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HomeMy WebLinkAbout2008.01.14 Council Special Meeting Packet AGENDA PASCO CITE'COUNCIL Special Meeting 7:00 p.m. January 14,2008 1. CALL TO ORDER. 2. ROLL CALL (a) Pledge of Allegiance. 3. BUSINESS ITEMS: (a) Baseball Stadium Lease: 1. Agenda Report from Gary Crutchfield,City Manager dated December 13, 2007. 2. Proposed Lease Agreement (Council packets only; copy available in the City Manager's office, the Pasco Library or on the city's website at www.pasco-wa.gov for public review). MOTION: I move to approve the 10-year lease agreement with Northwest Baseball Ventures for the Baseball Stadium and, further, authorize the Mayor to sign the agreement. 4. ADJOURNMENT. AGENDA REPORT TO: City Council December 13,2007 FROM: Gary Crutchfi Manager Regular Mtg.: 12/17/07 Re-submitted—Regular Mtg.: 1/7/08 Re-submitted—Special Mtg.: 1/14/08 SUBJECT: Baseball Stadium Lease I. REFERENCE(S): ]. Proposed Lease Agreement (Council packets only; copy available in the City Manager's office, the Pasco Library or on the city's website at www.pasco-wa.gov for public review) II. ACTION REQUESTED OF COUNCIL/STAFF RECOMMENDATIONS: 1/14: MOTION: I move to approve the 10-year lease agreement with Northwest Baseball Ventures for the Baseball Stadium and, further, authorize the Mayor to sign the agreement. 111, FISCAL IMPACT: See discussion below. IV. HISTORY AND FACTS BRIEF: A) The city's professional baseball stadium, built in 1995 has been leased to Northwest Baseball Ventures since June 2004. That five-year lease will expire at the end of 2008. The general provisions of the lease include rent at $15,000/year the first year, rising by $2,500 each year to $25,000 in 2008; tenant pays for most utilities; city provides major structure repair. The tenant was also obligated to spend $50,000 in tenant improvements at the stadium in the first two years of the lease; in exchange, the city provided the right to sell (rent)the stadium name for the period of the lease. B) Over the past four years the tenant has established a strong presence in the Tri-Cities community and has developed a stronger fan base (average ticket sales have increased each of the past four years). The tenant has performed its responsibilities under the lease satisfactorily and has been timely with all rent and other payments due the city. Given the improved business operation being realized, the tenant desires a new lease agreement be established before the current lease expires. Inasmuch as finding a replacement tenant would require about a year, it is also in the city's interest to determine whether or not a new lease agreement is acceptable, at the soonest opportunity. C) The new lease provides a longer term arrangement for occupancy of the stadium by a tenant that is realizing some success in growing the business. It is also structured to provide the city the strong probability of a "break even" on the stadium operation each year, as revenues/taxes from the tenant are expected to offset the city's cost obligations each year(other than debt service), assuming no major structural repair work is required. Beyond that, the tenant's installation of the modular office building speaks volumes as to the tenant's commitment to the Tri-Cities market for professional baseball. V. DISCUSSION: A) The proposed 10-year lease provides for the following(key)changes: • Term: the old five-year lease will be replaced by a 10-year lease but will include a five-year extension(thus, a total of 15 years), subject to mutual agreement on rent for the extension period; • Rent: the base rent in 2008 will remain $25,000 (same as old lease), but will increase $1,000 each year (essentially represents a 4% annual increase) through the initial 10- year lease term. Rent for the five-year extension is subject to negotiation and mutual agreement at that time; 3(a) • Additional Rent: the city has received a modest payment from the tenant over the past two years under the current lease provision (5% of adjusted ticket revenue exceeding $250,000 annually). The proposed lease will increase the threshold to $400,000 and increase the deduction for MLB from 5% to 7% over the lease term. The effect of the change is that the city will likely receive no additional rent payment in 2008,but such payments are likely to resume in 2009 or 2010, at the latest. • Utilities: tenant will pay for all utilities (except well water) consumed by the stadium operation. • Winterization: city has performed this service (to assure its proper execution) with reimbursement of cost by tenant; under new lease, city will continue to perform the service but will not be reimbursed its cost. • Office Building: tenant is required to install modular office building at its expense; city will credit base rent by 1/15"' of tenant's cost but not more than $175,000 over the 15-year lease period. • Termination: if lease terminated by tenant prior to tenth year, no obligation on city to pay balance of rent credit owed for office building; if the city increases rent for five year renewal period more than acceptable by tenant, the city is obligated to pay balance of rent credit. • Naming Rights: tenant will have right to sell (rent)name of stadium for term of lease (same as current lease). • Insurance: new lease increases tenant insurance obligations, from $1 million occurance/$2 million aggregate (old lease) to $2 million occurance/$5 million aggregate(new lease). B) The city's lease revenue and costs are estimated as follows: Lease Revenue: 2008 2009 2010 Rent $25,000 $26,000 $27,000 Additional Rent 0 0 $1,000 Admissions Tax $9,900 $10,500 $11,000 Cross Revenue $34,900 $36,500 $39,000 Rent Credit(max) -$11,666 - 11 666 -$11,666 Net Revenue $23,234 $24,834 $27,334 Annual Operating Expenses: Personnel $500 Supplies $500 Professional * $1,000 Insurance $5,000 Electricity(well) $1,000 Repair/Maintenance * $15,000 Administration/Accounting $2,000 $25,000 * variable C) The only risk to the city in the proposed lease is the possibility of a major repair being required during the term. For that reason, staff has insisted on a terni not to exceed ten years (the tenant prefers 15 years), as it will provide the city an opportunity to assess its exposure before agreeing to the five-year extension. D) The provisions for stadium naming rights (Section Xi V) has been revised to incorporate the tenant's offer to spend at least $5,000 on stadium improvements for each year they have a stadium name sponsorship agreement(in other words, each year they have income from a stadium sponsor, they will spend $5,000 on the stadium). Such improvements may occur in aggregate (perhaps $20,000 for one improvement in the fourth year) and must be approved by the city prior to construction. This provision would be subject to renegotiation at the end of the 10-year lease,if desired by either party. E) Staff recommends the proposed lease be approved. BASEBALL STADIUM LEASE THIS BASEBALL STADIUM LEASE ("Lease") is made and entered into this day of January, 2008, by and between the CITY OF PASCO, a Washington municipal corporation ("City"), and NORTHWEST BASEBALL VENTURES I LLC, a Washington limited liability company(the "Tenant"). RECITALS: City owns certain real property in Franklin County, Washington, legally described in Exhibit A attached hereto (the "Property"), upon which City has constructed a baseball stadium and related improvements (the "Baseball Stadium"). Tenant desires to lease from City, and City agrees to lease to Tenant, the Property and Baseball Stadium (collectively the "Premises") on the terms and conditions set forth herein. This Lease is intended to supersede and replace in its entirety that certain Baseball Stadium Lease entered into by City and Tenant dated June 8, 2004 (the "2004 Lease"). By executing this Lease, City and Tenant agree that the 2004 Lease shall be terminated effective December 31, 2007. NOW, THEREFORE, City and Tenant hereby agree: 1. LEASE City leases to Tenant and Tenant leases from City, in accordance with the terms hereof, the Premises (including the Baseball Stadium located thereon). 11. USES 2.1 Uses. a. Use. Subject to Section 2.1c, Tenant shall have the exclusive and unrestricted right to use and operate the Premises for any baseball or non-baseball events that Tenant sponsors or that Tenant allows third parties to sponsor. Tenant shall operate the Premises in a sound and professional manner. The Premises shall be a public facility, and the seating, parking, concession stands, restroom facilities, and other specified areas thereof shall be open to the public, subject to reasonable admission fees and other reasonable restrictions. Notwithstanding the foregoing, Tenant may not use the Premises, or permit any other person or entity to use the Premises, for any improper, immoral or unlawful purpose, for a use or purpose inconsistent with applicable zoning or the primary use of the Premises for professional baseball purposes, or for any use that would constitute a public or private nuisance or would make void or voidable any insurance then in force with respect to the Premises. Tenant also may not use the Premises, or permit any other person to use the Premises, for flea markets, bazaars, or similar events for the sale of used or second-hand items. -1- b. Baseball Equipment, This Lease includes the right of Tenant to use at the Premises the baseball equipment identified in Exhibit B attached hereto (the "Equipment"). City makes no warranty or representation concerning the condition of such Equipment. Tenant agrees to maintain such Equipment in good working condition (reasonable wear and tear excepted) and to replace items of Equipment as reasonably necessary. Upon the expiration of the Term (as defined below) of this Lease all items of Equipment, including replacements thereof, shall belong to City, provided that with respect to replacements that are less than two (2) years old as of the date of expiration of the Lease, such replacements shall become the property of the City only if the City reimburses Tenant for the unamortized cost incurred by Tenant to purchase such replacements, based upon an amortization period of the lesser of sixty (60) months or the useful life of such replacements. C. Other Uses. Subject to the scheduling provisions set forth in this Lease, City shall have the right to use the Premises for up to five (5) community events sponsored by City (each a "Community Event") per calendar year during the Term, including a 4th of July fireworks display. Each day of a multi-day Community Event shall count as one Community Event. Tenant shall allow community baseball events and baseball events sponsored by local colleges and universities to take place in the Baseball Stadium at the lowest reasonable rental rate possible, and subject to the availability of the Baseball Stadium. Such baseball events shall not be deemed Community Events. Non-baseball events sponsored by Tenant or by third parties and Community Events shall, collectively, be "Other Events." Tenant shall operate the Baseball Stadium during Community Events and City shall reimburse Tenant for Tenant's reasonable actual out-of-pocket cost of operating the Baseball Stadium during such events, including utility costs. 2.2 Exclusive Rights. Tenant shal I have the exclusive right during the Term to do the following: a. To use the Premises (including the locker rooms) for professional baseball purposes and to conduct Other Events permitted by this Lease; b. To allow third party sponsors to use the Premises to conduct Other Events permitted by this Lease; C. To use the baseball team office located within the Premises; d. To use the storage facilities dedicated to the baseball team and its equipment; e. To solicit advertisements to be located on the interior walls of the Baseball Stadium, including without limitation, those to be located on the scoreboard, and to solicit advertisements to be located on that portion of the exterior walls of the Baseball Stadium above the concourse area and described in Exhibit C, and to install and receive and retain all revenue from such advertisements. Tenant may not display advertisements on the exterior walls of the Baseball Stadium, other than above the concourse area, without City's prior consent. Advertisements that occur inside or on the exterior walls of the Stadium may not include or connote adult content, firearms or tobacco. City may place signage within the Baseball Stadium announcing upcoming City functions and events with Tenant's prior consent, which consent may not be unreasonably withheld. -2- f. To direct all aspects of the operation, management and control of the Premises, except as expressly set forth in this Lease; g. To sell food, drink and souvenir concessions (collectively "Concessions") to patrons of the Premises during baseball games or Other Events, subject to the provisions contained in Section VIII below, and to retain all revenues therefrom; and h. To use the press box area during baseball games, and during all Other Events sponsored by Tenant or third parties taking place within the Baseball Stadium. Public address equipment provided by Tenant shall be available for the use by City for Community Events, provided such public address equipment is operated by an employee or designee of Tenant or an employee or designee of City trained to use such equipment and approved by Tenant (such approval not to be unreasonably withheld). If the public address equipment is operated by an employee or designee of Tenant for a Community Event, City shall reimburse Tenant for the reasonable actual costs to make such employee or designee available to operate such equipment. 2.3 Scheduling. On or before September 1" of each calendar year, beginning September 1, 2008, City shall deliver to Tenant a schedule of the soccer tournaments to be held during the next calendar year in the playing fields adjacent to the Baseball Stadium. Tenant shall use its best efforts to prevent the Northwest League (the "Northwest League"), which is a member of the National Association of Professional Baseball ("NAPBL") from scheduling a Minor League Baseball game in the Baseball Stadium on a date that a soccer tournament will be held in the playing fields adjacent to the Baseball Stadium. If a Minor League Baseball game is scheduled in the Baseball Stadium on the date of a soccer tournament, Tenant shall schedule such baseball game as a night game. City shall submit a request to Tenant to use the Baseball Stadium for a Community Event at least thirty (30) days before the proposed date of the Community Event, Tenant shall make reasonable efforts to accommodate City's scheduling requests for Community Events. Tenant shall also make reasonable efforts to accommodate other soccer tournaments in the playing fields adjacent to the Baseball Stadium (in addition to those designated under the first sentence of this Section 2.3) if requested by City. Soccer tournaments scheduled for 2008 are listed in Schedule 1, which dates are acknowledged by Tenant. In addition to the foregoing, Tenant shall not schedule a baseball game or Other Event on the 4`h of July, and the Baseball Stadium shall be reserved for the City's 4 1 of July fireworks display. Ili. TERM 3.1 Term. The term of this Lease shall commence on January 1, 2008 (the "Effective Date"), and shall expire on December 31, 2017, unless extended pursuant to Section 3.2 below (the "Initial Term"). 3.2 Extension Option. Tenant shall have one (1) option to extend the Initial Tenn for five (5) years, subject to the terns provided herein (the "Extension Tenn"). The Extension Term together with the Initial Term are referred collectively as the "Term". -3- (a) If, at the time of exercise, Tenant has performed all Tenant's covenants and is not in default under any of the terms of the Lease beyond any applicable cure period, then Tenant, on giving written notice to City not earlier than twenty-four (24) months, and not later than eighteen (18) months prior to the last day of the Initial Term of the Lease, shall have the right to extend the Initial Term of the Lease for an additional term of five (5) years upon the same terms and conditions as contained in the Lease, except for the Rent. The Extension Term shall commence on the day immediately succeeding the last day of the Initial Term of the Lease and shall end at midnight on the day immediately preceding the fifth anniversary of the first day of the extended term unless sooner terminated in accordance with the provisions of the Lease. The Rent during the Extension Term shall be mutually agreed upon between City and Tenant no later than twelve (12) months prior to the last day of the Initial Term of the Lease. If City and Tenant have not mutually agreed on the Rent at least twelve (12) months prior to the last day of the Initial Term, then the exercise of the extension option shall be deemed to be ineffective and this Lease shall automatically terminate on the last day of the Initial Term. IV. RENT, ADDITIONAL PAYMENTS 4.1 Rent. Tenant agrees to pay annual rent in the following amounts ("Rent"): Period Annual Rent From the Effective Date to 12/31/08 $25,000 1/1/09 to 12/31/09 $26,000 1/1/10 to 12/31/10 $27,000 1/l/11 to 12/31/11 $28,000 1/1/12 to 12/31/12 $29,000 1/1/13 to 12/31/13 $30,000 1/1/14 to 12/31/14 $31,000 111115 to 12/31/15 $32,000 ]/1/16 to 12/31/16 $33,000 1/1/17 to 12/31/17 $34,000 Rent shall be paid to City at 525 North 3`d Avenue, Pasco, Washington 99301, Attention: City Treasurer ("City's Address"). Tenant shall pay Rent in a lump sum annually on June 15 of each calendar year during the Term. Tenant shall pay a late service charge on all past due rent at the rate of five percent (5%) per month, but in no event higher than the legal limit. The Rent specified in this Section 4.1 includes the leasehold excise tax which is payable in accordance with Chapter 82.29A RCW (the "Leasehold Tax"). Tenant shall pay the Rent to City, and City will forward to the State of Washington as required by law that portion of the Rent which is allocable to the Leasehold Tax. If City raises the admission tax on tickets to view events in the Baseball Stadium above two and one-half percent (2.5%), the Rent set forth above shall be reduced on a dollar for dollar basis for each year the dollar amount of admission taxes collected by Tenant for such year in excess of 2.5% of the price of each ticket sold. In the event Tenant has already paid Rent, City shall refund to Tenant a portion of the Rent overpaid as a result of the application of this provision. -4- 4.2 Additional Rent. a. Tenant shall pay City as additional rent ("Additional Rent") for each Lease Year (beginning with the Lease Year commencing January 1, 200$) Eve percent (5%) of all base ticket revenues associated with the use and operation of the Premises by Tenant, in excess of $400,000. "Base ticket revenues" shall mean the base ticket revenues for all paid tickets to attend and/or view events sponsored by Tenant. Base ticket revenues shall be the actual revenues generated by all ticket sales, exclusive of (i)revenues to pay admission taxes, (ii) trade and complementary tickets, and (iii) the MLB ticket tax as set forth in Schedule 2 attached hereto, not to exceed 7% for purposes of calculating base ticket revenues hereunder. If Tenant packages tickets with other goods and/or services (e.g., hot dogs, soft drinks, etc.), base ticket revenues shall be calculated only on that portion of revenues reasonably allocated to the tickets to view the event, which will in no case be less than fifty percent (50%) of the face value of the ticket. If Tenant sells tickets at a discount from their face value, base ticket revenues shall be calculated from the discounted price of such tickets. Ticket revenues based on season or advanced ticket sales shall be deemed "collected" by Tenant for purposes of determining Additional Rent on the respective dates that events covered by such tickets actually occur. No Additional Rent shall be payable for Community Events or "free" events if Tenant is merely reimbursed its reasonable costs to make the Premises available for such event. For purposes of calculating Additional Rent, a Lease Year shall be the 12-month period from January 1 to the next December 31. b. With respect to Other Events at the Premises sponsored by a third party, Tenant shall pay City as Additional Rent ten percent (10%) of the net sublease/license fees paid to Tenant by the third party to use the Baseball Stadium for such Other Event. Net sublease/license fees shall be the sublease/license fees paid to the Tenant with respect to such Other Event, less the reasonable and actual costs and expenses incurred by Tenant with respect to such Other Event. C. On or before October 1, of each year, Tenant shall remit to City a summary events reconciliation statement for the year to date, and including the entire baseball season. The reconciliation statement shall set forth ticket sales for all events sponsored by Tenant and net sublease/license fees paid to Tenant by third parties during such year to date. If as a result of such statement Additional Rent is due, such Additional Rent shall be paid simultaneously with the delivery of such statement. If Tenant or a third party sponsors Other Events in such year after the effective date of the reconciliation statement, then within ten (10) days after such Other Event, Tenant shall remit to City a reconciliation statement for such Other Event and pay any Additional Rent (if any) due as a result of such Other Event. d. Tenant shall maintain documentation and records verifying the ticket sales for each event held within the Baseball Stadium sponsored by Tenant and net sublease/license fees for each event held within the Baseball Stadium sponsored by a third party for a period of two (2) years after the date of such event. Upon written request by City, Tenant shall make such documentation reasonably available for an audit by City, or its duly authorized representatives, to verify the accuracy of the Additional Payments remitted by Tenant. -5- e. If the Additional Rent is included in contract rent for purposes of calculating the Leasehold Tax, City shall pay such Leasehold Tax, including all applicable penalties and interest thereon, from the Additional Rent remitted by Tenant and the Additional Rent shall be deemed to have been reduced by the amount of such Leasehold Tax. f. Tenant shall include in all written agreements with third parties that sponsor Other Events, the right of City to audit such third parties' records regarding payment of sublease/license fees. V. UTILITIES 5.1 Utilities a. Utility Charges. Tenant shall pay or cause to be paid when due, and shall indemnify, protect and hold harmless City and the Premises from all charges for public or private utility services to the Premises during the Term, including without limiting the generality of the foregoing, all charges for heat, light, electricity, potable water, gas, telephone service, garbage collection and sewer and drainage service. Notwithstanding the foregoing, the City shall provide un-metered well irrigation water to Tenant at no cost to Tenant. b. Interruptions of Utility Services. City shall not be liable to Tenant in damages or otherwise (1) if any utility shall become unavailable from any entity (including City) supplying or distributing such utility, or (ii) for any interruption in any utility service (including, without limitation, any heating, air-conditioning or sprinkler) caused by the making of any necessary repairs or improvements or by any cause, and the same shall not constitute a termination of this Lease or an eviction of Tenant. If any utility service, used at the Premises and for which City is responsible, shall be interrupted, City shall restore such utility service as soon as practical. VI. CONDITION OF PREMISES; IMPROVEMENTS 6.1 Current Condition. Tenant agrees to accept the Premises and Baseball Stadium in its current "as is, where is" condition. Tenant acknowledges the opportunity prior to its execution of this Lease to conduct a thorough inspection of the Premises. 6.2 Air Conditioning. The air conditioning, previously installed by Tenant in the "home team" clubhouse/locker room, is part of the Premises, and during the Term shall be maintained by Tenant at Tenant's cost. Upon expiration or earlier termination of this Lease, the air conditioning equipment shall become the property of City,without additional cost or expense to City. 6.3 Improvements. Tenant has requested City's permission to install certain fixtures on the Premises during the Lease Term. City consents to Tenant's request pursuant to the requirements and conditions contained in this Section 6.3. -6- a. City shall allow Tenant to install a modular office building on the Property containing approximately square feet (the "Improvements"). Tenant shall use good faith and diligent efforts to complete the construction of the Improvements and for the Improvements to be ready for occupancy no later than .rune 15, 2008. The Improvements shall be constructed and installed according to all governing laws and regulations, including but not limited to, the Americans with Disabilities Act. Prior to constructing or installing the Improvements, Tenant shall submit to City plans and specifications for the Improvements for City approval, such approval not to be unreasonably withheld. The location of the Improvements shall be subject to the prior approval of City. During the Term of the Lease, Tenant shall maintain ownership of the Improvements; however, at the expiration of the Term, City may (i) require Tenant to remove the Improvements or (ii) allow Tenant to abandon the Improvements, at which time, the Improvements shall become part of the Property and be owned by City. b. Following completion of the Improvements, Tenant shall provide City with an accounting of the actual third-party costs and expenses incurred by Tenant to install the Improvements, including paint, carpet/flooring and any built-in cabinets and counters, such costs not to include fees to Tenant or affiliates of Tenant, furniture or fixture costs, or other non-third party expenses. If requested by the City, the accounting shall be accompanied by receipts, contracts, or any other reasonable evidence of the costs incurred by Tenant for the Improvements. Upon City review and approval of such accounting, the costs incurred by Tenant to install the Improvements shall constitute the Approved Costs. C. City shall provide Tenant with an annual credit against the Rent in an amount equal to one-fifteenth (1/15`") of the Approved Costs, such credit not to exceed $11,666 annually or$175,000 in the aggregate(the"Rent Credit"). d. If City and Tenant mutually agree upon the Rent during the Extension Term and extend this Lease through the Extension Term, then Tenant shall be eligible for the Rent Credit through the Extension Term. If Tenant terminates this Lease after the expiration of the Initial Term without exercising its option to extend the Lease, then Tenant shall have forfeited any remaining Rent Credit. e. If Tenant exercises its option to extend this Lease but City and Tenant have not mutually agreed on the Rent for the Extension Term at least twelve (12) months prior to the last day of the Initial Tenn, then (i) upon expiration of this Lease following the end of the Initial Term and provided that Tenant has otherwise complied with the terms of this Lease, Tenant shall receive one-third (1/3) of the Rent Credit as a termination fee within sixty (60) days following the last day of the Initial Term; and (ii) this Lease shall terminate upon the expiration of the Initial Term. Notwithstanding the preceding sentence, if City proposes an amount for annual Rent for the Extension Term which does not exceed $34,000, and Tenant does not accept this proposal, then Tenant shall have forfeited any right to a termination fee upon the expiration of this Lease. VII. REPAIRS AND MAINTENANCE 7.1 City Obligation. City shall, at its own cost and expense, maintain and repair all structural portions of the Premises in a good and safe condition during the Term, reasonable wear and tear excepted, promptly after City is made aware of the need for such structural maintenance and/or repair. Structural portions of the Premises shall include, without limitation, all sidewalks -7- and the roof, structural walls, structural members (including structural elements of the light poles, scoreboard and outfield fence), floor slabs and foundation of the Baseball Stadium and plumbing and electrical repairs that require alteration of floor slabs, foundations, roof or exterior walls. If governmental laws, rules, regulation or ordinances ("Applicable Laws") change such that the Premises no longer complies with Applicable Laws and can no longer be used for its intended purposes without repair or improvements, the City shall have the first option to alter or repair the Premises to bring it into compliance with Applicable Laws. if City does not bring the Premises into compliance with Applicable Laws within a reasonable period of time, Tenant shall have the right, but not the obligation, to make the alterations or repairs necessary to bring the Premises into compliance with Applicable Laws. If neither City nor Tenant elect to bring the Premises into compliance with Applicable Laws, Tenant may terminate this Lease in its sole discretion. The foregoing shall only apply to changes required to be made to the Premises in order to comply with Applicable Laws so that the Premises can continue to be used for its intended purposes and does not apply under circumstances where the Premises becomes a nonconforming structure, but for which changes are not required for the continued use of the Premises. 7.2 Tenant Obligations._ a. Tenant shall be responsible, at its own cost and expense, for the routine maintenance and upkeep and routine nonstructural repairs of the Premises during the Term, including interior walls, ceilings, doors, windows, light fixtures, switches, wiring and plumbing not the responsibility of City under Section 7.1 above, and heating and air conditioning systems and equipment. Tenant shall also be responsible for the cost of cleaning the Premises and the cost of cleaning supplies and other routine supplies required to operate the Premises, all in accordance with customary standards for similar facilities and prudent maintenance practices. b. Notwithstanding the foregoing, City shall be responsible for all routine maintenance and repair of the Premises required by or arising from use of the Premises for Community Events. City shall fulfill its maintenance and repair obligations under this Section 7.2 immediately after use of the Premises for Community Events. C. Tenant shall also be responsible for garbage disposal and other cleaning of the Premises and Parking Areas (as defined below) following each game or Other Event sponsored by Tenant or a third parry, and for payment of all expenses of staff and services for each game or Other Event sponsored by Tenant or a third party, including without limitation parking attendants, security officers, ticket salespeople and attendants, ushers, and, if applicable, medical personnel and vehicles. Tenant shall also be responsible for maintaining the baseball team office and locker rooms while Tenant is entitled to the exclusive use thereof. Tenant will permit no waste, damage or injury to the Premises. At the expiration or sooner termination of this Lease, Tenant will quit and surrender the Premises in a neat and clean condition (reasonable wear and tear excepted), and will deliver up all keys belonging to the Premises to City, or City's agent. Should Tenant fail to tender possession of the Premises to City as provided herein, City shall have the right to perform the work necessary to put the Premises in a neat and clean condition (reasonable wear and tear excepted), at Tenant's expense, and Tenant agrees to reimburse City for the costs to do so. -8- d. Tenant shall not damage or deface the Premises, nor shall Tenant allow its guests and invitees to damage or deface the Premises. Tenant and Tenant's guests and invitees shall not do anything which may injure the buildings or other improvements or be a nuisance or menace. All deliveries of supplies and material to the Premises shall be made at such hours and in accordance with such rules as City may reasonably prescribe. Tenant will not permit an accumulation of boxes, waste, or other refuse matter. Trash and garbage shall be stored, until disposed, within areas designated by City for such purposes. e. In addition, Tenant agrees as follows: (i) Care of Plumbing Facilities. Plumbing facilities shall not be used for any other purpose than that for which they were constructed. (ii) Cleaning of Kitchens. Tenant shall have the Concessions ventilation equipment cleaned at least every six(6) months, and Tenant upon request shall provide City with evidence that the work has been done for the most recent period. (iii) Odors. Tenant shall not permit the emission of offensive odors from the Premises or allow permeation through interior or exterior walls. (iv) Tenant To Pgy For Violation. The expense of any breakage, stoppage or damage resulting from a violation of this Section 7.2 shall be borne by Tenant. (v) City May Demand Repairs. If City reasonably deems necessary any repairs required to be made by Tenant, it may demand that Tenant make the same forthwith, and if Tenant refuses or neglects to commence such repairs and complete the same with reasonable dispatch, City may make or cause such repairs to be made and Tenant agrees, forthwith, on demand, to pay to City the cost thereof with interest at the maximum rate permitted by law at the time City incurs said cost of repairs. 7.3 Plumbing System Winterization. Notwithstanding the other provisions of this Lease, the City shall be responsible for the work associated with draining and winterizing the plumbing system of the Premises each year(either using a third party plumber or using City staff based upon protocols established by plumbing professionals). 7.4 Baseball Field/Grass Maintenance. a. Tenant shall be responsible at its sole cost and expense for the year-round maintenance, upkeep, repair and care of the baseball field and the other grass areas of the Baseball Stadium, including the preparation and maintenance of the playing field before, during and after each game or Other Event sponsored by Tenant. Such upkeep and maintenance shall include fertilizing, mowing, aeration, irrigation and all other matters associated with the maintenance of the playing field and other grass areas. All such upkeep and maintenance shall be in accordance with the standards and specifications attached hereto as Exhibit E, or otherwise directed by City. Tenant shall also be responsible at its sole cost and expense for all fertilizer and other supplies required for the upkeep and maintenance of the playing field and other grass areas of the Baseball Stadium. -9- b. If Tenant fails to maintain the playing field and the other grass areas of the Baseball Stadium as herein required, City shall have the right to do so, at Tenant's expense, and Tenant agrees to reimburse City for the costs to do so. C. Tenant shall also have the exclusive right to use a portion of the maintenance facility just beyond the left field outfield fence of the Baseball Stadium for the storage of maintenance equipment and other uses associated with the maintenance of the baseball field and other grass areas of the Baseball Stadium. VIII. CONCESSIONS 8.1 Concessions. Except as otherwise set forth herein, Tenant shall have the exclusive right, during baseball games and Other Events held in the Baseball Stadium, subject to the provisions set forth below, to sell Concessions in the Premises and in the Parking Areas (as defined below) and to retain all revenues therefrom. Such right may be exercised by Tenant directly or through a sublicensee. a. Concession Equipment. Tenant shall supply at its own expense and in its sole discretion all equipment, fixtures and supplies, and all staff and other persons required or necessary to provide Concessions to patrons of the Premises. b. Tenant to Use Adequate Electrical Equipment. If Tenant supplies any concessions electrical equipment that overloads the electrical lines in the Premises, Tenant shall at its own expense (but only with the prior consent of City) make whatever changes are necessary to meet the electrical requirements consistent with the.requirements of the insurance underwriters and governmental authorities having jurisdiction. C. Liquor License. City shall not object to or interfere with the efforts of Tenant or its sublicensee to secure a permit to sell alcoholic beverages as one of the Concessions sold inside the Baseball Stadium. 8.2 Concession Services. Tenant or its sublicensee shall operate and supply Concessions and concession services during baseball games and Other Events sponsored by Tenant or third parties on such terms and conditions as Tenant deems appropriate. Tenant shall also provide concession services for Other Events not sponsored by Tenant (including Community Events) at levels and with staffing as reasonably necessary to provide appropriate concession service given the nature of the event and the expected attendance. If Concessions are not provided by Tenant at appropriate levels for Community Events or Other Events not sponsored by Tenant, then City may permit another entity to sell Concessions from portable concession stands brought into the Premises for such purposes. IX. PARKING 9.1 Generally. Adjacent to the Premises is an area for vehicle parking containing approximately 1000 parking spaces and depicted on the map attached hereto as Exhibit F (the "Parking Area") City hereby grants Tenant a non-exclusive license to use the Parking Area on the terms set forth below. -10- a. Throughout the Term of this Lease, (i)Tenant shall have the exclusive right to control, use and operate the Parking Area for baseball games and Other Events sponsored by Tenant or third parties at the Premises and (ii) City shall have the exclusive right to control, use and operate the Parking Area for Community Events and for soccer tournaments played at the adjacent playfields. Tenant shall be entitled to retain all parking.revenue generated during periods when Tenant controls and operates the Parking Area, and City shall be entitled to retain all parking revenues generated during periods when City controls and operates the Parking Area. Tenant shall provide parking attendants to operate the Parking Area for baseball games and Other Events sponsored by Tenant and City shall provide parking attendants to operate the Parking Area for Community Events and for events at the adjacent playfields. Tenant shall be responsible at its sole cost to clean the Parking Area after baseball games and Other Events sponsored by Tenant. City shall be responsible, at its sole cost, to clean the Parking Area after Community Events and soccer tournament held at the adjacent playfields. b. If an evening Minor League Baseball game is scheduled on the same date as a soccer tournament: (i) Tenant and City shall work together to accommodate each others' needs for use of the Parking Area, including an agreement on when control of the Parking Area will change from City to Tenant; and (ii) Tenant shall honor the parking privileges of soccer tournament spectators that have paid City to use the Parking Area. During such times, Tenant and City shall cooperate in good faith to manage the Parking Area so that Tenant receives all parking revenue associated with the baseball game and City receives all parking revenues associated with the soccer tournament being conducted at the adjacent playfields, and with Tenant providing the parking attendants to operate the Parking Area immediately prior to and during title baseball game. X. ESTOPPEL Within fifteen (15) days of presentation, Tenant shall execute, acknowledge, and deliver to City, at no expense to City, any estoppel certificate requested by City, certifying in writing, if such shall be true, that Tenant shall be in occupancy, that this Lease is in full force and effect, specifying the dates to which the rent and other charges shall have been paid, and stating that there have been no defaults by City and such other representations as may be requested by a lender, mortgagee or beneficiary. XI. TENANT ALTERATIONS Except as provided above in Section 6.3, Tenant shall not make any material alterations, additions, or improvements in the Premises (including any alterations that affect structural portions of the Premises, or any electrical, plumbing or similar system) without first obtaining City's written consent(which may be withheld in its reasonable discretion). All such alterations, additions and improvements shall be at the cost and expense of Tenant, and shall become the property of City and shall remain in and be surrendered with the Premises as a part hereof at the termination of this Lease, without disturbance, molestation, or injury except for any improvements that City may elect to require Tenant to remove. Notwithstanding the foregoing, Tenant may remove concessions equipment and similar fixtures from the Premises if Tenant originally paid the cost to acquire and install such equipment and/or fixtures and if Tenant fully repairs all damage caused by the removal of such equipment and/or fixtures. If Tenant shall perform work with the consent of City, as aforesaid, Tenant agrees to comply with all laws, -11- ordinances, rules and regulations of the appropriate city or county, and any other authorized public authority. Tenant further agrees to hold City harmless from damage, loss or cost arising out of the said work. XII. INSURANCE 12.1 Tenant Insurance. a. Tenant, at its sole expense, shall place and maintain in effect throughout the term of this Lease the following insurance (collectively, the "insurance"): (i) Commercial general liability insurance with limits of not less than $2,000,000 each occurrence and $5,000,000 in the aggregate, written on Insurance Services Office (ISO) occurrence form CG 00 O1, insuring against all liability arising out of and in connection with Tenant's use and occupancy of the Premises and with Tenant's exercise of its rights granted under this Lease, including premises and contractual liability and naming City and its employees, officers and agents as additional insureds using ISO Additional Insured-Managers or Lessors of Premises Form CG 20 11 or a substitute endorsement providing equivalent coverage, and (ii) in the event Tenant or its sublicensee offers alcoholic beverages in or around the Premises, "Dram Shop" and/or "Innkeeper's Liability" insurance against claims or liabilities arising directly or indirectly to persons or property on account of the sale or dispensing of beer, wine or other alcoholic beverages, with a combined single limit coverage of $2,000,000 bodily injury and property damage liability, or in greater amounts if required by law, in form and substance reasonably acceptable to City, and naming City and its employees, officers and agents as additional insureds, and (iii)worker's compensation and employer's liability insurance covering employees at the Premises employed by Tenant (to the extent required, and in the amounts required by applicable laws). b. Certificates of such coverage and endorsements, in form satisfactory to City, shall be furnished to City and each shall provide that said coverage will not be changed or cancelled without forty-five (45) days written notice to City. The limits of coverage described above shall be increased from time to time as reasonably requested by City and to the extent consistent with prudent risk management practices and insurance standards for similar facilities. Tenant's insurance coverage shall be primary as respects City. Any insurance, self-insurance or insurance pool coverage maintained by City shall be excess of Tenant's insurance and shall not contribute with it. All insurance shall be placed with insurers with a current A. M. Best rating of not less than A:VII. C. In the event the Insurance required under this section is not maintained, or if an Event of Default occurs, City shall have the right (but not the obligation) to place and maintain the Insurance required to be placed and maintained by Tenant hereunder. Tenant agrees, on demand, to pay to City the amounts expended therefor with interest at the maximum rate permitted by law from the tune City incurs said costs of Insurance. d. In the event Tenant fails to place and maintain the Insurance required hereunder, City shall have the right (but not the obligation) to require the immediate cessation of the sale of alcoholic beverages at the Premises. -12- 12.2 City Insurance. City shall purchase and maintain during the term of this Lease all-risk property insurance covering the Premises and the Baseball Stadium, for their full replacement cost without coinsurance provisions. 12.3 Waiver of Subrogation. Tenant and City hereby release and discharge each other from all claims, losses and liabilities arising from or caused by any hazard covered by property insurance on or in connection with the Premises and Baseball Stadium. This release shall apply only to the extent that such claim, loss or liability is covered by insurance. XIII. DAMAGE OR DESTRUCTION If the Premises or Baseball Stadium are damaged by fire or other casualty under circumstances where the cost to repair does not exceed $500,000 and the loss is covered by insurance maintained by City, the damage shall be repaired by City, and until such repairs are completed, rent shall be abated in proportion to the portion of the Premises which is unusable by Tenant in the conduct of its business (but there shall be no abatement of rent by reason of any portion of the Premises being unusable for a period equal to three(3) days or less). If the costs to repair such damage exceeds $500,000, or the loss is not covered by insurance maintained by City, City at its option may elect to repair the Premises, in which event rent shall be abated as provided above. City shall make such election whether or not to rebuild within thirty (30) days of such damage. If City does not elect to make such repairs, or if it reasonably appears that such repairs cannot be made within one hundred eighty (180) days of the date of such damage, then either party may, by written notice to the other within forty-five (45) days of the date of damage, terminate this Lease. XIV. NAMING RIGHTS During the Term of this Lease, Tenant shall have the right to offer to sell and to sell the right to name the Baseball Stadium to third parties and to retain all revenues therefrom, subject to the provisions below. City shall have the right to approve the name and the form of any naming rights agreement, which approval shall not be unreasonably withheld or delayed. In the absence of a naming rights agreement, the Baseball Stadium shall continue to be named "Pasco Stadium." Tenant may not name the Baseball Stadium after Tenant. The name of the Baseball Stadium may not connote or be affiliated with adult content, firearms or tobacco. Upon expiration of or earlier termination of this Lease, any naming rights agreement shall also terminate and no longer be in force or effect. For every professional baseball season (June through August or part thereof) (the "Season") that a naming rights agreement exists, Tenant shall spend a minimum average of $5,000 on capital improvements to the Baseball Stadium. Tenant may spend such sums on capital improvements at one time and from time to time while a naming rights agreement exists, provided that Tenant spends at least $25,000 on capital improvements during the first five years of any naming rights agreement. By way of example, Tenant may spend $5,000 each Season, may spend $10,000 every two Seasons, may spend -13- $4,000 the first Season, nothing the second Season and $11,000 the third Season, or may spend $25,000 in a single year(and applied over a five Season period), provided that Tenant spends an average of$5,000 for each Season and at least $25,000 during the first five Season period. If at the end of the term of a naming rights agreement, Tenant has not spent the required amounts on capital improvements, Tenant shall pay to City a naming rights termination fee equal to 150% of such shortfall. On or before February 1 of each year, Tenant shall provide City with an accounting of the costs expended in the prior calendar year by Tenant on capital improvements to the Baseball Stadium. At the request of City, Tenant shall provide to City with copies of invoices and other information to substantiate the amounts so spent. Tenant must obtain prior City approval to any capital improvements undertaken by Tenant under this Section XIV, such approval not to be unreasonably withheld. Capital improvements funded by Tenant under this Section XIV shall not include any capital improvements installed by Tenant under any other provision of this Lease. XV. DEFAULTS; REMEDIES 15.1 Defaults: Remedies. a. Events of Default. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Tenant (an "Event of Default"): (i) The failure by Tenant to make any payment of Rent by the tenth (10`h) day after such amount is due; (ii) The failure by Tenant to make any other payment required to be made by Tenant hereunder (other than a payment specified in subsection (i) above), including, without limitation, Additional Rent, utility payments, insurance premiums or other charges, within five (5) days after receiving written notice from City of such failure to pay; (iii) The failure by Tenant to observe or perform or the violation of any of the other covenants, conditions or provisions of this Lease to be observed or performed by Tenant, where such failure shall continue for a period of twenty (20) days after Tenant's receipt of written notice of default or violation from City; provided, however, that if the nature of Tenant's obligation is such that more than twenty (20) days are required for performance, then Tenant shall not be in default if Tenant commences performance within such 20-day period and thereafter diligently prosecutes the same to completion and in any event completes such performance within ninety (90) days of Tenant's receipt of such written notice; or (iv) The failure by Tenant to use the Premises for professional baseball purposes as a franchisee of the Northwest League. b. Upon an Event of Default, then, without prejudice to any other remedies which City might have, City may, at its election, declare this Lease forfeited and the Lease term ended, and re-enter the Premises, with or without process of law, and remove all persons or chattels therefrom. -14- 15.2 Removal of Property. a. In the event of any re-entry or taking possession of the Premises for default, City shall have the right, but not the obligation, to remove from the Premises all personal property of Tenant located therein, and may store the same in any place selected by City, including but not limited to a public warehouse, at the expense and risk of the owners thereof, with the right to sell such stored property, without notice to Tenant, after it has been stored for a period of thirty (30) days or more. The proceeds of such sale to be applied first to the cost of such sale, second to the payment of the charges for the storage, if any, and third to the payment of any other sums of money which may then be due from Tenant to City under any of the terms hereof, the balance if any without interest to be paid to Tenant. b. Tenant hereby waives all claims for damages that may be caused by City's re-entering and taking possession of the Premises or removing and storing the property of Tenant as provided in this Lease, and will hold City harmless from loss, costs or damages occasioned City thereby. No such reentry shall be considered or construed to be a forcible entry. 15.3 City May ReLet. In such case of re-entry, City may relet the Premises upon such terms as it sees fit, for a term which may expire either before or after the expiration date of this Lease, and to such persons or entities as it desires, including without limitation another professional baseball league. 15.4 Tenant Still Liable for Rent. City shall not be liable for damages by reason of such re-entry. Notwithstanding any such re-entry by City, the liability of Tenant for the Rent provided for herein shall not be extinguished for the balance of the Lease Term. Tenant agrees to pay to City any deficiency arising from a re-entry and re-letting of the Premises at a lesser rent, and Tenant shall pay such deficiencies each month as the amount thereof is ascertained by City. 15.5 Tenant to Pay Cost of ReLetting. Upon reletting Tenant shall be immediately liable to pay to City the cost and expense of reletting and of such repairs as may be incurred by City in readying the Premises for reletting. 15.6 Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive, but shall, where ever possible, be cumulative with all other remedies at law or in equity. 15.7 Default by City. City shall not be in default unless City fails to perform obligations required of City within twenty (20) days after written notice by Tenant to City, provided, however, that if the nature of City's obligation is such that more than twenty (20) days are required for performance then City shall not be in default if City commences performance within such 20-day period and thereafter diligently prosecutes the same to completion. If City fails to cure any such default within the allotted time, Tenant may cure such default itself and offset the cost thereof against Rent payable hereunder. -15- XVX. HAZARDOUS SUBSTANCES 16.1 Hazardous Substances. a. Tenant shall not dispose of or otherwise allow the release of any hazardous waste or materials in, on or under the Premises, or any adjacent property, or in any improvements placed on the Premises, in violation of applicable law. Tenant represents and warrants to City that Tenant's intended use of the Premises does not involve the use, production, disposal or bringing on to the Premises of any hazardous waste or materials in violation of applicable law. As used herein, the term "hazardous waste or materials" includes any substance, waste or material defined or designated as hazardous, toxic or dangerous (or any similar term) by any federal, state or local statute, regulation, rule or ordinance now or hereafter in effect. Tenant shall promptly comply with all statutes, regulations and ordinances, and with all orders, decrees or judgments of governmental authorities or courts having jurisdiction, relating to the use, collection, treatment, disposal, storage, control, removal or cleanup of hazardous waste or materials, in, on or under the Premises or any adjacent property, or incorporated in any improvements, at Tenant's expense. b. After notice to Tenant and a reasonable opportunity for Tenant to effect such compliance, City may, but is not obligated to, enter upon the Premises and take such actions and incur such costs and expenses to effect such compliance as it deems advisable to protect its interest in the Premises; provided, however that City shall not be obligated to give Tenant notice and the opportunity to effect such compliance if(i) such delay might result in material adverse harm to City or the Premises, (ii) Tenant has already had actual knowledge of the situation and a reasonable opportunity to effect such compliance, or (iii) an emergency exists. Whether or not Tenant has actual knowledge of the release of hazardous waste or materials on the Premises or any adjacent property as the result of Tenant's use of the Premises, Tenant shall reimburse City for the frill amount of all costs and expenses incurred by City in connection with such compliance activities, and such obligation shall continue even after the termination of this Lease. Tenant shall notify City immediately of any release of any hazardous waste or materials on the Premises. C. Notwithstanding the foregoing, Tenant shall not be responsible for any cleanup, liabilities, claims, damages, costs and expenses of any kind or nature that arise or result from any contamination of the Premises or surrounding property by hazardous waste or materials, except for such contamination that is caused by Tenant or its employees or agents. If Tenant cannot operate the Baseball Stadium because of contamination of the Premises or surrounding property by hazardous waste or materials not caused by Tenant or its employees or agents, Tenant shall have the right to terminate this Lease without further liability hereunder. XVII. OTHER PROVISIONS 17.1 Surrender of Premises. At the expiration of the term of this Lease, or at the earlier termination of this lease, Tenant shall surrender the Premises in good condition, reasonable wear and tear excepted. 17.2 Intentionally Deleted. -16- 17.3 Liens and Solvency. Tenant shall keep the Premises free from any liens arising out of any work performed, materials furnished or obligations incurred by Tenant and hold City harmless therefrom including all costs and attorney's fees. In the event Tenant becomes insolvent, voluntarily or involuntarily bankrupt, or if a receiver, assignee or other liquidating officer is appointed for the business of Tenant, then City may cancel this Lease at City's option and Tenant shall nevertheless be liable for any further losses or damages sustained by City so caused by Tenant. 17.4 Assignment. Tenant shall have the right to assign this Lease or let or sublet the whole or part of the Premises with the written consent of City, which consent may not be unreasonably withheld. Notwithstanding the foregoing, City shall consent to any assignment or sublease of this Lease by Tenant: (a) to any entity controlled by Tenant that owns the Team; and (b) to any purchaser of the Team that (i)has been approved by the National Association of Professional Baseball, (ii) holds a franchise to operate such team by the Northwest League, and (iii)has retained a management team with prior experience managing a professional sports team to operate such team. Any purported assignment or sublet shall be of no effect if not consented to by City. Any assignment or sublet of this Lease shall not extinguish or diminish the liability of Tenant hereunder. 17.5 Non-Waiver. The failure of either party to insist upon strict performance of any of the covenants and agreements of this Lease, or to exercise any option herein conferred in any one or more instances, shall not be construed to be a waiver or relinquishment of any such, or any other covenants or agreements, but the same shall be and remain in full force and effect. 17.6 Costs and Attorney's Fees. All costs and expenses, including attorneys' fees at trial and on appeal in a reasonable amount, incurred by City or by Tenant in enforcing the obligations of Tenant or City under this Lease, shall be paid by the defaulting party to the prevailing party upon demand. The venue of any legal action brought under the terms of this Lease shall be in the county in which the Premises are situated. 17.7 Transfer by City. If City shall assign its interest under this Lease or transfer its interest in the Premises, such transferee shall be required to assume all obligations of City under this Lease, City shall be relieved of any obligation accruing hereunder after such assignment or transfer, and such transferee shall thereafter be deemed to be City hereunder. 17.8 Heirs and Successor. Subject to the provisions hereof pertaining to assignment and subletting, the covenants and agreements of this Lease shall be binding upon the heirs, legal representatives, successors and assigns of any or all of the parties hereto. 17.9 Holdover. If Tenant shall, with the written consent of City, holdover after the expiration of this [.,ease, such tenancy shall be on a month-to-month tenancy, which tenancy may be terminated by either party upon twenty (20) days notice to the other party. During such tenancy Tenant agrees to pay to City the same rental as provided herein, unless a different rent is agreed upon, and to be bound by all of the applicable terms and conditions of this Lease. 17.10 Mutual Release and Waiver. To the extent a loss is covered by insurance in force, City and Tenant hereby mutually release each other from liability and waive all right of recovery against each other for any loss from perils insured against under their respective fire or other insurance policies, including any causes of loss forms attached thereto; provided, that this -17- agreement shall be inapplicable if it would have the effect of invalidating any insurance coverage of City or Tenant 17.11 Notices. All notices under this Lease shall be in writing and shall be deemed to have been duly given if personally delivered, sent by confirmed facsimile, overnight courier services or registered or certified mail, postage prepaid, and shall be deemed given upon delivery if personally delivered, upon the earlier of actual receipt or one day after it is sent, if sent by overnight courier or confirmed facsimile, or three days after it is sent by registered or certified mail. All notices or other communications shall be made as follows: If to City: City of Pasco 525 North P Avenue Pasco, Washington 99301 Attention: City Manager Facsimile No.: (509) 545-3403 If to Tenant: Northwest Baseball Ventures I, LLC 6200 Burden Blvd. Pasco, WA 99301 Attention: President Facsimile No.: (509) 547-9570 17.12 Compliance with Laws. All operations or activities upon, or any use or occupancy of the Baseball Stadium and Premises, or any portion thereof, by Tenant or any person claiming through Tenant shall be in all material respects in compliance with all state, federal and local laws, ordinances, rules, regulations, permits, standards, and requirements. 17.13 Indemnification. a. Tenant agrees to and shall indemnify, defend and hold City, City's successors and assigns, and the, officers, employees, agents and contractors of City, harmless from and against any and all claims (including without limitation third parry claims for death, personal injury or real or personal property damage), actions, administrative proceedings (including both formal and informal proceedings), judgments, damages, punitive damages, penalties, fines, costs,.liabilities (including sums paid in settlements of claims), interest or losses, including reasonable attorneys' and paralegals' fees and expenses (including any such fees and expenses incurred in enforcing this Agreement or collecting any sums due hereunder), consultant fees, and expert fees, together with all other costs and expenses of any kind or nature that arise directly or indirectly from or in connection with (i) Tenant's use, occupation and/or control of the Premises during events other than Community Events, and including without limitation any injury or claim of injury to person or property, of any nature and howsoever caused, (ii) from any breach of the terms of this Lease, or (iii)any violation of any governmental or insurance requirements by Tenant, its sublessees, assignees, invitees, agents, employees, contractors, or licensees, provided that such indemnity shall not extend to matters that may arise out of the gross negligence or willful acts of City or City's agents, employees or contractors. b. City agrees to and shall indemnify, defend and hold Tenant, Tenant's successors and assigns, and the directors, officers, shareholders, employees, agents and -18- contractors of Tenant, harmless from and against any and all claims (including without limitation third party claims for death, personal injury or real or personal property damage), actions, administrative proceedings (including both formal and informal proceedings), judgments, damages, punitive damages, penalties, fines, costs, liabilities (including sums paid in settlements of claims), interest or losses, including reasonable attorneys' and paralegals' fees and expenses (including any such fees and expenses incurred in enforcing this Agreement or collecting any sums due hereunder), consultant fees, and expert fees, together with all other costs and expenses of any kind or nature that arise directly or indirectly from or in connection with (i) City's use, occupation and/or control of the Premises during a Community Event, and including without limitation any injury or claim of injury to person or property, of any nature and howsoever caused, (ii) from any breach of the terms of this Lease, or (iii) any acts arising from the gross negligence or willful misconduct of City, provided that such indemnity shall not extend to matters that may arise out of the gross negligence or willful acts of Tenant or Tenant's agents, employees or contractors. 17.14 Time is of the Essence of this Lease. Time is of the essence in the performance of all obligations of Tenant and City under this Lease. 17.15 City Approvals. City shall, from time to time, designate one or more people who are authorized on behalf of City to give consents or approvals required of City hereunder. Such designation shall remain effective until such time as City notifies Tenant in writing of a new designee or designees. At the outset, City's designee shall be Gary Crutchfield, City Manager. 17.16 Force Majeure. Notwithstanding anything in this Lease to the contrary, each party's obligations to perform under this Lease shall be excused to the extent that such performance is prevented, delayed or rendered impracticable by events beyond that party's reasonable control, provided such party shall have exercised all reasonable efforts to avoid such events. Such events shall include, without limitation, inclement weather, acts of God, strikes, civil commotion, riot, war and any other cause whether similar or dissimilar to those enumerated that is reasonably beyond the control of the party obligated to perform. Force Majeure shall not include financial inability to perform (regardless of the cause) and shall not apply to defaults arising out of the loss by Tenant of its franchise to operate a professional baseball team with the Northwest League. 17.17 Counterparts, This Lease may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Lease or any counterpart may be executed and delivered by facsimile transmission with an executed hard copy to follow. -19- IN WITNESS WHEREOF, City and Tenant have executed this Lease the day and year first above written. CITY OF PASCO By: Its: NORTHWEST BASEBALL VENTURES I LLC,a Washington limited liability company By: Its: EXHIBITS AND SCHEDULE: Exhibit A — Legal Description of Property Exhibit B — List of Included Equipment Exhibit C — Concourse Exterior Wall Advertising Area Exhibit D — Intentionally Blank Exhibit E — Field Maintenance Standards (two pages) Exhibit F — Parking Area Schedule 1 — 2008 Soccer Tournament Dates Schedule 2 — MLB Tax -20- STATE OF WASHINGTON ss. COUNTY OF FRANKLIN I certify that I know or have satisfactory evidence that is the person who appeared before me, and said person acknowledged that said person signed this instrument, on oath stated that said person was authorized to execute the instrument and acknowledged it as the of City of Pasco, a municipal corporation, to be the free and voluntary act of such City for the uses and purposes mentioned in the instrument. Dated this day of , 2008. (Signature of Notary) (Legibly Pont or Stamp Name of Notary) Notary public in and for the State of Washington, residing at My appointment expires -21- STATE OF WASHINGTON ss. COUNTY OF FRANKLIN I certify that I know or have satisfactory evidence that is the person who appeared before me, and said person acknowledged that said person signed this instrument, on oath stated that said person was authorized to execute the instrument and acknowledged it as the of Northwest Baseball Ventures I LLC, a Washington limited liability company to be its free and voluntary act for the uses and purposes mentioned in the instrument. Dated this day of 12009. (Signature of Notary) (Legibly Print or Stamp Name of Notary) Notary public in and for the State of Washington, residing at My appointment expires -22- Exhibit A Legal Description Pasco Baseball Stadium (without Parking Lot) The South 700 feet of the North 1850 feet of the West 550 feet of the East 1043± feet of the northwest corner of Section 15, Township 9 North, Range 29 East W.M. Franklin County, Washington. EXHIBIT A Exhibit B Baseball Equipment Batting Cage: Full cover batting cage with minimum dimensions of 18' wide, 14' deep and 9' high. It is recommended that the cage be portable and made of aluminum frame to provide maximum maintainability. Field Screens: Pitching Screen: 7' high x 8' wide with 4' x 4' notch in upper corner. Double Play Screen: 7' high x 14' wide with hinged wings. First Base Screen: 7' high x 8' wide. Shag Protector Screen: 7' high x 8' wide. EXHIBIT B Exhibit C Concourse 1 Y Area West Side East Side EXHIBIT C . _ ��.� �. �I 1 T�.r� t r 7•Y�I— I ';{ � if' j���w�'•+pl .+ilt?a�.rvl...►6we."!,a^ K'.r�!.,:�.rk_ N°i.+yi�..s.,•�r.r r�yrA.adH�`y�,y .rA:w,Y...1�,, ,�� '..Z Iry•'1�� wt� ')'�1•,Y �r tom—.vr�'�N r`i'i... t� A•.v. Exhibit D Intentionally Blank EXHIBIT D Exhibit E Tri-Cities Baseball Stadium Maintenance Standards PROGRAM FREQUENCY DETAIL Fertilizing April—October Application of complete NPK fertilizer with trace minerals at 7 lbs. per 1,000 sq. ft. monthly in April, June, July and August. Equivalent to ESN 18-3-15. In October equivalent to 20-5-15 at 7 lbs. per 1,000 sq. ft. Apply quick release fertilizer at rate of 7 lbs. per 1,000 sq. ft. in front of pitchers mound or any other worn areas. Aeification May—October Monthly in May, June, July and October. Flag all irrigation heads prior to aerification. Do not aerify clay areas. Mowing March — October March—April mow at 2" height. Two weeks prior to team practice mow at 1- 1/2" and maintain until October. Mow playing field minimum of every other day and all other areas twice per week. Edging May— September Edge all base paths and infield perimeter twice per month. Irrigation March—October Irrigate as needed but no less than 4 times per week for 1 hr. Immediately repair system as needed. Chemical March—November Identify turf problems and correct Applications immediately. Apply fungicide 15`week of November. Apply penetrating agent or other chemicals as needed. EXHIBITS Game Day May— September l. Drag and water infield as needed. Field Preparation 2. Wash loose dirt back into grass at dirt infield grass transition areas. 3. Cover area in front of pitchers mound during practice and pre game warm UP. 4. Drag and clean all red rock warning track areas. 5. Line infield as per baseball standards. 6. Paint outfield out-of-play lines weekly or as needed. Miscellaneous Year Round 1. Apply a minimum of 2 tons soil conditioner to the top 1" of all infield clay areas. 2. Repair safety net and wall pads as needed. 3. Overseed all areas at the rate of 25 lbs. per acre. Seed mixture to be approved by City based on turf analysis. 4. Spray fence lines with herbicide twice a year or as needed. EXHIBIT E Exhibit F Parking Area fi�dlT ONLY • PARKING LOT t T OMt.Y XHI IT F SCHEDULEI 2008 SOCCER TOURNAMENT DATES SCHEDULEI SCHEDULE2 MLB TAX SCHEDULE • 2008: 6% 2009: 6% - 2010: 6.5% - 2011-2014: 7% SCHEDULE2