Letter of Credit Agreement 02/18/15 LETTER OF CREDIT AGREEMENT
This Letter of Credit Agreement (the "Agreement"), executed this 1g day of
fe 19 r , 2015, by and between The City of Carmel Redevelopment Commission ("CRC")and Pedcor
Investments, A Limited Liability Company (the "Guarantor"), Witnesses:
Recitals
WHEREAS, CRC, Carmel City Center, LLC ("CCC"), and CCC West, LLC, and CCC
Phase II, LLC (jointly and severally, the"Second Component Developer") have executed that certain Project
Agreement (Second Component/Park East/Second Component Public Improvements) dated
December 15, 2014 (the "Second Component Project Agreement");
WHEREAS, pursuant to the Second Component Project Agreement, Guarantor is obligated
to execute and deliver the Taxpayer Agreement Guaranty to CRC at the Closing;
WHEREAS, all capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Taxpayer Agreement Guaranty; provided that any such capitalized terms not
defined in the Taxpayer Agreement Guaranty shall have the meanings ascribed to those terms in the
Second Component Project Agreement;
WHEREAS, pursuant to the Second Component ProjectAgreement(and in conjunction with
the Taxpayer Agreement Guaranty), Guarantor is obligated to execute and deliver the Letter of Credit
Agreement to CRC at the Closing;
WHEREAS, this Agreement is the"Letter of Credit Agreement" required to be executed and
delivered pursuant to the Second Component Project Agreement; and
WHEREAS, Guarantor is executing this Agreement to satisfy the requirements of the Second
Component Project Agreement;
Agreement
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are acknowledged hereby, CRC and Guarantor agree as follows:
1. Definitions.
Agreement Year shall mean the first full calendar year after Guarantor makes the first draw on the Bonds and
each successive calendar year during the Term,
Cure Period shall mean a period of 30 days after Guarantor receives notice specifying the nature of a failure
by Guarantor to observe or perform any term or condition of this Agreement to be observed or performed by
it; provided that, if the failure is of such a nature that it cannot be remedied within 30 days, despite reasonably
diligent efforts, then the 30-day period shall be extended as reasonably may be necessary for Guarantor to
remedy the failure, so long as Guarantor: (a) commences to remedy the failure within the 30-day period; and
(b) diligently pursues such remedy to completion.
Event of Default shall have the meaning set forth in Subsection 6(a).
Letter of Credit shall mean a letter of credit in the amount of $4,000,000.00 to secure the obligations of
Guarantor under the Taxpayer Agreement Guaranty, which letter of credit:
(a) is issued for the benefit of CRC by a national bank or other banking institution
(including,without limitation, a bank holding company,a financial holding company,or a thrift
holding company) that, in addition to being reasonably acceptable to CRC, has a net worth
equal to or greater than$10,000,000.00 as: (i)determined by generally accepted accounting
principles consistently applied; and (ii) established by: (A) the most recent audited financial
statements of the bank or institution(which financial statements in all cases shall be less than
16 months old); and (B) in the case of: (1) a bank holding company or a financial holding
company, a certification from the appropriate entity that the holding company is well
capitalized" under the criteria of the Federal Reserve Bank; or(2) a thrift holding company,
a certification from the appropriate entity that the holding company would be"well capitalized"
under the foregoing criteria, if such criteria applied to thrift holding companies;
(b) is irrevocable and payable on sight;
(c) has a term equal to the stated term of the Bonds;accordingly,the letter of credit shall
continue until such time as the Bonds are repaid,refunded,redeemed,defeased, refinanced,
and/or"taken out" in full; provided that, if it is necessary to get successive letters of credit,
each of which has a term of 12 months or more, then, until such time as the Bonds are
repaid, refunded, redeemed, defeased, refinanced and/or"taken out" in full, each such letter
of credit shall provide that, on or after the date that is 30 days prior to the expiration of its
term, CRC may draw the full amount of the letter of credit unless CRC has been provided
with a replacement letter of credit that satisfies the terms and conditions of this definition;
(d) provides that if Guarantor is in default with respect to its obligations under the
Taxpayer Agreement Guaranty or this Agreement, then CRC shall have the right to make a
draw thereon in the amount with respect to which Guarantor is in default,which draw may be
made by presenting a certification signed by CRC and stating: (i)that Guarantor is in default
with respect to its obligations under the Taxpayer Agreement Guaranty or this Agreement;
and (ii)the amount with respect to which Guarantor is in default, together with any additional
amounts to which CRC is entitled as a result of such default; and
(e) contains such other commercially reasonable or customary terms and conditions as
CRC may require: (i) to adequately secure the Taxpayer Agreement Guaranty or this
Agreement; or (ii) so that the Letter of Credit satisfies the fundamental purposes for which
CRC required the Letter of Credit in the Second Component Project Agreement.
Non-Payment Event shall mean that a party to a Taxpayer Agreement fails to pay prior to delinquency any
amount of money to that is: (a) due and owing to CRC under this Agreement or the Taxpayer Agreement; or
(b) secured by, or the subject of, a Non-Payment Lien or a Tax Payment Lien.
Non-Payment Lien shall mean a lien of the kind and nature: (a) described in and provided by the Taxpayer
Agreements; and (b) defined by and referenced in the Taxpayer Agreement as a "Non-Payment Lien".
Project Increment shall mean the Baldwin Increment, Chambers Increment, Eastern Motor Court Increment,
Holland Increment, Kent Increment, Office Increment, Playfair Increment, Second Component Increment,
Windsor Increment, Wren Increment, and/or Excess Existing Improvements Increment.
Secured Financing shall mean the issuance of the Bonds, the predominant share of the debt service with
respect to which will be paid with Project Increment. If: (a)there is a restructuring of the Bonds; and/or(b)the
Bonds are repaid, refunded, redeemed, defeased, refinanced, and/or"taken out" in full and replaced with a
new financing; and after such restructuring or replacement with a new financing, all or a predominant share
of the debt service for the Bonds or such other financing will be paid with Project Increment, then the
restructured Bonds and/or the new financing shall constitute the "Secured Financing" for purposes of this
Agreement.
Tax Payment Lien shall mean a lien of the kind and nature: (a) described in and provided by the Taxpayer
Agreements; and (b) defined by and referenced in the Taxpayer Agreement as a "Tax Payment Lien".
Term shall mean the period set forth in Section 2.
2. Term. The"Term" of this Agreement shall: (a)commence on the date hereof; and (b)expire on the
date on which the Secured Financing is repaid, refunded, redeemed,defeased, refinanced,and/or"taken out"
in full, other than in connection with a refinancing in which the new financing constitutes a Secured Financing;
provided that, notwithstanding the foregoing, so long as there is no continuing Event of Default,the Term shall
expire on the last day of the calendar year with respect to which the"Total Increment Estimate", as set forth
on Exhibit A, applies. At such times during the Term that no Excess Existing Improvements Increment
Estimate is included in the Total Increment Estimate, there shall be no need for an Excess Existing
Improvements Increment Taxpayer Agreement.
3. Letter of Credit. At all times during the Term, Guarantor shall: (a) maintain the Letter of Credit in
full force and effect; and (b) refrain from all actions or efforts, the effect or result of which might be an attempt
or claim of right by the issuer to cancel, terminate, withdraw, or void the Letter of Credit. If it is necessary to
get successive letters of credit, each of which shall have a term of 12 months or more, then, until such time
as the term expires, then, on or before the date that is 45 days prior to the expiration of the then-current letter
of credit, Guarantor shall deliver to CRC a replacement letter of credit that satisfies the terms and conditions
of the definition of Letter of Credit. Guarantor shall provide to CRC all assistance and cooperation that CRC
may request in connection with making such draws on the Letter of Credit as CRC is entitle to make under
the terms and conditions of this Agreement, the Letter of Credit, and/or the Taxpayer Agreement Guaranty.
4. Annual Reductions. Notwithstanding any other term or condition of this Agreement, for every
Agreement Year that: (a) the Total Increment equals or exceeds the Total Increment Estimate; and (b) all
payments required to be made under the Taxpayer Agreements have been made prior to delinquency and
without: (i) recourse to the Taxpayer Agreement Guaranty or the Letter of Credit; or (ii) the exercise (or
expressly threatened exercise) of any right or remedy available to CRC with respect to such payments that
are delinquent; the required amount of the Letter of Credit shall decrease by an amount determined by
multiplying: (a) the then-current required amount of the Letter of Credit; by(b) a fraction: (i) the numerator of
which is 1; and (ii) the denominator of which is the number of years remaining in the stated term of the
Secured Financing; provided that, if, after a reduction in the required amount of the Letter of Credit, there
occurs and Event of Default, then: (a) automatically, and without any action or notice by of from CRC, the
required amount of the Letter of Credit shall be restored to $4,000,000.00; (b) within 10 business days
thereafter, Guarantor shall deliver to CRC a replacement letter of credit or a binding modification to the
then-current letter of credit that is signed by the issuer so that the letter of credit held by CRC reflects the
restoration of the required amount to $4,000,000.00 and otherwise satisfies the terms and conditions of the
definition of Letter of Credit; and (c) any subsequent decreases in the required amount of the Letter of Credit
shall be based on such restored amount.
5. Defaults and Remedies.
(a) Events of Default. It shall be an "Event of Default" if Guarantor fails to: (i) pay prior
to delinquency any amount of money to due and owing to CRC under this Agreement or the
Taxpayer Agreement Guaranty; or (ii) perform or observe any term or condition of this
Agreement or the Taxpayer Agreement Guaranty to be performed or observed by it: (A)with
respect to the obligation to pay money, if such failure is not cured within ten days after CRC
tenders to Guarantor notice that such payment is due; and (B) with respect to any other
obligation, if such failure is not cured within the Cure Period. All delinquent payments
shall bear interest at 12% per annum.
(b) Remedies. Whenever an Event of Default or Non-Payment Event occurs, CRC may
take whatever actions at law or in equity are necessary or appropriate to: (i) collect any
payments due to CRC, including,without limitation, drawing on the Letter of Credit,enforcing
the Taxpayer Agreement Guaranty, enforcing and/or foreclosing any Non-Payment Lien
and/or Tax Payment Lien(or, if an owner has posted a letter of credit such that the terms and
conditions of a Taxpayer Agreement with respect to Non-Payment Liens and the Tax
Payment Lien do not apply, making a draw against the letter of credit), or enforcing any
Taxpayer Agreement;(ii)protect its rights under this Agreement;(iii)enforce the performance
or observance by Guarantor of any term or condition of this Agreement or the Taxpayer
Guaranty (including, without limitation, the right to specifically enforce any such term or
condition); or (iv) cure, for the account of Guarantor, any failure of Guarantor to perform or
observe a material term or condition of this Agreement to be performed or observed by it.
Notwithstanding any other term or condition of this Agreement, if: (i) as provided in a
Taxpayer Agreement, the obligations of the taxpayer under the Taxpayer Agreement and to
pay real estate taxes as contemplated by the Taxpayer Agreement are secured by a letter
of credit that has been posted voluntarily for the benefit of CRC, instead of liens against the
applicable Component and Component Site(i.e.,a Non-Payment Lien and/or a Tax Payment
Lien); and (ii) there occurs a Non-Payment Event because the taxpayer fails to pay prior to
delinquency any amount of money to that is due and owing to CRC under the Taxpayer
Agreement; then CRC shall: (i)draw on such voluntary letter of credit before drawing on the
Letter of Credit; and (ii) draw on the Letter of Credit only to the extent that, after drawing on
the voluntary letter of credit, there remains any amount of money to that is due and owing to
CRC under the Taxpayer Agreement. Notwithstanding any other term or condition of this
Agreement, if: (i)during any semi-annual period,there occurs Non-Payment Events because
taxpayers under the Taxpayer Agreements fail to pay their share of the Total Increment
Estimate; but (ii) notwithstanding such failures, CRC is paid the full amount of the Total
Increment Estimate for that period under other Taxpayer Agreements; then CRC shall not
have the right to draw on the Letter of Credit solely because of such Non-Payment Events
(i.e., there must be another outstanding Non-Payment Events or Events of Default that
serves as the basis for a draw).
(c) Reimbursement. If CRC incurs any costs or expenses in connection with exercising
its rights and remedies under, or enforcing, this Agreement or the Taxpayer Agreement
Guaranty, including, without limitation, enforcing and/or foreclosing any Non-Payment Lien
and/or Tax Payment Lien, then Guarantor shall reimburse CRC for all such costs and
expenses (including, without limitation, attorneys' fees and other legal costs), together with
interest at the rate of 12% per annum. Due to the kind and nature of the rights and remedies
available to CRC, it is possible that CRC might recover twice the same amount of money due
and owing to CRC. For example, CRC might draw on the Letter of Credit to collect an
amount of money that is due and owing to CRC and that Guarantor fails to pay prior to
delinquency under the Taxpayer Agreement Guaranty. Simultaneously, CRC might file to
foreclose a Non-Payment Lien that secures payment of the same amount. Despite having
made such draw, CRC is entitled under Subsection 5(d) to pursue foreclosure of the
Non-Payment Lien (or exercise any other right or remedy). If such foreclosure is pursued to
completion, there may be sales proceeds received by CRC, or CRC may take title to the
foreclosed property. In the case that CRC exercises multiple remedies with the result that
CRC receives title to real or personal property other than cash or cash equivalents, CRC may
retain all such property and all such cash and cash equivalents, and Guarantor shall have no
claim or right with respect to such property or any cash or cash equivalents received by CRC.
Notwithstanding any term or condition of this Agreement, in the case that CRC exercises
multiple remedies with the result that CRC receives aggregate cash and/or cash equivalents
that exceed the sum of: (i) the amount of money that is due and owing to CRC; plus (ii) any
costs or expenses that CRC in connection with exercising its rights and remedies under, or
enforcing,this Agreement or the Taxpayer Agreement Guaranty, including,without limitation,
enforcing and/or foreclosing any Non-Payment Lien; plus (iii) interest accrued on the
delinquent payments at 12% per annum; CRC shall: (i) maintain such excess(together with
any such excesses from other instances of CRC exercising multiple remedies with respect
to the same delinquent payment)as a delinquent payments reserve; and(ii)forego draws on
the Letter of Credit until that reserve is exhausted and the reserve balance is $0.
(d) No Remedy Exclusive. No right or remedy herein conferred upon, or reserved to,
CRC, any governmental authority, or any escrow agent or trustee, or in this Agreement, by
the Taxpayer Agreement Guaranty, or in or by any other instrument, source, or Law is
intended to be exclusive of any other available right or remedy, unless otherwise expressly
stated; instead, each and every such right or remedy shall be cumulative, may be exercised
simultaneously with any other such right or remedy, may be exercised sequentially in any
order, and shall be in addition to every other right or remedy of any other kind or nature or
now or hereafter existing at law or in equity; provided that: (i) CRC shall not draw on the
Letter of Credit for any amount of money that previously has been paid or disbursed to CRC,
whether such payment or disbursement was made to CRC voluntarily or as a result of the
exercise by CRC of any right or remedy; and(ii)if CRC subsequently is paid or disbursed any
amount of money for which CRC already has drawn of the Letter of Credit, then the
subsequent payment or disbursement, to the extent duplicative of the previous draw, shall
be maintained in reserve as provided in Subsection 5(c). No action, counter-action, delay,
or omission by CRC, any governmental authority, or any escrow agent or trustee with respect
to exercising any right or remedy shall impair or effect the availability or exercise of any other
right or remedy, or be construed to be a waiver thereof, and all rights and remedies shall be
available and may be exercised from time to time, and as often as may be deemed to be
expedient. To entitle CRC to exercise any of its rights or remedies, it shall not be necessary
for CRC to give notice to Guarantor, other than such notice as may be required by this
Section or Law.
6. Indemnification. Guarantor shall indemnify and hold harmless CRC from and against any and all
claims,damages, losses,damages,costs,and expenses(including,without limitation,attorneys'fees)arising
from or connected with the breach by Guarantor of any term or condition of this Agreement. The foregoing
indemnification obligation of Guarantor shall survive the expiration of the Term.
7. Notice. Any notice required or permitted to be given by either party to this Agreement shall be in
writing, and shall be deemed to have been given or tendered when: (a)delivered in person to the other party;
(b)sent by facsimile or email,with electronic confirmation of receipt; or(c) sent by national overnight delivery
service,with confirmation of receipt,addressed as follows:to CRC at 30 West Main Street, Suite 220, Carmel,
Indiana 46032, Facsimile: 317-844-3498, email: cmeyer(a�carmel.in.gov, Attn: Corrie Meyer, with a copy to:
Jennifer R. Shoup, Wallack Somers & Haas, PC, One Indiana Square, Suite 2300, Indianapolis, Indiana
46204, Facsimile: 317-231-9900, email: jrs(a�wshlaw.com and to Guarantor at 770 3rd Avenue Southwest,
Carmel, Indiana 46032, Facsimile: 317-587-0340, email: rbrownpedcor.net, Attn: Ron Brown. Either party
may change its address for notice from time to time.
8. Authority. Each undersigned person executing this Agreement on behalf of CRC and Guarantor
represents and certifies that: (a) he or she has been empowered and authorized by all necessary action of
CRC and Guarantor, respectively, to execute and deliver this Agreement; (b) he or she has full capacity,
power, and authority to enter into and carry out this Agreement; and (c) the execution, delivery, and
performance of this Agreement have been authorized by CRC and Guarantor, respectively.
• 9. Miscellaneous. This Agreement: (a)may be executed in separate counterparts, each of which shall
be an original, but all of which together shall constitute a single instrument; (b) shall be governed by, and
construed in accordance with, the laws of the State of Indiana; and (c) may be modified only by a written
agreement signed by both CRC and Guarantor. The invalidity, illegality,or unenforceability of any one or more
of the terms and conditions of this Agreement shall not affect the validity, legality, or enforceability of the
remaining terms and conditions hereof. All Exhibits referenced in this Agreement are attached hereto and
incorporated herein by refers.. ce. All proceedings arising in connection with this Agreement shall be tried and
litigated only in the state courts in Hamilton County, Indiana, or the federal courts with venue that includes
• Hamilton County, Indiana. Guarantor waives, to the extent permitted under applicable law: (a) the right to a
trial by jury; and (b) any right Guarantor may have to: (i) assert the doctrine of"forum non conveniens"; or
(ii) object to venue. At the request either party, accompanied by execution copies, the other party shall
execute and deliver a memorandum of this Agreement for recording.
IN WITNESS WHEREOF, CRC and Guarantor have executed this Agreement as of the date
set forth above.
THE CITY OF CARMEL
REDE E(. .AJt, J14•PMENT o MISSION
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THE CITY OF CARMEL
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CARMEL CITY CENTER
ASSESSMENT PROJECTIONS FOR PARK
EAST TIF DISTRICT
Assuming:RE Tax Rate Pass Thru for TIF: 1.84530%
Assuming:Growth rate in the assessed value _ _ _ _ 0.00%
'All numbers are estimates and subject'
Constr End: I to revisions.
,�C�(M pl- 1V
' �.0 FAQ ���sa` � a�t 'c �{�'�"`��-
l\, Current Assessud 44;44e ESTIMATED;:
Cam''' .."
;TatPa ment4 Value';TOTAL' uPassThru; TIGRLVL-NUE
-(11"0 t 05/10/14 - 1.8453% -
�
0-1,U,-)A- U� 11/10/14 = 1.8453% _4kAl o cv" n' 05/10/15 1.8453%
L_.1` C�� 1 11(10(16 5
- 1.8453%
�" I 05/10/16 1.8453%
-
1 U� Rnr, Gail 11/10/16 - 1.8453% -
u IAA.v 05/10/17 - 1.8453%
&UO � L°T� / 2 11/10/17 - 1.8453% -
{ 1Q„ Q Q,r,,u�(-c 05/10/18 22,691,177 1.8453% 209,360
t 3 11/10/18 22,691,177 1.8453% 209,360
05/10/19 50,741,913 1.8453% 468,170
4 11/10/19 50,741,913 1.8453% 468,170
05/10/20 63,896,265 1.8453% 589,539
5 11/10/20 63,896,265 1.8453% 589,539
05/10/21 71,691,059 1.8453% 661,458
6 11/10/21 71,691,059 1.8453% 661,458
05/10/22 71,691,059 1.8453% 661,458
7 11/10/22 71,691,059 1.8453% 661,458
05/10/23 71,691,059 1.8453% 661,458
8 11/10/23 71,691,059 1.8453% 661,458
05/10/24 71,691,059 1.8453% 661,458
9 11/10/24 71,691,059 1.8453% 661,458
05/10/25 71,691,059 1.8453% 661,458
10 11/10/25 71,691,059 1.8453% 661,458
05/10/26 71,691,059 1.8453% 661,458
11 11/10/26 71,691,059 1.8453% 661,458
05/10/27 71,691,059 1.8453% 661,458
12 11/10/27 71,691,059 1.8453% 661,458
05/10/28 71,691,059 1.8453% 661,458
13 11/10/28 71,691,059 1.8453% 661,458
05/10/29 71,691,059 1.8453% 661,458
14 11/10/29 71,691,059 1.8453% 661,458
05/10/30 71,691,059 1.8453% 661,458
15 11/10/30 71,691,059 1.8453% 661,458
05/10/31 71,691,059 1.8453% 661,458
16 11/10/31 71,691,059 1.8453% 661,458
05/10/32 71,691,059 1.8453% 661,458
17 11/10/32 71,691,059 1.8453% 661,458
05/10/33 71,691,059 1.8453% 661,458
18 11/10/33 71,691,059 1.8453% 661,458
05/10/34 71,691,059 1.8453% 661,458
19 11/10/34 71,691,059 1.8453% 661,458
05/10/35 71,691,059 1.8453% 661,458
20 11/10/35 71,691,059 1.8453% 661,458
05/10/36 71,691,059 1.8453% 661,458
21 11/10/36 71,691,059 1.8453% 661,458
05/10/37 71,691,059 1.8453% 661,458
22 11/10/37 71,691,059 1.8453% 661,458
05/10/38 71,691,059 1.8453% 661,458
23 11/10/38 71,691,059 1.8453% 661,458
05/10/39 71,691,059 1.8453% 661,458
24 11/10/39 71,691,059 1.8453% 661,458
05/10/40 71,691,059 1.8453% 661,458
25 11/10/40 71,691,059 1.8453% 661,458
28,992,441