Jeff, 

Thank you for your email message conveying your questions on the Guaranty for the Freedom Center.  
Here are our responses based upon review with our legal counsel: 
 
1. The Commission uses payment guaranties; our legal counsel advises that a collection guaranty 
will not suffice. 
2. The Guaranty is limited to the amount being approved by the Commission for disbursal to the 
Freedom Center.  At this time, the Freedom Center is requesting approval for release of an 
$850K appropriation and approximately $460K we are holding in escrow.  The Commission staff 
does not yet have all the information requested from the Freedom Center staff in order to be 
able to complete our staff report to recommend approval for release of the appropriation, or to 
recommend whether any of the escrow should be released at this time. 
3. Commission counsel is recommending the Commission not turn this decision over to a third 
party.  It may be possible to include language allowing a request to the Commission to review 
the need for the Guaranty at a future point in time and to take into consideration a written 
expert opinion. 
4. Our legal counsel advises that the Guaranty document effectively works as you have outlined. 
 
When Mr. Pepper has made a decision as to whether he wishes to proceed with the Guaranty 
document, please advise us.  If his decision is to proceed, we will prepare the Guaranty document in 
counterparts for his signature.  The Commission would not execute the Guaranty until the Commission 
votes to approve it along with the legal agreements the Freedom Center would sign, and approval to 
release the funds. 
 
Thank you, 
 
Kathy 
 
Kathleen M. Fox, FASLA
Executive Director
Ohio Cultural Facilities Commission
100 E. Broad Street, Suite 300
Columbus, OH 43215-3661

Vox: 614.752.2770
Fax: 614-752-2775
e-mail: kfox@culture.ohio.gov
kfox@post.harvard.edu

visit our website: www.culture.ohio.gov

Building Culture in Ohio's Communities: The Ohio Cultural Facilities Commission, formerly the Ohio Arts & Sports Facilities
Commission, oversees capital improvement funds appropriated by the Ohio General Assembly and Governor for community cultural
facility projects including non-profit theaters, museums, historical sites and publicly owned professional sports venues. You are
invited to visit www.culture.ohio.gov or call (614) 752-2770 for more information on the Commission or to learn how we can assist
your cultural facility project.
 
From: Rohr, Jeffrey L. [mailto:JRohr@Graydon.com]
Sent: Friday, November 19, 2010 12:35 PM
To: Kathy Fox
Cc: Rohr, Jeffrey L.; Buttress, Christine A.
Subject: John Pepper Guaranty / Freedom Center
Kathy,
Thank you for taking the time to talk with me today. As requested, here are some thoughts and
discussion points for your consideration.

1. I would repeat Mr. Pepper's desire for the Guaranty to be a "collection" guaranty, rather than
a payment guaranty (as currently drafted). The essence of a collection guaranty is that the
beneficiary of the Guaranty will have exhausted its rights and remedies against the Borrower and
its assets prior to demanding payment or pursuing any right or remedy for any resulting
deficiency against the Guarantor.

2. Regardless of the form of the Guaranty, our understanding is that the Guaranty would be
limited in amount to the roughly $1,300,000 that has been appropriated but not yet disbursed to
the Freedom Center.

3. If the form of Guaranty is to remain as has been proposed (a payment guaranty), then Mr.
Pepper has suggested that the Guaranty contain a specific termination clause. This clause would
provide for the termination of the Guaranty upon a mutually agreeable third party certification as
the :financial sustainability" of the Freedom Center. In our discussion, you indicated that you
did not feel this clause would be acceptable to the Commission as a definitive termination.
Rather, you indicated that this type of certification may be something that the Commission
would consider (but not be bound to) upon a request in the future by the Guarantor for
termination of the Guaranty.

4. In our discussion, you explained to me that these appropriated funds are only contemplated to
be repaid to the State upon a failure of the cultural entity (here the Freedom Center) from
fulfilling its obligations under the Agreement pursuant to which the funds were disbursed. I
understand that there is a 15 year term to that Agreement. One additional suggestion that I
discussed with you was to have the Guaranty and the amount payable by the Guarantor under the
Guaranty reduce on a dollar for dollar basis as funds (if any) were required to be repaid under the
Agreement. Taking that analysis one step further than we discussed, as the amounts that could
be required to be repaid under the Agreement may decrease over time, then likewise there could
be a dollar for dollar reduction in the limitation of the amount payable under the Guaranty.

This final discussion point has not been discussed in detail with Mr. Pepper, but is provided here
for mutual consideration.

Thank you again for taking the time to talk to me today. Please let me know if you have any
questions.

Jeff Rohr
Graydon Head & Ritchey LLP
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Phone: (513) 629-2852
Fax: (513) 651-3836
E-mail: Jrohr@graydon.com
The following information is from the law firm of Graydon Head & Ritchey LLP and may be protected by
attorney/client privilege. If you believe it has been sent to you in error, do not read it. Please reply to the
sender that you have received the message in error, then delete the message.

Do not retain a copy. Thank you.

**********************************
11-19-10

Jeff Rohr
Graydon Head & Ritchey LLP
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Phone: (513) 629-2852
Fax: (513) 651-3836
E-mail: Jrohr@graydon.com

The following information is from the law firm of Graydon Head & Ritchey LLP and may be protected by
attorney/client privilege. If you believe it has been sent to you in error, do not read it. Please reply to the
sender that you have received the message in error, then delete the message.

Do not retain a copy. Thank you.

**********************************