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ORDINANCE NO. 32-11

AN ORDINANCE TO AUTHORIZE A FINANCING AGREEMENT

WITH JG AVON, LLC FOR THE CONSTRUCTION OF THE 1-90 INTERCHANGE AND ALL ASSOCIATED IMPROVEMENTS

AND DECLARING AN EMERGENCY

WHEREAS, ever since Planning Commission made a recommendation to construct a new interchange on 1-90 in the vicinity of Nagel Road back on October 2,2002) JG Avon, LLC and the City of A von have partnered to bring about its construction; and

WHEREAS, in an effort to formalize and reduce to writing the terms of that partnership, the parties have drafted a Financing Agreement which sets forth their respective duties and responsibilities for the construction of said 1-90 interchange and associated improvements; and

WHEREAS, Council) aware of the ongoing negotiations between the parties, has had the opportunity to review every aspect of the Financing Agreement and finds that it is fail' and reasonable and deems it to be in the best interest of the health, safety and welfare of the citizens of Avon to enter into said agreement with JG Avon, LLC for the financing of construction of the 1-90 Interchange at Nagel Road and associated improvements.

NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF AVON, LORAIN COUNTY, OHIO:

Section 1 - That Council hereby authorizes the City to enter into a Financing Agreement with JG Avon, LLC for the construction of the" 1-90 Interchange at Nagel Road and all associated improvements, a copy of which is attached hereto) marked as "Exhibit A" and incorporated herein by reference.

Section 2 - The Mayor and President of Council are hereby authorized to sign said Financing Agreement on behalf of the City.

Section 3 - That it is found and determined that all formal actions of this Council concerning and relating to the passage of this Ordinance were adopted in an open meeting of this Council, and that all deliberations of this Council and of any of its committees that resulted in such formal actions were in meetings open to the public, in compliance with all legal requirements, including Section 121.22 of the Ohio Revised Code.

Section 4 - That this Ordinance is hereby declared to be an emergency measure necessary for the preservation of the public peace) health, safety and welfare of the citizens of the City of Avon, the immediate emergency being the necessity to authorize the City to enter into a Financing Agreement with JG Avon, LLC for the construction of the 1-90 interchange at Nagel Road and associated improvements so as to move forward with plans to begin said construction

Ordinance No. 32-11 (Con't.)

no later than the summer of 20 11; therefore, this Ordinance shall be in full force and effect immediately upon its passage and approval by the Mayor.

PASSED: __

DATESIGNED: __

By:

Craig Witherspoon, Council President

DATE APPROVED BY THE MAYOR _

James A. Smith, Mayor

APPROVED AS TO FORM:

John A. Gasior, Law Director City of A von, Ohio

ATIEST:

EUen R. Young Clerk of Council

POSTED: _

In Five Places as Provided by Council

Prepared by:

John A. Gasior, Esq. Law Director

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DRAFT OF 3/29111

FINANCING AGREEMENT

This Financing Agreement (this "Agreement"), is made and entered into as of _____ , 2011, by and between the CITY OF AVON, OHIO (the "City"), a municipal corporation organized and existing under the constitution and laws of the State of Ohio, and JG AVON LLC, an Ohio limited liability company, together with its successors and assigns, "Developer") .

Recitals:

A. Developer is or was the owner of certain real property compnsing

approximately 200 acres located in the City of Avon and depicted and more particularly described in Exhibit A-I attached hereto and incorporated by reference herein (the "Primary Development Site"). The Primary Development Site does not include any of the real property previously conveyed by Developer to The Cleveland Clinic Foundation.

B. Developer proposes to develop the Primary Development Site, but have

not formulated a specific plan for the development of the Primary Development Site and may sell portions thereof for development by others.

C. SEQ Lear Nagel LLC, an Ohio limited liability company ("SEQ"), and

NWQ Jaycox 1-90 LLC, an Ohio limited liability company ("NWQ" and, together with SEQ, and their respective successors and assigns, the "Developer Affiliates"), which are affiliates of Developer, own certain other real property within the area depicted and more particularly described in Exhibit A-2 attached hereto and incorporated by reference herein (the "Developer Affiliates' Property").

D. The City proposes to construct, together with the Ohio Department of

Transportation ("ODOT"), an interchange to Interstate 1-90 at Lear Road (the "Interchange") which will facilitate the development of the Primary Development Site and other adjacent properties, including the Developer Affiliates' Property, The area of the construction of the Interchange is described on Exhibit B and is hereinafter referred to as the "Project Area." In addition to the improvements described in Section 2.3 of that certain ODOT Agreement No. 15828 - Agreement between the State of Ohio, Department of Transportation, and the City of Avon for the Funding, Construction and Maintenance of the Interstate 90 and Nagel Road Interchange LOR-90-22.26, PID 78053 & 83607 (the "ODOT Improvements"), other water, sanitary sewer and roadway public infrastructure improvements located within the Project Area, as more fully described on Exhibit B-1, are necessary for the construction of the Interchange, and are hereinafter referred to as the "Additional Interchange Improvements." Additionally, the City is required to relocate a sanitary sewer lift station (the "Lift Station") inside the Project Area. The ODOT Improvements, the Additional Interchange Improvements and the Lift Station are hereinafter referred to as the "Project Area Improvements."

E. In addition to the Project Area Improvements, the City and the Developer

agree that certain other public infrastructure improvements, more fully described on Exhibit B-2, are necessary in connection with the development of the area surrounding the Interchange, including the Primary Development Site and the Developer Affiliates' Property, Such additional

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public infrastructure improvements are hereinafter referred to as the "Outside the Project Improvements." The Project Area Improvements and the Outside the Project Improvements are hereinafter referred to as the "Public Improvements."

F. The City and Developer have agreed that the costs of the ODOT

Improvements shall be shared by the City, Developer and other property owners whose property is located proximate to the Interchange, as shown on Exhibit C-I (collectively, the "Benefited Property"), as set forth herein. The Benefited Property includes the Developer Affiliates' Property but not the Primary Development Site. In addition, the City and Developer agree that the cost of the Additional Interchange Improvements shall be shared by the City and the Developer in the proportions set forth on Exhibit B-1, the cost of the Lift Station shall be shared by the City and the Developer in the proportions set forth in Section 2(b), and the cost of the Outside the Project Improvements will be shared by the City and the Developer in the proportions set forth on Exhibit B-2.

G. Pursuant to the ordinances listed on Exhibit D attached hereto and

incorporated by reference herein (collectively, the "TIF Ordinances"), the Council of the City of Avon declared that the increase in the assessed value of certain parcels of real property located within the City and described on Exhibit D-l and depicted on the map included as Exhibit D-2, each as attached hereto and incorporated by reference herein (such parcels being collectively referred to as the "TIF Parcels" and the owners of the TIF Parcels being collectively referred to as the "TIF Parcel Owners") that would first appear on the tax list and duplicate of real and public utility property after the effective dates of the TIF Ordinances were it not for the exemption provided therein (the "Improvements") are for a public purpose for the purposes of Sections 5709.40(B) and 5709.42 of the Ohio Revised Code (the "Act") and that 100% of the Improvements are exempt from real property taxation for a period of thirty (30) years from the commencement dates specified in the TIF Ordinances. The TIF Parcels include the Primary Development Site, the Developer Affiliates' Propertyand other parcels of land which are not owned by Developer or any Developer Affiliate.

H. Developer has agreed, pursuant to Section 3(a) hereof, for itself and its

successors in interest with respect to the Primary Development Site, to make service payments with respect to the Primary Development Site, together with all interest and penalties thereon for non-payment of such service payments (collectively, the "Developer Service Payments") in lieu of exempt real property taxes on the Improvements to the Primary Development Site.

1. The TIF Ordinances authorize proceeds from the Developer Service

Payments and service payments in lieu of taxes paid by the other TIF Parcel Owners (collectively, "Service Payments") to be used, inter alia, for all or a portion of the City's share of the costs of the ODOT Improvements, including the payment of principal (whether at maturity or by prior redemption) of and interest on bonds 01' notes ("TIF Debt") to be issued by the City, pursuant to additional, appropriate legislation of the Council to finance the City's share of the costs of the ODOT Improvements, and the costs attributable to the sale of the TIF Debt, inclusive of attorneys' fees, appraisals and other similar fees, and the City intends to use a portion of the Service Payments to provide for a portion of the payment of the TIF Debt incurred to pay for the ODOT Improvements and such other uses as may be permitted by the TIF Ordinances, including without limitation to the extent not paid by the Lorain County Treasurer, to the Avon City School District.

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J. The City anticipates that it will issue bonds and/or bond anticipation notes,

in addition to, the TIF Debt, to pay the cost of the Public Improvements and as further provided in Section 4 hereof, such debt other than the TIF Debt being referred to herein as the "City Debt".

K. The patties desire to enter into this Agreement on the terms as hereinafter

set forth to provide for the collection of the Developer Service Payments and Minimum Service Payments (as hereinafter defined) and to enable the City to pay for the Public Improvements and the debt service on TIF Debt and City Debt incurred for such purpose,

NOW, THEREFORE, in consideration of the premises and covenants contained herein, and to induce the City to proceed with the issuance of the TIF Debt and the City Debt, the making of the Public Improvements and particularly the Interchange, the parties hereto agree as follows:

1. ODOT Improvements. The City has determined to provide the ODOT

Improvements that once made will directly benefit the TIF Parcels. Developer and the City estimate that the total costs of the ODOT Improvements (the "Costs of the ODOT Improvements") will be approximately Twenty-Six Million Five Hundred Twenty-Two Thousand Four Hundred Nineteen Dollars ($26,522,419), but the City and Developer acknowledge and agree that the Costs of the ODOT Improvements may be more than, or less than, the estimated amount. Developer and the City agree that the Costs of the ODOT Improvements will be borne as follows:

(a) Developer will pay one third (1/3) of the Costs of the ODOT

Improvements (the "Developer's Direct Share"). Such payment may be made, at Developer's option, (i) by payment directly by Developer to the City as necessary for payments to contractors and vendors, upon submission by the City to Developer of copies of applications for payment in standard fOtID for payment, with appropriate waivers of lien attached, or (ii) by a voluntary special assessment petitioned for by Developer pursuant to Section 727.06, Ohio Revised Code with respect to the Primary Development Site, including in such special assessment interest to be paid by the City on City Debt incurred to pay Developer's Direct Share pending receipt of payments by the Developer. The petition shall include a waiver of any statutory limitations on amount of the assessments for the payment of Developer's Direct Share,

(b) One-third (1/3) of the Costs of the ODOT Improvements shall be paid by

special assessments levied by the City on the Benefited Property, based on the benefit accruing to each Benefited Property, including the Developer Affiliates' Property, but excluding therefrom the Primary Development Site, in an amount sufficient to pay onethird of the Costs of the ODOT Improvements (the "Benefited Property's Direct Share"). Such assessments shall include costs normally included in special assessments, including, but not limited to, interest to be paid by the City on City Debt issued to finance the Benefited Property's Direct Share (such costs being herein collectively defined as the "Additional Costs"). Developer hereby agrees that it will not permit the Developer Affiliates to object to the special assessments on the Developer Affiliates' Property so long as the special assessments imposed on the Developer Affiliates' Property do not exceed 1.5373% of the sum of the Benefited Property's Direct Share and Additional Costs in the case of Developer Affiliates' Property owned by SEQ, or 9.0317% of the

sum of the Benefited Property's Direct Share and Additional Costs in the case of the Developer Affiliates' Property owned by NWQ.

(c) (i) The City shall pay one-third of the Costs of the ODOT

Improvements (the "City's Portion") from (A) Service Payments received by City from the TIF Parcel Owners with respect to the TIF Parcels (including the Developer Service Payments), and (B) 100% of the new municipal income tax revenues (calculated at one percent (1%», derived from and after January 1,2009 from (1) employees of businesses making Improvements on TIF Parcels, including permanent jobs and construction jobs, and (II) jobs directly related to the construction of all of the Public Improvements (''New Income Tax Revenues").

(ii) Developer acknowledges that the City does not expect to receive

Service Payments from the development of the TIF Parcels until approximately 2013, and in consideration of the City's issuance of the TIF Debt to pay the City's Portion of Costs of the ODOT Improvements not paid for from the sources set forth in subparagraphs l(a) and l(b), Developer agrees to make semiannual minimum Service Payments (the "Minimum Service Payments"), commencing in the calendar year following the earlier of (x) the year in which the City issues TIF Debt in the form of long-term bonds to payor finance the cost of the ODOT Improvements, and (y) the year immediately preceding the year in which the City is first obligated to make principal payments on the TIF Debt (the "Issue Date"), in an amount equal to the difference between (A) the principal of and interest due on the TIF Debt in the next succeeding calendar year and (B) the sum, cumulative from and after January 1, 2009, of (1) the amount of Service Payments received by the City from all Improvements to the TIF Parcels, including payments with respect to the Primary Development Site and the Developer Affiliates' Property, and (2) the amount of all New Income Tax Revenues received by the City, but in no event shall the Minimum Service Payments exceed the "Maximum Amount" (as hereinafter defined) in any single calendar year, on a non-cumulative basis. The term "Maximum Amount" as used herein shall mean (I) for the calendar year ending December 31 of the first year following the Issue Date, $500,000, (II) for the calendar year ending December 31 of the second year following the Issue Date, $400,000, (III) for the calendar year ending December 31 of the third year following the Issue Date, $300,000, eIV) for the calendar year ending December 31 of the fourth year following the Issue Date, $200,000, and (V) for the calendar year ending December 31 of the fifth year following the Issue Date and each calendar year thereafter, $-0-. Developer shall make such Minimum Service Payments even if the Minimum Service Payments exceed the total amount of real property taxes received as a result of the Improvements to the Primary Development Site that Developer would have paid if the Improvements to such property were not exempt from real property taxes pursuant to the TIF Ordinances. At the time that Developer is invoiced for any Minimum Service Payment, and before any Minimum Service Payment becomes due and payable hereunder, the City shall provide the Developer with a statement setting forth the amount of such Minimum Service Payment and the manner of its calculation, prepared in good faith and in reasonable detail by the City. Developer shall have the right to review the manner in which the City has calculated such Minimum Service Payment and to receive such information and documents upon which the City relied in calculating such Minimum Service Payment as Developer may reasonably request. In addition, no later than twenty (20) days following the end of each calendar quarter, commencing with the calendar quarter ending June 30, 2011, the City shall

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(II) Next, to reimburse Developer as provided in

Section l(c)(iii)(A); and

provide Developer with a written accounting, in reasonable detail, of the Service Payments and New Income Tax Revenues received by the City and the application thereof during such calendar quarter, subject to applicable laws relating to nondisclosure of nonpublic information,

Developer shall not be required to make Minimum Service Payments from and after the first to occur of (a) the first calendar year in which the total Service Payments received by the City from all TIF Parcels equal or exceed the principal of and interest on the TIF Debt due during the calendar year, or (b) December 31 of the fifth calendar year following the Issue Date, but nothing herein shall be construed to relieve Developer (or its successors or assigns) from its obligation to make the Developer Service Payments with respect to the Primary Development Site and any other real property which is a TIF Parcel and is acquired by Developer during the term of the TIF.

The obligation to make Minimum Service Payments shall be apportioned solely to the Primary Development Site and shall be a covenant running with the land with respect to that Site as provided in Section 5 hereof.

(iii) (A) If Developer makes Minimum Service Payments to the City

pursuant to this Section l(c), the City shall reimburse Developer for such Minimum Service Payments, together with interest on the Minimum Service Payments at a rate per annum equal to the net interest cost most recently borne by the TIF Debt. Such reimbursement shall be made by the City solely from Service Payments and New Income Tax Revenues received by the City which are in excess of the amounts necessary to pay prlncipal of, and interest on, the TIF Debt currently due.

(B) The City agrees that it will use the Service Payments

received from Improvements to TIF Parcels and New Income Tax Revenues for the following purposes in the following order:

(1) First, to payment of the interest on, and any

scheduled payments of the principal of, the TIF Debt (but not any prepayment of the principal of the TIF Debt) incurred to pay the City's Portion of the Costs of the ODOT Improvements;

(III) Next, for such other purposes as the City may determine in accordance with the TIF Ordinances and other applicable law.

2. Other Project Area Improvements.

(a) Additional Interchange Improvements, The Developer and the City' agree

that the cost of the Additional Interchange Improvements shall be shared by the City and the Developer in the proportions set forth on Exhibit B-1. Developer shall receive credit against amounts due pursuant to this Section 2 for costs advanced, if any, by Developer for the Costs of the Additional Interchange Improvements to the date of any payment. The City acknowledges that it has received a schedule of costs advanced by Developer

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for the Additional Interchange Improvements as of the date hereof in an aggregate amount of $ and agrees that such costs shall be included in the amounts for which Developer -shall receive a credit pursuant to this Section 2. Such payment may be made, at Developer's option, (i) by payment directly by Developer to the City as necessary for payments to contractors and vendors, upon submission by the City to Developer of copies of applications for payment in standard form for payment, with appropriate waivers of lien attached, or (ii) by a voluntary special assessment petitioned for by Developer pursuant to Section 727.06, Ohio Revised Code with respect to the Primary Development Site, including in such special assessment interest to be paid by the City on City Debt incurred to pay for Developer's share of the costs of Additional Interchange Improvements pending receipt of payments by the Developer. The petition shall include a waiver of any statutory limitations on amount of the assessments for the payment of Developer's share.

(b) Lift Station. The Developer and the City agree that the cost of the Lift

Station is now estimated to be One Million One Hundred Seventy-Eight Thousand Fifteen Dollars ($1,178,015), but the Developer and the City acknowledge and agree that the Costs of the Lift Station may be more than, or less than, the estimated amount. The Costs of the Lift Station shall be shared with the City paying 67% of the Cost and the Developer paying 33% of the Cost. The Developer's payment shall be made by a voluntary special assessment petitioned for by Developer pursuant to Section 727.06 on February 14, 2011, Ohio Revised Code with respect to the Primary Development Site, including in such special assessment interest to be paid by the City on City Debt incurred to pay for Developer's share of the costs of the Lift Station pending receipt of payments by the Developer.

3. Outside the Project Improvements. The Developer and the City agree that the

cost of the Outside the Project Improvements shall be shared by the City and the Developer in the proportions set f011h on Exhibit B-2. Developer shall receive credit against amounts due pursuant to this Section 3 for costs advanced, if any, by Developer for the Costs of Outside the Project Improvements to the date of any payment. The City acknowledges that it has received a schedule of costs advanced by Developer for the Outside the Project Improvements as of the date hereof in an aggregate amount of $ and agrees that such costs shall be included in the amounts for which Developer shall receive a credit pursuant to this Section 3. Such payment may be made, at Developer's option, (i) by payment directly by Developer to the City as necessary for payments to contractors and vendors, upon submission by the City to Developer of copies of applications for payment in standard form for payment, with appropriate waivers of lien attached, or (ii) by a voluntary special assessment petitioned for by Developer pursuant to Section 727.06, Ohio Revised Code with respect to the Primary Development Site, including in such special assessment interest to be paid by the City on City Debt incurred to pay for Developer's share of the costs of Outside the Project Improvements pending receipt of payments by the Developer. The petition shall include a waiver of any statutory limitations on amount of the assessments for the payment of Developer's share.

4. Construction of Public Improvements. The ODOT Improvements shall be

constructed by the Ohio Department of Transportation ("ODOT") according to ODOT's standard construction procedures and in accordance with the ODOT Agreement. The Additional Interchange Improvements, the Lift Station and the Outside the Project Improvements, including

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those described in Section 6 hereof, shall be constructed by the City unless otherwise agreed to between the City and Developer.

5. General Covenants of Developer.

(a) Except as otherwise provided in the second paragraph of this subparagraph

5(a), for the period that all or any part of the Improvements to the Primary Development Site are exempt from real property taxation (the "Exemption Period"), or until earlier termination of this Agreement as provided herein, pursuant to the Act and the TIF Ordinances and any amendments or supplements thereto, heretofore or hereafter adopted, Developer, for itself and any successors in interest to the Primary Development Site, or any part thereof or interest therein, hereby covenants and agrees to make (or cause to be made) semiannual Developer Service Payments in lieu of real estate taxes with respect to the exempted portion of the Improvements pursuant to and in accordance with the requirements of the Act, and pursuant to the TIF Ordinances and any amendments or supplements thereto. The obligation to make the Developer Service Payments shall run with the land. The Developer Service Payments shall be made semiannually to the Treasurer of the County of Lorain, Ohio (the "County"), or to the designated agent of the Treasurer of the County for collection of the Developer Service Payments, on or before the date on which real property taxes would otherwise be due and payable for the Improvements. Any Developer Service Payments which are paid after the date on which the same become due shall include interest and penalties at the same rate and in the same amount and payable at the same time as delinquent real property taxes. Each semiannual Developer Service Payment shall be in an amount equal to the real property taxes that would have been charged and payable against the exempted portion of the Improvements if an exemption from real property taxation had not been granted, plus all interest and penalties thereon for nonpayment, and shall otherwise be in accordance with the requirements of the Act.

Notwithstanding anything in the foregoing to the contrary, the City will not object to Developer's representation that a portion of the Primary Development Site comprising approximately 168 acres, as identified on Exhibit A~1 hereto (the "CAVV Land"), is currently devoted to agricultural use and the taxable value of the CAVY Land is based on its agricultural use value instead of its market value. The City agrees that Developer shall have no obligation under this Agreement to convert all or any portion of the CAVY Land to nonagricultural use other than in the ordinary course of its development of the Primary Development Site. The City will not object if the Lorain County Auditor or the State Tax Commissioner determines that until any portion of the CAVY Land is converted and such portion loses its current agricultural use value exemption, the Developer Service Payments, if any, with respect to the CAVY Land will be determined based upon its agricultural use value instead of its market value.

As provided in Section 1 (c )(ii), Developer also agrees to make Minimum Service Payments in the manner provided in that subparagraph. Such Minimum Service Payments shall be payable in the manner and at the times provided for the payment of Developer Service Payments in this Section 5(a).

It is intended and agreed, and it shall be so provided in any future deed conveying the Primary Development Site or any portion thereof, that the covenants provided in this

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Section 5 shall be covenants running with the land and that they shall, in any event and without regard to technical classification or designation, legal or otherwise, be binding upon the Primary Development Site to the fullest extent permitted by law and equity, for the benefit and in favor of and enforceable by, the City, whether or not this Agreement remains in effect and whether or not such provision is included in any succeeding deed to Developer's successors and assigns. It is further intended and agreed that these agreements and covenants shall remain in effect for the full period of exemption permitted in accordance with the requirements of the Act, the TIF Ordinances and this Agreement.

Such covenants running with the land in the Deed shall have priority over any other lien or encumbrance on the Primary Development Site other than the Permitted Encumbrances set forth in Exhibit E attached hereto.

If requested by the Developer, the obligation of the Debtor to pay Developer Service Payments and Minimum Service Payments as set forth in this Section 5(a) may be set forth in a separate service payment agreement to be recorded in the real estate records of the County in lieu of this Agreement.

(b) The City shall prepare and file or cause to be prepared and filed in

cooperation with Developer all necessary applications and supporting documents to obtain the exemption from real property taxation for the Primary Development Site located on a TIF Parcel and authorized by the Act and the TIF Ordinances to enable the Treasurer of the County to collect Developer Service Payments and, if required, Minimum Service Payments thereunder and to disburse such payments to or for the account of the City for deposit into the 6111Chester Road/Nagel Road Municipal Public Improvement Tax Increment Equivalent Fund (the "Fund"). The City will cooperate with Developer in connection with the preparation and filing of the required exemption applications.

6. City Debt and TIF Debt. Developer shall cooperate with the City in providing for

the transfer of Developer Service Payments and Minimum Service Payments to or for the account of the City for the payment ofthe principal of, and interest on, the TIF Debt.

7. Termination.

(a) This Agreement, together with all covenants and obligations set forth in

this Agreement, shall automatically terminate upon the earlier to occur of (i) the expiration of the Exemption Period referred to in Section 5 hereof, provided that the City Debt and TIF Debt have been paid in full or provision for payment thereof has been made, or (ii) the full payment of all Service Payments and Minimum Service Payments payable with respect to such Exemption Period and all Service Payments and Minimum Service Payments which are accrued but unpaid to the date of termination have been paid in full; provided, however, that the City'S obligation to reimburse Developer for Minimum Service Payments shall continue until paid in full, notwithstanding the earlier termination of this Agreement.

(b) Upon the termination of this Agreement, the exemption from real property

taxes shall cease and terminate and the City shall, within thirty (30) days of a request by

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Developer (the "Termination Request"), sign one or more instruments in recordable form evidencing such termination for filing with the Recorder's Office of the County.

8. Assignment. The obligation of Developer to make the Developer Service

Payments pursuant to Section Sea) hereof with respect to the Improvements to the Primary Development Site and the obligation of Developer to make Minimum Service Payments as provided in Section l(c)(ii) hereof shall be covenants running with the land and, as provided in Section Sea) hereof, shall be binding on any future owner of all or any portion of the Primary Development Site.

9. Representations of Developer and the City.

(a) Developer hereby represents and warrants to the City that Developer has

full power and authority to enter into and perform its obligations under this Agreement, and that the execution, delivery and performance of this Agreement and all documents contemplated hereby have been duly and effectively approved and authorized by all necessary action. Developer agrees that this Agreement is binding upon it and its successors and assignees, in accordance with its terms, and that upon execution hereof by Developer, this Agreement is a legal, valid and binding obligation of Developer, enforceable in accordance with its terms,

(b) The City hereby represents and warrants to and covenants with Developer

that the City has full power and authority to enter into and to perform its obligations under this Agreement, and that the execution, delivery and performance of the Agreement and all documents contemplated hereby have been duly and effectively approved and authorized by all necessary action. The City agrees that this Agreement is binding upon it and its successors and assignees, in accordance with its terms, and upon execution hereof by the Mayor and Director of Finance, this Agreement is a legal, valid and binding obligation of the City, enforceable in accordance with its terms.

10. Binding Effect. This Agreement shall be binding upon and shall inure to the·

benefit of the City and Developer and their respective successors and assigns. No provision of this Agreement is intended to or shall be merged by reason of any deed transferring title to the Primary Development Site to any successor in interest of Developer, and any such deed shall not be deemed to affect or impair the provisions and covenants of the Agreement.

11. Remedies.

(a) In the event of a breach of this Agreement or any of its terms by

Developer, the City shall provide written notice of such breach to the defaulting party at the address specified in Section 12 hereof (or such other address as Developer may specify in writing) so that Developer may attempt to cure the same. In case such remedial action is not taken or not diligently pursued within thirty (30) days of such written notice, or in case such action does not cure the breach within a reasonable period after its commencement, the City may institute such proceedings at law or in equity as may be necessary or appropriate in its opinion to remedy such breach, including without limitation an action to foreclose upon the lien on the Primary Development Site for unpaid Minimum Service Payments.

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(b) Except as otherwise provided herein, Developer shall not be considered in

default in its obligations to be performed hereunder, if delay in the performance of such obligations is due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, acts of God, acts of the federal or state government, acts or delays of the City, fires, floods, unusually severe weather, epidemics, freight embargoes, unavailability of materials, strikes of contractors, subcontractors or materialmen, or other unforeseen events (but not including Developer's lack of financial capacity or Developer's failure to comply with all applicable City building, zoning, fire or safety codes) and other causes beyond the control of Developer ("Force Majeure"). It is the purpose and intent of this subsection that in the event of the occurrence of any unforeseen delay, the time or times for performance of such obligation shall be extended for the period of the unforeseen delay.

(c) In the event of a breach of this Agreement or any of its terms by the City,

Developer shall provide written notice of such breach to the City at the address specified in Section 11 hereof (or such other address as the City may specify in writing) so that the City may attempt to cure the same. In case such remedial action is not taken or not diligently pursued within thirty (30) days of such written notice, or in case such action does not cure the breach within a reasonable period after its commencement, Developer may institute such proceedings at law or in equity as may be necessary or appropriate in its option to remedy such breach, including without limitation an action to enforce the City's obligations under this Agreement by writ of mandamus.

12. Notices. All notices and formal requests or demands required or appropriate

hereunder shall be personally delivered, sent by overnight courier or sent by registered or certified mail and shall be deemed to have been served or given when personally delivered, sent by overnight courier or enclosed in a properly sealed and addressed envelope or wrapper, and deposited postage prepaid in a post office, branch post office or post office box regularly maintained by the United States Postal Service. Notices are to be addressed as follows:

If to the City:

City of A yon, Ohio Attention: Mayor 36080 Chester Road Avon, Ohio 44011

With a copy to:

Director of Law City of Avon, Ohio 36080 Chester Road Avon, OR 44011

and

Virginia D. Benjamin, Esq. Calfee, Halter & Griswold LLP 1400 KeyBank Center

800 Superior Avenue Cleveland, Ohio 44114-2688

or to such other person or place as the City may designate in writing;

If to Developer:

JGAvonLLC

c/o The Richard E. Jacobs Group LLC 25425 Center Ridge Road

Cleveland, Ohio 44145-4122 Attention: President

With a copy to:

The Richard E. Jacobs Group LLC 25425 Center Ridge Road Cleveland, Ohio 44145-4122 Attention: General Counsel

or to such other or additional person or place as Developer may designate in

writing.

13. Counterparts. This Agreement may be executed in several counterparts, each of

which shall be regarded as an original and all of which shall constitute but one and the same Agreement.

14. Goveming Law. This Agreement shall be governed by the laws of the State of

Ohio.

15. Third Party Beneficiaries. There shall be no third party beneficiaries with respect

to the obligations of Developer under this Agreement.

16. Partial Invalidity. In case any section or provisions of this Agreement or any

covenant, stipulation, obligation, agreement, act or action or part hereof, made assumed, entered into or taken hereunder or any application hereof, is for any reason held to be illegal or invalid, such illegality or invalidity shall not affect the remainder hereof, and any other section or provision hereof, and any other covenant, stipulation, obligation, agreement, act or action shall be construed and enforced as if such illegal or invalid portion were not contained herein, nor shall such illegality or invalidity of any application hereof affect any legal or valid application hereof and each such section, provisions, covenant, stipulation, obligation, agreement, act or action or part hereof shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law.

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{VDB4652.DOC;14 )

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17. Incorporation of Recitals. The recitals to this Agreement are incorporated herein

and made part of this Agreement.

(Balance of Page Intentionally Left Blank)

Mayor

IN WITNESS WHEREOF, the City, and each Developer have caused this Financing Agreement to be signed in their respective names by their duly authorized officers, as of the date hereinabove written.

CITY OF AVON, OHIO

By:

By:

Director of Finance

Approved as to form:

Director of Law Date:

-------------------------

JG AVON LLC, in Ohio limited liability company

By: __

Judson E. Smith, Chief Executive Officer

STATE OF OHIO )

) SS:

COUNTY OF LORAIN )

Before me, a Notary Public in and for said County and State, personally appeared James Smith and William Logan, Mayor and Director of Finance, respectively, of the City of Avon, Ohio, who acknowledged that they signed the foregoing instrument as the fully authorized officers of said City of Avon, Ohio, a municipal corporation of the State of Ohio, and that the same is their free act and deed and the free act and deed, respectively, as such officer and individually.

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal

at , Ohio, on this day of , 20 __ .

Notary Public

{VDB4652.DOC;14 }

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