I knew that it was there somewhere, Ackerly (AK) is a publicly traded company and they have to disclose some of this information, I didn't know that they posted the whole thing. Anyway, here is the "Arbitration" part first, "Term; Use Period" next, then the whole thing. It messes up the format of my blog, but I posted the text as it was formatted, so there aren't a bunch of choppy lines. You have to scroll down a little.
If you are at the main blog click here to see just this single story so there text doesn't push into the links to the right.
Enjoy.
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XXV. ARBITRATION
A. Disputes To Be Resolved Through Arbitration: All claims,
disputes and other matters in question between the parties arising out of, or
relating to provisions of this Agreement shall be decided by binding arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect unless the parties mutually agree otherwise or unless
the claim, dispute, or matter in question relates to the provisions of Article
II ("Term; Use Period"), Article III ("Termination of Current Agreement
Providing Seattle Center Space for SuperSonics Home Games Use"), Article IV
("Coliseum Design and Construction"), Article V ("Coliseum Planning &
Construction Schedule; SSI Opportunities to Void Agreement"), Subsection XVI.F
("Hazardous Substances") or Article XIX ("Subcontracting and Transfer of
Ownership"). The dispute shall be determined by majority vote of a panel of
three arbitrators, unless the parties agree to have the matter decided by a
single arbitrator. The written decision of the arbitrator(s) shall be final and
binding on all parties to the arbitration proceeding. The costs and expenses
(including reasonable attorneys' fees) of the arbitration proceeding shall be
assessed in favor of the prevailing party by the arbitrator(s), and the
assessment shall be set forth in the decision and award of the arbitrator(s).
The parties recognize that a need may arise for a more expeditious resolution of
disputes concerning Article IV ("Coliseum Design and Construction") and
therefore will make their best efforts to develop a mutually satisfactory
informal dispute resolution mechanism for such matters.
B. Limitations on Arbitration Scope: No arbitration arising out of
or relating to this Agreement shall include, by consolidation, joinder or in any
other manner any parties other than the parties to this Agreement and any other
persons substantially involved in a common question of fact or law, whose
presence is required if complete relief is to be accorded in the arbitration.
No parties other than the parties to this Agreement shall be included as an
original third party or additional third party to an arbitration whose interest
or responsibility is insubstantial. Any consent to arbitration involving an
additional person or persons shall not constitute consent to arbitration of any
dispute not described therein. The foregoing agreement to arbitrate and any
other agreement to arbitrate with any additional parry duly consented to by the
parties hereto shall be specifically enforceable under prevailing arbitration
law.
C. Notice of Demand for Arbitration: Notice of the demand for
arbitration shall be filed in writing with the other
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party and with the American Arbitration Association. The demand for arbitration
shall be made within a reasonable time after the claim, dispute or other matter
in question has arisen, and in no event shall it be made after the date when
institution of legal or equitable proceedings based on such claim, dispute or
other matter in question would be barred by the applicable statute of
limitations.
D. Limitation on Judicial Relief: No proceedings based upon any
claim arising out of or related to this Agreement shall be instituted in any
court by any party hereto against any other parry hereto except (i) an action to
compel arbitration pursuant to this Section, (ii) an action to enforce the award
of the arbitration panel rendered in accordance with this Section, (iii) to file
arbitration award as a judgment, and (iv) proceedings brought by SSI for
injunctive relief or any other interim remedy to protect SSI's rights under this
Agreement.
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II. TERM; USE PERIOD
The Term of this Agreement shall commence on the date it is executed
by an authorized representative of each of the parties hereto. SSI's use and
occupancy rights to the Premises shall commence on the Use Commencement Date.
SSI's use and occupancy rights with respect to the Premises and the Term of this
Agreement shall end on September 30, 2010, unless terminated earlier pursuant to
the provisions hereof.
Subject to the provisions of this Agreement, SSI shall schedule and
ensure that the SuperSonics play all Home Games other than pre-season games
exclusively in the Coliseum after the Use Commencement Date.
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Here you go, the full monte
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Ackerley Group Inc - 10-K405/A - For 12/31/94, On 3/28/95
Document 6 of 9 - EX-10.22 - Material Contract
________________________________________________________________________________
CONFORMED COPY
PREMISES USE
&
OCCUPANCY
AGREEMENT
between
THE CITY OF SEATTLE
and
SSI SPORTS, INC.
March 2, 1994
TABLE OF CONTENTS
Section Page
------- -----
I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
A. "Advertising". . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
B. "Agreement". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
C. "Applicable Taxes" . . . . . . . . . . . . . . . . . . . . . . . . . 2
D. "Approval" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
E. "Basketball and Other Novelties" . . . . . . . . . . . . . . . . . . 3
F. "City" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
G. "Club Seats" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
H. "Coliseum" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
I. "Coliseum Redevelopment Project" . . . . . . . . . . . . . . . . . . 3
J. "Commissioner" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
K. "Courtside Club" . . . . . . . . . . . . . . . . . . . . . . . . . . 4
L. "Current Facility" . . . . . . . . . . . . . . . . . . . . . . . . . 4
M. "Day of Game". . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
N. "Food" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
O. "Function Rooms" . . . . . . . . . . . . . . . . . . . . . . . . . . 4
P. "Home Game". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Q. "NBA". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
R. "Parking Garage" . . . . . . . . . . . . . . . . . . . . . . . . . . 4
S. "Practice Facility". . . . . . . . . . . . . . . . . . . . . . . . . 4
T. "Premises" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
U. "Premium Seats". . . . . . . . . . . . . . . . . . . . . . . . . . . 5
V. "Premium Seat Marketing Agreement" . . . . . . . . . . . . . . . . . 5
W. "Project Architect". . . . . . . . . . . . . . . . . . . . . . . . . 5
X. "Seats". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Y. "Seattle Center Director". . . . . . . . . . . . . . . . . . . . . . 5
Z. "South Coliseum Parking Lot" . . . . . . . . . . . . . . . . . . . . 5
AA. "SS1". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
AB. "SS1 Box Office Facility". . . . . . . . . . . . . . . . . . . . . . 5
AC. "SS1 Retail Facility". . . . . . . . . . . . . . . . . . . . . . . . 5
AD. "SS1 Suite". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
AE. "SuperSonics". . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
AF. "Supplemental Parking Spaces". . . . . . . . . . . . . . . . . . . . 6
AG. "Term" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
AH. "Ticket Sales Proceeds". . . . . . . . . . . . . . . . . . . . . . . 6
AI. "Unlimited Use Facilities" . . . . . . . . . . . . . . . . . . . . . 6
AJ. "Use Commencement Date". . . . . . . . . . . . . . . . . . . . . . . 6
II. TERM; USE PERIOD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
III. TERMINATION OF CURRENT AGREEMENT PROVIDING
SEATTLE CENTER SPACE FOR SUPERSONICS HOME
GAMES USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
IV. COLISEUM DESIGN AND CONSTRUCTION. . . . . . . . . . . . . . . . . . . . . 7
A. Necessity for Coordination and Communications
Between the Parties. . . . . . . . . . . . . . . . . . . . . . . . . 7
B. SSI Access to Information. . . . . . . . . . . . . . . . . . . . . . 7
1. Designation of "SSI Representative" . . . . . . . . . . . . . . 7
2. City Communication With SSI Representative. . . . . . . . . . . 7
C. Liaison Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . 7
D. SSI Review of Design, Plans, Specifications and
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
E. Change Orders Permitted at Project Manager's
Discretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
F. Emergency Decisions. . . . . . . . . . . . . . . . . . . . . . . . . 9
G. Design Changes Initiated by SSI. . . . . . . . . . . . . . . . . . . 9
H. No Facility Design or Construction Change Without
Mutual Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1. Changes After Execution of Construction
Contract. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2. Changes After Completion of Project . . . . . . . . . . . . . 10
I. Deviations from Approved Design and Report for
Not Approved Design or Construction Elements . . . . . . . . . . . .10
J. Acknowledgement of SSI Involvement and
Approval of Decision-Making. . . . . . . . . . . . . . . . . . . . .10
V. COLISEUM PLANNING & CONSTRUCTION SCHEDULE;
SSI OPPORTUNITIES TO VOID AGREEMENT . . . . . . . . . . . . . . . . . . .11
A. Importance to SSI & City of Timely Coliseum
Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
B. Special Conditions for Expedited City
Financing of Coliseum Redevelopment Project. . . . . . . . . . . . .11
1. Third-party Commitments . . . . . . . . . . . . . . . . . . . .11
2. SSI Guarantee . . . . . . . . . . . . . . . . . . . . . . . . .11
3. Combined Third-party Commitments &
SSI Guarantee . . . . . . . . . . . . . . . . . . . . . . . . .12
C. Effect of Extension to SSI of Time to
Market Suites, Club Seats, and Title
Sponsorship on Coliseum Construction
Commencement and Completion Dates. . . . . . . . . . . . . . . . . .12
D. Conditions Allowing SSI Nullification of
This Agreement Prior to July 1, 1994 . . . . . . . . . . . . . . . .12
1. For Failure To Demolish Current Facility. . . . . . . . . . . .13
2. For Failure to Grant Approval Regarding
Practice Facility Design or Specifications. . . . . . . . . . .13
E. Condition Allowing SSI Nullification of
This Agreement Prior to September 1, 1994. . . . . . . . . . . . . .13
F. Damages for Untimely Completion of Project . . . . . . . . . . . . .13
1. Construction Contract Requirements. . . . . . . . . . . . . . .13
2. SSI's Share of City's Damages from
Contractor. . . . . . . . . . . . . . . . . . . . . . . . . . .13
3. SSI's Damages Share Are Additional Rights . . . . . . . . . . .14
VI. SCHEDULING OF HOME GAMES INTO SEATTLE
CENTER COLISEUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
A. City's Reserved Advanced Regular Season. . . . . . . . . . . . . . .14
B. SSI's Selection of Regular Season and
Preseason Game Dates . . . . . . . . . . . . . . . . . . . . . . . .14
1. SSI's Initial Selection of Dates. . . . . . . . . . . . . . . .14
2. SSI's Release of Dates Not Selected by NBA. . . . . . . . . . .15
C. SSI's Selection of Additional Event Dates. . . . . . . . . . . . . .15
D. Playoff Game Date Selection. . . . . . . . . . . . . . . . . . . . .15
E. SSI's Priority for Coliseum Use; SSI Relief
For City's Failure to Make Coliseum Available. . . . . . . . . . . .15
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VII. PREMISES LICENSED FOR USE AND OCCUPANCY BY SSI. . . . . . . . . . . . . .16
A. Unlimited Use Facilities . . . . . . . . . . . . . . . . . . . . . .16
B. Basketball Court and Related Areas, and
Fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
1. Facilities for Use on Any Day of Game . . . . . . . . . . . . .17
2. Facilities for Use on Other Than a Day of Game. . . . . . . . .17
C. Parking Areas and Spaces . . . . . . . . . . . . . . . . . . . . . .17
1. Day of Game Parking . . . . . . . . . . . . . . . . . . . . . .17
2. Parking on Other Than Day of Game . . . . . . . . . . . . . . .17
D. Ticket Sales Facilities. . . . . . . . . . . . . . . . . . . . . . .17
E. Restrictions on City's Right to Use or
Authorize Use of the Coliseum. . . . . . . . . . . . . . . . . . . .18
F. SSI First Right to Use & Occupy Coliseum for Other
Franchised Professional Sports Activities. . . . . . . . . . . . . .18
G. No Use of Common Areas . . . . . . . . . . . . . . . . . . . . . . .18
VIII. SSI PAYMENTS TO THE CITY. . . . . . . . . . . . . . . . . . . . . . . .19
A. Payments Due . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
1. Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
2. Additional Rent . . . . . . . . . . . . . . . . . . . . . . . .20
3. Service Charges . . . . . . . . . . . . . . . . . . . . . . . .20
B. Delinquencies. . . . . . . . . . . . . . . . . . . . . . . . . . . .23
C. Books and Records; Audit . . . . . . . . . . . . . . . . . . . . . .23
1. SSI's Record-keeping Obligation . . . . . . . . . . . . . . . .23
2. City's Recordkeeping Obligation . . . . . . . . . . . . . . . .24
3. Audits. . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
D. Time Limitation on Assertion of Claim for Payment. . . . . . . . . .25
IX. UTILITY, PERSONNEL, AND OTHER SERVICES AND
RESPONSIBILITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
A. General Utilities. . . . . . . . . . . . . . . . . . . . . . . . . .25
1. City Responsibilities . . . . . . . . . . . . . . . . . . . . .25
2. SSI Responsibilities. . . . . . . . . . . . . . . . . . . . . .26
B. First Aid Facility . . . . . . . . . . . . . . . . . . . . . . . . .26
C. Public Address Facilities. . . . . . . . . . . . . . . . . . . . . .26
D. Scoreboard and Time Clock Facilities . . . . . . . . . . . . . . . .26
1. Provision and Installation of Equipment . . . . . . . . . . . .26
2. Set-up Responsibilities . . . . . . . . . . . . . . . . . . . .27
3. Equipment Use . . . . . . . . . . . . . . . . . . . . . . . . .27
E. Personnel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
1. City-provided personnel . . . . . . . . . . . . . . . . . . . .27
2. Time for Commencement of Work . . . . . . . . . . . . . . . . .28
3. SSI's Required Personnel. . . . . . . . . . . . . . . . . . . .28
4. Seattle Police Department Personnel . . . . . . . . . . . . . .29
5. Joint Development of Personnel Performance
Standards . . . . . . . . . . . . . . . . . . . . . . . . . . .29
X. MAINTENANCE AND CARE RESPONSIBILITIES . . . . . . . . . . . . . . . . . .29
A. General City Responsibilities. . . . . . . . . . . . . . . . . . . .29
B. City Obligation to Annually Reserve Funds
for Repairs. . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
C. City Obligation to Perform General Renovation
of Coliseum in 2003. . . . . . . . . . . . . . . . . . . . . . . . .29
D. SSI Remedy for City's Failure to Perform
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Maintenance or Repairs . . . . . . . . . . . . . . . . . . . . . . .30
E. SSI's Repair, Maintenance and Care Responsibilities. . . . . . . . .30
F. SSI Maintenance and Repair of SSI-Provided or
-Installed Equipment . . . . . . . . . . . . . . . . . . . . . . . .31
G. City Remedy for SSI's Failure to Perform
Maintenance or Repairs . . . . . . . . . . . . . . . . . . . . . . .31
H. SSI Assistance with City Recycling Efforts . . . . . . . . . . . . .31
XI. CITY'S SUPERVISION AND CONTROL OF SEATTLE
CENTER BUILDINGS AND GROUNDS AND ACTIVITIES . . . . . . . . . . . . . . .31
A. General City Rights. . . . . . . . . . . . . . . . . . . . . . . . .31
1. Appearance, Size & Location of Seattle
Center. . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
2. Traffic Regulation. . . . . . . . . . . . . . . . . . . . . . .31
3. Admission Charges . . . . . . . . . . . . . . . . . . . . . . .32
4. Rules & Regulation Promulgation . . . . . . . . . . . . . . . .32
5. Days & Hours For Operations . . . . . . . . . . . . . . . . . .32
6. Size, Number, Type & Identity of Concession
Operations. . . . . . . . . . . . . . . . . . . . . . . . . . .32
B. SSI Principal User . . . . . . . . . . . . . . . . . . . . . . . . .32
C. Supervision and Control of Coliseum. . . . . . . . . . . . . . . . .32
XII. SSI EXCLUSIVE RIGHTS REGARDING THE SALE OF FOOD,
BASKETBALL AND OTHER NOVELTIES, ADVERTISING, VIDEO
PRODUCTION AND BROADCAST RIGHTS . . . . . . . . . . . . . . . . . . . . .32
A. Exclusive Food Sales & Service Right . . . . . . . . . . . . . . . .32
B. Exclusive Novelties Concession Sales and
Rental Right . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
C. Exclusive Advertising Display Service Right. . . . . . . . . . . . .33
1. Advertising Display's Focus . . . . . . . . . . . . . . . . . .33
2. Advertisers' Obligation to Respect Family
Orientation of Seattle Center . . . . . . . . . . . . . . . . .33
3. Prohibition Against Any Advertising
Display for a Tobacco Product or Certain
Alcoholic Beverages . . . . . . . . . . . . . . . . . . . . . .34
4. Advertising Display Opportunities Available
for Hockey Franchise Acting as "Host Team"
in Coliseum . . . . . . . . . . . . . . . . . . . . . . . . . .34
5. City's Right to Temporarily Interrupt,
Without Compensation to SSI, Certain
Advertising Displays Due to Conflict with
Theatrical Performance or User's Policies
or Religious Tenet. . . . . . . . . . . . . . . . . . . . . . .34
6. City's Right to Temporarily Interrupt
Advertising Displays Upon Payment of
Compensation to SSI . . . . . . . . . . . . . . . . . . . . . .35
7. City's Right to Allow Temporary Advertising
Displays. . . . . . . . . . . . . . . . . . . . . . . . . . . .35
8. City Notice to SSI of Need for Advertising
Display Interruption; SSI's Implementation
of City Notice. . . . . . . . . . . . . . . . . . . . . . . . .35
9. City's Right to Scoreboard Message Center
Announcements at Home Game. . . . . . . . . . . . . . . . . . .36
10. Advertising Displays Constitute Improvements;
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Standards for Construction and Attractiveness . . . . . . . . .36
11. Title Sponsorship Identification. . . . . . . . . . . . . . . .36
XIII. EXCLUSIVE VIDEO PRODUCTION, BROADCAST &
CABLECAST TRANSMISSION RIGHTS . . . . . . . . . . . . . . . . . . . . .37
XIV. TICKET ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . .37
A. SSI Responsibilities . . . . . . . . . . . . . . . . . . . . . . . .37
B. Complimentary Tickets. . . . . . . . . . . . . . . . . . . . . . . .37
XV. INDEMNIFICATION; INSURANCE. . . . . . . . . . . . . . . . . . . . . . . .37
A. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . .37
1. SSI to Indemnify City . . . . . . . . . . . . . . . . . . . . .37
2. City to Indemnify SSI . . . . . . . . . . . . . . . . . . . . .38
3. Indemnification Regarding Any Alteration,
Addition, or Improvement. . . . . . . . . . . . . . . . . . . .38
B. SSI's Liability Insurance. . . . . . . . . . . . . . . . . . . . . .38
1. Liability Limits. . . . . . . . . . . . . . . . . . . . . . . .38
2. Coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . .39
3. Authorized Carriers . . . . . . . . . . . . . . . . . . . . . .39
4. Naming of City as Additional Insured. . . . . . . . . . . . . .39
C. Evidence of Insurance. . . . . . . . . . . . . . . . . . . . . . . .40
D. Assumption of Risk . . . . . . . . . . . . . . . . . . . . . . . . .40
E. Adjustments of Claims. . . . . . . . . . . . . . . . . . . . . . . .40
F. Remedies upon Failure to Insure. . . . . . . . . . . . . . . . . . .40
G. Mutual Release and Waiver. . . . . . . . . . . . . . . . . . . . . .41
XVI. COMPLIANCE WITH LAW . . . . . . . . . . . . . . . . . . . . . . . . . . .41
A. Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
B. Nondiscrimination in Employment. . . . . . . . . . . . . . . . . . .41
C. Women's and Minority Business Enterprise
Utilization. . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
1. Incorporation of Seattle Municipal Code
Ch. 20.46 . . . . . . . . . . . . . . . . . . . . . . . . . . .42
2. SSI's WMBE Obligations. . . . . . . . . . . . . . . . . . . . .42
3. Noncompliance with SMC Ch. 20.46
Constitutes Material Breach . . . . . . . . . . . . . . . . . .43
D. Attendance and Safety Standards. . . . . . . . . . . . . . . . . . .43
E. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
F. Environmental Standards. . . . . . . . . . . . . . . . . . . . . . .43
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . .43
2. City Representations & Warranties . . . . . . . . . . . . . . .44
3. SSI's General Obligations . . . . . . . . . . . . . . . . . . .44
4. SSI's Obligations Upon Violation of
Conditions; City's Rights Upon SSI Violation. . . . . . . . . .44
5. Environmental Inspections & Testing . . . . . . . . . . . . . .45
6. SSI's Removal of Hazardous Substances . . . . . . . . . . . . .45
7. SSI's Reimbursement of City Costs . . . . . . . . . . . . . . .45
8. Indemnification . . . . . . . . . . . . . . . . . . . . . . . .45
XVII. CITY'S ACCESS TO PREMISES; INSPECTION, REPAIR,
AND IMPROVEMENT OF PREMISES. . . . . . . . . . . . . . . . . . . . . . .46
A. Access to Premises . . . . . . . . . . . . . . . . . . . . . . . . .46
B. Permitted Interference With Either Party's
-v-
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
C. Retention and Use of Keys to Premises. . . . . . . . . . . . . . . .46
XVIII. NO NUISANCES OR OBJECTIONABLE ACTIVITY. . . . . . . . . . . . . . . . .47
XIX. SUBCONTRACTING AND TRANSFER OF OWNERSHIP. . . . . . . . . . . . . . . . .47
A. Subcontracting . . . . . . . . . . . . . . . . . . . . . . . . . . .47
B. Transfer Of Ownership Interest . . . . . . . . . . . . . . . . . . .47
1. SSI's Delivery of Instrument of
Assumption and Agreement. . . . . . . . . . . . . . . . . . . .47
2. Release of SSI Upon Total Assumption
of SSI's Obligations by Other Party . . . . . . . . . . . . . .47
3. Joint & Several Liability of SSI and
Other Party Where SSI's Obligations
Are Not Totally Assumed . . . . . . . . . . . . . . . . . . . .47
XX. RELATIONSHIP WITH NBA . . . . . . . . . . . . . . . . . . . . . . . . . .48
A. Warranty and Special Covenant. . . . . . . . . . . . . . . . . . . .48
1. SSI's Ownership of Valid NBA Franchise. . . . . . . . . . . . .48
2. No NBA Prohibition or Limitation on
SSI's Ability to Execute or Carry Out
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . .48
3. NBA Commissioner Has Approved Agreement . . . . . . . . . . . .48
B. SSI Subject to NBA Rules and Regulations . . . . . . . . . . . . . .48
XXI. IMPROVEMENTS, ADDITIONS, AND ALTERATIONS. . . . . . . . . . . . . . . . .48
A. Prior Approval of Plans and Specifications
Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
B. No Representation or Liability Created by
Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
C. Work Inconsistent with Approved Plans and
Specifications . . . . . . . . . . . . . . . . . . . . . . . . . . .49
D. Extra Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . .49
E. Improvements, Additions, and Alterations
Become City Property . . . . . . . . . . . . . . . . . . . . . . . .49
F. Improvements, Additions & Alterations At
SSI Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
G. Construction Bond. . . . . . . . . . . . . . . . . . . . . . . . . .50
H. Construction Liability Insurance . . . . . . . . . . . . . . . . . .50
I. Delivery of "As-Built" Drawings. . . . . . . . . . . . . . . . . . .50
J. Testing of Premises. . . . . . . . . . . . . . . . . . . . . . . . .51
XXII. DAMAGE AND DESTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . .51
A. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
B. City Notice of Intentions Regarding
Rebuilding of Coliseum . . . . . . . . . . . . . . . . . . . . . . .51
1. Circumstances Under Which City
Obligated to Repair & Restore Coliseum
After Occurrence. . . . . . . . . . . . . . . . . . . . . . . .51
2. City Notice of Intent to Restore &
Repair Coliseum After Occurrence. . . . . . . . . . . . . . . .52
C. SSI Remedies During City Repair and
Restoration of Coliseum. . . . . . . . . . . . . . . . . . . . . . .52
D. No Liability for Termination . . . . . . . . . . . . . . . . . . . .53
-vi-
XXIII. SUSPENSION OF OBLIGATIONS (FORCE MAJEURE) . . . . . . . . . . . . . . .53
XXIV. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
XXV. ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
A. Disputes To Be Resolved Through Arbitration. . . . . . . . . . . . .54
B. Limitations on Arbitration Scope . . . . . . . . . . . . . . . . . .54
C. Notice of Demand for Arbitration . . . . . . . . . . . . . . . . . .55
D. Limitation on Judicial Relief. . . . . . . . . . . . . . . . . . . .55
XXVI. DEFAULT AND REMEDIES THEREFOR. . . . . . . . . . . . . . . . . . . . . .55
A. Act of Default and Breach by the Parties . . . . . . . . . . . . . .55
1. SSI's Failure to Insure . . . . . . . . . . . . . . . . . . . .55
2. SSI's Abandonment of Premises . . . . . . . . . . . . . . . . .55
3. SSI's Nonremittance of Amounts Due City . . . . . . . . . . . .55
4. City's Failure to Maintain Premises . . . . . . . . . . . . . .55
5. Violation of Other Provisions of Agreement. . . . . . . . . . .55
B. Notice to Cure . . . . . . . . . . . . . . . . . . . . . . . . . . .56
C. Rights Upon Default and Breach . . . . . . . . . . . . . . . . . . .56
1. City Rights Upon SSI Default & Breach . . . . . . . . . . . . .56
2. SSI Rights Upon City Default & Breach . . . . . . . . . . . . .56
D. Termination by Court Decree. . . . . . . . . . . . . . . . . . . . .56
XXVII. SURRENDER OF PREMISES; HOLDING OVER . . . . . . . . . . . . . . . . . .57
A. Surrender and Delivery . . . . . . . . . . . . . . . . . . . . . . .57
B. Removal of SSI's Property. . . . . . . . . . . . . . . . . . . . . .57
C. Storage of SSI's Property. . . . . . . . . . . . . . . . . . . . . .57
D. Holdover Use and Occupancy of Premises . . . . . . . . . . . . . . .57
E. No Claims for Removal. . . . . . . . . . . . . . . . . . . . . . . .57
XXVII. MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . .58
A. City Warranty of Title and Authority . . . . . . . . . . . . . . . .58
B. Use of Language. . . . . . . . . . . . . . . . . . . . . . . . . . .58
C. Caption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
D. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
E. Time of Essence. . . . . . . . . . . . . . . . . . . . . . . . . . .58
F. Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . .58
G. No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
H. Limited Effect of Approval by
Seattle Center Director. . . . . . . . . . . . . . . . . . . . . . .59
I. No Relationship. . . . . . . . . . . . . . . . . . . . . . . . . . .59
J. Powers of the City . . . . . . . . . . . . . . . . . . . . . . . . .59
K. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . .59
L. Enforcement of this Agreement. . . . . . . . . . . . . . . . . . . .59
M. Invalidity of Particular Provisions. . . . . . . . . . . . . . . . .59
N. Costs of Suit and Attorneys' Fees. . . . . . . . . . . . . . . . . .59
O. Applicable Law; Venue. . . . . . . . . . . . . . . . . . . . . . . .59
P. Previous Agreements Superseded . . . . . . . . . . . . . . . . . . .59
Q. Construction of Agreement. . . . . . . . . . . . . . . . . . . . . .60
R. Incorporation of Exhibits; Entire Agreement. . . . . . . . . . . . .60
-vii-
PREMISES USE & OCCUPANCY AGREEMENT
THIS AGREEMENT is entered into by and between THE CITY OF SEATTLE
(hereinafter "the City"), a municipal corporation of the State of Washington,
and SSI SPORTS, INC. (hereinafter "SSI"), a corporation organized and existing
under the laws of the State of Washington.
RECITALS
WHEREAS, SSI is the owner and operator of the "SuperSonics" as defined
herein; and
WHEREAS, the City is the owner and operator of the Current Facility; and
WHEREAS, the Current Facility is a thirty year old structure that can no
longer provide the SuperSonics with a playing venue that is either structurally
or economically comparable to the sites in which other NBA teams play; and
WHEREAS, it is not economically feasible for the SuperSonics to continue
playing professional basketball games in the Current Facility after the end of
the 1993-94 NBA championship playoffs; and
WHEREAS, the City desires to construct a new, state of the art professional
basketball playing facility in order to enhance the City but cannot do so
without a long-term, principal user; and
WHEREAS, in order to induce SSI to become the principal user of a new
playing facility on a long-term basis in lieu of having the SuperSonics play in
an alternative venue, and to maintain the SuperSonics NBA franchise in Seattle,
the City will construct a new Seattle Center Coliseum to replace the Current
Facility; and
WHEREAS, the City and SSI desire to enter into an agreement specifying the
terms and conditions under which SSI will use a new Seattle Center Coliseum and
certain other facilities at Seattle Center on a long-term basis for the playing
of professional basketball by the SuperSonics; and
WHEREAS, the City and SSI intend to refine their new Seattle Center
Coliseum use and occupancy agreement by continuing, after the execution of this
Agreement, to negotiate and reach agreement regarding the terms and conditions
under which SSI shall conduct and engage in, directly or indirectly through one
or more third parties with which SSI may subcontract to engage in and conduct
food and beverage concession sales and novelties concession sales in and from
such new Coliseum, which agreements shall become the Food and Beverage Service
Agreement and Novelties Concession
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Agreement the parties have intended to attach and incorporate into this
Agreement as Exhibits "H" and "I," respectively; and
WHEREAS, the City and SSI intend to further refine their new Seattle Center
Coliseum use and occupancy agreement by also continuing, after the execution of
this Agreement, to negotiate and possibly reach agreement regarding the terms
and conditions under which SSI may be permitted to conduct and engage in,
directly or indirectly through one or more third parties with which SSI may
subcontract to conduct and engage in, the operation of a full-service restaurant
in and from a proposed SSI restaurant facility on that portion of Lots 7 and 8,
Block 31, D. T. Denny's Plan of North Seattle (or "North Seattle Addition"), as
recorded in Vol. 2 of Plats, Page 77, Records of King County, Washington, that
is currently occupied by the West half of the structure commonly known as the
"NASA Building" located on such site, together with such structure and any other
building that SSI, with the Approval of the Seattle Center Director,
subsequently erects on such site for the operation of such sit-down service
restaurant;
NOW, THEREFORE,
IN CONSIDERATION of the mutual promises, covenants, agreements, and
performances described herein, the parties hereto agree as follows:
I. DEFINITIONS
All words in this Agreement bearing initial capitals, other than
proper nouns, section headings or words required to be capitalized for proper
usage, are defined terms and shall have the meanings specifically assigned to
them in this section.
As used in this Agreement, the following terms and words are
hereby defined as follows:
A. "Advertising" means any printed or verbal announcement or display
of any kind intended to promote, directly or indirectly, the sale or rental of a
service, an admission ticket to an event, an interest in a product, commodity or
other form of property, or the expression of any other commercial or
noncommercial message other than directional, health or safety messages.
B. "Agreement" means this Agreement, as from time to time amended in
accordance with the terms hereof, including the license to use the Coliseum for
Home Games.
C. "Applicable Taxes" means all taxes and governmentally imposed
assessments upon the charging of a fee for admission to any Home Game or upon
the exercise of any right granted by this Agreement.
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D. "Approval" means the prior written consent of a party hereto or a
designated representative thereof.
E. "Basketball and Other Novelties" means any general merchandise,
goods, wares, and publications including without limitation those bearing the
symbol, mark or name of the NBA, the SuperSonics, or any other NBA team, as well
as all other general merchandise or items without limitation, except Food,
offered for sale in the Coliseum at Home Games.
F. "City" means The City of Seattle.
G. "Club Seats" means the no more than 1,100 Seats within the
Coliseum, that are reserved on any Day of Game for holders of "Club" admission
tickets, as marked on the attached Exhibit "A" or as revised by SSI by a notice
to the Seattle Center Director transmitting a revised exhibit.
H. "Coliseum" means the enclosed sports facility with not less than
17,200 seats to be located on the following property, as more fully depicted on
Exhibit "B":
As Recorded In Records of
Block(s) Plat King County, Washington
31 Supplemental Plat of Vol. 3 of Plats, Page 80
D.T. Denny's Plan of
N. Seattle, EXCEPT the
West 93.06 feet of
Lots 9 & 10 thereof.
32 & 35 D.T. Denny's Home Vol. 3 of Plats, Page 115
Addition to Seattle
36 D.T. Denny's Third Vol. 1 of Plats, Page 145
Addition to Seattle
and renovated as contemplated by the parties herein, together with all
equipment, fixtures, and other appurtenances incorporated therein pursuant to
this Agreement.
I. "Coliseum Redevelopment Project" means all work of any kind or
nature associated with the demolition of the Current Facility; the construction
of those portions of the Coliseum that are to be completed by the City pursuant
to this Agreement, rather than by SSI or any of its subcontractors,
concessionaires, or any other entity; and the City's modification, in any
respect, of any other City property that is required in connection with any such
work, including but not limited to City utility lines serving the Coliseum, the
SSI Retail Facility, and Practice Facility.
J. "Commissioner" means the party designated by the NBA as the
principal officer of the NBA.
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K. "Courtside Club" means approximately 500 seats within the
"Courtside Club Area" of the Coliseum designated on the attached Exhibit "A"
that are reserved on any Day of Game for holders of "Courtside" admission
tickets.
L. "Current Facility" means the structure that the SuperSonics
currently use for the playing of professional basketball games in Seattle,
Washington.
M. "Day of Game" means the portion of the calendar day on which a
Home Game is scheduled to be played in the Coliseum commencing at 9:00 AM and
ending at 12:00 midnight of that day, unless otherwise specifically provided in
this Agreement.
N. "Food" means any item of food or drink, without limitation except
for water made available from public drinking fountains or sinks, that is sold,
given without charge, or in any other manner dispensed in or from the Coliseum.
O. "Function Rooms" means and includes the Guest Lounge together
with its adjacent restroom, coat closet and vestibule, and the areas on the
Lower Concourse Level of the Coliseum designated as "shell space" on the
attached Exhibit "C".
P. "Home Game" means l) any pre-season, regular season, conference
playoff, or championship playoff professional basketball game played pursuant to
a schedule established by the NBA in which the host team is the SuperSonics
except for up to four (4) of such games that the NBA determines shall not be
played in Seattle, such as a demonstration game scheduled by the NBA to be
played in a city without an NBA franchise or in a foreign country, and 2) five
additional events for which no admission is charged, or where an admission
charge (less Applicable Taxes) is donated to a nonprofit charitable
organization.
Q. "NBA" means the National Basketball Association and its
successors, assigns or designees or the professional basketball league or
organization of which SSI is a member.
R. "Parking Garage" means a multi-deck parking facility at Warren
Avenue and Thomas Street having the maximum number of parking spaces allowable
under applicable law, ordinance and regulation, a portion of which facility is
made available for use and occupancy by SSI as provided in Subsection VII. C of
this Agreement.
S. "Practice Facility" means the site depicted on the attached
Exhibit "D" and made available to SSI pursuant to the Ground Lease Agreement
attached hereto as Exhibit "E," providing for the construction and use of a
building thereon for the practicing of basketball and the installation or
erection of signage as allowed by law.
-4-
T. "Premises" means the areas identified in Subsections VII.A-D,
hereof, and made available to SSI for use and occupancy pursuant to this
Agreement.
U. "Premium Seats" means those seats located in areas designated as
Suites, the Courtside Club, and Club Seat areas of the Coliseum.
V. Premium Seat Marketing Agreement" means the March 22, 1993
"Premium Seat Tickets, Title Sponsorship and Marquee Changeable Copy Sign
Marketing Agreement" executed by the parties, as amended.
W. "Project Architect" means NBBJ, the professional architectural
firm of that name in Seattle, Washington, or such other architect(s) or
architectural firm(s) as may be designated by the Seattle Center Director as the
principal architect for work on the Coliseum Redevelopment Project.
X. "Seats" means any seats in the Coliseum from which professional
basketball events may be viewed.
Y. "Seattle Center Director" means the Director of the City's
Seattle Center Department or such official's designee.
Z. "South Coliseum Parking Lot" means the passenger vehicle parking
stalls on the south side of the Coliseum in the area depicted on the attached
Exhibit "B."
AA. "SSI" means SSI Sports, Inc., the corporation owning and
operating the Seattle NBA franchise, and its successor(s), assigns, or
designees.
AB. "SSI Box Office Facility" means the office space (if any) on the
west side of the Coliseum that has been designed for ticket sales administration
purposes and one ticket booth immediately contiguous to such office space.
AC. "SSI Retail Facility" means the approximately 5,000 square feet
of street-level space plus such additional basement space as shall be designated
by the Seattle Center Director in the West Court Building located on the West
93.06 feet of Lots 9 and 10, and the South 45.08 feet of the West 93.06 feet of
Lot 11, Block 31, D. T. Denny's Plan of North Seattle (or "North Seattle
Addition"), as recorded in Vol. 2 of Plats, Page 77, Records of King County,
Washington, as depicted on the attached Exhibit "F" made available to SSI
hereunder for the development of a retail sales business.
AD. "SSI Suite" means the center court luxury suite in the Coliseum
that is directly opposite the basketball scorers' table location.
-5-
AE. "SuperSonics" means the NBA professional basketball team owned
and operated by SSI, and its successors, transferees or assignees.
AF. "Supplemental Parking Spaces" means the number of parking spaces
outside the Parking Garage that are necessary to park the vehicles of Courtside
Club ticket holders, Club Seat ticket holders, members of the press, SuperSonics
sponsors, and SuperSonics employees for any Home Game that cannot be
accommodated in the Parking Garage, which spaces shall include spaces in Seattle
Center's "Lot 4" and any parking lot developed at the site of the High School
Memorial Stadium on property owned, leased, or otherwise under the control of
the City.
AG. "Term" means the Term of this Agreement as set forth in Article
11.
AH. "Ticket Sales Proceeds" means the gross revenue derived from the
sale of tickets for a Home Game plus the value of all "complimentary" tickets
provided or exchanged for any goods or service less applicable admission taxes.
AI. "Unlimited Use Facilities" means the SSI Retail Facility, SSI Box
Office Facility, the Practice Facility, and the following areas in the Coliseum:
the approximately 6,000 square feet of space designated as the Home Team
Dressing Room, the Training Room, SSI storage facilities, and SSI Suite, as
depicted on the attached Exhibit "G-1."
AJ. "Use Commencement Date" means the date when SSI may legally
commence its use, enjoyment, and occupancy of the Coliseum as documented by the
City's issuance of a Certificate of Occupancy for the Coliseum.
II. TERM; USE PERIOD
The Term of this Agreement shall commence on the date it is executed
by an authorized representative of each of the parties hereto. SSI's use and
occupancy rights to the Premises shall commence on the Use Commencement Date.
SSI's use and occupancy rights with respect to the Premises and the Term of this
Agreement shall end on September 30, 2010, unless terminated earlier pursuant to
the provisions hereof.
Subject to the provisions of this Agreement, SSI shall schedule and
ensure that the SuperSonics play all Home Games other than pre-season games
exclusively in the Coliseum after the Use Commencement Date.
-6-
III. TERMINATION OF CURRENT AGREEMENT PROVIDING SEATTLE
CENTER SPACE FOR SUPERSONICS HOME GAMES USE
Notwithstanding anything to the contrary in the agreement executed on
or about July 19, 1983, between the City and SSI's predecessor in interest, the
Seattle SuperSonics Corporation, regarding use of the Current Facility, and the
seven amendments to that agreement, such agreement shall terminate as of August
1, 1994, and SSI and the City shall have no further obligations to each other
under that amended agreement except as to any unresolved liabilities that may
have arisen during the period that agreement was in effect, including but not
limited to, any sums due and owing to the City as a consequence of SSI's use of
the Current Facility during the SuperSonics' 1993-94 season including conference
and championship games and the provision of City services in connection with
such use. This Article shall supersede any other provision of this Agreement to
the contrary and shall be applicable in the event this Agreement becomes null
and void or unenforceable for any reason.
IV. COLISEUM DESIGN AND CONSTRUCTION
A. Necessity for Coordination and Communications Between the
Parties. The City and SSI acknowledge and agree that the development and
preparation of documents required for the City's Invitation To Bid on the
Coliseum Redevelopment Project and for the issuance of permits relating to such
work, are all complex and time-consuming tasks requiring close cooperation by
SSI. Such cooperation requires, in particular, the City communicating to SSI
any request for a decision by SSI in a timely manner that will permit SSI
reasonable opportunity to respond, as set forth herein, and SSI's communicating
to the City and the Project Architect, SSI's final decisions about aspects of
such City work that are desired, needed, and required by SSI, including but not
limited to comments and Approvals with respect to detailed plans and
specifications for such work.
B. SSI Access to Information.
1. Designation of "SSI Representative": SSI shall designate a
single individual (the "SSI Representative") who shall be responsible for SSI
involvement with, and SSI's responses and Approval regarding the design and
construction of the Coliseum Redevelopment Project. SSI may change the SSI
Representative upon written notice to the City.
2. City Communication With SSI Representative: The City shall
direct all requests for SSI action and Approval regarding Coliseum Redevelopment
Project design and construction issues to the SSI Representative and cause the
SSI Representative to receive a copy of all architectural and design plans and
specifications for all construction elements and materials of the Coliseum
Redevelopment Project that are received by the Seattle Center Director.
-7-
C. Liaison Meetings. After consultation with the SSI Representative
and the Director, the Project Manager shall schedule Coliseum Redevelopment
Project liaison meetings to be held not less frequently than bi-weekly, for
discussions between the Project Manager, the SSI Representative and, as required
depending on the state of the Coliseum Redevelopment Project, the Project
Architect and/or the Construction Manager (if any). Upon the Project Manager's
receipt of a request by SSI, or at such additional times as the Project Manager
deems necessary, the Project Manager shall invite and schedule, as desired, the
Project Architect, Construction Contractor's representative(s) and Coliseum
Redevelopment Project consultant(s) to attend any such meeting(s) to facilitate
continuing discussions and information gathering by the parties hereto regarding
the Coliseum Redevelopment Project. A party may also invite to any such meeting
any other person but the expense (if any) of such other person's attendance and
participation shall not constitute an expense of the Coliseum Redevelopment
Project unless the same is authorized by the Project Manager. The SSI
Representative's receipt of notice of, or participation in, any such meeting
shall not constitute, by itself, SSI Approval of any matter discussed during
such meeting.
D. SSI Review of Design, Plans, Specifications and Construction.
The Project Manager shall ensure that the SSI Representative is provided the
opportunity to become actively involved and to serve as an equal participant
with the City in on-going decision-making with respect to the design and
construction of the Coliseum Redevelopment Project, whether such decision-making
occurs during the Design phase or the construction phase of the Project. In
this connection, and in recognition that the Coliseum Redevelopment Project is
being designed and built primarily for SSI's use and must meet SSI's needs, the
Project Manager shall ensure that in the bi-weekly liaison meetings and
otherwise, as necessary, until completion of construction, the SSI
Representative is provided a reasonable opportunity to review and comment on all
design features of the Coliseum Redevelopment Project affecting the playing or
viewing of professional basketball or such rights or obligations as SSI may have
pursuant to this Agreement, including but not limited to specific Coliseum
designs, plans, and specifications and changes thereto, including both
functional or aesthetic components, as well as on the status of construction
progress. Any question regarding whether or not a design, plan or specification
change or a construction related matter requires review and participation by the
SSI Representative shall be resolved in favor of its being significant and
warranting the involvement of the SSI Representative in decision-making with
respect thereto. The SSI Representative shall review and provide comment, as
contemplated in this subsection in an expeditious and reasonable manner;
provided, that in the event the SSI Representative's review of, and comment on,
any particular design, plan, or specification element or any proposed change
thereto is required on or by a particular date and time, the Project Manager
shall
-8-
provide reasonable advance notice to the SSI Representative of such need and
identify the specific date by when such review and comment must be completed and
provided. If, in the exercise of his or her reasonable discretion under the
circumstances, the Project Manager determines that the SSI Representative's
response is required so quickly that there is insufficient time to allow for
written notice of the need for such SSI Representative's review and comment by
the critical date, such notice may be given orally, but shall then be
immediately confirmed in writing by the Project Manger. In the event that no
comment is received by the Project Manager on or by the specific date for
response, from or on the behalf of the SSI Representative, and provided
reasonable advance notice has been provided to the SSI Representative as
contemplated herein, then SSI shall be deemed to have waived its opportunity to
review and comment on the particular matter(s) made available to it for review
and comment, and the City may proceed as if the SSI Representative had reviewed
and commented consistent with the Project Manager's decision with respect to the
reviewable matter(s).
E. Change Orders Permitted at Project Manager's Discretion. In
circumstances where immediate response by the SSI Representative is not
feasible, the Project Manager may approve the changes without SSI Approval.
Such discretion pertains to changes which will not result in significant
functional change to the Coliseum Redevelopment Project or its component parts
or have an adverse structural effect on the Coliseum Redevelopment Project or in
any manner substantially and negatively affect the rights or obligations of SSI
under this Agreement.
F. Emergency Decisions. The Project Manager may make decisions
without the SSI Representative's Approval in emergency situations where (i) the
Project Manager reasonably believes that destruction of property or injury to
any person is likely to occur in the absence of such decision-making; (ii) there
is no time to consult with the SSI Representative prior to the making of the
decision by the Project Manager; and (iii) the Project Manager's actions in such
circumstances are reasonable and are limited to dealing with the emergency
circumstances. After making any such decision, the Project Manager shall
immediately notify the SSI Representative of the nature of the emergency
circumstances and his or her decision with respect to such circumstances.
G. Design Changes Initiated by SSI. SSI shall have an unrestricted
and unlimited right to propose changes in the design or construction change
request initiated by or on the behalf of SSI or the City with respect to the
Coliseum Redevelopment Project contemplated herein or any aspect thereof.
Implementation of such changes shall require the City's prior Approval, which
Approval shall not be unreasonably withheld or delayed. A design change
proposed by SSI shall be deemed reasonable unless it results in a cost increase
for which SSI does not assume full responsibility; is structurally,
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mechanically or electrically unsafe or unsound; is aesthetically incompatible
with other structures at the Seattle Center as determined by the Seattle Center
Director; would adversely impact in a substantial manner the City's operations
of the Coliseum or any other facility of the Seattle Center or the rights and
interests of any other user or potential user of a Seattle Center facility other
than the Coliseum; or is inconsistent with the Seattle Municipal Code, the
Revised Code of Washington, or Federal law, or any rule or regulation
implementing any such legislation.
H. No Facility Design or Construction Change Without Mutual
Approval.
1. Changes After Execution of Construction Contract: After
execution of the Construction Contract, no design or construction change request
initiated by or on the behalf of SSI or the City that would materially and
adversely affect the playing, exhibition, or viewing of a Home Game or the
exercise of any other right granted to SSI hereunder shall be implemented
without the prior Approval of the SSI Representative and the Project Manager
(and such other official(s) of the City as may be required by law, City Charter,
ordinance, rule, regulation or policy), except to the extent expressly permitted
to the Project Manager pursuant to the other provisions of this Article IV.
2. Changes After Completion of Project: After the completion
of the Coliseum Redevelopment Project, no change in the Coliseum that would
materially and adversely affect the playing, exhibition, or viewing of a Home
Game or the exercise of any other right granted to SSI hereunder shall be
implemented by either party without the prior Approval of SSI and the Seattle
Center Director (and such other official(s) of the City as may be required by
law, City Charter, ordinance, rule, regulation or policy).
I. Deviations from Approved Design and Report for Not Approved
Design or Construction Elements. In the event the City knows that the design or
construction of any component of the Coliseum Redevelopment Project included in
any portion of the Premises specified in Subsections VII.A-D, hereof, deviates
from the design that has received SSI Approval, the Project Manager shall give
immediate notice of such fact to SSI. If such deviation would materially and
adversely affect the playing or viewing of NBA basketball in the Coliseum or
adversely affect any right or obligation of SSI under this Agreement, then SSI
may give the Seattle Center Director notice of SSI's desire to have such
deviation remedied. Upon receipt of such notice, the Seattle Center Director
shall require the Project Architect and/or construction contractor, as
applicable, to correct the deviation or otherwise reasonably satisfy SSI's
objections to the same. In the event the City, upon learning of such a
deviation, fails to give SSI the notice required above, or if the City fails
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to take such action as is reasonably necessary under the circumstances to
require correction of such deviation as provided above, then the City shall be
responsible for costs later incurred during the course of construction to cure
the deviation.
J. Acknowledgement of SSI Involvement and Approval of Decision
Making: SSI and the City acknowledge that through the date of this Agreement,
they have been mutually consulted in connection with all phases of the design
process, that they have been equal participants in all significant decisions
regarding the redevelopment of the Coliseum, that they have received in a timely
manner all architectural and design plans, specifications, and correspondence
relating to the redevelopment of the Coliseum, and that no significant decision
affecting the Coliseum's functional operation, safety, or aesthetics that has
heretofore been disclosed to SSI or the City by the other, by the Project
Architect, or which they otherwise were aware, has been made without their
respective participation and agreement. Except as to the design aspects of the
portions of the Coliseum to be provided to SSI pursuant to the Food and Beverage
Service Agreement and Novelties Concession Agreement, SSI and the City hereby
waive, release and forever discharge the other party and their respective
officers, agents, and employees from any and all claims for reimbursement,
demands, damages, suits, and causes of action of any kind or nature whatsoever
arising out of or related in any respect to any act or omission by the City or
SSI, or any such act or omission of any of their officers, agents, or employees
with respect to the Coliseum's design. Nothing contained herein shall be deemed
a release by SSI or the City against any third party.
V. COLISEUM PLANNING & CONSTRUCTION SCHEDULE; SSI OPPORTUNITIES TO VOID
AGREEMENT
A. Importance to SSI & City of Timely Coliseum Construction: The
City and SSI agree that construction of the Coliseum will cause a severe
economic hardship of revenue and dislocation to SSI and the City, and that time
is of the essence in the completion of the Coliseum so that it will be available
to SSI and the City on the Use Commencement Date. In addition, the City and SSI
agree that use of the Premises by SSI and the City requires months of advance
preparation by SSI and the City, and that delays in the financing or
construction of the Coliseum making it unavailable to SSI or the City on or by
the later of October l, 1995, or the Use Commencement Date will severely damage
SSI and the City.
B. Special Conditions for Expedited City Financing of Coliseum
Redevelopment Project: In order to enable the City to sell bonds for the
financing of the Coliseum Redevelopment Project at an earlier point than could
occur under the timeframe contemplated in the Memorandum of Understanding
approved by Resolution 28726 and to thereby take advantage of potentially more
favorable interest rates for such financing, in addition to
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acting according to the time schedule contemplated in such Memorandum of
Understanding or pursuant to any other authority, the City may sell bonds to
finance such Project from and after the date the Seattle Center Director has
received the following financing assurances (hereinafter the "assurance date"):
1. Third-party Commitments:
a. One or more third-party commitments to secure rights to
the use and occupancy of at least 44 Suites and 250 Club Seats and the use of
tickets to events available for the same, and under the payment terms generally
required from the lessees or acquirers of interests in such Suites and Seats,
respectively; and
b. An irrevocable commitment to secure the rights and
benefits of "title sponsorship" for the Coliseum for the full term of this
Agreement in consideration for compensation payable to the City of not less than
$500,000 per annum for the Term of this Agreement; or
2. SSI Guarantee: An irrevocable written guarantee by SSI, not
requiring any additional consideration to be effective, to remit to the City all
of the payments that would be receivable by the City for the acquisition of the
rights and interests in and to the following, which rights and interests SSI may
acquire upon making such payments, as applicable; Provided, that in the event
SSI provides to the Seattle Center Director the guarantee contemplated in this
subsection and thereupon acquires interests in and to one or more Suites, Club
Seats, the "title sponsorship," or any combination thereof, nothing herein shall
limit the authority of SSI, during the time the "Marketer" under the Premium
Seat Marketing Agreement is endeavoring to market the "title sponsorship," any
Suite, or any Club Seat to the general public, to lease, assign, or otherwise
transfer to one or more third parties, without further liability under its
guarantee, any of the interests SSI has guaranteed or acquired with respect to
any Suite, Club Seat, or the "title sponsorship" pursuant to this subsection:
a. The number of Suites that equals the difference between
44 and the aggregate number of Suites that other parties have committed to lease
or otherwise acquire an interest in and to as of the assurance date; and
b. The number of Club Seats that equals the difference
between 250 and the aggregate number of Club Seats that other parties have
committed to lease or otherwise acquire an interest in as of the assurance date;
and
c. The "title sponsorship" for the Coliseum; or
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3. Combined Third-party Commitments & SSI Guarantee: A
combination of the third-party commitments contemplated in Subsection V.B. 1,
hereof, and the SSI guarantee contemplated in Subsection V.B.2, hereof.
C. Effect of Extension to SSI of Time to Market Suites, Club Seats,
and Title Sponsorship on Coliseum Construction Commencement and Completion
Dates: In the event that the City Council determines, on or after June 10,
1994, based upon the final Seattle Center Director/SSI joint report contemplated
in the Premium Seat Marketing Agreement, that if additional time were allowed
for the required marketing, there would be a substantial likelihood that the
minimum number of binding commitments identified in Subsection V.B, hereof,
could be achieved; and SSI recommends to the City Council that such additional
time be allowed for the necessary marketing to be done; and such necessary
commitments are secured within the City Council's extended deadline, then the
September 1, 1994 construction commencement deadline and the October 1, 1995
construction completion deadline respectively specified in Subsections V.E and
V.F, hereof, and the Use Commencement Date shall each be extended by thirty (30)
days plus the number of additional days allowed by the City Council for the
securing of such minimum number of commitments.
D. Conditions Allowing SSI Nullification of This Agreement Prior to
July 1, 1994:
1. For Failure To Demolish Current Facility: The parties
acknowledge and agree that the Coliseum is to be built on the site of the
Current Facility and that demolition of the unneeded portion of the Current
Facility is a critical and material benchmark toward the completion of the
Coliseum in a timely manner. Therefore, notwithstanding any other provision of
this Agreement, if, for any reason whatsoever, SSI has delivered to the Seattle
Center Director the commitments and guarantees described in Subsection V.B,
hereof, on or by the date specified in such subsection, but demolition of the
unneeded portion of the Current Facility has not commenced on or before July
1,1994, then SSI, at its sole option, may declare this Agreement void. For the
purpose of this subsection,the term "demolition" shall include but is not
limited to the permanent removal of any fixtures and furnishings that the City
intends to scrap or salvage from the Current Facility.
2. For Failure to Grant Approval Regarding Practice Facility
Design or Specifications: In the event that SSI and the Seattle Center Director
and such other official(s) of the City having Approval authority with respect to
the Practice Facility do not agree regarding the design and specifications of
the same, including on-premises signage, so that the required building permits
are issued for such structure on or by the assurance date identified in
Subsection V.B, then SSI, at its sole discretion, may declare this Agreement
void, assuming such
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Practice Facility and on-premises signage proposed by SSI conforms to all
applicable City codes. It is understood by the parties hereto that signage for
the Practice Facility will be governed by the February 4,1994 communication from
the Director of Construction and Land Use that is attached hereto as Exhibit
"X."
E. Condition Allowing SSI Nullification of This Agreement Prior to
September 1, 1994: In the event that, for any reason whatsoever, construction
of the Coliseum does not commence September 1, 1994, and if the construction
commencement and completion dates are not extended pursuant to Subsection V.C,
hereof, or otherwise extended as the parties hereto shall agree upon, then SSI,
at its sole option, may declare this Agreement as null and void.
F. Damages for Untimely Completion of Project.
1. Construction Contract Requirements: The City shall not
enter into any contract for the construction of the Coliseum Redevelopment
Project unless such contract includes the following: (a) a specific schedule
for the construction of the Coliseum Redevelopment Project that provides for the
completion of the Project on or before October 1, 1995, or such later date as is
authorized by Subsection V.C, hereof, or is otherwise agreed upon by the parties
hereto, and (b)a specific provision for the payment to the City of damages in
the event that construction of the Project is not completed on or before such
date, each of which provisions shall be subject to SSI's prior Approval; and the
City secures and maintains through the Use Commencement Date, builder's risk
insurance providing coverage of not less than the periodically-determined value
of the Coliseum Redevelopment Project at various stages of construction.
2. SSI's Share of City's Damages from Contractor: If the
Coliseum is not ready for SSI use and occupancy by the first Home Game scheduled
to be played in the 1995-96 NBA regular season, the City shall pay to SSI as
damages in lieu of any and all other damages payable to SSI by the City, ninety
percent (90%) of the amount that the City secures from any contractor for the
failure to complete construction of the Coliseum Redevelopment Project on or by
October 1,1995, or such later date as is authorized by Subsection V.C, hereof,
or is otherwise agreed upon by the parties hereto, provided that the aggregate
amount received by SSI shall not be greater than the product of the number of
Home Games (other than pre-season games) that cannot be played in the Coliseum
after October 1, 1995, or such later date as is authorized by Subsection V.C,
hereof, or is otherwise agreed upon by the parties hereto, whichever is the
latest, due to such contractor's failure to complete such construction,
multiplied by one hundred thousand dollars ($100,000.00).
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3. SSI's Damages Share Are Additional Rights: The rights
granted to SSI pursuant to the provisions of this subsection shall be in
addition to any other rights and remedies SSI may have against any person (other
than the City) arising from the failure to complete construction of the Coliseum
Redevelopment Project on or before October 1, 1995, or such later date as is
authorized pursuant to Subsection V.C, hereof, or is otherwise agreed upon by
the parties hereto.
VI. SCHEDULING OF HOME GAMES INTO SEATTLE CENTER COLISEUM
A. City's Reserved Advanced Regular Season: On or by January 2,
1995, and on or by every January 31st thereafter through 2010, the City shall
provide SSI with a preliminary schedule identifying seventy (70) dates between
November 1st and the next succeeding April 30th (or any revised term of the NBA
regular season) that the City will reserve for SSI use as a regular season Day
of Game during the next succeeding NBA regular season. Fifty (50) of those
dates shall be nonconsecutive but separated by a period of no greater than seven
consecutive days and shall not include any Monday; at least fifteen (15) of the
fifty (50) dates shall be Fridays, and fifteen (15) shall be Saturdays. The
twenty (20) other dates may be consecutive with themselves and with any of the
fifty other dates and may include up to four (4) Mondays. The City expressly
agrees that all such dates shall be reserved for the exclusive use of SSI, and
that neither the City, itself, nor any third party shall be allowed to use the
Coliseum for any purpose, unless and until such dates are selected or rejected
by SSI.
B. SSI's Selection of Regular Season and Preseason Game Dates: On
or by August 15, 1995, and on or by every August 15th through 2010, SSI shall:
1. SSI's Initial Selection of Dates: Select the particular
dates for regular season Home Games established by the NBA for the next such
season from the seventy (70) proposed dates for the playing of regular season
Home Games at the Coliseum, or such alternative dates as the NBA shall have
designated as Home Game dates if such alternative dates have not been previously
booked by the Seattle Center by the time such designation is communicated by
notice to the Seattle Center Director, and provide notice to the Seattle Center
Director regarding which dates have been selected. Upon receipt of such notice,
the Seattle Center Director shall schedule and reserve the Coliseum on each
selected Day of Game for SSI's potential use. Any date not identified as a
"selected date" in such a notice shall be deemed to be a rejected date, and the
City may use each such date for whatever purposes it desires.
2. SSI's Release of Dates Not Selected by NBA: Immediately
after receiving notice from the NBA of the dates established by the NBA for Home
Games, provide notice to the Seattle Center Director that all other dates then
reserved by the
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City for SSI use are released for whatever use the City may make of such date.
C. SSI's Selection of Additional Event Dates: On or by September 1,
1995, and on or before every succeeding September 1st through 2010,SSI shall
notify the-Seattle Center Director of any additional dates desired for preseason
games and the five (5) additional events referenced in Subsection I.P.2) of this
Agreement in the Coliseum, upon receipt of which notice the Seattle Center
Director shall schedule and reserve for SSI use of the Coliseum on each such
selected Day of Game except for dates that as of the Seattle Center Director's
receipt of such notice, had already been committed or are being reserved or held
for another event.
D. Playoff Game Date Selection: SSI shall provide notice to the
Seattle Center Director of all additional dates during the months of April, May
and June that have been tentatively scheduled or are desired by the NBA or SSI
for conference playoff and championship Home Games, immediately after the NBA
advises SSI of the scheduling of, or the NBA's desire for, the same. Upon
receipt of such notice from SSI, the Seattle Center Director shall schedule and
reserve the Coliseum for SSI's use on each such selected dates.
E. SSI's Priority for Coliseum Use; SSI Relief For City's Failure to
Make Coliseum Available: In the event that any provision of this section shall
no longer satisfy the requirements of the NBA, then the parties shall negotiate
an amendment to such provision to satisfy the NBA's requirements. In any event,
the parties expressly agree that the provisions are intended to assure that the
City gives sole priority to SSI over all other users of the Coliseum in order to
ensure that the SuperSonics play basketball at the Coliseum each and every Home
Game and that any other use whatsoever by the City or any third person shall be
preempted by such SSI use except where such other use is or would be pursuant to
a contract between the City and a third party that was executed prior to the
City's receipt of notice from SSI of the NBA's requirements. It is further
expressly agreed by the parties that the failure of the City to make the
Coliseum available as contemplated herein for all Home Games at which the
SuperSonics are to play an NBA basketball game would result in irreparable
injury to SSI which could not be redressed through the payment of damages alone,
and that therefore the City acknowledges and concedes that SSI shall be entitled
to injunctive and such other equitable relief as a court may deem appropriate to
prevent any use or occupancy of the Coliseum which conflicts with SSI's use and
occupancy of the Coliseum as authorized herein for such purpose, in addition to
any other remedies available to SSI.
VII. PREMISES LICENSED FOR USE AND OCCUPANCY BY SSI
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Except as otherwise provided herein, the City hereby grants to SSI the
exclusive right and license to full and unrestricted use, enjoyment and
occupancy of the Premises and the right and license to authorize others
designated by SSI to use, enjoy and occupy the Premises, as provided herein in
consideration of SSI's payment of the sums specified in Article VIII, hereof,
and compliance with all other applicable terms and conditions of this Agreement:
A. Unlimited Use Facilities: During the entire Term hereof, SSI
shall have sole and exclusive use, custody and occupancy of the Unlimited Use
Facilities all without interruption or restriction except as otherwise provided
herein.
B. Basketball Court and Related Areas, and Fixtures:
1. Facilities for Use on Any Day of Game: On each Day of Game,
SSI shall have the exclusive use of the areas in the Coliseum necessary for the
playing, exhibition, attendance at, and viewing of professional basketball,
including all equipment and fixtures required for the exhibition of professional
basketball including but not limited to the basketball court, baskets, timing
clocks, and scoreboards; visiting team's locker room; sound, lighting, and
public address systems; and all other equipment and fixtures as may be required
by this Agreement, as depicted on Exhibit "G-2," EXCEPT for the following
portions thereof, which are reserved for exclusive use by the City or one or
more third parties unless Approval for SSI use of any of the same is given by
the Seattle Center Director in the Food and Beverage Service Agreement, the
Novelties Concession Agreement, or otherwise:
a. All portions designated as "Suite" or "storage" other
than the Suite and three storage areas provided to SSI as part of the Unlimited
Use Facilities;
b. All areas designated "electrical," "mechanical,"
"chillers," "ATM," "control room," "janitor," "machine," mezzanine," "radio
control room," "communications," "telecommunications, or "first aid;"
c. The offices and "staging" area in the Southwest
quadrant of the Event Level, the tunnel to the Northwest Pavilion on the Suite
Level, and the areas on the Main Concourse Level designated "fire control" or
"security" together with the adjoining passage;
d. All men's and women's restrooms outside of those in the
Unlimited Use Facilities, whether intended for Suite users, members of a general
audience, crew, or other users;
e. All areas in the Northeast and Southeast quadrants of
the Event Level, regardless of the designation of the room; and
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f. All areas designated as "Vendor Commissary,"
"Concession," and all portions of "Annex D Pavilion"including but not limited to
the loading dock, shell space, locker rooms, generator room, primary electrical
room, and existing kitchen and receiving.
g. SSI's rights with respect to access to and within the
Coliseum under this Agreement shall be non-exclusive, and shall be exercised in
common with the City and other Seattle Center facility or area users requiring
access thereto.
2. Facilities for Use on Other Than a Day of Game: On other
than any Day of Game, SSI shall be provided for practice purposes, if no other
user or event has been scheduled to use the portions of the Coliseum necessary
for the practicing of professional basketball on such day and if such facility
does not need to be prepared in any respect on such day for any user or event
scheduled for any subsequent day and if the City does not need to do maintenance
or repair work on the Coliseum that would be interfered with by such SSI use or
that would interfere with such SSI use, those portions of the Coliseum equipment
and fixtures that are necessary for the practicing of professional basketball on
such day including but not limited to the basketball court, baskets, timing
clocks, and scoreboard.
C. Parking Areas and Spaces:
1. Day of Game Parking: On every Day of Game, beginning two
hours prior to the start of a Home Game and ending two hours after the
conclusion of such activity,the South Coliseum Parking Lot and at least 574
parking spaces in the Parking Garage, or in the Supplemental Parking Spaces, or
in a combination thereof shall be provided to SSI for the exclusive use of
Premium Seat ticket holders, SSI employees, SuperSonics sponsors, and members of
the press credentialed by SSI. SSI shall allocate parking rights first in the
Parking Garage, and then in the Supplemental Parking Spaces in the following
manner: First, three spaces shall be allocated to each Suite; Second, one space
for every four Courtside Club tickets issued; Third, one space for each four
Club Seat tickets issued; and Fourth, in such order as SSI desires, one space
for each SuperSonics sponsor, one space for each member of the press
credentialed by SSI, and one space for each SSI employee.
2. Parking on Other Than Day of Game: Whenever the Coliseum is
made available to SSI for basketball practicing on other than a Day of Game, SSI
may also use, without additional charge, the South Coliseum Parking Lot so long
as such use is restricted to the parking of vehicles of only SSI personnel.
D. Ticket Sales Facilities: SSI shall be provided all ticket booths
in the Coliseum on each Day of Game.
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E. Restrictions on City's Right to Use or Authorize Use of the
Coliseum: The City shall make the Coliseum available for use by individuals and
entities other than SSI only according to a schedule that ensures SSI will play
all Home Games other than preseason games in the Coliseum. The City shall not
use the Coliseum for any purpose, nor permit the use of the Coliseum by any
other person or entity for any purpose, on any Day of Game without the Approval
of SSI. The City shall not permit the Coliseum to be used for semi-professional
or professional basketball, whether or not sanctioned by the NBA, without the
approval of SSI, other than any presentation of basketball played by the "Harlem
Globetrotters." Except as provided in the preceding sentence and Subsection
VII.F, hereof, nothing herein shall restrict the ability or right of the City to
use the Coliseum or permit the use of the Coliseum by others for any purpose on
any dates not used by SSI provided such use by others does not impair SSI's full
enjoyment of all use and occupancy rights granted to it herein by the City.
F. SSI First Right to Use & Occupy Coliseum for Other Franchised
Professional Sports Activities: SSI is hereby granted the first right to use
and occupy the Coliseum for the playing and viewing of a series of professional
sports events involving any professional sport franchise other than one
associated with the playing of semi-professional or professional hockey, which
right shall be exercisable only as follows: In the event the Seattle Center
Director receives a request by a third party for the use and occupancy of the
Coliseum for a series of events by any such professional sport franchise, the
Seattle Center Director shall provide notice to SSI of the general terms and
conditions under which such use would receive Seattle Center approval (including
the amount of rent and the types of other charges applicable to such use) and
the date by when SSI must execute an agreement with the City for such additional
use and occupancy (which agreement may be subject to City Council authorization
and shall be outside the scope of this Agreement). In the event SSI fails to
execute a contract with the City for such additional use by the Seattle Center
Director's specified date, SSI shall be deemed to have waived such right with
respect to that proposed use and the City shall be free to execute an agreement
for such Coliseum use with any other party. Notwithstanding any other provision
hereof, all use and occupation of the Coliseum by SSI pursuant to the right
granted in this subsection shall be governed solely by the terms and conditions
of the pertinent separate agreement executed with respect thereto and not by
this Agreement.
G. No Use of Common Areas: Neither SSI nor any of its officers,
employees, invitees, concessionaires, contractors or any of their subcontractors
shall use any portion of Seattle Center not specifically granted to SSI for its
use and occupancy hereunder, to meet governmental requirements peculiar to SSI's
operations on the Premises or otherwise, without the Seattle Center Director's
Approval. Whenever SSI or any of its officers,
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employees, invitees, concessionaires, contractors or any of their subcontractors
shall require any equipment, separate area or special facility to satisfy any
such governmental requirement, such equipment, area, and facility shall be
located within the Premises at SSI's sole expense.
VIII. SSI PAYMENTS TO THE CITY
A. Payments Due: In consideration of the license to full use and
enjoyment of the Premises, the right to engage in concession sales of Food as
well as Basketball and Other Novelties, all as provided in the separate
agreements authorizing such use attached as Exhibits "H" and "I", hereto, and
the providing to SSI of various services and facilities, all subject to the
provisions of this Agreement; and the marketing of Suite, Courtside Club, and
Club seats and tickets, the Coliseum's "title sponsorship," and opportunities
for display advertising on changeable-copy "marquee" signs, all subject to the
provisions of the Marketing Agreement, as amended by the parties thereto, SSI
shall pay to the City the following sums:
1. Rent:
a. Annual Rent: An initial annual rent of $800,000, for
the period of October 1, 1995, through September 30, 1996, and for each twelve-
month period from and after October 1, 1996, an adjusted annual rent as provided
in Subsection VIII.A.1.b, hereof, which shall be due and payable in
approximately equal quarterly installments, in advance, on the first day of each
and every three-month period during the Term hereof; Provided, that in the event
SSI's use and occupancy does not commence on October 1, 1995, or such later date
as is authorized by Subsection V.C, hereof, or is otherwise agreed upon by the
parties hereto, whichever is the latest, then the annual rent or adjusted annual
rent shall be prorated on a daily basis, and SSI shall pay only the pro-rated
annual rent or adjusted annual rent during the period between the Use
Commencement Date and the next succeeding September 30th.
b. CPI Adjustment: The annual rent shall be increased
each October 1st, beginning in 1996, to reflect the total percentage increase in
the "West-A" Consumer Price Index (CPI) for All Urban Consumers, All Items
(1982-84 = 100), as published by the U.S. Department of Labor, Bureau of Labor
Statistics, or its successor, between September of the year in which the
adjustment is made and September of the immediately preceding year; provided,
that in no event shall any annual adjustment be less than +3% or more than +7%
of the annual rent or adjusted annual rent due for the immediately preceding 12-
month period; provided, further, that in the event such CPI is discontinued or
if the formula upon which the CPI is based is substantially changed, the parties
shall agree upon another similar index to be used to calculate the contemplated
adjustments, and in the event of an inability to agree, the
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parties shall request the American Arbitration Association or its successor to
establish an appropriate adjustment standard; provided, further, that in the
event of change in the index base of (1982-84 = 100) the parties shall apply
whatever conversion factor is necessary to establish the true percentage in the
CPI in any year(s) in which the index base is changed, and shall thereafter
apply the most recently revised base index; provided, further, that in no such
twelve-month period shall the amount of the annual rent, as adjusted, paid by
SSI be less than $800,000.
2. Additional Rent: In addition to the annual rent, or
adjusted annual rent, SSI shall Pay to the City the following additional rent,
which shall be added to and paid as part of the next proximate quarterly payment
after SSI has received ticket revenue or within thirty (30) days after the date
of an invoice for such rent, as specified below:
a. For preseason games: In the event that the Coliseum is
used pursuant to this Agreement for the playing of any preseason game that is
not one of the five additional, annual events defined herein as a Home Game,
then unless the net receipts received from the sale of tickets to any such games
are donated to charity, SSI shall pay to the City, without invoice, an
additional amount equal to eight and one-half percent (8 1/2%) of the Ticket
Sales Proceeds for such games.
b. For conference or championship Home Games: For the use
of the Coliseum during the term of this Agreement for the playing of any
conference or championship Home Games for any NBA season (the "post-season play-
off series"), then SSI shall pay to the City, without invoice, an additional
amount equal to eight and one-half percent (8 1/2%) of the Ticket Sales Proceeds
for the first two Home Games played in the Coliseum during any such post-season
playoff series. SSI shall retain all revenues from the sale of tickets for all
other conference or championship Home Games played during any such post-season
playoff series.
c. For more than 41 NBA regular season Home Games: In the
event that the NBA regular season is expanded to more than 41 Home Games, then
SSI shall pay to the City, without invoice, an additional amount equal to eight
and one-half percent (8 1/2%) of the Ticket Sales Proceeds for such additional
Home Games.
3. Service Charges: SSI shall pay to the City as a service
charge, and not as rent, within thirty (30) days after presentation of an
invoice therefor unless otherwise specified below, the following:
a. For the City's provision of additional vehicle parking
spaces: The then-applicable parking charge imposed by the City for City-owned
parking spaces, and paid by the City for non-City owned parking spaces,for the
use (i) on any
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Day of Game by Premium Seat ticket holders, SuperSonics sponsors, SSI employees,
and members of the press credentialed by SSI of any parking space in excess of
those in the South Coliseum Parking Lot and 574 of the total number provided at
SSI request in the Parking Garage and as Supplemental Parking Spaces, and (ii)
on any day other than a Day of Game, of any parking space provided at SSI
request in excess of the number allocated pursuant to Subsection VII.C, hereof,
for the holders of Suite Seat Parking Passes and, subject to the Seattle Center
Director's Approval, the holders of Club Seat Parking Passes.
b. For first aid facility services: The full costs
incurred by the City in providing the first aid facility and health care
personnel described in Subsection IX.B, hereof.
c. For Seattle Police Department services: The full costs
incurred for providing Seattle Police Department law enforcement officers for
crowd control to protect SSI employees and basketball game officials, if such
law enforcement officers receive compensation from the City for such activity.
d. Coliseum's "title sponsorship" and marquee Advertising
revenue: The net revenue derived from the sale or licensing of rights to the
Coliseum's "title sponsorship" and from the sale or leasing of the right to any
display opportunity for Advertising on any changeable-copy "marquee" sign on or
associated with the Coliseum, until the City has received a total of $750,000,
per year, from such sources, after which SSI shall pay the City fifty percent
(50%) of such net revenue. For the purpose of this subsection, the term "net
revenue" shall mean the gross receipts from such activity less the expenses
incurred in the marketing of such sponsorship and Advertising that were
authorized by the parties' March 22, 1993 Marketing Agreement or the latest
amendment thereto or any successor to such agreement.
e. Coliseum Advertising fee: The sum of $750,000 for the
exclusive right to construct or have constructed within the Coliseum Advertising
displays and to exercise any of the rights granted by Subsection XII.C, hereof,
with respect to such Advertising, which sum shall be payable in five parts, each
due on or by October 1st of the year in which the specified NBA basketball
season commences:
NBA basketball season occurring
after the Use Commencement Date: Amount Due:
-------------------------------- -----------
First season $250,000
Second season $200,000
Third season $150,000
Fourth season $100,000
Fifth season $ 50,000
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f. Percentage of gross receipts from Food sales from
concession stands: For the exclusive right to offer for sale and to sell Food
in and from concession stands in the Coliseum, that percentage of gross receipts
from such Food sales at events other than Home Games that is specified in the
Food and Beverage Service Agreement that is now or will be attached hereto as
Exhibit "H."
g. Percentage of gross receipts from Food services in
Suites, Club Seat areas, and Function Rooms: For the exclusive right to offer
for sale and to sell Food in Suites, the food service areas associated with Club
Seats, and Function Rooms, that percentage of the gross receipts from such Food
sales at events other than Home Games that is specified in the Food and Beverage
Service Agreement that is or will be attached hereto as Exhibit "H."
h. Percentage of Club Seat gross receipts: For the
exclusive right to offer for sale and to sell any interest in Club Seats in the
Coliseum including admission tickets to Homes Games viewable therefrom and the
Seats provided thereby, that percentage of gross receipts from such sales during
the respective calendar years specified below, which percentage payment shall be
due and payable, without invoice, within thirty-one (31) days after the end of
each calendar quarter in such year:
YEAR PERCENTAGE OF GROSS RECEIPTS DUE:
---- ---------------------------------
1995 60%
1996 58%
1997 56%
1998 54%
1999 52%
2000 50%
2001 48%
2002 46%
2003 44%
2004 42%
2005 and thereafter 40%
i. Percentage of Suite gross receipts: For the exclusive
right to offer for sale and to sell any interest in a Suite in the Coliseum
including admission tickets to Home Games and other events viewable therefrom
and use of the Seats therein, that percentage of gross receipts from such sales
during the respective calendar years specified below, which percentage payment
shall be due and payable, without invoice, within thirty-one (31) days after the
end of each calendar quarter in such year:
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YEAR PERCENTAGE OF GROSS RECEIPTS DUE:
---- ---------------------------------
1995 80%
1996 78%
1997 76%
1998 74%
1999 72%
2000 70%
2001 68%
2002 66%
2003 64%
2004 62%
2005 and thereafter 60%
j. Percentage of gross receipts from Basketball and Other
Novelties: For the exclusive right to offer for sale or rental and to sell or
rent Basketball and Other Novelties on the Premises as authorized in the
Novelties Concession Agreement that is or will be attached hereto as Exhibit
"1," that percentage of gross receipts generated on other than a Day of Game
that is specified in such agreement.
k. Event service costs in excess of City base costs: For
the providing of stage labor, admission, spotlight operators, and other
personnel as well as facilities and equipment specifically requested by SSI to
facilitate the production of any SSI pre-, mid-, or post-Home Game special
activity that is not ordinarily a part of the normal course of producing and
exhibiting a basketball game, the amount by which the City's actual costs for
providing such personnel, facilities, and equipment for such special activity
(calculated at the applicable rate(s) therefor, as published in the then-current
Seattle Center Event Service Manual or its successor publication) exceed the
average City costs for the presentation of a Home Game at which no SSI pre-,
mid-, or post-Home Game special activity occurred during the last half of the
second NBA regular season after the Use Commencement Date.
l. Coliseum conversion for basketball practicing: For the
conversion of the Coliseum to make it usable for basketball practicing on a day
other than a Day of Game pursuant to Subsection VII.B.2, hereof, if the
basketball floor and related equipment have been removed from the event floor to
enable another use to be made of such facility, and, if a third party is
scheduled to make a different use of the Coliseum before the next Home Game, for
the reconversion of the Coliseum to permit such third party's use, the aggregate
charge imposed for the personnel, facilities, and equipment required for such
conversion and reconversion calculated at the applicable City rate(s) therefor,
as published in the then-current Seattle Center Event Service Manual or its
successor publication.
m. Courtside press facilities modification: For the
modification of courtside facilities at SSI's request to
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accommodate an increased number of press credentialed by SSI as provided by
Subsection IX.D.2.a, the reimbursement of all reasonable out-of-pocket costs
incurred by the City in performing such modification work including but not
limited to the expense to add the requested communication lines, television
cables, other equipment, and furnishings.
B. Delinquencies: All payments shall be delinquent if not paid on
or by the date due. Delinquent sums shall bear interest at a rate of l% per
month until paid. Payments made after a delinquency shall be applied first to
accrued interest, and then to the principal sums due.
C. Books and Records; Audit:
1. SSI's Record-keeping Obligation: SSI shall keep true,
separate, accurate, complete and auditable records of gross receipts from the
following:
a. All tickets and credentials issued or sold for
admission to Home Games in the Coliseum (separately identifying revenue from
Club Seats, general admission Seats, and Suite sales or rentals);
b. The sale at events other than Home Games of Food served
or provided in and from the concession stands in the Coliseum;
c. The sale at events other than Home Games of Food served
or provided in and to Suites and the Food service areas associated with Club
Seats in the Coliseum;
d. The sale or rental of Basketball and Other Novelties at
events other than Home Games;
e. The sale of the right to procure any interest in Club
Seats or any ticket allowing use of such a Seat;
f. The sale or leasing of the right to procure any
interest in Suite Seats or any ticket allowing use of such a Seat;
g. The sale of "title sponsorship" rights for the
Coliseum; and
h. The sale of the right to any display opportunity on the
changeable copy "marquee" signs on or associated with the Coliseum.; and
i. The sale of any right to an Advertising display of any
kind or nature in the Coliseum, the revenue from which shall be calculated by
SSI's imputing a value thereto based upon such Coliseum Advertising display,
alone, whether or not
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such Advertising is sold or packaged in combination with other rights.
The form of all records shall be subject to the approval of the City. Such
records shall be retained in King County, Washington, for at least thirty-six
(36) months after the close of the calendar year in which they were generated or
received.
2. City's Recordkeeping Obligation: The City shall keep true,
separate and accurate complete and auditable records of all revenue and
appropriations received for the operation of the Coliseum and of all
expenditures and expenses made and incurred in the construction, maintenance and
operation of the Coliseum, and shall retain such records for at least thirty-six
(36) months after the close of the calendar year in which they were incurred or
paid. The City shall also keep separate categorical records for each expense
item for which the City invoices SSI for reimbursement pursuant to this
Agreement.
3. Audits: SSI and the City each shall permit the other party
from time to time as the other party deems necessary, upon ten (10) days' prior
notice, to annually inspect and audit in King County, Washington, during regular
working hours, all books and records required by this section as well as those
books and records pertaining to the providing or serving of Food by or through a
caterer, that are necessary to verify the accuracy of the revenue received or
payments previously made by SSI or expenditures or expenses paid by the City;
and shall supply the other party with, or shall permit it to make, copies of any
such books and records and any portion thereof, upon the other party's request.
SSI shall further ensure that such inspection, audit and copying right of the
City is a condition of any subagreement or other arrangement under which SSI
permits any other person or entity to carry on a business activity in or from
the Coliseum.
D. Time Limitation on Assertion of Claim for Payment: In the event
that either party claims an amount due to it had not been paid or that it has
paid an amount in excess of any obligation hereunder, said party shall notify
the other party of such claim within six (6) years of the time such amount was
due or in the event of fraud, within three (3) years after the discovery of the
same. The party against whom the claim lies shall pay such amount within thirty
(30) days after the date of such notice or submit that claim to arbitration
pursuant to the provisions of Article XXV of this Agreement.
IX. UTILITY, PERSONNEL, AND OTHER SERVICES AND
RESPONSIBILITIES
A. General Utilities.
1. City Responsibilities: Except as otherwise provided herein,
the City shall provide, at its sole expense,
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electricity, water, heating, air conditioning and ventilation, sewer and solid
waste removal, and all other utility services that are required for the use of
the Coliseum as contemplated herein, and shall have installed a reasonable
number of pay telephones in the Coliseum for public use and separate meters for
the measurement of electricity and water use in the SSI Retail Facility and
areas of the Coliseum provided to SSI under the Food and Beverage Service
Agreement. The City shall be responsible for the immediate repair of any
malfunction or failure of any utility service provided by the Seattle Center
Department and shall be liable for any interruption or impairment of SSI's use,
enjoyment and occupancy of the Coliseum or SSI Retail Facility resulting from
any such utility system malfunction or failure to repair such service that is
directly caused by an act or omission of Seattle Center Department personnel.
2. SSI Responsibilities: SSI shall secure, at no expense to
the City, all gas, electricity, water, sewage, and solid waste removal utility
services for the SSI Retail Facility, the Practice Facility, and all concession
areas within the Coliseum, and such separate telephone service SSI desires for
its own use of the Coliseum, the SSI Retail Facility and the Practice Facility,
and all meters required to measure SSI's receipt of such services that are not
installed by the City hereunder. SSI shall not install on the Premises any
fixture, furnishing, or trade equipment that exceeds the capacity of any utility
or waste facility for such location. SSI shall make arrangements with all
appropriate utility service providers for their direct billing to SSI for the
delivery of such services to SSI and shall pay, before delinquency, all fees and
charges for the installation, change, and relocation of every point or means of
service by any utility or waste line or system and such utility service.
B. First Aid Facility: The City shall provide and operate for the
benefit of SSI's officers, employees, and invites, commencing two (2) hours
prior to and ending forty-five (45) minutes after each Home Game, a first aid
facility in the Coliseum staffed by qualified paramedical personnel and equipped
with cardiac resuscitation and emergency intervention equipment of the sort that
is commonly available in Seattle "Medic One" units.
C. Public Address Facilities: Prior to SSI's first Home Game in the
Coliseum during the Term of this Agreement, the City shall install a state of
the art public address system and specialized musical sound system within the
Coliseum having technical characteristics agreed upon by SSI and the City. On
every Day of Game the City shall provide SSI with exclusive access to, and
control of, such systems. Notwithstanding any other provision hereof, the City
shall have the right to control and use the public address system on every Day
of Game for general safety, health, and legal announcements including but not
limited to those for emergency or crowd control purposes, all when and to the
extent determined necessary by the Seattle Center
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Director, Fire Chief, Police Chief, or any of their subordinate officers.
D. Scoreboard and Time Clock Facilities:
1. Provision and Installation of Equipment: SSI shall provide
and have installed in the Coliseum, at SSI's sole expense, the following
equipment:
a. A center court scoreboard having at least four sides
usable for professional and amateur basketball, hockey, wrestling, and tennis
game or match statistics documentation, complete with all necessary hoisting
equipment, as well as on each side, a changeable message center and Seattle
Center logo or designation of a size and appearance satisfactory to the Seattle
Center Director, together with the necessary hardware and software for the
programming of such scoreboard for such sporting events; provided, that to
satisfy its obligations regarding the center court scoreboard, SSI may use all
or any of those component parts of the scoreboard installed in the Current
Facility.
b. A scorers' table and reader boards all of a respective
size, weight, and storability that is subject to the Approval of the Seattle
Center Director, which shall not be unreasonably withheld, which scorers' table
and reader boards shall be part of the Advertising displays referred to in
Subsection XII.C, hereof, and which shall not be used by the City or any other
third person or entity except pursuant to Subsection IX.D.3, hereof, or with the
specific prior agreement of SSI.
2. Set-up Responsibilities: On every Day of Game, beginning
two hours prior to the scheduled time for the commencement of a Home Game and
ending two hours after the conclusion of such activity, the following facilities
shall be provided by the City, fully set up and ready for use at the City's sole
expense:
a. Courtside facilities designated by SSI and located
adjacent to the basketball court side lines and equipped with all necessary
tables and chairs for teams, officials, and members of the press credentialed by
SSI, including provision for telephone lines, television cables and other
equipment; Provided, that the courtside facilities designated by SSI shall not
be substantially different in size, weight, or storability from the courtside
facilities provided in the Current Facility without the prior Approval of the
Seattle Center Director; Provided, further, that if the number of press
credentialed by SSI is increased beyond the number contemplated in the plans and
specifications for the Coliseum that have received SSI's Approval, and if SSI
requests the City to modify such courtside facilities to accommodate such
increased number, the City shall undertake and complete such modifications and
SSI
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shall reimburse the City's expenses therefor, as provided in Subsection
VIII.A.3.m, hereof.
b. All Premium Seats and all other public seating within
the Coliseum configured for professional basketball, together with the Function
Rooms as depicted on the attached Exhibit "C" each equipped as specified in the
then-current Event Service Manual or its successor publication; and
c. All other areas or facilities within the Coliseum
necessary for SSI's use and enjoyment as provided by this Agreement.
3. Equipment Use: The scoreboard and its controlling
mechanisms shall be made available, without charge by SSI as provided in
Subsection IX.E.3, hereof, for use and operation in connection with any event in
the Coliseum on other than a Day of Game or for non-SSI activity for which such
use is desired by the City or any of its lessees or licensees.
E. Personnel:
1. City-provided personnel:
a. The City shall employ and provide, at its sole expense,
appropriately trained ticket takers, security personnel, parking attendants,
ushers, and janitorial maintenance, backboard repair, and all other support
personnel necessary to operate and maintain the Premises in an efficient and
orderly manner as contemplated herein. As part of this obligation, the City
shall provide at its sole expense at the Coliseum on each Day of Game, at least
two maintenance engineers who are fully competent to determine the cause of and
effect emergency repairs on all utility, and other component and operating
systems and fixtures within the Coliseum.
b. All determinations regarding the number, identity,
sufficiency of training, and competency, of all such personnel shall be subject
to the Approval of SSI; SSI disapproval shall be for only justifiable cause of a
nature and severity like that identified in SMC 4.04.230.F as of the date of
this Agreement. The City shall act within three (3) days to resolve any
complaint by SSI regarding the performance of duties by any individual employed
by the City who provides any service subject to the provisions of this
Agreement. The City warrants and represents that it shall be solely responsible
for any and all acts of omission or commission of all such personnel acting
within the scope of their respective duties, directly or in connection with this
Agreement and shall hold SSI harmless for any and all such acts.
2. Time for Commencement of Work: All personnel provided by
the City necessary for the operation of the Coliseum
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as a professional basketball game facility shall be on duty on each Day of Game
as follows:
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Personnel Time Duties Commence
--------- --------------------
Parking Garage and Supplemental Two and one-half (2 1/2)
Parking Area Attendants hours before scheduled
start of Home Game
Ticket takers/Ushers, Security Two and one-half (2 1/2)
Personnel hours before start of Home Game for
ticket takers and security assigned to
the West Door and access point for
Suites and Club Seats, with all other
such personnel one (1) hour before doors
are opened to the public
Maintenance, Janitorial, other Day of Game
support personnel not otherwise
specified herein
3. SSI's Required Personnel: SSI shall employ or otherwise
secure, train, as necessary, and have on duty at all Home Games in the Coliseum,
such ticket sellers, and scoreboard and game-in-progress information
controllers/operators and technicians, and security personnel for the protection
of SSI's players and game officials as SSI determines are needed. In addition,
upon five (5) days' notice by the City to SSI, SSI shall supply to the City for
direct service to, or under contract with, the City or any of its Coliseum
lessees or licensees, such number of fully trained scoreboard controlling
mechanism operator(s) as are desired by such Coliseum user, which mechanism
operator(s) shall operate the scoreboard controlling mechanism in the manner and
for event(s) and activity(ies) desired by the City or its lessees or licensees.
SSI may charge the City or such other Coliseum user for the providing of such
personnel a fee that does not exceed the pro-rated compensation regularly paid
by SSI for such operator(s) services.
4. Seattle Police Department Personnel: The City shall detail
Seattle Police Department law enforcement officers to control traffic associated
with Home Games, provide security for the Coliseum, and if requested by SSI, for
crowd control to protect players and officials in connection with SSI's use of
the Coliseum.
5. Joint Development of Personnel Performance Standards: SSI
and the City shall jointly develop performance standards for all persons
employed by the City and SSI who provide any service subject to the provisions
of the Agreement as well as performance standards for other operational issues.
Each party shall promptly act on all complaints by the other regarding the job
performance of its respective employees.
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X. MAINTENANCE AND CARE RESPONSIBILITIES
A. General City Responsibilities: Except as specifically provided
in Subsections X.E. and X.F., hereof, the City shall keep the exterior of the
SSI Retail Facility and Coliseum including, but not limited to, roofs, floors,
walls, foundations, structures and structural elements, and all areas
immediately adjacent thereto, together with the Coliseum's interior rooms,
spaces, doors, windows, fixtures, equipment, appurtenances and systems
(including, but not limited to, plumbing, heating, ventilating, air
conditioning, sound, and lighting) in good working order and repair and in a
neat, clean, safe and sanitary condition, and in compliance with the
requirements of all applicable laws, ordinances, rules and regulations at all
times throughout the term of this Agreement at the City's sole cost and expense.
The City shall immediately act to effect such repairs or replacements when
malfunctions or defects arise and, without limiting the generality of any of
this foregoing, shall keep the glass of all windows and doors clean and
presentable, replace immediately all broken glass, paint and refinish the
interior of the Coliseum at regular intervals, keep all exterior door closing
mechanisms functioning; and keep all pipes, drains, toilets, fixtures and basins
clean and free of debris and any obstruction.
B. City Obligation to Annually Reserve Funds for Repairs: The City
warrants that in addition to amounts necessary for ordinary maintenance, it
shall annually reserve for capital maintenance repairs, replacements or
improvements, no less than two hundred twenty-five thousand dollars ($225,000)
per annum, adjusted to include an increase of four percent (4%) per annum.
C. City Obligation to Perform General Renovation of Coliseum in
2003: In addition to the general maintenance obligation specified in Subsection
X.A, hereof, the City shall complete, after the conclusion of the 2002-03 NBA
season and prior to the beginning of the 2003-04 NBA season, a general
renovation of the Coliseum which shall include the complete refinishing and
painting of all interior surfaces, the replacement or reconditioning of all
seating, the replacement of all public address and sound system components that
are no longer state of the art or are unreasonably worn, and the replacement or
repair of all deteriorated fixtures, structural components or utility or other
component systems; Provided, further, that the total amount to be expended by
the City on such renovations shall not be less than three and one-half million
in 1993 dollars ($3,500,000) adjusted pursuant to the CPI adjustment formula set
forth in Subsection VIII.A.1.b, hereof. In order to ensure that such funds are
available, the City shall annually place an amount equal to approximately one-
seventh (l/7) of such aggregate amount into a subfund that may only be used for
the purposes set forth in this subsection.
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D. SSI Remedy for City's Failure to Perform Maintenance or Repairs:
In the event that the City fails to perform maintenance, repairs, replacements
or renovations as required by this Agreement, then SSI may provide the City with
notice which sets forth the nature of the condition requiring such action. In
the event that the City fails to perform maintenance, repair, replacement, or
renovation work within a reasonable time after the providing of such notice and
such failure has an adverse impact on SSI's full use of the Coliseum, then SSI
may elect to: (i) submit the matter to expedited arbitration, as provided in
Article XXV, herein, in order to secure an order compelling such performance
together with an award to SSI of damages resulting from the City's failure to
perform, or (ii) itself perform such maintenance, repair, replacement or
renovation, or cause the same to be performed at commercially reasonable rates
and offset the expenses incurred for such work against any other amount that is
payable by SSI to the City. In the event that SSI elects to itself perform or
cause such maintenance repair, replacement or renovation to be performed, then
the City shall either agree to such offset by SSI or reimburse SSI for such
expenses, or alternatively, submit to expedited arbitration the issue of whether
the amount of the offset claimed by SSI is commercially reasonable.
E. SSI's Repair, Maintenance and Care Responsibilities: SSI shall
keep the SSI Retail Facility,the Practice Facility, and the Unlimited Use
Facilities of the Coliseum and all improvements to the same including but not
limited to all structural, mechanical, electrical systems as well as all
fixtures, equipment, appurtenances and systems (including, but not limited to,
plumbing, heating, ventilating, air conditioning, electrical, sound, and
lighting), windows, interior spaces and interior doors therein in good working
order and repair, in a neat, clean, safe and sanitary condition, and in
compliance with the requirements of all applicable laws, ordinances, rules and
regulations, at all times throughout the term of this Agreement, all at no cost
and expense to the City. SSI shall immediately act to repair or replace any
defective or malfunctioning portion or system element in any such area or and,
without limiting the generality of any of the foregoing, shall keep the glass of
all windows and doors clean and presentable, replace immediately all broken
glass, paint and refinish the interior of the SSI Retail Facility, Practice
Facility, and Unlimited Use Facilities of the Coliseum at regular intervals,
keep all door closure mechanisms functioning; and keep all pipes, drains,
toilets, fixtures and basins within any such area clean and free of debris and
any obstruction. SSI shall not allow, or cause anything to be done whereby the
Premises is damaged in any manner, normal wear and tear excepted.
F. SSI Maintenance and Repair of SSI-Provided or -Installed
Equipment: SSI shall be responsible for providing or performing all
maintenance, repair and replacement of equipment
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that is provided by or installed by or for SSI pursuant to Subsection IX.D.1,
hereof, or otherwise, for use on the Premises.
G. City Remedy for SSI's Failure to Perform Maintenance or Repairs:
In the event that SSI fails to perform maintenance, repairs, replacements or
renovations as required by this Agreement, then the City may provide SSI with
notice that sets forth the nature of the condition requiring such action. In
the event that SSI fails to perform maintenance, repair, replacement, or
renovation work within a reasonable time after the providing of such notice and
such failure has an adverse impact on the City's full use and enjoyment of the
Coliseum, then the City may elect to: (i) submit the matter to expedited
arbitration, as provided in Article XXV, herein, in order to secure an order
compelling such performance together with an award to the City of damages
resulting from the SSI's failure to perform, or (ii) itself perform such
maintenance, repair, replacement or renovation, or cause the same to be
performed at commercially reasonable rates and offset the expenses incurred for
such work against any other amount that is payable by the City to SSI. In the
event that the City elects to itself perform or cause such maintenance repair,
replacement or renovation to be performed, then SSI shall either agree to such
offset by the City or reimburse the City for such expenses, or alternatively,
submit to expedited arbitration the issue of whether the amount of the offset
claimed by the City is commercially reasonable.
H. SSI Assistance with City Recycling Efforts: SSI and City
officials shall periodically consult with each other regarding how City
recycling objectives can best be achieved on the Premises.
XI. CITY'S SUPERVISION AND CONTROL OF SEATTLE CENTER
BUILDINGS AND GROUNDS AND ACTIVITIES
A. General City Rights: The City reserves the exclusive right,
without liability of any kind, to do the following so long as such actions do
not substantially interfere with the viewing and playing of professional
basketball games by the SuperSonics as contemplated herein:
1. Appearance, Size & Location of Seattle Center: Increase,
reduce, and change in any manner whatsoever the number, appearance, dimension,
and locations of the Seattle Center walks, buildings, landscaping, parking, and
service areas, and make improvements, alterations, and additions to the portions
of the Premises that have been made available to SSI for its use;
2. Traffic Regulation: Regulate all traffic within and
adjacent to the Seattle Center;
3. Admission Charges: Impose a reasonable charge for admission
to the Seattle Center and facilities
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therein, including parking facilities at any time or manner except as limited by
this Agreement;
4. Rules & Regulation Promulgation: Promulgate, from time to
time, reasonable rules and regulations regarding the use and occupancy of any
area of Seattle Center; provided that no such rule or regulation that would
directly or indirectly affect any right granted to SSI by this Agreement shall
be promulgated without the Seattle Center Director's having given prior notice
of such action to SSI and at least thirty (30) days to comment on such proposed
action unless such promulgation is because of an emergency reasonably declared
by the Seattle Center Director;
5. Days & Hours For Operations: Determine the days and hours
the Seattle Center and various business operations will be open to the public;
and
6. Size, Number, Type & Identity of Concession Operations:
Determine the size, number, and type and identity of concessions, stores,
businesses, and operations being conducted or undertaken at Seattle Center other
than in the SSI Retail Facility or as authorized in the Food and Beverage
Service Agreement or Novelties Concession Agreement.
B. SSI Principal User: The City expressly agrees that in all
matters to which this Agreement directly or indirectly applies, SSI is the
principal user of the Coliseum and that SSI's convenience and enjoyment of such
use shall be paramount to all other tenants and that no other use by a person or
entity other than the City shall be permitted to conflict with or impair SSI's
convenience and enjoyment of such use. The City shall take no action, or fail
to take any necessary action, which in any manner undermines or impinges upon or
restricts SSI's convenience and enjoyment of the Coliseum, unless specifically
and expressly provided for in this Agreement. All ambiguities in this Agreement
or disputes between the parties shall be resolved in accordance with this
paragraph.
C. Supervision and Control of Coliseum: The City shall at all times
exercise overall supervision and control of the Coliseum, and shall be
responsible for the construction, operation and maintenance of the same as well
as for all contiguous external areas and of all fixtures necessary for SSI's use
except as otherwise provided herein.
XII. SSI EXCLUSIVE RIGHTS REGARDING THE SALE OF FOOD,
BASKETBALL AND OTHER NOVELTIES, ADVERTISING, VIDEO PRODUCTION AND
BROADCAST RIGHTS
A. Exclusive Food Sales & Service Right: SSI is hereby granted the
exclusive right and obligation to sell Food within the Coliseum. The terms and
conditions of such exclusive right shall be as provided in the Food and Beverage
Service
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Agreement between the parties hereto, which agreement shall be subject to and
subordinate to this Agreement and is or shall be attached hereto as Exhibit "H;"
Provided, that such agreement shall not require separate authorization by
ordinance for City execution unless such agreement is inconsistent with the
provisions of paragraph 2.c) of Attachment l to the Memorandum of Understanding
approved by City Council Resolution 28726. It is expressly understood that the
City cannot grant this right to any other party during the Term of this
Agreement.
B. Exclusive Novelties Concession Sales and Rental Right: SSI is
hereby granted the exclusive right to offer for sale or rental, and to sell and
rent Basketball and Other Novelties at, in, and from the Coliseum on any Day of
Game; and at, in, and from the SSI Retail Facility during the Term of this
Agreement. The terms and conditions of such exclusive right shall be as
provided in the Novelties Concession Agreement between the parties hereto, which
agreement shall be subject to and subordinate to this Agreement and is or shall
be attached hereto as Exhibit "1;" Provided, that such agreement shall not
require separate authorization by ordinance for City execution unless such
agreement is inconsistent with the provisions of Attachment 1 to the Memorandum
of Understanding approved by City Council Resolution 28726. Nothing herein or
in such other agreement shall limit the right of SSI to publish, manufacture, or
distribute Basketball and Other Novelties outside the geographic area of the
Seattle Center. It is expressly understood that the City cannot grant this
right to any other party during the Term of this Agreement.
C. Exclusive Advertising Display Service Right: SSI is hereby
granted, subject to the provisions of Subsections XII.C.1-11, hereof, the
exclusive right to provide all Advertising display services within the Coliseum,
SSI Retail Facility, and Practice Facility as more specifically set forth below:
1. Advertising Display's Focus: All Advertising displays in
the interior of the Coliseum shall be designed, to the extent practicable (given
that the sides of the Coliseum are primarily glass) to be primarily viewable by
an audience that is inside, rather than outside, of the Coliseum.
2. Advertisers' Obligation to Respect Family Orientation of
Seattle Center: In exercising the rights granted by Subsection XII.C, SSI shall
ensure that all contracts, agreements and understandings made with respect to
the displaying of Advertising on the Premises require the advertiser to respect
the family orientation of Seattle Center and, in particular, the Coliseum and
SSI Retail Facility in developing copy and designs for Advertising to be
displayed in any such building, and to require that all such Advertising be
appropriate for Seattle Center and such building. In the event that the Seattle
Center Director, in the exercise of such official's reasonable
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discretion, determines that any Advertising displayed in the Coliseum or SSI
Retail Facility contains copy or any design element that is inappropriate to the
family orientation of Seattle Center, the Seattle Center Director may request
SSI to replace such Advertising. SSI shall request substitute Advertising in
the event that copy supplied by an advertiser does not reflect the family
orientation of Seattle Center.
3. Prohibition Against Any Advertising Display for a Tobacco
Product or Certain Alcoholic Beverages: In order to retain a family atmosphere
in the Premises, SSI shall not sell or display any Advertising for any tobacco
product anywhere on the Premises other than in the SSI Retail Facility, shall
not sell or display any Advertising for any alcoholic beverage other than beer
or wine that may be viewed in or from the lobby, concourses, or Seats of the
Coliseum. SSI may sell and display Advertising for alcoholic beverages other
than beer or wine only within the Food service areas associated with Club Seats
and in Suites and in a manner that does not enable people outside of such areas
to read such Advertising
4. Advertising Display Opportunities Available for Hockey
Franchise Acting as "Host Team" in Coliseum: Any semi-professional or
professional hockey franchise using the Coliseum for events in which its team
acts as the "host" or "home team" including but not limited to the Seattle
Thunderbirds Hockey Club, Inc. and its successors and assigns shall have the
exclusive right to provide Advertising services and to sell and display
Advertising solely on the dasherboards erected for any hockey game presented by
such entity in the Coliseum. SSI shall have the right to offer to the
purchasers of SSI's Coliseum Advertising or any portion thereof, the right to
advertise on the dasherboards at a charge to be set by the hockey franchise. If
the purchasers of SSI's Coliseum Advertising or any portion thereof elect not to
advertise on the dasherboards then the hockey franchise shall have the right to
sell Advertising rights on the dasherboards but only at the charge offered to
the purchasers of SSI's Coliseum Advertising or any portion thereof.
5. City's Right to Temporarily Interrupt, Without Compensation
to SSI, Certain Advertising Displays Due to Conflict with Theatrical Performance
or User's Policies or Religious Tenets: Notwithstanding the Advertising rights
granted to SSI herein, the City reserves the right to temporarily interrupt or
otherwise prevent the illumination or display of particular Advertising on any
and all signs installed by or for SSI in the Coliseum (other than the
scoreboard) for any event or activity other than an SSI use authorized under
this Agreement, without having to remit to SSI the payment contemplated in
Subsection XII.C.6, hereof, whenever the Seattle Center Director determines, in
the exercise of such official's discretion, that the illumination of such
Advertising on SSI's sign(s) would conflict with any aspect of a third party's
actual theatrical presentation or activity occurring within the area of the
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Coliseum in which Seats are located (as opposed to the lobby, box office,
concourses, concession facilities, the Food service areas associated with Club
Seats, SSI Unlimited Use Facilities, and similar areas of the Coliseum); or such
Advertising display (whether or not illuminated) would otherwise offend or be
offensive to any announced policy of the Western Interscholastic Athletic
Association, the National Collegiate Athletic Association, or any successor of
either such entity, or any third party Coliseum user as a result of a user's
religious tenet. (The exercise of this reserved right may be illustrated by the
following nonexclusive examples: If the Coliseum were licensed or leased for
use for the presentation of a musical or theatrical performance, circus, or
similar event for which a blacking-out of the house is required during any
portion of the performance itself (in contrast to the intermissions and the pre-
and post-performance ingress and egress periods), then the illumination of
Advertising displays in the area of the Coliseum in which Seats are located
could be extinguished during such portion of the performance. Similarly, if the
Coliseum were licensed or leased for use as the site of a religious
organization's convention, and the religion of the members of such organization
enjoined or proscribed the use of caffeinated beverages, and the Seattle Center
Director is advised that the displaying of Advertising for a caffeinated
beverage at such convention site would be offensive to the religious
organization, then the displaying on SSI's signs of a logo, trademark, service
mark, or other text or design element that promotes the sale or use, or contains
the tradename of any caffeinated beverage could be limited, restricted, or
otherwise interrupted during such third party's use of the Coliseum.) The
City's right to interrupt or prevent the displaying of Advertising as reserved
herein shall be exercised as specified in Subsection XII.C.8, hereof.
6. City's Right to Temporarily Interrupt Advertising Displays
Upon Payment of Compensation to SSI: The City may also temporarily interrupt or
otherwise prevent the displaying of any particular Advertising on any of SSI's
signs during an event upon the remittance to SSI of an amount equal to the pro-
rated charge for such Advertising according to the applicable, published rate
card for the same. For the purpose of this subsection, the term "event" shall
be limited to any activity or presentation occurring in the Coliseum pursuant to
a separate licensing agreement with the City authorizing such use, that is
sponsored by any provider, distributor, or manufacturer or a service or product
in competition with a service, product, or product line advertised on SSI's
signs including but not limited to a meeting of a corporation's shareholders,
one or more concerts by musicians on consecutive or non-consecutive days, or
regional or national sports competition or exhibition. The City's right to
interrupt or prevent the displaying of Advertising as reserved herein shall be
exercised as specified in Subsection XII.C.8, hereof.
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7. City's Right to Allow Temporary Advertising Displays:
Notwithstanding the Advertising rights granted to SSI herein, the City reserves
the right to permit, on such conditions as the Seattle Center Director may
specify in the exercise of such official's discretion, one or more third parties
to display temporary Advertising (whether for commercial or non-commercial
purposes) that is part of the presentation display of an event sponsor, such as
a message incorporated within the staging and lighting, but only during any
event or activity scheduled for presentation, in whole or in part, at the
Seattle Center, including but not limited to Advertising that is by or for one
or more entities or products in competition with any entity or product
advertised on the scoreboard or other sign(s) installed by or for SSI.
8. City Notice to SSI of Need for Advertising Display
Interruption; SSI's Implementation of City Notice: The City's right to
interrupt or prevent the displaying of Advertising, as reserved in Subsections
XII.C.4-6, hereof, may be effected after the Seattle Center Director has given
notice to SSI of such conflict, by requesting that SSI cover such sign(s) or the
image(s) thereon, or by not providing electricity to illuminate the same, and by
specifying the necessary period of such Advertising display interruption.
Immediately following SSI's receipt of such request, SSI shall cover or
discontinue the electricity service to the subject Advertising for the duration
of the specified interruption period.
9. City's Right to Scoreboard Message Center Announcements at
Home Games: At each Home Game SSI shall provide to the City, free of charge,
use of time on the scoreboard message center aggregating not less than four (4)
announcements of approximately fifteen (15) seconds, each, for the promotion of
events being or to be held at the Seattle Center.
10. Advertising Displays Constitute Improvements; Standards for
Construction and Attractiveness: All Advertising displays constructed pursuant
to this Agreement shall be deemed to be "improvements" subject to the provisions
of Article XXI, hereof. No such Advertising display shall interfere, in any
respect, with the City's maintenance of or service in the Coliseum. Unless
otherwise agreed by the parties hereto, the Advertising displays installed in
the Coliseum shall be limited to the number in, and shall have a quality of
construction and display attractiveness that is equivalent to, the displays in
the Salt Lake City Delta Center, as illustrated on Exhibit "J" attached hereto;
SSI and the Seattle Center Director intend, however, to cooperate in the joint
development of standards regarding Advertising displays for the Coliseum to
address issues of number, quality of construction, and display attractiveness in
a manner particularly suited to the Seattle market and the Coliseum as a unique
facility therein and as an integral component of Seattle Center.
Notwithstanding the provisions of
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Article XXV, hereof, in the event of any dispute regarding the number of
Advertising displays or the quality of construction or the display
attractiveness of any such Advertising display that cannot be resolved by
agreement of the parties, such dispute shall be referred to a special
Advertising display panel composed of three arbitrators. One such arbitrator
shall be selected by the Seattle Center Director, another by the President of
SSI, and the third selected by the other two arbitrators. No person shall be
eligible to serve as such an arbitrator if such person, or such person's spouse
or domestic partner is, or has been within the past two years, an employee of
either party hereto or if such person has, or has had within the past two years,
any contractual association with either party hereto.
11. Title Sponsorship Identification: Appropriate
identification signage shall be installed on the exterior and interior of the
Coliseum for the purpose of identifying and giving recognition to the Coliseum's
"title sponsor." All such signage shall be subject to the conditions of
Subsection XII.C.10, and Articles IV and XXI, hereof. No Advertising display of
SSI or any of other user of the Coliseum shall be erected or displayed in a way
that obstructs, covers or otherwise interferes with any identification of the
Coliseum by reference to the name of its "title sponsor."
XIII. EXCLUSIVE VIDEO PRODUCTION, BROADCAST & CABLECAST
TRANSMISSION RIGHTS
SSI hereby reserves and retains, for itself, the exclusive use and
control of all rights to all Home Games or any other professional basketball
games played in the Coliseum other than performances by the Harlem
Globetrotters, including exclusive rights to preserve, transmit, or reproduce
for hearing or viewing such games by whatever means or processes now exist or
may hereafter be developed for such preservation, transmission, or reproduction
including but not limited to radio and television broadcasting, motion picture
and still photography, video taping and closed circuit pay-per-view and all
forms of cablecasting or electronic transmission without any limitation. The
City shall require every other user of the Coliseum including the Harlem
Globetrotters to grant to SSI a first right of refusal with respect to the
exercising of any such preservation, transmission or reproduction rights for and
in connection with such other user's event or activity in the Coliseum;
Provided, that this obligation shall not apply to any other Coliseum user's
event or activity that, as of the date of such Coliseum use, is to be the
subject of a national network broadcast or cablecast, or that is the subject of
a contract enabling a third party to exercise any of such rights in the Coliseum
and at least one other performance venue.
XIV. TICKET ADMINISTRATION
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A. SSI Responsibilities: SSI shall have the exclusive
responsibility for and control of the administration of all sales of tickets to
Home Games except as otherwise provided in the Luxury Suite and Club Seat
Marketing Agreement, including but not limited to the printing and distribution
of tickets, the undertaking and conducting of group, season, and special package
sales; the establishment of any and all prices for basic admission to SSI events
and activities in the Coliseum and any service charge(s) thereon (but not the
establishment by any unit of government of any tax on any such admission or
service charges); collection and counting of receipts and accounting; and the
purchase, installation, and maintenance of all equipment used in connection with
such ticketing. As part of this responsibility, SSI shall assume all costs of
such administration.
B. Complimentary Tickets: SSI shall be authorized to determine in
its sole discretion the number and recipients of complimentary admission tickets
and credentials issued for admission to Home Games.
XV. INDEMNIFICATION; INSURANCE
A. Indemnification:
1. SSI to Indemnify City: Except as provided in Subsection
XV.A.3, hereof, SSI shall indemnify and hold the City harmless from any and all
losses, claims, actions, and damages suffered by any person or entity by reason
of or resulting from any negligent, reckless, or intentional act or omission of
SSI or any of its agents, employees, invitees, concessionaires, contractors and
any of their subcontractors in connection with use or occupancy of the Premises;
and if, as a consequence of any such act or omission, any suit or action is
brought against the City, SSI, upon notice of the commencement thereof, shall
defend the same at no cost and expense to the City, and promptly satisfy any
final judgment adverse to the City; Provided, that in the event the City
determines that one or more principles of governmental or public law are
involved, the City retains the right to participate in such action. Nothing
contained in this subsection shall be construed as requiring SSI to indemnify
the City against liability for damages arising out of bodily injury to persons
or damage to property caused by or resulting from the sole negligence of the
City or its officers, employees, or agents. The indemnification provided in
this subsection shall survive the expiration or earlier termination of this
Agreement.
2. City to Indemnify SSI: Except as provided in
Subsection XV.A.3, hereof, the City shall indemnify and hold SSI harmless from
any and all losses, claims, actions, and damages suffered by any person or
entity by reason of or resulting from any negligent, reckless, or intentional
act or omission of the City or any of its agents, employees, invitees,
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or contractors and any of their subcontractors in connection with use or
occupancy of the Premises; and if, as a consequence of any such act or omission,
any suit or action is brought against SSI, the City, upon notice of the
commencement thereof, shall defend the same at no cost and expense to SSI, and
promptly satisfy any final judgment adverse to SSI. Nothing contained in this
subsection shall be construed as requiring the City to indemnify SSI against
liability for damages arising out of bodily injury to persons or damage to
property caused by or resulting from the sole negligence of SSI or any of its
officers, employees, concessionaires, contractors, or agents. The
indemnification provided in this subsection shall survive the expiration or
earlier termination of this Agreement.
3. Indemnification Regarding Any Alteration, Addition, or
Improvement: Where any bodily injury or damage to property results from or
arises out of any construction, alteration, repair, addition to, subtraction
from, improvement to, or maintenance of, any building, road, excavation, or
other structure, project, development, or improvement attached to real estate,
including moving and demolition in connection therewith, the indemnification
provided pursuant to Subsections XV.A.1 and -.2, hereof, shall be limited to the
extent of the indemnitor's negligence. The indemnification provided in this
subsection shall survive the expiration or earlier termination of this
Agreement.
B. SSI's Liability Insurance: SSI shall maintain at all times
during the use period specified in Article II, hereof, at no cost or expense to
the City, one or more policies of commercial general liability insurance as
required below:
1. Liability Limits: The limitations of liability shall
not be less than Five Million Dollars ($5,000,000.00) Combined Single Limits
(bodily injury and property damage) with a deductible or self-insurance
retention of no more than Two Thousand Five Hundred Dollars ($2,500.00) for
property damage, only.
2. Coverage: Coverage shall be provided for all risk
liability on a "per occurrence" rather than "claims made" basis, for any injury,
death, damage and/or loss of any sort sustained by any person, organization or
corporation (including SSI, or any of its officers, employees and agents) in
connection with or arising out of any act or omission of SSI, or any of its
officers, employees, agents, or assigns upon the Premises and for any activity
performed by SSI under this Agreement and shall include, but need not be limited
to the following types (described in insurance industry terminology):
a. Premises operations liability (O, L & T or M & C);
b. Blanket contractual liability;
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c. Broad form property damage;
d. Independent contractor (O & CP);
e. Automobile liability for owned, leased, hired or non-
owned vehicles;
f. Products and/or completed operations;
g. Personal injury, including coverages A, B, and C with
no employee exclusion;
h. Fire legal liability;
i. Employees as additional insured; and
j. Copyright/Trademark/Tradename infringement.
All such insurance shall be primary to any other insurance that may be
valid and collectable. SSI is not required to provide insurance coverage
against the City's sole negligence, reckless act, breach of this Agreement, or
violation of any law.
3. Authorized Carriers: The insurance described herein shall
be obtained from insurance companies duly authorized to issue such policies in
the State of Washington, and having a rating of "A-" or better.
4. Naming of City as Additional Insured: The City shall be
named as an additional insured in such policy(ies) or an endorsement thereto, to
the extent provided in Subsection XV.B.1, above, in the following manner:
"The City of Seattle is an additional insured for all coverages
provided by this policy of insurance and shall be fully and
completely protected by this policy for any claim, suit, injury,
death, damage or loss of any sort sustained by any person,
organization or corporation in connection with activity upon or
use or occupancy of certain facilities and automobile parking
areas at Seattle Center, as well as any activity performed by the
principal insured or an affiliate of the principal insured under
a Premises Use & Occupancy Agreement with the City.
"The coverages provided by this policy to the City shall not be
terminated, reduced or otherwise changed in any respect without
providing at least thirty (30) days prior written notice to The
City of Seattle, c/o Seattle Center Facility Sales Office, 305
Harrison Street, Seattle, Washington 98109."
C. Evidence of Insurance: SSI shall deliver to the
Risk Manager
Finance Department
The City of Seattle
600 Fourth Avenue
Seattle, WA 98104
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or to such other official(s) and address(es) as City may hereafter specify, a
copy of all policies required hereunder, and all endorsements thereto or other
evidence to the reasonable satisfaction of the City Risk Manager or such
official's successor, that SSI has secured or renewed and is maintaining
insurance as required by this Agreement
1. not less than ten (10) days prior to SSI's first use of any
of the Premises pursuant to this Agreement; and
2. within five (5) City business days prior to the expiration
or renewal date of each such policy; and
3. within five (5) City business days after SSI's receipt of a
written request therefor.
D. Assumption of Risk: The placement and storage by SSI of personal
property on the Premises shall be the responsibility, and at the sole risk, of
SSI.
E. Adjustments of Claims: SSI shall provide for the prompt and
efficient handling of all claims for bodily injury, property damage or theft
arising out of the activities of SSI under this Agreement. SSI shall ensure
that all such claims, whether processed by SSI or SSI's insurer, either directly
or by means of an agent, will be handled by a person with a permanent office in
the Seattle area.
F. Remedies upon Failure to Insure: The Seattle Center Director
shall notify SSI whenever the Seattle Center Director has a reasonable belief
that SSI has failed to secure or maintain insurance as required by this
Agreement. Notwithstanding any other provision of this Agreement, after its
receipt of any such notice, SSI shall not enter upon the Premises until SSI has
secured and is maintaining insurance as required by this Agreement.
Alternatively, at the option of the Seattle Center Director, the City may
procure the required insurance for and at the ultimate expense of SSI, from
whatever source the Seattle Center Director or the City's Risk Manager deems
reasonable. In the event the insurance required of SSI is procured by the City,
SSI shall also reimburse all costs incurred by the City to secure such insurance
coverage as well as a service charge, the initial amount of which shall be Two
Hundred Fifty Dollars ($250.00); Provided, that from and after October 1, 1996,
such initial service charge shall be increased by the amount of the total CPI
adjustment that has been made in the annual rent pursuant to Subsection
VIII.A.1.b, hereof, from October 1, 1996, through the date each such service
charge becomes due and payable.
G. Mutual Release and Waiver: For and in consideration of the
execution of this Agreement, the City and SSI each hereby releases and relieves
the other, and waives its entire claim of recovery from the other for loss or
damage to
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owned or rented property arising out of or incident to fire, lightning and the
perils covered under any extended coverage insurance policy or endorsement
approved for use in the State of Washington, whether such loss or damage is due
to negligence of either party or any agent or employee of either or any other
person unless an insurance policy secured by either party hereto pursuant to
this Agreement or otherwise would become void upon the making of such release
and waiver.
XVI. COMPLIANCE WITH LAW
SSI and the City, each at its sole cost and expense, shall conform and
comply with all applicable laws of the United States and the State of
Washington, the Charter and ordinances of The City of Seattle, rules and
regulations of the Seattle Center, Fire, Health, and Police Departments and
licenses, permits and any directives issued by any authorized official thereof
with respect to such party's responsibilities under this Agreement. In this
connection,
A. Licenses: SSI shall obtain and maintain in full force and effect
during the Term of this Agreement, all licenses, permits and authorizations
required of it by law and conform with all applicable requirements of any
authorized person acting in connection therewith.
B. Nondiscrimination in Employment: SSI agrees to and shall comply
with all State and local laws and ordinances prohibiting discrimination with
regard to race, color, national origin, ancestry, creed, religion, political
ideology, age, sex, sexual orientation, marital status, or the presence of any
sensory, mental or physical handicap.
During the term of this Agreement,
"SSI shall not discriminate against any employee or
applicant for employment because of creed, religion,
race, color, sex, marital status, sexual orientation,
political ideology, ancestry, national origin, or the
presence of any sensory, mental or physical handicap,
unless based upon a bona fide occupational
qualification. SSI shall take affirmative action to
ensure that applicants are employed, and that employees
are treated during employment without regard to their
creed, religion, race, color, sex, national origin, or
the presence of any sensory, mental or physical
handicap. Such action shall include, but not be
limited to the following: employment, upgrading,
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demotion, or transfer; recruitment or recruitment
advertising; layoff or termination; rates of pay or other
forms of compensation; and selection for training, including
apprenticeship. SSI shall post in conspicuous places,
available to employees and applicants for employment,
notices to be provided by the City setting forth the
provision of this nondiscrimination clause. SSI shall take
affirmative action to ensure that all of its employees,
agents and subcontractors adhere to this provision;
Provided, nothing herein shall prevent an employer from
giving preference in employment to a member of his/her
immediate family.
"SSI shall, upon the request of the Director of the
City's Human Rights Department, or his/her designee
(hereinafter the `HRD Director') furnish to the HRD
Director on such form as may be provided therefor, a
report of the affirmative action taken by SSI in
implementing the terms of this provision, and shall
permit access to SSI's records of employment,
employment advertisements, application forms, other
pertinent data and records requested by the HRD
Director for the purpose of investigation to determine
compliance with this provision.
"If, upon investigation, the HRD Director determines
that there is probable cause to believe that SSI has
failed to comply with any of the terms of this
provision, SSI shall be so notified in writing. The
Seattle Center Director shall give SSI an opportunity
to be beard after ten (10) days notice. If the Seattle
Center Director concurs in the findings of the HRD
Director, the Seattle Center Director may suspend or
terminate this Agreement or withhold any funds due or
to become due to SSI pending compliance by SSI with the
terms of these provisions.
"Failure to comply with any of the terms of this
provision shall be a material breach of this
Agreement."
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C. Women's and Minority Business Enterprise Utilization:
1. Incorporation of Seattle Municipal Code Ch. 20.46: The
provisions of Seattle Municipal Code Ch. 20.46, (Women's and Minority Business
Enterprise Utilization Ordinance, as amended), are hereby incorporated by
reference and made a part hereof as if fully set forth herein.
2. SSI's WMBE Obligations: During the use period provided in
Article II, hereof, SSI shall:
a. Make every effort to utilize minority business
enterprises and women's business enterprises as subcontractors;
b. Require its subcontractors to make every effort to
utilize women's business enterprises and minority business enterprises; and
c. Maintain records reasonably necessary for monitoring
compliance with the provisions of Seattle Municipal Code Ch. 20.46.
3. Noncompliance with SMC Ch. 20.46 Constitutes Material
Breach: The failure of SSI or any of its subcontractors to comply with any of
the requirements of Seattle Municipal Code Ch. 20.46 shall be a material breach
of this Agreement.
D. Attendance and Safety Standards: The Seattle Fire Chief or
his/her designee shall have the authority to determine, in the reasonable
exercise of his/her discretion, the number of persons that may be admitted to,
and safely and freely move about in, the Coliseum. SSI shall not sell or issue
Home Game tickets or credentials for admission to the Coliseum in an aggregate
number that exceeds the Seattle Fire Chiefs determined number. The City shall
not admit to the Coliseum more people than the number so determined by the
Seattle Fire Chief. SSI shall not permit any chair or movable seat or other
obstruction to be erected or placed in any Coliseum passageway or fire exit.
Sidewalks, grounds, entries, passages, vestibules, halls, elevators, abutting
streets and all ways of access to the Coliseum shall not be obstructed by SSI or
used for any purpose other than for ingress and egress to the Coliseum.
E. Taxes: SSI shall pay, before delinquency, all taxes, levies, and
assessments arising from its activities in, on, or involving occupancy and use
of any Seattle Center facility including, but not limited to, taxes arising out
of the occupancy of, or activity or business conducted in or from the Premises;
taxes levied on SSI's property, equipment, improvements; and taxes levied on
SSI's interest in this Agreement and any leasehold interest recognized by Ch.
82.29A RCW, and in the event the State of Washington makes any demand upon the
City for the
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remittance of leasehold excise taxes payable by SSI as a consequence of SSI's
occupation of the Premises or withholds funds due to the City to enforce
collection of such leasehold excise taxes, SSI shall immediately pay the same
together with all interest and penalties accessed in connection therewith, or,
at its sole expense, shall contest such action and indemnify the City for all
sums expended by, or withheld by the State from, the City in connection with
such taxation; Provided, that SSI shall not be deemed to be in default as long
as SSI, in good faith, is contesting the validity or amount of any such taxes.
F. Environmental Standards:
1. Definitions: For the purpose of this subsection, the
following terms shall be defined as provided below unless the context clearly
requires a different meaning:
a. "Law or Regulation" means any environmentally related
local, state or federal law, regulation, ordinance or order (including without
limitation any final order of any court of competent jurisdiction of which SSI
has knowledge), now or hereafter in effect including but not limited to the
Clean Air Act, the Federal Water Pollution Control Act, the Safe Drinking Water
Act, the Toxic Substances Control Act, the Comprehensive Environmental Response
Compensation and Liability Act as amended by the Superfund Amendments and
Reauthorization Act of 1986, the Resource Conservation and Recovery Act as
amended by the Solid and Hazardous Waste Amendments of 1984, the Occupational
Safety and Health Act, the Emergency Planning and Community Right-to-know Act of
1986, and the Solid Waste Disposal Act.
b. "Hazardous Substances" shall mean any hazardous, toxic,
or dangerous substance, waste, or material that is regulated under any federal,
state, or local statute, ordinance, or regulation relating to environmental
protection, contamination or cleanup.
2. City Representations & Warranties: The City represents and
warrants that, to the best of its knowledge, the Premises and the real property
on which the Premises are located do not contain any Hazardous Substances found
in violation of any applicable Law or Regulation. The City further represents
and warrants that, to the best of its knowledge, every mandatory requirement of
any applicable Law or Regulation with respect to environmental hazards or
Hazardous Substances affecting the Premises or the real property on which the
Premises is located has been complied with. The City will comply with every
applicable Law and Regulation regulating Hazardous Substances found in, on or
about the Premises or the real property on which the Premises are located and
promptly remedy any violation of each such Law or Regulation except with respect
to Hazardous Substances generated or disposed of by SSI, or any of its
employees, agents, concessionaires, or contractors or any of its
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contractor's subcontractors or materialmen, or other persons or entities.
3. SSI's General Obligations: SSI shall not cause to occur
upon the Premises or permit the Premises to be used to generate, produce,
manufacture, refine, transport, treat, store, handle, dispose, transfer, or
process Hazardous Substances except in compliance with all applicable Laws and
Regulations. SSI shall provide the Seattle Center Director with SSI's USEPA
Waste Generator Number if SSI's activities require such compliance, and with
copies of all Material Safety Data Sheets (MSDS), Generator Annual Dangerous
Waste Reports, environmentally related regulatory permits or approvals
(including revisions or renewals) and any correspondence SSI receives from, or
provides to, any governmental unit or agency in connection with SSI's handling
of Hazardous Substances or the presence, or possible presence, of any Hazardous
Substance on the Premises.
4. SSI's Obligations Upon Violation of Conditions; City's
Rights Upon SSI Violation: If SSI violates any of the terms of this section
concerning the presence or use of Hazardous Substances or the handling or
storing of hazardous wastes, such shall promptly take such action as is
necessary to mitigate and correct the violation. If SSI does not act in a
prudent and prompt manner, the City reserves the right, but not the obligation,
to act in place (for which purpose SSI hereby appoints the City as its agent),
to come onto the Premises and to take such action as the City deems necessary to
ensure compliance or to mitigate the violation. If the Seattle Center Director
determines that SSI is in violation of any law or regulation, or that SSI's
actions or inactions present a threat of violation or a threat of damage to the
Premises, the City reserves the right to enter onto the Premises and take such
corrective or mitigating action as the City deems necessary. All costs and
expenses incurred by the City where an actual violation had or would have
occurred shall become immediately due and payable by SSI upon presentation of an
invoice therefor.
5. Environmental Inspections & Testing: SSI shall provide the
City with access to the Premises to conduct an annual environmental inspection
in January of each year of the term hereof or at such other time as may be
mutually agreed upon. In addition, SSI shall permit the City access to the
Premises at any time, upon reasonable notice, for the purpose of conducting
environmental testing at the City's expense. SSI shall not conduct or permit
others to conduct environmental testing on the Premises without first obtaining
the Seattle Center Director's written consent, which shall not be unreasonably
withheld. SSI shall promptly inform the Seattle Center Director of the
existence of any environmental study, evaluation, investigation or results of
any environmental testing conducted on the Premises whenever the same becomes
known to SSI, and SSI shall provide a written copy of the same to the Seattle
Center Director within thirty (30) days after the preparation of any such
material.
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6. SSI's Removal of Hazardous Substances: Prior to vacation of
the Premises, in addition to all other requirements under this Agreement, SSI
shall remove any Hazardous Substances that SSI or any of its employees, agents,
concessionaires, or contractors, or any of its contractor's subcontractors has
placed on the Premises during the term of SSI's use of the Premises, and shall
demonstrate such removal to the Seattle Center Director's reasonable
satisfaction.
7. SSI's Reimbursement of City Costs: In addition to any
remedy provided above, the City shall be entitled to full reimbursement from SSI
whenever the City incurs any cost resulting from SSI's violation of any of the
terms of this section, including, but not limited to, the cost of clean-up or
any other remedial activity, fines, penalties assessed directly against the
City, injuries to third persons or other property, and loss of revenue resulting
from an inability to release or market the Premises due to its environmental
condition as the result of SSI's violation of the terms of this Agreement (even
if such loss of revenue occurs after the expiration or earlier termination of
this Agreement).
8. Indemnification: In addition to all other indemnities
provided in this Agreement, and notwithstanding the expiration or earlier
termination of this Agreement, SSI and the City agree to defend, indemnify and
hold the other free and harmless from any and all claims, causes of action,
regulatory demands, liabilities, fines, penalties, losses, and expenses,
including without limitation cleanup or other remedial costs (and including
attorneys' fees, costs and all other reasonable litigation expenses when
incurred and whether incurred in defense of actual litigation or in reasonable
anticipation of litigation), arising from the existence or discovery of any
Hazardous Substance on the Premises or on the real property on which the
Premises are located resulting from a violation of the terms of this section, or
the migration of any Hazardous Substance from the Premises or from the real
property on which the Premises are located to other property or into the
surrounding environment that is the result of a violation of the terms of this
section, by that party whether (a) made, commenced or incurred during the term
of this Agreement, or (b) made commenced or incurred after the expiration or
termination of this Agreement if arising out of an event occurring during the
term of this Agreement. The indemnification provided in this subsection shall
survive the expiration or earlier termination of this Agreement.
XVII. CITY'S ACCESS TO PREMISES; INSPECTION, REPAIR,
AND IMPROVEMENT OF PREMISES
A. Access to Premises: SSI and the City shall provide each other
with access to the Premises at all reasonable times to inspect the same and to
make any repair, improvement,
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alteration or addition thereto or any property owned by or under the other
party's control as provided in this Agreement.
B. Permitted Interference With Either Party's Operations: In
inspecting, and in making repairs, alterations, additions, and improvements,
either party may erect barricades and scaffolding in and outside of the
Premises, and may otherwise interfere with the conduct of the other party's
business and operations where such action is reasonably required by the nature
of the work; and such interference shall not be deemed to be a breach or default
under this Agreement. The City shall use its best efforts to minimize
interference with access to and from the Premises and with SSI business and
operations in, on, or from the Premises.
C. Retention and Use of Keys to Premises: Each party shall deliver
to the other such keys as are necessary to enable the other party at any time,
to unlock any door in and to the Premises for which such party may have a
reasonable need of access, excluding doors to vaults, safes, and files. In
addition, City shall have the right to use any and all means that the Seattle
Center Director deems proper to obtain entry to the Premises in an emergency
without liability to SSI except for any failure to exercise due care for SSI's
property. Any entry to the Premises obtained by either party by reasonable
means shall not be construed or be deemed, under any circumstances, to be a
forcible or unlawful entry into, or a detainer of, the Premises or a termination
of SSI's license to use and occupy the Premises or any portion thereof.
XVIII. NO NUISANCES OR OBJECTIONABLE ACTIVITY
Neither party shall permit any objectionable noise, odor, dust, vibration,
or other similar substance or condition to remain on or be emitted from the
Premises; or create any nuisance in or adjacent to the Premises; or do anything
on the Premises that will create an unreasonable danger to life or limb;
Provided, that noise emanating from the audience during a Home Game shall not be
subject to this provision.
XIX. SUBCONTRACTING AND TRANSFER OF OWNERSHIP
A. Subcontracting: SSI shall not subcontract to another person or
entity other than an entity controlled by SSI any of its responsibilities or
obligations under this Agreement without the prior Approval of the Seattle
Center Director, which Approval shall not be unreasonably withheld. Any
subcontract shall be subject to all pertinent terms and provisions of this
Agreement. No subcontract under this Agreement shall release or relieve SSI of
or from any of the obligations on SSI's part to be kept and performed under this
Agreement; provided, however, that provisions of this Subsection XIX.A shall be
inapplicable and
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without effect with respect to the assignment or other transfer of this
Agreement as part of the sale, assignment, or other transfer of any ownership
interest, in whole or in part, in SSI or interest in the Seattle SuperSonics NBA
Franchise.
B. Transfer Of Ownership Interest:
1. SSI's Delivery of Instrument of Assumption and Agreement:
In the event of the sale, assignment or other transfer of any ownership interest
in the SuperSonics or in SSI, or both to any third party or parties, SSI shall
cause to be delivered to the Seattle Center Director, immediately after such
assignment, sale, or transfer, an instrument, in writing, executed by the
assignee, grantee, purchaser or transferee, in which such person shall assume
and agree to perform all of the terms and provisions of this Agreement to the
extent to the interest acquired. Except as is provided in Subsections XIX.B.2
and -.3, hereof, there shall be no other restraints on the assignment, grant,
purchase, sale or other transfer by SSI of any ownership interest in the
SuperSonics or in SSI.
2. Release of SSI Upon Total Assumption of SSI's Obligations by
Other Party: Upon the delivery by SSI of an instrument of assumption and
agreement as contemplated in Subsection XIX.B.1, hereof, executed by the
assignee, grantee, purchaser, or transferee acquiring one hundred percent (100%)
of SSI's interest in the SuperSonics and this Agreement, each and every
obligation of SSI hereunder shall become null and void as to SSI and SSI shall
have no further direct or indirect liability or obligation hereunder to the
extent of that assumption, notwithstanding any other provision of this
Agreement.
3. Joint & Several Liability of SSI and Other Party Where SSI's
Obligations Are Not Totally Assumed: In the event less than one hundred percent
(100%) of SSI's interest in the SuperSonics and this Agreement is assigned,
granted, purchased by, or transferred to, one or more other persons or entities,
SSI shall remain jointly and severally liable with such other persons and
entities for the performance of its obligations hereunder.
XX. RELATIONSHIP WITH NBA
A. Warranty and Special Covenant: SSI hereby warrants to, and
specially covenants and agrees with, the City as follows:
1. SSI's Ownership of Valid NBA Franchise: SSI is the owner and
holder of a valid effective NBA franchise that permits and authorizes the SSI to
operate a professional basketball team in the Coliseum; and
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2. No NBA Prohibition or Limitation on SSI's Ability to Execute
or Carry Out Agreement: No rule, regulation, policy, Constitution or Bylaw (or
any provision of any thereof) of the NBA prohibits, limits or affects in any
manner or respect the right or power of SSI to enter into, accept, or perform
each and every one of the terms, commitments and provisions of this Agreement;
and
3. NBA Commissioner Has Approved Agreement: This Agreement
has been approved by the Commissioner.
B. SSI Subject to NBA Rules and Regulations. The activities of SSI
in owning and playing a professional basketball team in the NBA and in matters
related to such activities and the obligations of the Seattle NBA team under
this Agreement are subject to the Constitution, Bylaws, and Rules and
Regulations of the NBA; provided, however, that nothing in such Constitution,
Bylaws, Rules and Regulations shall relieve SSI of its obligation to pay amounts
in accordance with this Agreement except in the instance of a strike or work
slowdown directed against the NBA or SSI by professional basketball players
employed by SSI or a lockout of such players by SSI or the NBA during which SSI
does not use the Coliseum for any purpose.
XXI. IMPROVEMENTS, ADDITIONS, AND ALTERATIONS
A. Prior Approval of Plans and Specifications Required: SSI shall
submit to the Seattle Center Director, for Approval, schematic designs, design
development drawings, and final working drawings and specifications for the
undertaking of any and all demolition, construction, improvement, alteration or
addition in or on the Premises or any portion thereof other than a portion
solely within the Unlimited Use Facilities unless a City structural, utility, or
mechanical system is affected by such work, or such work is likely to increase
the extent or cost of maintenance required of the City under this Agreement, and
unless the design, drawings, and specifications relate to the exterior
appearance of the Practice Facility or SSI Retail Facility, in which case SSI
shall submit such designs, drawings and specifications to the Seattle Center
Director for Approval. All such designs, drawings and plans shall be prepared
by a licensed architect or engineer, who shall have affixed to the same his/her
signature and seal. SSI shall not begin any demolition or the construction of
any improvement, addition, or alteration in or on the Premises subject to the
Approval of the Seattle Center Director until after such Approval has been
given, which Approval shall not be unreasonably withheld.
B. No Representation or Liability Created by Approval: The Approval
of such plans and specifications by the Seattle Center Director shall not
constitute an opinion or representation by the City as to their compliance with
any law or ordinance or their adequacy for other than the Seattle Center
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Department's purposes; and such Approval shall not create or form the basis of
any liability on the part of the City or any of its officers, employees, or
agents for any injury or damage resulting from any inadequacy or error therein
or any failure to comply with applicable laws or ordinances.
C. Work Inconsistent with Approved Plans and Specifications: No
improvement, alteration, or addition shall be constructed, placed, or erected on
the Premises except in accordance with plans and specifications therefor with
respect to which the Seattle Center Director has given Approval. Immediately
following SSI's receipt of notice by the Seattle Center Director of any
variation between the approved plans and specifications and any improvement,
addition, or alteration in, on, or being made to the Premises, SSI shall either
desist from occupation, use, and operation of such improvement, addition, or
alteration and remove it from the Premises or make it consistent with such
approved plans and specifications or submit the matter within ten days to
arbitration pursuant to the provisions of Article XXV to determine whether the
variation was materially different than what was approved. No change shall be
made to any electrical wiring or other utility serving the Premises as of the
commencement date of this Lease or at any time subsequent thereto, other than a
change made by a properly licensed electrical contractor or electrician, or
plumbing contractor or plumber.
D. Extra Charges: In the event an improvement, addition, or
alteration made or desired to be made by SSI requires or would require any
change in any facility, utility or service provided by the City, SSI shall pay,
as an additional charge, any costs incurred by the City in making such change or
otherwise in connection therewith.
E. Improvements, Additions, and Alterations Become City Property:
All improvements, additions, and alterations made to the Premises by SSI
including but not limited to the Coliseum scoreboard and other equipment to be
provided by SSI pursuant to Subsection IX.D.1.a, hereof, shall become the
property of the City upon the expiration of the Term, and shall remain in, and
be surrendered with the Premises, as a part thereof at that time without
molestation, disturbance, or injury. Trade fixtures and equipment of SSI
including but not limited to Advertising displays installed by or for SSI shall
remain the property of SSI and may be removed by SSI upon the expiration or
earlier termination of this Agreement, consistent with the requirements of
Subsection XXVII.B, hereof.
F. Improvements, Additions & Alterations At SSI Expense: All
improvements, additions, and alterations made to the Premises by SSI to convert
the same to the condition desired by SSI shall be at the expense of SSI and at
no cost to the City unless otherwise specifically agreed by the parties, in
writing.
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G. Construction Bond: Prior to commencing any alteration, addition
or improvement work on the Premises, SSI, if required by the Seattle Center
Director, shall file with such official a good and sufficient corporate surety
bond subject to approval by the City Attorney as to form and surety, conditioned
upon the completion and installation of said addition, alteration or improvement
as described in plans submitted to and given Approval by the Seattle Center
Director and in accordance with the provisions of this Agreement and all
licenses, permits, ordinances, statutes, regulations and laws governing the
making of the same, and further conditioned upon the payment of all persons
supplying labor and material for the making of said addition, alteration or
improvement, and upon the making of said addition, alteration, or improvement
without cost and expense to the City; provided, however, that the Seattle Center
Director may waive or reduce this surety bond requirement if, in the opinion of
the Seattle Center Director, such surety bond coverage either is unavailable or
available only at an cost deemed by the Seattle Center Director to be
unreasonable under the circumstances.
H. Construction Liability Insurance: SSI shall require its general
contractor to furnish and maintain, at no cost to the City, during the full
period of the making of any part of any physical addition, alteration or
improvement to the Premises having a cost of Five Thousand Dollars ($5,000.00)
or more, a policy of public liability and property damage insurance issued by an
insurance company licensed to do business in the State of Washington, protecting
SSI and the City from any and all claims for damages for personal injury,
including death, and for property loss or damage that may arise from any
activity related to the making of said addition, alteration or improvement,
whether such activity is by SSI, its contractor(s), any subcontractor, or by
anyone directly or indirectly employed by or under contract to any of them.
Said policy shall provide coverage in the following minimum amounts: One
Million Dollars ($1,000,000) Combined Single Limit, One Million Dollars
($1,000,000) Annual Aggregate. Such policy shall name The City of Seattle as an
additional insured and provide that the terms thereof cannot be modified or
terminated without thirty (30) days' prior written notice to the City, all in
the manner and form required by the City's Risk Manager or such official's
successor. Evidence of such insurance must be provided to the City's Risk
Manager consistent with the requirements of Subsection XV.C, hereof, prior to
the commencement of any such work. All such insurance shall be primary to any
insurance maintained by the City.
I. Delivery of "As-Built" Drawings: Immediately after the
completion of each improvement, addition, or alteration to the Premises, SSI
shall deliver to the Seattle Center Director a complete set of reproducible
drawings on mylar sheets not smaller than 2' x 3' reflecting the final "as-
built" condition of said improvement, addition and alteration, together with
either the original or a copy of all maintenance and operation manuals
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necessary for the repair and maintenance of any structural, mechanical, or
electrical building system or piece of equipment installed on the Premises that
is not a removable trade fixture.
J. Testing of Premises: SSI may make such tests, borings and other
minor disturbances of the Premises as may be necessary to develop designs and
plans for all required or desired improvements, additions and alterations to the
Premises, including installations and modifications to accommodate changes in
trade fixtures intended for use on the Premises. A report of the findings and
results of each such test or boring shall be submitted to the Seattle Center
Director within thirty (30) days after the date such findings and results are
obtained.
XXII. DAMAGE AND DESTRUCTION
A. Notice: In the event that the Coliseum, or any portion thereof,
is destroyed or damaged in any manner that limits or prevents the playing,
exhibition, attendance at, or viewing of a Home Game, or the exercise by SSI of
any other rights granted to it by this Agreement (an "Occurrence"), SSI or the
City, as the case may be, shall submit a notice to the other party regarding the
existence and extent of such damage or destruction within forty-eight (48) hours
after such party's discovery of the Occurrence.
B. City Notice of Intentions Regarding Rebuilding of Coliseum:
1. Circumstances Under Which City Obligated to Repair & Restore
Coliseum After Occurrence: In the event of an Occurrence, the City shall
immediately undertake such repair and restoration work as may be necessary to
completely restore the Coliseum to at least the condition it was in immediately
prior to the Occurrence where (i) the reason for the Occurrence was a risk that
was not excluded from coverage under Subsections B.1.a-g of the "Causes of Loss
- Special Form" standard 1S0 1983, 1989 Special Risk Property Insurance Form
("CP 10 30 10 90") and (ii) the cost of such work is estimated to not exceed "Y"
in the following formula:
Y = C x N where:
--
15
"C" = the total cost paid by the City to construct and equip the
Coliseum; and
"N" = the number of full years remaining in the Agreement term;
Provided, that even if the City is not obligated to restore and repair the
Coliseum according to the above formula, the City may,
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nonetheless, at its election, perform such restoration and repair pursuant to
the provisions of this Article XXII.
2. City Notice of Intent to Restore & Repair Coliseum After
Occurrence: The City shall give notice to SSI as soon as practicable after the
Occurrence regarding the City's assessment of the extent of damage or
destruction that has occurred and of the City's determination whether or not to
restore and repair the Coliseum; Provided, that such notice to SSI shall not be
given later than one hundred (100) calendar days after the Occurrence. In
addition, if such notice advises SSI of the City's determination to not restore
or repair the Coliseum, the notice shall also set forth in detail the reasons
why such determination is in compliance with the terms of this Article XXII.
C. SSI Remedies During City Repair and Restoration of Coliseum:
1. In the event that the City undertakes and completes the
repair and restoration of the Coliseum after an Occurrence, then the annual rent
or adjusted rent and additional rent required by Subsections VIII.A.1 and 2,
hereof, shall be abated by an amount equal to "Z" in the following formula:
N AS
-- --
Z = 41 x R x T5 where:
"N" = the number of Home Games that could not be played in the
Coliseum because of the Occurrence that were scheduled
between the date of the Occurrence and the Use Commencement
Date for the repaired Coliseum;
"R" = the annual rent or adjusted annual rent, as appropriate, due
between the date of the Occurrence and the Use Commencement
Date for the repaired Coliseum;
"AS" = the number of Seats from which a Home Game cannot be
reasonably viewed because of the Occurrence; and
"TS" = the total number of Seats in the Coliseum.
2. City's Liability for SSI Damages After Thirteenth Month
Following Occurrence & Prior To Restoration of Coliseum: In the event that
Coliseum repair and restoration work required because of an Occurrence takes
longer than one hundred (100) days, in addition to the abatement of rent and
adjusted rent as provided in Subsection XXII.C.1, hereof, the City shall
compensate SSI for all damages and losses that SSI reasonably incurs as a result
of the Occurrence from the first day of the
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thirteenth (13th) month after the Occurrence through the latest Use Commencement
Date.
D. No Liability for Termination: The termination of this Agreement
by either the City or SSI as provided in this Article XXII, hereof, shall not
create any liability on or of the terminating party for the benefit of the other
party.
XXIII. SUSPENSION OF OBLIGATIONS (FORCE MAJEURE)
Whenever a party's performance of any obligation under this Agreement
except those obligations set forth in Article rn is prevented by an act of war
or warlike operation by a foreign nation; a labor dispute including a strike,
lock-out, or walkout including such labor dispute between SSI or the NBA and
players employed by the NBA; then the performance of such affected obligation
shall be suspended, but only for so long as such performance remains beyond the
reasonable control of such party. SSI's obligations hereunder shall not be
suspended, however, if during any such labor dispute, SSI uses any portion of
the Premises for the practicing for, or the playing of, any professional
basketball game by persons who are not participants in such labor dispute.
XXIV. NOTICES
Any notice or communication to be given by one party to the other under
this Agreement must be in writing; and if given by registered or certified mail,
such notice or communication shall be deemed to have been given and received
when a registered or certified letter containing such notice or communication,
properly addressed, with postage prepaid, is deposited in the United States
mail, but if given otherwise than by registered or certified mail, it shall be
deemed to have been given when received by the party to whom it is addressed.
Such notices or communications shall be delivered or sent to the following
respective addresses or to such other addresses as the parties, from time to
time, may specify in writing:
If to the City:
Seattle Center Director
Seattle Center Department
The City of Seattle
305 Harrison Street
Seattle, WA 98109
If to SSI:
SSI Sports, Inc.
Attn: President
190 Queen Anne Avenue North
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2nd Floor
Seattle, WA 98109
XXV. ARBITRATION
A. Disputes To Be Resolved Through Arbitration: All claims,
disputes and other matters in question between the parties arising out of, or
relating to provisions of this Agreement shall be decided by binding arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect unless the parties mutually agree otherwise or unless
the claim, dispute, or matter in question relates to the provisions of Article
II ("Term; Use Period"), Article III ("Termination of Current Agreement
Providing Seattle Center Space for SuperSonics Home Games Use"), Article IV
("Coliseum Design and Construction"), Article V ("Coliseum Planning &
Construction Schedule; SSI Opportunities to Void Agreement"), Subsection XVI.F
("Hazardous Substances") or Article XIX ("Subcontracting and Transfer of
Ownership"). The dispute shall be determined by majority vote of a panel of
three arbitrators, unless the parties agree to have the matter decided by a
single arbitrator. The written decision of the arbitrator(s) shall be final and
binding on all parties to the arbitration proceeding. The costs and expenses
(including reasonable attorneys' fees) of the arbitration proceeding shall be
assessed in favor of the prevailing party by the arbitrator(s), and the
assessment shall be set forth in the decision and award of the arbitrator(s).
The parties recognize that a need may arise for a more expeditious resolution of
disputes concerning Article IV ("Coliseum Design and Construction") and
therefore will make their best efforts to develop a mutually satisfactory
informal dispute resolution mechanism for such matters.
B. Limitations on Arbitration Scope: No arbitration arising out of
or relating to this Agreement shall include, by consolidation, joinder or in any
other manner any parties other than the parties to this Agreement and any other
persons substantially involved in a common question of fact or law, whose
presence is required if complete relief is to be accorded in the arbitration.
No parties other than the parties to this Agreement shall be included as an
original third party or additional third party to an arbitration whose interest
or responsibility is insubstantial. Any consent to arbitration involving an
additional person or persons shall not constitute consent to arbitration of any
dispute not described therein. The foregoing agreement to arbitrate and any
other agreement to arbitrate with any additional parry duly consented to by the
parties hereto shall be specifically enforceable under prevailing arbitration
law.
C. Notice of Demand for Arbitration: Notice of the demand for
arbitration shall be filed in writing with the other
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party and with the American Arbitration Association. The demand for arbitration
shall be made within a reasonable time after the claim, dispute or other matter
in question has arisen, and in no event shall it be made after the date when
institution of legal or equitable proceedings based on such claim, dispute or
other matter in question would be barred by the applicable statute of
limitations.
D. Limitation on Judicial Relief: No proceedings based upon any
claim arising out of or related to this Agreement shall be instituted in any
court by any party hereto against any other parry hereto except (i) an action to
compel arbitration pursuant to this Section, (ii) an action to enforce the award
of the arbitration panel rendered in accordance with this Section, (iii) to file
arbitration award as a judgment, and (iv) proceedings brought by SSI for
injunctive relief or any other interim remedy to protect SSI's rights under this
Agreement.
XXVI. DEFAULT AND REMEDIES THEREFOR
A. Act of Default and Breach by the Parties: In addition to the
acts and omission described this Agreement, the following acts and omissions
shall constitute a default and material breach of this Agreement:
1. SSI's Failure to Insure: The failure of SSI to comply with
all of the requirements of Article XV, hereof, regarding insurance; or
2. SSI's Abandonment of Premises: The abandonment or vacating
of the Premises by SSI without cause; or
3. SSI's Nonremittance of Amounts Due City: The failure of SSI
without cause to pay to the City, in a timely manner, the amounts due under
Article VIII, hereof; or
4. City's Failure to Maintain Premises: The failure of the
City to maintain the Premises as required by this Agreement; or
5. Violation of Other Provisions of Agreement: The failure by
either party to perform or the violation of any other condition, warranty,
covenant or provision of this Agreement where such default or deficiency in
performance was not remedied within a reasonable time unless -a specific period
of time is specifically provided for herein.
B. Notice to Cure: In the event either party fails to perform any
obligation hereunder, whether imposed by law, ordinance, regulation, or
otherwise, or violates any provision of this Agreement, the other party shall
notify such party of such failure or violation and, except where impracticable,
shall provide the other with a reasonable period to correct, remedy or
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cease such failure or violation, which period shall not exceed ninety (90) days
after the date of such notice unless the nature of the notified party's
obligation is such that more than ninety (90) days is reasonably required for
its performance, in which case the notified party shall not be in default if,
within such ninety (90) day period, it commences the activity necessary to
enable it to perform and thereafter diligently undertakes such activity to its
completion. Nothing in this Agreement shall enable SSI to avoid liability for
interest on any delinquent payments due to the City.
C. Rights Upon Default and Breach: After expiration of the cure
period provided pursuant to Subsection XXVI.B, hereof:
1. City Rights Upon SSI Default & Breach: In the event SSI
fails to correct, remedy, or cease such failure or violation within the time
specified in the City's notice, the City may thereafter terminate this Agreement
without any further proceedings, reenter the Premises, lease and license others
to use said Premises and receive rent and license fees therefor as if this
Agreement had not been made; provided, that SSI shall remain liable for the full
amount due to the City pursuant to Article VIII, hereof, as and when due, but
may offset against such liability the amount received by the City as a
consequence of such subsequent lease or license. The City shall also have such
other remedies as may be available to it, which shall include, without
limitation, injunctive relief and damages. The City shall take all reasonable
measures to mitigate any damages.
2. SSI Rights Upon City Default & Breach: In the event the
City fails to correct, remedy, or cease such failure or violation within the
time specified in SSI's notice, then in addition to any other remedies available
to SSI, which shall include, without limitation, injunctive relief, damages, and
the withholding of rent, SSI may terminate this Agreement, whereupon all SSI's
obligations that had not been incurred as of the effective termination date,
including the obligation to pay future rent, shall terminate.
D. Termination by Court Decree: In the event that any court having
jurisdiction renders a decision that has become final and that prevents the
performance by the City of any of its obligations under this Agreement, either
party may terminate this Agreement, without recourse, by providing written
notice of termination to the other party, specifying the effective date thereof,
as of which date all rights and obligations that accrued prior to the effective
date of termination shall terminate.
XXVII. SURRENDER OF PREMISES; HOLDING OVER
A. Surrender and Delivery: Upon the expiration or termination of
the use period specified in Article II, hereof,
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whichever is earlier, SSI shall surrender the Premises and promptly deliver to
the Seattle Center Director all keys SSI, its officers, agents, and employees
may have to the Seattle Center and the Premises.
B. Removal of SSI's Property: Prior to the expiration of the use
period specified in Article R, hereof, or in the event this Agreement is
terminated, within fifteen (15) days after the termination date, whichever is
earlier, the SSI shall remove, at its sole expense, all trade fixtures, trade
furnishings, trade equipment, Advertising displays and other personal property
owned or installed by SSI in, on, or from the Premises, taking due care to not
unreasonably injure or damage the Premises, and shall make such repairs to the
Premises as shall be necessary to restore the same to their condition as of the
commencement date of the use period specified in Article II, hereof, ordinary
wear and tear and improvements, additions, and alterations approved by the City
excepted. Notwithstanding any other provision hereof, improvements, additions,
and alterations installed on the Premises by the City or by SSI with the City's
Approval shall not be removed without the express, written authorization of the
Seattle Center Director.
C. Storage of SSI's Property: In the event SSI fails to remove all
fixtures, furnishings, trade equipment, and other personal property owned by SSI
on or by the time specified in Subsection XXVII.B, hereof, the City may, but
shall not be required to, remove such material from the Premises and store the
same, all at SSI's expense; and in the event the City removes or arranges for
the storage of such material, SSI shall reimburse the City for all costs
incurred in connection with such removal or storage, including any
administrative costs, which reimbursement shall be paid within thirty (30) days
after the date of the City's invoice therefor.
D. Holdover Use and Occupancy of Premises: In the event SSI, with
the consent of the City, holds over after the expiration or termination of the
use period specified in Article II, hereof, whichever is earlier, SSI shall be
bound by all of the provisions of this Agreement during such holdover period.
E. No Claims for Removal: In no event shall SSI make any claim or
demand upon the City nor shall the City be liable for any inconvenience,
annoyance, disturbance, or loss of business or any other damages suffered by SSI
arising out of such removal operations under Subsections XXVII.B and C., hereof.
XXVIII. MISCELLANEOUS PROVISIONS
A. City Warranty of Title and Authority: The City represents and
warrants to SSI that the City holds fee simple title to the Premises, free from
any liens or encumbrances and has the full right, power and authority to enter
into this Agreement with
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SSI. Subject to SSI's compliance with all applicable terms and conditions of
this Agreement, the City covenants and agrees that throughout the term of this
Agreement, SSI shall be permitted to lawfully, peaceably and quietly have, hold,
occupy and enjoy the Premises and any appurtenant rights granted to SSI
hereunder during the term without hindrance or ejectment by the City or the
successors or assigns of the City or anyone acting by, through or on behalf of
the City.
B. Use of Language: Words used in the neuter gender include the
masculine and feminine; and words used in the singular or plural includes the
other as the context may require.
C. Captions: The titles of sections and subsections are for convenience
only and do not define or limit the contents.
D. Amendments: No modification or amendment of the provisions of this
Agreement shall be effective unless written and signed by the authorized
representatives of the parties hereto. The parties hereto expressly reserve the
right to modify this Agreement from time to time by mutual agreement.
E. Time of Essence: Time is of the essence in this Agreement.
F. Remedies Cumulative: Except as otherwise provided herein, rights
under this Agreement are cumulative; failure to exercise on any occasion any
right shall not operate to forfeit such right on another occasion. Each party
shall also have any other remedy given by the law. The use of one remedy shall
not be taken to exclude or waive the right to use another.
G. No Waiver: No action other than a written notice by one party to the
other specifically stating that such notice has the effect of waiver, shall
constitute a waiver of any particular breach or default of such other party. No
such notice shall waive SSI's failure to fully comply with any other term,
condition, or provision of this Agreement, irrespective of any knowledge any
City officer, employee, or agent may have of any breach or default of, or
noncompliance with, such other term, condition, or provision. No waiver of full
performance by either party shall be construed, or operate, as a waiver of any
subsequent default of any of the terms, covenants and conditions of this
Agreement. The payment or acceptance of rent for any period after a default
shall not be deemed a waiver of any right or acceptance of defective
performance.
H. Limited Effect of Approval by Seattle Center Director: Action of the
Seattle Center Director pursuant to or in implementation of this Agreement does
not constitute any official action by any other City Department or official that
may be required by law, City Charter, ordinance, rule or regulation before SSI
may rightfully commence, suspend, enlarge, or terminate any
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particular undertaking or may obtain or exercise any particular right or
privilege under this Agreement.
I. No Relationship: In no event shall the City be construed to be a
partner, associate, or joint venturer of SSI, or any party associated with SSI.
SSI is not an agent of the City for any purpose whatsoever. SSI shall not
create any obligation or responsibility on behalf of the City or bind the City
in any manner.
J. Powers of the City: Nothing contained in this Agreement shall be
considered to diminish the governmental or police powers of the City.
K. Binding Effect: The provisions, covenants and conditions in this
Agreement apply to bind the parties, their legal representatives, successors,
and assigns.
L. Enforcement of this Agreement: The obligations of the parties to this
Agreement are unique in nature; this Agreement may be specifically enforced by
either party.
M. Invalidity of Particular Provisions: Should any term, provision,
condition or other portion of this Agreement or the application thereof be held
to be inoperative, invalid or unenforceable, the remainder of this Agreement or
the application of such term or provision to persons or circumstances other than
those to which it is held invalid or unenforceable shall not be affected thereby
and shall continue in full force and effect.
N. Costs of Suit and Attorneys' Fees: If either party shall commence
suit to enforce any terms or condition or covenant herein, or in any other
action for relief against the other, declaratory or otherwise, arising out of
this Agreement, the nonprevailing party in such action shall pay the prevailing
party, in addition to any judgment, a reasonable sum as attorneys' fees together
with costs of litigation through arbitration or trial including appellate
proceedings.
O. Applicable Law; Venue: This Agreement shall be construed under the
Law of the State of Washington. Venue for any action brought hereunder shall be
in King County, Washington.
P. Previous Agreements Superseded: The terms and conditions of this
Agreement supersede the terms, obligations and conditions of any existing or
prior agreement or understanding, written or oral, between the parties regarding
the Premises other than the terms, obligations and conditions of the March
22,1993 Memorandum of Understanding, which is superseded only to the extent the
terms and conditions of this Agreement are inconsistent with such Memorandum of
Understanding or as expressly provided herein.
Q. Construction of Agreement: The parties to this Agreement acknowledge
that it is a negotiated agreement, that they have had
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the opportunity to have this Agreement reviewed by their respective legal
counsel, and that the terms and conditions of this Agreement are not to be
construed against any party on the basis of such party's draftsmanship thereof.
R. Incorporation of Exhibits; Entire Agreement: This Agreement,
including the following attached exhibits:
Exhibit "A" Coliseum Floorplan showing Club Seat and Courtside Seat
locations
Exhibit "B" Coliseum Site Map showing, inter alia, the South
Coliseum Parking Lot
Exhibit "C" Coliseum Floorplan showing Function Room locations
Exhibit "D" Map showing Practice Facility site
Exhibit "E" Ground Lease for Practice Facility site
Exhibit "F" Map showing SSI Retail Facility location
Exhibit "G-1" Coliseum Floorplans showing SSI Unlimited Use
Facilities
Exhibit "G-2" Coliseum Floorplans showing authorized SSI use and
occupancy areas on any Day of Game
Exhibit "H" Food and Beverage Service Agreement
Exhibit "1" Novelties Concession Agreement
Exhibit "J" Photographs of "Look & Feel" of Salt Lake City Delta
Center
Exhibit "X" February 4, 1994 communication from Director of
Construction and Land Use
which exhibits, by this reference, are incorporated herein, contains and
constitutes all of the covenants, promises, agreements, and conditions, either
oral or written, between the parties regarding the subject matter thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by having their authorized representatives affix their signatures in
the space below:
SSI SPORTS, INC. THE CITY OF SEATTLE
By: /s/ Barry A. Ackerley By: /s/ Virginia Anderson
--------------------------- ----------------------------
Chairman Seattle Center Director
By: /s/ Robert Whitsitt
---------------------------
President
Pursuant to Ordinance _________
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STATE OF WASHINGTON )
) ss:
COUNTY OF KING )
On this 2nd day of March , 1994, before me, the undersigned, a
Notary Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Virginia Anderson, to me known to be the Seattle Center
Director, who executed the foregoing instrument, and acknowledge said instrument
to be the free and voluntary act and deed of The City of Seattle, for the uses
and purposes herein mentioned, and on oath stated that she is authorized to
execute said instrument.
WITNESS my hand and official seal hereto affixed the day and year in this
certificate above written.
/s/ Carolyn C. Gossard Carolyn C. Gossard
----------------------- ---------------------------
(Signature) (Print or type name)
NOTARY PUBLIC in and for the State of Washington, residing at Seattle. My
appointment expires 11/28/96.
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STATE OF WASHINGTON )
) ss:
COUNTY OF KING )
On this 24th day of February, 1994, before me personally appeared Bob
Whitsitt, to me known to be the President of SSI Sports, Inc., the corporation
that executed the foregoing instrument, and acknowledged said instrument to be
the free and voluntary act and deed of said corporation, for the uses and
purposes therein mentioned, and further that said officer has the authority to
sign on behalf of said corporation.
WITNESS my hand and official seal hereto affixed the day and year in this
certificate above written.
/s/ Sarah Furtado Sarah Furtado
-------------------------------- -------------------------------
(Signature) (Print or type name)
NOTARY PUBLIC in and for the State of Washington, residing at King County. My
appointment expires 10/21/96.
STATE OF WASHINGTON )
) ss:
COUNTY OF KING )
On this 14th day of March, 1994, before me personally appeared Barry
Ackerley, to me known to be the Chairman of the Board of SSI Sports, Inc., the
corporation that executed the foregoing instrument, and acknowledged said
instrument to be the free and voluntary act and deed of said corporation, for
the uses and purposes therein mentioned, and further that said officer has the
authority to sign on behalf of said corporation.
WITNESS my hand and official seal hereto affixed the day and year in this
certificate above written.
/s/ Mary Dawn Robertson Mary Dawn Robertson
------------------------------- --------------------------
(Signature) (Print or type name)
NOTARY PUBLIC in and or State of Washington, residing at Seattle.
My appointment expires 1/25/98.
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________________________________________________________________________________
Source: SEC Info - www.secinfo.com - Fran Finnegan & Company - 9/26/07
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