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Exhibit 10.4
MANAGEMENT AGREEMENT
By and Between
GATEWAY ECONOMIC DEVELOPMENT
CORPORATION OF GREATER CLEVELAND
and
BALLPARK MANAGEMENT COMPANY
Dated as of July 3, 1991
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS.............................................................................. 2
1.1 Definitions................................................................. 2
1.2 Accounting Terms............................................................ 18
ARTICLE II CONSTRUCTION............................................................................ 19
2.1 Operator's Involvement in Design............................................ 19
2.2 Gateway's Construction Obligations.......................................... 19
2.3 Concessionaire Participation................................................ 19
ARTICLE III MANAGEMENT AND OPERATION BY THE OPERATOR............................................... 19
3.1 Grant of Management and Operation Rights.................................... 19
3.2 Personnel................................................................... 20
3.3 Supplies.................................................................... 20
3.4 Contracts................................................................... 20
3.5 Excuse...................................................................... 21
ARTICLE IV TERM.................................................................................... 21
4.1 Term........................................................................ 21
4.2 Completion.................................................................. 21
4.3 Late Completion Remedies.................................................... 22
4.4 Extension Options........................................................... 23
ARTICLE V FEES TO GATEWAY.......................................................................... 23
5.1 Payment of Fees............................................................. 23
5.2 Audit....................................................................... 23
ARTICLE VI PREMIUM SEATING REVENUE ACCOUNT......................................................... 24
6.1 Premium Seating Revenue Account............................................. 24
6.2 Application of Funds........................................................ 24
ARTICLE VII USE OF BASEBALL FACILITY; SPECIAL EVENTS............................................... 25
7.1 Operator's Use.............................................................. 25
7.2 Gateway's Use............................................................... 26
7.3 Lessee's Use................................................................ 26
7.4 Special Events.............................................................. 26
ARTICLE VIII INSURANCE AND SUBROGATION............................................................. 28
8.1 Gateway's Insurance......................................................... 28
8.2 Operator's Insurance........................................................ 29
8.3 Insurance Requirements...................................................... 30
8.4 Certificates................................................................ 30
8.5 Waiver of Subrogation....................................................... 31
ARTICLE IX ALTERATIONS BY THE OPERATOR............................................................. 31
9.1 Alterations and Additions by the Operator................................... 31
9.2 Placement of Heavy Equipment................................................ 32
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ARTICLE X MAINTENANCE OF AND REPAIRS TO THE BASEBALL
FACILITY....................................................................... 32
10.1 Allocation of Responsibilities.............................................. 32
10.2 Operator's Routine Maintenance
Obligations................................................................. 32
10.3 Maintenance and Repair Procedures........................................... 33
10.4 Capital Repairs Fund........................................................ 33
10.5 Operator Capital Repairs.................................................... 34
10.6 Gateway Capital Repairs..................................................... 35
10.7 Capital Repairs Procedures.................................................. 35
10.8 Major Capital Repairs Procedure............................................. 37
ARTICLE XI CONCESSIONS............................................................................. 37
11.1 Concession Rights........................................................... 37
11.2 Merchandise and Services.................................................... 38
11.3 Prices...................................................................... 38
11.4 Assignment of Rights........................................................ 38
11.5 Concession Revenue.......................................................... 39
ARTICLE XII SCOREBOARDS............................................................................ 39
12.1 Duties...................................................................... 39
12.2 Advertising................................................................. 39
ARTICLE XIII ADVERTISING........................................................................... 40
13.1 Advertising Rights.......................................................... 40
13.2 Other Advertising........................................................... 40
13.3 Additional Signs............................................................ 40
ARTICLE XIV BASEBALL FACILITY SECURITY............................................................. 40
14.1 Event Security.............................................................. 40
14.2 Twenty-Four (24) Hour Security.............................................. 41
ARTICLE XV REAL ESTATE AND PERSONAL PROPERTY TAXES................................................. 41
ARTICLE XVI UTILITIES.............................................................................. 42
ARTICLE XVII RIGHT OF ENTRY AND INSPECTION......................................................... 42
17.1 Operator's Right of Entry and Inspection.................................... 42
17.2 Gateway's Right of Entry and Inspection..................................... 43
ARTICLE XVIII DEFAULT AND REMEDIES................................................................. 43
18.1 Default by Operator......................................................... 43
18.2 Gateway's Remedies.......................................................... 44
18.3 Default by Gateway.......................................................... 45
18.4 Operator's Remedies......................................................... 45
18.5 General Provisions.......................................................... 46
ARTICLE XIX SURRENDER OF USE RIGHTS................................................................ 47
19.1 General..................................................................... 47
19.2 Alterations and Improvements................................................ 47
19.3 Operator's Property......................................................... 47
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19.4 Abandoning Premises or Personal Property.................................... 48
ARTICLE XX DAMAGE TO BASEBALL FACILITY............................................................. 48
20.1 Property Damage............................................................. 48
20.2 Inability to Operate........................................................ 49
ARTICLE XXI INDEMNIFICATION........................................................................ 50
21.1 Operator Indemnification.................................................... 50
21.2 Gateway Indemnification..................................................... 50
21.3 Procedure Regarding Indemnification......................................... 50
21.4 Limitation.................................................................. 51
ARTICLE XXII ASSIGNMENT............................................................................ 51
22.1 Assignment by Operator...................................................... 51
22.2 Assignment by Gateway....................................................... 52
22.3 Assignees................................................................... 52
ARTICLE XXIII EMINENT DOMAIN....................................................................... 52
23.1 Termination for Condemnation................................................ 52
23.2 Allocation of Award......................................................... 53
23.3 Performance of Work......................................................... 53
23.4 Temporary Taking............................................................ 53
ARTICLE XXIV TERMINATION BY OPERATOR OR GATEWAY.................................................... 54
ARTICLE XXV CONDITIONS............................................................................. 55
25.1 Preconditions to Operator's Obligations..................................... 55
25.2 Premium Seating............................................................. 55
25.3 Security Commitment......................................................... 55
25.4 Financing Arrangements...................................................... 55
25.5 New Lease and Management Negotiations Commitment............................ 55
25.6 Condition to Gateway's Obligations.......................................... 56
ARTICLE XXVI REPRESENTATIONS BY OPERATOR........................................................... 56
26.1 Valid Existence............................................................. 56
26.2 Power; No Limitation on Ability to Perform.................................. 56
26.3 Valid Execution............................................................. 57
26.4 Defaults.................................................................... 57
26.5 Compliance with Laws........................................................ 57
ARTICLE XXVII REPRESENTATIONS BY GATEWAY........................................................... 58
27.1 Valid Existence............................................................. 58
27.2 Power; No Limitation on Ability to Perform.................................. 58
27.3 Valid Execution............................................................. 58
27.4 Defaults.................................................................... 58
27.5 Compliance with Laws........................................................ 59
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ARTICLE XXVIII MISCELLANEOUS....................................................................... 59
28.1 Force Majeure............................................................... 59
28.2 Amendment; Waiver........................................................... 59
28.3 Consent..................................................................... 60
28.4 Severability................................................................ 60
28.5 Covenant of Quiet Enjoyment................................................. 60
28.6 Prorations.................................................................. 60
28.7 Terms....................................................................... 60
28.8 Captions.................................................................... 60
28.9 Binding Effect.............................................................. 61
28.10 Agreement Contains All Terms................................................ 61
28.11 Notices..................................................................... 61
28.12 Applicable Law.............................................................. 62
28.13 Cross References............................................................ 62
28.14 Representatives............................................................. 62
28.15 Effective Date.............................................................. 62
28.16 Antidiscrimination Clause................................................... 62
28.17 Accord and Satisfaction..................................................... 62
28.18 Further Assurances.......................................................... 63
28.19 Joint Promotion of Baseball................................................. 63
28.20 Independent Contractor Relationship......................................... 63
28.21 No Third Party Beneficiary.................................................. 63
28.22 Conforming Amendments....................................................... 63
28.23 Counterparts................................................................ 64
ARTICLE XXIX GATEWAY COMMON AREA EASEMENT AND
MAINTENANCE AGREEMENT................................................................. 64
ARTICLE XXX LEGAL OPINIONS......................................................................... 64
30.1 Operator's Legal Opinion.................................................... 64
30.2 Gateway's Legal Opinion..................................................... 64
ARTICLE XXXI LEAGUE APPROVAL....................................................................... 64
ACKNOWLEDGMENT BY LESSEE........................................................................... 66
EXHIBITS .......................................................................................... 67
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MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement") is made as of
this 3rd day of July, 1991, by and between GATEWAY ECONOMIC DEVELOPMENT
CORPORATION OF GREATER CLEVELAND, a nonprofit corporation organized under the
laws of the State of Ohio (hereinafter referred to as "Gateway"), and BALLPARK
MANAGEMENT COMPANY, an Ohio corporation (hereinafter referred to as the
"Operator").
RECITALS:
A. Gateway intends to construct a baseball park with related
amenities (the "Ballpark") on certain real property located in the City of
Cleveland, Ohio (the "City"), for the purpose of staging home games for the
Cleveland Indians professional baseball team (the "Team") and other special
events, including civic and charitable events.
B. Gateway has issued (i) $78,664,320 Senior Lien Excise Tax
Bonds, 1990 Series A and B (the "Senior Bonds"), (ii) $38,390,000 Subordinated
Excise Tax Bonds (Cuyahoga County Annual Guaranty), Series 1990 (the
"Subordinated Bonds"), and (iii) $31,000,000 Stadium Revenue Bonds, Series 1990
(the "Stadium Revenue Bonds," and together with the Senior Bonds and the
Subordinated Bonds, collectively the "Bonds"), and has obtained other public and
private funding to pay for the costs of land acquisition, demolition, design,
construction, financing and other related costs incurred in connection with the
development, INTER ALIA, of the Baseball Facility (as hereinafter defined).
C. Certain of the proceeds of the Bonds have been and will be
deposited into separate escrow or trust accounts (the "Bond Escrow Accounts").
D. Gateway and the Lessee have previously executed a
Memorandum of Intent, dated as of December 8, 1990 (the "Memorandum"), that
included the program for the design and construction of the Baseball Facility as
was set forth in original program requirements of October 12, 1990, whereby
Gateway and the Lessee set forth their respective general understandings with
respect to the design, construction, maintenance and operation of the Baseball
Facility. Gateway and the Operator acknowledge that the Baseball Facility has
been designed so that expansion to accommodate the playing of professional
football by a National Football League Team is not precluded.
E. Gateway and the Lessee have executed and delivered a Lease
Agreement (the "Lease Agreement"), pursuant to which Gateway shall lease to the
Lessee Gateway's interest in the Ballpark Land and the Ballpark Improvements
(both as hereinafter defined).
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F. Gateway and the Lessee have executed and delivered a Ground
Lease (the "Ground Lease"), pursuant to which Gateway shall lease to the Lessee
Gateway's fee interest in the Field and the Field Improvements (both as
hereinafter defined).
G. Gateway desires to grant to the Operator, and the Operator
is desirous of accepting from Gateway, certain rights and responsibilities with
respect to the Baseball Facility, all upon the terms and conditions herein set
forth.
H. It is a condition precedent to (a) the release of the
amounts deposited into the Bond Escrow Accounts, and (b) the issuance of a
letter of credit by the Bank (as hereinafter defined) that Gateway and the
Operator shall have executed and delivered this Agreement.
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, the parties do hereby agree as
follows:
ARTICLE I
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DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement and unless
otherwise expressly indicated herein, the following terms shall have the
following meanings:
"ACTION" shall mean any demand, assertion, claim, action, or
proceeding, judicial or otherwise.
"ADDITIONAL PARKING" shall have the meaning set forth in
the Lease Agreement.
"AFFILIATE(S)" shall mean as to any named individual or
entity: (a) any individual or entity directly or indirectly owning, controlling
or holding with power to vote, fifty percent (50%) or more of the outstanding
voting interests of such named entity; (b) any entity fifty percent (50%) or
more of whose outstanding voting interests are, directly or indirectly, owned,
controlled or held with power to vote by such named individual or entity; (c)
any entity or individual directly or indirectly controlling, controlled by or
under common control (using ownership of fifty percent (50%) or more of the
outstanding voting interests as a test for determining control with respect to
an entity) with such named individual or entity; (d) any trustee, officer,
director or general partner of such named entity; or (e) if a named individual
or entity is an officer, director, general partner, trustee of an entity, such
entity.
"AGREEMENT" shall mean this Management Agreement.
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"AMERICAN LEAGUE" shall have the meaning set forth in
the Lease Agreement.
"ANNUAL CAPITAL REPAIRS FUND DEPOSIT" shall mean an amount
equal to five-tenths of one percent (.5%) of the final actual costs of
completing construction of and equipping the Baseball Facility in accordance
with the Final Plans, or such other amount as the Bank, the Lessee and Gateway
shall mutually agree to a lesser amount.
"ARENA" shall have the meaning set forth in the Lease
Agreement.
"ARENA LAND" shall have the meaning set forth in the
Lease Agreement.
"BALLPARK" shall have the meaning set forth in Recital
"A" hereof.
"BALLPARK EXPENSES" shall mean all expenses incurred by the
Operator (or the Lessee, in the event the Lessee elects to pay any of such
expenses), in connection with the management and the operation of the Baseball
Facility and the performance of its duties hereunder, determined on an accrual
basis in accordance with GAAP, including, but not limited to, the following:
(a) all operating expenses at the Baseball Facility that
are the responsibility of the Operator in accordance
with the terms of this Agreement;
(b) all salaries and benefits of personnel hired by the
Operator to carry out the Operator's responsibilities
hereunder to the extent such salaries and benefits
are not excessive;
(c) all out-of-pocket expenditures and all reasonable
overhead and administrative costs incurred by the
Operator in connection with its responsibilities
hereunder;
(d) all utility costs incurred by the Operator;
(e) all professional fees incurred in connection with
carrying out of the Operator's obligations under this
Agreement;
(f) to the extent not covered in (b) above, all expenses
incurred by the Operator for hiring and paying all
personnel necessary for the staging of baseball games
and any other events held at the Baseball Facility,
including, but not limited to, the day-of-game
personnel and a maintenance crew;
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(g) all federal, state and local taxes on the Operator's
operations to the extent paid by the Operator,
including any admission taxes payable with respect to
events held at the Ballpark (other than federal and
state income tax);
(h) all expenses incurred by the Operator in connection
with operating the scoreboards and the exterior
message board;
(i) all expenses incurred by the Operator in connection
with the sale of advertising in or on the Baseball
Facility, including, without limitation, scoreboard
advertising, advertising in concourses and video
advertising;
(j) all expenses incurred by the Operator in connection
with obtaining or maintaining the insurance coverage
described in Article VIII of this Agreement;
(k) all commissions, fees and any other expenditures
which, consistent with GAAP, are allocable to the
Operator's obligations hereunder;
(l) all Ballpark club and restaurant expenses; and
(m) all Premium Seating Expenses;
PROVIDED, HOWEVER, that Ballpark Expenses shall not include (i) Real and
Personal Property Taxes (unless otherwise paid by the Operator or the Lessee),
(ii) costs and expenses related to Capital Repairs (unless otherwise paid by the
Operator or the Lessee), (iii) insurance for the construction of the Baseball
Facility (unless otherwise paid by the Operator or the Lessee), (iv) any
interest expenses and any other costs or expenses payable as a result of or in
connection with any financing obtained by the Operator other than financing
incurred in the ordinary course of operating the Baseball Facility, (v) any
expenses that have been reimbursed to the Operator, (vi) advertising and
promotion costs and expenses related to Ticket sales, or (vii) costs and
expenses incurred in connection with Broadcast Fees.
"BALLPARK IMPROVEMENTS" shall have the meaning set forth
in the Lease Agreement.
"BALLPARK LAND" shall have the meaning set forth in the
Lease Agreement.
"BALLPARK REVENUES" shall mean, collectively, Premium
Seating Revenue and Operating Revenues.
"BANK" shall mean The Fuji Bank, Limited, a Japanese banking
corporation, acting through its San Francisco Agency, its
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successors and assigns, or any substitute letter of credit bank
under the Bond documents.
"BASEBALL FACILITY" shall mean, collectively, the
Ballpark Land, the Field and the Improvements.
"BASEBALL RULES AND REGULATIONS" shall mean the following
governing documents and agreements, as they may be amended from time to time:
(a) Constitution of the American League of Professional
Baseball Clubs;
(b) American League Rules and Regulations;
(c) American League Division of Receipts; and
(d) Major League Agreement.
"BEST REPORTS" shall have the meaning set forth in
Subsection 8.3(a) hereof.
"BOND ESCROW ACCOUNTS" shall have the meaning set forth in
Recital "C" hereof.
"BONDS" shall have the meaning set forth in Recital "B"
hereof.
"BROADCAST FEES" shall have the meaning set forth in the
Lease Agreement.
"BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday or a public or bank holiday or the equivalent for banks generally under
the laws of the State of Ohio.
"CAPITAL REPAIRS" shall mean any work that is reasonably
required to be performed in and about the Baseball Facility to repair, restore
or replace Components necessitated by any damage, destruction, ordinary wear and
tear, defects in construction or design, or any other cause; PROVIDED, HOWEVER,
that "Capital Repairs" shall not include (i) any work necessitated by Misuse,
(ii) any work related to any Component that was not included in the scope of
Gateway's Work or otherwise required to be completed at Gateway's expense as
provided herein or in the Lease Agreement, and (iii) Routine Maintenance.
Capital Repairs shall include, but shall not be limited to:
(a) repair or replacement of an HVAC compressor;
(b) replacement of carpeting that wears out as a result
of ordinary wear and tear with carpeting of similar
quality; provided such replacement shall not be
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required more frequently than once every four years
other than for defective workmanship or product;
(c) repair or replacement of cracked or disintegrated
concrete, broken pipes or leaking roof or sections
thereof;
(d) manufacturer-recommended replacement of scoreboard,
exterior message board and field lighting bulbs,
fuses and circuit breakers;
(e) replacement of all windows and other glass broken
due to settling;
(f) replacement of a seat that wears out or replacement
of a seat standard or the concrete into which the
seat is affixed; or
(g) general reapplication of protective materials, such
as paint or weatherproofing.
In addition to the foregoing, "Capital Repair" shall also include, but shall not
be limited to, the following:
(a) replacing any obsolete Component with more modern
replacements that will most likely be used in at
least seventy-five percent (75%) of major league
baseball parks within five (5) years of such
obsolescence; provided, however, that the parties
agree that the provisions of this subsection (a)
shall not apply to the Main Scoreboard until after
the end of the tenth (10th) Term Year and that in
the event of a replacement of the Main Scoreboard
for obsolescence only such costs shall be shared
equally by the Operator and Gateway;
(b) changes or improvements required by television
networks having contracts with the Operator, the
Lessee or the American League;
(c) reasonable changes or improvements required of a
majority of American League open-air baseball parks
by the American League, the Commissioner of Baseball
or Baseball Rules and Regulations;
(d) changes or improvements required or recommended by
any insurance carrier to enable the Operator to
obtain insurance coverage at commercially reasonable
rates, provided that in lieu of effectuating such
change or improvement, Gateway may agree, in its
discretion, to pay the increased insurance premiums;
or
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(e) changes or improvements required by any laws,
ordinances, orders, rules, regulations or
requirements of any governmental authority.
"CAPITAL REPAIRS FUND" shall have the meaning set forth in
Section 10.4 hereof.
"CENTRAL MARKET COMMUNITY DEVELOPMENT PLAN" shall have the
meaning set forth in the Lease Agreement.
"CENTRAL MARKET SQUARE SITE" shall have the meaning set forth
in the Lease Agreement.
"CITY" shall have the meaning set forth in Recital "A"
hereof.
"CLUB SEATS" shall mean the seats to be constructed as part of
the Ballpark and designated as club seats in the Final Plans.
"COMPLETION DATE" shall mean the date of Substantial
Completion of the Improvements, unless otherwise specified herein.
"COMPLETION DEFAULT" shall have the meaning set forth in
Subsections 4.2 and 4.3(a) hereof.
"COMPLETION GUARANTY ACCOUNTS" shall have the meaning set
forth in the Lease Agreement.
"COMPONENT" shall mean any item that is incorporated into the
Baseball Facility, including, but not limited to, all structural members, seats,
electronic parts, scoreboards, and Ballpark equipment.
"CONDEMNATION" shall mean any taking of property by exercise
of the power of eminent domain, whether by formal condemnation proceedings or by
purchase under threat of exercise of the power of eminent domain proceedings.
"CONCESSIONAIRE" shall have the meaning set forth in
Section 2.3 hereof.
"COUNTY" shall mean Cuyahoga County, Ohio.
"CPI" shall mean the Consumer Price Index for the City of
Cleveland, Urban Wage Earners and Clerical Workers, All Items (1982-4=100), as
published by the U.S. Department of Labor, Bureau of Labor Statistics. If the
manner in which the CPI is determined by the Bureau of Labor Statistics shall be
substantially revised, including, without limitation, a change in the base index
year, an adjustment shall be made in such revised index that would produce
results reasonably equivalent to those that would have been obtained if such CPI
had not been so revised. If the CPI shall
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become unavailable to the public because its publication is discontinued or
otherwise, or if equivalent data are not readily available to make the
adjustment referred to in the preceding sentence, then a comparable index
published by an agency of the United States government that reflects changes in
the cost of living or purchasing power of the consumer dollar published by any
other governmental agency will be substituted therefor, or, if no such index
shall be available, then a comparable index published by a major bank or other
financial institution shall be used.
"DESIGN ARCHITECT" shall mean the architectural team for the
design of the Baseball Facility which is headed by the architectural firm of
Helmuth, Obata and Kasabaum.
"DIRECT PERSONNEL EXPENSE" shall mean with respect to any work
being performed by the Operator's own employees (whether paid on an hourly basis
or otherwise), the cost, determined on an hourly basis, of all wages and
benefits paid to such employees.
"EMERGENCY REPAIR" shall mean Capital Repairs that are
necessary to protect public health or safety or that, if performed promptly can,
in the Operator's reasonable judgment, avoid material cost to the Operator or
Gateway.
"EXCLUDED OCCURRENCE" shall mean any of the following:
(a) damage or injury occurring at or arising out of or
incidental to Gateway Special Events;
(b) damage or injury arising out of any negligent or
willfully wrongful act or omission of Gateway, its
agents, employees, contractors or subcontractors, or
breach of any of Gateway's obligations hereunder; and
(c) damage or injury arising out of defects in the design
of the Baseball Facility or in the workmanship or
materials employed in the construction of the
Baseball Facility (but only to the extent included in
Gateway's Work, or any Capital Repairs made by any
party other than the Operator or its agents,
employees or contractors).
"EXCLUSIVE USE PERIOD" shall mean each Home Date and the
seventy-two (72) hours (or such greater period of time as may be necessary for
preparation of the Baseball Facility for baseball play, as reasonably determined
by the Lessee) prior to such Home Date and the forty-eight (48) hours after such
Home Date.
"FEES" shall have the meaning set forth in Section 5.1
hereof.
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"FIELD" shall have the meaning set forth in the Lease
Agreement.
"FIELD IMPROVEMENTS" shall have the meaning set forth in
the Lease Agreement.
"FINAL PLANS" shall have the meaning set forth in the
Lease Agreement.
"FINANCING ARRANGEMENTS" shall mean all of Gateway's financing
plans and arrangements related to the construction of Gateway's Work and the
maintenance and operation of the Baseball Facility or the On-Site Parking.
"FORCE MAJEURE" shall mean acts of God, fire or other
casualty, earthquake, flood, epidemic, landslide, enemy act, war, holocaust,
riot, intervention by civil or military authorities of government, insurrection
or other civil commotion, general unavailability of certain materials, strikes,
boycotts or labor disputes beyond the control of either party hereto that cause
such party to be delayed or hindered in, or prevented from, the performance of
any covenant or obligation hereunder, other than one for the payment of money.
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time, consistently applied.
"GATEWAY" shall have the meaning set forth in the initial
paragraph hereof.
"GATEWAY CAM AGREEMENT" shall mean the Common Area Easement
and Maintenance Agreement by and among Gateway, the Operator and the Lessee and
dated of even date herewith, which document sets forth the respective parties'
rights, duties and obligations with respect to the use, revenues, expenses,
repairs and maintenance of the Gateway Common Areas.
"GATEWAY COMMON AREAS" shall have the meaning set forth
in the Lease Agreement.
"GATEWAY DEFAULT" shall have the meaning set forth in
Section 18.3 hereof.
"GATEWAY SITE ARCHITECT" shall mean the architectural team for
the site planning of the Gateway project site which consists of the
architectural firm of Sasaki & Associates, Richard Fleischman Architects and
such other architectural firms selected by Gateway and approved by the Operator
and the Lessee.
"GATEWAY SPECIAL EVENT" shall mean a not-for-profit Special
Event to be staged by Gateway or a Promoter which is civic or charitable in
nature, including, but not limited to, Little
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League play-off games, Special Olympics, and other youth activities, and which
is subject to certain approval procedures set forth in this Agreement and the
Lease Agreement.
"GATEWAY'S REPRESENTATIVE" shall have the meaning set
forth in Section 28.14 hereof.
"GATEWAY'S SCOREBOARD ADVERTISING SHARE" shall mean one-third
(1/3) of any Net Scoreboard Advertising Revenue in excess of One Million Five
Hundred Thousand Dollars ($1,500,000) for each Term Year until April 1, 1996.
Thereafter the sum "$1,500,000" shall increase on April 1 of each Term Year to
an amount equal to (a) $1,500,000, PLUS (b) a percentage of $1,500,000 equal to
the percentage increase in the CPI for the period commencing on April 1, 1996,
and ending on the day before such adjustment. Any prorations required in
connection with this computation shall be based upon the length of a Season.
"GATEWAY'S WORK" shall have the meaning set forth in the
Lease Agreement.
"GOVERNMENT SECURITIES" means (i) any bonds or other
obligations of the United States of America which, as to principal and interest,
constitute direct obligations of or are guaranteed by the United States of
America for the full and timely payment thereof; (ii) any bonds, debentures,
participation certificates, notes or other obligations of any agency or other
corporation which has been or may hereafter be created by or pursuant to an Act
of Congress of the United States as an agency or instrumentality thereof, the
bonds, debentures, participation certificates, notes or other obligations of
which are unconditionally guaranteed by the United States of America as to full
and timely payment of the principal of and interest thereon; and (iii) any
certificates or other evidences of a direct ownership interest in obligations of
the character described in clauses (i) and (ii) hereof or in specific portions
thereof, including, without limitation, portions consisting solely of the
principal thereof or solely of the interest thereon, which certificates or other
evidences are maintained in the records of the Federal Reserve and are held by a
custodian, provided that Government Securities shall not include any unit
investment trusts, money market mutual funds, or other mutual funds.
"GROUND LEASE" shall have the meaning set forth in
Recital "F" hereof.
"HOME DATE" shall mean each of the Team's scheduled or
rescheduled home playing dates during the Season at the Baseball Facility; each
date on which an American League Championship Series, World Series game or other
post-season game could potentially be played at the Baseball Facility (except
that any such potential game shall not be deemed to be a Home Date after it is
finally determined that such game will not be played at the
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Baseball Facility); the date of any All-Star game scheduled at the Baseball
Facility; the seven-day period immediately preceding the first game of each
Season at the Baseball Facility and the date of any exhibition game, provided
the Lessee has given Gateway written notice of the date for such exhibition
game.
"IMPROVEMENTS" shall mean, collectively, the Ballpark
Improvements, the Premium Seating and the Field Improvements.
"INDEMNIFIED PARTY" shall mean any party entitled to
indemnification hereunder.
"INDEMNIFYING PARTY" shall mean the party required by the
terms hereof to give indemnification.
"INITIAL CAPITAL REPAIRS FUND DEPOSIT" shall mean the
first Annual Capital Repairs Fund Deposit.
"INTEREST RATE" shall mean the interest rate of two percent
(2%) above the rate of interest per annum then charged to large corporate
borrowers of the highest credit standing for short-term unsecured obligations,
but in no event exceeding the maximum legal rate permitted to be charged to the
Operator or Gateway, whichever is less.
"LEASE AGREEMENT" shall have the meaning set forth in
Recital "E" hereof.
"LESSEE" shall mean Cleveland Indians Baseball Company
Limited Partnership, an Ohio limited partnership.
"LESSEE DEFAULT" shall have the meaning set forth in the
Lease Agreement.
"LESSEE MISUSE" shall mean any event which causes damage to
the Baseball Facility arising out of uses by the Lessee not permitted under this
Agreement, the Lease Agreement or the Ground Lease or any grossly negligent or
willfully wrongful acts of the Lessee or the Lessee's patrons, licensees,
concessionaires, guests and invitees.
"LESSEE'S OFFICE SPACE" shall have the meaning set forth
in the Lease Agreement.
"LESSEE'S PARKING REVENUE" shall have the meaning set
forth in the Lease Agreement.
"LUXURY TAX RECEIPTS" shall have the meaning set forth
in the Lease Agreement.
"MAIN SCOREBOARD" shall mean the full color instant
replay main scoreboard and any advertising panels located in the
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immediate proximity of such scoreboard as described in the Program
Requirements.
"MAJOR CAPITAL REPAIR" shall mean any Capital Repair that
renders the Baseball Facility untenantable in whole or in part by the Lessee or
the Operator as determined by the Lessee or the Operator, in their reasonable
discretion, or will cost in excess of $500,000 to perform.
"MEMORANDUM" shall have the meaning set forth in Recital
"D" hereof.
"MISUSE" shall mean, collectively, Lessee Misuse and
Operator Misuse.
"NET DEBT SERVICE ON STADIUM REVENUE BONDS" shall mean the
debt service and other charges due and payable on the Stadium Revenue Bonds in
any Term Year MINUS all interest earned on reserve funds held in accounts as
required by the Stadium Revenue Bond documentation during such Term Year.
"NET SCOREBOARD ADVERTISING REVENUE" shall mean Scoreboard
Advertising Revenue MINUS any Ballpark Expenses reasonably related or reasonably
allocated to the Operator's scoreboard advertising and which are incurred by the
Operator during the Term Year in question.
"NET SPECIAL EVENT REVENUE" shall mean Special Event Revenue
MINUS any expenses reasonably related or reasonably allocated to the Operator's
Special Events (other than any Gateway Special Events) and which are incurred by
the Operator during the Term Year in question.
"OBLIGATIONS" shall mean and include any and all of either
party's obligations and/or liabilities to the other party of every kind, nature
and description, direct or indirect, secured or unsecured, joint, several, joint
and several, absolute or contingent, due or to become due, now or hereafter
existing or arising, regardless of how such obligations or liabilities arise or
by what agreement or instrument they may be evidenced or whether evidenced by
any agreement or instrument, including, but not limited to, any and all of such
party's obligations and/or liabilities under this Agreement or under any other
agreement between Gateway and the Operator regardless of whether the obligation
is to perform acts or refrain from taking any action.
"ON-SITE PARKING" shall have the meaning set forth in
the Lease Agreement.
"OPERATING DEFICIT" shall have the meaning set forth in
Article XXIV hereof.
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"OPERATING REVENUES" shall mean any and all revenues (whether
cash or property) received in connection with the operation and management of
the Baseball Facility including, but not limited to, Scoreboard Advertising
Revenue, Lessee's Parking Revenue and Special Event Revenues. Operating Revenues
shall also include, but shall not be limited to, all cash and other property
from time to time actually received by the Operator or the Lessee, in respect of
or in exchange for any of the following:
(a) concession sales at each event held at the Baseball
Facility, including, but not limited to, concession
sales in Premium Seating areas;
(b) vending machines located within the Baseball
Facility;
(c) the sale at the Baseball Facility of food, beverages
(including alcoholic beverages), souvenirs,
novelties, written, audio or video materials
(including, but not limited to, yearbooks, programs,
audiotapes, videotapes, media guides and scorecards)
to the extent not otherwise covered in (a) above;
(d) the sale of advertising of any nature in or on the
Baseball Facility, including, but not limited to,
scoreboard advertising, advertising on concourses and
video advertising in or on the Baseball Facility;
(e) promotion and merchandising programs sold at the
Baseball Facility;
(f) catering services performed at the Baseball
Facility; and
(g) the sale of Ballpark Club memberships;
PROVIDED, HOWEVER, that Operating Revenues shall not include (i) Premium Seating
Revenue, (ii) Ticket Revenue or (iii) Broadcast
Fees.
"OPERATOR" shall have the meaning set forth in the
initial paragraph hereof.
"OPERATOR MISUSE" shall mean any event which causes damage to
the Baseball Facility arising out of uses by the Operator not permitted under
this Agreement or any grossly negligent or willfully wrongful acts of the
Operator or the Operator's patrons, licensees, concessionaires, guests or
invitees.
"OPERATOR'S SPACE" shall mean the space to be located in the
Ballpark for the Operator's office facilities and designated as the Operator's
Space in the Final Plans.
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"PAID ATTENDANCE TICKET" shall have the meaning set forth
in the Lease Agreement.
"PERMITTED ESCROW AGENT" shall mean any one or more of the
following banks: Ameritrust Company, N.A., Bank One Cleveland N.A., Central
Trust Co., The Fifth Third Bank, Huntington National Bank, National City Bank,
Society National Bank or the Bank.
"PERMITTED INVESTMENTS" shall mean (i) Government Securities,
(ii) any investment permitted by the documents for the Bonds, and (iii)
investment agreements with a banking corporation that has (or its parent
corporation has) an unsecured, uninsured and unguaranteed obligation rated in at
least the second highest rating category of either Moody's Investors Services
Inc. or Standard & Poor's Corporation (without regard to increments or
intermediate ratings, e.g., pluses or minuses).
"PERSON" shall mean an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or any other entity, the United States, or a federal,
state or political subdivision thereof or any agency or court of such state or
subdivision.
"PREMIUM SEATING" shall mean all Private Suites and Club
Seats including the Prepaid Premium Seating.
"PREMIUM SEATING DEPOSITARY" shall have the meaning set forth
in Section 6.2 hereof.
"PREMIUM SEATING DEBT SERVICE CONTRIBUTIONS" shall mean the
lesser of: (a) the sum of (i) the proceeds for any Term Year from the sale of a
number of Private Suites, said number being seventy-six (76) minus the number of
Prepaid Private Suites, and (ii) all of the proceeds of the sale of Club Seats
(other than Prepaid Club Seats), in both cases applicable to such Term Year and
exclusive of security deposits, (b) the Net Debt Service on the Stadium Revenue
Bonds due and payable during such Term Year, or (c) $2,950,000.
"PREMIUM SEATING LICENSE" shall mean a license agreement, in
form and substance acceptable to the Bank and the Operator (or any permitted
assignee thereof), pursuant to which the Operator shall license to Persons the
right to use certain of the Premium Seating described therein upon the terms and
conditions set forth therein.
"PREMIUM SEATING REVENUE" shall mean all cash and other
property from time to time actually received by the Operator in respect of or in
exchange for any or all of the Premium Seating (excluding Prepaid Premium
Seating) or Premium Seating Licenses (other than Ticket Revenue related
thereto).
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"PREMIUM SEATING REVENUE ACCOUNT" shall mean an escrow account
established with a Permitted Escrow Agent into which all Premium Seating Revenue
(excluding all Prepaid Premium Seating Revenue) shall be deposited and invested
in Permitted Investments.
"PREPAID CLUB SEATS" shall mean those Club Seats licensed
pursuant to Premium Seating Licenses for terms of ten (10) Seasons which shall
provide that the license fees for such Club Seats shall be prepaid in one (1)
lump sum; PROVIDED, HOWEVER, that the actual number of Prepaid Club Seats shall
not exceed five hundred (500).
"PREPAID PREMIUM SEATING" shall mean, collectively, the
Prepaid Private Suites and the Prepaid Club Seats.
"PREPAID PREMIUM SEATING EXPENSES" shall mean any reasonable
expenses incurred by the Operator in connection with the licensing of Premium
Seating, including, but not limited to, reasonable salaries and benefits of
personnel whose functions are reasonably allocated to the licensing of Premium
Seating, out-of-pocket expenditures, commissions, fees, marketing expenses,
model suite costs and all reasonable overhead and administrative costs related
thereto; PROVIDED, HOWEVER, that Prepaid Premium Seating Expenses shall not
exceed, in the aggregate, One Million Dollars ($1,000,000), or such other amount
as may be mutually agreed upon by Gateway, the Operator and the Bank.
"PREPAID PREMIUM SEATING REVENUE" shall mean the Premium
Seating Revenue actually received by the Operator from the Prepaid Premium
Seating on or before the Completion Date MINUS Prepaid Premium Seating Expenses.
"PREPAID PREMIUM SEATING REVENUE ACCOUNT" shall mean an escrow
account established with a Permitted Escrow Agent into which all Prepaid Premium
Seating Revenue will be deposited and invested in Permitted Investments.
"PREPAID PRIVATE SUITES" shall mean those Private Suites
licensed pursuant to Premium Seating Licenses for terms of ten (10) Seasons
which shall provide that the license fees for such Private Suites shall be
prepaid in one (1) lump sum; PROVIDED, HOWEVER, that the actual number of
Prepaid Private Suites shall not exceed twenty-five (25).
"PRIVATE SUITES" shall mean the private viewing boxes to be
constructed as part of the Ballpark and designated as private suites in the
Final Plans.
"PROGRAM REQUIREMENTS" shall have the meaning set forth
in the Lease Agreement.
"PROJECT ARCHITECTS" shall mean, collectively, the Design
Architect and the Gateway Site Architect, and "PROJECT ARCHITECT"
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shall mean either the Design Architect or the Gateway Site Architect, as the
context may require.
"PROMOTER" shall have the meaning set forth in Subsection
7.4(a) hereof.
"PROMOTER AGREEMENT" shall have the meaning set forth in
Subsection 7.4(b) hereof.
"PROPERTY DAMAGE" shall mean any partial or total damage or
destruction of the Baseball Facility caused by fire or other occurrence and any
other property damage.
"REAL AND PERSONAL PROPERTY TAXES" shall have the meaning set
forth in Article XV hereof.
"REPAIR PLANS" shall have the meaning set forth in
Subsection 10.8(a) hereof.
"REPORTING PERIOD" shall mean, from and after the date of this
Agreement, each calendar quarter ending on March 31, June 30, September 30 and
December 31.
"ROUTINE MAINTENANCE" shall mean the provision of all labor
and materials which are required to (a) keep the Baseball Facility and the
Components in good order and repair which is of a routine, regular and
predictable nature, (b) keep the Baseball Facility clean and free of debris, and
(c) repair, maintain or replace Components which are installed by the Lessee or
the Operator unless such installation was performed hereunder on behalf of
Gateway in accordance with Gateway's obligations hereunder. Routine Maintenance
shall not include (i) repair or replacement required as a result of ordinary
wear and tear, unless otherwise expressly provided herein, or (ii) Capital
Repairs. Routine Maintenance shall include, but shall not be limited to, the
following:
(a) performing all preventive or routine maintenance that
is stipulated in operating manuals for the Components
as regular, periodic maintenance procedures;
(b) regular maintenance procedures for the HVAC system,
including periodic cleaning, lubricating and changing
of air filters;
(c) groundskeeping and maintenance of the surface of the
Field, including mowing, seeding, fertilizing,
marking lines, installing and removing bases and the
pitcher's mound and resodding;
(d) changing of standard, isolated light bulbs, fuses and
circuitbreakers as they burn out;
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(e) cleaning all portions of the Baseball Facility
immediately after each event (other than Gateway
Special Events unless retained by Gateway to perform
such services) held at the Baseball Facility;
(f) touch-up painting;
(g) readying the playing field each Term Year for the
upcoming Season, and
(h) the labor required to perform a Capital Repair to the
extent that such labor is performed by regular,
on-site personnel acting in accordance with the
standard duties for which on-site personnel are
regularly employed.
"SCOREBOARD ADVERTISING REVENUE" shall mean, for any Season,
any and all cash and other property received in respect of or in exchange for
advertising of any nature affixed on the Main Scoreboard or any non-fixed or
non-permanent advertising displayed on the Main Scoreboard. All receipts shall
be properly allocated to the Season to which the advertising is related and
actual bad debts shall be allocated on a pro rata basis.
"SEASON" shall mean a period of time commencing with the first
day of March in any calendar year and ending with the last home game (including
any postseason home game) played by the Team during such calendar year at the
Baseball Facility. Seasons are sometimes herein referred to by the calendar year
in which they occur (e.g. "1994 Season").
"SENIOR BONDS" shall have the meaning set forth in
Recital "B" hereof.
"SPECIAL EVENT" shall mean any event or period of use other
than an event on a Home Date including, but not limited to, concerts, shows,
trade shows, sporting events or other public exhibitions and any Gateway Special
Event.
"SPECIAL EVENT AREAS" shall mean only the playing field,
concourses, seating areas, auxiliary locker room, security and first aid rooms,
day-of-game employee lockers, general elevators, trash compactors, loading
docks, service tunnels, freight elevators, security observation booth and
outside ticket booths (exclusive of automatic ticket dispensing machinery) and
such other areas that may be designated from time to time by the Lessee.
"SPECIAL EVENT PERIOD" shall have the meaning set forth in
Subsection 7.4(a) hereof.
"SPECIAL EVENT REVENUE" shall mean, for any Term Year,
any and all cash and other property received in respect of or in
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exchange for any Special Event (other than a Gateway Special Event) including,
without limitation, all revenue generated from the sale of tickets for any such
Special Event. All receipts with respect to a Special Event shall be allocated
properly to the Term Year in which the Special Event occurs.
"STADIUM REVENUE BONDS" shall have the meaning set forth in
Recital "B" hereof.
"SUBORDINATED BONDS" shall have the meaning set forth in
Recital "B" hereof.
"SUBSTANTIAL COMPLETION" or "SUBSTANTIALLY COMPLETED" shall
have the meaning set forth in the Lease Agreement.
"TEAM" shall have the meaning set forth in Recital "A"
hereof.
"TERM" shall have the meaning set forth in Section 4.1
hereof.
"TERM YEAR" shall mean each period of twelve (12) consecutive
calendar months during the Term, with the first Term Year commencing on the
first day of the November next succeeding the Completion Date and with
successive Term Years commencing on successive anniversaries of the first day of
the first Term Year. "Term Years" means more than one (1) Term Year. A "Partial
Term Year" means if the Completion Date is a date other than November 1, then
the period from the Completion Date to the first day of the first Term Year.
Unless otherwise expressly provided for herein, all terms and conditions herein
shall apply the same to a Partial Term Year as to a Term Year; PROVIDED,
HOWEVER, that all payments and other financial obligations shall be apportioned
or prorated pursuant to Section 28.6 hereof.
"THREE PARTY AGREEMENT" shall mean that certain Agreement
Relating to Ownership, Financing, Construction and Operation of a Sports
Facility and Related Economic and Redevelopment Projects, dated as of November
7, 1990, by and among the County, the City and Gateway.
"TICKET" shall have the meaning set forth in the Lease
Agreement.
"TICKET REVENUE" shall have the meaning set forth in the
Lease Agreement.
1.2 ACCOUNTING TERMS. Any accounting term used in this
Agreement shall have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with GAAP, and all financial computations
hereunder shall be computed, unless otherwise specifically provided herein, in
accordance with GAAP as consistently applied.
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ARTICLE II
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CONSTRUCTION
2.1 OPERATOR'S INVOLVEMENT IN DESIGN. The Operator shall have
the same rights and obligations with respect to the design of the Gateway's Work
as the Lessee has under the Lease Agreement.
2.2 GATEWAY'S CONSTRUCTION OBLIGATIONS. The Operator shall
have no responsibility to provide or pay for any part of the construction,
furnishing or the equipping of Gateway's Work. Gateway's Work shall be completed
in accordance with Article IV hereof and the terms and conditions set forth in
the Lease Agreement. Gateway's obligations with respect to the Operator's Space
shall include supplying of all furniture, equipment and other personal property
included in the Program Requirements. Gateway shall give the Operator reasonable
access to the Operator's Space prior to the Completion Date, to enable the
Operator to move in personal property and arrange the Operator's Space for the
Operator's use.
2.3 CONCESSIONAIRE PARTICIPATION. In the event the Operator
hires a concessionaire to handle concessions at the Baseball Facility (the
"Concessionaire"), the Concessionaire shall have the right to participate in the
design and construction of the concession areas to the extent neither the Lessee
nor the Operator has previously approved the design pursuant to Article IV of
the Lease Agreement or pursuant hereto, as the case may be.
ARTICLE III
-----------
MANAGEMENT AND OPERATION BY THE OPERATOR
3.1 GRANT OF MANAGEMENT AND OPERATION RIGHTS. For and in
consideration of the Fees and the agreements and covenants contained in this
Agreement and subject to, in all respects, the Lease Agreement, the Ground Lease
and the Gateway CAM Agreement, including, but not limited to, the Lessee's
rights to conduct Lessee's baseball games and related activities at the Baseball
Facility, Gateway hereby grants to the Operator the sole and exclusive right and
obligation to manage and operate the Baseball Facility and to market and license
all Premium Seating in accordance with the terms of this Agreement and the
Operator hereby agrees that it shall be obligated to manage and operate the
Baseball Facility and to market and license all Premium Seating during the Term
in accordance with the terms of this Agreement. Gateway will cooperate with and
support all efforts in licensing the Premium Seating. The Operator shall operate
and manage the Baseball Facility as a first-class, state-of-the-art, open-air
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Major League baseball park and in a professional, businesslike and efficient
manner, including, but not limited to, concessions. Subject only to the
requirement to pay the Fees, the Operator shall be entitled to receive all
Ballpark Revenues (other than Lessee's Parking Revenue which shall be paid to
Lessee) and shall be obligated to pay all Ballpark Expenses.
3.2 PERSONNEL. The Operator shall have the sole and exclusive
right and obligation to hire, discharge, promote and supervise all personnel
necessary for the operation and management of the Baseball Facility and to
otherwise perform the Operator's duties hereunder. Such personnel shall not be
considered Gateway's employees. The Operator shall be responsible for the direct
remuneration of such personnel. Such personnel may include, but shall not be
limited to, gatemen, cashiers, ticket takers, ticket sellers, ushers, toilet
attendants, scoreboard operators, electricians, first-aid attendants,
groundskeepers and grounds crew, and maintenance personnel. The cost of all such
personnel (including, without limitation, reasonable salaries, fringe benefits
and bonuses) shall be considered a Ballpark Expense. Subject to the provisions
of Section 7.4 hereof, the Operator shall make available, at Gateway's expense,
for each Gateway Special Event, the required complement of its regular
personnel, including, as needed, but not limited to, gatemen, cashiers, ticket
takers, ticket sellers, ushers, toilet attendants, scoreboard operators,
electricians, first-aid attendants, groundskeepers and grounds crew,
concessionaires, vendors, maintenance personnel and supervisors.
3.3 SUPPLIES. Except as otherwise specifically set forth
herein, the Operator shall provide, or cause to be provided at its expense, all
supplies necessary to perform its duties hereunder; PROVIDED, HOWEVER, that (a)
the Concessionaire, if any, may provide all supplies used by such Concessionaire
and (b) the Lessee shall provide all supplies used by the Lessee for training
and conditioning its athletes, conducting its business, and maintaining (and
cleaning) the Lessee's Office Space.
3.4 CONTRACTS. The Operator shall have the right to enter into
lawful contracts with any Persons relating to any of the duties and obligations
to be performed by the Operator hereunder upon terms and conditions deemed
acceptable by the Operator and the Lessee, including with affiliated Persons,
provided that no such Contract shall impose any contractual liability on Gateway
or the Lessee. All contracts with affiliated Persons shall be on terms and
conditions comparable to similar contracts available from unrelated third
Persons. Operator shall cause all such contracts to be either assignable to or
terminable by any subsequent operator of the Baseball Facility, unless otherwise
approved in writing by Gateway, which approval shall not be unreasonably
withheld.
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3.5 EXCUSE. Unless otherwise specified herein, the Operator
shall be excused from its obligation to manage and operate the Baseball Facility
as a first-class, state-of-the-art open-air Major League baseball park and in a
professional, businesslike and efficient manner to the extent that the Operator
shall be prevented from compliance with such standard by any (a) Force Majeure,
(b) Gateway Default, or (c) the termination of this Agreement.
ARTICLE IV
----------
TERM
4.1 TERM. The "Term" of this Agreement shall commence on the
Completion Date and shall end on the earlier of (i) December 31 of the year in
which the twentieth (20th) full Season following the Completion Date is
concluded, or (ii) upon the retirement, defeasance or discharge (as provided in
the Three Party Agreement) of all of the Bonds. Upon determination of the
Completion Date, the parties shall execute a supplement to this Agreement
setting forth the last day of the Term. Subject to Section 3.5 hereof, the
Operator shall be obligated to perform its duties with respect to the marketing
and licensing of Premium Seating as set forth herein commencing on the date
hereof and continuing until this Agreement is terminated (whether by lapse of
time or otherwise).
4.2 COMPLETION. Gateway hereby agrees that it will use its
best efforts to cause the Completion Date to occur on or before February 1,
1994. On or before September 1, 1993, the Operator and Gateway shall consult
with the Project Architects and contractors and make a physical inspection of
the state of the completion of the construction of Improvements. Promptly
thereafter, the parties hereto shall make a determination as to whether or not
the Completion Date will occur on or before February 1, 1994. In making such
determination, the parties shall take into account the implementation of any
reasonable construction procedures and programs suggested by the Operator which
would tend to expedite the completion of Gateway's Work. If the Operator and
Gateway mutually determine that, or are unable to agree that, the Completion
Date will not occur on or before February 1, 1994, or the Completion Date has
not actually occurred by February 1, 1994, the Operator shall have no obligation
to perform its duties hereunder at the Baseball Facility during the 1994 Season
and a "Completion Default" shall be deemed to have occurred. In the event such a
determination is made or Gateway and the Operator are unable to agree, or
Substantial Completion has not occurred by February 1, 1994, Gateway shall have
until February 1, 1995, to cause Substantial Completion of Gateway's Work to
occur. If Substantial Completion of Gateway's Work occurs on or before February
1, 1995, such date shall be deemed the Completion Date, and the Operator shall
be obligated to perform its duties hereunder at the Baseball Facility commencing
on the first day of the 1995 Season. If Substantial Completion has not occurred
on or before February 1,
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1995, an additional "Completion Default" shall be deemed to have occurred.
Gateway shall make all necessary arrangements to permit, at Operator's election,
Operator to have partial occupancy of the Baseball Facility as phases of
Gateway's Work are completed.
4.3 LATE COMPLETION REMEDIES.
(a) Unless Lessee shall have terminated the Lease Agreement
pursuant to Section 5.3 of the Lease Agreement and otherwise subject only to
Subsections 4.3(b) and (c) below, if the Completion Date has not occurred by (i)
February 1, 1994, a "Completion Default" shall be deemed to have occurred and
Gateway shall be liable to the Operator for the Operator's damages due to such
Completion Default, and (ii) February 1, 1995, an additional "Completion
Default" shall be deemed to have occurred and Gateway shall also be liable to
the Operator for any additional damages due to such subsequent Completion
Default. The amount of any such damages shall be reduced to the extent that the
Operator's negligence contributed to such Completion Default.
(b) Notwithstanding anything contained in this Agreement to
the contrary, in the event that Gateway's failure to accomplish Substantial
Completion by February 1, 1994, or February 1, 1995, as the case may be, results
from (i) an Operator Default or a Lessee Default, (ii) the gross negligence or
willful misconduct of the Operator or the Lessee or (iii) the institution by the
Operator or the Lessee of any litigation or other proceeding against Gateway
wherein the court shall determine that the Operator's or the Lessee's, as the
case may be, position was frivolous and without merit, such date shall be
extended to February 1, 1995, or such later date as is necessary to accomplish
Substantial Completion. In such event, the Operator shall be obligated to
perform its duties hereunder at the Baseball Facility commencing on such
extended Completion Date, regardless of when such date occurs, and the Operator
shall pay any increase in the cost of the construction of the Improvements
resulting directly from such delay. If Substantial Completion is delayed as a
result of any of the foregoing causes, no Completion Default shall be deemed to
have occurred unless Substantial Completion has not occurred by the extended
Completion Date.
(c) Notwithstanding anything contained in this Agreement to
the contrary, in the event that any Force Majeure prevents or delays the
completion of the Improvements, all provisions of this Article IV shall
nevertheless apply in accordance with their terms, except that in the case of
any delay resulting from a Force Majeure, Gateway will be excused from payment
of damages otherwise payable under Subsection 4.3(a), so long as Substantial
Completion occurs on or before a date following the February 1, 1994, or
February 1, 1995, date, which is not later than the number of days after said
February 1, 1994, or February 1, 1995, date, equal to the number of days of the
impact of such Force Majeure.
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(d) Subject to Subsections 4.3(b) and (c) above, if
Substantial Completion has not occurred by February 1, 1995, the Operator, by
written notice to Gateway delivered not later than February 28, 1995, may either
(i) extend such date or (ii) terminate this Agreement. If the Operator elects to
terminate this Agreement, each of the parties shall remain liable to the other
for any obligation or liability arising prior to the effective date of
termination and as may be further provided for herein.
4.4 EXTENSION OPTIONS. The Operator and Gateway hereby
acknowledge that, as a matter of federal tax law, Gateway cannot grant option
rights to the Operator to extend the Term of this Agreement. In the event an
opinion from Calfee, Halter & Griswold, or such other nationally recognized bond
counsel selected by Calfee, Halter & Griswold and Gateway, is obtained to the
effect that the existence and exercise of options to renew the Term of this
Agreement will not result in a loss of the federal tax exempt status of any of
the Bonds, then Gateway and the Operator hereby agree to amend this Agreement to
provide for options to renew on terms that (a) are commercially reasonable based
upon comparable agreements that are competitively favorable to other Persons
then managing publicly owned ballpark facilities, and (b) do not cause the
Operator's use and control of the Baseball Facility to be less extensive than
its use and control during the Term. Gateway hereby agrees to lend its full
support and cooperation to any effort to effectuate a change in the federal tax
law that is necessary to obtain the legal opinion referred to above.
ARTICLE V
---------
FEES TO GATEWAY
5.1 PAYMENT OF FEES. The Operator shall pay to Gateway each
Term Year, as a fee (the "Fees") an amount equal to (a) Gateway's Scoreboard
Advertising Share, PLUS (b) twenty-five percent (25%) of Net Special Event
Revenue. The Fees shall be payable on or before December 15 following the end of
each Term Year for which such Fees are due and shall be payable by Operator only
to the extent the revenue relating to such Fees is actually received by the
Operator during the Term Year in question.
5.2 AUDIT. Payments of Fees shall be accompanied by a
statement certified as true and correct by the Operator's Chief Financial
Officer showing with reasonable specificity all computations relating thereto.
Gateway shall have the right, through the use of an independent certified public
accounting firm selected by Gateway, at any time during normal business hours
and at the offices of the Operator, to review, at Gateway's expense, all books
and records of the Operator which relate solely to computations of Prepaid
Premium Seating Revenue, Net Scoreboard Advertising Revenue, and Net Special
Event Revenue for a period of ninety (90) days after delivery by the Chief
Financial Officer of
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the Operator to Gateway of the certificate on which such computation is based.
In the event such review results in a determination that the computations are
erroneous, the error shall be promptly corrected by the parties, and if such
error results in a three and one-half percent (3.5%) or more discrepancy in the
favor of Gateway in Prepaid Premium Seating Revenue and Fees the expense of such
review shall be reimbursed to Gateway by the Operator.
ARTICLE VI
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PREMIUM SEATING REVENUE ACCOUNT
6.1 PREMIUM SEATING REVENUE ACCOUNT. The Operator agrees and
covenants that (i) all Prepaid Premium Seating Revenue shall be deposited into
the Prepaid Premium Seating Revenue Account; and (ii) all Premium Seating
Revenue (other than Prepaid Premium Seating Revenue) shall be deposited in the
Premium Seating Revenue Account, and the foregoing obligations shall not be
subject to the Operator's right of setoff as set forth in Section 18.4 hereof.
In addition, in the event the Operator collects any security deposits for
Premium Seating and adequate assurances and security, satisfactory to the
Operator and the Lessee, are provided by Gateway to guarantee the return of such
security deposits, the Operator will also deposit such security deposits in the
Prepaid Premium Seating Revenue Account. The Operator shall establish with a
Permitted Escrow Agent selected by the Operator and approved by the Bank (the
"Premium Seating Depositary") the Premium Seating Revenue Account in the joint
names of the Operator and Gateway. The Operator also shall establish with the
Premium Seating Depositary the Prepaid Premium Seating Revenue Account in the
joint names of Gateway and the Operator. The Premium Seating Depositary shall be
a Permitted Escrow Agent. All deposits in the Prepaid Premium Seating Revenue
Account and the Premium Seating Revenue Account shall be invested in Permitted
Investments and shall accumulate until applied as set forth in Section 6.2
hereof.
6.2 APPLICATION OF FUNDS.
(a) On or after the Completion Date, the Premium Seating
Depositary shall distribute to Gateway Prepaid Premium Seating Revenue an amount
equal to the greater of (a) Twenty Million Dollars ($20,000,000), or (b) ten
(10) times the weighted mean listed annual sale price for Club Seats, multiplied
by the actual number of Prepaid Club Seats sold on or before the Completion Date
plus ten (10) times the weighted mean listed annual sale price for Private
Suites (excluding, for purposes of computing this weighted mean, any Private
Suite with a listed annual sale price of less than $30,000) multiplied by the
actual number of Prepaid Private Suites sold on or before the Completion Date
plus the proportionate share of investment income earned thereon. Thereafter,
the Premium Seating Depositary shall deposit any remaining Prepaid Premium
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Seating Revenue and investment income into the Premium Seating Revenue Account
in Subsection 6.2(b) hereof. Any amounts distributable to Gateway in this
Subsection 6.2(a) shall either be deposited directly into the Completion
Guaranty Accounts for the purposes described in Section 4.9 of the Lease
Agreement or used by the Premium Seating Depositary to make any debt service
payments on any Financing Arrangement of which the proceeds were used or will be
used for the completion of Gateway's Work.
(b) The Premium Seating Debt Service Contribution for such
Term Year shall be used to reimburse the Bank for payments made with respect to
the Stadium Revenue Bonds. Upon the written request of Gateway, the Premium
Seating Depositary shall distribute such funds to the appropriate Person for
deposit into the appropriate account for this purpose.
(c) In addition to the rights of withdrawal provided for in
(a) and (b) above, Gateway shall be entitled to make additional withdrawals from
the Premium Seating Revenue Account, and the Operator shall make corresponding
additional deposits to the Premium Seating Revenue Account solely from Ballpark
Revenues not otherwise needed to pay Ballpark Expenses so as to avoid an
Operating Deficit, for the sole purpose and only to the extent required after
using all other revenue available to Gateway, from whatever source, after
payment of Gateway's reasonable administrative expenses, to allow Gateway to
prevent a debt service payment default on the Stadium Revenue Bonds.
(d) Except for the permitted withdrawals as provided above in
this Section 6.2, all funds remaining in the Premium Seating Revenue Account
shall be paid by the Premium Seating Depositary to the Operator. The Operator
shall be permitted to withdraw funds from the Premium Seating Revenue Account,
upon written request to the Premium Seating Depositary, provided (i) there
remains on deposit in the Premium Seating Revenue Account funds equal to the
estimated Premium Seating Debt Service Contribution anticipated to be required
for the remainder of the Term Year then in affect; and (ii) there shall not then
be a debt service payment default on the Stadium Revenue Bonds. In the event the
Operator and Gateway are unable to agree on the estimated Premium Seating Debt
Service Contribution for any Term Year, then the Premium Seating Debt Service
Contribution for the immediately preceding Term Year shall be used for such
estimate.
ARTICLE VII
-----------
USE OF BASEBALL FACILITY; SPECIAL EVENTS
7.1 OPERATOR'S USE. During the Term, the Operator and its
guests, invitees and concessionaires shall be entitled to the possession and use
of the Baseball Facility for the following purposes:
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(a) to conduct and perform all necessary activities in
connection with its rights and duties hereunder;
(b) the operation of any club/restaurant facilities and
the Lessee's private dining facilities as described
in the Program Requirements;
(c) to occupy and conduct day-to-day business operations
in the Operator's Space;
(d) the sale of food and alcoholic and nonalcoholic
beverages, souvenirs and other items normally
considered "concessions" by Major League baseball
organizations;
(e) the sale of space on or for advertising signs and
billboards of all kinds located on the Baseball
Facility; or
(f) to conduct any Special Event and participate in the
conducting of any Gateway Special Event as
contemplated by Section 7.4 hereof.
PROVIDED, HOWEVER, that the Operator shall not occupy or use any portion of the
Baseball Facility (or permit the use or occupancy of any portion of the Baseball
Facility) for (i) the staging of any activity that is detrimental to (A) the
health, safety and welfare of the people at the Baseball Facility or (B) the
physical plant of the Baseball Facility, or (ii) any purpose that will violate
any federal, state or local law or that will in any way affect the validity or
tax exempt status of the Bonds.
7.2 GATEWAY'S USE. During the Term, Gateway and its guests and
invitees shall be entitled to the possession and use of the Baseball Facility to
conduct and perform all activities in connection with its rights and duties
hereunder and for the purposes otherwise set forth in the Lease Agreement and
the Ground Lease.
7.3 LESSEE'S USE. During the term of the Lease Agreement, the
Lessee and its guests and invitees shall be entitled to the possession and use
of the Baseball Facility to conduct and perform all necessary activities in
connection with its rights and duties hereunder and under the Lease Agreement
and the Ground Lease.
7.4 SPECIAL EVENTS. Subject to the terms and conditions of the
Lease and the Ground Lease, the Operator shall have the exclusive right to
promote, sponsor and control all Special Events (other than Gateway Special
Events) at the Baseball Facility. Subject to the Operator's obligation to pay
Fees pursuant to Section 5.1 hereof, the Operator shall be entitled to receive
all Special Event Revenue. Gateway may request to conduct Gateway
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Special Events in the Special Event Areas by complying with the following
procedure:
(a) Gateway may notify the Operator at any time not less than
forty-five (45) days prior to the date thereof that it desires to schedule a
Gateway Special Event on a particular date or dates and concurrently therewith
shall notify the Operator as to the name of the sponsoring organization, if any
(the "Promoter"), the nature of the Gateway Special Event, the facilities
required for such Gateway Special Event and the time before and after such dates
which will be required for setting up and removing all equipment and other
facilities required for such Gateway Special Event (the entire period so
required is hereinafter referred to as the "Gateway Special Event Period"). In
no event may all or any part of a Gateway Special Event Period coincide with all
or any part of an Exclusive Use Period or any period for a Special Event
previously scheduled for the Baseball Facility by the Operator or the Lessee.
The Operator shall notify Gateway within ten (10) Business Days after any
request for a Gateway Special Event if the Gateway Special Event Period would
violate the foregoing provision. Unless Gateway has previously been notified
that the requested Gateway Special Event coincides with all or any part of an
Exclusive Use Period or a Special Event previously scheduled by the Operator or
the Lessee, failure by the Operator to give such notice may be relied on by
Gateway as confirming that no such violation would occur. In no event shall the
Operator be obligated to consider a request by Gateway for a Gateway Special
Event more than one (1) year in advance of the Gateway Special Event Period for
such Gateway Special Event.
(b) Upon receipt of the foregoing notice, Gateway, the
Operator and the Promoter, if any, shall enter into an agreement, in the form
mutually approved by the Operator and Gateway (the "Promoter Agreement").
Gateway agrees that Gateway will be responsible for the obligations of the
Promoter, unless, after being requested by Gateway, the Operator elects, in its
sole discretion, to act as the Promoter for such event. In the event of any
inconsistency between the provisions of any arrangement with a Promoter (or
Gateway or the Operator if there is no Promoter) and this Agreement, the
provisions of this Agreement shall control. In addition, the following
arrangements shall be required in connection with any Special Event, unless
Gateway, the Operator and the Lessee agree otherwise:
(i) For any Gateway Special Event, Gateway or the Promoter, if
any, shall be required to hire the Operator's personnel or independent
contractors normally servicing the Baseball Facility in accordance with
the terms hereof, including, but not limited to, security and crowd
control supervision personnel, concessions personnel, cleaning
personnel, Premium Seating personnel and to the extent applicable,
scoreboard operations personnel. Gateway's, the Operator's or the
Promoter's personnel or designees, as
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applicable, may be employed to perform setup and removal of Gateway
Special Event items and equipment. All of the Operator's expenses
related to any Gateway Special Event shall be reimbursed to the
Operator by Gateway or the Promoter;
(ii) All concession and advertising arrangements entered into by
the Operator in connection with its rights and duties hereunder, and
all other duties of the Operator hereunder with respect to the
operation and management of the Baseball Facility and all rights and
privileges of the licensees of Premium Seating, under the terms and
conditions of their respective Premium Seating Licenses (provided that
all such Premium Seating holders entering the Baseball Facility shall
purchase admission tickets at a price not to exceed the highest price
ticket being sold to the general public) shall be honored and performed
during any Gateway Special Event. Other than revenue generated by
ticket sales for Gateway Special Events, all Premium Seating Revenue
generated from Gateway Special Events shall be deposited into and
released from the Premium Seating Revenue Account in accordance with
the terms of Article VI hereof. The Operator shall arrange for its
concessionaires to provide concessions for Gateway Special Events,
consistent with the anticipated attendance at such Gateway Special
Events;
(iii) The Operator may, but shall not be obligated to, furnish the
use of any club/restaurant facility or private dining facility, or any
other area of the Baseball Facility not constituting a Special Event
Area, for any Special Event; and
(iv) The Lessee shall have the right to prohibit any Special Event
at the Baseball Facility if the nature of such Special Event would
render the playing field unsuitable in the Lessee's reasonable judgment
for playing the Team's games thereon (the parties acknowledge that
Special Events during the Spring season may not be allowed in order to
protect Spring turf growth and field conditions). The Lessee may
require that a protective covering of Trivera Spunbond (or other
material approved by the Lessee), which shall be paid for by Gateway,
be maintained over the playing field.
ARTICLE VIII
------------
INSURANCE AND SUBROGATION
8.1 GATEWAY'S INSURANCE. (a) Gateway shall, during the
construction period, maintain in full force and effect, at Gateway's expense:
(i) insurance against damage or destruction to the Improvements for the full
value thereof, including all materials, equipment, machinery and supplies for
use in construction or installation of Gateway's Work on an "all risk"
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peril basis, including coverage against flood, sewer backup and earthquake
coverage, in the form of builder's risk coverage, and (ii) cause its
professionals to maintain professional liability insurance providing coverage
for errors and omissions relating to workmanship and design.
(b) From and after the Completion Date, Gateway shall maintain
in full force and effect, in its name, insurance against damage or destruction
to the Baseball Facility and Gateway's equipment and other personal property,
improvements and betterments to the Baseball Facility owned by Gateway by
providing "all risk" peril coverage in the amount of at least ninety percent
(90%) of replacement cost, subject to deductible limits not to exceed $25,000.
Such insurance shall have an agreed amount endorsement. The Operator may elect
to place, and pay directly to such insurance provider the premium for, the
insurance required by this Subsection 8.1(b) (except for any of the premiums
related to Gateway's election not to make a Capital Repair as set forth in the
definition of Capital Repairs). In the event the Operator does not elect to
place such insurance, the Operator shall reimburse Gateway for the cost of such
postconstruction property insurance. All of the foregoing insurance shall name
as additional insureds the Operator and the Lessee and such other Affiliates as
the Operator shall request to the extent of their insurable interest.
8.2 OPERATOR'S INSURANCE. The Operator shall, from and after
the Completion Date, maintain in full force and effect (or cause to be
maintained in force by the Operator's subcontractors, concessionaires or
permitted subtenants), at its expense, the following insurance:
(a) statutory workers' compensation coverage through the
State of Ohio, and Ohio Stop Gap liability coverage
in the amount of $1,000,000 per occurrence, or such
lesser amount as may satisfy carriers of the
Operator's umbrella or excess liability coverage;
(b) automobile liability coverage for bodily injury and
property damage with a combined single limit per
accident of $1,000,000;
(c) "occurrence type" general liability insurance
against bodily injury and property damage arising
from occurrences in and about the Baseball Facility
and covering the Operator's contractual liability
for indemnification under this Agreement. Such
insurance shall be written on a commercial general
liability policy form to include premises
operations, products and completed operations,
personal injury/advertising injury, independent
contractors and broad form property damage. The
policy shall also contain a general aggregate per
location of not less than $2,000,000 and a general
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occurrence and a products/completed operations
aggregate of not less than $1,000,000;
(d) umbrella or excess liability coverage (in form no
less broad than underlying coverage) to apply excess
of automobile, liquor, general, contractual and
employer's liability limits, in an amount necessary
to increase overall coverage to $50,000,000 per
occurrence; provided, however, that such required
coverage shall be $10,000,000 for any concessionaire
and $20,000,000 for any other subcontractor; and
(e) "occurrence form" (as opposed to "claims made form")
liquor liability insurance in the amount of
$1,000,000 per occurrence.
The insurance provided for in Subsections (b), (c), (d) and (e) above shall name
as additional insured Gateway, its members, its Executive Director and such
other Affiliates as Gateway shall reasonably request and the Lessee and such
other Affiliates as the Lessee shall request. In addition, the Operator shall
obtain a "Primary and Non-Contribution" endorsement on the policies for the
insurance referred to in Subsections (b), (c), (d) and (e) above, if available
at no additional cost.
8.3 INSURANCE REQUIREMENTS.
(a) All policies of insurance required hereunder shall be
written by carriers which are members of the Ohio Guaranty Fund and possess an
A- policyholder's rating or better and a minimum Class VII financial size
category as listed at the time of issuance by A.M. BEST INSURANCE REPORTS ("Best
Reports") (the aforesaid rating classifications to be adjusted if and to the
extent that BEST REPORTS adjusts its rating categories).
(b) All policies shall provide that they may not be canceled,
renewed or reduced unless at least thirty (30) days' notice thereof has been
provided to the additional insureds. In no event shall any party be required to
insure for liability limits in excess of coverage which is available at
commercially reasonable rates. In the event that tort liability reform is
adopted which makes the limits of liability hereinabove provided in excess of
commercially reasonable and prudent limits of liability, such limits will be
equitably reduced. The insurance policies required hereunder shall be reviewed
on an annual basis to determine the adequacy of the coverage amounts.
8.4 CERTIFICATES. Not later than the date on which coverage is
to be provided hereunder, the party required to provide same shall furnish to
the other party a certificate evidencing the required coverage.
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8.5 WAIVER OF SUBROGATION. Gateway and the Operator agree that
all insurance policies against loss or damage to property and business
interruption or rent/revenue loss, and all liability insurance policies required
hereunder shall be endorsed to provide that any release from liability of, or
waiver of claim for, recovery from the other party entered into in writing by
the insured thereunder prior to any loss or damage shall not affect the validity
of said policy or the right of the insured to recover thereunder. Such insurance
policies shall further provide that the insurer waives all rights of subrogation
which such insurer might have against the other party. Without limiting any
release or waiver of liability or recovery contained in any other section of
this Agreement, but rather in confirmation and furtherance thereof, each of the
parties hereto waives all claims for recovery from the other party for any loss
or damage to any of its property or damages as a result of business
interruption, rent loss or liability of the types covered in Subsections 8.2
(b), (c), (d) and (e) above, insured under valid and collectible insurance
policies to the extent of any recovery collectible under such insurance
policies.
ARTICLE IX
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ALTERATIONS BY THE OPERATOR
9.1 ALTERATIONS AND ADDITIONS BY THE OPERATOR.
(a) Following the Completion Date, the Operator, at its sole
cost and expense, with the prior written consent of the Lessee, may make any
alterations of or additions or improvements to the Baseball Facility, subject to
the rights of the Lessee under the Lease Agreement and the Ground Lease, which
do not (i) materially affect the aesthetics, sight lines, structure or systems
of the Baseball Facility (unless approved by Gateway and the Lessee), (ii)
materially increase the cost of Capital Repairs to the Baseball Facility or any
of its Components, fixtures, equipment or any other improvements (unless
approved by Gateway and the Lessee), or (iii) violate any laws, ordinances, or
regulations. The Operator hereby agrees to perform or cause to be performed all
such alterations, additions and/or improvements in a good and workmanlike
manner, utilizing personnel with proper building trade credentials, and to pay
for the same. The Operator agrees to indemnify and defend Gateway from and
against mechanics' liens, claims and any other costs and attorneys' fees
incurred by Gateway and related thereto, or other costs and expenses arising out
of such performance.
(b) Before commencing any alterations, additions, or
improvements pursuant to Subsection 9.1 (a) above, the Operator shall (i) comply
with all legal requirements or improvements, including, but not limited to,
procuring any required governmental permits, and (ii) obtain and furnish to
Gateway a "Builder's Risk"
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insurance policy, from an insurance carrier acceptable to Gateway and in form
and substance acceptable to Gateway, in its reasonable discretion, covering all
liabilities that may be incurred in connection with any such alterations,
additions or improvements undertaken by the Operator, naming Gateway as an
additional insured.
(c) All alterations, additions or improvements made by the
Operator pursuant to this Section 9.1 shall be considered the property of the
Operator for purposes of this Agreement and shall remain upon the premises for
the duration of the Term; PROVIDED, HOWEVER, that upon the termination or
expiration of this Agreement for any reason, such alterations, additions and
improvements, unless personal property or trade fixtures, shall become part of
the Baseball Facility.
9.2 PLACEMENT OF HEAVY EQUIPMENT. The Operator shall not place
a load upon any floor or other surface in any part of the Baseball Facility that
exceeds the maximum weight per square foot that such floor or other surface area
was designed to bear as determined by the Design Architect. The Operator and any
concessionaire shall comply with all such requirements and, where necessary,
shall perform the reinforcing required for such installation at its cost and
expense. The Operator shall install, place and maintain all items of personal
property, fixtures or improvements which the Operator is required to install,
place or maintain in the Baseball Facility pursuant to this Agreement, in
settings that are sufficient, as determined by the Design Architect, to absorb
and prevent vibration in or damage to the Baseball Facility. In the event such
placements or installations cause such vibration or damage, the Operator shall,
at its expense, take such steps as the Design Architect may reasonably direct to
remedy any such condition.
ARTICLE X
---------
MAINTENANCE OF AND REPAIRS TO THE BASEBALL FACILITY
10.1 ALLOCATION OF RESPONSIBILITIES. It is the purpose of this
Article to allocate the responsibilities between the Operator and Gateway for
the cost of making repairs, restorations, and replacements of and to the
Baseball Facility which are necessary during the Term. The general overriding
principle of such allocation is (but subject in all events to specific
provisions hereof) that the Operator is to be responsible for the costs of
performing Routine Maintenance, and Gateway is to be responsible for the costs
of all Capital Repairs.
10.2 OPERATOR'S ROUTINE MAINTENANCE OBLIGATIONS. Gateway
hereby assigns to the Operator the rights and the Operator hereby
assumes the obligations to perform Routine Maintenance of the
Baseball Facility. The Operator shall be responsible for the
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performance of and payment of all costs and expenses related to all
Routine Maintenance.
10.3 MAINTENANCE AND REPAIR PROCEDURES.
(a) On or before February 1 of each Term Year, and from time
to time during the Term as the Operator, the Lessee or Gateway may reasonably
request, not more often than once each Reporting Period, representatives of the
Operator, the Lessee and Gateway shall meet to:
(i) review a list of, and the proposed
procedures for completing, any anticipated
work constituting Routine Maintenance and
Capital Repairs (which list shall be
prepared by the Operator and delivered to
the Lessee and Gateway prior to any such
meeting);
(ii) allocate any such anticipated work between
Routine Maintenance and Capital Repairs;
(iii) establish budgets and timetables for
required Routine Maintenance and Capital
Repairs; and
(iv) establish necessary programs to generally
effectuate the administration of the
provisions of this Article X.
(b) Gateway hereby agrees that Gateway shall use its best
efforts to advise the Operator and the Lessee of its views as early as possible
regarding Gateway's performance of Capital Repairs. All Capital Repairs
requested by the Lessee and the Operator shall be conducted and completed,
subject to the reasonable and prompt approval of Gateway.
10.4 CAPITAL REPAIRS FUND. Gateway shall establish and
maintain an account (the "Capital Repairs Fund"), the purpose of which shall be
to accumulate funds for the payment of the cost of Capital Repairs for which
Gateway is financially responsible hereunder. The Capital Repairs Fund shall be
established with a Permitted Escrow Agent and the funds therein invested in
Permitted Investments. On or before the Completion Date, Gateway shall deposit
into the Capital Repairs Fund the Initial Capital Repairs Fund Deposit. In
addition, on or before the first day of each and every Term Year after the first
Term Year, Gateway shall deposit the Annual Capital Repairs Fund Deposit into
the Capital Repairs Fund. All funds in the Capital Repairs Fund shall be the
property of Gateway. The Capital Repairs Fund may be drawn only upon the
signature of the designated signatory or signatories of Gateway and the funds
deposited therein may be used only to pay for Capital Repairs for which Gateway
is financially responsible hereunder, other than those arising out of damage
which is caused by a risk then covered by the property insurance policy referred
to in
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Subsection 8.1(b) (except that the Capital Repairs Fund may be used for covered
losses pending receipt of insurance proceeds, such proceeds shall thereafter be
deposited in the Capital Repairs Fund). Notwithstanding anything in this
Agreement to the contrary, Gateway's financial responsibility with respect to
Capital Repairs shall not be limited to the funds in the Capital Repairs Fund;
provided, however, that on or before the Completion Date, the parties will
establish a separate sub-account within the Capital Repairs Fund for the
following categories of property: administrative office furniture (FF&E), all
kitchen equipment, concession stand/central commissary equipment, clubhouse
exercise equipment, club and restaurant furniture and equipment, and such other
categories of property that the parties shall mutually agree upon. The parties
agree that reasonable and appropriate percentages will be established based on
the useful life of such property and a proportional amount of the Initial
Capital Repairs Fund Deposit and the Annual Capital Repairs Fund Deposit will be
placed into such sub-account. Gateway's obligation to pay for Capital Repairs
for the above designated property shall be limited to the amount of the special
sub-account for such items. In the event Gateway must use any funds deposited in
the Construction Fund (established in accordance with the Bond documents), to
pay for any Capital Repair, in whole or in part, Gateway shall withdraw the
amount necessary from such Construction Fund and pay for such Capital Repair
with the funds withdrawn; PROVIDED, HOWEVER, that in no event shall any funds
withdrawn from the Construction Fund be used by Gateway to pay for any Capital
Repairs performed on the Field or the Field Improvements; and PROVIDED, FURTHER,
that in no event shall any funds withdrawn from the Construction Fund by Gateway
be deposited into the Capital Repairs Fund. In the event funds on deposit in the
Capital Repairs Fund are insufficient to pay for the cost of a Capital Repair at
any time, Gateway shall be obligated to pay for such Capital Repair using other
sources and shall be reimbursed from the Capital Repairs Fund for the amount so
paid from the next moneys deposited therein until Gateway shall have been fully
reimbursed. At the end of the Term or upon the termination of this Agreement,
Gateway shall transfer and assign to the Person or Persons that succeed Gateway
in the ownership of the Baseball Facility all sums in the Capital Repairs Fund
and all of such funds shall continue to be held in a separate escrow account for
the benefit of the Baseball Facility.
10.5 OPERATOR CAPITAL REPAIRS. During the Term, the Operator
shall keep and maintain the Baseball Facility in good condition, and shall not,
subject to ordinary wear and tear, do or suffer any waste or damage,
disfigurement or injury to the Baseball Facility. Except as otherwise provided
herein, Gateway shall perform or cause to be performed all Capital Repairs
required during the Term, at Gateway's expense; provided, however, that during
the Term, the Operator shall perform or cause to be performed, and pay for the
costs of all work (a) necessitated by Misuse, and (b) related to any Component
that was added to the Baseball Facility as the Operator's alteration or
addition, and the
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Operator hereby agrees to indemnify, defend and hold Gateway harmless from and
against all costs and expenses (including attorneys' fees) arising out of the
Operator's failure to perform or pay for such repairs referred to in (a) and (b)
above. All work related to any Capital Repair shall be completed in a good,
workmanlike manner.
10.6 GATEWAY CAPITAL REPAIRS. Except as otherwise provided in
Section 10.5 hereof, Gateway shall perform or cause to be performed, and shall
pay for the costs of, all Capital Repairs and, unless the Operator shall be
performing such Capital Repairs, Gateway hereby agrees to indemnify, defend and
hold the Operator harmless from and against all costs and expenses (including
attorneys' fees) arising out of Gateway's failure to perform such Capital
Repairs in accordance with the provisions of Section 10.7. Gateway shall provide
replacement stock for Components as more fully set forth in the Program
Requirements and shall, as part of Gateway's responsibilities to perform Capital
Repairs, replenish, in a reasonable manner, such stock as such stock is
depleted. Notwithstanding the foregoing, the Operator may, at the Operator's
sole election, perform or cause to be performed such Capital Repair, at
Gateway's expense. In such event, (i) the Operator (or any Person with whom the
Operator contracts to perform such Capital Repair) shall act in accordance with
Gateway's responsibilities under Section 10.7, (ii) Gateway shall have the same
reasonable rights of approval the Operator would have if Gateway were
effectuating such Capital Repairs, and (iii) the Operator shall obtain a
one-year warranty for the benefit of Gateway from any person who contracts to
perform any Major Capital Repair and shall enforce such warranty on Gateway's
behalf. If the Operator itself performs such Major Capital Repair, the Operator
will provide Gateway with such one-year warranty. In the event the Operator
effectuates any Capital Repair during the Term, Gateway, within payment terms
agreed upon by the parties, shall either pay directly or reimburse the Operator,
as the case may be, for the costs of such Capital Repair. All work related to
any Capital Repair shall be done in a good, workmanlike manner.
10.7 CAPITAL REPAIRS PROCEDURES. The Operator and
Gateway shall comply with the following procedures in making
Capital Repairs:
(a) If any Capital Repair is an Emergency Repair, or if the
cost thereof does not exceed $2,000 in any instance and $5,000 in one or more
instances in any calendar month, the Operator may perform such Capital Repairs
and shall be entitled to reimbursement without compliance with this Section
10.7, but shall, when feasible, give Gateway prompt notice thereof; PROVIDED,
HOWEVER, in the case of a Capital Repair which is an Emergency Repair and which
in the Operator's good faith determination will cost more than $5,000 to
complete, the Operator will give Gateway not less than twenty-four (24) hours'
notice prior to commencement of such work unless such delay could affect public
health or safety.
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(b) If Subsection (a) is not applicable and the work will
cost, in the Operator's good faith determination, less than $50,000, the
Operator may, but shall not be obligated to, elect to perform such work. In the
event the Operator elects to perform such work, then the Operator shall submit
to Gateway a proposal to perform such work for a fixed sum or an estimate of the
cost of such repair, such estimate to be prepared on a "time and materials"
basis with the hourly rates of such contractor's charges for such work to be set
forth therein, in each case from a reputable contractor. If Gateway, within ten
(10) Business Days after receipt of such proposal or estimate, fails to object
thereto in writing, the Operator may proceed to perform such work or to contract
with the party which submitted the proposal or estimate (either on a time and
materials basis or on a firm fixed sum basis or guaranteed maximum price basis
not to exceed, in each of the foregoing instances, $50,000) to cause such
Capital Repair to be made. If Gateway objects, Gateway shall have ten (10)
Business Days after receipt by the Operator of Gateway's notice of rejection to
secure a proposal for such work from a reputable contractor reasonably
acceptable to the Operator and Gateway for a fixed sum or guaranteed maximum
price, or a "time and materials" estimate, which is in either case not more than
ninety percent (90%) of the amount estimated by the Operator's contractor, in
which event Gateway shall be entitled to contract with such contractor for
completion of such Capital Repair. If Gateway fails to secure such a proposal,
the Operator may proceed thereafter as if Gateway had failed to object.
(c) If Subsection 10.7(a) is not applicable and the work will
cost, in the Operator's good faith determination, more than $50,000, and if the
Operator elects to perform such work the procedures under Subsection 10.7 (b)
shall be applicable except that the Operator shall in all events submit a
proposal to perform such work for a fixed sum or guaranteed maximum price and
may not submit an estimate.
(d) The sums "$2,000" and "$5,000" in Subsection 10.7(a), the
sum of $50,000 in Subsections 10.7(b) and (c) and the sum "$500,000" in the
definition of Major Capital Repair, shall be applicable until the end of the
fifth (5th) Term Year. Thereafter each such sum shall increase on January 1 of
each of the sixth (6th), eleventh (11th) and sixteenth (16th) Term Years to an
amount equal to such sum plus a percentage of such sum equal to the percentage
increase in the CPI from December of the fifth (5th) Term Year or any subsequent
adjustment year, as appropriate, to the December immediately preceding such date
of increase.
(e) At the Operator's election, any Capital Repairs under
Subsection 10.7(a) may be performed in whole or in part by the Operator's own
employees on a "time and materials" basis, with the charges for the time of such
employees to be equal to Direct Personnel Expense plus ten percent (10%)
thereof. In addition to
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the charges for such employees, the Operator shall be reimbursed by Gateway for
the cost of all materials and all services performed by outside contractors,
architects or engineers.
10.8 MAJOR CAPITAL REPAIRS PROCEDURE. If the work required to
be performed is a Major Capital Repair, Gateway shall promptly cause such work
to be performed and paid for in full.
Gateway shall comply with the following:
(a) Within thirty (30) days after Gateway has knowledge of a
Major Capital Repair, Gateway shall retain the Design Architect (or such other
architect as may be approved by the Operator and the Lessee in the Operator's
and the Lessee's reasonable discretion) to determine the work required to
effectuate the Major Capital Repair. Such architect shall consult with the
Operator and the Lessee in making such determination and shall retain any and
all structural or other engineers it deems necessary to aid in making such
determination. The work necessary to complete Major Capital Repairs shall be
incorporated in plans and specifications therefor ("Repair Plans") which shall
be submitted to the Operator and the Lessee for their respective approvals,
which approvals shall not be unreasonably withheld or unduly delayed. Failure to
disapprove Repair Plans within thirty (30) days after receipt thereof shall be
deemed an approval thereof by the Operator and the Lessee.
(b) Prior to commencement of the Major Capital Repair, Gateway
shall be required, at Gateway's expense, to cause to be taken any and all
reasonable temporary measures, if any, reasonably recommended by the Operator or
the Lessee which will enable the Operator and the Lessee to utilize the Baseball
Facility during the pendency of a Major Capital Repair, such as the erection of
barricades, the construction of temporary construction facilities or other
similar measures.
(c) Gateway shall contract for and cause to be completed as
promptly as possible all work reflected in the Repair Plans in a good,
workmanlike manner, and shall cause to be corrected all defects in workmanship
and materials in such work.
ARTICLE XI
----------
CONCESSIONS
11.1 CONCESSION RIGHTS. During the Term, the Operator shall
have the exclusive right and obligation to operate all concessions in or about
the Baseball Facility in a first-class, professional, businesslike and efficient
manner, subject to the ensuing provisions of this Article and any other rights
or limitations granted to or placed on concessions elsewhere in this Agreement
or the Lease Agreement. In connection with such
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concession rights, the Operator shall have the following rights and
obligations:
(a) to operate and conduct all concessions for all Home
Dates and Special Events;
(b) to operate a restaurant or stadium club, any other eating
facilities, and any concessions or eating facilities with respect to Premium
Seating;
(c) to sell, rent or furnish merchandise or articles in any
part of the Baseball Facility (i) by means of portable or mobile vending
devices, by vendors carrying merchandise or articles, by automatic vending
machines, and/or (ii) at stands or booths.
11.2 MERCHANDISE AND SERVICES. The Operator shall have the
right to select all merchandise, articles and services sold, rented or furnished
pursuant to the rights granted by this Article XI. Such items and services shall
conform and comply, in all respects, with all federal, state and local laws and
regulations. The Lessee shall have the right to require the Operator to stop
selling, renting or furnishing any such item or service which the Lessee
decides, in its reasonable judgment, is of poor quality, unsatisfactory in
nature, or harmful or dangerous to the health or safety of the public or
contrary to Baseball Rules and Regulations.
11.3 PRICES. The Operator shall have the right to determine
the prices charged for all merchandise, articles and services sold, rented or
furnished pursuant to the rights granted by this Article XI, subject to the
prior written approval of the Lessee, which approval shall not be unreasonably
withheld or delayed. The Lessee's approval of the proposed price of any item
shall not be withheld if such price does not exceed the price charged for the
same or a comparable item or service sold, rented or furnished in any other
major league baseball park.
11.4 ASSIGNMENT OF RIGHTS. The Operator shall have the right
to grant, assign or sell to any Person or Persons or to license or authorize any
Person or Persons to exercise any or all of the rights granted to and perform
the duties of the Operator under this Article XI; PROVIDED, HOWEVER, that prior
to such assignment, the Operator shall secure the approval of the Bank, if
required, and the Lessee, which approval may not be withheld if the proposed
assignee is a concessionaire in any other Major League stadium and has a
superior reputation. Any approved assignee may exercise any or all of the rights
and shall perform any or all of the duties or obligations of the Operator under
this Article XI and under any other provision of this Agreement relating to
concessions (including, without limitation, concessions for Premium Seating),
and the term "Operator" when used in any of said provisions shall be deemed to
mean and include the Operator and/or its assignee, irrespective of whether such
assignee is expressly
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mentioned. Neither any such grant, assignment, sale, license or authorization
to, nor any such exercise of rights or performance of duties or obligations by,
any such assignee, however, shall relieve the Operator of any of its duties or
obligations to Gateway under this Agreement or from any liability to Gateway for
any breach hereof unless otherwise agreed to by Gateway in writing. The Operator
shall cause each such assignee to use reasonable efforts to encourage and
promote opportunities for minorities and women in connection with the
performance of the duties assigned pursuant hereto.
11.5 CONCESSION REVENUE. The Operator shall be entitled to
receive all revenues from the operation of all concessions, including, without
limitation, any membership or other fees charged for the right to use any dining
facilities or Ballpark club memberships. The Operator may limit admission to the
Ballpark restaurant to purchasers of season tickets for any Season, Premium
Seating licensees, and their respective guests. The Operator may require payment
of a fee for each privilege granted to a purchaser of a season ticket or Premium
Seating licensee to use the Ballpark restaurant.
ARTICLE XII
-----------
SCOREBOARDS
12.1 DUTIES. Subject to procedures approved by the Lessee, the
Operator shall be entitled to and obligated to operate, in a first-class,
professional, businesslike and efficient manner, all scoreboards at the Baseball
Facility for all Home Dates and Special Events, and shall perform Routine
Maintenance on all such scoreboards throughout the Term. Such Routine
Maintenance shall not include painting (other than touch-up painting) or
revamping. The Operator shall also be obligated to hire all personnel necessary
for the operation and Routine Maintenance of the scoreboards, including, without
limitation, electricians and operators, before, during and after any Home Date
or Special Event.
12.2 ADVERTISING. In accordance with Article XIII hereof, the
Operator shall have the right to (a) place advertising signs on the front and
back of all scoreboards, and (b) sell video screen ads during all Home Dates and
Special Events, if applicable, to the extent such scoreboards and video screen
ads are located in or on the interior or exterior of the Ballpark. Subject to
the Operator's obligation to pay Fees to Gateway pursuant to Section 5.1 hereof,
the Operator shall be entitled to receive all Scoreboard Advertising Revenue.
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ARTICLE XIII
------------
ADVERTISING
13.1 ADVERTISING RIGHTS. Subject to the terms and conditions
of the Lease Agreement, during the Term, the Operator shall have the exclusive
right to control, select or enter into contracts for all advertising in and on
the interior and exterior of the Ballpark (including advertising on all
permanent or fixed advertising panels and signs, advertising on the scoreboard
and video boards, and all nonpermanent or nonfixed spot advertising). The
Operator shall have the exclusive right to sell or lease such advertising
panels, signs, or other space in and on the interior and exterior of the
Ballpark, and to receive all revenue therefrom (subject to its obligation to pay
Fees as a result thereof).
13.2 OTHER ADVERTISING. The Operator may conduct, or permit to
be conducted, within the perimeter walls of the Ballpark, any and all other
forms of advertising not affixed to the structure of the Baseball Facility which
the Operator deems appropriate, including, but not limited to, any advertising
in Ballpark concourses, restrooms, any advertising to be worn or carried by the
Operator's or the concessionaires' personnel within the perimeter walls of the
Ballpark, promotional events sponsored by advertisers, logos or other forms of
advertising to be affixed to or included with cups, hats, T-shirts and other
concession items or giveaways, and any and all other forms of such advertising
or promotion within the perimeter walls of the Ballpark. The Operator shall be
entitled to receive all revenues from such advertising, subject to its
obligation to pay Fees pursuant to Section 5.1 hereof.
13.3 ADDITIONAL SIGNS. The Operator may, at its expense, erect
additional advertising signs in and on the interior and exterior of the
Ballpark, including that certain free-standing sign described in Article IV of
the Gateway CAM Agreement. The Operator may also erect additional informational
and directional signs of a nonadvertising nature, at the Operator's expense,
from time to time.
ARTICLE XIV
-----------
BASEBALL FACILITY SECURITY
14.1 EVENT SECURITY. During the Term, the Operator shall be
obligated to provide, at the Operator's expense, such security and crowd control
personnel for the Baseball Facility as shall be required in the Operator's
discretion for such purposes, consistent with procedures submitted to and
approved by the Lessee. In addition, at all Special Events, the Operator will
provide the Operator's security and crowd control personnel, and Gateway shall
be required to utilize such personnel for supervision of security at Gateway
Special Events. Gateway represents and covenants to the
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Operator that Gateway shall use its best efforts to obtain the commitment of the
City to provide police protection and traffic control personnel for all events
at the Baseball Facility as follows:
Expected Police/Traffic
NUMBER OF FANS CONTROL OFFICERS
-------------- ----------------
Less than 25,000 20
25,000-35,000 41
35,000 to capacity 50
Gateway acknowledges that the Operator's obligations hereunder are expressly
conditioned upon Gateway obtaining the City's commitment described above, as
more fully set forth in Section 25.3 hereof.
14.2 TWENTY-FOUR (24) HOUR SECURITY. Consistent with the
security procedures submitted to and approved by the Lessee, the Operator, at
its expense, will provide such security guards and night watchmen as may be
necessary in order to provide twenty-four (24) hour per day, year-round,
protection and security of the Baseball Facility.
ARTICLE XV
----------
REAL ESTATE AND PERSONAL PROPERTY TAXES
During the Term, Gateway shall pay when due all real estate
taxes, personal property taxes (other than for tangible personal property owned
or installed by the Operator, any concessionaires or the Lessee), assessments
and other governmental levies and charges, general and special, ordinary and
extraordinary, of any kind or nature, lawfully levied or assessed by federal,
state, county or municipal government, upon or with respect to the Baseball
Facility and any and all other improvements (other than with respect to personal
property owned by the Operator or the Lessee or improvements made by or on
behalf of the Operator or the Lessee pursuant to Section 9.1 hereof or Section
7.1 of the Lease, respectively) hereafter constituting a part of the Baseball
Facility, or any taxes in lieu thereof (collectively, "Real and Personal
Property Taxes"); PROVIDED, HOWEVER, that if, because of any change in the
method of taxation of real estate or personal property, any other or additional
tax or assessment is imposed upon the Baseball Facility as or in substitution
for, or in lieu of, any tax or assessment which would otherwise be included in
Real and Personal Property Taxes, such other tax or assessment shall also be
Gateway's responsibility. Gateway hereby agrees to indemnify, defend and hold
the Operator harmless from and against all Real and Personal Property Taxes. In
the event the Lessee's interest in the Lease Agreement, the Ground Lease or the
Gateway CAM Agreement is terminated as a result of a failure to pay Real and
Personal Property Taxes, including, without limitation, a sale of the
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Baseball Facility by a foreclosure sale, and within sixty (60) days after such
termination is not reinstated for the balance of the then remaining terms
thereof on the same terms and conditions, the Operator shall be entitled to
terminate this Agreement upon thirty (30) days prior written notice to Gateway.
Without in any way limiting the Operator's rights and remedies provided for in
Article XVIII hereof, in the event Gateway fails to pay any Real and Personal
Property Taxes when the same shall be due and payable, the Operator shall have
the right, but shall have no obligation to pay the same or any of them, and upon
such payment by the Operator, Gateway shall, immediately after proof of such
payment shall have been submitted to Gateway by the Operator, and on demand
therefor, pay the Operator the amount of any such payment so made by the
Operator, with interest thereon at the Interest Rate.
ARTICLE XVI
-----------
UTILITIES
During the Term, the Operator shall bear the cost of all
utilities consumed at the Baseball Facility (such as gas, electricity and
water), including those necessary for the Lessee's Office Space. The Operator
shall select all providers of all such utilities; provided, however, that the
Operator will select providers that provide services related to the site
preparation and infrastructure improvements for the Baseball Facility, such as
removal and relocation of existing underground utility lines at reduced or no
costs to Gateway, so long as the services provided do not result in any increase
in the rate charged for furnishing utilities to the Baseball Facility above the
rate that is available from the provider selected to any other downtown
Cleveland user of similar usage of such utilities. The Operator and Gateway
shall use their reasonable efforts to avoid waste in their use of such
utilities, in the interest of conserving resources. In the event that there is
any interruption in utility services affecting the Baseball Facility, the
Operator shall use reasonable efforts to arrange with the appropriate providers
of such utilities for the prompt and complete restoration of such service.
ARTICLE XVII
------------
RIGHT OF ENTRY AND INSPECTION
17.1 OPERATOR'S RIGHT OF ENTRY AND INSPECTION. Prior to the
Completion Date, the Operator and the Operator's agents, representatives,
invitees, concessionaires and contractors shall have the right at all times
during normal business hours of Gateway or of Gateway's general contractor,
prime contractor or construction manager, as the case may be, and at such other
times as the Operator may reasonably request, to review the Final Plans for
Gateway's Work and to inspect the progress of the construction
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of Gateway's Work and provide tours of the entire Baseball Facility. The
provisions of this Section 17.1 shall in no way limit or otherwise relieve
Gateway from Gateway's obligation to complete Gateway's Work in conformance with
this Agreement or the Lease Agreement, unless the Operator's inspections or
tours unreasonably interfere with Gateway's construction of the Baseball
Facility.
17.2 GATEWAY'S RIGHT OF ENTRY AND INSPECTION. In addition to
its rights to use the Baseball Facility as provided in this Agreement and in the
Lease Agreement and the Ground Lease, Gateway and its agents and representatives
(including representatives of the City and the County), shall have the right, at
all times during usual business hours or at any other time in case of an
emergency, to enter into and upon any and all parts of the Baseball Facility for
the purpose of inspecting the same, carrying out any of its obligations under
this Agreement, the Lease Agreement or the Ground Lease (including, without
limitation, to make any Capital Repairs required to be made by Gateway
hereunder), or for any other legitimate reason related to the obligations of the
parties hereto or the rights of Gateway under this Agreement or under the Lease
Agreement or the Ground Lease. In the event Gateway enters the Baseball Facility
for the purpose of making any Capital Repair, during the progress of such work,
Gateway and/or its agents and representatives shall be entitled to keep and
store, in areas mutually agreed upon by the Operator and Gateway in and upon the
Baseball Facility, all necessary materials, tools and equipment.
ARTICLE XVIII
-------------
DEFAULT AND REMEDIES
18.1 DEFAULT BY OPERATOR. The occurrence of any one or more of
the following events constitutes a default by the Operator under this Agreement
("Operator Default"):
(a) Failure by the Operator at any time to pay, when due, any
Fees or other sums payable to Gateway or to be deposited by the Operator
hereunder and such failure to pay continues for a period of five (5) Business
Days after notice of such failure is given to the Operator by Gateway;
(b) Failure by the Operator to observe or perform any other
covenant, agreement, condition or provision of this Agreement, if such failure
shall continue for more than thirty (30) days; PROVIDED, HOWEVER, that the
Operator shall not be in default with respect to matters that cannot be
reasonably cured within thirty (30) days, so long as the Operator has promptly
commenced such cure and diligently proceeds in a reasonable manner to complete
the same thereafter;
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(c) The Operator admits in writing its inability to pay its
debts as they mature, or makes an assignment for the benefit of creditors, or
applies for or consents to the appointment of a trustee or receiver for the
Operator or for a major part of its property;
(d) A trustee or receiver is appointed for the Operator or for
a major part of its property and is not discharged within thirty (30) days after
such appointment; or
(e) Bankruptcy, reorganization, receivership, arrangement,
insolvency or liquidation proceedings, or other proceedings for relief under any
federal or state bankruptcy law, or similar law for the relief of debtors, are
instituted by or against the Operator, and, if instituted against the Operator,
are allowed against it or are consented to by it or are not dismissed within
ninety (90) days after such institution.
18.2 GATEWAY'S REMEDIES. If an Operator Default occurs, in
addition to any other rights or remedies Gateway may have at law or in equity,
Gateway shall have the following rights:
(a) Gateway may enforce the provisions of this Agreement and
may enforce and protect the rights of Gateway hereunder by a suit or suits in
equity or at law for the specific performance of any covenant or agreement
contained herein, or for the enforcement of any other appropriate legal or
equitable remedy, including recovery of monetary damages and all moneys due or
to become due from the Operator under any of the provisions of this Agreement,
or any other relief or remedies to the extent permitted by law, by filing a
cause of action or actions for such damages, equitable relief, or other
appropriate remedies or relief from the Operator in any court of competent
jurisdiction in the State of Ohio.
(b) After the time when Gateway has given notice and any
applicable grace period provided has expired, if any sums payable by the
Operator shall remain due and payable, or after the time for performance by the
Operator of any other term, covenant, provision or condition of this Agreement,
or before the expiration of that time in the event of a bona fide emergency (in
which case Gateway shall only be required to give such notice as is reasonable
and practical under the circumstances), Gateway may, at Gateway's election (but
without obligation), make any payment required of the Operator under this
Agreement, or perform or comply with any covenant or condition imposed on the
Operator under this Agreement, as Gateway deems advisable. The amount so paid
plus the cost of such performance or compliance, plus interest on such sums at
the Interest Rate, shall be deemed to be Fees payable by the Operator
immediately upon demand. No such payment, performance or observance by Gateway
shall constitute a waiver of default or of any remedy for default or render
Gateway liable for any loss or damage resulting from any such act. Gateway may,
with notice to the Operator and at any time or from time to time, charge, set
off
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and otherwise apply all or any part of any of Gateway's Obligations
against Operator's Obligations now or in the future.
(c) No termination of this Agreement shall deprive Gateway of
any of its remedies or actions against the Operator for past or future Fees or
other sums due from the Operator hereunder.
18.3 DEFAULT BY GATEWAY. The occurrence of any one or more of
the following events constitutes a default by Gateway under this Agreement
("Gateway Default"):
(a) Failure by Gateway at any time to pay, when due, any sums
payable to the Operator or to be deposited by Gateway hereunder and such failure
to pay continues for a period of five (5) Business Days after notice of such
failure is given to Gateway by the Operator;
(b) A Completion Default shall have occurred as provided in
Article IV hereof;
(c) Failure by Gateway to observe or perform any other
covenant, agreement, condition or provision of this Agreement, if such failure
shall continue for more than thirty (30) days; PROVIDED, HOWEVER, that Gateway
shall not be in default with respect to matters that cannot be reasonably cured
within thirty (30) days, so long as Gateway has promptly commenced such cure and
diligently proceeds in a reasonable manner to complete the same thereafter;
(d) Gateway admits in writing its inability to pay its debts
as they mature, or makes an assignment for the benefit of creditors, or applies
for or consents to the appointment of a trustee or receiver for Gateway or for a
major part of its property;
(e) A trustee or receiver is appointed for Gateway or for a
major part of its property and is not discharged within thirty (30) days after
such appointment; or
(f) Bankruptcy, reorganization, receivership, arrangement,
insolvency or liquidation proceedings, or other proceedings for relief under any
federal or state bankruptcy law, or similar law for the relief of debtors, are
instituted by or against Gateway, and, if instituted against Gateway, are
allowed against it or are consented to by it or are not dismissed within ninety
(90) days after such institution.
18.4 OPERATOR'S REMEDIES. If a Gateway Default occurs, in
addition to any other rights or remedies the Operator may have at law or in
equity, the Operator shall have the following rights:
(a) The Operator may enforce the provisions of this
Agreement and may enforce and protect the rights of the Operator
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hereunder by a suit or suits in equity or at law for the specific performance of
any covenant or agreement contained herein, or for the enforcement of any other
appropriate legal or equitable remedy, including recovery of monetary damages
and all moneys due or to become due from Gateway under any of the provisions of
this Agreement, or any other relief or remedies to the extent permitted by law,
by filing a cause of action or actions for such damages, equitable relief, or
other appropriate remedies or relief from Gateway in any court of competent
jurisdiction in the State of Ohio.
(b) After the time when the Operator has given notice and any
applicable grace period provided has expired, if any sums payable by Gateway
shall remain due and payable, or after the time for performance by Gateway of
any other term, covenant, provision or condition of this Agreement, or before
the expiration of that time in the event of a bona fide emergency (in which case
the Operator shall only be required to give such notice as is reasonable and
practical under the circumstances), the Operator may, at the Operator's election
(but without obligation), make any payment required of Gateway under this
Agreement, or perform or comply with any covenant or condition imposed on
Gateway under this Agreement, as the Operator deems advisable. The amount so
paid plus the cost of such performance or compliance, plus interest on such sums
at the Interest Rate, shall be payable by Gateway immediately upon demand. No
such payment, performance or observance by the Operator shall constitute a
waiver of default or of any remedy for default or render the Operator liable for
any loss or damage resulting from any such act. The Operator may, with notice to
Gateway and at any time or from time to time, charge, set off and otherwise
apply all or any part of any of the Operator's Obligations against Gateway's
Obligations now or in the future.
(c) No termination of this Agreement shall deprive the
Operator of any of its remedies or actions against Gateway for past or future
sums due to the Operator from Gateway hereunder.
18.5 GENERAL PROVISIONS.
(a) No right or remedy herein conferred upon, or reserved to,
Gateway or the Operator is intended to be exclusive of any other right or
remedy, but each shall be cumulative and in addition to every other right or
remedy given herein or now or hereafter existing at law, or in equity or by
statute; PROVIDED, HOWEVER, that neither Gateway nor the Operator shall have any
right to cancel, rescind or otherwise terminate this Agreement due to a breach
of this Agreement by the other party except as otherwise specifically set forth
in this Agreement.
(b) No waiver by either party of any breach of obligations,
agreements or covenants herein shall be a waiver of any subsequent breach of any
obligation, agreement or covenant,
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nor shall any forbearance by either party to seek a remedy for any breach by the
other party be a waiver by such party of any rights or remedies with respect to
such or any subsequent breach, nor shall any express waiver by either party be
deemed to apply to any other existing or subsequent right to remedy any default
by the other party, nor shall any waiver by either party of any default or
breach by the other party in the performance of any of the covenants or
obligations of such other party under this Agreement be deemed to have been made
by the party against which the waiver is sought to be charged unless contained
in a writing executed by such party.
(c) In the event that either party fails to pay any payment
required hereunder, when due, then, without limiting any other rights of the
nondefaulting party, the defaulting party shall be liable for interest thereon
at the Interest Rate from the date that such payment was due until the date paid
in full.
ARTICLE XIX
-----------
SURRENDER OF USE RIGHTS
19.1 GENERAL. Upon the expiration or termination of this
Agreement (by lapse of time or otherwise), the Operator shall peaceably
surrender its right to use, occupy, operate and manage the Baseball Facility to
Gateway pursuant to this Agreement. The Operator shall surrender to Gateway all
keys in the possession of the Operator for the Baseball Facility at the place
then fixed for the receipt of notices by Gateway, and shall notify Gateway, in
writing, of all combinations of locks, safes and vaults, if any. The Operator's
obligations to observe and perform the covenants set forth in this Article XIX
shall survive the expiration or earlier termination of this Agreement (by lapse
of time or otherwise).
19.2 ALTERATIONS AND IMPROVEMENTS. At the expiration or
termination of this Agreement (by lapse of time or otherwise), all permanent
alterations, installations, changes, replacements, additions or improvements
made by the Operator to the Baseball Facility shall be deemed a part of the
Baseball Facility and the same shall not be removed.
19.3 OPERATOR'S PROPERTY. Upon the expiration or termination
of this Agreement (by lapse of time or otherwise), the Operator may remove all
property which is owned by the Operator and which the Operator is permitted to
remove from the Baseball Facility under the provisions of this Agreement and, in
such event, repair any damage caused to the Baseball Facility due to the removal
of such property at the Operator's expense. If the Operator fails to remove such
property, such property shall be deemed abandoned by the Operator. Gateway may,
at its option, (a) cause that property to be removed at no expense to the
Operator;
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(b) sell all or any part of such property at public or private sale without
notice to the Operator; or (c) declare that title to such property shall be
deemed to have passed to Gateway.
19.4 ABANDONING PREMISES OR PERSONAL PROPERTY. The Operator
shall not vacate or abandon the Baseball Facility at any time during the Term,
but if the Operator vacates or abandons the Baseball Facility or is dispossessed
by process of law, in breach of this Agreement, any personal property owned by
the Operator which may be left in the Baseball Facility following such
abandonment or dispossession shall be deemed to have been abandoned by the
Operator, and in that event such property shall be disposed of by Gateway in
accordance with the provisions of Section 19.3 hereof.
ARTICLE XX
----------
DAMAGE TO BASEBALL FACILITY
20.1 PROPERTY DAMAGE. If any Property Damage shall occur:
(a) All proceeds from property insurance required to be
obtained hereunder paid on account of such damage shall be paid to Gateway to be
held in escrow accounts with Permitted Escrow Agents and invested in Permitted
Investments, including the Bond Escrow Accounts, and applied in the following
manner:
(i) there shall be paid from said insurance proceeds
such part thereof as shall equal the cost of making such
temporary repairs or doing such other work as in the
reasonable opinion of the Project Architect (or such other
architect selected by Gateway and approved by the Operator)
may be necessary in order to protect the Baseball Facility
pending the adjustment of the insurance loss or the making of
permanent repairs, restoration or reconstruction of the
Baseball Facility;
(ii) there shall be paid from said insurance proceeds such
part thereof as shall equal the cost of repairing, restoring
or reconstructing the Baseball Facility or of any part thereof
or of erecting a new building or structure or improvement or
part thereof so that upon completion of such repairs,
restoration, reconstruction, or erection the building or
structure or improvement shall be equal to the replacement
value of the building or structure or improvement;
(iii) payments pursuant to paragraphs (i) or (ii) of this
Subsection 20.1(a) from such insurance proceeds shall be made
by Gateway from time to time as the work progresses in amounts
equal to the cost of labor and
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materials incorporated into and used in such work and
builders', architects' and engineers' fees and other charges
in connection with such work upon delivery to Gateway of a
certificate of an authorized architect in charge of such work
certifying that the amounts so to be paid are payable in
accordance with the provisions of this Article and that such
amounts are then due and payable and have not theretofore been
paid.
(b) All insurance proceeds paid to the Operator on account of
such Property Damage shall be held in trust by the Operator for the benefit of
Gateway and shall be paid immediately by the Operator to Gateway.
(c) In the event that any of the insurance proceeds paid by
the insurance companies shall remain after the completion of such repairs,
restoration, reconstruction or erection, the excess shall be deposited in the
Capital Repairs Fund and used for the purposes set forth in Article X hereof.
(d) In the event that the insurance proceeds paid, as
hereinabove provided, together with the funds available in the Capital Repairs
Fund are insufficient for making such permanent repairs, restoration or
reconstruction or erection and no party is willing to provide the additional
funds needed therefor, Gateway or the Operator shall notify the other party of
such determination in writing and thereupon this Agreement shall cease and
terminate and all future Fees and other amounts due by the Operator hereunder
shall cease as of the date of such written notice and the total insurance
proceeds so paid shall be used first to pay the principal, interest and
redemption premiums, if any, on the Bonds, and any remaining proceeds shall be
allocated equitably between Gateway, Lessee and Operator.
20.2 INABILITY TO OPERATE. Notwithstanding any other provision
of this Agreement, if the Baseball Facility is untenantable in whole or in any
material part as a result of any Major Capital Repair, or the event or events
which gave rise thereto, then for the period of such untenantability, the
Operator will not be responsible for any obligations accruing under this
Agreement. In the event that such untenantability continues for a period of two
(2) Seasons, or totals a number of days equal to two (2) Seasons in any three
(3) year period, the Operator may at its option, exercised in its sole
discretion, terminate this Agreement upon thirty (30) days prior written notice
to Gateway.
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ARTICLE XXI
-----------
INDEMNIFICATION
21.1 OPERATOR INDEMNIFICATION. Subject to the limitations
hereinafter set forth, the Operator hereby agrees to indemnify and hold harmless
Gateway, its officers, members, employees and agents from and against all loss,
cost and expense in connection with proceedings, judicial or otherwise, and
claims, demands and judgments, together with costs and expenses including
attorneys' fees relating thereto, arising out of damage or injury to person or
property occurring in or about the Baseball Facility which occurs after the
Completion Date and while this Agreement is in effect. Notwithstanding the
foregoing, in no event shall the foregoing indemnification obligation be
applicable to any loss, cost or expense arising out of any Excluded Occurrences.
21.2 GATEWAY INDEMNIFICATION. Gateway hereby agrees to
indemnify, defend and hold the Operator, its shareholders, officers, directors,
employees and agents harmless from and against all loss, cost and expense in
connection with proceedings, judicial or otherwise, and claims, demands and
judgments, together with costs and expenses including attorneys' fees, arising
solely out of any or all Excluded Occurrences which occur while this Agreement
is in effect.
21.3 PROCEDURE REGARDING INDEMNIFICATION.
(a) If any Indemnified Party shall discover or have actual
notice of facts giving rise or which may give rise to a claim for
indemnification under this Article XXI, or shall receive notice of any Action
with respect to any matter for which indemnification may be claimed, the
Indemnified Party shall, within twenty (20) days following service of process
(or within such shorter time as may be necessary to give the Indemnifying Party
a reasonable opportunity to respond to such service of process) or within twenty
(20) days after any other such notice, notify the Indemnifying Party in writing
thereof together with a statement of such information respecting such matter as
the Indemnified Party then has; it being understood and agreed that any failure
or delay of the Indemnified Party to so notify the Indemnifying Party shall not
relieve the Indemnifying Party from liability hereunder except and solely to the
extent that such failure or delay shall have materially adversely affected the
Indemnifying Party's ability to defend against, settle, or satisfy any such
Action. Following such notice, the Indemnifying Party shall have the right, at
its sole cost and expense, to contest or defend such Action through attorneys,
accountants, and others of its own choosing (the choice of such attorneys,
accountants, and others being subject to the approval of the Indemnified Party,
such approval not to be unreasonably withheld) and in the event it elects to do
so, it shall promptly notify the Indemnified Party of such intent to
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contest or defend such Action. If within twenty (20) days following such notice
from the Indemnified Party (or within such shorter time as may be necessary to
give the Indemnified Party a reasonable opportunity to respond to service of
process or other judicial or administrative action), the Indemnified Party has
not received notice from the Indemnifying Party that such Action will be
contested or defended by the Indemnifying Party, the Indemnified Party shall
have the right to (i) authorize attorneys satisfactory to it to represent it in
connection therewith or (ii) at any time settle, compromise, or pay such action,
in either of which events the Indemnified Party shall be entitled to
indemnification therefor subject to this Section 21.3.
(b) In the event and so long as the Indemnifying Party is
actively contesting or defending against an Action as hereinabove provided, the
Indemnified Party shall cooperate with the Indemnifying Party and its counsel in
such contest or defense, shall join in making any appropriate counterclaim or
cross-claim in connection with the Actions, and shall provide such access to the
books and records of the Indemnified Party as shall be necessary in connection
with such defense or contest, all at the sole cost and expense of the
Indemnifying Party. Notwithstanding that an Indemnifying Party is actively
conducting such defense or contest, any Action may be settled, compromised or
paid by the Indemnified Party without the consent of the Indemnifying Party;
PROVIDED, HOWEVER, that if such action is taken without the Indemnifying Party's
consent, its indemnification obligations in respect of such claim shall thereby
be nullified. Any such Action may be settled, compromised, or paid by the
Indemnifying Party without the Indemnified Party's consent, so long as such
settlement or compromise does not cause the Indemnified Party to incur any
present or future material cost, expense, obligation or liability of any kind or
nature.
(c) In the event any Action involves matters partly within or
partly outside the scope of the indemnification by the Indemnifying Party
hereunder, then the attorneys' fees, costs, and expenses of contesting or
defending such Action shall be equitably allocated between the Indemnified Party
and the Indemnifying Party.
21.4 LIMITATION. Indemnification under this Article XXI does
not include indemnification against loss or liability due to Force Majeure.
ARTICLE XXII
------------
ASSIGNMENT
22.1 ASSIGNMENT BY OPERATOR. The Operator shall not assign or
transfer this Agreement, in whole or in part, with or without consideration, to
any Person other than any Affiliate, without the prior written consent of
Gateway and the Lessee, which
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consent shall not be unreasonably withheld by Gateway or the Lessee. Upon the
assignment of this Agreement (or any part hereof) by the Operator with the
consent of Gateway and the Lessee, the liability of the Operator shall cease
with respect to liabilities accruing from and after the effective date of such
assignment.
22.2 ASSIGNMENT BY GATEWAY. Gateway shall have the right to
assign and transfer its interest in, and pledge any Fees or other sums to which
Gateway is entitled (including, without limitation, its interest in all sums
deposited into the Prepaid Premium Seating Revenue Account, the Premium Seating
Revenue Account and the Capital Repairs Fund) under this Agreement or any other
interest Gateway has in this Agreement, in whole or in part, as security for the
repayment of the Bonds, or other financing approved by the Operator, for the
costs of the design and construction of the Baseball Facility (including,
without limitation, any letter of credit issued to secure the Bonds). All costs
incurred in connection with any such pledge shall be the sole responsibility of
Gateway. Gateway shall also have the right to assign and transfer its right,
title and interest in and to this Agreement, in whole or in part, to the City or
the County pursuant to and subject to the Three Party Agreement.
22.3 ASSIGNEES. If Gateway consents at any time to any
assignment as set forth in this Article XXII, the Operator and any such
assignee, in addition to any other consideration that may pass between them in
connection therewith, shall be deemed to have covenanted not to make any further
assignment contrary to the provisions of this Article XXII. Such covenant shall
be deemed to have been made as of the date of such consent by Gateway, and shall
take effect prospectively from the date thereof.
ARTICLE XXIII
-------------
EMINENT DOMAIN
23.1 TERMINATION FOR CONDEMNATION. In the event that a
Condemnation with respect to any material part of the Baseball Facility shall
occur at any time during the Term, this Agreement shall terminate (except as
hereinafter provided below), on the date on which possession is required to be
delivered to the condemning authority. As used herein, "material part" shall
mean any of the following:
(a) Any part of the Baseball Facility that, in the reasonable
determination of the Operator, would cause the Operator to become unable to make
use of the Baseball Facility for its intended operations or to experience a
material loss of revenue (specifically including, without limitation, a
reduction by twenty percent (20%) or more in the number of seats available in
the Ballpark or loss of any material portion of the concourse areas);
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(b) Any part of the area between the Baseball Facility and a
public street or highway, Condemnation of which would cause the Operator to
become unable to provide sufficient access to the Baseball Facility; or
(c) Any portion of the Gateway Common Areas the loss of which
results in fewer than 1,500 parking spaces being available on the same terms and
conditions as the On-Site Parking to the Lessee and the Operator of equal
quality and no greater distance from the Baseball Facility than the On-Site
Parking.
PROVIDED, HOWEVER, that the Operator may elect in its sole discretion not to
treat any of the foregoing as a "material part" of the Baseball Facility, in
which event this Agreement shall not terminate. If this Agreement terminates
pursuant to the provisions of this Section 23.1, all rights, obligations and
liabilities of the parties hereto shall end as of the effective date of such
termination, without prejudice to any rights which have accrued prior to such
termination.
23.2 ALLOCATION OF AWARD. The amount of any award for or on
account of any Condemnation shall be first used to pay the principal, interest
and redemption premiums, if any, on the Stadium Revenue Bonds, and the remaining
proceeds shall be shared equitably between Gateway and the Operator. The
Operator shall have the right to be represented by counsel of its choosing in
any Condemnation proceedings.
23.3 PERFORMANCE OF WORK. If there shall be a Condemnation and
this Agreement shall not terminate as a result thereof, Gateway shall be
required to perform any and all work necessary to restore the Baseball Facility
to a complete architectural unit suitable for the Operator's use in as
expeditious a manner as possible.
23.4 TEMPORARY TAKING. This Agreement shall not terminate by
reason of a temporary taking of the Baseball Facility or any portion thereof for
public use, except as provided in this Section 23.4. In the event of such a
temporary taking, the rights and obligations of the parties under this Agreement
shall continue in full force and effect, except that:
(a) any award for such temporary taking shall be
governed by the provisions of Section 23.2 hereof;
(b) upon the termination of such temporary taking, Gateway
shall use its reasonable efforts to restore the Baseball Facility to a state
equivalent to that which the Baseball Facility was in immediately prior to such
temporary taking; and
(c) notwithstanding the foregoing, the Operator shall have the
right to terminate this Agreement as of the end of any Season if the remaining
period of such temporary taking will be
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for a period of more than two (2) Seasons following the date of the termination,
as evidenced by the issuance of any written statement by a duly authorized
official of the condemning authority to the effect that such temporary taking
will be for such period of time.
ARTICLE XXIV
------------
TERMINATION BY OPERATOR OR GATEWAY
In the event that the sum of: (a) Ballpark Expenses, (b) net
debt service on the Stadium Revenue Bonds, (c) Gateway's Scoreboard Advertising
Share, and (d) Gateway's share of Net Special Event Revenue exceed Ballpark
Revenues for any twelve (12) month period ending October 31 (any such exceeds
being referred to herein as an "Operating Deficit"), the Operator may elect, in
its sole discretion, to advance funds to cover any such Operating Deficit. The
Operator shall deliver written notice to Gateway of such election within ten
(10) Business Days after the expiration of such twelve (12) month period. In the
event that the Operator elects not to advance funds to cover any Operating
Deficit, either the Operator or Gateway may terminate this Agreement by giving
the other party ninety (90) days' notice of such party's election to do so, in
which event this Agreement shall terminate upon the expiration of such ninety
(90) day period, unless reinstated as hereinafter provided. During such ninety
(90) day period, Gateway and the Operator shall negotiate to restructure the
terms of this Agreement. In the event that the Operator and Gateway succeed in
restructuring the terms of this Agreement during such ninety (90) day period,
the parties shall execute an amendment to this Agreement reflecting such
restructured terms and the Operator shall continue to operate and manage the
Baseball Facility in accordance with this Agreement as so amended. In the event
a restructuring has not occurred at the end of such ninety (90) day period, this
Agreement shall terminate and Gateway or its assignee shall have the sole and
exclusive right to operate and manage the Baseball Facility in the same manner
and at the same level of quality and service as required hereunder. In any
event, termination of this Agreement shall not in any way disturb or affect the
Lessee's obligations or rights under the Lease Agreement or the Ground Lease,
provided Gateway performs its obligations to operate the Baseball Facility in
accordance herewith, unless such performance is waived or permitted to be
modified by the Lessee. In the event of a termination of this Agreement pursuant
to this Article XXIV, all contracts relating to the operation and management of
the Baseball Facility shall be fully assigned to and assumed by Gateway as the
Operator of the Baseball Facility without recourse to the Operator.
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ARTICLE XXV
-----------
CONDITIONS
25.1 PRECONDITIONS TO OPERATOR'S OBLIGATIONS. The Operator's
obligations to perform its duties hereunder and to make any payments to Gateway
or assume any other obligations pursuant to the terms of this Agreement are
expressly conditioned upon the satisfaction of each of the conditions precedent
on or before the dates set forth in this Article XXV (the "Deadline Dates")
unless waived in writing by the Operator. In the event any of the conditions
precedent set forth in this Article XXV is not satisfied by the applicable
Deadline Date, the Operator may elect to (i) waive the condition, (ii) extend
the Deadline Date on which such condition must be satisfied, or (iii) terminate
this Agreement upon thirty (30) days' prior written notice to Gateway. The
Operator shall notify Gateway of the Operator's election within thirty (30) days
after the Deadline Date. Failure of the Operator to notify Gateway shall be
deemed to be an election by the Operator to waive such condition.
25.2 PREMIUM SEATING. On or before January 15, 1992, there
shall be sufficient Premium Seating licensed or firmly committed to be licensed
to satisfy the requirements of the Financing Arrangements for the design and
construction of the Improvements and to satisfy the requirements of the
Operator.
25.3 SECURITY COMMITMENT. On or before July 31, 1991, the City
shall have committed to provide the police protection and traffic control
personnel for all events at the Baseball Facility as provided for in Section
14.1 hereof.
25.4 FINANCING ARRANGEMENTS. On or before January 15, 1992,
all of the Financing Arrangements necessary for the design and construction of
Gateway's Work and the operations of the Baseball Facility shall be in place and
all conditions precedent to release the escrow of all proceeds of the Bonds
shall have been satisfied.
25.5 NEW LEASE AND MANAGEMENT NEGOTIATIONS COMMITMENT. On or
before July 31, 1991, the Lessee and the Operator shall have received assurances
satisfactory to the Lessee and the Operator from the City and the County that
such entities shall, at least two (2) years prior to the expiration of this
Agreement and the Lease Agreement, commence discussions with the Lessee and the
Operator regarding the terms on which those entities would be prepared to enter
into new agreements as provided in Section 4.2 of the Ground Lease; PROVIDED,
HOWEVER, that no such renewal shall be executed or effective prior to the date
following the date on which the Bonds are discharged at their maturity, or in
the event of a defeasance of the Bonds by the City prior to the ninety-first
(91st) day after such defeasance.
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25.6 CONDITION TO GATEWAY'S OBLIGATIONS.
(a) Gateway's obligation to continue to perform its duties and
obligations hereunder is expressly conditioned upon the receipt of commitments
for Premium Seating Licenses for Prepaid Premium Seating sufficient to yield by
February 1, 1994, taking into account all investment earnings projected to be
earned thereon, Prepaid Premium Seating Revenue of at least $20,000,000.
(b) Gateway's obligation to continue its duties and
obligations hereunder is expressly conditioned upon the receipt of a commitment
for or an agreement to issue a post escrow letter of credit or other substitute
Financing Arrangement relative to the Stadium Revenue Bonds on terms and
conditions consistent with the terms of this Agreement, including but not
limited to Article VI, and the Lease Agreement; provided that Gateway shall
accept any commitment acceptable to Operator and Lessee if the terms and
conditions of such commitment do not impose additional material obligations of a
nature not otherwise contemplated hereunder or the Lease Agreement.
(c) In the event either or both of the preceding conditions
have not been satisfied by January 15, 1992, Gateway may elect to (i) waive the
condition, or (ii) extend such date on which such condition must be satisfied.
Gateway shall notify the Operator of Gateway's election on or before February
15, 1992. Failure of Gateway to notify the Operator shall be deemed to be an
election by Gateway to waive such condition. In the event Gateway elects to
terminate this Agreement as provided in this Section 25.6, Operator will be
entitled to share the reimbursements included in Section 22.6 of the Lease
Agreement.
ARTICLE XXVI
------------
REPRESENTATIONS BY OPERATOR
The Operator represents and warrants as follows, as of the
date hereof and at all times from and after the date hereof until the expiration
or termination of this Agreement:
26.1 VALID EXISTENCE. Operator is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Ohio.
26.2 POWER; NO LIMITATION ON ABILITY TO PERFORM. The Operator
has full power and authority to execute and deliver this Agreement and to carry
out and perform all of the terms and provisions of this Agreement, and all
transactions contemplated hereby, to the extent required to be carried out or
performed by the Operator. Subject to satisfaction of the requirements of
Article XXXI hereof, (a) neither the Operator's articles of incorporation or
code of regulations, nor any rule, policy,
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constitution, bylaw or other agreement of the American League or Major League
Baseball, nor any other agreement, law or other rule in any way prohibits,
limits or otherwise affects the right or power of the Operator to enter into and
perform all of the terms and provisions of this Agreement and each document,
agreement and instrument executed and to be executed by the Operator in
connection herewith, and all transactions contemplated hereby and thereby, and
(b) neither the Operator nor any of its officers, directors or any of their
personal or legal representatives are party to or bound by any contract,
agreement, indenture, trust agreement, note, obligation or other instrument
which could prohibit, limit or otherwise affect the same. Except for the
approval required by Article XXXI hereof, no consent, authorization or approval
of, or other action by, and no notice to or filing with, any governmental
authority, regulatory body or any other person is required for the due
execution, delivery and performance by the Operator of this Agreement or any
other agreement, document or instrument executed and delivered by the Operator
in connection herewith, or any of the transactions contemplated hereby or
thereby.
26.3 VALID EXECUTION. The execution and delivery of this
Agreement by the Operator has been duly and validly authorized by all necessary
action. This Agreement and all other agreements, documents and instruments
executed and delivered by the Operator in connection herewith are, and each
other agreement, document or instrument to be executed and delivered by the
Operator in connection herewith when executed and delivered will be legal, valid
and binding obligations of the Operator, enforceable against the Operator in
accordance with their respective terms.
26.4 DEFAULTS. The execution, delivery and performance of this
Agreement and each agreement, document and instrument executed and delivered and
to be executed and delivered by the Operator in connection herewith (a) do not
and will not violate or result in a violation of, contravene or conflict with,
or constitute a default: under (i) any agreement, document or instrument to
which the Operator is a party or by which the Operator's assets may be bound or
affected, (ii) any law, statute, ordinance or regulation applicable to the
Operator or (iii) the articles of incorporation or code of regulations of the
Operator, and (b) do not and will not result in the creation or imposition of
any lien or other encumbrance upon the assets of the Operator.
26.5 COMPLIANCE WITH LAWS. The Operator shall comply, at all
times, with all laws and regulations applicable to its use and occupancy of the
Baseball Facility in accordance with the terms of this Agreement, and shall
obtain licenses and permits (other than building permits and certificates of
occupancy in connection with the construction thereof) necessary in connection
therewith at its sole cost and expense.
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ARTICLE XXVII
-------------
REPRESENTATIONS BY GATEWAY
Gateway represents and warrants as follows, as of the date
hereof and at all times from and after the date hereof until the expiration or
termination of this Agreement:
27.1 VALID EXISTENCE. Gateway is a nonprofit corporation, duly
organized, validly existing and in good standing under the laws of the State of
Ohio. Gateway has full corporate power to own its property and conduct its
business as presently conducted.
27.2 POWER; NO LIMITATION ON ABILITY TO PERFORM. Gateway has
the power and authority to execute and deliver this Agreement and to carry out
and perform all of the terms and provisions of this Agreement, and all
transactions contemplated hereby, to the extent required to be carried out or
performed by Gateway. Neither Gateway's articles of incorporation or code of
regulations, nor any other agreement, law or other rule in any way prohibits,
limits or otherwise affects the right or power of Gateway to enter into and
perform all of the terms and provisions of this Agreement and each document,
agreement and instrument executed and to be executed by Gateway in connection
herewith, and all transactions contemplated hereby and thereby, and neither
Gateway nor any of its officers, directors or any of their personal or legal
representatives are party to or bound by any contract, agreement, indenture,
trust agreement, note, obligation or other instrument which could prohibit,
limit or otherwise affect the same. No consent, authorization or approval of, or
other action by, and no notice to or filing with, any governmental authority,
regulatory body or any other person is required for the due execution, delivery
and performance by Gateway of this Agreement or any other agreement, document or
instrument executed and delivered by Gateway in connection herewith, or any of
the transactions contemplated hereby or thereby.
27.3 VALID EXECUTION. The execution and delivery of this
Agreement by Gateway has been duly and validly authorized by all necessary
action. This Agreement and all other agreements, documents and instruments
executed and delivered by Gateway in connection herewith are, and each other
agreement, document or instrument to be executed and delivered by Gateway in
connection herewith when executed and delivered will be, legal, valid and
binding obligations of Gateway, enforceable against Gateway in accordance with
their respective terms.
27.4 DEFAULTS. The execution, delivery and performance of this
Agreement and each agreement, document and instrument executed and delivered and
to be executed and delivered by Gateway in connection herewith (a) do not and
will not violate or result in a violation of, contravene or conflict with, or
constitute a
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default under: (i) any agreement, document or instrument to which Gateway is a
party or by which Gateway's assets may be bound or affected, (ii) any law,
statute, ordinance or regulation applicable to Gateway, or (iii) the articles of
incorporation or code of regulations of Gateway; and (b) do not and will not
result in the creation or imposition of any lien or other encumbrance upon the
assets of Gateway.
27.5 COMPLIANCE WITH LAWS. Gateway shall comply, at all times,
with all laws and regulations applicable to its construction and use of the
Baseball Facility in accordance with the terms of this Agreement, and shall
obtain licenses and permits, including, but not limited to, all building permits
and certificates of occupancy in connection with the construction thereof,
necessary in connection therewith at its sole cost and expense.
ARTICLE XXVIII
--------------
MISCELLANEOUS
28.1 FORCE MAJEURE. Except as otherwise herein expressly
provided, if either party shall be delayed or hindered in, or prevented from,
the performance of any covenant or obligation hereunder, other than one for the
payment of money, as a result of any Force Majeure, and, provided, that the
party delayed, hindered or prevented from performing notifies the other party
not later than ten (10) Business Days after a Reporting Period of any such
delay, hindrance or prevention occurring during the Reporting Period at issue,
then the performance of such covenant or obligation, other than one for the
payment of money, shall be excused for the period of such delay, hindrance or
prevention and the period for the performance of such covenant or obligation
shall be extended by the number of days equivalent to the number of days of the
impact of such delay, hindrance or prevention. Failure to so provide the
Reporting Period notice as to a delay commencing during the Reporting Period at
issue will result in waivers of both excuse in performance and extension of time
to perform under this Section 28.1 with respect to any delay within that
Reporting Period.
28.2 AMENDMENT; WAIVER. No alteration, amendment or
modification hereof shall be valid unless executed by an instrument in writing
by the parties hereto with the same formality as this Agreement. The failure of
the Operator or Gateway to insist in any one or more instances upon the strict
performance of any of the covenants, agreements, terms, provisions or conditions
of this Agreement or to exercise any election herein contained shall not be
construed as a waiver or relinquishment for the future of such covenant,
agreement, term, provision, condition, election or option, but the same shall
continue and remain in full force and effect. No waiver by the Operator or
Gateway of any covenant, agreement, term, provision or condition of this
Agreement shall be
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deemed to have been made unless expressed in writing and signed by an
appropriate official on behalf of Gateway or the Operator. The payment by either
party of sums due and payable hereunder, with knowledge of the breach of any
covenant, agreement, term, provisions or condition herein maintained, shall not
be deemed a waiver of such breach.
28.3 CONSENT. Unless otherwise specifically provided herein,
no consent or approval by the Operator or Gateway permitted or required under
the terms of this Agreement shall be valid or be of any validity whatsoever
unless the same shall be in writing, signed by the party by or on whose behalf
such consent is given.
28.4 SEVERABILITY. If any Article, Section, Subsection, term
or provision of this Agreement or the application thereof to any party or
circumstance shall, to any extent, be invalid or unenforceable, the remainder of
the Article, Section, Subsection, term or provision of this Agreement or the
application of same to parties or circumstances other than those to which it is
held invalid or unenforceable shall not be affected thereby and each remaining
Article, Section, Subsection, term or provision of this Agreement shall be valid
and enforceable to the fullest extent permitted by law.
28.5 COVENANT OF QUIET ENJOYMENT. Gateway covenants that if,
and so long as, the Operator keeps and performs each and every covenant,
agreement, term, provision and condition of this Agreement on the part and on
behalf of the Operator to be kept and performed, the Operator shall quietly
enjoy its rights under this Agreement without hindrance or molestation by
Gateway or by any other person lawfully claiming the same by, through or under
Gateway, subject to the covenants, agreements, terms, provisions and conditions
of this Agreement.
28.6 PRORATIONS. Any apportionment or prorations related to
the use of the Baseball Facility during a Season including but not limited to,
Scoreboard Advertising and the Annual Capital Repair Fund Deposit shall be
computed on the basis of the length of the Season, otherwise any apportionment
or prorations to be made under this Agreement shall be computed on the basis of
a year containing three hundred sixty-five (365) days, consisting of twelve (12)
months of the actual number of days in each.
28.7 TERMS. Unless the context clearly requires otherwise, the
singular includes the plural, and vice versa, and the masculine, feminine and
neuter adjectives and pronouns include one another.
28.8 CAPTIONS. The captions of Articles and Sections are for
convenient reference only and shall not be deemed to limit, construe, affect,
modify or alter the meaning of such Articles or Sections.
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28.9 BINDING EFFECT. Each of the provisions of this Agreement
shall extend to and shall, as the case may require, bind or inure to the benefit
not only of Gateway and of the Operator, but also of their respective permitted
successors and assigns pursuant to Article XXII and any other provision hereof
relating to assignment of rights hereunder.
28.10 AGREEMENT CONTAINS ALL TERMS. All of the
representations, agreements, understandings and obligations of the parties are
contained herein and in the Exhibits attached hereto. This Agreement shall be
deemed to supersede the Memorandum and all other documents, writings, letters,
and agreements executed in connection therewith.
28.11 NOTICES. All notices, demands, consents, approvals,
statements, requests and invoices to be given under this Agreement shall be in
writing, signed by the party or officer, agent or attorney of the party giving
the notice, and shall be deemed to have been effective upon delivery if served
personally, or upon the third day from and including the day of posting if
deposited in the United States mail, postage prepaid, registered or certified
mail, return receipt requested, addressed as follows:
For Gateway Gateway Economic Development
Corporation of Greater
Cleveland
402 Terminal Tower
Cleveland, Ohio 44113
Attention: Executive Director
With a copy to: Climaco, Climaco, Seminatore,
Lefkowitz & Garofoli Co. L.P.A.
The Halle Building, Suite 900
1228 Euclid Avenue
Cleveland, Ohio 44115
Attention: Anthony J. Garofoli, Esq.
With a copy to: Calfee, Halter & Griswold
1800 Society Building
Cleveland, Ohio 44114
Attention: Thomas E. Wagner, Esq.
For the Operator: Ballpark Management Company
Cleveland Stadium
Cleveland, Ohio 44114
Attention: General Manager
With a copy to: Richard E. Jacobs
President
25425 Center Ridge Road
Westlake, Ohio 44145
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With a copy to: Baker & Hostetler
3200 National City Center
Cleveland, Ohio 44114
Attention: Gary L. Bryenton, Esq.
Either party may from time to time by written notice given to the other pursuant
to the terms of this Section 28.11 change the address to which notices shall be
sent.
28.12 APPLICABLE LAW. This Agreement has been prepared in the
State of Ohio and shall be governed in all respects by the laws of the State of
Ohio.
28.13 CROSS REFERENCES. Any reference in this Agreement to a
Section, Subsection, Article or Exhibit is a reference to a Section, Subsection,
Article or Exhibit, as appropriate, of this Agreement, unless otherwise
expressly indicated.
28.14 REPRESENTATIVES. The Operator's representative for
implementation of the terms of this Agreement shall be Richard E. Jacobs, or
such individual or individuals designated, in writing, by Richard E. Jacobs to
act for the Operator on certain specified matters ("Operator's Representative").
Gateway's representative for implementation of the terms of this Agreement shall
be the Executive Director ("Gateway's Representative"). Either party may
substitute representatives by notice to the other party delivered in accordance
with Section 28.11.
28.15 EFFECTIVE DATE. Notwithstanding that the Term shall
commence on the Completion Date, this Agreement shall be a legally binding
agreement, in full force and effect, as of the date set forth in the first
paragraph of this Agreement.
28.16 ANTIDISCRIMINATION CLAUSE. The Operator shall not
discriminate on the basis of race, color, political or religious opinion or
affiliation, creed, age, physical or mental handicap, sex, marital status,
ancestry, national origin or sexual preference/orientation. This shall apply to
all organizations which receive permission for the use of all or any portion of
the Baseball Facility, either in writing or verbally, from the Operator and
Gateway or by applying for a permit or receiving permission in any other way
from the Operator and Gateway. Gateway and the Operator shall comply with all
applicable state, local and federal laws, rules, regulations, executive orders
and agreements pertaining to discrimination in employment, unlawful employment
practices and affirmative action. The Operator shall use reasonable efforts to
encourage and promote opportunities for minorities and women in its operations
at the Baseball Facility. The Operator is an equal opportunity employer.
28.17 ACCORD AND SATISFACTION. Payment by any party, or
receipt or acceptance by a receiving party, of any payment due hereunder in an
amount less than the amount required to be paid
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hereunder shall not be deemed an accord and satisfaction, or a waiver by the
receiving party of its right to receive and recover the full amount of such
payment due hereunder, notwithstanding any statement to the contrary on any
check or payment or on any letter accompanying such check or payment. The
receiving party may accept such check or payment without prejudice to the
receiving party's right to recover the balance of such payment due hereunder or
to pursue any other legal or equitable remedy provided in this Agreement.
28.18 FURTHER ASSURANCES. The Operator and Gateway shall
execute, acknowledge and deliver, after the date hereof, without additional
consideration, such further assurances, instruments and documents, and shall
take such further actions, as Gateway or the Operator shall reasonably request
of the other in order to fulfill the intent of this Agreement and the
transactions contemplated thereby.
28.19 JOINT PROMOTION OF BASEBALL. During the Term of this
Agreement, Gateway and the Operator shall at all times use their best efforts to
promote public attendance at the Team's home baseball games at the Baseball
Facility.
28.20 INDEPENDENT CONTRACTOR RELATIONSHIP. Nothing contained
in this Agreement shall be deemed or construed by the parties hereto or by any
third party to create the relationship of principal and agent, partnership,
joint venture or any association between Gateway and the Operator, it being
expressly understood and agreed that neither the method of computation of Fees
nor any act of the parties hereto shall be deemed to create any relationship
between Gateway and the Operator other than an independent contractor
relationship. No mechanics', materialmen's or laborers' liens or other liens of
any character whatsoever created or suffered by the Operator shall in any way,
or to any extent, affect, attach or apply to the interest or rights of Gateway
hereunder or its rights or interest in any of the Baseball Facility or attach to
its title to or rights in the Baseball Facility unless such lien is related to
work, services or goods either: (i) requested by Gateway, or (ii) required to be
performed or provided by Gateway pursuant to this Agreement.
28.21 NO THIRD PARTY BENEFICIARY. The provisions of this
Agreement are for the exclusive benefit of the parties hereto and not for the
benefit of any third person, nor shall this Agreement be deemed to have
conferred any rights, express or implied, upon any third person unless otherwise
expressly provided for herein.
28.22 CONFORMING AMENDMENTS. The parties acknowledge that this
Agreement will be amended to conform to any approved Financing Arrangements
entered into from and after the date of this Agreement with the Bank, which
amendments shall be subject to the approval of the parties hereto, which
approval shall not be unreasonably withheld.
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28.23 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
ARTICLE XXIX
------------
GATEWAY COMMON AREA EASEMENT
AND MAINTENANCE AGREEMENT
The Operator, Gateway and the Lessee have entered into the
Gateway CAM Agreement. Gateway shall use its best efforts to cause Gateway's
other lessees and all other operators or managers to enter into the Gateway CAM
Agreement.
ARTICLE XXX
-----------
LEGAL OPINIONS
30.1 OPERATOR'S LEGAL OPINION. Upon execution of this
Agreement, the Operator shall deliver to Gateway the favorable opinion of the
Operator's counsel in the form attached hereto as Exhibit A and made a part
hereof.
30.2 GATEWAY'S LEGAL OPINION. Upon execution of this
Agreement, Gateway shall deliver to the Operator the favorable opinion of
Gateway's counsel in the form attached hereto as Exhibit B and made a part
hereof.
ARTICLE XXXI
------------
LEAGUE APPROVAL
This Agreement shall be null and void, and of no further force
or effect, if within sixty (60) days after execution by Gateway and the
Operator, this Agreement has not been approved by the Commissioner of Baseball
and the President of the American
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League. After execution hereof by Gateway and the Operator, the
Operator shall immediately request such approval.
IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement as of the day and year first above written.
Gateway:
GATEWAY ECONOMIC DEVELOPMENT
CORPORATION OF GREATER CLEVELAND,
an Ohio nonprofit corporation
By: /s/ Pat Parker
-----------------------------
Its: Chairman
-----------------------------
Operator:
BALLPARK MANAGEMENT COMPANY, an Ohio
corporation
By: /s/ Gary L. Bryenton
------------------------------
Gary L. Bryenton
Its: Secretary
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ACKNOWLEDGMENT BY LESSEE
------------------------
Lessee joins in the execution of this Agreement for the
purpose of acknowledging and approving the terms hereof and agreeing to the
Operator's rights to retain and receive the compensation provided for herein. In
consideration of the Lessee's execution hereof Gateway and the Operator hereby
agree that this Agreement shall be, in all respects, subject to the terms and
conditions of the Lease Agreement, the Ground Lease and the Gateway CAM
Agreement; including, without limitation, Sections 8.5 and 7.5 of the Lease
Agreement and the Ground Lease, respectively.
Lessee:
CLEVELAND INDIANS BASEBALL COMPANY
LIMITED PARTNERSHIP, an Ohio
limited partnership
By: Cleveland Baseball Corporation,
an Ohio corporation,
its sole general partner
By: /s/ Martin J. Cleary
---------------------------------
Martin J. Cleary
Its: Vice President
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FIRST AMENDMENT TO MANAGEMENT AGREEMENT
---------------------------------------
THIS FIRST AMENDMENT TO MANAGEMENT AGREEMENT ("Agreement") is made as
of this 4th day of December, 1992 by and between GATEWAY ECONOMIC DEVELOPMENT
CORPORATION OF GREATER CLEVELAND, a non-profit corporation organized under the
laws of the State of Ohio (hereinafter referred to as "Gateway") and BALLPARK
MANAGEMENT COMPANY, an Ohio corporation (hereinafter referred to as "the
Operator").
RECITALS
A. Gateway and Operator have previously executed a Management Agreement
dated as of July 3, 1991 (hereinafter referred to as the "Management Agreement")
pursuant to which Gateway has granted to the Operator certain rights and
responsibilities with respect to the Baseball Facility, as defined therein.
B. Gateway and the Operator desire to clarify and restate their
respective rights and responsibilities with regard to the Baseball Facility.
C. Gateway and the Operator have each agreed to certain amendments and
modifications to the Management Agreement upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, and for other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree to the
following modifications to the Management Agreement.
SECTION 1. AMENDMENTS TO ARTICLE I - DEFINITIONS.
(a) The definitions of the terms "Bank," "Net Debt Service on Stadium
Revenue Bonds" and "Premium Seating Debt Service Contribution" as
set forth in Section 1.1 of the Management Agreement are hereby
deleted in their entirety and the following definitions are
inserted in lieu thereof:
"BANK" shall mean Bank One, Cleveland, NA, Agent, its successors
and assigns, or any substitute letter of credit bank pursuant to
the documents relating to and evidencing the Stadium Revenue
Bonds.
"NET DEBT SERVICE ON THE STADIUM REVENUE BONDS" shall mean the
debt service (including principal and interest) and all other
charges due and payable on the Stadium Revenue Bonds pursuant to
the Stadium Indenture and/or the Stadium Reimbursement Agreement
(including any redemptions of the Stadium Revenue Bonds in
accordance with the Stadium Indenture and the Required
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Redemptions as defined in the Stadium Reimbursement Agreement, all
Advance Obligations (as defined in the Stadium Reimbursement
Agreement) and all amounts due the Bank pursuant to Sections
2.3(b) through 2.3(d), 2.10 and 2.11 of the Stadium Reimbursement
Agreement and excluding any other Reimbursement Obligations) in
any Premium Seating Year LESS the Required Reserve (as defined in
the Stadium Indenture) and any earnings thereon which are credited
to and utilized in accordance with the Principal Account and/or
the Interest Account (as such terms are defined in the Stadium
Indenture) pursuant to Section 4.1(c) of the Stadium Indenture
during such Premium Seating Year.
"PREMIUM SEATING DEBT SERVICE CONTRIBUTIONS" shall mean the lesser
of:
(a) the sum of (i) all of the proceeds for any Premium Seating
Year from the sale of Private Suites (other than Prepaid
Private Suites) and (ii) all of the proceeds of the sale of
Club Seats (other than Prepaid Club Seats), in both cases
applicable to such Premium Seating Year and exclusive of
security deposits, if any;
(b) the sum of (i) the Net Debt Service on the Stadium Revenue
Bonds due and payable during such Premium Seating Year and
(ii) the Additional Required Redemptions (as defined in the
Stadium Reimbursement Agreement) for such Premium Seating
Year; or
(c) $2,950,000.
(b) The following new definitions are hereby inserted into Section 1.1 of
the Management Agreement:
"PREMIUM SEATING INTERCREDITOR AGREEMENT" shall mean that certain Premium
Seating Revenue Intercreditor and Bailment Agreement dated as of December
4, 1992 by and among Gateway, the Bank, the Stadium Trustee, the Operator
and Bank One Ohio Trust Company, NA.
"PREMIUM SEATING YEAR" shall mean each period of twelve (12) consecutive
calendar months during the Term, with the first Premium Seating Year
commencing on the first day of the
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September next succeeding the Completion Date and with successive Premium
Seating Years commencing on successive anniversaries of the first day of
the first Premium Seating Year. A "Partial Premium Seating Year" means if
the Completion Date is a date other than September 1, then the period
from the Completion Date to the first day of the first Premium Seating
Year. All terms and conditions herein shall apply to the same to a
Partial Premium Seating year as to a Premium Seating Year, PROVIDED,
HOWEVER, that all payments and other financial obligations shall be
apportioned or prorated pursuant to Section 28.6 hereof.
"REIMBURSEMENT OBLIGATIONS" means any and all obligations of Gateway to
the Bank pursuant to any Bank Document (as defined in the Stadium
Reimbursement Agreement), including, without limitation, the payment of
all Payment Obligations (as defined in the Stadium Reimbursement
Agreement), the funding and maintenance of the Bond Reserve Fund (as
defined in the Stadium Indenture) and all reserve funds pursuant to the
Reserves Agreement (as defined in the Stadium Reimbursement Agreement),
the payment of all fees necessary to comply with Section 3.4 of the
Stadium Reimbursement Agreement (interest rate limitation), and the
indemnification of the Bank pursuant to the Environmental Agreement (as
defined in the Stadium Reimbursement Agreement).
"STADIUM INDENTURE" means that certain Trust Indenture, dated as of
December 15, 1990, between the Corporation and the Stadium Trustee with
respect to the Stadium Bonds, as the same shall be amended from time to
time.
"STADIUM REIMBURSEMENT AGREEMENT" shall mean the Stadium Reimbursement
Agreement dated as of December 4, 1992 between Gateway and the Bank with
respect to the Stadium Revenue Bonds.
"STADIUM TRUSTEE" shall mean The Huntington National Bank, Cleveland,
Ohio, as trustee of the Stadium Revenue Bonds pursuant to the Stadium
Indenture, its successors and assigns, and any successor trustee
appointed thereunder.
SECTION 2. AMENDMENT TO ARTICLE III - MANAGEMENT AND OPERATION BY THE
OPERATOR. Section 3.1 of the Management Agreement is hereby amended by inserting
the following after the phrase "shall be paid to Lessee" in the final sentence
of Section 3.1:
"and certain limited Premium Seating Revenues which shall be paid to the
Stadium Trustee and/or the Bank in accordance with Article VI hereof and
the Premium Seating Intercreditor Agreement)"
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75
SECTION 3. AMENDMENT TO ARTICLE VI - PREMIUM SEATING REVENUE ACCOUNT.
Section 6.2 of the Management Agreement is hereby deleted in its entirety. The
following new Section 6.2 and Section 6.3 shall be inserted into Article VI of
the Management Agreement.
6.2 Application of Funds.
--------------------
(a) On or after the Completion Date, the Premium Seating Depositary
shall distribute to Gateway, Prepaid Premium Seating Revenue in
an amount equal to the greater of (a) Twenty Million Dollars
($20,000,000); or (b) ten (10) times the weighted mean listed
annual sale price for Club Seats, multiplied by the actual number
of Prepaid Clubs sold on or before the Completion Date plus ten
(10) times the weighted mean listed annual sale price for Private
Suites (excluding, for purposes of computing this weighted mean,
any Private Suite with a listed annual sale price of less than
$30,000) multiplied by the actual number of Prepaid Private
Suites sold on or before the Completion Date plus the
proportionate share of investment income earned thereon.
Thereafter, the Premium Seating Depositary shall deposit any
remaining Prepaid Premium Seating Revenue and investment income
into the Premium Seating Revenue Account. Any amounts distributed
to Gateway under this Subsection 6.2(a) shall, upon the written
direction of Gateway and the written approval of the Bank, be
deposited by the Premium Seating Depositary either directly into
the Completion Guaranty Accounts for the purposes described in
Section 4.9 of the Lease Agreement or used by the Premium Seating
Depositary to make any debt service payments on any Financing
Arrangement of which the proceeds were used or will be used for
the completion of Gateway's Work.
(b) The Premium Seating Debt Service Contributions for each Premium
Seating Year shall be distributed to the Stadium Trustee and/or
the Bank for payments made with respect to the Stadium Revenue
Bonds or certain of the Reimbursement Obligations pursuant to the
Stadium Indenture and the Stadium Reimbursement Agreement,
respectively, in accordance with the Premium Seating Intercreditor
Agreement, not to exceed, in the aggregate, the absolute maximum
amount of $2,950,000 in any one Premium Seating Year. Upon the
written request of the Stadium Trustee and/or the Bank as set
forth in the Premium Seating Intercreditor Agreement, the Premium
Seating Depositary shall distribute such funds to the Stadium
Trustee and/or the Bank for purposes in accordance with terms and
conditions of the Premium Seating Intercreditor Agreement.
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76
(c) Except for the permitted withdrawals as provided above in this
Section 6.2, all funds remaining in the Premium Seating Revenue
Account shall be paid by the Premium Seating Depositary to the
Operator and Gateway agrees that all remaining funds shall be paid
over to the Operator subject only, however, to the terms of the
Premium Seating Intercreditor Agreement.
(d) Except for the Premium Seating Revenue not to exceed the absolute
maximum amount of $2,950,000 in any one Premium Seating Year
payable in accordance with the terms of the Premium Seating
Intercreditor Agreement, no other Ballpark Revenues shall be
pledged or made available for any Financing Arrangement,
including, but not limited to, the Stadium Revenue Bond Financing
Arrangement, without the prior written consent of the Operator,
which consent may be withheld in the Opemtor's sole and absolute
discretion.
6.3 PREMIUM SEATING LICENSES. The Operator shall enter into all Premium
Seating Licenses on behalf of Gateway. The Operator acknowledges that the legal
title to Premium Seating Licenses and the Premium Seating Revenues shall remain
with Gateway at all times subject to the Premium Seating Intercreditor Agreement
and if the Premium Seating Intercreditor Agreement is no longer in effect, then
subject to Gateway's obligations to the Operator hereunder. Gateway shall have
the power and authority to pledge and grant only the security interest in the
Premium Seating Licenses and Premium Seating Revenues pursuant to the Premium
Seating Intercreditor Agreement and Gateway shall not make any other assignment
or pledge of Premium Seating Licenses or the Premium Seating Revenue of any kind
whatsoever. The Operator shall not assign the Premium Seating Licenses to any
Person other than a permitted assignee pursuant to Section 22.1 hereof. Upon a
lawful termination of this Agreement, the Operator or any permitted assignee
shall assign all the Premium Seating Licenses to Gateway and thereafter shall
have no interest in the Premium Seating Licenses or the Premium Seating Revenues
pursuant to this Agreement. Notwithstanding the foregoing, all Premium Seating
Revenues shall be subject to the terms of the Premium Seating Intercreditor
Agreement and the rights set forth in Section 6.2 hereof.
SECTION 4. REMAINDER OF MANAGEMENT AGREEMENT. Except as otherwise
provided herein, the terms, provisions and conditions of the Management
Agreement shall remain Unchanged.
SECTION 5. DEFINED TERMS. All capitalized terms not defined herein shall
have the same meaning as set forth in the Management Agreement.
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IN WITNESS WHEREOF, the parties have caused this First Amendment to
Management Agreement to be executed by their duly authorized representatives on
the date first set forth above.
GATEWAY ECONOMIC
DEVELOPMENT CORPORATION
OF GREATER CLEVELAND
By: /s/ Thomas Chema
------------------------------
Its: Executive Director
----------------------------
"GATEWAY"
BALLPARK MANAGEMENT
COMPANY
By: /s/ M. Cleary
-------------------------------
Its: Vice President
------------------------------
"OPERATOR"
78
EXECUTION COPY
SECOND AMENDMENT TO MANAGEMENT AGREEMENT
----------------------------------------
THIS SECOND AMENDMENT TO MANAGEMENT AGREEMENT ("Agreement") is made as
of this 16th day of December, 1993 by and between GATEWAY ECONOMIC DEVELOPMENT
CORPORATION OF GREATER CLEVELAND, a non-profit corporation organized under the
laws of the State of Ohio (hereinafter referred to as "Gateway") and BALLPARK
MANAGEMENT COMPANY, an Ohio corporation (hereinafter referred to as "the
Operator").
RECITALS
A. Gateway and Operator have previously executed a Management Agreement
dated as of July 3, 1991, as amended by a First Amendment to Management
Agreement, dated as of December 4, 1992 (hereinafter referred to as the
"Management Agreement"), pursuant to which Gateway has granted to the Operator
certain rights and responsibilities with respect to the Baseball Facility, as
defined therein.
B. Gateway and the Operator desire to clarify and restate their
respective rights and responsibilities with regard to the Baseball Facility.
C. Gateway and the Operator have each agreed to certain amendments and
modifications to the Management Agreement upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, and for other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree to the
following modifications to the Management Agreement, which shall amend and
restate in its entirety the First Amendment to Management Agreement.
Section 1. Amendments to Article I - Definitions.
(a) The definitions of the terms "Net Debt Service on Stadium
Revenue Bonds" and "Premium Seating Debt Service
Contributions" as set forth in Section 1.1 of the Management
Agreement are hereby deleted in their entirety and the
following definitions are inserted in lieu thereof:
"NET DEBT SERVICE ON THE STADIUM REVENUE BONDS" shall mean, in
any Premium Seating Year, the sum of (1) (a) the principal of
and interest on the Stadium Revenue Bonds (including any
mandatory sinking fund installment) due and payable within
that Premium Seating Year, (b) the fees and
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expenses of the Trustee, Bond Registrar, and any Paying Agent
and Authentication Agent due and payable by Gateway under the
Stadium Indenture as Additional Payments, (c) the amount
needed to restore the balance in the Bond Reserve Fund to the
Required Reserve, to the extent the deficiency therein
resulted from payment of principal of or interest on the
Stadium Revenue Bonds, and (d) the amount needed to reimburse
the County for a drawing under the County Guaranty, to the
extent the proceeds of such drawing were used to pay principal
of or interest on the Stadium Revenue Bonds or to restore
amounts drawn from the Bond Reserve Fund for that purpose less
(2) earnings credited to the Bond Fund and the Bond Reserve
Fund.
"PREMIUM SEATING DEBT SERVICE CONTRIBUTIONS" shall mean, in
any Premium Seating Year, the lesser of:
(a) Premium Seating Revenues for such Premium Seating
Year (exclusive of security deposits, if any;
(b) the Net Debt Service on the Stadium Revenue Bonds due
and payable during such Premium Seating Year; or
(c) $2,950,000.
(b) The definition of "Bank" is hereby deleted in its entirety.
(c) The following new definitions are hereby inserted into Section
1.1 of the Management Agreement:
"PREMIUM SEATING YEAR" shall mean each period of twelve (12)
consecutive calendar months during the Term, with the first
Premium Seating Year commencing on the first day of the
October next succeeding the Completion Date (as defined in the
Lease) and with successive Premium Seating Years commencing on
successive anniversaries of the first day of the first Premium
Seating Year. A "Partial Premium Seating Year" means if the
Completion Date is a date other than October 1, then the
period from the Completion Date to the first day of the first
Premium Seating Year. All terms and conditions herein shall
apply to the same to a Partial Premium Seating year as to a
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80
Premium Seating Year, PROVIDED, HOWEVER, that the Premium
Seating Debt Service Contributions for the Partial Premium
Seating Year shall not exceed the Net Debt Service on Stadium
Revenue Bonds less interest on the Stadium Revenue Bonds which
accrued thereon prior to the commencement of the Partial
Premium Seating Year.
"STADIUM INDENTURE," means the Amended and Restated Trust
Indenture, dated as of December 16, 1993 between the
Corporation and the Stadium Trustee with respect to the
Stadium Bonds, as the same shall be amended from time to time.
"STADIUM TRUSTEE," means The Huntington National Bank,
Cleveland, Ohio, as trustee of the Stadium Revenue Bonds
pursuant to the Stadium Indenture, its successors and assigns,
and any successor trustee appointed thereunder.
Section 2. Amendment to Article III - Management and Operation
by the Operator. Section 3.1 of the Management Agreement is hereby amended by
deleting the following words after the phrase "shall be paid to Lessee" in the
final sentence of Section 3.1:
"and certain limited Premium Seating Revenues which shall be
paid to the Stadium Trustee and/or the Bank in accordance with
Article VI hereof)"
and substituting the following words in lieu thereof:
"and certain limited Premium Seating Revenues which shall be
paid to the Stadium Trustee in accordance with Article VI
hereof"
Section 3. Amendment to Article VI - Premium Seating Revenue Account.
Sections 6.2 and 6.3 of the Management Agreement are hereby deleted in their
entirety. The following new Section 6.2 and Section 6.3 shall be inserted into
Article VI of the Management Agreement:
6.2 APPLICATION OF FUNDS.
(a) On or after the Completion Date, the Premium Seating
Depositary shall distribute to the Gateway, Prepaid Premium
Seating Revenue in an amount equal to the greater of (a)
Twenty Million Dollars ($20,000,000); or (b) ten (10) times
the weighted mean listed annual sale
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81
price for Club Seats, multiplied by the actual number of
Prepaid Club Seats sold on or before the Completion Date plus
ten (10) times the weighted mean listed annual sale price for
Private Suites (excluding, for purposes of computing this
weighted mean, any Private Suite with a listed annual sale
price of less than $30,000) multiplied by the actual number of
Prepaid Private Suites sold on or before the Completion Date
plus the proportionate share of investment income earned
thereon. Thereafter, the Premium Seating Depositary shall
transfer any remaining Prepaid Premium Seating Revenue and
investment income to the Trustee for deposit in the Revenue
Fund under the Stadium Indenture. Any amounts distributed to
Gateway under this Subsection 6.2(a) shall, upon the written
direction of Gateway, be deposited by the Premium Seating
Depositary either directly into the Completion Guaranty
Accounts for the purposes described in Section 4.9 of the
Lease Agreement or to make any debt service payments on any
Financing Arrangement of which the proceeds were used or will
be used for the completion of Gateway's Work.
(b) On the Completion Date, the Operator shall cause the Premium
Seating Depositary to transfer to the Stadium Trustee for
deposit in the Revenue Fund an amount equal to the Premium
Seating Revenue. From and after the Completion Date, the
Operator shall direct the Premium Seating Licensees to make
all payments under the Premium Seating Licenses (other than
with respect to the Prepaid Premium Seating Licenses) directly
to the Stadium Trustee for deposit in the Revenue Fund, and
shall promptly transfer to the Stadium Trustee for deposit in
the Revenue Fund any Premium Seating Revenues received by the
Operator from Premium Seating Licensees. Any and all Premium
Seating Revenue delivered to or received by the Stadium
Trustee shall be received and held by it as bailee, and the
Stadium Trustee is hereby appointed bailee by the Operator,
for the purpose of perfecting its lien on and security
interest in the Premium Seating Revenues, subject only to the
prior lien thereon of the Stadium Trustee to the extent of
Premium Seating Debt Service Contributions. Amounts in the
Revenue Fund are to be applied as provided in the Stadium
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Indenture, provided, however, that the Premium Seating
Revenues to be applied to the payment of Gateway's obligations
under the Stadium Indenture in any Premium Seating Year shall
not exceed, in the aggregate, an amount equal to the Premium
Seating Debt Service Contributions for that Premium Seating
Year. Gateway has directed the Stadium Trustee, in the Stadium
Indenture, to pay to the Operator, as a management fee
hereunder, the Premium Seating Revenues for each Premium
Seating Year net of the Premium Seating Debt Service
Contributions for each such Premium Seating Year.
(c) Except for the Premium Seating Debt Service Contributions
payable by the Operator hereunder in any one Premium Seating
Year, no other Ballpark Revenues shall be pledged or made
available for any Financing Arrangement, including, but not
limited to, the Stadium Revenue Bond Financing Arrangement,
without the prior written consent of the Operator, which
consent may be withheld in the Operator's sole and absolute
discretion.
(d) Gateway hereby grants to the Operator a lien on and security
interest in the Premium Seating Revenues, subject only to the
prior lien on and security interest therein granted by Gateway
to the Stadium Trustee under the Stadium Indenture, to the
extent of Premium Seating Debt Service Contributions.
6.3 PREMIUM SEATING LICENSES. The Operator shall enter into all Premium
Seating Licenses on behalf of Gateway. The Operator acknowledges that
the legal title to Premium Seating Licenses and the Premium Seating
Revenues shall remain with Gateway at all times subject to the pledge
of the Premium Seating Revenues and the right to collect and enforce
the collection of the Premium Seating Revenues under the Premium
Seating Licenses to the Stadium Trustee and the Operator pursuant to
the Stadium Indenture and hereunder, and if the Stadium Indenture is no
longer in effect, then subject to Gateway's obligations to the Operator
hereunder. Gateway shall have the power and authority to pledge and
grant only the security interest in the Premium Seating Licenses and
Premium Seating Revenues pursuant to the Stadium Indenture and to the
Operator as provided herein. Gateway shall not make any other
assignment or pledge of Premium Seating Licenses or the Premium Seating
Revenue of any kind whatsoever. The Operator shall not assign the
Premium Seating Licenses to
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any Person other than a permitted assignee pursuant to Section 22.1
hereof. Upon a lawful termination of this Agreement, the Operator or
any permitted assignee shall assign all the Premium Seating Licenses to
Gateway and thereafter shall have no interest in the Premium Seating
Licenses or the Premium Seating Revenues pursuant to this Agreement.
The Operator and Gateway shall not make or permit to occur any
amendment or modification to this Agreement or the form of Premium
Seating License attached as Exhibit C to the Stadium Indenture which
materially and adversely affects the Trustee or the Trustee's rights to
the Premium Seating Revenues, or in any way increases the amount or
alters the conditions of the County's obligations under the County
Guaranty (as defined in the Stadium Indenture), without the prior
written consent of the Trustee and the County, including, but not
limited to, the timing and terms of payment of Premium Seating Revenues
under the Premium Seating Licenses and hereunder, provided, however,
that no consent of the Trustee or the County to a change in the amount
payable by holders of the Premium Seating Licenses shall be required so
long as the amount charged thereunder in each Premium Seating Year, in
the aggregate, is not less than 125% of the principal of and interest
on the Stadium Bonds due and payable in each such Premium Seating Year.
Gateway, the County and the Trustee agree that the consent of the
Trustee and the County shall not be required with respect to any
amendment or modification to this Agreement or the form of Premium
Seating License which (a) increases the amount of fees payable
thereunder or (b) permits a prepayment of fees due thereunder by
deposit with the Stadium Trustee.
Section 4. Amendments to Article XXIV.
The next to last sentence in Article XXIV of the Management Agreement
is hereby amended to read as follows: "Except as specifically provided in
Section 13.5(d) of the Lease Agreement and Section 12.5(d) of the Ground Lease,
termination of this Agreement, pursuant to this Article XXIV, shall not in any
way disturb or affect the Lessee's obligations or rights under the Lease
Agreement or the Ground Lease, provided Gateway performs its obligations to
operate the Baseball Facility in accordance herewith, unless such performance is
waived or permitted to be modified by the Lessee."
Section 5. Amendments to Section 18.5.
The following new Section 18.5(d) is added to the Management Agreement:
"If the Lease Agreement or the Ground Lease or both are rejected or terminated
by Lessee or any debtor in possession, trustee or receiver acting in the place
of, or on behalf of, Lessee, in any proceeding under title 11 of the United
States Code or other similar law, so that Gateway no longer has the benefit of
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84
the Lease Agreement or the Ground Lease, and within sixty (60) days of such
rejection or termination, the Lease Agreement or the Ground Lease is not
reinstated for the balance of the then remaining terms on the same terms and
conditions, then this Management Agreement shall terminate."
Section 6. Remainder of Management Agreement. Except as
otherwise provided herein, the terms, provisions and conditions of
the Management Agreement shall remain unchanged.
Section 7. Defined Terms. All capitalized terms not defined
herein shall have the same meaning as set forth in the Management
Agreement or the Stadium Indenture.
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IN WITNESS WHEREOF, the parties have caused this Second Amendment to
Management Agreement to be executed by their duly authorized representatives on
the date first set forth above.
GATEWAY ECONOMIC
DEVELOPMENT CORPORATION
OF GREATER CLEVELAND
By: /s/ illegible
------------------------------
Its: Chief Financial Officer
------------------------------
"GATEWAY"
BALLPARK MANAGEMENT
COMPANY
By: /s/ Martin J. Cleary
------------------------------
Its: Martin J. Cleary, Vice President
------------------------------
"OPERATOR"
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