BASKETBALL PLAYING AGREEMENT DATED AS OF MARCH 1, 1995 BY AND BETWEEN MINNESOTA TIMBERWOLVES BASKETBALL LIMITED PARTNERSHIP AND MINNEAPOLIS COMMUNITY DEVELOPMENT AGENCY 03/23/95 1:49am TAB LE OF CONTENTS RECITALS ARTICLE I DEFINITIONS ARTICLE II PURCHASE OF THE ARENA Section 2.01 Issuance and Sale of the Bonds II I I. I. I I Section 2.02 Arena Purchase Agreement .ARTICLE PURCHASE-OF THE TEAM, NBA APPROVAL I. II I ARTICLE IV THE TEAM USE OF THE ARENA Section 4.01 Team?s Leased Premises Section 4.02 Basketball Playing Use Space Section 4.0.3 Use of Other Arena Areas Section 4.04 Improvements, Fixtures, Remodeling Section 4.05 Scheduling of Team Games Section 4.06 Limitations on Taylor Partnership Rights Section 4.07 Use Assurances Section 4.08 Maintenance and'Operation of Arena I. I II Section 4.09 Operating Agreement and the Taylor Partnership-Ogden Agreement ARTICLE WAIVER OF DEVELOPMENT AGREEMENT AND GROUND LEASE OBLIGATIONS ARTICLE VI PROPERTY TAXES Section 601 Section 6.02 Section 6.03 Section 6.04 ARTICLE VII COMMITMENT OF THE REMEDIES I. I. II Section 701 Section 7.02 Section 7.03 Section 7.04 Section 704.1 Section 7.04.2 Section 7.04.3 Section 704.4 Section 705 Section 7.06 Section 7.07 Section 7.08 Section 7.09 Section 7.10 Property Tax Obligations Representations of the Agency Regarding-Property Taxes . I. I. . I. No Limitation on Legal Rights I. I. Further Property Tax Provisions I. I. II Team Home Games I. I. I. Force Majeure Remedies of MCDA Extended Net Team Operating Losses II Option to Purchase on Extended Net Team Operating Losses Liquidated Damages on Extended Net Team Operating Losses MASC Appropriation Rights and Remedies in Event PrOperty Taxes Exceed Projections Enforcement of Remedies MCDA Assignment of Options Effect of Options Conditions to Receipt of Liduidated Damages I. I. I . I I. Condition to MCDA Exercise of Options Due Diligence Rights During Option Periods I.ARTICLE TRANSFERS BY BUSINESS ACTIVITIES OF THE TAYLOR PARTNERSHIP . .. . 31 Section 8. 01 Transfer .. .. . . . . .. .. Section 8.. 02 Limitation on Transfer .. .. .. .. . .. .. . .. . Section 3.03 Permitted Transfers to Team Owner . Section 8.04 Pledge of Agreement. .. .. . Section 8.05 Limitations on Business Activities Of the Taylor Partnership. .. .. Section 8.06 NBA Approval Rights .. . . . .. .. .. .. . . -. . .. .. . . . . ARTICLE IX TAXES .. . .. . . . . . . ARTICLE CAPITAL IMPROVEMENTS . . . .. .. Section 10.01 MCDA's Obligations to Make Capital? Improvements . . . Section 10.02 Collaborative Procedures of Parties Covering Capital Improvements and MCDA Rights to Make Additional Capital Improvements .. .. . - . . . .. .. .. . .. .. . .. . Section 10.03 No Contractual Limitation .. . .. . .. Section 1004 Capital Improvements by Taylor Partnership .. . . .. . . . . . ARTICLE XI HOCKEY TEAM PROVISIONS. Section 11. .01 Reservation of Revenues . . . . . Section 11 02 Hockey Team- First Negotiating RIghts Section 11.013 Hockey. .. .. . . ARTICLE XII CLUB SEATS ARTICLE CONCESSIONS .. . . XIV ADVERTISING AND SPONSORSHIP REVENUES .. . . . .. .. . .. Section 14.. 01 Team Advertising Revenues .. .. Section 14. 02 Arena Naming Rights .. .. .. ARTICLE XV ARENA SCOREBOARD EXTERIOR DISPLAY PANEL AND PUBLIC ADDRESS SYSTEM. ARTICLE XVI BROADCAST RIGHTS .. .. . .. ARTICLE XVII INSURANCE AND INDEMNIFICATION. Section 17. 01 Indemnification . .. .. .. .. . .. Section 1701.1 Taylor Partnership? 5 Indemni?cation Section 1701.2 MC Indemnification of the Taylor Partnership. Section 1701.3 Insurance .. .. . .. .. . . . . .. . . . . . .. . . .. .. . .. .. .. .. Section 1701.4 Claims . . . .. . . . .. . .. . . . Section 17.02 Taylor Partnership Insurance Reqmrements .. .. .. . . .. . . . Section 1702.1 Taylor Partnership Insurance Provisions .. .. . .. .. .. .. .. .. .. .. Section 1702.2 Taylor Partnership Evidence of Insurance, Loss Information .. . . Section 17.02.53 Taylor Partnership Additional Insurance for Team Events . . Section 17.03 MC DA Insurance Requirements . . . . . . . .. . . .. .. .. . . .. .. Section 17.04 In GeneralSection 17.05 Governmental Immunity. Section 17.06 Cooperation Regarding RiSk Management . . .334 34ARTICLE XXI Section 18. OT Section 18.02 Section 18.03 Section 18.04 Section 20. 01 Section 2001.1 Section 2001.2 Seciton 2001.3 Section 20.01 .4 Section 2001.5 Section 2001.6 Section 20.02 Section 2002.1 Section 20.022 Section 2002.3 Section 20.024 Section 2002.5 Section 2002.6 Section 2002.7 Section 2002.8 Section 2002.9 Section 20.02.10 Section 20.03 Section 20.04 Section 20.05 Section 20.06 Section 2101 Section 21.02 Sectidn 21.03 Section 21.04 Section 22. .01 Section 22.02 Section 22.03 ARTICLE OTHER DEFAULT PROVISIONS LIMITATION OF . .. .. .. .. MCDA Defaults . . .. . .. . .. Taylor Partnership Defaults .. . .. . . .. .. . . . Insolvency, Bankruptcy. Cumulative Remedies .. .. .. . .. ARTICLE XIX AFFIRMATIVE ACTION ARTICLE XX REPRESENTATIONS WARRANTIES AND OTHER COVENANTS . . .. .. . . .. .. .. . MCDA Representations, Warranties and Covenants - . Authority .. . . .. . No Conflicts .. .. . . .. . . No Violation of Laws . . . . . .. . Litigation .. .. . .. Arena Possession and Title Environmental Laws .. .. . .. . - Taylor Partnership Representations Warranties and Covenants .. .. . . .. Organization . . . .. Authorization; No Violation . Litigation No Conflicts .. . . . . .. .. .. No Violation of Laws .. .. .. . . . .. . Environmental Covenants Total Secured Debt. Periodic Reports of the Taylor Cooperation Between MCDA and Taylor .. .. . .. . . .. . .. .. . .. .. State Grant Requirements . . . Additional Documents and Approval Good Faith Survival of Covenants and Warranties .. .. .. .. . . . . . . .. Confidential Data .. . . DISPUTE RESOLUTION .. . Mediation Arbitration .. . .. . .. .. .. . . . . Exclusivity Litigation .. .. .. . . . . .. . . .. . . ARTICLE XXII CONDITIONS OF THE PARTIES Conditions of MCDA .. .. .. . .. .. Conditions of the Taylor Partnership Failure of Conditions . .. .. . .. .. ..49 49 .49 49 49 ....Exhibit 4.01051) Exhibit 4..01(b) Exhibit 4..01(c) Exhibit 4.01(d) Exhibit 4.07 Exhibit 10.1(b) Assigned Administration Office Space Assigned Video Production Space 62 ARTICLE GENERAL MISCELLANEOUS PROVISIONS . Section 23.01 Taylor Partnership improvements to the Arena . 62 Section 23.02 interpretation . .. . .. . . .. . . 6.3 Section 23.03 Approvals, Notices . .. .. .. . .. . . 63 Section 2304 Time of Essence .. .. . . . .. . . . .. . . 64 Section 2305 Relationship of Parties .. . . . . . . . . . . . . . . . . . . . . 64 Section 23.06 Severability .. .. . 65 Section 2.3.07 Rights to Contract for Use of the Arena 65 Section 2.3.08 Interpretation . . .. .. .. .. .. . .. .. .. 66 Section 23.09 Assignment Binding Effect 66 Section 23.10 Captions .. .. . . .. 66 Section 2.3..11 Counterparts Entire Agreement .. 66 Section 23.12 Amendment .. .. .. .. . .. 67 Section 23.13 Applicable Law .. .. .. .. . . . . . . . . . . 67 Section 23.14 NBA Rules MCDA Cooperation 67 Section 23.15 Individual and Corporate Liability 67 ARTICLE XXIV EFFECTIVE DATE, CLOSING .. .. .. .. .. . . .. .-. 68 EXHIBITS Exhibit 1.1 Arena Legal Description Exhibit 1.2 Amount Specified Under Definition of Designated Target Center Related Revenues Exhibit 1.3 Health Club Lease Description Assigned Team Locker, Dressing and Shower Space and Team Training Room Space Private Suites Permitted Encurnbrances Maximum Annual Credit to Capital Improvements Reserve Exhibit 2001.2 - No Conflicts Exhibit 2001.4 No Conflicts BASKETBALL PLAYING THIS BASKETBALL PLAYING AGREEMENT (this "Agreement") dated as of the first day of March, 199.5, by and between Minnesota Timberwolves Basketball Limited Partnership, a limited partnership under the laws of Minnesota in which Taylor Sports Group, Inc, a Minnesota corporation controlled by Glen A. Taylor, is a general partner (as further defined herein, the ?Taylor Partnership") and the Minneapolis Community Development Agency, a public body corporate and politic under the laws of the State of Minnesota (as further defined herein, . RECITALS A. MCDA has determined that the MCDA's acquisition of the basketball and hockey arena portion of the Target Center (as further defined herein, the "Arena" and the "Target Center") will serve the public interests of the City of Minneapolis, the State and their citizenry if MCDA were thereby able to obtain a thirty year agreement with the major league professional basketball organization commonly known as the Minnesota Timberwolves (as further defined herein, the "Team") to remain in Minnesota and to play its regular season and play-off home games and at least one of its exhibition games each season in the Arena. B. The Taylor Partnership has advised MCDA that the present owner of the Team, The Minnesota Professional Basketball Limited Partnership, (the "Basketball Partnership"), and the Taylor Partnership have executed and delivered a definitive agreement for the sale and purchase of the Team to the Taylor Partnership (as hereinafter defined, the "Team Purchase Agreement") subject to purchase of the Arena and the satisfactory negotiation of the terms and conditions governing the Taylor Partnership?s use of the Arena. C1. The Taylor Partnership has advised MCDA that the NBA has granted its approval of the sale of the Team to the Taylor Partnership, if a satisfactory agreement is reached allowing for the Taylor Partnership?s use of the Arena. 0. In 1988 and prior, the MCDA did at substantial cost and expense assemble and acquire certain parcels of real property in the City of Minneapolis (as hereinafter defined, the "Target Center Real Estate"), issued certain tax increment ?nancing bonds to fund the purchase of the Target Center Real Estate (the Bonds") and did make certain other arrangements in order to facilitate and permit the construction of the Arena thereon and the lease of the Target Center Real Estate, all as reflected in the Second Amended and Restated Development 956 03!23!95 1:4Qam 1 Agreement among Northwest Racquet, Swim 8? Health Clubs, Inc. MCDA and the City of Minneapolis, dated as of August 5, 1988 and as amended (the "Development Agreement") and the Ground Lease of 1988 by and between MCDA, as owner and ground lessor, and Northwest, as tenant, dated as of August 5, 1988 and as amended (the "Ground . Lease of 1988"), The interests of Northwest in the Ground Lease and Development Agreement w?re subsequently assigned to the Minnesota Arena Limited Partnership (the "Arena? Partnership"), E, Pursuant to the Development Agreement and the Ground Lease of 1988, the Basketball Partnership and Arena Partnership did assume and commit to the payment of certain amounts to the MCDA for the use of the Target Center Real Estate and to the payment of certain additional amounts upon the sale of the Team and affiliated interests, or both, if permitted purchasers of the Team, such as the Taylor Partnership, are by the terms thereof to be similarly bound. F.. The City of Minneapolis is willing to refinance the TIF Bonds and to finance a portion of the purchase price of the Target Center (as hereinafter defined) by the issuance and sale of certain general obligation bonds in the approximate amount of $72 Million (as hereinafter defined, the "City Bonds"). MCDA is willing to purchase the Arena in accordance with the terms and conditions of that certain document entitled the Target Center Purchase Agreement, by and between MCDA and the Arena Partnership (the "Target Center Purchase Agreement"), issue or seek to cause the issuance of certain public revenue bonds in the approximate amount of $13 Million to finance the balance of the Target Center purchase (as hereinafter defined, the Bonds") and MCDA is willing to release the Basketball Partnership, the Arena Partnership and the Taylor Partnership from certain obligations under the Development Agreement and the Ground Lease of 1988 subject to the execution of this Agreement by the Taylor Partnership and the due execution of the Health Club Lease, and the Declaration of Restrictive Covenants and Easements (both as hereinafter defined). However, the City of Minneapolis and the MCDA are willing to take the foregoing actions only if" the Taylor Partnership acknowledges that MCDA enters into this Agreement in reliance upon Taylor Partner- ship's commitment to cause the Team to play home'garnes in the Arena throughout the thirty (30) year period provided for in this Agreement, except as otherwise provided herein, and, further, that the substantial public ?nancing represented by the City Bonds and the MCDA Bonds, the authorization and appropriation of substantial public funds for the Arena from the 03:23195 1:49am 2 State of Minnesota, the pledge of the City?s full faith and credit to support the City Bonds and the consequent risks to the taxpayers of the City of Minneapolis, and the release and waiver granted by MCDA to the Arena Partnership, the Basketball Partnership and the Taylor Partnership are all solely a consequence of and for the purpose of obtaining that commitment and by its execution of this Agreement, the Taylor Partnership does evidence its acknowledgementthereof.. G. MCDA has concluded that it would not be able to acquire the Arena and enter into this Agreement except for the undertaking of a private corporation (as hereinafter defined, the "Operator") to assume the financial risks arising from the operation of the Arena, and to exclusively manage and operate the Arena, all as provided in the agreement between Ogden Entertainment Services, Inc, and MCDA (as hereinafter de?ned, the "Operating Agreement?) and the Taylor Partnership desires to coordinate its Team and Arena activities with and be subject to and benefit from the terms of the Operating Agreement, and such other arrangements as Operator and the Taylor Partnership may mutually determine and agree (as hereinafter defined, the Taylor Partnership-Ogden Agreement"). H. MCDA desires to exercise its best efforts to attempt to execute or promote the execution of an agreement with a major league professional hockey organization (as defined herein, the "Hockey Team") to play its home games in the Arena and pursuant thereto, herein MCDA shall reserve certain Arena revenue rights which may at a later date be granted in whole or in part to the Hockey Team. NOW, THEREFORE, in consideration of the premises and the-mutual covenants herein and other good and valuable consideration, the parties do agree: ARTICLE I DEFINITIONS As used in this Agreement, the following terms shall have the respective meanings set forth as follows, unless otherwise provided herein. "Additional Capital improvements" shall have the meaning given to that term in Section 10.01.. of any specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with said specified person. For the purposes of this definition, "control", when used with respect to any specified person means the power to direct the management and policies of each person, directly or .956 0323195 1:49am 3 indirectly, whether through the ownership of voting rights or securities, by contract or otherwise; and the terms "controlling" and ?controlled" have meanings correlative to the foregoing. "Am" means the improvements constituting the indoor hockey and basketball arena and related improvements situated at 600 1 st Avenue North in Minneapolis, Minnesota, currently utilized and occupied by the Team for the playing of Team Games, legally described in Exhibit 1ft hereto and replacements, additions and improvements, thereto. The Arena does not include theHealth Club. "Arena Year" means the annual period commencing each year on July 1 and concluding on June '30 of the following calendar year, except the first Arena Year shall commence on the Commencement Date. "Arena Partnership" means the Minnesota Arena Limited Partnership, the present owner of the Arena and party to the Target Center Purchase Agreement. "Arena Playing Floor'l means that portion of the Arena upon which Team Games are played and other sporting and entertainment events are staged. "Arena Sccireboard" means the color and black and white electronic and video scoreboard and display panels presently located within the Arena Seating Area and the adjacent concourses. "Arena Seating Area" means the Arena public seating areas adjacent to and surrounding the Arena Playing Floor. "Base Property Tax Revenues" means the City's portion of the property taxes derived from the private uses of the Arena (exclusive of the portion of the City?s tax levy attributable to the City?s park board and library board) less all- Tax Increment Revenues. "Basketball Partnership" meansthe Minnesota Professional Basketball Limited Partnership, present owner of the Team and party to the Team Purchase Agreement. "Basketball Playing Equipment" means the basketball playing floor, the basketball hoops, backboards and'stanchions and such other equipment and fixtures as may be presently located in the Arena, utilized specifically for the playing of NBA basketball games in the Arena, which have been acquired by MCDA from the Basketball Partnership pursuant to the Arena Purchase Agreement. means the City Bonds and the MCDA Bonds. "Capital Improvements" means any improvement to, replacement or restoration of or addition-to the Arena which materially increases the value of the Arena, appreciably 958 0323195 1:49am 4 prolongs the useful life of the Arena or makes the Arena adaptable to a different use. Repairs, replacements and maintenance that neither materially increase the Arena value nor appreciably prolong its useful life, but rather keep it in an ordinary, efficient operating condition shall not be Capital Improvements, but expenses which are part of a general plan of significant rehabilitation or remodeling, whether or not involving structural improvements, shall be Capital Improvements. For purposes of this definition only, the term "Arena" shall. mean the Arena or any material portion of the Arena or its mechanical, electrical or other operating systems. "Capital Improvements Reserve" means a reserve established by MCDA on its books for the purpose of calculating obligations with respect to the making of Capital Improvements pursuant to this Agreement. means the City of Minneapolis. "City Bond lndenture" means the Trust lndenture, from the City to Norwest Bank Minnesota, National Association, as Trustee, with respect to the City Bonds dated as of March 1, 1995 and, unless specifically stated to the contrary, as hereafter amended, or as'hereafter restated with reSpect to the refunding or refinancing of such bonds. 'ity Bonds" means the $72,000,000 City of Minneapolis General Obligation Bonds (Arena Acquisition Project) Series 1995 issued to pay a portion of the purchase price of the Target Center and to refund the TIF Bonds and any bonds or other obligations issued to refund or refinance such bonds. "Commencement Date"_means March 2'3, 1995.. means the "Consumer Price Index for Urban Consumers for the US. City Averages for All Items published by the Bureau of Labor Statistics, US. Department of Labor, or if such index ceases to be published such other recognized index of national consumer . I prices as is widely recognized as an authoritative index of consumer prices. "Declaration" means the Declaration of Restrictive Covenants and Easements for the Downtown Minneapolis Basketball/Hockey Arena and Health Club made by the MCDA of even date herewith and any amendments thereto. "Designated Target Center Related Costs" means the sum of the amounts described in Section through of the City Bond Indenture as in effect on the. Commencement Date without amendment. . "Designated Target Center Related Reven ues" means the sum of the following: actual Net Base Property Tax Revenues received by the City from the Arena; (ii) actual Net Tax 0323/95 1:49am 5 Increment Revenues received by MCDA from Target Center less the school district referendum levy; actual Net Entertainment Tax. revenues received by the City and derived from Arena events; (iv) for any year, the amount set forth on Exhibit 1.2 hereto; an amount equal to the interest which would have been earned on the balance of the Capital Improvements Reserve had an amount equal to such balance been invested during the relevant period as part of the City?s and pooled investments; (vi) state economic development grants dedicated to the Arena and actually received by the City or and (vii) payments from MASC dedicated to the Arena and actually received by the City or MCDA. For purposes of this definition, the term "Net" means the gross amount received by the MCDA or City less any amounts which MCDA or City is required to pay to other governmental bodies as a result of a change in law (except a change in City ordinances) occurring after the Commencement Date. "Development Account Loan? means the loan of MCDA to the Arena Partnership made pursuant to the Development Agreement. I "Development Agreement" has the meaning ascribed to it in Recital D. "Economic impact Report" means the Economic impact Report on Target Center, published by Arthur Andersen Co., S..C.., February, 1994.. "Entertainment Tax" means the entertainment tax, imposed in the City pursuant to 1969 Minnesota Laws Chapter 1092., "Exculpatom Language" means the language set forth in the following paragraph with the name of the exculpatory party inserted into the blanks and the legal name of Taylor Partnership substituted for that term: acknowledges: that this Agreement imposes no contractual obligations upon the Minneapo- lis Community Development Agency (MCDA), unless, until and only if the MCDA expressly assumes in writing the obligations of the Taylor Partnership hereunder pursuant to the provisions of that Basketball Playing Agreement by and between MCDA and the Taylor Partnership, bearing date of 1995 (the Basketball Playing Agreement); that in the event of a default or breach under this Agreement, of any kind or nature whatsoever, shall look solely to the Taylor Partner- ship at the time of the default or breach for remedy or relief; and that no member, officer, employee, agent, independent contractor or consultant of MCDA shall be liable to - or any successor in interest to -- in the event of any default or breach by MCDA under the Basketball Playing Agreement or of any other obligation under the 956 1:49am 5 terms of this Agreement; that the Taylor Partnership is not and shall not act as an agent of MCDA or in any manner contract for or bind and that upon the termination of the Basketball Playing Agreement, this Agreement may, at the option of MCDA to be exercised upon written notice to also, be terminated without any right of claim against MCDA, its members, officers, agents, employees, independent contractors or consultants. "Extended Net Team Operating Losses? has the meaning ascribed to it in Section 7.04.. Display Panels" means the black and white electronic and video diSplay panels presently affixed to the exterior of the Arena. "Force Maieure Event" means war, insurrection, strike (but, as to Team players, only if the strike is approved and sanctioned by the collective bargaining unit representing the NBA basketball players), lockouts (but as to the Taylor Partnership?s lockout of Team players, Only if approved and sanctioned by the NBA for the NBA teams), riots, floods, earthquakes, fires, acts of God, acts of the public enemy, epidemics, quarantine restrictions, condemnation or taking by any governmental authority and other acts or the failure to act, of any public or governmental agency or entity (except acts or failure to act by MCDA acting in its capacity as owner of the Arena and a party to this Agreement) or any other causes beyond the control and without the fault of the party claiming a Force Majeure Event. I "Ground Lease of 1988" has the meaning ascribed to it in Recital D. "Health Club" means the private sports and health club situated at 600 ist Street North, Minneapolis, Minnesota, operated under the Health Club Lease, legally described in Exhibit 1.3 hereto and the fixtures and equipment therein. The Health Club does not include the Arena. "Health Club Lease? means the written agreement bearing that title, between MCDA and Arena Health Club Limited Partnership executed contemporaneously with this Agreement. "Hockey Team" means a major league professional hockey team operating under a franchise of the National Hockey League (or a successor organization which franchises "and operates a major league professional hockey league) which has entered into an agreement with MCDA or Operator, or both, to play its home games in the Arena. I "my means the Minnesota Amateur Sports Commission, an agency of the State of Minnesota, created pursuant to Chapter 240A, Minnesota Statutes and any successor public body authorized to perform the duties and obligations of MASC as described herein. 03123r95 1:4Qam 7 Use Agreement" means that certain MASC Use Agreement of even date herewith entered into by and among MASC, MSFC and the Operator providing, generally,.for use of the Arena. means the Minneapolis Community Development Agency, a public body corporate and politic under the laws of the State of Minnesota, and any successOr public body authorized to perform the duties and obligations of MCDA as described herein. Bond lndenture" means the Trust Indenture made from the MCDA to Norwest Bank, National Association, as Trustee, with respect to the MCDA Bonds, dated as of March 1, 199.5 and, unless Specifically stated to the contrary, as hereafter amended, or as hereafter restated with reSpect to the refunding or refinancing of such bonds. Bonds? means the Revenue Bonds (Arena AcquiSition Project) Series 1995-A and the Revenue Bonds (Arena Acquisition Project) Series 1995-5, in the original aggregate principal amount of $12,650,000 to be issued by the MCDA to pay a portion of the purchase price ofthe Target Center and any bonds or other obligations issued to refund or refinance such bonds. means the Metropolitan Sports Facilities Commission created pursuant to Minnesota Statutes, Sections 473.551 through 473599, a public body corporate and politic under the laws of the State of Minnesota, and any successor public body authorized to perform the duties and obligations of MSFC as described herein. means the National Basketball AssOciation, thejoint venture organized under the laws of the State of New York pursuant to that certain Amended and Restated Joint Venture Agreement dated June 1, 1989, by and among said joint venture and the owners of franchises issued by said jbint venture and any successor or substitute organization which issues major league professional basketball franchises and governs the operation of the major league professional basketball league. "Net Team Operating Loss" has-the meaning ascribed to it in Section 7.04. "di_en_" means Ogden Entertainment Services lnc.., a Delaware corporation, and any Ogden Affiliate which may subsequently assume Ogden's duties and obligations as permitted under the Operating Agreement. "Operating Agreement" means the Arena Lease, Operating, Management, Use and Assurances Agreement, dated as of the date of this Agreement, by and between Ogden Entertainment Services, lnc.., and MCDA and as amended from time to time hereafter. .956 0323195 1:4Qam 3 "Operator" means, initially, Ogden acting pursuant to the Operating Agreement, or its successors and assigns as permitted by MCDA, or, in the event Ogden's or its permitted successors? or assigns? rights under the Operating Agreement are terminated, the Taylor Partnership, or if it declines to so act (as provided in Section 4.09), such other person as may be designated by MCJDA. I I ption has the meaning ascribed to it in Sections 7.04.1 and 7.04.4. .. "Prime Rate" means the prime rate of interest payable per annum as determined by and published in the Wall Street Journal (or if it ceases to publish, any nationally recognized daily business journal which publishes such rates), plus two percent "P_rivate Suites? means the sixty-eight (68) private suites and adjacent lobby areas located above the Arena Playing Floor and 'within the Arena Seating Area. "Target Center" means the one physical structure, composed of the Arena and the Health Club. "Target Center Purchase Agreement" means that certain written agreement bearing that title, by and between the Arena Partnership and MCDA, of even date herewith. "Target Center Real Estate" means the real property upon which the Arena and Health Club are situated. "Taylor Partnership" means the Minnesota Timberwolves Basketball Limited Partnership, a Minnesota limited partnership and successors and assigns of the Taylor Partnership as permitted under this Agreement. "Taylor Partnership Equipment" means the equipment owned by the Taylor Partnership utilized for Team operations and administration in the Arena, and not "Arena Equipment" as defined in the Operating Agreement. I "Taylor'- Partnershin-Ogden Agreement" means that certain written agreement, dated as of March 17, 199.5, by and between the Taylor Partnership and Ogden which provides further for the Team?s use of the Arena and allocates between each party thereto the rights to certain private revenues derived from Arena operations and the obligations to pay expenses associated with the maintenance and operation of the Arena. "Tax Increment Revenues" means tax incrementas determined under Minnesota Statutes, Sections 469.174 through 469.179 derived from Tax Increment Financial District No. 41: NBA Arena (the "Tax Increment District"). The sole property in the Tax Increment District is Target Center. 03123195 1:49am 9 "loam." means the Minnesota Timberwolves professional basketball organization, the NBA franchise for the playing of NBA games in Minneapolis, Minnesota, the contracts with individual professional basketball players, coaches and management, rights in and to college basketball player drafts, radio and television broadcasting rights and interests (including interests in and through NBA radio and television contracts), interests in advertising and promotional contracts, leasehold improvements, fixtures and equipment, stock and other interests in NBA Properties, inc?, interests in and pursuant to the NBA Market Extension Partnership Agreement, licenses, approvals and permits, rights in and to the Team name, and Without limitation by reason of the foregoing recitation, every property and asset, contract right, chose in action, right and claim of every kind, nature and description, personal or mixed, tangible or intangible wherever situated, used in the operation and management of, or relating to. the operation, marketing or promotion of the foregoing, including all such assets as are acquired by the Taylor Partnership pursuant to the Team Purchase Agreement and replacements thereof and the rights of the Taylor Partnership in and under the Taylor Partnership-Ogden Agreement. "Team Exhibition Games" means any pro-season NBA exhibition game between the Team and any other NBA team for which the Team is the home team reSponsible for procuring the playing site, pursuant to traditional and customary, uniform NBA rules. "Team Games" means any Team Exhibition Game, Team Regular Season Game or Team Play-Off Game. "Team?s Leased Premises" means that space within the Arena leased to the Taylor Partnership as provided in Section 4.01 . "Team Play-Off Games" means any NBA game following the regular NBA season in which the Team is engaged in a play-off leading to the NBA Championship play-off and for which the Team is the home team responsible for procuring the playing site, pursuant to traditional and customary, uniform NBA rules. "Team Purchase Agreement" means that certain written Agreement, dated as of September .30, 1994, by and between the Taylor Partnership and the Basketball Partnership providing for the sale of the Team to the Taylor Partnership. "Team Regular Season Games" means any regular NBA season game between the Team and another NBA Team for which the Team is the home team reSponsible for procuring the playing site, pursuant to traditional and customary, uniform NBA rules. .QSG 03/231515 1:49am 10 "Term of the Team Use" means the period commencing on the Commencement Date and concluding on June 30, 2025; provided, however, if such term expires during a regular NBA season or the NBA play-off period, the period shall be extended to the last game in the NBA play-off period in which the Team is a participant therein. The Term of the Team Use may terminate earlier as provided herein. I Bonds" has the meaning ascribed to that term in Recital D. I for purposes of- Article has the meaning ascribed to it in Section 8.01.. Whenever the term or is used in this Agreement, it shall be deemed to refer to natural persons, corporations, general or limited partnerships, trusts and other legal entities to the extent permitted by the context in which used. ARTICLE II PURCHASE OF THE ARENA Section 2.01 Issuance and Sale of the Bonds. following the execution of this Agreement, MCDA shall proceed to exercise all commercially reasonable efforts necessary for I it to issue the MCDA Bonds and to cause the City to issue the City Bonds. Section 2.02 Target Center Purchase Agreement. MCDA shall simultaneously-with the execution of this Agreement, execute the Target Center Purchase Agreement, and upon the issuance and sale of the Bonds apply the proceeds thereof in the approximate amount of Fifty- Four Million, Six Hundred Thousand and no/100 Dollars to the Arena purchase, subject to the terms and conditions of the Target Center Purchase Agreement. ARTICLE PURCHASE OF THE TEAM, NBA APPROVAL The Taylor Partnership represents to MCDA that it has executed the Team Purchase Agreement, that neither party is in default of the terms thereof and that the Taylor Partnership shall duly perform in accordance with its terms, subject to its terms and conditions. If for any reason, the purchase of the Team by the Taylor Partnership does not occur upon or prior to the date required for closing of the Target Center Purchase Agreement, or the other conditions to this Agreement are not satisfied, neither MCDA nor any other public body of the State of Minnesota shall have any obligation to the Taylor Partnership hereunder or by reason of any other claim of right and Taylor Partnership shall have no obligation to MCDA or any other public body of the State Of Minnesota hereunder or by reason of any other claim of right. The Taylor Partnership represents to MCDA that it has obtained approval by the NBA for the Taylor .956 03123195 1:49am 1 1 Partnership?s purchase of the Team from the Basketball Partnership, subject only to MCDA's acquisition of the Arena and the execution and delivery of this Agreement. Following its purchase of the Team and through the _'_Terrn of the Team Use, the Taylor Partnership shall maintain its status as a partner, joint venturer or member in good standing in the NBA. Upon acquisition of the Team, the Taylor Partnership may change the name of the Team, but during the Term of the Team Use any new name shall contain the word "Minnesota". ARTICLE Iv THE TEAM USE OF THE ARENA Upon the Commencement Date, MCDA grants to the Taylor Partnership the rights to the use of the Arena as provided in this Article IV throughout the Term of the Team Use, and without the payment of any consideration to MC DA constituting or designated as rent, subject to the terms and conditions of this Agreement. Section 4.01 Igg?i? Leased Premises. MCDA hereby leases and lets unto the Taylor Partnership and the Taylor Partnership hereby leases from MCDA, the following speci?ed areas and spaces within the Arena: the assigned administration office spaCe, divided as the Operator and Taylor Partnership may mutually agree, as depicted on Exhibit 4..01(a) hereto; the assignedvideo production space, as depicted on Exhibit 4.01(b) hereto; the assigned Team locker, dressing and shower space, the assigned Team training roam space, as depicted on Exhibit 4.01(c) hereto; and the Private Suites, as depicted on Exhibit 4.01(d) hereto. The Team?s Leased Premises may be used only for the administration and operation of its Team activities and, with respect to. the Private Suites, the marketing of the use thereof. The Taylor Partnership may sublease the space described in clause of this Section 4.01, but only for use as a video production space ancillary to the live or recorded presentation of Team games and I other Arena events and sublessee?s other private business uses of a similar nature. The sublease shall not be for a term exceeding fifteen (15) years and the sublease shall contain Exculpatory' Language. The use of the Private Suites may be licensed by the Taylor Partnership to other persons for the observation of Team Games and other Arena events, (but the obligation of Private Suite users to purchase tickets to other Arena events shall be as the Operator and the Taylor Partnership may agree). Such use agreements shall not be for a term exceeding ?ve (5) years. Any license thereof for a term exceeding one (1) year shall contain Exculpatory Language and 956 0303195 1:493:11 12 in all cases, shall reserve rights with respect to the use of the Private Suites for the observation of Hockey Team games as contemplated in Section 11.01.. Except for the foregoing permitted sublease and licenses and, except for- a'permitted transferee as provided and permitted in Article of this Agreement, the Taylor Partnership shall not sublease, license, let, transfer, convey or grant its leasehold interest in the Team?s Leased Premises. Section 4.02 Basketball Playing Use Space. The Taylor Partnership shall have the right to the exclusive use of the following areas, spaces and preperty within" the Arena, but only during each of the Team Games and for the period of twelve (12) hours preceding and two (2) hours following each of the Team Games (or such greater or lesser period as the Operator and Taylor Partnership may agree): the Arena Playing Floor and Arena Seating Area; as designated by the Operator from time to time, the visiting teams? and officials? locker dressing and shower spaces; the Basketball Playing Equipment; and such other spaces, areas and equipment, if any, as may be provided for in the Taylor Partnership-Ogden Agreement if the Arena Seating Area is not otherwise occupied, the Team shall also have the right to the use of theArena Playing Floor and the Basketball Playing Equipment for basketball practices conducted by the Team for its Team members and prospective Team members, subject to the terms and conditions of the Taylor Partnership-Ogden Agreement. The Taylor Partnership shall have such other rights to use of the Arena as Taylor Partnership and Operator may agree in or pursuant to the Taylor Partnership-Ogden Agreement. The Taylor Partnership shall not transfer, convey or grant the foregoing use rights to any other person except a permitted transferee as provided and permitted under Article of this Agreement. Section 4.03 Use of Other Arena Areas. In addition to the spaces described in Sections 4.01 and 4.02, the Team shall have the right to have access, egress and ingress, for its employees, agents and officers, to other areas of the Arena generally used by the public, such as the lobby area, entry ways, escalators, elevators and concourses, at such times and for such purposes as may be reasonably necessary to permit the Team to conduct its basketball administration, practicing and playing operations as contemplated in Sections 4.01 and 4.02, and for the general public admitted to Team Games during the period provided for in Section 4.02.. 03123135 1:49am 13 The Team shall not have access to any area in the Arena dedicated to the exclusive use of MCDA or Operator. The Taylor Partnership shall not transfer, convey or grant the foregoing use rights to any other person. Section 4 .04 Improvements, Fixtures, Remodeling. The Team?s Leased Premises and all other portions of the Arena are and shall remain the property of MCIDA, including all permanent walls, wiring, plumbing and electrical ?xtures, lockers and bencheswhich are attached to the walls or floors and leasehold improvements attached to the walls and floors and fixtures of every kind and description. MCDA shall have no obligation to make or pay for any leasehold improvements within the Team's Leased Premises. Taylor Partnership may rearrange moveable partitions and office cubes within the Team's Leased Premises without the consent of MCDA. The Taylor Partnership may alter, remodel, make improvements or install fixtures within the Team?s Leased Premises if the Arena?s structure and use is not detrimentally affected thereby and if such work does not materially diminish the value of the Team?s Leased Premises. Prior to the commencement of such work, the Taylor Partnership shall deliver detailed plans and berprints for such work to, and shall not commence such work except upon receipt of the written approval of, MCDA and Operator, which approval by MCDA shall not be unreasonably withheld. Except in the Team?s Leased. Premises, the Taylor Partnership shall not alter, remodel, make improvements to or install any fixtures in any other area. of the Arena, except upon the prior written approval of MCDA and Operator, which may be withheld by MCIDA in the exercise of its sole discretion. Section 405 For the balance of the 1994-1995 NBA Season, Team Games shall be scheduled and played in accordance with the schedule previously announced by the NBA and the Basketball Partnership. in each succeeding year of the Term of the Team Use, Team Games shall be scheduled in accordance with uniform NBA rules, consistent with the provisions set forth in the Taylor Partnership-Ogden Agreement. Section 4.06 Limitations oanaylor Partnership Rights. At all times, the Arena shall be under the care, custody and control of MCDA and the Operator pursuant to the Operating Agreement. The Taylor Partnership shall have no leasehold interest in or rights to use the Arena other than those rights Specifically granted in this Agreement and in the Taylor Partnership- Ogden Agreement. operator shall not relinquish the right to control the management of the Arena at times when the Team is using the Arena pursuant to this Agreement, provided that any exercise of such control by Operator shall be consistent with the provisions of this Agreement BEG 03123195124Qam 14 and the Taylor Partnership-Ogden Agreement. Any reservation by MCDA of some specific right in this Agreement shall not be construed as granting to the Taylor Partnership any rights not mentioned or not specifically reserved by MCDA in this Agreement. MCZDA-and-Operator shall have access to all parts of the Arena, including the Team?s Leased Premises, for reasonable purposes at all reasonable times and during the periods in which the Taylor. Partnership is granted the exclusive use of parts of the Arena by this Agreement. Provided, however, MCDA shall not have any access to any locker rooms (officials' or teams?) or the Arena Playing Floor during the period referred to in Section 4.02 or during Team practices. The Team shall comply with all laws and governmental regulations applicable to the Team's use and occupancy of the Arena and to obtain at its own expense all necessary licenses and permits for the conduct of the Team?s operations. Further provisions with respect to the Taylor Partnership?s use of the Arena pursuant to this Agreement may be set forth in the Taylor Partnership-Ogden Agreement, including reasonable rules and regulations now or hereafter made or procedures for establishing such rules and regulations. if Ogden no longer serves thereunder, then the Taylor Partnership I shall negotiate in good faith with the Ogden successor such reasonable rules and regulations or procedures. I Section 4.07 Milling. Throughout the Term of the Team Use, and for so long as the Taylor Partnership shall duly and timely perform its obligations under this Agreement and the Taylor Partnership-Ogden Agreement, the Taylor Partnership shall quietly enjoy the uses of the Arena granted herein and without disturbance notwithstanding any. claims or disputes which may arise among or between MSFC, MCIDA, MASC, or the City, but subject, however, in all respects, to the terms and conditions of this Agreement, the Operating Agreement and the Taylor Partnership-Ogden Agreement. The Taylor Partnership acknowledges the presence of the Permitted Encumbrances (as described and set forth on Exhibit 4.07 hereto) affecting the Arena. Section 4.08 Maintenance and Operation of Arena. Outside of the Team's Leased Premises, Operator shall, at its expense, perform repairs, maintenance and operation of the Arena as provided in the Operating Agreement and the Taylor Partnership-Ogden Agreement. inside the Team?s Leased Premises, the Taylor Partnership shall, at its expense, perform said duties. The Taylor Partnership-Ogden Agreement may provide that the Operator shall assume such duties with respect to the Team?s Leased Premises, but the Taylor Partnership shall remain liable to do so if the-Operator does not. MCDA's sole obligation with respect to the condition of the Arena and the maintenance, upkeep, repair, rehabilitation and improvement of the Arena 03123195 1:49am 15 shall be to make Capital Improvements as provided in Section 10.01.. The Taylor Partnership shall have no remedy against MCDA arising from the condition of the Arena as long as MCDA is performing its covenants to make Capital improvements as provided in Section 10.01.. The Taylor Partnership acknowledges on the date hereof and will acknowledge" on the Commence- ment Date, that the Arena and the Basketball Playing Equipment are in a condition satisfactory to_the Taylor Partnership and in compliance with the standards provided for in the Operating Agreement and the Taylor Partnership-Operating Agreement. Section 4.09 The Operating Agreement and the Taylor Partnership-Ogden Agreement. The Taylor Partnership acknowledges prior receipt of a copy of the Operating Agreement and that simultaneously with the execution of this Agreement, MCIDA. has executed the Operating Agreement with the Operator. As provided in the Operating Agreement, the Operator shall perform and be liable for certain duties and obligations herein assumed by MCDA and shall be entitled to the enjoyment of certain rights as against the Taylor Partnership herein granted to MCDA. To the extent so provided in the Operating Agreement, whenever the Operator has assumed such duties and obligations, the Taylor Partnership shall look solely to Operator for the performance thereof and MCDA shall have no liability to the Taylor Partnership or other persons on account of the performance or non-performance of the Operator. To the extent so provided in the Operating Agreement, whenever the Operator has been granted the enjoyment of such rights, the Taylor Partnership shall attorn to the Operator and perform its duties and obligations for and on behalf of the Operator and, except for the remedies afforded to MCDA in Article VII of this Agreement, such rights may be enforced directly by the Operator against the Taylor Partnership. Following reasonable notice to MCDA, the Taylor Partnership shall have the right, on its own behalf and without cost, expense or liability to MCDA, to enforce directly against the Operator, the maintenance, repair, service, and operating obligations of the Operator provided for in the following Sections of the Operating Agreement: 4.2, 4.9, 4.10, 4.14, 4.17 and 4.21.. MCDA shall extend reasonable cooperation to the Taylor Partnership in the enforcement thereof. MCIDA shall not unreasonably waive or excuse any substantial or material default or breach by the Operator under the Operating Agreement. Provided, however, under no circumstances shall the Taylor Partnership have the right or authority to terminate or cause the termination of the Operating Agreement. If Ogden is no longer to serve as the Operator, however or by Whomever initiated or determined, and, if at the time thereof the Taylor Partnership is the owner of the Team, then MCDA shall give notice thereof to the Taylor Partnership and the Taylor Partnership 0312395 1:49am 16 may if it so elects within sixty (60) days of the notice from MCIDA, become the Operator (for so long as it remains as the owner of the Team), and, if it so elects, the Taylor Partnership shall assume the rights and obligations of Ogden under the Operating Agreement, or may subcontract with a third party, approved by MCDA, to assume and perform theOperating Agreement. approval rights shall be exercised reasonably by MCDA if said subcontractor can demonstrate expertise in the management and operation of first class indoor sports and enter-- tainment arenas in the United States and has demonstrated ?nancial resources sufficient to sustain economic risks related to the Arena 5 operation, and Operator 5 duties and obligations under the Operating Agreement. if the Taylor Partnership declines to make the foregoing election within the sixty (60) day period, any successor manager selected by MC DA shall assume and perform the Operating Agreement and the Taylor Partnership-Ogden Agreement and if MCDA does not select a successor, MCDA shall itself act as the manager and operator of the Arena and assume the Taylor Partnership-Ogden Agreement. A copy of the Taylor Partnership- Ogden Agreement was submitted to MCDA prior to its execution by the Taylor Partnership. Neither this Agreement nor the Operating Agreement shall be construed to alter the rights or . obligations between the Operator and the Taylor Partnership underthe Taylor Partnership?Ogden Agreement; and the Taylor Partnership-Ogden Agreement shall not be construed to alter the rights and obligations between MCIDA and Taylor Partnership under this Agreement or between MCIDA and the Operator under the Operating Agreement. A copy of any proposed amendment to the Taylor Partnership-Ogden Agreement shall by notice be submitted to MCDA not less than ten (10) business days prior to its execution. The amendment shall not be subject to the approval of MCDA, but in the event a material modification of the Taylor Partnership-Ogden Agreement is made subsequent to the execution of this Agreement or subsequent to the Commencement Date, unless the prior written consent of MC DA has been obtained, the material modification shall not be binding on MCDA or its assignee and MCIDA or its assignee shall have no obligation to assume or perform such material modification if MCDA or its assignee becomes the owner of the Team and is required to assume the obligations of the Taylor Partnership or if MCDA or its assignee becomes the operator or manager of the Arena and is required to assume the obligations of the Operator. The Taylor Partnership-Ogden Agreement shall be subject to the representations and confidentiality provisions of Section 20 .06 of this Agreement. A breach by the Operator of the Taylor Partnership-Ogden Agreement shall not give rise to any claim or right in .or by the Taylor Partnership against MCDA under this Agreement or otherwise. 03123195 1:49am 17 ARTICLE WAIVER OF DEVELOPMENT AGREEMENT AND GROUND LEASE OBLIGATIONS. Upon the closing of the Team Purchase Agreement and the Target Center Purchase Agreement, and satisfaction of the conditions precedent thereto (including payment of the MCDA's Development Account Loan), the MCDA shall waive, release and will not enforce any obligations of the Basketball Partnership or the Arena Partnership to make any payments to the MCDA under the Development Agreement or the Ground Lease arising from the taxable income of the Basketball Partnership or the Arena Partnership (except with respect to the Health Club which the Arena Partnership or its principals will continue to own), the sale of the Team to the'Taylor Partnership, or the sale of the Target Center to MCDA. MCDA does hereby waive and release the Taylor Partnership from any obligation to assume or perform any such obligations. MCDA shall deliver to the Arena Partnership and the Basketball Partnership such documents and instruments as may be reasonably necessary to evidence the waiver and release provided for in this Article V. ARTICLE VI PROPERTY TAXES Section 601 Property Tax Obligations. The Taylor Partnership shall pay all property taxes lawfully imposed with respect to the use of the Arena by the Taylor Partnership under the terms of this Agreement. The Taylor Partnership shall pay all such property taxes in full when due, provided that the Taylor Partnership retains all the rights and remedies of a property taxpayer of the City as to the dates of payment, and the amounts of the payments of and the right to protest the property taxes imposed on the Taylor Partnership with respect to the use of the Arena by the Taylor Partnership under the terms of this Agreement. The obligation of the Taylor Partnership to pay property taxes pursuant to the foregoing covenant shall not be enforceable against the Taylor Partnership with respect to property taxes due and payable in the calendar years following the calendar year within which pursuant and subject to the provisions of Section 7.02, 7.04.1 and 7.04.2, 7.04.3 and 7 04.4, the Taylor Partnership vacates the Team's Leased Premises and its uses of the Arena as are granted by MCDA to the Taylor Partnership in Article IV of this Agreement. The Taylor Partnership shall have no obligation under this Agreement to pay the property taxes imposed with respect to the use of the Arena by any entity or person other than the Taylor Partnership. .95G 0303195 1:49am 18 Section 6.02 Representations-of the MCDA Regarding Property Taxes. MCDA makes the following representations to the Taylor Partnership with respect to the property taxes expected to be payable with respect to the uses of the Arena by the Taylor Partnership and the Operator. The market value of the interests of the Arena Partnership in the Target Center for I taxes payable in 1995 is $54,040,000, and the property taxes payable with respect to the Target Center in 1995 are $3,583,146.58. The surnlof the current market values of the interests of the Taylor Partnership in the Arena under the Playing Agreement and the interests of the Operator in the Arena under the Operating Agreement has been established by the City Assessor, for property taxes payable in 1996, at approximately $44,000,000, and, the property taxes payable with respect to such interests in 1996 are expected to be $2,820,000, subject to the provisions of Section 6.03. The MCDA believes, based on discussions with the City Assessor, that the use of the Arena by MASC pursuant to the MASC Use Agreement in 1996 and thereafter will not materially increase the market value of the Arena. Based on discussions with the City Assessor as to the proposed method of appraising the private interests in the Arena for property tax purposes, and based further on long?term trends regarding the taxes payable by commercial-industrial property in the City, MCDA expects that the property taxes payable-with respect to the private business uses of the Arena by the Taylor Partnership and the Operator will not increase at a rate greater than two percent per annum compounded annually. Based on discussions with the City Assessor and the City Attorney, MCDA expects that the City Assessor will continue to employ the current method of appraisal under which the City Assessor has determined the current market values of the Arena and the Health Club. Section 6.03 No Limitation on Legal Rights. Notwithstanding any provision of this Agreement to the contrary, the Taylor Partnership and the Operator retain all the legal rights of any taxpayer to contest the market value imposed on the interests of the Taylor Partnership and/or the Operator and/or MASC in the Arena. These rights include, without limitation, all administrative appeals with respect to the determination .956 03123195 1:49am 1 9 of market values, and all available appeals to the Minnesota Tax Court, the Minnesota Court of Appeals, and the Minnesota Supreme Court. Neither the Taylor Partnership nor the Operator has agreed to any minimum market value for such interests or any minimum property tax to be paid with respect to such interest. Neither the Taylor Partnership nor the Operator has agreed. to make any payment to the MC DA or the City in addition to any property taxes in the event the market values of such interests or the property taxes from the Arena fall below the amounts referred to in Section 6.02 hereof. Neither the Taylor Partnership nor the Operator has agreed to provide (or provided) any security for the payment of property taxes, any third-party guarantees for the payment of property taxes, or any other credit enhancement for the payment of property taxes with respect to the Arena. Notwithstanding any representations of the MCDA in this Agreement: the City Assessor may establish any market value with respect to the interests of the Taylor Partnership, the Operator and MASC. in the Arena, without restriction, under any method of appraisal that the City Assessor deems appropriate and lawful; and (ii) the City, Hennepin County, Minneapolis Special School District and the special taxing districts may impose property taxes on the interests of the Taylor Partnership and the Operator in the Arena, without restriction, to the extent consistent with applicable laws of the State of Minnesota. The MCDA has not agreed to any maximum market value for the interests of the Taylor Partnership or the Operator in the Arena,'or any maximum property tax to be paid with respect to such interests. The MCDA has not agreed to make any payment to the Taylor Partnership or the operator in the event the market values of such interests or the property taxes from the Arena exceed the amounts referred to in Section 6.02 hereof. I Section 604 Further Property Tax Provisions. The rights and remedies of the parties arising upon the occurrence of certain property tax events are set forth in Section 7.04.4. ARTICLE VII COMMITMENT OF THE REMEDIES Section 7.01 Team Home Games. The Taylor Partnership agrees that, from and after the Commencement Date, the Taylor Partnership shall throughout the Term of the Team Use, cause the Team to play all of the Team Regular Season Games, all of the Team Play-Off Games and, each Arena Year, at least one of the Team Exhibition Games in the Arena and cause the Team to be and retain its status as a partner, joint venturer or member-in good standing in the NBA. 03123195 1:49am 20 Provided, however, that if pursuant to uniform NBA rules applicable to all franchised teams, the Team is required to play two (2) neutral-site, NBA sanctioned games per year at a venue other than the Arena, which but for said NBA requirement, may be deemed a Team Regular Season Game, pursuant to traditional and uniform NBA rules, then the Team may play two neutral-site, NBA sanctioned games at a venue other than the Arena and the playing of said neutral site games shall not be deemed Team Regular Season Games and shall not constitute a violation or breach of the Taylor Partnership's covenants contained in this Section 7.01.. Section 7.02 Eg?Maieure, If the Team is unable to play a Team Game in the Arena by reason of a Force Majeure Event affecting the Team, the Taylor-Partnership shall be relieved of its obligations under this Agreement for that Team Game except as provided in this Section 7.02.. The Team shall be obligated to play any make?up of that Team Game at the Arena if such make?up Team Game can be played in the Minneapolis-St. Paul franchise area according to applicable NBA rules. If the Taylor Partnership is unable to play a Team Game due to a Force Majeure Event affecting the Arena and the Arena cannot be used for its intended purpose, the Taylor Partnership shall be relieved of its obligations to play that Team Game at the Arena except as provided in this Section 7.02.. The Arena shall be deemed suitable for its intended purpose if the Arena Playing Floor can be used, if ninety percent of the seats in the lower level Arena Seating Area can be used and eighty percent of the seats in the upper level of the Arena Seating Area can be used, if access to the Arena is not materially obstructed, if necessary ancillary areas and services are usable to the extent required by applicable law, and if use is. deemed safe by competent governmental authority and is consistent with uniform NBA rules. The Taylor Partnership shall be obligated to play any make-up of that Team Game at the Arena if it can be played in the Minneapolis-St. Paul franchise area according to applicable NBA rules. During any period when the Arena cannot be used for its intended purpose due to a Force Majeure Event and the make?up of that Team Game cannot be played at the Arena, the Taylor Partnership shall cause Team Games to be played at such other suitable facility located in the Twin Cities Metropolitan Area as MCI DA and Taylor Partnership may mutually arrange, consistent with applicable uniform NBA rules, including, but not by way of limitation, the Hubert H. Humphrey Metrodome. in such event, MCDA shall bear the cost of the rental of the replace? ment venue, if any. If, after application of commercially reasonable efforts, MCZDA and Taylor 03i23195 1:4Qam 21 Partnership are unable to obtain a suitable replacement venue for any Team Game, the Taylor- Partnership may schedule and play the Team Game at any site it may select, if the make-up of the Team Game cannot be played at the Arena. MCDA shall notify the Taylor Partnership within ninety (90) days following the occurrence of a Force Majeure Event affecting the Arena whether MCDA intends to completely restore the Arena. if the Taylor Partnership is not given timely notice by MCCDA of its intent to completely restore or the Arena restoration is not completed to thecondition existing before the Force Majeure Event within the one (1) year period following the determination and notice of intent to restore by MCDA, then the Taylor Partnership, by notice to MCZDA, may elect to terminate this Agreement and upon such notice, th is Agreement shall terminate and the liquidated damages provided for in Sections 703, 704.2 and 7 04.4 shall not be due and MCIDA shall not have the option to purchase the Team as provided in Sections 7.04.1, 7.04-3 and 7.04.4. If MCDA undertakes to restore theArena, the foregoing provisions of this Section 7.02 will continue to apply until the one (1) year period provided for restoration expires. MCDA shall in this period diligently perform all restoration work at cost and expense. Section 7.03 Remedies of MCDA. The Taylor Partnership acknowledges that the Team, as property, is extraordinary and unique and thatunder the organization of major league professional basketball by and through the NBA, MCDA cannot replace the Team, and that the determination of damages caused by a breach of Sections 7.01 and 7 .02 and suffered by the State of Minnesota, the City of Minneapolis, the MCDA and the citizenry of the State of Minnesota is uncertain, and not possible of accurate ascertainment. Therefore, the Taylor Partnership acknowledges and agrees that there exists no adequate and complete remedy at law to enforce the provisions of Sections 7.01 and 7.02, and the Team purchase options in Sections 7.04.1, 704.3 and 7.04.4 of this Agreement and that equitable relief by way of injunction or specific performance is an appropriate remedy for the enforcement of the covenants in Sections 7.01 and 7.02, and the Team purchase Options in Sections 7.04.1, 704.3 and 7.04.4, notwithstanding and without regard to the provisions for liquidated damages provided elsewhere in this Article VII. Further, the Taylor Partnership acknowledges and agrees that, if upon a breach of Sections 701 and 7.02 of this Agreement, for any reason, equitable relief fashioned to require the Team to play its Team Games in the Arena is not granted by a court, the payment of liquidated damages is an appropriate remedy. Therefore, in the event of a breach of the Taylor Partnershipis covenants in Sections 7.01 and 7.02 and the .956 03l23195 1:49am 2 2 failure of any court to grant the equitable relief described herein, the-Taylor Partnership shall pay liquidated damages equal to Sixty Million Dollars reduced by Three Million Dollars for each of the first ten (10) complete Arena Years during which the Team Games are played'at the Arena as provided in Section 7.01 (other than the two (2) neutral site games as provided in Section 701) or, if not played, are played in compliance with the provisions of Section 7.02 and Thirty Million Dollars ($30,000,000) throughout the remaining Term of the Team Use. In determining the amount of the liquidated damages provided for in'this Section 7-053 and Sections 7 ..04..2, 704.3 and 7.04.4, the parties acknowledge and mutually represent to the other party that they have exercised great care to make a reasonable forecast of direct and consequential damages allowable by law that may arise from the breach, taking into consideration, loss of Arena revenues and taxes attributable to Team operations, the extraordi- nary involvement, covenants and expense of the public in facilitating the retention of the Team to play its Team Games at the Arena, the consequent reduction in value of the Arena arising from the absence of Team operations, the substantial economic benefit conferred on the Team by the favorable financial arrangements allowed for its use of the Arena intended to assure its continued playing of Team Games in the Arena for the full Term of the Team Use, the detrimental effects of a breach on the downtown Minneapolis warehouse area, and the loss of jobs and public sector and other revenues as reflected in the Economic Impact Report. Each of the parties also acknowledge and represent to the other party that the structuring of the liquidated damages occasioned by the breach of Taylor Partnership's obligations in Sections 701 and 7.02, at various periods during the Term of the Team Use, reasonably and appropriately determines the damages that may be suffered at any particular time over the Term of Team Use, reducing the amount payable in each of the ?rst ten (10) years in order to stabilize the amount payable in the remaining years of the Term of the Team Use and that the amount of the liquidated damages is a reasonable forecast of just compensation for harm caused by the breach. Upon breach of the covenants in Sections 7.01 or 7.02, and if injunctive relief or specific performance as provided in this Section 7 .03 is not granted to MCDA, liquidated damages shall be paid by the Taylor Partnership in immediately available funds in a lump sum and not later than ninety (90) days from the date of the breach of the covenants in Sections 7.01 or 7.02.. If not timely paid, interest at the Prime Rate shall accrue and be payable on the amount of liquidated damages due for the period from the date of the breach until fully paid by the Taylor 03IZSI95 1:49am 2.3 Partnership. Provided, however, if the breach is only of clause of Section 7-0i and the Taylor Partnership causes the Team to continue to play NBA sanctioned Team Games at the Arena as provided in clause of Section 7.01, or a replacement venue as provided in Section 7.02, without interruption, the Taylor Partnership shall and diligently cause the cure of Said breach and liquidated damages shall not then be payable unless the Taylor Partnership fails to play one NBA sanctioned Team Game at the Arena other than as provided in Section 7.01, or a replacement venue as provided in Section 7.02.. Section 7.04 Extended Net Team Operating Losses. For purposes of this Agreement, "Extended Net Team Operating Losses" means that the Taylor Partnership has suffered a "Net Team Operating Loss" from the operations of the Team in each of two (2) consecutive, complete fiscal years of the Taylor Partnership. "Net Team Operating Loss" means that all expenses of the Taylor Partnership attributable solely to the operation of the Team have exceeded all income attributable solely to operations of the Team. Neither the expenses nor the income attributable to the additional Taylor Partnership activities or Operations that may be permitted under Section 8.05 shall be considered in determining whether a Net Team Operating Loss has occurred. For purposes of determining the foregoing: depreciation of depreciable assets or amortization of amortizable assets of the Team purchase price and acquisition costs will be deemed an expense but shall be calculated in the same manner used by the Taylor Partnership in its United States income tax return; interest on debt incurred to finance or refinance the Team purchase shall not be deemed an expense; distributions or dividends paid or payable to any person who is a partner or shareholder shall not be deemed an expense; amounts paid or payable to an Affiliate of the Taylor Partnership which are in excess of what is commercially reasonable (which with respect to the management fee payable by the Taylor Partnership to Taylor Sports . Group, Inc.., or an Affiliate thereof, as the general partner of the Taylor Partnership shall be deter- mined by comparison with the average management fee paid by owners of other NBA teams to its or their general partner) shall not be deemed an expense; amounts paid or payable to a descendent of or the spouse of a descendent of an individual who is an Affiliate of the Taylor Partnership which are in excess of what is commercially reasonable (which with respect to compensation shall be determined by comparison with the average compensation paid by other NBA teams) shall not be deemed an expense; and taxes on income paid or payable to the United States or any state by the Taylor Partnership (or for so long as it remains a partnership, by the partner thereof) shall not be deemed an expense. If any of the assets or operations of the .956 03123195 1:493:11 24 Team as comprised on the date of the closing of the Taylor Partnership?s purchase of the Team (or thereafter, as are commonly deemed to comprise assets oroperations attributable to an NBA franchise) are owned or operated by any Affiliate of the Taylor Partnership, the expenses and income arising therefrom shall also be deemed attributable solely to the operation of the Team. Except as modified in this Section 7.04, Net Team Operating Less shall be determined in accordance with generally accepted accounting principles consistently applied. The claim of a Net Team Operating Loss by the Taylor Partnership must be accompanied by detailed financial statements for the Taylor Partnership, certi?ed by a nationally or regionally recognized firm of certi?ed public accountants. A nationally recognized firm of certi?ed public accountants engaged by MCDA shall have access to the books and records of the Taylor Partnership as may be necessary to confirm or deny any claim of Net Team Operating Loss. 7-04.1 Option to Purchase on Extended Net Team Operating Losses. If, in Taylor Partnership fiscal years commencing after June 30, 2005, Extended Net Team Operating Losses have occurred, and the Taylor Partnership desires to cease playing Team Games in the Arena, the Taylor Partnership may provide written notice thereof to MCDA. The notice must be given, if at all, within one hundred twenty (120) days. of the last day of the second fiscal year of the Taylor Partnership that comprised the period for determining the Extended Net Team Operating Losses; provided, however, upon written request by the Taylor Partnership to MCDA, MCIDA may, in the exercise of its sole discretion, extend the notice period as it may wish. If Extended Net Operating Losses have occurred and the Taylor Partnership has not giVen notice within the period provided for in the preceding sentence, the Net Team Operating Loss of the first (ist) fiscal year that comprised the Extended Team Operating Losses shall thereafter" be excluded in determining whether Extended Team Operating Losses have occurred. For a period of twelve (i 2) full calendar months after the notice has been given (the "Option Period"), MCDA shall have the option to purchase the Team from the Taylor Partnership at a purchase price equal to Eighty?Eight Million Five Hundred Thousand ($88,500,000) Dollars, increased by three percent for each full Arena Year (or a fraction thereof if less than a full Arena Year) elapsing between the Commencement Date and the date of the closing of the Team-purchase by MCDA, compounded annually. - The option of the MCDA shall be exercised, if at all, during the Option Period and the purchase of the Team shall be closed and the purchase price paid in cash or other immediately available funds not later than the last day of the Option Period. At the closing, the Taylor 031'23195 1:4Qam 2 5 Partnership shall convey the Team to MCDA free and clear of all liens, encumbrances and security interests lof any kind (other than the Taylor Partnership?Ogden Agreement which MCDA or assignee shall assume subject to Section 4.09) and shall execute documents of conveyance, containing such representations and warranties as are customary in such asset sale transactions. The option shall be assignable by the MCIDA as provided in Section 7.06. If does not exercise its option to purchase the Team and if within two (2) full calendar years from the last day of the Option Period, the Taylor Partnership has not sold the Team or received the approval of the NBA to-play its Team Games in another NBA franchise area, or the purchase from Taylor has not received such approval, before any sale or move of the Team, the Taylor Partnership must again meet the conditions, give the notice and grant the option to MCDA as provided'in this Section 7.04.1 .. Section 704.2 .Liguidated Damages on Extended Net Team Operating Losses. The parties acknowledge and mutually represent to each other that the option granted to MCIDA in Section 7.04.1 is a valuable right not capable on the date hereof of precise ascertainment and that by reason thereof, the liquidated damages provided for under Section 7.03 are appropriately reduced by the mutually stipulated value of the option as reflected in this Section 704.2. If MCDA or its assignee determines not to exercise the options granted under Sections 7.04.1 and 7 04.3 and the Taylor Partnership at any time thereafter breaches its covenant to cause the Team to play the Team Games at the Arena as provided in Section 7.01 or in a replacement venue as provided in Section 7.02, then, MCDA shall have no right to injunctive relief or specific perfor? mance as provided in Section 7.0.3 and in lieu of the liquidated damages as provided and measured in Section 7.03, the Taylor Partnership shall pay liquidated-damages MCDA as described in Section 7.03 equal to the amount otherwise due under Section 7.03, less Five Million ($5,000,000) Dollars. Liquidated damages due under this Section 704.2 shall be payable as follows: if the Taylor Partnership sells and conveys the Team, and the purchase price paid to the Taylor Partnership is paid in cash or immediately available funds, then the entire amount of liquidated damages due under this Section 7.04.2 shall'be?paid in cash not later than thirty (30) days from the date of the sale and conveyance. b. If the Taler Partnership sells and conveys the Team, and the purchase price paid to the Taylor Partnership is paid in installments, then the balance of liquidated damages due shall be paid in three (3) equal annual installments (or, if the purchase price installments are paid in a period less 956 0323195 1:4Qam 26 than three years from the date of sale and conveyance of the Team, in equal annual installments such that the entire balance of liquidated damages is paid upon the payment of the last installment of the purchase price). If the Taylor Partnership does not sell and convey the Team but causes the Team to cease playing its Team Games at the Arena, then the payment of liquidated damages shall be paid at the time and in the manner set forth in Section 7.0.3.. If liquidated damages due under this Section 7.04.2 are not timely paid or any installment thereof is not timely paid, interest at the Prime Rate shall accrue and be payable for the period from the date when due until fully paid by the Taylor Partnership. Section 704.3 MASC Appropriation. Ifwith respect to any Arena Year, the State of Minnesota does not fully appropriate the sum of Seven Hundred Fifty Thousand ($750,000) Dollars for application by MASC for the payment of the MASCI use of the Arena, as and for the period contemplated in Minnesota Statutes 473 .556, subd. then the Taylor Partnership shall have the right to give the notice to MCDA provided for in Section 7.04.1 without regard to whether the Taylor Partnership has suffered Extended Net Team Operating losses. Such notice may be given in any Arena Year in which the apprOpriation would, but for the failure to appropriate, otherwise be payable to MASCI. lf notice is not given within sixty (60) days following the close of that Arena Year, it may not thereafter be given by the Taylor Partnership, except upon the occurrence of an additional, subsequent failure by the State of Minnesota to fully appropriate. The notice also may not be given if the difference between Seven Hundred Fifty Thousand ($750,000) Dollars and the amount appropriated is funded by the City, MCDA or any other public person or by any private person within the Arena Year under consideration, so that there occurs no default in payment. of the debt service obligations with respect to the Bonds. lf notice is given by the Taler Partnership under this Section 704.3, MCDA and the Taylor Partnership shall have the rights and obligations with respect to the option as prOvided for in Sections 7 04.1, 7.06, and 7 .07 as if Extended Net Team Operating Losses had occurred and unless the Team is purchased by MCDA or its assignee, liquidated damages shall net be payable as provided in Section 7.04.2. The rights of the Taylor Partnership to give notice under this Section 704.3 shall expire when the bonds issued by" the Metrbpolitan Council- for the Hubert H. Humphrey Metrodome have been fully paid and retired. MCDA shall exercise its best efforts to encourage the State of Minnesota to make the full appropriation on behalf of 03/23/95 1:49am 27 as and for the period contemplated in Minnesota Statutes 16(b)(2) or a substitute state legislative appropriation to make up any appropriation of less than Seven Hundred Fifty Thousand ($750,000) Dollars. Section 7.04-4 Rights and Remedies in the Event Property Taxes Exceed Proiec?tions.. The Taylor Partnership and the Operator expect that the aggregate property taxes imposed ?on the Taylor Partnership and the Operator with respect to their respective interests in the Arena will not increase by more than two percent (2 per annum compounded annually. (The term "imposed" with respect to property taxes for. any year or years as used in this subsection of- this Section 7 04.4 means the property taxes actually and ?nally payable by law in the year or years under consideration after the Taylor "Partnership has exhausted all rights to contest or appeal market valuations or the rate or amounts of the tax, as it may elect, and actually paid at the time under consideration.) The Taylor Partnership may elect to give notice to MCDA in accordance with the terms of subsection of this Section 7.04.4, if the Taylor Partnership desires to cease playing Team Games in the Arena and if, in any consecutive five (5) year period during the Term of the Team Use, the sum of the prOperty taxes imposed on the Taylor Partnership with respect to any and all Arena leases and uses exceeds the sum of the property taxes that would have been imposed during such five (5) consecutive years on any and all Arena leases and uses if such property taxes had increased at the rate of two percent per annum, compounded annually. The Taylor Partnership may be reimbursed for a portion or all of the property taxes by any other persons including persons who are lessees, sublessees or users of the Arena or such taxes may be paid directly by such persons. However, if and to the extent that the Taylor Partnership is reimbursed by such other persons or the property taxes are paid directly by such other persons, to the extent thereof, the property taxes shall not be deemed to have been imposed on the Taylor Partnership for purposes of this subsection of this Section 7.04.4. Property taxes imposed in- 1995 shall be disregarded for all purposes relevant to this subsection of this Section 7.04.4 and property taxes imposed in 1996 shall be considered only for the purpose of measuring increases that may occur in property taxes imposed in 1997 and for the succeeding four (4) years. Taylor Partnership may give the notice to MCDA provided for in subsection if permitted by the terms of subsection of this Section 7.04.4. The notice must be given, if at all, within one hundred twenty (i 20) days following the last day of the fifth (5th) calendar year 0323/95 1:49am 23 that comprises the five (5) year period in which property taxes have exceeded the projections provided for in subsection provided, however, upon written request by the Taylor Partnership to MCDA, MCDA may, in the exercise of its sole discretion, extend the notice period as it may wish. If the required conditions which permit the Taylor Partnership notice have occurred and the Taylor Partnership does not give the notice within the periOd provided for in the preceding sentence, then the notice cannot thereafter be given with respect to any five (5) calendar year period that includes the first (1 st) year of that five (5) year period. By the notice, "the Taylor Partnership shall grant to MCDA the option to purchase provided for in this subsection of this Section 7.04.4. If the Taylor Partnership gives the notice, the MCZDA or an assignee shall have the option, for the one (1) year period commencing on the date of receipt of such written notice (the "Option Period"), to purchase the Team from the Taylor Partnership at a purchase price equal to Eighty-Eight Million Five Hundred Thousand ($88,500,000) Dollars, increased by three percent for each full Arena Year (or a fraction thereof if less than a full Arena Year) elapsing between the Commencement Date and the date of the closing of the Team purchase by the MCDA, compounded annually. The option of the MCDA to purchase the Team from the Taylor Partnership shall be exercised, if at all, during the Option Period and the payment of the purchase price of the Team shall be in immediately available funds and the transfer of title to the Team shall occur not later than the last day of the Option Period. The Team shall be transferred free and clear of all liens, encumbrances and security interests of any kind (other than the Taylor Partnership?Ogden Agreement which the Agency or its assignee shall assume, subject to Section 4.09) and the. Taylor Partnership shall execute documents of conveyance, containing such representations and warranties as are customary in such asset sale transactions. The option to purchase the Team under this Section 704.4 shall be assignable by the MCDA as provided in Section 7.06.. The parties acknowledge and mutually represent to each other that the option granted to MCDA under this Section 7.044 is a valuable right not capable of precise ascertainment. B'y reason thereof and by reason of the property tax circumstances prevailing that give rise to the option, the liquidated damages provided for in Section 7.03 are appropriately reduced by the mutually stipulated value of the option and further, by reason of the property tax risks under the law, as viewed by the Taylor Partnership and assumed by the Taylor Partnership, in entering into this Agreement. Therefore, if the Taylor Partnership notice permitted under Subsection of this Section 7.04.4 has been given and the option is not exercised by MCDA or its assignee, and the .956 0323195 1:493111 29 Taylor Partnership thereafter breaches its covenants to play the Team Games in the Arena as provided in Section 7.01 or in a replacement venue as provided in Section 7.02, then MCDA shall not have the right to injunctive relief or speci?c performance as provided in Section 7.03 and liquidated damages shall be due, not in the amount provided in Section 7.03 but in the following-amount: Thirty Million Dollars ($30,000,000) reduced by One Million Five Hundred Thousand Dollars ($1,500,000) for each of the ?rst ten (10) complete Arena Years during which the. Team Games are played at the Arena as provided in Section 7.01 or, if not played, are played in compliance with. the provisions of Section 7.02, and Fifteen Million Dollars throughout the remaining Term of the'Team Use. I The liquidated damages shall be paid by the Taylor Partnership in immediately available funds in a single payment and not later than ninety (90) days from the date of the breach of the covenants in Section 7.01 or 7.02.. If not timely paid, interest at the Prime Rate shall accrue and be payable on the amount of the liquidated damages due for the period from the date the liquidated damages are due until fully paid by the Taylor Partnership. Section 7.05 Enforcement of Remedies. The City and MCIDA, either or both of them, shall be proper parties for the equitable enforcement of this Agreement and the enforcement of any claim for liquidated damages against the Taylor Partnership. Section 7.06 MCDA Assignment of Options. The option of MCDA granted in Sections 7.04.1, 704.3 and 704.4 may be assigned by MCZDA but only to a person who agrees to play Team Games in the Arena as MCDA may, in its discretion, require and to assume and perform the obligations of the Taylor Partnership under the Taylor Partnership-Ogden Agreement or cause a release of the Taylor Partnership from its obligations thereunder. Whether or not the assignee of MCDA assumes the obligations of the Taylor Partnership under this Agreement, if the Assignee purchases the Team, the Taylor Partnership shall not be deemed to be in breach of Sections 7.01 or 7.02 and shall not be obligated to pay the liquidated damages provided for in Sections 7.03, 7.04.2, 704.3 and 7.04.4. Section 7.07 Effect of Options. If MCIDA or its assignee exercises the option granted in Sections 7.04.1, 7.043 or 7.04.4, the Taylor Partnership shall have no liability to the City and MCDA for the payment of liquidated damages. Otherwise, the grant of the options in Sections 7.04.1, 704.13 and 7.044 shall not excuse the Taylor Partnership from its covenants and representations as set forth in this Article VII of this Agreement. 03/213195 1:49am 30 Section 7.08 Conditions to Receipt of Liguidated Damages. The MCDA shall not'have the right to receive any payments from the Taylor Partnership under the terms of Sections 7.03, 7 .042, 7.04.3 and 7.04.4, and shall not accept any payment from the Taylor Partnership under Sections 7.03, 7.0412, 7.04.3 and 7.04.4 unless the MCZDA has first obtained an opinion of a nationally-recognized bond counsel to the effect that the receipt and acceptance of such payment will not cause interest on the Bonds to be includable in the gross income of the owners of the Bonds for purposes of federal income taxation. The inability or" refusal of the MCDA to accept the liquidated damages in accordance with the terms of this Section 7 .08 shall not permit the MCDA to apply for or exercise its rights of speci?c performance or injunctive relief under Section 7.03, but MCDA shall not be precluded from seeking such actual damages under law as it may establish in an action at law but, in any case, not in an amount greater than the liquidated damages, payable under whichever of Sections 7.03, 7.04.2, 7.04.3 or'7.04.4 may be applicable. I Section 7.09 Condition to MCDA Exercise of Options. The MCDA. shall not exercise its option to purchase the Team from the Taylor Partnership under Sections 7.04.1, 7.04.3 and 7.04.4 unless the MCDA has ?rst obtained an opinion of a nationally?recognized bond counsel to the effect that the purchase of the Team from theTaylor Partnership at the purchase price established by the terms of Sections 7.04.2, 7.04.3 and 704.4 (or at the purchase price otherwise agreed to by the MCDA and the Taylor Partnership) will not cause interest on the Bonds to be includable in the gross income of the owners of the Bonds for purposes of federai income taxation .. Section 7.10 Due Diligence Rights During Option Periods- During an Option Period as provided in Sections 7.04.1, 704.33 and 7.04.4, MCDA or its assignees shall have the right to inspect the financial statements of the Taylor Partnership and its books and records, if by MCTDA, subject to the representations and con?dentiality provisions of Section 20.06 of this Agreement and, if by its assignees, subject to such reasonable con?dentiality assurances as the Taylor Partnership may request. ARTICILE TRANSFERS BY, BUSINESS ACTIVITIES OF THE TAYLOR PARTNERSHIP Section 8.01 "Transfer?, as used in this Article in whatever form, number or tense, means, as the case may be, to assign, sell, convey, transfer, pledge, encumber or in any manner .956 03:23:95 1:4Sam 31 use as collateral, or otherwise, to diSpose of voluntarily or involuntarily or to cause any of the foregoing by merger, consolidation or dissolution by operation of law. Section 8.02 Limitation on Transfer. This Agreement and any right, title or interest herein enjoyed by the Taylor Partnership may be Transferred by the Taylor Partnership only in accordance with the terms and conditions of this Article Section 8.0.3 Permitted Transfers to Team Owner. This Agreement and the Team or any of the material assets and operations as comprise the Team on the date of the closing of the Team purchase by the Taylor Partnership (or thereafter, as are commonly deemed material assets or operations attributable to an NBA franchise) may be Transferred by the Taylor Partnership to . any other person or persons, who individually or in the aggregate become the owner of One Hundred (100%) percent of the Team, only if the following conditions precedent are satisfied in a manner and form approved by MCIDA which approval rights shall be exercised reasonably: 8.0.3.1 The transferee or transferees shall assume all of the obligations of the Taylor . Partnership to MCJDA and City as provided in this Agreement and under the Taylor Partnership- Ogden Agreement; 8.03.2 The transferee or transferees shall have received such approvals from the NBA as may be necessary to own the Team and to permit the transferee to play the Team Games in the Arena or elsewhere as provided herein; 8.03.3 The transferee or transferees shall have provided to MCDA such information as they may deem necessary and appropriate to confirm that the transferee has or has available to it sufficient ?nancial resources to perform its obligations as the owner of the Team, including the terms and conditions of this Agreement; and 8.0.3.4 The Taylor Partnership or the transferee (or transferees) shall have cured all defaults or breaches under this Agreement having occurred prior to and pending at the time of the transfer. Upon a Transfer whiCh MCDA has approved pursuant to this section 8.03, the Taylor Partnership shall be released from all obligations and liabilities arising under this Agreement from and after the effective date on which the permitted transferee has assumed said obligations and liabilities, including all liability for payment of liquidated damages hereunder not accrued or payable on the effective date of the Transfer. Section 8. .04 Pledge of Agreement. The Taylor Partnership may grant a security interest in, pledge or collaterally Transfer this Agreement or its right, title and interest in this Agreement 03/23195 1:49am 32 to a commercial, institutional lender as additional security for a senidr priority loan the proceeds of which have been used by the Taylor Partnership to acquire (or refinance a loan used to acquire) the Team and to secure which the Taylor Partnership has also pledged the Team. In connection with such security interest, pledge or collateral assignment, MCSDA and the commercial institutional lender will enter into such commercially reasonable. arrangements as may be mutually agreed upon, including but not limited to customary notice and cure rights. However, the rights of the lender as secured party shall be subject in all respects to this Agreement and in particular but without limitation, the Secured party shall be prohibited from any Transfer of the Team separately from the Taylor Partnership?s rights, obligations and liabilities under this'Agreernent, which obligations and liabilities shall continue to be binding upon the lender as secured party and any transferees of the lender as secured party. In no event shall the Taylor Partnership subject right, title and interest, respectively, in the Arena, the Health Club and the Target Center Real Estate to any such pledge or assignment. Relevant parts of the documents evidencing and securing the coilateral assignment of this Agreement or any right, title or interest herein, shall be Submitted to counsel for MCJDA not less than five (5) days prior to their execution by the lender and the Taylor Partnership. Section 8.05 Limitations on Business Activities of the Tavlor Partnership. Throughout the Term of the Team Use, the assets, the business operations and activities of the Taylor Partnership and any transferee of the Taylor Partnership shall be limited to the ownership and operation of the Team and the assets comprising the Team; provided, however, if the Taylor Partnership elects, it may in addition, engage in other sports and entertainment activities at the Arena and undertake the activities of the Operator of the Arena as contemplated in this Agreement and in the Operating Agreement. Section 8.06 NBA Approval Rights. MCDA acknowledges that NBA rules currently in effect provide (and unless amended by the NBA, will provide) that any transfer of the Team is subject to approval by the NBA Board of Governors, whether to MCDA, an assignee of MCDA or others. If MCDA or its assignee has an option to purchase the Team, as provided in Sections 7.04.1, 7.04.3 and 7.04.4, then and throughout the Option Period (as de?ned therein), the Taylor Partnership shall, in good faith, cooperate with" or its assignee in the process of its or their application for approval by the NBA Board of Governors, if any be required at the time the Option Period arises. .956 - 03123195 1:49am 33 ARTICLE IX TAXES The Taylor Partnership shall pay when due all federal, state and local'taxes arising from its tenancy or use of the'Arena and the conduct of its business, as provided by governing law. The provisions of Article VI address Arena property taxes. The Taylor Partnership may, in good faith, contest the assessment or collection of taxes. If the Taylor Partnership, by its failure to pay taxes, permits any tax lien attributable to delinquent taxes to attach to the Arena, the Health Club, the Target Center Real Estate, or the interests of the Taylor Partnership grantEd under this Agreement or said property or interests are levied upon under execution or be attached by process of law, an event of default shall be deemed to have occurred under this Agreement and, at its election, MCDA may terminate Taylor Partnership?s rights to possession under this Agreement unless the Taylor Partnership contests the same or the validity thereof in good faith and with due diligence by appropriate legal proceedings which shall have the effect of preventing the enforcement of such execution or attachment. I ARTICLE CAPITAL IMPROVEMENTS Section 10.01 Obligations to Make Capital Improvements. General Obligations to Make Capital improvements. MCDA shall at its own expense make all Capital Improvements to the Arena which the law requires in order to keep the Arena open to the public for hockey and basketball games, entertainment events and the other purposes for which the Arena has been historically used as of the Commencement Date ("Historical Uses?). MCDA will also make all Capital Improvements necessary to maintain the structural integrity of the Arena. MCDA's obligation under this'subsection of this Section 1001 shall include an obligation to replace, as they wear out, those mechanical and electrical systems necessary to keep the Arena open to the public for Historical Uses including, heating, ventilation, air conditioning, other utilities (including a basic telephone system), elevators, escalators and computer systems used in operating such mechanical or electric systems (but not other computers). MCDA shall also replace the Arena Scoreboard and the movable Arena floor system as such items wear out, provided that MCDA shall not be required to replace either of such items more than once during the Term of the Team Use, and provided further that MCDA shall not be required to replace the Arena scoreboard before 2002.. in making the Capital Improvements required under this subsection of this Section 10.01, MCDA shall consult with 03I23i95 1:49am 34 the Operator and Taylor Partnership as to the standards of quality of the materials and workmanship to be used in making such Capital Improvements; provided that the final determination as to such standards of quality shall be made by in the exercise of its reasonable discretion; and provided further that such standards of quality need not be "state-of- the-art" or equivalent to those used in connection with the original construction of the Arena. obligations under this subsection of this Section 1001 shall not be dependent on thebalance of the Capital Improvements Reserve, as described in subsection of this Section 10.01, I Capital improvements Reserve and Cred its Thereto.. On the Commencement Date, MCDA shall establish the Capital Improvements Reserve. The following credits shall be made to the Capital Improvements Reserve: on the earlier of June 1, 1995 or the date on which the first $500,000 of a state economic development grant dedicated to the Arena is received by MCDA or City, the sum of $500,000; (ii) on July 1, 1996, an amount equal to all Designated Target Center Related Revenues received by MCDA or the City during the period beginning on the Commencement Date and ending on December 31, 1995 (the "Initial Period"), less the $500,000 already credited under paragraph above, and the total of all Designated Target Center Related Costs paid by MCDA or City during the Initial Period; on July I, 1997 and on the same date of each Arena Year thereafter, an amount equal to all Designated Target Center Related Revenues received by MCDA or the City during the previous calendar year, less all Designated Target Center Related Costs paid by MCDA or City during the previous calendar year, Provided, however, with respect to any calendar year, the amount of such credits shall not exceed the amount shovvn on Exhibit 10.1(b) hereto. The Taylor Partnership understands and agrees that the foregoing provisions of this subsection of this Section 10.01 are intended only to establish the method by which MCDA?s'oingationto make Capital Improvements is to be determined, and that nothing in this Agreement shall be construed as a pledge or dedication of any specific revenues for any purpose. The Capital Improvements Reserve may consist only of book entries, and MCDA shall not be required to segregate any funds to correspond to the Capital Improvements Reserve. 0312395 1:49am 35 Reductions to Capital Improvements Reserve. The balance of the Capital Improvements Reserve shall be reduced by for so long as the City Bond Indenture is in effect, amounts equal to amounts transferred from the Capital Improvements Account (as defined in the City Bond Indenture) to the Debt Service Account (as defined in the City Bond Indenture), and applied to the payment of principal or interest on the City Bonds or the MCDA Bonds, as and when such amounts are so applied; (ii) during such time as the City Bond Indenture is not in effect, on July 1 of each Arena Year the amount, if any,-by which the Designated Target Center Related Costs paid by MCDA or City during the preceding calendar year exceeded the Designated Target Center Related Revenues received by City or MCDA during the preceding calendar year, any amounts actually. expended by MCDA for Capital Improvements to the Arena, including Capital Improvements of the type described in subsection of this Section 1001 but excluding the costs of Capital Improvements which are paid for out of insurance proceeds or condemnation awards, as and when such amounts are actually expended, and (iv) at any time such balance is calculated, the then current reasonable reserves established by MCDA for future Capital Improvements of the type described in subsection of this Section 1001, provided that prior to July 1, 1996, the reserves described in this clause (iv) shall not reducethe $500,000 credited to the Capital Improvements Reserve under subsection of this Section 10.01.. The balance of the Capital Improvements Reserve may be negative. I Determination of Reserves for Future Capital Improvements. In determining the amount of reserves for future Capital Improvements of the type described in subsection of this Section 10.01, MCDA will consult with the Operator and the Taylor Partnership as to the need for, purpose, and cost of such Capital Improvements. On or before July 1 of each year MCDA shall prepare its proposed budget for Capital Improvements of the type described in subsection of this Section 10.01 and its proposed reserves for future Capital Improvements of the type described in subsection of this Section 1001, (ii) OperatOr shall prepare its proposed budget for Capital Improvements, and MCDA and Operator shall request the Taylor Partnership to prepare its budget for Capital Improvements. All such budgets shall be distributed to MCDA, Operator and the Taylor Partnership. MCDA shall then meet with Operator and the Taylor Partnership to discuss, review and attempt to reconcile all parties? Capital Improvements budgets and to reach agreement for future Capital Improvements of the type described in subsection of this Section 10.01 .. MCDA may, and upon request of the Operator or Taylor Partnership shall, employ independent third-party professionals (for example, architects or engineers) to assist osizarss 1:49am 36 MCTDA in determining the amount of the reserves for future Capital Improvements, and MCDA shall furnish copies of the reports of any such third-party professionals to the Operator and the Taylor Partnership; provided that ifthe Operator or Taylor Partnership request the services of any third party, they shall each pay a proportionate share of the cost thereof. In determining the amount of the reserves for future Capital Improvements, MCDA shall give consideration to whether the amount of the reserves will impose a material adverse financial or operating detriment to the Operator or the Taylor Partnership, if such reserves result in an insufficient positive balance in the Capital Improvements Reserve for Capital Improvements not of the type described in subsection but reasonably believed by the Operator and/or the Taylor Partnership to be necessary for the operation of the Arena, for the financial viability of the Arena operations or for the presenting of Team Games. If reasonable, good faith attempts to reach agreement are not successful, then on or before August of each Arena Year, the final determination of the amounts of the reserves for future Capital Improvements shall be made by MCTDA, but such determination shall in all events be reasonable. The reserve for future Capital improvements shall at all times be for future Capital Improvements only, it being understood that such reserves shall be reduced as Capital Improvements are actually made. Operator's and Taylor Partnersh ip?s Rights to Request that MCDA Make Additional Caoital Improvements. If the Operator and Taylor Partnership agree between themselves that Capital Improvements in addition to those required to be done by MCDA under subsection of this Section 10.01 ("Additional Capital Improvements") are necessary or desirable, Operator and Taylor Partnership may by joint written notice executed by both of them request that MCDA make Additional Capital Improvements. Such requests shall not be made more than once each calendar quarter'unless the requested Additional Capital Improvements are of an emergency nature. MCIDA shall make such Additional Capital Improvements at its own expense if they can be paid for in full by an amount of money not exceeding the positive balance then in the Capital improvements Reserve, unless MCDA determines that such Additional Capital Improvements (3) would be illegal, would be contrary to public policy of the City, or would expose MCDA or City to a material risk of liability to third parties. Operator and Taylor Partnership may also request that MCDA make Additional Capital Improvements the cost of which exceeds the positive balance in- the Capital Improvements Reserve, but MCDA shall have absolutely no obligation to make any such Additional Capital Improvements. .956 1:4Qam .37 Section 1002 Collaborative Procedures of the Parties Covering Caoital I_rn_provernents and MCDA Rights to Make Additional Capital Improvements. Within ninety (90) days prior to the commencement of each Arena Year, the Taylor Partnership, jointly with the Operator, shall submit to MCDA a list of such Capital Improvements as may be deemed necessary or appropriate for the immediately succeeding Arena Year and for each of the four (4) following Arena Years. The submission shall establish priorities among the various Capital Improvements requested together with such cost estimates as may be available to the Taylor Partnership and the Operator. MCDA may make Additional Capital Improvements at its expense which it determines in its sole discretion are necessary or desirable, provided that, without the prior, written consent of the Taylor Partnership, MCDA Will not make Additional Capital Improvements which, materially increase the operating expense of the Arena to the material detriment of the. Taylor Partnership or otherwise materially impair the Taylor Partnership's rights or materially increase Taylor Partnership?s obligations under this Agreement, without offsetting benefit to the Taylor Partnership (in each case, except as may be reasonably necessary to facilitate the use of the Arena by a Hockey Team for the playing of its home games in the Arena). Before undertaking Capital Improvements, the MCDA will consult with the Taylor Partnership concerning MC DA's proposed Capital Improvements and as to the need for, purpose, cost, scheduling of construction, contractors to be engaged provision for payment thereof and if' and to the extent funds are available to MCZDA from the Capital Improvements Reserve as provided in subsection of Section 10 .01 and if the Taylor Partnership and Operator agree to pay their proportionate share of the expense, will, at the request of the Taylor Partnership and the Operator, first contract for architectural, engineering or other appropriate consultants? studies to confirm the need for, purpose, cost, schedule and operating impacts thereof and shall furnish copies of such studies to the Taylor Partnership and Operator. Provided, however, MCDA may proceed with any Capital Improvement without consultation or engagement of architects and/or engineers and the provision of a study if such Capital Improvements are of an emergency nature or cost in the aggregate less than One Hundred Thousand Dollars Section 10.03 No Contractual LimitatLon. No term in this Agreement shall be deemed to limit the maximum amount MCDA may expend on Capital Improvements to the Arena. I Section 10.04 by Taylor Partnership. The Taylor Partnership may but shall have no obligation to make Capital Improvements to the Arena but only upon the 956 03123195 1:4Qam 38 prior written consent of the MCDA and the Operator. The consent of MCDA shall not unreason- ably be withheld if the following provisions of this Section 10.04 are satisfied. Before making any Capital Improvements to the Arena, the Taylor Partnership must first satisfy MCDA that the proposed Capital Improvements will be depreciable (based on a reasonable estimate of physical life) within the Term of the Team Use remaining on the date of installation. All Capital Improvements made by the Taylor Partnership shall in fact be removable from the Arena and upon termination of this Agreement shall be removed by the Taylor Partnership. The Taylor Partnership shall not voluntarily make Capital Improvements to the Arena (nor permit its sublessees, licensees, contractors or agents to do so voluntarily) unless MCDA has first obtained an opinion of a nationally recognized bond counsel to the effect that the Taylor Partnership?s Capital Improvements will not cause interest on the Bonds to be includable in the gross income of the owners of the Bonds for purposes of federal income taxation .. ARTICLE XI HOCKEY TEAM PROVISIONS Section 1 1 .01 Reservation of Revenues. The Taylor Partnership-Ogden Agreement shall, inter alia, reserve sources of revenue for a Hockey Team which may contract with MCDA or Operator to play its home games in the Arena, including net incremental Private Suite and concession revenues attributable to Hockey Team games, dasher board advertising revenues and ticket revenues attributable to Hockey Team games. If a Hockey Team agrees to play its home games in the-Arena, the parties anticipate that the Hockey Team will pay a share of Arena property taxes based on its proportionate use of the Arena. Section 11.02 Hockey Team - First Negotiating Rights. If the Taylor Partnership has the opportunity to acquire a Hockey Team to play in the Arena or MCDA has the opportunity to attract a Hockey Team to play in the Arena, Taylor Partnership shall give notice thereof to MCDA or MCDA shall give notice to Taylor Partnership, in either case, supported by such evidence as may be available to the party giving notice. Thereafter, MCDA shall ?rst negotiate exclusively with the Taylor Partnership the terms and conditions which would permit a Hockey Team owned by the Taylor Partnership to play its home games in the Arena. Provided, however, if the Taylor Partnership has not entered "into a de?nitive, agreement for the purchase of a Hockey Team or if MCDA, Taylor Partnership and Operator have not entered into a definitive agreement for the use of the Arena by that Hockey Team within one hundred eighty (180) days from the date of the notice, MCDA may thereafter enter into negotiations with any 032395 1:49am 39 other owner or prospective owner of a Hockey Team for the use of the Arena or MCDA may request the Operator to do so. . Section 11.03 Hoc?zy. MCDA shall not, and it shall provide in the Operating Agreement that the Operator shall not contract with a minor league professional hockey team not operating under a franchise of the National Hockey League for. the playing of its?home games in the Arena unless the contract is for a term not exceeding one regular hockey season and the regular hockey season provided for in the contract will commence not later than the commencement of the regular hockey season immediately following the execution of the contract, unless otherwise agreed to in writing by the Taylor Partnership and MCZDA. ARTICLE XII CLUB SEATS If the Taylor Partnership desires to install or make arrangements for specifically designated seating in the Arena Seating Area, commOnly referred to as "club seats", the Taylor Partnership shall submit its proposal to MCZDA together with the consent or approval of the Operator. If the proposal requires the expenditure of funds for Capital Improvements, the provisions of Article shall govern. If no expenditure for Capital Improvements is required by the proposal, then the Taylor Partnership and the Operator may proceed with the proposal, sharing the costs and revenue therefrom as they may decide between them. ARTICLE CONCESSIONS The allocation of rights for the sale of all concessions within the Arena, including food and beverages, merchandise and novelties and publications at all events that may be held in the Arena, including Team Games and other events sponsored by the Taylor Partnership, and the allocation of revenues therefrom shall be determined by the Operator and the Taylor Partnership as provided for in the Taylor Partnership-Ogden Agreement. ARTICLE XIV ADVERTISING AND SPONSORSHIP REVENUES Section 14.01 Team Advertising Revenues. The rights of the Taylor Partnership in .and to the allocation of revenues arising from advertising on or about the Arena shall be determined by the Taylor Partnership and the Operator and provided for in the Taylor Partnership-Ogden Agreement. .956 03:23:95 1:49am 40 Section 14.02 Arena Naming Rights- MCDA hereby grants to the Taylor Partnership the right to name the Arena and the Taylor Partnership shall have the right to name the Arena as provided in this Section 14.02.. The Arena is presently named the ?Target Center" pursuant to that certain Agreement for Sponsorship and Promotion by and between Target Stores, a division of Dayton-Hudson Corporation ("Target") and the Basketball Partnership (the ?Target Agreement") dated as of August 31 1990 and amended July 10, 1994.. Taylor Partnership may assume the obligations of the Basketball Partnership under the Target Agreement and MCDA shall grant such consents as may be appropriate with respect thereto. Any revenues generated by the naming of the Arena and from the Target Agreement shall be allocated between the Taylor Partnership and the Operator and provided for in the Taylor Partnership-Ogden Agree? ment. MCDA has no interest in any revenues from Arena naming rights. Taylor Partnership agrees, and it shall be so provided in the Taylor Pannership-Ogden Agreement, that in the event that the TaylorPartnership, upon the expiration of the term or termination 0f the Target Agreement, desires to change the name of the Arena, the proposed new name (and the terms and conditions of its use) shall first be submitted to MCDA by notice given not less than ninety (90) days before the effective date of the name change. The proposed new name shall be subject to the approval of MCDA. MCDA's approval shall not be unreasonably withheld. approval may not be withheld on the basis that the name is that of a legitimate I commercial enterprise. The approval of MCDA may be conditioned upon the inclusion of Exculpatory Language in the agreement to be executed by the Taylor Partnership with respect to the naming of the Arena. ARTICLE XV ARENA SCOREBOARD, EXTERIOR DISPLAY PANEL AND PUBLIC ADDRESS SYSTEM The Arena Scoreboard, Exterior Display Panel and Public Address System of the Arena shall be under the care, custody, control of and operation of the Operator. The use thereof shall be as agreed upon by the Taylor Partnership and the Operator and provided for in the Taylor Partnership-Ogden Agreement. ARTICLE XVI BROADCAST RIGHTS The Taylor Partnership shall have and retain exclusive broadcast and syndication rights incident to each Team Game, including, but not limited to, radio and television broadcasting, 03123195 1:49am 41 film or tape rights, Closed circuit and pay television broadcasting and similar rights by whatever means or process now existing or hereafter developed for the preservation, transmission, and reproduction of sound and images for hearing or viewing of Team Games. All proceeds from such broadcasts'and reproductions shall be retained by the Taylor Partnership. The Operator shall have each of the foregoing rights with respect to all other events and activities held in the Arena as provided in the Taylor Partnership-Ogden Agreement. ARTICLE XVII INSURANCE AND INDEMNIFICATION Section 17. .01 The Taylor Partnership and the MC DA shall provide indemnification as set forth in this Section 17. 0.1.. 17 01.1 Taylor Partnership 5 Indemnification of MCDA. Taylor Partnership shall indemnify and hold harmless MCDA and its elected officials, commissioners, directors, officials, officers, employees, agents, independent contractors and consultants (irrespective of the termination of this Agreement) for, from and against any and all liabilities, suits, obligations, fines, damages, penalties, claims, costs, charges and expenses (including reasonable attorneys' fees) which may be imposed upon, incurred by or asserted against MCDA or its elected officials, commissioners, directors, officials,o officers, employees, agents, independent contractors and consultants by third parties and arising from any of the following occurring during the Term of this Agreement (except to the extent caused by the negligence or wilful misconduct of MC. DA, its elected officials, commissioners, directors, officials, officers, employees, agents, independent contractors or consultants): from any use, non-use, possession, occupation, alteration, repair, condition, operation, maintenance or management of the Team 5 Leased Premises or any nuisance made or suffered thereon or any failure by Taylor Partnership to keep any part of the Team? 5 Leased Premises in a safe condition, except to the extent caused by the failure of MCDA to make Capital Improvements as required of MC DA under Section 10. .01 of this Agreement, from any acts or omissions of the Taylor Partnership or its employees, agents, licensees, independent cOntractors, or invitees, including without limitation, any failure on the part of the Taylor Partnership to perform or comply with any of the covenants, agreements, terms or conditions contained in this Agreement; from any failure on the part of the Taylor Partnership to keep, observe, comply with and timely perform any of the terms, covenants, agreements, provisions, conditions or limitations contained In any contracts affecting any part of the Arena, except to the extent such failure is caused by a default by MCDA in its obligations under this 1:4Qarn . 42 Agreement or by the actidns of MCDA or its elected officials, commissioners, directors, officials, officers, employees, agents, independent contractors or consultants; from any failure of the Taylor Partnership to include Exculpatory Language in any contract it may enter into concerning or affecting the Arena; from any fire, aCcident, injury (including death) or damage to any person or property occurring in, on or about any part of the Arena which is caused by the Taylor Partnership, its employees, agents, licensees, independent contractors or invitees; and from any lien, claim or other encumb?rance'caused, created or permitted by the Taylor Partnership, its employees, agents, licensees or independent contractors which may be alleged to have arisen against the Arena or any liability which may be asserted against the MCDA with respect thereto. 1 7.01.2 Indemni?cation of the Taylor Partnersl?o. MCDA shall indemnify and hold harmless the Taylor Partnership and its directors, of?cials, officers, employees, agents, independent contractors and consultants (irrespective of the termination of this Agreement) for, from and against any and all liabilities, suits, obligations, fines, damages, penalties, claims, costs, charges and expenses (including reasonable attorneys? fees) which may be imposed upon, incurred by or asserted against the Taylor Partnership or its directors, officials, officers, employees, agents, independent contractors and consultants by third parties and arising from any of the following occurring during the Term of this Agreement (except tothe extent caused by the negligence or willful misconduct of the Taylor Partnership, its directors, officials, officers, employees, agents, invitees, independent contractors or consultants): from MCDA's exercise of its access rights as provided in Section 4.06 hereof; from any acts or omissions of MCCDA or its elected officials, commissioners, directors, officers; employees, agents, licensees, independent contractors, or invitees, including without limitation, any failure on the part of MCDA to perform or comply with any of the covenants, agreements, terms or conditions contained in this Agreement; from any fire, accident, injury (including death) or damage to any person or property occurring in, on or about any part of the Arena which is caused by MCDA, its eleCted officials, commissioners, directors, officers, employees, agents, licensees, independent contractors or invitees; the Bonds; and from any lien, claim or other encumbrance caused, created or permitted by MCDA, its elected officials, commissioners, directors, officers, employees, agents, licensees or independent contractors which may be alleged to have arisen against the Arena or any liability which may be asserted against the Taylor Partnership with respect thereto. 0323/95 1:49am 43 17.01 insurance. The obligations of the Taylor Partnership under this Section 1701 shall not be affected in any way by the Taylor Partnership's failure to maintain any insurance required by Section 17.02.. 1701.4 gains. If any claim, action or proceeding is made or brought against a party hereto (the "Indemnified Party?) as to which the other party (the indemnifying Party") is to indemnify as required by this Article XVII, then upon demand by the Indemnified Party, the Indemnifying Party shall resist or defend Such claim, action or proceeding in the name of the Indemnified Party, if necessary, by the attorneys for the Indemnifying Party?s insurance carrier (if such claim, action or proceeding is covered by insurance), otherwise by such attorneys as the Indemnified Party shall approve, which approval shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, after notice to the Indemnifying Party, the Indemnified Party may engage its own attorneys to investigate the Claim, defend it or to assist? in its defense, however, the Indemnified Party shall pay the reasonable fees and disbursements of such attorneys. Section 17.02 Taylor Partnership Insurance Requirements. The Taylor Partnership shall maintain or cause to be maintained, at its sole cost and expense, insurance with respect to its property, the operation thereof, its use of the Arena and its business against such casualties, contingencies and risks (including, but not limited to, public liability and employee dishonesty) of types and in amounts not less than the following: ?Commercial General Liability Insurance" coverage (Insurance Services Office form title), providing coverage on an "occurrence", rather than on a "claims-made" basis, which policy shall include, but not be limited to, coverage for Bodily Injury, Property Damage, Personal Injury, Advertising Injury, Contractual Liability (applying to this Agreement), Independent Contractors, and Products-Completed Operations Liability, with a combined limit of at least $1,000,000 Each Occurrence, and a deductible (or deductibles) or other retained liability not in excess of $5,000 Each Occurrence. Automobile Liability Insurance covering liability arising out of the ownership, use, maintenance, or operation of all owned, nonowned and hired vehicles, with a combined Bodily Injury and/or Property Damage limit. of at least $1,000,000 per accident, and a liability deductible or other retained liability not in excess of $5,000 per accident. Workers? Compensation insurance in compliance with all applicable laws, together with Employer's Liability Insurance in at least such amount(s) as are customarily provided in Workers? Compensation policies issued in Minnesota. .956 03(23195 1:49am 44 Umbrella (or Excess) Liability insurance responding excess of the above-described Commercial General Liability, Automobile Liability and Employer?s Liability coverages, with an Each Occurrence and, if applicable, Aggregate limit of at least $25,000,000. Broadcaster?s Liability Insurance, with a limit of at least $1,000,000 Each Occurrence. . "All Risk" property insurance, providing coverage on 3 Replacement Cost basis, in an amount equal to the full insurable Replacement Cost of the Taylor Partnership?s leasehold impioVements and personal property located at the Arena, which property insurance may-be subject to a reasonable dedLictible (or deductibles). Employee Dishonesty coverage, in at least the amount of $500,000. The Taylor Partnership shall, before June 1, 1998, and at least once every three Arena Years commencing on or after that date, cause a report of an independent insurance consultant to be delivered to MCDA which indicates that the insurance then being maintained by the Taylor Partnership is customary in the case of prudent persons engaged in the same or similar activities having substantially the same financial condition and similarly situated and is adequate to protect the Taylor Partnership's property, operations, use of the Arena and business. 17.02.] Taylor Partnership Insurance Provisions. All policies of insurance-reouired of the Taylor Partnership hereunder shall be issued by financially-responsible insurers and shall name MCDA and City as additional insured as their interests may appear. Each of such policies shall be endorsed to require that the insurer provide at least sixty days' written notice to MCDA prior to the effective date of policy cancellation or non-renewal. 17.022 Taylor Partnership Evidence of Insurance, Loss Information. At least fifteen (15) days prior to the commencement of each Arena Year, the Taylor Partnership shall provide MCDA with evidence that the insurance coverage. required hereunder will" be in full force and effect as ofthe beginning of such Arena Year. In the event that any such insurance renews or is terminated during an Arena Year, the Taylor Partnership shall provide MCDA with evidence that such insurance will be renewed or replaced upon termination with insurance that complies with the requirements of this Agreement. Evidence of insurance shall be in the form of a standard certificate of insurance and shall contain sufficient information to allow MCDA to determine whether there is compliance with the insurance requirements of this Agreement. 0323195 1:4Qam 45 At the request of MCIDA, the Taylor Partnership shall furnish loss information concerning all liability claims brought against the Taylor Partnership (or any other insured under the Taylor Partnership's required insurance policies), that may effect the amount of liability insurance available under such policy. 7 .02 .3 Taylor Partnership Additional Insurance for Team Events. NOtwithstanding the provisions of this Agreement, MCDA shall have the right to require the Taylor Partnership to ?secure additional insurance with respect to Team Games to the extent to which such insurance is consistent with industry standards or practices at the time, and with respect to events sponsored by the Team other than Team Games, to the-extent to which such insurance is reasonably required to insure against any specific risks associated with such event or is consistent with industry standards for similar types of events. Section 17.0.3 MCDA Insurance Requirements. The MCDA shall cause to be maintained, insurance with respect to its property, the operation thereof, its use of the Arena and its business against casualties, contingencies and risk, of types and amounts provided in Section 16 of the Declaration, which terms of insurance are fully incorporated? herein by reference as if fully set forth herein. The Taylor Partnership acknowledges that, pursuant to the Operating Agreement, the Operator shall maintain insurance in the amounts and on the terms described therein and in the Declaration, and shall perform and be responsible for the obligations of the "Arena Owner" under Section 16 of the Declaration and of MCDA .under'this Section 17.03.. Upon the request of the Taylor Partnership, MCDA will provide to the Taylor Partnership copies of then current All Risk and Boiler and Machinery insurance policies covering the Arena. Section 17.04 In General. Insurance terms not otherwise defined in this Agreement shall be interpreted consistent with insurance industry usage. Section 17.05 Governmental Immunity. in this Agreement, MCZDA does not waive any statutory immunity from municipal tortliability available to it under Minnesota Statutes, Chapter 466,. or any other Minnesota Such statutory immunity shall apply whether an action, claim, demand or lawsuit is initiated by the Taylor Partnership or by any third party. Section 17.06 Cooperation Regarding Risk Management. Each party agrees to cooperate fully with the other in providing such insurance underwriting and other information as may be necessary or appropriate to obtaining and maintaining the insurance .956 1:49am 45 described herein. The parties further agree to cooperate with the insurance companies and agents by responding to their reasonable requests. I ARTICLE OTHER DEFAULT PROVISIONS, LIMITATION OF REMEDIES Section 18.01 I MCDA Defaults. Termination of this Agreement ?shall not be a remedy for any default by MCTDA and, upon any MCSDA default or breach of this Agreement the Taylor Partnership may pursue a claim for money damages, as provided in Article XXI or may pursue the equitable remedy of Specific performance against MCDA for the enforcement of this Agreement as may be available under applicable law or equitable powers of the court. Termination of this Agreement pursuant to Section 7.02 by. either MCDA or the Taylor Partnership shall not be deemed a default- The Taylor Partnership specifically agrees that, except if the notice of option is given as provided in Sections 7.04.1, 7.04.3 and 7.04.4 and the option is not exercised by MCDA, MCDA may pursue and be granted equitable remedies against the Taylor Partnership for the enforcement of this Agreement or to enjoin the Taylor Partnership from declaring MCDA in breach and terminating this Agreement, notwithstanding that MCDA may have an adequate remedy at law in a suit for damages against the Taylor Partnership. In the event MCJDA or the Taylor Partnership exercises its rights to terminate as provided for in Section 7.02 and this Agreement is terminated, the Taylor Partnership and MCJDA shall not be deemed to have waived any rights or causes of action which it may have at law against the other for damages (whether consequential or otherwise) arising from any action or failure to act occurring prior to the effective date of the termination, provided that the Taylor Partnership shall not be obligated to pay liquidated damages as provided under Sections 7.03, 7.04.2, 7.04.3 and 7.044 if the right to terminate under Section 7.02 has arisen and been exercised before the obligation to pay liquidated damages has accrued. This Agreement shall continue in full force and effect despite and during the pendency of any procedure or litigation allowed under this Section 18.01 as provided in Article XXI and at all times thereafter until declared terminated by the highest court of appeal to which it is presented and all further appeal rights have expired or been denied. Section 18.02 Taylor Partnershio- Defaults. lf MCDA declares the Taylor Partnership in breach of its covenants under Article of this Agreement, and relief by way of injunction or specific performance as contemplated in Section 7.03 has not been granted to MCDA, the liquidated damage provisions of Sections 7.03, 7.04.2, 7.04.3 and 7.044 shall .956 0323195 1:49am 47 apply. However, MCDA shall "not be obligated to declare the Taylor Partnership in breach and may in lieu, pursue the claim pursuant to Article XXI. Failure of MCDA to declare the Taylor Partnership in breach when the Taylor Partnership ?rst breaches "its covenants under Article VII, shall not prohibit MCDA from subsequently declaring the Taylor Partnership to be in breach of this Agreement. Failure of MCTDA to declare the Taylor Partnership in breach on previous occasions of breach under Article VII shall not prohibit MCDA from declaring the Taylor Partnership to be in breach of this Agreement on subsequent occasions of breach. This Agreement shall continue in full force and effect despite and during the pendency of any procedure or litigation allowed under this Section 18.02 and as provided in Article XXI and at all times thereafter until declared terminated by the highest court of appeal to which it is presented and all further appeal rights have expired or been denied; provided, however, the- Taylor Partnership shall vacate the Arena and remove the Taylor Partnership Equipment and any Arena Capital Improvements made by the Taylor Partnership not later than thirty (30) days following the last Team Game which it is permitted to play in the Arena if this Agreement is terminated, the Taylor Partnership breaches its covenants under Sections 7.01 and 7.02, MCDA or its assignee exercises its optionto purchase the Team as ovided in Article VII, or the Term of the Team Use expires, restoring the Team's Leased Premises to the condition existing on the Commencement Date, reasonable wear and tear excepted. In addition, MCDA may enter upon and repoSsess the Team's Leased Premises (and such other portibn of the Arena as may be in the possession of the Taylor Partnership) by appropriate legal proceedings (including unlawful detainer under Minnesota Statutes, Chapter 566) and may remove the Taylor Partnership and all other persons and property therefrom. Section 18.03 Insolvency, Bankruotg, Upon the filing by the Taylor Partnership of a voluntary petition in bankruptcy or its adjudication as a bankrupt, the insolvency of the Taylor Partnership (but only if the Taylor Partnership does not or is unable to pay its debts as they become due)? or the filing by the Taylor Partnership of any petition or answer seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolu- tion or similar relief under any present or future federal, state or other statutes, law or regulaticin relating to bankruptcy, insolvency or other relief for debtors, or if the Taylor Partnership seeks or consents to or acquiesces in the appointment of any trustee, receiver or liquidator for itself or its property, or makes any general assignment for the benefit of creditors, or if the Taylor Partnership admits in writing its inability to pay its debts generally as they become due shall .956 03I23I95 1:4Qam 43 constitute a breach of this Agreement, then the foregoing shall constitute a notice of option to purchase as provided for in Section 7.04.1 and MCDA or its assignee shall have the right to exercise the option granted to MCIDA in Section 7.04-1 during the option period provided for therein as if all the conditions thereto have been satisfied and if the option is exercised, the purchase price to be paid for the Team shall be the amount as calculated in Section_7__..04.1 . Section 18.04 Cumulative Remedies. The remedies afforded MCDA under this Article for a breach by the Taylor Partnership of its covenants are in addition to the remedies provided for in Article VII with respect to the covenants therein contained. ARTICLE XIX AFFIRMATIVE ACTION The Taylor Partnership shall at all times be in full compliance with all applicable federal and state laws governing employment. The Taylor Partnership shall develop and maintain an affirmative action plan. The Taylor Partnership will also have and maintain a written policy prohibiting any form of illegal harassment, including, but not limited to, sexual harassment in the workplace. ARTICLE XX REPRESENTATIONS, WARRANTIES AND OTHER COVENANTS Section 20.01 MCDA Representations. Warranties and Covenants. MCDA represents, warrants and covenants to the Taylor Partnership the following: .. 2001.1 _A_utho_ri?. MCDA has full power and authority to enter into this Agreement, and the execution, delivery, and consummation of this Agreement by MCDA has . been duly authorized by all necessary MCDA action. The Finance Officer and the Deputy Executive Director of MCDA are the individuals duly authorized to execute this Agreement on behalf of MCDA, and have so executed this Agreement. 2001.2 No Conflicts. Except as disclosed to the Taylor Partnership in Exhibit 20012, if any, the execution, delivery and performance of this Agreement, is not prohibited by and does not conflict with any other agreements, instruments, Judgments or decrees to which MCDA is a party or is otherwise subject. 20013 No Violation of Laws. Neither the execution, delivery nor performance of this Agreement by MCDA violates or will violate any ordinance or resolution of MCDA. MCDA has?received no notice as of the date of this Agreement asserting any noncompliance in any material respect by MCDA with applicable statutes, rules and regulations of the United 03l23195 1:49am 49 States of America, the State of Minnesota, the City or of any other state or municipality or agency having jurisdiction over and with respect to the transactions contemplated in and by this Agreement; and MCDA is not in default with respect to any judgment, order, injunction or decreeof any court, administrative agency, or other governmental authority which is in any respect material to the transaction contemplated hereby. 2001.4 Litigation. No suit is pending before or by any court or governmental body against MCDA seeking to restrain or prohibit, or seeking damages or other relief in Connection with, the execution and delivery of this Agreement or the consummation of the transaction contemplated hereby or which might materially and adversely affect the use and operation of the Arena as contemplated herein. 2001.5 Arena Possession and Title. The rights of the Taylor Partnership pursuant to this Agreement, and the Taylor Partnership's peaceful use and quiet enjoyment of the Arena as provided in this Agreement, shall not be diminished, impaired or disturbed in any way by any lien, encumbrance, easement, right?of?way, covenant, condition, restriction, defect, invalidity or any other matter adversely affecting MCDA's rights of possession in, or title to, the Arena and the Target Center Real Estate or by any other insuf?ciency, limitation, restriction or defect in the rights of MCDA to possess the Arena and the Target Center Real Estate. 2001.6 Environmental Laws- After the Commencement Date and solely with respect to use of the Arena, if any, MCDA shall maintain, keep current and comply in full withany and all permits, consents and approvals required by applicable environmental laws and MCDA shall comply with all environmental laws and shall net conduct or allow any use of or activity on or under the Target Center Real Estate that will violate or threaten to violate any environmental law; provided, however, that MCDA's obligations pursuant to this Section 2001.6 shall not release the Taylor Partnership from any obligations imposed by Section 20.026 of this Agreement. Section 20 .02 Taylor Partnership Representations,Warranties and Covenants. The Taylor Partnership represents, warrants and covenants to MCDA the following: - 2002.1 Organization. The Taylor Partnership is a limited partnership, duly organized and validly existing under the laws of the State of Minnesota and it has all requisite partnership power and authority to enter into this Agreement. 20.022 Authorization: No Violation . The execution, delivery and performance by the Taylor Partnership of this Agreement have been duly authorized by all necessary partnership sse OBIZSIQS 1:49am 50 action and will not violate its limited partnership agreement, the NBA Constitution or Bylaws or any written rule, regulation or policy of the NBA, or result in the breach of or constitute a default under any loan or credit agreement, or other agreement or instrument to which the Taylor Partnership is a party or by which the Taylor Partnership or its properties and assets may bebound or affected. All consents and approvals of any person (including partners of the Taylor Partnership) required In connection with this Agreement have been obtained. Litigation. No suit is pending against the Taylor Partnership which could have a material adverse effect upon the Taylor Partnership 5 performance under this Agreement or the financial condition or business of the Taylor Partnership There are no outstanding judgments against the Taylor Partnership. 20.02.11 ?gConflicts. Except as disclosed in Exhibit 20 0.2. 4, if any, the execution delivery and performance of this Agreement by the Taylor Partnership is not prohibited by and does not conflict with any other agreements, instruments, judgments or decrees to which the Taylor Partnership is a party or is otherwise subject. 2002.5 NoViolation of Laws. The Taylor Partnership has received no notice as of the date of this Agreement asserting any noncompliance in any material respect by the Taylor Partnership with applicable statutes, rules and regulations of the United States of America, the State of Minnesota, or of any other state or municipality or agency having jurisdiction over and with respect to the transactions contemplated in and by this Agreement, and the Taylor Partnership is not in default with respect to any judgment, order, injunction or decree of any court, administrative agency, or other governmental authority which is in any respect material to the transactions contemplated hereby. 2002.6 Environmental Covenants. From and after the Commencement Date the Taylor Partnership shall maintain, keep current and comply in full with any and all permits, consents and approvals required by environmental laws with respect to its use of the Arena and the Taylor Partnership shall comply with all environmental laws with respect to its use of the Arena and shall not conduct or allow any use of or activity in the Arena, on or under the Target Center Real Estate that will violate or threaten to violate any environmental law; provided, however, that the Taylor Partnership?s obligations pursuant to this Section 2002.6 shall not release MCDA from obligations otherwise imposed by Section 20.01.15 unless the Taylor Partnership receives any written noti?cation from any governmental authority or any third party regarding any material noncompliance or threatened or potential material noncompliance with .956 1:4Qam . 51 or any request for information pursuant to any environmental law and fails to provide notice thereof to 20.02.? Iotal Secured Debt. At the Commencement Date, the total of all secured debt on the Team and the Taylor Partnership's interest in this Agreement shall not exceed Forty- Five Million Dollars 000, 000). 20.0.2.8 Periodic Reports of the Taylor Partnership. Within thirty (30) days following the completion of each calendar year quarter, the Taylor Partnership shall provide to MCIDA a written report showing paid attendance and gross ticket revenues received by the Taylor Partnership with respect to Team Games played in the calendar quarter and the Taylor Partnership?s gross sales of concessions and novelties, if any, within that calendar quarter, certified by the chief financial officer of the Taylor Partnership. The data so provided shall be subject to the representations of the Taylor Partnership and the covenants of MCDA with respect to confidentiality as provided in Section 20.06 of this Agreement. Section 2002.9 Cooperation Between MCDA and Taylor Partnership. At any time during the Term of the Team Use, the MCDA or the Taylor Partnership may request a meeting to review economic trends that may materially impact the operations of the Arena or the Team and confer as to the means of appropriately dealing with such trends. Further, the Taylor Partnership shall cooperate with the MCDA in seeking legislation to provide long-term financial stability for both the Arena and the Taylor Partnership?s operation of the Team which would facilitate the retention of major league professional basketball in Minnesota. Section 20.02.10 State Grant Reguirements. Taylor Partnership acknowledges that MCDA and the City are expecting to receive certain economic development grants from the State of Minnesota with respect to the Arena (the "State Grants"), and that receipt of the State Grants is material to MCDA's and the City 5 decision to purchase the Arena and enter into this Agreement. To assist MCDA and the City in obtaining the State Grants, the Taylor Partnership agrees that during the Term of the Team Use, it will: use its best efforts to retain or provide not less than ?fty (50) full time- equivalentjobs (the "Jobs Goal") in connection with its operation and management of the Arena, with the understanding that such jobs may be provided through direct employ- ment or through use of independent contractors; and upon request of MCTDA, the City or the State, provide to the State at least semi?annually through the year 2,000, a report stating, in format acceptable to the 03:23:95 1:4Qam 5 2 State, the actual number of full-time-equivalent jobs provided by the Taylor Partnership in connection with its use of the Arena, and (ii) if such number is less than the Jobs Goal, describing the efforts the Taylor Partnership is making to achieve the Jobs Goal. Section 2003 Additional Documents and Aooroval. A memorandum briefly summarizing the principal rights and obligations of the parties under this Agreement, in recordable form, will, at the request of either party, be executed by the parties and acknowl- edged and may be recorded by either party with the Registrar of Titles, Hennepin County, MinnesotaMCDA and the Taylor Partnership shall, whenever and as often as each shall be reasonably requested to do so by the other party, execute or cause to be executed any further documents, take any further actions or grant any further approvals as may be necessary or expedient in order to consummate the transactions provided for in, and to carry out the purpose and intent of this Agreement and the Operating Agreement. Section 20.04 Good Faith. in exercising its rights and fulfilling its obligations under this Agreement, the MCDA and the Taylor Partnership shall act in good faith. Each party acknowledges that this Agreement contemplates cooperation between them. MCDA is acting pursuant to certain governmental powers granted by the Charter of the City and other laws which are not susceptible to contractual limitation. Each party further acknowledges that the terms and conditions of this Agreement have been negotiated on the basis of certain projections and assumptions, including the assumption that MCDA and the Taylor Partnership will act to advance, and not unreasonably interfere with, the public purposes to be served by the Arena itself and the retention of the Team for the playing of Team Games in the Arena and the consequent furtherance of the redevelopment and revitalization of the downtown Minneapolis warehouse area and the maintenance and promotion of jobs and public revenues resulting therefrom. Therefore, each party agrees that in meeting its obligations under this Agreement, it will take into account these factors and all relevant facts at the time of performance. Section 20.05 Survival of Covenants and Warranties. All covenants, representa- tions and warranties contained in this Agreement shall survive the execution and delivery of this Agreement and the Taylor Partnership?s exercise of its permitted use of the Arena from and after the Commencement Date. No action taken pursuant to or related to this Agreement, including, without limitation, any investigation by or on behalf of a party shall be deemed to constitute a waiver by the party taking such action of compliance with any representation, warranty,? condition or agreement herein. . .956 0323/95 1:493m 53 Section 20.06 Confidential Data. Pursuant to this Agreement, the Taylor Partnership will provide to MCDA certain data which it desires to be treated confidentially as trade secrets data as defined in the Minnesota Government Data Practices Act, Minnesota Statutes, Section 13.01 et seq. (the "Data Practices Act"), to wit, the data to be provided pursuant toSection 20.02 .8 of this Agreement (the "Confidential Data"). The provisions of subsections I through of this Section 2006 shall apply to the Confidential Data. (at) Beoresentations of Taylor. Partnership. The Taylor Partnership does hereby represent and warrant to MCDA and City that the Confidential Data does constitute data, including but net limited to a compilation, program, method or process to be supplied the Taylor Partnership to MCDA or City, (ii) which is the subject of efforts by the Taylor Partnership that are reasonable under the circumstances to maintain their secrecy, and that derive independent economic value, actual or potential, from not being generally known to and not being readily ascertainable by a proper means by other persons who can obtain economic value from its disclosure or use. MCDA and City Assurances. Based on the foregoing representations and warranties, the MCDA shall and shall cause the City to keep confidential the Confidential Data delivered to MCDA pursuant to this Agreement and marked "Confidential" and shall not duplicate, distribute or disclose such data except as provided in this Section 20.06.. All Confidential Data shall be delivered to legal counsel designated by MCDA and reasonably acceptable to the Taylor Partnership to be held by such counsel pursuant to this Agreement. Counsel may permit the chief financial officer of the City and MCDA toinspect the Confidential Data, to make notes based on his or her inspection (which notes shall be Confidential Data) and to discuss the substance thereof with elected officials of the City and executive employees of City and MCDA who must be acquainted with the Confidential Data to conduct their of?cial duties, but only upon execution of an acknowledgment that the City and MCDA are bound by this Section 20.06 of this Agreement and that the Act imposes penalties and damages on the public distribution of nonpublic data. There shall be no general distribution of the Confidential Data to other MCDA or City personnel. MCDA counsel shall have no ?nancial or pecuniary liability to the Taylor Partnership under this Section 20.06 of this Agreement and shall be responsible solely to MCDA for the treatment of the Confidential Data as provided herein. Counsel to MCDA will be acquitted of any future responsibility hereunder by .956 0323195 1:49am '54 the delivery of the Confidential Data to a person employed by the City or MCDA approved by the Taylor Partnership and if the Taylor Partnership refuses to approve any such person within thirty (30) days of counsel?s request, to such person employed by City or MCDA as counsel may select. Treatment of Red uests for Data. Except as prOvided in Subsection if any person asks to inspect or copy any document which contains the Confidential Data subject to this section 20.06, the MCDA or City shall advise the requesting person that the Con?dential Data is classified nonpublic data under the Data Practices Act as a trade secret and decline to reveal the Confidential Data. If any action is initiated against the MCDA or City seeking to require the release of the Confidential Data or if any motion is made by any other person in any legal proceeding to require release of the Confidential Data, the MCDA shall give notice thereof to the Taylor Partnership and the MCDA shall resist the action or proceeding unless and until an order of a court having jurisdiction thereof requires the release thereof. If the order of a court requires disclosure of the Confidential Data, MCDA shall appeal the order to the highest court of appeal in the State of Minnesota which may hear such appeal but only if the Taylor Partnership requires that the appeal be made. In the event the MCDA or City is ordered by the court (after all required appeals} to disclose the Confidential Data, the City and MCDA shall comply with that order. If that order is based in predominant part upon a finding that the representations and warranties of the Taylor Partnership in subsection of this Section 20 .06 are substantially false, untrue, misleading or not correct at the time under consideration, the Taylor Partnership shall be liable for and pay one-half of the total of the costs of the defense of the action and any appeal thereof incurred by the MCDA or City, (ii) for any damages that may be awarded against the MCDA or City by the court, including attorney's fees and (iv) exemplary damages. .. Other Release of Data. If the MCDA or City determines, acting in good faith and after consultation with the Taylor Partnership, that Con?dential Data has been publicly disclosed by the Taylor Partnership or is otherwise readily ascertainable by other persons by lawful means, the MCDA shall give written notice to the Taylor Partnership and advise them that the Confidential Data shall not thereafter be treated as nonpublic data. However, the MCDA or City shall not thereafter release the Confidential Data to another person until a period of ten (10) business days has expired from the date of the notice. 03123195 1:49am 55 (0 If the Taylor Partnership does not agree with the MCDA or City and gives written notice of that determination to City and MCDA, MCDA or City shall initiate an action in Hennepin County District Court for a determination of the issue by the court. in this action, each party shall bear their own costs and expenses. The parties acknowledge that pursuant to the Data Practices Act (Minn. Stat-5 13.03, subd.. 9) the Confidential Data may be treated as nonpublic as provided herein only if the law applicable to the Con?dential Data when a request for the Confidential Data is made continues to so provide. If at-the time a request is made for the Con?dential Data, the MCDA or City may not classify the Confidential Data as nonpublic by reason of a change in the Data Practices Act, the procedures provided in the foregoing provisions of this Section 2006 shall apply except the City and MCDA shall not be bound to initiate an action in the- Hennepin County District Court and Taylor Partnership may do so if it so elects. If the Confidential Data is material and relevant to any legal proceeding in which? the City or MCDA, on the one hand, and the Taylor Partnership, on the other, are asserting adverse claims, the Confidential Data may be introduced as evidence upon a ruling of the court, applying the standards and procedures provided for in Minnesota Statutes 13 .03, subd. 6, including the issuance of appropriate protective orders. Counsel to the City or MCDA, from time to time and at any time, may return all or any portion of the Confidential Data to the Taylor Partnership, together with a certificate of such counsel that no copies thereof were distributed or retained. In that event, the Taylor Partnership shall receive and retain the Confidential Data at the Arena until the ?fth (5th) annual anniversary of the date of delivery and City or MCDA's Chief Financial Officer and legal counsel (reasonably acceptable to Taylor Partnership) may inspect such data at the Arena and make notes therefrom (which notes shall be Confidential Data). As to all or any portion of the Confidential Data so returned to the Taylor Partnership, the City and MCDA shall thereafter have no obligation to the Taylor Partnership under this Section. 20.06 of this Agreement. Enforcement. The MCDA acknowledges that the provisions of this Section 20.06 may be enforced by the Taylor Partnership against MCDA and City by such equitable remedies as the Taylor Partnership may elect and by such additional remedies as may be afforded to it under the Data Practices Act. 03123195 1:49am 56 Prior Confidentiality Agreement. The Con?dentiality Agreement between MCZDA, the City and the Taylor Partnership, dated March 9, 1995, with respect to the treatment of certain confidential data or any part thereof shall continue to govern the treatment of the. data referred to therein. until that Confidentiality Agreement expires by its terms or is terminated by the parties thereto. .. Expiration of Con?dential Treatment. From and after the fifth (5th) annual anniversary of the date of delivery of a quarterly report to MCDA as provided in Section 20.02.08, MCDA shall have no further obligation to treat that quarterly report as-Con?dential? Data under this Section 20.06.. ARTICLE XXI DISPUTE RESOLUTION Section 21.01 mm. In the event of any default, breach or other dispute between the parties in connection with this Agreement (collectively, the "Dispute?i, the parties shall comply with the following procedures (all of which, except litigation initiated as authorized in Section 21.02, shall collectively be referred to as Within seven (7) business days after written request (the "Request") by either party, the parties shall hold an initial meeting to attempt in good faith to negotiate a settlement of the Dispute. No Request concerning a Dispute may be made after the time allowed by any statute of limitations applicable to such Dispute. If within ten (10) days after the Request, the parties have not negotiated a settlement of the Dispute, the parties jointly shall appoint a mutually acceptable neutral person who is not affiliated with either of the parties (the If the parties are unable to agree upon the appointment of the Neutral within fourteen (14) days after the Request, either party may request the American Arbitration Association or its successor to serve as the Neutral or to select the Neutral or may require are parties to submit to any procedure of to select the Neutral, including without limitation the selection of as the Neutral. In order to resolve the Dispute, the parties shall develop a non-binding alternative dispute resolution procedure such as mediation, the conduct of a non?binding mini?trial or other procedure which may facilitate resolution of the Dispute (the "Mediation") with the assistance of the Neutral. The Neutral shall make the decision as to how, when and where the Mediation will be conducted if the parties have been unable to agree on such matters by the earlier of seven (7) business days after the appointment of the Neutral or twenty-one (21) days after the Request. The parties shall participate in good faith in the Mediation to its conclusion. If the .953 snares 1:4Qam 57 parties resolve their Dispute through their own negotiations or in the Mediation, the resolution shall be reduced to the form of a written settlement agreement which shall be binding upon the parties thereto and shall preclude any litigation with respect to such Dispute. Section 21 .02 Arbitration. If the parties have not resolved the Dispute through the Mediation within thirty (30) days after the Request, if the Dispute involves matters which innthe aggregate'will entail monetary liability to one or the other party of not more than Two Hundred Fifty Thousand ($250,000) Dollars, and if the Dispute does not involve matters affecting the enforcement of the covenants or remedies of the Taylor Partnership or MCDA in Article VII, then at any time thereafter, and prior to resolution of the Dispute by the Mediation, upon written demand by either party, the Mediation shall cease, and the Dispute shall be submitted to arbitration (the "Arbitration") for resolution by an arbitrator or a panel of arbitrators whose number shall be determined and who shall be selected In accordance with the rules of the The site of the arbitration shall be Minneapolis, Minnesota. Arbitration shall be conducted in accordance with the rules of the provided, however, each party shall have the right to require the production of relevant documents and other relevant information from any other party and to oral argument before the arbitrator(s), and the award of the arbitrator(s) shall be in writing and shall state the evidence and reasoning that form the basis for the award or determination, and the arbitrator(s) shall have no authority to alter or amend this Agreement. If the amount in dispute exceeds the sum of Two Hundred Fifty Thousand ($250, 000) Dollars, or involves or relates to the covenants or remedies set forth in Article VII, either party may initiate litigation as provided in Section 21.03 and shall not be subject to arbitration unless the parties, at that time, mutually agree in writing to arbitrate the Dispute. I Section 21.0.3 Exclusivitv of ADR. Neither the requirement to utilize nor the pendency of any ADR procedure shall in any way invalidate any notices or extend any cure- periods applicable to the matter at issue. Except as expressly provided to the contrary in this Article XXI or elsewhere in this Agreement, these ADR procedures require that the parties use these ADR procedures exclusively rather than litigation as a means of resolving Disputes of the type and involving the amounts described in Sections 2101 and 21.02 or to determine the consequences of a default and the implementation of the remedies therefor as provided herein. Section 21.04 Litigation. If any Dispute involves any matter not subject to Arbitration as provided in Section 21.02 and if the Mediation does not resolve the Dispute, either party may bring the matter to suit in the Hennepin County District Court which shall have 03l23!95 1:49am 58 exclusive jurisdiction for any such action and in any Equitable Litigation. In the event of litigation under this Article XXI, all discussions by or among the parties, all documents and other data exchanged by the parties and the report or other comments of the Neutral shall be deemed a part of settlement or compromise negotiations as referred to in Rule 408 of the Minnesota Ruies of Evidence and, except as discoverable under the Minnesota Rules of Civil Procedure and II admissible under the Minnesota Rules of Evidence, shall not be offered or received in evidence in the litigation. - ARTICLE CONDITIONS OF THE PARTIES Section 22.01 Conditions of MCDA. The performance of this Agreement by MCDA shall be subject to the satisfaction of the following conditions precedent: 22.01 ..1 The Target Center Purchase Agreement shall have been executed by the parties thereto, all of the conditionsto closing and the closing of the Arena purchase shall have occurred pursuant thereto; 2201.2 The closing of the Taylor Partnership purchase of the Team under the Team Purchase Agreement shall have occurred pursuant thereto; 22.01 The approval of the Taylor Partnership?s purchase and operation of the Team as set forth in the NBA resolutions of October 5, 1994 have not been revoked or materially and detrimentally amended; 22.01 ..4 MCDA shall have been provided the opportunity to conduct due diligence with respect to the financial condition of the Taylor Partnership and the Taylor Partnership?s financial ability to acquire the Team and perform this Agreement and shall have been completed to the reasonable satisfaction of 2201.5 shall have executed an agreement with MSFC providing for annual payments to MSFC of Seven Hundred Fifty Thousand in consideration of use of the Arena as provided in Minnesota Statutes, Section 473.556, subd. 16; 2201.6 MSFC shall have executed an agreement with MCDA to provide for use of the Arena and the transfer of the payments to 22.01.? The Operating Agreement shall have been executed by Ogden and MCDA and be in effect; 2201.8 The representations and warranties of the Taylor Partnership contained in Section 20.02 are true and correct in all material respects as of the Commencement Date; 03123195 1:49am. 59 2201.9 The Taylor Partnership has in all material respects performed and observed all covenants, agreements and conditions of this Agreement to be performed or observed by it prior to or on the Commencement Datej 22 .01 ..10 MCDA has received a certificate or certificates dated the date of the Commencement Date and signed by a responsible officer or officers of the Taylor Partnership and of MCDA certifying as to the matters set forth in Subsections 22.01 ..8 and 22.01.09 of this Section 22.01,: 22.01.11 MCDA has received a written opinion of counsel to the Taylor Partnership, addressed to each, dated the day of the Commencement Date covering such matters related to . the transactions contemplated by this Agreement as MCDA may reasonably request. 22.01.12 No action or proceeding has been instituted or threatened by any third party not an Affiliateof to enjoin or delay the performance of this Agreement which MCDA, in good faith believes represents a significant risk of success; 22.01 .13 An agreement has been entered into?between the Taylor Partnership and the Arena Partnership or its Affiliates binding on the successors or assignees of each as may be necessary to cause the basketball court and other facilities located in the Health Club to be made available for practices by the Taylor Partnership at reasonable times without cost to MCDA, for the lesser of thirty (.30) years or the period during which the Health Club continues to operate as a private sports and health club; and cause the arrangements whereby the Taylor Partnership has the right to grant Health Club memberships to accompany Private Suites license agree- ments in the Arena as in effect on the date of this Agreement to apply to all Private Suites licensees for the lesser of thirty (30) years or the period during which the Health Club continues to operate as a private sports and health club and reasonable evidence thereof has been provided to and 22.01.14 A copy of the Taylor Partnership-Ogden Agreement has been provided to counsel for MCDA pursuant to and subject to the Confidentiality Agreement referred te in Section 20.06, subsection and the Taylor Partnership and the Operator have duly executed said agreement. 031231295 1:493m 60 Section 22.02 Conditions of the Taylor Partnership. The performance of this Agreement by the Taylor Partnership shall be subject to the conditions precedent stated in this Section 22.02: 2202.1 The closing of the Taylor Partnership porchase of the Team under the Team Purchase Agreement shall have occurred pursuant thereto; 2202.2 The approval of the Taylor Partnership?s purchase and operation of the Team in the Arena has been granted and due evidence thereof provided to 2202.3 The representations and warranties of MCDA contained in Section 20.01 are true and correct in all material respects as of the Commencement Date; 2202.4 MCDA has in all material respects performed and observed all covenants, agreements and conditions of this Agreement to be performed or observed by them prior to or at the Commencement Date; . 2202.5 The Taylor Partnership has received a certificate or certi?cates dated the date of the Commencement Date and signed by responsible officers of MCDA certifying as to the matters set forth in Sections 22023 and 22.02 22..02..6 The Taylor Partnership has received a written opinion of counsel to MCDA, addressed to the Taylor Partnership, dated the day of the Commencement Date covering such matters related to the transactions contemplated in this Agreement as the Taylor Partnership may reasonably request; 22.02.? No action or proceeding has been instituted or threatened against the Taylor Partnership by any third party not an Affiliate of the Taylor Partnership to enjoin or delay the Team purchase or obtain material damages from the Taylor Partnership with respect to the transactions contemplated by this Agreement or to enjoin or delay the performance of this Agreement, which the Taylor Partnership in good faith believes presents a significant risk of success; 2202.8 The Target Center Purchase Agreement shall have been executed by the parties thereto, all of the conditions to closing and the closing of the Arena purchase shall have occurred pursuant thereto; and 2202.9 The Operating Agreement shall have been executed by Ogden and MCDA and be in effect. 03l23195 1:49am 61 Section 22.0.3 Failure of Conditions. If any of the conditions set forth in Sections 22.01 or 22.02 are unsatisfied on or before the Commencement Date, the party for whose benefit the condition is granted may at its option: waive the condition and proceed with the performance of this Agreement on the Commencement Date; or delay the Commencement Date for up to ninety (90) days to allow the condition to satis?ed; or terminate this Agreement. The pendency of the following described litigation will not constitute a condition to either party?s performance of this Agreement: National Basketball Association, at al. v. Minnesota Professional Basketball Limited Partnership, et al. and Minnesota Professional Basketball Limited Partnership, et al. v. Top Rank of Louisiana, Inc.., Robert Arum, Fred Hofheinz, John O?Quinn, Robert A. Higley, and Patrick Graham, United States District Court, District of Minnesota, Fourth Division, No. and (ii) Top Rank of Louisiana, Inc. v. State of Louisiana. .. .. .. Minnesota Professional Basketball Limited Partnership, et Civil District Court, Parish of Orleans, State of Louisiana, No. 94-9984. If this Agreement is terminated as provided in this Section 2203, neither the Taylor Partnership nor MCDA shall have the right to specific performance or damages for a default of this Agreement. After performance of this Agreement has commenced on the Commencement Date, no party may thereafter raise any of the foregoing conditions as set forth in this Article XXII as an excuse for performance, 'unless a specific written reservation of said rights has been agreed upon by the parties, in writing, at or prior to the Commencement Date. I ARTICLE GENERAL-MISCELLANEOUS PROVISIONS Section 23.01 Taylor Partnership Improvements to the Arena. If the Taylor Partnership undertakes any improvements permitted by this Agreement in, on or about the Arena, within the Team?s'Leased Premises or for the Club Seats, the Taylor Partnership shall, on behalf, secure surety bonds of the kind required in Minn. Stat. 574.26, securing payment of just claims in connection with all work undertaken by the Taylor Partnership. Persons entitled to the protection of the bonds may enforce them as provided in Minn. Stat. 574.28 574.32. The Taylor Partnership shall include Exculpatory Language in all improvements contracts and said contracts shall also provide that no contractor or persons 03I23i'95 1:49am 62 performing work at the Arena is entitled to a lien on the Arena or any property of MCDA under the provisions of Minn. Stat. 514.01 -- 514.16 and the Taylor Partnership shall post a prominent, readily visible notice to that effect within the vicinity of all".work in progress. Section 23.02 interpretation .. The terms and the drafting of this Agreement are the product of bargaining among the parties. No ambiguities shall be construed in favor of one party on the grounds that the other party drafted this Agreement. Section 23.03 Amovals Notices. All approvals required by this Agreement shall be in writing and all notices and communications given pursuant to this Agreement shall be in writing'and shall be deemed properly given if personally delivered, sent by commercial expedited delivery serVices or certified United States mail, postage prepaid, return receipt requested addressed as follows or sent by facsimile telephone transmission, followed by a mailing or delivery as provided in clause made not later than the following day: COMMUNITY DEVELOPMENT AGENCY 600 Crown Roller Mill 105 Fifth Avenue South Minneapolis, MN 55401 ATTENTION: Executive Director and Finance Officer Fax No. (612) 673-511 '3 WITH A COPY TO: McGrann Shea Franzen Carnival Straughn 8: Lamb, Chartered 800 LaSalle Avenue, Suite 2200 Minneapolis, MN 55402-2041 ATTN: Andrew J. Shea Fax No. (612) 339-2386 .95G 0323195 1:4Qarn . 6,3 TAYLOR PARTNERSHIP: TAYLOR SPORTS GROUP, INC. 1725 Roe Crest Drive North Mankato, MN 56003 President . Fax No. (507) 625-2988 WITH A COPY TO: Regan, Regan Meyer 115 East Hickory Street Mankato, Mn 560033 ATTN: John E. Regan, Esq. Fax: (507) 345-1182 Each party may by notice to the other specify a different address or telecopier number for subsequent notice purposes. Notice shall be deemed effective on the date of actual receipt if delivered or sent by facsimile transmission or, if mailed alone, three (3) days after the date of mailing, whichever is earlier. Section 23.04 Time of Essence. Time is of the essence with respect to the performance of each of the covenants and obligations contained in this Agreement. Section 23.05 Relationship of Parties. No partnership, joint venture, landlord- tenant (except with respect to the Team?s Leased Premises) or other legal relationship is established between the Taylor Partnership and MCDA under this Agreement or any other agreement referred to in this Agreement. The relationship of the Taylor Partnership and MCDA is unique as provided for and contemplated under this Agreement. The Taylor Partnership acknowledges that this Agreement confers upon it a mixture of rights, primarily the right to profit from the playing of Team Games at the Arena, and that while certain rights to use the Arena for the pursuit of these purposes are granted to it, this Agreement is not and shall not be construed as a lease of real property (except with respect to the Team's Leased Premises). Accordingly, and notwithstanding Section 4.01, the Taylor Partnership has no rights to and shall make no claim to any proceeds arising from public condemnation of the Arena or any portion thereof (other than such statutory rights as it may have directly against the condemnor for relocation or moving expenses or for improvements it has installed in the Team?s Leased Premises, to the extent that the award otherwise due MCDA is not reduced by such claim), no rights to insurance .956 03123195 1:49am 54 proceeds or any portion thereof payable or' paid on account of destruction or damage to the Arena, no rights to grant its rights to use the Arena to any other person (except as provided for and with respect to the space described in clause of Section 4.01) and no rights to cure, remedy or redeem (statutory or otherwise) except as are specifically granted in this Agreement, and Taylor Partnership hereby waives and renounces any and all claims to all such rights without qualification. Taylor Partnership acknowledges that if its rights to use of the Arena are'terminated as provided in this Agreement, such redemption rights as it may have with respect to the Team?s Leased Premises are de minimis as compared to its rights to use the Arena for the playing of Team Games, that no consideration is made or provided to MCDA by the Taylor Partnership which constitutes or may be designated as rent, and that the remedies and dispute resolution procedures provided for herein adequately provide the protection it has bargained for and that resort to any law (statutory or otherwise) governing a lease of real property which provides for the rights and remedies waived would not and should not in any way or fashion better serve or protect its interests or the public purposes served by this Agreement. The Taylor Partnership, its employees, agents, independent contractors and licensees shall not be considered employees or agents of MCIDA or to have been authorized to incur any expenses on behalf of MCDA or to act for or to bind MCDA. MCDA, its members, officers, employees, agents and independent contractors shall not be considered employees or agents of the Taylor Partnership or to have been authorized to incur any expense on behalf of the Taylor Partnership or to act for or to bind the Taylor Partnership. Section 23.06 Severabilig. If any provision of this Agreement shall be adjudged invalid or unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law. Section 23.07 Rights to Contract for Use of the Arena. This Agreement confers certain specific rights upon the Taylor Partnership for the purpose of playing Team Games in the Arena, upon the terms and conditions provided for herein. This Agreement does not confer further or other rights to the use or to contract for the use of the Arena. However, this Agreement shall not preclude the Taylor Partnership from obtaining such rights from the Operator pursuant to the Taylor Partnership?Ogden Agreement, subject to the terms and conditions of the Operating Agreement. 03I23r95 1:49am 65 Section 23.08 interpretation. To the extent permitted by the context in which used, words in the singular number shall include the plural. Section 2?3 .09 Assignment, Binding Effect. The assignment of this Agreement by the Taylor Partnership is governed by the provisions of Article Villf The MCDA may assign this Agreement to the State of Minnesota or any public body corporate and politic under the laws of the State of Minnesota if: the assignee assumes all of the obligations of MCDA as provided in this Agreement and in the Operating Agreement; either the assignee has provided to the Taylor Partnership such information as the Taylor Partnership deems necessary and appropriate to confirm that the assignee has or has available to it sufficient financial resources to perform its obligations pursuant to this Agreement, or (ii) MCDA agrees to remain liable for any failure of the assignee to perform its obligations under this Agreement, and the MCDA or the assignee shall have cured all defaults or breaches under this Agreement having occurred prior to and pending at the time of the assignment. Unless MCDA retains liability as provided in clause of this Section 2'3 .09, upon assignment by MCDA, MCDA shall be released from all obligations and liabilities arising under this Agreement from and after the effective date on which the assignee has assumed MCIDA's obligations and liabilities. The assignment of the options granted by the Taylor Partnership in Section 7.04.01, 704.3 and 7.04.4 shall be governed solely by those Sections and not by-this Section 23.09. This Agreement, and the terms, provisions, promises, covenants and conditions hereof, shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and permitted assigns. Section 23.10 Captions. Captions and paragraph headings used herein are for convenience only and are not a part of this Agreement and shall not be deemed to limit or alter any provisions hereof and shall not be deemed relevant in construing this Agreement. Section? 2.3.1 1 Counterparts. Entire Agreement. This Agreement may be executed in multiple counterpart copies, each of which, taken together with the other executed counterpart copies, is deemed to be one and the same original agreement. This Agreement and the Exhibits referred to herein (each of which is incorporated herein), constitute the entire understanding and agreement of the parties with respect to the subject matter of this Agreement. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto .956 . 03f23195 1:49am 66 and supersedes ail negotiations or previous agreements among the parties with respect to all or any part of the subject matter hereof. Section 23 .12 mm. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate officer of MCDA and the Taylor Partnership. This Agreement may not be changed modified or rescinded except in writing by MCDA and the Taylor Partnership, and any attempt at oral modification of this Agreement shall be void and of no effect. The failure of the parties to insist upon strict and prompt performance of the terms of this Agreement shall not constitute a waiver of any party 5 right to strictly enforce such terms thereafter In the event of a continuous or subsequent default by another party. Section 23.1.3 Applicable Law The laws of the State of Minnesota shall govern the interpretation and enforcement of this Agreement. Section 23.14 NBA Rules. MCDA Cooperation. MCDA shall use reasonable efforts (but without cost to MCDA or interference with contractual arrangements or other uses of the Arena or contrary to law) to accommodate the Taylor Partnership in any non?material changes that may be required in this Agreement in order to enable the Taylor Partnership to comply with written rules or regulations of the NBA, as may from time to time be in effect. I Section 23.. 15 Individual and Corporate Liabilmr. All obligations and liabilities under this Agreement on the part of MC DA and on the part of the Taylor Partnership are solely corporate or partnership liabilities and each party hereby releases each and every incorporator, limited partner, officer, agent, director, and member of the other party of and from any personal or individual liability under this Agreement, and no incorporator, limited partner, officer, agent, director, or member of MCDA or the Taylor Partnership shall at any time or under any circum- stances be individually or personally liable under this Agreement or for any action taken hereunder by MCDA or the Taylor Partnership or otherwise in connection therewith or for or on account of any failure on the part of MCDA or the Taylor Partnership under this Agreement. Except for its obligations to purchase the Arena (as provided in Section 2.02) and make Capital improvements to the Arena (as provided in Section 10.01), in each case subject to the terms and conditions of this Agreement, MCDA has undertaken no covenant of pecuniary liability to the Taylor Partnership. Therefore, subject to the exceptions in the preceding sentence, MCDA shall have no pecuniary liability to the Taylor Partnership and revenues, assets and funds shall not be subject to claim or attachment by the Taylor Partnership. .956 03123195 1:49am 57 ARTICLE XXIV EFFECTIVE DATE, CLOSING On the Commencement Date, there shall be held a closing meeting of the parties to this At such meeting, all documents, certi?cates and opinions due pursuant to this Agreement, ged.. At such time as the meeting has been completed, Agreement shall be delivered and exChan and not prior thereto, the Taylor Partnership shall enter upon the Arena premises and its use of the?Arena as provided in this Agreement. 032395 1:49am 68 IN WITNESS WHEREOF, the parties have caused the execution of this Basketball Playing Agreement by their duly authorized officers as of the date 'of this Basketball Playing Agreement. MINNESOTA TIMBERWOLVES BASKETBALL LIMITED PARTNERSHIP BY TAYLOR SPORTS GROUP. INC.. GENERAL PARTNER By th/sz 0 Its QM By ?aw [ts 90:: Signature Page to the Basketball Playing Agreement, dated as of March 23, 1995. MINNEAPOLIS COMMUNITY DEVELOPMENT AGENCY By Way, ??l'ts Deputy Executive Director and By- Its E'rn?ance Officer Approved as to Form and Execution: McGrann Shea Franzen Carnival Straughn Lamb, Chartered By Mm, Signature Page to the Basketball Playing Agreement, dated as of March 1, 1995. Exhibit 1 .1 Arena Legal Description Land Survey No. 1662, and Tract A and Tracts Tracts through H, inclusive, Registere way No. 1664, all in Hennepin County, Minnesota. through Z, inclusive, Registered Land Su Exhibit 1 .2 Amount Specified Under Definition of Designated Target Center Related Revenues (Item (iv) of Designated Target Center Reinted ngvenues) Egan-.3; Year Eng; 11g Item [12? 1% 12/31/95 90,000 12/31/93 135,400 12/31/97 233,332 12/31/93 334,372 12/31/99 439,113 12/31/00 593,492 12/31/01 707,033 12/31/02 . 320,999 12/31/03 933,329 12/31/04 1,039,179 12/31/05 1,133,354 12/31/03 1,311,334 12/31/07 1,443,920 12/31/03 1,579,937 12/31/09 1,720,035 12/31/10 1,334,333 12/31/11 2,012,933 12/31/12 2,133,055 12/31/13 2,323,737 12/31/14 2,393,449 12/31/15 2:465:253 12/31/13 2.539.210 12/31/17 2,315,337 12/31/13 2,393,343 12/31/19 2,774,334 12/31/20 2,357,904 12/31/21 2,943,341 12/31/22. 3,031,950 12/31/23 3,122,903 12/31/24 3,213,593 12l31/25 .212111221 TOTAL $55, 129,544 Exhibit 1.3 Health Club Legal Description Tracts through L, inclusive, Registered Land Survey No. 1664, all in Hennepin County, Minnesota. Exhibit 4.01(a) Assigned Administration Office Space M. A Iltll?l Lu 1:LIHOIHI ?nuta v73.mmu llil . . . . . . . . I l_ l? I 'l I uni ?awn?HF d? I a'aia?uea "an IO Siltlnfrret/ "In: I 77V Exhibit 4.01(b) Assigned Video Production Space .93: H19 133815 "?ana?l Hdell T070645 7n: IU ru. ?an BONSAV nau- i I. .. Iilalli"in. nun ?Inn?? l ml mu ?mu-Ill a nu -u Ian!" Il?l? unluau' an 1' til . "Ill 19ml!) i?l?ll In)" :3 in 0N3 IST. AVENUE N. '03 SI 18 (Lt'l . .- - . 1 naunug HE: Eui?i?ii. - w-l??A -. Mt-lt-k-a nut-n elm-m un?t-W} - . . oocn I .. I I I 1 CONIIOL ARENA A 1 A V4 Ill?ll?l?tl AND l?fl?l?tl?. A I of l' (thtt CDHYIOL 1 CLUB IICIIVIN 1, ?x W. .. - . math; I . urvtn I . . Snug,? :19 It I I A: iljt I IA lL 0 II 1 ccun Exhibit 4.01(c) Assigned Teani Locker, Dresser and Shower Space and Team Training Room Space qulluu alga HH ?qr? ?mil I I . .?llL 2ND AVENUE ifil r_ l?ifl UNITtho. Io OM- Iul uhincQIjaagu IllIlliilt ISI AVENUE N. u'q ?5 1' P4 sum 5: 0M SSING 900? wants ?rociemw HIE 1 I noun ?nun oatss'o Iona ?"531 8003! I I I ?1 121 Olen lo Hlo- "11-1111:- WU :1 I I i EEA 77:? 400(5? 4700/14 5?9 Koo/Vt 9 IUJ I Jl. TVUH. 721's 0M SSING MIOH nutss'o IDOH uu: mm .U. 3:793?: 'tdhli- '1 -, . - ?mammo' gig-i" W3 mun 1 I 0 LOCIER mm olln lo mp4? 1? a 46%" I I 771? 40CMW . $9 Koo/Vt Exhibit 4.01(d) Private Suites can an. GNOOH 9411331 I 9311MB 31mm 9 13101 ?15 .1. .i 159:: . . 77H. a 4- . Eli-'2. :E'l'i _m fix.? i. 53?3?. 9:17,? :5 gig. .3 6' I 'l a It'. 22' [5,331.2-.unzobn-ca-I? 9 ?In: . i Mia-1.5.90.9:rsL-qri-Eni can?alum-Il?rctt?lu :T?nh i . a? muyallp?l .2.- ?-13 V!wt $331.35 - f; I?ll . I . DO. 0? jag-I .I. ?Luanda-1.: .?sft. . 31' ?w 8TH N. (1N3 Exhibit 4.07 Permitted Encumbrances 10. ll. EXHIBIT 4.07 (Permitted Encumbrances) Real estate taxes not yet due and payable. Street easement(s) described in Document No. 5504295. Street easement(s) described in Document No. 1251876. Skyway Agreement dated June 14, 1991, filed December 16, 1991' as Document No. 2144210. Affidavit made pursuant to Minn. Stat. 116.48, Subd. 6, dated December 2 0 1994 filed January 9 199 5 as Document No . 2580991. Affidavit made pursuant to Minn. Stat. 116.48, Subd. 6, dated December 20, 1994, filed January 9, .1995 as Document No. 2580990. Declaration of Restrictive Covenants and.Easements dated.as of March 1, 1995 made by' Minneapolis Community Development Agency. MASC Use Agreement dated as of March 1? 1995 by and between Minnesota Amateur Sports Commission, Minnesota Sports Facilities Commission and Ogden Entertainment Services, Inc. Arena Lease, Operating, Management, Use and Assurances Agreement dated as. of March 1, 1995 between Ogden Entertainment Services, Inc. and Minneapolis Community Development Agency. Commission Use and Occupancy Agreement dated as of March 1, 1995 between Minneapolis Community Development Agency. Any and all arena suite license agreements. Exhibit 1 0.1 Maximum Annual Credit to Capital Improvements Reserve zigca gear Ending 12/31/95 12/31/95 12/31/97 12/31/93 12/31/99 12/31/00 12/31/01 12/31/02 13/31/03 12/31/04 12/31/05 12/31/05 12/31/07 12/31/00 12/31/09 12/31/10 12/31/11 '12/31/12 12/31/13 12/31/14 12/31/15 12/31/13 12/31/17 12,31/18' 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 TOTAL 115111101130 Annual Credit to Capital Mow/merits Reserve $300,000 $300,000 $300,000 $300,000 $300,000_ $500,000 $500,000_ $500,000 $500,000 $500,000 $500,000 $500,000. $500,000 $500,000 $500,000 $750,000 $750,000 $750,000 $750,000 $750,000; $750,000j 5750,0001 $750,000, $750,000 ,s750,000, .$1,000,000 151,000,000 $1,000,000_ 51:000,000; $1,000,000; $21,000,000, Exhibit 20.012 No Conflicts Exhibit 2032.4 No Conflicts