Capital Improvement Board Pacers Basketball, LLC & Bankers Life Fieldhouse Agreement

1. Capital Improvement Board Pacers Basketball, LLC & Bankers Life Fieldhouse Agreement April 14, 2014

2. Why Extend the Current Agreement? • The extension locks in the premier tenants of Bankers Life Fieldhouse (“the Fieldhouse”) - The Indiana Pacers and Fever - for up to 13 years; that term coincides with final debt service payments due on the Fieldhouse in 2027. • The extension also removes the ability of the teams to leave Indiana due to economic losses. • A study by Indiana University Public Policy Institute in September 2013 demonstrates the teams are critical to continued vibrancy of the downtown and its continued economic development. • Specifically, the Fieldhouse and the teams contribute at least $208 million in annual economic impact and support more than 2,000 jobs. 1

3. Overview of the Extended Agreement • Term: The term is for 10 years (through the 2023/2024 basketball season) with three 1-year options through the end of the 2026-2027 basketball season. • Reimbursement of the Fieldhouse Facility Operating Expenses: • Pacers Basketball LLC will create a separate entity, Fieldhouse Management LLC (“the Manager”), that will manage and operate the Fieldhouse complex. The CIB will • assume and pay certain Fieldhouse operating expenses directly, including for off-site storage, general liability insurance, daily security, and utilities, at a total cost of approximately $3.7 million annually; and • provide an operating reimbursement payment to the Manager of approximately $7.1 million each year with a 3% escalator. • All such reimbursement revenues from the CIB to the Manager will be utilized for the explicit purpose of operating the building. • The Manager will provide quarterly revenue and expense information related to Fieldhouse operations at CIB meetings. 2

4. Overview of the Extended Agreement • Other Fieldhouse Capital Improvements & Replacement Items: • During the term of the extended agreement, the CIB will provide $26.5 million in “refresh” dollars for capital improvements to the Fieldhouse outside of Major Systems. • At least $20 million of the $26.5 million must be spent on the listing of items in Schedule J.These would include, e.g., improvements to the locker rooms, concession stands, seating, painting, LED boards, etc. • Additional items from the remaining $6.5 million would be mutually agreed to during the term. • The CIB will provide approximately $7 million in capital replacement items for Major Systems that need to be replaced (including carpet). It is anticipated that $3 million of these expenses (all budgeted) will be completed in 2014. • All capital dollars are subject to public procurement laws and MBE/WBE/VBE participation recommendations. 3

5. Overview of the Extended Agreement • The Scoreboard and Sound System: The scoreboard and sound system is considered a Major System under the Agreement. • The CIB will license the Fieldhouse scoreboard and sound system for 50% of the cost net of sales tax. These fees will be spread evenly across the term of the extended agreement. • The CIB will take title to the scoreboard and sound system at the end of the lease term. • Other provisions: • The previously agreed Market Square Arena advance amount and the operating loans under the bridge agreements will be amortized over the initial ten (10) year term of the extended agreement. • With limited exceptions, all home basketball games must be played in the Fieldhouse. 4

6. Overview of the Extended Agreement • Termination Rights and Payments: Herb Simon • Under the current agreement there is no provision for a process upon Herb Simon’s death. Under the extended agreement, • We understand that Mr. Simon’s heirs will take control of the team per his will and trust agreements. • If, following Mr. Simon’s death, the Pacers’ lender calls their current loans or those loans otherwise mature, the Pacers must try (for at least 60 days) to obtain replacement non-recourse financing and, if necessary, ask the CIB for assistance in doing so. • The CIB will have approximately fifteen (15) months to help the Pacers obtain such financing. • If such financing is not obtained, and the Pacers decide to sell the team, the City is entitled to a Right of First Offer. 5

7. Overview of the Extended Agreement • Termination Rights and Payments: Financial Losses • Under the current agreement the Pacers may terminate in the event of certain operating losses. • In that event, the CIB would be forced to subsidize these losses or trigger an early termination right where a complicated Termination Fee would be calculated based on the sales price of the team less many allowable deductions plus the last four operating loans that have not yet been amortized. • Under the extended agreement • The agreement cannot be terminated due to Net Cash Flow Losses and the CIB is not required to subsidize such losses. • The Pacers have agreed to specific performance, which means if the CIB honors the extended agreement, the teams will continue to play in the Fieldhouse. 6

8. Questions from the Board Motions 7