SUPPLEMENTAL AGREEMENT NO. 1 COOPERATIVE AGREEMENT. between. CITY OF CLEVELAND and COUNTY OF CUYAHOGA. relating to the GATEWAY PROJECT

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1 SUPPLEMENTAL AGREEMENT NO. 1 to COOPERATIVE AGREEMENT between CITY OF CLEVELAND and COUNTY OF CUYAHOGA relating to the GATEWAY PROJECT (2017 QUICKEN LOANS ARENA PROJECT)

2 This Supplemental Agreement No. 1, dated as of [ ], 2017 (the Supplemental Agreement ), between the City of Cleveland, Ohio (the City ) and the County of Cuyahoga, Ohio (the County ) supplements the Cooperative Agreement, made and entered into as of September 15, 1992 (the Original Cooperative Agreement ), between the City and the County. Unless otherwise defined herein, capitalized words and terms used in this Supplemental Agreement shall have the definitions assigned to them in the Original Cooperative Agreement. RECITALS 1. As part of the cooperative effort among the City, the County and Gateway described in the preambles of the Original Cooperative Agreement, the cooperating parties proposed that the County provide a loan to Gateway from the proceeds of the Arena Bonds and that the City direct certain non-tax payments to the County as additional security for those Bonds. 2. The City, the County and Gateway now desire to further that cooperation and propose that the County issue the Series 2017 Arena Bonds (as defined below) for the purpose of funding improvements to the Arena (the 2017 Arena Project ), and that the City continue to direct certain non-tax payments to the County as additional security for the Series 2017 Arena Bonds and to fund related reserves. NOW THEREFORE, inconsideration of the mutual agreement set forth below, the County and the City agree as follows. Section 1. Definitions. In addition to the words and terms defined elsewhere in this Supplemental Agreement or in the Original Cooperative Agreement and not otherwise defined herein, the words and terms set forth below shall have the following meanings unless the context or use clearly indicates another meaning or intent. Such definitions shall be equally applicable to both the singular and plural forms of any of the defined words and terms Arena Project means the improvements to the Arena defined as the Project in the Series 2017 Arena Bonds Series 2017 Arena Bond Resolution. "Authorized County Representative" means the Executive or the Chief Fiscal Officer of the County. Cavs means the Cavaliers Operating Company, LLC. Cooperative Reserve means the Cooperative Reserve created and provided for in the Series 2017 Arena Bonds Trust Agreement. Notice Address means [TBA]

3 Series 2017 Arena Admissions PILOT means the payment in lieu of admissions taxes to be made by the Cavs or Gateway to the Series 2017 Trustee pursuant to Section (h) of the Codified Ordinances of the City as amended by Ordinance No passed on February 24, 1992 by the Council of the City and as further amended by Ordinance No. [ ]-17 passed on [ ], 2017 by the Council of the City, i.e., (a) five percent (5%) of all admissions charges for admissions to the Gateway Arena during the related Collection Year for: basketball games played by the Cleveland Cavaliers at the Gateway Arena during each basketball season (including divisional, conference and championship play-off games); preseason or exhibition basketball games played by said Cavaliers at the Gateway Arena and the NBA All-Star Game and any other event held at the Gateway Arena in which professional basketball players participate (collectively, "Games"), in addition to admission charges for any Games resold on the secondary market via AXS, plus (b) two percent (2%) of admissions charges for admissions to the Gateway Arena for events other than Games in any Collection Year, in addition to admission charges for any Gateway Arena events resold on the secondary market via AXS; plus (c) in the event that the City increases the taxes payable under this chapter from eight percent (8%) to a higher rate, the percentage equal to such increase times all admissions charges for all admissions during such Collection Year to the Gateway Arena for Games, and plus (d) in the event that the City increases the taxes payable under this chapter from eight percent (8%) to a higher rate, the percentage equal to such increase times all admissions charges for all admissions during such Collection Year to the Gateway Arena for any events other than Games. Series 2017 Arena Bond Fund means the bond fund established under the Series 2017 Arena Bonds Trust Agreement for the payment of Series 2017 Arena Bond Service Charges. Series 2017 Arena Bond Resolution means Resolution No. [ ], adopted by the Council of the County on [ ], Series 2017 Arena Bond Service Charges means, for any period or payable at any time, the principal of and interest on the Series 2017 Arena Bonds for that period or payable at that time, whether due at maturity or upon acceleration or mandatory redemption. Series 2017 Arena Bonds means (i) the County of Cuyahoga, Ohio, [ Bonds (Arena Project), Series 2017]; and (ii) any bonds or other obligations issued to refinance those obligations, but does not include the Arena Bonds as defined in the Original Cooperative Agreement. "Series 2017 Arena Bonds PILOT" means the portion of the Series 2017 Arena Admissions PILOT to be applied by the Series 2017 Bonds Trustee to the payments with respect to the Series 2017 Arena Bonds described in Section 2 of this Supplemental Agreement. The portion of the Series 2017 Arena Admissions PILOT that will constitute the Series 2017 Arena Bonds PILOT in each Series 2017 Bond Year shall be the amount collected during the Collection Year and needed to pay Series 2017 Arena Bond Service Charges during the Series 2017 Bond Year, as described in Section 2(b) of this - 3 -

4 Supplemental Agreement, provided that such amount shall not exceed in any Series 2017 Bond Year the amount specified in Section 2(b) of this Supplemental Agreement. Series 2017 Arena Bonds Trust Agreement means [TBA]. Series 2017 Arena Bonds Trustee means the bank serving as trustee under the Series 2017 Arena Bonds Trust Agreement, initially [TBA]. Series 2017 Bond Year means a year commencing on June 2 and ending on the following June 1. Sports Complex Reserve means the Sports Complex Reserve created and provided for in the Series 2017 Arena Bonds Trust Agreement. Section 2. Payment and Application of Series 2017 Arena Bonds PILOT. (a) Amendment of Codified Ordinances. Pursuant to Ordinance No. [ ]-17 passed on [ ], 2017, by the Council of the City, a copy of which is attached to this Supplemental Agreement as Exhibit A, the City has provided for the amendment of Section of the Codified Ordinances of Cleveland (as previously amended by Ordinance No passed on February 24, 1992 by the Council of the City) as set forth in that Ordinance. Nothing in this Supplement shall be deemed to alter the Original Cooperative Agreement or, specifically, the required payment and application of the Arena Admissions PILOT or the Arena Bonds PILOT as defined in the Original Cooperative Agreement so long as any Arena Bonds as defined in the Original Cooperative Agreement remain outstanding. (b) Application of Series 2017 Arena Bonds PILOT. From the Series 2017 Arena Admissions PILOT paid to the Series 2017 Bonds Trustee pursuant to division (h) of Section of the Codified Ordinances of Cleveland, the Series 2017 Bonds Trustee shall: (i) first and before any other deposit or use thereof, deposit in the Series 2017 Bond Fund the full amount needed (after taking into account other amounts on deposit in the Series 2017 Bond Fund) to pay all Series 2017 Bond Service Charges in that Series 2017 Bond Year; (ii) second, from and after the date in each Bond Year when the full amount of the Series 2017 Arena Bonds PILOT for that Series 2017 Bond Year has been deposited in the Series 2017 Bond Fund, deposit any remaining amounts in the Sports Facility Reserve until a maximum amount of $3,500,000 is deposited in the Sports Facility Reserve in that Series 2017 Bond Year; and (iii) third, deposit any remaining amounts into the Cooperative Reserve. All such amounts deposited in the Series 2017 Bond Fund, the Sports Facility Reserve and the Cooperative Reserve shall be held and applied as required or permitted by the Series 2017 Bonds Trust Agreement

5 Section 3. County Issuance of Series 2017 Arena Bonds; Term of Agreement. The City is entering into this Supplemental Agreement in consideration of the County s issuance of the Series 2017 Arena Bonds, and the City s obligations with respect to the payment and application of the Series 2017 Arena Bonds Pilot under this Supplemental Agreement are contingent upon the County s issuance of the Series 2017 Arena Bonds in an amount and for the purposes set forth in the Series 2017 Bond Resolution. This Agreement shall be and remain in full force and effect from the date of its delivery until such time as all of the Series 2017Arena Bonds shall have been fully paid or shall have been deemed fully paid and discharged under the Series 2017 Bonds Trust Agreement. Section 4. Notices. All notices, certificates, requests or other communications hereunder shall be in writing and shall be deemed to be sufficiently given when mailed by registered or certified mail, postage prepaid, and addressed to the appropriate Notice Address. The County and the City, by notice given hereunder, may designate any further or different addresses to which subsequent notices, certificates, requests or other communications shall be sent. Section 5. Extent of Covenants of the City and County; No Personal Liability. All covenants, obligations and agreements of the City and the County contained in this Supplemental Agreement shall be effective to the extent authorized and permitted by applicable law. No such covenant, obligation or agreement shall be deemed to be a covenant, obligation or agreement of any present or future member, officer, agent or employee of the City or the County or the legislative authority of the City or the County in other than his or her official capacity, and neither the members of the legislative authority nor any official executing this Agreement shall be subject to any personal liability or accountability by reason of the covenants, obligations or agreements of the City or the County contained in this Supplemental Agreement. Section 6. Binding Effect. This Supplemental Agreement shall inure to the benefit of and shall be binding in accordance with its terms upon the City and the County and their respective permitted successors and assigns provided that this Supplemental Agreement may not be assigned by the City or the County except to the Trustee for the Series 2017 Arena Bonds or as otherwise may be necessary to enforce or secure payment of Series 2017 Arena Bond Service Charges. This Supplemental Agreement may be enforced only by the parties, their assignees and others who may, by law, stand in their respective places. Section 7. Amendments and Supplements. This Supplemental Agreement may not be effectively amended, changed, modified, altered or terminated except by written instrument authorized by the legislative authorities of the County and the City

6 Section 8. Execution Counterparts. This Supplemental Agreement may be executed in any number of counterparts, each of which shall be regarded as an original and all of which shall constitute but one and the same instrument. Section 9. Severability. If any provision of this Supplemental Agreement, or any covenant, obligation or agreement contained herein is determined by a court to be invalid or unenforceable, that determination shall not affect any other provision, covenant, obligation or agreement, each of which shall be construed and enforced as if the invalid or unenforceable portion were not contained herein. That invalidity or unenforceability shall not affect any valid and enforceable application thereof, and each such provision, covenant, obligation or agreement shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law. Section 10. Governing Law. This Supplemental Agreement shall be deemed to be a contract made under the laws of the State and for all purposes shall be governed by and construed in accordance with the laws of the State. IN WITNESS WHEREOF, the County and the City have caused this Agreement to be duly executed in their respective names, all as of the date hereinbefore written. [City and County signature blocks] - 6 -

7 EXHIBIT A CITY ORDINANCE AMENDING CODIFIED ORDINANCES SECTION [TBA] - 7 -