1
Exhibit 10.3
GROUND LEASE AGREEMENT
BY AND BETWEEN
GATEWAY ECONOMIC DEVELOPMENT
CORPORATION OF GREATER CLEVELAND
AND
CLEVELAND INDIANS BASEBALL COMPANY
LIMITED PARTNERSHIP
DATED AS OF JULY 3, 1991
2
TABLE OF CONTENTS
ARTICLE I DEFINITIONS................................................. 2
ARTICLE II LEASED PREMISES............................................. 11
ARTICLE III GATEWAY'S CONSTRUCTION OBLIGATIONS.......................... 11
ARTICLE IV TERM........................................................ 11
4.1 Term................................................... 11
4.2 Termination............................................ 11
ARTICLE V RENT........................................................ 12
ARTICLE VI ALTERATIONS BY THE LESSEE................................... 12
ARTICLE VII USE OF THE FIELD............................................ 13
7.1 Lessee's Use........................................... 13
7.2 Gateway's Use.......................................... 14
7.3 Operator's Use......................................... 14
7.4 Special Events......................................... 14
7.5 Lessee's Management Approval Rights.................... 15
ARTICLE VIII INSURANCE AND SUBROGATION................................... 16
8.1 Gateway's Insurance.................................... 16
8.2 Lessee's Insurance..................................... 16
8.3 Insurance Requirements................................. 17
8.4 Certificates........................................... 17
8.5 Waiver of Subrogation.................................. 17
ARTICLE IX MAINTENANCE OF AND REPAIRS TO THE BASEBALL FACILITY......... 18
9.1 Gateway Obligations.................................... 18
9.2 Maintenance and Repair Procedures...................... 18
9.3 Capital Repairs Fund................................... 18
9.4 Capital Repairs........................................ 19
9.5 Lessee's Self-Help..................................... 20
ARTICLE X REAL ESTATE AND PERSONAL PROPERTY TAXES..................... 20
ARTICLE XI RIGHT OF ENTRY AND INSPECTION............................... 21
ARTICLE XII DEFAULT AND REMEDIES........................................ 21
12.1 Default by Lessee...................................... 21
12.2 Gateway's Remedies..................................... 22
12.3 Default by Gateway..................................... 23
12.4 Lessee's Remedies...................................... 24
12.5 General Provisions..................................... 24
ARTICLE XIII SURRENDER OF THE FIELD...................................... 25
13.1 General................................................ 25
13.2 Alterations and Improvements........................... 25
13.3 Lessee's Property...................................... 26
3
Page
----
13.4 Abandoning Premises or Personal Property............... 26
ARTICLE XIV DAMAGE TO THE FIELD......................................... 26
ARTICLE XV INDEMNIFICATION............................................. 27
15.1 Lessee Indemnification................................. 27
15.2 Gateway Indemnification................................ 28
15.3 Procedure Regarding Indemnification.................... 28
15.4 Limitation............................................. 29
ARTICLE XVI ASSIGNMENT.................................................. 29
16.1 Assignment by Lessee................................... 29
16.2 Subletting............................................. 30
16.3 Assignment by Lessor................................... 30
16.4 Assignees and Subtenants............................... 30
ARTICLE XVII EMINENT DOMAIN.............................................. 30
17.1 Termination for Condemnation........................... 30
17.2 Allocation of Award.................................... 31
17.3 Performance of Work.................................... 31
17.4 Temporary Taking....................................... 31
ARTICLE XVIII UNTENANTABILITY............................................. 32
ARTICLE XIX CONDITIONS.................................................. 32
ARTICLE XX REPRESENTATIONS BY LESSEE................................... 33
20.1 Valid Existence........................................ 33
20.2 Power; No Limitation on Ability to Perform............. 33
20.3 Valid Execution........................................ 34
20.4 Defaults............................................... 34
20.5 Good Standing of Baseball Corporation.................. 34
20.6 Power of Baseball Corporation.......................... 34
20.7 Valid Execution by Baseball Corporation................ 34
20.8 Compliance with Laws................................... 35
20.9 Maintenance of Good Standing in League................. 35
ARTICLE XXI REPRESENTATIONS BY GATEWAY.................................. 35
21.1 Valid Existence........................................ 35
21.2 Power; No Limitation on Ability to Perform.............35
21.3 Valid Execution........................................ 35
21.4 Defaults............................................... 36
21.5 Compliance with Laws................................... 36
21.6 Title.................................................. 36
21.7 Three Party Agreement and Central Market Community
Development Plan....................................... 36
ARTICLE XXII SUBORDINATION, NONDISTURBANCE AND ATTORNMENT................ 36
ARTICLE XXIII ESTOPPEL CERTIFICATE BY LESSEE.............................. 37
4
Page
----
ARTICLE XXIV MISCELLANEOUS............................................... 38
24.1 Force Majeure......................................... 38
24.2 Amendment; Waiver..................................... 38
24.3 Consent............................................... 38
24.4 Severability.......................................... 39
24.5 Covenant of Quiet Enjoyment........................... 39
24.6 Recordation of Lease.................................. 39
24.7 Prorations............................................ 39
24.8 Terms................................................. 39
24.9 Captions.............................................. 39
24.10 Binding Effect........................................ 40
24.11 Agreement Contains All Terms.......................... 40
24.12 Only Landlord-Tenant Relationship..................... 40
24.13 Notices............................................... 40
24.14 Applicable Law........................................ 41
24.15 Cross References...................................... 41
24.16 Representatives....................................... 41
24.17 Effective Date........................................ 41
24.18 Antidiscrimination Clause............................. 42
24.19 Accord and Satisfaction............................... 42
24.20 No Merger............................................. 42
24.21 Further Assurances.................................... 42
24.22 Joint Promotion of Baseball........................... 42
24.23 Retained Revenues..................................... 43
24.24 No Third Party Beneficiary............................ 43
24.25 Conforming Amendments................................. 43
24.26 Counterparts.......................................... 43
ARTICLE XXV LEGAL OPINIONS.............................................. 43
25.1 Lessee's Legal Opinion................................ 43
25.2 Gateway's Legal Opinion............................... 43
ARTICLE XXVI LEAGUE APPROVAL............................................. 43
ARTICLE XXVII THREE PARTY AGREEMENT AND CENTRAL MARKET COMMUNITY
DEVELOPMENT PLAN............................................ 44
5
GROUND LEASE AGREEMENT
THIS GROUND LEASE 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 CLEVELAND
INDIANS BASEBALL COMPANY LIMITED PARTNERSHIP, an Ohio limited partnership
(hereinafter referred to as the "Lessee").
RECITALS:
A. Gateway intends to construct a baseball park with related
amenities (the "Ballpark") on a portion of the Central Market Square Site
located in the City of Cleveland, Ohio (the "City"), being more fully described
in the Lease Agreement (hereinafter defined).
B. The Lessee is the holder of the franchise for the City
issued by the American League of Professional Baseball Clubs (the "American
League") and is the owner of the Cleveland Indians professional baseball team
(the "Team").
C. Gateway and the Operator (hereinafter defined), shall
execute and deliver a Management Agreement (the "Management Agreement"),
pursuant to which the Operator shall be obligated to perform certain duties and
obtain certain rights with respect to the management, operation and maintenance
of the Baseball Facility.
D. Gateway and the Lessee shall execute and deliver 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).
E. Gateway desires to lease to the Lessee, and the Lessee is
desirous of leasing from Gateway, Gateway's fee interest in all of the real
property constituting the baseball playing field area of the Central Market
Square Site more fully described on Exhibit A attached hereto and made a part
hereof (the "Field"), together with all of the improvements to be constructed
thereon and all permanent improvements, additions, alterations, fixtures,
equipment and installations constructed, provided or added thereto by Gateway or
the Lessee at any time (the "Field Improvements").
NOW, THEREFORE, in consideration of the premises, the rents
reserved and the covenants and agreements contained herein, the parties do
hereby agree as follows:
6
ARTICLE I
---------
DEFINITIONS
As used in this Agreement and unless otherwise expressly
indicated, the following terms shall have the following meanings:
"ACTION" shall mean any demand, assertion, claim, action, or
proceeding, judicial or otherwise.
"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 Ground Lease Agreement.
"AMERICAN LEAGUE" shall have the meaning set forth in
Recital "B" hereof.
"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 Field Improvements in accordance
with the Final Plans, or such other amount as the Bank, the Lessee and Gateway
shall mutually agree to a lesser amount.
"BALLPARK" shall have the meaning set forth in Recital
"A" hereof.
"BALLPARK IMPROVEMENTS" shall have the meaning set forth
in the Lease Agreement.
"BALLPARK LAND" shall have the meaning set forth in the
Lease Agreement.
"BANK" shall mean The Fuji Bank, Limited, a Japanese banking
corporation, acting through its San Francisco Agency, its successors and
assigns, or any substitute letter of credit bank under the Bond documents.
-2-
7
"BASEBALL CORPORATION" shall mean Cleveland Baseball
Corporation, an Ohio corporation, the sole general partner of the Lessee.
"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.
"BONDS" 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 Management 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
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;
-3-
8
(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 Repairs" 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;
(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 Lessee 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
(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 9.3 hereof.
"CENTRAL MARKET COMMUNITY DEVELOPMENT PLAN" shall mean the
Central Market Community Development Plan approved by the Council of the City on
September 29, 1986, and amended on November 5, 1990 and June 17, 1991.
"CENTRAL MARKET SQUARE SITE" shall have the meaning set forth
in the Lease Agreement.
-4-
9
"CITY" shall have the meaning set forth in Recital "A"
hereof.
"COMPLETION DATE" shall mean the date of Substantial
Completion, unless otherwise specified herein.
"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 of the Management Agreement.
"COUNTY" shall mean Cuyahoga County, Ohio.
"DESIGN ARCHITECT" shall mean the architectural team for the
design of the Baseball Facility which is headed by the architectural firm of
Xxxxxxx, Obata and Kasabaum.
"EMERGENCY REPAIR" shall mean Capital Repairs that are
necessary to protect public health or safety or that, if performed promptly can,
in the Lessee'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 Lessee 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
-5-
10
play, as reasonably determined by the Lessee) prior to such Home Date and the
forty-eight (48) hours after such Home Date.
"FIELD" shall have the meaning set forth in Recital "E"
hereof. A legal description of the Field shall be attached hereto as Exhibit A
upon preparation of the same by Gateway's surveyor upon completion of Gateway's
Work.
"FIELD IMPROVEMENTS" shall have the meaning set forth in
Article II hereof.
"FINAL PLANS" shall have the meaning set forth in the
Lease Agreement.
"FINANCING ARRANGEMENTS" shall have the meaning set forth
in the Lease Agreement.
"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.
"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 Lessee and the Operator 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 12.3 hereof.
"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 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 Management Agreement.
"GATEWAY'S REPRESENTATIVE" shall have the meaning set
forth in Section 24.16 hereof.
-6-
11
"GATEWAY'S WORK" shall have the meaning set forth in the
Lease Agreement.
"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 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 provide 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
Lessee or Gateway, whichever is less.
"LEASE AGREEMENT" shall have the meaning set forth in
Recital "D" hereof.
"LEASE YEAR" shall mean each period of twelve (12) consecutive
calendar months during the Term, with the first Lease Year commencing on the
first day of the November next succeeding the Completion Date and with
successive Lease Years commencing on successive anniversaries of the first day
of the first Lease Year. "Lease Years" means more than one (1) Lease Year. A
"Partial Lease 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 Lease
Year. Unless otherwise expressly provided for herein, all terms and conditions
herein shall apply the same to a Partial Lease Year as to a Lease Year;
provided, however, that all payments and other financial obligations shall be
apportioned or prorated pursuant to Section 24.7 hereof.
-7-
12
"LESSEE" shall have the meaning set forth in the initial
paragraph hereof.
"LESSEE DEFAULT" shall have the meaning set forth in
Section 12.1 hereof.
"LESSEE'S REPRESENTATIVE" shall have the meaning set
forth in Section 24.16 hereof.
"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.
"MANAGEMENT AGREEMENT" shall have the meaning set forth
in Recital "C" hereof.
"MISUSE" shall have the meaning set forth in the
Management Agreement.
"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 Lessee 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.
"OPERATOR" shall have the meaning set forth in the
Management Agreement.
"OPERATOR DEFAULT" shall have the meaning set forth in
the Management Agreement.
"PERMITTED ESCROW AGENT" shall have the meaning set forth
in the Lease Agreement.
"PERMITTED INVESTMENT" shall have the meaning set forth
in the Lease Agreement.
"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
-8-
13
subdivision thereof or any agency or court of such state or subdivision.
"PREMIUM SEATING" shall have the meaning set forth in the
Management Agreement.
"PROGRAM REQUIREMENTS" shall have the meaning set forth
in the Lease Agreement.
"PROMOTOR" shall have the meaning set forth in the
Management Agreement.
"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 X hereof.
"RENT" shall have the meaning set forth in Article V
hereof.
"REPORTING PERIOD" shall have the meaning set forth in
the Lease Agreement.
"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. Except as otherwise
specified herein, 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,
walking lines, installing and removing bases and the
pitcher's mound and resodding;
-9-
14
(d) changing of standard, isolated light bulbs, fuses and
circuitbreakers as they burn out;
(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 Lease 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 such on-site personnel are
regularly employed.
"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").
"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 PERIOD" shall have the meaning set forth in the
Management Agreement.
"SUBSTANTIAL COMPLETION" or "SUBSTANTIALLY COMPLETED" shall
have the meaning set forth in the Lease Agreement.
"TEAM" shall have the meaning set forth in Recital "B" hereof.
"TERM" shall have the meaning set forth in Section 4.1 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.
-10-
15
ARTICLE II
----------
LEASED PREMISES
For the Rent and upon the agreements contained in this
Agreement, Gateway hereby leases to the Lessee, and the Lessee hereby leases
from Gateway, Gateway's fee interest in the Field, together with all the
improvements to be constructed thereon, including, but not limited to, all
permanent improvements, additions, alterations, fixtures, equipment and
installations constructed, provided or added thereto by Gateway or the Lessee at
any time (the "Field Improvements").
ARTICLE III
-----------
GATEWAY'S CONSTRUCTION OBLIGATIONS
The Lessee shall have no responsibility to provide or pay for
any part of the construction, furnishing or the equipping of Gateway's Work.
Gateway's obligations with respect to the Field Improvements shall include
supplying of all equipment and other personal property included in the Program
Requirements, all of such work being part of Gateway's Work to be completed in
accordance with the terms and conditions set forth in the Lease Agreement.
ARTICLE IV
----------
TERM
4.1 TERM. The "Term" of the lease portion of this Agreement
shall commence on the Completion Date and, unless terminated earlier pursuant to
the terms of this Agreement, shall end on December 31 of the year in which the
fortieth (40th) full Season following the Completion Date is concluded. Upon
determination of the Completion Date, the parties shall execute a supplement to
this Agreement setting forth the last day of the Term and shall execute and
record an appropriate supplement to the Memorandum of Lease.
4.2 TERMINATION. This Agreement will be subject to
termination as follows:
(a) After title to the Baseball Facility shall have
transferred to the City or the County if (i) the City
or the County shall have offered the Lessee and the
Operator the right to lease the Baseball Facility and
to manage the Baseball Facility (i.e., to continue to
have rights of use and control no less extensive than
the Lessee and the Operator had during the initial
terms of the Lease Agreement, the Management
Agreement and the Gateway CAM Agreement,
-11-
16
and on terms that are commercially reasonable based
upon comparable agreements that are competitively
favorable to other teams then leasing and managing
publicly owned baseball facilities, and if the Lessee
and the Operator decline after reasonable
negotiations to agree to such a lease, management
agreement and common area agreement, or (ii) the
Lessee and the Operator obviate the need for any such
offer and negotiations of such lease and management
terms by unilaterally deciding to cease to have the
Baseball Facility be the home of the Team, then this
Agreement shall terminate.
(b) If the Lessee ceases to use the Baseball Facility as
the home of the Team for any other reason, then this
Agreement shall terminate one year from the date on
which the Team plays the first official home game
elsewhere outside of the County.
ARTICLE V
---------
RENT
The Lessee shall pay to Gateway each Lease Year rent ("Rent")
in an amount equal to one dollar ($1.00). Rent shall be paid by the Lessee on or
before the last day of each Lease Year for which Rent is due, or, in the
election of Lessee, in advance upon the execution of this Agreement.
ARTICLE VI
----------
ALTERATIONS BY THE LESSEE
(a) Following the Completion Date, the Lessee, at its sole
cost and expense, may make any alterations of or additions or improvements to
the Field or the Field Improvements which do not (i) materially affect the
aesthetics, sight lines, structure or systems of the Baseball Facility (unless
approved by Gateway), (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), or (iii) violate any laws,
ordinances, or regulations. The Lessee 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 Lessee 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.
-12-
17
(b) Before commencing any alterations, additions, or
improvements pursuant to Subsection (a) above, the Lessee 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" insurance policy (with a waiver of subrogation endorsement
similar to the type referred to in Section 8.5 hereof), 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 Lessee and naming Gateway as an additional insured.
(c) All alterations, additions, or improvements made by the
Lessee pursuant to this Article shall be considered the property of the Lessee
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.
ARTICLE VII
-----------
USE OF THE FIELD
7.1 LESSEE'S USE. During the Term, the Lessee and its guests
and invitees shall be entitled to the possession and use of the Field and the
Field Improvements for the following purposes:
(a) to play major league baseball games and to conduct
activities related to the playing of major league
baseball games and the maintenance of a professional
baseball team;
(b) to conduct any and all other activities which, from
time to time during the Term, are associated with, or
are conducted in connection with, or are related to,
the conduct of the business of a major league
baseball team; and
(c) during the times the Lessee is using the Field and
the Field Improvements for playing the Team's home
games only, to stage activities attendant to the game
on the Field, except that the Lessee shall not stage
any activity (i) that is detrimental to the health,
safety and welfare of the people at the Baseball
Facility or (ii) that is detrimental to the physical
plant and condition of the Baseball Facility;
-13-
18
PROVIDED, HOWEVER, that the Lessee shall not occupy or use any portion of the
Field or the Field Improvements (or permit the use or occupancy of any portion
of the Field or the Field Improvements) for any purpose that will violate any
federal, state or local law or that will in any way affect the validity, payment
or the 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 Field and the Field
Improvements to conduct and perform all activities in connection with its rights
and duties hereunder or under the Management Agreement and the Lease Agreement.
7.3 OPERATOR'S USE. During the Term of the Management
Agreement, the Operator and its guests, concessionaires, licensees and invitees
shall be entitled to the possession and use of the Field and the Field
Improvements for all of the purposes set forth in the Management Agreement.
7.4 SPECIAL EVENTS. Notwithstanding the terms and conditions
of the Management Agreement or the Lease Agreement, or any other agreement,
neither Gateway, the Operator nor any other Person may conduct Special Events at
the Baseball Facility without first complying with the following procedure,
unless waived, in writing, by the Lessee.
(a) In no event may all or any part of a Special Event
Period coincide with all or any part of an
Exclusive Use Period;
(b) 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);
and Lessee may require that a protective covering
of Trivera Spunbound (or other material approved by
the Lessee), which shall be paid for by Gateway,
and maintained over the Field; and
(c) The Lessee shall have received at least forty-five
(45) days prior written notice of any Special Event
proposed to be conducted at the Baseball Facility,
which notice shall identify the nature of the event,
the sponsor, the promoter, if any, the areas of the
Baseball Facility to be utilized, the Special Event
Period and any other relevant information reasonably
necessary for the Lessee to exercise its approval
rights pursuant to this Section 7.4.
-14-
19
Notwithstanding the approval rights provided for above, Gateway shall not be
obligated to obtain such required approvals so long as the Operator is an
Affiliate of the Lessee.
7.5 LESSEE'S MANAGEMENT APPROVAL RIGHTS. Gateway shall cause
the Baseball Facility to be managed and operated as a first-class,
state-of-the-art, open-air Major League baseball park and in a professional,
businesslike and efficient manner if the Operator is no longer an Affiliate of
the Lessee. Without in any way limiting the Lessee's approval rights provided
herein, in the Lease Agreement or the Management Agreement, Gateway shall not,
or in the event Gateway subcontracts, licenses or otherwise assigns its rights
to any other Person, permit such other Person to, take any of the following
actions without the prior written consent of the Lessee, which consent shall not
be unreasonably withheld:
(a) Permit the Operator to assign its interest in the
Management Agreement;
(b) Amend, supplement, modify, or terminate the
Management Agreement or any other subsequent
management agreement for the operation of the
Baseball Facility;
(c) Enter into, or permit the Operator to enter into, any
concession agreement with any concessionaire without
the prior written approval, or thereafter amend,
supplement, modify or terminate such concession
agreement without the Lessee's approval;
(d) Sell, rent, or furnish any merchandise, articles or
services at the Baseball Facility that, in the
Lessee's reasonable judgment, is of poor quality,
unsatisfactory in nature, or harmful or dangerous to
the health or safety of the public;
(e) Establish the prices charged for all merchandise,
articles and services sold, rented or furnished at
the Baseball Facility; provided, however, that 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;
(f) Operate the scoreboards at the Baseball Facility for
all Home Dates in any manner inconsistent with the
procedures approved by the Lessee;
(g) Enter into any contracts for 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 or
-15-
20
video boards, and all nonpermanent or nonfixed spot
advertising); and
(h) Deviate from the security procedures approved by the
Lessee for the security and crowd control personnel
and night watchmen for the Baseball Facility.
Notwithstanding the approval rights provided for above, Gateway shall not be
obligated to obtain such required approvals so long as the Operator is an
Affiliate of the Lessee.
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 Field 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" 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 carry 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.
8.2 LESSEE'S INSURANCE. The Lessee shall, from and after the
Completion Date, maintain in full force and effect, at its expense, "occurrence
type" general liability insurance against bodily injury and property damage
arising from occurrences in and about the Baseball Facility and covering the
Lessee'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 products/completed operations aggregate of not less
than $1,000,000. The foregoing insurance shall name as additional
-16-
21
insureds Gateway, its members, its Executive Director and such other Affiliates
as Gateway shall reasonably request. Notwithstanding the above, the Lessee shall
not be required to maintain the insurance set forth in this Section 8.2 provided
such insurance coverages are included in the Operator's insurance provided for
in the Management Agreement.
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.
8.5 WAIVER OF SUBROGATION. Gateway and the Lessee agree that
all insurance policies against loss or damage to property and business
interruption or rent 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 type covered in Section 8.2 above,
insured under valid and collectible insurance policies to the extent of any
recovery collectible under such insurance policies.
-17-
22
ARTICLE IX
----------
MAINTENANCE OF AND REPAIRS TO THE BASEBALL FACILITY
9.1 GATEWAY OBLIGATIONS. Gateway shall be responsible for all
Routine Maintenance and Capital Repairs for the Baseball Facility. The Lessee
acknowledges that Gateway will assign its obligations as to Routine Maintenance
to the Operator pursuant to the terms of the Management Agreement.
9.2 MAINTENANCE AND REPAIR PROCEDURES.
(a) On or before February 1 of each Lease Year, and from time
to time during the Term as the Operator, not more frequently than once each
Reporting Period, the Lessee or Gateway may reasonably request, 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 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 Section.
(b) The Lessee, Gateway and the Operator shall meet to discuss
all of the proposed maintenance and repair items suggested by the Operator.
Gateway hereby agrees that Gateway shall use its best efforts to advise the
Lessee of its views as early as possible regarding the Operator's performance of
Routine Maintenance and Gateway's performance of Capital Repairs. All Routine
Maintenance, based on routine maintenance conducted at other Major League
baseball stadiums operated in a first-class manner, and Capital Repairs and
improvements, based on sound engineering and construction practices, requested
by the Lessee, shall be conducted and completed, subject to the reasonable and
prompt approval of Gateway and the Operator.
9.3 CAPITAL REPAIRS FUND. In addition to the Capital Repairs
Fund referred to in the Lease Agreement and the Management Agreement, Gateway
shall establish and maintain an account (the
-18-
23
"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 Lease Year after the first Lease 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 Subsection 8.1(b)
(except that the Capital Repairs Fund may be used for covered losses pending
receipt of insurance proceeds, but 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. 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, all sums in the Capital Repairs Fund
shall be paid to Gateway; provided, however, that Gateway shall continue to hold
all sums previously held in the Capital Repairs Fund in a separate escrow
account for the benefit of the Baseball Facility and Gateway shall transfer and
assign all of such funds to the Person or Persons that succeed Gateway in the
ownership of the Baseball Facility.
9.4 CAPITAL REPAIRS. During the Term, the Lessee 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. All work related
to any Capital Repair shall
-19-
24
be done in a good workmanlike manner. Gateway hereby agrees to indemnify, defend
and hold the Lessee harmless from and against all costs and expenses (including
attorneys' fees) arising out of Gateway's failure to perform such Capital
Repairs.
9.5 LESSEE'S SELF-HELP. If Gateway or the Operator fails to
perform any required Routine Maintenance or Capital Repair, the Lessee may
perform such Routine Maintenance or Capital Repairs and shall be entitled to
reimbursement, including, but not limited to, payment from the Capital Repairs
Fund. When feasible, Lessee shall give Gateway prompt notice thereof; PROVIDED,
HOWEVER, in the case of a Capital Repair or Routine Maintenance which in the
Lessee's good faith determination will cost more than $5,000 to complete, the
Lessee 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.
ARTICLE X
---------
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 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 the Field and Field Improvements and any and all other improvements (other
than with respect to personal property owned by the Operator or the Lessee
improvements made by or on behalf of the Lessee pursuant to Article VI hereof or
Section 7.1 of the Lease, respectively, hereafter constituting a part of the
Field and Field Improvements, any tax on the Lessee's rights hereunder in the
nature of a leasehold tax, 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 Field and Field Improvements 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 Lessee harmless from and against all Real and
Personal Property Taxes. In the event the Operator's or the Lessee's interest in
the Management Agreement, the Lease Agreement 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 Baseball Facility by a foreclosure
sale, and within sixty (60) days after such termination are not reinstated for
the balance of the then remaining terms thereof on the same terms and
conditions, the Lessee shall be entitled to terminate this Agreement upon thirty
(30) days prior written notice to Gateway.
-20-
25
Without in anyway limiting the Lessee's rights and remedies provided for in
Article XII hereof, in the event Gateway fails to pay any Real and Personal
Property Taxes when the same shall be due and payable, the Lessee shall have the
right, but shall have no obligation to pay the same or any of them, and upon
such payment by the Lessee, Gateway shall, immediately after proof of such
payment shall have been submitted to Gateway by the Lessee, and on demand
therefor, pay the Lessee the amount of any such payment so made by the Lessee,
with interest thereon at the Interest Rate. Gateway shall cause a separate tax
parcel to be created for the Field and the Field Improvements.
ARTICLE XI
----------
RIGHT OF ENTRY AND INSPECTION
In addition to its rights to use the Field and the Field
Improvements as provided in this Agreement, the Management Agreement and the
Lease Agreement, 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 Field and the Field Improvements
for the purpose of inspecting Gateway's Work, carrying out any of its
obligations under this Agreement, the Management Agreement or the Lease
Agreement (including, without limitation, to make any Capital Repairs required
to be made by Gateway), or for any other legitimate reason related to the
obligations of the parties hereto or the rights of Gateway under this Agreement,
the Management Agreement or the Lease Agreement. In the event Gateway enters the
Field and the Field Improvements 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 Lessee
and Gateway in and upon the Field and the Field Improvements all necessary
materials, tools and equipment.
ARTICLE XII
-----------
DEFAULT AND REMEDIES
12.1 DEFAULT BY LESSEE. The occurrence of any one or more of
the following events constitutes a default by the Lessee under this Agreement
("Lessee Default"):
(a) Failure by the Lessee at any time to pay, when due, any
Rent or other sums payable by the Lessee to Gateway hereunder within five (5)
Business Days after notice of such failure is given to the Lessee by Gateway;
-21-
26
(b) Failure by the Lessee 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
Lessee shall not be in default with respect to matters that cannot be reasonably
cured within thirty (30) days, so long as the Lessee has promptly commenced such
cure and diligently proceeds in a reasonable manner to complete the same
thereafter;
(c) The Lessee 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
Lessee or for a major part of its property;
(d) A trustee or receiver is appointed for the Lessee 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 Lessee and, if instituted against the Lessee, are
allowed against it or are consented to by it or are not dismissed within ninety
(90) days after such institution.
12.2 GATEWAY'S REMEDIES. If a Lessee 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 Lessee 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 Lessee 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 Lessee
shall remain due and payable, or after the time for performance by the Lessee 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 Lessee under this
Agreement, or perform or comply with any covenant
-22-
27
or condition imposed on the Lessee under this Agreement, as Gateway deems
available. 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
additional rent payable by the Lessee 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 Lessee and at any time or
from time to time, charge, set off and otherwise apply all or any part of any of
Gateway's Obligations against Lessee'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 Lessee for past or future rent or
other sums due from the Lessee hereunder, nor shall the bringing of any action
for rent or other sums or other Lessee Default be construed as a waiver of the
right to obtain possession of the Baseball Facility.
12.3 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 by Gateway to the Lessee hereunder within five (5) Business Days after
notice of such failure is given to Gateway by the Lessee;
(b) 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;
(c) 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;
(d) 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
(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 Gateway, and, if instituted against Gateway, are
allowed
-23-
28
against it or are consented to by it or are not dismissed within ninety (90)
days after such institution.
12.4 LESSEE'S REMEDIES. If a Gateway Default occurs, in
addition to any other rights or remedies the Lessee may have at law or in
equity, the Lessee shall have the following rights:
(a) The Lessee may enforce the provisions of this Agreement
and may enforce and protect the rights of the Lessee 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 Lessee 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 Lessee shall only be required to give such notice as is reasonable and
practical under the circumstances), the Lessee may, at the Lessee'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 Lessee deems available. 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 Lessee shall constitute a waiver of
default or of any remedy for default or render the Lessee liable for any loss or
damage resulting from any such act. The Lessee 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 Lessee's Obligations against Gateway's Obligations now or in the
future.
(c) No termination of this Agreement shall deprive the Lessee
of any of its remedies or actions against Gateway for past or future sums due to
the Lessee from Gateway hereunder.
12.5 GENERAL PROVISIONS.
(a) No right or remedy herein conferred upon, or reserved to,
Gateway or the Lessee 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
-24-
29
hereafter existing at law, or in equity or by statute; PROVIDED, HOWEVER, that
neither Gateway nor the Lessee 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, 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 installment was due until the date
paid in full.
ARTICLE XIII
------------
SURRENDER OF THE FIELD
13.1 GENERAL. Upon the expiration or termination of this
Agreement (by lapse of time or otherwise), the Lessee shall peaceably deliver up
and surrender the Field and the Field Improvements to Gateway in good order and
repair and in the same condition as upon the Completion Date, ordinary wear and
tear excepted; PROVIDED, HOWEVER, that nothing contained herein shall be
construed as an obligation by the Lessee to repair the Field Improvements prior
to such surrender except to the extent that such obligations are specifically
imposed upon the Lessee hereunder. The Lessee shall surrender to Gateway all
keys for the Field Improvements 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 Lessee's obligations to observe and perform
the covenants set forth in this Article XIII shall survive the expiration or
earlier termination of this Agreement (by lapse of time or otherwise).
13.2 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 Lessee to the Field and the
-25-
30
Field Improvements shall be deemed a part of the Field and the Field
Improvements and the same shall not be removed.
13.3 LESSEE'S PROPERTY. Upon the expiration or termination of
this Agreement (by lapse of time or otherwise), the Lessee may remove all
property which is owned by the Lessee and which the Lessee is permitted to
remove from the Field and the Field Improvements 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 Lessee's expense. If the Lessee 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 Lessee; (b) sell all or any part of such property at public or
private sale, without notice to the Lessee; or (c) declare that title to such
property shall be deemed to have passed to Gateway.
13.4 ABANDONING PREMISES OR PERSONAL PROPERTY. The Lessee
shall not vacate or abandon the Field and the Field Improvements at any time
during the Term, but if the Lessee vacates or abandons the Baseball Facility or
is dispossessed by process of law, in breach of this Agreement, any personal
property owned by the Lessee which may be left on the Field and within the Field
Improvements following such abandonment or dispossession shall be deemed to have
been abandoned by the Lessee, and in that event such property shall be disposed
of by Gateway in accordance with the provisions of Section 13.3 hereof. Gateway
agrees that Lessee shall not be deemed to have abandoned or vacated the Field or
Field Improvements unless Lessee has expressly stated Lessee's desire to abandon
or vacate in writing to Gateway.
ARTICLE XIV
-----------
DAMAGE TO THE FIELD
If any Property Damage shall occur:
(a) All property insurance proceeds from policies 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 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 Design Architect (or such other
architect selected by Gateway and approved by the Lessee) may
be necessary in order to protect the Field Improvements
pending the adjustment of the insurance loss or the making of
permanent repairs, restoration or reconstruction of the Field
Improvements;
-26-
31
(ii) there shall be paid from said insurance proceeds such
part thereof as shall equal the cost of repairing, restoring
or reconstructing the Field or of any part thereof so that
upon completion of such repairs, restoration, reconstruction,
or erection of the Field Improvements shall be equal to the
replacement value of the Field Improvements;
(iii) payments pursuant to paragraphs (i) or (ii) of this
Subsection (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 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 Lessee on account of
such Property Damage shall be held in trust by the Lessee for the benefit of
Gateway and shall be paid immediately by the Lessee 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 therein.
(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 Lessee shall notify the other party of
such determination in writing and thereupon this Agreement shall cease and
terminate and all future Rent and other amounts due by the Lessee hereunder
shall cease as of the date of such written notice and the total insurance
proceeds so paid shall be allocated equitably between Gateway and Lessee.
ARTICLE XV
----------
INDEMNIFICATION
15.1 LESSEE INDEMNIFICATION. Subject to the limitations
hereinafter set forth, the Lessee hereby agrees to indemnify and hold harmless
Gateway, its officers, members, employees and agents
-27-
32
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 on or about the Field which occurs
after the Completion Date and while the 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.
15.2 GATEWAY INDEMNIFICATION. Gateway hereby agrees to
indemnify, defend and hold the Lessee, its partners, 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 Excluded Occurrence which occur while this Agreement is in
effect.
15.3 PROCEDURE REGARDING INDEMNIFICATION.
(a) If the 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 XV, 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 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
-28-
33
settle, compromise, or pay such action, in either of which events the
Indemnified Party shall be entitled to indemnification therefor subject to this
Section 15.3.
(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.
15.4 LIMITATION. Indemnification under this Article XV does
not include indemnification against loss or liability due to Force Majeure.
ARTICLE XVI
-----------
ASSIGNMENT
16.1 ASSIGNMENT BY LESSEE. The Lessee shall not assign or
transfer this Agreement, in whole or in part, with or without consideration, to
any Person without the prior written consent of Gateway which consent shall not
be unreasonably withheld. Notwithstanding the foregoing, Gateway's consent shall
be granted automatically if (a) the proposed assignee shall have acquired the
Major League Baseball franchise now held by the Lessee in accordance with all
applicable Major League rules and regulations, (b) the American League and the
Office of the Commissioner of Baseball shall have approved the assignment, and
(c) such assignee assumes all of the Lessee's obligations under this Agreement
and agrees to be bound by this Agreement. Upon the assignment of this Agreement
by the Lessee with the consent of Gateway, or to another party where consent is
not required, the liability of the Lessee
-29-
34
shall cease with respect to liabilities accruing from and after the effective
date of such assignment.
16.2 SUBLETTING. The Lessee shall not sublease all or any part
of the Field and the Field Improvements, nor permit other persons to occupy or
conduct business in the Baseball Facility or any part thereof, except as
expressly permitted by this Agreement or with the prior written consent of
Gateway, which consent shall not be unreasonably withheld.
16.3 ASSIGNMENT BY LESSOR. Gateway shall have the right to
assign and transfer its rights under and interest in this Agreement, and pledge
any Rent or other sums to which Gateway is entitled 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 Lessee for
the costs of the design and construction of the Improvements (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.
16.4 ASSIGNEES AND SUBTENANTS. If Gateway consents at any time
to any assignment or sublease as defined in this Article XVI, the Lessee and any
such assignee or sublessee, 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 or sublease contrary to the provisions of this
Article XVI. 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. In addition, if any assignee of this Agreement is not a limited
partnership, the covenants and warranties by the Lessee set forth in Article XX
hereof shall be appropriately modified to take into account the nature of the
assignee.
ARTICLE XVII
------------
EMINENT DOMAIN
17.1 TERMINATION FOR CONDEMNATION. In the event that a
Condemnation with respect to any material part of the Field and the Field
Improvements 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 Field and the Field Improvements that, in
the reasonable determination of the Lessee, would cause
-30-
35
the Lessee to become unable to make use of the Field and the Field Improvements
for its intended operations or to experience a material loss of revenue;
(b) Any part of the area between the Ballpark Improvements and
a public street or highway, Condemnation of which would cause the Lessee to
become unable to provide reasonable access to the Field and the Field
Improvements; 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 Lessee may elect, in its sole discretion, not
to treat any of the foregoing as a "material part" of the Field and the Field
Improvements, in which event this Agreement shall not terminate. If this
Agreement terminates pursuant to the provisions of this Section 17.1, 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.
17.2 ALLOCATION OF AWARD. The amount of any award for or on
account of any Condemnation shall be paid directly to the Lessee. The Lessee
shall have the right to be represented by counsel of its choosing in any
Condemnation proceedings.
17.3 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 Field and the
Field Improvements for the Lessee's use in as expeditious a manner as possible.
17.4 TEMPORARY TAKING. This Agreement shall not terminate by
reason of a temporary taking of the Field and the Field Improvements or any
portion thereof for public use, except as provided in this Section 17.4. 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 17.2 hereof;
(b) upon the termination of such temporary taking, Gateway
shall use its reasonable efforts to restore the Field and the Field Improvements
to a state equivalent to that which the Field and the Field Improvements were in
immediately prior to such temporary taking;
(c) during any period of a temporary taking (or such longer
period as is reasonably necessary to allow the Lessee to make suitable alternate
arrangements), the Lessee shall be entitled
-31-
36
to make arrangements for an alternate site for the Team's home baseball games,
on the same terms and conditions as provided in Article XVIII hereof; and
(d) notwithstanding the foregoing, the Lessee 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 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 XVIII
-------------
UNTENANTABILITY
If the Field and the Field Improvements are untenantable in
whole or in any material part as a result of (a) Gateway's inability to cause
Substantial Completion as provided herein, or (b) any Major Capital Repair or
the event or events which gave rise thereto (including any Major Capital Repair
necessitated by any of the events set forth in Article XVII hereof), then the
Lessee shall (y) comply with the terms set forth in Article IV hereof, in the
case of any untenantability resulting from (a) above, or (z) make arrangements
for an alternate site for its Home Dates during the period of such
untenantability (or such longer period as is reasonably necessary to allow the
Lessee to make suitable alternate arrangements), in the case of any
untenantability resulting from (b) above. During the period in which the Lessee
is playing its games at an alternate site, the Lessee will not be responsible
for any obligations accruing under this Agreement. In the event that
untenantability caused by a Major Capital Repair or the event or events which
gave rise thereto (other than a Major Capital Repair necessitated by the events
set forth in Article XVII hereof) 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 Lessee may at its option, exercised in its reasonable discretion, terminate
this Agreement upon thirty (30) days' prior written notice to Gateway. If
untenantability is caused by any Major Capital Repair necessitated by the events
set forth in Article XVII hereof, the Lessee's right to terminate this Agreement
shall be governed by Article XVII.
ARTICLE XIX
-----------
CONDITIONS
The Lessee's obligations to take possession of the Field and
the Field Improvements 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
-32-
37
of the conditions precedent on or before the dates set forth in Article XXII of
the Lease Agreement (the "Deadline Dates"), unless waived in writing by the
Lessee. In the event any of the conditions precedent set forth in Article XXII
of the Lease Agreement is not satisfied by the applicable Deadline Date, the
Lessee may elect to (i) waive the condition, (ii) extend the Deadline date on
which such condition must be satisfied provided, however, that the Deadline Date
set forth in Section 25.4 of the Management Agreement shall not be extended
without the prior written approval of such extensions by Gateway, or (iii)
terminate this Agreement upon thirty (30) days' prior written notice to Gateway.
The Lessee shall notify Gateway of the Lessee's election within thirty (30) days
after the Deadline Date. Failure of the Lessee to notify Gateway shall be deemed
to be an election by the Lessee to waive such condition.
ARTICLE XX
----------
REPRESENTATIONS BY LESSEE
The Lessee 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:
20.1 VALID EXISTENCE. The Lessee is a limited partnership duly
organized and validly existing under the laws of the State of Ohio. The Lessee
has full partnership power to own its property and conduct its business as
presently conducted.
20.2 POWER; NO LIMITATION ON ABILITY TO PERFORM. The Lessee
has full partnership 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 Lessee. Subject to satisfaction of the requirements of
Article XXVI hereof, (a) neither the Lessee's partnership agreement or
certificate of limited partnership or Baseball Corporation's articles of
incorporation or code of regulations, nor any rule, policy, constitution, by-law
or 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 Lessee or Baseball Corporation 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 Lessee or Baseball
Corporation in connection herewith, and all transactions contemplated hereby and
thereby, and (b) neither the Lessee nor any of its partners (general or limited,
including, without limitation, Baseball Corporation), or stockholders of any
corporate partner, 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
-33-
38
which could prohibit, limit or otherwise affect the same. Except for the
approval required by Article XXVI 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 Lessee and Baseball Corporation of
this Agreement or any other agreement, document or instrument executed and
delivered by the Lessee or Baseball Corporation in connection herewith, or any
of the transactions contemplated hereby or thereby.
20.3 VALID EXECUTION. The execution and delivery of this
Agreement by the Lessee has been duly and validly authorized by all necessary
action. This Agreement and all other agreements, documents and instruments
executed and delivered by the Lessee in connection herewith are, and each other
agreement, document or instrument to be executed and delivered by the Lessee in
connection herewith when executed and delivered will be, legal, valid and
binding obligations of the Lessee, enforceable against the Lessee in accordance
with their respective terms.
20.4 DEFAULTS. The execution, delivery and performance of this
Agreement and each agreement, document and instrument executed and to be
executed and delivered by the Lessee or Baseball Corporation 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 Lessee or Baseball Corporation is a party or by which
the Lessee's or Baseball Corporation's assets may be bound or affected, (ii) any
law, statute, ordinance or regulation applicable to the Lessee or Baseball
Corporation, or (iii) the articles of incorporation or code of regulations of
Baseball Corporation, or the partnership agreement or certificate of limited
partnership of the Lessee, and (b) do not and will not result in the creation or
imposition of any lien or other encumbrance upon the assets of the Lessee or
Baseball Corporation.
20.5 GOOD STANDING OF BASEBALL CORPORATION. Baseball
Corporation is the Lessee's sole general partner, and is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Ohio.
20.6 POWER OF BASEBALL CORPORATION. Baseball Corporation has
full corporate power and authority to execute and deliver this Agreement on
behalf of the Lessee as the Lessee's sole general partner, and to carry out the
terms and provisions of this Agreement, and all transactions contemplated
hereby.
20.7 VALID EXECUTION BY BASEBALL CORPORATION. The execution
and delivery of this Agreement by Baseball Corporation on behalf of the Lessee
as the Lessee's sole general partner has been duly and validly authorized by all
necessary action.
-34-
39
20.8 COMPLIANCE WITH LAWS. The Lessee shall comply, at all
times, with all laws and regulations applicable to its use 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.
20.9 MAINTENANCE OF GOOD STANDING IN LEAGUE. The Lessee and
Baseball Corporation shall maintain the Team as an American League baseball team
in good standing.
ARTICLE XXI
-----------
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:
21.1 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.
21.2 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.
21.3 VALID EXECUTION. The execution and delivery of this
Agreement by Gateway has been duly and validly authorized by all
-35-
40
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.
21.4 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 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.
21.5 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.
21.6 TITLE. Gateway owns fee simple title to the Central
Market Square Site free and clear of all liens and encumbrances thereon except
(i) as set forth in that certain title policy issued on December 28, 1990, by
Midland Title Security, Inc. as agent for First American Title Insurance
Company, Policy No. 052032, (ii) real estate taxes that are not yet due and
payable, or (iii) immaterial liens.
21.7 THREE PARTY AGREEMENT AND CENTRAL MARKET COMMUNITY
DEVELOPMENT PLAN. The foregoing warranties and representations are subject to
the necessary amendments to the Three Party Agreement and the Central Market
Community Development Plan required to conform those documents to this
Agreement, the Management Agreement, the Ground Lease and the Common Area
Maintenance Agreement.
ARTICLE XXII
------------
SUBORDINATION, NONDISTURBANCE AND ATTORNMENT
Subject to Gateway furnishing the Lessee nondisturbance
agreements reasonably satisfactory in form and substance to the Lessee, this
Agreement, and all rights of the Lessee hereunder
-36-
41
shall be subject and subordinate to the mortgages which may encumber the within
leasehold estate that are granted in connection with any approved Financing
Arrangement. Notwithstanding anything to the contrary contained in this Article
XXII, with respect to any mortgage to which this Agreement is subordinate, such
subordination shall be contingent upon Gateway's securing the agreement or
acknowledgment of the mortgagee (which shall be obtained pursuant to a separate
written agreement with the Lessee) that this Agreement, the Lessee's rights
hereunder and the Lessee's right to continue occupancy of the within leasehold
estate shall not be affected or disturbed in the event of a default by Gateway
(or any successor) under any mortgage and subsequent foreclosure or eviction.
Such subordination shall also provide to the Lessee the right to elect to cure
defaults under the mortgage. Such agreements of nondisturbance may be
conditional upon the securing of the Lessee's written agreement in favor of the
mortgagee to attorn to and perform under this Agreement. If any mortgagee shall
succeed to the rights of Gateway hereunder, whether through possession,
foreclosure action or delivery of a new lease or deed, or otherwise, then, at
the request of such party ("Successor Landlord"), the Lessee shall attorn to,
and recognize, each Successor Landlord as the Lessee's landlord under this
Agreement and shall execute and deliver any reasonable instrument such Successor
Landlord may reasonably request to further evidence such attornment; provided,
however, that the Lessee's attornment shall be subject to the condition that the
Successor Landlord agrees to recognize the Lessee as the owner of the within
leasehold estate and the possessory rights thereto, on and subject to all of the
terms, conditions, obligations and benefits of this Agreement. If a mortgagee
shall so elect by notice to the Lessee, this Agreement and the Lessee's rights
hereunder shall be superior and prior in right to the mortgage of which such
mortgagee has the benefit, with the same force and effect as if this Agreement
had been executed, delivered and recorded prior to the execution, delivery and
recording of such mortgage.
ARTICLE XXIII
-------------
ESTOPPEL CERTIFICATE BY LESSEE
The Lessee agrees that at any time and from time to time upon
not less than ten (10) Business Days' prior request by Gateway, the Lessee will
execute, acknowledge and deliver to Gateway a statement in writing certifying
(a) that this Agreement is unmodified and in full force and effect (or if there
have been modifications that the same is in full force and effect as modified
and identifying the modifications), (b) the dates to which the Rent and other
charges have been paid, (c) that, so far as the Lessee knows, Gateway is not in
default under any provisions of this Lease or, if there has been a default, the
nature of said default, and (d) any other matter that Gateway or such
prospective mortgagee or
-37-
42
other lender shall reasonably request. It is intended that any such statement
may be relied upon by any person proposing to acquire Gateway's interest in this
Agreement or any prospective mortgagee of, or assignee of any mortgage upon,
such interest.
ARTICLE XXIV
------------
MISCELLANEOUS
24.1 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 impact 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 24.1 with respect to any delay within that Reporting Period.
24.2 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 Lessee 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 Lessee or Gateway
of any covenant, agreement, term, provision or condition of this Agreement shall
be deemed to have been made unless expressed in writing and signed by an
appropriate official on behalf of Gateway or the Lessee. The payment by either
party of sums due and payable hereunder, with knowledge of the breach of any
covenant, agreement, term, provision or condition herein contained, shall not be
deemed a waiver of such breach.
24.3 CONSENT. Unless otherwise specifically provided herein,
no consent or approval by the Lessee or Gateway permitted or required under the
terms of this Agreement shall be valid or be
-38-
43
of any validity whatsoever unless the same shall be in writing, signed by the
party by or on whose behalf such consent is given.
24.4 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.
24.5 COVENANT OF QUIET ENJOYMENT. Gateway covenants that if,
and so long as, the Lessee keeps and performs each and every covenant,
agreement, term, provision and condition of this Agreement on the part and on
behalf of the Lessee to be kept and performed, the Lessee 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.
24.6 RECORDATION OF LEASE. Neither party shall record this
Agreement, whether in the public records of Cuyahoga County or elsewhere.
However, at the request of either party, the parties shall promptly execute,
acknowledge and deliver to each other a Memorandum of Lease in the form of
Exhibit B (and a Memorandum of Modification of Lease in respect of any
modification of this Agreement) sufficient for recording. Such memoranda shall
not be deemed to change or otherwise affect any of the obligations or provisions
of this Agreement.
24.7 PRORATIONS. Any apportionment or prorations related to
the use of the Baseball Facility during a Season including but not limited to,
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.
24.8 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.
24.9 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.
-39-
44
24.10 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 Lessee, but also of their respective permitted
successors and assigns pursuant to Article XVI.
24.11 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.
24.12 ONLY LANDLORD-TENANT 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 Lessee, it being
expressly understood and agreed that neither the method of computation of Rent
nor any act of the parties hereto shall be deemed to create any relationship
between Gateway and the Lessee other than the relationship of landlord and
tenant. No mechanics', materialmen's or laborers' liens or other liens of any
character whatsoever created or suffered by the Lessee 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.
24.13 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
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Executive Director
-40-
45
With a copy to: Climaco, Climaco, Seminatore,
Xxxxxxxxx & Garafoli Co., X.X.X.
Xxxxx Xxxxxxxx, Xxxxx 000
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
With a copy to: Xxxxxx, Halter & Xxxxxxxx
0000 Xxxxxxx Xxxxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
For Lessee: Cleveland Indians Baseball Company
Limited Partnership
Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: General Manager
With a copy to: Xxxxxxx X. Xxxxxx
00000 Xxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxx 00000
With a copy to: Xxxxx & Xxxxxxxxx
0000 Xxxxxxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Either party may from time to time by written notice given to the other pursuant
to the terms of this Section 24.13 change the address to which notices shall be
sent.
24.14 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.
24.15 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.
24.16 REPRESENTATIVES. The Lessee's representative for
implementation of the terms of this Agreement shall be Xxxxxxx X. Xxxxxx, or
such individual or individuals designated, in writing, by Xxxxxxx X. Xxxxxx to
act for the Lessee on certain specified matters ("Lessee'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 24.13.
24.17 EFFECTIVE 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.
-41-
46
24.18 ANTIDISCRIMINATION CLAUSE. The Lessee 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 Lessee and
Gateway or by applying for a permit or receiving permission in any other way
from the Lessee and Gateway. Gateway and the Lessee 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 Lessee shall use reasonable efforts to
encourage and promote opportunities for minorities and women in the operation of
the Ballpark. The Lessee shall be an equal opportunity employer.
24.19 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 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.
24.20 NO MERGER. There shall be no merger of this Agreement or
of the leasehold estate hereby created with the fee estate in the Field and the
Field Improvements or any part thereof by reason of the fact that the same
person, firm, corporation or other legal entity may acquire or hold, directly or
indirectly, this Agreement or the leasehold estate and the fee estate in the
Field and the Field Improvements or any interest in such fee estate, without the
prior written consent of Gateway's mortgagee(s), if any.
24.21 FURTHER ASSURANCES. The Lessee 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 Lessee shall reasonably request of
the other in order to fulfill the intent of this Agreement and the transactions
contemplated thereby.
24.22 JOINT PROMOTION OF BASEBALL. During the Term of this
Agreement, Gateway and the Lessee shall at all times use their best efforts to
promote public attendance at the Team's home baseball games at the Baseball
Facility.
-42-
47
24.23 RETAINED REVENUES. Unless otherwise expressly provided
for in the Lease Agreement or the Management Agreement, the Lessee shall be
entitled to receive and retain all revenues generated by the operations of the
Team or derived from the ownership of the franchise rights to the Team.
24.24 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.
24.25 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.
24.26 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 XXV
-----------
LEGAL OPINIONS
25.1 LESSEE'S LEGAL OPINION. Upon execution of this Agreement,
the Lessee shall deliver to Gateway the favorable opinion of the Lessee's
counsel in the form attached as Exhibit J of the Lease Agreement and made a part
hereof.
25.2 GATEWAY'S LEGAL OPINION. Upon execution of this
Agreement, Gateway shall deliver to the Lessee the favorable opinion of
Gateway's counsel in the form attached as Exhibit K of the Lease Agreement and
made a part hereof.
ARTICLE XXVI
------------
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 Lessee,
this Agreement has not been approved by the Commissioner of Baseball and the
President of the American League. After execution hereof by Gateway and the
Lessee, the Lessee shall immediately request such approval.
-43-
48
ARTICLE XXVII
-------------
THREE PARTY AGREEMENT
AND CENTRAL MARKET COMMUNITY DEVELOPMENT PLAN
Gateway covenants to Lessee that no proceeds from the sale of
Bonds or any other use of funds that would subject the Field or the Field
Improvements to the terms and conditions of Sections 2.08 or 2.10(A) of the
Three Party Agreement shall be used to acquire the Field or construct the Field
Improvements. This Agreement shall not be subject to the terms and conditions of
Sections 2.08 or 2.10(A) of the Three Party Agreement or any agreements or
provisions that would, in any way, limit the Term of this Agreement or Lessee's
rights to use the Field or Field Improvements as provided herein. Gateway shall
not approve any amendment to the Three Party Agreement as provided in Section
5.05 thereof or the Central Market Community Development Plan as provided in
Section III.D. thereof without the prior written consent of Lessee, which
consent may be withheld in Lessee's sole discretion if such amendment would
materially affect Lessee's rights provided for in this Agreement, the Lease
Agreement, the Management Agreement or the Gateway CAM Agreement.
IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement as of the day and year first above written.
Witnesses as to Gateway: GATEWAY ECONOMIC DEVELOPMENT
CORPORATION OF GREATER CLEVELAND,
an Ohio nonprofit corporation
/s/ illegible By: /s/ Xxx Xxxxxx
------------------------- --------------------------------
/s/ Xxxxxx Field Its: /s/ Chairman
------------------------- --------------------------------
Witnesses as to Lessee: CLEVELAND INDIANS BASEBALL COMPANY
LIMITED PARTNERSHIP, an Ohio limited
partnership
By: Cleveland Baseball Corporation,
an Ohio corporation, its sole
general partner
/s/ illegible By: /s/ M Xxxxxx
------------------------- --------------------------------
/s/ Xxxxxx Field Xxxxxx X. Xxxxxx
------------------------- Its: Vice President
-44-
