J.J.B. Hilliard, W.L. Lyons, LLC

Transcription

1 PRELIMINARY OFFICIAL STATEMENT DATED MAY 13, 2011 This Preliminary Official Statement and information contained herein are subject to completion or amendment without notice. These 2011 Bonds may not be sold nor may an offer to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction to which such offer, solicitation or sale would be unlawful prior to registration or qualification under the 2011 Bonds laws of any such jurisdiction. NEW ISSUE Book Entry Only PROGRAMMATIC RATING: S&P A UNDERLYING ATING: S&P A- See Ratings herein In the opinion of Barnes & Thornburg LLP, Indianapolis, Indiana, under existing laws, interest on the 2011 Bonds (as hereinafter defined) is excludable from gross income for federal tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended, and in effect on the date of issuance of the 2011 Bonds (the Code ). Such opinion is based on certain certifications, covenants and representations of the Building Corporation and the School Corporation (each hereinafter defined) and is conditioned on continuing compliance therewith. In the opinion of Barnes & Thornburg LLP, Indianapolis, Indiana, under existing laws, interest on the 2011 Bonds is exempt from income taxation in the State of Indiana, except for the State financial institutions tax. (See TAX MATTERS herein) $3,195,000* MUNSTER SCHOOL BUILDING CORPORATION FIRST MORTGAGE BONDS, SERIES 2011A (School Town of Munster, Lake County, Indiana) $1,995,000* MUNSTER SCHOOL BUILDING CORPORATION FIRST MORTGAGE BONDS, SERIES 2011B (School Town of Munster, Lake County, Indiana) Dated: Date of Delivery Due: as shown on the inside front cover The First Mortgage Bonds, Series 2011A (the 2011A Bonds ) and the First Mortgage Bonds, Series 2011B (the 2011B Bonds ) (the 2011A Bonds and 2011B Bonds collectively, the 2011 Bonds ) to be issued by the Munster School Building Corporation (the Building Corporation ) pursuant to Indiana Code and , each as amended (collectively, the Act ) and in accordance with a Trust Indenture between the Building Corporation and Peoples Bank, SB (as successor to Harris, N.A. by assignment, which is successor to First Midwest Bank, which is successor to Bank Calumet, National Association, which succeeded Calumet National Bank) as trustee, registrar and paying agent (the Trustee ), dated as of March 15, 1996 (the Original Indenture ), as supplemented by a First Supplemental Trust Indenture, dated as of September 15, 1998 (the First Supplemental Indenture ), and as further supplemented by a Second Supplemental Trust Indenture, dated as of April 1, 2008 (the Second Supplemental Indenture ), a Third Supplemental Indenture dated as of November 1, 2008 (the Third Supplemental Indenture ), a Fourth Supplemental Trust Indenture dated as of June 1, 2009 (the Fourth Supplemental Indenture ) and a Fifth Supplemental Trust Indenture dated as of May 1, 2011 (the Fifth Supplemental Indenture ) (the Original Indenture as supplemented by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, and the Fifth Supplemental Indenture, the Indenture ), will bear interest from the date of delivery and will mature on the dates and in the principal amounts set forth on the inside front cover of this Official Statement. Principal of and premium, if any, on the 2011 Bonds is payable at the principal corporate trust office of the Trustee. The 2011 Bonds will be issued in fully registered form, and when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York ( DTC ). Purchasers of beneficial interest in the 2011 Bonds will be made in book-entry-only form, in the denomination of $5,000 or any integral multiple thereof. Purchasers of beneficial interest in the 2011 Bonds (the Beneficial Owners ) will not receive physical delivery of certificates representing their interest in the 2011 Bonds. So long as DTC or its nominee is the registered owner of the 2011 Bonds, principal of and interest on the 2011 Bonds will be paid directly to DTC by the Trustee. The final disbursements of such payments to the Beneficial Owners of the 2011 Bonds will be the responsibility of the DTC Participants, all as defined and more fully described herein. (See DESCRIPTION OF THE 2011 BONDS herein.) Proceeds from the 2011A Bonds will be used for the purpose of providing funds for (i) the demolition of the existing pool facility at the existing Munster High School and the conversion of such area which upon completion will provide approximately 24,000 of additional square feet, will contain approximately twelve (12) classrooms, two (2) restrooms and related storage and custodial areas, and will increase the programmatic total student capacity at the existing Munster High School by approximately three hundred fifty (350) students and (ii) paying the costs incidental to the issuance of the 2011A Bonds (collectively, the 2011A Project ). Proceeds from the 2011B Bonds will be used to provide funds to (i) reimburse the School Town of Munster, Lake County, Indiana (the School Corporation ) for improvements made by the School Corporation in 2009 and 2010 at the Mortgaged Property (as hereinafter defined) with the understanding that the School Corporation will use such money to pay for all or a portion of the costs of certain renovations of the existing Wilbur Wright Middle School, including, but not limited to, the existing pool and related areas, all or a portion of the roof, other miscellaneous improvements and equipping projects throughout the facility and projects related thereto and (ii) pay the costs incidental to the issuance of the 2011B Bonds (collectively the 2011B Project ). The 2011A Project and the 2011B Project, collectively, the 2011 Projects. The 2011 Bonds and all bonds before or hereafter issued under the Indenture on a parity with the 2011 Bonds (collectively, the Bonds ), are obligations of the Building Corporation payable solely from and secured exclusively by the trust estate established pursuant to the Indenture, which includes the rent received by the Building Corporation under a lease, dated as of September 20, 1995 (the Original Lease ), by and between the Building Corporation, as lessor, and the School Town of Munster, Lake County, Indiana (the School Corporation ), as lessee, as amended from time to time the date thereof, including as amended by a First Amendment to Lease, dated as of March 15, 1996, a Second Amendment to Lease, dated as of September 15, 1998, a Third Amendment to the lease, dated as of November 17, 2008, a Fourth Amendment to the Lease, dated as of March 12, 2009, and a Fifth Amendment to Lease, dated as of March 15, 2011 (collectively, the Lease ). The rent paid by the School Corporation under the Lease is payable from ad valorem taxes to be levied by the School Corporation; the levy of taxes by the School Corporation to pay the rent due and payable under the Lease is mandatory. (See SOURCE OF PAYMENT AND SECURITY FOR THE BONDS and THE BUILDING CORPORATION herein.) The 2011B Bonds are subject to optional redemption prior to maturity, and the 2011 Bonds may be subject to mandatory sinking fund redemption prior to maturity, all as described in this Official Statement. See DESCRIPTION OF THE 2011 BONDS. the Code. In connection with any acquisition of the 2011 Bonds by financial institutions, the 2011 Bonds will be designated as qualified tax-exempt obligations for purposes of Section 265(b)(3) of The 2011 Bonds are being offered when, as and if issued by the Building Corporation and received by the Underwriter subject to prior sale, to withdrawal or modification of offer without notice, and to the approval as to the legality by Barnes & Thornburg LLP, Indianapolis, Indiana, Bond Counsel. Certain legal matters will be passed upon by Spangler, Jennings & Dougherty, P.C., Merrillville, Indiana, as counsel for the Building Corporation and the School Corporation. It is expected that the 2011 Bonds will be available for delivery on or about, J.J.B. Hilliard, W.L. Lyons, LLC 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 to obtain information essential to the making of an informed investment decision *Preliminary; subject to change

2 $3,195,000* MUNSTER SCHOOL BUILDING CORPORATION FIRST MORTGAGE BONDS, SERIES 2011A The 2011A Bonds will mature on July 5 and January 5 in the years and amounts as follows: Date* Amount* Rate Yield CUS IP** 7/5/2012 $75,000 1/5/ ,000 7/5/ ,000 1/5/ ,000 7/5/ ,000 1/5/ ,000 7/5/ ,000 1/5/ ,000 7/5/ ,000 1/5/ ,000 7/5/ ,000 1/5/ ,000 7/5/ ,000 1/5/ ,000 7/5/ ,000 1/5/ ,000 7/5/ ,000 1/5/ ,000 $1,995,000* MUNSTER SCHOOL BUILDING CORPORATION FIRST MORTGAGE BONDS, SERIES 2011B The 2011B Bonds will mature on July 5 in the year and amount as follows: Date* Amount* Rate Yield CUS IP** 7/5/2021 $1,995,000 *Preliminary, subject to change **CUSIP numbers shown have been provided by an organization not affiliated with the Building Corporation. The Building Corporation is not responsible for the selection of CUSIP numbers, nor does it make any representations as to such number. ii

3 IN CONNECTION WITH THIS OFFERING THE UNDERWRITER MAY OVER ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 2011 BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET, AND SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. No dealer, broker, salesman or other person has been authorized by the Building Corporation or the School Corporation 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 the Building Corporation or the School Corporation. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities described herein 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 herein has been obtained by the School Corporation, the Building Corporation, and other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale of the securities described herein shall, under any circumstances, create any implication that there has been no change in the affairs of the Building Corporation or the School Corporation since the date of delivery of the securities described herein to the initial purchaser thereof. However, upon delivery of the securities, the Building Corporation and the School Corporation will provide a certificate stating that there have been no material changes in the information contained in the Final Official Statement since its delivery. THE 2011 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 BUILDING CORPORATION AND THE SCHOOL CORPORATION AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE 2011 BONDS 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 iii

4 SUMMARY STATEMENT THIS SUMMARY STATEMENT IS NOT INTENDED TO BE COMPLETE AND IS QUALIFIED BY THE ENTIRE OFFICIAL STATEMENT. BEFORE PURCHASING ANY 2011 BONDS, A PROSPECTIVE PURCHASER SHOULD REVIEW THIS OFFICIAL STATEMENT IN ITS ENTIRETY. Bonds Denomination Dated Date $3,195,000* First Mortgage Bonds, Series 2011A (collectively, the 2011A Bonds ) and $1,995,000* First Mortgage Bonds, Series 2011B (collectively, the 2011B Bonds ) (the 2011A Bonds and 2011B Bonds, collectively the 2011 Bonds ) $5,000 and integral multiples thereof Date of Delivery Interest Payments Interest on the 2011 Bonds is payable on January 5 and July 5 of each year commencing on July 5, Maturities Redemption Security for the Bonds Tax Exemption Bank Qualified Purpose The 2011 Bonds will mature on January 5 and July 5 on the dates and in the principal amounts shown on the inside front cover. The 2011 Bonds are subject to optional redemption and may be subject to mandatory sinking fund redemption prior to maturity as described in this Official Statement. See DESCRIPTION OF THE 2011 BONDS. The 2011 Bonds are obligations of the Munster School Building Corporation (the Building Corporation ) payable solely from and secured exclusively by the trust estate established pursuant to the Indenture, which includes the rent received by the Building Corporation under a lease dated as of September 20, 1995 (the Original Lease ), by and between the Building Corporation, as lessor, and the School Town of Munster, Lake County, Indiana (the School Corporation ), as lessee, as amended from time to time to the date thereof, including as amended by a First Amendment to Lease, dated as of March 15, 1996, a Second Amendment to Lease, dated as of September 15, 1998, a Third Amendment to the Lease, dated as of November 17, 2008, a Fourth Amendment to the Lease, dated as of March 12, 2009, and a Fifth Amendment to Lease, dated March 14, 2011 (collectively, the Lease ). The rent paid by the School Corporation under the Lease is payable from ad valorem taxes to be levied by the School Corporation; the levy of taxes by the School Corporation to pay the rent due and payable under the Lease is mandatory. See SOURCE OF PAYMENT AND SECURITY FOR THE BONDS In the opinion of Barnes & Thornburg LLP, Indianapolis, Indiana, under existing laws, interest on the 2011 Bonds is excludable from gross income for federal tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended, and in effect on the date of issuance of the 2011 Bonds (the Code ). Such opinion is based on certain certifications, covenants and representations of the Building Corporation and the School Corporation and is conditioned upon continuing compliance therewith. In the opinion of Barnes & Thornburg LLP, Indianapolis, Indiana, under existing laws, interest on the 2011 Bonds is exempt from income taxation in the State of Indiana, except for the State financial institutions tax. See TAX MATTERS and Appendix D herein. The 2011 Bonds have been designated by the Building Corporation as qualified tax-exempt obligations pursuant to Section 265(b)(3) of the Code. See TAX MATTERS. Proceeds from the 2011A Bonds will be used for the purpose of providing funds for (i) the demolition of the existing pool facility at the existing Munster High School and the conversion of such area which upon completion will provide approximately 24,000 of additional square feet, will contain approximately twelve (12) classrooms, two (2) restrooms and related storage and custodial areas, and will increase the programmatic total student capacity at the existing Munster High School by approximately three hundred fifty (350) students and (ii) paying the costs incidental to the issuance of the 2011A Bonds (collectively, the 2011A Project ). Proceeds from the 2011B Bonds will be used to provide funds to (i) reimburse the School Town of Munster, Lake County, Indiana (the School Corporation ) for improvements made by the School Corporation in 2009 and 2010 at the Mortgaged Property (as hereinafter defined) with the understanding that the School Corporation will use such money to pay for all or a portion of the costs of certain renovations of the existing Wilbur Wright Middle School, including, but not limited to, the existing pool and related areas, all or a portion of the roof, other miscellaneous improvements and equipping projects throughout the facility and projects related thereto and (ii) pay the costs incidental to the issuance of the 2011B Bonds (collectively, the 2011B Project ). The 2011A Project and the 2011B Project, collectively, the 2011 Projects. *Preliminary, subject to change iv

5 Table of Contents INTRODUCTION... 1 DESCRIPTION OF THE 2011 BONDS... 1 ADDITIONAL BONDS PURPOSE OF ISSUE....5 LEASED PREMISES... 5 SOURCES AND USES OF FUNDS... 6 SOURCE OF PAYMENT AND SECURITY FOR THE BONDS LEGISLATION AFFECTING OBLIGATIONS OF INDIANA SCHOOL CORPORATIONS GENERAL PROCEDURES FOR PROPERTY ASSESSMENT, TAX LEVY AND COLLECTION... 8 THE BUILDING CORPORATION RATINGS LEGAL MATTERS LITIGATION TAX MATTERS ORIGINAL ISSUE DISCOUNT AMORTIZABLE BOND PREMIUM CONTINUING DISCLOSURE UNDERWRITING STATEMENT OF THE BUILDING CORPORATION AND SCHOOL CORPORATION GENERAL INFORMATION ABOUT MUNSTER SCHOOL CORPORATION AND THE AREA... APPENDIX A SUMMARY OF CERTAIN PROVISION OF THE TRUST INDENTURE... APPENDIX B SUMMARY OF CERTAIN PROVISIONS OF THE LEASE... APPENDIX C FORMS OF OPINION OF BOND COUNSEL... APPENDIX D SCHEDULE OF DEBT SERVICE PAYMENTS... APPENDIX E v

6 SCHOOL TOWN OF MUNSTER Board of School Trustees Carrie G. Wadas, President Paula Nellans, Vice-President John E. Friend, Secretary Judith Florezak, Member Mary E. York, Member Superintendent William J. Pfister, Superintendent Munster School Building Corporation Mary Clark, President Fredric Young, Vice President Sarah B. Lasbury, Secretary Lorin M. Brown, Treasurer Dr. Mary Ann Collins, Member Bond Counsel Barnes & Thornburg LLP Indianapolis, Indiana School Town and Building Corporation Counsel Spangler, Jennings & Dougherty, P.C. Merrillville, Indiana Underwriter J.J.B. Hilliard, W.L. Lyons, LLC Indianapolis, Indiana Trustee Peoples Bank, SB (as successor to Harris, N.A. by assignment, which succeeded First Midwest Bank as successor to Bank Calumet, National Association, which succeeded Calumet National Bank) Hammond, Indiana vi

7 OFFICIAL STATEMENT $3,195,000* MUNSTER SCHOOL BUILDING CORPORATION First Mortgage Bonds, Series 2010A (School Town of Munster, Lake County, Indiana) $1,995,000* MUNSTER SCHOOL BUILDING CORPORATION First Mortgage Bonds, Series 2011B (School Town of Munster, Lake County, Indiana) INTRODUCTION The purpose of this Official Statement, including the cover page, Summary Statement and Appendices, is to provide information relating to the $3,195,000* First Mortgage Bonds, Series 2011A (collectively the 2011A Bonds ) and the $1,995,000* First Mortgage Bonds, Series 2011B (collectively, the 2011B Bonds ) (the 2011A Bonds and 2011B Bonds, collectively, the 2011 Bonds ) to be issued by the Munster School Building Corporation (the Building Corporation ). The Building Corporation was organized for the purpose of acquiring, owning and leasing facilities and equipment to the School Town of Munster, Lake County, Indiana (the School Corporation ). All financial and other information presented in this Official Statement has been provided by sources deemed reliable and is intended to show recent historic information and is not intended to indicate or project future or continuing trends in the financial position or other affairs of the Building Corporation or the School Corporation. No representation is made or implied hereby that any past experience, as might be shown by the financial and other information, will necessarily continue in the future. Reference to provisions of Indiana law or the Indiana Constitution are references to current provisions which may be amended, repealed or supplemented. General Description DESCRIPTION OF THE 2011 BONDS The 2011 Bonds will be issued under a Trust Indenture, between the Building Corporation and Peoples Bank, SB (as successor to Harris, N.A. by assignment, successor to First Midwest Bank successor to Bank Calumet, National Association, which succeeded Calumet National Bank) as trustee, registrar and paying agent (the Trustee ) dated as of March 15, 1996 (the Original Indenture ), as supplemented by a First Supplemental Indenture, dated as of September 15, 1998 (the First Supplemental Indenture ), as further supplemented by a Second Supplemental Trust Indenture, dated as of April 1, 2008 (the Second Supplemental Indenture ), a Third Supplemental Indenture dated as of November 1, 2008 (the Third Supplemental Indenture ), a Fourth Supplemental Trust Indenture dated as of June 1, 2009 (the Fourth Supplemental Indenture ) and a Fifth Supplemental Trust Indenture dated as of May 1, 2011 (the Fifth Supplemental Indenture ) (the Original Indenture as supplemented by the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, and the Fifth Supplemental Indenture, the Indenture ) and in accordance with Indiana Code and , each as amended (collectively, the Act ), as fully registered bonds in the denominations of $5,000 or any integral multiple thereof. See SOURCE OF PAYMENT AND SECURITY FOR THE BONDS herein. *Preliminary, subject to change 1

8 The 2011 Bonds will mature in the amounts and on the dates set forth on the inside front cover of this Official Statement and will bear interest from the date of delivery. Interest on the 2011 Bonds will be payable on January 5 and July 5 of each year, beginning July 5, 2012 (each date, an Interest Payment Date ), and will be calculated on the basis of a 360-day year consisting of twelve 30-day months. Interest on the 2011 Bonds will be paid on each Interest Payment Date by check or draft mailed by the Trustee to the registered owner or owners thereof as of the close of business on the first day of the month of such Interest Payment Date (a Record Date ) or by wire transfer to a registered owner of more than $1,000,000 aggregate principal amount of the 2011 Bonds upon written request of such registered owner. The principal of the 2011 Bonds will be payable upon maturity or redemption by the Trustee upon the surrender of the 2011 Bonds at the principal corporate trust office of the Trustee or at the office designated by the Trustee. When issued, the 2011 Bonds will be registered in the name of and held by Cede & Co., as nominee for The Depository Trust Company, New York, New York ( DTC ). Purchases of beneficial interest in the 2011 Bonds will be made in book-entry-only form in denominations of $5,000. Purchasers of beneficial interests in the 2011 Bonds (the Beneficial Owners ) will not receive physical delivery of certificates representing their interest in the 2011 Bonds. For so long as the 2011 Bonds are held in book-entry-only form, payments of principal of, and interest on the 2011 Bonds will be paid by the Trustee only to DTC or its nominee. Neither the Building Corporation, the School Corporation nor the Trustee will have any responsibility for a Beneficial Owner s receipt from DTC or its nominee, or from any DTC Participant (as hereinafter defined) or Indirect Participant (as hereinafter defined), of any payments of principal of, or interest on the 2011 Bonds. See Book-Entry-Only System. Book-Entry-Only System DTC will act as securities depository for the 2011 Bonds. The ownership of one fully registered Bond for each maturity as set forth on the inside front cover hereof, each in the aggregate principal amount of such maturity, will be registered in the name of Cede & Co., as nominee for DTC. DTC is a limited-purpose trust company organized under the laws of the State of New York, 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 the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Act of 1934, as amended. DTC was created to hold securities of its participants (the DTC Participants ) and to facilitate the clearance and settlement of securities transactions among DTC Participants in such securities through electronic book-entry changes in accounts of the DTC Participants thereby eliminating the need of physical movement of securities certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations, some of whom (or their representatives or, both) own DTC. Access to the DTC system is also available to others such as banks, brokers, dealers, and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (the Indirect Participants ). The DTC Participants shall receive a credit balance in the records of DTC. The ownership interest of each actual purchaser of each 2011 Bond (the Beneficial Owner ) will be recorded through the records of the DTC Participant. Beneficial Owners are expected to receive a written confirmation of their purchase providing details of the 2011 Bond acquired from the appropriate DTC Participants or Indirect Participant. Transfers of ownership interests in the 2011 Bonds will be accomplished by book entries made by DTC and, in turn, by the DTC Participants who act on behalf of the Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interest in the 2011 Bonds. So long as Cede & Co., is the registered owner of the 2011 Bonds, as nominee of DTC, references herein to the Bond owners or registered owners of the 2011 Bonds shall mean Cede & Co., and shall not mean the Beneficial Owners of the 2011 Bonds. DTC may determine to discontinue providing its service with respect to the 2011 Bonds at any time by giving notice to the Building Corporation or its agent and discharging its responsibilities with respect thereto under applicable 2

9 law. The Building Corporation may determine that continuation of the system of book-entry transfers through DTC (or a successor securities depository) is not in the best interest of the Beneficial Owners. In either such event, ownership of each 2011 Bond will be transferred to such person or persons, including any other clearing agency, as the holder of such 2011 Bond may direct. See Discontinuation of Book-Entry-Only System. The Building Corporation and the Paying Agent and Registrar will recognize DTC or its nominee as the bondholder for all purposes, including without limitation, the receiving of payment of the principal of and interest on any 2011 Bonds, the receiving of notice and the giving of consent. Conveyance of notices and other communications by DTC to DTC Participants, by DTC Participants to Indirect Participants and by DTC Participants and Indirect Participants to Beneficial Owners, will be governed by arrangements among them, subject to any statutory and regulatory requirements as may be in effect from time to time. DTC has no knowledge of the actual Beneficial Owners of the 2011 Bonds. The Building Corporation will not have any responsibility or obligation to any DTC Participant or Indirect Participant, or any person on behalf of which, or otherwise in respect of which, any such participant holds any interest in any 2011 Bonds, including, without limitation, any responsibility or obligation to maintain accurate records of any interest on any 2011 Bonds or any responsibility or obligation with respect to the receiving of payment of principal of or interest on any 2011 Bonds, the receiving of notice or the giving of consent. Principal and interest payments on the 2011 Bonds will be made to DTC or its nominee, Cede & Co., as registered owner of the 2011 Bonds. DTC s current practice is to credit the accounts of the DTC Participants on a payable date in accordance with their respective holdings shown on the records of DTC unless DTC has reason to believe that it will not receive payment on a payable date. Payments by DTC Participants and Indirect Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is now the case with municipal securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such DTC Participant or Indirect Participant and not of DTC, or the Building Corporation, subject to any statutory and regulatory requirements as may be in effect from time to time. Payment of principal, redemption premium, and interest to DTC is the responsibility of the Building Corporation or the Paying Agent and disbursements of such payments to DTC Participants and Indirect Participants shall be the responsibility of DTC. Certain of the information under Book-Entry-Only System have been extracted from a report from DTC entitled Book-Entry-Only Municipals. No representation is made by the Building Corporation, the School Corporation or the Underwriter as to the completeness or accuracy of such information or as to the absence of material adverse changes in such information subsequent to the date thereof. Discontinuation of Book-Entry System In the event that the book-entry system for the 2011 Bonds is discontinued, the Trustee would provide for the registration of the 2011 Bonds in the name of the Beneficial Owners thereof. The Building Corporation and the Trustee would treat the person in whose name any 2011 Bond is registered as the absolute owner of such 2011 Bond for the purpose of making and receiving payment of the principal thereof and premium, if any, and interest thereon, and for all other purposes, and neither the Building Corporation nor the Trustee would be bound by any notice or knowledge to the contrary. Each 2011 Bond would be transferable or exchangeable only upon the presentation and surrender thereof at the principal 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 2011 Bond for transfer or exchange, the Trustee would authenticate and deliver in exchange therefor, within a reasonable time after such presentation, a new 2011 Bond or 2011 Bonds, registered in the name of the transferees (in the case of a transfer), or the owner (in the case of an exchange), in authorized denomination and at the same rate as the 2011 Bond or 2011 Bonds so presented. The cost of such transfer or exchange will be borne by the Building Corporation. 3

10 Optional Redemption The 2011B Bonds are subject to redemption prior to maturity, at the option of the Building Corporation, in whole or in part, but in integral multiples of $5,000, on any date not earlier than January 5, 2021, at 100% of the principal amount of each 2011B Bond to be redeemed plus accrued interest to the redemption date. Mandatory Sinking Fund Redemption The Underwriter may elect to aggregate all or any portion of one or both series of the 2011 Bonds into one or more term bonds for such series of the 2011 Bonds payable from mandatory sinking fund redemption payments (the Term Bonds ). The Term Bonds, if any, will have a stated maturity or maturities on January 5 or July 5 of the years selected by the Underwriter. TERM BOND DUE TERM BOND DUE Date Amount Date Amount In the event that the Underwriter opts to aggregate certain 2011 Bonds into Term Bonds, such Term Bonds shall be subject to mandatory sinking fund redemption prior to maturity at a redemption price equal to one hundred percent (100%) of the principal amount thereof, plus accrued interest to the redemption date, but without premium, on January 5 or July 5 of each year and in the principal amounts selected by the Underwriter. The Registrar and Paying Agent shall credit against the current mandatory sinking fund redemption requirement for a Term Bond of a particular maturity, and 2011 Bonds of such maturity delivered to the Registrar and Paying Agent and canceled by the Registrar and Paying Agent and not therefore applied as a credit against any mandatory sinking fund requirement. Each 2011 Bond so delivered or purchased shall be credited by the Registrar and Paying Agent at one hundred percent (100%) of the principal amount thereof against the mandatory sinking fund redemption requirements for the applicable Term Bond in order of mandatory sinking fund redemption (or final maturity) dates determined by the Building Corporation and the principal amount of such Term Bond to be redeemed on such mandatory sinking fund redemption dates by operation of the mandatory sinking fund redemption requirements shall be reduced accordingly. Notice of Redemption Notice of any optional or mandatory sinking fund redemption will be mailed by first class mail by the Trustee not more than sixty (60) days nor less than thirty (30) days prior to the date selected for redemption to the registered owners of all 2011 Bonds to be redeemed at the address shown on the registration books of the Registrar as of the date of mailing; provided, however, that failure to give such notice by mailing or a defect in the notice or the mailing as to the 2011 Bonds will not affect the validity of any proceedings for redemption as to any other 2011 Bonds for which notice is adequately given. Notice having been mailed, the 2011 Bonds designated for redemption will, on the date specified in such notice, become due and payable at the then applicable redemption price. On presentation and surrender of such 2011 Bonds in accordance with such notice at the place at which the same are expressed in such notice to be redeemable, such 2011 Bonds shall be redeemed by the Trustee and any paying agent for that purpose. From and after the date of redemption so designated, unless default is made in the redemption of the 2011 Bonds upon presentation, interest on the 2011 Bonds designated for redemption will cease. Registration, Transfer and Exchange The 2011 Bonds will be registered at and are transferable by the registered owners at the corporate trust office of Paying Agent, upon surrender and cancellation and on presentation of a duly executed written instrument of transfer. A new bond or bonds of the same aggregate principal amount and maturity and in authorized denominations will be issued to the transferee or transferees in exchange therefor. 4

11 If any 2011 Bond is mutilated, lost, stolen or destroyed, the Registrar may execute a new 2011 Bond, subject to indemnity satisfactory to the Paying Agent in its discretion. The Registrar may charge the owner for reasonable fees and expenses in connection with replacements. ADDITIONAL BONDS The Building Corporation may issue additional bonds under the Indenture ( Additional Bonds ) on a parity with the 2011 Bonds, the Building Corporation s First Mortgage Bonds, Series 2009 issued on July 9, 2009 (the 2009 Bonds ), the Building Corporation s First Mortgage Bonds, Series 2008 issued on December 23, 2008 (the 2008 Bonds ), the Building Corporation s First Mortgage Refunding Bonds, Series 2008 issued on May 15, 2008 (the 2008 Refunding Bonds ) and any Additional Bonds then outstanding. Additional Bonds may be issued to provide for the refunding of outstanding 2011 Bonds, 2009 Bonds, the 2008 Refunding Bonds, 2008 Bonds, any Additional Bonds and for certain other limited purposes. (See SUMMARY OF CERTAIN PROVISIONS OF THE TRUST INDENTURE - Additional Bonds ) herein. Any series of Additional Bonds shall have maturities, interest rates, interest payment dates, denominations and other terms as provided in the supplemental indenture entered into in connection with the issuance of such Additional Bonds, provided that such terms and provisions shall not be otherwise inconsistent with the Indenture. All 2011 Bonds, together with any Additional Bonds as may be issued on a parity therewith under the Indenture, are all to be equally and ratably secured and entitled to the protection given under the Indenture including, but not limited to, payments under the Lease (as hereinafter defined). PURPOSE OF ISSUE Proceeds from the 2011A Bonds will be used for the purpose of providing funds for (i) the demolition of the existing pool facility at the existing Munster High School and the conversion of such area which upon completion will provide approximately 24,000 of additional square feet, will contain approximately twelve (12) classrooms, two (2) restrooms and related storage and custodial areas, and will increase the programmatic total student capacity at the existing Munster High School by approximately three hundred fifty (350) students and (ii) paying the costs incidental to the issuance of the 2011A Bonds (collectively, the 2011A Project ). Proceeds from the 2011B Bonds will be used to provide funds to (i) reimburse the School Town of Munster, Lake County, Indiana (the School Corporation ) for improvements made by the School Corporation in 2009 and 2010 at the Mortgaged Property (as hereinafter defined) with the understanding that the School Corporation will use such money to pay for all or a portion of the costs of certain renovations of the existing Wilbur Wright Middle School, including, but not limited to, the existing pool and related areas, all or a portion of the roof, other miscellaneous improvements and equipping projects throughout the facility and projects related thereto and (ii) pay the costs incidental to the issuance of the 2011B Bonds (collectively, the 2011B Project ). The 2011A Project and the 2011B Project, collectively, the 2011 Projects. LEASED PREMISES The property subject to the Lease, dated as of September 20, 1995 (the Original Lease ), as amended by the First Amendment to Lease, dated as of March 15, 1996 (the First Amendment ), the Second Amendment to Lease, dated as of September 15, 1998 (the Second Amendment ), the Third Amendment to Lease, dated as of November 17, 2008 (the Third Amendment ), the Fourth Amendment to the Lease, dated as of March 12, 2009 (the Fourth Amendment ) and the Fifth Amendment to the Lease, dated as of March 15, 2011 (the Fifth Amendment ) (the Original Lease, as amended by the First Amendment, Second Amendment, Third Amendment, Fourth Amendment, and Fifth Amendment, the Lease ), each by and between the Building Corporation, as lessor, and the School Corporation, as lessee, includes all of the existing Munster High School and the real property on which such portions are located including, but not limited to, the 2011 Premises (collectively, the Leased Premises or the Premises ). 5

12 SOURCES AND USES OF FUNDS The proceeds from the 2011A Bonds are expected to be applied as follows: Sources of Funds: Principal Amount of 2011A Bonds Net Original Issue Premium/(Discount) Total Sources of Funds Uses of Funds: Deposit to Construction Account Cost of Issuance Underwriter's Discount Total Uses of Funds The proceeds from the 2011B Bonds are expected to be applied as follows: Sources of Funds: Principal Amount of 2011B Bonds Net Original Issue Premium/(Discount) Total Sources of Funds Uses of Funds: Deposit to Construction Account Cost of Issuance Underwriter's Discount Total Uses of Funds SOURCE OF PAYMENT AND SECURITY FOR THE BONDS The 2011 Bonds, together with the 2009 Bonds, 2008 Refunding Bonds, the 2008 Bonds and any Additional Bonds hereafter issued (collectively, the Bonds ), are obligations of the Building Corporation payable solely from and secured exclusively by (i) a first mortgage lien on and security interest in the Mortgaged Property, as hereinafter defined, and (ii) the lease rental payments to be paid by the School Corporation directly to the Trustee as instructed by the Building Corporation under the Lease. The Mortgaged Property consists of (i) the real property upon which the Munster High School is located (the Real Property ), and (ii) the improvements, furnishings, equipment and appurtenances located, or to be located, on the Real Property (clauses (i) and (ii), collectively, the Premises ), (iii) all right, title and interest of the Building Corporation in the Lease and any other leases entered into by the Building Corporation and the School Corporation and pledged to the Trustee as a part of the Mortgaged Property, (iv) all of the right, title and interest in and to the proceeds from the sale of all or any property subject to the lien of the Indenture, (v) all proceeds of the Bonds and certain other cash and securities now or hereafter held in certain funds and accounts 6

13 created and established by the Indenture (except the Rebate Fund, as hereafter defined). Pursuant to the Lease, the School Corporation is obligated to pay the rent on a semi-annual basis directly to the Trustee on each June 30 and December 31 of each year in the amounts and on the dates shown on the schedule entitled SCHEDULE OF DEBT SERVICE PAYMENTS in APPENDIX E of this Official Statement. All payments of rent under the Lease commencing with the payment on June 30, 2012, which in turn will be used to pay the principal of and interest on the 2011 Bonds and Trustee fees commencing on July 5, 2012, will be fully dependent upon the completion of the 2011 Building Corporation Project by June 30, Indiana law does not permit school corporations to pay lease rental payments on a school building which the School Corporation leases until such school building is complete and ready for occupancy. The commencement of the 2011 Building Corporation Project will begin in June, 2011 and the Building Corporation and School Corporation anticipate that completion of the entire 2011A Project will occur no later than December, If there are excessive delays in the construction and the facilities are not available for occupancy and use by June 30, 2012, sufficient funds may not be available to meet all of the principal and interest payments due on the 2011 Bonds on and after such date. In addition, the Building Corporation has secured, or will secure prior to the issuance of the 2011 Bonds, performance bonds equal to 100% of the contract price for the 2011A Project, but there can be no assurance that the resources and remedies available to the Building Corporation and the School Corporation will be sufficient to allow it to complete the 2011A Project in the event that unexpected costs arise. The improvements for which the School Corporation is being reimbursed as a part of the 2011B Project is already completed and being occupied by the School Corporation. The Lease provides that, in the event the Premises are partially or totally destroyed, whether by fire or any other casualty, so as to render the same unfit, in whole or part, for use by the School Corporation: (i) it will then be the obligation of the Building Corporation to restore and rebuild the Premises as promptly as may be done, unavoidable strikes and other causes beyond the control of the Building Corporation excepted; provided, the Building Corporation will not be obligated to expend on such restoration or rebuilding more than the amount of the proceeds received by the Building Corporation from the insurance provided for in the Lease, and provided further, the Building Corporation will not be required to rebuild or restore the Premises if the School Corporation instructs the Building Corporation not to undertake such work because the School Corporation anticipates that either the cost of such work exceeds the amount of insurance proceeds and other amounts available for such purpose, or the work cannot be completed within the period covered by rental value insurance; and (ii) the rent will be abated, for the period during which the Premises or any part thereof is unfit for use by the School Corporation, in proportion to the percentage of the area of Premises which is unfit for use by the School Corporation. In accordance with the Lease, the School Corporation, at its own expense, is required to keep the Premises insured against physical loss or damage, however caused, with such exceptions as are ordinarily required by insurers of buildings or improvements of a similar type, which insurance will be in an amount at least equal to the greater of the option to purchase price and one hundred percent (100%) of the full replacement cost of the Premises. The School Corporation will also, at its own expense, maintain rent or rental value insurance in an amount equal to the full rental value of the Premises for a period of two (2) years against physical loss or damage. For a more detailed discussion of certain provisions of the Lease, see APPENDIX C, SUMMARY OF CERTAIN PROVISIONS OF THE LEASE herein. LEGISLATION AFFECTING OBLIGATIONS OF INDIANA SCHOOL CORPORATIONS Indiana Code (b) provides that the Department of Local Government Finance (the DLGF ), prior to the end of each calendar year, is required to review the proposed bond and lease rental ad valorem tax levies of each school corporation for the next calendar year and the proposed appropriations for those levies to pay principal of and interest on each school corporation s outstanding general obligation bonds and to pay each school corporation s outstanding lease rental obligations (collectively bond and lease obligations ) to be due and payable in the next calendar year. The DLGF is to determine whether the proposed levies and appropriations are sufficient to pay the bond and lease obligations. If it determines that the proposed levies and appropriations are insufficient to pay the bond and lease 7

14 obligations, then the DLGF is required to establish for such school corporation bond and lease rental levies and appropriations which are sufficient for that purpose. Subject to constitutional restraints, this section of the Indiana Code can be changed or repealed at any time. If a school corporation fails to meet its requirement to pay bond and lease obligations when due, the State Treasurer may be required to pay the bond and lease obligations from certain State funds which would otherwise be distributed to that school corporation. Pursuant to Indiana Code (c), as amended, upon the failure of any school corporation to pay when due any of its bond and lease obligations, the State Treasurer, upon notification by any claimant, is required to make payment of those obligations from State funds to the extent of, but not in excess of, any amounts appropriated by the General Assembly, at its discretion, for that calendar year for distribution to that school corporation, and to deduct that amount of that payment from the amount to be so distributed to that school corporation. Pursuant to the Indenture, the Trustee is to notify and demand payment immediately from the State Treasurer if the School Corporation should default in its obligation under the Lease to pay the lease payments to the Trustee. There can, however, be no assurance as to the levels or amounts that may from time to time be appropriated by the Indiana General Assembly for school purposes or that, subject to constitutional restraints; this provision of the Indiana Code will not be repealed. GENERAL PROCEDURES FOR PROPERTY ASSESSMENT, TAX LEVY AND COLLECTION On December 4, 1998, the Indiana Supreme Court affirmed a ruling by the Indiana Tax Court that the property wealth assessment methodology employed in the 1995 Indiana Real Property Assessment Manual was unconstitutional. State Bd. of Tax Comm rs v. Town of St. John, 702 N.E.2d 1034 (Ind. 1998). The Indiana Supreme Court ruled that the reproduction cost schedules used by the State Board of Tax Commissioners (the State Board ) were arbitrary and unconstitutional. As a result, the State Board issued new regulations, a manual, and guidelines in May 2001 (the Regulations ) to comply with the Supreme Court s decision. The Regulations were effective as of the March 1, 2002 assessment date and affect the property taxes payable in The Regulations are briefly described in this section of the Official Statement. The Regulations will shift the tax burden among various classes of property owners, but will not impact the total tax levy. This ruling affects only the valuation method and not the ability of political subdivisions to levy property taxes. Neither the Building Corporation nor the School Corporation can predict the impact on property tax collections, or the possibility of any future judicial actions, legislation or rulings enacted as a result of the Regulations. As of January 1, 2002, the State legislature dissolved the State Board and created two new agencies to replace the State Board, the DLGF and the Indiana Board of Tax Review (the IBTR ). The DLGF assumed the administrative responsibilities of the State Board and the IBTR assumed the responsibilities of the State Board for property tax appeals. Real and personal property in the State of Indiana is assessed each year as of March 1st. On or before August 1st each year, each county auditor must submit to certain local, county, and state agencies a statement providing (i) information concerning the assessed valuation in the political subdivision for the next calendar year, (ii) an estimate of the taxes to be distributed to the political subdivision during the last six months of the current calendar year, (iii) the current assessed valuation as shown on the abstract of charges, (iv) the average growth in assessed valuation in the political subdivision over the preceding three (3) budget years, excluding years in which a general reassessment occurs, and (v) any other relevant information. By statute, the budget, tax levy and tax rate of a political subdivision (other than a consolidated city and county, a second class city, or the South Bend Community School Corporation, which would be no later than its respective last meeting in September) must be established no later than September 20. The budget, tax levy and tax rate are subject to review and revision by the county board of tax adjustment, which can lower, but not raise the tax levy or tax rate. Taxpayers of the political subdivision may challenge the budget, tax levy and tax rate approved by the political subdivision. In addition, taxpayers of the political subdivision or the political subdivision may initiate an appeal of the budget and tax levy approved by the county board of tax adjustment to the DLGF. 8