with respect to the Facilities that would result in the consequences described above will be of no force or effect and will not convey any rights or impose any obligation with respect to it, at law or in equity. If the Lease is terminated by reason of a nonrenewal thereof by the OMB as described above under the subcaption “Lease Terms and Rental,” the OMB covenants not to purchase, lease or rent property to perform the same functions as, or functions taking the place of those performed by, the Facilities and covenants not to contract for services to perform the same functions as those performed or furnished by the Facilities, for a period of two years following such termination date. The Building Authority agrees to use its best efforts to complete the Facilities (including the Convention Center Expansion Facilities or any Additional Project) as promptly as practicable in accordance with the provisions of the Development Agreement. In the event the moneys, if any, in the Project Fund and the Capitalized Interest Account are not sufficient to pay in full the cost of completing the Construction of the Facilities (or the Convention Center Expansion Facilities or any Additional Project) and the interest on the allocable Bonds prior to the Commencement Date, the Building Authority agrees to use its best efforts to complete the Construction of the Facilities (including the Convention Center Expansion Facilities and each Additional Project), which will include, but not be limited to, seeking the issuance of Additional Bonds in an amount sufficient to pay the remaining Construction costs, interest prior to the Commencement Date, associated costs of issuance and any required reserves. Option to Purchase Pursuant to the Lease, the Building Authority grants to the OMB the right and option, on any date, upon 30 days’ written notice to the Building Authority, to purchase the Facilities at a price equal to the amount required: (1) to enable the Building Authority to pay or redeem, or provide for the payment or redemption of, all Outstanding Bonds, all premiums payable on the redemption thereof, accrued and unpaid interest thereon and the costs of redemption thereof, all in accordance with the Indenture; and (2) to pay all expenses of the Building Authority and the Finance Authority attributable to the Facilities, including, without limitation, the fees and expenses of the Trustee, the Paying Agent, the registrar and the Tender Agent under the Indenture and the Remarketing Agent under the Remarketing Agreement, and, to the extent not included within the meaning of Debt Service, 100% of any amount owed by the Finance Authority to any Qualified Hedging Contract Provider or provider of a Reimbursement Obligation. The OMB may purchase a portion of the Facilities on any date, upon 30 days’ written notice to the Building Authority, at a price equal to the amount required: (1) to enable the Building Authority to pay or redeem, or provide for the payment or redemption of, the Outstanding Bonds allocable to the portion of the Facilities to be purchased, plus any premiums payable on the redemption thereof, any accrued and unpaid interest to the date of redemption, and any costs of redeeming such Bonds; and (2) to pay all expenses of the Building Authority and the Finance Authority attributable to the Facilities, including, without limitation, the fees and expenses of the Trustee, C-1-67 the Paying Agent, the registrar and the Tender Agent under the Indenture and the Remarketing Agent under the Remarketing Agreement, and, to the extent not included within the meaning of Debt Service, 100% of any amount owed by the Finance Authority to any Qualified Hedging Contract Provider or provider of a Reimbursement Obligation; provided, however, that as a condition to the purchase of a portion of the Facilities, the rent for the unpurchased portion of the Facilities remaining subject to the Lease must be sufficient to pay the rent due pursuant to the Lease. Upon the request of the OMB, the Building Authority agrees to furnish an itemized statement setting forth the estimated amount required to be paid by the OMB on the prepayment date in order to purchase all or a portion of the Facilities in accordance with the Lease. On or before the date fixed for the purchase of all or a portion of the Facilities pursuant to the Lease, the Building Authority will furnish or cause to be furnished an itemized statement setting forth the actual amount required to be paid by the OMB at the time all or a portion of the Facilities are purchased by the OMB. If the OMB exercises its option to purchase, the OMB will pay to the Trustee under the Indenture that portion of the purchase price which is required: (1) to pay or redeem, or provide for the payment or redemption of all Outstanding Bonds allocable to the Facilities, or, in the case of the purchase of a portion of the Facilities, that portion of the purchase price which is required to pay or redeem, or provide for the payment or redemption of the Outstanding Bonds (as identified in writing by the OMB or the Board) allocable to the portion of the Facilities to be purchased, and, in either case, all premiums payable on the redemption thereof, accrued and unpaid interest thereon and the costs of redemption thereof, all in accordance with the Indenture: and (2) to pay all expenses of the Building Authority and the Finance Authority attributable to the Facilities as described in the Lease. Such payment will not be made until the Trustee and the Finance Authority agree on and give to the OMB a written statement that such amount will be sufficient: (1) to pay or redeem, or provide for the payment or redemption of, all Outstanding Bonds allocable to the Facilities, or, in the case of the purchase of a portion of the Facilities, a written statement that such amount will be sufficient to pay or redeem, or provide for the payment or redemption of, all Outstanding Bonds allocable to the portion of the Facilities to be purchased, and, in either case, all premiums payable on the redemption thereof, accrued and unpaid interest thereon and the costs of redemption thereof, all in accordance with the Indenture; and (2) to pay all expenses of the Building Authority and the Finance Authority attributable to the Facilities as described in the Lease. Subject to the provisions of the Sublease, nothing contained in the Lease will be construed to provide that the OMB will be under any obligation to purchase the Facilities. Defaults An “Event of Default” means any one or more of the following events: (a) failure by the OMB to pay or cause to be paid when due any rental payment payable under and in accordance with the terms of the Lease on the date on which due; or (b) failure by the OMB to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as described in clause (a) above, which failure continues for a period of 30 days after written notice, specifying such failure and requesting that it be remedied, is given to the OMB by the Building Authority or the Trustee. Remedies Whenever any Event of Default has happened and is subsisting and provided that the Event of Default has not been cured, the Building Authority may terminate the Lease by written notice to the OMB and/or take whatever action at law or in equity as may appear necessary or desirable to collect the payments then due and thereafter to become due or to enforce the performance and observance of any obligation, agreement or covenant of the OMB under the Lease; provided, however, that in the event funds have not been appropriated or are not available to pay any sum agreed to be paid for use and occupancy of the Facilities (or the Convention Center Expansion or any Additional Project) when due pursuant to and in accordance with the terms of the Lease, the OMB or any other State C-1-68 Agency will be required to vacate the Facilities (or the Convention Center Expansion or any Additional Project) on the first day for which funds have not been so appropriated or are not so available, and the Building Authority may take whatever action at law or in equity may appear necessary or desirable to collect the payment then due and thereafter to become due or to enforce the performance and observance of any obligation, agreement or covenant of the OMB under the Lease. Notwithstanding anything to the contrary described in the preceding paragraph, the OMB will be obligated to pay any rental due under the Lease for any period (1) during which the Facilities (or the Convention Center Expansion or any Additional Project) are available for use and occupancy and (2) for which funds have been appropriated and are available to pay any sum agreed to be paid by the OMB pursuant to and in accordance with the terms of the Lease for use and occupancy of the Facilities (or the Convention Center Expansion or any Additional Project) when due. In the event the Lease is terminated and the Sublease is then in effect, the leasehold estate under the Sublease will continue as if the Building Authority were the OMB under the Sublease. In such event, the Building Authority will succeed to and assume the rights, undertakings and obligations of the OMB (as sublessor) under the Sublease without further act or instrument, and the Facilities will continue to be leased and demised to the Board pursuant to the Sublease, as if the Building Authority were the sublessor under the Sublease. Notwithstanding anything contained in the provisions described in the third preceding paragraph, so long as the Indenture is then in effect, any remedies exercisable by the Building Authority pursuant to the provisions described under this subcaption will be controlled by the Trustee. Supplemental Leases The Building Authority and the OMB contemplate that from time to time they will enter into one or more Supplemental Leases (or amendments to, or amendatory or superseding Supplemental Leases to replace, the Lease), which will provide: (a) a schedule of the specific semiannual rental payments (calculated in accordance with the Lease) to be paid to the Building Authority by the OMB, whether required by reason of the Lease having been renewed by the OMB or by reason of the issuance of a Series of Additional Bonds pursuant to the Indenture; (b) for an addition to the Real Estate of any additional real property to be subject to the Lease, if such additional real property has been acquired by the Building Authority for lease to the OMB under the Lease; and (c) such other covenants and agreements as the parties to the Lease agree upon; provided, however, the Building Authority and the OMB will not enter into a Supplemental Lease without the written consent of the Finance Authority, for so long as any Bonds are Outstanding under the Indenture and such Bonds are payable from Building Authority Notes secured by the Lease; provided, further, however, the Building Authority and the OMB will not enter into a Supplemental Lease without the written consent of the Board, if the Sublease is then in effect and the Board is not then in default under the Sublease, and if such Supplemental Lease would adversely alter or affect the Board’s rights or obligations under the Sublease. Transfer to the OMB When the Bonds are no longer Outstanding, the Building Authority will execute proper instruments conveying to the OMB good and merchantable title to the Facilities and all of OMB’s interest therein, subject only to Permitted Encumbrances and encumbrances created by the OMB. No Personal Liability No recourse may be had for the payment of rent under the Lease or for any claim based thereon or upon any obligation, covenant or agreement in the Lease contained against any past, present or future member, officer, employee, agent or official of the Building Authority or the OMB, or any successor thereof, either directly or through the Building Authority or the OMB, or any successor thereof, under any rule of law, equity or any statute or constitution or by the enforcement of any assessment or penalty or otherwise. C-1-69 THE SUBLEASE The following is a brief description of certain provisions of the Sublease and does not purport to comprehensively describe that document. Lease Term In the Sublease, the Board agrees to use its best efforts to acquire and, when acquired, agrees to convey to the Building Authority, a good and indefeasible estate in fee simple to all of the Real Estate, subject only to Permitted Encumbrances. Under the Sublease, the OMB subleases to the Board the Real Estate and the Convention Center Expansion that is located thereon for a term beginning on the date the Real Estate is conveyed to the Building Authority, as described in the preceding paragraph, and ending on December 31, 2039, unless earlier terminated as described below. Rental During the term of the Sublease, the Board is obligated to pay rentals to the OMB for the use of the Real Estate, and for the use of the Convention Center Expansion when and to the extent completed and ready for use, on the dates and in the amounts that the OMB owes rentals to the Building Authority under the Lease. In the event that the Lease is terminated prior to the expiration or termination of the Sublease and any Bonds remain outstanding, the Sublease will remain in full force and effect, and the Board is obligated to pay rentals directly to the Building Authority during the remaining term of the Sublease on the dates and in the amounts that such rentals would have been due had the Lease not been terminated. During the term of the Sublease, the Board and the OMB may enter into one or more Supplemental Subleases for Additional Projects. The Board is obligated to pay additional rental for Additional Projects pursuant to the Supplemental Sublease at the rates set forth therein. In the event the Revenues were insufficient on any rental payment date to pay the rentals due under the Sublease, but Revenues are later received and could be applied to payment of the unpaid rental payment otherwise due in accordance with the Sublease, the Board is obligated to pay such Revenues to the OMB as promptly as possible, together with interest on any overdue amounts at a rate equal to the effective interest rate on the outstanding Bonds. All rental obligations under the Sublease are payable solely and exclusive from the Stadium and Convention Special Fund in accordance with the Revenue Deposit Agreement, such rental obligations being limited recourse in nature. Pursuant to the Revenue Deposit Agreement, the OMB and Board have directed and agree to cause the Deposit Trustee to pay all rentals payable under the terms of the Sublease to the Trustee to be held under the Indenture. All payments so made in accordance with the Revenue Deposit Agreement are considered as payments to the OMB on the rentals payable under the Sublease. Application of Excess Revenues After the Convention Center Expansion is complete and ready for use, the Board agrees to deposit the remaining Revenues held by the Board in the Stadium and Convention Center Special Fund, after payment of all other rentals due under the Sublease and under the Stadium Sublease, and after making the other deposits required by the Revenue Deposit Agreement, in the Excess Revenues Account at such times and upon the terms and conditions set forth in the Revenue Deposit Agreement. At the direction of the OMB, consistent with the terms and conditions of the Revenue Deposit Agreement and the Stadium Sublease, amounts so deposited in the Excess Revenues Account shall be used by the Deposit Trustee only at the written direction of an Authorized Officer of the Finance Authority (i) to make up deficiencies (or unmet Requirements) in any year or to pay amounts then due and payable from the Lease Rental Payment Account, the Delinquent Rental Account or the Reserve Account, (ii) to prepay Obligations by making transfers therefrom to the Redemption Account of the Indenture, including to pay a C-1-70 corresponding swap termination payment relating to the redemption of Bonds, or (iii) to fund the obligations of the Board under the Sublease to pay (a) the costs of extraordinary capital improvements to the real estate and Convention Center improvements which are subject to the Sublease and the Lease, or (b) obligations of the Building Authority arising out of the design, development and construction of the Convention Center Project. To the extent the OMB directs that amounts deposited in the Excess Revenues Account shall be applied to the items described in clause (iii) of this subsection (b), the Board agrees to pay for such items solely from amounts contained in the Excess Revenues Account that have been so directed by the OMB. The obligations of the OMB and the Board created by or arising out of the Sublease or of any amendments thereto will not be, represent, or constitute an indebtedness of the OMB, the Board, the City of Indianapolis (the “City”) or Marion County, Indiana (the “County”), within the meaning or application of any constitutional limitation of the State or the laws of the State or a pledge of the faith or credit of the OMB, the Board, the City or the County. Damage or Destruction of Facilities; Abatement of Rent In the event the Facilities or any portion thereof are damaged or destroyed so as to render the same unfit for its intended use in the opinion of an independent registered architect, registered engineer, construction manager or contractor selected by the Board with the concurrence of the OMB, the Board is obligated to cause the Facilities (or such portion thereof) to be restored and rebuilt as promptly as may be done, unavoidable strikes and other causes beyond the control of the OMB excepted, if in the opinion of an independent registered architect, registered engineer, construction manager or contractor selected by the Board with the concurrence of the OMB: (i) the cost of such restoration or rebuilding does not exceed the amount of the proceeds received by the Trustee from the insurance provided for in the Sublease, together with other moneys available therefor under the Revenue Deposit Agreement or otherwise contributed at the option of the Building Authority, OMB or Board, and (ii) such restoration or rebuilding can be completed within the period of time covered by the rental value insurance provided for in the Sublease. If either or both conditions do not exist, the proceeds received from the insurance provided for in the Sublease will, with the concurrence of the OMB, be applied to the purchase price of bonds provided for in the Sublease (see “Option to Purchase” below). Notwithstanding the foregoing, the Board with the concurrence of the OMB may elect not to restore or rebuild and may elect to apply such insurance proceeds to the purchase price; provided that there are available sufficient funds to pay the purchase price including, without limitation, the amount required to defease all outstanding Bonds. In addition, in the event the Facilities or any portion thereof are damaged or destroyed so as to render it unfit for its intended use as determined by an independent registered architect, registered engineer, construction manager or contractor selected by the Board with the concurrence of the OMB, the rental will be abated for the period during which the Facilities (or portion thereof) is unfit for its intended use and will be abated in proportion to the portion of the Facilities which is unfit or unavailable for use. Notwithstanding the foregoing, at its option, the Board may determine to not abate rent in such portion of the Facilities which is unfit or unavailable for use (or determine to abate rent to a lesser extent or not at all) if the Board delivers an opinion of nationally recognized bond counsel that such alternate abatement does not impair the validity of the Sublease. Notwithstanding anything contained in the Sublease to the contrary, in connection with Board’s obligations under the Sublease to reconstruct the Facilities, Board is not be required to reconstruct any part of the Facilities that Building Authority is responsible for under the Development Agreement. Net Sublease The Sublease is what is known as a net lease (i.e., the rent being absolutely net to the OMB and all other expenses in connection with the Facilities of any nature whatsoever are those of the Board). During the Sublease term the Board is solely obligated to pay as its expenses without reimbursement from the OMB all cost of taxes and assessments, if any, and maintenance and use in connection with or relating to the Facilities. The Board will retain all revenues from the operation of the Facilities, and neither the OMB nor the Building Authority has any responsibility to fund the ongoing maintenance and operations of the Facilities. C-1-71 Nonliability of OMB The OMB will not be liable for damage caused by hidden defects or failure to keep the premises in repair and will not be liable for any damage done or occasioned by or from plumbing, gas, water, boilers, steam or other pipes or sewage or the bursting or leaking of plumbing or heating fixtures or waste or soil pipe in connection with said premises, nor for damage occasioned by water, snow or ice being upon sidewalks or coming through thereof, skylight, trapdoor or otherwise. The OMB will not be liable for any injury to the Board or any subtenant of the Board or any other person which injury occurs on, in or about the Facilities howsoever arising. The OMB will not be liable for damage to the Board’s property or to the property of any subtenant of the Board or of any other person which may be located in, upon or about said premises. The OMB is responsible for preserving for the benefit of Board usual and customary rights, claims and warranties against the persons or entities engaged to acquire and construct the Facilities. Alteration and Repairs; Equipment or Furnishings The Board will have the right, at its own expense, to make all alterations, modifications and additions and to do all remodeling and improvements it deems necessary or desirable to the Facilities, which do not materially reduce the rental value of the Facilities. The Board will be liable to repair any damage to the Facilities resulting from such work. So long as the Sublease is in effect, the Board may at any time and from time to time after the Convention Center Expansion is complete and ready for use, in its sole discretion and at its own expense, install items of moveable machinery, equipment, furnishings and other personalty in and upon the Facilities. All such personal property will remain the sole property of the Board, in which neither the Building Authority nor the OMB will have any interest, and may be modified or removed by the Board at any time; provided that if such modification or removal adversely affects the obligation to pay rentals under the Sublease, the Board is required to either: (i) repair and restore any and all damage to the Facilities resulting from the installation, modification, or removal of any such property; or (ii) compensate the Building Authority and the OMB for any loss in value to the Facilities resulting from the installation, modification or removal of any such property. Insurance The Board, at its own expense, is required, during the full term of the Sublease, to keep the Facilities insured against physical loss or damage, however caused, on a basis consistent with commercially reasonable practices and with such exceptions as are ordinarily required by insurers of buildings or facilities of a similar type (initially as provided by an industry standard all risk insurance policy), with good and responsible insurance companies. Such insurance is required to be in an amount at least equal to the greater of (i) the option to purchase price for the purchase of the Facilities under the Sublease, or (ii) 100% of the full replacement cost of such Facilities as certified by a registered architect, a registered engineer, or professional appraisal engineer, selected by the Board with the concurrence of the OMB, from and after the date the Convention Center Expansion is complete and ready for use for purposes of making a rent payment under the Sublease and on or before the first day of July of each year thereafter. In no event may the insurance be in an amount which causes the Board to be a co-insurer for the Facilities, provided that such insurance may cover properties of the Board other than the Facilities. Such insurance may contain a provision for a deductible in an amount that is customary and commercially reasonable, but not more than $1,000,000 or such higher amount as from time to time determined by the Board with the concurrence of the OMB. The Board is obligated to pay the deductible amount of any loss to the OMB. A blanket public institutional property insurance form may be used if the insurance payable in respect of loss related to the Facilities is not less than the amount required by the Sublease and the insurance proceeds related to damage to or destruction of the Facilities are payable to the Trustee. During the full term of the Sublease, the Board is also required, at its own expense, to maintain rental value insurance in an amount at least equal to the full rental paid by the Board on all Facilities leased by the Board for a period of 24 months against physical loss or damage of the type insured against pursuant to the preceding requirements of this Section. Such rental value insurance policies will be for the benefit of and will be made payable to the Trustee. C-1-72 Notwithstanding any requirement set forth in the Sublease, in the event any such policy, limit or term is not commercially available at a reasonable premium or the Board desires to otherwise replace it with reasonably comparable coverage, then the Board with the concurrence of the OMB may replace and substitute such with an alternate policy, limit or term so long as any such alternate affords reasonably comparable coverage as confirmed by an outside insurance consultant engaged by the Board. Use of Insurance and Condemnation Proceeds Proceeds of insurance against damage to or destruction of the Facilities or proceeds of any condemnation of the Facilities (or portion thereof) will be paid to and held by the Trustee pursuant to the Indenture and the Loan Agreement and used by the Board to pay for reconstruction or replacement of the Facilities in accordance with plans approved by the Board with the concurrence of the OMB, unless the Board elects to exercise its option to purchase and such proceeds are sufficient to pay the full option to purchase price for all Bonds. Liability Insurance The Board is required, at all times during the full term of the Sublease, to keep in effect, public liability and property damage insurance, insuring the Board and the OMB in amounts customarily carried by similar facilities, and is required to make the Building Authority and the OMB named insureds on such policies. General Insurance Provisions All insurance policies required by the Sublease will be issued by good and responsible insurance companies selected by the Board with the concurrence of the OMB, and will be countersigned by an agent of the insurer who is a resident of the State. Such policies, or copies thereof, together with a certificate of the insurance commissioner certifying that the persons countersigning such policies are duly qualified in the State as resident agents of the insurers on whose behalf they may have signed, and any applicable certificate of the architect or engineer, will be deposited with the OMB, the Building Authority and the Trustee. If, at any time, the Board fails to maintain insurance in accordance with the Sublease, such insurance may be obtained by the OMB or the Building Authority, or may be obtained by the Trustee, and the amount paid for such insurance will be added to the amount of rental payable by the Board under the Sublease; provided, however, that neither the OMB, the Building Authority nor the Trustee are under any obligation to obtain such insurance, and any action or non-action of the OMB or the Trustee in this regard will not relieve the Board of any consequences of a default in failing to obtain such insurance. The Trustee will be the loss payee on all casualty and rental value insurance required by the Sublease that becomes payable in respect of claims related to the Facilities. General Covenants The Board is permitted in its sole and absolute discretion to enter into separate subleases and other agreements with respect to use of the Facilities. Any such subleases or other agreements will not relieve, reduce or diminish the obligation of the Board to make rental payments under the Sublease. The OMB covenants that any subtenant of the Board will have quiet enjoyment of the premises subleased in the event of any breach or default under the Sublease, so long as those parties with whom the Board has contracted are either (a) not in material breach of their respective agreements or (b) diligently pursuing corrective action to cure any existing material breach of their respective agreements. The Board covenants that, except for Permitted Encumbrances, it will not encumber the Facilities, or permit any encumbrance to exist thereon, and that it will use and maintain the Facilities in accordance with the laws and ordinances of the United States of America, the State, and all other proper governmental authorities. The OMB covenants that it will, at the request of the Board, execute and deliver to or upon the order of the Board such instrument or instruments as may be reasonably required by the Board in order to subject the Facilities, or the OMB’s interest therein, to such encumbrances as are specified in such request and as are permitted by the provisions of the Sublease, and will also deliver, from time to time, such documents and instruments as may be requested by the Board or any tenant of the Board with respect to OMB’s covenant of quiet enjoyment contained in the Sublease. The OMB will cause the Lease to provide that the Building Authority will grant the same rights and interests in favor of Board described in the prior sentence to the full extent necessary or desirable to permit the Board to exercise and enjoy its rights under it. C-1-73 The Board covenants that it that will not take any action that would result in (i) the loss of the excludability of the interest on any Tax-Exempt Bonds from gross income for federal income tax purposes under the Code, or (ii) causing the Series 2009 B Bonds not to be “qualified bonds” within the meaning of Section 54AA of the Code. The Board is obligated to comply with all reasonable direction given by the OMB when necessary to not cause any such result as described above. With respect to a capital improvement that is subject to the county admissions tax imposed by IC 6-9-13, as amended, upon request of the Building Authority the Board is obligated to impose a fee: (i) not to exceed three dollars ($3), as determined by the Building Authority, for each admission to a professional sporting event described in IC 6-9-13-1, as amended; and (ii) not to exceed one dollar ($1), as determined by the Building Authority, for each admission to any other event described in IC 6-9-13-1, as amended. So long as there are any current or future obligations owed by the Board to the Building Authority or any state agency pursuant to a lease or other agreement entered into between the Board and the Building Authority or any state agency under Indiana Code 5-1-17-26, including the Sublease, the Board or its designee will deposit the revenues received from the fee imposed under this paragraph in the Stadium and Convention Special Fund to be used only for the payment of the obligations of the Board described in the Sublease and in the Revenue Deposit Agreement. The Board also agrees to comply with certain environmental covenants set forth in the Sublease. Covenant Regarding Excise Taxes and Revenues The Board, on behalf of Marion County, Indiana, covenants that neither the Additional Admissions Tax, the Additional Marion County Food and Beverage Tax nor the Additional Innkeeper’s Tax will be repealed, amended or altered in any manner that would reduce or adversely affect the levy and collection of the Additional Admissions Tax, the Additional Marion County Food and Beverage Tax or the Additional Innkeeper’s Tax or reduce the rates or amounts of the Additional Admissions Tax, the Additional Marion County Food and Beverage Tax or the Additional Innkeeper’s Tax so long as any lease rental provided for by the Sublease is unpaid. The Board further covenants that it will not take any action or fail to take any action which would (i) reduce or adversely affect the levy and collection of the Additional Supplemental Auto Rental Excise Tax, (ii) reduce the rates or amounts of the Additional Supplemental Auto Rental Excise Tax or (iii) result in a materially adverse reduction in the Revenues so long as any lease rental provided for by the Sublease is unpaid. Option to Purchase The OMB grants the Board the right and option at any time upon 30 days’ written notice to the OMB and the Building Authority, to purchase the Facilities at a price equal to the amount required to enable the OMB to exercise its right to purchase the Facilities from the Building Authority under the Lease. The Board may purchase a portion of the Facilities at any time upon 30 days’ written notice to the OMB, at a price equal to the amount required to enable the OMB to exercise its right to purchase the same portion of the Facilities from the Building Authority under the Lease; provided, however, that as a condition to the purchase of a portion of the Facilities, the rent for the unpurchased portion of the Facilities remaining subject to the Sublease must be sufficient to pay debt service on all remaining outstanding Bonds plus any additional rental due pursuant to the Sublease. Upon request of the Board, the OMB will furnish an itemized statement setting forth the amounts required to be paid by the Board on the proposed payment date in order to purchase the Facilities or the designated portion of the Facilities in accordance with the preceding paragraph. If the Board exercises its option to purchase all or a portion of the Facilities, the Board will pay to the Trustee the purchase price therefor as determined above. Such payment will not be made until the Trustee and the Finance Authority agree on and give to the Board a written statement that such amount will be sufficient to meet all of the requirements for the OMB’s purchase of the Facilities or portion thereof under the Lease. Upon the Board making such payment, the OMB is required to immediately (i) use such moneys to exercise its option to purchase under the Lease, thereby obtaining all or a portion of the Building Authority’s interest in the Facilities pursuant to the Lease, and (ii) execute proper instruments conveying to the Board good and merchantable title to and all of the OMB’s interest in the portion of the Facilities being purchased, subject only to Permitted Encumbrances. In the C-1-74 event the Lease is terminated prior to the termination of the Sublease, the Board will continue to be able to exercise and enjoy its option to purchase, and the measure of the purchase price will be as described in the Lease. At the expiration of the term of the Sublease, if no Bonds remain outstanding and upon the full discharge and performance by the Board of its obligations under the Sublease, the OMB grants the Board an option to purchase the Facilities for a price of one dollar. If the Board has not exercised its option to purchase the Facilities at the expiration of the term of the Sublease and upon the full discharge and performance by the Board of its obligations under the Sublease and the defeasance of all Bonds, the OMB will execute proper instruments conveying to the Board good and merchantable title, and all of OMB’s interest, in the Facilities, subject only to Permitted Encumbrances. Utility Service The Board will pay or cause to be paid all charges for sewer, gas, water, electricity, light, heat or power, telephone or other utility service used, rendered or supplied upon or in connection with the Facilities incurred after the date on which the Convention Center Expansion is complete and ready for use and thereafter throughout the term of the Sublease, and to indemnify the OMB and save it harmless against any liability or damages on such account. Defaults If the Board: (a) defaults in the payment of any rentals due under the Sublease other than by reason of the Revenues not being sufficient to provide for the payment in full of such rentals, or defaults in the payment of any monetary sums other than rent under the Sublease required to be paid by the Board to the OMB under the Sublease; (b) defaults under the Revenue Deposit Agreement, other than by reason of the Revenues not being sufficient to provide for the payment in full of all rentals due under the Sublease; (c) defaults in the observance of the Board’s covenants regarding maintenance and application of the Revenues (see “Covenant Regarding Excise Taxes and Revenues”); or (d) defaults in the observance of any other covenant, agreement or condition of the Sublease and such default continues for 60 days after written notice to correct the same; then, in any of such events, except as set forth below, the OMB may proceed to protect and enforce its rights, either at law or in equity, by suit, action, mandamus or other proceedings, whether for specific performance of any covenant or agreement contained in the Sublease or for the enforcement of any other appropriate legal or equitable remedy. Notwithstanding the foregoing, OMB may not proceed to protect and enforce its rights pursuant to the preceding sentence in the event of a default specified in clause (d) above that is correctable, but not within sixty days, if corrective action is instituted by the Board within such time period and diligently pursued until the default is corrected. In no event, however, will the Building Authority or OMB be entitled to dispossess the Board or terminate the Sublease or otherwise seek to deprive the Board of its use of the Facilities under the Sublease. Supplemental Subleases The OMB and the Board may, from time to time, enter into one or more Supplemental Subleases, each of which will (a) describe the Additional Project to be included as a part of the Facilities that is to be leased by the OMB to the Board, (b) state the additional rental payment attributable to the inclusion of such Additional Project as a part of the Facilities, (c) provide that all covenants contained in the Sublease are unitary and include all parts of the Facilities, whether leased pursuant to the original Sublease or pursuant to any Supplemental Sublease (provided that the foregoing will not limit or restrict the parties from having differing covenants and obligations applicable to Additional Projects or other discrete parts of the Facilities), and (d) contain such other covenants and agreements as C-1-75 the parties thereto agree upon. The OMB and the Board covenant and agree that, when added to the then existing lease rentals, the additional rental payments established pursuant to any Supplemental Sublease will be sufficient to pay the debt service attributable to the Bonds remaining outstanding, plus any additional rental due under the Sublease. Transfer to Board In the event the Board has not exercised its option to purchase the Facilities in accordance with the Sublease (see “Option to Purchase”), then, upon expiration of the Sublease and upon full performance by the Board of its obligations under the Sublease, the Facilities will become the absolute property of the Board, and, upon the Board’s request, the OMB will execute proper instruments conveying to the Board good and merchantable title, and all of the OMB’s interest, in the Facilities. No Personal Liability No recourse may be had for the payment of rent under the Sublease or for any claim based thereon or upon any obligation, covenant or agreement in the Sublease contained against any past, present or future member, officer, employee, agent or official of the OMB or the Board, or any successor thereof, either directly or through the OMB or the Board, or any successor thereof, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise. THE REVENUE DEPOSIT AGREEMENT The following is a brief description of certain provisions of the Revenue Deposit Agreement and does not purport to comprehensively describe that document. Granting Clause Pursuant to the terms of the Revenue Deposit Agreement, the Board pledges and assigns unto the Deposit Trustee for all Obligations incurred by the Board: (a) all the Excise Tax Revenues; (b) all the Fees; (c) all the Additional Marion County Professional Sports Development Area Revenues; (d) all other Revenues; and (e) all moneys and securities in the Stadium and Convention Special Fund, including the income from the investment thereof. If the Board pays or causes to be paid all Obligations or provides for the payment of all Obligations and keeps, performs and observes all of the covenants and promises in the Revenue Deposit Agreement, and pays or causes to be paid to the Deposit Trustee all sums of money due to it in accordance with the terms and provisions the Revenue Deposit Agreement, then the Revenue Deposit Agreement will be terminated and the liens set forth therein will be released. Funds and Accounts; Flow of Funds Stadium and Convention Special Fund; Accounts and Subaccounts. Pursuant to the terms of the Revenue Deposit Agreement, there is created a fund to be held by the Deposit Trustee, designated as the “Stadium and Convention Special Fund.” Within the Stadium and Convention Special Fund there will be maintained a Lease Rental Payment Account, a Delinquent Rental Account, a Reserve Account, and an Excess Revenues Account. C-1-76 The Building Authority, the Finance Authority, and the OMB acknowledge and agree in the Revenue Deposit Agreement that (i) the payment of amounts from the Stadium and Convention Special Fund to the Stadium Bond Trustee with respect to the Board’s lease rental obligations under the Stadium Sublease will simultaneously constitute payment of the Board’s lease rental obligations under the Stadium Sublease, the payment of the OMB’s lease rental obligations under the Stadium Lease, and the payment of principal, interest, and other amounts due from the Building Authority with respect to the Stadium Notes; and (ii) the payment of amounts from the Stadium and Convention Special Fund to the Trustee with respect to the Board’s lease rental obligations under the Sublease will simultaneously constitute payment of the Board’s lease rental obligations under the Sublease, the payment of the OMB’s lease rental obligations under the Lease and payment of principal, interest, and other amounts due from the Building Authority with respect to the Notes. Deposits into the Stadium and Convention Special Fund. So long as there are any outstanding Obligations, no later than the 21st day of each month the Treasurer of the Board will cause to be deposited into the Stadium and Convention Special Fund the following received by or on behalf of the Board from the 21st day of the immediately preceding month through and including the 20th day of such month: (a) all Excise Tax Revenues; (b) all the Fees; (c) all Additional Marion County Professional Sports Development Area Revenues; and (d) all other Revenues. Lease Rental Payment Account. Deposits to the Stadium and Convention Special Fund of the Revenue Deposit Agreement will be applied to make the following deposits to the Lease Rental Payment Account. On the twentieth day of each month, commencing on the January 20 immediately preceding each Lease Year, the Deposit Trustee will deposit all amounts received for deposit into the Stadium and Convention Special Fund under the Revenue Deposit Agreement to the Lease Rental Payment Account until the aggregate amount deposited during such month equals one-tenth of the aggregate of the component Requirements for the Stadium Sublease and Sublease of the Lease Rental Payment Account. The component Requirement for the Stadium Sublease for the Lease Rental Payment Account for each Lease Year is equal to the amount of the rental payments payable by the Board to the OMB during such Lease Year. The component Requirement for the Sublease for the Lease Rental Payment Account for each Lease Year is equal to the amount of the rental payments payable by the Board to the OMB during such Lease Year. When the Requirements for the Lease Rental Payment Account has been satisfied for the current Lease Year, the Deposit Trustee will not deposit any additional amounts to the Lease Rental Payment Account until after the next succeeding January 20, unless a deficiency arises. Notwithstanding the foregoing, in the event that the amount or timing of the payment of lease rentals under the Stadium Sublease is amended, pursuant to the Stadium Lease or otherwise, or the amount or timing of the payment of lease rentals under the Sublease is amended pursuant to the Sublease or otherwise, then the deposits to the Stadium and Convention Special Fund will be applied to the Lease Rental Payment Account in such amounts and at such times as is necessary to timely pay the lease rentals due under the Stadium Sublease and the Sublease. Amounts in the Lease Rental Payment Account may be used solely to pay the rent due pursuant to the Obligations and for no other purpose. The Deposit Trustee will transfer out of the Lease Rental Payment Account on a pro rata basis to the Stadium Bond Trustee and the Trustee the amount requested in writing by the Stadium Bond Trustee and the Trustee to make such rental payments when due. Delinquent Rental Account. After making the required deposits to the Lease Rental Payment Account, the Deposit Trustee will deposit a portion of the remaining amounts received for deposit into the Stadium and Convention Special Fund under the Revenue Deposit Agreement to the Delinquent Rental Account in an amount sufficient to meet the Requirement of the Delinquent Rental Account. The Requirement for the Delinquent Rental Account is equal to the amount of any lease rentals or other amounts to be paid by the Board to the OMB under the Stadium Sublease and Sublease which were not timely paid and remain unpaid together with interest on any overdue C-1-77 amounts at a rate equal to the effective interest rate on the outstanding Stadium Bonds and Bonds. Upon deposit in the Delinquent Rental Account, the Deposit Trustee will transfer out of the Delinquent Rental Account to the Stadium Bond Trustee or the Trustee the amount requested in writing by the Stadium Bond Trustee or the Trustee to satisfy such lease rental payment obligations not timely paid and that remain unpaid; provided that if the OMB has otherwise provided for payment of rental or other amounts due under the Stadium Lease or Lease (other than from the Additional Marion County Professional Sports Development Area Revenues, the Fees, or the Excise Tax Revenues), then in such event, the Deposit Trustee will transfer moneys out of the Delinquent Rental Account to the OMB to the extent that the OMB has provided for the payment of such rental and other obligations. Upon direction from an Authorized Officer, the Deposit Trustee, on or immediately following either (i) the date specified in the third paragraph under the subcaption “Lease Rental Payment Account” above or (ii) a deposit date under the second paragraph under the subcaption “Lease Rental Payment Account” above, will transfer any moneys in the Delinquent Rental Account to the Lease Rental Payment Account to satisfy any deficiency in, or unmet requirement for, the Lease Rental Payment Account (calculated on a proportional basis for the applicable number of months for which deposits to the Lease Rental Payment Account have been requred to be made as described in the subcaption “Lease Rental Payment Account” above); provided that any such transfer maybe made only to the extent that moneys are not then on deposit in the Reserve Account or the Excess Revenues Account for such purpose as described below. Reserve Account. Following the completion of the Stadium Project, and after making the required deposits to the Lease Rental Payment Account described above, the Deposit Trustee will deposit a portion of the remaining amounts received for deposit into the Stadium and Convention Special Fund to the Reserve Account in an amount sufficient to meet the Requirement of the Reserve Account. The component Requirement for Reserve Account allocable to the Stadium Sublease is an amount equal to the Reserve Requirement for the Stadium Bonds. The component Requirement for the Reserve Account allocable to the Sublease is an amount equal to the Reserve Requirement for the Bonds. The Requirement for the Reserve Account is equal to the sum of such components. The Reserve Account may be used to pay the lease rentals on either the Stadium Sublease or the Sublease in the event that moneys on deposit in the Lease Rental Payment Account are not sufficient for that purpose. Amounts not required to be deposited in the Lease Rental Payment Account and the Delinquent Rental Account will be next deposited to the Reserve Account. In the event that, on or immediately following a deposit date as set forth in the second paragraph of the subcaption “Lease Rental Payment Account” above, there exists any unmet Requirement for the Lease Rental Payment Account (calculated on a proportional basis for the applicable number of months for which deposits to the Lease Rental Payment Account have been required to be made as described in the second paragraph of the subcaption “Lease Rental Payment Account” above) or an unmet Requirement for the Delinquent Rental Account, any balances in the Reserve Account shall be transferred, at the direction of an Authorized Officer, to meet such Requirement(s); provided that no such transfer shall be made to the Delinquent Rental Account if on such date of transfer there is any unmet Requirement in the Lease Rental Payment Account. Excess Revenues Account. Following the completion of the Stadium Project, and after having made the required deposits to the Lease Rental Payment Account, the Delinquent Rental Account, and the Reserve Account described above, the Deposit Trustee will deposit the remaining amounts received for deposit into the Stadium and Convention Special Fund under the Revenue Deposit Agreement to the Excess Revenues Account. The funds in the Excess Revenues Account may be used by the Deposit Trustee only at the written direction of an Authorized Officer (i) to make up deficiencies (or unmet Requirements) in any year or to pay amounts then due and payable from the Lease Rental Payment Account, the Delinquent Rental Account or the Reserve Account, (ii) to prepay Obligations by making transfers therefrom to the redemption account of the Stadium Trust Indenture or the Indenture, as applicable, including to pay a corresponding swap termination payment relating to the redemption of Stadium Bonds or the Bonds, or (iii) to fund the obligations of the Board under the Stadium Sublease or the Sublease to pay (a) the costs of extraordinary capital improvements to the New Stadium or the real estate (as defined in the Stadium Sublease and the Stadium Lease), or the real estate and improvements which are subject to the Sublease and Lease, or (b) obligations of the Building Authority arising out of the design, development, and construction of the New Stadium or the Convention Center Expansion Project. Any such payments to the redemption account of the Stadium Indenture held by the Stadium Bond Trustee or the Indenture held by the Trustee, as applicable, for the purpose of redeeming Stadium Bonds or Bonds, including to pay a corresponding swap termination payment relating to the C-1-78 redemption of Stadium Bonds or Bonds from the Excess Revenues Account under the Revenue Deposit Agreement will (i) constitute a prepayment of the Board’s lease rental obligations under the Stadium Sublease or the Sublease, as applicable, and (ii) simultaneously constitute a prepayment of the OMB’s lease rental obligations under the Stadium Lease or Lease, as applicable, and a prepayment of principal, interest, and other obligations of the Building Authority under the Stadium Notes, the Stadium Loan Agreement, the Notes or the Loan Agreement, as applicable. Amount of Required Deposits. In determining the Requirement for each of the Lease Rental Payment Account, the Delinquent Rental Account or the Reserve Account or instead the amount available for deposit into the Excess Revenues Account, there will be taken into account (1) the dates and amounts of required payments from the Lease Rental Payment Account and, if applicable, the Delinquent Rental Account and the Reserve Account; (2) amounts then on deposit in the Lease Rental Payment Account, the Delinquent Rental Account and the Reserve Account; and (3) known and determinable amounts of investment income to be deposited in the Lease Rental Payment Account, the Delinquent Rental Account and the Reserve Account during the then current Lease Year or prior to the next ensuing date or dates on which payments are required to be made therefrom, as the case may be; provided, the Deposit Trustee is not required to take into account the amounts described in this clause (3) in any Lease Year unless directed in writing to do so by the Authorized Officer. Each month, the Deposit Trustee and the Authorized Officer will agree on the amounts to be deposited in each account and any amount which will be transferred to the Excess Revenues Account. Investment of Funds in the Stadium and Convention Special Fund. At the written direction of the Budget Director, the Deposit Trustee will invest money in the accounts of the Stadium and Convention Special Fund held by it in the Applicable Investment Securities. If the Budget Director fails to give the Deposit Trustee written directions, the Deposit Trustee will invest cash in such accounts in obligations of or guaranteed by the United States of America. Investments in the subaccounts of the Lease Rental Payment Account must mature or be redeemable at the option of the Board prior to the time such amounts will be needed to pay rental payments under the Obligations. Any income from investments of an account will, if that account has a deficit from its Requirement, be retained in such account to meet the Requirement of such account. If the subaccount contains its Requirement, earnings on investments may be applied in the same manner as any other funds available to the Stadium and Convention Special Fund. The Deposit Trustee may make any and all such investments through its own investment department or that of its affiliates or subsidiaries. Additional Obligations Parity Obligations. Additional Obligations payable from the Stadium and Convention Special Fund may be entered into by the Board and the OMB on a parity with any other Obligations theretofore entered and any then in effect only in connection with the issuance of additional bonds for refunding purposes under the Stadium Trust Indenture or the Indenture or as Completion Obligations and only with the prior written consent of the OMB, the Finance Authority, and the Building Authority. Junior Obligations. The Board, the Finance Authority, the OMB, the Budget Director, and the Building Authority may agree, from time to time, to the issuance of Junior Obligations which are payable, directly or indirectly, from funds or accounts established under the Revenue Deposit Agreement, which will be subject to the terms and conditions set forth in the Revenue Deposit Agreement, as well as the terms and conditions set forth in the particular supplement to the Revenue Deposit Agreement entered into in connection with such series of Junior Obligations. Any Junior Obligations will not (i) be subject to acceleration of maturity except pursuant to a mandatory sinking fund redemption obligation, and (ii) contain provisions which permit the declaration of an Event of Default under the Revenue Deposit Agreement upon any failure to pay principal of or interest on such Junior Obligation as and when due. Covenants Regarding Excise Taxes, Fees, Revenues and Existing Obligations The Board, on behalf of Marion County, Indiana, covenants under the Revenue Deposit Agreement that neither the Additional Admissions Tax, the Additional Marion County Food and Beverage Tax nor the Additional Innkeeper’s Tax will be repealed, amended or altered in any manner that would reduce or adversely affect the levy and collection of the Additional Admissions Tax, the Additional Marion County Food and Beverage Tax or the Additional Innkeeper’s Tax or reduce the rates or amounts of the Additional Admissions Tax, the Additional Marion C-1-79 County Food and Beverage Tax or the Additional Innkeeper’s Tax so long as any Obligation remains unpaid. The Board further covenants that it will not take or fail to take any action which would (i) reduce or adversely affect the levy and collection of the Additional Supplemental Auto Rental Excise Tax, (ii) reduce the rates or amounts of the Additional Supplemental Auto Rental Excise Tax, or (iii) result in a materially adverse reduction in the Revenues so long as any Obligation remains unpaid. The Board further covenants under the Revenue Deposit Agreement that, unless otherwise agreed by the parties to the Revenue Deposit Agreement, until the Stadium Project is complete and ready for use pursuant to the Stadium Sublease, all of the Revenues received by the Board or its designee, which are designated to be used for the Stadium Project and are not required to be deposited into the subaccounts of the Lease Rental Account or the subaccounts of the Delinquent Rental Account, will be deposited with the Stadium Bond Trustee to be held in the project fund under the Stadium Trust Indenture. In consideration therefor, the Building Authority and the Finance Authority covenant that in determining the principal amount of the Stadium Bonds to be issued to pay for the Stadium Project, the Building Authority and the Finance Authority will take into account the amount of the Excise Tax Revenues, the Fees and the Additional Marion County Professional Sports Development Area Revenues projected to be deposited by the Board into such project fund. In accordance with Indiana Code 9-18-49-5(d), the Budget Director has directed and agreed to cause any amount of fees for National Football League franchised football team license plates on deposit in the State Capital Projects Fund to be transferred to the Deposit Trustee for deposit in the Stadium and Convention Special Fund. Subject to the following paragraph and except to the extent that a portion of the Excise Tax Revenues collected after December 31, 2027 have been or will be pledged to the Existing Obligations, the Board covenants in the Revenue Deposit Agreement that it will not pledge or otherwise encumber any of the Excise Tax Revenues, the Fees, the Additional Marion County Professional Sports Development Area Revenues, or the Revenues, except as set forth in the Revenue Deposit Agreement with respect to the issuance of Obligations and Junior Obligations. The Board also covenants that it will not make any amendments to the Marion County Professional Sports Development Area established by the Board pursuant to IC 36-7-31, without the prior written consent of the OMB and the Finance Authority. The Board further covenants that, except for pledges in favor of the Existing Obligations, any future pledge by it of the Prior Revenues will expressly exclude revenues received by the Board after December 31, 2027 from the Marion County Food and Beverage Tax levied and collected pursuant to IC 6-9-12 and the Marion County Admissions Tax levied and collected pursuant to IC 6-9-13; provided however, the Board may (i) make any amendments to the Senior Lease to permit that portion of the leased premises under the Senior Lease commonly known as the RCA Dome to be removed, substituted or otherwise released from the leased premises under the Senior Lease, and (ii) issue any obligations determined by the Board to be necessary to substitute a revenue bond obligation for the portion of the Board's lease rental obligation under the Senior Lease attributable to the lease of the RCA Dome, thereby permitting a release of the RCA Dome from the leased premises under the Senior Lease; provided further that, any bonds or other obligations (other than a revenue bond obligation sold or assigned to or deposited with MCCRFA or the Bond Trustee (as such term is defined in the Prior Revenue Deposit Agreement) to replace the Board's existing lease rental obligation attributable to the lease of the RCA Dome) issued in connection with such amendments will expressly exclude from the revenues pledged to secure such obligations, any revenues received by the Board after December 31, 2027 from the Marion County Food and Beverage Tax levied and collected pursuant to IC 6-9-12 and the Marion County Admissions Tax levied and collected pursuant to IC 6-9-13. Events of Default Each of the following is an Event of Default under the Revenue Deposit Agreement: (i) failure of the Board or the OMB to deposit moneys into the Stadium and Convention Special Fund as provided in the Revenue Deposit Agreement; and (ii) failure of the Board, the Building Authority, Finance Authority, OMB, or the Budget Director to duly and punctually perform or observe any other of the covenants, agreements or conditions contained in the Revenue Deposit Agreement which continues for sixty (60) days after written notice thereof by the Deposit Trustee to such non-performing party; provided that, if such failure will be such that it can be corrected but it cannot be corrected within such sixty (60) day period, it will not constitute an Event of Default if corrective action is instituted within such period and corrective action is diligently pursued until the failure is corrected. C-1-80 The Deposit Trustee will promptly give notice setting forth the nature of the Event of Default including the party in default (the “Defaulting Party”) to all parties to the Revenue Deposit Agreement, together with a copy of the same to the Stadium Bond Trustee and the Trustee. The Deposit Trustee may, or upon the request of any party to the Revenue Deposit Agreement will, file suit against the Defaulting Party for specific performance, mandatory injunction, appointment of a receiver or for the enforcement of any other legal or equitable right as the Deposit Trustee, being advised by counsel, will determine. Deposit Trustee The Deposit Trustee may be removed at any time, by an instrument or concurrent instruments in writing delivered to the Deposit Trustee and to the Board, and signed by an authorized officer of the Finance Authority or the Owners of a majority of the aggregate principal amount of the outstanding Stadium Bonds and Bonds and such removal will take effect at the appointment of a successor Deposit Trustee and acceptance by the successor Deposit Trustee. In case the Deposit Trustee under will resign or be removed, or be dissolved, or will be in course of dissolution or liquidation, or otherwise become incapable of acting under the Revenue Deposit Agreement, or in case it will 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 Public Finance Director on behalf of the Finance Authority. Every such Deposit Trustee appointed pursuant to the provisions of the Revenue Deposit Agreement will be a trust company or bank authorized to act as Deposit Trustee within the State of Indiana having a reported capital, surplus and undivided profits of not less than Fifty Million Dollars ($50,000,000) if there be such an institution willing, qualified and able to accept the trust upon reasonable or customary terms. If no successor Deposit Trustee has been appointed and have accepted appointment within sixty (60) days after the giving of written notice by the resigning Deposit Trustee as aforesaid, the resigning Deposit Trustee may petition any court of competent jurisdiction for the appointment of a successor. Supplemental Agreements Without the Consent of the Owners of the Bonds. The Board, the OMB, the Finance Authority, the Building Authority, the Budget Director, and the Deposit Trustee may without the consent of, or notice to, any of the owners of the Stadium Bonds or the Bonds, enter into an agreement or agreements supplemental to the Revenue Deposit Agreement which is not inconsistent with the terms and provisions thereof for any one or more of the following purposes: (i) to provide for Additional Obligations in accordance with the provisions hereof; (ii) to make any changes or corrections in the Revenue Deposit Agreement as to which the Finance Authority will have been advised by counsel that the same are verbal corrections or changes or are required for the purpose of curing or correcting any ambiguity or defective or inconsistent provision or omission or mistake or manifest error contained in the Revenue Deposit Agreement, as are necessary or desirable; (iii) to add covenants and agreements of the Board for the purpose of further securing the payment of Obligations; (iv) to surrender any right, power or privilege reserved to or conferred upon the Board by the terms of the Revenue Deposit Agreement; (v) to confirm as further assurance any lien, pledge or charge, or the subjection to any lien, pledge or charge, created or to be created by the provisions of the Revenue Deposit Agreement; (vi) to grant or to confer upon the Owners of Obligations any additional rights, remedies, powers, authority or security that lawfully may be granted to or conferred upon them, or to grant to or confer upon the Deposit Trustee for the benefit of the Owners of Obligations any additional rights, duties, remedies, power or authority; (vii) to make any changes or modifications or amendments, additions or deletions which may be required to permit the Revenue Deposit Agreement to be qualified under the Trust Indenture Act of 1939 of the United States of America or laws analogous thereto applicable to bonds issued by governmental bodies; (viii) to pledge additional moneys, properties or Revenues to the lien of the Revenue Deposit Agreement; and (ix) to make any other change in the Revenue Deposit Agreement which, in the combined judgment of the Board, the Building Authority, the OMB, the Finance Authority, the Deposit Trustee, and the Budget Director, does not have a material adverse effect on the Deposit Trustee or the owners of Obligations. Notwithstanding the foregoing, the Board, the Building Authority, the OMB, the Finance Authority, the Budget Director, and the Deposit Trustee may, without the consent of, or notice to, any of the owners of the Stadium Bonds or Owners of the Bonds, enter into an agreement or agreements supplemental to the Revenue Deposit Agreement so long as such agreement or agreements affect the rights or interests of only those owners of Junior Obligations. C-1-81 The Indenture provides additional conditions upon the ability of the Finance Authority to enter into amendments to the Revenue Deposit Agreement without the consent of the Owners of the Bonds. See “THE INDENTURE – Supplemental Indentures, Loan Agreements, Revenue Deposit Agreements, Subleases, Leases and Amendments to Related Documents – Supplemental Loan Agreements and Supplemental Revenue Deposit Agreements Not Requiring Consent of Bondholders ”. With the Consent of the Owners of the Bonds. With the consent of the Owners of a majority of aggregate principal amount of the outstanding Stadium Bonds and Bonds, the Board, the OMB, the Finance Authority, the Building Authority, the Budget Director, Deposit Trustee, from time to time and at any time, may enter into an agreement or agreements supplemental to the Revenue Deposit Agreement for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, the Revenue Deposit Agreement, or modifying or amending the rights and obligations of the Board, the OMB, the Finance Authority, the Building Authority, the Budget Director, and the Deposit Trustee under the Revenue Deposit Agreement, or modifying or amending in any manner the rights of the Owners of Obligations then outstanding. However, without the specific consent of the Owner of each Obligation which would be affected thereby, no such supplemental agreement or agreements will: (i) change the dates for or amounts of the payments on the Obligations; (ii) reduce the percentage of the aggregate principal amount of outstanding Stadium Bonds and Bonds which are required to consent to any supplemental agreement amending or supplementing the provisions of the Revenue Deposit Agreement; (iii) give to any Obligation any preference over any other Obligation secured hereby, except as provided therein and in the Revenue Deposit Agreement; (iv) authorize the creation of any pledge of or lien and charge on, or create a pledge of or lien and charge on, the Excise Tax Revenues, the Fees, the Additional Marion County Professional Sports Development Area Revenues, any other Revenues pledged by the Board under the Revenue Deposit Agreement or any other trust funds prior, superior or equal to the pledge of or lien and charge on such Revenues and other trust funds created therein for the payment of the Obligations; or (v) deprive the Owner of an Obligation of the security afforded by the Revenue Deposit Agreement. Notwithstanding the foregoing, the Board, the OMB, the Finance Authority, the Building Authority, the Budget Director, and the Deposit Trustee may, without the consent of, or notice to, any of the Owners of Obligations, enter into an agreement or agreements supplemental to the Revenue Deposit Agreement so long as such agreement or agreements affect the rights or interests of only those Owners of Junior Obligations. The Indenture provides additional conditions upon the ability of the Finance Authority to enter into amendments to the Revenue Deposit Agreement with the consent of the Owners of the Bonds. See “THE INDENTURE--Supplemental Indentures, Loan Agreements, Revenue Deposit Agreements, Subleases, Leases and Amendments to Related Documents--Supplemental Loan Agreements and Supplemental Revenue Deposit Agreements Requiring Consent of Bondholders”. Defeasance; Early Termination Except as provided below, if (1) the Board pays, or causes to be paid, or makes provision for payment, or there will otherwise be paid, to the Owners of all outstanding Obligations all amounts due under the provisions of such Obligations and the Revenue Deposit Agreement, and (2) the Board pays all expenses and fees of the Deposit Trustee, the Finance Authority, the OMB, the Budget Director, and the Building Authority, then the pledge of any Excise Tax Revenues, any Fees, any Additional Marion County Professional Sports Development Area Revenues, any other Revenues pledged by the Board under the Revenue Deposit Agreement and other moneys and securities pledged under the Revenue Deposit Agreement and all covenants, agreements and other obligations of the Board will thereupon cease, terminate and become void and be discharged and satisfied. In the event that the Stadium Sublease is terminated early, the Revenue Deposit Agreement will remain effective and all funds deposited thereunder will be used by the Deposit Trustee to pay the fees, expenses, and any other obligations of the Board and Building Authority, including the fees, expenses, and any other obligations of Building Authority related to the planning, completion, or financing of the Stadium Project, including without limitation payment of costs of any land acquisition expenses, and any architectural, engineering, financial, and legal fees. If (1) the Board will pay, or cause to be paid, or make provision for payment, or there will otherwise be paid, such fees, expenses and obligations of the Building Authority, and (2) the conditions set forth in the preceding paragraph above have been satisfied, then the pledge of any Excise Tax Revenues, any Fees, any Additional Marion C-1-82 County Professional Sports Development Area Revenues, any other Revenues pledged by the Board under the Revenue Deposit Agreement and other moneys and securities pledged under the Revenue Deposit Agreement and all covenants, agreements and other obligations of the Board will thereupon cease, terminate and become void and be discharged and satisfied. C-1-83 PAGE INTENTIONALLY LEFT APPENDIX C-2 SUMMARY OF CERTAIN PROVISIONS OF LIQUIDITY FACILITY AND CONTINUING COVENANT AGREEMENT Following the issuance of the Series 2015 A Bonds, the then remaining outstanding Series 2008 A-1 Bonds and the Series 2008 A-2 Bonds will be on parity with the Series 2015 A Bonds. The Series 2008 A-1 Bonds have been directly purchased pursuant to a Continuing Covenant Agreement. The Series 2008 A-2 Bonds are supported by a Liquidity Facility from a Liquidity Provider with respect to the Purchase Price thereof. Series 2008 A-2 Liquidity Facility General. The following description is a summary of certain provisions of the Series 2008 A-2 Liquidity Facility. Such summary does not purport to be a complete description or restatement of the material provisions of the Series 2008 A-2 Liquidity Facility. Investors should obtain and review a copy of the Series 2008 A-2 Liquidity Facility in order to understand all of the terms of such document. The Series 2008 A-2 Liquidity Facility provides that, subject to the terms and conditions set forth therein, BMO Harris Bank N.A. shall purchase the Series 2008 A-2 Convention Center Bonds tendered or deemed tendered from time to time pursuant to an optional or mandatory tender by owners thereof in accordance with the terms of the Indenture, to the extent such Series 2008 A-2 Convention Center Bonds are not remarketed by the Remarketing Agent therefor or for which remarketing proceeds have not been received by the Remarketing Agent or the Trustee by the specified time set forth in the Indenture. The Series 2008 A-2 Liquidity Facility will expire on the Expiration Date, unless extended or terminated pursuant to its terms. Available Commitment. Upon the date of issuance of the Series 2015 A Bonds, it is expected that the Available Commitment under the Series 2008 A-2 Liquidity Facility will be in the amount of $50,370,360.55, consisting of an Available Principal Commitment of $49,765,000 and an Available Interest Commitment (as each such term is defined in the Series 2008 A-2 Liquidity Facility) of $605,360.55, which amount equals thirty-seven (37) days’ interest on the amount of the Available Principal Commitment set forth above, based upon an assumed rate of interest of twelve percent (12%) per annum and a 365-day year for the actual number of days elapsed. Purchase of Tendered Series 2008 A-2 Convention Center Bonds by the Series 2008 A-2 Liquidity Provider. Under certain circumstances described below, the obligations of BMO Harris Bank N.A. to purchase the Series 2008 A-2 Convention Center Bonds tendered or deemed tendered by the owners thereof pursuant to an optional or mandatory tender may be immediately suspended or terminated without notice to the Bondholders. In such event, sufficient funds may not be available to purchase the Series 2008 A-2 Convention Center Bonds tendered or deemed tendered by the owners thereof pursuant to an optional or mandatory tender. In addition, the Series 2008 A-2 Liquidity Facility does not provide support or security for the payment of principal of, premium, if any, or interest on the Series 2008 A-2 Convention Center Bonds. BMO Harris Bank N.A. will purchase from time to time during the period prior to the Expiration Date or earlier termination of the Series 2008 A-2 Liquidity Facility, Eligible Bonds (as defined in the Series 2008 A-2 Liquidity Facility), tendered or deemed tendered from time to time during the period from and including February 4, 2014, to and including the Expiration Date (unless earlier terminated pursuant to the terms of the Series 2008 A-2 Liquidity Facility) pursuant to an optional or mandatory tender by owners thereof in accordance with the terms and provisions of the Indenture, in each case, to the extent the Series 2008 A-2 Convention Center Bonds are not remarketed in accordance with the terms and provisions of the Remarketing Agreement therefor (“Bank Bonds”) or for which remarketing proceeds have not been received by the Remarketing Agent or the Trustee by the specified time set forth in the Indenture. The price to be paid by BMO Harris Bank N.A. for the Series 2008 A-2 Convention Center Bonds will be equal to the aggregate principal amount of the Series 2008 A-2 Convention Center Bonds plus interest accrued thereon to but excluding the date of such purchase; provided that the aggregate principal amount of such Series 2008 A-2 Convention Center Bonds so purchased shall not exceed the Available Principal Commitment, C-2-1 plus the lesser of (i) the Available Interest Commitment and (ii) interest accrued thereon to but excluding the date of such purchase; provided that if the applicable purchase date is an Interest Payment Date (as defined in the Series 2008 A-2 Liquidity Facility), the amount described in this sentence shall be reduced by the amount of interest payable with respect to each such Eligible Bond on such Interest Payment Date. Bank Bonds and Maturity Thereof. All Eligible Bonds purchased by BMO Harris Bank N.A. shall constitute Bank Bonds and have all the characteristics of Bank Bonds as set forth in the Series 2008 A-2 Liquidity Facility and in the Indenture, including bearing interest at the Bank Rate or the Default Rate (each as defined in the Series 2008 A-2 Liquidity Facility). BMO Harris Bank N.A. expressly reserves the right to sell, at any time, Bank Bonds and, upon purchasing Bank Bonds, a purchaser shall be entitled to all rights and privileges afforded to registered owners of the Series 2008 A-2 Convention Center Bonds. All amounts owed to BMO Harris Bank N.A. with respect to Bank Bonds shall become immediately due and payable on the Payment Date (as defined herein), if not repaid or otherwise declared due and payable prior to such date in accordance with the terms of the Series 2008 A-2 Liquidity Facility or the Indenture. Each Bank Bond, and the accrued interest thereon, shall be paid in full by or on behalf of the Finance Authority on the earliest to occur of (i) the date on which on any Bank Bonds are redeemed, defeased, accelerated or otherwise paid in accordance with their terms, (ii) the date of remarketing of the Bank Bonds, (iii) the date on which any Bank Bonds mature in accordance with their terms, (iv) the Substitution Date (being the date upon which an Alternate Liquidity Facility (as defined in the Series 2008 A-2 Liquidity Facility) is substituted for the Series 2008 A-2 Liquidity Facility), (v) the close of business on the Conversion Date (being the date upon which the Series 2008 A-2 Convention Center Bonds has been converted to a rate other than the Daily Rate or the Weekly Rate, unless such conversion is to the Term Rate or the Flexible Rate (each as defined in the Indenture) and BMO Harris Bank N.A. has given its prior written consent to such conversion and, if applicable, the Available Interest Commitment has been increased in connection with a conversion to the Term Rate or the Flexible Rate), (vi) in the event certain representations and warranties contained in the Series 2008 A-2 Liquidity Facility shall not be true and correct and a Default or Event of Default shall have occurred and be continuing on the Amortization Commencement Date (being the earliest to occur of (x) the ninetieth (90th) day following the related Purchase Date and (y) the Expiration Date, unless extended), and (vii) the Amortization End Date (being, with respect to each Bank Bond, the earliest to occur of (v) the third (3rd) anniversary of the related Amortization Commencement Date, (w) the third (3rd) anniversary of the Expiration Date, (x) the Conversion Date, (y) the Substitution Date and (z) the date on which all such obligations under the Series 2008 A-2 Liquidity Facility and under the Fee Agreement (as defined in the Series 2008 A-2 Liquidity Facility) become due in accordance the terms of the Series 2008 A-2 Liquidity Facility as a result of an Event of Default (any one of the foregoing (i) through (vii) constituting a “Payment Date”). If on any Amortization Commencement Date, certain representations and warranties contained in the Series 2008 A-2 Liquidity Facility shall be true and correct and no Default or Event of Default shall have occurred and be continuing, then the applicable Bank Bonds and the accrued interest thereon shall be paid by or on behalf of the Finance Authority upon the occurrence of any of the events described in clauses (i) through (v) of the preceding paragraph and shall, in addition thereto, be redeemed in whole by or on behalf of the Finance Authority in 20 equal quarterly installments on each Amortization Payment Date (as defined herein), provided that in any event all of the then unpaid principal amount of Bank Bonds shall be redeemed on the Amortization End Date. “Amortization Payment Date” means, with respect to each Bank Bond, (a) the applicable related Amortization Commencement Date and the first Business Day of each third month to occur thereafter, which occurs prior to the Amortization End Date, and (b) the Amortization End Date. Events of Default. The following events, among others, constitute Events of Default under the Series 2008 A-2 Liquidity Facility. Reference is made to the Series 2008 A-2 Liquidity Facility for a complete listing of all Events of Default. (a) the Finance Authority shall fail to pay when due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) any principal of, or interest on, any Series 2008 A-2 Convention Center Bond or any Bank Bond (other than as a result of acceleration of the payment of any Bank Bond pursuant to clause (e) or (f) described in this Appendix under “Series 2008 A-2 Liquidity Facility—Remedies” below); or C-2-2 (b) the Finance Authority shall fail to pay any other amount owed by the Finance Authority under the Series 2008 A-2 Liquidity Facility or under the Fee Agreement (other than amounts described in clause (a) above) and such failure shall continue for three (3) Business Days; or (c) any representation or warranty made by or on behalf of the Finance Authority in the Series 2008 A-2 Liquidity Facility or in any other Related Document (as defined in the Series 2008 A-2 Liquidity Facility) or in any certificate or statement delivered under the Series 2008 A-2 Liquidity Facility or under any other Related Document shall be incorrect or untrue in any material respect when made or deemed to have been made or delivered; or (d) the Finance Authority shall default in the due performance or observance of certain covenants set forth in the Series 2008 A-2 Liquidity Facility; or (e) the Finance Authority shall default in the due performance or observance of any other term, covenant or agreement contained in the Series 2008 A-2 Liquidity Facility or any other Related Document and such default shall remain unremedied for a period of thirty (30) days after the earlier of (i) the Finance Authority’s knowledge of the occurrence thereof or (ii) the delivery of notice thereof from BMO Harris Bank N.A.to the Finance Authority; or (f) one or more final, unappealable judgments against the Finance Authority payable from the Pledged Revenues (as defined in the Series 2008 A-2 Liquidity Facility) for the payment of money (and not covered by insurance) or attachments against the Pledged Revenues, which, individually or in the aggregate, equal or exceed $5,000,000, shall remain unpaid, unstayed, undischarged, unbonded or undismissed for a period of sixty (60) days; or (g) (i) the Finance Authority shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it, or seeking to declare a moratorium with respect to the payment of principal of or interest on any indebtedness of the Finance Authority senior to or on a parity with the Series 2008 A2 Convention Center Bonds and secured by and payable from the Pledged Revenues, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets or any substantial part of the Collateral (as defined in the Series 2008 A-2 Liquidity Facility), or the Finance Authority shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Finance Authority any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in an order for such relief or in the appointment of a receiver or similar official or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against the Finance Authority, any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets or for all or any substantial part of the Collateral, which (A) results in the entry of an order for any such relief or (B) shall not have been vacated, discharged or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) the Finance Authority shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) above; or (v) the Finance Authority shall admit in writing its inability to pay its debts generally as they become due, or shall become insolvent within the meaning of Section 101(32) of the United States Bankruptcy Code; or C-2-3 (vi) (a) The Finance Authority shall impose a debt moratorium, debt restructuring, debt adjustment or comparable extraordinary restriction on the repayment when due and payable of the principal of or interest on any indebtedness of the Finance Authority secured by or payable from Pledged Revenues that is senior to or on a parity with the Series 2008 A-2 Convention Center Bonds and Bank Bonds or (b) any Governmental Authority (as defined in the Series 2008 A-2 Liquidity Facility) having appropriate jurisdiction over the Finance Authority shall make a finding or ruling or shall enact or adopt legislation or issue an executive order or enter a judgment or decree which results in a debt moratorium, debt restructuring, debt adjustment or comparable extraordinary restriction on the repayment when due and payable of the principal of or interest on the Series 2008 A-2 Convention Center Bonds or Bank Bonds or on all indebtedness of the Finance Authority; or (h) (i) any provision of the Series 2008 A-2 Liquidity Facility or any Bond Document (as defined in the Series 2008 A-2 Liquidity Facility) related to (A) payment of principal of or interest on (1) the Series 2008 A-2 Convention Center Bonds (including Bank Bonds) or (ii) any other Bonds or (B) the validity or enforceability of the pledge of the Collateral shall at any time for any reason cease to be valid and binding on the Finance Authority as a result of a finding or ruling by a court or Governmental Authority with competent jurisdiction, or shall be declared, in a final nonappealable judgment by any court of competent jurisdiction, to be null and void, invalid or unenforceable; or (ii) the validity or enforceability of any material provision of the Series 2008 A-2 Liquidity Facility or any Bond Document related to (A) payment of principal of or interest on the Series 2008 A-2 Convention Center Bonds (including Bank Bonds) or any other Parity or Senior Debt (as defined in the Series 2008 A-2 Liquidity Facility) or (B) the validity or enforceability of the pledge of the Collateral shall be publicly contested by the Finance Authority; or (iii) any material provisions of the Series 2008 A-2 Liquidity Facility or any other Related Document, other than a provision described in clause (i) above, but including any provision of the Series 2008 A-2 Liquidity Facility or any other Related Document related to the payment of principal of or interest on any indebtedness of the Finance Authority senior to or on a parity with the Series 2008 A-2 Convention Center Bonds and secured by and payable from the Pledged Revenues, shall at any time for any reason cease to be valid and binding on the Finance Authority as a result of a ruling or finding by a court or a Governmental Authority with competent jurisdiction or shall be declared in a final non-appealable judgment by any court with competent jurisdiction to be null and void, invalid or unenforceable, or the validity or enforceability thereof shall be publicly contested by the Finance Authority; or (i) the Finance Authority shall fail to pay when due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) (i) the principal on any Parity and Senior Debt (other than a failure to pay any amount relating to an obligation to reimburse or repay any bank or other Person (as defined in the Series 2008 A-2 Liquidity Facility) in respect of amounts paid or advanced under a letter of credit, credit agreement, liquidity facility or other instrument which has been accelerated pursuant to the terms of the applicable agreement), or any interest or premium thereon, and such failure shall continue beyond any applicable period of grace specified in any underlying resolution, indenture, contract or instrument providing for the creation of or concerning such indebtedness, or pursuant to the provisions of any such resolution, indenture, contract or instrument, the maturity of any such Parity and Senior Debt, as a result of a payment default of any nature with respect to any Parity and Senior Debt, shall have been or may be accelerated or may be required to be prepaid prior to the stated maturity thereof; or (ii) any amount relating to an obligation to reimburse or to repay any bank or other Person in respect of amounts paid or advanced under a letter of credit, credit agreement, liquidity facility or other instrument which has been accelerated pursuant to the terms of the applicable agreement; or (j) (i) the long-term unenhanced rating by Fitch, S&P and Moody’s of the Series 2008 A-2 Convention Center Bonds or any other indebtedness of the Finance Authority senior to or on a parity with the Series 2008 A-2 Convention Center Bonds and secured by and payable from the Pledged Revenues shall be withdrawn or suspended (in either case, for credit related reasons) or reduced below “BBB-” (or its equivalent) by Fitch, “BBB-” (or its equivalent) by S&P and “Baa3” (or its equivalent) by Moody’s, respectively; or (ii) the long-term unenhanced rating by Fitch, S&P or Moody’s of the Series 2008 A-2 Convention Center Bonds or any other indebtedness of the Finance Authority senior to or on a parity with the Series 2008 A-2 Convention Center Bonds and secured by and C-2-4 payable from Pledged Revenues is reduced below “A-” (or its equivalent) by Fitch, “A-” (or its equivalent) by S&P or “A3” (or its equivalent) by Moody’s; or (k) any Indenture Event of Default (as defined in the Series 2008 A-2 Liquidity Facility) or any “event of default” under any instrument authorizing the issuance of indebtedness of the Finance Authority senior to or on a parity with the Series 2008 A-2 Convention Center Bonds and secured by and payable from the Pledged Revenues or any other Related Document which is not cured within any applicable cure period shall occur, which, if not cured, would give rise to remedies available thereunder; or (l) the General Assembly of the State shall fail to make appropriations in an amount sufficient to make all lease payments due under the Lease during the period for which such appropriations are being made, or (m) there shall have been rendered a final determination that interest on the Series 2008 A-2 Convention Center Bonds is includable in the gross income of the owners thereof for federal income tax purposes, as a result of the entry of any decree or judgment by a court of competent jurisdiction or the taking of any official action by the Internal Revenue Service. Event of Default under the Indenture. The occurrence and continuation of an Event of Default under the Series 2008 A-2 Liquidity Facility, including, without limitation, a failure to pay any commitment fees thereunder, is an Event of Default under the Indenture, but only for so long as the Series 2008 A-2 Liquidity Facility remains in full force and effect and BMO Harris Bank N.A. is not then in default thereunder. Remedies. The following are remedies available to BMO Harris Bank N.A. under the Series 2008 A-2 Liquidity Facility upon the occurrence of Events of Default thereunder: (a) Upon the occurrence of an Event of Default as described in clauses (a), (f), (g), (h)(i), (i)(i), (j)(i), or (l) in this Appendix under “Series 2008 A-2 Liquidity Facility—Events of Default” above (each, a “Special Event of Default”), all obligations of BMO Harris Bank N.A. under the Series 2008 A-2 Liquidity Facility to purchase the Series 2008 A-2 Convention Center Bonds shall be immediately and automatically terminated, without notice, and thereafter BMO Harris Bank N.A. shall have no further obligation to purchase any such Series 2008 A-2 Convention Center Bonds. Promptly upon obtaining knowledge of any Special Event of Default (whether from the Finance Authority, the Trustee or otherwise), and without affecting in any way the termination of the obligations of BMO Harris Bank N.A. to purchase the Series 2008 A-2 Convention Center Bonds or incurring liability or responsibility to any Person by reason of its failure to do so, BMO Harris Bank N.A. shall give the Finance Authority, the Trustee and the Remarketing Agent written notice of such Special Event of Default. The Finance Authority shall promptly direct the Trustee to notify all Owners (as defined in the Series 2008 A-2 Liquidity Facility) of any termination of the obligations of BMO Harris Bank N.A. to purchase the Series 2008 A-2 Convention Center Bonds as a result of the occurrence of such Special Event of Default. (b) Upon the occurrence of an Event of Default described in clause (h)(ii) in this Appendix under “Series 2008 A-2 Liquidity Facility—Events of Default” above, the obligations of BMO Harris Bank N.A. under the Series 2008 A-2 Liquidity Facility shall be suspended from the time of the occurrence of such Event of Default, and in the event any provision of such Series 2008 A-2 Liquidity Facility or any other Bond Document relating to the payment of principal of or interest on the Series 2008 A-2 Convention Center Bonds (including Bank Bonds) or any other indebtedness of the Finance Authority senior to or on a parity with the Series 2008 A-2 Convention Center Bonds and secured by and payable from the Pledged Revenues or the pledge of the Collateral shall be determined to be null and void, unenforceable or invalid, in either case, by a court or other Governmental Authority with competent jurisdiction, then the obligations of BMO Harris Bank N.A. under the Series 2008 A-2 Liquidity Facility will terminate in accordance with clause (a) above; provided, however, that if such provisions are upheld in their entirety, then BMO Harris Bank N.A.’s obligations under the Series 2008 A-2 Liquidity Facility shall be automatically reinstated and the terms of each such Liquidity Facility will continue in full force and effect (unless the Series 2008 A-2 Liquidity Facility shall have otherwise expired or been terminated in accordance with its terms) as if there had been no such suspension. If the Event of Default which gave rise to the suspension of the obligations of BMO Harris Bank N.A. described in this clause has not been cured or does not cease to exist prior to the threeyear anniversary of such occurrence or the Series 2008 A-2 Liquidity Facility shall have terminated in accordance with its terms, the obligations of BMO Harris Bank N.A. under the Series 2008 A-2 Liquidity Facility shall be C-2-5 terminated upon written notice from BMO Harris Bank N.A. to the Finance Authority, and thereafter BMO Harris Bank N.A. shall have no further obligations under such Series 2008 A-2 Liquidity Facility. (c) Upon the occurrence and during the continuance of a Default (as defined in the Series 2008 A-2 Liquidity Facility) described in clause (g)(ii) or (iii) in this Appendix under “Series 2008 A-2 Liquidity Facility— Events of Default” above, the obligations of BMO Harris Bank N.A. to purchase the Series 2008 A-2 Convention Center Bonds under the Series 2008 A-2 Liquidity Facility shall be immediately and automatically suspended, without notice, and BMO Harris Bank N.A. shall be under no further obligation under the Series 2008 A-2 Liquidity Facility to purchase the Series 2008 A-2 Convention Center Bonds, until the bankruptcy, insolvency or similar proceeding referred to therein is terminated prior to the court entering an order granting the relief sought in such proceeding. In the event such proceeding is terminated, then the obligations of BMO Harris Bank N.A. under the Series 2008 A-2 Liquidity Facility shall be automatically reinstated and the terms of the Series 2008 A-2 Liquidity Facility shall continue in full force and effect (unless the obligations of BMO Harris Bank N.A. to purchase the Series 2008 A-2 Convention Center Bonds under the Series 2008 A-2 Liquidity Facility shall otherwise have terminated or there has occurred a Special Event of Default) as if there had been no such suspension. (d) Upon the occurrence and continuance of an Event of Default, BMO Harris Bank N.A. may give written notice of such Event of Default (a “Notice of Termination Date”) to the Finance Authority, the Trustee and the Remarketing Agent for the Series 2008 A-2 Convention Center Bonds and request the Trustee to give notice of mandatory tender for purchase of the Series 2008 A-2 Convention Center Bonds pursuant to the Indenture and prohibit the remarketing of such Series 2008 A-2 Convention Center Bonds, specifying the Business Day on which at 3:00 p.m. (New York time) the Available Commitment shall terminate (the “Termination Date”), which shall not be less than thirty (30) days from the date of receipt of such notice by the Trustee and after the Termination Date, BMO Harris Bank N.A. shall be under no further obligation to purchase the Series 2008 A-2 Convention Center Bonds under the Series 2008 A-2 Liquidity Facility. (e) Upon the occurrence and continuance of an Event of Default, BMO Harris Bank N.A. may give notice to the Finance Authority that all Bank Bonds and Term Loans (as defined in the Series 2008 A-2 Liquidity Facility) shall thereupon become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are waived by the Finance Authority. (f) In addition to the rights and remedies described in clauses (a), (b), (c), (d) and (e) above under this subcaption, in the case of any Event of Default described in this Appendix under “Series 2008 A-2 Liquidity Facility—Events of Default” above, BMO Harris Bank N.A.: (i) may declare all Obligations (as defined in the Series 2008 A-2 Liquidity Facility) of the Finance Authority to BMO Harris Bank N.A. under the Series 2008 A-2 Liquidity Facility and under the Bank Bonds to be immediately due and payable, and the same shall thereupon become due and payable without demand, presentment, protest, notice of intent to accelerate, notice of acceleration or further notice of any kind, all of which are expressly waived; provided, however, that upon the occurrence of an Event of Default under clause (g) described in this Appendix under “Series 2008 A-2 Liquidity Facility—Events of Default” above, all Obligations of the Finance Authority to BMO Harris Bank N.A. under the Series 2008 A-2 Liquidity Facility and under the Bank Bonds shall immediately and automatically become due and payable, without demand, presentment, protest, notice of intent to accelerate, notice of acceleration or further notice of any kind, all of which are expressly waived; provided, further, however, that notwithstanding anything described in this clause, the Obligations may only be accelerated pursuant to the terms of the Series 2008 A-2 Liquidity Facility to the extent that such acceleration is permitted pursuant to the terms of the Indenture; or (ii) may take any other action or remedy permitted by law to enforce the rights of BMO Harris Bank N.A. under the Series 2008 A-2 Liquidity Facility and under the Series 2008 A-2 Convention Center Bonds (if BMO Harris Bank N.A. is a Bank Bondholder (as defined in the Series 2008 A-2 Liquidity Facility)) and any other Related Document; provided, however, that BMO Harris Bank N.A. has agreed to purchase the Series 2008 A-2 Convention Center Bonds, subject to and in accordance with the terms and provisions of the Series 2008 A-2 Liquidity Facility notwithstanding the occurrence of an Event of Default, which does not terminate or suspend its obligations to purchase the Series 2008 A-2 Convention Center Bonds under clauses (a), (b), (c), (d) or (e) above under this subcaption. C-2-6 Alternate Liquidity Facility; Credit Enhancement Under the Indenture, the Finance Authority may provide any Alternate Liquidity Facility issued by any Liquidity Provider, in substitution for any Liquidity Facility, or any Credit Enhancement issued by any Credit Provider, on any Business Day not later than the fifth Business Day prior to the Expiration Date of any Liquidity Facility or Credit Enhancement then in effect. The Trustee will give notice of such Substitution Date in accordance with the applicable provisions of the Indenture. On or before the Substitution Date for any Alternate Liquidity Facility or Credit Enhancement, there must be delivered to the Trustee or the Tender Agent, as applicable: (i) such Alternate Liquidity Facility or Credit Enhancement in substitution for any Liquidity Facility or Credit Enhancement then in effect; (i) a Favorable Opinion of Bond Counsel; (ii) a written opinion of counsel for the provider of such Alternate Liquidity Facility or Credit Enhancement, to the effect that such Alternate Liquidity Facility or Credit Enhancement is a valid, legal and binding obligation of the provider thereof; and (iii) unless waived by such entity, written evidence satisfactory to any Liquidity Provider or Credit Provider of the provision for purchase from such Liquidity Provider of all Liquidity Provider Bonds, at a price equal to the principal amount thereof plus accrued and unpaid interest, and payment of all amounts due to any Liquidity Provider or Credit Provider under any reimbursement agreement, credit agreement, line of credit agreement, standby purchase agreement or other agreement, by and between such Liquidity Provider or Credit Provider and the Finance Authority (a “Reimbursement Agreement”), on or before the effective date of such Alternate Liquidity Facility or Credit Enhancement. Upon the satisfaction of the conditions described in the preceding sentence, the Trustee will accept such Alternate Liquidity Facility or Credit Enhancement on the close of business of the Substitution Date and will surrender any Liquidity Facility or Credit Enhancement then in effect to the provider thereof on the Substitution Date. If any condition to the substitution is not satisfied, the substitution will not occur, but the Series 2008 A-2 Convention Center Bonds will remain subject to mandatory purchase on the proposed Substitution Date, and, on the proposed Substitution Date, the Trustee will draw on the Series 2008 A-2 Liquidity Facility (and not the Alternate Liquidity Facility) to pay the Purchase Price of the Series 2008 A-2 Convention Center Bonds on the proposed Substitution Date. Ratings on Series 2008 A-2 Convention Center Bonds Standard & Poor’s Ratings Services (“S&P”), Moody’s Investors Service (“Moody’s”) and Fitch Ratings (“Fitch”) have assigned the following ratings to the Series 2008 A-2 Convention Center Bonds: Liquidity Provider Rating BMO Harris Bank N.A. S&P: “AA+”/“A-1” Moody’s: “Aa2”/“VMIG 1” Fitch: “AA+”/“F1+” These ratings reflect (i) the delivery of the Series 2008 A-2 Liquidity Facility by the Series 2008 A-2 Liquidity Provider and (ii) only the views of S&P, Moody’s and Fitch. An explanation of the ratings may be obtained from S&P at 55 Water Street, New York, New York 10004, from Moody’s at 7 World Trade Center, 250 Greenwich Street, New York, New York 10007 and from Fitch at One State Street Plaza, New York, New York 10004. C-2-7 The ratings are not a recommendation to buy, sell or hold any of the Series 2008 A-2 Convention Center Bonds. There is no assurance that the ratings will remain in effect for any given period of time or that a rating will not be revised downward or withdrawn entirely by Moody’s, S&P or Fitch if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of a rating may have an adverse effect on the market price or marketability of the Convention Center Bonds. Series 2008 A-1 Continuing Covenant Agreement General. The following description is a summary of certain provisions of the Series 2008 A-1 Continuing Covenant Agreement. Such summary does not purport to be a complete description or restatement of the material provisions of the Series 2008 A-1 Continuing Covenant Agreement. Investors should obtain and review a copy of the Series 2008 A-1 Continuing Covenant Agreement in order to understand all of the terms of such documents. Pursuant to the Series 2008 A-1 Continuing Covenant Agreement, Bank of America purchased the Series 2008 A-1 Convention Center Bonds on October 1, 2013. The Series 2008 A-1 Convention Center Bonds bear interest at the Series 2008 A-1 Index Floating Rate, being a per annum rate of interest equal to the sum of (i) the product of the SIFMA Index Rate and (ii) the Series 2008 A-1 Applicable Spread (each as defined in the Indenture). The commitment by Bank of America for the purchase of the Series 2008 A-1 Convention Center Bonds expires on April 1, 2017, unless extended by agreement of the parties or there shall have occurred a change in Mode from the Series 2008 A-1 Index Floating Rate Mode. Mandatory Tender. In the event that Bank of America, on or prior to the forty-fifth (45th) day preceding the Mandatory Tender Date (being the last day of the Series 2008 A-1 Index Floating Rate Period (as defined in the Indenture), which, currently is April 1, 2017), has not agreed to hold the Series 2008 A-1 Convention Center Bonds for a subsequent Series 2008 A-1 Index Floating Rate Period, the Series 2008 A-1 Convention Center Bonds shall be subject to mandatory tender on the Mandatory Tender Date, and the Finance Authority shall use its best efforts to cause the remarketing agent to remarket such Series 2008 A-1 Convention Center Bonds to another holder in connection with the conversion of the interest rate Mode on all of the Series 2008 A-1 Convention Center Bonds to a Mode other than the Series 2008 A-1 Index Floating Rate Mode. Failure to pay the Mandatory Tender Purchase Price (being an amount equal to 100% of the principal amount of the Series 2008 A-1 Convention Center Bonds) on the Mandatory Tender Date shall result in the Finance Authority being obligated to redeem the Series 2008 A-1 Convention Center Bonds on the Mandatory Tender Date; provided, that if (i) no Default or Event of Default under the Series 2008 A-1 Continuing Covenant Agreement shall have occurred and be continuing and (ii) the representations and warranties of the Finance Authority set forth in the Series 2008 A-1 Continuing Covenant Agreement shall be true and correct in all material respects on the Mandatory Tender Date, then the Finance Authority shall cause the principal amount of such Series 2008 A-1 Convention Center Bonds to be redeemed in installments payable on each Amortization Payment Date (being (a) the Initial Amortization Payment Date, which is the 365th day following the Mandatory Tender Date, and the first Business Day of each third calendar month occurring thereafter which occurs prior to the related Amortization End Date (as defined herein) and (b) the related Amortization End Date (being the earliest to occur of (w) the fifth anniversary of the Mandatory Tender Date, (x) the date on which the interest rate on all of the Series 2008 A-1 Convention Center Bonds has been converted to an interest rate Mode other than the Series 2008 A-1 Index Floating Rate Mode (as defined in the Indenture), (y) the date on which all Series 2008 A-1 Convention Center Bonds are redeemed, repaid, prepaid or cancelled in accordance with the terms of the Indenture and (z) the date on which all obligations under the Series 2008 A-1 Continuing Covenant Agreement become due as a result of an Event of Default thereunder), with the final installment in an amount equal to the entire then-outstanding principal amount of the Series 2008 A-1 Convention Center Bonds to be redeemed on the Amortization End Date. Each Amortization Payment shall be that amount of principal which will result in equal (as nearly as practicable) aggregate Amortization Payments over the Amortization Period (being the period commencing on the Mandatory Tender Date and ending on the Amortization End Date). Events of Default. The following events, among others, constitute Events of Default under the Series 2008 A-1 Continuing Covenant Agreement. Reference is made to the Series 2008 A-1 Continuing Covenant Agreement for a complete listing of all Events of Default: C-2-8 (a) the Finance Authority shall fail to pay the principal of or interest on any Series 2008 A-1 Convention Center Bond when due (whether by scheduled maturity, required prepayment, redemption or otherwise); or (b) the Finance Authority shall fail to pay any Obligation, being all amounts payable by the Finance Authority under the Series 2008 A-1 Continuing Covenant Agreement and the Related Documents (as defined in the Series 2008 A-1 Continuing Covenant Agreement), other than the obligation to pay the principal of or interest on the Series 2008 A-1 Convention Center Bonds, and such failure shall continue for three (3) Business Days; or (c) any representation or warranty made by or on behalf of the Finance Authority in the Series 2008 A-1 Continuing Covenant Agreement or in any other Related Document or in any certificate or statement delivered thereunder shall be incorrect or untrue in any material respect when made or deemed to have been made or delivered; or (d) the Finance Authority shall default in the due performance or observance of certain specified covenants contained in Article VI of the Series 2008 A-1 Continuing Covenant Agreement; or (e) the Finance Authority shall default in the due performance or observance of any other term, covenant or agreement contained in the Series 2008 A-1 Continuing Covenant Agreement or any other Related Document and such default shall remain unremedied for a period of thirty (30) days after the occurrence thereof; or (f) one or more final, unappealable judgments against the Finance Authority payable from the Pledged Revenues (as defined in the Series 2008 A-1 Continuing Covenant Agreement) for the payment of money (and not covered by insurance), which, individually or in the aggregate, equal or exceed $5,000,000, shall remain unpaid, unstayed, undischarged, unbonded or undismissed for a period of sixty (60) days; or (g) (i) the Finance Authority shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it, or seeking to declare a moratorium with respect to the payment of principal of or interest on any indebtedness of the Finance Authority senior to or on a parity with the Series 2008 A-1 Bonds and secured by and payable from the Pledged Revenues, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets or for all of the Collateral (as defined in the Series 2008 A-1 Continuing Covenant Agreement), or the Finance Authority shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Finance Authority any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in an order for such relief or in the appointment of a receiver or similar official or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against the Finance Authority, any case, proceeding or other action seeking, issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets or for all of the Collateral, which (A) results in the entry of an order for any such relief or (B) shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) the Finance Authority shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) above; or C-2-9 (v) the Finance Authority shall admit in writing its inability to pay its debts generally as they become due, or shall become insolvent within the meaning of Section 101(32) of the United States Bankruptcy Code; or (vi) (a) the Finance Authority shall impose a debt moratorium, debt restructuring, debt adjustment or comparable extraordinary restriction on the repayment when due and payable of the principal of or interest on any indebtedness of the Finance Authority secured by or payable from Pledged Revenues that is senior to or on a parity with the Series 2008 A-1 Convention Center Bonds or (b) any Governmental Authority (as defined in the Series 2008 A-1 Continuing Covenant Agreement) having appropriate jurisdiction over the Finance Authority shall make a finding or ruling or shall enact or adopt legislation or issue an executive order or enter a judgment or decree which results in a debt moratorium, debt restructuring, debt adjustment or comparable extraordinary restriction on the repayment when due and payable of the principal of or interest on the Series 2008 A-1 Convention Center Bonds or any other indebtedness of the Finance Authority secured by the Pledged Revenues; or (h) (i) any provision of the Series 2008 A-1 Continuing Covenant Agreement or any Related Document related to (A) payment of principal of or interest on the Series 2008 A-1 Convention Center Bonds, or (B) the validity or enforceability of the pledge of the Collateral shall at any time for any reason cease to be valid and binding on the Finance Authority as a result of a finding or ruling by a court or Governmental Authority with competent jurisdiction, or shall be declared, in a final nonappealable judgment by any court of competent jurisdiction, to be null and void, invalid or unenforceable; or (ii) the validity or enforceability of any material provision of this Agreement or any Related Document related to (A) payment of principal of or interest on the Series 2008 A-1 Convention Center Bonds or any indebtedness of the Finance Authority senior to or on a parity with the Series 2008 A-1 Convention Center Bonds and secured by and payable from the Pledged Revenues, or (B) the validity or enforceability of the pledge of the Collateral shall be publicly contested by the Finance Authority; or (iii) any other material provision of the Series 2008 A-1 Continuing Covenant Agreement or any other Related Document, other than a provision described in clause (i) above, shall at any time for any reason cease to be valid and binding on the Finance Authority as a result of a ruling or finding by a court or a Governmental Authority with competent jurisdiction or shall be declared in a final non-appealable judgment by any court with competent jurisdiction to be null and void, invalid, or unenforceable, or the validity or enforceability thereof shall be publicly contested by the Finance Authority; or (i) the Finance Authority shall fail to pay when due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) the principal of any Parity Bonds, or any other Parity and Senior Debt (each as defined in the Series 2008 A-1 Continuing Covenant Agreement), or any interest or premium thereon, and such failure shall continue beyond any applicable period of grace specified in any underlying resolution, indenture, contract or instrument providing for the creation of or concerning such indebtedness, or pursuant to the provisions of any such resolution, indenture, contract or instrument, the maturity of any such Parity Bonds, or any other Parity and Senior Debt, as a result of a default thereunder, shall have been or may be accelerated or may be required to be prepaid prior to the stated maturity thereof; or (j) the long-term unenhanced rating by Fitch, S&P or Moody’s of the Series 2008 A-1 Convention Center Bonds or any other indebtedness of the Finance Authority senior to or on a parity with the Series 2008 A-1 Convention Center Bonds and secured by and payable from Pledged Revenues shall be withdrawn or suspended for credit related reasons or is reduced below “BBB+” (or its equivalent) by Fitch, “BBB+” (or its equivalent) by S&P or “Baal” (or its equivalent) by Moody’s; or (k) any Indenture Event of Default (as defined in the Series 2008 A-1 Continuing Covenant Agreement) or any “event of default” under any instrument authorizing the issuance of indebtedness of the C-2-10 Finance Authority senior to or on a parity with the Series 2008 A-1 Convention Center Bonds and secured by and payable from the Pledged Revenues or any other Related Document which is not cured within any applicable cure period shall occur, which, if not cured, would give rise to remedies available thereunder; or (1) the General Assembly of the State in the biennial budget for each related year shall fail to make appropriations in an amount sufficient to make all lease payments due under the Lease during the period for which such appropriations are being made. Event of Default under the Indenture. The occurrence and continuation of an Event of Default under the Series 2008 A-1 Continuing Covenant Agreement is an Event of Default under the Indenture. Consequences of an Event of Default. If an Event of Default described in this Appendix under “Series 2008 A-1 Continuing Covenant Agreement—Events of Default” above, shall occur and be continuing, Bank of America may take one or more of the following actions at any time and from time to time (regardless of whether the actions are taken at the same or different times): (a) (i) by written notice to the Trustee and the Finance Authority, declare the outstanding amount of the Obligations under the Series 2008 A-1 Continuing Covenant Agreement to be immediately due and payable without presentment, demand, protest or further notice of any kind, all of which are expressly waived, and an action therefor shall immediately accrue; (ii) deliver a written notice to the Trustee and the Finance Authority that an Event of Default has occurred and is continuing and direct the Trustee and the Finance Authority, as applicable, to cause a mandatory redemption, mandatory tender or acceleration of the Series 2008 A-1 Convention Center Bonds or take such other remedial action as is provided for in the Indenture; (iii) either personally or by attorney or agent without bringing any action or proceeding, or by a receiver to be appointed by a court in any appropriate action or proceeding, take whatever action at law or in equity may appear necessary or desirable to collect the amounts due and payable under the Related Documents or to enforce performance or observance of any obligation, agreement or covenant of the Finance Authority under the Related Documents, whether for specific performance of any agreement or covenant of the Finance Authority or in aid of the execution of any power granted to Bank of America in the Related Documents; (iv) cure any Default, Event of Default or event of nonperformance thereunder or under any Related Document; provided, however, that Bank of America shall have no obligation to effect such a cure; and (v) exercise, or cause to be exercised, any and all remedies as it may have under the Related Documents (other than as provided for in clause (ii) above) and as otherwise available at law and at equity. (b) Notwithstanding the provisions described in clauses (a)(i) or (ii) above, (x) Bank of America shall not cause a mandatory redemption, mandatory tender or acceleration of the Series 2008 A-1 Convention Center Bonds as described in clauses (a)(i) or (ii) above until seven (7) days after the occurrence of an Event of Default described in clause (a), (h)(i), (h)(ii), (i) or (1) in this Appendix under “Series 2008 A-1 Continuing Covenant Agreement—Events of Default” above and (y) Bank of America shall notify the Finance Authority of a mandatory redemption, mandatory tender or acceleration at least one hundred eighty (180) days prior thereto in the case of any Event of Default not specified in the immediately preceding clause (x). Notwithstanding the foregoing sentence, if (i) upon an Event of Default described in clause (g) in this Appendix under “Series 2008 A-1 Continuing Covenant Agreement—Events of Default” above or (ii) if any other holder or credit enhancer of Debt (as defined in the Series 2008 A-1 Continuing Covenant Agreement) or any counterparty under any Swap Contract (as defined in the Series 2008 A-1 Continuing Covenant Agreement) related thereto causes any such Debt or other obligations of the Finance C-2-11 Authority to become immediately due and payable, Bank of America may immediately, without notice, avail itself of the remedies set forth in clause (a)(i) or (ii) above and/or declare or cause to be declared the unpaid principal amount of all outstanding Series 2008 A-1 Convention Center Bonds, all interest accrued and unpaid thereon, and all other amounts owing or payable thereunder to be immediately due and payable. Remedies Cumulative; Solely for the Benefit of Bank of America. To the extent permitted by, and subject to the mandatory requirements of, applicable Law, each and every right, power and remedy herein specifically given to Bank of America in the Related Documents shall be cumulative, concurrent and nonexclusive and shall be in addition to every other right, power and remedy specifically given in the Series 2008 A-1 Continung Covenant Agreement or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy (whether specifically therein given or otherwise existing) may be exercised from time to time and as often and in such order as may be deemed expedient by Bank of America, and the exercise or the beginning of the exercise of any power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy. The rights and remedies of the Bank of America set forth in the Series 2008 A-1 Continuing Covenant Agreement are for the sole and exclusive benefit, use and protection of Bank of America, and Bank of America is entitled, but shall have no duty or obligation to the Finance Authority, the Trustee or any other Person or otherwise, to exercise or to refrain from exercising any right or remedy reserved to it under the Series 2008 A-1 Continuing Covenant Agreement or under any of the other Related Documents. C-2-12 APPENDIX D - 1 FORM OF STATE CONTINUING DISCLOSURE AGREEMENT This CONTINUING DISCLOSURE AGREEMENT (this “Agreement”), made as of May 1, 2015 is entered into by and between the STATE OF INDIANA, acting by and through the Office of Management and Budget of the State of Indiana (the “State”) and the INDIANA FINANCE AUTHORITY (the “Finance Authority”) for the purpose of permitting Goldman, Sachs & Co., as representative of the underwriters of the Bonds (as hereinafter defined) to purchase the Bonds in compliance with the Securities and Exchange Commission (“SEC”) Rule 15c2-12 (the “SEC Rule”), as published in the Federal Register on November 17, 1994, and as thereafter amended. WITNESSETH THAT: WHEREAS, the Finance Authority is issuing its Lease Appropriation Refunding Bonds (Convention Center Expansion Project), Series 2015 A (the “Series 2015 A Bonds”), pursuant to (i) Indiana Code 4-4-10.9 and 11 (the “Finance Authority Act”) and Indiana Code 5-1-5, (ii) the Amended and Restated Trust Indenture, dated as of May 1, 2015 (the “Indenture”), between the Finance Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) and (iii) a resolution adopted by the Board of Directors of the Finance Authority on February 19, 2015; and WHEREAS, the Finance Authority will loan the proceeds of the Bonds to the Indiana Stadium and Convention Building Authority (the “Building Authority”), pursuant to the Loan Agreement, dated as of August 1, 2008, as amended and supplemented by the First Supplemental Loan Agreement, dated as of June 1, 2009, the Second Supplemental and Amendatory Loan Agreement, dated as of September 1, 2010, and the Third Supplemental Loan Agreement, dated as of May 1, 2015, each between the Finance Authority and the Building Authority, for the principal purpose of refunding, in part, certain outstanding bonds of the Finance Authority and the payment of certain costs and expenses related thereto; and WHEREAS, Rule 15c2-12 (the “Rule”), promulgated by the Securities and Exchange Commission (the “Commission”), pursuant to the Act (as hereinafter defined), provides that, except as otherwise provided in the Rule, a participating underwriter (as defined in the Rule) shall not purchase or sell municipal securities in connection with an offering (as defined in the Rule) unless the participating underwriter has reasonably determined that an issuer of municipal securities (as defined in the Rule) or an obligated person (as defined in the Rule) for whom financial or operating data is presented in the final official statement (as defined in the Rule) has undertaken, either individually or in combination with other issuers of such municipal securities or obligated persons, in a written agreement or contract for the benefit of holders of such securities, to provide certain information; and WHEREAS, the State and the Finance Authority are each an obligated person with respect to the Bonds; and NOW, THEREFORE, in consideration of the Participating Underwriters’ (as defined herein) and each Bondholder’s payment for and acceptance of any Bonds, the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: Section 1. Definitions. The terms defined herein, including the terms defined above and in this Section, shall have the meanings herein specified, unless the context or use clearly indicates another or different meaning or intent. Any terms defined in the Rule, but not otherwise defined herein, shall have the meanings specified in the Rule, unless the context or use clearly indicates another or different meaning or intent. (a) “Act” shall mean the Securities Exchange Act of 1934, as amended. D-1-1 (b) “Bondholder” shall mean any registered or beneficial owner or holder of any Bond, including any person which has or shares power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including any person holding Bonds through nominees, depositories or other intermediaries). (c) “Final Official Statement” shall mean the Official Statement, dated May 7, 2015, relating to the Bonds, including any document included therein by specific reference which is available to the public on the MSRB’s Internet Web site or filed with the Commission. (d) “Listed Events” shall mean any of the events listed in Section 4(d) and (e) of this Agreement. (e) “MSRB” shall mean the Municipal Securities Rulemaking Board. (f) “National Repository” means any nationally recognized municipal securities information repository for purposes of the Rule. As of July 1, 2009, the MSRB is the sole National Repository. See http://emma.msrb.org/. (g) “Obligated Person” shall mean any person who is either generally or through an enterprise, fund or account of such person committed by contract or other arrangement to support payment of all or part of the obligations on the Bonds (other than any providers of municipal bond insurance, letters of credit or liquidity facilities), for whom financial information or operating data is presented in the Final Official Statement. (h) “Participating Underwriter” shall mean each broker, dealer or municipal securities dealer acting as an underwriter in the primary offering of the Bonds. (i) “Repository” means each National Repository and each State Repository, if any. (j) “State Repository” means any public or private repository or entity designated by the State, if any, as an information repository for the purpose of the Rule and recognized as such by the Commission. As of the date of this Agreement there is no State Repository. Section 2. Term. The term of this Agreement shall commence on the date of delivery of the Bonds by the Finance Authority to the Participating Underwriters and shall expire on the earliest of (a) the date of payment in full of the principal of and premium, if any, and interest on the Bonds, whether upon scheduled maturity, redemption, acceleration or otherwise, (b) the date of defeasance of the Bonds in accordance with the terms of the Indenture or (c) with respect to the State only, the date upon which the State shall no longer be an Obligated Person. Section 3. Obligated Person and Compliance with Subsection (b)(5)(i) of the Rule. (a) The State hereby represents and warrants that, as of the date hereof: (i) the State is an Obligated Person with respect to the Bonds; and (ii) except as otherwise disclosed in the Final Official Statement, there have been no instances in the five (5) years prior to the date of the Final Official Statement in which the State failed to comply, in all material respects, with any previous undertakings in a written contract or agreement specified in subsection (b)(5)(i) of the Rule. (b) The Finance Authority hereby represents and warrants that, as of the date hereof: (i) the Finance Authority is an Obligated Person with respect to the Bonds; and (ii) except as otherwise disclosed in the Final Official Statement, there have been no instances in the five (5) years prior to the date of the Final Official Statement in which the Finance Authority or any predecessor failed to comply, in all material respects, with any previous undertakings in a written contract or agreement specified in subsection (b)(5)(i) of the Rule. D-1-2 Section 4. Undertaking to Provide Information. (a) the State: The State hereby undertakes to provide, either directly or indirectly through a designated agent for (i) To the Repository, the audited financial statements of the State, as prepared and examined by the Board of Accounts of the State for each twelve-month period ending June 30, beginning with the twelve-month period ended June 30, 2015, together with all notes thereto, within 60 days of receipt from the Board of Accounts of the State; (ii) To the Repository, within 220 days after each June 30, beginning with the fiscal year ended June 30, 2015, (A) financial information and operating data of the State of the type provided in Appendix A, “FINANCIAL AND ECONOMIC STATEMENT FOR STATE OF INDIANA,” of the Final Official Statement, and (B) if the audited financial statements for such fiscal year are not available by such deadline, unaudited financial statements in a format similar to the audited financial statements then most recently prepared for the State; (iii) To the Repository, within 220 days after each June 30, beginning with the fiscal year ended June 30, 2015, an annual statement which sets forth the amounts of the Local Revenues (as outlined in APPENDIX B to the Final Official Statement) collected by the State (the audited financial statements set forth in Section 4(a)(i) hereof, the financial information and operating data and, if required, the unaudited financial statements set forth in Section 4(a)(ii) hereof and the financial information or operating data set forth in this Section 4(a)(iii) are collectively referred in herein as the “Annual Financial Information”); and (iv) In a timely manner, to the Repository, notice of a failure of the State to provide required Annual Financial Information on or before the times specified in this Agreement. (b) The accounting principles pursuant to which the State’s financial statements will be prepared shall be: (i) generally accepted accounting principles, as in effect from time to time; or (ii) those mandated by State law from time to time. (c) Any Annual Financial Information may be set forth in a document or set of documents, or may be included by specific reference to documents available to the public on the MSRB’s Internet Web site or filed with the Commission. (d) Each of the Finance Authority and the State (but only to the extent the State shall have actual knowledge of such event) hereby undertakes to provide, either directly or indirectly through a designated agent for the Finance Authority or the State, to the Repository, in an electronic format as prescribed by the MSRB within ten (10) Business Days of the occurrence of any of the following events with respect to the Bonds, if material (which determination of materiality shall be made by the Obligated Person in accordance with the standards established by federal securities laws): (i) Non-payment related defaults; (ii) Modifications to rights of security holders; (iii) Bond calls (other than mandatory, scheduled redemptions, not otherwise contingent upon the occurrence of an event, the terms of which redemptions are set forth in detail in the Official Statement); (iv) Release, substitution or sale of property securing repayment of the securities; (v) The consummation of a merger, consolidation, or acquisition, involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of D-1-3 business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms; and (vi) Appointment of a successor or additional trustee or the change of name of a trustee. (e) Each of the Finance Authority and the State (but only to the extent the State shall have actual knowledge of such event) hereby undertakes to provide, either directly or indirectly through a designated agent for the Finance Authority or the State, to the Repository, in an electronic format as prescribed by the MSRB within ten (10) Business Days of the occurrence of any of the following events with respect to the Bonds, regardless of materiality: (i) Principal and interest payment delinquencies; (ii) Unscheduled draws on debt service reserves reflecting financial difficulties; (iii) Unscheduled draws on credit enhancements reflecting financial difficulties; (iv) Substitution of credit or liquidity providers, or their failure to perform; (v) Adverse tax opinions or other material events affecting the tax-exempt status of the security; (vi) Defeasances; (vii) Rating changes; (viii) The issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security; (ix) Tender offers; and (x) Bankruptcy, insolvency, receivership or similar events of the obligated person. (f) The Obligated Persons may from time to time choose to provide notice of the occurrence of any other event, in addition to those listed above (the “Listed Events”), if, in the judgment of the Obligated Person, such other event is material with respect to the Bonds, but the Obligated Persons do not commit to provide any such notice of the occurrence of any event except those events set forth above. (g) If any Annual Financial Information required by Section 4(a)(ii) or (iii) hereof no longer can be generated because the operations to which it relates have been materially changed or discontinued, a statement to that effect shall be deemed to satisfy the requirements of Section 4(a)(ii) or (iii) hereof. (h) All documents provided to the Repository under this Agreement shall be accompanied by identifying information as prescribed by the Repository. Section 5. Bondholders. Each Bondholder is an intended beneficiary of the obligations of the State and the Finance Authority under this Agreement, such obligations create a duty in the State and the Finance Authority to each Bondholder to perform such obligations, and each Bondholder shall have the right to enforce such duty. Section 6. Limitation of Rights. Nothing expressed or implied in this Agreement is intended to give, or shall give, to the Participating Underwriters, any underwriters, brokers or dealers, or any other person, other than the State, the Finance Authority and each Bondholder, any legal or equitable right, remedy or claim under or with respect to this Agreement or any rights or obligations hereunder. This Agreement and the rights and obligations hereunder are intended to be, and shall be, for the sole and exclusive benefit of the State, the Finance Authority and each Bondholder. D-1-4 Section 7. Remedies. (a) The sole and exclusive remedy for any breach or violation by the State or the Finance Authority of any obligation of the State or the Finance Authority under this Agreement shall be the remedy of specific performance by the State or the Finance Authority, respectively, of such obligation. No Bondholder shall have any right to monetary damages or any other remedy for any breach or violation by the State or the Finance Authority of any obligation of the State or the Finance Authority under this Agreement, except the remedy of specific performance by the State or the Finance Authority, respectively, of such obligation. (b) No breach or violation by the State or the Finance Authority of any obligation of the State or the Finance Authority under this Agreement shall constitute a breach or violation of or default under the Bonds or the Indenture. (c) Any action, suit or other proceeding for any breach or violation by the State or the Finance Authority of any obligation of the State or the Finance Authority under this Agreement shall be instituted, prosecuted and maintained only in a court of competent jurisdiction in Marion County, Indiana. (d) No action, suit or other proceeding for any breach or violation by the State or the Finance Authority of any obligation of the State or the Finance Authority under this Agreement shall be instituted, prosecuted or maintained by any Bondholder, unless, prior to instituting such action, suit or other proceeding: (i) such Bondholder has given the State and the Finance Authority notice of such breach or violation and demand for performance; and (ii) the State or the Finance Authority, as applicable, has failed to cure such breach or violation within 60 days after such notice. Section 8. Waiver. Any failure by any Bondholder to institute any suit, action or other proceeding for any breach or violation by the State or the Finance Authority of any obligation of the State or the Finance Authority under this Agreement, within 360 days after the date such Bondholder first has knowledge of such breach or violation, shall constitute a waiver by such Bondholder of such breach or violation, and, after such waiver, no remedy shall be available to such Bondholder for such breach or violation. Section 9. Annual Appropriations. This Agreement and the obligations of the State or the Finance Authority hereunder are subject to appropriation by the General Assembly of the State or the members of the Finance Authority, respectively. Section 10. Immunity of Officers, Directors, Members, Employees and Agents. No recourse shall be had for any claim based upon any obligation in this Agreement against any past, present or future official, officer, director, member, employee or agent of the State or the Finance Authority, as such, either directly or through the State or the Finance Authority, under any rule of law or equity, statute or constitution. Section 11. Amendment of Obligations. (a) The State and the Finance Authority may, from time to time, amend any obligation of the State or the Finance Authority under this Agreement, without notice to or consent from any Bondholder, if: (a)(i) such amendment is made in connection with a change in circumstances that arises from a change in legal requirements, change in law or change in the identity, nature or status of the State or the Finance Authority, or type of business conducted by the State or the Finance Authority, (ii) this Agreement, after giving effect to such amendment, would have complied with the requirements of the Rule on the date hereof, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, and (iii) such amendment does not materially impair the interests of any Bondholders, as determined either by: (A) any person selected by the State or the Finance Authority that is unaffiliated with the State or the Finance Authority (such as the Trustee); or (B) an approving vote of the Bondholders pursuant to the terms of the Indenture at the time of such amendment; or (b) such amendment is otherwise permitted by the Rule. (b) In the event of any amendment to, or waiver of a provision of, this Agreement, the State shall describe such amendment or waiver in its next Annual Financial Information and shall include an explanation of the D-1-5 reason for such amendment or waiver. In particular, if the amendment results in a change to the annual financial information required to be included in the Annual Financial Information, the first Annual Financial Information that contains the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of such change in the type of operating data or financial information being provided. Further, if the annual financial information required to be provided in the Annual Financial Information can no longer be generated because the operations to which it related have been materially changed or discontinued, a statement to that effect shall be included in the first Annual Financial Information that does not include such information. Section 12. Assignment and Delegation. No Bondholder may, without the prior written consent of the State and the Finance Authority, assign any of its rights under this Agreement to any other person. Neither the State nor the Finance Authority may assign any of its rights or delegate any of its obligations under this Agreement to any other person, except that the State or the Finance Authority may, at its sole discretion, employ an agent in connection with the dissemination of any information required to be provided by the State or the Finance Authority, respectively, under this Agreement or the Rule. Section 13. Communications. Any information, datum, statement, notice, certificate or other communication required or permitted to be provided, delivered or otherwise given hereunder by any person to any other person shall be in writing and, if such other person is the State or the Finance Authority, shall be provided, delivered or otherwise given to the State and the Finance Authority at the following address: State of Indiana Public Finance Office, One North Capitol Avenue, Suite 900, Indianapolis, IN 46204, (or at such other address as the State or the Finance Authority may, by notice to the Repository, provide), or, if such other person is not the State or the Finance Authority, shall be provided, delivered or otherwise given to such other person at any address that the person providing, delivering or otherwise giving such information, datum, statement, notice, certificate or other communication believes, in good faith, but without any investigation, to be an address for receipt by such other person of such information, datum, statement, notice, certificate or other communication. For purposes of this Agreement, any such information, datum, statement, notice, certificate or other communication shall be deemed to be provided, delivered or otherwise given on the date that such information, datum, notice, certificate or other communication is (a) delivered by hand to such other person, (b) deposited with the United States Postal Service for mailing by registered or certified mail, (c) deposited with Federal Express or any other courier service for delivery on the following business day or (d) sent by facsimile transmission, telecopy or telegram. Section 14. Knowledge. For purposes of this Agreement, each Bondholder shall be deemed to have knowledge of the provision and content of any information, datum, statement or notice provided by the State or the Finance Authority to the Repository on the date such information, datum, statement or notice is so provided, regardless of whether such Bondholder was a registered or beneficial owner or holder of any Bond at the time such information, datum, statement or notice was so provided. Section 15. Performance Due on other than Business Days. If the last day for taking any action under this Agreement is a day other than a business day, such action may be taken on the next succeeding business day and, if so taken, shall have the same effect as if taken on the day required by this Agreement. Section 16. Governing Law. This Agreement and the rights and obligations hereunder shall be governed by and construed and enforced in accordance with the internal laws of the State of Indiana, without reference to any choice of law principles. Section 17. Severability. If any portion of this Agreement is held or deemed to be, or is, invalid, illegal, inoperable or unenforceable, the validity, legality, operability and enforceability of the remaining portions of this Agreement shall not be affected, and this Agreement shall be construed as if it did not contain such invalid, illegal, inoperable or unenforceable portion. Section 18. Rule. This Agreement is intended to be an agreement or contract in which the State and the Finance Authority have undertaken to provide that which is required by subsection (b)(5) of the Rule as in effect on the date hereof. If and to the extent this Agreement is not such an agreement or contract, this Agreement shall be deemed to include such terms not otherwise included herein and to exclude such terms not otherwise excluded herefrom, as are necessary to cause this Agreement to be such an agreement or contract. D-1-6 Section 19. Interpretation. The use herein of the singular shall be construed to include the plural, and vice versa, and the use herein of the neuter shall be construed to include the masculine and feminine. Unless otherwise indicated, the words “hereof,” “herein,” “hereby” and “hereunder,” or words of similar import, refer to this Agreement as a whole and not to any particular section, subsection, clause or other portion of this Agreement. Section 20. Captions. The captions appearing in this Agreement are included herein for convenience of reference only and shall not be deemed to define, limit or extend the scope or intent of any rights or obligations under this Agreement. Section 21. Counterparts. This Agreement may be executed and delivered in any number of counterparts, each of which shall be deemed to be an original, but such counterparts together shall constitute one and the same instrument. (Remainder of Page Intentionally Left Blank) D-1-7 IN WITNESS WHEREOF, the State and the Finance Authority have caused this Continuing Disclosure Agreement to be executed on the date first above written. OFFICE OF MANAGEMENT AND BUDGET OF THE STATE OF INDIANA, on behalf of the State By: Christopher D. Atkins, Director INDIANA FINANCE AUTHORITY By: Christopher D. Atkins, Chairman Attest: Dennis L. Bassett, Public Finance Director of the State of Indiana CONTINUING DISCLOSURE AGREEMENT LEASE APPROPRIATION REFUNDING BONDS (CONVENTION CENTER EXPANSION PROJECT), SERIES 2015 A D-1-8 APPENDIX D - 2 FORM OF BOARD CONTINUING DISCLOSURE AGREEMENT As of May 1, 2015, this Continuing Disclosure Agreement (the "Disclosure Agreement") is made by the Capital Improvement Board of Managers of Marion County (the "Board") in connection with the issuance of the Indiana Finance Authority’s Lease Appropriation Refunding Bonds (Convention Center Expansion Project), Series 2015 A (the “Bonds”). The Board has been advised by the Indiana Finance Authority (the "Authority") that the Bonds are being issued pursuant to an Amended and Restated Trust Indenture, dated as of May 1, 2015 (the “Indenture”) between the Finance Authority and The Bank of New York Mellon Trust Company, N.A., as trustee. The Board agrees as follows: Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Board solely for the benefit of the registered and beneficial owners of the Bonds and in order to assist the Participating Underwriters (as defined herein) in complying with Rule 15c2-12(b)(5), promulgated by the Securities and Exchange Commission. This Disclosure Agreement creates no contractual or other rights for the Securities and Exchange Commission, underwriters, brokers, dealers, municipal securities dealers, potential customers, or any other party (except the registered or beneficial owners of the Bonds). Section 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" means any Annual Report to be provided by the Board pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "Disclosure Representative" means the Treasurer of the Board or his or her designee, or such other officer or employee as the Board shall designate from time to time. "Dissemination Agent" means the Board (initially), and thereafter any successor Dissemination Agent designated in writing by the Board and which has filed with the Board a written acceptance of such designation. “MSRB” shall mean the Municipal Securities Rulemaking Board. “MSRB Procedures” shall mean procedures and practices instituted from time to time by the MSRB for making filings of the nature required by this Disclosure Agreement and the Rule (as are currently described at http://emma.msrb.org/), which shall be in an electronic format and accompanied by identifying information as and if prescribed by the MSRB. "Official Statement" means the Official Statement of the Authority, dated May 7, 2015, with respect to the Bonds. "Participating Underwriter" means any of the original underwriters of the Bonds. "Rule" means Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State" means the State of Indiana. Section 3. Provision of Annual Reports. (a) The Board shall, or shall cause the Dissemination Agent to, transmit to MSRB consistent with MSRB Procedures, within 210 days of the end of each fiscal year of each of the Board (commencing in 2015 for the Board's fiscal year ended December 31, 2014), an Annual Report which is consistent with the requirements D-2-1 of Section 4 of this Disclosure Agreement. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the Board referred to in Section 4(a) hereof may be submitted separately from the balance of the Annual Report. (b) If the Board fails to provide, or determines in advance that it will be unable to provide, the Annual Report to the MSRB by the date required in subsection (a), the Board, on or before such date, shall send a notice thereof to MSRB consistent with MSRB Procedures. (c) If the Dissemination Agent is anyone other than the Board, such Dissemination Agent shall file a report with the Board certifying that the Annual Report has been transmitted to MSRB consistent with MSRB Procedures. Section 4. Content of Annual Reports. The Board's Annual Report shall contain or incorporate by reference the following information: (a) Annual audited financial statements, if available, of the Board of the type previously provided by the Board under the Rule or in such other form or format as the Board determines is in compliance with the Rule. The financial statements of the Board described in clauses (a) and (b) of this Section 4 shall be prepared in conformance with generally accepted accounting principles, as in effect from time to time. (b) If audited financial statements are not available to be provided with the remainder of the Annual Report in the timeframe required under Section 3(a), the Board shall provide to the MSRB, within such timeframe, unaudited financial statements of the Board of the type described in Subsection (a) above, and when available, the audited financial statements and shall also provide, within such timeframe, updated historical information and data of the type provided in each of the five (5) financial tables in “Appendix B – Summary of Local revenues” to the Official Statement under the second table column of each table with the headings “Amount of Original Marion County Innkeeper’s Tax Revenue,” “Amount of Original Marion County Food and Beverage Tax Revenue,” “Amount of Original Marion County Admissions Tax Revenue,” “Amount of Original Marion County Supplemental Auto Rental Excise Tax Revenue” and “Amount of original revenues from PSDA,” respectively. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the Board, or related public entities, which have been submitted to the MSRB or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must also be available from the MSRB. The Board shall clearly identify each such other document so incorporated by reference. (c) If the occurrence of a Listed Event is material, the Board shall, in a timely manner, file a notice of such occurrence with the MSRB consistent with MSRB Procedures. Section 5. Termination of Reporting Obligation. The Board's obligations under this Disclosure Agreement shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds in accordance with the terms of the Indenture. Section 6. Dissemination Agent. The Board may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Board shall notify the MSRB of the appointment or discharge of a Dissemination Agent. If at any time there is not any other designated Dissemination Agent, the Board shall be the Dissemination Agent. Section 7. Amendment. Notwithstanding any other provision of this Disclosure Agreement, the Board may amend or modify this Disclosure Agreement if such amendment meets the following: D-2-2 (a) The amendment may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of any obligated person (as defined in the Rule), or type of business conducted; (b) The agreement, as amended, would have complied with the requirements of the Rule at the time of the primary offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment does not materially impair the interests of Bondholders, as determined either by parties unaffiliated with the Board (such as the Trustee or bond counsel), or by an approving vote of the Bondholders pursuant to the terms of the governing instrument at the time of the amendment. The first Annual Report following such amendment will explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided. Section 8. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Board from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Board chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Board shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 9. Default and Sole Remedy. (a) In the event of a failure of the Board to provide Annual Reports, to send the notice required by Section 3(b) hereof, any registered or beneficial owner may individually seek, as the sole remedy under this Disclosure Agreement, to compel performance by court order, to cause the Board to comply with its obligations to provide the Annual Reports required, to send the notice required by Section 3(b) hereof under this Disclosure Agreement, and not for money damages of any kind or in any amount. However, regarding the adequacy of any information disclosed by Board, the registered or beneficial holders of 25% of more in aggregate principal amount of all Bonds then Outstanding shall be required to jointly take actions to seek, as the sole remedy under this Disclosure Agreement, to compel specific performance by court order to challenge the adequacy of any information reported by the Board hereunder and not for money damages of any kind or in any amount. A default under this Disclosure Agreement shall not be deemed an Event of Default under any agreement relating to the Bonds to which the Board is a party, and the sole remedy under this Disclosure Agreement in the event of any failure of the Board to comply with this Disclosure Agreement shall be an action to compel performance. (b) Subject to paragraph (c) of this Section 10, the remedies set forth in the preceding paragraph may be exercised by the registered or beneficial owner or owners of Bonds, as applicable, in any court of competent jurisdiction in Marion County, Indiana. An affidavit to the effect that a person is a holder of Bonds supported by reasonable documentation of such claim shall be sufficient to evidence standing to pursue the remedies provided in this Section 10. (c) Prior to pursuing any remedy for any breach of any obligation under this Disclosure Agreement, the registered or beneficial owner or owners of Bonds, as applicable, shall give notice to the Board, by registered or certified mail, of such breach and its or their intent to pursue such remedy. Forty-five (45) days after the mailing of such notice, and not before, such remedy may be pursued under this Disclosure Agreement if and to the extent the Board has failed to cure such breach within such forty-five (45) days. Section 10. Obligations of Dissemination Agent; Indemnity. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement and any dissemination agreement entered into by the Board and the Dissemination Agent, and the Board agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise of performance of its powers and duties hereunder, including the costs and D-2-3 expenses (including reasonable attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's gross negligence or willful misconduct. The obligations of the Board under this Section shall survive removal of the Dissemination Agent and payment of the Bonds. Section 11. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Board, the Dissemination Agent and registered or beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity. Section 12. Interpretation Under Indiana Law. This Disclosure Agreement and the rights and obligations of the Board and other parties affected hereunder shall be governed by and construed and enforced in accordance with, the law of the State of Indiana. Section 13. Severability. In case any provision in this Disclosure Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 14. Successors and Assigns. All covenants and agreements in this Disclosure Agreement made by the Board shall bind its successors, whether so expressed or not. No Bondholder may, without the prior written consent of the Board, assign any of its rights under this Disclosure Agreement to any other person. The Board may not assign any of its rights or delegate any of its obligations under this Disclosure Agreement to any other person (other than to any Dissemination Agent appointed hereunder to assist Board), except that the Board may assign any of its rights or delegate any of such obligations to any entity (a) into which the Board merges, with which the Board consolidates or to which the Board transfers all or substantially all of its assets or (b) which is an "issuer of municipal securities" with respect to the Bonds or an "obligated person" with respect to the Bonds for whom financial or operating data is presented in the Official Statement, as those terms are defined in the Rule. Section 15. Waiver. Any failure by any Bondholder to institute any suit, action or other proceeding for any breach or violation by the Board of any obligation of the Board under this Disclosure Agreement, within three hundred sixty (360) days after the date of such Bondholder first has knowledge of such breach or violation, shall constitute a waiver by such Bondholder of such breach or violation and, after such waiver, no remedy shall be available to such Bondholder for such breach or violation. Section 16. Immunity of Officers, Directors, Members, Employees and Agents. No recourse shall be had for any claim based upon any obligation in this Disclosure Agreement against any past, present or future officer, director, member, employee or agent of the Board or the Authority, as such, either directly or through the Board, under any rule of law or equity, statute or constitution. Section 17. Communications. Any information, datum, statement, notice, certificate or other communication required or permitted to be provided, delivered or otherwise given hereunder by any person to any other person shall be in writing and, if such other person is the Board, shall be provided, delivered or otherwise given to the Board at the following address: Capital Improvement Board of Managers of Marion County Indiana Convention Center/Lucas Oil Stadium 100 South Capitol Avenue Indianapolis, Indiana 46225 Attention: Chief Financial Officer Facsimile Number: (317) 262-3685 (or at such other address as the Board may, by notice to the MSRB, provide), or, if such other person is not the Board, shall be provided, delivered or otherwise given to such other person at any address that the person providing, delivering or otherwise giving such information, datum, statement, notice, certificate or other communication believes, in good faith but without any investigation, to be an address for receipt by such other person of such information, datum, statement, notice, certificate or other communication. For purposes of this Disclosure Agreement, any such information, datum, statement, notice, certificate or other communication shall be deemed to D-2-4 be provided, delivered or otherwise given on the date that such information, datum, statement, notice, certificate or other communication is (a) delivered by hand to such other person, (b) deposited with the United States Postal Service for mailing by registered or certified mail, (c) deposited with Express Mail, Federal Express or any other courier service for delivery on the following business day, or (d) sent by facsimile transmission, telecopy or telegram. Section 18. Knowledge. For purposes of this Disclosure Agreement, each Bondholder shall be deemed to have knowledge of the provision and content of any information, datum, statement or notice provided by the Board to the MSRB on the date such information, datum, statement or notice is so provided, regardless of whether such Bondholder was a registered or beneficial owner or holder of any Bond at the time such information, datum, statement or notice was so provided. Section 19. Rule. This Disclosure Agreement is intended to be an agreement or contract in which the Board has undertaken to provide that which is required by paragraph (b)(5) of the Rule. If and to the extent this Disclosure Agreement is not such an agreement or contract, this Disclosure Agreement shall be deemed to include such terms not otherwise included herein, and to exclude such terms not otherwise excluded herefrom, as are necessary to cause this Disclosure Agreement to be such an agreement or contract. Section 20. Waiver of Acceptance. Disclosure Agreement is hereby waived. Notice of acceptance of or other assent to this Continuing (Remainder of page intentionally left blank) D-2-5 IN WITNESS WHEREOF, the Board has executed this Disclosure Agreement dated as of the date first above written. CAPITAL IMPROVEMENT BOARD OF MANAGERS OF MARION COUNTY By: _________________________________ Augustus Levengood, Executive Director D-2-6 APPENDIX E BOOK-ENTRY ONLY SYSTEM The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Series 2015 A Bonds (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each maturity of the Securities, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York 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. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poor’s rating: AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) 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. Beneficial Owners are, however, 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 Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect 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 or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the E-1 alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Securities within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Finance Authority 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 Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal, premium and interest payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts, upon DTC’s receipt of funds and corresponding detail information from the Finance Authority or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee or the Finance Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Finance Authority or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Finance Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. The Finance Authority may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Finance Authority believes to be reliable, but the Finance Authority takes no responsibility for the accuracy thereof. Notwithstanding any provision of the Indenture, so long as any Series 2015 A Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal and interest and all notices with respect to the Series 2015 A Bonds shall be made or given in accordance with DTC’s rules and procedures. Revision of Book-Entry-Only System In the event that the book-entry system for the Series 2015 A Bonds is discontinued, the Finance Authority and the Trustee would provide for the registration of the Series 2015 A Bonds in the name of the Beneficial Owners thereof. The Finance Authority and the Trustee would treat the person in whose name any Series 2015 A Bond is registered as the absolute owner of such Series 2015 A Bond for the purposes of making and receiving payment of the principal thereof and interest thereon, and for all other purposes, except as otherwise described under the caption, “CONTINUING DISCLOSURE,” and neither the Finance Authority nor the Trustee would be bound by any notice or knowledge to the contrary. Each Series 2015 A Bond would be transferable or exchangeable only upon the presentation and surrender thereof at the corporate trust office of the Trustee, duly endorsed for transfer or exchange, or accompanied by a written assignment duly executed by the owner or its authorized representative in form satisfactory to the Trustee. Upon due presentation of any Series 2015 A Bonds for transfer or exchange, the Trustee would authenticate and E-2 deliver in exchange therefor, within a reasonable time after such presentation, a new Series 2015 A Bond or Series 2015 A Bonds, registered in the name of the transferee or transferees (in the case of a transfer), or the owner (in the case of an exchange), in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Series 2015 A Bond or Series 2015 A Bonds so presented. The Finance Authority or the Trustee would require the owner of any Series 2015 A Bond to pay a sum sufficient to cover any tax, fee or other governmental charge required to be paid in connection with the transfer or exchange of such Series 2015 A Bond. The Trustee would not be required to transfer or exchange any Series 2015 A Bonds: (i) during the 15 days prior to the mailing of any notice of redemption; or (ii) selected, called or being called for redemption, in whole or in part, after the mailing of the notice of such call has been made. E-3 PAGE INTENTIONALLY LEFT APPENDIX F DEBT SERVICE RELATED TO CERTAIN BOARD OBLIGATIONS Senior MCCRFA Bonds, Subordinate MCCRFA Bonds, 1999A Subordinate CIB Bonds and Board’s 2007 Contractual Undertaking Subordinate Bonds Debt Service Contingent Payment 1999A 2011A 2012A 2011A 2011B 1995A Bond Subordinate Subordinate Senior Senior Senior Senior Year CIB (FYE MCCRFA MCCRFA MCCRFA MCCRFA Total Senior MCCRFA Bonds1 Bonds Bonds Debt Service Bonds Bonds June 1) Bonds 2015 $ 03 $1,000,500 $4,829,550 $6,124,771 $11,954,821 $14,875,650 $2,588,000 2016 1,000,500 4,827,700 6,247,258 12,075,458 15,861,050 2,586,750 2017 1,000,500 4,826,400 6,251,326 12,078,226 15,866,250 2,586,000 2018 1,000,500 4,825,400 6,244,666 12,070,566 15,866,000 2,590,500 2019 1,000,500 4,827,400 6,250,352 12,078,252 15,861,500 2,589,750 2020 1,000,500 4,829,000 6,248,555 12,078,055 15,862,000 2,588,750 2021 1,000,500 4,830,000 6,245,194 12,075,694 15,871,250 2,987,250 2022 3,940,500 3,940,500 23,872,750 2023 3,943,500 3,943,500 23,870,750 2024 3,944,000 3,944,000 23,878,250 2025 3,941,750 3,941,750 23,876,000 2026 3,941,500 3,941,500 23,874,750 2027 3,942,750 3,942,750 23,877,000 2028 2029 2030 2031 2032 2033 2034 2035 1 Total Senior & Total Bond Year Call Rights Subordinate Subordinate Board's 2007 Total Debt Contractual2 Service with (FYE Debt Debt Waiver1 Undertaking Contingency June 1) Service Service Credit $(2,800) $17,460,850 $29,415,671 $5,310,727 $34,726,398 2015 (3,350) 18,444,450 30,519,908 5,312,824 35,832,732 2016 18,452,250 30,530,476 5,415,495 35,945,971 2017 18,456,500 30,527,066 5,422,540 35,949,606 2018 18,451,250 30,529,502 5,533,978 36,063,480 2019 18,450,750 30,528,805 5,523,314 36,052,119 2020 18,858,500 30,934,194 5,642,042 36,576,236 2021 23,872,750 27,813,250 5,647,194 33,460,444 2022 23,870,750 27,814,250 5,769,672 33,583,922 2023 23,878,250 27,822,250 5,767,097 33,589,347 2024 23,876,000 27,817,750 5,885,962 33,703,712 2025 23,874,750 27,816,250 5,888,595 33,704,845 2026 23,877,000 27,819,750 6,005,897 33,825,647 2027 6,020,490 6,020,490 2028 6,127,392 6,127,392 2029 6,140,404 6,140,404 2030 6,253,954 6,253,954 2031 6,261,253 6,261,253 2032 6,377,318 6,377,318 2033 6,389,772 6,389,772 2034 6,408,3364 6,408,336 2035 A credit has been given by the holder of the 1999A Subordinate CIB Bonds against their debt service, which credit is reflected above under the column heading “Call Rights Waiver Credit.” Such credit reduces the debt service due on the 1999A Subordinate CIB Bonds for the years and in the amounts as shown. 2 Represents payments related to the Board’s 2007 Contractual Undertaking (which is a Subordinate Obligation), although such payments are contingent in nature and the Board has never had to make a payment pursuant to the Board’s 2007 Contractual Undertaking. 3 This amount reflects actual debt service of $989,460 less the debt service reserve fund of $991,800 for a net amount of $0. 4 This amount reflects actual debt service of $9,568,336 less the debt service reserve fund of $3,160,000 for a net amount of $6,408,336. F-1 PAGE INTENTIONALLY LEFT APPENDIX G FORM OF OPINION OF BOND COUNSEL ______________, 2015 Indiana Finance Authority Indianapolis, Indiana Re: Indiana Finance Authority Lease Appropriation Refunding Bonds (Convention Center Expansion Project), Series 2015 A Ladies and Gentlemen: We have acted as bond counsel to the Indiana Finance Authority (the “Issuer”) in connection with the issuance by the Issuer of its (i) Lease Appropriation Refunding Bonds (Convention Center Expansion Project), Series 2015 A, dated May 21, 2015, in the aggregate principal amount of $44,710,000 (the “Series 2015 A Bonds”), pursuant to Indiana Code 4-4-10.9, as amended, Indiana Code 4-4-11, as amended, Indiana Code 5-1-5, as amended, and the Amended and Restated Trust Indenture, dated as of May 1, 2015 (the “Amended and Restated Trust Indenture”), amending and restating the Amended and Restated Trust Indenture, dated as of September 1, 2013 (Convention Center Expansion Project) (the “Prior Indenture”) (the Amended and Restated Indenture and the Prior Indenture collectively referred to as the “Indenture”), between The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), and the Issuer. The Series 2015 A Bonds are being issued contemporaneously with the Issuer’s Lease Appropriation Refunding Bonds (Stadium Project), Series 2015 A (the “Series 2015 A Stadium Bonds”), and pursuant to Treas. Reg. 1.150-1(c), the Series 2015 A Bonds and the Series 2015 A Stadium Bonds will be treated as one issue of bonds. In such capacity, we have examined such law and such certified proceedings, certifications and other documents as we have deemed necessary to render this opinion. Regarding questions of fact material to our opinion, we have relied on representations of the Issuer contained in the Indenture, the certified proceedings and other certifications of public officials furnished to us, and certifications, representations and other information furnished to us by or on behalf of the Issuer, the Indiana Stadium and Convention Building Authority (the “Building Authority”) and others, including, without limitation, certifications contained in the tax and arbitrage certificate of the Issuer, dated the date hereof, without undertaking to verify the same by independent investigation. We have relied upon the opinion of Ice Miller LLP, Indianapolis, Indiana, counsel to the Building Authority, dated the date hereof, as to the matters stated therein. We have relied upon the report of Crowe Horwath LLP, Indianapolis, Indiana, independent certified public accountants, dated the date hereof, as to the matters stated therein. Based upon the foregoing, we are of the opinion that, under existing law: 1. The Issuer is a body politic and corporate, not a state agency, but an independent instrumentality of the State of Indiana (the “State”) exercising essential public functions, validly existing under the laws of the State, with the corporate power to enter into the Indenture and perform its obligations thereunder and to issue the Series 2015 A Bonds. G-1 2. The Series 2015 A Bonds have been duly authorized, executed and delivered by the Issuer and are valid and binding limited obligations of the Issuer, enforceable in accordance with their terms. The Series 2015 A Bonds are payable solely from the Trust Estate (as defined in the Indenture) and on a parity with the Issuer’s (i) Lease Appropriation Bonds (Convention Center Expansion Project), Series 2008 A-2, (ii) Lease Appropriation Bonds (Convention Center Expansion Project), Series 2009 A, (iii) Lease Appropriation Bonds (Convention Center Expansion Project), Series 2009 B (Build America Bonds – Direct Payment –Federally Taxable), and (iv) any other bonds of equal standing, which are hereafter issued within the restrictions of the Indenture. 3. The Indenture has been duly authorized, executed and delivered by the Issuer, and is a valid and binding obligation of the Issuer, enforceable against the Issuer in accordance with its terms. 4. Under Section 103 of the Internal Revenue Code of 1986, as amended and in effect on this date (the “Code”), the interest on the Series 2015 A Bonds is excludable from gross income for federal income tax purposes. The opinion set forth in the preceding sentence is subject to the condition that each of the Issuer and the Building Authority comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2015 A Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal income tax purposes. Each of the Issuer and the Building Authority has covenanted or represented that it will comply with such requirements. Failure to comply with certain of such requirements may cause the interest on the Series 2015 A Bonds to become included in gross income for federal income tax purposes retroactively to the date of issuance of the Series 2015 A Bonds. 5. Interest on the Series 2015 A Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. 6. Interest on the Series 2015 A Bonds is exempt from income taxation in the State for all purposes, except the State financial institutions tax. We express no opinion herein as to the accuracy, completeness or sufficiency of the Official Statement, dated May 7, 2015, or any other offering material relating to the Series 2015 A Bonds. We express no opinion regarding any tax consequences arising with respect to the Series 2015 A Bonds, other than as expressly set forth herein. With respect to the enforceability of any document or instrument, this opinion is subject to the qualifications that: (i) the enforceability of such document or instrument may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent conveyance and similar laws relating to or affecting the enforcement of creditors’ rights; (ii) the enforceability of equitable rights and remedies provided for in such document or instrument is subject to judicial discretion, and the enforceability of such document or instrument may be limited by general principles of equity; (iii) the enforceability of such document or instrument may be limited by public policy; and (iv) certain remedial, waiver and other provisions of such document or instrument may be unenforceable, provided, however, that, in our opinion, the unenforceability of those provisions would not, subject to the other qualifications set forth herein, affect the validity of such document or instrument or prevent the practical realization of the benefits thereof. This opinion is given only as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Very truly yours, G-2 INDIANA FINANCE AUTHORITY • Lease Appropriation Refunding Bonds (Convention Center Expansion Project), Series 2015 A