BEXAR COUNTY COMMUNITY ARENA FREEMAN COLISEUM AGREEMENT
by and among
BEXAR COUNTY, TEXAS (by and through its Commissioners Court) The County
and
COLISEUM ADVISORY BOARD CAB
and
COMMUNITY ARENA MANAGEMENT, LTD. The Operator
and
SAN ANTONIO SPURS, L.L.C. The Spurs
and
SAN ANTONIO LIVESTOCK EXPOSITION, INC. SALE
August 22, 2000 TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS ...... 3
ARTICLE II
RESTRICTIONS AND COOPERATION ...... 8 Section 2.1 Binding Effect and Duration ...... 8 Section 2.2 Use Restriction ...... 8 Section 2.3 Operator's Exclusive Scheduling Rights ...... 9 Section 2.4 Minimum Revenues ...... 11 Section 2.5 Freeman Seating ...... 11 Section 2.6 Other Scheduling Fees ...... 12 Section 2.7 Complimentary Events ...... 12 Section 2.8 Advertising ...... 12 Section 2.9 Naming Restriction ...... 12 Section 2.10 Exterior Advertising Restriction ...... 12 Section 2.11 Concession Revenues ...... 13 Section 2.12 Parking Rights ...... 13 Section 2.13 Arena Project Staffing Expense ...... 14
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS ...... 14 Section 3.1 County's and CAB's Representations, Warranties and Covenants .....14 Section 3.2 Operator's Representations, Warranties and Covenants ...... 15 Section 3.3 Spurs' Representations, Warranties and Covenants ...... 16 Section 3.4 SALE's Representations, Warranties and Covenants ...... 17 Section 3.5 Mutual Covenants ...... 17
ARTICLE IV
DEFAULTS AND REMEDIES ...... 19 Section 4.1 Events of Default ...... 19 Section 4.2 Enforcement by Specific Performance, Mandamus or Injunctive Relief ...... 20 Section 4.3 Institution of Litigation ...... 20 Section 4.4 Rights and Remedies are Cumulative ...... 21 Section 4.5 Acceptance of Legal Process ...... 21
Freeman Coliseum Agreement i TABLE OF CONTENTS (Continued) Page
ARTICLE V
GENERAL PROVISIONS ...... 21 Section 5.1 Reliance on Freeman Coliseum Agreement ...... 21 Section 5.2 Assignment ...... 21 Section 5.3 Notice ...... 22 Section 5.4 Attorneys' Fees ...... 24 Section 5.5 Time of Essence ...... 24 Section 5.6 Relationship of Parties ...... 24 Section 5.7 Severability ...... 24 Section 5.8 Interpretations ...... 25 Section 5.9 Binding Effect ...... 25 Section 5.10 Captions ...... 25 Section 5.11 Entire Agreement ...... 25 Section 5.12 Amendment; Waiver ...... 25 Section 5.13 Applicable Law ...... 25 Section 5.14 Consent ...... 25 Section 5.15 Counterparts ...... 26 Section 5.16 Conflict ...... 26 Section 5.17 Conflict Between or Among Spurs and SALE License Agreements and Freeman Coliseum Agreement ...... 26 Section 5.18 Memorandum ...... 26 Section 5.19 Construction ...... 26 Section 5.20 Prior Agreements Superseded ...... 26
ARTICLE VI
DISPUTE RESOLUTION ...... 27 Section 6.1 Mediation ...... 27 Section 6.2 Arbitration ...... 27
EXHIBITS
Exhibit A Arena Project Exhibit B Combined Site Exhibit C Arena Project Parking Areas Exhibit D Coliseum Parking Areas
Freeman Coliseum Agreement ii FREEMAN COLISEUM AGREEMENT
This FREEMAN COLISEUM AGREEMENT (this "Freeman Coliseum Agreement") is dated as of August 22, 2000, and entered into by and among BEXAR COUNTY, TEXAS, a public body corporate and politic and a political subdivision of the State of Texas (the "County," or a "Party," which terms shall include its agencies, departments and authorities, acting by and through its Commissioners Court, and the respective successors and assigns of the foregoing), the COLISEUM ADVISORY BOARD of Bexar County, Texas ("CAB," or a "Party," which terms shall include its permitted successors and assigns), the SAN ANTONIO SPURS, L.L.C., a Texas limited liability company (the "Spurs," or a "Party," which terms shall include its permitted successors and assigns) which owns the NBA franchise for the professional basketball team (the "Team," which term shall include permitted successors and assigns) known as the San Antonio Spurs, the SAN ANTONIO LIVESTOCK EXPOSITION, INC. ("SALE," or a "Party," which terms shall include its permitted successors and assigns), and COMMUNITY ARENA MANAGEMENT, LTD., a Texas limited partnership (the "Operator," or a "Party," which terms shall include its permitted successors and assigns).
R E C I T A L S :
A. On October 12, 1999, the County, CAB, SALE, and the Spurs, entered into a Memorandum of Agreement (including Exhibit A thereto, the "MOA") setting forth the outline of terms and conditions under which the County, SALE and the Spurs would move forward to expeditiously develop a state-of-the-art, multi-purpose sports, civic, and entertainment facility (the "Arena") suitable for professional basketball and rodeo and livestock exhibition events, as well as for hosting other sporting events, family shows, concerts, and similar flat floor events, including events similar to those now held in the Joe and Harry Freeman Coliseum (the "Freeman Coliseum") or similar events typically held in other existing arenas, and a practice court and facilities and related improvements for the Spurs, including on-site surface parking for not less than 7,000 dedicated vehicle spaces, and related on-site infrastructure as described on Exhibit A attached hereto (together with all related machinery, equipment, fixtures, additions and appurtenances, the "Arena Project").
B. The Arena Project will be constructed on the site of the Freeman Coliseum, consisting of a portion of the approximately one hundred seventy-five (175) acres currently owned by the County (the "Combined Site") at the intersection of Houston Street and Coliseum Road in San Antonio, Texas, as more particularly described on Exhibit B attached hereto; provided, however, that the Freeman Coliseum and certain related improvements and parking areas are not included in the Arena Project.
C. The Arena Project shall be designed and constructed to support the primary occupancy of the Team for professional basketball and related uses and of SALE for rodeo and
Freeman Coliseum Agreement livestock exposition events, and shall also host other sporting events, family shows, concerts and exhibitions.
D. The County and the Operator have entered into an Operating Agreement dated of even date herewith (the "Operating Agreement," which term shall include any amendments, modifications and restatements thereof) pursuant to which the Operator, subject to the Spurs License Agreement and the SALE License Agreement, shall be the exclusive operator and manager of the Arena Project, and, pursuant thereto, the Operator assumes the responsibility to successfully operate the Arena Project for the County and is empowered to enter into this Freeman Coliseum Agreement to encourage cooperation between the Arena Project and the Freeman Coliseum and to restrict the use of the Freeman Coliseum in order to maximize the revenue generating opportunities available to the Arena Project for the good of the Operator, the County and its residents.
E. The County owns the Freeman Coliseum and the Combined Site and CAB oversees the operation and management of the Freeman Coliseum and the Combined Site and is empowered by its Board and the County to enter into this Freeman Coliseum Agreement.
F. The County, CAB, Operator, Spurs and SALE desire and intend to work together to redevelop the Freeman Coliseum pursuant to a mutually acceptable plan (the "Coliseum Redevelopment Plan"), to be prepared, mutually agreed upon, and effectuated at a later date, so that the Freeman Coliseum becomes a facility which compliments and does not compete with the Arena Project. Although the Parties intend to work diligently to prepare, agree upon and effectuate the Coliseum Redevelopment Plan as soon as reasonably possible, until such time, the successful promotion and operation of the Arena Project requires (i) that the County and CAB agree to restrict the use of the Freeman Coliseum as set forth in this Freeman Coliseum Agreement, and (ii) coordination of resources among the County, CAB, Operator, Spurs and SALE, including coordination of on-site parking and other related on-site infrastructure.
G. The Operator and the County have entered into the Operating Agreement and the other Project Documents (as hereinafter defined) in reliance on the terms and conditions of this Freeman Coliseum Agreement; specifically, but not limited to, the restrictions, obligations and covenants contained in Article II hereof. But for the restrictions, obligations and covenants contained in Article II and elsewhere herein, and the binding nature and enforceability of this Freeman Coliseum Agreement, the County and the Operator and the Spurs would not have entered into the Project Documents.
H. The Parties acknowledge that their respective obligations hereunder to perform pursuant to this Freeman Coliseum Agreement are absolute and unconditional, except where specifically provided to the contrary herein.
I. The health, safety and general welfare of the people of the County are directly dependent upon the continual encouragement, development, growth and expansion of business, commerce, and tourism. The development and successful operation of a major multi-purpose sports and entertainment complex and accessory uses, including the hosting of NBA games and rodeo and
Freeman Coliseum Agreement 2 livestock exposition events, is most appropriate in the County which, because of its size, is capable of retaining and supporting professional as well as amateur sports teams and attracting major national sporting and musical, cultural, entertainment, family and community events. Attraction of business and tourism to the County as a result of the development and successful operation of such an Arena Project and its ancillary uses will be an important factor in the continued encouragement, promotion, attraction, stimulation, development, growth and expansion of business, commerce and tourism within the County. The successful operation and promotion of a multi-purpose sports and entertainment complex on public property will provide significant benefits to the general public and, in connection therewith, the execution of this Freeman Coliseum Agreement by the County and CAB is in the best interest of the public to encourage such successful operation and maximization of revenue for the Arena Project.
J. In view of the foregoing, the County and CAB have determined that the successful operation of the Arena Project and the performance of this Freeman Coliseum Agreement are in the best interests of the County, CAB, and the welfare of the County's residents, and in accord with valid public purposes.
NOW, THEREFORE, intending to be legally bound, in consideration of the premises, covenants, agreements and obligations contained herein, the Parties do hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Freeman Coliseum Agreement, the following terms shall have the meanings indicated unless a different meaning is specifically provided or unless the context otherwise requires; certain other capitalized terms which are not defined herein shall have the meanings provided in the Operating Agreement, the Development Agreement, the Spurs License Agreement or the SALE License Agreement, as applicable:
"Advertising" means, collectively, all advertising, sponsorship and promotional activity, signage, messages and displays of every kind and nature, whether now existing or developed in the future, including, without limitation, permanent, non-permanent and transitory signage or advertising displayed on permanent or non-permanent advertising panels or on structures, fixtures or equipment (such as scoreboard advertising and canopy advertising); audio or video public address advertising and message board advertising; and electronic and other forms of virtual signage, excluding Naming Rights (as defined in the Spurs License Agreement).
"Affiliate(s)" of a specified Person means a Person who (a) is directly or indirectly controlling, controlled by, or under common control with, the specified Person; (b) owns directly or indirectly thirty-five percent (35%) or more of the equity interests of the specified Person; (c) is a general partner, officer, director, non-financial institution trustee or fiduciary of the specified Person or of any Person described in (a) or (b); or (d) is a son, daughter, spouse, parent, sibling or in-law of the specified Person.
Freeman Coliseum Agreement 3 "Annual Coliseum Event Revenues" means the total of all Coliseum Event Revenues generated during a Fiscal Year less any Scheduling Fees paid during such Fiscal Year.
"Applicable Law" means any law, statute, ordinance, rule, regulation, order or determination of any Governmental Authority or any board of fire underwriters (or other body exercising similar functions), or any recorded restrictive covenant or deed restriction applicable to the Arena Project, the Freeman Coliseum or the Combined Site, including, without limitation, the Americans with Disabilities Act and all applicable zoning ordinances and building codes, flood disaster laws, health laws and environmental laws and regulations.
"Arena" has the meaning set forth in Recital A hereof.
"Arena Project" has the meaning set forth in Recital A hereof.
"Arena Project Parking Areas" means the areas of the Arena Project designated for parking which contain no less than 7,000 parking spaces at all times during the License Term as described in the Plans and Specifications (as defined in the Development Agreement) and as preliminarily set forth on Exhibit C attached hereto and as ultimately determined pursuant to the provisions of Exhibit A to the Development Agreement.
"Arena Project Operating Expenses" has the meaning set forth in the Operating Agreement.
"Business Day" means any day other than a Saturday, a Sunday or a public or bank holiday or the equivalent for banks generally under the laws of the State of Texas. Use of the word "day," as opposed to Business Day, means calendar day.
"CAB" has the meaning set forth in the initial paragraph hereof.
"Challenge" has the meaning set forth in Section 3.5(d) hereof.
"Coliseum Event Revenues" means all net revenues ultimately retained by CAB or the County of whatever kind and nature received or obtained and derived by CAB from the operations of the Freeman Coliseum solely in connection with events scheduled by Operator pursuant to Section 2.3 hereof, including, without limitation, ticket revenues, parking revenues, concession revenues (both consumable and non-consumable), revenue from the sale of novelties, licensing fees, rental fees, event sponsorship revenue, fees received for box office services, any administrative fees charged to tenants or licensees, and equipment rental fees. Coliseum Event Revenues will be reduced by the amount of reasonable expenses, if any, not reimbursed by the event, directly related to the conduct or promotion of the Freeman Coliseum Events scheduled by Operator pursuant to Section 2.3 hereof.
"Coliseum Parking Areas" means the areas of the Combined Site as set forth on Exhibit D attached hereto designated for parking which is not Arena Project Parking Areas and as will be
Freeman Coliseum Agreement 4 ultimately determined with the determinations made pursuant to the provisions of Exhibit A to the Development Agreement.
"Coliseum Redevelopment Plan" has the meaning set forth in Recital F hereof.
"Combined Site" has the meaning set forth in Recital B hereof.
"Comparable Events" has the meaning set forth in Section 3.1(f) hereof.
"Competing Facility" has the meaning set forth in Section 3.1(f) hereof.
"Complimentary Event" has the meaning set forth in Section 2.2(d) hereof.
"County" has the meaning set forth in the initial paragraph hereof.
"CPI Fraction" has the meaning set forth in the Operating Agreement; provided, however, the denominator of the CPI Fraction shall (i) for purposes of Section 2.4 hereof, be the index value of the Designated Index for first month of the fifth (5th) Fiscal Year and (ii) for purposes of Section 2.13 hereof, be the index value of the Designated Index for February 2007.
"Development Agreement" means the Development Agreement dated of even date herewith between the County and Arena Project Developer LLC, a Texas limited liability company (the "Project Developer"), as the same may be amended, supplemented, modified, renewed or extended from time to time.
"Event(s)" means all revenue and nonrevenue producing sports, entertainment, cultural, civic and other activities and events which are conducted at the Arena Project or the Freeman Coliseum, including Major Tenant Events.
"Event of Default" has the meaning set forth in Section 4.1 hereof.
"Fiscal Year" has the meaning set forth in the Operating Agreement.
"Fixed Seats" means event seats within the Freeman Coliseum which are (i) built into or permanently affixed to the Freeman Coliseum, (ii) attached to the structure of the Freeman Coliseum by bolts, screws or other attachment devices, or (iii) attached to any other improvement, fixture or piece of equipment within the Freeman Coliseum.
"Flat Floor Shows" means exhibitions that are conducted on the floor space of a facility without a seated audience, such as car shows, gun shows, antique shows and other collectibles shows, but specifically excluding, without limitation, sporting events, concerts, theater performances and other stage productions.
"Freeman Coliseum" has the meaning set forth in Recital A hereof.
Freeman Coliseum Agreement 5 "Freeman Coliseum Agreement" means this Freeman Coliseum Agreement, as the same may be amended, supplemented, modified, renewed or extended from time to time.
"Freeman Coliseum Events" means Events held at, or to be held at, the Freeman Coliseum.
"Governmental Authority(ies)" means any federal, state and/or local agency, department, commission, board, bureau, administrative or regulatory body or other instrumentality having jurisdiction over the Arena Project, the Freeman Coliseum or the Combined Site.
"License Term" has the meaning set forth in the Spurs License Agreement.
"Major Tenant Event(s)" means all activities and events conducted at the Arena Project or the Freeman Coliseum pursuant to the Spurs License Agreement or the SALE License Agreement, respectively.
"Minimum Revenues Amount" has the meaning set forth in Section 2.4 hereof.
"MOA" has the meaning set forth in Recital A hereof.
"NBA" means the National Basketball Association, and any successor or substitute association or other entity of which the Spurs are a member or joint owner and which engages in professional basketball competition in a manner comparable to the National Basketball Association.
"Non-Relocation Agreement" means the non-relocation agreement of even date herewith between the County and the Spurs, as the same may be amended, supplemented, modified, renewed or extended from time to time.
"Operating Agreement" has the meaning set forth in Recital D hereof.
"Operations Start Date" has the meaning set forth in the Operating Agreement.
"Operator" has the meaning set forth in the initial paragraph hereof.
"Other Events" means any and all Events, other than Major Tenant Events.
"Parking Areas" means the Arena Project Parking Areas and the Coliseum Parking Areas.
"Permitted Uses" has the meaning set forth in Section 2.2 hereof.
"Person" means an individual, partnership, corporation, joint stock company, trust (including a business trust), unincorporated association, joint venture, limited liability company or any other entity, the United States, or a federal, state, or political subdivision thereof or any agency or court of such state or subdivision.
Freeman Coliseum Agreement 6 "Project Developer" has the meaning set forth in the definition of "Development Agreement" herein.
"Project Documents" means this Freeman Coliseum Agreement, the Development Agreement, the Operating Agreement, the Spurs License Agreement, the SALE License Agreement, the Non-Relocation Agreement and the Spurs Guaranty Agreement.
"Recreational Uses" means non-professional leisure activities of a local scope performed by individuals or local teams for relaxation, hobby or fun. As such definition pertains to the Freeman Coliseum, "Recreational Uses" shall include individual or local amateur league basketball, ice hockey, ice skating or other leisure play, but shall not include, without limitation, professional sporting events, sporting events where spectators are charged admission, or national or regional amateur sporting events.
"SALE" has the meaning set forth in initial paragraph hereof.
"SALE Event" means any and all Events conducted at the Arena Project and/or Freeman Coliseum pursuant to the SALE License Agreement.
"SALE License Agreement" means the license agreement dated of even date hereof among the County, the Operator and SALE, as the same may be amended, supplemented, modified, renewed or extended from time to time.
"Scheduling Fee" has the meaning set forth in Section 2.3 hereof.
"Spurs" has the meaning set forth in the initial paragraph hereof.
"Spurs Guaranty Agreement" means the guaranty agreement of the Spurs dated as of the date hereof wherein the Spurs have guaranteed the obligations of the Project Developer under the Development Agreement and the obligations of the Operator under the Operating Agreement and this Freeman Coliseum Agreement.
"Spurs License Agreement" means the license agreement dated of even date hereof among the County, the Operator and the Spurs, as the same may be amended, supplemented, modified, renewed, or extended from time to time.
"Team" has the meaning set forth in the initial paragraph hereof.
"Temporary Advertising" means Advertising in connection with any Freeman Coliseum Event which is to be installed at the commencement of and removed or terminated at the conclusion of any such Freeman Coliseum Event.
Freeman Coliseum Agreement 7 ARTICLE II
RESTRICTIONS AND COOPERATION
Section 2.1 Binding Effect and Duration. The Freeman Coliseum is expressly subject to the restrictions, covenants and conditions contained in this Article II, which shall be binding on the County, CAB, the Spurs, SALE and the Operator, and all lessees and licensees of the County, CAB, the Spurs, SALE or the Operator, and any other Person who hereafter holds record title to any portion of the Freeman Coliseum or any interest therein, and shall inure to the benefit of and be enforceable by the County, CAB, the Operator, the Spurs, and SALE, and their respective successors and assigns, for a term commencing on the Operations Start Date and continuing until the earlier to occur of (i) the date that the Coliseum Redevelopment Plan is implemented (at which time the County, CAB, Spurs, SALE and the Operator will execute a written instrument terminating this Freeman Coliseum Agreement), or (ii) the date that this Freeman Coliseum Agreement is otherwise terminated in accordance with the terms hereof.
(a) Automatic Termination. This Freeman Coliseum Agreement shall automatically terminate upon any lawful termination of (i) the Spurs License Agreement pursuant to the terms thereof or (ii) the Development Agreement pursuant to the terms thereof. The provisions of Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.8, 2.11, 2.13, and 3.1(f) of this Freeman Coliseum Agreement shall automatically terminate upon any lawful termination of the Operating Agreement, but all other provisions of this Freeman Coliseum Agreement shall remain in full force and effect to the full extent provided herein.
(b) Rights After Termination. In the event of the termination of this Freeman Coliseum Agreement, the County, CAB, the Spurs, SALE and the Operator shall have no further rights against or liabilities to each other under this Freeman Coliseum Agreement, except for liabilities or rights which accrue prior to such termination and for liabilities and rights which expressly survive such termination.
Section 2.2 Use Restriction. Subject to the rights granted to SALE pursuant to the terms of the SALE License Agreement, CAB has the exclusive and unlimited right to use the Freeman Coliseum solely for the following uses (collectively referred to herein as "Permitted Uses"):
(a) Recreational Uses;
(b) Flat Floor Shows;
(c) School graduation ceremonies at the high school level or below;
(d) Any use which is mutually acceptable to CAB and the Operator and otherwise consistent with the terms of this Freeman Coliseum Agreement (i) in conjunction with an Event being conducted at the Arena Project on the same day, (ii) promoted as a part of the Event conducted at the Arena Project
Freeman Coliseum Agreement 8 on such day, and (iii) sponsored by the same event sponsor that is sponsoring the Event being conducted at the Arena Project on such day (collectively referred to herein as a "Complimentary Event");
(e) The Coastal Conservation Association annual banquet; and
(f) The Ducks Unlimited annual banquet.
Except as specifically provided in Section 2.5 hereof and subject to the uses reserved to SALE under the SALE License Agreement, CAB shall not, during the term use the Freeman Coliseum for any other Event without the prior written consent of the Operator, which consent may be withheld in its sole and absolute discretion.
Section 2.3 Operator's Exclusive Scheduling Rights.
During the term of this Freeman Coliseum Agreement, the Operator shall have the exclusive right to schedule Freeman Coliseum Events, other than SALE Events, which are not Permitted Uses. In connection with the Operator's right to schedule Freeman Coliseum Events the following provisions shall apply:
(i) by the tenth (10) day of each month, CAB shall make available to the Operator a calendar covering the current and next twelve (12) months which indicates (A) each date which has been scheduled for a proposed event pursuant to an executed and binding agreement, (B) each date reserved for a proposed event, and (C) each date which remains open for an event,
(ii) if the Operator desires to schedule an event, the Operator will contact CAB by the telephone to confirm open dates for events and CAB shall respond immediately to any such telephone inquiry as to whether the requested dates are scheduled pursuant to an executed and binding agreement, reserved for a proposed event or open; if a particular date is open and the Operator requests that such date be reserved for a proposed event, then CAB shall reserve such date for such event,
(iii) if a particular date is reserved by CAB for an event but not pursuant to an executed and binding agreement and the Operator requests such date for an event, then CAB shall, within ten (10) days of such request, indicate in writing to the Operator whether such date is available or is subject to a binding agreement,
(iv) if a particular date is reserved by the Operator for an event but not pursuant to an executed and binding agreement and CAB requests such date for an event, then the Operator shall, within ten (10) days of such request, indicate in writing to CAB whether such date is available or is subject to a binding agreement,
Freeman Coliseum Agreement 9 (v) in order to confirm the scheduling of an event, the Operator shall provide CAB with a written notice containing (A) the type of event to be scheduled, (B) the date(s) and time(s), and (C) the material economic terms and conditions proposed; CAB shall either accept or reject in writing such terms as soon as commercially practicable but in no event later than four (4) Business Days after such request from Operator. In the event Operator does not receive a response from CAB within such four (4) Business Day period, then Operator shall be entitled to provide CAB with the following written notice:
"SECOND AND FINAL NOTICE"
"Notice is hereby given pursuant to Section 2.3(v) of the Freeman Coliseum Agreement notifying you of a proposed event to be scheduled, together with the dates, times and material economic terms and conditions, all as attached as Exhibit "A". You have not responded to this request to confirm the scheduling of this event as provided for in Section 2.3(v).
"THIS IS A SECOND AND FINAL NOTICE requesting the scheduling of the referenced event. Please respond within one (1) Business Day of the receipt hereof."
In the event that CAB, for whatever reason, fails to accept or reject in writing the scheduling of such event within such additional one (1) Business Day period, following such Second and Final Notice, then such request shall be deemed accepted for all purposes hereunder.
If the Operator's request is accepted, the Freeman Coliseum Event shall be scheduled for the date(s) and time(s) and upon the economic terms and conditions set forth in the Operator's notice and become a confirmed date that may not be changed or released by CAB without the Operator's prior written approval. In consideration for the Operator scheduling the Freeman Coliseum Event the Operator shall be paid a scheduling fee (the "Scheduling Fee") equal to twenty percent (20%) of the Coliseum Event Revenues generated from such Freeman Coliseum Event, which Scheduling Fee shall be paid to the Operator within twenty (20) days after the date that CAB settles with the Freeman Coliseum Event promoter and its concessionaire but in no event beyond forty-five (45) days after such event. The Operator shall have the right, at its expense, to inspect and/or audit upon appropriate notice, CAB's books and records relating to such a Freeman Coliseum Event within one hundred eighty (180) days after the date that the Scheduling Fee is paid to the Operator. On the tenth (10) day of each month, the Operator will use its best efforts to make available to CAB a calendar covering the current and next twelve (12) months of scheduled and proposed events at the Arena Project.
Section 2.4 Minimum Revenues.
If Annual Coliseum Event Revenues for any Fiscal Year do not equal or exceed the "Minimum Revenues Amount" (herein so called) set forth below for the applicable Fiscal Year, then CAB shall have the right upon written notice to the Operator, given within sixty (60) days after the
Freeman Coliseum Agreement 10 date that the Operator is given written notice by CAB of the Annual Coliseum Event Revenues for a Fiscal Year, which notice shall be provided within sixty (60) days of the end of any such Fiscal Year, to terminate the provisions contained in Sections 2.2, 2.3 and 2.6 thru 2.10 hereof; provided, however, that CAB's termination of such provisions shall not be effective if the Operator pays to CAB the difference between the Minimum Revenues Amount for such Fiscal Year and the Annual Coliseum Event Revenues for such Fiscal Year within thirty (30) days of the Operator's receipt of written notice from CAB of its election to terminate such provisions of this Freeman Coliseum Agreement; provided, further however, that the Operator shall use good faith efforts to schedule Freeman Coliseum Events and to the extent that the Minimum Revenues Amount are not received for any Fiscal Year, the Operator shall have the right but not the obligation to pay the difference.
Fiscal Year Minimum Revenues Amount ($) 1 300,000.00 2 325,000.00 3 350,000.00 4 375,000.00 5 400,000.00
As to Fiscal Year six and thereafter during the term, the Minimum Revenues Amount shall be adjusted (but not reduced) each Fiscal Year by the CPI Fraction by multiplying $400,000.00 by the CPI Fraction.
Section 2.5 Freeman Seating. If any of Sections 2.2, 2.3 and 2.6 thru 2.10 are terminated in accordance with the terms of Section 2.4, then (i) the Freeman Coliseum shall be permanently reconfigured so that the number of Fixed Seats therein at any time, and for any purpose, does not exceed 5,000 Fixed Seats, provided, however, that without affecting the obligation to restrict the number of Fixed Seats as stated above, the ultimate configuration of the Freeman Coliseum resulting from any such reconfiguration shall not materially and adversely affect SALE's rights to use the Freeman Coliseum as permitted by the SALE License Agreement, (ii) at no time shall the maximum capacity of any Freeman Coliseum Event (except SALE Events) which is not a Permitted Use exceed 6,000 patrons including any use of temporary or portable seating (including risers) in the Fixed Seat area or on the floor of the Freeman Coliseum, and (iii) the Freeman Coliseum will not be used (except for Rodeo Events as defined in the SALE License Agreement) for professional sporting events or family shows (as such term is generally accepted within the entertainment and public facility industry).
Section 2.6 Other Scheduling Fees. If the Operator acts as the promoter for any Freeman Coliseum Event (other than with respect to the Permitted Uses and those Events referred to in Section 2.7 hereof), the Operator shall receive a Scheduling Fee for such event, which Scheduling Fee shall be calculated and payable in the same manner as set forth in Section 2.3.
Section 2.7 Complimentary Events. If the Operator or the Spurs sponsors a Complimentary Event in the Freeman Coliseum, the Operator or the Spurs, as applicable, shall be
Freeman Coliseum Agreement 11 charged a flat rental rate by CAB for use of the Freeman Coliseum which rate shall be the most favorable rate offered by CAB to sponsors of for-profit events in the Freeman Coliseum and no Scheduling Fee will be payable for such Complimentary Event. Any net rentals generated from a Complimentary Event sponsored by the Operator or the Spurs shall be included in the calculation of Annual Coliseum Event Revenues for purposes of Section 2.4 hereof.
Section 2.8 Advertising. The Spurs shall be the exclusive sales agent for all Advertising at the Freeman Coliseum, excluding Temporary Advertising for Permitted Uses and Advertising for SALE Events. CAB shall have the right to approve all Advertising content and contracts, such approval not to be unreasonably withheld. CAB agrees to pay the Spurs a commission in the amount of twenty percent (20%) of all Advertising sold by the Spurs (after deduction of any expenses of CAB, or Spurs which are approved by CAB, directly relating to such sales). CAB and the Spurs shall annually agree on the rate structure pertaining to such Advertising.
Section 2.9 Naming Restriction. The name of the Freeman Coliseum shall not be changed from "The Joe and Harry Freeman Coliseum" to any other name with commercial meaning or value without the prior written consent of the Operator, Spurs and SALE, which consent may not be unreasonably withheld, conditioned or delayed; provided, however, that, it shall be deemed "reasonable" for the Spurs to withhold its consent if the Spurs determines that such name change would materially and adversely impact the Naming Rights or the advertising rights of Sponsors or the Spurs sponsorship or advertising rights generally; provided, further, that it shall be deemed "reasonable" for SALE to withhold its consent if it determines that such name change would materially and adversely impact the advertising rights of Sponsors (as defined in the SALE License Agreement) of SALE during Rodeo Events.
Section 2.10 Exterior Advertising Restriction. Subject to the terms of the Spurs License Agreement and the SALE License Agreement, there shall be no Advertising placed on the exterior of the Freeman Coliseum without the prior written consent of the Spurs, which consent may not be unreasonably withheld, conditioned or delayed; provided, however, that it shall be deemed "reasonable" for the Spurs to withhold its consent if the Spurs determines that such exterior advertising would materially and adversely impact the Naming Rights. Advertising may be placed in the interior of the Freeman Coliseum so long as such Advertising is not visible from outside the Freeman Coliseum and is otherwise consistent with the terms hereof. Notwithstanding the foregoing, Temporary Advertising that includes the name of commercial sponsor as an integral part of the name of the Freeman Coliseum Event (e.g., Budweiser Superfest) which is the name of the touring event shall not be deemed a violation of the foregoing restriction.
Section 2.11 Concession Revenues. The Operator, the Spurs and SALE shall work with CAB to develop a mutually acceptable plan to maximize concession revenues at the Freeman Coliseum upon the expiration of the current concession agreement.
Section 2.12 Parking Rights. All Arena Project Parking Areas as described in Exhibit C, attached hereto, will be managed by the Operator and be exclusive for Basketball Events (as defined in the Spurs License Agreement), and, subject to the priority rights of SALE under the SALE
Freeman Coliseum Agreement 12 License Agreement, the Operator shall have the right to use the Coliseum Parking Areas for parking for events it schedules pursuant to Section 2.3 above for Freeman Coliseum Events. All parking spaces in the Arena Project Parking Areas (excluding Lot A) described in Exhibit C will be exclusive for events for the WNBA Team and Other Spurs Franchise Events, and the Operator shall make all, or a portion of, Lot A available for Freeman Coliseum Events if in the Spurs' reasonable determination Lot A is not necessary to provide the required parking load for events for the WNBA Team and Other Spurs Franchise Events. This determination will be based on a functional parking program consistent with the right of the Spurs and with due consideration to the need for parking at the Freeman Coliseum for simultaneous events. For events for the WNBA Team and Other Spurs Franchise Events, the Operator and CAB agree that a parking program shall be determined by the Operator and delivered on an annual basis (not later than October 1 of each year) to CAB's representative by a date to be determined by the Operator and shall provide for a priority of parking that utilizes Lots B, C, and that portion of Lot D all within the Arena Project Parking Areas (but not less than 50% of the number of spaces in Lot D), to the extent feasible, prior to the utilization of Lot A. Regardless of whether the Operator is acting as scheduling agent for the Freeman Coliseum pursuant to Section 2.3 hereof, subject to the first priority rights of SALE and the second priority rights of CAB as set forth in the SALE License Agreement, and provided that there is no Freeman Coliseum Event parking needed by CAB, the Operator shall have the right to use the Coliseum Parking Areas for parking for Other Events and Spurs Events. In addition, the Operator shall have exclusive rights to all Arena Project Parking Areas (excluding Lot A) for parking for Other Events at the Arena Project. Provided that there is no Arena Project Parking Areas needed by the Operator, CAB shall have the right to use the Arena Project Parking Areas for Freeman Coliseum Events. The Party who has the right to use a portion of the Parking Area for an Event will retain the revenue generated from that portion of the Parking Area for that Event after the deduction of any applicable expenses.
For all other Events not specifically addressed in this Section 2.12 hereof, Lot A parking will be available by priority, if needed, for Freeman Coliseum Events. In any case, if Lot A parking is utilized for a Freeman Coliseum Event, alternate parking will be made available to the Operator for an event held in the Arena.
Section 2.13 Arena Project Staffing Expense. In consideration for the services to be performed by the Operator pursuant to the terms of the Operating Agreement during SALE Events, CAB agrees to pay the Operator an annual fee in the amount of Twenty-Five Thousand and No/100 Dollars ($25,000.00) as such amount shall be adjusted each year beginning in year 2008 by the CPI Fraction by multiplying $25,000.00 by the CPI Fraction. Such payments shall be made in arrears annually on March 1 of each year with the first payment due on the first day of March subsequent to the initial Rodeo Season as defined in the SALE License Agreement.
Freeman Coliseum Agreement 13 ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 3.1 County's and CAB's Representations, Warranties and Covenants. The County and CAB hereby represent and warrant to, and covenant with, the Operator that:
(a) Organization. The County is a public body corporate and politic and a political subdivision of the State of Texas. CAB was created and exists pursuant to the authority of House Bill No. 812, Chapter 119, 51st Regular Session Texas Legislature (1949). The County and CAB, respectively, have all requisite power and authority to enter into this Freeman Coliseum Agreement.
(b) Authorization; No Violation. The execution, delivery and performance by the County and CAB of this Freeman Coliseum Agreement are within the power of the County and CAB and have been duly authorized by all necessary action and are authorized by and will not violate the County's charter, the County's code of ordinances, the County's administrative code and any other Applicable Law, or result in the breach of any material agreement to which the County or CAB is a party; this Freeman Coliseum Agreement has been duly executed and delivered by the County and CAB and this Freeman Coliseum Agreement constitutes a valid and binding obligation of the County and CAB.
(c) Litigation. Except as disclosed in writing prior to the date hereof by any Party, no suit is pending against or affects the County or CAB which could have a material adverse effect upon the County's or CAB's performance under this Freeman Coliseum Agreement.
(d) No Conflicts. This Freeman Coliseum Agreement is not prohibited by and does not conflict with any other agreements, instruments, judgments or decrees to which the County or CAB is a party or is otherwise subject.
(e) No Violation of Laws. Neither the County nor CAB has received notice as of the date of this Freeman Coliseum Agreement asserting any noncompliance in any material respect by the County or CAB with applicable statutes, rules and regulations of the United States of America, the State of Texas or any agency having jurisdiction over and with respect to the transactions contemplated in and by this Freeman Coliseum Agreement; and neither the County nor CAB is in default with respect to any judgment, order, injunction or decree of any court, administrative agency, or other Governmental Authority which is in any respect material to the transactions contemplated hereby.
(f) No Competing Facilities. During the Term (as defined in the Operating Agreement), including any renewals or extensions thereof, except as provided herein, the County and CAB each covenant and agree that it shall not directly or indirectly, own, manage, operate, control, finance, sponsor, develop, provide County-owned or CAB-owned land for, or in any other way materially participate in or materially cooperate (other than providing services normally provided by the County) with any indoor or outdoor sports entertainment or multi-use arena with an attendance
Freeman Coliseum Agreement 14 capacity of 5,000 to 30,000 and located within Bexar County, Texas ("Competing Facility") to which the general public is invited with or without charge for concerts, sports, entertainment and other events of the kind typically booked at arenas comparable to the Arena in the ordinary course of operations thereof ("Comparable Events"). This covenant shall not apply to (i) the Freeman Coliseum or the redevelopment thereof, (ii) the Henry B. Gonzalez Convention Center or the expansion thereof, (iii) events in the County's parks, (iv) all uses and practices of the County of a type presently in effect with respect to public events in public places of the County, and (v) any other facility that does not book Comparable Events.
Section 3.2 Operator's Representations, Warranties and Covenants. The Operator hereby represents and warrants to, and covenants with, the County, Spurs, SALE and CAB that:
(a) Organization. The Operator is a limited partnership duly formed and validly existing under the laws of the State of Texas. The Operator has all requisite power and authority to enter into this Freeman Coliseum Agreement.
(b) Authorization; No Violation. The execution, delivery and performance by the Operator of this Freeman Coliseum Agreement have been duly authorized by all necessary action and will not violate the charter documents of the Operator or result in the breach of or constitute a default under any loan or credit agreement, or other material agreement to which the Operator is a party or by which the Operator or its material assets may be bound or affected; this Freeman Coliseum Agreement has been duly executed and delivered by the Operator and this Freeman Coliseum Agreement constitutes a valid and binding obligation of the Operator.
(c) Litigation. Except as disclosed in writing prior to the date hereof by any Party, no suit is pending against or affects the Operator which could have a material adverse effect upon the Operator's performance under this Freeman Coliseum Agreement or the financial condition or business of the Operator. There are no outstanding judgments against the Operator which would have a material adverse affect upon its assets, properties or franchises.
(d) No Conflicts. Except as disclosed in writing prior to the date hereof by any Party, this Freeman Coliseum Agreement is not prohibited by and does not conflict with any other agreements, instruments, judgments or decrees to which the Operator is a party or is otherwise subject.
(e) No Violation of Laws. The Operator has received no notice as of the date of this Freeman Coliseum Agreement asserting any noncompliance in any material respect by the Operator with applicable statutes, rules and regulations of the United States of America, the State of Texas, or of any other state or municipality or agency having jurisdiction over and with respect to the transactions contemplated in and by this Freeman Coliseum Agreement; and the Operator is not in default with respect to any judgment, order, injunction or decree of any court, administrative agency, or other Governmental Authority which is in any respect material to the transactions contemplated hereby.
Freeman Coliseum Agreement 15 Section 3.3 Spurs' Representations, Warranties and Covenants. The Spurs hereby represents and warrants to, and covenants with, the County, Operator, SALE and CAB that:
(a) Organization. The Spurs is a limited liability company duly formed and validly existing under the laws of the State of Texas. The Spurs has all requisite power and authority to enter into this Freeman Coliseum Agreement. As of the date hereof, the Spurs own and control one hundred percent of the ownership interests in the Operator.
(b) Authorization; No Violation. The execution, delivery and performance by the Spurs of this Freeman Coliseum Agreement have been duly authorized by all necessary action and will not violate the charter documents of the Spurs or result in the breach of or constitute a default under any loan or credit agreement, or other material agreement to which the Spurs is a party or by which the Spurs or its material assets may be bound or affected; this Freeman Coliseum Agreement has been duly executed and delivered by the Spurs and this Freeman Coliseum Agreement constitutes a valid and binding obligation of the Spurs.
(c) Litigation. Except as disclosed in writing prior to the date hereof by any Party, no suit is pending against or affects the Spurs which could have a material adverse effect upon the Spurs' performance under this Freeman Coliseum Agreement or the financial condition or business of the Spurs. There are no outstanding judgments against the Spurs which would have a material adverse affect upon its assets, properties or franchises.
(d) No Conflicts. This Freeman Coliseum Agreement is not prohibited by and does not conflict with any other agreements, instruments, judgments or decrees to which the Spurs is a party or is otherwise subject.
(e) No Violation of Laws. The Spurs has received no notice as of the date of this Freeman Coliseum Agreement asserting any noncompliance in any material respect by the Spurs with applicable statutes, rules and regulations of the United States of America, the State of Texas, or of any other state or municipality or agency having jurisdiction over and with respect to the transactions contemplated in and by this Freeman Coliseum Agreement; and the Spurs is not in default with respect to any judgment, order, injunction or decree of any court, administrative agency, or other Governmental Authority which is in any respect material to the transactions contemplated hereby.
Section 3.4 SALE's Representations, Warranties and Covenants. SALE hereby represents and warrants to, and covenants with, the County, Operator, Spurs and CAB that:
(a) Organization. SALE is a non-profit corporation duly formed and validly existing under the laws of the State of Texas. SALE has all requisite power and authority to enter into this Freeman Coliseum Agreement.
(b) Authorization; No Violation. The execution, delivery and performance by SALE of this Freeman Coliseum Agreement have been duly authorized by all necessary action and will not
Freeman Coliseum Agreement 16 violate the charter documents of SALE or result in the breach of or constitute a default under any loan or credit agreement, or other material agreement to which SALE is a party or by which SALE or its material assets may be bound or affected; this Freeman Coliseum Agreement has been duly executed and delivered by SALE and this Freeman Coliseum Agreement constitutes a valid and binding obligation of SALE.
(c) Litigation. No suit is pending against or affects SALE which could have a material adverse effect upon SALE's performance under this Freeman Coliseum Agreement or the financial condition or business of SALE. There are no outstanding judgments against SALE which would have a material adverse affect upon its assets, properties or franchises.
(d) No Conflicts. This Freeman Coliseum Agreement is not prohibited by and does not conflict with any other agreements, instruments, judgments or decrees to which SALE is a party or is otherwise subject.
(e) No Violation of Laws. SALE has received no notice as of the date of this Freeman Coliseum Agreement asserting any noncompliance in any material respect by SALE with applicable statutes, rules and regulations of the United States of America, the State of Texas, or of any other state or municipality or agency having jurisdiction over and with respect to the transactions contemplated in and by this Freeman Coliseum Agreement; and SALE is not in default with respect to any judgment, order, injunction or decree of any court, administrative agency, or other Governmental Authority which is in any respect material to the transactions contemplated hereby.
Section 3.5 Mutual Covenants. Each Party hereby represents and warrants to, and covenants with, the other Parties that
(a) Additional Documents and Approval. Each Party, whenever and as often as each shall be reasonably requested to do so by any the other Party shall execute or cause to be executed any further documents, take any further actions and grant any further approvals as may be necessary or expedient in order to consummate the transactions provided for herein, and to carry out the purpose and intent of this Freeman Coliseum Agreement.
(b) Good Faith. In exercising its rights and fulfilling its obligations under this Freeman Coliseum Agreement, each Party shall act in good faith.
(c) No Termination. No Party shall terminate this Freeman Coliseum Agreement on the ground of ultra vires act or for any illegality. Subject to the foregoing, no such challenge may be asserted by the County, CAB or the Operator except by the institution of a declaratory action in which the Operator, County, CAB, SALE and the Spurs are named as parties
(d) Cooperation. The Parties mutually agree to contest any challenge to the validity, authorization and enforceability of this Freeman Coliseum Agreement ("Challenge"), whether asserted by a taxpayer or any other Person. The Operator shall in good faith select counsel to defend any such Challenge, which counsel shall be subject to the approval of the County not to be
Freeman Coliseum Agreement 17 unreasonably withheld or delayed. If the Challenge occurs during the construction and development period of the Development Agreement the costs of contesting the Challenge shall be shared equally by the County and the Operator. If the Challenge occurs after the Operations Start Date, then any legal fees, costs and other expenses in connection with such Challenge shall be treated as Arena Project Operating Expenses. Furthermore, the County and the Operator shall take all ministerial actions and proceedings necessary or appropriate to remedy any apparent invalidity, lack or defect in authorization, or illegality, or to cure any other defect, which has been asserted or threatened.
(e) Notice of Matters. Should any Party receive knowledge about any matter which may constitute a breach of any of their respective representations, warranties or covenants set forth herein which arises after the date hereof, the receiving Party shall promptly notify the other Parties of the same in writing. Specifically, without limitation, the County, CAB, SALE, Spurs and Operator shall promptly inform the others of any Challenge.
(f) Compliance With Laws. Each Party shall, in connection with its own use of (and, in the case of the County, its ownership of) and the exercise of its rights with respect to, the Arena Project, comply with all Applicable Laws relating thereto in accordance with the Operating Agreement. The County and CAB each shall, in connection with its own use of (and, in the case of the County, its ownership of) and the exercise of its rights with respect to, the Freeman Coliseum, comply with all Applicable Laws relating thereto.
(g) Coliseum Redevelopment Plan. Each Party shall work diligently to investigate, evaluate, and, if appropriate, to develop a Coliseum Redevelopment Plan which is mutually agreeable to each of the Parties (it being understood that any such plan must be agreed to by all Parties hereto); provided, however, that any failure by such Parties to reach mutual agreement and effectuate a Coliseum Redevelopment Plan shall not void or otherwise affect the restrictions, obligations or covenants set forth in this Freeman Coliseum Agreement or the enforceability hereof. The County and CAB further agree to provide funds and personnel to prepare and evaluate a Coliseum Redevelopment Plan. The failure of the Parties to agree to a Coliseum Redevelopment Plan shall not result in any liability on the part of the Parties.
(h) Survival of Covenants and Warranties. All covenants, representations and warranties contained in this Freeman Coliseum Agreement shall survive the execution and delivery of this Freeman Coliseum Agreement provided that all representations and warranties are made as of the date hereof and none of the County, CAB or the Operator shall be obligated to "down date" or reaffirm any such representation or warranties as of any date other than as of the date hereof. No action taken pursuant to or related to this Freeman Coliseum Agreement, including, without limitation, any investigation by or on behalf of a Party shall be deemed to constitute a waiver by the Party taking such action of compliance with any representation, warranty, condition or agreement herein.
Freeman Coliseum Agreement 18 ARTICLE IV
DEFAULTS AND REMEDIES
Section 4.1 Events of Default. Each of the following shall constitute an "Event of Default":
(a) If the County or CAB breaches any of the restrictions, obligations or covenants set forth in Article II (except for Section 2.12 hereof) or Section 3.1(f) hereof.
(b) If any Party breaches the restrictions, obligations, or covenants set forth in Section 2.12 hereof and such failure is not cured within ten (10) days after written notice.
(c) If any representation or warranty made by the Parties herein shall at any time prove to have been incorrect in any material respect as of the time made, and if the Party making such representation or warranty fails to cause such representation or warranty to become correct within thirty (30) days after written notice that such representation or warranty was incorrect; provided, however, that if it is not reasonably possible to cause such representation or warranty to become correct within such thirty-day period and such representation or warranty is capable of being cured, such cure period shall be for an unlimited period of time if within thirty (30) days after such written notice the curing Party commences diligently and thereafter continues to cause such representation or warranty to become correct.
(d) If any Party materially breaches any of the other covenants or provisions in this Freeman Coliseum Agreement other than as referred to in Section 4.1(a) and Section 4.1(b) and such failure is not cured within thirty (30) days after written notice; provided, however, that if it is not reasonably possible to cure such failure within such thirty (30) day period and such failure is capable of being cured, such cure period shall be for an unlimited period of time if within thirty (30) days after such written notice the curing Party commences diligently and thereafter continues to cure such failure.
(e) Any default by CAB under this Freeman Coliseum Agreement shall constitute a default by the County hereunder and any default by the County under this Freeman Coliseum Agreement shall constitute a default by CAB hereunder.
Section 4.2 Enforcement by Specific Performance, Mandamus or Injunctive Relief. The County and CAB each agrees that the restrictions, obligations and covenants in Sections 2.2, 2.5, 2.8, 2.9, 2.10, 2.12 and 3.1(f) hereof are of a kind for which, in the event of a breach thereof, there is no adequate remedy at law and for which money damages will not be adequate compensation. Therefore, the County and CAB each agrees that, if the County or CAB breaches or attempts to breach the restrictions, obligations or covenants in Sections 2.2, 2.5, 2.8, 2.9, 2.10, 2.12 and 3.1(f) hereof, the Operator, SALE or Spurs shall have the right to obtain an injunction, mandamus or decree of specific performance from any court of competent jurisdiction to restrain or compel the County or CAB, as applicable, to strictly adhere to the restrictions, obligations and covenants
Freeman Coliseum Agreement 19 contained in Sections 2.2, 2.5, 2.8, 2.9, 2.10, 2.12 and 3.1(f) hereof. The Operator's, SALE's and Spurs' right to seek injunctive relief under Sections 2.2, 2.5, 2.8, 2.9, 2.10, 2.12 and 3.1(f) hereof shall be without the necessity of: (i) proving irreparable harm; (ii) showing any balance of harm; (iii) consideration of the public interest; (iv) establishing that monetary damages are inadequate or that there is no other remedy available at law or in equity; or (v) the posting of a bond. Each of the County and CAB, for itself and its successors and assigns, acknowledges and agrees that the administration of an order for injunctive relief will not be impracticable and that, in the event of such breach or attempted breach, the balance of hardship weighs in favor of the entry of injunctive relief. The restrictions, obligations and covenants of the County and CAB in Sections 2.2, 2.5, 2.8, 2.9, 2.10, 2.12 and 3.1(f) hereof shall each be construed as an agreement independent of any other provision in this Freeman Coliseum Agreement. Any and all necessary costs paid or incurred by the Operator, SALE or Spurs to enforce the provisions of Sections 2.2, 2.5, 2.8, 2.9, 2.10, 2.12 and 3.1(f) hereof, if they prevail, shall be reimbursed to the Operator, SALE or Spurs, as applicable, by the County within thirty (30) days of the County's receipt of an invoice therefor.
Section 4.3 Institution of Litigation. To the extent permitted by Article VI, in addition to any other rights or remedies, any Party may institute litigation to recover damages for any Event of Default or to obtain any other remedy (including specific performance and any other kind of equitable remedy) consistent with the purposes of this Freeman Coliseum Agreement; provided, however, that in no event shall any Party hereto be liable for consequential, punitive or special damages as a result of any breach of the terms hereof, unless specifically provided for herein. Litigation pursuant to this Section shall only be instituted in the District Court of Bexar County, Texas or in the United States District Court in the San Antonio Division of the Western District of Texas. The County, CAB, SALE, the Spurs, and the Operator consent to the jurisdiction and venue of such courts. Neither the existence of any claim or cause of action of a Party, whether predicated on this Freeman Coliseum Agreement or otherwise, shall (a) constitute a defense to specific enforcement of the obligations of such other Party under this Freeman Coliseum Agreement or (b) bar the availability of injunctive relief or any other equitable remedy under this Freeman Coliseum Agreement.
Section 4.4 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Freeman Coliseum Agreement, the rights and remedies of the Parties are non-exclusive and cumulative and the exercise by any Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same Event of Default or any other Event of Default.
Section 4.5 Acceptance of Legal Process.
(a) Service on County or CAB. In the event that any legal or equitable action is commenced by the Operator, Spurs or SALE against the County or CAB, service of process on the County shall be made by personal service upon the Bexar County District Attorney, or in such other manner as may be provided by law, and service of process on CAB shall be made by personal service upon the Chairman of the Board of Directors of CAB or in such other manner as may be provided by law.
Freeman Coliseum Agreement 20 (b) Service on the Operator, SALE or Spurs. In the event any legal or equitable action is commenced against the Operator, SALE, or the Spurs, as applicable, service of process on the Operator, SALE, or the Spurs, as applicable, shall be made by personal service upon the statutory agent of the Operator, SALE, or the Spurs, as applicable, in the State of Texas (which Texas resident agent the Operator, SALE and Spurs, as applicable shall establish), or in such other manner as may be provided by law.
ARTICLE V
GENERAL PROVISIONS
Section 5.1 Reliance on Freeman Coliseum Agreement. Each Party hereby acknowledges (i) the necessity of this Freeman Coliseum Agreement to facilitate cooperation among the Operator, County, Spurs, SALE and CAB for use of the Arena and the Freeman Coliseum, and (ii) EACH PARTY HAS ENTERED INTO THE PROJECT DOCUMENTS IN RELIANCE ON THE TERMS AND CONDITIONS OF THIS FREEMAN COLISEUM AGREEMENT (SPECIFICALLY, BUT NOT LIMITED TO, THE RESTRICTIONS, RIGHTS, OBLIGATIONS AND COVENANTS CONTAINED IN ARTICLE II HEREOF) AND THAT BUT FOR THE RESTRICTIONS, RIGHTS, OBLIGATIONS AND COVENANTS CONTAINED IN ARTICLE II AND ELSEWHERE HEREIN, AND THE BINDING NATURE AND ENFORCEABILITY OF THIS FREEMAN COLISEUM AGREEMENT, THE PARTIES WOULD NOT HAVE ENTERED INTO THE PROJECT DOCUMENTS.
Section 5.2 Assignment. The Operator shall have the right to assign its rights and interests in this Freeman Coliseum Agreement only in connection with its permitted assignment of its rights under the Operating Agreement. The Spurs shall have the right to assign its rights and interests in this Freeman Coliseum Agreement only in connection with its permitted assignment of its rights under the Spurs License Agreement. SALE shall have the right to assign its rights and interests in this Freeman Coliseum Agreement only in connection with its permitted assignment of its rights under the SALE License Agreement. Except for the foregoing, the Operator, Spurs and SALE shall not assign or transfer its rights or interests in this Freeman Coliseum Agreement without the prior written consent of the County. Notwithstanding anything to the contrary contained in this Section, neither the Operator nor Spurs shall be prohibited nor restricted from pledging its interest in this Freeman Coliseum Agreement, and any of the revenues to be collected or received by the Operator or Spurs, as applicable, hereunder, to any bank, insurance company, savings association, federal savings bank or other lender or entity providing credit to the Operator, Spurs or any of their Affiliates. The County and CAB may assign or otherwise transfer this Freeman Coliseum Agreement or any of their rights or interests herein, provided that the transferee must execute an assignment and assumption agreement in such form and content as is reasonably acceptable to the Operator, Spurs and SALE.
Section 5.3 Notice. All notices, demands, consents, approvals, statements, requests and invoices to be given under this Freeman Coliseum Agreement shall be in writing, signed by the
Freeman Coliseum Agreement 21 Party or officer, agent or attorney of the Party giving the notice, and shall be deemed effective upon receipt if hand delivered, or sent by facsimile with transmission confirmation or overnight courier service; and if sent by the United States mail, postage prepaid, certified mail, return receipt requested, then three (3) Business Days after mailing or the date of refusal, addressed as follows:
To the County and CAB: Bexar County Commissioners Court 100 Dolorosa, Suite 100 San Antonio, Texas 78205 Attn: County Judge Fax: (210) 335-2926
and to
Coliseum Advisory Board 3201 E. Houston San Antonio, Texas 78220 Attn: Chairman Fax: (210) 226-5081 with copy to: Susan D. Reed Criminal District Attorney of Bexar County Bexar County Justice Center 300 Dolorosa, Fifth Floor San Antonio, Texas 78205 Fax: (210) 335-2884
and to
Chief of the Civil Division Officer of the Criminal District Attorney of Bexar County Bexar County Justice Center 300 Dolorosa, Suite 4049 San Antonio, Texas 78205 Fax: (210) 335-2151
Freeman Coliseum Agreement 22 and to
David E. Marquez Community Arena Project Manager 100 Dolorosa, Suite 101 San Antonio, Texas 78205 Fax: (210) 335-3942
To the Spurs or Operator: Rick Pych Community Arena Management, Ltd. Alamodome 100 Montana San Antonio, Texas 78203 Fax: (210) 554-0999 with copy to: Denis Clive Braham, Esq. Todd B. Brewer, Esq. Winstead Sechrest & Minick P.C. 910 Travis, Suite 2400 Houston, Texas 77002 Fax: (713) 650-2400
and to
Tullos Wells, Esq. Bracewell & Patterson 800 Alamo Center 106 S. St. Mary's Street San Antonio, Texas 78205 Fax: (210) 299-0126
To SALE: R. Keith Martin Executive Director San Antonio Livestock Exposition, Inc. 3201 E. Houston St. San Antonio, Texas 78210 Fax: (210) 227-7934
Freeman Coliseum Agreement 23 With copy to: Timothy N. Tuggey, Esq. Ruth K. Agather, Esq. Arter & Hadden, LLP 700 N. St. Mary's St., Suite 800 San Antonio, Texas 78205 Fax: (210) 654-4034
Any Party may from time to time by written notice given to the others pursuant to the terms of this Section 5.3 change the address or designees to which notices shall be sent or designate one or more additional Persons to whom notices are to be sent.
Section 5.4 Attorneys' Fees. In the event of any controversy, claim or dispute between or among the Parties arising from or relating to this Freeman Coliseum Agreement, the prevailing Party shall be entitled to recover reasonable costs, expenses and attorneys' fees. For all purposes of this Freeman Coliseum Agreement, the terms "attorneys' fees" or "counsel fees" shall be deemed to include paralegals and legal assistants' fees, and wherever provision is made herein for the payment of attorneys' or counsel fees or expenses, such provision shall include, but not be limited to, such fees and expenses (and any applicable sales taxes thereon) incurred in any and all judicial, bankruptcy, reorganization, administrative or other proceedings, including appellate proceedings, whether such fees or expenses arise before proceedings are commenced or after entry of a final judgment.
Section 5.5 Time of Essence. Time is of the essence with respect to the performance of each of the covenants and obligations contained in this Freeman Coliseum Agreement.
Section 5.6 Relationship of Parties. No partnership, joint venture landlord-tenant or other business relationship is established among the Parties under this Freeman Coliseum Agreement.
Section 5.7 Severability. If and to the extent that a court of competent jurisdiction determines that any provision of this Freeman Coliseum Agreement or part thereof is unenforceable, whether by virtue of excessive scope, geographical limitation, term or otherwise, such provision or part thereof shall be interpreted so as to delete that portion of the provision which exceeds the maximum legal prohibition or otherwise to modify such provision in such a manner so as to make this Freeman Coliseum Agreement, as so modified, enforceable to the fullest extent permitted by law.
Section 5.8 Interpretations. To the extent permitted by the context in which used, (a) words in the singular number shall include the plural, words in the masculine gender shall include the feminine and neuter, and vice versa, and (b) reference to "persons" or "parties" in this Freeman Coliseum Agreement shall be deemed to refer to natural persons, corporations, general partnerships, limited partnerships, trusts and other entities.
Freeman Coliseum Agreement 24 Section 5.9 Binding Effect. This Freeman Coliseum Agreement, and the terms, provisions, promises, covenants and conditions hereof, shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and assigns.
Section 5.10 Captions. Captions and paragraph headings used herein are for convenience only and are not a part of this Freeman Coliseum Agreement and shall not be deemed to limit or alter any provisions hereof and shall not be deemed relevant in construing this Freeman Coliseum Agreement.
Section 5.11 Entire Agreement. This Freeman Coliseum Agreement and the referenced Exhibits, each of which is incorporated herein, together with the other Project Documents to the extent applicable, constitutes the entire understanding and agreement of the Parties with respect to the subject matter of this Freeman Coliseum Agreement. This Freeman Coliseum Agreement integrates all of the terms and conditions mentioned herein or incidental hereto and supersedes all negotiations or previous agreements between the Parties with respect to all or any part of the subject matter hereof.
Section 5.12 Amendment; Waiver. No alteration, amendment or modification hereof shall be valid unless in a written instrument executed by the County, CAB, Spurs, SALE and the Operator with the same formality as this Freeman Coliseum Agreement. The failure of the County, CAB, Spurs, SALE or the Operator to insist in any one or more instances upon the strict performance of any of the covenants, agreements, terms, provisions or conditions of this Freeman Coliseum Agreement or to exercise any election herein contained shall not be construed as a waiver or relinquishment for the future of such covenant, agreement, term, provision, condition, election or option, but the same shall continue and remain in full force and effect. No waiver by the County, CAB, Spurs, SALE or the Operator of any covenant, agreement, term, provision or condition of this Freeman Coliseum Agreement shall be deemed to have been made unless expressed in writing and signed by an appropriate official on behalf of the Operator, County, Spurs, SALE or CAB, as applicable.
Section 5.13 Applicable Law. The laws of the State of Texas shall govern the interpretation and enforcement of this Freeman Coliseum Agreement.
Section 5.14 Consent. No consent or approval by any Party required under the terms of this Freeman Coliseum Agreement shall be valid or be of any validity whatsoever unless the same shall be in writing, signed by such Party.
Section 5.15 Counterparts. This Freeman Coliseum Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
Section 5.16 Conflict. If there is a conflict or inconsistency between the terms and conditions provided in this Freeman Coliseum Agreement and the terms and conditions set forth in the Operating Agreement, then the terms of this Freeman Coliseum Agreement shall control.
Freeman Coliseum Agreement 25 Section 5.17 Conflict Between or Among Spurs and SALE License Agreements and Freeman Coliseum Agreement. If there is a conflict or inconsistency between the provisions of this Freeman Coliseum Agreement and the provisions of the Spurs License Agreement or the SALE License Agreement, then such conflict or inconsistency shall be resolved pursuant to the provisions of Article VI hereof as if the Spurs were a "Party" hereto and the conflict or inconsistency at issue arose under this Freeman Coliseum Agreement; provided, however, that any mediator or arbitrator of such a conflict or inconsistency shall resolve such conflict or inconsistency by reforming the applicable agreement while (i) implementing to the extent possible the intent of the parties as of the time hereof, (ii) maximizing to the extent possible the benefits of the Spurs, SALE, the Operator, and the County under their respective agreements; provided, further however, that the resolution of any such conflict or inconsistency shall not provide for economic liability among the Operator, County, Spurs, or SALE. The Parties hereby acknowledge and agree that the Spurs an intended third party beneficiary of this Section 5.17.
Section 5.18 Memorandum. The Parties hereby acknowledge and agree that a memorandum reciting the existence and terms of this Freeman Coliseum Agreement may be recorded by any Party in the records of Bexar County, Texas, and that the Parties agree to cooperate in the creation and recording of any such memorandum.
Section 5.19 Construction. The language used in this Freeman Coliseum Agreement will be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction will be applied against any Party.
Section 5.20 Prior Agreements Superseded. This Freeman Coliseum Agreement supersedes any prior understanding or written or oral agreements between the Parties respecting the within subject matter, including, without limitation, the MOA, and together with the Operating Agreement, the SALE License Agreement, Spurs License Agreement, Development Agreement, Non-Relocation Agreement, and Spurs Guaranty Agreement contains the entire understanding between the Parties with respect thereto.
ARTICLE VI
DISPUTE RESOLUTION
Section 6.1 Mediation.
Freeman Coliseum Agreement 26 A. Any claim, dispute, or other matter in question arising out of or related to this Freeman Coliseum Agreement shall be subject to mediation as a condition precedent to arbitration or the institution of legal or equitable proceedings by either party.
B. The Parties shall endeavor to resolve claims, disputes and other matters in question between them by mediation which, unless the parties mutually agree otherwise, shall be in accordance with the Commercial Arbitration Rules of the American Arbitration Association then currently in effect. Request for mediation shall be filed in writing with the other parties to this Freeman Coliseum Agreement and with the American Arbitration Association. The request may be made concurrently with the filing of a demand for arbitration but, in such event, mediation shall proceed in advance of arbitration or legal or equitable proceedings, which shall be stayed pending mediation for a period of thirty (30) days from the date of filing, unless stayed for a longer period by agreement of the parties or court order.
C. The Parties agree to split the mediator's fee and any filing fees equally. The mediation shall be held in Bexar County, Texas, unless another location is mutually agreed upon. Written agreements reached in mediation shall be enforceable as settlement agreements in any court having jurisdiction thereof.
Section 6.2 Arbitration.
A. Any claim, dispute or other matter in question arising out of or related to this Freeman Coliseum Agreement or otherwise arising from the operation and management of the Arena Project or the Freeman Coliseum shall be subject to arbitration. Prior to arbitration, the Parties shall endeavor to resolve disputes by mediation in accordance with the provisions above.
B. Claims, disputes and other matters in question between the Parties that are not resolved by mediation shall be decided by arbitration which, unless the parties mutually agree otherwise, shall be in accordance with the Commercial Arbitration Rules of the American Arbitration Association currently in effect and as modified herein. Demand for arbitration shall be filed in writing with the other parties to this Freeman Coliseum Agreement and with the American Arbitration Association.
C. A demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall the demand for arbitration 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. An arbitration arising out of or related to this Freeman Coliseum Agreement may be consolidated with an arbitration with the parties or entities involved in the operating or management of the Arena Project or the Freeman Coliseum if such arbitration involves common issues of fact relating to the parties' obligations under this Freeman Coliseum Agreement.
Freeman Coliseum Agreement 27 E. All demands for arbitration and all answering statements thereto which include any monetary claim, counterclaim or cross-claim must state the monetary amount being sought. In the event that the monetary amount is unliquidated or has not been fully determined, the demand or answering statement seeking such recovery shall state, in good faith, the minimum amount of such monetary claim, exclusive of interest and attorneys' fees.
F. All arbitrations involving monetary claims in excess of Two Hundred Fifty Thousand Dollars ($250,000), exclusive of interest and attorney's fees, shall be decided by an arbitration panel consisting of three (3) persons.
G. The arbitrator (or panel of arbitrators, if applicable) shall establish reasonable procedures and requirements for the production of relevant documents and require the exchange of information concerning witnesses to be called. For arbitrations involving monetary claims in excess of Fifty Thousand Dollars ($50,000): (1) the parties shall be entitled to discover all documents and information reasonably necessary for a full understanding of any legitimate issue raised in the arbitration and (2) the parties may use all methods of discovery available under the Federal Rules of Civil Procedure, as modified by the Local Court Rules of the United States District Court for the Western District of Texas, and shall be governed thereby. Prior to the deposition of any expert witness, the party proposing to call such a witness shall provide a full and complete report by the expert, together with the expert's calculations and other data by which the expert reached any opinions concerning the subject matter of the arbitration. The report shall be provided no less than ten (10) days prior to the date set for the expert witness' deposition. Any disputes arising from such discovery shall be decided by the arbitrator (or panel) and such decision or action taken by the arbitrator (or panel) shall be final as in all factual matters.
H. There shall be a prehearing meeting between the parties at which each party shall present a memorandum disclosing the factual basis of its claim and defenses and disclosing legal issues raised. The memorandum shall also disclose the names of any expert a party shall present as a witness during the proceedings. At the prehearing meeting, the arbitrator (or panel) shall make and set schedules for hearings consistent with their powers as set forth herein.
I. If the arbitrator (or panel) finds, after affording an opportunity to be heard, that a party has abused the discovery process or has failed to act in good faith with regard to discovery or these arbitration rules, the arbitrator (or panel) shall have, in addition to any other powers conferred by law or the Commercial Arbitration Rules, those powers conferred upon trial courts by the Federal Rules of Civil Procedure, subject to the same conditions and limitations set forth therein.
J. The Federal Rules of Evidence shall be applied by the arbitrator (or panel) but liberally construed to allow for the admission of evidence that is helpful in resolving the controversy. Rulings on the admission of evidence made by the arbitrator (or panel) at the hearing shall be final and not subject to any appeal. At the time of the award, the arbitrator (or panel) shall prepare and provide to the parties findings of fact and conclusions of law supporting the award. When such findings of fact and conclusions of law are provided, the findings of fact shall be final.
Freeman Coliseum Agreement 28 K. The award of the arbitrator (or panel) shall be final except that any party to the arbitration may request judicial review of the award for errors of law (other than errors relating to discovery disputes and admissibility of evidence). Such review must be filed in a court having jurisdiction thereof no later than thirty (30) days after the party seeking review receives or is deemed to have received notice of the award. When such action for judicial review has been timely and properly filed, no other action for enforcement of the award shall be initiated or shall proceed until a final judgment has been rendered in the proceeding for review of the award for errors of law.
L. The County hereby waives sovereign immunity on behalf of itself for the sole purpose of an arbitration proceeding instituted by the Operator in accordance with the terms hereof and any suit which may be brought to enforce an award of an arbitration brought in accordance with the terms hereof.
M. Notwithstanding any provision of this Freeman Coliseum Agreement to the contrary and without limiting any rights pursuant to Section 4.2 hereof, any Party may seek injunctive relief at any time from any court of competent jurisdiction of Bexar County, Texas. In the event that a dispute or controversy requires emergency relief before the matter may be resolved pursuant to these ADR procedures, the Parties expressly agree that the ADR procedures will still govern the ultimate resolution of that portion of the dispute or controversy not resolved pursuant to said court order.
[SIGNATURE PAGE FOLLOWS]
Freeman Coliseum Agreement 29 IN WITNESS WHEREOF, the Parties hereto have entered in this Freeman Coliseum Agreement as of the day and year first herein above written.
OPERATOR:
COMMUNITY ARENA MANAGEMENT, LTD
By: SA Manager, L.L.C., its general partner.
By:______Peter Holt, President
COUNTY:
By:______Cyndi Taylor Krier, County Judge
______Robert Tejeda Paul Elizondo Commissioner Precinct No. 1 Commissioner Precinct No. 2
______Lyle Larson Tommy Adkisson Commissioner Precinct No. 3 Commissioner Precinct No. 4
COLISEUM ADVISORY BOARD:
By:______Joe Bradberry, Chairman
______Jim Lunz, Vice Chairman Johnny Guerra
______Edward G. Steves Dan Puckett
SPURS:
Freeman Coliseum Agreement SAN ANTONIO SPURS, L.L.C.
By:______Peter Holt, Manager
SALE:
SAN ANTONIO LIVESTOCK EXPOSITION, INC.
By:______R. Keith Martin, Executive Director
Freeman Coliseum Agreement Attachments:
Exhibit A - Arena Project Exhibit B - Combined Site Exhibit C - Arena Project Parking Areas Exhibit D - Coliseum Parking Areas
Freeman Coliseum Agreement 32