Wallack Somers & Haas - RE: Revolving Line of Credit - 11/8/2011 WALLACK BARRY Z.WALLACK
MICHAEL S.WALLACK
SOMERS KARL R HAAS
HAAS„ JENNIFER R.SHOUP
HARRY F.TODD
Attorneys at Law RYAN R.WILMERING
November fi, 2011
The City of Carmel Redevelopment Commission
Fowler State Bank
300 East 5th Street
P.O. Box 511
Fowler, Indiana 47944
Hall, Render, Killian, Heath & Lyman, P.C.
Suite 2000, Box 82064
One American Square
Indianapolis, IN 46282
Re: Revolving Line of Credit from Fowler State Bank (the "Lender").
Ladies and Gentlemen:
We have acted as counsel to Carmel City Center Community Development Corporation, an Indiana
community development corporation(the"Borrower")for purposes of rendering this opinion in connection with
that certain $2,500,000.00 revolving line of credit to be made available by Lender to Borrower (the "Loan").
In connection therewith, we have reviewed the following documents and instruments relating to the
Loan, each dated as of the date of this opinion, unless otherwise indicated:
A. Promissory Note in the original amount of$2,500,000.00 from Borrower, as maker,
to Lender;
B. Collateral Assignment and Security Agreement by and among The City of Carmel
Redevelopment Commission("CRC"), Borrower,and Lender(the"Collateral Assignment");
C. Tri-Party Agreement by and among CRC, Borrower, and Lender;
D. Grant Agreement by and between CRC and Borrower (the "Grant Agreement"),
E. An unfiled form of UCC Financing Statement to be filed in the Office of the Secretary
of State of Indiana, naming Borrower as the Debtor and naming Lender as the Secured Party
(the "Financing Statement");
F. Certificate of Existence for Borrower issued by the Secretary of State of Indiana
under date of September 26, 2011 (the "Public Authority Document"); and
One Indiana Square, Suite 2300
Indianapolis, Indiana 46204
Tel: 317.231.9000 www.WSHLaw.com Fax: 3 1 7.23 I.9900
G. Resolution of Borrower dated October 11, 2011;
Items A through D, collectively, are the"Loan Documents". Items A through G, collectively, are the
"Documents".
Our examination of documents has been confined solely to the Documents, and our opinions
hereinafter set forth are based solely upon this information. We have not been requested to perform,we have
been under no obligation to perform, and we have not performed, any independent review or examination of
any other documents.
We have made such examination of the laws of the State of Indiana(the"State")as we have deemed
necessary for the purposes of rendering the opinions set forth below, but we advise you that we express no
opinion as to the laws of any state or jurisdiction other than the State.
Assumptions
In rendering this opinion, we have assumed that:
(a) All facts set forth in all certificates and other statements, documents, records,
financial statements, and papers reviewed by us, are accurate and complete, and all factual
representations, warranties, schedules, and exhibits contained in the Documents are
accurate and complete with respect to the factual matters set forth therein.
(b) The Documents submitted to us for review are accurate and complete; the
Documents submitted to us as originals are authentic, true, accurate, and complete; the
Documents submitted to us as copies conform to the originals of such Documents which are
themselves authentic,true,accurate,and complete;and all signatures on the Documents are
genuine.
(c) The Public Authority Document is accurate, complete, and authentic and all official
public records (including their proper indexing and filing) are accurate and complete.
(d) Each Loan Document which is to be notarized has been acknowledged before a
notary public who has completed, signed, and sealed the acknowledgment on the form
attached to such Loan Document.
(e) The Loan Documents will be appropriately completed by due and sufficient
completion of all blanks and schedules; the legal description of any real property therein or
attached thereto will be accurate, complete, and legally sufficient; all exhibits to the Loan
Documents will be so attached thereto before execution, recording, and filing; all
cross-references therein to recorded documents (if any) are complete and accurate; and all
numerical data included in the Loan Documents is correct and reflects the intent of the parties
thereto.
(f) The Financing Statement contains the correct legal name and organizational number
of Borrower and the current address of Borrower, as debtor, and the correct legal name and
the current address of Lender, as secured party.
(g) The Financing Statement has been or will be duly filed, indexed, and recorded
among the appropriate official records, with all fees, charges, and taxes having been paid.
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(h) The Loan Documents, as and when executed on a proximate date, will conform in
all material respects to the form submitted to, and reviewed, by us.
(i) The Loan Documents are valid and enforceable against all parties thereto(other than
Borrower).
(j) Borrower has the requisite rights, titles,and interests in and to all collateral described
in the Loan Documents (the"Collateral") in order to grant a valid security interest therein.
(k) The terms and conditions of any permits, licenses, leases, subleases, contracts,
agreements,concessions,franchises,warranties,entitlements,authorizations, instruments,
documents, or other properties granted, conveyed, or assigned to Lender pursuant to the
Collateral Assignment do not: (i) contain any restrictions or limitations on Borrower's grant,
conveyance, or assignment thereof; (ii) require any consent or authorization to such grant,
conveyance, or assignment; or (iii) conflict with the terms of the Loan Documents.
(I) All consents, approvals, or authorizations necessary for the consummation of the
terms of the Loan by Lender, the execution and delivery of the Loan Documents to which it
is a party by Lender, and the performance thereof by Lender have been obtained by such
parties; and Lender has satisfied those legal requirements that are applicable to it to the
extent necessary to make the Loan Documents enforceable against it.
(m) Lender is qualified to do business in the State, or is not required to so qualify; and
Lender: (i) is duly incorporated, validly existing, and in good standing under the laws of its
respective jurisdiction; and (ii) has all necessary powers under its organizational documents
and all appropriate laws to engage in the transactions contemplated by the Loan Documents.
(n) There has not been any mutual mistake of fact or misunderstanding, fraud, duress,
or undue influence; and the conduct of the parties has complied with any requirement of good
faith, fair dealing, and conscionability.
(0) Lender and Borrower each have acted and will act in good faith and without notice
of any defense against the enforcement of any rights created by, or adverse claim to any
property or security interest transferred or created as part of, the transaction.
(p) There are no agreements or understandings among the parties, written or oral, and
there is no usage of trade or course of prior dealing among the parties that would, in either
case, define, supplement, or qualify the terms of the Loan Documents.
(q) Each of the Loan Documents has been delivered by all parties thereto for valuable
consideration actually received; and the proceeds of the Loan will be disbursed as provided
in the Loan Documents.
(r) Routine procedural requirements, such as service of process,will be satisfied by any
party seeking to enforce the Loan Documents.
(s) The Loan is not a consumer loan; and the proceeds thereof will not be used for
consumer, household, or agricultural-related purposes.
(t) We have assumed that the obligations and agreements of Borrower secured by the
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Loan Documents and any documents or instruments now or hereafter evidencing or
governing the same do not or will not contain, and will not be modified to contain, a cognovit
provision or a confession of judgment.
(u) The Loan Documents will be enforced in circumstances and in a manner which are
commercially reasonable.
Opinions
Based upon the foregoing,we are of the opinion that, under applicable State law in effect on the date
of this opinion:
1. Borrower is a community development corporation duly organized and validly existing
under the laws of the State of Indiana;
2. Borrower has taken the necessary action to authorize the execution and delivery of
the Loan Documents to which it is a party; and none of the provisions thereof contravenes
or is in conflict with the documents pursuant to which Borrower: (a)was incorporated; and/or
(b) is governed; and
3. Each of the Loan Documents to which it is a party constitutes a legal, valid, and
binding obligation of Borrower and is enforceable against Borrower in accordance with its
terms, except as the same may be limited as provided herein.
Qualifications
The opinions expressed above are subject to the following qualifications:
A. With respect to certain factual determinations underlying the legal conclusions set
forth herein, we have relied upon the factual representations and statements of fact of
Borrower contained in the Loan Documents. We have not undertaken any independent
investigation of the matters addressed in such representations and statements,we have not
made any independent review or investigation of any agreements, instruments, orders,
judgments, or decrees by which Borrower, or any of its properties may be bound, nor have
we made any independent investigation as to the existence of actions, suits, investigations,
or proceedings, if any, pending or threatened against Borrower; however, nothing has come
to our attention which would cause us to question the accuracy and completeness of such
representations and statements, and we have no basis to believe that it is unreasonable to
rely thereon. Further, opinions given"to the knowledge of counsel"are based solely on, and
are limited to, the current conscious awareness of the individual attorneys who participated
in the preparation of this letter, and no investigation or due diligence was undertaken by us
in connection with, or is to be inferred from, such opinions. Except as expressly and
specifically noted, we have not undertaken any independent investigation to determine the
existence or absence of such facts, and we accept no responsibility to make such
investigation. No inferences to this firm's knowledge of the existence or the absence of such
facts, regarding Borrower should be drawn from the fact of our representation of Borrower.
B. The enforceability of the Loan Documents and each of them, and all rights and
remedies thereunder, may be limited by: (i) applicable bankruptcy, fraudulent transfer,
fraudulent conveyance, liquidation, conservatorship, suretyship, insolvency, reorganization,
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moratorium, equitable subordination, and other similar laws now or hereafter in effect
governing the rights of debtors and creditors and sureties generally; (ii)general principles of
equity, including,without limitation, concepts of materiality, reasonableness, good faith, and
fair dealing and the possible unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law; and(iii)applicable laws,
statutes, ordinances, rules, regulations,constitutional principles,public policy, and equitable
principles that may limit the enforceability of,or render unenforceable: (A)any provision that
purports to confer, waive, or consent to the jurisdiction of any court, (B) any waiver by
Borrower of remedial and other rights (whether granted by common law or statutorily),
including, but not limited to, any rights to appraisement, valuation, stay, extension, or
exemption, any so-called moratorium laws, any right of redemption from a foreclosure sale,
and any right to a judicial hearing or notice of any action or process to enforce Lender's rights
under the Loan Documents, and (C) certain rights, remedies, waivers, and other provisions
afforded under the Loan Documents, including, without limitation, "self help"or extrajudicial
remedies, the unconditional right of a secured party to the appointment of a receiver without
notice or a hearing, the right of a secured party to enter into possession or control, or the
operation and management, of property, except by the judicial appointment of a receiver in
accordance with applicable law, or the right of a party acting as a receiver of property to
exercise any powers granted to a receiver pursuant to the Loan Documents which are in
excess of that authorized by an authorizing court or by applicable law.
C. The enforceability of the Loan Documents is subject to the effect of generally
applicable rules of law that: (i) limit the availability of a remedy under certain circumstances
where another remedy has been elected; (ii) that limit the right of a creditor to use force or
cause a breach of the peace in enforcing rights; or (iii) relate to the sale or disposition of
collateral or the requirements of a commercially reasonable sale.
D. We have not made an independent examination of the title to any collateral, and,
consequently, we express no opinion with respect thereto or the ownership thereof or with
respect to the perfection or the priority of the lien and security interests created thereby.
E. We express no opinion as to the enforceability of any prepayment charge secured
by the Loan Documents if and to the extent such charge is to become payable: (i) as the
result of the acceleration of the indebtedness secured by the Loan Documents; (ii) upon
application against such indebtedness of the proceeds of insurance paid as a consequence
of damage or destruction of any collateral for the Loan; (iii) upon application against such
indebtedness of the proceeds of the exercise, or threat of exercise, of the power of eminent
domain; or(iv)as a result of any tax law changes or new taxes becoming due or payable with
respect to the Loan Documents.
F. We express no opinion as to the validity, binding effect, or enforceability of any
provision in the Loan Documents which purports to: (i) permit Lender to sell or otherwise
dispose of any collateral except in compliance with the State UCC, applicable laws of the
United States of America, and other applicable State and local laws; (ii) provide for a security
interest in the proceeds of the personal property other than pursuant to Section 9.1-315 of
the State UCC; (iii) impose on Lender standards for the care of personal property in the
possession of Lender other than as provided in Section 9.1-207 of the State UCC; or (iv)
grant a security interest in collateral which may not be the subject of a security interest
therein pursuant to Article 9 of the State UCC.
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G. We express no opinion as to: (i)the validity or enforceability of any power of attorney
purportedly granted by the Loan Documents; (ii)the right to any interest in excess of statutory
interest on any amount to which Lender is entitled once a judgment of foreclosure has been
rendered; or (iii) any provision intending to secure future loan advances which is not in
compliance with IND. CODE § 32-29-1-10.
H. The enforceability of the Loan Documents is subject to the effect of generally
applicable rules of law that limit the enforceability of provisions which purport to release,
exculpate, or exempt any person from,or to require indemnification of, or contribution to, any
person for, liability: (i) for such person's own action or inaction, to the extent such action or
inaction involves negligence, gross negligence, recklessness,willful misconduct,or unlawful
conduct; (ii) under any federal or State securities laws or regulations; or (iii) to the extent
otherwise contrary to public policy.
The enforceability of the Loan Documents is subject to the effect of laws that govern
and afford judicial discretion regarding the determination of damages and entitlement to
attorneys' fees and other costs.
J. We express no opinion as to the enforceability of any provision in any Loan
Document which purports to: (i)change or waive the right to ajury trial, any rules of evidence,
trial rules, or statutory or constitutional rights; (ii)waive or fix any statute of limitations or the
method or quantum of proof to be applied in litigation or similar proceedings; or(iii) provide
for the enforcement of the Loan Documents in any court other than a State court in the county
in which the real estate encumbered thereby is located.
K. We express no opinion whatsoever as to any document, instrument, agreement, or
matter,or the content thereof,which is referenced or incorporated by reference into the Loan
Documents, except as necessary to define terms used in the Loan Documents.
L. The enforceability of the Loan Documents is subject to the effect of generally
applicable rules of law that may,where less than all of a contract may be unenforceable, limit
the enforceability of the balance of the contract to circumstances in which the unenforceable
portion is not an essential part of the agreed exchange.
M. The enforceability of the Loan Documents is subject to the effect of generally
applicable rules of law that may permit a party that has materially failed to render or offer
performance required by the contract to cure that failure, unless: (i) permitting a cure would
unreasonably hinder the aggrieved party from making substitute arrangements for
performance; or (ii) it was important in the circumstances to the aggrieved party that
performance occur by the date stated in the contract.
N. We express no opinion as to the enforceability of any provision of the Loan
Documents which purports to require that a waiver or modification of a provision of an
instrument or agreement be in writing or, in the absence of express language, to the
controlling document in the event of a conflict between or among Loan Documents.
0. We express only those opinions directly stated herein, and any opinions by
implication or inference are expressly disclaimed.
P. We have not reviewed and do not opine as to: (i) compliance of any property with
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applicable zoning, health, safety, building, environmental, land use, or subdivision laws,
ordinances, codes, rules, or regulations; (ii) ERISA laws, rules, or regulations; (iii)federal or
State taxation, banking, securities, or "blue sky laws", rules, or regulations; or (iv) zoning,
land use, subdivision, or other local, municipal, or county laws, regulations, or ordinances.
Q. We express no opinion as to the enforceability of any provision in any of the Loan
Documents that assigns or transfers any governmental permit or license. In addition, we
express no opinion as to whether Borrower has obtained the necessary governmental permits
or licenses necessary to construct and/or operate any property.
R. Any provision of the Loan Documents which purports to cover property to be
acquired in the future may not be valid as against the rights of intervening third parties.
S. We further advise you that, under IND. CODE §§ 34-54-3-1 through 34-54-3-3, any
Loan Document ("Additional Debt Instrument") that secures or includes a contract,
provision, agreement, or stipulation that gives to Lender the right or the power of attorney on
behalf of Borrower or any other party to an Additional Debt Instrument to: (i) appear in any
court and waive service of process in an action to enforce the payment of money claimed to
be due on the instrument; (ii)confess judgment for any portion of the indebtedness due under
the instrument other than by action by the court upon a hearing after due notice; or
(iii) release errors and rights of appeal from a judgment rendered for the matters described
above or consent to the issue of execution on the judgment for the matters described above;
is void. Further, under IND. CODE § 34-54-3-4, a State court will not issue an execution or
other process to aid or enforce the collection of any judgment or final decree rendered in
another jurisdiction, which judgment or final decree would be unenforceable by a State court
applying the above cited statutes, and,consequently,we render no opinion as to whether any
instrument which: (i) may now or hereafter be secured by the Loan Documents; and
(ii) includes any such provision will allow the Lender to enforce in the State any foregoing
judgment or decree rendered thereon.
T. To the extent the Loan Documents and/or any document or instrument evidencing
or governing the indebtedness and obligations secured thereby contain both: (i) a clause
limiting transfer; and (ii)a clause prohibiting prepaying indebtedness for certain periods; the
two clauses,taken together, may constitute an unreasonable restraint on alienation such that
a court in the State may find one or both of such clauses unenforceable.
The foregoing opinions are limited to the laws of the State. This opinion is given solely for the benefit
of Lender and may not be referred to, used for any other purpose, or relied upon by any party other than
Lender and its respective successors and/or assigns. This opinion is issued only with respect to the present
status of the law in the State, and we assume no obligation to update or supplement this opinion in respect
to subsequent changes in the law or future events. The opinions that are expressed herein are solely for your
benefit and your successors and assigns and may not be relied upon in any manner for any purpose by any
other party.
Very truly yours,
1-
' 'a.V S 4. \ JJ ( .
Wallack Somers & Haas, P.C.
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