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HomeMy WebLinkAboutAD06-314 - Original - Thunderbirds Hockey Enterprises - Arena Design and Development - 10/20/2006 Y ARENA DESIGN AND DEVELOPMENT AGREEMENT KENT EVENT CENTER This Agreement ("Agreement") is made this ab day of October, 2006 by and between the City of Kent ("City") and Thunderbird Hockey Enterprises, LLC ("Team") (together "Parties") for the design and development of the proposed Kent Event Center ("Arena") in Kent, Washington The City and the Team are each referred to below as a "Party," and are collectively referred to as the"Parties " RECITALS: A. The City is the owner of real property in Kent, Washington, which the City seeks to develop for use as a multipurpose civic events center featuring, among other activities, professional hockey. B. The Team is the owner of the Western Hockey League team, the Seattle Thunderbirds, and seeks to assist in the development of a new first-class arena to serve as the Team's headquarters and which will host all home games of the Thunderbirds. C. The City and the Team desire to work together to design and develop the Arena on the City's property, thereby creating a new events facility that will accommodate the business and civic activities of the Parties. The Arena shall be a multi-purpose event center that will seat approximately 6,500 persons for Hockey Games. The Team will be a primary tenant of the Arena. The Arena shall be capable of hosting both sporting and non-sporting events, including ice shows, concerts, and community and business events. The Arena will also include an approximately 10,000 sq. ft conference center component. The Arena shall be located in downtown Kent. D. The Parties have previously entered into a Letter of Commitment dated April 2006. It is the Parties' intention to replace and supersede that Letter of Commitment with this Agreement. The Parties also intend, concurrent with the development of a design for the Arena, to negotiate a licensing agreement for the use of the Arena by the Team. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Arena Desinn and Development Cooperation. The parties recognize and acknowledge that a constructive relationship between the City and the Team is critical to the development and operation of a successful public events facility. While it is contemplated that the City will be providing most of the funding for construction of the Arena, the City will work closely with the Team and ensure the Team's involvement in all key elements of the Arena's development. The City, in particular, recognizes that the parties' mutual success is key to project success and, to that end, will use its best efforts to cooperatively construct a contractual relationship designed to achieve the Team's success. - 1 - 50737715 2 Subject to the provisions of this Agreement, the Parties agree to cooperate in the design, development, and construction of the Arena, and shall conceive and construct the Arena to meet the respective needs of the Parties, mcludmg the Western Hockey League Arena Facility Standards The parties anticipate financing the costs of design and construction of the Arena through the City's issuance of bonds The City currently intends to have construction of the Arena carried out through a general contractor/construction manager ('*GC/CM") method pursuant to Chapter 39.10 RCW. The intent of the City and the Team is that the design and construction process shall be a cooperative, mutual endeavor in which the City and the Team work together constructively in all major phases of development of the Arena. The Team will be the principal licensee and user of the Arena and, as such, the City recognizes that the Team has a substantial and continuing interest in the design, development, construction and financing of the Arena. Accordingly, as described more specifically below, the City will use all reasonable efforts to involve the Team in all significant aspects of design and construction of the Arena, including but not limited to, attendance and participation at the Team's discretion at hearings and meetings regarding the Arena development (other than internal City meetings), including meetings with the City's architect or architects (collectively, the "Architect"), the City's project manager, the Arena operator, concessionaire, and the GC/CM It is the Parties' intent to negotiate and enter into a license agreement through which the sharing of revenue generated by the Arena will be allocated. The revenue sharing arrangement will be consistent in nature and calculation with similar relationships then existing in the relevant professional sports/entertainment market. Also as described more specifically below, the Team shall have the right to specific prior review of and comment on the acceptability of. the program requirements, design, selection of the GC/CM, and project construction budget. The City will fully and fairly review and make every good faith effort to address satisfactorily the Team's concerns prior to making a final decision in any such matters, so long as such input is timely received. In addition, as specifically provided herein, the City will seek the Team's concurrence with the selection of the Arena design and major change orders The City agrees to defer to the Team regarding specific Western Hockey League requirements concerning ice rink or other particular design conditions directly affecting the play of hockey in the Arena The selection of the Arena's operator and concessionaire, and any future selection of a subsequent Arena operator and concessionaire, shall be accomplished through a cooperative process between the parties. A request for proposal shall be issued to potential operators and concessionaires, and both Parties will evaluate the responses received. The City and Team shall work collaboratively to narrow the pool of proposals to a maximum of three finalists, with both the City and the Team each retaining the right to prevent a particular proposal from being included as a finalist. From the final proposals, the City shall, after consultation with the Team, make the decision as to the selected proposal The work to be performed pursuant to this Agreement involves the following phases, described in detail hereafter: Program Development, Scheduling, Budget, Architect Selection, -2 - 50737715 2 Schematic Design, Selection of GC/CM, Design Completion, Project Cost Calculation, Construction, and Project Completion. II. Pro-aram Development. The City acknowledges the Team's interest in having the Arena open by the commencement of the Western Hockey League season in 2008 Accordingly, the Parties agree that they will exercise their best efforts to achieve completion sufficient for move-in and play on or about October 1, 2008. Both Parties recognize, however, that notwithstanding their best efforts, the City's ability to develop, secure financing for, and construct a fully operational Arena by that date depends upon actions of the Team, the County, the City and other governmental and nongovernmental entities that are beyond control of the City. The City shall not be liable to the Team for failure to open the Arena by the dates proposed in this section. In contracting with the GC/CM selected for construction of the Arena, the City shall use its best efforts to include in the contract a guaranteed maximum price, a guaranteed completion date for construction, and a reasonable liquidated damages provision (to which the Team shall be a third-party beneficiary) to attempt to minimize the potential of delay for the Arena opening. The Parties acknowledge that, in order to ensure maximum opportunity for play to begin in the Arena for the 2008 Western Hockey League season, it may be necessary to phase construction of the Arena such that construction of certain elements will be deferred No such phased construction will be undertaken unless the City first provides the Team a reasonable opportunity to review and comment on the phased construction plans and schedule. The City and the Team agree that the Arena will be a first-class minor league hockey facility The program will evolve as the project design and capital budget develop as provided herein. The Parties agree that the broad Program Specifications set forth in Exhibit A constitute the most general Arena program requirements on which initial design and construction of this Arena has been based The Parties recognize that the Arena design and development program are subject to change for consistency with legal requirements. III. Scheduling. Consistent with their agreement to exercise their best efforts to open the Arena for the commencement of the Western Hockey League season in 2008. the Parties will work together to achieve the following objectives by the target dates indicated Failure to achieve completion of any of the following project milestones by the projected dates shall not be grounds for liability, termination, or any other adverse action under this Agreement except as specifically set forth herein. Objectives Target Date Design and Development Agreement Execution Oct. 17/06 _3 _ 50737715 z Objectives Target Date Selection of Arena Operation and Concession Consultants Done Execution of License Agreement Nov 15/06 Completion of Schematic Design Dec 31/06 Selection of GC/CM Dec. 31/06 Completion of Design Development Feb. 28/07 City Approval (Including Team Concurrence) of Budget & Apr. 15/07 Financing Plan Notice to Proceed with Construction Jun.12/07 Selection of Arena Operator and Concessionaire July 1/07 Arena Available for Move-In Sept. 20/08 Arena Opens for Hockey Oct. 15/08 IV. Budget. The Arena design will be undertaken in phases and is an evolutionary process, throughout which the Parties will collaborate. The Parties understand and expect that this collaboration will produce iterative changes in the Arena design, which necessarily will be reflected in the budget as it also evolves consistent with the evolution of the design The Team's concurrence at any stage that the City should proceed to the next phase of design and/or to construction and to develop or refine its budget does not preclude or prejudice continuing consultation, and potential cost allocation, among the Parties in light of any changes in the design and budget which may result. The Parties understand and agree that the evolution of the Arena design also is subject to parallel evolution of the budget as provided herein and that the design and budget are directly related and mutually dependent. The City will not approve a design and initiate or proceed with construction of the Arena inconsistent with the budget if it becomes apparent that funds available for the budget will be insufficient to proceed with a previously-approved design, the City, subject to Team concurrence, will make reasonable efforts to identify design modifications which result in a balanced budget. The Parties also agree that the budget will provide contingency funding for potential cost-overruns Following the Design Completion phase and the adoption of a budget, changes in design requested by the Team that result in an increase in the budget shall be accompanied by the Team's recommendations for off-setting design changes, use of contingency funds, and/or a commitment of supplemental funds sufficient to balance the budget in form and substance reasonably acceptable to the City. The Parties will collaboratively work to accommodate the -4- 50737715 2 Team's proposal. However, any such changes are subject to the City's review and approval and to the negotiation of appropriate change orders acceptable to the City with the GC/CM and Architect, if required The City, in its reasonable discretion, may approve or reject a proposed change; the use of contingency funds, and/or the accompanying proposed off-setting design change and also may, in consultation with the Team, develop and approve an alternative off- setting design change which it deems preferable to the off-setting change proposed by the Team In the event the City at any time identifies that the development costs for the Arena exceed budgetary limitations (after taking into account any off-setting design changes) and unless the City approves the use of contingency funding therefor, the City may reject the proposal unless a source of supplemental funding acceptable to the City is identified and secured to pay for the change. Contingency funding shall not be available for changes in Project scope or other changes requiring major redesign resulting in a significant increase in the budget, as determined by the City in its reasonable discretion. The Parties agree that resources available for Arena construction are limited to revenues generated from Arena-related funding sources and Arena-derived revenues. Preparation of the budget will be a cooperative exercise between the City and the Team. Design and construction of the Arena are subject to consistency with the budget, as approved by the City, subject to Team concurrence The budget will be reviewed and revised over time; each time the City formally approves a budget, it will do so subject to Team concurrence, except and as more specifically provided herein. V. Schematic Design. In the Schematic Design phase, the City shall cause to be prepared design documents based on the agreed Program Specifications, including value engineering and any adjustments in the program. schedule or budget These documents will establish the general design parameters for the Arena, from which construction documents may be prepared. In the event that at or prior to completion of this Schematic Design phase the City and/or Team determines that the Arena or the development program is not acceptable, the Party so deciding shall give written notice to the other Party prior to the initiation of the next phase of the project, in which event the parties will meet immediately to resolve the disagreement If unable to resolve the disagreement, the parties will utilize the Executive Conference resolution process established in subsection A of Section XIV, Disputes This will he the complete dispute resolution process at the Schematic Design phase, and if unable to resolve any disagreement by the conclusion of the Executive Conference, this Agreement shall terminate without further cost or liability between the parties. If a Party does not give notice as provided in this Section VI before initiation of the next phase, this contingency shall be deemed to have been waived and this Agreement shall remain in full force and effect VI. Selection of GC/CM. -5 - 50737715 2 The City shall utilize its standard Request for Proposal (RFQ) process, consistent with Chapter 3910 RCW, to identify construction firms possessing the skills, experience, and resources necessary to serve as the General Contractor/Construction Manager (GC/CM) to construct the Arena. The City shall establish the qualification criteria for the RFQ with input from the Team. The team shall have the right to provide feedback and advice to City regarding the relative qualities of the respondents during the selection process of the RFQ. The City will provide the Team notice of the GC/CM preferred for selection prior to final selection, but the final selection of the GC/CM for the project shall be made by the City in its discretion In the event the Team disapproves of the GC/CM proposed for selection by the City, the parties will meet immediately to resolve the disagreement If unable to resolve the disagreement, the parties will utilize the Executive Conference resolution process established in subsection A of Section XIV. "Disputes" This will be the complete dispute resolution process at the GC/CM selection phase, and if unable to resolve any disagreement by the conclusion of the Executive Conference, this Agreement will terminate without further cost or liability between the parties, provided that the City receives written notice from Team of Team's decision to withdraw from the Agreement prior to the City's notice to the GC/CM that is has been selected to construct the project If the Team does not give notice as provided in this Section VII before the City selects the GC/CM, this contingency shall be deemed to have been waived and this Agreement shall remain in full force and effect VII. Design► Completion. In the Design Completion phase of the project, the City shall cause to be prepared construction documents based on the Schematic Design documents and any further adjustments in the scope or quality of the project or in the budget. Subject to timely concurrence by the Team, the construction documents shall be completed consistent with the schedule prepared by the GC/CM and approved by the City for timely completion of the Project At every stage of design, the City will seek the active participation of the Team and will give the Team the continuing opportunity to provide advice, identify Team preferences, and identify for the City. the Architect and other City agents and consultants how the design for the Arena, the project schedule, and construction methodologies may affect the Team's operations The Team's continuing involvement and consultation in the planning, design, construction and use of the Arena are intended to ensure that the plans, design and construction of the Arena will be satisfactory to the Team and the City. Consistent advice and timely participation by the Team and the City are therefore required at all stages As the Architect completes each phase of design, the City shall provide to the Team the drawings and documentation from that phase of design for the Team's information and review. The Parties will evaluate the quality and condition of the drawings and documents and will complete this review consistent with overall project schedule requirements. If the Parties cannot agree on the appropriate time for review, the agreed time shall be deemed seven (7) calendar days Following completion of this evaluation and review, the Team will provide its written comments on the documents from that phase of design to the City. If the Team fails to produce -6 - 50)37715 z comments after the time for completion of the review, the Team's concurrence will be deemed to have been granted, and the City will move on to subsequent stages of design Alternatively, the City may suspend work on the Project in its discretion without penalty to the City The Team's comments shall include its determination whether to concur that the City should then proceed to the next phase of design and/or construction and to develop or refine its budget based on the results of the collaborative review process, as reflected or to be reflected in revised drawings and documents, as appropriate The Team's concurrence shall not be unreasonably withheld. It shall be a goal of the Arena design process to create a"fan-friendly" environment that facilitates the enjoyment of events by spectators The City shall not issue final approval of design or issue any construction change orders for the following areas%components of the Arena without first obtaining concurrence of that design approval from the Team* Spectator sight lines, press box, game night production facilities/control room, Team offices, home team dressing room, Team training room, Team storage room, club seats, luxury suites, advertising facilities, and Team novelty sales area; provided, however, that the Team cannot mandate that these areas/components exceed the size or quality utilized in similar WHL venues. The City shall have final approval of design for all other aspects of the Arena VIII. Protect Cost Calculation. The Project's Guaranteed Construction Cost (including the Maximum Allowable Construction Cost, or "MACC' , the GC/CM's fee, the cost of special conditions, and sales tax), together with required and additional project contingencies, shall be consistent with the budget. A. Guaranteed Construction Cost; Cost Savings Procedures The City and the Team shall review potential cost savings measures identified by the GC/CM, the Architect, or other project participant during Project development, specifically including subcontractor bid packages and value engineering efforts The Team may also propose ideas for developing savings or may submit value engineering proposals to the City which shall be referred to the GC/CM and the Architect for review. Based on these reviews, the City shall require the GC/CM to include in the subcontract specifications measures which offer a reasonable possibility of cost savings by providing for equipment or materials substitutions, mandatory and non-mandatory deductive alternates, or other similar bid techniques. Implementation of any such cost-saving measures that may require or result in changes to Construction Documents or the budget, with which the Team has previously concurred, shall be subject to Team concurrence. B. Cost Overrun Contingency. In addition to statutory contingency requirements, the budget shall contain a general contingency in an amount to be determined by the Parties through the budget development and approval procedures provided herein. In the event that at or prior to completion of this phase, the City and/or Team determines that the Arena or its development program is not acceptable, the Party so deciding shall give written notice thereof to the other Party prior to the initiation of the next phase of the project as delineated herein, and the parties will meet immediately to resolve the disagreement If unable to resolve the disagreement, the parties will utilize the Executive Conference resolution process established in subsection A of Section XIV, "Disputes." This will be the complete dispute resolution process at -7 - 50737715 2 the Project Cost Calculation phase, and if unable to resolve any disagreement by the conclusion of the Executive Conference, this Agreement shall terminate If a Party does not give notice terminating this Agreement before initiation of the next phase, this contingency shall be deemed to have been waived and this Agreement shall remain in full force and effect. IX. Construction. A. Project Oversight The City will manage construction of the Arena in close consultation with the Team. The Team shall be entitled, at its option and its sole expense, to have a representative on site at any reasonable time during construction, subject to health and safety regulations and the overall control of the City's project manager The Team's representative shall be kept informed of all major pending matters by the City's project manager or designee and have reasonable access to relevant information. B. General Conditions. The City will obtain all Permits required for construction of the Arena and will construct the Arena consistent with the approved Construction Documents and an approved budget. The City shall ensure that the GC/CM contract documents require all construction to be performed in a good and workmanlike manner in full compliance with all applicable legal requirements using materials in accordance with the Construction Documents. C. Change Orders. The Parties acknowledge that events may occur during the course of construction that will cause the GC/CM, the Architect, the City or the Team to seek changes in the approved Construction Documents and/or Guaranteed Construction Cost. The process set forth below will be observed in evaluating and resolving change orders affecting Team areas and components as enumerated in Article VII above and major change order proposals. A major change order proposal is any change order that exceeds $25,000 00 in value and that materially affects the design and operations of any portion of the Arena affecting hockey play or game presentation. (1) Following review of each change order proposal, the Project Manager will formulate a recommendation for City and Team review and approval (2) Approvals required by both the City and Team, and the time within which each is to respond, will vary with the size of proposals submitted. If the Parties cannot agree on a time for response, the default time shall be 72 hours from the time the Project Manager submits its recommendation (3) Each Party will respond to change order proposals as expeditiously as possible. In the event the Team fails to provide to the Project manager a response to a recommendation within such time frame, as measured from the date of submittal, the Team shall be deemed to have approved the recommendation. (4) If the City and Team, at any level, do not concur in the disposition of a change order proposal, the City*s recommendation will be considered by the next level of the Parties* representatives until informal review has been exhausted The City, in its sole discretion, will -8 - 50737715 2 determine in good faith whether or not to implement the change order proposal in order to avoid delays in the Project Schedule and to avoid delay claims from the GC/CM. If the City determines, in good faith, that the Project Schedule allows time to resolve any continuing deadlock, or if the Team disagrees with the City's change order decision, further resolution will be subject to the nonbinding dispute resolution procedures provided herein. (5) The City reserves its sole right to resolve, in its reasonable discretion without use of the consultation procedures provided herein, any change order proposal or other claim or condition without Team concurrence in emergencies which threaten life, health, or safety or potentially entail substantial damage to Arena property. The City shall use all reasonable efforts to notify the Team prior to making such decision and if the decision would have an adverse affect on the Arena, the City will use all reasonable efforts to remediate such adverse affect. D. Project Information. The City shall provide the Team with access to- (a) the statements of the MACC; the budget, and Project construction schedules or other similar documents, (b) the minutes of all progress meetings between the City and the GC/CM that are prepared by the Architect or GC/CM in accordance with its agreement with the City; (c) all certificates of payment issued by the Architect regarding contractor requisitions for payment; and (d) all other reports and schedules relating to the progress of the construction which are customarily prepared and delivered to the City by the Architect, the GC/CM or the subcontractors The City shall make such reports available in order enable the Team to respond promptly and diligently to any request by the City for the Team's concurrence during this process. E. Access During construction, the Parties shall be entitled to access the project and to review and make copies of any files maintained by project participants, including, without limitation,permits and approvals, financial and operating statements, environmental audits, soils reports, inspection reports and studies, service contracts, operating agreements,bills, invoices, receipts, financial projections, marketing studies, and entitlement applications and to conduct such investigations, tests, surveys and other analyses as determined to be necessary, at the investigating Party's sole cost and expense. X. Project Completion. After construction of the project has reached substantial completion, the City shall cause to be completed: (a) contractor's punch list items reasonably required to be completed; and (b) other work jointly identified and agreed upon by the City and the Team as necessary for the proper and efficient functioning of the Arena and its systems, which shall be completed either pursuant to the City construction contracts or through other arrangements by the City (collectively, the "Post-Closing Items"). The City shall cause the completion of the Post-Closing Items as soon as reasonably practicable following the commencement of the License, in accordance with a completion schedule to be developed by the City and the GC/CM with the concurrence of the Team. The City shall make reasonable best efforts, consistent with the budget, to obtain industry-standard warranties in connection with the construction of the Arena and the purchase of any fixtures or equipment to be installed therein, and shall assign to the Team, or make the Team a third party beneficiary of, all such warranties and any rights to obtain extended warranties. -9 - 50737715 2 Following complete Project construction close-out, and after reserving any amounts determined by the City, in its sole discretion, to be necessary for final disposition of any claims or other residual obligations, any funds remaining in the budget, including available contingencies, will, if determined to be feasible and appropriate by the City, be used by the City to capitalize an Arena Capital Reserve Fund for long-term maintenance and renewal of the Arena The City may, if necessary, withdraw from the Arena Capital Reserve Fund any funds necessary to complete Project close-out if and to the extent that its close-out reserves prove insufficient hi no event shall the amount of funds so utilized exceed the maximum amount allowable, in the opinion of the City's legal counsel, to preserve the tax-exempt status of interest paid on any Arena—related bonds or other financing issued to finance the project. XI. Representations and Warranties of Team. The Team represents and warrants to City, as of the date of this Agreement, as follows. (a)Team is a validly existing limited liability company duly organized under the laws of the state of Washington. with full corporate power and authority to own and operate the Seattle Tbunderbirds and to carry on its business as it is presently conducted. (b) No consent, approval or authorization of, or designation, declaration or filing with any third party is required on the part of Team in connection with the execution and delivery of this Agreement or the performance of the Team's obligations hereunder (e)All consents, approvals and authorizations of the constituent owners of Team have been obtained, and the person or persons executing this Agreement on behalf of Team is fully authorized and empowered to do so. (d) There are no judicial or administrative actions, proceedings or investigations pending, or to the best of Team's knowledge threatened, which question the validity of this Agreement or any action taken or to be taken in connection herewith. (e)There is no litigation pending, or to the best of Team's knowledge threatened, against Team that would affect this Agreement or the Teams obligations hereunder. (f)The execution of this Agreement by Team and the performance of the terms hereof will not violate or constitute a breach of any material contract, agreement or undertaking known to Team to which Team is a party or is bound. (g) Team has not (1) made a general assignment for the benefit of creditors; (n) filed any voluntary petition in bankruptcy or suffered the filing of an involuntary petition by creditors; (in) suffered the appointment of a receiver to take possession of all, or substantially all, of its assets, (iv) suffered the attachment or other judicial seizure of all, or substantially all, - 10 - 50737715 2 of its assets; (v) admitted in writing an inability to pay debts as they come due; or (vi) made an offer of settlement, extension or composition to creditors generally. (h) Team has full power and authority to enter into and perform its obligations under this Agreement, (i) Team is not insolvent or unable to pay its debts as they mature, and the consummation of the transactions set forth herein will not make Team insolvent or make Team unable to pay it debts as they mature XII. Representations and Warranties of City. The City represents and warrants to Team as of the date of this Agreement as follows: (a) The City is a code city duly organized, validly existing and in good standing under the laws of the state of Washington, that City has full power and authority to enter into and to perform its obligations under this Agreement and to consummate the transactions contemplated hereby, and that the execution, delivery and performance of this Agreement by City has been duly authorized by all necessary authority (b) The City is the owner of the property upon which the Arena is contemplated to be built and is otherwise authorized to develop said property, subject to applicable regulatory requirements. XIII. Disputes. Any claim or dispute between the Parties relating to the requirements of this Agreement may be submitted in writing by a Party to the dispute resolution process as described below Throughout the process, the City and the Team shall proceed in a timely manner and in good faith to resolve claims or disputes based on accurate and shared information and on a confidential basis A. Executive Conference. The Parties shall make a good faith effort to resolve any dispute or claim by negotiation between representatives with decision-making power If resolution does not result, the City and the Team shall then attempt to resolve the dispute through a direct conference of the City Administrator and the Team's Chief Executive Officer or President The procedures utilized for the conference shall include the exchange of written claims and responses, with supporting information, at least seven (7) calendar days prior to the conference, however, the Parties, by mutual agreement, may shorten or extend this time frame and may other document exchange requirements The positions expressed, responses, and submitted information shall not be admissible as evidence in any subsequent dispute resolution or legal proceeding. B. Mediation. If the procedure set forth above does not result in resolution of the claim or dispute, then within ten (10) calendar days after the last conference meeting or 507377152 final exchange of written positions, either Party may initiate a non-binding, structured mediation to be developed by the Parties with the assistance of individuals or organizations experienced in alternative dispute resolution ("ADR"). The Team and the City shall agree on a single qualified mediator The ADR process will be a mediation process only and neither party is bound to any other ADR process specifically including arbitration The ADR process will be initiated within thirty (30) days of the request unless extended by an agreement of both Parties. The ADR procedures utilized for the mediation shall include the exchange of written claims and responses, with supporting information, at least five (5) days prior to the actual mediation The positions expressed and the mediator's recommendations and/or findings shall not be admissible as evidence in any subsequent arbitration or legal proceeding. C. Arbitration. In the event that the dispute remains unresolved, The City and the Team may mutually agree to submit the claim or dispute to arbitration before a single arbitrator agreed to by the parties Unless otherwise mutually agreed between the Parties, any such arbitration will be conducted utilizing an expedited format in which each side shall have a restricted period of time to present its case, so that the entire presentation of testimony and evidence by both sides may be concluded in one day The arbitrator shall provide a decision on the matter within two (2) business days of the hearing, or such other time period agreed to by the Parties. D. Final Dispute Resolution. Any continuing dispute that exists after undertaking the mandatory and optional dispute resolution processes established above can only be continued by filing suit exclusively under the venue, rules and jurisdiction of the King County Superior Court, King County, Washington. XIV. General Provisions. A. Costs Team and City shall each pay their own attorneys' and consultant's fees in connection with this transaction Any transfer, excise or similar taxes imposed in connection with the development of the Arena shall be paid by City B Successors All the terms of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the heirs, successors and assigns of the parties hereto, but in no event shall any Party be relieved of its obligations hereunder without the express written consent of the other parties. C Captions The captions of this Agreement are for convenience of reference only and shall not define or limit any of the terms or provisions hereof D. Attorneys' Fees In the event that any dispute arises between any parties hereto relating to the interpretation, enforcement or performance of or under this Agreement, each Party shall be responsible to pay all its attorneys' fees and costs incurred in defending or bringing the claim or lawsuit, in addition to any other recovery or award provided by law, through all levels of appeal E. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the state of Washington, without regard to any conflicts of law provisions thereof Venue for any legal disputes shall be King County, Washington - 12 - 5073771sz F. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument G. Time. Time is of the essence of this Agreement and each and every provision hereof Any extension of time granted for the performance of any duty under this Agreement shall not be considered as an extension of time for the performance of any other duty under this Agreement unless specifically agreed by the Parties In the event the time for performance of any obligation hereunder shall fall on a Saturday, Sunday or a holiday, such time for performance shall be extended until the next business day. H. Amendments This Agreement may not be changed, modified or rescinded except in writing, signed by all parties, and any attempt to orally modify this Agreement shall be void and of no effect. I. No Obligations to Third Parties. The execution and delivery of this Agreement shall not be deemed to confer any rights upon, nor obligate any of the parties hereto, to any person or entity other than the parties to this Agreement. J. Further Assurances. City and Team each agree to do such further acts and things and to execute and deliver such additional agreements and instruments as the other may reasonably require to consummate, evidence or confirm the sale or any other agreement contained herein in the manner contemplated by this Agreement. K. Past and Future Agreements. This Agreement replaces and supersedes the Letter of Commitment between the Parties dated April 2006, as extended on August 1, 2006. The Parties may, at their agreement, determine to replace or supersede this Agreement or integrate some or all of its terns into a future agreement such as a licensing agreement. L. Notices. All notices required or permitted to be given hereunder shall be in writing and shall be personally delivered, transmitted by telephone facsimile or sent by U S. certified mail, return receipt requested, addressed as set forth below: City: City Clerk, City of Kent 220 0' Ave South Kent, WA 98032 - 13 - 50737715 2 Team: Mr. Russ Farwell Thunderbird Hockey Enterprises LLC 14326 1241h Avenue NE Kirkland, Washington 98034 (425) 497-0812 Either Party hereto may by proper notice made by the other Party designate such other address for giving of notices All notices shall be deemed given on the day such notice is personally served or transmitted by telephone facsimile (followed with a hard copy by regular mail) or on the third business day following the date such notice is mailed in accordance with this Section. M. Termination and Exclusivity. Either party may terminate this Agreement without penalty at any time prior to the execution of the license agreement described in Section I, above. This Agreement will terminate upon execution of the license agreement. unless made a part of the license agreement upon mutual consent of the parties and subject to any agreed modifications Unless and until this Agreement is terminated, the City agrees that it shall not contract with another sports team as a primary tenant of the Arena, and the Team agrees that it shall not contract or otherwise arrange to play its games in another facility for the 2008 season and/or subsequent seasons, provided, however, that upon notice of a delay in the Arena opening or in completion of Arena construction sufficient to allow Team to occupy and play in the Arena by October 1, 2008, Team shall (1) retain the right to enter into a contract or other arrangement to play its games in another facility (the "Alternative Lease"), and (n) not be required to pay rent to the City until the expiration of the Alternative Lease. Dated as of the date first mentioned above. THE CITY OF KENT By: z� Its: 61 THUNDERBIRD HOCKEY ENTERPRISES LLC, a Washington Limited Liability Company. By: Its: Flz�tviwl List of Exhibits Exhibit A— Broad Program Specifications - 14 - 50737715 2 1 4 I WESTERN HOCKEY LEAGUE ARENA FACILITY STANDARDS The League requires all Member Clubs to meet the following arena facility standards: • For the term of the lease agreement, the arena must provide the WHL club the following space at the facility: 1) Administrative office space in close proximity to the main entrance (minimum 3,500 sq ft ); 2) Minimum twenty(20) permanent parking stalls in a prime parking location; 3) Home team dressing room (minimum 3,000 sq ft ), 4) Off-ice training/fitness room (minimum 1,500 sq ft_)-, 5) Storage space for hockey and administrative supplies (minimum 1,000 sq. ft.); • For each WHL home game, the arena must make available the following space at the facility: 1) Prime parking space for visiting team bus; 2) Visiting team dressing room (minimum 1,000 sq.ft.); 3) Dressing room for on-ice officials (minimum 200 sq. ft), 4) Meeting room for off-ice officials (minimum 100 sq. ft.); 5) A VIP hospitality/reception room (minimum 500 sq. ft), 6) A media hospitality/reception room (minimum 200 sq.ft.); 7) Adequate staffing for all event functions, including security personnel, ushers and box office personnel, 8) Carpet/podium, as required, for on-ice ceremonies. • The arena shall have a minimum seating capacity of 4,500 Seating capacity below the minimum standard may be approved by the League provided it is deemed appropriate for the size of the market_ • Provide a certificate, outlining the maximum standing room capacity of the arena. • The club shall have the right to sell in-arena advertising and retain revenues derived from the sale of these rights EXHIBIT , r • The club shall have the right to sell merchandise and retain revenues derived from the sale of these rights. • The club shall be entitled to practice ice time in the arena as required during the hockey season at no cost to the club, expressly for the purpose of holding preseason training camp and regular practice sessions during the preseason, regular season and playoffs. • Services and facilities available within the arena must include 1) Computerized ticket sales service to ensure maximum ticket distribution; 2) Suitable radio and television broadcast facilities (including broadcast booths for television commentators)and interview areas, 3) Suitable Sound System for Music and PA Announcements 4) Suitable Video Scoreboard for instant replay and promotions. 5) Media press box facilities capable of hosting a minimum twenty (20) media positions. Press box must have a minimum of two (2) phone lines for media use Home teams are required to provide two (2) seats for members of the visiting team staff, upon request; 6) Acceptable television camera position and arena lighting for live television broadcasts (minimum 100 foot candle rating), 7) Acceptable power source for television broadcast facilities; 8) Area for promotional product displays and right to sample products within facility, 9) Acceptable hospitality areas/rooms for media results and hospitality for minimum 25 persons, 10) Acceptable hospitality areas/rooms for VIPS's and other accredited officials for minimum 25 persons, 11) Access to daily laundry, skate sharpening and equipment repair services; 12) Protective tarps, as required, over team and officials entrance areas; 13) Emergency medical response room and qualified medical personnel, 14) Access to public address system and electronic scoreboards • The arena playing surface, boards and player/penalty benches must conform to the League playing rules and regulations as may be amended from time to time at the discretion of the League. • The playing ice surface must be a minimum 200 x05 feet.