(^ CITY OF WESTLAKE, OHIO ORDINANCE NO. 2012-101 0&* AN ORDINANCE AUTHORIZING THE MAYOR TO ENTER INTO A FIRST AMENDED AND RESTATED CITY DEVELOPMENT AGREEMENT AS TO THE AMERICAN GREETINGS PROJECT, AND DECLARING AN EMERGENCY. WHEREAS, American Greetings is building a new corporate headquarters facility in the City of Westlake at Crocker Park; and WHEREAS, by and through Ordinance No. 2011-147 American Greetings Corporation, Crocker Park LLC and the City of Westlake entered into a Development Agreement; and WHEREAS, the parties in conjunction with Crocker Park Phase III, LLC, Crocker Park Phase III Residential, LLC, CP Land, LLC, Block K, LLC, CD Block K Hotel, LLC, CD Block KRetail, LLC, CD Block K Garage, LLC, and Crocker Park Management, LLC desire to enter into a First Amended and Restated City Development Agreement as to the American Greetings project and related projects. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF WESTLAKE, COUNTY OFCUYAHOGA AND STATE OF OHIO: Section 1: That the Mayor be and he hereby is authorized and directed to enter into a First Amended and Restated City Development Agreement with Crocker Park, LLC, Crocker Park Phase III, LLC, Crocker Park Phase III Residential, LLC, CP Land, LLC, Block K, LLC, CD Block KHotel, LLC, CD Block K Retail, LLC, CD Block K Garage, LLC, Crocker Park Management, LLC and American Greetings Corporation as to the American Greetings development in the City of Westlake substantially in the form attached hereto as Exhibit "A" and incorporated herein by this reference, together with such revisions as are approved by the Mayor and Director ofLaw and as are not materially adverse to the City, which approval shall be conclusively evidenced by the signing of the First Amended and Restated Development Agreement by the Mayor and the approval thereof by the Director of Law. Section 2: That this Council hereby authorizes the Mayor or other appropriate officers of the City, including, but not limited to, the Director of Finance and the Assistant Director of Finance, to take such actions as are necessary or appropriate to implement the transactions contemplated by this Ordinance. The Mayor, or any other official, as appropriate, including, but not limited to, the Director of Finance and the Assistant Director of Finance, are each authorized and directed to sign any other documents, instruments or certificates and to take such actions as are necessary or appropriate to consummate or implement the actions described herein or contemplated by this Ordinance. Section 3: That it is found and determined that all formal actions of this Council concerning and relating to this legislation were adopted in an open meeting of this Council and that all deliberations of this Council and any of its committees that resulted in such formal action were in meetings open to
Transcript
(^ CITY OF WESTLAKE, OHIOORDINANCE NO. 2012-101
0&*
AN ORDINANCE AUTHORIZING THE MAYOR TOENTER INTO A FIRST AMENDED AND RESTATEDCITY DEVELOPMENT AGREEMENT AS TO THEAMERICAN GREETINGS PROJECT, ANDDECLARING AN EMERGENCY.
WHEREAS, American Greetings isbuilding a new corporate headquarters facility in the City ofWestlake at Crocker Park; and
WHEREAS, by and through Ordinance No. 2011-147 American Greetings Corporation,Crocker Park LLC and the City of Westlake entered into a Development Agreement; and
WHEREAS, the parties in conjunction with Crocker Park Phase III, LLC, Crocker Park PhaseIII Residential, LLC, CP Land, LLC, Block K, LLC, CD Block KHotel, LLC, CD Block KRetail, LLC,CD Block KGarage, LLC, and Crocker Park Management, LLC desire to enter into a First Amendedand Restated City Development Agreement as to the American Greetings project and related projects.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OFWESTLAKE, COUNTY OFCUYAHOGA ANDSTATE OFOHIO:
Section 1: That the Mayor be and he hereby isauthorized and directed to enter into a FirstAmended and Restated City Development Agreement with Crocker Park, LLC, Crocker Park Phase III,LLC, Crocker Park Phase III Residential, LLC, CP Land, LLC, Block K, LLC, CD Block KHotel, LLC,CD Block KRetail, LLC, CD Block KGarage, LLC, Crocker Park Management, LLC and AmericanGreetings Corporation as to the American Greetings development in the City of Westlake substantiallyinthe form attached hereto as Exhibit "A" and incorporated herein by this reference, together with suchrevisions as are approved by the Mayor and Director ofLaw and as are not materially adverse to theCity, which approval shall be conclusively evidenced by the signing ofthe First Amended and RestatedDevelopment Agreement by the Mayor and the approval thereofby the Director ofLaw.
Section 2: That this Council hereby authorizes the Mayor or other appropriate officers of theCity, including, but not limited to, the Director of Finance and the Assistant Director of Finance, to takesuch actions as are necessary or appropriate to implement the transactions contemplated by thisOrdinance. The Mayor, or any other official, as appropriate, including, but not limited to, the Director ofFinance and the Assistant Director of Finance, are each authorized and directed to sign any otherdocuments, instruments or certificates and to take such actions as are necessary or appropriate toconsummate orimplement the actions described herein or contemplated by this Ordinance.
Section 3: That it is found and determined that all formal actions of this Council concerningand relating to this legislation were adopted in an open meeting ofthis Council and that all deliberationsof this Council and any of its committees that resulted in such formal action were in meetings open to
CITY OF WESTLAKE, OHIO
ORDINANCE NO. 2012-101
PAGE 2
the public in compliance with all legal requirements including Section 10, Article XI of the Charter ofthe City of Westlake.
Section 4: That this legislation is hereby declared to be an emergency measure immediatelynecessary for the preservation of the public health, safety and welfare, and for the further reason that it isimmediately necessary to amend and restate the parameters of the American Greetings DevelopmentAgreement so that construction may commence without delay in order to meet project scheduledeadlines and create jobs immediately, and further provided it receives the affirmative vote of two-thirdsof all members elected to Council, it shall take effect and be in force immediately upon its passage andapproval by the Mayor.
Passed: Z/ C? /|4
Presented to the Mayor: J / "7 / 14
ATTEST:
Denise L. Rosenbaum, Clerk of Council
I, Denise L. Rosenbaum, Clerk of Council of the City of Westlake dohereby certify that Ordinance/Resolution no. 2o\2-\0\
adopt?1 „i AZtG'[A was duly P°sted on-2/l4/)4 and remajne(j poste[j for aperjodof 15 days thereafter in not less than 2of the most public places inthe City as determined by the Charter of said City.
Michael F. Killeen
President of Council
Approved: 2/14/14
Dennis M. Clough, Mayor
ORDINANCE NO. 2012-101 EXHIBIT "A" Jones Day Draft of 2/5/14
FIRST AMENDED AND RESTATED CITY DEVELOPMENT AGREEMENT
By and Among
CITY OF WESTLAKE, OHIO
CROCKER PARK, LLC
CROCKER PARK PHASE III, LLC
CROCKER PARK MANAGEMENT, LLC
CROCKER PARK PHASE III RESIDENTIAL, LLC
CP LAND, LLC
BLOCK K, LLC
CD BLOCK K HOTEL, LLC
CD BLOCK K RETAIL, LLC
CD BLOCK K GARAGE, LLC
and
AMERICAN GREETINGS CORPORATION
Dated February , 2014
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TABLE OF CONTENTS
Page ^
DEFINITIONS 1
RECITALS 9
1. Incorporation ofRecitals 13
2. Representations 13
3. Construction Obligations 26
4. The City's Agreement to Issue Bonds to Fund Public Improvements 27
5. Construction by City ofPublic Improvements 35
6. Payment of Debt Service on Bonds 39
7. School District Compensation 43
8. Ownership and Maintenance ofPublic Improvements 45
9. Use ofParking Facilities 47
10. Municipal Tax Credit for AG 48
11. City Approvals 48
12. Market Square Project 48 ^^
13. Clemens Road Improvements 49
14. Incentive for Block K Development 49
15. Additional Agreements and Covenants 49
16. Events of Default and Remedies 54
17. Term ofAgreement 58
18. Notices 58
19. Extent ofCovenants: No Personal Liability 59
20. Binding Effect 60
21. Amendments and Supplements 60
22. Execution Counterparts 60
23. Severability 60
24. Continuing Disclosure 60
25. Limitation ofRights 61
26. Governing Law 61
27. Related Agreements 61
28. Nondiscriminatory Hiring Policy 61 '^
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TABLE OF CONTENTS
(continued)f^ Page
29. 629 Grant Compliance and Indemnification 61
30. SIB Loan 62
31. Inconsistency between or among Transaction Documents 63
32. Joint and Several Liability 63
33. No Pledge ofTax Revenues 63
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Jones Day Draft of2/5/14
FIRST AMENDED AND RESTATED CITY DEVELOPMENT AGREEMENT
THIS FIRST AMENDED AND RESTATED CITY DEVELOPMENT
AGREEMENT (this "Agreement") is made effective as of this day of , 2014, byand among the CITY OF WESTLAKE, OHIO, a municipal corporation organized and existingunder the laws of the State of Ohio (the "City"), CROCKER PARK, LLC, an Ohio limitedliability company, with offices located at Stark Enterprises, 1350 W. 3rd Street, Cleveland, OH44113, in its role as both a developer and as a construction agent ("CP"), CROCKER PARKPHASE III, LLC, an Ohio limited liability company, with offices located at Stark Enterprises,1350 W. 3rd Street, Cleveland, OH 44113 ("CPPm"), CROCKER PARK MANAGEMENT,LLC, an Ohio limited liability company, with offices located at Stark Enterprises, 1350 W. 3rdStreet, Cleveland, OH 44113 ("CPM"), CROCKER PARK PHASE III RESIDENTIAL,LLC, an Ohio limited liability company, with offices located at Stark Enterprises, 1350 W. 3rdStreet, Cleveland, OH 44113 ("CPR"), CP LAND, LLC, an Ohio limited liability company,with offices at Stark Enterprises, 1350 W. 3rd Street, Cleveland, Ohio 44113 ("Land"),BLOCK K, LLC, an Ohio limited liability company, with offices at Stark Enterprises, 1350 W.3rd Street, Cleveland, Ohio 44113 (the "BK Developer"), CD BLOCK K HOTEL, LLC, anOhio limited liability company with offices at Stark Enterprises, 1350 W. 3rd Street, Cleveland,Ohio 44113 ("CD Hotel"), CD BLOCK K RETAIL, LLC, an Ohio limited liability company,with offices at Stark Enterprises, 1350 W. 3rd Street, Cleveland, Ohio 44113 ("CD Retail"), CDBLOCK K GARAGE, LLC, an Ohio limited liability company, with offices at StarkEnterprises, 1350 W. 3rd Street, Cleveland, Ohio 44113 ("CD Garage"), and AMERICANGREETINGS CORPORATION, an Ohio corporation, with offices located at One American ^Road, Brooklyn, OH 44144 ("AG").
DEFINITIONS
In addition to the words and terms elsewhere defined in this Agreement, unless thecontext or use clearly indicates another or different meaning or intent, the following words shallhave the meanings set forth herein:
"Administrative Expenses" includes the fees and reasonable expenses of the BondTrustee, the expenses of the City in connection with continuing disclosure obligations for theBonds (including the cost of any continuing disclosure agent), the annual fee charged by a RatingService, if any, amounts required pursuant to the Indenture to be deposited in the Rebate Fundcreated thereunder, the fees and reasonable expenses of the Inspector, and the costs of rebatecalculations or legal opinions, amounts required to enforce any provisions of the DisbursingAgreement, this Agreement, and/or the TIF Declarations, any costs incurred by the DisbursingAgent in connection with the Disbursing Agreement, and any amounts other than Bond ServiceCharges required to be paid in connection with the Bonds pursuant to the Disbursing Agreementor the Indenture.
"AG Affiliate" means an entity controlled by or under common control with AG.
"AG Assignment Conditions" has the meaning set forth in Section 15(g).
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"AG Building" means a new corporate headquarters building, containing, in the firstf* phase, approximately 600,000 square feet ofoffice space, located on aportion of the AG Land.
"AG Building Parcel" means the parcels of land on which the AG Building is located, asshown on the Proposed Plan.
"AG Construction Loan" has the meaning set forth in Section 4(b)(i).
"AG Ground Lease" means the ground lease from AG to the City of the AG ParkingParcel.
"AG Infrastructure Budget" means a detailed budget for construction of the AG PublicInfrastructure and Private AG Portion approved by AG and the City.
"AG Land" has the meaning set forth in Recital C.
"AG Parking Parcel" means the land on which the H Garage will be located as shown onthe Proposed Plan.
"AG's Private Contribution" has the meaning set forth in Section 4(d).
"AG Private Major Change Order" is a change order involving an alteration to the PrivateAG Portion that increases the cost by more than $2,500. An AG Private Major Change Orderdoes not include a change in the means and methods ofconstruction if such change in means and
|^ methods results in acost increase of$2,500 or less. Notwithstanding the foregoing, in the eventthat multiple change orders of $2,500 or less aggregate more than $25,000, then all changeorders thereafter shall be deemed to be AG Private Major Change Orders.
"AG Project" means the AG Building, the AG Retail and the Private AG Portion.
"AG Public Contribution" has the meaning set forth in Section 4(f).
"AG Public Infrastructure" means the portion of the Required Public Infrastructure whichis intended to be built under, on or above the AG Land.
"AG Public Major Change Order" is a change order involving an alteration to the AGPublic Infrastructure that increases the cost by more than $2,500. An AG Public Major ChangeOrder does not include a change in the means and methods of construction if such change inmeans and methods results in a cost increase of $2,500 or less. In the event that multiple changeorders of $2,500 or less aggregate more than $25,000, then all change orders thereafter shall bedeemed to be AG Public Major Change Orders.
"AG Retail" means, collectively, the AG Retail East and the AG Retail West.
"AG Retail East" means the approximately 59,000 square feet of retail space on the firstfloor below the AG Building as shown on the Proposed Plan.
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"AG Retail Parcels" means the parcels of land on which the AG Retail is located, asshown on the Proposed Plan.
"AG Retail West" means one building containing between approximately 28,600 and57,200 square feet of retail space on the AG Land on the south side of the future AmericanBoulevard to the west of the AG Building in the location shown on the Proposed Plan.
"Block K Cost Budget" means the cost budget for the Block K Public Improvements.
"Block K Deficiency" means any deficiency between the Block K Guaranteed MaximumPrice and the actual cost ofthe Block K Public Improvements.
"Block K Development" has the meaning set forth in Recital J.
"Block K Development Construction Loan" has the meaning set forth in Section 4(b)(v).
"Block K Disbursement Conditions" has the meaning set forth in Section 4(c).
"Block K Guaranteed Maximum Price" means the price set forth in the ConstructionAgreement for the construction ofthe Block K Public Improvements.
"Block K Owners" means, collectively, CD Hotel, CD Retail and CD Garage.
"Block K Parcels" means the real property owned by the Block K Owners and theirsuccessors in interest. *1
"Block K PDP" means the Preliminary Development Plan, which was approved by theCity Council of the City on October 21, 2013, which has been incorporated into the ProposedPlan attached hereto as Exhibit A.
"Block K Projects" means, collectively, the Block K Development and the Block KPublic Improvements.
"Block K Public Improvements" has the meaning set forth in Recital K.
"Block K Public Improvements Subaccount" means the subaccount established within theCity Project Fund Account of the Project Fund pursuant to Section 5.01(a) of the Indenture forthe purpose of holding the Bond proceeds which are to be used in connection with the Block KPublic Improvements.
"Block K Service Payments" means service payments in lieu of taxes made by owners ofthe Block K Parcels as provided under R.C. 5709.42 and Section 6(e) hereof.
"Block K Shortfall Payments" means Shortfall Payments made by the Block K Ownersor their successors as owners ofthe Block K Parcels.
"Bond Trustee" means The Huntington National Bank, as trustee under the Indenture.
"Bonds" has the meaning set forth in Recital I.
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"CA" means the entity from time to time acting as Construction Agent for the City and( AG pursuant to the Construction Agency Agreement, initially CP.
"OF" means Cleveland International Fund.
"CIF Portion" has the meaning set forth in Section 4(c).
"City Project Fund Account" means the City Project Fund Account ofthe Project Fund(including the Contingency Subaccount and the Block K Improvements Subaccount therein)established under the Indenture for the purpose ofholding Bond proceeds which are to be used inconnection with construction ofthe Required Public Infrastructure.
"Closing" means the date ofdelivery ofthe Bonds to the original purchaser thereof.
"CMR" means the Construction Manager at Risk under the Construction Agreement.
"Commercial Rental Apartment Project" means the commercial rental apartment spaceabove the CP Retail, containing approximately 316 units ofcommercial rental apartment space.
"Commercial Rental Apartment Construction Loan" has the meaning set forth inSection 4(b)(iv).
"Compensation Agreement" means the Compensation Agreement, dated as ofDecember 28, 2011, by and between the City and the School District pursuant to which the City
f^ has agreed to pay the School District's Share based on Service Payments and Shortfall Paymentsreceived from parcels within the TIF District.
"Construction Agency Agreement" means the First Amended and Restated ConstructionAgency Agreement dated November 22, 2013 by and among the City, CP, as ConstructionAgent, Land and AG.
"Construction Agreement"means a Guaranteed Maximum Price Contract with the CMR.
"Continuing Disclosure Agreements" has the meaning set forth in Section 24.
"Cost Budget" means a detailed budget for construction of the Public Improvements,including the Phase III Cost Budget and the Block K Cost Budget.
"County" means Cuyahoga County, Ohio.
"CP Affiliate" means an entity controlled by or under common control with CP, CPPIII,CPR, Land, CPM, BK Developer or the Block K Owners.
"CP Allocation" has themeaning set forth in Section 9(b).
"CP Assignment Conditions" has the meaning set forth in Section 15(f).
^\ "CP Ground Lease" means the ground leases from Land to the City ofthe land on whichthe FParking Garage and the G Parking Garage willbe located.
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"CP Land" means a 10.39 acre parcel of land in the Development as shown on theProposed Plan.
"CPPIII Construction Loan" has the meaning set forth in Section 4(b)(ii).
"CPPIII Disbursement Conditions" has the meaning set forth in Section 4(c).
"CP Private Contribution" has the meaning set forth in Section 4(f).
"CP Project" means the Infill Buildings, the Extension Buildings and the CommercialRental Apartment Project, and, if constructed, the Private CP Portion.
"CP Public Contribution" has the meaning set forth in Section 4(f).
"CP Public Infrastructure" means the portion of the Required Public Infrastructure whichis intended to be built under, on or above the CP Land.
"CP Retail" means, collectively, the Extension Retail and the Infill Retail.
"CPR Disbursement Conditions" has the meaning set forth in Section 4(c).
"Debt Service" means principal of and interest on the Bonds and AdministrativeExpenses.
"Deficiency" means, asthe context mayrequire, a BlockK Deficiency and/or a Phase III ^Deficiency.
"Development" has the meaning set forth in Recital B.
"Disbursement Conditions" means, collectively, the Block K Disbursement Conditions,the CPPIII Disbursement Conditions and the CPR Disbursement Conditions.
"Disbursing Agent" means the Disbursing Agent under the Disbursing Agreement.
"Disbursing Agreement" means the Disbursing and Payment Agreement, to be dated asof even date with the Indenture, by and among the City, CP, AG, CPPIII, CPR, Land, the BKDeveloper, CD Hotel, CD Retail, CD Garage and The Huntington National Bank, as DisbursingAgent.
"Event ofDefault" has the meaning set forth in Section 16(a).
"Extension Buildings" means, collectively, the Extension Building East and theExtension Building West.
"Extension Building East" means one building on the AG Land on the north side of thefuture American Boulevard and on the east side of Main Street in the location shown on the
Proposed Plan.
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"Extension Building Parcels" means the parcels of land on which the Extension Buildingsare located, as shown on the Proposed Plan.
"Extension Building West" means one building on the CP Land on the north side of thefuture American Boulevard and on the west side of Main Street, in the location shown on theProposed Plan.
"Extension Retail" has the meaning set forth in Recital E.
"F Parking Garage" has the meaning set forth in Recital H.
"Final Completion Date" means, with respect to any ofthe Public Improvements, the dateon which the City, the Bond Trustee and the Disbursing Agent and, to the extent provided in theConstruction Agency Agreement and in the Disbursing Agreement, AG, shall have approved theFinal Completion Certificate with respect to that Project or portion thereof, in accordance withthe Construction Agency Agreement and all payments shall have been made from the ProjectFund for such Project.
"Force Majeure" means, without limitation, acts of God; strikes, lockouts or otherindustrial disturbances; acts of public enemies; orders or restraints ofany kind of the governmentof the United States of America or of the State or any of their departments, agencies, politicalsubdivisions or officials, or any civil or military authority; insurrections; civil disturbances; riots;epidemics; landslides; lightning; earthquakes; fires; hurricanes; tornadoes; storms; droughts;floods; arrests; restraint of government and people; explosions; breakage, malfunction oraccident to facilities, machinery, transmission pipes or canals; partial or entire failure of utilitiesserving the Project; shortages of labor, materials, supplies or transportation; delays caused byCity or any governmental authority with respect to permitting, zoning or similar issues; or anycause, circumstance or event not reasonably within the control of CP, CPR, CPPIII, CPM, Land,BK Developer, any Block K Owner or AG; provided that inability to obtain necessary financingshall not, by itself, constitute an event ofForce Majeure.
"G Parking Garage" has the meaning set forth in Recital H.
"Ground Leases" means the CP Ground Leases and the AG Ground Lease.
"H Parking Garage" has the meaning set forth in Recital H.
"Improvements" has the meaning set forth in Section 5709.40(A) of the Ohio RevisedCode.
"Indenture" means the Trust Indenture dated as of the first day of the month in which theClosing will occur entered into by the City and the Bond Trustee, pursuant to which the Bondsare issued and secured.
"Infill Buildings" means the buildings housing the Infill Retail.
"Infill Parcels" means the parcels of land on which the Infill Buildings are located, asshown on the Proposed Plan.
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"Infill Parking" means the F Parking Garage and the G Parking Garage.
"Infill Retail" means the approximately 45,505 square feet of first floor retail space onboth sides of Main Street north ofthe Extension Buildings as shown on the Proposed Plan.
"Initial CDA" has the meaning set forth in Recital A.
"IRS Rules" has the meaning set forth in Recital I.
"Inspector" has the meaning set forth in Section 5(b).
"Major Change Order" has the meaning set forth in Section 5(c)(i).
"Management Agreement" means the Public Improvement Management andMaintenance Agreement to be entered into among CPM, CPPIII, CPR, Land, the Block KOwners, AG and the City.
"Manager" means CPM and any successor manager under the Management Agreement.
"Master Schedule" means the schedule attached to this Agreement as Exhibit C.
"ODOT" means the Ohio Department ofTransportation or any successor agency thereto.
"Overall Private Value" has the meaning set forth in Section 7(j).
"Parking Incentive" has the meaning set forth in Section 9(b).
"Parking Incentive Requirements" means that AG shall maintain its corporateheadquartersand an annual payroll ofno less than $132,000,000 at the AG Project.
"Phase 1 Owners" means the owners ofthe Phase 1 Parcels.
"Phase 1 Parcels" means the real property located within TIF District Phase 1.
"Phase III Cost Budget" means the cost budget for the Required Public Improvements.
"Phase III Deficiency" means any deficiency between the Phase III GuaranteedMaximum Price and the actual cost ofthe Required Public Infrastructure.
"Phase III Guaranteed Maximum Price" means the price set forth in the ConstructionAgreement for the construction ofthe Required Public Infrastructure.
"Phase III Project" or "Phase III Projects" means the Required Public Infrastructure, theAG Project and the CP Project.
"Phase III Project Shortfall Payments" means Shortfall Payments made by the Phase 1Owners.
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"Phase HI Service Payments" means the service payments in lieu of taxes made by the{ Phase 1 Owners as provided under R.C. 5709.42 and Section 6(c) hereof.
"Private AG Portion" has the meaning set forth in Recital H.
"Private CP Portion" has the meaning set forth in Recital H.
"Private CP PortionConstruction Loan" has the meaning set forth in Section 4(b)(iii).
"Project Fund" means the Project Fund to be established under the Indenture.
"Project Management Fund" means the Project Management Fund to be establishedunder the Indenture.
"Projects"means, collectively, the Phase III Projects and the Block K Project.
"Proposed Plan" means the Proposed Plan attached to this Agreement as Exhibit A.
"Public Contributions" means, collectively, the AG Public Contribution and the CPPublic Contribution.
"Public H Garage" means the H Garage other than the Private AG Portion.
"Public Improvements" means, collectively, the Required Public Infrastructure and the/^ Block K Public Improvements.
"Public Infill Parking" means the Infill Parking other than any Private CP Portion.
"Public ParkingFacilities" means the Public H Garage and the Public Infill Parking.
"REA" means collectively, the Declaration of Reciprocal Easements, Covenants, andRestrictions by CP dated , 2014, encumbering parcels on which the CP Project willbe constructed, and the Amended and Restated Construction and Reciprocal EasementAgreement, dated , 2014 by and between CP and Crocker Park Delaware, LLC.
"Required Private Property Casualty Coverage" has the meaning set forth inSection 15(i).
"Required Public Infrastructure" means the Public Parking Facilities and the other publicimprovements described in Recital H.
"Responsible Party" means the party responsible for creating an Event of Default.
"School District" means the Westlake City School District.
"School District Commitments" has the meaning set forth in Section 7.
.p^ "School District's Share" has the meaning set forth in Section 6(a).
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"Service Payments" has the meaning set forth in Recital I and includes Block K ServicePayments and Phase III Service Payments.
"SIB Loan" means the loan which has been made from the State Infrastructure Bank of
the Ohio Department of Transportation to the City.
"Shortfall Payments" has the meaning set forth in Recital I and includes Block KShortfall Payments and Phase III Project Shortfall Payments.
"Shortfall Payment Schedule" means the schedule attached to this Agreement asExhibit D.
"629 Grant Agreement" means the Roadwork Development Grant Agreement betweenthe State and the City.
"State" means the State of Ohio.
"10% Reserve" has the meaning set forth in Section 9(b).
"TIF Declaration" means each of the Declarations Of Covenants And Conditions
Relative To Service Payments In Lieu Of Taxes entered into by AG, CPPIII, CPR, Land andeach of the Block K Owners with respect to all parcels owned by such entities, other than theparcels which are intended to be conveyed to the City in fee simple.
"TIF District" has the meaning set forth in Recital L. i
"TIF District Phase 1" has the meaning set forth in Recital L.
"TIF District Phase 2" has the meaning set forth in Recital L.
"TIF Ordinance" means Ordinance No. 2011-113, passed by the Council of the City onDecember 23,2011.
"Transaction Documents" means all documents entered into in connection with this
Agreement or the issuance of the Bonds, including but not limited to, the Construction AgencyAgreement, the Disbursing Agreement, the Indenture, the TIF Declarations, the ManagementAgreement, the Ground Leases, the Tax Credit Agreement and this Agreement.
RECITALS
A. The City, CP and AG entered into a City Development Agreement (the "InitialCDA") effective as of December 19, 2011, that established the initial terms in respect of theissuance and delivery of the Bonds (hereinafter defined) and related matters, with the expressunderstanding that the Initial CDA would be amended by the parties to reflect the plansapproved by the City through its applicable approval process for the AG Project, the CP Projectand the Required Public Infrastructure (all as hereinafter defined), to reflect the parcels to becreated by the revised plat which will be recorded in accordance with the final plans, to reflectthe final terms and conditions of the Bonds, and such other amendments deemed appropriate by 1
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the parties. Since the execution of the Initial CDA, CPPIII, CPR, Land, BK Developer, CDRetail, CD Hotel and CD Garage have been formed to participate in the transactionscontemplated by this Agreement, and it has been determined that CPM will be the Manager (asdefined below) under the Management Agreement (as defined below). This Agreementamends, restates and supersedes the Initial CDA.
B. This Agreement establishes the terms under which (i) AG will build, or cause tobe built, a new corporate headquarters facility in the City at the south end of the retail,commercial and residential development located in the City and known as "Crocker Park" (allof Crocker Park being hereinafter referred to as the "Development"), (ii) CPPIII will build newretail space within the Development, (iii) CPR will build commercial rental apartment spacewithin the Development, all as shown on the Proposed Plan, which Proposed Plan is similar to,and consistent with, the Revised Preliminary Development Plan recommended for approval bythe City's Planning Commission on August 27, 2012, and approved by City Council onSeptember 6, 2012, as amended and approved by City Council on September 19, 2013; and onOctober 21, 2013, respectively, and (iv) BK Developer and the BK Owners will build theBlock K Development. This Agreement also confirms the terms under which the City isgranting certain incentives to cause the foregoing to happen, including, without limitation,issuing bonds payable from Service Payments and Shortfall Payments (each as defined below)to finance a portion of the costs of public infrastructure improvements necessary for the AGProject and the CP Project, all as more fully described below.
C. CP and AG have entered into a purchase agreement pursuant to which CP hasagreed to sell to AG, or an affiliate of AG, and AG, or an affiliate of AG, has agreed to acquireapproximately 14.48 acres of land (the "AG Land") in the Development as shown on theProposed Plan.
D. AG will construct or cause the construction of the AG Building. AG intends tolease a portion of the AG Land to an affiliate, H L & L Property Company, a Delawarecorporation ("Propco"), which will own, finance and construct or cause to be constructed theAG Building on the leased AG Land and lease the AG Building to AG. AG will also constructor cause the construction of the AG Retail and the Private AG Portion. The AG Building isanticipated to have an estimated tax value after occupancy of no less than $99,900,000. AGanticipates that approximately 1,340 employees will be employed in the AG Building, whichwill generate in excess of $132,000,000 in Payroll, as defined in that certain Tax CreditAgreement between the City and AG dated of even date herewith. The AG Retail is anticipatedto have an estimated value after occupancy ofno less than approximately $15,000,000.
E. CPPIII will construct or cause the construction of, the Extension Buildings,containing a total of approximately 64,203 square feet of retail space (the "Extension Retail"),with approximately 27,053 square feet of retail in Extension Building East and approximately37,150 square feet in Extension Building West.
F. CPPIII will construct or cause the construction of the Infill Retail. CPPIII will
build the Infill Buildings and the Extension Building West, on part of the CP Land, which iscontiguous to the AG Land. The Infill Buildings and the Extension Buildings are anticipated tohave an estimated collective value after occupancy of no less than approximately $29,100,000.
CLI-2144412vll 10
(It is anticipated that the tenants in the CP Retail will employ approximately 210 people (basedon industry averages for retail and service uses) with aggregate annual taxable wages andbenefits of approximately $6,500,000 (calculated using an average hourly wage, includingbenefits, of$15.00 per hour).
G. CPR will construct or cause the construction of the Commercial Rental
Apartment Project. The Commercial Rental Apartment Project is included in TIF District PhaseI (as hereinafter defined). It is anticipated that the value of the Commercial Rental Project afterstabilization will be no less than approximately $37,200,000.
H. The development and use of the AG Project and the CP Project require theconstruction of (i) a parking garage on the AG Land accommodating approximately 1,374parking spaces (the "H Parking Garage"), (ii) the parking structure identified as "G" (the"G Parking Garage") on the Proposed Plan accommodating approximately 415 parkingspaces, (iii) the parking structure identified as "F" (the "F Parking Garage") on the ProposedPlan accommodating approximately 765 parking spaces, and (iv) South Corporate Avenue,American Boulevard, Main Street south of Market Street, Vine Street south of Market Streetand all sidewalks, driveways, access ways, utility lines, and other amenities shown on theProposed Plan and consistent with those amenities located in the currently-developed portion ofthe Development. A portion of the H Parking Garage, comprising approximately 224 spaces,will be financed by AG (the "Private AG Portion") as provided below. A portion of theF Parking Garage and/or the G Parking Garage, may be financed by CP (the "Private CPPortion"). The Required Public Infrastructure will be publicly owned and financed. For anyminor portions of the Required Public Infrastructure that may encroach on the AG Land or theCP Land (e.g., small portions of public sidewalks that may extend onto private property toensure that public sidewalks abut buildings), easements will be recorded, by plat or otherwise,to ensure that the Required Public Infrastructure is public infrastructure. The City, CP, Landand AG have entered into the Construction Agency Agreement pursuant to which CP, asConstruction Agent, will construct the Required Public Infrastructure, the Private AG Portionand the Private CP Portion, if any.
I. In order to induce AG to relocate its headquarters to the City, the City hasoffered AG, CP, CPR and CPPIII various economic incentives, including (1) an agreement toissue bonds in a principal amount not to exceed $55,000,000 (the "Bonds") payable fromservice payments in lieu of taxes required pursuant to R.C. 5709.40 et seq. ("ServicePayments") and, if necessary, minimum service payment obligations required pursuant to R.C.5709.91 ("Shortfall Payments") and secured by non-tax revenues which Bonds will be issuedin an amount sufficient to fund a portion of the cost of the construction by the City (actingthough the Construction Agent) of the Public Improvements, (2) an agreement to grant AG afifteen (15) year municipal income tax credit equal to 50% of 1% (i.e., 50% ofthe City's currentunrestricted portion of the annual municipal income taxes paid to the City, not subject to anincrease in the event of an increase in the City's municipal income tax rate or in the City'sunrestricted portion of the municipal income tax) against the municipal income to be generatedby AG's employees (i.e., not including independent contractors) at the AG Building, (3) anagreement to utilize a "629 Grant" from the State in the amount of $1 million and to spend thatamount on the cost of the portions of the AG Public Infrastructure which are consistent with theuse of 629 Grant Funds, (4) an agreement to obtain a SIB Loan the proceeds of which will be
CLI-2144412vll 11
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used for the Required Public Infrastructure, with the debt service on the SIB Loan payable fromService Payments and Shortfall Payments (after paymentof debt service on the Bonds), and (5)an agreement to provide public parking to meet the needs of AG, its employees, contractors andinvitees in a manner consistent with the private business use provisions of the Internal RevenueCode of 1986 and regulations promulgated thereunder ("IRS Rules").
J. Contemporaneously with the AG Project and the CP Project, BK Developer, anaffiliate of CP, intends to develop a hotel and retail development (the "Block K Development")on approximately 6.69 acres contiguous to, and north of the Development near the corner ofDetroit Road and Crocker Road in the City. The Block K Development will consist of anapproximately 112-room limited service hotel operating as a Hyatt Place Hotel, to be owned byCD Hotel, a subsidiary of BK Developer, with an estimated value after occupancy ofapproximately $9,800,000; approximately 33,460 square feet of retail space in three separatebuildings, which will be owned by CD Retail, a subsidiary of BK Developer, with an estimatedvalue after occupancy of approximately $8,100,000; and a privately-owned parking garageaccommodating approximately 386 cars on five floors, which will be owned by CD Garage,also a subsidiary of BK Developer, with an estimated value after occupancy of approximately$4,600,000. The Block K Development and the Block K Public Improvements are depicted onthe Block KPDP.
K. The "Block K Public Improvements" consist of underground utilities,driveways, surface parking areas, sidewalks and landscape improvements in the area known asUnion Square. The City has agreed to finance the Block K Public Improvements with a portionof the proceeds of the Bonds, provided that the Block K Owners shall be obligated to payService Payments and, if necessary, Shortfall Payments to pay a portion of the debt service onthe Bonds. CP shall serve as the City's Construction Agent with respect to the construction ofthe Block K Public Improvements. The Construction Agent shall guaranty completion ofconstruction of the Block K Public Improvements for an amount not to exceed the budgetedamount set forth in the Cost Budget.
L. The "TIF District," which includes both "TIF District Phase 1" and "TIFDistrict Phase 2," is as shown on Exhibit B hereto.
M. CPM, an affiliate of CP, CPR, CPPIII, and Land, currently manages andmaintains public infrastructure within the Development, and in connection with the City'sagreement to issue the Bonds, has agreed to manage and maintain the Required PublicInfrastructure and the Block K Public Improvements as agent of the City and has agreed tomanage and maintain the Private AG Portion as agent of AG and the Private CP Portion, if any,as agent ofLand.
N. The purpose of this Agreement is to set forth the respective obligations of theparties hereto in connection with the AG Project, the CP Project, the Required PublicInfrastructure, the Block K Development and the Block K Public Improvements, so that all ofthe foregoing may be constructed, financed, managed and maintained in a coordinated mannerfor the benefit of all the parties.
CLI-2144412vll 12
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency ofwhich arehereby acknowledged, the parties hereto hereby agree as follows:
1. Incorporation of Recitals. The Recitals hereto are incorporated herein by thisreference, and the Recitals are and shall constitute a summary of the public purposes of thisAgreement and the arrangements among the parties hereto with respect to the construction of theProjects, the financing for the Public Improvements and the management and maintenance of thePublic Improvements, the Private AG Portion and Private CP Portion, ifany.
2. Representations.
(a) The City represents and covenants that:
(i) It is a municipal corporation duly organized and validly existingunder the laws ofthe State and its Charter.
(ii) It is legally empowered to execute, deliver and perform thisAgreement and to enter into and carry out the transactionscontemplated by this Agreement. That execution, delivery andperformance do not and will not violate or conflict with anyprovision of law applicable to the City, and do not, and will not,conflict with or result in a default under any agreement orinstrument to which the City is a party or by which it is bound.
(iii) It is legally empowered to enter into and carry out the transactionscontemplated by this Agreement.
(iv) It has duly authorized the execution, delivery and performance ofthis Agreement and the transactions contemplated herein.
(v) It will do all things in its power in order to maintain its existence orassure the assumption of its obligations under this Agreement byany successor public body.
(vi) The TIF Ordinance has been duly passed, is in full force and effectand is not subject to repeal by referendum.
(vii) There is no litigation pending or to its knowledge threatenedagainst or by the City, wherein an unfavorable ruling or decision isreasonably likely to materially adversely affect the City's ability tocarry out its obligations under this Agreement.
(b) CP represents and covenants that:
(i) It is a limited liability company duly organized and validly existingunder the laws of the State.
CLI-2144412vll 13
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(ii) It shall do all things necessary to preserve and keep in full forceand effect its existence, right and franchises until the completion ofthe CP Project, the Required Public Infrastructure and the Block KDevelopment and until the CA delivers its Final CompletionCertificate (as defined therein) under the Construction AgencyAgreement, except as otherwise provided in Section 15(f), shallnot: (A) sell, transfer or otherwise dispose of all, or substantiallyall, of its assets; (B) consolidate with or merge into any otherentity; (C) permit one or more other entities to consolidate with ormerge into it; or (D) dissolve, or seek or permit any member,manager or owner of it to seek, to dissolve or wind up its affairs, inwhole or in part.
(iii) It has full power and authority to execute, deliver and perform thisAgreement and to enter into and perform the transactionscontemplated hereby. That execution, delivery and performancedo not, and will not, violate any provision of law applicable to CPor CP's Articles of Organization and do not, and will not, conflictwith or result in a default under any agreement or instrument towhich CP is a party or by which it is bound. This Agreement has,by proper action, been duly authorized, executed and delivered byCP and all steps necessary to be taken by CP have been taken toconstitute this Agreement a valid and binding obligation ofCP.
(iv) There is no litigation pending or to its knowledge threatenedagainst or by CP or any affiliate thereof, wherein an unfavorableruling or decision is reasonably likely to materially adverselyaffect CP's ability to carry out its obligations under this Agreement
(v) The provision of financial assistance to be made available underthis Agreement and the commitments therefor made by the Cityhave induced CP to undertake the transactions contemplated bythis Agreement and will create and preserve jobs and employmentopportunities within the City and the State.
(vi) The Public Improvements will be completed in accordance withthe Proposed Plan and the Block K PDP in accordance with theterms of this Agreement, the Construction Agency Agreement, andall applicable City approvals and permits.
(vii) The construction of the Public Improvements by CP, as CA, willcomply with all applicable laws, including environmental laws.
(viii) It is not aware of any finding for recovery having been issuedagainst it by the Auditor of the State ofOhio which is "unresolved"under Ohio Revised Code Section 9.24.
CLI-2144412vll 14
(ix) To its actual knowledge, the Recitals that pertain to CP arecurrently true or are fair and accurate representations of what CPexpects to take place in connection with the transactionscontemplated by this Agreement.
(c) CPPIII represents and covenants that:
(i) It is a limited liability company duly organized and validly existingunder the laws ofthe State.
(ii) It shall do all things necessary to preserve and keep in full forceand effect its existence, right and franchises until the completion ofthe CP Project and the Required Public Infrastructure, and until theCA delivers its Final Completion Certificate under theConstruction Agency Agreement, except as otherwise provided inSection 15(f), shall not: (A) sell, transfer or otherwise dispose ofall, or substantially all, of its assets; (B) consolidate with or mergeinto any other entity; (C) permit one or more other entities toconsolidate with or merge into it; or (D) dissolve, or seek or permitany member, manager or owner of it to seek, to dissolve or windup its affairs, in whole or in part.
(iii) It has full power and authority to execute, deliver and perform thisAgreement and to enter into and perform the transactions ***%contemplated hereby. That execution, delivery and performancedo not, and will not, violate any provision of law applicable toCPPIII or CPPIIPs Articles of Organization and do not, and willnot, conflict with or result in a default under any agreement orinstrument to which CPPIII is a party or by which it is bound. ThisAgreement has, by proper action, been duly authorized, executedand delivered by CPPIII and all steps necessary to be taken byCPPIII have been taken to constitute this Agreement a valid andbinding obligation ofCPPIII.
(iv) There is no litigation pending or to its knowledge threatenedagainst or by CPPIII or any affiliate thereof, wherein anunfavorable ruling or decision is reasonably likely to materiallyadversely affect CPPIII's ability to carry out its obligations underthis Agreement.
(v) The provision of financial assistance to be made available underthis Agreement and the commitments therefor made by the Cityhave induced CPPIII to undertake the transactions contemplated bythis Agreement and will create and preserve jobs and employmentopportunities within the City and the State.
CLI-2144412vll 15
(vi) The CP Retail will be completed in accordance with the ProposedPlan, this Agreement, the Construction Agency Agreement, and allapplicable City approvals and permits.
(vii) It is not aware of any finding for recovery having been issuedagainst it by the Auditor of the State ofOhio which is "unresolved"under Ohio Revised Code Section 9.24.
(viii) To its actual knowledge, the Recitals that pertain to CPPIII arecurrently true or are fair and accurate representations of whatCPPIII expects to take place in connection with the transactionscontemplated by this Agreement.
(ix) It shall not commence or pursue any complaint or proceeding inthe Cuyahoga County Board of Revision or otherwise in which itseeks a decrease in the assessed value of the CP Retail unless and
until the true value as determined by the County Fiscal Officer,inclusive ofthe value ofthe Improvements which are the subject ofthe TIF Ordinance but exclusive of the value of publicinfrastructure, exceeds $29,100,000, in which case any suchcomplaint or proceeding shall not seek a decrease which will resultin the true value being less than $29,100,000.
(d) CPR represents and covenants that:
(i) It is a limited liability company duly organized and validly existingunder the laws ofthe State.
(ii) It shall do all things necessary to preserve and keep in full forceand effect its existence, right and franchises until the completion ofthe CP Project and the Required Public Infrastructure, and until theCA delivers its Final Completion Certificate under theConstruction Agency Agreement, except as otherwise provided inSection 15(f), shall not: (A) sell, transfer or otherwise dispose ofall, or substantially all, of its assets; (B) consolidate with or mergeinto any other entity; (C) permit one or more other entities toconsolidate with or merge into it; or (D) dissolve, or seek or permitany member, manager or owner of it to seek, to dissolve or windup its affairs, in whole or in part.
(iii) It has full power and authority to execute, deliver and perform thisAgreement and to enter into and perform the transactionscontemplated hereby. That execution, delivery and performance donot, and will not, violate any provision of law applicable to CPR orCPR's Articles of Organization and do not, and will not, conflictwith or result in a default under any agreement or instrument towhich CPR is a party or by which it is bound. This Agreement has,
CLl-2144412vll 16
by proper action, been duly authorized, executed and delivered byCPR and all steps necessary to be taken by CPR have been taken toconstitute this Agreement a valid and binding obligation ofCPR.
(iv) There is no litigation pending or to its knowledge threatenedagainst or by CPR or any affiliate thereof, wherein an unfavorableruling or decision is reasonably likely to materially adverselyaffect CPR's ability to carry out its obligations under thisAgreement.
(v) The provision of financial assistance to be made available underthis Agreement and the commitments therefor made by the Cityhave induced CPR to undertake the transactions contemplated bythis Agreement and will create and preserve jobs and employmentopportunities within the City and the State.
(vi) The Commercial Rental Apartment Project will be completed inaccordance with the Proposed Plan, this Agreement, theConstruction Agency Agreement, and all applicable City approvalsand permits.
(vii) It is not aware of any finding for recovery having been issuedagainst it by the Auditor ofthe State of Ohio which is "unresolved"under Ohio Revised Code Section 9.24. ^\
(viii) To its actual knowledge, the Recitals that pertain to CPR arecurrently true or are fair and accurate representations of what CPRexpects to take place in connection with the transactionscontemplated by this Agreement.
(ix) It shall not commence or pursue any complaint or proceeding inthe Cuyahoga County Board of Revision or otherwise in which itseeks a decrease in the assessed value of the Commercial RentalApartmentProject unless anduntil the true value as determined bythe County Fiscal Officer, inclusive of the value of theImprovements which are the subject of the TIF Ordinance butexclusive of the value of public infrastructure, exceeds$37,200,000, in which caseany such complaintor proceeding shallnot seek a decrease which will result in the true value being lessthan $37,200,000.
(e) CPM represents and covenants that:
(i) It is a limited liability company duly organizedand validly existingunder the laws ofthe State.
(ii) It shall do all things necessary to preserve and keep in full force "^and effect its existence, right and franchises, and, except as
CLI-2144412vll 17
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otherwise provided in Section 15(f), shall not: (A) sell, transfer orotherwise dispose of all, or substantially all, of its assets;(B) consolidate with or merge into any other entity; (C) permit oneor more other entities to consolidate with or merge into it; or(D) dissolve, or seek or permit any member, manager or owner ofit to seek, to dissolve or wind up its affairs, in whole or in part.
(iii) It has full power and authority to execute, deliver and perform thisAgreement and to enter into and perform the transactionscontemplated hereby. That execution, delivery and performancedo not, and will not, violate any provision of law applicable toCPM or CPM's Articles of Organization and do not, and will not,conflict with or result in a default under any agreement orinstrument to which CPM is a party or by which it is bound. ThisAgreement has, by proper action, been duly authorized, executedand delivered by CPM and all steps necessary to be taken by CPMhave been taken to constitute this Agreement a valid and bindingobligation of CPM.
(iv) There is no litigation pending or to its knowledge threatenedagainst or by CPM or any affiliate thereof, wherein an unfavorableruling or decision is reasonably likely to materially adverselyaffect CPM's ability to carry out its obligations under thisAgreement.
(v) It is not aware of any finding for recovery having been issuedagainst it by the Auditor ofthe State ofOhio which is "unresolved"under Ohio Revised Code Section 9.24.
(vi) To its actual knowledge, the Recitals that pertain to CPM arecurrently true or are fair and accurate representations of what CPMexpects to take place in connection with the transactionscontemplated by this Agreement.
(f) Land represents and covenants that:
(i) It is a limited liability company duly organized and validly existingunder the laws ofthe State.
(ii) It shall do all things necessary to preserve and keep in full forceand effect its existence, right and franchises, and, except asotherwise provided in Section 15(f), shall not: (A) sell, transfer orotherwise dispose of all, or substantially all, of its assets;(B) consolidate with or merge into any other entity; (C) permit oneor more other entities to consolidate with or merge into it; or(D) dissolve, or seek or permit any member, manager or owner ofit to seek, to dissolve or wind up its affairs, in whole or in part.
CLI-2144412vll 18
(iii) It has full power and authority to execute, deliver and perform thisAgreement and to enter into and perform the transactionscontemplated hereby. That execution, delivery and performancedo not, and will not, violate any provision of law applicable toLand or Land's Articles of Organization and do not, and will not,conflict with or result in a default under any agreement orinstrument to which Land is a party or by which it is bound. ThisAgreement has, by proper action, been duly authorized, executedand delivered by Land and all steps necessary to be taken by Landhave been taken to constitute this Agreement a valid and bindingobligation ofLand.
(iv) There is no litigation pending or to its knowledge threatenedagainst or by Land or any affiliate thereof, wherein an unfavorableruling or decision is reasonably likely to materially adverselyaffect Land's ability to carry out its obligations under thisAgreement.
(v) The Private CP Portion, if any, will be completed in accordancewith the Proposed Plan, this Agreement, the Construction AgencyAgreement, and all applicable City approvals and permits.
(vi) It is not aware of any finding for recovery having been issuedagainst itby the Auditor ofthe State ofOhio which is''unresolved" ^under Ohio Revised Code Section 9.24.
(vii) To its actual knowledge, the Recitals that pertain to Land arecurrently true or are fair and accurate representations of what Landexpects to take place in connection with the transactionscontemplated by this Agreement.
(g) BK Developer represents and covenants that:
(i) It is a limited liabilitycompany duly organizedand validly existingunder the laws ofthe State.
(ii) It shall do all things necessary to preserve and keep in full forceand effect its existence, right and franchises until the completion ofthe Block K Projects, and until the CA delivers its FinalCompletion Certificate under the Construction Agency Agreement,except as otherwise provided in Section 15(f), shall not: (A) sell,transfer or otherwise dispose of all, or substantially all, of itsassets; (B) consolidate with or merge into any other entity;(C) permit one or more other entities to consolidate with or mergeinto it; or (D) dissolve, or seek or permit any member, manager orowner of it to seek, to dissolve or wind up its affairs, in whole or inpart. ~\
CLI-2144412vll 19
(iii) It has full power and authority to execute, deliver and perform thisAgreement and to enter into and perform the transactionscontemplated hereby. That execution, delivery and performance donot, and will not, violate any provision of law applicable to BKDeveloper or BK Developer's Articlesof Organization and do not,and will not, conflict with or result in a default under anyagreement or instrument to which BK Developer is a party or bywhich it is bound. This Agreement has, by proper action, been dulyauthorized, executed and delivered by BK Developer and all stepsnecessary to be taken by BK Developer have been taken toconstitute this Agreement a valid and binding obligation of BKDeveloper.
(iv) There is no litigation pending or to its knowledge threatenedagainst or by BK Developer or any affiliate thereof, wherein anunfavorable ruling or decision is reasonably likely to materiallyadversely affect BK Developer's ability to carry out its obligationsunder this Agreement.
(v) The provision of financial assistance to be made available underthis Agreement and the commitments therefor made by the Cityhave induced BK Developer to undertake the transactionscontemplated by this Agreement and will create and preserve jobsand employment opportunities within the City and the State.
(vi) The Block K Development will be completed in accordance withthe Block K PDP, this Agreement, the Construction AgencyAgreement, and all applicable City approvals and permits.
(vii) It is not aware of any finding for recovery having been issuedagainst it by the Auditor of the State ofOhio which is "unresolved"under Ohio Revised Code Section 9.24.
(viii) To its actual knowledge, the Recitals that pertain to BK Developerare currently true or are fair and accurate representations of whatBK Developer expects to take place in connection with thetransactions contemplated by this Agreement.
(h) CD Retail represents and covenants that:
(i) It is a limited liability company duly organized and validly existingunder the laws of the State.
(ii) It shall do all things necessary to preserve and keep in full forceand effect its existence, right and franchises until the completion ofthe Block K Projects, and until the CA delivers its FinalCompletion Certificate under the Construction Agency Agreement,except as otherwise provided in Section 15(f), shall not: (A) sell,
CLI-2144412vll 20
transfer or otherwise dispose of all, or substantially all, of itsassets; (B) consolidate with or merge into any other entity;(C) permit one or more other entities to consolidate with or mergeinto it; or (D) dissolve, or seek or permit any member, manager orowner of it to seek, to dissolve or wind up its affairs, in whole or inpart.
(iii) It has full power and authority to execute, deliver and perform thisAgreement and to enter into and perform the transactionscontemplated hereby. That execution, delivery and performance donot, and will not, violate any provision of law applicable to CDRetail or CD Retail's Articles of Organization and do not, and willnot, conflict with or result in a default under any agreement orinstrument to which CD Retail is a party or by which it is bound.This Agreement has, by proper action, been duly authorized,executed and delivered by CD Retail and all steps necessary to betaken by CD Retail have been taken to constitute this Agreement avalid and binding obligation ofCD Retail.
(iv) There is no litigation pending or to its knowledge threatenedagainst or by CD Retail or any affiliate thereof, wherein anunfavorable ruling or decision is reasonably likely to materiallyadversely affect CD Retail's ability to carry out its obligationsunder this Agreement.
(v) The provision of financial assistance to be made available underthis Agreement and the commitments therefor made by the Cityhave induced CD Retail to undertake the transactions contemplatedby this Agreement and will create and preserve jobs andemployment opportunities within the City and the State.
(vi) The retail component of the Block K Development will becompleted in accordance with the Block K PDP, this Agreement,the Construction Agency Agreement, and all applicable Cityapprovals and permits.
(vii) It is not aware of any finding for recovery having been issuedagainst it by the Auditor of the State of Ohio which is "unresolved"under Ohio Revised Code Section 9.24.
(viii) To its actual knowledge, the Recitals that pertain to CD Retail arecurrently true or are fair and accurate representations of what CDRetail expects to take place in connection with the transactionscontemplated by this Agreement.
(ix) It shall not commence or pursue any complaint or proceeding inthe Cuyahoga County Board of Revision or otherwise in which it
CLI-2144412vll 21
/"-*fe^k
r seeks a decrease in the assessed value of the CD Retail Parcels
unless and until the true value as determined by the County FiscalOfficer, inclusive of the value of the Improvements which are thesubject of the TIF Ordinance but exclusive of the value of publicinfrastructure, exceeds $8,100,000, in which case any suchcomplaint or proceeding shall not seek a decrease which will resultin the true value being less than $8,100,000.
(i) CD Hotel represents and covenants that:
(i) It is a limited liability company duly organized and validly existingunder the laws of the State.
(ii) It shall do all things necessary to preserve and keep in full forceand effect its existence, right and franchises until the completion ofthe Block K Projects, and until the CA delivers its FinalCompletion Certificate under the Construction Agency Agreement,except as otherwise provided in Section 15(f), shall not: (A) sell,transfer or otherwise dispose of all, or substantially all, of itsassets; (B) consolidate with or merge into any other entity;(C) permit one or more other entities to consolidate with or mergeinto it; or (D) dissolve, or seek or permit any member, manager orowner of it to seek, to dissolve or wind up its affairs, in whole or inpart.
(iii) It has full power and authority to execute, deliver and perform thisAgreement and to enter into and perform the transactionscontemplated hereby. That execution, delivery and performance donot, and will not, violate any provision of law applicable to CDHotel or CD Hotel's Articles of Organization and do not, and willnot, conflict with or result in a default under any agreement orinstrument to which CD Hotel is a party or by which it is bound.This Agreement has, by proper action, been duly authorized,executed and delivered by CD Hotel and all steps necessary to betaken by CD Hotel have been taken to constitute this Agreement avalid and binding obligation ofCD Hotel.
(iv) There is no litigation pending or to its knowledge threatenedagainst or by CD Hotel or any affiliate thereof, wherein anunfavorable ruling or decision is reasonably likely to materiallyadversely affect CD Hotel's ability to carry out its obligationsunder this Agreement.
(v) The provision of financial assistance to be made available underthis Agreement and the commitments therefor made by the Cityhave induced CD Hotel to undertake the transactions contemplated
CLI-2144412vll 22
by this Agreement and will create and preserve jobs and /a^employment opportunities within the City and the State. /
(vi) The hotel component of the Block K Development will becompleted in accordance with the Block K PDP, this Agreement,the Construction Agency Agreement, and all applicable Cityapprovals and permits.
(vii) It is not aware of any finding for recovery having been issuedagainst it by the Auditor ofthe State of Ohio which is "unresolved"under Ohio Revised Code Section 9.24.
(viii) To its actual knowledge, the Recitals that pertain to CD Hotel arecurrently true or are fair and accurate representations of what CDHotel expects to take place in connection with the transactionscontemplated by this Agreement.
(ix) It shall not commence or pursue any complaint or proceeding inthe Cuyahoga County Board of Revision or otherwise in which itseeks a decrease in the assessed value of the CD Hotel Parcel
unless and until the true value as determined by the County FiscalOfficer, inclusive of the value of the Improvements which are thesubject of the TIF Ordinance but exclusive of the value of publicinfrastructure, exceeds $9,800,000, in which case any such ^\complaint or proceeding shall not seek a decrease which will resultin the true value being less than $9,800,000.
(j) CD Garage represents and covenants that:
(i) It is a limited liabilitycompany duly organizedand validly existingunder the laws ofthe State.
(ii) It shall do all things necessary to preserve and keep in full forceand effect its existence, right and franchises until the completion ofthe Block K Projects, and until the CA delivers its FinalCompletion Certificate under the Construction Agency Agreement,except as otherwise provided in Section 15(f), shall not: (A) sell,transfer or otherwise dispose of all, or substantially all, of itsassets; (B) consolidate with or merge into any other entity;(C) permit one or more other entities to consolidate with or mergeinto it; or (D) dissolve, or seek or permit any member, manager orowner of it to seek, to dissolve or wind up its affairs, in whole or inpart.
(iii) It has full power and authority to execute, deliver and perform thisAgreement and to enter into and perform the transactionscontemplated hereby. That execution, delivery and performance do ^^not, and will not, violate any provision of law applicable to CD
CLI-2144412vl1 23
jfj^^SGarage or CD Garage's Articles of Organization and do not, andwill not, conflict with or result in a default under any agreement orinstrument to which CD Garage is a party or by which it is bound.This Agreement has, by proper action, been duly authorized,executed and delivered by CD Garage and all steps necessary to betaken by CD Garage have been taken to constitute this Agreementa valid and binding obligation ofCD Garage.
(iv) There is no litigation pending or to its knowledge threatenedagainst or by CD Garage or any affiliate thereof, wherein anunfavorable ruling or decision is reasonably likely to materiallyadversely affect CD Garage's ability to carry out its obligationsunder this Agreement.
(v) The provision of financial assistance to be made available underthis Agreement and the commitments therefor made by the Cityhave induced CD Garage to undertake the transactionscontemplated by this Agreement and will create and preserve jobsand employment opportunities within the City and the State.
(vi) The parking garage component of the Block K Development willbe completed in accordance with the Block K PDP, thisAgreement, the Construction Agency Agreement, and all
m*\ applicable City approvals and permits.
(vii) It is not aware of any finding for recovery having been issuedagainst it by the Auditor ofthe State ofOhio which is "unresolved"under Ohio Revised Code Section 9.24.
(viii) To its actual knowledge, the Recitals that pertain to CD Garage arecurrently true or are fair and accurate representations of what CDGarage expects to take place in connection with the transactionscontemplated by this Agreement.
(ix) It shall not commence or pursue any complaint or proceeding inthe Cuyahoga County Board of Revision or otherwise in which itseeks a decrease in the assessed value of the CD Garage Parcelunless and until the true value as determined by the County FiscalOfficer, inclusive of the value of the Improvements which are thesubject of the TIF Ordinance but exclusive of the value of publicinfrastructure, exceeds $4,600,000, in which case any suchcomplaint or proceeding shall not seek a decrease which will resultin the true value being less than $4,600,000.
(k) AG represents and covenants that:
/^ (i) It is a corporation duly organized and validly existing under thelaws of the State.
CLl-2144412vll 24
(ii) It has full power and authority to execute, deliver and perform thisAgreement and to enter into and perform the transactionscontemplated hereby. That execution, delivery and performancedo not, and will not, violate any provision of law applicable to AGor AG's Articles of Incorporation or Code of Regulations and donot, and will not, conflict with or result in a default under anyagreement or instrument to which AG is a party or by which it isbound. This Agreement has, by proper action, been dulyauthorized, executed and delivered by AG and all steps necessaryto be taken by AG have been taken to constitute this Agreement avalid and binding obligation ofAG.
(iii) The provision of financial assistance to be made available underthis Agreement and the commitments therefor made by the Cityhave induced AG to undertake the transactions contemplated bythis Agreement and will create and preserve jobs and employmentopportunities within the City and the State.
(iv) There is no litigation pending or to its knowledge threatenedagainst or by AG or any affiliate thereof, wherein an unfavorableruling or decision is reasonably likely to materially adverselyaffect AG's ability to carry out its obligations under thisAgreement.
(v) The AG Project will be completed in accordance with the ProposedPlan in accordance with the terms of this Agreement and allapplicable City approvals and permits.
(vi) It is not aware of any finding for recovery having been issuedagainst it by the Auditor ofthe State ofOhio which is "unresolved"under Ohio Revised Code Section 9.24.
(vii) To its actual knowledge, the Recitals that pertain to AG arecurrently true or are fair and accurate representations of what AGexpects to take place in connection with the transactionscontemplated by this Agreement.
(viii) It shall not commence or pursue any complaint or proceeding inthe Cuyahoga County Board of Revision or otherwise in which itseeks a decrease in the assessed value of the AG Building or theAG Retail, respectively, unless and until the true value asdetermined by the County Fiscal Officer, inclusive of the value ofthe Improvements which are the subject of the TIF Ordinance butexclusive of the value of public infrastructure, (x) exceeds$99,900,000 in the case of the AG Building, in which case anysuch complaint or proceeding shall not seek a decrease which willresult in the true value of the AG Building being less than
CLI-2144412vll 25
/*S|k
$99,900,000, or (y) exceeds $15,000,000 in the case of the AG{ Retail, in which case any such complaint or proceeding shall not
seek a decrease which will result in the true value of the AG Retail
being less than $15,000,000.
3. Construction Obligations.
(a) AG agrees to construct or cause the construction of the AG Project. AGhas commenced design and pre-construction, and will commence or causethe commencement of construction of the AG Project and will diligentlypursue or cause the construction of the AG Project to be pursued tocompletion, in accordance with the Master Schedule, subject to ForceMajeure and subject to the performance by CP, CPPIII, CPR, CPM, Landand the City oftheir respective obligations hereunder.
(b) CPPIII agrees to construct or cause the construction of the CP Retail andto diligently pursue such construction to completion in accordance withthe Master Schedule, subject to Force Majeure and subject to theperformance by AG and of the City of their respective obligationshereunder. CPIII and CPR will acquire directly or indirectly from AG atClosing an interest in the land parcels that will contain Extension BuildingEast.
/0^\ (c) CPR agrees to construct or cause the construction of the CommercialRental Apartment Project and to diligently pursue such construction tocompletion in accordance with the Master Schedule, subject to ForceMajeure and subject to the performance by AG and the City of theirrespective obligations hereunder. CPR covenants and agrees that theCommercial Rental Apartment Project shall be rental units only and shallnot be converted to condominiums during the term of this Agreement,unless the City provides it prior written approval after considering the TIFimplications and financial implications of such a conversion, whichapproval shall not be unreasonably withheld. Any conclusion by the Citythat a conversion may have negative TIF implications or financialimplications shall be a reasonable cause for the City to refuse to grant itsapproval.
(d) CD Hotel, CD Retail and CD Garage each agrees to construct or cause theconstruction of the hotel, retail and garage components, respectively, ofthe Block K Development, and to diligently pursue such construction tocompletion in accordance with the Master Schedule, subject to ForceMajeure and subject to the performance by the City of its obligationshereunder.
CLl-2144412vll 26
4. The City's Agreement to Issue Bonds to Fund Public Improvements. /^?|v
(a) The City agrees to issue the Bonds (subject to the following conditions) tofinance, to the extent of available funds, the construction of a portion ofthe Public Improvements and has secured the SIB Loan to finance, to theextent of available funds, the construction of the Required PublicInfrastructure. The principal amount of the Bonds will be sufficient toreimburse or pay the City for legal fees, financial advisory fees,consultants' fees and out-of-pocket costs paid or incurred prior to theClosing relating to (i) issuance of the Bonds and the TIF Districtfinancing, (ii) the 629 Grant, or (iii) the SIB Loan. The City will cause theproceeds of the Bonds and the SIB Loan (upon receipt by the City inaccordance with the terms of the SIB Loan) to be disbursed to the BondTrustee, in its capacity as Disbursing Agent under the DisbursingAgreement (subject to the limitations provided in Section 4(c)), upon thesatisfaction of the following conditions: (i) AG acquires the AG Land,(ii) AG, CPPIII, CPR, Land (if there is to be a Private CP Portion), andBK Developer confirm (in a manner described in Section 4(b)) thatfinancing is available to complete their respective private projects,(iii) AG, CP, CPR, CPPIII, and BK Developer, respectively, certify to theCity in writing that they are satisfied that the anticipated net proceeds ofthe Bonds net of costs of issuance, and capitalized interest, together withother funds available to fund the Public Improvements, will be sufficientto pay the costs of the AG Public Infrastructure, the CP Public ^Infrastructure and Block K Public Improvements, respectively, (iv) AGand CP have caused the land on which the Public Improvements are to beconstructed to be conveyed to the City by warranty deeds, ground leasesand easements as provided in Section 8(a) below, and have caused U.S.Title Agency Inc. to deliver title insurance policies which insure that theCity has good fee or leasehold, title or easement rights, as applicable, andwhich insure in language reasonably satisfactory to the City, that theService Payments and Shortfall Payments which will be payable by theparcels within the TIF District will have the priority of real estate taxeswith respect to such parcels; (v) the Construction Agreement has beenexecuted by the CMR pursuant to the provisions of this Agreement,(vi)no Event of Default by CP, CPPIII, CPR, Land, BK Developer, CDRetail, CD Hotel, CD Garage or AG has occurred and is continuing, (vii)AG has delivered to the City and School District the certification requiredin Section 7(a) of this Agreement; and (viii) other conditions are met as setforth in the Transaction Documents.
(b) (i) AG will confirm that its financing is available by delivering to theCity at Closing a conditional commitment from an institutionallender for a construction loan for the AG Project in an amountsufficient together with other funds available to AG or Propco topay the estimated costs ofconstruction ofthe AG Project (the "AG ^Construction Loan") and will demonstrate to the City's
CLI-2144412vll 27
reasonable satisfaction that the AG Construction Loan, togetherwith other funds available to AG or Propco, will be sufficient tocomplete construction of the AG Project.
(ii) CPPIII will confirm that its financing is available by delivering tothe City at Closing a binding commitment letter from aninstitutional lender committing to make a construction loan for theCP Retail, in an amount sufficient to pay the estimated costs ofconstruction of the CP Retail (the "CPPIII Construction Loan")— or alternatively, at CPPIIFs election, will close the CPPIIIConstruction Loan contemporaneously with the Closing — andwill demonstrate to the City's reasonable satisfaction that theCPPIII Construction Loan, together with other funds of CPPIII, ifnecessary, will be sufficient to complete construction of the CPRetail.
(iii) CP will confirm that its financing for any Private CP Portion isavailable by delivering to the City at Closing a bindingcommitment letter from an institutional lender committing to makea construction loan for the Private CP Portion, if any, in an amountsufficient to pay the estimated costs of construction of the PrivateCP Portion (the "Private CP Portion Construction Loan") andwill demonstrate to the City's reasonable satisfaction that thePrivate CP Portion Construction Loan, together with other funds ofCP if necessary, will be sufficient to complete construction of thePrivate CP Portion.
(iv) CPR will confirm that financing is available to completeconstruction of the Commercial Rental Apartment Project bydelivering to the City at Closing a binding commitment letter orletters, from any combination of CIF or one or more institutionallenders, committing to make one or more construction loans for theCommercial Rental Apartment Project in an amount sufficient topay the estimated costs of the construction of Commercial RentalApartment Project (collectively, the "Commercial RentalApartment Construction Loan") - or alternatively, at CPR'selection, will close the Commercial Rental Apartment ConstructionLoan contemporaneously with the Closing - and will demonstrateto the City's reasonable satisfaction that the Commercial RentalApartment Construction Loan, together with other funds of CPR, ifnecessary, will be sufficient to complete construction of theCommercial Rental Apartment Project.
(v) BK Developer will confirm that financing is available to completeconstruction of the Block K Development by the Block K Ownerson the Block K Parcels by delivering to the City at Closing abinding commitment letter or letters, from any combination of CIF
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or one or more institutional lenders, committing to make one ormore construction loans for the Block K Development in anamount sufficient to pay the estimated costs of the construction ofthe Block K Development (collectively, the "Block KDevelopment Construction Loan") contemporaneously with theClosing - or alternatively, at CPIU's election, will close theBlock K Development Construction Loan - and will demonstrateto the City's reasonable satisfaction that the Block K DevelopmentConstruction Loan, together with other funds of BK Developer,CD Retail, CD Hotel or CD Garage, if necessary, will be sufficientto complete construction ofthe Block K Development.
(c) The parties agree that no funds may be drawn from the Bond proceeds tofund construction costs for the Required Public Infrastructure until (i) theCPPIII Construction Loan has actually closed, (ii) the City is reasonablysatisfied that the CPPIII Construction Loan has been funded or will be
funded, and (iii) the City is reasonably satisfied that, if necessary, otherfunds of CPPIII sufficient to complete the CP Retail are available(collectively, the "CPPIII Disbursement Conditions").
The parties agree that no funds may be drawn from the Bond Proceeds tofund construction costs for the G Parking Garage until (i) the CommercialRental Apartment Construction Loan has actually closed, (ii) the City isreasonably satisfied that the Commercial Rental Apartment Construction ^Loan has been funded or will be funded (e.g., if the Commercial RentalApartment Construction Loan is to be funded in part with a loan from CIF,either (i) all of the CIF investors have been approved by all applicablegovernmental authorities and 100% of the portion of the CommercialRental Apartment Construction Loan being funded by CIF (the "CIFPortion") has been released from escrow, or (ii) a bridge loan from aninstitutional lender has been closed and sufficient funds are available to bedrawn on such bridge loan to reasonably satisfy the City that constructionof the Commercial Rental Apartment Project can be completed with suchfunds) and (iii) the City is reasonably satisfied that, if necessary, otherfunds of CPR sufficient to complete construction of the CommercialRental Apartment Project are available (collectively, the "CPRDisbursement Conditions").
The parties agree that no funds may be drawn from the Bond proceeds tofund construction costs for the Block K Public Improvements until (i) theBlock K Development Construction Loan has actually closed, (ii) the Cityis reasonably satisfied that the Block K Development Construction Loanhas been funded or will be funded, (iii) the City is reasonably satisfiedthat, if necessary, other funds of BK Developer, CD Retail, CD Hotel orCD Garage sufficient to complete the Block K Development are available,and (iv) a franchise agreement with a national hotel franchisor has been **%
CLl-2144412vll 29
/^K
executed and delivered by such franchisor to CD Hotel (collectively, the"Block K Disbursement Conditions").
Notwithstanding the foregoing, if any of the above DisbursementConditions has not been met by the date which is three (3) years after theclosing date for the Bonds, the City may, if it determines, based on anopinion of bond counsel, that redemption of a portion of the Bonds isnecessary to maintain the exclusion from gross income of the interest onthe Bonds, use any unspent proceeds to redeem a portion ofthe Bonds.
(d) (i) As a condition to issuance ofthe Bonds, AG will contribute at least$3,000,000 ("AG's Private Contribution") to pay for theconstruction of the Private AG Portion on the AG Parking Parcel.AG's Private Contribution shall be deposited with the DisbursingAgent as a condition of the issuance and delivery of the Bonds, asprovided in the Disbursing Agreement. The Ground Leasebetween AG and the City, pursuant to which the City will own thePublic H Garage, will (i) grant the City sufficient rights withrespect to the AG Parking Parcel to facilitate use, operation,maintenance, construction and reconstruction of the Public HGarage and (ii) grant AG sufficient rights with respect to thePublic H Garage to facilitate use, operation, maintenance,construction and reconstruction of the Private AG Portion.
(ii) If CP elects prior to Closing to contribute an amount to pay for thePrivate CP Portion, ("CP's Private Contribution") such amountshall be deposited with the Disbursing Agent as provided in theDisbursing Agreement. The CP Private Portion, if any, will belocated in the F Parking Garage and/or the G Parking Garage.Each Ground Lease for the Public Parking Facility in which thePrivate CP Portion will be located, pursuant to which the City willown the Public Parking Facility, will (i) grant the City sufficientrights with respect to the CP Parking Parcel to facilitate use,operation, maintenance, construction and reconstruction of thePublic Parking Facility, and (ii) grant CP sufficient rights withrespect to the Public Parking Facility to facilitate use, operation,maintenance, construction and reconstruction of the Private CPPortion.
(e) In addition to issuing the Bonds and securing the SIB Loan, the City willallocate the $1 million 629 Grant it expects to receive from the State topay for the portion of the costs of AG Public Infrastructure for which629 Grant Funds may be used, as provided in the Disbursing Agreement.
(f) Any Bond proceeds which are placed in the City Project Fund Account(excluding funds in the Block K Public Improvements Subaccount) withinthe Project Fund pursuant to the terms of the Indenture and which remain
CLI-2144412vll 30
after completion of construction ofthe Required Public Infrastructure shallbe applied in the following order: (i) first, to reimburse CP for any PhaseIII Deficiency that was paid for by CP in connection with the RequiredPublic Infrastructure, unless such Phase III Deficiency is caused by thenegligence or reckless disregard on the part of CP; (ii) second, toreimburse AG and/or CP, for any cash contributed by the respective partyto reduce any shortfall in available sources of funds for construction of theRequired Public Infrastructure (not including AG's Private Contribution orCP's Private Contribution, if any), and in the event that both AG and CPhave made such cash contribution, (respectively, an "AG PublicContribution" and a "CP Public Contribution" and, collectively,"Public Contributions") such reimbursement shall be in proportion totheir respective Public Contributions; (notwithstanding the foregoing, anyexcess Bond proceeds which are generated by a cost saving resulting froma change in scope of any of the Public Parking Facilities approved by theCity shall be reimbursed to the party on whose property the Public ParkingFacility is situated, but onlyto the extentof its PublicContribution, if any,and any excess Bond proceeds from the Block K Public ImprovementsSubaccount pursuant to subsection (g) below shall be reimbursed to CPonly to the extent of the CP Public Contribution.); and (iii) third, for anyone or combination of the following, in the City's sole discretion afterconsultation with AG and CP: (A) to fund a debt service reserve fund forthe Bonds not greater than the greatest of (x) ten percent of the principalamount of the Bonds attributable to the Phase III Project, or (y) average 1annual principal and interest on the Bonds attributable to the Phase IIIProject or (z) maximum annual principal and interest on the Bondsattributable to the Phase III Project; (B) to fund a reasonable capitalreplacement fund for the Required Public Infrastructure, subject to receiptof an opinion of bond counsel to the City that such use does not adverselyaffect thetax-exempt status oftheBonds; (C) forfull or partial redemptionof Bonds at the earliest optional redemption date; (D) for full or partialearly repayment of the SIB Loanor (E) for additional public infrastructureimprovements that directly benefit the parcels in TIF District Phase 1. Inthe event of the partial redemption of the Bonds pursuant to thisdivision (f), the Phase III Project Shortfall Payments shall be reduced on apro rata basis among all parcels which are obligated to make Phase IIIProject Shortfall Payments.
(g) Any Bond proceeds which are deposited in the Block K PublicImprovements Subaccount within the City Project Fund Account of theProject Fund pursuant to the terms of the Indenture and which remain aftercompletion of construction of the Block K Public Improvements shall beapplied in the following order: (i) first, to reimburse CP for any Block KDeficiency that was paid for by CP, unless the Block K Deficiency iscaused by the negligence or reckless disregard on the part of CP;(ii) second, to reimburse BK Developer for any cash which it contributed ^to reduce any shortfall in available sources of funds for construction of the
CLI-2144412vll 31
•^Iv
Block K Public Improvements; (iii) third, with the mutual approval of the\ City and CP, to be applied toward the cost of any public infrastructure
improvements permitted by the TIF Ordinance, whether at the Block KDevelopment or as part of the Development; and (iv) fourth, for any oneor combination of the following in the City's sole discretion afterconsultation with BK Developer: (A) to fund a debt service reserve fundfor the Bonds not greater than the greatest of (x) ten percent of theprincipal amount of the Bonds attributable to the Block K PublicImprovements, or (y) average annual principal and interest on the Bondattributable to the Block K Public Improvements or (z) maximum annualprincipal and interest on the Bonds attributable to the Block K PublicImprovements; (B) to fund a reasonable capital replacement fund for theBlock K Public Improvements, subject to receipt of an opinion of bondcounsel to the City that such use does not adversely affect the tax-exemptstatus of the Bonds; (C) for all or partial redemption of Bonds at theearliest optional redemption date; (D) for full or partial early repayment ofthe SIB Loan; or (E) for additional public infrastructure improvements thatdirectly benefit the parcels in TIF District Phase 2. In the event of thepartial redemption of the Bonds pursuant to this division (g), the Block KShortfall Payments shall be reduced on a pro rata basis among all parcelswhich are obligated to make Block K Shortfall Payments.
(h) Notwithstanding Section 5 of this Agreement, if all or any portion of the/^ SIB Loan is drawn on by the City, all or a portion of the SIB Loan
payments may be accelerated by the City in accordance with the SIB Loandocuments before or after complete disbursement of the SIB Loanproceeds and all or a portion of the Bonds may be redeemed if (i) AG orPropco does not close on the AG Construction Loan by May 1, 2014 or,abandons the construction of the AG Project or the CA abandons theconstruction of the Required Public Infrastructure and AG fails toundertake completion of same as provided in the Construction AgencyAgreement; (ii) AG shall (A) admit in writing its inability to pay its debtsgenerally as such debts become due; (B) (1) commence a voluntarybankruptcy case concerning it or (2) have an involuntary bankruptcy casecommenced against it and either have an order of insolvency orreorganization entered against it or have the case remain undismissed andunstayed for sixty (60) days; (C) commence any other proceeding underany reorganization, arrangement, readjustment of debt, relief of debtors,dissolution, insolvency or liquidation or similar law of any jurisdictionwhether now or hereafter in effect and either have an order entered againstit thereunder or remain undismissed or unstayed for sixty (60) days orthere is commenced against it any such proceeding which remainsundismissed or unstayed for sixty (60) days; (D) be adjudicated insolventor bankrupt; (E) make a general assignment for the benefit of creditors;(F) have a receiver, trustee or custodian appointed for the whole or any
/^n substantial part of its property or a receiver, trustee or custodian or anyother officer or representative of the court or of creditors, or any court,
CLI-2144412vll 32
government officer or agency shall take and hold possession of any ^^substantial part of its property; or (G) take any other action for the purpose iofeffecting the foregoing; or (iii) the Transaction Documents otherwise donot prohibit the acceleration of the SIB Loan payments or the redemptionofthe Bonds.
(i) Notwithstanding Section 5 of this Agreement and in addition to theconditions specified in subsection (h), all or a portion ofthe Bonds may beredeemed by the City in accordance with the Transaction Documentsbefore or after complete disbursement of the Bond proceeds for theRequired Public Infrastructure if (i) the CPPIII Disbursement Conditionshave not been satisfied within sixty (60) days after the Closing; (ii) withrespect to the portion of the Bonds to be used for the construction of theG Parking Garage, the CPR Disbursement Conditions have not beensatisfied within two and one-half years after the Closing or CPR notifiesthe City in writing that the CPR Disbursement Conditions will not besatisfied or it otherwise will not be able to complete construction of theCommercial Rental Apartment Project, (iii) with respect to the portion ofthe Bonds to be used for the construction of the Block K PublicImprovements, the Block K Disbursement Conditions have not beensatisfied within two and one-half years after the Closing or the BKDeveloper notifies the City in writing that the Block K DisbursementConditions will notbe satisfied or it otherwise will not be able to completeconstruction of the Block K Development, or (iv) the Transaction ^Documents, including, but not limited to, the Construction AgencyAgreement, otherwise permit the redemption of all or any portion of theBonds.
(j) In the event of an early SIB Loan repayment pursuant to Section 4(h) ofthis Agreement or a Bond redemption pursuant to Section 4(h) or 4(i) ofthis Agreement, andunless otherwise provided in the SIB Loan documentsor Transaction Documents, AG, CP, CPPIII and CPR shall reimburse theCitywithinsixty (60) days of such repayment orredemption for the City'sSIB Loan-related costs and Bond-related costs, including issuance costsand interest payments (whether or not paid from the proceeds of the SIBLoan or Bonds), in proportion to each entity's share of the ShortfallPayments, but not (i) ifthe early SIB Loan repayment or Bond redemptionis pursuant to Section 4(h)(iii) or Section 4(i)(iv) and the cause for theearly repayment or Bond redemption is not attributable to an Event ofDefault by AG, CP, CPPIII, CPR, CPM, BK Developer or the Block KOwners under this Agreement or an event of default by AG, CP, CPPIII,CPR, CPM, BK Developer or the Block K Owners under one of theTransaction Documents, and(ii) in the case ofAG, if the Bond redemptionis pursuant to subsections (i), (ii) or (iii) of subsection 4(i). If the City isunable to collect such a reimbursement payment from AG, CP, CPPIII,CPR, CPM, BK Developer or the Block K Owners because of a ~\bankruptcy, a receivership or otherwise, the reimbursement payment shall
CLI-2144412vll 33
be collected through the imposition of R.C. Section 5709.91 minimumservice payment obligations with respect to that party's property in theTIF District (or in the case of CP or CPM, to the property of CPPIII, CPRand the Block K Owners), either in the form of increased ShortfallPayments (if the Bonds remain outstanding) or new minimum servicepayment obligations (if the City issues new bonds to redeem the Bonds).
(k) In the event of a breach of division (c) or (d) of Section 15 of thisAgreement by AG, CP, CPPIII, CPR, CPM, BK Developer or the Block KOwners that causes the interest rate of the Bonds to increase or that causes
the City to issue new bonds to redeem the Bonds, any increased debtservice payments shall be collected through the imposition of R.C. Section5709.91 minimum service payment obligations with respect to theresponsible party's property in the TIF District (or in the case of CP orCPM, to the property of CPPIII, CPR and the Block K Owners), either inthe form of increased Shortfall Payments (if the Bonds remainoutstanding) or new minimum service payment obligations (if the Cityissues new bonds to redeem the Bonds). In addition, any such breach byCP, CPPIII, CPR, CPM, BK Developer or the Block K Owners shall be anevent ofdefault by CPM under the Management Agreement.
(1) In the event of a breach of division (c) of Section 15 of this Agreement byAG, CP, CPPIII, CPR, CPM, BK Developers or the Block K Owners, theresult of which is that the City agrees to enter into a closing agreementwith the Internal Revenue Service or the United States Treasury in order tomaintain the tax-exempt status of the interest on the Bonds, or if the Cityis liable in damages to any holder of Bonds as a result of such breach(whether such liability results from a final determination of a court of theState or of the United States or from a settlement with any holder), theparty responsible for such breach,or each of them, shall pay to the City anamount equal to the amount payable by the City pursuant to the closingagreement plus all expenses incurred by the City in connection withentering into such closing agreement, including, without limitation,attorneys' fees. AG, CP, CPPIII, CPR, CPM, BK Developer or theBlock K Owners, and each of them, may, to the extent permitted by law,participate in any negotiations with the Internal Revenue Service or theUnited States Treasury or any holder, and the City will consult with any ofthem regarding any such closing agreement, settlement or litigation, butthe City may determine, in its sole discretion but acting reasonably, afterconsultation with such other parties as have requested to participate,whether or not to enter into a closing agreement or settlement agreement.If the City is unable to collect the amounts specified in this division fromAG, CP, CPPIII, CPR, CPM, BK Developer or the Block K Ownersbecause of a bankruptcy, a receivership or otherwise, the reimbursementpayment shall be collected through the imposition of R.C. Section 5709.91minimum service payment obligations with respect to that party's propertyin the TIF District (or in the case of CP or CPM, to the property ofCPPIII,
CLI-2144412vll 34
CPR and the Block K Owners), either in the form of increased Shortfall /9^Payments (if the Bonds remain outstanding) or new minimum service 'payment obligations (if the City issues new bonds to redeem the Bonds).
(m) AG, CPPIII, CPR, CD Retail, CD Hotel and CD Garage shall each reportin writing to the City on a monthly basis until the completion of the AGProject, the CP Retail, Commercial Rental Apartment Project and therespective portions of the Block K Development, respectively, concerningthe status of each project, their progress in meeting the milestonesspecified in the Master Schedule, and concerning any additionalinformation reasonably requested by the City.
Construction by City ofPublic Improvements.
(a) In accordance with the Construction Agency Agreement, the CA willconstruct the Public Improvements using the proceeds of the Bonds andthe other sources described in Section 4 above, provided that the proceedsof the SIB Loan will be used only to construct the Required PublicInfrastructure.
(b) CP, as CA, will enter into the Construction Agreement with the CMR forthe Public Improvements, at a price acceptable to City and AG, all in amanner consistent with the Construction Agency Agreement andcompetitive bidding requirements in the City Charter. The Construction /S*%Agreement will include construction documents and a detailed schedule ofvalues in sufficient detail to enable the City, AG, and CP, as CA, todetermine the cost of the various components of the Public Improvementsand in sufficient detail to enable the City, the Block K Owners and CP, asCA, to determine the cost of the various components of the PublicImprovements. The Construction Agreement will also include paymentand performance bond requirements that are acceptable to the City. CP, asCA, in accordance with the Construction Agency Agreement, will causethe CMR and all contractors to meet City specifications and comply withOhio Law, including without limitation, prevailing wage requirements.The City will appoint a firm or an individual resident or non-residentprofessional (the "Inspector"), which may carry out its responsibilitiesthrough utilization of one or more resident or non-resident engineers,inspectors, contract compliance professionals and such other individualsor firms that may be necessary, and which shall have the responsibility toinspect, as frequently as the Inspector determines is necessary, theconstruction, contracts, pay applications and construction management ofthe Public Improvements to ensure that the construction, contracts, payapplications and construction management are in accordance withapproved plans and specifications and approved budgets and to ensure thatthe design and construction process follows proper constructionprocedures and otherwise is in accordance with the Construction Agency >«%
CLI-2144412vll 35
Agreement and the Construction Agreement. The costs of the Inspectorshall be paid for as a cost of the Public Improvements.
(c) CP, as CA, guarantees, to the City and AG completion of construction ofthe Required Public Infrastructure, and acknowledges that funds will bedeposited with the Disbursing Agent by either or some combination of CP,CPR, CPPIII and AG, pursuant to the Disbursing Agreement, in anamount sufficient to pay the difference between (i) the Phase IIIGuaranteed Maximum Price, and (ii) the sum of (A) the net proceeds ofthe Bonds deposited in the City Project Fund Account (excluding funds inthe Block K Public Improvements Subaccount) of the Project Fund plus(B) the amount of the 629 Grant, plus (C) AG's Private Contribution, plus(D) AG's Public Contribution, if any, plus (E) CP's Private Contribution,if any, plus (F) CP's Public Contribution, if any, plus (G) the SIB Loanproceeds. CP, as CA, also guarantees to the City completion ofconstruction of the Block K Public Improvements, and acknowledges thatfunds will be deposited with the Disbursing Agent by BK Developerpursuant to the Disbursing Agreement in an amount sufficient to pay thedifference between (i) the Block K Guaranteed Maximum Price and(ii)the net proceeds of the Bonds deposited in the Block K PublicImprovements Subaccount of the Project Fund. The City shall participatein the review and approval process with respect to contractors,subcontractors, and changes in the works within the ConstructionAgreement, as well as in the utilization of allowances and contingencieswithin the Construction Agreement. Any Deficiency shall be borne by CPunless a change order related to the AG Public Infrastructure that increasesthe cost beyond the initial Phase III Guaranteed Maximum Price isapproved in writing by AG and the City, in which case AG shall bear thecost of any increased costs directly related to such change order unless theCity agrees in writing to bear such increased costs. CP, as CA, agrees tocomplete the Public Improvements in accordance with the MasterSchedule. Pursuant to the Construction Agency Agreement, AG has theright, but not the obligation, to assume the CA's obligation to construct theRequired Public Infrastructure, or any portion thereof, if the CA fails to doso.
(i) For purposes of the Transaction Documents, a "Major ChangeOrder" is a change order involving an alteration to the applicableRequired Public Infrastructure that increases the cost by more than$2,500. A Major Change Order does not include a change in themeans and methods of construction if such change in means andmethods results in a cost increase of $2,500 or less. This definitiondoes not affect Section 3.7(a)(i) of the Construction AgencyAgreement because this definition is not used therein.
(ii) No AG Public Major Change Orders shall be made to theConstruction Agreement affecting the AG Public Infrastructure (as
CLI-2144412vll 36
shown on Exhibit A) without first obtaining AG's and the City's ^~written consents, which written consents shall either be given or 1denied within five (5) business days of receipt of written requesttherefor, and if not either given or denied at the end of such five(5) business days, shall be deemed given. The ConstructionAgreement shall provide for a retainage of ten percent (10%),dropping to five percent (5%) when fifty percent (50%) of aparticular subcontractor's work is completed and approved by theInspector.
(iii) No AG Private Major Change Orders shall be made to theConstruction Agreement affecting the Private AG Portion withoutfirst obtaining AG's written consent, which written consent may bewithheld in AG's sole discretion and shall either be given ordenied within five (5) business days of receipt of written requesttherefor, and if not either given or denied at the end of such five(5) business days, shall be deemed given.
(d) The City, AG, CP, CPPIII, CPR, BK Developer, the Block K Owners, theBond Trustee and the Disbursing Agent are entering into the DisbursingAgreement setting forth the procedure for disbursement of Bond proceedsand, to the extent applicable, funds received pursuant to the 629 Grant, theSIB Loan, AG's Private Contribution, AG's Public Contribution, if any,CP's Private Contribution, if any, and CP's Public Contribution, if any, ^with adequate procedures to ensurethat such additional funds are spent forthe purposes for which they are intended.
(i) Disbursements relating to the AG Public Infrastructure and thePrivate AG Portion shall be governed by the AG InfrastructureBudget. The AG Infrastructure Budget shall specify all costs andexpenses of every kind and nature whatsoever to be incurred inconnection with construction of the AG Public Infrastructure or
Private AG Portion, including all costs of labor, materials,equipment and fixtures needed for the completion ofthe AG PublicInfrastructure and Private AG Portion, and all other costs, fees andexpenses relating in any way whatsoever to the construction of theAG Public Infrastructure or Private AG Portion. The initial AG
Infrastructure Budget has been agreed upon by AG, CP and theCity.
(ii) Disbursements relating to the Required Public Infrastructure shallbe governed by the Phase III Cost Budget approved by the City,AG, CP, CPR and CPPIII and disbursements relating to theBlock K Public Improvements shall be governed by the Block KCost Budget approved by the City, CP, the BK Developer and theBK Owners. The Cost Budget shall be complete and shall specifyall costs and expenses of every kind and nature whatsoever
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incurred or to be incurred in connection with construction of thePublic Improvements, including all costs of labor, materials,equipment and fixtures needed for the completion of the PublicImprovements, and all other costs, fees and expenses relating inany way whatsoever to the construction of the PublicImprovements, including, but not limited to, legal fees, financialconsulting fees, architect-engineer consultant fees, inspectioncosts, permit costs, allowances and contingencies. The Phase IIICost Budget will be agreed upon by AG, CP, CPR, CPPIII and theCity prior to the Closing, and the Block K Cost Budget will beagreed upon by the City, BK Developer and the Block K Ownersprior to Closing.
(iii) All changes to the AG Infrastructure Budget shall in all respects besubject to the prior written approval of AG and the City, whichapproval shall not be unreasonably withheld or delayed, except asfollows: (i) no approval by AG or the City of a change in the AGInfrastructure Budget shall be required if such change results fromany Major Change Order that is approved or deemed approved byAG and the City pursuant to Section 5(c) or from any changeorders that do not require approval by AG or the City pursuant toSection 5(c); and (ii) any request for a change in the AGInfrastructure Budget for which approval by AG or the City issought shall be deemed given if not given or denied in writingwithin five (5) business days after such request is delivered to AGand the City. AG and the City each acknowledges and agrees that:(x) the construction budget will contain a budget line item for"contingencies" which CP, as CA, may elect to permit the CM touse in any other budget line item in the AG Infrastructure Budget,following receipt of written approval from AG and the City, whichapproval shall not be unreasonably withheld and shall be deemedgiven ifnot given or denied in writing within five (5) business daysafter such request is delivered to AG and the City, and (y) that theCA may, following receipt of written approval from AG and theCity, which approval shall not be unreasonably withheld and shallbe deemed given if not given or denied in writing within five (5)business days after such request is delivered to AG and the City,permit the CM to shift amounts from one budget line item withinthe AG Infrastructure Budget to another budget line item withinthe AG Infrastructure Budget, as long as the aggregate cost of theAG Public Infrastructure does not increase as a result of such shift.
(e) CP, as CA, may request from the low bidder, Panzica ConstructionCompany (collectively with any affiliate that may serve as CMR,"Panzica"), an agreement to keep its CMR bid open for acceptance for an
jp\ additional thirty days beyond the initial ninety day period, along with a* waiver of any right to request a change order or submit a claim of any
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increased costs due to the delay. Accordingly, in the event that CPrequests such extension from Panzica and is granted such extension byPanzica, the parties expect that Panzica will have no right to request achange order or submit a claim of any increased costs due to the delay.Nevertheless, for the purpose of allocating all possible risks, the partiesagree that if the waiver is deemed ineffective by a court or otherappropriate adjudicative entity and Panzica requests a change order orsubmits a claim of any increased costs due to the delay, CP and AG eachagree to pay 50% (i.e., 100% in total) of any additional amounts due to theCMR, provided that such amounts may be paid out of the ContingencySubaccount of the City Project Fund subaccount of the Project Fund (asboth are defined in the Indenture) if funds are available in such account.
6. Payment ofDebt Service on Bonds.
(a) The City has granted a 100%tax exemption for up to 30 years pursuant tothe TIF Ordinance, subject to the City's obligation to pay to the SchoolDistrict, pursuant to the Compensation Agreement, an amount described inSection 2 of the Compensation Agreement (the "School District'sShare") that for each year of the TIF exemption for TIF District Phase 1 isequal to the greater of (i) 25% of what would have been the SchoolDistrict's share of increased real property tax revenues from the parcelswithin TIF District Phase 1 if the exemption had not been granted, and(ii) $455,000, to the extent such amount is received by the City as Service ^Payments or Shortfall Payments; and that for each year of the TIFexemption for TIF District Phase 2 is equal to the greater of (i) 25% ofwhat would have been the School District's share of increased realproperty tax revenues from the parcels within TIF District Phase 2 if theexemption had not been granted, and (ii) 25% of what would have beenthe School District's share of increased real property tax revenues fromthe parcels within TIF District Phase 2 if the exemption had not beengranted and had the real property taxes on the Improvements in TIFDistrict Phase 2 been equal to (a) $2,400 per hotel room, (b) $3.50 perrentable square foot for retail improvements in the area north of UnionStreet, (c) $4.50 per rentable square foot for retail improvements in thearea south of Union Street, and (d) $3.00 per rentable square foot foroffice improvements, per year for the tax years for which suchImprovements in the TIF District Phase 2 are exempted under the TIFOrdinance, to the extent such amount is received by the City as ServicePayments or Shortfall Payments.
(b) CP, CPPIII, CPR, AG and Land agree on behalf of themselves and theirsuccessors that the Phase 1 Owners will be obligated to make the Phase IIIService Payments in an amount equal, for each of their respective parcels,to the real property taxes that would have been payable on each suchparcel, in the absence of exemption, on the increased assessed value of the <**%applicable parcel over its tax year 2011 assessed value. Phase III Service
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Payments will be used, in the orderset forth in the DisbursingAgreement,to pay the School District's Share, to pay Debt Service on the Bonds and,to pay loan payments on the SIB Loan.
(c) CP, CPPIII, CPR, AG and Land agree on behalf of themselves and theirsuccessors that, notwithstanding the assessed valuation from time to timeof the Phase 1 Parcels, the Phase 1 Owners shall pay Phase III ServicePayments to the County and, if necessary, Phase III Project ShortfallPayments to the Disbursing Agent, on their respective parcels each year inamounts not less than the amounts set forth on the Shortfall PaymentsSchedule, which amounts shall be used, in the order set forth in theDisbursing Agreement, to pay Debt Service, to pay the School District'sShare, to pay loan payments on the SIB Loan, and otherwise in accordancewith the Disbursing Agreement, this Agreement, the Indenture and the TIFDeclaration. Until the Commercial Rental Apartment Project iscompleted, CP shall guarantee CPR's obligation to pay Phase III ProjectShortfall Payments with respect to the parcels owned by CPR. The Cityshall use its best efforts to cause the collection of the Phase III Service
Payments and the Phase III Project Shortfall Payments and to transferthose revenues to the Disbursing Agent upon receipt by the City. Theobligation of the Phase 1 Owners to pay to the Disbursing Agent Phase IIIProject Shortfall Payments on their respective Phase 1 Parcels and relatedobligations, including the obligation to make Phase III Service Payments,the obligation to refrain from converting the Commercial RentalApartment Project to condominiums as set forth in Section 3(c) of thisAgreement, the obligation to refrain from seeking assessed valuereductions as set forth in Section 7, the obligation to make tax payments orPhase III Service Payments, if necessary, in respect of the Required PublicInfrastructure or the land on which it is situated as set forth in
Section 8(d), the obligation to maintain casualty insurance on theirrespective buildings as set forth in Section 15(i) and the obligation to payincreased Phase III Project Shortfall Payments, if necessary, as describedin divisions (h) and (i) of Section 4, are set forth in the TIF Declarationswhich are being recorded in the land records of Cuyahoga County inconnection with the execution of this Agreement and the issuance of theBonds.
(d) To the extent that the Phase III Service Payments (or Phase III ProjectShortfall Payments, if payable) exceed the amounts necessary to pay theDebt Service on the portion of the Bonds attributable to the RequiredPublic Infrastructure and the loan payments on the SIB Loan, the SchoolDistrict's Share with respect to the TIF District Phase 1, and otherpayments authorized pursuant to subdivisions First through Fifth ofdivision (a) of Section 4.3 of the Disbursing Agreement, any excess shallbe used (i) first, only to the extent that excess Phase III Service Paymentsare attributable to a delay by the State or the County in processing orapproving tax increment financing exemption applications, to reimburse
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Phase 1 Owners for the amount of Phase III Project Shortfall Paymentsmade solely as a result of that delay; provided, however, that if as a resultof any delay by the State or the County in processing or approving taxincrement financing exemption applications, any refund of real estatetaxes or service payments due to the Phase 1 Owners because of suchdelay is deducted from the general distribution of tax revenues to the City(instead of from distributions of Phase III Service Payments paid by thePhase 1 Owners to the County and to be distributed to the City), suchexcess Phase III Service Payments shall be used to reimburse the City forsuch deduction; (ii) second, to reimburse CP for any Phase III Deficiencythat was paid for by CP in connection with the Required PublicInfrastructure, unless such Phase III Deficiency was caused by thenegligence or reckless disregard of CP (provided, however, CP shall notbe considered negligent if it reasonably relies on the advice of the CMRwith respect to construction matters or a third-party architect with respectto design matters), and to reimburse CP for any payment made by CP inrespect of the indemnification as set forth in Section 9.8 of theConstruction Agency Agreement, but only for sales and use taxes, if any,attributable to the Required Public Infrastructure; (iii) third, to reimburseAG and CP, for any AG Public Contribution and any CP PublicContribution. (In the event that both AG and CP have made PublicContributions, such reimbursement shall be made to both AG and CP inproportion to the respective Phase III Service Payments and, if necessary,Phase III Project Shortfall Payments which their respective Phase 1Owners are required to make, and after AG or CP has been reimbursed infull, then the next dollars shall be paid to the otherparty until such party isfully reimbursed); (iv) fourth, in the event that there is a change orderrequested by AG or CP and approved by the City in the Required PublicInfrastructure on its property for which the requesting party is required tocontribute additional funds to pay for the costs of such change order, toreimburse such party for such additional contribution; (v) fifth, in theCity's sole discretion, after consultation with AG and CP, for any one orcombination of the following: (A) to fund a debt service reserve fund forthe Bonds not greater than the greatest of (x) ten percent of the principalamount of the Bonds attributable to the Phase III Project, or (y) averageannual principal and interest on the Bonds attributable to the Phase IIIProject or (z) maximum annual principal and interest on the Bondsattributable to the Phase III Project; (B) to fund a reasonable capitalreplacement fund for the Required Public Infrastructure, subject to receiptof an opinion of bond counsel to the City that such use does not adverselyaffect the tax-exempt status ofthe Bonds; (C) for full or partial redemptionof Bonds at the earliest optional redemption date; (D) for full or partialearly repayment of the SIB Loan; or (E) for additional publicinfrastructure improvements that directly benefit the TIF District Phase 1Parcels. Any capital expenditures for additional infrastructureimprovements made in connection with the application of any excess
CLI-2144412vll 41
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Service Payments relating to the TIF District Phase 1 Parcels shall besubject to AG's reasonable approval, which approval shall be granted if(a) the expenditureis determined by the City to be a proper expenditureofexcess Service Payments under applicable law and (b) to the extent thatthe source of such excess Service Payments is the AG Parcels, theexpenditure is determined by AG in its reasonable discretion, to benefitthe AG Project.
(e) The Block K Owners agree on behalf of themselves and their successorsthat, notwithstanding the assessed valuation from time to time of theBlock K Parcels, the owners of the Block K Parcels shall pay Block KService Payments to the County and, if necessary, Block K ShortfallPayments to the Disbursing Agent, on their respective parcels each year inamounts not less than the amounts set forth on the Shortfall PaymentsSchedule, which amounts shall be used, in the order set forth in theDisbursing Agreement, to pay Debt Service, to pay the School District'sShare, and otherwise in accordance with the Disbursing Agreement, thisAgreement, the Indenture and the TIF Declaration. The City shall use itsbest efforts to cause the collection of the Block K Service Payments andthe Block K Shortfall Payments and to transfer those revenues to theDisbursing Agent upon receipt by the City. The obligation of the ownersof the Block K Parcels to pay to the Disbursing Agent Block K ShortfallPayments on their respective Block K Parcels and related obligations,including the obligation to make Block K Service Payments, theobligation to refrain from seeking assessed value reductions as set forth inSection 2, the obligation to make tax payments or Block K ServicePayments, if necessary, in respect of the Block K Public Improvements orthe land on which they are situated as set forth in Section 8(d), theobligation to maintain casualty insurance on their respective buildings asset forth in Section 15(i) and the obligation to pay increased Block KShortfall Payments, if necessary, as described in divisions (h) and (i) ofSection 4, are set forth in the TIF Declarations which are being recorded inthe land records of Cuyahoga County in connection with the execution ofthis Agreement and the issuance ofthe Bonds.
(f) To the extent that the Block K Service Payments (or Block K ShortfallPayments, if payable) exceed the amounts necessary to pay the DebtService on the portion of the Bonds attributable to the Block K PublicImprovements, the School District's Share with respect to TIF DistrictPhase 2 and other payments authorized pursuant to subdivisions Firstthrough Fifth of Division (a) of Section 4.3 of the Disbursing Agreement;any excess shall be used (i) first, only to the extent that excess Block KService Payments are attributable to a delay by the State or the County inprocessing or approving tax increment financing exemption applications,to reimburse the Block K Owners for the amount of Block K Shortfall
Payments made solely as a result of that delay; provided, however, that ifas a result of any delay by the State or the County in processing or
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approving tax increment financing exemption applications, any refund ofreal estate taxes or service payments due to the Block K Owners becauseof such delay is deducted from the general distribution of tax revenues tothe City (instead of from distributions of Block K Service Payments paidby the Block K Owners to the County and to be distributed to the City),such excess Block K Service Payments shall be used to reimburse the Cityfor such deduction; (ii) second, to reimburse CP for any Block KDeficiency that was paid for by CP in connection with the Block K PublicImprovements, unless such Block K Deficiency was caused by thenegligence or reckless disregard of CP (provided, however, CP shall notbe considered negligent if it reasonably relies on the advice of the CMRwith respect to construction matters or a third-party architect with respectto design matters), and to reimburse CP for any payment made by CP inrespect of the indemnification as set forth in Section 9.8 of theConstruction Agency Agreement, but only for sales and use taxes, if any,attributable to the Block K Public Improvements; (iii) third, to reimburseCP or BK Developer for any funds which are contributed by CP or BKDeveloper toward the costs of the Block K Public Improvements;(iv) fourth, with the mutual approval ofthe City and the BK Developer, tobe applied toward the cost of any public infrastructure improvementspermitted by the TIF Ordinance, whether at the Block K Development oras part of the Development; and (v) fifth, in the City's sole discretion,after consultation with the BK Developer, for any one or combination ofthe following: (A) to fund a debt service reserve fund for the Bonds not 1greater than the greatest of (x) ten percent of the principal amount of theBonds attributable to the Block K Public Improvements, or (y) averageannual principal and interest on the Bonds attributable to the Block KPublic Improvements, or (z) maximumannual principal and interest on theBonds attributable to the BlockK Public Improvements; (B) to fund areasonable capital replacement fund for the Block K Public Improvements,subject to receipt of an opinion of bond counsel to the City that such usedoes not adversely affect the tax-exempt status of the Bonds; (C) for fullor partial redemption of Bonds at the earliest optional redemption date; or(D) for additional public infrastructure improvements that directly benefitthe TIF District Phase 2 Parcels.
(g) Pursuant to the terms of the Disbursing Agreement and the Indenture, tothe extent that collected Service Payments and Shortfall Payments areinsufficient to pay debt service on the Bonds, the City shall pay debtservice on the bonds from non-tax revenues of the City.
7. School District Compensation. In order to facilitate the issuance of the Bonds, theCity has entered into the Compensation Agreement with the School District. In theCompensation Agreement, the City has made the following commitments to the School District(the "School District Commitments"), which are hereby consented to by AG, CP, CPPIII, CPR,Land, BK Developer and the Block KOwners, and incorporated into this Agreement: ^
CLI-2144412vll 43
/^K
(a) The exemption granted by the City under the TIF Ordinance isconditioned upon AG spending at least $10,000,000 in combined hard andsoft costs, including no less than $5,000,000 in hard costs, on theconstruction of the AG Building as certified by AG's Chief FinancialOfficer or another authorized AG officer;
(b) The School District is hereby identified as an intended third partybeneficiary of this Agreement, but only with respect to the payments to bemade to the School District pursuant to the Compensation Agreement andwith respect to the enforcement of the School District Commitments;
(c) Neither the amount of nor timing for payment of the Minimum AnnualSchool District Property Tax Compensation (as defined in theCompensation Agreement) shall be modified without the written consentof the School District;
(d) The length of the exemption granted by the City for any portion of the TIFDistrict pursuant to the TIF Ordinance or any amendment thereto shall notbe modified without the written consent of the School District;
(e) The boundaries of the TIF District to be exempted by the City pursuant tothe TIF Ordinance or any amendment thereto shall not be expandedwithout the written consent of the School District;
(f) The terms of this Agreement as pertaining to the Service Payments andShortfall Payments shall run with the land and be binding upon thesuccessors and assigns of the parties thereto as provided in the TIFDeclarations;
(g) For each parcel within the TIF District for which Shortfall Payments aredue, a TIF Declaration shall be filed prior to the closing of any note orbond financing of the Required Public Infrastructure or Block K PublicImprovements, which TIF Declaration shall make the Service Paymentsand any necessary Shortfall Payments with respect to that portion of theapplicable property senior to all obligations arising from ground leases,other leases, mortgages, trust indentures, bond indentures and other debtinstruments (collectively, the "Instruments") with respect to these parcelsso that the provisions of the TIF Declaration shall remain enforceablefollowing any foreclosure or termination of such Instruments;
(h) To the extent feasible, the TIF Declarations shall not be deemed executorycontracts terminable in bankruptcy proceedings under Title 11 of theUnited States Code;
(i) The owner of the AG Retail Parcels agrees not to commence or pursue anycomplaint or proceeding in the Cuyahoga County Board of Revision orotherwise in which it seeks a decrease in the assessed value of the AG
Retail Parcels unless and until (A) the aggregate true value of the AG
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Retail Parcels, as determined by the Cuyahoga County Fiscal Officer, ^inclusive of the value of the Improvements which are the subject of the ?TIF Ordinance but exclusive of the value of the Required PublicInfrastructure (the "Overall Private Value"), exceeds $12,500,000 in truevalue, and (B) the aggregate Overall Private Value of the AG RetailParcels, the Extension Building Parcels and the Infill Building Parcelsexceeds $39,000,000 in true value, in which case any such complaint orproceeding shall not seek a decrease which would result in the aggregateOverall Private Value of the AG Retail Parcels being less than$12,500,000 or in the aggregate Overall Private Value of the AG RetailParcels, the Extension Building Parcels and the Infill Parcels being lessthan $39,000,000;
(j) The owner(s) of the Extension Buildings Parcels and Infill Parcels agreesnot to commence or pursue any complaint or proceeding in the CuyahogaCounty Board of Revision or otherwise in which it or they seek(s) adecrease in the assessed value of the Extension Buildings Parcels andInfill Parcels unless and until (A) the aggregate Overall Private Value ofthe Extension Buildings Parcels and the Infill Parcels exceeds $26,500,000in true value, and (B) the aggregate Overall Private Value of the AG RetailParcels, the Extension Building Parcels and the Infill Parcels exceeds$39,000,000 in true value, in which caseany such complaint or proceedingshall not seek a decrease which would result in the aggregate OverallPrivate Value of the Extension Building Parcels and the Infill Parcels 1being less than $26,500,000 or in the aggregate Overall Private Value ofthe AG Retail Parcels, the Extension Building Parcels and the InfillParcels being less than $39,000,000;
(k) The owner of the AG Building Parcel agrees not to commence or pursueany complaint or proceeding in the Cuyahoga County Board of Revisionor otherwise in which it seeks a decrease in the assessed value of the AGBuilding Parcel unless and until the Overall Private Value of the AGBuilding Parcel exceeds $98,000,000 in true value, in which case any suchcomplaint or proceeding shall not seek a decrease which would result inthe Overall Private Value of the AG Building Parcel being less than$98,000,000.
8. Ownership and Maintenance ofPublic Improvements.
(a) The Public Improvements will be public property of the City. The parcelsof land on which the streets, sidewalks and related amenities which arepart of the Required Public Infrastructure to be constructed (including, butnot limited to, benches, trees, fencing, bollards, street signs, plantings,etc.) are being conveyed by AG and CP, respectively, to the City in fee bylimited warranty deed in connection with the Closing. To the extent thatthe owner of such parcels has constructed Required Public Infrastructure x=5%thereon within fourteen (14) months prior to Closing and prior to such
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conveyance, the City shall pay the cost of such construction from theproceeds of the Bonds deposited in the City Project Fund Account(excluding funds in the Block K Public Improvements Subaccount) of theProject Fund at such time as the CPPIII Disbursement Conditions aresatisfied. The Block K Public Improvements will be built on easementrights granted by BK Developer to the City, and to the extent that theowner of such parcels has constructed Block K Public Improvementsthereon within (14) months prior to the Closing and prior to the grant ofsuch easements, the City shall pay the cost of such construction from theproceeds of the Bonds deposited in the Block K Public ImprovementsSubaccount of the City Project Fund Account of the Project Fund at suchtime as the Block K Disbursement Conditions are satisfied. Becausecertain Public Improvements will be constructed directly adjacent toprivate improvements (e.g., sidewalks adjacent to buildings), easementswill be recorded, by plat or otherwise, to provide that, to the extent any ofthe Public Improvements encroaches on private property, the City shallhave rights and interests with respect to that Public Improvements that aresubstantially equivalent to its rights and interests with respect to PublicImprovements constructed on land owned by the City. Simultaneously,the parcels on which the Public Parking Facilities will be constructed willbe ground leased by AG and Land, respectively, to the City pursuant totheir respective Ground Leases. The term of each Ground Lease will beat least ten years longer than the expected useful life of the Public ParkingFacilities. Upon the expiration of each Ground Lease, the ownership ofeach Public Parking Facility will revert to the lessor under such GroundLease as provided by law. The CP Project and the Required PublicInfrastructure (with the exception of the H Garage) shall be subject to theREA, as approved by the City, AG, CP, CPPIII, CPR and Land, whichwill not, in the opinion of the City's bond counsel, adversely affect theexclusion from gross income of the interest on the Bonds and which willnot, in the opinion of the City's TIF counsel, adversely affect thequalification of the Required Public Infrastructure as "public infrastructureimprovements" under Section 5709.40 ofthe Ohio Revised Code.
(b) As a condition of the City's agreement to issue the Bonds and of AG'sagreement to construct the AG Project, CPM, an affiliate of CP, CPR,CPPIII, BK Developer and the Block K Owners, has assumedresponsibility to manage and maintain the Public Improvements as agentof the City, has assumed responsibility to manage and maintain the PrivateAG Portion as agent of AG, has assumed responsibility to manage andmaintain, the Private CP Portion, if any, as agent of Land, and has agreedto pay costs and expenses associated with such management andmaintenance, all in its role as Manager pursuant to the ManagementAgreement. Pursuant to the Management Agreement, AG shall have theright, but not the obligation, to assume and perform certain of CPM'sobligations as Manager in the event that CPM defaults in such obligations.The Management Agreement, as the same shall be amended from time to
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time, and the actions of the Manager thereunder, shall not adversely affectthe exclusion from gross income of the interest on the Bonds and shall notadversely affect the qualification of the Required Public Infrastructure as"public infrastructure improvements" under Section 5709.40 of the OhioRevised Code.
(c) Parking meters as partof the Public Improvements will be installed for on-street parking, the revenues from which will be delivered to the BondTrustee for deposit into the Project Management Fund and applied by theManager toward the cost of managing and maintaining the PublicImprovements, all in accordance with the Management Agreement.Unless otherwise specified in the Management Agreement, theenforcement of the parking meters shall be pursuant to a Memorandum ofUnderstanding executed in 2005 among the City, the Toledo-LucasCounty Port Authority, CP and CPM with respect to parking meters in theexisting portions ofthe Development.
(d) AG, Land and BK Developer expect that the Public Improvements and theland on which they are situated will not be subject to real property taxationor a requirement to make Service Payments. However, in the event thatany such real property taxes or Service Payments are assessed (i) onparcels that are ground leased to the City or on improvements on or abovethose parcels, or (ii) on parcels that are subject to the REA or a long-termeasement to the City or on improvements on or above those parcels, AG, /^Land or BK Developer in their respective capacities as the ground lessorand/orowner of applicable parcels, will pay taxes or Service Payments, allsubject to a right to contest the applicability or amount of such taxes orService Payments, and upon written request from the City, shall provideproof of payment to the City. Land's obligations to pay taxes or ServicePayments is hereby guaranteedby CP.
9. Use of Parking Facilities. The parking facilities shall be used as follows:
(a) (i) The Private AG Portion will be paid for by AG's PrivateContribution, and will, therefore, be a private parking facilityreserved exclusively for the use ofAG and its invitees.
(ii) The Private CP Portion, if any, will be paid for by CP's PrivateContribution and will, therefore, be a private parking facilityreserved exclusively for the use of CP and its invitees.
(iii) The parking garage being constructed and owned by CD Garagewill be privately financed and will be a private parking facility tobe used as CD Garage sees fit, subject to applicable laws andregulations.
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(b) As an inducement to AG to establish its corporate headquarters within theCity and to construct the AG Project, and provided that AG complies withthe Parking Incentive Requirements, the City shall provide AG with therights and privileges set forth in this Section 9(b) (the "ParkingIncentive"). Within the Public Parking Facilities, the City shall allocateto AG the maximum number of parking spaces (the "10% Reserve")permitted which would not cause the use of the Public Improvements to be"private business use" withinthe meaningof the IRS Rules, determined bythe City's bond counsel in consultation with AG. This determination shallbe made without including the anticipated expenditures on the Block KPublic Improvements. Except for the CP Allocation, the entire 10%Reserve shall be located on floors in the Public H Garage, as designatedby AG. Sixty-nine (69) spaces within the 10% Reserve shall be allocatedto the F Parking Garage for exclusive use by Trader Joe's and its inviteesfor up to twelve (12) hours per day seven days a week and spaces inthe G Parking Garage shall be allocated for private uses as determined byCP [to be calculated based on the ratio between the costs of theBlock K Public Improvements and the costs of the Required PublicInfrastructure] (the "CP Allocation"). Upon the expiration ortermination of the lease agreement between Crocker Park Delaware, LLCand Trader Joe's East, Inc., ("Trader Joe's") dated September 10, 2002, assuch lease agreement may be amended or extended, the portion of the CPAllocation attributable to Trader Joe's shall expire, and that portion of the10% Reserve shall be located wholly within the Public H Garage. In orderto continue to qualify for the Parking Incentive after calendar year 2016,AG shall meet the Parking Incentive Requirements.
(c) All of the remaining parking spaces within the Public H Garage shall beavailable to the public in accordance with IRS Rules, which rules andregulations shall also apply to the other Public Parking Facilities. At thediscretion of the City, permit parking may be provided to members of thegeneral public on a first-come, first-served basis for reserved spaces in thePublic Parking Facilities, in accordance with written procedures, rules andrestrictions approved by the City and described in the ManagementAgreement.
10. Municipal Tax Credit for AG. As an inducement to AG to relocate itsheadquarters to the City, and as a condition for AG's obligation to close on the transactionscontemplated by this Agreement, the City has agreed to provide AG with a refundable municipaltax credit, pursuant to the terms and conditions set forth in a separate Tax Credit Agreementbetween the City and AG to be executed in connection herewith.
11. City Approvals. Notwithstanding this Agreement, CP, for itself and as CA,CPPIII, CPR, Land, BK Developer, the Block K Owners and AG shall be obligated to apply forand obtain all necessary City approvals and permits for the Projects, pursuant to all applicableCity ordinances, rules and regulations. The City's execution of this Agreement does not indicate
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or imply that any such approvals have been or must be approved by the Planning Commission orCity Council.
12. Market Square Project. In connection with the issuance of the Bonds, the Cityand CP renewed their previous discussions concerning the so-called "Market Square Project" tobe owned by the City on the approximately 2.0-acre site identified on the Proposed Plan (the"Market Square Land") and have agreed to the terms of an agreement (the "Market SquareAgreement") concerning the scope and design of the Market Square Project; conditionsprecedent to the construction of the Market Square Project, including availability of funds forsuch construction; the manner and timing of the conveyance of the Market Square Land to theCity; construction of the Market Square Project; and operations and maintenance responsibilitiesin respect of the Market Square Project. The City agrees that, if and when the Market SquareLand is conveyed by CP to the City pursuant to the Market Square Agreement, such conveyancewill satisfy CP's commitment to convey land to the City which was made in connection with theinitial rezoning of the Development.
13. Clemens Road Improvements. As an inducement to CP and AG to proceed withthe transactions contemplated by this Agreement, the City agreed to proceed with the previously-announced Clemens Road improvements at Crocker Road just north of Interstate 90. The Partiesacknowledge that these improvements have been completed.
14. Incentive for Block K Development. [OPENj As an incentive for theconstruction of the Block K Development, the City agrees to pay an annual amount equal to thelesser of (i) $150,000, or (ii) 50% of the City's lodging tax receipts from any hotel or hotels ^%located in TIF District Phase 2, to CPM for the maintenance and repair of the Required PublicInfrastructure and/or for the Block K Public Improvements. [CP has agreed to drop thisrequirement in the event the City decides to include the Block K Public Improvements inits TIF Bond issuance.]
15. Additional Agreements and Covenants.
(a) Right of Inspection. Subject to reasonable security and safety regulationsand upon reasonable notice to the Manager, CP, CPPIII, CPR, Land, BKDeveloper, the Block K Owners or AG, as applicable, the City and theBond Trustee, and their respective agents, shall have the right duringnormal business hours to inspect the Projects.
(b) Investment of Funds. The City and CP, as CA, each hereby covenants thateach, as applicable, will restrict the investment and reinvestment and useof the proceeds of the Bonds in such manner and to such extent, if any, asmay be necessary, after taking into account reasonable expectations at thetime of delivery of and payment for the Bonds or subsequent intentionalacts, so that the Bonds will not constitute arbitrage bonds underSection 148 of the Internal Revenue Code of 1986.
(c) The City. CP. CPPIII. CPR. Land. CPM. BK Developer. Block K Ownersand AG Not to Adversely Affect Exclusion from Gross Income of Interest "i
CLI-2144412vll 49
/*^$k
on the Bonds. The City, CP, CPPIII, CPR, CPM, BK Developer, Block KOwners and AG (severally and not jointly, except as provided inSection32 of this Agreement, and to the extent within their respectivepower and control) hereby represent that they have taken and caused to betaken, and covenant that they will take and cause to be taken, all actionsthat may be required of them, to the extent within their respective control,alone or in conjunction with each other, for the interest on the Bonds to beand remain excluded from gross income for federal income tax purposes,and represent that they have not taken or permitted to be taken on theirbehalf, and covenant that they will not take or permit to be taken on theirbehalf, any actions that would adversely affect such exclusion under theprovisions of the IRS Rules; provided that compliance with such covenantshall not require the City to expend its own funds, other than any moneysavailable under the Indenture for such purpose.
(d) The City. CP. CPPIII. CPR. Land. CPM. BK Developer. Block K Ownersand AG Not to Adversely Affect Classification of Required PublicInfrastructure as "Public Infrastructure Improvements". The City, CP,CPPIII, CPR, CPM, BK Developer, Block K Owners and AG (severallyand not jointly, except as provided in Section 32 of this Agreement, and tothe extent within their respective power and control) hereby represent thatthey have taken and caused to be taken, and covenant that they will takeand cause to be taken, all actions that may be required of them, to theextent within their respective control, alone or in conjunction with eachother, for the Public Improvements to be classified as "publicinfrastructure improvements" as defined in Section 5709.40 of the OhioRevised Code, and represent that they have not taken or permitted to betaken on their behalf, and covenant that they will not take or permit to betaken on their behalf, any actions that would adversely affect suchclassification.
(e) Litigation Notice; Management.
(i) CP shall give the Bond Trustee and the City prompt notice of anyaction, suit or proceeding by or against CP at law or in equity, orbefore any governmental instrumentality or agency, or of any ofthe same which is threatened in writing, of which CP has notice,which, if adversely determined, is reasonably likely to materiallyimpair the right or ability of CP to carry on the business activitiesof CP or the right or ability to proceed as CA in respect of theRequired Public Infrastructure or is reasonably likely to materiallyand adversely affect its ability to perform its obligations hereunderor under any of the Transaction Documents.
(ii) CPPIII shall give the Bond Trustee and the City prompt notice ofany action, suit or proceeding by or against CPPIII at law or inequity, or before any governmental instrumentality or agency, or of
CLI-2144412vll 50
any of the same which is threatened in writing, of which CPPIIIhas notice, which, if adversely determined, is reasonably likely tomaterially impair the right or ability of CPPIII to carry on thebusiness activities of CPPIII or the right or ability to operate theCP Project (excluding the Commercial Rental Apartment Project)or is reasonably likely to materially and adversely affect its abilityto perform its obligations hereunder or under any of theTransaction Documents.
(iii) CPR shall give the Bond Trustee and the City prompt notice of anyaction, suit or proceeding by or against CPR at law or in equity, orbefore any governmental instrumentality or agency, or of any ofthe same which is threatened in writing, of which CPR has notice,which, if adversely determined, is reasonably likely to materiallyimpair the right or ability ofCPR to carry on the business activitiesof CPR or the right or ability to operate the Commercial RentalApartment Project or is reasonably likely to materially andadversely affect its ability to perform its obligations hereunder orunder any ofthe Transaction Documents.
(iv) The Block K Owners shall give the Bond Trustee and the Cityprompt notice of any action, suit or proceeding by or against theBlock K Owners at law or in equity, or before any governmentalinstrumentality or agency, or of any of the same which is ^threatened in writing, of which any of the Block K Owners hasnotice, which, if adversely determined, is reasonably likely tomaterially impair the right or ability of the Block K Owners tocarry on the business activities of the Block K Owners or the rightor ability to operate any part of the Block K Development or isreasonably likely to materially and adversely affect its ability toperform their obligations hereunder or under any of theTransaction Documents.
(v) Land shall give the Bond Trustee and the City prompt notice ofany action, suit or proceeding by or against Land at law or inequity, or before any governmental instrumentalityor agency, or ofany of the same which is threatened in writing, of which Land hasnotice, which if adversely determined, is reasonably likely tomaterially impair the right or ability of Land to carry on thebusiness activities of Land or the right or ability to own the PrivateCP Portion or is reasonably likely to materially and adverselyaffect its ability to perform its obligations hereunder or under anyof the Transaction Documents.
(vi) CPM shall give the Bond Trustee and the City prompt notice ofany action, suit or proceeding by or against CPM at law or inequity, or before any governmental instrumentality or agency, or of
CLI-2144412vll 51
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any of the same which is threatened in writing, of which CPM hasnotice, which, if adversely determined, is reasonably likely tomaterially impair the right or ability of CPM to carry on thebusiness activities of CPM or the right or ability to manage theRequired Public Infrastructure or is reasonably likely to materiallyand adversely affect its ability to perform its obligations hereunderor under any of the Transaction Documents.
(vii) AG shall give the Bond Trustee and the City prompt notice of anyaction, suit or proceeding by or against AG at law or in equity, orbefore any governmental instrumentality or agency, or of any ofthe same which is threatened in writing, of which AG has notice,but only to the extent such information is a matter of public recordand which, if adversely determined, is reasonably likely tomaterially impair the right or ability ofAG to carry on the businessactivities of AG or the right or ability to operate the AG Project oris reasonably likely to materially and adversely affect its ability toperform its obligations hereunder or under any of the TransactionDocuments.
(f) Assignment by CP. CPPIII. CPR. CPM. BK Developer or the Block KOwners. Prior to the Final Completion Date, this Agreement may not beassigned by CP, CPPIII, CPR, Land, CPM, BK Developer or the Block KOwners except to a CP Affiliate, and pursuant to the CP AssignmentConditions and in accordance with the terms of the ManagementAgreement (provided such assignment is approved by AG in its solediscretion) or, with respect to CP, except to the extent necessary under theConstruction Agency Agreement to enable a successor in interestthereunder to perform the obligations of the CA upon the occurrence of anevent of default as provided therein. CP, CPR, CPPIII, Land, CPM, BKDeveloper or the Block K Owners shall be required to provide the Cityand AG prompt notice of such an assignment. Subsequent to the FinalCompletion Date, in addition to transfers to a CP Affiliate, so long as noEvent of Default has occurred or shall be continuing, this Agreement maybe assigned by CPM in accordance with the terms of the ManagementAgreement, and this Agreement may be assigned in whole or in part byCP, CPR, Land, CPPIII, BK Developer or the Block K Owners withoutthe necessity of obtaining the consent of the City, the Bond Trustee, or theholders of the Bonds, subject, however, to each of the followingconditions (the "CP Assignment Conditions"): (i) any assignee from CP,CPR, Land, CPPIII, CPM, BK Developer or the Block K Owners shallassume in writing each of the obligations, covenants and requirements ofthe assignor hereunder; (ii) the assignor shall, not less than thirty (30) daysprior to the date of execution thereof, furnish or cause to be furnished tothe City and the Bond Trustee a copy of the proposed form of each suchassignment together with any instrument of assumption, which assignmentand assumption shall be reasonably satisfactory in form and substance to
CLI-2144412vll 52
the City and the Bond Trustee; and (iii) the assignor shall within ten (10)business days subsequent to the execution thereof, furnish or cause to befurnished to the City and the Bond Trustee a true and complete copy ofeach such executed assignment and/or assumption together with anyinstrument of assignment. This Agreement shall not be assigned by any ofthe entities set form in this subsection (f) prior to the Closing.
(g) Assignment by AG. Prior to the Final Completion Date (as defined in theIndenture), this Agreement may not be assigned by AG, except to an AGAffiliate and pursuant to the AG Assignment Conditions. AG shall berequired to provide the City and CP prompt notice of such an assignment.Subsequent to the Final Completion Date, in addition to transfers to an AGAffiliate, so long as no Event of Default has occurred or shall becontinuing, this Agreement may be assigned by AG in connection with thetransfer of the AG Building without the necessity of obtaining the consentof the City, the Bond Trustee, or the holders of the Bonds, subject,however, to each of the following conditions (the "AG AssignmentConditions"): (i) any assignee from AG shall assume in writing each ofthe obligations, covenants and requirements of the assignor hereunder;(ii) the assignor shall, not less than thirty (30) days prior to the date ofexecution thereof, furnish or cause to be furnished to the City and theBond Trustee a copy of the proposed form of each such assignmenttogether with any instrument of assumption, which assignment andassumption shall be reasonably satisfactory in form and substance to the 1City and the Bond Trustee; and (iii) the assignor shall within ten (10)business days subsequent to the execution thereof, furnish or cause to befurnished to the City and the Bond Trustee a true and complete copy ofeach such executed assignment and/or assumption together with anyinstrument of assignment. This Agreement shall not be assigned by AGprior to the Closing.
(h) Insurance on Public Improvements. CPM, as Manager, shall keep orcause to be kept the Public Improvements continuously insured inaccordance with the Management Agreement, provided that through theFinal Completion Date for each portion of the Public Improvements, CP,as the CA, shall provide insurance in accordance with the ConstructionAgency Agreement.
(i) Property Insurance on AG Project. CP Project Commercial RentalApartment Project, and Block K Development. AG, CPPIII, CPR, and theBlock K Owners, on behalf of themselves and their successors in interestwith respect to their respective Projects, each agrees at all times while theBonds are outstanding to maintain or cause the maintenance of propertyinsurance on the AG Project, the CP Project (excluding the CommercialRental Apartment Project) the Commercial Rental Apartment Project, andthe respective portions of the Block K Development, respectively, with ^insurance carriers with an AM Best's Rating of A- (Excellent) and
CLI-2144412vll 53
financial size of VIII or higher, in aggregate coverage amounts equal to atleast 100% of replacement costs of the respective Projects and withcommercially reasonable deductible levels ("Required Private PropertyCasualty Coverage"). AG, CPPIII, CPR and the Block K Owners furtheragree that the net proceeds of insurance arising from any event of damageor destruction with respect to the AG Project, the CP Project (excludingthe Commercial Rental Apartment Project) the Commercial RentalApartment Project, and the respective portions of the Block KDevelopment, respectively, shall be used to pay for the costs of restorationof such damage or destruction for that portion of the Project for whichinsurance proceeds are received. The City acknowledges that anymortgage financing placed upon the AG Project, the CP Project, theCommercial Rental Apartment Project or the respective portions of theBlock K Development will likely provide that property insurance proceedsbe payable to the mortgagee and that the mortgagee have certain controlsover the use of property insurance proceeds. Under such circumstances,the owner of the applicable portion of the Project agrees to usecommercially reasonable efforts to cause any such mortgagee to agree inits loan documents to permit property insurance proceeds to be used forrestoration of their respective Projects subject only to standard limitationssuch as requiring a reasonable demonstration that net proceeds will besufficient to restore or giving the mortgagee the right to elect to applyinsurance proceeds to pay down the loan balance during the last year ofthe loan term.
(j) As required by the TIF Declarations, the Phase 1 Owners and the Block KOwners, (A) shall prepare, execute, and file, or cause to be prepared andfiled, all necessary applications and supporting documents to obtain theexemption from real property taxation authorized by the TIF Ordinanceand to enable the City to collect the Service Payments in a timely manner,and (B) shall not apply for any other real property tax exemption for anyPhase 1 Parcel or Block K Parcel during the period of the TIF exemptionwithout the express, written consent of the City.
(k) The City shall prepare and file the notices required by Ohio Revised CodeSection 5709.911(C), the purposes of which are to (i) provide notice tofuture property owners of the exemption authorized by the TIF Ordinance;(ii) indicate that, with respect to Phase 1 Parcels and Block K Parcels, nofurther exemptions shall be granted without the consent of the City; and(iii) provide notice to future property owners of the continuing obligationto pay Service Payments as provided by the TIF Ordinance. Such noticesshall be filed in the land records of Cuyahoga County after the Ohio TaxCommissioner has approved any real property tax exemption applicationfiled by an owner to effectuate the exemption provided in the TIFOrdinance.
16. Events ofDefault and Remedies.
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(a) Events of Default. Each of the following shall be an Event of Default as /m^to the party failing to perform its obligations as set forth below: i
(i) Failure by any Phase 1 Owner or by any owner ofa Block K Parcelto make Service Payments when due as provided in thisAgreement;
(ii) Failure by any owner of a Shortfall Parcel to make a ShortfallPayment when due and such failure continues for five (5) calendardays after written notice thereof shall have been received by theapplicable owner from the City or the Bond Trustee;
(iii) Any ofCP, CPPIII, CPR, CPM, Land, BK Developer, the Block KOwners, or AG shall fail to observe and perform any otheragreement, term or condition contained in this Agreement, and thecontinuation of such failure for a period of thirty (30) days afternotice thereof shall have been received by such party from the Cityor the Bond Trustee, or for such longer period as the City and theBond Trustee may agree to in writing; provided, that if the failureis other than the payment ofmoney and is of such nature that it canbe corrected but not within the applicable period, that failure shallnot constitute an Event of Default so long as the defaulting partyinstitutes curative action within the applicable period anddiligentlypursues that action to completion; ^S
(iv) Any of CP, CPPIII, CPR, CPM, Land, BK Developer, the Block KOwners or AG shall: (i) admit in writing its inability to pay itsdebts generally as they become due; or (ii) (a) commence avoluntary bankruptcy case concerning it or (b) have an involuntarybankruptcy case commenced against it and either have an order ofinsolvency or reorganization entered against it or have the caseremain undismissed and unstayed for sixty (60) days;(iii) commence any other proceeding under any reorganization,arrangement, readjustment of debt, relief of debtors, dissolution,insolvency or liquidation or similar law of any jurisdiction whethernow or hereafter in effect and either have an order entered againstit thereunder or remainundismissed or unstayed for sixty (60) daysor there is commenced against it any such proceeding whichremains undismissed or unstayed for sixty (60) days; (iv) beadjudicated insolvent or bankrupt; (v) make a general assignmentfor the benefit of creditors; (vi) have a receiver, trustee orcustodian appointed for the whole or any substantial part of itsproperty or a receiver, trustee or custodian or any other officer orrepresentative ofthe court or ofcreditors, or any court, governmentofficer or agency shall take and hold possession of any substantialpart of its property; or (vii) take any other action for the purpose of ^effecting the foregoing; '
CLI-2144412vll 55
(v) Any representation or warranty made by CP, CPPIII, CPR, CPM,Land, BK Developer, any Block K Owner or AG herein or anystatement in any report, certificate, financial statement, in anyTransaction Document shall at any time prove to have beenmaterially false or misleading in any material respect when madeor given;
(vi) An event of default by CP shall occur under the ConstructionAgency Agreement after applicable notice and expiration of anycure period thereunder; or
(vii) CP, CPPIII, CPR, CPM, Land, BK Developer, any Block K Owneror AG shall fail to observe and perform any term or conditioncontained in the Construction Agency Agreement or any otherTransaction Document to which it is a party, and the continuationof such failure for a period of thirty (30) days after notice thereofshall have been received by the defaulting party from the City orthe Bond Trustee, or for such longer period as the City and theBond Trustee may agree to in writing; provided, that if the failureis other than the payment ofmoney and is of such nature that it canbe corrected but not within the applicable period, that failure shallnot constitute an Event of Default so long as the party institutescurative action within the applicable period and diligently pursuethat action to completion.
Notwithstanding the foregoing, if, by reason of Force Majeure, CP,CPPIII, CPR, CPM, Land, BK Developer, any Block Owner or AG isunable to perform or observe any agreement, term or condition hereofwhich would give rise to an Event of Default under subsection (iii) or (vii)hereof, the party shall not be deemed in default during the continuance ofsuch inability. However, the party shall promptly give notice to the BondTrustee and the City of the existence of an event of Force Majeure andshall use its best efforts to remove the effects thereof; provided that thesettlement of strikes or other industrial disturbances shall be entirelywithin their discretion.
The declaration of an Event of Default under subsection (iv) above, andthe exercise of remedies upon any such declaration, shall be subject to anyapplicable limitations of federal bankruptcy law affecting or precludingthat declaration or exercise during the pendency of or immediatelyfollowing any bankruptcy, liquidation or reorganization proceedings.
(b) Remedies on Default. Whenever an Event of Default shall have happenedand be subsisting, any one or more of the following remedial steps may betaken as to the Responsible Party:
CLI-2144412vll 56
(i) The Disbursing Agent, on its own or at the direction of the City,may refuse to honor requests and orders for the disbursement offunds pursuant to the Disbursing Agreement for the AG PublicInfrastructure if AG is the Responsible Party, for the CP PublicInfrastructure ifCP, CPPIII, CPR, Land or CPM is the ResponsibleParty or for the Block K Public Improvements if BK Developer, orany Block K Owner is the Responsible Party;
(ii) The Bond Trustee may, subject to its right to be indemnified underthe Indenture, exercise any or all or any combination of theremedies specified in the Transaction Documents against theResponsible Party;
(iii) The City or the Bond Trustee may have access to, inspect, examineand make copies of the books, records, accounts and financial dataof the Responsible Party pertaining to or for the AG PublicInfrastructure if AG is the Responsible Party, pertaining to or forthe CP Public Infrastructure if CP, CPPIII, CPR, Land or CPM isthe Responsible Party or pertaining to or for the Block K PublicImprovements if BK Developer or any Block K Owner is theResponsible Party; or
(iv) The City or the Bond Trustee may pursue all remedies now orhereafter existing at law or in equity to collect all amounts then dueand thereafter to become due under this Agreement as to theResponsible Party, to enforce the performance and observance ofany other obligation or agreement of the Responsible Party underthose instruments, or to collect damages from the ResponsibleParty's failure to perform, all without terminating this Agreement.The remedies may include, but shall not be limited to, theimposition of additional R.C. Section 5709.91 minimum servicepayment obligations with respect to the Responsible Party'sproperty (or in the event of CPM or Land, with respect to the CPProject) in the TIF District, either in the form of increased ShortfallPayments (if the Bonds remain outstanding) or new minimumservice payment obligations (if the City issues new bonds toredeem the Bonds).
Notwithstanding the foregoing, none of the Bond Trustee, the DisbursingAgent nor the City shall be obligated to pursue any remedy, includingwithout limitation to take any step which in its opinion will or might causeit to expend time or money or otherwise incur liability unless and until asatisfactory indemnity bond, or other security reasonably acceptable to theCity, has been furnished to the City, the Bond Trustee or the DisbursingAgent, as applicable, by the Responsible Party at no cost or expense to theCity, the Bond Trustee or the Disbursing Agent, which the ResponsibleParty is hereby obligated to provide. Any amounts collected as Service
CLI-2144412vll 57
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Payments or Shortfall Payments or applicable to Service Payments orShortfall Payments and any other amounts collected pursuant to actiontaken under this Section shall be deposited and applied in accordance withthe provisions of the Indenture and the Disbursing Agreement.
(c) No Remedy Exclusive. No remedy conferred upon or reserved to the Cityor the Bond Trustee by this Agreement is intended to be exclusive of anyother available remedy or remedies, but each and every such remedy shallbe cumulative and shall be in addition to every other remedy given underthis Agreement, or now or hereafter existing at law, in equity or by statute.No delay or omission to exercise any right or power accruing upon anyEvent of Default shall impair that right or power or shall be construed tobe a waiver thereof, but any such right and power may be exercised fromtime to time and as often as may be deemed expedient. In order to entitlethe City or the Bond Trustee to exercise any remedy reserved to it in thisArticle, it shall not be necessary to give any notice, other than any noticerequired by law or for which express provision is made herein.
(d) Agreement to Pay Attorneys' Fees and Expenses. If an Event of Defaultshould occur and the City or the Bond Trustee should incur expenses,including reasonable attorneys' fees, in connection with the enforcementof this Agreement against the Responsible Party or the collection of sumsdue hereunder, the Responsible Party is obligated to reimburse the Cityand the Bond Trustee, as applicable, for the reasonable expenses soincurred upon demand.
(e) No Waiver. No failure by the City or the Bond Trustee to insist upon thestrict performance by a Responsible Party of any provision hereof shallconstitute a waiver of their right to strict performance and no expresswaiver shall be deemed to apply to any other existing or subsequent rightto remedy the failure by a Responsible Party to observe or comply withany provision hereof.
17. Term of Agreement. This Agreement shall be and remain in full force and effectfrom the Closing until the later of (i) February 28, 2054, or (ii) such time as all sums payable bythe City on the Bonds shall have been paid, whichever shall come later. Notwithstanding theforegoing, provided that the Bonds are no longer outstanding and all other sums under thisAgreement have been paid, and the Ground Leases have expired or have been terminated, theCity may, by written instrument agree to terminate this Agreement with the consent of AG, CP,CPPIII, CPR, Land, CPM, BK Developer and the Block K Owners.
18. Notices. All notices, certificates, requests or other communications hereundershall be in writing and shall be deemed to be sufficiently given when mailed by registered orcertified mail, postage prepaid, or sent by a nationally recognized overnight delivery service, andaddressedto the appropriateNotice Address (hereinafter defined), or when delivery by any oftheforegoing means is refused or rejected. A duplicate copy of each notice, certificate, request orother communication given hereunder to the City, AG, CP, CPPIII, CPR, CPM, Land, BK
CLI-2144412vll 58
Developer, any Block K Owneror the Bond Trustee shall also be given to the others. The City,AG, CP, CPPIII, CPR, CPM, Land, BK Developer, any Block K Owner and the Bond Trustee,by notice given hereunder, may designate any further or different addresses to which subsequentnotices, certificates, requests or other communications shall be sent. Except as otherwiseprovided herein, the mailing of any notice or deposit of same with an overnight delivery serviceshall be deemed complete upon deposit of that notice in the mail and the giving of any notice byany other means of delivery shall be deemed complete upon receipt of the notice by the deliveryservice. Each "Notice Address" is as follows unless and until the respective party provideswritten notice to the other parties ofa change ofaddress:
To the City:
with copy to:
To AG:
with copy to:
To CP, CPPm, CPR, Land, CPM,BK Developer, CD Hotel, CDRetail or CD Garage:
with copy to:
CLl-2144412vll
City ofWestlake27700 Hilliard Boulevard
Westlake, OH 44145Attn: Mayor City ofWestlake
City ofWestlake27700 Hilliard Boulevard
Westlake, OH 44145Attn: Law Director
American Greetings CorporationOne American Road
Cleveland, OH 44144Attn: General Counsel
Suzanne Saganich, Esq.Roetzel & Andress LLP
1375 East Ninth Street, Suite 900Cleveland, OH 44114
Crocker Park, LLC (or Crocker Park Phase III,LLC, Crocker Park Phase III Residential, LLC,CP Land, LLC, Crocker Park Management,LLC), Block K, LLC, CD Block K Hotel,LLC, CD Block K Retail, LLC or CD Block KGarage, LLCc/o Stark Enterprises1350 W. 3rd Street
Cleveland, OH 44113Attn: Chief Operating Officer
Zachary T. Paris, Esq.Jones Day901 Lakeside Avenue
Cleveland, OH 44114
59
-^ 19. Extent of Covenants: No Personal Liability. All covenants, obligations and{ agreementsof the City, AG, CP, CPPIII, CPR, CPM, Land, BK Developer, CD Hotel, CD Retail
and CD Garage contained in this Agreement shall be effective to the extent authorized andpermitted by applicable law. No such covenant, obligation or agreement shall be deemed to be acovenant, obligation or agreement of any present or future member, officer, agent, electedofficial or employee of the City, AG, CP, CPPIII, CPR, CPM, Land, BK Developer, CD Hotel,CD Retail and CD Garage or the City Council of the City in other than his or her officialcapacity, and neither the members of the City Council nor any official executing the Bonds shallbe liable personally on the Bonds or be subject to any personal liability or accountability byreason of the issuance thereof or by reason of the covenants, obligations or agreements of theCity, CP, CPPIII, CPR, CPM, Land AG, BK Developer, CD Hotel, CD Retail and CD Garagecontained in this Agreement.
20. Binding Effect. This Agreement shall inure to the benefit of and shall be bindingin accordance with its terms upon the City, AG, CP, CPPIII, CPR, CPM, Land, BK Developer,CD Hotel, CD Retail and CD Garage and their respective permitted successors and assigns;provided that this Agreement may not be assigned by the City except to the Bond Trusteepursuant to the Indenture, or as otherwise may be necessary to enforce or secure payment ofamounts due under the Indenture. This Agreement may be enforced only by the parties, theirassignees and others who may, by law, stand in their respective places.
21. Amendments and Supplements. This Agreement may not be effectively amended,changed, modified, altered or terminated unless executed by the City, AG, CP, CPPIII, CPR,
^ CPM, Land, BK Developer, CD Hotel, CD Retail and CD Garage.
22. Execution Counterparts. This Agreement may be executed in counterpart and inany number of counterparts, each of which shall be regarded as an original and all of which shallconstitute but one and the same instrument.
23. Severability. If any provision of this Agreement, or any covenant, obligation oragreement contained herein is determined by a court to be invalid or unenforceable, thatdetermination shall not affect any other provision, covenant, obligation or agreement, each ofwhich shall be construed and enforced as if the invalid or unenforceable portion were notcontained herein. That invalidity or unenforceability shall not affect any valid and enforceableapplication thereof, and each such provision, covenant, obligation or agreement shall be deemedto be effective, operative, made, entered into or taken in the manner and to the full extentpermitted by law.
24. Continuing Disclosure. AG and the Bond Trustee, as Continuing DisclosureAgent, have entered into the AG Continuing Disclosure Agreement, and CP, CPPIII, CPR, CPM,Land, BK Developer, CD Hotel, CD Retail, CD Garage and the Bond Trustee, as ContinuingDisclosure Agent, have entered into the CP/CPPIII/CPM/CPR, Land, BK Developer, CD Hotel,CD Retail, CD Garage Continuing Disclosure Agreement (collectively, the "ContinuingDisclosure Agreements") contemporaneously with the execution and delivery of the Indenture,under which the Bond Trustee has assumed certain obligations as Continuing Disclosure Agent,
^^^ inaddition to those assumed under the Indenture, onbehalf of the holders and beneficial owners{ of the Bonds. CP, CPPIII, CPR, CPM, Land, BK Developer, CD Hotel, CD Retail, CD Garage
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and AG each agree to cooperate with the Bond Trustee in performing its duties under itsrespective Continuing Disclosure Agreement and in providing the Bond Trustee with theinformation required thereunder. Any compensation, expenses, disbursements or advancesearned, incurred or made pursuant to the Continuing Disclosure Agreements shall constitute andbe payable as Administrative Expenses (as defined in the Indenture) under the Indenture.Notwithstanding any other provision of this Agreement, no failure by CP, CPPIII, CPR, CPM,Land, BK Developer, CD Hotel, CD Retail, CD Garage or AG to comply with any provision ofits respective Continuing Disclosure Agreement shall constitute a default under this Agreement.
25. Limitation of Rights. With the exception of rights conferred expressly in thisAgreement, nothing expressed or mentioned in or to be implied from this Agreement or theBonds is intended or shall be construed to give to any person other than the parties hereto, theBond Trustee, and the holders of the Bonds any legal or equitable right, remedy, power or claimunder or with respect to this Agreement or any covenants, agreements, conditions and provisionscontained herein. This Agreement and all of those covenants, agreements, conditions andprovisions are intended to be, and are, for the sole and exclusive benefit of the parties hereto, theBond Trustee and the holders ofthe Bonds, as provided herein.
26. Governing Law. This Agreement shall be deemed to be a contract made underthe laws of the State and for all purposes shall be governed by and construed in accordance withthe laws ofthe State.
27. Related Agreements. All references in this Agreement to Transaction Documentsshall be references to the Transaction Documents as the same may from time to time be modifiedor amended. Except to the extent provided herein, including through incorporation by reference,this Agreement is not intended to make any party hereto a third party beneficiary of anyTransaction Document.
28. Nondiscriminatory Hiring Policy. AG, CP, CPPIII, CPR, CPM, Land, BKDeveloper, CD Hotel, CD Retail and CD Garage agree to comply with the City'snondiscriminatory hiring policy adopted pursuant to R.C. Section 5709.832 to ensure thatrecipients oftax exemptions practice nondiscriminatory hiring in their operations. In furtheranceof that policy, each agrees that it will not deny any individual employment solely on the basis ofrace, religion, sex, disability, color,national origin,age or ancestry.
29. 629 Grant Compliance and Indemnification. Each of AG, CP, CPR and CPPIII(severally and not jointly, except as provided in Section 32 of this Agreement) shall, at its costand expense, indemnify and hold the City and any officials, employees, agents andrepresentatives of the City, its and their successors and assigns, harmless from and against, andshall reimburse the City and any officials, employees, agents and representatives of the City, itsand their successors and assigns for, any amount the City may be required to pay to the StateDevelopment Services Agency, or any other State agency or official in connection with the629 Grant Agreement to the extent that such payment specifically relates to a failure by theindemnifying party to fulfill their respective obligations under the 629 Grant Agreement;provided that such indemnification shall not be applicable if and to the extent the City's paymentobligation arises from or in connection with any negligent, willful, or wanton acts or omissionsofthe City or its employees or agents.
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For purposes of this Section 29, (i) the obligations solely related to AG in the 629 GrantAgreement include, but are not limited to, the job creation and maintenance of operationsrequirements of Section 5 of the 629 Grant Agreementand the non-discrimination provisions ofSection 6 of the 629 Grant Agreement; (ii) the obligations solely related to CP, CPR and CPPIIIin the 629Grant Agreement include, but are not limited to, the project completion provisions ofSection 4(a) of the 629 Grant Agreement; and (iii) the obligations related to AG, CP, CPR andCPPIII, collectively, include, but are not limited to, the reporting provisions of Section 7 of the629 Grant Agreement, the records maintenance and access provisions of Section 8 of the629 Grant Agreement, the state and federal laws compliance provisions of Section 9(a), 9(d) and9(g) of the 629 Grant Agreement. In addition, each of AG, CP, CPR and CPPIII hereby agreesto comply with any and all reasonable requests of the City to provide the information necessaryto complete the annual reports required by Section 7 of the 629 Grant Agreement. This Section29 shall survive the termination of this Agreement.
30. SIB Loan.
(a) AG shall, at its cost and expense, indemnify and hold the City and anyofficials, employees, agents and representatives of the City, its and theirsuccessors and assigns, harmless from and against, and shall reimburse theCity and any officials, employees, agents and representatives of the City,its and their successors and assigns for, any amount the City may berequired to pay the State or to any State agency or official in connectionwith the various SIB Loan documents to the extent that such paymentspecifically relates to a failure by AG to fulfill its express or impliedobligations under the SIB Loan documents (consistent with the express orimplied obligations under the 629 Grant Agreement, as specified inSection 29 of this Agreement); provided that such documentation shall notbe applicable if and to the extent the City's payment obligation arises fromin connection with any negligent, willful, or wanton acts or omissions ofthe City or its employees or agents.
(b) The parties acknowledge that they have relied upon the representation byODOT in the SIB Loan documents that the sources for the SIB Loan are
Title 23 funds and general revenue funds, and to the best of ODOT'sknowledge after due inquiry, the use of those funds does not impose uponthe construction of the Required Public Infrastructure funded with SIBLoan proceeds any requirements of federal law that are not otherwiseapplicable. If, notwithstanding this representation by ODOT, it isdetermined by applicable governmental authorities that the use of Title 23funds in fact has imposed on the construction of the Required PublicInfrastructure federal requirements that were otherwise inapplicable,(i) the City shall attempt to resolve all issues raised by such determinationby repaying the Title 23 funds and issuing alternative debt as a substitutefor the repaid Title 23 funds, and (ii) AG, CPPIII and CPR shall pay anyincreased costs of the City, including, but not limited to, the City'sissuance costs and attorneys' fees, related to the determination,irrespective of whether the City is successful in resolving all issues raised
CLI-2144412vll 62
by such determination by repaying the Title 23 funds and issuingalternative debt, through the imposition, if necessary, of increasedShortfall Payment or additional minimum shortfall payment obligations ontheir respective parcels, on a pro rata basis in accordance with theShortfall Payment Schedule.
(c) This Section 30 shall survive termination ofthis Agreement.
31. Inconsistency between or among Transaction Documents. To the extent there are
any inconsistencies between or among any of the Transaction Documents, the most specific anddirectly applicable document shall control, unless the most specific and directly applicabledocument would lead to a result that is manifestly contrary to the intention ofthe parties.
32. Joint and Several Liability. In this Agreement, unless the context clearly indicatesotherwise, (i) when certain duties, responsibilities or obligations are imposed upon CP, only CPshall be obligated to perform the duties, responsibilities or obligations; and (ii) when certainduties, responsibilities or obligations are imposed upon CPPIII, CPR, or Land, such named partyand CP shall be jointly and severally liable for performing such duties, responsibilities orobligations. This section shall not be construed to require a Phase 1 Owner to make Phase IIIService Payments or Phase III Project Shortfall Payments with respect to another Phase 1Owner's real property.
In this Agreement, unless the context clearly indicates otherwise, when certain duties,responsibilities or obligations are imposed upon BK Developer, CD Hotel, CD Garage or CDRetail, such named party and CP shall be jointly and severally liable for performing such duties,responsibilities or obligations. This section shall not be construed to require a Block K Owner tomake Block K Service Payments or Block K Shortfall Payments with respect to another Block KOwner's real property.
33. No Pledge of Tax Revenues. The obligations of the City under this Agreement,the other Transaction Documents and the Market Square Agreement are not and shall not besecured by an obligation or pledgeof any moneys raised by taxation. The obligations ofthe Citydo not and shall not represent or constitute a debt or pledge of the full faith and credit or taxingpower of the City, and the Bond Trustee, the holders of the Bonds and the parties to thisAgreement do not have and shall not have any right to have taxes levied by the City.
(Signatures on next page)
CLI-2144412vll 63
/•^\
/flffy
IN WITNESS WHEREOF, the City, CP, CPR, Land, CPPIII, CPM, BK Developer, CDHotel, CD Retail and CD Garage and AG have caused this Agreement to be duly executed intheir respective names, all as of the date first hereinbefore written.
Approved as to form for the City: CITY OF WESTLAKE, OHIO
By:JohnWheeler Dennis CloughDirectorof Law Mayor
CROCKER PARK, LLC
By:
CLI-2144412vll
CROCKER PARK PHASE III, LLC
By:
CROCKER PARK MANAGEMENT, LLC
By:
CROCKER PARK PHASE III RESIDENTIAL,LLC
By:.
CP LAND, LLC
By:
AMERICAN GREETINGS CORPORATION _
1
By:
BLOCK K, LLC
By:.
CD BLOCK K HOTEL, LLC
By:
CD BLOCK K RETAIL, LLC
By:
CD BLOCK K GARAGE, LLC
By:
CLI-2144412vll 65
z-1^.
/0&\ CITY'S FISCAL OFFICER'S CERTIFICATE
The undersigned, fiscal officer of the City, hereby certifies that the moneys required tomeet the obligations of the City during the year 2014 under the Agreement have been lawfullyappropriated by the Legislative Authority of the City for such purposes and are in the treasury ofthe City or in the process of collection to the credit of an appropriate fund, free from anyprevious encumbrances. This Certificate is given in compliance with Sections 5705.41 and5705.44, Ohio Revised Code.
Dated: , 2014
CLI-2144412vll
Director of Finance
City ofWestlake, Ohio
Exhibit A
PROPOSED PLAN
CLI-2144412vll _67-
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Exhibits
TIF DISTRICT MAP
CLI-2144412vll .gg.
Exhibit C ^MASTER SCHEDULE
s*%
CLI-2144412vll _69_
Exhibit D
SHORTFALL PAYMENT SCHEDULE
[To be circulated shortly for comment based on review of spreadsheet prepared by CP andapproved by AG and incorporating language regarding pro rata increased or decreased amountsbased on actual debt service, and allocation in the event of parcel splits or combinations (Citywants to approve and will not unreasonably withhold approval). Note that permanent parcelnumbers are preferred, but in any event, specific parcel designations that are consistent with whatwill be recorded will be necessary before the Closing.]
CLI-2144412vll _7Q.
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ORDINANCE NO. 2012-101 EXHIBIT "B"
ORDINANCE NO. 2012-101 EXHIBIT "C
MASTER DEVELOPER SCHEDULE 2014
Task Name
BID AND CLOSINGRebid Public Project
Resubmit CP III Infrastructure Documents To CitySubmit KBlock Infrastructure Documents -45% CDs - to crty for reviewRevise Bid Documents
Cily Council Preliminary Approval ofTIF including Block K- Block KConditional upon PC Approval
Publication of Invitation to bid ~"~
BlockK Planning Commission ApprovalComplete Substantive Agreement Between PartiesRebid Public ProjectIssue Addendum for 100% CDs of K Block Infrastructure PlansBids Opened
Estimate TIF Proceeds and Verify Sources &Uses Align (Go noGo)Approval by AG Board of DirectorsCity Council ApprovalTIF Bond Process (SeeJJnde^rw^
ClosingRecord Plats
TransactionClosingTIF Bond ClosingSign CM Agreement
A-G Related Datesj A-G- Revised Design &Construction Schedule Received1_A-G -Shell CD's Avaiiabletof^a¥tenantfs)| AG Building •===--=
Shell Construction Commencement
Building Envelope Construction Complete (Building Watertight)Turn-Over of Shell Space to RetaiTfenantjsjAG Interior Frt-out " '" "'"'Retail Interiors Construction & Fixturing
jAG Move-In BeginsH Garage Retail
Shell Construction Commencement
Building Envelope Construction Complete (Building Watertight)TurrnOverof Shell Space to Retail TenantsRetail Interiors^Construction &Fixturing
